Cover
Cover - shares | 6 Months Ended | |
Mar. 31, 2023 | Apr. 14, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-11689 | |
Entity Registrant Name | Fair Isaac Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-1499887 | |
Entity Address, Address Line One | 5 West Mendenhall, Suite 105 | |
Entity Address, Postal Zip Code | 59715 | |
Entity Address, City or Town | Bozeman, | |
Entity Address, State or Province | MT | |
City Area Code | 406 | |
Local Phone Number | 982-7276 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | FICO | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,993,116 | |
Entity Central Index Key | 0000814547 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 137,771 | $ 133,202 |
Accounts receivable, net | 338,239 | 322,410 |
Prepaid expenses and other current assets | 45,316 | 29,103 |
Total current assets | 521,326 | 484,715 |
Marketable securities | 29,580 | 24,515 |
Other investments | 1,232 | 1,135 |
Property and equipment, net | 13,664 | 17,580 |
Operating lease right-of-use assets | 29,638 | 36,688 |
Goodwill | 774,330 | 761,067 |
Intangible assets, net | 1,467 | 2,017 |
Deferred income tax | 30,618 | 11,803 |
Other assets | 100,576 | 102,514 |
Total assets | 1,502,431 | 1,442,034 |
Current liabilities: | ||
Accounts payable | 13,915 | 17,273 |
Accrued compensation and employee benefits | 65,863 | 97,893 |
Other accrued liabilities | 68,152 | 66,248 |
Deferred revenue | 118,348 | 120,045 |
Current maturities on debt | 107,000 | 30,000 |
Total current liabilities | 373,278 | 331,459 |
Long-term debt | 1,817,663 | 1,823,669 |
Operating lease liabilities | 28,825 | 39,192 |
Other liabilities | 53,458 | 49,661 |
Total liabilities | 2,273,224 | 2,243,981 |
Commitments and contingencies | ||
Stockholders’ deficit: | ||
Preferred stock ($0.01 par value; 1,000 shares authorized; none issued and outstanding) | 0 | 0 |
Common stock ($0.01 par value; 200,000 shares authorized, 88,857 shares issued and 25,016 and 25,154 shares outstanding at March 31, 2023 and September 30, 2022, respectively) | 250 | 252 |
Additional paid-in-capital | $ 1,281,270 | $ 1,299,588 |
Treasury stock, shares | 63,841 | 63,703 |
Treasury stock, at cost (63,841 and 63,703 shares at March 31, 2023 and September 30, 2022, respectively) | $ (5,110,421) | $ (4,935,769) |
Retained earnings | 3,157,877 | 2,958,684 |
Accumulated other comprehensive loss | (99,769) | (124,702) |
Total stockholders’ deficit | (770,793) | (801,947) |
Total liabilities and stockholders’ deficit | $ 1,502,431 | $ 1,442,034 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 88,857,000 | 88,857,000 |
Common stock, shares outstanding | 25,016,000 | 25,154,000 |
Treasury stock, shares | 63,841,000 | 63,703,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Total revenues | $ 380,266 | $ 357,195 | $ 725,136 | $ 679,556 |
Operating expenses: | ||||
Cost of revenues | 79,806 | 71,794 | 156,375 | 140,997 |
Research and development | 40,266 | 36,387 | 76,899 | 75,367 |
Selling, general and administrative | 100,158 | 96,414 | 193,153 | 194,462 |
Amortization of intangible assets | 275 | 543 | 550 | 1,087 |
Total operating expenses | 220,505 | 205,138 | 425,036 | 411,913 |
Operating income | 159,761 | 152,057 | 300,100 | 267,643 |
Interest expense, net | (23,897) | (17,211) | (46,697) | (29,406) |
Other income (expense), net | 1,605 | (2,361) | 1,969 | (932) |
Income before income taxes | 137,469 | 132,485 | 255,372 | 237,305 |
Provision for income taxes | 35,919 | 28,102 | 56,179 | 47,963 |
Net income | 101,550 | 104,383 | 199,193 | 189,342 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 6,552 | (3,207) | 24,933 | (5,345) |
Comprehensive income | $ 108,102 | $ 101,176 | $ 224,126 | $ 183,997 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 4.04 | $ 3.99 | $ 7.94 | $ 7.10 |
Diluted (in dollars per share) | $ 4 | $ 3.95 | $ 7.83 | $ 7.02 |
Shares used in computing earnings per share: | ||||
Basic (in shares) | 25,116 | 26,145 | 25,080 | 26,662 |
Diluted (in shares) | 25,419 | 26,421 | 25,431 | 26,978 |
Gain (Loss) on Disposition of Assets | $ 0 | $ 0 | $ 1,941 | $ 0 |
On-premises and SaaS software | ||||
Total revenues | 154,584 | 149,088 | 299,144 | 275,426 |
Professional services | ||||
Total revenues | 27,175 | 24,365 | 49,497 | 50,901 |
Scores | ||||
Total revenues | $ 198,507 | $ 183,742 | $ 376,495 | $ 353,229 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning Balance (in shares) at Sep. 30, 2021 | 27,568 | |||||
Beginning Balance at Sep. 30, 2021 | $ (110,942) | $ 276 | $ 1,237,348 | $ (3,857,855) | $ 2,585,143 | $ (75,854) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 57,814 | 57,814 | ||||
Issuance of treasury stock under employee stock plans (in shares) | 237 | |||||
Issuance of treasury stock under employee stock plans | (36,732) | $ 2 | (52,882) | 16,148 | ||
Repurchases of common stock (in shares) | (1,823) | |||||
Repurchases of common stock | (757,553) | $ (18) | 0 | (757,535) | ||
Net income | 189,342 | 189,342 | ||||
Foreign currency translation adjustments | (5,345) | (5,345) | ||||
Ending Balance (in shares) at Mar. 31, 2022 | 25,982 | |||||
Ending Balance at Mar. 31, 2022 | (663,416) | $ 260 | 1,242,280 | (4,599,242) | 2,774,485 | (81,199) |
Beginning Balance (in shares) at Dec. 31, 2021 | 26,509 | |||||
Beginning Balance at Dec. 31, 2021 | (538,299) | $ 265 | 1,208,365 | (4,339,039) | 2,670,102 | (77,992) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 27,936 | 27,936 | ||||
Issuance of treasury stock under employee stock plans (in shares) | 52 | |||||
Issuance of treasury stock under employee stock plans | 9,742 | $ 1 | 5,979 | 3,762 | ||
Repurchases of common stock (in shares) | (579) | |||||
Repurchases of common stock | (263,971) | $ (6) | 0 | (263,965) | ||
Net income | 104,383 | 104,383 | ||||
Foreign currency translation adjustments | (3,207) | (3,207) | ||||
Ending Balance (in shares) at Mar. 31, 2022 | 25,982 | |||||
Ending Balance at Mar. 31, 2022 | (663,416) | $ 260 | 1,242,280 | (4,599,242) | 2,774,485 | (81,199) |
Beginning Balance (in shares) at Sep. 30, 2022 | 25,154 | |||||
Beginning Balance at Sep. 30, 2022 | (801,947) | $ 252 | 1,299,588 | (4,935,769) | 2,958,684 | (124,702) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 56,755 | 56,755 | ||||
Issuance of treasury stock under employee stock plans (in shares) | 212 | |||||
Issuance of treasury stock under employee stock plans | (58,456) | $ 2 | (75,073) | 16,615 | ||
Repurchases of common stock (in shares) | (350) | |||||
Repurchases of common stock | (191,271) | $ (4) | (191,267) | |||
Net income | 199,193 | 199,193 | ||||
Foreign currency translation adjustments | 24,933 | 24,933 | ||||
Ending Balance (in shares) at Mar. 31, 2023 | 25,016 | |||||
Ending Balance at Mar. 31, 2023 | (770,793) | $ 250 | 1,281,270 | (5,110,421) | 3,157,877 | (99,769) |
Beginning Balance (in shares) at Dec. 31, 2022 | 25,155 | |||||
Beginning Balance at Dec. 31, 2022 | (802,095) | $ 252 | 1,244,271 | (4,996,624) | 3,056,327 | (106,321) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 27,053 | 27,053 | ||||
Issuance of treasury stock under employee stock plans (in shares) | 32 | |||||
Issuance of treasury stock under employee stock plans | 12,414 | $ 0 | 9,946 | 2,468 | ||
Repurchases of common stock (in shares) | (171) | |||||
Repurchases of common stock | (116,267) | $ (2) | (116,265) | |||
Net income | 101,550 | 101,550 | ||||
Foreign currency translation adjustments | 6,552 | 6,552 | ||||
Ending Balance (in shares) at Mar. 31, 2023 | 25,016 | |||||
Ending Balance at Mar. 31, 2023 | $ (770,793) | $ 250 | $ 1,281,270 | $ (5,110,421) | $ 3,157,877 | $ (99,769) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 199,193 | $ 189,342 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,294 | 10,656 |
Share-based compensation | 56,755 | 57,814 |
Deferred income taxes | (18,360) | 3,004 |
Net (gain) loss on marketable securities | (1,681) | 3,209 |
Non-cash operating lease costs | 7,613 | 8,166 |
Provision for doubtful accounts | 738 | 650 |
Gain (Loss) on Disposition of Assets | 1,941 | 0 |
Net loss on sales and abandonment of property and equipment | 24 | 166 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (13,789) | 33,098 |
Prepaid expenses and other assets | (17,078) | 5,179 |
Accounts payable | (2,810) | (4,105) |
Accrued compensation and employee benefits | (32,318) | (41,745) |
Other liabilities | (2,425) | (14,159) |
Deferred revenue | 29 | (3,791) |
Net cash provided by operating activities | 182,244 | 247,484 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (2,377) | (3,293) |
Proceeds from sales of marketable securities | 4,631 | 3,354 |
Purchases of marketable securities | (8,015) | (5,982) |
Proceeds from product line asset sales, net of cash transferred | (6,126) | 2,257 |
Net cash used in investing activities | (11,887) | (3,664) |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit and term loan | 228,000 | 800,000 |
Payments on revolving line of credit and term loan | (158,500) | (806,750) |
Proceeds from issuance of senior notes | 0 | 550,000 |
Payments on debt issuance costs | 0 | (8,819) |
Proceeds from issuance of treasury stock under employee stock plans | 15,217 | 11,117 |
Taxes paid related to net share settlement of equity awards | (73,672) | (47,849) |
Repurchases of common stock | (184,290) | (760,861) |
