Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.21.1
Segment Information
 6 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Segment Information Segment Information
We conduct our operations through three business segments: U.S. Services, U.S. Federal Services, and Outside the U.S.
•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. The segment continues to execute on its clinical evolution strategy by expanding its clinical offerings in public health with new work in contact tracing, disease investigation, and vaccine distribution support services as part of the governments' COVID-19 response efforts. We also successfully expanded into the unemployment insurance market, supporting more than 15 states in their unemployment insurance programs.
•Our U.S. Federal Services Segment provides program administration, appeals and assessments services, and technology solutions, including system and application development, modernization, and maintenance services, for various U.S. federal civilian programs. The segment also contains certain state-based assessments and appeals work that is part of the segment's heritage within the Medicare Appeals portfolio and continues to be managed within this segment. The segment recently expanded its 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, an outbound customer support center for the Office of the Assistant Secretary for Health to notify individuals throughout the U.S. of their COVID-19 test result, 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.
•Our Outside the U.S. Segment provides BPS for international governments and commercial clients. These services include health and disability assessments, program administration for employment services, and other job seeker related services. We support programs and deliver services in the United Kingdom (U.K.), including the Health Assessment Advisory Service (HAAS), the Work & Health Programme and Fair Start; Australia, including jobactive 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.
Expenses that are not specifically included in the segments are included in other categories, including amortization of intangible assets and the direct costs of acquisitions. These costs are excluded from measuring each segment's operating performance.
  Three Months Ended March 31, Six Months Ended March 31,
(in thousands) 2021 % (1) 2020 % (1) 2021 % (1) 2020 % (1)
Revenue:        
U.S. Services $ 448,215  $ 308,698  $ 833,149  $ 620,979 
U.S. Federal Services 330,136  393,391  735,381  759,962 
Outside the U.S. 180,929  116,046  336,304  255,423 
Total $ 959,280  $ 818,135  $ 1,904,834  $ 1,636,364 
Gross profit:        
U.S. Services $ 119,440  26.6% $ 85,454  27.7% $ 218,442  26.2% $ 175,044  28.2%
U.S. Federal Services 74,133  22.5% 76,958  19.6% 156,629  21.3% 147,779  19.4%
Outside the U.S. 37,085  20.5% (9,314) (8.0)% 61,642  18.3% 5,725  2.2%
Total $ 230,658  24.0% $ 153,098  18.7% $ 436,713  22.9% $ 328,548  20.1%
Selling, general & administrative expense:        
U.S. Services $ 36,593  8.2% $ 39,239  12.7% $ 74,049  8.9% $ 70,637  11.4%
U.S. Federal Services 50,978  15.4% 46,726  11.9% 103,230  14.0% 85,965  11.3%
Outside the U.S. 22,013  12.2% 17,404  15.0% 42,045  12.5% 33,457  13.1%
Other (2) 2,818  NM 3,484  NM 5,045  NM 4,021  NM
Total $ 112,402  11.7% $ 106,853  13.1% $ 224,369  11.8% $ 194,080  11.9%
Operating income:        
U.S. Services $ 82,847  18.5% $ 46,215  15.0% $ 144,393  17.3% $ 104,407  16.8%
U.S. Federal Services 23,155  7.0% 30,232  7.7% 53,399  7.3% 61,814  8.1%
Outside the U.S. 15,072  8.3% (26,718) (23.0)% 19,597  5.8% (27,732) (10.9)%
Amortization of intangible assets (5,070) NM (8,934) NM (11,586) NM (18,022) NM
Other (2) (2,818) NM (3,484) NM (5,045) NM (4,021) NM
Total $ 113,186  11.8% $ 37,311  4.6% $ 200,758  10.5% $ 116,446  7.1%

(1) Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.”
(2) Other selling, general, and administrative 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. Our results for the three and six months ended March 31, 2021, included $2.5 million and $4.3 million, respectively, of expenses relating to the acquisitions of Attain, LLC, and VES Group, Inc., as well as the benefit of a reversal of acquisition-related contingent consideration. For more information, see "Note 5. Business combinations."
Identifiable assets for the segments are shown below. Identifiable assets for U.S. Federal Services increased due to the acquisition of Attain, LLC on March 1, 2021. Refer to "Note 5. Business combinations" for details.
(in thousands) March 31, 2021 September 30, 2020
U.S. Services $ 743,791  $ 702,728 
U.S. Federal Services 1,256,188  937,477 
Outside the U.S. 253,871  224,532 
Corporate 187,545  159,965 
Total $ 2,441,395  $ 2,024,702