FAIR ISAAC CORP
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Nov 6, 2026
FICO$704.55-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2025-09-30; filed 2025-11-07.
0000814547-25-000030
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-09-30; filed 2026-11-06.
0000814547-26-000042
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 121 current paragraphs.
66 unchanged; 42 reworded; 13 added; 9 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
In fiscal 2026, the FICO® Score continued to be the standard measure of consumer credit risk in the U.S., used by U.S. lenders for credit decisioning that connects lenders, investors, and consumers throughout the lending lifecycle. Through the FICO® Score 10T Free Access Program, more than 70 mortgage lenders are able to access FICO Score 10T, which also incorporates trended credit data, at no additional fee if they have paid for the Classic FICO® Score. In April 2026, the Federal Housing Finance Agency confirmed that FICO Score 10T was approved for future use in the conforming mortgage market served by Fannie Mae and Freddie Mac. On July 1, 2026, Fannie Mae and Freddie Mac took a further step toward implementation of FICO Score 10T by publishing historical data to support independent analytic evaluations. Independent analyses conducted during fiscal 2026 continued to demonstrate strong predictive performance for FICO Score 10T relative to competitor models. FICO Score 10T was also integrated into certain entities’ mortgage capital markets and pricing infrastructure, including Optimal Blue’s capital markets platform and LoanPASS’s pricing engine.
Current report
In fiscal 2026, the FICO® Mortgage Direct License Program was also announced, which will give tri-merge resellers, platform providers, and other third-party distributors a new option to calculate and distribute FICO Scores directly to their customers without relying on the three nationwide consumer reporting agencies as intermediaries. We also partnered with Plaid, a leading financial data network, to introduce a next-generation UltraFICO® Score, combining the trusted FICO Score with consumer-permissioned cash flow data.
Current report
The FICO® Score Mortgage Simulator was enhanced with new automated credit-planning features to help lenders, mortgage loan officers, and brokers better serve potential homebuyers. Industry-specific scores, such as FICO® Auto Score 10, continued to gain adoption during the year. FICO’s Score A Better Future® scaled the impact of free financial education workshops through expanded strategic partnerships and distribution channels, helping consumers better understand credit and the FICO Score. Our Lenders Leading Financial Inclusion program saw continued growth, working with financial institutions serving historically underserved communities to strengthen their capacity to serve a broader range of consumers. Internationally, we continued building on the successful blueprint established in prior years, such as our FICO Score launches in Kenya and Mongolia, as we pursue further expansion and development.
Current report
•Operating income was $1.3 billion during fiscal 2026, a 37% increase from fiscal 2025.
Current report
•Net income was $835.0 million during fiscal 2026, a 28% increase from fiscal 2025.
Current report
•Diluted EPS was $36.32 during fiscal 2026, a 37% increase from fiscal 2025.
Current report
•Cash flows from operating activities were $1.1 billion during fiscal 2026, compared with $778.8 million during fiscal 2025.
Current report
(*) References to “platform” in this table and the table below refer to FICO platform software, which is a set of interoperable capabilities which use software assets owned and/or governed by FICO for building solutions and services which conform to FICO architectural standards based on key elements of Cloud Native Computing design principles. These standards encompass shared security context and access using FICO standard application programming interfaces.
Current report
The fiscal 2026 over 2025 increase in selling, general and administrative expenses of $168.1 million was primarily attributable to a $68.3 million increase in personnel and labor costs, a $68.0 million increase in outside services costs, and a $31.8 million increase in marketing and other costs. The increase in personnel and labor costs was primarily attributable to increased headcount, increased share-based compensation costs, and increased incentive compensation costs. The increase in outside services costs was primarily attributable to a $65.0 million liability recorded in the fourth quarter of fiscal 2026 for a proposed settlement of the antitrust class action lawsuits, as described in Note 18 to the accompanying consolidated financial statements, and increased third-party consulting costs. The increase in marketing and other costs was primarily attributable to increased advertising and other promotional costs and increased business development costs. Selling, general and administrative expenses as a percentage of revenues increased to 27% during fiscal 2026 from 26% during fiscal 2025.
