Quarterly report [Sections 13 or 15(d)]

Business Segments

v3.25.4
Business Segments
 3 Months Ended
Dec. 31, 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, 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 advanced 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, and Temporary Assistance to Needy Families (TANF).
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 Operations by Business Segment
  For the Three Months Ended December 31, 2025
(dollars in thousands) U.S. Federal Services % (1 ) U.S. Services % (1 ) Outside the U.S. % (1 ) Total
Revenue $ 786,601  $ 415,248  $ 143,197  $ 1,345,046 
Cost of revenue 571,666  72.7  % 330,854  79.7  % 123,856  86.5  % 1,026,376 
Gross profit 214,935  27.3  % 84,394  20.3  % 19,341  13.5  % 318,670 
Other segment items (2) 85,202  10.8  % 55,108  13.3  % 20,721  14.5  % 161,031 
Segment operating income/(loss) $ 129,733  16.5  % $ 29,286  7.1  % $ (1,380) (1.0) % 157,639 
Divestiture-related gains (3) 8,985 
Other (4) (114)
Amortization of intangible assets (20,300)
Operating income $ 146,210 
Depreciation and amortization: $ 7,115  0.9  % $ 4,222  1.0  % $ 1,552  1.1  % $ 12,889 
For the Three Months Ended December 31, 2024
(dollars in thousands) U.S. Federal Services % (1) U.S. Services % (1) Outside the U.S. % (1) Total
Revenue $ 780,655  $ 452,250  $ 169,770  $ 1,402,675 
Cost of revenue 607,340  77.8  % 357,246  79.0  % 136,532  80.4  % 1,101,118 
Gross profit 173,315  22.2  % 95,004  21.0  % 33,238  19.6  % 301,557 
Other segment items (2) 74,215  9.5  % 54,158  12.0  % 25,118  14.8  % 153,491 
Segment operating income $ 99,100  12.7  % $ 40,846  9.0  % $ 8,120  4.8  % 148,066 
Divestiture-related charges (3) (38,341)
Other (4) 97 
Amortization of intangible assets (23,035)
Operating income $ 86,787 
Depreciation and amortization: $ 2,851  0.4  % $ 3,811  0.8  % $ 1,793  1.1  % $ 8,455 
(1)Percentage of respective revenue, as applicable.
(2)Other segment items are principally selling, general, and administrative expenses allocated to segments.
(3)During fiscal years 2026 and 2025, we divested businesses from our U.S. Services and Outside the U.S. Segments, respectively. See "Note 6. Divestitures" for additional information.
(4)Other expenses include credits and costs that are not allocated to a particular segment.