Level 1 - uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. Our Level 1 assets are comprised of money market funds and certain marketable securities. We do not have any liabilities that are valued using inputs identified under a Level 1 hierarchy as of ~~December~~March 31, ~~2019~~2020 and September 30, 2019.

Level 2 - uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. We do not have any assets that are valued using inputs identified under a Level 2 hierarchy as of ~~December~~March 31, ~~2019~~2020 and September 30, 2019. We measure the fair value of the Senior Notes (as defined in Note 7) based on Level 2 inputs, which include quoted market prices and interest rate spreads of similar securities.

Level 3 - uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. We do not have any assets or liabilities that are valued using inputs identified under a Level 3 hierarchy as of ~~December~~March 31, ~~2019~~2020 and September 30, 2019.

Revenue that will be recognized in future periods from usage-based royalty from license sales;

SaaS transactional revenue from variable considerations that will be recognized in the distinct service period during which it is earned; and

The health of the economy and 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.

changes in the business analytics industry;

changes in technology;

our inability to obtain or use key data for our products;

saturation or contraction of market demand;

loss of key customers;

industry consolidation;

failure to successfully adopt cloud-based technologies;

failure to execute our selling approach; and

inability to successfully sell our products in new vertical markets.

our ongoing business may be disrupted and our management’s attention may be diverted by acquisition, transition or integration activities;

an acquisition may not further our business strategy as we expected, we may not integrate acquired operations or technology as successfully as we expected or we may overpay for our investments, or otherwise not realize the expected return, which could adversely affect our business or operating results;

we may be unable to retain the key employees, customers and other business partners of the acquired operation;

we may have difficulties entering new markets where we have no or limited direct prior experience or where competitors may have stronger market positions;

our operating results or financial condition may be adversely impacted by claims or liabilities we assume from an acquired company, business, product or technology, including claims by government agencies, terminated employees, current or former customers, former stockholders or other third parties; pre-existing contractual relationships of an acquired company we would not have otherwise entered into; unfavorable revenue recognition or other accounting treatment as a result of an acquired company’s practices; and intellectual property claims or disputes;

we may fail to identify or assess the magnitude of certain liabilities or other circumstances prior to acquiring a company, business, product or technology, which could result in unexpected litigation or regulatory exposure, unfavorable accounting treatment, unexpected increases in taxes due, a loss of anticipated tax benefits or other adverse effects on our business, operating results or financial condition;

we may not realize the anticipated increase in our revenues from an acquisition for a number of reasons, including if a larger than predicted number of customers decline to renew their contracts, if we are unable to sell the acquired products to our customer base or if contract models of an acquired company do not allow us to recognize revenues on a timely basis;

we may have difficulty incorporating acquired technologies or products with our existing product lines and maintaining uniform standards, architecture, controls, procedures and policies;

our use of cash to pay for acquisitions may limit other potential uses of our cash, including stock repurchases, dividend payments and retirement of outstanding indebtedness;

to the extent we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease; and

we may experience additional or unexpected changes in how we are required to account for our acquisitions pursuant to U.S. generally accepted accounting principles, including arrangements we assume from an acquisition.

disruption of our ongoing business;

reductions of our revenues or earnings per share;

unanticipated liabilities, legal risks and costs;

the potential loss of key personnel;

distraction of management from our ongoing business; and

impairment of relationships with employees and customers as a result of migrating a business to new owners.

impairment of goodwill or intangible assets, or a reduction in the useful lives of intangible assets acquired;

amortization of intangible assets acquired;

identification of, or changes to, assumed contingent liabilities, both income tax and non-income tax related, after our final determination of the amounts for these contingencies or the conclusion of the measurement period (generally up to one year from the acquisition date), whichever comes first;

costs incurred to combine the operations of companies we acquire, such as transitional employee expenses and employee retention, redeployment or relocation expenses;

charges to our operating results to maintain certain duplicative pre-merger activities for an extended period of time or to maintain these activities for a period of time that is longer than we had anticipated, charges to eliminate certain duplicative pre-merger activities, and charges to restructure our operations or to reduce our cost structure; and

charges to our operating results resulting from expenses incurred to effect the acquisition.

variability in demand from our existing customers;

failure to meet the expectations of market analysts;

changes in recommendations by market analysts;

the lengthy and variable sales cycle of many products, combined with the relatively large size of orders for our products, increases the likelihood of short-term fluctuation in revenues;

consumer or customer dissatisfaction with, or problems caused by, the performance of our products;

the timing of new product announcements and introductions in comparison with our competitors;

the level of our operating expenses;

changes in competitive and other conditions in the consumer credit, banking and insurance industries;

~~fluctuations in domestic and international economic conditions;~~


•	fluctuations in domestic and international economic conditions, such as those which have occurred as a result of the COVID-19 pandemic;

our ability to complete large installations, and to adopt and configure cloud-based deployments, on schedule and within budget;

acquisition-related expenses and charges; and

timing of orders for and deliveries of software systems.

In addition, the financial markets have at various times experienced significant price and volume fluctuations that have particularly affected the stock prices of many technology companies and financial services companies, and these fluctuations sometimes have been unrelated to the operating performance of these companies. Broad market fluctuations, as well as industry-specific and general economic conditions, may negatively affect our business and require us to record an impairment charge related to goodwill, which could adversely affect our results of operations, stock price and business.

Our products have long and variable sales cycles. If we do not accurately predict these cycles, we may not forecast our financial results accurately, and our stock price could be adversely affected.

We experience difficulty in forecasting our revenues accurately because the length of our sales cycles makes it difficult for us to predict the quarter in which sales will occur. In addition, our selling approach is complex as we look to sell multiple products and services across our customers’ organizations. This makes forecasting of revenues in any given period more difficult. As a result of our sales approach and lengthening sales cycles, revenues and operating results may vary significantly from period to period. For example, the sales cycle for our products typically ranges from 60 days to 18 ~~months.~~months, which may be further extended as a result of COVID-19. Customers are often cautious in making decisions to acquire our products because purchasing our products typically involves a significant commitment of capital and may involve shifts by the customer to a new software and/or hardware platform or changes in the customer’s operational procedures. This may cause customers, particularly those experiencing financial stress, to make purchasing decisions more cautiously. Delays in completing sales can arise while customers complete their internal procedures to approve large capital expenditures and test and accept our applications. Consequently, we face difficulty predicting the quarter in which sales to expected customers will occur and experience fluctuations in our revenues and operating results. If we are unable to accurately forecast our revenues, our stock price could be adversely affected.

We typically have revenue-generating transactions concentrated in the final weeks of a quarter, which may prevent accurate forecasting of our financial results and cause our stock price to decline.

Large portions of our customer agreements are consummated in the weeks immediately preceding quarter end. Before these agreements are consummated, we create and rely on forecasted revenues for planning, modeling and earnings guidance. Forecasts, however, are only estimates and actual results may vary for a particular quarter or longer periods of time. Consequently, significant discrepancies between actual and forecasted results could limit our ability to plan, budget or provide accurate guidance, which could adversely affect our stock price. Any publicly-stated revenue or earnings projections are subject to this risk.

The failure to recruit and retain additional qualified personnel could hinder our ability to successfully manage our business.

