We maintain the 2021 Long-Term Incentive Plan (the “2021 Plan”). The 2021 Plan authorizes the issuance of up to 5,900,000 shares of our common stock, plus additional shares that become available due to the expiration, forfeiture or cancellation of awards outstanding under the 2012 Long-Term Incentive Plan. Under the terms of the 2021 Plan, the pool of shares available for issuance may be used for all types of equity awards available under the 2021 Plan, which include stock options, stock appreciation rights, restricted stock awards, stock unit awards and other share-based awards. All employees, consultants and advisors of FICO or any subsidiary, as well as all non-employee directors, are eligible to receive awards under the 2021 Plan. The 2021 Plan will remain in effect until the earliest of the following: all shares subject to the Plan are distributed, the Board terminates the Plan, or the tenth anniversary of the effective date of the Plan.

Stock option awards have a maximum term of ten years. In general, stock option awards and stock unit awards not subject to market or performance conditions vest annually over four years. Stock unit awards subject to market or performance conditions generally vest annually over three years based on the achievement of specified criteria. At September 30, 2025, there were 4,309,793 shares available for issuance as new awards under the 2021 Plan.

We maintain the 2019 Employee Stock Purchase Plan (the “2019 Purchase Plan”) under which we are authorized to issue up to 1,000,000 shares of our common stock to eligible employees. Eligible employees may elect to have up to 15% of their eligible pay withheld through payroll deductions to purchase FICO common stock during semi-annual offering periods. Offering period means approximately six-month periods commencing (a) on the first trading day on or after September 1 and terminating on the last trading day in the following February, and (b) on the first trading day on or after March 1 and terminating on the last trading day in the following August. Beginning with the March 2025 through August 2025 offering period and in subsequent offering periods, the purchase price of the stock is the lower of 85% of (i) the closing sales price of FICO common stock on the first trading day of each offering period or (ii) the closing sales price of FICO common stock on the last trading day of each offering period. Prior to the March 2025 through August 2025 offering period, the purchase price was 85% of the closing sales price of FICO common stock on the last trading day of each offering period. At September 30, 2025, there were 826,719 shares available for issuance under the 2019 Purchase Plan.

We recorded share-based compensation expense of $156.7 million, $149.4 million and $123.8 million in fiscal 2025, 2024 and 2023, respectively. The total tax benefit related to this share-based compensation expense was $15.3 million, $15.9 million and $13.8 million in fiscal 2025, 2024 and 2023, respectively. As of September 30, 2025, there was $199.9 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all equity compensation plans. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize that cost over a weighted-average period of 2.28 years.

The fair value of restricted stock units (“RSUs”) granted is the closing market price of our common stock on the date of grant, adjusted for the expected dividend yield, if applicable. We amortize the fair value on a straight-line basis over the vesting period.

The weighted-average fair value of the RSUs granted was $2,119.14, $1,150.58 and $620.51 during fiscal 2025, 2024 and 2023, respectively. The total intrinsic value of the RSUs that vested was $274.7 million, $171.0 million and $101.1 million during fiscal 2025, 2024 and 2023, respectively, determined as of the date of vesting.

Performance share units (“PSUs”) are granted to our senior officers and earned based on pre-established performance goals approved by the Leadership Development and Compensation Committee of our Board of Directors for any given performance period. The range of payout is zero to 200% of the number of target PSUs, based on the outcome of the performance conditions. We estimate the fair value of the PSUs using the closing market price of our common stock on the date of grant, adjusted for the expected dividend yield if applicable, based on the performance condition that is probable of achievement. We amortize the fair values over the requisite service period for each vesting tranche of the award. We reassess the probability at each reporting period and recognize the cumulative effect of the change in estimate in the period of change.

The weighted-average fair value of the PSUs granted was $2,227.11, $1,134.39 and $615.45 during fiscal 2025, 2024 and 2023, respectively. The total intrinsic value of the PSUs that vested was $101.1 million, $65.2 million and $40.3 million during fiscal 2025, 2024 and 2023, respectively, determined as of the date of vesting.

