Fair Isaac’s revenues stalled in fiscal 2007 (USD 822 million versus USD 825 million in 2006). Based on Q2 results and forecasted revenues for fiscal 2008 the current trend seems to continue due to depressed market conditions for scoring services, as a result of the credit crunch. Its share price took a severe beating. To comfort shareholders Fair Isaac recently announced a plan to ‘Drive Growth and Profitability through Reengineering Plan.’ Accordingly it will divest certain non-strategic or unprofitable business units, which will reduce the company’s revenues and cost by approximately USD 65 million with negligible effect on income. In addition the company has begun to reduce cost by closing offices and eliminating approximately 200 low-priority positions.
To move revenue growth into a range of 7 % to 10% per annum Fair Isaac is increasing its R&D expenditures to USD 85 million, part of which is to create FICO 08 (score), to be rolled out in December 2008. It is taking its decision tools (FICO Scores) into adjacent market segments: Insurance, Retail and Healthcare reducing current reliance on the financial services sector. It aims to develop into a decision management applications provider, involving customers’ entire lifecycles of business decisions: from marketing, origination, customer management, collections & recovery, and fraud protection.
CEO Dr. Mark Greene wants to see non-US based revenue lifted from the current 35% to over 60%, having his eye on China, Brazil and India, which are high growth markets. He also voiced his desire to repair the relationship with the credit bureau industry. Fair Isaac is pushing ahead in Asia. The company announced its alliance with India’s credit bureau High Mark Credit Information Services earlier in February, adding to its cooperation with credit bureaus in Singapore and Korea, and some lenders in Thailand and Taiwan. Source: Fair Isaac Press Releases – Outsell Insight www.outsellinc.com
BIIA Newsletter May – 2008 Issue