Our DM strategy and our future success will depend in large part on our ability to attract and retain experienced sales, consulting, research and development, marketing, technical support and management personnel. The complexity of our products requires highly trained personnel for research and development and to assist customers with product installation, deployment, maintenance and support. The labor market for these individuals is very competitive due to the limited number of people available with the necessary technical skills and understanding and may become more competitive with general market and economic improvement. We cannot be certain that our compensation strategies will be perceived as competitive by current or prospective employees. This could impair our ability to recruit and retain personnel. We have experienced difficulty in recruiting qualified personnel, especially technical, sales and consulting personnel, and we may need additional staff to support new customers and/or increased customer needs. We may also recruit skilled technical professionals from other countries to work in the U.S., and from the U.S. and other countries to work abroad. Limitations imposed by immigration laws in the U.S. and abroad and the availability of visas in the countries where we do business could hinder our ability to attract necessary qualified personnel and harm our business and future operating results. There is a risk that even if we invest significant resources in attempting to attract, train and retain qualified personnel, we will not succeed in our efforts, and our business could be harmed. The failure of the value of our stock to appreciate may adversely affect our ability to use equity and equity-based incentive plans to attract and retain personnel, and may require us to use alternative and more expensive forms of compensation for this purpose.

The failure to obtain certain forms of model construction data from our customers or others could harm our business.

Our business requires that we develop or obtain a reliable source of sufficient amounts of current and statistically relevant data to analyze transactions and update our products. In most cases, these data must be periodically updated and refreshed to enable our products to continue to work effectively in a changing environment. We do not own or control much of the data that we require, most of which is collected privately and maintained in proprietary databases. Customers and key business partners provide us with the data we require to analyze transactions, report results and build new models. Our DM strategy depends in part upon our ability to access new forms of data to develop custom and proprietary analytic tools. If we fail to maintain sufficient data sourcing relationships with our customers and business partners, or if they decline to provide such data due to privacy concerns, competition concerns, prohibitions or a lack of permission from their customers or partners, we could lose access to required data and our products, and the development of new products, might become less effective. Third parties have asserted copyright and other intellectual property interests in these data, and these assertions, if successful, could prevent us from using these data. Any interruption of our supply of data could seriously harm our business, financial condition or results of operations.

We will continue to rely upon proprietary technology rights, and if we are unable to protect them, our business could be harmed.

Our success depends, in part, upon our proprietary technology and other intellectual property rights. To date, we have relied primarily on a combination of copyright, patent, trade secret, and trademark laws, and nondisclosure and other contractual restrictions on copying and distribution, to protect our proprietary technology. This protection of our proprietary technology is limited, and our proprietary technology could be used by others without our consent. In addition, patents may not be issued with respect to our pending or future patent applications, and our patents may not be upheld as valid or may not prevent the development of competitive products. Any disclosure, loss, invalidity of, or failure to protect our intellectual property could negatively impact our competitive position, and ultimately, our business. There can be no assurance that our protection of our intellectual property rights in the U.S. or abroad will be adequate or that others, including our competitors, will not use our proprietary technology without our consent. Furthermore, litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of resources and could harm our business, financial condition or results of operations.

Some of our technologies were developed under research projects conducted under agreements with various U.S. government agencies or subcontractors. Although we have commercial rights to these technologies, the U.S. government typically retains ownership of intellectual property rights and licenses in the technologies developed by us under these contracts, and in some cases can terminate our rights in these technologies if we fail to commercialize them on a timely basis. Under these contracts with the U.S. government, the results of research may be made public by the government, limiting our competitive advantage with respect to future products based on our research.

If we are subject to infringement claims, it could harm our business.

We expect that products in the industry segments in which we compete, including software products, will increasingly be subject to claims of patent and other intellectual property infringement as the number of products and competitors in our industry segments grow. We may need to defend claims that our products infringe intellectual property rights, and as a result we may:

incur significant defense costs or substantial damages;

be required to cease the use or sale of infringing products;

expend significant resources to develop or license a substitute non-infringing technology;

discontinue the use of some technology; or

be required to obtain a license under the intellectual property rights of the third party claiming infringement, which license may not be available or might require substantial royalties or license fees that would reduce our margins.

Moreover, in recent years, individuals and groups that are non-practicing entities, commonly referred to as “patent trolls,” have purchased patents and other intellectual property assets for the purpose of making claims of infringement in order to extract settlements. From time to time, we may receive threatening letters or notices or may be the subject of claims that our solutions and underlying technology infringe or violate the intellectual property rights of others. Responding to such claims, regardless of their merit, can be time consuming, costly to defend in litigation, divert management's attention and resources, damage our reputation and brand, and cause us to incur significant expenses.

If our cybersecurity measures are compromised or unauthorized access to customer or consumer data is otherwise obtained, our products and services may be perceived as not being secure, customers may curtail or cease their use of our products and services, our reputation may be damaged and we could incur significant liabilities.

Our business requires the storage, transmission and utilization of sensitive consumer and customer information. Many of our products are provided by us through the Internet. Cybersecurity breaches could expose us to a risk of loss, the unauthorized disclosure of consumer or customer information, litigation, indemnity obligations and other liability. If our cybersecurity measures are breached as a result of third-party action, employee error, malfeasance or otherwise, and as a result, someone obtains unauthorized access to our systems or to consumer or customer information, our reputation may be damaged, our business may suffer and we could incur significant liability. Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently and generally are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Malicious third parties may also conduct attacks designed to temporarily deny customers access to our services. Cybersecurity compromises experienced by our competitors, by our distributors, by our customers or by us may lead to public disclosures, which may lead to widespread negative publicity. Any cybersecurity compromise in our industry, whether actual or perceived, could harm our reputation, erode customer confidence in the effectiveness of our security measures, negatively impact our ability to attract new customers, cause existing customers to curtail or cease their use of our products and services, cause regulatory or industry changes that impact our products and services, or subject us to third-party lawsuits, regulatory fines or other action or liability, all of which could materially and adversely affect our business and operating results. In addition, the COVID-19 pandemic may cause increased cybersecurity risk, as cybercriminals attempt to capitalize from the disruption.

Protection from system interruptions is important to our business. If we experience system interruptions, it could harm our business.

Systems or network interruptions, including interruptions experienced in connection with our cloud-based and other product offerings, could delay and disrupt our ability to develop, deliver or maintain our products and services, causing harm to our business and reputation and resulting in loss of customers or revenue. These interruptions can include software or hardware malfunctions, communication failures, outages or other failures of third party environments or service providers, fires, floods, earthquakes, pandemics (including the COVID-19 pandemic),power losses, equipment failures and other events beyond our control.

Risks Related to Our Industry

Our ability to increase our revenues will depend to some extent upon introducing new products and services. If the marketplace does not accept these new products and services, our revenues may decline.

We have a significant share of the available market in portions of our Scores segment and for certain services in our Applications segment, specifically, the markets for account management services at payment card processors and payment card fraud detection software. To increase our revenues, we must enhance and improve existing products and continue to introduce new products and new versions of existing products that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance. We believe much of the future growth of our business and the success of our DM strategy will rest on our ability to continue to expand into newer markets for our products and services. Such areas are relatively new to our product development and sales and marketing personnel. Products that we plan to market in the future are in various stages of development. We cannot assure you that the marketplace will accept these products. If our current or potential customers are not willing to switch to or adopt our new products and services, either as a result of the quality of these products and services or due to other factors, such as economic conditions, our revenues will decrease.

If we fail to keep up with rapidly changing technologies, our products could become less competitive or obsolete.

In our markets, technology changes rapidly, and there are continuous improvements in computer hardware, network operating systems, programming tools, programming languages, operating systems, database technologies, cloud-based technologies and the use of the Internet. If we fail to enhance our current products and develop new products in response to changes in technology or industry standards, or if we fail to bring product enhancements or new product developments to market quickly enough, our products could rapidly become less competitive or obsolete. Our future success will depend, in part, upon our ability to:

innovate by internally developing new and competitive technologies;

use leading third-party technologies effectively;

continue to develop our technical expertise;

anticipate and effectively respond to changing customer needs;

initiate new product introductions in a way that minimizes the impact of customers delaying purchases of existing products in anticipation of new product releases; and

influence and respond to emerging industry standards and other technological changes.

Our product and pricing strategies may not be successful. If our competitors introduce new products and pricing strategies, it could decrease our product sales and market share, or could pressure us to reduce our product prices in a manner that reduces our margins.

