What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-11-06 compared with 2023-11-08 · 204 added, 207 removed, 995 unchanged (29% of the section changed)

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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, 2023 and 2022, the related consolidated statements of income and comprehensive income, stockholders' equity (deficit), and cash flows, for each of the three years in the period ended September 30, 2023, and the related notes (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of Fair Isaac Corporation and subsidiaries (the "Company") as of September 30, 2024 and 2023, 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, 2024, 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, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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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 believe provides a faithful depiction of the transfer of services.

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.

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• 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 were part of the contract.

◦ 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.

◦ Tested management’s identification of the performance obligations within the customer contract, including whether material rights that gave rise to a performance obligation were identified.

◦ 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.

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Marketable securities 45,289 33,014

Other investments 1,223 1,135

Property and equipment, net 38,465 10,966

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Amortization of intangible assets 917 1,100 2,061

Restructuring charges — — 7,957

Gains on product line asset sales and business divestiture ( 1,941 ) — ( 100,139 )

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

Total operating expenses 983,897 870,727 834,856

16 unchanged sentences

FAIR ISAAC CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

Years Ended September 30, 2024, 2023 and 2022

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Stockholders’

Equity (Deficit)

(In thousands) Shares Par

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Provision of doubtful accounts 1,675 1,475 2,800

Gains on product line asset sales and business divestiture ( 1,941 ) — ( 100,139 )

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

Net loss on sales and abandonment of property and equipment 438 547 193

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Purchases of property and equipment ( 8,884 ) ( 4,237 ) ( 6,029 )

Capitalized internal-use software costs ( 16,667 ) — —

Proceeds from sales of marketable securities 15,930 5,032 8,063

Purchases of marketable securities ( 18,372 ) ( 10,623 ) ( 9,963 )

Proceeds from product line asset sales and business divestiture, net of cash transferred ( 6,126 ) 2,258 147,431

Purchase of equity investment — — ( 210 )

Net cash provided by (used in) investing activities ( 15,954 ) ( 5,671 ) 137,850

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

Net cash used in investing activities ( 27,993 ) ( 15,954 ) ( 5,671 )

Cash flows from financing activities:

Proceeds from revolving line of credit and term loan 407,000 1,039,000 682,000

Payments on revolving line of credit and term loan ( 402,000 ) ( 988,250 ) ( 259,000 )

Proceeds from revolving line of credit and term loans 947,000 407,000 1,039,000

Payments on revolving line of credit and term loans ( 602,000 ) ( 402,000 ) ( 988,250 )

Proceeds from issuance of senior notes — — 550,000

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Purchase of property and equipment included in accounts payable $ 62 $ 106 $ 22

Finance lease obligation incurred $ 11,740 $ — $ —

See accompanying notes.

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

We also serve consumers through online services that enable people to access and understand their FICO ® Scores — the standard measure in the U.S.

of consumer credit risk — empowering them to increase financial literacy and manage their financial health.

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

Principles of Consolidation and Basis of Presentation

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All intercompany accounts and transactions have been eliminated.

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

Use of Estimates

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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 loan, approximate their carrying amounts because of the short-term maturity of these 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.

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Estimated Useful Life

Data processing equipment and software 3 years to 6 years

Data processing equipment and purchased software 3 years to 6 years

Internal-use software 4 years

Office furniture and equipment 3 years to 7 years

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useful life or lease term

The cost and accumulated depreciation 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.

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 $ 9.4 million, $ 10.1 million and $ 15.2 million during fiscal 2024, 2023 and 2022, respectively.

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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.

Capitalized costs are amortized using the straight-line method over three years .

Software development costs required to be capitalized for internal-use software have not been material to date.

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

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accordingly, we have not capitalized any development or production costs.

Costs we incur to maintain and support our existing products after the general release of the product are expensed in the period they are incurred and included in research and development costs in our consolidated statements of income and comprehensive income.

Goodwill, Acquisition Intangibles and Other Long-Lived Assets

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.

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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 2021, we consolidated our operating segment structure from three to two by merging our Applications and Decision Management Software segments into the new Software segment.

We performed a step one quantitative impairment test on the Software and Scores reporting units before and immediately following the change in reporting units.

There was a substantial excess of fair value over carrying value for the reporting units and we determined goodwill was not impaired for any of our reporting units before or after the change for fiscal 2021.

For fiscal 2024, 2023 and 2022, we performed a step zero qualitative analysis for our annual assessment of goodwill impairment.

