Fair Isaac Corp 10-K for FY2026
Fair Isaac Corp (FICO)
10-K
2026-11-06
For: 2026-09-30
View Original
Added on
November 06, 2026
About this 10-K
Fair Isaac Corp filed this 10-K on November 6, 2026, covering the fiscal year ended September 30, 2026 (FY2026).
FICO generated fiscal 2026 revenue of $2.5 billion, up 27%, and operating income of $1.3 billion, up 37%; Software ARR reached $850.9 million as of September 30, 2026. AI summary
Headline figures
Fiscal year ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $2.53B
- up 27.3% from $1.99B a year earlier
- Net income
- $834.97M
- up 28.1% from net income of $651.95M a year earlier
- Diluted EPS
- $36.32
- up 36.9% from $26.54 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the fiscal year ended September 30 , 2026
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number 1-11689
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
Registrant’s telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| ☒ | Accelerated Filer | ☐ | |||||||||||||||
| Non-Accelerated Filer | ☐ | Smaller Reporting Company | |||||||||||||||
| Emerging Growth Company | |||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Yes | ☒ | No | |||||||||
As of March 31, 2026, the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $20,917,349,525 based on the last transaction price as reported on the New York Stock Exchange on such date. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purposes.
The number of shares of common stock outstanding on October 23, 2026 was 21,380,929 (excluding 67,475,854 shares held by the Company as treasury stock).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant’s definitive proxy statement relating to its 2027 Annual Meeting of Stockholders (“2027 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2027 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.
TABLE OF CONTENTS
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FORWARD-LOOKING STATEMENTS
Statements contained in this report that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). In addition, certain statements in our future filings with the Securities and Exchange Commission (“SEC”), in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact constitute forward-looking statements within the meaning of the PSLRA. Examples of forward-looking statements include, but are not limited to: (i) projections of revenue, income or loss, expenses, earnings or loss per share, the payment or nonpayment of dividends, share repurchases, capital structure, indebtedness and liquidity, and other statements concerning future financial performance; (ii) statements of our plans and objectives by our management or Board of Directors, including those relating to products or services, research and development, and the sufficiency of capital resources; (iii) statements of assumptions underlying such statements, including those related to economic conditions; (iv) statements regarding results of business combinations or strategic divestitures; (v) statements regarding business relationships with vendors, customers or collaborators, including the proportion of revenues generated from international as opposed to domestic customers; (vi) statements regarding the use, validation, or approval of our credit scores and competing credit score models by government-sponsored enterprises, government agencies, lenders and other participants in the mortgage market, and the expected effect of such developments on our Scores segment; (vii) statements regarding key operating metrics, including annual recurring revenue, dollar-based net retention rate and annual contract value bookings; (viii) statements regarding the expected impact of changes in tax laws, regulations or accounting standards; and (ix) statements regarding products and services, their characteristics, performance, sales potential or effect in use by customers. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “should,” “potential,” “goals,” “strategy,” “outlook,” “plan,” “estimated,” “will,” “may,” “could,” “would,” “projects,” “forecasts,” “continue,” variations of these terms and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those described in Part I, Item 1A, “Risk Factors,” below. The performance of our business and our securities may be adversely affected by these factors and by other factors common to other businesses and investments, or to the general economy. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We disclaim any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers should carefully review the disclosures and the risk factors described in this and other documents we file from time to time with the SEC, including our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
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PART I
Item 1. Business
GENERAL
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,” and “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 70 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. More information about us can be found on our website at www.fico.com.
We make our Annual Reports on Forms 10-K, Quarterly Reports on Forms 10-Q, and Current Reports on Forms 8-K, as well as amendments to those reports, available free of charge on the “Investors” page of our website at www.fico.com as soon as reasonably practicable after we electronically file them with the U.S. Securities and Exchange Commission (“SEC”). References to our website address in this report do not constitute an incorporation by reference. Information on our website is not part of this report.
PRODUCTS AND SERVICES
Our business consists of two operating segments: Scores and Software.
Our Scores 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.
Our Software segment includes decisioning capabilities, models and solutions designed to operationalize intelligence across specific types of business needs or processes — such as account origination, customer management, customer engagement, fraud detection, and marketing — as well as associated professional services. This segment is anchored by FICO® Platform, a modern and modular set of multi-purpose intelligent decisioning capabilities that are designed to support artificial intelligence (“AI”), and advanced analytic and decisioning use cases. Our offerings are available to our customers as software-as-a-service (“SaaS”) or as on-premises software.
Scores
Our scoring solutions include the FICO® Score, which is the standard measure of consumer credit risk in the U.S., providing lenders, investors, and consumers with a consistent and transparent framework for evaluating and communicating about credit risk throughout the lending lifecycle. It is used in most U.S. credit decisions, by nearly all major banks, credit card issuers, mortgage lenders, and auto loan originators. Our B2B scoring solutions are primarily distributed through major consumer reporting agencies in many countries around the world. Our B2C scores are sold directly to consumers through our myFICO.com website and other direct-to-consumer channels.
The FICO® Score is a three-digit number ranging from 300-850. Our proprietary analytic algorithms are applied to credit data collected and maintained by the three U.S. nationwide consumer reporting agencies — Experian, TransUnion and Equifax — to produce standard scores that are used across the credit lifecycle, including in origination, account management and consumer marketing. Users of our scores generally pay the consumer reporting agencies a fee for each individual score generated by our algorithms, and the consumer reporting agencies pay an associated fee to us. Except for product development using de-personalized data, FICO does not collect or store the consumer credit data used in the calculation of our scores, and in most cases, we do not sell our scores directly to lenders or other end-users.
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Since the introduction of the FICO® Score in the U.S. in 1989, we have regularly updated the score to take advantage of newly available data and enhanced analytics. Updated versions of our FICO Scores are generally designed to provide greater predictive accuracy than the scores they replace, and to be compatible with prior versions of the FICO Score. FICO® Score 9 introduced the utilization of reported rental payment history, while also de-emphasizing medical debt and disregarding paid collections. Our latest and most predictive score, FICO® Score 10T, was introduced in 2020. To increase its predictive power, FICO Score 10T builds on FICO Score 9 but also incorporates trended credit data. Trended data considers a longer historical view, giving lenders even more insight into how individuals are managing their credit.
In October 2025, we announced the FICO® Mortgage Direct License Program. Under this program, tri-merge resellers, platform providers, and other third-party distributors will have the option to calculate and distribute FICO® Scores directly to their customers (e.g., mortgage originators), without relying on the three nationwide consumer reporting agencies as intermediaries. Customers that prefer to continue accessing FICO Scores through the consumer reporting agencies may do so. The program is designed to increase price transparency and reduce costs for mortgage lenders, mortgage brokers, and other industry participants. In April 2026, we announced that FICO® Score 10T would also be made available to mortgage lenders through the FICO Mortgage Direct License Program, consistent with the Federal Housing Finance Agency’s initiative to expand access to modernized mortgage credit scoring data.
In addition to the FICO® Score, we offer several other broad-based scores, including specific FICO® Industry Scores such as Bankcard and Auto Industry versions of FICO Score. We also develop various custom scores for our financial services clients.
The FICO® Resilience Index offering is designed to complement FICO® Score models by identifying those consumers who are more resilient to economic stress relative to other consumers within the same FICO Score bands. The FICO Resilience Index is designed to enable lenders to continue to lend and better manage risk by providing a more precise assessment of loan default risk during periods of economic stress.
FICO has invested significant resources in the development of scores that can help expand credit access and lower borrowing costs for consumers that have limited credit history or who have sparse or inactive credit files. These scores use alternative data sources to enhance conventional consumer reporting agency data and generate scores for otherwise un-scorable consumers and in many cases improve the credit scores of scorable consumers.
•FICO® Score XD uses public records and property data, and a consumer’s history with mobile phone, landline phone and cable/internet payments, to generate scores on the same 300-850 scale as standard FICO® Scores. FICO Score XD is available to lenders through our distribution partners, LexisNexis Risk Solutions and Equifax.
•The UltraFICO® Score uses consumer-permissioned data such as checking, savings, or money market account data, to generate scores on the same 300-850 scale as standard FICO® Scores. Incorporating consumer-permissioned data helps empower consumers to establish or improve their creditworthiness by using data that reflects sound financial activity, but that is not part of a conventional credit report. The UltraFICO Score is distributed to lenders through Plaid Check, a product of our distribution partner Plaid, and its consumer reporting agency.
Both scores maintain the same score to risk relationship as standard FICO® Scores, enhancing their compatibility with existing credit underwriting systems and models.
Outside the U.S., we offer FICO® Scores for consumer loans, and in some cases for small and medium business loans. These scores are typically sold to end-users through consumer reporting agencies in those countries. FICO Scores have been made available in over 40 countries and we have also developed client-specific versions of the FICO Score in over ten countries.
We also provide FICO® Scores to consumers in the U.S. through our B2C scoring solutions. These Scores are distributed directly by us through our myFICO.com subscription offering and indirectly through our licensed distribution partners, including Experian and certain lenders through the FICO® Score Open Access Program. Through myFICO.com and other direct-to-consumer channels, consumers can purchase their FICO Scores, including credit reports associated with the scores, explanations of the factors affecting their scores, and customized educational information on how to manage their scores. Consumers can use products to simulate how taking specific actions could affect their FICO Score. Consumers can also subscribe to credit monitoring, which delivers alerts via email and text when changes to a user’s FICO Scores or other credit report content are detected. In addition, consumers can purchase identity theft monitoring products that alert them to potential risks of identity fraud.
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Our FICO® Score Mortgage Simulator is the only mortgage credit score simulator built using our proprietary FICO® Score algorithms, the same algorithms used by lenders in mortgage decisioning, and is made available to mortgage professionals through resellers and mortgage platform providers. Because it applies FICO’s actual scoring algorithms rather than an approximation, the FICO Score Mortgage Simulator provides loan officers and brokers with an enhanced view of how specific financial actions may affect a consumer’s FICO Score and mortgage loan options.
Software
Our software harnesses the power of analytics and intelligent decisioning technologies to help businesses automate, improve, and connect customer decisions across their enterprise. Our customers can use our software to address complex and analytic use cases in customer engagement, including acquisition and pricing, onboarding, servicing and management, and fraud protection. We also help businesses improve non-customer facing decisions such as supply chain optimization, scheduling management, and resource allocation.
FICO provides software to business customers in more than 70 countries around the world. Our offerings can be deployed in the cloud utilizing third-party cloud services, or on-premises using our customers’ IT infrastructure. We typically sell our software as multi-year subscriptions, with payments based on usage metrics such as the number of accounts, transactions or decisioning use cases deployed, often subject to contracted minimum payments.
A significant and growing number of use cases can be addressed with FICO® Platform, a modular software offering designed to support intelligent decisioning use cases. While not all our software runs on FICO Platform today, we are continuing to invest significant development resources to enable substantially all our software to run on FICO Platform in the future and to address an increasingly broader set of use cases.
Principal Areas of Expertise
We specialize in capabilities, models and solutions that empower businesses to operationalize analytics and decisioning technologies to uncover new opportunities, make timely decisions that matter, and execute them at scale. We have found that bringing human and digital intelligence together empowers our customers to target and acquire customers more efficiently, increase customer value, reduce fraud and credit losses, optimize their operations, lower operating expenses, and enter new markets more profitably. These learnings from our customer deployments over the years have been applied to a new enterprise AI sub-category, known as intelligent decisioning platforms. We have been recognized as a leader in Decision Intelligence Platforms by the research and advisory firms Gartner and IDC, and as a leader in AI Decisioning Platforms by Forrester Research.
Our principal areas of research and development expertise are focused on the following four domains.
•Artificial Intelligence
We have a long history of AI innovation, including one of the earliest and most broadly adopted production applications of neural networks for fraud prediction with FICO® Falcon® Fraud Manager in the 1990s.
Our innovations in real-time and responsible AI continue, with recent advancements in generative AI, agentic approaches, and blockchain-based governance. This includes patented and patent-pending approaches for interpretable model architectures designed to assist users in meeting stringent ethical and transparency requirements, and a collection of blockchain applications spanning model development, model monitoring, agent definitions, and control and audit trail of tasks performed by complex and interconnected agents. We also recently launched the FICO® Focused Foundation Model, a new class of domain-specific models built in-house for the responsible and governed use of generative approaches.
To date, we hold over 130 U.S. and international patents covering scientific innovations in AI and responsible AI.
•Predictive Modeling
Predictive modeling identifies and mathematically represents underlying relationships in historical data to make predictions or classifications about future events. Predictive models typically analyze current and historical data about individuals to produce easily understood metrics such as scores. These scores rank-order individuals or specific transactions against a particular variable such as the likelihood of making credit payments on time, the likelihood of a transaction being fraudulent, or the probability of responding to a particular offer for services. Our predictive models are frequently used in mission-critical transactional systems to drive decisions and actions in near real-time.
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Several analytic methodologies underlie our products in this area. These include, but are not limited to, proprietary applications of segmented scorecards and unique methods for reject inference (estimating how rejected loan applicants would have performed if they had been approved). We also apply various statistical techniques for analysis and pattern detection within high velocity datasets and can derive insights and predictive features from various forms of data, including unstructured data.
•Decision Analysis and Augmentation
We are focused on advancing human-machine collaboration for complex problem solving across a variety of scenarios and with multiple tools. This includes research and development of a highly advanced suite of mathematical optimization solvers addressing both linear and non-linear problem types. These solvers enable customers to balance competing objectives, such as market share growth against profit maximization, to calculate mathematically optimal decisions and automate their execution. We have seen broader adoption of these solvers within the operations research and academic communities. In addition, our simulation tools and methods enable customers to construct a digital twin of their organization, allowing them to test and iterate on new business strategies and evaluate expected outcomes, without introducing risky changes into their production environments.
•Real-time Sequence Prediction
We pioneered transaction profiling that uses patent-protected techniques to extract meaningful information from raw transactional data (such as credit card purchases or consumer interactions) and transform it into efficient mathematical representations that can reveal latent patterns and enable real-time assessments of potential business outcomes such as potential fraud, credit risk, or customer intent — a process often referred to as “sequence prediction.” Our proprietary sequence model technology enables proprietary pattern matching approaches. This patent-pending innovation is purpose built for transaction and sequence data and incorporates a consumer’s complete transaction history and context directly in a decisioning system, providing more robust predictive information for the business to use.
We believe our platform decisioning capabilities and analytics are among the best commercially available, and that we are well positioned to integrate advanced analytic, software and data technologies into mission-critical business solutions that can offer strong returns on investment.
Our Offerings
FICO® Platform
FICO® Platform is an intelligent decisioning environment that empowers businesses to configure solutions that orchestrate and operationalize high velocity decisions that matter, at scale. Users of FICO Platform can bring together data from multiple sources, apply AI and other analytics to derive insights, and translate those insights into responses and automated workflows that can be executed in real-time. Based on a modular cloud architecture, FICO Platform can be configured by our customers to address a wide range of business challenges. FICO Platform can deliver increasing value to our customers over time as they add additional capabilities, create their own solutions, or utilize standard models and pre-configured solutions to address a diverse set of use cases. This empowers our customers to integrate disparate analytic, AI, and decisioning silos onto a centralized, scalable platform. We expect this in turn to drive additional subscription and transactional usage revenue for FICO over time as customers purchase more FICO Platform capabilities and pay for more usage of those capabilities.
We sell FICO® Platform flexibly to fit how each customer wants to adopt it. Customers can use it to support broad enterprise transformation initiatives, or they can adopt fast-to-value solutions aimed at a specific business problem such as those within fraud, risk, and supply chain. These solutions can be easily configured by the customer themselves, by FICO’s professional services team, or by our growing partner network, and they can be deployed either as standalone offerings or as integrated bundles of multiple solutions.
Our goal is to move substantially all of FICO’s current software products onto FICO® Platform. Many capabilities of FICO’s current software products are now part of FICO Platform, addressing use cases such as origination, fraud detection, customer management, and next best action, among others. We believe this strategy of moving our software products to FICO Platform will contribute to revenue growth over time through follow-on “land and expand” sales to existing FICO Platform customers and more sales to medium-sized businesses typically served through value-added resellers and systems integrators.
Our annual recurring revenue (“ARR”) from FICO® Platform-based products was $452.6 million as of September 30, 2026, representing 53% of our total software ARR. For information about ARR, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Annual Recurring Revenue, in this Annual Report on Form 10-K.
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Key FICO® Platform Capabilities:
Decisioning
Decision models operationalize AI and other model types by providing business users with transparency, control, and integration of decision flows with other systems and data. Using open standards as well as proprietary methods, we provide highly advanced decision modeling and execution that enable users to visually map out decision logic and processes, test them within a broader strategy workflow, execute these decision rules and strategies in production, and finally trace and audit the outcomes produced.
Communications
We provide an intelligent omnichannel digital communication capability for configuring virtual customer service agents and other structured two-way experiences that can promptly resolve customer interactions. It enables businesses to automate individualized customer dialogues and is especially well suited for regulated, sensitive, or other high-risk customer communications. Once configured, cost-effective and auditable two-way communications are available 24/7 through the channel (e.g., mobile apps, text, and voice) that their customers choose.
Simulation
Using a digital representation of their business and its structure, we enable business users to evaluate a wide range of scenarios to assess how their business is likely to perform under varying conditions and assumptions. We support both human-led exploration and experimentation, as well as sophisticated machine-led scenarios where multi-dimensional scenarios and combinations are evaluated. This can provide insights into how outcomes may shift in the face of changing competitor strategy, macroeconomic conditions, evolving customer preferences, adjusted company-level risk tolerance, and more.
Optimization
We provide operations research professionals and business analysts with mathematical solvers and productivity tools that can be used to determine optimal outcomes for a wide range of industry problems. This includes a powerful modeling and programming language (known as Mosel, which we have made available freely for use in both academia and in the industry) to quickly model and solve difficult optimization problems, as well as a collection of high-performance solvers that can compute efficient results even in large and complex problem domains that require a multi-dimensional and constraint-based approach. This includes, but is not limited to, problems within pricing, resource allocation, supply chain design, and marketing offer delivery.
Data Management
Data quality and coverage are critical components for intelligent decisioning; however, in many organizations, data resides in many disparate formats, structures, and locations, and has varying quality. We provide a crucial layer that checks data quality, transforms data into appropriate formats, derives enhanced context with feature and profile computations, and deploys and manages data products for use in production, making them available for streaming and event-driven decisioning systems. This is designed to enable an organization to create a unified real-time view of both its customers and its enterprise as a whole. In addition, we provide data connectors to certain third-party data, and are investing in partner enablement and scaling for additional data providers in FICO® Marketplace.
Composable Workspaces
FICO® Platform is architected in a fully decomposed, modular, and open way such that it supports the rapid design and configuration of new solutions. Given that each workspace sits on top of FICO Platform, artifacts of intelligence such as data, calculated profiles, and models (of multiple types) can be reused to drive synergies as additional solutions are deployed, share insights with one another, and derive useful new artifacts. This complements a do-it-yourself approach by providing reusable structures and enterprise architecture that can speed time to market, reduce risk, and provide a lower total cost of ownership.
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Standalone Software and Pre-configured Solutions
FICO® analytic and decisioning software solutions use proprietary and open source services and capabilities to enable both business users and data scientists to develop and execute advanced analytics and decision modeling. Our key standalone products in this category include FICO® Falcon® Fraud Manager; FICO® Customer Communication Services; FICO® Decision Modeler; FICO® Blaze Advisor® decision rules management system; FICO® Xpress Optimization; FICO® Analytics Workbench; FICO® Strategy Director; FICO® Data Orchestrator; FICO® DMP Streaming; and FICO® TRIAD® Customer Manager. We continue to migrate our standalone software applications to FICO® Platform in a disciplined way and introduce new platform-native solutions for specific use cases.
FICO Standard Models
We have developed highly advanced and real-time predictive, machine learning, and AI models. We have also created business and technical systems for the secure and private sharing of data across consortiums of banking institutions to allow for broad, market level insight on topics such as fraud prevention. We have made a variety of models generally available to our customers for the collection of use cases including risk detection, marketing, payments fraud, collections, account management, and others.
FICO® Professional Services
We offer a range of professional services designed to help customers navigate their AI transformation, configure our software, and develop and deploy new enterprise intelligence solutions that are built on our platform.
We often sell software implementation and configuration services in conjunction with our on-premises and SaaS subscriptions, and with our license sales. The FICO implementation services team leverages their deep expertise in our products and their extensive industry-specific knowledge to help our customers implement and configure FICO software rapidly and effectively. Our professional services are sold on an hourly time and materials basis or for a fixed project fee.
Partner Network
We are increasingly working with partners to help us expand our reach and accelerate our customer deployments. The growth of our partner channels and scaled partner enablement are active areas of investment for us across multiple partner types and verticals, with a focus on partnerships with global systems integrators and high-volume payment processors. One important aspect of our partner network strategy is FICO® Marketplace, which provides an open application and decision asset marketplace that allows partners to publish offerings, and for our customers to deploy partner offerings within their enterprise environment.
MARKETS AND CUSTOMERS
Our scores and software products and services serve customers in multiple industries, including banking, insurance, retail, healthcare and public agencies. End users of our products include more than three-quarters of the largest 100 financial institutions in the U.S. and nearly all of the largest 100 banks in the world. Our customers also include more than 600 insurers, including all of the top ten U.S. property and casualty insurers; more than 300 retailers and general merchandisers; and more than 200 government or public agencies. Seven of the top ten companies on the 2026 Fortune 500 list use one or more of our solutions. In addition, our consumer solutions are marketed to more than 200 million U.S. consumers whose credit relationships are reported to the three major U.S. consumer reporting agencies.
The majority of our scores historically have been marketed and sold through consumer reporting agencies. During fiscal 2026, 2025 and 2024, revenues generated from our agreements with Experian, TransUnion and Equifax collectively accounted for 60%, 51% and 45% of our total revenues, respectively. In October 2025, we announced a significant change in the delivery of FICO® Scores to the U.S. mortgage industry. With the announcement of the FICO® Mortgage Direct License Program, tri-merge resellers, platform providers, and other third-party distributors will have the option to calculate and distribute FICO Scores directly to their customers (e.g., mortgage originators), without relying on a consumer reporting agency as an intermediary. The program is designed to help drive price transparency and reduce costs for mortgage lenders, mortgage brokers, and other industry participants.
In addition to these business-to-business channels, we also sell our scores and credit monitoring directly to consumers through our myFICO.com on-line subscription offerings. Outside of the U.S., we sell our scores through consumer reporting agencies, other third-party distributors, and in some cases directly to large end-users.
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We market our software products and services primarily through our own direct sales organization that is organized around vertical and geographic markets. Sales teams are based in our headquarters and in field offices strategically located around the world. We also market our products through indirect channels, including alliance partners, resellers and systems implementers. As more capabilities are made available on FICO® Platform, we expect our sales through indirect channels to grow. We are investing significant resources to develop our indirect channel relationships.
Our largest market segment is financial services, representing 92% of our total revenue during fiscal 2026. Our largest geographic market is the Americas, representing 89% of our total revenue during fiscal 2026.
COMPETITION
The market for our solutions is intensely competitive and is constantly changing. Our competitors vary both in size and in the scope of the products and services they offer. We encounter competition from several sources, including:
•in-house data science and systems developers;
•developers and providers of large language models, machine learning, and AI systems;
•fraud solutions providers;
•scoring model builders;
•providers of credit reports and credit scores, including consumer reporting agencies;
•software companies supplying machine learning modeling, rules, or AI development tools;
•entity resolution and social network analysis solutions providers;
•providers of customer engagement and risk management solutions;
•providers of account workflow management software;
•business process management and intelligent decisioning platform providers;
•enterprise resource planning and customer relationship management solutions providers;
•business intelligence solutions providers;
•providers of automated application processing services; and
•third-party professional services and consulting organizations.
We believe we offer customers a unique mix of products, expertise and capabilities that allows us to compete effectively in our target markets.
We believe the principal competitive factors affecting our markets include technical performance; access to unique proprietary AI and predictive models and data; product attributes like adaptability, scalability, interoperability, functionality, and ease-of-use; on-premises and SaaS product availability; product price; customer service and support; the effectiveness of sales and marketing efforts; partner channel effectiveness; existing market penetration; and reputation. Although we believe our products and services compete favorably with respect to these factors, we may not be able to maintain our competitive position against current and future competitors.
Scores
In our Scores segment, we compete with both outside suppliers and in-house analytics. Primary competitors among outside suppliers of scoring models are the three major consumer reporting agencies in the U.S. and Canada — which are also our partners in offering our scoring solutions — and VantageScore (a joint venture entity established by the three major U.S. consumer reporting agencies), which is selling a credit scoring product competitive with our products and which has experienced increased regulatory acceptance in the U.S. mortgage market. Additional competitors include consumer reporting agencies outside the U.S. like CRIF, which operates in the European Union, and other data providers like LexisNexis, some of which also are our partners.
For our offerings that deliver credit scores, credit reports, and consumer credit education solutions directly to consumers, we compete with other direct to consumer credit and identity services such as Credit Karma, Credit Sesame, Experian, and TransUnion — most of which are also our partners.
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Software
The competition in our Software segment varies by capability and use case. In the intelligent decisioning platform market, we compete primarily with IBM, SAS and Pegasystems. For solutions that address a specific use case, we compete with a number of individual solution vendors and startups in areas such as fraud solutions, loan origination, optimization, and customer communications. We also continue to see customers attempting do-it-yourself solutions, which trend is expected to increase given the advancement of large language model-based coding and development tools.
PRODUCT PROTECTION AND TRADEMARKS
We rely on a combination of patent, copyright, trademark and trade secret laws and confidentiality agreements and procedures to protect our proprietary rights.
We retain the title to and protect the suite of models and software used to develop scoring models as a trade secret. We also restrict access to our source code and limit access to and distribution of our software, documentation, and other proprietary information. We have generally relied upon the laws protecting trade secrets and upon contractual nondisclosure safeguards and restrictions on transferability to protect our software and proprietary interests in our product and service methodology and know-how. Our confidentiality procedures include invention assignment and proprietary information agreements with our employees and independent contractors, and nondisclosure agreements with our distributors, strategic partners, and customers. We also claim copyright protection for certain proprietary software and documentation.
We have patents on many of our technologies and have patent applications pending on other technologies. The patents we hold may not be upheld as valid and may not prevent the development of competitive products. In addition, patents may never be issued on our pending patent applications or on any future applications that we may submit. As of September 30, 2026, we held 206 U.S. and 37 foreign patents, with 96 applications pending.
Despite our precautions, it may be possible for competitors or users to copy or reproduce aspects of our software or to obtain information that we regard as trade secrets. In addition, the laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the U.S. Patents and other protections for our intellectual property are important, but we believe our success and growth will depend principally on such factors as the knowledge, ability, experience and creative skills of our personnel, new products, frequent product enhancements and name recognition.
We have developed technologies for research projects conducted under agreements with various U.S. government agencies or their subcontractors. Although we have acquired commercial rights to these technologies, the U.S. government typically retains ownership of intellectual property rights and licenses in the technologies that we develop under these contracts. In some cases, the U.S. government can terminate our rights to these technologies if we fail to commercialize them on a timely basis. In addition, under U.S. government contracts, the government may make the results of our research public, which could limit our competitive advantage with respect to future products based on funded research.
We have used, registered and/or applied to register certain trademarks and service marks for our technologies, products and services. As of September 30, 2026, we had 30 trademarks registered in the U.S. and select foreign countries.
GOVERNMENTAL REGULATION
We are subject to a number of U.S. federal, state, local and foreign laws and regulations that involve matters central to our business. Laws and governmental regulations affect how our business is conducted and, in some cases, subject us to the possibility of government supervision or enforcement and future lawsuits arising from our products and services. Laws and governmental regulations also influence our current and prospective customers’ activities, as well as their expectations and needs in relation to our products and services. Laws and regulations that may affect our business and our current and prospective customers’ activities include, but are not limited to, those summarized below.
Many U.S. and foreign jurisdictions have passed, or are currently contemplating, a variety of consumer protection, data privacy, and cyber and data security laws and regulations that may relate to our business or the business of our customers or affect the demand for our products and services. For example, the General Data Protection Regulation (the “GDPR”) in the United Kingdom (“U.K.”) and the European Union (“E.U.”) imposes, among other things, strict obligations and restrictions on the collection and use of U.K. and E.U. personal data, a requirement for prompt notice of data breaches in certain circumstances, a requirement for implementation of certain approved safeguards (such as the use of approved “standard contractual clauses” and the performance of appropriate data transfer impact assessments) for transfers of personal data to other countries that have not been determined by the E.U. or the U.K. to provide adequate data privacy protections, and possible
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substantial fines for any violations. Our implementation of processes to meet such requirements for affected data flows, which may involve interpretive issues, and may have an adverse impact on cross-border transfers of personal data, may subject us or our customers to additional scrutiny from E.U. and U.K. regulators or may increase our costs of compliance associated with maintaining appropriate certifications, performing any necessary assessments, engaging in contract negotiations with third parties and implementing approved standard contractual clauses, and/or (if appropriate) localizing certain data processing activities. Numerous other countries have introduced and, in some cases, enacted, similar data privacy and cyber and data security laws.
The California Consumer Privacy Act of 2018 (“CCPA”), as amended by the California Privacy Rights Act of 2023 (the “CPRA”), gives California residents certain privacy rights in the collection and disclosure of their personal information and requires businesses to make certain disclosures and take certain other acts in furtherance of those rights. Numerous other U.S. states have passed similar privacy laws.
