Item 3. Legal Proceedings

FICO is a defendant in consolidated putative class action lawsuits brought in the Northern District of Illinois against FICO and the credit bureaus, Equifax, Experian and TransUnion, alleging antitrust claims in connection with the distribution of FICO Scores. On November 24, 2024, the court ruled on FICO’s and the credit bureaus’ motions to dismiss the plaintiffs’ amended complaints. The court dismissed with prejudice all claims in the lawsuit other than a Sherman Act Section 2 claim and accompanying state law claims against FICO, which were allowed to proceed through the discovery stage of the litigation.

On September 29, 2026, FICO and the plaintiffs entered into a term sheet memorializing the material terms of a proposed settlement of the lawsuits. In consideration of a cash payment by FICO to the plaintiffs of $65.0 million and certain compliance undertakings, the settlement would fully resolve all remaining claims asserted against FICO in the lawsuits. The proposed settlement does not include any admission of wrongdoing or liability by FICO, which denies any wrongdoing. We anticipate the parties will enter into definitive settlement agreements in the first quarter of fiscal 2027 reflecting the terms of the settlement as set forth in the term sheet. The settlement remains subject to final court approval, and there can be no assurance that the court will approve the proposed settlement. If final court approval is not obtained, FICO intends to vigorously defend against the remaining claims in these lawsuits.