Net cash used in financing activities | (173,245) | (263,162) |
Effect of exchange rate changes on cash | 7,457 | (1,793) |
Increase (decrease) in cash and cash equivalents | 4,569 | (21,135) |
Cash and cash equivalents, beginning of period | 133,202 | 195,354 |
Cash and cash equivalents, end of period | 137,771 | 174,219 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes, net of refunds of $548 and $1,003 during the six-month periods ended March 31, 2023 and 2022, respectively | 72,800 | 30,788 |
Cash paid for interest | 46,801 | 21,368 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Purchase of property and equipment included in accounts payable | 9 | 139 |
Unsettled repurchases of common stock | $ 6,981 | $ 4,735 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Cash Flows [Abstract] | ||
Proceeds from Income Tax Refunds | $ 548 | $ 1,003 |
Nature of Business
Nature of Business | 6 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Nature of Business | Nature of Business 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 leading applied analytics company. 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 nearly 120 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 in the U.S. of consumer credit risk — empowering them to increase financial literacy and manage their financial health. Principles of Consolidation and Basis of Presentation We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q and the applicable accounting guidance. Consequently, we have not necessarily included all information and footnotes required for audited financial statements. In our opinion, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments, except as otherwise indicated) necessary for a fair presentation of our financial position and results of operations. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with our audited consolidated financial statements and notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022. The interim financial information contained in this report is not necessarily indicative of the results to be expected for any other interim period or for the entire fiscal year. The condensed 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 acquired intangible assets, 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. New Accounting Pronouncements Recent Accounting Pronouncements Not Yet Adopted In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, “ Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ” (“ASU 2021-08”). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities from acquired contracts using the revenue recognition guidance under Accounting Standards Codification Topic 606, Revenue from Contacts with Customers , in order to align the recognition of a contract liability with the definition of a performance obligation. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which means that it will be effective for our fiscal year beginning October 1, 2023. Early adoption is permitted. We do not believe that adoption of ASU 2021-08 will have a significant impact on our condensed consolidated financial statements. We do not expect that any other recently issued accounting pronouncements will have a significant effect on our financial statements. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. • Level 1 — uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. Our Level 1 assets were comprised of money market funds and certain marketable securities and our Level 1 liabilities included senior notes as of March 31, 2023 and September 30, 2022. • 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 March 31, 2023 and September 30, 2022. • 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 have any assets or liabilities that are valued using inputs identified under a Level 3 hierarchy as of March 31, 2023 and September 30, 2022. The following tables represent financial assets that we measured at fair value on a recurring basis at March 31, 2023 and September 30, 2022: March 31, 2023 Active Markets for Fair Value as of (In thousands) Assets: Cash equivalents (1) $ 23,501 $ 23,501 Marketable securities (2) 29,580 29,580 Total $ 53,081 $ 53,081 September 30, 2022 Active Markets for Fair Value as of September 30, 2022 (In thousands) Assets: Cash equivalents (1) $ 19,314 $ 19,314 Marketable securities (2) 24,515 24,515 Total $ 43,829 $ 43,829 (1) Included in cash and cash equivalents on our condensed consolidated balance sheets at March 31, 2023 and September 30, 2022. Not included in these tables are cash deposits of $114.3 million and $113.9 million at March 31, 2023 and September 30, 2022, respectively. (2) Represents securities held under a supplemental retirement and savings plan for certain officers and senior management employees, which are distributed upon termination or retirement of the employees. Included in marketable securities on our condensed consolidated balance sheets at March 31, 2023 and September 30, 2022. 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 quarters and six-month periods ended March 31, 2023 and 2022. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We use derivative instruments to manage risks caused by fluctuations in foreign exchange rates. The primary objective of our derivative instruments is to protect the value of foreign-currency-denominated receivable and cash balances from the effects of volatility in foreign exchange rates that might occur prior to conversion to their functional currencies. We principally utilize foreign currency forward contracts, which enable us to buy and sell foreign currencies in the future at fixed exchange rates and economically offset changes in foreign exchange rates. We routinely enter into contracts to offset exposures denominated in the British pound, Euro, and Singapore dollar. Foreign currency-denominated receivable and cash balances are remeasured at foreign exchange rates in effect on the balance sheet date with the effects of changes in foreign exchange rates reported in other income (expense), net. The forward contracts are not designated as hedges and are marked to market through other income (expense), 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 March 31, 2023 and September 30, 2022: March 31, 2023 Contract Amount Fair Value Foreign USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 11,500 $ 12,519 $ — Buy foreign currency: British pound (GBP) GBP 8,245 $ 10,200 $ — Singapore dollar (SGD) SGD 6,247 $ 4,700 $ — September 30, 2022 Contract Amount Fair Value Foreign USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 13,500 $ 13,158 $ — Buy foreign currency: British pound (GBP) GBP 11,848 $ 13,100 $ — Singapore dollar (SGD) SGD 6,169 $ 4,300 $ — The foreign currency forward contracts were entered into on March 31, 2023 and September 30, 2022; therefore, their fair value was $0 on each of these dates. Gains (losses) on derivative financial instruments were recorded in our condensed consolidated statements of income and comprehensive income as a component of other income (expense), net, and consisted of the following: Quarter Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 (In thousands) Gains (losses) on foreign currency forward contracts $ 309 $ (576) $ 1,613 $ (14) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 6 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Amortization expense associated with our intangible assets is reflected as a separate operating expense caption — amortization of intangible assets — and is excluded from cost of revenues and selling, general and administrative expenses within the accompanying condensed consolidated statements of income and comprehensive income. Amortization expense consisted of the following: Quarter Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 (In thousands) Completed technology $ 125 $ 125 $ 250 $ 250 Customer contracts and relationships 150 418 300 837 Total $ 275 $ 543 $ 550 $ 1,087 Estimated future intangible asset amortization expense associated with intangible assets existing at March 31, 2023 was as follows: Year Ending September 30, (In thousands) 2023 (excluding the six months ended March 31, 2023) $ 550 2024 917 Total $ 1,467 The following table summarizes changes to goodwill during the six months ended March 31, 2023, both in total and as allocated to our segments. We have not recognized any goodwill impairment losses to date. Scores Software Total (In thousands) Balance at September 30, 2022 $ 146,648 $ 614,419 $ 761,067 Foreign currency translation adjustment — 13,263 13,263 Balance at March 31, 2023 $ 146,648 $ 627,682 $ 774,330 |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 6 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Composition of Certain Financial Statement Captions | Composition of Certain Financial Statement Captions The following table presents the composition of property and equipment, net and other accrued liabilities at March 31, 2023 and September 30, 2022: March 31, September 30, (In thousands) Property and equipment, net: Property and equipment $ 113,465 $ 112,411 Less: accumulated depreciation and amortization (99,801) (94,831) Total $ 13,664 $ 17,580 Other accrued liabilities: Interest payable $ 21,261 $ 21,314 Current operating leases 17,972 19,369 Other 28,919 25,565 Total $ 68,152 $ 66,248 |
Revolving Line of Credit
