Greetings. And welcome to the Fair Isaac Corporation Quarterly Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct the question-and-answer session. As a reminder, this conference is being recorded it’s Tuesday, November 10, 2020. I would now like to turn the conference over to Steve Weber. Please, go ahead.

Thank you, Eric. Good afternoon. And thank you for joining FICO’s Fourth Quarter Earnings Call. I am Steve Weber, Vice President of Investor Relations and I am joined today by our CEO, Will Lansing; and our CFO, Mike McLaughlin. Today, we issued a press release that describes financial results compared to the prior year. On this call, management will also discuss results in comparison to the prior quarter in order to facilitate understanding of the run rate of our business. Certain statements made in this presentation may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many uncertainties including the impact of COVID-19 on macroeconomic conditions and the company’s business, operations and personnel that could cause actual results to differ materially. Information concerning these uncertainties is contained in the company’s filings with the SEC, in particular, in the Risk Factors and Forward-Looking Statements portions of such filings. Copies are available from the SEC, from the FICO website or from our Investor Relations team. This call will also include statements regarding certain non-GAAP financial measures. Please refer to the company’s earnings release and Regulation G schedule issued today for a reconciliation of each of those non-GAAP financial measures to the most comparable GAAP measure. The earnings release and Regulation G schedule are available on the Investor Relations page of the company’s website at fico.com or on the SEC’s website at sec.gov. A replay of this webcast will be available through November 10, 2021. And with that, I will turn the call over to Will Lansing.