Current report
As of September 30, 2026, we had $500.0 million remaining under the June 2026 program. During fiscal 2026, we expended $3.1 billion under the June 2025 program, the February 2026 program, and the June 2026 program, as applicable, including $1.5 billion under the ASR Agreement entered into as part of the June 2026 program. Under the ASR Agreement, in June 2026 we received an initial delivery of 1,055,103 shares of common stock, representing approximately 80 percent of the total shares expected to be repurchased under the ASR Agreement. In July 2026, we settled the ASR Agreement and received 229,640 additional shares. In total, 1,284,743 shares were repurchased under the ASR Agreement. During fiscal 2025, we expended $1.4 billion under the June 2025 program and previously authorized stock repurchase programs, as applicable.
Current report
Revolving Line of Credit and Term Loan
Current report
Goodwill — Impairment Assessment
Current report
During the fourth quarter of fiscal 2026, as a result of the term sheet we entered into on September 29, 2026 to settle the antitrust lawsuits described in Part I, Item 3 “Legal Proceedings,” and Note 18, “Contingencies,” we revised our assessment of those lawsuits. We had previously not considered a loss probable and had concluded that any reasonably possible loss was not material. We have now concluded, based on the proposed settlement terms, that a loss is probable and reasonably estimable, and therefore we have recorded an accrual of $65.0 million included in selling, general and administrative expenses for the fourth quarter. The settlement remains subject to court approval.
Removed paragraphs (9)
Previous report
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. 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. 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. 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. 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. 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.
Previous report
•Total revenues were $2.0 billion during fiscal 2025, a 16% increase from fiscal 2024.
Previous report
•Operating income was $924.9 million during fiscal 2025, a 26% increase from fiscal 2024.
Previous report
•Diluted EPS was $26.54 during fiscal 2025, a 30% increase from fiscal 2024.
Previous report
•Cash flow from operating activities was $778.8 million during fiscal 2025, compared with $633.0 million during fiscal 2024.
Previous report
•Cash and cash equivalents were $134.1 million as of September 30, 2025, compared with $150.7 million as of September 30, 2024.
Previous report
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. 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. 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.
Previous report
Goodwill and Other Long-Lived Assets - Impairment Assessment
Previous report
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. 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. Should different conditions prevail, material write downs of our other long-lived assets could occur.
Reworded paragraphs (42)
Previous wording
During fiscal 2025, the strategy for our Software segment continued to advance and drive growth through our platform-first products. We expanded our FICO® Platform reach, both by geography and customer type, with the launch of FICO® Marketplace, enabling organizations to operationalize analytics, power customer connections, and make decisions at scale. Marketplace offers easy access to data, artificial intelligence (“AI”) models, optimization tools, decision rulesets, and machine learning models, which deliver enterprise business outcomes from AI. We continue to innovate and bring new capabilities to FICO Platform, demonstrating its value with new customers and expanding use cases with existing customers and partners. We announced newly granted patents around advancing responsible AI, machine learning, and applied intelligence technology. 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.
Current wording
During fiscal 2026, the strategy for our Software segment continued to advance and drive growth through our platform-first products. We expanded our FICO® Platform reach, both by geography and customer type, by adding and expanding strategic relationships with several major global systems integrators, scaling distribution with our payment processor partners, and expanding scaled partner enablement and onboarding programs including FICO® Marketplace. We continue to innovate and bring the next generation of capabilities to FICO® Platform, demonstrating its value with new customers and expanding use cases with existing customers and partners. We announced newly-granted patents around advancing responsible AI, foundational models, blockchain governance, and applied intelligence technology. 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.
Previous wording
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.
Current wording
We also continued to enhance stockholder value by returning cash to stockholders through our stock repurchase program. During fiscal 2026, we repurchased 2.5 million shares at a total repurchase price of $3.1 billion.
Previous wording
•Net income was $651.9 million during fiscal 2025, a 27% increase from fiscal 2024.
Current wording
•Total revenues were $2.5 billion during fiscal 2026, a 27% increase from fiscal 2025.
Previous wording
•Revenues for our Scores segment were $1.2 billion during fiscal 2025, a 27% increase from fiscal 2024.
Current wording
•Revenues for our Scores segment were $1.7 billion during fiscal 2026, a 41% increase from fiscal 2025.
Previous wording
•Annual Recurring Revenue for our Software segment as of September 30, 2025 was $747.3 million, a 4% increase from September 30, 2024.
Current wording
•Annual Recurring Revenue for our Software segment as of September 30, 2026 was $850.9 million, a 14% increase from September 30, 2025.
