Fair Isaac 10-Q 2025-12-31

Filed 2026-01-28. 8 sections, 145K characters. Original on sec.gov · Markdown · JSON

Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended December 31, 2025


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

For the transition period from to

Commission File Number 1-11689

Fair Isaac Corporation

(Exact name of registrant as specified in its charter)


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

5 West Mendenhall, Suite 105		59715
Bozeman,	Montana
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 406-982-7276

Securities registered pursuant to Section 12(b) of the Act:


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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes			☐			No			☒

The number of shares of common stock outstanding on January 21, 2026 was 23,722,134 (excluding 65,134,649 shares held by us as treasury stock).

TABLE OF CONTENTS


	PART I – FINANCIAL INFORMATION

Item 1.	Unaudited Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	28

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
Signatures		32

PART I – FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	December 31, 2025		September 30, 2025
	(In thousands, except par value data)
Assets
Current assets:
Cash and cash equivalents	$	162,034	$	134,136
Accounts receivable, net	495,117		529,148
Prepaid expenses and other current assets	41,656		41,881
Total current assets	698,807		705,165
Marketable securities	55,866		54,625
Property and equipment, net	73,711		67,713
Operating lease right-of-use assets	24,725		26,213
Goodwill	783,520		783,340

Deferred income taxes	110,980		118,553
Other assets	106,551		112,524
Total assets	$	1,854,160	$	1,868,133
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	26,565	$	32,315
Accrued compensation and employee benefits	76,809		115,369
Other accrued liabilities	75,576		114,618
Deferred revenue	173,371		187,372
Current maturities on debt	399,738		399,541
Total current liabilities	752,059		849,215
Long-term debt	2,797,091		2,656,150
Operating lease liabilities	17,895		19,187
Other liabilities	95,249		89,365
Total liabilities	3,662,294		3,613,917
Commitments and contingencies
Stockholders’ deficit:
Preferred stock ($0.01 par value; 1,000 shares authorized; none issued and outstanding)	—		—
Common stock ($0.01 par value; 200,000 shares authorized, 88,857 shares issued and 23,763 and 23,764 shares outstanding at December 31, 2025 and September 30, 2025, respectively)	238		238
Additional paid-in-capital	1,262,018		1,331,120
Treasury stock, at cost (65,094 and 65,093 shares at December 31, 2025 and September 30, 2025, respectively)	(7,689,462)		(7,537,908)
Retained earnings	4,711,189		4,552,816
Accumulated other comprehensive loss	(92,117)		(92,050)
Total stockholders’ deficit	(1,808,134)		(1,745,784)
Total liabilities and stockholders’ deficit	$	1,854,160	$	1,868,133

See accompanying notes.

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)


	Quarter Ended December 31,
	2025		2024
	(In thousands, except per share data)
Revenues:
On-premises and SaaS software	$	188,221	$	186,011
Professional services	19,204		18,282
Scores	304,534		235,675
Total revenues	511,959		439,968
Operating expenses:
Cost of revenues	87,261		87,345
Research and development	49,912		45,145
Selling, general and administrative	140,737		127,950



Total operating expenses	277,910		260,440
Operating income	234,049		179,528
Interest expense, net	(42,006)		(29,488)
Other income (expense), net	(112)		89
Income before income taxes	191,931		150,129
Income tax provision (benefit)	33,558		(2,399)
Net income	158,373		152,528
Other comprehensive loss:
Foreign currency translation adjustments	(67)		(16,054)
Comprehensive income	$	158,306	$	136,474
Earnings per share:
Basic	$	6.68	$	6.26
Diluted	$	6.61	$	6.14
Shares used in computing earnings per share:
Basic	23,723		24,378
Diluted	23,958		24,827

See accompanying notes.

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)


	Common Stock			Additional Paid-in-Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Deficit
(In thousands)	Shares	Par Value
Balance at September 30, 2025	23,764	$	238	$	1,331,120	$	(7,537,908)	$	4,552,816	$	(92,050)	$	(1,745,784)
Share-based compensation

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Statements contained in this report that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). In addition, certain statements in our future filings with the Securities and Exchange Commission (“SEC”), in press releases, and in oral and written statements made by us or with our approval that are not statements of historical fact constitute forward-looking statements within the meaning of the PSLRA. 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 products and services, their characteristics, performance, sales potential or effect in use by customers. Words such as “believes,” “anticipates,” “expects,” “intends,” “targeted,” “should,” “potential,” “goals,” “strategy,” “outlook,” “plan,” “estimated,” “will,” variations of these terms and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 and in subsequent filings with the SEC. The performance of our business and our securities may be adversely affected by these factors and by other factors common to other businesses and investments, or to the general economy. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We disclaim any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 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 Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

OVERVIEW

We were founded in 1956 on the premise that data, used intelligently, can improve business decisions. Today, FICO’s software and the widely used FICO® Score operationalize analytics, enabling thousands of businesses in more than 80 countries to uncover new opportunities, make timely decisions that matter, and execute them at scale. Most leading banks and credit card issuers rely on our solutions, as do insurers, retailers, telecommunications providers, automotive 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® Scores — the standard measure of consumer credit risk in the United States (“U.S.”) — empowering them to increase financial literacy and manage their financial health.

