Fair Isaac Corporation (FICO) is a global analytics software leader operating in the analytics and decision management industry. The company serves thousands of businesses in more than 80 countries ¹, including most leading banks and credit card issuers, insurers, retailers, telecommunications providers, automotive lenders, consumer reporting agencies, public agencies, and organizations in other industries. FICO also serves 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 ². The largest market segment is financial services, representing 92% of total revenue during fiscal 2025 ³, and the largest geographic market is the Americas, representing 87% of total revenue during fiscal 2025 ⁴.

FICO's competitive positioning is anchored by the FICO Score, which is the standard measure of consumer credit risk in the U.S. and is used in most U.S. credit decisions by nearly all major banks, credit card issuers, mortgage lenders, and auto loan originators ⁵. Primary competitors named in the filing include VantageScore (a joint venture of the three major U.S. consumer reporting agencies), consumer reporting agencies themselves (Experian, TransUnion, Equifax), and various software and analytics providers such as Nice Actimize, Pegasystems, SAS, IBM, and Adobe ⁶. The company believes it offers a unique mix of products, expertise, and capabilities, but notes that many competitors are larger and have more development, sales, and marketing resources ⁷. During fiscal 2025, 2024, and 2023, revenues generated from agreements with Experian, TransUnion, and Equifax collectively accounted for 51%, 45%, and 41% of total revenues, respectively ⁸.

FICO generates revenue through two operating segments: Scores and Software. The Scores segment includes business-to-business scoring solutions (primarily the FICO Score distributed through consumer reporting agencies on a usage-based royalty model) and business-to-consumer scoring solutions (sold directly through myFICO.com and other channels). The Software segment includes pre-configured analytic and decision management solutions (such as fraud detection, origination, customer management, and marketing), the FICO Platform modular software offering, and associated professional services. Software is sold as multi-year subscriptions with payments based on usage metrics, often subject to contracted minimum payments, and is available as software-as-a-service (SaaS) or on-premises ⁹. A significant and growing number of software solutions run natively on FICO Platform ¹⁰.

The Scores segment generated $1,168,575,000 ¹¹ in revenue during fiscal 2025, representing 59% of total revenues ¹². This segment includes B2B scoring solutions such as the FICO Score (ranging 300-850), FICO Score 9, FICO Score 10 and 10 T, FICO Industry Scores (including Bankcard and Auto Industry versions of Score 10), the FICO Resilience Index, FICO Score XD (using alternative data), and the UltraFICO Score (using consumer-permissioned data) ¹³. B2B scores revenue was $948,595,000 ¹⁴ in fiscal 2025, while B2C scores revenue was $219,980,000 ¹⁵. Outside the U.S., FICO Scores have been made available in over 40 countries ¹⁶, with client-specific versions developed in over ten countries ¹⁷. The segment's operating income was $1,026,243,000 ¹⁸ in fiscal 2025, representing 88% of segment revenues ¹⁹.

The Software segment generated $822,294,000 ²⁰ in revenue during fiscal 2025, representing 41% of total revenues ²¹. This segment includes on-premises and SaaS software revenue of $740,145,000 ²² and professional services revenue of $82,149,000 ²³. Key software offerings include FICO Platform (a modular analytic and decisioning environment), FICO Fraud Solutions (leveraging the Falcon Intelligence Network with data from more than 10,000 institutions ²⁴), FICO Originations Solution, FICO Customer Communication Service, FICO Strategy Director, FICO TRIAD Customer Manager, and analytic and decisioning tools such as FICO Decision Modeler, FICO Blaze Advisor, FICO Xpress Optimization, FICO Analytics Workbench, FICO Data Orchestrator, FICO DMP Streaming, FICO Business Outcome Simulator, and FICO Decision Optimizer ²⁵. Annual Recurring Revenue (ARR) from FICO Platform based products was $263,600,000 as of September 30, 2025 ²⁶, representing 35% of total software ARR ²⁷. Total software ARR was $747,300,000 as of September 30, 2025 ²⁸. The segment's operating income was $247,694,000 ²⁹ in fiscal 2025, representing 30% of segment revenues ³⁰.

During fiscal 2025, FICO launched FICO Score 10 BNPL and FICO Score 10 T BNPL, the first credit scores from a leading credit scoring provider to incorporate Buy Now, Pay Later data ³¹. Internationally, the company launched a FICO Score in Kenya ³². In support of the B2C business, FICO launched the FICO Score Mortgage Simulator and introduced the Lenders Leading Financial Inclusion program ³³. The company expanded FICO Platform reach with the launch of FICO Marketplace ³⁴. During fiscal 2025, FICO repurchased 0.8 million shares at a total repurchase price of $1.4 billion ³⁵. The company issued $1.5 billion of senior notes and used the net proceeds to repay all outstanding balances on its term loans, and amended its credit agreement to increase borrowing capacity under the unsecured revolving line of credit to $1.0 billion ³⁶. Total debt balance was $3.1 billion as of September 30, 2025 ³⁷. During the fourth quarter of fiscal 2025, the company incurred restructuring charges of $10,922,000 in employee separation costs due to the elimination of 226 positions ³⁸.