The Gramm-Leach-Bliley Act (“GLBA”) regulates, among other things, the receipt, use, disclosure, and security of non-public personal information of consumers held by “financial institutions” and applies indirectly to companies that provide services to financial institutions. As a provider of services to financial institutions, portions of our business are subject to obligations to comply with certain GLBA provisions, including limitations on the use or disclosure of the underlying data and rules relating to the technological, physical and administrative safeguarding of non-public personal information.
The Health Insurance Portability and Accountability Act of 1996, as amended by the American Recovery and Reinvestment Act of 2009 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations impose specified requirements relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s security standards directly applicable to “business associates.” We may function as a business associate for certain of our customers that are HIPAA-covered entities and service providers and, in that context, we are regulated as a business associate for the purposes of HIPAA.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) prohibits unfair, deceptive, or abusive acts or practices (“UDAAP”) with respect to the offering of consumer financial products and services and provides the Consumer Financial Protection Bureau (the “CFPB”) with authority to enforce those provisions as well as certain enumerated federal consumer financial laws. In certain circumstances, the CFPB also has examination and supervision powers with respect to service providers who provide a material service to a covered financial institution offering consumer financial products and services. Further, the CFPB has authority to issue rules designating non-depository “larger participants” in certain markets for consumer financial services and products for purposes of the CFPB’s supervisory authority under the Dodd-Frank Act, which the CFPB has done for several markets including the consumer reporting market. Such designated “larger participants” are subject to reporting and compliance examinations by the CFPB, which may result in increased compliance costs and potentially greater enforcement risks based on these supervisory activities. In addition, the laws and regulations issued by U.S. and foreign regulators of some of our largest financial institution customers may require them to impose additional contractual obligations on us, exercise greater oversight, and perform more rigorous audits of their key service providers such as us.
The Federal Trade Commission Act (the “FTC Act”) prohibits unfair methods of competition and unfair or deceptive acts or practices. Under the FTC Act, the FTC’s jurisdiction includes the ability to bring enforcement actions based on the security measures we employ to safeguard the personal data of consumers. Allegations that we failed to safeguard or handle such data in a reasonable manner may subject us to regulatory scrutiny or enforcement action.
The U.S. Fair Credit Reporting Act (the “FCRA”) applies to consumer reporting agencies, as well as data furnishers, and users of consumer reports such as banks and other companies, many of which are our customers. The FCRA provisions govern the accuracy, fairness and privacy of information in the files of consumer reporting agencies that engage in the practice of assembling or evaluating information relating to consumers for certain specified purposes. The FCRA limits the type of information that may be reported by consumer reporting agencies, limits the distribution and use of consumer reports, establishes consumer rights to access and dispute their own credit files, includes provisions designed to prevent identity theft and assist fraud victims, requires consumer reporting agencies to make a free annual credit report available to consumers and imposes many other requirements on consumer reporting agencies, data furnishers and users of consumer report information. These requirements can affect the manner and extent to which our customers use our products and services.
A number of states have enacted requirements similar to the FCRA. Some of these state laws impose additional, or more stringent, requirements than the FCRA, especially in connection with investigations and responses to reported inaccuracies in consumer reports. The FCRA preempts some of these state laws, but the scope of preemption continues to be defined by the courts. Various consumer credit laws and regulations in the foreign countries where we conduct business also affect the products and services we offer to our customers.
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The Credit Repair Organizations Act (the “CROA”) regulates companies that claim to be able to assist consumers in improving their credit standing. There have been efforts to apply the CROA to credit monitoring services offered by consumer reporting agencies and others, which may impact certain of our products and services.
Special requirements may apply to us when providing services directly or indirectly to U.S. federal, state and local government agencies. The applicable requirements depend upon the monetary value of the awarded contract, the particular government agency awarding or funding the contract, the scope of services to be delivered, and the level of access that the agency will need to provide to us to enable us to perform the contract. For example, we may need to abide by the Privacy Act of 1974, the Internal Revenue Service’s Publication 4812, and the Federal Acquisition Regulation and associated supplemental contract clauses. Each of these laws, regulations and contract clauses imposes certain requirements, including measures for the protection of personal information or information that is otherwise categorized as sensitive by the government. Government agencies frequently modify or supplement these requirements, and consequences for violations of applicable requirements may include penalties, civil liability and for severe infractions, criminal liability.
There has been an increased focus on laws and regulations related to our business and the business of our customers relating to policy concerns regarding the operation of consumer reporting agencies, the use and accuracy of credit and alternative data, the costs of consumer reports and credit scores, the use of credit scores and fair lending, and the use, transparency, and fairness of algorithms, AI, and machine learning in business processes.
The EU AI Act, which establishes requirements for the provision and use of products that leverage AI systems, including in credit scoring, entered into force on August 1, 2024, with most provisions becoming effective in December 2026 and December 2027. Other countries, as well as the executive branch of the U.S. government and many U.S. states, are considering or have implemented laws, regulations, or standards applicable to the development, provision, and use of AI technologies in certain industries and contexts. For example, California has issued regulations under the CCPA and CPRA, and Colorado has passed a law and is issuing regulations, that govern the use of automated decision-making technology, including AI, to make certain significant or consequential decisions about individuals, including credit decisions. The California and Colorado laws are set to take effect in January 2027.
Additional laws and regulations in the U.S. and abroad that may affect our business and our current and prospective customers’ activities include, but are not limited to, those in the following significant regulatory areas:
•Laws and regulations that limit the use of credit scoring models (e.g., state “mortgage trigger” or “inquiries” laws, state insurance restrictions on the use of credit-based insurance scores, and the E.U. Consumer Credit Directive).
•Fair lending laws (e.g., the Equal Credit Opportunity Act and Regulation B, and the Fair Housing Act) and laws and regulations that may impose requirements relating to algorithmic fairness or accountability.
•Laws and regulations related to data and cybersecurity, such as the Cybersecurity Act of 2015; the U.S. Department of Commerce’s National Institute of Standards and Technology’s Cybersecurity Framework; the Clarifying Lawful Overseas Use of Data Act; cyber incident notice requirements for banks and their service providers under rules and regulations issued by federal banking regulators; cybersecurity incident disclosure requirements for public companies under regulations issued by the SEC; and identity theft, file freezing, and similar state privacy laws.
•Laws and regulations that apply to technology services and cloud-hosted services, and related digital and cyber resiliency, operational continuity, and data processing requirements, including contract termination rights (e.g., the EU Digital Operational Resilience Act, the EU Cyber Resilience Act, and the EU Data Act).
•Laws and regulations related to extension of credit to consumers through the Electronic Fund Transfers Act and Regulation E, as well as non‑governmental VISA and MasterCard electronic payment standards.
•Laws and regulations applicable to secondary market participants (e.g., The Federal National Mortgage Association (“Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“Freddie Mac”)) that could have an impact on our scoring products and revenues, including 12 CFR Part 1254 (Validation and Approval of Credit Score Models) issued by the Federal Housing Finance Agency in accordance with Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174), and any regulations, standards or criteria established pursuant to such laws or regulations, including the ongoing validation and approval of the use of the FICO® Score by Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency.
•Laws and regulations applicable to our clients and their use of our customer communication services (e.g., the Telemarketing Sales Rule, the Telephone Consumer Protection Act, the CAN-SPAM Act, the Fair Debt Collection Practices Act, and regulations promulgated thereunder, and similar state laws and similar laws in other countries).
•Laws and regulations applicable to our insurance clients and their use of our insurance products and services.
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•The application or extension of consumer protection laws, including implementing regulations (e.g., the Consumer Financial Protection Act, the Truth In Lending Act and Regulation Z, the Fair Debt Collection Practices Act and Regulation F, the Servicemembers Civil Relief Act, and the Military Lending Act, and similar state consumer protection laws).
•Laws and regulations governing the use of the Internet and social media, telemarketing, advertising, endorsements and testimonials.
•Anti-money laundering laws and regulations (e.g., the Bank Secrecy Act and the USA PATRIOT Act).
•Laws and regulations restricting transactions with sanctioned parties and regarding export controls as they apply to FICO products delivered in non-U.S. countries or to foreign nationals (e.g., Office of Foreign Asset Control sanctions and Export Administration Regulations).
•Financial regulatory standards (e.g., Sarbanes-Oxley Act requirements to maintain and verify internal process controls, including controls for material event awareness and notification).
•Laws and regulations that apply to the management or oversight of third parties (e.g., vendors, contractors, suppliers, partners, and distributors).
•Laws and regulations relating to the environmental, social and governance, or sustainability, practices of companies, including enhanced climate-related disclosure requirements from regulators, such as California’s climate disclosure rules and the E.U.’s Corporate Sustainability Reporting Directive.
•We are also subject to federal and state laws that are generally applicable to any U.S. business with national or international operations, such as antitrust and unfair competition laws, the Foreign Corrupt Practices Act, the Americans with Disabilities Act, state unfair or deceptive practices acts and various employment laws.
HUMAN CAPITAL RESOURCES
Our People
As of September 30, 2026, we employed 3,747 persons across 31 countries. Of these, our largest representation included 1,386 (37%) based in the U.S., 1,400 (37%) based in India and 247 (7%) based in the U.K. Other than to the extent mandated by applicable law in certain foreign jurisdictions, none of our employees are covered by a collective bargaining agreement, and no work stoppages were experienced during fiscal 2026.
Our Board of Directors (our “Board”) and executive leadership team believe that our people are vital to our success. The Leadership Development and Compensation Committee (the “LDCC”) of our Board oversees all human capital management policies, programs, and strategies, including but not limited to those regarding talent recruitment, development, retention, talent management, health and safety, organizational culture, workforce design, employee engagement, and compensation and benefit programs. The LDCC also periodically reviews and reports to the Board with respect to succession planning for our Chief Executive Officer and other senior management positions. In addition, our Chief Human Resources Officer reports to our Board periodically on people-focused programs.
Employee Engagement
For more than a decade, we have conducted quarterly workforce surveys to measure employee engagement and gain valued feedback and insights from our people about ways to improve the employee experience and the effectiveness of our business operations and our organizational culture. Detailed findings from these surveys, which include scores on nearly two dozen dimensions of employee engagement, ranging from access to career development opportunities to a sense of belonging to confidence in management and leadership, as well as thousands of contextual narrative comments, are promptly communicated to all employees, individual managers, the executive team and our Board to ensure awareness and drive accountability. We involve designated human resources business partners and learning consultants who work with senior leaders to explore findings, identify high value actions, and amplify messaging to help our people understand how their feedback and ideas contribute to positive organizational change.
Examples of organizational changes that have been driven by the insights from these surveys include investments in workforce capacity, broadened and more frequent company-wide communications, increased employee stock ownership through significant expansion of equity-based awards and enhancement of our Employee Stock Purchase Plan to encourage broader participation, expanded benefit programs including paid parental leave, well-being, family building, childcare reimbursement and company-funded transportation programs, enhanced incentive plan funding, and expanded investments in professional development targeting leadership and technical skills, as well as initiatives to promote a culture where all employees feel welcome at work.
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With consistently high participation rates, engagement survey data provides an effective and dynamic measure of workforce sentiment, helping managers and senior leaders address issues and organizational improvement ideas that are most important to our people. In our most recent survey cycle, 84% of survey dimensions scored at or above their available external benchmark.
Organizational Culture
FICO is committed to building and reinforcing a culture where all employees feel welcome and where individual perspectives are valued. FICO believes that a highly talented workforce that includes people with a wide range of backgrounds, experiences and perspectives drives innovation while helping us relate to our global customer base. Our goal is to achieve this innovation and connection to our customer base through a culture that attracts the broadest talent audience possible, while always striving to select the most qualified individuals. We also believe that promoting a culture where each individual is truly valued allows our people to reach their full potential.
Our FICO Cares organization encourages our people to connect with and contribute to their community. We encourage employees to participate in volunteer activities by providing work schedule flexibility and paid Community Volunteer Leave. We also encourage and provide corporate matching of employee cash donations and volunteer time to qualified charitable organizations.
Across our global workforce, as of September 30, 2026, the percentage of males and females was 65% and 35%, respectively. Looking at our U.S. workforce, as of September 30, 2026, 44% were racially/ethnically diverse employees who are members of a protected class.
Additional information on our talent programs is available on the Corporate Responsibility page of our website at www.fico.com/en/corporate-responsibility. Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K.
Talent Recruitment
We leverage organizational culture as a competitive advantage in our efforts to attract people from the broadest possible talent pool. We deploy selection practices designed to ensure strong alignment between candidate qualifications and knowledge and skills needed for success in each role, and we invest in hiring manager training and tools focused on effective selection strategies. Further, in the U.S., we detail our targeted base pay ranges on all public job postings and prohibit our recruiters from inquiring about a candidate’s current level of compensation. Our focus on the professional development of our people drives the internal posting of virtually all job opportunities. And, consistent with our remarkably low undesired attrition rate, FICO has significantly strengthened its position as an employer of choice, resulting in attractive external candidate pools.
Professional Development
To support professional development, we offer a structured onboarding program with training specific to a variety of identified career paths to help new employees become rapidly engaged and productive. We have invested in building the FICO Integrated Learning Organization (“ILO”), which is led by our Chief Learning Officer. The ILO develops customized learning content for colleagues, clients and partners around the world. We deliver high quality, targeted new hire onboarding, technology and product skill training, compliance, and management and leadership education through this “FICO Learning” platform. This allows our employees to obtain the knowledge and skills to effectively perform in their current roles, while also preparing them for new opportunities. We also offer financial support for degreed or certificated programs through a tuition reimbursement program.
We have defined specific career paths for all major functions in our organization so that our people understand how they can progress in their career by expanding their knowledge and skills. In doing so, our job titling system reflects both individual contributor (or technical) career tracks and people management career tracks to reinforce our philosophy that people can grow professionally in either track.
To further consistent administration, we conduct annual company-wide performance reviews supported by the use of performance rubrics for each major function. These rubrics set forth clear behavioral expectations for each function through a set of objective descriptors organized across our three levels of performance (Improvement Needed, Achieved Expectations, and Outstanding). In addition to rubrics, outcome-based goals are established for each individual based upon his/her specific role and priorities. Evaluation across both behavioral and outcome-based dimensions yields an overall performance assessment.
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We define a “promotion” as an increase in pay band linked to the proven ability to be successful in the next level of responsibility. Our structured promotion process takes place twice annually with promotions to all job levels including senior job levels occurring with our year-end cycle (October/November) and promotions to lower and middle job levels taking place with our mid-year cycle (April/May). This process supports an integrated approach yielding improved consistency in promotion decisions, including that all groups are representatively recognized.
With the rapid emergence of AI technologies, over the past year we have provided our people with access to leading AI tools, along with training and encouragement to use them. We have invested in a human resources-focused AI model that provides our employees with real-time access to best practice people management, leadership and other educational guidance, as well as concierge-style curating of company policy and program content. This model is designed to further bolster people management effectiveness by providing our employees with access to information and tools to help them succeed.
Succession Planning
Our Board spends considerable time each year reviewing CEO and key leadership succession and development plans. These discussions include an annual dedicated review of CEO succession, as well as discussions at multiple meetings, including in executive session as needed, regarding broader key leader succession, organizational health and scenario planning in the event of unexpected leadership changes. The Board also has regular and direct exposure to senior leadership and high potential officers through formal and informal avenues throughout the year. Beyond the C-suite, we actively assess talent across the organization to optimize deployment of resources, encourage professional development, drive accountability, and identify and take actions to mitigate undesired attrition risk. At the mid-point of each fiscal year, talent assessments are performed by people managers for each team member. These assessments include a mid-year performance rating and a leadership strength rating, the combination of which yields a Talent Management Score ranging from one to nine with recommended follow-up actions associated with each score. In addition, managers identify any significant attrition risks and underlying drivers and develop related mitigation plans. Finally, for each senior leader role, managers identify potential successor candidates along with targeted development needs to encourage readiness.
For vice president-level roles, the executive team plays a central role through a process we refer to as “Session C.” This process involves a detailed evaluation of each vice president incumbent using several tools including a personal biography written by the incumbent identifying key accomplishments, career growth aspirations, and champions that can articulate their contributions. In addition, managers complete a Leader Profile for each vice president incumbent highlighting key strengths, development progress over the past year, go-forward development plans, attrition risks and drivers, and succession insights. All of these materials are centrally reviewed and discussed by the executive team during a multi-day meeting. After discussing incumbent vice presidents, the executive team evaluates any proposed candidates for promotion to vice president using a combination of promotion recommendation forms prepared by the sponsoring manager, a 360-degree performance evaluation involving self-evaluation, manager evaluation, direct report evaluation, and insights gathered from key stakeholders. Candidates for vice president-level promotion are placed “on-deck” for a one- to three-year period for observation prior to any promotion decision being finalized. This approach drives high quality, consistent decisions while ensuring our highest potential candidates are properly developed and ready when promoted.
Compensation and Benefit Programs
We regularly participate in market-based compensation surveys, seek the advice of outside experts, and leverage new hire, peer equity, and undesired attrition trend data to ensure that our base pay and incentive structures are competitive. We create a strong sense of shared purpose by having our CEO and each member of our executive leadership team participate in the same annual cash incentive bonus design as all non-sales employees across our organization.
Beyond our structured promotion cycles, all compensation actions are determined in November following the conclusion of the year-end performance review process in October. This includes promotion and market-based base pay adjustments, annual bonus awards, and long-term incentive awards. This rewards-planning cycle ensures strong linkage between performance and rewards, and it allows for centralized review and refinement of reward recommendations leading to high quality and representative decisions.
Over the course of the past decade, we’ve steadily and significantly expanded participation in our annual performance-based equity program with approximately one-third of our workforce receiving an annual long-term incentive award in fiscal 2026. In addition, we offer an Employee Stock Purchase Plan for eligible employees, which is designed to promote even broader equity participation. Finally, top 5% performers are identified as part of our year-end performance review process and these individuals are awarded substantial “Extraordinary Impact” awards in the form of restricted stock units subject to one-year cliff vesting.
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We offer competitive health and welfare benefit plans with significant company subsidies to offset premiums, retirement plans with a competitive company match to encourage participation and flexible paid-time-off programs including vacation, sick time and disability time. We have paid Maternity and Parental Leave benefits totaling up to 12 weeks, and we have adopted a Well-Being Program designed to provide broad-based physical and mental health education and personal health coaching, as well as quarterly cash Wellness Awards designed to help employees fund wellness-related purchases which they find most valuable. In addition, we have a global Family Building Benefit program, which provides infertility, cryopreservation, surrogacy and adoption support services. In India, we have a Childcare Reimbursement program to assist parents of young children.
Promoting a Healthy and Safe Work Environment
We are committed to providing a safe and healthy workplace. We continuously strive to meet or exceed compliance with all laws, regulations and accepted practices pertaining to workplace safety. All employees and contractors are required to comply with established safety policies, standards, and procedures.
We foster a healthy work/life balance for our people including both remote and hybrid work location policies that provide significant flexibility surrounding work location and work schedules.
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INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Our executive officers as of September 30, 2026 were as follows:
| Name | Positions Held | Age | ||||||
| William J. Lansing | January 2012–present, Chief Executive Officer and President, and member of the Board of Directors of the Company. February 2009–November 2010, Chief Executive Officer and President, Infospace, Inc. 2004–2007, Chief Executive Officer and President, ValueVision Media, Inc. 2001–2003, General Partner, General Atlantic LLC. 2000–2001, Chief Executive Officer, NBC Internet, Inc. 1998–2000, President/Chief Executive Officer, Fingerhut Companies, Inc. 1996–1998, Vice President, Corporate Business Development, General Electric Company. 1996, Executive Vice President, Chief Operating Officer, Prodigy, Inc. 1987–1996, Partner, McKinsey & Company, Inc. | 68 | ||||||
| Steven P. Weber | May 2023–present, Executive Vice President, Chief Financial Officer of the Company. January 2023–May 2023, Vice President, Interim Chief Financial Officer of the Company. March 2021–January 2023, Vice President, Treasurer, Tax and Investor Relations of the Company. November 2010–March 2021, Vice President of Investor Relations and Treasurer of the Company. April 2003–November 2010, various positions with the Company. September 2001–April 2003, Senior Financial Analyst, Metris Companies. 1990–2001, various positions, Foodservice News. | 63 | ||||||
| Nikhil Behl | March 2025–present, President, Software of the Company. July 2024–March 2025, Executive Vice President, Software of the Company. August 2023–July 2024, Executive Vice President, Chief Marketing Officer of the Company. April 2014–August 2023, Vice President, Chief Marketing Officer of the Company. October 2013–April 2014, Consultant to the Company. February 2012–October 2013, Chief Executive Officer of Supplizer. August 2011–January 2012, Chief Executive Officer of Zoostores.com. July 2010–August 2011, Chief Executive Officer, Mercantila Business Unit of Infospace. 2007–2010, Chief Merchandising Officer of Mercantila. 1995–June 2007, various positions, including VP Sales & Operations and VP Sales & Customer Service, Home & Home Office Store of Hewlett Packard. | 52 | ||||||
| Thomas A. Bowers | August 2020–present, Executive Vice President, Corporate Strategy of the Company. September 2019–August 2020, Vice President, Business Consulting of the Company. April 2018–September 2019, Founder and Managing Partner, M Cubed Development, LLC. August 2012–March 2018, Executive Vice President, American Savings Bank. 1987–2012, Senior Partner and various positions, McKinsey & Company, Inc. | 71 | ||||||
| Richard S. Deal | November 2015–present, Executive Vice President, Chief Human Resources Officer of the Company. August 2007–November 2015, Senior Vice President, Chief Human Resources Officer of the Company. January 2001–August 2007, Vice President, Human Resources of the Company. 1998–2001, Vice President, Human Resources, Arcadia Financial, Ltd. 1993–1998, managed broad range of human resources corporate and line consulting functions with U.S. Bancorp. | 59 | ||||||
| Michael S. Leonard | November 2011–present, Vice President, Chief Accounting Officer of the Company. November 2007–November 2011, Senior Director, Finance of the Company. July 2000–November 2007, Director, Finance of the Company. 1998–2000, Controller of Natural Alternatives International, Inc. 1994–1998, various audit staff positions at KPMG LLP. | 61 | ||||||
| Mark R. Scadina | February 2009–present, Executive Vice President, General Counsel and Corporate Secretary of the Company. June 2007–February 2009, Senior Vice President, General Counsel and Corporate Secretary of the Company. 2003–2007, various senior positions including Executive Vice President, General Counsel and Corporate Secretary, Liberate Technologies, Inc. 1999–2003, various leadership positions including Vice President and General Counsel, Intertrust Technologies Corporation. 1994–1999, Associate, Pennie and Edmonds LLP. | 57 | ||||||
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Item 1A. Risk Factors
Business, Market and Strategy Risks
Our ability to increase our revenue depends, in part, on our ability to successfully develop and introduce new products and services, enhance and improve our existing offerings, and expand into new markets. If we are unable to successfully develop and commercialize new, enhanced, or improved products and services, or if the marketplace does not adopt or accept these offerings, our business, financial condition, and results of operations could be adversely affected. In addition, any defects, failures, disruptions, or delays associated with the development, launch, or performance of new, enhanced, or improved products and services could harm our reputation, customer relationships, and business.
Our revenue growth and the success of our business strategy depend on our ability to enhance and improve existing products and services, including FICO® Platform, and to continue to introduce new products and services that keep pace with technological developments, satisfy increasingly sophisticated customer requirements, and achieve market acceptance. Our revenue growth and strategy success also depend on our ability to adopt new software engineering technologies and processes, including AI-based software design and development platforms. If we are unable to develop new, enhanced, or improved products and services, or to adopt new software engineering technologies and processes, particularly those that utilize AI technologies, or if we are not successful in introducing such products and services, or in deploying such technologies and processes, we may not be able to grow our business or growth may occur more slowly than we anticipate. In addition, significant undetected errors, defects, or delays in new products or new versions of existing products could adversely affect market acceptance of our products and harm our business, financial condition, or results of operations. In the past, we have experienced delays in developing and introducing new products and product enhancements, primarily due to difficulties developing models, acquiring data, and adapting our products to particular software operating environments and certain client or other systems. We have also identified errors or “bugs” in our software products, despite testing prior to release of the products. These errors, defects, or compatibility issues could negatively impact the performance of our products, delay the development or release of new products or enhancements, and adversely affect market acceptance of our products. Errors or defects in our products that are significant, or that are perceived to be significant, could result in rejection of our products, damage to our reputation, loss of revenues, diversion of development resources, an increase in product liability claims, and increases in service and support costs and warranty claims. Additionally, our use of AI in the development of our products and our incorporation of AI features into some of our products could introduce errors, defects, or delays impacting our ability to successfully develop new products.
We also believe that much of the future growth of our business and the success of our business strategy depends on our ability to continue to expand into newer markets for our products and services. Such areas are relatively new to our product development and sales and marketing personnel. Products and services that we plan to market in the future are in various stages of development. If these newer markets are not willing to adopt our products and services, either as a result of the quality of these products and services or due to other factors, such as economic conditions, our revenues may decrease.
We are subject to significant competition in the markets in which we operate, and our products and pricing strategies, and those of our competitors, could decrease our product sales and market share.
Demand for our products and services may be sensitive to changes in our products and pricing, and our product and pricing strategies may not be accepted by the market. If our customers fail to accept our product and pricing strategies, our revenues, results of operations, and business may suffer. The market for our solutions is intensely competitive and is constantly changing, and we expect competition to persist and intensify. Our regional and global competitors vary in size and in the scope of the products and services they offer, and include:
•in-house data science and systems developers;
•developers and providers of large language models, machine learning, and AI systems;
•fraud solutions providers;
•scoring model builders;
•providers of credit reports and credit scores, including consumer reporting agencies;
•software companies supplying machine learning modeling, rules, or AI development tools;
•entity resolution and social network analysis solutions providers;
•providers of customer engagement and risk management solutions;
•providers of account workflow management software;
•business process management and intelligent decisioning platform providers;
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•enterprise resource planning and customer relationship management solutions providers;
•business intelligence solutions providers;
•providers of automated application processing services; and
•third-party professional services and consulting organizations.
We expect competition from both established and emerging companies to continue to increase. This competition may include our customers developing their own scoring models or other products, including through the use of AI-based offerings, which could eliminate or reduce their purchases of our products and services. For example, our Scores segment faces competition from other credit score models, including VantageScore, which has experienced increased regulatory acceptance in the U.S. mortgage market. VantageScore is a product of a joint venture of TransUnion, Equifax, and Experian, the three major consumer reporting agencies from which we have historically derived a substantial portion of our revenues. We also face competition from other technologies, particularly with respect to AI-based offerings. For example, certain of our fraud solutions products compete against other methods of preventing payment card fraud, and our analytics and decisioning products increasingly compete against products from large language model developers.
Many of our existing and potential competitors have greater financial, technical, marketing, professional services and other resources than we do, and industry consolidation is creating even larger competitors in many of our markets. As a result, our competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements. They may also be able to devote greater resources than we can to develop, promote, and sell their products. Many of these competitors have long-standing or broad customer relationships, including with many of our current and prospective customers. In addition, new competitors or alliances among competitors may emerge and rapidly gain significant market share. If we are unable to respond as quickly or effectively to changes in customer requirements as our competition, our ability to expand our business and sell our products could be adversely affected.
Our competitors may offer existing or new products that compete with our products at lower prices, either on a standalone basis or as part of integrated product suites. As a result, our customers may purchase competing products instead of ours, which could decrease our sales and market share. Competitive pricing pressure may also require us to reduce our prices in a manner that negatively impacts our margins and could also harm our ability to obtain new long-term contracts and renewals of existing long-term contracts on favorable terms.
The ability to use a competing credit score model in the U.S. mortgage market, including by Fannie Mae and Freddie Mac, has, and could continue to have, a material adverse effect on our stock price, and if use of the FICO® Score in the U.S. mortgage market were to cease or decline, it could have a material adverse effect on our revenues, results of operations, and stock price.
A significant portion of our revenues in our Scores segment is attributable to the U.S. mortgage market. Historically, for mortgages eligible for purchase by The Federal National Mortgage Association (“Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“Freddie Mac”), those enterprises (“Enterprises”) required that U.S. lenders provide FICO® Scores for each mortgage delivered to them. However, the continued use of the FICO Score for those mortgages is subject to ongoing validation and approval by the Enterprises and the Federal Housing Finance Agency (“FHFA”), and is subject to competing credit score models. For example, following an announcement by the FHFA in July 2025 that the Enterprises would be adopting a so-called “lender choice” regime allowing lenders to choose between a FICO Score or VantageScore, a competing credit score model, the FHFA announced in April 2026 that the Enterprises would accept VantageScore from approved lenders and further announced in September 2026 that the Enterprises would accept VantageScore from all lenders. Also, in April 2026, the U.S. Department of Housing and Urban Development (“HUD”) announced that, beginning January 1, 2027, the Federal Housing Administration (“FHA”) would, in addition to the Classic FICO® Score, permit the use of VantageScore and the latest version of our FICO Score, FICO® Score 10T, for FHA-insured mortgages. In the months following these announcements by the FHFA and HUD, our stock price has declined significantly, and it could continue to decline due to these or other announcements, or due to any increased use, or perceived increased use, of VantageScore over FICO Scores in the mortgage market.
