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What changed in Fair Isaac's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Fair Isaac's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+280 added−296 removedSource: 10-K (2025-11-07) vs 10-K (2024-11-06)

Top changes in Fair Isaac's 2025 10-K

280 paragraphs added · 296 removed · 237 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

60 edited+19 added−22 removed113 unchanged
Biggest changeAmong other things, HITECH makes HIPAA’s security standards directly applicable to “business associates.” We function as a business associate for certain of our customers that are HIPAA-covered entities and service providers and, in that context, we are regulated as a business associate for the purposes of HIPAA. 10 Table of Contents The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) prohibits unfair, deceptive, or abusive acts or practices (“UDAAP”) with respect to the offering of consumer financial products and services and provides the Consumer Financial Protection Bureau (the “CFPB”) with enforcement authority to enforce those provisions as well as certain enumerated federal consumer financial laws.
Biggest changeThe Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) prohibits unfair, deceptive, or abusive acts or practices (“UDAAP”) with respect to the offering of consumer financial products and services and provides the Consumer Financial Protection Bureau (the “CFPB”) with authority to enforce those provisions as well as certain enumerated federal consumer financial laws.
We also serve consumers through online services that enable people to access and understand their FICO Scores — the standard measure in the United States (“U.S.”) of consumer credit risk — empowering them to increase financial literacy and manage their financial health. More information about us can be found on our website, www.fico.com.
We also serve consumers through online services that enable people to access and understand their FICO Scores — the standard measure of consumer credit risk in the United States (“U.S.”) — empowering them to increase financial literacy and manage their financial health. More information about us can be found on our website, www.fico.com.
Department of Commerce’s National Institute of Standards and Technology’s Cybersecurity Framework; the Clarifying Lawful Overseas Use of Data Act; cyber incident notice requirements for banks and their service providers under rules and regulations issued by federal banking regulators; cybersecurity incident disclosure requirements for public companies under regulations issued by the SEC; and identity theft, file freezing, and similar state privacy laws. • Laws and regulations related to extension of credit to consumers through the Electronic Fund Transfers Act and Regulation E, as well as non‑governmental VISA and MasterCard electronic payment standards. • Laws and regulations applicable to secondary market participants (e.g., The Federal National Mortgage Association (“Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“Freddie Mac”)) that could have an impact on our scoring products and revenues, including 12 CFR Part 1254 (Validation and Approval of Credit Score Models) issued by the Federal Housing Finance Agency in accordance with Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174), and any regulations, standards or criteria established pursuant to such laws or regulations, including the ongoing validation and approval of the use of the FICO ® Score by Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency. • Laws and regulations applicable to our customer communication clients and their use of our products and services (e.g., the Telemarketing Sales Rule, the Telephone Consumer Protection Act, the CAN-SPAM Act, the Fair Debt Collection Practices Act, and regulations promulgated thereunder, and similar state laws and similar laws in other countries). • Laws and regulations applicable to our insurance clients and their use of our insurance products and services. • The application or extension of consumer protection laws, including implementing regulations (e.g., the Consumer Financial Protection Act, the Truth In Lending Act and Regulation Z, the Fair Debt Collection Practices Act and Regulation F, the Servicemembers Civil Relief Act, and the Military Lending Act, and similar state consumer protection laws). • Laws and regulations governing the use of the Internet and social media, telemarketing, advertising, endorsements and testimonials. • Anti-money laundering laws and regulations (e.g., the Bank Secrecy Act and the USA PATRIOT Act). • Laws and regulations restricting transactions with sanctioned parties and regarding export controls as they apply to FICO products delivered in non-U.S. countries or to foreign nationals (e.g., Office of Foreign Asset Control sanctions and Export Administration Regulations). • Financial regulatory standards (e.g., Sarbanes-Oxley Act requirements to maintain and verify internal process controls, including controls for material event awareness and notification). • Laws and regulations that apply to outsourcing of services by our clients, and that set forth requirements for managing third parties (e.g., vendors, contractors, suppliers and distributors). • Laws and regulations relating to the environmental, social and governance, or sustainability, practices of companies, including enhanced climate-related disclosure requirements from regulators, such as California and the SEC, and the E.U.’s Corporate Sustainability Reporting Directive.
Department of Commerce’s National Institute of Standards and Technology’s Cybersecurity Framework; the Clarifying Lawful Overseas Use of Data Act; cyber incident notice requirements for banks and their service providers under rules and regulations issued by federal banking regulators; cybersecurity incident disclosure requirements for public companies under regulations issued by the SEC; and identity theft, file freezing, and similar state privacy laws. • Laws and regulations related to extension of credit to consumers through the Electronic Fund Transfers Act and Regulation E, as well as non‑governmental VISA and MasterCard electronic payment standards. 11 Table of Contents • Laws and regulations applicable to secondary market participants (e.g., The Federal National Mortgage Association (“Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“Freddie Mac”)) that could have an impact on our scoring products and revenues, including 12 CFR Part 1254 (Validation and Approval of Credit Score Models) issued by the Federal Housing Finance Agency in accordance with Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174), and any regulations, standards or criteria established pursuant to such laws or regulations, including the ongoing validation and approval of the use of the FICO ® Score by Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency. • Laws and regulations applicable to our customer communication clients and their use of our products and services (e.g., the Telemarketing Sales Rule, the Telephone Consumer Protection Act, the CAN-SPAM Act, the Fair Debt Collection Practices Act, and regulations promulgated thereunder, and similar state laws and similar laws in other countries). • Laws and regulations applicable to our insurance clients and their use of our insurance products and services. • The application or extension of consumer protection laws, including implementing regulations (e.g., the Consumer Financial Protection Act, the Truth In Lending Act and Regulation Z, the Fair Debt Collection Practices Act and Regulation F, the Servicemembers Civil Relief Act, and the Military Lending Act, and similar state consumer protection laws). • Laws and regulations governing the use of the Internet and social media, telemarketing, advertising, endorsements and testimonials. • Anti-money laundering laws and regulations (e.g., the Bank Secrecy Act and the USA PATRIOT Act). • Laws and regulations restricting transactions with sanctioned parties and regarding export controls as they apply to FICO products delivered in non-U.S. countries or to foreign nationals (e.g., Office of Foreign Asset Control sanctions and Export Administration Regulations). • Financial regulatory standards (e.g., Sarbanes-Oxley Act requirements to maintain and verify internal process controls, including controls for material event awareness and notification). • Laws and regulations that apply to outsourcing of services by our clients, and that set forth requirements for managing third parties (e.g., vendors, contractors, suppliers and distributors). • Laws and regulations relating to the environmental, social and governance, or sustainability, practices of companies, including enhanced climate-related disclosure requirements from regulators, such as California’s climate disclosure rules and the E.U.’s Corporate Sustainability Reporting Directive.
FICO Score XD is available to lenders through our distribution partners, LexisNexis Risk Solutions and Equifax. • The UltraFICO TM Score uses consumer-permissioned data such as checking, savings, or money market account data, to generate scores on the same 300-850 scale as standard FICO ® Scores.
FICO Score XD is available to lenders through our distribution partners, LexisNexis Risk Solutions and Equifax. • The UltraFICO ® Score uses consumer-permissioned data such as checking, savings, or money market account data, to generate scores on the same 300-850 scale as standard FICO ® Scores.
FICO Xpress Optimization runs on FICO ® Platform. • FICO ® Analytics Workbench TM is a predictive analytics tool that allows businesses to create and deploy explainable machine learning models for use in decisions that typically require strict governance and compliance, often including regulatory oversight.
FICO Xpress Optimization runs on FICO ® Platform. • FICO ® Analytics Workbench is a predictive analytics tool that allows businesses to create and deploy explainable machine learning models for use in decisions that typically require strict governance and compliance, often including regulatory oversight.
In the fraud market for banking, we compete primarily with Nice Actimize, Experian, Pegasystems, BAE Systems Applied Intelligence, SAS, ACI Worldwide, IBM, Feedzai and Featurespace. In the customer origination market, we compete with Experian, Equifax, Moody’s, Meridian Link, and CGI, among others. In the customer management market, we compete with Experian and SAS, among others.
In the fraud solutions market for banking, we compete primarily with Nice Actimize, Experian, Pegasystems, BAE Systems Applied Intelligence, SAS, ACI Worldwide, IBM, Feedzai and Featurespace. In the customer origination market, we compete with Experian, Equifax, Moody’s, Meridian Link, and CGI, among others. In the customer management market, we compete with Experian and SAS, among others.
We create a strong sense of shared purpose by having our CEO and each member of our executive leadership team participate in the same annual cash incentive bonus plan, as all non-sales employees across our organization. Beyond our structured promotion cycles, all compensation actions are determined in November following the conclusion of the year-end performance review process in October.
We create a strong sense of shared purpose by having our CEO and each member of our executive leadership team participate in the same annual cash incentive bonus design as all non-sales employees across our organization. Beyond our structured promotion cycles, all compensation actions are determined in November following the conclusion of the year-end performance review process in October.
Additional laws and regulations that may affect our business and our current and prospective customers’ activities include, but are not limited to, those in the following significant regulatory areas: • Laws and regulations that limit the use of credit scoring models (e.g., state “mortgage trigger” or “inquiries” laws, state insurance restrictions on the use of credit-based insurance scores, and the E.U.
Additional laws and regulations in the U.S. and abroad that may affect our business and our current and prospective customers’ activities include, but are not limited to, those in the following significant regulatory areas: • Laws and regulations that limit the use of credit scoring models (e.g., state “mortgage trigger” or “inquiries” laws, state insurance restrictions on the use of credit-based insurance scores, and the E.U.
The Leadership Development and Compensation Committee (the “LDCC”) of our Board oversees all human capital management policies, programs, and strategies, including but not limited to those regarding talent recruitment, development, retention, health and safety, organizational culture, employee engagement, diversity, and compensation and benefit programs.
The Leadership Development and Compensation Committee (the “LDCC”) of our Board oversees all human capital management policies, programs, and strategies, including but not limited to those regarding talent recruitment, development, retention, succession planning, health and safety, organizational culture, employee engagement, diversity, and compensation and benefit programs.
In addition, under U.S. government contracts, the government may make the results of our research public, which could limit our competitive advantage with respect to future products based on funded research. 9 Table of Contents We have used, registered and/or applied to register certain trademarks and service marks for our technologies, products and services.
In addition, under U.S. government contracts, the government may make the results of our research public, which could limit our competitive advantage with respect to future products based on funded research. We have used, registered and/or applied to register certain trademarks and service marks for our technologies, products and services.
These scores use alternative data sources to enhance conventional credit bureau data and generate scores for otherwise un-scorable consumers and in many cases improve the credit scores of scorable consumers. • FICO ® Score XD uses public records and property data, and a consumer’s history with mobile phone, landline phone and cable payments, to generate scores on the same 300-850 scale as standard FICO ® Scores.
These scores use alternative data sources to enhance conventional consumer reporting agency data and generate scores for otherwise un-scorable consumers and in many cases improve the credit scores of scorable consumers. • FICO ® Score XD uses public records and property data, and a consumer’s history with mobile phone, landline phone and cable payments, to generate scores on the same 300-850 scale as standard FICO ® Scores.
During fiscal 2024, 2023 and 2022, revenues generated from our agreements with Experian, TransUnion and Equifax collectively accounted for 45%, 41% and 39% of our total revenues, respectively. We also sell our scores and credit monitoring directly to consumers through our myFICO.com on-line subscription offerings.
During fiscal 2025, 2024 and 2023, revenues generated from our agreements with Experian, TransUnion and Equifax collectively accounted for 51%, 45% and 41% of our total revenues, respectively. We also sell our scores and credit monitoring directly to consumers through our myFICO.com on-line subscription offerings.
Although we believe our products and services compete favorably with respect to these factors, we may not be able to maintain our competitive position against current and future competitors. Scores In our Scores segment, we compete with both outside suppliers and in-house analytics.
Although we believe our products and services compete favorably with respect to these factors, we may not be able to maintain our competitive position against current and future competitors. 8 Table of Contents Scores In our Scores segment, we compete with both outside suppliers and in-house analytics.
Item 1. Business GENERAL Fair Isaac Corporation (NYSE: FICO) (together with its consolidated subsidiaries, the “Company,” which may also be referred to in this report as “we,” “us,” “our,” and “FICO”) is a leading applied analytics company. We were founded in 1956 on the premise that data, used intelligently, can improve business decisions.
Item 1. Business GENERAL Fair Isaac Corporation (NYSE: FICO) (together with its consolidated subsidiaries, the “Company,” which may also be referred to in this report as “we,” “us,” “our,” and “FICO”) is a global analytics software leader. We were founded in 1956 on the premise that data, used intelligently, can improve business decisions.
Consumer Credit Directive). • Fair lending laws (e.g., the Equal Credit Opportunity Act and Regulation B, and the Fair Housing Act) and laws and regulations that may impose requirements relating to algorithmic fairness or accountability. • The Cybersecurity Act of 2015; the U.S.
Consumer Credit Directive). • Fair lending laws (e.g., the Equal Credit Opportunity Act and Regulation B, and the Fair Housing Act) and laws and regulations that may impose requirements relating to algorithmic fairness or accountability. • Laws and regulations related to data and cybersecurity, such as the Cybersecurity Act of 2015; the U.S.
Additional information on our diversity programs and efforts are available on the Corporate Responsibility page of our website at www.fico.com/en/corporate-responsibility . Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K.
Additional information on our talent programs is available on the Corporate Responsibility page of our website at www.fico.com/en/corporate-responsibility . Information contained on our website is not deemed part of or incorporated by reference into this Annual Report on Form 10-K.
Several analytic methodologies underlie our products in this area. These include proprietary applications of both linear and nonlinear optimization algorithms, advanced neural systems, machine learning and AI.
Several analytic methodologies underlie our products in this area. These include proprietary applications of both linear and nonlinear optimization algorithms, advanced neural systems, machine learning and artificial intelligence (“AI”).
Our largest market segment is financial services, representing 92% of our total revenue during fiscal 2024. Our largest geographic market is the Americas, representing 84% of our total revenue during fiscal 2024. COMPETITION The market for our solutions is intensely competitive and is constantly changing.
Our largest market segment is financial services, representing 92% of our total revenue during fiscal 2025. Our largest geographic market is the Americas, representing 87% of our total revenue during fiscal 2025. COMPETITION The market for our solutions is intensely competitive and is constantly changing.
Other countries, as well as the executive branch of the U.S. government and a number of U.S. states, are considering or have implemented regulations or standards applicable to artificial intelligence technologies.
Other countries, as well as the executive branch of the U.S. government and a number of U.S. states, are considering or have implemented laws, regulations, or standards applicable to AI technologies.
We encounter competition from several sources, including: • in-house analytic and systems developers; • neural network developers and artificial intelligence system builders; • fraud solution providers; • scoring model builders; • providers of credit reports and credit scores; • software companies supplying predictive analytic modeling, rules, or analytic development tools; • entity resolution and social network analysis solutions providers; • providers of customer engagement and risk management solutions; • providers of account workflow management software; • business process management and decision rules management providers; • enterprise resource planning and customer relationship management solutions providers; • business intelligence solutions providers; • providers of automated application processing services; and • third-party professional services and consulting organizations.
We encounter competition from several sources, including: • in-house analytic and systems developers; • developers and providers of neural networks, machine learning, and AI systems; • fraud solutions providers; • scoring model builders; • providers of credit reports and credit scores, including consumer reporting agencies; • software companies supplying predictive analytic modeling, rules, or analytic development tools; • entity resolution and social network analysis solutions providers; • providers of customer engagement and risk management solutions; • providers of account workflow management software; • business process management and decision rules management providers; • enterprise resource planning and customer relationship management solutions providers; • business intelligence solutions providers; • providers of automated application processing services; and • third-party professional services and consulting organizations.
These rubrics set forth clear behavioral expectations for each function through a set of objective descriptors organized across our three levels of performance (Improvement Needed, Achieved Expectations, and Outstanding). In addition to rubrics, outcome-based goals are established for each individual based upon his/her specific role and priorities.
These rubrics set forth clear behavioral expectations for each function through a set of objective descriptors organized across our three levels of performance (Improvement Needed, Achieved Expectations, and Outstanding). In addition to rubrics, outcome-based goals are established for each individual based upon his/her specific role and priorities. Evaluation across both behavioral and outcome-based dimensions yields an overall performance assessment.
Our annual recurring revenue (“ARR”) from FICO ® Platform based products was $227.0 million as of September 30, 2024, representing 31% of our total software ARR. For information about ARR, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Annual Recurring Revenue , in this Annual Report on Form 10-K.
Our annual recurring revenue (“ARR”) from FICO ® Platform based products was $263.6 million as of September 30, 2025, representing 35% of our total software ARR. For information about ARR, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Annual Recurring Revenue , in this Annual Report on Form 10-K.
FICO Scores have been made available in over 40 countries and we have also developed client-specific versions of the FICO Score in over ten countries that we sell directly to end-user customers. We also provide FICO ® Scores to consumers in the U.S. through our B2C scoring solutions.
FICO Scores have been made available in over 40 countries and we have also developed client-specific versions of the FICO Score in over ten countries. We also provide FICO ® Scores to consumers in the U.S. through our B2C scoring solutions.
As of September 30, 2024, we had 24 trademarks registered in the U.S. and select foreign countries. GOVERNMENTAL REGULATION We are subject to a number of U.S. federal, state, local and foreign laws and regulations that involve matters central to our business.
As of September 30, 2025, we had 23 trademarks registered in the U.S. and select foreign countries. 9 Table of Contents GOVERNMENTAL REGULATION We are subject to a number of U.S. federal, state, local and foreign laws and regulations that involve matters central to our business.
There has been an increased focus on laws and regulations related to our business and the business of our customers, including by U.S. regulators such as the CFPB, relating to policy concerns regarding the operation of consumer reporting agencies, the use and accuracy of credit and alternative data, the costs of consumer reports and credit scores, the use of credit scores and fair lending, and the use, transparency, and fairness of algorithms, artificial intelligence, and machine learning in business processes.
There has been an increased focus on laws and regulations related to our business and the business of our customers relating to policy concerns regarding the operation of consumer reporting agencies, the use and accuracy of credit and alternative data, the costs of consumer reports and credit scores, the use of credit scores and fair lending, and the use, transparency, and fairness of algorithms, AI, and machine learning in business processes.
In addition, patents may never be issued on our pending patent applications or on any future applications that we may submit. As of September 30, 2024, we held 198 U.S. and 29 foreign patents, with 75 applications pending.
In addition, patents may never be issued on our pending patent applications or on any future applications that we may submit. As of September 30, 2025, we held 204 U.S. and 26 foreign patents, with 79 applications pending.
Certain Customer Communication capabilities are available on FICO ® Platform today, and we plan to make additional Customer Communication capabilities available on FICO Platform in the future. • FICO ® Strategy Director and FICO ® TRIAD ® Customer Manager enable businesses to automate and improve risk-based decisions for their existing credit customers.
Customer Communication capabilities are available on FICO ® Platform. • FICO ® Strategy Director and FICO ® TRIAD ® Customer Manager enable businesses to automate and improve risk-based decisions for their existing credit customers.
The LDCC also periodically reviews and reports to the Board with respect to succession planning for our Chief Executive Officer and other senior management positions. In addition, our Chief Human Resources Officer reports to our Board periodically on people-focused programs.
The LDCC also periodically reviews and reports to the Board with respect to succession planning for our Chief Executive Officer and other senior management positions.
Talent Recruitment We leverage organizational culture as a competitive advantage in our efforts to attract people from the broadest possible talent pool. We deploy selection practices designed to ensure strong alignment between candidate qualifications and knowledge and skills needed for success in each role, while avoiding unconscious biases through hiring manager education and use of decision tools.
Talent Recruitment We leverage organizational culture as a competitive advantage in our efforts to attract people from the broadest possible talent pool. We deploy selection practices designed to ensure strong alignment between candidate qualifications and knowledge and skills needed for success in each role, and we invest in hiring manager training focused on effective selection strategies.
