Fair Isaac (FICO) 10-K risk factor changes: FY2022 vs FY2021

[removed: The] [added: The] duration of [removed: these effects,] [added: the negative effects of the COVID-19 pandemic,] and the extent to which they will impact our future revenues, results of operations and overall financial performance, remain uncertain.

The situation surrounding the COVID-19 pandemic [removed: is constantly evolving and both the short-term] [added: continues to evolve] and [removed: long-term] [added: its] effects remain unknown.

We may not be successful in executing [removed: our] [added: the] business [removed: strategy,] [added: strategy for our Software segment,] which could cause our growth prospects and results of operations to suffer.

We have increasingly focused our [added: Software segment’s] business strategy on investing significant development resources to enable substantially all of our software to run on FICO® Platform, our modular software offering designed to [removed: support] [added: enable] advanced analytics and decisioning use cases.

[removed: Our] [added: This] business strategy is designed to enable us to increase our business by selling multiple connectable and extensible 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.

As we continue to pursue [removed: our] [added: this] business strategy, we may experience volatility in our [added: Software segment’s] revenues and operating results caused by various factors, including differences in revenue recognition treatment between our cloud-based offerings and on-premises software licenses, the timing of investments and other expenditures necessary to develop and operate our cloud-based offerings, and the adoption of new sales and delivery methods.

If [removed: our] [added: this] business strategy is not successful, we may not be able to grow our [added: Software segment’s] business, growth may occur more slowly than we anticipate, or [removed: our] revenues and profits may decline.

During fiscal [removed: 2021, 89%] [added: 2022, 90%] of our revenues were derived from sales of products and services to the banking industry.

The potential for future stress and disruptions, including in connection with the [removed: COVID-19 pandemic,] [added: conflict between Russia and Ukraine, rising inflation and rising interest rates,] presents considerable risks to our businesses and operations.

While the rate of account growth in the U.S. [removed: bankcard] [added: banking] industry has been slow and many of our large institutional customers have consolidated in recent years, we have generated most of our revenue growth [removed: from our bankcard-related scoring and account management businesses] [added: in the banking industry] by selling and cross-selling our products and services to large banks and other credit issuers.

[removed: As] [added: If] the banking industry continues to experience contraction in the number of participating institutions, we may have fewer opportunities for revenue growth due to reduced or changing demand for our products and services that support customer acquisition programs of our customers.

While we are attempting to expand our sales [removed: of consumer credit and 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.

Most of our customers are relatively large enterprises, such as banks, credit card issuers, insurers, retailers, telecommunications providers, automotive [removed: companies,] [added: lenders, consumer reporting agencies,] public agencies, and organizations in other industries.

In addition, the U.S. and other key international economies are experiencing and have experienced in the past [removed: a downturn] [added: downturns] in which economic activity was impacted by falling demand for a variety of goods and services, [added: increased volatility of interest rates, elevated rates of inflation,] 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, whether arising in connection with the current COVID-19 pandemic or otherwise,] [added: disruption] could result in a decline in the [added: sales of new products to our customers and the] volume of transactions that we execute for [removed: our] [added: existing] customers.

We also derive a substantial portion of our [added: Scores segment] revenues and operating income from our contracts with the three major consumer reporting agencies in the U.S., Experian, TransUnion and Equifax, and other parties that distribute our products to certain markets.

A significant portion of our revenues in our Scores segment is attributable to the U.S. mortgage market, which includes, for [removed: conforming] mortgages [removed: in that market, a requirement of] [added: eligible for purchase by] The Federal National Mortgage Association (“Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“Freddie [removed: Mac”)] [added: Mac”), a requirement by those enterprises] that U.S. lenders provide FICO® Scores for each mortgage delivered to them.

If [removed: Fannie Mae and Freddie Mac approve] other credit score models [added: are approved] for use [removed: by them,] [added: with mortgages delivered to Fannie Mae and Freddie Mac,] or [removed: do not approve] the FICO Score [added: is not approved] for continued use [removed: by them,] [added: with those mortgages,] it could have a material adverse effect on our revenues, results of operations and stock price.

We expect [removed: that part of the] [added: our future] growth [removed: that we seek] to [removed: achieve through our business strategy will be derived from] [added: depend, in part, on] the sale of products and service solutions in industries and markets we do not currently serve.

If we fail to penetrate these industries and markets to the degree we [removed: anticipate utilizing our business strategy,] [added: anticipate,] or if we fail to develop additional distribution channels, we may not be able to grow our business, growth may occur more slowly than we anticipate, or our revenues and profits may decline.

In the past, we have experienced delays while developing and introducing new products and product enhancements, primarily due to difficulties developing models, acquiring data, and adapting to particular [added: software] operating environments [removed: or] [added: and] certain client or other systems.

For example, Experian, TransUnion and Equifax have formed an alliance that [removed: has developed] [added: is selling] a credit scoring product competitive with our products.

Our competitors may be able to sell [added: existing or new] products competitive to ours at lower prices individually or as part of integrated suites of several related products.

This ability may cause our customers to purchase products that directly compete with our products from our [removed: competitors.][added: competitors, which could decrease our product sales and market share.]

Price reductions by our competitors could [added: pressure us to reduce our product prices in a manner that] negatively [removed: impact] [added: impacts] our margins and could also harm our ability to obtain new long-term contracts and renewals of existing long-term contracts on favorable terms.

Many of our products [removed: rely on distributors,] [added: are sold by distributors or partners,] and we intend to continue to market and distribute our products through [added: these] existing and future distributor [added: and partner] relationships.

For example, Experian, TransUnion and Equifax have developed a credit scoring product to compete directly with our products and are [removed: collectively] [added: actively] selling the product.

[removed: These and other] [added: Our] reengineering efforts may not be successful over the long term should we fail to reduce expenses at the anticipated level, [added: or] should we fail to increase revenues to anticipated levels or at [removed: all, or should productivity decline or employees’ ability to collaborate fall as a result of the Remote Work Policy.][added: all.]

[removed: Divestitures] [added: These divestitures] involve risks, including:

- [removed: disposing of businesses or assets at a price or on] [added: divestiture] terms that [removed: are less favorable than we had anticipated, or with] [added: contain potential future] purchase price adjustments or the exclusion of assets or liabilities that must be divested, managed or run off separately;

- the retention of contingent liabilities [added: and the possibility that we will become subject to third-party claims] related to the divested business.

We have [removed: acquired] [added: acquired,] and [removed: expect to continue to acquire] [added: may in the future acquire,] companies, businesses, products, services and technologies.

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 [removed: outside third parties, including] technically sophisticated and well-resourced [removed: bad actors] [added: outside third parties, among others,] attempting to access or steal the data we store.

We may be exposed to additional cybersecurity threats as we migrate our [added: software solutions and] data from our legacy systems to cloud-based solutions.

Our ability to provide reliable [removed: service in] [added: products and services to] our [removed: businesses] [added: customers] depends on the efficient and uninterrupted operation of our data centers, information technology and communication systems, and increasingly those of our external service [removed: providers, including Amazon Web Services.][added: providers.]

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

[removed: Although we have taken] [added: Any] steps [removed: to prevent system failures and] [added: that] we [added: or our external service providers] have [removed: installed back-up systems and procedures] [added: taken] to prevent or reduce [removed: disruption, such steps] [added: disruption] may not be sufficient to prevent an interruption of services and [removed: our] disaster recovery planning may not account for all eventualities.

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

The failure of the value of our stock to appreciate may adversely affect our ability to use equity and equity-based incentive plans to attract and retain personnel, and may require us to use alternative [removed: and more expensive] forms of compensation for this purpose.

Our business requires that we develop or obtain a reliable source of sufficient amounts of current and statistically relevant data to analyze transactions and update [added: some of] our products.

We are subject to significant competition in the markets in which we operate, and our products and pricing strategies, and those of our competitors, could decrease our product sales and market share.

As a result of these reviews, we have made decisions to divest certain products and lines of business, and we may do so again in the future.

- failure to effectively transfer liabilities, contracts, facilities and employees to a purchaser;

In addition, the military conflict between Russia and Ukraine could result in cyberattacks that could directly or indirectly impact us, including retaliatory acts of cyberwarfare from Russia against U.S. companies, or the potential proliferation of malware from the conflict into systems unrelated to the conflict.

Any disruption of or interference with our use of data centers, information technology or communication systems of our external service providers would adversely affect our operations and our business.

The working arrangements for our employees differ from the arrangements before the pandemic.

For example, we have implemented a Remote Work Policy and a Hybrid Work Location Policy, which are applicable depending on the location and position of the employee.

Should productivity decline or our employees’ ability to collaborate fall as a result of our Remote Work Policy, or if employees are unsatisfied with our Hybrid Work Location Policy and leave our company, our business could suffer.

If this were to happen, our development of new products, might become less effective.

For example, the GDPR in the E.U. and the U.K. imposes strict obligations and restrictions on the collection and use of E.U. and U.K. personal data, and requires the implementation of certain approved safeguards for any cross-border transfers of such data.

The E.U. and the U.K. each have issued new standard contractual clauses (“SCCs”) as an approved safeguard for the transfer of E.U. and U.K. personal data along with guidance imposing further obligations on controllers and processors that rely on SCCs for such cross-border transfers, including carrying out an appropriate data transfer impact assessment to evaluate whether adequate protection will be afforded to the data in the destination country.

Our implementation of the new SCCs for affected data flows may involve additional compliance costs associated with performing any necessary assessments, engaging in contract negotiations with third parties, and/or (if appropriate) localizing certain data processing activities.

For example, Virginia, Utah, Connecticut, and Colorado have passed consumer privacy laws that become effective in 2023.

In addition, there has been an increased focus on laws and regulations related to our business and the business of our customers, including by the current U.S. presidential administration, the U.S. Congress, and U.S. regulators, including the CFPB, relating to policy concerns with regard to the operation of consumer reporting agencies, the use and accuracy of credit data, the use of credit scores, algorithm accountability and transparency, and fair lending.

The European Commission has also released draft proposed regulations (i.e., the EU AI Act) that would establish requirements for the provision and use of products that leverage artificial intelligence, machine learning, and similar analytic and statistical modeling technologies, including credit scoring.

The EU AI Act is expected to be finalized in 2024 or 2025.

We expect there will continue to be an increased focus on laws and regulations related to our business and/or the business of our clients, including with regard to the operation of consumer reporting agencies, the collection, use, accuracy, correction and sharing of personal information, credit scoring, the use of artificial intelligence and machine learning, and algorithmic accountability and fair lending.

Various factors contribute to the uncertain economic environment, including the conflict between Russia and Ukraine, the level and volatility of interest rates, high inflation, the continuing effects of the COVID-19 pandemic, an actual recession or fears of a recession, trade policies and tariffs, geopolitical tensions, Brexit, the U.K. withdrawal from the E.U., and political and governmental leadership changes in the U.K. and certain E.U. countries.

- geopolitical instability, terrorism, and war, including the conflict between Ukraine and Russia;

Substantial movements in foreign exchange rates relative to the dollar could adversely impact our cash flows, results of operations and financial position.

We experience difficulty in forecasting our revenues accurately.

In our Scores segment, a majority of our revenues come from the sale of our Scores through partners.

We have limited visibility on those sales until we receive royalty reports from those partners at the end of each billing period.

Furthermore, the volume of our Scores sales depends heavily on macroeconomic conditions that are hard to forecast.

- the level and volatility of interest rates and the level of inflation;

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

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.

As a result of the COVID-19 pandemic, we temporarily closed the majority of our offices (including our corporate headquarters in the United States), but are in the process of re-opening them while extending our company-wide voluntary work from home policy until early January 2022 and allowing the majority of our workforce the flexibility to work remotely on an ongoing basis.

In addition, we continue to impose certain travel restrictions where applicable.

Both of these actions have disrupted how we operate our business.

Due in part to anticipated post-pandemic workforce patterns, in late fiscal 2020 and early fiscal 2021, we 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 impose or continue to impose requirements and restrictions related to COVID-19 that affect us, including a wide range of restrictions on our employees’, partners’ and customers’ physical movement to limit the spread of COVID-19.

