Maximus (MMS) 10-Q 6 Feb 20 2020 Q1 Quarterly report Financial data

Cover Page

Cover Page - shares	3 Months Ended
	Dec. 31, 2019	Feb. 03, 2020
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2019
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		63,943,497
Entity Central Index Key	0001032220
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Revenue	$ 818,229	$ 664,619
Cost of revenue	642,779	505,354
Gross profit	175,450	159,265
Selling, general and administrative expenses	87,227	79,671
Amortization of intangible assets	9,088	5,458
Operating income	79,135	74,136
Interest expense	484	625
Other income, net	719	2,045
Income before income taxes	79,370	75,556
Provision for income taxes	20,636	19,833
Net income	58,734	55,723
Loss attributable to noncontrolling interests	0	(190)
Net income attributable to MAXIMUS	$ 58,734	$ 55,913
Basic earnings per share (in dollars per share)	$ 0.91	$ 0.86
Diluted earnings per share (in dollars per share)	0.91	0.86
Dividends paid per share (in dollars per share)	$ 0.28	$ 0.25
Weighted average shares outstanding:
Basic (in shares)	64,597	64,827
Diluted (in shares)	64,758	64,977

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 58,734	$ 55,723
Foreign currency translation adjustments	6,893	(5,720)
Comprehensive income	65,627	50,003
Comprehensive loss attributable to noncontrolling interests	0	(190)
Comprehensive income attributable to MAXIMUS	$ 65,627	$ 50,193

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019
Current assets:
Cash and cash equivalents	$ 149,515	$ 105,565
Accounts receivable — billed and billable, net of reserves of $6,846 and $5,382	511,670	476,690
Accounts receivable — unbilled	123,420	123,884
Income taxes receivable	6,049	20,805
Prepaid expenses and other current assets	53,254	62,481
Total current assets	843,908	789,425
Property and equipment, net	92,377	99,589
Capitalized software, net	32,936	32,369
Operating lease right-of-use assets	200,690
Goodwill	586,659	584,469
Intangible assets, net	171,077	179,250
Deferred contract costs, net	18,224	18,921
Deferred compensation plan assets	35,151	32,908
Deferred income taxes	191	186
Other assets	8,578	8,615
Total assets	1,989,791	1,745,732
Current liabilities:
Accounts payable and accrued liabilities	174,707	177,786
Accrued compensation and benefits	104,263	106,789
Deferred revenue	42,756	43,344
Income taxes payable	5,563	13,952
Current portion of long-term debt and other borrowings	7,009	9,658
Operating lease liabilities	85,625
Other liabilities	12,785	12,709
Total current liabilities	432,708	364,238
Deferred revenue, less current portion	32,105	32,341
Deferred income taxes	47,344	46,560
Deferred compensation plan liabilities, less current portion	37,298	34,079
Operating lease liabilities, net of current portion	121,620
Other liabilities	19,711	20,313
Total liabilities	690,786	497,531
Shareholders’ equity:
Common stock, no par value; 100,000 shares authorized; 63,953 and 63,979 shares issued and outstanding at December 31, 2019, and September 30, 2019, at stated amount, respectively	504,184	498,433
Accumulated other comprehensive loss	(38,487)	(45,380)
Retained earnings	833,308	794,739
Total MAXIMUS shareholders' equity	1,299,005	1,247,792
Noncontrolling interests	0	409
Total equity	1,299,005	1,248,201
Total liabilities and equity	$ 1,989,791	$ 1,745,732

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable, current	$ 6,846	$ 5,382
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	63,953,000	63,979,000
Common stock, shares issued	63,953,000	63,979,000

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operations:
Net income	$ 58,734	$ 55,723
Adjustments to reconcile net income to cash flows from operations:
Depreciation and amortization of property and equipment and capitalized software	15,318	11,231
Amortization of intangible assets	9,088	5,458
Deferred income taxes	422	16,511
Stock compensation expense	5,397	4,971
Change in assets and liabilities net of effects of business combinations
Accounts receivable — billed and billable	(31,016)	(69,890)
Accounts receivable — unbilled	2,013	20,198
Prepaid expenses and other current assets	4,063	(5,691)
Deferred contract costs	848	(1,757)
Accounts payable and accrued liabilities	2,403	26,564
Accrued compensation and benefits	6,842	377
Deferred revenue	(1,345)	(372)
Income taxes	13,984	(3,848)
Operating lease right-of-use assets and liabilities	(1,622)
Other assets and liabilities	2,138	(135)
Cash flows from operations	87,267	59,340
Cash flows from investing activities:
Purchases of property and equipment and capitalized software costs	(10,487)	(9,973)
Acquisitions of businesses, net of cash acquired	0	(421,809)
Maturities of short-term investments	0	19,996
Other	25	47
Cash used in investing activities	(10,462)	(411,739)
Cash flows from financing activities:
Cash dividends paid to MAXIMUS shareholders	(17,913)	(16,033)
Purchases of MAXIMUS common stock	(1,898)	(40,984)
Tax withholding related to RSU vesting	(10,614)	(8,915)
Borrowings under credit facility and other loan agreements	83,419	195,100
Repayment of credit facility and other long-term debt	(86,301)	(70,033)
Other	(493)	(133)
Cash (used in)/provided by financing activities	(33,800)	59,002
Effect of exchange rate changes on cash and cash equivalents	1,452	(1,068)
Net increase/(decrease) in cash, cash equivalents and restricted cash	44,457	(294,465)
Cash, cash equivalents and restricted cash, beginning of period	116,492	356,559
Cash, cash equivalents and restricted cash, end of period	$ 160,949	$ 62,094