Our business consists of two operating segments: Scores and Software.

Our Scores segment includes our business-to-business (“B2B”) scoring solutions and services which give our clients access to predictive credit and other scores that can be easily integrated into their transaction streams and decision-making processes. This segment also includes our business-to-consumer (“B2C”) scoring solutions, including our myFICO.com subscription offerings.

Our Software segment includes pre-configured analytic and decision management solutions designed for a specific type of business need or process — such as account origination, customer management, customer engagement, fraud detection, and marketing — as well as associated professional services. This segment also includes FICO® Platform, a modular software offering designed to support advanced analytic and decision use cases, as well as stand-alone analytic and decisioning software that can be configured by our customers to address a wide variety of business use cases. Our offerings are available to our customers as software-as-a-service (“SaaS”) or as on-premises software.

Highlights from the quarter ended December 31, 2025

Total revenues were $512.0 million during the quarter ended December 31, 2025, a 16% increase from the quarter ended December 31, 2024.
Revenues for our Scores segment were $304.5 million during the quarter ended December 31, 2025, a 29% increase from the quarter ended December 31, 2024.
Annual Recurring Revenue for our Software segment as of December 31, 2025 was $766.0 million, a 5% increase from December 31, 2024.
Dollar-Based Net Retention Rate for our Software segment was 103% as of December 31, 2025.
Operating income was $234.0 million during the quarter ended December 31, 2025, a 30% increase from the quarter ended December 31, 2024.
Net income was $158.4 million during the quarter ended December 31, 2025, a 4% increase from the quarter ended December 31, 2024.
Diluted EPS was $6.61 during the quarter ended December 31, 2025, an 8% increase from the quarter ended December 31, 2024.
Cash flows from operating activities were $174.1 million during the quarter ended December 31, 2025, compared with $194.0 million during the quarter ended December 31, 2024.
Cash and cash equivalents were $162.0 million as of December 31, 2025, compared with $134.1 million as of September 30, 2025.
Total debt balance was $3.2 billion as of December 31, 2025, compared with $3.1 billion as of September 30, 2025.
Total share repurchases during the quarter ended December 31, 2025 were $162.7 million, compared with $159.7 million during the quarter ended December 31, 2024.

Key performance metrics for Software segment

Annual Contract Value Bookings (“ACV Bookings”)

Management regards ACV Bookings as an important indicator of future revenues, but it is not comparable to, nor is it a substitute for, an analysis of our revenues and other U.S. generally accepted accounting principles (“U.S. GAAP”) measures. We define ACV Bookings as the average annualized value of software contracts signed in the current reporting period that generate current and future on-premises and SaaS software revenue. We only include contracts with an initial term of at least 24 months and we exclude perpetual licenses and other software revenues that are non-recurring in nature. For renewals of existing software subscription contracts, we count only incremental annual revenue expected over the current contract as ACV Bookings.

ACV Bookings is calculated by dividing the total expected contract value by the contract term in years. The expected contract value equals the fixed amount — including guaranteed minimums, if any — stated in the contract, plus estimates of future usage-based fees. We develop estimates from discussions with our customers and examinations of historical data from similar products and customer arrangements. Differences between estimates and actual results occur due to variability in the estimated usage. This variability can be the 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. For the periods presented, ACV Bookings related to estimates of future usage-based fees was approximately 30% of the total ACV Bookings amount on an annualized basis. Differences between the initial estimates of future usage-based fees and actual results historically have not been material and we do not currently expect that they will be materially different in the future.

We disclose estimated revenue expected to be recognized in the future related to remaining performance obligations in Note 7 to the accompanying condensed consolidated financial statements. However, we believe ACV Bookings is a useful supplemental measure of our business as it includes estimated revenues and future billings excluded from Note 7, such as usage-based fees and guaranteed minimums derived from our on-premises software licenses, among others.

