Cover Page
Cover Page - shares | 6 Months Ended | |
Mar. 31, 2021 | May 03, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-12997 | |
Entity Registrant Name | Maximus, Inc. | |
Entity Incorporation, State or Country Code | VA | |
Entity Tax Identification Number | 54-1000588 | |
Entity Address, Address Line One | 1891 Metro Center Drive | |
Entity Address, City or Town | Reston | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 20190 | |
City Area Code | 703 | |
Local Phone Number | 251-8500 | |
Title of 12(b) Security | Common Stock, no par value | |
Trading Symbol | MMS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Reporting Company | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 61,471,783 | |
Entity Central Index Key | 0001032220 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||||
Revenue | $ 959,280 | $ 818,135 | $ 1,904,834 | $ 1,636,364 |
Cost of revenue | 728,622 | 665,037 | 1,468,121 | 1,307,816 |
Gross profit | 230,658 | 153,098 | 436,713 | 328,548 |
Selling, general, and administrative expenses | 112,402 | 106,853 | 224,369 | 194,080 |
Amortization of intangible assets | 5,070 | 8,934 | 11,586 | 18,022 |
Operating income | 113,186 | 37,311 | 200,758 | 116,446 |
Interest expense | 756 | 465 | 962 | 949 |
Other (expense)/income, net | (520) | 573 | (1,295) | 1,292 |
Income before income taxes | 111,910 | 37,419 | 198,501 | 116,789 |
Provision for income taxes | 31,296 | 9,769 | 53,810 | 30,405 |
Net income | $ 80,614 | $ 27,650 | $ 144,691 | $ 86,384 |
Basic earnings per share (in dollars per share) | $ 1.30 | $ 0.43 | $ 2.33 | $ 1.34 |
Diluted earnings per share (in dollars per share) | 1.29 | 0.43 | 2.33 | 1.34 |
Dividends paid per share (in dollars per share) | $ 0.28 | $ 0.28 | $ 0.56 | $ 0.56 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 62,026 | 63,934 | 62,022 | 64,264 |
Diluted (in shares) | 62,294 | 64,125 | 62,212 | 64,446 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 80,614 | $ 27,650 | $ 144,691 | $ 86,384 |
Foreign currency translation adjustments | 770 | (11,629) | 7,693 | (4,736) |
Comprehensive income attributable to Maximus | $ 81,384 | $ 16,021 | $ 152,384 | $ 81,648 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 101,683 | $ 71,737 |
Accounts receivable — billed and billable, net of allowance of $6,821 and $6,051 | 582,474 | 622,871 |
Accounts receivable — unbilled | 177,938 | 163,332 |
Income taxes receivable | 1,685 | 2,075 |
Prepaid expenses and other current assets | 68,357 | 72,543 |
Total current assets | 932,137 | 932,558 |
Property and equipment, net | 62,087 | 66,721 |
Capitalized software, net | 45,351 | 38,033 |
Operating lease right-of-use assets | 176,826 | 177,159 |
Goodwill | 899,796 | 593,129 |
Intangible assets, net | 240,463 | 145,893 |
Deferred contract costs, net | 30,309 | 20,891 |
Deferred compensation plan assets | 43,747 | 36,819 |
Deferred income taxes | 222 | 1,915 |
Other assets | 10,457 | 11,584 |
Total assets | 2,441,395 | 2,024,702 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 278,629 | 253,338 |
Accrued compensation and benefits | 124,279 | 137,101 |
Deferred revenue | 61,475 | 51,655 |
Income taxes payable | 8,051 | 5,377 |
Current portion of long-term debt and other borrowings | 16,551 | 10,878 |
Operating lease liabilities | 79,430 | 80,748 |
Other current liabilities | 25,309 | 22,071 |
Total current liabilities | 593,724 | 561,168 |
Deferred revenue, less current portion | 32,926 | 27,311 |
Deferred income taxes | 31,044 | 24,737 |
Long-term debt, less current portion | 250,601 | 18,017 |
Deferred compensation plan liabilities, less current portion | 44,076 | 38,654 |
Operating lease liabilities, less current portion | 110,124 | 104,011 |
Other liabilities | 8,995 | 8,985 |
Total liabilities | 1,071,490 | 782,883 |
Shareholders’ equity: | ||
Common stock, no par value; 100,000 shares authorized; 61,472 and 61,504 shares issued and outstanding at March 31, 2021, and September 30, 2020, respectively | 528,205 | 513,959 |
Accumulated other comprehensive loss | (34,945) | (42,638) |
Retained earnings | 876,645 | 770,498 |
Total shareholders' equity | 1,369,905 | 1,241,819 |
Total liabilities and shareholders' equity | $ 2,441,395 | $ 2,024,702 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 6,821 | $ 6,051 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 61,472,000 | 61,504,000 |
Common stock, shares outstanding | 61,472,000 | 61,504,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operations: | ||
Net income | $ 144,691 | $ 86,384 |
Adjustments to reconcile net income to cash flows from operations: | ||
Depreciation and amortization of property and equipment and capitalized software | 22,835 | 31,218 |
Amortization of intangible assets | 11,586 | 18,022 |
Deferred income taxes | 7,951 | 3,038 |
Stock compensation expense | 13,479 | 11,800 |
Change in assets and liabilities, net of effects of business combinations | ||
Accounts receivable — billed and billable | 83,711 | (52,870) |
Accounts receivable — unbilled | (13,494) | 2,289 |
Prepaid expenses and other current assets | 8,074 | 4,262 |
Deferred contract costs | (9,184) | (497) |
Accounts payable and accrued liabilities | 12,395 | 22,322 |
Accrued compensation and benefits | (16,761) | 3,839 |
Deferred revenue | 13,296 | 5,300 |
Income taxes | 3,230 | (27,706) |
Operating lease right-of-use assets and liabilities | (414) | 166 |
Other assets and liabilities | (1,697) | 1,705 |
Cash flows from operations | 279,698 | 109,272 |
Cash flows from investing activities: | ||
Purchases of property and equipment and capitalized software costs | (23,584) | (19,122) |
Acquisitions of businesses, net of cash acquired | (413,940) | (2,551) |
Other | 0 | 98 |
Cash used in investing activities | (437,524) | (21,575) |
Cash flows from financing activities: | ||
Cash dividends paid to Maximus shareholders | (34,414) | (35,813) |
Purchases of Maximus common stock | (3,363) | (166,959) |
Tax withholding related to RSU vesting | (9,818) | (10,614) |
Borrowings of debt | 500,162 | 341,715 |
Repayment of debt | (263,838) | (191,256) |
Other | (2,762) | (652) |
Cash provided by/(used in) financing activities | 185,967 | (63,579) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 3,263 | (1,868) |
Net increase in cash, cash equivalents, and restricted cash | 31,404 | 22,250 |
Cash, cash equivalents, and restricted cash, beginning of period | 88,561 | 116,492 |
Cash, cash equivalents, and restricted cash, end of period | $ 119,965 | $ 138,742 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Noncontrolling Interest |
Balance (in shares) at Sep. 30, 2019 | 63,979 | ||||
Balance at Sep. 30, 2019 | $ 1,248,201 | $ 498,433 | $ (45,380) | $ 794,739 | $ 409 |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 86,384 | 86,384 | 0 | ||
Foreign currency translation | (4,736) | (4,736) | |||
Cash dividends | (36,222) | (35,813) | (409) | ||
Dividends on RSUs | $ 790 | (790) | |||
Purchases of Maximus common stock (in shares) | (2,767) | ||||
Purchases of Maximus common stock | (166,959) | $ (167,000) | (166,959) | ||
Stock compensation expense | 11,800 | $ 11,800 | |||
RSUs vested (in shares) | 101 | ||||
Balance (in shares) at Mar. 31, 2020 | 61,313 | ||||
Balance at Mar. 31, 2020 | 1,138,468 | $ 511,023 | (50,116) | 677,561 | 0 |
Balance (in shares) at Dec. 31, 2019 | 63,953 | ||||
Balance at Dec. 31, 2019 | 1,299,005 | $ 504,184 | (38,487) | 833,308 | |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 27,650 | 27,650 | |||
Foreign currency translation | (11,629) | (11,629) | |||
Cash dividends | (17,900) | (17,900) | |||
Dividends on RSUs | 0 | $ 436 | (436) | ||
Purchases of Maximus common stock (in shares) | (2,741) | ||||
Purchases of Maximus common stock | (165,061) | (165,061) | |||
Stock compensation expense | 6,403 | $ 6,403 | |||
RSUs vested (in shares) | 101 | ||||
Balance (in shares) at Mar. 31, 2020 | 61,313 | ||||
Balance at Mar. 31, 2020 | $ 1,138,468 | $ 511,023 | (50,116) | 677,561 | $ 0 |
Balance (in shares) at Sep. 30, 2020 | 61,504 | 61,504 | |||
Balance at Sep. 30, 2020 | $ 1,241,819 | $ 513,959 | (42,638) | 770,498 | |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 144,691 | 144,691 | |||
Foreign currency translation | 7,693 | 7,693 | |||
Cash dividends | (34,414) | (34,414) | |||
Dividends on RSUs | $ 767 | (767) | |||
Purchases of Maximus common stock (in shares) | (52) | ||||
Purchases of Maximus common stock | (3,363) | $ (3,400) | (3,363) | ||
Stock compensation expense | $ 13,479 | $ 13,479 | |||
RSUs vested (in shares) | 20 | ||||
Balance (in shares) at Mar. 31, 2021 | 61,472 | 61,472 | |||
Balance at Mar. 31, 2021 | $ 1,369,905 | $ 528,205 | (34,945) | 876,645 | |
Balance (in shares) at Dec. 31, 2020 | 61,452 | ||||
Balance at Dec. 31, 2020 | 1,298,311 | $ 520,357 | (35,715) | 813,669 | |
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 80,614 | 80,614 | |||
Foreign currency translation | 770 | 770 | |||
Cash dividends | (17,207) | (17,207) | |||
Dividends on RSUs | 431 | (431) | |||
Stock compensation expense | $ 7,417 | $ 7,417 | |||
RSUs vested (in shares) | 20 | ||||
Balance (in shares) at Mar. 31, 2021 | 61,472 | 61,472 | |||