Thanks, Steve, and thank you, everyone, for joining us for our fourth quarter earnings call. I hope you and your families are healthy and staying safe as we deal with the effects of the pandemic. At FICO, we continue to make the health and safety of our employees a priority and are primarily working from home with most of our offices remaining closed. I’d like to take this opportunity to thank our entire team for their perseverance, their adaptability, and their commitment to our customers. On the Investor Relations section of our website, we posted some slides that I will reference during our presentation today. 2020 has been a remarkable year for all of us. At FICO, we have been focused on navigating an extremely volatile and unpredictable environment. I am happy to report that our Q4 results again demonstrate not only the quality of our management team but also the resilience of our business model. In our fourth quarter, we posted exceptional results that capped off a very successful fiscal year. We reported record revenues of $374 million, an increase of 23% over the same period last year. For the full fiscal year, we recorded $1.29 billion of revenue, up 12% from fiscal 2019. We delivered $59 million of GAAP net income and GAAP earnings of $1.98 per share, even after taking a large charge and restructuring and impairment losses. On a non-GAAP basis, the $3.25 earnings per share was up 62% from last year. And we are delivering strong free cash flow growth as well. Q4 free cash flow was $135 million, up 51% from last year. Total fiscal year ‘20 free cash flow was $343 million, up 45% from fiscal ‘19. We had another solid year throughout our business and our Applications segment had a great quarter of 12% versus last year, largely due to some Falcon license renewals. For the year, the segment was essentially flat, which is a good result considering we entered the year with difficult comps as a result of large license sales in fiscal ‘19. Applications bookings in the quarter were $117 million, up 42% over the same period last year, and $282 million for the full year, up 6% versus fiscal ‘19. In our Decision Management segment, we continue to prove that we are gaining traction with our new technology. We again delivered our largest DMS revenue quarter ever, up 36% from last year’s fourth quarter, and the segment was up 22% for the full year versus fiscal 2019. Our bookings were even more impressive. We signed $99 million in new DMS deals this quarter, up 62% from the same quarter last year. For the full year, we signed $199 million of new DMS deals, up 27% versus last year. Let me take a few moments to highlight the DMS success this quarter. First, we signed the biggest single platform in Centralized Decision Solution in company history with a large Latin American bank. The bank is looking to implement 19 different instances on our platform to derive the decisions to support use cases related to auto, credit line management for different retail products, and collections, among others on the corporate platform. We are signing more deals and bigger deals as we find operators eager to use our advanced analytic tools to automate their most difficult decisions. We continue to focus our strategy of investing for platform success; we have been making coordinated changes across the business to grow revenue from our on-platform solutions, favoring software-over-services, optimizing pricing, and managing operating expenses. In our fourth quarter, we made some changes, including reducing headcount and some of our facilities' footprint. Those were announced in September when we disclosed the charge we would be taking. Subsequent to the end of our fiscal year, we made the decision to exit our FICO Cyber Risk Score business, which we sold to Institutional Shareholder Services last month. We don’t make these decisions lightly. We are committed to becoming the preeminent platform player in decisioning analytics and we need to focus on that mission. That may mean exiting non-strategic products or not signing or renewing low margin project work. We are constantly looking at our business to identify areas for growth and improvement, and implement actions to deliver our strategic initiatives. We will continue to keep you updated on the progress we are making in our Software business and will be providing more information in the coming quarters to explain the transformation we are making there. In our Scores business, we had another very successful year. Scores were up 32% in the quarter versus the prior year and up 25% for the full year. On the B2B side, revenues were up 27% as we saw continued strong mortgage origination volumes. We saw a small rebound in auto originations in the quarter, while cards and other personal loan volumes continued to be down. The quarter also included a one-time true-up of royalty revenues. For the full year, B2B revenues were up 26% compared to 2019. Our B2C revenues were up 45% versus the same quarter last year and 23% for the full year compared to last year. We continue to see incredible growth in myFICO.com, which was up 62% this quarter versus last year, and we are also seeing good growth through our partners. As we look to our fiscal 2021, we see customers looking to accelerate their digital transformation and looking to our technology to facilitate the process. But we are also faced with a number of uncertainties. Obviously, we are all still dealing with the ongoing pandemic and all of the resulting health and economic impacts. We may see a new stimulus package from the federal government, but with the just completed elections, it’s difficult to predict any timing or impacts. It’s also difficult to predict what we will see in debt markets in the coming year. Obviously, the mortgage markets have been growing at phenomenal levels, but we can’t predict when or to what degree those markets will cool off. In auto and personal loans, there’s still a great deal of volatility and we cannot confidently predict how the next 12 months will play out. As in past years, we have instituted some pricing increases in various areas within Scores. But it’s also difficult to determine their potential impact because of volume uncertainty. We are coming off a quarter with record revenues and record bookings. But again, with an ongoing pandemic, it’s difficult to predict with certainty how quickly our solutions from the new sales will be implemented. In addition, our subscription-based go-to-market strategy will have an impact on the timing of revenue recognition in fiscal ‘21, causing less revenue to be claimed upfront and more to be taken ratably, which Mike will describe in his remarks. We are proud of how our business performed in fiscal ‘20 and are excited as we embark on a new year. But we are also realistic and understanding that we are in unprecedented times with many uncertainties. Because of this, we remain committed to providing as much transparency as possible but are not providing guidance for fiscal ‘21 at this time. I have some final comments in a few minutes. But first let me turn the call over to Mike for more financial details.