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Consequently, we did not perform a step one quantitative analysis and determined goodwill was not impaired for either of our reporting units for fiscal 2024, 2023 and 2022.

We amortize our finite-lived intangible assets which result from our acquisitions over the following estimated useful lives:

Estimated Useful Life

Completed technology 5 years to 10 years

Customer contracts and relationships 5 years to 10 years

Non-compete agreements 2 years

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

Our intangible assets that have finite useful lives and 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.

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 intangible assets that have finite useful lives or other long-lived assets in fiscal 2023, 2022 and 2021.

We did not recognize any impairment charges on other long-lived assets in fiscal 2024, 2023 and 2022.

Revenue Recognition

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See Note 9 for further discussion on revenues.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

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

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It includes net income and foreign currency translation adjustments.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

Foreign Currency and Derivative Financial Instruments

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

We recorded transactional foreign exchange gains (losses) of $( 0.6 ) million, $( 2.6 ) million and $ 1.9 million during fiscal 2024, 2023 and 2022, respectively.

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New Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

Recent Accounting Pronouncements Adopted

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

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

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

The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which means that it will be effective for our fiscal year beginning October 1, 2023.

The adoption of ASU 2021-08 will not have a significant impact on our consolidated financial statements.

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

Product Line Asset Sales and Business Divestiture

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

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

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU No.

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.

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

Early adoption is permitted.

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

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.

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

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.

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Years Ended September 30, 2024, 2023 and 2022

During fiscal 2021, we sold our Collections and Recovery (“C&R”) business to Jonas Collections and Recovery Inc.

(“Jonas”), a company in the Jonas Software operating group of Constellation Software Inc.

In addition, during fiscal 2021, we sold all assets related to our cyber risk score operations and we sold certain assets related to our Software operations to an affiliated joint venture in China.

The gains recognized from these sales were $ 100.1 million, which were recorded in gains on product line asset sales and business divestiture within the accompanying consolidated statements of income and comprehensive income.

The C&R business and the assets sold were part of our Software segment.

Cash, Cash Equivalents and Marketable Securities

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Money market funds 731 731 23,621 23,621

Bank time deposits 7,168 7,168 — —

Total $ 150,667 $ 150,667 $ 136,778 $ 136,778

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The following tables represent financial assets that we measured at fair value on a recurring basis at September 30, 2024 and 2023:

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

September 30, 2024 Active Markets for

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Total $ 53,188 $ 53,188

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

September 30, 2023 Active Markets for

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The forward contracts are short-term in nature and typically have average maturities at inception of less than three months .

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

The following tables summarize our outstanding foreign currency forward contracts, by currency, at September 30, 2024 and 2023:

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Singapore dollar (SGD) SGD 7,404 $ 5,800 —

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

September 30, 2023

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Gain (loss) on foreign currency forward contracts $ 1,580 $ 1,625 $ ( 2,748 )

Goodwill and Intangible Assets

Intangible assets that are subject to amortization consisted of the following at September 30, 2023 and 2022:

September 30, 2023 September 30, 2022

Amount Accumulated

Amortization Net Weighted Average

Life in Years Gross

Amount Accumulated

Amortization Net Weighted Average

Life in Years

(In thousands, except average life)

Completed technology $ 69,706 $ ( 69,289 ) $ 417 5 $ 67,760 $ ( 66,843 ) $ 917 5

Customer contracts and relationships 3,000 ( 2,500 ) 500 5 3,000 ( 1,900 ) 1,100 5

$ 72,706 $ ( 71,789 ) $ 917 5 $ 70,760 $ ( 68,743 ) $ 2,017 5

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

Amortization expense associated with our intangible assets is reflected as a separate operating expense caption — amortization of intangible assets — and is excluded from cost of revenues and selling, general and administrative expenses within the accompanying consolidated statements of income and comprehensive income.

Amortization expense consisted of the following:

Year Ended September 30,

2023 2022 2021

(In thousands)

Completed technology $ 500 $ 500 $ 1,027

Customer contracts and relationships 600 1,561 2,082

Non-compete agreements — — 146

Total $ 1,100 $ 2,061 $ 3,255

At September 30, 2023, estimated future intangible asset amortization expense was $ 0.9 million, which will be recognized in fiscal 2024.

The following table summarizes changes to goodwill during fiscal 2024 and 2023, both in total and as allocated to our segments.

We have not recognized any goodwill impairment losses to date.