Balance at Mar. 31, 2021 | $ 1,369,905 | $ 528,205 | $ (34,945) | $ 876,645 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. As permitted by these instructions, they do not include all of the information and notes required by generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation are included. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and six months ended March 31, 2021, are not necessarily indicative of the results that may be expected for the full fiscal year. The balance sheet at September 30, 2020, has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the consolidated audited financial statements and the notes thereto at September 30, 2020 and 2019, and for each of the three years in the period ended September 30, 2020, included in our Annual Report on Form 10-K which was filed with the Securities and Exchange Commission on November 19, 2020. Estimates The preparation of these financial statements, in conformity with GAAP in the United States, requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expenses. At each reporting period end, we make estimates including those related to revenue recognition and cost estimation on certain contracts, the realizability of goodwill and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation. We base our estimates on historical experience and expectations of the future that we believe to be reasonable. The economic and political effects of the coronavirus (COVID-19) global pandemic increase uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates may be subject to greater volatility than has been the case in the past. • Our balance sheet includes goodwill valued at $899.8 million. This balance is allocated between reporting units, which are consistent with our three operating segments. Goodwill is not amortized but is tested for impairment when necessary and no less than once per year. We performed our last annual goodwill impairment test as of July 1, 2020, using a qualitative assessment. There has been no indication of impairment of any reporting unit at this time or since. • Our balance sheet includes a number of long-lived assets, including property and equipment, capitalized software, operating lease right-of-use assets, deferred contract costs and intangible assets. These assets are depreciated or amortized over their estimated useful economic lives but are subject to impairment if events indicate that the carrying amounts may not be recoverable. At this time, there are no balances which we believe are not recoverable. • Included within our long-lived assets are $240.5 million of intangible assets, which have been acquired through business combinations. We use judgment in identifying, valuing, and assigning a useful economic life to assets as they are acquired. The judgments required vary with the type of asset but may include projections of future results, estimated costs to recreate or replace assets, the cost of utilizing other, similar assets provided by a third party and an appropriate cost of capital. Where appropriate, we utilize the services of a third-party specialist to assist us in these valuations. • Our balance sheet includes $760.4 million of billed, billable and unbilled accounts receivable, net of allowance for credit losses. Beginning October 1, 2020, we have evaluated credit risk under ASC Topic 326, as further described below. Credit risk has not historically been significant to our business due to the nature of our customers. During the three and six months ended March 31, 2021, we recorded changes to our estimated credit losses of $0.3 million and $0.9 million, respectively. • As disclosed in "Note 3. Revenue Recognition," revenue for some of our employment services contracts in the Outside the U.S. Segment is based upon achievement of future outcomes as defined in each contract. Specifically, we are paid as individuals attain employment goals, which may take many months to achieve. Revenue is recognized on these contracts over the period of performance. Employment markets worldwide suffered a significant shock during fiscal year 2020 due to COVID-19, which resulted in significant reductions in work performed and outcomes reached. Although we are seeing recovery in fiscal year 2021, this revenue remains subject to volatility. Changes in financial reporting In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This accounting guidance requires customers in cloud-computing arrangements to identify and defer certain implementation costs in a manner broadly consistent with that of existing guidance on the costs to develop or obtain internal-use software. Costs capitalized under this guidance will be expensed over the term of the cloud computing arrangement. We adopted this guidance on October 1, 2020, using a prospective approach. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This update introduces a new model for recognizing credit losses on financial instruments, including losses on accounts receivable. This update replaced the existing incurred loss impairment model with an expected loss model. We adopted this guidance on October 1, 2020, with no material impact to our financial statements. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment . This standard will not change the manner in which we would identify a goodwill impairment but would change any subsequent calculation of an impairment charge. We adopted this standard on October 1, 2020. The effect of this new standard will depend upon the outcome of future goodwill impairment tests. We are subject to agreements that reference the London Interbank Offering Rate (LIBOR). Between now and December 2022, we anticipate that agreements with LIBOR will be updated to reflect the transition from this rate to alternative reference rates. In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This standard is intended to provide temporary optional expedients and exceptions on contract modifications and hedge accounting to ease the financial reporting burdens related to this expected market transition. This standard is effective for all entities upon issuance through December 31, 2022. We are assessing the impact of the market transition and this standard. |
Segment Information
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 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition We recognize revenue as, or when, we satisfy performance obligations under a contract. The majority of our contracts have performance obligations which are satisfied over time. In most cases, we view our performance obligations as promises to transfer a series of distinct services to our customer that are substantially the same and which have the same pattern of service. We recognize revenue over the performance period as a customer receives the benefits of our services. Disaggregation of revenue In addition to our segment reporting, we disaggregate our revenues by service, contract type, customer type, and geography. Our operating segments represent the manner in which our Chief Executive Officer reviews our financial results which is further discussed in "Note 2. Segment Information." By operating segment and service Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 Program administration $ 345,383 $ 236,436 $ 639,227 $ 473,343 Assessments and appeals 35,416 29,916 68,031 63,747 Workforce and children services 55,045 28,734 102,866 58,120 Other 12,371 13,612 23,025 25,769 Total U.S. Services $ 448,215 $ 308,698 $ 833,149 $ 620,979 Program administration $ 226,322 $ 304,367 $ 554,112 $ 586,055 Technology solutions 62,784 44,508 97,448 88,114 Assessments and appeals 41,030 44,516 83,821 85,793 Total U.S. Federal Services $ 330,136 $ 393,391 $ 735,381 $ 759,962 Workforce and children services $ 97,971 $ 34,683 $ 175,433 $ 91,922 Assessments and appeals 57,966 62,286 111,089 124,929 Program administration 22,932 16,945 45,988 34,039 Other 2,060 2,132 3,794 4,533 Total Outside the U.S. $ 180,929 $ 116,046 $ 336,304 $ 255,423 Total revenue $ 959,280 $ 818,135 $ 1,904,834 $ 1,636,364 By contract type Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 Performance-based $ 349,749 $ 275,669 $ 643,709 $ 568,427 Cost-plus 286,082 398,973 670,565 761,784 Fixed price 146,344 100,504 267,121 219,720 Time and materials 177,105 42,989 323,439 86,433 Total revenue $ 959,280 $ 818,135 $ 1,904,834 $ 1,636,364 By customer type Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 New York State government agencies $ 111,911 $ 100,222 $ 187,267 $ 197,445 Other U.S. state government agencies 333,786 217,195 646,544 427,081 Total U.S. state government agencies 445,697 317,417 833,811 624,526 U.S. Federal Government agencies 307,870 374,909 693,442 726,742 International government agencies 171,700 107,460 319,042 238,276 Other, including local municipalities and commercial customers 34,013 18,349 58,539 46,820 Total revenue $ 959,280 $ 818,135 $ 1,904,834 $ 1,636,364 By geography Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 United States $ 778,350 $ 702,089 $ 1,568,529 $ 1,380,941 United Kingdom 72,882 63,722 137,668 136,724 Australia 70,947 24,540 126,878 61,975 Rest of world 37,101 27,784 71,759 56,724 Total revenue $ 959,280 $ 818,135 $ 1,904,834 $ 1,636,364 Contract