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Accumulated Other Comprehensive Income/(Loss)	Retained Earnings	Noncontrolling Interest
Balance (in shares) at Sep. 30, 2018		64,371
Balance at Sep. 30, 2018	$ 1,086,419	$ 487,539	$ (36,953)	$ 633,281	$ 2,552
Increase (Decrease) in Shareholders' Equity
Net income	55,723			55,913	(190)
Foreign currency translation	(5,720)		(5,720)
Cash dividends	(16,166)			(16,033)	(133)
Dividends on RSUs	0	$ 428		(428)
Purchases of common stock (in shares)		(654)
Purchases of common stock	(41,330)			(41,330)
Stock compensation expense	4,971	$ 4,971
Balance (in shares) at Dec. 31, 2018		63,717
Balance at Dec. 31, 2018	$ 1,117,379	$ 492,938	(42,673)	664,332	2,782
Balance (in shares) at Sep. 30, 2019	63,979	63,979
Balance at Sep. 30, 2019	$ 1,248,201	$ 498,433	(45,380)	794,739	409
Increase (Decrease) in Shareholders' Equity
Net income	58,734			58,734
Foreign currency translation	6,893		6,893
Cash dividends	(18,322)			(17,913)	(409)
Dividends on RSUs	0	$ 354		(354)
Purchases of common stock (in shares)		(26)
Purchases of common stock	(1,898)			(1,898)
Stock compensation expense	$ 5,397	$ 5,397
Balance (in shares) at Dec. 31, 2019	63,953	63,953
Balance at Dec. 31, 2019	$ 1,299,005	$ 504,184	$ (38,487)	$ 833,308	$ 0

Organization and Basis of Prese

Organization and Basis of Presentation	3 Months Ended
	Dec. 31, 2019
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 (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three months ended December 31, 2019, are not necessarily indicative of the results that may be expected for the full fiscal year. The balance sheet at September 30, 2019, 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. The preparation of these financial statements 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. On an ongoing basis, we evaluate our 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 on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. These financial statements should be read in conjunction with the consolidated audited financial statements and the notes thereto at September 30, 2019 and 2018, and for each of the three years ended September 30, 2019, included in our Annual Report on Form 10-K which was filed with the Securities and Exchange Commission on November 26, 2019. Changes in financial reporting Leases Effective October 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842) . The new standard requires that assets and liabilities arising under leases be recognized on the balance sheet, except for those with an initial term of less than 12 months. We adopted this standard using a modified retrospective approach. Accordingly, we did not recast prior period financial information. Certain elections were made in adopting the standard. • We elected to use the package of practical expedients which, among other things, allows us to not reassess historical lease classification. • We do not separate lease and non-lease components for all classes of leases, which allows us to account for a lease as a single component. • We used the optional transition method, which did not require us to recast our comparative periods. • We did not use the hindsight practical expedients, which would have allowed us to use hindsight in determining the reasonably certain lease term. • We did not adjust our accounting for leases with an initial term of twelve months or less. Upon adopting Topic 842, we recognized a lease liability of $214.5 million, reflecting the present value of the future remaining minimum lease payments. Changes to our opening balance sheet are summarized below. There was no cumulative impact to our retained earnings and the changes did not cause any material changes in our statements of operations or our statements of cash flows. The adoption of Topic 842 does not affect our compliance with our existing contracts, including our credit facility. (dollars in thousands) Balance at September 30, 2019 Adjustments due to adoption of new standard Opening balance at October 1, 2019 Assets Prepaid expenses and other current assets $ 62,481 $ (6,131) $ 56,350 Operating lease right-of-use assets — 206,314 206,314 Liabilities and shareholders' equity Accounts payable and accrued expenses 177,786 (5,250) 172,536 Operating lease liabilities — 88,276 88,276 Other current liabilities 12,709 (648) 12,061 Operating lease liabilities, net of current portion — 126,197 126,197 Other long-term liabilities 20,313 (8,392) 11,921 At the adoption of Topic 842 , the Company recognized deferred tax assets and liabilities corresponding to the operating lease liabilities and operating right-of-use assets, respectively. These balances offset each other and no net effect resulted from this change. Additional information and disclosures relating to this change are included within "Note 3. Leases." Forthcoming changes 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. We will adopt this guidance on October 1, 2020. The guidance may be adopted early and we may adopt using either a prospective or retrospective methodology. We are currently assessing the future impact of this update on its consolidated financial statements and related disclosures. 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. We will adopt this guidance on October 1, 2020 and any changes will be recorded as a cumulative adjustment to retained earnings. We are still assessing the effect of this standard on 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 will adopt this guidance on October 1, 2020. The effect of this new standard will depend upon the outcome of future goodwill impairment tests. Other recent accounting pronouncements are not expected to have a material effect on our financial statements.

