Fair Isaac Announces First Quarter 2008 Results

Total revenue of $199.4 million; Earnings per share of $0.39
MINNEAPOLIS--(Business Wire)--Fair Isaac Corporation (NYSE:FIC), the leading provider of
analytics and decision technology, today announced the financial
results for its first quarter ended December 31, 2007.

First Quarter Fiscal 2008 Results

The company reported first quarter revenues of $199.4 million in
fiscal 2008 versus $208.2 million reported in the prior year period.
Net income for the first quarter of fiscal 2008 totaled $20.2 million,
or $0.39 per diluted share, versus $31.2 million, or $0.52 per diluted
share, reported in the prior year period.

First Quarter Fiscal 2008 Revenues Highlights

Revenues for first quarter fiscal 2008 across each of the
company's four operating segments were as follows:

-- Strategy Machine(R) Solutions revenues were $105.6 million in
the first quarter compared to $109.8 million in the prior year
quarter, or a decrease of 3.8%, primarily due to the
divestiture of the mortgage product line in the second quarter
of fiscal 2007 and a decline associated with insurance
solutions, marketing solutions and customer management
products, partially offset by an increase in revenues derived
from collections and recovery, fraud and consumer products.

-- Scoring Solutions revenues were $42.7 million in the first
quarter compared to $44.9 million in the prior year quarter,
or a decrease of 4.9%, primarily due to a decrease in revenues
derived from our PreScore(R) Service.

-- Professional Services revenues were $37.1 million in the first
quarter compared to $39.3 million in the prior year quarter,
or a decrease of 5.6%, primarily due to a decline associated
with fraud, and customized analytic implementation services,
partially offset by an increase in revenues derived from
customer management and marketing solutions services.

-- Analytic Software Tools revenues decreased to $13.9 million in
the first quarter compared to $14.2 million in the prior year
quarter, or by 2.0%, due to a decline in revenues generated
from the sale of tool products.

Bookings Highlights

The bookings for the first quarter were $102.4 million compared to
$72.1 million in the same period last year. The company defines a "new
booking" as estimated future contractual revenues, including
agreements with perpetual, multi-year and annual terms. Management
regards the volume of new bookings achieved as one indicator of future
revenues, but they are not comparable to, nor should they be
substituted for, an analysis of the company's revenues.

Balance Sheet and Cash Flow Highlights

Cash and cash equivalents, and investments were $238.6 million at
December 31, 2007, as compared to $246.8 million at September 30,
2007. Significant changes in cash and cash equivalents from September
30, 2007 include cash provided by operations of $48.0 million,
borrowings under the revolving credit facility of $20.0 million, and
$13.2 million received from the exercise of stock options and stock
issued under an employee stock purchase plan. Cash used during the
first quarter includes $7.4 million related to purchases of property
and equipment and $82.4 million to repurchase common stock.

Acquisition of Dash Optimization Limited

The company also announced today that it has acquired Dash
Optimization ("Dash"), the leading software provider of optimization,
for $32 million. Dash's optimization technology complements our vision
to "be the leader in decision management" and our mission to "help
businesses make smarter decisions." Dash develops and markets
Xpress-MP, the world's leading software product for modeling and
optimization. Xpress-MP solves large-scale optimization problems and
enables better business decisions and resulting financial benefits.

We intend to integrate this technology into our Decision
Middleware(TM) business offering the market-leading solution in
business rule management systems, optimization software components and
predictive analytics. Dash is completely focused on optimization and
works in close partnership with its customers and OEM partners. Dash
has offices in the United Kingdom, Germany, the United States and
Japan with distribution partners in Europe and the Far East.

Outlook

The company expects revenues for second quarter fiscal 2008 to be
approximately $205.0 million and earnings per diluted share to be
approximately $0.44. The company expects revenues for fiscal 2008 to
be approximately $825.0 to $835.0 million and earnings per diluted
share to be approximately $1.80 to $1.90.

Company to Host Conference Call

The company will host a conference call today at 5:00 p.m. Eastern
Time (4:00 p.m. Central Time/2:00 p.m. Pacific Time) to discuss its
first quarter fiscal 2008 results, and outlook for the remainder of
fiscal 2008. The call can be accessed live on the Investor Relations
section of the company's Web site at www.fairisaac.com, and a replay
will be available approximately two hours after the completion of the
call through March 22, 2008.

About Fair Isaac Corporation

Fair Isaac Corporation (NYSE:FIC) makes decisions smarter. The
company's solutions and technologies for Enterprise Decision
Management give businesses the power to automate more processes, and
apply more intelligence to every customer interaction. Through
increasing the precision, consistency and agility of their decisions,
Fair Isaac clients worldwide increase sales, build customer value, cut
fraud losses, manage credit risk, reduce operational costs, meet
changing compliance demands and enter new markets more profitably.
Founded in 1956, Fair Isaac powers hundreds of billions of decisions
each year in financial services, insurance, telecommunications,
retail, consumer branded goods, healthcare and the public sector. Fair
Isaac also helps millions of individuals manage their credit health
through the www.myfico.com website. Visit Fair Isaac online at
www.fairisaac.com.

