{"schemaVersion":1,"research":true,"symbol":"fico","name":"Fair Isaac","topic":"moat","path":"/stock/fico/moat","status":"published","version":4,"updatedAt":"2026-10-18T21:10:37.315Z","locked":false,"publicFairValue":false,"fairValue":null,"moat":{"verdict":"narrow","summary":"FICO has an evidenced moat centered on its established credit-scoring standard, with supporting switching friction in underwriting systems and software workflows. Broad lender use, decades of adoption and realized mortgage-score repricing support customer dependency and pricing power. A wide company-level verdict is not established: Software retention is sharply divided, non-platform revenue retention is deteriorating, and Scores distribution depends heavily on partners.","advantages":[{"mechanism":"intangible_assets","claim":"FICO's established credit-risk standard and proprietary scoring technology support a current advantage. Broad lender adoption and observed mortgage-score price increases provide operating support beyond management's claims of differentiation.","durability":"The disclosed history of more than three decades as a common framework supports persistence. Continued broad use and realized repricing support durability, but do not establish immunity to substitution.","risks":"Distributor concentration, competing scoring models and lower-priced alternatives could weaken the standard or its economics. Intellectual-property protection is explicitly limited. These competitive risks are possibilities, rather than disclosed realized displacement of Scores.","invalidation":"Material lender migration to alternative scores, sustained loss of FICO's role as the common credit-risk framework, or price reversals accompanied by substitution-driven revenue losses would invalidate this advantage.","competitors":[],"evidenceIds":["e1","e2","e3","e4","e5","e6"],"counterEvidenceIds":["e7","e8","e9","e10"]},{"mechanism":"switching_costs","claim":"Compatibility with existing underwriting systems and the capital, platform and procedural changes involved in software purchases support switching friction. Platform customer expansion demonstrates an existing foothold, although the advantage is uneven across Software.","durability":"Embedded systems and operational procedures can sustain dependency. Platform DBNRR of 148% supports expansion within existing customers, but total Software DBNRR of 109% and non-platform DBNRR of 82% limit the company-wide conclusion.","risks":"Implementation complexity can also deter new purchases. Non-platform contraction demonstrates that switching friction does not prevent revenue erosion; the passages do not separate migration, attrition, pricing and usage effects.","invalidation":"Persistent total Software DBNRR below 100%, sustained Platform cohort contraction, or demonstrated replacement of FICO systems without meaningful operational friction would undermine this advantage.","competitors":[],"evidenceIds":["e11","e12","e13","e14","e15"],"counterEvidenceIds":["e13","e16","e9"]}],"evidence":[{"id":"e1","sourceId":"filing-1","location":"Business — Scores standard","excerpt":"Scores Our B2B scoring solutions include the FICO® Score, which is the standard measure of consumer credit risk in the U.S."},{"id":"e2","sourceId":"filing-1","location":"Business — lender adoption","excerpt":"It is used in most U.S. credit decisions, by nearly all major banks, credit card issuers, mortgage lenders, and auto loan originators."},{"id":"e3","sourceId":"filing-3","location":"Proxy summary — credit-scoring framework history","excerpt":"For over three decades it has been the common framework for evaluating and communicating consumer credit risk across consumer credit markets, efficiently enabling billions of decisions across these markets every year in an objective and fair manner."},{"id":"e4","sourceId":"filing-1","location":"Business — proprietary scoring algorithms","excerpt":"Our proprietary analytic algorithms are applied to credit data collected and maintained by the three U.S."},{"id":"e5","sourceId":"filing-2","location":"MD&A — realized mortgage-score unit pricing","excerpt":"Scores segment operating income as a percentage of segment revenue increased to 91% from 88%, primarily due to higher business-to-business scores revenue driven by a higher mortgage origination scores unit price."},{"id":"e6","sourceId":"filing-6","location":"MD&A — Scores pricing and mortgage origination volume","excerpt":"Scores segment operating income as a percentage of segment revenue increased to 91% from 89%, primarily due to higher business-to-business scores revenue driven by a higher unit price and an increase in volume of mortgage originations."},{"id":"e7","sourceId":"filing-1","location":"Risk factors — consumer reporting agency concentration","excerpt":"We also derive a substantial portion of our 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."},{"id":"e8","sourceId":"filing-1","location":"Risk factors — distributor performance and terms","excerpt":"Failure of our existing and future distributors or partners to generate significant revenues or otherwise perform their expected services or functions, demands by such distributors or partners to change the terms on which they offer our products, or our failure to establish additional distribution or sales and marketing alliances, could have a material adverse effect on our business, operating results and financial condition."