Good afternoon, and thank you for attending FICO's second quarter earnings call. I'm Dave Singleton, Vice President of Investor Relations, and I'm joined today by our CEO, Will Lansing; and our CFO, Steve Weber. 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 with the prior quarter to facilitate an understanding of the run rate of the business. Certain statements made in this presentation are forward-looking under the Private Securities Litigation Reform Act of 1995. Those statements involve many risks and uncertainties that could cause actual results to differ materially. Information concerning these risks and uncertainties is contained in the company's filings with the SEC, particularly in the Risk Factors and Forward-Looking Statements portion 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 these 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. And a replay of this webcast will be available through April 25, 2025. I will now turn the call over to our CEO, Will Lansing.

Thanks, everyone, for joining us for our second quarter earnings call. We have posted some financial highlight slides in the Investor Relations section of our website that we will reference during our presentation today. I will discuss this quarter's results and our increased guidance for the full fiscal year. We achieved strong results again, showcasing the resiliency of our business with solid growth in both Scores and Software. We reported Q2 revenues of $434 million, up 14% from last year. Our GAAP net income for the quarter was $130 million, an increase of 28%. We posted GAAP earnings of $5.16 per share, which is a 29% improvement year-over-year. On a non-GAAP basis, our Q2 net income was $154 million with earnings of $6.14 per share, reflecting increases of 27% and 29%, respectively. We generated free cash flow of $62 million in the second quarter and $182 million in the first half of fiscal '24. We have been returning capital to our shareholders through buybacks, repurchasing 144,000 shares at an average price of $1,246 per share during Q2. There is $367 million remaining on our Board repurchase authorization. In our Scores segment, our second quarter revenues were $237 million, up 19% year-over-year. In B2B, the current quarter revenues increased by 28% compared to the previous year. However, in B2C, revenues were down 4% year-over-year. Revenues from mortgage originations surged 85% year-over-year and represented 46% of B2B revenue and 36% of total Scores revenue. Auto origination revenues decreased by 1%, while credit card, personal loan, and other origination revenues fell by 9% compared to last year. We're seeing strong adoption of FICO Score 10 T for nonconforming mortgages. Since 2023, clients with over $100 billion in annualized mortgage originations and approximately $300 billion in eligible mortgage portfolio servicing have adopted the FICO Score 10 T, with plans for conforming mortgages rolling out according to FHFA's timeline. In our Software business, we achieved $197 million in Q2 revenue, up 8% from the prior year, driven by increases in on-premises and SaaS software, albeit slightly offset by a decline in professional services. Our land-and-expand strategy continues to yield strong growth in ARR and NRR, bolstered by heightened customer usage. Total ARR rose by 14%, with platform ARR expanding by 32% and non-platform ARR growing by 8%. Total NRR for the quarter stood at 112%, with platform NRR at 126% and non-platform NRR at 106%. Our total ACV bookings this quarter reached $17 million, and our pipeline remains robust, particularly for platform offerings. Before handing it over to Steve to cover financial specifics, I wanted to share some insights from the FICO World event we hosted last week. This four-day event attracted 1,200 attendees from over 400 companies across 60 countries. It provided a platform for discussions on the advantages of making real-time decisions at scale using the FICO platform. Current customers highlighted benefits such as improved profitability, enhanced customer acquisition and retention, cost reductions, expansion of product offerings, and increased employee efficiency. During the event, customers experienced live demonstrations showcasing various use cases of the FICO platform. We also introduced several innovations in response to market needs, including an open API framework, a FICO marketplace open ecosystem, and business composability. These initiatives promote collaboration, minimize silos, and enhance transparency regarding future outcomes. We will be sharing some content from FICO World on our YouTube channel in the coming weeks, and I encourage you to watch the demonstrations and presentations to gain more insight into our customers' enthusiasm for this innovative technology. I will discuss our outlook for the remainder of the year, including our increased guidance, but now I will turn it over to Steve for more details.