Segment Information

Segment Information	3 Months Ended
	Dec. 31, 2019
Segment Reporting [Abstract]
Segment Information	Segment Information The table below provides certain financial information for each of our business segments. We operate our business through three segments. • Our U.S. Health and Human Services Segment provides a variety of business process services such as program administration, appeals and assessments services, 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 and the Children’s Health Insurance Program (CHIP). We also serve as administrators in state-based welfare-to-work and child support programs. • Our U.S. Federal Services Segment provides business process solutions, including program administration, appeals and assessment services, as well as system and software development and maintenance services for various U.S. federal civilian programs. This 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. • Our Outside the U.S. Segment provides business process solutions for governments and commercial clients outside the U.S., including health and disability assessments, program administration and case management for employment services and other work-support programs. We deliver services in the United Kingdom, 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; Saudi Arabia and Singapore. Three Months Ended December 31, (dollars in thousands) 2019 % (1) 2018 % (1) Revenue: U.S. Health & Human Services $ 312,281 $ 294,213 U.S. Federal Services 366,571 216,987 Outside the U.S. 139,377 153,419 Total $ 818,229 $ 664,619 Gross profit: U.S. Health & Human Services $ 89,590 28.7% $ 88,031 29.9% U.S. Federal Services 70,821 19.3% 47,985 22.1% Outside the U.S. 15,039 10.8% 23,249 15.2% Total $ 175,450 21.4% $ 159,265 24.0% Selling, general & administrative expense: U.S. Health & Human Services $ 31,398 10.1% $ 32,139 10.9% U.S. Federal Services 39,239 10.7% 26,632 12.3% Outside the U.S. 16,053 11.5% 18,808 12.3% Other (2) 537 NM 2,092 NM Total $ 87,227 10.7% $ 79,671 12.0% Operating income: U.S. Health & Human Services $ 58,192 18.6% $ 55,892 19.0% U.S. Federal Services 31,582 8.6% 21,353 9.8% Outside the U.S. (1,014) (0.7)% 4,441 2.9% Amortization of intangible assets (9,088) NM (5,458) NM Other (537) NM (2,092) NM Total $ 79,135 9.7% $ 74,136 11.2% (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. In the three months ended December 31, 2018, these other costs include $2.7 million of costs related to the acquisition of the citizen engagement centers business. Identifiable assets for the segments are shown below (in thousands): December 31, 2019 September 30, 2019 U.S. Health & Human Services $ 584,038 $ 500,641 U.S. Federal Services 922,613 795,553 Outside the U.S. 245,289 234,769 Corporate 237,851 214,769 Total $ 1,989,791 $ 1,745,732

Leases

Leases	3 Months Ended
	Dec. 31, 2019
Leases [Abstract]
Leases	Leases Beginning October 1, 2019, we identify contracts which are, or contain, leases where a contract allows us the right to control identified property or equipment for a period of time in return for consideration. Our leases are typically for office space or facilities, as well as some equipment leases. Where contracts include both lease and non-lease components, we do not typically separate the non-lease components in our accounting. At the inception of a lease, we recognize a liability for future minimum lease payments based upon the present value of those payments. • In identifying our future minimum lease payments, we do not include variable lease costs, such as those for maintenance or utilities. These are recorded as lease expenses in the period in which they are incurred. • In identifying future lease payments, we do not include short-term leases, identified as those with an initial term of twelve months or less. • Lease options are included within our lease liability only where it is reasonably certain that we will utilize those periods of the lease and incur the related costs. • In calculating the fair value of our lease liability, we utilize an estimate of our collateralized incremental borrowing rate. This estimate is based upon publicly-available information adjusted for company-specific, country-specific and lease-specific factors. The weighted average incremental borrowing rate utilized at December 31, 2019 is 3.6%. Over the course of a lease, the lease liability is reduced as scheduled lease payments are made and increased as the implied interest charges are added. Our right-of-use asset is based upon the lease liability at the contract inception but is adjusted over the life of the lease by lease prepayments, additional costs or lease incentives. The right-of-use asset is amortized on a straight-line basis over the lease term, offset by the interest accretion recorded on the lease liability. Lease expense is recorded within our consolidated statements of operations based upon the nature of the assets. Where assets are used to directly serve our customers, such as facilities dedicated to customer contracts, lease costs are recorded in "cost of revenue". Facilities and assets which serve management and support functions are expensed through "selling, general and administrative expenses". Costs recorded in the three months ended December 31, 2019 are summarized below. (dollars in thousands) Three months ended December 31, 2019 Operating lease cost $ 25,250 Short-term lease cost 2,110 Variable lease cost 3,334 Total operating lease costs $ 30,694 Future minimum lease payments for noncancelable operating leases as of December 31, 2019 are shown below. (dollars in thousands) Office space Equipment Total For the years ended September 30, Remainder of 2020 $ 63,960 $ 6,336 $ 70,296 2021 58,107 6,812 64,919 2022 38,047 2,904 40,951 2023 25,691 124 25,815 2024 11,181 77 11,258 Thereafter 7,067 — 7,067 Total minimum lease payments $ 204,053 $ 16,253 $ 220,306 Less imputed interest (11,269) (1,792) (13,061) Total lease liabilities $ 192,784 $ 14,461 $ 207,245 Our weighted average remaining lease term at December 31, 2019 is 3.1 years. For the three months ended December 31, 2019, we made cash payments of $28.1 million for amounts included in our lease liabilities. New or amended leases resulted in additional right-of-use assets of $17.3 million.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Dec. 31, 2019
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 (dollars in thousands) Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 Program administration $ 236,907 $ 218,973 Assessments and appeals 33,831 37,221 Workforce and children services 29,386 23,903 Other 12,157 14,116 Total U.S. Health and Human Services 312,281 294,213 Program administration 281,688 140,121 Technology solutions 43,606 38,883 Assessments and appeals 41,277 37,983 Total U.S. Federal Services 366,571 216,987 Workforce and children services 57,239 73,278 Assessments and appeals 62,643 62,310 Program administration 17,094 15,320 Other 2,401 2,511 Total Outside the U.S. 139,377 153,419 Total revenue $ 818,229 $ 664,619 By contract type (dollars in thousands) Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 Performance-based $ 292,758 $ 312,887 Cost-plus 362,811 175,298 Fixed price 119,216 147,151 Time and materials 43,444 29,283 Total revenue $ 818,229 $ 664,619 By customer type (dollars in thousands) Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 New York State government agencies $ 97,223 $ 91,712 Other U.S. state government agencies 209,886 198,902 Total U.S. state government agencies 307,109 290,614 United States Federal Government agencies 351,833 198,278 International government agencies 130,816 142,781 Other, including local municipalities and commercial customers 28,471 32,946 Total revenue $ 818,229 $ 664,619 By geography (dollars in thousands) Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 United States of America $ 678,852 $ 511,200 United Kingdom 73,002 73,418 Australia 37,435 53,373 Rest of world 28,940 26,628 Total revenue $ 818,229 $ 664,619 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. Funds 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 will 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 rate is higher than our actual rate, we record a liability. • Certain contracts include retainage balances, whereby revenue is earned but cash payments are held back by the customer for a period of time, typically to allow the customer to evaluate the quality of our performance. This balance is classified as accounts receivable - unbilled until restrictions on billing have been 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 welfare-to-work contracts in the Outside the U.S. Segment, include payments for outcomes, such as job retention, which 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 three months ended December 31, 2019 and 2018, we recognized revenue of $18.0 million and $21.8 million included in our deferred revenue balances at September 30, 2019 and 2018, respectively. Contract estimates We are required to use estimates in recognizing certain revenue. • 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 welfare-to-work 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. • 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. Where we have changes to our estimates, these are recognized on a cumulative catch-up basis. In the three months ended December 31, 2019 and 2018, we reported reductions in revenue of $1.4 million and $1.5 million from changes in estimates, 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 which 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. In the three months ended December 31, 2019 and 2018, we deferred $1.3 million and $3.1 million of costs, respectively, and recorded amortization expense of $2.2 million and $1.3 million, respectively. This amortization was recorded within our "cost of revenue" on our consolidated statements of operations. Remaining performance obligations At December 31, 2019, we had approximately $300 million of remaining performance obligations. We anticipate that we will recognize revenue on approximately 60% of this balance within the next twelve 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	3 Months Ended
	Dec. 31, 2019
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 December 31, (shares in thousands) 2019 2018 Basic weighted average shares outstanding 64,597 64,827 Dilutive effect of unvested RSUs 161 150 Denominator for diluted earnings per share 64,758 64,977 Our dilutive earnings per share for the three months ended December 31, 2019 and 2018, excludes any effect from approximately 274,000 and 282,000 unvested restricted stock units, respectively, as adding them to our calculation would have been antidilutive.

