MAXIMUS INC
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
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3. 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.
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