Demand for our products and services may be sensitive to product and pricing changes we implement, and our product and pricing strategies may not be accepted by the market. If our customers fail to accept our product and pricing strategies, our revenues, results of operations and business may suffer. In addition, we may not be able to compete successfully against our competitors, and this inability could impair our capacity to sell our products. The market for business analytics is rapidly evolving and highly competitive, and we expect competition in this market to persist and intensify. Our regional and global competitors vary in size and in the scope of the products and services they offer, and include:

in-house analytic and systems developers;

scoring model builders;

fraud and security management providers;

enterprise resource planning, customer relationship management, and customer communication and mobility solution providers;

business intelligence solutions providers;

credit report and credit score providers;

business process management and decision rules management providers;

process modeling tools providers;

automated application processing services providers;

data vendors;

neural network developers and artificial intelligence system builders;

third-party professional services and consulting organizations;

account/workflow management software providers;

software tools companies supplying modeling, rules, or analytic development tools; collections and recovery solutions providers; entity resolution and social network analysis solutions providers; and

cloud-based customer engagement and risk management solutions providers.

We expect to experience additional competition from other established and emerging companies, as well as from other technologies. For example, certain of our fraud solutions products compete against other methods of preventing payment card fraud, such as payment cards that contain the cardholder’s photograph; smart cards; cardholder verification and authentication solutions; biometric measures on devices including fingerprint and face matching; and other card authorization techniques and user verification techniques. Many of our anticipated competitors have greater financial, technical, marketing, professional services and other resources than we do, and industry consolidation is creating even larger competitors in many of our markets. As a result, our competitors may be able to respond more quickly to new or emerging technologies and changes in customer requirements. They may also be able to devote greater resources than we can to develop, promote and sell their products. Many of these companies have extensive customer relationships, including relationships with many of our current and potential customers. Furthermore, new competitors or alliances among competitors may emerge and rapidly gain significant market share. For example, Experian, TransUnion and Equifax have formed an alliance that has developed a credit scoring product competitive with our products. If we are unable to respond as quickly or effectively to changes in customer requirements as our competition, our ability to expand our business and sell our products will be negatively affected.

Our competitors may be able to sell products competitive to ours at lower prices individually or as part of integrated suites of several related products. This ability may cause our customers to purchase products that directly compete with our products from our competitors. Price reductions by our competitors could negatively impact our margins, and could also harm our ability to obtain new long-term contracts and renewals of existing long-term contracts on favorable terms.

Laws and regulations in the U.S. and abroad that apply to us or to our customers may expose us to liability, cause us to incur significant expense, affect our ability to compete in certain markets, limit the profitability of or demand for our products, or render our products obsolete. If these laws and regulations require us to change our products and services, it could adversely affect our business and results of operations. New legislation or regulations, or changes to existing laws and regulations, may also negatively impact our business and increase our costs of doing business.

Laws and governmental regulation affect how our business is conducted and, in some cases, subject us to the possibility of government supervision and future lawsuits arising from our products and services. Laws and governmental regulation also influence our current and prospective customers’ activities, as well as their expectations and needs in relation to our products and services. Laws and regulations that may affect our business and our current and prospective customers’ activities include, but are not limited to, those in the following significant regulatory areas:

Use of data by creditors and consumer reporting agencies (e.g., the U.S. Fair Credit Reporting Act);

Laws and regulations that limit the use of credit scoring models (e.g., state “mortgage trigger” or “inquiries” laws, state insurance restrictions on the use of credit-based insurance scores, and the E.U. Consumer Credit Directive);


•	Fair lending laws (e.g., the Equal Credit Opportunity Act and Regulation B, and the Fair Housing Act);

Privacy and security laws and regulations that limit the use and disclosure of personally identifiable information, require security procedures, or otherwise apply to the collection, processing, storage, use and transfer of protected data (e.g., the U.S. Financial Services Modernization Act of 1999, also known as the Gramm Leach Bliley Act; the General Data Protection Regulation (the “GDPR”) and country-specific data protection laws enacted to supplement the GDPR; the U.S. Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act; the Cybersecurity Act of 2015; the U.S. Department of Commerce’s National Institute of Standards and Technology’s Cybersecurity Framework; the Clarifying Lawful Overseas Use of Data Act; and identity theft, file freezing, security breach notification and similar state privacy laws);

Extension of credit to consumers through the Electronic Fund Transfers Act and Regulation E, as well as non‑governmental VISA and MasterCard electronic payment standards;

Laws and regulations applicable to secondary market participants (e.g., Fannie Mae and Freddie Mac) that could have an impact on our scoring products and revenues, including 12 CFR Part 1254 (Validation and Approval of Credit Score Models) issued by the Federal Housing Finance Agency in accordance with Section 310 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Public Law 115-174), and any regulations, standards or criteria established pursuant to such laws or regulations;

Laws and regulations applicable to our customer communication clients and their use of our products and services (e.g., the Telemarketing Sales Rule, Telephone Consumer Protection Act and regulations promulgated thereunder);

Laws and regulations applicable to our insurance clients and their use of our insurance products and services;

The application or extension of consumer protection laws, including implementing regulations (e.g., the Consumer Financial Protection Act, the Federal Trade Commission Act, the Truth In Lending Act and Regulation Z, the Fair Debt Collection Practices Act, the Servicemembers Civil Relief Act, the Military Lending Act, and the Credit Repair Organizations Act);

Laws and regulations governing the use of the Internet and social media, telemarketing, advertising, endorsements and testimonials;

Anti-bribery and corruption laws and regulations (e.g., the Foreign Corrupt Practices Act and the UK Bribery Act 2010);

Financial regulatory standards (e.g., Sarbanes-Oxley Act requirements to maintain and verify internal process controls, including controls for material event awareness and notification);

Regulatory requirements for managing third parties (e.g., vendors, contractors, suppliers and distributors);

Anti-money laundering laws and regulations (e.g., the Bank Secrecy Act and the USA PATRIOT Act);

Financial regulatory reform stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act and the many regulations mandated by that Act, including regulations issued by, and the supervisory and investigative authority of, the Consumer Financial Protection Bureau; and

Laws and regulations regarding export controls as they apply to FICO products delivered in non-U.S. countries (e.g., Office of Foreign Asset Control sanctions, and Export Administration Regulations).

In addition, many U.S. and foreign jurisdictions have passed, or are currently contemplating, a variety of consumer protection, privacy, and data security laws and regulations that may relate to our business or affect the demand for our products and services. For example, the GDPR became effective on May 25, 2018 and imposes more stringent operational requirements for entities processing personal information and greater penalties for noncompliance. Brazil, India, South Africa, Japan, China, Israel, Canada, and several other countries have introduced and, in some cases, enacted, similar privacy laws. The California Consumer Privacy Act of 2018, which was enacted on June 28, 2018 and ~~will become~~became effective on January 1, 2020, gives California residents certain privacy rights in the collection and disclosure of their personal information and requires businesses to make certain disclosures and take certain other acts in furtherance of those rights. The costs and other burdens of compliance with privacy and data security laws and regulations could negatively impact the use and adoption of our solutions and reduce overall demand for them. Additionally, concerns regarding data privacy may cause our customers, or their customers and potential customers, to resist providing the data necessary to allow us to deliver our solutions effectively. Even the perception that the privacy of personal information is not satisfactorily protected or does not meet regulatory requirements could inhibit sales of our solutions and any failure to comply with such laws and regulations could lead to significant fines, penalties or other liabilities. Any such decrease in demand or incurred fines, penalties or other liabilities could have a material adverse effect on our business, results of operations, and financial condition.

