Segment Information

9 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

We are organized into the following three reportable segments to align with internal management of our worldwide business operations based on product offerings.

• Applications. Our Applications products are pre-configured decision management applications and associated professional services, designed for a specific type of business problem or process, such as marketing, account origination, customer management, fraud and insurance claims management.

• Scores. This segment includes our business-to-business scoring solutions, our myFICO^® solutions for consumers and associated professional services. Our scoring solutions give our clients access to analytics that can be easily integrated into their transaction streams and decision-making processes. Our scoring solutions are distributed through major credit reporting agencies, as well as services through which we provide our scores to clients directly.

• Tools. The Tools segment is composed of software tools and associated professional services that clients can use to create their own custom decision management applications.

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, 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 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 Chief Executive Officer 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 nine months ended June 30, 2014 and 2013:

	Quarter Ended June 30, 2014
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	78,915		$	44,077		$	9,262		$	—		$	132,254
Professional services	31,898			801			5,823			—			38,522
License	19,043			452			7,339			—			26,834
Total segment revenues	129,856			45,330			22,424			—			197,610
Segment operating expense	(86,413		)	(11,444		)	(24,923		)	(25,424		)	(148,204		)
Segment operating income	$	43,443		$	33,886		$	(2,499	)	$	(25,424	)	49,406
Unallocated share-based compensation expense													(9,345		)
Unallocated amortization expense													(3,019		)
Unallocated restructuring and acquisition-related													(621		)
Operating income													36,421
Unallocated interest income													13
Unallocated interest expense													(7,064		)
Unallocated other income, net													931
Income before income taxes													$	30,301
Depreciation expense	$	3,616		$	213		$	706		$	630		$	5,165

	Quarter Ended June 30, 2013
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	75,537		$	45,915		$	7,970		$	—		$	129,422
Professional services	26,230			806			5,270			—			32,306
License	13,216			431			8,397			—			22,044
Total segment revenues	114,983			47,152			21,637			—			183,772
Segment operating expense	(87,688		)	(12,977		)	(17,569		)	(20,004		)	(138,238		)
Segment operating income	$	27,295		$	34,175		$	4,068		$	(20,004	)	45,534
Unallocated share-based compensation expense													(6,652		)
Unallocated amortization expense													(3,477		)
Unallocated restructuring and acquisition-related													(197		)
Operating income													35,208
Unallocated interest income													15
Unallocated interest expense													(7,432		)
Unallocated other income, net													830
Income before income taxes													$	28,621
Depreciation expense	$	3,789		$	220		$	536		$	705		$	5,250

	Nine Months Ended June 30, 2014
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	233,592		$	133,955		$	26,731		$	—		$	394,278
Professional services	87,058			2,167			18,202			—			107,427
License	36,732			4,246			24,732			—			65,710
Total segment revenues	357,382			140,368			69,665			—			567,415
Segment operating expense	(247,326		)	(32,758		)	(66,798		)	(71,253		)	(418,135		)
Segment operating income	$	110,056		$	107,610		$	2,867		$	(71,253	)	149,280
Unallocated share-based compensation expense													(25,631		)
Unallocated amortization expense													(8,940		)
Unallocated restructuring and acquisition-related													(4,281		)
Operating income													110,428
Unallocated interest income													29
Unallocated interest expense													(21,305		)
Unallocated other expense, net													(381		)
Income before income taxes													$	88,771
Depreciation expense	$	10,714		$	623		$	1,942		$	1,977		$	15,256

	Nine Months Ended June 30, 2013
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	231,174		$	130,558		$	24,027		$	—		$	385,759
Professional services	79,704			3,333			15,715			—			98,752
License	46,027			770			21,809			—			68,606
Total segment revenues	356,905			134,661			61,551			—			553,117
Segment operating expense	(254,439		)	(38,457		)	(48,479		)	(67,498		)	(408,873		)
Segment operating income	$	102,466		$	96,204		$	13,072		$	(67,498	)	144,244
Unallocated share-based compensation expense													(18,897		)
Unallocated amortization expense													(10,453		)
Unallocated restructuring and acquisition-related													(3,486		)
Operating income													111,408
Unallocated interest income													45
Unallocated interest expense													(23,167		)
Unallocated other income, net													765
Income before income taxes													$	89,051
Depreciation expense	$	10,564		$	659		$	1,487		$	1,997		$	14,707