Thanks, Will, and good afternoon, everyone. As Will mentioned, we had another very good quarter with total revenue of $434 million, an increase of 14% over the prior year. Scores segment revenues for the quarter were $237 million, up 19% from Q2 of 2023. B2B revenues were up 28% driven primarily by mortgage originations revenues. Our B2C revenues were down 4% versus the prior year due to volume declines in our myFICO.com business. Software revenues in the second quarter were $197 million, up 8% versus Q2 2023. On-premises and SaaS software revenue grew year-over-year, while professional services revenues declined. This quarter, 84% of total company revenues were derived from our Americas region, which is a combination of our North America and Latin America regions. Our EMEA region generated 10% of revenues, and the Asia Pacific region delivered 6%. Our total software ARR was $697 million, a 14% increase over the prior year. Platform ARR topped $200 million this year for the first time at $201 million and represented 29% of our total Q2 ARR, up from 25% of the total in Q2 of 2023. Platform ARR grew 32% versus the prior year, while non-platform ARR grew 8% to $496 million this quarter. Our platform land-and-expand strategy continues to be very successful. Our dollar-based net retention rate in the quarter was 112%. Platform NRR was 126%, while our non-platform NRR was 106%. Platform NRR was driven by a combination of new use cases and increased usage. Non-platform was driven by customers' increased usage and by CPI price increases. Our software ACV bookings for the quarter were $16.8 million. As a reminder, ACV bookings include only the annual value of software sales and exclude professional services. Turning to expenses. Our total operating expenses were $239 million this quarter versus $221 million in the prior year. Our current expenses are a 4% increase over the prior quarter. As we indicated last quarter, we maintained focus on investments to accelerate the development of the FICO platform, and that incremental investment is relatively modest and built into our guidance. Our non-GAAP operating margin, as shown in our Reg G schedule, was 53% for the quarter, and that represents a 400 basis point increase from the same quarter last year. GAAP net income this quarter was $130 million, up 28% from the prior year's quarter. Our non-GAAP net income was $154 million for the quarter, up 27% in the prior year's quarter. The effective tax rate for the quarter was 25%. We believe that our fiscal year 2024 net effective tax rate is expected to be around 22%, while our recurring tax rate is expected to be around 26%. And as a reminder, the recurring tax rate is before any excess tax benefit and other discrete items that were recognized. Free cash flow for the quarter was $61.6 million, a 30% decrease from the prior year. The trailing 12-month free cash flow was $457 million compared to $494 million in the prior quarter. We do expect free cash flow to accelerate from the Q2 level in the next two quarters. At the end of the quarter, we had $177 million in cash and marketable investments. Our total debt at quarter end was $2.04 billion with a weighted average interest rate of 5.2%. Currently, 63% of our total debt is fixed rate. Our floating rate debt is prepayable at any time, giving us the flexibility to use free cash flow to reduce outstanding floating rate debt balances in future periods. In terms of return of capital, we did buy back 144,000 shares in the second quarter at an average price of $1,246 per share. And at the end of the quarter, we still had $367 million remaining on the Board authorization. And with that, I'll turn it back to Will for his thoughts on the rest of the year and to give the information on our increase in the full-year guidance.

Thank you, Steve. Our strategy remains consistent despite an uncertain macroeconomic environment. We're experiencing strong growth in our Scores business, even as the current rate environment has driven volumes lower. Throughout our business, we continue to invest in innovation. This is particularly evident as we see growing customer adoption and expanded use cases of the FICO platform. Our customers are delighted to be able to optimize interactions with their end customers through data-driven, composable solutions that are executed in real time. I'm pleased to report that today, we're raising our full-year guidance as we enter the second half of our fiscal year. We're raising our full-year revenue guidance to $1.69 billion. GAAP net income is now expected to be $495 million, with GAAP earnings per share of $19.70. Non-GAAP net income is now expected to be $573 million, with non-GAAP earnings per share of $22.80. With that, I'll turn the call back to Dave to open the Q&A session.

Thanks, Will. This concludes our prepared remarks, and we're now ready to take questions. Operator, please open the lines.

Our first question comes from Manav Patnaik with Barclays.

I'll start with the Software segment first, Will. We were at FICO World and your comments were quite positive. Can you help us understand the second quarter in a row of deceleration on the platform side? Last quarter, you mentioned some movement in the bookings or timing. Is there something more happening there? Is 30% the new normal now? Any clarification would be appreciated.

Yes, absolutely. So as you know, we had many, many quarters of over 50% growth in the platform, and then we had slowed to the 40s, and now we're in the 30s. And I think that's a reasonable and sustainable level for the foreseeable future. I think we had always anticipated some level of slowing just because as that number gets bigger, that was inevitable. And I think that's really all it is. We're not seeing anything that's cause for any kind of concern or alarm. Our customers are buying the platform. They're expanding the use cases once they've got the platform in. There's a little bit of timing issues around various deals, but I don't think anything really significant. I guess it's probably worth pointing out that the second half of the year is always bigger than the first half. And so there's more to come this year.

