Fair Isaac Corporation (FICO)

Pretax margin

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Earnings before tax but after interest (EBT)	US$ in thousands	553,624	471,309	473,142	257,000	216,072
Revenue	US$ in thousands	1,417,230	1,310,010	1,376,250	1,294,560	1,160,080
Pretax margin		39.06%	35.98%	34.38%	19.85%	18.63%

September 30, 2023 calculation

Pretax margin = EBT ÷ Revenue
= $553,624K ÷ $1,417,230K
= 39.06%

The pretax margin is a key financial ratio that represents the proportion of a company's revenue that translates into pre-tax income. A higher pretax margin indicates that the company is generating more earnings from its operations. Fair, Isaac Corp.'s pretax margin has shown fluctuation over the past five years, as depicted in the table provided.

In 2023, Fair, Isaac Corp. achieved a pretax margin of 36.58%, representing a significant improvement compared to the previous year. This indicates that the company was able to generate higher pre-tax income relative to its revenue, which is a positive sign of operational efficiency and profitability. It reflects the company's ability to manage its costs and expenses effectively while maximizing its earnings.

The 2022 pretax margin of 34.22% was slightly lower than the most recent year but still reflects a strong performance. It indicates that the company was able to maintain a relatively high level of profitability compared to its revenue.

Similarly, in 2021, Fair, Isaac Corp. demonstrated a pretax margin of 35.94%, which was also a robust performance, showcasing the company's ability to consistently generate healthy pre-tax profits.

The pretax margin in 2020, at 19.85%, and in 2019, at 18.63%, were lower compared to the more recent years. This suggests that the company may have faced challenges in maintaining profitability during those years.

In conclusion, Fair, Isaac Corp.'s pretax margin has displayed positive trends in recent years, indicating a strong ability to convert its revenue into pre-tax income. The upward trajectory of the pretax margin in the most recent year is particularly noteworthy, signaling improved operational efficiency and financial performance.