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fico-20230331

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 March 31, 2023


☐			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 April 14, 2023 was 24,993,116 (excluding 63,863,667 shares held by us as treasury stock).

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TABLE OF CONTENTS


	PART I – FINANCIAL INFORMATION

Item 1.	Unaudited Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	31

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
Signatures		34

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PART I – FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2023		September 30, 2022
	(In thousands, except par value data)
Assets
Current assets:
Cash and cash equivalents	137,771		133,202
Accounts receivable, net	338,239		322,410
Prepaid expenses and other current assets	45,316		29,103
Total current assets	521,326		484,715
Marketable securities	29,580		24,515
Other investments	1,232		1,135
Property and equipment, net	13,664		17,580
Operating lease right-of-use assets	29,638		36,688
Goodwill	774,330		761,067
Intangible assets, net	1,467		2,017
Deferred income taxes	30,618		11,803
Other assets	100,576		102,514
Total assets	$	1,502,431	$	1,442,034
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	13,915		$	17,273
Accrued compensation and employee benefits	65,863		97,893
Other accrued liabilities	68,152		66,248
Deferred revenue	118,348		120,045
Current maturities on debt	107,000		30,000
Total current liabilities	373,278		331,459
Long-term debt	1,817,663		1,823,669
Operating lease liabilities	28,825		39,192
Other liabilities	53,458		49,661
Total liabilities	2,273,224		2,243,981
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 25,016 and 25,154 shares outstanding at March 31, 2023 and September 30, 2022, respectively)	250		252
Additional paid-in-capital	1,281,270		1,299,588
Treasury stock, at cost (63,841 and 63,703 shares at March 31, 2023 and September 30, 2022, respectively)	(5,110,421)		(4,935,769)
Retained earnings	3,157,877		2,958,684
Accumulated other comprehensive loss	(99,769)		(124,702)
Total stockholders’ deficit	(770,793)		(801,947)
Total liabilities and stockholders’ deficit	$	1,502,431	$	1,442,034

See accompanying notes.

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FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Unaudited)


	Quarter Ended March 31,				Six Months Ended March 31,
	2023		2022		2023		2022
	(In thousands, except per share data)
Revenues:
On-premises and SaaS software	$	154,584	$	149,088	$	299,144	$	275,426
Professional services	27,175		24,365		49,497		50,901
Scores	198,507		183,742		376,495		353,229
Total revenues	380,266		357,195		725,136		679,556
Operating expenses:
Cost of revenues	79,806		71,794		156,375		140,997
Research and development	40,266		36,387		76,899		75,367
Selling, general and administrative	100,158		96,414		193,153		194,462
Amortization of intangible assets	275		543		550		1,087

Gain on product line asset sale	—		—		(1,941)		—
Total operating expenses	220,505		205,138		425,036		411,913
Operating income	159,761		152,057		300,100		267,643
Interest expense, net	(23,897)		(17,211)		(46,697)		(29,406)
Other income (expense), net	1,605		(2,361)		1,969		(932)
Income before income taxes	137,469		132,485		255,372		237,305
Provision for income taxes	35,919		28,102		56,179		47,963
Net income	101,550		104,383		199,193		189,342
Other comprehensive income (loss):
Foreign currency translation adjustments	6,552		(3,207)		24,933		(5,345)
Comprehensive income	$	108,102	$	101,176	$	224,126	$	183,997
Earnings per share:
Basic	$	4.04	$	3.99	$	7.94	$	7.10
Diluted	$	4.00	$	3.95	$	7.83	$	7.02
Shares used in computing earnings per share:
Basic	25,116		26,145		25,080		26,662
Diluted	25,419		26,421		25,431		26,978

See accompanying notes.

