10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2021

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from         to

Commission File Number: 1-12997

Maximus, Inc.

(Exact name of registrant as specified in its charter)

 

Virginia	54-1000588
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1891 Metro Center Drive, Reston, Virginia	20190
(Address of principal executive offices)	(Zip Code)

(703) 251-8500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	MMS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒

As of August 2, 2021, there were 61,471,783 shares of the registrant’s common stock (no par value) outstanding.

Maximus, Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended June 30, 2021

INDEX

PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements	1
	Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2021 and 2020 (unaudited)	1
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended June 30, 2021 and 2020 (unaudited)	2
	Consolidated Balance Sheets as of June 30, 2021 (unaudited) and September 30, 2020	3
	Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2021 and 2020 (unaudited)	4
	Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended June 30, 2021 and 2020 (unaudited)	5
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 4.	Controls and Procedures	33
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 6.	Exhibits	36
Signatures		37

Throughout this Quarterly Report on Form 10-Q, the terms “Company,” “we,” “us,” “our” and “Maximus” refer to Maximus, Inc. and its subsidiaries, unless the context requires otherwise.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Included in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “opportunity,” “could,” “potential,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will,” and similar references to future periods.

Forward-looking statements that are not historical facts, including statements about our confidence, strategies and initiatives, and our expectations about revenues, results of operations, profitability, liquidity, market demand, the impact of the coronavirus (COVID-19) global pandemic and our recent acquisitions are forward-looking statements that involve risks and uncertainties. These risks could cause our actual results to differ materially from those indicated by such forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

•the extent and impact of the continuation of the global pandemic and the actions taken or to be taken by us, our customers, and the governments or jurisdictions in which we operate in response to COVID-19;

•the impact of the Biden Administration on federal procurement, federal funding to states' safety-net programs, and the overall decision-making process related to our industry, including our business and customers;

•the demand for our services and products, including the impacts of any economic downturns;

•a failure to meet performance requirements in our contracts, which might lead to contract termination and actual or liquidated damages;

•the effects of future legislative or government budgetary and spending changes;

•our failure to successfully bid for and accurately price contracts to generate our desired profit;

•our ability to maintain technology systems and otherwise protect confidential or protected information;

•our ability to attract and retain executive officers, senior managers and other qualified personnel to execute our business;

•our ability to manage capital investments and startup costs incurred before receiving related contract payments;

•our ability to manage our growth, including acquired businesses;

•our ability to manage our debt;

•the ability of government customers to terminate contracts on short notice, with or without cause;

•our ability to maintain relationships with key government entities from whom a substantial portion of our revenue is derived;

•the outcome of reviews or audits, which might result in financial penalties and impair our ability to respond to invitations for new work;

•a failure to comply with laws governing our business, which might result in the Company being subject to fines, penalties, suspension, debarment, and other sanctions;

•the costs and outcome of litigation;

•difficulties in integrating or achieving projected revenues, earnings, and other benefits associated with acquired businesses;

•the effects of changes in laws and regulations governing our business, including tax laws, and applicable interpretations and guidance thereunder, or changes in accounting policies, rules, methodologies, and practices, and our ability to estimate the impact of such changes;

•matters related to business we disposed of or divested; and

•other factors set forth in Item 1A of this Quarterly Report on Form 10-Q and in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2020, which was filed with the Securities and Exchange Commission on November 19, 2020.

Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.

PART I.  FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements.

Maximus, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2021		2020		2021		2020
Revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701
Cost of revenue	951,664		715,734		2,419,785		2,023,550
Gross profit	291,856		185,603		728,569		514,151
Selling, general, and administrative expenses	140,129		89,582		364,498		283,662
Amortization of intangible assets	12,132		8,712		23,718		26,734
Operating income	139,595		87,309		340,353		203,755
Interest expense	3,087		616		4,049		1,565
Other (expense)/income, net	(8,289)		(671)		(9,584)		621
Income before income taxes	128,219		86,022		326,720		202,811
Provision for income taxes	33,724		21,558		87,534		51,963
Net income	$	94,495	$	64,464	$	239,186	$	150,848
Basic earnings per share	$	1.52	$	1.04	$	3.86	$	2.38
Diluted earnings per share	$	1.51	$	1.04	$	3.84	$	2.37
Dividends declared per share	$	0.28	$	0.28	$	0.84	$	0.84
Weighted average shares outstanding:
Basic	62,064		61,882		62,028		63,463
Diluted	62,453		62,102		62,300		63,666

See notes to unaudited consolidated financial statements.

1

Maximus, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in thousands)

(Unaudited)

	Three Months Ended June 30,				Nine Months Ended June 30,
	2021		2020		2021		2020
Net income	$	94,495	$	64,464	$	239,186	$	150,848
Net unrealized losses on cash flow hedge, net of taxes of $379, $—, $379 and $—, respectively	(1,062)		—		(1,062)		—
Foreign currency translation adjustments	(24)		3,432		7,669		(1,304)
Comprehensive income	$	93,409	$	67,896	$	245,793	$	149,544

See notes to unaudited consolidated financial statements.

2

Maximus, Inc.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

	June 30, 2021		September 30, 2020
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	96,110	$	71,737
Accounts receivable — billed and billable, net of allowance of $6,607 and $6,051	794,653		622,871
Accounts receivable — unbilled	334,666		163,332
Income taxes receivable	454		2,075
Prepaid expenses and other current assets	81,479		72,543
Total current assets	1,307,362		932,558
Property and equipment, net	67,794		66,721
Capitalized software, net	45,739		38,033
Operating lease right-of-use assets	186,944		177,159
Goodwill	1,757,795		593,129
Intangible assets, net	892,487		145,893
Deferred contract costs, net	37,020		20,891
Deferred compensation plan assets	47,041		36,819
Deferred income taxes	506		1,915
Other assets	27,905		11,584
Total assets	$	4,370,593	$	2,024,702
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	420,510	$	253,338
Accrued compensation and benefits	181,559		137,101
Deferred revenue	68,846		51,655
Income taxes payable	19,763		5,377
Current portion of long-term debt and other borrowings	60,586		10,878
Operating lease liabilities	82,572		80,748
Other current liabilities	26,768		22,071
Total current liabilities	860,604		561,168
Deferred revenue, less current portion	36,051		27,311
Deferred income taxes	204,174		24,737
Long-term debt, less current portion	1,633,135		18,017
Deferred compensation plan liabilities, less current portion	44,076		38,654
Operating lease liabilities, less current portion	118,341		104,011
Other liabilities	20,765		8,985
Total liabilities	2,917,146		782,883
Shareholders’ equity:
Common stock, no par value; 100,000 shares authorized; 61,472 and 61,504 shares issued and outstanding at June 30, 2021, and September 30, 2020, respectively	535,990		513,959
Accumulated other comprehensive loss	(36,031)		(42,638)
Retained earnings	953,488		770,498
Total shareholders' equity	1,453,447		1,241,819
Total liabilities and shareholders' equity	$	4,370,593	$	2,024,702

See notes to unaudited consolidated financial statements.

3

Maximus, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended June 30,
	2021		2020
Cash flows from operations:
Net income	$	239,186	$	150,848
Adjustments to reconcile net income to cash flows from operations:
Depreciation and amortization of property and equipment and capitalized software	33,664		47,496
Amortization of intangible assets	23,718		26,734
Deferred income taxes	3,632		(5,210)
Stock compensation expense	20,823		17,558
Gain on sale of a business	—		(1,706)
Costs related to debt financing	8,509		—
Change in assets and liabilities, net of effects of business combinations
Accounts receivable — billed and billable	(83,881)		(147,626)
Accounts receivable — unbilled	(170,423)		(80,267)
Prepaid expenses and other current assets	7,542		529
Deferred contract costs	(15,773)		(1,396)
Accounts payable and accrued liabilities	116,873		48,622
Accrued compensation and benefits	34,387		33,647
Deferred revenue	23,624		2,806
Income taxes	15,165		563
Operating lease right-of-use assets and liabilities	1,077		(1,071)
Other assets and liabilities	(11,464)		4,556
Cash flows from operations	246,659		96,083
Cash flows from investing activities:
Purchases of property and equipment and capitalized software costs	(32,133)		(28,436)
Acquisitions of businesses, net of cash acquired	(1,779,473)		(2,611)
Proceeds from the sale of a business	—		3,250
Other	—		385
Cash used in investing activities	(1,811,606)		(27,412)
Cash flows from financing activities:
Cash dividends paid to Maximus shareholders	(51,625)		(52,988)
Purchases of Maximus common stock	(3,363)		(166,959)
Tax withholding related to RSU vesting	(9,818)		(10,614)
Payments for debt financing	(22,759)		—
Borrowings under new credit facilities	1,700,000		—
Other debt borrowings	585,000		421,488
Other debt repayments	(607,880)		(278,971)
Other	(2,763)		(957)
Cash provided by/(used in) financing activities	1,586,792		(89,001)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	2,830		(174)
Net increase in cash, cash equivalents, and restricted cash	24,675		(20,504)
Cash, cash equivalents, and restricted cash, beginning of period	88,561		116,492
Cash, cash equivalents, and restricted cash, end of period	$	113,236	$	95,988

See notes to unaudited consolidated financial statements.

4

Maximus, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Amounts in thousands)

(Unaudited)

 

	Common Shares Outstanding	Common Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Total
Balance at March 31, 2021	61,472	$	528,205	$	(34,945)	$	876,645	$	1,369,905
Net income	—	—		—		94,495		94,495
Foreign currency translation	—	—		(24)		—		(24)
Cash flow hedge, net of income taxes	—	—		(1,062)		—		(1,062)
Cash dividends	—	—		—		(17,211)		(17,211)
Dividends on RSUs	—	441		—		(441)		—
Stock compensation expense	—	7,344		—		—		7,344
Balance at June 30, 2021	61,472	$	535,990	$	(36,031)	$	953,488	$	1,453,447

 

	Common Shares Outstanding	Common Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Total
Balance at September 30, 2020	61,504	$	513,959	$	(42,638)	$	770,498	$	1,241,819
Net income	—	—		—		239,186		239,186
Foreign currency translation	—	—		7,669		—		7,669
Cash flow hedge, net of income taxes	—	—		(1,062)		—		(1,062)
Cash dividends	—	—		—		(51,625)		(51,625)
Dividends on RSUs	—	1,208		—		(1,208)		—
Purchases of Maximus common stock	(52)	—		—		(3,363)		(3,363)
Stock compensation expense	—	20,823		—		—		20,823
RSUs vested	20	—		—		—		—
Balance at June 30, 2021	61,472	$	535,990	$	(36,031)	$	953,488	$	1,453,447

See notes to unaudited consolidated financial statements.

5

Maximus, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Amounts in thousands)

(Unaudited)

	Common Shares Outstanding	Common Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Noncontrolling Interest		Total
Balance at March 31, 2020	61,313	$	511,023	$	(50,116)	$	677,561	$	—	$	1,138,468
Net income	—	—		—		64,464		—		64,464
Foreign currency translation	—	—		3,432		—		—		3,432
Cash dividends	—	—		—		(17,175)		—		(17,175)
Dividends on RSUs	—	419		—		(419)		—		—
Stock compensation expense	—	5,758		—		—		—		5,758
Balance at June 30, 2020	61,313	$	517,200	$	(46,684)	$	724,431	$	—	$	1,194,947

	Common Shares Outstanding	Common Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Noncontrolling Interest		Total
Balance at September 30, 2019	63,979	$	498,433	$	(45,380)	$	794,739	$	409	$	1,248,201
Net income	—	—		—		150,848		—		150,848
Foreign currency translation	—	—		(1,304)		—		—		(1,304)
Cash dividends	—	—		—		(52,988)		(409)		(53,397)
Dividends on RSUs	—	1,209		—		(1,209)		—		—
Purchases of Maximus common stock	(2,767)	—		—		(166,959)		—		(166,959)
Stock compensation expense	—	17,558		—		—		—		17,558
RSUs vested	101	—		—		—		—		—
Balance at June 30, 2020	61,313	$	517,200	$	(46,684)	$	724,431	$	—	$	1,194,947

See notes to unaudited consolidated financial statements.

6

Maximus, Inc.

Notes to Unaudited Consolidated Financial Statements

For the Three and Nine Months Ended June 30, 2021 and 2020

1. Organization and Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. As permitted by these instructions, they do not include all of the information and notes required by generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation are included. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended June 30, 2021, are not necessarily indicative of the results that may be expected for the full fiscal year. The balance sheet at September 30, 2020, has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements.

These financial statements should be read in conjunction with the consolidated audited financial statements and the notes thereto at September 30, 2020 and 2019, and for each of the three years in the period ended September 30, 2020, included in our Annual Report on Form 10-K which was filed with the Securities and Exchange Commission on November 19, 2020.

Estimates

The preparation of these financial statements, in conformity with GAAP in the United States, 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 goodwill and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation.

We base our estimates on historical experience and expectations of the future that we believe to be reasonable. The economic and political effects of the coronavirus (COVID-19) global pandemic increase uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates may be subject to greater volatility than has been the case in the past.

•Our balance sheet includes goodwill valued at $1.76 billion. This balance is allocated between reporting units, which are consistent with our three operating segments. Goodwill is not amortized but is tested for impairment when necessary and no less than once per year. We performed our last annual goodwill impairment test as of July 1, 2020, using a qualitative assessment. There has been no indication of impairment of any reporting unit at this time or since.

•Our balance sheet includes a number of long-lived assets, including property and equipment, capitalized software, operating lease right-of-use assets, deferred contract costs and intangible assets. These assets are depreciated or amortized over their estimated useful economic lives but are subject to impairment if events indicate that the carrying amounts may not be recoverable. At this time, there are no balances which we believe are not recoverable.

•Included within our long-lived assets are $892.5 million of intangible assets, which have been acquired through business combinations. We use judgment in identifying, valuing, and assigning a useful economic life to assets as they are acquired. The judgments required vary with the type of asset but may include projections of future results, estimated costs to recreate or replace assets, the cost of utilizing other, similar assets provided by a third party and an appropriate cost of capital. Where appropriate, we utilize the services of a third-party specialist to assist us in these valuations.

•Our balance sheet includes $1.13 billion of billed, billable and unbilled accounts receivable, net of allowance for credit losses. Beginning October 1, 2020, we have evaluated credit risk under ASC Topic 326, as further described below. Credit risk has not historically been significant to our business due to the nature of our customers. During the three and nine months ended June 30, 2021, we recorded changes to our estimated credit losses of $0.1 million and $1.0 million, respectively.