In addition, our consumer solutions are marketed to more than 200 million U.S. consumers whose credit relationships are reported to the three major U.S. consumer reporting agencies. The majority of our scores are marketed and sold through consumer reporting agencies.
Seven of the top ten companies on the 2025 Fortune 500 list use one or more of our solutions. In addition, our consumer solutions are marketed to more than 200 million U.S. consumers whose credit relationships are reported to the three major U.S. consumer reporting agencies. The majority of our scores are marketed and sold through consumer reporting agencies.
In addition, the laws and regulations issued by U.S. and foreign regulators of some of our largest financial institution customers may require them to flow down certain contractual obligations, exercise greater oversight, and perform more rigorous audits of their key service providers such as us.
In addition, the laws and regulations issued by U.S. and foreign regulators of some of our largest financial institution customers may require them to flow down certain contractual obligations, exercise greater oversight, and perform more rigorous audits of their key service providers such as us. 10 Table of Contents The Federal Trade Commission Act (the “FTC Act”) prohibits unfair methods of competition and unfair or deceptive acts or practices.
However, many of our competitors are larger than FICO, have more development, sales and marketing resources than FICO, and some have larger shares of our target geographic or product markets. 8 Table of Contents We believe the principal competitive factors affecting our markets include technical performance; access to unique proprietary analytical models and data; product attributes like adaptability, scalability, interoperability, functionality, and ease-of-use; on-premises and SaaS product availability; product price; customer service and support; the effectiveness of sales and marketing efforts; existing market penetration; and reputation.
We believe the principal competitive factors affecting our markets include technical performance; access to unique proprietary analytical models and data; product attributes like adaptability, scalability, interoperability, functionality, and ease-of-use; on-premises and SaaS product availability; product price; customer service and support; the effectiveness of sales and marketing efforts; existing market penetration; and reputation.
Examples of organizational changes that have been driven by the insights from these surveys include investments in expanded workforce capacity, policies designed to ensure applicant pools are appropriately diverse prior to hiring decisions taking place, broadened and more frequent company-wide communications, increased employee stock ownership by significantly expanding the recipients of equity-based awards, expanded benefit programs including paid parental leave, well-being, family building, childcare reimbursement and company-funded transportation programs, enhanced incentive plan funding, and expanded investments in professional development targeting leadership and technical skills, as well as culture-based initiatives to promote inclusiveness and belonging.
Examples of organizational changes that have been driven by the insights from these surveys include investments in expanded workforce capacity, broadened and more frequent company-wide communications, increased employee stock ownership by significantly expanding the recipients of equity-based awards and encouraging all employees to take advantage of our Employee Stock Purchase Plan, expanded benefit programs including paid parental leave, well-being, family building, childcare reimbursement and company-funded transportation programs, enhanced incentive plan funding, and expanded investments in professional development targeting leadership and technical skills, as well as initiatives to promote a culture where all employees feel welcome at work.
The ILO develops customized learning content for colleagues, clients and partners around the world. We deliver high quality, targeted new hire onboarding, technology and product skill training, compliance and management and leadership education through this “FICO Learning” platform.
We have invested in building the FICO Integrated Learning Organization (“ILO”), which is led by our Chief Learning Officer. The ILO develops customized learning content for colleagues, clients and partners around the world. We deliver high quality, targeted new hire onboarding, technology and product skill training, compliance and management and leadership education through this “FICO Learning” platform.
Additionally, effective January 1, 2023, the California Privacy Rights Act (the “CPRA”) revised and significantly expanded the scope of the CCPA. The CPRA also created a new agency, the California Privacy Protection Agency, authorized to implement and enforce the CCPA and the CPRA.
Additionally, effective January 1, 2023, the California Privacy Rights Act (the “CPRA”) revised and significantly expanded the scope of the CCPA. The CPRA also created a new agency, the California Privacy Protection Agency, authorized to implement and enforce the CCPA and the CPRA. Numerous other U.S. states have passed similar privacy laws, and other states are considering such legislation.
We continuously strive to meet or exceed compliance with all laws, regulations and accepted practices pertaining to workplace safety.
We continuously strive to meet or exceed compliance with all laws, regulations and accepted practices pertaining to workplace safety. All employees and contractors are required to comply with established safety policies, standards, and procedures.
The EU AI Act entered into force on August 1, 2024 and its provisions take effect between six and 36 months after that date, with most of those provisions becoming effective in 2026.
The European Commission has finalized the EU AI Act, which establishes requirements for the provision and use of products that leverage AI systems, including in credit scoring. The EU AI Act entered into force on August 1, 2024 and its provisions take effect between six and 36 months after that date, with most of those provisions becoming effective in 2026.
Employee Engagement For the past decade, we have conducted quarterly workforce surveys to measure employee engagement and gain feedback and insights from our people about ways to improve the employee experience and the effectiveness of our business operations.
In addition, our Chief Human Resources Officer reports to our Board periodically on people-focused programs. 12 Table of Contents Employee Engagement For the past decade, we have conducted quarterly workforce surveys to measure employee engagement and gain feedback and insights from our people about ways to improve the employee experience and the effectiveness of our business operations.
We build custom analytics, decision models and related analytics, and perform machine learning projects for clients in multiple industries. These analytic services help to improve critical business processes and operationalize analytics using FICO software products.
We build custom analytics, decision models and related analytics, and perform machine learning projects for clients in multiple industries. These analytic services help to improve critical business processes and operationalize analytics using FICO software products. Most of our engagements utilize predictive analytics, decision modeling and optimization to provide greater insight into customer preferences and help predict future customer behavior.
We are also subject to federal and state laws that are generally applicable to any U.S. business with national or international operations, such as antitrust laws, the Foreign Corrupt Practices Act, the Americans with Disabilities Act, state unfair or deceptive practices acts and various employment laws. 12 Table of Contents HUMAN CAPITAL RESOURCES Our People As of September 30, 2024, we employed 3,586 persons across 27 countries.
We are also subject to federal and state laws that are generally applicable to any U.S. business with national or international operations, such as antitrust and unfair competition laws, the Foreign Corrupt Practices Act, the Americans with Disabilities Act, state unfair or deceptive practices acts and various employment laws.
This allows our employees to obtain the knowledge and skills to effectively perform in their current roles, while also preparing them for new opportunities. We also offer financial support for degreed or certificated programs through a tuition reimbursement program.
This allows our employees to obtain the knowledge and skills to effectively perform in their current roles, while also preparing them for new opportunities.
We offer competitive health and welfare benefit plans with significant company subsidies to offset premiums, retirement plans with a competitive company match to encourage participation and flexible paid-time-off programs including vacation, sick time and disability time.
In addition, we offer an Employee Stock Purchase Plan for eligible employees, which is designed to promote even broader equity participation. We offer competitive health and welfare benefit plans with significant company subsidies to offset premiums, retirement plans with a competitive company match to encourage participation and flexible paid-time-off programs including vacation, sick time and disability time.
We also encourage and match employee cash donations to qualified charitable organizations through our Corporate Matching Gift Program. Across our global workforce, as of September 30, 2024, the percentage of males and females was 67% and 33%, respectively. Looking at our U.S. workforce, as of September 30, 2024, 45% were racially/ethnically diverse employees who are members of a protected class.
Across our global workforce, as of September 30, 2025, the percentage of males and females was 67% and 33%, respectively. Looking at our U.S. workforce, as of September 30, 2025, 46% were racially/ethnically diverse employees who are members of a protected class.
We have defined specific career paths for all major functions in our organization so that our people understand how they can progress in their career by expanding their knowledge and skills.
We also offer financial support for degreed or certificated programs through a tuition reimbursement program. 13 Table of Contents We have defined specific career paths for all major functions in our organization so that our people understand how they can progress in their career by expanding their knowledge and skills.
Finally, for each senior leader role, managers identify potential successor candidates along with targeted development needs to encourage readiness.
In addition, managers identify any significant attrition risks and underlying drivers and develop related mitigation plans. Finally, for each senior leader role, managers identify potential successor candidates along with targeted development needs to encourage readiness.
Evaluation across both behavioral and outcome-based dimensions yields an overall performance assessment. 14 Table of Contents We define a “promotion” as an increase in pay band linked to the proven ability to be successful in the next level of responsibility.
We define a “promotion” as an increase in pay band linked to the proven ability to be successful in the next level of responsibility.
These assessments include a mid-year performance rating and a leadership strength rating, the combination of which yields a Talent Management Score ranging from one to nine with recommended follow-up actions associated with each score. In addition, managers identify any significant attrition risks and underlying drivers and develop related mitigation plans.
At the mid-point of each fiscal year, talent assessments are performed by people managers for each team member. These assessments include a mid-year performance rating and a leadership strength rating, the combination of which yields a Talent Management Score ranging from one to nine with recommended follow-up actions associated with each score.
It enables businesses to automate individualized customer dialogues with the same consistency and regulatory compliance as their human agents. With Customer Communication Service, businesses can be available 24/7 for one-way or two-way communication through any channel their consumers choose. Businesses can rapidly launch mobile alerts, messaging, virtual agents, self-service options, and other auto-resolution capabilities.
With Customer Communication Service, businesses can be available 24/7 for one-way or two-way communication through any channel their consumers choose. Businesses can rapidly launch mobile alerts, messaging, virtual agents, self-service options, and other auto-resolution capabilities. It helps make the full customer journey more efficient and raises the level of data-driven digital intelligence behind lifecycle communications.
Allegations that we failed to safeguard or handle such data in a reasonable manner may subject us to regulatory scrutiny or enforcement action. The U.S. Fair Credit Reporting Act (the “FCRA”) applies to consumer reporting agencies, as well as data furnishers, and users of consumer reports such as banks and other companies, many of which are our customers.
Fair Credit Reporting Act (the “FCRA”) applies to consumer reporting agencies, as well as data furnishers, and users of consumer reports such as banks and other companies, many of which are our customers.
We believe we offer customers a unique mix of products, expertise and capabilities that allows us to compete effectively in our target markets.
We believe we offer customers a unique mix of products, expertise and capabilities that allows us to compete effectively in our target markets. However, many of our competitors are larger than FICO, have more development, sales and marketing resources than FICO, and some have larger shares of our target geographic or product markets.
Our clients also include more than 600 insurers, including eight of the top ten U.S. property and casualty insurers; more than 300 retailers and general merchandisers; and more than 200 government or public agencies. Seven of the top ten companies on the 2024 Fortune 500 list use one or more of our solutions.
End users of our products include three-quarters of each of the largest 100 financial institutions in the U.S. and the largest 100 banks in the world. Our clients also include more than 600 insurers, including eight of the top ten U.S. property and casualty insurers; more than 300 retailers and general merchandisers; and more than 200 government or public agencies.
Of these, our largest representation includes 1,309 (36%) based in the U.S., 1,367 (38%) based in India and 264 (7%) based in the U.K. Other than to the extent mandated by applicable law in certain foreign jurisdictions, none of our employees are covered by a collective bargaining agreement, and no work stoppages were experienced during fiscal 2024.
Other than to the extent mandated by applicable law in certain foreign jurisdictions, none of our employees are covered by a collective bargaining agreement, and no work stoppages were experienced during fiscal 2025. Our Board of Directors (our “Board”) and executive leadership team believe that our people are vital to our success.
Certain Originations capabilities are available on FICO ® Platform today, and we plan to make additional Originations capabilities available on FICO Platform in the future. • FICO ® Customer Communication Service is an intelligent omnichannel digital communication manager for resolving customer interactions.
Originations capabilities are available on FICO ® Platform. • FICO ® Customer Communication Service is an intelligent omnichannel digital communication manager for resolving customer interactions. It enables businesses to automate individualized customer dialogues with the same consistency and regulatory compliance as their human agents.
And, consistent with our remarkably low undesired attrition rate, FICO has significantly strengthened its position as an employer of choice over the past year, resulting in very attractive external candidate pools.
And, consistent with our remarkably low undesired attrition rate, FICO has significantly strengthened its position as an employer of choice, resulting in attractive external candidate pools. Professional Development To support professional development, we offer a structured onboarding program with training specific to a variety of identified career paths to help new employees become rapidly engaged and productive.
All employees and contractors are required to comply with established safety policies, standards, and procedures. 15 Table of Contents We foster a healthy work/life balance for our people via both remote and hybrid work location policies that provide significant flexibility surrounding work location and work schedules.
We foster a healthy work/life balance for our people including both remote and hybrid work location policies that provide significant flexibility surrounding work location and work schedules. 15 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Our executive officers as of September 30, 2025 were as follows: Name Positions Held Age William J.
FICO ERGs focus on women, race/ethnicity, LGBTQ+, and community support groups. All FICO ERGs are open to everyone at FICO to join. Our FICO Cares ERG encourages our people to connect with and contribute to their community. We encourage employees to participate in volunteer activities by providing work schedule flexibility and paid Community Volunteer Leave.
Our FICO Cares organization encourages our people to connect with and contribute to their community. We encourage employees to participate in volunteer activities by providing work schedule flexibility and paid Community Volunteer Leave. We also encourage and match employee cash donations and volunteer time to qualified charitable organizations through our Corporate Matching Gift Program.
This includes promotion and market-based base pay adjustments, annual bonus awards, and long-term incentive awards. This rewards-planning cycle ensures strong linkage between performance and rewards, and it allows for centralized review and refinement of reward recommendations leading to high quality and representative decisions.
This rewards-planning cycle ensures strong linkage between performance and rewards, and it allows for centralized review and refinement of reward recommendations leading to high quality and representative decisions. 14 Table of Contents Over the course of the past decade, we’ve steadily and significantly expanded participation in our annual performance-based equity program from 7% to just over 33% of our workforce.
The Federal Trade Commission Act (the “FTC Act”) prohibits unfair methods of competition and unfair or deceptive acts or practices. Under the FTC Act, the FTC’s jurisdiction includes the ability to bring enforcement actions based on the security measures we employ to safeguard the personal data of consumers.
Under the FTC Act, the FTC’s jurisdiction includes the ability to bring enforcement actions based on the security measures we employ to safeguard the personal data of consumers. Allegations that we failed to safeguard or handle such data in a reasonable manner may subject us to regulatory scrutiny or enforcement action. The U.S.
Our seasoned practitioners are uniquely valued for their credit lifecycle risk and fraud knowledge and can help drive measurable results in an ever-dynamic economic market. 7 Table of Contents Our professional services are sold on an hourly time and materials basis or for a fixed project fee.
Our professional services are sold on an hourly time and materials basis or for a fixed project fee. 7 Table of Contents MARKETS AND CUSTOMERS Our scores and software products and services serve clients in multiple industries, including banking, insurance, retail, healthcare and public agencies.
Approximately 20% of our people are recognized via promotion each year. Succession Planning We actively assess talent across the organization to optimize deployment of resources, encourage professional development, drive accountability, and identify and take actions to mitigate undesired attrition risk. At the mid-point of each fiscal year, talent assessments are performed by people managers for each team member.
The Board also has regular and direct exposure to senior leadership and high potential officers through formal and informal avenues throughout the year. Beyond the C-suite, we actively assess talent across the organization to optimize deployment of resources, encourage professional development, drive accountability, and identify and take actions to mitigate undesired attrition risk.
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For example, FICO’s industry leading rules-based decisioning engine, FICO ® Blaze Advisor ® decision rules management system, is now available on FICO Platform as FICO ® Decision Modeler. In addition, many core capabilities of FICO’s current software products are now part of FICO Platform, enabling solutions such as Originations and Customer Management.
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Many capabilities of FICO’s current software products are now part of FICO Platform, addressing use cases such as origination, fraud detection, customer management, and next best action, among others.
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It helps make the full customer journey more efficient and raises the level of data-driven digital intelligence behind lifecycle communications.
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Among other things, HITECH makes HIPAA’s security standards directly applicable to “business associates.” We function as a business associate for certain of our customers that are HIPAA-covered entities and service providers and, in that context, we are regulated as a business associate for the purposes of HIPAA.
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Most of our engagements utilize predictive analytics, decision modeling and optimization to provide greater insight into customer preferences and help predict future customer behavior. • FICO ® Advisors. FICO Advisors are business consultants accelerating the practical use of FICO solutions through data-driven analytics, strategic design, and software applications.
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HUMAN CAPITAL RESOURCES Our People As of September 30, 2025, we employed 3,811 persons across 28 countries. Of these, our largest representation included 1,335 (35%) based in the U.S., 1,506 (40%) based in India and 271 (7%) based in the U.K.
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MARKETS AND CUSTOMERS Our scores and software products and services serve clients in multiple industries, including banking, insurance, retail, healthcare and public agencies. End users of our products include three-quarters of each of the largest 100 financial institutions in the U.S. and the largest 100 banks in the world.
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Our engagement scores have steadily strengthened and we have enjoyed strong workforce retention over the past year. Each of 22 engagement driver scores from our most recent surveys are at or above our external benchmark scores. Organizational Culture FICO is committed to building and reinforcing a culture where all employees feel welcome and where individual perspectives are valued.
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Numerous other U.S. states have considered similar privacy laws, with many of those states having passed such laws with respective effective dates ranging from 2023 through 2026.
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FICO believes that a highly talented workforce that includes people with a wide range of backgrounds, experiences and perspectives drives innovation while helping us relate to our global customer base.
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For example, the CFPB has initiated a public request for information relating to fees charged by providers of mortgages and related settlement services, including fees for consumer reports and credit scores.
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Our goal is to achieve this innovation and connection to our customer base through a culture that attracts the broadest talent audience possible, while always striving to select the most qualified individuals. We also believe that promoting a culture where each individual is truly valued allows our people to reach their full potential.
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In addition, the CFPB has indicated that it intends to issue rules under the FCRA that would extend the FCRA to certain business practices not currently subject to that statute. 11 Table of Contents The European Commission has finalized the EU AI Act, which establishes requirements for the provision and use of products that leverage artificial intelligence systems, including in credit scoring.
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Approximately 25% of our people are recognized via promotion each year. Succession Planning Our Board spends considerable time each year reviewing CEO and key leadership succession and development plans.
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Our Board of Directors (our “Board”) and executive leadership team believe that our people are vital to our success.
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These discussions include an annual dedicated review of CEO succession, as well as discussions at multiple meetings, including in executive session as needed, regarding broader key leader succession, organizational health and scenario planning in the event of unexpected leadership changes.
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Our engagement scores have steadily strengthened over the past year, and nearly all driver scores remain well above their published external benchmark. We have recently experienced a remarkably low undesired attrition rate which, over the past 12-month period, is the lowest we have experienced in decades and well below competitive market rates.
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This includes promotion and market-based base pay adjustments, annual bonus awards, and long-term incentive awards.
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Organizational Culture FICO is committed to building and reinforcing a culture where individual differences and perspectives are valued. We believe that diverse teams can better relate to and deliver against the many and varied needs of our clients.
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Lansing January 2012–present, Chief Executive Officer and member of the Board of Directors of the Company.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeTo increase our revenues, we must enhance and improve existing products and services, and continue to introduce new products and services that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance.
Biggest changeIf we are unable to successfully develop, or if the marketplace does not accept, new, enhanced or improved products and services, or if we experience defects, failures or delays associated with the introduction of new, enhanced or improved products or services, our business could suffer serious harm. 17 Table of Contents Our revenue growth and the success of our business strategy depend upon our ability to enhance and improve existing products and services, and to continue to introduce new products and services that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance.
We have experienced past difficulty in recruiting and retaining qualified personnel, especially in these intensely competitive technical skill areas, and we may experience future difficulty in recruiting and retaining such personnel, at a time when we may need additional staff to support expanded research and development efforts, new customers and/or increased customer needs.
We have experienced past difficulty in recruiting and retaining qualified personnel, especially in these intensely competitive and technical skill areas, and we may experience future difficulty in recruiting and retaining such personnel, at a time when we may need additional staff to support expanded research and development efforts, new customers and/or increased customer needs.
