Fair Isaac (FICO) 10-K risk factor changes: FY2019 vs FY2019

We continue to expand the pursuit of our business objective to become a leader in helping businesses automate and improve decisions across their enterprises, an approach that we commonly refer to as Decision Management, or “DM.” [removed: Our] [added: We have increasingly focused our] DM strategy [removed: is designed to enable us to increase] [added: on bringing] our [removed: business by selling multiple products to clients, as well as to enable the development of custom client solutions that may lead to opportunities to develop new proprietary scores or other new proprietary products.][added: Decision Management assets together in a flexible, extensible, and cloud-native platform approach (the FICO Decision Management Platform).]

The market may be unreceptive to our general DM business approach, including being unreceptive to [added: our cloud-based offerings, unreceptive to] purchasing multiple products from us, [removed: unreceptive to our customized solutions,] or unreceptive to our [removed: cloud-based offerings.][added: customized solutions.]

In addition, the U.S. and other key international economies [added: are experiencing and] have experienced in the past a downturn in which economic activity was impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, bankruptcies and overall uncertainty with respect to the economy.

Such [removed: disruption] [added: disruption, whether arising in connection with the current COVID-19 pandemic or otherwise,] could result in a decline in the volume of transactions that we execute for our customers.

We rely on relationships with third parties for marketing, distribution and certain services. If we experience difficulties in these relationships, [added: including competition from these third parties,] our future revenues may be adversely affected.

Our acquisition [removed: and divestiture] activities may disrupt our ongoing business and may involve increased expenses, and we may not realize the financial and strategic goals contemplated at the time of a transaction.

| • | our operating results or financial condition may be adversely impacted by [added: known or unknown] claims or liabilities we assume [removed: from] [added: in] an [removed: acquired company, business, product] [added: acquisition] or [removed: technology,] [added: that are imposed on us as a result of an acquisition,] including claims by government [removed: agencies,] [added: agencies or authorities,] terminated employees, current or former customers, former stockholders or other third parties; [removed: 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 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 [added: incorporate the acquired technologies or products with our existing product lines in a uniform manner, if we are unable to] sell the acquired products to our customer base or if contract models of an acquired company [added: or changes in accounting treatment] do not allow us to recognize revenues on a timely basis; |

| • | 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; [added: and] |

| • | 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 [removed: decrease; and] [added: decrease.] |

Divestitures involve [removed: significant risks and uncertainties,] [added: risks,] including:

Because acquisitions [removed: and divestitures] are inherently risky, our transactions may not be successful and may have a material adverse effect on our business, results of operations, financial condition or cash flows.

Our reengineering [removed: initiative] [added: efforts] may cause our growth prospects and profitability to suffer.

As part of our management approach, we [removed: implemented an] [added: pursue] ongoing reengineering [removed: initiative] [added: efforts] designed to grow revenues through strategic resource allocation and improve profitability through cost reductions.

[added: These and other reengineering efforts may not be successful over the long term should we fail to reduce expenses at the anticipated level, or should we fail to increase revenues to anticipated levels or at all.] If our reengineering [removed: initiative is] [added: efforts are] not successful over the long term, our revenues, results of operations and business may suffer.

The market price of our common stock [removed: may be] [added: has been] volatile and [removed: could] [added: may continue to] be subject to wide fluctuations due to a number of factors, including variations in our revenues and operating results.

| • | changes in [added: demand and] competitive and other conditions in the consumer credit, banking and insurance industries; |

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

For example, the sales cycle for our products typically ranges from 60 days to 18 [removed: months.][added: months, which may be further extended as a result of COVID-19.]

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 [removed: privacy concerns,] [added: privacy, security,] competition [added: or regulatory] 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.

Cybersecurity breaches could expose us to a risk of loss, the unauthorized disclosure of consumer or customer information, [added: significant] litigation, [added: regulatory fines, penalties, loss of customers or reputational damage,] 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, [added: sensitive data may be accessed, stolen, disclosed or lost,] our reputation may be damaged, our business may suffer and we could incur significant liability.

Because the techniques used to obtain unauthorized access, [added: disable] or [added: degrade service or] to sabotage [removed: systems,] [added: systems] change frequently and generally are not recognized until launched against a target, [added: or even for some time after,] we may be unable to anticipate these [removed: techniques or to] [added: techniques,] implement adequate preventative [removed: measures.][added: measures or remediate any intrusion on a timely or effective basis.]

Malicious third parties may also conduct attacks designed to temporarily deny [removed: customers] [added: customers, distributors and vendors] access to our [added: systems and] services.

Cybersecurity [removed: compromises] [added: breaches] experienced by our [removed: competitors,] [added: vendors,] by our distributors, by our customers or by us may [removed: lead to] [added: trigger governmental notice requirements and] public disclosures, which may lead to widespread negative publicity.

Any [added: such] cybersecurity [removed: compromise in our industry,] [added: breach,] 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.

These interruptions can include software or hardware malfunctions, communication failures, outages or other failures of third party environments or service providers, fires, floods, earthquakes, [added: pandemics (including the COVID-19 pandemic), war, terrorist acts or civil unrest,] power losses, equipment [removed: failures] [added: failures, computer viruses, denial-of-service or other cybersecurity attacks, employee or insider malfeasance, human error] and other events beyond our control.

| • | Laws and regulations applicable to secondary market participants (e.g., Fannie Mae and Freddie Mac) that could have an impact on our scoring [removed: products,] [added: 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; |

Brazil, India, South Africa, Japan, China, Israel, Canada, and several other countries have introduced and, in some cases, enacted, similar privacy [added: and data security] laws.

The California Consumer Privacy Act of 2018, which was enacted on June 28, 2018 and [removed: will become] [added: 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 laws and regulations above, and changes to [removed: them,] [added: them or their interpretation by the courts,] could affect the demand for or profitability of our products, including scoring and consumer products.

Our revenues depend, to a great extent, upon conditions in the banking (including consumer credit) [removed: and insurance industries.][added: industry.]

If our clients’ [removed: industries experience] [added: industry experiences] uncertainty, it will likely harm our business, financial condition or results of operations.

During fiscal [removed: 2019, 88%] [added: 2020, 86%] of our revenues were derived from sales of products and services to the banking [removed: and insurance industries.][added: industry.]

[removed: Global] [added: Periods of global] economic uncertainty experienced in the [removed: U.S. and other key international economies in the] past [added: have] 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 [removed: disruptions] [added: future stress and disruptions, including in connection with the COVID-19 pandemic,] presents considerable risks to our businesses and operations.

While we are attempting to expand our sales of consumer [removed: credit, banking] [added: credit] and [removed: insurance] [added: banking] 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.

Global economic uncertainty [added: in the past, and currently as a result of the COVID-19 pandemic,] has produced substantial stress, volatility, illiquidity and disruption of global credit and other financial [removed: markets in the past.][added: markets.]

[removed: Any economic] [added: Economic] uncertainty [removed: can] [added: has and could continue to] negatively affect the businesses and purchasing decisions of companies in the industries we serve.

[removed: If] [added: As] 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.

Business, Market and Strategy Risks

The effects of the COVID-19 pandemic have negatively affected how we and our customers are operating our businesses.

The duration of these effects, and the extent to which they will impact our future revenues, results of operations and overall financial performance, remain uncertain.

The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected the global economy, leading to reduced consumer spending and lending activities and disruptions and volatility in the global capital markets.

COVID-19 has caused shutdowns to businesses and cities worldwide and has disrupted supply chains, business operations, travel, and consumer confidence.

As a result of the COVID-19 pandemic, we have temporarily closed the majority of our offices (including our corporate headquarters in the United States) and implemented travel restrictions, both of which have disrupted how we operate our business.

Due in part to anticipated post-pandemic workforce patterns, we have permanently closed certain non-core offices, reduced certain other office space and reduced our global workforce.

Our operations may be further negatively affected by a range of external factors related to the COVID-19 pandemic that are not within our control.

For example, many cities, counties, states, and countries may continue to impose a wide range of restrictions on our employees’, partners’ and customers’ physical movement to limit the spread of COVID-19.

We have postponed, canceled or shifted certain of our customer, employee or industry events to virtual-only experiences and may continue to do so in the future.

If the COVID-19 pandemic has a substantial impact on our employees’, partners’ or customers’ productivity or ability to collaborate, our results of operations and overall financial performance may be harmed.

The situation surrounding the COVID-19 pandemic is constantly evolving and both the short-term and long-term effects remain unknown.

Our customers, and therefore our business and revenues, are sensitive to negative changes in general economic conditions and lending activities.

The COVID-19 pandemic may affect the rate of spending on our solutions and could adversely affect our customers’ ability or willingness to purchase our products and services, cause prospective customers to change product selections or term commitments, delay or cancel their purchasing decisions, extend sales cycles, and potentially increase payment defaults, all of which could adversely affect our future revenues, results of operations and overall financial performance.

We have seen evidence that COVID-19 has adversely affected certain segments and originations volume, which may impact future revenue.

We are unable to accurately predict the complete impact that COVID-19 will have on our future results of operations, financial condition, liquidity and cash flows due to numerous uncertainties, including the severity and transmission rate of the virus, the duration of the outbreak, the extent and effectiveness of containment actions, the effectiveness of any medical treatment and prevention options, and the impact of these and other factors on us, our employees, customers, partners and vendors, and on worldwide and U.S. economic conditions.

If we are not able to respond to and manage these impacts effectively, our business may be harmed to a material extent.

Our DM strategy is designed to enable us to increase our business by selling multiple connectable and extensible DM products to clients, as well as to enable the development of custom client solutions and to allow our clients to more easily expand their usage and the use cases they enable over time.

| • | our inability to obtain regulatory approvals for our products and services, including credit score models; |

| • | the increasing availability of free or relatively inexpensive consumer credit, credit score and other information from public or commercial sources; |

In addition, if consumer demand for financial services and products and the number of credit applications decrease, the demand for our products and services could also be materially reduced.

These types of disruptions could lead to a decline in the volumes of services we provide our customers and could negatively impact our revenue and results of operations.

There can be no assurance that strategic divestitures will provide business benefits.

As part of our strategy, we continuously evaluate our portfolio of businesses.

We have previously and may in the future make other changes to our portfolio as well, which may be material.

| • | disruption of our operations or businesses; |

| • | difficulties in the separation of operations, services, products and personnel; |

| • | finding a suitable purchaser; |

| • | disposing of businesses or assets at a price or on terms that are less favorable than we had anticipated, or with purchase price adjustments or the exclusion of assets or liabilities that must be divested, managed or run off separately; |

| • | diversion of management's attention from our other businesses; |

| • | adverse effects on relationships with our suppliers or their businesses, |

| • | the erosion of employee morale or customer confidence; and |

| • | the retention of contingent liabilities related to the divested business. |

If we do not successfully manage the risks associated with divestitures, our business, financial condition, and results of operations could be adversely affected as the potential strategic benefits may not be realized or may take longer to realize than expected.

For example, in September 2020, we implemented a course of action designed to reduce our operating costs in lower value, less strategic areas of our business in order to facilitate incremental investment in higher value, more strategic areas while also reducing our facilities footprint in light of anticipated post-pandemic workforce patterns.

Operational Risks

Because our business requires the storage, transmission and utilization of sensitive consumer and customer information, we will continue to routinely be the target of attempted cybersecurity and other security threats by outside third parties, including technically sophisticated and well-resourced bad actors attempting to access or steal the data we store.

We may be exposed to additional cybersecurity threats as we migrate our data from our legacy systems to cloud-based solutions.

We operate in an environment of significant risk of cybersecurity incidents resulting from unintentional events or deliberate attacks by third parties or insiders, which may involve exploiting highly obscure security vulnerabilities or sophisticated attack methods.

These threats include phishing attacks on our email systems and other cyber-attacks, including state-sponsored cyber-attacks, industrial espionage, insider threats, denial-of-service attacks, computer viruses, ransomware and other malware, payment fraud or other cyber incidents.

Risks Related to Our Business

Our DM strategy is also increasingly focused on the delivery of our products through cloud-based deployments.

The European Union (“E.U.”) continues to face great economic uncertainty which could impact the overall world economy or various other regional economies.

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

| • | 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. |

We have also divested ourselves of businesses in the past and may do so again in the future.

| • | disruption of our ongoing business; |

| • | unanticipated liabilities, legal risks and costs; |

| • | 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. |

Our reengineering initiative may not be successful over the long term as a result of our failure to reduce expenses at the anticipated level, or a lower, or no, positive impact on revenues from strategic resource allocation.

Our business requires the storage, transmission and utilization of sensitive consumer and customer information.

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.

Risks Related to Our Industry

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.

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.

Risks Related to External Conditions

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.

Our continued product innovation provides growth opportunities with customers that can benefit from the [removed: affordability] [added: power, flexibility] and [removed: simplicity] [added: modularity] of these solutions.

[removed: During fiscal 2019, our] [added: Our] cloud bookings accounted for [removed: 39%] [added: 41%] of our total [removed: bookings,] [added: bookings in fiscal 2020,] compared to [removed: 35%] [added: 39%] during fiscal [removed: 2018.][added: 2019.]

