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Segment Information | 9 Months Ended
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Jun. 30, 2022
Segment Reporting [Abstract] |
Segment Information | Segment Information During the fourth quarter of our fiscal 2021, we reevaluated our operating segments to better align with how our chief operating decision maker (“CODM”), who is our Chief Executive Officer, evaluates performance and allocates resources. The key factors evaluated included our evolving platform strategies, our go-to market considerations, and sales of our product lines and businesses during fiscal 2021, and in particular the divestiture of our Collections and Recovery (“C&R”) business in June 2021, among others. As a result, we consolidated our operating segment structure from three to two by merging Applications and Decision Management Software segments into the new Software segment. Based on this change, we determined we have two reportable segments and revised prior comparative periods to conform to the current period segment presentation. The new segments are as follows: •Scores. This segment includes our business-to-business (“B2B”) scoring solutions and services which give our clients access to predictive credit and other scores that can be easily integrated into their transaction streams and decision-making processes. This segment also includes our business-to-consumer (“B2C”) scoring solutions, including our myFICO.com subscription offerings. •Software. This segment includes pre-configured analytic and decision management solutions designed for a specific type of business need or process — such as account origination, customer management, customer engagement, fraud detection, financial crimes compliance, and marketing — as well as associated professional services. This segment also includes FICO® Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by our customers to address a wide variety of business use cases. These offerings are available to our customers as SaaS or as on-premises software. Our CODM evaluates segment financial performance based on segment revenues and segment operating income. Segment operating expenses consist of direct and indirect costs principally related to personnel, facilities, IT infrastructure, consulting, travel and depreciation. Indirect costs are allocated to the segments generally based on relative segment revenues, fixed rates established by management based upon estimated expense contribution levels and other assumptions that management considers reasonable. We do not allocate broad-based incentive expense, share-based compensation expense, restructuring and acquisition-related expense, amortization expense, various corporate charges and certain other income and expense measures to our segments. These income and expense items are not allocated because they are not considered in evaluating the segment’s operating performance. Our CODM does not evaluate the financial performance of each segment based on its respective assets or capital expenditures; rather, depreciation amounts are allocated to the segments from their internal cost centers as described above. The following tables summarize segment information for the quarters and nine-month periods ended June 30, 2022 and 2021:
| Quarter Ended June 30, 2022
| Scores |  | Software |  | Unallocated Corporate Expenses |  | Total
| (In thousands)
Segment revenues: |  |  |  |  |  |  |
On-premises and SaaS software | $ | — |  |  | $ | 142,537 |  |  | $ | — |  |  | $ | 142,537 |
Professional services | — |  |  | 27,074 |  |  | — |  |  | 27,074 |
Scores | 179,355 |  |  | — |  |  | — |  |  | 179,355 |
Total segment revenues | 179,355 |  |  | 169,611 |  |  | — |  |  | 348,966 |
Segment operating expense | (19,207) |  |  | (122,048) |  |  | (38,015) |  |  | (179,270) |
Segment operating income | $ | 160,148 |  |  | $ | 47,563 |  |  | $ | (38,015) |  |  | 169,696 |
Unallocated share-based compensation expense |  |  |  |  |  |  | (28,549) |
