Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v3.24.0.1
Business Segments
 3 Months Ended
Dec. 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 segment also includes appeals and assessments services, system and application development, Information Technology ("IT") modernization, and maintenance services. Certain state-based assessments and appeals work that is part of the segment's heritage continues to be managed within this segment. Under Technology Consulting Services ("TCS"), 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 through Veteran's Evaluation Services ("VES"), a Maximus company, which manages the clinical evaluation process for U.S. veterans and service members on behalf of the U.S. Department of Veterans Affairs ("VA").
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. Over the last three years, many programs in this segment have been operating with depressed margins resulting from the pause in Medicaid redeterminations. The depressed margins have resulted from reduced operating leverage in the segment as costs cannot scale down at the same rate to meet lower demand due to requirements to fulfill other obligations on these contracts. With the resumption of redeterminations, we expect fiscal year 2024 and beyond to reflect a recovery of operating leverage.
Outside the U.S.
Our Outside the U.S. Segment provides BPS for international governments, 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 United Kingdom, including the Health Assessment Advisory Service ("HAAS") and the recently awarded replacement contract to start in 2024, Functional Assessment Services (“FAS”), and Restart; Australia, including Workforce Australia and employment support and job seeker services worldwide.
Table 3.1: Results of Operation by Business Segment
For the Three Months Ended
December 31, 2023 December 31, 2022
Amount % (1) Amount % (1)
(dollars in thousands)
Revenue:
U.S. Federal Services $ 677,078  $ 618,167 
U.S. Services 489,845  439,478 
Outside the U.S. 160,118  191,601 
Revenue $ 1,327,041  $ 1,249,246 
Gross profit:
U.S. Federal Services $ 156,662  23.1  % $ 122,694  19.8  %
U.S. Services 118,363  24.2  % 83,598  19.0  %
Outside the U.S. 25,029  15.6  % 38,455  20.1  %
Gross profit $ 300,054  22.6  % $ 244,747  19.6  %
Selling, general, and administrative expenses:
U.S. Federal Services $ 87,855  13.0  % $ 71,649  11.6  %
U.S. Services 52,300  10.7  % 45,842  10.4  %
Outside the U.S. 25,141  15.7  % 28,389  14.8  %
Divestiture-related charges (2) 1,018  NM —  NM
Other (3) 2,881  NM 572  NM
Selling, general, and administrative expenses $ 169,195  12.7  % $ 146,452  11.7  %
Operating income:
U.S. Federal Services $ 68,807  10.2  % $ 51,045  8.3  %
U.S. Services 66,063  13.5  % 37,756  8.6  %
Outside the U.S. (112) (0.1) % 10,066  5.3  %
Amortization of intangible assets (23,349) NM (23,518) NM
Divestiture-related charges (2) (1,018) NM —  NM
Other (3) (2,881) NM (572) NM
Operating income $ 107,510  8.1  % $ 74,777  6.0  %
(1)Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM."
(2)In November 2023, we sold our businesses in Italy and Singapore, as well as our employment services business in Canada, recording a loss of $1.0 million. We previously recorded an impairment charge of $2.9 million related to these assets.
(3)Other expenses includes credits and costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed.