![]() In light of improved visibility into the full year revenue outlook, management has increased its FY23 revenue guidance from $1.46 billion to $1.48 billion. However, EBITDA margins fell by 50 basis points to 50.5%, owing primarily to one-time costs of approximately $10 million, two-thirds of which were carried forward from the upcoming quarters, i.e., Q3 and Q4 of 2023. The Software revenue, on the other hand, increased by 4.8% year on year, accompanied by a 16.6% increase in ARR. Scores revenue increased by 8% year over year, owing primarily to growth in the B2B. 1Q23 earningsįICO reported a 6.5% increase in revenue to $380 million in the 2Q23. While I believe FICO has strong pricing power in the Scores business and a Software business that is growing very well, both which enables significant operating leverage, I recommend a hold rating as I would prefer valuation to be cheaper (at least near or below its average) before investing. For instance, consensus has EPS ~2x in 3 years and 2.5x from LTM2Q23. This tells me that there are a lot of expectation embedded into the share price today. While the earnings outlook is positive and 2Q23 results were really good, my concern is the high valuation that FICO is trading at today - 33x forward PE and 28x 2 year forward PE. The 2Q23 results were spectacular, reflecting strong performance in the Scores and Software segments, and importantly, FY23 consensus figures are not more or less in the bag with management increasing FY23 guide for revenue and EPS. The typical clients are banks, collection agencies, government, insurance, etc. Reuters, part of Thomson Reuters, is the world’s leading provider of trusted journalism and news. For more information, visit tr.com.Fair Isaac Corporation ( NYSE: FICO) provides tools to manage risk, fight fraud, and meet strict government regulations. Its products combine highly specialized software and insights to empower professionals with the data, intelligence, and solutions needed to make informed decisions, and to help institutions in their pursuit of justice, truth, and transparency. The company serves professionals across legal, tax, accounting, compliance, government, and media. Thomson Reuters (NYSE / TSX: TRI) (“TR”) informs the way forward by bringing together the trusted content and technology that people and organizations need to make the right decisions. The LFFI, produced by the Thomson Reuters Institute, is a composite index of law firm market performance using real-time Financial Insights data drawn from major law firms in the United States and key international markets. Given the current economic uncertainty, firms may continue trying differing strategies to suit their unique blend of practices, clients, and locations.”Ī copy of the Q1 2023 LFFI report can be downloaded here. “Some firms achieved topline growth primarily through higher rates, while others were able to better manage capacity to accommodate more work. “While the quarter was generally positive for law firms, the good news was not evenly distributed,” said Paul Fischer, president, Legal Professionals, Thomson Reuters. ![]() The report describes the upturn as welcome news, but cautions that despite the strong performance of litigation and labor & employment, the overall state of the market remains precarious and challenging for firms, given the potential threat of a recession. 2.8% – resulting in significantly higher direct expenses. Midsize firms also had the strongest headcount growth – at nearly twice the level of Am Law 100, 4.9% vs. ![]() Midsize, conversely, had the strongest demand, up 1.8%, and was the only segment with positive demand growth for the quarter. At the same time, however, Am Law 100 had the weakest demand among the segments, falling 1.5%. Am Law 100 firms were strengthened primarily on the basis of their high rate growth, up a record 7.2%. The first-quarter recovery played out differently across the market segments. For most of last year, rate growth lagged behind inflation this marks the first time that rates have grown faster than the U.S. Meanwhile, worked rates surged by an average of 5.5% – the highest quarterly growth since prior to the Great Financial Crisis of 2008-09. However, the recovery was uneven and uncertainty still remains as to the direction of the market going forward, according to the Q1 2023 Thomson Reuters Law Firm Financial Index (LFFI) powered by Financial Insights.ĭemand for law firm services was barely positive, up 0.1%, but nevertheless snapped a three-quarter streak of negative demand growth. TORONTO, – A new report from Thomson Reuters (TSX/NYSE: TRI), a global content and technology company, highlights that the law firm market rebounded in the first quarter due to improved demand and the highest rate growth in more than a decade.
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