Segment Information

12 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Segment Information

Segment Information

We are organized into two reportable segments: Scores and Software. Although we sell solutions and services into 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 and amortization amounts are allocated to the segments from their internal cost centers as described above.

The following tables summarize segment information for fiscal 2024, 2023 and 2022: 

	Year Ended September 30, 2024
	Scores		Software		Unallocated Corporate Expenses		Total
	(In thousands)
Segment revenues:
On-premises and SaaS software	$	—	$	711,340	$	—	$	711,340
Professional services	—		86,536		—		86,536
Scores	919,650		—		—		919,650
Total segment revenues	919,650		797,876		—		1,717,526
Segment operating expense	(106,296)		(540,347)		(186,898)		(833,541)
Segment operating income	$	813,354	$	257,529	$	(186,898)	$	883,985
Unallocated share-based compensation expense							(149,439)
Unallocated amortization expense							(917)
Operating income							733,629
Unallocated interest expense, net							(105,638)
Unallocated other income, net							14,034
Income before income taxes							$	642,025
Depreciation and amortization	$	451	$	8,881	$	66	$	9,398

	Year Ended September 30, 2023
	Scores		Software		Unallocated Corporate Expenses		Total
	(In thousands)
Segment revenues:
On-premises and SaaS software	$	—	$	640,182	$	—	$	640,182
Professional services	—		99,547		—		99,547
Scores	773,828		—		—		773,828
Total segment revenues	773,828		739,729		—		1,513,557
Segment operating expense	(92,757)		(498,538)		(156,426)		(747,721)
Segment operating income	$	681,071	$	241,191	$	(156,426)	765,836
Unallocated share-based compensation expense							(123,847)
Unallocated amortization expense							(1,100)
Unallocated gain on product line asset sale							1,941
Operating income							642,830
Unallocated interest expense, net							(95,546)
Unallocated other income, net							6,340
Income before income taxes							$	553,624
Depreciation and amortization	$	485	$	9,550	$	71	$	10,106

	Year Ended September 30, 2022
	Scores		Software		Unallocated Corporate Expenses		Total
	(In thousands)
Segment revenues:
On-premises and SaaS software	$	—	$	564,751	$	—	$	564,751
Professional services	—		105,876		—		105,876
Scores	706,643		—		—		706,643
Total segment revenues	706,643		670,627		—		1,377,270
Segment operating expense	(87,288)		(487,505)		(142,647)		(717,440)
Segment operating income	$	619,355	$	183,122	$	(142,647)	659,830
Unallocated share-based compensation expense							(115,355)
Unallocated amortization expense							(2,061)
Operating income							542,414
Unallocated interest expense, net							(68,967)
Unallocated other expense, net							(2,138)
Income before income taxes							$	471,309
Depreciation and amortization	$	723	$	14,412	$	107	$	15,242

Long-lived assets held outside of the U.S. were immaterial