Total revenues were $1,990,869,000 ³⁹ during fiscal 2025, a 16% increase from fiscal 2024 ⁴⁰. Scores segment revenues were $1,168,575,000 ⁴¹, a 27% increase from fiscal 2024 ⁴². Operating income was $924,850,000 ⁴³ during fiscal 2025, a 26% increase from fiscal 2024 ⁴⁴. Net income was $651,946,000 ⁴⁵ during fiscal 2025, a 27% increase from fiscal 2024 ⁴⁶. Diluted EPS was $26.54 ⁴⁷ during fiscal 2025, a 30% increase from fiscal 2024 ⁴⁸. Cash flow from operating activities was $778,807,000 ⁴⁹ during fiscal 2025, compared with $632,964,000 ⁵⁰ during fiscal 2024. Cash and cash equivalents were $134,136,000 ⁵¹ as of September 30, 2025, compared with $150,667,000 ⁵² as of September 30, 2024.

A major growth vector is the continued advancement of FICO Platform, the modular analytic and decisioning environment. The company's goal is to move substantially all of FICO's current software products onto FICO Platform ⁵³. ARR from FICO Platform based products was $263,600,000 as of September 30, 2025 ⁵⁴, representing 35% of total software ARR ⁵⁵, and the company expects this strategy to result in revenue growth through follow-on 'land and expand' sales to existing FICO Platform customers and more sales to medium-sized businesses served through value-added resellers and systems integrators ⁵⁶. The company is continuing to invest significant development resources to enable substantially all of its software to run on FICO Platform in the future ⁵⁷.

Another growth vector is the expansion of scoring solutions, including new products and international markets. In fiscal 2025, FICO launched FICO Score 10 BNPL and FICO Score 10 T BNPL, the first credit scores to incorporate Buy Now, Pay Later data ⁵⁸. Internationally, the company launched a FICO Score in Kenya ⁵⁹. The adoption of FICO Score 10 and FICO Score 10 T gained increased traction for non-conforming mortgages and was approved for conforming mortgages by the Federal Housing Finance Agency ⁶⁰. The company also introduced the Lenders Leading Financial Inclusion program aimed at expanding credit access for underserved communities ⁶¹. Outside the U.S., FICO Scores have been made available in over 40 countries ⁶² and client-specific versions have been developed in over ten countries ⁶³.Cost of revenues as a percentage of revenues decreased to 18% during fiscal 2025 from 20% during fiscal 2024, primarily due to increased sales of higher-margin Scores products ⁶⁴. Research and development expenses as a percentage of revenues decreased to 9% during fiscal 2025 from 10% during fiscal 2024 ⁶⁵. Selling, general and administrative expenses as a percentage of revenues decreased to 26% during fiscal 2025 from 27% during fiscal 2024 ⁶⁶.

The filing does not provide a specific operational outlook regarding supply chain, manufacturing capacity, or headcount strategy beyond noting that during the fourth quarter of fiscal 2025, the company eliminated 226 positions ⁶⁷ and that cash payments for all employee separation costs from restructuring will be paid by the end of fiscal 2026 ⁶⁸. The company is investing significant resources to develop indirect channel relationships ⁶⁹ and to develop new sales, distribution, and marketing relationships ⁷⁰.

Capital allocation priorities include share repurchases and debt management. In June 2025, the Board approved a new stock repurchase program authorizing repurchases up to an aggregate cost of $1.0 billion ⁷¹. As of September 30, 2025, $343,600,296 remained under this program ⁷². During fiscal 2025, total share repurchases were $1.4 billion ⁷³. The company issued $1.5 billion of senior notes in May 2025 ⁷⁴ and used the proceeds to repay all outstanding balances on its term loans ⁷⁵. The company amended its credit agreement to increase borrowing capacity under the unsecured revolving line of credit to $1.0 billion ⁷⁶. Capitalized internal-use software costs were $30,485,000 ⁷⁷ during fiscal 2025. The company has not declared or paid any cash dividends on its common stock since May 2017 and does not presently plan to pay cash dividends in the foreseeable future ⁷⁸.

