Cover Page
Cover Page - shares | 9 Months Ended | |
Jun. 30, 2024 | Aug. 05, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
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 | 1600 Tysons Boulevard | |
Entity Address, City or Town | McLean | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22102 | |
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 | 60,177,003 | |
Entity Central Index Key | 0001032220 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
Revenue | $ 1,314,929 | $ 1,188,677 | $ 3,990,327 | $ 3,644,775 |
Cost of revenue | 982,615 | 924,313 | 3,040,370 | 2,907,061 |
Gross profit | 332,314 | 264,364 | 949,957 | 737,714 |
Selling, general, and administrative expenses | 167,033 | 182,545 | 504,682 | 471,445 |
Amortization of intangible assets | 23,542 | 23,431 | 68,532 | 70,599 |
Operating income | 141,739 | 58,388 | 376,743 | 195,670 |
Interest expense | 20,555 | 21,026 | 62,428 | 63,631 |
Other expense/(income), net | 809 | 1,005 | 475 | (79) |
Income before income taxes | 120,375 | 36,357 | 313,840 | 132,118 |
Provision for income taxes | 30,623 | 5,494 | 79,430 | 29,472 |
Net income | $ 89,752 | $ 30,863 | $ 234,410 | $ 102,646 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.47 | $ 0.50 | $ 3.83 | $ 1.68 |
Diluted (in dollars per share) | $ 1.46 | $ 0.50 | $ 3.81 | $ 1.67 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 61,079 | 61,141 | 61,233 | 61,125 |
Diluted (in shares) | 61,381 | 61,544 | 61,495 | 61,368 |
Dividends declared per share (in dollars per share) | $ 0.30 | $ 0.28 | $ 0.90 | $ 0.84 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 89,752 | $ 30,863 | $ 234,410 | $ 102,646 |
Other comprehensive (loss)/income, net of tax: | ||||
Foreign currency translation adjustments | 412 | 1,946 | 4,079 | 10,947 |
Net gains/(losses) on cash flow hedge, net of tax provision/(benefit) of $(427), $2,513, $(2,639), and $(466), respectively | (1,197) | 7,046 | (7,398) | (1,297) |
Other comprehensive income/(loss) | (785) | 8,992 | (3,319) | 9,650 |
Comprehensive income | $ 88,967 | $ 39,855 | $ 231,091 | $ 112,296 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net losses on cash flow hedges, tax | $ (427) | $ 2,513 | $ (2,639) | $ (466) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Assets: | ||
Cash and cash equivalents | $ 102,794 | $ 65,405 |
Accounts receivable, net | 850,462 | 826,873 |
Income taxes receivable | 9,464 | 16,556 |
Prepaid expenses and other current assets | 115,571 | 146,632 |
Total current assets | 1,078,291 | 1,055,466 |
Property and equipment, net | 35,020 | 38,831 |
Capitalized software, net | 169,449 | 107,811 |
Operating lease right-of-use assets | 138,817 | 163,929 |
Goodwill | 1,780,299 | 1,779,215 |
Intangible assets, net | 653,386 | 703,648 |
Deferred contract costs, net | 53,899 | 45,372 |
Deferred compensation plan assets | 52,895 | 42,919 |
Deferred income taxes | 5,911 | 2,459 |
Other assets | 31,823 | 46,147 |
Total assets | 3,999,790 | 3,985,797 |
Liabilities: | ||
Accounts payable and accrued liabilities | 280,836 | 282,081 |
Accrued compensation and benefits | 162,318 | 194,251 |
Deferred revenue, current portion | 82,065 | 60,477 |
Income taxes payable | 11,146 | 451 |
Long-term debt, current portion | 39,952 | 86,844 |
Operating lease liabilities, current portion | 47,992 | 49,852 |
Other current liabilities | 55,734 | 49,058 |
Total current liabilities | 680,043 | 723,014 |
Deferred revenue, non-current portion | 35,269 | 38,849 |
Deferred income taxes | 200,814 | 203,898 |
Long-term debt, non-current portion | 1,100,701 | 1,163,149 |
Deferred compensation plan liabilities, non-current portion | 55,870 | 46,432 |
Operating lease liabilities, non-current portion | 101,911 | 129,367 |
Other liabilities | 6,467 | 13,253 |
Total liabilities | 2,181,075 | 2,317,962 |
Commitments and contingencies (Note 11) | ||
Shareholders' equity: | ||
Common stock, no par value; 100,000 shares authorized; 60,427 and 60,998 shares issued and outstanding as of June 30, 2024, and September 30, 2023, respectively | 604,287 | 577,898 |
Accumulated other comprehensive loss | (30,934) | (27,615) |
Retained earnings | 1,245,362 | 1,117,552 |
Total shareholders' equity | 1,818,715 | 1,667,835 |
Total liabilities and shareholders' equity | $ 3,999,790 | $ 3,985,797 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares shares in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized (in shares) | 100,000 | 100,000 |
Common stock, shares issued (in shares) | 60,427 | 60,998 |
Common stock, shares outstanding (in shares) | 60,427 | 60,998 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 234,410 | $ 102,646 |
Adjustments to reconcile net income to cash flows from operations: | ||
Depreciation and amortization of property, equipment, and capitalized software | 24,146 | 37,092 |
Amortization of intangible assets | 68,532 | 70,599 |
Amortization of debt issuance costs and debt discount | 2,899 | 2,236 |
Deferred income taxes | (3,770) | 2,375 |
Stock compensation expense | 27,605 | 22,239 |
Loss on sale of businesses | 1,018 | 883 |
Change in assets and liabilities, net of effects of business combinations: | ||
Accounts receivable | (26,528) | 7,675 |
Prepaid expenses and other current assets | 19,316 | 21,101 |
Deferred contract costs | (8,377) | 2,245 |
Accounts payable and accrued liabilities | (1,659) | 16,915 |
Accrued compensation and benefits | (21,043) | (31,612) |
Deferred revenue | 18,079 | (31,747) |
Income taxes | 10,576 | (33,186) |
Operating lease right-of-use assets and liabilities | (2,131) | (3,742) |
Other assets and liabilities | 8,351 | (15,968) |
Net cash provided by operating activities | 351,424 | 169,751 |
Cash flows from investing activities: | ||
Purchases of property and equipment and capitalized software | (82,237) | (58,863) |
Asset acquisition | (18,006) | 0 |
Proceeds from divestitures | 3,078 | 9,124 |
Net cash used in investing activities | (97,165) | (49,739) |
Cash flows from financing activities: | ||
Cash dividends paid to Maximus shareholders | (54,847) | (51,053) |
Purchases of Maximus common stock | 47,275 | 0 |
Tax withholding related to RSU vesting | (13,455) | (8,475) |
Payments for contingent consideration | (10,977) | (6,662) |
Payments for debt financing costs | (9,724) | 0 |
Proceeds from borrowings | 850,166 | 682,398 |
Principal payments for debt | (952,825) | (730,514) |
Cash-collateralized escrow liabilities | 9,118 | (54,543) |
Net cash used in financing activities | (229,819) | (168,849) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 1,270 | 3,735 |
Net change in cash, cash equivalents, and restricted cash | 25,710 | (45,102) |
Cash, cash equivalents, and restricted cash, beginning of period | 122,091 | 136,795 |
Cash, cash equivalents, and restricted cash, end of period | $ 147,801 | $ 91,693 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Accumulated Other Comprehensive Loss | Retained Earnings |
Balance (in shares) at Sep. 30, 2022 | 60,774 | |||
Beginning balance at Sep. 30, 2022 | $ 1,549,371 | $ 557,978 | $ (33,961) | $ 1,025,354 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 39,995 | 39,995 | ||
Foreign currency translation | 8,036 | 8,036 | ||
Cash flow hedge, net of tax | (3,781) | (3,781) | ||
Cash dividends | (17,017) | (17,017) | ||
Dividends on RSUs | 0 | 298 | (298) | |
Stock compensation expense | 4,403 | $ 4,403 | ||
Ending (in shares) at Dec. 31, 2022 | 60,774 | |||
Ending balance at Dec. 31, 2022 | 1,581,007 | $ 562,679 | (29,706) | 1,048,034 |
Balance (in shares) at Sep. 30, 2022 | 60,774 | |||
Beginning balance at Sep. 30, 2022 | 1,549,371 | $ 557,978 | (33,961) | 1,025,354 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 102,646 | |||
Foreign currency translation | 10,947 | |||
Cash flow hedge, net of tax | (1,297) | |||
Ending (in shares) at Jun. 30, 2023 | 60,784 | |||
Ending balance at Jun. 30, 2023 | 1,632,853 | $ 581,338 | (24,311) | 1,075,826 |
Balance (in shares) at Dec. 31, 2022 | 60,774 | |||
Beginning balance at Dec. 31, 2022 | 1,581,007 | $ 562,679 | (29,706) | 1,048,034 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 31,788 | 31,788 | ||
Foreign currency translation | 965 | 965 | ||
Cash flow hedge, net of tax | (4,562) | (4,562) | ||
Cash dividends | (17,016) | (17,016) | ||
Dividends on RSUs | 0 | 413 | (413) | |
Stock compensation expense | 9,540 | $ 9,540 | ||
RSUs vested (in shares) | 10 | |||
Ending (in shares) at Mar. 31, 2023 | 60,784 | |||
Ending balance at Mar. 31, 2023 | 1,601,722 | $ 572,632 | (33,303) | 1,062,393 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 30,863 | 30,863 | ||
Foreign currency translation | 1,946 | 1,946 | ||
Cash flow hedge, net of tax | 7,046 | 7,046 | ||
Cash dividends | (17,020) | (17,020) | ||
Dividends on RSUs | 410 | (410) | ||
Stock compensation expense | 8,296 | $ 8,296 | ||
Ending (in shares) at Jun. 30, 2023 | 60,784 | |||
Ending balance at Jun. 30, 2023 | $ 1,632,853 | $ 581,338 | (24,311) | 1,075,826 |
Balance (in shares) at Sep. 30, 2023 | 60,998 | 60,998 | ||
Beginning balance at Sep. 30, 2023 | $ 1,667,835 | $ 577,898 | (27,615) | 1,117,552 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 64,148 | 64,148 | ||
Foreign currency translation | 5,912 | 5,912 | ||
Cash flow hedge, net of tax | (8,885) | (8,885) | ||
Cash dividends | (18,299) | (18,299) | ||
Dividends on RSUs | 0 | 285 | (285) | |
Stock compensation expense | 9,427 | 9,427 | ||
Tax withholding adjustment related to RSU vesting | (2,332) | $ (2,332) | ||
RSUs vested (in shares) | 33 | |||
Ending (in shares) at Dec. 31, 2023 | 61,031 | |||
Ending balance at Dec. 31, 2023 | $ 1,717,806 | $ 585,278 | (30,588) | 1,163,116 |
Balance (in shares) at Sep. 30, 2023 | 60,998 | 60,998 | ||
Beginning balance at Sep. 30, 2023 | $ 1,667,835 | $ 577,898 | (27,615) | 1,117,552 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 234,410 | |||