Thanks, Will, and good afternoon, everyone. As Will said, we had a great finish to our fiscal year and we are able to post exceptional results in the midst of a tumultuous business environment. Revenue for the quarter was $374 million, an increase of 23% over the prior year. Our full year revenue of $1.29 billion was up 12% over last year. Within our three reported business segments, our Application revenues were $168 million, up 12% versus the same period last year. The quarterly increase in revenue was driven by increased term license sales, including an unusually high number of large multiyear license renewals. Full year revenues for Applications were $602 million, roughly flat with last year. Applications bookings were up 42% over the same quarter last year and up 6% for the full year. In our Decision Management Software segment, Q4 revenues were $53 million, up 36% over the same period last year. Full year DMS revenues were $164 million, up 22% from fiscal ‘19. The revenue increases for both the quarter and the year were due to increased license sales as well as increased SaaS subscription revenue. Q4 DMS bookings were $99 million, up 62% from the previous year. For the full year, DMS bookings of $199 million were up 27% over last year. Finally, our Score segment revenues were $153 million, up 32% from the same period last year. The B2B part of the business was up 27% over the same period, driven by high volumes in mortgage originations and a one-time true-up of past royalties. B2C revenues were up 45% from the same period last year; both myFICO.com and partner revenues grew significantly. For the full year, Scores revenues were $529 million, up 25% from last year. This quarter, 74% of total revenues were derived from our Americas region, our EMEA region generated 18%, and the remaining 8% was from Asia-Pacific. Recurring revenues derived from transactional and maintenance sources for the quarter represented 71% of total revenues, consulting and implementation services revenues were 13% of total quarterly revenues, and licensed revenues were 16% of the total. SaaS software revenues, not including related professional services revenues, for the full year were $237 million, up 11% from fiscal 2019. We had record total bookings in Q4 of $235 million, up 46% from the previous year. These bookings generated $34 million of current period revenues, which is a 15% yield. Full year bookings of $537 million represent an 11% increase from last year. SaaS bookings were $221 million for the year, up 18% from 2019. As you may recall, our total bookings lagged in Q2 and Q3 of this year due to disruptions from the pandemic. But the strong finish put us in line with our annual expectations. Our operating expenses totaled $289 million this quarter, including $42 million of restructuring and impairment charges. Excluding those one-time charges, expenses were $247 million, compared to $231 million in the prior quarter, up $16 million due to increased expenses associated with additional revenue and incentives expenses. Our non-GAAP operating margin, as shown on our Regulation G schedule, was 41% for the quarter and 34% for the full year. We delivered non-GAAP margin expansion of 400 basis points for the full fiscal year. GAAP net income this quarter, which again included one-time charges, was $59 million, up 8% from Q4 and fiscal 2019. Our non-GAAP net income was $97 million for the quarter, up 59% from the same quarter last year. For the full year, GAAP net income was $236 million, including $45 million of restructuring impairment charges and $50 million of reduced tax expense from one-time excess tax benefits recognized upon the settlement or exercise of employee stock awards. Non-GAAP net income was $292 million, up 28% from the prior year. Our effective tax rate for the full year was 8%, including the $50 million of reduced tax expense from excess tax benefits. We expect our FY 2021 recurring tax rate to be approximately 26% to 27%, compared with 28% at FY ‘20. That expected recurring tax rate is before an estimated excess tax benefit of approximately $20 million in FY 2021. The resulting net effective tax rate is estimated to be about 20% in fiscal ‘21. Free cash flow for the quarter was $135 million, compared to $90 million in the same period last year, an increase of 51%. For the full year, free cash flow was $343 million, up 45% from last year’s $236 million. Turning to our balance sheet. At the end of the quarter, we had $157 million in cash. This is up $32 million from last quarter due to cash generated from operations, partially offset by $25 million of share repurchases. Our total debt now stands at $845 million with a weighted average interest rate of 4.3%. Regarding return of capital, we bought back 60,000 shares in the fourth quarter at an average price of $423 per share. In fiscal 2020, we repurchased a total of 675,000 shares at an average price of $348 per share for a total of $235 million. At the end of September, we had about $225 million remaining on the Board repurchase authorization, and we continue to do share repurchases as an attractive use of cash. Finally, as Will mentioned, we have recently shifted the sales of our on-premise software away from the sale of separate license and maintenance components to subscriptions that include both the rights to use the software and the ongoing maintenance. As a result, at the beginning of FY21, we adjusted our revenue recognition assumptions to be consistent with industry standards for software subscription sales. This change will result in less upfront revenue recognized in the year we sign subscription contracts and more revenue from those contracts recognized ratably during their term. This will likely result in a material decline in our software license revenues in fiscal ‘21. As a greater percentage of the total expected revenue will be received from newly signed on-premise subscription sales and renewals of existing term licenses spread over the term of the deal. This will not have an impact on our cash flows or the total revenue recognized from software license sales over the term of each subscription contract. With that, I will turn it back over to Will for his thoughts on FY21.

Thanks, Mike. As I said in my opening remarks, I am proud of our team and what we were able to accomplish in fiscal '20. I am excited about our prospects for 2021 and beyond. Clearly, there is uncertainty. But we are confident that our future is bright. We can’t pin down exact expectations, but we have proven our business to be remarkably resilient. And we are well positioned for the future. We will continue to innovate, fine-tune, and improve our business model with an eye toward improving margins and delivering on our potential. We look forward to keeping you all informed as we progress. Now, let’s turn to Q&A.