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It is difficult to predict the extent to which VantageScore will be adopted and used relative to FICO Scores for mortgages. Increased adoption and use of VantageScore or other competing credit score models could have a material adverse effect on our revenues and results of operations, and could continue to have a material adverse effect on our stock price. Other changes implemented by HUD, FHA, FHFA, or the Enterprises could also adversely affect the demand for FICO Scores and thus could have similar adverse effects. Further, if other credit score models are approved and adopted for use with mortgages delivered to the Enterprises, or for use with mortgages subject to other government programs, or if the FICO Score is not approved for continued use with those mortgages, it could have a material adverse effect on our revenues. The ability of our FICO Score to compete effectively in the U.S. mortgage market may also be constrained by delays by any of the foregoing entities in adopting the latest versions of our FICO Score or in supporting our newer distribution models, including the FICO® Mortgage Direct License Program we announced in October 2025, or by the pricing, distribution, and other business practices of the consumer reporting agencies, all of which could have a material adverse effect on our revenues, results of operations, and stock price.
We derive a substantial portion of our revenues from a small number of products and services, and if the market does not continue to accept these products and services, our revenues may decline.
We expect that revenues derived from our scoring solutions, fraud solutions, customer communication services, customer management solutions, and decision management software, and their corresponding capabilities when enabled on FICO Platform, will continue to account for a substantial portion of our total revenues for the foreseeable future. Our revenues may decline if the market does not continue to accept these products and services. Factors that might affect the market acceptance of these products and services include the following:
•changes in the business analytics industry;
•changes in technology, including increased use of artificial intelligence (“AI”) and market disruption caused by AI-based offerings;
•our inability to obtain or use key data for our products;
•saturation or contraction of market demand;
•loss of key customers;
•industry consolidation;
•failure to successfully adopt cloud-based or AI technologies;
•our inability to obtain regulatory approvals for our products and services, including credit score models;
•the availability, acceptance and increased use of competing credit score models;
•the increasing availability of free or relatively inexpensive consumer credit, credit score, and other information from public or commercial sources, including those that use AI technologies;
•failure to execute our selling approach;
•failure to establish additional or expanded distribution channels, including through third-party partners and distributors, for our products and services; and
•inability to successfully sell our products in new vertical markets.
We may not be successful in executing the business strategy for our Software segment, which could cause our growth prospects and results of operations to suffer.
We continue to focus our Software segment’s business strategy on investing significant development resources to develop and enhance, and to enable substantially all of our software capabilities to run on, FICO® Platform, our modular software offering designed to enable advanced analytics and decisioning use cases. This business strategy is designed to enable us to increase our business by selling multiple connectable and extensible products to clients, and to allow our clients to more easily expand their usage and the use cases they enable over time. The market may be unreceptive to our general business approach, including being unreceptive to our cloud-based offerings or unreceptive to purchasing multiple products from us. As we continue to pursue this business strategy, we may experience volatility in our Software segment’s revenues and operating results caused by various factors, including customer timing and adoption risk with respect to FICO Platform, the timing of investments and other expenditures necessary to develop and operate our cloud-based offerings, and the adoption of new sales, delivery, and distribution methods. If this business strategy is not successful, we may not be able to grow our Software segment’s business, growth may occur more slowly than we anticipate, or revenues and profits may decline.
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We rely on relatively few customers, including our contracts with the three major consumer reporting agencies, for a significant portion of our revenues and profits. Many of our customers are significantly larger than we are and may have greater bargaining power, which could negatively impact the terms of our commercial agreements. In addition, the businesses of our largest customers depend, in large part, on favorable macroeconomic conditions. If these customers experience adverse business conditions, reduce their spending, renegotiate or terminate our agreements, or the terms of these relationships otherwise change, our revenues and operating results could be adversely affected.
Most of our customers are relatively large enterprises, such as banks, credit card issuers, insurers, retailers, telecommunications providers, automotive lenders, consumer reporting agencies, public agencies, and organizations in other industries. As a result, many of our customers and potential customers are significantly larger than we are and may have sufficient bargaining power to demand reduced prices and favorable nonstandard terms.
In addition, the U.S. and other key international economies periodically experience economic downturns and periods of heightened uncertainty, which may result in reduced demand for goods and services, increased volatility of interest rates, fluctuating rates of inflation, geopolitical tensions, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, trade policies and tariffs, equity and foreign exchange markets, bankruptcies, and overall uncertainty with respect to the economy. The potential for economic disruption presents considerable risks to our business, including potential bankruptcies or credit deterioration of financial institutions with which we have substantial relationships. Economic disruption could adversely affect demand for our products and services, resulting in a decline in the sales of new products to our customers and a reduction in transaction volumes from existing customers. In addition, the volume of our Scores sales depends heavily on macroeconomic conditions in the markets in which our customers operate. For example, the volume of transactions in the U.S. mortgage and credit card markets, which account for a significant portion of the revenues in our Scores segment, may be adversely affected by economic conditions.
We also derive a substantial portion of our Scores segment revenues and operating income from our contracts with the three major consumer reporting agencies in the U.S., Experian, TransUnion, and Equifax, as well as other parties that distribute our products to certain markets. The loss of, or a significant change in, our relationship with one of these consumer reporting agencies, including with respect to their distribution of our products or our myFICO® offerings, or with a major customer or third-party distributor (including payment card processors), or the loss of or delay of significant revenues from these sources, could have a material adverse effect on our revenues and results of operations.
Our revenues depend, to a great extent, upon conditions in the banking (including consumer credit) industry. If our clients’ industry experiences uncertainty, demand for our products and services could decline and could adversely impact our business, financial condition, or results of operations.
During fiscal 2026, 92% of our revenues were derived from sales of products and services to the banking industry. Periods of global economic uncertainty historically have produced substantial stress, volatility, illiquidity, and disruption of global credit and other financial markets, including the bankruptcy, acquisition, or government assistance related to certain major domestic and international financial institutions. The potential for future stress and disruptions, including in connection with geopolitical tensions, military conflicts, trade policies and tariffs, inflationary pressures, and interest rate volatility, presents considerable risks to our businesses and operations. These risks include potential bankruptcies or credit deterioration of financial institutions, many of which are our customers. Such disruption would result in a decline in the revenue we receive from financial and other institutions. In addition, if consumer demand for financial services and products and the number of credit applications decrease, including due to interest rate changes or other factors, the demand for our products and services could also be materially reduced. These types of disruptions could lead to a decline in the volumes of products and services we provide our customers and could negatively impact our revenue and results of operations.
While the rate of account growth in the U.S. banking industry has been slow, we have generated most of our revenue growth in the banking industry by selling and cross-selling our products and services to large banks and other credit issuers. If the banking industry experiences contraction in the number of participating institutions, we may have fewer opportunities for revenue growth due to reduced or changing demand for our products and services that support customer-facing programs of our customers. In addition, industry contraction could affect the base of recurring revenues derived from contracts in which we are paid on a per-transaction basis as formerly separate customers combine their operations under one contract. There can be no assurance that we will be able to prevent future revenue contraction or effectively promote future revenue growth in our businesses.
While we expand our sales into international markets, the risks are greater as some of these markets have experienced and may in the future experience substantial disruption and we are less well-known in them.
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We rely on relationships with third parties for technologies used in our products, and for marketing, distribution, deployment, and certain other services. If we experience difficulties in these relationships, including competition from these third parties, our future revenues may be adversely affected.
Our business relies on third-party technologies and service providers throughout the product lifecycle, from development to deployment to customers. In addition, we rely on distributors, resellers, or partners to market and distribute our products and we expect to continue expanding these relationships. We have recently expanded certain third-party relationships, including those related to product distribution activities and strategic product collaborations, and we intend to continue to invest in additional marketing, distribution, and other relationships, which may not be successful or may lead to operational, transitional, or other disruptions.
Failure of our existing or future technology suppliers to provide their products effectively or to perform their obligations as agreed could have a material adverse effect on our business, operating results, and financial condition. Failure of our existing or future distributors, resellers, or partners to generate significant revenues or otherwise perform their expected services or functions, demands by such distributors, resellers, or partners to change the terms on which they offer our products, or our failure to establish additional distribution, sales, and marketing relationships, could have a material adverse effect on our business, operating results, and financial condition. In addition, certain of our distributors, resellers, and partners currently compete with us and may compete with us in the future, either by developing competitive products themselves or by distributing competitive offerings. For example, our Scores segment relies on, among others, Experian, TransUnion, and Equifax for the distribution of certain products, and Experian, TransUnion, and Equifax have developed and are actively selling VantageScore to compete directly with our products. Competition from distributors, resellers, or other sales and marketing partners could materially adversely affect demand for our products and services.
In addition, due to our increasing reliance on third-party technology associated with our product development lifecycle, the failure of these relationships to have the results we expect or desire could have a material adverse effect on our business, operating results, and financial condition. Our strategic partnerships and other collaborations may not be successful, negatively impacting our sales and margins.
We rely upon proprietary technology rights, and if we are unable to protect them, our business could be harmed.
Our success depends, in part, upon our proprietary technology and other intellectual property rights. To date, we have relied primarily on a combination of copyright, patent, trade secret, and trademark laws, and nondisclosure and other contractual restrictions on copying and distribution, to protect our proprietary technology. These protections are limited, and our proprietary technology could be used by others without our consent. In addition, patents may not be issued with respect to our pending or future patent applications, and our issued patents may not be upheld as valid or may not prevent the development of competitive products. Any disclosure, loss, invalidity of, or failure to protect our intellectual property could negatively impact our competitive position and adversely affect our business. The extent to which our intellectual property rights can be protected differs by jurisdiction, and is rapidly evolving with respect to AI technologies. There can be no assurance that our protection of our intellectual property rights in the U.S. or abroad will be adequate or that others, including our competitors, will not use our proprietary technology without our consent. Furthermore, litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of resources and could harm our business, financial condition, or results of operations.
Some of our technologies were developed under research projects conducted under agreements with various U.S. government agencies or subcontractors. Although we have commercial rights to these technologies, the U.S. government typically retains ownership of intellectual property rights and licenses in the technologies developed by us under these contracts, and in some cases can terminate our rights in these technologies if we fail to commercialize them on a timely basis. Under these contracts with the U.S. government, the results of research may be made public by the government, limiting our competitive advantage with respect to future products based on our research.
If we fail to keep up with rapidly changing technologies, our products could become less competitive or obsolete.
In our markets, technology changes rapidly, and there are continuous improvements in computer hardware, network operating systems, programming tools, database technologies, cloud-based technologies, AI-based offerings, and the use of the Internet. For example, AI technologies, including generative and agentic AI, and their use are currently undergoing rapid change. If we fail to enhance our current products and develop new products in response to changes in technology or industry standards, or if we fail to bring product enhancements or new product developments to market quickly enough, our products could rapidly become less competitive or obsolete. Our future success will depend, in part, upon our ability to:
•innovate by internally developing new and competitive technologies;
•use leading third-party technologies effectively;
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•continue to develop our technical expertise;
•anticipate and effectively respond to changing customer needs;
•initiate new product introductions in a way that minimizes the impact of customers delaying purchases of existing products in anticipation of new product releases; and
•influence and respond to emerging industry standards and other technological changes, including relating to AI.
Our reengineering efforts may adversely affect our growth prospects and profitability.
As part of our management approach, we pursue ongoing reengineering efforts designed to grow revenues through strategic resource allocation and improve profitability through cost reductions. These efforts may not be successful over the long term should we fail to reduce expenses or increase revenues to anticipated levels or at all. These efforts may also require us to make cash payments and incur charges, such as our recent plan of workforce reduction pursuant to which we incurred pre-tax charges of $27.3 million in the fourth quarter of fiscal 2026, substantially all of which are expected to result in future cash expenditures. If our reengineering efforts are not successful over the long term, our revenues, results of operations, and business may be adversely affected.
If we are unable to access new markets or develop new sales and distribution channels, our business and growth prospects could be adversely affected.
We expect our future growth to depend, in part, on the sale of products and service solutions in industries and markets we do not currently serve. We also expect to grow our business by delivering our solutions through additional sales and distribution channels. If we fail to penetrate these industries and markets to the degree we anticipate, or if we fail to develop additional sales and distribution channels, we may not be able to grow our business, growth may occur more slowly than we anticipate, or our revenues and profits may decline.
Our acquisition activities may disrupt our ongoing business and may involve increased expenses, and we may not realize the financial and strategic goals contemplated at the time of a transaction.
We have acquired, and may in the future acquire, companies, businesses, products, services, and technologies. Acquisitions involve significant risks and uncertainties, including:
•our ongoing business may be disrupted and our management’s attention may be diverted by acquisition, transition, or integration activities;
•an acquisition may not further our business strategy as we expected, we may not successfully integrate acquired operations, systems, or technology, we may overpay for our investments, or we may otherwise fail to realize expected returns, which could adversely affect our business or operating results;
•we may be unable to retain the key employees, customers, and other business partners of the acquired operation;
•we may have difficulties entering new markets where we have no or limited direct prior experience or where competitors may have stronger market positions;
•our operating results or financial condition may be adversely impacted by known or unknown contingent liabilities, other liabilities, or claims we assume in an acquisition or that are imposed on us as a result of an acquisition, including claims by government agencies or authorities, terminated employees, current or former customers, former stockholders, or other third parties;
•we could incur material charges in connection with the impairment of goodwill or other assets that we acquire;
•a company that we acquire may have experienced a security incident that it has yet to discover, investigate, and remediate, may have other cybersecurity vulnerabilities, or may have unsophisticated security measures, any of which we might not identify in a timely manner and which could spread more broadly to other parts of our company during the integration effort;
•we may incur material charges as a result of acquisition activities or costs incurred in combining and/or operating the acquired business that are greater than anticipated;
•we may not realize the anticipated increase in our revenues from an acquisition for a number of reasons, including if a larger than predicted number of customers decline to renew their contracts, if we are unable to incorporate the acquired technologies or products with our existing product lines in a uniform manner, if we are unable to sell the acquired products to our customer base or if contract models of an acquired company or changes in accounting treatment do not allow us to recognize revenues on a timely basis;
•our use of cash to pay for acquisitions may limit other potential uses of our cash, including stock repurchases, and retirement of outstanding indebtedness; and
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•to the extent we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease.
Because acquisitions are inherently risky, our transactions may not be successful and may have a material adverse effect on our business, results of operations, financial condition, or cash flows. Acquisitions of businesses having a significant presence outside the U.S. will increase our exposure to the risks of conducting operations in international markets.
There can be no assurance that strategic divestitures will provide business benefits.
As part of our strategy, we continuously evaluate our portfolio of businesses. As a result of these reviews, we have made decisions to divest certain products and lines of business, and we may do so again in the future. These divestitures involve risks, including:
•disruption of our operations or businesses;
•reductions of our revenues or earnings per share;
•difficulties in the separation of operations, services, products, and personnel;
•failure to effectively transfer liabilities, contracts, facilities, and employees to a purchaser;
•divestiture terms that contain potential future purchase price adjustments or require that assets or liabilities be divested, managed, or run off separately;
•diversion of management's attention from our other businesses;
•the potential loss of key personnel;
•adverse effects on relationships with our customers, suppliers, or their businesses;
•the erosion of employee morale or customer confidence; and
•the retention of contingent liabilities and the possibility that we will become subject to third-party claims related to the divested business.
If we do not successfully manage the risks associated with divestitures, our business, financial condition, and results of operations could be adversely affected as the potential strategic benefits may not be realized or may take longer to realize than expected.
Our revenues, results of operations and overall financial performance may be negatively impacted by health epidemics or other disease outbreaks.
Our customers, and therefore our business and revenues, are sensitive to negative changes in general economic conditions and lending activities. Health epidemics or disease outbreaks could impact the rate of spending on our solutions and could adversely affect our customers’ ability or willingness to purchase our products and services, cause prospective customers to change product selections or term commitments, delay or cancel their purchasing decisions, extend sales cycles, and potentially increase payment defaults, all of which could adversely affect our future revenues, results of operations, and overall financial performance.
Operational Risks
If our cybersecurity measures are compromised or unauthorized access to customer or consumer data is otherwise obtained, our products and services may be perceived as not being secure, customers may curtail or cease their use of our products and services, our reputation may be damaged, and we could incur significant liabilities.
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Because our business involves the storage, transmission, and utilization of sensitive consumer and customer information, we routinely face cybersecurity and other security threats by technically sophisticated and well-resourced outside third parties, among others, attempting to access or steal the data we store. Many of our products are provided through the Internet. We are exposed to additional cybersecurity threats as we continue to migrate our software solutions and data from our legacy systems to cloud-based solutions, and as we increase the use of AI in our operations and solutions. We operate in an environment of significant risk of cybersecurity incidents resulting from unintentional events or deliberate attacks by third parties or insiders, which may involve exploiting security vulnerabilities or sophisticated attack methods. These threats include social engineering attacks, phishing attacks, state-sponsored cyber-attacks, AI-generated attacks, industrial espionage, insider threats, denial-of-service attacks, computer viruses, ransomware and other malware, payment fraud, or other cyber incidents. Advances in AI technology can allow for even minor security vulnerabilities to be detected and exploited by bad actors faster and in ways that existing industry-standard cybersecurity tools were not designed to detect and remediate. As a software and technology vendor, we may incorporate or distribute software or other materials from third parties. Attacks or other threats to our supply chain for such software and materials may impair our ability to verify the origin of such software and materials, and could result in our distribution of software or other materials that may cause harm to ourselves, our customers, or other third parties. In addition, increased attention on and use of AI technologies increase the risk of supply chain threats, cyber-attacks, and data breaches, which can occur more quickly, evolve more rapidly and become more sophisticated when AI is used. Further, the use of AI by our employees, whether authorized or unauthorized, increases the risk of inadvertent disclosure of our intellectual property and other proprietary information.
Cybersecurity breaches, including those that impact our third-party vendors and other security providers, could expose us to a risk of loss, the unauthorized disclosure of consumer or customer information, significant litigation, regulatory fines, penalties, loss of customers or reputational damage, indemnity obligations, and other liability. There can be no assurance that the programs, technologies, and processes that we have implemented in an effort to maintain the security and protection of our non-public information and that of our customers will be fully implemented, complied with, or effective. If our cybersecurity measures are breached as a result of third-party action, employee error, malfeasance or otherwise, resulting in unauthorized access to our systems or to consumer or customer information, sensitive data may be accessed, stolen, disclosed, or lost, our reputation may be damaged, our business may be adversely affected, and we could incur significant liability. Because the techniques used to obtain unauthorized access, disable or degrade service, or to sabotage systems change frequently and generally are not recognized until launched against a target, or even for some time after, we may be unable to anticipate these techniques, implement adequate preventative or detection measures, or remediate any cybersecurity incident on a timely or effective basis. In addition, a successful breach of our computer systems, software, networks, or other technology assets could remain undetected for an extended period of time, delaying our ability to contain the incident, mitigate its effects, and address the consequences.
Malicious third parties may conduct attacks designed to deny us, our customers, distributors, and vendors access to our systems and services, including through ransomware or other extortion-based attacks, and may demand payment to restore access or prevent the disclosure of sensitive information. Cybersecurity breaches affecting our vendors, distributors, customers, acquired companies, or us may trigger governmental notice requirements and public disclosures, resulting in negative publicity, regulatory investigations or enforcement actions, statutory damages, litigation by individuals or other parties, and other liabilities. We may also be affected by cybersecurity breaches experienced by customers that use our products on-premises, and those breaches may occur due to factors outside our control, including a customer’s failure to timely install updates and fixes to our products, vulnerabilities in a customer’s own cybersecurity measures, and other factors. Any cybersecurity breach, whether actual or perceived, could harm our reputation, erode customer confidence in the effectiveness of our security measures, negatively impact our ability to attract new customers, cause existing customers to curtail or cease their use of our products and services, cause regulatory or industry changes that impact our products and services, or subject us to third-party lawsuits, regulatory fines, or other action or liability, all of which could materially and adversely affect our business and operating results.
If we experience business interruptions or failure of our information technology and communication systems, the availability of our products and services could be interrupted which could adversely affect our reputation, business, and financial condition.
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Our ability to provide reliable products and services to our customers depends on the efficient and uninterrupted operation of our data centers, information technology, and communication systems, as well as those of our external service providers. Any disruption of or interference with our use of data centers, information technology, or communication systems of our external service providers could adversely affect our operations and our business. As our Software segment’s business continues to grow, our dependence on the continuing operation and availability of these systems increases. Our systems and data centers, and those of our external service providers, could be exposed to damage or interruption. These interruptions can include software or hardware malfunctions, communication failures, critical infrastructure failure, outages or other failures of third-party environments or service providers, or be due to defective updates, fires, floods, earthquakes, other extreme weather events or natural disasters, pandemics, war, terrorist acts or civil unrest, power losses, equipment failures, supply chain disruptions, computer viruses, denial-of-service or other cybersecurity attacks, employee or insider malfeasance, human error, and other events beyond our control. Any steps that we or our external service providers have taken to prevent or reduce disruption may not be sufficient to prevent an interruption of services and disaster recovery planning may not account for all eventualities.
An operational failure or outage in any of these systems, or damage to or destruction of these systems, that disrupts our services could result in loss of customers, damage to customer relationships, reduced revenues and profits, refunds of customer charges, and damage to our brand and reputation. Such events may also require us to incur substantial additional expense to repair or replace damaged equipment and recover any resulting data loss. Any one or more of the foregoing events could have a material adverse effect on our reputation, business, financial condition, cash flows, and results of operations.
The failure to recruit and retain qualified personnel could hinder our ability to successfully manage our business.
Our business strategy and future success depend, in large part, on our ability to attract and retain experienced sales, marketing, product management, software engineering, data science, AI, consulting, customer experience, and management personnel. The labor market for these individuals, particularly in the complex disciplines of enterprise platform sales, software engineering, data science, AI, and cybersecurity, is very competitive due to the limited availability of personnel with the necessary skills and understanding to build, sell, and support our complex products and it may become more competitive with general market growth. We cannot be certain that our compensation strategies will be perceived as competitive by current or prospective employees. This and other competitive factors could impair our ability to recruit and retain personnel. We have experienced difficulty in the past in recruiting and retaining qualified personnel, particularly in these intensely competitive and technical skill areas, and we may experience similar challenges in the future. These challenges may be heightened at times when we may need additional staff to support expanded research and development efforts, new customers, and/or increased customer needs. We may also recruit skilled technical professionals from other countries to work in the U.S., and from the U.S. and other countries to work abroad. Limitations imposed by current and changing immigration laws in the U.S. and abroad, and the availability of visas in the countries where we do business, could hinder our ability to attract and retain necessary qualified personnel and adversely affect our business and future operating results. There is a risk that, even if we invest significant resources in attempting to attract, train, and retain qualified personnel, we may not succeed in our efforts, which could harm our business. In addition, a decline in our stock price, such as we have recently experienced and may continue to experience, may adversely affect our ability to attract, retain, and motivate personnel, and may limit our ability to use equity and equity-based incentive plans for such purposes, potentially requiring us to use alternative forms of compensation.
The failure to obtain certain forms of data from our customers or others for our use in product development could harm our business.
Our business requires that we develop or obtain reliable sources of sufficient amounts of current and statistically relevant data to analyze transactions and update some of our products. In most cases, this data must be periodically updated and refreshed to enable our products to continue to work effectively in a changing environment. We do not own or control much of the data that we require, which is generally collected by third parties and maintained in proprietary databases. Customers and key business partners provide us with the data we require to analyze transactions, report results, and build new models. Our business strategy depends, in part, on our ability to access additional sources and types of data to develop custom and proprietary analytic tools. If we fail to maintain sufficient data sourcing relationships with our customers and business partners, or if they decline to provide such data due to privacy, security, competitive, or regulatory concerns, or prohibitions or a lack of permission from their customers or partners, we could lose access to required data, which could impair our ability to develop, maintain, and enhance our products. If this were to happen, our development of new products might become less effective. We could also become subject to increased legislative, regulatory, or judicial restrictions or mandates on the collection, disclosure, transfer, or use of such data, particularly if such data is not collected by our providers in a manner that allows us to legally use the data. Third parties have asserted copyright and other intellectual property interests in this data, and these assertions, if successful, could prevent us from using this data. We may not be successful in maintaining our relationships with these external data source providers or in continuing to obtain data from them on acceptable terms or at all. Any interruption of our supply of data could materially adversely affect our business, financial condition, or results of operations.
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Legal, Regulatory and Compliance Risks
Increased industry and regulatory focus on U.S. residential mortgage closing costs may limit our ability to implement price changes for FICO® Scores used in mortgage originations and thus limit the revenues and profitability of the FICO Score. If new laws, regulations, or other governmental action affecting the FICO Score or our other products, services, and solutions are implemented or carried out, it could adversely affect our business and results of operations.
There has been increased industry and regulatory focus in the U.S. related to the transparency and fairness of certain fees charged to consumers in connection with the closing of a residential mortgage loan, including fees for credit reports and credit scores. If new laws, regulations, or other governmental action limit the fees that can be charged for credit scores by us, consumer reporting agencies, or end users of our FICO® Scores, or impose other restrictions on the sale or distribution of credit scores, our ability to increase pricing for FICO Scores used in mortgage originations may be limited. Such limitations could adversely affect the revenues and profitability of the FICO Score and constrain the growth of our Scores business.
There has also been, and may continue to be, focus more broadly on laws and regulations in the U.S. related to our Scores business and the business of consumer reporting agencies, including by U.S. state and federal regulators, relating to policy concerns with regard to the operation of consumer reporting agencies, the sale and distribution of credit scores and credit reports, the use and accuracy of credit and alternative data, the use of credit scores and fair lending, and the use, transparency, and fairness of algorithms, AI, machine learning, and automated decision-making technology in business processes. The costs and other burdens of compliance with such laws and regulations, and with new or revised laws and regulations that may be implemented addressing these topics, could adversely impact the use and adoption of our solutions, reduce overall demand for them, and harm our business, financial condition, or results of operations.
Laws and regulations in the U.S. and abroad that apply to us and/or to our customers may expose us to liability, cause us to incur significant expense, affect our ability to compete in certain markets, limit the profitability of or demand for our products, or render our products obsolete. If these laws and regulations require us to change our products and services, it could adversely affect our business and results of operations. New legislation or regulations, or changes to existing laws and regulations, may also negatively impact our business and increase our costs of doing business.
Laws and governmental regulations affect how our business is conducted and, in some cases, subject us to the possibility of government supervision or enforcement and future lawsuits arising from our products and services. Laws and governmental regulations also influence our current and prospective customers’ activities, as well as their expectations and needs in relation to our products and services, and may require them to impose additional contractual obligations on us, exercise greater oversight, and perform more rigorous audits of their key service providers, including us. Laws and regulations in the U.S. and abroad that may affect our business and/or our current and prospective customers’ activities include, but are not limited to, those in the following significant regulatory areas:
•Privacy and security laws and regulations that limit the use and disclosure, require security procedures, or otherwise apply to the collection, processing, storage, use, and transfer of personal data of individuals (e.g., the U.S. Financial Services Modernization Act of 1999, also known as the Gramm Leach Bliley Act; U.S. state security breach notification laws and privacy laws; and the data protection laws of other countries such as the General Data Protection Regulation (the “GDPR”) in the European Union (“E.U.”) and the United Kingdom (“U.K.”));
•Laws and regulations relating to the privacy, security, and transmission of protected health information of individuals, including the Health Insurance Portability and Accountability Act of 1996, as amended by the American Recovery and Reinvestment Act of 2009 (“HIPAA”), and the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and their respective implementing regulations;
•Laws and regulations relating to the development, provision, and use of AI and automated decision-making technologies (e.g., the EU AI Act and U.S. state AI laws);
•Financial regulatory reform stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the many regulations mandated by that Act, including regulations issued by, and the supervisory and investigative authority of, the Consumer Financial Protection Bureau (“CFPB”) with respect to enumerated federal consumer financial laws and unfair, deceptive, or abusive acts or practices (“UDAAP”);
•The application or extension of consumer protection laws, including implementing regulations (e.g., the Consumer Financial Protection Act, the Federal Trade Commission Act, the Truth In Lending Act and Regulation Z, the Fair Debt Collection Practices Act and Regulation F, the Servicemembers Civil Relief Act, the Military Lending Act, and the Credit Repair Organizations Act, and similar state consumer protection laws);
•Use of data by creditors and consumer reporting agencies (e.g., the U.S. Fair Credit Reporting Act and similar state laws);
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•Special requirements that may apply when we provide products or services directly or indirectly to U.S. federal, state, and local government agencies (e.g., the Privacy Act of 1974, the Internal Revenue Service’s Publication 4812, and the Federal Acquisition Regulation);
•Laws and regulations that limit the use of credit scoring models (e.g., state “mortgage trigger” or “inquiries” laws, state insurance restrictions on the use of credit-based insurance scores, and the E.U. Consumer Credit Directive);
•Fair lending laws (e.g., the Equal Credit Opportunity Act and Regulation B, and the Fair Housing Act) and laws and regulations that may impose requirements relating to algorithmic fairness or accountability;
•Data and cybersecurity laws and regulations, including: the Cybersecurity Act of 2015; the U.S. Department of Commerce’s National Institute of Standards and Technology’s Cybersecurity Framework; the Clarifying Lawful Overseas Use of Data Act; cyber incident notice requirements for banks and their service providers under rules and regulations issued by federal banking regulators; cybersecurity incident disclosure requirements for public companies under regulations issued by the SEC; and identity theft, file freezing, and similar state privacy laws;
•Laws and regulations that apply to technology services and cloud-hosted services, and related digital and cyber resiliency, operational continuity, and data processing requirements, including contract termination rights (e.g., the EU Digital Operational Resilience Act, the EU Cyber Resilience Act, and the EU Data Act);
•Laws and regulations related to extension of credit to consumers through the Electronic Fund Transfers Act and Regulation E, as well as non‑governmental VISA and MasterCard electronic payment standards;
•Laws and regulations applicable to secondary market participants (e.g., Fannie Mae and Freddie Mac) that could have an impact on our scoring products and revenues, including 12 CFR Part 1254 (Validation and Approval of Credit Score Models) issued by the FHFA in accordance with Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174), and any regulations, standards, or criteria established pursuant to such laws or regulations, including the ongoing validation and approval of the use of the FICO® Score by Fannie Mae, Freddie Mac, and the FHFA;
•Laws and regulations applicable to our clients and their use of our customer communication services (e.g., the Telemarketing Sales Rule, Telephone Consumer Protection Act, the CAN-SPAM Act, the Fair Debt Collection Practices Act, and regulations promulgated thereunder, and similar state laws and similar laws in other countries);
•Laws and regulations applicable to our insurance clients and their use of our insurance products and services;
•Laws and regulations governing the use of the Internet and social media, telemarketing, advertising, endorsements, and testimonials;
•Antitrust and unfair competition laws;
•Anti-money laundering laws and regulations (e.g., the Bank Secrecy Act and the USA PATRIOT Act);
•Laws and regulations restricting transactions with sanctioned parties and regarding export controls as they apply to FICO products delivered in non-U.S. countries or to foreign nationals (e.g., Office of Foreign Asset Control sanctions and Export Administration Regulations);
•Anti-bribery and corruption laws and regulations (e.g., the Foreign Corrupt Practices Act and the UK Bribery Act 2010);
•Financial regulatory standards (e.g., Sarbanes-Oxley Act requirements to maintain and verify internal process controls, including controls for material event awareness and notification);
•Laws and regulations that apply to the management or oversight of third parties (e.g., vendors, contractors, suppliers, and distributors); and
•Laws and regulations relating to the environmental, social, and sustainability practices of companies, including enhanced climate-related disclosure requirements from regulators, such as California’s climate disclosure rules and the E.U.’s Corporate Sustainability Reporting Directive.