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FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(Unaudited)


	Common Stock			Additional Paid-in-Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Deficit
(In thousands)	Shares	Par Value
Balance at December 31, 2022	25,155	$	252	$	1,244,271	$	(4,996,624)	$	3,056,327	$	(106,321)	$	(802,095)
Share-based compensation	—	—		27,053		—		—		—		27,053
Issuance of treasury stock under employee stock plans	32	—		9,946		2,468		—		—		12,414
Repurchases of common stock	(171)	(2)		—		(116,265)		—		—		(116,267)
Net income	—	—		—		—		101,550		—		101,550
Foreign currency translation adjustments	—	—		—		—		—		6,552		6,552
Balance at March 31, 2023	25,016	$	250	$	1,281,270	$	(5,110,421)	$	3,157,877	$	(99,769)	$	(770,793)

	Common Stock			Additional Paid-in-Capital		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Deficit
(In thousands)	Shares	Par Value
Balance at December 31, 2021	26,509	$	265	$	1,208,365	$	(4,339,039)	$	2,670,102	$	(77,992)	$	(538,299)
Share-based compensation	—	—		27,936		—		—		—		27,936
Issuance of treasury stock under employee stock plans	52	1		5,979		3,762		—		—		9,742
Repurchases of common stock	(579)	(6)		—		(263,965)		—		—		(263,971)
Net income	—	—		—		—		104,383		—		104,383
Foreign currency translation adjustments	—	—		—		—		—		(3,207)		(3,207)
Balance at March 31, 2022	25,982	$	260	$	1,242,280	$	(4,599,242)	$	2,774,485	$	(81,199)	$	(663,416)

	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, 2022	25,154	$	252	$	1,299,588	$	(4,935,769)	$	2,958,684	$	(124,702)	$	(801,947)
Share-based compensation	—	—		56,755		—		—		—		56,755
Issuance of treasury stock under employee stock plans	212	2		(75,073)		16,615		—		—		(58,456)
Repurchases of common stock	(350)	(4)		—		(191,267)		—		—		(191,271)
Net income	—	—		—		—		199,193		—		199,193
Foreign currency translation adjustments	—	—		—		—		—		24,933		24,933
Balance at March 31, 2023	25,016	$	250	$	1,281,270	$	(5,110,421)	$	3,157,877	$	(99,769)	$	(770,793)

	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, 2021	27,568	$	276	$	1,237,348	$	(3,857,855)	$	2,585,143	$	(75,854)	$	(110,942)
Share-based compensation	—	—		57,814		—		—		—		57,814
Issuance of treasury stock under employee stock plans	237	2		(52,882)		16,148		—		—		(36,732)
Repurchases of common stock	(1,823)	(18)		—		(757,535)		—		—		(757,553)
Net income	—	—		—		—		189,342		—		189,342
Foreign currency translation adjustments	—	—		—		—		—		(5,345)		(5,345)
Balance at March 31, 2022	25,982	$	260	$	1,242,280	$	(4,599,242)	$	2,774,485	$	(81,199)	$	(663,416)

See accompanying notes.

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FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended March 31,
	2023		2022
	(In thousands)
Cash flows from operating activities:
Net income	$	199,193	$	189,342
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	8,294		10,656
Share-based compensation	56,755		57,814
Deferred income taxes	(18,360)		3,004
Net (gain) loss on marketable securities	(1,681)		3,209
Non-cash operating lease costs	7,613		8,166
Provision for doubtful accounts	738		650
Gain on product line asset sale	(1,941)		—
Net loss on sales and abandonment of property and equipment	24		166
Changes in operating assets and liabilities:
Accounts receivable	(13,789)		33,098
Prepaid expenses and other assets	(17,078)		5,179
Accounts payable	(2,810)		(4,105)
Accrued compensation and employee benefits	(32,318)		(41,745)
Other liabilities	(2,425)		(14,159)
Deferred revenue	29		(3,791)
Net cash provided by operating activities	182,244		247,484
Cash flows from investing activities:
Purchases of property and equipment	(2,377)		(3,293)
Proceeds from sales of marketable securities	4,631		3,354
Purchases of marketable securities	(8,015)		(5,982)
Proceeds from product line asset sales, net of cash transferred	(6,126)		2,257


Net cash used in investing activities	(11,887)		(3,664)
Cash flows from financing activities:
Proceeds from revolving line of credit and term loan	228,000		800,000
Payments on revolving line of credit and term loan	(158,500)		(806,750)
Proceeds from issuance of senior notes	—		550,000

Payments on debt issuance costs	—		(8,819)