We postponed, canceled or shifted certain of our customer, employee or industry events to virtual-only experiences and may decide 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.

COVID-19 has adversely affected certain segments and originations volume, which may impact future revenue.

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

Our product and pricing strategies may not be successful.

If our competitors introduce new products and pricing strategies, it could decrease our product sales and market share, or could pressure us to reduce our product prices in a manner that reduces our margins.

In addition, we may not be able to compete successfully against our competitors, and this inability could impair our capacity to sell our products.

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.

In September 2021, we further reduced our operating costs primarily through a reduction of headcount.

In addition, we have implemented a Remote Work Policy which allows a portion of our workforce to partially or fully work from home.

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

- finding a suitable purchaser;

In addition, the COVID-19 pandemic may cause increased cybersecurity risk, as cybercriminals attempt to capitalize from the disruption, including remote working arrangements.

The pandemic has also caused shutdowns to businesses and cities worldwide and has disrupted supply chains, business operations, travel, and consumer confidence.

We are subject to risks and uncertainties associated with the United Kingdom’s withdrawal from the European Union (“E.U.”), commonly referred to as “Brexit,” including implications for the free flow of labor and goods in the United Kingdom (“U.K.”) and the E.U. and other economic, financial, legal, tax and trade implications.

The post-Brexit relationship between the U.K. and the E.U. continues to evolve, which could cause disruptions to and create uncertainty surrounding our business in the U.K., including affecting our relationships with our existing and future customers, suppliers and employees, and could contribute to long-term instability in financial, stock and currency exchange markets, any of which could have an adverse effect on our business, financial results and operations.

Further, any continuing legal or economic disruptions resulting from Brexit may negatively impact our clients with operations in the U.K., which may cause them to reduce their spending budget on our products and services.

Foreign currency transaction gains and losses are not currently material to our cash flows, financial position or results of operations.

However, an increase in our foreign revenues could subject us to increased foreign currency transaction risks in the future.

For example, the U.K and E.U. GDPR impose, among other things, strict obligations and restrictions on the ability to collect, analyze and transfer U.K. and E.U. personal data, a requirement for prompt notice of data breaches in certain circumstances, and possible substantial fines for any violations (including possible fines for certain violations of up to the greater of 20 million Euros or 4% of total worldwide annual revenue under the E.U. GDPR and up to the greater of 17.5 million Pounds or 4% of annual global turnover under the U.K. GDPR).

A decision in July 2020 by the Court of Justice of the European Union (*i.e.*, Schrems II), called into question certain data transfer mechanisms between the E.U. and the U.S. In June 2021, the European Commission issued new standard contractual clauses (“SCCs”) governing cross-border data transfers and data exchanges among controllers and processors, which reflect more recent data protection laws, such as the GDPR, and account for the analysis in the Schrems II decision.

- failure to meet the expectations of market analysts;

- changes in recommendations by market analysts;

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) includes the following: a business overview that provides a high-level summary of our strategies and initiatives, highlights from fiscal year [removed: 2021] [added: 2022] and key performance metrics for our Software segment; a more detailed analysis of our results of operations; our capital resources and liquidity, which discusses key aspects of our statements of cash flows, changes in our balance sheets and our financial commitments; and a summary of our critical accounting [removed: policies and] estimates [removed: we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.][added: that involve a significant level of estimation uncertainty.]

In fiscal [removed: 2021,] [added: 2022,] our B2B scoring solutions, including the flagship FICO® Score, continued to be the standard measure of consumer credit risk in the U.S. [removed: In January 2020 we introduced] [added: We continued to promote adoption of] our most predictive scores, FICO® Score 10 and 10T.

We also [removed: created] [added: continued our rollout of] the FICO® Resilience Index, a complement to FICO Scores that identifies consumers who are more resilient to economic stress relative to other consumers within the same FICO Score bands.

During fiscal [removed: 2021,] [added: 2022,] we continued to advance our platform-first, cloud delivered strategy in our Software segment.

This led us to [removed: exit] [added: divert resources from] less strategic areas of our business in order to facilitate incremental investment in higher value, more strategic areas.

[removed: As part of this process,] [added: (*) During fiscal 2021,] we [removed: divested the non-platform-based Collections and Recovery (“C&R”) business,] sold all assets related to our cyber risk score operations, [removed: and] sold certain assets related to our Software [removed: operations] [added: segment] to an affiliated joint venture in [removed: China.][added: China, and divested our Collections and Recovery (“C&R”) business.]

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

During fiscal [removed: 2021,] [added: 2022,] we repurchased [removed: 1.9] [added: 2.7] million shares at a total repurchase price of [removed: $882.2 million.][added: $1.1 billion.]

As of September 30, [removed: 2021,] [added: 2022,] we had [removed: $173.2] [added: $62.6] million remaining under our [removed: current] [added: then-current] stock repurchase program.

Highlights from Fiscal [removed: Year 2021][added: 2022]

- Total [removed: GAAP] revenue was [removed: $1.32] [added: $1.4] billion during fiscal [removed: year 2021,] [added: 2022,] a [removed: 2%] [added: 5%] increase from fiscal [removed: year 2020.][added: 2021.]

- Total revenue for our Scores segment was [removed: $654.1] [added: $706.6] million during fiscal [removed: year 2021, a 24%] [added: 2022, an 8%] increase from fiscal [removed: year 2020.][added: 2021.]

- Annual Recurring Revenue for our Software segment as of September 30, [removed: 2021] [added: 2022] was [removed: $524.0] [added: $569.3] million, a [removed: 6%] [added: 9%] increase from September 30, [removed: 2020,] [added: 2021,] excluding divestitures.

- Dollar-Based Net Retention Rate for our Software segment during the fourth quarter of fiscal [removed: 2021] [added: 2022] was [removed: 106%,] [added: 107%,] excluding divestitures.

- Cash and cash equivalents [removed: was $195.4] [added: were $133.2] million as of September 30, [removed: 2021,] [added: 2022,] compared with [removed: $157.4] [added: $195.4] million as of September 30, [removed: 2020.][added: 2021.]

[removed: -] Operating [removed: income, which] [added: income during fiscal 2021] included [removed: $100.1 million] gains on product line asset sales and business [removed: divestiture, was $505.5 million during fiscal year 2021, a 71% increase from fiscal 2020.][added: divestiture of $100.1 million.]

- Net income was [removed: $392.1] [added: $373.5] million during fiscal [removed: year 2021,] [added: 2022,] a [removed: 66% increase] [added: 5% decrease] from fiscal [removed: 2020.][added: 2021.]

- Cash flow from operations was [removed: $423.8] [added: $509.5 million] during fiscal [removed: year 2021,] [added: 2022,] compared with [removed: $364.9] [added: $423.8] million [removed: generated] during [removed: the prior year.][added: fiscal 2021.]

- Total debt balance was [removed: $1.268] [added: $1.9] billion as of September 30, [removed: 2021,] [added: 2022,] compared with [removed: $845 million] [added: $1.3 billion] as of September 30, [removed: 2020.][added: 2021.]

Management regards ACV Bookings as an important indicator of future revenues, but they are not comparable to, nor are they a substitute for, an analysis [removed: of,] [added: of] our [removed: revenues.][added: revenues and other U.S. generally accepted accounting principles (*“*U.S. GAAP*”*) measures.]

We only include contracts with an initial term of at least 24 months and we exclude perpetual licenses and other [added: software] revenues that are non-recurring in nature.

The expected contract value equals the fixed amount — including guaranteed [removed: minimums] [added: minimums, if any] — stated in the contract, plus estimates of future usage-based fees.

This variability [removed: is primarily caused by] [added: can be] the [added: result of the] economic trends in our customers’ industries; individual performance of our customers relative to their competitors; and regulatory and other factors that affect the business environment in which our customers operate.

We disclose estimated revenue expected to be recognized in the future related to remaining performance obligations in Note [removed: 12] [added: 11] to the accompanying consolidated financial statements.

However, we believe ACV Bookings is a more meaningful measure of our business as it includes estimated revenues and future billings excluded from Note [removed: 12,] [added: 11,] such as usage-based fees and guaranteed minimums derived from our on-premises software licenses, among others.

| | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | | | | | [removed: 2021] [added: 2022 to 2021] | | | | | | [removed: 2020] [added: 2021 to 2020] | | | [added: | | | 2022 to 2021 | | | | | | 2021 to 2020 | | |]

| Total on-premises and SaaS software [removed: *] [added: (*)] | | | $ | [removed: 25.8] [added: 29.5] | | | | | $ | [removed: 28.9] [added: 25.8] | | | | | $ | [removed: 62.8] [added: 85.7] | | | | | $ | [removed: 58.3] [added: 62.8] | |

The [removed: amounts] [added: percentages] above exclude these divested product lines and businesses for all periods presented.

Accounting Standards Codification [removed: 606] [added: Topic 606, *Revenue from Contacts with Customers,*] requires us to recognize a significant portion of revenue from our on-premises software subscriptions at the point in time when the software is first made available to the customer, or at the beginning of the subscription term, despite the fact that our contracts typically call for billing these amounts ratably over the life of the subscription.

The following table summarizes our ARR [added: for on-premises and SaaS software] at each of the dates presented:

| | | | December 31, [removed: 2019] [added: 2020] | | | | | | March 31, [removed: 2020] [added: 2021] | | | | | | June 30, [removed: 2020] [added: 2021] | | | | | | September 30, [removed: 2020] [added: 2021] | | | | | | December 31, [removed: 2020] [added: 2021] | | | | | | March 31, [removed: 2021] [added: 2022] | | | | | | June 30, [removed: 2021] [added: 2022] | | | | | | September 30, [removed: 2021] [added: 2022] | | |

| ARR [removed: (*)] [added: (*)] | | | (In millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Non-Platform | | | [removed: 446.9] [added: 439.9] | | | | | | [removed: 450.3] [added: 437.1] | | | | | | [removed: 438.5] [added: 445.9] | | | | | | [removed: 443.6] [added: 448.8] | | | | | | [removed: 439.9] [added: 454.4] | | | | | | [removed: 437.1] [added: 453.6] | | | | | | [removed: 445.9] [added: 452.5] | | | | | | [removed: 448.8] [added: 455.1] | | |

| Platform | | | [removed: 8] [added: 11] | | % | | | | [removed: 8] [added: 12] | | % | | | | [removed: 9] [added: 13] | | % | | | | [removed: 10] [added: 14] | | % | | | | [removed: 11] [added: 17] | | % | | | | [removed: 12] [added: 18] | | % | | | | [removed: 13] [added: 19] | | % | | | | [removed: 14] [added: 20] | | % |

| Non-Platform | | | [removed: 92] [added: 89] | | % | | | | [removed: 92] [added: 88] | | % | | | | [removed: 91] [added: 87] | | % | | | | [removed: 90] [added: 86] | | % | | | | [removed: 89] [added: 83] | | % | | | | [removed: 88] [added: 82] | | % | | | | [removed: 87] [added: 81] | | % | | | | [removed: 86] [added: 80] | | % |

| Platform | | | [removed: 45] [added: 38] | | % | | | | [removed: 48] [added: 47] | | % | | | | [removed: 44] [added: 54] | | % | | | | [removed: 45] [added: 58] | | % | | | | [removed: 38] [added: 67] | | % | | | | [removed: 47] [added: 60] | | % | | | | [removed: 54] [added: 60] | | % | | | | [removed: 58] [added: 52] | | % |

| Non-Platform | | | [removed: 2] [added: (2)] | | % | | | | [removed: 5] [added: (3)] | | % | | | | [removed: (3)] [added: 2] | | % | | | | [removed: (2)] [added: 1] | | % | | | | [removed: (2)] [added: 3] | | % | | | | [removed: (3)] [added: 4] | | % | | | | [removed: 2] [added: 1] | | % | | | | 1 | | % |

() The FICO platform software is a set of interoperable [removed: services] [added: capabilities] which use software assets owned and/or governed by FICO for building solutions and [added: services] which conform to FICO architectural standards based on key elements of Cloud Native Computing design principles.

These standards encompass shared security context and [removed: pre-integration] [added: access] using FICO standard application programming [removed: interfaces for all services.][added: interfaces.]

