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Segment Information
6 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Segment Information Segment Information
We are organized into two reportable segments: Scores and Software. Although we sell solutions and services to a large number of end user product and industry markets, our reportable business segments reflect the primary method in which management organizes and evaluates internal financial information to make operating decisions and assess performance.
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, 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 chief operating decision maker (“CODM”), who is 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, 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.
We have recast certain prior period amounts within this note to conform to the way we internally managed and monitored segment performance during the current fiscal year, reflecting immaterial movements of business activities between segments and changes in cost allocations.
The following tables summarize segment information for the quarters and six-month periods ended March 31, 2023 and 2022:
 Quarter Ended March 31, 2023
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $154,584 $— $154,584 
Professional services— 27,175 — 27,175 
Scores198,507 — — 198,507 
Total segment revenues198,507 181,759 — 380,266 
Segment operating expense(23,102)(126,892)(43,183)(193,177)
Segment operating income$175,405 $54,867 $(43,183)187,089 
Unallocated share-based compensation expense(27,053)
Unallocated amortization expense(275)
Operating income159,761 
Unallocated interest expense, net(23,897)
Unallocated other income, net1,605 
Income before income taxes$137,469 
Depreciation expense$138 $2,723 $20 $2,881 
 Quarter Ended March 31, 2022
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $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(22,400)(120,819)(33,440)(176,659)
Segment operating income$161,342 $52,634 $(33,440)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 


 Six Months Ended March 31, 2023
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $299,144 $— $299,144 
Professional services— 49,497 — 49,497 
Scores376,495 — — 376,495 
Total segment revenues376,495 348,641 — 725,136 
Segment operating expense(44,398)(248,009)(77,265)(369,672)
Segment operating income$332,097 $100,632 $(77,265)355,464 
Unallocated share-based compensation expense(56,755)
Unallocated amortization expense(550)
Unallocated gain on product line asset sale1,941 
Operating income300,100 
Unallocated interest expense, net(46,697)
Unallocated other income, net1,969 
Income before income taxes$255,372 
Depreciation expense$289 $5,697 $42 $6,028 
 Six Months Ended March 31, 2022
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $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(43,564)(238,856)(70,592)(353,012)
Segment operating income$309,665 $87,471 $(70,592)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