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Segment Information
6 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Segment Information Segment Information
During the fourth quarter of our fiscal 2021, we reevaluated our operating segments to better align with how our chief operating decision maker (“CODM”), who is our Chief Executive Officer, evaluates performance and allocates resources. The key factors evaluated included our evolving platform strategies, our go-to market considerations, and sales of our product lines and businesses during fiscal 2021, and in particular the divestiture of our Collections and Recovery (“C&R”) business in June 2021, among others. As a result, we consolidated our operating segment structure from three to two by merging Applications and Decision Management Software segments into the new Software segment. Based on this change, we determined we have two reportable segments and revised prior comparative periods to conform to the current period segment presentation. The new segments are as follows:
 
Scores. This segment includes our business-to-business (“B2B”) scoring solutions and services which give our clients access to predictive credit and other scores that can be easily integrated into their transaction streams and decision-making processes. This segment also includes our business-to-consumer (“B2C”) scoring solutions, including our myFICO.com subscription offerings.
Software. This segment includes pre-configured analytic and decision management solutions designed for a specific type of business need or process — such as account origination, customer management, customer engagement, fraud detection, financial crimes compliance, and marketing — as well as associated professional services. This segment also includes FICO® Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by our customers to address a wide variety of business use cases. These offerings are available to our customers as SaaS or as on-premises software.
Our CODM 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, IT infrastructure, 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 CODM does not evaluate the financial performance of each segment based on its respective assets or capital expenditures; rather, depreciation amounts are allocated to the segments from their internal cost centers as described above.
The following tables summarize segment information for the quarters and six-month periods ended March 31, 2022 and 2021:
 Quarter Ended March 31, 2022
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $149,088 $— $149,088 
Professional services— 24,365 — 24,365 
Scores183,742 — — 183,742 
Total segment revenues183,742 173,453 — 357,195 
Segment operating expense(21,026)(119,953)(35,680)(176,659)
Segment operating income$162,716 $53,500 $(35,680)180,536 
Unallocated share-based compensation expense(27,936)
Unallocated amortization expense(543)
Operating income152,057 
Unallocated interest expense, net(17,211)
Unallocated other expense, net(2,361)
Income before income taxes$132,485 
Depreciation expense$189 $3,807 $28 $4,024 
 Quarter Ended March 31, 2021
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $125,551 $— $125,551 
Professional services— 37,091 — 37,091 
Scores168,719 — — 168,719 
Total segment revenues168,719 162,642 — 331,361 
Segment operating expense(22,177)(145,442)(33,392)(201,011)
Segment operating income$146,542 $17,200 $(33,392)130,350 
Unallocated share-based compensation expense(28,206)
Unallocated amortization expense(945)
Operating income101,199 
Unallocated interest expense, net(9,943)
Unallocated other income, net568 
Income before income taxes$91,824 
Depreciation expense$167 $5,012 $45 $5,224 


 Six Months Ended March 31, 2022
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $275,426 $— $275,426 
Professional services— 50,901 — 50,901 
Scores353,229 — — 353,229 
Total segment revenues353,229 326,327 — 679,556 
Segment operating expense(43,010)(238,534)(71,468)(353,012)
Segment operating income$310,219 $87,793 $(71,468)326,544 
Unallocated share-based compensation expense(57,814)
Unallocated amortization expense(1,087)
Operating income267,643 
Unallocated interest expense, net(29,406)
Unallocated other expense, net(932)
Income before income taxes$237,305 
Depreciation expense$381 $7,684 $57 $8,122 
 Six Months Ended March 31, 2021
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $252,006 $— $252,006 
Professional services— 78,399 — 78,399 
Scores313,370 — — 313,370 
Total segment revenues313,370 330,405 — 643,775 
Segment operating expense(43,803)(292,521)(63,645)(399,969)
Segment operating income$269,567 $37,884 $(63,645)243,806 
Unallocated share-based compensation expense(53,338)
Unallocated amortization expense(1,882)
Unallocated gains on product line asset sales and business divestiture7,334 
Operating income195,920 
Unallocated interest expense, net(19,584)
Unallocated other income, net3,448 
Income before income taxes$179,784 
Depreciation expense$361 $10,370 $78 $10,809