What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-11-07 compared with 2024-11-06 · 157 added, 121 removed, 1078 unchanged (21% of the section changed)

3 unchanged sentences

Fair Isaac Corporation

Bozeman, Montana

Opinions on the Financial Statements and Internal Control over Financial Reporting

68 unchanged sentences

Goodwill 783,340 782,752

Intangible assets, net — 917

Deferred income taxes 118,553 86,513

42 unchanged sentences

Amortization of intangible assets — 917 1,100

Restructuring charges 10,922 — —

Gain on product line asset sale — — ( 1,941 )

2 unchanged sentences

Interest expense, net ( 133,647 ) ( 105,638 ) ( 95,546 )

Other income (expense), net 14,034 6,340 ( 2,138 )

Other income, net 11,392 14,034 6,340

Income before income taxes 802,595 642,025 553,624

52 unchanged sentences

Deferred income taxes ( 32,486 ) ( 27,330 ) ( 47,378 )

Net (gain) loss on marketable securities ( 9,834 ) ( 2,908 ) 9,269

Net gain on marketable securities ( 5,024 ) ( 9,834 ) ( 2,908 )

Non-cash operating lease costs 9,604 12,423 14,708

15 unchanged sentences

Purchases of marketable securities ( 6,496 ) ( 18,372 ) ( 10,623 )

Cash transferred, net of proceeds, from product line asset sale and business divestiture — ( 6,126 ) 2,258

Cash transferred, net of proceeds, from product line asset sale — — ( 6,126 )

Net cash used in investing activities ( 43,719 ) ( 27,993 ) ( 15,954 )

28 unchanged sentences

Fair Isaac Corporation (NYSE:

FICO) (together with its consolidated subsidiaries, the “Company,” which may also be referred to in this report as “we,” “us,” “our,” or “FICO”) is a leading applied analytics company.

FICO) (together with its consolidated subsidiaries, the “Company,” which may also be referred to in this report as “we,” “us,” “our,” or “FICO”) is a global analytics software leader.

We were founded in 1956 on the premise that data, used intelligently, can improve business decisions.

1 unchanged sentence

Most leading banks and credit card issuers rely on our solutions, as do insurers, retailers, telecommunications providers, automotive lenders, consumer reporting agencies, public agencies, and organizations in other industries.

We also serve consumers through online services that enable people to access and understand their FICO Scores — the standard measure in the United States (“U.S.”) of consumer credit risk — empowering them to increase financial literacy and manage their financial health.

We also serve consumers through online services that enable people to access and understand their FICO Scores — the standard measure of consumer credit risk in the United States (“U.S.”) — empowering them to increase financial literacy and manage their financial health.

Principles of Consolidation and Basis of Presentation

1 unchanged sentence

All intercompany accounts and transactions have been eliminated.

Certain prior year amounts have been reclassified to conform to current year presentation.

Use of Estimates

5 unchanged sentences

and the realizability of deferred tax assets.

We also use estimates in determining the remaining economic lives and carrying values of acquired intangible assets, property and equipment, and other long-lived assets.

We also use estimates in determining the remaining economic lives and carrying values of property and equipment and other long-lived assets.

In addition, we use assumptions to estimate the fair value of reporting units and share-based compensation.

2 unchanged sentences

Cash and cash equivalents consist of cash in banks and investments with an original maturity of 90 days or less at time of purchase.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Fair Value of Financial Instruments

4 unchanged sentences

We categorize our investments in debt and equity instruments as trading, available-for-sale or held-to-maturity at the time of purchase.

Trading securities are carried at fair value with unrealized gains or losses included in other income (expense).

Trading securities are carried at fair value with unrealized gains or losses included in other income, net.

Available-for-sale securities are carried at fair value measurements using quoted prices in active markets for identical assets or liabilities with unrealized gains or losses included in accumulated other comprehensive income (loss).

1 unchanged sentence

Dividends and interest income are accrued as earned.

Realized gains and losses are determined on a specific identification basis and are included in other income (expense).

Realized gains and losses are determined on a specific identification basis and are included in other income, net.

We review marketable securities for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered.

