ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Non-Accelerated Filer | ☐ | Smaller Reporting Company | |||
Emerging Growth Company |
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• | Applications. This segment includes pre-configured decision management applications designed for a specific type of business problem or process — such as marketing, account origination, customer management, fraud, financial crimes compliance, collections and insurance claims management — as well as associated professional services. These applications are available to our customers as on-premises software, and many are available as hosted, software-as-a-service (“SaaS”) applications through the FICO® Analytic Cloud or Amazon Web Services (“AWS”). |
• | Scores. This segment includes our business-to-business scoring solutions and services, our business-to-consumer scoring solutions and services including 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 worldwide, as well as services through which we provide our scores to clients directly. |
• | Decision Management Software. This segment is composed of analytic and decision management software tools that clients can use to create their own custom decision management applications, our FICO® Decision Management Suite, as well as associated professional services. Decision management software is currently delivered as part of the FICO® Platform and is increasingly being adopted to connect decisioning solutions or previously disconnected use cases. These tools are available to our customers as on-premises software, through the FICO® Analytic Cloud or AWS. |
• | Analytics, which include predictive analytics that identify risks and opportunities associated with individual customers, prospects and transactions, in order to detect patterns such as risk, fraud or profitability, as well as optimization analytics that are used to mathematically improve the design of decision logic or “strategies.” |
• | Data management and transaction profiling that bring extensive consumer information to every decision. |
• | Software such as decision management systems that author and implement business rules, models and decision strategies, often in a real-time environment, as well as software for managing customer engagement. This software is increasingly deployed as a platform solution that enables previously disparate use cases to be connected in a manner that provides a centralized or 360-degree view of a customer’s journey through traditionally siloed client offerings. |
• | Consulting services that help clients make the most of investments in FICO applications, tools and scores in the shortest possible time. |
• | FICO® Decision Management Platform, which connects, executes and powers proprietary platform services that dramatically improve performance, data interchange, model tracking and user collaboration; |
• | FICO® Decision Modeler, the core decision rules modeling tool, which enables users to flexibly author and manage decision rules and strategies; |
• | FICO® Analytics Workbench™, the consolidated predictive analytics modeling authoring tool, with data wrangling, machine learning and explainable AI; |
• | FICO® Applications Workbench, an agile application UI builder, which leverages platform services to speed time to application deployment; |
• | FICO® Strategy Director, which helps organizations proactively manage consumer accounts to increase revenue, decrease risk and improve customer retention; |
• | FICO® Decision Central™ (formerly known as Model Central), a solution which enables users to monitor, manage, measure and control the deployment and performance of all decision assets including analytic models and rules-based decision strategies; |
• | FICO® Xpress Optimization, an optimization modeling suite which includes both the solver technology, Mosel, as well as a general-purpose optimization solver, Xpress Insight; and |
• | FICO® Decision Management Platform Streaming, a real-time and batch data ingestion solution that uniquely delivers in-stream analytics for real-time data insights and complex event processing. |
• | in-house analytic and systems developers; |
• | scoring model builders; |
• | enterprise resource planning and customer relationship management packaged solutions providers; |
• | business intelligence solutions providers; |
• | business process management and decision rules management providers; |
• | providers of credit reports and credit scores; |
• | providers of automated application processing services; |
• | data vendors; |
• | neural network developers and artificial intelligence system builders; |
• | third-party professional services and consulting organizations; |
• | providers of account/workflow management software; |
• | software companies supplying predictive analytic modeling, rules, or analytic development tools; collections and recovery solutions providers; entity resolution and social network analysis solutions providers; and |
• | providers of cloud-based customer engagement and risk management solutions. |
• | changes in the business analytics industry; |
• | changes in technology; |
• | our inability to obtain or use key data for our products; |
• | saturation or contraction of market demand; |
• | loss of key customers; |
• | industry consolidation; |
• | failure to successfully adopt cloud-based technologies; |
• | our inability to obtain regulatory approvals for our products and services, including credit score models; |
• | the increasing availability of free or relatively inexpensive consumer credit, credit score and other information from public or commercial sources; |
• | failure to execute our selling approach; and |
• | inability to successfully sell our products in new vertical markets. |
• | innovate by internally developing new and competitive technologies; |
• | use leading third-party technologies effectively; |
• | continue to develop our technical expertise; |
• | anticipate and effectively respond to changing customer needs; |
• | initiate new product introductions in a way that minimizes the impact of customers delaying purchases of existing products in anticipation of new product releases; and |
• | influence and respond to emerging industry standards and other technological changes. |
• | in-house analytic and systems developers; |
• | scoring model builders; |
• | fraud and security management providers; |
• | enterprise resource planning, customer relationship management, and customer communication and mobility solution providers; |
• | business intelligence solutions providers; |
• | credit report and credit score providers; |
• | business process management and decision rules management providers; |
• | process modeling tools providers; |
• | automated application processing services providers; |
• | data vendors; |
• | neural network developers and artificial intelligence system builders; |
• | third-party professional services and consulting organizations; |
• | account/workflow management software providers; |
• | software tools companies supplying modeling, rules, or analytic development tools; collections and recovery solutions providers; entity resolution and social network analysis solutions providers; and |
• | cloud-based customer engagement and risk management solutions providers. |
• | our ongoing business may be disrupted and our management’s attention may be diverted by acquisition, transition or integration activities; |
• | an acquisition may not further our business strategy as we expected, we may not integrate acquired operations or technology as successfully as we expected or we may overpay for our investments, or otherwise not realize the expected return, which could adversely affect our business or operating results; |
• | we may be unable to retain the key employees, customers and other business partners of the acquired operation; |
• | we may have difficulties entering new markets where we have no or limited direct prior experience or where competitors may have stronger market positions; |
• | our operating results or financial condition may be adversely impacted by known or unknown claims or liabilities we assume in an acquisition or that are imposed on us as a result of an acquisition, including claims by government agencies or authorities, terminated employees, current or former customers, former stockholders or other third parties; |
• | we may not realize the anticipated increase in our revenues from an acquisition for a number of reasons, including if a larger than predicted number of customers decline to renew their contracts, if we are unable to incorporate the acquired technologies or products with our existing product lines in a uniform manner, if we are unable to sell the acquired products to our customer base or if contract models of an acquired company or changes in accounting treatment do not allow us to recognize revenues on a timely basis; |
• | our use of cash to pay for acquisitions may limit other potential uses of our cash, including stock repurchases, dividend payments and retirement of outstanding indebtedness; and |
• | to the extent we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease. |
• | disruption of our operations or businesses; |
• | reductions of our revenues or earnings per share; |
• | difficulties in the separation of operations, services, products and personnel; |
• | finding a suitable purchaser; |
• | disposing of businesses or assets at a price or on terms that are less favorable than we had anticipated, or with purchase price adjustments or the exclusion of assets or liabilities that must be divested, managed or run off separately; |
• | diversion of management's attention from our other businesses; |
• | the potential loss of key personnel; |
• | adverse effects on relationships with our suppliers or their businesses, |
• | the erosion of employee morale or customer confidence; and |
• | the retention of contingent liabilities related to the divested business. |
• | general economic and political conditions in countries where we sell our products and services; |
• | difficulty in staffing and efficiently managing our operations in multiple geographic locations and in various countries; |
• | effects of a variety of foreign laws and regulations, including restrictions on access to personal information; |
• | data privacy and consumer protection laws and regulations; |
• | import and export licensing requirements; |
• | longer payment cycles; |
• | difficulties in enforcing contracts and collecting accounts receivable; |
• | reduced protection for intellectual property rights; |
• | currency fluctuations; |
• | unfavorable tax rules or changes in tariffs and other trade barriers; |
• | the presence and acceptance of varying level of business corruption in international markets; |
• | terrorism, war, natural disasters and pandemics, including the COVID-19 pandemic; and |
• | difficulties and delays in translating products and related documentation into foreign languages. |
• | Use of data by creditors and consumer reporting agencies (e.g., the U.S. Fair Credit Reporting Act); |
• | Laws and regulations that limit the use of credit scoring models (e.g., state “mortgage trigger” or “inquiries” laws, state insurance restrictions on the use of credit-based insurance scores, and the E.U. Consumer Credit Directive); |
• | Fair lending laws (e.g., the Equal Credit Opportunity Act and Regulation B, and the Fair Housing Act); |
• | Privacy and security laws and regulations that limit the use and disclosure of personally identifiable information, require security procedures, or otherwise apply to the collection, processing, storage, use and transfer of protected data (e.g., the U.S. Financial Services Modernization Act of 1999, also known as the Gramm Leach Bliley Act; the General Data Protection Regulation (the “GDPR”) and country-specific data protection laws enacted to supplement the GDPR; the U.S. Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act; the Cybersecurity Act of 2015; the U.S. Department of Commerce’s National Institute of Standards and Technology’s Cybersecurity Framework; the Clarifying Lawful Overseas Use of Data Act; and identity theft, file freezing, security breach notification and similar state privacy laws); |
• | Extension of credit to consumers through the Electronic Fund Transfers Act and Regulation E, as well as non‑governmental VISA and MasterCard electronic payment standards; |
• | Laws and regulations applicable to secondary market participants (e.g., Fannie Mae and Freddie Mac) that could have an impact on our scoring products and revenues, including 12 CFR Part 1254 (Validation and Approval of Credit Score Models) issued by the Federal Housing Finance Agency in accordance with Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174), and any regulations, standards or criteria established pursuant to such laws or regulations; |
• | Laws and regulations applicable to our customer communication clients and their use of our products and services (e.g., the Telemarketing Sales Rule, Telephone Consumer Protection Act and regulations promulgated thereunder); |
• | Laws and regulations applicable to our insurance clients and their use of our insurance products and services; |
• | The application or extension of consumer protection laws, including implementing regulations (e.g., the Consumer Financial Protection Act, the Federal Trade Commission Act, the Truth In Lending Act and Regulation Z, the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, the Military Lending Act, and the Credit Repair Organizations Act); |
• | Laws and regulations governing the use of the Internet and social media, telemarketing, advertising, endorsements and testimonials; |
• | Anti-bribery and corruption laws and regulations (e.g., the Foreign Corrupt Practices Act and the UK Bribery Act 2010); |
• | Financial regulatory standards (e.g., Sarbanes-Oxley Act requirements to maintain and verify internal process controls, including controls for material event awareness and notification); |
• | Regulatory requirements for managing third parties (e.g., vendors, contractors, suppliers and distributors); |
• | Anti-money laundering laws and regulations (e.g., the Bank Secrecy Act and the USA PATRIOT Act); |
• | Financial regulatory reform stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act and the many regulations mandated by that Act, including regulations issued by, and the supervisory and investigative authority of, the Consumer Financial Protection Bureau; and |
• | Laws and regulations regarding export controls as they apply to FICO products delivered in non-U.S. countries (e.g., Office of Foreign Asset Control sanctions, and Export Administration Regulations). |
• | incur significant defense costs or substantial damages; |
• | be required to cease the use or sale of infringing products; |
• | expend significant resources to develop or license a substitute non-infringing technology; |
• | discontinue the use of some technology; or |
• | be required to obtain a license under the intellectual property rights of the third party claiming infringement, which license may not be available or might require substantial royalties or license fees that would reduce our margins. |
• | impairment of goodwill or intangible assets, or a reduction in the useful lives of intangible assets acquired; |
• | amortization of intangible assets acquired; |
• | identification of, or changes to, assumed contingent liabilities, both income tax and non-income tax related, after our final determination of the amounts for these contingencies or the conclusion of the measurement period (generally up to one year from the acquisition date), whichever comes first; |
• | costs incurred to combine the operations of companies we acquire, such as transitional employee expenses and employee retention, redeployment or relocation expenses; |
• | charges to our operating results to maintain certain duplicative pre-merger activities for an extended period of time or to maintain these activities for a period of time that is longer than we had anticipated, charges to eliminate certain duplicative pre-merger activities, and charges to restructure our operations or to reduce our cost structure; and |
• | charges to our operating results resulting from expenses incurred to effect the acquisition. |
• | variability in demand from our existing customers; |
• | failure to meet the expectations of market analysts; |
• | changes in recommendations by market analysts; |
• | the lengthy and variable sales cycle of many products, combined with the relatively large size of orders for our products, increases the likelihood of short-term fluctuation in revenues; |
• | consumer or customer dissatisfaction with, or problems caused by, the performance of our products; |
• | the timing of new product announcements and introductions in comparison with our competitors; |
• | the level of our operating expenses; |
• | changes in demand and competitive and other conditions in the consumer credit, banking and insurance industries; |
• | fluctuations in domestic and international economic conditions, such as those which have occurred as a result of the COVID-19 pandemic; |
• | our ability to complete large installations, and to adopt and configure cloud-based deployments, on schedule and within budget; |
• | announcements relating to litigation or regulatory matters; |
• | changes in senior management or key personnel; |
• | acquisition-related expenses and charges; and |
• | timing of orders for and deliveries of software systems. |
• | approximately 55,000 square feet of office space in San Jose, California in one building under a lease expiring in fiscal 2024; this is used for our corporate headquarters and all of our segments; |
• | approximately 173,000 square feet of office space in Bangalore, India in one building under a lease expiring in fiscal 2022; this is used for our Applications and Decision Management Software segments; |
• | approximately 124,000 square feet of office space in San Rafael, California in one building under a lease expiring in fiscal 2025; this is used for all of our segments; |
• | approximately 80,000 square feet of office space in San Diego, California in one building under a lease expiring in fiscal 2027; this is used for our Applications and Decision Management Software segments; and |
• | approximately 45,000 square feet of office space in Roseville, Minnesota in one building under a lease expiring in fiscal 2028; this is used for all of our segments. |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | |||||||||
July 1, 2020 through July 31, 2020 | 2,298 | $ | 436.71 | — | $ | 250,000,000 | |||||||
August 1, 2020 through August 31, 2020 | 27,880 | $ | 426.55 | 24,000 | $ | 239,776,878 | |||||||
September 1, 2020 through September 30, 2020 | 35,990 | $ | 421.32 | 35,600 | $ | 224,777,076 | |||||||
Total | 66,168 | $ | 424.05 | 59,600 | $ | 224,777,076 |
(1) | Includes 6,568 shares delivered in satisfaction of the tax withholding obligations resulting from the vesting of restricted stock units held by employees during the quarter ended September 30, 2020. |
(2) | In July 2019, our Board of Directors approved a stock repurchase program following the completion of our previous program. This program was open-ended and authorized repurchases of shares of our common stock up to an aggregate cost of $250.0 million in the open market or in negotiated transactions. In July 2020, our Board of Directors approved a new stock repurchase program following the completion of the July 2019 program. The new program is open-ended and authorizes repurchases of shares of our common stock up to an aggregate cost of $250.0 million in the open market or in negotiated transactions. |
Year Ended September 30, | |||||||||||||||||||
2020 (1) | 2019 | 2018 | 2017 (1) | 2016 | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
Revenues | $ | 1,294,562 | $ | 1,160,083 | $ | 1,000,146 | $ | 934,983 | $ | 881,356 | |||||||||
Operating income | 295,969 | 253,548 | 175,359 | 182,159 | 169,592 | ||||||||||||||
Net income | 236,411 | 192,124 | 126,482 | 133,414 | 109,448 | ||||||||||||||
Basic earnings per share | 8.13 | 6.63 | 4.26 | 4.32 | 3.52 | ||||||||||||||
Diluted earnings per share | 7.90 | 6.34 | 4.06 | 4.14 | 3.39 | ||||||||||||||
Dividends declared per share | — | — | — | 0.04 | 0.08 |
September 30, | |||||||||||||||||||
2020 | 2019 | 2018 | 2017 | 2016 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Working capital | $ | 119,567 | $ | (35,122 | ) | $ | (77,514 | ) | $ | 22,842 | $ | 21,561 | |||||||
Total assets | 1,606,240 | 1,433,448 | 1,330,467 | 1,348,728 | 1,220,676 | ||||||||||||||
Senior notes | 750,000 | 485,000 | 513,000 | 244,000 | 316,000 | ||||||||||||||
Revolving line of credit | 95,000 | 345,000 | 257,000 | 361,000 | 255,000 | ||||||||||||||
Stockholders’ equity | 331,082 | 289,767 | 287,437 | 466,183 | 446,828 |
Bookings | Bookings Yield (1) | Number of Bookings over $1 Million | Weighted- Average Term (2) | |||||||||
(In millions) | (months) | |||||||||||
Quarter ended September 30, 2020 | $ | 234.6 | 15 | % | 31 | 55 | ||||||
Quarter ended September 30, 2019 | $ | 160.4 | 15 | % | 34 | 34 | ||||||
Year ended September 30, 2020 | $ | 537.0 | 29 | % | 87 | NM(a) | ||||||
Year ended September 30, 2019 | $ | 481.7 | 31 | % | 95 | NM(a) |
(1) | Bookings yield represents the percentage of revenue recognized from bookings for the periods indicated. |
(2) | Weighted-average term of bookings measures the average term over which bookings are expected to be recognized as revenue. |
(a) | NM - Measure is not meaningful as our estimate of bookings is as of the end of the period in which a contract is signed, and we do not update our initial booking estimates in future periods for changes between estimated and actual results. |
Revenues Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||
Segment | 2020 | 2019 | 2018 | 2020 to 2019 | 2019 to 2018 | 2020 to 2019 | 2019 to 2018 | ||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||
Applications | $ | 602,046 | $ | 605,034 | $ | 564,375 | $ | (2,988 | ) | $ | 40,659 | — | % | 7 | % | ||||||||||
Scores | 528,547 | 421,177 | 335,870 | 107,370 | 85,307 | 25 | % | 25 | % | ||||||||||||||||
Decision Management Software | 163,969 | 133,872 | 99,901 | 30,097 | 33,971 | 22 | % | 34 | % | ||||||||||||||||
Total | $ | 1,294,562 | $ | 1,160,083 | $ | 1,000,146 | 134,479 | 159,937 | 12 | % | 16 | % |
Percentage of Revenues Year Ended September 30, | ||||||||
Segment | 2020 | 2019 | 2018 | |||||
Applications | 46 | % | 52 | % | 56 | % | ||
Scores | 41 | % | 36 | % | 34 | % | ||
Decision Management Software | 13 | % | 12 | % | 10 | % | ||
Total | 100 | % | 100 | % | 100 | % |
Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||
2020 | 2019 | 2018 | 2020 to 2019 | 2019 to 2018 | 2020 to 2019 | 2019 to 2018 | |||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||
Transactional and maintenance | $ | 393,994 | $ | 395,398 | $ | 372,283 | $ | (1,404 | ) | $ | 23,115 | — | % | 6 | % | ||||||||||
Professional services | 136,677 | 137,258 | 142,736 | (581 | ) | (5,478 | ) | — | % | (4 | )% | ||||||||||||||
License | 71,375 | 72,378 | 49,356 | (1,003 | ) | 23,022 | (1 | )% | 47 | % | |||||||||||||||
Total | $ | 602,046 | $ | 605,034 | $ | 564,375 | (2,988 | ) | 40,659 | — | % | 7 | % |
Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||
2020 | 2019 | 2018 | 2020 to 2019 | 2019 to 2018 | 2020 to 2019 | 2019 to 2018 | |||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||
Transactional and maintenance | $ | 517,024 | $ | 415,288 | $ | 331,662 | $ | 101,736 | $ | 83,626 | 24 | % | 25 | % | |||||||||||
Professional services | 1,600 | 2,157 | 1,900 | (557 | ) | 257 | (26 | )% | 14 | % | |||||||||||||||
License | 9,923 | 3,732 | 2,308 | 6,191 | 1,424 | 166 | % | 62 | % | ||||||||||||||||
Total | $ | 528,547 | $ | 421,177 | $ | 335,870 | 107,370 | 85,307 | 25 | % | 25 | % |
Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||
2020 | 2019 | 2018 | 2020 to 2019 | 2019 to 2018 | 2020 to 2019 | 2019 to 2018 | |||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||
Transactional and maintenance | $ | 62,915 | $ | 50,262 | $ | 46,658 | $ | 12,653 | $ | 3,604 | 25 | % | 8 | % | |||||||||||
Professional services | 44,763 | 44,680 | 32,274 | 83 | 12,406 | — | % | 38 | % | ||||||||||||||||
License | 56,291 | 38,930 | 20,969 | 17,361 | 17,961 | 45 | % | 86 | % | ||||||||||||||||
Total | $ | 163,969 | $ | 133,872 | $ | 99,901 | 30,097 | 33,971 | 22 | % | 34 | % |
Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||
2020 | 2019 | 2018 | 2020 to 2019 | 2019 to 2018 | 2020 to 2019 | 2019 to 2018 | |||||||||||||||||||
(In thousands, except employees) | (In thousands, except employees) | ||||||||||||||||||||||||
Revenues | $ | 1,294,562 | $ | 1,160,083 | $ | 1,000,146 | $ | 134,479 | $ | 159,937 | 12 | % | 16 | % | |||||||||||
Operating expenses: | |||||||||||||||||||||||||
Cost of revenues | 361,142 | 336,845 | 312,898 | 24,297 | 23,947 | 7 | % | 8 | % | ||||||||||||||||
Research and development | 166,499 | 149,478 | 128,383 | 17,021 | 21,095 | 11 | % | 16 | % | ||||||||||||||||
Selling, general and administrative | 420,930 | 414,086 | 376,912 | 6,844 | 37,174 | 2 | % | 10 | % | ||||||||||||||||
Amortization of intangible assets | 4,993 | 6,126 | 6,594 | (1,133 | ) | (468 | ) | (18 | )% | (7 | )% | ||||||||||||||
Restructuring and impairment charges | 45,029 | — | — | 45,029 | — | — | % | — | % | ||||||||||||||||
Total operating expenses | 998,593 | 906,535 | 824,787 | 92,058 | 81,748 | 10 | % | 10 | % | ||||||||||||||||
Operating income | 295,969 | 253,548 | 175,359 | 42,421 | 78,189 | 17 | % | 45 | % | ||||||||||||||||
Interest expense, net | (42,177 | ) | (39,752 | ) | (31,311 | ) | (2,425 | ) | (8,441 | ) | 6 | % | 27 | % | |||||||||||
Other income, net | 3,208 | 2,276 | 12,884 | 932 | (10,608 | ) | 41 | % | (82 | )% | |||||||||||||||
Income before income taxes | 257,000 | 216,072 | 156,932 | 40,928 | 59,140 | 19 | % | 38 | % | ||||||||||||||||
Provision for income taxes | 20,589 | 23,948 | 30,450 | (3,359 | ) | (6,502 | ) | (14 | )% | (21 | )% | ||||||||||||||
Net income | $ | 236,411 | $ | 192,124 | $ | 126,482 | 44,287 | 65,642 | 23 | % | 52 | % | |||||||||||||
Number of employees at fiscal year-end | 4,003 | 4,009 | 3,668 | (6 | ) | 341 | — | % | 9 | % |
Percentage of Revenues Year Ended September 30, | ||||||||
2020 | 2019 | 2018 | ||||||
Revenues | 100 | % | 100 | % | 100 | % | ||
Operating expenses: | ||||||||
Cost of revenues | 28 | % | 29 | % | 31 | % | ||
Research and development | 13 | % | 13 | % | 13 | % | ||
Selling, general and administrative | 33 | % | 35 | % | 37 | % | ||
Amortization of intangible assets | — | % | 1 | % | 1 | % | ||
Restructuring and impairment charges | 3 | % | — | % | — | % | ||
Total operating expenses | 77 | % | 78 | % | 82 | % | ||
Operating income | 23 | % | 22 | % | 18 | % | ||
Interest expense, net | (3 | )% | (3 | )% | (3 | )% | ||
Other income, net | — | % | — | % | 1 | % | ||
Income before income taxes | 20 | % | 19 | % | 16 | % | ||
Provision for income taxes | 2 | % | 2 | % | 3 | % | ||
Net income | 18 | % | 17 | % | 13 | % |
Year Ended September 30, | Period-to-Period Change | Period-to-Period Percentage Change | |||||||||||||||||||||||
Segment | 2020 | 2019 | 2018 | 2020 to 2019 | 2019 to 2018 | 2020 to 2019 | 2019 to 2018 | ||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||
Applications | $ | 153,541 | $ | 161,162 | $ | 143,964 | $ | (7,621 | ) | $ | 17,198 | (5 | )% | 12 | % | ||||||||||
Scores | 454,310 | 361,356 | 272,418 | 92,954 | 88,938 | 26 | % | 33 | % | ||||||||||||||||
Decision Management Software | (23,475 | ) | (35,116 | ) | (34,360 | ) | 11,641 | (756 | ) | (33 | )% | 2 | % | ||||||||||||
Unallocated corporate expenses | (144,704 | ) | (144,755 | ) | (125,255 | ) | 51 | (19,500 | ) | — | % | 16 | % | ||||||||||||
Total segment operating income | 439,672 | 342,647 | 256,767 | 97,025 | 85,880 | 28 | % | 33 | % | ||||||||||||||||
Unallocated share-based compensation | (93,681 | ) | (82,973 | ) | (74,814 | ) | (10,708 | ) | (8,159 | ) | 13 | % | 11 | % | |||||||||||
Unallocated amortization expense | (4,993 | ) | (6,126 | ) | (6,594 | ) | 1,133 | 468 | (18 | )% | (7 | )% | |||||||||||||
Unallocated restructuring and impairment charges | (45,029 | ) | — | — | (45,029 | ) | — | — | % | — | % | ||||||||||||||
Operating income | $ | 295,969 | $ | 253,548 | $ | 175,359 | 42,421 | 78,189 | 17 | % | 45 | % |
Year Ended September 30, | Percentage of Revenues | |||||||||||||||||||
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Segment revenues | $ | 602,046 | $ | 605,034 | $ | 564,375 | 100 | % | 100 | % | 100 | % | ||||||||
Segment operating expenses | (448,505 | ) | (443,872 | ) | (420,411 | ) | (74 | )% | (73 | )% | (74 | )% | ||||||||
Segment operating income | $ | 153,541 | $ | 161,162 | $ | 143,964 | 26 | % | 27 | % | 26 | % |