To calculate DBNRR for any period, we compare the ARR at the end of the prior comparable quarter [removed: (base ARR)] [added: (“base ARR”)] to the ARR from that same cohort of customers at the end of the current quarter [removed: (retained ARR);] [added: (“retained ARR”);] we then divide the retained ARR by the base ARR to arrive at the DBNRR.

We also continued our transition from private data centers to external service providers to host our technology infrastructure.

Our business divestiture in the prior year had a 3% negative impact on total revenue for fiscal 2022.

- Operating income was $542.4 million during fiscal 2022, a 7% increase from fiscal 2021.

Net income during fiscal 2021 included pre-tax gains on product line asset sales and business divestiture of $100.1 million.

- Diluted EPS was $14.18 during fiscal 2022, a 6% increase from fiscal 2021.

Diluted EPS during fiscal 2021 included pre-tax gains on product line asset sales and business divestiture of $100.1 million in the aggregate, or $2.71 per share after tax.

- Total share repurchases during fiscal 2022 were $1.1 billion, compared with $882.2 million during fiscal 2021.

| | | | 2022 | | | | | | 2021 | | | | | | 2022 | | | | | | 2021 | | |

The amount for the year ended September 30, 2021 excludes these divested product lines and businesses.

| Platform () | | | $ | 55.1 | | | | | $ | 60.2 | | | | | $ | 67.7 | | | | | $ | 75.2 | | | | | $ | 92.2 | | | | | $ | 96.7 | | | | | $ | 108.4 | | | | | $ | 114.2 | |

| Total | | | $ | 495.0 | | | | | $ | 497.3 | | | | | $ | 513.6 | | | | | $ | 524.0 | | | | | $ | 546.6 | | | | | $ | 550.3 | | | | | $ | 560.9 | | | | | $ | 569.3 | |

| Total | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % |

| Total | | | 2 | | % | | | | 1 | | % | | | | 7 | | % | | | | 7 | | % | | | | 10 | | % | | | | 11 | | % | | | | 9 | | % | | | | 9 | | % |

The amounts and percentages above exclude these divested product lines and businesses at all dates presented.

| | | | December 31, 2020 | | | | | | March 31, 2021 | | | | | | June 30, 2021 | | | | | | September 30, 2021 | | | | | | December 31, 2021 | | | | | | March 31, 2022 | | | | | | June 30, 2022 | | | | | | September 30, 2022 | | |

| Total | | | 100 | | % | | | | 100 | | % | | | | 105 | | % | | | | 106 | | % | | | | 109 | | % | | | | 110 | | % | | | | 108 | | % | | | | 107 | | % |

The increase in business-to-business scores revenue was primarily attributable to a higher unit price across several business-to-business offerings and an increase in unsecured credit originations volume, partially offset by a decrease in mortgage originations volume.

| Total on-premises and SaaS software | | | $ | 564,751 | | | | | $ | 517,888 | | | | | $ | 584,576 | | | | | $ | 46,863 | | | | | (66,688) | | | | | | 9 | | % | | | | (11) | | % |

Software segment revenues increased $8.2 million in fiscal 2022 from 2021 due to a $46.9 million increase in on-premises and SaaS software revenue, partially offset by a $38.6 million decrease in services revenue.

The increase in our on-premises and SaaS software revenue was primarily attributable to an increase in point-in-time recognition due to a large license deal, as well as an increase in over-time recognition due to SaaS growth, partially offset by the C&R business divestiture in June 2021.

The decrease in services revenue was primarily attributable to the C&R business divestiture, as well as our strategic shift to emphasize software over services.

The total revenue impact from the divestiture was $45.3 million — a $22.3 million decrease in on-premises and SaaS software revenue and a $23.0 million decrease in professional services revenue.

The total revenue impact from the divestiture was $21.7 million.

The decreases in personnel and labor costs, and facilities and infrastructure costs were both largely driven by a decrease in our headcount as a result of the divestiture of our C&R business in June 2021, the fourth quarter of fiscal 2021 reduction in workforce, as well as reduced resource requirements associated with our decreased services revenue.

The increase in direct materials was primarily attributable to an increase in telecommunication costs to support FICO® Customer Communication Service revenue.

Cost of revenues as a percentage of revenues decreased to 22% during fiscal 2022 from 25% during fiscal 2021, primarily due to an increase in license revenue recognized at a point in time, increased sales of our higher-margin Scores products and decreased sales of lower-margin professional services.

The fiscal 2022 over 2021 decrease of $24.5 million in research and development expenses was primarily attributable to a $20.1 million decrease in personnel and labor costs as a result of decreased headcount, and a $3.0 million decrease in third-party cloud computing costs.

The fiscal 2022 from 2021 decrease in selling, general and administrative expenses of $12.4 million was primarily attributable to a $27.6 million decrease in personnel and labor costs, partially offset by a $6.4 million increase in marketing costs, a $5.1 million increase in travel costs, a $3.4 million increase in insurance costs, and a $0.8 million increase in third-party cloud computing costs.

The decrease in personnel and labor costs was primarily a result of decreased headcount, decreased fringe benefit costs related to our supplemental retirement and savings plan, and lower non-capitalizable commission cost, partially offset by higher share-based compensation.

The increase in marketing and travel costs was primarily driven by a company-wide marketing event held during fiscal 2022.

In addition, travel costs increased as certain COVID-19 related restrictions have been relaxed.

Selling, general and administrative expenses as a percentage of revenues decreased to 28% during fiscal 2022 from 30% during fiscal 2021.

| Segment | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2022 to 2021 | | | | | | 2021 to 2020 | | | | | | 2022 to 2021 | | | | | | 2021 to 2020 | | |

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

The fiscal 2022 over 2021 increase in operating income of $36.9 million was primarily attributable to an $81.7 million decrease in segment operating expenses, a $60.7 million increase in segment revenues, and an $8.0 million decrease in restructuring and impairment charges.

This was partially offset by $100.1 million in gains on product line asset sales and business divestiture during fiscal 2021, an $11.6 million increase in corporate expenses, and a $2.9 million increase in share-based compensation expense.

Segment operating income as a percentage of segment revenue for Software increased to 28% from 16%, primarily attributable to the divestiture of our lower-margin C&R business, an increase in higher-margin license revenue recognized at a point in time, and a decrease in sales of our lower-margin professional services.

For jurisdictions outside the U.S. where cash may be repatriated in the future, the Company expects the net impact of any repatriations to be immaterial to the Company’s overall tax liability.

| | | | 2022 | | | | | | 2021 | | | | | | 2020 | | |

During fiscal 2020, we changed our business 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 was substantially completed by the end of the first quarter of our fiscal 2021.

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

This change led to a negative impact of our revenue recognized from term software licenses in our fiscal 2021 but does not affect total revenue recognized over the life of a contract.

In addition, this change does not negatively impact our cash flows.

In June 2021, following the divestiture of our C&R business, we entered into an accelerated share repurchase agreement (“ASR Agreement”) to repurchase $200.0 million of our common stock.

In August 2021, we entered into a stock repurchase agreement with an institutional shareholder pursuant to which we repurchased $225.0 million of our common stock.

We also repurchased shares in other open market transactions under our stock repurchase programs.

Due to the COVID-19 pandemic, we continue to conduct business with substantial modifications to employee travel and work locations and also the virtualization of sales and marketing events.

We expect these modifications to remain in place throughout calendar year 2021, along with substantially modified interactions with customers and suppliers, among other adjustments.

As certain offices reopened due to the lifting of local government restrictions and a small number of employees started returning to work locations on a limited basis during fiscal 2021, we have maintained a “Voluntary Work-From-Home Policy” providing our people with valued flexibility.

While we have not experienced material disruptions to our operations from the COVID-19 pandemic, we are unable to predict the full impact that the COVID-19 pandemic will have on our operations and future financial performance, including demand for our offerings, impact to our customers and partners, actions that may be taken by governmental authorities, and other factors identified in “Risk Factors” in Part I, Item 1A of this Report.

- $882.2 million was spent on share repurchases, compared with $235.2 million spent during the prior year.

(*) During fiscal 2021, we sold all assets related to our cyber risk score operations, sold certain assets related to our Software segment to an affiliated joint venture in China, and divested our C&R business.

| Platform () | | | $ | 40.0 | | | | | $ | 41.1 | | | | | $ | 43.8 | | | | | $ | 47.7 | | | | | $ | 55.1 | | | | | $ | 60.2 | | | | | $ | 67.7 | | | | | $ | 75.2 | |

| Total on-premises and SaaS software | | | $ | 486.9 | | | | | $ | 491.4 | | | | | $ | 482.3 | | | | | $ | 491.3 | | | | | $ | 495.0 | | | | | $ | 497.3 | | | | | $ | 513.6 | | | | | $ | 524.0 | |

| Total on-premises and SaaS software | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % | | | | 100 | | % |

| Total on-premises and SaaS software | | | 5 | | % | | | | 7 | | % | | | | — | | % | | | | 1 | | % | | | | 2 | | % | | | | 1 | | % | | | | 7 | | % | | | | 7 | | % |

| Total on-premises and SaaS software | | | 103 | | % | | | | 105 | | % | | | | 98 | | % | | | | 99 | | % | | | | 100 | | % | | | | 100 | | % | | | | 105 | | % | | | | 106 | | % |

As a result, we modified the presentation of our segment financial information with retrospective application to all prior periods presented.

In addition, effective beginning in the fourth quarter of fiscal 2021, we changed the classification of revenue from transactional and maintenance, professional services, and license to on-premises and SaaS software, professional services and scores on our consolidated statements of income and comprehensive income, as well as our disclosures on disaggregation of revenue, to better align with our business strategy.

Previously reported amounts have been adjusted to conform to the current presentation.

The increase in business-to-business scores was primarily attributable to an increase in mortgage volumes, a higher unit price across several business-to-business offerings, 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.

Revenues collectively generated by agreements with the three major consumer reporting agencies, TransUnion, Equifax and Experian, accounted for 38%, 33% and 29% of our total revenues in fiscal 2021, 2020 and 2019, respectively, with all three consumer reporting agencies contributing more than 10% of our total revenues in fiscal 2021, and Experian contributing more than 10% of our total revenues in fiscal 2020 and 2019.

Revenues from these customers included amounts recorded in our Software segment.

| Total | | | $ | 517,888 | | | | | $ | 584,576 | | | | | $ | 556,968 | | | | | $ | (66,688) | | | | | 27,608 | | | | | | (11) | | % | | | | 5 | | % |

In total, $21.7 million of the year-over-year decrease in our Software segment revenue was attributable to the divestiture of our C&R business.

Software segment revenues increased $27.1 million in fiscal 2020 from 2019 primarily attributable to a $27.6 million increase in on-premises and SaaS software revenue, comprised of a $16.4 million increase in license portion of our on-premises subscription software and perpetual license revenue recognized at a point in time, and a $11.3 million increase in revenue recognized over time, primarily attributable to an increase in SaaS subscription revenue.

The decrease in travel costs was primarily attributable to the COVID-19 pandemic.

The increase in facilities and infrastructure costs was primarily attributable to increased resource requirements due to expansion in our cloud infrastructure operations.

The increase in personnel and labor costs was primarily attributable to an increase in our average headcount.

The increase in direct materials cost was primarily attributable to an increase in license and Scores revenues that incur third-party royalties and data costs, as well as an increase in telecommunication cost.

Cost of revenues as a percentage of revenues was 28% during fiscal 2020, materially consistent with that incurred during fiscal 2019.

The fiscal 2020 over 2019 increase of $17.0 million in research and development expenses was primarily attributable to an increase in personnel and labor costs and an increase in allocated facilities and infrastructure costs, both driven by increased average headcount and our continued investments in new product development.

The fiscal 2020 over 2019 increase of $6.8 million was primarily attributable to an increase in personnel and labor costs as a result of increased average headcount, higher share-based compensation and higher non-capitalizable commission cost.

The increase was partially offset by a decrease in marketing and travel costs as a result of a decrease in travel activity due to COVID-19.