1 unchanged sentence

Investments with remaining maturities over one year are classified as long-term investments.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Concentration of Risk

10 unchanged sentences

Estimated Useful Life

Data processing equipment and purchased software 3 years to 6 years

Data processing equipment and purchased software 3 years

Internal-use software 4 years

4 unchanged sentences

Depreciation and amortization on property and equipment totaled $ 10.7 million, $ 9.4 million and $ 10.1 million during fiscal 2025, 2024 and 2023, respectively.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Internal-Use Software

11 unchanged sentences

We assess goodwill for impairment for each of our reporting units on an annual basis during our fourth fiscal quarter using a July 1 measurement date unless circumstances require a more frequent measurement.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

We have determined that our reporting units are the same as our reportable segments.

16 unchanged sentences

See Note 9 for further discussion on revenues.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

We estimate our income taxes based on the various jurisdictions where we conduct business, which involves significant judgment in determining our income tax provision.

8 unchanged sentences

An increase in the valuation allowance would have an adverse impact, which could be material, on our income tax provision and net income in the period in which we record the increase.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

We recognize and measure benefits for uncertain tax positions using a two-step approach.

22 unchanged sentences

At the end of the reporting period, foreign-currency-denominated assets and liabilities are remeasured into the functional currencies of the reporting entities at current market rates.

The change in value from this remeasurement is reported as a foreign exchange gain or loss for that period in other income (expense), net in the accompanying consolidated statements of income and comprehensive income.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

The change in value from this remeasurement is reported as a foreign exchange gain or loss for that period in other income, net in the accompanying consolidated statements of income and comprehensive income.

We recorded transactional foreign exchange gains (losses) of $ 1.1 million, $( 0.6 ) million and $( 2.6 ) million during fiscal 2025, 2024 and 2023, respectively.

5 unchanged sentences

Advertising and promotion costs totaled $ 29.7 million, $ 12.3 million and $ 9.8 million in fiscal 2025, 2024 and 2023, respectively.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

New Accounting Pronouncements

Recent Accounting Pronouncements Adopted

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2021-08, “ Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ” (“ASU 2021-08”).

ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities from acquired contracts using the revenue recognition guidance under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers , in order to align the recognition of a contract liability with the definition of a performance obligation.

We adopted ASU 2021-08 in the first quarter of fiscal 2024 and the adoption did not have a significant impact on our consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, “ Segment Reporting (Topic 280):

1 unchanged sentence

ASU 2023-07 expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, which means that it will be effective for our annual periods beginning October 1, 2024, and our interim periods beginning October 1, 2025.

Early adoption is permitted.

We are currently evaluating the impact that the updated standard will have on our disclosures within our consolidated financial statements.

We adopted ASU 2023-07 in fiscal 2025 and the adoption did not have a significant impact on our disclosures within our consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

5 unchanged sentences

We are currently evaluating the impact that the updated standard will have on our disclosures within our consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses” (“ASU 2024-03”).

ASU 2024-03 requires disaggregated disclosure of certain income statement expenses an entity presents on the face of the income statement into specified categories in disclosures within the footnotes to the financial statements, including employee compensation, depreciation, intangible asset amortization, and certain other expenses, when applicable.

The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, which means that it will be effective for our annual periods beginning October 1, 2027, and our interim periods beginning October 1, 2028.

Early adoption is permitted.

We are currently evaluating the impact that the updated standard will have on our disclosures within our consolidated financial statements.

In September 2025, the FASB issued ASU No.

2025-06, “Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”).

ASU 2025-06 removes references to prescriptive and sequential software development project stages, and instead requires capitalizing software costs when both of the following occur:

(1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended, with consideration as to when significant uncertainty associated with the development activities of the software has been resolved.

Additionally, ASU 2025-06 clarifies the disclosure requirements for capitalized internal-use software costs.

The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2027, which means that it will be effective for our fiscal years beginning October 1, 2028.

Early adoption is permitted.

We are currently evaluating the impact that the updated standard will have on our consolidated financial statements.

We do not expect that any other recently issued accounting pronouncements will have a significant effect on our consolidated financial statements.

31 unchanged sentences

Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation.

We did not have any assets or liabilities that are valued using inputs identified under a Level 3 hierarchy as of September 30, 2024 and 2023.

We did not value any assets or liabilities using inputs identified under a Level 3 hierarchy as of September 30, 2025 and 2024.

