Revenue from Contract with Customer

6 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer

Revenue from Contracts with Customers

Disaggregation of Revenue

The following tables provide information about disaggregated revenue by primary geographical market:

	Quarter Ended March 31, 2022
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	175,091	$	104,664	$	279,755	78	%
Europe, Middle East and Africa	1,252		34,128		35,380		10	%
Asia Pacific	7,399		34,661		42,060		12	%
Total	$	183,742	$	173,453	$	357,195	100	%

	Quarter Ended March 31, 2021
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	161,787	$	99,672	$	261,459	79	%
Europe, Middle East and Africa	5,642		44,033		49,675		15	%
Asia Pacific	1,290		18,937		20,227		6	%
Total	$	168,719	$	162,642	$	331,361	100	%

	Six Months Ended March 31, 2022
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	340,803	$	203,849	$	544,652	80	%
Europe, Middle East and Africa	2,745		71,526		74,271		11	%
Asia Pacific	9,681		50,952		60,633		9	%
Total	$	353,229	$	326,327	$	679,556	100	%
	Six Months Ended March 31, 2021
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	302,500	$	207,696	$	510,196	79	%
Europe, Middle East and Africa	7,355		87,868		95,223		15	%
Asia Pacific	3,515		34,841		38,356		6	%
Total	$	313,370	$	330,405	$	643,775	100	%

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

	Quarter Ended March 31,				Percentage of revenues				Six Months Ended March 31,				Percentage of revenues
	2022		2021		2022		2021		2022		2021		2022		2021
	(Dollars in thousands)
On-premises software	$	77,959	$	63,431	52	%	51	%	$	135,254	$	129,913	49	%	52	%
SaaS software	71,129		62,120		48	%	49	%	140,172		122,093		51	%	48	%
Total on-premises and SaaS software	$	149,088	$	125,551	100	%	100	%	$	275,426	$	252,006	100	%	100	%

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

	Quarter Ended March 31,				Percentage of revenues				Six Months Ended March 31,				Percentage of revenues
	2022		2021		2022		2021		2022		2021		2022		2021
	(Dollars in thousands)
Platform software (*)	$	39,802	$	15,312	27	%	12	%	$	61,874	$	29,437	22	%	12	%
Non-platform software	109,286		110,239		73	%	88	%	213,552		222,569		78	%	88	%
Total on-premises and SaaS software	$	149,088	$	125,551	100	%	100	%	$	275,426	$	252,006	100	%	100	%

(*) The FICO platform software is a set of interoperable services which use software assets owned and/or governed by FICO for building solutions and which conform to FICO architectural standards based on key elements of Cloud Native Computing design principles. These standards encompass shared security context and pre-integration using FICO standard application programming interfaces for all services.

The following table provides information about disaggregated revenue for our Software segment by timing of revenue recognition:

	Quarter Ended March 31,				Percentage of revenues				Six Months Ended March 31,				Percentage of revenues
	2022		2021		2022		2021		2022		2021		2022		2021
	(Dollars in thousands)
Software recognized at a point in time (1)	$	26,540	$	11,844	18	%	9	%	$	33,699	$	24,738	12	%	10	%
Software recognized over contract term (2)	122,548		113,707		82	%	91	%	241,727		227,268		88	%	90	%
Total on-premises and SaaS software	$	149,088	$	125,551	100	%	100	%	$	275,426	$	252,006	100	%	100	%

(1)Includes license portion of our on-premises subscription software and perpetual license, both of which are recognized when the software is made available to the customer, or at the start of the subscription.

(2)Includes maintenance portion and usage-based fees of our on-premises subscription software, maintenance revenue on perpetual licenses, as well as SaaS revenue.