Selling, general and administrative expenses as a percentage of revenues decreased to 33% during fiscal 2020 from 35% during fiscal 2019 primarily due to increased sales of our high-margin Scores and software products.

As of September 30, 2021, we had approximately $141.5 million of unremitted earnings of non-U.S. subsidiaries.

The Company generates substantial cash flow in the U.S. and does not have a current need for the cash to be returned to the U.S. from the foreign entities.

The following table presents the principal amounts and related weighted-average yields for our investments with interest rate risk at September 30, [removed: 2021] [added: 2022] and [removed: 2020:][added: 2021:]

| | | | September 30, 2021 | | | | | | | | | | | | | | | [removed: | | | September 30, 2020 | | | | | | | | | | | | | | |]

| Cash and cash equivalents | | | $ | [removed: 195,354] [added: 133,202] | | | | | $ | [removed: 195,354] [added: 133,202] | | | | | [removed: 0.04] [added: 1.23] | | % | | | | $ | [removed: 157,394] [added: 195,354] | | | | | $ | [removed: 157,394] [added: 195,354] | | | | | [removed: 0.05] [added: 0.04] | | % |

On May 8, 2018, we issued $400 million of senior notes in a private [removed: offering] [added: placement] 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 [removed: Notes,” and with the 2018 Senior Notes, the “Senior] Notes”).

See [removed: Management’s] [added: “Management’s] Discussion and Analysis of Financial Condition and Results of Operations — Capital Resources and [removed: Liquidity] [added: Liquidity”] for additional information on the Senior Notes.

The following table presents the [removed: carrying amounts] [added: face values] and fair values for the Senior Notes at September 30, [removed: 2021] [added: 2022] and [removed: 2020:][added: 2021:]

| | | | September 30, [removed: 2021] [added: 2022] | | | | | | | | | | | | [added: | | | | | |] September 30, [removed: 2020] [added: 2021] | | | | | | | | | [added: | | | | | |]

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

| The 2018 Senior Notes | | | 400,000 | | | | | | [removed: 453,000] [added: 381,500] | | | | | | 400,000 | | | | | | [removed: 442,000] [added: 453,000] | | |

| The 2019 Senior Notes [added: and the 2021 Senior Notes] | | | [removed: 350,000] [added: 900,000] | | | | | | [removed: 357,000] [added: 767,250] | | | | | | 350,000 | | | | | | [removed: 358,750] [added: 357,000] | | |

| Total | | | $ | [removed: 750,000] [added: 1,300,000] | | | | | $ | [removed: 810,000] [added: 1,148,750] | | | | | $ | 750,000 | | | | | $ | [removed: 800,750] [added: 810,000] | |

(*) The carrying value of the Senior Notes was the face value reduced by the net debt issuance costs of [removed: $9.0] [added: $14.3] million and [removed: $10.6] [added: $9.0] million at September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] respectively.

We have interest rate risk with respect to our [removed: $600 million] unsecured revolving line of [removed: credit.][added: credit and term loan.]

Interest on amounts borrowed under the credit facility is based on (i) [removed: a] [added: an adjusted] base rate, which is the [removed: greater] [added: greatest] of (a) the prime [removed: rate] [added: rate,] and (b) the Federal Funds rate plus 0.500% and (c) the one-month LIBOR rate plus 1.000%, plus, in each case, an applicable margin, or (ii) an adjusted LIBOR rate plus an applicable margin.

The applicable margin for base rate borrowings ranges from 0% to 0.750% and for LIBOR borrowings ranges from 1.000% to [removed: 1.750%] [added: 1.750%,] and is determined based on our consolidated leverage ratio.

[removed: We] [added: As of September 30, 2022, we] had [removed: $518.0] [added: $280.0] million in borrowings outstanding [added: under the revolving credit facility] at a weighted-average interest [added: rate] of [removed: 1.212% under] [added: 4.479% and $288.8 million in outstanding balance of] the [removed: credit facility as] [added: term loan at an interest rate] of [removed: September 30, 2021.][added: 4.283%.]

The following tables summarize our outstanding foreign currency forward contracts, by currency, at September 30, [removed: 2021] [added: 2022] and [removed: 2020:][added: 2021:]

| | | | [added: September 30, 2022] | | | [removed: September 30, 2021] | | | | | | | | | [added: September 30, 2021] | | | | | | [added: | | |]

| Euro (EUR) | | | [removed: | | |] EUR | 17,100 | | | | | $ | 19,829 | | | | | — | | |

| British pound (GBP) | | | [removed: | | |] GBP | 11,467 | | | | | $ | 15,400 | | | | | — | | |

| Singapore dollar (SGD) | | | [removed: | | |] SGD | 6,650 | | | | | $ | 4,900 | | | | | — | | |

| British pound (GBP) | | | [added: | | |] GBP | [removed: 16,555] [added: 11,848] | | | | | $ | [removed: 21,300] [added: 13,100] | | | | | — | | |

| Singapore dollar (SGD) | | | [added: | | |] SGD | [removed: 7,815] [added: 6,169] | | | | | $ | [removed: 5,700] [added: 4,300] | | | | | — | | |

The foreign currency forward contracts were entered into on September [removed: 30 of each fiscal year;] [added: 30, 2022 and 2021;] therefore, [removed: the] [added: their] fair value was $0 [removed: on September 30, 2021 and 2020.][added: at each of these dates.]

On December 17, 2021, we issued $550 million of additional senior notes of the same class as the 2019 Senior Notes in a private placement to qualified institutional investors (the “2021 Senior Notes” and collectively with the 2018 Senior Notes and 2019 Senior Notes, the “Senior Notes”).

We maintain a program to manage our foreign exchange rate risk on existing foreign-currency-denominated receivable and cash balances by entering into forward contracts to sell or buy foreign currencies.

At period end, foreign-currency-denominated receivable and cash balances held by our various reporting entities are remeasured into their respective functional currencies at current market rates.

The change in value from this remeasurement is then reported as a foreign exchange gain or loss for that period in our accompanying consolidated statements of income and comprehensive income and the resulting gain or loss on the forward contract mitigates the foreign exchange rate risk of the associated assets.

All of our foreign currency forward contracts have maturity periods of less than three months.

Such derivative financial instruments are subject to market risk.

| | | | | | | September 30, 2022 | | | | | | | | | | | | | | |

| Euro (EUR) | | | | | | EUR | 13,500 | | | | | $ | 13,158 | | | | | — | | |

We use derivative instruments to manage risks caused by fluctuations in foreign exchange rates.

The primary objective of our derivative instruments is to protect the value of foreign-currency-denominated receivable and cash balances from the effects of volatility in foreign exchange rates that might occur prior to conversion to their functional currencies.

We principally utilize foreign currency forward contracts, which enable us to buy and sell foreign currencies in the future at fixed exchange rates and economically offset changes in foreign exchange rates.

We routinely enter into contracts to offset exposures denominated in the British pound, Euro and Singapore dollar.

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 income, net.

The forward contracts are not designated as hedges and are marked to market through other income, net.

Fair value changes in the forward contracts help mitigate the changes in the value of the remeasured receivable and cash balances attributable to changes in foreign exchange rates.

The forward contracts are short-term in nature and typically have average maturities at inception of less than three months.

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

| Euro (EUR) | | | EUR | 15,000 | | | | | $ | 17,656 | | | | | — | | |

Most leading banks and credit card issuers rely on our solutions, as do insurers, retailers, telecommunications providers, automotive [removed: companies,] [added: lenders, consumer reporting agencies,] public agencies, and organizations in other industries.

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

The FICO® Resilience Index [removed: is a recently introduced] offering [added: is] designed to complement FICO® Score models by identifying those consumers who are more resilient to economic stress relative to other consumers within the same FICO Score bands.

Our software can be deployed in the cloud [removed: as SaaS] utilizing [removed: FICO’s infrastructure or] third-party cloud services, or on-premises using our customers’ IT infrastructure.

[removed: - *Predictive] [added: *•Predictive] Modeling*

[removed: - *Decision] [added: *•Decision] Analysis and Optimization*

[removed: - *Transaction] [added: *•Transaction] Profiling*

[removed: - *Customer] [added: *•Customer] Data Integration*

[removed: Some] [added: In addition, some] FICO pre-configured solutions are now available on FICO [removed: Platform, including FICO® Originations Solution and FICO® Strategy Director.][added: Platform.]

Our annual recurring revenue (“ARR”) from FICO® Platform based products was [removed: $75.2] [added: $114.2] million as of September 30, [removed: 2021,] [added: 2022,] representing [removed: 14%] [added: 20%] of our total software ARR.

- [removed: *FICO*® *Decision] [added: FICO® Decision] Modeler and [removed: FICO*® *Blaze Advisor*®] [added: FICO® Blaze Advisor®] are our core decision rules modeling tools, which enable users to flexibly author and manage decision rules and strategies.

- [removed: *FICO*® *Xpress Optimization*] [added: FICO® Xpress Optimization] provides operations research professionals and business analysts with world-class solvers and productivity tools to determine optimal outcomes for a wide range of industry problems.

- [removed: *FICO*® *Analytics Workbench*TM] [added: FICO® Analytics WorkbenchTM] is a predictive analytics tool that allows businesses to create and deploy explainable machine learning models for use in decisions that typically require strict governance and compliance, often including regulatory oversight.

- [removed: *FICO*® *Data Orchestrator*] [added: FICO® Data Orchestrator] is a data retrieval and mapping solution that can access, gather, and transform data from corporate or public facing information [removed: services, such as credit reference agencies.][added: services.]

- [removed: *FICO*® *DMP Streaming*] [added: FICO® DMP Streaming] is a real-time and batch data ingestion solution that uniquely delivers in-stream analytics for real-time data insights and complex event processing.

- [removed: *FICO*® *Business] [added: FICO® Business] Outcome [removed: Simulator*] [added: Simulator] enables business users to run a wide variety of insightful scenarios to assess how their business is likely to perform under varying conditions and assumptions.

- [removed: *FICO*® *Decision Optimizer*] [added: FICO® Decision Optimizer] helps business users understand how different customers will react to a variety of different actions that are being considered.

- [removed: *FICO*® *Fraud] [added: FICO® Fraud] and Financial Crimes [removed: Solutions*] [added: Solutions] help our clients detect and prevent transactional financial fraud and violations of global financial compliance regulations.

- [removed: *FICO*® *Originations Solution*] [added: FICO® Originations Solution] is an application-to-decision credit originations solution.

- [removed: *FICO*® *Customer] [added: FICO® Customer] Communication [removed: Service*] [added: Service] is an intelligent omnichannel digital communication manager for resolving customer interactions.

- [removed: *FICO*® *Strategy] [added: FICO® Strategy] Director and [removed: FICO*® *TRIAD*® *Customer Manager*] [added: FICO® TRIAD® Customer Manager] enable businesses to automate and improve risk-based decisions for their existing credit customers.

[removed: *FICO*®] [added: *FICO®*] *Professional Services*

[removed: - *FICO*® *Implementation Services.*] We often sell software implementation and configuration services in conjunction with our [removed: software license] [added: on-premise] and SaaS [removed: subscriptions.][added: subscriptions, and our perpetual license sales.]

[removed: - *FICO*® *Analytic Services.*] We build custom analytics, decision models and related analytics, and perform machine learning projects for clients in multiple industries.

[removed: - *FICO*® *Advisors.*] FICO Advisors are business consultants accelerating the practical use of FICO solutions through data-driven analytics, strategic design, and software applications.

End users of our products include [removed: 96] [added: 92] of the 100 largest financial institutions in the U.S., and [removed: two-thirds] [added: three-quarters] of the largest 100 banks in the world.

Our clients also include more than 600 insurers, including [removed: nine] [added: eight] of the top ten U.S. property and casualty insurers; more than 300 retailers and general merchandisers; and more than 200 government or public agencies.

[removed: All] [added: Seven of the] top ten companies on the [removed: 2021] [added: 2022] Fortune 500 list use one or more of our solutions.

During fiscal [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019,] [added: 2020,] revenues generated from our agreements with Experian, TransUnion and Equifax collectively accounted for [removed: 38%, 33%] [added: 39%, 38%] and [removed: 29%] [added: 33%] of our total revenues, respectively.

