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Segment Information
9 Months Ended
Jun. 30, 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 nine-month periods ended June 30, 2023 and 2022:
 Quarter Ended June 30, 2023
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $172,059 $— $172,059 
Professional services— 24,851 — 24,851 
Scores201,778 — — 201,778 
Total segment revenues201,778 196,910 — 398,688 
Segment operating expense(24,779)(121,261)(42,347)(188,387)
Segment operating income$176,999 $75,649 $(42,347)210,301 
Unallocated share-based compensation expense(32,995)
Unallocated amortization expense(275)
Operating income177,031 
Unallocated interest expense, net(24,545)
Unallocated other income, net5,301 
Income before income taxes$157,787 
Depreciation expense$107 $2,093 $16 $2,216 
 Quarter Ended June 30, 2022
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $142,537 $— $142,537 
Professional services— 27,074 — 27,074 
Scores179,355 — — 179,355 
Total segment revenues179,355 169,611 — 348,966 
Segment operating expense(21,547)(123,581)(34,142)(179,270)
Segment operating income$157,808 $46,030 $(34,142)169,696 
Unallocated share-based compensation expense(28,549)
Unallocated amortization expense(532)
Operating income140,615 
Unallocated interest expense, net(18,721)
Unallocated other expense, net(1,000)
Income before income taxes$120,894 
Depreciation expense$182 $3,565 $26 $3,773 


 Nine Months Ended June 30, 2023
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $471,203 $— $471,203 
Professional services— 74,348 — 74,348 
Scores578,273 — — 578,273 
Total segment revenues578,273 545,551 — 1,123,824 
Segment operating expense(69,177)(369,270)(119,612)(558,059)
Segment operating income$509,096 $176,281 $(119,612)565,765 
Unallocated share-based compensation expense(89,750)
Unallocated amortization expense(825)
Unallocated gain on product line asset sale1,941 
Operating income477,131 
Unallocated interest expense, net(71,242)
Unallocated other income, net7,270 
Income before income taxes$413,159 
Depreciation expense$396 $7,790 $58 $8,244 
 Nine Months Ended June 30, 2022
 ScoresSoftwareUnallocated
Corporate
Expenses
Total
 (In thousands)
Segment revenues:
On-premises and SaaS software$— $417,963 $— $417,963 
Professional services— 77,975 — 77,975 
Scores532,584 — — 532,584 
Total segment revenues532,584 495,938 — 1,028,522 
Segment operating expense(65,111)(362,437)(104,734)(532,282)
Segment operating income$467,473 $133,501 $(104,734)496,240 
Unallocated share-based compensation expense(86,363)
Unallocated amortization expense(1,619)
Operating income408,258 
Unallocated interest expense, net(48,127)
Unallocated other expense, net(1,932)
Income before income taxes$358,199 
Depreciation expense$563 $11,249 $83 $11,895