Question-and-Answer Session
Operator
[Operator Instructions]. And your first question comes from the line of Mark Bacurin.
Mark Bacurin - Robert W. Baird
Hi good afternoon. A couple of questions. On the Blaze Advisor in Model Builder sales, obviously pretty strong this quarter. Can you talk about specific demand drivers and whether or not that's being driven off of some of the early EDM successes?
Dr. Mark N. Greene - Chief Executive Officer
It actually sort of bodes well for the EDM success. What happens, especially in the newer markets and new geographies, is customers first get to know our companies through Blaze. They start with that middleware. It provides the foundation. If the infrastructure that allows us, we then go back and sell our EDM applications on top. So we have seen particular growth of the Blaze products in markets such as China and India, and in some of our newer entering industries, such as healthcare and insurance.
Mark Bacurin - Robert W. Baird
Great and then Chuck, I thought I heard you talk about some declining professional services revenue related to some EDM projects, and then, but you also talked about staffing up the professional services staff. It sounds like very recently. So just trying to understand is there a big wave of professional services activity coming as we move into fiscal '08, that you are staffing up ahead of or just trying to understand those two comments at they seem to be a little contradictory?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Yes, they do seem to conflict, and part of the issue of course is the EDM sales will be led by our license sale. And then we will follow with a professional services implementation. So the sale and the acceptance of the software precedes the... actually a lot of work specking it out to precede the actual implementation. So, we expect that we will follow with the use of professional services for personnel.
Mark Bacurin - Robert W. Baird
So in another words, the strong analytic and model builders sold this quarter probably, it's for shadowing, improving professional services revenue and that's the reason for staffing up this quarter?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Correct that would precede the run up for PS.
Mark Bacurin - Robert W. Baird
Great, and then just wanted to get an update that I hear and I want to know of kind of ongoing efforts to build sales distribution through systems integrators such as IBM in that. That's one of your key strategic priorities?
Dr. Mark N. Greene - Chief Executive Officer
Yes, we are making good headway there. We don't yet have big joint wins to announce publicly. We are very well engaged particularly with IBM in many countries around the world now, so I am quite optimistic, as we look at that pipeline, and you will be hearing I think about that in future. And we now have a team focusing on two or three other similar lines, not just IBM. So I think the foundation is in place, the pipelines are building. You should be seeing results in the near future.
Mark Bacurin - Robert W. Baird
Okay and then just finally, insurance solutions. I know you talked about them several quarter as being a drag. Can you just share with us what is sort of left there, that maybe at risk and when the comps start to get a little bit easier from some of the turn you are seeing there?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Well we think, we have insurance solutions sold both on the analytic side and then the insurance overview businesses there and as I think we will discussed it, while we will continue to evaluate peer review for strategic alternatives. But we are very... frankly we are very optimistic about some of the solutions we bring on the analytics side.
Mark Bacurin - Robert W. Baird
Can you... is it easy that involve strip out what the reviews was in the quarter and kind what the comparison will be in Q1 '08?
John D. Emerick, Jr. - Vice President, Corporate Development and Treasurer
This is John. So during the quarter peer review was down a little bit as a contract fell of, but we've also had some wins and so we expected that revenue actually can go up. It's not a one way declining prospect. There is actually a number of deals that were signed in prior quarters, but that revenue will start to pick up. So you are kind of in a valley and I would expect to see that Q1 kind of picks up a little bit and this quarter was just down from a couple of prior deals that fell off?
Mark Bacurin - Robert W. Baird
Okay, perfect. Thank you.
John D. Emerick, Jr. - Vice President, Corporate Development and Treasurer
Yes, thanks Mark.
Operator
Your next question comes from the line of Thomas Ernst.
Unidentified Analyst
Hi, this is Nandan Ambladi [ph] on behalf of Thomas Ernst from Deutsche Bank. Couple of questions; one is, on the exposure to your financial services. You said 66% of your segment I mean your vertical revenue comes from financial sector. But on the market side you said only 5% to 10% of the revenue is exposed to the mortgage market. What are the other sectors that you are serving and are you seeing any impact there?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Its larger to credit card sector and other portions of retail banking, some DDA and credit and debit applications, but principally credit.
