Q4 2020 Fair Isaac Corp Earnings Call
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[noise] greetings and welcome to the fear Isaac Corporation quarterly earnings call. During the presentation, all participants will be in a listen only mode. Afterwards, we'll conduct a question and answer session at that time. If you have a question. Please press the one followed by the four on your own.
Telephone if at any time during the conference you need to reach an operator, Please press star zero.
As a reminder, this conference is being recorded Tuesday November 10, 2020 I.
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 Ficos fourth quarter earnings call.
I'm, Steve Weber, Vice President of Investor Relations and I'm joined today by our CEO will Lansing and our CFO Mike Loughlin.
Today, we issued a press release that describes financial results compared to the prior year.
This call management will also discuss results in comparison to the prior quarter in order to facilitate an 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 Companys filings with the SEC in particular in the risk factors and forward looking statements portions of such filings copies.
Copies are available from the FCC from the FICO website or from our Investor Relations team.
This call will also include statements regarding regarding certain non-GAAP financial measures. Please.
Please refer to the company's earnings release and regulation G schedule issued today for a written 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 dot com or on the Fccs website at FCC that guest.
A replay of this webcast will be available through November 10, 2021, and with that I'll 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 where offices remaining closed I'd.
I'd like to take this opportunity to thank our entire team for their perseverance and their adaptability and their commitment to our customers.
On the Investor Relations section of our website, we've posted some slides that I will reference during our presentation today.
Twentytwenty has been a remarkable year for all of us at Vical, we've been focused on navigating an extremely volatile and unpredictable environment.
I'm 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 and.
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 1.9 $1.29 billion of revenue up 12% from fiscal 2019.
We delivered $59 million of GAAP net income.
And GAAP earnings of a $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.
And we're 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, we had a great quarter up 12% versus last year in large part due to some dark and license renewals.
For the year. The segment was essentially flat 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 continued to prove that we are gaining traction with our new technology. We again delivered our largest dms revenue quarter ever up 36% from last years fourth quarter.
And the segment was up 22% for the full year versus fiscal 2009.
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 and 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 decision support use cases related to auto Craig.
Credit line management for the different retail products.
And collections and others on the corporate platform, we're 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've been making coordinated changes across the business to grow revenue from our on platform solutions favored software over services optimized pricing and manage operating expenses.
And 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 also 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 lately, we're committed to becoming the preeminent platform player in Decisioning analytics, and we need to be focused on that mission that may mean exiting non strategic products or not signing or renewing low margin project work, we're constantly looking at our business to identify areas for growth and improvement and implement actions.
To deliver our strategic initiatives will continue to keep you updated on the progress we're making in our software business and we'll be providing more information in the coming quarters to explain the transformation, we're making there.
In our scores business, we had another very successful year scores were up 32% in the quarter versus the prior year.
Up 25% for the full year.
On the B to B side revenues were up 27% as we saw continued strong mortgage originations volumes, we saw 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 BDP revenues were up 26% compared to 2019.
Our BDC 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 at my FICO Dot Com, which was up 62% this quarter versus last year and are also getting 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're also faced with a number of uncertainties, obviously, we're 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 difficult to predict any timing or impacts and.
Its also difficult to predict what we'll see a debt markets in the coming year, obviously, the mortgage markets have been growing a phenomenal levels, but we can't predict when or to what degree does markets will cool off.
In auto and personal loans, there is still a great deal of volatility and we cannot confidently predict how the next 12 months will play out.
As in past years, we've instituted some pricing increases in various areas within scores, but its also difficult to determine their potential impact because of volume uncertainty.
We're coming off a quarter with record revenues and record bookings, but again with an ongoing pandemic is 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're proud of our business performed in fiscal 2000 and are excited as we embark on a new year, but we're 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.
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 well said, we had a great finish to our fiscal year and were able to post exceptional results in the midst of that 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 billion 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 multi year license renewals.
Full year revenues for applications for $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.
[music] for 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 b to B 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 fetus.
B to C revenues were up 45% from the same period last year, both my FICO Dot 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 revenue is 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 license revenues were 16% of the total.
SaaS software revenue is not including related professional services revenues for the full year of fiscal 2019 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, representing an 11% increase from last year.
SaaS bookings were $221 million for the year up 18% from 2018.
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 onetime 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 percentage mix.
Census.
Our non-GAAP operating margin as shown on our Reg 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 onetime 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, and including 45 million of restructuring impairment charges and $50 million of reduced tax expense from onetime excess tax benefits recognized upon the settlement or exercise of employee stock awards non.