},{"id":"e9","sourceId":"filing-1","location":"Competition — generic competitor categories","excerpt":"We encounter competition from several sources, including: •in-house analytic and systems developers; •developers and providers of neural networks, machine learning, and AI systems; •fraud solutions providers; •scoring model builders; •providers of credit reports and credit scores, including consumer reporting agencies; •software companies supplying predictive analytic modeling, rules, or analytic development tools; •entity resolution and social network analysis solutions providers; •providers of customer engagement and risk management solutions; •providers of account workflow management software; •business process management and decision rules management providers; •enterprise resource planning and customer relationship management solutions providers; •business intelligence solutions providers; •providers of automated application processing services; and •third-party professional services and consulting organizations."},{"id":"e10","sourceId":"filing-1","location":"Risk factors — limited proprietary technology protection","excerpt":"This protection of our proprietary technology is limited, and our proprietary technology could be used by others without our consent."},{"id":"e11","sourceId":"filing-1","location":"Business — compatibility with underwriting systems","excerpt":"Both scores maintain the same score to risk relationship as standard FICO® Scores, enhancing their compatibility with existing credit underwriting systems and models."},{"id":"e12","sourceId":"filing-1","location":"Risk factors — customer capital and operational commitments","excerpt":"Customers are often cautious in making decisions to acquire our products because purchasing our products typically involves a significant commitment of capital and may involve shifts by the customer to a new software and/or hardware platform or changes in the customer’s operational procedures."},{"id":"e13","sourceId":"filing-2","location":"Software metrics — Platform, non-platform and total DBNRR history","excerpt":"The following table summarizes our DBNRR for on-premises and SaaS software exiting each of the dates presented: September 30, 2024 December 31, 2024 March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 March 31, 2026 June 30, 2026 DBNRR Platform 123 % 112 % 110 % 115 % 112 % 122 % 136 % 148 % Non-platform 99 % 100 % 96 % 97 % 97 % 91 % 90 % 82 % Total 106 % 105 % 102 % 103 % 102 % 103 % 109 % 109 % RESULTS OF OPERATIONS We are organized into two reportable segments: Scores and Software."},{"id":"e14","sourceId":"filing-2","location":"Software metrics — existing-customer cohort definition","excerpt":"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."},{"id":"e15","sourceId":"filing-2","location":"Software metrics — pricing, usage and attrition components","excerpt":"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."},{"id":"e16","sourceId":"filing-2","location":"MD&A — Software margin deterioration and causes","excerpt":"Software segment operating income as a percentage of segment revenue decreased to 26% from 32%, primarily attributable to a decrease in sales of higher-margin software recognized at a point in time and an increase in third-party data center hosting costs."},{"id":"e17","sourceId":"filing-2","location":"Operating highlights — Software ARR growth","excerpt":"•Annual Recurring Revenue for our Software segment as of June 30, 2026 was $815.8 million, a 10% increase from June 30, 2025."},{"id":"e18","sourceId":"filing-2","location":"Operating highlights — Scores revenue growth","excerpt":"19 Table of Contents •Revenues for our Scores segment were $458.9 million during the quarter ended June 30, 2026, a 41% increase from the quarter ended June 30, 2025, and $1.2 billion during the nine months ended June 30, 2026, a 45% increase from the nine months ended June 30, 2025."},{"id":"e19","sourceId":"filing-2","location":"Liquidity — operating cash generation","excerpt":"Net cash provided by operating activities increased to $777.9 million during the nine months ended June 30, 2026 from $555.1 million during the nine months ended June 30, 2025."},{"id":"e20","sourceId":"filing-2","location":"Liquidity — executed share repurchases","excerpt":"During the quarter and nine months ended June 30, 2026, we expended $2.3 billion and $3.1 billion, respectively, under the June 2025 program, the February 2026 program, and the June 2026 program, as applicable, including $1.5 billion under the ASR Agreement entered into as part of the June 2026 program."},{"id":"e21","sourceId":"filing-2","location":"Operating highlights — borrowing to fund accelerated repurchase","excerpt":"•In June 2026, we amended our credit agreement to provide for a $1.5 billion term loan, the proceeds of which were used to fund an accelerated share repurchase agreement (“ASR Agreement”)."},{"id":"e22","sourceId":"filing-2","location":"Operating highlights — increased debt balance","excerpt":"•Total debt balance was $5.6 billion as of June 30, 2026, compared with $3.1 billion as of September 30, 2025."