Fair Isaac Corp Q2 FY2025 Earnings Call

Good day, and thank you for standing by. Welcome to the Second Quarter 2025 FICO Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dave Singleton, please go ahead.

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 risks 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 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 on the Company's website at fico.com or on the SEC's website at sec.gov. A replay of this webcast will also be available through April 29, 2026. I will now turn the call over to our CEO, Will Lansing.

Thanks, Dave. Thank you, everyone, for joining us for our second quarter earnings call. In the Investor Relations section of our website, we've posted some financial highlights slides. We'll be referring to them during this earnings announcement. We had another strong quarter, and we are reiterating our fiscal '25 guidance. As shown on Page 2 of the second quarter financial highlights, we reported quarter two revenues of $499 million, up 15% over last year. We reported $163 million in GAAP net income in the quarter, up 25%. We reported GAAP earnings of $6.59 per share, up 28% from the prior year. We reported $193 million in non-GAAP net income in the quarter, up 25% and non-GAAP earnings of $7.81 per share, up 27% from the prior year. As you can see on Page 10, we delivered free cash flow of $65 million in our second quarter. Over the last four quarters, we delivered $677 million of free cash flow, which represents an increase of 45% over the trailing 12-month period ending March 31, 2024. We continue to return capital to our shareholders through buybacks by repurchasing 112,000 shares in quarter two. In our Scores segment, you can see on Page 6 of the presentation, our second quarter revenues were $297 million, up 25% versus the prior year. On the B2B side, quarter two revenues were up 31% versus the prior year, primarily driven by mortgage originations revenues. On the B2C side, quarter two revenues were up 6% versus the prior year, primarily driven by revenue from indirect channel partners. Second quarter mortgage origination revenues were up 48% versus the prior year. Mortgage origination revenue accounted for 54% of B2B revenue and 44% of total Scores revenue. Auto origination revenues were up 16%, while credit card, personal loan, and other originations revenues were flat versus the prior year. FICO continues to build financial inclusion globally. In the quarter, we announced a Kenya-specific FICO score. Through our partnership with TransUnion, the FICO Score is part of a credit risk solution, which empowers lenders to serve previously underserved consumers in small, micro, and medium-sized enterprises. We also continue to raise awareness of financial literacy. One way we do it is by encouraging consumers to manage their financial health by checking their free FICO score at myfico.com/free. Over the last year, FICO has seen nearly a 70% increase in users accessing their free FICO scores. I hope you'll tell all of your friends to get their free FICO score at myfico. Most importantly, we continue to focus on innovation. FICO Score mortgage simulator is now available for lender use through Exactus, the largest credit reseller in the mortgage industry. Mortgage professionals can leverage valuable insight from the simulator to help drive smarter decisions that can present more loan options and favorable interest rates for customers. We continue to drive strong adoption of FICO Score 10 T for non-GSE loans and we're seeing strong results from our early adopter program. Lenders who use the classic FICO Score today can receive FICO Score 10 T for free through this program so they can evaluate the advantages before fully moving to utilizing FICO's newest and most predictive score. Lenders in the program have been able to validate the power of FICO Score 10 T in real-world mortgage underwriting, loan production, execution, and servicing. Refer to the February 24 post in our FICO newsroom to see a list of recent additions to our growing list of FICO 10 T adopters. As of today, we have clients with over $284 billion in annualized mortgage originations and about $1.43 trillion in eligible mortgage portfolio servicing that have signed up for FICO Score 10 T. In our Software segment, we delivered $202 million in quarter two revenue, up 2% from the prior year. The revenue increase was driven mainly by growth in license revenue recognized at a point in time, partially offset by a decline in professional services. We continue to drive growth in ARR and NRR through our land-and-expand strategy with expansion driven by increased customer usage. As shown on Page 7, the total ARR was up 3% with platform ARR growing 17% and non-platform ARR declining 3%. Total NRR for the quarter, shown on Page 8, was 102%, with platform NRR at 110% and non-platform at 96%. ACV bookings for the quarter were $21.8 million compared to $16.8 million in the prior year. In our software business, we continue to expand our partner channels. FICO recently partnered with Fujitsu, a top digital servicing company in Japan. Together, we will accelerate digital transformation support for Japanese financial institutions, delivering a future of smarter, more connected banking and payments. This quarter, we announced a partnership with dacadoo to bring AI-powered precision to the life insurance industry. Dacadoo is a Swiss-based technology company that develops solutions for digital health engagement and health risk quantification. By integrating FICO platform with dacadoo's Health Risk Quantification Risk Engine, we create a solution that enables insurers to target their life insurance products to specific profiles. This allows dacadoo to design highly personalized insurance products for their customers using advanced decision science. Later in the call, I'll talk about our upcoming FICO World Conference, but first, let me pass it to Steve to provide further financial details.