Statement Concerning Forward-Looking Information

Except for historical information contained herein, the statements
contained in this news release that relate to Fair Isaac or its
business are forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially,
including the success of the Company's Enterprise Decision Management
strategy, its ability to recruit and retain key technical and
managerial personnel, the maintenance of its existing relationships
and ability to create new relationships with customers and key
alliance partners, its ability to continue to develop new and enhanced
products and services, competition, regulatory changes applicable to
the use of consumer credit and other data, the possibility that the
anticipated benefits of acquisitions, including expected synergies,
will not be realized and other risks described from time to time in
Fair Isaac's SEC reports, including its Annual Report on Form 10-K for
the year ended September 30, 2007. If any of these risks or
uncertainties materialize, Fair Isaac's results could differ
materially from its expectations. Fair Isaac disclaims any intent or
obligation to update these forward-looking statements.

Fair Isaac, Strategy Machine, Decision Middleware and PreScore are
trademarks or registered trademarks of Fair Isaac Corporation in the
United States and in other countries.

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FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Quarters Ended December 31, 2007 and 2006
(In thousands, except per share data)
(Unaudited)

Quarter Ended
December 31,
-------------------
2007 2006
--------- ---------

Revenues $199,385 $208,227
--------- ---------

Operating expenses:
Cost of revenues 75,940 70,569
Research and development 19,615 17,719
Selling, general and administrative 67,511 68,648
Amortization of intangible assets 3,546 6,390
Restructuring and acquisition-related (445) -
--------- ---------
Total operating expenses 166,167 163,326
--------- ---------
Operating income 33,218 44,901
Other income (expense), net (2,128) 435
--------- ---------
Income before income taxes 31,090 45,336
Provision for income taxes 10,904 14,111
--------- ---------
Net income $ 20,186 $ 31,225
========= =========

Earnings per share:
Basic $ 0.40 $ 0.54
========= ========
Diluted $ 0.39 $ 0.52
========= ========

Shares used in computing earnings per share:
Basic 50,042 58,057
========= ========
Diluted 51,200 59,985
========= ========
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FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2007 and September 30, 2007
(In thousands)
(Unaudited)

December 31, September 30,
2007 2007
------------ -------------

ASSETS:
Current assets:
Cash and cash equivalents $ 99,863 $ 95,284
Marketable securities 58,108 125,327
Accounts receivables, net 158,534 177,402
Prepaid expenses and other current
assets 19,791 24,738
------------ -------------
Total current assets 336,296 422,751

Marketable securities and investments 80,633 26,150
Property and equipment, net 50,705 52,157
Goodwill and intangible assets, net 750,547 755,845
Other noncurrent assets 19,108 18,868
------------ -------------
$ 1,237,289 $ 1,275,771
============ =============

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and other accrued
liabilities $ 39,207 $ 48,187
Senior convertible notes 390,963 390,963
Accrued compensation and employee
benefits 35,884 44,202
Deferred revenue 41,658 42,572
------------ -------------
Total current liabilities 507,712 525,924

Revolving credit agreement 190,000 170,000
Other noncurrent liabilities 16,068 13,533
------------ -------------
Total liabilities 713,780 709,457

Stockholders' equity 523,509 566,314
------------ -------------
$ 1,237,289 $ 1,275,771
============ =============
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FAIR ISAAC CORPORATION
REVENUES BY SEGMENT
For the Quarters Ended December 31, 2007 and 2006
(In thousands)
(Unaudited)

Quarter Ended
December 31,
-------------------
2007 2006
--------- ---------

Strategy machine solutions $ 105,580 $ 109,753
Scoring solutions 42,727 44,918
Professional services 37,142 39,333
Analytic software tools 13,936 14,223
--------- ---------
Total revenues $ 199,385 $ 208,227
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FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Quarters Ended December 31, 2007 and 2006
(In thousands)
(Unaudited)

Quarter Ended
December 31,
---------------------
2007 2006
---------- ----------
Cash flows from operating activities:
Net income $ 20,186 $ 31,225
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 9,713 13,549
Changes in operating assets and liabilities 9,654 (3,732)
Other, net 8,483 18,606
---------- ----------
Net cash provided by operating
activities 48,036 59,648
---------- ----------

Cash flows from investing activities:
Purchases of property and equipment (7,440) (5,125)
Net activity from marketable securities 12,127 21,392
Other, net 1,362 (213)
---------- ----------
Net cash provided by investing
activities 6,049 16,054
---------- ----------

Cash flows from financing activities:
Proceeds from revolving line of credit 20,000 70,000
Proceeds from issuances of common stock 13,214 30,832
Repurchases of common stock (82,424) (154,490)
Other, net (306) 634
---------- ----------
Net cash used in financing activities (49,516) (53,024)
---------- ----------

Effect of exchange rate changes on cash 10 1,317
---------- ----------

Increase in cash and cash equivalents 4,579 23,995
Cash and cash equivalents, beginning of period 95,284 75,154
---------- ----------
Cash and cash equivalents, end of period $ 99,863 $ 99,149
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Fair Isaac Corporation
Investors & Analysts:
John D. Emerick, Jr., 800-213-5542
or
Marcy K. Oelhafen, 800-213-5542
investorrelations@fairisaac.com

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