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Many U.S. and foreign jurisdictions have passed, or are currently contemplating, a variety of consumer protection, data privacy, and cyber and data security laws and regulations that may relate to our business or the business of our customers or affect the demand for our products and services. For example, the GDPR in the E.U. and the U.K. imposes strict obligations and restrictions on the collection and use of E.U. and U.K. personal data, and also on the transfer of such data to countries that have not been determined by the E.U. or the U.K. to provide adequate data privacy protections, unless there are additional approved transfer safeguards in place (such as the use of “standard contractual clauses” and the performance of appropriate data transfer impact assessments). Our implementation of processes to meet such requirements for affected data flows may involve additional compliance costs associated with maintaining appropriate regulatory certifications, performing any necessary assessments, engaging in contract negotiations with third parties, and implementing approved standard contractual clauses, and/or (if appropriate) localizing certain data processing activities. Furthermore, such data transfer restrictions, which may involve interpretive issues, may have an adverse impact on cross-border transfers of personal data and may subject us and our customers to additional scrutiny from E.U. or U.K. data protection authorities.
Numerous other countries have introduced and, in some cases, enacted, similar data privacy and cyber and data security laws.
The California Consumer Privacy Act of 2018 (“CCPA”), as amended by the California Privacy Rights Act of 2023 (the “CPRA”), gives California residents certain privacy rights in the collection and disclosure of their personal information and requires businesses to make certain disclosures and take certain other acts in furtherance of those rights. Numerous other U.S. states have passed similar privacy laws.
The EU AI Act, which establishes requirements for the provision and use of products that leverage AI systems, including in credit scoring, entered into force on August 1, 2024, with most provisions becoming effective in December 2026 and December 2027. Other countries, as well as the executive branch of the U.S. government and many U.S. states, are considering or have implemented laws, regulations, or standards applicable to the development, provision, and use of AI technologies in certain industries and contexts. For example, California has issued regulations under the CCPA and CPRA, and Colorado has passed a law and is issuing regulations, that govern the use of automated decision-making technology, including AI, to make certain significant or consequential decisions about individuals, including credit decisions. The California and Colorado laws are set to take effect in January 2027.
The costs and other burdens of compliance with such laws and regulations, along with the potential for increased regulatory actions, could negatively impact the use and adoption of our solutions and reduce overall demand for them. Additionally, concerns regarding data privacy and cyber and data security may cause our customers, or their customers and potential customers, to resist providing the data necessary to allow us to deliver our solutions effectively. Even the perception that the privacy or security of personal information is not satisfactorily protected or does not meet regulatory requirements could inhibit sales of our solutions and any failure to comply with such laws and regulations could lead to significant fines, penalties, or other liabilities. Any such decrease in demand or incurred fines, penalties, or other liabilities could have a material adverse effect on our business, results of operations, and financial condition.
In addition to existing laws and regulations, changes in the U.S. or foreign legislative, judicial, regulatory, or consumer environments could harm our business, financial condition, or results of operations. The laws and regulations above, and changes to them or their interpretation by the courts, could affect the demand for or profitability of our products, including scoring and consumer products. New laws and regulations pertaining to our customers could cause them to pursue new strategies, reducing the demand for our products. We expect there will continue to be an increased focus on laws and regulations related to our business and/or the business of our clients, including with regard to the operation of consumer reporting agencies, the collection, use, accuracy, correction, and sharing of personal information, credit scoring, the use of AI and machine learning, algorithmic accountability, and fair lending.
If we are subject to infringement claims, it could harm our business.
Products in the industry segments in which we compete, including software products, are often subject to claims of patent and other intellectual property infringement, and such claims could increase as the number of products and competitors in our industry segments grow. We may need to defend claims that our products infringe intellectual property rights, and as a result we may:
•incur significant defense costs or substantial damages;
•be required to cease the use or sale of infringing products;
•expend significant resources to develop or license a substitute non-infringing technology;
•discontinue the use of some technology; or
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•be required to obtain a license under the intellectual property rights of the third-party claiming infringement, which license may not be available or might require substantial royalties or license fees that would reduce our margins.
Moreover, in recent years, individuals and groups that are non-practicing entities, commonly referred to as “patent trolls,” have purchased patents and other intellectual property assets for the purpose of making claims of infringement in order to extract settlements. From time to time, we may receive threatening letters or notices or may be the subject of claims that our solutions and underlying technology infringe or violate the intellectual property rights of others. Responding to such claims, regardless of their merit, can be time consuming, costly to defend, divert management's attention and resources, damage our reputation and brand, and cause us to incur significant expenses.
Global Operational Risks
Our operations outside the U.S. subject us to additional risks that may harm our business, financial condition, or results of operations.
A large portion of our revenues is derived from international sales. During fiscal 2026, 20% of our revenues was derived from business outside the U.S. As part of our growth strategy, we plan to continue to pursue opportunities outside the U.S., including opportunities in countries with economic systems that are in early stages of development and that may not mature sufficiently to result in growth for our business. Accordingly, our future operating results could be negatively affected by a variety of factors arising out of international commerce, some of which are beyond our control. These factors include:
•general economic and political conditions in countries where we sell our products and services;
•difficulty in staffing and efficiently managing our operations in multiple geographic locations and in various countries;
•effects of a variety of foreign laws and regulations, including restrictions on access to personal information;
•data privacy, consumer protection, and AI laws and regulations;
•import and export licensing requirements;
•longer payment cycles;
•difficulties in enforcing contracts and collecting accounts receivable;
•reduced protection for intellectual property rights;
•currency fluctuations;
•unfavorable tax rules or rulings;
•changes in tariffs and other trade barriers;
•the presence and acceptance of varying levels of business corruption in international markets;
•geopolitical tensions, instability, terrorism, and military conflicts;
•natural disasters and pandemics, including individual countries’ reactions to them; and
•difficulties and delays in translating products and related documentation into foreign languages.
There can be no assurance that we will be able to successfully address each of these challenges. Additionally, some of our business is conducted in currencies other than the U.S. dollar. Substantial movements in foreign exchange rates relative to the dollar could adversely impact our cash flows, results of operations, and financial position.
In addition to the risks associated with our international sales, we are subject to risks associated with maintaining research and development personnel in various international locations. We currently have a substantial portion of our product development staff in international locations, some of which have political and developmental risks. For example, a significant portion of our workforce is located in India, which may be subject to political, economic, regulatory, or other risks. If any of these risks materialize, our business could be adversely affected.
Material adverse developments in global economic conditions, or the occurrence of significant geopolitical or other world events, could affect demand for our products and services and harm our business.
Purchases of technology products and services and decisioning solutions are subject to adverse economic conditions. During periods of economic weakness, companies across many industries delay or reduce technology purchases, and we may experience softened demand for our decisioning solutions and other products and services. Global economic uncertainty has resulted in, and continues to contribute to, substantial stress, volatility, illiquidity, and disruption of global credit and other financial markets. Various factors contribute to the uncertain economic environment, including geopolitical tensions, military conflicts, interest rate levels and volatility, inflation, actual or anticipated recessions, trade policies and tariffs, and political and governmental instability.
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Economic uncertainty has and could continue to negatively affect the businesses and purchasing decisions of companies in the industries we serve. Such disruptions present considerable risks to our businesses and operations. As global economic conditions experience stress and negative volatility, including any stress or negative volatility related to the imposition of, or threatened imposition of, tariffs and retaliatory tariffs, economic sanctions, and increased trade tensions or if there is an escalation in regional or global conflicts, or terrorism, we may experience reductions in the number of available customers and in capital expenditures by our remaining customers, longer sales cycles, deferral or delay of purchase commitments for our products, and increased price competition. These factors may adversely affect our business, results of operations, and liquidity.
As a result of these conditions, risks and uncertainties, we may need to modify our strategies, businesses, or operations, and we may incur additional costs in order to compete in a changed business environment. Given the volatile nature of the global economic environment and the uncertainties underlying efforts to stabilize it, we may not timely anticipate or manage existing, new, or additional risks, as well as contingencies or developments, including regulatory developments and trends in new products and services. Our failure to do so could materially and adversely affect our business, financial condition, results of operations, and prospects.
Financial Risks
Our products have long and variable sales cycles. If we do not accurately predict these cycles, we may not forecast our financial results accurately, and our stock price could be adversely affected.
In our Software segment, the length of our sales cycles makes it difficult for us to predict the timing of sales and the quarter in which related revenue will be recognized. In addition, our selling approach is complex, as we look to sell multiple products and services across our customers’ organizations. This complexity makes forecasting of revenues in any given period more difficult. For example, the sales cycle of our products may extend beyond one year and as a result, revenues and operating results may vary significantly from period to period. Customers are often cautious in making decisions to acquire our products because such purchases typically involve a significant commitment of capital and may involve shifts by the customer to a new software and/or hardware platform or changes in their operational procedures. This may cause customers, particularly those experiencing financial stress, to make purchasing decisions more cautiously. Delays in completing sales may also result from customers’ internal approval processes for significant capital expenditures and the testing and acceptance of our applications. Consequently, this increases the difficulty of predicting the timing of sales and the quarter in which they will occur, which may cause fluctuations in our revenues and operating results.
In our Scores segment, a majority of our revenues come from the sale of our Scores through partners. We have limited visibility into those sales until we receive royalty reports from those partners at the end of each billing period. In addition, the volume of our Scores sales depends heavily on macroeconomic conditions that are hard to forecast, including the volume of transactions in the U.S. mortgage and credit card markets, which account for a significant portion of the revenues in our Scores segment.
If we are unable to accurately forecast our revenues, our ability to plan, budget, or provide accurate guidance could be limited, and our stock price could be adversely affected.
Our financial results and key metrics fluctuate within each quarter and from quarter to quarter, making it difficult to predict our future revenue, annual recurring revenue (“ARR”), and financial results, which may cause us to miss analyst expectations and may cause the price of our common stock to decline.
Our quarterly financial results and key metrics have fluctuated in the past and may continue to fluctuate in the future, and therefore period-to-period comparisons should not be relied upon as an indication of future performance. These fluctuations could cause our stock price to change significantly or experience declines. We also may provide investors with quarterly and annual financial guidance that could prove to be inaccurate as a result of these fluctuations and other factors. In addition to the other risks described in these risk factors, some of the factors that could cause our financial results and key metrics to fluctuate include:
•variability in demand from our existing customers;
•the lengthy and variable sales cycle of many products, combined with the relatively large size of orders for our products, increases the likelihood of short-term fluctuation in revenues;
•consumer or customer dissatisfaction with, or problems caused by, the performance of our products;
•the timing of new product announcements and introductions in comparison with our competitors;
•the level of our operating expenses;
•changes in demand and competitive and other conditions in the consumer credit, banking, and insurance industries;
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•regulatory and market developments potentially affecting the use of FICO Scores relative to competing credit score models, including VantageScore;
•interest rate levels and volatility, and inflation;
•fluctuations in domestic and international economic conditions;
•our ability to complete large installations, and to adopt and configure cloud-based and AI-based deployments, on schedule and within budget;
•announcements relating to litigation or regulatory matters;
•changes in senior management or key personnel;
•acquisition-related expenses and charges; and
•timing of orders for and deliveries of software systems.
Our operating expenses are based in part on our expectations for future revenue and many are fixed and cannot be quickly adjusted as revenue changes. Accordingly, any revenue shortfall below expectations has had, and may continue to have, an immediate and significant adverse effect on our operating results and profitability. Expenses that exceed our expectations or a failure to maintain rigorous cost controls could also adversely affect our profitability.
General Risk Factors
Our stock price has been subject to fluctuations, and may continue to fluctuate, or decline, regardless of our operating performance.
In recent months, following the announcements by the FHFA and HUD related to the authorized use by lenders in the U.S. mortgage market of VantageScore, our stock price has declined significantly, and it could continue to decline due to these or other announcements, or due to any increased use, or perceived increased use, of VantageScore over FICO Scores in the mortgage market. Further, in the past, our stock price has been subject to fluctuations due to a number of factors, including variations in our revenues and operating results. The financial markets have experienced, and may continue to experience, significant price and volume fluctuations that have particularly affected the stock prices of many technology companies and financial services companies. These fluctuations have at times been unrelated to the operating performance of these companies. Broad market fluctuations, as well as industry-specific and general economic conditions, may negatively affect our business and could result in an impairment charge related to goodwill, which could adversely affect our results of operations and stock price.
If we experience changes in tax laws or adverse outcomes resulting from examination of our income tax returns, our results of operations could be adversely affected.
We are subject to federal, state, and foreign income taxes in the jurisdictions in which we operate. Significant judgment is required in determining our worldwide provision for income taxes. Our future effective tax rates could be adversely affected by changes in tax laws, by our ability to generate taxable income in foreign jurisdictions to utilize foreign tax losses, and by changes in the valuation of our deferred tax assets. In addition, we are subject to the examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from such examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the results of these examinations will not have an adverse effect on our operating results and financial condition.
Our anti-takeover defenses could make it difficult for another company to acquire control of FICO, thereby limiting the demand for our securities by certain types of purchasers or the price investors are willing to pay for our stock.
Certain provisions of our Restated Certificate of Incorporation, as amended, could make a merger, tender offer, or proxy contest involving us more difficult, even if such transactions would be beneficial to the interests of our stockholders. These provisions include giving our Board the ability to issue preferred stock and determine the rights and designations of the preferred stock at any time without stockholder approval. The rights of the holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or discouraging a third-party from acquiring, a majority of our outstanding voting stock. These factors and certain provisions of the Delaware General Corporation Law may have the effect of deterring hostile takeovers or otherwise delaying or preventing changes in control or changes in our management, including transactions in which our stockholders might otherwise receive a premium over the fair market value of our common stock.
Item 1B. Unresolved Staff Comments
Not applicable.
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Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers, violation of data privacy or security laws, and reputational harm.
We employ an experienced team of cybersecurity professionals with a variety of backgrounds, and we periodically engage third-party service providers to assist with assessing, identifying and managing cybersecurity risks. We seek to address material cybersecurity risks through a company-wide approach that assesses, ranks and prioritizes cybersecurity threats, vulnerabilities and issues as they are identified to maintain the confidentiality, integrity and availability of our information systems and the information that we collect and store. The Company’s cybersecurity policies, standards, processes and practices are informed by recognized frameworks established by the National Institute of Standards and Technology, the International Organization for Standardization and an array of other applicable standards-setting bodies, which are integrated into a broader risk management framework and related processes. We also hold various security-related industry certifications and attestations that have been validated by external auditors, including: SOC 1, SOC 2 Type II, ISO 27001, CSA STAR Level 2, PCI-DSS and others.
Leveraging threat intelligence and other signals, the Company undergoes periodic testing, audits and reviews of its policies, standards, processes and practices to identify, assess and address cybersecurity risks and events. The Company also undergoes routine internal and external penetration testing. The results of such tests and assessments are evaluated by management and periodically reported to the Audit Committee. The Company further adjusts its cybersecurity policies, standards, processes and practices based on these results. The Company also makes available to clients attestations of its various certifications, audits, and penetration tests.
Cybersecurity Governance
Management Oversight
Our management is responsible for identifying the various risks facing the Company, formulating risk management policies and procedures, and managing the Company’s risk exposures. The Company’s Chief Information Security Officer (“CISO”), who reports to the President, Software, is primarily responsible for the assessment and management of material risks from cybersecurity threats and for the design and implementation of our security program and strategy based on the mandate provided by the Board and senior management. The CISO has extensive experience in the management of cybersecurity risk management programs, having served in various leadership roles in information technology and information security for over 20 years, including serving as the Chief Security Officer of two other large public technology companies. We believe the Company’s business leaders, including the CISO, have the appropriate expertise, background and depth of experience to manage risks arising from cybersecurity threats.
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The CISO, in coordination with other members of senior management, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to cybersecurity incidents in accordance with the Company’s incident response and recovery plans. To facilitate the success of the Company’s cybersecurity program, cross-functional teams throughout the Company are tasked with addressing cybersecurity threats and responding to cybersecurity incidents. Through ongoing communications with these teams, the CISO and senior management are informed promptly about, and monitor the prevention, detection, investigation, mitigation and remediation of, cybersecurity threats and incidents. These teams are expected to operate pursuant to documented plans and playbooks that include processes for escalation of incidents to leadership and to the Audit Committee and the Board, as appropriate, based on the severity level of an incident. In addition, the Company periodically engages outside advisors and experts to assist with assessing, identifying and managing cybersecurity risks, including to anticipate future threats and trends, and their impact on the Company’s risk management environment.
Specifically, management implements the Company’s cybersecurity and risk management strategy across several areas:
•Identification and Reporting. The Company has implemented a robust, cross-functional approach to identifying, assessing and managing cybersecurity threats and risks. The Company’s program includes controls and procedures designed to properly identify, classify, and escalate cybersecurity risks to provide management with visibility and prioritization of risk mitigation efforts and to publicly report material cybersecurity incidents if and when appropriate.
•Threat Intelligence. The Company maintains a Threat Intelligence team focused on profiling, intelligence collection, and threat analysis supporting the Company’s ongoing efforts to identify, assess and manage cybersecurity threats. The team’s input supports both near-term response to cybersecurity events, and long-term strategic planning and development of the Company’s cybersecurity risk management framework.
•Technical Safeguards. The Company implements technical safeguards that are designed to protect both the Company’s service offerings and other information systems it controls from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality, vulnerability management, encryption processes and access controls, all of which are periodically evaluated and improved through risk and control assessments and in response to cybersecurity threat intelligence as well as outside audits and certifications.
•Incident Response and Recovery Planning. The Company has established and maintains robust incident response, business continuity and disaster recovery plans designed to address the Company’s response to a cybersecurity incident, including any required public disclosure and reporting of material incidents in a timely manner. These plans and procedures serve to guide and document a rigorous incident response program that reflects the roles of an array of stakeholders, including personnel providing technical, operational, engineering, legal and other perspectives across the Company. The Company conducts regular tabletop exercises involving multiple operational teams, including senior management, to test these plans and to familiarize personnel with their roles in a response scenario.
•Third-Party Risk Management . The Company maintains a robust, risk-based approach to identifying and overseeing cybersecurity threats presented by certain third parties, including vendors, service providers and other external users of the Company’s systems, as well as the systems of third parties that could adversely impact our business in the event of a significant cybersecurity incident affecting those third-party systems.
•Education and Awareness. The Company regularly provides employee training on security-related duties and responsibilities, including knowledge about how to recognize security incidents and how to proceed if an actual or suspected incident should occur. This training is mandatory for employees across the Company, and is intended to provide the Company’s employees with effective tools to address cybersecurity threats, and to communicate the Company’s evolving information security policies, standards, processes and practices.
Board Oversight
Our Board is responsible for monitoring the Company’s risk management processes by informing itself concerning our material risks and evaluating whether management has reasonable controls in place to address the material risks. The Audit Committee of the Board is responsible for discussing with management the Company’s major risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies. Accordingly, our internal risk management team regularly reports to the Audit Committee on our major risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies. The Audit Committee, in turn, reports on the matters discussed at the committee level to the full Board .
As part of its oversight of the Company’s risk management noted above, the Audit Committee oversees, reviews and discusses with management the Company’s risks from cybersecurity threats and management’s role in assessing and managing
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such risks. The Audit Committee receives regular presentations, reports and updates from the CISO and other members of management on developments regarding the Company’s cybersecurity program, broader cybersecurity trends, evolving industry standards, the threat environment and other topics.
The Company’s processes also allow for the Board and the Audit Committee to be informed of key cybersecurity risks outside the regular reporting schedule. While regular meetings of the Audit Committee are scheduled on a quarterly cadence, the Audit Committee is authorized to meet with management at any time it deems appropriate to discuss matters relevant to the Audit Committee. The Company’s policy is for the Board and the Audit Committee to receive prompt and timely information regarding any cybersecurity risk (including any incident) that meets pre-established reporting thresholds, as well as ongoing updates regarding any such risk.
Item 2. Properties
The Company’s headquarters are located in Bozeman, Montana. As of September 30, 2026, the Company leased office facilities in geographically dispersed locations primarily for corporate functions, sales, research and development, data centers and other purposes. The Company believes its existing facilities, which are used by both reportable segments, are in good operating condition and are suitable to meet operating needs.
Item 3. Legal Proceedings
FICO is a defendant in consolidated putative class action lawsuits brought in the Northern District of Illinois against FICO and the credit bureaus, Equifax, Experian and TransUnion, alleging antitrust claims in connection with the distribution of FICO Scores. On November 24, 2024, the court ruled on FICO’s and the credit bureaus’ motions to dismiss the plaintiffs’ amended complaints. The court dismissed with prejudice all claims in the lawsuit other than a Sherman Act Section 2 claim and accompanying state law claims against FICO, which were allowed to proceed through the discovery stage of the litigation.
On September 29, 2026, FICO and the plaintiffs entered into a term sheet memorializing the material terms of a proposed settlement of the lawsuits. In consideration of a cash payment by FICO to the plaintiffs of $65.0 million and certain compliance undertakings, the settlement would fully resolve all remaining claims asserted against FICO in the lawsuits. The proposed settlement does not include any admission of wrongdoing or liability by FICO, which denies any wrongdoing. We anticipate the parties will enter into definitive settlement agreements in the first quarter of fiscal 2027 reflecting the terms of the settlement as set forth in the term sheet. The settlement remains subject to final court approval, and there can be no assurance that the court will approve the proposed settlement. If final court approval is not obtained, FICO intends to vigorously defend against the remaining claims in these lawsuits.
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
Our common stock trades on the New York Stock Exchange under the symbol: FICO. According to records of our transfer agent, at October 23, 2026, we had 194 stockholders of record of our common stock.
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. Payment of future cash dividends, if any, will be at the discretion of our Board after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, outstanding indebtedness, plans for expansion and restrictions imposed by our debt arrangements, if any.
Unregistered Sales of Equity Securities and Use of Proceeds
Not applicable.
Issuer Purchases of Equity Securities
| Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | |||||||||||||||||||
| July 1, 2026 through July 31, 2026 | 230,130 | $ | 1,167.85 | 229,640 | $ | 499,999,978 | |||||||||||||||||
| August 1, 2026 through August 31, 2026 | 378 | $ | 1,101.51 | — | $ | 499,999,978 | |||||||||||||||||
| September 1, 2026 through September 30, 2026 | 254 | $ | 932.26 | — | $ | 499,999,978 | |||||||||||||||||
| 230,762 | $ | 1,167.48 | 229,640 | $ | 499,999,978 | ||||||||||||||||||
(1)Includes 1,122 shares delivered in satisfaction of the tax withholding obligations resulting from the vesting of restricted stock units held by employees during the quarter ended September 30, 2026.
(2)In June 2026, our Board of Directors approved a stock repurchase program (the “June 2026 program”), replacing our previously authorized February 2026 stock repurchase program, which was terminated prior to its expiration. The June 2026 program is open-ended and authorizes repurchases of shares of our common stock from time to time up to an aggregate cost of $2.0 billion in the open market, in negotiated transactions or through accelerated share repurchase programs. The June 2026 program remains in effect until the total authorized amount is expended or until further action by our Board of Directors. As part of the June 2026 program, we entered into an accelerated share repurchase agreement (“ASR Agreement”) with Wells Fargo Securities, Inc. (“Wells Fargo Securities”) on June 5, 2026 to repurchase $1.5 billion of our common stock. Pursuant to the ASR Agreement, in June 2026 we paid $1.5 billion to Wells Fargo Securities and received an initial delivery of 1,055,103 shares of common stock, representing approximately 80 percent of the total shares expected to be repurchased under the ASR Agreement. In July 2026, we settled the ASR Agreement and received 229,640 additional shares. In total, 1,284,743 shares were repurchased under the ASR Agreement.
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Performance Graph
The following graph shows the total stockholder return of an investment of $100 in cash on September 30, 2021, in (a) the Company’s common stock, (b) the Standard & Poor’s 500 Stock Index and (c) the Standard & Poor’s 500 Application Software Index, in each case with reinvestment of dividends. Our past performance may not be indicative of future performance.
Item 6. [Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes the following: a business overview that provides a high-level summary of our strategies and initiatives, highlights from fiscal year 2026 and key performance metrics for our Software segment; a more detailed analysis of our results of operations; our capital resources and liquidity, which discusses key aspects of our statements of cash flows, changes in our balance sheets and our financial commitments; and a summary of our critical accounting estimates that involve a significant level of estimation uncertainty. Our MD&A should be read in conjunction with Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K. The following discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results may differ from those referred to herein due to a number of factors, including but not limited to risks described in Item 1A, Risk Factors, in this Annual Report on Form 10-K.
Our MD&A focuses on discussion of year-over-year comparisons between fiscal 2026 and fiscal 2025. Discussion of fiscal 2024 results and year-over-year comparisons between fiscal 2025 and fiscal 2024 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
BUSINESS OVERVIEW
Strategies and Initiatives
In fiscal 2026, the FICO® Score continued to be the standard measure of consumer credit risk in the U.S., used by U.S. lenders for credit decisioning that connects lenders, investors, and consumers throughout the lending lifecycle. Through the FICO® Score 10T Free Access Program, more than 70 mortgage lenders are able to access FICO Score 10T, which also incorporates trended credit data, at no additional fee if they have paid for the Classic FICO® Score. In April 2026, the Federal Housing Finance Agency confirmed that FICO Score 10T was approved for future use in the conforming mortgage market served by Fannie Mae and Freddie Mac. On July 1, 2026, Fannie Mae and Freddie Mac took a further step toward implementation of FICO Score 10T by publishing historical data to support independent analytic evaluations. Independent analyses conducted during fiscal 2026 continued to demonstrate strong predictive performance for FICO Score 10T relative to competitor models. FICO Score 10T was also integrated into certain entities’ mortgage capital markets and pricing infrastructure, including Optimal Blue’s capital markets platform and LoanPASS’s pricing engine.
In fiscal 2026, the FICO® Mortgage Direct License Program was also announced, which will give tri-merge resellers, platform providers, and other third-party distributors a new option to calculate and distribute FICO Scores directly to their customers without relying on the three nationwide consumer reporting agencies as intermediaries. We also partnered with Plaid, a leading financial data network, to introduce a next-generation UltraFICO® Score, combining the trusted FICO Score with consumer-permissioned cash flow data.
The FICO® Score Mortgage Simulator was enhanced with new automated credit-planning features to help lenders, mortgage loan officers, and brokers better serve potential homebuyers. Industry-specific scores, such as FICO® Auto Score 10, continued to gain adoption during the year. FICO’s Score A Better Future® scaled the impact of free financial education workshops through expanded strategic partnerships and distribution channels, helping consumers better understand credit and the FICO Score. Our Lenders Leading Financial Inclusion program saw continued growth, working with financial institutions serving historically underserved communities to strengthen their capacity to serve a broader range of consumers. Internationally, we continued building on the successful blueprint established in prior years, such as our FICO Score launches in Kenya and Mongolia, as we pursue further expansion and development.