Unidentified Analyst
Okay and you are not seeing much impact there?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
That's correct.
Unidentified Analyst
Okay.
Charles M. Osborne - Executive Vice President and Chief Financial Officer
I am sorry, not impacting those segments from the mortgage issues.
Dr. Mark N. Greene - Chief Executive Officer
Of a negative nature.
Unidentified Analyst
Right. Okay. Then on the other question, clearly your new marketing activities seem to have helped be at a uniform marketing message and so on, but as you expand globally what do you see that's left to do so that you've good head of scene going into 2008?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Thank you for the compliment on marketing. I think we know, what we want to do there. I think we are still in the very early stages of doing it. So, establishing a consistent brand profile, raising our image, declining value proposition, taking segment leadership and thought leadership and so on, that's all in front of us yet. We now have the team on board to do that and I think we got a good clients for doing it, but we're not there yet.
Unidentified Analyst
Okay. Of the eight countries that you believe account for about half your international segments, would you be willing to name any of the countries that you're focused on?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Yes, a couple of them will not surprise you. The places where we're probably, like relative to the opportunity include Australia, Germany and Japan. So, those three come to mind as places where we're already present, but we could strengthen our capabilities. China is also on the list for different reasons. But that's been previously covered, that's enough.
Unidentified Analyst
Right. Okay, thank you.
Dr. Mark N. Greene - Chief Executive Officer
Thanks.
Operator
Your next question comes from the line of Fredrick Searby.
Fred Searby - JP Morgan
Yes. Thank you. Couple of questions; one, I wondered, if you could talk about, what you said TRIAD was slightly down. I was just wondering if you could talk about, what your expectation is in the launch of the new product and what you see there? And then secondly, just free cash flow if you can help us, should that move in line? I think you are guiding for 10% earnings growth for that track, the earnings growth in your '08... fiscal '08 guidance?
Dr. Mark N. Greene - Chief Executive Officer
With respect to TRIAD portion, I will take that one. This is normal sort of product transition. We're rolling out in the coming months TRIAD 9, which has gotten a lot of strong receptions from customers, who had an early look. So, you should expect improvement in that line item in the next quarter or two, as that product seems to develop traction in the marketplace. So, nothing unusual going on there and we're well on track with the next product release that should improve the fortunes of TRIAD.
Charles M. Osborne - Executive Vice President and Chief Financial Officer
On the free cash flow, we should expect that to move in line with net income, the other factors that add back to that, obviously we have...we will see some impact on income upward, because of our reduced amortization. But the sum of the two will come up with the same numbers. So, we should see those grow with net income. Our CapEx will be in line with last year and I wouldn't predict any changes in dividend at this point.
Fred Searby - JP Morgan
And one quick follow-up just if you can remind me the bookings number is not of a good year-on-year. If we look at that and what is the change again that explains it's down year-on-year, but you've in the past highlighted that there is a change in the way?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Yes, Mark highlighted this needs to talk in terms of the average life contracts. The bookings value is the sum of the bookings value of items taken during the quarter and has contracts have shortened both in Fair Isaac and across the industry, the absolute value in terms of total value of the bookings, in any, in the quarter is less, but it doesn't necessarily predict that revenue achieved from that in following periods will be lower, it simply argues perhaps renewals will come quicker.
Dr. Mark N. Greene - Chief Executive Officer
That said, we did see two quarters in a row now of improving in bookings. So, the trend is favorable. But Chuck is correct. The overall macro factor that's affecting the entire tech industry is that customers tend to be buying shorter amounts of contracts at times.
Charles M. Osborne - Executive Vice President and Chief Financial Officer
And your question really goes to the fact that the bookings this quarter is still lower than the year ago.