For our Scores segment, our industry leading business-to-business FICO® Scores [removed: has] [added: have] achieved a multi-year expansion in the growing U.S. [removed: consumer] [added: business-to-consumer] market.

We have launched numerous new FICO® [removed: Score based] [added: Score-based] products, and continue to grow our [added: business-to-consumer] partnership with Experian, a leading global information services provider.

The FICO® Score Open Access program, which allows our participating clients to provide their customers with a free FICO® Score along with content to help them understand the FICO® Score their lender uses, has more than [removed: 290] [added: 240] million consumer accounts with access to their free FICO® Scores.

We [added: also] continue to enhance stockholder value by returning cash to stockholders through our stock repurchase program.

During fiscal [removed: 2019,] [added: 2020,] we repurchased approximately [removed: 0.9] [added: 0.7] million shares at a total repurchase price of [removed: $228.9] [added: $235.2] million.

As of September 30, [removed: 2019,] [added: 2020,] we had [removed: $220.3] [added: $224.8] million remaining under our current stock repurchase program.

Total revenues for fiscal [removed: 2019] [added: 2020] were [removed: $1.16] [added: $1.29] billion, an increase of [removed: 16%] [added: 12%] from [removed: $1.00] [added: $1.16] billion in fiscal [removed: 2018.][added: 2019.]

Scores revenue increased 25% to [removed: $421.2] [added: $528.5] million in fiscal [removed: 2019] [added: 2020] from [removed: $335.9] [added: $421.2] million in fiscal [removed: 2018,] [added: 2019,] and Scores operating income increased [removed: 33%] [added: 26%] to [removed: $361.4] [added: $454.3] million in fiscal [removed: 2019] [added: 2020] from [removed: $272.4] [added: $361.4] million in fiscal [removed: 2018.][added: 2019.]

For our Applications and Decision Management Software segments, our [removed: cloud] [added: SaaS] business continues to grow as we pursue our [removed: cloud-first] [added: cloud-enabled, platform-based] strategy.

We derive a significant portion of revenues internationally, and [removed: 34%] [added: 32%] and [removed: 35%] [added: 34%] of total consolidated revenues were derived from clients outside the U.S. during fiscal [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

A significant portion of our revenues are derived from the sale of products and services within the banking (including consumer credit) industry, and [removed: 87%] [added: 86%] and [removed: 85%] [added: 87%] of our revenues were derived from within this industry during fiscal [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

In addition, [removed: we derive] a significant share of [added: our] revenues [added: come] from transactional or unit-based software license fees, transactional fees [removed: derived] under credit scoring, data processing, data management and SaaS subscription services arrangements, and annual software maintenance fees.

Arrangements with transactional or unit-based pricing accounted for [removed: 74% and] 75% [added: and 74%] of our revenues during fiscal [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

Operating income for fiscal [removed: 2019] [added: 2020] was [removed: $253.5] [added: $296.0] million, an increase of [removed: 45%] [added: 17%] from [removed: $175.4] [added: $253.5] million in fiscal [removed: 2018.][added: 2019.]

Operating margin was [removed: 22%] [added: 23%] and [removed: 18%] [added: 22%] for fiscal [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

[removed: As a result, net] [added: Net] income increased [removed: 52%] [added: 23%] to [removed: $192.1] [added: $236.4] million in fiscal [removed: 2019] [added: 2020] from [removed: $126.5] [added: $192.1] million in fiscal [removed: 2018.][added: 2019 primarily due to an increase in operating income.]

Diluted earnings per share for fiscal [removed: 2019] [added: 2020] was [removed: $6.34,] [added: $7.90,] an increase of [removed: 56%] [added: 25%] from [removed: $4.06] [added: $6.34] in fiscal [removed: 2018.][added: 2019.]

While we disclose estimated revenue expected to be recognized in the future related to unsatisfied performance obligations in Note 16 to the accompanying consolidated financial statements, we believe bookings amount is still a meaningful measure of our business as it includes estimated revenues omitted from Note 16, such as [removed: sales- or] usage-based royalties derived from our software licenses, among others.

Although many of our contracts contain non-cancelable terms, most of our bookings are transactional or [removed: service related] [added: service-related] that depend upon estimates such as volume of transactions, number of active accounts, or number of hours incurred.

The following paragraphs discuss the key assumptions used to calculate bookings and the susceptibility of these assumptions to variability for each revenue [removed: type.][added: type, as defined in Revenue Recognition in the Critical Accounting Policies and Estimates.]

Licenses [added: that] are sold on a perpetual or term basis [removed: and] [added: when] bookings generally equal the fixed amount [added: (including guaranteed minimums)] stated in the contract.

| | Bookings | | | | Bookings Yield (1) | | | Number of Bookings over [removed: $1 Million] [added: $1 Million] | | | Weighted- Average Term (2) | |

| Quarter ended September 30, [removed: 2018] [added: 2020] | $ | [removed: 133.5] [added: 234.6] | | | [removed: 11] [added: 15] | % | | [removed: 24] [added: 31] | | | [removed: 31] [added: 55] | |

| Year ended September 30, [removed: 2018] [added: 2020] | $ | [removed: 437.3] [added: 537.0] | | | 29 | % | | [removed: 80] [added: 87] | | | NM(a) | |

Transactional and maintenance bookings were 48% [removed: and 46%] of total bookings for [added: each of] the years ended September 30, [removed: 2019] [added: 2020] and [removed: 2018, respectively.][added: 2019.]

Professional services bookings were [removed: 39%] [added: 33%] and [removed: 43%] [added: 39%] of total bookings for the years ended September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

License bookings were [removed: 13%] [added: 19%] and [removed: 11%] [added: 13%] of total bookings for the years ended September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively.

Segment revenues, operating income, and related financial information, including disaggregation of revenue, for the years ended September 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] are set forth in Note 15 to the accompanying consolidated financial statements.

The following tables set forth certain summary information on a segment basis related to our revenues for fiscal [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017:][added: 2018:]

| Segment | [added: 2020 | | | |] 2019 | | | | 2018 | | | | [removed: 2017] [added: 2020 to 2019] | | | | 2019 to 2018 | | | | [removed: 2018] [added: 2020] to [removed: 2017 |] [added: 2019] | | | 2019 to 2018 | | [removed: | 2018 to 2017 | |]

| Applications | $ | [removed: 605,034] [added: 602,046] | | | $ | [removed: 564,375] [added: 605,034] | | | $ | [removed: 560,634] [added: 564,375] | | | $ | [removed: 40,659] [added: (2,988] | [added: )] | | $ | [removed: 3,741] [added: 40,659] | | | [removed: 7] [added: —] | % | | [removed: 1] [added: 7] | % |

| Scores | [removed: 421,177] [added: 528,547] | | | | [removed: 335,870] [added: 421,177] | | | | [removed: 259,537] [added: 335,870] | | | | [removed: 85,307] [added: 107,370] | | | | [removed: 76,333] [added: 85,307] | | | | 25 | % | | [removed: 29] [added: 25] | % |

| Decision Management Software | [removed: 133,872] [added: 163,969] | | | | [removed: 99,901] [added: 133,872] | | | | [removed: 114,812] [added: 99,901] | | | | [removed: 33,971] [added: 30,097] | | | | [removed: (14,911] [added: 33,971] | | [removed: )] | | [removed: 34] [added: 22] | % | | [removed: (13] [added: 34] | [removed: )%] [added: %] |

| Total | $ | [removed: 1,160,083] [added: 1,294,562] | | | $ | [removed: 1,000,146] [added: 1,160,083] | | | $ | [removed: 934,983] [added: 1,000,146] | | | [removed: 159,937] [added: 134,479] | | | | [removed: 65,163] [added: 159,937] | | | | [removed: 16] [added: 12] | % | | [removed: 7] [added: 16] | % |

| Segment | [removed: 2019] [added: 2020] | | | [removed: 2018] [added: 2019] | | | [removed: 2017] [added: 2018] | |

| Applications | [removed: 52] [added: 46] | % | | [removed: 56] [added: 52] | % | | [removed: 60] [added: 56] | % |

| Scores | [removed: 36] [added: 41] | % | | [removed: 34] [added: 36] | % | | [removed: 28] [added: 34] | % |

| Decision Management Software | [removed: 12] [added: 13] | % | | [removed: 10] [added: 12] | % | | [removed: 12] [added: 10] | % |

During fiscal 2020, we continued to advance our cloud-enabled, platform-based strategy in our Applications and Decision Management Software segments.

The application of this strategy has led to an increase in our cloud bookings over the past several years.

We have invested, and intend to continue to invest, in product development to build out and deliver features, functionalities and performance enhancements using a SaaS-based approach on our platform.

During fiscal 2020, we announced the launch of the FICO® Resilience Index, a new analytic tool designed to complement FICO® Score models by identifying those consumers who are most resilient to economic stress relative to other consumers within the same FICO® Score bands.

FICO® Resilience Index would enable industry participants to more precisely assess credit risk and extend credit to more consumers throughout the economic cycle by managing the risk that emerges during periods of economic stress.

As a strategic cost initiative in fiscal 2020, we committed to a course of action designed to reduce operating costs in lower value, less strategic areas of our business in order to facilitate incremental investment in higher value, more strategic areas while also reducing our facilities footprint in light of post-pandemic workforce patterns.

As a result of this initiative, in the fourth quarter of fiscal 2020, we recorded a net charge of $41.9 million consisting of impairment losses of $33.2 million on our operating lease assets, property and equipment related to closing or consolidating office spaces, as well as a restructuring charge of $8.7 million related to our workforce reduction.

We expect this course of action to result in an aggregate annual expense savings of approximately $36 million beginning in fiscal 2021.

In addition, during fiscal 2020, we changed our practice of selling term software licenses with separate license and maintenance components to a single software subscription contract with license and maintenance bundled.

This transition will be substantially completed by the end of the first quarter of our fiscal 2021.

This will shift the timing of our revenue recognition on these subscription sales, resulting in less revenue recognized upfront and more revenue recognized over the term of these subscriptions.

We expect a decline in revenue recognized from term software licenses in fiscal 2021 as we transition to the new term license subscription model.

This change will not negatively impact our cash flows.

Revenue derived from our cloud-enabled SaaS business, which includes both subscription revenue and associated professional services revenue, increased 11% to $300.0 million during fiscal 2020, from $270.4 million during fiscal 2019.

SaaS subscription revenue increased 11% to $236.0 million during fiscal 2020, from $213.1 million during fiscal 2019.

COVID-19 Update

In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic, which has spread throughout the U.S. and the world.

The COVID-19 pandemic has resulted in authorities implementing numerous measures to contain the virus, including quarantines, shelter-in-place orders, travel bans and restrictions, and business limitations and shutdowns.

Our focus remains on promoting employee health and safety, serving our customers and ensuring business continuity.

Since March 2020, our employees have been instructed to work from home in each country where we operate to support their health and well-being as well as for our customers, partners and communities.

We have also substantially reduced employee travel to only essential business needs.

We cannot predict when or how we will begin to lift the actions put in place, but as of the date of this filing, we do not believe our work-from-home protocol has had a material adverse impact on our internal controls, financial reporting systems or our operations.

Our operational flexibility and strong balance sheet allowed us to successfully manage through the initial impact of COVID-19 while protecting our cash flow and liquidity.

However, certain areas of our business have been adversely impacted as a result of the pandemic’s global economic impact.

For example, COVID-19 has been adversely affecting certain purchasing decisions by our customers in our Applications and Decision Management Software segments.

For our Scores segment, we have seen a decline in auto and unsecured originations volumes, but an increase in mortgage volume through the 2nd half of fiscal 2020 due to strong refinancing activities boosted by low interest rates.

Additionally, we have granted and may continue to grant extended payment terms to a small number of customers as a result of COVID-19.

We have not and do not plan to modify our customer agreements in a manner that would materially impact our financial condition or results of operations.

Finally, contrary to our original expectations, a decrease in sales-related travel activity has not materially affected our ability to consummate sales.

As a cost management initiative due to COVID-19, we accelerated reviews of our leased office spaces across our real estate portfolio to reshape and optimize our occupancy cost structures over the next several years.

As a result, in the fourth quarter of fiscal 2020 we recorded impairment charges of $33.2 million on operating lease assets, property and equipment related to closing or consolidating office spaces to better align with anticipated needs.

While we intend to continue to manage our costs by limiting the addition of new employees and third-party contracted services, and substantially reducing employee travel and other discretionary spending, to the extent the business disruption continues for an extended period, additional cost management actions will be considered and may become necessary.

Further asset impairment charges, increases in allowance for doubtful accounts, or restructuring charges may be required, depending on the severity and duration of the pandemic.

We have not incurred significant financial disruptions thus far from the COVID-19 outbreak, but due to numerous uncertainties, including the severity and duration of the pandemic, actions that may be taken by governmental authorities, the impact on the business of our clients, and other factors, we are unable to accurately predict the impact COVID-19 will have on our results of operations, financial condition, liquidity and cash flows.

For more information, see Part I, Item 1A, *Risk Factors*, of this Annual Report on Form 10-K.

The increase in business-to-business scores was primarily attributable to an increase in mortgage volumes, a higher unit price in auto and unsecured originations, a large royalty true-up as well as a large annual license deal recognized during fiscal 2020.