Year Ended September 30, | Percentage of Revenues | |||||||||||||||||||
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Segment revenues | $ | 528,547 | $ | 421,177 | $ | 335,870 | 100 | % | 100 | % | 100 | % | ||||||||
Segment operating expenses | (74,237 | ) | (59,821 | ) | (63,452 | ) | (14 | )% | (14 | )% | (19 | )% | ||||||||
Segment operating income | $ | 454,310 | $ | 361,356 | $ | 272,418 | 86 | % | 86 | % | 81 | % |
Year Ended September 30, | Percentage of Revenues | |||||||||||||||||||
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||
(In thousands) | ||||||||||||||||||||
Segment revenues | $ | 163,969 | $ | 133,872 | $ | 99,901 | 100 | % | 100 | % | 100 | % | ||||||||
Segment operating expenses | (187,444 | ) | (168,988 | ) | (134,261 | ) | (114 | )% | (126 | )% | (134 | )% | ||||||||
Segment operating loss | $ | (23,475 | ) | $ | (35,116 | ) | $ | (34,360 | ) | (14 | )% | (26 | )% | (34 | )% |
Year Ended September 30, | |||||||||||
2020 | 2019 | 2018 | |||||||||
(In thousands) | |||||||||||
Cash provided by (used in): | |||||||||||
Operating activities | $ | 364,916 | $ | 260,350 | $ | 223,052 | |||||
Investing activities | (24,583 | ) | (42,760 | ) | (14,119 | ) | |||||
Financing activities | (289,424 | ) | (200,047 | ) | (218,627 | ) | |||||
Effect of exchange rate changes on cash | 59 | (1,140 | ) | (5,901 | ) | ||||||
Increase (decrease) in cash and cash equivalents | $ | 50,968 | $ | 16,403 | $ | (15,595 | ) |
Year Ending September 30, | Thereafter | Total | |||||||||||||||||||||||||
2021 | 2022 | 2023 | 2024 | 2025 | |||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||
Senior notes (1) | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 750,000 | $ | 750,000 | |||||||||||||
Revolving line of credit | — | — | — | — | 95,000 | — | 95,000 | ||||||||||||||||||||
Interest due on debt obligations (2) | 35,000 | 35,000 | 35,000 | 35,000 | 35,000 | 63,000 | 238,000 | ||||||||||||||||||||
Finance lease obligations | 2,397 | 2,240 | 784 | — | — | — | 5,421 | ||||||||||||||||||||
Operating lease obligations | 26,047 | 21,925 | 17,109 | 14,384 | 9,004 | 17,131 | 105,600 | ||||||||||||||||||||
Unrecognized tax benefits (3) | — | — | — | — | — | — | 7,994 | ||||||||||||||||||||
Total commitments | $ | 63,444 | $ | 59,165 | $ | 52,893 | $ | 49,384 | $ | 139,004 | $ | 830,131 | $ | 1,202,015 |
(1) | Represents the unpaid principal amount of the Senior Notes. |
(2) | Represents interest payments on the Senior Notes. |
(3) | Represents unrecognized tax benefits related to uncertain tax positions. As we are not able to reasonably estimate the timing of the payments or the amount by which the liability will increase or decrease over time, the related balances have not been reflected in the section of the table showing payment by fiscal year. |
September 30, 2020 | September 30, 2019 | ||||||||||||||||||||
Cost Basis | Carrying Amount | Average Yield | Cost Basis | Carrying Amount | Average Yield | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Cash and cash equivalents | $ | 157,394 | $ | 157,394 | 0.05 | % | $ | 106,426 | $ | 106,426 | 0.76 | % |
September 30, 2020 | September 30, 2019 | ||||||||||||||
Face Value (*) | Fair Value | Face Value (*) | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
The 2010 Senior Notes | $ | — | $ | — | $ | 85,000 | $ | 86,121 | |||||||
The 2018 Senior Notes | 400,000 | 442,000 | 400,000 | 428,000 | |||||||||||
The 2019 Senior Notes | 350,000 | 358,750 | — | — | |||||||||||
Total | $ | 750,000 | $ | 800,750 | $ | 485,000 | $ | 514,121 |
September 30, 2020 | ||||||||||
Contract Amount | Fair Value | |||||||||
Foreign Currency | USD | USD | ||||||||
(In thousands) | ||||||||||
Sell foreign currency: | ||||||||||
Euro (EUR) | EUR | 15,000 | $ | 17,656 | — | |||||
Buy foreign currency: | ||||||||||
British pound (GBP) | GBP | 16,555 | $ | 21,300 | — | |||||
Singapore dollar (SGD) | SGD | 7,815 | $ | 5,700 | — |
September 30, 2019 | ||||||||||
Contract Amount | Fair Value | |||||||||
Foreign Currency | USD | USD | ||||||||
(In thousands) | ||||||||||
Sell foreign currency: | ||||||||||
Euro (EUR) | EUR | 10,800 | $ | 11,723 | — | |||||
Buy foreign currency: | ||||||||||
British pound (GBP) | GBP | 5,200 | $ | 6,400 | — | |||||
Singapore dollar (SGD) | SGD | 5,798 | $ | 4,200 | — |
• | We tested the effectiveness of controls over contract revenue, including management’s controls over the identification of performance obligations, estimation of variable consideration, and determination of the SSP. |
• | We selected a sample of contracts and performed the following procedures: |
/s/ Deloitte & Touche LLP |
San Diego, CA |
November 10, 2020 |
We have served as the Company’s auditor since 2004. |
September 30, | |||||||
2020 | 2019 | ||||||
(In thousands, except par value data) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, net | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Marketable securities | |||||||
Other investments | |||||||
Property and equipment, net | |||||||
Operating lease right-of-use assets | — | ||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Deferred income taxes | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | $ | |||||
Accrued compensation and employee benefits | |||||||
Other accrued liabilities | |||||||
Deferred revenue | |||||||
Current maturities on debt | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Operating lease liabilities | — | ||||||
Other liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies | |||||||
Stockholders’ equity: | |||||||
Preferred stock ($0.01 par value; 1,000 shares authorized; none issued and outstanding) | |||||||
Common stock ($0.01 par value; 200,000 shares authorized, 88,857 shares issued and 29,096 and 28,944 shares outstanding at September 30, 2020 and September 30, 2019, respectively) | |||||||
Paid-in-capital | |||||||
Treasury stock, at cost (59,761 and 59,913 shares at September 30, 2020 and September 30, 2019, respectively) | ( | ) | ( | ) | |||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Year Ended September 30, | |||||||||||
2020 | 2019 | 2018 | |||||||||
(In thousands, except per share data) | |||||||||||
Revenues: | |||||||||||
Transactional and maintenance | $ | $ | $ | ||||||||
Professional services | |||||||||||
License | |||||||||||
Total revenues | |||||||||||
Operating expenses: | |||||||||||
Cost of revenues | |||||||||||
Research and development | |||||||||||
Selling, general and administrative | |||||||||||
Amortization of intangible assets | |||||||||||
Restructuring and impairment charges | |||||||||||
Total operating expenses | |||||||||||
Operating income | |||||||||||
Interest expense, net | ( | ) | ( | ) | ( | ) | |||||
Other income, net | |||||||||||
Income before income taxes | |||||||||||
Provision for income taxes | |||||||||||
Net income | |||||||||||
Other comprehensive income (loss): | |||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | |||||||
Comprehensive income | $ | $ | $ | ||||||||
Basic earnings per share | $ | $ | $ | ||||||||
Shares used in computing basic earnings per share | |||||||||||
Diluted earnings per share | $ | $ | $ | ||||||||
Shares used in computing diluted earnings per share |
Common Stock | Accumulated Other Comprehensive Loss | Total Stockholders’ Equity | ||||||||||||||||||||||||
(In thousands) | Shares | Par Value | Paid-in- Capital | Treasury Stock | Retained Earnings | |||||||||||||||||||||
Balance at September 30, 2017 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||||||||
Issuance of treasury stock under employee stock plans | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | — | ( | ) | — | — | ( | ) | |||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Balance at September 30, 2018 | ( | ) | ( | ) | ||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||||||||
Issuance of treasury stock under employee stock plans | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | — | ( | ) | — | — | ( | ) | |||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||
Balance at September 30, 2019 | ( | ) | ( | ) | ||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | |||||||||||||||||||||
Issuance of treasury stock under employee stock plans | ( | ) | — | — | ( | ) | ||||||||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | — | ( | ) | — | — | ( | ) | |||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | |||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ |
Year Ended September 30, | |||||||||||
2020 | 2019 | 2018 | |||||||||
(In thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | $ | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Share-based compensation | |||||||||||
Deferred income taxes | ( | ) | |||||||||
Non-cash operating lease costs | — | — | |||||||||
Impairment loss on operating lease assets | — | — | |||||||||
Provision of doubtful accounts | |||||||||||
Net gain (loss) on marketable securities | ( | ) | ( | ) | |||||||
Gain on sale of equity investments | ( | ) | |||||||||
Net loss on sales and abandonment of property and equipment | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ) | ( | ) | ( | ) | |||||
Prepaid expenses and other assets | ( | ) | ( | ) | ( | ) | |||||
Accounts payable | |||||||||||
Accrued compensation and employee benefits | |||||||||||
Other liabilities | |||||||||||
Deferred revenue | ( | ) | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | ( | ) | ( | ) | ( | ) | |||||
Proceeds from sales of marketable securities | |||||||||||
Purchases of marketable securities | ( | ) | ( | ) | ( | ) | |||||
Proceeds from sale of equity investments | |||||||||||
Distribution from equity investments | |||||||||||
Cash paid for acquisitions, net of cash acquired | ( | ) | |||||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from revolving line of credit | |||||||||||
Payments on revolving line of credit | ( | ) | ( | ) | ( | ) | |||||
Proceeds from issuance of senior notes | |||||||||||
Payments on senior notes | ( | ) | ( | ) | ( | ) | |||||
Payments on debt issuance costs | ( | ) | ( | ) | |||||||
Payments on finance leases | ( | ) | ( | ) | |||||||
Proceeds from issuance of treasury stock under employee stock plans | |||||||||||
Taxes paid related to net share settlement of equity awards | ( | ) | ( | ) | ( | ) | |||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | |||||
Net cash used in financing activities | ( | ) | ( | ) | ( | ) | |||||
Effect of exchange rate changes on cash | ( | ) | ( | ) | |||||||
Increase (decrease) in cash and cash equivalents | ( | ) | |||||||||
Cash and cash equivalents, beginning of year | |||||||||||
Cash and cash equivalents, end of year | $ | $ | $ | ||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for income taxes, net of refunds of $1,931, $1,372 and $3,079 during the years ended September 30, 2020, 2019 and 2018, respectively | $ | $ | $ | ||||||||
Cash paid for interest | $ | $ | $ | ||||||||
Supplemental disclosures of non-cash investing and financing activities: | |||||||||||
Finance lease obligation incurred | $ | $ | $ | ||||||||
Purchase of property and equipment included in accounts payable | $ | $ | $ |
Estimated Useful Life | |||
Data processing equipment and software | to | ||
Office furniture and equipment | to | ||
Leasehold improvements | useful life or lease term | ||
Equipment under capital lease | useful life or lease term |
Estimated Useful Life | |||
Completed technology | to | ||
Customer contracts and relationships | to | ||
Trade names | to | ||
Non-compete agreements |
September 30, 2020 | September 30, 2019 | ||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
Cash and Cash Equivalents: | |||||||||||||||
Cash | $ | $ | $ | $ | |||||||||||
Money market funds | |||||||||||||||
Bank time deposits | |||||||||||||||
Total | $ | $ | $ | $ | |||||||||||
Long-term Marketable Securities: | |||||||||||||||
Marketable securities | $ | $ | $ | $ |
• | Level 1 — uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. Our Level 1 assets are comprised of money market funds and certain marketable securities. We did not have any liabilities that are valued using inputs identified under a Level 1 hierarchy as of September 30, 2020 and 2019. |
• | 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 that are valued using inputs identified under a Level 2 hierarchy as of September 30, 2020 and 2019. We measure the fair value of the Senior Notes based on Level 2 inputs, which include quoted market prices and interest rate spreads of similar securities. |
• | 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 September 30, 2020 and 2019. |
September 30, 2020 | Active Markets for Identical Instruments (Level 1) | Fair Value as of September 30, 2020 | |||||
(In thousands) | |||||||
Assets: | |||||||
Cash equivalents (1) | $ | $ | |||||
Marketable securities (2) | |||||||
Total | $ | $ |
September 30, 2019 | Active Markets for Identical Instruments (Level 1) | Fair Value as of September 30, 2019 | |||||
(In thousands) | |||||||
Assets: | |||||||
Cash equivalents (1) | $ | $ | |||||
Marketable securities (2) | |||||||
Total | $ | $ |
(1) | Included in cash and cash equivalents on our consolidated balance sheets at September 30, 2020 and 2019. Not included in this table are cash deposits of $ |
(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 long-term marketable securities on our consolidated balance sheets at September 30, 2020 and 2019. |
September 30, 2020 | ||||||||||
Contract Amount | Fair Value | |||||||||
Foreign Currency | USD | USD | ||||||||
(In thousands) | ||||||||||
Sell foreign currency: | ||||||||||
Euro (EUR) | EUR | $ | ||||||||
Buy foreign currency: | ||||||||||
British pound (GBP) | GBP | $ | ||||||||
Singapore dollar (SGD) | SGD | $ |
September 30, 2019 | ||||||||||
Contract Amount | Fair Value | |||||||||
Foreign Currency | USD | USD | ||||||||
(In thousands) | ||||||||||
Sell foreign currency: | ||||||||||
Euro (EUR) | EUR | $ | ||||||||
Buy foreign currency: | ||||||||||
British pound (GBP) | GBP | $ | ||||||||
Singapore dollar (SGD) | SGD | $ |
Year Ended September 30, | |||||||||||
2020 | 2019 | 2018 | |||||||||
(In thousands) | |||||||||||
Loss on foreign currency forward contracts | $ | $ | $ |
September 30, 2020 | September 30, 2019 | ||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Average Life | Gross Carrying Amount | Accumulated Amortization | Net | Average Life | ||||||||||||||||||||
(In thousands, except average life) | |||||||||||||||||||||||||||
Completed technology | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||||
Customer contracts and relationships | ( | ) | ( | ) | |||||||||||||||||||||||
Trade names | ( | ) | |||||||||||||||||||||||||
Non-compete agreements | ( | ) | ( | ) | |||||||||||||||||||||||
$ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
Year Ended September 30, | |||||||||||
2020 | 2019 | 2018 | |||||||||
(In thousands) | |||||||||||
Completed technology | $ | $ | $ | ||||||||
Customer contracts and relationships | |||||||||||
Trade names | |||||||||||
Non-compete agreements | |||||||||||
Total | $ | $ | $ |
Year Ending September 30, | |||
2021 | $ | ||
2022 | |||
2023 | |||
2024 | |||
2025 | |||
Thereafter | |||
Total | $ |
Applications | Scores | Decision Management Software | Total | ||||||||||||
(In thousands) | |||||||||||||||
Balance at September 30, 2018 | $ | $ | $ | $ | |||||||||||
Addition from acquisitions | |||||||||||||||
Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | |||||||||
Balance at September 30, 2019 | |||||||||||||||
Foreign currency translation adjustment | |||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ |
September 30, | |||||||
2020 | 2019 | ||||||
(In thousands) | |||||||
Property and equipment: | |||||||
Data processing equipment and software | $ | $ | |||||
Office furniture and equipment | |||||||
Leasehold improvements | |||||||
Equipment under capital lease | |||||||
Less: accumulated depreciation and amortization | ( | ) | ( | ) | |||
Total | $ | $ | |||||
Other assets: | |||||||
Long-term receivables | $ | $ | |||||
Prepaid commissions | |||||||
Others | |||||||
Total | $ | $ |
Series | Amount | Interest Rate | Maturity Date | |||
(In millions) | ||||||
E | $ | % | ||||
F | $ | % | ||||
G | $ | % | ||||
H | $ | % |
September 30, 2020 | September 30, 2019 | ||||||||||||||
Face Value (*) | Fair Value | Face Value (*) | Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
The 2010 Senior Notes | $ | $ | $ | $ | |||||||||||
The 2018 Senior Notes | |||||||||||||||
The 2019 Senior Notes | |||||||||||||||
Total | $ | $ | $ | $ |
Year Ending September 30, | |||
2021 | $ | ||
2022 | |||
2023 | |||
2024 | |||
2025 | |||
Thereafter | |||
Total | $ |
Accrual at September 30, 2018 | Expense Additions | Cash Payments | Accrual Adjustments | Accrual at September 30, 2019 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Facilities charges | $ | $ | $ | ( | ) | $ | $ | ||||||||||||
Less: current portion | ( | ) | ( | ) | |||||||||||||||
Non-current | $ | $ |
Accrual at September 30, 2019 | Expense Additions | Cash Payments | Accrual Adjustments (*) | Accrual at September 30, 2020 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Facilities charges | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Employee separation | ( | ) | |||||||||||||||||
$ | $ | ( | ) | $ | ( | ) | |||||||||||||
Less: current portion | ( | ) | ( | ) | |||||||||||||||
Non-current | $ | $ |
Year ended September 30, | |||||||||||
2020 | 2019 | 2018 | |||||||||
(In thousands) | |||||||||||
Current: | |||||||||||
Federal | $ | $ | $ | ||||||||
State | ( | ) | |||||||||
Foreign | |||||||||||
Deferred: | |||||||||||
Federal | ( | ) | |||||||||
State | ( | ) | |||||||||
Foreign | ( | ) | ( | ) | |||||||
( | ) | ||||||||||
Total provision | $ | $ | $ |
September 30, | |||||||
2020 | 2019 | ||||||
(In thousands) | |||||||
Deferred tax assets: | |||||||
Loss and credit carryforwards | $ | $ | |||||
Compensation benefits | |||||||
Operating lease liabilities | |||||||
Other assets | |||||||
Less: valuation allowance | ( | ) | ( | ) | |||
Total deferred tax assets | |||||||
Deferred tax liabilities: | |||||||
Intangible assets | ( | ) | ( | ) | |||
Deferred commission | ( | ) | ( | ) | |||
Property and equipment | ( | ) | ( | ) | |||
Operating lease right-of-use assets | ( | ) | |||||
Other liabilities | ( | ) | ( | ) | |||
Total deferred tax liabilities | ( | ) | ( | ) | |||
Deferred tax assets, net | $ | $ |
Year Ended September 30, | |||||||||||
2020 | 2019 | 2018 | |||||||||
(In thousands) | |||||||||||
Income tax provision at U.S. federal statutory rate | $ | $ | $ | ||||||||
State income taxes, net of U.S. federal benefit | |||||||||||
Foreign tax rate differential | ( | ) | |||||||||
Research credits | ( | ) | ( | ) | ( | ) | |||||
Domestic production deduction | ( | ) | |||||||||
Amended returns/audit settlements/statute expirations | ( | ) | ( | ) | ( | ) | |||||
Foreign | |||||||||||
Valuation allowance | ( | ) | |||||||||
Foreign tax credit and foreign withholding tax | ( | ) | |||||||||
Excess tax benefits relating to stock-based compensation | ( | ) | ( | ) | ( | ) | |||||
Tax effect of the Tax Act | |||||||||||
GILTI, FDII and BEAT | |||||||||||
Other | ( | ) | ( | ) | ( | ) | |||||
Recorded income tax provision | $ | $ | $ |
Year Ended September 30, | |||||||||||
2020 | 2019 | 2018 | |||||||||
(In thousands) | |||||||||||
Gross unrecognized tax benefits at beginning of year | $ | $ | $ | ||||||||
Gross increases for tax positions in prior years | |||||||||||
Gross decreases for tax positions in prior years | ( | ) | ( | ) | |||||||
Gross increases based on tax positions related to the current year | |||||||||||
Decreases for settlements and payments | ( | ) | |||||||||
Decreases due to statute expiration | ( | ) | ( | ) | ( | ) | |||||
Gross unrecognized tax benefits at end of year | $ | $ | $ |
Year Ended September 30, | |||||||||||||||
2020 | 2019 | 2018 | |||||||||||||
Stock Options: | |||||||||||||||
Weighted-average expected term (years) | |||||||||||||||
Expected volatility (range) | - | % | - | % | % | - | % | ||||||||
Weighted-average volatility | % | % | % | ||||||||||||
Risk-free interest rate (range) | - | % | - | % | % | - | % | ||||||||
Weighted-average expected dividend yield | % | % | % |
Shares | Weighted- average Exercise Price | Weighted- average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||
(In thousands) | (In years) | (In thousands) | ||||||||||
Outstanding at September 30, 2019 | $ | |||||||||||
Granted | ||||||||||||
Exercised | ( | ) | ||||||||||
Forfeited | ( | ) | ||||||||||
Outstanding at September 30, 2020 | $ | $ | ||||||||||
Exercisable at September 30, 2020 | $ | $ | ||||||||||
Vested and expected to vest at September 30, 2020 | $ | $ |
Shares | Weighted-average Grant-date Fair Value | |||||
(In thousands) | ||||||
Outstanding at September 30, 2019 | $ | |||||
Granted | ||||||
Released | ( | ) | ||||
Forfeited | ( | ) | ||||
Outstanding at September 30, 2020 | $ |
Shares | Weighted- average Grant-date Fair Value | |||||
(In thousands) | ||||||
Outstanding at September 30, 2019 | $ | |||||
Granted | ||||||
Released | ( | ) | ||||
Forfeited | ( | ) | ||||
Outstanding at September 30, 2020 | $ |
Year Ended September 30, | ||||||||
2020 | 2019 | 2018 | ||||||
Expected volatility in FICO’s stock price | % | % | % | |||||
Expected volatility in Russell 3000 Index | % | % | % | |||||
Correlation between FICO and the Russell 3000 Index | % | % | % | |||||
Risk-free interest rate | % | % | % | |||||
Average expected dividend yield | % | % | % |
Shares | Weighted- average Grant-date Fair Value | |||||
(In thousands) | ||||||
Outstanding at September 30, 2019 | $ | |||||
Granted | ||||||
Released | ( | ) | ||||
Forfeited | ( | ) | ||||
Outstanding at September 30, 2020 | $ |
Year Ended September 30, | |||||||||||
2020 | 2019 | 2018 | |||||||||
(In thousands, except per share data) | |||||||||||
Numerator for basic and diluted earnings per share — net income | $ | $ | $ | ||||||||
Denominator — share: | |||||||||||
Basic weighted-average shares | |||||||||||
Effect of dilutive securities | |||||||||||
Diluted weighted-average shares | |||||||||||
Earnings per share: | |||||||||||
Basic | $ | $ | $ | ||||||||
Diluted | $ | $ | $ |
• | Applications. This segment includes pre-configured decision management applications designed for a specific type of business problem or process — such as marketing, account origination, customer management, fraud, financial crimes compliance, collections and insurance claims management — as well as associated professional services. These applications are available to our customers as on-premises software, and many are available as hosted, SaaS applications through the FICO® Analytic Cloud or AWS. |
• | Scores. This segment includes our business-to-business scoring solutions and services, our business-to-consumer scoring solutions and services including 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 worldwide, as well as services through which we provide our scores to clients directly. |
• | Decision Management Software. This segment is composed of analytic and decision management software tools that clients can use to create their own custom decision management applications, our FICO® Decision Management Suite, as well as associated professional services. Decision management software is currently delivered as part of the FICO® Decision Management Platform and is increasingly being adopted to connect decisioning solutions or previously disconnected use cases. These tools are available to our customers as on-premises software, through the FICO® Analytic Cloud or AWS. |
Year Ended September 30, 2020 | |||||||||||||||||||
Applications | Scores | Decision Management Software | Unallocated Corporate Expenses | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Segment revenues: | |||||||||||||||||||
Transactional and maintenance | $ | $ | $ | $ | — | $ | |||||||||||||
Professional services | — | ||||||||||||||||||
License | — | ||||||||||||||||||
Total segment revenues | — | ||||||||||||||||||
Segment operating expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Segment operating income (loss) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||
Unallocated share-based compensation expense | ( | ) | |||||||||||||||||
Unallocated amortization expense | ( | ) | |||||||||||||||||
Unallocated restructuring and impairment charges | ( | ) | |||||||||||||||||
Operating income | |||||||||||||||||||
Unallocated interest expense, net | ( | ) | |||||||||||||||||
Unallocated other income, net | |||||||||||||||||||
Income before income taxes | $ | ||||||||||||||||||
Depreciation expense | $ | $ | $ | $ | $ |
Year Ended September 30, 2019 | |||||||||||||||||||
Applications | Scores | Decision Management Software | Unallocated Corporate Expenses | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Segment revenues: | |||||||||||||||||||
Transactional and maintenance | $ | $ | $ | $ | — | $ | |||||||||||||
Professional services | — | ||||||||||||||||||
License | — | ||||||||||||||||||
Total segment revenues | — | ||||||||||||||||||
Segment operating expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Segment operating income (loss) | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||
Unallocated share-based compensation expense | ( | ) | |||||||||||||||||
Unallocated amortization expense | ( | ) | |||||||||||||||||
Operating income | |||||||||||||||||||
Unallocated interest expense, net | ( | ) | |||||||||||||||||
Unallocated other income, net | |||||||||||||||||||
Income before income taxes | $ | ||||||||||||||||||
Depreciation expense | $ | $ | $ | $ | $ |
Year Ended September 30, 2018 | |||||||||||||||||||
Applications | Scores | Decision Management Software | Unallocated Corporate Expenses | Total | |||||||||||||||
(In thousands) | |||||||||||||||||||
Segment revenues: | |||||||||||||||||||
Transactional and maintenance | $ | $ | $ | $ | — | $ | |||||||||||||
Professional services | — | ||||||||||||||||||
License | — | ||||||||||||||||||
Total segment revenues | — | ||||||||||||||||||
Segment operating expense | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Segment operating income (loss) | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||
Unallocated share-based compensation expense | ( | ) | |||||||||||||||||
Unallocated amortization expense | ( | ) | |||||||||||||||||
Operating income | |||||||||||||||||||
Unallocated interest expense, net | ( | ) | |||||||||||||||||
Unallocated other income, net | |||||||||||||||||||
Income before income taxes | $ | ||||||||||||||||||
Depreciation expense | $ | $ | $ | $ | $ |
Year Ended September 30, 2020 | ||||||||||||||||||
Reportable Segments | On-Premises | SaaS | Scores | Total | Percentage | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Applications | $ | $ | $ | $ | % | |||||||||||||
Scores | % | |||||||||||||||||
Decision Management Software | % | |||||||||||||||||
Total | $ | $ | $ | $ | % |
Year Ended September 30, 2019 | ||||||||||||||||||
Reportable Segments | On-Premises | SaaS | Scores | Total | Percentage | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Applications | $ | $ | $ | $ | % | |||||||||||||
Scores | % | |||||||||||||||||
Decision Management Software | % | |||||||||||||||||
Total | $ | $ | $ | $ | % |
Year Ended September 30, 2018 | ||||||||||||||||||
Reportable Segments | On-Premises | SaaS | Scores | Total | Percentage | |||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Applications | $ | $ | $ | $ | % | |||||||||||||
Scores | % | |||||||||||||||||
Decision Management Software | % | |||||||||||||||||
Total | $ | $ | $ | $ | % |
Year Ended September 30, 2020 | |||||||||||||||||||
Reportable Segments | North America | Latin America | Europe, Middle East and Africa | Asia Pacific | Total | ||||||||||||||
(In thousands) | |||||||||||||||||||
Applications | $ | $ | $ | $ | $ | ||||||||||||||
Scores | |||||||||||||||||||
Decision Management Software | |||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Year Ended September 30, 2019 | |||||||||||||||||||
Reportable Segments | North America | Latin America | Europe, Middle East and Africa | Asia Pacific | Total | ||||||||||||||
(In thousands) | |||||||||||||||||||
Applications | $ | $ | $ | $ | $ | ||||||||||||||
Scores | |||||||||||||||||||
Decision Management Software | |||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Year Ended September 30, 2018 | |||||||||||||||||||
Reportable Segments | North America | Latin America | Europe, Middle East and Africa | Asia Pacific | Total | ||||||||||||||
(In thousands) | |||||||||||||||||||
Applications | $ | $ | $ | $ | $ | ||||||||||||||
Scores | |||||||||||||||||||
Decision Management Software | |||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Year Ended September 30, | ||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Experian | $ | % | $ | % | $ | % | ||||||||||||||
TransUnion and Equifax | % | % | % | |||||||||||||||||