Previous wording
•Dollar-Based Net Retention Rate for our Software segment was 102% as of September 30, 2025.
Current wording
•Dollar-Based Net Retention Rate for our Software segment was 112% as of September 30, 2026.
Previous wording
Revolving Line of Credit and Term Loans
Current wording
•In March 2026, we issued $1.0 billion of senior notes, the proceeds of which were used to make a payment against our revolving line of credit and to repay the $400 million of our senior notes due in May 2026. In June 2026, we amended our credit agreement to provide for a $1.5 billion term loan, the proceeds of which were used to fund an accelerated share repurchase agreement (“ASR Agreement”).
Previous wording
•We issued $1.5 billion of senior notes and used the net proceeds to repay all the outstanding balances on our term loans. We also amended our credit agreement to increase our borrowing capacity under the unsecured revolving line of credit to $1.0 billion and extended its maturity. Total debt balance was $3.1 billion as of September 30, 2025, compared with $2.2 billion as of September 30, 2024.
Current wording
•Total debt balance was $5.3 billion as of September 30, 2026, compared with $3.1 billion as of September 30, 2025.
Previous wording
•Total share repurchases during fiscal 2025 were $1.4 billion, compared with $0.8 billion during fiscal 2024.
Current wording
•Total share repurchases during fiscal 2026 were $3.1 billion, including $1.5 billion paid under the ASR Agreement, compared with $1.4 billion during fiscal 2025.
Previous wording
ACV Bookings is calculated by dividing the total expected contract value by the contract term in years. The expected contract value equals the fixed amount — including guaranteed minimums, if any — stated in the contract, plus estimates of future usage-based fees. We develop estimates from discussions with our customers and examinations of historical data from similar products and customer arrangements. Differences between estimates and actual results occur due to variability in the estimated usage. This variability can be the result of the economic trends in our customers’ industries, individual performance of our customers relative to their competitors, and regulatory and other factors that affect the business environment in which our customers operate. For the periods presented, ACV Bookings related to estimates of future usage-based fees was approximately 30% of the total ACV Bookings amount on an annualized basis. Differences between the initial estimates of future usage-based fees and actual results historically have not been material and we do not currently expect that they will be materially different in the future.
Current wording
ACV Bookings is calculated by dividing the total expected contract value by the contract term in years. The expected contract value equals the fixed amount — including guaranteed minimums, if any — stated in the contract, plus estimates of future usage-based fees. We develop estimates from discussions with our customers and examinations of historical data from similar products and customer arrangements. Differences between estimates and actual results occur due to variability in the estimated usage. This variability can be the result of the economic trends in our customers’ industries, individual performance of our customers relative to their competitors, and regulatory and other factors that affect the business environment in which our customers operate. For the periods presented, ACV Bookings related to estimates of future usage-based fees was approximately 20% of the total ACV Bookings amount on an annualized basis. Differences between the initial estimates of future usage-based fees and actual results historically have not been material and we do not currently expect that they will be materially different in the future.
Previous wording
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. 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. The increase in business-to-consumer scores revenue was primarily attributable to an increase in royalties derived from scores sold indirectly to consumers through consumer reporting agencies.
Current wording
Scores segment revenues increased $483.6 million in fiscal 2026 from 2025 due to an increase of $473.6 million in our business-to-business scores revenue and an increase of $10.0 million in our business-to-consumer scores revenue. The increase in business-to-business scores revenue was primarily attributable to both a higher unit price and an increase in volume of mortgage origination scores. The increase in business-to-consumer scores revenue was primarily attributable to an increase in royalties derived from scores sold indirectly to consumers through credit reporting agencies.
Previous wording
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. 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.
Current wording
Software segment revenues increased $60.4 million in fiscal 2026 from 2025 due to a $68.0 million increase in our on-premises and SaaS software revenue, partially offset by a $7.6 million decrease in our professional services revenue. 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, partially offset by a decrease in license revenue recognized at a point in time. The decrease in professional services revenue was primarily attributable to our strategy to emphasize higher-margin software over professional services.
Previous wording
Operating Expenses and Other Income (Expense), Net
Current wording
Operating Expenses and Other Expense, Net
Previous wording
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.
Current wording
Cost of revenues consists primarily of employee salaries, incentive compensation, and benefits for personnel directly involved in delivering software products, operating SaaS infrastructure, and providing support, implementation and consulting services; third-party hosting fees related to our SaaS services; overhead, facilities and data center costs; software royalty fees; consumer reporting agency data and processing services; outside services; and travel costs.
