FAIR ISAAC CORP 10-K

Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of Fair Isaac Corporation Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Fair Isaac Corporation and subsidiaries (the "Company") as of September 30, 2025 and 2024, the related consolidated statements of income and comprehensive income, stockholders' deficit, and cash flows, for each of the three years in the period ended September 30, 2025, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of operations and cash flows for each of the three years in the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. Basis for Opinions The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting . Our responsibility is to express an opinion on these financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 51 Table of Contents Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition – Contracts with Customers – Refer to Note 1 and Note 9 to the financial statements Critical Audit Matter Description Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. The Company’s revenue is primarily derived from on-premises software and software-as-a-service (SaaS) subscriptions, professional services, and scoring services. For contracts with customers that contain various combinations of products and services, the Company evaluates whether the products or services are distinct — distinct products or services will be accounted for as separate performance obligations, while non-distinct products or services are combined with others to form a single performance obligation. For on-premises software, which includes a term-based license and post-contract support or maintenance, the transaction price is either a fixed fee, or a usage-based fee — sometimes subject to a guaranteed minimum. Any usage-based fees not subject to a guaranteed minimum or earned in excess of the minimum amount are recognized when the subsequent usage occurs. For SaaS products, the Company estimates the total variable consideration at contract inception — subject to any constraints that may apply — and updates the estimates as new information becomes available and recognizes the amount ratably over the SaaS service period, unless the Company determines it is appropriate to allocate the variable amount to each distinct service period and recognize revenue as each distinct service period is performed. The Company’s professional services include software implementation, consulting, model development and training. The transaction price can be a fixed amount or a variable amount based upon the time and materials expended. Revenue on fixed-price services is recognized using an input method based on labor hours expended, which the Company believes provides a faithful depiction of the transfer of services. The Company’s scoring services include both business-to-business and business-to-consumer offerings. The Company’s business-to-business scoring services typically include a license that grants consumer reporting agencies the right to use the scoring solutions in exchange for a usage-based royalty. Revenue is generally recognized when the usage occurs. Business-to-consumer offerings provide consumers with access to their FICO ® Scores and credit reports, as well as other value-add services. These are provided as either a one-time or ongoing subscription service renewed monthly or annually, all with a fixed consideration. Given the complexity of certain of the Company’s contracts, together with the judgment involved in identifying performance obligations and estimating variable consideration, auditing the related revenue required both extensive audit effort due to the volume and complexity of the contracts and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures . How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to revenue recognition over the Company’s identification of performance obligations and estimation of variable consideration, included the following, among others: • We tested the effectiveness of controls over contract revenue, including management’s controls over the identification of performance obligations and estimation of variable consideration. • We selected a sample of contracts and performed the following procedures: ◦ Obtained and read the contract, including master agreements, renewal agreements, and other source documents that are part of the contract. ◦ Confirmed the terms of the contract directly with the customer, including whether there are terms not formally included in the contract that may impact the identification of performance obligations and revenue recognition and performed alternative procedures in the event of nonreplies. 52 Table of Contents ◦ Tested management’s identification of the performance obligations within the customer contract. ◦ Tested management’s estimation of variable consideration in the transaction price by evaluating the reasonableness of the inputs used in management’s estimates. /s/ Deloitte & Touche LLP San Diego, CA November 7, 2025 We have served as the Company’s auditor since 2004. 53 Table of Contents FAIR ISAAC CORPORATION CONSOLIDATED BALANCE SHEETS September 30, 2025 2024 (In thousands, except par value data) Assets Current assets: Cash and cash equivalents $ 134,136 $ 150,667 Accounts receivable, net 529,148 426,642 Prepaid expenses and other current assets 41,881 40,104 Total current assets 705,165 617,413 Marketable securities 54,625 45,289 Property and equipment, net 67,713 38,465 Operating lease right-of-use assets 26,213 29,580 Goodwill 783,340 782,752 Deferred income taxes 118,553 86,513 Other assets 112,524 117,872 Total assets $ 1,868,133 $ 1,717,884 Liabilities and Stockholders’ Deficit Current liabilities: Accounts payable $ 32,315 $ 22,473 Accrued compensation and employee benefits 115,369 106,103 Other accrued liabilities 114,618 79,812 Deferred revenue 187,372 156,897 Current maturities on debt 399,541 15,000 Total current liabilities 849,215 380,285 Long-term debt 2,656,150 2,194,021 Operating lease liabilities 19,187 21,963 Other liabilities 89,365 84,294 Total liabilities 3,613,917 2,680,563 Commitments and contingencies Stockholders’ deficit: Preferred stock ($ 0.01 par value; 1,000 shares authorized; none issued and outstanding) — — Common stock ($ 0.01 par value; 200,000 shares authorized, 88,857 shares issued and 23,764 and 24,392 shares outstanding at September 30, 2025 and September 30, 2024, respectively) 238 244 Additional paid-in-capital 1,331,120 1,366,572 Treasury stock, at cost ( 65,093 and 64,465 shares at September 30, 2025 and September 30, 2024, respectively) ( 7,537,908 ) ( 6,138,736 ) Retained earnings 4,552,816 3,900,870 Accumulated other comprehensive loss ( 92,050 ) ( 91,629 ) Total stockholders’ deficit ( 1,745,784 ) ( 962,679 ) Total liabilities and stockholders’ deficit $ 1,868,133 $ 1,717,884 See accompanying notes. 54 Table of Contents FAIR ISAAC CORPORATION CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME Year Ended September 30, 2025 2024 2023 (In thousands, except per share data) Revenues: On-premises and SaaS software $ 740,145 $ 711,340 $ 640,182 Professional services 82,149 86,536 99,547 Scores 1,168,575 919,650 773,828 Total revenues 1,990,869 1,717,526 1,513,557 Operating expenses: Cost of revenues 353,722 348,206 311,053 Research and development 188,347 171,940 159,950 Selling, general and administrative 513,028 462,834 400,565 Amortization of intangible assets — 917 1,100 Restructuring charges 10,922 — — Gain on product line asset sale — — ( 1,941 ) Total operating expenses 1,066,019 983,897 870,727 Operating income 924,850 733,629 642,830 Interest expense, net ( 133,647 ) ( 105,638 ) ( 95,546 ) Other income, net 11,392 14,034 6,340 Income before income taxes 802,595 642,025 553,624 Provision for income taxes 150,649 129,214 124,249 Net income 651,946 512,811 429,375 Other comprehensive income (loss): Foreign currency translation adjustments ( 421 ) 10,516 22,557 Comprehensive income $ 651,525 $ 523,327 $ 451,932 Earnings per share: Basic $ 26.90 $ 20.78 $ 17.18 Diluted $ 26.54 $ 20.45 $ 16.93 Shares used in computing basic earnings per share: Basic 24,239 24,676 24,986 Diluted 24,561 25,079 25,367 See accompanying notes. 55 Table of Contents FAIR ISAAC CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT Years Ended September 30, 2025, 2024 and 2023 Common Stock Additional Paid-in-Capital Treasury Stock Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders’ Deficit (In thousands) Shares Par Value Balance at September 30, 2022 25,154 $ 252 $ 1,299,588 $ ( 4,935,769 ) $ 2,958,684 $ ( 124,702 ) $ ( 801,947 ) Share-based compensation — — 123,847 — — — 123,847 Issuance of treasury stock under employee stock plans 231 2 ( 72,722 ) 18,245 — — ( 54,475 ) Repurchases of common stock ( 615 ) ( 6 ) — ( 407,341 ) — — ( 407,347 ) Net income — — — — 429,375 — 429,375 Foreign currency translation adjustments — — — — — 22,557 22,557 Balance at September 30, 2023 24,770 248 1,350,713 ( 5,324,865 ) 3,388,059 ( 102,145 ) ( 687,990 ) Share-based compensation — — 149,439 — — — 149,439 Issuance of treasury stock under employee stock plans 228 2 ( 133,580 ) 19,395 — — ( 114,183 ) Repurchases of common stock ( 606 ) ( 6 ) — ( 833,266 ) — — ( 833,272 ) Net income — — — — 512,811 — 512,811 Foreign currency translation adjustments — — — — — 10,516 10,516 Balance at September 30, 2024 24,392 244 1,366,572 ( 6,138,736 ) 3,900,870 ( 91,629 ) ( 962,679 ) Share-based compensation — — 156,667 — — — 156,667 Issuance of treasury stock under employee stock plans 205 2 ( 192,119 ) 20,347 — — ( 171,770 ) Repurchases of common stock ( 833 ) ( 8 ) — ( 1,419,519 ) — — ( 1,419,527 ) Net income — — — — 651,946 — 651,946 Foreign currency translation adjustments — — — — — ( 421 ) ( 421 ) Balance at September 30, 2025 23,764 $ 238 $ 1,331,120 $ ( 7,537,908 ) $ 4,552,816 $ ( 92,050 ) $ ( 1,745,784 ) See accompanying notes. 