Foreign currency translation | 4,079 | |||
Cash flow hedge, net of tax | (7,398) | |||
Purchases of Maximus common stock | $ (50,600) | |||
Ending (in shares) at Jun. 30, 2024 | 60,427 | 60,427 | ||
Ending balance at Jun. 30, 2024 | $ 1,818,715 | $ 604,287 | (30,934) | 1,245,362 |
Balance (in shares) at Dec. 31, 2023 | 61,031 | |||
Beginning balance at Dec. 31, 2023 | 1,717,806 | $ 585,278 | (30,588) | 1,163,116 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 80,510 | 80,510 | ||
Foreign currency translation | (2,245) | (2,245) | ||
Cash flow hedge, net of tax | 2,684 | 2,684 | ||
Cash dividends | (18,309) | (18,309) | ||
Dividends on RSUs | 0 | 412 | (412) | |
Stock compensation expense | 8,697 | $ 8,697 | ||
RSUs vested (in shares) | 6 | |||
Ending (in shares) at Mar. 31, 2024 | 61,037 | |||
Ending balance at Mar. 31, 2024 | 1,789,143 | $ 594,387 | (30,149) | 1,224,905 |
Increase (Decrease) in Shareholders' Equity | ||||
Net income | 89,752 | 89,752 | ||
Foreign currency translation | 412 | 412 | ||
Cash flow hedge, net of tax | (1,197) | (1,197) | ||
Cash dividends | (18,239) | (18,239) | ||
Dividends on RSUs | $ 0 | $ 419 | (419) | |
Purchases of Maximus common stock (in shares) | (611) | (611) | ||
Purchases of Maximus common stock | $ (50,637) | (50,637) | ||
Stock compensation expense | $ 9,481 | $ 9,481 | ||
RSUs vested (in shares) | 1 | |||
Ending (in shares) at Jun. 30, 2024 | 60,427 | 60,427 | ||
Ending balance at Jun. 30, 2024 | $ 1,818,715 | $ 604,287 | $ (30,934) | $ 1,245,362 |
Organization
Organization | 9 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | ORGANIZATION Maximus, a Virginia corporation established in 1975, is a leading provider of government services worldwide. Under our mission of Moving People Forward , we help millions of people access the vital government services they need. With nearly 50 years of experience working with local, state, federal, and international government clients, we proudly design, develop, and deliver innovative and impactful programs that change lives. We are driven to strengthen communities and improve the lives of those we serve. We are a proud partner to government agencies in the United States ("U.S.") and worldwide. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements, including the notes, include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated in consolidation. Basis of Presentation for Interim Periods Certain information and footnote disclosures normally included for the annual financial statements to be prepared in accordance with U.S. GAAP have been condensed or omitted for the interim periods presented. We believe that the unaudited interim financial statements include all adjustments (which are normal and recurring in nature) necessary to present fairly our financial position and the results of operations and cash flows for the periods presented. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for the year or future periods. The financial statements should be read in conjunction with our audited consolidated financial statements and the accompanying notes contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. We have continued to follow the accounting policies set forth in those financial statements. Use of Estimates The preparation of these financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenue and expenses. At each reporting period end, we make estimates, including those related to revenue recognition and cost estimation on certain contracts, the realizability of long-lived assets, including goodwill, and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation. At June 30, 2024, our capitalized software balance includes $31.2 million related to technology for new services within our U.S. Services Segment. Earlier in fiscal year 2024, we evaluated these assets by comparing their carrying value to their estimated future cash flows. At that time, our probability-weighted undiscounted cash flows showed that we would recover the costs of these assets through our contract pipeline. We continue to monitor this asset. If circumstances change, we may be required to adjust the value or asset life of this asset. |
Business Segments
Business Segments | 9 Months Ended |
Jun. 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. U.S. Federal Services Our U.S. Federal Services Segment delivers end-to-end 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 business process services ("BPS"), such as program administration, assessments, and related consulting work for U.S. state and local government programs. These services support a variety of programs, including the Affordable Care Act ("ACA"), Medicaid, the Children's Health Insurance Program ("CHIP"), Temporary Assistance to Needy Families ("TANF"), and child support programs. Previously, this segment suffered from reduced operating leverage resulting from the pause in Medicaid redeterminations during the COVID-19 pandemic, which resumed in fiscal year 2023. Outside the U.S. Our Outside the U.S. Segment provides BPS for international governments, transforming the lives of people around the world. Helping people find employment, access vital support, and remain healthy, these services include health and disability assessments, program administration for employment services, wellbeing solutions, and other job seeker-related services. We support programs and deliver services in the United Kingdom, including the Health Assessment Advisory Service and the recently awarded replacement contract scheduled to start in the fourth quarter of fiscal year 2024, Functional Assessment Services, and Restart; and Australia, including Workforce Australia, and other employment support and job seeker services in a number of other countries. Table 3: Results of Operation by Business Segment For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Amount % (1) Amount % (1) Amount % (1) Amount % (1) (dollars in thousands) Revenue: U.S. Federal Services $ 683,347 $ 583,960 $ 2,062,127 $ 1,786,202 U.S. Services 472,298 449,061 1,448,258 1,338,242 Outside the U.S. 159,284 155,656 479,942 520,331 Revenue $ 1,314,929 $ 1,188,677 $ 3,990,327 $ 3,644,775 Gross profit: U.S. Federal Services $ 186,075 27.2 % $ 156,945 26.9 % $ 506,074 24.5 % $ 402,513 22.5 % U.S. Services 121,012 25.6 % 98,538 21.9 % 369,497 25.5 % 268,152 20.0 % Outside the U.S. 25,227 15.8 % 8,881 5.7 % 74,386 15.5 % 67,049 12.9 % Gross profit $ 332,314 25.3 % $ 264,364 22.2 % $ 949,957 23.8 % $ 737,714 20.2 % Selling, general, and administrative expenses: U.S. Federal Services $ 79,949 11.7 % $ 82,892 14.2 % $ 247,671 12.0 % $ 229,591 12.9 % U.S. Services 59,531 12.6 % 51,536 11.5 % 174,032 12.0 % 140,793 10.5 % Outside the U.S. 26,647 16.7 % 24,122 15.5 % 75,249 15.7 % 75,936 14.6 % Divestiture-related charges (2) — NM — NM 1,018 NM 883 NM Other (3) 906 NM 23,995 NM 6,712 NM 24,242 NM Selling, general, and administrative expenses $ 167,033 12.7 % $ 182,545 15.4 % $ 504,682 12.6 % $ 471,445 12.9 % Operating income/(loss): U.S. Federal Services $ 106,126 15.5 % $ 74,053 12.7 % $ 258,403 12.5 % $ 172,922 9.7 % U.S. Services 61,481 13.0 % 47,002 10.5 % 195,465 13.5 % 127,359 9.5 % Outside the U.S. (1,420) (0.9) % (15,241) (9.8) % (863) (0.2) % (8,887) (1.7) % Amortization of intangible assets (23,542) NM (23,431) NM (68,532) NM (70,599) NM Divestiture-related charges (2) — NM — NM (1,018) NM (883) NM Other (3) (906) NM (23,995) NM (6,712) NM (24,242) NM Operating income $ 141,739 10.8 % $ 58,388 4.9 % $ 376,743 9.4 % $ 195,670 5.4 % (1) Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM." (2) We have sold businesses in both fiscal years 2023 and 2024. Refer to "Note 7. Acquisitions and Divestitures" for more details. (3) Other expenses includes credits and costs that are not allocated to a particular segment. In the three and nine months ended June 30, 2024, these charges include $0.3 million and $3.3 million related to the costs of a previously disclosed cybersecurity incident, respectively, compared to $22.1 million for the three and nine months ended June 30, 2023. Other charges include expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Jun. 30, 2024 | |
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 that 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 contract type and customer type. 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 Contract Type For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (dollars in thousands) Performance-based $ 758,942 57.7 % $ 617,800 52.0 % $ 2,202,541 55.2 % $ 1,761,764 48.3 % Cost-plus 281,823 21.4 % 281,014 23.6 % 958,336 24.0 % 940,509 25.8 % Fixed price 170,787 13.0 % 171,809 14.5 % 514,280 12.9 % 527,556 14.5 % Time and materials 103,377 7.9 % 118,054 9.9 % 315,170 7.9 % 414,946 11.4 % Total revenue $ 1,314,929 $ 1,188,677 $ 3,990,327 $ 3,644,775 Table 4.2: Revenue by Customer Type For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (dollars in thousands) U.S. federal government agencies $ 666,895 50.7 % $ 568,924 47.9 % $ 2,015,780 50.5 % $ 1,742,739 47.8 % U.S. state government agencies 470,301 35.8 % 445,855 37.5 % 1,440,391 36.1 % 1,329,766 36.5 % International government agencies 156,587 11.9 % 148,742 12.5 % 468,995 11.8 % 491,861 13.5 % Other, including local municipalities and commercial customers 21,146 1.6 % 25,156 2.1 % 65,161 1.6 % 80,409 2.2 % Total revenue $ 1,314,929 $ 1,188,677 $ 3,990,327 $ 3,644,775 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, net. 