Other customers | % | % | % | |||||||||||||||||
Total | $ | % | $ | % | $ | % |
September 30, | |||||||||||||
2020 | 2019 | ||||||||||||
(Dollars in thousands) | |||||||||||||
United States | $ | % | $ | % | |||||||||
United Kingdom | % | % | |||||||||||
Other countries | % | % | |||||||||||
Total | $ | % | $ | % |
September 30, | |||||||
2020 | 2019 | ||||||
(In thousands) | |||||||
Billed | $ | $ | |||||
Unbilled | |||||||
Less: allowance for doubtful accounts | ( | ) | ( | ) | |||
Net receivables | |||||||
Less: long-term receivables * | ( | ) | ( | ) | |||
Short-term receivables * |
Year Ended September 30, | |||||||
2020 | 2019 | ||||||
(In thousands) | |||||||
Allowance for doubtful accounts, beginning balance | $ | $ | |||||
Add: expense | |||||||
Less: write-offs (net of recoveries) | ( | ) | ( | ) | |||
Allowance for doubtful accounts, ending balance | $ | $ |
Year Ended September 30, | |||||||
2020 | 2019 | ||||||
(In thousands) | |||||||
Deferred revenues, beginning balance | $ | $ | |||||
Revenue recognized that was included in the deferred revenues balance at the beginning of the period | ( | ) | ( | ) | |||
Increases due to billings, excluding amounts recognized as revenue during the period | |||||||
Deferred revenues, ending balance (*) | $ | $ |
• | Revenue that will be recognized in future periods from usage-based royalty from license sales; |
• | SaaS transactional revenue from variable considerations 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. |
Balance Sheet Location | September 30, 2020 | ||||
(In thousands) | |||||
Assets | |||||
Operating leases | Operating lease right-of-use assets | $ | |||
Finance leases (*) | Property and equipment, net | ||||
Total lease assets | $ | ||||
Liabilities | |||||
Current: | |||||
Operating leases | Other accrued liabilities | $ | |||
Finance leases | Other accrued liabilities | ||||
Non-current: | |||||
Operating leases | Operating lease liabilities | ||||
Finance leases | Other liabilities | ||||
Total lease liabilities | $ |
Year Ended September 30, 2020 | |||
(In thousands) | |||
Operating lease cost | $ | ||
Finance lease cost: | |||
Depreciation of lease assets | |||
Interest on lease liabilities | |||
Short-term lease cost | |||
Variable lease cost | |||
Total lease cost | $ |
September 30, 2020 | |||||
Operating Leases | Finance Leases | ||||
Weighted-average remaining lease term (in months) | |||||
Weighted-average discount rate | % | % |
Year Ended September 30, 2020 | |||
(In thousands) | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash outflow for operating leases | $ | ||
Operating cash outflow for finance leases | |||
Financing cash outflow for finance leases | |||
Lease assets obtained in exchange for new lease liabilities: | |||
Operating leases | |||
Finance leases |
(In thousands) | Operating Leases | Finance Leases | |||||
Fiscal 2021 | $ | $ | |||||
Fiscal 2022 | |||||||
Fiscal 2023 | |||||||
Fiscal 2024 | |||||||
Fiscal 2025 | |||||||
Thereafter | |||||||
Total future undiscounted lease payments | |||||||
Less imputed interest | ( | ) | ( | ) | |||
Total reported lease liability | $ | $ |
(In thousands) | Operating Leases | Capital Leases | |||||
Fiscal 2020 | $ | $ | |||||
Fiscal 2021 | |||||||
Fiscal 2022 | |||||||
Fiscal 2023 | |||||||
Fiscal 2024 | |||||||
Thereafter | |||||||
Total minimum lease payments | $ | ||||||
Less amount representing interest | ( | ) | |||||
Present value of minimum lease payments | $ |
Quarter Ended | |||||||||||||||
September 30, 2020 | June 30, 2020 | March 31, 2020 | December 31, 2019 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||
Cost of revenues (1) | |||||||||||||||
Gross profit | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Earnings per share (2): | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ | |||||||||||
Shares used in computing earnings per share: | |||||||||||||||
Basic | |||||||||||||||
Diluted |
Quarter Ended | |||||||||||||||
September 30, 2019 | June 30, 2019 | March 31, 2019 | December 31, 2018 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||
Cost of revenues (1) | |||||||||||||||
Gross profit | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Earnings per share (2): | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ | |||||||||||
Shares used in computing earnings per share: | |||||||||||||||
Basic | |||||||||||||||
Diluted |
(1) | Cost of revenues excludes amortization expense of $ |
(2) | Earnings per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly per share amounts may not equal the totals for the respective years. |
Name | Positions Held | Age |
William J. Lansing | January 2012-present, Chief Executive Officer and member of the Board of Directors of the Company. February 2009-November 2010, Chief Executive Offer and President, Infospace, Inc. 2004-2007, Chief Executive Officer and President, ValueVision Media, Inc. 2001-2003, General Partner, General Atlantic LLC. 2000-2001, Chief Executive Officer, NBC Internet, Inc. 1998-2000, President/Chief Executive Officer, Fingerhut Companies, Inc. 1996-1998, Vice President, Corporate Business Development, General Electric Company. 1996, Executive Vice President, Chief Operating Office, Prodigy, Inc. 1986-1995, various positions, McKinsey & Company, Inc. | 62 |
Michael I. McLaughlin | August 2019-present, Executive Vice President, Chief Financial Officer of the Company. May 2007-August 2019, Managing Director, Head of Technology Corporate Finance of Morgan Stanley. January 2004-May 2007, Managing Director, Head of Enterprise Systems and Supply Chain Coverage of BofA Securities. January 2001-January 2004, Executive Director, Head of Enterprise Hardware and Supply Chain of UBS Investment Bank. 1997-2001, founder and co-Chief Executive Officer of Stampede Ventures, LLC. 1993-1997, Vice President of Montgomery Securities. 1990-1993, Associate of The First Boston Corporation. 1986-1988, Analyst of The First Boston Corporation. | 56 |
Thomas A. Bowers | August 2020-present, Executive Vice President, Corporate Strategy of the Company. September 2019-August 2020, Vice President, Business Consulting of the Company. April 2018-September 2019, Founder and Managing Partner, M Cubed Development, LLC. August 2012-March 2018, Executive Vice President, American Savings Bank. 1987-2012, Senior partner and various positions, McKinsey & Company, Inc. | 65 |
Stephanie Covert | October 2020-present, Executive Vice President, Sales & Marketing of the Company. June 2016-October 2020, Vice President, Global Sales Operations of the Company. December 2015-May 2016, Vice President, Solution Success of the Company. June 2015-December 2015, Senior Director, Solution Success, Americas & EMEA of the Company. May 2014-June 2015, Senior Director, Solution Success, Americas of the Company. March 2013-May 2014, Senior Director, Sales Operations, Apttus. March 2012-March 2013, Sales Operations Director, Oracle Corporation. June 2007-March 2012, various positions, RightNow Technologies, Inc. | 41 |
Richard S. Deal | November 2015-present, Executive Vice President, Chief Human Resources Officer of the Company. August 2007-November 2015, Senior Vice President, Chief Human Resources Officer of the Company. January 2001-August 2007, Vice President, Human Resources of the Company. 1998-2001, Vice President, Human Resources, Arcadia Financial, Ltd. 1993-1998, managed broad range of human resources corporate and line consulting functions with U.S. Bancorp. | 53 |
Michael S. Leonard | November 2011-present, Vice President, Chief Accounting Officer of the Company. November 2007-November 2011, Senior Director, Finance of the Company. July 2000-November 2007, Director, Finance of the Company. 1998-2000, Controller of Natural Alternatives International, Inc. 1994-1998, various audit staff positions at KPMG LLP. | 56 |
Claus Moldt | August 2019-present, Executive Vice President, Chief Technology Officer of the Company. March 2016-August 2019, Chief Information Officer of the Company. June 2013-March 2016, Chief Executive Officer of mPath. October 2006-June 2013, Global Chief Information Officer and Senior Vice President of Technical Operations of Salesforce.com. November 2002-September 2006, Senior Director Operations Infrastructure and Project Delivery of eBay. May 2001-May 2002, Manager Database and System Administration, LoudCloud/Opsware. | 57 |
Mark R. Scadina | February 2009-present, Executive Vice President and General Counsel and Corporate Secretary of the Company. June 2007-February 2009, Senior Vice President and General Counsel and Corporate Secretary of the Company. 2003-2007, various senior positions including Executive Vice President, General Counsel and Corporate Secretary, Liberate Technologies, Inc. 1999-2003, various leadership positions including Vice President and General Counsel, Intertrust Technologies Corporation. 1994-1999, Associate, Pennie and Edmonds LLP. | 51 |
James M. Wehmann | April 2012-present, Executive Vice President, Scores of the Company. November 2003-March 2012, Vice President/Senior Vice President, Global Marketing, Digital River, Inc. March 2002-June 2003, Vice President, Marketing, Brylane, Inc. September 2000-March 2002, Senior Vice President, Marketing, New Customer Acquisition, Bank One. 1993-2000, various roles, including Senior Vice President, Marketing, Fingerhut Companies, Inc. | 55 |
Reference Page Form 10-K | |
Exhibit Number | Description |
3.1 | |
3.2 | |
4.1 | |
10.1 | |
10.2 | |
10.3 | |
10.4 | |
10.5 | |
10.6 | |
10.7 | |
10.8 | |
10.9 | |
10.10 | |
10.11 | |
10.12 | |
10.13 | |
10.14 | |
10.15 | |
10.16 | |
10.17 | |
10.18 | |
10.19 | |
10.20 | |
10.21 | |
10.22 | |
10.23 | |
10.24 | |
10.25 | |
10.26 | |
10.27 | |
10.28 | |
10.29 | |
10.30 | |
10.31 | |
10.32 | |
10.33 | |
10.34 | |
10.35 | |
10.36 | |
10.37 | |
10.38 | |
10.39 | |
10.40 | |
10.41 | |
10.42 | |
10.43 | |
10.44 | |
10.45 | |
10.46 | |
10.47 | |
10.48 | |
10.49 | |
10.50 | |
10.51 | |
10.52 | |
10.53 | |
10.54 | |
10.55 | |
10.56 | |
10.57 | |
10.58* | |
10.59* | |
21.1* | |
23.1* | |
31.1* | |
31.2* | |
32.1* | |
32.2* | |
101.INS* | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
(1) | Management contract or compensatory plan or arrangement. |
* | Filed herewith. |
FAIR ISAAC CORPORATION | ||
By | /s/ MICHAEL I. MCLAUGHLIN | |
Michael I. McLaughlin | ||
Executive Vice President and Chief Financial Officer |
/s/ WILLIAM J. LANSING | Chief Executive Officer (Principal Executive Officer) and Director | November 10, 2020 |
William J. Lansing | ||
/s/ MICHAEL I. MCLAUGHLIN | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | November 10, 2020 |
Michael I. McLaughlin | ||
/s/ MICHAEL S. LEONARD | Vice President and Chief Accounting Officer (Principal Accounting Officer) | November 10, 2020 |
Michael S. Leonard | ||
/s/ A. GEORGE BATTLE | Director | November 10, 2020 |
A. George Battle | ||
/s/ BRADEN R. KELLY | Director | November 10, 2020 |
Braden R. Kelly | ||
/s/ JAMES D. KIRSNER | Director | November 10, 2020 |
James D. Kirsner | ||
/s/ EVA MANOLIS | Director | November 10, 2020 |
Eva Manolis | ||
/s/ MARC F. MCMORRIS | Director | November 10, 2020 |
Marc F. McMorris | ||
/s/ JOANNA REES | Director | November 10, 2020 |
Joanna Rees | ||
/s/ DAVID A. REY | Director | November 10, 2020 |
David A. Rey | ||
/s/ FABIOLA R. ARREDONDO | Director | November 10, 2020 |
Fabiola R. Arredondo |
Title: | Beginning October 1, 2020, you will serve as the Company’s Executive Vice President, Sales & Marketing. |
Term: | The term of your employment as the Company’s Executive Vice President, Sales & Marketing, under the terms and conditions of this Agreement shall be for a period commencing on October 1, 2020 and ending on December 31, 2021 (the “Initial Term”), unless earlier terminated by either party as provided in this Agreement. Following the Initial Term, your employment with the Company under the terms and conditions of this Agreement shall automatically be renewed for successive one year periods (each a “Renewal Term”) on January 1 of each year, unless the Company elects not to extend the Term providing you with written notice at least one hundred and eighty (180) days’ prior to the end of the Initial Term or any Renewal Term thereof. The period of your employment with the Company under the terms and conditions of this Agreement (including during the Initial Term and any Renewal Term) is referred to as the “Term.” |
Responsibilities: | During your employment hereunder with the Company as Executive Vice President, Sales & Marketing, you will report to the Company’s Chief Executive Officer and will be responsible for leading the global marketing and sales of FICO products and associated services in order to achieve targeted revenue and margin growth, and other functions to which you may be assigned from time to time by the Chief Executive Officer or his or her designee. You agree to serve the Company faithfully and to the best of your ability, and to devote your full working time, attention and efforts to the business of the Company. You may participate in charitable activities and personal investment activities to a reasonable extent, and you may serve as a director of business and civic organizations (and retain compensation from same) as approved by the Company’s Board of Directors (the “Board”), so long as such activities and directorships do not interfere with the performance of your duties and responsibilities to the Company. |
Representation: | By accepting your continued employment with the Company under this Agreement and signing below, you represent and confirm that you are under no contractual or legal commitments that would prevent you from fulfilling your duties and responsibilities to the Company as Executive Vice President, Sales & Marketing. |
Initial Base Salary: | During the Term, you will be paid a base salary at the rate of $400,000 per year for services performed, in accordance with the regular payroll practices of the Company with annual review by the Board’s Leadership Development and Compensation Committee (the “Committee”). Your performance and base salary will be reviewed by the Committee annually during the first quarter of each fiscal year and may be adjusted upward from time to time at the discretion of the Committee, but will not be reduced without your consent during the Term. After any such increase, the reference to base salary in this Agreement shall mean such increased amount. |
Incentive Bonus: | You will participate in the Company’s Management Incentive Plan, as may be amended by the Committee from time to time (the “MIP”). Under the MIP, for each full fiscal year of the Company that you are employed during the Term, you will be eligible for an annual incentive award opportunity payable from 0% to 100%, with a target award equal to 50%, of your annual base salary at the rate in effect at the end of such fiscal year, pursuant to the terms and conditions established by the Committee from time to time; provided, however, that for the Company’s fiscal year 2020 your MIP award will be based on your prior annual base salary of $300,000 per year. Objectives will be established during the first quarter of the fiscal year. Any annual incentive bonus earned for a fiscal year will be paid to you by December 31 of the calendar year in which such fiscal year ends. |
Annual Equity: | For each fiscal year of the Company that you are employed during the Term, you will be eligible for an annual equity grant based on achievement of objectives established by the Committee, and on such other terms established by the Committee in its sole discretion. In accordance with the policies and practices of the Company, some or all of such annual equity grant may be in the form of restricted stock units, performance share units, market share units, stock options or other equity that is an economic equivalent to an option award. Such equivalency will be determined by the Company in its sole discretion. |
Initial Equity: | The Company shall grant to you, effective as of August 25, 2020 (the “Date of Grant”), initial equity with a Date of Grant value of $2,000,000. This equity will be in the form of Restricted Stock Units (“RSUs”), subject to the terms of the Company’s 2012 Long-Term Incentive Plan (the “Plan”). These RSUs will be subject to four-year ratable vesting. |
Benefits: | While employed by the Company during the Term, you (and your eligible dependents) will be eligible to participate in the employee benefit plans and programs generally available to other executive officers of the Company, and in such other employee benefit plans and programs to the extent that you meet the eligibility requirements for each individual plan or program and subject to the provisions, rules |
Business Expenses: | In performing your responsibilities as Executive Vice President, Sales & Marketing, you will be required to travel extensively, both within the United States and internationally. The Company will reimburse you promptly for all travel and other business expenses incurred by you in connection with the performance of your duties for the Company, subject to the Company’s normal business expense and travel policies and procedures. |
Vacation: | During your employment with the Company, you will receive vacation time off in accordance with the policies and practices of the Company. Vacation time shall be taken at such times so as not to unduly disrupt the operations of the Company. |
Office Location: | Your employment will be based at the Company’s offices located in Bozeman, Montana. |
Inventions Agreement: | You acknowledge and agree that you continue to be bound by the terms and conditions of the Proprietary Information and Inventions Agreement (“PIIA”) which you signed when you first joined the Company, the terms of which are incorporated herein by reference. |
Agreement | You acknowledge and agree that you continue to be bound by the terms and conditions of the Post-Employment Restrictions Agreement (“PERA”) which you signed when you first joined the Company, the terms of which are incorporated herein by reference. |
Change in Control: | You and the Company will enter into the enclosed Management Agreement (the “Management Agreement”), to be separately signed by you, the terms of which are incorporated herein by reference (except that terms defined in the Management Agreement apply only to the use of such terms in the Management Agreement, and terms defined in this Agreement apply only to the use of such terms in this Agreement). |
Termination: | Either you or the Company may terminate the employment relationship during the Term or after the Term at any time and for any reason. Upon termination of your employment by either party for any reason, you will promptly resign any and all positions you then hold as officer or director of the Company or any of its affiliates. |
Severance: | In case of involuntary termination of your employment by the Company without Cause prior to the end of the Initial Term or prior to the end of any Renewal Term then in effect or in the case of voluntary resignation of your employment for Good Reason prior to the end of the Initial Term or prior to the end of any Renewal Term then in effect (each a “Qualifying Termination”), the Company will pay you as severance pay an amount equal to one (1) times the sum of (a) your annual base salary at the rate in effect on your last day of employment plus (b) the annual |
Indemnification: | The Company will indemnify you in connection with your duties and responsibilities for the Company, as set out in the enclosed Indemnification Agreement (the “Indemnification Agreement”), to be separately signed by you. |
Prior Employment: | The Company understands that you may have other contractual obligations to former employers, but you have represented that no such obligations prevent you from fulfilling your duties and responsibilities to the Company as Executive Vice President, Sales & Marketing. |
Taxes: | The Company may withhold from any compensation payable to you in connection with your employment such federal, state and local income and employment taxes as the Company shall reasonably determine are required to be withheld pursuant to any applicable law or regulation. You acknowledge and agree that the Company has made no assurances or representations to you regarding the tax treatment of any consideration provided for in this Agreement and that the Company has advised you to obtain your own personal tax advice. Except for any tax amounts withheld by the Company from the payments or other consideration hereunder and any employment taxes required to be paid by the Company or any tax liabilities for you that are the direct result of the Company failing to make payments or to provide other consideration hereunder in accordance with the terms of this Agreement, you shall be responsible for payment of any and all taxes owed in connection with the consideration provided for in this Agreement. |
No Offset: | In the event of any termination of your employment, you shall be under no obligation to seek other employment or otherwise mitigate damages. There shall be no offset against, or any recoupment of, any amounts, benefits or entitlements due to you hereunder on account of any remuneration or other benefit earned or received by you from subsequent employment. |
Binding Nature: | As of the date first written above, this Agreement is intended to bind and inure to the benefit of and be enforceable by you and the Company and their respective successors, assigns, heirs, executors and administrators, except you may not assign your rights or obligations hereunder without the prior written consent of the Company (provided that if you should die while any payment, benefit or entitlement is due to you hereunder, such payment, benefit or entitlement shall be paid to your designated beneficiary, or, if there is no designated beneficiary, to your estate). In addition, no rights or obligations of the Company under this Agreement may be assigned or transferred by the Company without your prior written consent, except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or a sale, liquidation or other disposition of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or as a matter of law. |
Applicable Law: | This Agreement shall be interpreted and construed in accordance with the laws of the State of Delaware. |
Section 409A: | The parties hereto intend that all payments and benefits to be made or provided to you will be paid or provided in compliance with all applicable requirements of Section 409A (as defined above), and the provisions of this Agreement shall be construed and administered in accordance with and to implement such intent. In furtherance of the foregoing, the provisions set forth below shall apply notwithstanding any other provision in this Agreement. |
Section 280G: | Section 3 of the Management Agreement is incorporated in full into this Agreement and shall apply to any payment, benefit or entitlement paid or provided to you (or to be paid or so provided) hereunder or otherwise as if such payment, benefit or entitlement had been paid under the Management Agreement. |
Notices: | Any notice, request or other communication required under this Agreement shall be in writing and shall be deemed to have been given (i) when delivered personally, or (ii) two days after having been sent by a recognized courier, provided written acknowledgement of receipt is obtained. Any such notices, requests or other communications shall be given to the Company, at Fair Isaac Corporation, Attn: General Counsel, 181 Metro Drive, Suite 700, San Jose, California, 95110, and to you at your home address in the Company’s files (or to any other address the party provides in accordance with this notice provision). |
Entire Agreement: | This Agreement, the Indemnification Agreement and the Management Agreement constitute the entire agreement between the parties with respect to the subject matter hereto, and supersede all prior discussions, agreements and negotiations between you and the Company with respect to the subject matter hereof; provided, however, the PIIA and PERA remain in full force and effect in accordance with their terms, and the terms of the PIIA and PERA are incorporated herein by reference. No amendment or modification of this Agreement will be effective unless made in writing and signed by you and an authorized officer or director of the Company. Any waiver of this Agreement will only be effective if signed by the party against whom the waiver is being enforced (which in the case of the Company shall be an authorized officer or director). No waiver by any party of any breach of any condition or provision of this Agreement shall be deemed a waiver of any similar or dissimilar condition or provision at the same or any prior or subsequent time. |
• | Form of Release attached hereto as Exhibit A |
/s/ Stephanie Covert | August 26, 2020 |
Stephanie Covert | Dated |
Dated: | |
Stephanie Covert |
Title: | Beginning August 26, 2020, you will serve as the Company’s Executive Vice President, Corporate Strategy. |
Term: | The term of your employment as the Company’s Executive Vice President, Corporate Strategy, under the terms and conditions of this Agreement shall be for a period commencing on August 26, 2020 and ending on December 31, 2021 (the “Initial Term”), unless earlier terminated by either party as provided in this Agreement. Following the Initial Term, your employment with the Company under the terms and conditions of this Agreement shall automatically be renewed for successive one year periods (each a “Renewal Term”) on January 1 of each year, unless the Company elects not to extend the Term providing you with written notice at least one hundred and eighty (180) days’ prior to the end of the Initial Term or any Renewal Term thereof. The period of your employment with the Company under the terms and conditions of this Agreement (including during the Initial Term and any Renewal Term) is referred to as the “Term.” |
Responsibilities: | During your employment hereunder with the Company as Executive Vice President, Corporate Strategy, you will report to the Company’s Chief Executive Officer and will be responsible for leading the evaluation of and influencing decision making concerning the company’s global business strategy including target markets, product offerings, packaging/pricing and investment priorities designed to drive profitable growth, and other functions to which you may be assigned from time to time by the Chief Executive Officer or his or her designee. You agree to serve the Company faithfully and to the best of your ability, and to devote your full working time, attention and efforts to the business of the Company. You may participate in charitable activities and personal investment activities to a reasonable extent, and you may serve as a director of business and civic organizations (and retain compensation from same) as approved by the Company’s Board of Directors (the “Board”), so long as such activities and directorships do not interfere with the performance of your duties and responsibilities to the Company. |
Representation: | By accepting your continued employment with the Company under this Agreement and signing below, you represent and confirm that you are under no contractual or legal commitments that would prevent you from fulfilling your duties and responsibilities to the Company as Executive Vice President, Corporate Strategy. |
Initial Base Salary: | During the Term, you will be paid a base salary at the rate of $400,000 per year for services performed, in accordance with the regular payroll practices of the Company with annual review by the Board’s Leadership Development and Compensation Committee (the “Committee”). Your performance and base salary will be reviewed by the Committee annually during the first quarter of each fiscal year and may be adjusted upward from time to time at the discretion of the Committee, but will not be reduced without your consent during the Term. After any such increase, the reference to base salary in this Agreement shall mean such increased amount. |
Incentive Bonus: | You will participate in the Company’s Management Incentive Plan, as may be amended by the Committee from time to time (the “MIP”). Under the MIP, for each full fiscal year of the Company that you are employed during the Term, you will be eligible for an annual incentive award opportunity payable from 0% to 100%, with a target award equal to 50%, of your annual base salary at the rate in effect at the end of such fiscal year, pursuant to the terms and conditions established by the Committee from time to time. Objectives will be established during the first quarter of the fiscal year. Any annual incentive bonus earned for a fiscal year will be paid to you by December 31 of the calendar year in which such fiscal year ends. |