56 Table of Contents FAIR ISAAC CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended September 30, 2025 2024 2023 (In thousands) Cash flows from operating activities: Net income $ 651,946 $ 512,811 $ 429,375 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 14,952 13,827 14,638 Share-based compensation 156,667 149,439 123,847 Deferred income taxes ( 32,486 ) ( 27,330 ) ( 47,378 ) Net gain on marketable securities ( 5,024 ) ( 9,834 ) ( 2,908 ) Non-cash operating lease costs 9,604 12,423 14,708 Provision of doubtful accounts 1,485 1,675 1,475 Gain on product line asset sale — — ( 1,941 ) Net loss on sales and abandonment of property and equipment 210 438 547 Changes in operating assets and liabilities: Accounts receivable ( 100,377 ) ( 34,144 ) ( 70,117 ) Prepaid expenses and other assets 610 ( 14,034 ) ( 11,904 ) Accounts payable 9,849 3,316 2,236 Accrued compensation and employee benefits 10,065 3,195 4,631 Other liabilities 31,566 7,216 ( 7,057 ) Deferred revenue 29,740 13,966 18,763 Net cash provided by operating activities 778,807 632,964 468,915 Cash flows from investing activities: Purchases of property and equipment ( 8,922 ) ( 8,884 ) ( 4,237 ) Capitalized internal-use software costs ( 30,485 ) ( 16,667 ) — Proceeds from sales of marketable securities 2,184 15,930 5,032 Purchases of marketable securities ( 6,496 ) ( 18,372 ) ( 10,623 ) Cash transferred, net of proceeds, from product line asset sale — — ( 6,126 ) Net cash used in investing activities ( 43,719 ) ( 27,993 ) ( 15,954 ) Cash flows from financing activities: Proceeds from revolving line of credit and term loans 725,000 947,000 407,000 Payments on revolving line of credit and term loans ( 1,368,750 ) ( 602,000 ) ( 402,000 ) Proceeds from issuance of senior notes 1,500,000 — — Payments on debt issuance costs ( 17,163 ) ( 706 ) — Payments on finance leases ( 3,144 ) ( 1,333 ) — Proceeds from issuance of treasury stock under employee stock plans 32,823 25,006 22,198 Taxes paid related to net share settlement of equity awards ( 204,593 ) ( 139,188 ) ( 76,673 ) Repurchases of common stock ( 1,414,502 ) ( 821,702 ) ( 405,526 ) Net cash used in financing activities ( 750,329 ) ( 592,923 ) ( 455,001 ) Effect of exchange rate changes on cash ( 1,290 ) 1,841 5,616 Increase (decrease) in cash and cash equivalents ( 16,531 ) 13,889 3,576 Cash and cash equivalents, beginning of year 150,667 136,778 133,202 Cash and cash equivalents, end of year $ 134,136 $ 150,667 $ 136,778 Supplemental disclosures of cash flow information: Cash paid for income taxes, net of refunds of $ 8,649 , $ 859 and $ 640 during the years ended September 30, 2025, 2024 and 2023, respectively $ 162,089 $ 133,716 $ 152,775 Cash paid for interest $ 103,564 $ 106,388 $ 96,877 Supplemental disclosures of non-cash investing and financing activities: Unsettled repurchases of common stock $ 18,416 $ 13,391 $ 1,821 Purchase of property and equipment included in accounts payable $ 47 $ 62 $ 106 Finance lease obligation incurred $ — $ 11,740 $ — See accompanying notes. 57 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 1. Nature of Business and Summary of Significant Accounting Policies Fair Isaac Corporation 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 global analytics software leader. We were founded in 1956 on the premise that data, used intelligently, can improve business decisions. Today, FICO’s software and the widely used FICO ® Score operationalize analytics, enabling thousands of businesses in more than 80 countries to uncover new opportunities, make timely decisions that matter, and execute them at scale. 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 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 The consolidated financial statements include the accounts of FICO and its subsidiaries. All intercompany accounts and transactions have been eliminated. Use of Estimates We make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures made in the accompanying notes. For example, we use estimates in determining the appropriate levels of various accruals; variable considerations included in the transaction price and standalone selling price of each performance obligation for our customer contracts; labor hours in connection with fixed-fee service contracts; the amount of our tax provision; and the realizability of deferred tax 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. Actual results may differ from our estimates. Cash and Cash Equivalents 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 Value of Financial Instruments The fair value of certain of our financial instruments, including cash and cash equivalents, receivables, other current assets, accounts payable, accrued compensation and employee benefits, other accrued liabilities and amounts outstanding under our revolving line of credit and term loans, approximate their carrying amounts because of the short-term maturity of these instruments. The fair values of our cash and cash equivalents and marketable securities investments are disclosed in Note 4. The fair value of our derivative instruments is disclosed in Note 5. The fair value of our senior notes is disclosed in Note 8. Investments 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, 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). Held-to-maturity securities are carried at amortized cost. 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, 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. We did not classify any securities as held-to-maturity or available-for-sale during each of the three years ended September 30, 2025, 2024 and 2023. Investments with remaining maturities over one year are classified as long-term investments. 58 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 Concentration of Risk Financial instruments that potentially expose us to concentrations of risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable, which are generally not collateralized. Our policy is to place our cash, cash equivalents, and marketable securities with high quality financial institutions, commercial corporations and government agencies in order to limit the amount of credit exposure. We have established guidelines relative to diversification and maturities for maintaining safety and liquidity. We generally do not require collateral from our customers, but our credit extension and collection policies include analyzing the financial condition of potential customers, establishing credit limits, monitoring payments, and aggressively pursuing delinquent accounts. We maintain allowances for potential credit losses. A significant portion of our revenues are derived from the sales of products and services to the financial services industries. Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and amortization. Major renewals and improvements are capitalized, while repair and maintenance costs are expensed as incurred. Depreciation and amortization charges are calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Data processing equipment and purchased software 3 years Internal-use software 4 years Office furniture and equipment 3 years to 7 years Leasehold improvements Shorter of estimated useful life or lease term The cost and accumulated depreciation and amortization for property and equipment sold, retired or otherwise disposed of are removed from the applicable accounts, and resulting gains or losses are recorded in our consolidated statements of income and comprehensive income. 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. Internal-Use Software Costs incurred to develop internal-use software during the application development stage are capitalized and reported at cost. Application development stage costs generally include costs associated with internal-use software configuration, coding, installation and testing. Costs of significant upgrades and enhancements that result in additional functionality are also capitalized whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Amortization of capitalized costs are recorded within cost of revenues in our consolidated statements of income and comprehensive income. Capitalized Software and Research and Development Costs Software development costs relating to products to be sold in the normal course of business are expensed as incurred as research and development costs until technological feasibility is established. Technological feasibility for our products occurs approximately concurrently with the general release of our products; accordingly, we have not capitalized any development or production costs. Costs we incur to maintain and support our products are expensed in the period they are incurred and included in cost of revenues in our consolidated statements of income and comprehensive income. Goodwill and Other Long-Lived Assets Goodwill represents the excess of cost over the fair value of identifiable assets acquired and liabilities assumed in business combinations. 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. 