Segment Information

12 Months Ended

Sep. 30, 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. This segment is composed of analytic and decision management software tools that clients can use to create their own custom decision management applications, our new FICO^® Decision Management Suite, as well as associated professional services.

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 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 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 fiscal 2015, 2014 and 2013:

	Year Ended September 30, 2015
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	320,596		$	200,426		$	43,210		$	—		$	564,232
Professional services	124,562			2,901			24,310			—			151,773
License	81,116			3,680			37,980			—			122,776
Total segment revenues	526,274			207,007			105,500			—			838,781
Segment operating expense	(366,666		)	(55,793		)	(111,850		)	(89,744		)	(624,053		)
Segment operating income (loss)	$	159,608		$	151,214		$	(6,350	)	$	(89,744	)	$	214,728
Unallocated share-based compensation expense													(45,308		)
Unallocated amortization expense													(13,673		)
Unallocated restructuring and acquisition-related expenses													(18,242		)
Operating income													137,505
Unallocated interest expense, net													(29,150		)
Unallocated other income, net													883
Income before income taxes													$	109,238
Depreciation expense	$	13,861		$	921		$	3,087		$	2,347		$	20,216

	Year Ended September 30, 2014
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	313,316		$	178,023		$	36,224		$	—		$	527,563
Professional services	121,100			2,784			25,950			—			149,834
License	69,840			5,662			36,086			—			111,588
Total segment revenues	504,256			186,469			98,260			—			788,985
Segment operating expense	(334,762		)	(44,187		)	(94,057		)	(101,551		)	(574,557		)
Segment operating income	$	169,494		$	142,282		$	4,203		$	(101,551	)	214,428
Unallocated share-based compensation expense													(36,362		)
Unallocated amortization expense													(11,917		)
Unallocated restructuring and acquisition-related expenses													(4,281		)
Operating income													161,868
Unallocated interest expense, net													(28,550		)
Unallocated other expense, net													(187		)
Income before income taxes													$	133,131
Depreciation expense	$	14,451		$	851		$	2,752		$	2,661		$	20,715

	Year Ended September 30, 2013
	Applications			Scores			Tools			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	306,738		$	175,281		$	32,285		$	—		$	514,304
Professional services	110,081			4,012			21,101			—			135,194
License	59,265			1,520			33,161			—			93,946
Total segment revenues	476,084			180,813			86,547			—			743,444
Segment operating expense	(334,953		)	(50,546		)	(67,078		)	(86,403		)	(538,980		)
Segment operating income	$	141,131		$	130,267		$	19,469		$	(86,403	)	204,464
Unallocated share-based compensation expense													(25,850		)
Unallocated amortization expense													(13,535		)
Unallocated restructuring and acquisition-related expenses													(3,486		)
Operating income													161,593
Unallocated interest expense, net													(30,227		)
Unallocated other income, net													618
Income before income taxes													$	131,984
Depreciation expense	$	14,171		$	867		$	1,998		$	2,643		$	19,679

Our revenues and percentage of revenues by reportable market segments were as follows for fiscal 2015, 2014 and 2013, the majority of which were derived from the sale of products and services within the banking (including consumer credit) industry:

	Year Ended September 30,
	2015				2014				2013
	(Dollars in thousands)
Applications	$	526,274	63	%	$	504,256	64	%	$	476,084	64	%
Scores	207,007		25	%	186,469		24	%	180,813		24	%
Tools	105,500		12	%	98,260		12	%	86,547		12	%
Total	$	838,781	100	%	$	788,985	100	%	$	743,444	100	%

Within our Applications segment our fraud solutions accounted for 23%, 23% and 22% of total revenues in each of fiscal 2015, 2014 and 2013, respectively; our customer management solutions accounted for 9%, 10% and 11% of total revenues, in each of these periods, respectively; and our collections & recovery solutions accounted for 9% for each of these periods.

Our revenues and percentage of revenues on a geographical basis are summarized below for fiscal 2015, 2014 and 2013:

	Year Ended September 30,
	2015				2014				2013
	(Dollars in thousands)
United States	$	505,109	60	%	$	457,270	58	%	$	449,437	60	%
United Kingdom	93,855		11	%	98,784		12	%	79,238		11	%
Other countries	239,817		29	%	232,931		30	%	214,769		29	%
Total	$	838,781	100	%	$	788,985	100	%	$	743,444	100	%

During fiscal 2015, 2014 and 2013, no individual customer accounted for 10% or more of our total revenues; however, we derive a substantial portion of revenues from our contracts with the three major credit reporting agencies, TransUnion, Equifax and Experian. Revenues collectively generated by agreements with these customers accounted for 16%, 15% and 16% of our total revenues in fiscal 2015, 2014 and 2013, respectively. At September 30, 2015 and 2014, no individual customer accounted for 10% or more of total consolidated receivables.

Our property and equipment, net, on a geographical basis are summarized below at September 30, 2015 and 2014. At September 30, 2015 and 2014, no individual country outside the U.S. accounted for 10% or more of total consolidated net property and equipment.

	September 30,
	2015				2014
	(Dollars in thousands)
United States	$	29,949	78	%	$	29,276	80	%
International	8,259		22	%	7,401		20	%
Total	$	38,208	100	%	$	36,677	100	%