In addition to existing laws and regulations, changes in the U.S. or foreign legislative, judicial, regulatory or consumer environments could harm our business, financial condition or results of operations. The laws and regulations above, and changes to them, could affect the demand for or profitability of our products, including scoring and consumer products. New laws and regulations pertaining to our customers could cause them to pursue new strategies, reducing the demand for our products.

Our revenues depend, to a great extent, upon conditions in the banking (including consumer credit) and insurance industries. If our clients’ industries experience uncertainty, it will likely harm our business, financial condition or results of operations.

During fiscal 2019, 88% of our revenues were derived from sales of products and services to the banking and insurance industries. Global economic uncertainty experienced in the U.S. and other key international economies in the past produced substantial stress, volatility, illiquidity and disruption of global credit and other financial markets, resulting in the bankruptcy or acquisition of, or government assistance to, several major domestic and international financial institutions. The potential for disruptions presents considerable risks to our businesses and operations. These risks include potential bankruptcies or credit deterioration of financial institutions, many of which are our customers. Such disruption would result in a decline in the revenue we receive from financial and other institutions.

While the rate of account growth in the U.S. bankcard industry has been slow and many of our large institutional customers have consolidated in recent years, we have generated most of our revenue growth from our bankcard-related scoring and account management businesses by selling and cross-selling our products and services to large banks and other credit issuers. As the banking industry continues to experience contraction in the number of participating institutions, we may have fewer opportunities for revenue growth due to reduced or changing demand for our products and services that support customer acquisition programs of our customers. In addition, industry contraction could affect the base of recurring revenues derived from contracts in which we are paid on a per-transaction basis as formerly separate customers combine their operations under one contract. There can be no assurance that we will be able to prevent future revenue contraction or effectively promote future revenue growth in our businesses.

While we are attempting to expand our sales of consumer credit, banking and insurance products and services into international markets, the risks are greater as these markets are also experiencing substantial disruption and we are less well-known in them.

Risks Related to External Conditions

Material adverse developments in global economic conditions, or the occurrence of certain other world events, could affect demand for our products and services and harm our business.

Purchases of technology products and services and decisioning solutions are subject to adverse economic conditions. When an economy is struggling, companies in many industries delay or reduce technology purchases, and we experience softened demand for our decisioning solutions and other products and services. Global economic uncertainty has produced substantial stress, volatility, illiquidity and disruption of global credit and other financial markets in the past. Any economic uncertainty can negatively affect the businesses and purchasing decisions of companies in the industries we serve. The potential for disruptions presents considerable risks to our businesses and operations. If global economic conditions experience stress and negative volatility, or if there is an escalation in regional or global conflicts or terrorism, we will likely experience reductions in the number of available customers and in capital expenditures by our remaining customers, longer sales cycles, deferral or delay of purchase commitments for our products and increased price competition, which may adversely affect our business, results of operations and liquidity.

For example, on June 23, 2016, the United Kingdom (“U.K.”) held a referendum in which voters approved an exit from the E.U., commonly referred to as “Brexit.” As a result of the referendum, on March 29, 2017, the U.K. triggered Article 50 of the Lisbon Treaty formally starting negotiations regarding its exit from the E.U. As a result of the referendum and the ongoing uncertainty regarding the timing of Brexit, the future relationship between the U.K. and the E.U. remains unknown. Brexit has caused, and may continue to create, volatility in global stock markets and regional and global economic uncertainty, which may cause our customers to closely monitor their costs and reduce their spending budget on our products and services.

In March 2020, the World Health Organization declared the outbreak of COVID-19, which continues to spread throughout the U.S. and the world, to be a pandemic. As is possible with any significant outbreak of epidemic, pandemic, or contagious diseases, the COVID-19 outbreak has resulted in a widespread health crisis that has adversely affected broader economies and financial markets. COVID-19 has caused shutdowns to businesses and cities worldwide and has disrupted supply chains, business operations, travel, and consumer confidence.

Whether or not recent or new legislative or regulatory initiatives or other efforts successfully stabilize and add liquidity to the financial markets, we may need to modify our strategies, businesses or operations, and we may incur additional costs in order to compete in a changed business environment. Given the volatile nature of the global economic environment and the uncertainties underlying efforts to stabilize it, we may not timely anticipate or manage existing, new or additional risks, as well as contingencies or developments, which may include regulatory developments and trends in new products and services. Our failure to do so could materially and adversely affect our business, financial condition, results of operations and prospects.

In operations outside the U.S., we are subject to additional risks that may harm our business, financial condition or results of operations.

A growing portion of our revenues is derived from international sales. During fiscal 2019, 34% of our revenues were derived from business outside the U.S. As part of our growth strategy, we plan to continue to pursue opportunities outside the U.S., including opportunities in countries with economic systems that are in early stages of development and that may not mature sufficiently to result in growth for our business. Accordingly, our future operating results could be negatively affected by a variety of factors arising out of international commerce, some of which are beyond our control. These factors include:

general economic and political conditions in countries where we sell our products and services;

difficulty in staffing and efficiently managing our operations in multiple geographic locations and in various countries;

effects of a variety of foreign laws and regulations, including restrictions on access to personal information;

import and export licensing requirements;

longer payment cycles;

reduced protection for intellectual property rights;

currency fluctuations;

changes in tariffs and other trade barriers;

terrorism, war, natural disasters and pandemics, including the COVID-19 pandemic; and

difficulties and delays in translating products and related documentation into foreign languages.

There can be no assurance that we will be able to successfully address each of these challenges in the near term. Additionally, some of our business will be conducted in currencies other than the U.S. dollar. Foreign currency transaction gains and losses are not currently material to our cash flows, financial position or results of operations. However, an increase in our foreign revenues could subject us to increased foreign currency transaction risks in the future.

In addition to the risk of depending on international sales, we have risks incurred in having research and development personnel located in various international locations. We currently have a substantial portion of our product development staff in international locations, some of which have political and developmental risks. If such risks materialize, our business could be damaged.

Our anti-takeover defenses could make it difficult for another company to acquire control of FICO, thereby limiting the demand for our securities by certain types of purchasers or the price investors are willing to pay for our stock.

Certain provisions of our Restated Certificate of Incorporation, as amended, could make a merger, tender offer or proxy contest involving us difficult, even if such events would be beneficial to the interests of our stockholders. These provisions include giving our board the ability to issue preferred stock and determine the rights and designations of the preferred stock at any time without stockholder approval. The rights of the holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or discouraging a third party from acquiring, a majority of our outstanding voting stock. These factors and certain provisions of the Delaware General Corporation Law may have the effect of deterring hostile takeovers or otherwise delaying or preventing changes in control or changes in our management, including transactions in which our stockholders might otherwise receive a premium over the fair market value of our common stock.

If we experience changes in tax laws or adverse outcomes resulting from examination of our income tax returns, it could adversely affect our results of operations.

We are subject to federal and state income taxes in the U.S. and in certain foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes. Our future effective tax rates could be adversely affected by changes in tax laws, by our ability to generate taxable income in foreign jurisdictions in order to utilize foreign tax losses, and by the valuation of our deferred tax assets. In addition, we are subject to the examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from such examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from such examinations will not have an adverse effect on our operating results and financial condition.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period
Total
Number of
Shares
Purchased (1)

Average
Price Paid
per Share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (2)

Maximum Dollar
Value of Shares
that May Yet Be
Purchased Under
the Plans or
Programs (2)
October 1, 2019 through October 31, 2019 2,630
$ 307.44
—
$ 220,332,604
November 1, 2019 through November 30, 2019 70,020
$ 352.96
70,000
$ 195,624,692
December 1, 2019 through December 31, 2019 334,205
$ 360.66
98,383
$ 160,323,403
406,855

168,383
$ 160,323,403



Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 1, 2020 through January 31, 2020	62,171	$	400.43	37,728	$	145,323,067
February 1, 2020 through February 29, 2020	70,606	$	407.89	70,000	$	116,769,923
March 1, 2020 through March 31, 2020	184,837	$	288.46	181,868	$	64,323,008
	317,614	$	336.93	289,596	$	64,323,008


(1)	Includes ~~238,472~~28,018 shares delivered in satisfaction of the tax withholding obligations resulting from the vesting of restricted stock units held by employees during the quarter ended ~~December~~March 31, ~~2019.~~2020.