59 Table of Contents 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. When evaluating goodwill for impairment, we may first perform an assessment qualitatively whether it is more likely than not that a reporting unit's carrying amount exceeds its fair value, referred to as a “step zero” approach. If, based on the review of the qualitative factors, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying value, we would bypass the two-step impairment test. Events and circumstances we consider in performing the “step zero” qualitative assessment include macro-economic conditions, market and industry conditions, internal cost factors, share price fluctuations, and the operational stability and overall financial performance of the reporting units. If we conclude that it is more likely than not that a reporting unit's fair value is less than its carrying amount, we would perform the first step (“step one”) of the two-step impairment test and calculate the estimated fair value of the reporting unit by using discounted cash flow valuation models and by comparing our reporting units to guideline publicly-traded companies. These methods require estimates of our future revenues, profits, capital expenditures, working capital, and other relevant factors, as well as selecting appropriate guideline publicly-traded companies for each reporting unit. We estimate these amounts by evaluating historical trends, current budgets, operating plans, industry data, and other relevant factors. Alternatively, we may bypass the qualitative assessment described above for any reporting unit in any period and proceed directly to performing step one of the goodwill impairment test. For fiscal 2025, 2024 and 2023, we performed a step zero qualitative analysis for our annual assessment of goodwill impairment. After evaluating and weighing all relevant events and circumstances, we concluded that it is not more likely than not that the fair value of either of our reporting units was less than their carrying amounts. Consequently, we did not perform a step one quantitative analysis and determined goodwill was not impaired for either of our reporting units for fiscal 2025, 2024 and 2023. Our other long-lived assets are assessed for potential impairment when there is evidence that events and circumstances related to our financial performance and economic environment indicate the carrying amount of the assets may not be recoverable. When impairment indicators are identified, we test for impairment using undiscounted cash flows. If such tests indicate impairment, then we measure and record the impairment as the difference between the carrying value of the asset and the fair value of the asset. We did not recognize any impairment charges on other long-lived assets in fiscal 2025, 2024 and 2023. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services. See Note 9 for further discussion on revenues. Income Taxes We estimate our income taxes based on the various jurisdictions where we conduct business, which involves significant judgment in determining our income tax provision. We estimate our current tax liability using currently enacted tax rates and laws and assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities recorded on our consolidated balance sheets using the currently enacted tax rates and laws that will apply to taxable income for the years in which those tax assets are expected to be realized or settled. We then assess the likelihood our deferred tax assets will be realized and to the extent we believe realization is not more likely than not, we establish a valuation allowance. When we establish a valuation allowance or increase this allowance in an accounting period, we record a corresponding income tax expense in our consolidated statements of income and comprehensive income. In assessing the need for the valuation allowance, we consider future taxable income in the jurisdictions we operate; our ability to carry back tax attributes to prior years; an analysis of our deferred tax assets and the periods over which they will be realizable; and ongoing prudent and feasible tax planning strategies. 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. 60 Table of Contents 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. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the technical merits of the tax position indicate it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount more than 50% likely of being realized upon settlement. Significant judgment is required to evaluate uncertain tax positions and they are evaluated on a quarterly basis. Our evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results. Earnings per Share Basic earnings per share are computed on the basis of the weighted-average number of common shares outstanding during the period under measurement. Diluted earnings per share are based on the weighted-average number of common shares outstanding and potential common shares. Potential common shares result from the assumed exercise of outstanding stock options or other potentially dilutive equity instruments, when they are dilutive under the treasury stock method. Comprehensive Income Comprehensive income is the change in our equity (net assets) during each period from transactions and other events and circumstances from non-owner sources. It includes net income and foreign currency translation adjustments. Foreign Currency and Derivative Financial Instruments We have determined that the functional currency of each foreign operation is the local currency. Assets and liabilities denominated in their local foreign currencies are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates of exchange prevailing during the period. Foreign currency translation adjustments are accumulated as a separate component of consolidated stockholders’ deficit. We utilize derivative instruments to manage market risks associated with fluctuations in certain foreign currency exchange rates as they relate to specific balances of accounts receivable and cash denominated in foreign currencies. We principally utilize foreign currency forward contracts to protect against market risks arising in the normal course of business. Our policies prohibit the use of derivative instruments for the sole purpose of trading for profit on price fluctuations or to enter into contracts that intentionally increase our underlying exposure. All of our foreign currency forward contracts have maturity periods of less than three months. 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, 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. Share-Based Compensation We measure share-based compensation cost at the grant date based on the fair value of the award and recognize it as expense, net of estimated forfeitures, over the vesting or service period, as applicable, of the stock award (generally three to four years ). See Note 13 for further discussion of our share-based employee benefit plans. Advertising and Promotion Costs Advertising and promotion costs are expensed as incurred and are included in selling, general and administrative expenses in the accompanying consolidated statements of income and comprehensive income. Advertising and promotion costs totaled $ 29.7 million, $ 12.3 million and $ 9.8 million in fiscal 2025, 2024 and 2023, respectively. 61 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 New Accounting Pronouncements Recent Accounting Pronouncements Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ” (“ASU 2023-07”). ASU 2023-07 expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. 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. 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures ” (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as disaggregated information on income tax paid. The standard is effective for fiscal years beginning after December 15, 2024, which means that it will be effective for our fiscal years 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. 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. 2. Product Line Asset Sale During fiscal 2023, we sold certain assets related to our Siron compliance business within our Software segment and recorded a gain of $ 1.9 million. 62 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 3. Cash, Cash Equivalents and Marketable Securities The following is a summary of cash, cash equivalents and marketable securities at September 30, 2025 and 2024: September 30, 2025 September 30, 2024 Amortized Cost Fair Value Amortized Cost Fair Value (In thousands) Cash and Cash Equivalents: Cash $ 134,130 $ 134,130 $ 142,768 $ 142,768 Money market funds 6 6 731 731 Bank time deposits — — 7,168 7,168 Total $ 134,136 $ 134,136 $ 150,667 $ 150,667 Marketable Securities: Marketable securities $ 40,603 $ 54,625 $ 36,044 $ 45,289 The assets included in marketable securities represent long-term marketable equity securities held under a supplemental retirement and savings plan for certain officers and senior management employees, which are distributed upon termination or retirement of the employees. These investments are treated as trading securities and recorded at fair value. 4. Fair Value Measurements Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. • Level 1 — uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. Our Level 1 assets were comprised of money market funds and certain marketable securities and our Level 1 liabilities included senior notes as of September 30, 2025 and 2024. • Level 2 — uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. We did not have any assets or liabilities that are valued using inputs identified under a Level 2 hierarchy as of September 30, 2025 and 2024. • Level 3 — uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. 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 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: September 30, 2025 Active Markets for Identical Instruments (Level 1) Fair Value as of September 30, 2025 (In thousands) Assets: Cash equivalents (1) $ 6 $ 6 Marketable securities (2) 54,625 54,625 Total $ 54,631 $ 54,631 63 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 September 30, 2024 Active Markets for Identical Instruments (Level 1) Fair Value as of September 30, 2024 (In thousands) Assets: Cash equivalents (1) $ 7,899 $ 7,899 Marketable securities (2) 45,289 45,289 Total $ 53,188 $ 53,188 (1) Included in cash and cash equivalents on our consolidated balance sheets at September 30, 2025 and 2024. Not included in these tables are cash deposits of $ 134.1 million and $ 142.8 million at September 30, 2025 and 2024, respectively. (2) Represents securities held under a supplemental retirement and savings plan for certain officers and senior management employees, which are distributed upon termination or retirement of the employees. Included in marketable securities on our consolidated balance sheets at September 30, 2025 and 2024. See Note 8 for the fair value of our senior notes. There were no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy during the years ended September 30, 2025, 2024 or 2023. 