•As disclosed in "Note 3. Revenue Recognition," revenue for some of our employment services contracts in the Outside the U.S. Segment is based upon achievement of future outcomes as defined in each contract. Specifically, we are paid as individuals attain employment goals, which may take many months to achieve. Revenue is recognized on these contracts over the period of performance. Employment markets worldwide

7

suffered a significant shock during fiscal year 2020 due to COVID-19, which resulted in significant reductions in work performed and outcomes reached. Although we are seeing recovery in fiscal year 2021, this revenue remains subject to volatility.

•As disclosed in "Note 5. Business Combinations," we have acquired two businesses during fiscal year 2021. For assets acquired and liabilities assumed, we are required to identify and recognize these balances at their fair value as of the date of acquisition. We are still in the process of completing the valuations of these assets and, accordingly, there may be changes in these balances.

Changes in financial reporting

In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This accounting guidance requires customers in cloud-computing arrangements to identify and defer certain implementation costs in a manner broadly consistent with that of existing guidance on the costs to develop or obtain internal-use software. Costs capitalized under this guidance will be expensed over the term of the cloud computing arrangement. We adopted this guidance on October 1, 2020, using a prospective approach.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update introduces a new model for recognizing credit losses on financial instruments, including losses on accounts receivable. This update replaced the existing incurred loss impairment model with an expected loss model. We adopted this guidance on October 1, 2020, with no material impact to our financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This standard will not change the manner in which we would identify a goodwill impairment but would change any subsequent calculation of an impairment charge. We adopted this standard on October 1, 2020. The effect of this new standard will depend upon the outcome of future goodwill impairment tests.

2. Segment Information

We conduct our operations through three business segments: U.S. Services, U.S. Federal Services, and Outside the U.S.

•Our U.S. Services Segment provides a variety of business process services (BPS) such as program administration, appeals and 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. Addressing societal macro trends such as aging populations and rising costs, the segment continues to execute on its clinical evolution strategy by expanding its clinical offerings in public health with new work in contact tracing, disease investigation, and vaccine distribution support services as part of the governments' COVID-19 response efforts. The segment also successfully expanded into the unemployment insurance market, supporting more than 15 states in their unemployment insurance programs.

•From technology solutions to program administration and operations, our U.S. Federal Services Segment delivers end-to-end solutions that help various U.S. federal agencies better deliver on their mission. This also includes appeals and assessments services, system and application development, IT modernization, and maintenance services. The segment also contains certain state-based assessments and appeals work that is part of the segment's heritage within the Medicare Appeals portfolio which continues to be managed within this segment. Propelled by the Maximus Attain platform, the segment executes on its digital strategy to deliver technology solutions that advance agency missions, including the charge to modernize, provide better customer experience, and drive process efficiencies. The segment continues to expand its clinical solutions and manages the clinical evaluation process for U.S. veterans and service members on behalf of the U.S. Department of Veterans Affairs. The segment further supports clinical offerings in public health with new work supporting the U.S. Federal Government's COVID-19 response efforts. This included expanded work with the Centers for Disease Control and Prevention (CDC) for their helpline and increased support for the IRS Wage and Investment Division's response efforts to general inquiries regarding the Coronavirus Aid Relief & Economic Security (CARES) Act and Economic Impact Payment Service Plan.

•Delivering support to people from different backgrounds, cultures and communities, our Outside the U.S. Segment provides BPS for international governments and commercial clients. Helping people find

8

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 (U.K.), including the Health Assessment Advisory Service (HAAS), the Work & Health Programme, Fair Start, and Restart; Australia, including jobactive and the Disability Employment Service; Canada, including Health Insurance British Columbia and the Employment Program of British Columbia; in addition to Italy, Saudi Arabia, Singapore, South Korea, and Sweden, where we predominantly provide employment support and job seeker services.

Expenses that are not specifically included in the segments are included in other categories, including amortization of intangible assets and the direct costs of acquisitions. These costs are excluded from measuring each segment's operating performance.

	Three Months Ended June 30,						Nine Months Ended June 30,
(in thousands)	2021		% (1)	2020		% (1)	2021		% (1)	2020		% (1)
Revenue:
U.S. Services	$	436,338		$	336,950		$	1,269,487		$	957,929
U.S. Federal Services	617,601			450,143			1,352,982			1,210,105
Outside the U.S.	189,581			114,244			525,885			369,667
Total	$	1,243,520		$	901,337		$	3,148,354		$	2,537,701
Gross profit:
U.S. Services	$	104,814	24.0%	$	93,029	27.6%	$	323,256	25.5%	$	268,073	28.0%
U.S. Federal Services	155,776		25.2%	84,723		18.8%	312,405		23.1%	232,502		19.2%
Outside the U.S.	31,266		16.5%	7,851		6.9%	92,908		17.7%	13,576		3.7%
Total	$	291,856	23.5%	$	185,603	20.6%	$	728,569	23.1%	$	514,151	20.3%
Selling, general & administrative expense:
U.S. Services	$	42,606	9.8%	$	31,996	9.5%	$	116,655	9.2%	$	102,633	10.7%
U.S. Federal Services	69,647		11.3%	45,490		10.1%	172,877		12.8%	131,455		10.9%
Outside the U.S.	22,973		12.1%	13,668		12.0%	65,018		12.4%	47,125		12.7%
Gain on sale of business (3)	—		NM	(1,706)		NM	—		NM	(1,706)		NM
Other (2)	4,903		NM	134		NM	9,948		NM	4,155		NM
Total	$	140,129	11.3%	$	89,582	9.9%	$	364,498	11.6%	$	283,662	11.2%
Operating income:
U.S. Services	$	62,208	14.3%	$	61,033	18.1%	$	206,601	16.3%	$	165,440	17.3%
U.S. Federal Services	86,129		13.9%	39,233		8.7%	139,528		10.3%	101,047		8.4%
Outside the U.S.	8,293		4.4%	(5,817)		(5.1)%	27,890		5.3%	(33,549)		(9.1)%
Amortization of intangible assets	(12,132)		NM	(8,712)		NM	(23,718)		NM	(26,734)		NM
Gain on sale of business (3)	—		NM	1,706		NM	$	—	NM	1,706		NM
Other (2)	(4,903)		NM	(134)		NM	(9,948)		NM	(4,155)		NM
Total	$	139,595	11.2%	$	87,309	9.7%	$	340,353	10.8%	$	203,755	8.0%

(1) Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.”

(2) Other selling, general, and administrative expenses includes credits and costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed. Our results for the three and nine months ended June 30, 2021, included $5.6 million and $8.8 million, respectively, of expenses relating to the acquisitions of Attain, LLC, and VES Group, Inc. For more information, see "Note 5. Business Combinations."

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(3) During fiscal year 2020, we sold Q2 Administrators LLC, a subsidiary within our U.S. Federal Services Segment, resulting in a gain.

Identifiable assets for the segments are shown below. Identifiable assets for U.S. Federal Services increased due to the acquisitions of Attain, LLC and VES Group, Inc. Refer to "Note 5. Business Combinations" for details.

(in thousands)	June 30, 2021		September 30, 2020
U.S. Services	$	728,347	$	702,728
U.S. Federal Services	3,149,694		937,477
Outside the U.S.	304,952		224,532
Corporate	187,600		159,965
Total	$	4,370,593	$	2,024,702

3. Revenue Recognition

We recognize revenue as, or when, we satisfy performance obligations under a contract. The majority of our contracts have performance obligations which are satisfied over time. In most cases, we view our performance obligations as promises to transfer a series of distinct services to our customers that are substantially the same and which have the same pattern of service. We recognize revenue over the performance period as a customer receives the benefits of our services.

Disaggregation of revenue

In addition to our segment reporting, we disaggregate our revenues by service, contract type, customer type, and geography. Our operating segments represent the manner in which our Chief Executive Officer reviews our financial results, which is further discussed in "Note 2. Segment Information."

By operating segment and service

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
Program administration	$	325,755	$	251,616	$	964,981	$	724,960
Assessments and appeals	33,529		40,875		101,561		104,621
Workforce and children services	64,240		32,531		167,106		90,651
Other	12,814		11,928		35,839		37,697
Total U.S. Services	$	436,338	$	336,950	$	1,269,487	$	957,929
Program administration	$	451,594	$	362,973	$	1,005,706	$	949,071
Technology solutions	89,559		42,101		187,006		130,172
Assessments and appeals	76,448		45,069		160,270		130,862
Total U.S. Federal Services	$	617,601	$	450,143	$	1,352,982	$	1,210,105
Workforce and children services	$	94,310	$	55,046	$	269,743	$	146,968
Assessments and appeals	58,664		42,468		169,753		167,397
Program administration	34,296		15,544		80,284		49,583
Other	2,311		1,186		6,105		5,719
Total Outside the U.S.	$	189,581	$	114,244	$	525,885	$	369,667
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

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By contract type

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
Performance-based	$	389,800	$	295,650	$	1,033,509	$	864,077
Cost-plus	282,808		422,641		953,373		1,184,425
Fixed price	146,175		132,535		413,296		352,255
Time and materials	424,737		50,511		748,176		136,944
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

By customer type

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
New York State government agencies	$	102,195	$	79,140	$	289,462	$	276,585
Other U.S. state government agencies	329,792		265,608		976,336		692,689
Total U.S. state government agencies	431,987		344,748		1,265,798		969,274
U.S. Federal Government agencies	594,771		429,031		1,288,213		1,155,773
International government agencies	180,049		107,353		499,091		345,629
Other, including local municipalities and commercial customers	36,713		20,205		95,252		67,025
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

By geography

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
United States	$	1,053,940	$	787,092	$	2,622,469	$	2,168,033
United Kingdom	74,109		53,364		211,777		190,088
Australia	65,283		38,415		192,161		100,390
Rest of world	50,188		22,466		121,947		79,190
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

Contract balances

Differences in timing between revenue recognition and cash collection result in contract assets and contract liabilities. We classify these assets as accounts receivable — billed and billable and unbilled receivables; the liabilities are classified as deferred revenue.

In many contracts, we bill our customers on a monthly basis shortly after the month end for work performed in that month and such balances are considered collectible and are included within accounts receivable — billed and billable.

Exceptions to this pattern will arise for various reasons, including those listed below.

•Under cost-plus contracts, we are typically required to estimate a contract’s share of our general and administrative expenses. This share is based upon estimates of total costs which may vary over time. We typically invoice our customers at an agreed provisional billing rate which may differ from actual rates incurred. If our actual rates are higher than the provisional billing rates, an asset is recorded for this variance; if the provisional billing rates are higher than our actual rates, we record a liability.

•Certain contracts include retainage balances, whereby revenue is earned but some portion of cash payments are held back by the customer for a period of time, typically to allow the customer to confirm the objective criteria laid out by the contract have been met. This balance is classified as accounts receivable - unbilled until restrictions on billing are lifted.

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•In certain contracts, we may receive funds from our customers prior to performing operations. These funds are typically referred to as “set-up costs” and reflect the need for us to make investments in infrastructure prior to providing a service. This investment in infrastructure is not a performance obligation which is distinct from the service that is subsequently provided and, as a result, revenue is not recognized based upon the establishment of this infrastructure, but rather over the course of the contractual relationship. The funds are initially recorded as deferred revenue and recognized over the term of the contract. Other contracts may not include set-up fees but will provide higher fees in earlier periods of the contract. The premium on these fees is deferred.

•Some of our contracts, notably our employment services contracts in the Outside the U.S. Segment, include payments for desired outcomes, such as job placement and job retention and these outcome payments occur over several months. We are required to estimate these outcome fees ahead of their realization and recognize this estimated fee over the period of delivery.

Of our revenue for the three and nine months ended June 30, 2021, approximately $7.5 million and $36.7 million, respectively, were from cash payments made to us prior to October 1, 2020. For the three and nine months ended June 30, 2020, we recognized revenue of $9.1 million and $49.2 million, respectively, from payments made prior to October 1, 2019.

Contract estimates

We are required to use estimates in recognizing revenue from some of our contracts. As discussed in "Note 1. Organization and Basis of Presentation," the calculation of these estimates has been complicated by the COVID-19 pandemic, which has reduced our ability to use past results to estimate future performance.

Some of our performance-based contract revenue is recognized based upon future outcomes defined in each contract. This is the case in many of our employment services contracts in the Outside the U.S. Segment, where we are paid as individuals attain employment goals, which may take many months to achieve. We recognize revenue on these contracts over the period of performance. Our estimates vary from contract to contract but may include estimates of the number of participants, the length of the contract, and the participants reaching employment milestones. We are required to estimate these outcome fees ahead of their realization and recognize this estimated fee over the period of delivery. In almost all of the jurisdictions in which we operate, the employment markets have experienced significant changes due to the COVID-19 pandemic. As the pandemic commenced, many employment opportunities were terminated. Our volume of new program participants is beginning to increase as governments shift their focus to addressing the residual impacts of the pandemic, such as the economy and unemployment, particularly in those countries where the pandemic has stabilized, and economies are beginning to reopen.

Other performance-based contracts with future outcomes include those where we recognize an average effective rate per participant based upon the total volume of expected participants. In this instance, we are required to estimate the amount of discount applied to determine the average rate of revenue per participant. Our revised estimates of participant numbers are based upon our updated evaluation of probable future volumes.

Where we make changes to our estimates, these are recognized on a cumulative catch-up basis. In the three and nine months ended June 30, 2021, we reported a benefit to revenue of $1.8 million and $17.8 million, respectively, and a benefit to diluted earnings per share of $0.03 and $0.20, respectively, from changes in estimates. The corresponding change in fiscal year 2020 was a decline of $1.4 million and $9.1 million for the three and nine months ended June 30, 2020, respectively.

Remaining performance obligations

At June 30, 2021, we had approximately $635 million of remaining performance obligations. We anticipate that we will recognize revenue on approximately 42% of this balance within the next 12 months. This balance excludes contracts with an original duration of twelve months or less, including contracts with a penalty-free termination for convenience clause, and any variable consideration which is allocated entirely to future performance obligations, including variable transaction fees or fees tied directly to costs incurred.

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4. Earnings Per Share

The weighted average number of shares outstanding used to compute earnings per share was as follows:

	Three Months Ended June 30,		Nine Months Ended June 30,
(shares in thousands)	2021	2020	2021	2020
Basic weighted average shares outstanding	62,064	61,882	62,028	63,463
Dilutive effect of unvested RSUs	389	220	272	203
Denominator for diluted earnings per share	62,453	62,102	62,300	63,666

Our dilutive earnings per share for the three and nine months ended June 30, 2021 excludes the effect from approximately 0.1 million and 0.2 million unvested restricted stock units, respectively, as adding them to our calculation would be antidilutive. Our diluted earnings per share for the three and nine months ended June 30, 2020, excludes any effect from approximately 0.3 million and 0.3 million unvested restricted stock units, respectively, as adding them to our calculation would have been antidilutive.

