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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 June 30, 2022


☐			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. ☐

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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 July 22, 2022 was 25,252,514 (excluding 63,604,269 shares held by us as treasury stock).

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TABLE OF CONTENTS


	PART I – FINANCIAL INFORMATION

Item 1.	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	36
Item 4.	Controls and Procedures	38

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	55
Signatures		56

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2022		September 30, 2021
	(In thousands, except par value data)
Assets
Current assets:
Cash and cash equivalents	$	155,062	$	195,354
Accounts receivable, net	286,341		312,107
Prepaid expenses and other current assets	31,854		43,513
Total current assets	473,257		550,974
Marketable securities	25,347		31,884
Other investments	1,213		1,312
Property and equipment, net	20,449		27,913
Operating lease right-of-use assets	39,711		47,275
Goodwill	772,673		788,185
Intangible assets, net	2,459		4,099
Deferred income taxes	18,268		20,549
Other assets	103,459		95,585
Total assets	$	1,456,836	$	1,567,776
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	17,399	$	20,749
Accrued compensation and employee benefits	80,194		103,506
Other accrued liabilities	57,776		79,535
Deferred revenue	98,486		105,417
Current maturities on debt	130,000		250,000
Total current liabilities	383,855		559,207
Long-term debt	1,826,671		1,009,018
Operating lease liabilities	42,970		53,670
Other liabilities	50,812		56,823
Total liabilities	2,304,308		1,678,718
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 25,252 and 27,568 shares outstanding at June 30, 2022 and September 30, 2021, respectively)	253		276
Additional paid-in-capital	1,269,289		1,237,348
Treasury stock, at cost (63,605 and 61,289 shares at June 30, 2022 and September 30, 2021, respectively)	(4,881,304)		(3,857,855)
Retained earnings	2,867,985		2,585,143
Accumulated other comprehensive loss	(103,695)		(75,854)
Total stockholders’ deficit	(847,472)		(110,942)
Total liabilities and stockholders’ deficit	$	1,456,836	$	1,567,776

See accompanying notes.

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FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)


	Quarter Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
	(In thousands, except per share data)
Revenues:
On-premises and SaaS software	$	142,537	$	130,230	$	417,963	$	382,236
Professional services	27,074		35,752		77,975		114,151
Scores	179,355		172,202		532,584		485,572
Total revenues	348,966		338,184		1,028,522		981,959
Operating expenses:
Cost of revenues	78,691		82,240		219,688		260,101
Research and development	35,880		45,826		111,247		130,089
Selling, general and administrative	93,248		107,729		287,710		298,912
Amortization of intangible assets	532		810		1,619		2,692

Gains on product line asset sales and business divestiture	—		(92,805)		—		(100,139)
Total operating expenses	208,351		143,800		620,264		591,655
Operating income	140,615		194,384		408,258		390,304
Interest expense, net	(18,721)		(10,018)		(48,127)		(29,602)
Other income (expense), net	(1,000)		3,526		(1,932)		6,974
Income before income taxes	120,894		187,892		358,199		367,676
Provision for income taxes	27,394		36,694		75,357		61,312
Net income	93,500		151,198		282,842		306,364
Other comprehensive income (loss):
Foreign currency translation adjustments	(22,496)		4,243		(27,841)		19,445
Comprehensive income	$	71,004	$	155,441	$	255,001	$	325,809
Earnings per share:
Basic	$	3.65	$	5.27	$	10.75	$	10.58
Diluted	$	3.61	$	5.18	$	10.63	$	10.38
Shares used in computing earnings per share:
Basic	25,634		28,687		26,319		28,967
Diluted	25,867		29,195		26,608		29,505

See accompanying notes.

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FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (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 March 31, 2022	25,982	$	260	$	1,242,280	$	(4,599,242)	$	2,774,485	$	(81,199)	$	(663,416)
Share-based compensation	—	—		28,549		—		—		—		28,549
Issuance of treasury stock under employee stock plans	5	1		(1,540)		361		—		—		(1,178)
Repurchases of common stock	(735)	(8)		—		(282,423)		—		—		(282,431)
Net income	—	—		—		—		93,500		—		93,500
Foreign currency translation adjustments	—	—		—		—		—		(22,496)		(22,496)
Balance at June 30, 2022	25,252	$	253	$	1,269,289	$	(4,881,304)	$	2,867,985	$	(103,695)	$	(847,472)