5. Derivative Financial Instruments We use derivative instruments to manage risks caused by fluctuations in foreign exchange rates. The primary objective of our derivative instruments is to protect the value of foreign-currency-denominated receivable and cash balances from the effects of volatility in foreign exchange rates that might occur prior to conversion to their functional currencies. We principally utilize foreign currency forward contracts, which enable us to buy and sell foreign currencies in the future at fixed exchange rates and economically offset changes in foreign exchange rates. 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, 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. The forward contracts are short-term in nature and typically have average maturities at inception of less than three months . The following tables summarize our outstanding foreign currency forward contracts, by currency, at September 30, 2025 and 2024: September 30, 2025 Contract Amount Fair Value Foreign Currency USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 7,700 $ 9,034 — Buy foreign currency: British pound (GBP) GBP 10,019 $ 13,500 — Singapore dollar (SGD) SGD 8,087 $ 6,300 — 64 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 September 30, 2024 Contract Amount Fair Value Foreign Currency USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 13,000 $ 14,531 — Buy foreign currency: British pound (GBP) GBP 12,237 $ 16,400 — Singapore dollar (SGD) SGD 7,404 $ 5,800 — The foreign currency forward contracts were entered into on September 30, 2025 and 2024; 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, net, and consisted of the following: Year Ended September 30, 2025 2024 2023 (In thousands) Gain (loss) on foreign currency forward contracts $ ( 425 ) $ 1,580 $ 1,625 6. Goodwill The following table summarizes changes to goodwill during fiscal 2025 and 2024, both in total and as allocated to our segments. As of September 30, 2025, there was no accumulated goodwill impairment loss. Scores Software Total (In thousands) Balance at September 30, 2023 $ 146,648 $ 626,679 $ 773,327 Foreign currency translation adjustment — 9,425 9,425 Balance at September 30, 2024 146,648 636,104 782,752 Foreign currency translation adjustment — 588 588 Balance at September 30, 2025 $ 146,648 $ 636,692 $ 783,340 7. Composition of Certain Financial Statement Captions The following table presents the composition of property and equipment, net at September 30, 2025 and 2024: September 30, 2025 2024 (In thousands) Property and equipment, net: Data processing equipment and purchased software $ 42,121 $ 74,084 Internal-use software 47,151 16,510 Office furniture and equipment 8,113 9,473 Leasehold improvements 15,900 15,851 Less: accumulated depreciation and amortization ( 45,572 ) ( 77,453 ) Total $ 67,713 $ 38,465 65 Table of Contents 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, 2025 2024 (In thousands) Other accrued liabilities: Interest payable $ 53,500 $ 21,663 Other 61,118 58,149 Total $ 114,618 $ 79,812 8. Debt The following table represents our debt at carrying value at September 30, 2025 and 2024: September 30, 2025 September 30, 2024 (In thousands) Current maturities on debt: The $ 300 Million Term Loan $ — $ 15,000 The 2018 Senior Notes 400,000 — Less: debt issuance costs ( 459 ) — Current maturities on debt 399,541 15,000 Long-term debt: Revolving line of credit 275,000 210,000 The $ 300 Million Term Loan — 243,750 The $ 450 Million Term Loan — 450,000 The 2018 Senior Notes — 400,000 The 2019 Senior Notes and the 2021 Senior Notes 900,000 900,000 The 2025 Senior Notes 1,500,000 — Less: debt issuance costs ( 18,850 ) ( 9,729 ) Long-term debt 2,656,150 2,194,021 Total debt $ 3,055,691 $ 2,209,021 66 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 Revolving Line of Credit and Term Loans 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. The applicable margin for base rate borrowings ranges from 0 % to 0.75 % per annum and for SOFR borrowings ranges from 1 % to 1.75 % per annum. In addition, we must pay certain credit facility fees. 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. Senior Notes On May 8, 2018, we issued $ 400 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”). The 2018 Senior Notes require interest payments semi-annually at a rate of 5.25 % per annum and will mature on May 15, 2026. On December 6, 2019, we issued $ 350 million of senior notes in a private offering to qualified institutional investors (the “2019 Senior Notes”). 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”). 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. 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. The following table presents the face values and fair values for the Senior Notes at September 30, 2025 and 2024: September 30, 2025 September 30, 2024 Face Value Fair Value Face Value Fair Value (In thousands) The 2018 Senior Notes $ 400,000 $ 399,500 $ 400,000 $ 399,500 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 67 Table of Contents 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: Year Ending September 30, (In thousands) 2026 $ 400,000 2027 — 2028 900,000 2029 — 2030 — Thereafter 1,500,000 Total $ 2,800,000 9. Revenue from Contracts with Customers Contracts with Customers Our revenue is primarily derived from on-premises software and SaaS subscriptions, professional services and scoring services. For contracts with customers that contain various combinations of products and services, we evaluate whether the products or services are distinct — distinct products or services will be accounted for as separate performance obligations, while non-distinct products or services are combined with others to form a single performance obligation. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation on a relative standalone selling price (“SSP”) basis. Revenue is recognized when control of the promised goods or services is transferred to our customers. Our on-premises software is primarily sold on a subscription basis, which includes a term-based license and post-contract support or maintenance, both of which generally represent distinct performance obligations and are accounted for separately. The transaction price is either a fixed fee, or a usage-based fee — sometimes subject to a guaranteed minimum. When the amount is fixed, including the guaranteed minimum in a usage-based fee, license revenue is recognized at the point in time when the software is made available to the customer. Maintenance revenue is recognized ratably over the contract period as customers simultaneously consume and receive benefits. Any usage-based fees not subject to a guaranteed minimum or earned in excess of the minimum amount are recognized when the subsequent usage occurs. We occasionally sell software arrangements consisting of on-premises perpetual licenses and maintenance. 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. 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. The SaaS transaction contracts typically include a guaranteed minimum fee per period that allows up to a certain level of usage and a consumption-based variable fee in excess of the minimum threshold; or a consumption-based variable fee not subject to a minimum threshold. The nature of our SaaS arrangements is to provide continuous access to our hosted solutions in the cloud, i.e., a stand-ready obligation that comprises a series of distinct service periods (e.g., a series of distinct daily, monthly or annual periods of service). We estimate the total variable consideration at contract inception — subject to any constraints that may apply — and update the estimates as new information becomes available and recognize the amount ratably over the SaaS service period, unless we determine it is appropriate to allocate the variable amount to each distinct service period and recognize revenue as each distinct service period is performed. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur. Variable consideration is estimated based on either the expected value or the most likely amount method depending on which method we expect to better predict the amount of consideration to which we will be entitled. Our estimates of variable consideration are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us at contract inception and require judgment. Our professional services include software implementation, consulting, model development and training. Professional services are sold either standalone, or together with other products or services and generally represent distinct performance obligations. The transaction price can be a fixed amount or a variable amount based upon the time and materials expended. Revenue on fixed-price services is recognized using an input method based on labor hours expended, which we believe provides a faithful depiction of the transfer of services. 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. 