Acquisitions

Acquisitions	3 Months Ended
	Dec. 31, 2019
Business Combinations [Abstract]
Acquisitions	Acquisitions On November 16, 2018, we acquired General Dynamics Information Technology's citizen engagement centers business for $430.7 million. This acquisition strengthens our position in the administration of federal government programs and the business was integrated into our U.S. Federal Services Segment. We completed our allocation of the purchase price to the assets acquired and liabilities assumed in September 2019, including goodwill of $184.6 million and intangible assets of $122.3 million. On August 16, 2019, we acquired 100% of the share capital of GT Hiring Solutions (2005) Inc. ("GT Hiring") for a purchase price estimated to be $6.1 million (8.1 million Canadian Dollars). The purchase price is subject to a net working capital true-up. GT Hiring provides employment services in British Columbia. We acquired GT Hiring to enhance the reach and capabilities of our Canadian employment services and, accordingly, the business has been integrated into our Outside the U.S. Segment. We are still in the process of finalizing the purchase price and the allocation of assets acquired and liabilities assumed. We recorded estimated goodwill and intangible assets balances of $1.7 million and $2.7 million, respectively, related to this acquisition. The goodwill represents the assembled workforce and enhanced knowledge, experience and reputation we have obtained from the acquisition and will be deductible for tax purposes. The intangible assets represent customer relationships, which will be amortized over seven years.

Supplemental Disclosures

Supplemental Disclosures	3 Months Ended
	Dec. 31, 2019
Supplemental Cash Flow Elements [Abstract]
Supplemental Disclosures	Supplemental Disclosures Under a resolution adopted in June 2018, the Board of Directors authorized the purchase, at management's discretion, of up to $200 million of our common stock. During the three months ended December 31, 2019, we purchased 26,000 of our common shares at a cost of $1.9 million. During the three months ended December 31, 2018, we acquired approximately 654,000 common shares at a cost of $41.3 million. At December 31, 2019, $144.1 million remained available for future stock purchases. Subsequent to December 31, 2019, we have purchased a further 30,000 shares at a cost of $2.2 million. During the three months ended December 31, 2019, we granted 287,000 restricted stock units to our board of directors and employees. These awards will vest ratably over one five 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, and the life insurance investments at cash surrender value; changes in value are reported in our consolidated statements of operations. At December 31, 2019, the deferred compensation plan held $22.1 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 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 December 31, 2019. 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 assets" on our balance sheet 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 (dollars in thousands) December 31, September 30, 2019 December 31, September 30, 2018 Cash and cash equivalents $ 149,515 $ 105,565 $ 54,736 $ 349,245 Restricted cash (recorded within "other current assets") 11,434 10,927 7,358 7,314 Cash, cash equivalents and restricted cash 160,949 116,492 62,094 356,559 During the three months ended December 31, 2019 and 2018, we made interest payments of $0.2 million and $0.2 million, respectively. During the three months ended December 31, 2019 and 2018, we made income tax payments of $6.3 million and $7.1 million, respectively.

Litigation

Litigation	3 Months Ended
	Dec. 31, 2019
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 the United States Federal Government, 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 A state Medicaid agency has been notified of two proposed disallowances by the Centers for Medicare and Medicaid Services (CMS) 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. No legal action has been initiated against us.

Subsequent Events

Subsequent Events	3 Months Ended
	Dec. 31, 2019
Subsequent Events [Abstract]
Subsequent Event	Subsequent EventsOn January 3, 2020, 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 February 28, 2020, to shareholders of record on February 14, 2020. Based upon the number of shares outstanding, we anticipate a cash payment of approximately $18 million.