Previous wording
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 infrastructure and facilities costs was primarily attributable to an increase in third-party data center hosting costs and an increase in depreciation on data center computer hardware. The decrease in outside services costs was primarily attributable to decreased third-party contractor costs. The decrease in personnel and labor costs was primarily attributable to decreased incentive expense. 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.
Current wording
The fiscal 2026 over 2025 decrease in cost of revenues of $2.2 million was primarily attributable to a $9.9 million decrease in personnel and labor costs and a $2.1 million decrease in direct materials and other costs, partially offset by a $9.8 million increase in infrastructure and facilities costs. The decrease in personnel and labor costs was primarily attributable to decreased headcount. The decrease in direct materials and other costs was primarily attributable to decreased telecommunications costs that support FICO® Customer Communications Services revenue. The increase in infrastructure and facilities costs was primarily attributable to increased third-party data center hosting costs. Cost of revenues as a percentage of revenues decreased to 14% during fiscal 2026 from 18% during fiscal 2025, primarily due to increased sales of our higher-margin Scores products.
Previous wording
Research and development expenses include personnel and related overhead costs incurred in the development of new products and services, including research of mathematical and statistical models and development of new versions of Software products.
Current wording
Research and development expenses include personnel and related overhead costs incurred in the development of new products and services, the enhancement and improvement of our existing products and services, and the research of mathematical and statistical models.
Previous wording
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 increased third-party data center hosting costs andthird-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. Research and development expenses as a percentage of revenues decreased to 9%during fiscal 2025 from 10% during fiscal 2024.
Current wording
The fiscal 2026 over 2025 increase in research and development expenses of $21.0 million was primarily attributable to a $21.9 million increase in infrastructure and facilities costs and a $4.8 million increase in personnel and labor costs, partially offset by a $5.7 million decrease in outside services and other costs. The increase in infrastructure and facilities costs was primarily attributable to increased third-party data center hosting costs. The increase in personnel and labor costs was primarily attributable to increased incentive compensation costs and increased share-based compensation costs. The decrease in outside services and other costs was primarily attributable to decreased third-party contractor costs. Research and development expenses as a percentage of revenues decreased to 8% during fiscal 2026 from 9% during fiscal 2025.
Previous wording
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.
Current wording
Selling, general and administrative expenses consist principally of employee salaries, incentive compensation, commissions, and benefits; advertising and other promotional expenses; travel costs; overhead costs; corporate facilities expenses; legal expenses; and business development expenses.
Previous wording
During the fourth quarter of fiscal 2025, we incurred charges of$10.9 million in employee separation costs due to the elimination of 226 positions throughout the Company. Cash payments for all the employee separation costs will be paid by the end of our fiscal 2026.
Current wording
During the fourth quarter of fiscal 2026, we incurred charges of $27.3 million in employee separation costs due to the elimination of approximately 15% of positions across the Company. Cash payments for the remaining employee separation costs will be paid by the end of fiscal 2027. During the fourth quarter of fiscal 2025, we incurred charges of$10.9 million in employee separation costs due to the elimination of 226 positions across the Company. Cash payments for these employee separation costs were paid before the end of fiscal 2026.
Previous wording
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.
Current wording
The fiscal 2026 over 2025 increase in interest expense, net of $89.7 million was primarily attributable to a higher average outstanding debt balance during fiscal 2026. The higher average debt balance was primarily attributable to the $1.5 billion of 2025 Senior Notes (as defined below) and the $1.0 billion of 2026 Senior Notes (as defined below).
Previous wording
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.
Current wording
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 receivables 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.
Previous wording
The fiscal 2025 over 2024 decrease in other income, net of $2.6 million was primarily attributable to adecrease in net unrealized gains on investments classified as trading securities in our supplemental retirement and savings plan, partially offset by anincrease 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.
Current wording
The fiscal 2026 over 2025 increase in other income, net of $46.3 million was primarily attributable to a non-operating gain related to the sale of an equity investment in which we had a minority interest, partially offset by foreign exchange losses incurred during fiscal 2026, compared to foreign exchange gains incurred during fiscal 2025, resulting from remeasurement of foreign-currency-denominated receivables 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.