These factors include: • general economic and political conditions in countries where we sell our products and services; • difficulty in staffing and efficiently managing our operations in multiple geographic locations and in various countries; • effects of a variety of foreign laws and regulations, including restrictions on access to personal information; • data privacy and consumer protection laws and regulations; • import and export licensing requirements; • longer payment cycles; • difficulties in enforcing contracts and collecting accounts receivable; • reduced protection for intellectual property rights; • currency fluctuations; • unfavorable tax rules or changes in tariffs and other trade barriers; • the presence and acceptance of varying levels of business corruption in international markets; • geopolitical tensions, instability, terrorism, and military conflicts; • natural disasters and pandemics, including individual countries’ reactions to them; and • difficulties and delays in translating products and related documentation into foreign languages.
These factors include: • general economic and political conditions in countries where we sell our products and services; • difficulty in staffing and efficiently managing our operations in multiple geographic locations and in various countries; • effects of a variety of foreign laws and regulations, including restrictions on access to personal information; • data privacy and consumer protection laws and regulations; • import and export licensing requirements; • longer payment cycles; • difficulties in enforcing contracts and collecting accounts receivable; • reduced protection for intellectual property rights; • currency fluctuations; • unfavorable tax rules; • changes in tariffs and other trade barriers; • the presence and acceptance of varying levels of business corruption in international markets; • geopolitical tensions, instability, terrorism, and military conflicts; • natural disasters and pandemics, including individual countries’ reactions to them; and • difficulties and delays in translating products and related documentation into foreign languages.
Laws and regulations that may affect our business and/or our current and prospective customers’ activities include, but are not limited to, those in the following significant regulatory areas: • Privacy and security laws and regulations that limit the use and disclosure, require security procedures, or otherwise apply to the collection, processing, storage, use and transfer of personal data of individuals (e.g., the U.S.
Laws and regulations in the U.S. and abroad that may affect our business and/or our current and prospective customers’ activities include, but are not limited to, those in the following significant regulatory areas: • Privacy and security laws and regulations that limit the use and disclosure, require security procedures, or otherwise apply to the collection, processing, storage, use and transfer of personal data of individuals (e.g., the U.S.
Failure of our existing and future distributors to generate significant revenues or otherwise perform their expected services or functions, demands by such distributors to change the terms on which they offer our products, or our failure to establish additional distribution or sales and marketing alliances, could have a material adverse effect on our business, operating results and financial condition.
Failure of our existing and future distributors or partners to generate significant revenues or otherwise perform their expected services or functions, demands by such distributors or partners to change the terms on which they offer our products, or our failure to establish additional distribution or sales and marketing alliances, could have a material adverse effect on our business, operating results and financial condition.
Third parties have asserted copyright and other intellectual property interests in these data, and these assertions, if successful, could prevent us from using these data. We may not be successful in maintaining our relationships with these external data source providers or in continuing to obtain data from them on acceptable terms or at all.
Third parties have asserted copyright and other intellectual property interests in this data, and these assertions, if successful, could prevent us from using this data. We may not be successful in maintaining our relationships with these external data source providers or in continuing to obtain data from them on acceptable terms or at all.
Financial Services Modernization Act of 1999, also known as the Gramm Leach Bliley Act; identity theft, file freezing, security breach notification and similar state privacy laws; and the data protection laws of other countries such as the General Data Protection Regulation (the “GDPR”) in the European Union (“E.U.”) and the United Kingdom (“U.K.”)); • Laws and regulations relating to the privacy, security and transmission of protected health information of individuals, including the Health Insurance Portability and Accountability Act of 1996, as amended by the American Recovery and Reinvestment Act of 2009 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and their respective implementing regulations; • Financial regulatory reform stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the many regulations mandated by that Act, including regulations issued by, and the supervisory and investigative authority of, the Consumer Financial Protection Bureau (“CFPB”) with respect to enumerated federal consumer financial laws and unfair, deceptive, or abusive acts or practices (“UDAAP”); • The application or extension of consumer protection laws, including implementing regulations (e.g., the Consumer Financial Protection Act, the Federal Trade Commission Act, the Truth In Lending Act and Regulation Z, the Fair Debt Collection Practices Act and Regulation F, the Servicemembers Civil Relief Act, the Military Lending Act, and the Credit Repair Organizations Act, and similar state consumer protection laws); • Use of data by creditors and consumer reporting agencies (e.g., the U.S.
Financial Services Modernization Act of 1999, also known as the Gramm Leach Bliley Act; identity theft, file freezing, security breach notification and similar state privacy laws; and the data protection laws of other countries such as the General Data Protection Regulation (the “GDPR”) in the European Union (“E.U.”) and the United Kingdom (“U.K.”)); 25 Table of Contents • Laws and regulations relating to the privacy, security and transmission of protected health information of individuals, including the Health Insurance Portability and Accountability Act of 1996, as amended by the American Recovery and Reinvestment Act of 2009 (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and their respective implementing regulations; • Financial regulatory reform stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the many regulations mandated by that Act, including regulations issued by, and the supervisory and investigative authority of, the Consumer Financial Protection Bureau (“CFPB”) with respect to enumerated federal consumer financial laws and unfair, deceptive, or abusive acts or practices (“UDAAP”); • The application or extension of consumer protection laws, including implementing regulations (e.g., the Consumer Financial Protection Act, the Federal Trade Commission Act, the Truth In Lending Act and Regulation Z, the Fair Debt Collection Practices Act and Regulation F, the Servicemembers Civil Relief Act, the Military Lending Act, and the Credit Repair Organizations Act, and similar state consumer protection laws); • Use of data by creditors and consumer reporting agencies (e.g., the U.S.
In addition, certain of our distributors presently compete with us and may compete with us in the future, either by developing competitive products themselves or by distributing competitive offerings. For example, Experian, TransUnion and Equifax have developed a credit scoring product to compete directly with our products and are actively selling that product.
In addition, certain of our distributors and partners presently compete with us and may compete with us in the future, either by developing competitive products themselves or by distributing competitive offerings. For example, Experian, TransUnion and Equifax have developed a credit scoring product to compete directly with our products and are actively selling that product.
In addition to the other risks described in these risk factors, some of the factors that could cause our financial results and key metrics to fluctuate include: • variability in demand from our existing customers; • the lengthy and variable sales cycle of many products, combined with the relatively large size of orders for our products, increases the likelihood of short-term fluctuation in revenues; • consumer or customer dissatisfaction with, or problems caused by, the performance of our products; • the timing of new product announcements and introductions in comparison with our competitors; • the level of our operating expenses; • changes in demand and competitive and other conditions in the consumer credit, banking and insurance industries; • the level and volatility of interest rates and the level of inflation; • fluctuations in domestic and international economic conditions; • our ability to complete large installations, and to adopt and configure cloud-based deployments, on schedule and within budget; • announcements relating to litigation or regulatory matters; • changes in senior management or key personnel; • acquisition-related expenses and charges; and • timing of orders for and deliveries of software systems.
In addition to the other risks described in these risk factors, some of the factors that could cause our financial results and key metrics to fluctuate include: • variability in demand from our existing customers; 29 Table of Contents • the lengthy and variable sales cycle of many products, combined with the relatively large size of orders for our products, increases the likelihood of short-term fluctuation in revenues; • consumer or customer dissatisfaction with, or problems caused by, the performance of our products; • the timing of new product announcements and introductions in comparison with our competitors; • the level of our operating expenses; • changes in demand and competitive and other conditions in the consumer credit, banking and insurance industries; • the level and volatility of interest rates and the level of inflation; • fluctuations in domestic and international economic conditions; • our ability to complete large installations, and to adopt and configure cloud-based deployments, on schedule and within budget; • announcements relating to litigation or regulatory matters; • changes in senior management or key personnel; • acquisition-related expenses and charges; and • timing of orders for and deliveries of software systems.
The loss of or a significant change in a relationship with one of the three consumer reporting agencies with respect to their distribution of our products or with respect to our myFICO ® offerings, the loss of or a significant change in a relationship with a major customer, the loss of or a significant change in a relationship with a significant third-party distributor (including payment card processors), or the loss of or delay of significant revenues from these sources, could have a material adverse effect on our revenues and results of operations. 17 Table of Contents Our revenues depend, to a great extent, upon conditions in the banking (including consumer credit) industry.
The loss of or a significant change in a relationship with one of the three consumer reporting agencies with respect to their distribution of our products or with respect to our myFICO ® offerings, the loss of or a significant change in a relationship with a major customer, the loss of or a significant change in a relationship with a significant third-party distributor (including payment card processors), or the loss of or delay of significant revenues from these sources, could have a material adverse effect on our revenues and results of operations. 18 Table of Contents Our revenues depend, to a great extent, upon conditions in the banking (including consumer credit) industry.
If new laws, regulations or other governmental action affecting the FICO Score or our other products and services are implemented or carried out, it could adversely affect our business and results of operations.
If new laws, regulations or other governmental action affecting the FICO Score or our other products, services and solutions are implemented or carried out, it could adversely affect our business and results of operations.
Acquisitions involve significant risks and uncertainties, including: • our ongoing business may be disrupted and our management’s attention may be diverted by acquisition, transition or integration activities; • an acquisition may not further our business strategy as we expected, we may not integrate acquired operations or technology as successfully as we expected or we may overpay for our investments, or otherwise not realize the expected return, which could adversely affect our business or operating results; • we may be unable to retain the key employees, customers and other business partners of the acquired operation; • we may have difficulties entering new markets where we have no or limited direct prior experience or where competitors may have stronger market positions; • our operating results or financial condition may be adversely impacted by known or unknown claims or liabilities we assume in an acquisition or that are imposed on us as a result of an acquisition, including claims by government agencies or authorities, terminated employees, current or former customers, former stockholders or other third parties; • we could incur material charges in connection with the impairment of goodwill or other assets that we acquire; • a company that we acquire may have experienced a security incident that it has yet to discover, investigate and remediate which we might not be identify in a timely manner and which could spread more broadly to other parts of our company during the integration effort; • we may incur material charges as a result of acquisition costs, costs incurred in combining and/or operating the acquired business, or liabilities assumed in the acquisition that are greater than anticipated; • we may not realize the anticipated increase in our revenues from an acquisition for a number of reasons, including if a larger than predicted number of customers decline to renew their contracts, if we are unable to incorporate the acquired technologies or products with our existing product lines in a uniform manner, if we are unable to sell the acquired products to our customer base or if contract models of an acquired company or changes in accounting treatment do not allow us to recognize revenues on a timely basis; • our use of cash to pay for acquisitions may limit other potential uses of our cash, including stock repurchases, and retirement of outstanding indebtedness; and • to the extent we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease.
Acquisitions involve significant risks and uncertainties, including: • our ongoing business may be disrupted and our management’s attention may be diverted by acquisition, transition or integration activities; • an acquisition may not further our business strategy as we expected, we may not integrate acquired operations, systems or technology as successfully as we expected or we may overpay for our investments, or otherwise not realize the expected return, which could adversely affect our business or operating results; • we may be unable to retain the key employees, customers and other business partners of the acquired operation; • we may have difficulties entering new markets where we have no or limited direct prior experience or where competitors may have stronger market positions; • our operating results or financial condition may be adversely impacted by known or unknown contingent liabilities, other liabilities or claims we assume in an acquisition or that are imposed on us as a result of an acquisition, including claims by government agencies or authorities, terminated employees, current or former customers, former stockholders or other third parties; • we could incur material charges in connection with the impairment of goodwill or other assets that we acquire; • a company that we acquire may have experienced a security incident that it has yet to discover, investigate and remediate, may have other cybersecurity vulnerabilities, or may have unsophisticated security measures, any of which we might not identify in a timely manner and which could spread more broadly to other parts of our company during the integration effort; • we may incur material charges as a result of acquisition costs or costs incurred in combining and/or operating the acquired business that are greater than anticipated; • we may not realize the anticipated increase in our revenues from an acquisition for a number of reasons, including if a larger than predicted number of customers decline to renew their contracts, if we are unable to incorporate the acquired technologies or products with our existing product lines in a uniform manner, if we are unable to sell the acquired products to our customer base or if contract models of an acquired company or changes in accounting treatment do not allow us to recognize revenues on a timely basis; • our use of cash to pay for acquisitions may limit other potential uses of our cash, including stock repurchases, and retirement of outstanding indebtedness; and • to the extent we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease.
Department of Commerce’s National Institute of Standards and Technology’s Cybersecurity Framework; the Clarifying Lawful Overseas Use of Data Act; cyber incident notice requirements for banks and their service providers under rules and regulations issued by federal banking regulators; cybersecurity incident disclosure requirements for public companies under regulations issued by the SEC; and identity theft, file freezing, and similar state privacy laws; • Laws and regulations related to extension of credit to consumers through the Electronic Fund Transfers Act and Regulation E, as well as non‑governmental VISA and MasterCard electronic payment standards; • Laws and regulations applicable to secondary market participants (e.g., Fannie Mae and Freddie Mac) that could have an impact on our scoring products and revenues, including 12 CFR Part 1254 (Validation and Approval of Credit Score Models) issued by the FHFA in accordance with Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174), and any regulations, standards or criteria established pursuant to such laws or regulations, including the ongoing validation and approval of the use of the FICO ® Score by Fannie Mae, Freddie Mac, and the FHFA; • Laws and regulations applicable to our customer communication clients and their use of our products and services (e.g., the Telemarketing Sales Rule, Telephone Consumer Protection Act, the CAN-SPAM Act, the Fair Debt Collection Practices Act, and regulations promulgated thereunder, and similar state laws and similar laws in other countries); • Laws and regulations applicable to our insurance clients and their use of our insurance products and services; • Laws and regulations governing the use of the Internet and social media, telemarketing, advertising, endorsements and testimonials; • Anti-money laundering laws and regulations (e.g., the Bank Secrecy Act and the USA PATRIOT Act); • Laws and regulations restricting transactions with sanctioned parties and regarding export controls as they apply to FICO products delivered in non-U.S. countries or to foreign nationals (e.g., Office of Foreign Asset Control sanctions and Export Administration Regulations); • Anti-bribery and corruption laws and regulations (e.g., the Foreign Corrupt Practices Act and the UK Bribery Act 2010); • Financial regulatory standards (e.g., Sarbanes-Oxley Act requirements to maintain and verify internal process controls, including controls for material event awareness and notification); • Laws and regulations that apply to outsourcing of services by our clients, and that set forth requirements for managing third parties (e.g., vendors, contractors, suppliers and distributors); and • Laws and regulations relating to the environmental, social and governance, or sustainability, practices of companies, including enhanced climate-related disclosure requirements from regulators, such as California and the SEC, and the E.U.’s Corporate Sustainability Reporting Directive.
Department of Commerce’s National Institute of Standards and Technology’s Cybersecurity Framework; the Clarifying Lawful Overseas Use of Data Act; cyber incident notice requirements for banks and their service providers under rules and regulations issued by federal banking regulators; cybersecurity incident disclosure requirements for public companies under regulations issued by the SEC; and identity theft, file freezing, and similar state privacy laws; • Laws and regulations related to extension of credit to consumers through the Electronic Fund Transfers Act and Regulation E, as well as non‑governmental VISA and MasterCard electronic payment standards; • Laws and regulations applicable to secondary market participants (e.g., Fannie Mae and Freddie Mac) that could have an impact on our scoring products and revenues, including 12 CFR Part 1254 (Validation and Approval of Credit Score Models) issued by the FHFA in accordance with Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174), and any regulations, standards or criteria established pursuant to such laws or regulations, including the ongoing validation and approval of the use of the FICO ® Score by Fannie Mae, Freddie Mac, and the FHFA; • Laws and regulations applicable to our customer communication clients and their use of our products and services (e.g., the Telemarketing Sales Rule, Telephone Consumer Protection Act, the CAN-SPAM Act, the Fair Debt Collection Practices Act, and regulations promulgated thereunder, and similar state laws and similar laws in other countries); • Laws and regulations applicable to our insurance clients and their use of our insurance products and services; • Laws and regulations governing the use of the Internet and social media, telemarketing, advertising, endorsements and testimonials; • Antitrust and unfair competition laws; • Anti-money laundering laws and regulations (e.g., the Bank Secrecy Act and the USA PATRIOT Act); • Laws and regulations restricting transactions with sanctioned parties and regarding export controls as they apply to FICO products delivered in non-U.S. countries or to foreign nationals (e.g., Office of Foreign Asset Control sanctions and Export Administration Regulations); • Anti-bribery and corruption laws and regulations (e.g., the Foreign Corrupt Practices Act and the UK Bribery Act 2010); • Financial regulatory standards (e.g., Sarbanes-Oxley Act requirements to maintain and verify internal process controls, including controls for material event awareness and notification); • Laws and regulations that apply to outsourcing of services by our clients, and that set forth requirements for managing third parties (e.g., vendors, contractors, suppliers and distributors); and 26 Table of Contents • Laws and regulations relating to the environmental, social and sustainability practices of companies, including enhanced climate-related disclosure requirements from regulators, such as California’s climate disclosure rules and the E.U.’s Corporate Sustainability Reporting Directive.
Many of our products are sold by distributors or partners, and we intend to continue to market and distribute our products through these existing distributor and partner relationships, as well as invest resources to develop additional sales, distribution and marketing relationships. Our Scores segment relies on, among others, Experian, TransUnion and Equifax.
Many of our products are sold by distributors or partners, and we intend to continue to market and distribute our products through these existing distributor and partner relationships, as well as invest resources to develop additional sales, distribution and marketing relationships. For example, our Scores segment relies on, among others, Experian, TransUnion and Equifax.
Our business requires that we develop or obtain a reliable source of sufficient amounts of current and statistically relevant data to analyze transactions and update some of our products. In most cases, these data must be periodically updated and refreshed to enable our products to continue to work effectively in a changing environment.
Our business requires that we develop or obtain a reliable source of sufficient amounts of current and statistically relevant data to analyze transactions and update some of our products. In most cases, this data must be periodically updated and refreshed to enable our products to continue to work effectively in a changing environment.
We may need to defend claims that our products infringe intellectual property rights, and as a result we may: • incur significant defense costs or substantial damages; • be required to cease the use or sale of infringing products; • expend significant resources to develop or license a substitute non-infringing technology; • discontinue the use of some technology; or • be required to obtain a license under the intellectual property rights of the third-party claiming infringement, which license may not be available or might require substantial royalties or license fees that would reduce our margins.
We may need to defend claims that our products infringe intellectual property rights, and as a result we may: • incur significant defense costs or substantial damages; • be required to cease the use or sale of infringing products; 27 Table of Contents • expend significant resources to develop or license a substitute non-infringing technology; • discontinue the use of some technology; or • be required to obtain a license under the intellectual property rights of the third-party claiming infringement, which license may not be available or might require substantial royalties or license fees that would reduce our margins.
Our future success will depend, in part, upon our ability to: • innovate by internally developing new and competitive technologies; • use leading third-party technologies effectively; • continue to develop our technical expertise; • anticipate and effectively respond to changing customer needs; • initiate new product introductions in a way that minimizes the impact of customers delaying purchases of existing products in anticipation of new product releases; and • influence and respond to emerging industry standards and other technological changes.
Our future success will depend, in part, upon our ability to: • innovate by internally developing new and competitive technologies; • use leading third-party technologies effectively; • continue to develop our technical expertise; • anticipate and effectively respond to changing customer needs; • initiate new product introductions in a way that minimizes the impact of customers delaying purchases of existing products in anticipation of new product releases; and • influence and respond to emerging industry standards and other technological changes, including relating to AI.
Fair Credit Reporting Act and similar state laws); 24 Table of Contents • Special requirements that may apply when we provide products or services directly or indirectly to U.S. federal, state and local government agencies (e.g., the Privacy Act of 1974, the Internal Revenue Service’s Publication 4812, and the Federal Acquisition Regulation); • Laws and regulations that limit the use of credit scoring models (e.g., state “mortgage trigger” or “inquiries” laws, state insurance restrictions on the use of credit-based insurance scores, and the E.U.
Fair Credit Reporting Act and similar state laws); • Special requirements that may apply when we provide products or services directly or indirectly to U.S. federal, state and local government agencies (e.g., the Privacy Act of 1974, the Internal Revenue Service’s Publication 4812, and the Federal Acquisition Regulation); • Laws and regulations that limit the use of credit scoring models (e.g., state “mortgage trigger” or “inquiries” laws, state insurance restrictions on the use of credit-based insurance scores, and the E.U.