The increase was partially offset by a decrease in unsecured originations volume.

Decision Management Software segment revenues increased $30.1 million in fiscal 2020 from 2019 primarily attributable to an increase in license revenue, as well as an increase in our SaaS subscription revenue classified as transactional and maintenance revenue.

| Restructuring and impairment charges | 45,029 | | | | — | | | | — | | | | 45,029 | | | | — | | | | — | % | | — | % |

| | 2020 | | | 2019 | | | 2018 | |

During fiscal 2019, our growth initiatives continued to generate significant free cash flow.

We utilized our cash to enhance stockholder value through investments in long-term growth initiatives; acquisitions of relevant technologies and products that strengthen our portfolio and competitive position; and our stock repurchase programs.

We continued to transform our business from on-premises to recurring revenue associated with our cloud-based solutions in our Applications and Decision Management Software segments.

The majority of our software solutions are now available through both the FICO® Analytic Cloud and AWS.

Cloud revenues increased 12% to $270.4 million during fiscal 2019, from $240.9 million during fiscal 2018.

Revenue fluctuations in our business are primarily driven by changes in the transactional volume and license fees.

| | |

| --- | --- |

| | | | | | As Adjusted | | | | As Adjusted | | | | | | | | As Adjusted | | | | | | | As Adjusted | |

| | | | | As Adjusted | | | As Adjusted | |

The increase in collections & recovery solutions was primarily attributable to an increase in license revenue.

The increase in compliance solutions was attributable to an increase in all revenue types.

The increase in business-to-business scores was primarily attributable to a $48.1 million increase in transactional scores in originations, primarily driven by a higher unit price in mortgage activities; in addition, transactional scores in account management and prescreen increased $13.1 million driven by higher transactional volume.

Decision Management Software segment revenues decreased $14.9 million in fiscal 2018 from 2017 primarily attributable to a decrease in license revenue related to our FICO® Blaze Advisor®.

| Restructuring and acquisition-related | — | | | | — | | | | 4,471 | | | | — | | | | (4,471 | | ) | | — | % | | (100 | )% |

| Restructuring and acquisition-related | — | % | | — | % | | 1 | % |

Selling, general and administrative expenses as a percentage of revenues was 37% during fiscal 2018, materially consistent with those incurred during fiscal 2017.

The fiscal 2018 over fiscal 2017 decrease of $6.1 million was primarily attributable to certain intangible assets associated with our Adeptra and HNC acquisitions becoming fully amortized in fiscal 2017.

Restructuring and Acquisition-Related

During fiscal 2017, we incurred net charges totaling $4.5 million consisting of $1.7 million in facilities charges associated with vacating excess leased space in San Rafael, California and $2.8 million in employee separation costs due to the elimination of 79 positions throughout the Company.

Cash payments for all the employee separation costs were paid before the end of the second quarter of fiscal 2018.

There were no acquisition-related expenses incurred during fiscal 2017.

The fiscal 2018 over 2017 change in other income (expense), net of $13.0 million was primarily attributable to a non-operating gain related to the divestiture of an investment, as well as an increase in foreign currency exchange gain during fiscal 2018.

The increase in our income tax provision in fiscal 2018 compared to fiscal 2017 was primarily due to recording the impact related to the enactment of the Tax Act in fiscal 2018.

This includes re-measurement to our deferred for the tax rate changes, the one-time deemed repatriation transition tax, and the loss of deductibility of performance-based compensation for certain employees.

| Unallocated restructuring and acquisition-related | — | | | | — | | | | (4,471 | | ) | | — | | | | 4,471 | | | | — | % | | (100 | )% |

| | | | | | As Adjusted | | | | As Adjusted | | | | | | | As Adjusted | | | As Adjusted | |

Segment operating income as a percentage of segment revenue for Applications decreased to 26% from 30% mainly due to a decrease in sales of our higher-margin software products.

Segment operating income as a percentage of segment revenue for Scores increased to 81% from 79% mainly due to an increase in sales of our higher-margin score products.

Additionally, though we do not anticipate the need to repatriate any undistributed earnings from our foreign subsidiaries for the foreseeable future, we may take advantage of opportunities where we are able to repatriate these earnings to the U.S. without material incremental tax provision.

The $6.5 million decrease was primarily attributable to a $20.0 million increase in proceeds from the sale of cost method investment, partially offset by an $11.5 million increase in net cash used for purchases of property and equipment as well as a $2.8 million increase in purchases, net of proceeds from sale, of marketable securities.

Dividends

We paid dividends of $0.02 per share on a quarterly basis during the first two quarters of our fiscal 2017.

In May 2017, our Board of Directors discontinued cash dividend payments in favor of using our excess cash flow for share repurchases.

The 2010 Senior Notes were issued in four series with maturities ranging from 6 to 10 years.

The outstanding 2010 Senior Notes’ weighted average interest rate is 5.59% and the weighted average maturity is 10 years.

The 2010 Senior Notes require interest payments semi-annually and contain certain restrictive covenants, including the maintenance of a maximum consolidated net debt to consolidated EBITDA ratio of 3.00 and a minimum fixed charge coverage ratio of 2.50.

| Capital lease obligations | 1,935 | | | | 1,934 | | | | 1,934 | | | | — | | | | — | | | | — | | | | 5,803 | | |

| Operating lease obligations | 19,842 | | | | 19,969 | | | | 17,677 | | | | 16,940 | | | | 14,887 | | | | 24,431 | | | | 113,746 | | |

| Purchase obligations (3) | 7,000 | | | | | | | | | | | | | | | | | | | | | | | | | | |

The following table presents the principal amounts and related weighted-average yields for our investments with interest rate risk at September 30, [removed: 2019] [added: 2020] and [removed: 2018:][added: 2019:]

| | September 30, [removed: 2019] [added: 2020] | | | | | | | | | | | September 30, [removed: 2018] [added: 2019] | | | | | | | | | |

| Cash and cash equivalents | $ | [removed: 106,426] [added: 157,394] | | | $ | [removed: 106,426] [added: 157,394] | | | [removed: 0.76] [added: 0.05] | % | | $ | [removed: 90,023] [added: 106,426] | | | $ | [removed: 90,023] [added: 106,426] | | | [removed: 0.66] [added: 0.76] | % |

On July 14, 2010, we issued $245 million of senior notes in a private placement to a group of institutional [removed: investors] [added: investors, the outstanding aggregate principal amount of which was paid in full at maturity on July 14, 2020] (the “2010 Senior Notes”).

[removed: On May 8, 2018, we issued $400 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”, and with the 2010 Senior Notes, the “Senior Notes”).The] [added: The] fair value of the Senior Notes may increase or decrease due to various factors, including fluctuations in market interest rates and fluctuations in general economic conditions.

The following table presents the carrying amounts and fair values for the Senior Notes at September 30, [removed: 2019] [added: 2020] and [removed: 2018:][added: 2019:]

| | September 30, [removed: 2019] [added: 2020] | | | | | | | | September 30, [removed: 2018] [added: 2019] | | | | | | |

| | [removed: Carrying Amounts] [added: Face Value (*)] | | | | Fair Value | | | | [removed: Carrying Amounts] [added: Face Value (*)] | | | | Fair Value | | |

| The 2010 Senior Notes | [removed: 85,000] [added: $] | [added: —] | | | [removed: 86,121] [added: $] | [added: —] | | | [removed: 113,000] [added: $] | [added: 85,000] | | | [removed: 114,413] [added: $] | [added: 86,121] | |

| The 2018 Senior Notes | 400,000 | | | | [removed: $] [added: 442,000] | [removed: 428,000] | | | 400,000 | | | | [removed: 404,000] [added: 428,000] | | |

| Total | $ | [removed: 485,000] [added: 750,000] | | | $ | [removed: 514,121] [added: 800,750] | | | $ | [removed: 513,000] [added: 485,000] | | | $ | [removed: 518,413] [added: 514,121] | |

We had [removed: $345.0] [added: $95.0] million in borrowings outstanding at a [removed: weighted average] [added: weighted-average] interest of [removed: 3.423%] [added: 1.285%] under the credit facility as of September 30, [removed: 2019.][added: 2020.]

Foreign-currency-denominated receivable and cash balances are remeasured at foreign exchange rates in effect on the balance sheet date with the effects of changes in foreign exchange rates reported in other [removed: income (expense),] [added: income,] net.

The forward contracts are not designated as hedges and are marked to market through other [removed: income (expense),] [added: income,] net.

The following tables summarize our outstanding foreign currency forward contracts, by currency, at September 30, [removed: 2019] [added: 2020] and [removed: 2018:][added: 2019:]

| | Foreign Currency | | | | [removed: US$] [added: USD] | | | | [removed: US$] [added: USD] | |

| Euro (EUR) | EUR | [removed: 9,000] [added: 15,000] | | | $ | [removed: 10,372] [added: 17,656] | | | — | |

| British pound (GBP) | GBP | [removed: 8,598] [added: 16,555] | | | $ | [removed: 11,200] [added: 21,300] | | | — | |

| Singapore dollar (SGD) | SGD | [removed: 9,580] [added: 7,815] | | | $ | [removed: 7,000] [added: 5,700] | | | — | |

The foreign currency forward contracts were entered into on September 30 of each fiscal year; therefore, the fair value was $0 on September 30, [removed: 2019] [added: 2020] and [removed: 2018.][added: 2019.]

On May 8, 2018, we issued $400 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”).

On December 6, 2019, we issued $350 million of senior notes in a private offering to qualified institutional investors (the “2019 Senior Notes,” along with the 2010 Senior Notes and 2018 Senior Notes, the “Senior Notes”).

| The 2019 Senior Notes | 350,000 | | | | 358,750 | | | | — | | | | — | | |

(*) The carrying value of the Senior Notes was reduced by the net debt issuance costs of $10.6 million and $5.2 million at September 30, 2020 and 2019, respectively.

| | September 30, 2020 | | | | | | | | | |

| | Foreign Currency | | | | USD | | | | USD | |

| | September 30, 2018 | | | | | | | | | |

Today, we help thousands of companies in over [removed: 100] [added: 120] countries use our decision management technology to target and acquire customers more efficiently, increase customer value, reduce fraud and credit losses, lower operating expenses, and enter new markets more profitably.

We also serve consumers through online services that enable people to [removed: purchase] [added: access] and understand their FICO® Scores, the standard measure in the U.S. of consumer credit risk, empowering them to manage their financial health.

We make our Annual [removed: Report] [added: Reports] on Form 10-K, [removed: our] Quarterly Reports on Form 10-Q and [removed: our] Current Reports on Form 8-K, as well as amendments to those reports, available free of charge through our website as soon as reasonably practicable after we electronically file them with the SEC.

This helps our clients [removed: to] reduce the cost of doing [removed: business, increase revenues] [added: business] and [removed: profitability, reduce] losses from risks and fraud, [removed: and] [added: while helping] increase [added: revenues, profitability, and] customer loyalty.

| • | *Applications.* This segment includes pre-configured decision management applications designed for a specific type of business problem or process — such as marketing, account origination, customer management, fraud, [added: financial crimes compliance,] collections and insurance claims management — as well as associated professional services. These applications are available to our customers as on-premises software, and many are available as hosted, software-as-a-service (“SaaS”) applications through the FICO® Analytic Cloud or [removed: third-party public clouds, such as those provided by] Amazon Web Services (“AWS”). |

| • | *Decision Management Software.* This segment is composed of analytic and decision management software tools that clients can use to create their own custom decision management applications, our FICO® Decision Management Suite, as well as associated professional services. [added: Decision management software is currently delivered as part of the FICO® Platform and is increasingly being adopted to connect decisioning solutions or previously disconnected use cases.] These tools are available to our customers as on-premises software, through the FICO® Analytic Cloud or [removed: third-party public clouds, such as those provided by] AWS. |

| • | Analytics, which include predictive analytics that identify risks and opportunities associated with individual customers, prospects and transactions, in order to detect patterns such as [removed: risk and fraud,] [added: risk, fraud or profitability,] as well as optimization analytics that are used to [added: mathematically] improve the design of decision logic or “strategies.” |

| • | Software such as decision management systems that author and implement business rules, models and decision strategies, often in a real-time environment, as well as software for managing customer engagement. [added: This software is increasingly deployed as a platform solution that enables previously disparate use cases to be connected in a manner that provides a centralized or 360-degree view of a customer’s journey through traditionally siloed client offerings.] |

During fiscal [removed: 2019,] [added: 2020,] we continued to expand our product offerings for the FICO® Analytic Cloud and AWS, resulting in increased sales opportunities by accommodating [removed: small to mid-size businesses] [added: customers] that [added: can] benefit from the [removed: affordability] [added: power, flexibility] and [removed: simplicity] [added: modularity] of [removed: cloud-based] [added: these] solutions.

Within our Applications [removed: segment,] [added: segment] our fraud solutions accounted for [removed: 18%, 17%,] [added: 15%, 18%] and [removed: 19%] [added: 17%] of total revenues in each of fiscal [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017, respectively;] [added: 2018, respectively, and] our customer communication services accounted for [removed: 9%, 10%, and 10% of total revenues for each of these periods, respectively; and our customer management solutions accounted for 6%,] 8%, [added: 9%] and [removed: 8%] [added: 10%] of total revenues in each of these periods, respectively.