Previous wording
Our effective income tax rates were 18.8%, 20.1% and 22.4% in fiscal 2025, 2024 and 2023, respectively.
Current wording
Our effective income tax rates were 24.1%, 18.8% and 20.1% in fiscal 2026, 2025 and 2024, respectively.
Previous wording
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.
Current wording
The increase in our effective tax rate in fiscal 2026 compared to fiscal 2025 was due to a decrease in excess tax benefits related to share-based compensation.
Previous wording
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.
Current wording
The fiscal 2026 over 2025 increase in operating income of $340.8 million was primarily attributable to a $544.0 million increase in segment revenues, partially offset by a $79.5 million increase in corporate expenses, a $78.5 million increase in segment operating expenses, a $28.8 million increase in share-based compensation cost, and a $16.4 million increase in restructuring charges.
Previous wording
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.
Current wording
At the segment level, the $465.5 million increase in segment operating income was the result of a $463.6 million increase in our Scores segment operating income and a $1.9 million increase in our Software segment operating income.
Previous wording
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. Segment operating income as a percentage of segment revenue for Scores was 88%, consistent with fiscal 2024.
Current wording
The $463.6 million increase in our Scores segment operating income was attributable to a $483.6 million increase in segment revenue, partially offset by a $20.0 million increase in segment operating expenses. Segment operating income as a percentage of segment revenue for Scores increased to 90% from 88%, primarily due to higher business-to-business scores revenue driven by both a higher unit price and an increase in volume of mortgage origination scores.
Previous wording
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. 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.
Current wording
The $1.9 million increase in our Software segment operating income was attributable to a $60.4 million increase in segment revenue, partially offset by a $58.5 million increase in segment operating expenses. Segment operating income as a percentage of segment revenue for Software decreased to 28% from 30%, primarily attributable to the increases in third-party data center hosting costs and a decrease in sales of higher-margin software recognized at a point in time.
Previous wording
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. 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. 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.
Current wording
As of September 30, 2026, we had $217.6 million in cash and cash equivalents, which included $165.9 million held by our foreign subsidiaries. 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 $337.5 million principal payments due on our term loan over the next 12 months. 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.
Previous wording
Our primary method for funding operations and growth has been through cash flows generated from operating activities. 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.
Current wording
Our primary method for funding operations and growth has been through cash flows generated from operating activities. Net cash provided by operating activities totaled $1.1 billion in fiscal 2026 compared to $778.8 million in fiscal 2025. The $293.3 million increase was attributable to a $183.0 million increase in net income, a $69.8 million increase that resulted from timing of receipts and payments in our ordinary course of business, and a $40.5 million increase in non-cash items.
Previous wording
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.
Current wording
Net cash used in investing activities totaled $45.4 million in fiscal 2026 compared to $43.7 million in fiscal 2025. The $1.7 million increase was attributable to a $12.8 million increase in purchases of other investments and a $5.1 million increase in capitalized internal-use software costs, partially offset by a $9.4 million increase in proceeds from sales, net of purchases, of marketable securities and a $6.8 million decrease in purchases of property and equipment.
Previous wording
Net cash used in financing activities totaled $750.3 million in fiscal 2025 compared to $592.9 million in fiscal 2024. 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).
Current wording
Net cash used in financing activities totaled $941.1 million in fiscal 2026 compared to $750.3 million in fiscal 2025. The $190.8 million increase was primarily attributable to a $1.6 billion increase in repurchases of common stock (including the $1.5 billion paid under the ASR Agreement in fiscal 2026), a $500.0 million decrease in proceeds from issuance of senior notes, and the $400.0 million repayment of 2018 Senior Notes (as defined below), partially offset by a $2.2 billion increase in proceeds, net of payments, from the revolving line of credit and term loans, and a $92.0 million decrease in taxes paid related to net share settlement of equity awards.
Previous wording
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 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. 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. 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. 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.
Current wording
In June 2025, our Board of Directors approved a stock repurchase program (the “June 2025 program”), replacing our previously authorized July 2024 stock repurchase program, which was terminated prior to its expiration. The June 2025 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. In February 2026, our Board of Directors approved a stock repurchase program (the “February 2026 program”), replacing the June 2025 program, which was terminated prior to its expiration. The February 2026 program was open-ended and authorized repurchases of shares of our common stock from time to time up to an aggregate cost of $1.5 billion in the open market or in negotiated transactions. In June 2026, our Board of Directors approved a stock repurchase program (the “June 2026 program”), replacing the February 2026 program, which was terminated prior to its expiration. The June 2026 program is open-ended and authorizes repurchases of shares of our common stock from time to time up to an aggregate cost of $2.0 billion in the open market, in negotiated transactions or through accelerated share repurchase programs. The June 2026 program remains in effect until the total authorized amount is expended or until further action by our Board of Directors.
