Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v3.23.1
Business Segments
 6 Months Ended
Mar. 31, 2023
Segment Reporting [Abstract]  
Business Segments BUSINESS SEGMENTS
We conduct our operations through three business segments: U.S. Federal Services, U.S. Services, and Outside the U.S.
U.S. Federal Services
Our U.S. Federal Services Segment delivers end-to-end solutions that help various U.S. federal government agencies better deliver on their mission, including program operations and management, clinical services, and technology solutions. 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 which continues to be managed within this segment. Benefiting from the 2021 acquisition of the Attain Federal business, now managed as Technology Consulting Services, 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.
U.S. Services
Our U.S. Services Segment provides a variety of business process services ("BPS"), such as program administration, 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. As part of the government's COVID-19 response efforts, the segment supported contact tracing, disease investigation, and vaccine distribution support services during the peak of the pandemic. The segment also successfully expanded into the unemployment insurance market where longer term opportunities have materialized. As part of the broader strategy to evolve clinically and address societal macro trends such as aging populations and rising costs, the segment continues to expand its offerings in public health with new work in in-person assessments.
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 the Employment Program of British Columbia; in addition to Italy, Saudi Arabia, Singapore, South Korea, and UAE where we predominantly provide employment support and job seeker services.
Table 3: Results of Operation by Business Segment
  For the Three Months Ended For the Six Months Ended
March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022
Amount % (1) Amount % (1) Amount % (1) Amount % (1)
(dollars in thousands)
Revenue:        
U.S. Federal Services $ 584,075  $ 573,288  $ 1,202,242  $ 1,155,159 
U.S. Services 449,703  398,077  889,181  784,494 
Outside the U.S. 173,074  205,961  364,675  388,549 
Revenue $ 1,206,852  $ 1,177,326  $ 2,456,098  $ 2,328,202 
Gross profit:
U.S. Federal Services $ 122,874  21.0  % $ 115,153  20.1  % $ 245,568  20.4  % $ 241,729  20.9  %
U.S. Services 86,016  19.1  % 84,971  21.3  % 169,614  19.1  % 174,670  22.3  %
Outside the U.S. 19,713  11.4  % 28,327  13.8  % 58,168  16.0  % 40,207  10.3  %
Gross profit $ 228,603  18.9  % $ 228,451  19.4  % $ 473,350  19.3  % $ 456,606  19.6  %
Selling, general, and administrative expenses:  
U.S. Federal Services $ 75,050  12.8  % $ 68,949  12.0  % $ 146,699  12.2  % $ 133,874  11.6  %
U.S. Services 43,415  9.7  % 38,273  9.6  % 89,257  10.0  % 73,375  9.4  %
Outside the U.S. 23,425  13.5  % 24,011  11.7  % 51,814  14.2  % 45,351  11.7  %
Loss on sale of businesses (2) 883  NM —  NM 883  NM —  NM
Other (3) (325) NM (926) NM 247  NM 1,928  NM
Selling, general, and administrative expenses $ 142,448  11.8  % $ 130,307  11.1  % $ 288,900  11.8  % $ 254,528  10.9  %
Operating income/(loss):  
U.S. Federal Services $ 47,824  8.2  % $ 46,204  8.1  % $ 98,869  8.2  % $ 107,855  9.3  %
U.S. Services 42,601  9.5  % 46,698  11.7  % 80,357  9.0  % 101,295  12.9  %
Outside the U.S. (3,712) (2.1) % 4,316  2.1  % 6,354  1.7  % (5,144) (1.3) %
Amortization of intangible assets (23,650) NM (22,856) NM (47,168) NM (45,261) NM
Loss on sale of businesses (2) (883) NM —  NM (883) NM —  NM
Other (3) 325  NM 926  NM (247) NM (1,928) NM
Operating income $ 62,505  5.2  % $ 75,288  6.4  % $ 137,282  5.6  % $ 156,817  6.7  %
(1)Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM."
(2)During the second quarter of fiscal year 2023, we sold a small commercial practice in the United Kingdom and our employment operations business in Sweden, both subsidiaries within our Outside the U.S. Segment, resulting in a loss. Refer to "Note 7. Divestitures" for more details.
(3)Other includes credits and costs that are not allocated to a particular segment.