Thanks, and good afternoon, everyone. As Will mentioned, we had another good quarter with total revenue of $499 million, an increase of 15% over the prior year. Scores segment revenues for the quarter were $297 million, up 25% from the prior year. B2B revenues were up 31%, driven primarily by mortgage originations revenues. Our B2C revenues were up 6% versus the prior year due to increased revenue from our indirect channel partners. Software segment revenues for the quarter were $202 million, up 2% from the prior year. On-premises and SaaS software revenue grew 4% year-over-year, while professional services declined 9%. We do expect Q3 professional services revenue to increase from the Q2 level. This quarter, 86% of total company revenues were derived from our Americas region, which is a combination of our North American and Latin America regions. Our EMEA region generated 9% of revenues and the Asia Pacific region delivered 5%. Our total software ARR was $715 million, a 3% increase over the prior year. Platform ARR was $235 million, representing 33% of our total Q2 '25 ARR, up from 29% of total Q2 '24 ARR. Platform ARR grew 17% versus the prior year, while non-platform declined 3% to $480 million this quarter. We did see some CCS usage headwinds, both platform and non-platform, as some customers chose to either delay or downsize some of their customer outreach programs due to macro volatility. Our platform land-and-expand strategy continues to be successful. Our dollar-based net retention rate in the quarter was 102%, platform NRR was 110%, and while our non-platform NRR was 96%. Platform NRR was driven by a combination of new use cases and increased usage of existing use cases. Our software ACV bookings for the quarter were $21.8 million compared to $16.8 million in the prior year. We have a healthy pipeline for the back half of this fiscal year. Turning now to expenses for the quarter, as shown on Page 5 of the financial highlight presentation. Total operating expenses were $253 million this quarter versus $260 million in the prior quarter, a decrease of 3%. We expect expenses to be moderately higher in the back half of the year, due mainly to our FICO World event and other marketing activities. Our non-GAAP operating margin, as shown in our Reg G schedule, was 58% for the quarter compared with 53% in the same quarter last year. This means we delivered non-GAAP operating margin expansion of 450 basis points year-over-year. GAAP net income this quarter was $163 million, up 25% from the prior year's quarter. Our non-GAAP net income was $193 million for the quarter, up 25% from the prior year's quarter. GAAP earnings per share this quarter were $6.59, up 28% from the prior year, and our non-GAAP earnings per share were $7.81, up 27% from the prior year. The effective tax rate for the quarter was 23.7%, and the operating tax rate was 24.9%. For the full year, we believe our net effective tax rate will be around 22%, and our recurring tax rate will be around 26%. Free cash flow for the quarter was $65 million, a 6% increase from the prior year. Free cash flow was $677 million over the last four quarters, an increase of 45% over the trailing 12-month period ended March 31, 2024. Our accounts receivable balance was up this quarter due to the timing of some large payments that were not received until early April. We anticipate our free cash flow will accelerate in the second half of this fiscal year. At the end of the quarter, we had $192 million in cash and marketable investments. Our total debt at quarter end was $2.53 billion with a weighted average interest rate of 5%. Currently, 51% 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. Turning to return of capital, we bought back 112,000 shares in the second quarter at an average price of $1,849 per share. We continue to view share repurchases as an attractive use of cash. And with that, I'll turn it back to Will for closing comments.

