RewordedRisk Factors
The 10-K against last year's
194 changes: 16 added, 5 removed, 163 reworded, 10 quiet changes
10-K 0000814547-26-000042 (2026-11-06) vs 10-K 0000814547-25-000030 (2025-11-07) Not compared: Legal Proceedings.
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The paragraph that changed most in each section
Marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 309 words changed in this paragraph; it is 40% similar to last year's version.
A significant portion of our revenues in our Scores segment is attributable to the U.S. mortgage market, which includes, market. Historically, for mortgages eligible for purchase by The Federal National Mortgage Association (“Fannie Mae”) and The Federal Home Loan Mortgage Corporation (“Freddie Mac”), a requirement by those enterprises (“Enterprises”) required that U.S. lenders provide FICO® Scores for each mortgage delivered to them. However, their the continued use of the FICO Score for those mortgages is subject to ongoing validation and approval by those enterprises the Enterprises and the Federal Housing Finance Agency (“FHFA”). If other (“FHFA”), and is subject to competing credit score models are approved for use with mortgages delivered to Fannie Mae and Freddie Mac, or the FICO Score is not approved for continued use with those mortgages, it could have a material adverse effect on our revenues, results of operations and stock price. Other changes implemented by FHFA, Fannie Mae or Freddie Mac could also affect the demand for FICO Scores and thus could have similar adverse effects on our business, including, for models. For example, the change announced following an announcement by the FHFA Director in July 2025 permitting mortgage originators that the Enterprises would be adopting a so-called “lender choice” regime allowing lenders to choose the between a FICO Score or VantageScore, a competing credit score they submit with mortgages delivered model, the FHFA announced in April 2026 that the Enterprises would accept VantageScore from approved lenders and further announced in September 2026 that the Enterprises would accept VantageScore from all lenders. Also, in April 2026, the U.S. Department of Housing and Urban Development (“HUD”) announced that, beginning January 1, 2027, the Federal Housing Administration (“FHA”) would, in addition to Fannie Mae the Classic FICO® Score, permit the use of VantageScore and Freddie Mac or a potential future change permitting mortgage originators to underwrite loans using credit scores from fewer than three national consumer reporting agencies. The ability the latest version of our FICO Score, FICO® Score 10T, for FHA-insured mortgages. In the months following these announcements by the FHFA and HUD, our stock price has declined significantly, and it could continue to compete effectively decline due to these or other announcements, or due to any increased use, or perceived increased use, of VantageScore over FICO Scores in the U.S. mortgage market may be constrained by the pricing and other business practices of the consumer reporting agencies, which could have a material adverse effect on our revenues, results of operations and stock price. market.
Source: Item 1A, 10-K 0000814547-26-000042 vs Item 1A, 10-K 0000814547-25-000030
MD&A 278 words changed in this paragraph; it is 66% similar to last year's version.
Source: Item 7, 10-K 0000814547-26-000042 vs Item 7, 10-K 0000814547-25-000030
Accounting Policies 81 words changed in this paragraph; it is 51% similar to last year's version.
In December 2023, the FASB Financial Accounting Standards Board (“FASB”) issued ASU Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as disaggregated information on income tax paid. The standard is effective for We adopted ASU 2023-09 in fiscal years beginning after December 15, 2024, which means that it will be effective for our fiscal years beginning October 1, 2025. Early 2026 on a prospective basis and the adoption is permitted. We are currently evaluating the impact that the updated standard will have on our resulted in expanded disclosures within our consolidated financial statements. as presented in Note 12.
Source: Item 8, Note 1 – Nature of Business and Summary of Significant Accounting Policies, 10-K 0000814547-26-000042 vs Item 8, Note 1 – Nature of Business and Summary of Significant Accounting Policies, 10-K 0000814547-25-000030
Every change, by type
Sentences and paragraphs added, removed or reworded
Sentences and paragraphs of FICO's Risk Factors and MD&A, 10-K 2026-11-06 against 10-K 2025-11-07. Each links to the text at sec.gov.