As of September 30, 2024, there was no accumulated goodwill impairment loss.

Scores Software Total

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Balance at September 30, 2024 $ 146,648 $ 636,104 $ 782,752

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Composition of Certain Financial Statement Captions

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(In thousands)

Property and equipment:

Data processing equipment and software $ 69,928 $ 76,335

Property and equipment, net:

Data processing equipment and purchased software $ 74,084 $ 69,928

Internal-use software 16,510 —

Office furniture and equipment 9,473 12,296

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Interest payable $ 21,663 $ 20,770

Current operating leases 16,336 19,369

Other 58,149 38,708

Total $ 79,812 $ 59,478

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

September 30,

2024 September 30,

(In thousands)

Current maturities on debt:

Revolving line of credit $ — $ 35,000

The $300 Million Term Loan 15,000 15,000

Current maturities on debt 15,000 50,000

Long-term debt:

Revolving line of credit 210,000 265,000

The $300 Million Term Loan 243,750 258,750

The $450 Million Term Loan 450,000 —

The 2018 Senior Notes 400,000 400,000

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

debt issuance costs ( 9,729 ) ( 12,092 )

Long-term debt 2,194,021 1,811,658

Total debt $ 2,209,021 $ 1,861,658

FAIR ISAAC CORPORATION

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Years Ended September 30, 2024, 2023 and 2022

Revolving Line of Credit and Term Loan

We have a $ 600 million unsecured revolving line of credit and a $ 300 million unsecured term loan with a syndicate of banks that mature on August 19, 2026 .

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

The term loan requires principal payments in consecutive quarterly installments of $ 3.75 million on the last business day of each quarter.

In November 2022, we amended our credit agreement to replace the LIBOR reference rate with the Secured Overnight Financing Rate (“SOFR”) reference rate.

Interest rates on amounts borrowed under the revolving line of credit and term loan are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5 %, and (c) one-month adjusted term SOFR rate plus 1 %, plus, in each case, an applicable margin, or (ii) an adjusted term SOFR rate plus an applicable margin.

Revolving Line of Credit and Term Loans

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

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

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

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

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

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

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In addition, we must pay certain credit facility fees.

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

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

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

As of September 30, 2023, we had $ 300.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 6.678 %, of which $ 35.0 million was classified as a current liability and $ 265.0 million was classified as a long-term liability.

In addition, as of September 30, 2023, we had $ 273.8 million in outstanding balance under the term loan at an interest rate of 6.752 %, of which $ 15.0 million was classified as a current liability and $ 258.8 million was classified as a long-term liability.

The current and long-term revolving line of credit and term loan liabilities were recorded in current maturities on debt and long-term debt, respectively, within the accompanying consolidated balance sheets.

We were in compliance with all financial covenants under this credit agreement as of September 30, 2023.

Future principal payments for the term loan are as follows:

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

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

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

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

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

Future principal payments for the term loans are as follows:

Year Ending September 30, (In thousands)

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Total $ 1,300,000 $ 1,263,500 $ 1,300,000 $ 1,189,250

(*) The carrying value of the Senior Notes was the face value reduced by the net debt issuance costs of $ 11.5 million and $ 14.3 million at September 30, 2023 and 2022, respectively.

Future principal payments for the Senior Notes are as follows:

Year Ending September 30, (In thousands)

2026 $ 400,000

Total $ 1,300,000

Accelerated Share Repurchase

We have authorization to make repurchases of shares of our common stock from time to time in the open market or in negotiated transactions.

As part of the broader share repurchase program, we entered into an accelerated share repurchase agreement (“ASR Agreement”) with a financial institution on June 17, 2021 to repurchase $ 200.0 million of our common stock.

The ASR Agreement was accounted for as two separate transactions (1) a repurchase of common stock and (2) an equity-linked contract on our own stock.

Pursuant to the ASR Agreement, we paid $ 200.0 million to the financial institution and received an initial delivery of 319,400 shares of common stock, which approximated 80 % of the total number of expected shares to be repurchased under the ASR Agreement.

The equity-linked contract for the remaining $ 40.0 million, representing remaining shares to be delivered under the ASR Agreement, was recorded as a reduction to stockholders’ equity as of June 30, 2021 and was settled in August 2021 with us receiving 70,127 additional shares.

In total, 389,527 shares were repurchased under the ASR Agreement.

We were not required to make any additional cash payments or delivery of common stock to the financial institution upon settlement of the agreement.