Thanks, Steve. The macroeconomic environment remains fluid, but our strategy and execution remain consistent. We are well-positioned for this fiscal year and remain confident in the fiscal year guidance that we've provided. Our continued innovations drive significant value to our customers. This quarter, we announced several examples. IA Financial Group leverages FICO platform for expanding insurance underwriting. Nationwide's adoption has led to increased speed in credit decisioning and rollout of new strategies. Lloyds Bank has increased credit card approvals and new-to-bank consumer loan approvals. Next week, we're hosting FICO World in Hollywood, Florida, where many of our customers will highlight their own success stories from adopting FICO offerings. The four-day event brings together customers and prospective customers from around the globe to discuss the benefits of making real-time decisions at scale through the power of the FICO platform. Customers will explain the benefits of optimizing interactions with consumers using the FICO platform. Those customers are realizing improved profits, increased customer acquisition and retention, reduced costs, growth in new product offerings, and improved employee efficiency. The event will showcase FICO platform demonstrations and have exciting announcements related to bringing innovation to the market. Some of the content from FICO World will be available in the coming weeks on our YouTube channel. I'd encourage all of you to view the demonstrations and presentations to better understand our customers' excitement around this innovative technology. With that, I'll turn it back to Dave to open up questions.

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

Our first question comes from Manav Patnaik with Barclays. Your line is open.

Will, typically, this is your kind of beat and raise type quarter. So, I just wanted some perspective on how you thought results came in versus your expectations? And it sounds like everyone else is just holding the guide given the potential uncertainty. Is that what you're thinking along those lines as well?

Yes, I think that's exactly it. I think we're in an environment with a little more uncertainty than expected. And as usual, we remain conservative, though there's ample time to raise guidance when we're more confident about it, and we're comfortable with where we are.

And then somewhat of a follow-up, I guess, on the software side. I mean, you guys were pretty confident in the re-acceleration of software. So, I was just hoping you could give us some context on platform. And then even non-platform was down this quarter. So just curious what's happening there.

Yes. I think I'd put that in the same category of macroeconomic factors. What we see on the non-platform side is a little lower, I should say, not lower usage, but lower growth in usage of CCS. And I think that reflects our customers' conservatism around the macro environment. And I remain confident that our growth rate on the platform side will be strong and will continue to be strong. We'll strengthen from where it is today. As you know, we don't work quarter-to-quarter; deals slip. We're okay with that. Our customers and our salespeople know that we don't go to extraordinary lengths to try to close deals by quarter-end. And so, I think there's all those factors at play. But I think the business is still quite healthy, and we feel good about it.

One moment for our next question. Our next question comes from George Tong with Goldman Sachs. Your line is open.

I wanted to see if you can talk a little bit about whether you've seen any changes in credit origination volumes through April, given all the macro uncertainty out there? And if current trends persist, if you can point to where in your guidance range, you would expect to land?

We haven't seen a lot of change there. But remember, we're a lagging indicator.

And in terms of the guidance, I mean, we're comfortable with where we are in the guidance. I mean one of the reasons we probably didn't change our guidance this quarter is that there's a lot of uncertainty, right? This can go a lot of different directions. We're confident in our guidance number, but it's difficult to know with as much volatility as there is even what we would change it to, if we were to change it. So, we're sticking with what we have.

Okay. Got it. That's helpful. And then following up on the platform software business, ARR growth decelerated; you mentioned that was due to macro factors. Can you talk about how much visibility you have into re-acceleration in platform growth? And will it take macro conditions improving to drive the growth to accelerate? Or do you have internal idiosyncratic drivers that can get that growth higher?

We have some level of visibility because we obviously booked the deals ahead of when the revenue is recognized. So, I would say, we do have some visibility, and that's part of my optimism about the business. But I think it is tempered by the macro environment. And so sometimes that means deals take longer to close. We haven't experienced this yet, but you never know, deals might not happen because of the macro environment. So we have the conservatism that goes with that. But in terms of visibility, our visibility says our business is healthy and should re-accelerate.

Our next question comes from Jeff Meuler with Baird. Your line is open.

Stephen Pollock is speaking on behalf of Jeff. Regarding that point, are you noticing any changes in customer behavior towards the platform sales cycles? Are cycles taking longer, and are there longer decision-making times? Have there been any changes in the contract terms or related aspects?

Not so far. I would say that we have discussed this previously. The platform is increasingly seen as a strategic investment by our customers, as part of a larger plan to become more consumer-focused and improve various interactions with consumers. While we are not completely insulated from macroeconomic conditions, I believe we are a crucial component of our customers' strategies, so our offerings are not likely to be deprioritized or canceled simply because circumstances aren't ideal. That being said, this reflects the current situation, and it's uncertain how it may impact us going forward. However, today we are not observing any slowdown; the deal cycles remain consistent.