RewordedRisk Factors
Cybersecurity breaches experienced by affecting our vendors, by our distributors, by our customers, by companies that we acquire, acquired companies, or by us may trigger governmental notice requirements and public disclosures, which may lead to widespread resulting in negative publicity, regulatory investigations or enforcement actions, statutory damages, and lawsuits filed litigation by individuals impacted by cybersecurity breaches under privacy or other parties, and cybersecurity statutes that create rights of action. other liabilities.
RewordedRisk Factors
The ability of our FICO Score to compete effectively in the U.S. mortgage market may also be constrained by delays by any of the pricing foregoing entities in adopting the latest versions of our FICO Score or in supporting our newer distribution models, including the FICO® Mortgage Direct License Program we announced in October 2025, or by the pricing, distribution, and other business practices of the consumer reporting agencies, all of which could have a material adverse effect on our revenues, results of operations operations, and stock price.
RewordedRisk Factors
RewordedRisk Factors
RewordedRisk Factors
We have experienced difficulty in the past difficulty in recruiting and retaining qualified personnel, especially particularly in these intensely competitive and technical skill areas, and we may experience future difficulty similar challenges in recruiting and retaining such personnel, at a time when we may need additional staff to support expanded research and development efforts, new customers and/or increased customer needs. the future.
RewordedRisk Factors
The loss of of, or a significant change in a in, our relationship with one of the three these consumer reporting agencies agencies, including with respect to their distribution of our products or with respect to our myFICO® offerings, the loss of or a significant change in a relationship with a major customer, the loss of customer or a significant change in a relationship with a significant third-party distributor (including payment card processors), or the loss of or delay of significant revenues from these sources, could have a material adverse effect on our revenues and results of operations.
RewordedRisk Factors
An operational failure or outage in any of these systems, or damage to or destruction of these systems, which causes disruptions in that disrupts our services, services could result in loss of customers, damage to customer relationships, reduced revenues and profits, refunds of customer charges charges, and damage to our brand and reputation and may require us to incur substantial additional expense to repair or replace damaged equipment and recover data loss caused by the interruption. reputation.
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RewordedRisk Factors
If new laws, regulations regulations, or other governmental action limit the fees that can be charged for credit scores by us, consumer reporting agencies, or end users of our FICO® Scores, or that place impose other restrictions on the sale or distribution of credit scores, our ability in the future to increase pricing for FICO Scores used in mortgage originations may be impacted and thus the revenues and profitability of the FICO Score may be adversely affected and the growth of our Scores business may be constrained. limited.
RewordedRisk Factors
RewordedRisk Factors
In addition, the volume of our Scores sales depends heavily on macroeconomic conditions, including, for example, the volume of transactions conditions in the U.S. mortgage and credit card markets, markets in which account for a significant portion of the revenues in our Scores segment. customers operate.
RewordedRisk Factors
Our competitors may be able to sell offer existing or new products competitive to ours that compete with our products at lower prices individually prices, either on a standalone basis or as part of integrated suites of several related products. product suites.
RewordedMD&A
The fiscal 2026 over 2025 over 2024 decrease increase in other income, net of $2.6 $46.3 million was primarily attributable to a decrease non-operating gain related to the sale of an equity investment in net unrealized gains on investments classified as trading securities in our supplemental retirement and savings plan, which we had a minority interest, partially offset by an increase in net foreign exchange rate losses incurred during fiscal 2026, compared to foreign exchange gains incurred during fiscal 2025, resulting from remeasurement of foreign-currency-denominated receivable receivables and cash balances held by our various reporting entities into their respective functional currencies at period-end market rates, net of the impact of offsetting foreign currency forward contracts.