A structural headwind flagged by management is the reliance on the three major consumer reporting agencies (Experian, TransUnion, Equifax) for a significant portion of revenues and profits. During fiscal 2025, 2024, and 2023, revenues from these three customers collectively accounted for 51%, 45%, and 41% of total revenues, respectively ⁷⁹. The loss of or a significant change in a relationship with one of these agencies could have a material adverse effect on revenues and results of operations ⁸⁰. Additionally, the volume of Scores sales depends heavily on macroeconomic conditions, including the volume of transactions in the U.S. mortgage and credit card markets, which account for a significant portion of Scores segment revenues ⁸¹.

Regulatory and competitive constraints are also identified as headwinds. The continued use of the FICO Score by Fannie Mae and Freddie Mac is subject to ongoing validation and approval, and if other credit score models are approved or the FICO Score is not approved for continued use, it could have a material adverse effect on revenues, results of operations, and stock price ⁸². The FHFA Director announced in July 2025 a change permitting mortgage originators to choose the credit score they submit with mortgages delivered to Fannie Mae and Freddie Mac ⁸³. Increased regulatory focus on U.S. residential mortgage closing costs may affect the ability to implement price changes for FICO Scores used in mortgage originations ⁸⁴. The company also faces competition from VantageScore, a joint venture of the three major U.S. consumer reporting agencies, which is selling a competitive credit scoring product ⁸⁵.

Management's message emphasizes the continued strength of the FICO Score as the standard measure of consumer credit risk in the U.S. and the advancement of the Software segment's platform-first strategy. Key themes include the adoption of FICO Score 10 and 10 T, which gained increased traction for non-conforming mortgages and was approved for conforming mortgages by the Federal Housing Finance Agency ⁹², and the launch of innovative products such as FICO Score 10 BNPL and FICO Score 10 T BNPL ⁹³. Management highlights the expansion of FICO Platform reach, both by geography and customer type, with the launch of FICO Marketplace ⁹⁴. Strategic priorities emphasized for the period ahead include continuing to invest significant development resources to enable substantially all software to run on FICO Platform ⁹⁵, expanding into newer markets for products and services ⁹⁶, and enhancing stockholder value through the stock repurchase program, with $1.4 billion in repurchases during fiscal 2025 ⁹⁷.

Total revenues were $1,990,869,000 ⁹⁸ in fiscal 2025, compared to $1,717,526,000 ⁹⁹ in fiscal 2024. Net income was $651,946,000 ¹⁰⁰ in fiscal 2025, compared to $512,811,000 ¹⁰¹ in fiscal 2024. Diluted EPS was $26.54 ¹⁰² in fiscal 2025, compared to $20.45 ¹⁰³ in fiscal 2024. Operating income was $924,850,000 ¹⁰⁴ in fiscal 2025, compared to $733,629,000 ¹⁰⁵ in fiscal 2024. Operating margin was 46% ¹⁰⁶ of revenues in fiscal 2025, compared to 43% ¹⁰⁷ in fiscal 2024. Cash flow from operating activities was $778,807,000 ¹⁰⁸ in fiscal 2025, compared to $632,964,000 ¹⁰⁹ in fiscal 2024. As of September 30, 2025, total debt was $3,055,691,000 ¹¹⁰ and cash and cash equivalents were $134,136,000 ¹¹¹, resulting in a net debt position of $2,921,555,000. The effective income tax rate was 18.8% ¹¹² in fiscal 2025, compared to 20.1% ¹¹³ in fiscal 2024. Restructuring charges of $10,922,000 ¹¹⁴ were incurred during fiscal 2025 due to the elimination of 226 positions ¹¹⁵. For the Scores segment, operating income was $1,026,243,000 ¹¹⁶ in fiscal 2025, representing 88% of segment revenues ¹¹⁷. For the Software segment, operating income was $247,694,000 ¹¹⁸ in fiscal 2025, representing 30% of segment revenues ¹¹⁹.

A material risk is the reliance on the three major consumer reporting agencies (Experian, TransUnion, Equifax), which collectively accounted for 51% of total revenues in fiscal 2025 ⁸⁶; the loss or significant change in any of these relationships could materially adversely affect revenues and results of operations ⁸⁷. Another critical risk is the dependence on the continued use of the FICO Score by Fannie Mae and Freddie Mac, which is subject to ongoing validation and approval; if other credit score models are approved or the FICO Score is not approved, it could have a material adverse effect on revenues, results of operations, and stock price ⁸⁸. The company faces intense competition, including from VantageScore, a joint venture of the three major U.S. consumer reporting agencies that sells a competitive credit scoring product ⁸⁹. Cybersecurity risks are significant, as the company routinely is the target of attempted cybersecurity threats, and a successful breach could result in unauthorized disclosure of consumer or customer information, significant litigation, regulatory fines, and reputational damage ⁹⁰. Additionally, the company's Scores segment revenues depend heavily on macroeconomic conditions, particularly the volume of transactions in the U.S. mortgage and credit card markets, which are hard to forecast ⁹¹.