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Table of Contents
As filed with the Securities and Exchange Commission on August 4, 2022
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: 1-12997
mms-20220630_g1.jpg

Maximus, Inc.
(Exact name of registrant as specified in its charter)
Virginia54-1000588
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1600 Tysons Boulevard, McLean, Virginia
22102
(Address of principal executive offices)
(Zip Code)
(703) 251-8500
(Registrant's telephone number, including the area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, no par valueMMSNew 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
There were 60,550,580 shares of the registrant's Common Stock outstanding as of August 1, 2022.


Table of Contents
Table of Contents to Third Quarter 2022 Form 10-Q
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Unless otherwise specified, references in this Quarterly Report on Form 10-Q to "our," "we," "us," "Maximus," the "Company," and "our business" refer to Maximus, Inc. and its subsidiaries.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Included in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "opportunity," "could," "potential," "believe," "project," "estimate," "expect," "forecast," "strategy," "future," "likely," "may," "should," "will," and similar references to future periods.
Forward-looking statements that are not historical facts, including statements about our confidence, strategies and initiatives, and our expectations about revenues, results of operations, profitability, liquidity, market demand, the impact of the coronavirus ("COVID-19") global pandemic and related policy implications, and our recent acquisitions are forward-looking statements that are subject to risks and uncertainties. These risks could cause our actual results to differ materially from those indicated by such forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
a failure to meet performance requirements in our contracts, which might lead to contract termination and actual or liquidated damages;
our failure to successfully bid for and accurately price contracts to generate our desired profit;
the effects of future legislative or government budgetary and spending changes;
the impact of the Biden Administration on federal procurement, federal funding to states' safety-net programs, and the overall decision-making process related to our industry, including our business and customers;
our ability to manage our growth, including acquired businesses;
difficulties in integrating or achieving projected revenues, earnings, and other benefits associated with acquired businesses;
the outcome of reviews or audits, which might result in financial penalties and impair our ability to respond to invitations for new work;
our ability to manage capital investments and startup costs incurred before receiving related contract payments;
our ability to manage our debt;
the extent and impact of the continuation of the global pandemic and the actions taken or to be taken by us, our customers, and the governments or jurisdictions in which we operate in response to COVID-19, including the U.S. federal government's ongoing Public Health Emergency declaration;
our ability to maintain technology systems and otherwise protect confidential or protected information;
our ability to attract and retain executive officers, senior managers, and other qualified personnel to execute our business;
the ability of government customers to terminate contracts on short notice, with or without cause;
our ability to maintain relationships with key government entities from whom a substantial portion of our revenue is derived;
a failure to comply with laws governing our business, which might result in the Company being subject to fines, penalties, suspension, debarment, and other sanctions;
the costs and outcome of litigation;
the effects of changes in laws and regulations governing our business, including tax laws, and applicable interpretations and guidance thereunder, or changes in accounting policies, rules, methodologies, and practices, and our ability to estimate the impact of such changes;
matters related to business we disposed of or divested; and
other factors set forth in Item 1A, "Risk Factors" of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on November 18, 2021.
Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.
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PART I - Financial Information
Item 1. Financial Statements
Maximus, Inc.
Consolidated Statements of Operations
(Unaudited)
For the Three Months EndedFor the Nine Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands, except per share amounts)
Revenue$1,125,785 $1,243,520 $3,453,987 $3,148,354 
Cost of revenue915,564 951,664 2,787,160 2,419,785 
Gross profit210,221 291,856 666,827 728,569 
Selling, general, and administrative expenses132,974 140,129 387,502 364,498 
Amortization of intangible assets22,690 12,132 67,951 23,718 
Operating income54,557 139,595 211,374 340,353 
Interest expense(10,791)(3,087)(29,867)(4,049)
Other expense, net(2,497)(8,289)(2,093)(9,584)
Income before income taxes41,269 128,219 179,414 326,720 
Provision for income taxes9,934 33,724 44,653 87,534 
Net income$31,335 $94,495 $134,761 $239,186 
Earnings per share:
Basic$0.51 $1.52 $2.17 $3.86 
Diluted$0.51 $1.51 $2.17 $3.84 
Weighted average shares outstanding:
Basic61,607 62,064 62,038 62,028 
Diluted61,756 62,453 62,190 62,300 
Dividends declared per share$0.28 $0.28 $0.84 $0.84 
See accompanying notes to unaudited consolidated financial statements.