balances Differences in timing between revenue recognition and cash collection result in contract assets and contract liabilities. We classify these assets as accounts receivable — billed and billable and unbilled receivables; the liabilities are classified as deferred revenue. In many contracts, we bill our customers on a monthly basis shortly after the month end for work performed in that month and such balances are considered collectible and are included within accounts receivable — billed and billable. Exceptions to this pattern will arise for various reasons, including those listed below. • Under cost-plus contracts, we are typically required to estimate a contract’s share of our general and administrative expenses. This share is based upon estimates of total costs which may vary over time. We typically invoice our customers at an agreed provisional billing rate which may differ from actual rates incurred. If our actual rates are higher than the provisional billing rates, an asset is recorded for this variance; if the provisional billing rates are higher than our actual rates, we record a liability. • Certain contracts include retainage balances, whereby revenue is earned but some portion of cash payments are held back by the customer for a period of time, typically to allow the customer to confirm the objective criteria laid out by the contract have been met. This balance is classified as accounts receivable - unbilled until restrictions on billing are lifted. • In certain contracts, we may receive funds from our customers prior to performing operations. These funds are typically referred to as “set-up costs” and reflect the need for us to make investments in infrastructure prior to providing a service. This investment in infrastructure is not a performance obligation which is distinct from the service that is subsequently provided and, as a result, revenue is not recognized based upon the establishment of this infrastructure, but rather over the course of the contractual relationship. The funds are initially recorded as deferred revenue and recognized over the term of the contract. Other contracts may not include set-up fees but will provide higher fees in earlier periods of the contract. The premium on these fees is deferred. • Some of our contracts, notably our employment services contracts in the Outside the U.S. Segment, include payments for desired outcomes, such as job placement and job retention and these outcome payments occur over several months. We are required to estimate these outcome fees ahead of their realization and recognize this estimated fee over the period of delivery. Of our revenue for the three and six months ended March 31, 2021, approximately $15.2 million and $29.1 million, respectively, were from cash payments made to us prior to October 1, 2020. For the three and six months ended March 31, 2020, we recognized revenue of $22.1 million and $40.1 million, respectively, from payments made prior to October 1, 2019. Contract estimates We are required to use estimates in recognizing revenue from some of our contracts. As discussed in "Note 1. Organization and Basis of Presentation," the calculation of these estimates has been complicated by the COVID-19 pandemic, which has reduced our ability to use past results to estimate future performance. Some of our performance-based contract revenue is recognized based upon future outcomes defined in each contract. This is the case in many of our employment services contracts in the Outside the U.S. Segment, where we are paid as individuals attain employment goals, which may take many months to achieve. We recognize revenue on these contracts over the period of performance. Our estimates vary from contract to contract but may include estimates of the number of participants, the length of the contract, and the participants reaching employment milestones. We are required to estimate these outcome fees ahead of their realization and recognize this estimated fee over the period of delivery. In almost all of the jurisdictions in which we operate, the employment markets have experienced significant changes due to the COVID-19 pandemic. As the pandemic commenced, many employment opportunities were terminated. Our volume of new program participants is beginning to increase as governments shift their focus to addressing the residual impacts of the pandemic such as the economy and unemployment, particularly in those countries where the pandemic has stabilized and economies are beginning to reopen. Other performance-based contracts with future outcomes include those where we recognize an average effective rate per participant based upon the total volume of expected participants. In this instance, we are required to estimate the amount of discount applied to determine the average rate of revenue per participant. Our revised estimates of participant numbers are based upon our updated evaluation of probable future volumes. Where we make changes to our estimates, these are recognized on a cumulative catch-up basis. In the three and six months ended March 31, 2021, we reported a benefit to revenue of $7.6 million and $16.0 million, respectively, and a benefit to diluted earnings per share of $0.09 and $0.19, respectively, from changes in estimates. The corresponding change in fiscal year 2020 was a decline of $6.3 million and $7.7 million for the three and six months ended March 31, 2020, respectively. Deferred contract costs For many contracts, we incur significant incremental costs at the beginning of an arrangement. Typically, these costs relate to the establishment of infrastructure that we utilize to satisfy our performance obligations with the contract. We report these costs as deferred contract costs and amortize them on a straight-line basis over the shorter of the useful economic life of the asset or the anticipated term of the contract. Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 Deferred contract cost capitalization $ 11,123 $ 2,666 $ 13,614 $ 3,995 Deferred contract cost amortization 2,143 1,321 4,430 3,497 This amortization was recorded within our "cost of revenue" on our consolidated statements of operations. Remaining performance obligations At March 31, 2021, we had approximately $425 million of remaining performance obligations. We anticipate that we will recognize revenue on approximately 55% of this balance within the next 12 months. This balance excludes contracts with an original duration of twelve months or less, including contracts with a penalty-free termination for convenience clause, and any variable consideration which is allocated entirely to future performance obligations including variable transaction fees or fees tied directly to costs incurred. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The weighted average number of shares outstanding used to compute earnings per share was as follows: Three Months Ended March 31, Six Months Ended March 31, (shares in thousands) 2021 2020 2021 2020 Basic weighted average shares outstanding 62,026 63,934 62,022 64,264 Dilutive effect of unvested RSUs 268 191 190 182 Denominator for diluted earnings per share 62,294 64,125 62,212 64,446 Our diluted earnings per share for the three and six months ended March 31, 2020, excludes any effect from approximately 0.3 million and 0.3 million unvested restricted stock units, respectively, as adding them to our calculation would have been antidilutive . |
Business combinations
Business combinations | 6 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Business combinations | Business combinations Attain, LLC On March 1, 2021, we acquired all of the Federal division of Attain, LLC for an estimated cash purchase price of $419.9 million (the "Acquisition"). The final purchase price is subject to adjustment and is expected to be finalized during our third fiscal quarter of 2021. This business is being integrated into our U.S. Federal Services Segment and is expected to strengthen our position to further design, develop, and deliver more innovative, impactful solutions and drive automation of processes to improve citizen engagement and the delivery of critical federal programs, as well as expand our presence in the U.S. federal market. To fund the acquisition, we utilized borrowings on our corporate credit facility and cash on the consolidated balance sheet. The results of operations for the Federal division of Attain, LLC are included in the consolidated results of Maximus, Inc. starting March 1, 2021. At this time, we are in the process of finalizing our purchase price and the valuation, as of March 1, 2021, of all acquired assets and assumed liabilities and, accordingly, the balances below represent our best estimate and are subject to change: (in thousands) Estimated fair value of Cash consideration, net of cash acquired $ 419,864 Accounts receivable - billed, billable and unbilled $ 39,274 Prepaid expenses and other current assets 1,336 Property and equipment, net 703 Operating lease right-of-use assets 25,089 Other assets 84 Intangible assets 105,000 Total identifiable assets acquired 171,486 Accounts payable and other current liabilities 28,301 Operating lease liabilities, less current portion 