Previous wording
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. Also on May 13, 2025, we repaid in full and terminated the $300 million unsecured term loan (the “$300 Million Term Loan”) and the $450 million unsecured term loan (the “$450 Million Term Loan”) outstanding under our credit agreement, utilizing proceeds from the issuance of the 2025 Senior Notes (as defined below). 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. 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 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. 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.
Current wording
We have a credit agreement with a syndicate of banks that provides for a $1.0 billion unsecured revolving line of credit that matures on May 13, 2030. On June 5, 2026, we amended our credit agreement to provide for the issuance of a $1.5 billion unsecured term loan that was borrowed in full on June 5, 2026 and matures on May 15, 2028. The credit agreement also provides for an option for us to request additional incremental term loans and/or incremental increases to the revolving line of credit from time to time, in each case subject to the terms and conditions of the credit agreement. Borrowings under the credit agreement 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. Principal on the term loan is to be repaid in consecutive quarterly installments on the last business day of March, June, September, and December equal to (i) $75.0 million from September 30, 2026 through and including June 30, 2027 and (ii) $112.5 million thereafter. Interest rates on amounts borrowed under the revolving line of credit and 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) 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 applicable margin for base rate borrowings and for SOFR borrowings for the loans under the credit agreement is determined based on our consolidated leverage ratio. The applicable margin for loans under the revolving line of credit for base rate borrowings ranges from 0% to 1% per annum and for SOFR borrowings ranges from 1% to 2% per annum. The applicable margin for the term loan for base rate borrowings ranges from 0.5% to 1.25% per annum and for SOFR borrowings ranges from 1.5% to 2.25% per annum. In addition, we must pay certain credit agreement fees. The credit agreement contains certain restrictive covenants including a maximum consolidated leverage ratio of 4.5 to 1.0 through December 30, 2026, 4.0 to 1.0 during December 31, 2026 through December 30, 2027, and 3.5 to 1.0 during December 31, 2027 and thereafter, 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.
Previous wording
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.
Current wording
As of September 30, 2026, we had $700.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 5.873% and $1.2 billion in outstanding balance of the term loan at an interest rate of 5.761%, and we were in compliance with all financial covenants under the credit agreement.
Previous wording
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. On December 6, 2019, we issued $350 million of senior notes in a private offering to qualified institutional investors (the “2019 Senior Notes”). The 2019 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028. 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 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. 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”). 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. 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.
Current wording
On May 8, 2018, we issued $400.0 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”). The 2018 Senior Notes required interest payments semi-annually at a rate of 5.25% per annum and were to mature on May 15, 2026. On March 26, 2026, prior to the maturity date, we repaid in full the 2018 Senior Notes, utilizing proceeds from the issuance of the 2026 Senior Notes (as defined below). On December 6, 2019, we issued $350.0 million of senior notes in a private offering to qualified institutional investors (the “2019 Senior Notes”). The 2019 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028. On December 17, 2021, we issued $550.0 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 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. On May 13, 2025, we issued $1.5 billion of senior notes in a private offering to qualified institutional investors (the “2025 Senior Notes”). The 2025 Senior Notes require interest payments semi-annually at a rate of 6.00% per annum and will mature on May 15, 2033. On March 20, 2026, we issued $1.0 billion of senior notes in a private offering to qualified institutional investors (the “2026 Senior Notes,” and collectively with the 2018 Senior Notes, the 2019 Senior Notes, the 2021 Senior Notes, and the 2025 Senior Notes, the “Senior Notes”). The 2026 Senior Notes require interest payments semi-annually at a rate of 6.25% per annum and will mature on September 15, 2034. The indentures for the Senior Notes contain certain covenants typical of unsecured obligations. As of September 30, 2026, the carrying value of the Senior Notes was $3.4 billion and we were in compliance with all financial covenants under these obligations.
Previous wording
(1)Represents the unpaid principal payments due under the Senior Notes and revolving line of credit.