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 June 30, 2024, and September 30, 2023, $26.3 million and $20.7 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 that 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 three and nine months ended June 30, 2024, we recognized revenue of $8.2 million and $53.5 million, respectively, included in our deferred revenue balances at September 30, 2023. During the three and nine months ended June 30, 2023, we recognized revenue of $13.9 million and $75.3 million, respectively, included in our deferred revenue balances at September 30, 2022. Contract estimates We are required to use estimates in recognizing revenue from some of our contracts. S ome of our performance-based contract revenue is recognized based upon future milestones 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 milestones, which may take many months to achieve. We recognize revenue over the period of performance. Our estimates vary from contract to contract but may include the number of participants within a portfolio reaching employment milestones and the service delivery periods for participants reaching the employment milestone. We estimate the total variable fees we will receive using the expected value method. We recognize the fees over the expected period of performance. At each reporting period, we update our estimates of the variable fees to represent the circumstances present at the end of the reporting period. We are required to constrain our estimates to the extent that it is probable that there will not be a significant reversal of cumulative revenue when the uncertainty is resolved. We do not have a history of significant constraints on these contracts. Table 4.3: Effect of Changes in Contract Estimates For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (in thousands, except per share data) Benefit to/(reduction of) revenue recognized due to changes in contract estimates $ (3,576) $ (2,134) $ (12,772) $ (8,272) Benefit to/(reduction of) diluted earnings per share recognized due to changes in contract estimates $ (0.04) $ (0.03) $ (0.16) $ (0.09) Remaining performance obligations As of June 30, 2024, we had approximately $310 million of remaining performance obligations. We anticipate that we will recognize revenue on approximately 72% 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 that is allocated entirely to future performance obligations, including variable transaction fees or fees tied directly to costs incurred. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Table 5: Weighted Average Number of Shares - Earnings Per Share For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (in thousands) Basic weighted average shares outstanding 61,079 61,141 61,233 61,125 Dilutive effect of unvested RSUs and PSUs 302 403 262 243 Denominator for diluted earnings per share 61,381 61,544 61,495 61,368 The diluted earnings per share calculation for the three and nine months ended June 30, 2024, excludes approximately 212,000 and 216,000 unvested anti-dilutive restricted stock units, respectively. For the three and nine months ended June 30, 2023, approximately 98,000 and 105,000 unvested anti-dilutive restricted stock units were excluded from the diluted earnings per share calculation, respectively. |
Debt And Derivatives
Debt And Derivatives | 9 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Debt And Derivatives | DEBT AND DERIVATIVES Table 6.1: Details of Debt June 30, 2024 September 30, 2023 (in thousands) Term Loan A $ 650,000 $ 909,375 Term Loan B 500,000 344,934 Subsidiary loan agreements 5,003 3,220 Total debt principal 1,155,003 1,257,529 Less: Unamortized debt-issuance costs and discounts (14,350) (7,536) Total debt 1,140,653 1,249,993 Less: Current portion of long-term debt (39,952) (86,844) Long-term debt $ 1,100,701 $ 1,163,149 Our principal credit agreements are held within the United States. In addition, we hold revolving credit facilities in Australia, Canada, and the United Kingdom. On May 30, 2024, we amended our credit agreement with J.P. Morgan Chase Bank, N.A. (the "Amended Credit Agreement"), which replaced our previous arrangement with the same bank (the "Original Credit Agreement"). The Amended Credit Agreement is available for general corporate purposes, including the funding of working capital, capital expenditures, and possible future acquisitions. The Amended Credit Agreement has three components. • A Term Loan A facility (the "TLA"), which initially comprises $650 million. This facility matures on May 30, 2029. The interest rates are variable, based upon a combination of a Secured Overnight Financing Rate ("SOFR") and a margin based on our leverage. The margin can vary between 1.0% and 2.0%. At loan inception, it was set at 1.5% and will remain at this level until our December 2024 leverage calculation is submitted, which is likely to be in February 2025. • A Term Loan B facility, which initially comprises $500 million. This facility matures on May 30, 2031. The interest rates are based upon SOFR, subject to a floor of 0.5%, plus a fixed 2.0% margin. • A revolving credit facility, which enables us to borrow or utilize up to $750 million. The interest on this facility is generally based upon the same rates as those used for the TLA. In addition, we are charged a commitment fee between 0.125% and 0.30% on used funds, the fee being based upon our leverage. The Amended Credit Agreement requires us to comply with various covenants, the terms of which are consistent with the Original Credit Agreement and customary for agreements of this type. At June 30, 2024, we are in compliance with all covenants. We do not believe that these covenants restrict our ability to successfully operate the business or to pay dividends. The Amended Credit Agreement is, subject to customary exceptions, secured by substantially all of the assets of the Company and its wholly owned material domestic subsidiaries, and guaranteed by each of the Company’s wholly owned material domestic subsidiaries. Bank charges incurred in amending the Original Credit Agreement have been reported as a reduction to gross debt and will be amortized over the respective lives of the loans. The Amended Credit Agreement is considered a modification of the Original Credit Agreement, and accordingly, many of the costs deferred under this arrangement will continue to be deferred prospectively. Following the establishment of the Amended Credit Agreement, our future minimum principal payments are as follows: Table 6.2: Details of Future Minimum Principal Payments Due Amount Due (in thousands) July 1, 2024 through September 30, 2024 $ 14,378 Year ended September 30, 2025 37,500 Year ended September 30, 2026 41,562 Year ended September 30, 2027 53,750 Year ended September 30, 2028 57,813 Years ended thereafter 950,000 Interest Rate Derivative Instruments We utilize interest rate swaps to reduce our risk from interest rates, which we have designated as cash flow hedges. We had entered into interest rate swaps against the Original Credit Agreement which we will continue to utilize on the Amended Credit Agreement. • We have arrangements for a combined notional amount of $500 million, which hedges a SOFR component of our TLA to a fixed amount of 2.31%. These arrangements expire in May 2026. • We have an arrangement for a notional amount of $150 million, which hedges a SOFR component of our TLA to a fixed amount of 4.38%. This arrangement expires in September 2024. At June 30, 2024 and September 30, 2023, we had assets of $21.0 million and $31.0 million, respectively, related to these interest rate swaps. These were recorded as "other assets" within our consolidated balance sheets. As these instruments are considered effective cash flow hedges, gains and losses based upon interest rate fluctuations are recorded within "accumulated other comprehensive income" within our consolidated financial statements. |
Debt And Derivatives | DEBT AND DERIVATIVES Table 6.1: Details of Debt June 30, 2024 September 30, 2023 (in thousands) Term Loan A $ 650,000 $ 909,375 Term Loan B 500,000 344,934 Subsidiary loan agreements 5,003 3,220 Total debt principal 1,155,003 1,257,529 Less: Unamortized debt-issuance costs and discounts (14,350) (7,536) Total debt 1,140,653 1,249,993 Less: Current portion of long-term debt (39,952) (86,844) Long-term debt $ 1,100,701 $ 1,163,149 Our principal credit agreements are held within the United States. In addition, we hold revolving credit facilities in Australia, Canada, and the United Kingdom. On May 30, 2024, we amended our credit agreement with J.P. Morgan Chase Bank, N.A. (the "Amended Credit Agreement"), which replaced our previous arrangement with the same bank (the "Original Credit Agreement"). The Amended Credit Agreement is available for general corporate purposes, including the funding of working capital, capital expenditures, and possible future acquisitions. The Amended Credit Agreement has three components. • A Term Loan A facility (the "TLA"), which initially comprises $650 million. This facility matures on May 30, 2029. The interest rates are variable, based upon a combination of a Secured Overnight Financing Rate ("SOFR") and a margin based on our leverage. The margin can vary between 1.0% and 2.0%. At loan inception, it was set at 1.5% and will remain at this level until our December 2024 leverage calculation is submitted, which is likely to be in February 2025. • A Term Loan B facility, which initially comprises $500 million. This facility matures on May 30, 2031. The interest rates are based upon SOFR, subject to a floor of 0.5%, plus a fixed 2.0% margin. • A revolving credit facility, which enables us to borrow or utilize up to $750 million. The interest on this facility is generally based upon the same rates as those used for the TLA. In addition, we are charged a commitment fee between 0.125% and 0.30% on used funds, the fee being based upon our leverage. The Amended Credit Agreement requires us to comply with various covenants, the terms of which are consistent with the Original Credit Agreement and customary for agreements of this type. At June 30, 2024, we are in compliance with all covenants. We do not believe that these covenants restrict our ability to successfully operate the business or to pay dividends. The