Responding to such claims, regardless of their merit, can be time consuming, costly to defend in litigation, divert management's attention and resources, damage our reputation and brand, and cause us to incur significant expenses. 26 Table of Contents Global Operational Risks In operations outside the U.S., we are subject to additional risks that may harm our business, financial condition or results of operations.
Responding to such claims, regardless of their merit, can be time consuming, costly to defend in litigation, divert management's attention and resources, damage our reputation and brand, and cause us to incur significant expenses. Global Operational Risks In operations outside the U.S., we are subject to additional risks that may harm our business, financial condition or results of operations.
Consumer Credit Directive); • Fair lending laws (e.g., the Equal Credit Opportunity Act and Regulation B, and the Fair Housing Act) and laws and regulations that may impose requirements relating to algorithmic fairness or accountability; • The Cybersecurity Act of 2015; the U.S.
Consumer Credit Directive); • Fair lending laws (e.g., the Equal Credit Opportunity Act and Regulation B, and the Fair Housing Act) and laws and regulations that may impose requirements relating to algorithmic fairness or accountability; • Data and cybersecurity laws and regulations, including: the Cybersecurity Act of 2015; the U.S.
If our clients’ industry experiences uncertainty, it will likely harm our business, financial condition or results of operations. During fiscal 2024, 92% of our revenues were derived from sales of products and services to the banking industry.
If our clients’ industry experiences uncertainty, it will likely harm our business, financial condition or results of operations. During fiscal 2025, 92% of our revenues were derived from sales of products and services to the banking industry.
We may be exposed to additional cybersecurity threats as we migrate our software solutions and data from our legacy systems to cloud-based solutions. We operate in an environment of significant risk of cybersecurity incidents resulting from unintentional events or deliberate attacks by third parties or insiders, which may involve exploiting security vulnerabilities or sophisticated attack methods.
We are exposed to additional cybersecurity threats as we continue to migrate our software solutions and data from our legacy systems to cloud-based solutions. We operate in an environment of significant risk of cybersecurity incidents resulting from unintentional events or deliberate attacks by third parties or insiders, which may involve exploiting security vulnerabilities or sophisticated attack methods.
In addition, increased attention on and use of artificial intelligence increases the risk of cyber-attacks and data breaches, which can occur more quickly and evolve more rapidly when artificial intelligence is used. Further, use of artificial intelligence by our employees, whether authorized or unauthorized, increases the risk that our intellectual property and other proprietary information will be unintentionally disclosed.
In addition, increased attention on and use of AI increases the risk of cyber-attacks and data breaches, which can occur more quickly and evolve more rapidly when AI is used. Further, use of AI by our employees, whether authorized or unauthorized, increases the risk that our intellectual property and other proprietary information will be unintentionally disclosed.
We expect there will continue to be an increased focus on laws and regulations related to our business and/or the business of our clients, including with regard to the operation of consumer reporting agencies, the collection, use, accuracy, correction and sharing of personal information, credit scoring, the use of artificial intelligence and machine learning, and algorithmic accountability and fair lending.
We expect there will continue to be an increased focus on laws and regulations related to our business and/or the business of our clients, including with regard to the operation of consumer reporting agencies, the collection, use, accuracy, correction and sharing of personal information, credit scoring, the use of AI and machine learning, and algorithmic accountability and fair lending.
The potential for future stress and disruptions, including in connection with geopolitical tensions, military conflicts, the level of inflation and the volatility of interest rates, presents considerable risks to our businesses and operations. These risks include potential bankruptcies or credit deterioration of financial institutions, many of which are our customers.
The potential for future stress and disruptions, including in connection with geopolitical tensions, military conflicts, trade policies and tariffs, the level of inflation and the volatility of interest rates, presents considerable risks to our businesses and operations. These risks include potential bankruptcies or credit deterioration of financial institutions, many of which are our customers.
Competition from distributors or other sales and marketing partners could significantly harm sales of our products and services. We will continue to rely upon proprietary technology rights, and if we are unable to protect them, our business could be harmed. Our success depends, in part, upon our proprietary technology and other intellectual property rights.
Competition from distributors or other sales and marketing partners could significantly harm sales of our products and services. We will continue to rely upon proprietary technology rights, and if we are unable to protect them, our business could be harmed. 20 Table of Contents Our success depends, in part, upon our proprietary technology and other intellectual property rights.
Software errors in our products could affect the ability of our products to work with other hardware or software products, could delay the development or release of new products or new versions of products, and could adversely affect market acceptance of our products.
These errors could affect the ability of our products to work with other hardware or software products, could delay the development or release of new products or new versions of products, and could adversely affect market acceptance of our products.
Our failure to do so could materially and adversely affect our business, financial condition, results of operations and prospects. 27 Table of Contents Financial Risks Our products have long and variable sales cycles. If we do not accurately predict these cycles, we may not forecast our financial results accurately, and our stock price could be adversely affected.
Our failure to do so could materially and adversely affect our business, financial condition, results of operations and prospects. Financial Risks Our products have long and variable sales cycles. If we do not accurately predict these cycles, we may not forecast our financial results accurately, and our stock price could be adversely affected.
If new laws, regulations or other governmental action result from this inquiry, or otherwise, that limit the fees that can be charged for credit scores by us, consumer reporting agencies, or end users of our FICO ® Scores, or that place other restrictions on the sale or distribution of credit scores, our ability in the future to increase pricing for FICO Scores used in mortgage originations may be impacted and thus the revenues and profitability of the FICO Score may be adversely affected and the growth of our Scores business may be constrained.
If new laws, regulations or other governmental action limit the fees that can be charged for credit scores by us, consumer reporting agencies, or end users of our FICO® Scores, or that place other restrictions on the sale or distribution of credit scores, our ability in the future to increase pricing for FICO Scores used in mortgage originations may be impacted and thus the revenues and profitability of the FICO Score may be adversely affected and the growth of our Scores business may be constrained.
Limitations imposed by immigration laws in the U.S. and abroad and the availability of visas in the countries where we do business could hinder our ability to attract necessary qualified personnel and harm our business and future operating results.
Limitations imposed by current and changing immigration laws in the U.S. and abroad and the availability of visas in the countries where we do business could hinder our ability to attract and retain necessary qualified personnel and harm our business and future operating results.
Material adverse developments in global economic conditions, or the occurrence of certain other world events, could affect demand for our products and services and harm our business. Purchases of technology products and services and decisioning solutions are subject to adverse economic conditions.
Material adverse developments in global economic conditions, or the occurrence of certain other world events, could affect demand for our products and services and harm our business. 28 Table of Contents Purchases of technology products and services and decisioning solutions are subject to adverse economic conditions.
There has also been increased focus more broadly on laws and regulations in the U.S. related to our business and the business of consumer reporting agencies, including by U.S. state and federal regulators such as the CFPB, relating to policy concerns with regard to the operation of consumer reporting agencies, the sale and distribution of credit scores and credit reports, the use and accuracy of credit and alternative data, the use of credit scores and fair lending, and the use, transparency, and fairness of algorithms, artificial intelligence, and machine learning in business processes.
There has also been increased focus more broadly on laws and regulations in the U.S. related to our business and the business of consumer reporting agencies, including by U.S. state and federal regulators, relating to policy concerns with regard to the operation of consumer reporting agencies, the sale and distribution of credit scores and credit reports, the use and accuracy of credit and alternative data, the use of credit scores and fair lending, and the use, transparency, and fairness of algorithms, AI, and machine learning in business processes.
In addition, the U.S. and other key international economies have periodically experienced downturns in which economic activity is impacted by falling demand for a variety of goods and services, increased volatility of interest rates, fluctuating rates of inflation, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies and overall uncertainty with respect to the economy.
In addition, the U.S. and other key international economies periodically experience downturns in which economic activity is impacted by falling demand for a variety of goods and services, increased volatility of interest rates, fluctuating rates of inflation, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, trade policies and tariffs, equity and foreign exchange markets, bankruptcies and overall uncertainty with respect to the economy.
Other countries, as well as the executive branch of the U.S. government and a number of U.S. states, are considering or have implemented regulations or standards applicable to the provision and use of artificial intelligence technologies.
Other countries, as well as the executive branch of the U.S. government and a number of U.S. states, are considering or have implemented laws, regulations or standards applicable to the provision and use of AI technologies.
Our ability to provide reliable products and services to our customers depends on the efficient and uninterrupted operation of our data centers, information technology and communication systems, and increasingly those of our external service providers.
Our ability to provide reliable products and services to our customers depends on the efficient and uninterrupted operation of our and our external service providers’ data centers, information technology and communication systems.
Our regional and global competitors vary in size and in the scope of the products and services they offer, and include: • in-house analytic and systems developers; • neural network developers and artificial intelligence system builders; • fraud solutions providers; • scoring model builders; • providers of credit reports and credit scores; • software companies supplying predictive analytic modeling, rules, or analytic development tools; • entity resolution and social network analysis solutions providers; • providers of customer engagement and risk management solutions; 18 Table of Contents • providers of account workflow management software; • business process management and decision rules management providers; • enterprise resource planning and customer relationship management solutions providers; • business intelligence solutions providers; • providers of automated application processing services; and • third-party professional services and consulting organizations.
Our regional and global competitors vary in size and in the scope of the products and services they offer, and include: • in-house analytic and systems developers; • developers and providers of neural networks, machine learning, and AI systems; • fraud solutions providers; • scoring model builders; • providers of credit reports and credit scores, including consumer reporting agencies; • software companies supplying predictive analytic modeling, rules, or analytic development tools; 19 Table of Contents • entity resolution and social network analysis solutions providers; • providers of customer engagement and risk management solutions; • providers of account workflow management software; • business process management and decision rules management providers; • enterprise resource planning and customer relationship management solutions providers; • business intelligence solutions providers; • providers of automated application processing services; and • third-party professional services and consulting organizations.
We believe much of the future growth of our business and the success of our business strategy will rest on our ability to continue to expand into newer markets for our products and services. Such areas are relatively new to our product development and sales and marketing personnel.
We also believe that much of the future growth of our business and the success of our business strategy may depend on our ability to continue to expand into newer markets for our products and services. Such areas are relatively new to our product development and sales and marketing personnel.
These factors and certain provisions of the Delaware General Corporation Law may have the effect of deterring hostile takeovers or otherwise delaying or preventing changes in control or changes in our management, including transactions in which our stockholders might otherwise receive a premium over the fair market value of our common stock. Item 1B. Unresolved Staff Comments Not applicable.
These factors and certain provisions of the Delaware General Corporation Law may have the effect of deterring hostile takeovers or otherwise delaying or preventing changes in control or changes in our management, including transactions in which our stockholders might otherwise receive a premium over the fair market value of our common stock. 30 Table of Contents Item 1B.
The market may be unreceptive to our general business approach, including being unreceptive to our cloud-based offerings, unreceptive to purchasing multiple products from us, or unreceptive to our customized solutions.
The market may be unreceptive to our general business approach, including being unreceptive to our cloud-based offerings and unreceptive to purchasing multiple products from us.
Any one or more of the foregoing occurrences could have a material adverse effect on our reputation, business, financial condition, cash flows and results of operations. The failure to obtain certain forms of model construction data from our customers or others could harm our business.
Any one or more of the foregoing occurrences could have a material adverse effect on our reputation, business, financial condition, cash flows and results of operations. The failure to obtain certain forms of data from our customers or others for our use in product development could harm our business.
As global economic conditions experience stress and negative volatility, or if there is an escalation in regional or global conflicts, or terrorism, we will likely experience reductions in the number of available customers and in capital expenditures by our remaining customers, longer sales cycles, deferral or delay of purchase commitments for our products and increased price competition, which may adversely affect our business, results of operations and liquidity.
As global economic conditions experience stress and negative volatility, including any stress or negative volatility related to the imposition of, and threatened imposition of, tariffs and retaliatory tariffs, economic sanctions and increased trade tensions or if there is an escalation in regional or global conflicts, or terrorism, we will likely experience reductions in the number of available customers and in capital expenditures by our remaining customers, longer sales cycles, deferral or delay of purchase commitments for our products and increased price competition, which may adversely affect our business, results of operations and liquidity.
A large portion of our revenues is derived from international sales. During fiscal 2024, 27% of our revenues were derived from business outside the U.S.
A large portion of our revenues is derived from international sales. During fiscal 2025, 23% of our revenues were derived from business outside the U.S.
In addition to the risk of depending on international sales, we have risks incurred in having research and development personnel located in various international locations. We currently have a substantial portion of our product development staff in international locations, some of which have political and developmental risks. If such risks materialize, our business could be damaged.
In addition to the risk of depending on international sales, we have risks incurred in having research and development personnel located in various international locations. We currently have a substantial portion of our product development staff in international locations, some of which have political and developmental risks.
This business strategy is designed to enable us to increase our business by selling multiple connectable and extensible products to clients, as well as to enable the development of custom client solutions and to allow our clients to more easily expand their usage and the use cases they enable over time.
This business strategy is designed to enable us to increase our business by selling multiple connectable and extensible products to clients, and to allow our clients to more easily expand their usage and the use cases they enable over time.
These divestitures involve risks, including: • disruption of our operations or businesses; • reductions of our revenues or earnings per share; • difficulties in the separation of operations, services, products and personnel; • failure to effectively transfer liabilities, contracts, facilities and employees to a purchaser; • divestiture terms that contain potential future purchase price adjustments or require that assets or liabilities be divested, managed or run off separately; • diversion of management's attention from our other businesses; • the potential loss of key personnel; • adverse effects on relationships with our customers, suppliers or their businesses; • the erosion of employee morale or customer confidence; and • the retention of contingent liabilities and the possibility that we will become subject to third-party claims related to the divested business. 20 Table of Contents If we do not successfully manage the risks associated with divestitures, our business, financial condition, and results of operations could be adversely affected as the potential strategic benefits may not be realized or may take longer to realize than expected.
These divestitures involve risks, including: • disruption of our operations or businesses; • reductions of our revenues or earnings per share; • difficulties in the separation of operations, services, products and personnel; • failure to effectively transfer liabilities, contracts, facilities and employees to a purchaser; • divestiture terms that contain potential future purchase price adjustments or require that assets or liabilities be divested, managed or run off separately; • diversion of management's attention from our other businesses; • the potential loss of key personnel; • adverse effects on relationships with our customers, suppliers or their businesses; • the erosion of employee morale or customer confidence; and 22 Table of Contents • the retention of contingent liabilities and the possibility that we will become subject to third-party claims related to the divested business.
Any cybersecurity breach, whether actual or perceived, could harm our reputation, erode customer confidence in the effectiveness of our security measures, negatively impact our ability to attract new customers, cause existing customers to curtail or cease their use of our products and services, cause regulatory or industry changes that impact our products and services, or subject us to third-party lawsuits, regulatory fines or other action or liability, all of which could materially and adversely affect our business and operating results. 22 Table of Contents If we experience business interruptions or failure of our information technology and communication systems, the availability of our products and services could be interrupted which could adversely affect our reputation, business and financial condition.
Any cybersecurity breach, whether actual or perceived, could harm our reputation, erode customer confidence in the effectiveness of our security measures, negatively impact our ability to attract new customers, cause existing customers to curtail or cease their use of our products and services, cause regulatory or industry changes that impact our products and services, or subject us to third-party lawsuits, regulatory fines or other action or liability, all of which could materially and adversely affect our business and operating results.
Our reengineering efforts may not be successful over the long term should we fail to reduce expenses or increase revenues to anticipated levels or at all. If our reengineering efforts are not successful over the long term, our revenues, results of operations and business may suffer. There can be no assurance that strategic divestitures will provide business benefits.
Our reengineering efforts may not be successful over the long term should we fail to reduce expenses or increase revenues to anticipated levels or at all. If our reengineering efforts are not successful over the long term, our revenues, results of operations and business may suffer.
Cybersecurity breaches could expose us to a risk of loss, the unauthorized disclosure of consumer or customer information, significant litigation, regulatory fines, penalties, loss of customers or reputational damage, indemnity obligations and other liability.
Cybersecurity breaches, including those that impact our third-party vendors and other security providers, could expose us to a risk of loss, the unauthorized disclosure of consumer or customer information, significant litigation, regulatory fines, penalties, loss of customers or reputational damage, indemnity obligations and other liability.
The labor market for these individuals, particularly in the complex technical disciplines of software engineering, data science, and cyber security, is very competitive due to the limited number of people available with the necessary technical skills and understanding to support our complex products and it may become more competitive with general market and economic improvement.
The labor market for these individuals, particularly in the complex disciplines of enterprise platform sales, software engineering, data science, AI and cybersecurity, is very competitive due to the limited number of people available with the necessary skills and understanding to build, sell and support our complex products and it may become more competitive with general market growth.
As part of our strategy, we continuously evaluate our portfolio of businesses. As a result of these reviews, we have made decisions to divest certain products and lines of business, and we may do so again in the future.
There can be no assurance that strategic divestitures will provide business benefits. As part of our strategy, we continuously evaluate our portfolio of businesses. As a result of these reviews, we have made decisions to divest certain products and lines of business, and we may do so again in the future.
Furthermore, such data transfer restrictions, which may involve interpretive issues, may have an adverse impact on cross-border transfers of personal data and may subject us and our customers to additional scrutiny from E.U. or U.K. data protection authorities.
Furthermore, such data transfer restrictions, which may involve interpretive issues, may have an adverse impact on cross-border transfers of personal data and may subject us and our customers to additional scrutiny from E.U. or U.K. data protection authorities. Numerous other countries have introduced and, in some cases, enacted, similar data privacy and cyber and data security laws.
If we are unable to develop new or enhanced products, or if we are not successful in introducing new or enhanced products, we may not be able to grow our business or growth may occur more slowly than we anticipate.
If we are unable to develop new, enhanced or improved products and services, including those that utilize AI technologies, or if we are not successful in introducing such products and services, we may not be able to grow our business or growth may occur more slowly than we anticipate.
Factors that might affect the market acceptance of these products and services include the following: • changes in the business analytics industry; • changes in technology; • our inability to obtain or use key data for our products; • saturation or contraction of market demand; • loss of key customers; • industry consolidation; • failure to successfully adopt cloud-based technologies; • our inability to obtain regulatory approvals for our products and services, including credit score models; • the increasing availability of free or relatively inexpensive consumer credit, credit score and other information from public or commercial sources; • failure to execute our selling approach; and • inability to successfully sell our products in new vertical markets. 16 Table of Contents If we are unable to successfully develop new products or new versions of products, or if we experience defects, failures or delays associated with the introduction of new products or of new versions of products, our business could suffer serious harm.
Factors that might affect the market acceptance of these products and services include the following: • changes in the business analytics industry; • changes in technology, including increased use of artificial intelligence (“AI”); • our inability to obtain or use key data for our products; • saturation or contraction of market demand; • loss of key customers; • industry consolidation; • failure to successfully adopt cloud-based technologies; • our inability to obtain regulatory approvals for our products and services, including credit score models; • the increasing availability of free or relatively inexpensive consumer credit, credit score and other information from public or commercial sources, including those that use AI technologies; • failure to execute our selling approach; and • inability to successfully sell our products in new vertical markets.
While we expand our sales into international markets, the risks are greater as these markets are also experiencing substantial disruption and we are less well-known in them.
While we expand our sales into international markets, the risks are greater as some of these markets have experienced and may in the future experience substantial disruption and we are less well-known in them.
Laws and governmental regulation affect how our business is conducted and, in some cases, subject us to the possibility of government supervision or enforcement and future lawsuits arising from our products and services. Laws and governmental regulations also influence our current and prospective customers’ activities, as well as their expectations and needs in relation to our products and services.
Laws and governmental regulation affect how our business is conducted and, in some cases, subject us to the possibility of government supervision or enforcement and future lawsuits arising from our products and services.
Additionally, effective January 1, 2023, the California Privacy Rights Act (the “CPRA”) revised and significantly expanded the scope of the CCPA. The CPRA also created a new agency, the California Privacy Protection Agency, authorized to implement and enforce the CCPA and the CPRA.
Additionally, effective January 1, 2023, the California Privacy Rights Act (the “CPRA”) revised and significantly expanded the scope of the CCPA. The CPRA also created a new agency, the California Privacy Protection Agency, authorized to implement and enforce the CCPA and the CPRA. Numerous other U.S. states have passed similar privacy laws, and other states are considering such legislation.
Our business strategy and our future success will depend in large part on our ability to attract and retain experienced sales, consulting, research and development, marketing, technical support and management personnel.
The failure to recruit and retain qualified personnel could hinder our ability to successfully manage our business. 24 Table of Contents Our business strategy and our future success will depend in large part on our ability to attract and retain experienced sales, consulting, research and development, marketing, technical support and management personnel.
The EU AI Act entered into force on August 1, 2024, and its provisions take effect between six and 36 months after that date, with most of those provisions becoming effective in 2026.
The European Commission has finalized the EU AI Act, which establishes requirements for the provision and use of products that leverage AI systems, including in credit scoring. The EU AI Act entered into force on August 1, 2024, and its provisions take effect between six and 36 months after that date, with most of those provisions becoming effective in 2026.
There can be no assurance that our protection of our intellectual property rights in the U.S. or abroad will be adequate or that others, including our competitors, will not use our proprietary technology without our consent.
The extent to which our intellectual property rights can be protected differs by jurisdiction, and is rapidly evolving with respect to AI technologies. There can be no assurance that our protection of our intellectual property rights in the U.S. or abroad will be adequate or that others, including our competitors, will not use our proprietary technology without our consent.
Numerous other countries have introduced and, in some cases, enacted, similar data privacy and cyber and data security laws. 25 Table of Contents The California Consumer Privacy Act of 2018 (“CCPA”) gives California residents certain privacy rights in the collection and disclosure of their personal information and requires businesses to make certain disclosures and take certain other acts in furtherance of those rights.
The California Consumer Privacy Act of 2018 (“CCPA”) gives California residents certain privacy rights in the collection and disclosure of their personal information and requires businesses to make certain disclosures and take certain other acts in furtherance of those rights.
Other changes implemented by FHFA, Fannie Mae or Freddie Mac could also affect the demand for FICO Scores and thus could have similar adverse effects on our business, including, for example, a change permitting mortgage originators to underwrite loans using credit scores from only two of the three national consumer reporting agencies (a “bi-merge report”) rather than from all three (a “tri-merge report”).
Other changes implemented by FHFA, Fannie Mae or Freddie Mac could also affect the demand for FICO Scores and thus could have similar adverse effects on our business, including, for example, the change announced by the FHFA Director in July 2025 permitting mortgage originators to choose the credit score they submit with mortgages delivered to Fannie Mae and Freddie Mac or a potential future change permitting mortgage originators to underwrite loans using credit scores from fewer than three national consumer reporting agencies.
We expect our future growth to depend, in part, on the sale of products and service solutions in industries and markets we do not currently serve. We also expect to grow our business by delivering our solutions through additional sales and distribution channels.
If we are unable to access new markets or develop new sales and distribution channels, our business and growth prospects could suffer. We expect our future growth to depend, in part, on the sale of products and service solutions in industries and markets we do not currently serve.
If we fail to penetrate these industries and markets to the degree we anticipate, or if we fail to develop additional sales and distribution channels, we may not be able to grow our business, growth may occur more slowly than we anticipate, or our revenues and profits may decline.
If we fail to penetrate these industries and markets to the degree we anticipate, or if we fail to develop additional sales and distribution channels, we may not be able to grow our business, growth may occur more slowly than we anticipate, or our revenues and profits may decline. 21 Table of Contents Our acquisition activities may disrupt our ongoing business and may involve increased expenses, and we may not realize the financial and strategic goals contemplated at the time of a transaction.
Furthermore, litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others.
Furthermore, litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of resources and could harm our business, financial condition or results of operations.
There can be no assurance that the outcomes from such examinations will not have an adverse effect on our operating results and financial condition. Our stock price has been subject to fluctuations, and will likely continue to be subject to fluctuations, or may decline, regardless of our operating performance.
There can be no assurance that the outcomes from such examinations will not have an adverse effect on our operating results and financial condition.
Because a successful breach of our computer systems, software, networks or other technology asset could occur and persist for an extended period of time before being detected, we may not be able to immediately address the consequences of a cybersecurity incident.
Because a successful breach of our computer systems, software, networks or other technology asset could occur and persist for an extended period of time before being detected, we may not be able to immediately address the consequences of a cybersecurity incident. 23 Table of Contents Malicious third parties may also conduct attacks designed to temporarily deny customers, distributors and vendors access to our systems and services, and may demand payment by us in order to restore access.
Health epidemics or disease outbreaks could impact the rate of spending on our solutions and could adversely affect our customers’ ability or willingness to purchase our products and services, cause prospective customers to change product selections or term commitments, delay or cancel their purchasing decisions, extend sales cycles, and potentially increase payment defaults, all of which could adversely affect our future revenues, results of operations and overall financial performance. 21 Table of Contents Operational Risks If our cybersecurity measures are compromised or unauthorized access to customer or consumer data is otherwise obtained, our products and services may be perceived as not being secure, customers may curtail or cease their use of our products and services, our reputation may be damaged and we could incur significant liabilities.
Health epidemics or disease outbreaks could impact the rate of spending on our solutions and could adversely affect our customers’ ability or willingness to purchase our products and services, cause prospective customers to change product selections or term commitments, delay or cancel their purchasing decisions, extend sales cycles, and potentially increase payment defaults, all of which could adversely affect our future revenues, results of operations and overall financial performance.
The failure of the value of our stock to appreciate may adversely affect our ability to use equity and equity-based incentive plans to attract and retain personnel, and may require us to use alternative forms of compensation for this purpose. 23 Table of Contents Legal, Regulatory and Compliance Risks Increased regulatory focus on U.S. residential mortgage closing costs may affect our ability to implement price changes for FICO ® Scores used in mortgage originations and thus limit the revenues and profitability of the FICO Score.
Legal, Regulatory and Compliance Risks Increased regulatory focus on U.S. residential mortgage closing costs may affect our ability to implement price changes for FICO ® Scores used in mortgage originations and thus limit the revenues and profitability of the FICO Score.
If our current or potential customers are not willing to switch to or adopt our new products and services, either as a result of the quality of these products and services or due to other factors, such as economic conditions, our revenues will decrease.
Products and services that we plan to market in the future are in various stages of development. If these newer markets are not willing to adopt our products and services, either as a result of the quality of these products and services or due to other factors, such as economic conditions, our revenues may decrease.
We are subject to federal and state income taxes in the U.S. and in certain foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes.
If we experience changes in tax laws or adverse outcomes resulting from examination of our income tax returns, it could adversely affect our results of operations. We are subject to federal and state income taxes in the U.S. and in certain foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes.
Under these contracts with the U.S. government, the results of research may be made public by the government, limiting our competitive advantage with respect to future products based on our research. If we are unable to access new markets or develop new sales and distribution channels, our business and growth prospects could suffer.
Under these contracts with the U.S. government, the results of research may be made public by the government, limiting our competitive advantage with respect to future products based on our research. If we fail to keep up with rapidly changing technologies, our products could become less competitive or obsolete.
Any interruption of our supply of data could seriously harm our business, financial condition or results of operations. The failure to recruit and retain qualified personnel could hinder our ability to successfully manage our business.
Any interruption of our supply of data could seriously harm our business, financial condition or results of operations.
If we fail to keep up with rapidly changing technologies, our products could become less competitive or obsolete. In our markets, technology changes rapidly, and there are continuous improvements in computer hardware, network operating systems, programming tools, programming languages, operating systems, database technologies, cloud-based technologies and the use of the Internet.
In our markets, technology changes rapidly, and there are continuous improvements in computer hardware, network operating systems, programming tools, programming languages, operating systems, database technologies, cloud-based technologies and the use of the Internet. For example, AI technologies, including generative AI, and their use are currently undergoing rapid change.
Such litigation could result in substantial costs and diversion of resources and could harm our business, financial condition or results of operations. 19 Table of Contents Some of our technologies were developed under research projects conducted under agreements with various U.S. government agencies or subcontractors.
Some of our technologies were developed under research projects conducted under agreements with various U.S. government agencies or subcontractors.
Our revenues, results of operations and overall financial performance may be negatively impacted by health epidemics or other disease outbreaks. Our customers, and therefore our business and revenues, are sensitive to negative changes in general economic conditions and lending activities.
Our customers, and therefore our business and revenues, are sensitive to negative changes in general economic conditions and lending activities.
Our ability to increase our revenues will depend to some extent upon introducing new products and services and upon introducing enhancements and improvements to existing products and services. If the marketplace does not accept these new, enhanced or improved products and services, our revenues may decline.
Our ability to increase our revenues depends to some extent upon introducing new products and services, upon introducing enhancements and improvements to existing products and services and upon entering new markets for products and services.
Our acquisition activities may disrupt our ongoing business and may involve increased expenses, and we may not realize the financial and strategic goals contemplated at the time of a transaction. We have acquired, and may in the future acquire, companies, businesses, products, services and technologies.
We have acquired, and may in the future acquire, companies, businesses, products, services and technologies.
For example, in May 2024, the CFPB launched a public inquiry to obtain information on fees charged by providers of mortgages and related settlement services in the U.S. residential mortgage market, including fees for credit reports and credit scores.
There has been increased regulatory focus in the U.S. related to the transparency and fairness of certain fees charged to consumers in connection with the closing of a residential mortgage loan, including fees for credit reports and credit scores.
Greater than anticipated expenses or a failure to maintain rigorous cost controls would also negatively affect profitability. 28 Table of Contents General Risk Factors If we experience changes in tax laws or adverse outcomes resulting from examination of our income tax returns, it could adversely affect our results of operations.
Greater than anticipated expenses or a failure to maintain rigorous cost controls would also negatively affect profitability. General Risk Factors Our stock price has been subject to fluctuations, and will likely continue to be subject to fluctuations, or may decline, regardless of our operating performance.
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Our growth and the success of our business strategy depend upon our ability to develop and sell new products and new versions of products, including the development and sale of our cloud-based product offerings and our scoring solutions.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Board of Directors’ responsibility is to monitor the Company’s risk management processes by informing itself concerning our material risks and evaluating whether management has reasonable controls in place to address the material risks.
Biggest changeBoard Oversight and Governance Our management is responsible for identifying the various risks facing the Company, formulating risk management policies and procedures, and managing the Company’s risk exposures. Our Board responsibility is to monitor the Company’s risk management processes by informing itself concerning our material risks and evaluating whether management has reasonable controls in place to address the material risks.
These teams are expected to operate pursuant to documented plans and playbooks that include processes for escalation of incidents to leadership and to the Audit Committee and Board, as appropriate, based on the severity level of an incident.
These teams are expected to operate pursuant to documented plans and playbooks that include processes for escalation of incidents to leadership and to the Audit Committee and the Board, as appropriate, based on the severity level of an incident.
The Audit Committee of the Board of Directors is responsible for discussing with management the Company’s major risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies.
The Audit Committee of the Board is responsible for discussing with management the Company’s major risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies.
Additional information on the cybersecurity risks that could materially affect us is discussed in Part I, Item 1A, “Risk Factors.” Management Oversight and Governance The Company’s Chief Information Security Officer (“CISO”), who reports to the Executive Vice President, Software, is responsible for the design and implementation of our security program and strategy based on the mandate provided by the Board and senior management.
Additional information on the cybersecurity risks that could materially affect us is discussed in Part I, Item 1A, “Risk Factors.” Management Oversight and Governance The Company’s Chief Information Security Officer (“CISO”), who reports to the President, Software, is responsible for the design and implementation of our security program and strategy based on the mandate provided by the Board and senior management.
The Company maintains a Threat Intelligence team focused on profiling, intelligence collection, and threat analysis supporting the Company’s ongoing efforts to identify, assess and manage cybersecurity threats. The team’s input supports both near-term response to cybersecurity events, and long-term strategic planning and development of the Company’s cybersecurity risk management framework. 30 Table of Contents • Technical Safeguards .
The Company maintains a Threat Intelligence team focused on profiling, intelligence collection, and threat analysis supporting the Company’s ongoing efforts to identify, assess and manage cybersecurity threats. The team’s input supports both near-term response to cybersecurity events, and long-term strategic planning and development of the Company’s cybersecurity risk management framework. • Technical Safeguards .
We seek to address material cybersecurity risks through a company-wide approach that assesses, ranks and prioritizes cybersecurity threats, vulnerabilities and issues as they are identified to maintain the confidentiality, integrity and availability of our information systems and the information that we collect and store.
We employ an experienced team of cybersecurity professionals with a variety of backgrounds. We seek to address material cybersecurity risks through a company-wide approach that assesses, ranks and prioritizes cybersecurity threats, vulnerabilities and issues as they are identified to maintain the confidentiality, integrity and availability of our information systems and the information that we collect and store.
To defend, detect and respond to cybersecurity incidents, we, among other things: conduct proactive privacy and cybersecurity reviews of systems and applications, audit applicable data policies, perform penetration testing using external third-party tools and techniques to test security controls, conduct employee training, monitor emerging laws and regulations related to data protection and information security (including our consumer products) and implement appropriate changes. 29 Table of Contents We employ an experienced team of cybersecurity professionals with a variety of backgrounds.
To defend, detect and respond to cybersecurity incidents, we, among other things: conduct proactive privacy and cybersecurity reviews of systems and applications, audit applicable data policies, perform penetration testing using external third-party tools and techniques to test security controls, conduct employee training, monitor emerging laws and regulations related to data protection and information security (including our consumer products) and implement appropriate changes.
Accordingly, our internal risk management team regularly reports to the Audit Committee on our major risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies. The Audit Committee, in turn, reports on the matters discussed at the committee level to the full Board of Directors.
Accordingly, our internal risk management team regularly reports to the Audit Committee on our major risk exposures and the steps management has taken to monitor and control such exposures, including our risk assessment and risk management policies.
The CISO, in coordination with other members of senior management, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
We believe the Company’s business leaders have the appropriate expertise, background and depth of experience to manage risks arising from cybersecurity threats. 31 Table of Contents The CISO, in coordination with other members of senior management, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to cybersecurity incidents in accordance with the Company’s incident response and recovery plans.
As part of its oversight of the Company’s risk management noted above, the Audit Committee oversees, reviews and discusses with management the Company’s risks from cybersecurity threats and management’s role in assessing and managing such risks.
The Audit Committee, in turn, reports on the matters discussed at the committee level to the full Board. 32 Table of Contents As part of its oversight of the Company’s risk management noted above, the Audit Committee oversees, reviews and discusses with management the Company’s risks from cybersecurity threats and management’s role in assessing and managing such risks.
Removed
We believe the Company’s business leaders have the appropriate expertise, background and depth of experience to manage risks arising from cybersecurity threats.
Removed
Board Oversight and Governance Our management is responsible for identifying the various risks facing the Company, formulating risk management policies and procedures, and managing the Company’s risk exposures.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The Company’s headquarters are located in Bozeman, Montana. As of September 30, 2024, the Company leased office facilities in geographically dispersed locations primarily for corporate functions, sales, research and development, data centers and other purposes.
Biggest changeItem 2. Properties The Company’s headquarters are located in Bozeman, Montana. As of September 30, 2025, the Company leased office facilities in geographically dispersed locations primarily for corporate functions, sales, research and development, data centers and other purposes.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) July 1, 2024 through July 31, 2024 54,370 $ 1,561.79 53,777 $ 1,000,000,000 August 1, 2024 through August 31, 2024 69,769 $ 1,721.45 69,503 $ 880,324,741 September 1, 2024 through September 30, 2024 64,985 $ 1,853.71 64,661 $ 760,475,383 189,124 $ 1,721.00 187,941 $ 760,475,383 (1) Includes 1,183 shares delivered in satisfaction of the tax withholding obligations resulting from the vesting of restricted stock units held by employees during the quarter ended September 30, 2024.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) July 1, 2025 through July 31, 2025 131,572 $ 1,620.27 131,046 $ 667,795,277 August 1, 2025 through August 31, 2025 145,749 $ 1,373.86 145,457 $ 467,959,531 September 1, 2025 through September 30, 2025 81,456 $ 1,528.23 81,376 $ 343,600,296 358,777 $ 1,499.27 357,879 $ 343,600,296 (1) Includes 898 shares delivered in satisfaction of the tax withholding obligations resulting from the vesting of restricted stock units held by employees during the quarter ended September 30, 2025.
Payment of future cash dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, outstanding indebtedness, plans for expansion and restrictions imposed by our debt arrangements, if any. Unregistered Sales of Equity Securities and Use of Proceeds Not applicable.
Payment of future cash dividends, if any, will be at the discretion of our Board after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, outstanding indebtedness, plans for expansion and restrictions imposed by our debt arrangements, if any. Unregistered Sales of Equity Securities and Use of Proceeds Not applicable.
The July 2024 program is open-ended and authorizes repurchases of shares of our common stock from time to time up to an aggregate cost of $1.0 billion in the open market or in negotiated transactions.
The June 2025 program is open-ended and authorizes repurchases of shares of our common stock from time to time up to an aggregate cost of $1.0 billion in the open market or in negotiated transactions.
Our past performance may not be indicative of future performance. Item 6. [Reserved] 34 Table of Contents
Our past performance may not be indicative of future performance. Item 6. [Reserved] 35 Table of Contents
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the New York Stock Exchange under the symbol: FICO. According to records of our transfer agent, at October 24, 2024, we had 223 stockholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the New York Stock Exchange under the symbol: FICO. According to records of our transfer agent, at October 23, 2025, we had 208 stockholders of record of our common stock.
The July 2024 program remains in effect until the total authorized amount is expended or until further action by our Board of Directors. 33 Table of Contents Performance Graph The following graph shows the total stockholder return of an investment of $100 in cash on September 30, 2019, in (a) the Company’s common stock, (b) the Standard & Poor’s 500 Stock Index and (c) the Standard & Poor’s 500 Application Software Index, in each case with reinvestment of dividends.
The June 2025 program remains in effect until the total authorized amount is expended or until further action by our Board. 34 Table of Contents Performance Graph The following graph shows the total stockholder return of an investment of $100 in cash on September 30, 2020, in (a) the Company’s common stock, (b) the Standard & Poor’s 500 Stock Index and (c) the Standard & Poor’s 500 Application Software Index, in each case with reinvestment of dividends.
(2) In January 2024, our Board of Directors approved a stock repurchase program (the “January 2024 program”), replacing our previously authorized October 2022 stock repurchase program, which was terminated prior to its expiration.
(2) In June 2025, our Board approved a new stock repurchase program (the “June 2025 program”), replacing the previously authorized July 2024 stock repurchase program, which was terminated prior to its expiration.
Removed
The January 2024 program was open-ended and authorized repurchases of shares of our common stock from time to time up to an aggregate cost of $500.0 million in the open market or in negotiated transactions.