Thanks, Will. This concludes our remarks. Eric, if you could please open the lines for questions.

Absolutely. Thank you. Our first question comes from the line of Manav Patnaik. Please go ahead.

Thank you. Good evening, guys. Just on the software business clearly, a solid end to the year. You characterize it as a backlog that kind of pause because of the pandemic. But I was hoping you could give us just a little bit more color on how the clients are viewing the next few quarters ahead I guess. Is the fact that you ended strong just finding that they are back to normal or is there some shift in where they are finding these deals?

Hi, Manav. I think that, I wouldn’t say things are back to normal. But I would also say that with respect to the software that banks buy from us, things didn’t change that much. Remember, we have a very long sales cycle, 270 days on average. And so a lot of what we have booked in 2020 was pipeline built even earlier. We are now in the process of building pipeline for 2021. We have some pipeline built. We have more to build. And it’s a little hard to say how it will all turn out. But I would say that our customers have the same needs for the software that they had before the pandemic; if anything, there is increased appetite because the pandemic has gotten everyone focused on digital transformation. And our software obviously plays really well for that. So I anticipate continued interest; I don’t think we are just working off backlog.

Okay. Got it. And then if I may just on the score side, can you just quantify how much the two upgrades that you talked about? And then secondly, just going into next calendar year, I guess, how should we think about the pricing initiatives that you have been doing in the last few years, like, should we be expecting another one?

We can’t disclose the amount of the true-up; that’s held confidential. But as you know, these things happen every several years. We wind up doing a true-up of this sort. With respect to the pricing actions and scores, we took some actions, but as in years past, we don’t really know exactly how it will feather in, we don’t know exactly what volumes will be. And so, it’s a little hard to predict. I would say not a lot more nor a lot less than years past is probably a way to think about it. But we have uncertainty; we always wind up getting the activity in order from the Bureaus and that’s just the way it is.

Got it. And if I can just squeeze in one minute just selling this Cyber Risk Score business to ISS, I guess. I don’t know if you have ever sold a prune portfolio before. So I was just curious if there is something more that maybe we can see coming?

Yes. Good question, Manav. We have undertaken a pretty massive strategic look at our business over the last six or seven months. We hired a former McKinsey Director, Tab Bowers, to help us. And we have been really focused on what is strategic and what is not. The things that look promising but are really not central to our mission for building a decisioning platform are definitely being moved to the periphery and cyber risk scores are an example. When we sold that, we are proud of it. It was good technology. But our success in the decisioning platform business doesn’t hinge on whether we are successful in cyber risk score. So at some level, it was a distraction for us. Are there other things like that? We are in a state of constant evaluation, and we hope to find some things that are less strategic and free up resources for more strategic initiatives.

Thank you, guys.

Thank you. Our next question comes from a line of Kyle Peterson with Needham. Please go ahead.

Hi. Good afternoon, guys. Thanks for taking the questions. Just wanted to touch a little bit on the SG&A trajectory. You guys took some restructuring to rationalize headcount in real estate. How should we think about the expense trends over the next coming year given that some of these efficiencies could be permanent, but I’m not sure whether you guys are going to reinvest part of that in some higher growth areas such as DMS?

Yes. I will give you some quantitative thoughts. And then maybe we will provide qualitative. A big part of the reduction in expense run rate in the second half of the year was T&E. You can see from the additional slides we provide as part of this call that going into the pandemic, T&E run rate was about $30 million to $35 million a year. I think it was something like $100,000 in Q4. So that’s not going to persist, but it’s probably going to be less than 30 to 35. So even if we do have a vaccine and get back to normal. So that’s one moving piece. We have also taken action to reduce our geographic footprint and to a minor extent reduce headcount in non-strategic areas; that real estate saving will accrue over the years and that will be a one-way benefit. But with respect to some of the headcount reductions, we actually did that so that we could reinvest if not all of that money into headcount augmentation in areas related to the software platform, to pursue our strategic ambitions there. So we expect overall expenses for the business to grow, probably, again with the pandemic, so much is uncertain. But we expect flat to single-digit growth in expenses as the year goes on; maybe we will do better than that. If, perversely, we can travel for the whole full year. Hopefully, we can and we have some money to spend in that category. But hopefully, that at least gives you some color.