Our largest market segment is financial services, representing [removed: 89%] [added: 90%] of our total revenue in [removed: 2021.][added: 2022.]

Our largest geographic market is the Americas, representing [removed: 80%] [added: 82%] of our total revenue in [removed: 2021.][added: 2022.]

- providers of [removed: account/workflow] [added: account workflow] management software;

We currently hold [removed: 190] [added: 188] U.S. and [removed: 18] [added: 20] foreign [removed: patents] [added: patents,] with [removed: 82] [added: 83] applications pending.

Laws and governmental regulation affect how our business is conducted and, in some cases, subject us to the possibility of government supervision [added: or enforcement] and future lawsuits arising from our products and services.

Many U.S. and foreign jurisdictions have passed, or are currently contemplating, a variety of consumer protection, [added: data] privacy, and data security laws and regulations that may relate to our business or [added: the business of our customers or] affect the demand for our products and services.

For example, the [added: General Data Protection Regulation (the “GDPR”) in the] United Kingdom (“U.K.”) and [added: the] European Union (“E.U.”) [removed: General Data Protection Regulation (the “GDPR”) impose,] [added: imposes,] among other things, strict obligations and restrictions on the [removed: ability to collect, analyze] [added: collection] and [removed: transfer] [added: use of] U.K. and E.U. personal data, a requirement for prompt notice of data breaches in certain circumstances, [added: a requirement for implementation of certain approved safeguards for transfers of personal data to third countries,] and possible substantial fines for any [removed: violations (including possible fines for certain violations of up to the greater of 20 million Euros or 4% of total worldwide annual revenue under the E.U. GDPR and up to the greater of 17.5 million Pounds or 4% of annual global turnover under the U.K. GDPR).][added: violations.]

Our [removed: transition to] [added: implementation of] the new [removed: SCCs,] [added: SCCs for affected data flows,] which may involve interpretive issues and may have an adverse impact on cross-border transfers of personal data, may subject us [added: or our customers] to additional scrutiny from E.U. [added: and U.K.] regulators or may increase our costs of [removed: compliance.][added: compliance associated with performing any necessary assessments, engaging in contract negotiations with third parties, and/or (if appropriate) localizing certain data processing activities.]

Additionally, effective [removed: starting] January 1, 2023, the California Privacy Rights Act (the “CPRA”) will revise and significantly expand the scope of the CCPA.

The CPRA also [removed: creates] [added: created] a new [added: agency, the] California [removed: data protection agency] [added: Privacy Protection Agency,] authorized to implement and enforce the CCPA and the CPRA, which could result in increased privacy and information security [removed: enforcement.][added: regulatory actions.]

Other U.S. states have considered and/or enacted similar privacy [removed: laws, including Virginia and Colorado, which passed new consumer privacy laws in 2021.][added: laws.]

We plan to offer most of our Fraud capabilities on FICO Platform.

We plan to offer most of our Originations capabilities on FICO Platform.

- FICO® Implementation Services.

- FICO® Analytic Services.

- FICO® Advisors.

The E.U. and the U.K each have issued new standard contractual clauses (“SCCs”) as an approved safeguard for cross-border transfer of E.U. and U.K. personal data along with guidance imposing further obligations on controllers and processors that rely on SCCs for such transfers, including carrying out an appropriate data transfer impact assessment to evaluate whether adequate protection will be afforded to the data in the destination country.

For example, Virginia, Utah, Connecticut, and Colorado have passed new consumer privacy laws that become effective in 2023.

There has been an increased focus on laws and regulations related to our business and the business of our customers, including by the current U.S. presidential administration, the U.S. Congress, and U.S. regulators, such as the CFPB, relating to policy concerns regarding the operation of consumer reporting agencies, the use and accuracy of credit data, the use of credit scores, algorithm accountability and transparency, and fair lending.

The European Commission has also released draft proposed regulations (i.e., the EU AI Act) that would establish requirements for the provision and use of products that leverage artificial intelligence, machine learning, and similar analytic and statistical modeling technologies, including credit scoring.

The EU AI Act is expected to be finalized in 2024 or 2025.

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

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

We involve designated employee “ambassadors” who work with senior leaders to explore findings, identify high value actions and amplify messaging to help our people understand how survey participation can connect to positive change.

We have paid Maternity and Parental Leave benefits totaling up to 12 weeks, and we have adopted a Well-Being Program designed to provide broad-based physical and mental health education and personal health coaching, as well as quarterly cash Wellness Awards designed to help employees fund wellness-related purchases which they find most valuable.

For our offices in India, we have adopted a “hybrid” approach under which employees may elect to work from home up to two days per week and have flexibility to adjust office attendance hours to best manage commuting challenges.

- *FICO*® *Studio* is a powerful, low-code / no-code application development environment that gives users the ability to quickly build enterprise-grade decision applications using FICO® Platform.

FICO® Falcon® X is a suite of some of our Fraud and Compliance capabilities that run on FICO® Platform.

We plan to offer most of our Fraud and Compliance solutions as platform-native Falcon X products in the future.

The current version of FICO Originations Solution runs on FICO® Platform.

A decision in July 2020 by the Court of Justice of the European Union (*i.e.*, Schrems II), called into question certain data transfer mechanisms between the E.U. and the U.S. In June 2021, the European Commission issued new standard contractual clauses (“SCCs”) governing cross-border data transfers and data exchanges among controllers and processors, which reflect more recent data protection laws, such as the GDPR, and account for the analysis in the Schrems II decision.

Additional information on our diversity metrics and programs, including our EEO-1 survey results, will be available soon

We have adopted paid Maternity and Parental Leave benefits totaling up to 12 weeks.

Beginning in March 2020, our employees were instructed to work from home in each country where we operate.

As certain offices have reopened due to the lifting of local government restrictions, we have maintained a “Voluntary Work-From-Home Policy” providing our people with valued flexibility.

For the fiscal year ended September 30, [removed: 2021][added: 2022]

As of March 31, [removed: 2021,] [added: 2022,] the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was [removed: $11,138,645,215] [added: $9,599,184,596] 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: 29, 2021] [added: 28, 2022] was [removed: 27,358,353] [added: 24,975,618] (excluding [removed: 61,498,430] [added: 63,881,165] shares held by the Company as treasury stock).

Portions of the Registrant’s definitive proxy statement relating to its [removed: 2022] [added: 2023] Annual Meeting of Stockholders [removed: (“2022] [added: (“2023] Proxy Statement”) are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated.

The [removed: 2022] [added: 2023] 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.

| Item 1. | | | [removed: [Business](#i418c637ca00a491b8b456ab257e63118_16)] [added: [Business](#ic48b56c04d544a579c809f199c9747de_16)] | | | [removed: [3](#i418c637ca00a491b8b456ab257e63118_16)] [added: [3](#ic48b56c04d544a579c809f199c9747de_16)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i418c637ca00a491b8b456ab257e63118_19)] [added: Factors](#ic48b56c04d544a579c809f199c9747de_19)] | | | [removed: [14](#i418c637ca00a491b8b456ab257e63118_19)] [added: [14](#ic48b56c04d544a579c809f199c9747de_19)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i418c637ca00a491b8b456ab257e63118_22)] [added: Comments](#ic48b56c04d544a579c809f199c9747de_22)] | | | [removed: [28](#i418c637ca00a491b8b456ab257e63118_22)] [added: [27](#ic48b56c04d544a579c809f199c9747de_22)] | | |

| Item 2. | | | [removed: [Properties](#i418c637ca00a491b8b456ab257e63118_25)] [added: [Properties](#ic48b56c04d544a579c809f199c9747de_25)] | | | [removed: [28](#i418c637ca00a491b8b456ab257e63118_25)] [added: [27](#ic48b56c04d544a579c809f199c9747de_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i418c637ca00a491b8b456ab257e63118_28)] [added: Proceedings](#ic48b56c04d544a579c809f199c9747de_28)] | | | [removed: [29](#i418c637ca00a491b8b456ab257e63118_28)] [added: [28](#ic48b56c04d544a579c809f199c9747de_28)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i418c637ca00a491b8b456ab257e63118_31)] [added: Disclosures](#ic48b56c04d544a579c809f199c9747de_31)] | | | [removed: [29](#i418c637ca00a491b8b456ab257e63118_31)] [added: [28](#ic48b56c04d544a579c809f199c9747de_31)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i418c637ca00a491b8b456ab257e63118_37)] [added: Securities](#ic48b56c04d544a579c809f199c9747de_37)] | | | [removed: [30](#i418c637ca00a491b8b456ab257e63118_37)] [added: [29](#ic48b56c04d544a579c809f199c9747de_37)] | | |

| Item 6. | | | [removed: [\[Reserved\]](#i418c637ca00a491b8b456ab257e63118_40)] [added: [\[Reserved\]](#ic48b56c04d544a579c809f199c9747de_40)] | | | [removed: [31](#i418c637ca00a491b8b456ab257e63118_40)] [added: [30](#ic48b56c04d544a579c809f199c9747de_40)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i418c637ca00a491b8b456ab257e63118_43)] [added: Operations](#ic48b56c04d544a579c809f199c9747de_43)] | | | [removed: [32](#i418c637ca00a491b8b456ab257e63118_43)] [added: [31](#ic48b56c04d544a579c809f199c9747de_43)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i418c637ca00a491b8b456ab257e63118_67)] [added: Risk](#ic48b56c04d544a579c809f199c9747de_67)] | | | [removed: [50](#i418c637ca00a491b8b456ab257e63118_67)] [added: [49](#ic48b56c04d544a579c809f199c9747de_67)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i418c637ca00a491b8b456ab257e63118_70)] [added: Data](#ic48b56c04d544a579c809f199c9747de_70)] | | | [removed: [53](#i418c637ca00a491b8b456ab257e63118_70)] [added: [52](#ic48b56c04d544a579c809f199c9747de_70)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i418c637ca00a491b8b456ab257e63118_184)] [added: Disclosure](#ic48b56c04d544a579c809f199c9747de_166)] | | | [removed: [90](#i418c637ca00a491b8b456ab257e63118_184)] [added: [88](#ic48b56c04d544a579c809f199c9747de_166)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i418c637ca00a491b8b456ab257e63118_187)] [added: Procedures](#ic48b56c04d544a579c809f199c9747de_169)] | | | [removed: [90](#i418c637ca00a491b8b456ab257e63118_187)] [added: [88](#ic48b56c04d544a579c809f199c9747de_169)] | | |

| Item 9B. | | | [Other [removed: Information](#i418c637ca00a491b8b456ab257e63118_190)] [added: Information](#ic48b56c04d544a579c809f199c9747de_172)] | | | [removed: [91](#i418c637ca00a491b8b456ab257e63118_190)] [added: [89](#ic48b56c04d544a579c809f199c9747de_172)] | | |

| [PART [removed: III](#i418c637ca00a491b8b456ab257e63118_193)] [added: IV](#ic48b56c04d544a579c809f199c9747de_193)] | | | | | | | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i418c637ca00a491b8b456ab257e63118_196)] [added: Governance](#ic48b56c04d544a579c809f199c9747de_178)] | | | [removed: [92](#i418c637ca00a491b8b456ab257e63118_196)] [added: [90](#ic48b56c04d544a579c809f199c9747de_178)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i418c637ca00a491b8b456ab257e63118_199)] [added: Compensation](#ic48b56c04d544a579c809f199c9747de_181)] | | | [removed: [94](#i418c637ca00a491b8b456ab257e63118_199)] [added: [91](#ic48b56c04d544a579c809f199c9747de_181)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i418c637ca00a491b8b456ab257e63118_202)] [added: Matters](#ic48b56c04d544a579c809f199c9747de_184)] | | | [removed: [94](#i418c637ca00a491b8b456ab257e63118_202)] [added: [91](#ic48b56c04d544a579c809f199c9747de_184)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i418c637ca00a491b8b456ab257e63118_205)] [added: Independence](#ic48b56c04d544a579c809f199c9747de_187)] | | | [removed: [94](#i418c637ca00a491b8b456ab257e63118_205)] [added: [91](#ic48b56c04d544a579c809f199c9747de_187)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#i418c637ca00a491b8b456ab257e63118_208)] [added: Services](#ic48b56c04d544a579c809f199c9747de_190)] | | | [removed: [94](#i418c637ca00a491b8b456ab257e63118_208)] [added: [91](#ic48b56c04d544a579c809f199c9747de_190)] | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#i418c637ca00a491b8b456ab257e63118_214)] [added: Schedules](#ic48b56c04d544a579c809f199c9747de_196)] | | | [removed: [95](#i418c637ca00a491b8b456ab257e63118_214)] [added: [92](#ic48b56c04d544a579c809f199c9747de_196)] | | |

Examples of forward-looking statements include, but are not limited to: (i) projections of revenue, income or loss, expenses, earnings or loss per share, the payment or nonpayment of dividends, share repurchases, capital structure and other statements concerning future financial performance; (ii) statements of our plans and objectives by our management or Board of Directors, including those relating to products or services, research and development, and the sufficiency of capital resources; (iii) statements of assumptions underlying such statements, including those related to economic conditions; (iv) statements regarding results of business combinations or strategic divestitures; (v) statements regarding business relationships with vendors, customers or collaborators, including the proportion of revenues generated from international as opposed to domestic customers; and (vi) statements regarding [removed: products,] [added: products and services,] their characteristics, performance, sales potential or effect in [removed: the hands of] [added: use by] customers.