},{"id":"e23","sourceId":"filing-3","location":"Executive compensation — ownership, clawbacks and vesting policies","excerpt":"Quality Pay Practices and Policies Highlights Only “double-trigger” accelerated vesting or payment for equity awards upon a change in control of the Company Executive stock ownership guidelines that require ownership and further align our executive officers’ interests with those of our stockholders; only shares owned outright and time-based full value equity awards count towards meeting these guidelines Prohibition on hedging of Company common stock A compensation recovery, or “clawback,” policy pertaining to all performance-based compensation in the case of a restatement Supplemental clawback policy triggered in the event of misconduct situations that covers annual and long-term incentive compensation, including time-based equity awards Mandatory minimum vesting period of one year for equity awards Annual compensation peer group review with appropriate updates to ensure valid comparisons No tax “gross-ups” allowed except with respect to relocation benefits, required spousal travel and certain required regulatory filings Independent compensation consultant engaged by the LDCC that does not provide any other services to the Company EXECUTIVE COMPENSATION PROGRAM Compensation Philosophy and Objectives Our compensation program is designed to meet the following objectives: Attract, retain and reward high caliber talent ∎ Attract, retain, motivate and reward our outstanding leaders in a competitive market, who are instrumental in maintaining our position as a leading analytics software company Pay for Performance ∎ Set rigorous performance targets that drive achievement of our financial goals and strategic plans ∎ Responsive payouts that reward leaders for outperformance and result in a lower, or no, payout for results that fall short of high expectations Align Executive and Stockholder Interests ∎ Encourage long-term, sustained value creation for stockholders ∎ Heavily weight equity incentives to maximize alignment between executives’ pay outcomes and stockholder experience Account for Individual Performance ∎ Calibrate pay levels and opportunities relative to individuals’ contributions and track record of performance Fair Isaac Corporation l 2026 Proxy Statement 43 Table of Contents Proxy Summary Board of Directors Corporate Governance Executive Compensation Audit Committee Matters Charter Amendments Stock Ownership Other Matters 2025 Elements of Compensation The fiscal 2025 executive compensation program consisted of the following key elements."},{"id":"e24","sourceId":"filing-3","location":"Executive compensation — realized performance award outcomes","excerpt":"The number of MSUs earned for each performance period is calculated as follows: The relative return factor for each performance period of the fiscal 2025 MSUs is determined based on the Company’s total shareholder return relative to the S&P 500 Index for such performance period, with performance at the 55th percentile of the Index required to achieve target payout, as follows (with earned amounts interpolated between relative performance points): Fair Isaac Corporation l 2026 Proxy Statement 51 Table of Contents Proxy Summary Board of Directors Corporate Governance Executive Compensation Audit Committee Matters Charter Amendments Stock Ownership Other Matters The following table sets forth, for the applicable performance period that includes fiscal 2025 for each of the MSUs granted in fiscal 2025, 2024 and 2023, the Company’s TSR and percentile of performance relative to the TSR of the applicable comparator group – the S&P 500 Index for fiscal 2025 MSUs and the Russell 3000 Index for fiscal 2024 and 2023 MSUs - which on a relative basis for each performance period resulted in the relative return factor reported for each performance period: Award Performance Period Total TSR of FICO Russell 3000 Index TSR percentile(1) S&P 500 Index TSR percentile MSUs Earned (as a percentage of target) FY23 MSU 3-Year 251.33% 72.83% n/a 200% FY24 MSU 2-Year 80.92% 53.48% n/a 181% FY25 MSU 1-Year -19.87% n/a 5.05% 0% (1) Performance for MSUs granted prior to FY25 is determined based on the Company’s TSR performance relative to the Russell 3000 Index, with target payout awarded for performance matching the index, and scaling ranging as follows (with earned amounts interpolated between relative performance points): (i) 0% of target earned for relative performance of -25% or less; (ii) 50% of target earned for relative performance of -12.5%; (iii) 100% of target earned for performance matching the index; (iv) 150% of target earned for relative performance of +16.67%; and (v) 200% of target earned for relative performance of +33.33% or greater."},{"id":"e25","sourceId":"filing-3","location":"Executive compensation — granted PSU performance and vesting periods","excerpt":"Performance Share Units (“PSUs”). The PSUs granted in fiscal 2025 were earned on the basis of a one-year performance period, with any earned shares vesting in equal installments over the first three anniversaries of the date of grant."},{"id":"e26","sourceId":"filing-3","location":"Governance highlights — board structure and stockholder rights","excerpt":"Fair Isaac Corporation l 2026 Proxy Statement 5 Table of Contents Proxy Summary Board of Directors Corporate Governance Executive Compensation Audit Committee Matters Charter Amendments Stock Ownership Other Matters Corporate Governance Highlights Board and Committee Summary Number of Director Nominees 8 Number of Independent Director Nominees 7 Board Committees Consist Entirely of Independent Directors Yes All Directors Attended at least 75% of Meetings Held Yes Annual Election of All Directors Yes Majority Voting for Directors Yes Plurality Carveout for Contested Elections Yes Director Resignation Policy Yes Separate Chairman and CEO Yes Chairman is Independent Director Yes Independent Directors Meet Regularly in Executive Session Yes Annual Board and Committee Self-Evaluations Yes Risk Oversight by Full Board and Committees Yes Annual Advisory Vote on Executive Compensation Yes Prohibit Hedging and Short Sales of FICO Securities Yes Stock Ownership Requirements for Directors and Executive Officers Yes Executive Compensation Recovery Policy Yes Stockholder Rights Summary Controlled Company No Classified Board No Vote Standard for Charter or Bylaw Amendment Majority* Stockholder Ability to Call Special Meetings No Stockholder Ability to Act by Written Consent Yes Cumulative Voting No Board Ability to Issue Blank-Check Preferred Stock Yes Poison Pill No * “Majority” with respect to the vote standard for a charter or bylaw amendment refers to the affirmative vote of the holders of a majority of the outstanding shares of the Company entitled to vote thereon."