During fiscal 2026, the strategy for our Software segment continued to advance and drive growth through our platform-first products. We expanded our FICO® Platform reach, both by geography and customer type, by adding and expanding strategic relationships with several major global systems integrators, scaling distribution with our payment processor partners, and expanding scaled partner enablement and onboarding programs including FICO® Marketplace. We continue to innovate and bring the next generation of capabilities to FICO® Platform, demonstrating its value with new customers and expanding use cases with existing customers and partners. We announced newly-granted patents around advancing responsible AI, foundational models, blockchain governance, and applied intelligence technology. Additionally, we continue to expand our FICO® Educational Analytics Challenge program that was created to empower students and help educate the next generation of data scientists.
We also continued to enhance stockholder value by returning cash to stockholders through our stock repurchase program. During fiscal 2026, we repurchased 2.5 million shares at a total repurchase price of $3.1 billion.
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Highlights from Fiscal 2026
•Total revenues were $2.5 billion during fiscal 2026, a 27% increase from fiscal 2025.
•Revenues for our Scores segment were $1.7 billion during fiscal 2026, a 41% increase from fiscal 2025.
•Annual Recurring Revenue for our Software segment as of September 30, 2026 was $850.9 million, a 14% increase from September 30, 2025.
•Dollar-Based Net Retention Rate for our Software segment was 112% as of September 30, 2026.
•Operating income was $1.3 billion during fiscal 2026, a 37% increase from fiscal 2025.
•Net income was $835.0 million during fiscal 2026, a 28% increase from fiscal 2025.
•Diluted EPS was $36.32 during fiscal 2026, a 37% increase from fiscal 2025.
•Cash flows from operating activities were $1.1 billion during fiscal 2026, compared with $778.8 million during fiscal 2025.
•In March 2026, we issued $1.0 billion of senior notes, the proceeds of which were used to make a payment against our revolving line of credit and to repay the $400 million of our senior notes due in May 2026. In June 2026, we amended our credit agreement to provide for a $1.5 billion term loan, the proceeds of which were used to fund an accelerated share repurchase agreement (“ASR Agreement”).
•Total debt balance was $5.3 billion as of September 30, 2026, compared with $3.1 billion as of September 30, 2025.
•Total share repurchases during fiscal 2026 were $3.1 billion, including $1.5 billion paid under the ASR Agreement, compared with $1.4 billion during fiscal 2025.
Key performance metrics for Software segment
Annual Contract Value Bookings (“ACV Bookings”)
Management regards ACV Bookings as an important indicator of future revenues, but it is not comparable to, nor is it a substitute for, an analysis of our revenues and other U.S. generally accepted accounting principles (“U.S. GAAP”) measures. We define ACV Bookings as the average annualized value of software contracts signed in the current reporting period that generate current and future on-premises and SaaS software revenue. We only include contracts with an initial term of at least 24 months and we exclude perpetual licenses and other software revenues that are non-recurring in nature. For renewals of existing software subscription contracts, we count only incremental annual revenue expected over the current contract as ACV Bookings.
ACV Bookings is calculated by dividing the total expected contract value by the contract term in years. The expected contract value equals the fixed amount — including guaranteed minimums, if any — stated in the contract, plus estimates of future usage-based fees. We develop estimates from discussions with our customers and examinations of historical data from similar products and customer arrangements. Differences between estimates and actual results occur due to variability in the estimated usage. This variability can be the result of the economic trends in our customers’ industries, individual performance of our customers relative to their competitors, and regulatory and other factors that affect the business environment in which our customers operate. For the periods presented, ACV Bookings related to estimates of future usage-based fees was approximately 20% of the total ACV Bookings amount on an annualized basis. Differences between the initial estimates of future usage-based fees and actual results historically have not been material and we do not currently expect that they will be materially different in the future.
We disclose estimated revenue expected to be recognized in the future related to remaining performance obligations in Note 9 to the accompanying consolidated financial statements. However, we believe ACV Bookings is a useful supplemental measure of our business as it includes estimated revenues and future billings excluded from Note 9, such as usage-based fees and guaranteed minimums derived from our on-premises software licenses, among others.
The following table summarizes our ACV Bookings during the periods indicated:
| Quarter Ended September 30, | Year Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Total on-premises and SaaS software | $ | 44.7 | $ | 32.7 | $ | 139.9 | $ | 102.4 | |||||||||||||||
Annual Recurring Revenue (“ARR”)
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Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, requires us to recognize a significant portion of revenue from our on-premises software subscriptions at the point in time when the software is first made available to the customer, or at the beginning of the subscription term, despite the fact that our contracts typically call for billing these amounts ratably over the life of the subscription. The remaining portion of our on-premises software subscription revenue including maintenance and usage-based fees are recognized over the life of the contract. This point-in-time recognition of a portion of our on-premises software subscription revenue creates significant variability in the revenue recognized period to period based on the timing of the subscription start date and the subscription term. Furthermore, this point-in-time revenue recognition can create a significant difference between the timing of our revenue recognition and the actual customer billing under the contract. We use ARR to measure the underlying performance of our subscription-based contracts and mitigate the impact of this variability. ARR is defined as the annualized revenue run-rate of on-premises and SaaS software agreements within a quarterly reporting period, and as such, is different from the timing and amount of revenue recognized. All components of our software licensing and subscription arrangements that are not expected to recur (primarily perpetual licenses) are excluded. We calculate ARR as the quarterly recurring revenue run-rate multiplied by four.
The following table summarizes our ARR for on-premises and SaaS software exiting each of the dates presented:
| December 31, 2024 | March 31, 2025 | June 30, 2025 | September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||
ARR | (In millions) | ||||||||||||||||||||||||||||||||||||||||||||||
Platform (*) | $ | 227.7 | $ | 234.7 | $ | 254.2 | $ | 263.6 | $ | 302.6 | $ | 348.8 | $ | 412.8 | $ | 452.6 | |||||||||||||||||||||||||||||||
| Non-platform | 501.6 | 479.9 | 484.9 | 483.7 | 463.4 | 440.0 | 403.0 | 398.3 | |||||||||||||||||||||||||||||||||||||||
| Total | $ | 729.3 | $ | 714.6 | $ | 739.1 | $ | 747.3 | $ | 766.0 | $ | 788.8 | $ | 815.8 | $ | 850.9 | |||||||||||||||||||||||||||||||
| Percentage | |||||||||||||||||||||||||||||||||||||||||||||||
| Platform | 31 | % | 33 | % | 34 | % | 35 | % | 40 | % | 44 | % | 51 | % | 53 | % | |||||||||||||||||||||||||||||||
| Non-platform | 69 | % | 67 | % | 66 | % | 65 | % | 60 | % | 56 | % | 49 | % | 47 | % | |||||||||||||||||||||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||||||||
| YoY Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Platform | 20 | % | 17 | % | 18 | % | 16 | % | 33 | % | 49 | % | 62 | % | 72 | % | |||||||||||||||||||||||||||||||
| Non-platform | 1 | % | (3) | % | (2) | % | (2) | % | (8) | % | (8) | % | (17) | % | (18) | % | |||||||||||||||||||||||||||||||
| Total | 6 | % | 3 | % | 4 | % | 4 | % | 5 | % | 10 | % | 10 | % | 14 | % | |||||||||||||||||||||||||||||||
(*) References to “platform” in this table and the table below refer to FICO platform software, which 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.
Dollar-Based Net Retention Rate (“DBNRR”)
We consider DBNRR to be an important measure of our success in retaining and growing revenue from our existing customers. To calculate DBNRR for any period, we compare the ARR at the end of the prior comparable quarter (“base ARR”) to the ARR from that same cohort of customers at the end of the current quarter (“retained ARR”); we then divide the retained ARR by the base ARR to arrive at the DBNRR. Our calculation includes the positive impact among this cohort of customers of selling additional products, price increases and increases in usage-based fees, and the negative impact of customer attrition, price decreases, and decreases in usage-based fees during the period. However, the calculation does not include the positive impact from sales to any new customers acquired during the period. Our DBNRR may increase or decrease from period to period as a result of various factors, including the timing of new sales and customer renewal rates.
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The following table summarizes our DBNRR for on-premises and SaaS software exiting each of the dates presented:
| December 31, 2024 | March 31, 2025 | June 30, 2025 | September 30, 2025 | December 31, 2025 | March 31, 2026 | June 30, 2026 | September 30, 2026 | ||||||||||||||||||||||||||||||||||||||||
| DBNRR | |||||||||||||||||||||||||||||||||||||||||||||||
| Platform | 112 | % | 110 | % | 115 | % | 112 | % | 122 | % | 136 | % | 148 | % | 156 | % | |||||||||||||||||||||||||||||||
| Non-platform | 100 | % | 96 | % | 97 | % | 97 | % | 91 | % | 90 | % | 82 | % | 82 | % | |||||||||||||||||||||||||||||||
| Total | 105 | % | 102 | % | 103 | % | 102 | % | 103 | % | 109 | % | 109 | % | 112 | % | |||||||||||||||||||||||||||||||
RESULTS OF OPERATIONS
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.
Segment revenues, operating income, and related financial information, including disaggregation of revenue, for the years ended September 30, 2026, 2025 and 2024 are set forth in Note 9 and Note 15 to the accompanying consolidated financial statements.
Revenues
The following tables set forth certain summary information on a segment basis related to our revenues for fiscal 2026, 2025 and 2024:
Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||||||||||||||||||
| Segment | 2026 | 2025 | 2024 | 2026 to 2025 | 2025 to 2024 | 2026 to 2025 | 2025 to 2024 | ||||||||||||||||||||||||||||||||||
| (In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||||||||
| Scores | $ | 1,652,222 | $ | 1,168,575 | $ | 919,650 | $ | 483,647 | $ | 248,925 | 41 | % | 27 | % | |||||||||||||||||||||||||||
| Software | 882,651 | 822,294 | 797,876 | 60,357 | 24,418 | 7 | % | 3 | % | ||||||||||||||||||||||||||||||||
| Total | $ | 2,534,873 | $ | 1,990,869 | $ | 1,717,526 | 544,004 | 273,343 | 27 | % | 16 | % | |||||||||||||||||||||||||||||
| Percentage of Revenues Year Ended September 30, | |||||||||||||||||
| Segment | 2026 | 2025 | 2024 | ||||||||||||||
| Scores | 65 | % | 59 | % | 54 | % | |||||||||||
| Software | 35 | % | 41 | % | 46 | % | |||||||||||
| Total | 100 | % | 100 | % | 100 | % | |||||||||||
Scores
Scores segment revenues increased $483.6 million in fiscal 2026 from 2025 due to an increase of $473.6 million in our business-to-business scores revenue and an increase of $10.0 million in our business-to-consumer scores revenue. The increase in business-to-business scores revenue was primarily attributable to both a higher unit price and an increase in volume of mortgage origination scores. The increase in business-to-consumer scores revenue was primarily attributable to an increase in royalties derived from scores sold indirectly to consumers through credit reporting agencies.
Software
The following table provides information about disaggregated revenue for our Software segment by revenue types:
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| Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | 2026 to 2025 | 2025 to 2024 | 2026 to 2025 | 2025 to 2024 | |||||||||||||||||||||||||||||||||||
| (In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||||||||
On-premises and SaaS software | $ | 808,118 | $ | 740,145 | $ | 711,340 | $ | 67,973 | $ | 28,805 | 9 | % | 4 | % | |||||||||||||||||||||||||||
| Professional services | 74,533 | 82,149 | 86,536 | (7,616) | (4,387) | (9) | % | (5) | % | ||||||||||||||||||||||||||||||||
| Total | $ | 882,651 | $ | 822,294 | $ | 797,876 | 60,357 | 24,418 | 7 | % | 3 | % | |||||||||||||||||||||||||||||
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, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | 2026 to 2025 | 2025 to 2024 | 2026 to 2025 | 2025 to 2024 | |||||||||||||||||||||||||||||||||||
| (In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||||||||
Software recognized at a point in time (1) | $ | 78,099 | $ | 90,238 | $ | 76,284 | $ | (12,139) | $ | 13,954 | (13) | % | 18 | % | |||||||||||||||||||||||||||
Software recognized over contract term (2) | 730,019 | 649,907 | 635,056 | 80,112 | 14,851 | 12 | % | 2 | % | ||||||||||||||||||||||||||||||||
Total | $ | 808,118 | $ | 740,145 | $ | 711,340 | $ | 67,973 | 28,805 | 9 | % | 4 | % | ||||||||||||||||||||||||||||
(1)Includes license portion of our on-premises subscription software and perpetual licenses, 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.
Software segment revenues increased $60.4 million in fiscal 2026 from 2025 due to a $68.0 million increase in our on-premises and SaaS software revenue, partially offset by a $7.6 million decrease in our professional services revenue. The increase in our on-premises and SaaS software revenue was primarily attributable to an increase in revenue recognized over time largely driven by SaaS growth for our Platform products, partially offset by a decrease in license revenue recognized at a point in time. The decrease in professional services revenue was primarily attributable to our strategy to emphasize higher-margin software over professional services.
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Operating Expenses and Other Expense, Net
The following tables set forth certain summary information related to our consolidated statements of income and comprehensive income for fiscal 2026, 2025 and 2024:
| Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | 2026 to 2025 | 2025 to 2024 | 2026 to 2025 | 2025 to 2024 | |||||||||||||||||||||||||||||||||||
| (In thousands, except employees) | (In thousands, except employees) | ||||||||||||||||||||||||||||||||||||||||
| Revenues | $ | 2,534,873 | $ | 1,990,869 | $ | 1,717,526 | $ | 544,004 | $ | 273,343 | 27 | % | 16 | % | |||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||||||||
| Cost of revenues | 351,480 | 353,722 | 348,206 | (2,242) | 5,516 | (1) | % | 2 | % | ||||||||||||||||||||||||||||||||
| Research and development | 209,307 | 188,347 | 171,940 | 20,960 | 16,407 | 11 | % | 10 | % | ||||||||||||||||||||||||||||||||
| Selling, general and administrative | 681,099 | 513,028 | 462,834 | 168,071 | 50,194 | 33 | % | 11 | % | ||||||||||||||||||||||||||||||||
| Amortization of intangible assets | — | — | 917 | — | (917) | — | % | (100) | % | ||||||||||||||||||||||||||||||||
| Restructuring charges | 27,293 | 10,922 | — | 16,371 | 10,922 | 150 | % | — | % | ||||||||||||||||||||||||||||||||
| Total operating expenses | 1,269,179 | 1,066,019 | 983,897 | 203,160 | 82,122 | 19 | % | 8 | % | ||||||||||||||||||||||||||||||||
| Operating income | 1,265,694 | 924,850 | 733,629 | 340,844 | 191,221 | 37 | % | 26 | % | ||||||||||||||||||||||||||||||||
| Interest expense, net | (223,314) | (133,647) | (105,638) | (89,667) | (28,009) | 67 | % | 27 | % | ||||||||||||||||||||||||||||||||
| Other income, net | 57,670 | 11,392 | 14,034 | 46,278 | (2,642) | 406 | % | (19) | % | ||||||||||||||||||||||||||||||||
| Income before income taxes | 1,100,050 | 802,595 | 642,025 | 297,455 | 160,570 | 37 | % | 25 | % | ||||||||||||||||||||||||||||||||
| Provision for income taxes | 265,083 | 150,649 | 129,214 | 114,434 | 21,435 | 76 | % | 17 | % | ||||||||||||||||||||||||||||||||
| Net income | $ | 834,967 | $ | 651,946 | $ | 512,811 | 183,021 | 139,135 | 28 | % | 27 | % | |||||||||||||||||||||||||||||
| Number of employees at fiscal year-end | 3,747 | 3,811 | 3,586 | (64) | 225 | (2) | % | 6 | % | ||||||||||||||||||||||||||||||||
| Percentage of Revenues Year Ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| Revenues | 100 | % | 100 | % | 100 | % | |||||||||||
| Operating expenses: | |||||||||||||||||
| Cost of revenues | 14 | % | 18 | % | 20 | % | |||||||||||
| Research and development | 8 | % | 9 | % | 10 | % | |||||||||||
| Selling, general and administrative | 27 | % | 26 | % | 27 | % | |||||||||||
| Amortization of intangible assets | — | % | — | % | — | % | |||||||||||
| Restructuring charges | 1 | % | 1 | % | — | % | |||||||||||
| Total operating expenses | 50 | % | 54 | % | 57 | % | |||||||||||
| Operating income | 50 | % | 46 | % | 43 | % | |||||||||||
| Interest expense, net | (9) | % | (7) | % | (6) | % | |||||||||||
| Other income, net | 2 | % | 1 | % | 1 | % | |||||||||||
| Income before income taxes | 43 | % | 40 | % | 38 | % | |||||||||||
| Provision for income taxes | 10 | % | 7 | % | 8 | % | |||||||||||
| Net income | 33 | % | 33 | % | 30 | % | |||||||||||
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Cost of Revenues
Cost of revenues consists primarily of employee salaries, incentive compensation, and benefits for personnel directly involved in delivering software products, operating SaaS infrastructure, and providing support, implementation and consulting services; third-party hosting fees related to our SaaS services; overhead, facilities and data center costs; software royalty fees; consumer reporting agency data and processing services; outside services; and travel costs.
The fiscal 2026 over 2025 decrease in cost of revenues of $2.2 million was primarily attributable to a $9.9 million decrease in personnel and labor costs and a $2.1 million decrease in direct materials and other costs, partially offset by a $9.8 million increase in infrastructure and facilities costs. The decrease in personnel and labor costs was primarily attributable to decreased headcount. The decrease in direct materials and other costs was primarily attributable to decreased telecommunications costs that support FICO® Customer Communications Services revenue. The increase in infrastructure and facilities costs was primarily attributable to increased third-party data center hosting costs. Cost of revenues as a percentage of revenues decreased to 14% during fiscal 2026 from 18% during fiscal 2025, primarily due to increased sales of our higher-margin Scores products.
Research and Development
Research and development expenses include personnel and related overhead costs incurred in the development of new products and services, the enhancement and improvement of our existing products and services, and the research of mathematical and statistical models.
The fiscal 2026 over 2025 increase in research and development expenses of $21.0 million was primarily attributable to a $21.9 million increase in infrastructure and facilities costs and a $4.8 million increase in personnel and labor costs, partially offset by a $5.7 million decrease in outside services and other costs. The increase in infrastructure and facilities costs was primarily attributable to increased third-party data center hosting costs. The increase in personnel and labor costs was primarily attributable to increased incentive compensation costs and increased share-based compensation costs. The decrease in outside services and other costs was primarily attributable to decreased third-party contractor costs. Research and development expenses as a percentage of revenues decreased to 8% during fiscal 2026 from 9% during fiscal 2025.
Selling, General and Administrative
Selling, general and administrative expenses consist principally of employee salaries, incentive compensation, commissions, and benefits; advertising and other promotional expenses; travel costs; overhead costs; corporate facilities expenses; legal expenses; and business development expenses.
The fiscal 2026 over 2025 increase in selling, general and administrative expenses of $168.1 million was primarily attributable to a $68.3 million increase in personnel and labor costs, a $68.0 million increase in outside services costs, and a $31.8 million increase in marketing and other costs. The increase in personnel and labor costs was primarily attributable to increased headcount, increased share-based compensation costs, and increased incentive compensation costs. The increase in outside services costs was primarily attributable to a $65.0 million liability recorded in the fourth quarter of fiscal 2026 for a proposed settlement of the antitrust class action lawsuits, as described in Note 18 to the accompanying consolidated financial statements, and increased third-party consulting costs. The increase in marketing and other costs was primarily attributable to increased advertising and other promotional costs and increased business development costs. Selling, general and administrative expenses as a percentage of revenues increased to 27% during fiscal 2026 from 26% during fiscal 2025.
Restructuring Charges
During the fourth quarter of fiscal 2026, we incurred charges of $27.3 million in employee separation costs due to the elimination of approximately 15% of positions across the Company. Cash payments for the remaining employee separation costs will be paid by the end of fiscal 2027. During the fourth quarter of fiscal 2025, we incurred charges of $10.9 million in employee separation costs due to the elimination of 226 positions across the Company. Cash payments for these employee separation costs were paid before the end of fiscal 2026.
Interest Expense, Net
Interest expense includes interest on the senior notes issued in March 2026, May 2025, December 2021, December 2019, and May 2018, as well as interest and credit agreement fees on the revolving line of credit and term loans. On our consolidated statements of income and comprehensive income, interest expense is netted with interest income, which is derived primarily from the investment of funds in excess of our immediate operating requirements.
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The fiscal 2026 over 2025 increase in interest expense, net of $89.7 million was primarily attributable to a higher average outstanding debt balance during fiscal 2026. The higher average debt balance was primarily attributable to the $1.5 billion of 2025 Senior Notes (as defined below) and the $1.0 billion of 2026 Senior Notes (as defined below).
Other Income, Net
Other income, net consists primarily of unrealized investment gains/losses and realized gains/losses on marketable securities classified as trading securities, exchange rate gains/losses resulting from remeasurement of foreign-currency-denominated receivables and cash balances held by our various reporting entities into their respective functional currencies at period-end market rates, net of the impact of offsetting foreign currency forward contracts, and other non-operating items.
The fiscal 2026 over 2025 increase in other income, net of $46.3 million was primarily attributable to a non-operating gain related to the sale of an equity investment in which we had a minority interest, partially offset by foreign exchange losses incurred during fiscal 2026, compared to foreign exchange gains incurred during fiscal 2025, resulting from remeasurement of foreign-currency-denominated receivables and cash balances held by our various reporting entities into their respective functional currencies at period-end market rates, net of the impact of offsetting foreign currency forward contracts.
Provision for Income Taxes
Our effective income tax rates were 24.1%, 18.8% and 20.1% in fiscal 2026, 2025 and 2024, respectively.
The increase in our effective tax rate in fiscal 2026 compared to fiscal 2025 was due to a decrease in excess tax benefits related to share-based compensation.
Operating Income
The following tables set forth certain summary information on a segment basis related to our operating income for fiscal 2026, 2025 and 2024:
| Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||||||||||||||||||
| Segment | 2026 | 2025 | 2024 | 2026 to 2025 | 2025 to 2024 | 2026 to 2025 | 2025 to 2024 | ||||||||||||||||||||||||||||||||||
| (In thousands) | (In thousands) | ||||||||||||||||||||||||||||||||||||||||
| Scores | $ | 1,489,862 | $ | 1,026,243 | $ | 813,354 | $ | 463,619 | $ | 212,889 | 45 | % | 26 | % | |||||||||||||||||||||||||||
| Software | 249,621 | 247,694 | 257,529 | 1,927 | (9,835) | 1 | % | (4) | % | ||||||||||||||||||||||||||||||||
| Total segment operating income | 1,739,483 | 1,273,937 | 1,070,883 | 465,546 | 203,054 | 37 | % | 19 | % | ||||||||||||||||||||||||||||||||
| Unallocated corporate expenses | (261,039) | (181,498) | (186,898) | (79,541) | 5,400 | 44 | % | (3) | % | ||||||||||||||||||||||||||||||||
| Unallocated share-based compensation | (185,457) | (156,667) | (149,439) | (28,790) | (7,228) | 18 | % | 5 | % | ||||||||||||||||||||||||||||||||
| Unallocated amortization expense | — | — | (917) | — | 917 | — | % | (100) | % | ||||||||||||||||||||||||||||||||
| Unallocated restructuring charges | (27,293) | (10,922) | — | (16,371) | (10,922) | 150 | % | — | % | ||||||||||||||||||||||||||||||||
| Operating income | $ | 1,265,694 | $ | 924,850 | $ | 733,629 | 340,844 | 191,221 | 37 | % | 26 | % | |||||||||||||||||||||||||||||
Scores
| Year Ended September 30, | Percentage of Revenues | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | 2026 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| Segment revenues | $ | 1,652,222 | $ | 1,168,575 | $ | 919,650 | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||
| Segment operating expenses | (162,360) | (142,332) | (106,296) | (10) | % | (12) | % | (12) | % | ||||||||||||||||||||||||||
| Segment operating income | $ | 1,489,862 | $ | 1,026,243 | $ | 813,354 | 90 | % | 88 | % | 88 | % | |||||||||||||||||||||||
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Software
| Year Ended September 30, | Percentage of Revenues | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | 2026 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| Segment revenues | $ | 882,651 | $ | 822,294 | $ | 797,876 | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||
| Segment operating expenses | (633,030) | (574,600) | (540,347) | (72) | % | (70) | % | (68) | % | ||||||||||||||||||||||||||
| Segment operating income | $ | 249,621 | $ | 247,694 | $ | 257,529 | 28 | % | 30 | % | 32 | % | |||||||||||||||||||||||
The fiscal 2026 over 2025 increase in operating income of $340.8 million was primarily attributable to a $544.0 million increase in segment revenues, partially offset by a $79.5 million increase in corporate expenses, a $78.5 million increase in segment operating expenses, a $28.8 million increase in share-based compensation cost, and a $16.4 million increase in restructuring charges.
At the segment level, the $465.5 million increase in segment operating income was the result of a $463.6 million increase in our Scores segment operating income and a $1.9 million increase in our Software segment operating income.
The $463.6 million increase in our Scores segment operating income was attributable to a $483.6 million increase in segment revenue, partially offset by a $20.0 million increase in segment operating expenses. Segment operating income as a percentage of segment revenue for Scores increased to 90% from 88%, primarily due to higher business-to-business scores revenue driven by both a higher unit price and an increase in volume of mortgage origination scores.
The $1.9 million increase in our Software segment operating income was attributable to a $60.4 million increase in segment revenue, partially offset by a $58.5 million increase in segment operating expenses. Segment operating income as a percentage of segment revenue for Software decreased to 28% from 30%, primarily attributable to the increases in third-party data center hosting costs and a decrease in sales of higher-margin software recognized at a point in time.
CAPITAL RESOURCES AND LIQUIDITY
Outlook
As of September 30, 2026, we had $217.6 million in cash and cash equivalents, which included $165.9 million held by our foreign subsidiaries. We believe our cash and cash equivalents balances, including those held by our foreign subsidiaries, as well as available borrowings from our $1.0 billion revolving line of credit and anticipated cash flows from operating activities, will be sufficient to fund our working and other capital requirements for at least the next 12 months and thereafter for the foreseeable future, including the $337.5 million principal payments due on our term loan over the next 12 months. Under our current financing arrangements, we have no other significant debt obligations maturing over the next 12 months. For jurisdictions outside the U.S. where cash may be repatriated in the future, the Company expects the net impact of any repatriations to be immaterial to the Company’s overall tax liability.
In the normal course of business, we evaluate the merits of acquiring technology or businesses, or establishing strategic relationships with or investing in these businesses. We may elect to use available cash and cash equivalents to fund such activities in the future. In the event additional needs for cash arise, or if we refinance our existing debt, we may raise additional funds from a combination of sources, including the potential issuance of debt or equity securities. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to take advantage of unanticipated opportunities or respond to competitive pressures could be limited.
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Summary of Cash Flows
| Year Ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Cash provided by (used in): | |||||||||||||||||
| Operating activities | $ | 1,072,065 | $ | 778,807 | $ | 632,964 | |||||||||||
| Investing activities | (45,401) | (43,719) | (27,993) | ||||||||||||||
| Financing activities | (941,129) | (750,329) | (592,923) | ||||||||||||||
| Effect of exchange rate changes on cash | (2,072) | (1,290) | 1,841 | ||||||||||||||
| Increase (decrease) in cash and cash equivalents | $ | 83,463 | $ | (16,531) | $ | 13,889 | |||||||||||
Cash Flows from Operating Activities
Our primary method for funding operations and growth has been through cash flows generated from operating activities. Net cash provided by operating activities totaled $1.1 billion in fiscal 2026 compared to $778.8 million in fiscal 2025. The $293.3 million increase was attributable to a $183.0 million increase in net income, a $69.8 million increase that resulted from timing of receipts and payments in our ordinary course of business, and a $40.5 million increase in non-cash items.
Cash Flows from Investing Activities
Net cash used in investing activities totaled $45.4 million in fiscal 2026 compared to $43.7 million in fiscal 2025. The $1.7 million increase was attributable to a $12.8 million increase in purchases of other investments and a $5.1 million increase in capitalized internal-use software costs, partially offset by a $9.4 million increase in proceeds from sales, net of purchases, of marketable securities and a $6.8 million decrease in purchases of property and equipment.
Cash Flows from Financing Activities
Net cash used in financing activities totaled $941.1 million in fiscal 2026 compared to $750.3 million in fiscal 2025. The $190.8 million increase was primarily attributable to a $1.6 billion increase in repurchases of common stock (including the $1.5 billion paid under the ASR Agreement in fiscal 2026), a $500.0 million decrease in proceeds from issuance of senior notes, and the $400.0 million repayment of 2018 Senior Notes (as defined below), partially offset by a $2.2 billion increase in proceeds, net of payments, from the revolving line of credit and term loans, and a $92.0 million decrease in taxes paid related to net share settlement of equity awards.