5. Business Combinations

VES Group, Inc. (VES)

On May 28, 2021, we acquired all of VES for an estimated cash purchase price of $1.37 billion (the Acquisition). The final purchase price is subject to adjustment and is expected to be finalized during our fourth fiscal quarter of 2021. This business was integrated into our U.S. Federal Services Segment and is expected to increase revenue attributable to providing independent and conflict-free clinical business process outsourcing (BPO) services at scale. The Acquisition also supports our ongoing strategic priority of expansion into the U.S. Federal market and creates new opportunities to apply digital solutions to improve citizen services. We entered into a new credit agreement to fund the Acquisition. See "Note 6 - Debt" for further details. The results of operations for VES are included in the consolidated results of Maximus, Inc. starting May 28, 2021.

At this time, we are in the process of finalizing the purchase price and the valuation of all acquired assets and assumed liabilities. The balances below represent our best estimate and are subject to change:

(in thousands)	Estimated Fair Value of Assets and Liabilities
Cash consideration paid, net of cash acquired	$	1,360,231
Estimated additional cash payments	7,494
Estimated cash consideration, net of cash acquired	$	1,367,725
Accounts receivable - billed, billable and unbilled	$	44,078
Prepaid expenses and other current assets	13,911
Property and equipment, net	9,113
Operating lease right-of-use assets	18,898
Intangible assets	664,000
Other assets	12,816
Total identifiable assets acquired	762,816
Accounts payable and accrued compensation	42,978
Operating lease liabilities	18,898
Income taxes payable	6,196
Deferred income taxes	177,626
Other long-term liabilities	6,667
Net identifiable assets acquired	510,451
Goodwill	857,274
Net assets acquired	$	1,367,725

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Goodwill represents the value of the assembled workforce and the enhanced knowledge, capabilities, and qualifications held by the business. This goodwill balance is not expected to be deductible for tax purposes.

Our evaluation of the intangible assets acquired with VES has identified three assets. The assets were valued using methods which required a number of estimates and, accordingly, they are considered Level 3 measurements within the Accounting Standard Codification No. 820 (ASC 820) fair value methodology.

•Customer relationships represent the value of the existing contractual relationships with the United States Federal Government. These were valued using the excess earnings method, which required us to utilize estimated future revenues and earnings from contracts.

•VES maintains a provider network of third-party providers that assist in the performance of their clinical services. This network was valued using the cost method, which included both the cost of recreating such a network and the profits foregone during the time which would be required to recreate the network.

•VES maintained proprietary technology which interacted with U.S. Federal Government systems, facilitated the transmission of examination data and supported the performance of the contracts. We valued the technology using a relief-from-royalty method, which required us to estimate future revenues and an arms' length royalty rate that a third-party provider might use to supply this service.

A summary of the asset values and asset lives is as follows:

(in thousands)	Estimated Straight-Line Useful Life	Estimated Fair Value
Customer contracts and relationships	12 years	$	580,000
Provider network	12 years	57,000
Technology-based intangible assets	14 years	27,000
Total intangible assets		$	664,000

In connection with certain liabilities acquired in the VES acquisition, we have established a liability of $12.0 million for a billing dispute between VES and its customer relating to prior year billings. Our exposure is partially offset by an indemnification asset of $6.0 million. In the event that this dispute is settled for less than $6.0 million, we will return the indemnification asset to the sellers (as well as any difference between the settlement amount and $6.0 million). In the event that the settlement exceeds $6.0 million, we are entitled to utilize the indemnification asset, and if the settlement exceeds $12.0 million, pursue other recourse permitted under the purchase agreement. At this time $12.0 million remains our best estimate of this liability. In addition, we have established a tax liability of $11.8 million for uncertain tax positions within VES, partially offset by another indemnification asset of $6.7 million. Both indemnification assets are secured in third party escrow accounts and we have recourse to other funds in the event these contingencies exceed the escrow balances.

From the acquisition date of May 28, 2021 through June 30, 2021, the acquired business contributed revenue of $45.8 million and gross profit of $19.5 million. Amortization of intangible assets for the period through June 30, 2021 was $4.6 million.

The Federal division of Attain, LLC (Attain)

On March 1, 2021, we acquired all of Attain for a cash purchase price of $419.1 million. This business was integrated into our U.S. Federal Services Segment and is expected to strengthen our position to further design, develop, and deliver more innovative, impactful solutions and drive automation of processes to improve citizen engagement and the delivery of critical federal programs, as well as expand our presence in the U.S. Federal market. We utilized borrowings on the credit facility we had in place at the time, as well as cash on our balance sheet to fund the acquisition. The results of operations for Attain are included in our results from March 1, 2021.

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We are in the process of finalizing the valuation as of March 1, 2021, of all acquired assets and assumed liabilities and, accordingly, the balances below represent our best estimate and are subject to change:

(in thousands)	Estimated fair value of assets and liabilities at acquisition date as of March 31, 2021		Adjustments		Estimated fair value of assets and liabilities at acquisition date as of June 30, 2021
Cash consideration, net of cash acquired	$	419,864	$	(767)	$	419,097
Accounts receivable - billed, billable and unbilled	$	39,274	$	101	$	39,375
Prepaid expenses and other current assets	1,336		(410)		926
Property and equipment, net	703		(703)		—
Operating lease right-of-use assets	25,089		(129)		24,960
Other assets	84		(10)		74
Intangible assets	105,000		—		105,000
Total identifiable assets acquired	171,486		(1,151)		170,335
Accounts payable and other liabilities	28,301		562		28,863
Operating lease liabilities, less current portion	26,786		(385)		26,401
Net identifiable assets acquired	116,399		(1,328)		115,071
Goodwill	303,465		561		304,026
Net assets acquired	$	419,864	$	(767)	$	419,097

Goodwill represents the value of the assembled workforce and the enhanced knowledge, capabilities, and qualifications held by the business. This goodwill balance is expected to be deductible for tax purposes.

The intangible assets acquired represent customer relationships. We estimated this balance using the excess earnings method (which is a Level 3 measurement within the ASC 820 fair value hierarchy) and used a number of estimates, including expected future earnings from the acquired business and an appropriate expected rate of return. We have assumed a useful economic life of ten years, representing our expectation of the period over which we will receive the benefit.

During the three and nine months ended June 30, 2021, the acquired business contributed revenue of $56.4 million and $74.8 million, respectively, and gross profit of $13.2 million and $17.1 million, respectively.

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VES and Attain

The following table presents certain pro forma results for the three and nine months ended June 30, 2021 and 2020 and the twelve months ended June 30, 2021, as though the acquisitions of both VES and Attain had occurred on October 1, 2019. The twelve month information is consistent with that utilized in our debt covenant calculations. This pro forma information is presented for information purposes only and is not necessarily indicative of the results if the acquisition had taken place on that date. The pro forma results below eliminate intercompany transactions, include amortization charges for acquired intangible assets, and estimates of interest expense based upon our total estimated borrowings, eliminate pre-acquisition transaction costs and reflect corresponding changes in our provision for income taxes. Acquisition related costs incurred by Maximus, VES and Attain have been excluded in the following pro forma results. These costs were $8.8 million, $52.2 million and $0.3 million, respectively.

	Unaudited pro forma results
	Three Months Ended June 30,				Nine Months Ended June 30,				Trailing Twelve Months Ended June 30,
(in thousands, except per share amounts)	2021		2020		2021		2020		2021
Revenue	$	1,335,780	$	996,462	$	3,566,466	$	2,934,920	$	4,645,540
Cost of revenue	1,004,523		787,189		2,679,170		2,283,589		3,503,074
Gross profit	331,257		209,273		887,296		651,331		1,142,466
Selling, general, and administrative expenses	151,321		110,754		425,062		360,370		551,143
Amortization of intangible assets	21,301		25,090		63,856		75,868		88,586
Operating income	158,635		73,429		398,378		215,093		502,737
Interest expense	8,701		9,423		26,715		28,528		36,426
Other (expense)/income, net	(7,320)		(2,126)		(10,401)		(11,755)		(11,437)
Income before income taxes	142,614		61,880		361,262		174,810		454,874
Provision for income taxes	37,123		15,549		94,735		38,897		120,248
Net income	$	105,491	$	46,331	$	266,527	$	135,913	$	334,626
Basic earnings per share	$	1.70	$	0.75	$	4.30	$	2.14	$	5.40
Diluted earnings per share	$	1.69	$	0.75	$	4.28	$	2.13	$	5.37
Dividends declared per share	$	0.28	$	0.28	$	0.84	$	0.84	$	1.12
Weighted average shares outstanding:
Basic	62,064		61,882		62,028		63,463		62,001
Diluted	62,453		62,102		62,300		63,666		62,285

Other acquisitions

On February 28, 2020, we acquired 100% of the share capital of InjuryNet Australia Pty Limited (InjuryNet) for a purchase price of $4.4 million ($6.7 million Australian Dollars), which included acquisition-related contingent consideration of $2.1 million ($3.1 million Australian Dollars) based upon future earnings. InjuryNet provides workplace medical services in Australia. The business was integrated into our Outside the U.S. Segment. We have completed our assessment of all acquired assets and liabilities assumed. We recorded estimated goodwill and intangible assets of $2.6 million and $0.9 million, respectively, related to the acquisition.

On August 21, 2020, we acquired 100% of the share capital of Index Root Korea Co. Ltd (Index Root) for an estimated purchase price of $5.4 million (6.3 billion South Korean Won), which includes acquisition-related contingent consideration estimated at $0.9 million (1.1 billion South Korean Won) based upon future earnings. We acquired Index Root to expand our geographic presence to South Korea. The business was integrated into our Outside the U.S. Segment. We have completed our assessment of all acquired assets and liabilities assumed. We recorded estimated goodwill and intangible assets of $4.6 million and $1.4 million, respectively, related to the acquisition. During the second quarter of fiscal year 2021, we concluded that payment of the contingent consideration was unlikely and, accordingly, a benefit of $1.0 million was recorded within our acquisition expenses.

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Changes in goodwill for the nine months ended June 30, 2021, were as follows:

(in thousands)	U.S. Services		U.S. Federal Services		Outside the U.S		Total
Balance as of September 30, 2020	$	164,472	$	381,719	$	46,938	$	593,129
Estimated effects of acquisitions	—		1,161,300		623		1,161,923
Foreign currency translation	—		—		2,743		2,743
Balance as of June 30, 2021	$	164,472	$	1,543,019	$	50,304	$	1,757,795

There have been no impairment charges to our goodwill.

The following table sets forth the components of intangible assets (in thousands):

	As of June 30, 2021						As of September 30, 2020
(in thousands)	Cost		Accumulated Amortization		Intangible Assets, net		Cost		Accumulated Amortization		Intangible Assets, net
Customer contracts and relationships	$	921,023	$	112,546	$	808,477	$	235,287	$	90,302	$	144,985
VES Provider network	57,000		396		56,604		—		—		—
Technology-based intangible assets	32,400		4,994		27,406		5,631		4,723		908
Trademarks and trade names	4,516		4,516		—		4,479		4,479		—
Total	$	1,014,939	$	122,452	$	892,487	$	245,397	$	99,504	$	145,893

As of June 30, 2021, our intangible assets have a weighted average remaining life of 11.2 years, comprising 11.2 years for customer contracts and relationships, 11.9 years for the provider network and 13.7 years for technology-based intangible assets. The estimated future amortization expense for the next five years for the intangible assets held by the Company as of June 30, 2021 is shown below. As noted above, we have not yet completed our assessment of the valuation of the intangible assets acquired with VES and Attain. These future amortization expenses represent our best estimate of future costs.

(In thousands)	Estimated Future Amortization Expense
Year ended September 30, 2021, Remainder of year	$	20,518
Year ended September 30, 2022	82,025
Year ended September 30, 2023	82,009
Year ended September 30, 2024	81,885
Year ended September 30, 2025	81,678
Year ended September 30, 2026	81,551

6. Debt

Concurrent with the acquisition of VES, we entered into a new credit agreement (the "Credit Agreement"), which replaced our existing revolving credit facility.

The Credit Agreement has three components.

•A five year $1.10 billion term loan with interest payable at a rate based upon the London Interbank Offered Rate (LIBOR) plus a margin dependent upon our leverage ratio. From the inception of the loan through June 30, 2021, the interest rate was LIBOR plus 1.75%.

•A seven year $400.0 million term loan with interest payable at the higher of LIBOR or 0.5%, plus 2.0%. From the inception of the loan through June 30, 2021, the interest rate was 2.5%.

•A $600.0 million revolving credit facility, which is repayable in full in May 2026. Interest on the revolving credit facility is based upon LIBOR plus a margin dependent upon our leverage ratio. From the inception of the loan through June 30, 2021, the interest rate was LIBOR plus 1.75%.

LIBOR is anticipated to be phased out over the next 18 months and alternative benchmark rates have been identified in this agreement. This is the only significant arrangement within the Company that utilizes LIBOR.

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The Credit Agreement is available for general corporate purposes, including the funding of working capital, capital expenditures and possible future acquisitions. In addition to borrowings, it allows us to continue to issue letters of credit when necessary. The Credit Agreement includes a number of covenants, the terms of which are customary and include a net total leverage ratio and a net interest coverage ratio. The net total leverage ratio is calculated as total outstanding debt less unrestricted cash, not to exceed $75.0 million. With certain exceptions, the leverage ratio does not permit our total indebtedness to exceed four times our EBITDA, as defined by the Credit Agreement, calculated over the previous twelve months. We are in compliance with those covenants at this time, with a calculated net total leverage ratio of 2.4:1. We do not believe that the covenants represent a significant restriction to our ability to successfully operate the business or to pay our dividends.

Costs incurred in establishing the Credit Agreement have been reported as a reduction to the gross debt balance and will be amortized over the respective lives of the arrangements. Prior to the completion of the acquisition of VES, we entered into a bridging loan facility to ensure that funds were available in the event that our new credit facility would not be available in time. We did not use this interim facility. The $8.5 million cost of this facility was included within "other (expense)/income, net" on our consolidated statements of operations for the three and nine months ended June 30, 2021.