	Common Stock			Additional Paid-in-Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
(In thousands)	Shares	Par Value
Balance at March 31, 2021	28,829	$	288	$	1,181,692	$	(3,239,109)	$	2,348,225	$	(67,793)	$	223,303
Share-based compensation	—	—		30,004		—		—		—		30,004
Issuance of treasury stock under employee stock plans	46	1		(532)		2,604		—		—		2,073
Repurchases of common stock	(489)	(5)		(40,000)		(245,978)		—		—		(285,983)
Net income	—	—		—		—		151,198		—		151,198
Foreign currency translation adjustments	—	—		—		—		—		4,243		4,243
Balance at June 30, 2021	28,386	$	284	$	1,171,164	$	(3,482,483)	$	2,499,423	$	(63,550)	$	124,838

	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, 2021	27,568	$	276	$	1,237,348	$	(3,857,855)	$	2,585,143	$	(75,854)	$	(110,942)
Share-based compensation	—	—		86,363		—		—		—		86,363
Issuance of treasury stock under employee stock plans	242	3		(54,422)		16,509		—		—		(37,910)
Repurchases of common stock	(2,558)	(26)		—		(1,039,958)		—		—		(1,039,984)
Net income	—	—		—		—		282,842		—		282,842
Foreign currency translation adjustments	—	—		—		—		—		(27,841)		(27,841)
Balance at June 30, 2022	25,252	$	253	$	1,269,289	$	(4,881,304)	$	2,867,985	$	(103,695)	$	(847,472)

	Common Stock			Additional Paid-in-Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity
(In thousands)	Shares	Par Value
Balance at September 30, 2020	29,096	$	291	$	1,218,583	$	(2,997,856)	$	2,193,059	$	(82,995)	$	331,082
Share-based compensation	—	—		83,342		—		—		—		83,342
Issuance of treasury stock under employee stock plans	321	3		(90,761)		16,568		—		—		(74,190)
Repurchases of common stock	(1,031)	(10)		(40,000)		(501,195)		—		—		(541,205)
Net income	—	—		—		—		306,364		—		306,364
Foreign currency translation adjustments	—	—		—		—		—		19,445		19,445
Balance at June 30, 2021	28,386	$	284	$	1,171,164	$	(3,482,483)	$	2,499,423	$	(63,550)	$	124,838

See accompanying notes.

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FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended June 30,
	2022		2021
	(In thousands)
Cash flows from operating activities:
Net income	$	282,842	$	306,364
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	15,819		20,066
Share-based compensation	86,363		84,099
Deferred income taxes	1,825		(11,064)
Net (gain) loss on marketable securities	7,985		(4,706)
Non-cash operating lease costs	12,094		12,056
Provision for doubtful accounts	975		551
Gains on product line asset sales and business divestiture	—		(100,139)
Net loss on sales and abandonment of property and equipment	210		107
Changes in operating assets and liabilities:
Accounts receivable	12,134		56,655
Prepaid expenses and other assets	4,945		5,172
Accounts payable	(2,978)		(4,165)
Accrued compensation and employee benefits	(22,355)		(24,990)
Other liabilities	(33,166)		(5,388)
Deferred revenue	(2,069)		(2,556)
Net cash provided by operating activities	364,624		332,062
Cash flows from investing activities:
Purchases of property and equipment	(5,232)		(5,792)
Proceeds from sales of marketable securities	6,575		2,294
Purchases of marketable securities	(8,022)		(5,121)
Proceeds from product line asset sales and business divestiture	2,257		146,428

Purchase of equity investment	—		(210)
Net cash provided by (used in) investing activities	(4,422)		137,599
Cash flows from financing activities:
Proceeds from revolving line of credit and term loan	1,010,000		429,000
Payments on revolving line of credit and term loan	(855,500)		(208,000)
Proceeds from issuance of senior notes	550,000		—

Payments on debt issuance costs	(8,819)		—
Payments on finance leases	—		(177)
Proceeds from issuance of treasury stock under employee stock plans	11,117		14,580
Taxes paid related to net share settlement of equity awards	(49,027)		(88,770)
Repurchases of common stock	(1,048,027)		(541,205)
Net cash used in financing activities	(390,256)		(394,572)
Effect of exchange rate changes on cash	(10,238)		5,129
Increase (decrease) in cash and cash equivalents	(40,292)		80,218
Cash and cash equivalents, beginning of period	195,354		157,394
Cash and cash equivalents, end of period	$	155,062	$	237,612
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net of refunds of $1,021 and $289 during the nine-month periods ended June 30, 2022 and 2021, respectively	$	45,984	$	34,465
Cash paid for interest	$	52,058	$	36,764
Supplemental disclosures of non-cash investing and financing activities:
Purchase of property and equipment included in accounts payable	$	11	$	564

See accompanying notes.

