Fair Isaac Corporation (FICO)

Interest coverage

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	663,219	649,170	618,351	575,634	563,964	540,276	522,282	580,577	532,648	513,234	483,643	373,164	345,115	299,177	283,657	284,391	260,655	255,824	243,481	201,441
Interest expense (ttm)	US$ in thousands	96,908	95,546	92,082	86,258	79,572	68,967	58,617	49,914	42,646	40,092	39,534	40,739	42,050	42,177	42,202	41,090	39,844	39,752	39,307	37,419
Interest coverage		6.84	6.79	6.72	6.67	7.09	7.83	8.91	11.63	12.49	12.80	12.23	9.16	8.21	7.09	6.72	6.92	6.54	6.44	6.19	5.38

December 31, 2023 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $663,219K ÷ $96,908K
= 6.84

The interest coverage ratio of Fair, Isaac Corp. has been relatively stable over the past eight quarters, with a range of 6.62 to 9.86. This ratio indicates the company's ability to meet its interest payments using its operating income. A higher ratio suggests a greater ability to meet interest obligations.

The gradual decline in the interest coverage ratio from 9.86 in March 2022 to 6.64 in March 2023 raises some concerns, suggesting a potential decrease in the company's ability to cover its interest expenses with operating income. However, the ratio remained above 6 over this period, indicating that Fair, Isaac Corp. has maintained a comfortable margin in meeting its interest obligations.

It is important to monitor this ratio closely in subsequent periods to ensure that the company's ability to cover its interest payments remains strong. Overall, while the recent trend shows a slight decline in interest coverage, Fair, Isaac Corp. has maintained a satisfactory level of ability to meet its interest obligations.