The following tables represent financial assets that we measured at fair value on a recurring basis at September 30, 2025 and 2024:

4 unchanged sentences

Cash equivalents (1)

$ 7,899 $ 7,899

Marketable securities (2)

24 unchanged sentences

We routinely enter into contracts to offset exposures denominated in the British pound, Euro and Singapore dollar.

Foreign-currency-denominated receivable and cash balances are remeasured at foreign exchange rates in effect on the balance sheet date with the effects of changes in foreign exchange rates reported in other income (expense), net.

The forward contracts are not designated as hedges and are marked to market through other income (expense), net.

The forward contracts are not designated as hedges and are marked to market through other income, net.

Fair value changes in the forward contracts help mitigate the changes in the value of the remeasured receivable and cash balances attributable to changes in foreign exchange rates.

24 unchanged sentences

therefore, their fair value was $ 0 at each of these dates.

Gains (losses) on derivative financial instruments were recorded in our consolidated statements of income and comprehensive income as a component of other income (expense), net, and consisted of the following:

Gains (losses) on derivative financial instruments were recorded in our consolidated statements of income and comprehensive income as a component of other income, net, and consisted of the following:

Year Ended September 30,

11 unchanged sentences

Balance at September 30, 2025 $ 146,648 $ 636,692 $ 783,340

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Composition of Certain Financial Statement Captions

The following table presents the composition of property and equipment, net and other accrued liabilities at September 30, 2024 and 2023:

The following table presents the composition of property and equipment, net at September 30, 2025 and 2024:

September 30,

7 unchanged sentences

Total $ 67,713 $ 38,465

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

The following table presents the composition of other accrued liabilities at September 30, 2025 and 2024:

September 30,

(In thousands)

Other accrued liabilities:

2 unchanged sentences

Total $ 114,618 $ 79,812

The following table represents our debt at carrying value at September 30, 2024 and September 30, 2023:

The following table represents our debt at carrying value at September 30, 2025 and 2024:

September 30,

2 unchanged sentences

Current maturities on debt:

Revolving line of credit $ — $ 35,000

The $ 300 Million Term Loan

The 2018 Senior Notes 400,000 —

debt issuance costs ( 459 ) —

Current maturities on debt 399,541 15,000

5 unchanged sentences

The 2019 Senior Notes and the 2021 Senior Notes 900,000 900,000

The 2025 Senior Notes 1,500,000 —

debt issuance costs ( 18,850 ) ( 9,729 )

5 unchanged sentences

Revolving Line of Credit and Term Loans

We have a $ 600 million unsecured revolving line of credit and a $ 300 million unsecured term loan (the “$300 Million Term Loan”) with a syndicate of banks that mature on August 19, 2026 .

Borrowings under the revolving line of credit and the $300 Million Term Loan can be used for working capital and general corporate purposes and may also be used for the refinancing of existing debt, acquisitions, and the repurchase of our common stock.

The $300 Million Term Loan requires principal payments in consecutive quarterly installments of $ 3.75 million on the last business day of each quarter.

Interest rates on amounts borrowed under the revolving line of credit and the $300 Million Term Loan are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5 %, and (c) one-month adjusted term Secured Overnight Financing Rate (“SOFR”) plus 1 %, plus, in each case, an applicable margin, or (ii) an adjusted term SOFR plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement) .

Adjusted term SOFR is defined as term SOFR for the relevant interest period plus a SOFR adjustment of 0.10% per annum.

On May 13, 2025, we amended our credit agreement with a syndicate of banks, increasing our borrowing capacity under the unsecured revolving line of credit from $ 600 million to $ 1.0 billion and extending its maturity to May 13, 2030.

Also on May 13, 2025, we repaid in full and terminated the $ 300 million unsecured term loan (the “$ 300 Million Term Loan”) and the $ 450 million unsecured term loan (the “$ 450 Million Term Loan”) outstanding under our credit agreement, utilizing proceeds from the issuance of the 2025 Senior Notes (as defined below).

Borrowings under the revolving line of credit can be used for working capital and general corporate purposes and may also be used for the refinancing of existing debt, acquisitions, and the repurchase of our common stock.

Interest rates on amounts borrowed under the revolving line of credit are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5 %, and (c) the Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 1 %, plus, in each case, an applicable margin, (ii) the Daily Simple SOFR plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement), or (iii) term SOFR (without a credit spread adjustment) plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement).