(2)	In July 2019, our Board of Directors approved a stock repurchase program following the completion of our previous program. This program was open-ended and authorized repurchases of shares of our common stock up to an aggregate cost of $250.0 million in the open market or in negotiated transactions.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits




Exhibit Number		Description
3.1		Composite Restated Certificate of Incorporation of Fair Isaac Corporation (incorporated by reference to Exhibit 3.2 to the Company’s Form 10-Q for the quarter ended December 31, 2009 (file no. 001-11689)).

3.2		By-laws of Fair Isaac Corporation (incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q for the quarter ended December 31, 2009 (file no. 001-11689)).

~~4.1~~10.1		~~Indenture dated~~Fair Isaac Corporation 2012 Long-Term Incentive Plan, as amended as of ~~December 6, 2019 by and between the Company and U.S. Bank National Association, as trustee~~March 4, 2020 (incorporated by reference to Exhibit ~~4.1~~4.3 to the Company’s Form ~~8-K~~S-8, filed ~~December~~with the SEC on March 6, ~~2019 (file no. 001-11689))~~2020).

~~4.2~~		~~Form of the Company’s 4.00% Senior Notes due 2028 (incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed December 6, 2019 (file no. 001-11689)).~~

10.1 *		~~Form of Performance Share Unit Agreement under the 2012 Long-Term Incentive Plan.~~

31.1 *		Rule 13a-14(a)/15d-14(a) Certifications of CEO.

31.2 *		Rule 13a-14(a)/15d-14(a) Certifications of CFO.

32.1 *		Section 1350 Certification of CEO.

32.2 *		Section 1350 Certification of CFO.

101.INS		XBRL Instance Document.

101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) .



*	Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




		FAIR ISAAC CORPORATION

DATE:	~~January 30,~~April 29, 2020

		By	/s/ MICHAEL I. MCLAUGHLIN
			Michael I. McLaughlin
			Executive Vice President and Chief Financial Officer
			(for Registrant as duly authorized officer and
			as Principal Financial Officer)

DATE:	~~January 30,~~April 29, 2020

		By	/s/ MICHAEL S. LEONARD
			Michael S. Leonard
			Vice President and Chief Accounting Officer (Principal Accounting Officer)

4955



Delaware		94-1499887
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

181 Metro Drive, Suite 700		95110-1346
San Jose,	California
(Address of principal executive offices)		(Zip Code)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	FICO	New York Stock Exchange



Large ~~Accelerated Filer~~accelerated filer	☒	Accelerated ~~Filer~~filer	☐

~~Non-Accelerated Filer~~Non-accelerated filer	☐	Smaller ~~Reporting Company~~reporting company	☐

		Emerging ~~Growth Company~~growth company	☐



☐	Yes	☒	No



	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2021
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3338
Item 4.	Controls and Procedures	3540

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	3641
Item 1A.	Risk Factors	3641
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4753
Item 3.	Defaults Upon Senior Securities	4753
Item 4.	Mine Safety Disclosures	4753
Item 5.	Other Information	4753
Item 6.	Exhibits	4854
Signatures		4955



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	December 31, 2019			September 30, 2019			March 31, 2020			September 30, 2019
	(In thousands, except par value data)						(In thousands, except par value data)
Assets
Current assets:
Cash and cash equivalents	$	111,216		$	106,426		$	108,966		$	106,426
Accounts receivable, net	281,640			297,427			307,307			297,427
Prepaid expenses and other current assets	68,138			51,853			67,398			51,853
Total current assets	460,994			455,706			483,671			455,706
Marketable securities	23,732			20,222			19,544			20,222
Other investments	1,656			1,643			1,594			1,643
Property and equipment, net	56,156			53,027			59,491			53,027
Operating lease right-of-use assets	88,475			—			87,142			—
Goodwill	812,850			803,542			804,650			803,542
Intangible assets, net	12,484			14,139			11,177			14,139
Deferred income taxes	7,100			6,006			7,097			6,006
Other assets	81,591			79,163			77,766			79,163
Total assets	$	1,545,038		$	1,433,448		$	1,552,132		$	1,433,448
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	32,474		$	23,118		$	25,306		$	23,118
Accrued compensation and employee benefits	71,780			106,240			68,507			106,240
Other accrued liabilities	43,111			32,454			62,605			32,454
Deferred revenue	114,667			111,016			114,406			111,016
Current maturities on debt	180,000			218,000			209,000			218,000
Total current liabilities	442,032			490,828			479,824			490,828
Long-term debt	738,259			606,790			738,632			606,790
Operating lease liabilities	80,424			—			77,485			—
Other liabilities	43,362			46,063			42,040			46,063
Total liabilities	1,304,077			1,143,681			1,337,981			1,143,681
Commitments and contingencies
Stockholders’ equity:
Preferred stock ($0.01 par value; 1,000 shares authorized; none issued and outstanding)	—			—			—			—
Common stock ($0.01 par value; 200,000 shares authorized, 88,857 shares issued and 29,186 and 28,944 shares outstanding at December 31, 2019 and September 30, 2019, respectively)	292			289
Common stock ($0.01 par value; 200,000 shares authorized, 88,857 shares issued and 29,082 and 28,944 shares outstanding at March 31, 2020 and September 30, 2019, respectively)							291			289
Additional paid-in-capital	1,148,190			1,225,365			1,169,217			1,225,365
Treasury stock, at cost (59,671 and 59,913 shares at December 31, 2019 and September 30, 2019, respectively)	(2,843,097		)	(2,802,450		)
Treasury stock, at cost (59,775 and 59,913 shares at March 31, 2020 and September 30, 2019, respectively)							(2,930,165		)	(2,802,450		)
Retained earnings	2,011,569			1,956,648			2,069,857			1,956,648
Accumulated other comprehensive loss	(75,993		)	(90,085		)	(95,049		)	(90,085		)
Total stockholders’ equity	240,961			289,767			214,151			289,767
Total liabilities and stockholders’ equity	$	1,545,038		$	1,433,448		$	1,552,132		$	1,433,448


	Quarter Ended December 31,						Quarter Ended March 31,						Six Months Ended March 31,
	2019			2018			2020			2019			2020			2019
	(In thousands, except per share data)						(In thousands, except per share data)
Revenues:
Transactional and maintenance	$	220,374		$	194,193		$	240,702		$	211,779		$	461,076		$	405,972
Professional services	44,025			40,808			47,905			50,555			91,930			91,363
License	34,105			27,255			19,364			15,900			53,469			43,155
Total revenues	298,504			262,256			307,971			278,234			606,475			540,490
Operating expenses:
Cost of revenues	90,758			76,066			88,139			85,568			178,897			161,634
Research and development	38,943			35,426			39,439			37,684			78,382			73,110
Selling, general and administrative	112,021			100,258			103,465			104,930			215,486			205,188
Amortization of intangible assets	1,796			1,502			1,202			1,503			2,998			3,005
Restructuring and acquisition-related	3,104			—			—			—			3,104			—
Total operating expenses	246,622			213,252			232,245			229,685			478,867			442,937
Operating income	51,882			49,004			75,726			48,549			127,608			97,553
Interest expense, net	(9,768		)	(9,676		)	(11,254		)	(10,008		)	(21,022		)	(19,684		)
Other expense, net	(219		)	(2,172		)
Other income (expense), net							(2,008		)	1,433			(2,227		)	(739		)
Income before income taxes	41,895			37,156			62,464			39,974			104,359			77,130
Income tax benefit	(13,026		)	(2,851		)
Income tax provision (benefit)							4,176			6,593			(8,850		)	3,742
Net income	54,921			40,007			58,288			33,381			113,209			73,388
Other comprehensive gain (loss):
Foreign currency translation adjustments	14,092			(3,265		)	(19,056		)	2,925			(4,964		)	(340		)
Comprehensive income	$	69,013		$	36,742		$	39,232		$	36,306		$	108,245		$	73,048
Earnings per share:
Basic	$	1.89		$	1.38		$	2.00		$	1.15		$	3.89		$	2.53
Diluted	$	1.82		$	1.32		$	1.94		$	1.10		$	3.76		$	2.42
Shares used in computing earnings per share:
Basic	29,025			28,961			29,194			29,074			29,109			29,017
Diluted	30,169			30,336			29,985			30,259			30,076			30,297