Yes. That’s helpful. Thanks for the color. And like it’s just more of a housekeeping item, particularly on some of these longer term licensed sales that you guys recognize this quarter. Was that more on the application side? Just trying to think about how we should incorporate that into our model moving forward?

Yes. If you look at the segment breakout in the 10-K, you can figure that out; you have to do a little quarterly subtraction math because we don’t show the quarter-over-quarter comparison in a friendly way as we might. But the licensed growth was really driven by renewals. We had a healthy new business license sale quarter as well as we would expect in the fourth quarter, particularly given some of the delayed purchases that flowed over from Q2 and Q3. But if you look at our $62.5 million of licensed bookings for the quarter, which is an increase of about $21 million or so, is renewals in excess of renewals we had in the year ago quarter. So, for better or worse, they are lumpy; we have to recognize a lot of upfront. And so, it was both an increase in new business sales, which was up sort of mid to high teens from year-over-year, but most of the increase was due to this lumpiness of renewals that happened to be a notable renewal quarter.

All right. Great. Thanks, guys. Nice quarter.

Thank you. Our next question comes from the line of Jeff Meuler with Baird. Please go ahead.

Yes. Thanks and good evening everyone. I wanted to ask on B2C scores, kind of a really, really good quarter. On the myFICO side, recognize you have a strong brand, recognize that the direct is the part of the market that’s been performing well lately. But anything that you have changed for myFICO, either in terms of go to market or product or just any other changes that are driving that exceptionally strong result?

I would say it’s more about the market than our approach, but we are continuously innovating. We are always working to enhance the value that consumers receive from our offerings. Our strategy for myFICO is to provide top-tier credit monitoring for consumers. We primarily partner with companies like Experian to go to market. In that sense, myFICO serves as a testing ground for us to try out new ideas and changes in our value proposition. This process is not new; it’s something we consistently engage in. I believe the main factor driving our growth is consumer demand, as there is significant interest among consumers in tracking their credit scores.

Okay, Mike, regarding the accounting changes, I have a couple of clarifying questions. First, I want to confirm that there’s no change to the timing of expense recognition. Also, do you consider booking to be the best way to assess the performance of the business throughout 2021? I assume that remains unaffected. Alternatively, is there another metric or method you plan to use to adjust revenue in order to provide a comparable impact or a way to monitor the business's performance as we move through 2021?

Thanks for those two questions. The first one definitely merits some additional detail, I think for everyone listening in on the call. So the change really is to get in line with industry standard for how subscription software is recognized. We had been recognizing revenue for on-premise term license sale essentially in the way that you would recognize a perpetual license sale where you had a one-time license upfront and then 20% maintenance every year. We were treating the total contract value of term licenses in sort of the same way. That led to about between 80% and 85% of the total contract value for a multi-year deal being recognized in the year you sign it, when you sign it, and only 15% to 20% recognized ratably in years two and three. With this change, again, which is what the vast majority of subscription software companies already do, we are shifting that revenue recognition to better reflect the fact that the value of the ongoing support and maintenance for the on-prem software in a term license, as opposed to a professional license situation, is higher than what we had been recognizing before. That nets out to about a 30% reduction in the percent of TCV recognized in year one versus years two, three, and in some cases years four and five. So when you think about the revenue side, and I know you have asked about the expense side as well, we had $128 million of license revenue in our software business in fiscal 2020. Going forward, we would recognize about 30% less of that in the first year and 30% will then be recognized as recurring revenue in the remaining years of the contract. So it’s all about revenue recognition for accounting purposes. It doesn’t change when we build a customer, how much we build them, or what total revenue will be recognized over the term of a contract. So hopefully, that’s clear. And you can do your own math on how much of a headwind that will be for revenue, but it will be a headwind for fiscal 2021 for sure. We want to make sure everybody notices that. With respect to expenses, these are on-prem license sales. So there isn’t that much expense associated with it. Our on-prem margins are consistent with what others earn 90 plus percent. So that, but it will change revenue recognition a little bit to the extent that we recognize more revenue ratably we match expense with the revenue recognition, but that’s not going to be a material impact relative to the revenue impact. And then you asked about booking, separate question. Yes, for now, that’s the best indicator to measure our current period performance in generating new revenue. It’s not a perfect metric, as you know it’s on a TCV basis, so term length matters, but we are sticking with that metric for now. As we move more to a subscription and SaaS business, annual recurring revenue and its derivatives becomes more important to us. And we do expect to be able to expose to you guys at some point during this fiscal year, just kind of metrics for myFICO, but we are not ready to do that yet.

