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Business Segments | 12 Months Ended
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Sep. 30, 2024
Segment Reporting [Abstract] |
Business Segments | BUSINESS SEGMENTS We conduct our operations through three business segments: U.S. Federal Services, U.S. Services, and Outside the U.S. Our operating segments represent the manner in which our Chief Executive Officer reviews our financial results. U.S. Federal Services Our U.S. Federal Services Segment delivers solutions that help various U.S. federal government agencies better deliver on their mission, including program operations and management, clinical services, and technology solutions. The segment also includes system and application development, Information Technology (IT) modernization, and maintenance services. Clinical services comprises appeals and assessments services, which includes managing the evaluation process for U.S. veterans and service members on behalf of the U.S. Department of Veterans Affairs (VA) and certain state-based assessments and appeals work that is part of the segment's heritage. Under Technology Consulting Services (TCS), the segment executes on its digital strategy to deliver technology solutions that advance agency missions, including the challenge to modernize, provide better customer experience, and drive process efficiencies. U.S. Services Our U.S. Services Segment provides a variety of services, such as program operations, clinical services, employment services and technology solutions and related consulting work for U.S. state and local government programs. These services support a variety of programs, including the programs under ACA, Medicaid, the Children's Health Insurance Program (CHIP), Temporary Assistance to Needy Families (TANF), and child support programs. In fiscal years 2020 through 2023, many programs in this segment were operating with depressed margins resulting from the pause in Medicaid redeterminations. The depressed margins resulted from reduced operating leverage in the segment as costs could not scale down at the same rate to meet lower demand due to the requirements to fulfill other obligations on these contracts. Fiscal year 2024 reflected a full period of volumes. The middle two quarters of the fiscal year experienced slightly elevated volumes from excess temporary work. This work was concluded by the last fiscal quarter with the segment’s margin appropriately aligned. Outside the U.S. Our Outside the U.S. Segment provides BPS and technology solutions for international governments. These services include health and disability assessments, program administration for employment services, wellbeing solutions and other job seeker-related services, digitally-enabled customer services, and advanced technologies for modernization. We support programs and deliver services in the United Kingdom, including the newly awarded Functional Assessment Services (FAS) contract, which replaced the Health Assessment Advisory Service (HAAS) contract, and the Restart employment program; and Australia, including Workforce Australia, and other employment support and job seeker services in a number of other countries.
Table 3.1: Results of Operation by Business Segment
| For the Year Ended September 30,
| 2024 |  | 2023 |  | 2022
| Amount |  | % (1) |  | Amount |  | % (1) |  | Amount |  | % (1)
| (dollars in thousands)
Revenue: |  |  |  |  |  |  |  |  |  |  |
U.S. Federal Services | $ | 2,737,244 |  |  |  |  | $ | 2,403,606 |  |  |  |  | $ | 2,259,744 |  |  |
U.S. Services | 1,911,813 |  |  |  |  | 1,812,069 |  |  |  |  | 1,607,612 |  |  |
Outside the U.S. | 657,140 |  |  |  |  | 689,053 |  |  |  |  | 763,662 |  |  |
Revenue | $ | 5,306,197 |  |  |  |  | $ | 4,904,728 |  |  |  |  | $ | 4,631,018 |  |  |
Gross profit: |  |  |  |  |  |  |  |  |  |  |
U.S. Federal Services | $ | 665,762 |  |  | 24.3 | % |  | $ | 557,886 |  |  | 23.2 | % |  | $ | 519,440 |  |  | 23.0 | %