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FAIR ISAAC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Nature of Business

Fair Isaac Corporation

Fair Isaac Corporation (NYSE: FICO) (together with its consolidated subsidiaries, the “Company,” which may also be referred to in this report as “we,” “us,” “our,” or “FICO”) is a leading applied analytics company. 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 nearly 120 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 companies, 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 in the U.S. of consumer credit risk — empowering them to increase financial literacy and manage their financial health.

Principles of Consolidation and Basis of Presentation

We have prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q and the applicable accounting guidance. Consequently, we have not necessarily included all information and footnotes required for audited financial statements. In our opinion, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments, except as otherwise indicated) necessary for a fair presentation of our financial position and results of operations. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with our audited consolidated financial statements and notes thereto presented in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. The interim financial information contained in this report is not necessarily indicative of the results to be expected for any other interim period or for the entire fiscal year.

The condensed consolidated financial statements include the accounts of FICO and its subsidiaries. All intercompany accounts and transactions have been eliminated.

During the fourth quarter of fiscal 2021, we consolidated our operating segment structure from three to two by merging Applications and Decision Management Software segments into the new Software segment. As a result, we modified the presentation of our segment financial information with retrospective application to all prior periods presented. Refer to Note 18 - Segment Information to the consolidated financial statements included in Part II, Item 8 of our 2021 Annual Report on Form 10-K for further information.

In addition, effective beginning in the fourth quarter of fiscal 2021, we changed the classification of revenue from transactional and maintenance, professional services, and license to on-premises and SaaS software, professional services and scores, which is reflected in our condensed consolidated statements of income and comprehensive income, as well as our disclosures on disaggregation of revenue, to better align with our business strategy. Previously reported amounts in the condensed consolidated statements of income and comprehensive income and notes to the condensed consolidated financial statements were adjusted to conform to the current presentation.

Use of Estimates

We make estimates and assumptions that affect the amounts reported in the financial statements and the disclosures made in the accompanying notes. For example, we use estimates in determining the appropriate levels of various accruals; variable considerations included in the transaction price and standalone selling price of each performance obligation for our customer contracts; labor hours in connection with fixed-fee service contracts; the amount of our tax provision; and the realizability of deferred tax assets. We also use estimates in determining the remaining economic lives and carrying values of acquired intangible assets, property and equipment, and other long-lived assets. In addition, we use assumptions to estimate the fair value of reporting units and share-based compensation. Actual results may differ from our estimates.

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As the impact of the COVID-19 pandemic continues to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment. These estimates and assumptions may change in future periods and will be recognized in the condensed consolidated financial statements as new events occur and additional information becomes known. To the extent our actual results differ materially from those estimates and assumptions, our future financial statements could be affected. For more information, see Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q.

New Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”). ASU 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities from acquired contracts using the revenue recognition guidance under Accounting Standards Codification Topic 606, Revenue from Contacts with Customers, in order to align the recognition of a contract liability with the definition of a performance obligation. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, which means that it will be effective for our fiscal year beginning October 1, 2023. Early adoption is permitted. We do not believe that adoption of ASU 2021-08 will have a significant impact on our condensed consolidated financial statements.

We do not expect that any other recently issued accounting pronouncements will have a significant effect on our financial statements.

2. Fair Value Measurements

Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities.

•Level 1 - uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. Our Level 1 assets were comprised of money market funds and certain marketable securities and our Level 1 liabilities included senior notes as of June 30, 2022 and September 30, 2021.

•Level 2 - uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. We did not have any assets or liabilities that are valued using inputs identified under a Level 2 hierarchy as of June 30, 2022 and September 30, 2021.

•Level 3 - uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. We did not have any assets or liabilities that are valued using inputs identified under a Level 3 hierarchy as of June 30, 2022 and September 30, 2021.