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 F Y 2021 recurring tax rate to be approximately 26% to 27% compared with 28% of that why 20.
That expected recurring tax rate is the for an estimated excess tax benefit of approximately $20 million in F y 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 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 on share repurchases. It for.
Our total debt now stands at $845 million with a weighted average interest rate of 4.3% turn.
Turning to return of capital we bought back 60000 shares in the fourth quarter at an average price of $423 per share in fiscal 2020, we repurchased a total of 675000 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.
As a result at the beginning of F. Y 21, 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 of our software license revenue in fiscal 21, as a greater percentage of the total expected revenue to be received from newly signed on premise subscription sales and renewals of existing term licenses are 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 521.
Yes, Mike as I said in my opening remarks, I'm proud of our team and what we were able to accomplish in fiscal 20.
Im excited about our prospects for 2021 and beyond clearly there is uncertainty, but we're confident that our future is bright we can't pin down exact expectations, but weve proven our business is 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 and we look for.
To keep you all informed as we progress.
Now, let's turn to Q and a.
Thanks will thank you this concludes our remarks.
Eric If you can please open the lines for questions.
Absolutely. Thank you.
So everyone if you'd like to register a question. Please press the one followed by the four on your telephone you'll hear a three Tom prompt acknowledging your request. If your question has been answered and Youd like to withdraw your registration. Please press. The one followed by the three but once again for any questions. Please press one in four on your telephone just one moment for the first question.
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And our first question comes from the line of Manav Patnaik. Please go ahead.
Thank you good evening guys.
Just on the thoughtful business, clearly solid and to be able to you.
Yeah, Capitalizable backlog will panel caused because of the bundle, but I was hoping you could give us just a little bit more color on how the clowns all viewing mobile. The next few quarters will hold I guess is in is the fact that you ended strong just sounded that back to fall below April some shifts bandwagon signing 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 Didnt change that much remember we have a very long sales cycle to under 70 days on average and so.
A lot of what we've.
What we've booked in 2020 was was pipeline built even earlier now we're 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 do all turn out.
But but I would say that our customers are they have the same needs for this offer that they had before the pandemic if anything there's increased appetite because the pandemic has gotten everyone focused on digital transformation and and our software obviously plays really well for that so.
I anticipate continued interest I don't think we're just working off of backlog.
Okay bottles on loan they call me just normal course, followed on plan.
Close can you just quantify how much that to help grow the top cobalt on long. All secondly, just all going into next calendar year, I guess, how should be think about equal the pricing initiatives that you've been doing last year was like all should we be expecting another long.
We can't disclose the amount of the tremendous help confidential.
But the as you know these things happen every several years, we wind up doing a true up of the source.
With respect to the pricing actions and scores we took some actions, but as as in years past, we don't really know exactly how it will feather in we don't know exactly what volumes, but with the volumes will be and so it's a little hard to.
To predict.
I would say not a lot more nor a lot less than years past as probably a way to think about it.
But its we have we havent uncertainty, we always were Weve, we wind up.
Getting getting the activity in arrears from the bureaus.
Thats just the way those.
Got it and if I can just squeeze in one legal soluble fiber score business all to all sense I guess, all I will make you although sold soon hopefully before so just curious if something is all finished looking roll up model maybe from coupon.
Yes. Good question Manav, we we've undertaken a pretty massive.
Strategic look at our business over the last six seven months.
We hired in.
Former Mckenzie director tab hours to help us and we've been really focused on what is strategic and what is not and and so were the things that look promising but they really are not central to our mission for building a decisioning platform.
Are definitely being moved to the periphery and so.
Cyberisk, where as an example, when those sold were proud of that it was good technology, but.
Our success in the Decisioning platform business doesn't turn on whether we're successful in cyber risk score. So at some level was a distraction for us.
Are there other things like that where 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.
Hi, Thank you guys.
Thank you. Our next question comes from the line of Kyle Peterson with from Needham. Please go ahead.
Hey, good afternoon, guys. Thanks for taking the questions.
Just wanted to touch a little bit on the SGN a trajectory I know you guys took some restructuring kind of rationalized headcount in real estate and how should we think about.
The expense trends over the next coming year, given that it seems like some of the efficiencies could be permanent but im not sure whether you guys are going to reinvest part of that.
So higher growth areas such as Cmax.