Revolving Line of Credit | 6 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Revolving Line of Credit | Revolving Line of Credit and Term Loan We have a $600 million unsecured revolving line of credit and a $300 million unsecured term loan with a syndicate of banks that mature on August 19, 2026. Borrowings under the revolving line of credit and term loan can be used for working capital and general corporate purposes and may also be used for the refinancing of existing debt, acquisitions, and the repurchase of our common stock. The term loan requires principal payments in consecutive quarterly installments of $3.75 million on the last business day of each quarter. In November 2022, we amended our credit agreement to replace the LIBOR reference rate with the Secured Overnight Financing Rate (“SOFR”) reference rate. Interest rates on amounts borrowed under the revolving line of credit and term loan are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5%, and (c) one-month adjusted term SOFR rate plus 1%, plus, in each case, an applicable margin, or (ii) an adjusted term SOFR rate plus an applicable margin. The applicable margin for base rate borrowings and for SOFR borrowings is determined based on our consolidated leverage ratio. The applicable margin for base rate borrowings ranges from 0% to 0.75% per annum and for SOFR borrowings ranges from 1% to 1.75% per annum. In addition, we must pay certain credit facility fees. The revolving line of credit and term loan contain certain restrictive covenants including a maximum consolidated leverage ratio of 3.5 to 1.0, subject to a step up to 4.0 to 1.0 following certain permitted acquisitions and subject to certain conditions, and a minimum interest coverage ratio of 3.0 to 1.0. The credit agreement also contains other covenants typical of unsecured credit facilities. As of March 31, 2023, we had $357.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 6.343%, and $281.3 million in outstanding balance of the term loan at an interest rate of 6.529%, of which $531.3 million was classified as a long-term liability and recorded in long-term debt within the accompanying condensed consolidated balance sheets. We were in compliance with all financial covenants under this credit agreement as of March 31, 2023. |
Senior Notes
Senior Notes | 6 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Senior Notes | Senior Notes On May 8, 2018, we issued $400 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”). The 2018 Senior Notes require interest payments semi-annually at a rate of 5.25% per annum and will mature on May 15, 2026. On December 6, 2019, we issued $350 million of senior notes in a private offering to qualified institutional investors (the “2019 Senior Notes”). The 2019 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028. On December 17, 2021, we issued $550 million of additional senior notes of the same class as the 2019 Senior Notes in a private offering to qualified institutional investors (the “2021 Senior Notes,” and collectively with the 2018 Senior Notes and the 2019 Senior Notes, the “Senior Notes”). The 2021 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028, the same date as the 2019 Senior Notes. The indentures for the Senior Notes contain certain covenants typical of unsecured obligations and we were in compliance as of March 31, 2023. The following table presents the face values and fair values for the Senior Notes at March 31, 2023 and September 30, 2022: March 31, 2023 September 30, 2022 Face Value (*) Fair Value Face Value (*) Fair Value (In thousands) The 2018 Senior Notes $ 400,000 $ 393,000 $ 400,000 $ 381,500 The 2019 Senior Notes and the 2021 Senior Notes 900,000 823,500 900,000 767,250 Total $ 1,300,000 $ 1,216,500 $ 1,300,000 $ 1,148,750 (*) The carrying value of the Senior Notes was the face value reduced by the net debt issuance costs of $12.9 million and $14.3 million at March 31, 2023 and September 30, 2022, respectively. |
Revenue from Contract with Cust
Revenue from Contract with Customer | 6 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer | Revenue from Contracts with Customers Disaggregation of Revenue The following tables provide information about disaggregated revenue by primary geographical market: Quarter Ended March 31, 2023 Scores Software Total Percentage (Dollars in thousands) Americas $ 197,039 $ 121,264 $ 318,303 84 % Europe, Middle East and Africa 1,154 40,199 41,353 11 % Asia Pacific 314 20,296 20,610 5 % Total $ 198,507 $ 181,759 $ 380,266 100 % Quarter Ended March 31, 2022 Scores Software Total Percentage (Dollars in thousands) Americas $ 175,091 $ 104,664 $ 279,755 78 % Europe, Middle East and Africa 1,252 34,128 35,380 10 % Asia Pacific 7,399 34,661 42,060 12 % Total $ 183,742 $ 173,453 $ 357,195 100 % Six Months Ended March 31, 2023 Scores Software Total Percentage (Dollars in thousands) Americas $ 370,336 $ 239,094 $ 609,430 84 % Europe, Middle East and Africa 2,502 71,191 73,693 10 % Asia Pacific 3,657 38,356 42,013 6 % Total $ 376,495 $ 348,641 $ 725,136 100 % Six Months Ended March 31, 2022 Scores Software Total Percentage (Dollars in thousands) Americas $ 340,803 $ 203,849 $ 544,652 80 % Europe, Middle East and Africa 2,745 71,526 74,271 11 % Asia Pacific 9,681 50,952 60,633 9 % Total $ 353,229 $ 326,327 $ 679,556 100 % The following table provides information about disaggregated revenue for our Software segment by deployment method: Quarter Ended March 31, Percentage of revenues Six Months Ended March 31, Percentage of revenues 2023 2022 2023 2022 2023 2022 2023 2022 (Dollars in thousands) On-premises software $ 73,473 $ 77,959 48 % 52 % $ 138,395 $ 135,254 46 % 49 % SaaS software 81,111 71,129 52 % 48 % 160,749 140,172 54 % 51 % Total on-premises and SaaS software $ 154,584 $ 149,088 100 % 100 % $ 299,144 $ 275,426 100 % 100 % The following table provides information about disaggregated revenue for our Software segment by product features: Quarter Ended March 31, Percentage of revenues Six Months Ended March 31, Percentage of revenues 2023 2022 2023 2022 2023 2022 2023 2022 (Dollars in thousands) Platform software (*) $ 38,682 $ 39,802 25 % 27 % $ 69,510 $ 61,874 23 % 22 % Non-platform software 115,902 109,286 75 % 73 % 229,634 213,552 77 % 78 % Total on-premises and SaaS software $ 154,584 $ 149,088 100 % 100 % $ 299,144 $ 275,426 100 % 100 % (*) FICO platform software is a set of interoperable capabilities which use software assets owned and/or governed by FICO for building solutions and services which conform to FICO architectural standards based on key elements of Cloud Native Computing design principles. These standards encompass shared security context and access using FICO standard application programming interfaces. The following table provides information about disaggregated revenue for our Software segment by timing of revenue recognition: Quarter Ended March 31, Percentage of revenues Six Months Ended March 31, Percentage of revenues 2023 2022 2023 2022 2023 2022 2023 2022 (Dollars in thousands) Software recognized at a point in time (1) $ 19,193 $ 26,540 12 % 18 % $ 30,996 $ 33,699 10 % 12 % Software recognized over contract term (2) 135,391 122,548 88 % 82 % 268,148 241,727 90 % 88 % Total on-premises and SaaS software $ 154,584 $ 149,088 100 % 100 % $ 299,144 $ 275,426 100 % 100 % (1) Includes license portion of our on-premises subscription software and perpetual license, both of which are recognized when the software is made available to the customer, or at the start of the subscription. (2) Includes maintenance portion and usage-based fees of our on-premises subscription software, maintenance revenue on perpetual licenses, as well as SaaS revenue. The following table provides information about disaggregated revenue for our Scores segment by distribution method: Quarter Ended March 31, Percentage of revenues Six Months Ended March 31, Percentage of revenues 2023 2022 2023 2022 2023 2022 2023 2022 (Dollars in thousands) Business-to-business Scores $ 144,874 $ 125,243 73 % 68 % $ 269,779 $ 238,211 72 % 67 % Business-to-consumer Scores 53,633 58,499 27 % 32 % 106,716 115,018 28 % 33 % Total $ 198,507 $ 183,742 100 % 100 % $ 376,495 $ 353,229 100 % 100 % We derive a substantial portion of revenues from our contracts with the three major consumer reporting agencies, TransUnion, Equifax and Experian. Revenues collectively generated by agreements with these customers accounted for 43% and 39% of our total revenues in the quarters ended March 31, 2023 and 2022, respectively, with three and two consumer reporting agencies each contributing more than 10% of our total revenues in the quarters ended March 31, 2023 and 2022, respectively. Revenues collectively generated by agreements with these customers accounted for 40% and 38% of our total revenues in the six months ended March 31, 2023 and 2022, respectively, with two consumer reporting agencies each contributing more than 10% of our total revenues in each of the six months ended March 31, 2023 and 2022. 