The following table summarizes our ACV Bookings during the periods indicated:


	Quarter Ended December 31,
	2025		2024
	(In millions)
Total on-premises and SaaS software	$	37.8	$	21.2

Annual Recurring Revenue (“ARR”)

Accounting Standards Codification Topic 606, Revenue from Contracts 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 remaining portion of our on-premises software subscription revenue including maintenance and usage-based fees are recognized over the life of the contract. This point-in-time recognition of a portion of our on-premises software subscription revenue creates significant variability in the revenue recognized period to period based on the timing of the subscription start date and the subscription term. Furthermore, this point-in-time revenue recognition can create a significant difference between the timing of our revenue recognition and the actual customer billing under the contract. We use ARR to measure the underlying performance of our subscription-based contracts and mitigate the impact of this variability. ARR is defined as the annualized revenue run-rate of on-premises and SaaS software agreements within a quarterly reporting period, and as such, is different from the timing and amount of revenue recognized. All components of our software licensing and subscription arrangements that are not expected to recur (primarily perpetual licenses) are excluded. We calculate ARR as the quarterly recurring revenue run-rate multiplied by four.

The following table summarizes our ARR for on-premises and SaaS software exiting each of the dates presented:


	March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024			March 31, 2025			June 30, 2025			September 30, 2025			December 31, 2025
ARR	(In millions)
Platform	$	201.4		$	215.1		$	227.0		$	227.7		$	234.7		$	254.2		$	263.6		$	302.6
Non-platform	495.6			494.5			494.2			501.6			479.9			484.9			483.7			463.4
Total	$	697.0		$	709.6		$	721.2		$	729.3		$	714.6		$	739.1		$	747.3		$	766.0

Percentage
Platform	29		%	30		%	31		%	31		%	33		%	34		%	35		%	40		%
Non-platform	71		%	70		%	69		%	69		%	67		%	66		%	65		%	60		%
Total	100		%	100		%	100		%	100		%	100		%	100		%	100		%	100		%

YoY Change
Platform	32		%	31		%	31		%	20		%	17		%	18		%	16		%	33		%
Non-platform	8		%	3		%	—		%	1		%	(3)		%	(2)		%	(2)		%	(8)		%
Total	14		%	10		%	8		%	6		%	3		%	4		%	4		%	5		%

Dollar-Based Net Retention Rate (“DBNRR”)

We consider DBNRR to be an important measure of our success in retaining and growing revenue from our existing customers. To calculate DBNRR for any period, we compare the ARR at the end of the prior comparable quarter (“base ARR”) to the ARR from that same cohort of customers at the end of the current quarter (“retained ARR”); we then divide the retained ARR by the base ARR to arrive at the DBNRR. Our calculation includes the positive impact among this cohort of customers of selling additional products, price increases and increases in usage-based fees, and the negative impact of customer attrition, price decreases, and decreases in usage-based fees during the period. However, the calculation does not include the positive impact from sales to any new customers acquired during the period. Our DBNRR may increase or decrease from period to period as a result of various factors, including the timing of new sales and customer renewal rates.

The following table summarizes our DBNRR for on-premises and SaaS software exiting each of the dates presented:


	March 31, 2024		June 30, 2024		September 30, 2024		December 31, 2024		March 31, 2025		June 30, 2025		September 30, 2025		December 31, 2025
DBNRR
Platform	126	%	124	%	123	%	112	%	110	%	115	%	112	%	122	%
Non-platform	106	%	101	%	99	%	100	%	96	%	97	%	97	%	91	%
Total	112	%	108	%	106	%	105	%	102	%	103	%	102	%	103	%

RESULTS OF OPERATIONS

We are organized into two reportable segments: Scores and Software. Although we sell solutions and services into a large number of end user product and industry markets, our reportable business segments reflect the primary method in which management organizes and evaluates internal financial information to make operating decisions and assess performance.

Segment revenues, operating income, and related financial information, including disaggregation of revenue, are set forth in Note 7 and Note 11 to the accompanying condensed consolidated financial statements.

Revenues

The following tables set forth certain summary information on a segment basis related to our revenues for the quarters ended December 31, 2025 and 2024:


	Quarter Ended December 31,				Percentage of Revenues				Period-to-Period Change		Period-to-Period Percentage Change
Segment	2025		2024		2025		2024
	(In thousands)								(In thousands)
Scores	$	304,534	$	235,675	59	%	54	%	$	68,859	29	%
Software	207,425		204,293		41	%	46	%	3,132		2	%
Total	$	511,959	$	439,968	100	%	100	%	71,991		16	%

Scores

Scores segment revenues increased $68.9 million due to an increase of $66.2 million in our business-to-business scores revenue and an increase of $2.7 million in our business-to-consumer scores revenue. The increase in business-to-business scores revenue was primarily attributable to a higher unit price and an increase in volume of mortgage originations. The increase in business-to-consumer scores revenue was primarily attributable to an increase in royalties derived from scores sold indirectly to consumers through credit reporting agencies.