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Maximus, Inc.
Consolidated Statements of Comprehensive Income
(Unaudited)
For the Three Months EndedFor the Nine Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands)
Net income$31,335 $94,495 $134,761 $239,186 
Other comprehensive income, net of tax:
Foreign currency translation adjustments(8,935)(24)(8,499)7,669 
Net gains/(losses) on cash flow hedge, net of tax effect of $1,085, $(379), $5,857 and $(379), respectively
3,042 (1,062)16,416 (1,062)
Other comprehensive income(5,893)(1,086)7,917 6,607 
Comprehensive income$25,442 $93,409 $142,678 $245,793 
See accompanying notes to unaudited consolidated financial statements.
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Maximus, Inc.
Consolidated Balance Sheets
June 30, 2022September 30, 2021
(unaudited)
(in thousands)
Assets:
Cash and cash equivalents$93,748 $135,061 
Accounts receivable, net868,010 834,819 
Income taxes receivable15,608 5,413 
Prepaid expenses and other current assets94,218 104,201 
Total current assets1,071,584 1,079,494 
Property and equipment, net55,908 62,627 
Capitalized software, net48,478 42,868 
Operating lease right-of-use assets143,545 179,349 
Goodwill1,783,870 1,774,406 
Intangible assets, net829,179 879,168 
Deferred contract costs, net43,723 36,486 
Deferred compensation plan assets38,729 46,738 
Deferred income taxes4,776 990 
Other assets38,131 16,839 
Total assets$4,057,923 $4,118,965 
Liabilities and Shareholders' Equity:
Liabilities:
Accounts payable and accrued liabilities$259,016 $305,565 
Accrued compensation and benefits182,434 186,809 
Deferred revenue, current portion106,797 98,588 
Income taxes payable4,071 6,782 
Long-term debt, current portion59,698 80,555 
Operating lease liabilities, current portion67,680 76,077 
Other current liabilities50,510 35,057 
Total current liabilities730,206 789,433 
Deferred revenue, non-current portion23,518 35,932 
Deferred income taxes196,691 194,638 
Long-term debt, non-current portion1,423,276 1,429,137 
Deferred compensation plan liabilities, non-current portion39,006 47,405 
Operating lease liabilities, non-current portion93,035 121,771 
Other liabilities30,629 20,320 
Total liabilities2,536,361 2,638,636 
Commitments and contingencies (Note 13)
Shareholders' equity:
Common stock, no par value; 100,000 shares authorized; 60,904 and 61,954 shares issued and outstanding as of June 30, 2022 and September 30, 2021, respectively (shares in thousands)
557,656 532,411 
Accumulated other comprehensive loss(31,991)(39,908)
Retained earnings995,897 987,826 
Total shareholders' equity1,521,562 1,480,329 
Total liabilities and shareholders' equity$4,057,923 $4,118,965 
See accompanying notes to unaudited consolidated financial statements.
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Maximus, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended
June 30, 2022June 30, 2021
(in thousands)
Cash flows from operating activities:
Net income$134,761 $239,186 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization of property, equipment and capitalized software29,875 33,664 
Amortization of intangible assets67,951 23,718 
Amortization of debt issuance costs and debt discount1,946  
Costs related to debt financing 8,509 
Deferred income taxes(7,179)3,632 
Stock compensation expense22,080 20,823 
Change in assets and liabilities, net of effects of business combinations:
Accounts receivable(39,997)(254,304)
Prepaid expenses and other current assets9,454 7,542 
Deferred contract costs(7,702)(15,773)
Accounts payable and accrued liabilities(42,577)116,873 
Accrued compensation and benefits13,846 34,387 
Deferred revenue342 23,624 
Income taxes(12,822)15,165 
Operating lease right-of-use assets and liabilities(1,330)1,077 
Other assets and liabilities1,128 (11,464)
Net cash provided by operating activities169,776 246,659 
Cash flows from investing activities:
Purchases of property and equipment and capitalized software(35,936)(32,133)
Acquisitions of businesses, net of cash acquired(14,144)(1,779,473)
Other2,000  
Net cash used in investing activities(48,080)(1,811,606)
Cash flows from financing activities:
Cash dividends paid to Maximus shareholders(51,762)(51,625)
Purchases of Maximus common stock(73,864)(3,363)
Tax withholding related to RSU vesting(9,673)(9,818)
Payments for debt financing (22,759)
Proceeds from borrowings415,000 2,285,000 
Principal payments for debt(442,973)(607,880)
Other (2,763)
Net cash (used in)/provided by financing activities(163,272)1,586,792 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(4,369)2,830 
Net change in cash, cash equivalents, and restricted cash(45,945)24,675 
Cash, cash equivalents and restricted cash, beginning of period156,570 88,561 
Cash, cash equivalents and restricted cash, end of period$110,625 $113,236 
See accompanying notes to unaudited consolidated financial statements.