Yes ill give you some quantitative thoughts and maybe well can provide qualitative.
Big part of the reduction in expense run rate in the second half of the year with key any you can see from the additional slides we provide as part of this call that are going.
Going into that pandemic any run rate was about 30 million to $35 million a year I think it was something like $100000 in Q4, so thats not going to persist, but it's probably going to be less than 30 to 35. So even if we do have a vaccine get back to normal.
So thats one moving piece.
We have also taken actions to reduce our geographic footprint and to a minor extent reduced head count in non strategic areas.
On that.
Real estate savings will accrue over the years.
So that will be a one way Bennett.
Benefit that isn't going to change, but with respect to some of the headcount reductions.
We actually did that so that we can reinvest some if not all of that money into head count.
Augmentation.
In areas related to the software platform.
To pursue our strategic ambitions there so.
We expect overall expense.
Expenses for the business.
Probably again with the pandemic so much is uncertain, but we expect flat to sing.
Single digit growth and expenses as that as the year goes on well, maybe we'll do better than that if perversely, we camp travel for the whole year, hopefully, we can and will expenses, we absolutely need to spend in that category that hopefully that at least gives you some color.
Yeah. That's helpful. Thanks for the color on that and then I guess just more of a housekeeping item.
Particularly on some of these longer term life.
License sales that you guys recognized this quarter. It was that was that more on the application side.
Just trying to think about how we should incorporate that into our model.
Forward.
Yes, you can.
If you look at the segment breakout in the 10-K.
You can see you can figure that out you have to do a little up.
Quarterly subtraction math, because we don't show the quarter over quarter comparison, and as friendly ways we might.
But the license growth was really driven by renewals, we had 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 Q3, but if you look at our 62 and a half million of license bookings for the quarter, which is up.
Of that.
$21 million or so is renewals.
That renewals in excess of renewals, we had in the year ago quarter.
So yes, the end to end just for better or worse, they're lumpy, we have to recognize a lot of upfront and so it was both increase in new business sales, which was up.
Ill sort of mid to high teens from year over year, but most of the increase.
But not all was just by this lumpiness of renewals that happened to be a whopper of renewal quarter.
Okay, great. Thanks, guys nice quarter.
Thank you.
Our next question comes from the line of Jeff Mueller with Baird. Please go ahead.
Thanks, and good evening, everyone wanted to ask on the to see scores like kind of a really really good quarter.
On the might FICO, sorry, I recognize you have a strong brand to recognize the direct is the part of the market thats been performing well lately, but anything that you've changed for my FICO either in terms of go to market or product or just any other changes that are driving that exceptionally strong results.
It's I would say is more on the market side than on our side, but we were constantly innovating over there we're constantly pushing the trying to push the value that the consumer gets in that offering.
Our strategy around my FICO is to be kind of best in class credit monitoring for consumers and at the same time, we mostly go to market through partners like Experian and so somebody FICO is at some level a laboratory for as a place to test ideas to test out value proposition changes.
And so we're always doing that theres, that's not like a new thing this year, we constantly do that.
I think the biggest the biggest thing responsible for the lift is the is.
As consumer demand and the consumers really interested.
Second deserve credit score.
Yes.
Okay, and then Mike just on these accounting changes.
I just want to make sure that.
Yes couple of clarifying questions, but there is no change to the timing of expense right.
Recognition would be one question and then.
I guess is are you viewing bookings as kind of the best way to track the performance of the business throughout 2021, and I think thats unaffected.
Or is there some other kind of metric or some way that you're going to be adjusting revenue to give us a like for like impact or something to track the performance of the business as we progress through 21.
Thanks for those two questions. The first one definitely merit some additional.
Detail I think for everyone listening in the call. So.
The change really is to get in line with industry standard for how subscription software is recognized we had been.
Recognize revenue for on premise term license sales.
Essentially in the way that you would recognize that perpetual license sale, where you had a onetime license upfront and then 20% maintenance every year.
We were treating the total contract value of term license in sort of the same way that led to about between 80 and 85% of the total contract value for a multiyear deal being recognized in the year you sign when you cite and only 17.
15% to 20% range.
Recognized ratably in years, two and three.
With this change again, which is what.
The vast majority of subscription software companies already do were 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 special license situation.
Is higher than what we had been recognizing before.
That nets out to.
About a 30% reduction in the percent of TCV total contract value recognized in year, one versus years, two three and in some cases years years four and five.