68 Table of Contents 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. Our business-to-business scoring services typically include a license that grants consumer reporting agencies the right to use our scoring solutions in exchange for a usage-based royalty. Revenue is generally recognized when the usage occurs. Business-to-consumer offerings provide consumers with access to their FICO ® Scores and credit reports, as well as other value-add services. These are provided as either a one-time or ongoing subscription service renewed monthly or annually, all with a fixed consideration. The nature of the subscription service is a stand-ready obligation to generate credit reports, provide credit monitoring, and other services for our customers, which comprises a series of distinct service periods (e.g., a series of distinct daily, monthly or annual periods of service). Revenue from one-time or monthly subscription services is recognized during the period when service is performed. Revenue from annual subscription services is recognized ratably over the subscription period. Disaggregation of Revenue During fiscal 2023, we sold certain assets related to our Siron compliance business. The comparability of the data below is impacted as a result of this sale. The following tables provide information about disaggregated revenue by primary geographical market: Year Ended September 30, 2025 Scores Software Total Percentage (Dollars in thousands) Americas $ 1,154,470 $ 577,915 $ 1,732,385 87 % Europe, Middle East and Africa 6,984 152,819 159,803 8 % Asia Pacific 7,121 91,560 98,681 5 % Total $ 1,168,575 $ 822,294 $ 1,990,869 100 % Year Ended September 30, 2024 Scores Software Total Percentage (Dollars in thousands) Americas $ 905,266 $ 544,622 $ 1,449,888 84 % Europe, Middle East and Africa 5,908 163,618 169,526 10 % Asia Pacific 8,476 89,636 98,112 6 % Total $ 919,650 $ 797,876 $ 1,717,526 100 % Year Ended September 30, 2023 Scores Software Total Percentage (Dollars in thousands) Americas $ 763,874 $ 523,076 $ 1,286,950 85 % Europe, Middle East and Africa 5,802 135,562 141,364 9 % Asia Pacific 4,152 81,091 85,243 6 % Total $ 773,828 $ 739,729 $ 1,513,557 100 % The following table provides information about disaggregated revenue for on-premises and SaaS software within our Software segment by deployment method: Year Ended September 30, Percentage of revenues 2025 2024 2023 2025 2024 2023 (Dollars in thousands) On-premises software $ 320,425 $ 313,632 $ 292,763 43 % 44 % 46 % SaaS software 419,720 397,708 347,419 57 % 56 % 54 % Total $ 740,145 $ 711,340 $ 640,182 100 % 100 % 100 % 69 Table of Contents 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: Year Ended September 30, Percentage of revenues 2025 2024 2023 2025 2024 2023 (Dollars in thousands) Platform software $ 237,056 $ 200,004 $ 154,750 32 % 28 % 24 % Non-platform software 503,089 511,336 485,432 68 % 72 % 76 % Total $ 740,145 $ 711,340 $ 640,182 100 % 100 % 100 % The following table provides information about disaggregated revenue for on-premises and SaaS software within our Software segment by timing of revenue recognition: Year Ended September 30, Percentage of revenues 2025 2024 2023 2025 2024 2023 (Dollars in thousands) Software recognized at a point in time (1) $ 90,238 $ 76,284 $ 72,843 12 % 11 % 11 % Software recognized over contract term (2) 649,907 635,056 567,339 88 % 89 % 89 % Total $ 740,145 $ 711,340 $ 640,182 100 % 100 % 100 % (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. (2) Includes maintenance portion and usage-based fees of our on-premises subscription software, maintenance revenue on perpetual licenses, as well as SaaS revenue. The following table provides information about disaggregated revenue for our Scores segment by distribution method: Year Ended September 30, Percentage of revenues 2025 2024 2023 2025 2024 2023 (Dollars in thousands) Business-to-business Scores $ 948,595 $ 711,843 $ 560,995 81 % 77 % 72 % Business-to-consumer Scores 219,980 207,807 212,833 19 % 23 % 28 % Total $ 1,168,575 $ 919,650 $ 773,828 100 % 100 % 100 % 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 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 We record a receivable when we satisfy a performance obligation prior to invoicing if only the passage of time is required before payment is due or if we have an unconditional right to consideration before we satisfy a performance obligation. We record a contract asset when we satisfy a performance obligation prior to invoicing but our right to consideration is conditional. We record deferred revenue when the payment is made or due before we satisfy a performance obligation. 70 Table of Contents 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: September 30, 2025 2024 (In thousands) Billed $ 327,721 $ 264,942 Unbilled 246,600 210,795 574,321 475,737 Less: allowance for doubtful accounts ( 7,964 ) ( 6,454 ) Net receivables 566,357 469,283 Less: long-term receivables ( * ) ( 37,209 ) ( 42,641 ) Short-term receivables ( * ) $ 529,148 $ 426,642 (*) Short-term receivables and long-term receivables were recorded in accounts receivable, net and other assets, respectively, within the accompanying consolidated balance sheets. Activity in the allowance for doubtful accounts was as follows: Year Ended September 30, 2025 2024 (In thousands) Allowance for doubtful accounts, beginning balance $ 6,454 $ 4,978 Add: expense 1,485 1,675 Less: write-offs (net of recoveries) 25 ( 199 ) Allowance for doubtful accounts, ending balance $ 7,964 $ 6,454 Deferred revenue primarily relates to our maintenance and SaaS contracts billed annually in advance and generally recognized ratably over the term of the service period. Significant changes in the deferred revenues balances are as follows: Year Ended September 30, 2025 2024 (In thousands) Deferred revenues, beginning balance $ 160,209 $ 143,235 Revenue recognized that was included in the deferred revenues balance at the beginning of the period ( 151,859 ) ( 133,554 ) Increases due to billings, excluding amounts recognized as revenue during the period 180,888 150,528 Deferred revenues, ending balance ( * ) $ 189,238 $ 160,209 (*) Deferred revenues at September 30, 2025 included current portion of $ 187.4 million and long-term portion of $ 1.8 million that were recorded in deferred revenue and other liabilities, respectively, within the consolidated balance sheets. Deferred revenues at September 30, 2024 included current portion of $ 156.9 million and long-term portion of $ 3.3 million that were recorded in deferred revenue and other liabilities, respectively, within the consolidated balance sheets. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to provide customers with financing or to receive financing from our customers. 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. 71 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 Performance Obligations Revenue allocated to remaining performance obligations represents contracted revenue that will be recognized in future periods, which is comprised of deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. This does not include: • Usage-based revenue that will be recognized in future periods from on-premises software subscriptions; • Consumption-based variable fees from SaaS software that will be recognized in the distinct service period during which it is earned; and • Revenue from variable considerations that will be recognized in accordance with the “right-to-invoice” practical expedient, such as fees from our professional services billed based on a time and materials basis. Revenue allocated to remaining performance obligations was $ 655.7 million as of September 30, 2025, approximately 50 % of which we expect to recognize over the next 15 months and the remainder thereafter. Revenue allocated to remaining performance obligations was $ 507.3 million as of September 30, 2024. Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct and should be accounted for separately may require significant judgment. Specifically, when implementation service is included in the original software or SaaS offerings, judgment is required to determine if the implementation service significantly modifies or customizes the software or SaaS service in such a way that the risks of providing it and the customization service are inseparable. We determine the SSPs using data from our historical standalone sales, or, in instances where such information is not available (such as when we do not sell the product or service separately), we consider factors such as the stated contract prices, our overall pricing practices and objectives, go-to-market strategy, size and type of the transactions, and effects of the geographic area on pricing, among others. When the selling price of a product or service is highly variable, we may use the residual approach to determine the SSP of that product or service. 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. 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. In order to estimate the total hours of the project, we make assumptions about labor utilization, efficiency of processes, the customer’s specification and IT environment, among others. For certain complex projects, due to the risks and uncertainties inherent with the estimation process and factors relating to the assumptions, actual progress may differ due to the change in estimated total hours. Adjustments to estimates are made in the period in which the facts requiring such revisions become known and, accordingly, recognized revenues are subject to revisions as the contract progresses to completion. Capitalized Commission Costs We capitalize incremental commission fees paid as a result of obtaining customer contracts. Capitalized commission costs, which are recorded in other assets within the accompanying consolidated balance sheets, were $ 63.2 million and $ 60.5 million at September 30, 2025 and 2024, respectively. Capitalized commission costs are amortized on a straight-line basis over ten years — determined using a portfolio approach — based on the transfer of goods or services to which the assets relate, taking into consideration both the initial and future contracts as we do not typically pay a commission on a contract renewal. The amortization costs are included in selling, general, and administrative expenses of our consolidated statements of income and comprehensive income. The amount of amortization was $ 9.9 million, $ 9.2 million, and $ 8.2 million during the years ended September 30, 2025, 2024 and 2023, respectively. There was no impairment loss in relation to the costs capitalized. We apply a practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less. These costs are recorded within selling, general, and administrative expenses. 