																								Common Stock						Additional Paid-in-Capital				Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
(In thousands)																								Shares		Par Value								Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
Balance at December 31, 2019																								29,186		$	292			Additional Paid-in-Capital			$	1,148,190			$	(2,843,097	)		$	2,011,569			$	(75,993	)		$	240,961
Share-based compensation																								—		—				22,788				—				—				—				22,788
Issuance of treasury stock under employee stock plans																								186		2				(1,761		)		8,930				—				—				7,171
Repurchases of common stock																								(290	)	(3		)		—				(95,998		)		—				—				(96,001		)
Net income																								—		—				—				—				58,288				—				58,288
Foreign currency translation adjustments																								—		—				—				—				—				(19,056		)		(19,056		)
Balance at March 31, 2020																								29,082		$	291			$	1,169,217			$	(2,930,165	)		$	2,069,857			$	(95,049	)		$	214,151

																								Common Stock						Additional Paid-in-Capital				Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
(In thousands)																								Shares		Par Value								Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
Balance at December 31, 2018																								29,056		$	291			Additional Paid-in-Capital			$	1,176,770			$	(2,674,011	)		$	1,804,531			$	(79,686	)		$	227,895
Share-based compensation																								—		—				20,482				—				—				—				20,482
Issuance of treasury stock under employee stock plans																								150		2				(6,911		)		6,727				—				—				(182		)
Repurchases of common stock																								(150	)	(2		)		—				(37,021		)		—				—				(37,023		)
Net income																								—		—				—				—				33,381				—				33,381
Foreign currency translation adjustments																								—		—				—				—				—				2,925				2,925
Balance at March 31, 2019																								29,056		$	291			$	1,190,341			$	(2,704,305	)		$	1,837,912			$	(76,761	)		$	247,478

	Common Stock					Additional Paid-in-Capital				Treasury Stock				Retained Earnings			Accumulated Other Comprehensive Loss				Total Stockholders’ Equity			Common Stock						Additional Paid-in-Capital				Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
(In thousands)	Shares		Par Value							Treasury Stock			Shares				Accumulated Other Comprehensive Loss			Par Value										Additional Paid-in-Capital				Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
Balance at September 30, 2019	28,944		$	289		Additional Paid-in-Capital			$	1,225,365			$	Retained Earnings	(2,802,450	)	$	1,956,648			Total Stockholders’ Equity		$	(90,085	)	$	289,767		28,944			$	289			$	1,225,365			$	(2,802,450	)		$	1,956,648			$	(90,085	)	$	289,767
Share-based compensation	—		—			23,145				—				—			—				23,145			—		—				45,933				—				—				—				45,933
Issuance of treasury stock under employee stock plans	410		4			(100,320		)		19,361				—			—				(80,955		)	596		6				(102,081		)		28,291				—				—				(73,784		)
Repurchases of common stock	(168	)	(1		)	—				(60,008		)		—			—				(60,009		)	(458	)	(4		)		—				(156,006		)		—				—				(156,010		)
Net income	—		—			—				—				54,921			—				54,921			—		—				—				—				113,209				—				113,209
Foreign currency translation adjustments	—		—			—				—				—			14,092				14,092			—		—				—				—				—				(4,964		)		(4,964		)
Balance at December 31, 2019	29,186		$	292		$	1,148,190			$	(2,843,097	)		$	2,011,569		$	(75,993	)		$	240,961
Balance at March 31, 2020																								29,082		$	291			$	1,169,217			$	(2,930,165	)		$	2,069,857			$	(95,049	)		$	214,151

	Common Stock					Additional Paid-in-Capital				Treasury Stock				Retained Earnings			Accumulated Other Comprehensive Loss				Total Stockholders’ Equity			Common Stock						Additional Paid-in-Capital				Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
(In thousands)	Shares		Par Value							Treasury Stock			Shares				Accumulated Other Comprehensive Loss			Par Value										Additional Paid-in-Capital				Treasury Stock				Retained Earnings				Accumulated Other Comprehensive Loss				Total Stockholders’ Equity
Balance at September 30, 2018	29,015		$	290		Additional Paid-in-Capital			$	1,211,051			$	Retained Earnings	(2,612,007	)	$	1,764,524			Total Stockholders’ Equity		$	(76,421	)	$	287,437
Balance at September 30, 2018 (As Adjusted)																								29,015		$	290			$	1,211,051			$	(2,612,007	)		$	1,764,524			$	(76,421	)		$	287,437
Share-based compensation	—		—			21,854				—				—			—				21,854			—		—				42,336				—				—				—				42,336
Issuance of treasury stock under employee stock plans	466		5			(56,135		)		20,692				—			—				(35,438		)	616		6				(63,046		)		27,420				—				—				(35,620		)
Repurchases of common stock	(425	)	(4		)	—				(82,696		)		—			—				(82,700		)	(575	)	(5		)		—				(119,718		)		—				—				(119,723		)
Net income	—		—			—				—				40,007			—				40,007			—		—				—				—				73,388				—				73,388
Foreign currency translation adjustments	—		—			—				—				—			(3,265		)		(3,265		)	—		—				—				—				—				(340		)		(340		)
Balance at December 31, 2018	29,056		$	291		$	1,176,770			$	(2,674,011	)		$	1,804,531		$	(79,686	)		$	227,895

Balance at March 31, 2019																								29,056		$	291			$	1,190,341			$	(2,704,305	)		$	1,837,912			$	(76,761	)		$	247,478


December 31, 2019	Active Markets for Identical Instruments (Level 1)		Fair Value as of December 31, 2019
March 31, 2020					Active Markets for Identical Instruments (Level 1)		Fair Value as of March 31, 2020
	(In thousands)				(In thousands)
Assets:
Cash equivalents (1)	$	26,320	$	26,320	$	25,166	$	25,166
Marketable securities (2)	23,732		23,732		19,544		19,544
Total	$	50,052	$	50,052	$	44,710	$	44,710

September 30, 2019	Active Markets for Identical Instruments (Level 1)		Fair Value as of September 30, 2019		Active Markets for Identical Instruments (Level 1)		Fair Value as of September 30, 2019
	(In thousands)				(In thousands)
Assets:
Cash equivalents (1)	$	28,901	$	28,901	$	28,901	$	28,901
Marketable securities (2)	20,222		20,222		20,222		20,222
Total	$	49,123	$	49,123	$	49,123	$	49,123


(1)	Included in cash and cash equivalents on our condensed consolidated balance sheets at ~~December~~March 31, ~~2019~~2020 and September 30, 2019. Not included in these tables are cash deposits of ~~$84.9~~$83.8 million and $77.5 million at ~~December~~March 31, ~~2019~~2020 and September 30, 2019, respectively.


(2)	Represents securities held under a supplemental retirement and savings plan for senior management employees, which are distributed upon termination or retirement of the employees. Included in marketable securities on our condensed consolidated balance sheets at ~~December~~March 31, ~~2019~~2020 and September 30, 2019.