Software

The following table provides information about disaggregated revenue for our Software segment by revenue types:


	Quarter Ended December 31,				Period-to-Period Change		Period-to-Period Percentage Change
	2025		2024
	(In thousands)				(In thousands)
On-premises and SaaS software	$	188,221	$	186,011	$	2,210	1	%
Professional services	19,204		18,282		922		5	%
Total	$	207,425	$	204,293	3,132		2	%

Software segment revenues increased $3.1 million due to a $2.2 million increase in our on-premises and SaaS software revenue and a $0.9 million increase in our professional services revenue. The increase in our on-premises and SaaS software revenue was primarily attributable to an increase in revenue recognized over time largely driven by SaaS growth for our Platform products.

Operating Expenses and Other Income (Expense), Net

The following tables set forth certain summary information related to our condensed consolidated statements of income and comprehensive income for the quarters ended December 31, 2025 and 2024:


	Quarter Ended December 31,				Percentage of Revenues				Period-to-Period Change		Period-to- Period Percentage Change
	2025		2024		2025		2024
	(In thousands, except employees)								(In thousands, except employees)
Revenues	$	511,959	$	439,968	100	%	100	%	$	71,991	16	%
Operating expenses:
Cost of revenues	87,261		87,345		17	%	20	%	(84)		—	%
Research and development	49,912		45,145		10	%	10	%	4,767		11	%
Selling, general and administrative	140,737		127,950		27	%	29	%	12,787		10	%



Total operating expenses	277,910		260,440		54	%	59	%	17,470		7	%
Operating income	234,049		179,528		46	%	41	%	54,521		30	%
Interest expense, net	(42,006)		(29,488)		(8)	%	(7)	%	(12,518)		42	%
Other income (expense), net	(112)		89		—	%	—	%	(201)		(226)	%
Income before income taxes	191,931		150,129		38	%	34	%	41,802		28	%
Income tax provision (benefit)	33,558		(2,399)		7	%	(1)	%	35,957		(1,499)	%
Net income	$	158,373	$	152,528	31	%	35	%	5,845		4	%
Number of employees at quarter end	3,762		3,604						158		4	%

Cost of Revenues

Cost of revenues consists primarily of employee salaries, incentives, and benefits for personnel directly involved in delivering software products, operating SaaS infrastructure, and providing support, implementation and consulting services; overhead, facilities and data center costs; software royalty fees; consumer reporting agency data and processing services; third-party hosting fees related to our SaaS services; travel costs; and outside services.

Cost of revenues remained consistent quarter-over-prior year quarter. Cost of revenues as a percentage of revenues decreased to 17% during the quarter ended December 31, 2025 from 20% during the quarter ended December 31, 2024, primarily due to increased sales of our higher-margin Scores products.

Research and Development

Research and development expenses include personnel and related overhead costs incurred in the development of new products and services, including research of mathematical and statistical models and development of new versions of Software products.

The quarter-over-prior year quarter increase in research and development expenses of $4.8 million was primarily attributable to a $4.1 million increase in infrastructure and facilities costs, and a $2.4 million increase in personnel and labor costs, partially offset by a $1.7 million decrease in outside services and other costs. The increase in infrastructure and facilities costs was primarily attributable to increased third-party data center hosting costs. The increase in personnel and labor costs was primarily attributable to increased headcount and increased share-based compensation costs. The decrease in outside services and other costs was primarily attributable to decreased third-party contractor costs. Research and development expenses as a percentage of revenues remained consistent at 10% during each of the quarters ended December 31, 2025 and 2024.

Selling, General and Administrative

Selling, general and administrative expenses consist principally of employee salaries, incentives, commissions and benefits; travel costs; overhead costs; advertising and other promotional expenses; corporate facilities expenses; legal expenses; and business development expenses.

The quarter-over-prior year quarter increase in selling, general and administrative expenses of $12.8 million was primarily attributable to a $9.0 million increase in personnel and labor costs, a $2.3 million increase in outside services costs, and a $1.5 million increase in marketing and other costs. The increase in personnel and labor costs was primarily attributable to increased headcount, share-based compensation costs, market base-pay adjustments, and fringe benefit costs related to our supplemental retirement and savings plan. The increase in outside services costs was primarily attributable to increased legal costs. The increase in marketing and other costs was primarily attributable to increased advertising costs, partially offset by decreased non-income tax costs and decreased bad debt costs. Selling, general and administrative expenses as a percentage of revenues decreased to 27% during the quarter ended December 31, 2025 from 29% during the quarter ended December 31, 2024.