The following table provides information about disaggregated revenue for our Scores segment by distribution method:

	Quarter Ended March 31,				Percentage of revenues				Six Months Ended March 31,				Percentage of revenues
	2022		2021		2022		2021		2022		2021		2022		2021
	(Dollars in thousands)
Business-to-business Scores	$	125,243	$	119,319	68	%	71	%	$	238,211	$	219,463	67	%	70	%
Business-to-consumer Scores	58,499		49,400		32	%	29	%	115,018		93,907		33	%	30	%
Total	$	183,742	$	168,719	100	%	100	%	$	353,229	$	313,370	100	%	100	%

We derive a substantial portion of revenues from our contracts with the three major consumer reporting agencies, TransUnion, Equifax and Experian. Revenues collectively generated by agreements with these customers accounted for 39% of our total revenues in each of the quarters ended March 31, 2022 and 2021, with all three consumer reporting agencies each contributing more than 10% of our total revenues in each of the quarters ended March 31, 2022 and 2021. Revenues collectively generated by agreements with these customers accounted for 38% and 37% of our total revenues in the six months ended March 31, 2022 and 2021, respectively, with two and three consumer reporting agencies each contributing more than 10% of our total revenues in the six months ended March 31, 2022 and 2021, respectively.

Contract Balances    

We record a receivable when we satisfy a performance obligation prior to invoicing if only the passage of time is required before payment is due or if we have an unconditional right to consideration before we satisfy a performance obligation. We record a contract asset when we satisfy a performance obligation prior to invoicing but our right to consideration is conditional. We record deferred revenue when the payment is made or due before we satisfy a performance obligation.

Receivables at March 31, 2022 and September 30, 2021 consisted of the following: 

	March 31, 2022		September 30, 2021
	(In thousands)
Billed	$	164,659	$	198,305
Unbilled	156,018		155,408
	320,677		353,713
Less: allowance for doubtful accounts	(3,780)		(4,154)
Net receivables	316,897		349,559
Less: long-term receivables (*)	(43,541)		(37,452)
Short-term receivables (*)	$	273,356	$	312,107

(*) Short-term receivables and long-term receivables were recorded in accounts receivable, net and other assets, respectively, within the accompanying condensed consolidated balance sheets.

Deferred revenue primarily relates to our maintenance and SaaS contracts billed annually in advance and generally recognized ratably over the term of the service period. Significant changes in the deferred revenues balances are as follows:

	Six Months Ended March 31,
	2022		2021
Deferred revenues, beginning balance (*)	$	110,763	$	122,141
Revenue recognized that was included in the deferred revenues balance at the beginning of the period	(70,160)		(75,600)
Increases due to billings, excluding amounts recognized as revenue during the period	66,292		78,945
Reclassified as liabilities related to assets held for sale	—		(16,508)
Deferred revenues, ending balance (*)	$	106,895	$	108,978

(*) Deferred revenues at March 31, 2022 included current portion of $102.5 million and long-term portion of $4.4 million that were recorded in deferred revenue and other liabilities, respectively, within the condensed consolidated balance sheets. Deferred revenues at September 30, 2021 included current portion of $105.4 million and long-term portion of $5.4 million that were recorded in deferred revenue and other liabilities, respectively, within the condensed consolidated balance sheets.

Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, we have determined our contracts generally do not include a significant financing component. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to provide customers with financing or to receive financing from our customers. Examples include multi-year on-premises licenses that are invoiced annually with revenue recognized upfront and invoicing at the beginning of a subscription term with revenue recognized ratably over the contract period.

Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that will be recognized in future periods, which is comprised of deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. This does not include:

•Usage-based revenue that will be recognized in future periods from on-premises software subscriptions;

•Consumption-based variable fees from SaaS software that will be recognized in the distinct service period during which it is earned; and

•Revenue from variable considerations that will be recognized in accordance with the “right-to-invoice” practical expedient, such as fees from our professional services billed based on a time and materials basis.

Revenue allocated to remaining performance obligations was $291.7 million as of March 31, 2022, approximately 52% of which we expect to recognize over the next 16 months and the remainder thereafter. Revenue allocated to remaining performance obligations was $289.0 million as of September 30, 2021.