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Maximus, Inc.
Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
Common StockAccumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Equity
SharesAmount
(in thousands)
Balance at September 30, 202161,954$532,411 $(39,908)$987,826 $1,480,329 
Net income— — 53,330 53,330 
Foreign currency translation— 459 — 459 
Cash flow hedge, net of tax— 2,685 — 2,685 
Cash dividends— — (17,347)(17,347)
Dividends on RSUs272 — (272) 
Purchases of Maximus common stock(18)— — (1,379)(1,379)
Stock compensation expense8,248 — — 8,248 
Tax withholding adjustment related to RSU vesting2,101 — — 2,101 
Balance as of December 31, 202161,936$543,032 $(36,764)$1,022,158 $1,528,426 
Net income— — 50,096 50,096 
Foreign currency translation— (23)— (23)
Cash flow hedge, net of tax— 10,689 — 10,689 
Cash dividends— — (17,312)(17,312)
Dividends on RSUs392 — (392) 
Purchases of Maximus common stock(330)— — (24,464)(24,464)
Stock compensation expense6,804 — — 6,804 
RSUs vested4— — — — 
Balance as of March 31, 202261,610$550,228 $(26,098)$1,030,086 $1,554,216 
Net income— — 31,335 31,335 
Foreign currency translation— (8,935)— (8,935)
Cash flow hedge, net of tax— 3,042 — 3,042 
Cash dividends— — (17,103)(17,103)
Dividends on RSUs400 — (400) 
Purchases of Maximus common stock(706)— — (48,021)(48,021)
Stock compensation expense7,028 — — 7,028 
Balance as of June 30, 202260,904$557,656 $(31,991)$995,897 $1,521,562 










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Maximus, Inc.
Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
Common StockAccumulated
Other
Comprehensive
Loss
Retained
Earnings
Total
Equity
SharesAmount
(in thousands)
Balance at September 30, 202061,504$513,959 $(42,638)$770,498 $1,241,819 
Net income— — 64,077 64,077 
Foreign currency translation— 6,923 — 6,923 
Cash dividends— — (17,207)(17,207)
Dividends on RSUs336 — (336) 
Purchases of Maximus common stock(52)— — (3,363)(3,363)
Stock compensation expense6,062 — — 6,062 
Balance as of December 31, 202061,452$520,357 $(35,715)$813,669 $1,298,311 
Net income— — 80,614 80,614 
Foreign currency translation— 770 — 770 
Cash dividends— — (17,207)(17,207)
Dividends on RSUs431 — (431) 
Stock compensation expense7,417 — — 7,417 
RSUs vested20— — — — 
Balance as of March 31, 202161,472$528,205 $(34,945)$876,645 $1,369,905 
Net income— — 94,495 94,495 
Foreign currency translation— (24)— (24)
Cash flow hedge, net of income tax— (1,062)— (1,062)
Cash dividends— — (17,211)(17,211)
Dividends on RSUs441 — (441) 
Stock compensation expense7,344 — — 7,344 
Balance as of June 30, 202161,472$535,990 $(36,031)$953,488 $1,453,447 
See accompanying notes to unaudited consolidated financial statements.
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Maximus, Inc.
Notes to the Unaudited Consolidated Financial Statements
1. ORGANIZATION
Maximus, a Virginia corporation established in 1975, is a leading provider of government services worldwide. Under our mission of moving people forward, we offer industry-leading expertise, including citizen engagement, eligibility and program integrity and case management to enable citizens around the globe to successfully engage with their governments at all levels. We assist governments to support families, strengthen workforces and streamline their services. We are a proud partner to government agencies in the United States, Australia, Canada, Italy, Saudi Arabia, Singapore, South Korea, Sweden, and the United Kingdom.

2. SIGNIFICANT ACCOUNTING POLICIES
(a)Basis of Presentation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries over which the Company has a controlling financial interest, and have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. All intercompany balances and transactions have been eliminated in consolidation.