John D. Emerick, Jr. - Vice President, Corporate Development and Treasurer
Fred,this is John, I want to just clarify, it sounded like. We never alluded to the fact, that there is a change in anyway that we do anything with bookings. That was something that an analyst wrote about. But we do not... we don't agree with that interpretation.
Dr. Mark N. Greene - Chief Executive Officer
We measured on the same. But we are observing an industry-wide phenomenon.
Fred Searby - JP Morgan
Okay. Thank you, gentlemen.
Operator
Your next question comes from the line of Michael Nemeroff.
Michael Nemeroff - Wedbush Morgan Securities
Hi, good afternoon. Couple of questions. First and foremost, there has been a lot of talk about financial services spending, enterprise spending. And the fact that it is slowing or some companies are being cautious, given the pie to the financial services vertical. Are you seeing anything out there, Mark that would give you a pause about the pipeline or anything related to activity going into the budgeting for next year?
Dr. Mark N. Greene - Chief Executive Officer
Thanks for the question. Actually no, the space that we operate in tends to be sort of high value and if you will, almost a mission critical space. So, this will be actually an area, where many of our clients doubled down if they have worries about, where they can afford to spend on technology. So, we are not seeing the kind of weakness in pipelines and market conditions that you heard other tech companies refer to.
Michael Nemeroff - Wedbush Morgan Securities
Okay. Then on the scoring business, you alluded to an erosion of that business in fiscal 2008. Can you talk a little... what kind of a decline can we expect and also can you enlighten us on who the competition that's gaining share especially in the PreScore area?
Dr. Mark N. Greene - Chief Executive Officer
Okay. The decline that we've figured into our models is on the order of couple of percentage points. So, we are not talking dramatic numbers but there is erosion. And there is, as I indicated, potential for further pressure downwards from here. Two sorts of competition; first a fair amount of it is in-house. As the credit card industry is consolidating a number of our clients have sufficient organization capacity that takes some of this working in-house. Even when they do, I should point out, that doesn't mean a loss of all of our business. We can still sold such clients tools and frameworks to allow them to build their own scores. But it may have a depressing affect on our scoring sales.
Second, probably the most notable external competitors would be the VantageScore. And we do see that product being evaluated and tested in the marketplace.
Michael Nemeroff - Wedbush Morgan Securities
Okay. And then on the sales cycle, EDM obviously had a very strong quarter. But we have seen this in the past, where there has been some pretty strong variability in those results. Can you talk about the sales cycles, whether they are shortening for the EDM, have you guys got a better process to closing those deals. And also if you could give you a little bit of flavor of what the ASPs for the EDM deals and how that's been trending over the last couple of quarters?
Dr. Mark N. Greene - Chief Executive Officer
With respect to sales cycle, I don't see it shortening, it's still on the average of nine months plus or minus. What we are getting better at is consistency of executing against that sales cycle. We have a pretty good pipeline management discipline in place now. We have closed plans as they say in the industry, which help us bring these transactions in our pretty smooth drive path. So, we have good invisibility in the pipeline. We know, what we are doing and we are doing it better. But we are not necessarily shortening the sales cycle or making it predictable. Second part of your question...
Charles M. Osborne - Executive Vice President and Chief Financial Officer
YesI don't think, we have anything to do in hand on ASP related to EDM space around for prepared release. So....
Michael Nemeroff - Wedbush Morgan Securities
And then the last final question is related to acquisitions in the past. The company has been acquisitive. There has really been no activity from you guys since you started. Do you feel like, you are in a better shape or at to maybe rev up the acquisition program again. And how much of that is factored into your guidance?
Dr. Mark N. Greene - Chief Executive Officer
I would give sort of temperate response here. Yes, I think that the company is increasingly in better shape. And so we've a more solid foundation on top of which we could acquire. The 3% number that we have guided to assumes only organic growth. There is the opportunity for selected acquisitions on top of that and indeed we are looking at a few. So, once you think about niche acquisitions at this stage not large scale acquisitions.
Michael Nemeroff - Wedbush Morgan Securities
Thank you very much.
Dr. Mark N. Greene - Chief Executive Officer
Thank you.