We estimate the fair value of its debt by discounting the future cash flows of each instrument using estimated market rates of debt instruments with similar maturities and credit profiles. These inputs are classified as Level 3 within the fair value hierarchy. At June 30, 2021, the carrying value reported in the consolidated balance sheet for our long-term debt approximated its fair value.

In addition to the Credit Agreement, we hold smaller credit facilities in Australia and the United Kingdom. These allow our businesses to borrow to meet any short-term working capital needs.

Our debt balances at June 30, 2021 and September 30, 2020 were as follows:

(in thousands)	June 30, 2021		September 30, 2020
Five year, $1.1 billion loan	$	1,100,000	$	—
Seven year, $400 million loan	400,000		—
New $600 million revolving credit facility	200,000		—
Old $400 million revolving credit facility	—		—
Subsidiary loan agreements	7,754		28,895
Total debt principal	1,707,754		28,895
Less unamortized debt-issuance costs and discounts	(14,033)		—
Total debt	1,693,721		28,895
Less current portion	(60,586)		(10,878)
Long-term debt	$	1,633,135	$	18,017

The scheduled repayments of our debt balance is as follows:

(In thousands)	Scheduled Debt Repayments
Year ended September 30, 2021, Remainder of year	$	15,724
Year ended September 30, 2022	62,895
Year ended September 30, 2023	68,761
Year ended September 30, 2024	86,500
Year ended September 30, 2025	91,656
Thereafter	1,382,218
Total debt principal	$	1,707,754

Derivative - Interest rate swap

In June 2021, we entered into an interest rate swap agreement for a notional amount of $300.0 million, effective June 28, 2021, with an expiration date of May 28, 2026, which hedged the floating LIBOR on a portion of the term loan (Tranche A, $1.10 billion balance) under the Credit Agreement to a fixed rate of 0.986%. We elected to designate this interest rate swap as a cash flow hedge for accounting purposes. At June 30, 2021, our derivative was in a $1.4 million net liability position and recorded in "other current liabilities" on our consolidated balance sheet. As this cash flow hedge is considered effective, any future gains and losses will be reflected within

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Accumulated Other Comprehensive Income in the Consolidated Statements of Comprehensive Income. No ineffectiveness was recorded on this contract during the three or nine months ended June 30, 2021.

We are exposed to credit losses in the event of nonperformance by the counterparty to our derivative instrument. Our counterparty has investment grade credit ratings; accordingly, we anticipate that the counterparty will be able to fully satisfy its obligations under the contracts. Our agreements outline the conditions upon which it or the counterparty are required to post collateral. At June 30, 2021,we had no collateral posted with its counterparty related to the derivatives.

The only assets or liabilities we had at June 30, 2021 that are recorded at fair value on a recurring basis is the interest rate swaps. Generally, the Company obtains its Level 2 pricing inputs from its counterparties. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

7. Supplemental Disclosures

Under a resolution adopted in March 2020, the Board of Directors authorized the purchase, at management's discretion, of up to $200 million of our common stock. This supplemented a similar resolution adopted in June 2018. During the nine months ended June 30, 2021, we purchased approximately 52,000 shares of our common stock at a cost of $3.4 million. During the nine months ended June 30, 2020, we purchased approximately 2,767,000 shares of our common stock at a cost of $167.0 million. At June 30, 2021, $146.7 million remained available for future stock repurchases.

During the nine months ended June 30, 2021, we granted approximately 366,000 restricted stock units (RSUs) to our employees. Most of these awards will vest ratably over four years, as opposed to five years in previous years. In addition, we awarded approximately 85,000 performance stock units in the nine months ended June 30, 2021, to certain executives that will vest at the end of a three-year performance period with the actual number of vested units dependent upon the Company's achievement of certain performance targets.

Our deferred compensation plan uses both mutual fund and life insurance investments to fund its obligations. The mutual funds are recorded at fair value, based upon quoted prices in active markets (Level 1), and the life insurance investments at cash surrender value; changes in value are reported in our consolidated statements of operations. At June 30, 2021, the deferred compensation plan held $28.9 million of the mutual fund investments.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and other amounts included within current assets and liabilities that meet the definition of a financial instrument are shown at values equivalent to fair value due to the short-term nature of these items. Our accounts receivable billed and billable balance includes both amounts invoiced and amounts that are ready to be invoiced where the funds are collectible within standard invoice terms. Our accounts receivable unbilled balance includes balances where revenue has been earned but contractual terms preclude invoicing at June 30, 2021. Restricted cash represents funds which are held in our bank accounts but which we are precluded from using for general business needs through contractual requirements; these requirements include serving as collateral for lease, credit card, or letter of credit arrangements, or where we hold funds on behalf of clients. Restricted cash is included within "prepaid expenses and other current assets" on our consolidated balance sheets and is included within "cash, cash equivalents, and restricted cash" in our consolidated statements of cash flows. A reconciliation of these balances is shown below.

	Balance as of
(in thousands)	June 30, 2021		September 30, 2020		June 30, 2020
Cash and cash equivalents	$	96,110	$	71,737	$	81,548
Restricted cash (recorded within "prepaid expenses and other current assets")	17,126		16,824		14,440
Cash, cash equivalents, and restricted cash	$	113,236	$	88,561	$	95,988

As noted in "Note 6 - Debt", we recently entered into new long term debt arrangements. Accordingly, we believe the balances disclosed approximates the fair value.

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Supplementary Cash Flow Information

	Nine Months Ended June 30,
(in thousands)	2021		2020
Interest payments	$	4,751	$	1,200
Income tax payments	68,031		55,600
Cash payments included in the measurement of lease liabilities	75,172		83,700
Operating lease liabilities arising from new or remeasured right-of-use assets	18,537		39,900

8. 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, and otherwise in connection with performing services in countries outside of the U.S. Adverse findings could lead to criminal, civil, or administrative proceedings, and we could be faced with penalties, fines, suspension, or debarment. Adverse findings could also have a material adverse effect on us because of our reliance on government contracts. We are subject to periodic audits by federal, state, local, and foreign governments for taxes. We are also involved in various claims, arbitrations, and lawsuits arising in the normal conduct of our business. These include but are not limited to bid protests, employment matters, contractual disputes, and charges before administrative agencies. Although we can give no assurance, based upon our evaluation and taking into account the advice of legal counsel, we do not believe that the outcome of any existing matter would likely have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

Medicaid claims

The Centers for Medicare and Medicaid Services (CMS) asserted two disallowances against a state Medicaid agency. The state contested the first disallowance and ultimately settled that claim for approximately $7.3 million. The second disallowance of approximately $19.9 million is still being contested by the state. The state is seeking reimbursement from us for the first disallowance ($7.3 million) and has indicated its intention to seek reimbursement of the second disallowance if its legal challenge is unsuccessful. From 2004 through 2009, we had a contract with the state agency in support of its school-based Medicaid claims. We entered into separate agreements with the school districts under which we assisted the districts with preparing and submitting claims to the state Medicaid agency which, in turn, submitted claims for reimbursement to CMS. The state has asserted that its agreement with us requires us to reimburse the state for the amounts owed to CMS. However, our agreements with the school districts require them to reimburse us for such amounts, and therefore we believe the school districts are responsible for any amounts that ultimately must be refunded to CMS. Although it is reasonably possible that a court could conclude we are responsible for the full balance of the disallowances, we believe our exposure in this matter is limited to our fees associated with this work and that the school districts will be responsible for the remainder. We have reserved our estimated fees earned from this engagement relating to the disallowances. We exited the federal healthcare-claiming business in 2009 and no longer provide the services at issue in this matter.

9. Subsequent Events

On July 9, 2021, our Board of Directors declared a quarterly cash dividend of $0.28 for each share of our common stock outstanding. The dividend is payable on August 31, 2021, to shareholders of record on August 13, 2021. Based upon the number of shares outstanding, we anticipate a cash payment of approximately $17.2 million.

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Item 2.                   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of financial condition and results of operations is provided to enhance the understanding of, and should be read in conjunction with, our Consolidated Financial Statements and related Notes included both herein and in our Annual Report on Form 10-K for the year ended September 30, 2020, which was filed with the Securities and Exchange Commission on November 19, 2020.

Business Overview

We are a U.S.-based global company with approximately 34,000 employees dedicated to helping governments on four continents administer their health and human services programs. We help people connect to and interact with vital government programs so that they receive the necessary support they are eligible to receive. The demand for the provision of these services is driven by numerous factors including aging populations with complex healthcare needs; rising living standards in emerging markets creating new demands for our services; growing complexity of programs, such as evolving eligibility requirements; the creation of new programs and initiatives such as long-term services and support, and the urgent need to support a surge in demand to help governments respond to the public health emergency. The coronavirus (COVID-19) global pandemic has required governments to implement new operational models to ensure public safety and this has led to an increased appetite for public-private partnerships due to availability of increased flexibility, scalability, and accountability, particularly in a time when government customers are looking for ways to dramatically increase services to meet the surging demand and subsequent strain on their agencies.

Maximus operates in a sector with relatively few environmental and social-issue risks but many opportunities, particularly ones that enable us to improve the lives of individuals and families, and provide meaningful opportunities to our employees. We run programs that connect people with disabilities and long-term health conditions to sustainable, long-term employment and we help people, including many of society's most vulnerable populations, access, connect to, and use government benefit programs, such as Medicaid and Medicare.

The pandemic resulted in both favorable and unfavorable impacts to Maximus. Underscoring the importance of the services we provide, many of our U.S. contracts were designated as ‘‘essential’’ by government agencies in the midst of the pandemic. Continued operations of these programs ensure vulnerable individuals and families can access vital healthcare and safety-net services during these uncertain times. Due to the pandemic, some of the programs we support experienced temporary changes at the direction of our customers which reduced volume, revenue, and profit on certain large programs. However, we have also been successful in winning new contracts tied to the urgent need to support public health initiatives such as contact tracing, disease investigation, unemployment insurance programs, and supporting efforts around vaccine administration, scheduling, and registration to help governments slow the spread of COVID-19. The individuals and families served under these programs are those considered some of the most vulnerable to COVID-19, and we believe our operations support programs that are essential for their safety and wellbeing.

Our primary objective amidst this pandemic is to protect our employees while ensuring global business continuity of our essential services to help vulnerable individuals and taking responsible action to stop the virus from spreading further. The safety and wellbeing of our employees are paramount, and we made several sweeping changes to better serve our employees.

Acquisitions

To supplement our core business, we have an active program to identify potential strategic acquisitions. Our acquisitions have successfully enabled us to increase future organic growth, as well as expand our business processes, knowledge, and client relationships into adjacent markets and new geographies.

In March 2021, Maximus closed our acquisition of the Federal division of Attain, LLC (Attain). This acquisition expanded Maximus’ technology capabilities in application development and modernization, enterprise business solutions, cybersecurity, and the data sciences including advanced analytics & machine learning. These capabilities address U.S. Federal IT spending imperatives while also being applicable to our business process outsourcing (BPO) solutions. They add to our existing portfolio of technology solutions comprised of modernization of systems and information technology infrastructure; infrastructure operations and support; software development, operations and support; and data analytics. Attain’s reputation as an innovator and experience as a forward-thinking technology provider are valuable additions to the U.S. Federal Services Segment and Maximus as a whole.

On May 28, 2021, Maximus completed the acquisition of VES, a leading provider of medical disability examinations to determine Veterans’ eligibility for compensation and pension benefits. The acquisition broadens our independent and conflict free clinical BPO services at scale. The acquisition provides us with key qualifications that we believe will assist governments with challenges they face around shifting demographic and policy priorities. VES’s connection with the U.S. Department of Veterans Affairs allows Maximus to pursue new opportunities with a

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wider set of customers, both federally and state, that are seeking independent and clinically based services. VES complements the Attain combination by expanding our support of the VA and creating new opportunities to apply digital solutions to improve citizen services.

In fiscal year 2020, we acquired InjuryNet Australia Pty Limited (InjuryNet) in Australia and Index Root Korea Co. (Index Root) in South Korea, which we integrated into our Outside the U.S. Segment. The InjuryNet acquisition broadens our customer offerings to include health oriented contracts in Australia and the Index Root acquisition enabled entry into South Korea to provide employment services.

Financial Overview

The acquisitions of VES and Attain have affected our results as follows:

•Our year to date revenue and gross profit includes an additional $120.6 million and $36.6 million, respectively, attributable to these two acquisitions, which will be included in our U.S. Federal Services Segment. Given the integration of these businesses into our cost structure, it is impracticable to calculate the effect of the acquisitions on our operating income.

•We incurred acquisition expenses through June 2021, of $8.8 million relating to these transactions, principally for legal, advisory and insurance services.

•Our intangible assets increased by $769.0 million, which will be amortized over the next 14 years.

•These acquisitions have been funded by an increase in our debt. At the beginning of this fiscal year, we had no outstanding indebtedness within the United States and some international balances to cover acquisitions and general working capital matters. To fund the acquisitions, we took on $1.5 billion of fixed term debt and entered into a new revolving credit facility. While we anticipate reducing this debt over the next few quarters, the cost of this debt, including interest expenses and the cost of the debt facilities, have increased our financing costs. To comply with the terms of the VES purchase agreement, we entered into a financing commitment arrangement (the interim financing). The cost of this interim facility was approximately $8.5 million, which has been recorded in "other (income)/expense, net" on our consolidated statement of operations.

The COVID-19 pandemic, and the responses of our customers, has had an effect on our results for the three and nine months ended June 30, 2021.

•We have continued to experience significant revenue growth in new work to assist governments in their COVID-19 response efforts. This has mitigated the effect of declines in some of our established programs, particularly those which rely upon payments per transaction. The COVID-19 response work in the three and nine months ended June 30, 2021, resulted in approximately $460 million and $860 million of revenue, respectively. We anticipate COVID response work will contribute more than $1 billion for the full fiscal year 2021.

•Our Outside the U.S. Segment has experienced the most significant negative impact of the COVID-19 pandemic. In the second quarter of fiscal year 2020, we revised our estimates of job seekers who are likely to achieve employment outcomes, resulting in a decline in our estimated outcomes and a consequent decline in revenue of approximately $24.0 million. During fiscal year 2021, this business has demonstrated significant recovery principally through the improvements in performance in Australia.

Our organic growth has been partially offset by the anticipated decline in revenues from our Census Questionnaire Assistance (CQA) contract, which has concluded during fiscal year 2021. We earned $170.4 million and $313.2 million less revenue in the three and nine months ended June 30, 2021, respectively, compared to the respective periods in fiscal year 2020. In addition, a number of contracts in the start-up phase within our Outside the U.S. Segment have reported expected losses as these projects commence. They are anticipated to reach profitability in fiscal year 2022.