Organization and Basis of Pre_2

Organization and Basis of Presentation (Policies)	3 Months Ended
	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Accounting	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 (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three months ended December 31, 2019, are not necessarily indicative of the results that may be expected for the full fiscal year. The balance sheet at September 30, 2019, 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.
Use of Estimates	The preparation of these financial statements 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. On an ongoing basis, we evaluate our 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 on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.
Leases	Effective October 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842) . The new standard requires that assets and liabilities arising under leases be recognized on the balance sheet, except for those with an initial term of less than 12 months. We adopted this standard using a modified retrospective approach. Accordingly, we did not recast prior period financial information. Certain elections were made in adopting the standard. • We elected to use the package of practical expedients which, among other things, allows us to not reassess historical lease classification. • We do not separate lease and non-lease components for all classes of leases, which allows us to account for a lease as a single component. • We used the optional transition method, which did not require us to recast our comparative periods. • We did not use the hindsight practical expedients, which would have allowed us to use hindsight in determining the reasonably certain lease term. • We did not adjust our accounting for leases with an initial term of twelve months or less.
New accounting pronouncements	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. We will adopt this guidance on October 1, 2020. The guidance may be adopted early and we may adopt using either a prospective or retrospective methodology. We are currently assessing the future impact of this update on its consolidated financial statements and related disclosures. 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. We will adopt this guidance on October 1, 2020 and any changes will be recorded as a cumulative adjustment to retained earnings. We are still assessing the effect of this standard on 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 will adopt this guidance on October 1, 2020. The effect of this new standard will depend upon the outcome of future goodwill impairment tests. Other recent accounting pronouncements are not expected to have a material effect on our financial statements.

Organization and Basis of Pre_3

Organization and Basis of Presentation (Tables)	3 Months Ended
	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of New Accounting Pronouncements and Changes in Accounting Principles	Changes to our opening balance sheet are summarized below. There was no cumulative impact to our retained earnings and the changes did not cause any material changes in our statements of operations or our statements of cash flows. The adoption of Topic 842 does not affect our compliance with our existing contracts, including our credit facility. (dollars in thousands) Balance at September 30, 2019 Adjustments due to adoption of new standard Opening balance at October 1, 2019 Assets Prepaid expenses and other current assets $ 62,481 $ (6,131) $ 56,350 Operating lease right-of-use assets — 206,314 206,314 Liabilities and shareholders' equity Accounts payable and accrued expenses 177,786 (5,250) 172,536 Operating lease liabilities — 88,276 88,276 Other current liabilities 12,709 (648) 12,061 Operating lease liabilities, net of current portion — 126,197 126,197 Other long-term liabilities 20,313 (8,392) 11,921

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Dec. 31, 2019
Segment Reporting [Abstract]
Schedule of financial information for each of the Company's business segments	The table below provides certain financial information for each of our business segments. We operate our business through three segments. • Our U.S. Health and Human Services Segment provides a variety of business process services such as program administration, appeals and assessments services, 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 and the Children’s Health Insurance Program (CHIP). We also serve as administrators in state-based welfare-to-work and child support programs. • Our U.S. Federal Services Segment provides business process solutions, including program administration, appeals and assessment services, as well as system and software development and maintenance services for various U.S. federal civilian programs. This 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. • Our Outside the U.S. Segment provides business process solutions for governments and commercial clients outside the U.S., including health and disability assessments, program administration and case management for employment services and other work-support programs. We deliver services in the United Kingdom, 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; Saudi Arabia and Singapore. Three Months Ended December 31, (dollars in thousands) 2019 % (1) 2018 % (1) Revenue: U.S. Health & Human Services $ 312,281 $ 294,213 U.S. Federal Services 366,571 216,987 Outside the U.S. 139,377 153,419 Total $ 818,229 $ 664,619 Gross profit: U.S. Health & Human Services $ 89,590 28.7% $ 88,031 29.9% U.S. Federal Services 70,821 19.3% 47,985 22.1% Outside the U.S. 15,039 10.8% 23,249 15.2% Total $ 175,450 21.4% $ 159,265 24.0% Selling, general & administrative expense: U.S. Health & Human Services $ 31,398 10.1% $ 32,139 10.9% U.S. Federal Services 39,239 10.7% 26,632 12.3% Outside the U.S. 16,053 11.5% 18,808 12.3% Other (2) 537 NM 2,092 NM Total $ 87,227 10.7% $ 79,671 12.0% Operating income: U.S. Health & Human Services $ 58,192 18.6% $ 55,892 19.0% U.S. Federal Services 31,582 8.6% 21,353 9.8% Outside the U.S. (1,014) (0.7)% 4,441 2.9% Amortization of intangible assets (9,088) NM (5,458) NM Other (537) NM (2,092) NM Total $ 79,135 9.7% $ 74,136 11.2% (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. In the three months ended December 31, 2018, these other costs include $2.7 million of costs related to the acquisition of the citizen engagement centers business.
Schedule of identifiable assets by segment	Identifiable assets for the segments are shown below (in thousands): December 31, 2019 September 30, 2019 U.S. Health & Human Services $ 584,038 $ 500,641 U.S. Federal Services 922,613 795,553 Outside the U.S. 245,289 234,769 Corporate 237,851 214,769 Total $ 1,989,791 $ 1,745,732

Leases (Tables)