Got it. Sorry for the three-parter. I appreciate all the detail.

Our next question comes from the line of Brett Huff with Stephens Incorporated. Please go ahead.

Good afternoon, guys.

Hi, Brett.

Good. I just want to follow up on pricing. Could you provide some insights on which parts of scoring you have focused on and are adjusting the pricing for? Any information you can share regarding the new round of price changes?

Yes. To the extent we are willing to share that information, it’s less to do with the type of scores and it’s more to do with the size of the customer. So we are into a more kind of a tiered pricing philosophy. And so I would say that the price increases were spread across the scores portfolio with a view to the size of the customer buying the scores.

And I am assuming that the smaller customers may have been getting a pretty good deal for a long time and maybe we are tweaking that based on just volumes.

Yes. Yes. Absolutely. And I would say they are still getting a good deal, but not as good a deal.

In terms of bank buying behavior, you touched on this a couple of times. I know your sales cycles are long. And so, when things come out of the pipe and get booked, I know it takes a while. But as you are having conversations with folks, I know you mentioned digitization is really important. But as you think about Falcon’s strategy direction, debt collector, sort of those key applications, any sort of detail on the conversations there that might be useful to know?

Historically, we have offered what can be described as point solutions for our bank customers, such as originations and customer management, fraud, and collections and recovery. Recently, we have observed increased engagement with the IT department and the CIO, along with a deeper understanding among our customers regarding the benefits and value of our platform. While they still purchase specific solutions like originations, they now recognize that it is part of a larger platform. This realization opens up numerous opportunities where small additional investments can yield significant returns. The most notable change in our discussions is that customers are increasingly grasping our platform strategy and are eager to take advantage of it.

Okay. Can you provide an update on the plan to transition everything to the core DMS platform on the app side? Sometimes you mention that Falcon will be fully completed in a year. Could you remind us where we currently stand regarding that timeline?

Yes. So I guess the honest answer is our work is never done. Okay. So it’s not like we will just say, okay. Now it’s on the platform, we can all go home. It’s a process. And so we have moved some core fraud applications from Falcon onto the platform. Our compliance is now available in Falcon X on the platform. We are also looking at, I would say, more flexible and modular approaches to providing fraud solutions on the platform. So there will be some of that. Some of our applications aren’t going to make it to the platform. So, for example, collections and recovery has a massive code base, 8 million lines of code. And it just doesn’t make sense to rewrite it onto the platform. And so that will remain a distinct code base. So, when are we done? I guess another way to think of it is, when are we going to feel that the platform is sufficiently mature that customers who want to have multiple use cases on the platform have that work? I think we are almost there; we are pretty much there. This Latin American bank deal that we just referenced, it started out with a conversation about a handful of use cases that they would want to do on the platform and they are now up to 19. I believe there’s more in the future. So it’s a different way of thinking about the value that we provide.

Great. Thank you so much. I appreciate it.

Our next question comes from Jake Williams with Wells Fargo. Please go ahead.

Good evening, everyone.

Hi, Jake.

Can you help us to understand how much of an impact mortgage items were in this quarter in the B2B Score segment?

Like last quarter, Experian, Equifax, and TransUnion reported their results before us last week and at the end of the prior week, which included their mortgage volume breakdowns. While we do not provide specific mortgage volume numbers, we can confirm that our figures were in line with their reports to the market. One indicated a 45% volume increase, and another was closer to 60%. However, it is somewhat ambiguous whether those figures pertained specifically to the quarter or included the month of October. Nonetheless, our volumes aligned with what was shared by them.

