Income Taxes

3 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Effective Tax Rate

The effective income tax rate was (1.6)% and 7.3% during the quarters ended December 31, 2024 and 2023, respectively. The income tax provision (benefit) during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year. The effective tax rate in any quarter can also be affected positively or negatively by adjustments that are required to be reported in the specific quarter of resolution.

The Organization for Economic Co-operation and Development published Pillar Two Model Rules (“Pillar Two”) for a global 15% minimum tax rate that are in the process of being adopted by a number of jurisdictions in which we operate. FICO continues to monitor these legislative developments and does not expect Pillar Two to have material impacts on its fiscal 2025 consolidated financial statements.

The total unrecognized tax benefit for uncertain tax positions was estimated to be $20.7 million and $19.9 million at December 31, 2024 and September 30, 2024, respectively. We recognize interest expense related to unrecognized tax benefits and penalties as part of the income tax provision (benefit) in our condensed consolidated statements of income and comprehensive income. We accrued interest of $2.0 million and $1.7 million related to unrecognized tax benefits as of December 31, 2024 and September 30, 2024, respectively.