Fair Isaac Corp.

Overview Key strengths Key risks Strong brand recognition, industry adoption of its Scores business and a strong defensible moat around its FICO scores product. High proportion of transaction revenue, which makes it vulnerable to cyclical economic downturns. Leading portfolio of credit-decision and fraud-management software solutions, which provides pricing power. High distribution and end-market concentrations in the auto loan, credit card, and home mortgage markets. Moderate leverage in the mid 2x-3x range and strong free operating cash flow (FOCF). Significant competition from established and emerging software companies, as well as credit bureaus. The majority of the demand in this segment stems from business-to-business (B2B) customers using FICO's services to calculate consumers? scores and determine their creditworthiness in lending situations, and we

...Despite the weakening mortgage environment, we continue to expect the company will expand its Scores business in fiscal year 2023. The majority of the demand in this segment stems from business-to-business (B2B) customers using FICO's services to calculate consumers' scores and determine their creditworthiness in lending situations, and we expect this demand will remain healthy over the next year. Although we expect the mortgage environment will remain weak in 2023, especially during the first half of...

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