Annual Equity: | For each fiscal year of the Company that you are employed during the Term, you will be eligible for an annual equity grant based on achievement of objectives established by the Committee, and on such other terms established by the Committee in its sole discretion. In accordance with the policies and practices of the Company, some or all of such annual equity grant may be in the form of restricted stock units, performance share units, market share units, stock options or other equity that is an economic equivalent to an option award. Such equivalency will be determined by the Company in its sole discretion. |
Benefits: | While employed by the Company during the Term, you (and your eligible dependents) will be eligible to participate in the employee benefit plans and programs generally available to other executive officers of the Company, and in such other employee benefit plans and programs to the extent that you meet the eligibility requirements for each individual plan or program and subject to the provisions, rules and regulations applicable to each such plan or program as in effect from time to time. The plans and programs of the Company may be modified or terminated by the Company in its discretion. |
Business Expenses: | In performing your responsibilities as Executive Vice President, Corporate Strategy, you will be required to travel extensively, both within the United States and internationally. The Company will reimburse you promptly for all travel and other business expenses incurred by you in connection with the performance of your duties for the Company, subject to the Company’s normal business expense and travel policies and procedures. |
Vacation: | During your employment with the Company, you will receive vacation time off in accordance with the policies and practices of the Company. Vacation time shall be taken at such times so as not to unduly disrupt the operations of the Company. |
Office Location: | Your employment will be based at the Company’s offices located in San Jose, California. |
Inventions Agreement: | You acknowledge and agree that you continue to be bound by the terms and conditions of the Proprietary Information and Inventions Agreement (“PIIA”) which you signed when you first joined the Company, the terms of which are incorporated herein by reference. |
Agreement | You acknowledge and agree that you continue to be bound by the terms and conditions of the Post-Employment Restrictions Agreement (“PERA”) which you signed when you first joined the Company, the terms of which are incorporated herein by reference. |
Change in Control: | You and the Company will enter into the enclosed Management Agreement (the “Management Agreement”), to be separately signed by you, the terms of which are incorporated herein by reference (except that terms defined in the Management Agreement apply only to the use of such terms in the Management Agreement, and terms defined in this Agreement apply only to the use of such terms in this Agreement). |
Termination: | Either you or the Company may terminate the employment relationship during the Term or after the Term at any time and for any reason. Upon termination of your employment by either party for any reason, you will promptly resign any and all positions you then hold as officer or director of the Company or any of its affiliates. |
Severance: | In case of involuntary termination of your employment by the Company without Cause prior to the end of the Initial Term or prior to the end of any Renewal Term then in effect or in the case of voluntary resignation of your employment for Good Reason prior to the end of the Initial Term or prior to the end of any Renewal Term then in effect (each a “Qualifying Termination”), the Company will pay you as severance pay an amount equal to one (1) times the sum of (a) your annual base salary at the rate in effect on your last day of employment plus (b) the annual incentive bonus last paid to you preceding the Qualifying Termination. In addition, upon a Qualifying Termination, if you (and, if applicable, your eligible dependents), complete and return the forms necessary to elect COBRA continuation coverage to the COBRA administrator for the group health plan in which you participate at the time of your Qualifying Termination, then the Company will provide you and your |
Indemnification: | The Company will indemnify you in connection with your duties and responsibilities for the Company, as set out in the enclosed Indemnification Agreement (the “Indemnification Agreement”), to be separately signed by you. |
Prior Employment: | The Company understands that you may have other contractual obligations to former employers, but you have represented that no such obligations prevent you |
Taxes: | The Company may withhold from any compensation payable to you in connection with your employment such federal, state and local income and employment taxes as the Company shall reasonably determine are required to be withheld pursuant to any applicable law or regulation. You acknowledge and agree that the Company has made no assurances or representations to you regarding the tax treatment of any consideration provided for in this Agreement and that the Company has advised you to obtain your own personal tax advice. Except for any tax amounts withheld by the Company from the payments or other consideration hereunder and any employment taxes required to be paid by the Company or any tax liabilities for you that are the direct result of the Company failing to make payments or to provide other consideration hereunder in accordance with the terms of this Agreement, you shall be responsible for payment of any and all taxes owed in connection with the consideration provided for in this Agreement. |
No Offset: | In the event of any termination of your employment, you shall be under no obligation to seek other employment or otherwise mitigate damages. There shall be no offset against, or any recoupment of, any amounts, benefits or entitlements due to you hereunder on account of any remuneration or other benefit earned or received by you from subsequent employment. |
Binding Nature: | As of the date first written above, this Agreement is intended to bind and inure to the benefit of and be enforceable by you and the Company and their respective successors, assigns, heirs, executors and administrators, except you may not assign your rights or obligations hereunder without the prior written consent of the Company (provided that if you should die while any payment, benefit or entitlement is due to you hereunder, such payment, benefit or entitlement shall be paid to your designated beneficiary, or, if there is no designated beneficiary, to your estate). In addition, no rights or obligations of the Company under this Agreement may be assigned or transferred by the Company without your prior written consent, except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or a sale, liquidation or other disposition of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and assumes the liabilities, obligations and duties of the Company under this Agreement, either contractually or as a matter of law. |
Applicable Law: | This Agreement shall be interpreted and construed in accordance with the laws of the State of California. |
Section 409A: | The parties hereto intend that all payments and benefits to be made or provided to you will be paid or provided in compliance with all applicable requirements of Section 409A (as defined above), and the provisions of this Agreement shall be construed and administered in accordance with and to implement such intent. In furtherance of the foregoing, the provisions set forth below shall apply notwithstanding any other provision in this Agreement. |
Section 280G: | Section 3 of the Management Agreement is incorporated in full into this Agreement and shall apply to any payment, benefit or entitlement paid or provided to you (or to be paid or so provided) hereunder or otherwise as if such payment, benefit or entitlement had been paid under the Management Agreement. |
Notices: | Any notice, request or other communication required under this Agreement shall be in writing and shall be deemed to have been given (i) when delivered personally, or (ii) two days after having been sent by a recognized courier, provided written acknowledgement of receipt is obtained. Any such notices, requests or other communications shall be given to the Company, at Fair Isaac Corporation, Attn: General Counsel, 181 Metro Drive, Suite 700, San Jose, California, 95110, and to you at your home address in the Company’s files (or to any other address the party provides in accordance with this notice provision). |
Entire Agreement: | This Agreement, the Indemnification Agreement and the Management Agreement constitute the entire agreement between the parties with respect to the subject matter hereto, and supersede all prior discussions, agreements and negotiations between you and the Company with respect to the subject matter hereof; provided, however, the PIIA and PERA remain in full force and effect in accordance with their terms, and the terms of the PIIA and PERA are incorporated herein by reference. No amendment or modification of this Agreement will be effective unless made in writing and signed by you and an authorized officer or director of the Company. Any waiver of this Agreement will only be effective if signed by the party against whom the waiver is being enforced (which in the case of the Company shall be an authorized officer or director). No waiver by any party of any breach of any condition or provision of this Agreement shall be deemed a waiver of any similar or dissimilar condition or provision at the same or any prior or subsequent time. |
• | Form of Release attached hereto as Exhibit A |
/s/ Thomas A. Bowers | August 26, 2020 |
Thomas A. Bowers | Dated |
Dated: | |
Thomas A. Bowers |
Name of Company | Jurisdiction of Incorporation/Organization |
CR Software, LLC | Virginia |
Data Research Technologies, Inc. | Minnesota |
Entiera, Inc. | Delaware |
eZmCom, Inc. | Delaware |
Fair Isaac (Adeptra) Limited | England and Wales |
Fair Isaac (ASPAC) Pte. Ltd. | Singapore |
Fair Isaac (Australia) Pty Ltd | Australia |
Fair Isaac (Singapore) Pte. Ltd. | Singapore |
Fair Isaac (Thailand) Co., Ltd. | Thailand |
Fair Isaac Asia Holdings, Inc. | Minnesota |
Fair Isaac Asia Pacific Corp. | Delaware |
Fair Isaac Brazil, LLC | Delaware |
Fair Isaac Canada, Ltd. | Canada |
Fair Isaac Chile Software and Services Ltda. | Chile |
Fair Isaac Credit Services, Inc. | Delaware |
Fair Isaac do Brasil, Ltda. | Brazil |
Fair Isaac España SL | Spain |
Fair Isaac Europe Limited | England and Wales |
Fair Isaac Germany GmbH | Germany |
Fair Isaac Holdings, Inc. | Delaware |
Fair Isaac Hong Kong Limited | Hong Kong |
Fair Isaac India Software Private Limited | India |
Fair Isaac Information Technology (Beijing) Co., Ltd. | People’s Republic of China |
Fair Isaac International Corporation | California |
Fair Isaac Italy S.r.l. | Italy |
Fair Isaac Japan G.K. | Japan |
Fair Isaac Lithuania, UAB | Lithuania |
Fair Isaac Malaysia Sdn. Bhd. | Malaysia |
Fair Isaac Mexico S.A. de C.V. | Mexico |
Fair Isaac Network, Inc. | Delaware |
Fair Isaac Nordics AB | Sweden |
Fair Isaac Polska sp. z.o.o. | Poland |
Fair Isaac Services Limited | England and Wales |
Fair Isaac Software Holdings Limited | England and Wales |
Fair Isaac South Africa (Pty) Ltd | South Africa |
Fair Isaac Turkey Software and Consultancy Services Limited Sirketi | Turkey |
Fair Isaac UK Group Limited | England and Wales |
Fair Isaac UK Holdings, Inc. | Delaware |
Fair Isaac UK International Holdings Ltd. | England and Wales |
Fair Isaac UK Investment Holdings LP | England and Wales |
Fair Isaac WBR Limited Liability Company | Russia |
FICO Middle East FZ-LLC | United Arab Emirates |
HNC Software LLC | Delaware |
Infoglide Software Corporation | Delaware |
myFICO Consumer Services Inc. | Delaware |
/s/ Deloitte & Touche LLP |
San Diego, CA |
November 10, 2020 |
1. | I have reviewed this annual report on Form 10-K of Fair Isaac Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ WILLIAM J. LANSING |
William J. Lansing |
Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Fair Isaac Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ MICHAEL I. MCLAUGHLIN |
Michael I. McLaughlin |
Chief Financial Officer |
/s/ WILLIAM J. LANSING |
William J. Lansing |
Chief Executive Officer |
/s/ MICHAEL I. MCLAUGHLIN |
Michael I. McLaughlin |
Chief Financial Officer |
/($.*'$FRI,F3*%.J7,FRI
/($.*'$FRI,F3*%.J7,FRI
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 88,857,000 | 88,857,000 |
Common stock, shares outstanding (in shares) | 29,096,000 | 28,944,000 |
Treasury stock, shares | 59,761,000 | 59,913,000 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Statement of Cash Flows [Abstract] | |||
Cash paid for income taxes, refunds | $ 1,931 | $ 1,372 | $ 3,079 |
Nature of Business and Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Business and Summary of Significant Accounting Policies | Nature of Business and Summary of Significant Accounting Policies Fair Isaac Corporation Incorporated under the laws of the State of Delaware, Fair Isaac Corporation (“FICO”) is a provider of analytic, software and data management products and services that enable businesses to automate, improve and connect decisions. FICO provides a range of analytical solutions, credit scoring and credit account management products and services to banks, credit reporting agencies, credit card processing agencies, insurers, retailers, healthcare organizations and public agencies. In these consolidated financial statements, FICO is referred to as “we,” “us,” “our,” or “the Company.” Principles of Consolidation and Basis of Presentation Effective October 1, 2019, we adopted ASU No. 2016-02, “Leases (Topic 842)” and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, “Topic 842”) using the modified retrospective approach, under which financial results reported in prior periods were not restated. As a result, the consolidated balance sheet as of September 30, 2020 is not comparable with that as of September 30, 2019. See our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 filed with the SEC on November 8, 2019 for lease policies that were in effect in prior periods before adoption of Topic 842. The 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 collectibility of accounts receivable; the appropriate levels of various accruals; variable considerations included in the transaction price 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. As the impact of the COVID-19 pandemic continues to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment. These estimates and assumptions may change in future periods and will be recognized in the consolidated financial statements as new events occur and additional information becomes known. To the extent our actual results differ materially from those estimates and assumptions, our future financial statements could be affected. For more information, see Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K. Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and investments with an original maturity of 90 days or less at time of purchase. Fair Value of Financial Instruments The fair value of certain of our financial instruments, including cash and cash equivalents, receivables, other current assets, accounts payable, accrued compensation and employee benefits, other accrued liabilities and amounts outstanding under our revolving line of credit, approximate their carrying amounts because of the short-term maturity of these instruments. The fair values of our cash and cash equivalents and marketable security investments are disclosed in Note 4. The fair value of our derivative instruments is disclosed in Note 5. The fair value of our senior notes is disclosed in Note 9. Investments We categorize our investments in debt and equity instruments as trading, available-for-sale or held-to-maturity at the time of purchase. Trading securities are carried at fair value with unrealized gains or losses included in income (expense). Available-for-sale securities are carried at fair value measurements using quoted prices in active markets for identical assets or liabilities with unrealized gains or losses included in accumulated other comprehensive income (loss). Held-to-maturity securities are carried at amortized cost. Dividends and interest income are accrued as earned. Realized gains and losses are determined on a specific identification basis and are included in other income (expense). We review marketable securities for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. We did not classify any securities as held-to-maturity or available-for-sale during each of the three years ended September 30, 2020, 2019 and 2018. Investments with remaining maturities over one year are classified as long-term investments. We have certain other investments for which there is no readily determinable fair value. These investments are recorded at cost, less impairment (if any) plus or minus adjustments for observable price changes. The carrying value of these investments was $1.1 million and $1.6 million at September 30, 2020 and 2019, respectively, and they are reported in other assets on our consolidated balance sheets. At September 30, 2020, we reviewed the carrying value of these investments and concluded that they were not impaired and as of that date, we were unable to exercise significant influence over the investees. Concentration of Risk Financial instruments that potentially expose us to concentrations of risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable, which are generally not collateralized. Our policy is to place our cash, cash equivalents, and marketable securities with high quality financial institutions, commercial corporations and government agencies in order to limit the amount of credit exposure. We have established guidelines relative to diversification and maturities for maintaining safety and liquidity. We generally do not require collateral from our customers, but our credit extension and collection policies include analyzing the financial condition of potential customers, establishing credit limits, monitoring payments, and aggressively pursuing delinquent accounts. We maintain allowances for potential credit losses. A significant portion of our revenues are derived from the sales of products and services to the consumer credit and banking industries. Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and amortization. Major renewals and improvements are capitalized, while repair and maintenance costs are expensed as incurred. Assets acquired under capital leases are included in property and equipment with corresponding depreciation included in accumulated depreciation. Depreciation and amortization charges are calculated using the straight-line method over the following estimated useful lives:
The cost and accumulated depreciation for property and equipment sold, retired or otherwise disposed of are removed from the applicable accounts and resulting gains or losses are recorded in our consolidated statements of income and comprehensive income. Depreciation and amortization on property and equipment totaled $23.5 million, $24.2 million and $22.6 million during fiscal 2020, 2019 and 2018, respectively. Internal-Use Software Costs incurred to develop internal-use software during the application development stage are capitalized and reported at cost. Application development stage costs generally include costs associated with internal-use software configuration, coding, installation and testing. Costs of significant upgrades and enhancements that result in additional functionality are also capitalized whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Capitalized costs are amortized using the straight-line method over two to three years. Software development costs required to be capitalized for internal-use software have not been material to date. Capitalized Software and Research and Development Costs Software development costs relating to products to be sold in the normal course of business are expensed as incurred as research and development costs until technological feasibility is established. Technological feasibility for our products occurs approximately concurrently with the general release of our products; accordingly, we have not capitalized any development or production costs. Costs we incur to maintain and support our existing products after the general release of the product are expensed in the period they are incurred and included in research and development costs in our consolidated statements of income and comprehensive income. Goodwill, Acquisition Intangibles and Other Long-Lived Assets Goodwill represents the excess of cost over the fair value of identifiable assets acquired and liabilities assumed in business combinations. We assess goodwill for impairment for each of our reporting units on an annual basis during our fourth fiscal quarter using a July 1 measurement date unless circumstances require a more frequent measurement. We have determined that our reporting units are the same as our reportable segments. When evaluating goodwill for impairment, we may first perform an assessment qualitatively whether it is more likely than not that a reporting unit's carrying amount exceeds its fair value, referred to as a “step zero” approach. If, based on the review of the qualitative factors, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying value, we would bypass the two-step impairment test. Events and circumstances we consider in performing the “step zero” qualitative assessment include macro-economic conditions, market and industry conditions, internal cost factors, share price fluctuations, and the operational stability and the overall financial performance of the reporting units. If we conclude that it is more likely than not that a reporting unit's fair value is less than its carrying amount, we would perform the first step (“step one”) of the two-step impairment test and calculate the estimated fair value of the reporting unit by using discounted cash flow valuation models and by comparing our reporting units to guideline publicly-traded companies. These methods require estimates of our future revenues, profits, capital expenditures, working capital, and other relevant factors, as well as selecting appropriate guideline publicly-traded companies for each reporting unit. We estimate these amounts by evaluating historical trends, current budgets, operating plans, industry data, and other relevant factors. Alternatively, we may bypass the qualitative assessment described above for any reporting unit in any period and proceed directly to performing step one of the goodwill impairment test. For fiscal 2017, we elected to proceed directly to the step one quantitative analysis for all of our reporting units. There was a substantial excess of fair value over carrying value for each of our reporting units and we determined goodwill was not impaired for any of our reporting units for fiscal 2017. For fiscal 2018, 2019 and 2020, we performed a step zero qualitative analysis for our annual assessment of goodwill impairment. After evaluating and weighing all relevant events and circumstances, we concluded that it is not more likely than not that the fair value of any of our reporting units was less their carrying amounts. Consequently, we did not perform a step one quantitative analysis and determined goodwill was not impaired for any of our reporting units for fiscal 2018, 2019 and 2020. We amortize our finite-lived intangible assets which result from our acquisitions over the following estimated useful lives:
Our intangible assets that have finite useful lives and other long-lived assets are assessed for potential impairment when there is evidence that events and circumstances related to our financial performance and economic environment indicate the carrying amount of the assets may not be recoverable. When impairment indicators are identified, we test for impairment using undiscounted cash flows. If such tests indicate impairment, then we measure and record the impairment as the difference between the carrying value of the asset and the fair value of the asset. We did not recognize any impairment charges on intangible assets that have finite useful lives or other long-lived assets in fiscal 2020, 2019 and 2018. Revenue Recognition Contracts with Customers Our revenue is primarily derived from term-based or perpetual licensing of software and scoring products and solutions, and associated maintenance; software-as-a-service (“SaaS”) subscription services; scoring and credit monitoring services for consumers; and professional services. For contracts with customers that contain various combinations of products and services, we evaluate whether the products or services are distinct — distinct products or services will be accounted for as separate performance obligations, while non-distinct products or services are combined with others to form a single performance obligation. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation on a relative SSP basis. Revenue is recognized when control of the promised goods or services is transferred to our customers. License revenue is derived from contracts in which we grant our direct customers or distributors the right to deploy or resell our software and scoring products and solutions on-premises. Our software offerings often include a perpetual or term-based license and post-contract support or maintenance, both of which generally represent distinct performance obligations and are accounted for separately. The transaction price is either in the form of a fixed consideration with separately stated prices for license and maintenance, a single subscription with license and maintenance bundled, or a usage-based royalty — sometimes subject to a guaranteed minimum — for the license and maintenance bundle. When the amount is in the form of a fixed consideration, including the guaranteed minimum in usage-based royalty, license revenue from distinct on-premises license is recognized at the point in time when the software or scoring solution is made available to the customer or distributor. Any royalties not subject to the guaranteed minimum or earned in excess of the minimum amount are recognized as transactional revenue when the subsequent sales or usage occurs. Revenue allocated to maintenance is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits. In addition to usage-based royalty on our software and scoring products, transactional revenue is also derived from SaaS contracts in which we provide customers with access to and standard support for our software application either in the FICO® Analytic Cloud or Amazon Web Services (“AWS”), our primary cloud infrastructure provider, on a subscription basis. The transaction price typically includes a fixed consideration in the form of a guaranteed minimum that allows up to a certain level of usage and a variable consideration in the form of usage or transaction-based fees in excess of the minimum threshold; or usage or transaction-based variable amount not subject to a minimum threshold. We determined the nature of our SaaS arrangements is to provide continuous access to our hosted application in the cloud, i.e., a stand-ready obligation that comprises a series of distinct service periods (e.g., a series of distinct daily, monthly or annual periods of service). We estimate the total variable consideration at contract inception — subject to any constraints that may apply — and update the estimates as new information becomes available and recognize the amount ratably over the SaaS service period, unless we determine it is appropriate to allocate the variable amount to each distinct service period and recognize revenue as each distinct service period is performed. We also derive transactional revenue from credit scoring and monitoring services that provide consumers access to their credit reports and enable them to monitor their credit. These are provided as either a one-time or ongoing subscription service renewed monthly or annually, all with a fixed consideration. We determined the nature of the subscription service is a stand-ready obligation to generate credit reports, provide credit monitoring and other services for our customers, which comprises a series of distinct service periods (e.g., a series of distinct daily, monthly or annual periods of service). Revenue from one-time or monthly subscription services is recognized during the period when service is performed. Revenue from annual subscription services is recognized ratably over the subscription period. Professional services include software or SaaS implementation, consulting, model development, training services and premium cloud support. They are sold either standalone, or together with other products or services and generally represent distinct performance obligations. The transaction price can be a fixed amount or on a time and materials basis. Revenue on fixed-price services is recognized using an input method based on labor hours expended which we believe provides a faithful depiction of the transfer of services. Revenue on services provided on a time and materials basis is recognized applying the “right-to-invoice” practical expedient as the amount to which we have a right to invoice the customer corresponds directly with the value of our performance to the customer. In addition, we sell premium cloud support on a subscription basis for a fixed amount, and revenue is recognized ratably over the contract term. Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct and should be accounted for separately may require significant judgment. Specifically, when implementation service is included in the original software or SaaS offerings, judgment is required to determine if the implementation service significantly modifies or customizes the software or SaaS service in such a way that the risks of providing it and the customization service are inseparable. In rare instances, contracts may include significant modification or customization of the software of SaaS service and will result in the combination of software or SaaS service and implementation service as one performance obligation. We determine the SSPs using data from our historical standalone sales, or, in instances where such information is not available (such as when we do not sell the product or service separately), we consider factors such as the stated contract prices, our overall pricing practices and objectives, go-to-market strategy, size and type of the transactions, and effects of the geographic area on pricing, among others. When the selling price of a product or service is highly variable, we may use the residual approach to determine the SSP of that product or service. Significant judgment may be required to determine the SSP for each distinct performance obligation when it involves the consideration of many market conditions and entity-specific factors discussed above. Significant judgment may be required to determine the timing of satisfaction of a performance obligation in certain professional services contracts with a fixed consideration, in which we measure progress using an input method based on labor hours expended. In order to estimate the total hours of the project, we make assumptions about labor utilization, efficiency of processes, the customer’s specification and IT environment, among others. For certain complex projects, due to the risks and uncertainties inherent with the estimation process and factors relating to the assumptions, actual progress may differ due to the change in estimated total hours. Adjustments to estimates are made in the period in which the facts requiring such revisions become known and, accordingly, recognized revenues are subject to revisions as the contract progresses to completion. Capitalized Commission Costs We capitalize incremental commission fees paid as a result of obtaining customer contracts. Capitalized commission costs, which are recorded in other assets within the accompanying consolidated balance sheets, were $38.6 million and $33.7 million at September 30, 2020 and 2019, respectively. Capitalized commission costs are amortized on a straight-line basis over ten years — determined using a portfolio approach — based on the transfer of goods or services to which the assets relate, taking into consideration both the initial and future contracts as we do not typically pay a commission on a contract renewal. The amortization costs are included in selling, general, and administrative expenses of our consolidated statements of income and comprehensive income. The amount of amortization was $5.7 million, $5.0 million and $4.5 million during the years ended September 30, 2020, 2019 and 2018, respectively. There was no impairment loss in relation to the costs capitalized. We apply a practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less. These costs are recorded within selling, general, and administrative expenses. See Note 15 for our discussion on disaggregation of revenues, and Note 16 for contract balances and performance obligations. Business Combinations Accounting for our acquisitions requires us to recognize, separately from goodwill, the assets acquired and the liabilities assumed at their acquisition-date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition-date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income and comprehensive income. Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date, including our estimates for intangible assets, contractual obligations assumed, pre-acquisition contingencies and contingent consideration, where applicable. If we cannot reasonably determine the fair value of a pre-acquisition contingency (non-income tax related) by the end of the measurement period, we will recognize an asset or a liability for such pre-acquisition contingency if: (i) it is probable that an asset existed or a liability had been incurred at the acquisition date and (ii) the amount of the asset or liability can be reasonably estimated. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Subsequent to the measurement period, changes in our estimates of such contingencies will affect earnings and could have a material effect on our consolidated results of operations and financial position. Examples of critical estimates in valuing certain of the intangible assets we have acquired include but are not limited to: (i) future expected cash flows from software license sales, support agreements, consulting contracts, other customer contracts and acquired developed technologies and patents; (ii) expected costs to develop the in-process research and development into commercially viable products and estimated cash flows from the projects when completed; and (iii) the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s product portfolio. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. In addition, uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We reevaluate these items quarterly based upon facts and circumstances that existed as of the acquisition date with any adjustments to our preliminary estimates being recorded to goodwill provided that we are within the measurement period. Subsequent to the measurement period or our final determination of the tax allowance’s or contingency’s estimated value, whichever comes first, changes to these uncertain tax positions and tax related valuation allowances will affect our provision for income taxes in our consolidated statements of income and comprehensive income and could have a material impact on our consolidated results of operations and financial position. Income Taxes We estimate our income taxes based on the various jurisdictions where we conduct business, which involves significant judgment in determining our income tax provision. We estimate our current tax liability using currently enacted tax rates and laws and assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities recorded on our consolidated balance sheets using the currently enacted tax rates and laws that will apply to taxable income for the years in which those tax assets are expected to be realized or settled. We then assess the likelihood our deferred tax assets will be realized and to the extent we believe realization is not more likely than not, we establish a valuation allowance. When we establish a valuation allowance or increase this allowance in an accounting period, we record a corresponding income tax expense in our consolidated statements of income and comprehensive income. In assessing the need for the valuation allowance, we consider future taxable income in the jurisdictions we operate; our ability to carry back tax attributes to prior years; an analysis of our deferred tax assets and the periods over which they will be realizable; and ongoing prudent and feasible tax planning strategies. An increase in the valuation allowance would have an adverse impact, which could be material, on our income tax provision and net income in the period in which we record the increase. We recognize and measure benefits for uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the technical merits of the tax position indicate it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount more than 50% likely of being realized upon settlement. Significant judgment is required to evaluate uncertain tax positions and they are evaluated on a quarterly basis. Our evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results. A description of our accounting policies associated with tax-related contingencies and valuation allowances assumed as part of a business combination is provided under “Business Combinations” above. Earnings per Share Basic earnings per share are computed on the basis of the weighted-average number of common shares outstanding during the period under measurement. Diluted earnings per share are based on the weighted-average number of common shares outstanding and potential common shares. Potential common shares result from the assumed exercise of outstanding stock options or other potentially dilutive equity instruments, when they are dilutive under the treasury stock method. Comprehensive Income Comprehensive income is the change in our equity (net assets) during each period from transactions and other events and circumstances from non-owner sources. It includes net income, foreign currency translation adjustments and unrealized gains and losses on our investments in marketable securities, net of tax. Foreign Currency and Derivative Financial Instruments We have determined that the functional currency of each foreign operation is the local currency. Assets and liabilities denominated in their local foreign currencies are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates of exchange prevailing during the period. Foreign currency translation adjustments are accumulated as a separate component of consolidated stockholders’ equity. We utilize derivative instruments to manage market risks associated with fluctuations in certain foreign currency exchange rates as they relate to specific balances of accounts receivable and cash denominated in foreign currencies. We principally utilize foreign currency forward contracts to protect against market risks arising in the normal course of business. Our policies prohibit the use of derivative instruments for the sole purpose of trading for profit on price fluctuations or to enter into contracts that intentionally increase our underlying exposure. All of our foreign currency forward contracts have maturity periods of less than three months. At the end of the reporting period, foreign-currency-denominated assets and liabilities are remeasured into the functional currencies of the reporting entities at current market rates. The change in value from this remeasurement is reported as a foreign exchange gain or loss for that period in other income, net in the accompanying consolidated statements of income and comprehensive income. We recorded transactional foreign exchange losses of $1.0 million, $0.0 million and $0.4 million during fiscal 2020, 2019 and 2018, respectively. Share-Based Compensation We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense, net of estimated forfeitures, over the vesting or service period, as applicable, of the stock award (generally three to four years). See Note 13 for further discussion of our share-based employee benefit plans. Advertising and Promotion Costs Advertising and promotion costs are expensed as incurred and are included in selling, general and administrative expenses in the accompanying consolidated statements of income and comprehensive income. Advertising and promotion costs totaled $8.7 million, $3.6 million and $4.1 million in fiscal 2020, 2019 and 2018, respectively. New Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the FASB issued Topic 842, which requires the recognition of operating lease assets and lease liabilities on the balance sheet. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Under the new standard, disclosures are required to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. In the first quarter of fiscal 2020, we adopted Topic 842 using the “Comparatives Under 840 Option” approach to transition. In accordance with the standard, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Topic 842 provided a package of practical expedients that allow an entity to not reassess (1) whether any expired or existing contracts contain a lease, (2) the lease classification of any expired or existing lease, and (3) initial direct costs for any existing leases. We elected to apply the package of practical expedients, and did not elect the hindsight practical expedient in determining the lease term for existing leases as of October 1, 2019. Adoption of Topic 842 did not result in the recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The most significant impact of adoption was the recognition of operating lease assets and operating lease liabilities of $89.8 million and $98.9 million, respectively, while our accounting for existing capital leases (now referred to as finance leases) remained substantially unchanged. We expect the impact of adoption to be immaterial to our consolidated statements of income and comprehensive income and consolidated statements of cash flows on an ongoing basis. As part of our adoption, we also modified our control procedures and processes, none of which materially affected our internal control over financial reporting. See Note 17 for additional information regarding our accounting policy for leases and additional disclosures. Recent Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-15, “Intangibles—Goodwill and Other (Topic 350): Internal-Use Software.” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, which means that it will be effective for our fiscal year beginning October 1, 2020. We do not believe that adoption of ASU 2018-15 will have a significant impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, which means it will be effective for our fiscal year beginning October 1, 2020. We do not believe that adoption of Topic 326 will have a significant impact on our consolidated financial statements. We do not expect that any other recently issued accounting pronouncements will have a significant effect on our financial statements.
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Business Combinations |
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Business Combinations [Abstract] | |
Business Combinations | Business Combinations There were no acquisitions incurred during fiscal 2020. In fiscal 2019, we acquired 100% of the equity of eZmCom, Inc. for $18.6 million in cash. We recorded $6.0 million of intangible assets which are being amortized using the straight-line method over a weighted-average useful life of 4.73 years. We allocated $11.2 million of goodwill to our Applications segment that is deductible for tax purposes. There were no acquisitions incurred during fiscal 2018.
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Cash, Cash Equivalents and Marketable Securities Available for Sale |
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Cash, Cash Equivalents and Marketable Securities Available for Sale | Cash, Cash Equivalents and Marketable Securities The following is a summary of cash, cash equivalents and marketable securities at September 30, 2020 and 2019:
The assets included in marketable securities represent long-term marketable equity 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. These investments are treated as trading securities and recorded at fair value.
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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.
The following table represents financial assets that we measured at fair value on a recurring basis at September 30, 2020 and 2019:
For the fair value of our derivative instruments and senior notes, see Note 5 and Note 9, respectively. There were no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy during the years ended September 30, 2020, 2019 or 2018.
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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, net. The forward contracts are not designated as hedges and are marked to market through other income, 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 September 30, 2020 and 2019:
The foreign currency forward contracts were entered into on September 30 of each fiscal year; therefore, their fair value was $0 at September 30, 2020 and 2019. Losses on derivative financial instruments are recorded in our consolidated statements of income and comprehensive income as a component of other income, net. These amounts are shown below for the years ended September 30, 2020, 2019 and 2018:
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Intangible assets that are subject to amortization consisted of the following at September 30, 2020 and 2019:
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 consolidated statements of income and comprehensive income. Amortization expense consisted of the following:
Estimated future intangible asset amortization expense associated with intangible assets existing at September 30, 2020, was as follows (in thousands):
The following table summarizes changes to goodwill during fiscal 2020 and 2019, both in total and as allocated to our operating segments. We have not recognized any goodwill impairment losses to date.
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Composition of Certain Financial Statement Captions |
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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 assets at September 30, 2020 and 2019:
As a strategic cost initiative in fiscal 2020 we committed to a course of action to adjust our facilities footprint in light of post-pandemic workforce patterns. As a result of this initiative, we recorded a net impairment loss of $5.2 million on abandonment of property and equipment. See Note 11 for additional information regarding our restructuring and impairment charges.
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Revolving Line of Credit |
12 Months Ended |
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Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Revolving Line of Credit | Revolving Line of Credit On May 8, 2018, we amended our credit agreement with a syndicate of banks, extending the maturity date of the unsecured revolving line of credit from December 30, 2019 to May 8, 2023, while reducing our borrowing capacity to $400 million with an option to increase it by another $100 million. Proceeds from the credit facility 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. Interest on amounts borrowed under the credit facility is based on (i) a base rate, which is the greater of (a) the prime rate and (b) the Federal Funds rate plus 0.500% and (c) the one-month LIBOR rate plus 1.000%, plus, in each case, an applicable margin, or (ii) an adjusted LIBOR rate plus an applicable margin. The applicable margin for base rate borrowings ranges from 0% to 0.875% and for LIBOR borrowings ranges from 1.000% to 1.875% and is determined based on our consolidated leverage ratio. In addition, we must pay credit facility fees. The credit facility contains certain restrictive covenants including maintaining a maximum consolidated leverage ratio of 3.25, subject to a step up to 3.75 following certain permitted acquisitions; and a minimum fixed charge ratio of 2.50 through the maturity of our 2010 Senior Notes in July 2020, following which maintaining a minimum interest coverage ratio of 3.00 is required. The credit agreement also contains other covenants typical of unsecured facilities. As of September 30, 2020, we had $95.0 million in borrowings outstanding at a weighted-average interest rate of 1.285% and we were in compliance with all financial covenants under this credit facility.
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Senior Notes |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes | Senior Notes On July 14, 2010, we issued $245 million of senior notes in a private placement to a group of institutional investors (the “2010 Senior Notes”). The 2010 Senior Notes were issued in four series as follows:
On July 14, 2020, the aggregate principal amount of Series H of 2010 Senior Notes was repaid at maturity. At September 30, 2020, the 2010 Senior Notes were no longer outstanding. 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,” along with the 2010 Senior Notes and 2018 Senior Notes, the “Senior Notes”). We used the net proceeds to repay a large portion of the outstanding balance on our revolving credit facility. The 2019 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028. The indentures for the 2018 Senior Notes and the 2019 Senior Notes contain certain covenants typical of unsecured obligations. The following table presents the carrying amounts and fair values for the Senior Notes at September 30, 2020 and 2019:
(*) The carrying value of the Senior Notes was reduced by the net debt issuance costs of $10.6 million and $5.2 million at September 30, 2020 and 2019, respectively. Future principal payments for the Senior Notes are as follows (in thousands):
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Employee Benefit Plans |
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Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Defined Contribution Plans We sponsor the Fair Isaac Corporation 401(k) plan for eligible employees in the U.S. Under this plan, eligible employees may contribute up to 25% of compensation, not to exceed statutory limits. We also provide a company matching contribution. Investment in FICO common stock is not an option under this plan. Our contributions into all 401(k) plans, including former-acquired-company-sponsored plans that have since merged into the Fair Isaac Corporation 401(k) plan or have been frozen, totaled $10.1 million, $10.3 million and $8.8 million during fiscal 2020, 2019 and 2018, respectively. Employee Incentive Plans We maintain various employee incentive plans for the benefit of eligible employees, including officers. The awards generally are based on the achievement of certain financial and performance objectives subject to the discretion of management. Total expenses under our employee incentive plans were $60.6 million, $57.5 million and $48.4 million during fiscal 2020, 2019 and 2018, respectively.
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Restructuring Expenses |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Expenses | Restructuring and Impairment Charges During fiscal 2020, we incurred net charges totaling $45.0 million consisting of$28.0 million in impairment loss on operating lease assets, $5.2 million in impairment loss on disposals of property and equipment and $11.8 million in restructuring charges. The impairment losses were associated with closing certain non-core offices and reducing office space in other locations to better align with anticipated needs in light of post-pandemic workforce patterns. The restructuring charges related to employee separation costs as a result of eliminating 209 positions throughout the Company. Cash payments for all the employee separation costs will be paid by the end of our fiscal 2021. There were no restructuring and impairment charges incurred during fiscal 2019 and 2018. The following tables summarize our restructuring accruals associated with the employee separation actions. The current portion and non-current portion were recorded in other accrued liabilities and other liabilities, respectively, within the accompanying consolidated balance sheets.
(*) Upon adoption of Topic 842, accrued lease exit obligations of $1.4 million, which were associated with vacating excess leased space in fiscal 2017, were reclassified to operating lease liabilities.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The provision for income taxes was as follows during fiscal 2020, 2019 and 2018:
The foreign provision was based on foreign pre-tax earnings of $42.2 million, $36.0 million and $10.8 million in fiscal 2020, 2019 and 2018, respectively. Current foreign tax expense related to foreign tax withholdings was $6.4 million, $6.5 million and $6.0 million in fiscal 2020, 2019 and 2018, respectively. Foreign withholding tax and related foreign tax credits are included in current tax expense above. Deferred tax assets and liabilities at September 30, 2020 and 2019 were as follows:
Based upon the level of historical taxable income and projections for future taxable income over the periods that the deferred tax assets will reverse, management believes it is more likely than not that we will realize the benefits of the deferred tax assets, net of the existing valuation allowance at September 30, 2020. As of September 30, 2020, we had available U.S. federal, state and foreign net operating loss (“NOL”) carryforwards of approximately $7.6 million, $0.1 million, and $31.3 million, respectively. The U.S. federal NOLs were acquired in connection with our acquisitions of Adeptra in fiscal 2012 and Infoglide in fiscal 2013. The U.S. federal NOL carryforward will expire at various dates beginning in fiscal 2024, if not utilized. The state NOL carryforward will expire at various dates beginning in fiscal 2021, if not utilized. The $31.3 million of foreign NOL includes $5.5 million related to China and $19.5 million related to Germany. Due to a limited ability to utilize the China and Germany NOLs, a full valuation allowance has been recorded on the China and Germany NOLs, resulting in no tax benefit. Utilization of the U.S. federal and state NOLs are subject to an annual limitation due to the “change in ownership” provisions of the Internal Revenue Code of 1986, as amended, and similar state provisions. In fiscal 2020 we generated approximately $4.7 million of excess federal research credits which are expected to be utilized fully in future tax years. We also have available excess California state research credit of approximately $16.6 million. The California state research credit does not have an expiration date; however, based on enacted law and expected future cash taxes, we have recorded a valuation allowance of $16.6 million. A reconciliation of the provision for income taxes, with the amount computed by applying the U.S. federal statutory income tax rate (21% in each of fiscal 2020 and fiscal 2019, and 24.5% in fiscal 2018) to income before provision for income taxes for fiscal 2020, 2019 and 2018 is shown below:
The decrease in our income tax provision in fiscal 2020 compared to fiscal 2019 was due to an increase in the excess tax benefits related to stock-based compensation in fiscal 2020. The decrease in our income tax provision in fiscal 2019 compared to fiscal 2018 was due to the decrease in the overall federal tax rate from the blended 24.5% in fiscal 2018 to 21% in fiscal 2019 and the recording of several one-time items in fiscal 2018 related to the enactment of the Tax Act. As of September 30, 2020, we had approximately $111.7 million of unremitted earnings of non-U.S. subsidiaries. The Company generates substantial cash flow in the U.S. and does not have a current need for the cash to be returned to the U.S. from the foreign entities. In the event these earnings are later remitted to the U.S., any estimated withholding tax and state income tax due upon remittance of those earnings is expected to be immaterial to the income tax provision. Unrecognized Tax Benefit for Uncertain Tax Positions We conduct business globally and, as a result, file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities. With a few exceptions, we are no longer subject to U.S. federal, state, local, or foreign income tax examinations for fiscal years prior to 2015. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
We had $8.0 million of total unrecognized tax benefits as of September 30, 2020, including $7.8 million of tax benefits that, if recognized, would impact the effective tax rate. Although the timing and outcome of audit settlements are uncertain, it is unlikely there will be a significant reduction of the uncertain tax benefits in the next twelve months. We recognize interest expense and penalties related to unrecognized tax benefits and penalties as part of the provision for income taxes in our consolidated statements of income and comprehensive income. We recognize interest earned related to income tax matters as interest income in our consolidated statements of income and comprehensive income. As of September 30, 2020, we had accrued interest of $0.4 million related to the unrecognized tax benefits.