So when you think about the revenue side I know you asked about the expense side as well.
Yes, we had.
$128 million of license revenue in our software business in fiscal 2000.
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Going forward, we would recognize about 30% less of that in the first year and the 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 and doesn't change when we bill the customer how much we build them or what total.
Revenue, we recognize over the over the term of the contract. So hopefully that's that's clear and you can do your own math on how much of the headwind that will be for revenue, but it will be a headwind fiscal towards for sure. We want to make sure everybody knows that when.
With respect to expenses. These are on Prem license sales. So there aren't that much there isn't that much expenses associated with it.
Margins on our on Prem business are consistent with what others others earn.
90 plus percent.
So the antibody will change revenue recognition a little bit the extent that we recognize more revenue ratably match expenses with the.
Revenue recognition, but its thats not going to be a material impact relative to the revenue impact.
And then EPS bookings separate question, yes for now that's the best indicator to measure on.
Our current period performance in generating new revenue.
It's not a perfect metric as you know as it it's TCV basis, so term length matters.
But we're sticking with that metric, but 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.
Exposed to you guys at some point during this fiscal year.
Just kind of metrics for FICO, but we're not.
Yes.
Got it sorry for the three parter appreciate all the detail.
Thank you for the questions.
Our next question comes from the line of Brett Huff with Stephens incorporated. Please go ahead.
Good afternoon guys.
Hi.
Alright revenue.
Good.
Just a quick follow up on pricing.
Could you guys give us a sense I think sometimes you've given us a sense of which part of scoring.
Sort of dug into and we're tweaking the pricing on could you any insight there that you could share with us for the new round of price tweaks.
Yes to the extent, we're willing to share that information is less to do with the type of scores and it's more to do with the size of the customer so.
So we're into a more kind of a tiered pricing philosophy, and so I would say that the price increases were spread across those spreads force portfolio.
With a view to the size of the customer buying this first.
And I'm, assuming that the smaller customers may have been.
Getting a pretty good deal for a long time and maybe we're 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 [laughter].
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 exactly come out of the pipe and get get booked I know is it takes a while but as you're having conversations with folks I know you mentioned digit digitization is really important but as you think about Falcon strategy director debt collector.
One of those key at any sort of detail on the conversations there that that stick out that might be useful to know.
Well, what's interesting is historically, we we have provided for lack of a better term point solutions for our bank customers originations and customer management and fraud and collections and recovery as you note.
What we're seeing what we saw what we saw last year and what we're starting to see more of is more engagement with the it department and we're engaged with the CIO and a better understanding on the part of our customers have just the benefits and value of the platform. So while they may still be buying a solution like originations now they approve.
Great that its originations on top of the platform and.
And there's all kinds of potential that goes with that were for small incremental investments they get large incremental value out.
I think thats the biggest change we are seeing in the conversation is is cut.
Customers increasingly understanding our strategy around platform and looking to leverage it.
Okay, and then any update on the sort of the master plan moving everything over to sort of the core underlying dms.
Platform on the App side can you just sometimes you sort of say you know.
We expect that we're going to be completely done in a year or whatever can you just give us the update on that terminus where we are in terms of finish line.
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 it's a process and so we've we've moved some core fraud applications from Falcon onto the platform. Our compliance is now available in Falcon X on the platform. We're also looking at.
I would say more flexible and modular approaches to providing fraud solutions on the platform. So there'll 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 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 this on the platform have that work I think we're almost there now we're pretty much there now at week This Latin American bank.
Well 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 now we're up to 19 and I think there's more in the future. So.
It's it's a it's a different way of thinking about the value that we provide.
Great. Thank you so much appreciate it.
As a reminder, everyone. If you do wish to queue up for question. Please press the one followed by the four on your telephone.
Our next question comes from the line of Jake Williams with Wells Fargo. Please go ahead.
Good evening everyone.
Hi, Jay.
Can you help us understand how much of.
I have an impact on mortgage volumes were in this quarter in the database where segment.
So.
Like last quarter.
Experian, sorry facts and trends in reported before us last week and the prior week and you can see.
How they broke out mortgage volumes.
We don't breakout mortgage volumes, but we can say that what we saw was consistent with what they told the street they saw.
I think one showed up 45% in terms of volume and the other was closer to 60, although it's a little unclear whether that was for the quarter itself or sort of run rate, including last.
Including the month of October, but our volumes were consistent with what you could see from them.
Got it.
And then in terms in that average.
Bookings term stressed starts at 55 months this quarter 37.
Impacted by the decision to change the revenue recognition on parameters this and independent down evolution.
Its independent it's not related to two that it would it's related to his.
We had some deals that are really long term deals long much longer than typical then been has been our usual and I would say that that trend could continue we'll have to see how things play out.
But but I think when banks.
Our platform and standardize on the platform, it's not surprising that they would want to lock lock us in for a long period of time with an understanding what is going to cost. So I think theres going to be pressure for longer term deals on us.
So can we assume that the it the clients are the ones who are coming to you asking for this this long term deal to get that stability and return there is probably some price escalator built in each year.
Yes, we we try to be smart about it and and yes, it's definitely client request.
Got it thank you very much.
Thank you. Our next question comes from the line of Surrenders Singh with Jefferies. Please go ahead.
Good afternoon folks.
Following up on an earlier question about just the Dms platform, maybe can you provide a little bit more color on the investments, we're making in terms of the.
Redirecting some of US at this 36 million in savings that you have towards additional head count for the build out of our platform is that simply just trying to accelerate that build up of certain functionality.
I was just hoping for maybe a better understanding of where the roadmap is.
In terms of I think.
Ultimately, we're trying to get to I guess in terms of the function that we currently have.
Versus where it will be fairly equivalent product to your on premise in your old architecture club stuff.
So part of the strategy with the platform is to is.
Is to have a lot of interoperability around the data rights. We have data orchestration layer, we can take data from lots of different places and bring it into the platform and then we have a wide range of analytics that can be applied to that data and then and then we have various solutions that sit on top of that platform of that decision platform too.
To meet specific needs our strategy with the platform has been too as we migrate our applications to the platform. The way we think about it as we say what are the components of this solution that we ought to Modularize. What are the what are the micro services that that are involved here and lets break.
Come up and make them available to to users of the platform. So they can be mixed and matched in different ways and so that's that's really kind of the heavy lifting its going on we've also put a lot of energy into a thing called FICO studio, which is.
Kind of a front ends.
Fourth generation language kind of programming environment, where you can drag and drop a lot of things to build workflows based on the Decisioning analytics and the platform. So theres a lot of work that's gone into that.
But the way we think about it is not let's court an application to the platform. It's more break up the application into its component parts understand how they can be microservices that could be consumed in independently and then bring those so platform. So they can be reassembled on the platform for all different kinds of purposes.
Fair enough.
And then in terms of just a bigger.
Bigger picture question.
Obviously with a potential change in the administration.
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Is there any other considerations that interesting to.
Picture here, where maybe.
Could there be a let's say an acceleration in the upgrade cycle for let's say from February to FICO, nine or even to FICO 10, or something for that matter that might drive based on the differences in the policy administrations.
I'm not sure that we'll have a change in the rate and pace of adoption of new scores under based on the administration I.
I do think that all lenders are really focused right now on how do they get the most value out of their scoring algorithms and they are increasingly.
You know using things like FIFO resiliency index to complement the traditional FICO score to make these decisions.
I wouldn't say, that's driven by the administration I think thats more driven by the innovation coming out of our scores team but.
But there is tremendous appetite on the side of the banks to to get the full benefit out a bit and so we're pretty focused on that.
Thank you and then.
Just a quick one on on or maybe going to be to see revenues.
Obviously really strong growth there.
Im assuming the run rate is what is a sustainable run rate at this point.
Is there any color you can provide on how hole.
Is this just is this theres just this initial phase where we should expect this big ramp up that we've seen.
The kind of the dislocation in the markets or how should we think about the growth rate forward should I think that.
How long do customer stay on the platform.
I think weve definitely enjoyed a spike because of the environment Theres no question that consumers are more focused than ever on their score and whether it's going up or down I get letters in the mail all the time.
And and Thats definitely the environment driving that so I would say the.
The 62% Spike I referenced earlier that is that's driven by the environment in terms of.
Lifetime value how long they stay on we have not it's too early to tell but we havent seen changes. So what we're seeing so far is kind of the same attrition over time that we've historically had so we'll see.
What we have noticed is that there is a there.
There, there's an inexorable trend too.
Consumers being ever more focused on their credit score I mean, this has been every year year in year out is become bigger and more important to them.
And so.
I'm 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.
Alright, Thank you and I'm not sure whether we have no further questions from the phones at this time I'll turn the call back to you.
Thank you this.
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 does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect your lines.
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