Segment Information

6 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

We are organized into the following three operating segments, each of which is a reportable segment, 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 and six months ended March 31, 2015 and 2014:

	Quarter Ended March 31, 2015
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	80,315		$	47,814		$	10,554		$	—		$	138,683
Professional services	30,992			966			5,988			—			37,946
License	23,081			1,157			6,242			—			30,480
Total segment revenues	134,388			49,937			22,784			—			207,109
Segment operating expense	(95,035		)	(14,618		)	(27,987		)	(19,753		)	(157,393		)
Segment operating income (loss)	$	39,353		$	35,319		$	(5,203	)	$	(19,753	)	49,716
Unallocated share-based compensation expense													(11,802		)
Unallocated amortization expense													(3,515		)
Operating income													34,399
Unallocated interest expense, net													(7,718		)
Unallocated other expense, net													(648		)
Income before income taxes													$	26,033
Depreciation expense	$	3,706		$	227		$	807		$	685		$	5,425

	Quarter Ended March 31, 2014
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	76,898		$	46,560		$	8,911		$	—		$	132,369
Professional services	28,373			777			5,469			—			34,619
License	10,339			521			7,614			—			18,474
Total segment revenues	115,610			47,858			21,994			—			185,462
Segment operating expense	(78,951		)	(10,939		)	(20,804		)	(24,072		)	(134,766		)
Segment operating income	$	36,659		$	36,919		$	1,190		$	(24,072	)	50,696
Unallocated share-based compensation expense													(9,051		)
Unallocated amortization expense													(2,908		)
Operating income													38,737
Unallocated interest expense, net													(7,099		)
Unallocated other expense, net													(351		)
Income before income taxes													$	31,287
Depreciation expense	$	3,461		$	198		$	622		$	656		$	4,937

	Six Months Ended March 31, 2015
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	158,866		$	90,751		$	20,476		$	—		$	270,093
Professional services	59,491			1,754			11,899			—			73,144
License	31,529			1,373			20,520			—			53,422
Total segment revenues	249,886			93,878			52,895			—			396,659
Segment operating expense	(183,929		)	(27,510		)	(57,526		)	(41,372		)	(310,337		)
Segment operating income (loss)	$	65,957		$	66,368		$	(4,631	)	$	(41,372	)	86,322
Unallocated share-based compensation expense													(20,596		)
Unallocated amortization expense													(6,447		)
Operating income													59,279
Unallocated interest expense, net													(14,923		)
Unallocated other income, net													1
Income before income taxes													$	44,357
Depreciation expense	$	7,214		$	444		$	1,590		$	1,352		$	10,600

	Six Months Ended March 31, 2014
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	154,677		$	89,878		$	17,469		—			$	262,024
Professional services	55,160			1,366			12,379			—			68,905
License	17,689			3,794			17,393			—			38,876
Total segment revenues	227,526			95,038			47,241			—			369,805
Segment operating expense	(160,913		)	(21,314		)	(41,875		)	(45,829		)	(269,931		)
Segment operating income	$	66,613		$	73,724		$	5,366		$	(45,829	)	99,874
Unallocated share-based compensation expense													(16,286		)
Unallocated amortization expense													(5,921		)
Unallocated restructuring and acquisition-related													(3,660		)
Operating income													74,007
Unallocated interest expense, net													(14,225		)
Unallocated other expense, net													(1,312		)
Income before income taxes													$	58,470
Depreciation expense	$	7,098		$	410		$	1,236		$	1,347		$	10,091