Income Taxes

6 Months Ended

Mar. 31, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Effective Tax Rate

The effective income tax rate was 25.7% and 23.7% during the quarters ended March 31, 2026 and 2025, respectively, and 22.8% and 13.2% during the six months ended March 31, 2026 and 2025, respectively. The provision for income taxes 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 One Big Beautiful Bill Act (“OBBBA”) of 2025 was signed into law on July 4, 2025. Included among the provisions is the ability to immediately expense domestic research and experimental (“R&E”) expenditures, as well as an election to accelerate any unamortized domestic R&E expenditures over a one- or two-year period. Both provisions are effective for FICO in fiscal 2026. The impacts of the OBBBA were reflected in FICO’s results for the six months ended March 31, 2026.

The total unrecognized tax benefit for uncertain tax positions was estimated to be $21.1 million and $19.5 million at March 31, 2026 and September 30, 2025, respectively. We recognize interest expense related to unrecognized tax benefits and penalties as part of the provision for income taxes in our condensed consolidated statements of income and comprehensive income. We accrued interest of $2.5 million and $1.9 million related to unrecognized tax benefits as of March 31, 2026 and September 30, 2025, respectively.