Annual report [Section 13 and 15(d), not S-K Item 405]

Business Segments

v3.25.3
Business Segments
 12 Months Ended
Sep. 30, 2025
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. Our operating segments represent the manner in which our Chief Executive Officer (CEO), who is our Chief Operating Decision Maker (CODM), reviews our financial results. Our CEO assesses the performance of and allocates resources to each operating segment using information about the operating segment's revenue, gross profit, and segment income (loss) from operations. Our CEO does not evaluate operating segments using asset or liability information.
U.S. Federal Services
Our U.S. Federal Services Segment delivers solutions that help various U.S. federal government agencies better execute on their mission, including program operations and management, clinical services, and advanced technology solutions.
U.S. Services
Our U.S. Services Segment provides a variety of services, such as program operations, clinical services, employment services and technology solutions and related professional services work for U.S. state and local government programs. These services support a variety of programs, including the programs under Medicaid and Children's Health Insurance Program (CHIP), the Affordable Care Act (ACA) marketplaces, Temporary Assistance to Needy Families (TANF), and child support programs.
Outside the U.S.
Our Outside the U.S. Segment provides business process services and other solutions for international governments. These services include health and disability assessments, program administration for employment services, wellbeing solutions and other job seeker-related services, digitally-enabled customer services, and advanced technologies for modernization. We support programs and deliver services in the United Kingdom, including the Functional Assessment Services (FAS) contract and the Restart employment program. We also provide services in Canada and the Middle East.
Table 3.1: Results of Operation by Business Segment
  For the Year Ended September 30, 2025
(dollars in thousands) U.S. Federal Services % (1 ) U.S. Services % (1 ) Outside the U.S. % (1 ) Total
Revenue $ 3,067,691  $ 1,763,691  $ 599,894  $ 5,431,276 
Cost of revenue 2,256,928  73.6  % 1,352,709  76.7  % 488,196  81.4  % 4,097,833 
Gross profit 810,763  26.4  % 410,982  23.3  % 111,698  18.6  % 1,333,443 
Other segment items (2) 341,608  11.1  % 239,718  13.6  % 89,307  14.9  % 670,633 
Segment operating income $ 469,155  15.3  % $ 171,264  9.7  % $ 22,391  3.7  % 662,810 
Divestiture-related charges (3) (39,549)
Other (4) (2,925)
Amortization of intangible assets (92,047)
Operating income $ 528,289 
Depreciation and amortization: $ 17,146  0.6  % $ 17,295  1.0  % $ 7,228  1.2  % $ 41,669 
For the Year Ended September 30, 2024
(dollars in thousands) U.S. Federal Services % (1 ) U.S. Services % (1 ) Outside the U.S. % (1 ) Total
Revenue $ 2,737,244  $ 1,911,813  $ 657,140  $ 5,306,197 
Cost of revenue 2,071,482  75.7  % 1,432,026  74.9  % 551,037  83.9  % 4,054,545 
Gross profit 665,762  24.3  % 479,787  25.1  % 106,103  16.1  % 1,251,652 
Other segment items (2) 332,140  12.1  % 232,805  12.2  % 98,398  15.0  % 663,343 
Segment operating income $ 333,622  12.2  % $ 246,982  12.9  % $ 7,705  1.2  % 588,309 
Divestiture-related charges (3) (1,018)
Other (4) (7,222)
Amortization of intangible assets (91,570)
Operating income $ 488,499 
Depreciation and amortization: $ 10,503  0.4  % $ 16,079  0.8  % $ 7,375  1.1  % $ 33,957 
For the Year Ended September 30, 2023
(dollars in thousands) U.S. Federal Services % (1 ) U.S. Services % (1 ) Outside the U.S. % (1 ) Total
Revenue $ 2,403,606  $ 1,812,069  $ 689,053  $ 4,904,728 
Cost of revenue 1,845,720  76.8  % 1,434,528  79.2  % 595,872  86.5  % 3,876,120 
Gross profit 557,886  23.2  % 377,541  20.8  % 93,181  13.5  % 1,028,608 
Other segment items (2) 308,197  12.8  % 194,991  10.8  % 102,311  14.8  % 605,499 
Segment operating income/(loss) $ 249,689  10.4  % $ 182,550  10.1  % $ (9,130) (1.3) % 423,109 
Divestiture-related charges (3) (3,751)
Other (4) (29,973)
Amortization of intangible assets (94,591)
Operating income $ 294,794 
Depreciation and amortization: $ 18,336  0.8  % $ 22,674  1.3  % $ 13,715  2.0  % $ 54,725 
(1)Percentage of respective segment revenue.
(2)Other segment items are principally selling, general, and administrative expenses allocated to segments.
(3)During fiscal years 2025, 2024 and 2023, we sold a number of businesses in our Outside the U.S. Segment. Refer to "Note 7. Acquisitions and Divestitures" for more details.
(4)Other includes credits and costs that are not allocated to a particular segment. For the fiscal years 2025, 2024 and 2023, these charges include $3.0 million, $2.9 million, and $29.3 million, respectively, related to the costs of a previously disclosed cybersecurity incident. Other charges include direct costs of acquisitions. These costs are excluded from measuring each segment's operating performance.
Our long-lived assets consist of property and equipment, capitalized software costs, operating lease right-of-use assets, and deferred compensation plan assets.
Table 3.2: Long-Lived Assets by Geography
As of September 30,
2025 2024
(in thousands)
United States $ 386,668  $ 383,989 
Outside the US 22,350  32,172 
Total $ 409,018  $ 416,161