Amended Credit Agreement is, subject to customary exceptions, secured by substantially all of the assets of the Company and its wholly owned material domestic subsidiaries, and guaranteed by each of the Company’s wholly owned material domestic subsidiaries. Bank charges incurred in amending the Original Credit Agreement have been reported as a reduction to gross debt and will be amortized over the respective lives of the loans. The Amended Credit Agreement is considered a modification of the Original Credit Agreement, and accordingly, many of the costs deferred under this arrangement will continue to be deferred prospectively. Following the establishment of the Amended Credit Agreement, our future minimum principal payments are as follows: Table 6.2: Details of Future Minimum Principal Payments Due Amount Due (in thousands) July 1, 2024 through September 30, 2024 $ 14,378 Year ended September 30, 2025 37,500 Year ended September 30, 2026 41,562 Year ended September 30, 2027 53,750 Year ended September 30, 2028 57,813 Years ended thereafter 950,000 Interest Rate Derivative Instruments We utilize interest rate swaps to reduce our risk from interest rates, which we have designated as cash flow hedges. We had entered into interest rate swaps against the Original Credit Agreement which we will continue to utilize on the Amended Credit Agreement. • We have arrangements for a combined notional amount of $500 million, which hedges a SOFR component of our TLA to a fixed amount of 2.31%. These arrangements expire in May 2026. • We have an arrangement for a notional amount of $150 million, which hedges a SOFR component of our TLA to a fixed amount of 4.38%. This arrangement expires in September 2024. At June 30, 2024 and September 30, 2023, we had assets of $21.0 million and $31.0 million, respectively, related to these interest rate swaps. These were recorded as "other assets" within our consolidated balance sheets. As these instruments are considered effective cash flow hedges, gains and losses based upon interest rate fluctuations are recorded within "accumulated other comprehensive income" within our consolidated financial statements. |
Acquisitions And Divestitures
Acquisitions And Divestitures | 9 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Acquisitions And Divestitures | ACQUISITIONS AND DIVESTITURES On February 14, 2024, we acquired part of a vendor who has performed IT services for us over several years for a cash consideration of $18.0 million. Almost all of the consideration was allocated directly to the most significant asset, the acquired workforce. The value of this asset will be amortized over eight years. This asset is anticipated to provide support across all three of our operating segments. We have sold a number of components of our Outside the U.S. Segment: • In November 2023, we sold our businesses in Italy and Singapore, as well as our employment services business in Canada, recording a loss on sale of $1.0 million. During the fourth quarter of fiscal year 2023, we recorded an impairment charge of $2.9 million related to these assets. • In March 2023, we sold our commercial practice in the United Kingdom, resulting in a pre-tax loss of $0.6 million. The cash consideration had a fair value of $16 million, to be received in installments. At June 30, 2024, we have installments remaining of $5.5 million. • In March 2023, we sold our Swedish subsidiary for cash consideration of $0.4 million, resulting in a small loss. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The following assets and liabilities are recorded at fair value on a recurring basis. • We hold mutual fund assets within a Rabbi Trust to cover liabilities in our deferred compensation plan. These assets have prices quoted within active markets and, accordingly, are classified as level 1 within the fair value hierarchy. • We have interest rate swap agreements serving to reduce our interest rate risk on our debt. These agreements can be valued using observable data and, accordingly, are classified as level 2 within the fair value hierarchy. • During fiscal year 2024, we recorded liabilities for additional consideration payable on certain acquisitions. This consideration was contingent upon the post-acquisition performance of these businesses. This liability was based upon our internal assumptions regarding revenues, margins, volumes, and contract terms. Accordingly, these inputs were not observable and were classified as level 3 within the fair value hierarchy. In fiscal year 2024, all outstanding liabilities were settled. The tables below present assets and liabilities measured and recorded at fair value in our consolidated balance sheets on a recurring basis and their corresponding level within the fair value hierarchy. No transfers between Level 1, Level 2, and Level 3 fair value measurements occurred for the nine months ended June 30, 2024. Table 8.1: Fair Value Measurements As of June 30, 2024 Level 1 Level 2 Level 3 Balance (in thousands) Assets: Deferred compensation assets - Rabbi Trust $ 32,642 $ — $ — $ 32,642 Interest rate swaps - $650 million notional value — 20,991 — 20,991 Total assets $ 32,642 $ 20,991 $ — $ 53,633 The fair values of receivables, prepaids, other assets, accounts payable, accrued costs, and other current liabilities approximate the carrying values as a result of the short-term nature of these instruments. The carrying value of our debt is consistent with the fair value as the stated interest rates in the agreements are consistent with the current market rates used in notes with similar terms in the markets (Level 2 inputs). Accumulated Other Comprehensive Loss All amounts recorded in accumulated other comprehensive loss are related to our foreign currency translations and interest rate swaps, net of tax. The following table shows changes in accumulated other comprehensive loss. Amounts reclassified from other comprehensive income were recorded within our selling, general and administrative expenses (for foreign currency translation adjustments) and within interest expense (for gains on derivatives). Table 8.2: Details of Changes in Accumulated Other Comprehensive Loss by Category Foreign currency translation adjustment Net unrealized gain on derivatives, net of tax Total (in thousands) Balance as of September 30, 2023 $ (50,484) $ 22,869 $ (27,615) Other comprehensive income before reclassifications 3,946 1,860 5,806 Amounts reclassified from accumulated other comprehensive loss 133 (9,258) (9,125) Net current period other comprehensive losses 4,079 (7,398) (3,319) Balance as of June 30, 2024 $ (46,405) $ 15,471 $ (30,934) The foreign currency translation adjustment reflects a cumulative difference between the value of our earnings in currencies other than the United States Dollar between the time they were recorded and the date of the financial statements. At June 30, 2024, the balance included approximately $18.9 million of translation differences related to the Australian Dollar and $19.4 million related to the British Pound, with the remaining balance principally comprised of differences related to the Canadian Dollar. Contingent Consideration The fair value of our contingent considerations are based upon estimates of the likely payments, which are based upon assumptions over future performance. The liabilities are reviewed on a quarterly basis and, where changes in estimates arise, these are recorded to selling and general administrative expenses. Our contingent consideration relates to the businesses below: • In October 2021, we acquired the student loan servicing business from Navient, which we rebranded as Aidvantage. Payments were based upon volumes, up to a maximum payment of $65.0 million. At September 30, 2023, the Aidvantage contingent consideration was $7.5 million. This liability was settled in the third quarter of this fiscal year. • In January 2022, we acquired BZ Bodies Limited. Future payments were based upon the performance of the business through December 2023, up to a maximum payment of $2.5 million (£2.0 million British Pounds). At September 30, 2023, we recorded a contingent consideration liability for the maximum payment, which we paid in the second quarter of fiscal year 2024. Movement in our contingent consideration balance is as follows: Table 8.3: Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Contingent Consideration (in thousands) Opening contingent consideration as of September 30, 2023 $ 9,903 Adjustments to fair value recorded in the period 985 Cash payments (10,977) Foreign currency translations 89 Closing contingent consideration as of June 30, 2024 $ — |
Equity
Equity | 9 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Equity | EQUITY Stock Compensation We grant restricted stock units ("RSUs") and performance stock units ("PSUs") to eligible participants under our 2021 Omnibus Incentive Plan, which was approved by the Board of Directors and stockholders. The RSUs granted to employees vest ratably over three During the nine months ended June 30, 2024, we issued approximately 380,000 RSUs, which will vest ratably over one Share Purchase Program Under a resolution adopted in June 2024, the Board of Directors authorized an increase to our existing stock purchase program whereby we may purchase, at management's discretion, up to $200 million of our common stock. During the three and nine months ended June 30, 2024, we purchased approximately 611,000 common shares at a cost of $50.6 million. At June 30, 2024, approximately $193.9 million remained available for future stock purchases. Since June 30, 2024, we have purchased a further 250,000 common shares for approximately $21.2 million. |
Other Balance Sheet Items
Other Balance Sheet Items | 9 Months Ended |
Jun. 30, 2024 | |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | |
Other Balance Sheet Items | OTHER BALANCE SHEET ITEMS Cash, Cash Equivalents, and Restricted Cash Table 10.1: Details of Cash and Cash Equivalents and Restricted Cash June 30, 2024 September 30, 2023 (in thousands) Cash and cash equivalents $ 102,794 $ 65,405 Restricted cash 45,007 56,686 Cash, cash equivalents, and restricted cash $ 147,801 $ 122,091 Restricted cash is recorded within "Prepaid expenses and other current assets" on the Consolidated Balance Sheets. Table 10.2: Supplemental Disclosures of Cash Flow Information For the Nine Months Ended June 30, 2024 June 30, 2023 (in thousands) Interest payments $ 59,367 $ 59,580 Income tax payments $ 67,822 $ 60,460 Accounts Receivable, Net Table 10.3: Details of Accounts Receivable, Net June 30, 2024 September 30, 2023 (in thousands) Billed and billable receivables $ 613,429 $ 692,707 Unbilled receivables 249,813 137,885 Allowance for credit losses (12,780) (3,719) Accounts receivable, net $ 850,462 $ 826,873 On September 21, 2022, we entered into a Receivables Purchase Agreement with Wells Fargo Bank N.A., under which we may sell certain U.S.-originated accounts receivable balances up to a maximum amount of $200.0 million at any given time. In return for these sales, we receive a cash payment equal to the face value of the receivables less a financing charge. We account for these transfers as sales. We have no retained interest in the transferred receivables other than administrative responsibilities, and Wells Fargo has no recourse for any credit risk. We estimate that the implicit servicing fees for an arrangement of this size and type would be immaterial. For the nine months ended June 30, 2024, the gross fair value of accounts receivables transferred to Wells Fargo and derecognized from our balance sheet was $270.9 million. In exchange for these sales, we received $269.3 million of cash. The balance, representing a loss on sale from these transfers, is included within our selling, general, and administrative expenses. We have recorded these transactions within our operating cash flows. |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments And Contingencies | COMMITMENTS AND CONTINGENCIES Litigation We are subject to audits, investigations, and reviews relating to compliance with the laws and regulations that govern our role as a contractor to agencies and departments of federal, state, local, and foreign governments. 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. Except for the matters described below for which we cannot predict the outcome, we do not believe the outcome of any existing matter would likely have a material adverse effect on our consolidated financial position, results of operations, or cash flows. We evaluate, on a regular basis, developments in our litigation matters and establish or make adjustments to our accruals as appropriate. A liability is accrued if a loss is probable and the amount of such loss can be reasonably estimated. If the risk of loss is probable, but the amount cannot be reasonably estimated, or the risk of loss is only reasonably possible, a potential liability will be disclosed but not accrued, if material. Due to the inherent uncertainty in the outcome of litigation, our estimates and assessments may prove to be incomplete or inaccurate and could be impacted by unanticipated events and circumstances, adverse outcomes, or other future determinations. MOVEit Cybersecurity Incident Litigation As the Company has previously disclosed, on May 31, 2023, Progress Software Corporation, the developer of MOVEit (“MOVEit”), a file transfer application used by many organizations to transfer data, announced a critical zero-day vulnerability in the application that allowed unauthorized third parties to access its customers’ MOVEit environments. Maximus uses MOVEit for internal and external file sharing purposes, including to share data with government customers related to Maximus's services in support of certain government programs. Based on its review of the impacted files to date, the Company has provided notices to individuals whose personal information, including social security numbers, protected health information, and/or other personal information, may have been included in the impacted files. On August 1, 2023, a purported class action was filed against Maximus Federal Services, Inc. (a wholly-owned subsidiary of Maximus, Inc.) in the U.S. District Court for the Eastern District of Virginia arising out of the MOVEit cybersecurity incident – Bishop v. Maximus Federal Services, Case No. 1:23-cv-01019 (U.S. Dist. Ct. E. D. VA). The plaintiff, who purports to represent a nationwide class of individuals, alleges, among other things, that the Company’s negligence resulted in the compromise of the plaintiff’s personally identifiable information and protected health information. Since August 1, 2023, approximately eleven additional cases arising out of the MOVEit cybersecurity incident have been filed in federal courts against Maximus, Inc. and its subsidiaries. These cases each allege substantially similar allegations on behalf of putative nationwide classes and on behalf of various putative state subclasses. Three plaintiffs have subsequently dismissed their claims voluntarily. On October 4, 2023, the United States Judicial Panel on Multidistrict Litigation granted a Motion to Transfer that created a Multidistrict Litigation (“MDL”) in the District of Massachusetts for all cases in federal court related to the MOVEit cybersecurity incident, including cases filed against Maximus and other defendants, including Progress Software Corporation, the creator of MOVEit. All of the cases against Maximus, Inc. and its subsidiaries initially filed in federal courts outside of the District of Massachusetts that are related to the MOVEit cybersecurity incident have now been transferred to the MDL under the caption In re: MOVEit Customer Data Security Breach Litigation and are currently stayed pending the filing of consolidated amended compliant(s). The plaintiffs in Bishop and the other cases against the company in the MDL seek damages to be proved at trial. On September 6, 2023, an individual action was filed in state court in the Florida Circuit Court for the 7th Judicial Circuit, Volusia County: Taylor v. Maximus Federal Services, Case No. 2023-12349 (Fla. Cir. Ct., 7th Jud. Cir., Volusia Cnty.), also arising out of the MOVEit cybersecurity incident. The plaintiff alleges, among other things, that the Company’s negligence resulted in the compromise of the plaintiff’s personally identifiable information and protected health information. Since September 6, 2023, approximately eight additional individual actions have been filed against Maximus, Inc. and its subsidiaries in Florida state courts, one of which has been dismissed. The Taylor matter pending in Volusia County, Florida has been stayed. The remaining seven matters pending in Florida’s state courts are pending in Miami-Dade County court. Each of the actions pending in Florida courts raise substantially similar allegations and legal claims. The plaintiffs in these individual actions seek damages to be proved at trial. On October 27, 2023, a purported class action was filed in state court in Marion Superior Court in Marion County, Indiana, against Maximus Health Services, Inc. (a wholly owned subsidiary of Maximus, Inc.): Solis Garcia v. Maximus Health Services, Inc., Case No. 49D12-2310-CT-042115 (Ind. Super. Ct., Marion Cnty.), again arising out of the MOVEit cybersecurity incident. The plaintiff, who purports to represent a class comprised of Indiana residents, alleges, among other things, that the Company’s negligence resulted in the compromise of the plaintiff’s personally identifiable information and protected health information. The plaintiff seeks damages to be proved at trial. The Company has removed this case to federal court in the Southern District of Indiana and it has been transferred to the MDL. The Company is not able to determine or predict the ultimate outcome of any of these proceedings or reasonably provide an estimate or range of the possible outcome or loss, if any. Census Project – Civil Investigation Demand (“CID”) In 2021, Maximus received a CID from the U.S. Department of Justice (“DOJ”) pursuant to the False Claims Act seeking records pertaining to the Census project. The CID requested the production of documents related to the Company’s compliance with telephone call quality assurance scoring and reporting requirements. The Company is cooperating with the DOJ in its investigation and providing responses and information on an ongoing basis. As of June 30, 2024, the Company has reserve d $4.0 million i n connection with this matter. While it is reasonably possible that losses exceeding the amount accrued may be incurred, it is not possible at this time to estimate the additional possible loss in excess of the amount already accrued. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Event | SUBSEQUENT EVENT On July 5, 2024, our Board of Directors declared a quarterly cash dividend of $0.30 for each share of our common stock outstanding. The dividend is payable on August 31, 2024, to shareholders of record on August 15, 2024. Based on the number of shares outstanding, we anticipate a cash payment of approximately $18.1 million. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jun. 30, 2024 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||||||