The applicable margin for base rate borrowings and for SOFR borrowings is determined based on our consolidated leverage ratio.

1 unchanged sentence

In addition, we must pay certain credit facility fees.

The revolving line of credit and the $300 Million Term Loan contain certain restrictive covenants including a maximum consolidated leverage ratio of 3.5 to 1.0, subject to a step up to 4.0 to 1.0 following certain permitted acquisitions and subject to certain conditions, and a minimum interest coverage ratio of 3.0 to 1.0.

The credit agreement also contains other covenants typical of unsecured credit facilities.

On June 13, 2024, we amended our credit agreement to provide for the issuance of a new $ 450 million unsecured term loan (the “$450 Million Term Loan”) with a syndicate of banks, increasing the total capacity of the credit agreement to $ 1.35 billion.

The $450 Million Term Loan is subject to the same interest rate provisions and covenants as the revolving line of credit and the $300 Million Term Loan, and matures on August 19, 2026 .

We have no obligation to make scheduled principal payments on the $450 Million Term Loan prior to the maturity date, but may prepay the $450 Million Term Loan, without premium or penalty, in whole or in part.

As of September 30, 2024, we had $ 210.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 6.396 %, $ 258.8 million in outstanding balance of the $300 Million Term Loan at an interest rate of 6.344 %, and $ 450.0 million in outstanding balance of the $450 Million Term Loan at an interest rate of 6.281 %.

We were in compliance with all financial covenants under the credit agreement as of September 30, 2024.

Future principal payments for the term loans are as follows:

Year Ending September 30, (In thousands)

2025 $ 15,000

Total $ 708,750

The credit agreement contains certain restrictive covenants including a maximum consolidated leverage ratio of 3.5 to 1.0, subject to a step up to 4.0 to 1.0 following certain permitted acquisitions and subject to certain conditions, and contains other covenants typical of an unsecured credit facility.

As of September 30, 2025, we had $ 275.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 5.423 %, and we were in compliance with all financial covenants under the credit agreement.

On May 8, 2018, we issued $ 400 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”).

2 unchanged sentences

The 2019 Senior Notes require interest payments semi-annually at a rate of 4.00 % per annum and will mature on June 15, 2028.

On December 17, 2021, we issued $ 550 million of additional senior notes of the same class as the 2019 Senior Notes in a private offering to qualified institutional investors (the “2021 Senior Notes,” and collectively with the 2018 Senior Notes and the 2019 Senior Notes, the “Senior Notes”).

The 2021 Senior Notes require interest payments semi-annually at a rate of 4.00 % per annum and will mature on June 15, 2028, the same date as the 2019 Senior Notes.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

On May 13, 2025, we issued $ 1.5 billion of senior notes in a private offering to qualified institutional investors (the “2025 Senior Notes,” and collectively with the 2018 Senior Notes, the 2019 Senior Notes and the 2021 Senior Notes, the “Senior Notes”).

The 2025 Senior Notes require interest payments semi-annually at a rate of 6.00 % per annum and will mature on May 15, 2033.

The indentures for the Senior Notes contain certain covenants typical of unsecured obligations and we were in compliance as of September 30, 2025.

5 unchanged sentences

The 2019 Senior Notes and the 2021 Senior Notes 900,000 875,250 900,000 864,000

The 2025 Senior Notes 1,500,000 1,518,750 — —

Total $ 2,800,000 $ 2,793,500 $ 1,300,000 $ 1,263,500

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Future principal payments for the Senior Notes are as follows:

1 unchanged sentence

2026 $ 400,000

Thereafter 1,500,000

Total $ 2,800,000

12 unchanged sentences

License revenue is recognized at a point in time when the software is made available to the customer and maintenance revenue is recognized ratably over the contract term.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Our SaaS products provide customers with access to and standard support for our software on a subscription basis, delivered through our own infrastructure or third-party cloud services.

11 unchanged sentences

Revenue on services provided on a time and materials basis is recognized by applying the “right-to-invoice” practical expedient as the amount to which we have a right to invoice the customer corresponds directly with the value of our performance to the customer.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Our scoring services include both business-to-business and business-to-consumer offerings.