Revenue from Contracts with Customers

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Revenue is recognized when control of the promised goods or services is transferred to our customers.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

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.

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

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

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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.

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Disaggregation of Revenue

During fiscal 2021, we sold all assets related to our cyber risk score operations, sold certain assets related to our Software segment to an affiliated joint venture in China, and divested our C&R business.

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 these divestitures.

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:

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Total $ 706,643 $ 670,627 $ 1,377,270 100 %

The following table provides information about disaggregated revenue for our Software segment by deployment method:

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

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SaaS software 397,708 347,419 284,102 56 % 54 % 50 %

Total on-premises and SaaS software $ 640,182 $ 564,751 $ 517,888 100 % 100 % 100 %

The following table provides information about disaggregated revenue for our Software segment by product features:

Total $ 711,340 $ 640,182 $ 564,751 100 % 100 % 100 %

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

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Platform software $ 200,004 $ 154,750 $ 116,252 28 % 24 % 21 %

$ 154,750 $ 116,252 $ 66,884 24 % 21 % 13 %

Non-Platform software 511,336 485,432 448,499 72 % 76 % 79 %

Total on-premises and SaaS software $ 640,182 $ 564,751 $ 517,888 100 % 100 % 100 %

(*) FICO platform software is a set of interoperable capabilities which use software assets owned and/or governed by FICO for building solutions and services which conform to FICO architectural standards based on key elements of Cloud Native Computing design principles.

These standards encompass shared security context and access using FICO standard application programming interfaces.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

The following table provides information about disaggregated revenue for our Software segment by timing of revenue recognition:

Total $ 711,340 $ 640,182 $ 564,751 100 % 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

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635,056 567,339 489,104 89 % 89 % 87 %

Total on-premises and SaaS

$ 640,182 $ 564,751 $ 517,888 100 % 100 % 100 %

Total $ 711,340 $ 640,182 $ 564,751 100 % 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.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

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

7 unchanged sentences

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

Revenues collectively generated by agreements with these customers accounted for 41 %, 39 % and 38 % of our total revenues in fiscal 2023, 2022 and 2021, respectively, with all three consumer reporting agencies each contributing more than 10% of our total revenues in fiscal 2023, and two each contributing more than 10% of our total revenues in fiscal 2022 and 2021.

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

At September 30, 2022, no individual customer accounted for 10% or more of total consolidated receivables.

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

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

Contract Balances

2 unchanged sentences

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

Receivables at September 30, 2024 and 2023 consisted of the following:

20 unchanged sentences

Significant changes in the deferred revenues balances are as follows:

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Year Ended September 30,

11 unchanged sentences

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

Performance Obligations

10 unchanged sentences

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.

In rare instances, contracts may include significant modification or customization of the software or SaaS service and will result in the combination of software or SaaS service and implementation service as one performance obligation.

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.

1 unchanged sentence

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

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

11 unchanged sentences

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

Employee Benefit Plans

8 unchanged sentences

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 Company’s Board of Directors.

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 $ 62.5 million, $ 57.8 million and $ 55.7 million during fiscal 2024, 2023 and 2022, respectively.

Restructuring Charges

There were no restructuring charges incurred during fiscal 2023 or 2022.

During fiscal 2021, we incurred restructuring charges of $ 8.0 million in employee separation costs due to the elimination of 160 positions throughout the Company.

Cash payments for all the employee separation costs were fully paid before the end of fiscal 2022.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

The provision for income taxes was as follows during fiscal 2024, 2023 and 2022:

14 unchanged sentences

Foreign withholding tax and related foreign tax credits are included in current tax expense above.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

Deferred tax assets and liabilities at September 30, 2024 and 2023 were as follows:

17 unchanged sentences

Deferred tax assets, net $ 86,513 $ 59,136

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, net of the existing valuation allowance at September 30, 2023.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

As of September 30, 2024, we had available U.S.

1 unchanged sentence

federal NOLs were acquired in connection with our acquisitions of Adeptra in fiscal 2012 and Infoglide in fiscal 2013.

federal NOL carryforward will expire at various dates beginning in fiscal 2024, if not utilized.

federal NOL carryforwards will expire at various dates beginning in fiscal 2026, if not utilized.

Utilization of the U.S.

federal NOL is subject to an annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986, as amended.

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 $ 7.1 million as of September 30, 2024.

There was approximately $ 2.2 million of foreign tax credit carryforwards as of September 30, 2023.