26,786 Net identifiable assets acquired 116,399 Goodwill 303,465 Net assets acquired $ 419,864 The fair value of the goodwill is estimated to be $303.5 million. This goodwill represents the value of the assembled workforce and the enhanced knowledge, capabilities, and qualifications held by the business. This goodwill balance is expected to be deductible for tax purposes. The fair value of the intangible assets acquired is estimated to be $105.0 million, representing customer relationships. We estimated this balance using the excess earnings method (which is a Level 3 measurement within the ASC 820 fair value hierarchy) and used a number of estimates, including expected future earnings from the acquired business and an appropriate expected rate of return. We have assumed a useful economic life of ten years, representing our expectation of the period over which we will receive the benefit. Typically, our customer relationships are based upon the provision of services to our customers on a daily or monthly basis and, although contracts are frequently rebid, we believe that an incumbent provider typically enjoys significant competitive advantages. During the three and six months ended March 31, 2021, the acquired business contributed revenue of $19.9 million and operating income, including amortization of intangible assets, of $3.0 million. The following table presents certain pro forma results for the three and six months ended March 31, 2021 and 2020, as though the acquisition had occurred on October 1, 2019. This pro forma information is presented for information purposes only and is not necessarily indicative of the results if the acquisition had taken place on that date. The pro forma results below eliminate intercompany transactions, include amortization charges for acquired intangible assets, eliminate pre-acquisition transaction costs, and include estimates of interest expense based upon our initial borrowings of $240.0 million, as well as corresponding changes in our provision for income taxes. Unaudited pro forma results Three Months Six Months (in thousands, except per share amounts) 2021 2020 2021 2020 Revenue $ 994,751 $ 867,740 $ 1,996,377 $ 1,735,404 Net income 83,289 28,013 151,270 82,530 Basic earnings per share 1.34 0.44 2.44 1.28 Diluted earnings per share 1.34 0.44 2.43 1.28 InjuryNet Australia Pty Limited On February 28, 2020, we acquired 100% of the share capital of InjuryNet Australia Pty Limited (InjuryNet) for a purchase price of $4.4 million ($6.7 million Australian Dollars), which included acquisition-related contingent consideration of $2.1 million ($3.1 million Australian Dollars) based upon future earnings. InjuryNet provides workplace medical services in Australia. The business was integrated into our Outside the U.S. Segment. We have completed our assessment of all acquired assets and liabilities assumed. We recorded estimated goodwill and intangible assets of $2.6 million and $0.9 million, respectively, related to the acquisition. Index Root Korea Co. Ltd. On August 21, 2020, we acquired 100% of the share capital of Index Root Korea Co. Ltd (Index Root) for an estimated purchase price of $5.4 million (6.3 billion South Korean Won), which includes acquisition-related contingent consideration estimated at $0.9 million (1.1 billion South Korean Won) based upon future earnings. We acquired Index Root to expand our geographic presence to South Korea. The business was integrated into our Outside the U.S. Segment. We have completed our assessment of all acquired assets and liabilities assumed, with the exception of matters related to taxation. We recorded estimated goodwill and intangible assets of $4.6 million and $1.4 million, respectively, related to the acquisition. During the second quarter of fiscal year 2021, we noted that payment of the contingent consideration was unlikely and, accordingly, a benefit of $1.0 million was recorded within our acquisition expenses. Changes in goodwill for the six months ended March 31, 2021, were as follows: (in thousands) U.S. Services U.S. Federal Services Outside the United States Total Balance as of September 30, 2020 $ 164,472 $ 381,719 $ 46,938 $ 593,129 Estimated effects of acquisitions — 303,465 583 304,048 Foreign currency translation — — 2,619 2,619 Balance as of March 31, 2021 $ 164,472 $ 685,184 $ 50,140 $ 899,796 There have been no impairment charges to our goodwill. The following table sets forth the components of intangible assets (in thousands): As of March 31, 2021 As of September 30, 2020 (in thousands) Cost Accumulated Intangible Cost Accumulated Intangible Customer contracts and relationships $ 341,945 $ 102,243 $ 239,702 $ 235,287 $ 90,302 $ 144,985 Technology based intangible assets 5,880 5,119 761 5,631 4,723 908 Trademarks and trade names 4,508 4,508 — 4,479 4,479 — Total $ 352,333 $ 111,870 $ 240,463 $ 245,397 $ 99,504 $ 145,893 As of March 31, 2021, our intangible assets have a weighted average remaining life of 9.2 years, comprising 9.2 years for customer contracts and relationships and 2.6 years for technology-based intangible assets. The estimated future amortization expense for the next five years for the intangible assets held by the Company as of March 31, 2021, is as follows: (In thousands) Estimated Future Amortization Expense Year ended September 30, 2021, Remainder of year $ 13,645 Year ended September 30, 2022 27,224 Year ended September 30, 2023 27,119 Year ended September 30, 2024 26,995 Year ended September 30, 2025 26,764 Year ended September 30, 2026 26,529 |
Supplemental Disclosures
Supplemental Disclosures | 6 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Disclosures | Supplemental Disclosures Under a resolution adopted in March 2020, the Board of Directors authorized the purchase, at management's discretion, of up to $200 million of our common stock. This supplemented a similar resolution adopted in June 2018. During the six months ended March 31, 2021, we purchased approximately 52,000 shares of our common stock at a cost of $3.4 million. During the six months ended March 31, 2020, we purchased approximately 2,767,000 shares of our common stock at a cost of $167.0 million. At March 31, 2021, $146.7 million remained available for future stock repurchases. During the six months ended March 31, 2021, we granted approximately 315,000 restricted stock units (RSUs) to our employees. Most of these awards will vest ratably over four years, as opposed to five years in previous years. In addition, we awarded approximately 85,000 performance stock units in the six months ended March 31, 2021, to certain executives that will vest at the end of a three-year performance period with the actual number of vested units dependent upon the Company's achievement of certain performance targets. Our deferred compensation plan uses both mutual fund and life insurance investments to fund its obligations. The mutual funds are recorded at fair value, based upon quoted prices in active markets (Level 1), and the life insurance investments at cash surrender value; changes in value are reported in our consolidated statements of operations. At March 31, 2021, the deferred compensation plan held $27.1 million of the mutual fund investments. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and other amounts included within current assets and liabilities that meet the definition of a financial instrument are shown at values equivalent to fair value due to the short-term nature of these items. Our debt balances are principally from credit facilities which can be utilized and repaid as required and whose rates are based upon prevailing market conditions; accordingly, we believe the balance disclosed approximates the fair value. Our accounts receivable billed and billable balance includes both amounts invoiced and amounts that are ready to be invoiced where the funds are collectible within standard invoice terms. Our accounts receivable unbilled balance includes balances where revenue has been earned but no invoice was issued on or before March 31, 2021. Restricted cash represents funds which are held in our bank accounts but which we are precluded from using for general business needs through contractual requirements; these requirements include serving as collateral for lease, credit card, or letter of credit arrangements, or where we hold funds on behalf of clients. Restricted cash is included within "prepaid expenses and other current assets" on our consolidated balance sheets and is included within "cash, cash equivalents, and restricted cash" in our consolidated statements of cash flows. A reconciliation of these balances is shown below. Balance as of (in thousands) March 31, September 30, March 31, Cash and cash equivalents $ 101,683 $ 71,737 $ 126,257 Restricted cash (recorded within "prepaid expenses and other current assets") 18,282 16,824 12,485 Cash, cash equivalents, and restricted cash $ 119,965 $ 88,561 $ 138,742 Supplementary Cash Flow Information Six Months Ended March 31, (in thousands) 2021 2020 Interest payments $ 783 $ 500 Income tax payments 42,495 52,900 Cash payments included in the measurement of lease liabilities 49,486 55,900 Operating lease liabilities arising from new or remeasured right-of-use assets 47,286 24,700 |