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Results of Operations

Consolidated

The following table sets forth, for the periods indicated, selected statements of operations data:

	Three Months Ended June 30,						Nine Months Ended June 30,
(dollars in thousands, except per share data)	2021			2020			2021			2020
Revenue	$	1,243,520		$	901,337		$	3,148,354		$	2,537,701
Cost of revenue	951,664			715,734			2,419,785			2,023,550
Gross profit	291,856			185,603			728,569			514,151
Gross profit percentage	23.5		%	20.6		%	23.1		%	20.3		%
Selling, general and administrative expenses	140,129			89,582			364,498			283,662
Selling, general and administrative expense as a percentage of revenue	11.3		%	9.9		%	11.6		%	11.2		%
Amortization of intangible assets	12,132			8,712			23,718			26,734
Operating income	139,595			87,309			340,353			203,755
Operating income percentage	11.2		%	9.7		%	10.8		%	8.0		%
Interest expense	3,087			616			4,049			1,565
Other (expense)/income, net	(8,289)			(671)			(9,584)			621
Income before income taxes	128,219			86,022			326,720			202,811
Provision for income taxes	33,724			21,558			87,534			51,963
Effective income tax rate	26.3		%	25.1		%	26.8		%	25.6		%
Net income	$	94,495		$	64,464		$	239,186		$	150,848
Basic earnings per share	$	1.52		$	1.04		$	3.86		$	2.38
Diluted earnings per share	$	1.51		$	1.04		$	3.84		$	2.37

Our business segments have different factors driving revenue fluctuations and profitability. The sections that follow cover these segments in greater detail.

Changes in revenue, cost of revenue, and gross profit for the three months ended June 30, 2021, are summarized below.

	Revenue				Cost of Revenue				Gross Profit
	Dollars in thousands		Percentage change		Dollars in thousands		Percentage change		Dollars in thousands		Percentage change
Three Months Ended June 30, 2020	$	901,337			$	715,734			$	185,603
Effect of Census Questionnaire Assistance 2020 (CQA) contract	(170,385)		(18.9)	%	(138,431)		(19.3)	%	(31,954)		(17.2)	%
Organic effect	387,163		43.0	%	284,616		39.8	%	102,547		55.3	%
Net acquired growth	102,750		11.4	%	71,730		10.0	%	31,020		16.7	%
Currency effect compared to the prior period	22,655		2.5	%	18,015		2.5	%	4,640		2.5	%
Three months ended June 30, 2021	$	1,243,520	38.0	%	$	951,664	33.0	%	$	291,856	57.2	%

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Changes in revenue, cost of revenue, and gross profit for the nine months ended June 30, 2021, are summarized below.

	Revenue				Cost of Revenue				Gross Profit
	Dollars in thousands		Percentage change		Dollars in thousands		Percentage change		Dollars in thousands		Percentage change
Nine Months Ended June 30, 2020	$	2,537,701			$	2,023,550			$	514,151
Effect of Census Questionnaire Assistance 2020 (CQA) contract	(313,155)		(12.3)	%	(263,483)		(13.0)	%	(49,672)		(9.7)	%
Organic effect	754,594		29.7	%	534,434		26.4	%	220,160		42.8	%
Net acquired growth	125,092		4.9	%	90,635		4.5	%	34,457		6.7	%
Currency effect compared to the prior period	44,122		1.7	%	34,649		1.7	%	9,473		1.8	%
Nine Months Ended June 30, 2021	$	3,148,354	24.1	%	$	2,419,785	19.6	%	$	728,569	41.7	%

Our cost of revenue includes direct costs related to labor, subcontractor labor, outside vendors, rent, and other direct costs.

Selling, general and administrative expense (SG&A) consists of indirect costs related to general management, marketing, and administration. It is primarily composed of labor costs. These costs may be incurred at a segment level, for dedicated resources that are not client-facing, or at a corporate level. Corporate costs are allocated to segments on a consistent and rational basis. Fluctuations in our SG&A are primarily driven by changes in our administrative cost base, which is not directly driven by changes in our revenue. As part of our work for the U.S. Federal Government and many states, we allocate these costs using a methodology driven by the Federal Cost Accounting Standards.

Our SG&A expense has increased year-over-year due primarily to:

•acquisition expenses, primarily due to Attain and VES, as well as the additional cost base from these acquired businesses;

•severance expenses in the United States in the first quarter of fiscal year 2021, which are expected to provide a benefit for the remainder of the fiscal year;

•information technology initiatives, including migration of data systems to the cloud;

•additional costs to address the COVID-19 pandemic;

•increases in business development activity to both bolster our technical skills and plan for increased bidding activity; and

•increases in our scope of operations, which increases our administrative base.

Our amortization of intangible assets declined after the first fiscal quarter of 2021 as a large asset related to the U.S. Census contract was fully amortized. The acquisitions of VES and Attain are expected to add an annual amortization charge of $65.5 million. To assist users of our financial statements going forward, we will present results excluding the effects of the amortization of intangible assets.

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	Three Months Ended June 30,				Nine Months Ended June 30,
(dollars in thousands, except per share data)	2021		2020		2021		2020
Operating income	$	139,595	$	87,309	$	340,353	$	203,755
Amortization of intangible assets	12,132		8,712		23,718		26,734
Operating income excluding amortization of intangible assets - non-GAAP	$	151,727	$	96,021	$	364,071	$	230,489
Net income	$	94,495	$	64,464	$	239,186	$	150,848
Amortization of intangible assets adjusted for income taxes	8,941		6,529		17,364		19,884
Net income excluding amortization of intangible assets - non-GAAP	$	103,436	$	70,993	$	256,550	$	170,732
Diluted earnings per share	$	1.51	$	1.04	$	3.84	$	2.37
Effect of amortization of intangible assets on diluted earnings per share	0.15		0.10		0.28		0.31
Diluted earnings per share excluding amortization of intangible assets - non-GAAP	$	1.66	$	1.14	$	4.12	$	2.68

Our interest expense increased as we borrowed funds to acquire VES and Attain. We anticipate an additional $10 million of interest expense for the remainder of the fiscal year. As part of the VES acquisition, we incurred additional charges related to the interim financing. The $8.5 million cost of this funding was recorded within "other (income)/expense, net" on our consolidated statement of operations.

Our effective income tax rate for the three months ended June 30, 2021 and 2020, was 26.3% and 25.1%, respectively. Our effective income tax rate for the nine months ended June 30, 2021 and 2020, was 26.8% and 25.6%, respectively. Our projected annual effective income tax rate for the full fiscal year 2021 is between 25% and 25.5%.

U.S. Services Segment

Our U.S. Services Segment provides a variety of business process services (BPS) such as program administration, appeals and 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. Addressing societal macro trends such as aging populations and rising costs, the segment continues to execute on its clinical evolution strategy by expanding its clinical offerings in public health with new work in contact tracing, disease investigation, and vaccine distribution support services as part of the governments' COVID-19 response efforts. The segment also successfully expanded into the unemployment insurance market, supporting more than 15 states in their unemployment insurance programs.

	Three Months Ended June 30,						Nine Months Ended June 30,
(dollars in thousands)	2021			2020			2021			2020
Revenue	$	436,338		$	336,950		$	1,269,487		$	957,929
Cost of revenue	331,524			243,921			946,231			689,856
Gross profit	104,814			93,029			323,256			268,073
Operating income	62,208			61,033			206,601			165,440
Gross profit percentage	24.0		%	27.6		%	25.5		%	28.0		%
Operating income percentage	14.3		%	18.1		%	16.3		%	17.3		%

Our revenue and cost of revenue for the three month period ended June 30, 2021, increased 29% and 36%, respectively, compared to the same period in fiscal year 2020. Our revenue and cost of revenue for the nine month period ended June 30, 2021, increased 33% and 37%, respectively, compared to the same period in fiscal year 2020. All growth was organic.

Our growth for the three and nine months ended June 30, 2021, is driven by approximately $164 million and $450 million of COVID-19 response work, respectively. This work is short-term and has offset revenue declines

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resulting from constraints on many of our core programs. Among other factors, we are reporting lower volumes of transactions on redetermination contracts as states have paused Medicaid redeterminations as a condition for receiving enhanced U.S. Federal matching funds. In certain cases, redeterminations provide a significant part of our activity within volume-based contracts. The decline in profit margins is principally from these core programs operating at reduced capacity. As the pandemic restrictions ease, we anticipate that our short-term response work will decline and our core programs will recover, but the timing of the recovery is uncertain.

We anticipate operating income margins for the full fiscal year 2021 will be between 16% and 17%.

U.S. Federal Services Segment

From technology solutions to program administration and operations, our U.S. Federal Services Segment delivers end-to-end solutions that help various U.S. federal agencies better deliver on their mission. This also includes appeals and assessments services, system and application development, IT modernization, and maintenance services. The segment also contains certain state-based assessments and appeals work that is part of the segment's heritage within the Medicare Appeals portfolio which continues to be managed within this segment. Propelled by the Maximus Attain platform, the segment executes on its digital strategy to deliver technology solutions that advance agency missions, including the charge to modernize, provide better customer experience, and drive process efficiencies. The segment continues to expand its clinical solutions and manages the clinical evaluation process for U.S. veterans and service members on behalf of the U.S. Department of Veterans Affairs. The segment further supports clinical offerings in public health with new work supporting the U.S. Federal Government's COVID-19 response efforts. This included expanded work with the Centers for Disease Control and Prevention (CDC) for their helpline and increased support for the IRS Wage and Investment Division's response efforts to general inquiries regarding the Coronavirus Aid Relief & Economic Security (CARES) Act and Economic Impact Payment Service Plan.

	Three Months Ended June 30,						Nine Months Ended June 30,
(dollars in thousands)	2021			2020			2021			2020
Revenue	$	617,601		$	450,143		$	1,352,982		$	1,210,105
Cost of revenue	461,825			365,420			1,040,577			977,603
Gross profit	155,776			84,723			312,405			232,502
Operating income	86,129			39,233			139,528			101,047
Gross profit percentage	25.2		%	18.8		%	23.1		%	19.2		%
Operating income percentage	13.9		%	8.7		%	10.3		%	8.4		%

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Changes in revenue, cost of revenue, and gross profit for the three months ended June 30, 2021, are summarized below.

	Revenue				Cost of Revenue				Gross Profit
	Dollars in thousands		Percentage change		Dollars in thousands		Percentage change		Dollars in thousands		Percentage change
Three months ended June 30, 2020	$	450,143			$	365,420			$	84,723
Effect of CQA contract	(170,385)		(37.9)	%	(138,431)		(37.9)	%	(31,954)		(37.7)	%
Organic growth from other contracts	236,222		52.5	%	165,444		45.3	%	70,778		83.5	%
Net acquisitions and disposals	101,621		22.6	%	69,392		19.0	%	32,229		38.0	%
Three months ended June 30, 2021	$	617,601	37.2	%	$	461,825	26.4	%	$	155,776	83.9	%

Changes in revenue, cost of revenue, and gross profit for the nine months ended June 30, 2021, are summarized below.

	Revenue				Cost of Revenue				Gross Profit
	Dollars in thousands		Percentage change		Dollars in thousands		Percentage change		Dollars in thousands		Percentage change
Nine months ended June 30, 2020	$	1,210,105			$	977,603			$	232,502
Effect of CQA contract	(313,155)		(25.9)	%	(263,483)		(27.0)	%	(49,672)		(21.4)	%
Organic growth from other contracts	338,310		28.0	%	244,401		25.0	%	93,909		40.4	%
Net acquisitions and disposals	117,722		9.7	%	82,056		8.4	%	35,666		15.3	%
Nine months ended June 30, 2021	$	1,352,982	11.8	%	$	1,040,577	6.4	%	$	312,405	34.4	%

Our revenue and cost of revenue for the three month period ended June 30, 2021, increased 37% and 26%, respectively, compared to the same period in fiscal year 2020. Our revenue and cost of revenue for the nine month period ended June 30, 2021, increased 11.8% and 6.4%, respectively, compared to the same period in fiscal year 2020. The primary drivers were:

•As anticipated, the CQA (U.S. Census) contract has ended.

•We estimated that our incremental revenue from assisting the U.S. Federal Government with its COVID-19 response for the three and nine months ended June 30, 2021 was $280 million and $370 million, respectively. This short-term work has earned relatively high margins, which has offset the tempering of margins on performance-based contracts, such as independent medical reviews for worker's compensation programs that declined sharply since the onset of the pandemic.

•Our results include those of VES (from May 28, 2021) and Attain (from March 1, 2021).

We anticipate the operating margin for this segment to be between 10% and 11% for the full fiscal year 2021, due to the benefit of VES's higher margins.

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Outside the U.S. Segment

Delivering support to people from different backgrounds, cultures, and communities, our Outside the U.S. Segment provides BPS for international governments and commercial clients, 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 (U.K.), including the Health Assessment Advisory Service (HAAS), the Work & Health Programme, Fair Start, and Restart; Australia, including jobactive and the Disability Employment Service; Canada, including Health Insurance British Columbia and the Employment Program of British Columbia; in addition to Italy, Saudi Arabia, Singapore, South Korea, and Sweden, where we predominantly provide employment support and job seeker services.

	Three Months Ended June 30,						Nine Months Ended June 30,
(dollars in thousands)	2021			2020			2021			2020
Revenue	$	189,581		$	114,244		$	525,885		$	369,667
Cost of revenue	158,315			106,393			432,977			356,091
Gross profit	31,266			7,851			92,908			13,576
Operating income/(loss)	8,293			(5,817)			27,890			(33,549)
Gross profit percentage	16.5		%	6.9		%	17.7		%	3.7		%
Operating income/(loss) percentage	4.4		%	(5.1)		%	5.3		%	(9.1)		%

Changes in revenue, cost of revenue, and gross profit for the three months ended June 30, 2021, are summarized below

	Revenue				Cost of Revenue				Gross Profit
	Dollars in thousands		Percentage change		Dollars in thousands		Percentage change		Dollars in thousands		Percentage change
Three months ended June 30, 2021	$	114,244			$	106,393			$	7,851
Organic growth	51,553		45.1	%	31,569		29.7	%	19,984		NM
Acquired growth	1,129		1.0	%	2,338		2.2	%	(1,209)		NM
Currency effect compared to the prior period	22,655		19.8	%	18,015		16.9	%	4,640		NM
Three months ended June 30, 2021	$	189,581	65.9	%	$	158,315	48.8	%	$	31,266	NM
NM - Changes are not meaningful.