We provide solutions that enable banks, credit unions, finance companies, alternative peer-to-peer and online lenders, auto [removed: lenders] [added: lenders,] and other companies to automate and improve the processing of requests for credit or service.

These solutions increase the speed and efficiency with which requests are handled, reduce [removed: losses] [added: losses,] and increase approval rates through analytics that assess applicant [removed: risk,] [added: risk] and reduce the need for manual review by loan officers.

FICO® Origination Manager, an application-to-decision processing solution, is available both [removed: on premises] [added: on-premises] and in the FICO® Analytic [removed: Cloud.][added: Cloud, and we plan to make it available in the AWS cloud in fiscal 2021 with the launch of FICO® Origination Manager 5.0.]

[removed: We] [added: To support origination, we] also offer custom and consortium-based credit risk and application fraud models.

Our customer [removed: strategy] [added: portfolio] management products and services enable businesses to automate and improve risk-based decisions for their existing customers.

We provide customer [removed: strategy] [added: portfolio] management solutions for banking, telecommunications and retail.

[removed: The solution is an adaptive control system, which enables] [added: These solutions enable] businesses to rapidly adapt to changing business and internal conditions by designing and testing new strategies in a “champion/challenger” environment.

The current [removed: version enables] [added: versions enable] users to manage risk and communications at both the account and customer level from a single platform.

We market and sell FICO® TRIAD® Customer Manager [added: and FICO® Strategy Director] software licenses, maintenance, consulting services, and strategy design and evaluation.

Additionally, we provide TRIAD [added: and Strategy Director] services and similar credit account management services through third-party credit card processors worldwide, including two of the largest processors in the U.S.

*Fraud [added: Protection] and [removed: Security Management] [added: Compliance] Applications*

Our leading fraud detection solution is the FICO® Falcon® Platform, [added: which is] recognized as a [added: global] leader in [removed: global payment card] fraud detection.

The [removed: Falcon®] [added: Falcon] Platform examines [removed: transaction, cardholder,] [added: transactional,] account, customer, device and merchant data to detect a wide range of [removed: payment card] fraud [added: indicators] quickly and accurately [added: by] utilizing artificial intelligence technology.

It analyzes [removed: payment] transactions in real time, assesses the risk of fraud in a fraud score, and provides the ability for user-defined variables and rules strategies to be used in conjunction with the fraud score to prevent fraud while expediting legitimate transactions.

We also announced [removed: the] FICO® [removed: Financial Crimes Studio,] [added: Analytics Workbench™—Falcon Edition,] which allows banks’ data science teams to develop machine learning models using open source libraries, as well as FICO machine learning libraries, and then deploy the models on [removed: FICO® Falcon®] [added: Falcon] X for operational use.

FICO® Fraud Predictor with Merchant Profiles is used in conjunction with the [added: FICO®] Falcon® Platform to improve fraud detection rates through the inclusion of merchant profiles, which is especially important for online transactions.

FICO® [removed: Card] [added: Falcon®] Compromise Manager is used in conjunction with the FICO® Falcon® Platform to identify point-of-sale and e-commerce card compromises with analytically derived [removed: recommenced] [added: recommended] actions—such as card block and reissue, or watch-listing—to optimize loss prevention.

Separately, the FICO® Card Alert Service prevents ATM debit fraud by identifying counterfeit [added: or compromised] payment cards and reporting them to issuers.

[removed: In addition to our Falcon® products, we] [added: We] offer a wide range of solutions focused on preventing and detecting [removed: a variety of financial crimes.][added: identity fraud.]

[removed: FICO offers] [added: We also offer] a comprehensive modular set of compliance solutions to fight money-laundering, terrorist financing, and to fulfill custom requirements for governance, risk and compliance.

In August 2019, [removed: FICO acquired EZMCOM, Inc. (“EZMCOM”) to provide both] [added: we introduced our] identity proofing [removed: (“ID proofing”)] and user authentication [removed: solutions.][added: solutions, FICO® Falcon® Identity Proofing and FICO® Falcon® Authentication Suite.]

[removed: ID] [added: Identity] proofing is the digital process of [removed: on-boarding] [added: onboarding] new customers without requiring face-to-face verification.

The technology provides an extra layer of security that is easy to [removed: use,] [added: use] with minimal customer inconvenience, thereby preventing fraud as well as ensuring regulatory compliance standards such as e-KYC are met.

User authentication is the real-time corroboration of an identity previously established to enable [removed: his or her] access to an electronic or digital asset.

As an authentication hub, [removed: FICO’s] [added: our] technology includes multifactor, biometric, and behavioral (user and device-based) capabilities.

[removed: The] [added: Prior to October 2020, when we divested this business, the] FICO® Cyber Risk Score [removed: provides] [added: was part of the FICO® Enterprise Security Suite and it provided] an empirically derived score that [removed: conveys] [added: conveyed] the security posture of an organization and the likelihood of a material data breach in the [removed: next] [added: following] twelve months.

The score [removed: is] [added: was] used [added: by customers] to manage the cyber risk of an [removed: enterprise as well as to] [added: enterprise,] assess third-party risk that may be introduced by [removed: third-party] [added: third- and fourth-party] partners and [removed: suppliers.][added: suppliers, and provide an effective tool for cyber insurance underwriting.]

FICO® Debt Manager™, FICO® Debt Manager™ Pro, FICO® Debt Manager™ Pro Plus, FICO® PlacementsPlus® [removed: service] [added: service, FICO® Network] and [added: FICO®] Placement OptimizerSM solution (collectively, the “FICO Debt Management Solutions”) automate the full cycle of collections and recovery, including early collections, late collections, asset disposal, agency placement and optimization, recovery, litigation, bankruptcy, asset management and residual balance recovery.

We perform custom [removed: predictive, descriptive] [added: analytics (descriptive, predictive] and [added: prescriptive) as well as] decision modeling and related analytic [added: and machine learning] projects for clients in multiple [removed: industries to address business processes across the customer life cycle.][added: industries.]

[removed: This work leverages] [added: We do so with] our [added: advanced] analytic methodologies and [added: domain] expertise to solve risk [removed: management and] [added: management, fraud,] marketing [added: and other] challenges for a single business, using that business’s [added: unique] data and industry [removed: best practices] [added: position] to develop a highly customized solution.

*Origination Applications*

FICO® Small Business Scoring Service℠ (SBSS) is recognized as the industry leader in assessing the risk of U.S. small business credit applicants.

SBSS is delivered via our LiquidCredit service infrastructure and it brings the speed of consumer lending to small business lending decisions.

With SBSS, clients can typically make decisions in hours rather than days to improve customer satisfaction and help attract more small businesses.

Origination Manager Essentials will be phased out in August 2021.

FICO® Strategy Director is the newest, more flexible customer management application available on the FICO Analytic Cloud and AWS.

Our fraud protection and compliance products improve our clients’ profitability by providing protections across the customer lifecycle from account origination to digital customer interactions—such as online or mobile logins—to non-monetary transactions—such as address changes or pin changes—to payment transactions.

Our fraud and financial crimes solutions analyze activity in real time and generate recommendations for immediate action.

These defenses are critical to stopping synthetic identity fraud, first-party fraud, and third-party fraud, as well as identifying money laundering activity to help our clients stay compliant and secure while safeguarding the customer experience.

Our fraud solutions are designed to detect and prevent a wide variety of risk types.

By looking across products and channels—including real-time payments, peer-to-peer transactions, digital payments, card payments (credit, debit, prepaid), and deposits—FICO helps financial institutions reduce losses and damaged customer relationships caused by fraud and related criminal behavior.

FICO fraud solutions also help protect retailers, insurance companies and government agencies.

By bringing digital identity verification into our broader portfolio, we give our clients the ability to strengthen fraud and financial crimes defenses with more contextual data and decisioning.

Solutions include, but are not limited to, Know Your Customer (“KYC”), Anti-Money Laundering (“AML”), and Sanctions Screening.

FICO Network provides creditors with a single, secure and compliant channel to exchange data with collection agencies, credit bureaus, debt buyers, attorneys, and other vendors.

FICO® Customer Communication Services is an intelligent omnichannel digital communication manager for executing customer lifecycle decisions.

It enables businesses to automate individualized dialogues with the consistency and regulatory compliance of their human agents.

With Customer Communication Services, businesses can be available 24/7 for one-way or two-way communication through any channel consumers choose.

Customers can rapidly launch mobile alerts, messaging, virtual agents, self-service options and other auto-resolution capabilities.

It helps make the full customer journey—account origination and onboarding, customer management account notifications and engagement campaigns, fraud management and debt collection—more digital and raises the level of data-driven intelligence behind lifecycle communications.

In addition to its own rules-based communication logic and embedded rules engine, Customer Communication Services can execute complex multi-step strategies shaped by risk-based segmentation, predictive scores, machine learning insights and mathematical optimization.

This enables them to improve critical business processes and operationalize analytics across the customer lifecycle.

FICO® Score 10 and FICO® Score 10 T, the most recent versions of the FICO® Score, are anticipated to be released at the three U.S. national credit reporting agencies by the end of calendar year 2020.

Additionally, we continue to innovate by investing in the development of scores that can help expand the scorable population using alternative credit data.

During fiscal 2020, we announced the launch of the FICO® Resilience Index, a new analytic tool designed to complement FICO® Score models by identifying those consumers who are most resilient to economic stress relative to other consumers within the same FICO® Score bands.

FICO® Resilience Index would enable industry participants to more precisely assess credit risk and extend credit to more consumers throughout the economic cycle by managing the risk that emerges during periods of economic stress.

Component capabilities include:

| • | FICO® Applications Workbench, an agile application UI builder, which leverages platform services to speed time to application deployment; |

| • | FICO® Decision Central™ (formerly known as Model Central), a solution which enables users to monitor, manage, measure and control the deployment and performance of all decision assets including analytic models and rules-based decision strategies; |

| • | FICO® Decision Management Platform Streaming, a real-time and batch data ingestion solution that uniquely delivers in-stream analytics for real-time data insights and complex event processing. |

In addition, FICO offers certain decision management software tools for use outside of the context of the FICO Decision Management Platform, including:

*Rules Management*.

The FICO® Blaze Advisor® decision rules management system is used to design, develop, execute and maintain rules-based business applications.

The Blaze Advisor system enables business users to propose and preview the impact of changes to decisioning logic, to review and approve proposed changes, and to commit those changes to production decisioning, all without demanding IT cycles.

The Blaze Advisor system is sold as an end-user tool and is also the rules engine within several of our decision management applications.

The Blaze Advisor system, available in six languages, is a multi-platform solution that: embeds rules management within existing applications; supports Web Services and service-oriented architecture, Java 2 Enterprise Edition platforms, and COBOL for z/OS mainframes; and is the first rules engine to support Java and COBOL deployment of the same rules.

It also incorporates the exclusive Rete III rules execution technology, which improves the efficiency and speed with which the Blaze Advisor system is able to process and execute complex, high-volume decision rules.

*Predictive Modeling.* FICO® Decision Central™ is a comprehensive offering to help banks and other organizations-including insurance, retail and health care companies-streamline their predictive and decision model governance and meet stricter regulations for model management.

It complements FICO® Analytics Workbench™, which enables the user to develop and deploy sophisticated predictive models for use in automated decisions.

This software is based on the methodology and tools FICO uses to build both client-level and industry-level predictive models, which it developed from countless client engagements.

| | |

| --- | --- |

*Originations Applications*

Our fraud management products improve our clients’ profitability by predicting the likelihood a given transaction or customer account is experiencing fraud.

Our fraud products analyze transactions in real time and generate recommendations for immediate action, which is critical to stopping third-party fraud, as well as first-party fraud and deliberate misuse of account privileges.

Our solutions are designed to detect and prevent a wide variety of fraud and risk types across multiple industries, including credit and debit payment card fraud; e-payment fraud; deposit account fraud; identity theft; healthcare fraud; Medicaid and Medicare fraud; and property and casualty insurance claims fraud, including workers’ compensation fraud.

FICO fraud solutions protect financial institutions, insurance companies and government agencies from losses and damaged customer relationships caused by fraud and related criminal behavior.

FICO® Insurance Fraud Manager uses advanced unsupervised modeling techniques to detect health care claims fraud, abuse and errors as soon as unusual behavior patterns emerge.

Insurance Fraud Manager is used by both public and private health care payers to detect and prevent fraud in both pre- and post-pay fraud investigation environments.

FICO’s cybersecurity products utilize predictive analytics to deliver enterprise-level risk assessments.

FICO® Customer Communication Services provide customer engagement, fraud resolution, and collection solutions in the cloud.

It enables financial services institutions, utilities, telecommunications firms, insurers, and other businesses to engage in automated two-way communications.

It allows businesses to reach customers in real time using short message service (“SMS”), mobile applications, automated voice, email and other channels; resolve matters such as verification of suspicious credit or debit card transactions; request missed payments; and resolve customer service issues.

FICO® Customer Communication Services, combined with FICO’s decision management applications, allow businesses to execute and resolve customer interactions while improving customer outcomes.