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Stock-Based Employee Benefit Plans |
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Stock-Based Employee Benefit Plans | Stock-Based Employee Benefit Plans Description of Stock Option and Share Plans We maintain the 2012 Long-Term Incentive Plan (the “2012 Plan”) under which we are authorized to issue equity awards, including stock options, stock appreciation rights, restricted stock awards, stock unit awards and other stock-based awards. All employees, consultants and advisors of FICO or any subsidiary, as well as all non-employee directors are eligible to receive awards under the 2012 Plan. Stock option awards have a maximum term of seven years. In general, stock option awards and restricted stock unit awards not subject to market or performance conditions vest annually over four years. Restricted stock unit awards subject to market or performance conditions generally vest annually over three years based on the achievement of specified criteria. At September 30, 2020, there were 4,998,722 shares available for issuance under the 2012 Plan. Description of Employee Stock Purchase Plan We maintain the 2019 Employee Stock Purchase Plan (the “2019 Purchase Plan”) under which we are authorized to issue up to 1,000,000 shares of common stock to eligible employees. Employees may have up to 15% of their eligible pay withheld through payroll deductions to purchase FICO common stock during semi-annual offering periods. The purchase price of the stock is 85% of the closing sales price on the last trading day of each offering period. Offering period means approximately six-month periods commencing (a) on the first trading day on or after September 1 and terminating on the last trading day in the following February, and (b) on the first trading day on or after March 1 and terminating on the last trading day in the following August. At September 30, 2020, there were 949,702 shares available for issuance under the 2019 Purchase Plan. We satisfy stock option exercises, vesting of restricted stock units and the 2019 Purchase Plan issuances from treasury shares. Share-Based Compensation Expense and Related Income Tax Benefits We recorded share-based compensation expense of $93.7 million, $83.0 million and $74.8 million in fiscal years 2020, 2019 and 2018, respectively. The total tax benefit related to this share-based compensation expense was $13.2 million, $12.5 million and $15.7 million in fiscal 2020, 2019 and 2018, respectively. As of September 30, 2020, there was $127.7 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize that cost over a weighted-average period of 2.33 years. In fiscal 2020 we received $25.4 million in cash from stock option exercises, with the tax benefit realized for the tax deductions from these exercises of $30.2 million. Stock-Based Activity Stock Options We estimate the fair value of stock options granted using the Black-Scholes option valuation model and we amortize the fair value on a straight-line basis over the vesting period. We used the following assumptions to estimate the fair value of our stock options during fiscal 2020, 2019 and 2018:
Expected Volatility. We estimate the volatility of our common stock at the date of grant based on a combination of the implied volatility of publicly traded options on our common stock and our historical volatility rate. Expected Term. The expected term represents the period that our stock options are expected to be outstanding. We estimate the expected term based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. Dividends. We have not declared or paid any cash dividends on our common stock since May 2017, and we do not presently plan to pay cash dividends on our common stock in the foreseeable future. Consequently, we used an expected dividend yield of zero in the years presented. Risk-Free Interest Rate. The risk-free interest rate assumption is based on observed interest rates appropriate for the term of our employee options. Forfeitures. We use historical data to estimate pre-vesting option forfeitures and record share-based compensation expense only for those awards that are expected to vest. The following table summarizes option activity during fiscal 2020:
The weighted-average fair value of options granted were $99.30, $59.63 and $56.61 during fiscal 2020, 2019 and 2018, respectively. The aggregate intrinsic value of options outstanding at September 30, 2020 was calculated as the difference between the exercise price of the underlying options and the market price of our common stock for the 0.2 million outstanding options, which had exercise prices lower than the $425.38 market price of our common stock at September 30, 2020. The total intrinsic value of options exercised was $132.6 million, $99.1 million and $41.4 million during fiscal 2020, 2019 and 2018, respectively, determined as of the date of exercise. Restricted Stock Units The fair value of restricted stock units (“RSUs”) granted is the closing market price of our common stock on the date of grant, adjusted for the expected dividend yield, if applicable. We amortize the fair value on a straight-line basis over the vesting period. The following table summarizes the RSUs activity during fiscal 2020:
The weighted-average fair value of the RSUs granted were $356.66, $206.29 and $161.85 during fiscal 2020, 2019 and 2018, respectively. The total intrinsic value of the RSUs that vested was $159.0 million, $91.2 million and $70.7 million during fiscal 2020, 2019 and 2018, respectively, determined as of the date of vesting. Performance Share Units Performance share units (“PSUs”) are granted to our senior officers and earned based on pre-established performance goals approved by the Leadership Development and Compensation Committee of our Board of Directors for any given performance period. The range of payout is zero to 200% of the number of target PSUs, based on the outcome of the performance conditions. We estimate the fair value of the PSUs using the closing market price of our common stock on the date of grant, adjusted for the expected dividend yield if applicable, based on the performance condition that is probable of achievement. We amortize the fair values over the requisite service period for each vesting tranche of the award. We reassess the probability at each reporting period and recognize the cumulative effect of the change in estimate in the period of change. The following table summarizes the PSUs activity during fiscal 2020:
The weighted-average fair value of the PSUs granted were $354.18, $185.05 and $157.17 during fiscal 2020, 2019 and 2018, respectively. The total intrinsic value of the PSUs that vested was $36.5 million, $19.3 million and $15.1 million during fiscal 2020, 2019 and 2018, respectively, determined as of the date of vesting. Market Share Units Market share units (“MSUs”) are granted to our senior officers and earned based on our total stockholder return relative to the Russell 3000 Index over performance periods of one, two and three years. We estimate the fair value of MSUs granted using the Monte Carlo valuation model and amortize the fair values over the requisite service period for each vesting tranche of the award. In addition, we do not reverse the compensation cost solely because the market condition is not satisfied, and the award is therefore not earned by the employee, provided the requisite service is rendered. We used the following assumptions to estimate the fair value of our MSUs during fiscal 2020, 2019 and 2018:
The expected volatility was determined based on daily historical movements in our stock price and the Russell 3000 Index for the three years preceding the grant date. The correlation between FICO and the Russell 3000 Index was determined based on historical daily stock price movements for the three years preceding the grant date. Because we have not declared or paid any cash dividends on our common stock since May 2017, and we do not presently plan to pay cash dividends on our common stock in the foreseeable future, we used an expected dividend yield of zero. The risk-free rate was determined based on U.S. Treasury zero-coupon yields over the three-year performance period. The following table summarizes the MSUs activity during fiscal 2020:
The weighted-average fair value of the MSUs granted were $249.13, $169.46 and $151.78 during fiscal 2020, 2019 and 2018, respectively. The total intrinsic value of the MSUs that vested was $44.6 million, $21.6 million and $18.7 million during fiscal 2020, 2019 and 2018, respectively, determined as of the date of vesting. Employee Stock Purchase Plan The compensation expense on the employee stock purchase plan arises from the 15% discount offered to participants. During fiscal 2020, a total of 50,298 shares of our common stock with a weighted-average purchase price of $334.21 per share was issued under the 2019 Purchase Plan. As our first semi-annual offering period started on September 1, 2019, there were no shares purchased during fiscal 2019.
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Earnings per Share | Earnings per Share The following table presents reconciliations for the numerators and denominators of basic and diluted earnings per share (“EPS”) during fiscal 2020, 2019 and 2018:
Anti-dilutive stock-based awards excluded from the calculations of diluted EPS were immaterial during the periods presented.
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Segment Information |
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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.
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 2020, 2019 and 2018:
Information about disaggregated revenue by product deployment methods was as follows:
We derive a significant portion of revenues internationally, and 32%, 34%, and 35% of total consolidated revenues were derived from clients outside the U.S. during fiscal 2020, 2019 and 2018, respectively. Information about disaggregated revenue by primary geographical markets was as follows:
Within our Applications segment our fraud solutions accounted for 15%, 18% and 17% of total revenues in each of fiscal 2020, 2019 and 2018, respectively, and our customer communication services accounted for 8%, 9% and 10% of total revenues in each of these periods, respectively. Revenue generated from a single customer or a group of customers which represented 10% or greater of total revenue are summarized below for fiscal 2020, 2019 and 2018:
At September 30, 2020 and 2019, 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, 2020 and 2019:
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Contract Balances and Performance Obligation |
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Revenue from Contract with Customer [Text Block] | Contract Balances and Performance Obligations 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 September 30, 2020 and 2019 consisted of the following:
(*) Short-term receivables and long-term receivables were recorded in accounts receivable, net and other assets, respectively, within the accompanying consolidated balance sheets. Activity in the allowance for doubtful accounts was as follows:
Contract assets balance at September 30, 2020 and 2019 was immaterial. 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:
(*) Ending balance at September 30, 2020 included current portion of $115.1 million and long-term portion of $7.0 million that were recorded in deferred revenue and other liabilities, respectively, within the consolidated balance sheets. Ending balance at September 30, 2019 included current portion of $111.0 million and long-term portion of $5.3 million that were recorded in deferred revenue and other liabilities, respectively, within the 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:
Revenue allocated to remaining performance obligations was $298.0 million as of September 30, 2020, of which we expect to recognize approximately 50% over the next 18 months and the remainder thereafter. Revenue allocated to remaining performance obligations was $238.4 million as of September 30, 2019.
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Leases Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating leases | Leases We lease office space and data centers under operating lease arrangements, which constitute the majority of our lease obligations. We also enter into finance lease agreements from time to time for certain computer equipment. For any lease with a lease term in excess of 12 months, the related lease assets and liabilities are recognized on our consolidated balance sheets as either operating or finance leases at the commencement of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine these components together and account for them as a single lease component for all classes of assets. Leases with a lease term of 12 months or less are not recorded on our consolidated balance sheets. Furthermore, we recognize lease expense for these leases on a straight-line basis over the lease term. Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We use a collateralized incremental borrowing rate based on the information available at the commencement date, including the lease term, in determining the present value of future payments. In calculating the incremental borrowing rates, we consider recent ratings from credit agencies and current lease demographic information. Our operating leases also typically require payment of real estate taxes, common area maintenance, insurance and other operating costs as well as payments that are adjusted based on a consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components. Operating lease assets also include prepaid lease payments and initial direct costs, and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term. As a strategic cost initiative in fiscal 2020 we committed to a course of action to adjust our facilities footprint in light of post-pandemic workforce patterns, including closing certain non-core offices and reducing office space in other locations to better align with anticipated needs. As a result of this initiative, we recorded a net impairment of $28.0 million on operating lease right-of-use assets. Prior to the adoption of ASC 842, these adjustments were described as restructuring expenses - facilities charges. See Note 11 for additional information regarding our restructuring and impairment charges. The following table presents the lease balances within the accompanying consolidated balance sheet as of September 30, 2020:
(*) Finance leases are recorded net of accumulated depreciation of $1.5 million. The components of our operating and finance lease expenses were as follows:
The following table presents weighted-average remaining lease term and weighted-average discount rates related to our operating and finance leases:
Supplemental cash flow information related to our operating and finance leases was as follows:
Future lease payments under our non-cancellable leases as of September 30, 2020 were as follows:
In accordance with the prior guidance—ASC 840, Leases—our leases were previously designated as either capital or operating. Previously designated capital leases are now considered finance leases under the new guidance, Topic 842. The designation of operating leases remains substantially unchanged under the new guidance. The future minimum lease payments by fiscal year as determined prior to the adoption of Topic 842 under our previously designated capital and operating leases as disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, were as follows:
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Finance leases | Leases We lease office space and data centers under operating lease arrangements, which constitute the majority of our lease obligations. We also enter into finance lease agreements from time to time for certain computer equipment. For any lease with a lease term in excess of 12 months, the related lease assets and liabilities are recognized on our consolidated balance sheets as either operating or finance leases at the commencement of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine these components together and account for them as a single lease component for all classes of assets. Leases with a lease term of 12 months or less are not recorded on our consolidated balance sheets. Furthermore, we recognize lease expense for these leases on a straight-line basis over the lease term. Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We use a collateralized incremental borrowing rate based on the information available at the commencement date, including the lease term, in determining the present value of future payments. In calculating the incremental borrowing rates, we consider recent ratings from credit agencies and current lease demographic information. Our operating leases also typically require payment of real estate taxes, common area maintenance, insurance and other operating costs as well as payments that are adjusted based on a consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components. Operating lease assets also include prepaid lease payments and initial direct costs, and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term. As a strategic cost initiative in fiscal 2020 we committed to a course of action to adjust our facilities footprint in light of post-pandemic workforce patterns, including closing certain non-core offices and reducing office space in other locations to better align with anticipated needs. As a result of this initiative, we recorded a net impairment of $28.0 million on operating lease right-of-use assets. Prior to the adoption of ASC 842, these adjustments were described as restructuring expenses - facilities charges. See Note 11 for additional information regarding our restructuring and impairment charges. The following table presents the lease balances within the accompanying consolidated balance sheet as of September 30, 2020:
(*) Finance leases are recorded net of accumulated depreciation of $1.5 million. The components of our operating and finance lease expenses were as follows:
The following table presents weighted-average remaining lease term and weighted-average discount rates related to our operating and finance leases:
Supplemental cash flow information related to our operating and finance leases was as follows:
Future lease payments under our non-cancellable leases as of September 30, 2020 were as follows:
In accordance with the prior guidance—ASC 840, Leases—our leases were previously designated as either capital or operating. Previously designated capital leases are now considered finance leases under the new guidance, Topic 842. The designation of operating leases remains substantially unchanged under the new guidance. The future minimum lease payments by fiscal year as determined prior to the adoption of Topic 842 under our previously designated capital and operating leases as disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, were as follows:
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Commitments |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments In the ordinary course of business, we enter into contractual purchase obligations and other agreements that are legally binding and specify certain minimum payment terms. We are also a party to a management agreement with 23 of our executives providing for certain payments and other benefits in the event of a qualified change in control of FICO, coupled with a termination of the officer during the following year.
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Contingencies |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies We 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.
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Guarantees |
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Sep. 30, 2020 | |
Guarantees [Abstract] | |
Guarantees | Guarantees In the ordinary course of business, we are not subject to potential obligations under guarantees, except for standard indemnification and warranty provisions that are contained within many of our customer license and service agreements and certain supplier agreements, including underwriter agreements, as well as standard indemnification agreements that we have executed with certain of our officers and directors, and give rise only to the disclosure in the consolidated financial statements. In addition, we continue to monitor the conditions that are subject to the guarantees and indemnifications to identify whether it is probable that a loss has occurred, and would recognize any such losses under the guarantees and indemnifications when those losses are estimable. Indemnification and warranty provisions contained within our customer license and service agreements and certain supplier agreements are generally consistent with those prevalent in our industry. The duration of our product warranties generally does not exceed 90 days following delivery of our products. We have not incurred significant obligations under customer indemnification or warranty provisions historically and do not expect to incur significant obligations in the future. Accordingly, we do not maintain accruals for potential customer indemnification or warranty-related obligations. The indemnification agreements that we have executed with certain of our officers and directors would require us to indemnify such officers and directors in certain instances. We have not incurred obligations under these indemnification agreements historically and do not expect to incur significant obligations in the future. Accordingly, we do not maintain accruals for potential officer or director indemnification obligations. The maximum potential amount of future payments that we could be required to make under the indemnification provisions in our customer license and service agreements, and officer and director agreements is unlimited.
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Supplementary Financial Data (Unaudited) |
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Supplementary Financial Data (Unaudited) | Supplementary Financial Data (Unaudited) The following table presents selected unaudited consolidated financial results for each of the eight quarters in the two-year period ended September 30, 2020. In the opinion of management, this unaudited information has been prepared on the same basis as the audited information and includes all adjustments (consisting of only normal recurring adjustments, except as noted below) necessary for a fair statement of the consolidated financial information for the period presented.
(2) Earnings per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly per share amounts may not equal the totals for the respective years.
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Subsequent Events |
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Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In October 2020, we entered into a purchase agreement with Rackspace US, Inc. (“Rackspace”) pursuant to which Rackspace will provide to us primary cloud infrastructure services as a reseller of AWS. The initial term is a five-year period for which we have a minimum purchase obligation of $120 million over the first 3 years with the ability to roll up to $12 million into a fourth year if we spend less than the minimum commitment. The purpose of this agreement is to replace services that were previously provided directly through AWS.
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Nature of Business and Summary of Significant Accounting Policies (Policies) |
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Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation Effective October 1, 2019, we adopted ASU No. 2016-02, “Leases (Topic 842)” and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, “Topic 842”) using the modified retrospective approach, under which financial results reported in prior periods were not restated. As a result, the consolidated balance sheet as of September 30, 2020 is not comparable with that as of September 30, 2019. See our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 filed with the SEC on November 8, 2019 for lease policies that were in effect in prior periods before adoption of Topic 842. The consolidated financial statements include the accounts of FICO and its subsidiaries. All intercompany accounts and transactions have been eliminated.
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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 collectibility of accounts receivable; the appropriate levels of various accruals; variable considerations included in the transaction price 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. As the impact of the COVID-19 pandemic continues to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment. These estimates and assumptions may change in future periods and will be recognized in the consolidated financial statements as new events occur and additional information becomes known. To the extent our actual results differ materially from those estimates and assumptions, our future financial statements could be affected. For more information, see Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K.
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash in banks and investments with an original maturity of 90 days or less at time of purchase.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of certain of our financial instruments, including cash and cash equivalents, receivables, other current assets, accounts payable, accrued compensation and employee benefits, other accrued liabilities and amounts outstanding under our revolving line of credit, approximate their carrying amounts because of the short-term maturity of these instruments.
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Investments | Investments We categorize our investments in debt and equity instruments as trading, available-for-sale or held-to-maturity at the time of purchase. Trading securities are carried at fair value with unrealized gains or losses included in income (expense). Available-for-sale securities are carried at fair value measurements using quoted prices in active markets for identical assets or liabilities with unrealized gains or losses included in accumulated other comprehensive income (loss). Held-to-maturity securities are carried at amortized cost. Dividends and interest income are accrued as earned. Realized gains and losses are determined on a specific identification basis and are included in other income (expense). We review marketable securities for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recovered. We did not classify any securities as held-to-maturity or available-for-sale during each of the three years ended September 30, 2020, 2019 and 2018. Investments with remaining maturities over one year are classified as long-term investments. We have certain other investments for which there is no readily determinable fair value. These investments are recorded at cost, less impairment (if any) plus or minus adjustments for observable price changes. The carrying value of these investments was $1.1 million and $1.6 million at September 30, 2020 and 2019, respectively, and they are reported in other assets on our consolidated balance sheets. At September 30, 2020, we reviewed the carrying value of these investments and concluded that they were not impaired and as of that date, we were unable to exercise significant influence over the investees.
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Concentration of Risk | Concentration of Risk Financial instruments that potentially expose us to concentrations of risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable, which are generally not collateralized. Our policy is to place our cash, cash equivalents, and marketable securities with high quality financial institutions, commercial corporations and government agencies in order to limit the amount of credit exposure. We have established guidelines relative to diversification and maturities for maintaining safety and liquidity. We generally do not require collateral from our customers, but our credit extension and collection policies include analyzing the financial condition of potential customers, establishing credit limits, monitoring payments, and aggressively pursuing delinquent accounts. We maintain allowances for potential credit losses. A significant portion of our revenues are derived from the sales of products and services to the consumer credit and banking industries.
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Property and Equipment | Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and amortization. Major renewals and improvements are capitalized, while repair and maintenance costs are expensed as incurred. Assets acquired under capital leases are included in property and equipment with corresponding depreciation included in accumulated depreciation. Depreciation and amortization charges are calculated using the straight-line method over the following estimated useful lives:
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Internal-use Software | Internal-Use Software Costs incurred to develop internal-use software during the application development stage are capitalized and reported at cost. Application development stage costs generally include costs associated with internal-use software configuration, coding, installation and testing. Costs of significant upgrades and enhancements that result in additional functionality are also capitalized whereas costs incurred for maintenance and minor upgrades and enhancements are expensed as incurred. Capitalized costs are amortized using the straight-line method over two to three years. Software development costs required to be capitalized for internal-use software have not been material to date.
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Capitalized Software and Research and Development Costs | Capitalized Software and Research and Development Costs Software development costs relating to products to be sold in the normal course of business are expensed as incurred as research and development costs until technological feasibility is established. Technological feasibility for our products occurs approximately concurrently with the general release of our products; accordingly, we have not capitalized any development or production costs. Costs we incur to maintain and support our existing products after the general release of the product are expensed in the period they are incurred and included in research and development costs in our consolidated statements of income and comprehensive income.