Market share units (“MSUs”) are granted to our senior officers and earned based on our total stockholder return relative to a benchmark index over performance periods of one, two and three years. For grants made in fiscal 2025 and thereafter, performance is measured against the S&P 500 Index. For grants made prior to fiscal 2025, performance was measured against the Russell 3000 Index. We estimate the fair value of MSUs granted using the Monte Carlo valuation model and amortize the fair values over the requisite service period for each vesting tranche of the award. In addition, we do not reverse the compensation cost solely because the market condition is not satisfied, and the award is therefore not earned by the employee, provided the requisite service is rendered. We used the following assumptions to estimate the fair value of our MSUs during fiscal 2025, 2024 and 2023:


	Year Ended September 30,
	2025		2024		2023

Expected volatility in FICO’s stock price	36.2	%	36.3	%	47.3	%
Expected volatility in Russell 3000 Index	N/A		18.2	%	26.0	%
Expected volatility in S&P 500 Index (peer average)	30.9	%	N/A		N/A
Correlation between FICO and the Russell 3000 Index	N/A		60.3	%	73.5	%
Correlation between FICO and the S&P 500 Index	30.3	%	N/A		N/A
Risk-free interest rate	4.09	%	4.39	%	4.02	%
Average expected dividend yield	—	%	—	%	—	%

The expected volatility was determined based on daily historical movements in our stock price and the S&P 500 Index (Russell 3000 Index for grants prior to fiscal 2025) for the three years preceding the grant date. The correlation between FICO and the S&P 500 Index (Russell 3000 Index for grants prior to fiscal 2025) was determined based on historical daily stock price movements for the three years preceding the grant date. The risk-free rate was determined based on U.S. Treasury zero-coupon yields over the three-year performance period. Because we have not declared or paid any cash dividends on our common stock since May 2017, and we do not presently plan to pay cash dividends on our common stock in the foreseeable future, we used an expected dividend yield of zero.

The weighted-average fair value of the MSUs granted was $1,596.70, $1,014.75 and $822.96 during fiscal 2025, 2024 and 2023, respectively. The total intrinsic value of the MSUs that vested was $102.1 million, $95.0 million and $42.2 million during fiscal 2025, 2024 and 2023, respectively, determined as of the date of vesting.

We estimate the fair value of stock options granted using the Black-Scholes option valuation model and we amortize the fair value on a straight-line basis over the vesting period. We used the following assumptions to estimate the fair value of our stock options during fiscal 2025, 2024 and 2023:


	Year Ended September 30,
	2025				2024				2023
Stock Options:
Weighted-average expected term (years)			4.40				4.46				5.23
Expected volatility (range)	34.6	-	36.5	%	33.6	-	33.9	%	33.4	-	35.5	%
Weighted-average volatility			35.0	%			33.7	%			33.5	%
Risk-free interest rate (range)	3.89	-	4.08	%	4.18	-	4.30	%	3.40	-	4.49	%
Weighted-average expected dividend yield			—	%			—	%			—	%

Expected Term. The expected term represents the period that our stock options are expected to be outstanding. We estimate the expected term based on historical experience of similar awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and expectations of future employee behavior.

Dividends. We have not declared or paid any cash dividends on our common stock since May 2017, and we do not presently plan to pay cash dividends on our common stock in the foreseeable future. Consequently, we used an expected dividend yield of zero in the years presented.


	Shares	Weighted- average Exercise Price		Weighted- average Remaining Contractual Term	Aggregate Intrinsic Value
	(In thousands)			(In years)	(In thousands)
Outstanding at September 30, 2024	189	$	479.26
Granted	5	2,014.89
Exercised	(65)	224.16


Outstanding at September 30, 2025	129	$	670.08	3.43	$	109,164
Exercisable at September 30, 2025	65	$	457.59	2.11	$	67,464
Vested or expected to vest at September 30, 2025	127	$	664.36	3.41	$	108,192

The weighted-average fair value of options granted was $705.43, $419.00 and $289.54 during fiscal 2025, 2024 and 2023, respectively. The aggregate intrinsic value of options outstanding at September 30, 2025 was calculated as the difference between the exercise price of the underlying options and the market price of our common stock for the 124,000 outstanding options that had exercise prices lower than the $1,496.53 market price of our common stock at September 30, 2025. The total intrinsic value of options exercised was $107.6 million, $49.1 million and $16.7 million during fiscal 2025, 2024 and 2023, respectively, determined as of the date of exercise.

The compensation expense on the 2019 Purchase Plan arises from the 15% discount offered to participants. A total of 12,455, 13,721, and 21,876 shares of our common stock were issued under the 2019 Purchase Plan during fiscal 2025, 2024 and 2023, respectively. The weighted-average purchase price was $1,457.57, $1,217.05, and $646.37 per share for fiscal 2025, 2024 and 2023, respectively.