FICO® Score 9, the most recent version of the FICO® Score, was released in early fiscal 2015.

The FICO® Score XD expands the scorable population using alternative credit data.

We license credit bureau scoring services and related consulting directly to users in banking through the FICO® PreScore® service for prescreening solicitation candidates.

They are also key components of our decision management architecture.

The FICO® Decision Management Suite is available on-premises, in the FICO® Analytic Cloud, or in third-party public cloud solutions such as AWS; businesses can choose any of these three deployments depending on their specific needs, IT environments and other factors.

Recent upgrades and enhancements to the functionality in the suite include:

| • | FICO® Decision Central™ (formerly known as Model Central), an analytic and decision model management tool, which expands its versatility and usability across a much broader range of implementations and use cases and makes it fully cloud-capable; and |

The principal products offered are software tools for:

| • | *Rules Management*. The FICO® Blaze Advisor® decision rules management system is used to design, develop, execute and maintain rules-based business applications. The Blaze Advisor system enables business users to propose and preview the impact of changes to decisioning logic, to review and approve proposed changes, and commit those changes to production decisioning, all without demanding IT cycles. The Blaze Advisor system is sold as an end-user tool and is also the rules engine within several of our decision management applications. The Blaze Advisor system, available in six languages, is a multi-platform solution that: embeds rules management within existing applications; supports Web Services and service-oriented architecture, Java 2 Enterprise Edition platforms, Microsoft .NET and COBOL for z/OS mainframes; and is the first rules engine to support Java, .NET and COBOL deployment of the same rules. It also incorporates the exclusive Rete III rules execution technology, which improves the efficiency and speed with which the Blaze Advisor system is able to process and execute complex, high-volume decision rules. FICO’s solution for rules management in the cloud (i.e., Blaze Advisor in the cloud) is called FICO® Decision Modeler. |

| • | *Predictive Modeling.* FICO® Decision Central™ is a comprehensive offering to help banks and other organizations, including insurance, retail and health care companies, maximize the power of their predictive and decision models and meet stricter regulations for model management. It complements FICO® Analytics Workbench, which enables the user to develop and deploy sophisticated predictive models for use in automated decisions. This software is based on the methodology and tools FICO uses to build both client-level and industry-level predictive models and scorecards, which it has developed over more than 40 years, and includes additional algorithms for rapidly discovering variable relationships, predictive interactions and optimal segmentation. The predictive models produced can be embedded in custom production applications or one of our Decision Management applications and can also be executed in the FICO® Blaze Advisor® system. FICO® Analytics Workbench is available for on-premises or cloud implementation. |

| • | *Optimization.* FICO® Xpress Optimization provides operations research professionals with world-class solvers and high-productivity tools to quickly design and deliver custom, mathematically optimal solutions for a wide range of industry problems. Xpress includes a powerful modeling and programming language, with robust scalability, to quickly model and solve even the largest optimization problems. Xpress tools are licensed to end users, consultants and independent software vendors in several industries, and are a core component within FICO® Decision Optimizer. Decision Optimizer is a software tool that enables complex, large-scale optimizations involving dozens of networked action-effect models, and enables exploration and simulation of many optimized scenarios along an efficient frontier of options. The data-driven strategies produced by these tools can be executed by the FICO® Blaze Advisor® system or one of our Decision Management applications. FICO’s solution for creating or executing optimization solutions is available on-premises or in the cloud. |

In the fraud solutions market for health care insurance, we compete with Emdeon, OptumInsight, ViPS, MedStat, Detica, a division of BAE, SAS, Verisk Analytics and IBM.

Verisk Analytics and SAS also compete in the property and casualty insurance claims fraud market.

Most significantly for the fiscal year, we have added distinct FICO intellectual property into tools to develop explainable artificial intelligence or xAI.

*Cybersecurity.* We have advanced services for cyber risk assessment, which enable users to understand the likelihood their organization or a third-party organization that is their partner, supplier, or potential supplier will suffer a material data breach within a forward-looking 12-month period.

These services are used by organizations to track and monitor their own cyber risk for self-assessment and to assess and monitor partner and supplier enterprises for third-party risk assessment.

They are also used by insurance underwriters to assess cyber risk for cyber breach insurance policies.

On March 13, 2020, we received a letter from the Antitrust Division of the U.S. Department of Justice (“DOJ”) informing us that the DOJ had opened a civil investigation into potential exclusionary conduct by the Company.

We are cooperating with the DOJ in its investigation.

Not Applicable.

For the fiscal year ended September 30, [removed: 2019][added: 2020]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T [removed: (§232.405] [added: (§ 232.405] of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

As of March 31, [removed: 2019,] [added: 2020,] the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was [removed: $5,769,737,106] [added: $7,095,692,430] based on the last transaction price as reported on the New York Stock Exchange on such date.

The number of shares of common stock outstanding on October [removed: 25, 2019] [added: 30, 2020] was [removed: 28,961,612] [added: 29,098,177] (excluding [removed: 59,895,171] [added: 59,758,606] shares held by the Company as treasury stock).

| Item 1. | [removed: [Business](#s43015EA11CEB5976BBDA9B13E8A2D2E8)] [added: [Business](#sA0AE620BF90555A4B696251348CBE4D7)] | [removed: [3](#s43015EA11CEB5976BBDA9B13E8A2D2E8)] [added: [3](#sA0AE620BF90555A4B696251348CBE4D7)] |

| Item 1A. | [Risk [removed: Factors](#s78C3B3F6C1845AE2AF33D6B27F26399D)] [added: Factors](#s9B0074BB50C6514EBAFAD2368306886B)] | [removed: [14](#s78C3B3F6C1845AE2AF33D6B27F26399D)] [added: [14](#s9B0074BB50C6514EBAFAD2368306886B)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#sAF9F3215B4BF580180D634C2E9EBF543)] [added: Comments](#s7487B11E394F5ECC9A57A71F3ABCFD51)] | [removed: [24](#sAF9F3215B4BF580180D634C2E9EBF543)] [added: [26](#s7487B11E394F5ECC9A57A71F3ABCFD51)] |

| Item 2. | [removed: [Properties](#sCEF45707D8655BB3AA40A54D1642F98C)] [added: [Properties](#s492D292DAD425FD0BAC36927BD7AE0A7)] | [removed: [25](#sCEF45707D8655BB3AA40A54D1642F98C)] [added: [26](#s492D292DAD425FD0BAC36927BD7AE0A7)] |

| Item 3. | [Legal [removed: Proceedings](#sD2081E90D921576AAF960E173461205D)] [added: Proceedings](#s29A07539E31356A3A71421CA7A3C0795)] | [removed: [25](#sD2081E90D921576AAF960E173461205D)] [added: [27](#s29A07539E31356A3A71421CA7A3C0795)] |

| Item 4. | [Mine Safety [removed: Disclosures](#s78FA5199BFA75238AF683AFD6CDF8746)] [added: Disclosures](#s11E0F2A435F95345866F10058D8793A4)] | [removed: [25](#s78FA5199BFA75238AF683AFD6CDF8746)] [added: [27](#s11E0F2A435F95345866F10058D8793A4)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s6A918814DAF455858EE8D9120C015B45)] [added: Securities](#sB15DCCDE474E5838AD6B26E6F819365B)] | [removed: [26](#s6A918814DAF455858EE8D9120C015B45)] [added: [28](#sB15DCCDE474E5838AD6B26E6F819365B)] |

| Item 6. | [Selected Financial [removed: Data](#s2146C3B489C35E53BB92DEE59E2D8EB5)] [added: Data](#s073826E8633F5322B01782D604D13ABF)] | [removed: [27](#s2146C3B489C35E53BB92DEE59E2D8EB5)] [added: [29](#s073826E8633F5322B01782D604D13ABF)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sD37CD732CEE15B0AB9A78B09AF36DDFE)] [added: Operations](#sA16CB90BA6CB577AB5BD62A2C5FD0F10)] | [removed: [29](#sD37CD732CEE15B0AB9A78B09AF36DDFE)] [added: [31](#sA16CB90BA6CB577AB5BD62A2C5FD0F10)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sC4C26E66EC7857AB9549E828F278B3F4)] [added: Risk](#s3D60BE26749357BF8DCDFFF2800C919D)] | [removed: [47](#sC4C26E66EC7857AB9549E828F278B3F4)] [added: [49](#s3D60BE26749357BF8DCDFFF2800C919D)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#sF90A21287FE25A39BEF357CC2A7EC728)] [added: Data](#s63CCAC5A446D5B1E9BEFD2AA1DE147F4)] | [removed: [50](#sF90A21287FE25A39BEF357CC2A7EC728)] [added: [52](#s63CCAC5A446D5B1E9BEFD2AA1DE147F4)] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sF6371F3212F15B9D97C21F635CCD874D)] [added: Disclosure](#s4EA986E0CF92567FA1E588E82C71EA2B)] | [removed: [87](#sF6371F3212F15B9D97C21F635CCD874D)] [added: [90](#s4EA986E0CF92567FA1E588E82C71EA2B)] |

| Item 9A. | [Controls and [removed: Procedures](#s67BFB3A9A62D5FCD93FF651F8AE037AF)] [added: Procedures](#sAC42F918DE235D9C918665BE6BAA4344)] | [removed: [87](#s67BFB3A9A62D5FCD93FF651F8AE037AF)] [added: [90](#sAC42F918DE235D9C918665BE6BAA4344)] |

| Item 9B. | [Other [removed: Information](#s311759C27A195DF986032EAA8C864427)] [added: Information](#sE100009490605BF5B81DD7451FD2F72F)] | [removed: [87](#s311759C27A195DF986032EAA8C864427)] [added: [90](#sE100009490605BF5B81DD7451FD2F72F)] |

| [PART [removed: III](#sE1C8E1E1E3BB5B439BCDD128AE2F3F6C)] [added: III](#sC66968926161522E855DC428F5FCF049)] | | |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#sBC9263E5D5545AAEB85F0A07D794D04A)] [added: Governance](#s134B478EB316587EAF138512050D9794)] | [removed: [88](#sBC9263E5D5545AAEB85F0A07D794D04A)] [added: [91](#s134B478EB316587EAF138512050D9794)] |

| Item 11. | [Executive [removed: Compensation](#s329150615DFD5E18AFACB2435CB2246E)] [added: Compensation](#sDD95F05848C354E9BBEE15687F4A47EC)] | [removed: [89](#s329150615DFD5E18AFACB2435CB2246E)] [added: [93](#sDD95F05848C354E9BBEE15687F4A47EC)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s8C31B088A5DA53B79B8E9F6940B9F8AC)] [added: Matters](#sE185119D808852B9A604EABDA9C2F305)] | [removed: [89](#s8C31B088A5DA53B79B8E9F6940B9F8AC)] [added: [93](#sE185119D808852B9A604EABDA9C2F305)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s27AE35A633D054D0A4AF1C3C45BB0ED8)] [added: Independence](#s1E5E8BEAF15A58808A995118309FDDB9)] | [removed: [89](#s27AE35A633D054D0A4AF1C3C45BB0ED8)] [added: [93](#s1E5E8BEAF15A58808A995118309FDDB9)] |

| Item 14. | [Principal Accountant Fees and [removed: Services](#sF366E3EB0748574597E790C61A851BEF)] [added: Services](#s61203B5156855EB7BCF8560CD238239F)] | [removed: [89](#sF366E3EB0748574597E790C61A851BEF)] [added: [93](#s61203B5156855EB7BCF8560CD238239F)] |

| Item 15. | [Exhibits, Financial Statement [removed: Schedules](#s5C3F4CD7AAEE563B8C705C4AF8237CE3)] [added: Schedules](#s1A589B21106E5068BC1D9D30084D7E3A)] | [removed: [90](#s5C3F4CD7AAEE563B8C705C4AF8237CE3)] [added: [94](#s1A589B21106E5068BC1D9D30084D7E3A)] |

Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “should,” “potential,” “goals,” “strategy,” “outlook,” [added: “plan,” “estimated,” ”will,” variations of these terms] and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.

Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those described in Item 1A of Part I, [removed: Risk Factors, below.][added: “Risk Factors,” below (including the impact of COVID-19 on macroeconomic conditions and our business, operations and personnel).]

Readers should carefully review the disclosures and the risk factors described in this and other documents we file from time to time with the SEC, including our [removed: reports] [added: Quarterly Reports] on Forms 10-Q and [added: Current Reports on Form] 8-K to be filed by [removed: the Company] [added: us] in fiscal* [removed: *2020.*][added: *2021.*]

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement relating to its 2021 Annual Meeting of Stockholders (“2021 Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

The 2021 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

| [PART I](#s0B055F985BD85424A10119CB187C390F) | | |

| [PART II](#sBC8A62C55DE85AE7B7D428125F47A36D) | | |

| [PART IV](#s7F53C618BD5D572A966836E4951E461B) | | |

| [Signatures](#s91BD41CBF3575202BDD9EA62D620F0A8) | | [99](#s91BD41CBF3575202BDD9EA62D620F0A8) |

Items 10, 11, 12, 13 and 14 of Part III incorporate information by reference from the definitive proxy statement for the Annual Meeting of Stockholders to be held on March 4, 2020.

| [PART I](#s7E12CAEB00BB5F29871F960A1957B013) | | |

| [PART II](#s1C4BC7883C5D5305974BA89453AD6FC8) | | |

| [PART IV](#sDB9958FC47595CBD8964A4718F174F8F) | | |

| [Signatures](#s6F552ABB62EB5C38890E51D9A8D4812A) | | [95](#s6F552ABB62EB5C38890E51D9A8D4812A) |

| • | approximately 173,000 square feet of office space in Bangalore, India in one building under a lease expiring in fiscal 2022; this is used for [added: our] Applications and Decision Management Software segments; |

| • | approximately 80,000 square feet of office space in San Diego, California in one building under a lease expiring in fiscal 2027; this is used for [added: our] Applications and Decision Management Software segments; and |

In addition, we lease an aggregate of approximately [removed: 254,000] [added: 235,000] square feet of office and data center space in a number of smaller domestic locations and internationally in the United Kingdom, China, Singapore, and several other locations.