Net income | $ 89,752 | $ 80,510 | $ 64,148 | $ 30,863 | $ 31,788 | $ 39,995 | $ 234,410 | $ 102,646 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements, including the notes, include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of these financial statements, in conformity with U.S. GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenue and expenses. At each reporting period end, we make estimates, including those related to revenue recognition and cost estimation on certain contracts, the realizability of long-lived assets, including goodwill, and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation. At June 30, 2024, our capitalized software balance includes $31.2 million related to technology for new services within our U.S. Services Segment. Earlier in fiscal year 2024, we evaluated these assets by comparing their carrying value to their estimated future cash flows. At that time, our probability-weighted undiscounted cash flows showed that we would recover the costs of these assets through our contract pipeline. We continue to monitor this asset. If circumstances change, we may be required to adjust the value or asset life of this asset. |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information for each of the Company's Business Segments | Table 3: Results of Operation by Business Segment For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 Amount % (1) Amount % (1) Amount % (1) Amount % (1) (dollars in thousands) Revenue: U.S. Federal Services $ 683,347 $ 583,960 $ 2,062,127 $ 1,786,202 U.S. Services 472,298 449,061 1,448,258 1,338,242 Outside the U.S. 159,284 155,656 479,942 520,331 Revenue $ 1,314,929 $ 1,188,677 $ 3,990,327 $ 3,644,775 Gross profit: U.S. Federal Services $ 186,075 27.2 % $ 156,945 26.9 % $ 506,074 24.5 % $ 402,513 22.5 % U.S. Services 121,012 25.6 % 98,538 21.9 % 369,497 25.5 % 268,152 20.0 % Outside the U.S. 25,227 15.8 % 8,881 5.7 % 74,386 15.5 % 67,049 12.9 % Gross profit $ 332,314 25.3 % $ 264,364 22.2 % $ 949,957 23.8 % $ 737,714 20.2 % Selling, general, and administrative expenses: U.S. Federal Services $ 79,949 11.7 % $ 82,892 14.2 % $ 247,671 12.0 % $ 229,591 12.9 % U.S. Services 59,531 12.6 % 51,536 11.5 % 174,032 12.0 % 140,793 10.5 % Outside the U.S. 26,647 16.7 % 24,122 15.5 % 75,249 15.7 % 75,936 14.6 % Divestiture-related charges (2) — NM — NM 1,018 NM 883 NM Other (3) 906 NM 23,995 NM 6,712 NM 24,242 NM Selling, general, and administrative expenses $ 167,033 12.7 % $ 182,545 15.4 % $ 504,682 12.6 % $ 471,445 12.9 % Operating income/(loss): U.S. Federal Services $ 106,126 15.5 % $ 74,053 12.7 % $ 258,403 12.5 % $ 172,922 9.7 % U.S. Services 61,481 13.0 % 47,002 10.5 % 195,465 13.5 % 127,359 9.5 % Outside the U.S. (1,420) (0.9) % (15,241) (9.8) % (863) (0.2) % (8,887) (1.7) % Amortization of intangible assets (23,542) NM (23,431) NM (68,532) NM (70,599) NM Divestiture-related charges (2) — NM — NM (1,018) NM (883) NM Other (3) (906) NM (23,995) NM (6,712) NM (24,242) NM Operating income $ 141,739 10.8 % $ 58,388 4.9 % $ 376,743 9.4 % $ 195,670 5.4 % (1) Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM." (2) We have sold businesses in both fiscal years 2023 and 2024. Refer to "Note 7. Acquisitions and Divestitures" for more details. (3) Other expenses includes credits and costs that are not allocated to a particular segment. In the three and nine months ended June 30, 2024, these charges include $0.3 million and $3.3 million related to the costs of a previously disclosed cybersecurity incident, respectively, compared to $22.1 million for the three and nine months ended June 30, 2023. Other charges include expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Table 4.1: Revenue by Contract Type For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (dollars in thousands) Performance-based $ 758,942 57.7 % $ 617,800 52.0 % $ 2,202,541 55.2 % $ 1,761,764 48.3 % Cost-plus 281,823 21.4 % 281,014 23.6 % 958,336 24.0 % 940,509 25.8 % Fixed price 170,787 13.0 % 171,809 14.5 % 514,280 12.9 % 527,556 14.5 % Time and materials 103,377 7.9 % 118,054 9.9 % 315,170 7.9 % 414,946 11.4 % Total revenue $ 1,314,929 $ 1,188,677 $ 3,990,327 $ 3,644,775 Table 4.2: Revenue by Customer Type For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (dollars in thousands) U.S. federal government agencies $ 666,895 50.7 % $ 568,924 47.9 % $ 2,015,780 50.5 % $ 1,742,739 47.8 % U.S. state government agencies 470,301 35.8 % 445,855 37.5 % 1,440,391 36.1 % 1,329,766 36.5 % International government agencies 156,587 11.9 % 148,742 12.5 % 468,995 11.8 % 491,861 13.5 % Other, including local municipalities and commercial customers 21,146 1.6 % 25,156 2.1 % 65,161 1.6 % 80,409 2.2 % Total revenue $ 1,314,929 $ 1,188,677 $ 3,990,327 $ 3,644,775 Table 4.3: Effect of Changes in Contract Estimates For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (in thousands, except per share data) Benefit to/(reduction of) revenue recognized due to changes in contract estimates $ (3,576) $ (2,134) $ (12,772) $ (8,272) Benefit to/(reduction of) diluted earnings per share recognized due to changes in contract estimates $ (0.04) $ (0.03) $ (0.16) $ (0.09) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares used to Compute Earnings Per Share | Table 5: Weighted Average Number of Shares - Earnings Per Share For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (in thousands) Basic weighted average shares outstanding 61,079 61,141 61,233 61,125 Dilutive effect of unvested RSUs and PSUs 302 403 262 243 Denominator for diluted earnings per share 61,381 61,544 61,495 61,368 |
Debt And Derivatives (Tables)
Debt And Derivatives (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Table 6.1: Details of Debt June 30, 2024 September 30, 2023 (in thousands) Term Loan A $ 650,000 $ 909,375 Term Loan B 500,000 344,934 Subsidiary loan agreements 5,003 3,220 Total debt principal 1,155,003 1,257,529 Less: Unamortized debt-issuance costs and discounts (14,350) (7,536) Total debt 1,140,653 1,249,993 Less: Current portion of long-term debt (39,952) (86,844) Long-term debt $ 1,100,701 $ 1,163,149 |
Schedule of Maturities of Long-term Debt | Table 6.2: Details of Future Minimum Principal Payments Due Amount Due (in thousands) July 1, 2024 through September 30, 2024 $ 14,378 Year ended September 30, 2025 37,500 Year ended September 30, 2026 41,562 Year ended September 30, 2027 53,750 Year ended September 30, 2028 57,813 Years ended thereafter 950,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets and Liabilities | Table 8.1: Fair Value Measurements As of June 30, 2024 Level 1 Level 2 Level 3 Balance (in thousands) Assets: Deferred compensation assets - Rabbi Trust $ 32,642 $ — $ — $ 32,642 Interest rate swaps - $650 million notional value — 20,991 — 20,991 Total assets $ 32,642 $ 20,991 $ — $ 53,633 Table 8.2: Details of Changes in Accumulated Other Comprehensive Loss by Category Foreign currency translation adjustment Net unrealized gain on derivatives, net of tax Total (in thousands) Balance as of September 30, 2023 $ (50,484) $ 22,869 $ (27,615) Other comprehensive income before reclassifications 3,946 1,860 5,806 Amounts reclassified from accumulated other comprehensive loss 133 (9,258) (9,125) Net current period other comprehensive losses 4,079 (7,398) (3,319) Balance as of June 30, 2024 $ (46,405) $ 15,471 $ (30,934) Movement in our contingent consideration balance is as follows: Table 8.3: Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Contingent Consideration (in thousands) Opening contingent consideration as of September 30, 2023 $ 9,903 Adjustments to fair value recorded in the period 985 Cash payments (10,977) Foreign currency translations 89 Closing contingent consideration as of June 30, 2024 $ — |
Other Balance Sheet Items (Tabl
Other Balance Sheet Items (Tables) | 9 Months Ended |
Jun. 30, 2024 | |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | Table 10.1: Details of Cash and Cash Equivalents and Restricted Cash June 30, 2024 September 30, 2023 (in thousands) Cash and cash equivalents $ 102,794 $ 65,405 Restricted cash 45,007 56,686 Cash, cash equivalents, and restricted cash $ 147,801 $ 122,091 |
Schedule of Restrictions on Cash and Cash Equivalents | Table 10.1: Details of Cash and Cash Equivalents and Restricted Cash June 30, 2024 September 30, 2023 (in thousands) Cash and cash equivalents $ 102,794 $ 65,405 Restricted cash 45,007 56,686 Cash, cash equivalents, and restricted cash $ 147,801 $ 122,091 |
Schedule of Supplementary Cash Flow Information | Table 10.2: Supplemental Disclosures of Cash Flow Information For the Nine Months Ended June 30, 2024 June 30, 2023 (in thousands) Interest payments $ 59,367 $ 59,580 Income tax payments $ 67,822 $ 60,460 |
Schedule of Details of Accounts Receivable | Table 10.3: Details of Accounts Receivable, Net June 30, 2024 September 30, 2023 (in thousands) Billed and billable receivables $ 613,429 $ 692,707 Unbilled receivables 249,813 137,885 Allowance for credit losses (12,780) (3,719) Accounts receivable, net $ 850,462 $ 826,873 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Property, Plant and Equipment [Line Items] | ||
Capitalized software, net | $ 169,449 | $ 107,811 |
Intangible assets, net | 653,386 | $ 703,648 |
Technology Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Capitalized software, net | 31,200 | |
Intangible assets, net | $ 13,500 |
Business Segments - Narrative (
Business Segments - Narrative (Details) - segment | 9 Months Ended | |
Feb. 14, 2024 | Jun. 30, 2024 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 3 | 3 |
Business Segments - Financial i
Business Segments - Financial information by segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue: | ||||
Revenue | $ 1,314,929 | $ 1,188,677 | $ 3,990,327 | $ 3,644,775 |
Gross profit: | ||||
Gross profit | $ 332,314 | $ 264,364 | $ 949,957 | $ 737,714 |
Gross profit (as a percent) | 25.30% | 22.20% | 23.80% | 20.20% |
Selling, general, and administrative expenses: | ||||
Selling, general, and administrative expenses | $ 167,033 | $ 182,545 | $ 504,682 | $ 471,445 |
Selling, general, and administrative expenses (as a percent) | 12.70% | 15.40% | 12.60% | 12.90% |
Divestiture-related charges | $ 1,018 | $ 883 | ||
Operating income/(loss): | ||||
Operating income | $ 141,739 | $ 58,388 | $ 376,743 | $ 195,670 |
Operating income (as a percent) | 10.80% | 4.90% | 9.40% | 5.40% |