U.S. Services | 479,787 |  |  | 25.1 | % |  | 377,541 |  |  | 20.8 | % |  | 343,004 |  |  | 21.3 | %
Outside the U.S. | 106,103 |  |  | 16.1 | % |  | 93,181 |  |  | 13.5 | % |  | 77,366 |  |  | 10.1 | %
Gross profit | $ | 1,251,652 |  |  | 23.6 | % |  | $ | 1,028,608 |  |  | 21.0 | % |  | $ | 939,810 |  |  | 20.3 | %
Selling, general, and administrative expenses: |  |  |  |  |  |  |  |  |  |  |
U.S. Federal Services | $ | 332,140 |  |  | 12.1 | % |  | $ | 308,197 |  |  | 12.8 | % |  | $ | 284,509 |  |  | 12.6 | %
U.S. Services | 232,805 |  |  | 12.2 | % |  | 194,991 |  |  | 10.8 | % |  | 160,902 |  |  | 10.0 | %
Outside the U.S. | 98,398 |  |  | 15.0 | % |  | 102,311 |  |  | 14.8 | % |  | 92,536 |  |  | 12.1 | %
Divestiture related charges (2) | 1,018 |  |  | NM |  | 3,751 |  |  | NM |  | — |  |  | NM
Other (4) | 7,222 |  |  | NM |  | 29,973 |  |  | NM |  | (3,454) |  |  | NM
Selling, general, and administrative expenses | $ | 671,583 |  |  | 12.7 | % |  | $ | 639,223 |  |  | 13.0 | % |  | $ | 534,493 |  |  | 11.5 | %
Operating income/(loss): |  |  |  |  |  |  |  |  |  |  |
U.S. Federal Services | $ | 333,622 |  |  | 12.2 | % |  | $ | 249,689 |  |  | 10.4 | % |  | $ | 234,931 |  |  | 10.4 | %
U.S. Services | 246,982 |  |  | 12.9 | % |  | 182,550 |  |  | 10.1 | % |  | 182,102 |  |  | 11.3 | %
Outside the U.S. | 7,705 |  |  | 1.2 | % |  | (9,130) |  |  | (1.3) | % |  | (15,170) |  |  | (2.0) | %
Amortization of intangible assets | (91,570) |  |  | NM |  | (94,591) |  |  | NM |  | (90,465) |  |  | NM
Divestiture related charges (2) | (1,018) |  |  | NM |  | (3,751) |  |  | NM |  | — |  |  | NM
Gain on sale of land and building (3) | — |  |  | NM |  | — |  |  | NM |  | 11,046 |  |  | NM
Other (4) | (7,222) |  |  | NM |  | (29,973) |  |  | NM |  | 3,454 |  |  | NM
Operating income | $ | 488,499 |  |  | 9.2 | % |  | $ | 294,794 |  |  | 6.0 | % |  | $ | 325,898 |  |  | 7.0 | %
Depreciation and amortization: |  |  |  |  |  |  |  |  |  |  |
U.S. Federal Services | $ | 10,503 |  |  | 0.4 | % |  | $ | 18,336 |  |  | 0.8 | % |  | $ | 12,332 |  |  | 0.5 | %
U.S. Services | 16,079 |  |  | 0.8 | % |  | 22,674 |  |  | 1.3 | % |  | 16,528 |  |  | 1.0 | %
Outside the U.S. | 7,375 |  |  | 1.1 | % |  | 13,715 |  |  | 2.0 | % |  | 13,470 |  |  | 1.8 | %
Depreciation and amortization | $ | 33,957 |  |  | 0.6 | % |  | $ | 54,725 |  |  | 1.1 | % |  | $ | 42,330 |  |  | 0.9 | %
(1)Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM." (2)During fiscal years 2024 and 2023, we sold a number of businesses in our Outside the U.S. Segment. Refer to "Note 7. Acquisitions and Divestitures" for more details. (3)During fiscal year 2022, we sold the land and building that held our corporate headquarters, resulting in a gain on sale of $11.0 million. (4)Other includes credits and costs that are not allocated to a particular segment. For the fiscal years 2024 and 2023, these charges include $2.9 million and $29.3 million, respectively, related to the costs of a previously disclosed cybersecurity incident. Other charges include direct costs of acquisitions. These costs are excluded from measuring each segment's operating performance.
Table 3.2: Assets by Segment
| As of September 30,
| 2024 |  | 2023
| (in thousands)
U.S. Federal Services | $ | 2,786,180 |  |  | $ | 2,716,367 |
U.S. Services | 692,446 |  |  | 780,737 |
Outside the U.S. | 291,608 |  |  | 278,289 |
Corporate | 361,274 |  |  | 210,404 |
Assets | $ | 4,131,508 |  |  | $ | 3,985,797 |
Our long-lived assets consist of property and equipment, capitalized software costs, operating lease right-of-use assets, and deferred compensation plan assets.
Table 3.3: Long-Lived Assets by Geography
| As of September 30,
| 2024 |  | 2023
| (in thousands)
United States | $ | 383,989 |  |  | $ | 313,830 |
Outside the US | 32,172 |  |  | 39,660 |
Total | $ | 416,161 |  |  | $ | 353,490 |

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