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The following tables represent financial assets that we measured at fair value on a recurring basis at June 30, 2022 and September 30, 2021:


June 30, 2022	Active Markets for Identical Instruments (Level 1)		Fair Value as of June 30, 2022
	(In thousands)
Assets:
Cash equivalents (1)	$	30,718	$	30,718
Marketable securities (2)	25,347		25,347
Total	$	56,065	$	56,065

September 30, 2021	Active Markets for Identical Instruments (Level 1)		Fair Value as of September 30, 2021
	(In thousands)
Assets:
Cash equivalents (1)	$	194	$	194
Marketable securities (2)	31,884		31,884
Total	$	32,078	$	32,078

(1)Included in cash and cash equivalents on our condensed consolidated balance sheets at June 30, 2022 and September 30, 2021. Not included in these tables are cash deposits of $124.3 million and $195.2 million at June 30, 2022 and September 30, 2021, respectively.

(2)Represents securities held under a supplemental retirement and savings plan for certain officers and senior management employees, which are distributed upon termination or retirement of the employees. Included in marketable securities on our condensed consolidated balance sheets at June 30, 2022 and September 30, 2021.

See Note 7 for the fair value of our senior notes.

There were no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy during the quarters and nine-month periods ended June 30, 2022 and 2021.

3. Derivative Financial Instruments

We use derivative instruments to manage risks caused by fluctuations in foreign exchange rates. The primary objective of our derivative instruments is to protect the value of foreign-currency-denominated receivable and cash balances from the effects of volatility in foreign exchange rates that might occur prior to conversion to their functional currencies. We principally utilize foreign currency forward contracts, which enable us to buy and sell foreign currencies in the future at fixed exchange rates and economically offset changes in foreign exchange rates. We routinely enter into contracts to offset exposures denominated in the British pound, Euro, and Singapore dollar.

Foreign currency-denominated receivable and cash balances are remeasured at foreign exchange rates in effect on the balance sheet date with the effects of changes in foreign exchange rates reported in other income (expense), net. The forward contracts are not designated as hedges and are marked to market through other income (expense), net. Fair value changes in the forward contracts help mitigate the changes in the value of the remeasured receivable and cash balances attributable to changes in foreign exchange rates. The forward contracts are short-term in nature and typically have average maturities at inception of less than three months.

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The following tables summarize our outstanding foreign currency forward contracts, by currency, at June 30, 2022 and September 30, 2021:


	June 30, 2022
	Contract Amount				Fair Value
	Foreign Currency		USD		USD
	(In thousands)
Sell foreign currency:

Euro (EUR)	EUR	15,800	$	16,372	$	—
Buy foreign currency:
British pound (GBP)	GBP	8,100	$	9,800	$	—
Singapore dollar (SGD)	SGD	4,315	$	3,100	$	—


	September 30, 2021
	Contract Amount				Fair Value
	Foreign Currency		USD		USD
	(In thousands)
Sell foreign currency:

Euro (EUR)	EUR	17,100	$	19,829	$	—
Buy foreign currency:
British pound (GBP)	GBP	11,467	$	15,400	$	—
Singapore dollar (SGD)	SGD	6,650	$	4,900	$	—

The foreign currency forward contracts were entered into on June 30, 2022 and September 30, 2021, respectively; therefore, their fair value was $0 on each of these dates.

Gains (losses) on derivative financial instruments were recorded in our condensed consolidated statements of income and comprehensive income as a component of other income (expense), net, and consisted of the following:


	Quarter Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Gains (losses) on foreign currency forward contracts	$	(1,272)	$	88	$	(1,286)	$	3,003

4. Goodwill and Intangible Assets

Amortization expense associated with our intangible assets is reflected as a separate operating expense caption — amortization of intangible assets — and is excluded from cost of revenues and selling, general and administrative expenses within the accompanying condensed consolidated statements of income and comprehensive income. Amortization expense consisted of the following:


	Quarter Ended June 30,				Nine Months Ended June 30,
	2022		2021		2022		2021
	(In thousands)
Completed technology	$	125	$	257	$	375	$	902
Customer contracts and relationships	407		510		1,244		1,659

Non-compete agreements	—		43		—		131
Total	$	532	$	810	$	1,619	$	2,692

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Estimated future intangible asset amortization expense associated with intangible assets existing at June 30, 2022 was as follows:


Year Ending September 30,	(In thousands)
2022 (excluding the nine months ended June 30, 2022)	$	442
2023	1,100
2024	917



Total	$	2,459

The following table summarizes changes to goodwill during the nine months ended June 30, 2022, both in total and as allocated to our segments. We have not recognized any goodwill impairment losses to date.