Leases (Tables)	3 Months Ended
	Dec. 31, 2019
Leases [Abstract]
Lease Costs	Costs recorded in the three months ended December 31, 2019 are summarized below. (dollars in thousands) Three months ended December 31, 2019 Operating lease cost $ 25,250 Short-term lease cost 2,110 Variable lease cost 3,334 Total operating lease costs $ 30,694
Future Minimum Lease Payments	Future minimum lease payments for noncancelable operating leases as of December 31, 2019 are shown below. (dollars in thousands) Office space Equipment Total For the years ended September 30, Remainder of 2020 $ 63,960 $ 6,336 $ 70,296 2021 58,107 6,812 64,919 2022 38,047 2,904 40,951 2023 25,691 124 25,815 2024 11,181 77 11,258 Thereafter 7,067 — 7,067 Total minimum lease payments $ 204,053 $ 16,253 $ 220,306 Less imputed interest (11,269) (1,792) (13,061) Total lease liabilities $ 192,784 $ 14,461 $ 207,245

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	By operating segment and service (dollars in thousands) Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 Program administration $ 236,907 $ 218,973 Assessments and appeals 33,831 37,221 Workforce and children services 29,386 23,903 Other 12,157 14,116 Total U.S. Health and Human Services 312,281 294,213 Program administration 281,688 140,121 Technology solutions 43,606 38,883 Assessments and appeals 41,277 37,983 Total U.S. Federal Services 366,571 216,987 Workforce and children services 57,239 73,278 Assessments and appeals 62,643 62,310 Program administration 17,094 15,320 Other 2,401 2,511 Total Outside the U.S. 139,377 153,419 Total revenue $ 818,229 $ 664,619 By contract type (dollars in thousands) Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 Performance-based $ 292,758 $ 312,887 Cost-plus 362,811 175,298 Fixed price 119,216 147,151 Time and materials 43,444 29,283 Total revenue $ 818,229 $ 664,619 By customer type (dollars in thousands) Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 New York State government agencies $ 97,223 $ 91,712 Other U.S. state government agencies 209,886 198,902 Total U.S. state government agencies 307,109 290,614 United States Federal Government agencies 351,833 198,278 International government agencies 130,816 142,781 Other, including local municipalities and commercial customers 28,471 32,946 Total revenue $ 818,229 $ 664,619 By geography (dollars in thousands) Three Months Ended December 31, 2019 Three Months Ended December 31, 2018 United States of America $ 678,852 $ 511,200 United Kingdom 73,002 73,418 Australia 37,435 53,373 Rest of world 28,940 26,628 Total revenue $ 818,229 $ 664,619

Earnings Per Share (Tables)

Earnings Per Share (Tables)	3 Months Ended
	Dec. 31, 2019
Earnings Per Share [Abstract]
Schedule of the components of basic and diluted earnings per share	The weighted average number of shares outstanding used to compute earnings per share was as follows: Three Months Ended December 31, (shares in thousands) 2019 2018 Basic weighted average shares outstanding 64,597 64,827 Dilutive effect of unvested RSUs 161 150 Denominator for diluted earnings per share 64,758 64,977

Supplemental Disclosures (Table

Supplemental Disclosures (Tables)	3 Months Ended
	Dec. 31, 2019
Supplemental Cash Flow Elements [Abstract]
Schedule of Cash and Cash Equivalents	A reconciliation of these balances is shown below. Balance as of (dollars in thousands) December 31, September 30, 2019 December 31, September 30, 2018 Cash and cash equivalents $ 149,515 $ 105,565 $ 54,736 $ 349,245 Restricted cash (recorded within "other current assets") 11,434 10,927 7,358 7,314 Cash, cash equivalents and restricted cash 160,949 116,492 62,094 356,559
Restrictions on Cash and Cash Equivalents	A reconciliation of these balances is shown below. Balance as of (dollars in thousands) December 31, September 30, 2019 December 31, September 30, 2018 Cash and cash equivalents $ 149,515 $ 105,565 $ 54,736 $ 349,245 Restricted cash (recorded within "other current assets") 11,434 10,927 7,358 7,314 Cash, cash equivalents and restricted cash 160,949 116,492 62,094 356,559

Organization and Basis of Pre_4

Organization and Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Oct. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total lease liabilities	$ 207,245
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total lease liabilities		$ 214,500

Organization and Basis of Pre_5

Organization and Basis of Presentation - Changes Due to Adoption of Topic 842 (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Oct. 01, 2019	Sep. 30, 2019
ASSETS
Prepaid expenses and other current assets	$ 53,254	$ 56,350	$ 62,481
Operating lease right-of-use assets	200,690	206,314
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and accrued liabilities	174,707	172,536	177,786
Operating lease liabilities	85,625	88,276
Other liabilities	12,785	12,061	12,709
Operating lease liabilities, net of current portion	121,620	126,197
Other liabilities	$ 19,711	11,921	$ 20,313
Accounting Standards Update 2016-02
ASSETS
Prepaid expenses and other current assets		(6,131)
Operating lease right-of-use assets		206,314
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and accrued liabilities		(5,250)
Operating lease liabilities		88,276
Other liabilities		(648)
Operating lease liabilities, net of current portion		126,197
Other liabilities		$ (8,392)