Repurchases of Common Stock
In June 2025, our Board of Directors approved a stock repurchase program (the “June 2025 program”), replacing our previously authorized July 2024 stock repurchase program, which was terminated prior to its expiration. The June 2025 program was open-ended and authorized repurchases of shares of our common stock from time to time up to an aggregate cost of $1.0 billion in the open market or in negotiated transactions. In February 2026, our Board of Directors approved a stock repurchase program (the “February 2026 program”), replacing the June 2025 program, which was terminated prior to its expiration. The February 2026 program was open-ended and authorized repurchases of shares of our common stock from time to time up to an aggregate cost of $1.5 billion in the open market or in negotiated transactions. In June 2026, our Board of Directors approved a stock repurchase program (the “June 2026 program”), replacing the February 2026 program, which was terminated prior to its expiration. The June 2026 program is open-ended and authorizes repurchases of shares of our common stock from time to time up to an aggregate cost of $2.0 billion in the open market, in negotiated transactions or through accelerated share repurchase programs. The June 2026 program remains in effect until the total authorized amount is expended or until further action by our Board of Directors.
As of September 30, 2026, we had $500.0 million remaining under the June 2026 program. During fiscal 2026, we expended $3.1 billion under the June 2025 program, the February 2026 program, and the June 2026 program, as applicable, including $1.5 billion under the ASR Agreement entered into as part of the June 2026 program. Under the ASR Agreement, in June 2026 we received an initial delivery of 1,055,103 shares of common stock, representing approximately 80 percent of the total shares expected to be repurchased under the ASR Agreement. In July 2026, we settled the ASR Agreement and received 229,640 additional shares. In total, 1,284,743 shares were repurchased under the ASR Agreement. During fiscal 2025, we expended $1.4 billion under the June 2025 program and previously authorized stock repurchase programs, as applicable.
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Revolving Line of Credit and Term Loan
We have a credit agreement with a syndicate of banks that provides for a $1.0 billion unsecured revolving line of credit that matures on May 13, 2030. On June 5, 2026, we amended our credit agreement to provide for the issuance of a $1.5 billion unsecured term loan that was borrowed in full on June 5, 2026 and matures on May 15, 2028. The credit agreement also provides for an option for us to request additional incremental term loans and/or incremental increases to the revolving line of credit from time to time, in each case subject to the terms and conditions of the credit agreement. Borrowings under the credit agreement 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. Principal on the term loan is to be repaid in consecutive quarterly installments on the last business day of March, June, September, and December equal to (i) $75.0 million from September 30, 2026 through and including June 30, 2027 and (ii) $112.5 million thereafter. 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) 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 for the loans under the credit agreement is determined based on our consolidated leverage ratio. The applicable margin for loans under the revolving line of credit for base rate borrowings ranges from 0% to 1% per annum and for SOFR borrowings ranges from 1% to 2% per annum. The applicable margin for the term loan for base rate borrowings ranges from 0.5% to 1.25% per annum and for SOFR borrowings ranges from 1.5% to 2.25% per annum. In addition, we must pay certain credit agreement fees. The credit agreement contains certain restrictive covenants including a maximum consolidated leverage ratio of 4.5 to 1.0 through December 30, 2026, 4.0 to 1.0 during December 31, 2026 through December 30, 2027, and 3.5 to 1.0 during December 31, 2027 and thereafter, 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, 2026, we had $700.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 5.873% and $1.2 billion in outstanding balance of the term loan at an interest rate of 5.761%, and we were in compliance with all financial covenants under the credit agreement.
Senior Notes
On May 8, 2018, we issued $400.0 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”). The 2018 Senior Notes required interest payments semi-annually at a rate of 5.25% per annum and were to mature on May 15, 2026. On March 26, 2026, prior to the maturity date, we repaid in full the 2018 Senior Notes, utilizing proceeds from the issuance of the 2026 Senior Notes (as defined below). On December 6, 2019, we issued $350.0 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 $550.0 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”). The 2025 Senior Notes require interest payments semi-annually at a rate of 6.00% per annum and will mature on May 15, 2033. On March 20, 2026, we issued $1.0 billion of senior notes in a private offering to qualified institutional investors (the “2026 Senior Notes,” and collectively with the 2018 Senior Notes, the 2019 Senior Notes, the 2021 Senior Notes, and the 2025 Senior Notes, the “Senior Notes”). The 2026 Senior Notes require interest payments semi-annually at a rate of 6.25% per annum and will mature on September 15, 2034. The indentures for the Senior Notes contain certain covenants typical of unsecured obligations. As of September 30, 2026, the carrying value of the Senior Notes was $3.4 billion and we were in compliance with all financial covenants under these obligations.
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Contractual Obligations
The following table presents a summary of our contractual obligations at September 30, 2026:
| Year Ending September 30, | Thereafter | Total | |||||||||||||||||||||||||||||||||||||||
| 2027 | 2028 | 2029 | 2030 | 2031 | |||||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||
Senior Notes (1) | $ | — | $ | 900,000 | $ | — | $ | — | $ | — | $ | 2,500,000 | $ | 3,400,000 | |||||||||||||||||||||||||||
Revolving line of credit and term loan (1) | 337,500 | 847,500 | — | 700,000 | — | — | 1,885,000 | ||||||||||||||||||||||||||||||||||
| Interest due on Senior Notes | 188,500 | 188,500 | 152,500 | 152,500 | 152,500 | 367,500 | 1,202,000 | ||||||||||||||||||||||||||||||||||
| Operating lease obligations | 10,614 | 8,850 | 6,729 | 2,491 | 1,640 | 1,002 | 31,326 | ||||||||||||||||||||||||||||||||||
| Finance lease obligations | 2,562 | 501 | — | — | — | — | 3,063 | ||||||||||||||||||||||||||||||||||
Purchase obligations (2) | 69,701 | 84,529 | 73,066 | 65,273 | — | — | 292,569 | ||||||||||||||||||||||||||||||||||
Unrecognized tax benefits (3) | — | — | — | — | — | — | 21,133 | ||||||||||||||||||||||||||||||||||
| Total commitments | $ | 608,877 | $ | 2,029,880 | $ | 232,295 | $ | 920,264 | $ | 154,140 | $ | 2,868,502 | $ | 6,835,091 | |||||||||||||||||||||||||||
(1)Represents the unpaid principal payments due under the Senior Notes, revolving line of credit, and term loan.
(2)Represents purchase obligations primarily consisting of commitments to purchase certain services. For services that have been delivered under these arrangements as of September 30, 2026, we recorded related liabilities within accounts payable or other accrued liabilities on our consolidated balance sheet, which are excluded from the purchase obligations amount.
(3)Represents unrecognized tax benefits related to uncertain tax positions. As we are not able to reasonably estimate the timing of the payments or the amount by which the liability will increase or decrease over time, the related balances have not been reflected in the section of the table showing payment by fiscal year.
CRITICAL ACCOUNTING ESTIMATES
We prepare our consolidated financial statements in conformity with U.S. GAAP. These accounting principles require management to make certain judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We periodically evaluate our estimates including those relating to revenue recognition, goodwill resulting from business combinations – impairment assessment, share-based compensation, income taxes, and contingencies and litigation. We base our estimates on historical experience and various other assumptions that we believe to be reasonable based on the specific circumstances, the results of which form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and such differences could be material to our financial condition and results of operations. Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations.
While our significant accounting policies are more fully described in Note 1 and Note 9 to our consolidated financial statements included elsewhere in this report, we believe the following accounting policies require the most critical accounting estimates, which involve significant subjectivity and judgment, and changes to such estimates or assumptions could have a material impact on our financial condition or operating results. Therefore, we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully understanding and evaluating our reported financial results.
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Revenue Recognition
For our SaaS subscriptions, 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. For the periods presented, we have not experienced significant changes to our estimates and judgments related to variable consideration in our contracts.
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. 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. For the periods presented, we have not experienced significant changes to our estimates and judgments related to the identification of performance obligations for our contracts.
We determine the standalone selling prices (“SSP”) 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. For the periods presented, we have not experienced significant changes to our estimates and judgments related to the determination of our SSPs.
Goodwill — Impairment Assessment
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.
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. 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 quantitative impairment test. Events and circumstances we consider in performing the 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 quantitative 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 the goodwill quantitative impairment test.
As discussed above, while we believe that the assumptions and estimates utilized were appropriate based on the information available to management, different assumptions, judgments and estimates could materially affect our impairment assessments for our goodwill. For the periods presented, we have not experienced significant changes to our estimates and judgments related to our goodwill impairment assessment. We believe our projected operating results and cash flows would need to be significantly less favorable to have a material impact on our impairment assessment. However, based upon our historical experience with operations, we do not believe there is a reasonable likelihood of a significant change in our projections.
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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). We use the Black-Scholes valuation model to determine the fair value of our stock options and a Monte Carlo valuation model to determine the fair value of our market share units. Our valuation models and generally accepted valuation techniques require us to make assumptions and to apply judgment to determine the fair value of our awards. These assumptions and judgments include estimating the volatility of our stock price, expected dividend yield, employee turnover rates and employee stock option exercise behaviors. For the periods presented, we have not experienced significant changes to our estimates and judgments related to the fair value of our awards. See Note 13 to the accompanying consolidated financial statements for further discussion of our share-based employee benefit plans.
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.
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.
Contingencies and Litigation
We are subject to various proceedings, lawsuits and claims relating to products and services, technology, labor, stockholder and other matters. We are required to assess the likelihood of any adverse outcomes and the potential range of probable losses in these matters. If the potential loss is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. If the potential loss is considered less than probable or the amount cannot be reasonably estimated, disclosure of the matter is considered. The amount of loss accrual or disclosure, if any, is determined after analysis of each matter, and is subject to adjustment if warranted by new developments or revised strategies. Due to uncertainties related to these matters, accruals or disclosures are based on the best information available at the time. Significant judgment is required in both the assessment of likelihood and in the determination of a range of potential losses. Revisions in the estimates of the potential liabilities have had, and in the future could have, a material impact on our consolidated financial position or consolidated results of operations. For the periods presented, except as noted below, we have not experienced significant changes to our estimates and judgments related to the assessment of likelihood and in the determination of a range of potential losses.
During the fourth quarter of fiscal 2026, as a result of the term sheet we entered into on September 29, 2026 to settle the antitrust lawsuits described in Part I, Item 3 “Legal Proceedings,” and Note 18, “Contingencies,” we revised our assessment of those lawsuits. We had previously not considered a loss probable and had concluded that any reasonably possible loss was not material. We have now concluded, based on the proposed settlement terms, that a loss is probable and reasonably estimable, and therefore we have recorded an accrual of $65.0 million included in selling, general and administrative expenses for the fourth quarter. The settlement remains subject to court approval.
51
New Accounting Pronouncements
For information about recent accounting pronouncements recently adopted and not yet adopted and the impact on our consolidated financial statements, refer to Part II, Item 8, Financial Statements and Supplementary Data, Note 1, Nature of Business and Summary of Significant Accounting Policies, in our accompanying Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Market Risk Disclosures
We are exposed to market risk related to changes in interest rates and foreign exchange rates. We do not use derivative financial instruments for speculative or trading purposes.
Interest Rate
We maintain an investment portfolio consisting of bank deposits and bank time deposits. The funds provide daily liquidity and may be subject to interest rate risk and fall in value if market interest rates increase. We do not expect our operating expenses to be affected to any significant degree by a sudden change in market interest rates. The following table presents the principal amounts and related weighted-average yields for our investments with interest rate risk at September 30, 2026 and 2025:
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||||||||||||||
| Cost Basis | Carrying Amount | Average Yield | Cost Basis | Carrying Amount | Average Yield | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 217,599 | $ | 217,599 | 2.50 | % | $ | 134,136 | $ | 134,136 | 1.77 | % | |||||||||||||||||||||||
The fair value of the Senior Notes may increase or decrease due to various factors, including fluctuations in market interest rates and fluctuations in general economic conditions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Capital Resources and Liquidity” for additional information on the Senior Notes. The following table presents the face values and fair values for the Senior Notes at September 30, 2026 and 2025:
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| Face Value | Fair Value | Face Value | Fair Value | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| The 2018 Senior Notes | $ | — | — | $ | 400,000 | $ | 399,500 | ||||||||||||||||
| The 2019 Senior Notes and the 2021 Senior Notes | 900,000 | 859,500 | 900,000 | 875,250 | |||||||||||||||||||
| The 2025 Senior Notes | 1,500,000 | 1,335,000 | 1,500,000 | 1,518,750 | |||||||||||||||||||
| The 2026 Senior Notes | 1,000,000 | 887,500 | — | — | |||||||||||||||||||
| Total | $ | 3,400,000 | $ | 3,082,000 | $ | 2,800,000 | $ | 2,793,500 | |||||||||||||||
We have interest rate risk with respect to our unsecured revolving line of credit and term loan. 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) 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 for the loans under the credit agreement is determined based on our consolidated leverage ratio. The applicable margin for loans under the revolving line of credit for base rate borrowings ranges from 0% to 1% per annum and for SOFR borrowings ranges from 1% to 2% per annum. The applicable margin for the term loan for base rate borrowings ranges from 0.5% to 1.25% per annum and for SOFR borrowings ranges from 1.5% to 2.25% per annum. A change in interest rates on this variable rate debt impacts the interest incurred and cash flows, but does not impact the fair value of the instrument. As of September 30, 2026, we had $700.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 5.873% and $1.2 billion in outstanding balance of the term loan at an interest rate of 5.761%.
52
Foreign Currency Forward Contracts
We maintain a program to manage our foreign exchange rate risk on existing foreign-currency-denominated receivables and cash balances by entering into forward contracts to sell or buy foreign currencies. At period end, foreign-currency-denominated receivables and cash balances held by our various reporting entities are remeasured into their respective functional currencies at current market rates. The change in value from this remeasurement is then reported as a foreign exchange gain or loss for that period in our accompanying consolidated statements of income and comprehensive income and the resulting gain or loss on the forward contract mitigates the foreign exchange rate risk of the associated assets. All of our foreign currency forward contracts have maturity periods of less than three months. Such derivative financial instruments are subject to market risk.
The following tables summarize our outstanding foreign currency forward contracts, by currency, at September 30, 2026 and 2025:
| September 30, 2026 | ||||||||||||||||||||
| Contract Amount | Fair Value | |||||||||||||||||||
| Foreign Currency | USD | USD | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Sell foreign currency: | ||||||||||||||||||||
| Euro (EUR) | EUR | 5,900 | $ | 6,700 | — | |||||||||||||||
| Buy foreign currency: | ||||||||||||||||||||
| British pound (GBP) | GBP | 8,029 | $ | 10,700 | — | |||||||||||||||
| Singapore dollar (SGD) | SGD | 8,756 | $ | 6,900 | — | |||||||||||||||
| 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 | — | ||||||||||||
The foreign currency forward contracts were entered into on September 30, 2026 and 2025; therefore, their fair value was $0 at each of these dates.
53
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, 2026 and 2025, 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, 2026, 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, 2026, 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, 2026 and 2025, and the results of operations and cash flows for each of the three years in the period ended September 30, 2026, 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, 2026, 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.
54
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 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.
◦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.
55
| /s/ | |||||
| November 6, 2026 | |||||
| We have served as the Company’s auditor since 2004. | |||||
56
FAIR ISAAC CORPORATION
CONSOLIDATED BALANCE SHEETS
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands, except par value data) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Marketable securities | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Deferred income taxes | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Deficit | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued compensation and employee benefits | |||||||||||
| Other accrued liabilities | |||||||||||
| Deferred revenue | |||||||||||
| Current maturities on debt | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ deficit: | |||||||||||
Preferred stock ($ | |||||||||||
Common stock ($ | |||||||||||
| Additional paid-in-capital | |||||||||||
Treasury stock, at cost ( | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ deficit | ( | ( | |||||||||
| Total liabilities and stockholders’ deficit | $ | $ | |||||||||
See accompanying notes.
57
FAIR ISAAC CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| Year Ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| Revenues: | |||||||||||||||||
| On-premises and SaaS software | $ | $ | $ | ||||||||||||||
| Professional services | |||||||||||||||||
| Scores | |||||||||||||||||
| Total revenues | |||||||||||||||||
| Operating expenses: | |||||||||||||||||
| Cost of revenues | |||||||||||||||||
| Research and development | |||||||||||||||||
| Selling, general and administrative | |||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||
| Restructuring charges | |||||||||||||||||
| Total operating expenses | |||||||||||||||||
| Operating income | |||||||||||||||||
| Interest expense, net | ( | ( | ( | ||||||||||||||
| Other income, net | |||||||||||||||||
| Income before income taxes | |||||||||||||||||
| Provision for income taxes | |||||||||||||||||
| Net income | |||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||
| Foreign currency translation adjustments | ( | ( | |||||||||||||||
| Comprehensive income | $ | $ | $ | ||||||||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
| Shares used in computing basic earnings per share: | |||||||||||||||||
| Basic | |||||||||||||||||
| Diluted | |||||||||||||||||
See accompanying notes.
58
FAIR ISAAC CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
Years Ended September 30, 2026, 2025 and 2024
| 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, 2023 | $ | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Issuance of treasury stock under employee stock plans | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Issuance of treasury stock under employee stock plans | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Issuance of treasury stock under employee stock plans | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
See accompanying notes.
59
FAIR ISAAC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Share-based compensation | |||||||||||||||||
| Deferred income taxes | ( | ( | |||||||||||||||
| Net gain on marketable securities | ( | ( | ( | ||||||||||||||
| Non-cash operating lease costs | |||||||||||||||||
| Provision of doubtful accounts | |||||||||||||||||
| Gain on sale of equity investment | ( | ||||||||||||||||
| Net loss on sales and abandonment of property and equipment | |||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable | ( | ( | ( | ||||||||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||||||||
| Accounts payable | |||||||||||||||||
| Accrued compensation and employee benefits | |||||||||||||||||
| Other liabilities | |||||||||||||||||
| Deferred revenue | |||||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Purchases of property and equipment | ( | ( | ( | ||||||||||||||
| Capitalized internal-use software costs | ( | ( | ( | ||||||||||||||
| Proceeds from sales of marketable securities | |||||||||||||||||
| Purchases of marketable securities | ( | ( | ( | ||||||||||||||
| Purchases of other investments | ( | ||||||||||||||||
| Net cash used in investing activities | ( | ( | ( | ||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Proceeds from revolving line of credit and term loans | |||||||||||||||||
| Payments on revolving line of credit and term loans | ( | ( | ( | ||||||||||||||
| Proceeds from issuance of senior notes | |||||||||||||||||
| Payments on senior notes | ( | ||||||||||||||||
| Payments on debt issuance costs | ( | ( | ( | ||||||||||||||
| Payments on finance leases | ( | ( | ( | ||||||||||||||
| Proceeds from issuance of treasury stock under employee stock plans | |||||||||||||||||
| Taxes paid related to net share settlement of equity awards | ( | ( | ( | ||||||||||||||
| Repurchases of common stock, inclusive of excise tax | ( | ( | ( | ||||||||||||||
| Net cash used in financing activities | ( | ( | ( | ||||||||||||||
| Effect of exchange rate changes on cash | ( | ( | |||||||||||||||
| Increase (decrease) in cash and cash equivalents | ( | ||||||||||||||||
| Cash and cash equivalents, beginning of year | |||||||||||||||||
| Cash and cash equivalents, end of year | $ | $ | $ | ||||||||||||||
| Supplemental disclosures of cash flow information: | |||||||||||||||||
Cash paid for income taxes, net of refunds of $ | $ | $ | $ | ||||||||||||||
| Cash paid for interest | $ | $ | $ | ||||||||||||||
| Supplemental disclosures of non-cash investing and financing activities: | |||||||||||||||||
| Unsettled repurchases of common stock, inclusive of excise tax accrued, but not yet paid | $ | $ | $ | ||||||||||||||
| Purchase of property and equipment included in accounts payable | $ | $ | $ | ||||||||||||||
| Finance lease obligation incurred | $ | $ | $ | ||||||||||||||
| Receivable from sale of equity investment | $ | $ | $ | ||||||||||||||
See accompanying notes.
60
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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 70 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
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, 2026, 2025 and 2024. Investments with remaining maturities over one year are classified as long-term investments.
61
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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 | |||||||||||
| Internal-use software | |||||||||||
| Office furniture and equipment | to | ||||||||||
| Leasehold improvements | |||||||||||
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.
62
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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. 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 quantitative impairment test. Events and circumstances we consider in performing the 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 quantitative 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 the goodwill quantitative impairment test.
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.
63
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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. Our derivative instruments are not designated as hedging instruments. As a result, the related cash flows are included in cash flows from operating activities in our consolidated statements of cash flows.
We recorded transactional foreign exchange gains (losses) of $(1.1 ) million, $1.1 million and $(0.6 ) million during fiscal 2026, 2025 and 2024, respectively.
Share-Based Compensation
Advertising and Promotion Costs
64
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
New Accounting Pronouncements
Recent Accounting Pronouncements Adopted
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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. We adopted ASU 2023-09 in fiscal 2026 on a prospective basis and the adoption resulted in expanded disclosures as presented in Note 12.
Recent Accounting Pronouncements Not Yet Adopted
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 with the fiscal year ending September 30, 2028, 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 and interim periods 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 and related disclosures.
We do not expect that any other recently issued accounting pronouncements will have a significant effect on our consolidated financial statements.
2. Cash, Cash Equivalents and Marketable Securities
The following is a summary of cash, cash equivalents and marketable securities at September 30, 2026 and 2025:
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Cash and Cash Equivalents: | |||||||||||||||||||||||
| Cash | $ | $ | $ | $ | |||||||||||||||||||
| Money market funds | |||||||||||||||||||||||
| Bank time deposits | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Marketable Securities: | |||||||||||||||||||||||
| Marketable securities | $ | $ | $ | $ | |||||||||||||||||||
The assets included in marketable securities represent long-term marketable equity securities held under a non-qualified deferred compensation plan for certain officers and senior management employees, which are distributed upon separation from service or at a specific date while still employed. These investments are treated as trading securities and recorded at fair value.
65
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
3. 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 bank time deposits and certain marketable securities and our Level 1 liabilities included senior notes as of September 30, 2026 and 2025.
•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, 2026 and 2025.
•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, 2026 and 2025.
The following tables represent financial assets that we measured at fair value on a recurring basis at September 30, 2026 and 2025:
| September 30, 2026 | Active Markets for Identical Instruments (Level 1) | Fair Value as of September 30, 2026 | |||||||||
| (In thousands) | |||||||||||
| Assets: | |||||||||||
Cash equivalents (1) | $ | $ | |||||||||
Marketable securities (2) | |||||||||||
| Total | $ | $ | |||||||||
| September 30, 2025 | Active Markets for Identical Instruments (Level 1) | Fair Value as of September 30, 2025 | |||||||||
| (In thousands) | |||||||||||
| Assets: | |||||||||||
Cash equivalents (1) | $ | $ | |||||||||
Marketable securities (2) | |||||||||||
| Total | $ | $ | |||||||||
(1)Included in cash and cash equivalents on our consolidated balance sheets at September 30, 2026 and 2025. Not included in these tables are cash deposits of $212.4 million and $134.1 million at September 30, 2026 and 2025, respectively.
(2)Represents securities held under a non-qualified deferred compensation plan for certain officers and senior management employees, which are distributed upon separation from service or at a specific date while still employed. Included in marketable securities on our consolidated balance sheets at September 30, 2026 and 2025.
See Note 7 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, 2026, 2025 or 2024.
66
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
4. 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 receivables 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 receivables 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, 2026 and 2025:
| September 30, 2026 | ||||||||||||||||||||
| Contract Amount | Fair Value | |||||||||||||||||||
| Foreign Currency | USD | USD | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Sell foreign currency: | ||||||||||||||||||||
| Euro (EUR) | EUR | $ | ||||||||||||||||||
| Buy foreign currency: | ||||||||||||||||||||
| British pound (GBP) | GBP | $ | ||||||||||||||||||
| Singapore dollar (SGD) | SGD | $ | ||||||||||||||||||
| September 30, 2025 | ||||||||||||||||||||
| Contract Amount | Fair Value | |||||||||||||||||||
| Foreign Currency | USD | USD | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Sell foreign currency: | ||||||||||||||||||||
| Euro (EUR) | EUR | $ | ||||||||||||||||||
| Buy foreign currency: | ||||||||||||||||||||
| British pound (GBP) | GBP | $ | ||||||||||||||||||
| Singapore dollar (SGD) | SGD | $ | ||||||||||||||||||
The foreign currency forward contracts were entered into on September 30, 2026 and 2025; therefore, their fair value was $0
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, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands) | |||||||||||||||||
Gains (losses) on foreign currency forward contracts | $ | ( | $ | ( | $ | ||||||||||||
67
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
5. Goodwill
The following table summarizes changes to goodwill during fiscal 2026 and 2025, both in total and as allocated to our segments. As of September 30, 2026, there was no accumulated goodwill impairment loss.
| Scores | Software | Total | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ||||||||||||||
| Foreign currency translation adjustment | |||||||||||||||||
| Balance at September 30, 2025 | |||||||||||||||||
| Foreign currency translation and other adjustments | |||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ||||||||||||||
6. Composition of Certain Financial Statement Captions
The following table presents the composition of prepaid expenses and other current assets at September 30, 2026 and 2025:
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
| Prepaid expenses and other current assets: | |||||||||||
| Receivable from sale of equity investment | $ | $ | |||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
The following table presents the composition of property and equipment, net at September 30, 2026 and 2025:
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
| Property and equipment, net: | |||||||||||
| Data processing equipment and purchased software | $ | $ | |||||||||
| Internal-use software | |||||||||||
| Office furniture and equipment | |||||||||||
| Leasehold improvements | |||||||||||
| Less: accumulated depreciation and amortization | ( | ( | |||||||||
| Total | $ | $ | |||||||||
The following table presents the composition of other accrued liabilities at September 30, 2026 and 2025:
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
| Other accrued liabilities: | |||||||||||
| Interest payable | $ | $ | |||||||||
| Proposed litigation settlement (see Note 18) | |||||||||||
| Other | |||||||||||
| Total | $ | $ | |||||||||
68
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
7. Debt
The following table represents our debt at carrying value at September 30, 2026 and 2025:
| September 30, 2026 | September 30, 2025 | ||||||||||
| (In thousands) | |||||||||||
| Current maturities on debt: | |||||||||||
| Term loan | $ | $ | |||||||||
| The 2018 Senior Notes | |||||||||||
| Less: debt issuance costs | ( | ||||||||||
| Current maturities on debt | |||||||||||
| Long-term debt: | |||||||||||
| Revolving line of credit | |||||||||||
| Term loan | |||||||||||
| The 2019 Senior Notes and the 2021 Senior Notes | |||||||||||
| The 2025 Senior Notes | |||||||||||
| The 2026 Senior Notes | |||||||||||
| Less: debt issuance costs | ( | ( | |||||||||
| Long-term debt | |||||||||||
| Total debt | $ | $ | |||||||||
Revolving Line of Credit and Term Loan
We have a credit agreement with a syndicate of banks that provides for a $1.0 billion unsecured revolving line of credit that matures on May 13, 2030. On June 5, 2026, we amended our credit agreement to provide for the issuance of a $1.5 billion unsecured term loan that was borrowed in full on June 5, 2026 and matures on May 15, 2028. The credit agreement also provides for an option for us to request additional incremental term loans and/or incremental increases to the revolving line of credit from time to time, in each case subject to the terms and conditions of the credit agreement. Borrowings under the credit agreement 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. Principal on the term loan is to be repaid in consecutive quarterly installments on the last business day of March, June, September, and December equal to (i) $75.0 million from September 30, 2026 through and including June 30, 2027 and (ii) $112.5 million thereafter. 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) 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 for the loans under the credit agreement is determined based on our consolidated leverage ratio. The applicable margin for loans under the revolving line of credit for base rate borrowings ranges from 0 % to 1 % per annum and for SOFR borrowings ranges from 1 % to 2 % per annum. The applicable margin for the term loan for base rate borrowings ranges from 0.5 % to 1.25 % per annum and for SOFR borrowings ranges from 1.5 % to 2.25 % per annum. In addition, we must pay certain credit agreement fees. The credit agreement contains certain restrictive covenants including a maximum consolidated leverage ratio of 4.5 to 1.0 through December 30, 2026, 4.0 to 1.0 during December 31, 2026 through December 30, 2027, and 3.5 to 1.0 during December 31, 2027 and thereafter, 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, 2026, we had $700.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 5.873 % and $1.2 billion in outstanding balance of the term loan at an interest rate of 5.761 %, and we were in compliance with all financial covenants under the credit agreement.
69
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
Future principal payments for the term loan are as follows:
| Year Ending September 30, | (In thousands) | ||||
| 2027 | $ | ||||
| 2028 | |||||
| Total | $ | ||||
Senior Notes
On May 8, 2018, we issued $400.0 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”). The 2018 Senior Notes required interest payments semi-annually at a rate of 5.25 % per annum and were to mature on May 15, 2026. On March 26, 2026, prior to the maturity date, we repaid in full the 2018 Senior Notes, utilizing proceeds from the issuance of the 2026 Senior Notes (as defined below).
On December 6, 2019, we issued $350.0 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 $550.0 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”). The 2025 Senior Notes require interest payments semi-annually at a rate of 6.00 % per annum and will mature on May 15, 2033.
On March 20, 2026, we issued $1.0 billion of senior notes in a private offering to qualified institutional investors (the “2026 Senior Notes,” and collectively with the 2018 Senior Notes, the 2019 Senior Notes, the 2021 Senior Notes, and the 2025 Senior Notes, the “Senior Notes”). The 2026 Senior Notes require interest payments semi-annually at a rate of 6.25 % per annum and will mature on September 15, 2034.
The indentures for the Senior Notes contain certain covenants typical of unsecured obligations and we were in compliance as of September 30, 2026.