Interest Expense, Net

Interest expense includes interest on the senior notes issued in May 2025, December 2021, December 2019 and May 2018, as well as interest and credit agreement fees on the revolving line of credit and, for the prior year quarter, term loans. On our condensed consolidated statements of income and comprehensive income, interest expense is netted with interest income, which is derived primarily from the investment of funds in excess of our immediate operating requirements.

The quarter-over-prior year quarter increase in net interest expense of $12.5 million was primarily attributable to the $1.5 billion of 2025 Senior Notes (as defined below), partially offset by a lower average outstanding balance and a lower average interest rate on borrowings under our credit agreement during the quarter ended December 31, 2025.

Other Income (Expense), Net

Other income (expense), net consists primarily of unrealized investment gains/losses and realized gains/losses on marketable securities classified as trading securities, exchange rate gains/losses resulting from remeasurement of foreign-currency-denominated receivable and cash balances held by our various reporting entities into their respective functional currencies at period-end market rates, net of the impact of offsetting foreign currency forward contracts, and other non-operating items.

The quarter-over-prior year quarter change in other income (expense), net of $0.2 million was primarily attributable to an increase in foreign exchange rate losses resulting from remeasurement of foreign-currency-denominated receivable and cash balances held by our various reporting entities into their respective functional currencies at period-end market rates.

Income Tax Provision (Benefit)

The effective income tax rate was 17.5% and (1.6)% during the quarters ended December 31, 2025 and 2024, respectively. The income tax provision (benefit) during interim quarterly reporting periods is based on our estimates of the effective tax rates for the full fiscal year. The effective tax rate in any quarter can also be affected positively or negatively by adjustments that are required to be reported in the specific quarter of resolution.

The effective tax rates for the quarters ended December 31, 2025 and 2024 were both favorably impacted by the recording of excess tax benefits relating to stock awards. The impact is dependent upon grants of share-based compensation and the future stock price in relation to the fair value of awards on the grant date. The decrease in stock price for awards that vested in December 2025 resulted in a decreased net excess tax benefit for the quarter ended December 31, 2025.

Operating Income

The following tables set forth certain summary information on a segment basis related to our operating income for the quarters ended December 31, 2025 and 2024:


	Quarter Ended December 31,				Period-to-Period Change		Period-to-Period Percentage Change
Segment	2025		2024
	(In thousands)				(In thousands)
Scores	$	267,853	$	203,771	$	64,082	31	%
Software	58,614		60,742		(2,128)		(4)	%
Total segment operating income	326,467		264,513		61,954		23	%
Unallocated corporate expenses	(48,149)		(44,331)		(3,818)		9	%
Unallocated share-based compensation	(44,269)		(40,654)		(3,615)		9	%



Operating income	$	234,049	$	179,528	54,521		30	%


	Scores								Software
	Quarter Ended December 31,				Percentage of Revenues				Quarter Ended December 31,				Percentage of Revenues
	2025		2024		2025		2024		2025		2024		2025		2024
	(In thousands)								(In thousands)
Segment revenues	$	304,534	$	235,675	100	%	100	%	$	207,425	$	204,293	100	%	100	%
Segment operating expense	(36,681)		(31,904)		(12)	%	(14)	%	(148,811)		(143,551)		(72)	%	(70)	%
Segment operating income	$	267,853	$	203,771	88	%	86	%	$	58,614	$	60,742	28	%	30	%

The quarter-over-prior year quarter increase in operating income of $54.5 million was primarily attributable to a $72.0 million increase in segment revenues, partially offset by a $10.0 million increase in segment operating expenses, a $3.8 million increase in corporate expenses, and a $3.6 million increase in share-based compensation expense.

At the segment level, the quarter-over-prior year quarter increase in segment operating income of $62.0 million was the result of a $64.1 million increase in our Scores segment operating income, partially offset by a $2.1 million decrease in our Software segment operating income.

The quarter-over-prior year quarter increase in Scores segment operating income of $64.1 million was due to a $68.9 million increase in segment revenue, partially offset by a $4.8 million increase in segment operating expenses. Scores segment operating income as a percentage of segment revenue increased to 88% from 86%, primarily due to higher business-to-business scores revenue driven by increased unit pricing and greater mortgage origination volumes.

The quarter-over-prior year quarter decrease in Software segment operating income of $2.1 million was due to a $5.2 million increase in segment operating expenses, partially offset by a $3.1 million increase in segment revenue. Software segment operating income as a percentage of segment revenue decreased to 28% from 30%, primarily attributable to an increase in third-party data center hosting costs and a decrease in sales of higher-margin software recognized at a point in time.