RewordedMD&A
The fiscal 2026 over 2025 over 2024 increase in operating income of $191.2 $340.8 million was primarily attributable to a $273.3 $544.0 million increase in segment revenues and a $5.4 million decrease in corporate expenses, revenues, partially offset by a $70.2 $79.5 million increase in corporate expenses, a $78.5 million increase in segment operating expenses, a $10.9 million increase in restructuring charges, and a $7.2 $28.8 million increase in share-based compensation cost. cost, and a $16.4 million increase in restructuring charges.
RewordedMD&A
The fiscal 2026 over 2025 over 2024 increase in interest expense, net interest expense of $28.0 $89.7 million was primarily attributable to the $1.5 billion of 2025 Senior Notes (as defined below), partially offset by a lower higher average outstanding debt balance and a lower average interest rate on borrowings under our credit agreement during fiscal 2025. 2026.
RewordedMD&A
The $15.7 $1.7 million increase was attributable to a $13.8 $12.8 million increase in purchases of other investments and a $5.1 million increase in capitalized internal-use software costs and costs, partially offset by a $1.9 $9.4 million decrease increase in proceeds from sales, net of purchases, of marketable securities. securities and a $6.8 million decrease in purchases of property and equipment.
RewordedMD&A
The fiscal 2026 over 2025 over 2024 increase in research and development expenses of $16.4 $21.0 million was primarily attributable to a $6.9 $21.9 million increase in infrastructure and facilities costs, a $5.7 million increase in outside services costs, costs and a $3.8 $4.8 million increase in personnel and labor costs, partially offset by a $5.7 million decrease in outside services and other costs.
RewordedMD&A
Cost of revenues 14% 18% 20% 21% Research and development 8% 9% 10% 11% Selling, general and administrative 27% 26% 27% 26% Amortization of intangible assets —% —% —% Restructuring charges 1% —% —% Gain on product line asset sale —% —% 1% —% Total operating expenses 50% 54% 57% 58% Operating income 50% 46% 43% 42% Interest expense, net (9)% (7)% (6)% (6)% Other income, net 2% 1% 1% —% Income before income taxes 43% 40% 38% 36% Provision for income taxes 10% 7% 8% 8% Net income 33% 33% 30% 28%
RewordedMD&A
The $9.8 $1.9 million decrease increase in our Software segment operating income was attributable to a $34.2 $60.4 million increase in segment revenue, partially offset by a $58.5 million increase in segment operating expenses, partially offset by a $24.4 million increase in segment revenue. expenses.
RewordedMD&A
The increase in personnel and labor costs was primarily attributable to increased headcount, market base-pay adjustments, commission expense, and increased share-based compensation expense, partially offset by decreased fringe benefit costs related to our supplemental retirement costs, and savings plan. increased incentive compensation costs.
RewordedMD&A
The credit agreement contains certain restrictive covenants including a maximum consolidated leverage ratio of 4.5 to 1.0 through December 30, 2026, 4.0 to 1.0 during December 31, 2026 through December 30, 2027, and 3.5 to 1.0, 1.0 during December 31, 2027 and thereafter, subject to a step up to 4.0 to 1.0 following certain permitted acquisitions and subject to certain conditions, and contains other covenants typical of an unsecured credit facility.
RewordedMD&A
Cost of revenues consists primarily of employee salaries, incentives, incentive compensation, and benefits for personnel directly involved in delivering software products, operating SaaS infrastructure, and providing support, implementation and consulting services; third-party hosting fees related to our SaaS services; overhead, facilities and data center costs; software royalty fees; consumer reporting agency data and processing services; third-party hosting fees related to our SaaS outside services; and travel costs; and outside services. costs.
RewordedMD&A
The increase in business-to-business scores revenue was primarily attributable to both a higher unit price, price and an increase in volume of mortgage originations and a multi-year license renewal in the U.S. recognized on our insurance score product during fiscal 2025. origination scores.
RewordedMD&A
The $145.8 $293.3 million increase was attributable to a $139.1 $183.0 million increase in net income, a $4.8 million increase in non-cash items, and a $1.9 $69.8 million increase that resulted from timing of receipts and payments in our ordinary course of business. business, and a $40.5 million increase in non-cash items.