And Manav, I would just say we had a really difficult comp this quarter, too. The second quarter last year, the platform grew 60%. So we're growing more than 30% off of a pretty big number. It was a big step up last year in the second quarter.

Okay. Got it. That's helpful. And then maybe just one on the Scores, on the mortgage origination side or the moving pieces there, Steve. Maybe just how did volumes come in this quarter versus your expectations? And then when you think about the guidance raise, like what were the moving pieces there as well, please?

Yes. I mean you know how we guide. We're pretty conservative. We're not banking on things getting better anytime soon. I mean I think even when we gave guidance last year, people at that point were talking about six rate cuts in the year, and we weren't anticipating that. So the way we look at the guidance, and mortgage, obviously, being such a big piece of that, is that we don't expect things to get better in our fiscal year. And if they do, great, but it's hard for us to depend on that because obviously, the rates are going to be higher longer than anybody thought. So that's kind of how we look at that. So when they do come down, we'll enjoy that benefit, but we don't try to put a timeline on that.

So I wanted to follow up on mortgage. You've taken obviously a lot of pricing successfully the last couple of years. And I know you have a long-term strategic plan of value creation here. And there's been some noise from regulators, other bodies. I'm curious how you think about that. And what are some of the factors that you're considering as you think about your long-term strategic plan on pricing?

Well, as we've discussed in the past, we're catching up from 30 years of frozen pricing. And so our putting through price increases in this space is really a matter of trying to close the gap on the value that we provide relative to what we charge. The way we think about criticism, because you're right, every once in a while, there is noise about price increases. The way we think about it is transparency is our friend. And so we have increasingly been willing and interested to share exactly what our pricing is because it's such a small part of the overall bundle. So if the concern, whether it's from Congress or regulators or third-party groups, is about the level of expense associated with the FICO mortgage score, it's important for everyone to understand that we're talking about single-digit dollars in a bundle that costs a consumer about $6,000. So we point out the gigantic gap between what we charge and the bundle in which we reside. And we think that that's the way to do it. We think transparency is our friend.

Great. And then just to follow up on other originations. Maybe you can talk about what you're seeing on the card and auto side in terms of volumes versus pricing. Sort of what's the overall environment like? And maybe if you've adjusted your expectations for volumes just given the macro environment here?

I don't know that we've really adjusted our expectations. I think that what we're seeing is kind of in line with what we did expect, and it is a function of the macro environment. As we pointed out, we're down a little bit in auto and a little bit more in credit card and other. But I don't think it's any kind of surprise given the macro environment.

I'd like to revisit the Software business and specifically discuss the bookings. Considering the client conversations you've been having, which are obviously quite positive, how much should we attribute to the macro environment, given the overall slowdown? Is the earlier commentary that the slowdown is not related to the macro environment at all?

So I think that it's fair to put some of the explanation on the macro environment because what we're not seeing is losses to competition. What we are seeing is projects deferred or taking a little bit longer. And so I think it's very fair to attribute some of that to the macro environment.

Got it. And then I guess, turning to the non-platform piece. When you think about volumes versus pricing, I think you mentioned CPI, but just any other color that you can provide? Is this mostly growth within like Falcon? Or how does pricing work here? Is it just CPI is the right number, and that's how it should continue? Or how should we think about that?

So as you know, the non-platform business is very mature and we're deeply embedded, and yet our customers often prefer to renew and renew and renew. And so there's a cycle of multiple renewals typically associated with our licensed software and with our legacy and non-platform software. Our philosophy is to not push the limits on pricing there. The customers are the same customers who are buying platform from us and customers that we'll have a relationship with for the next 20 or 30 years. And so it's not about harvesting and gouging. We raise our prices to cover costs of adding features and functionality and cybersecurity and keeping the product current. But we're not really pushing the limits of what could be done on price there and don't really intend to.

I wanted to start on capital return. Obviously, it looks like you guys bought back a little bit more past quarter than the first quarter. How should we think about the pace of buybacks in the back half of the year? Obviously, you've seen a bit of a pullback in the shares, obviously, with market and such. And then also just given some of your comments on potential for free cash flow to accelerate as the year progresses. I just want to get your opinion on how you guys are thinking about that over the next few quarters.