Okay. Regarding the insurance partners or customers you've announced, could you discuss the go-to-market strategy for some of the non-financial services customers? Is it direct or through partners, and what factors might be influencing the traction in the non-financial services segments?

It's both. It's both. But as you know, we have been putting increasing emphasis on our indirect channel. And so, there is more activity there, and we are getting more deals outside of our direct sales force.

One moment for our next question. Next question comes from Simon Clinch with Redburn Atlantic. Your line is open.

I was wondering if we could just go back to your comments that nothing's really changed in terms of client behavior or volumes through April. But I was wondering if you could perhaps break it down. Was that an overall comment around sort of the aggregate level of volumes? Or is there any sort of detail at the sort of vertical level, which you can share with us?

So, I mean, honestly, we don't have real-time data, frankly. I mean you'd be better off getting information from the bureaus on that. They can track it on a day-to-day basis. As Will said, we get our reporting in arrears. So, we have some anecdotal information, but we don't have the actual real data today with us.

Okay. Understood. And then just a secondary going back to the software business. And I mean the booking strength was notable this quarter. That's sort of maintained as why everything was going on. I just wonder if you could give us some context around pipeline build and that's sort of touching on the demand side as opposed to just the deal slipping.

The demand side is strong. The pipeline is strong. The current bookings, as you can see, are strong. So, it's all in a good direction.

Yes, we noticed challenges in CCS as many of our customers are connecting with their consumers. If account growth slows, we will see a decrease in CCS volume. This situation is not related to the products themselves, but rather how our customers engage with their consumers.

One moment for our next question. Our next question comes from Jason Haas with Wells Fargo. Your line is open.

I'm curious if you could give us any sense for what sort of price increase you took in auto. Just so we can get a sense for maybe in the quarter, how much was volume versus price driven since there's an acceleration there?

We don't comment on price increases until we make them.

You talked about ones that are already made. The ones that we have this quarter.

Yes.

Of course, yes. I mean as the price increase feathers in, as it becomes recognized over the course of the year, the price becomes a bigger component, and the change in price becomes a bigger component of our revenue increase. And so yes, that is happening as we speak.

But we don't specifically call out the percentage of price increase versus volume increase.

One moment for our next question. Next question comes from Faiza Alwy with Deutsche Bank. Your line is open.

I wanted to ask about the Scores business. It looks like there was a pretty substantial increase in the non-origination of B2B Scores revenue. And I'm curious if there was something specific that you can point to there?

There's a lot happening, but nothing in particular to highlight. Some of it comes from license sales and international markets, while a bit more relates to prescreening. Overall, there are many factors contributing to the non-originations this quarter, but nothing specific to mention.

Okay. Understood. And then Will, I wanted you about...

We do experience some fluctuations in that number each quarter, so there will always be quarters that are a bit higher than others.

Okay. Okay. Will, I wanted to ask you about just the regulatory environment, there's obviously been a lot of shifts post-election, and you've had some of these new regulators settled into their new roles. So curious how you're thinking about the evolving situation, if you've had any conversations? And anything you can share in terms of your perspective there?

Well, we're always in conversations with the appropriate regulators and agencies, and nothing has really changed. We continue to be in touch with them and talk about our industry and how we ought to go forward with it. I would say that the regulatory environment is a good one for FICO. We're pleased with where we are. It's all basically good news for us.

One moment for our next question. Our next question comes from Surinder Thind with Jefferies. Your line is open.

Well, maybe could you possibly comment on just kind of the DBNRR number? Obviously, it's slowed down a little bit. But is there a way to disaggregate the client behavior there in the sense that is it clients have stopped or slowed down kind of the implementation of use cases in the current environment? Or is it more a case of they're just running existing use cases maybe less frequently?

Yes. I would say usage itself. We're not losing customers. And they're not postponing what they do, but things that are usage-based, we're seeing less usage. And I really think that's an ebbing or flowing thing; it has to do with the environment.

And Surinder, in most cases, it's not like they're really declining. In a lot of cases, it's just not growing as fast as they were in the past.

Yes. I stand corrected there. It's just the growth rate has slowed down, and it was this idea of whether clients are just slower to maybe adopt new use cases as you move from one division to the next to next as well, right?