CAPITAL RESOURCES AND LIQUIDITY

Outlook

As of December 31, 2025, we had $162.0 million in cash and cash equivalents, which included $109.1 million held by our foreign subsidiaries. We believe our cash and cash equivalents balances, including those held by our foreign subsidiaries, as well as available borrowings from our $1.0 billion revolving line of credit and anticipated cash flows from operating activities, will be sufficient to fund our working and other capital requirements for at least the next 12 months and thereafter for the foreseeable future, including the $400.0 million principal payment on the 2018 Senior Notes (as defined below) due over the next 12 months. Under our current financing arrangements, we have no other significant debt obligations maturing over the next 12 months. 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.

In the normal course of business, we evaluate the merits of acquiring technology or businesses, or establishing strategic relationships with or investing in these businesses. We may elect to use available cash and cash equivalents to fund such activities in the future. In the event additional needs for cash arise, or if we refinance our existing debt, we may raise additional funds from a combination of sources, including the potential issuance of debt or equity securities. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to take advantage of unanticipated opportunities or respond to competitive pressures could be limited.

Summary of Cash Flows


	Quarter Ended December 31,				Period-to-Period Change
	2025		2024
	(In thousands)
Cash provided by (used in):
Operating activities	$	174,082	$	193,997	$	(19,915)
Investing activities	(12,734)		(8,942)		(3,792)
Financing activities	(133,482)		(144,218)		10,736
Effect of exchange rate changes on cash	32		(7,250)		7,282
Increase in cash and cash equivalents	$	27,898	$	33,587	(5,689)

Cash Flows from Operating Activities

Our primary method for funding operations and growth has been through cash flows generated from operating activities. Net cash provided by operating activities decreased to $174.1 million during the quarter ended December 31, 2025 from $194.0 million during the quarter ended December 31, 2024. The $19.9 million decrease was attributable to a $43.9 million decrease due to the timing of receipts and payments in our ordinary course of business, partially offset by an $18.1 million increase in non-cash items and a $5.9 million increase in net income.

Cash Flows from Investing Activities

Net cash used in investing activities increased to $12.7 million for the quarter ended December 31, 2025 from $8.9 million for the quarter ended December 31, 2024. The $3.8 million increase was primarily attributable to a $2.2 million increase in purchases, net of proceeds, of marketable securities and a $2.2 million increase in capitalized internal-use software costs.

Cash Flows from Financing Activities

Net cash used in financing activities decreased to $133.5 million for the quarter ended December 31, 2025 from $144.2 million for the quarter ended December 31, 2024. The $10.7 million decrease was primarily attributable to a $91.7 million decrease in taxes paid related to net share settlement of equity awards, partially offset by a $71.3 million decrease in proceeds, net of payments, from our revolving line of credit and term loans and an $8.6 million increase in repurchases of common stock.

Repurchases of Common Stock

In June 2025, our Board of Directors approved a stock repurchase program (the “June 2025 program”), replacing our previously authorized July 2024 stock repurchase program, which was terminated prior to its expiration. The June 2025 program is open-ended and authorizes repurchases of shares of our common stock from time to time up to an aggregate cost of $1.0 billion in the open market or in negotiated transactions. The June 2025 program remains in effect until the total authorized amount is expended or until further action by our Board of Directors. As of December 31, 2025, we had $180.9 million remaining under the June 2025 program. We expended $162.7 million during the quarter ended December 31, 2025 under the June 2025 program and $159.7 million during the quarter ended December 31, 2024 under previously authorized stock repurchase programs.

Revolving Line of Credit

We have a $1.0 billion unsecured revolving line of credit with a syndicate of banks that matures on May 13, 2030. Borrowings under the revolving line of credit can be used for working capital and general corporate purposes and may also be used for the refinancing of existing debt, acquisitions, and the repurchase of our common stock. Interest rates on amounts borrowed under the revolving line of credit are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5%, and (c) the Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 1%, plus, in each case, an applicable margin, (ii) the Daily Simple SOFR plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement), or (iii) term SOFR (without a credit spread adjustment) plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement). The applicable margin for base rate borrowings and for SOFR borrowings is determined based on our consolidated leverage ratio. The applicable margin for base rate borrowings ranges from 0% to 0.75% per annum and for SOFR borrowings ranges from 1% to 1.75% per annum. In addition, we must pay certain credit facility fees. The credit agreement contains certain restrictive covenants including a maximum consolidated leverage ratio of 3.5 to 1.0, subject to a step up to 4.0 to 1.0 following certain permitted acquisitions and subject to certain conditions, and contains other covenants typical of an unsecured credit facility.

As of December 31, 2025, we had $415.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 5.000%, and we were in compliance with all financial covenants under the credit agreement.