The excess foreign tax credit can be carried forward for 10 years;

however, based on enacted law and expected future usage, we have recorded a valuation allowance of $ 2.2 million as of September 30, 2023.

A reconciliation of the provision for income taxes, with the amount computed by applying the U.S.

14 unchanged sentences

Recorded income tax provision $ 129,214 $ 124,249 $ 97,768

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

As of September 30, 2024, we had approximately $ 82.6 million of unremitted earnings of non-U.S.

subsidiaries.

The Company has not provided deferred tax liabilities for foreign withholding taxes and certain state income taxes on the undistributed earnings and profits from certain non-U.S.

subsidiaries that will be permanently reinvested outside the United States.

In the event these earnings are later remitted to the U.S., any estimated withholding tax and state income tax due upon remittance of those earnings is expected to be immaterial to the income tax provision.

For jurisdictions not permanently reinvested, the Company expects the net impact of any future repatriations to be immaterial to the Company’s overall tax liability.

The Company has provided $ 2.8 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

17 unchanged sentences

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.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

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.

13 unchanged sentences

At September 30, 2024, there were 4,435,309 shares available for issuance as new awards under the 2021 Plan.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

Description of Employee Stock Purchase Plan

17 unchanged sentences

The following table summarizes the RSUs activity during fiscal 2024:

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Shares Weighted-average Grant-date Fair Value

13 unchanged sentences

We reassess the probability at each reporting period and recognize the cumulative effect of the change in estimate in the period of change.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

The following table summarizes the PSUs activity during fiscal 2024:

8 unchanged sentences

The total intrinsic value of the PSUs that vested was $ 65.2 million, $ 40.3 million and $ 25.9 million during fiscal 2024, 2023 and 2022, respectively, determined as of the date of vesting.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Market Share Units

25 unchanged sentences

Outstanding at September 30, 2024 62 $ 1,161.62

The weighted-average fair value of the MSUs granted was $ 1,014.75 , $ 822.96 and $ 493.66 during fiscal 2024, 2023 and 2022, respectively.

The total intrinsic value of the MSUs that vested was $ 95.0 million, $ 42.2 million and $ 7.8 million during fiscal 2024, 2023 and 2022, respectively, determined as of the date of vesting.

FAIR ISAAC CORPORATION

1 unchanged sentence

Years Ended September 30, 2024, 2023 and 2022

The weighted-average fair value of the MSUs granted was $ 822.96 , $ 493.66 and $ 471.16 during fiscal 2023, 2022 and 2021, respectively.

The total intrinsic value of the MSUs that vested was $ 42.2 million, $ 7.8 million and $ 34.5 million during fiscal 2023, 2022 and 2021, respectively, determined as of the date of vesting.

Stock Options

28 unchanged sentences

Exercised ( 47 ) 176.46

Forfeited ( 2 ) 390.14

Outstanding at September 30, 2024 189 $ 479.26 3.30 $ 277,150

1 unchanged sentence

Vested or expected to vest at September 30, 2024 185 $ 471.93 3.25 $ 272,681

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

The weighted-average fair value of options granted was $ 419.00 , $ 289.54 and $ 134.91 during fiscal 2024, 2023 and 2022, respectively.

1 unchanged sentence

The total intrinsic value of options exercised was $ 49.1 million, $ 16.7 million and $ 14.5 million during fiscal 2024, 2023 and 2022, respectively, determined as of the date of exercise.

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Employee Stock Purchase Plan

16 unchanged sentences

Diluted $ 20.45 $ 16.93 $ 14.18

The computation of diluted EPS excluded options to purchase approximately 14,000 , 32,000 , and 12,000 shares of common stock for fiscal 2023, 2022 and 2021, respectively, because the exercise prices of the options exceeded the average market price of our common stock in these fiscal years and their inclusion would be antidilutive.

Anti-dilutive share-based awards excluded from the calculations of diluted EPS were immaterial during the years presented.

Segment Information

7 unchanged sentences

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

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

4 unchanged sentences

Our CODM does not evaluate the financial performance of each segment based on its respective assets or capital expenditures;

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

We have recast certain prior period amounts within this note to conform to the way we internally managed and monitored segment performance during the current fiscal year, reflecting immaterial movements of business activities between segments and changes in cost allocations.