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 March 31, 2023 and September 30, 2022 consisted of the following: March 31, 2023 September 30, 2022 (In thousands) Billed $ 183,907 $ 203,351 Unbilled 199,111 165,386 383,018 368,737 Less: allowance for doubtful accounts (4,590) (4,218) Net receivables 378,428 364,519 Less: long-term receivables (*) (40,189) (42,109) Short-term receivables (*) $ 338,239 $ 322,410 (*) Short-term receivables and long-term receivables were recorded in accounts receivable, net and other assets, respectively, within the accompanying condensed consolidated balance sheets. 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: Six Months Ended (In thousands) Deferred revenues, beginning balance (*) $ 126,560 Revenue recognized that was included in the deferred revenues balance at the beginning of the period (51,360) Increases due to billings, excluding amounts recognized as revenue during the period 49,904 Deferred revenues, ending balance (*) $ 125,104 (*) Deferred revenues at March 31, 2023 included current portion of $118.3 million and long-term portion of $6.8 million that were recorded in deferred revenue and other liabilities, respectively, within the condensed consolidated balance sheets. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to provide customers with financing or to receive financing from our customers. Examples include multi-year on-premises licenses that are invoiced annually with revenue recognized upfront and invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period. 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Effective Tax Rate The effective income tax rate was 26.1% and 21.2% during the quarters ended March 31, 2023 and 2022, respectively, and 22.0% and 20.2% during the six months ended March 31, 2023 and 2022, respectively. The provision for income taxes during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year. The effective tax rate in any quarter can also be affected positively or negatively by adjustments that are required to be reported in the specific quarter of resolution. The increase in the effective tax rate for the six months ended March 31, 2023 was primarily due to a decrease in tax benefits related to the reduction of research and development credits. A provision enacted as part of the 2017 Tax Cuts and Jobs Act requires companies to capitalize research and experimental expenditures for tax purposes. The provision is effective for fiscal years beginning after December 31, 2021, which means that it was effective for our fiscal year beginning October 1, 2022. While this provision is not expected to have a material impact on our fiscal 2023 effective tax rate, we expect our fiscal 2023 cash tax payments and related deferred tax asset positions to increase significantly compared to fiscal 2022. The total unrecognized tax benefit for uncertain tax positions was estimated to be $13.0 million at each of March 31, 2023 and September 30, 2022. We recognize interest expense related to unrecognized tax benefits and penalties as part of the provision for income taxes in our condensed consolidated statements of income and comprehensive income. We accrued interest of $0.8 million and $0.5 million related to unrecognized tax benefits as of March 31, 2023 and September 30, 2022, respectively. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table presents reconciliations for the numerators and denominators of basic and diluted earnings per share (“EPS”) for the quarters and six-month periods ended March 31, 2023 and 2022: Quarter Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 (In thousands, except per share data) Numerator for diluted and basic earnings per share: Net income $ 101,550 $ 104,383 $ 199,193 $ 189,342 Denominator — share: Basic weighted-average shares 25,116 26,145 25,080 26,662 Effect of dilutive securities 303 276 351 316 Diluted weighted-average shares 25,419 26,421 25,431 26,978 Earnings per share: Basic $ 4.04 $ 3.99 $ 7.94 $ 7.10 Diluted $ 4.00 $ 3.95 $ 7.83 $ 7.02 |
Segment Information
Segment Information | 6 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We are organized into two reportable segments: Scores and Software. Although we sell solutions and services to a large number of end user product and industry markets, our reportable business segments reflect the primary method in which management organizes and evaluates internal financial information to make operating decisions and assess performance. • Scores. This segment includes our business-to-business (“B2B”) scoring solutions and services which give our clients access to predictive credit and other scores that can be easily integrated into their transaction streams and decision-making processes. This segment also includes our business-to-consumer (“B2C”) scoring solutions, including our myFICO.com subscription offerings. • Software . This segment includes pre-configured analytic and decision management solutions designed for a specific type of business need or process — such as account origination, customer management, customer engagement, fraud detection, and marketing — as well as associated professional services. This segment also includes FICO ® Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by our customers to address a wide variety of business use cases. These offerings are available to our customers as SaaS or as on-premises software. Our chief operating decision maker (“CODM”), who is our Chief Executive Officer, evaluates segment financial performance based on segment revenues and segment operating income. Segment operating expenses consist of direct and indirect costs principally related to personnel, facilities, IT infrastructure, consulting, travel and depreciation. 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 amounts are allocated to the segments from their internal cost centers as described above. We have recast certain prior period amounts within this note to conform to the way we internally managed and monitored segment performance during the current fiscal year, reflecting immaterial movements of business activities between segments and changes in cost allocations. The following tables summarize segment information for the quarters and six-month periods ended March 31, 2023 and 2022: Quarter Ended March 31, 2023 Scores Software Unallocated Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 154,584 $ — $ 154,584 Professional services — 27,175 — 27,175 Scores 198,507 — — 198,507 Total segment revenues 198,507 181,759 — 380,266 Segment operating expense (23,102) (126,892) (43,183) (193,177) Segment operating income $ 175,405 $ 54,867 $ (43,183) 187,089 Unallocated share-based compensation expense (27,053) Unallocated amortization expense (275) Operating income 159,761 Unallocated interest expense, net (23,897) Unallocated other income, net 1,605 Income before income taxes $ 137,469 Depreciation expense $ 138 $ 2,723 $ 20 $ 2,881 Quarter Ended March 31, 2022 Scores Software Unallocated Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 149,088 $ — $ 149,088 Professional services — 24,365 — 24,365 Scores 183,742 — — 183,742 Total segment revenues 183,742 173,453 — 357,195 Segment operating expense (22,400) (120,819) (33,440) (176,659) Segment operating income $ 161,342 $ 52,634 $ (33,440) 180,536 Unallocated share-based compensation expense (27,936) Unallocated amortization expense (543) Operating income 152,057 Unallocated interest expense, net (17,211) Unallocated other expense, net (2,361) Income before income taxes $ 132,485 Depreciation expense $ 189 $ 3,807 $ 28 $ 4,024 Six Months Ended March 31, 2023 Scores Software Unallocated Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 299,144 $ — $ 299,144 Professional services — 49,497 — 49,497 Scores 376,495 — — 376,495 Total segment revenues 376,495 348,641 — 725,136 Segment operating expense (44,398) (248,009) (77,265) (369,672) Segment operating income $ 332,097 $ 100,632 $ (77,265) 355,464 Unallocated share-based compensation expense (56,755) Unallocated amortization expense (550) Unallocated gain on product line asset sale 1,941 Operating income 300,100 Unallocated interest expense, net (46,697) Unallocated other income, net 1,969 Income before income taxes $ 255,372 Depreciation expense $ 289 $ 5,697 $ 42 $ 6,028 Six Months Ended March 31, 2022 Scores Software Unallocated Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 275,426 $ — $ 275,426 Professional services — 50,901 — 50,901 Scores 353,229 — — 353,229 Total segment revenues 353,229 326,327 — 679,556 Segment operating expense (43,564) (238,856) (70,592) (353,012) Segment operating income $ 309,665 $ 87,471 $ (70,592) 326,544 Unallocated share-based compensation expense (57,814) Unallocated amortization expense (1,087) Operating income 267,643 Unallocated interest expense, net (29,406) Unallocated other expense, net (932) Income before income taxes $ 237,305 Depreciation expense $ 381 $ 7,684 $ 57 $ 8,122 |
Contingencies
Contingencies | 6 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | ContingenciesWe 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 material exposure on an aggregate basis. |
Nature of Business (Policies)
