Fair Isaac Corp.

We expect the company to adopt a more aggressive financial policy with more shareholder distributions but we believe the company remains committed to the current rating. Although adjusted leverage has increased to the high end of the range, we expect FICO will manage adjusted leverage in the mid- to high-2x area (see chart 2). In 2022, we expect about $750 million to $850 million in share repurchases. The stable outlook reflects our view that FICO will maintain its competitive position within the Scores and Software segments, driving high-single-digit total revenue growth and adjusted EBITDA margins in the 40% area over the next 12 months. We expect the company will continue to generate strong free cash flow that it will use

...Future price increases within the Scores business has the potential to exceed management's guidance of 6% total organic revenue growth in 2022. Fair Isaac Corp.'s (FICO) previous price actions that began in 2018 were broad-based within business-to-business (B2B) solutions, but we expect the new increases to be targeted toward specific end markets such as insurance, health care, and international markets, in addition to different end users within the traditional mortgage, auto, and credit card solutions. Through continued product innovation, its strong brand recognition, and entrenched position in the credit decision process, we believe the company has long-term opportunity for further strategic price increases. Software revenues will likely remain irregular as the company transitions its delivery to cloud (platform) from on-premise (non-platform); however, we expect mid-single-digit percent growth in 2022. We believe a large portion of recent declines in software revenue were primarily...

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