Current wording
(1)Represents the unpaid principal payments due under the Senior Notes, revolving line of credit, and term loan.
Previous wording
We prepare our consolidated financial statements in conformity with U.S. GAAP. These accounting principles require management to make certain judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We periodically evaluate our estimates including those relating to revenue recognition, goodwill resulting from business combinations and other long-lived assets – impairment assessment, share-based compensation, income taxes, and contingencies and litigation. We base our estimates on historical experience and various other assumptions that we believe to be reasonable based on the specific circumstances, the results of which form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and such differences could be material to our financial condition and results of operations. Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations.
Current wording
We prepare our consolidated financial statements in conformity with U.S. GAAP. These accounting principles require management to make certain judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. We periodically evaluate our estimates including those relating to revenue recognition, goodwill resulting from business combinations – impairment assessment, share-based compensation, income taxes, and contingencies and litigation. We base our estimates on historical experience and various other assumptions that we believe to be reasonable based on the specific circumstances, the results of which form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and such differences could be material to our financial condition and results of operations. Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations.
Previous wording
Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct and should be accounted for separately may require significant judgment. Specifically, when implementation service is included in the original software or SaaS offerings, judgment is required to determine if the implementation service significantly modifies or customizes the software or SaaS service in such a way that the risks of providing it and the customization service are inseparable. In rare instances, contracts may include significant modification or customization of the software of SaaS service and will result in the combination of software or SaaS service and implementation service as one performance obligation. For the periods presented, we have not experienced significant changes to our estimates and judgments related to the identification of performance obligations for our contracts.
Current wording
Our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct and should be accounted for separately may require significant judgment. Specifically, when implementation service is included in the original software or SaaS offerings, judgment is required to determine if the implementation service significantly modifies or customizes the software or SaaS service in such a way that the risks of providing it and the customization service are inseparable. In rare instances, contracts may include significant modification or customization of the software or SaaS service and will result in the combination of software or SaaS service and implementation service as one performance obligation. For the periods presented, we have not experienced significant changes to our estimates and judgments related to the identification of performance obligations for our contracts.
Previous wording
We have determined that our reporting units are the same as our reportable segments. When evaluating goodwill for impairment, we may first perform an assessment qualitatively whether it is more likely than not that a reporting unit's carrying amount exceeds its fair value, referred to as a “step zero” approach. If, based on the review of the qualitative factors, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying value, we would bypass the two-step impairment test. Events and circumstances we consider in performing the “step zero” qualitative assessment include macro-economic conditions, market and industry conditions, internal cost factors, share price fluctuations, and the operational stability and overall financial performance of the reporting units. If we conclude that it is more likely than not that a reporting unit's fair value is less than its carrying amount, we would perform the first step (“step one”) of the two-step impairment test and calculate the estimated fair value of the reporting unit by using discounted cash flow valuation models and by comparing our reporting units to guideline publicly-traded companies. These methods require estimates of our future revenues, profits, capital expenditures, working capital, and other relevant factors, as well as selecting appropriate guideline publicly-traded companies for each reporting unit. We estimate these amounts by evaluating historical trends, current budgets, operating plans, industry data, and other relevant factors. 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.
Current wording
We have determined that our reporting units are the same as our reportable segments. When evaluating goodwill for impairment, we may first perform an assessment qualitatively whether it is more likely than not that a reporting unit's carrying amount exceeds its fair value. If, based on the review of the qualitative factors, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying value, we would bypass the quantitative impairment test. Events and circumstances we consider in performing the qualitative assessment include macro-economic conditions, market and industry conditions, internal cost factors, share price fluctuations, and the operational stability and overall financial performance of the reporting units. If we conclude that it is more likely than not that a reporting unit's fair value is less than its carrying amount, we would perform the quantitative impairment test and calculate the estimated fair value of the reporting unit by using discounted cash flow valuation models and by comparing our reporting units to guideline publicly-traded companies. These methods require estimates of our future revenues, profits, capital expenditures, working capital, and other relevant factors, as well as selecting appropriate guideline publicly-traded companies for each reporting unit. We estimate these amounts by evaluating historical trends, current budgets, operating plans, industry data, and other relevant factors. Alternatively, we may bypass the qualitative assessment described above for any reporting unit in any period and proceed directly to performing the goodwill quantitative impairment test.
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