Changes in revenue, cost of revenue, and gross profit for the nine months ended June 30, 2021, are summarized below.

	Revenue				Cost of Revenue				Gross Profit
	Dollars in thousands		Percentage change		Dollars in thousands		Percentage change		Dollars in thousands		Percentage change
Nine months ended June 30, 2021	$	369,667			$	356,091			$	13,576
Organic growth	104,726		28.3	%	33,658		9.5	%	71,068		NM
Acquired growth	7,370		2.0	%	8,579		2.4	%	(1,209)		NM
Currency effect compared to the prior period	44,122		11.9	%	34,649		9.7	%	9,473		NM
Nine months ended June 30, 2021	$	525,885	42.3	%	$	432,977	21.6	%	$	92,908	NM
NM - Changes are not meaningful.

This segment has seen organic growth in revenue and profit, as well as acquired growth and currency benefits during fiscal year 2021.

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Much of our revenue growth stems from our employment services contracts, where we are paid based upon our ability to place individuals in long-term sustained employment. Revenue is recognized based on our estimate of the number of individuals whom we anticipate reaching these milestones. As a result, changes in our estimates of our ability to place people in work and the time that this will take can have significant effects on our revenue. As the effects of the COVID-19 pandemic became clear during fiscal year 2020, our revenue was significantly tempered as unemployment rose and available employment opportunities declined. As fiscal year 2021 has progressed, market conditions, particularly within Australia, have provided us with more placements than we anticipated and increased our estimates of future outcomes, increasing our revenue.

These estimates are based upon our current expectations as to how the effects of the pandemic, including regulations adopted by governments and employment practices adopted by employers, will progress. We have typically based our estimates on historical performance. The effects of COVID-19 have limited the extent to which we can rely upon historical performance and, accordingly, our revenue may be more volatile than we have previously experienced.

Our acquired growth is from the acquisition of InjuryNet in Australia in February 2020 and Index Root in South Korea in August 2020.

The weakening of the United States Dollar against the currencies in which we do business outside the U.S. has resulted in year-over-year growth in our revenue and costs.

As pandemic restrictions ease and economies emerge from the pandemic-related lockdowns, we anticipate robust markets for our employment services and a return to pre-pandemic levels for our health assessments services. In addition, we have recently been awarded significant contracts in the United Kingdom under the UK Restart program, in addition to smaller contracts in Italy, Saudi Arabia, South Korea, and Sweden. As is typical, we anticipate that these contracts will incur start-up losses that should impact our fourth fiscal quarter before moving to profitability in the second half of fiscal year 2022. Accordingly, we anticipate this segment will realize an operating loss during the fourth quarter of this fiscal year.

Liquidity and Capital Resources

Our cash flows for the nine months ended June 30, 2021, include payments of $1.36 billion and $419.1 million to cover our acquisitions of VES and Attain, respectively, supported by $1.68 billion of net financing from our new credit facility. Our new credit facility includes a five year $1.10 billion term loan, a seven year $400.0 million term loan and a $600.0 million revolving credit facility, which is repayable in full in May 2026. Interest on these loans are typically based upon the combination of a fixed margin and a variable rate, which is currently based upon the London Interbank Offering Rate (LIBOR). From July 2021, our fixed rate will be based upon a net total leverage ratio as defined in our credit agreement. At this time, our net total leverage ratio is 2.4:1. We believe that this loan facility, as well as our existing cash flows from operations, will provide us with the ability to sustain our operations and meet the short-term debt repayment requirements. We do not anticipate additional significant acquisition activity in the near term while we integrate the Attain and VES acquisitions and we plan to use most of our free cash flow to pay down debt to reduce our leverage ratio.

At June 30, 2021, we had approximately $96.1 million in unrestricted cash and $400.0 million of liquidity available on our $600.0 million revolving corporate credit facility.

We have no requirement to remit funds from our foreign locations to the United States. Current U.S. law enables us to transfer cash from our foreign locations on a tax-free basis. We will continue to explore opportunities to remit additional funds, taking into consideration the working capital requirements and relevant tax rules in each jurisdiction. When we are unable to remit funds back without incurring a penalty, we will consider these funds indefinitely reinvested until such time as these restrictions are changed. As a result, we do not record U.S. deferred income taxes on any funds held in foreign jurisdictions. We have not attempted to calculate our potential liability from any transfer of these funds as any such transaction might include tax planning strategies that we have not fully explored. Accordingly, it is not possible to estimate the potential tax obligations if we were to remit all of our funds from foreign locations to the United States.

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Cash Flows

The following table provides a summary of our cash flow information for the nine months ended June 30, 2021 and 2020.

	Nine Months Ended June 30,
(in thousands)	2021		2020
Net cash from/(used in):
Operations	$	246,659	$	96,083
Investing activities - VES	(1,360,231)		—
Investing activities - Attain	(419,097)		—
Investing activities - other	(32,278)		(27,412)
Financing activities	1,586,792		(89,001)
Effect of exchange rate changes on cash and cash equivalents	2,830		(174)
Net increase in cash, cash equivalents, and restricted cash	$	24,675	$	(20,504)

Our cash flows from operations in fiscal year 2020 were tempered by the initial effects of the COVID-19 pandemic, including reductions in our business, delays in collecting cash and additional costs required to continue our operations. Our cash flows from operations in fiscal year 2021 benefited from increased revenues from organic and acquired businesses. On a pro forma basis, our DSO at June 30, 2021 is consistent with that at September 30, 2020 and remains within our target range.

(in days)	Days Sales Outstanding
September 30, 2020	77
December 31, 2020	75
March 31, 2021 (pro forma to reflect Attain acquisition)	70
June 30, 2021 (pro forma to reflect VES acquisition)	77
Target Range	65 - 80

Cash used in investing activities for the nine months ended June 30, 2021, was $1.81 billion, principally for the acquisitions of VES and Attain. We have finalized the purchase price of Attain and paid the balance due to the sellers in the third quarter of fiscal year 2021. We are in the process of estimating our final payment to the sellers of VES.

Cash provided by financing activities in the nine months ended June 30, 2021, was $1.59 billion, compared to $89.0 million of cash used in the comparative period. In May 2021, we entered into a new credit facility comprising up to $2.1 billion in available funds; a five year $1.10 billion term loan, a seven year $400.0 million term loan and a $600.0 million revolving credit facility, which is repayable in full in May 2026. We utilized $200 million of the revolving credit facility at June 2021.

To supplement our statements of cash flows presented on a GAAP basis, we use the measure of free cash flow to analyze the funds generated from operations.

	Nine Months Ended June 30,
(in thousands)	2021		2020
Cash flows from operations	$	246,659	$	96,083
Purchases of property and equipment and capitalized software costs	(32,133)		(28,436)
Free cash flow - non-GAAP	$	214,526	$	67,647

Critical Accounting Policies and Estimates

As of June 30, 2021, there have been no changes to our critical accounting policies and estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

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Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities, and the reported amounts of revenue and expenses. On an ongoing basis we evaluate our estimates, including those related to revenue recognition and cost estimation on certain contracts, the realizability of goodwill and other long-lived assets, and amounts related to contingencies and income tax liabilities. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates.

Non-GAAP Measures

We utilize non-GAAP measures where we believe it will assist users of our financial statements in understanding our business. The presentation of these measures is meant to complement, but not replace, other financial measures in this document. The presentation of non-GAAP numbers is not meant to be considered in isolation, nor as an alternative to revenue growth, cash flows from operations, net income or earnings per share as measures of performance. These non-GAAP measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies.

In fiscal year 2020, 14% of our revenue was generated outside the U.S. We believe that users of our financial statements wish to understand the performance of our foreign operations using a methodology which excludes the effect of year-over-year exchange rate fluctuations. To calculate year-over-year currency movement, we determine the current fiscal year’s results for all foreign businesses using the exchange rates in the prior fiscal year. We refer to this adjusted revenue on a "constant currency basis."

In recent years, we have made a number of acquisitions. We believe users of our financial statements wish to evaluate the performance of our operations, excluding changes that have arisen due to businesses acquired or disposed of. We will identify acquired revenue and cost of revenue by showing these results for periods for which no comparative results exist within our financial statements. We will identify revenue and cost of revenue that has been disposed of in a similar manner. This information is supplemented by our calculations of organic growth. To calculate organic growth, we compare current fiscal year results excluding transactions from acquisitions or disposals to our prior fiscal year results.

Our recent acquisitions have resulted in significant intangible assets which are amortized over their estimated useful lives. We believe users of our financial statements wish to understand the performance of the business by using a methodology that excludes the amortization of our intangible assets. Accordingly, we have calculated our operating profit, net income and earnings per share excluding the effect of the amortization of intangible assets. We have included a table showing our reconciliation of these income measures to their corresponding GAAP measures.

Our results in fiscal year 2020 included a significant benefit from the CQA contract as the U.S. Federal Government completed its census. As the pattern of revenue from this contract is significant and non-recurring, we have identified the revenue and related costs and excluded them from the organic growth calculation above. We believe that it is helpful to our investors to understand the effect of this contract on our results.

In order to sustain our cash flows from operations, we require regular refreshing of our fixed assets and technology. We believe that users of our financial statements wish to understand the cash flows that directly correspond with our operations and the investments we must make in those operations using a methodology which combines operating cash flows and capital expenditures. We provide free cash flow to complement our statement of cash flows. Free cash flow shows the effects of the Company’s operations and replacement capital expenditures and excludes the cash flow effects of acquisitions, purchases of our own common stock, dividend payments, and other financing transactions. We have provided a reconciliation of cash flows from operations to free cash flow.

To sustain our operations, our principal source of financing comes from receiving payments from our customers. We believe that users of our financial statements wish to evaluate our efficiency in converting revenue into cash receipts. Accordingly, we provide DSO, which we calculate by dividing billed and unbilled receivable balances at the end of each quarter by revenue per day for the period. Revenue per day for a quarter is determined by dividing total revenue by 91 days. Where our DSO is affected by acquisitions, such as the VES acquisition in May 2021, we will perform the DSO calculation on a pro forma basis, including the acquired revenue for the fiscal quarter.

As noted above, we have a $2.1 billion corporate credit facility. Our credit agreement includes the defined term Consolidated EBITDA and our calculation of Adjusted EBITDA conforms to the credit agreement definition. We believe our investors appreciate the opportunity to understand the possible restrictions which arise from our credit agreement.

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•Adjusted EBITDA is also a useful measure of performance which focuses on the cash generating capacity of the business as it excludes the non-cash expenses of depreciation and amortization, and makes for easier comparisons between the operating performance of companies with different capital structures by excluding interest expense and therefore the impacts of financing costs.

•The measure of Adjusted EBITA is a step in calculating Adjusted EBITDA and facilitates comparisons to similar businesses as it isolates the amortization effect of business combinations.

•Our corporate credit facility requires us to calculate Adjusted EBITDA on a pro forma basis, as though we had owned any significant acquired business for a full twelve months. Accordingly, we have included the effects of VES and Attain in the table below.

We have provided a reconciliation from net income to Adjusted EBITA, Adjusted EBITDA and Pro Forma Adjusted EBITDA as shown below. Our current credit facilities utilized a different version of EBITDA from that of the credit facility used in prior years.

	Nine Months Ended June 30,		Trailing Twelve Months Ended June 30,
(in thousands)	2021		2021
Net income	$	239,186	$	302,847
Interest expense	4,049		4,543
Other (expense)/income, net	9,584		9,362
Provision of income taxes	87,534		108,124
Amortization of intangible assets	23,718		32,618
Stock compensation expense	20,823		26,973
Acquisition-related expenses	9,597		10,056
Gain on sale of a business	—		(12)
Adjusted EBITA - non-GAAP	$	394,491	$	494,511
Depreciation and amortization of property, plant, equipment and capitalized software	33,664		50,696
Adjusted EBITDA - non-GAAP	$	428,155	$	545,207
Pro forma adjusted EBITDA related to acquisitions	92,398		129,364
Pro Forma Adjusted EBITDA - non-GAAP	$	520,553	$	674,571

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Item 3.                   Quantitative and Qualitative Disclosures about Market Risk.

In the normal course of business, we are exposed to financial risks such as changes in interest rates, foreign currency exchange rates and counterparty risk. We use derivative instruments to manage selected interest rate exposures.

Foreign Currency Risk

At June 30, 2021, we held net assets denominated in currencies other than the U.S. Dollar of $188.7 million. Of this balance, we had net monetary assets of $101.0 million, including cash and cash equivalents $65.0 million. We consider monetary assets to be those which which hold a fair value close to their book value and which represent a recent cash outflow or which will become a cash inflow or outflow within a short period of time. These assets and liabilities are typically cash, billed, billable, and unbilled accounts receivable, current prepaid expenses, operating lease right-of-use assets, accounts payable, accrued compensation, deferred revenue, lease liabilities, and debt.

A hypothetical 10% favorable or unfavorable exchange rate movement across currencies would have a positive or negative effect on our annual comprehensive income of $18.9 million and would increase or decrease our cash and cash equivalents and our net monetary assets by $6.5 million and $10.1 million, respectively.

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates to our outstanding debt. The interest expense associated with the two term loans and revolver will vary with market rates. The Tranche A Term Loan (principal balance $1.10 billion) and the revolver (principal balance of $200.0 million) both have a LIBOR floor of 0% and Tranche B Term Loan (principal balance of $400.0 million) has a LIBOR floor of 0.5%. We have an interest rate swap with a notional amount of $300.0 million related to the Tranche A Term Loan. A rise of interest rate levels would increase our interest expense and a reduction in interest rates to the floor would decrease our interest expense. A hypothetical 100 basis point increase in interest rates would have a negative effect on annual earnings in the amount of $12.3 million and a 100 basis point decrease in interest rates would have a positive impact on annual earnings of $0.9 million. We based this sensitivity calculation on the one month LIBOR rate of 0.087% in accordance with the most recent measurement date specified in the Credit Agreement.

Counterparty Risk

We are exposed to credit losses in the event of nonperformance by the counterparties to our derivative instruments. All of our counterparties have investment grade credit ratings; accordingly, we anticipate that the counterparties will be able to fully satisfy their obligations under the contracts. Our agreements outline the conditions upon which it or the counterparties are required to post collateral. At June 30, 2021, we had no collateral posted with our counterparties related to the derivatives.

Item 4.                   Controls and Procedures.