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Goodwill and Intangible Assets | Goodwill, Acquisition Intangibles and Other Long-Lived Assets Goodwill represents the excess of cost over the fair value of identifiable assets acquired and liabilities assumed in business combinations. We assess goodwill for impairment for each of our reporting units on an annual basis during our fourth fiscal quarter using a July 1 measurement date unless circumstances require a more frequent measurement. We have determined that our reporting units are the same as our reportable segments. When evaluating goodwill for impairment, we may first perform an assessment qualitatively whether it is more likely than not that a reporting unit's carrying amount exceeds its fair value, referred to as a “step zero” approach. If, based on the review of the qualitative factors, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying value, we would bypass the two-step impairment test. Events and circumstances we consider in performing the “step zero” qualitative assessment include macro-economic conditions, market and industry conditions, internal cost factors, share price fluctuations, and the operational stability and the overall financial performance of the reporting units. If we conclude that it is more likely than not that a reporting unit's fair value is less than its carrying amount, we would perform the first step (“step one”) of the two-step impairment test and calculate the estimated fair value of the reporting unit by using discounted cash flow valuation models and by comparing our reporting units to guideline publicly-traded companies. These methods require estimates of our future revenues, profits, capital expenditures, working capital, and other relevant factors, as well as selecting appropriate guideline publicly-traded companies for each reporting unit. We estimate these amounts by evaluating historical trends, current budgets, operating plans, industry data, and other relevant factors. Alternatively, we may bypass the qualitative assessment described above for any reporting unit in any period and proceed directly to performing step one of the goodwill impairment test. For fiscal 2017, we elected to proceed directly to the step one quantitative analysis for all of our reporting units. There was a substantial excess of fair value over carrying value for each of our reporting units and we determined goodwill was not impaired for any of our reporting units for fiscal 2017. For fiscal 2018, 2019 and 2020, we performed a step zero qualitative analysis for our annual assessment of goodwill impairment. After evaluating and weighing all relevant events and circumstances, we concluded that it is not more likely than not that the fair value of any of our reporting units was less their carrying amounts. Consequently, we did not perform a step one quantitative analysis and determined goodwill was not impaired for any of our reporting units for fiscal 2018, 2019 and 2020. We amortize our finite-lived intangible assets which result from our acquisitions over the following estimated useful lives:
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Impairment of Long-Lived Assets | Our intangible assets that have finite useful lives and other long-lived assets are assessed for potential impairment when there is evidence that events and circumstances related to our financial performance and economic environment indicate the carrying amount of the assets may not be recoverable. When impairment indicators are identified, we test for impairment using undiscounted cash flows. If such tests indicate impairment, then we measure and record the impairment as the difference between the carrying value of the asset and the fair value of the asset. | ||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Contracts with Customers Our revenue is primarily derived from term-based or perpetual licensing of software and scoring products and solutions, and associated maintenance; software-as-a-service (“SaaS”) subscription services; scoring and credit monitoring services for consumers; and professional services. For contracts with customers that contain various combinations of products and services, we evaluate whether the products or services are distinct — distinct products or services will be accounted for as separate performance obligations, while non-distinct products or services are combined with others to form a single performance obligation. For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation on a relative SSP basis. Revenue is recognized when control of the promised goods or services is transferred to our customers. License revenue is derived from contracts in which we grant our direct customers or distributors the right to deploy or resell our software and scoring products and solutions on-premises. Our software offerings often include a perpetual or term-based license and post-contract support or maintenance, both of which generally represent distinct performance obligations and are accounted for separately. The transaction price is either in the form of a fixed consideration with separately stated prices for license and maintenance, a single subscription with license and maintenance bundled, or a usage-based royalty — sometimes subject to a guaranteed minimum — for the license and maintenance bundle. When the amount is in the form of a fixed consideration, including the guaranteed minimum in usage-based royalty, license revenue from distinct on-premises license is recognized at the point in time when the software or scoring solution is made available to the customer or distributor. Any royalties not subject to the guaranteed minimum or earned in excess of the minimum amount are recognized as transactional revenue when the subsequent sales or usage occurs. Revenue allocated to maintenance is generally recognized ratably over the contract period as customers simultaneously consume and receive benefits. In addition to usage-based royalty on our software and scoring products, transactional revenue is also derived from SaaS contracts in which we provide customers with access to and standard support for our software application either in the FICO® Analytic Cloud or Amazon Web Services (“AWS”), our primary cloud infrastructure provider, on a subscription basis. The transaction price typically includes a fixed consideration in the form of a guaranteed minimum that allows up to a certain level of usage and a variable consideration in the form of usage or transaction-based fees in excess of the minimum threshold; or usage or transaction-based variable amount not subject to a minimum threshold. We determined the nature of our SaaS arrangements is to provide continuous access to our hosted application in the cloud, i.e., a stand-ready obligation that comprises a series of distinct service periods (e.g., a series of distinct daily, monthly or annual periods of service). We estimate the total variable consideration at contract inception — subject to any constraints that may apply — and update the estimates as new information becomes available and recognize the amount ratably over the SaaS service period, unless we determine it is appropriate to allocate the variable amount to each distinct service period and recognize revenue as each distinct service period is performed. We also derive transactional revenue from credit scoring and monitoring services that provide consumers access to their credit reports and enable them to monitor their credit. These are provided as either a one-time or ongoing subscription service renewed monthly or annually, all with a fixed consideration. We determined the nature of the subscription service is a stand-ready obligation to generate credit reports, provide credit monitoring and other services for our customers, which comprises a series of distinct service periods (e.g., a series of distinct daily, monthly or annual periods of service). Revenue from one-time or monthly subscription services is recognized during the period when service is performed. Revenue from annual subscription services is recognized ratably over the subscription period. Professional services include software or SaaS implementation, consulting, model development, training services and premium cloud support. They are sold either standalone, or together with other products or services and generally represent distinct performance obligations. The transaction price can be a fixed amount or on a time and materials basis. Revenue on fixed-price services is recognized using an input method based on labor hours expended which we believe provides a faithful depiction of the transfer of services. Revenue on services provided on a time and materials basis is recognized applying the “right-to-invoice” practical expedient as the amount to which we have a right to invoice the customer corresponds directly with the value of our performance to the customer. In addition, we sell premium cloud support on a subscription basis for a fixed amount, and revenue is recognized ratably over the contract term. Significant Judgments Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct and should be accounted for separately may require significant judgment. Specifically, when implementation service is included in the original software or SaaS offerings, judgment is required to determine if the implementation service significantly modifies or customizes the software or SaaS service in such a way that the risks of providing it and the customization service are inseparable. In rare instances, contracts may include significant modification or customization of the software of SaaS service and will result in the combination of software or SaaS service and implementation service as one performance obligation. We determine the SSPs using data from our historical standalone sales, or, in instances where such information is not available (such as when we do not sell the product or service separately), we consider factors such as the stated contract prices, our overall pricing practices and objectives, go-to-market strategy, size and type of the transactions, and effects of the geographic area on pricing, among others. When the selling price of a product or service is highly variable, we may use the residual approach to determine the SSP of that product or service. Significant judgment may be required to determine the SSP for each distinct performance obligation when it involves the consideration of many market conditions and entity-specific factors discussed above. Significant judgment may be required to determine the timing of satisfaction of a performance obligation in certain professional services contracts with a fixed consideration, in which we measure progress using an input method based on labor hours expended. In order to estimate the total hours of the project, we make assumptions about labor utilization, efficiency of processes, the customer’s specification and IT environment, among others. For certain complex projects, due to the risks and uncertainties inherent with the estimation process and factors relating to the assumptions, actual progress may differ due to the change in estimated total hours. Adjustments to estimates are made in the period in which the facts requiring such revisions become known and, accordingly, recognized revenues are subject to revisions as the contract progresses to completion. Capitalized Commission Costs We capitalize incremental commission fees paid as a result of obtaining customer contracts. Capitalized commission costs, which are recorded in other assets within the accompanying consolidated balance sheets, were $38.6 million and $33.7 million at September 30, 2020 and 2019, respectively. Capitalized commission costs are amortized on a straight-line basis over ten years — determined using a portfolio approach — based on the transfer of goods or services to which the assets relate, taking into consideration both the initial and future contracts as we do not typically pay a commission on a contract renewal. The amortization costs are included in selling, general, and administrative expenses of our consolidated statements of income and comprehensive income. The amount of amortization was $5.7 million, $5.0 million and $4.5 million during the years ended September 30, 2020, 2019 and 2018, respectively. There was no impairment loss in relation to the costs capitalized. We apply a practical expedient to recognize the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less. These costs are recorded within selling, general, and administrative expenses. See Note 15 for our discussion on disaggregation of revenues, and Note 16 for contract balances and performance obligations.
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Business Combinations | Business Combinations Accounting for our acquisitions requires us to recognize, separately from goodwill, the assets acquired and the liabilities assumed at their acquisition-date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the net of the acquisition-date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of income and comprehensive income. Accounting for business combinations requires our management to make significant estimates and assumptions, especially at the acquisition date, including our estimates for intangible assets, contractual obligations assumed, pre-acquisition contingencies and contingent consideration, where applicable. If we cannot reasonably determine the fair value of a pre-acquisition contingency (non-income tax related) by the end of the measurement period, we will recognize an asset or a liability for such pre-acquisition contingency if: (i) it is probable that an asset existed or a liability had been incurred at the acquisition date and (ii) the amount of the asset or liability can be reasonably estimated. Although we believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the acquired companies and are inherently uncertain. Subsequent to the measurement period, changes in our estimates of such contingencies will affect earnings and could have a material effect on our consolidated results of operations and financial position. Examples of critical estimates in valuing certain of the intangible assets we have acquired include but are not limited to: (i) future expected cash flows from software license sales, support agreements, consulting contracts, other customer contracts and acquired developed technologies and patents; (ii) expected costs to develop the in-process research and development into commercially viable products and estimated cash flows from the projects when completed; and (iii) the acquired company’s brand and competitive position, as well as assumptions about the period of time the acquired brand will continue to be used in the combined company’s product portfolio. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates or actual results. In addition, uncertain tax positions and tax related valuation allowances assumed in connection with a business combination are initially estimated as of the acquisition date. We reevaluate these items quarterly based upon facts and circumstances that existed as of the acquisition date with any adjustments to our preliminary estimates being recorded to goodwill provided that we are within the measurement period. Subsequent to the measurement period or our final determination of the tax allowance’s or contingency’s estimated value, whichever comes first, changes to these uncertain tax positions and tax related valuation allowances will affect our provision for income taxes in our consolidated statements of income and comprehensive income and could have a material impact on our consolidated results of operations and financial position.
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Income Taxes | Income Taxes We estimate our income taxes based on the various jurisdictions where we conduct business, which involves significant judgment in determining our income tax provision. We estimate our current tax liability using currently enacted tax rates and laws and assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities recorded on our consolidated balance sheets using the currently enacted tax rates and laws that will apply to taxable income for the years in which those tax assets are expected to be realized or settled. We then assess the likelihood our deferred tax assets will be realized and to the extent we believe realization is not more likely than not, we establish a valuation allowance. When we establish a valuation allowance or increase this allowance in an accounting period, we record a corresponding income tax expense in our consolidated statements of income and comprehensive income. In assessing the need for the valuation allowance, we consider future taxable income in the jurisdictions we operate; our ability to carry back tax attributes to prior years; an analysis of our deferred tax assets and the periods over which they will be realizable; and ongoing prudent and feasible tax planning strategies. An increase in the valuation allowance would have an adverse impact, which could be material, on our income tax provision and net income in the period in which we record the increase. We recognize and measure benefits for uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the technical merits of the tax position indicate it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount more than 50% likely of being realized upon settlement. Significant judgment is required to evaluate uncertain tax positions and they are evaluated on a quarterly basis. Our evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results. A description of our accounting policies associated with tax-related contingencies and valuation allowances assumed as part of a business combination is provided under “Business Combinations” above.
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Earnings per Share | Earnings per Share Basic earnings per share are computed on the basis of the weighted-average number of common shares outstanding during the period under measurement. Diluted earnings per share are based on the weighted-average number of common shares outstanding and potential common shares. Potential common shares result from the assumed exercise of outstanding stock options or other potentially dilutive equity instruments, when they are dilutive under the treasury stock method.
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Comprehensive Income | Comprehensive Income Comprehensive income is the change in our equity (net assets) during each period from transactions and other events and circumstances from non-owner sources. It includes net income, foreign currency translation adjustments and unrealized gains and losses on our investments in marketable securities, net of tax.
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Foreign Currency and Derivative Financial Instruments | Foreign Currency and Derivative Financial Instruments We have determined that the functional currency of each foreign operation is the local currency. Assets and liabilities denominated in their local foreign currencies are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates of exchange prevailing during the period. Foreign currency translation adjustments are accumulated as a separate component of consolidated stockholders’ equity. We utilize derivative instruments to manage market risks associated with fluctuations in certain foreign currency exchange rates as they relate to specific balances of accounts receivable and cash denominated in foreign currencies. We principally utilize foreign currency forward contracts to protect against market risks arising in the normal course of business. Our policies prohibit the use of derivative instruments for the sole purpose of trading for profit on price fluctuations or to enter into contracts that intentionally increase our underlying exposure. All of our foreign currency forward contracts have maturity periods of less than three months. At the end of the reporting period, foreign-currency-denominated assets and liabilities are remeasured into the functional currencies of the reporting entities at current market rates. The change in value from this remeasurement is reported as a foreign exchange gain or loss for that period in other income, net in the accompanying consolidated statements of income and comprehensive income.
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Share-Based Compensation | Share-Based Compensation We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense, net of estimated forfeitures, over the vesting or service period, as applicable, of the stock award (generally three to four years).
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Advertising and Promotion Costs | Advertising and Promotion Costs Advertising and promotion costs are expensed as incurred and are included in selling, general and administrative expenses in the accompanying consolidated statements of income and comprehensive income.
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New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the FASB issued Topic 842, which requires the recognition of operating lease assets and lease liabilities on the balance sheet. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Under the new standard, disclosures are required to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. In the first quarter of fiscal 2020, we adopted Topic 842 using the “Comparatives Under 840 Option” approach to transition. In accordance with the standard, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Topic 842 provided a package of practical expedients that allow an entity to not reassess (1) whether any expired or existing contracts contain a lease, (2) the lease classification of any expired or existing lease, and (3) initial direct costs for any existing leases. We elected to apply the package of practical expedients, and did not elect the hindsight practical expedient in determining the lease term for existing leases as of October 1, 2019. Adoption of Topic 842 did not result in the recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The most significant impact of adoption was the recognition of operating lease assets and operating lease liabilities of $89.8 million and $98.9 million, respectively, while our accounting for existing capital leases (now referred to as finance leases) remained substantially unchanged. We expect the impact of adoption to be immaterial to our consolidated statements of income and comprehensive income and consolidated statements of cash flows on an ongoing basis. As part of our adoption, we also modified our control procedures and processes, none of which materially affected our internal control over financial reporting. See Note 17 for additional information regarding our accounting policy for leases and additional disclosures. Recent Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-15, “Intangibles—Goodwill and Other (Topic 350): Internal-Use Software.” ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, which means that it will be effective for our fiscal year beginning October 1, 2020. We do not believe that adoption of ASU 2018-15 will have a significant impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” and subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, which means it will be effective for our fiscal year beginning October 1, 2020. We do not believe that adoption of Topic 326 will have a significant impact on our consolidated financial statements. We do not expect that any other recently issued accounting pronouncements will have a significant effect on our financial statements.
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Leases policy | We lease office space and data centers under operating lease arrangements, which constitute the majority of our lease obligations. We also enter into finance lease agreements from time to time for certain computer equipment. For any lease with a lease term in excess of 12 months, the related lease assets and liabilities are recognized on our consolidated balance sheets as either operating or finance leases at the commencement of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine these components together and account for them as a single lease component for all classes of assets. Leases with a lease term of 12 months or less are not recorded on our consolidated balance sheets. Furthermore, we recognize lease expense for these leases on a straight-line basis over the lease term. Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We use a collateralized incremental borrowing rate based on the information available at the commencement date, including the lease term, in determining the present value of future payments. In calculating the incremental borrowing rates, we consider recent ratings from credit agencies and current lease demographic information. Our operating leases also typically require payment of real estate taxes, common area maintenance, insurance and other operating costs as well as payments that are adjusted based on a consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components. Operating lease assets also include prepaid lease payments and initial direct costs, and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.
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Nature of Business and Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||
Estimated Useful Life of Property and Equipment | Depreciation and amortization charges are calculated using the straight-line method over the following estimated useful lives:
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Estimated Useful Life of Definite-Lived Intangible Assets | We amortize our finite-lived intangible assets which result from our acquisitions over the following estimated useful lives:
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Cash, Cash Equivalents and Marketable Securities Available for Sale (Tables) |
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Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Cash, Cash Equivalents and Marketable Securities Available for Sale | The following is a summary of cash, cash equivalents and marketable securities at September 30, 2020 and 2019:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis | The following table represents financial assets that we measured at fair value on a recurring basis at September 30, 2020 and 2019:
(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 long-term marketable securities on our consolidated balance sheets at September 30, 2020 and 2019.
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Derivative Financial Instruments (Tables) |
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Schedule of Notional Amounts of Outstanding Derivative Positions | The following tables summarize our outstanding foreign currency forward contracts, by currency, at September 30, 2020 and 2019:
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | These amounts are shown below for the years ended September 30, 2020, 2019 and 2018:
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Goodwill and Intangible Assets (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets Subject to Amortization | Intangible assets that are subject to amortization consisted of the following at September 30, 2020 and 2019:
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Schedule of Amortization Expense | Amortization expense consisted of the following:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future intangible asset amortization expense associated with intangible assets existing at September 30, 2020, was as follows (in thousands):
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Schedule of Goodwill | The following table summarizes changes to goodwill during fiscal 2020 and 2019, both in total and as allocated to our operating segments. We have not recognized any goodwill impairment losses to date.
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Composition of Certain Financial Statement Captions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | The following table presents the composition of property and equipment, net and other assets at September 30, 2020 and 2019:
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Senior Notes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes | The 2010 Senior Notes were issued in four series as follows:
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Principal Amounts Carrying amounts and Fair Values of Senior Notes | The following table presents the carrying amounts and fair values for the Senior Notes at September 30, 2020 and 2019:
(*) The carrying value of the Senior Notes was reduced by the net debt issuance costs of $10.6 million and $5.2 million at September 30, 2020 and 2019, respectively.
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Future Principal Payments For the Senior Notes | Future principal payments for the Senior Notes are as follows (in thousands):
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Restructuring Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs | The following tables summarize our restructuring accruals associated with the employee separation actions. The current portion and non-current portion were recorded in other accrued liabilities and other liabilities, respectively, within the accompanying consolidated balance sheets.
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income Taxes | The provision for income taxes was as follows during fiscal 2020, 2019 and 2018:
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Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities at September 30, 2020 and 2019 were as follows:
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Reconciliation Between Federal Statutory Income Tax Rate and Effective Tax Rate | A reconciliation of the provision for income taxes, with the amount computed by applying the U.S. federal statutory income tax rate (21% in each of fiscal 2020 and fiscal 2019, and 24.5% in fiscal 2018) to income before provision for income taxes for fiscal 2020, 2019 and 2018 is shown below:
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Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
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Stock-Based Employee Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assumptions Used to Estimate Fair Value of Stock Options | We used the following assumptions to estimate the fair value of our stock options during fiscal 2020, 2019 and 2018:
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Summary of Option Activity | The following table summarizes option activity during fiscal 2020:
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Summary of Restricted Stock Unit and Market Stock Unit Activity | The following table summarizes the MSUs activity during fiscal 2020:
The following table summarizes the RSUs activity during fiscal 2020:
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Summary of Performance Stock Unit Activity | The following table summarizes the PSUs activity during fiscal 2020:
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Assumptions Used to Estimate Fair Value of Market Stock Units | We used the following assumptions to estimate the fair value of our MSUs during fiscal 2020, 2019 and 2018:
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Earnings per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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”) during fiscal 2020, 2019 and 2018:
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following tables summarize segment information for fiscal 2020, 2019 and 2018:
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Disaggregation of Revenue | Information about disaggregated revenue by product deployment methods was as follows:
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Revenues and Percentage of Revenues by Customers | Revenue generated from a single customer or a group of customers which represented 10% or greater of total revenue are summarized below for fiscal 2020, 2019 and 2018:
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Property and Equipment Net on Geographical Basis | Our property and equipment, net, on a geographical basis are summarized below at September 30, 2020 and 2019:
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Contract Balances and Performance Obligations (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables | Receivables at September 30, 2020 and 2019 consisted of the following:
(*) Short-term receivables and long-term receivables were recorded in accounts receivable, net and other assets, respectively, within the accompanying consolidated balance sheets.
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Accounts Receivable, Allowance for Credit Loss | Activity in the allowance for doubtful accounts was as follows:
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Contract with Customer, Asset and Liability | Significant changes in the deferred revenues balances are as follows:
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operating & Finance Lease Assets and Liabilities | The following table presents the lease balances within the accompanying consolidated balance sheet as of September 30, 2020:
(*) Finance leases are recorded net of accumulated depreciation of $1.5 million.
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Schedule of Lease Expenses, Weighted Average Lease Term and Weighted Average Discount Rates, and Supplemental Cash Flow Information | The components of our operating and finance lease expenses were as follows:
The following table presents weighted-average remaining lease term and weighted-average discount rates related to our operating and finance leases:
Supplemental cash flow information related to our operating and finance leases was as follows:
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Schedule of Future Lease Payments, Operating Leases | Future lease payments under our non-cancellable leases as of September 30, 2020 were as follows:
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Schedule of Future Lease Payments, Finance Leases | Future lease payments under our non-cancellable leases as of September 30, 2020 were as follows:
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Schedule of Future Minimum Rental Payments, Operating Leases | The future minimum lease payments by fiscal year as determined prior to the adoption of Topic 842 under our previously designated capital and operating leases as disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, were as follows:
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Schedule of Future Minimum Lease Payments, Capital Leases | The future minimum lease payments by fiscal year as determined prior to the adoption of Topic 842 under our previously designated capital and operating leases as disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, were as follows:
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Supplementary Financial Data (Unaudited) (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Unaudited Consolidated Financial Results | The following table presents selected unaudited consolidated financial results for each of the eight quarters in the two-year period ended September 30, 2020. In the opinion of management, this unaudited information has been prepared on the same basis as the audited information and includes all adjustments (consisting of only normal recurring adjustments, except as noted below) necessary for a fair statement of the consolidated financial information for the period presented.
(2) Earnings per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly per share amounts may not equal the totals for the respective years.