72 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 10. Employee Benefit Plans Defined Contribution Plans We sponsor the Fair Isaac Corporation 401(k) plan for eligible employees in the U.S. Under this plan, eligible employees may contribute up to 25 % of compensation, not to exceed statutory limits. We also provide a company matching contribution. Investment in FICO common stock is not an option under this plan. Our contributions into all 401(k) plans, including former-acquired-company-sponsored plans that have since merged into the Fair Isaac Corporation 401(k) plan or have been frozen, totaled $ 10.2 million, $ 9.5 million and $ 8.9 million during fiscal 2025, 2024 and 2023, respectively. Employee Incentive Plans We maintain various employee incentive plans for the benefit of eligible employees, including officers. The awards generally are based upon the achievement of certain financial and performance objectives subject to the discretion of management. For executive officers, such discretion is exercised by the Leadership Development and Compensation Committee of our Board of Directors. 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. 11. 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. Year Ended September 30, 2025 (In thousands) Restructuring accrual, beginning balance $ — Expense additions 10,922 Cash payments ( 948 ) Restructuring accrual, ending balance $ 9,974 73 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 12. Income Taxes The provision for income taxes was as follows during fiscal 2025, 2024 and 2023: Year ended September 30, 2025 2024 2023 (In thousands) Current: Federal $ 123,340 $ 110,402 $ 112,456 State 23,818 10,199 16,844 Foreign 35,977 35,943 42,327 183,135 156,544 171,627 Deferred: Federal ( 26,949 ) ( 26,227 ) ( 37,884 ) State ( 3,330 ) ( 1,712 ) ( 15,025 ) Foreign ( 2,207 ) 609 5,531 ( 32,486 ) ( 27,330 ) ( 47,378 ) Total provision $ 150,649 $ 129,214 $ 124,249 The foreign provision was based on foreign pre-tax earnings of $ 144.5 million, $ 150.8 million and $ 172.7 million in fiscal 2025, 2024 and 2023, respectively. Current foreign tax expense related to foreign tax withholdings was $ 15.6 million, $ 14.6 million and $ 12.3 million in fiscal 2025, 2024 and 2023, respectively. Foreign withholding tax and related foreign tax credits are included in current tax expense above. Deferred tax assets and liabilities at September 30, 2025 and 2024 were as follows: September 30, 2025 2024 (In thousands) Deferred tax assets: Loss and credit carryforwards $ 6,876 $ 7,717 Compensation benefits 31,638 32,093 Operating lease liabilities 7,375 7,881 Research and development costs 100,304 67,795 Other assets 21,538 18,241 Total deferred tax assets 167,731 133,727 Deferred tax liabilities: Intangible assets ( 8,612 ) ( 7,812 ) Deferred commission ( 15,134 ) ( 14,484 ) Operating lease right-of-use assets ( 6,479 ) ( 7,240 ) Other liabilities ( 18,953 ) ( 17,678 ) Total deferred tax liabilities ( 49,178 ) ( 47,214 ) Deferred tax assets, net $ 118,553 $ 86,513 Based upon the level of historical taxable income and projections for future taxable income over the periods that the deferred tax assets will reverse, management believes it is more likely than not that we will realize the benefits of the deferred tax assets at September 30, 2025. 74 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 As of September 30, 2025, we had available U.S. federal net operating loss (“NOL”) carryforwards of approximately $ 1.3 million. The U.S. federal NOLs were acquired in connection with our acquisitions of Adeptra in fiscal 2012 and Infoglide in fiscal 2013. The U.S. federal NOL carryforwards will expire at various dates beginning in fiscal 2026, if not utilized. Utilization of the U.S. federal NOLs is subject to an annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986, as amended. We had available an excess California state research credit of approximately $ 6.6 million as of September 30, 2025. A reconciliation of the provision for income taxes, with the amount computed by applying the U.S. federal statutory income tax rate of 21% to income before provision for income taxes for fiscal 2025, 2024 and 2023 is shown below: Year Ended September 30, 2025 2024 2023 (In thousands) Income tax provision at U.S. federal statutory rate $ 168,545 $ 134,825 $ 116,261 State income taxes, net of U.S. federal benefit 18,733 13,109 14,135 Foreign tax rate differential 5,812 6,675 9,489 Research credits ( 6,683 ) ( 5,472 ) ( 3,600 ) Valuation allowance — ( 2,183 ) ( 14,451 ) Excess tax benefits relating to share-based compensation ( 27,638 ) ( 14,907 ) ( 949 ) GILTI, FDII, BEAT and FTC ( 10,896 ) ( 9,265 ) ( 9,010 ) Other 2,776 6,432 12,374 Recorded income tax provision $ 150,649 $ 129,214 $ 124,249 As of September 30, 2025, we had approximately $ 94.6 million of unremitted earnings of non-U.S. subsidiaries. The Company has provided $ 3.2 million of deferred tax liabilities for foreign withholding taxes on the undistributed earnings and profits from certain non-U.S. subsidiaries that are not permanently reinvested outside the U.S. For other jurisdictions permanently reinvested, the Company expects the net impact of any future repatriations to be immaterial to the Company’s overall tax liability. Unrecognized Tax Benefit for Uncertain Tax Positions We conduct business globally and, as a result, file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities. With a few exceptions, we are no longer subject to U.S. federal, state, local, or foreign income tax examinations for fiscal years prior to 2022. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year Ended September 30, 2025 2024 2023 (In thousands) Gross unrecognized tax benefits at beginning of year $ 19,879 $ 13,849 $ 12,980 Gross increases for tax positions in prior years 678 4,769 — Gross decreases for tax positions in prior years — ( 1,956 ) ( 1,127 ) Gross increases based on tax positions related to the current year 3,675 4,277 3,650 Decreases for settlements and payments — — ( 523 ) Decreases due to statute expiration ( 4,727 ) ( 1,060 ) ( 1,131 ) Gross unrecognized tax benefits at end of year $ 19,505 $ 19,879 $ 13,849 We had $ 19.5 million of total unrecognized tax benefits as of September 30, 2025, including $ 18.0 million of tax benefits that, if recognized, would impact the effective tax rate. Although the timing and outcome of audit settlements are uncertain, it is unlikely there will be a significant reduction of the uncertain tax benefits in the next twelve months. 75 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 We recognize interest expense and penalties related to unrecognized tax benefits and penalties as part of the provision for income taxes in our consolidated statements of income and comprehensive income. We recognize interest earned related to income tax matters as interest income in our consolidated statements of income and comprehensive income. 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. 13. Share-Based Employee Benefit Plans Description of Stock Option and Share Plans We maintain the 2021 Long-Term Incentive Plan (the “2021 Plan”). The 2021 Plan authorizes the issuance of up to 5,900,000 shares of our common stock, plus additional shares that become available due to the expiration, forfeiture or cancellation of awards outstanding under the 2012 Long-Term Incentive Plan. Under the terms of the 2021 Plan, the pool of shares available for issuance may be used for all types of equity awards available under the 2021 Plan, which include stock options, stock appreciation rights, restricted stock awards, stock unit awards and other share-based awards. All employees, consultants and advisors of FICO or any subsidiary, as well as all non-employee directors, are eligible to receive awards under the 2021 Plan. The 2021 Plan will remain in effect until the earliest of the following: all shares subject to the Plan are distributed, the Board terminates the Plan, or the tenth anniversary of the effective date of the Plan. Stock option awards have a maximum term of ten years . In general, stock option awards and stock unit awards not subject to market or performance conditions vest annually over four years . Stock unit awards subject to market or performance conditions generally vest annually over three years based on the achievement of specified criteria. At September 30, 2025, there were 4,309,793 shares available for issuance as new awards under the 2021 Plan. Description of Employee Stock Purchase Plan We maintain the 2019 Employee Stock Purchase Plan (the “2019 Purchase Plan”) under which we are authorized to issue up to 1,000,000 shares of our common stock to eligible employees. 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. 