According to records of our transfer agent, at October [removed: 25, 2019,] [added: 30, 2020,] we had [removed: 303] [added: 278] stockholders of record of our common stock.

| (1) | Includes [removed: 5,225] [added: 6,568] shares delivered in satisfaction of the tax withholding obligations resulting from the vesting of restricted stock units held by employees during the quarter ended September 30, [removed: 2019.] [added: 2020.] |

| (2) | In July [removed: 2018,] [added: 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. In July [removed: 2019,] [added: 2020,] our Board of Directors approved a new stock repurchase program following the completion of the July [removed: 2018] [added: 2019] program. The new program is open-ended and authorizes repurchases of shares of our common stock up to an aggregate cost of $250.0 million in the open market or in negotiated transactions. |

The following graph shows the total stockholder return of an investment of $100 in cash on September 30, [removed: 2014,] [added: 2015,] in (a) the Company’s common stock, (b) the Standard & Poor’s 500 Stock Index and (c) the Standard & Poor’s 500 Application Software Index, in each case with reinvestment of dividends.

[removed: ][added: ]

| July 1, 2020 through July 31, 2020 | 2,298 | | | $ | 436.71 | | | — | | | $ | 250,000,000 | |

| August 1, 2020 through August 31, 2020 | 27,880 | | | $ | 426.55 | | | 24,000 | | | $ | 239,776,878 | |

| September 1, 2020 through September 30, 2020 | 35,990 | | | $ | 421.32 | | | 35,600 | | | $ | 224,777,076 | |

| Total | 66,168 | | | $ | 424.05 | | | 59,600 | | | $ | 224,777,076 | |

Our past performance may not be indicative of future performance.

| July 1, 2019 through July 31, 2019 | 63,866 | | | $ | 335.90 | | | 60,554 | | | $ | 250,000,000 | |

| August 1, 2019 through August 31, 2019 | 76,445 | | | $ | 348.16 | | | 75,000 | | | $ | 223,871,960 | |

| September 1, 2019 through September 30, 2019 | 10,468 | | | $ | 352.38 | | | 10,000 | | | $ | 220,332,604 | |

| Total | 150,779 | | | $ | 343.26 | | | 145,554 | | | $ | 220,332,604 | |

We do not believe there are any publicly traded companies that compete with us across the full spectrum of our product and service offerings.

We acquired TONBELLER Aktiengesellschaft in January 2015, QuadMetrics, Inc. in May 2016, and [removed: EZMCOM] [added: eZmCom, Inc.] in August 2019.

| | [added: 2020 (1) | | | |] 2019 | | | | 2018 | | | | 2017 (1) | | | | 2016 | | | [removed: | 2015 (1) | | |]

| Revenues | $ | [removed: 1,160,083] [added: 1,294,562] | | | $ | [removed: 1,000,146] [added: 1,160,083] | | | $ | [removed: 934,983] [added: 1,000,146] | | | $ | [removed: 881,356] [added: 934,983] | | | $ | [removed: 838,781] [added: 881,356] | |

| Operating income | [removed: 253,548] [added: 295,969] | | | | [removed: 175,359] [added: 253,548] | | | | [removed: 182,159] [added: 175,359] | | | | [removed: 169,592] [added: 182,159] | | | | [removed: 137,505] [added: 169,592] | | |

| Net income | [removed: 192,124] [added: 236,411] | | | | [removed: 126,482] [added: 192,124] | | | | [removed: 133,414] [added: 126,482] | | | | [removed: 109,448] [added: 133,414] | | | | [removed: 86,502] [added: 109,448] | | |

| Basic earnings per share | [removed: 6.63] [added: 8.13] | | | | [removed: 4.26] [added: 6.63] | | | | [removed: 4.32] [added: 4.26] | | | | [removed: 3.52] [added: 4.32] | | | | [removed: 2.75] [added: 3.52] | | |

| Diluted earnings per share | [removed: 6.34] [added: 7.90] | | | | [removed: 4.06] [added: 6.34] | | | | [removed: 4.14] [added: 4.06] | | | | [removed: 3.39] [added: 4.14] | | | | [removed: 2.65] [added: 3.39] | | |

| Dividends declared per share | — | | | | — | | | | [removed: 0.04] [added: —] | | | | [removed: 0.08] [added: 0.04] | | | | 0.08 | | |

| | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Working capital | $ | [removed: (35,122] [added: 119,567] | [removed: )] | | $ | [removed: (77,514] [added: (35,122] | ) | | $ | [removed: 22,842] [added: (77,514] | [added: )] | | $ | [removed: 21,561] [added: 22,842] | | | $ | [removed: 42,727] [added: 21,561] | |

| Total assets | [removed: 1,433,448] [added: 1,606,240] | | | | [removed: 1,330,467] [added: 1,433,448] | | | | [removed: 1,348,728] [added: 1,330,467] | | | | [removed: 1,220,676] [added: 1,348,728] | | | | [removed: 1,230,163] [added: 1,220,676] | | |

| Senior notes | [removed: 485,000] [added: 750,000] | | | | [removed: 513,000] [added: 485,000] | | | | [removed: 244,000] [added: 513,000] | | | | [removed: 316,000] [added: 244,000] | | | | [removed: 376,000] [added: 316,000] | | |

| Revolving line of credit | [removed: 345,000] [added: 95,000] | | | | [removed: 257,000] [added: 345,000] | | | | [removed: 361,000] [added: 257,000] | | | | [removed: 255,000] [added: 361,000] | | | | [removed: 232,000] [added: 255,000] | | |

| Stockholders’ equity | [removed: 289,767] [added: 331,082] | | | | [removed: 287,437] [added: 289,767] | | | | [removed: 466,183] [added: 287,437] | | | | [removed: 446,828] [added: 466,183] | | | | [removed: 436,998] [added: 446,828] | | |

(1) Results of operations for fiscal years [removed: 2017] [added: 2020] and [removed: 2015] [added: 2017] included pre-tax charges of [removed: $4.5] [added: $45.0] million and [removed: $18.2] [added: $4.5] million, respectively, in restructuring and [removed: acquisition-related expenses.][added: impairment charges.]

| | | | | | As Adjusted | | | | As Adjusted | | | | | | | | | | |

To the [added: stockholders and the] Board of Directors [removed: and Stockholders] of

We have audited the accompanying consolidated balance sheets of Fair Isaac Corporation and subsidiaries (the "Company") as of September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the related consolidated statements of [removed: income] [added: Income] and comprehensive income, stockholders' equity, and cash [removed: flows] [added: flows,] for each of the three years in the period ended September 30, [removed: 2019,] [added: 2020,] and the related notes (collectively referred to as the [removed: “financial statements”).][added: "financial statements").]

We also have audited the [removed: Company's] [added: Company’s] internal control over financial reporting as of September 30, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of [removed: its] operations and [removed: its] cash flows for each of the three years in the period ended September 30, [removed: 2019,] [added: 2020,] in conformity with accounting principles generally accepted in the United States of [removed: America.][added: America .]

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control - Integrated Framework (2013)* issued by COSO.

As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for [removed: revenue from contracts with customers] [added: leases] in fiscal year [removed: 2019] [added: 2020] due to [removed: the] adoption of the new [removed: revenue standard.][added: lease standard (Topic 842).]

The Company adopted the new [removed: revenue] [added: lease] standard using the [removed: full] [added: modified] retrospective approach.

[removed: A company's internal control over financial reporting includes those policies and procedures that (1) pertain] to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the [removed: company's] [added: company’s] assets that could have a material effect on the financial statements.

Because of its inherent [removed: limitations;] [added: limitations,] internal control over financial reporting may not prevent or detect misstatements.

*Revenues [removed: - Refer] [added: -Refer] to [removed: Notes 1, 15 and 16] [added: Note 1] to the financial [removed: statements*][added: statement*]

[removed: *Critical] [added: Critical] Audit Matter [removed: Description*][added: Description]

The [removed: Company’s] [added: Company's] revenue is primarily derived from term-based or perpetual licensing of software and scoring products and solutions, and associated maintenance; [removed: software-as-a-service] [added: software-as-a service] (SaaS) subscription services; scoring and credit monitoring services for [removed: consumers;] [added: customers;] and professional services.

The [removed: Company’s] [added: Company's] contracts with customers often [removed: include] [added: includes] promises to transfer multiple products and services to a customer.

For contracts with customers that contain various combinations of products and services, the Company evaluates [removed: whether] [added: weather] the [removed: products] [added: product] or [removed: services] [added: service] are distinct.

Distinct [removed: products] [added: product] or services will be accounted for as separate performance obligations, while [removed: non-distinct] [added: non distinct] products or services are combined with others to form a single performance obligation.

[removed: | – | Obtained] [added: \-Obtained] and read the contract, including master agreements, renewal agreements, and other source documents that were part of the contract. [removed: |]

[removed: | – | Obtained] [added: \-Obtained] other contracts with the same customer that were entered into at or near the same time and evaluated management’s conclusion of whether two or more contracts for multiple products and services promised to a customer should be combined and accounted for as a single contract for revenue recognition. [removed: |]

[removed: | – | Confirmed] [added: \-Confirmed] the terms of the contract directly with the customer, including whether there are side agreements and terms not formally included in the contract that may impact the identification of performance obligations and revenue [removed: recognition. |][added: recognition and performed alternative procedures in the event of nonreplies.]

[removed: | – | Evaluated] [added: \-Evaluated] internal certification letters provided by the Company’s sales personnel to identify the existence of side agreements that may impact the identification of performance obligations and revenue recognition. [removed: |]

[removed: | – | Tested] [added: \-Tested] management’s identification of the performance obligations within the customer contract, including whether material rights that gave rise to a performance obligation were identified. [removed: |]

[removed: | – | Tested] [added: \-Tested] management’s estimation of variable consideration in the transaction price by evaluating the reasonableness of the inputs used in management’s estimates. [removed: |]

[removed: | – | Tested] [added: \-Tested] the accuracy and completeness of the data and factors used in management’s determination of the SSP for each performance obligation. [removed: |]

[removed: | – | Evaluated] [added: \-Evaluated] the consistency of the methodologies used to develop the SSP for each performance obligation. [removed: |]

| | [added: 2020 | | | |] 2019 | | | | 2018 | | |

| Cash and cash equivalents | $ | [removed: 106,426] [added: 157,394] | | | $ | [removed: 90,023] [added: 106,426] | |

| Accounts receivable, net | [removed: 297,427] [added: 334,180] | | | | [removed: 266,742] [added: 297,427] | | |

| Prepaid expenses and other current assets | [removed: 51,853] [added: 42,504] | | | | [removed: 39,624] [added: 51,853] | | |

| Total current assets | [removed: 455,706] [added: 534,078] | | | | [removed: 396,389] [added: 455,706] | | |

| Marketable securities | [removed: 20,222] [added: 25,513] | | | | [removed: 18,059] [added: 20,222] | | |

| Other investments | [removed: 1,643] [added: 1,060] | | | | [removed: 1,697] [added: 1,643] | | |

| Property and equipment, net | [removed: 53,027] [added: 46,419] | | | | [removed: 48,837] [added: 53,027] | | |

| Goodwill | [removed: 803,542] [added: 812,364] | | | | [removed: 800,890] [added: 803,542] | | |

| Intangible assets, net | [removed: 14,139] [added: 9,236] | | | | [removed: 14,536] [added: 14,139] | | |

| Deferred income taxes | [removed: 6,006] [added: 14,629] | | | | [removed: 13,805] [added: 6,006] | | |

| Other assets | [removed: 79,163] [added: 105,285] | | | | [removed: 36,254] [added: 79,163] | | |

| Total assets | $ | [removed: 1,433,448] [added: 1,606,240] | | | $ | [removed: 1,330,467] [added: 1,433,448] | |

| Accounts payable | $ | [removed: 23,118] [added: 23,033] | | | $ | [removed: 20,251] [added: 23,118] | |

| Accrued compensation and employee benefits | [removed: 106,240] [added: 117,952] | | | | [removed: 84,292] [added: 106,240] | | |

| Other accrued liabilities | [removed: 32,454] [added: 63,367] | | | | [removed: 31,025] [added: 32,454] | | |

| Deferred revenue | [removed: 111,016] [added: 115,159] | | | | [removed: 103,335] [added: 111,016] | | |

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain

| November 10, 2020 |

| | 2020 | | | | 2019 | | |

| Operating lease right-of-use assets | 57,656 | | | | — | | |

| Operating lease liabilities | 73,207 | | | | — | | |

| Restructuring and impairment charges | 45,029 | | | | — | | | | — | | |

| Repurchases of common stock | (675 | ) | | (7 | | ) | | — | | | | (235,216 | | ) | | — | | | | — | | | | (235,223 | | ) |

| Net income | — | | | — | | | | — | | | | — | | | | 236,411 | | | | — | | | | 236,411 | | |

| Balance at September 30, 2020 | 29,096 | | | $ | 291 | | | $ | 1,218,583 | | | $ | (2,997,856 | ) | | $ | 2,193,059 | | | $ | (82,995 | ) | | $ | 331,082 | |

| Non-cash operating lease costs | 20,011 | | | | — | | | | — | | |

| Impairment loss on operating lease assets | 28,016 | | | | — | | | | — | | |

| Gain on sale of equity investments | — | | | | — | | | | (10,000 | | ) |

| Distribution from equity investments | 55 | | | | — | | | | — | | |

As a result, the consolidated balance sheet as of September 30, 2020 is not comparable with that as of September 30, 2019.