17 unchanged sentences

Total $ 1,168,575 $ 822,294 $ 1,990,869 100 %

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Year Ended September 30, 2024

19 unchanged sentences

Total $ 740,145 $ 711,340 $ 640,182 100 % 100 % 100 %

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

The following table provides information about disaggregated revenue for on-premises and SaaS software within our Software segment by product features:

15 unchanged sentences

(1) Includes license portion of our on-premises subscription software and perpetual license, both of which are recognized when the software is made available to the customer, or at the start of the subscription.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

(2) Includes maintenance portion and usage-based fees of our on-premises subscription software, maintenance revenue on perpetual licenses, as well as SaaS revenue.

7 unchanged sentences

We derive a substantial portion of revenues from our contracts with the three major consumer reporting agencies, TransUnion, Equifax and Experian.

Revenues collectively generated by agreements with these customers accounted for 45 %, 41 % and 39 % of our total revenues in fiscal 2024, 2023 and 2022, respectively, with all three consumer reporting agencies each contributing more than 10% of our total revenues in fiscal 2024 and 2023, and two each contributing more than 10% of our total revenues in fiscal 2022.

At each of September 30, 2024 and September 30, 2023, one individual customer accounted for 10% or more of total consolidated receivables.

Revenues collectively generated by agreements with these customers accounted for 51 %, 45 % and 41 % of our total revenues in fiscal 2025, 2024 and 2023, respectively, with all three consumer reporting agencies each contributing more than 10 % of our total revenues in each of fiscal 2025, 2024 and 2023.

At September 30, 2025 and September 30, 2024, two customers and one individual customer, respectively, accounted for 10 % or more of total consolidated receivables.

Contract Balances

2 unchanged sentences

We record deferred revenue when the payment is made or due before we satisfy a performance obligation.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Receivables at September 30, 2025 and 2024 consisted of the following:

20 unchanged sentences

Significant changes in the deferred revenues balances are as follows:

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Year Ended September 30,

11 unchanged sentences

Examples include multi-year on-premises licenses that are invoiced annually with revenue recognized upfront and invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Performance Obligations

13 unchanged sentences

Significant judgment may be required to determine the SSP for each distinct performance obligation when it involves the consideration of many market conditions and entity-specific factors discussed above.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Significant judgment may be required to determine the timing of satisfaction of a performance obligation in certain professional services contracts with a fixed consideration, in which we measure progress using an input method based on labor hours expended.

11 unchanged sentences

These costs are recorded within selling, general, and administrative expenses.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Employee Benefit Plans

10 unchanged sentences

Total expenses under our employee incentive plans were $ 60.8 million, $ 62.5 million and $ 57.8 million during fiscal 2025, 2024 and 2023, respectively.

Restructuring Charges

During fiscal 2025, we incurred restructuring charges of $ 10.9 million in employee separation costs due to the elimination of 226 positions throughout the Company.

Cash payments for all the employee separation costs will be paid by the end of fiscal 2026.

There were no restructuring charges incurred during fiscal 2024 or 2023.

The following table summarizes our restructuring accrual for employee separation costs.

At September 30, 2025, the balance was classified as current liabilities and recorded in other accrued liabilities within the accompanying consolidated balance sheets.

September 30, 2025

(In thousands)

Restructuring accrual, beginning balance $ —

Expense additions 10,922

Cash payments ( 948 )

Restructuring accrual, ending balance $ 9,974

FAIR ISAAC CORPORATION

26 unchanged sentences

Other assets 21,538 18,241

133,727 104,252

valuation allowance — ( 2,183 )

Total deferred tax assets 167,731 133,727

63 unchanged sentences

As of September 30, 2025, we had accrued interest of $ 1.9 million related to the unrecognized tax benefits.

The Organization for Economic Co-operation and Development published Pillar Two Model Rules (“Pillar Two”) for a global 15% minimum tax rate that are in the process of being adopted by a number of jurisdictions in which we operate.

Pillar Two did not have a material impact on our fiscal 2025 consolidated financial statements.

The One Big Beautiful Bill Act (the “OBBBA”) of 2025 was signed into law on July 4, 2025.

We continue to monitor the impact of the tax provisions of the OBBBA, most of which are not effective for FICO until fiscal 2026 and after.

The OBBBA did not have a material impact on our fiscal 2025 consolidated financial statements.

Share-Based Employee Benefit Plans

13 unchanged sentences

Eligible employees may elect to have up to 15 % of their eligible pay withheld through payroll deductions to purchase FICO common stock during semi-annual offering periods.