},{"id":"e27","sourceId":"filing-3","location":"Governance highlights — proposed supermajority elimination assumption","excerpt":"It further assumes that the sole supermajority provision in the Company’s Charter is eliminated, as further described in Proposal 5 in this proxy statement."},{"id":"e28","sourceId":"filing-1","location":"Auditor opinion — effective financial reporting controls","excerpt":"Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO."},{"id":"e29","sourceId":"filing-2","location":"MD&A — nine-month segment and consolidated operating results","excerpt":"The following tables set forth certain summary information on a segment basis related to our operating income for the nine-month periods ended June 30, 2026 and 2025: Nine Months Ended June 30, Period-to-Period Change Period-to-Period Percentage Change Segment 2026 2025 (In thousands) (In thousands) Scores $ 1,117,215 $ 753,452 $ 363,763 48 % Software 176,248 192,008 (15,760) (8) % Total segment operating income 1,293,463 945,460 348,003 37 % Unallocated corporate expenses (152,411) (133,478) (18,933) 14 % Unallocated share-based compensation (141,910) (124,288) (17,622) 14 % Operating income $ 999,142 $ 687,694 311,448 45 % Scores Software Nine Months Ended June 30, Percentage of Revenues Nine Months Ended June 30, Percentage of Revenues 2026 2025 2026 2025 2026 2025 2026 2025 (In thousands) (In thousands) Segment revenues $ 1,238,404 $ 857,023 100 % 100 % $ 639,420 $ 618,095 100 % 100 % Segment operating expense (121,189) (103,571) (10) % (12) % (463,172) (426,087) (72) % (69) % Segment operating income $ 1,117,215 $ 753,452 90 % 88 % $ 176,248 $ 192,008 28 % 31 % The year-to-date period-over-period increase of $311.4 million in operating income was attributable to a $402.7 million increase in segment revenues, partially offset by a $54.7 million increase in segment operating expenses, an $18.9 million increase in corporate expenses, and a $17.7 million increase in share-based compensation expense."},{"id":"e30","sourceId":"filing-3","location":"Scores highlights — executed multi-year direct distribution agreement","excerpt":"mortgage industry. We entered into a multi-year direct license and distribution agreement with Xactus, a fintech and market leader in verification solutions for the mortgage industry and the largest credit verification and tri-merge provider of FICO® Scores, for it to participate in the FICO Mortgage Direct License Program."},{"id":"completion-5ddb6674e444-e1","sourceId":"filing-2","location":"ACV Bookings: qualifying software contract terms","excerpt":"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."},{"id":"completion-5ddb6674e444-e2","sourceId":"filing-2","location":"ACV Bookings: fixed contractual amounts, minimums and usage fees","excerpt":"The expected contract value equals the fixed amount — including guaranteed minimums, if any — stated in the contract, plus estimates of future usage-based fees."},{"id":"completion-5ddb6674e444-e3","sourceId":"filing-2","location":"ACV Bookings: incremental revenue at subscription renewal","excerpt":"For renewals of existing software subscription contracts, we count only incremental annual revenue expected over the current contract as ACV Bookings."},{"id":"completion-5ddb6674e444-e4","sourceId":"filing-9","location":"First-quarter fiscal 2026 B2B revenue drivers","excerpt":"B2B revenue increased 36%, primarily attributable to a higher mortgage origination scores unit price and an increase in volume of mortgage originations."},{"id":"completion-5ddb6674e444-e5","sourceId":"filing-8","location":"Second-quarter fiscal 2026 B2B revenue drivers","excerpt":"B2B revenue increased 72%, primarily attributable to a higher mortgage origination scores unit price and an increase in volume of mortgage originations."},{"id":"completion-5ddb6674e444-e6","sourceId":"filing-7","location":"Third-quarter fiscal 2026 B2B revenue drivers","excerpt":"B2B revenue increased 49%, primarily attributable to a higher mortgage origination scores unit price."},{"id":"completion-5ddb6674e444-e7","sourceId":"filing-7","location":"June 30, 2026 software net retention by platform","excerpt":"The total Software Dollar-Based Net Retention Rate was 109% on June 30, 2026, with platform software at 148% and non-platform software at 82%."},{"id":"completion-5ddb6674e444-e8","sourceId":"filing-2","location":"DBNRR methodology: expansion, pricing, usage and attrition","excerpt":"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."},{"id":"completion-5ddb6674e444-e9","sourceId":"filing-2","location":"Consolidated income statements: quarters and nine months ended June 30, 2026 and 2025; thousands of dollars","excerpt":"1 Table of Contents FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) Quarter Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 (In thousands, except per share data) Revenues: On-premises and SaaS software $ 196,969 $ 187,915 $ 584,421 $ 557,752 Professional services 18,322 24,191 54,999 60,343 Scores 458,897 324,309 1,238,404 857,023 Total revenues 674,188 536,415 1,877,824 1,475,118 Operating expenses: Cost of revenues 87,017 87,571 265,477 262,546 Research and development 53,708 47,212 157,536 137,394 Selling, general and administrative 170,835 139,114 455,669 387,484 Total operating expenses 311,560 273,897 878,682 787,424 Operating income 362,628 262,518 999,142 687,694 Interest expense, net (59,877) (32,899) (146,462) (93,765) Other income, net 11,908 7,372 9,939 6,207 Income before income taxes 314,659 236,991 862,619 600,136 Provision for income taxes 77,487 55,202 202,616 103,204 Net income 237,172 181,789 660,003 496,932 Other comprehensive income (loss): Foreign currency translation adjustments (536) 13,003 (4,031) 3,356 Comprehensive income $ 236,636 $ 194,792 $ 655,972 $ 500,288 Earnings per share: Basic $ 10.46 $ 7.49 $ 28.28 $ 20.41 Diluted $ 10.45 $ 7.40 $ 28.12 $ 20.12 Shares used in computing earnings per share: Basic 22,670 24,284 23,341 24,350 Diluted 22,703 24,575 23,470 24,696 See accompanying notes."