Nature of Business (Policies) | 6 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Fair Isaac Corporation | 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 leading applied analytics company. 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 nearly 120 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 in the U.S. of consumer credit risk — empowering them to increase financial literacy and manage their financial health. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q and the applicable accounting guidance. Consequently, we have not necessarily included all information and footnotes required for audited financial statements. In our opinion, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments, except as otherwise indicated) necessary for a fair presentation of our financial position and results of operations. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with our audited consolidated financial statements and notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022. The interim financial information contained in this report is not necessarily indicative of the results to be expected for any other interim period or for the entire fiscal year. The condensed consolidated financial statements include the accounts of FICO and its subsidiaries. All intercompany accounts and transactions have been eliminated. |
Use of Estimates | 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 acquired intangible assets, 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. |
New Accounting Pronouncements | New Accounting Pronouncements Recent Accounting Pronouncements Not Yet Adopted In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, “ Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ” (“ASU 2021-08”). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities from acquired contracts using the revenue recognition guidance under Accounting Standards Codification Topic 606, Revenue from Contacts with Customers , in order to align the recognition of a contract liability with the definition of a performance obligation. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which means that it will be effective for our fiscal year beginning October 1, 2023. Early adoption is permitted. We do not believe that adoption of ASU 2021-08 will have a significant impact on our condensed consolidated financial statements. We do not expect that any other recently issued accounting pronouncements will have a significant effect on our financial statements. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial Assets Measured on a Recurring Basis | The following tables represent financial assets that we measured at fair value on a recurring basis at March 31, 2023 and September 30, 2022: March 31, 2023 Active Markets for Fair Value as of (In thousands) Assets: Cash equivalents (1) $ 23,501 $ 23,501 Marketable securities (2) 29,580 29,580 Total $ 53,081 $ 53,081 September 30, 2022 Active Markets for Fair Value as of September 30, 2022 (In thousands) Assets: Cash equivalents (1) $ 19,314 $ 19,314 Marketable securities (2) 24,515 24,515 Total $ 43,829 $ 43,829 (1) Included in cash and cash equivalents on our condensed consolidated balance sheets at March 31, 2023 and September 30, 2022. Not included in these tables are cash deposits of $114.3 million and $113.9 million at March 31, 2023 and September 30, 2022, respectively. (2) Represents securities held under a supplemental retirement and savings plan for certain officers and senior management employees, which are distributed upon termination or retirement of the employees. Included in marketable securities on our condensed consolidated balance sheets at March 31, 2023 and September 30, 2022. |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Outstanding Foreign Currency Forward Contracts | The following tables summarize our outstanding foreign currency forward contracts, by currency, at March 31, 2023 and September 30, 2022: March 31, 2023 Contract Amount Fair Value Foreign USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 11,500 $ 12,519 $ — Buy foreign currency: British pound (GBP) GBP 8,245 $ 10,200 $ — Singapore dollar (SGD) SGD 6,247 $ 4,700 $ — September 30, 2022 Contract Amount Fair Value Foreign USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 13,500 $ 13,158 $ — Buy foreign currency: British pound (GBP) GBP 11,848 $ 13,100 $ — Singapore dollar (SGD) SGD 6,169 $ 4,300 $ — |
Losses on Derivative Financial Instruments | on derivative financial instruments were recorded in our condensed consolidated statements of income and comprehensive income as a component of other income (expense), net, and consisted of the following: Quarter Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 (In thousands) Gains (losses) on foreign currency forward contracts $ 309 $ (576) $ 1,613 $ (14) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Amortization Expense | Amortization expense associated with our intangible assets is reflected as a separate operating expense caption — amortization of intangible assets — and is excluded from cost of revenues and selling, general and administrative expenses within the accompanying condensed consolidated statements of income and comprehensive income. Amortization expense consisted of the following: Quarter Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 (In thousands) Completed technology $ 125 $ 125 $ 250 $ 250 Customer contracts and relationships 150 418 300 837 Total $ 275 $ 543 $ 550 $ 1,087 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future intangible asset amortization expense associated with intangible assets existing at March 31, 2023 was as follows: Year Ending September 30, (In thousands) 2023 (excluding the six months ended March 31, 2023) $ 550 2024 917 Total $ 1,467 |
Schedule of Goodwill | The following table summarizes changes to goodwill during the six months ended March 31, 2023, both in total and as allocated to our segments. We have not recognized any goodwill impairment losses to date. Scores Software Total (In thousands) Balance at September 30, 2022 $ 146,648 $ 614,419 $ 761,067 Foreign currency translation adjustment — 13,263 13,263 Balance at March 31, 2023 $ 146,648 $ 627,682 $ 774,330 |
Composition of Certain Financ_2
Composition of Certain Financial Statement Captions (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Property and Equipment | The following table presents the composition of property and equipment, net and other accrued liabilities at March 31, 2023 and September 30, 2022: March 31, September 30, (In thousands) Property and equipment, net: Property and equipment $ 113,465 $ 112,411 Less: accumulated depreciation and amortization (99,801) (94,831) Total $ 13,664 $ 17,580 Other accrued liabilities: Interest payable $ 21,261 $ 21,314 Current operating leases 17,972 19,369 Other 28,919 25,565 Total $ 68,152 $ 66,248 |
Senior Notes (Tables)
Senior Notes (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Carrying Amounts and Fair Values of Senior Notes | The following table presents the face values and fair values for the Senior Notes at March 31, 2023 and September 30, 2022: March 31, 2023 September 30, 2022 Face Value (*) Fair Value Face Value (*) Fair Value (In thousands) The 2018 Senior Notes $ 400,000 $ 393,000 $ 400,000 $ 381,500 The 2019 Senior Notes and the 2021 Senior Notes 900,000 823,500 900,000 767,250 Total $ 1,300,000 $ 1,216,500 $ 1,300,000 $ 1,148,750 (*) The carrying value of the Senior Notes was the face value reduced by the net debt issuance costs of $12.9 million and $14.3 million at March 31, 2023 and September 30, 2022, respectively. |
Revenue from Contract with Cu_2
Revenue from Contract with Customer (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables provide information about disaggregated revenue by primary geographical market: Quarter Ended March 31, 2023 Scores Software Total Percentage (Dollars in thousands) Americas $ 197,039 $ 121,264 $ 318,303 84 % Europe, Middle East and Africa 1,154 40,199 41,353 11 % Asia Pacific 314 20,296 20,610 5 % Total $ 198,507 $ 181,759 $ 380,266 100 % Quarter Ended March 31, 2022 Scores Software Total Percentage (Dollars in thousands) Americas $ 175,091 $ 104,664 $ 279,755 78 % Europe, Middle East and Africa 1,252 34,128 35,380 10 % Asia Pacific 7,399 34,661 42,060 12 % Total $ 183,742 $ 173,453 $ 357,195 100 % Six Months Ended March 31, 2023 Scores Software Total Percentage (Dollars in thousands) Americas $ 370,336 $ 239,094 $ 609,430 84 % Europe, Middle East and Africa 2,502 71,191 73,693 10 % Asia Pacific 3,657 38,356 42,013 6 % Total $ 376,495 $ 348,641 $ 725,136 100 % Six Months Ended March 31, 2022 Scores Software Total Percentage (Dollars in thousands) Americas $ 340,803 $ 203,849 $ 544,652 80 % Europe, Middle East and Africa 2,745 71,526 74,271 11 % Asia Pacific 9,681 50,952 60,633 9 % Total $ 353,229 $ 326,327 $ 679,556 100 % The following table provides information about disaggregated revenue for our Software segment by deployment method: Quarter Ended March 31, Percentage of revenues Six Months Ended March 31, Percentage of revenues 2023 2022 2023 2022 2023 2022 2023 2022 (Dollars in thousands) On-premises software $ 73,473 $ 77,959 48 % 52 % $ 138,395 $ 135,254 46 % 49 % SaaS software 81,111 71,129 52 % 48 % 160,749 140,172 54 % 51 % Total on-premises and SaaS software $ 154,584 $ 149,088 100 % 100 % $ 299,144 $ 275,426 100 % 100 % The following table provides information about disaggregated revenue for our Software segment by product features: Quarter Ended March 31, Percentage of revenues Six Months Ended March 31, Percentage of revenues 2023 2022 2023 2022 2023 2022 2023 2022 (Dollars in thousands) Platform software (*) $ 38,682 $ 39,802 25 % 27 % $ 69,510 $ 61,874 23 % 22 % Non-platform software 115,902 