(b)Basis of Presentation for Interim Periods
Certain information and footnote disclosures normally included for the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted for the interim periods presented. We believe that the unaudited interim financial statements include all adjustments (which are normal and recurring in nature) necessary to present fairly our financial position and the results of operations and cash flows for the periods presented.
The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for the year or future periods. The financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended September 30, 2021 included in our Annual Report on Form 10-K for the fiscal year then ended (the "2021 10-K"). We have continued to follow the accounting policies set forth in those financial statements.
(c)Estimates
The preparation of these financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenue and expenses. At each reporting period end, we make estimates, including those related to revenue recognition and cost estimation on certain contracts, the realizability of goodwill, and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation.
We base our estimates on historical experience and expectations of the future that we believe to be reasonable. The continued uncertainty related to the economic and political effects of the COVID-19 global pandemic reduce our ability to use past results to estimate future performance. Accordingly, our estimates may be subject to greater volatility than has been the case in the past.
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3. BUSINESS SEGMENTS
We conduct our operations through three business segments: U.S. Services, U.S. Federal Services, and Outside the U.S.
U.S. Services
Our U.S. Services Segment provides a variety of business process services ("BPS") such as program administration, appeals and assessments, and related consulting work for U.S. state and local government programs. These services support a variety of programs, including the Affordable Care Act ("ACA"), Medicaid, the Children's Health Insurance Program ("CHIP"), Temporary Assistance to Needy Families ("TANF"), and child support programs. Addressing societal macro trends such as aging populations and rising costs, the segment continues to execute on its clinical evolution strategy by expanding its clinical offerings. This includes assessments to determine whether personal care services are medically necessary and public health offerings such as contact tracing, disease investigation, and vaccine distribution support services as part of the governments' COVID-19 response efforts.
U.S. Federal Services
From technology solutions to program administration and operations, our U.S. Federal Services Segment delivers end-to-end solutions that help various U.S. federal government agencies better deliver on their mission. This also includes appeals and assessments services, system and application development, IT modernization, and maintenance services. The segment also contains certain state-based assessments and appeals work that is part of the segment's heritage within the Medicare Appeals portfolio which continues to be managed within this segment. Benefiting from the Maximus Federal Consulting (formerly Attain Federal) platform, the segment executes on its digital strategy to deliver technology solutions that advance agency missions, including the challenge to modernize, provide better customer experience, and drive process efficiencies. The segment continues to expand its clinical solutions with the acquisition of VES Group, Inc., which manages the clinical evaluation process for U.S. veterans and service members on behalf of the U.S. Department of Veterans Affairs. The segment further supports clinical offerings in public health with new work supporting the U.S. federal government's COVID-19 response efforts. This included expanded work with the Centers for Disease Control and Prevention ("CDC") for their helpline and increased support for the IRS Wage and Investment Division's response efforts to general inquiries regarding the Coronavirus Aid Relief & Economic Security ("CARES") Act and Economic Impact Payment Service Plan.
Outside the U.S.
Our Outside the U.S. Segment provides BPS for international governments and commercial clients, transforming the lives of people around the world. Helping people find employment, access vital support, and remain healthy, these services include health and disability assessments, program administration for employment services, wellbeing solutions, and other job seeker related services. We support programs and deliver services in the U.K., including the Health Assessment Advisory Service ("HAAS") and Restart; Australia, including Workforce Australia and the Disability Employment Service; Canada, including Health Insurance British Columbia and the Employment Program of British Columbia; in addition to Italy, Saudi Arabia, Singapore, South Korea, and Sweden, where we predominantly provide employment support and job seeker services.