},{"id":"completion-5ddb6674e444-e10","sourceId":"filing-2","location":"Segment operating results: nine months ended June 30, 2026 and 2025; thousands of dollars","excerpt":"The following tables set forth certain summary information on a segment basis related to our operating income for the nine-month periods ended June 30, 2026 and 2025: Nine Months Ended June 30, Period-to-Period Change Period-to-Period Percentage Change Segment 2026 2025 (In thousands) (In thousands) Scores $ 1,117,215 $ 753,452 $ 363,763 48 % Software 176,248 192,008 (15,760) (8) % Total segment operating income 1,293,463 945,460 348,003 37 % Unallocated corporate expenses (152,411) (133,478) (18,933) 14 % Unallocated share-based compensation (141,910) (124,288) (17,622) 14 % Operating income $ 999,142 $ 687,694 311,448 45 % Scores Software Nine Months Ended June 30, Percentage of Revenues Nine Months Ended June 30, Percentage of Revenues 2026 2025 2026 2025 2026 2025 2026 2025 (In thousands) (In thousands) Segment revenues $ 1,238,404 $ 857,023 100 % 100 % $ 639,420 $ 618,095 100 % 100 % Segment operating expense (121,189) (103,571) (10) % (12) % (463,172) (426,087) (72) % (69) % Segment operating income $ 1,117,215 $ 753,452 90 % 88 % $ 176,248 $ 192,008 28 % 31 % The year-to-date period-over-period increase of $311.4 million in operating income was attributable to a $402.7 million increase in segment revenues, partially offset by a $54.7 million increase in segment operating expenses, an $18.9 million increase in corporate expenses, and a $17.7 million increase in share-based compensation expense."},{"id":"completion-5ddb6674e444-e11","sourceId":"filing-2","location":"Nine-month Software operating-margin decline and causes","excerpt":"Software segment operating income as a percentage of segment revenue decreased to 28% from 31%, 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."},{"id":"completion-5ddb6674e444-e12","sourceId":"filing-2","location":"Consolidated balance sheets: June 30, 2026 and September 30, 2025; thousands of dollars","excerpt":"Unaudited Financial Statements FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) June 30, 2026 September 30, 2025 (In thousands, except par value data) Assets Current assets: Cash and cash equivalents $ 248,444 $ 134,136 Accounts receivable, net 592,530 529,148 Prepaid expenses and other current assets 40,589 41,881 Total current assets 881,563 705,165 Marketable securities 56,093 54,625 Property and equipment, net 90,988 67,713 Operating lease right-of-use assets 23,087 26,213 Goodwill 791,815 783,340 Deferred income taxes 92,384 118,553 Other assets 101,443 112,524 Total assets $ 2,037,373 $ 1,868,133 Liabilities and Stockholders’ Deficit Current liabilities: Accounts payable $ 26,878 $ 32,315 Accrued compensation and employee benefits 110,863 115,369 Other accrued liabilities 102,026 114,618 Deferred revenue 205,424 187,372 Current maturities on debt 300,000 399,541 Total current liabilities 745,191 849,215 Long-term debt 5,282,389 2,656,150 Operating lease liabilities 15,621 19,187 Other liabilities 91,307 89,365 Total liabilities 6,134,508 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 21,597 and 23,764 shares outstanding at June 30, 2026 and September 30, 2025, respectively) 216 238 Additional paid-in-capital 1,062,618 1,331,120 Treasury stock, at cost (67,260 and 65,093 shares at June 30, 2026 and September 30, 2025, respectively) (10,276,707) (7,537,908) Retained earnings 5,212,819 4,552,816 Accumulated other comprehensive loss (96,081) (92,050) Total stockholders’ deficit (4,097,135) (1,745,784) Total liabilities and stockholders’ deficit $ 2,037,373 $ 1,868,133 See accompanying notes."},{"id":"completion-5ddb6674e444-e13","sourceId":"filing-2","location":"Repurchase expenditures for the quarter and nine months ended June 30, 2026","excerpt":"During the quarter and nine months ended June 30, 2026, we expended $2.3 billion and $3.1 billion, respectively, under the June 2025 program, the February 2026 program, and the June 2026 program, as applicable, including $1.5 billion under the ASR Agreement entered into as part of the June 2026 program."},{"id":"completion-5ddb6674e444-e14","sourceId":"filing-2","location":"June 2026 term-loan proceeds used for accelerated repurchases","excerpt":"•In June 2026, we amended our credit agreement to provide for a $1.5 billion term loan, the proceeds of which were used to fund an accelerated share repurchase agreement (“ASR Agreement”)."