XML 18 R7.htm IDEA: XBRL DOCUMENT
v3.19.1

Nature of Business | 6 Months Ended
--- | ---
Mar. 31, 2019
Accounting Policies [Abstract] |
Nature of Business | Nature of Business Fair Isaac Corporation Incorporated under the laws of the State of Delaware, Fair Isaac Corporation (“FICO”) is a provider of analytic, software and data management products and services that enable businesses to automate, improve and connect decisions. FICO provides a range of analytical solutions, credit scoring and credit account management products and services to banks, credit reporting agencies, credit card processing agencies, insurers, retailers, telecommunications providers, pharmaceutical companies, healthcare organizations, public agencies and organizations in other industries. In this Quarterly Report on Form 10-Q, Fair Isaac Corporation is referred to as “FICO,” “we,” “us,” “our,” or “the Company.” Principles of Consolidation and Basis of Presentation We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q and the applicable accounting guidance. Consequently, we have not necessarily included all information and footnotes required for audited financial statements. In our opinion, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments, except as otherwise indicated) necessary for a fair presentation of our financial position and results of operations. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with our audited consolidated financial statements and notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended September 30, 2018. The interim financial information contained in this report is not necessarily indicative of the results to be expected for any other interim period or for the entire fiscal year. Effective October 1, 2018, we adopted Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) using the full retrospective method. In connection with this adoption, the results and related disclosures for the comparative fiscal 2018 periods presented in this Form 10-Q were adjusted to be presented as if ASU 2014‑09 had been in effect during such fiscal 2018 periods. See “New Accounting Pronouncements” below and Note 8. All amounts and disclosures set forth in this Form 10-Q reflect these changes. The condensed consolidated financial statements include the accounts of FICO and its subsidiaries. All intercompany accounts and transactions have been eliminated. Use of Estimates We make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures made in the accompanying notes. For example, we use estimates in determining the collectability of accounts receivable; the appropriate levels of various accruals; labor hours in connection with fixed-fee service contracts; the amount of our tax provision and the realizability of deferred tax assets. We also use estimates in determining the remaining economic lives and carrying values of acquired intangible assets, property and equipment, and other long-lived assets. In addition, we use assumptions to estimate the fair value of reporting units and share-based compensation. Actual results may differ from our estimates. Revenue Recognition Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration to which we expect to be entitled to in exchange for those goods or services. See Note 8 for further discussion on revenues. New Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09. The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from the contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (“full retrospective method”), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (“modified retrospective method”). We adopted ASU 2014-09 in the first quarter of our fiscal 2019 using the full retrospective method which required us to adjust each prior reporting period presented. This adoption primarily affected timing of revenue recognition of license revenue on term licenses and transactional revenue on guaranteed minimum fees related to our on-premises software products. Under the new standard, we recognize revenue when control of the license is transferred to the customer, rather than at the date payments become due and payable when there are extended payment terms, or ratably over the term of the contract as required under the previous standard. In addition, revenue attributable to a software license renewal is recognized at the beginning of the applicable renewal period rather than at the signing of the renewal agreement as required under the previous standard. Additionally, under the new standard, when we enter into noncancellable contracts that provide unconditional rights to payment from our customers for services we have not yet completed or services we will provide in the near future, we present receivables — our unconditional rights to payments — and deferred revenues on a gross basis, rather than on a net basis. Finally, under the new standard we capitalize and amortize contract acquisition costs such as commissions paid for software-as-a-service (“SaaS”) cloud services contracts in excess of one year. Following the adoption of ASU 2014-09, the revenue recognition for our other sales arrangements remained materially consistent with our historical practice. Upon adoption of ASU 2014-09, we applied the standard’s practical expedients that permit the omission of prior-period information about our performance obligations. Adoption of the standard impacted our previously reported results as follows: Condensed Consolidated Balance Sheets
| September 30, 2018
| As Previously Reported |  | Adjustment |  | As Adjusted
| (In thousands)
Accounts receivable, net | 208,865 |  |  | 57,877 |  |  | 266,742 |
Deferred income taxes | 20,117 |  |  | (6,312 | ) |  | 13,805 |
Other assets | 12,431 |  |  | 23,823 |  |  | 36,254 |
Other accrued liabilities | 30,457 |  |  | 568 |  |  | 31,025 |
Deferred revenue | 52,215 |  |  | 51,120 |  |  | 103,335 |
Stockholders’ equity | 263,737 |  |  | 23,700 |  |  | 287,437 |
Condensed Consolidated Statements of Income and Comprehensive Income
| Quarter Ended March 31, 2018 |  | Six Months Ended March 31, 2018
| As Previously Reported |  | Adjustment |  | As Adjusted |  | As Previously Reported |  | Adjustment |  | As Adjusted
| (In thousands, except per share amounts)
Revenues | 257,858 |  |  | (1,598 | ) |  | 256,260 |  |  | 493,179 |  |  | (4,558 | ) |  | 488,621 |
Cost of revenues | 78,519 |  |  | 974 |  |  | 79,493 |  |  | 152,878 |  |  | 1,047 |  |  | 153,925 |
Selling, general and administrative | 97,057 |  |  | (932 | ) |  | 96,125 |  |  | 187,353 |  |  | (886 | ) |  | 186,467 |
Provision for income taxes | 8,527 |  |  | (534 | ) |  | 7,993 |  |  | 15,185 |  |  | (9,193 | ) |  | 5,992 |
Net income | 32,275 |  |  | (1,106 | ) |  | 31,169 |  |  | 59,574 |  |  | 4,474 |  |  | 64,048 |
Comprehensive income | 41,400 |  |  | (1,106 | ) |  | 40,294 |  |  | 71,770 |  |  | 4,474 |  |  | 76,244 |
Basic earnings per share | 1.08 |  |  | (0.04 | ) |  | 1.04 |  |  | 1.98 |  |  | 0.15 |  |  | 2.13 |
Diluted earnings per share | 1.03 |  |  | (0.03 | ) |  | 1.00 |  |  | 1.90 |  |  | 0.14 |  |  | 2.04 |
Condensed Consolidated Statement of Cash Flows
| Six Months Ended March 31, 2018
| As Previously Reported |  | Adjustment |  | As Adjusted
| (In thousands)
Cash flows from operating activities: |  |  |  |  |
Net income | 59,574 |  |  | 4,474 |  |  | 64,048 |
Deferred income taxes | 6,041 |  |  | (9,193 | ) |  | (3,152 | )
Changes in operating assets and liabilities | (38,760 | ) |  | 4,719 |  |  | (34,041 | )
Recent Accounting Pronouncements Not Yet Adopted In February 2018, the FASB issued ASU No. 2018-02, “Income Statement — Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”). ASU 2018-02 allows reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Act (defined below) and requires certain disclosures about stranded tax effects. The guidance is effective for fiscal years and interim periods beginning after December 15, 2018, which means it will be effective for our fiscal year beginning October 1, 2019. ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. We do not believe that adoption of ASU 2018-02 will have a significant impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, Topic 842). Topic 842 requires companies to generally recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets. Topic 842 is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018, which means it will be effective for our fiscal year beginning October 1, 2019. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of Topic 842 on our consolidated financial statements. We expect that most of our operating leases will be recognized as right-of-use assets and corresponding lease liabilities on our consolidated balance sheets, which will increase our total assets and total liabilities upon adoption.

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the business description and accounting policies concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI http://asc.fasb.org/topic&trid=2134479 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
Name: | us-gaap_BusinessDescriptionAndAccountingPoliciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration