Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v3.22.2
Business Segments
 9 Months Ended
Jun. 30, 2022
Segment Reporting [Abstract]  
Business Segments BUSINESS SEGMENTS
We conduct our operations through three business segments: U.S. Services, U.S. Federal Services, and Outside the U.S.
U.S. Services
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. This includes assessments to determine whether personal care services are medically necessary and public health offerings such as contact tracing, disease investigation, and vaccine distribution support services as part of the governments' COVID-19 response efforts.
U.S. Federal Services
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 government 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. Benefiting from the Maximus Federal Consulting (formerly Attain Federal) platform, 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 with the acquisition of VES Group, Inc., which 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.
Outside the U.S.
Our Outside the U.S. Segment provides BPS for international governments and commercial clients, 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 U.K., including the Health Assessment Advisory Service ("HAAS") and Restart; Australia, including Workforce Australia 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.
Table 3: Results of Operation by Business Segment
For the Three Months Ended For the Nine Months Ended
June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Amount % (1) Amount % (1) Amount % (1) Amount % (1)
(dollars in thousands)
Revenue:
U.S. Services $ 399,320  $ 436,338  $ 1,183,814  $ 1,269,487 
U.S. Federal Services 525,519  617,601  1,680,678  1,352,982 
Outside the U.S. 200,946  189,581  589,495  525,885 
Revenue $ 1,125,785  $ 1,243,520  $ 3,453,987  $ 3,148,354 
Gross profit:
U.S. Services $ 74,135  18.6 % $ 104,814  24.0 % $ 248,805  21.0 % $ 323,256  25.5 %
U.S. Federal Services 124,203  23.6 % 155,776  25.2 % 365,932  21.8 % 312,405  23.1 %
Outside the U.S. 11,883  5.9 % 31,266  16.5 % 52,090  8.8 % 92,908  17.7 %
Gross profit $ 210,221  18.7 % $ 291,856  23.5 % $ 666,827  19.3 % $ 728,569  23.1 %
Selling, general, and administrative expenses:
U.S. Services $ 42,351  10.6 % $ 42,606  9.8 % $ 115,726  9.8 % $ 116,655  9.2 %
U.S. Federal Services 69,466  13.2 % 69,647  11.3 % 203,340  12.1 % 172,877  12.8 %
Outside the U.S. 23,101  11.5 % 22,973  12.1 % 68,452  11.6 % 65,018  12.4 %
Other (2) (1,944) NM 4,903  NM (16) NM 9,948  NM
Selling, general, and administrative expenses $ 132,974  11.8 % $ 140,129  11.3 % $ 387,502  11.2 % $ 364,498  11.6 %
Operating income/(loss):
U.S. Services $ 31,784  8.0 % $ 62,208  14.3 % $ 133,079  11.2 % $ 206,601  16.3 %
U.S. Federal Services 54,737  10.4 % 86,129  13.9 % 162,592  9.7 % 139,528  10.3 %
Outside the U.S. (11,218) (5.6) % 8,293  4.4 % (16,362) (2.8) % 27,890  5.3 %
Amortization of intangible assets (22,690) NM (12,132) NM (67,951) NM (23,718) NM
Other (2) 1,944  NM (4,903) NM 16  NM (9,948) NM
Operating income $ 54,557  4.8 % $ 139,595  11.2 % $ 211,374  6.1 % $ 340,353  10.8 %
(1)Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM."
(2)Other selling, general, and administrative expenses includes costs that are not allocated to a particular segment. This includes legal expenses and settlements and 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, 2022 included a $2.3 million credit related to changes in acquisition related contingent consideration. See "Note 6. Business Combinations" for more information.