},{"id":"completion-5ddb6674e444-e15","sourceId":"filing-7","location":"Consolidated operating cash flows: nine months ended June 30, 2026 and 2025; thousands of dollars","excerpt":"Current liabilities:\nAccounts payable and other accrued liabilities\n$\n128,904 \n$\n146,933 \nAccrued compensation and employee benefits\n110,863 \n115,369 \nDeferred revenue\n205,424 \n187,372 \nCurrent maturities on debt\n300,000 \n399,541 \nTotal current liabilities\n745,191 \n849,215 \nLong-term debt \n5,282,389 \n2,656,150 \nOperating lease liabilities\n15,621 \n19,187 \nOther liabilities\n91,307 \n89,365 \nTotal liabilities\n6,134,508 \n3,613,917 \nStockholders’ deficit\n(4,097,135)\n(1,745,784)\nTotal liabilities and stockholders’ deficit\n$\n2,037,373 \n$\n1,868,133 \nFAIR ISAAC CORPORATION\nCONDENSED CONSOLIDATED STATEMENTS OF INCOME\n(Unaudited)\n \nQuarter Ended June 30,\nNine Months Ended June 30,\n \n2026\n2025\n2026\n2025\n \n(In thousands, except per share data)\nRevenues:\nOn-premises and SaaS software\n$\n196,969 \n$\n187,915 \n$\n584,421 \n$\n557,752 \nProfessional services\n18,322 \n24,191 \n54,999 \n60,343 \nScores\n458,897 \n324,309 \n1,238,404 \n857,023 \nTotal revenues\n674,188 \n536,415 \n1,877,824 \n1,475,118 \nOperating expenses:\nCost of revenues\n87,017 \n87,571 \n265,477 \n262,546 \nResearch and development\n53,708 \n47,212 \n157,536 \n137,394 \nSelling, general and administrative\n170,835 \n139,114 \n455,669 \n387,484 \nTotal operating expenses\n311,560 \n273,897 \n878,682 \n787,424 \nOperating income\n362,628 \n262,518 \n999,142 \n687,694 \nOther expense, net\n(47,969)\n(25,527)\n(136,523)\nNine Months Ended June 30,\n \n2026\n2025\n \n(In thousands)\nCash flows from operating activities:\nNet income\n$\n660,003 \n$\n496,932 \nAdjustments to reconcile net income to net cash provided by operating activities:\nDepreciation and amortization\n12,123 \n10,931 \nShare-based compensation\n141,910 \n124,288 \nChanges in operating assets and liabilities \n(66,268)\n(64,961)\nOther, net \n30,112 \n(12,052)\nNet cash provided by operating activities \n777,880 \n555,138 \nCash flows from investing activities:"},{"id":"completion-5ddb6674e444-e16","sourceId":"filing-7","location":"June 30, 2026 platform and non-platform ARR growth","excerpt":"On June 30, 2026, Software Annual Recurring Revenue (ARR) was up 10% year-over-year, consisting of a 62% increase in platform ARR and a 17% decline in non-platform ARR."}],"changes":["Retain the previous narrow verdict; the supplied evidence supports the scoring standard and switching friction without establishing company-wide exceptional durability.","Specify the retention divergence: June 2026 Platform DBNRR reached 148%, while non-platform DBNRR fell to 82% and total Software DBNRR was 109%.","Recognize observed mortgage-score repricing in both March and June 2026, while distinguishing that outcome from undisclosed contractual repricing rights.","Add a capital-discipline concern: substantial executed repurchases, including an explicitly debt-funded accelerated repurchase, accompanied an increase in debt to $5.6 billion."],"limitations":["Assessment uses only supplied passages. Source dates are filing dates, retaining dateKind=filed; the latest supplied operating period ends June 30, 2026.","Adoption, historical standard status and product compatibility are issuer disclosures. Reported operating outcomes support the assessment, but independent comparative model performance and substitution evidence are absent.","Competition passages identify generic categories. Experian, TransUnion and Equifax are named as distributors and data providers, but the passages do not establish individual competitive offerings; competitor arrays therefore remain empty.","No evidence establishes a separate cost advantage, efficient-scale barrier or incremental network effect from each additional user.","DBNRR combines attrition, expansion, pricing and usage. It is not a customer renewal rate, and non-platform contraction cannot be attributed solely to competitive losses.","Price schedules, escalation clauses, renewal rights and contractual limits on repricing are absent. The executed direct distribution agreement establishes a relationship, not its eventual economic benefit.","Executive ownership requirements and actual compensation outcomes are disclosed, but individual ownership levels and compliance are not established by the supplied passages.","The January 2026 proxy's majority-vote summary assumes approval of a proposed charter amendment. Later charter exhibit listings do not establish the amendment's substantive adoption."],"qualityAssessments":[{"category":"moat","checks":[{"criterion":"structural_advantage","grade":3,"rationale":"Broad lender adoption of an established scoring standard, supported by realized repricing and integration friction, demonstrates a structural advantage. Proprietary technology alone would not establish it.","evidenceIds":["e1","e2","e5","e11","e12"]},{"criterion":"durability","grade":3,"rationale":"The disclosed three-decade framework history and continuing adoption support strong persistence. Distributor dependence and uneven Software retention prevent an exceptional durability assessment.","evidenceIds":["e2","e3","e7","e13"]},{"criterion":"customer_dependency","grade":3,"rationale":"Use across major lenders and compatibility with underwriting systems support substantial dependency. Software implementation commitments and Platform cohort expansion reinforce this, although non-platform contraction limits breadth.","evidenceIds":["e2","e11","e12","e13"]},{"criterion":"erosion_resilience","grade":2,"rationale":"Scores growth and realized repricing indicate current resilience, but non-platform cohort contraction and Software margin deterioration are realized weaknesses. Distributor risks remain prospective rather than demonstrated Scores displacement.","evidenceIds":["e5","e13","e16","e18","e8"]}]},{"category":"pricing_power","checks":[{"criterion":"realized_pricing","grade":3,"rationale":"March and June 2026 disclosures explicitly attribute stronger Scores economics to higher unit prices, with mortgage volume also contributing in March. This demonstrates realized pricing power in Scores; Software pricing