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Revenue Recognition | 12 Months Ended
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Sep. 30, 2021
Revenue from Contract with Customer [Abstract] |
Revenue Recognition | REVENUE RECOGNITION The Company recognizes 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 customers 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 3. Business Segments."
Table 4.1: Revenue by Operating Segment and Service
| For the Year Ended September 30,
| 2021 |  | 2020 |  | 2019
| (in thousands)
U.S. Services |  |  |  |  |
Program administration | $ | 1,154,939 |  |  | $ | 945,125 |  |  | $ | 883,772 |
Assessments and appeals | 138,297 |  |  | 141,446 |  |  | 136,109 |
Employment and children services | 320,653 |  |  | 191,061 |  |  | 100,454 |
Other | 48,221 |  |  | 51,642 |  |  | 56,153 |
Total U.S. Services | 1,662,110 |  |  | 1,329,274 |  |  | 1,176,488 |
U.S. Federal Services |  |  |  |  |
Program administration | 1,273,850 |  |  | 1,288,741 |  |  | 779,573 |
Technology solutions | 278,232 |  |  | 169,259 |  |  | 160,342 |
Assessments and appeals | 341,202 |  |  | 175,337 |  |  | 171,282 |
Total U.S. Federal Services | 1,893,284 |  |  | 1,633,337 |  |  | 1,111,197 |
Outside the U.S. |  |  |  |  |
Workforce services | 358,088 |  |  | 206,657 |  |  | 272,801 |
Assessments and appeals | 225,314 |  |  | 218,704 |  |  | 252,447 |
Program administration | 107,643 |  |  | 66,002 |  |  | 63,734 |
Other | 8,046 |  |  | 7,563 |  |  | 10,148 |
Total Outside the U.S. | 699,091 |  |  | 498,926 |  |  | 599,130 |
Total revenue | $ | 4,254,485 |  |  | $ | 3,461,537 |  |  | $ | 2,886,815 |
During fiscal year 2021, management changed the manner in which the products and services within the U.S. Services Segment are viewed. Accordingly, the business lines have been updated and historical balances adjusted to reflect our updated view of the business.
Table 4.2: Revenue by Contract Type
| For the Year Ended September 30,
| 2021 |  | 2020 |  | 2019
| (in thousands)
Performance-based | $ | 1,416,562 |  |  | $ | 1,109,153 |  |  | $ | 1,193,075 |
Cost-plus | 1,237,995 |  |  | 1,578,912 |  |  | 1,088,541 |
Fixed price | 553,645 |  |  | 471,505 |  |  | 441,146 |
Time and materials | 1,046,283 |  |  | 301,967 |  |  | 164,053 |
Total revenue | $ | 4,254,485 |  |  | $ | 3,461,537 |  |  | $ | 2,886,815 |
Table 4.3: Revenue by Customer Type
| For the Year Ended September 30,
| 2021 |  | 2020 |  | 2019
| (in thousands)
New York State government agencies | $ | 371,917 |  |  | $ | 355,282 |  |  | $ | 362,724 |
Other U.S. state government agencies | 1,282,638 |  |  | 988,945 |  |  | 804,213 |
Total U.S. state government agencies | 1,654,555 |  |  | 1,344,227 |  |  | 1,166,937 |
United States Federal Government agencies | 1,805,131 |  |  | 1,559,165 |  |  | 1,040,980 |
International government agencies | 663,180 |  |  | 467,185 |  |  | 558,599 |
Other, including local municipalities and commercial customers | 131,619 |  |  | 90,960 |  |  | 120,299 |
Total revenue | $ | 4,254,485 |  |  | $ | 3,461,537 |  |  | $ | 2,886,815 |
Table 4.4: Revenue by Geography
| For the Year Ended September 30,
| 2021 |  | 2020 |  | 2019
| (in thousands)
United States | $ | 3,555,394 |  |  | $ | 2,962,611 |  |  | $ | 2,287,685 |
United Kingdom | 286,432 |  |  | 246,334 |  |  | 293,695 |
Australia | 244,995 |  |  | 147,156 |  |  | 198,795 |
Rest of world | 167,664 |  |  | 105,436 |  |  | 106,640 |
Total revenue | $ | 4,254,485 |  |  | $ | 3,461,537 |  |  | $ | 2,886,815 |
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. As of September 30, 2021 and 2020, $10.4 million and $12.3 million, respectively, of our unbilled receivables related to amounts pursuant to contractual retainage provisions. •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. During the year ended September 30, 2021, we recognized revenue of $45.9 million included in our deferred revenue balances at September 30, 2020. During the year ended September 30, 2020, we recognized revenue of $54.6 million included in our deferred revenue balances at September 30, 2019. Contract estimates We are required to use estimates in recognizing revenue from some of our contracts. As discussed in "Note 2. Significant Accounting Policies," 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 collection 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. During the fiscal years ended September 30, 2021 and 2020, we recognized revenue from these performance-based fees of $104.7 million and $45.0 million, respectively. At September 30, 2021 and 2020, we recorded $48.7 million and $24.8 million, respectively, of these estimated outcome fees which will be collected only when we reach anticipated targets. This balance is included on our consolidated balance sheets within the related contract accounts. Changes to our estimates are recognized on a cumulative catch-up basis. For the year ended September 30, 2021 we reported a benefit to revenue and diluted earnings per share of $20.9 million and $0.24, respectively, from changes in estimates. The corresponding change in fiscal year 2020 was a reduction in revenue and diluted earnings per share of $9.2 million and $0.10, respectively. Remaining performance obligations As of September 30, 2021, we had approximately $550 million of remaining performance obligations. We anticipate that we will recognize revenue on approximately 49% 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.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 + Details
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