See our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 filed with the SEC on November 8, 2019 for lease policies that were in effect in prior periods before adoption of Topic 842.

As the impact of the COVID-19 pandemic continues to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment.

These estimates and assumptions may change in future periods and will be recognized in the consolidated financial statements as new events occur and additional information becomes known.

To the extent our actual results differ materially from those estimates and assumptions, our future financial statements could be affected.

For more information, see Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K.

Years Ended September 30, 2020, 2019 and 2018

Years Ended September 30, 2020, 2019 and 2018

For fiscal 2017, we elected to proceed directly to the step one quantitative analysis for all of our reporting units.

Consequently, we did not perform a step one quantitative analysis and determined goodwill was not impaired for any of our reporting units for fiscal 2018, 2019 and 2020.

Years Ended September 30, 2020, 2019 and 2018

Years Ended September 30, 2020, 2019 and 2018

Years Ended September 30, 2020, 2019 and 2018

Years Ended September 30, 2020, 2019 and 2018

Years Ended September 30, 2020, 2019 and 2018

In February 2016, the FASB issued Topic 842, which requires the recognition of operating lease assets and lease liabilities on the balance sheet.

Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.

Under the new standard, disclosures are required to enable users of financial statements to assess the amount, timing and uncertainty of cash flows arising from leases.

In the first quarter of fiscal 2020, we adopted Topic 842 using the “Comparatives Under 840 Option” approach to transition.

In accordance with the standard, the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.

Topic 842 provided a package of practical expedients that allow an entity to not reassess (1) whether any expired or existing contracts contain a lease, (2) the lease classification of any expired or existing lease, and (3) initial direct costs for any existing leases.

We elected to apply the package of practical expedients, and did not elect the hindsight practical expedient in determining the lease term for existing leases as of October 1, 2019.

Adoption of Topic 842 did not result in the recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.

The most significant impact of adoption was the recognition of operating lease assets and operating lease liabilities of $89.8 million and $98.9 million, respectively, while our accounting for existing capital leases (now referred to as finance leases) remained substantially unchanged.

We expect the impact of adoption to be immaterial to our consolidated statements of income and comprehensive income and consolidated statements of cash flows on an ongoing basis.

As part of our adoption, we also modified our control procedures and processes, none of which materially affected our internal control over financial reporting.

See Note 17 for additional information regarding our accounting policy for leases and additional disclosures.

| | |

| --- | --- |

| November 8, 2019 |

| | | | | | As Adjusted | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | As Adjusted | | | | As Adjusted | | |

| Restructuring and acquisition-related | — | | | | — | | | | 4,471 | | |

| Balance at September 30, 2016 (As Adjusted) | 30,935 | | | $ | 309 | | | $ | 1,188,913 | | | $ | (2,136,760 | ) | | $ | 1,505,866 | | | $ | (77,012 | ) | | $ | 481,316 | |

| Repurchases of common stock | (1,466 | ) | | (15 | | ) | | — | | | | (193,275 | | ) | | — | | | | — | | | | (193,290 | | ) |

| Dividends paid | — | | | — | | | | — | | | | — | | | | (1,238 | | ) | | — | | | | (1,238 | | ) |

| Net income | — | | | — | | | | — | | | | — | | | | 133,414 | | | | — | | | | 133,414 | | |

| Gain on sale of cost-method investment | — | | | | (10,000 | | ) | | — | | |

| Purchase of cost-method investment | — | | | | — | | | | (777 | | ) |

| Dividends paid | — | | | | — | | | | (1,238 | | ) |

| Unsettled repurchases of common stock | $ | — | | | $ | — | | | $ | 5,661 | |

Effective October 1, 2018, we adopted ASU No. 2014-09, “*Revenue from Contracts with Customers (Topic 606)*” (“ASU 2014-09”) using the full retrospective method.

In connection with this adoption, the results and related disclosures for the comparative fiscal 2018 and 2017 presented in this Form 10-K were adjusted to be presented as if ASU 2014‑09 had been in effect during such fiscal years.

See “New Accounting Pronouncements” and “Revenue Recognition” below.

All amounts and disclosures set forth in this Form 10-K reflect these changes.

Consequently, we did not recognize any goodwill impairment charges in fiscal 2019, 2018 or 2017.

On December 22, 2017, the Tax Act was enacted by the U.S. government.

The Tax Act makes broad and complex changes to the U.S. tax code that affect our fiscal year ended September 30, 2019, including but not limited to: (1) creating the base erosion anti-abuse tax measure that taxes certain payments between a U.S. corporation and its foreign subsidiaries; (2) creating a new provision designed to tax global intangible low-tax income of foreign subsidiaries; and (3) a foreign derived intangible income.

We have estimated the impact of these changes in our income tax provision for 2019.

In May 2014, the FASB issued ASU 2014-09.

The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from the contracts with customers.

The guidance permits two methods of adoption: full retrospective method or modified retrospective method.

We adopted ASU 2014-09 in the first quarter of our fiscal 2019 using the full retrospective method which required us to adjust each prior reporting period presented.

This adoption primarily affected timing of revenue recognition of license revenue on term licenses and transactional revenue on guaranteed minimum fees related to our on-premises software products.

Under the new standard, we recognize revenue when control of the license is transferred to the customer, rather than at the date payments become due and payable when there are extended payment terms, or ratably over the term of the contract as required under the previous standard.

In addition, revenue attributable to a software license renewal is recognized at the beginning of the applicable renewal period rather than at the signing of the renewal agreement as required under the previous standard.

Additionally, under the new standard, when we enter into noncancellable contracts that provide unconditional rights to payment from our customers for services we have not yet completed or services we will provide in the near future, we present receivables—our unconditional rights to payments—and deferred revenues on a gross basis, rather than on a net basis.

Finally, under the new standard we capitalize and amortize contract acquisition costs such as commissions paid for SaaS cloud services contracts in excess of one year.

Following the adoption of ASU 2014-09, the revenue recognition for our other sales arrangements remained materially consistent with our historical practice.

Upon adoption of ASU 2014-09, we applied the standard’s practical expedients that permit the omission of prior-period information about our performance obligations.

Adoption of the standard impacted our previously reported results as follows:

Consolidated Balance Sheets

| | September 30, 2018 | | | | | | | | | | |

| | As Previously Reported | | | | Adjustment | | | | As Adjusted | | |

In addition, the disclosure controls and procedures [added: are designed to] ensure that information required to be disclosed is accumulated and communicated to management, including the CEO and CFO, allowing timely decisions regarding required disclosure.

[removed: There was no other] [added: No] change in FICO’s internal control over financial reporting was identified in connection with the evaluation required by [removed: Rules13a-15 or 15d-15] [added: Rule 13a-15(d)] of the Exchange Act that occurred during the year ended September 30, [removed: 2019,] [added: 2020,] that has materially affected, or is reasonably likely to materially affect, FICO’s internal control over financial reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in [removed: Rule] [added: Rules] 13a-15(f) and 15d-15(f) under the Exchange Act.

Under the supervision and with the participation of management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, [removed: 2019] [added: 2020] based on the guidelines established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation management has concluded that our internal control over financial reporting was effective as of September 30, [removed: 2019.][added: 2020.]

Deloitte & Touche LLP, an independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of September 30, [removed: 2019,] [added: 2020,] as stated in their attestation report included in Part II, Item 8 of this Annual Report on Form 10-K.

Beginning on October 1, 2018, we implemented ASU 2014-09 and, as a result, we also implemented changes to our controls related to revenue.

These included the development of new policies, enhanced contract review processes, and other ongoing monitoring activities.

These controls were designed to provide assurance at a reasonable level of the fair presentation of our consolidated financial statements and related disclosures.

The required information regarding our Directors is incorporated by reference from the information under the caption “Our Director Nominees” in our [removed: definitive proxy statement for the Annual Meeting of Stockholders] [added: 2021 Proxy Statement] to be [removed: held on March 4,] [added: filed with the SEC within 120 days after September 30,] 2020.

| William J. Lansing | January 2012-present, Chief Executive Officer and member of the Board of Directors of the Company. February 2009-November 2010, Chief Executive Offer and President, Infospace, Inc. 2004-2007, Chief Executive Officer and President, ValueVision Media, Inc. 2001-2003, General Partner, General Atlantic LLC. 2000-2001, Chief Executive Officer, NBC Internet, Inc. 1998-2000, President/Chief Executive Officer, Fingerhut Companies, Inc. 1996-1998, Vice President, Corporate Business Development, General Electric Company. 1996, Executive Vice President, Chief Operating Office, Prodigy, Inc. 1986-1995, various positions, McKinsey & Company, Inc. | [removed: 61] [added: 62] |

| Michael I. McLaughlin | August 2019-present, Executive Vice President, Chief Financial Officer of the Company. May 2007-August 2019, Managing Director, Head of Technology Corporate Finance of Morgan Stanley. January 2004-May 2007, Managing Director, Head of Enterprise Systems and Supply Chain Coverage of BofA Securities. January 2001-January 2004, Executive Director, Head of Enterprise Hardware and Supply Chain of UBS Investment Bank. 1997-2001, founder and co-Chief Executive Officer of Stampede Ventures, LLC. 1993-1997, Vice President of Montgomery Securities. 1990-1993, Associate of The First Boston Corporation. 1986-1988, Analyst of The First Boston Corporation. | [removed: 55] [added: 56] |

| Richard S. Deal | November 2015-present, Executive Vice President, Chief Human Resources Officer of the Company. August 2007-November 2015, Senior Vice President, Chief Human Resources Officer of the Company. January 2001-August 2007, Vice President, Human Resources of the Company. 1998-2001, Vice President, Human Resources, Arcadia Financial, Ltd. 1993-1998, managed broad range of human resources corporate and line consulting functions with U.S. Bancorp. | [removed: 52] [added: 53] |

| Michael S. Leonard | November 2011-present, Vice President, Chief Accounting Officer of the Company. November 2007-November 2011, Senior Director, Finance of the Company. July 2000-November 2007, Director, Finance of the Company. 1998-2000, Controller of Natural Alternatives International, Inc. 1994-1998, various audit staff positions at KPMG LLP. | [removed: 55] [added: 56] |

| Mark R. Scadina | February 2009-present, Executive Vice President and General Counsel and Corporate Secretary of the Company. June 2007-February 2009, Senior Vice President and General Counsel and Corporate Secretary of the Company. 2003-2007, various senior positions including Executive Vice President, General Counsel and Corporate Secretary, Liberate Technologies, Inc. 1999-2003, various leadership positions including Vice President and General Counsel, Intertrust Technologies Corporation. 1994-1999, Associate, Pennie and Edmonds LLP. | [removed: 50] [added: 51] |

| James M. Wehmann | April 2012-present, Executive Vice President, Scores of the Company. November 2003-March 2012, Vice President/Senior Vice President, Global Marketing, Digital River, Inc. March 2002-June 2003, Vice President, Marketing, Brylane, Inc. September 2000-March 2002, Senior Vice President, Marketing, New Customer Acquisition, Bank One. 1993-2000, various roles, including Senior Vice President, Marketing, Fingerhut Companies, Inc. | [removed: 54] [added: 55] |

| Claus Moldt | August 2019-present, Executive Vice President, Chief Technology Officer of the Company. March 2016-August 2019, Chief Information Officer of the Company. June 2013-March 2016, Chief Executive Officer of mPath. October 2006-June 2013, Global Chief Information Officer and Senior Vice President of Technical Operations of Salesforce.com. November 2002-September 2006, Senior Director Operations Infrastructure and Project Delivery of eBay. May 2001-May 2002, Manager Database and System Administration, LoudCloud/Opsware. | [removed: 56] [added: 57] |

The required information regarding compliance with Section 16(a) of the Securities Exchange Act is incorporated by reference from the information in our [removed: definitive proxy statement for the Annual Meeting of Stockholders] [added: 2021 Proxy Statement] to be [removed: held on March 4,] [added: filed with the SEC within 120 days after September 30,] 2020.