Segment Information - Financial

Segment Information - Financial information by segment (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2019USD ($)segment	Dec. 31, 2018USD ($)
Financial information for each of the Company's business segments
Number of operating segments | segment	3
Revenue:
Revenue	$ 818,229	$ 664,619
Gross profit:
Gross profit	$ 175,450	$ 159,265
Gross profit (as a percent)	21.40%	24.00%
Selling, general and administrative expense:
Selling, general and administrative expenses	$ 87,227	$ 79,671
Selling, general, and administrative expense (as a percent)	10.70%	12.00%
Operating income:
Operating income	$ 79,135	$ 74,136
Operating income (as a percent)	9.70%	11.20%
Amortization of intangible assets	$ (9,088)	$ (5,458)
General Dynamics Information Technology's Citizen Engagement Centers
Operating income:
Business acquisition costs	2,700
Segment Reconciling Items
Selling, general and administrative expense:
Selling, general and administrative expenses	537	2,092
Operating income:
Amortization of intangible assets	(9,088)	(5,458)
Other operating income (loss)	(537)	(2,092)
U.S. Health & Human Services
Revenue:
Revenue	312,281	294,213
U.S. Health & Human Services | Operating Segments
Revenue:
Revenue	312,281	294,213
Gross profit:
Gross profit	$ 89,590	$ 88,031
Gross profit (as a percent)	28.70%	29.90%
Selling, general and administrative expense:
Selling, general and administrative expenses	$ 31,398	$ 32,139
Selling, general, and administrative expense (as a percent)	10.10%	10.90%
Operating income:
Operating income	$ 58,192	$ 55,892
Operating income (as a percent)	18.60%	19.00%
U.S. Federal Services
Revenue:
Revenue	$ 366,571	$ 216,987
U.S. Federal Services | Operating Segments
Revenue:
Revenue	366,571	216,987
Gross profit:
Gross profit	$ 70,821	$ 47,985
Gross profit (as a percent)	19.30%	22.10%
Selling, general and administrative expense:
Selling, general and administrative expenses	$ 39,239	$ 26,632
Selling, general, and administrative expense (as a percent)	10.70%	12.30%
Operating income:
Operating income	$ 31,582	$ 21,353
Operating income (as a percent)	8.60%	9.80%
Outside the U.S.
Revenue:
Revenue	$ 139,377	$ 153,419
Outside the U.S. | Operating Segments
Revenue:
Revenue	139,377	153,419
Gross profit:
Gross profit	$ 15,039	$ 23,249
Gross profit (as a percent)	10.80%	15.20%
Selling, general and administrative expense:
Selling, general and administrative expenses	$ 16,053	$ 18,808
Selling, general, and administrative expense (as a percent)	11.50%	12.30%
Operating income:
Operating income	$ (1,014)	$ 4,441
Operating income (as a percent)	(0.70%)	2.90%

Segment Information - Identifia

Segment Information - Identifiable assets (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019
Financial information for each of the Company's business segments
Assets	$ 1,989,791	$ 1,745,732
Other
Financial information for each of the Company's business segments
Assets	237,851	214,769
U.S. Health & Human Services | Operating Segments
Financial information for each of the Company's business segments
Assets	584,038	500,641
U.S. Federal Services | Operating Segments
Financial information for each of the Company's business segments
Assets	922,613	795,553
Outside the U.S. | Operating Segments
Financial information for each of the Company's business segments
Assets	$ 245,289	$ 234,769

Leases - Narrative (Details)

Leases - Narrative (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2019USD ($)
Leases [Abstract]
Weighted average incremental borrowing rate	3.60%
Weighted average remaining lease term	3 years 1 month 6 days
Operating lease payments	$ 28,100
Operating lease liabilities arising from new or remeasured right-of-use assets	$ 17,300

Leases - Lease Costs (Details)

Leases - Lease Costs (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2019USD ($)
Leases [Abstract]
Operating lease cost	$ 25,250
Short-term lease cost	2,110
Variable lease cost	3,334
Total operating lease costs	$ 30,694

Leases - Remaining Lease Paymen

Leases - Remaining Lease Payments (Details) $ in Thousands	Dec. 31, 2019USD ($)
Lessee, Lease, Description [Line Items]
Remainder of 2020	$ 70,296
2021	64,919
2022	40,951
2023	25,815
2024	11,258
Thereafter	7,067
Total minimum lease payments	220,306
Less imputed interest	(13,061)
Total lease liabilities	207,245
Office space
Lessee, Lease, Description [Line Items]
Remainder of 2020	63,960
2021	58,107
2022	38,047
2023	25,691
2024	11,181
Thereafter	7,067
Total minimum lease payments	204,053
Less imputed interest	(11,269)
Total lease liabilities	192,784
Equipment
Lessee, Lease, Description [Line Items]
Remainder of 2020	6,336
2021	6,812
2022	2,904
2023	124
2024	77
Thereafter	0
Total minimum lease payments	16,253
Less imputed interest	(1,792)
Total lease liabilities	$ 14,461

Revenue Recognition - Disaggreg

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 818,229	$ 664,619
United States of America
Disaggregation of Revenue [Line Items]
Revenue	678,852	511,200
United Kingdom
Disaggregation of Revenue [Line Items]
Revenue	73,002	73,418
Australia
Disaggregation of Revenue [Line Items]
Revenue	37,435	53,373
Rest of world
Disaggregation of Revenue [Line Items]
Revenue	28,940	26,628
Total U.S. state government agencies
Disaggregation of Revenue [Line Items]
Revenue	307,109	290,614
New York State government agencies
Disaggregation of Revenue [Line Items]
Revenue	97,223	91,712
Other U.S. state government agencies
Disaggregation of Revenue [Line Items]
Revenue	209,886	198,902
United States Federal Government agencies
Disaggregation of Revenue [Line Items]
Revenue	351,833	198,278
International government agencies
Disaggregation of Revenue [Line Items]
Revenue	130,816	142,781
Other, including local municipalities and commercial customers
Disaggregation of Revenue [Line Items]
Revenue	28,471	32,946
Performance-based
Disaggregation of Revenue [Line Items]
Revenue	292,758	312,887
Cost-plus
Disaggregation of Revenue [Line Items]
Revenue	362,811	175,298
Fixed price
Disaggregation of Revenue [Line Items]
Revenue	119,216	147,151
Time and materials
Disaggregation of Revenue [Line Items]
Revenue	43,444	29,283
U.S. Health & Human Services
Disaggregation of Revenue [Line Items]
Revenue	312,281	294,213
U.S. Federal Services
Disaggregation of Revenue [Line Items]
Revenue	366,571	216,987
Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	139,377	153,419
Program administration | U.S. Health & Human Services
Disaggregation of Revenue [Line Items]
Revenue	236,907	218,973
Program administration | U.S. Federal Services
Disaggregation of Revenue [Line Items]
Revenue	281,688	140,121
Program administration | Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	17,094	15,320
Technology solutions | U.S. Federal Services
Disaggregation of Revenue [Line Items]
Revenue	43,606	38,883
Assessments and appeals | U.S. Health & Human Services
Disaggregation of Revenue [Line Items]
Revenue	33,831	37,221
Assessments and appeals | U.S. Federal Services
Disaggregation of Revenue [Line Items]
Revenue	41,277	37,983
Assessments and appeals | Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	62,643	62,310
Workforce and children services | U.S. Health & Human Services
Disaggregation of Revenue [Line Items]
Revenue	29,386	23,903
Workforce and children services | Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	57,239	73,278
Other | U.S. Health & Human Services
Disaggregation of Revenue [Line Items]
Revenue	12,157	14,116
Other | Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	$ 2,401	$ 2,511