We remain as committed to buyback as we have ever been. And it is our intent to continue to spend at least our free cash flow and often in excess of our free cash flow on buyback every year. And I don't expect that would change. Our leverage has slipped a bit as our earnings have gone up. And I guess that's a happy bonus of being more profitable. And in the fullness of time, you'll see that reflected in increased buyback.

Got it. That makes sense, and that's helpful. And just a follow-up, I guess, on the professional services piece of the business, I guess that revenue is falling off a bit. I guess that it's lower margin. But I just want to get your sense as to kind of is this, call it, $19 million to $22 million a quarter, is that kind of a good range to use moving forward given the mix of the business that you guys are selling? Or was there anything kind of one-time in this past quarter that dragged it down a bit below kind of historical levels?

I think it's a reasonable range to expect moving ahead. While we value our professional services, we remain primarily a software company. Our aim with professional services is to provide enough support to ensure quality installations and maintain customer satisfaction. We're also pleased to engage partners for some of the installation work. I don't anticipate our professional services will decrease much further than it already has. As you may know, it has reduced significantly, and we are likely at a level that would be difficult to fall below.

I just had a quick question on the expense trajectory. I was wondering what we should expect regarding either sequential or year-on-year growth in expenses for the rest of the year.

Yes, we had FICO World this quarter, which is a significant expense for us. As a result, you'll notice an increase in our Q3 spending associated with that. For the fourth quarter, we expect spending to be relatively flat or possibly decrease slightly. However, we do not anticipate any major increase in expenses for the remainder of the year, primarily due to the FICO World event occurring this quarter.

That's helpful color. And maybe just from a modeling perspective, the on-prem software, again, the de-emphasis there, that's maybe one of the reasons why that piece of the Software revenue has been muted. How should we think about that going forward? Any color?

About the on-prem software?

We are focused on being cloud-first, so our main priority is the cloud. However, if our customers want to use on-prem solutions, we will sell those to them. I do expect that the on-prem segment is unlikely to see much growth, but it probably won't decline significantly either because many of those systems are deeply integrated, and transitioning to the cloud will take years.

So I want to go back to the card, personal loan, and other origination revenue down 9%. I think the majority of that is cards. So is pricing a positive contributor to that line? And if so, just based upon the bureaus that have reported thus far, it doesn't seem like card volumes are down that much, but I'd love to get your thoughts on...

It's somewhat of a mixed comparison. This is specifically about the originations segment. Overall, our card performance isn't down significantly due to strong prescreen and account management efforts. The scores remain stable; this refers only to the origination part. There is very low pricing involved, making it challenging to draw direct comparisons with the bureau data. Each bureau has different banking subsets, so variations can occur across banks. This is solely related to the originations segment.

So depending on how you count it, we're in about 130 of the top 300 financial institutions globally. And of that, I'd say, 40% or so are on their first use case, maybe a little bit more than that.

And how many of those like just landed with you in the last year? And if you can just kind of like talk about the expansion path.

Most of them have landed in the last year. The typical path for a single use case is to eventually move to multiple use cases. Therefore, those that are still on one are usually the most recent.

Our next question comes from the line of George Tong with Goldman Sachs.

In Scores, you're catching up from 30 years of frozen pricing to close the gap with what you charge. You're closing the gap more quickly with mortgage than with cards and autos currently. To what extent can pricing in autos and cards close the gap at the same pace as the mortgages over time? What are some of the considerations?

Well, as we've talked about in the past, we take the entire portfolio of Scores every year, and we evaluate it from top to bottom, thinking through what is the elasticity of demand for that particular kind of score and where should the Scores prices move by CPI and not more than that and where should they move more than that. And so you're going to see variation in the portfolio always. I would never expect for us to raise prices the same amount across all scores. So yes, you could continue to expect them to be different.

Yes, it's hard to do that, George. I mean you can kind of back into it a little bit by looking at the ARR versus the NRR, but we don't have the detail to talk about use cases versus usage.

I guess maybe then qualitatively, would you say you're more in land mode or expand mode?

We are focused on acquiring as much business as possible. However, it's much easier to grow once we have customers on board. They often discover their own use cases, leading to growth primarily through expansion. Many of the initial use cases start small, and we see significant expansion from those initial engagements.

And you're on the right question. I think whether it's today or next quarter or the quarter after that, expand will exceed land sooner or later. That's inevitable, that's anticipated, that's coming. I don't think we're quite at the tipping point yet. I think land probably still exceeds expand, but I'm not sure.

Thank you. Thanks, everyone, for the great questions, and we had another great quarter. That's about all I need to say. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.