The following table presents the face values and fair values for the Senior Notes at September 30, 2026 and 2025:
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| Face Value | Fair Value | Face Value | Fair Value | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| The 2018 Senior Notes | $ | $ | $ | $ | |||||||||||||||||||
| The 2019 Senior Notes and the 2021 Senior Notes | |||||||||||||||||||||||
| The 2025 Senior Notes | |||||||||||||||||||||||
| The 2026 Senior Notes | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
70
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
Future principal payments for the Senior Notes are as follows:
| Year Ending September 30, | (In thousands) | ||||
| 2027 | $ | ||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| 2031 | |||||
| Thereafter | |||||
| Total | $ | ||||
8. Accelerated Share Repurchase
Our Board of Directors has authorized us to make repurchases of shares of our common stock from time to time in the open market, in negotiated transactions, or through accelerated share repurchase programs. As part of the broader stock repurchase program, we entered into an accelerated share repurchase agreement (“ASR Agreement”) with Wells Fargo Securities, Inc. (“Wells Fargo Securities”) on June 5, 2026 to repurchase $1.5 billion of our common stock. The ASR Agreement was accounted for as two separate transactions: (1) a repurchase of shares of common stock and (2) an equity-linked contract on our own common stock. Pursuant to the ASR Agreement, in June 2026 we paid $1.5 billion to Wells Fargo Securities and received an initial delivery of 1,055,103 shares of common stock, which had a value of approximately $1.2 billion, representing approximately 80 percent of the total number of expected shares to be repurchased under the ASR Agreement. The equity-linked contract for the remaining $300.0 million, representing shares to be delivered by Wells Fargo Securities to us under the ASR Agreement at settlement, was recorded as a reduction within stockholders’ deficit and was settled in July 2026 with 229,640 additional shares of common stock delivered to us. In total, 1,284,743 shares were repurchased under the ASR Agreement. We were not required to make any additional cash payments or deliver any shares of common stock to Wells Fargo Securities upon settlement of the ASR Agreement.
9. Revenue from Contracts with Customers
Contracts with Customers
Our 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, 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.
71
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
Our SaaS products provide customers with access to and standard support for our software on a subscription basis, delivered through third-party cloud services or our own infrastructure. 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.
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
The following tables provide information about disaggregated revenue by primary geographical market:
| Year Ended September 30, 2026 | |||||||||||||||||||||||
| Scores | Software | Total | Percentage | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
Americas (*) | $ | $ | $ | % | |||||||||||||||||||
| Europe, Middle East and Africa | % | ||||||||||||||||||||||
| Asia Pacific | % | ||||||||||||||||||||||
| Total | $ | $ | $ | % | |||||||||||||||||||
(*) Americas revenue included U.S. revenue of $2.0 billion for fiscal 2026.
72
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
| Year Ended September 30, 2025 | |||||||||||||||||||||||
| Scores | Software | Total | Percentage | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
Americas (*) | $ | $ | $ | % | |||||||||||||||||||
| Europe, Middle East and Africa | % | ||||||||||||||||||||||
| Asia Pacific | % | ||||||||||||||||||||||
| Total | $ | $ | $ | % | |||||||||||||||||||
(*) Americas revenue included U.S. revenue of $1.5 billion for fiscal 2025.
| Year Ended September 30, 2024 | |||||||||||||||||||||||
| Scores | Software | Total | Percentage | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
Americas (*) | $ | $ | $ | % | |||||||||||||||||||
| Europe, Middle East and Africa | % | ||||||||||||||||||||||
| Asia Pacific | % | ||||||||||||||||||||||
| Total | $ | $ | $ | % | |||||||||||||||||||
(*) Americas revenue included U.S. revenue of $1.3 billion for fiscal 2024.
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 | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | 2026 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| On-premises software | $ | $ | $ | % | % | % | |||||||||||||||||||||||||||||
| SaaS software | % | % | % | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | % | % | % | |||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | 2026 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Platform software (*) | $ | $ | $ | % | % | % | |||||||||||||||||||||||||||||
| Non-platform software | % | % | % | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | % | % | % | |||||||||||||||||||||||||||||
(*) 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.
73
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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 | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | 2026 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Software recognized at a point in time (1) | $ | $ | $ | % | % | % | |||||||||||||||||||||||||||||
Software recognized over contract term (2) | % | % | % | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | % | % | % | |||||||||||||||||||||||||||||
(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 | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | 2026 | 2025 | 2024 | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Business-to-business Scores | $ | $ | $ | % | % | % | |||||||||||||||||||||||||||||
| Business-to-consumer Scores | % | % | % | ||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | % | % | % | |||||||||||||||||||||||||||||
We derive a substantial portion of revenues from our contracts with the three major consumer reporting agencies, Experian, TransUnion, and Equifax. Revenues collectively generated by agreements with these customers accounted for 60 %, 51 % and 45 % of our total revenues in fiscal 2026, 2025 and 2024, respectively, with all three consumer reporting agencies each contributing more than 10 10
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.
Receivables at September 30, 2026 and 2025 consisted of the following:
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
| Billed | $ | $ | |||||||||
| Unbilled | |||||||||||
| Less: allowance for doubtful accounts | ( | ( | |||||||||
| Net receivables | |||||||||||
Less: long-term receivables (*) | ( | ( | |||||||||
Short-term receivables (*) | $ | $ | |||||||||
(*) Short-term receivables and long-term receivables were recorded in accounts receivable, net and other assets, respectively, within the accompanying consolidated balance sheets.
74
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
Activity in the allowance for doubtful accounts was as follows:
| Year Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
| Allowance for doubtful accounts, beginning balance | $ | $ | |||||||||
| Add: expense | |||||||||||
| Less: write-offs, net of recoveries | ( | ||||||||||
| Allowance for doubtful accounts, ending balance | $ | $ | |||||||||
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, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
| Deferred revenues, beginning balance | $ | $ | |||||||||
| Revenue recognized that was included in the deferred revenues balance at the beginning of the period | ( | ( | |||||||||
| Increases due to billings, excluding amounts recognized as revenue during the period | |||||||||||
Deferred revenues, ending balance (*) | $ | $ | |||||||||
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.
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 $701.5 million as of September 30, 2026, approximately 50 13 months and the remainder thereafter. Revenue allocated to remaining performance obligations was $655.7 million as of September 30, 2025.
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.
75
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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 $64.4 million and $63.2 million at September 30, 2026 and 2025, 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 $10.8 million, $9.9 million, and $9.2 million during the years ended September 30, 2026, 2025 and 2024, respectively. There was no
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.
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 $10.8 million, $10.2 million and $9.5 million during fiscal 2026, 2025 and 2024, 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 $68.8 million, $60.8 million and $62.5 million during fiscal 2026, 2025 and 2024, respectively.
76
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
11. Restructuring Charges
During fiscal 2026, we incurred restructuring charges of $27.3 million in employee separation costs due to the elimination of approximately 15 % of positions across the Company. Cash payments for the remaining employee separation costs will be paid by the end of fiscal 2027.
During fiscal 2025, we incurred restructuring charges of $10.9 million in employee separation costs due to the elimination of 226 positions across the Company. Cash payments for these employee separation costs were paid before the end of fiscal 2026.
There were no restructuring charges incurred during fiscal 2024.
The following table summarizes our restructuring accrual for employee separation costs. At September 30, 2026 and 2025, the balance was classified as current liabilities and recorded in other accrued liabilities within the accompanying consolidated balance sheets.
| Year Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
| Restructuring accrual, beginning balance | $ | $ | |||||||||
| Expense additions | |||||||||||
| Cash payments | ( | ( | |||||||||
| Restructuring accrual, ending balance | $ | $ | |||||||||
12. Income Taxes
The provision for income taxes was as follows during fiscal 2026, 2025 and 2024:
| Year ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | $ | $ | ||||||||||||||
| State | |||||||||||||||||
| Foreign | |||||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | ( | ( | |||||||||||||||
| State | ( | ( | |||||||||||||||
| Foreign | ( | ( | |||||||||||||||
| ( | ( | ||||||||||||||||
| Total provision | $ | $ | $ | ||||||||||||||
The foreign provision was based on foreign pre-tax earnings of $141.4 million, $144.5 million and $150.8 million in fiscal 2026, 2025 and 2024, respectively. Current foreign tax expense related to foreign tax withholdings was $14.6 million, $15.6 million and $14.6 million in fiscal 2026, 2025 and 2024, respectively. Foreign withholding tax and related foreign tax credits are included in current tax expense above.
77
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
Deferred tax assets and liabilities at September 30, 2026 and 2025 were as follows:
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
| Deferred tax assets: | |||||||||||
| Loss and credit carryforwards | $ | $ | |||||||||
| Compensation benefits | |||||||||||
| Operating lease liabilities | |||||||||||
| Research and development costs | |||||||||||
| Proposed litigation settlement | |||||||||||
| Other assets | |||||||||||
| Total deferred tax assets | |||||||||||
| Deferred tax liabilities: | |||||||||||
| Intangible assets | ( | ( | |||||||||
| Deferred commission | ( | ( | |||||||||
| Operating lease right-of-use assets | ( | ( | |||||||||
| Gain on sale of equity investment | ( | ||||||||||
| Other liabilities | ( | ( | |||||||||
| Total deferred tax liabilities | ( | ( | |||||||||
| Deferred tax assets, net | $ | $ | |||||||||
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, 2026.
As of September 30, 2026, we had an available U.S. federal net operating loss (“NOL”) carryforward of approximately $1.2 million. The U.S. federal NOL was acquired in connection with our acquisition of Infoglide in fiscal 2013. The U.S. federal NOL carryforward will expire in fiscal 2032, 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. We had available an excess California state research credit of approximately $6.3 million as of September 30, 2026.
Beginning in the fiscal year ended September 30, 2026, we adopted ASU 2023-09 prospectively. A reconciliation of the federal statutory income tax rate to our effective income tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended September 30, 2026 is as follows:
78
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
| Year Ended September 30, 2026 | |||||||||||||||||
| Amount | % | ||||||||||||||||
| (In thousands) | |||||||||||||||||
| Income tax provision at U.S. federal statutory rate | $ | % | |||||||||||||||
State income taxes, net of U.S. federal benefit (*) | % | ||||||||||||||||
| Foreign tax effects | % | ||||||||||||||||
| Effects of cross-border tax laws | ( | ( | % | ||||||||||||||
| Tax credits | |||||||||||||||||
| Research credits | ( | ( | % | ||||||||||||||
| Foreign tax credits | ( | ( | % | ||||||||||||||
| Nontaxable or nondeductible items | |||||||||||||||||
| Limitations on executive compensations | % | ||||||||||||||||
| Share-based compensation windfall | ( | ( | % | ||||||||||||||
| Other | % | ||||||||||||||||
| Changes in unrecognized tax benefits | % | ||||||||||||||||
| Other adjustments | % | ||||||||||||||||
| Recorded income tax provision | $ | % | |||||||||||||||
(*) State taxes in California and Florida made up the majority (greater than 50 percent) of this category.
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 and 2024 is shown below:
| Year Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| (In thousands) | |||||||||||
| Income tax provision at U.S. federal statutory rate | $ | $ | |||||||||
| State income taxes, net of U.S. federal benefit | |||||||||||
| Foreign tax rate differential | |||||||||||
| Research credits | ( | ( | |||||||||
| Valuation allowance | ( | ||||||||||
| Excess tax benefits relating to share-based compensation | ( | ( | |||||||||
| GILTI, FDII, BEAT and FTC | ( | ( | |||||||||
| Other | |||||||||||
| Recorded income tax provision | $ | $ | |||||||||
Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended September 30, 2026 is as follows:
| Year Ended September 30, 2026 | |||||
| (In thousands) | |||||
| Federal | $ | ||||
| State | |||||
| California | |||||
| Other | |||||
| Foreign | |||||
| United Kingdom | |||||
| Other | |||||
| Cash paid for income taxes, net of refunds received | $ | ||||
79
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
As of September 30, 2026, we had approximately $130.6 million of unremitted earnings of non-U.S. subsidiaries. We have provided $3.4 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, we expect the net impact of any future repatriations to be immaterial to our 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 2023.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
| Year Ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Gross unrecognized tax benefits at beginning of year | $ | $ | $ | ||||||||||||||
| Gross increases for tax positions in prior years | |||||||||||||||||
| Gross decreases for tax positions in prior years | ( | ||||||||||||||||
| Gross increases based on tax positions related to the current year | |||||||||||||||||
| Decreases due to statute expiration | ( | ( | ( | ||||||||||||||
| Gross unrecognized tax benefits at end of year | $ | $ | $ | ||||||||||||||
We had $21.1 million of total unrecognized tax benefits as of September 30, 2026, including $19.3 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 in the uncertain tax benefits in the next twelve months.
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, 2026, we had accrued interest of $2.3 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 has been adopted by a number of jurisdictions in which we operate. Pillar Two did not have a material impact on our fiscal 2026 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.
80
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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, 2026, there were 3,993,522 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, 2026, there were 811,390 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 $185.5 million, $156.7 million and $149.4 million in fiscal 2026, 2025 and 2024, respectively. The total tax benefit related to this share-based compensation expense was $21.0 million, $15.3 million and $15.9 million in fiscal 2026, 2025 and 2024, respectively. As of September 30, 2026, there was $233.3 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 2.47 years.
In fiscal 2026 we received $5.9 million in cash from stock option exercises, with the tax benefit realized for the tax deductions from these exercises of $3.0 million.
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 2026:
| Shares | Weighted-average Grant-date Fair Value | ||||||||||
| (In thousands) | |||||||||||
| Outstanding at September 30, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Released | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Outstanding at September 30, 2026 | $ | ||||||||||
The weighted-average fair value of the RSUs granted was $1,501.46 , $2,119.14 and $1,150.58 during fiscal 2026, 2025 and 2024, respectively. The total intrinsic value of the RSUs that vested was $181.8 million, $274.7 million and $171.0 million during fiscal 2026, 2025 and 2024, respectively, determined as of the date of vesting.
Performance Share Units
81
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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 2026:
| Shares | Weighted- average Grant-date Fair Value | ||||||||||
| (In thousands) | |||||||||||
| Outstanding at September 30, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Released | ( | ||||||||||
| Outstanding at September 30, 2026 | $ | ||||||||||
The weighted-average fair value of the PSUs granted was $1,751.69 , $2,227.11 and $1,134.39 during fiscal 2026, 2025 and 2024, respectively. The total intrinsic value of the PSUs that vested was $48.3 million, $101.1 million and $65.2 million during fiscal 2026, 2025 and 2024, respectively, determined as of the date of vesting.
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 , 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 2026, 2025 and 2024:
| Year Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | ||||||||||||||||||||||||
Expected volatility in FICO’s stock price | % | % | % | |||||||||||||||||||||||
| Expected volatility in Russell 3000 Index | N/A | N/A | % | |||||||||||||||||||||||
| Expected volatility in S&P 500 Index (peer average) | % | % | N/A | |||||||||||||||||||||||
Correlation between FICO and the Russell 3000 Index | N/A | N/A | % | |||||||||||||||||||||||
Correlation between FICO and the S&P 500 Index | % | % | N/A | |||||||||||||||||||||||
| Risk-free interest rate | % | % | % | |||||||||||||||||||||||
| 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 2026:
82
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
| Shares | Weighted- average Grant-date Fair Value | ||||||||||
| (In thousands) | |||||||||||
| Outstanding at September 30, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Released | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Outstanding at September 30, 2026 | $ | ||||||||||
The weighted-average fair value of the MSUs granted was $1,878.31 , $1,596.70 and $1,014.75 during fiscal 2026, 2025 and 2024, respectively. The total intrinsic value of the MSUs that vested was $40.2 million, $102.1 million and $95.0 million during fiscal 2026, 2025 and 2024, respectively, determined as of the date of vesting.
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 2026, 2025 and 2024:
| Year Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||||||||||||||||||||
| Stock Options: | |||||||||||||||||||||||||||||||||||
| Weighted-average expected term (years) | |||||||||||||||||||||||||||||||||||
| Expected volatility (range) | - | % | - | % | - | % | |||||||||||||||||||||||||||||
| Weighted-average volatility | % | % | % | ||||||||||||||||||||||||||||||||
| Risk-free interest rate (range) | - | % | - | % | - | % | |||||||||||||||||||||||||||||
| 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.
83
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
The following table summarizes option activity during fiscal 2026:
| Shares | Weighted- average Exercise Price | Weighted- average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||||
| (In thousands) | (In years) | (In thousands) | |||||||||||||||||||||
| Outstanding at September 30, 2025 | $ | ||||||||||||||||||||||
| Granted | |||||||||||||||||||||||
| Exercised | ( | ||||||||||||||||||||||
| Outstanding at September 30, 2026 | $ | $ | |||||||||||||||||||||
| Exercisable at September 30, 2026 | $ | $ | |||||||||||||||||||||
| Vested or expected to vest at September 30, 2026 | $ | $ | |||||||||||||||||||||
The weighted-average fair value of options granted was $591.10 , $705.43 and $419.00 during fiscal 2026, 2025 and 2024, respectively. The aggregate intrinsic value of options outstanding at September 30, 2026 was calculated as the difference between the exercise price of the underlying options and the market price of our common stock for the 35,092 outstanding options that had exercise prices lower than the $592.47 market price of our common stock at September 30, 2026. The total intrinsic value of options exercised was $27.2 million, $107.6 million and $49.1 million during fiscal 2026, 2025 and 2024, respectively, determined as of the date of exercise.
Employee Stock Purchase Plan
Beginning with the March 2025 through August 2025 offering period, compensation expense reflects both the 15 % purchase discount and the lookback feature, which allows participants to purchase shares at the lower of the closing price on the first or last trading day of the offering period. We measure the grant-date fair value of each purchase right using the Black-Scholes option valuation model and recognize the expense over the six-month offering period. Prior to the March 2025 through August 2025 offering period, expense arose solely from the 15 % discount. A total of 15,333 , 12,455 , and 13,721 shares of our common stock were issued under the 2019 Purchase Plan during fiscal 2026, 2025 and 2024, respectively. The weighted-average purchase price was $1,114.19 , $1,457.57 , and $1,217.05 per share for fiscal 2026, 2025 and 2024, 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 2026, 2025 and 2024:
| Year Ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||||
| Numerator for diluted and basic earnings per share: | |||||||||||||||||
| Net income | $ | $ | $ | ||||||||||||||
| Denominator — share: | |||||||||||||||||
| Basic weighted-average shares | |||||||||||||||||
| Effect of dilutive securities | |||||||||||||||||
| Diluted weighted-average shares | |||||||||||||||||
| Earnings per share: | |||||||||||||||||
| Basic | $ | $ | $ | ||||||||||||||
| Diluted | $ | $ | $ | ||||||||||||||
The computation of diluted EPS excludes options to purchase approximately 16,000 , 3,000 , and 3,000 shares of common stock for fiscal 2026, 2025 and 2024, 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.
84
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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 decisioning capabilities, models and solutions designed to operationalize intelligence across specific types of business needs or processes — such as account origination, customer management, customer engagement, fraud detection, and marketing — as well as associated professional services. This segment is anchored by FICO® Platform, a modern and modular set of multi-purpose intelligent decisioning capabilities that are designed to support artificial intelligence, and advanced analytic and decisioning use cases. Our offerings are available to our customers as SaaS or as on-premises software.
Our chief operating decision maker (“CODM”), who is our Chief Executive Officer, evaluates segment financial performance based on segment revenues, 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 2026, 2025 and 2024:
| Year Ended September 30, 2026 | |||||||||||||||||
| Scores | Software | Total | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Segment revenues: | |||||||||||||||||
| On-premises and SaaS software | $ | $ | $ | ||||||||||||||
| Professional services | |||||||||||||||||
| Scores | |||||||||||||||||
| Total segment revenues | |||||||||||||||||
| Segment operating expense | ( | ( | ( | ||||||||||||||
| Segment operating income | $ | $ | $ | ||||||||||||||
| Unallocated corporate expenses | ( | ||||||||||||||||
| Unallocated share-based compensation expense | ( | ||||||||||||||||
| Unallocated restructuring charges | ( | ||||||||||||||||
| Operating income | |||||||||||||||||
| Unallocated interest expense, net | ( | ||||||||||||||||
| Unallocated other income, net | |||||||||||||||||
| Income before income taxes | $ | ||||||||||||||||
85
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
| Year Ended September 30, 2025 | |||||||||||||||||
| Scores | Software | Total | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Segment revenues: | |||||||||||||||||
| On-premises and SaaS software | $ | $ | $ | ||||||||||||||
| Professional services | |||||||||||||||||
| Scores | |||||||||||||||||
| Total segment revenues | |||||||||||||||||
| Segment operating expense | ( | ( | ( | ||||||||||||||
| Segment operating income | $ | $ | |||||||||||||||
| Unallocated corporate expenses | ( | ||||||||||||||||
| Unallocated share-based compensation expense | ( | ||||||||||||||||
| Unallocated restructuring charges | ( | ||||||||||||||||
| Operating income | |||||||||||||||||
| Unallocated interest expense, net | ( | ||||||||||||||||
| Unallocated other income, net | |||||||||||||||||
| Income before income taxes | $ | ||||||||||||||||
| Year Ended September 30, 2024 | |||||||||||||||||
| Scores | Software | Total | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Segment revenues: | |||||||||||||||||
| On-premises and SaaS software | $ | $ | $ | ||||||||||||||
| Professional services | |||||||||||||||||
| Scores | |||||||||||||||||
| Total segment revenues | |||||||||||||||||
| Segment operating expense | ( | ( | ( | ||||||||||||||
| Segment operating income | $ | $ | |||||||||||||||
| Unallocated corporate expenses | ( | ||||||||||||||||
| Unallocated share-based compensation expense | ( | ||||||||||||||||
| Unallocated amortization expense | ( | ||||||||||||||||
| Operating income | |||||||||||||||||
| Unallocated interest expense, net | ( | ||||||||||||||||
| Unallocated other income, net | |||||||||||||||||
| Income before income taxes | $ | ||||||||||||||||
The following table presents depreciation and amortization on property and equipment for fiscal 2026, 2025 and 2024:
86
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
| Year Ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Depreciation and amortization: | |||||||||||||||||
| Scores | $ | $ | $ | ||||||||||||||
| Software | |||||||||||||||||
| Total segment depreciation and amortization | |||||||||||||||||
| Unallocated corporate | |||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | ||||||||||||||
Long-lived assets held outside of the U.S. were immaterial at September 30, 2026 and 2025.
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.
87
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
The following table presents the lease balances within the accompanying consolidated balance sheets as of September 30, 2026 and 2025:
| Balance Sheet Location | September 30, | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| (In thousands) | |||||||||||||||||
| Assets | |||||||||||||||||
| Operating leases | Operating lease right-of-use assets | $ | $ | ||||||||||||||
| Finance leases (*) | |||||||||||||||||
| Total lease assets | $ | $ | |||||||||||||||
| Liabilities | |||||||||||||||||
| Current: | |||||||||||||||||
| Operating leases | $ | $ | |||||||||||||||
| Finance leases | |||||||||||||||||
| Non-current: | |||||||||||||||||
| Operating leases | Operating lease liabilities | ||||||||||||||||
| Finance leases | |||||||||||||||||
| Total lease liabilities | $ | $ | |||||||||||||||
(*) Finance leases were recorded net of accumulated depreciation of $7.5 million and $4.8 million at September 30, 2026 and 2025, respectively.
The components of our operating and finance lease expenses were as follows:
| Year Ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Operating lease cost | $ | $ | $ | ||||||||||||||
| Finance lease cost: | |||||||||||||||||
| Depreciation of lease assets | |||||||||||||||||
| Interest on lease liabilities | |||||||||||||||||
| Short-term lease cost | |||||||||||||||||
| Variable lease cost | |||||||||||||||||
| Sublease income | ( | ( | ( | ||||||||||||||
| Total lease cost | $ | $ | $ | ||||||||||||||
The following table presents weighted-average remaining lease terms and weighted-average discount rates related to our operating and finance leases:
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating leases: | |||||||||||
| Weighted-average remaining lease term (in months) | |||||||||||
| Weighted-average discount rate | % | % | |||||||||
| Finance leases: | |||||||||||
| Weighted-average remaining lease term (in months) | |||||||||||
| Weighted-average discount rate | % | % | |||||||||
88
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
Supplemental cash flow information related to our non-cancellable leases was as follows:
| Year Ended September 30, | |||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash outflow for operating leases | $ | $ | $ | ||||||||||||||
| Operating cash outflow for finance leases | |||||||||||||||||
| Financing cash outflow for finance leases | |||||||||||||||||
| Lease assets obtained in exchange for new lease liabilities: | |||||||||||||||||
| Operating leases | |||||||||||||||||
| Finance leases | |||||||||||||||||
Future lease payments under our non-cancellable leases as of September 30, 2026 were as follows:
| Operating Leases | Finance Leases | ||||||||||
| (In thousands) | |||||||||||
| Fiscal 2027 | $ | $ | |||||||||
| Fiscal 2028 | |||||||||||
| Fiscal 2029 | |||||||||||
| Fiscal 2030 | |||||||||||
| Fiscal 2031 | |||||||||||
| Thereafter | |||||||||||
| Total future undiscounted lease payments | |||||||||||
| Less imputed interest | ( | ( | |||||||||
| Total reported lease liabilities | $ | $ | |||||||||
The amounts above do not include contractual sublease income totaling $0.2 million during fiscal 2027.
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, 2026 were as follows:
| (In thousands) | |||||
| Fiscal 2027 | $ | ||||
| Fiscal 2028 | |||||
| Fiscal 2029 | |||||
| Fiscal 2030 | |||||
| Total | $ | ||||
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.
89
FAIR ISAAC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended September 30, 2026, 2025 and 2024
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.
With respect to the consolidated putative class action antitrust lawsuits related to our Scores business brought against us in the Northern District of Illinois, we entered into a term sheet with the plaintiffs on September 29, 2026 memorializing the material terms of a proposed settlement of the lawsuits. In consideration of a cash payment by FICO to the plaintiffs of $65.0 million and certain compliance undertakings, the settlement would fully resolve all remaining claims asserted against FICO in the lawsuits. The proposed settlement does not include any admission of wrongdoing or liability by FICO, which denies any wrongdoing. We anticipate the parties will enter into definitive settlement agreements in the first quarter of fiscal 2027 reflecting the terms of the settlement as set forth in the term sheet. The settlement remains subject to final court approval, and, while there can be no assurance that the court will approve the proposed settlement, we view as probable that the court will approve a settlement on the terms set forth in the term sheet. We have therefore recorded an accrual of $65.0 million, which is included in other accrued liabilities, a current liability, on our consolidated balance sheet as of September 30, 2026, and included in selling, general and administrative expenses in our consolidated statements of income and comprehensive income for the fiscal year ended September 30, 2026.
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.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
90
An evaluation was carried out under the supervision and with the participation of FICO’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of FICO’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this annual report. Based on that evaluation, the CEO and CFO have concluded that FICO’s disclosure controls and procedures were effective as of September 30, 2026 to ensure that information required to be disclosed by FICO in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. In addition, the disclosure controls and procedures are designed to ensure that information required to be disclosed is accumulated and communicated to management, including the CEO and CFO, allowing timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
No change in FICO’s internal control over financial reporting was identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the quarter ended September 30, 2026, that has materially affected, or is reasonably likely to materially affect, FICO’s internal control over financial reporting.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2026 based on the guidelines established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation management has concluded that our internal control over financial reporting was effective as of September 30, 2026.
Deloitte & Touche LLP, an independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of September 30, 2026, as stated in their attestation report included in Part II, Item 8 of this Annual Report on Form 10-K.
Item 9B. Other Information
Insider Trading Arrangements
On August 3, 2026 , William J. Lansing , our Chief Executive Officer and President and a member of our Board of Directors , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The trading arrangement provides for the exercise of vested stock options and the sale of the underlying shares of our common stock by Mr. Lansing, and for the sale of shares of our common stock held by the Lansing Revocable Trust. The trading arrangement covers an aggregate of up to 85,148 shares of our common stock and terminates on the earlier of the close of business on May 14, 2027 or the date all shares are sold thereunder.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The required information regarding our Directors is incorporated by reference from the information under the caption “Director Nominees” in our 2027 Proxy Statement to be filed with the SEC within 120 days after September 30, 2026.
Certain information with respect to our executive officers appears in Part I of this Annual Report on Form 10-K under the heading “Information about our Executive Officers.”
Information regarding compliance with Section 16(a) of the Exchange Act, if applicable, is incorporated by reference from the information, if any, under the caption “Delinquent Section 16(a) Reports” in our 2027 Proxy Statement to be filed with the SEC within 120 days after September 30, 2026. Information regarding material changes, if any, to the procedures by which stockholders may recommend nominees to the Company’s Board of Directors is incorporated by reference from the information under the caption “Stockholder-Recommended Director Candidates” in our 2027 Proxy Statement to be filed with the SEC within 120 days after September 30, 2026.
FICO has adopted a Code of Ethics for Senior Financial Management (the “Code of Ethics”) that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller, and other persons performing similar functions who have been identified by the Chief Executive Officer. We have posted the Code of Ethics on our website located at www.fico.com. FICO intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or a waiver from, the Code of Ethics by posting such information on its website. FICO also has a Code of Conduct and Business Ethics applicable to all directors, officers and employees, which is also available at the website cited above.
