FICO•FICO•Fair Isaac shares plunged 50% from a May 2025 high of $2,206 to $1,076, reducing market cap to $26 billion after a government decision and competitor challenged its mortgage-scoring monopoly. Q2 fiscal 2026 revenue rose 39% to $691.7 million, with Scores revenue up 60% to $475 million, while it authorized a $2 billion buyback.
Fair Isaac's share price fell roughly 50% from a May 2025 peak of $2,206 to approximately $1,076 by late June 2026, reducing its market capitalization to about $26 billion. The steep decline reflects investor concern over new competitive pressures and potential regulatory scrutiny of FICO's core scoring business.
A recent government decision and the emergence of a lower-cost competitor have challenged the company's decades-long position in mortgage underwriting. FICO's benchmark credit score, long integrated into lender systems at a wholesale royalty of $4.95 per score, now faces risks from shifting regulatory and market dynamics.
In the second quarter, revenue rose 39% year-over-year to $691.7 million, driven by a 60% surge in the Scores segment to $475.0 million at a 91% operating margin. Free cash flow for the quarter reached approximately $214 million, underscoring ongoing profitability despite market headwinds.
The company carries negative shareholders’ equity due to aggressive buybacks but maintains strong cash flow generation. In June, it authorized a new $2 billion share repurchase program supported by a $1.5 billion term loan and launched an accelerated share repurchase, increasing financial leverage as it seeks to drive per-share returns.