(a)      Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer concluded that these disclosure controls and procedures were effective and designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b)       Changes in Internal Control over Financial Reporting

With the exception of the matter noted below, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

In May 2021, we acquired VES Group, Inc. We are in the process of integrating this business into our existing control environment.

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PART II.  OTHER INFORMATION

Item 1.              Legal Proceedings.

Refer to our disclosures included in "Note 8. Litigation" included in Part 1, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A.              Risk Factors.

In connection with information set forth in this Form 10-Q, the factors discussed below and under “Risk Factors” in our Form 10-K for fiscal year ended September 30, 2020, should be considered. The risks included below and in those filings could materially and adversely affect our business, financial condition, and results of operations.

Other than as set forth below, there have been no material changes to the factors discussed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, which was filed with the Securities and Exchange Commission on November 19, 2020.

Risks related to our acquisitions of the Federal business of Attain, LLC (“Attain”) and VES Group Inc. (“VES”).

Our indebtedness following the completion of the VES acquisition is significant and could adversely affect our business and our ability to meet our obligations. In connection with the VES acquisition, we incurred significant additional indebtedness. Our new indebtedness contains financial or other covenants that limit our operational flexibility. In addition, the increased indebtedness of the Company following the VES acquisition could adversely affect us in a number of other ways, including:

•causing us to be less able to take advantage of business opportunities, such as other acquisition opportunities, and to react to changes in market or industry conditions;

•increasing our vulnerability to adverse economic, industry, or competitive developments;

•affecting our ability to pay or refinance debts as they become due during adverse economic, financial market, and industry conditions;

•requiring us to use a larger portion of cash flow for debt service, reducing funds available for other purposes;

•decreasing our profitability and/or cash flow;

•causing us to be disadvantaged compared to competitors with less leverage; and

•limiting our ability to borrow additional funds in the future to fund working capital, capital expenditures, and other general corporate purposes.

We may experience difficulties in integrating our operations with those of Attain and VES and realizing the expected benefits of these acquisitions. Although we currently anticipate that both the Attain acquisition and the VES acquisition (the “Acquisitions”) will be accretive to earnings per share in fiscal 2022, this expectation is based on assumptions about Maximus', Attain’s and VES’s business and preliminary estimates, which may change materially. The benefits of the Acquisitions will depend, in part, on our ability to successfully combine the businesses of Attain, VES, and Maximus, which currently operate as independent companies and realize the anticipated benefits, including business opportunities and growth prospects from combining our businesses. We may not achieve these objectives within the anticipated time frame, or may never realize these benefits and the value of our common stock may be harmed.

The Acquisitions involve the integration of Attain’s and VES’s businesses with our existing business, which is expected to be a costly and time-consuming process. The integration may result in material challenges, including, without limitation:

•Our management might have its attention diverted from ongoing business concerns while trying to integrate these operations, and we could experience performance shortfalls at one or all three of the companies as a result of the devotion of management’s attention to the Attain and VES integration efforts.

•The integration process could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could materially adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability to achieve the anticipated benefits of the transactions, and could harm our financial performance.

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•We could encounter unanticipated issues in integrating information technology, communications and other systems that could harm our financial performance.

•If we are unable to successfully or timely integrate our operations with those of Attain and VES, we may incur unanticipated liabilities and be unable to realize the revenue growth, synergies, and other anticipated benefits resulting from the Acquisitions, and our business, results of operations, and financial condition could be materially adversely affected.

VES currently derives all of its revenue from contracts with the Department of Veterans Affairs (“VA”). If one or more of these contracts with the VA are terminated or are not renewed on favorable terms or at all, if the VA reduces the number of medical examinations allocated to VES under the contracts or if VES receives an adverse finding or review resulting from an audit or investigation, the benefits of the VES acquisition may be adversely affected. VES’s contracts with the VA are generally intended to run for a fixed number of years and may be extended for an additional specified number of years if the contracting entity or its agent elects to do so. When VES’s contracts with the VA expire, they may be opened for bidding by competing providers, and there is no guarantee that the contracts will be renewed or extended. The VA may also elect to open the bidding process earlier than anticipated, resulting in increased competition prior to the anticipated end of the current contracts. Competitors may buy their way into the market by submitting bids with lower pricing. Even if VES’s responsive bids are successful, the bids may be based upon assumptions or other factors which could result in the contracts being less profitable than we had anticipated.

VES’s reputation and relationship with the VA are key factors in maintaining and growing its revenues. Negative press reports or publicity, regardless of accuracy, which could pertain to employee or service provider misconduct, conflicts of interest, poor contract performance, deficiencies in services, information security breaches, or other aspects of its business, could harm its reputation, particularly with the VA. If VES’s reputation is negatively affected, the VA could decrease or cease its business with VES. VES is also subject to various reviews, audits, and investigations to verify its compliance with the terms of its contracts with various governmental agencies, as well as compliance with applicable laws and regulations. Any adverse review, audit, or investigation could result in, among other things: cancellation of VES’s contracts; refunding of amounts that have been paid pursuant to its contracts; imposition of fines, penalties and other sanctions on VES; loss of its right to participate in various programs; loss of one or more of its licenses; lowered quality ratings; or changes to the way it does its business. In addition, under government procurement regulations and practices, a negative determination resulting from a government audit of the business practices could result in a contractor being fined, debarred, and/or suspended from being able to bid on, or be awarded, new government contracts for a period of time.

If any of the foregoing occurs, the volume of VES’s business with the VA could decrease and its business, future revenues, financial condition, and growth prospects could be adversely affected, causing the benefits to Maximus of the VES acquisition to be adversely affected.

In connection with the Acquisitions, we may be required to take write-downs or write-offs, restructuring and impairment, or other charges that could negatively affect our business, assets, liabilities, prospects, outlook, financial condition, and results of operations. Although we have conducted extensive due diligence on Attain and VES in connection with the Acquisitions, we cannot assure that this diligence revealed all material issues that may be present, that it would be possible to uncover all material issues through customary due diligence, or that factors outside of our control will not later arise. We have also purchased representations and warranties insurance policies in connection with the Acquisitions, but there is no assurance that those policies will cover any losses we might experience from breaches of the sellers’ representations and warranties or otherwise arising from the Acquisitions. Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Further, as a result of the Acquisitions, purchase accounting, and the proposed operation of the combined company after closing, we may be required to take write-offs or write-downs, restructuring and impairment or other charges that could negatively affect business, assets, liabilities, prospects, outlook, financial condition and results of operations after closing of the Acquisitions.

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Item 6.                       Exhibits.

Exhibit No.		Description
2.1		Stock Purchase Agreement dated as of April 20, 2021 by and among VES Group, Inc., each of the parties identified as a “Shareholder” on the signature pages thereto, George C. Turek, in his capacity as Shareholder Representative as set forth in therein, Maximus Federal Services, Inc., and Maximus, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on April 26, 2021).*
10.1		Credit Agreement, dated as of May 28, 2021 by and between the Company, JPMorgan Chase Bank, N.A., as administrative agent, the lenders party thereto and each of JPMorgan Chase Bank, N.A., BofA Securities, Inc., Truist Securities Inc. and Wells Fargo Securities, LLC, in their capacities as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on June 3, 2021).**
31.1	s	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	s	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	v	Section 906 Principal Executive Officer Certification.
32.2	v	Section 906 Principal Financial Officer Certification.
101		The following materials from the Maximus, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Changes in Shareholders’ Equity and (vi) Notes to Unaudited Consolidated Financial Statements. Filed electronically herewith.
104		Cover Page Interactive Data File (formatted as Inline XBRL tags and contained in Exhibit 101)

_____________________________________________________

*     Schedules and similar attachments omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a copy of any omitted schedule to the Securities and Exchange Commission upon request.

**     Schedules omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of any omitted schedule to the Securities and Exchange Commission upon request.

s    Filed herewith.

v    Furnished herewith.

36

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Maximus, Inc.
Date: August 5, 2021	By:	/s/ Richard J. Nadeau
		Richard J. Nadeau
		Chief Financial Officer
		(On behalf of the registrant and as Principal Financial and Accounting Officer)

37

EX-31.1

EXHIBIT 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Bruce L. Caswell, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Maximus, Inc. for the period ended June 30, 2021;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 5, 2021
		/s/ Bruce L. Caswell
		Bruce L. Caswell
		Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Richard J. Nadeau, certify that:

1.    I have reviewed this Quarterly Report on Form 10-Q of Maximus, Inc. for the period ended June 30, 2021;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 5, 2021
		/s/ Richard J. Nadeau
		Richard J. Nadeau
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Section 906 CEO Certification

I, Bruce L. Caswell, Chief Executive Officer of Maximus, Inc. (“the Company”), do hereby certify, under the standards set forth in and solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.    The Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2021 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or 78o(d)) and

2.    The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 5, 2021
		/s/ Bruce L. Caswell
		Bruce L. Caswell
		Chief Executive Officer

EX-32.2

EXHIBIT 32.2

Section 906 CFO Certification

I, Richard J. Nadeau, Chief Financial Officer of Maximus, Inc. (“the Company”), do hereby certify, under the standards set forth in and solely for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1.    The Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2021 (the “Quarterly Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m or 78o(d)) and

2.    The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 5, 2021
		/s/ Richard J. Nadeau
		Richard J. Nadeau
		Chief Financial Officer

XML

Cover Page - shares	9 Months Ended
	Jun. 30, 2021	Aug. 02, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2021
Document Transition Report	false
Entity File Number	1-12997
Entity Registrant Name	Maximus, Inc.
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	54-1000588
Entity Address, Address Line One	1891 Metro Center Drive
Entity Address, City or Town	Reston
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	20190
City Area Code	703
Local Phone Number	251-8500
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	MMS
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Reporting Company	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		61,471,783
Entity Central Index Key	0001032220
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Income Statement [Abstract]
Revenue	$ 1,243,520	$ 901,337	$ 3,148,354	$ 2,537,701
Cost of revenue	951,664	715,734	2,419,785	2,023,550
Gross profit	291,856	185,603	728,569	514,151
Selling, general, and administrative expenses	140,129	89,582	364,498	283,662
Amortization of intangible assets	12,132	8,712	23,718	26,734
Operating income	139,595	87,309	340,353	203,755
Interest expense	3,087	616	4,049	1,565
Other (expense)/income, net	(8,289)	(671)	(9,584)	621
Income before income taxes	128,219	86,022	326,720	202,811
Provision for income taxes	33,724	21,558	87,534	51,963
Net income	$ 94,495	$ 64,464	$ 239,186	$ 150,848
Basic earnings per share (in dollars per share)	$ 1.52	$ 1.04	$ 3.86	$ 2.38
Diluted earnings per share (in dollars per share)	1.51	1.04	3.84	2.37
Dividends paid per share (in dollars per share)	$ 0.28	$ 0.28	$ 0.84	$ 0.84
Weighted average shares outstanding:
Basic (in shares)	62,064	61,882	62,028	63,463
Diluted (in shares)	62,453	62,102	62,300	63,666

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 94,495	$ 64,464	$ 239,186	$ 150,848
Net unrealized losses on cash flow hedge, net of taxes of $379, $—, $379 and $—, respectively	(1,062)	0	(1,062)	0
Foreign currency translation adjustments	(24)	3,432	7,669	(1,304)
Comprehensive income attributable to Maximus	$ 93,409	$ 67,896	$ 245,793	$ 149,544

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2021	Sep. 30, 2020
Current assets:
Cash and cash equivalents	$ 96,110	$ 71,737
Accounts receivable — billed and billable, net of allowance of $6,607 and $6,051	794,653	622,871
Accounts receivable — unbilled	334,666	163,332
Income taxes receivable	454	2,075
Prepaid expenses and other current assets	81,479	72,543
Total current assets	1,307,362	932,558
Property and equipment, net	67,794	66,721
Capitalized software, net	45,739	38,033
Operating lease right-of-use assets	186,944	177,159
Goodwill	1,757,795	593,129
Intangible assets, net	892,487	145,893
Deferred contract costs, net	37,020	20,891
Deferred compensation plan assets	47,041	36,819
Deferred income taxes	506	1,915
Other assets	27,905	11,584
Total assets	4,370,593	2,024,702
Current liabilities:
Accounts payable and accrued liabilities	420,510	253,338
Accrued compensation and benefits	181,559	137,101
Deferred revenue	68,846	51,655
Income taxes payable	19,763	5,377
Current portion of long-term debt and other borrowings	60,586	10,878
Operating lease liabilities	82,572	80,748
Other current liabilities	26,768	22,071
Total current liabilities	860,604	561,168
Deferred revenue, less current portion	36,051	27,311
Deferred income taxes	204,174	24,737
Long-term debt, less current portion	1,633,135	18,017
Deferred compensation plan liabilities, less current portion	44,076	38,654
Operating lease liabilities, less current portion	118,341	104,011
Other liabilities	20,765	8,985
Total liabilities	2,917,146	782,883
Shareholders’ equity:
Common stock, no par value; 100,000 shares authorized; 61,472 and 61,504 shares issued and outstanding at June 30, 2021, and September 30, 2020, respectively	535,990	513,959
Accumulated other comprehensive loss	(36,031)	(42,638)
Retained earnings	953,488	770,498
Total shareholders' equity	1,453,447	1,241,819
Total liabilities and shareholders' equity	$ 4,370,593	$ 2,024,702

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2021	Sep. 30, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable, current	$ 6,607	$ 6,051
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	61,472,000	61,504,000
Common stock, shares outstanding	61,472,000	61,504,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Cash flows from operations:
Net income	$ 239,186	$ 150,848
Adjustments to reconcile net income to cash flows from operations:
Depreciation and amortization of property and equipment and capitalized software	33,664	47,496
Amortization of intangible assets	23,718	26,734
Deferred income taxes	3,632	(5,210)
Stock compensation expense	20,823	17,558
Gain on sale of a business	0	(1,706)
Costs related to debt financing	8,509	0
Change in assets and liabilities, net of effects of business combinations
Accounts receivable — billed and billable	(83,881)	(147,626)
Accounts receivable — unbilled	(170,423)	(80,267)
Prepaid expenses and other current assets	7,542	529
Deferred contract costs	(15,773)	(1,396)
Accounts payable and accrued liabilities	116,873	48,622
Accrued compensation and benefits	34,387	33,647
Deferred revenue	23,624	2,806
Income taxes	15,165	563
Operating lease right-of-use assets and liabilities	1,077	(1,071)
Other assets and liabilities	(11,464)	4,556
Cash flows from operations	246,659	96,083
Cash flows from investing activities:
Purchases of property and equipment and capitalized software costs	(32,133)	(28,436)
Acquisitions of businesses, net of cash acquired	(1,779,473)	(2,611)
Proceeds from the sale of a business	0	3,250
Other	0	385
Cash used in investing activities	(1,811,606)	(27,412)
Cash flows from financing activities:
Cash dividends paid to Maximus shareholders	(51,625)	(52,988)
Purchases of Maximus common stock	(3,363)	(166,959)
Tax withholding related to RSU vesting	(9,818)	(10,614)
Payments for debt financing	(22,759)	0
Borrowings under new credit facilities	1,700,000	0
Other debt borrowings	585,000	421,488
Other debt repayments	(607,880)	(278,971)
Other	(2,763)	(957)
Cash provided by/(used in) financing activities	1,586,792	(89,001)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	2,830	(174)
Net increase in cash, cash equivalents, and restricted cash	24,675	(20,504)
Cash, cash equivalents, and restricted cash, beginning of period	88,561	116,492
Cash, cash equivalents, and restricted cash, end of period	$ 113,236	$ 95,988