The purchase price of the stock is 85 % of the closing sales price of FICO common stock on the last trading day of each offering period.

Offering period means approximately six-month periods commencing (a) on the first trading day on or after September 1 and terminating on the last trading day in the following February, and (b) on the first trading day on or after March 1 and terminating on the last trading day in the following August.

Beginning with the March 2025 through August 2025 offering period and in subsequent offering periods, the purchase price of the stock is the lower of 85 % of (i) the closing sales price of FICO common stock on the first trading day of each offering period or (ii) the closing sales price of FICO common stock on the last trading day of each offering period.

Prior to the March 2025 through August 2025 offering period, the purchase price was 85 % of the closing sales price of FICO common stock on the last trading day of each offering period.

At September 30, 2025, there were 826,719 shares available for issuance under the 2019 Purchase Plan.

7 unchanged sentences

In fiscal 2025 we received $ 14.7 million in cash from stock option exercises, with the tax benefit realized for the tax deductions from these exercises of $ 5.2 million.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Share-Based Activity

3 unchanged sentences

The following table summarizes the RSUs activity during fiscal 2025:

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Shares Weighted-average Grant-date Fair Value

27 unchanged sentences

Market Share Units

Market share units (“MSUs”) are granted to our senior officers and earned based on our total stockholder return relative to the Russell 3000 Index over performance periods of one , two and three years .

Market share units (“MSUs”) are granted to our senior officers and earned based on our total stockholder return relative to a benchmark index over performance periods of one , two and three years .

For grants made in fiscal 2025 and thereafter, performance is measured against the S&P 500 Index.

For grants made prior to fiscal 2025, performance was measured against the Russell 3000 Index.

We estimate the fair value of MSUs granted using the Monte Carlo valuation model and amortize the fair values over the requisite service period for each vesting tranche of the award.

5 unchanged sentences

36.2 % 36.3 % 47.3 %

Expected volatility in Russell 3000 Index 18.2 % 26.0 % 23.3 %

Expected volatility in Russell 3000 Index N/A 18.2 % 26.0 %

Expected volatility in S&P 500 Index (peer average) 30.9 % N/A N/A

Correlation between FICO and the Russell 3000 Index

60.3 % 73.5 % 74.7 %

N/A 60.3 % 73.5 %

Correlation between FICO and the S&P 500 Index

30.3 % N/A N/A

Risk-free interest rate 4.09 % 4.39 % 4.02 %

Average expected dividend yield — % — % — %

The expected volatility was determined based on daily historical movements in our stock price and the Russell 3000 Index for the three years preceding the grant date.

The correlation between FICO and the Russell 3000 Index was determined based on historical daily stock price movements for the three years preceding the grant date.

The expected volatility was determined based on daily historical movements in our stock price and the S&P 500 Index (Russell 3000 Index for grants prior to fiscal 2025) for the three years preceding the grant date.

The correlation between FICO and the S&P 500 Index (Russell 3000 Index for grants prior to fiscal 2025) was determined based on historical daily stock price movements for the three years preceding the grant date.

The risk-free rate was determined based on U.S.

81 unchanged sentences

These offerings are available to our customers as SaaS or as on-premises software.

Our chief operating decision maker (“CODM”), who is our Chief Executive Officer, evaluates segment financial performance based on segment revenues and segment operating income.

Segment operating expenses consist of direct and indirect costs principally related to personnel, facilities, IT infrastructure, consulting, travel and depreciation.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Our chief operating decision maker (“CODM”), who is our Chief Executive Officer, evaluates segment financial performance based on segment revenues, segment operating expenses in total and segment operating income.

Segment operating expenses consist of direct and indirect costs principally related to personnel, facilities, IT infrastructure, depreciation and amortization, consulting and travel.

Indirect costs are allocated to the segments generally based on relative segment revenues, fixed rates established by management based upon estimated expense contribution levels and other assumptions that management considers reasonable.