The required information regarding the Company’s audit committee is incorporated by reference from the information under the caption “Board Committees” in our 2027 Proxy Statement to be filed with the SEC within 120 days after September 30, 2026.
The required information regarding the Company’s Insider Trading Policy is incorporated by reference from the information under the caption “Insider Trading Policy ” in our 2027 Proxy Statement to be filed with the SEC within 120 days after September 30, 2026. Our Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
Item 11. Executive Compensation
The information required by this Item is incorporated by reference from the information under the captions “Director Compensation Programs,” “Executive Compensation” and “Interlocks and Insider Participation” in our 2027 Proxy Statement to be filed with the SEC within 120 days after September 30, 2026.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item is incorporated by reference from the information under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our 2027 Proxy Statement to be filed with the SEC within 120 days after September 30, 2026.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item is incorporated by reference from the information under the captions “Certain Relationships and Related Persons Transactions,” “Board Committees” and “Director Nominees” in our 2027 Proxy Statement to be filed with the SEC within 120 days after September 30, 2026.
Item 14. Principal Accountant Fees and Services
The information required by this Item is incorporated by reference from the information under the caption “Ratification of Independent Registered Public Accounting Firm” in our 2027 Proxy Statement to be filed with the SEC within 120 days after September 30, 2026.
92
PART IV
Item 15. Exhibits and Financial Statement Schedules
1. Consolidated Financial Statements:
| Reference Page Form 10-K | |||||
2. Financial Statement Schedules
All financial statement schedules are omitted as the required information is not applicable or as the information required is included in the consolidated financial statements and related notes.
93
3. Exhibits:
Exhibit Number | Description | ||||
| 3.1 | |||||
| 3.2 | |||||
| 4.1 | |||||
| 4.2 | |||||
| 4.3 | |||||
| 4.4 | |||||
| 4.5 | |||||
| 10.1 | |||||
| 10.2 | |||||
| 10.3 | |||||
| 10.4 | |||||
| 10.5* | |||||
| 10.6 | |||||
| 10.7 | |||||
| 10.8 | |||||
| 10.9 | |||||
| 10.10* | |||||
| 10.11 | |||||
| 10.12 | |||||
| 10.13 | |||||
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| 10.14 | |||||
| 10.15 | |||||
| 10.15 | |||||
| 10.16 | |||||
| 10.16 | |||||
| 10.17 | |||||
| 10.18 | |||||
| 10.19 | |||||
| 10.20 | |||||
| 10.21 | |||||
| 10.22 | |||||
| 10.23 | |||||
| 10.24 | |||||
| 10.25 | |||||
| 10.26 | |||||
| 10.27 | |||||
| 10.28 | |||||
| 10.29 | |||||
| 10.30 | |||||
| 10.31 | |||||
| 10.32 | |||||
| 10.33 | |||||
95
| 10.34 | |||||
| 10.35 | |||||
| 10.36 | |||||
| 10.37 | |||||
| 10.38 | |||||
| 10.39 | |||||
| 10.40 | |||||
| 10.41 | |||||
| 10.42 | |||||
| 19.1* | |||||
| 21.1* | |||||
| 23.1* | |||||
| 31.1* | |||||
| 31.2* | |||||
| 32.1** | |||||
| 32.2** | |||||
| 97.1 | |||||
| 101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | ||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||
(1)Management contract or compensatory plan or arrangement.
| * | Filed herewith. | ||||
| ** | Furnished herewith. | ||||
96
Item 16. Form 10-K Summary
None
97
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| FAIR ISAAC CORPORATION | ||||||||
| By | /s/ STEVEN P. WEBER | |||||||
| Steven P. Weber | ||||||||
| Executive Vice President and Chief Financial Officer | ||||||||
DATE: November 6, 2026
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Steven P. Weber his or her attorney-in-fact, with full power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
98
| /s/ WILLIAM J. LANSING | Chief Executive Officer (Principal Executive Officer) and Director | November 6, 2026 | ||||||
| William J. Lansing | ||||||||
| /s/ STEVEN P. WEBER | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | November 6, 2026 | ||||||
| Steven P. Weber | ||||||||
| /s/ MICHAEL S. LEONARD | Vice President and Chief Accounting Officer (Principal Accounting Officer) | November 6, 2026 | ||||||
| Michael S. Leonard | ||||||||
| /s/ FABIOLA R. ARREDONDO | Director | November 6, 2026 | ||||||
| Fabiola R. Arredondo | ||||||||
| /s/ BRADEN R. KELLY | Director | November 6, 2026 | ||||||
| Braden R. Kelly | ||||||||
| /s/ EVA MANOLIS | Director | November 6, 2026 | ||||||
| Eva Manolis | ||||||||
| /s/ MARC F. MCMORRIS | Director | November 6, 2026 | ||||||
| Marc F. McMorris | ||||||||
| /s/ JOANNA REES | Director | November 6, 2026 | ||||||
| Joanna Rees | ||||||||
| /s/ DAVID A. REY | Director | November 6, 2026 | ||||||
| David A. Rey | ||||||||
| /s/ H. TAYLOE STANSBURY | Director | November 6, 2026 | ||||||
| H. Tayloe Stansbury | ||||||||
99
EXHIBIT 10.5
FORM OF AMENDMENT TO MANAGEMENT AGREEMENT
[FOURTH] AMENDMENT TO [AMENDED AND RESTATED] MANAGEMENT AGREEMENT
This [FOURTH] Amendment to [Amended and Restated] Management Agreement (this “Amendment”) is entered into as of ____________ __, 2026, by and between Fair Isaac Corporation, a Delaware corporation (the “Company”), and ______________ (“Executive”).
[Include for Executives with Letter Agreements: WHEREAS, Executive is currently employed by the Company pursuant to a letter agreement dated _____________, as amended from time to time (the “Employment Agreement”); and]
WHEREAS, the Company and Executive are parties to [an Amended and Restated] [a] Management Agreement dated _____________ [and amended by an Amendment to [an Amended and Restated] Management Agreement dated _____________ and further amended by a Second Amendment to [an Amended and Restated] Management Agreement dated _____________ and further amended by a Third Amendment to [an Amended and Restated] Management Agreement dated _____________] (the “Management Agreement”), which the Company and Executive desire to amend as set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, the Company and Executive agree as follows:
1. In accordance with Section 11 of the Management Agreement, the Company and Executive agree that Section 12 of the Management Agreement is hereby deleted and replaced in its entirety to read as follows:
12. Term. Subject to Section 9 of this Agreement, the Term of this Agreement shall commence on the date of this Agreement and shall terminate, and the Term of this Agreement shall end, on the later of (A) December 31, 2031, provided that such period shall be automatically extended for one year and from year to year thereafter until notice of termination is given that such Term shall not be extended by the Company or Executive to the other party hereto at least 180 days prior to December 31, 2031 or the one-year extension period then in effect, as the case may be, or (B) if the First Event occurs on or prior to December 31, 2031 (or prior to the end of the extension year then in effect as provided for in clause (A) hereof), the later of the first anniversary of the First Event or the last day of the Transition Period.
2. Except as provided above, the Management Agreement is unmodified and remains in full force and effect in accordance with its terms.
[Include for Executives with Letter Agreements:
3. For avoidance of doubt, any references to the Management Agreement in the Employment Agreement shall be interpreted to mean the Management Agreement as amended by this Amendment but otherwise nothing in this Amendment is intended to, and this Amendment does not, modify the Employment Agreement, which remains in full force and effect in accordance with its terms.]
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written.
| Fair Isaac Corporation | |||||
| By | |||||
| Its | |||||
| [Insert Executive Name] | |||||
| By | |||||
EXHIBIT 10.10
FORM OF AMENDMENT TO LETTER AGREEMENT
[THIRD] AMENDMENT TO LETTER AGREEMENT
This [Third] Amendment to Letter Agreement (this “[Third] Amendment”) is entered into as of ____________ __, 2026, by and between Fair Isaac Corporation, a Delaware corporation (the “Company”), and ______________ (“Executive”).
WHEREAS, the Company and Executive are parties to a Letter Agreement dated _____________ [and amended by an Amendment to a Letter Agreement dated _____________ and further amended by a Second Amendment to Letter Agreement dated _____________] (the “Employment Agreement”), which the Company and Executive desire to amend as set forth in this [Third] Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements contained herein, the Company and Executive agree as follows:
1. In accordance with the “Entire Agreement” provision in the Employment Agreement, the Company and Executive agree that the “Term” provision in the Employment Agreement is hereby deleted and replaced in its entirety to read as follows:
Term: The term of your employment as ______________ of the Company under the terms and conditions of this Agreement shall be for a period commencing on ______________ and ending on December 31, 2031 (the “Initial Term”), unless earlier terminated by either party as provided in this Agreement. Following the Initial Term, your employment with the Company under the terms and conditions of this Agreement shall automatically be renewed for successive one-year periods (each a “Renewal Term”) on December 31 of each year, unless terminated by either party on at least one hundred and eighty (180) days’ written notice to the other party prior to the end of the Initial Term or any Renewal Term thereof. The period of your employment with the Company under the terms and conditions of this Agreement (including during the Initial Term and any Renewal Term) is referred to as the “Term.”
2. Except as provided above, the Employment Agreement is unmodified and remains in full force and effect in accordance with its terms.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this [Third] Amendment as of the day and year first above written.
| Fair Isaac Corporation | |||||
| By | |||||
| Its | |||||
| [Insert Executive Name] | |||||
| By | |||||
EXHIBIT 19.1
Statement of Company Policy as to Trades in the Company’s Securities By Company Personnel and Confidential Information
1. Purpose.
Both the Securities and Exchange Commission (the “SEC”) and Congress are very concerned about maintaining the fairness of the U.S. securities markets. The securities laws are continually reviewed and amended to prevent people from taking unfair advantage and to increase the punishment for those who do. These laws require publicly-traded companies to have clear policies on insider trading. If companies like ours do not take active steps to adopt preventive policies and procedures covering securities trades by company personnel, the consequences could be severe.
In addition, we are adopting this Statement of Company Policy to avoid even the appearance of improper conduct on the part of anyone employed by or associated with Fair Isaac Corporation and companies owned by Fair Isaac Corporation (all of which are referred to collectively for convenience as the “Company”), not just so-called insiders. We have all worked hard to establish our reputation for integrity and ethical conduct. We cannot afford to have it damaged.
This Statement of Company Policy applies equally to employees of the Company. References to employees in this Statement of Company Policy should be read to include directors of the Company.
2. The Consequences.
The consequences of insider trading violations can be substantial:
For individuals who trade on inside information (or tip information to others):
• A jail term of up to 20 years;
• A civil penalty of up to three times the profit gained or loss avoided; and
• A criminal fine (no matter how small the profit) of up to $5 million.
For a company (as well as possibly any supervisory person) that fails to take appropriate steps to prevent illegal trading:
• A civil penalty of the greater of $1 million or three times the profit gained, or loss avoided as a result of the employee’s violation; and
• A criminal penalty of up to $25 million.
Further, if an employee violates the Company’s insider trading policy, Company imposed sanctions, including dismissal for cause, could result from failing to comply with the Company’s policy or procedures. Needless to say, any of the above consequences, even an SEC
investigation that does not result in prosecution, can tarnish one’s reputation and irreparably damage a career.
3. Our Policy.
No trading while in possession of material non-public information. If any employee has material non-public information (often referred to as “insider information”) relating to the Company, it is our policy that neither that person nor any related person may buy or sell securities of the Company or engage in any other action to take advantage of, or pass on to others, that information.
This policy also applies to transactions by an employee in the securities of any other company, including, but not limited to, our customers, partners or suppliers, while such employee is in the possession of material non-public information about the other company obtained in the course of employment at the Company.
Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure) are no exception. Even the appearance of an improper transaction must be avoided to preserve our reputation for adhering to the highest standards of conduct.
What is Material Information? “Material information” is any information that a reasonable investor would consider important in deciding whether to buy, hold or sell securities of the Company. In short, “material information” includes any information that reasonably could affect the price of the stock. Either positive or negative information may be material. It can be information about the Company or about a company with which we do business.
Examples: Common examples of information that will frequently be regarded as material are:
•projections of future earnings or losses;
•news of a possible merger, acquisition or tender offer;
•news of a significant sale of assets;
•significant new products or delays in new product introduction or development;
•discoveries, or grants or allowances or disallowances of patents;
•changes in dividend policies or the declaration of a stock split or the offering of additional securities;
•changes in management;
•plans to raise additional capital through stock sales or otherwise;
•the gain or loss of a significant product sale, customer or collaborator;
•results of product trials;
•pending or threatened litigation or the resolution thereof;
•significant regulatory actions concerning new or proposed products;
•impending bankruptcy or financial liquidity problems; and
•the gain or loss of a substantial customer or supplier.
What is trading? In addition to conventional purchases and sales of common stock, trading includes transactions in puts, calls, options, warrants, convertible securities and other derivatives based on the price of Company common stock. Trading covered by this policy may or may not include transactions under Company-sponsored plans as follows:
•Stock Option Exercises. The policy’s trading restrictions do not apply to the purchase of Company stock through the exercise of stock options granted by the Company. The trading restrictions do apply to any contemporaneous (such as a sale through a broker as part of a cashless exercise of the option) or subsequent sale of Company stock acquired through an option exercise.
•Restricted Stock/Unit and Performance/Market Stock/Unit Awards. The policy’s trading restrictions do not apply to the vesting of restricted stock/units or performance/market stock/units, or to the exercise of a tax withholding right pursuant to which the person elects to have the Company withhold shares of stock to satisfy tax withholding requirements upon vesting. The trading restrictions do apply to any market sales of shares, such as a sale-to-cover.
•Certain Gifts. The policy’s trading restrictions do not apply to a bona fide gift of Company stock so long as either (i) the recipient of the gift is subject to the same trading restrictions under this policy as are applicable to you, or (ii) you otherwise have no reason to believe that the recipient intends to sell the securities immediately or during a period when you would not be permitted to trade pursuant to the terms of this policy.
•Employee Stock Purchase Plan Purchases. The policy’s trading restrictions do not apply to the purchase of Company stock through the Employee Stock Purchase Plan (but the policy’s trading restrictions do apply to any election to participate in such plan, any election to change the level of participation in such plan (other than a notice of withdrawal from the plan) or the sale of any shares acquired under such plan).
Twenty-Twenty Hindsight. Remember, if your securities transactions become the subject of scrutiny, they will be viewed after-the-fact with the benefit of hindsight. As a result, before engaging in any transaction you should carefully consider how regulators and others might view your transaction in hindsight.
Transactions by Others. The same restrictions apply to your family members, others living in your household, and entities that you influence or control. Employees are responsible for the compliance of such persons and entities.
Do Not Pass Information to Others. Whether the information is proprietary information about the Company or information that could have an impact on its stock price, employees must not pass the information on to others. It is illegal to advise others to trade on the basis of material non-public information. Liability in these cases can extend to both the “tippee” — the person to whom the insider disclosed inside information — and you, as the “tipper,” and will apply whether or not you derive any benefit from another’s actions. These restrictions also apply to non-public information concerning any other company if such information was obtained in the course of employment, including information about our customers, partners or suppliers.
When Information is Public. As you can appreciate, it is also improper for any employee to enter a trade immediately after the Company has made a public announcement of material information, including earnings releases. We impose certain “trading blackouts” to ensure that the Company’s stockholders and the investing public will be afforded the time to receive the information and act upon it. These are discussed below under “Trading Blackouts.”
Procedures for Trading. To provide assistance in preventing inadvertent violations and avoiding even the appearance of an improper transaction (which could result, for example, where an employee engages in a trade while unaware of a pending major development) the following procedures must be followed before trading.
Members of the Board of Directors and Senior Officers (“Preclearance Employees”)
Persons in this category must
•Notify the Trading Compliance Officer, or in his/her absence, the Backup Trading Compliance Officer (either one, the “Compliance Officer”) and Stock Administration in an email of the amount and nature of the proposed trade. The Compliance Officer, Backup Compliance Officer and Stock Administration personnel are identified on Attachment A hereto, as may be amended from time to time;
•Certify to the Compliance Officer in email that (i) he or she is not in possession of material non-public information concerning the Company and (ii) the proposed trade(s) will be conducted in compliance with all applicable securities laws, including, if applicable, Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”); and
•Have received confirmation from the Compliance Officer that the trade is approved.
You will be notified if you are one of the officers subject to this policy.
Employees in a Position to Have Access to Material Non-public Information (“Access Employees”)
Persons in this category must
•Certify to the Compliance Officer and Stock Administration by accepting the terms displayed in a pop-up window which appears when using the stock trading tool in the E*TRADE Stock Plan account. The individual must certify that (i) he or she is not in possession of material non-public information concerning the Company and (ii) the proposed trade(s) will be conducted in compliance with all applicable securities laws, including, if applicable, Section 16 of the Exchange Act and Rule 144 of the Securities Act.
You will be notified if you are one of the Access Employees subject to this policy.
All Employees
The above procedures do not relieve anyone of their responsibility under SEC rules. All employees, whether subject to these procedural requirements or not, are responsible for adherence to this Statement of Company Policy, including, but not limited to: not trading on insider information; not trading during trading blackout periods; and not trading in securities on a short-term basis. All employees must follow the procedures applicable to Senior Officers for the sale of stock purchased in the open market and owned less than six months. If any employee is in doubt of whether or not the above procedures apply to him or her, the employee should inquire with the Compliance Officer.
Trading Blackouts. From time to time, the Company may require that members of the Board of Directors, Senior Officers, selected employees and others suspend trading because of developments known to the Company and not yet disclosed to the public. In that event, these persons are advised not to engage in any transaction involving the purchase or sale of the Company's securities during that period and should not disclose to others the fact that they have been suspended from trading. The Company will also require the following mandatory trading blackouts:
• Earnings Trading Blackouts – All members of the Board of Directors, Senior Officers, Access Employees and certain employees in a position to have access to material non-public information will be subject to a stock trading blackout period beginning on the twentieth day of the last month of a fiscal quarter until two trading days after earnings for that quarter are released. You will be notified if you are one of the specified employees subject to this policy.
• Trading After Earnings Announcements – In addition to those employees subject to earnings trading blackout periods, all employees are restricted from engaging in transactions from the day an earnings announcement is made until the third trading day after quarterly earnings are released. Thus, if an earnings announcement is made after the stock market closes on a Monday, Thursday would be the first day on which you should trade. If an earnings announcement is made before the stock market opens on a Monday, Wednesday would be the first day on which you should trade.
Of course, no trading should be done at any time that a member of the Board of Directors, officer or employee is actually aware of a major undisclosed corporate development.
Pre-Planned Trading Plans. Members of the Board of Directors and Senior Officers (subject to pre-approval of trades under this policy) and employees who are subject to preclearance of trades may establish a pre-planned trading plan designed to enable those persons to take advantage of the defense to an allegation of insider trading offered by Rule 10b5-1 of the SEC. Any such plan must meet the following requirements, as well as other requirements of Rule 10b5-1:
•it has been approved in advance by our General Counsel and must be in writing, with a copy of the approved plan filed with our General Counsel;
•it provides that no trades may occur thereunder until expiration of the applicable cooling-off period specified in Rule 10b5-1(c)(ii)(B) under the Exchange Act, and no trades occur until after that time; the appropriate cooling-off period will vary based on the status of the employee:
ofor directors and executive officers, the cooling-off period ends on the later of (i) 90 days after adoption or certain modifications of the 10b5-1 plan; or (ii) two business days following disclosure of the Company’s financial results in a Form 10-Q or Form 10-K for the quarter in which the 10b5-1 plan was adopted or modified (but in no event more than 120 days after adoption or modification);
ofor all other employees, the cooling-off period ends 30 days after adoption or modification of the 10b5-1 plan;
•it is entered into in good faith by the employee, and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1, at a time when the employee is not in possession of material non-public information about the Company; and, if the employee is a director or officer, the 10b5-1 plan must include representations by the individual certifying to such matters;
•it (i) specifies the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold; (ii) includes a written formula or algorithm, or computer program, for determining the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold; or (iii) does not permit the person to exercise any subsequent influence over how, when, or whether to effect purchases or sales; provided, in addition, that any other person who, pursuant to the contract, instruction, or plan, did exercise such influence must not have been aware of the material non-public information when doing so;
•it is the only outstanding approved 10b5-1 plan entered into by the employee (subject to the exceptions set out in Rule 10b5-1(c)(ii)(D) of the Exchange Act); and
•it is not designed to effect the open-market purchase or sale of the total amount of securities in a single transaction within a 12-month period of another single-transaction plan (subject to the exceptions set out in Rule 10b5-1(c)(ii)(E) of the Exchange Act).
We will be under no obligation to approve such a plan and will only do so if we believe the plan will meet the requirements of Rule 10b5-1 and will not be adverse to our overall corporate objectives.
4. Additional Prohibited Transactions.
We believe it is improper and inappropriate for any Company personnel to engage in short-term or speculative transactions involving Company stock. We believe that this trading can reflect badly on the Company and that Company personnel should not engage in any types of transactions that are commonly viewed as a form of “betting” for or against the Company. Accordingly, it is the Company’s policy that members of the Board of Directors, officers and employees should not engage in any of the following activities with respect to securities of the Company:
• Trading in securities on a short-term basis — As a general rule, any Company stock purchased in the open market (i.e., not including stock purchased upon exercise of an employee stock option or under the Employee Stock Purchase Plan) should be held for a minimum of six months and ideally longer. Senior Officers who are also Section 16 officers and members of the Board of Directors of the Company are already subject to the SEC’s “short-swing” profit rule, which penalizes sales and purchases inside of any six-month period. Any employee who wishes to sell Company stock that was purchased in the open market and that has been owned less than six months must obtain prior written clearance from our General Counsel.
• Purchases of Company stock on margin — This means borrowing from a brokerage firm, bank or other entity in order to buy Company stock (other than in
connection with a so-called “cashless” exercise of options under the Company’s stock plans).
• Short sales of Company stock — This involves selling Company stock that you do not own in the expectation that the price of the stock will fall, or as part of an arbitrage transaction.
• Hedging ownership of Company stock —This includes buying or selling puts or calls on Company stock, options trading on any of the stock exchanges or futures exchanges relating to Company stock, entering into equity swaps, prepaid variable forward contracts, collars or exchange funds involving Company stock and other transactions that are designed to hedge or offset decreases in the price of Company stock.
In addition, employees are expected to comply with any other state or federal securities law requirements that may apply to them, for example restrictions on the sale of securities subject to Rule 144 under the Securities Act.
5. Confidential Information and Communications with the Media.
Unauthorized disclosure of internal information relating to the Company (including information regarding new products, the Company’s suppliers or customers) could cause competitive harm to the Company and in some cases could result in liability for the Company.
Unauthorized disclosure. Company personnel should not disclose internal information about the Company to anyone outside the Company, except as required in the performance of regular duties for the Company. In this regard, Company employees are prohibited from posting internal information about the Company on a “bulletin board” on the Internet or communicating about the Company and its business in Internet-based “chat” rooms and are prohibited from facilitating the posting of internal information by others.
Communications with the media, securities analysts and investors. Communications on behalf of the Company with the media, securities analysts and investors must be made only by specifically designated representatives of the Company. Unless you have been expressly authorized to make such communications, if you receive any inquiry relating to the Company from the media, a securities analyst or an investor, you should refer the inquiry to the Investors Relations office or the General Counsel.
Safeguarding confidential information. Care must be taken to safeguard the confidentiality of internal information. For example, sensitive documents should not be left lying on desks, and visitors should not be left unattended in offices containing internal company documents.
Rumors. Rumors concerning the business and affairs of the Company may circulate from time to time. Our general policy is not to comment upon those rumors. Individual employees should also refrain from commenting upon or responding to rumors and should refer any requests for comments or responses to the Investors Relations office or the General Counsel.
6. Company Assistance.
Any person who has any questions about specific transactions may obtain additional guidance from our General Counsel.
Remember, however, the ultimate responsibility for adhering to the Statement of Company Policy and avoiding improper transactions rests with you. In this regard, it is imperative that you use your best judgment.
7. Acknowledgements.
This policy will be delivered to all employees. All employees will be required to acknowledge their understanding of, and an intent to comply with, this Statement of Company Policy, in a manner and form approved by the General Counsel.
In addition, certain employees may be required to acknowledge their understanding of, and intent to comply with, this Statement of Company Policy on an annual basis.
Attachment A
The individuals listed below have the following responsibilities for purposes of the Fair Isaac Corporation Statement of Company Policy as to Trades in the Company’s Securities By Company Personnel and Confidential Information:
Compliance Officer
[*****]
Backup Compliance Officer
[*****]
Stock Administration
[*****]
[*****]
Exhibit 21.1
FAIR ISAAC CORPORATION
LIST OF SUBSIDIARIES
LIST OF SUBSIDIARIES
As of September 30, 2026
| Name of Company | Jurisdiction of Incorporation/Organization | ||||
| Data Research Technologies, Inc. | Minnesota | ||||
| Entiera, Inc. | Delaware | ||||
| eZmCom, Inc. | Delaware | ||||
| Fair Isaac (ASPAC) Pte. Ltd. | Singapore | ||||
| Fair Isaac (Australia) Pty Ltd | Australia | ||||
| Fair Isaac (Singapore) Pte. Ltd. | Singapore | ||||
| Fair Isaac (Thailand) Co., Ltd. | Thailand | ||||
| Fair Isaac Asia Holdings, Inc. | Minnesota | ||||
| Fair Isaac Asia Pacific Corp. | Delaware | ||||
| Fair Isaac Brazil, LLC | Delaware | ||||
| Fair Isaac Canada, Ltd. | Canada | ||||
| Fair Isaac Chile Software and Services Ltda. | Chile | ||||
| Fair Isaac Credit Services, Inc. | Delaware | ||||
| Fair Isaac Deutschland GmbH | Germany | ||||
| Fair Isaac do Brasil Ltda. | Brazil | ||||
| Fair Isaac España SL | Spain | ||||
| Fair Isaac Europe Limited | England and Wales | ||||
| Fair Isaac Holdings, Inc. | Delaware | ||||
| Fair Isaac Hong Kong Limited | Hong Kong | ||||
| Fair Isaac India Software Private Limited | India | ||||
| Fair Isaac India Sales Private Limited | India | ||||
| Fair Isaac Information Technology (Beijing) Co., Ltd. | People’s Republic of China | ||||
| Fair Isaac International Corporation | California | ||||
| Fair Isaac Italy S.r.l. | Italy | ||||
| Fair Isaac Japan G.K. | Japan | ||||
| Fair Isaac Lithuania, UAB | Lithuania | ||||
| Fair Isaac Malaysia Sdn. Bhd. | Malaysia | ||||
| Fair Isaac Mexico S.A. de C.V. | Mexico | ||||
| Fair Isaac Network, Inc. | Delaware | ||||
| Fair Isaac Nordics AB | Sweden | ||||
| Fair Isaac Services Limited | England and Wales | ||||
| Fair Isaac Software Holdings Limited | England and Wales | ||||
| Fair Isaac South Africa (Pty) Ltd | South Africa | ||||
| Fair Isaac Turkey Software and Consultancy Services Limited Sirketi | Turkey | ||||
| Fair Isaac UK Group Limited | England and Wales | ||||
| Fair Isaac UK Holdings, Inc. | Delaware | ||||
| Fair Isaac UK International Holdings Ltd. | England and Wales | ||||
| Fair Isaac UK Investment Holdings LP | England and Wales | ||||
| HNC Software LLC | Delaware | ||||
| Infoglide Software Corporation | Delaware | ||||
| myFICO Consumer Services Inc. | Delaware | ||||
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-253828, 333-236948, 333-230061, 333-230059, 333-223492, 333-216171, 333-209761, 333-194231, 333-114364, 333-133268, 333-179417, 333-123751, 333-123750, 333-114365, 333-66348, 333-32398, 333-95889, 333-83905, 333-65179, 333-02121 and 333-102848 on Form S-8 of our reports dated November 6, 2026, relating to the financial statements of Fair Isaac Corporation and the effectiveness of Fair Isaac Corporation’s internal control over financial reporting appearing in this Annual Report on Form 10-K for the year ended September 30, 2026.
| /s/ Deloitte & Touche LLP | ||
| San Diego, CA | ||
| November 6, 2026 | ||
EXHIBIT 31.1
CERTIFICATIONS
I, William J. Lansing, certify that:
1.I have reviewed this annual report on Form 10-K of Fair Isaac Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 6, 2026
| /s/ WILLIAM J. LANSING | ||
| William J. Lansing | ||
| Chief Executive Officer | ||
EXHIBIT 31.2
CERTIFICATIONS
I, Steven P. Weber, certify that:
1.I have reviewed this annual report on Form 10-K of Fair Isaac Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 6, 2026
| /s/ STEVEN P. WEBER | ||
| Steven P. Weber | ||
| Executive Vice President and Chief Financial Officer | ||
EXHIBIT 32.1
CERTIFICATION UNDER SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned certifies that this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of Fair Isaac Corporation.
Date: November 6, 2026
| /s/ WILLIAM J. LANSING | ||
| William J. Lansing | ||
| Chief Executive Officer | ||
EXHIBIT 32.2
CERTIFICATION UNDER SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned certifies that this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this periodic report fairly presents, in all material respects, the financial condition and results of operations of Fair Isaac Corporation.
Date: November 6, 2026
| /s/ STEVEN P. WEBER | ||
| Steven P. Weber | ||
| Executive Vice President and Chief Financial Officer | ||