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

The following tables summarize segment information for fiscal 2024, 2023 and 2022:

12 unchanged sentences

Unallocated amortization expense ( 917 )

Unallocated gain on product line asset sale 1,941

Operating income 733,629

2 unchanged sentences

Income before income taxes $ 642,025

Depreciation expense $ 485 $ 9,550 $ 71 $ 10,106

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

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

Year Ended September 30, 2023

11 unchanged sentences

Unallocated amortization expense ( 1,100 )

Unallocated gain on product line asset sale 1,941

Operating income 642,830

Unallocated interest expense, net ( 95,546 )

Unallocated other expense, net ( 2,138 )

Unallocated other income, net 6,340

Income before income taxes $ 553,624

Depreciation expense $ 723 $ 14,412 $ 107 $ 15,242

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Year Ended September 30, 2022

11 unchanged sentences

Unallocated amortization expense ( 2,061 )

Unallocated restructuring charges ( 7,957 )

Unallocated gains on product line asset sales and business divestiture 100,139

Operating income 542,414

Unallocated interest expense, net ( 68,967 )

Unallocated other income, net 7,745

Unallocated other expense, net ( 2,138 )

Income before income taxes $ 471,309

Depreciation expense $ 667 $ 19,505 $ 147 $ 20,319

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

Depreciation and amortization $ 723 $ 14,412 $ 107 $ 15,242

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

were immaterial at September 30, 2024 and 2023.

We lease office space and data centers under operating lease arrangements, which constitute the majority of our lease obligations.

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 at the commencement of an agreement where it is determined that a lease exists.

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.

12 unchanged sentences

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

The following table presents the lease balances within the accompanying consolidated balance sheets as of September 30, 2024 and 2023:

2 unchanged sentences

Operating leases Operating lease right-of-use assets $ 29,580 $ 25,703

Current operating leases Other accrued liabilities $ 16,336 $ 19,369

Non-current operating leases Operating lease liabilities 23,903 39,192

Finance leases (*) Property and equipment, net 9,881 —

Total lease assets $ 39,461 $ 25,703

Operating leases Other accrued liabilities $ 11,555 $ 16,336

Finance leases Other accrued liabilities 3,144 —

Operating leases Operating lease liabilities 21,963 23,903

Finance leases Other liabilities 7,263 —

Total lease liabilities $ 43,925 $ 40,239

The components of our operating lease expenses were as follows:

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

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

Year Ended September 30,

2 unchanged sentences

Operating lease cost $ 14,421 $ 16,594 $ 18,426

Finance lease cost:

Depreciation of lease assets 1,859 — —

Interest on lease liabilities 369 — —

Short-term lease cost 811 461 201

2 unchanged sentences

Total lease cost $ 18,447 $ 18,989 $ 20,718

The following table presents weighted-average remaining lease term and weighted-average discount rates related to our operating leases:

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

The following table presents weighted-average remaining lease terms and weighted-average discount rates related to our operating and finance leases:

September 30,

Operating leases:

Weighted-average remaining lease term (in months) 44 35

Weighted-average discount rate 6.41 % 4.58 %

Supplemental cash flow information related to our operating leases was as follows:

Finance leases:

Weighted-average remaining lease term (in months) 40 0

Weighted-average discount rate 5.52 % — %

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

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

Year Ended September 30,

2 unchanged sentences

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash outflow for operating leases $ 18,153 $ 19,780 $ 22,021

Operating cash outflow for finance leases 369 — —

Financing cash outflow for finance leases 1,333 — —

Lease assets obtained in exchange for new lease liabilities:

Future lease payments under our non-cancellable operating leases as of September 30, 2023 were as follows:

Operating leases 22,433 4,150 7,505

Finance leases 11,740 — —

Future lease payments under our non-cancellable leases as of September 30, 2024 were as follows:

Operating Leases Finance Leases

(In thousands)

7 unchanged sentences

Less imputed interest ( 4,387 ) ( 909 )

Total reported lease liability $ 40,239

The amounts above do not include contractual sublease income totaling $ 1.1 million, $ 0.5 million, $ 0.4 million, and $ 0.2 million during fiscal 2024, 2025, 2026, and 2027, respectively.

Total reported lease liabilities $ 33,518 $ 10,407

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

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, 2024 were as follows:

Year Ending September 30, (In thousands)

2025 $ 62,271

Total $ 122,700

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2024, 2023 and 2022

Contingencies

4 unchanged sentences

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

FAIR ISAAC CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended September 30, 2023, 2022 and 2021

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

11 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data