is not isolated.","evidenceIds":["e5","e6"]},{"criterion":"retention","grade":2,"rationale":"Total Software DBNRR of 109% and Platform DBNRR of 148% demonstrate retained-customer expansion, offset by non-platform DBNRR of 82%. Scores repeat demand is assessed indirectly from broad use and continued revenue growth; no Scores retention rate is disclosed.","evidenceIds":["e2","e13","e14","e15","e18"]},{"criterion":"margin_resilience","grade":3,"rationale":"Nine-month consolidated operating income grew faster than revenue, and Scores margins benefited from realized repricing. Software margins declined because of hosting costs and sales mix, limiting the breadth of resilience. Margins corroborate pricing outcomes rather than independently establish the moat.","evidenceIds":["e5","e16","e29"]},{"criterion":"contractual_freedom","grade":1,"rationale":"Software bookings disclose a concrete constraint: qualifying contracts initially last at least 24 months and include fixed contractual amounts alongside estimated usage fees. Incremental revenue at renewal provides some flexibility, but neither unilateral repricing rights nor reset schedules are disclosed. This supports weak demonstrated contractual freedom for the disclosed software arrangements; Scores contract rights remain unestablished.","evidenceIds":["completion-5ddb6674e444-e1","completion-5ddb6674e444-e2","completion-5ddb6674e444-e3"]}]},{"category":"strong_management","checks":[{"criterion":"capital_discipline","grade":1,"rationale":"Operating cash generation improved, but nine-month repurchase spending of $3.1 billion substantially exceeded $777.9 million of operating cash flow. An explicitly debt-funded accelerated repurchase and debt growth from $3.1 billion to $5.6 billion demonstrate aggressive financing. Repurchase value creation is unproven.","evidenceIds":["e19","e20","e21","e22"]},{"criterion":"incentive_alignment","grade":3,"rationale":"Actual ownership requirements, hedging restrictions, clawbacks and multi-year vesting support alignment. Realized market-based awards included a zero payout for the fiscal 2025 one-year performance period. One-year PSU measurement and unavailable individual ownership compliance limit the conclusion.","evidenceIds":["e23","e24","e25"]},{"criterion":"execution","grade":3,"rationale":"Scores revenue, Software ARR and operating cash flow grew, with Platform cohort expansion providing operating evidence of execution. Management contribution is inferred from business outcomes; non-platform contraction and declining Software profitability temper the assessment.","evidenceIds":["e13","e17","e18","e19","e29"]},{"criterion":"governance","grade":3,"rationale":"A separate independent chairman, independent committees, annual director elections, majority director voting and effective audited reporting controls support strong governance. Stockholders cannot call special meetings, and proposed elimination of the supermajority provision is not treated as adopted.","evidenceIds":["e26","e27","e28"]}]}],"financialAssessments":[],"qualityPolicy":"quality-scores-2","sourcePolicy":"issuer-evidence-4","basisHash":"84959ff4ae06db35c4ba807124fa627c7b400674dc9315453ee8cf3ce15754e7","updatedAt":"2026-10-18T21:10:37.315Z","sources":[{"id":"filing-1","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454725000030/fico-20250930.htm","publishedAt":"2025-11-07","sha256":"a66b0c18c5a82485add0f0fce0ca2d3ba7b7d6658619400fcee7413c17e6dbc4","dateKind":"filed","citationPolicy":"numeric-lines-1"},{"id":"filing-2","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000030/fico-20260630.htm","publishedAt":"2026-07-29","sha256":"61c5d30887f12525a833a22a2e75952c0e37418afe057360eeeb2996ec5ebc83","dateKind":"filed","citationPolicy":"numeric-lines-1"},{"id":"filing-3","url":"https://www.sec.gov/Archives/edgar/data/814547/000119312526024403/d27709ddef14a.htm","publishedAt":"2026-01-27","sha256":"a5f72fbef10b50c67261ac3f275b29dc92663e9892818b303232e30b7b30405c","dateKind":"filed","citationPolicy":"numeric-lines-1"},{"id":"filing-4","url":"https://www.sec.gov/Archives/edgar/data/814547/000162828024045719/fico-20240930.htm","publishedAt":"2024-11-06","sha256":"30853935e8cae8f99ddc2bf69775b9db1b2f9f0f5405288b9362d4eae2179183","dateKind":"filed","citationPolicy":"numeric-lines-1"},{"id":"filing-5","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454723000022/fico-20230930.htm","publishedAt":"2023-11-08","sha256":"9cac3edc15fb09f714b667ae837963f7fa1480f3382fcc1fcf145d04f7750fe8","dateKind":"filed"},{"id":"filing-6","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000021/fico-20260331.htm","publishedAt":"2026-04-28","sha256":"d6a9090d9c28843d6a9de3e60de84a539aa9129dbf3e09e14bf7e7449c8e2910","dateKind":"filed"},{"id":"filing-7","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000031/exhibit991erq32026.htm","publishedAt":"2026-07-29","sha256":"7629a1022ce0faafd1152fa556e2a59d3077bd74e426cf874665c30cde828878","citationPolicy":"numeric-lines-1","dateKind":"filed"},{"id":"filing-8","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000020/exhibit991erq22026.htm","publishedAt":"2026-04-28","sha256":"2ad4d1e35d55a87f871b35429acb381d4f93e84ec8307d792cea624f5e070289","citationPolicy":"numeric-lines-1","dateKind":"filed"},{"id":"filing-9","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000010/exhibit991erq12026.htm","publishedAt":"2026-01-28","sha256":"3c33355841fbbc32d14238cdceb87b6776afe6ef8cb8d94781f1f0769556803f","citationPolicy":"numeric-lines-1","dateKind":"filed"}],"model":"gpt-6.1-sol","providerId":"codex:0e9423f1d412ca442223159708d00950e1e8de3f621af632956f70b98972c107","usage":{"input_tokens":39774,"cached_input_tokens":0,"cache_write_input_tokens":0,"output_tokens":1091,"reasoning_output_tokens":318}},"signals":[{"period":"2021","end":"2021-09-30","values":{"gross_margin":74.74721541985939,"operating_margin":38.395379997204785,"roic":42.72539226280261,"fcf_margin":31.616909830038825,"sbc_revenue":8.541885675743009},"issues":{"pb":"Equity attributable to owners is zero or negative, so this ratio is undefined.