Litigation
Litigation | 6 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation | Litigation We are subject to audits, investigations, and reviews relating to compliance with the laws and regulations that govern our role as a contractor to agencies and departments of federal, state, local, and foreign governments, and otherwise in connection with performing services in countries outside of the U.S. Adverse findings could lead to criminal, civil, or administrative proceedings, and we could be faced with penalties, fines, suspension, or debarment. Adverse findings could also have a material adverse effect on us because of our reliance on government contracts. We are subject to periodic audits by federal, state, local, and foreign governments for taxes. We are also involved in various claims, arbitrations, and lawsuits arising in the normal conduct of our business. These include but are not limited to bid protests, employment matters, contractual disputes, and charges before administrative agencies. Although we can give no assurance, based upon our evaluation and taking into account the advice of legal counsel, we do not believe that the outcome of any existing matter would likely have a material adverse effect on our consolidated financial position, results of operations, or cash flows. Medicaid claims The Centers for Medicare and Medicaid Services (CMS) has asserted two disallowances against a state Medicaid agency totaling approximately $31 million. From 2004 through 2009, we had a contract with the state agency in support of its school-based Medicaid claims. We entered into separate agreements with the school districts under which we assisted the districts with preparing and submitting claims to the state Medicaid agency which, in turn, submitted claims for reimbursement to CMS. The state has asserted that its agreement with us requires us to reimburse the state for the amounts owed to CMS. However, our agreements with the school districts require them to reimburse us for such amounts, and therefore we believe the school districts are responsible for any amounts that ultimately must be refunded to CMS. Although it is reasonably possible that a court could conclude we are responsible for the full balance of the disallowances, we believe our exposure in this matter is limited to our fees associated with this work and that the school districts will be responsible for the remainder. We have reserved our estimated fees earned from this engagement relating to the disallowances. We exited the federal healthcare-claiming business in 2009 and no longer provide the services at issue in this matter. The state contested the first disallowance of approximately $12 million in U.S. District Court. In February 2020, the District Court upheld that disallowance, and the state has appealed the case to the U.S. Circuit Court of Appeals. The second disallowance of |
Subsequent Events
Subsequent Events | 6 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 9, 2021, our Board of Directors declared a quarterly cash dividend of $0.28 for each share of our common stock outstanding. The dividend is payable on May 28, 2021, to shareholders of record on May 14, 2021. Based upon the number of shares outstanding, we anticipate a cash payment of approximately $17 million. On April 20, 2021, we entered into a definitive Stock Purchase Agreement to acquire all of the issued and outstanding shares of capital stock of VES Group, Inc. (VES) from the shareholders of VES, for a purchase price of $1.4 billion, subject to certain adjustments. VES is the parent company of Veterans Evaluation Services, Inc. VES serves the U.S. Federal Government as a leading provider of Medical Disability Examinations to determine Veterans’ eligibility for compensation and pension benefits. The proposed transaction is subject to U.S. antitrust filing requirements and customary closing conditions. We anticipate borrowing $1.5 billion during the third quarter of fiscal year 2021 to complete the acquisition of VES Group, Inc. We expect the borrowings to be term loans from banks and non-bank sources and expect to have a new corporate credit facility. |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 6 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. As permitted by these instructions, they do not include all of the information and notes required by generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation are included. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and six months ended March 31, 2021, are not necessarily indicative of the results that may be expected for the full fiscal year. The balance sheet at September 30, 2020, has been derived from the audited financial statements at that date, but does not include all of the information and notes required by GAAP for complete financial statements. |
Estimates | Estimates The preparation of these financial statements, in conformity with GAAP in the United States, requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expenses. At each reporting period end, we make estimates including those related to revenue recognition and cost estimation on certain contracts, the realizability of goodwill and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation. We base our estimates on historical experience and expectations of the future that we believe to be reasonable. The economic and political effects of the coronavirus (COVID-19) global pandemic increase uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates may be subject to greater volatility than has been the case in the past. • Our balance sheet includes goodwill valued at $899.8 million. This balance is allocated between reporting units, which are consistent with our three operating segments. Goodwill is not amortized but is tested for impairment when necessary and no less than once per year. We performed our last annual goodwill impairment test as of July 1, 2020, using a qualitative assessment. There has been no indication of impairment of any reporting unit at this time or since. • Our balance sheet includes a number of long-lived assets, including property and equipment, capitalized software, operating lease right-of-use assets, deferred contract costs and intangible assets. These assets are depreciated or amortized over their estimated useful economic lives but are subject to impairment if events indicate that the carrying amounts may not be recoverable. At this time, there are no balances which we believe are not recoverable. • Included within our long-lived assets are $240.5 million of intangible assets, which have been acquired through business combinations. We use judgment in identifying, valuing, and assigning a useful economic life to assets as they are acquired. The judgments required vary with the type of asset but may include projections of future results, estimated costs to recreate or replace assets, the cost of utilizing other, similar assets provided by a third party and an appropriate cost of capital. Where appropriate, we utilize the services of a third-party specialist to assist us in these valuations. • Our balance sheet includes $760.4 million of billed, billable and unbilled accounts receivable, net of allowance for credit losses. Beginning October 1, 2020, we have evaluated credit risk under ASC Topic 326, as further described below. Credit risk has not historically been significant to our business due to the nature of our customers. During the three and six months ended March 31, 2021, we recorded changes to our estimated credit losses of $0.3 million and $0.9 million, respectively. • As disclosed in "Note 3. Revenue Recognition," revenue for some of our employment services contracts in the Outside the U.S. Segment is based upon achievement of future outcomes as defined in each contract. Specifically, we are paid as individuals attain employment goals, which may take many months to achieve. Revenue is recognized on these contracts over the period of performance. Employment markets worldwide |
Changes in financial reporting | Changes in financial reporting In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This accounting guidance requires customers in cloud-computing arrangements to identify and defer certain implementation costs in a manner broadly consistent with that of existing guidance on the costs to develop or obtain internal-use software. Costs capitalized under this guidance will be expensed over the term of the cloud computing arrangement. We adopted this guidance on October 1, 2020, using a prospective approach. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This update introduces a new model for recognizing credit losses on financial instruments, including losses on accounts receivable. This update replaced the existing incurred loss impairment model with an expected loss model. We adopted this guidance on October 1, 2020, with no material impact to our financial statements. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment . This standard will not change the manner in which we would identify a goodwill impairment but would change any subsequent calculation of an impairment charge. We adopted this standard on October 1, 2020. The effect of this new standard will depend upon the outcome of future goodwill impairment tests. We are subject to agreements that reference the London Interbank Offering Rate (LIBOR). Between now and December 2022, we anticipate that agreements with LIBOR will be updated to reflect the transition from this rate to alternative reference rates. In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This standard is intended to provide temporary optional expedients and exceptions on contract modifications and hedge accounting to ease the financial reporting burdens related to this expected market transition. This standard is effective for all entities upon issuance through December 31, 2022. We are assessing the impact of the market transition and this standard. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of financial information for each of the Company's business segments | 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." |