I don't know it's so much that. I think it's more of the usage itself. I really think it's an environmental factor.

Yes. So, I would say it's not so much about lessening usage; it's more of a slow growth in that area due to the macroeconomic environment.

Got it. And then maybe a question for you, Steve. Just on the expenses, the SG&A numbers, how do we think about the run rate excluding the expenses that are associated with the FICO World Conference?

We expect higher expenses in the second half of the year. The marketing expenses will mainly come from the Scores side as we approach FICO World, which will contribute to this increased spending. We're also adding some headcount, but the increase is not significant. As we've mentioned in previous quarters, we're hiring good people, but the overall impact on expenses will not be material, so you shouldn't expect a large rise in costs.

Got it. So, excluding FICO World, not a material increase in expenses in the back half?

I'm sorry, say that again.

So, excluding FICO World, not a material increase in expenses because that's a big one-time line item, right?

Yes. I mean, there are other expenses that we'll have some marketing expenses too. So, I mean, if you look at what's implied in the guide, there are additional expenses that will be in the back half of the year. But obviously, FICO World is a big part of that.

One moment for our next question. Our next question comes from Ashish Sabadra with RBC.

I just wanted to ask a question on software as well. How do we think about the timing of converting some of that ACV? We've seen pretty strong ACV in the first half of '25, the timing of that converting over to ARR.

It's probably six to nine months before the conversion takes place. It depends on the individual customer. Some customers, if they're a little more sophisticated, are easier to implement, and it could be a little bit quicker than that. But usually, it's in that six to nine-month range.

And then, Ashish, it does take three months to kind of ramp that up, so I kind of think of it more like 9 to 12 months when it's fully ramped, but he's right, six to nine when it kind of kicks off.

That's very helpful color. And maybe just a quick clarification on the auto origination revenues. There was a comment there during the Q&A about pricing getting feathered in. So, if our understanding is right, there was only a partial benefit of pricing in the quarter, and we should continue to see that incremental benefit as we go forward? Is that a right assumption?

Yes. I mean, well, auto is the same as everything else. So, we repriced it effective January 1. Sometimes it doesn't all roll in right away on January 1. So sometimes, it takes a little bit of time for the full benefit of that to hit. But the auto pricing is the same way as mortgage and credit card as well.

One moment for our next question. Our next question comes from Kyle Peterson with Needham. Your line is open.

Let us start on the buyback and capital allocation. Historically, you guys have been fairly steady and formulaic as to how much you guys have returned to shareholders. Obviously, we seem to be in a more volatile equity market environment. How are you guys kind of thinking about balancing returning cash to shareholders versus potentially being like opportunistic and maybe stepping up a little bit more if we do get some short-term blips? Any color there on how you guys are thinking about that would be really helpful.

Our philosophy has not changed. We have consistently stated that we are not market timers. We maintain a long-term perspective on the future value of our company. We are committed to stock buybacks and do not spend a lot of time considering whether it is the right moment to increase our purchases or to avoid the market because it seems expensive. We generally buy consistently and are comfortable with that approach. However, there have been times in the past when we felt the market was undervaluing our prospects. While we usually try to align our free cash flow with our stock purchases, there have been instances where we have significantly exceeded that. This occurred a few years ago for a one- to two-year period. You can expect us to continue regular purchases moving forward, and we may invest more heavily when opportunities arise.

Okay. That's really helpful. And then maybe a follow-up on software. I know several other guys have asked about this, but any color on kind of what you guys are seeing maybe a little more under the hood. Are there changes in like geographies or bank size or anything like that over the last few months? Or is a lot of the decision-making pretty consistent with what you guys have historically seen and kind of shared on recent calls before this?

No, I don't think we've seen any discernible trends that way. And actually, if you look at the bookings, they've been pretty good. So, where we've seen some slowdown is in some of the usage. But we haven't really seen any changes in behavior depending on region, geography, or size of the bank.

One moment for our next question. Our next question comes from Josh Dennerlein with BofA Securities. Your line is open.

I wanted to follow up on the platform. I know you are consistently introducing new solutions in that area. Could you give us a reminder of the solutions you are rolling out this year on the platform? Also, could you provide some context on how adding solutions in the past has affected growth?