Senior Notes

On May 8, 2018, we issued $400 million of senior notes in a private offering to qualified institutional investors (the “2018 Senior Notes”). The 2018 Senior Notes require interest payments semi-annually at a rate of 5.25% per annum and will mature on May 15, 2026. On December 6, 2019, we issued $350 million of senior notes in a private offering to qualified institutional investors (the “2019 Senior Notes”). The 2019 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028. On December 17, 2021, we issued $550 million of additional senior notes of the same class as the 2019 Senior Notes in a private offering to qualified institutional investors (the “2021 Senior Notes”). The 2021 Senior Notes require interest payments semi-annually at a rate of 4.00% per annum and will mature on June 15, 2028, the same date as the 2019 Senior Notes. On May 13, 2025, we issued $1.5 billion of senior notes in a private offering to qualified institutional investors (the “2025 Senior Notes,” and collectively with the 2018 Senior Notes, the 2019 Senior Notes and the 2021 Senior Notes, the “Senior Notes”). The 2025 Senior Notes require interest payments semi-annually at a rate of 6.00% per annum and will mature on May 15, 2033. The indentures for the Senior Notes contain certain covenants typical of unsecured obligations. As of December 31, 2025, the carrying value of the Senior Notes was $2.8 billion and we were in compliance with all financial covenants under these obligations.

CRITICAL ACCOUNTING ESTIMATES

We prepare our condensed consolidated financial statements in conformity with U.S. GAAP. These accounting principles require management to make certain judgments and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. We periodically evaluate our estimates including those relating to revenue recognition, goodwill resulting from business combinations and other long-lived assets — impairment assessment, share-based compensation, income taxes, and contingencies and litigation. We base our estimates on historical experience and various other assumptions that we believe to be reasonable based on the specific circumstances, the results of which form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and such differences could be material to our financial condition and results of operations. Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations.

You should carefully consider the critical accounting estimates disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended September 30, 2025 (“Annual Report on Form 10-K”). There have been no significant changes from the critical accounting estimates disclosed in our Annual Report on Form 10-K.

New Accounting Pronouncements

For information about recent accounting pronouncements not yet adopted and the impact on our consolidated financial statements, refer to Part I, Item 1, “Unaudited Financial Statements,” Note 1, “Nature of Business” in our accompanying Notes to Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk Disclosures

We are exposed to market risk related to changes in interest rates and foreign exchange rates. We do not use derivative financial instruments for speculative or trading purposes.

Interest Rate

We maintain an investment portfolio consisting of bank deposits and money market funds. The funds provide daily liquidity and may be subject to interest rate risk and fall in value if market interest rates increase. We do not expect our operating expenses to be affected to any significant degree by a sudden change in market interest rates. The following table presents the principal amounts and related weighted-average yields for our investments with interest rate risk at December 31, 2025 and September 30, 2025:


	December 31, 2025						September 30, 2025
	Cost Basis		Carrying Amount		Average Yield		Cost Basis		Carrying Amount		Average Yield
	(Dollars in thousands)
Cash and cash equivalents	$	162,034	$	162,034	2.45	%	$	134,136	$	134,136	1.77	%

The fair value of the Senior Notes may increase or decrease due to various factors, including fluctuations in market interest rates and fluctuations in general economic conditions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Capital Resources and Liquidity” for additional information on the Senior Notes. The following table presents the face values and fair values for the Senior Notes at December 31, 2025 and September 30, 2025:


	December 31, 2025				September 30, 2025
	Face Value		Fair Value		Face Value		Fair Value
	(In thousands)
The 2018 Senior Notes	$	400,000	$	399,500	$	400,000	$	399,500
The 2019 Senior Notes and the 2021 Senior Notes	900,000		885,375		900,000		875,250
The 2025 Senior Notes	1,500,000		1,537,500		1,500,000		1,518,750
Total	$	2,800,000	$	2,822,375	$	2,800,000	$	2,793,500

We have interest rate risk with respect to our unsecured revolving line of credit. Interest rates on amounts borrowed under the revolving line of credit are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5%, and (c) the Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 1%, plus, in each case, an applicable margin, (ii) the Daily Simple SOFR plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement), or (iii) term SOFR (without a credit spread adjustment) plus an applicable margin (or, if such rate is no longer available, a successor benchmark rate determined in accordance with the terms of the credit agreement). The applicable margin for base rate borrowings and for SOFR borrowings is determined based on our consolidated leverage ratio. The applicable margin for base rate borrowings ranges from 0% to 0.75% per annum and for SOFR borrowings ranges from 1% to 1.75% per annum. A change in interest rates on this variable rate debt impacts the interest incurred and cash flows, but does not impact the fair value of the instrument. As of December 31, 2025, we had $415.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 5.000%.

Foreign Currency Forward Contracts

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 condensed 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.