Schedule of identifiable assets by segment | 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 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | By operating segment and service Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 Program administration $ 345,383 $ 236,436 $ 639,227 $ 473,343 Assessments and appeals 35,416 29,916 68,031 63,747 Workforce and children services 55,045 28,734 102,866 58,120 Other 12,371 13,612 23,025 25,769 Total U.S. Services $ 448,215 $ 308,698 $ 833,149 $ 620,979 Program administration $ 226,322 $ 304,367 $ 554,112 $ 586,055 Technology solutions 62,784 44,508 97,448 88,114 Assessments and appeals 41,030 44,516 83,821 85,793 Total U.S. Federal Services $ 330,136 $ 393,391 $ 735,381 $ 759,962 Workforce and children services $ 97,971 $ 34,683 $ 175,433 $ 91,922 Assessments and appeals 57,966 62,286 111,089 124,929 Program administration 22,932 16,945 45,988 34,039 Other 2,060 2,132 3,794 4,533 Total Outside the U.S. $ 180,929 $ 116,046 $ 336,304 $ 255,423 Total revenue $ 959,280 $ 818,135 $ 1,904,834 $ 1,636,364 By contract type Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 Performance-based $ 349,749 $ 275,669 $ 643,709 $ 568,427 Cost-plus 286,082 398,973 670,565 761,784 Fixed price 146,344 100,504 267,121 219,720 Time and materials 177,105 42,989 323,439 86,433 Total revenue $ 959,280 $ 818,135 $ 1,904,834 $ 1,636,364 By customer type Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 New York State government agencies $ 111,911 $ 100,222 $ 187,267 $ 197,445 Other U.S. state government agencies 333,786 217,195 646,544 427,081 Total U.S. state government agencies 445,697 317,417 833,811 624,526 U.S. Federal Government agencies 307,870 374,909 693,442 726,742 International government agencies 171,700 107,460 319,042 238,276 Other, including local municipalities and commercial customers 34,013 18,349 58,539 46,820 Total revenue $ 959,280 $ 818,135 $ 1,904,834 $ 1,636,364 By geography Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 United States $ 778,350 $ 702,089 $ 1,568,529 $ 1,380,941 United Kingdom 72,882 63,722 137,668 136,724 Australia 70,947 24,540 126,878 61,975 Rest of world 37,101 27,784 71,759 56,724 Total revenue $ 959,280 $ 818,135 $ 1,904,834 $ 1,636,364 |
Deferred Contract Cost | Three Months Ended March 31, Six Months Ended March 31, (in thousands) 2021 2020 2021 2020 Deferred contract cost capitalization $ 11,123 $ 2,666 $ 13,614 $ 3,995 Deferred contract cost amortization 2,143 1,321 4,430 3,497 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Weighted average number of shares used to compute earnings per share | The weighted average number of shares outstanding used to compute earnings per share was as follows: Three Months Ended March 31, Six Months Ended March 31, (shares in thousands) 2021 2020 2021 2020 Basic weighted average shares outstanding 62,026 63,934 62,022 64,264 Dilutive effect of unvested RSUs 268 191 190 182 Denominator for diluted earnings per share 62,294 64,125 62,212 64,446 |
Business combinations (Tables)
Business combinations (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | At this time, we are in the process of finalizing our purchase price and the valuation, as of March 1, 2021, of all acquired assets and assumed liabilities and, accordingly, the balances below represent our best estimate and are subject to change: (in thousands) Estimated fair value of Cash consideration, net of cash acquired $ 419,864 Accounts receivable - billed, billable and unbilled $ 39,274 Prepaid expenses and other current assets 1,336 Property and equipment, net 703 Operating lease right-of-use assets 25,089 Other assets 84 Intangible assets 105,000 Total identifiable assets acquired 171,486 Accounts payable and other current liabilities 28,301 Operating lease liabilities, less current portion 26,786 Net identifiable assets acquired 116,399 Goodwill 303,465 Net assets acquired $ 419,864 |
Schedule of Business Acquisition, Pro Forma Information | The pro forma results below eliminate intercompany transactions, include amortization charges for acquired intangible assets, eliminate pre-acquisition transaction costs, and include estimates of interest expense based upon our initial borrowings of $240.0 million, as well as corresponding changes in our provision for income taxes. Unaudited pro forma results Three Months Six Months (in thousands, except per share amounts) 2021 2020 2021 2020 Revenue $ 994,751 $ 867,740 $ 1,996,377 $ 1,735,404 Net income 83,289 28,013 151,270 82,530 Basic earnings per share 1.34 0.44 2.44 1.28 Diluted earnings per share 1.34 0.44 2.43 1.28 InjuryNet Australia Pty Limited On February 28, 2020, we acquired 100% of the share capital of InjuryNet Australia Pty Limited (InjuryNet) for a purchase price of $4.4 million ($6.7 million Australian Dollars), which included acquisition-related contingent consideration of $2.1 million ($3.1 million Australian Dollars) based upon future earnings. InjuryNet provides workplace medical services in Australia. The business was integrated into our Outside the U.S. Segment. We have completed our assessment of all acquired assets and liabilities assumed. We recorded estimated goodwill and intangible assets of $2.6 million and $0.9 million, respectively, related to the acquisition. Index Root Korea Co. Ltd. On August 21, 2020, we acquired 100% of the share capital of Index Root Korea Co. Ltd (Index Root) for an estimated purchase price of $5.4 million (6.3 billion South Korean Won), which includes acquisition-related contingent consideration estimated at $0.9 million (1.1 billion South Korean Won) based upon future earnings. We acquired Index Root to expand our geographic presence to South Korea. The business was integrated into our Outside the U.S. Segment. We have completed our assessment of all acquired assets and liabilities assumed, with the exception of matters related to taxation. We recorded estimated goodwill and intangible assets of $4.6 million and $1.4 million, respectively, related to the acquisition. During the second quarter of fiscal year 2021, we noted that payment of the contingent consideration was unlikely and, accordingly, a benefit of $1.0 million was recorded within our acquisition expenses. |
Schedule of Goodwill | Changes in goodwill for the six months ended March 31, 2021, were as follows: (in thousands) U.S. Services U.S. Federal Services Outside the United States Total Balance as of September 30, 2020 $ 164,472 $ 381,719 $ 46,938 $ 593,129 Estimated effects of acquisitions — 303,465 583 304,048 Foreign currency translation — — 2,619 2,619 Balance as of March 31, 2021 $ 164,472 $ 685,184 $ 50,140 $ 899,796 |
Schedule of Finite-Lived Intangible Assets | The following table sets forth the components of intangible assets (in thousands): As of March 31, 2021 As of September 30, 2020 (in thousands) Cost Accumulated Intangible Cost Accumulated Intangible Customer contracts and relationships $ 341,945 $ 102,243 $ 239,702 $ 235,287 $ 90,302 $ 144,985 Technology based intangible assets 5,880 5,119 761 5,631 4,723 908 Trademarks and trade names 4,508 4,508 — 4,479 4,479 — Total $ 352,333 $ 111,870 $ 240,463 $ 245,397 $ 99,504 $ 145,893 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The estimated future amortization expense for the next five years for the intangible assets held by the Company as of March 31, 2021, is as follows: (In thousands) Estimated Future Amortization Expense Year ended September 30, 2021, Remainder of year $ 13,645 Year ended September 30, 2022 27,224 Year ended September 30, 2023 27,119 Year ended September 30, 2024 26,995 Year ended September 30, 2025 26,764 Year ended September 30, 2026 26,529 |
Supplemental Disclosures (Table
Supplemental Disclosures (Tables) | 6 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash and Cash Equivalents | A reconciliation of these balances is shown below. Balance as of (in thousands) March 31, September 30, March 31, Cash and cash equivalents $ 101,683 $ 71,737 $ 126,257 Restricted cash (recorded within "prepaid expenses and other current assets") 18,282 16,824 12,485 Cash, cash equivalents, and restricted cash $ 119,965 $ 88,561 $ 138,742 |