Got it. And then in terms of the average bookings term stretched out to 55 months this quarter from 37. Was that impacted by the decision to change the revenue recognition on-prem or is this an independent evolution?

No. It’s independent. It’s not related to that. What is related to it is we had some deals that are really long-term deals, much longer than typical than has been our usual. And I would say that that trend could continue. We will have to see how things play out. But I think when banks adopt our platform and standardize on the platform, it’s not surprising that they would want to lock us in for a long period of time with an understanding of what it’s going to cost. So I think there’s going to be pressure for longer-term deals on us.

So can we assume that the clients are the ones who are coming to you asking for this long-term deal to give them stability, and in return there’s probably some price escalator built-in each year?

Yes. We try to be smart about it and yes, it’s definitely client requests.

Thank you. Our next question comes from the line of Surinder Thind with Jefferies. Please go ahead.

Good afternoon. Following up on an earlier question about just the DMS platform, maybe can you provide a little bit more color on the investments you are making in terms of how you are redirecting some of the $36 billion in savings that you have towards additional headcount for the build-out of that platform? Is that simply we are just trying to accelerate the build-out of certain functionality? I was just hoping for maybe a better understanding of where the roadmap is in terms of what we are trying to get to, I guess, in terms of the function that we currently have versus where it will be for a fairly equivalent product to your on-prem and in your old architecture cloud stuff?

A key aspect of our platform strategy is ensuring interoperability of the data. We have established a data orchestration layer that allows us to source data from various locations and integrate it into the platform. We offer a broad spectrum of analytics applicable to this data and have different solutions built on top of this decision-making platform to address specific needs. As we move our applications to the platform, our approach is to identify which components of the solutions we should modularize and determine the microservices involved. We aim to deconstruct these applications into smaller parts that users can mix and match. Additionally, we have invested significantly in FICO Studio, a frontend programming environment that allows users to easily build workflows using drag-and-drop features based on the decision analytics from the platform. Our focus is not merely on transferring an application to the platform; instead, we aim to analyze the application, identify its component parts, and create microservices that can be utilized independently. This allows us to bring those components onto the platform for various use cases.

Fair enough. And then in terms of just a bigger picture question, obviously with a potential change in the administration, is there any other considerations that enter into the picture here where maybe could there be, let’s say, an acceleration in the upgrade cycle for, let’s say, from FICO 8 to FICO 9 or even to FICO 10 or something for that matter that might drive based on the differences in the policy administrations?

I am not sure that we will have a change in the rate and pace of adoption of new scores based on the administration. I do think that all lenders are really focused right now on how do they get the most value out of scoring algorithms. They are increasingly using things like the FICO resiliency index to complement the traditional FICO score to make these decisions. I wouldn’t say that’s driven by the administration; I think that’s more driven by the innovation coming out of our scores team. But there’s a tremendous appetite on the side of the banks to get the full benefit out of it. And so, we are pretty focused on that.

Thank you. Just a quick question about the B2C revenues, which are showing really strong growth. Can you share what the sustainable run rate looks like at this point? Is this initial phase indicative of a significant ramp-up due to market dislocation, or how should we anticipate the growth rate moving forward?

I think we have definitely experienced a spike due to the current environment. It’s clear that consumers are more focused than ever on their scores and whether they are increasing or decreasing. I frequently receive letters in the mail about this. The 62% increase I mentioned earlier is certainly influenced by the environment. As for the lifetime value and how long customers stay with us, it’s too early to draw conclusions, but we haven't noticed any significant changes. What we are observing so far reflects a similar attrition rate over time as we have historically experienced. So, we will remain vigilant.

Okay.

What we have noticed is that there’s an inexorable trend to consumers being ever more focused on their credit score. I mean, this has been every year, year in, year out has become bigger and more important to them. I am not sure that it’s like a spike up and then a ramp down. I mean, it may just be part of a trend.

That’s helpful. Thank you.

All right. Thank you. And Mr. Weber, we have no further questions from the phones at this time. I will turn the call back to you.

Thank you. This concludes our call today. Thank you all for joining, and we look forward to speaking with you again soon. Thank you.

Ladies and gentlemen, that concludes the conference call for today. We thank you for your participation and ask that you please disconnect your lines.