Removed
In July 2024, our Board of Directors approved a new stock repurchase program (the “July 2024 program”), replacing the January 2024 program, which was terminated prior to its expiration and under which $29.6 million was remaining for repurchase at the time of termination.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOperating Expenses and Other Income (Expense), Net The following tables set forth certain summary information related to our consolidated statements of income and comprehensive income for fiscal 2024, 2023 and 2022: Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change 2024 2023 2022 2024 to 2023 2023 to 2022 2024 to 2023 2023 to 2022 (In thousands, except employees) (In thousands, except employees) Revenues $ 1,717,526 $ 1,513,557 $ 1,377,270 $ 203,969 $ 136,287 13 % 10 % Operating expenses: Cost of revenues 348,206 311,053 302,174 37,153 8,879 12 % 3 % Research and development 171,940 159,950 146,758 11,990 13,192 7 % 9 % Selling, general and administrative 462,834 400,565 383,863 62,269 16,702 16 % 4 % Amortization of intangible assets 917 1,100 2,061 (183) (961) (17) % (47) % Gain on product line asset sale — (1,941) — 1,941 (1,941) (100) % — % Total operating expenses 983,897 870,727 834,856 113,170 35,871 13 % 4 % Operating income 733,629 642,830 542,414 90,799 100,416 14 % 19 % Interest expense, net (105,638) (95,546) (68,967) (10,092) (26,579) 11 % 39 % Other income (expense), net 14,034 6,340 (2,138) 7,694 8,478 121 % (397) % Income before income taxes 642,025 553,624 471,309 88,401 82,315 16 % 17 % Provision for income taxes 129,214 124,249 97,768 4,965 26,481 4 % 27 % Net income $ 512,811 $ 429,375 $ 373,541 83,436 55,834 19 % 15 % Number of employees at fiscal year-end 3,586 3,455 3,404 131 51 4 % 1 % 39 Table of Contents Percentage of Revenues Year Ended September 30, 2024 2023 2022 Revenues 100 % 100 % 100 % Operating expenses: Cost of revenues 20 % 21 % 22 % Research and development 10 % 11 % 11 % Selling, general and administrative 27 % 26 % 28 % Amortization of intangible assets — % — % — % Gain on product line asset sale — % — % — % Total operating expenses 57 % 58 % 61 % Operating income 43 % 42 % 39 % Interest expense, net (6) % (6) % (5) % Other income (expense), net 1 % — % — % Income before income taxes 38 % 36 % 34 % Provision for income taxes 8 % 8 % 7 % Net income 30 % 28 % 27 % Cost of Revenues Cost of revenues consists primarily of employee salaries, incentives, and benefits for personnel directly involved in delivering software products, operating SaaS infrastructure, and providing support, implementation and consulting services; overhead, facilities and data center costs; software royalty fees; credit bureau data and processing services; third-party hosting fees related to our SaaS services; travel costs; and outside services.
Biggest changeOperating Expenses and Other Income (Expense), Net The following tables set forth certain summary information related to our consolidated statements of income and comprehensive income for fiscal 2025, 2024 and 2023: Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change 2025 2024 2023 2025 to 2024 2024 to 2023 2025 to 2024 2024 to 2023 (In thousands, except employees) (In thousands, except employees) Revenues $ 1,990,869 $ 1,717,526 $ 1,513,557 $ 273,343 $ 203,969 16 % 13 % Operating expenses: Cost of revenues 353,722 348,206 311,053 5,516 37,153 2 % 12 % Research and development 188,347 171,940 159,950 16,407 11,990 10 % 7 % Selling, general and administrative 513,028 462,834 400,565 50,194 62,269 11 % 16 % Amortization of intangible assets — 917 1,100 (917) (183) (100) % (17) % Restructuring charges 10,922 — — 10,922 — — % — % Gain on product line asset sale — — (1,941) — 1,941 — % (100) % Total operating expenses 1,066,019 983,897 870,727 82,122 113,170 8 % 13 % Operating income 924,850 733,629 642,830 191,221 90,799 26 % 14 % Interest expense, net (133,647) (105,638) (95,546) (28,009) (10,092) 27 % 11 % Other income, net 11,392 14,034 6,340 (2,642) 7,694 (19) % 121 % Income before income taxes 802,595 642,025 553,624 160,570 88,401 25 % 16 % Provision for income taxes 150,649 129,214 124,249 21,435 4,965 17 % 4 % Net income $ 651,946 $ 512,811 $ 429,375 139,135 83,436 27 % 19 % Number of employees at fiscal year-end 3,811 3,586 3,455 225 131 6 % 4 % 40 Table of Contents Percentage of Revenues Year Ended September 30, 2025 2024 2023 Revenues 100 % 100 % 100 % Operating expenses: Cost of revenues 18 % 20 % 21 % Research and development 9 % 10 % 11 % Selling, general and administrative 26 % 27 % 26 % Amortization of intangible assets — % — % — % Restructuring charges 1 % — % — % Gain on product line asset sale — % — % — % Total operating expenses 54 % 57 % 58 % Operating income 46 % 43 % 42 % Interest expense, net (7) % (6) % (6) % Other income, net 1 % 1 % — % Income before income taxes 40 % 38 % 36 % Provision for income taxes 7 % 8 % 8 % Net income 33 % 30 % 28 % Cost of Revenues Cost of revenues consists primarily of employee salaries, incentives, and benefits for personnel directly involved in delivering software products, operating SaaS infrastructure, and providing support, implementation and consulting services; overhead, facilities and data center costs; software royalty fees; consumer reporting agency data and processing services; third-party hosting fees related to our SaaS services; travel costs; and outside services.
Therefore, we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully understanding and evaluating our reported financial results. 45 Table of Contents Revenue Recognition For our SaaS subscriptions, we estimate the total variable consideration at contract inception — subject to any constraints that may apply — and update the estimates as new information becomes available and recognize the amount ratably over the SaaS service period, unless we determine it is appropriate to allocate the variable amount to each distinct service period and recognize revenue as each distinct service period is performed.
Therefore, we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully understanding and evaluating our reported financial results. 46 Table of Contents Revenue Recognition For our SaaS subscriptions, we estimate the total variable consideration at contract inception — subject to any constraints that may apply — and update the estimates as new information becomes available and recognize the amount ratably over the SaaS service period, unless we determine it is appropriate to allocate the variable amount to each distinct service period and recognize revenue as each distinct service period is performed.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes the following: a business overview that provides a high-level summary of our strategies and initiatives, highlights from fiscal year 2024 and key performance metrics for our Software segment; a more detailed analysis of our results of operations; our capital resources and liquidity, which discusses key aspects of our statements of cash flows, changes in our balance sheets and our financial commitments; and a summary of our critical accounting estimates that involve a significant level of estimation uncertainty.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes the following: a business overview that provides a high-level summary of our strategies and initiatives, highlights from fiscal year 2025 and key performance metrics for our Software segment; a more detailed analysis of our results of operations; our capital resources and liquidity, which discusses key aspects of our statements of cash flows, changes in our balance sheets and our financial commitments; and a summary of our critical accounting estimates that involve a significant level of estimation uncertainty.
Interest Expense, Net Interest expense includes interest on the senior notes issued in December 2021, December 2019, and May 2018, as well as interest and credit agreement fees on the revolving line of credit and term loans.
Interest Expense, Net Interest expense includes interest on the senior notes issued in May 2025, December 2021, December 2019, and May 2018, as well as interest and credit agreement fees on the revolving line of credit and term loans.
(2) Represents purchase obligations primarily consisting of commitments to purchase certain services. For services that have been delivered under these arrangements as of September 30, 2024, we recorded related liabilities within accounts payable or other accrued liabilities on our consolidated balance sheet, which are excluded from the purchase obligations amount. (3) Represents unrecognized tax benefits related to uncertain tax positions.
(2) Represents purchase obligations primarily consisting of commitments to purchase certain services. For services that have been delivered under these arrangements as of September 30, 2025, we recorded related liabilities within accounts payable or other accrued liabilities on our consolidated balance sheet, which are excluded from the purchase obligations amount. (3) Represents unrecognized tax benefits related to uncertain tax positions.
Actual results may differ from those referred to herein due to a number of factors, including but not limited to risks described in Item 1A, Risk Factors , in this Annual Report on Form 10-K. Our MD&A focuses on discussion of year-over-year comparisons between fiscal 2024 and fiscal 2023.
Actual results may differ from those referred to herein due to a number of factors, including but not limited to risks described in Item 1A, Risk Factors , in this Annual Report on Form 10-K. Our MD&A focuses on discussion of year-over-year comparisons between fiscal 2025 and fiscal 2024.
Under our current financing arrangements, we have no other significant debt obligations maturing over the next twelve months. For jurisdictions outside the U.S. where cash may be repatriated in the future, the Company expects the net impact of any repatriations to be immaterial to the Company’s overall tax liability.
Under our current financing arrangements, we have no other significant debt obligations maturing over the next 12 months. For jurisdictions outside the U.S. where cash may be repatriated in the future, the Company expects the net impact of any repatriations to be immaterial to the Company’s overall tax liability.
Discussion of fiscal 2022 results and year-over-year comparisons between fiscal 2023 and fiscal 2022 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.
Discussion of fiscal 2023 results and year-over-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended September 30, 2024.
See Note 12 to the accompanying consolidated financial statements for further discussion of our share-based employee benefit plans. Income Taxes We estimate our income taxes based on the various jurisdictions where we conduct business, which involves significant judgment in determining our income tax provision.
See Note 13 to the accompanying consolidated financial statements for further discussion of our share-based employee benefit plans. Income Taxes We estimate our income taxes based on the various jurisdictions where we conduct business, which involves significant judgment in determining our income tax provision.
BUSINESS OVERVIEW Strategies and Initiatives In fiscal 2024, our B2B scoring solutions, including the flagship FICO ® Score, continued to be the standard measure of consumer credit risk in the U.S.
BUSINESS OVERVIEW Strategies and Initiatives In fiscal 2025, our B2B scoring solutions, including the flagship FICO ® Score, continued to be the standard measure of consumer credit risk in the U.S.
Other Income (Expense), Net Other income (expense), net consists primarily of unrealized investment gains/losses and realized gains/losses on certain investments classified as trading securities, exchange rate gains/losses resulting from remeasurement of foreign-currency-denominated receivable and cash balances held by our various reporting entities into their respective functional currencies at period-end market rates, net of the impact of offsetting foreign currency forward contracts, and other non-operating items.
Other Income, Net Other income, net consists primarily of unrealized investment gains/losses and realized gains/losses on marketable securities classified as trading securities, exchange rate gains/losses resulting from remeasurement of foreign-currency-denominated receivable and cash balances held by our various reporting entities into their respective functional currencies at period-end market rates, net of the impact of offsetting foreign currency forward contracts, and other non-operating items.
We assess goodwill for impairment for each of our reporting units on an annual basis during our fourth fiscal quarter using a July 1 measurement date unless circumstances require a more frequent measurement. 46 Table of Contents We have determined that our reporting units are the same as our reportable segments.
We assess goodwill for impairment for each of our reporting units on an annual basis during our fourth fiscal quarter using a July 1 measurement date unless circumstances require a more frequent measurement. We have determined that our reporting units are the same as our reportable segments.
An increase in the valuation allowance would have an adverse impact, which could be material, on our income tax provision and net income in the period in which we record the increase. 47 Table of Contents We recognize and measure benefits for uncertain tax positions using a two-step approach.
An increase in the valuation allowance would have an adverse impact, which could be material, on our income tax provision and net income in the period in which we record the increase. We recognize and measure benefits for uncertain tax positions using a two-step approach.
The July 2024 program is open-ended and authorizes repurchases of shares of our common stock from time to time up to an aggregate cost of $1.0 billion in the open market or in negotiated transactions. The July 2024 program remains in effect until the total authorized amount is expended or until further action by our Board of Directors.
The June 2025 program is open-ended and authorizes repurchases of shares of our common stock from time to time up to an aggregate cost of $1.0 billion in the open market or in negotiated transactions. The June 2025 program remains in effect until the total authorized amount is expended or until further action by our Board.
Borrowings under the revolving line of credit and the $300 Million Term Loan can be used for working capital and general corporate purposes and may also be used for the refinancing of existing debt, acquisitions, and the repurchase of our common stock.
Borrowings under the revolving line of credit can be used for working capital and general corporate purposes and may also be used for the refinancing of existing debt, acquisitions, and the repurchase of our common stock.
The 2019 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028.
The 2021 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028, the same date as the 2019 Senior Notes.
Cost of revenues as a percentage of revenues decreased to 20% during fiscal 2024 from 21% during fiscal 2023, primarily due to increased sales of our higher-margin Scores products.
Cost of revenues as a percentage of revenues decreased to 18 % during fiscal 2025 from 20% during fiscal 2024, primarily due to increased sales of our higher-margin Scores products.
RESULTS OF OPERATIONS 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.
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.
Interest rates on amounts borrowed under the revolving line of credit and the $300 Million Term Loan are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5%, and (c) one-month adjusted term Secured Overnight Financing Rate (“SOFR”) plus 1%, plus, in each case, an applicable margin, or (ii) an adjusted term SOFR plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement) .
Interest rates on amounts borrowed under the revolving line of credit are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5%, and (c) the Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 1%, plus, in each case, an applicable margin, (ii) the Daily Simple SOFR plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement), or (iii) term SOFR (without a credit spread adjustment) plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement).
The January 2024 program was open-ended and authorized repurchases of shares of our common stock from time to time up to an aggregate cost of $500.0 million in the open market or in negotiated transactions.
The July 2024 program was open-ended and authorized repurchases of shares of our common stock from time to time up to an aggregate cost of $1.0 billion in the open market or in negotiated transactions.
On December 17, 2021, we issued $550 million of additional senior notes of the same class as the 2019 Senior Notes in a private offering to qualified institutional investors (the “2021 Senior Notes,” and collectively with the 2018 Senior Notes and the 2019 Senior Notes, the “Senior Notes”).
On December 17, 2021, we issued $550 million of additional senior notes of the same class as the 2019 Senior Notes in a private offering to qualified institutional investors (the “2021 Senior Notes”).
The 2018 Senior Notes require interest payments semi-annually at a rate of 5.25% per annum and will mature on May 15, 2026. On December 6, 2019, we issued $350 million of senior notes in a private offering to qualified institutional investors (the “2019 Senior Notes”).
Senior Notes On May 8, 2018, we issued $400 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”). The 2018 Senior Notes require interest payments semi-annually at a rate of 5.25% per annum and will mature on May 15, 2026.
Should different conditions prevail, material write downs of our other long-lived assets could occur. As discussed above, while we believe that the assumptions and estimates utilized were appropriate based on the information available to management, different assumptions, judgments and estimates could materially affect our impairment assessments for our goodwill and other long-lived assets.
As discussed above, while we believe that the assumptions and estimates utilized were appropriate based on the information available to management, different assumptions, judgments and estimates could materially affect our impairment assessments for our goodwill and other long-lived assets.
We believe our cash and cash equivalents balances, including those held by our foreign subsidiaries, as well as available borrowings from our $600 million revolving line of credit and anticipated cash flows from operating activities, will be sufficient to fund our working and other capital requirements for at least the next 12 months and thereafter for the foreseeable future, including the $15.0 million principal payments on the $300 Million Term Loan (as defined below) due over the next 12 months.
We believe our cash and cash equivalents balances, including those held by our foreign subsidiaries, as well as available borrowings from our $1.0 billion revolving line of credit and anticipated cash flows from operating activities, will be sufficient to fund our working and other capital requirements for at least the next 12 months and thereafter for the foreseeable future, including the $400.0 million principal payment on the 2018 Senior Notes (as defined below) due over the next 12 months.
Research and development expenses as a percentage of revenues decreased to 10% during fiscal 2024 from 11% during fiscal 2023.
Research and development expenses as a percentage of revenues decreased to 9% during fiscal 2025 from 10% during fiscal 2024.
Provision for Income Taxes Our effective income tax rates were 20.1%, 22.4% and 20.7% in fiscal 2024, 2023 and 2022, respectively.
Provision for Income Taxes Our effective income tax rates were 18.8%, 20.1% and 22.4% in fiscal 2025, 2024 and 2023, respectively.
The applicable margin for base rate borrowings ranges from 0% to 0.75% per annum and for SOFR borrowings ranges from 1% to 1.75% per annum. In addition, we must pay certain credit facility fees.
The applicable margin for base rate borrowings and for SOFR borrowings is determined based on our consolidated leverage ratio. The applicable margin for base rate borrowings ranges from 0% to 0.75% per annum and for SOFR borrowings ranges from 1% to 1.75% per annum. In addition, we must pay certain credit facility fees.
Summary of Cash Flows Year Ended September 30, 2024 2023 2022 (In thousands) Cash provided by (used in): Operating activities $ 632,964 $ 468,915 $ 509,450 Investing activities (27,993) (15,954) (5,671) Financing activities (592,923) (455,001) (547,165) Effect of exchange rate changes on cash 1,841 5,616 (18,766) Increase (decrease) in cash and cash equivalents $ 13,889 $ 3,576 $ (62,152) Cash Flows from Operating Activities Our primary method for funding operations and growth has been through cash flows generated from operating activities.
Summary of Cash Flows Year Ended September 30, 2025 2024 2023 (In thousands) Cash provided by (used in): Operating activities $ 778,807 $ 632,964 $ 468,915 Investing activities (43,719) (27,993) (15,954) Financing activities (750,329) (592,923) (455,001) Effect of exchange rate changes on cash (1,290) 1,841 5,616 Increase (decrease) in cash and cash equivalents $ (16,531) $ 13,889 $ 3,576 Cash Flows from Operating Activities Our primary method for funding operations and growth has been through cash flows generated from operating activities.
Net cash provided by operating activities totaled $633.0 million in fiscal 2024 compared to $468.9 million in fiscal 2023. The $164.1 million increase was attributable to an $83.4 million increase in net income, a $43.0 million increase that resulted from timing of receipts and payments in our ordinary course of business, and a $37.7 million increase in non-cash items.
Net cash provided by operating activities totaled $778.8 million in fiscal 2025 compared to $633.0 million in fiscal 2024. The $145.8 million increase was attributable to a $139.1 million increase in net income, a $4.8 million increase in non-cash items, and a $1.9 million increase that resulted from timing of receipts and payments in our ordinary course of business.
The adoption of our most predictive scores, FICO ® Score 10 and 10 T, gained increased traction for non-conforming mortgages and will be implemented for conforming mortgages based on the timeline set forth by the Federal Housing Finance Agency for enterprise credit scoring requirements.
The adoption of our most predictive scores, FICO ® Score 10 and FICO ® Score 10 T, gained increased traction for non-conforming mortgages and was approved for conforming mortgages by the Federal Housing Finance Agency for enterprise credit scoring requirements.
Cash Flows from Financing Activities Net cash used in financing activities totaled $592.9 million in fiscal 2024 compared to $455.0 million in fiscal 2023.
Cash Flows from Financing Activities Net cash used in financing activities totaled $750.3 million in fiscal 2025 compared to $592.9 million in fiscal 2024.
The 2021 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028, the same date as the 2019 Senior Notes. The indentures for the Senior Notes contain certain covenants typical of unsecured obligations.
The 2025 Senior Notes require interest payments semi-annually at a rate of 6.00% per annum and will mature on May 15, 2033. The indentures for the Senior Notes contain certain covenants typical of unsecured obligations.
Selling, General and Administrative Selling, general and administrative expenses consist principally of employee salaries, incentives, commissions and benefits; travel costs; overhead costs; advertising and other promotional expenses; corporate facilities expenses; legal expenses; and business development expenses. 40 Table of Contents The fiscal 2024 over 2023 increase in selling, general and administrative expenses of $62.3 million was primarily attributable to a $38.6 million increase in personnel and labor costs, a $6.0 million increase in outside services costs, a $5.5 million increase in advertising and other promotional costs, a $4.9 million increase in non-income tax costs, a $3.7 million increase in travel costs, and a $2.6 million increase in infrastructure and facilities costs.
Selling, General and Administrative Selling, general and administrative expenses consist principally of employee salaries, incentives, commissions and benefits; travel costs; overhead costs; advertising and other promotional expenses; corporate facilities expenses; legal expenses; and business development expenses. 41 Table of Contents The fiscal 2025 over 2024 increase in selling, general and administrative expenses of $50.2 million was primarily attributable to a $23.7 million increase in personnel and labor costs, a $22.4 million increase in advertising and other promotional costs, and a $3 .3 million increase in travel costs.
CAPITAL RESOURCES AND LIQUIDITY Outlook As of September 30, 2024, we had $150.7 million in cash and cash equivalents, which included $124.4 million held by our foreign subsidiaries.
CAPITAL RESOURCES AND LIQUIDITY Outlook As of September 30, 2025, we had $134.1 million in cash and cash equivalents, which included $118.8 million held by our foreign subsidiaries.
For the periods presented, we have not experienced significant changes to our estimates and judgments related to the assessment of likelihood and in the determination of a range of potential losses.
Revisions in the estimates of the potential liabilities could have a material impact on our consolidated financial position or consolidated results of operations. For the periods presented, we have not experienced significant changes to our estimates and judgments related to the assessment of likelihood and in the determination of a range of potential losses.