Restrictions on Cash and Cash Equivalents | A reconciliation of these balances is shown below. Balance as of (in thousands) March 31, September 30, March 31, Cash and cash equivalents $ 101,683 $ 71,737 $ 126,257 Restricted cash (recorded within "prepaid expenses and other current assets") 18,282 16,824 12,485 Cash, cash equivalents, and restricted cash $ 119,965 $ 88,561 $ 138,742 |
Supplementary Cash Flow Information | Supplementary Cash Flow Information Six Months Ended March 31, (in thousands) 2021 2020 Interest payments $ 783 $ 500 Income tax payments 42,495 52,900 Cash payments included in the measurement of lease liabilities 49,486 55,900 Operating lease liabilities arising from new or remeasured right-of-use assets 47,286 24,700 |
Organization and Basis of Pre_3
Organization and Basis of Presentation - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2021USD ($) | Mar. 31, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Goodwill | $ 899,796 | $ 899,796 | $ 593,129 |
Number of operating segments | segment | 3 | ||
Intangible assets, net | 240,463 | $ 240,463 | $ 145,893 |
Billed, billable and unbilled accounts receivable | 760,400 | 760,400 | |
Bad debt expense | $ 300 | $ 900 |
Segment Information - Financial
Segment Information - Financial information by segment (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)segmentstate | Mar. 31, 2020USD ($) | |
Financial information for each of the Company's business segments | ||||
Number of operating segments | segment | 3 | |||
Number of states supported in unemployment insurance programs (more than) | state | 15 | |||
Revenue: | ||||
Revenue | $ 959,280 | $ 818,135 | $ 1,904,834 | $ 1,636,364 |
Gross profit: | ||||
Gross profit | $ 230,658 | $ 153,098 | $ 436,713 | $ 328,548 |
Gross profit (as a percent) | 24.00% | 18.70% | 22.90% | 20.10% |
Selling, general & administrative expense: | ||||
Selling, general, and administrative expenses | $ 112,402 | $ 106,853 | $ 224,369 | $ 194,080 |
Selling, general, and administrative expense (as a percent) | 11.70% | 13.10% | 11.80% | 11.90% |
Operating income: | ||||
Operating income | $ 113,186 | $ 37,311 | $ 200,758 | $ 116,446 |
Operating income (as a percent) | 11.80% | 4.60% | 10.50% | 7.10% |
Amortization of intangible assets | $ (5,070) | $ (8,934) | $ (11,586) | $ (18,022) |
Segment Reconciling Items | ||||
Selling, general & administrative expense: | ||||
Selling, general, and administrative expenses | 2,818 | 3,484 | 5,045 | 4,021 |
Operating income: | ||||
Amortization of intangible assets | (5,070) | (8,934) | (11,586) | (18,022) |
Other | (2,818) | (3,484) | (5,045) | (4,021) |
Acquisition-related expenses | 2,500 | 4,300 | ||
U.S. Services | ||||
Revenue: | ||||
Revenue | 448,215 | 308,698 | 833,149 | 620,979 |
U.S. Services | Operating Segments | ||||
Revenue: | ||||
Revenue | 448,215 | 308,698 | 833,149 | 620,979 |
Gross profit: | ||||
Gross profit | $ 119,440 | $ 85,454 | $ 218,442 | $ 175,044 |
Gross profit (as a percent) | 26.60% | 27.70% | 26.20% | 28.20% |
Selling, general & administrative expense: | ||||
Selling, general, and administrative expenses | $ 36,593 | $ 39,239 | $ 74,049 | $ 70,637 |
Selling, general, and administrative expense (as a percent) | 8.20% | 12.70% | 8.90% | 11.40% |
Operating income: | ||||
Operating income | $ 82,847 | $ 46,215 | $ 144,393 | $ 104,407 |
Operating income (as a percent) | 18.50% | 15.00% | 17.30% | 16.80% |
U.S. Federal Services | ||||
Revenue: | ||||
Revenue | $ 330,136 | $ 393,391 | $ 735,381 | $ 759,962 |
U.S. Federal Services | Operating Segments | ||||
Revenue: | ||||
Revenue | 330,136 | 393,391 | 735,381 | 759,962 |
Gross profit: | ||||
Gross profit | $ 74,133 | $ 76,958 | $ 156,629 | $ 147,779 |
Gross profit (as a percent) | 22.50% | 19.60% | 21.30% | 19.40% |
Selling, general & administrative expense: | ||||
Selling, general, and administrative expenses | $ 50,978 | $ 46,726 | $ 103,230 | $ 85,965 |
Selling, general, and administrative expense (as a percent) | 15.40% | 11.90% | 14.00% | 11.30% |
Operating income: | ||||
Operating income | $ 23,155 | $ 30,232 | $ 53,399 | $ 61,814 |
Operating income (as a percent) | 7.00% | 7.70% | 7.30% | 8.10% |
Outside the U.S. | ||||
Revenue: | ||||
Revenue | $ 180,929 | $ 116,046 | $ 336,304 | $ 255,423 |
Outside the U.S. | Operating Segments | ||||
Revenue: | ||||
Revenue | 180,929 | 116,046 | 336,304 | 255,423 |
Gross profit: | ||||
Gross profit | $ 37,085 | $ (9,314) | $ 61,642 | $ 5,725 |
Gross profit (as a percent) | 20.50% | (8.00%) | 18.30% | 2.20% |
Selling, general & administrative expense: | ||||
Selling, general, and administrative expenses | $ 22,013 | $ 17,404 | $ 42,045 | $ 33,457 |
Selling, general, and administrative expense (as a percent) | 12.20% | 15.00% | 12.50% | 13.10% |
Operating income: | ||||
Operating income | $ 15,072 | $ (26,718) | $ 19,597 | $ (27,732) |
Operating income (as a percent) | 8.30% | (23.00%) | 5.80% | (10.90%) |
Segment Information - Identifia
Segment Information - Identifiable assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Financial information for each of the Company's business segments | ||
Assets | $ 2,441,395 | $ 2,024,702 |
Corporate | ||
Financial information for each of the Company's business segments | ||
Assets | 187,545 | 159,965 |
U.S. Services | Operating Segments | ||
Financial information for each of the Company's business segments | ||
Assets | 743,791 | 702,728 |
U.S. Federal Services | Operating Segments | ||
Financial information for each of the Company's business segments | ||
Assets | 1,256,188 | 937,477 |
Outside the U.S. | Operating Segments | ||
Financial information for each of the Company's business segments | ||
Assets | $ 253,871 | $ 224,532 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 959,280 | $ 818,135 | $ 1,904,834 | $ 1,636,364 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 778,350 | 702,089 | 1,568,529 | 1,380,941 |
United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 72,882 | 63,722 | 137,668 | 136,724 |
Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 70,947 | 24,540 | 126,878 | 61,975 |
Rest of world | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 37,101 | 27,784 | 71,759 | 56,724 |
Total U.S. state government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 445,697 | 317,417 | 833,811 | 624,526 |
New York State government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 111,911 | 100,222 | 187,267 | 197,445 |
Other U.S. state government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 333,786 | 217,195 | 646,544 | 427,081 |
U.S. Federal Government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 307,870 | 374,909 | 693,442 | 726,742 |
International government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 171,700 | 107,460 | 319,042 | 238,276 |
Other, including local municipalities and commercial customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 34,013 | 18,349 | 58,539 | 46,820 |
Performance-based | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 349,749 | 275,669 | 643,709 | 568,427 |
Cost-plus | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 286,082 | 398,973 | 670,565 | 761,784 |
Fixed price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 146,344 | 100,504 | 267,121 | 219,720 |
Time and materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 177,105 | 42,989 | 323,439 | 86,433 |
U.S. Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 448,215 | 308,698 | 833,149 | 620,979 |
U.S. Federal Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 330,136 | 393,391 | 735,381 | 759,962 |
Outside the U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 180,929 | 116,046 | 336,304 | 255,423 |
Program administration | U.S. Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 345,383 | 236,436 | 639,227 | 473,343 |
Program administration | U.S. Federal Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 226,322 | 304,367 | 554,112 | 586,055 |
Program administration | Outside the U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 22,932 | 16,945 | 45,988 | 34,039 |
Technology solutions | U.S. Federal Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 62,784 | 44,508 | 97,448 | 88,114 |
Assessments and appeals | U.S. Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 35,416 | 29,916 | 68,031 | 63,747 |
Assessments and appeals | U.S. Federal Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 41,030 | 44,516 | 83,821 | 85,793 |
Assessments and appeals | Outside the U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 57,966 | 62,286 | 111,089 | 124,929 |
Workforce and children services | U.S. Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 55,045 | 28,734 | 102,866 | 58,120 |
Workforce and children services | Outside the U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 97,971 | 34,683 | 175,433 | 91,922 |
Other | U.S. Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 12,371 | 13,612 | 23,025 | 25,769 |
Other | Outside the U.S. | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 2,060 | $ 2,132 | $ 3,794 | $ 4,533 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||||
Deferred revenue, revenue recognized | $ 15,200 | $ 22,100 | $ 29,100 | $ 40,100 |