Unallocated amortization expense |  |  |  |  |  |  | (532) |
Operating income |  |  |  |  |  |  | 140,615 |
Unallocated interest expense, net |  |  |  |  |  |  | (18,721) |
Unallocated other expense, net |  |  |  |  |  |  | (1,000) |
Income before income taxes |  |  |  |  |  |  | $ | 120,894 |
Depreciation expense | $ | 182 |  |  | $ | 3,565 |  |  | $ | 26 |  |  | $ | 3,773 |
| Quarter Ended June 30, 2021
| Scores |  | Software |  | Unallocated Corporate Expenses |  | Total
| (In thousands)
Segment revenues: |  |  |  |  |  |  |
On-premises and SaaS software | $ | — |  |  | $ | 130,230 |  |  | $ | — |  |  | $ | 130,230 |
Professional services | — |  |  | 35,752 |  |  | — |  |  | 35,752 |
Scores | 172,202 |  |  | — |  |  | — |  |  | 172,202 |
Total segment revenues | 172,202 |  |  | 165,982 |  |  | — |  |  | 338,184 |
Segment operating expense | (25,418) |  |  | (145,796) |  |  | (33,820) |  |  | (205,034) |
Segment operating income | $ | 146,784 |  |  | $ | 20,186 |  |  | $ | (33,820) |  |  | 133,150 |
Unallocated share-based compensation expense |  |  |  |  |  |  | (30,761) |
Unallocated amortization expense |  |  |  |  |  |  | (810) |
Unallocated gains on product line asset sales and business divestiture |  |  |  |  |  |  | 92,805 |
Operating income |  |  |  |  |  |  | 194,384 |
Unallocated interest expense, net |  |  |  |  |  |  | (10,018) |
Unallocated other income, net |  |  |  |  |  |  | 3,526 |
Income before income taxes |  |  |  |  |  |  | $ | 187,892 |
Depreciation expense | $ | 159 |  |  | $ | 4,854 |  |  | $ | 38 |  |  | $ | 5,051 |
| Nine Months Ended June 30, 2022
| Scores |  | Software |  | Unallocated Corporate Expenses |  | Total
| (In thousands)
Segment revenues: |  |  |  |  |  |  |
On-premises and SaaS software | $ | — |  |  | $ | 417,963 |  |  | $ | — |  |  | $ | 417,963 |
Professional services | — |  |  | 77,975 |  |  | — |  |  | 77,975 |
Scores | 532,584 |  |  | — |  |  | — |  |  | 532,584 |
Total segment revenues | 532,584 |  |  | 495,938 |  |  | — |  |  | 1,028,522 |
Segment operating expense | (62,217) |  |  | (360,582) |  |  | (109,483) |  |  | (532,282) |
Segment operating income | $ | 470,367 |  |  | $ | 135,356 |  |  | $ | (109,483) |  |  | 496,240 |
Unallocated share-based compensation expense |  |  |  |  |  |  | (86,363) |
Unallocated amortization expense |  |  |  |  |  |  | (1,619) |
Operating income |  |  |  |  |  |  | 408,258 |
Unallocated interest expense, net |  |  |  |  |  |  | (48,127) |
Unallocated other expense, net |  |  |  |  |  |  | (1,932) |
Income before income taxes |  |  |  |  |  |  | $ | 358,199 |
Depreciation expense | $ | 563 |  |  | $ | 11,249 |  |  | $ | 83 |  |  | $ | 11,895 |
| Nine Months Ended June 30, 2021
| Scores |  | Software |  | Unallocated Corporate Expenses |  | Total
| (In thousands)
Segment revenues: |  |  |  |  |  |  |
On-premises and SaaS software | $ | — |  |  | $ | 382,236 |  |  | $ | — |  |  | $ | 382,236 |
Professional services | — |  |  | 114,151 |  |  | — |  |  | 114,151 |
Scores | 485,572 |  |  | — |  |  | — |  |  | 485,572 |
Total segment revenues | 485,572 |  |  | 496,387 |  |  | — |  |  | 981,959 |
Segment operating expense | (69,221) |  |  | (438,317) |  |  | (97,465) |  |  | (605,003) |
Segment operating income | $ | 416,351 |  |  | $ | 58,070 |  |  | $ | (97,465) |  |  | 376,956 |
Unallocated share-based compensation expense |  |  |  |  |  |  | (84,099) |
Unallocated amortization expense |  |  |  |  |  |  | (2,692) |
Unallocated gains on product line asset sales and business divestiture |  |  |  |  |  |  | 100,139 |
Operating income |  |  |  |  |  |  | 390,304 |
Unallocated interest expense, net |  |  |  |  |  |  | (29,602) |
Unallocated other income, net |  |  |  |  |  |  | 6,974 |
Income before income taxes |  |  |  |  |  |  | $ | 367,676 |
Depreciation expense | $ | 520 |  |  | $ | 15,224 |  |  | $ | 116 |  |  | $ | 15,860 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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