Software The following table provides information about disaggregated revenue for our Software segment by revenue types: Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change 2024 2023 2022 2024 to 2023 2023 to 2022 2024 to 2023 2023 to 2022 (In thousands) (In thousands) On-premises and SaaS software $ 711,340 $ 640,182 $ 564,751 $ 71,158 $ 75,431 11 % 13 % Professional services 86,536 99,547 105,876 (13,011) (6,329) (13) % (6) % Total $ 797,876 $ 739,729 $ 670,627 58,147 69,102 8 % 10 % The following table provides information about disaggregated revenue for on-premises and SaaS software within our Software segment by timing of revenue recognition: Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change 2024 2023 2022 2024 to 2023 2023 to 2022 2024 to 2023 2023 to 2022 (In thousands) (In thousands) Software recognized at a point in time (1) $ 76,284 $ 72,843 $ 75,647 $ 3,441 $ (2,804) 5 % (4) % Software recognized over contract term (2) 635,056 567,339 489,104 67,717 78,235 12 % 16 % Total $ 711,340 $ 640,182 $ 564,751 $ 71,158 75,431 11 % 13 % (1) Includes license portion of our on-premises subscription software and perpetual license, both of which are recognized when the software is made available to the customer, or at the start of the subscription. 38 Table of Contents (2) Includes maintenance portion and usage-based fees of our on-premises subscription software, maintenance revenue on perpetual licenses, as well as SaaS revenue.
Software The following table provides information about disaggregated revenue for our Software segment by revenue types: Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change 2025 2024 2023 2025 to 2024 2024 to 2023 2025 to 2024 2024 to 2023 (In thousands) (In thousands) On-premises and SaaS software $ 740,145 $ 711,340 $ 640,182 $ 28,805 $ 71,158 4 % 11 % Professional services 82,149 86,536 99,547 (4,387) (13,011) (5) % (13) % Total $ 822,294 $ 797,876 $ 739,729 24,418 58,147 3 % 8 % The following table provides information about disaggregated revenue for on-premises and SaaS software within our Software segment by timing of revenue recognition: Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change 2025 2024 2023 2025 to 2024 2024 to 2023 2025 to 2024 2024 to 2023 (In thousands) (In thousands) Software recognized at a point in time (1) $ 90,238 $ 76,284 $ 72,843 $ 13,954 $ 3,441 18 % 5 % Software recognized over contract term (2) 649,907 635,056 567,339 14,851 67,717 2 % 12 % Total $ 740,145 $ 711,340 $ 640,182 $ 28,805 71,158 4 % 11 % (1) Includes license portion of our on-premises subscription software and perpetual licenses, both of which are recognized when the software is made available to the customer, or at the start of the subscription.
Annual Recurring Revenue (“ARR”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, requires us to recognize a significant portion of revenue from our on-premises software subscriptions at the point in time when the software is first made available to the customer, or at the beginning of the subscription term, despite the fact that our contracts typically call for billing these amounts ratably over the life of the subscription.
The following table summarizes our ACV Bookings during the periods indicated: Quarter Ended September 30, Year Ended September 30, 2025 2024 2025 2024 (In millions) Total on-premises and SaaS software $ 32.7 $ 22.1 $ 102.4 $ 84.7 Annual Recurring Revenue (“ARR”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, requires us to recognize a significant portion of revenue from our on-premises software subscriptions at the point in time when the software is first made available to the customer, or at the beginning of the subscription term, despite the fact that our contracts typically call for billing these amounts ratably over the life of the subscription.
Segment operating income as a percentage of segment revenue for Scores was 88%, consistent with fiscal 2023. 42 Table of Contents The $16.3 million increase in our Software segment operating income was attributable to a $58.1 million increase in segment revenue, partially offset by a $41.8 million increase in segment operating expenses.
Segment operating income as a percentage of segment revenue for Scores was 88%, consistent with fiscal 2024. 43 Table of Contents The $9.8 million decrease in our Software segment operating income was attributable to a $34.2 million increase in segment operating expenses, partially offset by a $24.4 million increase in segment revenue.
The fiscal 2024 over 2023 increase in cost of revenues of $37.2 million was primarily attributable to an $18.1 million increase in infrastructure and facilities costs, a $12.4 million increase in personnel and labor costs, a $4.3 million increase in direct materials costs, and a $2.4 million increase in outside services costs.
The fiscal 2025 over 2024 increase in cost of revenues of $5.5 million was primarily attributable to an $8.7 million increase in infrastructure and facilities costs, partially offset by a $2.1 million decrease in outside services costs and a $1.4 million decrease in personnel and labor costs.
The increase in our on-premises and SaaS software revenue was primarily attributable to an increase in revenue recognized over time largely driven by SaaS growth for our Platform products. The decrease in professional services revenue was primarily attributable to our strategy to emphasize higher-margin software over professional services.
The increase in our on-premises and SaaS software revenue was primarily attributable to an increase in revenue recognized over time largely driven by SaaS growth for our Platform products and an increase in license revenue recognized at a point in time due to a large license renewal.
The decrease in our effective tax rate in fiscal 2024 compared to fiscal 2023 was due to an increase in excess tax benefits related to share-based compensation. 41 Table of Contents Operating Income The following tables set forth certain summary information on a segment basis related to our operating income for fiscal 2024, 2023 and 2022: Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change Segment 2024 2023 2022 2024 to 2023 2023 to 2022 2024 to 2023 2023 to 2022 (In thousands) (In thousands) Scores $ 813,354 $ 681,071 $ 619,355 $ 132,283 $ 61,716 19 % 10 % Software 257,529 241,191 183,122 16,338 58,069 7 % 32 % Unallocated corporate expenses (186,898) (156,426) (142,647) (30,472) (13,779) 19 % 10 % Total segment operating income 883,985 765,836 659,830 118,149 106,006 15 % 16 % Unallocated share-based compensation (149,439) (123,847) (115,355) (25,592) (8,492) 21 % 7 % Unallocated amortization expense (917) (1,100) (2,061) 183 961 (17) % (47) % Gain on product line asset sale — 1,941 — (1,941) 1,941 (100) % — % Operating income $ 733,629 $ 642,830 $ 542,414 90,799 100,416 14 % 19 % Scores Year Ended September 30, Percentage of Revenues 2024 2023 2022 2024 2023 2022 (In thousands) Segment revenues $ 919,650 $ 773,828 $ 706,643 100 % 100 % 100 % Segment operating expenses (106,296) (92,757) (87,288) (12) % (12) % (12) % Segment operating income $ 813,354 $ 681,071 $ 619,355 88 % 88 % 88 % Software Year Ended September 30, Percentage of Revenues 2024 2023 2022 2024 2023 2022 (In thousands) Segment revenues $ 797,876 $ 739,729 $ 670,627 100 % 100 % 100 % Segment operating expenses (540,347) (498,538) (487,505) (68) % (67) % (73) % Segment operating income $ 257,529 $ 241,191 $ 183,122 32 % 33 % 27 % The fiscal 2024 over 2023 increase in operating income of $90.8 million was primarily attributable to a $204.0 million increase in segment revenues, partially offset by a $55.3 million increase in segment operating expenses, a $30.5 million increase in corporate expenses, and a $25.6 million increase in share-based compensation cost.
The decrease in our effective tax rate in fiscal 2025 compared to fiscal 2024 was due to an increase in excess tax benefits related to share-based compensation. 42 Table of Contents Operating Income The following tables set forth certain summary information on a segment basis related to our operating income for fiscal 2025, 2024 and 2023: Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change Segment 2025 2024 2023 2025 to 2024 2024 to 2023 2025 to 2024 2024 to 2023 (In thousands) (In thousands) Scores $ 1,026,243 $ 813,354 $ 681,071 $ 212,889 $ 132,283 26 % 19 % Software 247,694 257,529 241,191 (9,835) 16,338 (4) % 7 % Total segment operating income 1,273,937 1,070,883 922,262 203,054 148,621 19 % 16 % Unallocated corporate expenses (181,498) (186,898) (156,426) 5,400 (30,472) (3) % 19 % Unallocated share-based compensation (156,667) (149,439) (123,847) (7,228) (25,592) 5 % 21 % Unallocated amortization expense — (917) (1,100) 917 183 (100) % (17) % Unallocated restructuring charges (10,922) — — (10,922) — — % — % Gain on product line asset sale — — 1,941 — (1,941) — % (100) % Operating income $ 924,850 $ 733,629 $ 642,830 191,221 90,799 26 % 14 % Scores Year Ended September 30, Percentage of Revenues 2025 2024 2023 2025 2024 2023 (In thousands) Segment revenues $ 1,168,575 $ 919,650 $ 773,828 100 % 100 % 100 % Segment operating expenses (142,332) (106,296) (92,757) (12) % (12) % (12) % Segment operating income $ 1,026,243 $ 813,354 $ 681,071 88 % 88 % 88 % Software Year Ended September 30, Percentage of Revenues 2025 2024 2023 2025 2024 2023 (In thousands) Segment revenues $ 822,294 $ 797,876 $ 739,729 100 % 100 % 100 % Segment operating expenses (574,600) (540,347) (498,538) (70) % (68) % (67) % Segment operating income $ 247,694 $ 257,529 $ 241,191 30 % 32 % 33 % The fiscal 2025 over 2024 increase in operating income of $191.2 million was primarily attributable to a $273.3 million increase in segment revenues and a $5.4 million decrease in corporate expenses, partially offset by a $70.2 million increase in segment operating expenses, a $10.9 million increase in restructuring charges, and a $7.2 million increase in share-based compensation cost.
The $132.3 million increase in our Scores segment operating income was attributable to a $145.8 million increase in segment revenue, partially offset by a $13.5 million increase in segment operating expenses.
The $212.9 million increase in our Scores segment operating income was attributable to a $248.9 million increase in segment revenue, partially offset by a $36.0 million increase in segment operating expenses.
The increase in personnel and labor costs was primarily attributable to increased share-based compensation expense, increased headcount, market base-pay adjustments, increased fringe benefit costs related to our supplemental retirement and savings plan, and increased incentive expense. The increase in outside services costs was primarily attributable to increased legal and consulting expenses.
The increase in personnel and labor costs was primarily attributable to increased headcount, market base-pay adjustments, commission expense, and share-based compensation expense, partially offset by decreased fringe benefit costs related to our supplemental retirement and savings plan. The increase in advertising and other promotional costs was primarily attributable to increased costs for advertising campaigns and corporate events.
Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results.
Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results. 48 Table of Contents Contingencies and Litigation We are subject to various proceedings, lawsuits and claims relating to products and services, technology, labor, stockholder and other matters.
The $137.9 million increase was primarily attributable to a $416.2 million increase in repurchases of common stock and a $62.5 million increase in taxes paid related to net share settlement of equity awards, partially offset by a $340.0 million increase in proceeds, net of payments, on our revolving line of credit and term loans. 43 Table of Contents Repurchases of Common Stock In January 2024, our Board of Directors approved a stock repurchase program (the “January 2024 program”), replacing our previously authorized October 2022 stock repurchase program, which was terminated prior to its expiration.
The $157.4 million increase was primarily attributable to a $988.8 million increase in payments, net of proceeds, on our revolving line of credit and term loans, a $592.8 million increase in repurchases of common stock, a $65.4 million increase in taxes paid related to net share settlement of equity awards, and a $16.5 million increase in debt issuance costs, partially offset by the proceeds from the issuance of our $1.5 billion 2025 Senior Notes (as defined below). 44 Table of Contents Repurchases of Common Stock In July 2024, our Board approved a stock repurchase program (the “July 2024 program”), replacing our previously authorized January 2024 stock repurchase program, which was terminated prior to its expiration.
The revolving line of credit and the $300 Million Term Loan contain certain restrictive covenants including a maximum consolidated leverage ratio of 3.5 to 1.0, subject to a step up to 4.0 to 1.0 following certain permitted acquisitions and subject to certain conditions, and a minimum interest coverage ratio of 3.0 to 1.0.
The credit agreement contains certain restrictive covenants including a maximum consolidated leverage ratio of 3.5 to 1.0, subject to a step up to 4.0 to 1.0 following certain permitted acquisitions and subject to certain conditions, and contains other covenants typical of an unsecured credit facility.
As of September 30, 2024, we had $760.5 million remaining under the July 2024 program. During fiscal 2024 and 2023, we expended $833.3 million and $407.3 million, respectively, under the July 2024 program and previously authorized stock repurchase programs, as applicable.
As of September 30, 2025, we had $343.6 million remaining under the June 2025 program. During fiscal 2025 and 2024, we expended $1.4 billion and $0.8 billion, respectively, under the June 2025 program and previously authorized stock repurchase programs, as applicable.
At the segment level, the $118.1 million increase in segment operating income was the result of a $132.3 million increase in our Scores segment operating income and a $16.3 million increase in our Software segment operating income, partially offset by a $30.5 million increase in corporate expenses.
At the segment level, the $203.1 million increase in segment operating income was the result of a $212.9 million increase in our Scores segment operating income, partially offset by a $9.8 million decrease in our Software segment operating income.
The fiscal 2024 from 2023 increase in net interest expense of $10.1 million was primarily attributable to a higher average interest rate and higher average outstanding balance of borrowings under our credit agreement during fiscal 2024.
The fiscal 2025 over 2024 increase in net interest expense of $28.0 million was primarily attributable to the $1.5 billion of 2025 Senior Notes (as defined below), partially offset by a lower average outstanding balance and a lower average interest rate on borrowings under our credit agreement during fiscal 2025.
Segment revenues, operating income, and related financial information, including disaggregation of revenue, for the years ended September 30, 2024, 2023 and 2022 are set forth in Note 9 and Note 14 to the accompanying consolidated financial statements. 37 Table of Contents Revenues The following tables set forth certain summary information on a segment basis related to our revenues for fiscal 2024, 2023 and 2022: Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change Segment 2024 2023 2022 2024 to 2023 2023 to 2022 2024 to 2023 2023 to 2022 (In thousands) (In thousands) Scores $ 919,650 $ 773,828 $ 706,643 $ 145,822 $ 67,185 19 % 10 % Software 797,876 739,729 670,627 58,147 69,102 8 % 10 % Total $ 1,717,526 $ 1,513,557 $ 1,377,270 203,969 136,287 13 % 10 % Percentage of Revenues Year Ended September 30, Segment 2024 2023 2022 Scores 54 % 51 % 51 % Software 46 % 49 % 49 % Total 100 % 100 % 100 % Scores Scores segment revenues increased $145.8 million in fiscal 2024 from 2023 due to an increase of $150.8 million in our business-to-business scores revenue, partially offset by a decrease of $5.0 million in our business-to-consumer revenue.
Revenues The following tables set forth certain summary information on a segment basis related to our revenues for fiscal 2025, 2024 and 2023: 38 Table of Contents Year Ended September 30, Period-to-Period Change Period-to-Period Percentage Change Segment 2025 2024 2023 2025 to 2024 2024 to 2023 2025 to 2024 2024 to 2023 (In thousands) (In thousands) Scores $ 1,168,575 $ 919,650 $ 773,828 $ 248,925 $ 145,822 27 % 19 % Software 822,294 797,876 739,729 24,418 58,147 3 % 8 % Total $ 1,990,869 $ 1,717,526 $ 1,513,557 273,343 203,969 16 % 13 % Percentage of Revenues Year Ended September 30, Segment 2025 2024 2023 Scores 59 % 54 % 51 % Software 41 % 46 % 49 % Total 100 % 100 % 100 % Scores Scores segment revenues increased $248.9 million in fiscal 2025 from 2024 due to an increase of $236.7 million in our business-to-business scores revenue and an increase of $12.2 million in our business-to-consumer scores revenue.
Our other long-lived assets are assessed for potential impairment when there is evidence that events and circumstances related to our financial performance and economic environment indicate the carrying amount of the assets may not be recoverable. When impairment indicators are identified, we test for impairment using undiscounted projected cash flows.
Alternatively, we may bypass the qualitative assessment described above for any reporting unit in any period and proceed directly to performing step one of the goodwill impairment test. 47 Table of Contents Our other long-lived assets are assessed for potential impairment when there is evidence that events and circumstances related to our financial performance and economic environment indicate the carrying amount of the assets may not be recoverable.
The increase in infrastructure and facilities costs was primarily attributable to the impact of a favorable adjustment in the prior year from the termination of an office lease. Selling, general and administrative expenses as a percentage of revenues increased to 27% during fiscal 2024 from 26% during fiscal 2023.
The increase in travel costs was primarily attributable to promotional and corporate events. Selling, general and administrative expenses as a percentage of revenues decreased to 26 % during fiscal 2025 from 27% during fiscal 2024.
In July 2024, our Board of Directors approved a new stock repurchase program (the “July 2024 program”), replacing the January 2024 program, which was terminated prior to its expiration and under which $29.6 million was remaining for repurchase at the time of termination.
In June 2025, our Board approved a new stock repurchase program (the “June 2025 program”), replacing the July 2024 program, which was terminated prior to its expiration.
If such tests indicate impairment, then we measure and record the impairment as the difference between the carrying value of the asset and the fair value of the asset. Significant management judgment is required in forecasting future operating results used in the preparation of the projected cash flows.
When impairment indicators are identified, we test for impairment using undiscounted projected cash flows. If such tests indicate impairment, then we measure and record the impairment as the difference between the carrying value of the asset and the fair value of the asset.
The amount of loss accrual or disclosure, if any, is determined after analysis of each matter, and is subject to adjustment if warranted by new developments or revised strategies. Due to uncertainties related to these matters, accruals or disclosures are based on the best information available at the time.
If the potential loss is considered less than probable or the amount cannot be reasonably estimated, disclosure of the matter is considered. The amount of loss accrual or disclosure, if any, is determined after analysis of each matter, and is subject to adjustment if warranted by new developments or revised strategies.
We calculate ARR as the quarterly recurring revenue run-rate multiplied by four. 36 Table of Contents The following table summarizes our ARR for on-premises and SaaS software exiting each of the dates presented: December 31, 2022 ( * ) March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 ARR (In millions) Platform $ 132.8 $ 152.5 $ 164.1 $ 173.2 $ 190.3 $ 201.4 $ 215.1 $ 227.0 Non-Platform 450.1 461.0 481.8 496.2 497.4 495.6 494.5 494.2 Total $ 582.9 $ 613.5 $ 645.9 $ 669.4 $ 687.7 $ 697.0 $ 709.6 $ 721.2 Percentage Platform 23 % 25 % 25 % 26 % 28 % 29 % 30 % 31 % Non-Platform 77 % 75 % 75 % 74 % 72 % 71 % 70 % 69 % Total 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % YoY Change Platform 46 % 60 % 53 % 53 % 43 % 32 % 31 % 31 % Non-Platform 4 % 7 % 11 % 14 % 11 % 8 % 3 % — % Total 11 % 17 % 20 % 22 % 18 % 14 % 10 % 8 % (*) We sold certain assets related to our Siron compliance business during the quarter ended December 31, 2022, and the amounts and percentages above exclude this product line at December 31, 2022.
We calculate ARR as the quarterly recurring revenue run-rate multiplied by four. 37 Table of Contents The following table summarizes our ARR for on-premises and SaaS software exiting each of the dates presented: December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 June 30, 2025 September 30, 2025 ARR (In millions) Platform $ 190.3 $ 201.4 $ 215.1 $ 227.0 $ 227.7 $ 234.7 $ 254.2 $ 263.6 Non-platform 497.4 495.6 494.5 494.2 501.6 479.9 484.9 483.7 Total $ 687.7 $ 697.0 $ 709.6 $ 721.2 $ 729.3 $ 714.6 $ 739.1 $ 747.3 Percentage Platform 28 % 29 % 30 % 31 % 31 % 33 % 34 % 35 % Non-platform 72 % 71 % 70 % 69 % 69 % 67 % 66 % 65 % Total 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % YoY Change Platform 43 % 32 % 31 % 31 % 20 % 17 % 18 % 16 % Non-platform 11 % 8 % 3 % — % 1 % (3) % (2) % (2) % Total 18 % 14 % 10 % 8 % 6 % 3 % 4 % 4 % Dollar-Based Net Retention Rate (“DBNRR”) We consider DBNRR to be an important measure of our success in retaining and growing revenue from our existing customers.