Cumulative catch-up adjustment to revenue from change in estimates | $ 7,600 | 6,300 | $ 16,000 | 7,700 |
Cumulative catch-up adjustment to diluted earnings per share from change in estimates (in dollars per share) | $ 0.09 | $ 0.19 | ||
Deferred contract cost capitalization | $ 11,123 | 2,666 | $ 13,614 | 3,995 |
Deferred contract cost amortization | $ 2,143 | $ 1,321 | $ 4,430 | $ 3,497 |
Revenue Recognition - Remaining
Revenue Recognition - Remaining Performance Obligation (Details) $ in Millions | Mar. 31, 2021USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, amount | $ 425 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 425 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 55.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average shares outstanding | 62,026 | 63,934 | 62,022 | 64,264 |
Dilutive effect of unvested RSUs | 268 | 191 | 190 | 182 |
Denominator for diluted earnings per share | 62,294 | 64,125 | 62,212 | 64,446 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 200 | 300 | 200 | 300 |
Business combinations - Narrati
Business combinations - Narrative (Details) $ in Thousands, $ in Millions, ₩ in Billions | Mar. 01, 2021USD ($) | Aug. 21, 2020USD ($) | Aug. 21, 2020KRW (₩) | Feb. 28, 2020USD ($) | Feb. 28, 2020AUD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Aug. 21, 2020KRW (₩) | Feb. 28, 2020AUD ($) |
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 899,796 | $ 899,796 | $ 593,129 | |||||||||
Revenue | 959,280 | $ 818,135 | 1,904,834 | $ 1,636,364 | ||||||||
Operating income | 113,186 | $ 37,311 | $ 200,758 | $ 116,446 | ||||||||
Weighted Average | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Useful life | 9 years 2 months 12 days | |||||||||||
Weighted Average | Customer contracts and relationships | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Useful life | 9 years 2 months 12 days | |||||||||||
Weighted Average | Technology based intangible assets | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Useful life | 2 years 7 months 6 days | |||||||||||
Attain | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Estimated cash consideration | $ 419,864 | |||||||||||
Goodwill | 303,465 | |||||||||||
Revenue | 19,900 | $ 19,900 | ||||||||||
Operating income | 3,000 | $ 3,000 | ||||||||||
Intangible assets | 105,000 | |||||||||||
Attain | Customer Relationships | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Intangible assets acquired | $ 105,000 | |||||||||||
Useful life | 10 years | |||||||||||
Attain | Line of Credit | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Proceeds from lines of credit | $ 240,000 | |||||||||||
InjuryNet | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 2,600 | |||||||||||
Percentage of voting equity interests acquired | 100.00% | 100.00% | ||||||||||
Cash payment to acquire business | $ 4,400 | $ 6.7 | ||||||||||
Contingent consideration | 2,100 | $ 3.1 | ||||||||||
Intangible assets | $ 900 | |||||||||||
Index Root | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 4,600 | |||||||||||
Percentage of voting equity interests acquired | 100.00% | 100.00% | ||||||||||
Cash payment to acquire business | $ 5,400 | ₩ 6.3 | ||||||||||
Contingent consideration | 900 | ₩ 1.1 | ||||||||||
Intangible assets | $ 1,400 | |||||||||||
Reversal of acquisition related costs | $ 1,000 |
Business combinations - Schedul
Business combinations - Schedule of Asset Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 01, 2021 | Mar. 31, 2021 | Sep. 30, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 899,796 | $ 593,129 | |
Attain | |||
Business Acquisition [Line Items] | |||
Cash consideration, net of cash acquired | $ 419,864 | ||
Accounts receivable - billed, billable and unbilled | 39,274 | ||
Prepaid expenses and other current assets | 1,336 | ||
Property and equipment, net | 703 | ||
Operating lease right-of-use assets | 25,089 | ||
Other assets | 84 | ||
Intangible assets | 105,000 | ||
Total identifiable assets acquired | 171,486 | ||
Accounts payable and other current liabilities | 28,301 | ||
Operating lease liabilities, less current portion | 26,786 | ||
Net identifiable assets acquired | 116,399 | ||
Goodwill | 303,465 | ||
Net assets acquired | $ 419,864 |
Business combinations - Pro For
Business combinations - Pro Forma Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Business Combinations [Abstract] | ||||
Revenue | $ 994,751 | $ 867,740 | $ 1,996,377 | $ 1,735,404 |
Net income | $ 83,289 | $ 28,013 | $ 151,270 | $ 82,530 |
Basic earnings per share (in dollars per share) | $ 1.34 | $ 0.44 | $ 2.44 | $ 1.28 |
Diluted earnings per share (in dollars per share) | $ 1.34 | $ 0.44 | $ 2.43 | $ 1.28 |
Business combinations - Changes
Business combinations - Changes in Goodwill (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | $ 593,129 |
Estimated effects of acquisitions | 304,048 |
Foreign currency translation | 2,619 |
Balance at the end of the period | 899,796 |
U.S. Services | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 164,472 |
Estimated effects of acquisitions | 0 |
Foreign currency translation | 0 |
Balance at the end of the period | 164,472 |
U.S. Federal Services | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 381,719 |
Estimated effects of acquisitions | 303,465 |
Foreign currency translation | 0 |
Balance at the end of the period | 685,184 |
Outside the U.S. | |
Goodwill [Roll Forward] | |
Balance at the beginning of the period | 46,938 |
Estimated effects of acquisitions | 583 |
Foreign currency translation | 2,619 |
Balance at the end of the period | $ 50,140 |
Business combinations - Compone
Business combinations - Components of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 352,333 | $ 245,397 |
Accumulated Amortization | 111,870 | 99,504 |
Intangible Assets, net | 240,463 | 145,893 |
Customer contracts and relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 341,945 | 235,287 |
Accumulated Amortization | 102,243 | 90,302 |
Intangible Assets, net | 239,702 | 144,985 |
Technology based intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 5,880 | 5,631 |
Accumulated Amortization | 5,119 | 4,723 |
Intangible Assets, net | 761 | 908 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,508 | 4,479 |
Accumulated Amortization | 4,508 | 4,479 |
Intangible Assets, net | $ 0 | $ 0 |
Business combinations - Estimat
Business combinations - Estimated Future Amortization Expense For Intangible Assets (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Business Combinations [Abstract] | |
Year ended September 30, 2021, Remainder of year | $ 13,645 |
2022 | 27,224 |
2023 | 27,119 |
2024 | 26,995 |
2025 | 26,764 |
2026 | $ 26,529 |
Supplemental Disclosures - Narr
Supplemental Disclosures - Narrative (Details) - USD ($) shares in Thousands | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | |
Payments for Repurchase of Equity [Abstract] | |||
Repurchases of common stock | $ 165,061,000 | $ 3,363,000 | $ 166,959,000 |
Investments in mutual funds | $ 27,100,000 | ||
Restricted Stock Units (RSUs) | |||
Payments for Repurchase of Equity [Abstract] | |||
Granted (in shares) | 315 | ||
Vesting period | 4 years | 5 years | |
Performance-based RSUs | |||
Payments for Repurchase of Equity [Abstract] | |||
Granted (in shares) | 85 | ||
Vesting period | 3 years | ||
Common Stock | |||
Payments for Repurchase of Equity [Abstract] | |||
Common shares repurchased (in shares) | 2,741 | 52 | 2,767 |
Repurchases of common stock | $ 3,400,000 | $ 167,000,000 | |
Stock Repurchase Program, March 2020 | Common Stock | |||
Payments for Repurchase of Equity [Abstract] | |||
Stock repurchase programs, authorized amount | $ 200,000,000 | $ 200,000,000 | |
Remaining authorized repurchase amount | $ 146,700,000 |
Supplemental Disclosures - Sche
Supplemental Disclosures - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 101,683 | $ 71,737 | $ 126,257 | |
Restricted cash (recorded within "prepaid expenses and other current assets") | 18,282 | 16,824 | 12,485 | |
Cash, cash equivalents, and restricted cash | $ 119,965 | $ 88,561 | $ 138,742 | $ 116,492 |
Supplemental Disclosures - Supp
Supplemental Disclosures - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Text Block [Abstract] | ||
Interest payments | $ 783 | $ 500 |
Income tax payments | 42,495 | 52,900 |
Cash payments included in the measurement of lease liabilities | 49,486 | 55,900 |
Operating lease liabilities arising from new or remeasured right-of-use assets | $ 47,286 | $ 24,700 |
Litigation (Details)
Litigation (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Feb. 29, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Loss contingency, maximum potential loss | $ 31 | |
Disallowance | $ 19 | $ 12 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | May 28, 2021 | Apr. 20, 2021 | Apr. 09, 2021 | Jun. 30, 2021 |
Forecast | VES | ||||
Subsequent Event [Line Items] | ||||
Proceeds from borrowings | $ 1,500 | |||
Common Stock | Forecast | ||||
Subsequent Event [Line Items] | ||||
Payments of Dividends | $ 17 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Cash dividend declared (in dollars per share) | $ 0.28 | |||
Subsequent Event | VES | ||||
Subsequent Event [Line Items] | ||||
Estimated cash consideration | $ 1,400 |