Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.21.2
Segment Information
 9 Months Ended
Jun. 30, 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. Addressing societal macro trends such as aging populations and rising costs, 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. The segment also successfully expanded into the unemployment insurance market, supporting more than 15 states in their unemployment insurance programs.

•From technology solutions to program administration and operations, our U.S. Federal Services Segment delivers end-to-end solutions that help various U.S. federal agencies better deliver on their mission. 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 within the Medicare Appeals portfolio which continues to be managed within this segment. Propelled by the Maximus Attain platform, the segment executes on its digital strategy to deliver technology solutions that advance agency missions, including the charge to modernize, provide better customer experience, and drive process efficiencies. The segment continues to expand its clinical solutions and manages the clinical evaluation process for U.S. veterans and service members on behalf of the U.S. Department of Veterans Affairs. The segment further supports 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 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.

•Delivering support to people from different backgrounds, cultures and communities, our Outside the U.S. Segment provides BPS for international governments and commercial clients. 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 (U.K.), including the Health Assessment Advisory Service (HAAS), the Work & Health Programme, Fair Start, and Restart; 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 June 30, Nine Months Ended June 30,
(in thousands) 2021 % (1) 2020 % (1) 2021 % (1) 2020 % (1)
Revenue:        
U.S. Services $ 436,338  $ 336,950  $ 1,269,487  $ 957,929 
U.S. Federal Services 617,601  450,143  1,352,982  1,210,105 
Outside the U.S. 189,581  114,244  525,885  369,667 
Total $ 1,243,520  $ 901,337  $ 3,148,354  $ 2,537,701 
Gross profit:        
U.S. Services $ 104,814  24.0% $ 93,029  27.6% $ 323,256  25.5% $ 268,073  28.0%
U.S. Federal Services 155,776  25.2% 84,723  18.8% 312,405  23.1% 232,502  19.2%
Outside the U.S. 31,266  16.5% 7,851  6.9% 92,908  17.7% 13,576  3.7%
Total $ 291,856  23.5% $ 185,603  20.6% $ 728,569  23.1% $ 514,151  20.3%
Selling, general & administrative expense:        
U.S. Services $ 42,606  9.8% $ 31,996  9.5% $ 116,655  9.2% $ 102,633  10.7%
U.S. Federal Services 69,647  11.3% 45,490  10.1% 172,877  12.8% 131,455  10.9%
Outside the U.S. 22,973  12.1% 13,668  12.0% 65,018  12.4% 47,125  12.7%
Gain on sale of business (3) —  NM (1,706) NM —  NM (1,706) NM
Other (2) 4,903  NM 134  NM 9,948  NM 4,155  NM
Total $ 140,129  11.3% $ 89,582  9.9% $ 364,498  11.6% $ 283,662  11.2%
Operating income:        
U.S. Services $ 62,208  14.3% $ 61,033  18.1% $ 206,601  16.3% $ 165,440  17.3%
U.S. Federal Services 86,129  13.9% 39,233  8.7% 139,528  10.3% 101,047  8.4%
Outside the U.S. 8,293  4.4% (5,817) (5.1)% 27,890  5.3% (33,549) (9.1)%
Amortization of intangible assets (12,132) NM (8,712) NM (23,718) NM (26,734) NM
Gain on sale of business (3) —  NM 1,706  NM $ —  NM 1,706  NM
Other (2) (4,903) NM (134) NM (9,948) NM (4,155) NM
Total $ 139,595  11.2% $ 87,309  9.7% $ 340,353  10.8% $ 203,755  8.0%

(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 nine months ended June 30, 2021, included $5.6 million and $8.8 million, respectively, of expenses relating to the acquisitions of Attain, LLC, and VES Group, Inc. For more information, see "Note 5. Business Combinations."
(3) During fiscal year 2020, we sold Q2 Administrators LLC, a subsidiary within our U.S. Federal Services Segment, resulting in a gain.

Identifiable assets for the segments are shown below. Identifiable assets for U.S. Federal Services increased due to the acquisitions of Attain, LLC and VES Group, Inc. Refer to "Note 5. Business Combinations" for details.
(in thousands) June 30, 2021 September 30, 2020
U.S. Services $ 728,347  $ 702,728 
U.S. Federal Services 3,149,694  937,477 
Outside the U.S. 304,952  224,532 
Corporate 187,600  159,965 
Total $ 4,370,593  $ 2,024,702