Highlights from Fiscal 2024 • Total revenues were $1.7 billion during fiscal 2024, a 13% increase from fiscal 2023. • Revenues for our Scores segment were $919.7 million during fiscal 2024, a 19% increase from fiscal 2023. • Annual Recurring Revenue for our Software segment as of September 30, 2024 was $721.2 million, an 8% increase from September 30, 2023. • Dollar-Based Net Retention Rate for our Software segment was 106% as of September 30, 2024. • Operating income was $733.6 million during fiscal 2024, a 14% increase from fiscal 2023. • Net income was $512.8 million during fiscal 2024, a 19% increase from fiscal 2023. • Diluted EPS was $20.45 during fiscal 2024, a 21% increase from fiscal 2023. • Cash flow from operating activities was $633.0 million during fiscal 2024, compared with $468.9 million during fiscal 2023. 35 Table of Contents • Cash and cash equivalents were $150.7 million as of September 30, 2024, compared with $136.8 million as of September 30, 2023. • Total debt balance was $2.2 billion as of September 30, 2024, compared with $1.9 billion as of September 30, 2023. • Total share repurchases during fiscal 2024 were $833.3 million, compared with $407.3 million during fiscal 2023.
Highlights from Fiscal 2025 • Total revenues were $2.0 billion during fiscal 2025, a 16% increase from fiscal 2024. • Revenues for our Scores segment were $1.2 billion during fiscal 2025, a 27% increase from fiscal 2024. • Annual Recurring Revenue for our Software segment as of September 30, 2025 was $747.3 million, a 4% increase from September 30, 2024. • Dollar-Based Net Retention Rate for our Software segment was 102% as of September 30, 2025. • Operating income was $924.9 million during fiscal 2025, a 26% increase from fiscal 2024. • Net income was $651.9 million during fiscal 2025, a 27% increase from fiscal 2024. • Diluted EPS was $26.54 during fiscal 2025, a 30% increase from fiscal 2024. • Cash flow from operating activities was $778.8 million during fiscal 2025, compared with $633.0 million during fiscal 2024. 36 Table of Contents • Cash and cash equivalents were $134.1 million as of September 30, 2025, compared with $150.7 million as of September 30, 2024. • We issued $1.5 billion of senior notes and used the net proceeds to repay all the outstanding balances on our term loans.
The following table summarizes our DBNRR for on-premises and SaaS software exiting each of the dates presented: December 31, 2022 (*) March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 DBNRR Platform 130 % 146 % 142 % 145 % 136 % 126 % 124 % 123 % Non-Platform 103 % 105 % 109 % 111 % 108 % 106 % 101 % 99 % Total 110 % 114 % 117 % 120 % 114 % 112 % 108 % 106 % (*) We sold certain assets related to our Siron compliance business during the quarter ended December 31, 2022, and the percentages above exclude this product line at December 31, 2022.
The following table summarizes our DBNRR for on-premises and SaaS software exiting each of the dates presented: December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 March 31, 2025 June 30, 2025 September 30, 2025 DBNRR Platform 136 % 126 % 124 % 123 % 112 % 110 % 115 % 112 % Non-platform 108 % 106 % 101 % 99 % 100 % 96 % 97 % 97 % Total 114 % 112 % 108 % 106 % 105 % 102 % 103 % 102 % RESULTS OF OPERATIONS We are organized into two reportable segments: Scores and Software.
If the potential loss is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. If the potential loss is considered less than probable or the amount cannot be reasonably estimated, disclosure of the matter is considered.
We are required to assess the likelihood of any adverse outcomes and the potential range of probable losses in these matters. If the potential loss is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss.
The fiscal 2024 over 2023 increase in other income, net of $7.7 million was primarily attributable to an increase in net unrealized and realized gains on investments classified as trading securities in our supplemental retirement and savings plan and a decrease in foreign currency exchange losses.
The fiscal 2025 over 2024 decrease in other income, net of $2.6 million was primarily attributable to a decrease in net unrealized gains on investments classified as trading securities in our supplemental retirement and savings plan, partially offset by an increase in net exchange rate gains resulting from remeasurement of foreign-currency-denominated receivable and cash balances held by our various reporting entities into their respective functional currencies at period-end market rates, net of the impact of offsetting foreign currency forward contracts.
We also continued to enhance stockholder value by returning cash to stockholders through our stock repurchase program. During fiscal 2024, we repurchased 0.6 million shares at a total repurchase price of $833.3 million.
Additionally, we continue to expand our FICO ® Educational Analytics Challenge program that was created to empower students and help educate the next generation of data scientists. We also continued to enhance stockholder value by returning cash to stockholders through our stock repurchase program. During fiscal 2025, we repurchased 0.8 million shares at a total repurchase price of $1.4 billion.
As of September 30, 2024, we had $210.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 6.396%, $258.8 million in outstanding balance of the $300 Million Term Loan at an interest rate of 6.344%, and $450.0 million in outstanding balance of the $450 Million Term Loan at an interest rate of 6.281%.
As of September 30, 2025, we had $275.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 5.423% and we were in compliance with all financial covenants under the credit agreement.
The $12.0 million increase was attributable to a $16.7 million increase in capitalized internal-use software costs and a $4.6 million increase in purchases of property and equipment, partially offset by a $6.1 million decrease in cash transferred, net of proceeds, from a product line asset sale and a $3.2 million increase in proceeds from sales, net of purchases, of marketable securities.
Cash Flows from Investing Activities Net cash used in investing activities totaled $43.7 million in fiscal 2025 compared to $28.0 million in fiscal 2024. The $15.7 million increase was attributable to a $13.8 million increase in capitalized internal-use software costs and a $1.9 million decrease in proceeds from sales, net of purchases, of marketable securities.
As of September 30, 2024, the carrying value of the Senior Notes was $1.3 billion and we were in compliance with all financial covenants under these obligations. 44 Table of Contents Contractual Obligations The following table presents a summary of our contractual obligations at September 30, 2024: Year Ending September 30, Thereafter Total 2025 2026 2027 2028 2029 (In thousands) Senior Notes (1) $ — $ 400,000 $ — $ 900,000 $ — $ — $ 1,300,000 Revolving line of credit and term loans (1) 15,000 903,750 — — — 918,750 Interest due on Senior Notes 57,000 57,000 36,000 36,000 — — 186,000 Operating lease obligations 13,378 9,805 5,618 4,439 2,626 2,039 37,905 Finance lease obligations 3,625 3,625 3,625 441 — — 11,316 Purchase obligations (2) $ 62,271 57,835 2,594 — — — 122,700 Unrecognized tax benefits (3) — — — — — — 19,879 Total commitments $ 151,274 $ 1,432,015 $ 47,837 $ 940,880 $ 2,626 $ 2,039 $ 2,596,550 (1) Represents the unpaid principal payments due under the Senior Notes, revolving line of credit, and term loans.
As of September 30, 2025, the carrying value of the Senior Notes was $2.8 billion and we were in compliance with all financial covenants under these obligations. 45 Table of Contents Contractual Obligations The following table presents a summary of our contractual obligations at September 30, 2025: Year Ending September 30, Thereafter Total 2026 2027 2028 2029 2030 (In thousands) Senior Notes (1) $ 400,000 $ — $ 900,000 $ — $ — $ 1,500,000 $ 2,800,000 Revolving line of credit (1) — — — — 275,000 — 275,000 Interest due on Senior Notes 147,500 126,000 126,000 90,000 90,000 270,000 849,500 Operating lease obligations 11,214 8,125 5,576 3,767 1,917 2,191 32,790 Finance lease obligations 3,625 3,625 441 — — — 7,691 Purchase obligations (2) $ 72,128 19,437 5,035 2,375 273 — 99,248 Unrecognized tax benefits (3) — — — — — — 19,505 Total commitments $ 634,467 $ 157,187 $ 1,037,052 $ 96,142 $ 367,190 $ 1,772,191 $ 4,083,734 (1) Represents the unpaid principal payments due under the Senior Notes and revolving line of credit.
Software segment revenues increased $58.1 million in fiscal 2024 from 2023 due to a $71.2 million increase in on-premises and SaaS software revenue, partially offset by a $13.0 million decrease in services revenue.
(2) Includes maintenance portion and usage-based fees of our on-premises subscription software, maintenance revenue on perpetual licenses, as well as SaaS revenue. 39 Table of Contents Software segment revenues increased $24.4 million in fiscal 2025 from 2024 due to a $28.8 million increase in on-premises and SaaS software revenue, partially offset by a $4.4 million decrease in professional services revenue.
Segment operating income as a percentage of segment revenue for Software decreased to 32% from 33%, primarily attributable to a prior year one-time reimbursement from a third-party data center provider for implementation costs previously incurred, partially offset by a decrease in sales of our lower-margin professional services.
Segment operating income as a percentage of segment revenue for Software decreased to 30% from 32%, primarily attributable to the increases in third-party data center hosting costs and in personnel and labor costs.
The fiscal 2024 over 2023 increase in research and development expenses of $12.0 million was primarily attributable to an $8.2 million increase in personnel and labor costs, as a result of increases in share-based compensation expense, headcount, and incentive expense, a $2.4 million increase in infrastructure and facilities costs primarily attributable to increased third-party data center hosting costs, and a $1.8 million increase in consulting costs.
The fiscal 2025 over 2024 increase in research and development expenses of $16.4 million was primarily attributable to a $6.9 million increase in infrastructure and facilities costs, a $5.7 million increase in outside services costs, and a $3.8 million increase in personnel and labor costs.
The increase in infrastructure and facilities costs was primarily attributable to an increase in third-party data center hosting costs, a prior year one-time reimbursement from a third-party data center provider for implementation costs previously incurred, and an increase in software royalty costs.
The increase in infrastructure and facilities costs was primarily attributable to increased third-party data center hosting costs and third-party SaaS services costs. The increase in outside services costs was primarily attributable to increased third-party contractor costs. The increase in personnel and labor costs was primarily attributable to increased headcount.
We were in compliance with all financial covenants under the credit agreement as of September 30, 2024. Senior Notes On May 8, 2018, we issued $400 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”).
On May 13, 2025, we issued $1.5 billion of senior notes in a private offering to qualified institutional investors (the “2025 Senior Notes,” and collectively with the 2018 Senior Notes, the 2019 Senior Notes and the 2021 Senior Notes, the “Senior Notes”).
Significant judgment is required in both the assessment of likelihood and in the determination of a range of potential losses. Revisions in the estimates of the potential liabilities could have a material impact on our consolidated financial position or consolidated results of operations.
Due to uncertainties related to these matters, accruals or disclosures are based on the best information available at the time. Significant judgment is required in both the assessment of likelihood and in the determination of a range of potential losses.
The credit agreement also contains other covenants typical of unsecured credit facilities. On June 13, 2024, we amended our credit agreement to provide for the issuance of a new $450 million unsecured term loan (the “$450 Million Term Loan”) with a syndicate of banks, increasing the total capacity of the credit agreement to $1.35 billion.
Revolving Line of Credit and Term Loans On May 13, 2025, we amended our credit agreement with a syndicate of banks, increasing our borrowing capacity under the unsecured revolving line of credit from $600 million to $1.0 billion and extending its maturity to May 13, 2030.
The increase in business-to-business scores revenue was primarily attributable to a higher unit price, partially offset by a decrease in volume of mortgage originations. The decrease in business-to-consumer revenue was primarily attributable to a decrease in direct sales generated from the myFICO.com website.
The increase in business-to-business scores revenue was primarily attributable to a higher unit price, an increase in volume of mortgage originations and a multi-year license renewal in the U.S. recognized on our insurance score product during fiscal 2025.
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We continued the expansion of our financial inclusion initiatives through the FICO ® Educational Analytics Challenge, a program created to help promote diversity in data science, engineering, and technology at Historically Black Colleges and Universities. Additionally, we host free Score A Better Future TM financial education workshops for students and adults from traditionally underserved communities.
Added
In addition, we launched FICO® Score 10 BNPL and FICO ® Score 10 T BNPL, the first credit scores from a leading credit scoring provider to incorporate Buy Now, Pay Later (“BNPL”) data. These innovative scores represent a significant advancement in credit scoring, accounting for the growing importance of BNPL loans in the U.S. credit ecosystem.
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Internationally, we launched a FICO Score based on Ukrainian Bureau of Credit Histories data, an innovative score to help Ukrainians gain credit access in Poland. We also remained committed to expanding usage of the FICO ® Resilience Index, a complement to FICO Scores that more precisely predicts a borrower’s resilience to future economic disruptions, helping lenders manage latent risk.
Added
Internationally, we launched a FICO Score in Kenya, which leverages TransUnion data and CreditVision variables to redefine risk management and help expand access to financial services across Kenya.
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We continued to develop alternative data scores, including trended data cash flow attributes, to help lenders identify credit borrowers with positive financial profiles that extend beyond their traditional credit reports as well as offer credit score layering leveraging UltraFICO ® Score and FICO ® Score XD to help broaden accessibility and extend financial inclusion to borrowers with limited credit history.
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In fiscal 2025, in support of our B2C business and financial inclusion, we launched the FICO ® Score Mortgage Simulator, which is the only simulator in the market built by FICO data scientists and powered by the FICO Score algorithm.
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During fiscal 2024, the strategy for our Software segment was to continue to advance and drive growth through our platform-first, cloud delivered products. A significant portion of our short-term opportunity remains in North America, where financial institutions are focused on digital transformation and understand the value of FICO ® Platform.
Added
We also introduced our Lenders Leading Financial Inclusion program that aims to expand credit access for underserved communities and we hosted free Score A Better Future ® financial education workshops for students and adults from traditionally underserved communities. During fiscal 2025, the strategy for our Software segment continued to advance and drive growth through our platform-first products.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−3 removed4 unchanged
Biggest changeThe applicable margin for base rate borrowings ranges from 0% to 0.75% per annum and for SOFR borrowings ranges from 1% to 1.75% per annum. A change in interest rates on this variable rate debt impacts the interest incurred and cash flows, but does not impact the fair value of the instrument.
Biggest changeA change in interest rates on this variable rate debt impacts the interest incurred and cash flows, but does not impact the fair value of the instrument. As of September 30, 2025, we had $275.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 5.423%.
The funds provide daily liquidity and may be subject to interest rate risk and fall in value if market interest rates increase. We do not expect our operating results or cash flows to be affected to any significant degree by a sudden change in market interest rates.
The funds provide daily liquidity and may be subject to interest rate risk and fall in value if market interest rates increase. We do not expect our operating expenses to be affected to any significant degree by a sudden change in market interest rates.
The following tables summarize our outstanding foreign currency forward contracts, by currency, at September 30, 2024 and 2023: September 30, 2024 Contract Amount Fair Value Foreign Currency USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 13,000 $ 14,531 — Buy foreign currency: British pound (GBP) GBP 12,237 $ 16,400 — Singapore dollar (SGD) SGD 7,404 $ 5,800 — 49 Table of Contents September 30, 2023 Contract Amount Fair Value Foreign Currency USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 12,900 $ 13,621 — Buy foreign currency: British pound (GBP) GBP 10,700 $ 13,100 — Singapore dollar (SGD) SGD 8,569 $ 6,300 — The foreign currency forward contracts were entered into on September 30, 2024 and 2023; therefore, their fair value was $0 at each of these dates. 50 Table of Contents
The following tables summarize our outstanding foreign currency forward contracts, by currency, at September 30, 2025 and 2024: September 30, 2025 Contract Amount Fair Value Foreign Currency USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 7,700 $ 9,034 — Buy foreign currency: British pound (GBP) GBP 10,019 $ 13,500 — Singapore dollar (SGD) SGD 8,087 $ 6,300 — September 30, 2024 Contract Amount Fair Value Foreign Currency USD USD (In thousands) Sell foreign currency: Euro (EUR) EUR 13,000 $ 14,531 — Buy foreign currency: British pound (GBP) GBP 12,237 $ 16,400 — Singapore dollar (SGD) SGD 7,404 $ 5,800 — The foreign currency forward contracts were entered into on September 30, 2025 and 2024; therefore, their fair value was $0 at each of these dates. 50 Table of Contents
Interest rates on amounts borrowed under the revolving line of credit and term loans are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5%, and (c) one-month adjusted term SOFR plus 1%, plus, in each case, an applicable margin, or (ii) an adjusted term SOFR plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement).
Interest rates on amounts borrowed under the revolving line of credit are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5%, and (c) the Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 1%, plus, in each case, an applicable margin, (ii) the Daily Simple SOFR plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement), or (iii) term SOFR (without a credit spread adjustment) plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement).
The following table presents the face values and fair values for the Senior Notes at September 30, 2024 and 2023: September 30, 2024 September 30, 2023 Face Value Fair Value Face Value Fair Value (In thousands) The 2018 Senior Notes $ 400,000 399,500 $ 400,000 $ 386,000 The 2019 Senior Notes and the 2021 Senior Notes 900,000 864,000 900,000 803,250 Total $ 1,300,000 $ 1,263,500 $ 1,300,000 $ 1,189,250 We have interest rate risk with respect to our unsecured revolving line of credit and term loans.
The following table presents the face values and fair values for the Senior Notes at September 30, 2025 and 2024: September 30, 2025 September 30, 2024 Face Value Fair Value Face Value Fair Value (In thousands) The 2018 Senior Notes $ 400,000 399,500 $ 400,000 $ 399,500 The 2019 Senior Notes and the 2021 Senior Notes 900,000 875,250 900,000 864,000 The 2025 Senior Notes 1,500,000 1,518,750 — — Total $ 2,800,000 $ 2,793,500 $ 1,300,000 $ 1,263,500 49 Table of Contents We have interest rate risk with respect to our unsecured revolving line of credit.
Adjusted term SOFR is defined as term SOFR for the relevant interest period plus a SOFR adjustment of 0.10% per annum. The applicable margin for base rate borrowings and for SOFR borrowings is determined based on our consolidated leverage ratio.
The applicable margin for base rate borrowings and for SOFR borrowings is determined based on our consolidated leverage ratio. The applicable margin for base rate borrowings ranges from 0% to 0.75% per annum and for SOFR borrowings ranges from 1% to 1.75% per annum.
The fair value of the Senior Notes may increase or decrease due to various factors, including fluctuations in market interest rates and fluctuations in general economic conditions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Capital Resources and Liquidity” for additional information on the Senior Notes.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Capital Resources and Liquidity” for additional information on the Senior Notes.
The following table presents the principal amounts and related weighted-average yields for our investments with interest rate risk at September 30, 2024 and 2023: September 30, 2024 September 30, 2023 Cost Basis Carrying Amount Average Yield Cost Basis Carrying Amount Average Yield (Dollars in thousands) Cash and cash equivalents $ 150,667 $ 150,667 2.88 % $ 136,778 $ 136,778 3.05 % 48 Table of Contents On May 8, 2018, we issued $400 million of senior notes in a private placement to qualified institutional investors (the “2018 Senior Notes”).
The following table presents the principal amounts and related weighted-average yields for our investments with interest rate risk at September 30, 2025 and 2024: September 30, 2025 September 30, 2024 Cost Basis Carrying Amount Average Yield Cost Basis Carrying Amount Average Yield (Dollars in thousands) Cash and cash equivalents $ 134,136 $ 134,136 1.77 % $ 150,667 $ 150,667 2.88 % The fair value of the Senior Notes may increase or decrease due to various factors, including fluctuations in market interest rates and fluctuations in general economic conditions.
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On December 6, 2019, we issued $350 million of senior notes in a private offering to qualified institutional investors (the “2019 Senior Notes”).
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On December 17, 2021, we issued $550 million of additional senior notes of the same class as the 2019 Senior Notes in a private placement to qualified institutional investors (the “2021 Senior Notes” and collectively with the 2018 Senior Notes and 2019 Senior Notes, the “Senior Notes”).
Removed
As of September 30, 2024, we had $210.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 6.396%, $258.8 million in outstanding balance of the $300 Million Term Loan at an interest rate of 6.344%, and $450.0 million in outstanding balance of the $450 Million Term Loan at an interest rate of 6.281%.