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. We satisfy stock option exercises, vesting of stock units and the 2019 Purchase Plan issuances from treasury shares. Share-Based Compensation Expense and Related Income Tax Benefits We recorded share-based compensation expense of $ 156.7 million, $ 149.4 million and $ 123.8 million in fiscal 2025, 2024 and 2023, respectively. The total tax benefit related to this share-based compensation expense was $ 15.3 million, $ 15.9 million and $ 13.8 million in fiscal 2025, 2024 and 2023, respectively. As of September 30, 2025, there was $ 199.9 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize that cost over a weighted-average period of 2.28 years. 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. 76 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 Share-Based Activity Restricted Stock Units The fair value of restricted stock units (“RSUs”) granted is the closing market price of our common stock on the date of grant, adjusted for the expected dividend yield, if applicable. We amortize the fair value on a straight-line basis over the vesting period. The following table summarizes the RSUs activity during fiscal 2025: Shares Weighted-average Grant-date Fair Value (In thousands) Outstanding at September 30, 2024 305 $ 724.40 Granted 56 2,119.14 Released ( 128 ) 647.91 Forfeited ( 19 ) 933.24 Outstanding at September 30, 2025 214 $ 1,114.47 The weighted-average fair value of the RSUs granted was $ 2,119.14 , $ 1,150.58 and $ 620.51 during fiscal 2025, 2024 and 2023, respectively. The total intrinsic value of the RSUs that vested was $ 274.7 million, $ 171.0 million and $ 101.1 million during fiscal 2025, 2024 and 2023, respectively, determined as of the date of vesting. Performance Share Units Performance share units (“PSUs”) are granted to our senior officers and earned based on pre-established performance goals approved by the Leadership Development and Compensation Committee of our Board of Directors for any given performance period. The range of payout is zero to 200 % of the number of target PSUs, based on the outcome of the performance conditions. We estimate the fair value of the PSUs using the closing market price of our common stock on the date of grant, adjusted for the expected dividend yield if applicable, based on the performance condition that is probable of achievement. We amortize the fair values over the requisite service period for each vesting tranche of the award. We reassess the probability at each reporting period and recognize the cumulative effect of the change in estimate in the period of change. The following table summarizes the PSUs activity during fiscal 2025: Shares Weighted- average Grant-date Fair Value (In thousands) Outstanding at September 30, 2024 85 $ 786.85 Granted 14 2,227.11 Released ( 46 ) 665.22 Forfeited ( 7 ) 1,161.69 Outstanding at September 30, 2025 46 $ 1,283.09 The weighted-average fair value of the PSUs granted was $ 2,227.11 , $ 1,134.39 and $ 615.45 during fiscal 2025, 2024 and 2023, respectively. The total intrinsic value of the PSUs that vested was $ 101.1 million, $ 65.2 million and $ 40.3 million during fiscal 2025, 2024 and 2023, respectively, determined as of the date of vesting. 77 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 Market Share Units 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. In addition, we do not reverse the compensation cost solely because the market condition is not satisfied, and the award is therefore not earned by the employee, provided the requisite service is rendered. We used the following assumptions to estimate the fair value of our MSUs during fiscal 2025, 2024 and 2023: Year Ended September 30, 2025 2024 2023 Expected volatility in FICO’s stock price 36.2 % 36.3 % 47.3 % 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 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 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. Treasury zero-coupon yields over the three-year performance period. Because we have not declared or paid any cash dividends on our common stock since May 2017, and we do not presently plan to pay cash dividends on our common stock in the foreseeable future, we used an expected dividend yield of zero . The following table summarizes the MSUs activity during fiscal 2025: Shares Weighted- average Grant-date Fair Value (In thousands) Outstanding at September 30, 2024 62 $ 1,161.62 Granted 32 1,596.70 Released ( 46 ) 978.49 Forfeited ( 3 ) 1,846.85 Outstanding at September 30, 2025 45 $ 1,611.35 The weighted-average fair value of the MSUs granted was $ 1,596.70 , $ 1,014.75 and $ 822.96 during fiscal 2025, 2024 and 2023, respectively. The total intrinsic value of the MSUs that vested was $ 102.1 million, $ 95.0 million and $ 42.2 million during fiscal 2025, 2024 and 2023, respectively, determined as of the date of vesting. 78 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 Stock Options We estimate the fair value of stock options granted using the Black-Scholes option valuation model and we amortize the fair value on a straight-line basis over the vesting period. We used the following assumptions to estimate the fair value of our stock options during fiscal 2025, 2024 and 2023: Year Ended September 30, 2025 2024 2023 Stock Options: Weighted-average expected term (years) 4.40 4.46 5.23 Expected volatility (range) 34.6 - 36.5 % 33.6 - 33.9 % 33.4 - 35.5 % Weighted-average volatility 35.0 % 33.7 % 33.5 % Risk-free interest rate (range) 3.89 - 4.08 % 4.18 - 4.30 % 3.40 - 4.49 % Weighted-average expected dividend yield — % — % — % Expected Term. The expected term represents the period that our stock options are expected to be outstanding. We estimate the expected term based on historical experience of similar awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and expectations of future employee behavior. Expected Volatility. We estimate the volatility of our common stock at the date of grant based on a combination of the implied volatility of publicly traded options on our common stock and our historical volatility rate. Risk-Free Interest Rate. The risk-free interest rate assumption is based on observed interest rates appropriate for the term of our employee options. Dividends. We have not declared or paid any cash dividends on our common stock since May 2017, and we do not presently plan to pay cash dividends on our common stock in the foreseeable future. Consequently, we used an expected dividend yield of zero in the years presented. Forfeitures. We use historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest. The following table summarizes option activity during fiscal 2025: Shares Weighted- average Exercise Price Weighted- average Remaining Contractual Term Aggregate Intrinsic Value (In thousands) (In years) (In thousands) Outstanding at September 30, 2024 189 $ 479.26 Granted 5 2,014.89 Exercised ( 65 ) 224.16 Outstanding at September 30, 2025 129 $ 670.08 3.43 $ 109,164 Exercisable at September 30, 2025 65 $ 457.59 2.11 $ 67,464 Vested or expected to vest at September 30, 2025 127 $ 664.36 3.41 $ 108,192 The weighted-average fair value of options granted was $ 705.43 , $ 419.00 and $ 289.54 during fiscal 2025, 2024 and 2023, respectively. The aggregate intrinsic value of options outstanding at September 30, 2025 was calculated as the difference between the exercise price of the underlying options and the market price of our common stock for the 124,000 outstanding options that had exercise prices lower than the $ 1,496.53 market price of our common stock at September 30, 2025. The total intrinsic value of options exercised was $ 107.6 million, $ 49.1 million and $ 16.7 million during fiscal 2025, 2024 and 2023, respectively, determined as of the date of exercise. 79 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 Employee Stock Purchase Plan The compensation expense on the 2019 Purchase Plan arises from the 15 % discount offered to participants. A total of 12,455 , 13,721 , and 21,876 shares of our common stock were issued under the 2019 Purchase Plan during fiscal 2025, 2024 and 2023, respectively. The weighted-average purchase price was $ 1,457.57 , $ 1,217.05 , and $ 646.37 per share for fiscal 2025, 2024 and 2023, respectively. 14. Earnings per Share The following table presents reconciliations for the numerators and denominators of basic and diluted earnings per share (“EPS”) during fiscal 2025, 2024 and 2023: Year Ended September 30, 2025 2024 2023 (In thousands, except per share data) Numerator for diluted and basic earnings per share: Net income $ 651,946 $ 512,811 $ 429,375 Denominator — share: Basic weighted-average shares 24,239 24,676 24,986 Effect of dilutive securities 322 403 381 Diluted weighted-average shares 24,561 25,079 25,367 Earnings per share: Basic $ 26.90 $ 20.78 $ 17.18 Diluted $ 26.54 $ 20.45 $ 16.93 Anti-dilutive share-based awards excluded from the calculations of diluted EPS were immaterial during the years presented. 15. Segment Information We are organized into two reportable segments: Scores and Software. Although we sell solutions and services into a large number of end user product and industry markets, our reportable business segments reflect the primary method in which management organizes and evaluates internal financial information to make operating decisions and assess performance. • Scores. This segment includes our business-to-business (“B2B”) scoring solutions and services which give our clients access to predictive credit and other scores that can be easily integrated into their transaction streams and decision-making processes. This segment also includes our business-to-consumer (“B2C”) scoring solutions, including our myFICO.com subscription offerings. • Software. This segment includes pre-configured analytic and decision management solutions designed for a specific type of business need or process — such as account origination, customer management, customer engagement, fraud detection, and marketing — as well as associated professional services. This segment also includes FICO ® Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by our customers to address a wide variety of business use cases. These offerings are available to our customers as SaaS or as on-premises software. 