FICO also has a Code of Conduct and Business Ethics applicable to all directors, officers and employees, which is also available at the [removed: web site] [added: website] cited above.

The required information regarding the Company’s audit committee is incorporated by reference from the information under the caption “Board Committees” in our [removed: definitive proxy statement for the Annual Meeting of Stockholders] [added: 2021 Proxy Statement] to be [removed: held on March 4,] [added: filed with the SEC within 120 days after September 30,] 2020.

| Thomas A. Bowers | August 2020-present, Executive Vice President, Corporate Strategy of the Company. September 2019-August 2020, Vice President, Business Consulting of the Company. April 2018-September 2019, Founder and Managing Partner, M Cubed Development, LLC. August 2012-March 2018, Executive Vice President, American Savings Bank. 1987-2012, Senior partner and various positions, McKinsey & Company, Inc. | 65 |

| Stephanie Covert | October 2020-present, Executive Vice President, Sales & Marketing of the Company. June 2016-October 2020, Vice President, Global Sales Operations of the Company. December 2015-May 2016, Vice President, Solution Success of the Company. June 2015-December 2015, Senior Director, Solution Success, Americas & EMEA of the Company. May 2014-June 2015, Senior Director, Solution Success, Americas of the Company. March 2013-May 2014, Senior Director, Sales Operations, Apttus. March 2012-March 2013, Sales Operations Director, Oracle Corporation. June 2007-March 2012, various positions, RightNow Technologies, Inc. | 41 |

| | | |

| Wayne Huyard | November 2014-present, Executive Vice President of Sales, Services, and Marketing of the Company. January 2014-November 2014, Consultant to the Chief Executive Officer of the Company. September 2012-November 2014, Chief Executive Officer and President, TEXbase, Inc. March 2012-May 2012, General Manager of RightNow Technologies, Oracle Corporation. July 2010-February 2012, President and Chief Operating Officer, RightNow Technologies, Inc. May 2006-May 2010, Operations and Advisory Group Executive Leadership Team Member, Cerberus Capital Management L.P. | 60 |

The information required by this Item is incorporated by reference from the information under the captions “Director Compensation for Fiscal [removed: 2019”] [added: 2020”] and “Executive Compensation” in our [removed: definitive proxy statement for the Annual Meeting of Stockholders] [added: 2021 Proxy Statement] to be [removed: held on March 4,] [added: filed with the SEC within 120 days after September 30,] 2020.

The information required by this Item is incorporated by reference from the information under the caption “Security Ownership of Certain Beneficial Owners and Management” and “Executive Compensation Plan Information” in our [removed: definitive proxy statement for the Annual Meeting of Stockholders] [added: 2021 Proxy Statement] to be [removed: held on March 4,] [added: filed with the SEC within 120 days after September 30,] 2020.

The information required by this Item is incorporated by reference from the information under the caption “Certain Relationships and Related Persons Transactions” in our [removed: definitive proxy statement for the Annual Meeting of Stockholders] [added: 2021 Proxy Statement] to be [removed: held on March 4,] [added: filed with the SEC within 120 days after September 30,] 2020.

The information required by this Item is incorporated by reference from the information under the caption “Ratification of Independent Registered Public Accounting Firm” in our [removed: definitive proxy statement for the Annual Meeting of Stockholders] [added: 2021 Proxy Statement] to be [removed: held on March 4,] [added: filed with the SEC within 120 days after September 30,] 2020.

| [Report of independent registered public accounting [removed: firm](#sF90A21287FE25A39BEF357CC2A7EC728)] [added: firm](#s63CCAC5A446D5B1E9BEFD2AA1DE147F4)] | [removed: [50](#sF90A21287FE25A39BEF357CC2A7EC728)] [added: [52](#s63CCAC5A446D5B1E9BEFD2AA1DE147F4)] |

| [Consolidated balance sheets as of September 30, [removed: 2019] [added: 2020] and [removed: 2018](#s6290042BD3AD5804A6BC02F173B9BCF7)] [added: 2019](#s113CF65C4D0656139F18D7C685594A4A)] | [removed: [53](#s6290042BD3AD5804A6BC02F173B9BCF7)] [added: [55](#s113CF65C4D0656139F18D7C685594A4A)] |

| [Consolidated statements of income and comprehensive income for the years ended September 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#sD69A67C7B74A52D0AB1716D57684643F)] [added: 2018](#sC0B7368865C75DBEB3977F5741D471F7)] | [removed: [54](#sD69A67C7B74A52D0AB1716D57684643F)] [added: [56](#sC0B7368865C75DBEB3977F5741D471F7)] |

| [Consolidated statements of stockholders’ equity for the years ended September 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#s3284A9FE376751D78F44DD127612FE29)] [added: 2018](#s7DE887F583265F2B80147291A5AB2AD4)] | [removed: [55](#s3284A9FE376751D78F44DD127612FE29)] [added: [57](#s7DE887F583265F2B80147291A5AB2AD4)] |

| [Consolidated statements of cash flows for the years ended September 30, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#sF50F583962F45A3BB256F77CA7D9FBCA)] [added: 2018](#sC40DB68CB77E5649BEACD31FB547D5A9)] | [removed: [56](#sF50F583962F45A3BB256F77CA7D9FBCA)] [added: [58](#sC40DB68CB77E5649BEACD31FB547D5A9)] |

| [Notes to consolidated financial [removed: statements](#s402A2545E5AB5195BD0D65C9EE54007E)] [added: statements](#s8BD93B09FF59577E975AFAA57E6A808E)] | [removed: [57](#s402A2545E5AB5195BD0D65C9EE54007E)] [added: [59](#s8BD93B09FF59577E975AFAA57E6A808E)] |

| 3.1 | [Bylaws of Fair Isaac Corporation. (Incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q for the quarter ended December 31, [removed: 2009 (file no. 001-11689).)](http://www.sec.gov/Archives/edgar/data/814547/000095012310009970/c56194exv3w1.htm)] [added: 2009.)](http://www.sec.gov/Archives/edgar/data/814547/000095012310009970/c56194exv3w1.htm)] |

| 3.2 | [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, [removed: 2009 (file no. 001-11689).)](http://www.sec.gov/Archives/edgar/data/814547/000095012310009970/c56194exv3w2.htm)] [added: 2009.)](http://www.sec.gov/Archives/edgar/data/814547/000095012310009970/c56194exv3w2.htm)] |

| 10.1 | [Form of Note Purchase Agreement, dated May 7, 2008, between Fair Isaac Corporation and the Purchasers listed on Schedule A thereto, which includes as Exhibits 1-4 the form of Senior Note for each of Series A, B, C and D (excluding certain schedules and exhibits thereto, which Fair Isaac Corporation agrees to furnish to the Securities and Exchange Commission upon request). (Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed on May 13, [removed: 2008 (file no. 001-11689).)](http://www.sec.gov/Archives/edgar/data/814547/000095013708007323/c26674exv10w1.htm)] [added: 2008.)](http://www.sec.gov/Archives/edgar/data/814547/000095013708007323/c26674exv10w1.htm)] |

| 10.2 | [Form of Note Purchase Agreement, dated July 14, 2010, between Fair Isaac Corporation and the Purchasers listed on Schedule A thereto, which includes as Exhibits 1-4 the form of Senior Note for each of Series E, F, G and H (excluding certain schedules and exhibits thereto, which Fair Isaac Corporation agrees to furnish to the Securities and Exchange Commission upon request). (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on July 19, [removed: 2010 (file no. 001-11689).)](http://www.sec.gov/Archives/edgar/data/814547/000095012310066231/c59140exv10w1.htm)] [added: 2010.)](http://www.sec.gov/Archives/edgar/data/814547/000095012310066231/c59140exv10w1.htm)] |

| 10.3 | [Indenture, dated as of May 8, 2018, by and between the Company and U.S. Bank National Association, as trustee, which includes the form of 5.25% Senior Notes due 2026. (Incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on May 8, [removed: 2018 (file no. 001-11689).)](http://www.sec.gov/Archives/edgar/data/814547/000119312518156031/d560543dex41.htm)] [added: 2018.)](http://www.sec.gov/Archives/edgar/data/814547/000119312518156031/d560543dex41.htm)] |

| [removed: 10.4] [added: 10.5] | [Fair Isaac Corporation 1992 Long-Term Incentive Plan, as amended effective May 4, 2010. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended June 30, [removed: 2010 (file no. 001‑11689).)] [added: 2010.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000095012310074342/c58327exv10w1.htm) |

| [removed: 10.5] [added: 10.6] | [Form of Non-Qualified Stock Option Agreement under 1992 Long-term Incentive Plan, as amended effective July 18, 2007. (Incorporated by reference to Exhibit 10.42 to the Company’s Form 10-Q for the quarter ended December 31, [removed: 2007 (file no. 001-11689).)] [added: 2007.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000095013708001822/c23579exv10w42.htm) |

| [removed: 10.6] [added: 10.7] | [Form of Nonstatutory Stock Option Agreement for Initial Grants to Non-Employee Directors under 1992 Long-term Incentive Plan. (Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended December 31, [removed: 2008 (file no. 001-11689).)] [added: 2008.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000095013709000848/c49207exv10w3.htm) |

| [removed: 10.7] [added: 10.8] | [Form of Restricted Stock Unit Agreement under 1992 Long-term Incentive Plan, as amended effective July 18, 2007. (Incorporated by reference to Exhibit 10.49 to the Company’s Form 10-Q for the quarter ended December 31, [removed: 2007 (file no. 001-11689).)] [added: 2007.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000095013708001822/c23579exv10w49.htm) |

| [removed: 10.8] [added: 10.9] | [Form of Restricted Stock Agreement under 1992 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.43 to the Company’s Form 10-K for the [removed: period] [added: fiscal year] ended September 30, [removed: 2006 (file no. 001-11689).)] [added: 2006.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000095013706013419/c10450exv10w43.htm) |

| [removed: 10.9] [added: 10.10] | [removed: [Fair,] [added: [Fair] Isaac Supplemental Retirement and Savings Plan, as amended and restated effective January 1, 2009. (Incorporated by reference to Exhibit 10.10 of the Company’s Form 10-K for the fiscal year ended September 30, [removed: 2008 (file no. 001-11689).)] [added: 2008.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000095013708014107/c47904exv10w10.htm) |

| [removed: 10.10] [added: 10.11] | [Form of Indemnity Agreement entered into by the Company with the Company’s directors and executive officers. (Incorporated by reference to Exhibit 10.49 to the Company’s Form 10-K for the fiscal year ended September 30, [removed: 2002 (file no. 001-11689).)] [added: 2002.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000093639202001464/a86033exv10w49.txt) |

| [removed: 10.11] [added: 10.12] | [Form of Management Agreement entered into with each of the Company’s executive officers. (Incorporated by reference to Exhibit 10.4 to the Company’s Form 8-K filed on February 10, [removed: 2012 (file no. 001-11689).)] [added: 2012.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512052923/d298825dex104.htm) |

| [removed: 10.12] [added: 10.13] | [Form of Amendment to Management Agreement entered into with certain of the Company’s executive officers. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended December 31, [removed: 2014 (file no. 001-11689).)] [added: 2014.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454715000003/ex-10210xqq12015.htm) |

| [removed: 10.13] [added: 10.14] | [Form of Amendment to Management Agreement entered into with each of the Company’s executive officers. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended June 30, [removed: 2016 (file no. 001-11689).)](http://www.sec.gov/Archives/edgar/data/814547/000081454716000031/ex-10x110xqq32016.htm)] [added: 2016.)](http://www.sec.gov/Archives/edgar/data/814547/000081454716000031/ex-10x110xqq32016.htm)] |

| [removed: 10.14] [added: 10.15] | [Offer Letter entered into on May 29, 2007 with Mark R. Scadina. (Incorporated by reference to Exhibit 10.61 to the Company’s Form 10-K for the fiscal year ended September 30, [removed: 2008 (file no. 001-11689).)] [added: 2008.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000095013708014107/c47904exv10w61.htm) |

| [removed: 10.15] [added: 10.16] | [Letter Agreement dated January 24, 2012 by and between the Company and William J. Lansing. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on January 26, [removed: 2012 (file no. 001-11689).)] [added: 2012.)] (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512025268/d287911dex102.htm) |

| [removed: 10.16] [added: 10.17] | [Letter Agreement dated February 6, 2012 by and between the Company and [removed: Michael Pung.] [added: Mark Scadina.] (Incorporated by reference to Exhibit [removed: 10.1] [added: 10.3] to the Company’s Form 8-K filed on February 10, [removed: 2012 (file no. 001-11689).) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512052923/d298825dex101.htm)] [added: 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512052923/d298825dex103.htm)] |

| [removed: 10.17] [added: 10.54] | [Letter Agreement dated [removed: February 6, 2012] [added: August 3, 2019] by and between the Company and [removed: Mark Scadina.] [added: Michael I. McLaughlin.] (Incorporated by reference to Exhibit [removed: 10.3] [added: 10.1] to the Company’s Form 8-K filed on [removed: February 10, 2012 (file no. 001-11689).) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512052923/d298825dex103.htm)] [added: June 24, 2019.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312519179399/d745155d8k.htm)] |