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12. Segment Reporting
The Company’s reportable segments have been determined using a management approach, which is consistent with the basis and manner in which the Company’s chief operating decision maker (“CODM”) uses financial information for the purposes of allocating resources and evaluating performance. The Company’s CODM is its Chief Executive Officer. The CODM evaluates the performance of the Company based on its total revenue and segment profit.
The CODM also uses revenue and segment profit to manage and evaluate our business, make planning decisions, and as performance measures for Company-wide bonus plans. These key financial measures provide an additional view of our operational performance over the long-term and provide useful information that we use in order to maintain and grow our business.
The accounting policies of the segments are the same as those described in Note 2 “Accounting Policies and Practices.” The Company does not report assets by reportable segments as this information is not reviewed by the CODM on a regular basis.
Information regarding the Company’s current reportable segments is as follows (in millions):
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
September 30, |
|
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
|
2021 |
|
|
|
2021 |
|
|
2020 |
|
|
2020 |
|
|
Employer Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring |
|
$ |
|
522 |
|
|
|
$ |
|
1,049 |
|
|
$ |
|
498 |
|
|
$ |
|
1,516 |
|
|
Project |
|
|
|
65 |
|
|
|
|
|
107 |
|
|
|
|
61 |
|
|
|
|
162 |
|
|
Total Employer Solutions |
|
|
|
587 |
|
|
|
|
|
1,156 |
|
|
|
|
559 |
|
|
|
|
1,678 |
|
|
Professional Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring |
|
|
|
32 |
|
|
|
|
|
60 |
|
|
|
|
28 |
|
|
|
|
78 |
|
|
Project |
|
|
|
61 |
|
|
|
|
|
124 |
|
|
|
|
65 |
|
|
|
|
194 |
|
|
Total Professional Services |
|
|
|
93 |
|
|
|
|
|
184 |
|
|
|
|
93 |
|
|
|
|
272 |
|
|
Hosted Business |
|
|
|
10 |
|
|
|
|
|
21 |
|
|
|
|
16 |
|
|
|
|
58 |
|
|
Total |
|
$ |
|
690 |
|
|
|
$ |
|
1,361 |
|
|
$ |
|
668 |
|
|
$ |
|
2,008 |
|
|
|
|
Segment Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor |
|
|
|
Predecessor |
|
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
|
September 30, |
|
|
|
June 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
|
2021 |
|
|
|
2021 |
|
|
2020 |
|
|
2020 |
|
|
Employer Solutions |
|
$ |
|
151 |
|
|
|
$ |
|
274 |
|
|
$ |
|
120 |
|
|
$ |
|
389 |
|
|
Professional Services |
|
|
|
4 |
|
|
|
|
|
7 |
|
|
|
|
12 |
|
|
|
|
23 |
|
|
Hosted Business |
|
|
|
(2 |
) |
|
|
|
|
(3 |
) |
|
|
|
— |
|
|
|
|
4 |
|
|
Total of all reportable segments |
|
|
|
153 |
|
|
|
|
|
278 |
|
|
|
|
132 |
|
|
|
|
416 |
|
|
Share-based compensation |
|
|
|
15 |
|
|
|
|
|
5 |
|
|
|
|
1 |
|
|
|
|
5 |
|
|
Transaction and integration |
|
|
|
3 |
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
Non-recurring professional expenses(1) |
|
|
|
17 |
|
|
|
|
|
18 |
|
|
|
|
— |
|
|
|
|
— |
|
|
Transformation initiatives(2) |
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
11 |
|
|
Restructuring |
|
|
|
3 |
|
|
|
|
|
9 |
|
|
|
|
10 |
|
|
|
|
57 |
|
|
Other(3) |
|
|
|
2 |
|
|
|
|
|
(5 |
) |
|
|
|
4 |
|
|
|
|
28 |
|
|
Depreciation |
|
|
|
14 |
|
|
|
|
|
49 |
|
|
|
|
24 |
|
|
|
|
66 |
|
|
Intangible amortization |
|
|
|
74 |
|
|
|
|
|
100 |
|
|
|
|
51 |
|
|
|
|
151 |
|
|
Operating Income |
|
|
|
25 |
|
|
|
|
|
102 |
|
|
|
|
42 |
|
|
|
|
98 |
|
|
Loss from change in fair value of financial instruments |
|
|
|
90 |
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
Loss from change in fair value of tax receivable agreement |
|
|
|
27 |
|
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
Interest expense |
|
|
|
28 |
|
|
|
|
|
123 |
|
|
|
|
61 |
|
|
|
|
172 |
|
|
Other expense (income), net |
|
|
|
— |
|
|
|
|
|
9 |
|
|
|
|
3 |
|
|
|
|
(1 |
) |
|
Loss Before Income Tax (Benefit) Expense |
|
$ |
|
(120 |
) |
|
|
$ |
|
(30 |
) |
|
$ |
|
(22 |
) |
|
$ |
|
(73 |
) |
|
(1) |
Non-recurring professional expenses primarily includes external advisor costs related to the Company’s Business Combination completed in the third quarter of 2021. |
|
(2) |
Transformation initiatives in fiscal year 2020 includes expenses related to enhancing our data center. |
|
(3) |
Other primarily includes long-term incentive expenses and expenses related to acquisitions in fiscal year 2020, offset by Other expense (income), net. |
There was no single client who accounted for more than 10% of the Company’s revenues in any of the periods presented.
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