Proceeds from issuance of treasury stock under employee stock plans	15,217		11,117
Taxes paid related to net share settlement of equity awards	(73,672)		(47,849)
Repurchases of common stock	(184,290)		(760,861)
Net cash used in financing activities	(173,245)		(263,162)
Effect of exchange rate changes on cash	7,457		(1,793)
Increase (decrease) in cash and cash equivalents	4,569		(21,135)
Cash and cash equivalents, beginning of period	133,202		195,354
Cash and cash equivalents, end of period	$	137,771	$	174,219
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net of refunds of $548 and $1,003 during the six-month periods ended March 31, 2023 and 2022, respectively	$	72,800	$	30,788
Cash paid for interest	$	46,801	$	21,368
Supplemental disclosures of non-cash investing and financing activities:
Purchase of property and equipment included in accounts payable	$	9	$	139
Unsettled repurchases of common stock	$	6,981	$	4,735

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 lenders, consumer reporting agencies, public agencies, and organizations in other industries. We also serve consumers through online services that enable people to access and understand their FICO® Scores — the standard measure 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, 2022. 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.

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.

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.

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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 March 31, 2023 and September 30, 2022.

•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 March 31, 2023 and September 30, 2022.

•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 March 31, 2023 and September 30, 2022.

The following tables represent financial assets that we measured at fair value on a recurring basis at March 31, 2023 and September 30, 2022:


March 31, 2023	Active Markets for Identical Instruments (Level 1)		Fair Value as of March 31, 2023
	(In thousands)
Assets:
Cash equivalents (1)	$	23,501	$	23,501
Marketable securities (2)	29,580		29,580
Total	$	53,081	$	53,081

September 30, 2022	Active Markets for Identical Instruments (Level 1)		Fair Value as of September 30, 2022
	(In thousands)
Assets:
Cash equivalents (1)	$	19,314	$	19,314
Marketable securities (2)	24,515		24,515
Total	$	43,829	$	43,829

(1)Included in cash and cash equivalents on our condensed consolidated balance sheets at March 31, 2023 and September 30, 2022. Not included in these tables are cash deposits of $114.3 million and $113.9 million at March 31, 2023 and September 30, 2022, 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 March 31, 2023 and September 30, 2022.

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 six-month periods ended March 31, 2023 and 2022.

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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.

The following tables summarize our outstanding foreign currency forward contracts, by currency, at March 31, 2023 and September 30, 2022:


	March 31, 2023
	Contract Amount				Fair Value
	Foreign Currency		USD		USD
	(In thousands)
Sell foreign currency:

Euro (EUR)	EUR	11,500	$	12,519	$	—
Buy foreign currency:
British pound (GBP)	GBP	8,245	$	10,200	$	—
Singapore dollar (SGD)	SGD	6,247	$	4,700	$	—


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

Euro (EUR)	EUR	13,500	$	13,158	$	—
Buy foreign currency:
British pound (GBP)	GBP	11,848	$	13,100	$	—
Singapore dollar (SGD)	SGD	6,169	$	4,300	$	—

The foreign currency forward contracts were entered into on March 31, 2023 and September 30, 2022; 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 March 31,				Six Months Ended March 31,
	2023		2022		2023		2022
	(In thousands)
Gains (losses) on foreign currency forward contracts	$	309	$	(576)	$	1,613	$	(14)

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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 March 31,				Six Months Ended March 31,
	2023		2022		2023		2022
	(In thousands)
Completed technology	$	125	$	125	$	250	$	250
Customer contracts and relationships	150		418		300		837


Total	$	275	$	543	$	550	$	1,087

Estimated future intangible asset amortization expense associated with intangible assets existing at March 31, 2023 was as follows:


Year Ending September 30,	(In thousands)
2023 (excluding the six months ended March 31, 2023)	$	550
2024	917




Total	$	1,467

The following table summarizes changes to goodwill during the six months ended March 31, 2023, 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, 2022	$	146,648	$	614,419	$	761,067


Foreign currency translation adjustment	—		13,263		13,263

Balance at March 31, 2023	$	146,648	$	627,682	$	774,330

5. Composition of Certain Financial Statement Captions

The following table presents the composition of property and equipment, net and other accrued liabilities at March 31, 2023 and September 30, 2022:


	March 31, 2023		September 30, 2022
	(In thousands)
Property and equipment, net:
Property and equipment	$	113,465	$	112,411
Less: accumulated depreciation and amortization	(99,801)		(94,831)
Total	$	13,664	$	17,580

Other accrued liabilities:
Interest payable	$	21,261	$	21,314
Current operating leases	17,972		19,369
Other	28,919		25,565
Total	$	68,152	$	66,248

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6. Revolving Line of Credit and Term Loan

We have a $600 million unsecured revolving line of credit and a $300 million unsecured term loan with a syndicate of banks that mature on August 19, 2026. Borrowings under the revolving line of credit and term loan 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. The term loan requires principal payments in consecutive quarterly installments of $3.75 million on the last business day of each quarter. In November 2022, we amended our credit agreement to replace the LIBOR reference rate with the Secured Overnight Financing Rate (“SOFR”) reference rate. Interest rates on amounts borrowed under the revolving line of credit and term loan are based on (i) an adjusted base rate, which is the greatest of (a) the prime rate, (b) the Federal Funds rate plus 0.5%, and (c) one-month adjusted term SOFR rate plus 1%, plus, in each case, an applicable margin, or (ii) an adjusted term SOFR rate plus an applicable margin. The applicable margin for base rate borrowings and for SOFR borrowings is determined based on our consolidated leverage ratio. The applicable margin for base rate borrowings ranges from 0% to 0.75% per annum and for SOFR borrowings ranges from 1% to 1.75% per annum. In addition, we must pay certain credit facility fees. The revolving line of credit and term loan contain certain restrictive covenants including a maximum consolidated leverage ratio of 3.5 to 1.0, subject to a step up to 4.0 to 1.0 following certain permitted acquisitions and subject to certain conditions, and a minimum interest coverage ratio of 3.0 to 1.0. The credit agreement also contains other covenants typical of unsecured credit facilities.

As of March 31, 2023, we had $357.0 million in borrowings outstanding under the revolving line of credit at a weighted-average interest rate of 6.343%, and $281.3 million in outstanding balance of the term loan at an interest rate of 6.529%, of which $531.3 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 agreement as of March 31, 2023.

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 and we were in compliance as of March 31, 2023.

The following table presents the face values and fair values for the Senior Notes at March 31, 2023 and September 30, 2022:


	March 31, 2023				September 30, 2022
	Face Value (*)		Fair Value		Face Value (*)		Fair Value
	(In thousands)
The 2018 Senior Notes	$	400,000	$	393,000	$	400,000	$	381,500
The 2019 Senior Notes and the 2021 Senior Notes	900,000		823,500		900,000		767,250
Total	$	1,300,000	$	1,216,500	$	1,300,000	$	1,148,750

(*) The carrying value of the Senior Notes was the face value reduced by the net debt issuance costs of $12.9 million and $14.3 million at March 31, 2023 and September 30, 2022, respectively.

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8. Revenue from Contracts with Customers

Disaggregation of Revenue

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


	Quarter Ended March 31, 2023
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	197,039	$	121,264	$	318,303	84	%
Europe, Middle East and Africa	1,154		40,199		41,353		11	%
Asia Pacific	314		20,296		20,610		5	%
Total	$	198,507	$	181,759	$	380,266	100	%


	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	%


	Six Months Ended March 31, 2023
	Scores		Software		Total		Percentage
	(Dollars in thousands)
Americas	$	370,336	$	239,094	$	609,430	84	%
Europe, Middle East and Africa	2,502		71,191		73,693		10	%
Asia Pacific	3,657		38,356		42,013		6	%
Total	$	376,495	$	348,641	$	725,136	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	%

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
	2023		2022		2023		2022		2023		2022		2023		2022
	(Dollars in thousands)
On-premises software	$	73,473	$	77,959	48	%	52	%	$	138,395	$	135,254	46	%	49	%
SaaS software	81,111		71,129		52	%	48	%	160,749		140,172		54	%	51	%
Total on-premises and SaaS software	$	154,584	$	149,088	100	%	100	%	$	299,144	$	275,426	100	%	100	%

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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
	2023		2022	2023	2022	2023	2022	2023	2022
	(Dollars in thousands)
Platform software (*)	$	38,682	$