	December 31, 2019						March 31, 2020
	Contract Amount				Fair Value		Contract Amount				Fair Value
	Foreign Currency		US$		US$		Foreign Currency		USD		USD
	(In thousands)						(In thousands)
Sell foreign currency:
Euro (EUR)	EUR	10,000	$	11,172	$	—	EUR	10,000	$	11,004	$	—
Buy foreign currency:
British pound (GBP)	GBP	6,277	$	8,300	$	—	GBP	21,781	$	27,000	$	—
Singapore dollar (SGD)	SGD	5,631	$	4,200	$	—	SGD	10,274	$	7,200	$	—


Year Ending September 30,	(In thousands)		(In thousands)
2020 (excluding the quarter ended December 31, 2019)	$	3,214
2020 (excluding the six months ended March 31, 2020)			$	1,987
2021	3,664		3,622
2022	3,372		3,334
2023	1,317		1,317
2024	917		917
	$	12,484	$	11,177


	Accrual at		Expense Additions			Cash Payments				Adjustment (*)				Accrual at	Accrual at			Expense Additions			Cash Payments				Adjustment (*)				Accrual at
	September 30, 2019				December 31, 2019				September 30, 2019						March 31, 2020			Expense Additions			Cash Payments				Adjustment (*)
	(In thousands)														(In thousands)
Facilities charges	$	1,378	Expense Additions		$	Cash Payments		—		Adjustment (*)			$	—	$	(1,378	)	$	—	$	1,378			$	—			$	—	$	(1,378	)	$	—
Employee separation	—		3,104			(1,105		)		—				1,999	—			3,104			(2,956		)		—				148
	1,378		$	3,104		$	(1,105	)		$	(1,378	)		1,999	1,378			$	3,104		$	(2,956	)		$	(1,378	)		148



	Shares		Weighted-average Exercise Price		Weighted-average Remaining Contractual Term	Aggregate Intrinsic Value
	(In thousands)				(In years)	(In thousands)
Outstanding at September 30, 2019	616		$	89.36
Granted	16		352.18
Exercised	(93	)	54.51
Forfeited	(1	)	185.05
Outstanding at December 31, 2019	538		$	103.12	2.94	$	146,033
Exercisable at December 31, 2019	458		$	81.93	2.39	$	134,066
Vested and expected to vest at December 31, 2019	533		$	101.77	2.91	$	145,490



	Shares		Weighted-average Grant-date Fair Value
	(In thousands)
Outstanding at September 30, 2019	998		$	159.99
Granted	201		353.37
Released	(331	)	138.52
Forfeited	(28	)	166.59
Outstanding at December 31, 2019	840		$	214.39



	Shares		Weighted-average Grant-date Fair Value
	(In thousands)
Outstanding at September 30, 2019	195		$	163.38
Granted	53		354.18
Released	(101	)	152.45
Forfeited	(20	)	175.50
Outstanding at December 31, 2019	127		$	248.97


	Applications		Scores		Decision Management Software		Total		Applications		Scores		Decision Management Software		Total
	(In thousands)								(In thousands)
Balance at September 30, 2019	$	588,614	$	146,648	$	68,280	$	803,542	$	588,614	$	146,648	$	68,280	$	803,542
Foreign currency translation adjustment	8,292		—		1,016		9,308		1,006		—		102		1,108
Balance at December 31, 2019	$	596,906	$	146,648	$	69,296	$	812,850
Balance at March 31, 2020									$	589,620	$	146,648	$	68,382	$	804,650


	December 31, 2019			September 30, 2019			March 31, 2020			September 30, 2019
	(In thousands)						(In thousands)
Property and equipment	$	181,176		$	172,075		$	184,539		$	172,075
Less: accumulated depreciation and amortization	(125,020		)	(119,048		)	(125,048		)	(119,048		)
	$	56,156		$	53,027		$	59,491		$	53,027


	Quarter Ended December 31, 2019															Quarter Ended March 31, 2020
	Applications			Scores			Decision Management Software			Unallocated Corporate Expenses			Total			Applications			Scores			Decision Management Software			Unallocated Corporate Expenses			Total
	(In thousands)															(In thousands)
Segment revenues:
Transactional and maintenance	$	98,837		$	107,446		$	14,091		$	—		$	220,374		$	97,789		$	127,610		$	15,303		$	—		$	240,702
Professional services	34,023			264			9,738			—			44,025			35,134			819			11,952			—			47,905
License	19,318			7,428			7,359			—			34,105			7,356			719			11,289			—			19,364
Total segment revenues	152,178			115,138			31,188			—			298,504			140,279			129,148			38,544			—			307,971
Segment operating expense	(116,010		)	(17,712		)	(50,645		)	(34,210		)	(218,577		)	(111,456		)	(15,660		)	(47,354		)	(33,785		)	(208,255		)
Segment operating income (loss)	$	36,168		$	97,426		$	(19,457	)	$	(34,210	)	79,927			$	28,823		$	113,488		$	(8,810	)	$	(33,785	)	99,716
Unallocated share-based compensation expense													(23,145		)													(22,788		)
Unallocated amortization expense													(1,796		)													(1,202		)
Unallocated restructuring and acquisition-related													(3,104		)
Operating income													51,882															75,726
Unallocated interest expense, net													(9,768		)													(11,254		)
Unallocated other expense, net													(219		)													(2,008		)
Income before income taxes													$	41,895														$	62,464
Depreciation expense	$	4,349		$	116		$	986		$	225		$	5,676		$	4,553		$	141		$	1,158		$	108		$	5,960


	Quarter Ended December 31, 2018															Quarter Ended March 31, 2019
	Applications			Scores			Decision Management Software			Unallocated Corporate Expenses			Total			Applications			Scores			Decision Management Software			Unallocated Corporate Expenses			Total
	(In thousands)															(In thousands)
Segment revenues:
Transactional and maintenance	$	97,165		$	84,821		$	12,207		$	—		$	194,193		$	97,074		$	102,363		$	12,342		$	—		$	211,779
Professional services	31,462			701			8,645			—			40,808			35,981			901			13,673			—			50,555
License	19,032			161			8,062			—			27,255			8,760			1,139			6,001			—			15,900
Total segment revenues	147,659			85,683			28,914			—			262,256			141,815			104,403			32,016			—			278,234
Segment operating expense	(107,598		)	(13,482		)	(39,562		)	(29,254		)	(189,896		)	(111,643		)	(16,167		)	(40,384		)	(39,506		)	(207,700		)
Segment operating income (loss)	$	40,061		$	72,201		$	(10,648	)	$	(29,254	)	72,360			$	30,172		$	88,236		$	(8,368	)	$	(39,506	)	70,534
Unallocated share-based compensation expense													(21,854		)													(20,482		)
Unallocated amortization expense													(1,502		)													(1,503		)
Operating income													49,004															48,549
Unallocated interest expense, net													(9,676		)													(10,008		)
Unallocated other expense, net													(2,172		)													1,433
Income before income taxes													$	37,156														$	39,974
Depreciation expense	$	4,797		$	125		$	989		$	233		$	6,144		$	4,662		$	132		$	972		$	229		$	5,995



	Six Months Ended March 31, 2020
	Applications			Scores			Decision Management Software			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	196,626		$	235,056		$	29,394		$	—		$	461,076
Professional services	69,157			1,083			21,690			—			91,930
License	26,674			8,147			18,648			—			53,469
Total segment revenues	292,457			244,286			69,732			—			606,475
Segment operating expense	(227,466		)	(33,372		)	(97,999		)	(67,995		)	(426,832		)
Segment operating income (loss)	$	64,991		$	210,914		$	(28,267	)	$	(67,995	)	179,643
Unallocated share-based compensation expense													(45,933		)
Unallocated amortization expense													(2,998		)
Unallocated restructuring and acquisition-related													(3,104		)
Operating income													127,608
Unallocated interest expense, net													(21,022		)
Unallocated other income, net													(2,227		)
Income before income taxes													$	104,359
Depreciation expense	$	8,902		$	257		$	2,144		$	333		$	11,636