	Scores		Software		Total
	(In thousands)
Balance at September 30, 2021	$	146,648	$	641,537	$	788,185


Foreign currency translation adjustment	—		(15,512)		(15,512)

Balance at June 30, 2022	$	146,648	$	626,025	$	772,673

5. Composition of Certain Financial Statement Captions

The following table presents the composition of property and equipment, net at June 30, 2022 and September 30, 2021:


	June 30, 2022		September 30, 2021
	(In thousands)
Property and equipment, net:
Property and equipment	$	121,907	$	124,966
Less: accumulated depreciation and amortization	(101,458)		(97,053)
Total	$	20,449	$	27,913

6. Revolving Line of Credit and Term Loan

We have a $600 million unsecured revolving line of credit with a syndicate of banks that expires on August 19, 2026. Borrowings under the credit facility 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 on amounts borrowed under the credit facility is based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.500%, and (c) the one-month LIBOR rate plus 1.000%, plus, in each case, an applicable margin, or (ii) an adjusted LIBOR rate plus an applicable margin. The applicable margin for base rate borrowings ranges from 0% to 0.750% and for LIBOR borrowings ranges from 1.000% to 1.750%, and is determined based on our consolidated leverage ratio. In addition, we must pay credit facility fees. The credit facility contains certain restrictive covenants including a maximum consolidated leverage ratio of 3.50, subject to a step up to 4.00 following certain permitted acquisitions; and a minimum interest coverage ratio of 3.00. The credit agreement also contains other covenants typical of unsecured facilities.

In addition, we have a term loan in an initial principal amount of $300 million. The term loan is subject to the same pricing and covenants as the revolving line of credit and matures at the expiration of the facility on August 19, 2026. The term loan requires principal payments in consecutive quarterly installments of $3.75 million on the last business day of each quarter.

As of June 30, 2022, we had $380.0 million in borrowings outstanding under the revolving credit facility at a weighted-average interest rate of 2.974%, and $292.5 million in outstanding balance of the term loan at an interest rate of 2.684%, of which $542.5 million was classified as a long-term liability and recorded in long-term debt within the accompanying condensed consolidated balance sheets. We were in compliance with all financial covenants under this credit facility as of June 30, 2022.

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7. 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,” and collectively with the 2018 Senior Notes and the 2019 Senior Notes, the “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.

The indentures for the Senior Notes contain certain covenants typical of unsecured obligations.

The following table presents the face values and fair values for the Senior Notes at June 30, 2022 and September 30, 2021:


	June 30, 2022				September 30, 2021
	Face Value (*)		Fair Value		Face Value (*)		Fair Value
	(In thousands)
The 2018 Senior Notes	$	400,000	$	388,000	$	400,000	$	453,000
The 2019 Senior Notes and the 2021 Senior Notes	900,000		801,000		350,000		357,000
Total	$	1,300,000	$	1,189,000	$	750,000	$	810,000

(*) The carrying value of the Senior Notes was the face value reduced by the net debt issuance costs of $15.0 million and $9.0 million at June 30, 2022 and September 30, 2021, respectively.

8. Revenue from Contracts with Customers

Disaggregation of Revenue

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


	Quarter Ended June 30, 2022
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	177,892	$	115,331	$	293,223	84	%
Europe, Middle East and Africa	1,051		36,324		37,375		11	%
Asia Pacific	412		17,956		18,368		5	%
Total	$	179,355	$	169,611	$	348,966	100	%


	Quarter Ended June 30, 2021
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	165,539	$	103,627	$	269,166	80	%
Europe, Middle East and Africa	2,988		44,881		47,869		14	%
Asia Pacific	3,675		17,474		21,149		6	%
Total	$	172,202	$	165,982	$	338,184	100	%

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	Nine Months Ended June 30, 2022
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	518,695	$	319,180	$	837,875	81	%
Europe, Middle East and Africa	3,796		107,850		111,646		11	%
Asia Pacific	10,093		68,908		79,001		8	%
Total	$	532,584	$	495,938	$	1,028,522	100	%

	Nine Months Ended June 30, 2021
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	468,039	$	311,323	$	779,362	79	%
Europe, Middle East and Africa	10,343		132,749		143,092		15	%
Asia Pacific	7,190		52,315		59,505		6	%
Total	$	485,572	$	496,387	$	981,959	100	%

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


	Quarter Ended June 30,				Percentage of revenues				Nine Months Ended June 30,			Percentage of revenues
	2022		2021		2022		2021		2022		2021	2022	2021
	(Dollars in thousands)
On-premises software	$	70,689	$	63,536	50	%	49	%	$	205,943	$