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 Quarterly Reports on [removed: Forms] [added: Form] 10-Q and Current Reports on [removed: Forms] [added: Form] 8-K.*

| [PART I](#ic48b56c04d544a579c809f199c9747de_13) | | | | | | | | |

| [PART II](#ic48b56c04d544a579c809f199c9747de_34) | | | | | | | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#ic48b56c04d544a579c809f199c9747de_1812) | | | [89](#ic48b56c04d544a579c809f199c9747de_1812) | | |

| [PART III](#ic48b56c04d544a579c809f199c9747de_175) | | | | | | | | |

| Item 16. | | | [Form 10-K Summary](#ic48b56c04d544a579c809f199c9747de_1828) | | | [96](#ic48b56c04d544a579c809f199c9747de_1828) | | |

| [Signatures](#ic48b56c04d544a579c809f199c9747de_208) | | | | | | [97](#ic48b56c04d544a579c809f199c9747de_208) | | |

| [PART I](#i418c637ca00a491b8b456ab257e63118_13) | | | | | | | | |

| [PART II](#i418c637ca00a491b8b456ab257e63118_34) | | | | | | | | |

| [PART IV](#i418c637ca00a491b8b456ab257e63118_211) | | | | | | | | |

| [Signatures](#i418c637ca00a491b8b456ab257e63118_226) | | | | | | [100](#i418c637ca00a491b8b456ab257e63118_226) | | |

As of September 30, [removed: 2021,] [added: 2022,] the Company leased office facilities in geographically dispersed locations primarily for corporate functions, sales, research and development, data centers and other purposes.

According to records of our transfer agent, at October [removed: 29, 2021,] [added: 28, 2022,] we had [removed: 301] [added: 275] stockholders of record of our common stock.

| Period | | | Total [removed: Number of Shares Purchased (1)] [added: Number of Shares Purchased (1)] | | | | | | Average Price Paid per Share | | | | | | [removed: Total Number of Shares Purchased as] [added: Total Number of Shares Purchased as] Part [removed: of Publicly Announced Plans or Programs (2)] [added: of Publicly Announced Plans or Programs (2)] | | | | | | Maximum [removed: Dollar Value] [added: Dollar Value] of [removed: Shares that] [added: Shares that] May Yet [removed: Be Purchased Under the] [added: Be Purchased Under the] Plans [removed: or Programs (2)] [added: or Programs (2)] | | |

(1)Includes [removed: 5,858] [added: 4,041] 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: 2021.][added: 2022.]

(2)In [removed: March 2021,] [added: January 2022,] our Board of Directors approved a stock repurchase program following the completion of our previous program.

This program was open-ended and [removed: authorized] [added: authorizes] repurchases of shares of our common stock up to an aggregate cost of $500.0 million in the open market or in negotiated transactions.

In [removed: August 2021,] [added: October 2022,] our Board of Directors approved a new stock repurchase program [removed: following the termination of] [added: replacing] the [removed: March 2021] [added: January 2022 stock repurchase] program.

[removed: This] [added: The] new program is open-ended and authorizes repurchases of shares of our common stock up to an aggregate cost of $500.0 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: 2016,] [added: 2017,] 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: ]

Dividends

We have not declared or paid any cash dividends on our common stock since May 2017, and we do not presently plan to pay cash dividends on our common stock in the foreseeable future.

Payment of future cash dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our financial condition, operating results, current and anticipated cash needs, outstanding indebtedness, plans for expansion and restrictions imposed by our debt arrangements, if any.

| July 1, 2022 through July 31, 2022 | | | 1,189 | | | | | | $ | 454.24 | | | | | — | | | | | | $ | 118,768,694 | |

| August 1, 2022 through August 31, 2022 | | | 67,635 | | | | | | $ | 481.01 | | | | | 65,000 | | | | | | $ | 87,513,900 | |

| September 1, 2022 through September 30, 2022 | | | 55,217 | | | | | | $ | 452.67 | | | | | 55,000 | | | | | | $ | 62,617,740 | |

| Total | | | 124,041 | | | | | | $ | 468.14 | | | | | 120,000 | | | | | | $ | 62,617,740 | |

| July 1, 2021 through July 31, 2021 | | | 1,373 | | | | | | $ | 528.56 | | | | | — | | | | | | $ | 221,344,762 | |

| August 1, 2021 through August 31, 2021 | | | 689,649 | | | | | | $ | 448.14 | | | | | 685,420 | | | | | | $ | 243,139,026 | |

| September 1, 2021 through September 30, 2021 | | | 160,256 | | | | | | $ | 437.29 | | | | | 160,000 | | | | | | $ | 173,176,417 | |

| Total | | | 851,278 | | | | | | $ | 446.23 | | | | | 845,420 | | | | | | $ | 173,176,417 | |

As part of the broader share repurchase program, we entered into the accelerated share repurchase agreement (“ASR Agreement”) with a financial institution in June 2021 to repurchase $200.0 million of our common stock.

Pursuant to the ASR Agreement, we paid $200.0 million to the financial institution and received an initial delivery of 319,400 shares of common stock, which approximated 80% of the total number of expected shares to be repurchased under the ASR Agreement.

In August 2021, we settled the ASR Agreement and received 70,127 additional shares.

In total, 389,527 shares were repurchased under the ASR Agreement.

In August 2021, we entered into a stock repurchase agreement with an institutional shareholder, pursuant to which we repurchased 515,293 shares of our common stock for $225.0 million.

We have audited the accompanying consolidated balance sheets of Fair Isaac Corporation and subsidiaries (the "Company") as of September 30, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] the related consolidated statements of income and comprehensive income, stockholders' equity (deficit), and cash flows, for each of the three years in the period ended September 30, [removed: 2021,] [added: 2022,] and the related notes (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] based on criteria established in [removed: Internal] [added: *Internal] Control — Integrated Framework [removed: (2013)] [added: (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: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of operations and cash flows for each of the three years in the period ended September 30, [removed: 2021,] [added: 2022,] in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2021,] [added: 2022,] based on criteria established in [removed: Internal] [added: *Internal] Control — Integrated Framework [removed: (2013)] [added: (2013)*] issued by COSO.

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying [removed: Management’s] [added: *Management’s] report on Internal Control over Financial [removed: Reporting.][added: Reporting*.]

The critical audit matter communicated below is a matter arising from the [removed: current-period] [added: current period] audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) [removed: relate] [added: relates] to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit [removed: matter] [added: matters] does not alter in any way our opinion on the financial statements, taken as a whole, and [added: we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.]

Revenue Recognition – Contracts with Customers – Refer to Note 1 and Note [removed: 12] [added: 11] to the financial statements

[removed: The Company recognizes revenue] [added: Revenue is recognized] when control of the promised goods or services [removed: in a contract] is transferred to the [removed: customer,] [added: Company’s customers,] in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services.

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

For contracts with customers that contain various combinations of products and services, the Company evaluates whether the products or services are [removed: distinct.][added: distinct — distinct products or services will be accounted for as separate performance obligations, while non-distinct products or services are combined with others to form a single performance obligation.]

[removed: For transactional revenue, the] [added: The SaaS] transaction [removed: price for] contracts [removed: with customers] typically [removed: includes a fixed consideration in the form of] [added: include] a guaranteed minimum [added: fee per period] that allows up to a certain level of usage and a [added: consumption-based] variable [removed: consideration in the form of usage or transaction-based fees] [added: fee] in excess of the minimum threshold; or [removed: usage or transaction-based] [added: a consumption-based] variable [removed: amount] [added: fee] not subject to a minimum threshold.

For contracts with multiple performance obligations, the transaction price is allocated to each performance obligation on a relative standalone selling price [removed: (“SSP”)] [added: (SSP)] basis.

The Company determines the SSP using data from historical standalone sales, or, in instances where such information is not [removed: available,] [added: available (such as when] the Company [added: does not sell the product or service separately), the Company] considers factors such as the stated contract prices, [removed: their] overall pricing practices and objectives, go-to-market strategy, size and type of the transactions, and effects of the geographic area on pricing, among others.

Our audit procedures related to revenue recognition [removed: to] [added: over] the Company’s identification of performance obligations, estimation of variable consideration, and determination of SSP included the following, among others:

| [removed: */s/ Deloitte] [added: */s/* | | | *Deloitte] & Touche LLP* | | |

| San Diego, CA | | | [added: | | |]

| We have served as the Company’s auditor since 2004. | | | [added: | | |]

| | | | [added: 2022 | | | | | |] 2021 | | | | | | 2020 | | |

| Cash and cash [removed: equivalents |] [added: equivalents, beginning of year] | | [removed: $] | 195,354 | | | | | [removed: $] | 157,394 | | [added: | | | | 106,426 | | |]

| Accounts receivable, net | | | [removed: 312,107] [added: 322,410] | | | | | | [removed: 334,180] [added: 312,107] | | |

| Prepaid expenses and other current assets | | | [removed: 43,513] [added: 29,103] | | | | | | [removed: 42,504] [added: 43,513] | | |

| Total current assets | | | [removed: 550,974] [added: 484,715] | | | | | | [removed: 534,078] [added: 550,974] | | |

| Marketable securities | | | [removed: 31,884] [added: 24,515] | | | | | | [removed: 25,513] [added: 31,884] | | |

| Other investments | | | [removed: 1,312] [added: 1,135] | | | | | | [removed: 1,060] [added: 1,312] | | |

| Property and equipment, net | | | [removed: 27,913] [added: 17,580] | | | | | | [removed: 46,419] [added: 27,913] | | |

| Operating lease right-of-use assets | | | [removed: 47,275] [added: 36,688] | | | | | | [removed: 57,656] [added: 47,275] | | |

| Goodwill | | | [removed: 788,185] [added: 761,067] | | | | | | [removed: 812,364] [added: 788,185] | | |

| Intangible assets, net | | | [removed: 4,099] [added: 2,017] | | | | | | [removed: 9,236] [added: 4,099] | | |

| Deferred income taxes | | | [removed: 20,549] [added: 11,803] | | | | | | [removed: 14,629] [added: 20,549] | | |

| Other assets | | | [removed: 95,585] [added: 102,514] | | | | | | [removed: 105,285] [added: 95,585] | | |

| Total assets | | | $ | [removed: 1,567,776] [added: 1,442,034] | | | | | $ | [removed: 1,606,240] [added: 1,567,776] | |

| Liabilities and Stockholders’ [removed: Equity] [added: Deficit] | | | | | | | | | | | |

| Accounts payable | | | $ | [removed: 20,749] [added: 17,273] | | | | | $ | [removed: 23,033] [added: 20,749] | |

| Accrued compensation and employee benefits | | | [removed: 103,506] [added: 97,893] | | | | | | [removed: 117,952] [added: 103,506] | | |

| Other accrued liabilities | | | [removed: 79,535] [added: 66,248] | | | | | | [removed: 63,367] [added: 79,535] | | |

| Deferred revenue | | | [removed: 105,417] [added: 120,045] | | | | | | [removed: 115,159] [added: 105,417] | | |

| Current maturities on debt | | | [removed: 250,000] [added: 30,000] | | | | | | [removed: 95,000] [added: 250,000] | | |

| Total current liabilities | | | [removed: 559,207] [added: 331,459] | | | | | | [removed: 414,511] [added: 559,207] | | |

| Long-term debt | | | [removed: 1,009,018] [added: 1,823,669] | | | | | | [removed: 739,435] [added: 1,009,018] | | |