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","roiic":"Invested capital did not increase versus the prior year. ROIIC requires a positive increase.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","debt_equity":"Equity is zero or negative, so this ratio is undefined."}},{"period":"2022","end":"2022-09-30","values":{"gross_margin":78.05993015167687,"operating_margin":39.38327270615057,"roic":45.94766790590381,"fcf_margin":36.55209218236076,"sbc_revenue":8.375627146456397},"issues":{"pb":"Equity attributable to owners is zero or negative, so this ratio is undefined.","roiic":"Invested capital did not increase versus the prior year. ROIIC requires a positive increase.","roe":"Average equity attributable to owners is zero or negative, so this ratio is undefined.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","debt_equity":"Equity is zero or negative, so this ratio is undefined."}},{"period":"2023","end":"2023-09-30","values":{"gross_margin":79.44887440644786,"operating_margin":42.47147613205185,"roic":50.992951028667434,"fcf_margin":30.701057178553565,"sbc_revenue":8.182513113150018},"issues":{"pfcf_growth":"TTM FCF per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","pb":"Equity attributable to owners is zero or negative, so this ratio is undefined.","roe":"Average equity attributable to owners is zero or negative, so this ratio is undefined.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","debt_equity":"Equity is zero or negative, so this ratio is undefined."}},{"period":"2024","end":"2024-09-30","values":{"gross_margin":79.72630399772697,"operating_margin":42.714287876864745,"roic":54.95530237437355,"fcf_margin":36.33598559788906,"sbc_revenue":8.700828983083806},"issues":{"pb":"Equity attributable to owners is zero or negative, so this ratio is undefined.","roe":"Average equity attributable to owners is zero or negative, so this ratio is undefined.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","debt_equity":"Equity is zero or negative, so this ratio is undefined."}},{"period":"2025","end":"2025-09-30","values":{"gross_margin":82.23278377432166,"operating_margin":46.45458842344725,"roic":66.14759446318907,"fcf_margin":38.670801544451194,"sbc_revenue":7.869277184988063},"issues":{"pb":"Equity attributable to owners is zero or negative, so this ratio is undefined.","roe":"Average equity attributable to owners is zero or negative, so this ratio is undefined.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","debt_equity":"Equity is zero or negative, so this ratio is undefined."}}],"sources":[{"id":"filing-1","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454725000030/fico-20250930.htm","publishedAt":"2025-11-07","sha256":"a66b0c18c5a82485add0f0fce0ca2d3ba7b7d6658619400fcee7413c17e6dbc4","dateKind":"filed","citationPolicy":"numeric-lines-1"},{"id":"filing-2","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000030/fico-20260630.htm","publishedAt":"2026-07-29","sha256":"61c5d30887f12525a833a22a2e75952c0e37418afe057360eeeb2996ec5ebc83","dateKind":"filed","citationPolicy":"numeric-lines-1"},{"id":"filing-3","url":"https://www.sec.gov/Archives/edgar/data/814547/000119312526024403/d27709ddef14a.htm","publishedAt":"2026-01-27","sha256":"a5f72fbef10b50c67261ac3f275b29dc92663e9892818b303232e30b7b30405c","dateKind":"filed","citationPolicy":"numeric-lines-1"},{"id":"filing-4","url":"https://www.sec.gov/Archives/edgar/data/814547/000162828024045719/fico-20240930.htm","publishedAt":"2024-11-06","sha256":"30853935e8cae8f99ddc2bf69775b9db1b2f9f0f5405288b9362d4eae2179183","dateKind":"filed","citationPolicy":"numeric-lines-1"},{"id":"filing-5","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454723000022/fico-20230930.htm","publishedAt":"2023-11-08","sha256":"9cac3edc15fb09f714b667ae837963f7fa1480f3382fcc1fcf145d04f7750fe8","dateKind":"filed"},{"id":"filing-6","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000021/fico-20260331.htm","publishedAt":"2026-04-28","sha256":"d6a9090d9c28843d6a9de3e60de84a539aa9129dbf3e09e14bf7e7449c8e2910","dateKind":"filed"},{"id":"filing-7","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000031/exhibit991erq32026.htm","publishedAt":"2026-07-29","sha256":"7629a1022ce0faafd1152fa556e2a59d3077bd74e426cf874665c30cde828878","citationPolicy":"numeric-lines-1","dateKind":"filed"},{"id":"filing-8","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000020/exhibit991erq22026.htm","publishedAt":"2026-04-28","sha256":"2ad4d1e35d55a87f871b35429acb381d4f93e84ec8307d792cea624f5e070289","citationPolicy":"numeric-lines-1","dateKind":"filed"},{"id":"filing-9","url":"https://www.sec.gov/Archives/edgar/data/814547/000081454726000010/exhibit991erq12026.htm","publishedAt":"2026-01-28","sha256":"3c33355841fbbc32d14238cdceb87b6776afe6ef8cb8d94781f1f0769556803f","citationPolicy":"numeric-lines-1","dateKind":"filed"}],"history":[{"version":4,"updatedAt":"2026-10-19T13:57:15.039Z","verdict":"narrow","value":null},{"version":3,"updatedAt":"2026-10-18T16:35:43.872Z","verdict":"narrow","value":null},{"version":2,"updatedAt":"2026-10-18T02:27:49.793Z","verdict":"narrow","value":null},{"version":1,"updatedAt":"2026-10-18T02:18:02.026Z","verdict":null,"value":null}],"hasRequested":false,"requestStatus":"completed","researchIssue":null,"archivedMoat":null,"scope":"supported_catalog"}