Fair Isaac froze its $10 mortgage score with no 2027 guide as Rocket Mortgage picked VantageScore at 99 cents

On its November 4 call, Will Lansing, Fair Isaac's·+0.77% — Fair Isaac, up 0.77 percent as of its last quote chief executive, called fiscal 2026 "the most successful financial year in FICO's history," then declined to forecast the next one: "we are not providing fiscal year 2027 guidance at this time↗," with mortgage pricing agreements still being negotiated. ¹

The fiscal fourth quarter, the three months to September 30, was a beat: revenue of $657.0 million, up 27.4 percent from a year earlier, and adjusted earnings of $11.10 a share against the $10.69 expected. ³⁴ The shares closed the next day at $707.40, up 0.91 percent, a fifth of their average 5.11 percent move on the last eight prints and 57.93 percent below their level a year ago. ³

The price lever met a 99-cent rival

The growth was price, not volume. Mortgage origination scores revenue rose 72 percent while originations fell by a high-single-digit percentage, and the average score price slipped from the prior quarter as lenders shifted toward cheaper home-equity lines. ¹ In October Fair Isaac froze its $10 wholesale score price for enrolled lenders and brokers through 2027↗, under a Preferred Program that bundles the newer 10T score. ¹⁵

The freeze followed a regulatory rout. In the last week of September the Federal Housing Finance Agency placed VantageScore, the credit bureaus' rival score, on the same mortgage pricing grid as the classic FICO Score, TransUnion·−1.32% — TransUnion, down 1.32 percent as of its last quote extended 99-cent pricing for it through 2028, and Rocket Mortgage, the largest US mortgage lender, made it the preferred model for eligible loans↗ ⁶⁷². Fair Isaac fell 26.5 percent on September 29, its worst day since 1989. ⁶⁷²

Asked on the call whether average prices rise or fall next year, Lansing said transparency on pricing "has not been helpful" and declined to answer. ¹

Two charges did most of the margin damage

GAAP operating margin fell to 40.6 percent of revenue, from 53.8 percent, the weakest in nine quarters. ³⁸ A $65 million antitrust settlement accrual and a $27 million restructuring charge, tied to an October cut of about 15 percent of staff, did most of the damage: excluding them, operating expense fell 4 percent sequentially and non-GAAP operating margin reached 61 percent, from 54. ¹⁷

Free cash flow for the year was $1.03 billion, up 40 percent, with no meaningful loss of volume to competition. ¹ The buyback stopped anyway. Fair Isaac spent $3.028 billion in fiscal 2026 retiring a tenth of its shares at an average of $1,204 apiece, against a $707.40 close, then paused to repay the term loan behind an accelerated repurchase, leaving $5.26 billion of debt and net leverage at 3.29 times EBITDA. ¹³

What January decides

Consensus for the December quarter is $608.2 million of revenue and $9.40 a share. ³ On January 1, 2027, the new pricing takes effect and the Federal Housing Administration begins accepting Score 10T, still unimplemented by Fannie Mae and Freddie Mac. ¹ Until then the number that matters is the one Fair Isaac will not disclose.