For SaaS products, the Company estimates the total variable consideration at contract inception — subject to any constraints that may apply — and updates the estimates as new information becomes available and recognizes the amount ratably over the SaaS service period, unless the Company determines it is appropriate to allocate the variable amount to each distinct service period and recognize revenue as each distinct service period is performed.

| November 9, 2022 | | | | | |

| | | | 2022 | | | | | | 2021 | | |

| Cash and cash equivalents | | | $ | 133,202 | | | | | $ | 195,354 | |

| Basic | | | 26,042 | | | | | | 28,734 | | | | | | 29,067 | | |

| Diluted | | | 26,347 | | | | | | 29,260 | | | | | | 29,932 | | |

| Repurchases of common stock | | | (2,678) | | | | | | (27) | | | | | | — | | | | | | (1,096,110) | | | | | | — | | | | | | — | | | | | | (1,096,137) | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 373,541 | | | | | | — | | | | | | 373,541 | | |

| Balance at September 30, 2022 | | | 25,154 | | | | | | $ | 252 | | | | | $ | 1,299,588 | | | | | $ | (4,935,769) | | | | | $ | 2,958,684 | | | | | $ | (124,702) | | | | | $ | (801,947) | |

| Gains on product line asset sales and business divestiture | | | — | | | | | | (100,139) | | | | | | — | | |

Years Ended September 30, 2022, 2021 and 2020

Fair Isaac Corporation (NYSE: FICO) (together with its consolidated subsidiaries, the “Company,” which may also be referred to in this report as “we,” “us,” “our,” or “FICO”) is a leading applied analytics company.

Years Ended September 30, 2022, 2021 and 2020

Years Ended September 30, 2022, 2021 and 2020

We have determined that our reporting units are the same as our reportable segments.

For fiscal 2022, we performed a step zero qualitative analysis for our annual assessment of goodwill impairment.

After evaluating and weighing all relevant events and circumstances, we concluded that it is not more likely than not that the fair value of either of our reporting units was less their carrying amounts.

Consequently, we did not perform a step one quantitative analysis and determined goodwill was not impaired for either of our reporting units for fiscal 2022.

Years Ended September 30, 2022, 2021 and 2020

Years Ended September 30, 2022, 2021 and 2020

Years Ended September 30, 2022, 2021 and 2020

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, “*Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers*” (“ASU 2021-08”).

ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities from acquired contracts using the revenue recognition guidance under Accounting Standards Codification Topic 606, *Revenue from Contacts with Customers*, in order to align the recognition of a contract liability with the definition of a performance obligation.

The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which means that it will be effective for our fiscal year beginning October 1, 2023.

Early adoption is permitted.

Business Divestitures

Years Ended September 30, 2022, 2021 and 2020

| Total | | | $ | 43,829 | | | | | $ | 43,829 | |

Years Ended September 30, 2022, 2021 and 2020

| | | | September 30, 2022 | | | | | | | | | | | | | | | | | |

| Euro (EUR) | | | EUR | | | 13,500 | | | | | | $ | 13,158 | | | | | — | | |

Years Ended September 30, 2022, 2021 and 2020

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

| | | | $ | 70,760 | | | | | $ | (68,743) | | | | | $ | 2,017 | | | | | 5 | | | | | | $ | 85,527 | | | | | $ | (81,428) | | | | | $ | 4,099 | | | | | 6 | | |

Years Ended September 30, 2022, 2021 and 2020

| Total | | | $ | 2,017 | |

| Balance at September 30, 2022 | | | $ | 146,648 | | | | | $ | 614,419 | | | | | $ | 761,067 | |

| | | | 2022 | | | | | | 2021 | | |

| Interest payable | | | $ | 21,314 | | | | | $ | 12,241 | |

| Current operating leases | | | 19,369 | | | | | | 22,074 | | |

we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The Company’s contracts with customers often include promises to transfer multiple products and services to a customer.

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

| | | |

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

| November 10, 2021 | | |

FAIR ISAAC CORPORATION

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

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

| Diluted earnings per share | | | $ | 13.40 | | | | | $ | 7.90 | | | | | $ | 6.34 | |

| Shares used in computing diluted earnings per share | | | 29,260 | | | | | | 29,932 | | | | | | 30,294 | | |

| Balance at September 30, 2018 | | | 29,015 | | | | | | $ | 290 | | | | | $ | 1,211,051 | | | | | $ | (2,612,007) | | | | | $ | 1,764,524 | | | | | $ | (76,421) | | | | | $ | 287,437 | |

| Repurchases of common stock | | | (925) | | | | | | (9) | | | | | | — | | | | | | (228,885) | | | | | | — | | | | | | — | | | | | | (228,894) | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 192,124 | | | | | | — | | | | | | 192,124 | | |

| Cash paid for acquisitions, net of cash acquired | | | — | | | | | | — | | | | | | (15,855) | | |

| Cash and cash equivalents, end of year | | | $ | 195,354 | | | | | $ | 157,394 | | | | | $ | 106,426 | |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In these consolidated financial statements, FICO is referred to as “we,” “us,” “our,” or “the Company.”

During the fourth quarter of our fiscal 2021, we reevaluated our operating segments to better align with how our chief operating decision maker (“CODM”), who is our Chief Executive Officer, evaluates performance and allocates resources.

The key factors evaluated included our evolving platform strategies, our go-to market considerations, and sales of our product lines and businesses during fiscal 2021, and in particular the divestiture of our Collections and Recovery (“C&R”) business in June 2021, among others.

As a result, we modified the presentation of our segment financial information with retrospective application to all prior periods presented.

In addition, effective beginning in the fourth quarter of fiscal 2021, we changed the classification of revenue from transactional and maintenance, professional services, and license to on-premises and SaaS software, professional services and scores on our consolidated statements of income and comprehensive income, as well as our disclosures on disaggregation of revenue, to better align with our business strategy.

Previously reported amounts in the consolidated statements of income and comprehensive income and notes to the consolidated financial statements have been adjusted to conform to the current presentation.

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.

During the fourth quarter of fiscal 2021, we reevaluated our operating segments to better align with how our CODM evaluates performance and allocates resources, which resulted in a change from three operating segments, Applications, Decision Management Software and Scores, to two operating segments, Software and Scores.

As part of this reevaluation, we reconsidered our reporting units and concluded our operating segments continue to represent our reporting units.

*Recently Adopted Accounting Pronouncements*

In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, *Intangibles—Goodwill and Other (Topic 350): Internal-Use Software* (“ASU 2018-15”).

ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

In June 2016, the FASB issued ASU No. 2016-13, *Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments* and subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04, ASU 2019-05 and ASU 2019-11 (collectively, “Topic 326”).

Topic 326 requires measurement and recognition of expected credit losses for financial assets held.

We adopted Topic 326 in the first quarter of our fiscal 2021 and the adoption did not have a significant impact on our consolidated financial statements.

Business Combinations

In fiscal 2019, we acquired 100% of the equity of eZmCom, Inc. for $18.6 million in cash.

We recorded $6.0 million of intangible assets which are being amortized using the straight-line method over a weighted-average useful life of 4.73 years.

We allocated $11.2 million of goodwill to our Software segment that is deductible for tax purposes.

Business Divestiture

Based on that evaluation, the CEO and CFO have concluded that FICO’s disclosure controls and procedures were effective as of September 30, [removed: 2021] [added: 2022] to ensure that information required to be disclosed by FICO in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

No change in FICO’s internal control over financial reporting was identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the quarter ended September 30, [removed: 2021,] [added: 2022,] that has materially affected, or is reasonably likely to materially affect, FICO’s internal control over financial reporting.

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: 2021] [added: 2022] 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: 2021.][added: 2022.]

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: 2021,] [added: 2022,] as stated in their attestation report included in Part II, Item 8 of this Annual Report on Form 10-K.

PART III

Not applicable.

PART III

The required information regarding our Directors is incorporated by reference from the information under the caption “Our Director Nominees” in our [removed: 2022] [added: 2023] Proxy Statement to be filed with the SEC within 120 days after September 30, [removed: 2021.][added: 2022.]

| 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: 63] [added: 64] | | |

| 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: 57] [added: 58] | | |

| 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. | | | [removed: 66] [added: 67] | | |

| Stephanie Covert | | | [added: January 2022-present, Executive Vice President, Software of the Company.] October [removed: 2020-present,] [added: 2020-January 2022,] 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. | | | [removed: 42] [added: 43] | | |

| 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: 54] [added: 55] | | |

| 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: 57] [added: 58] | | |

| 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: 52] [added: 53] | | |

| 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: 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: 2022] [added: 2023] Proxy Statement to be filed with the SEC within 120 days after September 30, [removed: 2021.][added: 2022.]

The required information regarding the Company’s audit committee is incorporated by reference from the information under the caption “Board Committees” in our [removed: 2022] [added: 2023] Proxy Statement to be filed with the SEC within 120 days after September 30, [removed: 2021.][added: 2022.]

| | | | | | | | | |

| 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. | | | 58 | | |

The information required by this Item is incorporated by reference from the information under the captions “Director Compensation for Fiscal [removed: 2021”] [added: 2022”] and “Executive Compensation” in our [removed: 2022] [added: 2023] Proxy Statement to be filed with the SEC within 120 days after September 30, [removed: 2021.][added: 2022.]

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: 2022] [added: 2023] Proxy Statement to be filed with the SEC within 120 days after September 30, [removed: 2021.][added: 2022.]

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: 2022] [added: 2023] Proxy Statement to be filed with the SEC within 120 days after September 30, [removed: 2021.][added: 2022.]

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: 2022] [added: 2023] Proxy Statement to be filed with the SEC within 120 days after September 30, [removed: 2021.][added: 2022.]