The following tables summarize our outstanding foreign currency forward contracts, by currency, at December 31, 2025 and September 30, 2025:


	December 31, 2025
	Contract Amount				Fair Value
	Foreign Currency		USD		USD
	(In thousands)
Sell foreign currency:

Euro (EUR)	EUR	6,900	$	8,106	$	—
Buy foreign currency:
British pound (GBP)	GBP	10,296	$	13,900	$	—
Singapore dollar (SGD)	SGD	8,208	$	6,400	$	—

	September 30, 2025
	Contract Amount				Fair Value
	Foreign Currency		USD		USD
	(In thousands)
Sell foreign currency:

Euro (EUR)	EUR	7,700	$	9,034	$	—
Buy foreign currency:
British pound (GBP)	GBP	10,019	$	13,500	$	—
Singapore dollar (SGD)	SGD	8,087	$	6,300	$	—

The foreign currency forward contracts were entered into on December 31, 2025 and September 30, 2025; therefore, their fair value was $0 on each of these dates.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of FICO’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of FICO’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report. Based on that evaluation, the CEO and CFO have concluded that FICO’s disclosure controls and procedures were effective as of December 31, 2025 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. In addition, the disclosure controls and procedures are designed to ensure that information required to be disclosed is accumulated and communicated to management, including the CEO and CFO, allowing timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

No change in FICO’s internal control over financial reporting was identified in connection with the evaluation required by Rules 13a-15 or 15d-15 of the Exchange Act that occurred during the period covered by this quarterly report and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. 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. FICO intends to vigorously defend against the remaining claims in this proceeding.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended September 30, 2025 (our “Annual Report on Form 10-K”). The risks discussed in our Annual Report on Form 10-K could materially affect our business, financial condition and future results. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be insignificant also may materially and adversely affect our business, financial condition or operating results in the future. There have been no material changes from the risk factors disclosed in our Annual Report on Form 10-K.

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

Issuer Purchases of Equity Securities


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
October 1, 2025 through October 31, 2025	64,578	$	1,678.25	64,270	$	235,746,240
November 1, 2025 through November 30, 2025	22,834	$	1,759.85	22,645	$	195,869,768
December 1, 2025 through December 31, 2025	67,712	$	1,755.31	8,399	$	180,924,103
	155,124	$	1,723.90	95,314	$	180,924,103

(1)Includes 59,810 shares delivered in satisfaction of the tax withholding obligations resulting from the vesting of restricted stock units held by employees during the quarter ended December 31, 2025.

(2)In June 2025, our Board of Directors approved a stock repurchase program (the “June 2025 program”). The June 2025 program is open-ended and authorizes repurchases of shares of our common stock from time to time up to an aggregate cost of $1.0 billion in the open market or in negotiated transactions. The June 2025 program remains in effect until the total authorized amount is expended or until further action by our Board of Directors.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Trading Arrangements

On November 20, 2025, William Lansing, our Chief Executive Officer and a member of our Board of Directors, entered into a pre-arranged trading plan that is intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Exchange Act. This plan provides for the sale by Mr. Lansing and the Lansing Revocable Trust of up to 47,904 shares of our common stock, plus a number of shares of our common stock resulting from the vesting of up to 7,829 shares minus the number of shares ultimately withheld for tax withholding purposes, and terminates on the earlier of the close of business on December 18, 2026 or the date all shares are sold thereunder.

Item 6. Exhibits



Exhibit Number						Description
3.1						Restated Certificate of Incorporation of Fair Isaac Corporation, dated November 5, 2025 (Incorporated by reference to Exhibit 3.2 to the Company’s Form 10-K for the fiscal year ended September 30, 2025.)

3.2						Certificate of Elimination of Series A Participating Preferred Stock of Fair Isaac Corporation. (Incorporated by reference to Exhibit 3.3 to the Company’s Form 10-K for the fiscal year ended September 30, 2025.)

3.3						By-laws of Fair Isaac Corporation. (Incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q for the quarter ended December 31, 2009.)

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

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

32.1 **						Section 1350 Certification of CEO.

32.2 **						Section 1350 Certification of CFO.

101.INS *						Inline XBRL Instance Document.

101.SCH *						Inline XBRL Taxonomy Extension Schema Document.

101.CAL *						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF *						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB *						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE *						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

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


*			Filed herewith.
**			Furnished herewith.

SIGNATURES

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



		FAIR ISAAC CORPORATION

DATE:	January 28, 2026

		By	/s/ STEVEN P. WEBER
			Steven P. Weber
			Executive Vice President and Chief Financial Officer
			(for Registrant as duly authorized officer and
			as Principal Financial Officer)

DATE:	January 28, 2026

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