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Nature of Business and Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Property, Plant and Equipment [Line Items] | |||
Other investments | $ 1,060,000 | $ 1,643,000 | |
Depreciation and amortization, property and equipment | 23,500,000 | 24,200,000 | $ 22,600,000 |
Foreign exchange gains (losses) | 1,000,000.0 | 0.0 | 400,000 |
Advertising and promotion costs | 8,700,000 | 3,600,000 | 4,100,000 |
Capitalized Contract Cost, Impairment Loss | $ 0 | $ 0 | $ 0 |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Stock option awards vesting period | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Stock option awards vesting period | 4 years | ||
Software Development | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful life | 2 years | ||
Software Development | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful life | 3 years |
Nature of Business and Summary of Significant Accounting Policies - Revenues Related (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Revenue from Contract with Customer [Abstract] | |||
Capitalized Contract Cost, Net, Noncurrent | $ 38,579,000 | $ 33,700,000 | |
Capitalized Contract Cost, Amortization Period | 10 years | ||
Capitalized Contract Cost, Amortization | $ 5,700,000 | 5,000,000.0 | $ 4,500,000 |
Capitalized Contract Cost, Impairment Loss | $ 0 | $ 0 | $ 0 |
Nature of Business and Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Oct. 01, 2019 |
|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Document Period End Date | Sep. 30, 2020 | |
Total reported lease liability | $ 95,994 | |
Operating lease, right-of-use asset | $ 57,656 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Total reported lease liability | $ 98,900 | |
Operating lease, right-of-use asset | $ 89,800 |
Business Combinations - Additional Information (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020
USD ($)
business
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
business
|
|
Business Acquisition [Line Items] | |||
Number of businesses acquired | business | 0 | 0 | |
Goodwill | $ 812,364 | $ 803,542 | $ 800,890 |
EZMCOM | |||
Business Acquisition [Line Items] | |||
Common stock acquired | 100.00% | ||
Cash consideration | $ 18,600 | ||
Intangible assets acquired | $ 6,000 | ||
Weighted average useful life | 4 years 8 months 23 days | ||
Goodwill | $ 11,200 |
Fair Value Measurements - Financial Assets Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands |
Sep. 30, 2020 |
Sep. 30, 2019 |
||||
---|---|---|---|---|---|---|
Assets: | ||||||
Total | $ 60,788 | $ 49,123 | ||||
Cash | ||||||
Assets: | ||||||
Cash equivalents | [1] | 35,275 | 28,901 | |||
Marketable securities | ||||||
Assets: | ||||||
Debt Securities, Trading, and Equity Securities, FV-NI | [2] | 25,513 | 20,222 | |||
Active Markets for Identical Instruments (Level 1) | ||||||
Assets: | ||||||
Total | 60,788 | 49,123 | ||||
Active Markets for Identical Instruments (Level 1) | Cash | ||||||
Assets: | ||||||
Cash equivalents | [1] | 35,275 | 28,901 | |||
Active Markets for Identical Instruments (Level 1) | Marketable securities | ||||||
Assets: | ||||||
Debt Securities, Trading, and Equity Securities, FV-NI | [2] | $ 25,513 | $ 20,222 | |||
|
Fair Value Measurements - Financial Assets Measured at Fair Value on Recurring Basis - Additional Information (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash deposits | $ 122.1 | $ 77.5 |
Derivative Financial Instruments - Additional Information (Details) - USD ($) |
12 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Derivative [Line Items] | ||
Short-term forward contracts, average maturities at inception | 3 months | |
Foreign Currency Forward Contracts | ||
Derivative [Line Items] | ||
Forward foreign currency contracts fair value | $ 0 | $ 0 |
Derivative Financial Instruments - Gains Losses on Derivative Financial Instruments Recorded in Consolidated Statements of Income (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Foreign Currency Forward Contracts | |||
Derivative [Line Items] | |||
Loss on foreign currency forward contracts | $ 347 | $ 896 | $ 476 |
Goodwill and Intangible Assets - Intangible Assets Subject to Amortization (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Amortization of intangible assets | $ 4,993 | $ 6,126 | $ 6,594 | ||||||||
Gross Carrying Amount | $ 103,446 | $ 113,807 | 103,446 | 113,807 | |||||||
Accumulated Amortization | (94,210) | (99,668) | (94,210) | (99,668) | |||||||
Total | 9,236 | 14,139 | 9,236 | 14,139 | |||||||
Completed technology | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Amortization of intangible assets | 300 | $ 400 | $ 500 | $ 600 | 500 | $ 500 | $ 500 | $ 500 | 1,766 | 1,974 | 2,380 |
Gross Carrying Amount | 83,764 | 82,724 | 83,764 | 82,724 | |||||||
Accumulated Amortization | (80,136) | (77,331) | (80,136) | (77,331) | |||||||
Total | 3,628 | 5,393 | $ 3,628 | $ 5,393 | |||||||
Average Life | 5 years | 5 years | |||||||||
Customer contracts and relationships | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Amortization of intangible assets | $ 2,927 | $ 4,098 | 4,214 | ||||||||
Gross Carrying Amount | 19,332 | 30,583 | 19,332 | 30,583 | |||||||
Accumulated Amortization | (13,870) | (22,283) | (13,870) | (22,283) | |||||||
Total | 5,462 | 8,300 | $ 5,462 | $ 8,300 | |||||||
Average Life | 9 years | 8 years | |||||||||
Trade names | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Amortization of intangible assets | $ 125 | $ 25 | 0 | ||||||||
Gross Carrying Amount | 0 | 150 | 0 | 150 | |||||||
Accumulated Amortization | 0 | (25) | 0 | (25) | |||||||
Total | 0 | 125 | $ 0 | $ 125 | |||||||
Average Life | 0 years | 1 year | |||||||||
Non-compete agreements | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Amortization of intangible assets | $ 175 | $ 29 | $ 0 | ||||||||
Gross Carrying Amount | 350 | 350 | 350 | 350 | |||||||
Accumulated Amortization | (204) | (29) | (204) | (29) | |||||||
Total | $ 146 | $ 321 | $ 146 | $ 321 | |||||||
Average Life | 2 years | 2 years |
Goodwill and Intangible Assets - Amortization Expense Associated with Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense of intangible assets | $ 4,993 | $ 6,126 | $ 6,594 |
Goodwill and Intangible Assets - Estimated Future Intangible Asset Amortization Expense (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Estimated future intangible asset amortization expense | ||
2018 | $ 3,646 | |
2019 | 3,356 | |
2020 | 1,317 | |
2021 | 917 | |
2022 | 0 | |
Thereafter | 0 | |
Total | $ 9,236 | $ 14,139 |
Goodwill and Intangible Assets - Summary of Changes to Goodwill (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Goodwill [Roll Forward] | ||
Beginning Balance | $ 803,542 | $ 800,890 |
Goodwill, Acquired During Period | 11,233 | |
Foreign currency translation adjustment | 8,822 | (8,581) |
Ending Balance | 812,364 | 803,542 |
Applications | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 588,614 | 585,161 |
Goodwill, Acquired During Period | 11,233 | |
Foreign currency translation adjustment | 8,190 | (7,780) |
Ending Balance | 596,804 | 588,614 |
Scores | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 146,648 | 146,648 |
Goodwill, Acquired During Period | 0 | |
Foreign currency translation adjustment | 0 | 0 |
Ending Balance | 146,648 | 146,648 |
Decision Management Software | ||
Goodwill [Roll Forward] | ||
Beginning Balance | 68,280 | 69,081 |
Goodwill, Acquired During Period | 0 | |
Foreign currency translation adjustment | 632 | (801) |
Ending Balance | $ 68,912 | $ 68,280 |
Composition of Certain Financial Statement Captions - Property and Equipment (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Property and equipment: | ||
Data processing equipment and software | $ 108,913 | $ 110,874 |
Office furniture and equipment | 20,478 | 21,443 |
Leasehold improvements | 25,239 | 33,360 |
Equipment under capital leases | 6,489 | 6,398 |
Less: accumulated depreciation and amortization | (114,700) | (119,048) |
Total | 46,419 | 53,027 |
Accounts Receivable, after Allowance for Credit Loss, Noncurrent | 54,074 | 34,370 |
Capitalized Contract Cost, Net, Noncurrent | 38,579 | 33,700 |
Prepaid Expense | 12,632 | 11,093 |
Other assets | $ 105,285 | $ 79,163 |
Composition of Certain Financial Statement Captions - Additional Detail (Details) $ in Millions |
12 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Impairment or Disposal Disclosure | $ 5.2 |
Senior Notes - Additional Information (Details) |
Sep. 30, 2020
USD ($)
|
Dec. 06, 2019
USD ($)
|
Sep. 30, 2019
USD ($)
|
May 08, 2018
USD ($)
|
Jul. 14, 2010
USD ($)
Contract
|
---|---|---|---|---|---|
Debt Disclosure [Line Items] | |||||
Debt issuance costs | $ 10,600,000 | $ 5,200,000 | |||
July 2010 Senior Notes | |||||
Debt Disclosure [Line Items] | |||||
Senior Notes issued in a private placement to a group of institutional investors | $ 245,000,000 | ||||
Number of series of Senior Notes issued | Contract | 4 | ||||
May 2018 Senior Notes | |||||
Debt Disclosure [Line Items] | |||||
Senior Notes issued in a private placement to a group of institutional investors | $ 400,000,000 | ||||
December 2019 Senior Notes | |||||
Debt Disclosure [Line Items] | |||||
Senior Notes issued in a private placement to a group of institutional investors | $ 350,000,000 |
Senior Notes - Summary of Senior Notes (Details) - USD ($) $ in Millions |
Dec. 06, 2019 |
May 08, 2018 |
Jul. 14, 2010 |
---|---|---|---|
May 2018 Senior Notes | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.25% | ||
Maturity date | May 15, 2026 | ||
Series E | |||
Debt Instrument [Line Items] | |||
Amount | $ 60.0 | ||
Interest rate | 4.72% | ||
Maturity date | Jul. 14, 2016 | ||
Series F | |||
Debt Instrument [Line Items] | |||
Amount | $ 72.0 | ||
Interest rate | 5.04% | ||
Maturity date | Jul. 14, 2017 | ||
Series G | |||
Debt Instrument [Line Items] | |||
Amount | $ 28.0 | ||
Interest rate | 5.42% | ||
Maturity date | Jul. 14, 2019 | ||
Series H | |||
Debt Instrument [Line Items] | |||
Amount | $ 85.0 | ||
Interest rate | 5.59% | ||
Maturity date | Jul. 14, 2020 | ||
December 2019 Senior Notes | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.00% | ||
Maturity date | Jun. 15, 2028 |
Senior Notes - Principal Amounts Carrying Amounts and Fair Values of Senior Notes (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Carrying amounts | $ 750,000 | $ 485,000 |
Fair value | 800,750 | 514,121 |
Debt issuance costs | 10,600 | 5,200 |
July 2010 Senior Notes | ||
Debt Instrument [Line Items] | ||
Carrying amounts | 0 | 85,000 |
Fair value | 0 | 86,121 |
May 2018 Senior Notes | ||
Debt Instrument [Line Items] | ||
Carrying amounts | 400,000 | 400,000 |
Fair value | 442,000 | 428,000 |
December 2019 Senior Notes | ||
Debt Instrument [Line Items] | ||
Carrying amounts | 350,000 | 0 |
Fair value | $ 358,750 | $ 0 |
Senior Notes - Future Principal Payments For Senior Notes (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2019 | $ 0 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 750,000 |
Total | $ 750,000 |
Employee Benefit Plans - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Retirement Benefits [Abstract] | |||
Eligible employees contribution to 401(k) plan (up to 25%) | 25.00% | ||
Employer contributions into 401(k) plans | $ 10.1 | $ 10.3 | $ 8.8 |
Employee incentive plans expenses | $ 60.6 | $ 57.5 | $ 48.4 |
Restructuring Expenses - Additional Information (Details) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020
USD ($)
position
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2018
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and impairment charges | $ 45,029,000 | $ 0 | $ 0 |
Impairment loss on operating lease assets | 28,016,000 | ||
Property, Plant and Equipment Impairment or Disposal Disclosure | $ 5,200,000 | ||
Number of positions reduced | position | 209 | ||
Restructuring charges | $ 11,768,000 | 0 | $ 0 |
Facilities charges | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 0 | $ 0 | |
Employee separation | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 11,768,000 |
Restructuring Expenses - Summary of Restructuring Accruals and Certain Facility Closures (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 1,378,000 | ||
Expense additions | 11,768,000 | $ 0 | $ 0 |
Cash payments | (3,577,000) | ||
Accrual adjustments | (1,378,000) | ||
Ending balance | 8,191,000 | 1,378,000 | |
Less: current portion | 8,191,000 | 1,378,000 | 3,850,000 |
Non-current | 0 | 0 | 1,378,000 |
Facilities charges | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 1,378,000 | 5,228,000 | |
Expense additions | 0 | 0 | |
Cash payments | 0 | (3,850,000) | |
Accrual adjustments | (1,378,000) | 0 | |
Ending balance | 0 | 1,378,000 | $ 5,228,000 |
Employee separation | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0 | ||
Expense additions | 11,768,000 | ||
Cash payments | (3,577,000) | ||
Accrual adjustments | 0 | ||
Ending balance | 8,191,000 | $ 0 | |
Accounting Standards Update 2016-02 | Facilities charges | |||
Restructuring Reserve [Roll Forward] | |||
Accrual adjustments | $ 1,400,000 |
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Current: | |||
Federal | $ 14,566 | $ 1,299 | $ 8,071 |
State | 2,180 | (423) | 2,236 |
Foreign | 12,482 | 15,371 | 9,559 |
Current income tax | 29,228 | 16,247 | 19,866 |
Deferred: | |||
Federal | (8,575) | 7,003 | 13,987 |
State | (957) | 947 | 132 |
Foreign | 893 | (249) | (3,535) |
Deferred income taxes | (8,639) | 7,701 | 10,584 |
Total provision | $ 20,589 | $ 23,948 | $ 30,450 |
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Deferred tax assets: | ||
Loss and credit carryforwards | $ 31,015 | $ 26,702 |
Compensation benefits | 29,640 | 23,931 |
Operating lease liabilities | 21,827 | 0 |
Other assets | 9,000 | 9,393 |
Deferred tax assets, gross | 91,482 | 60,026 |
Less valuation allowance | (24,563) | (19,231) |
Total deferred tax assets | 66,919 | 40,795 |
Deferred tax liabilities: | ||
Intangible assets | (14,715) | (15,114) |
Deferred commission | (9,027) | (7,920) |
Property and equipment | (3,135) | (3,511) |
Operating lease right-of-use assets | (13,719) | 0 |
Other liabilities | (11,694) | (8,244) |
Total deferred tax liabilities | (52,290) | (34,789) |
Deferred tax assets, net | $ 14,629 | $ 6,006 |
Income Taxes - Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Gross unrecognized tax benefits at beginning of year | $ 5,834 | $ 6,113 | $ 6,480 |
Gross increases for tax positions in prior years | 883 | 509 | 404 |
Gross decreases for tax positions in prior years | (65) | (611) | 0 |
Gross increases based on tax positions related to the current year | 2,260 | 1,439 | 1,625 |
Decreases for settlements and payments | 0 | (637) | 0 |
Decreases due to statute expiration | (918) | (979) | (2,396) |
Gross unrecognized tax benefits at end of year | $ 7,994 | $ 5,834 | $ 6,113 |
Stock-Based Employee Benefit Plans - Assumptions Used to Estimate Fair Value of Stock Options (Details) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average volatility | |||
Equity Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average expected term (years) | 4 years 5 months 15 days | 4 years 3 months 3 days | 4 years 9 months 10 days |
Expected volatility (range), minimum | 30.00% | 31.10% | 33.60% |
Expected volatility (range), maximum | 35.90% | 32.40% | 35.10% |
Weighted average volatility | 30.60% | 32.20% | 34.60% |
Risk free interest rate, minimum | 0.36% | 2.50% | 2.03% |
Risk free interest rate, maximum | 1.68% | 2.68% | 2.65% |
Weighted average expected dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Employee Benefit Plans - Assumptions Used to Estimate Fair Value of Market Stock Units (Details) - Market stock units (MSUs) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility in FICO’s stock price | 25.20% | 24.60% | 24.60% |
Expected volatility in Russell 3000 Index | 12.90% | 12.80% | 12.70% |
Correlation between FICO and the Russell 3000 Index | 64.00% | 66.60% | 63.10% |
Risk-free interest rate | 1.67% | 2.73% | 1.92% |
Average expected dividend yield | 0.00% | 0.00% | 0.00% |
Stock-Based Employee Benefit Plans - Summary of ESPP activities (Details) - $ / shares |
12 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
ESPP, Discount from Market Price, Purchase Date | 15.00% | |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
ESPP, Discount from Market Price, Purchase Date | 85.00% | |
ESPP, Shares Issued in Period | 50,298 | 0 |
ESPP, Per Share Weighted Average Price of Shares Purchased | $ 334.21 |
Earnings per Share - Reconciliation of Numerators and Denominators of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|||||||||||
Numerator for basic and diluted earnings per share | |||||||||||||||||||||
Net income | $ 59,126 | $ 64,076 | $ 58,288 | $ 54,921 | $ 54,584 | $ 64,152 | $ 33,381 | $ 40,007 | $ 236,411 | $ 192,124 | $ 126,482 | ||||||||||
Denominator — share: | |||||||||||||||||||||
Basic weighted-average shares (in shares) | 29,045 | 29,005 | 29,194 | 29,025 | 28,918 | 28,967 | 29,074 | 28,961 | 29,067 | 28,980 | 29,711 | ||||||||||
Effect of dilutive securities (in shares) | 865 | 1,314 | 1,469 | ||||||||||||||||||
Diluted weighted-average shares (in shares) | 29,833 | 29,744 | 29,985 | 30,169 | 30,290 | 30,292 | 30,259 | 30,336 | 29,932 | 30,294 | 31,180 | ||||||||||
Earnings per share: | |||||||||||||||||||||
Basic earnings per share (in dollars per share) | $ 2.04 | [1] | $ 2.21 | [1] | $ 2.00 | [1] | $ 1.89 | [1] | $ 1.89 | [1] | $ 2.21 | [1] | $ 1.15 | [1] | $ 1.38 | [1] | $ 8.13 | $ 6.63 | $ 4.26 | ||
Diluted earnings per share (in dollars per share) | $ 1.98 | [1] | $ 2.15 | [1] | $ 1.94 | [1] | $ 1.82 | [1] | $ 1.80 | [1] | $ 2.12 | [1] | $ 1.10 | [1] | $ 1.32 | [1] | $ 7.90 | $ 6.34 | $ 4.06 | ||
|
Segment Information - Additional Information (Details) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020
Segment
customer
|
Sep. 30, 2019
customer
|
Sep. 30, 2018 |
|
Segment Reporting Information [Line Items] | |||
Number of reportable segments | Segment | 3 | ||
Revenue Benchmark | Product Concentration Risk | Applications | Fraud Solutions | |||
Segment Reporting Information [Line Items] | |||
Concentration Risk, Percentage | 15.00% | 18.00% | 17.00% |
Revenue Benchmark | Product Concentration Risk | Applications | Customer Cummunication Services | |||
Segment Reporting Information [Line Items] | |||
Concentration Risk, Percentage | 8.00% | 9.00% | 10.00% |
Revenue Benchmark | Customer Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration Risk, Percentage | 100.00% | 100.00% | 100.00% |
Accounts Receivable | Customer Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk, number of customers | customer | 0 | 0 |
Contract Balances and Performance Obligations - Receivables (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |||
Billed Receivables | $ 211,776 | $ 206,714 | |
Unbilled Receivables | 181,550 | 127,651 | |
Receivables Gross | 393,326 | 334,365 | |
Allowance for doubtful accounts | (5,072) | (2,568) | $ (3,439) |
Net receivables | 388,254 | 331,797 | |
Accounts Receivable, net , noncurrent | (54,074) | (34,370) | |
Accounts receivable, net | 334,180 | 297,427 | |
Expense, Allowance for Credit Loss | 3,199 | 518 | |
Write-off | $ (695) | $ (1,389) |
Contract Balances and Performance Obligations - Contract Liability (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Revenue from Contract with Customer [Abstract] | |||
Contract with Customer, Liability, Current | $ 115,100 | $ 111,000 | |
Contract with Customer, Liability | 122,141 | 116,320 | $ 108,118 |
Contract with Customer, Liability, Revenue Recognized | (101,640) | (93,265) | |
Contract With Customer, Liability, Excluding Revenue Recognized | 107,461 | 101,467 | |
Contract with Customer, Liability, Noncurrent | $ 7,000 | $ 5,300 |
Contract Balances and Performance Obligations - Additional Information (Details) |
12 Months Ended |
---|---|
Sep. 30, 2020 | |
Minimum | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Contract with customer, payment term | 30 days |
Maximum | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Contract with customer, payment term | 60 days |
Contract Balances and Performance Obligations - Performance Obligations (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 298.0 | $ 238.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 18 months | |
Revenue, Remaining Performance Obligation, Percentage | 50.00% |
Leases - Lease Assets and Liabilities (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Assets | |
Operating lease, right-of-use asset | $ 57,656 |
Finance lease, right-of-use asset | 5,021 |
Total lease assets | 62,677 |
Current: | |
Operating lease liabilities | 22,787 |
Finance lease liabilities | 2,186 |
Non-current: | |
Operating lease liabilities | 73,207 |
Finance lease liabilities | 3,076 |
Total lease liabilities | $ 101,256 |
Operating lease right-of-use assets | us-gaap:OperatingLeaseRightOfUseAsset |
Property and equipment, net | us-gaap:PropertyPlantAndEquipmentNet |
Other accrued liabilities | us-gaap:AccruedLiabilitiesCurrent |
Other accrued liabilities | us-gaap:AccruedLiabilitiesCurrent |
Operating lease liabilities | us-gaap:OperatingLeaseLiabilityNoncurrent |
Other liabilities | us-gaap:OtherLiabilitiesNoncurrent |
Finance lease accumulated depreciation | $ 1,500 |
Leases - Lease Cost (Details) $ in Thousands |
12 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Leases [Abstract] | |
Operating lease cost | $ 23,624 |
Finance lease, depreciation of lease assets | 2,078 |
Finance lease, interest on lease liabilities | 186 |
Short-term lease cost | 1,171 |
Variable lease cost | 3,264 |
Total lease cost | $ 30,323 |
Operating Lease, weighted average remaining lease term | 63 months |
Finance lease, weighted average remaining lease term | 29 months |
Operating lease, weighted average discount rate | 3.86% |
Finance lease, weighted average discount rate | 2.56% |
Leases - Related Cash Flow Information (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash outflow for operating leases | $ 18,801 | ||
Operating cash outflow for finance leases | 186 | ||
Finance Lease, Principal Payments | 1,716 | $ 945 | $ 0 |
Lease assets obtained in exchange for new lease liabilities: | |||
Operating lease | 11,457 | ||
Finance lease | $ 1,387 |
Leases - Additional Detail (Details) $ in Thousands |
12 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Leases [Abstract] | |
Impairment loss on operating lease assets | $ 28,016 |
Commitments - Additional Information (Details) |
12 Months Ended |
---|---|
Sep. 30, 2020
executive
| |
Commitments and Contingencies Disclosure [Abstract] | |
Number of executives in a management agreement providing for certain payments and other benefits in the event of a qualified change | 23 |
Guarantees - Additional Information (Details) |
12 Months Ended |
---|---|
Sep. 30, 2020 | |
Maximum | |
Product Warranty [Line Items] | |
Duration of product warranties | 90 days |
Supplementary Financial Data (Unaudited) - Selected Unaudited Consolidated Financial Results (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||
Revenues | $ 374,356 | $ 313,731 | $ 307,971 | $ 298,504 | $ 305,344 | $ 314,249 | $ 278,234 | $ 262,256 | |||||||||||||||
Cost of revenues | 93,676 | [1] | 88,569 | [1] | 88,139 | [1] | 90,758 | [1] | 87,996 | [1] | 87,215 | [1] | 85,568 | [1] | 76,066 | [1] | $ 361,142 | $ 336,845 | $ 312,898 | ||||
Gross profit | 280,680 | 225,162 | 219,832 | 207,746 | 217,348 | 227,034 | 192,666 | 186,190 | |||||||||||||||
Net income | $ 59,126 | $ 64,076 | $ 58,288 | $ 54,921 | $ 54,584 | $ 64,152 | $ 33,381 | $ 40,007 | $ 236,411 | $ 192,124 | $ 126,482 | ||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic earnings per share (in dollars per share) | $ 2.04 | [2] | $ 2.21 | [2] | $ 2.00 | [2] | $ 1.89 | [2] | $ 1.89 | [2] | $ 2.21 | [2] | $ 1.15 | [2] | $ 1.38 | [2] | $ 8.13 | $ 6.63 | $ 4.26 | ||||
Diluted earnings per share (in dollars per share) | $ 1.98 | [2] | $ 2.15 | [2] | $ 1.94 | [2] | $ 1.82 | [2] | $ 1.80 | [2] | $ 2.12 | [2] | $ 1.10 | [2] | $ 1.32 | [2] | $ 7.90 | $ 6.34 | $ 4.06 | ||||
Shares used in computing earnings per share: | |||||||||||||||||||||||
Basic weighted-average shares (in shares) | 29,045 | 29,005 | 29,194 | 29,025 | 28,918 | 28,967 | 29,074 | 28,961 | 29,067 | 28,980 | 29,711 | ||||||||||||
Diluted (in shares) | 29,833 | 29,744 | 29,985 | 30,169 | 30,290 | 30,292 | 30,259 | 30,336 | 29,932 | 30,294 | 31,180 | ||||||||||||
|
Supplementary Financial Data (Unaudited) - Selected Unaudited Consolidated Financial Results - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2018 |
|
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Amortization of intangible assets | $ 4,993 | $ 6,126 | $ 6,594 | ||||||||
Completed technology | |||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||
Amortization of intangible assets | $ 300 | $ 400 | $ 500 | $ 600 | $ 500 | $ 500 | $ 500 | $ 500 | $ 1,766 | $ 1,974 | $ 2,380 |
Subsequent Events - Additional Information (Details) - Subsequent Event - USD ($) $ in Millions |
Oct. 31, 2020 |
Oct. 30, 2020 |
---|---|---|
Subsequent Event [Line Items] | ||
Long-term Purchase Commitment, Amount | $ 120 | |
Long-term Purchase Commitment, Period | 5 years | |
Other Commitment | $ 12 | |
Long-Term Purchase Commitment, Period One | ||
Subsequent Event [Line Items] | ||
Long-term Purchase Commitment, Period | 3 years | |
Long-Term Purchase Commitment, Period Two | ||
Subsequent Event [Line Items] | ||
Long-term Purchase Commitment, Period | 1 year |
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