| [Report of independent registered public accounting [removed: firm](#i418c637ca00a491b8b456ab257e63118_70)] [added: firm](#ic48b56c04d544a579c809f199c9747de_70) (PCAOB ID: 34)] | | | [removed: [53](#i418c637ca00a491b8b456ab257e63118_70)] [added: [52](#ic48b56c04d544a579c809f199c9747de_70)] | | |

| [Consolidated balance sheets as of September 30, [removed: 2021] [added: 2022] and [removed: 2020](#i418c637ca00a491b8b456ab257e63118_73)] [added: 2021](#ic48b56c04d544a579c809f199c9747de_73)] | | | [removed: [56](#i418c637ca00a491b8b456ab257e63118_73)] [added: [55](#ic48b56c04d544a579c809f199c9747de_73)] | | |

| [Consolidated statements of income and comprehensive income for the years ended September 30, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019](#i418c637ca00a491b8b456ab257e63118_79)] [added: 2020](#ic48b56c04d544a579c809f199c9747de_76)] | | | [removed: [57](#i418c637ca00a491b8b456ab257e63118_79)] [added: [56](#ic48b56c04d544a579c809f199c9747de_76)] | | |

| [Consolidated statements of stockholders’ equity [added: (deficit)] for the years ended September 30, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019](#i418c637ca00a491b8b456ab257e63118_82)] [added: 2020](#ic48b56c04d544a579c809f199c9747de_79)] | | | [removed: [58](#i418c637ca00a491b8b456ab257e63118_82)] [added: [57](#ic48b56c04d544a579c809f199c9747de_79)] | | |

| [Consolidated statements of cash flows for the years ended September 30, [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019](#i418c637ca00a491b8b456ab257e63118_85)] [added: 2020](#ic48b56c04d544a579c809f199c9747de_82)] | | | [removed: [59](#i418c637ca00a491b8b456ab257e63118_85)] [added: [58](#ic48b56c04d544a579c809f199c9747de_82)] | | |

| [Notes to consolidated financial [removed: statements](#i418c637ca00a491b8b456ab257e63118_91)] [added: statements](#ic48b56c04d544a579c809f199c9747de_85)] | | | [removed: [60](#i418c637ca00a491b8b456ab257e63118_91)] [added: [59](#ic48b56c04d544a579c809f199c9747de_85)] | | |

| [removed: 10.3] [added: 10.4] | | | [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, 2008.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000095013708014107/c47904exv10w10.htm) | | |

| [removed: 10.4] [added: 10.5] | | | [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, 2002.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000093639202001464/a86033exv10w49.txt) | | |

| [removed: 10.5] [added: 10.6] | | | [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, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512052923/d298825dex104.htm) | | |

| [removed: 10.6] [added: 10.7] | | | [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, 2014.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454715000003/ex-10210xqq12015.htm) | | |

| [removed: 10.7] [added: 10.8] | | | [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, 2016.)](http://www.sec.gov/Archives/edgar/data/814547/000081454716000031/ex-10x110xqq32016.htm) | | |

| [removed: 10.8] [added: 10.9] | | | [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, 2008.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000095013708014107/c47904exv10w61.htm) | | |

| [removed: 10.9] [added: 10.10] | | | [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, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512025268/d287911dex102.htm) | | |

| [removed: 10.10] [added: 10.11] | | | [Letter Agreement dated February 6, 2012 by and between the Company and Mark Scadina. (Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K filed on February 10, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512052923/d298825dex103.htm) | | |

| [removed: 10.11] [added: 10.12] | | | [Letter Agreement dated March 7, 2012 by and between the Company and James M. Wehmann. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended December 31, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312513029957/d453682dex101.htm) | | |

| [removed: 10.12] [added: 10.13] | | | [Form of Amendment to Letter Agreement entered into with each of the Company’s executive officers. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended June 30, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454716000031/ex-10x210xqq32016.htm) | | |

| [removed: 10.13] [added: 10.14] | | | [Fair Isaac Corporation 2012 Long-Term Incentive Plan, as amended as of March 4, 2020. (Incorporated by reference to Exhibit 4.3 of the Company's Registration Statement on Form S-8, filed with the SEC on March 6, 2020.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312520065097/d887426dex43.htm) | | |

| [removed: 10.14] [added: 10.15] | | | [Form of Employee Non-Statutory Stock Option Agreement (U.S.) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended March 31, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512195607/d338746dex102.htm) | | |

| [removed: 10.15] [added: 10.16] | | | [Form of Employee Restricted Stock Unit Award Agreement (U.S.) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended March 31, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512195607/d338746dex103.htm) | | |

| [removed: 10.16] [added: 10.17] | | | [Form of Employee Non-Statutory Stock Option Agreement (International) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q for the quarter ended March 31, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512195607/d338746dex104.htm) | | |

| [removed: 10.17] [added: 10.18] | | | [Form of Employee Restricted Stock Unit Award Agreement (International) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q for the quarter ended March 31, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512195607/d338746dex105.htm) | | |

| [removed: 10.18] [added: 10.19] | | | [Form of Employee Non-Statutory Stock Option Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended December 31, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000005/ex-10x210xqq12017.htm) | | |

| [removed: 10.19] [added: 10.20] | | | [Form of Employee Restricted Stock Unit Award Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended December 31, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000005/ex-10x310xqq12017.htm) | | |

| [removed: 10.20] [added: 10.21] | | | [Form of Executive Non-Statutory Stock Option Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.4 to the Company’s Form 10-Q for the quarter ended December 31, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000005/ex-10x410xqq12017.htm) | | |

| [removed: 10.21] [added: 10.22] | | | [Form of Executive Non-Statutory Stock Option Agreement under the 2012 Long-Term Incentive Plan (U.S.), as amended November 6, 2018. (Incorporated by reference to Exhibit 10.30 to the Company’s Form 10-K for the fiscal year ended September 30, 2018.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454718000010/ex-103010xk2018stockoption.htm) | | |

| [removed: 10.22] [added: 10.23] | | | [Form of Executive Restricted Stock Unit Award Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q for the quarter ended December 31, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000005/ex-10x510xqq12017.htm) | | |

| [removed: 10.23] [added: 10.24] | | | [Form of Executive Restricted Stock Unit Award Agreement under the 2012 Long-Term Incentive Plan (U.S.), as amended November 8, 2018. (Incorporated by reference to Exhibit 10.32 to the Company’s Form 10-K for the fiscal year ended September 30, 2018.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454718000010/ex-103210xk2018rsuagmt.htm) | | |

| [removed: 10.24] [added: 10.25] | | | [Form of Employee Non Statutory Stock Option Agreement (International) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q for the quarter ended December 31, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000005/ex-10x610xqq12017.htm) | | |

| [removed: 10.25] [added: 10.26] | | | [Form of Employee Non Statutory Stock Option Agreement (United Kingdom) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.7 to the Company’s Form 10-Q for the quarter ended December 31, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000005/ex-10x710xqq12017.htm) | | |

| [removed: 10.26] [added: 10.27] | | | [Form of Employee Restricted Stock Unit Award Agreement (International) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.8 to the Company’s Form 10-Q for the quarter ended December 31, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000005/ex-10x810xqq12017.htm) | | |

| [removed: 10.27] [added: 10.28] | | | [Form of Employee Restricted Stock Unit Award Agreement (United Kingdom) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.9 to the Company’s Form 10-Q for the quarter ended December 31, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000005/ex-10x910xqq12017.htm) | | |

| [removed: 10.28] [added: 10.29] | | | [Form of Director Non-Statutory Stock Option Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.6 to the Company’s Form 10-Q for the quarter ended March 31, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512195607/d338746dex106.htm) | | |

| [removed: 10.29] [added: 10.30] | | | [Form of Director Restricted Stock Unit Award Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference by Exhibit 10.7 to the Company's Form 10-Q for the quarter ended March 31, 2012.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312512195607/d338746dex107.htm) | | |

| [removed: 10.30] [added: 10.31] | | | [Form of Director Non-Statutory Stock Option Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended March 31, 2017.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000008/ficoex-10x110xqq22017.htm) | | |

| [removed: 10.31] [added: 10.32] | | | [Form of Director Restricted Stock Unit Award Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended March 31, 2017.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000008/ficoex-10x210xqq22017.htm) | | |

| [removed: 10.32] [added: 10.33] | | | [Form of Performance Share Unit Award Agreement (fiscal 2017 grants) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.10 to the Company’s Form 10-Q for the quarter ended December 31, 2016.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454717000005/ex-10x1010xqq12017.htm) | | |

| [removed: 10.33] [added: 10.34] | | | [Form of Performance Share Unit Agreement (fiscal 2018) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended December 31, 2017.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000162828018000591/ficoex-10210xqq12018.htm) | | |

| [removed: 10.34] [added: 10.35] | | | [Form of Performance Share Unit Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.44 to the Company’s Form 10-K for the fiscal year ended September 30, 2018.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454718000010/ex-104410xk2018psuagmt.htm) | | |

| [removed: 10.35] [added: 10.36] | | | [Form of Performance Share Unit Agreement under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended December 31, 2019.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454716000023/ex-10210xqq12016msu.htm) | | |

| [removed: 10.36] [added: 10.37] | | | [Form of Market Share Unit Award Agreement (fiscal 2016 grants) under the 2012 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended December 31, 2015.) (1)](http://www.sec.gov/Archives/edgar/data/814547/000081454716000023/ex-10210xqq12016msu.htm) | | |

| 10.3 | | | [Supplemental Indenture dated as of December 17, 2021 by and between the Company and U.S. Bank National Association, as trustee, which includes the form of 4.00% Senior Notes due 2028. (Incorporated by reference to Exhibit 4.2 to the Company’s Form 8-K filed December 17, 2021).](http://www.sec.gov/Archives/edgar/data/814547/000119312521361078/d273800dex42.htm) | | |

| 10.58 | | | [Letter Agreement dated January 6, 2022 by and between the Company and Claus Moldt. (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on January 10, 2022) (1)](http://www.sec.gov/Archives/edgar/data/814547/000119312522005793/d124012dex101.htm) | | |

| | | | | | |

| | | | | | |

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| | | | | | | | | |

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

| | | | FAIR ISAAC CORPORATION | | | | | |

| | | | By | | | /s/ MICHAEL I. MCLAUGHLIN | | |

| | | | | | | Michael I. McLaughlin | | |

| | | | | | | *Executive Vice President and Chief Financial Officer* | | |

DATE: November 10, 2021

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael I.

McLaughlin his or her attorney-in-fact, with full power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

| /s/ WILLIAM J. LANSING | | | Chief Executive Officer (Principal Executive Officer) and Director | | | November 10, 2021 | | |

| William J. Lansing | | | | | | | | |

| /s/ MICHAEL I. MCLAUGHLIN | | | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | | | November 10, 2021 | | |

| Michael I. McLaughlin | | | | | | | | |

| /s/ MICHAEL S. LEONARD | | | Vice President and Chief Accounting Officer (Principal Accounting Officer) | | | November 10, 2021 | | |

| Michael S. Leonard | | | | | | | | |

| /s/ FABIOLA R. ARREDONDO | | | Director | | | November 10, 2021 | | |

| Fabiola R. Arredondo | | | | | | | | |

| /s/ BRADEN R. KELLY | | | Director | | | November 10, 2021 | | |

| Braden R. Kelly | | | | | | | | |

| /s/ JAMES D. KIRSNER | | | Director | | | November 10, 2021 | | |

| James D. Kirsner | | | | | | | | |

| /s/ EVA MANOLIS | | | Director | | | November 10, 2021 | | |

| Eva Manolis | | | | | | | | |

| /s/ MARC F. MCMORRIS | | | Director | | | November 10, 2021 | | |

| Marc F. McMorris | | | | | | | | |

| /s/ JOANNA REES | | | Director | | | November 10, 2021 | | |

| Joanna Rees | | | | | | | | |

| /s/ DAVID A. REY | | | Director | | | November 10, 2021 | | |

| David A. Rey | | | | | | | | |

None

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| | | | | | | | | |

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

| | | | FAIR ISAAC CORPORATION | | | | | |

| | | | | | | | | |

| | | | By | | | /s/ MICHAEL I. MCLAUGHLIN | | |

| | | | | | | Michael I. McLaughlin | | |

| | | | | | | *Executive Vice President and Chief Financial Officer* | | |

DATE: November 9, 2022

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael I.

McLaughlin his or her attorney-in-fact, with full power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

| | | | | | | | | |

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

| /s/ WILLIAM J. LANSING | | | Chief Executive Officer (Principal Executive Officer) and Director | | | November 9, 2022 | | |

| William J. Lansing | | | | | | | | |

| | | | | | | | | |

| /s/ MICHAEL I. MCLAUGHLIN | | | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | | | November 9, 2022 | | |

| Michael I. McLaughlin | | | | | | | | |

| | | | | | | | | |

| /s/ MICHAEL S. LEONARD | | | Vice President and Chief Accounting Officer (Principal Accounting Officer) | | | November 9, 2022 | | |

| Michael S. Leonard | | | | | | | | |

| | | | | | | | | |

| /s/ FABIOLA R. ARREDONDO | | | Director | | | November 9, 2022 | | |

| Fabiola R. Arredondo | | | | | | | | |

| | | | | | | | | |

| /s/ BRADEN R. KELLY | | | Director | | | November 9, 2022 | | |

| Braden R. Kelly | | | | | | | | |

| | | | | | | | | |

| /s/ JAMES D. KIRSNER | | | Director | | | November 9, 2022 | | |

| James D. Kirsner | | | | | | | | |

| | | | | | | | | |

| /s/ EVA MANOLIS | | | Director | | | November 9, 2022 | | |

| Eva Manolis | | | | | | | | |

| | | | | | | | | |

| /s/ MARC F. MCMORRIS | | | Director | | | November 9, 2022 | | |

| Marc F. McMorris | | | | | | | | |