109,286 75 % 73 % 229,634 213,552 77 % 78 % Total on-premises and SaaS software $ 154,584 $ 149,088 100 % 100 % $ 299,144 $ 275,426 100 % 100 % (*) FICO platform software is a set of interoperable capabilities which use software assets owned and/or governed by FICO for building solutions and services which conform to FICO architectural standards based on key elements of Cloud Native Computing design principles. These standards encompass shared security context and access using FICO standard application programming interfaces. The following table provides information about disaggregated revenue for our Software segment by timing of revenue recognition: Quarter Ended March 31, Percentage of revenues Six Months Ended March 31, Percentage of revenues 2023 2022 2023 2022 2023 2022 2023 2022 (Dollars in thousands) Software recognized at a point in time (1) $ 19,193 $ 26,540 12 % 18 % $ 30,996 $ 33,699 10 % 12 % Software recognized over contract term (2) 135,391 122,548 88 % 82 % 268,148 241,727 90 % 88 % Total on-premises and SaaS software $ 154,584 $ 149,088 100 % 100 % $ 299,144 $ 275,426 100 % 100 % (1) Includes license portion of our on-premises subscription software and perpetual license, both of which are recognized when the software is made available to the customer, or at the start of the subscription. (2) Includes maintenance portion and usage-based fees of our on-premises subscription software, maintenance revenue on perpetual licenses, as well as SaaS revenue. The following table provides information about disaggregated revenue for our Scores segment by distribution method: Quarter Ended March 31, Percentage of revenues Six Months Ended March 31, Percentage of revenues 2023 2022 2023 2022 2023 2022 2023 2022 (Dollars in thousands) Business-to-business Scores $ 144,874 $ 125,243 73 % 68 % $ 269,779 $ 238,211 72 % 67 % Business-to-consumer Scores 53,633 58,499 27 % 32 % 106,716 115,018 28 % 33 % Total $ 198,507 $ 183,742 100 % 100 % $ 376,495 $ 353,229 100 % 100 % We derive a substantial portion of revenues from our contracts with the three major consumer reporting agencies, TransUnion, Equifax and Experian. Revenues collectively generated by agreements with these customers accounted for 43% and 39% of our total revenues in the quarters ended March 31, 2023 and 2022, respectively, with three and two consumer reporting agencies each contributing more than 10% of our total revenues in the quarters ended March 31, 2023 and 2022, respectively. Revenues collectively generated by agreements with these customers accounted for 40% and 38% of our total revenues in the six months ended March 31, 2023 and 2022, respectively, with two consumer reporting agencies each contributing more than 10% of our total revenues in each of the six months ended March 31, 2023 and 2022. |
Schedule of Accounts, Notes, Loans and Financing Receivable | Receivables at March 31, 2023 and September 30, 2022 consisted of the following: March 31, 2023 September 30, 2022 (In thousands) Billed $ 183,907 $ 203,351 Unbilled 199,111 165,386 383,018 368,737 Less: allowance for doubtful accounts (4,590) (4,218) Net receivables 378,428 364,519 Less: long-term receivables (*) (40,189) (42,109) Short-term receivables (*) $ 338,239 $ 322,410 (*) Short-term receivables and long-term receivables were recorded in accounts receivable, net and other assets, respectively, within the accompanying condensed consolidated balance sheets. |
Deferred Revenue, by Arrangement, Disclosure | 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: Six Months Ended (In thousands) Deferred revenues, beginning balance (*) $ 126,560 Revenue recognized that was included in the deferred revenues balance at the beginning of the period (51,360) Increases due to billings, excluding amounts recognized as revenue during the period 49,904 Deferred revenues, ending balance (*) $ 125,104 (*) Deferred revenues at March 31, 2023 included current portion of $118.3 million and long-term portion of $6.8 million that were recorded in deferred revenue and other liabilities, respectively, within the condensed consolidated balance sheets. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share | The following table presents reconciliations for the numerators and denominators of basic and diluted earnings per share (“EPS”) for the quarters and six-month periods ended March 31, 2023 and 2022: Quarter Ended March 31, Six Months Ended March 31, 2023 2022 2023 2022 (In thousands, except per share data) Numerator for diluted and basic earnings per share: Net income $ 101,550 $ 104,383 $ 199,193 $ 189,342 Denominator — share: Basic weighted-average shares 25,116 26,145 25,080 26,662 Effect of dilutive securities 303 276 351 316 Diluted weighted-average shares 25,419 26,421 25,431 26,978 Earnings per share: Basic $ 4.04 $ 3.99 $ 7.94 $ 7.10 Diluted $ 4.00 $ 3.95 $ 7.83 $ 7.02 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Summary of Segment Information | The following tables summarize segment information for the quarters and six-month periods ended March 31, 2023 and 2022: Quarter Ended March 31, 2023 Scores Software Unallocated Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 154,584 $ — $ 154,584 Professional services — 27,175 — 27,175 Scores 198,507 — — 198,507 Total segment revenues 198,507 181,759 — 380,266 Segment operating expense (23,102) (126,892) (43,183) (193,177) Segment operating income $ 175,405 $ 54,867 $ (43,183) 187,089 Unallocated share-based compensation expense (27,053) Unallocated amortization expense (275) Operating income 159,761 Unallocated interest expense, net (23,897) Unallocated other income, net 1,605 Income before income taxes $ 137,469 Depreciation expense $ 138 $ 2,723 $ 20 $ 2,881 Quarter Ended March 31, 2022 Scores Software Unallocated Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 149,088 $ — $ 149,088 Professional services — 24,365 — 24,365 Scores 183,742 — — 183,742 Total segment revenues 183,742 173,453 — 357,195 Segment operating expense (22,400) (120,819) (33,440) (176,659) Segment operating income $ 161,342 $ 52,634 $ (33,440) 180,536 Unallocated share-based compensation expense (27,936) Unallocated amortization expense (543) Operating income 152,057 Unallocated interest expense, net (17,211) Unallocated other expense, net (2,361) Income before income taxes $ 132,485 Depreciation expense $ 189 $ 3,807 $ 28 $ 4,024 Six Months Ended March 31, 2023 Scores Software Unallocated Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 299,144 $ — $ 299,144 Professional services — 49,497 — 49,497 Scores 376,495 — — 376,495 Total segment revenues 376,495 348,641 — 725,136 Segment operating expense (44,398) (248,009) (77,265) (369,672) Segment operating income $ 332,097 $ 100,632 $ (77,265) 355,464 Unallocated share-based compensation expense (56,755) Unallocated amortization expense (550) Unallocated gain on product line asset sale 1,941 Operating income 300,100 Unallocated interest expense, net (46,697) Unallocated other income, net 1,969 Income before income taxes $ 255,372 Depreciation expense $ 289 $ 5,697 $ 42 $ 6,028 Six Months Ended March 31, 2022 Scores Software Unallocated Total (In thousands) Segment revenues: On-premises and SaaS software $ — $ 275,426 $ — $ 275,426 Professional services — 50,901 — 50,901 Scores 353,229 — — 353,229 Total segment revenues 353,229 326,327 — 679,556 Segment operating expense (43,564) (238,856) (70,592) (353,012) Segment operating income $ 309,665 $ 87,471 $ (70,592) 326,544 Unallocated share-based compensation expense (57,814) Unallocated amortization expense (1,087) Operating income 267,643 Unallocated interest expense, net (29,406) Unallocated other expense, net (932) Income before income taxes $ 237,305 Depreciation expense $ 381 $ 7,684 $ 57 $ 8,122 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 | |
Assets: | |||
Marketable securities | $ 29,580 | $ 24,515 | |
Cash deposits | 114,300 | 113,900 | |
Fair Value, Measurements, Recurring | |||
Assets: | |||
Cash equivalents | [1] | 23,501 | 19,314 |
Marketable securities | [2] | 29,580 | 24,515 |
Total | 53,081 | 43,829 | |
Fair Value, Measurements, Recurring | Active Markets for Identical Instruments (Level 1) | |||
Assets: | |||
Cash equivalents | [1] | 23,501 | 19,314 |
Marketable securities | [2] | 29,580 | 24,515 |
Total | $ 53,081 | $ 43,829 | |
[1]Included in cash and cash equivalents on our condensed consolidated balance sheets at March 31, 2023 and September 30, 2022. Not included in these tables are cash deposits of $114.3 million and $113.9 million at March 31, 2023 and September 30, 2022, respectively.[2]Represents securities held under a supplemental retirement and savings plan for certain officers and senior management employees, which are distributed upon termination or retirement of the employees. Included in marketable securities on our condensed consolidated balance sheets at March 31, 2023 and September 30, 2022. |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Detail) - USD ($) | 6 Months Ended | |
Mar. 31, 2023 | Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Short-term forward contracts, average maturities at inception (less than) | 3 months | |
Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Forward foreign currency contracts fair value | $ 0 | $ 0 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Summary of Outstanding Forward Foreign Currency Contracts by Currency (Detail) € in Thousands, £ in Thousands, $ in Thousands, $ in Thousands | Mar. 31, 2023 EUR (€) | Mar. 31, 2023 USD ($) | Mar. 31, 2023 GBP (£) | Mar. 31, 2023 SGD ($) | Sep. 30, 2022 EUR (€) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 GBP (£) | Sep. 30, 2022 SGD ($) |
Foreign Exchange Contracts To Sell European Euro for US Dollar | ||||||||
Derivative [Line Items] | ||||||||
Fair value of forward foreign currency contracts to sell and buy foreign currency | $ 0 | $ 0 | ||||||
Foreign Exchange Contracts To Sell European Euro for US Dollar | Foreign currency forward contracts | Short | Not Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Contract amount of forward foreign currency contracts | € 11,500 | 12,519 | € 13,500 | 13,158 | ||||
Foreign Exchange Contracts To Purchase British Pounds With US Dollars | ||||||||
Derivative [Line Items] | ||||||||
Fair value of forward foreign currency contracts to sell and buy foreign currency | 0 | 0 | ||||||
Foreign Exchange Contracts To Purchase British Pounds With US Dollars | Foreign currency forward contracts | Short | Not Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Contract amount of forward foreign currency contracts | 10,200 | £ 8,245 | 13,100 | £ 11,848 | ||||
Foreign Exchange Contracts To Purchase Singapore Dollars With US Dollars | ||||||||
Derivative [Line Items] | ||||||||
Fair value of forward foreign currency contracts to sell and buy foreign currency | 0 | 0 | ||||||
Foreign Exchange Contracts To Purchase Singapore Dollars With US Dollars | Foreign currency forward contracts | Short | Not Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Contract amount of forward foreign currency contracts | $ 4,700 | $ 6,247 | $ 4,300 | $ 6,169 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Gains (Losses) on Derivative Financial Instruments Recorded in Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Foreign currency forward contracts | ||||
Derivative [Line Items] | ||||
Gains (losses) on foreign currency forward contracts | $ 309 | $ (576) | $ 1,613 | $ (14) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Amortization Expense Associated with Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense of intangible assets | $ 275 | $ 543 | $ 550 | $ 1,087 |
Completed Technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense of intangible assets | 125 | 125 | 250 | 250 |
Customer Contracts | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense of intangible assets | $ 150 | $ 418 | $ 300 | $ 837 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Estimated Future Intangible Asset Amortization Expense (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Estimated future intangible asset amortization expense | ||
2023 (excluding the six months ended March 31, 2023) | $ 550 | |
2024 | 917 | |
Total | $ 1,467 | $ 2,017 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Changes to Goodwill (Detail) $ in Thousands | 6 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Balance at September 30, 2022 | $ 761,067 |
Foreign currency translation adjustment | 13,263 |
Balance at March 31, 2023 | 774,330 |
Scores | |
Goodwill [Roll Forward] | |
Balance at September 30, 2022 | 146,648 |
Foreign currency translation adjustment | 0 |
Balance at March 31, 2023 | 146,648 |
Software | |
Goodwill [Roll Forward] | |
Balance at September 30, 2022 | 614,419 |
Foreign currency translation adjustment | 13,263 |
Balance at March 31, 2023 | $ 627,682 |
Composition of Certain Financ_3
Composition of Certain Financial Statement Captions - Property and Equipment (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Property and equipment | $ 113,465 | $ 112,411 |
Less: accumulated depreciation and amortization | (99,801) | (94,831) |
Total | $ 13,664 | $ 17,580 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Captions - Other Accrued Liability (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Interest payable | $ 21,261 | $ 21,314 |
Current operating leases | 17,972 | 19,369 |
Other Accrued Liabilities, Current | 28,919 | 25,565 |
Other accrued liabilities | $ 68,152 | $ 66,248 |
Revolving Line of Credit (Detai
Revolving Line of Credit (Detail) | Oct. 20, 2021 USD ($) | May 08, 2018 USD ($) | Mar. 31, 2023 USD ($) |
Line of Credit Facility [Line Items] | |||
Revolving credit facility, expiration date | Aug. 19, 2026 | ||
Credit facility restrictive covenant, maximum consolidated leverage ratio | 3.5 | ||
Credit facility restrictive covenant, maximum consolidated leverage ratio step up | 4 | ||
Interest coverage ratio | 3 | ||
Unsecured Long-term Debt, Noncurrent | $ 531,300,000 | ||
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Unsecured revolving line of credit | $ 600,000,000 | ||
Revolving Credit Facility | Unsecured Debt | |||
Line of Credit Facility [Line Items] | |||
Borrowings outstanding | $ 357,000,000 | ||
Interest rate of borrowings outstanding | 6.343% | ||
Term loan | Unsecured Debt | |||
Line of Credit Facility [Line Items] | |||
Initial Term Loan to Bank | $ 300,000,000 | ||
Line of Credit Facility, Periodic Payment | $ 3,750,000 | ||
Interest rate of borrowings outstanding | 6.529% | ||
Loans Payable to Bank | $ 281,300,000 | ||
Federal Fund Rate | |||
Line of Credit Facility [Line Items] | |||
Debt instrument basis spread on variable rate | 0.50% | ||
Base Rate | Minimum | |||
Line of Credit Facility [Line Items] | |||
Debt instrument basis spread on variable rate | 0% | ||
Base Rate | Maximum | |||
Line of Credit Facility [Line Items] | |||
Debt instrument basis spread on variable rate | 0.75% | ||
SOFR | |||
Line of Credit Facility [Line Items] | |||
Debt instrument basis spread on variable rate | 1% | ||
SOFR | Minimum | |||
Line of Credit Facility [Line Items] | |||
Debt instrument basis spread on variable rate | 1% | ||
SOFR | Maximum | |||
Line of Credit Facility [Line Items] | |||
Debt instrument basis spread on variable rate | 1.75% |
Senior Notes (Detail)
Senior Notes (Detail) - USD ($) | Dec. 17, 2021 | Dec. 06, 2019 | May 08, 2018 | Mar. 31, 2023 | Sep. 30, 2022 |
Debt Instrument [Line Items] | |||||
Carrying value of Senior Notes | $ 1,300,000,000 | $ 1,300,000,000 | |||
Fair value of Senior Notes | 1,216,500,000 | 1,148,750,000 | |||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | 12,900,000 | 14,300,000 | |||
May 2018 Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Senior Notes issued in a private placement to a group of institutional investors | $ 400,000,000 | ||||
Carrying value of Senior Notes | 400,000,000 | 400,000,000 | |||
Fair value of Senior Notes | 393,000,000 | 381,500,000 | |||
Debt instrument, maturity date | May 15, 2026 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | ||||
Dec 2019 Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Carrying value of Senior Notes | 900,000,000 | 900,000,000 | |||
Fair value of Senior Notes | $ 823,500,000 | $ 767,250,000 | |||
Senior Notes December Twenty one | |||||
Debt Instrument [Line Items] | |||||
Senior Notes issued in a private placement to a group of institutional investors | $ 550,000,000 | ||||
Debt instrument, maturity date | Jun. 15, 2028 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4% | ||||
Senior Notes 2019 | |||||
Debt Instrument [Line Items] | |||||
Senior Notes issued in a private placement to a group of institutional investors | $ 350,000,000 | ||||
Debt instrument, maturity date | Jun. 15, 2028 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 4% |
Disaggregation of Revenue (Deta
Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 380,266 | $ 357,195 | $ 725,136 | $ 679,556 |
Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 100% | 100% | 100% | 100% |
Revenue from Contract with Customer Benchmark [Member] | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 100% | 100% | 100% | 100% |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Number of Customers | 3 | 2 | 2 | 2 |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk | TransUnion, Equifax and Experian customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 43% | 39% | 40% | 38% |
On-premises and SaaS software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 154,584 | $ 149,088 | $ 299,144 | $ 275,426 |
On-premises and SaaS software | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 100% | 100% | 100% | 100% |
On-premises and SaaS software | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 12% | 18% | 10% | 12% |
On-premises and SaaS software | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 88% | 82% | 90% | 88% |
On-Premises | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 48% | 52% | 46% | 49% |
SaaS Products | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 52% | 48% | 54% | 51% |
Platform software | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 25% | 27% | 23% | 22% |
Non-platform software | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 75% | 73% | 77% | 78% |
Operating Segments | On-premises and SaaS software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 299,144 | $ 275,426 | ||
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 318,303 | $ 279,755 | $ 609,430 | $ 544,652 |
Americas | Revenue from Contract with Customer Benchmark [Member] | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 84% | 78% | 84% | 80% |
EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 41,353 | $ 35,380 | $ 73,693 | $ 74,271 |
EMEA | Revenue from Contract with Customer Benchmark [Member] | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 11% | 10% | 10% | 11% |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 20,610 | $ 42,060 | $ 42,013 | $ 60,633 |
Asia Pacific | Revenue from Contract with Customer Benchmark [Member] | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 5% | 12% | 6% | 9% |
Scores | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 198,507 | $ 183,742 | $ 376,495 | $ 353,229 |
Scores | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 100% | 100% | 100% | 100% |
Scores | Business to business Scores | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 144,874 | $ 125,243 | $ 269,779 | $ 238,211 |
Scores | Business to business Scores | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 73% | 68% | 72% | 67% |
Scores | Business to consumer Scores | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 53,633 | $ 58,499 | $ 106,716 | $ 115,018 |
Scores | Business to consumer Scores | Revenue from Contract with Customer Benchmark [Member] | Product Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration Risk, Percentage | 27% | 32% | 28% | 33% |
Scores | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 198,507 | $ 183,742 | $ 376,495 | $ 353,229 |
Scores | Operating Segments | On-premises and SaaS software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Scores | Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 197,039 | 175,091 | 370,336 | 340,803 |
Scores | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,154 | 1,252 | 2,502 | 2,745 |
Scores | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 314 | 7,399 | 3,657 | 9,681 |
Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 181,759 | 173,453 | 348,641 | 326,327 |
Software | On-premises and SaaS software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 154,584 | 149,088 | 299,144 | 275,426 |
Software | On-premises and SaaS software | Transferred at Point in Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 19,193 | 26,540 | 30,996 | 33,699 |
Software | On-premises and SaaS software | Transferred over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 135,391 | 122,548 | 268,148 | 241,727 |
Software | On-Premises | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 73,473 | 77,959 | 138,395 | 135,254 |
Software | SaaS Products | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 81,111 | 71,129 | 160,749 | 140,172 |
Software | Platform software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 38,682 | 39,802 | 69,510 | 61,874 |
Software | Non-platform software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 115,902 | 109,286 | 229,634 | 213,552 |
Software | Operating Segments | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 181,759 | 173,453 | 348,641 | 326,327 |
Software | Operating Segments | On-premises and SaaS software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 154,584 | 149,088 | 299,144 | 275,426 |
Software | Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 121,264 | 104,664 | 239,094 | 203,849 |
Software | EMEA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 40,199 | 34,128 | 71,191 | 71,526 |
Software | Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 20,296 | $ 34,661 | $ 38,356 | $ 50,952 |
Contract Balance - Receivables
Contract Balance - Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Billed | $ 183,907 | $ 203,351 |
Unbilled | 199,111 | 165,386 |
Receivables Gross | 383,018 | 368,737 |
Less: allowance for doubtful accounts | (4,590) | (4,218) |
Accounts Receivable, after Allowance for Credit Loss | 378,428 | 364,519 |
Less: long-term receivables | (40,189) | (42,109) |
Accounts receivable, net | $ 338,239 | $ 322,410 |
Contract Balance - Deferred Rev
Contract Balance - Deferred Revenues (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2023 | Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Contract with Customer, Liability | $ 125,104 | $ 126,560 |
Revenue recognized that was included in the deferred revenues balance at the beginning of the period | (51,360) | |
Increases due to billings, excluding amounts recognized as revenue during the period | 49,904 | |
Deferred revenue, current portion | 118,300 | |
Deferred revenue, noncurrent | $ 6,800 |
Contract Balances - Payment Ter
Contract Balances - Payment Terms (Details) | 6 Months Ended |
Mar. 31, 2023 | |
Minimum | |
Contract with Customer, Payment Term [Line Items] | |
Contract With Customer, Payment Term | 30 days |
Maximum | |
Contract with Customer, Payment Term [Line Items] | |
Contract With Customer, Payment Term | 60 days |
Performance Obligation (Details
Performance Obligation (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Sep. 30, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, amount | $ 420.9 | $ 357.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Percentage | 50% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 16 months |
Income Taxes -Additional Inform
Income Taxes -Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 26.10% | 21.20% | 22% | 20.20% | |
Unrecognized tax benefits, uncertain tax positions | $ 13 | $ 13 | $ 13 | ||
Unrecognized tax benefits, accrued interest | $ 0.8 | $ 0.8 | $ 0.5 |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator for diluted and basic earnings per share: | ||||
Net income | $ 101,550 | $ 104,383 | $ 199,193 | $ 189,342 |
Denominator — share: | ||||
Basic weighted-average shares (in shares) | 25,116 | 26,145 | 25,080 | 26,662 |
Effect of dilutive securities (in shares) | 303 | 276 | 351 | 316 |
Diluted weighted-average shares (in shares) | 25,419 | 26,421 | 25,431 | 26,978 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 4.04 | $ 3.99 | $ 7.94 | $ 7.10 |
Diluted (in dollars per share) | $ 4 | $ 3.95 | $ 7.83 | $ 7.02 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Mar. 31, 2023 Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | |
Segment revenues: | ||||
Total revenues | $ 380,266 | $ 357,195 | $ 725,136 | $ 679,556 |
Segment operating expense | (220,505) | (205,138) | (425,036) | (411,913) |
Operating income | 159,761 | 152,057 | 300,100 | 267,643 |
Unallocated share-based compensation expense | (27,053) | (27,936) | (56,755) | (57,814) |
Unallocated amortization expense | (275) | (543) | (550) | (1,087) |
Unallocated interest expense | (23,897) | (17,211) | (46,697) | (29,406) |
Unallocated other income, net | 1,605 | (2,361) | 1,969 | (932) |
Income before income taxes | 137,469 | 132,485 | 255,372 | 237,305 |
Depreciation expense | 2,881 | 4,024 | 6,028 | 8,122 |
Gain on product line asset sale | 1,941 | 0 | ||
Operating Segments | ||||
Segment revenues: | ||||
Segment operating expense | (193,177) | (176,659) | (369,672) | (353,012) |
Operating income | 187,089 | 180,536 | 355,464 | 326,544 |
Unallocated Corporate Expenses | ||||
Segment revenues: | ||||
Segment operating expense | (43,183) | (33,440) | (77,265) | (70,592) |
Operating income | (43,183) | (33,440) | (77,265) | (70,592) |
Depreciation expense | 20 | 28 | 42 | 57 |
Scores | ||||
Segment revenues: | ||||
Total revenues | 198,507 | 183,742 | 376,495 | 353,229 |
Scores | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 198,507 | 183,742 | 376,495 | 353,229 |
Segment operating expense | (23,102) | (22,400) | (44,398) | (43,564) |
Operating income | 175,405 | 161,342 | 332,097 | 309,665 |
Depreciation expense | 138 | 189 | 289 | 381 |
Software | ||||
Segment revenues: | ||||
Total revenues | 181,759 | 173,453 | 348,641 | 326,327 |
Software | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 181,759 | 173,453 | 348,641 | 326,327 |
Segment operating expense | (126,892) | (120,819) | (248,009) | (238,856) |
Operating income | 54,867 | 52,634 | 100,632 | 87,471 |
Depreciation expense | 2,723 | 3,807 | 5,697 | 7,684 |
Professional services | ||||
Segment revenues: | ||||
Total revenues | 27,175 | 24,365 | 49,497 | 50,901 |
Professional services | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 49,497 | 50,901 | ||
Professional services | Scores | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 0 | 0 | 0 | 0 |
Professional services | Software | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 27,175 | 24,365 | 49,497 | 50,901 |
On-premises and SaaS software | ||||
Segment revenues: | ||||
Total revenues | 154,584 | 149,088 | 299,144 | 275,426 |
On-premises and SaaS software | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 299,144 | 275,426 | ||
On-premises and SaaS software | Scores | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 0 | 0 | 0 | 0 |
On-premises and SaaS software | Software | ||||
Segment revenues: | ||||
Total revenues | 154,584 | 149,088 | 299,144 | 275,426 |
On-premises and SaaS software | Software | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 154,584 | 149,088 | 299,144 | 275,426 |
Scores | ||||
Segment revenues: | ||||
Total revenues | 198,507 | 183,742 | 376,495 | 353,229 |
Scores | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 376,495 | 353,229 | ||
Scores | Scores | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | 198,507 | 183,742 | 376,495 | 353,229 |
Scores | Software | Operating Segments | ||||
Segment revenues: | ||||
Total revenues | $ 0 | $ 0 | $ 0 | $ 0 |