Revenue Recognition - Narrative

Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Revenue from Contract with Customer [Abstract]
Deferred revenue, revenue recognized	$ 18	$ 21.8
Cumulative catch-up adjustment to revenue from change in estimates	(1.4)	(1.5)
Deferred contract costs	1.3	3.1
Amortization of deferred contract costs	$ 2.2	$ 1.3

Revenue Recognition - Remaining

Revenue Recognition - Remaining Performance Obligation (Details) $ in Millions	Dec. 31, 2019USD ($)
Revenue from Contract with Customer [Abstract]
Revenue, remaining performance obligation, amount	$ 300
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	60.00%
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
	Dec. 31, 2019	Dec. 31, 2018
Earnings Per Share [Abstract]
Basic weighted average shares outstanding (in shares)	64,597	64,827
Dilutive effect of unvested RSUs (in shares)	161	150
Denominator for diluted earnings per share (in shares)	64,758	64,977
Antidilutive securities excluded from computation of earnings per share (in shares)	274	282

Acquisitions (Details)

Acquisitions (Details) $ in Thousands, $ in Millions	Aug. 16, 2019USD ($)	Aug. 16, 2019CAD ($)	Nov. 16, 2018USD ($)	Dec. 31, 2019USD ($)	Sep. 30, 2019USD ($)
Business Acquisition [Line Items]
Goodwill				$ 586,659	$ 584,469
GT Hiring Solutions Inc
Business Acquisition [Line Items]
Cash payment to acquire business	$ 6,100	$ 8.1
Goodwill	1,700
Intaigible assets acquired	$ 2,700
Percentage of voting equity interests acquired at the acquisition date in the business combination	100.00%
Useful life	7 years	7 years
General Dynamics Information Technology's Citizen Engagement Centers
Business Acquisition [Line Items]
Cash payment to acquire business			$ 430,700
Goodwill			184,600
Intaigible assets acquired			$ 122,300

Supplemental Disclosures - Narr

Supplemental Disclosures - Narrative (Details) - USD ($)	1 Months Ended	3 Months Ended
	Feb. 06, 2020	Dec. 31, 2019	Dec. 31, 2018
Payments for Repurchase of Equity [Abstract]
Repurchases of common stock		$ 1,898,000	$ 41,330,000
Investments in mutual funds		22,100,000
Interest paid		200,000	200,000
Income taxes paid		$ 6,300,000	$ 7,100,000
Restricted Stock Units (RSUs)
Payments for Repurchase of Equity [Abstract]
Granted (in shares)		287,000
Vesting period		5 years
Restricted Stock Units (RSUs) | Member of Board of Directors
Payments for Repurchase of Equity [Abstract]
Vesting period		1 year
Common Stock
Payments for Repurchase of Equity [Abstract]
Common shares repurchased (in shares)		26,000	654,000
Stock Repurchase Program, June 2018 | Common Stock
Payments for Repurchase of Equity [Abstract]
Stock repurchase programs, authorized amount		$ 200,000,000
Common shares repurchased (in shares)		26,000	654,000
Repurchases of common stock		$ 1,900,000	$ 41,300,000
Amount remaining available for future stock repurchases		$ 144,100,000
Subsequent Event | Stock Repurchase Program, June 2018 | Common Stock
Payments for Repurchase of Equity [Abstract]
Common shares repurchased (in shares)	30,000
Repurchases of common stock	$ 2,200,000

Supplemental Disclosures - Sche

Supplemental Disclosures - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Text Block [Abstract]
Cash and cash equivalents	$ 149,515	$ 105,565	$ 54,736	$ 349,245
Restricted cash (recorded within "other current assets")	11,434	10,927	7,358	7,314
Cash, cash equivalents and restricted cash	$ 160,949	$ 116,492	$ 62,094	$ 356,559

Litigation (Details)

Litigation (Details) $ in Millions	Dec. 31, 2019USD ($)
Commitments and Contingencies Disclosure [Abstract]
Loss contingency, maximum potential loss	$ 31

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands	Feb. 28, 2020	Jan. 03, 2020	Dec. 31, 2019	Dec. 31, 2018
Subsequent Event [Line Items]
Payments of ordinary dividends			$ 17,913	$ 16,033
Scenario, Forecast
Subsequent Event [Line Items]
Payments of ordinary dividends	$ 18,000
Subsequent Event
Subsequent Event [Line Items]
Cash dividend declared (in dollars per share)		$ 0.28

Uncategorized Items - mms-20191

Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 33,482,000
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	32,929,000
Noncontrolling Interest [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 553,000