I would say that the majority of solutions and use cases are tied to the credit risk life cycle and the functions we've traditionally managed with our legacy applications, such as originations and line management. Our fraud solutions on the platform are still being developed. Some fraud solutions are currently available, and there are some new ones that weren't available before, while some older ones are still not ready. Overall, this area is a work in progress, and I anticipate that nearly all of our fraud solutions will be available on the platform by next year.

And Josh, there will be announcements about innovation on the FICO platform at FICO World.

I appreciate that, Dave. Do you usually experience a sales growth bump from attendees at FICO World, and does that translate into significant sales?

Yes, absolutely. I would say that it's our primary effort in building the sales pipeline. We invest significant energy in providing access to our top technical personnel so that current and prospective customers can gain a thorough understanding of our capabilities. We also facilitate meetings with other customers who have successfully implemented our solutions. This creates a substantial exchange of knowledge, and honestly, we don't engage in much direct selling. The selling is largely conducted by our customers as they share their experiences and successes with each other. It has evolved from a simple presentation to a more personalized experience, where customers receive a tailored, focused engagement over several days, specifically addressing the needs of their bank and how we can best assist them. Typically, this includes references and introductions to other customers who have achieved what they aspire to do. As a result, it ultimately serves as an extensive pipeline-building activity.

One moment for our next question. Our next question comes from Scott Wurtzel with Wolfe Research. Your line is open.

Just one for me, the color on some of the channel partners that you're working with in the software business is helpful. Just wondering how you feel overall about the partner network in the software business and how that's running right now.

We continue to believe it's a big opportunity for us. We don't have as much indirect sales as we would like, and we continue to invest in the indirect channel with a view to increasing it. We've talked about this in the past. We have a really dynamic direct sales force. That said, it's quite small. If you compare our IP with our distribution strength in direct sales, it's fairly obvious that those are mismatched. Although we're taking a lot of initiative around that, we're adding salespeople and growing our direct sales, we recognize that the real opportunity is to expand the indirect sales. And so, we have been investing in it. We have a lot of people working on it right now for different kinds of things. We have geographic reach that's occurring; we have diversification into non-financial services verticals. We have work going with SIs. Interestingly, the work with the SIs is not just the transfer of our professional services work to them, but they're actually taking our IP and building proprietary solutions for themselves that they use with their customers. I think it's really nice. It's a partnership where we get the professional services/extrac capacity, if you want to call it that, coupled with them as a channel, a true channel for moving our IP to market.

One moment for our next question. Our next question comes from Kevin McVeigh with UBS. Your line is open.

Great. Would you expect some of the lower kind of usage in CCS to kind of capture that in the back half of this year? Or is that something that you think potentially gets pushed out to '26?

Wow. Your guess is as good as ours. It's just so hard to say. Our business is built around doing some amount of kind of base level revenue for getting something underway and then built on usage. And we can't really control the usage except to the extent that we teach our customers how to get more value by expanding the usage. But the economic activity level of the usage is something we can't really control. And I don't really have visibility there. I don't know which way it goes.

It's helpful. And then with the partner channel on the implementation work, is that explaining some of the recent trends in the professional services? Because it seems like the bookings have really scaled. Or is it just the size of the bookings? Just trying to reconcile the professional services trends against, obviously, what's been pretty good bookings overall.

Yes, I would say this quarter involved some timing factors. We had certain milestones to achieve in order to realize the revenue, which shifted from March to April. So, there is an element of timing involved. You will likely observe that we expect revenue to increase in the latter half of the year and even in our third quarter.

One moment for our next question. Our next question comes from Matthew O'Neill with FT Partners. Your line is open.

Many good questions have been asked and answered here. I thought I would pose a more open-ended question regarding strategic priorities, keeping in mind that FICO World is next week. Any insights you could share about the focus for the rest of the year and beyond would be very interesting.

Well, I think what you'll see at FICO World is a whole bunch of new capabilities. You'll see a little bit more on the way we're using AI. On the Score side, you'll see some of the innovations that we have coming. We're just gearing up on FICO 11, so you'll get a little taste of that. So those are the kinds of things that we expect to be announcing next week.

And I'm not showing any further questions at this time. And as such, this does conclude today's presentation. You may now disconnect, and have a wonderful day.

Thank you.

Thank you.