Amortization of Intangible Assets | $ (23,542) | $ (23,431) | $ (68,532) | $ (70,599) |
Operating Segments | U.S. Federal Services | ||||
Revenue: | ||||
Revenue | 683,347 | 583,960 | 2,062,127 | 1,786,202 |
Gross profit: | ||||
Gross profit | $ 186,075 | $ 156,945 | $ 506,074 | $ 402,513 |
Gross profit (as a percent) | 27.20% | 26.90% | 24.50% | 22.50% |
Selling, general, and administrative expenses: | ||||
Selling, general, and administrative expenses | $ 79,949 | $ 82,892 | $ 247,671 | $ 229,591 |
Selling, general, and administrative expenses (as a percent) | 11.70% | 14.20% | 12% | 12.90% |
Operating income/(loss): | ||||
Operating income | $ 106,126 | $ 74,053 | $ 258,403 | $ 172,922 |
Operating income (as a percent) | 15.50% | 12.70% | 12.50% | 9.70% |
Operating Segments | U.S. Services | ||||
Revenue: | ||||
Revenue | $ 472,298 | $ 449,061 | $ 1,448,258 | $ 1,338,242 |
Gross profit: | ||||
Gross profit | $ 121,012 | $ 98,538 | $ 369,497 | $ 268,152 |
Gross profit (as a percent) | 25.60% | 21.90% | 25.50% | 20% |
Selling, general, and administrative expenses: | ||||
Selling, general, and administrative expenses | $ 59,531 | $ 51,536 | $ 174,032 | $ 140,793 |
Selling, general, and administrative expenses (as a percent) | 12.60% | 11.50% | 12% | 10.50% |
Operating income/(loss): | ||||
Operating income | $ 61,481 | $ 47,002 | $ 195,465 | $ 127,359 |
Operating income (as a percent) | 13% | 10.50% | 13.50% | 9.50% |
Operating Segments | Outside the U.S. | ||||
Revenue: | ||||
Revenue | $ 159,284 | $ 155,656 | $ 479,942 | $ 520,331 |
Gross profit: | ||||
Gross profit | $ 25,227 | $ 8,881 | $ 74,386 | $ 67,049 |
Gross profit (as a percent) | 15.80% | 5.70% | 15.50% | 12.90% |
Selling, general, and administrative expenses: | ||||
Selling, general, and administrative expenses | $ 26,647 | $ 24,122 | $ 75,249 | $ 75,936 |
Selling, general, and administrative expenses (as a percent) | 16.70% | 15.50% | 15.70% | 14.60% |
Operating income/(loss): | ||||
Operating income | $ (1,420) | $ (15,241) | $ (863) | $ (8,887) |
Operating income (as a percent) | (0.90%) | (9.80%) | (0.20%) | (1.70%) |
Segment Reconciling Items | ||||
Selling, general, and administrative expenses: | ||||
Selling, general, and administrative expenses | $ 906 | $ 23,995 | $ 6,712 | $ 24,242 |
Divestiture-related charges | 0 | 0 | 1,018 | 883 |
Operating income/(loss): | ||||
Operating income | (906) | (23,995) | (6,712) | (24,242) |
Amortization of Intangible Assets | (23,542) | (23,431) | (68,532) | (70,599) |
Other expense | $ 300 | $ 22,100 | $ 3,300 | $ 22,100 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,314,929 | $ 1,188,677 | $ 3,990,327 | $ 3,644,775 |
U.S. federal government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 666,895 | $ 568,924 | $ 2,015,780 | $ 1,742,739 |
U.S. federal government agencies | Revenue Benchmark | Customer Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue in % | 50.70% | 47.90% | 50.50% | 47.80% |
U.S. state government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 470,301 | $ 445,855 | $ 1,440,391 | $ 1,329,766 |
U.S. state government agencies | Revenue Benchmark | Customer Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue in % | 35.80% | 37.50% | 36.10% | 36.50% |
International government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 156,587 | $ 148,742 | $ 468,995 | $ 491,861 |
International government agencies | Revenue Benchmark | Customer Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue in % | 11.90% | 12.50% | 11.80% | 13.50% |
Other, including local municipalities and commercial customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 21,146 | $ 25,156 | $ 65,161 | $ 80,409 |
Other, including local municipalities and commercial customers | Revenue Benchmark | Customer Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue in % | 1.60% | 2.10% | 1.60% | 2.20% |
Performance-based | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 758,942 | $ 617,800 | $ 2,202,541 | $ 1,761,764 |
Performance-based | Revenue Benchmark | Contract Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue in % | 57.70% | 52% | 55.20% | 48.30% |
Cost-plus | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 281,823 | $ 281,014 | $ 958,336 | $ 940,509 |
Cost-plus | Revenue Benchmark | Contract Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue in % | 21.40% | 23.60% | 24% | 25.80% |
Fixed price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 170,787 | $ 171,809 | $ 514,280 | $ 527,556 |
Fixed price | Revenue Benchmark | Contract Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue in % | 13% | 14.50% | 12.90% | 14.50% |
Time and materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 103,377 | $ 118,054 | $ 315,170 | $ 414,946 |
Time and materials | Revenue Benchmark | Contract Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue in % | 7.90% | 9.90% | 7.90% | 11.40% |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Sep. 30, 2023 | |
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue, revenue recognized | $ 8.2 | $ 13.9 | $ 53.5 | $ 75.3 | |
Revenue, remaining performance obligation, amount | $ 310 | $ 310 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue, remaining performance obligation, percentage | 72% | 72% | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | 12 months | |||
Unbilled receivables | |||||
Disaggregation of Revenue [Line Items] | |||||
Unbilled contracts receivable | $ 26.3 | $ 26.3 | $ 20.7 |
Revenue Recognition - Effect of
Revenue Recognition - Effect of Changes in Contract Estimates (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Benefit to/(reduction of) revenue recognized due to changes in contract estimates | $ 1,314,929 | $ 1,188,677 | $ 3,990,327 | $ 3,644,775 |
Benefit to/(reduction of) diluted earnings per share recognized due to changes in contract estimates (in dollars per share) | $ 1.46 | $ 0.50 | $ 3.81 | $ 1.67 |
Change in contract estimates | ||||
Disaggregation of Revenue [Line Items] | ||||
Benefit to/(reduction of) revenue recognized due to changes in contract estimates | $ (3,576) | $ (2,134) | $ (12,772) | $ (8,272) |
Benefit to/(reduction of) diluted earnings per share recognized due to changes in contract estimates (in dollars per share) | $ (0.04) | $ (0.03) | $ (0.16) | $ (0.09) |
Earnings Per Share - Weighted A
Earnings Per Share - Weighted Average Number of Shares (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average shares outstanding (in shares) | 61,079 | 61,141 | 61,233 | 61,125 |
Dilutive effect of unvested RSUs and PSUs (in shares) | 302 | 403 | 262 | 243 |
Denominator for diluted earnings per share (in shares) | 61,381 | 61,544 | 61,495 | 61,368 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 212 | 98 | 216 | 105 |
Debt And Derivatives - Schedule
Debt And Derivatives - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Debt Instrument [Line Items] | ||
Total debt principal | $ 1,155,003 | $ 1,257,529 |
Less: Unamortized debt-issuance costs and discounts | (14,350) | (7,536) |
Total debt | 1,140,653 | 1,249,993 |
Less: Current portion of long-term debt | (39,952) | (86,844) |
Long-term debt | 1,100,701 | 1,163,149 |
Secured Debt | Term Loan A | ||
Debt Instrument [Line Items] | ||
Debt principal | 650,000 | 909,375 |
Secured Debt | Term Loan B | ||
Debt Instrument [Line Items] | ||
Debt principal | 500,000 | 344,934 |
Subsidiary loan agreements | ||
Debt Instrument [Line Items] | ||
Debt principal | $ 5,003 | $ 3,220 |
Debt And Derivatives - Narrativ
Debt And Derivatives - Narrative (Details) - USD ($) | May 30, 2024 | Jun. 30, 2024 | Sep. 30, 2023 |
Other Assets | |||
Debt Instrument [Line Items] | |||
Fair value of derivative asset | $ 21,000,000 | $ 31,000,000 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 750,000,000 | ||
Minimum | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.125% | ||
Maximum | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Commitment fee percentage | 0.30% | ||
Secured Debt | |||
Debt Instrument [Line Items] | |||
Floor interest rate | 0.50% | ||
Term Loan A | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1% | ||
Term Loan A | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2% | ||
Term Loan A | Secured Debt | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 650,000,000 | ||
Basis spread on variable rate | 1.50% | ||
Term Loan B | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2% | ||
Term Loan B | Secured Debt | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 500,000,000 | ||
Term Loan A, Due May 2026 | Secured Debt | Interest Rate Swap 1 | |||
Debt Instrument [Line Items] | |||
Derivative, notional amount | $ 500,000,000 | ||
Derivative, fixed interest rate | 2.31% | ||
Term Loan A, Due September 2024 | Secured Debt | Interest Rate Swap 2 | |||
Debt Instrument [Line Items] | |||
Derivative, notional amount | $ 150,000,000 | ||
Derivative, fixed interest rate | 4.38% |
Debt And Derivatives - Schedu_2
Debt And Derivatives - Schedule of Repayments (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Debt Disclosure [Abstract] | |
July 1, 2024 through September 30, 2024 | $ 14,378 |
Year ended September 30, 2025 | 37,500 |
Year ended September 30, 2026 | 41,562 |
Year ended September 30, 2027 | 53,750 |
Year ended September 30, 2028 | 57,813 |
Years ended thereafter | $ 950,000 |
Acquisitions And Divestitures (
Acquisitions And Divestitures (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 16 Months Ended | |||
Feb. 14, 2024 USD ($) segment | Nov. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Jun. 30, 2024 USD ($) segment | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | |
Business Acquisition [Line Items] | |||||||
Number of operating segments | segment | 3 | 3 | |||||
Proceeds from divestitures | $ 3,078 | $ 9,124 | |||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Business Acquisition [Line Items] | |||||||
