Shares of Fair Isaac Corporation cratered nearly 15% in after-hours trading Wednesday, erasing roughly $4 billion in market value after the company released fiscal third-quarter 2026 results that apparently failed to justify a stock that had been on a five-day tear, climbing from $1,206 to $1,373 heading into the print. Now I have a clear picture of the actual Q3 results and the context. Let me piece this together.
FICO Drops 15% After Hours Despite Raising Guidance — Is Wall Street Punishing a Revenue Miss or Rethinking the Entire Scoring Story?
Shares of Fair Isaac plunged 14.9% to $1,169 in after-hours trading Wednesday after the credit-scoring giant's fiscal third-quarter results landed below where an increasingly optimistic market had positioned itself. The company posted revenue of $674 million and GAAP earnings of $10.45 per share, up from $536 million and $7.40 a year ago. But the stock had rallied 14% in five sessions heading into the print, and the numbers fell short of the bar investors had set.
Revenue Came Up Just Short of an Elevated Consensus. Analysts expected roughly $679 million in quarterly revenue.
FICO delivered $674 million — a miss of about $5 million, or less than 1%. In normal times that's a rounding error, but for a stock trading at roughly 39 times earnings before the report, per recent data, even slight disappointments get punished. That the miss came after a five-day buying spree amplified the reaction in thin after-hours trading.
Adjusted Earnings Beat, but Not by Enough. Non-GAAP net income hit $276.6 million, or $12.18 per share, compared with $8.57 a year ago — a 42% jump. The consensus had been around $12.02, meaning FICO cleared that hurdle. But last quarter's blowout — $12.50 adjusted EPS on 39% revenue growth — had trained traders to expect more. Merely meeting the bar no longer satisfies when the stock prices in perfection.
The Software Side Is the Quiet Concern. Software revenues rose just 2% year-over-year to $215.3 million. That's a sharp deceleration from the prior quarter's 7% software growth.
Annual recurring software revenue (the yearly value of repeat subscription contracts) grew 10%, but that was entirely driven by a 62% surge in the company's newer cloud platform, while older products shrank 17%. Investors counting on FICO to become a broader software company — not just a scoring tollbooth — got a reminder that the transition is uneven.
Guidance Was Raised, but Maybe Not Enough to Calm Nerves. CEO Will Lansing said the company "delivered another quarter of strong performance" and confirmed a raise to full-year guidance. Heading in, FICO's prior full-year target was $2.45 billion in revenue and $40.45 in adjusted EPS. The scale of the new raise — still being digested on the earnings call — will determine whether this selloff sticks or reverses by morning. Wednesday's broader market rout, with the Dow dropping 1,153 points after the Fed held rates steady, adds another headwind to any overnight recovery.