Segment Information

3 Months Ended

Dec. 31, 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.

The following tables summarize segment information for the quarters ended December 31, 2014 and 2013:

	Quarter Ended December 31, 2014
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	78,551		$	42,937		$	9,922		$	—		$	131,410
Professional services	28,499			788			5,911			—			35,198
License	8,448			216			14,278			—			22,942
Total segment revenues	115,498			43,941			30,111			—			189,550
Segment operating expense	(88,894		)	(12,892		)	(29,539		)	(21,619		)	(152,944		)
Segment operating income	$	26,604		$	31,049		$	572		$	(21,619	)	36,606
Unallocated share-based compensation expense													(8,794		)
Unallocated amortization expense													(2,932		)
Operating income													24,880
Unallocated interest expense, net													(7,205		)
Unallocated other income, net													649
Income before income taxes													$	18,324
Depreciation expense	$	3,508		$	217		$	783		$	667		$	5,175

	Quarter Ended December 31, 2013
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	77,779		$	43,318		$	8,558		$	—		$	129,655
Professional services	26,787			589			6,910			—			34,286
License	7,350			3,273			9,779			—			20,402
Total segment revenues	111,916			47,180			25,247			—			184,343
Segment operating expense	(81,962		)	(10,375		)	(21,071		)	(21,757		)	(135,165		)
Segment operating income	$	29,954		$	36,805		$	4,176		$	(21,757	)	49,178
Unallocated share-based compensation expense													(7,235		)
Unallocated amortization expense													(3,013		)
Unallocated restructuring and acquisition-related													(3,660		)
Operating income													35,270
Unallocated interest expense, net													(7,126		)
Unallocated other expense, net													(961		)
Income before income taxes													$	27,183
Depreciation expense	$	3,637		$	212		$	614		$	691		$	5,154