Operator
Your next question comes from the line of Tony Wible.
Tony Wible - Citigroup Global Markets
Good evening. I was hoping that you could start by, describing where exactly you would see opportunity to better manage cost. I think you had mentioned in your commentary that there would continue to be cost... better cost management. I think the guidance implies nice improvements in margins. Can you talk about where exactly that would come from, outside of the intangible?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Yes, we continue to experience opportunities both in facilities, we have a pretty wide reach, consolidating some of our facilities and allowing, to be a little more efficient in the way we... our people are positioned and how particularly with some of the acquisitions, we did, we have some fairly small facilities, which with consolidation, which helped our process. We've made some strides and how we managed some of our benefits. Certainly the efficiency of our PS ranks and some of our administrative staff, we have been able to improve. We look for areas both in some of our units for cost efficiencies on the development side, using offshore. We made a reference to the R&D, in fact that R&D has come down. But it's really has been a function of putting people in India, adding to our smaller development efforts there. All of these things, kind of add up, it's a game of inches if you get right onto it, and you look for opportunities everywhere.
Tony Wible - Citigroup Global Markets
Okay. And the charges that you took for the legal charges this quarter. What was the pre-tax amount of that? There was an after-tax number that...
Charles M. Osborne - Executive Vice President and Chief Financial Officer
I think, it's used back into using about 36% rate, you will get the number on your own.
Tony Wible - Citigroup Global Markets
Great. Can you guys quantify. How big PreScore and myFICO.com are that today?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
I think our PreScore revenue is just a little under $13 million in total and we are looking for... we are experiencing some pricing pressure in some of that, as both analytic staffs and even VantageScore in some cases are used to negotiate better deals.
Tony Wible - Citigroup Global Markets
Any concerns about regulatory environment changing for either of those businesses?
Dr. Mark N. Greene - Chief Executive Officer
No, if anything outside the U.S. there is somewhat favorable movement in certain countries towards regulatory climates that would favor our scoring technology. So no downward concerns here.
Tony Wible - Citigroup Global Markets
Okay and just to check, I mean we have seen the lifecycle of the bookings come down. It appears that there is a bigger tax elements driving, some of that shorter life cycle on the bookings. But is that in part, at all driven by Fair Isaac, or is there a contemplation of maybe changing the pricing from Fair Isaac from more of a transactional, to maybe a higher license and maintenance fee, over shorter period of time. Does that ever come across the Board, any idea?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Yes as a strategy, as a tactic I think we'll look for whatever terms, especially in contracts that will allow us to partner longer with the financial institutions. So we will look for the ways to provide professional services on an ongoing basis, to help them with their modeling, to have follow-on product sales that will allow us. If that means we have to carve a contract up into more elements with multiple licenses, we will do things like that. Some of those things will appear as though the bookings are smaller in the near term. But it gives us an opportunity, throughout this we try to keep our client-facing people in front of the customer at all times with renewals and other opportunities for new products.
Tony Wible - Citigroup Global Markets
I guess, is it fair to say looking at the '08 commentary that you are generally expecting your bookings lifecycle to be about still that's two years?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Yes that's what was our approach in trending on average. I think as Mark said about 1.8 this... the contracts done this quarter.
Dr. Mark N. Greene - Chief Executive Officer
That's right and we see that number remaining roughly constant.
Tony Wible - Citigroup Global Markets
Okay. Last question is just, can you comment on how Falcon did this quarter, in particular the new product?
Dr. Mark N. Greene - Chief Executive Officer
We are calling out additional I mean revenues by pipeline. but I mean we've being experiencing some recovery in Falcon, as we deal with some of the issues that we have guided and it certainly hasn't declined but it's we are really looking for it to perform in '08.
Tony Wible - Citigroup Global Markets
Okay, great. Thank you.
Dr. Mark N. Greene - Chief Executive Officer
Thank you.
Operator
And your next question comes from the line of Kevane Wong.
