Quarterly report pursuant to Section 13 or 15(d)

Business Segments

v3.22.4
Business Segments
 3 Months Ended
Dec. 31, 2022
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.
U.S. Federal Services
Our U.S. Federal Services Segment delivers end-to-end solutions that help various U.S. federal government agencies better deliver on their mission, including program operations and management, clinical services, and technology solutions. 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 which continues to be managed within this segment. Benefiting from the 2021 acquisition of the Attain Federal business, now managed as Technology Consulting Services, 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.
U.S. Services
Our U.S. Services Segment provides a variety of business process services ("BPS"), such as program administration, 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. As part of the government's COVID-19 response efforts, the segment supported contact tracing, disease investigation, and vaccine distribution support services during the peak of the pandemic. The segment also successfully expanded into the unemployment insurance market where longer term opportunities have materialized. As part of the broader strategy to evolve clinically and address societal macro trends such as aging populations and rising costs, the segment continues to expand its offerings in public health with new work in in-person assessments.
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 the Employment Program of British Columbia; in addition to Italy, Saudi Arabia, Singapore, South Korea, Sweden, and UAE where we predominantly provide employment support and job seeker services.
Table 3.1: Results of Operation by Business Segment
For the Three Months Ended
December 31, 2022 December 31, 2021
Amount % (1) Amount % (1)
(dollars in thousands)
Revenue:
U.S. Federal Services $ 618,167  $ 581,871 
U.S. Services 439,478  386,417 
Outside the U.S. 191,601  182,588 
Revenue $ 1,249,246  $ 1,150,876 
Gross profit:
U.S. Federal Services $ 122,694  19.8  % $ 126,576  21.8  %
U.S. Services 83,598  19.0  % 89,699  23.2  %
Outside the U.S. 38,455  20.1  % 11,880  6.5  %
Gross profit $ 244,747  19.6  % $ 228,155  19.8  %
Selling, general, and administrative expenses:
U.S. Federal Services $ 71,649  11.6  % $ 64,925  11.2  %
U.S. Services 45,842  10.4  % 35,102  9.1  %
Outside the U.S. 28,389  14.8  % 21,340  11.7  %
Other (2) 572  NM 2,854  NM
Selling, general, and administrative expenses $ 146,452  11.7  % $ 124,221  10.8  %
Operating income:
U.S. Federal Services $ 51,045  8.3  % $ 61,651  10.6  %
U.S. Services 37,756  8.6  % 54,597  14.1  %
Outside the U.S. 10,066  5.3  % (9,460) (5.2) %
Amortization of intangible assets (23,518) NM (22,405) NM
Other (2) (572) NM (2,854) NM
Operating income $ 74,777  6.0  % $ 81,529  7.1  %
(1)Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM."
(2)Other 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.