FICO · 10-K · 2026A · Full report

Gross Margin Drivers

FAIR ISAAC CORP · 2026-11-06 · Importance 41 · Surprise 32

Cost of revenues decreased $2.2 million to $351.5 million in fiscal 2026, while revenue increased 27%. Cost of revenues fell to 14% of revenue from 18%, primarily because higher-margin Scores products represented a larger share of sales. Personnel and labor costs declined $9.9 million, partly offset by a $9.8 million increase in infrastructure and facilities costs from higher third-party data center hosting costs. Scores operating margin increased to 90% from 88% as higher-priced and higher-volume business-to-business mortgage scores lifted results; Software operating margin declined to 28% from 30% due to increased hosting costs and lower sales of higher-margin point-in-time software.

Key facts

• FAIR ISAAC CORP’s cost of revenues as a percentage of revenues fell to 14% in fiscal 2026 from 18% in fiscal 2025, primarily due to increased sales of higher-margin Scores products. source
• FAIR ISAAC CORP’s fiscal 2026 cost of revenues decreased $2.2 million, primarily due to a $9.9 million decrease in personnel and labor costs and a $2.1 million decrease in direct materials and other costs, partially offset by a $9.8 million increase in infrastructure and facilities costs. source