	Six Months Ended March 31, 2019
	Applications			Scores			Decision Management Software			Unallocated Corporate Expenses			Total
	(In thousands)
Segment revenues:
Transactional and maintenance	$	194,239		$	187,184		$	24,549		$	—		$	405,972
Professional services	67,443			1,602			22,318			—			91,363
License	27,792			1,300			14,063			—			43,155
Total segment revenues	289,474			190,086			60,930			—			540,490
Segment operating expense	(219,241		)	(29,649		)	(79,946		)	(68,760		)	(397,596		)
Segment operating income (loss)	$	70,233		$	160,437		$	(19,016	)	$	(68,760	)	142,894
Unallocated share-based compensation expense													(42,336		)
Unallocated amortization expense													(3,005		)
Operating income													97,553
Unallocated interest expense, net													(19,684		)
Unallocated other income, net													(739		)
Income before income taxes													$	77,130
Depreciation expense	$	9,459		$	257		$	1,961		$	462		$	12,139


	Quarter Ended December 31, 2019										Quarter Ended March 31, 2020
Reportable Segments	On-Premises		SaaS		Scores		Total		Percentage		On-Premises		SaaS		Scores		Total		Percentage
	(Dollars in thousands)										(Dollars in thousands)
Applications	$	85,978	$	66,200	$	—	$	152,178	51	%	$	76,341	$	63,938	$	—	$	140,279	46	%
Scores	—		—		115,138		115,138		39	%	—		—		129,148		129,148		42	%
Decision Management Software	23,679		7,509		—		31,188		10	%	28,847		9,697		—		38,544		12	%
Total	$	109,657	$	73,709	$	115,138	$	298,504	100	%	$	105,188	$	73,635	$	129,148	$	307,971	100	%



	Quarter Ended December 31, 2018
Reportable Segments	North America		Latin America		Europe, Middle East and Africa		Asia Pacific		Total
	(In thousands)
Applications	$	80,949	$	18,253	$	32,562	$	15,895	$	147,659
Scores	82,073		514		1,534		1,562		85,683
Decision Management Software	13,824		5,225		6,124		3,741		28,914
Total	$	176,846	$	23,992	$	40,220	$	21,198	$	262,256


•	Revenue from variable considerations that will be recognized in accordance with the “right-to-invoice” practical expedient, such as fees from our professional services billed based on a time and materials basis.


	Balance Sheet Location	December 31, 2019		Balance Sheet Location	March 31, 2020
		(In thousands)			(In thousands)
Assets
Operating leases	Operating lease right-of-use assets	$	88,475	Operating lease right-of-use assets	$	87,142
Finance leases (*)	Property and equipment, net	8,225		Property and equipment, net	9,517
Total lease assets		$	96,700		$	96,659
Liabilities
Current:
Operating leases	Other accrued liabilities	$	16,657	Other accrued liabilities	$	18,799
Finance leases	Other accrued liabilities	2,729		Other accrued liabilities	3,911
Non-current:
Operating leases	Operating lease liabilities	80,424		Operating lease liabilities	77,485
Finance leases	Other liabilities	5,315		Other liabilities	5,952
Total lease liabilities		$	105,125		$	106,147


	Quarter Ended December 31, 2019		Quarter Ended March 31, 2020			Six Months Ended March 31, 2020
	(In thousands)		(In thousands)
Operating lease cost	$	5,408	$	6,518		$	11,926
Finance lease cost:
Depreciation of lease assets	457		811			1,268
Interest on lease liabilities	59		89			148
Short-term lease cost	1,063		(256		)	807
Variable lease cost	974		846			1,820
Total lease cost	$	7,961	$	8,008		$	15,969



(In thousands)	Operating Leases		Capital Leases
Fiscal 2020	$	19,842	$	1,935
Fiscal 2021	19,969		1,934
Fiscal 2022	17,677		1,934
Fiscal 2023	16,940		—
Fiscal 2024	14,887		—
Thereafter	24,431		—
Total minimum lease payments	$	113,746	5,803
Less amount representing interest			(379		)
Present value of minimum lease payments			$	5,424



	Bookings		Bookings Yield (1)		Number of Bookings over $1 Million	Weighted- Average Term (2)
	(In millions)					(Months)
Quarter Ended December 31, 2019	$	112.1	14	%	25	39
Quarter Ended December 31, 2018	$	106.6	15	%	23	31


(1)	Bookings yield represents the percentage of revenue recognized from bookings for the periods indicated.


(2)	Weighted-average term of bookings measures the average term over which bookings are expected to be recognized as revenue.


(a)	NM - Measure is not meaningful as our estimate of bookings is as of the end of the period in which a contract is signed, and we do not update our initial booking estimates in future periods for changes between estimated and actual results.


	Quarter Ended December 31,				Percentage of Revenues				Period-to-Period Change			Period-to-Period Percentage Change		Quarter Ended March 31,					Percentage of Revenues				Period-to-Period Change				Period-to-Period Percentage Change
Segment	2019		2018		2019		2018				2020				2019			2020	2019				Period-to-Period Change				Period-to-Period Percentage Change
	(In thousands)								Period-to-Period Change	(In thousands)		Period-to-Period Percentage Change				(In thousands)										(In thousands)
Applications	$	152,178	$	147,659	51	%	56	%	$	4,519		3	%	$	140,279		$	141,815	46	%	51	%	$	(1,536	)		(1	)%
Scores	115,138		85,683		39	%	33	%	29,455			34	%	129,148			104,403		42	%	38	%	24,745				24	%
Decision Management Software	31,188		28,914		10	%	11	%	2,274			8	%	38,544			32,016		12	%	11	%	6,528				20	%
Total	$	298,504	$	262,256	100	%	100	%	36,248			14	%	$	307,971		$	278,234	100	%	100	%	29,737				11	%

														Six Months Ended March 31,					Percentage of Revenues				Period-to-Period Change				Period-to-Period Percentage Change
Segment														2020			2019		2020		2019						Period-to-Period Percentage Change
														(In thousands)									Period-to-Period Change	(In thousands)
Applications														$	292,457		$	289,474	48	%	54	%	$	2,983			1	%
Scores														244,286			190,086		40	%	35	%	54,200				29	%
Decision Management Software														69,732			60,930		12	%	11	%	8,802				14	%
Total														$	606,475		$	540,490	100	%	100	%	65,985				12	%


	Quarter Ended December 31,						Percentage of Revenues				Quarter Ended March 31,						Percentage of Revenues				Six Months Ended March 31,						Percentage of Revenues
	2019			2018			2019		2018		2020			2019			2020		2019		2020			2019			2020		2019
	(In thousands)										(In thousands)										(In thousands)
Segment revenues	$	152,178		$	147,659		100	%	100	%	$	140,279		$	141,815		100	%	100	%	$	292,457		$	289,474		100	%	100	%
Segment operating expense	(116,010		)	(107,598		)	(76	)%	(73	)%	(111,456		)	(111,643		)	(79	)%	(79	)%	(227,466		)	(219,241		)	(78	)%	(76	)%
Segment operating income	$	36,168		$	40,061		24	%	27	%	$	28,823		$	30,172		21	%	21	%	$	64,991		$	70,233		22	%	24	%



	December 31, 2019						September 30, 2019
	Cost Basis		Carrying Amount		Average Yield		Cost Basis		Carrying Amount		Average Yield
	(Dollars in thousands)
Cash and cash equivalents	$	111,216	$	111,216	0.52	%	$	106,426	$	106,426	0.66	%