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Table 3: Results of Operation by Business Segment
For the Three Months EndedFor the Nine Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Amount% (1)Amount% (1)Amount% (1)Amount% (1)
(dollars in thousands)
Revenue:
U.S. Services$399,320 $436,338 $1,183,814 $1,269,487 
U.S. Federal Services525,519 617,601 1,680,678 1,352,982 
Outside the U.S.200,946 189,581 589,495 525,885 
Revenue$1,125,785 $1,243,520 $3,453,987 $3,148,354 
Gross profit:
U.S. Services$74,135 18.6 %$104,814 24.0 %$248,805 21.0 %$323,256 25.5 %
U.S. Federal Services124,203 23.6 %155,776 25.2 %365,932 21.8 %312,405 23.1 %
Outside the U.S.11,883 5.9 %31,266 16.5 %52,090 8.8 %92,908 17.7 %
Gross profit$210,221 18.7 %$291,856 23.5 %$666,827 19.3 %$728,569 23.1 %
Selling, general, and administrative expenses:
U.S. Services$42,351 10.6 %$42,606 9.8 %$115,726 9.8 %$116,655 9.2 %
U.S. Federal Services69,466 13.2 %69,647 11.3 %203,340 12.1 %172,877 12.8 %
Outside the U.S.23,101 11.5 %22,973 12.1 %68,452 11.6 %65,018 12.4 %
Other (2) (1,944)NM4,903 NM(16)NM9,948 NM
Selling, general, and administrative expenses$132,974 11.8 %$140,129 11.3 %$387,502 11.2 %$364,498 11.6 %
Operating income/(loss):
U.S. Services$31,784 8.0 %$62,208 14.3 %$133,079 11.2 %$206,601 16.3 %
U.S. Federal Services54,737 10.4 %86,129 13.9 %162,592 9.7 %139,528 10.3 %
Outside the U.S.(11,218)(5.6) %8,293 4.4 %(16,362)(2.8) %27,890 5.3 %
Amortization of intangible assets(22,690)NM(12,132)NM(67,951)NM(23,718)NM
Other (2)1,944 NM(4,903)NM16 NM(9,948)NM
Operating income$54,557 4.8 %$139,595 11.2 %$211,374 6.1 %$340,353 10.8 %
(1)Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM."
(2)Other selling, general, and administrative expenses includes costs that are not allocated to a particular segment. This includes legal expenses and settlements and expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed. Our results for the three and nine months ended June 30, 2022 included a $2.3 million credit related to changes in acquisition related contingent consideration. See "Note 6. Business Combinations" for more information.
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4. REVENUE RECOGNITION
The Company recognizes revenue as, or when, we satisfy performance obligations under a contract. The majority of our contracts have performance obligations which are satisfied over time. In most cases, we view our performance obligations as promises to transfer a series of distinct services to our customers that are substantially the same and which have the same pattern of service.
Disaggregation of Revenue
In addition to our segment reporting, we disaggregate our revenues by contract type, customer type, and geography. Our operating segments represent the manner in which our Chief Executive Officer reviews our financial results, which is further discussed in "Note 3. Business Segments."
Table 4.1: Revenue by Contract Type
For the Three Months EndedFor the Nine Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Amount%Amount%Amount%Amount%
(dollars in thousands)
Performance-based$520,202 46.2 %$389,800 31.3 %$1,527,368 44.2 %$1,033,509 32.8 %
Cost-plus282,578 25.1 %282,808 22.7 %945,482 27.4 %953,373 30.3 %
Fixed price160,219 14.2 %146,175 11.8 %470,591 13.6 %413,296 13.1 %
Time and materials162,786 14.5 %424,737 34.2 %510,546 14.8 %748,176 23.8 %
Total revenue$1,125,785 $1,243,520 $3,453,987 $3,148,354 
Table 4.2: Revenue by Customer Type
For the Three Months EndedFor the Nine Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Amount%Amount%Amount%Amount%
(dollars in thousands)
U.S. state government agencies$401,042 35.7 %$431,987 34.7 %$1,183,876 34.3 %$1,265,798 40.2 %
U.S. federal government agencies507,047 45.0 %594,771 47.8 %1,624,848 47.0 %1,288,213 40.9 %
International government agencies191,753 17.0 %180,049 14.5 %557,928 16.2 %499,091 15.9 %
Other, including local municipalities and commercial customers25,943 2.3 %36,713 3.0 %87,335 2.5 %95,252 3.0 %
Total revenue$1,125,785 $1,243,520 $3,453,987 $3,148,354 
Table 4.3: Revenue by Geography
For the Three Months EndedFor the Nine Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Amount%Amount%Amount%Amount%
(dollars in thousands)
United States$924,839 82.2 %$1,053,940 84.8 %$2,864,492 83.0 %$2,622,469 83.3 %
United Kingdom109,776 9.7 %74,109 6.0 %303,481 8.8 %211,777 6.7 %
Australia43,594 3.9 %65,283 5.2 %143,078 4.1 %192,161 6.1 %
Rest of world47,576 4.2 %50,188 4.0 %142,936 4.1 %121,947 3.9 %
Total revenue$1,125,785 $1,243,520 $3,453,987 $3,148,354 

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Contract balances
Differences in timing between revenue recognition and cash collection result in contract assets and contract liabilities. We classify these assets as accounts receivable — billed and billable and unbilled receivables; the liabilities are classified as deferred revenue.