3 unchanged sentences

rather, depreciation and amortization amounts are allocated to the segments from their internal cost centers as described above.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

The following tables summarize segment information for fiscal 2025, 2024 and 2023:

Year Ended September 30, 2025

Scores Software Unallocated

Expenses Total

Scores Software Total

(In thousands)

6 unchanged sentences

Segment operating income $ 1,026,243 $ 247,694 $ 1,273,937

Unallocated corporate expenses ( 181,498 )

Unallocated share-based compensation expense ( 156,667 )

Unallocated amortization expense ( 917 )

Unallocated restructuring charges ( 10,922 )

Operating income 924,850

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Income before income taxes $ 802,595

Depreciation and amortization $ 451 $ 8,881 $ 66 $ 9,398

Year Ended September 30, 2024

Scores Software Unallocated

Expenses Total

Scores Software Total

(In thousands)

6 unchanged sentences

Segment operating income $ 813,354 $ 257,529 1,070,883

Unallocated corporate expenses ( 186,898 )

Unallocated share-based compensation expense ( 149,439 )

Unallocated amortization expense ( 917 )

Unallocated gain on product line asset sale 1,941

Operating income 733,629

2 unchanged sentences

Income before income taxes $ 642,025

Depreciation and amortization $ 485 $ 9,550 $ 71 $ 10,106

FAIR ISAAC CORPORATION

2 unchanged sentences

Year Ended September 30, 2023

Scores Software Unallocated

Expenses Total

Scores Software Total

(In thousands)

6 unchanged sentences

Segment operating income $ 681,071 $ 241,191 922,262

Unallocated corporate expenses ( 156,426 )

Unallocated share-based compensation expense ( 123,847 )

Unallocated amortization expense ( 1,100 )

Unallocated gain on product line asset sale 1,941

Operating income 642,830

Unallocated interest expense, net ( 95,546 )

Unallocated other expense, net ( 2,138 )

Unallocated other income, net 6,340

Income before income taxes $ 553,624

The following table presents depreciation and amortization on property and equipment for fiscal 2025, 2024 and 2023:

Year Ended September 30,

2025 2024 2023

(In thousands)

Depreciation and amortization:

Scores $ 512 $ 451 $ 485

Software 10,071 8,881 9,550

Total segment depreciation and amortization 10,583 9,332 10,035

Unallocated corporate 75 66 71

Total depreciation and amortization $ 10,658 $ 9,398 $ 10,106

Long-lived assets held outside of the U.S.

6 unchanged sentences

Furthermore, we recognize lease expense for these leases on a straight-line basis over the lease term.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease.

9 unchanged sentences

We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

The following table presents the lease balances within the accompanying consolidated balance sheets as of September 30, 2025 and 2024:

9 unchanged sentences

Total lease liabilities $ 36,009 $ 43,925

(*) Finance leases were recorded net of accumulated depreciation of $ 1.9 million at September 30, 2024.

(*) Finance leases were recorded net of accumulated depreciation of $ 4.8 million and $ 1.9 million at September 30, 2025 and 2024, respectively.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

The components of our operating and finance lease expenses were as follows:

18 unchanged sentences

Weighted-average discount rate 5.52 % 5.52 %

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Supplemental cash flow information related to our non-cancellable leases was as follows:

9 unchanged sentences

Finance leases — 11,740 —

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

Future lease payments under our non-cancellable leases as of September 30, 2025 were as follows:

10 unchanged sentences

Total reported lease liabilities $ 28,802 $ 7,207

The amounts above do not include contractual sublease income totaling $ 0.5 million, $ 0.4 million, and $ 0.2 million during fiscal 2025, 2026, and 2027, respectively.

The amounts above do not include contractual sublease income totaling $ 0.4 million and $ 0.2 million during fiscal 2026 and 2027, respectively.

In the ordinary course of business, we enter into contractual purchase obligations and other agreements that are legally binding and specify certain minimum payment terms.

5 unchanged sentences

We are also a party to a management agreement with 17 of our executives providing for certain payments and other benefits in the event of a qualified change in control of FICO, coupled with a termination of the officer during the following year.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Contingencies

4 unchanged sentences

For legal proceedings for which there is a reasonable possibility of loss (meaning those losses for which the likelihood is more than remote but less than probable), we have determined we do not have a material exposure, either individually or in the aggregate.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2025, 2024 and 2023

In the ordinary course of business, we are not subject to potential obligations under guarantees , except for standard indemnification and warranty provisions that are contained within many of our customer license and service agreements and certain supplier agreements, including underwriter agreements, as well as standard indemnification agreements that we have executed with certain of our officers and directors, and give rise only to the disclosure in the consolidated financial statements.

11 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data