Kevane Wong - JMP Securities
Hi, how you are doing guys. I guess first looking at the scoring segment, I know before when you are looking at this quarter, you are as it was indicated that 3% to 5% growth that you would be seeing. The actual growth was lower than that. Was that drop off because of the drop in some other parts of the scoring or is that because of the pricing being a little more aggressive down than you are expecting?
Dr. Mark N. Greene - Chief Executive Officer
I think this is a combination of two things. The pricing pressures were somewhat stronger than we had anticipated and although volume grew, it grew by a little bit less than we had seen in the prior quarters. So as the business was up just over 1% instead of 3%. Sort of in the range of what we might have expected, but a little bit brighter.
Kevane Wong - JMP Securities
Got you. And how should we think about that business. I mean as we go forward is this going to sort of start become more like what the viewers see where its, you get good volumes but you start having sort of flat to down, as pricing sort of on year-over-year basis. Is that a good way to start thinking about or how would you guide us to sort of think about that?
Dr. Mark N. Greene - Chief Executive Officer
I will let Chuck speak the guidance question. We have discussed this business in the past, I always think about it as a few times seems price quantity business price for many years has been on a downward trend and of late that downward trend, the commodization [ph] trend has somewhat accelerated. Q1 on the other hand, the volume as far as been growing. And of late the volatility in the plus economic sector has sort of benefited. So the Q has been up for us significantly the last two quarters. So, we've done okay of late. The way that we try to resist the key pressure going forward is through innovation. And so these new products scores that we refer to the FICO rate the global FICO score, debt capacity index, something called Transition Matrices which will show clients how FICO scores will perform during this business cycles, what can you expect to happen in your portfolio scores as the economy goes up or down, all of those are differentiators for us that we think will allow us to hold on to the teeth.
Kevane Wong - JMP Securities
Got you. Also just sort of follow on question but looking at the tool sales kind of nice jump that has been volatile. You've talked about sort of the pipeline. You've got it little better execution and visibility on that. Should we be expecting sort of your tool sales on the quarter-to-quarter basis, since the start becoming more stable around this level or we still looking near term for little bit a choppiness simply by the nature of these kind of sales?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
No the sales cycles for these is longer than for some of our products and so but they also are very high value they add contracts they also include a fair amount of professional services so we still expect perhaps some near-term volatility, but over time we still look for that to continue to grow above the one of leaders in our growth rate. These are also very profitable contracts and so we expect that to continue as well.
Kevane Wong - JMP Securities
Got you. And also when you were talking about narrowing the number of the countries and from 30 really to 8 us as far as our focus. Would there be any charges that we should be looking on that basis as you sort of refocus?
Dr. Mark N. Greene - Chief Executive Officer
No, this is not a case of exiting country, this is a case of reallocating resources that put the majority of them where the opportunity is, but no charge is associated.
Kevane Wong - JMP Securities
That's okay. And then lastly sort of just is as far as Q4, is there a particular impact that we should be looking for from the fires from the San Diego operations, is it sort of negligible. How should we look at that?
Charles M. Osborne - Executive Vice President and Chief Financial Officer
No I think this is we aren't looking for the financial impact per se to Fair Isaac but it's certain kind of disruption to our staff in San Diego. We have many people displaced from their homes. That office had to shutdown for a week and right now they are in a very critical time, much of our finance staff is housed in San Diego as well as our product teams looking where we think...
Dr. Mark N. Greene - Chief Executive Officer
We had no damage to facilities and we are back fully in business for that location now. So it was disruptive but in the past.
Kevane Wong - JMP Securities
Got you. Perfect thank you.
Dr. Mark N. Greene - Chief Executive Officer
Thank you.
Operator
And at this time there are no further questions.
Dr. Mark N. Greene - Chief Executive Officer
Thank you very much operator. We appreciate it and we'll talk to everybody next quarter.
Charles M. Osborne - Executive Vice President and Chief Financial Officer
Thank you.
Operator
And this concludes today's Fair Isaac Corp.'s fourth quarter earnings call. You may now disconnect.
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