In many contracts, we bill our customers on a monthly basis shortly after the month end for work performed in that month. These balances are considered collectible and are included within accounts receivable — billed and billable.
Exceptions to this pattern will arise for various reasons, including those listed below.
Under cost-plus contracts, we are typically required to estimate a contract's share of our general and administrative expenses. This share is based upon estimates of total costs which may vary over time. We typically invoice our customers at an agreed provisional billing rate which may differ from actual rates incurred. If our actual rates are higher than the provisional billing rates, an asset is recorded for this variance; if the provisional billing rates are higher than our actual rates, we record a liability.
Certain contracts include retainage balances, whereby revenue is earned but some portion of cash payments are held back by the customer for a period of time, typically to allow the customer to confirm the objective criteria laid out by the contract have been met. This balance is classified as accounts receivable — unbilled until restrictions on billing are lifted. As of June 30, 2022, and September 30, 2021, $12.2 million and $10.4 million, respectively, of our unbilled receivables related to amounts pursuant to contractual retainage provisions.
In certain contracts, we may receive funds from our customers prior to performing operations. These funds are typically referred to as "set-up costs" and reflect the need for us to make investments in infrastructure prior to providing a service. This investment in infrastructure is not a performance obligation which is distinct from the service that is subsequently provided and, as a result, revenue is not recognized based upon the establishment of this infrastructure, but rather over the course of the contractual relationship. The funds are initially recorded as deferred revenue and recognized over the term of the contract. Other contracts may not include set-up fees but will provide higher fees in earlier periods of the contract. The premium on these fees is deferred.
Some of our contracts, notably our employment services contracts in the Outside the U.S. Segment, include payments for desired outcomes, such as job placement and job retention, and these outcome payments occur over several months. We are required to estimate these outcome fees ahead of their realization and recognize this estimated fee over the period of delivery.
During the three and nine months ended June 30, 2022, we recognized revenue of $23.7 million and $85.5 million, respectively, that was included in our deferred revenue balances as of September 30, 2021. During the three and nine months ended June 30, 2021, we recognized revenue of $7.5 million and $36.7 million, respectively, that was included in our deferred revenue balances at September 30, 2020.
Contract estimates
We are required to use estimates in recognizing revenue from some of our contracts. As discussed in "Note 2. Significant Accounting Policies," the calculation of these estimates has been complicated by the COVID-19 pandemic, which has reduced our ability to use past results to estimate future performance.
Some of our performance-based contract revenue is recognized based upon future outcomes defined in each contract. This is the case in many of our employment services contracts in the Outside the U.S. Segment, where we are paid as individuals attain employment goals, which may take many months to achieve. We recognize revenue on these contracts over the period of performance. Our estimates vary from contract to contract but may include estimates of the number of participants, the length of the contract, and the participants reaching employment milestones. We are required to estimate these outcome fees ahead of their collection and recognize this estimated fee over the period of delivery. Changes to our estimates are recognized on a cumulative catch-up basis.
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Table 4.4: Effect of Changes in Contract Estimates
For the Three Months EndedFor the Nine Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands, except per share data)
Benefit to/(reduction of) revenue recognized due to changes in contract estimates$(959)$1,800 $(5,174)$17,800 
Benefit to/(reduction of) diluted earnings per share recognized due to changes in contract estimates$(0.01)$0.03 $(0.06)$0.20 
Remaining performance obligations
As of June 30, 2022, we had approximately $550 million of remaining performance obligations. We anticipate that we will recognize revenue on approximately 45% of this balance within the next 12 months. This balance excludes contracts with an original duration of 12 months or less, including contracts with a penalty-free termination for convenience clause, and any variable consideration which is allocated entirely to future performance obligations, including variable transaction fees or fees tied directly to costs incurred.

5. EARNINGS PER SHARE
Table 5: Weighted Average Number of Shares - Earnings Per Share
For the Three Months EndedFor the Nine Months Ended
June 30, 2022June 30, 2021June 30, 2022June 30, 2021
(in thousands)
Basic weighted average shares outstanding