80 Table of Contents 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. We do not allocate broad-based incentive expense, share-based compensation expense, restructuring and acquisition-related expense, amortization expense, various corporate charges and certain other income and expense measures to our segments. These income and expense items are not allocated because they are not considered in evaluating the segment’s operating performance. Our CODM does not evaluate the financial performance of each segment based on its respective assets or capital expenditures; rather, depreciation and amortization amounts are allocated to the segments from their internal cost centers as described above. The following tables summarize segment information for fiscal 2025, 2024 and 2023: Year Ended September 30, 2025 Scores Software Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 740,145 $ 740,145 Professional services — 82,149 82,149 Scores 1,168,575 — 1,168,575 Total segment revenues 1,168,575 822,294 1,990,869 Segment operating expense ( 142,332 ) ( 574,600 ) ( 716,932 ) Segment operating income $ 1,026,243 $ 247,694 $ 1,273,937 Unallocated corporate expenses ( 181,498 ) Unallocated share-based compensation expense ( 156,667 ) Unallocated restructuring charges ( 10,922 ) Operating income 924,850 Unallocated interest expense, net ( 133,647 ) Unallocated other income, net 11,392 Income before income taxes $ 802,595 Year Ended September 30, 2024 Scores Software Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 711,340 $ 711,340 Professional services — 86,536 86,536 Scores 919,650 — 919,650 Total segment revenues 919,650 797,876 1,717,526 Segment operating expense ( 106,296 ) ( 540,347 ) ( 646,643 ) 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 ) Operating income 733,629 Unallocated interest expense, net ( 105,638 ) Unallocated other income, net 14,034 Income before income taxes $ 642,025 81 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 Year Ended September 30, 2023 Scores Software Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 640,182 $ 640,182 Professional services — 99,547 99,547 Scores 773,828 — 773,828 Total segment revenues 773,828 739,729 1,513,557 Segment operating expense ( 92,757 ) ( 498,538 ) ( 591,295 ) 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 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. were immaterial at September 30, 2025 and 2024. 16. Leases We lease office space and data centers under operating lease arrangements, which constitute the majority of our lease obligations. We also enter into finance lease agreements from time to time for certain computer equipment. For any lease with a lease term in excess of 12 months, the related lease assets and liabilities are recognized on our consolidated balance sheets as operating leases or finance leases at the commencement of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine these components together and account for them as a single lease component for all classes of assets. Leases with a lease term of 12 months or less are not recorded on our consolidated balance sheets. Furthermore, we recognize lease expense for these leases on a straight-line basis over the lease term. 82 Table of Contents 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. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We use a collateralized incremental borrowing rate based on the information available at the commencement date, including the lease term, in determining the present value of future payments. In calculating the incremental borrowing rates, we consider recent ratings from credit agencies and current lease demographic information. Our operating leases also typically require payment of real estate taxes, common area maintenance, insurance and other operating costs as well as payments that are adjusted based on a consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components. Operating lease assets also include prepaid lease payments and initial direct costs, and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term. The following table presents the lease balances within the accompanying consolidated balance sheets as of September 30, 2025 and 2024: Balance Sheet Location September 30, 2025 2024 (In thousands) Assets Operating leases Operating lease right-of-use assets $ 26,213 $ 29,580 Finance leases (*) Property and equipment, net 6,946 9,881 Total lease assets $ 33,159 $ 39,461 Liabilities Current: Operating leases Other accrued liabilities $ 9,615 $ 11,555 Finance leases Other accrued liabilities 3,266 3,144 Non-current: Operating leases Operating lease liabilities 19,187 21,963 Finance leases Other liabilities 3,941 7,263 Total lease liabilities $ 36,009 $ 43,925 (*) Finance leases were recorded net of accumulated depreciation of $ 4.8 million and $ 1.9 million at September 30, 2025 and 2024, respectively. 83 Table of Contents 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: Year Ended September 30, 2025 2024 2023 (In thousands) Operating lease cost $ 11,686 $ 14,421 $ 16,594 Finance lease cost: Depreciation of lease assets 2,935 1,859 — Interest on lease liabilities 481 369 — Short-term lease cost 802 811 461 Variable lease cost 1,906 2,060 2,363 Sublease income ( 461 ) ( 1,073 ) ( 429 ) Total lease cost $ 17,349 $ 18,447 $ 18,989 The following table presents weighted-average remaining lease terms and weighted-average discount rates related to our operating and finance leases: September 30, 2025 2024 Operating leases: Weighted-average remaining lease term (in months) 46 44 Weighted-average discount rate 6.58 % 6.41 % Finance leases: Weighted-average remaining lease term (in months) 28 40 Weighted-average discount rate 5.52 % 5.52 % Supplemental cash flow information related to our non-cancellable leases was as follows: Year Ended September 30, 2025 2024 2023 (In thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflow for operating leases $ 11,651 $ 18,153 $ 19,780 Operating cash outflow for finance leases 481 369 — Financing cash outflow for finance leases 3,144 1,333 — Lease assets obtained in exchange for new lease liabilities: Operating leases 6,669 22,433 4,150 Finance leases — 11,740 — 84 Table of Contents 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: Operating Leases Finance Leases (In thousands) Fiscal 2026 $ 11,214 $ 3,625 Fiscal 2027 8,125 3,625 Fiscal 2028 5,576 441 Fiscal 2029 3,767 — Fiscal 2030 1,917 — Thereafter 2,191 — Total future undiscounted lease payments 32,790 7,691 Less imputed interest ( 3,988 ) ( 484 ) Total reported lease liabilities $ 28,802 $ 7,207 The amounts above do not include contractual sublease income totaling $ 0.4 million and $ 0.2 million during fiscal 2026 and 2027, respectively. 17. Commitments 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. Our purchase obligations primarily relate to a third-party data center hosting agreement, subscription arrangements, and service agreements. Future minimum payments under our non-cancellable purchase obligations as of September 30, 2025 were as follows: Year Ending September 30, (In thousands) 2026 $ 72,128 2027 19,437 2028 5,035 2029 2,375 2030 273 Total $ 99,248 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. 18. Contingencies We are in disputes with certain customers regarding amounts owed in connection with the sale of certain of our products and services. We also have had claims asserted by former employees relating to compensation and other employment matters. We are also involved in various other claims and legal actions arising in the ordinary course of business. We record litigation accruals for legal matters which are both probable and estimable. 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. 85 Table of Contents FAIR ISAAC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years Ended September 30, 2025, 2024 and 2023 19. Guarantees 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. In addition, we continue to monitor the conditions that are subject to the guarantees and indemnifications to identify whether it is probable that a loss has occurred, and would recognize any such losses under the guarantees and indemnifications when those losses are estimable. Indemnification and warranty provisions contained within our customer license and service agreements and certain supplier agreements are generally consistent with those prevalent in our industry. The duration of our product warranties generally does not exceed 90 days following delivery of our products. We have not incurred significant obligations under customer indemnification or warranty provisions historically and do not expect to incur significant obligations in the future. Accordingly, we do not maintain accruals for potential customer indemnification or warranty-related obligations. The indemnification agreements that we have executed with certain of our officers and directors would require us to indemnify such officers and directors in certain instances. We have not incurred obligations under these indemnification agreements historically and do not expect to incur significant obligations in the future. Accordingly, we do not maintain accruals for potential officer or director indemnification obligations. The maximum potential amount of future payments that we could be required to make under the indemnification provisions in our customer license and service agreements, and officer and director agreements is unlimited. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.