Loss on sale of business | $ 1,000 | ||||||
Impairment charge | $ 2,900 | ||||||
United Kingdom | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Business Acquisition [Line Items] | |||||||
Loss on sale of business | $ 600 | ||||||
Total fair value of consideration | 16,000 | ||||||
Proceeds from divestitures | $ 5,500 | ||||||
Sweden | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||
Business Acquisition [Line Items] | |||||||
Total fair value of consideration | $ 400 | ||||||
Opteamix LLC | |||||||
Business Acquisition [Line Items] | |||||||
Cash consideration | $ 18,000 | ||||||
Intangible assets, estimated useful life | 8 years |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Notional value, asset | $ 650,000 |
Fair Value, Recurring | |
Financial information for each of the Company's business segments | |
Total assets | 53,633 |
Fair Value, Recurring | Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Total assets | 20,991 |
Fair Value, Recurring | Deferred compensation assets - Rabbi Trust | |
Financial information for each of the Company's business segments | |
Total assets | 32,642 |
Level 1 | Fair Value, Recurring | |
Financial information for each of the Company's business segments | |
Total assets | 32,642 |
Level 1 | Fair Value, Recurring | Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Total assets | 0 |
Level 1 | Fair Value, Recurring | Deferred compensation assets - Rabbi Trust | |
Financial information for each of the Company's business segments | |
Total assets | 32,642 |
Level 2 | Fair Value, Recurring | |
Financial information for each of the Company's business segments | |
Total assets | 20,991 |
Level 2 | Fair Value, Recurring | Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Total assets | 20,991 |
Level 2 | Fair Value, Recurring | Deferred compensation assets - Rabbi Trust | |
Financial information for each of the Company's business segments | |
Total assets | 0 |
Level 3 | Fair Value, Recurring | |
Financial information for each of the Company's business segments | |
Total assets | 0 |
Level 3 | Fair Value, Recurring | Interest Rate Swap | |
Financial information for each of the Company's business segments | |
Total assets | 0 |
Level 3 | Fair Value, Recurring | Deferred compensation assets - Rabbi Trust | |
Financial information for each of the Company's business segments | |
Total assets | $ 0 |
Fair Value Measurements - Accum
Fair Value Measurements - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||
Beginning balance | $ 1,789,143 | $ 1,601,722 | $ 1,667,835 | $ 1,549,371 |
Other comprehensive income before reclassifications | 5,806 | |||
Amounts reclassified from accumulated other comprehensive loss | (9,125) | |||
Net current period other comprehensive losses | (785) | 8,992 | (3,319) | 9,650 |
Ending balance | 1,818,715 | 1,632,853 | 1,818,715 | 1,632,853 |
Foreign currency translation adjustment | ||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||
Beginning balance | (50,484) | |||
Other comprehensive income before reclassifications | 3,946 | |||
Amounts reclassified from accumulated other comprehensive loss | 133 | |||
Net current period other comprehensive losses | 4,079 | |||
Ending balance | (46,405) | (46,405) | ||
Foreign currency translation adjustment | Australia, Dollars | ||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||
Ending balance | 18,900 | 18,900 | ||
Net unrealized gain on derivatives, net of tax | ||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||
Beginning balance | 22,869 | |||
Other comprehensive income before reclassifications | 1,860 | |||
Amounts reclassified from accumulated other comprehensive loss | (9,258) | |||
Net current period other comprehensive losses | (7,398) | |||
Ending balance | 15,471 | 15,471 | ||
Accumulated Other Comprehensive Loss | ||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||
Beginning balance | (30,149) | (33,303) | (27,615) | (33,961) |
Net current period other comprehensive losses | (3,319) | |||
Ending balance | $ (30,934) | $ (24,311) | $ (30,934) | $ (24,311) |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands, £ in Millions | 3 Months Ended | 9 Months Ended | ||||||||||
Jun. 30, 2024 USD ($) | Jun. 30, 2024 GBP (£) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 GBP (£) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Oct. 31, 2021 USD ($) | |
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||||||||
Shareholders' equity | $ 1,818,715 | $ 1,818,715 | $ 1,632,853 | $ 1,789,143 | $ 1,717,806 | $ 1,667,835 | $ 1,601,722 | $ 1,581,007 | $ 1,549,371 | |||
Payments of contingent consideration | 10,977 | $ 6,662 | ||||||||||
Aidvantage | ||||||||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||||||||
Contingent consideration | 7,500 | |||||||||||
BZ Bodies Limited | ||||||||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||||||||
Contingent consideration | 2,500 | £ 2 | ||||||||||
Payments of contingent consideration | 2,500 | £ 2 | ||||||||||
Maximum | Navient | ||||||||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||||||||
Contingent consideration | $ 65,000 | |||||||||||
Foreign currency translation adjustment | ||||||||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||||||||
Shareholders' equity | (46,405) | (46,405) | $ (50,484) | |||||||||
Australia, Dollars | Foreign currency translation adjustment | ||||||||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||||||||
Shareholders' equity | 18,900 | 18,900 | ||||||||||
United Kingdom, Pounds | Foreign currency translation adjustment | ||||||||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||||||||
Shareholders' equity | $ 19,400 | $ 19,400 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Inputs (Details) $ in Thousands | 9 Months Ended |
Jun. 30, 2024 USD ($) | |
Contingent Consideration | |
Beginning balance | $ 9,903 |
Adjustments to fair value recorded in the period | $ 985 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) |
Cash payments | $ (10,977) |
Foreign currency translations | $ 89 |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Other Comprehensive Income or Comprehensive Income [Extensible Enumeration] | Foreign currency translation adjustments |
Ending balance | $ 0 |
Equity (Details)
Equity (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2020 | |
Stock-based compensation | ||||
Stock repurchase programs, authorized amount | $ 200,000 | |||
Common shares repurchased (in shares) | 250 | 611 | ||
Common shares repurchased, value | $ 21,200 | $ 50,637 | $ 50,600 | |
Amount remaining available for future stock repurchases | $ 193,900 | $ 193,900 | $ 193,900 | |
Restricted Stock Units (RSUs) | ||||
Stock-based compensation | ||||
Shares issued (in shares) | 380 | |||
Restricted Stock Units (RSUs) | Member of Board of Directors | A2021 Stock Incentive Plan | ||||
Stock-based compensation | ||||
Vesting period | 1 year | |||
Restricted Stock Units (RSUs) | Minimum | ||||
Stock-based compensation | ||||
Vesting period | 1 year | |||
Restricted Stock Units (RSUs) | Minimum | A2021 Stock Incentive Plan | ||||
Stock-based compensation | ||||
Vesting period | 3 years | |||
Restricted Stock Units (RSUs) | Maximum | ||||
Stock-based compensation | ||||
Vesting period | 4 years | |||
Restricted Stock Units (RSUs) | Maximum | A2021 Stock Incentive Plan | ||||
Stock-based compensation | ||||
Vesting period | 5 years | |||
Performance Shares | ||||
Stock-based compensation | ||||
Vesting period | 3 years | |||
Shares issued (in shares) | 128 | |||
Performance Shares | Minimum | A2021 Stock Incentive Plan | ||||
Stock-based compensation | ||||
Vesting rights, percentage | 0% | |||
Performance Shares | Maximum | A2021 Stock Incentive Plan | ||||
Stock-based compensation | ||||
Vesting rights, percentage | 200% |
Other Balance Sheet Items - Sch
Other Balance Sheet Items - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 102,794 | $ 65,405 | ||
Restricted cash | 45,007 | 56,686 | ||
Cash, cash equivalents, and restricted cash | $ 147,801 | $ 122,091 | $ 91,693 | $ 136,795 |
Other Balance Sheet Items - Sup
Other Balance Sheet Items - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | ||
Interest payments | $ 59,367 | $ 59,580 |
Income tax payments | $ 67,822 | $ 60,460 |
Other Balance Sheet Items - Det
Other Balance Sheet Items - Details of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Sep. 30, 2023 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for credit losses | $ (12,780) | $ (3,719) |
Accounts receivable, net | 850,462 | 826,873 |
Billed and billable receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed and billable receivables | 613,429 | 692,707 |
Unbilled receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed and billable receivables | $ 249,813 | $ 137,885 |
Other Balance Sheet Items - Nar
Other Balance Sheet Items - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Sep. 21, 2022 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract] | ||
Receivables purchase agreement, maximum sales amount | $ 200 | |
Transfer of financial assets, accounted for as sales | $ 270.9 | |
Cash received from transfer of financial assets | $ 269.3 |
Commitments And Contingencies (
Commitments And Contingencies (Details) $ in Millions | Sep. 06, 2023 action | Jun. 30, 2024 USD ($) case |
Loss Contingencies [Line Items] | ||
Loss contingency accrual | $ | $ 4 | |
MOVEit, Federal Court | ||
Loss Contingencies [Line Items] | ||
Number of cases filed | case | 11 | |
MOVEit, State Court | ||
Loss Contingencies [Line Items] | ||
Number of cases filed | 8 | |
Number of cases dismissed | 1 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 31, 2024 | Jul. 05, 2024 |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Cash dividend declared (in dollars per share) | $ 0.30 | |
Common Stock | Forecast | ||
Subsequent Event [Line Items] | ||
Payments of dividends | $ 18.1 |