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Accumulated Other Comprehensive Loss	Retained Earnings	Noncontrolling Interest
Balance (in shares) at Sep. 30, 2019		63,979
Balance at Sep. 30, 2019	$ 1,248,201	$ 498,433	$ (45,380)	$ 794,739	$ 409
Increase (Decrease) in Shareholders' Equity
Net income	150,848			150,848
Foreign currency translation	(1,304)		(1,304)
Cash flow hedge, net of income taxes	0
Cash dividends	(53,397)			(52,988)	(409)
Dividends on RSUs		$ 1,209		(1,209)
Purchases of Maximus common stock (in shares)		(2,767)
Purchases of Maximus common stock	(166,959)	$ (167,000)		(166,959)
Stock compensation expense	17,558	$ 17,558
RSUs vested (in shares)		101
Balance (in shares) at Jun. 30, 2020		61,313
Balance at Jun. 30, 2020	1,194,947	$ 517,200	(46,684)	724,431	0
Balance (in shares) at Mar. 31, 2020		61,313
Balance at Mar. 31, 2020	1,138,468	$ 511,023	(50,116)	677,561
Increase (Decrease) in Shareholders' Equity
Net income	64,464			64,464
Foreign currency translation	3,432		3,432
Cash flow hedge, net of income taxes	0
Cash dividends	(17,175)			(17,175)
Dividends on RSUs	0	419		(419)
Stock compensation expense	5,758	$ 5,758
Balance (in shares) at Jun. 30, 2020		61,313
Balance at Jun. 30, 2020	$ 1,194,947	$ 517,200	(46,684)	724,431	$ 0
Balance (in shares) at Sep. 30, 2020	61,504	61,504
Balance at Sep. 30, 2020	$ 1,241,819	$ 513,959	(42,638)	770,498
Increase (Decrease) in Shareholders' Equity
Net income	239,186			239,186
Foreign currency translation	7,669		7,669
Cash flow hedge, net of income taxes	(1,062)		(1,062)
Cash dividends	(51,625)			(51,625)
Dividends on RSUs		$ 1,208		(1,208)
Purchases of Maximus common stock (in shares)		(52)
Purchases of Maximus common stock	(3,363)	$ (3,400)		(3,363)
Stock compensation expense	$ 20,823	$ 20,823
RSUs vested (in shares)		20
Balance (in shares) at Jun. 30, 2021	61,472	61,472
Balance at Jun. 30, 2021	$ 1,453,447	$ 535,990	(36,031)	953,488
Balance (in shares) at Mar. 31, 2021		61,472
Balance at Mar. 31, 2021	1,369,905	$ 528,205	(34,945)	876,645
Increase (Decrease) in Shareholders' Equity
Net income	94,495			94,495
Foreign currency translation	(24)		(24)
Cash flow hedge, net of income taxes	(1,062)		(1,062)
Cash dividends	(17,211)			(17,211)
Dividends on RSUs		441		(441)
Stock compensation expense	$ 7,344	$ 7,344
Balance (in shares) at Jun. 30, 2021	61,472	61,472
Balance at Jun. 30, 2021	$ 1,453,447	$ 535,990	$ (36,031)	$ 953,488

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Statement of Comprehensive Income [Abstract]
Interest rate hedge, tax	$ 379	$ 0	$ 379	$ 0

XML

Organization and Basis of Presentation

9 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. As permitted by these instructions, they do not include all of the information and notes required by generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation are included. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended June 30, 2021, are not necessarily indicative of the results that may be expected for the full fiscal year. The balance sheet at September 30, 2020, has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements.

These financial statements should be read in conjunction with the consolidated audited financial statements and the notes thereto at September 30, 2020 and 2019, and for each of the three years in the period ended September 30, 2020, included in our Annual Report on Form 10-K which was filed with the Securities and Exchange Commission on November 19, 2020.

Estimates

The preparation of these financial statements, in conformity with GAAP in the United States, 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 goodwill and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation.

We base our estimates on historical experience and expectations of the future that we believe to be reasonable. The economic and political effects of the coronavirus (COVID-19) global pandemic increase uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates may be subject to greater volatility than has been the case in the past.

•Our balance sheet includes goodwill valued at $1.76 billion. This balance is allocated between reporting units, which are consistent with our three operating segments. Goodwill is not amortized but is tested for impairment when necessary and no less than once per year. We performed our last annual goodwill impairment test as of July 1, 2020, using a qualitative assessment. There has been no indication of impairment of any reporting unit at this time or since.

•Our balance sheet includes a number of long-lived assets, including property and equipment, capitalized software, operating lease right-of-use assets, deferred contract costs and intangible assets. These assets are depreciated or amortized over their estimated useful economic lives but are subject to impairment if events indicate that the carrying amounts may not be recoverable. At this time, there are no balances which we believe are not recoverable.

•Included within our long-lived assets are $892.5 million of intangible assets, which have been acquired through business combinations. We use judgment in identifying, valuing, and assigning a useful economic life to assets as they are acquired. The judgments required vary with the type of asset but may include projections of future results, estimated costs to recreate or replace assets, the cost of utilizing other, similar assets provided by a third party and an appropriate cost of capital. Where appropriate, we utilize the services of a third-party specialist to assist us in these valuations.

•Our balance sheet includes $1.13 billion of billed, billable and unbilled accounts receivable, net of allowance for credit losses. Beginning October 1, 2020, we have evaluated credit risk under ASC Topic 326, as further described below. Credit risk has not historically been significant to our business due to the nature of our customers. During the three and nine months ended June 30, 2021, we recorded changes to our estimated credit losses of $0.1 million and $1.0 million, respectively.

•As disclosed in "Note 3. Revenue Recognition," revenue for some of our employment services contracts in the Outside the U.S. Segment is based upon achievement of future outcomes as defined in each contract. Specifically, we are paid as individuals attain employment goals, which may take many months to achieve. Revenue is recognized on these contracts over the period of performance. Employment markets worldwide

suffered a significant shock during fiscal year 2020 due to COVID-19, which resulted in significant reductions in work performed and outcomes reached. Although we are seeing recovery in fiscal year 2021, this revenue remains subject to volatility.

•As disclosed in "Note 5. Business Combinations," we have acquired two businesses during fiscal year 2021. For assets acquired and liabilities assumed, we are required to identify and recognize these balances at their fair value as of the date of acquisition. We are still in the process of completing the valuations of these assets and, accordingly, there may be changes in these balances.

Changes in financial reporting

In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This accounting guidance requires customers in cloud-computing arrangements to identify and defer certain implementation costs in a manner broadly consistent with that of existing guidance on the costs to develop or obtain internal-use software. Costs capitalized under this guidance will be expensed over the term of the cloud computing arrangement. We adopted this guidance on October 1, 2020, using a prospective approach.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update introduces a new model for recognizing credit losses on financial instruments, including losses on accounts receivable. This update replaced the existing incurred loss impairment model with an expected loss model. We adopted this guidance on October 1, 2020, with no material impact to our financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This standard will not change the manner in which we would identify a goodwill impairment but would change any subsequent calculation of an impairment charge. We adopted this standard on October 1, 2020. The effect of this new standard will depend upon the outcome of future goodwill impairment tests.

XML

Segment Information

9 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Segment Information

Segment Information

We conduct our operations through three business segments: U.S. Services, U.S. Federal Services, and Outside the U.S.

•Our U.S. Services Segment provides a variety of business process services (BPS) such as program administration, appeals and 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. Addressing societal macro trends such as aging populations and rising costs, the segment continues to execute on its clinical evolution strategy by expanding its clinical offerings in public health with new work in contact tracing, disease investigation, and vaccine distribution support services as part of the governments' COVID-19 response efforts. The segment also successfully expanded into the unemployment insurance market, supporting more than 15 states in their unemployment insurance programs.

•From technology solutions to program administration and operations, our U.S. Federal Services Segment delivers end-to-end solutions that help various U.S. federal agencies better deliver on their mission. This also includes appeals and assessments services, system and application development, IT modernization, and maintenance services. The segment also contains certain state-based assessments and appeals work that is part of the segment's heritage within the Medicare Appeals portfolio which continues to be managed within this segment. Propelled by the Maximus Attain platform, the segment executes on its digital strategy to deliver technology solutions that advance agency missions, including the charge to modernize, provide better customer experience, and drive process efficiencies. The segment continues to expand its clinical solutions and manages the clinical evaluation process for U.S. veterans and service members on behalf of the U.S. Department of Veterans Affairs. The segment further supports clinical offerings in public health with new work supporting the U.S. Federal Government's COVID-19 response efforts. This included expanded work with the Centers for Disease Control and Prevention (CDC) for their helpline and increased support for the IRS Wage and Investment Division's response efforts to general inquiries regarding the Coronavirus Aid Relief & Economic Security (CARES) Act and Economic Impact Payment Service Plan.

•Delivering support to people from different backgrounds, cultures and communities, our Outside the U.S. Segment provides BPS for international governments and commercial clients. 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 (U.K.), including the Health Assessment Advisory Service (HAAS), the Work & Health Programme, Fair Start, and Restart; Australia, including jobactive and the Disability Employment Service; Canada, including Health Insurance British Columbia and the Employment Program of British Columbia; in addition to Italy, Saudi Arabia, Singapore, South Korea, and Sweden, where we predominantly provide employment support and job seeker services.

Expenses that are not specifically included in the segments are included in other categories, including amortization of intangible assets and the direct costs of acquisitions. These costs are excluded from measuring each segment's operating performance.

	Three Months Ended June 30,						Nine Months Ended June 30,
(in thousands)	2021		% (1)	2020		% (1)	2021		% (1)	2020		% (1)
Revenue:
U.S. Services	$	436,338		$	336,950		$	1,269,487		$	957,929
U.S. Federal Services	617,601			450,143			1,352,982			1,210,105
Outside the U.S.	189,581			114,244			525,885			369,667
Total	$	1,243,520		$	901,337		$	3,148,354		$	2,537,701
Gross profit:
U.S. Services	$	104,814	24.0%	$	93,029	27.6%	$	323,256	25.5%	$	268,073	28.0%
U.S. Federal Services	155,776		25.2%	84,723		18.8%	312,405		23.1%	232,502		19.2%
Outside the U.S.	31,266		16.5%	7,851		6.9%	92,908		17.7%	13,576		3.7%
Total	$	291,856	23.5%	$	185,603	20.6%	$	728,569	23.1%	$	514,151	20.3%
Selling, general & administrative expense:
U.S. Services	$	42,606	9.8%	$	31,996	9.5%	$	116,655	9.2%	$	102,633	10.7%
U.S. Federal Services	69,647		11.3%	45,490		10.1%	172,877		12.8%	131,455		10.9%
Outside the U.S.	22,973		12.1%	13,668		12.0%	65,018		12.4%	47,125		12.7%
Gain on sale of business (3)	—		NM	(1,706)		NM	—		NM	(1,706)		NM
Other (2)	4,903		NM	134		NM	9,948		NM	4,155		NM
Total	$	140,129	11.3%	$	89,582	9.9%	$	364,498	11.6%	$	283,662	11.2%
Operating income:
U.S. Services	$	62,208	14.3%	$	61,033	18.1%	$	206,601	16.3%	$	165,440	17.3%
U.S. Federal Services	86,129		13.9%	39,233		8.7%	139,528		10.3%	101,047		8.4%
Outside the U.S.	8,293		4.4%	(5,817)		(5.1)%	27,890		5.3%	(33,549)		(9.1)%
Amortization of intangible assets	(12,132)		NM	(8,712)		NM	(23,718)		NM	(26,734)		NM
Gain on sale of business (3)	—		NM	1,706		NM	$	—	NM	1,706		NM
Other (2)	(4,903)		NM	(134)		NM	(9,948)		NM	(4,155)		NM
Total	$	139,595	11.2%	$	87,309	9.7%	$	340,353	10.8%	$	203,755	8.0%

(1) Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.”

(2) Other selling, general, and administrative expenses includes credits and costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed. Our results for the three and nine months ended June 30, 2021, included $5.6 million and $8.8 million, respectively, of expenses relating to the acquisitions of Attain, LLC, and VES Group, Inc. For more information, see "Note 5. Business Combinations."

(3) During fiscal year 2020, we sold Q2 Administrators LLC, a subsidiary within our U.S. Federal Services Segment, resulting in a gain.

Identifiable assets for the segments are shown below. Identifiable assets for U.S. Federal Services increased due to the acquisitions of Attain, LLC and VES Group, Inc. Refer to "Note 5. Business Combinations" for details.

(in thousands)	June 30, 2021		September 30, 2020
U.S. Services	$	728,347	$	702,728
U.S. Federal Services	3,149,694		937,477
Outside the U.S.	304,952		224,532
Corporate	187,600		159,965
Total	$	4,370,593	$	2,024,702

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Revenue Recognition

9 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

We recognize revenue as, or when, we satisfy performance obligations under a contract. The majority of our contracts have performance obligations which are satisfied over time. In most cases, we view our performance obligations as promises to transfer a series of distinct services to our customers that are substantially the same and which have the same pattern of service. We recognize revenue over the performance period as a customer receives the benefits of our services.

Disaggregation of revenue

In addition to our segment reporting, we disaggregate our revenues by service, contract type, customer type, and geography. Our operating segments represent the manner in which our Chief Executive Officer reviews our financial results, which is further discussed in "Note 2. Segment Information."

By operating segment and service

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
Program administration	$	325,755	$	251,616	$	964,981	$	724,960
Assessments and appeals	33,529		40,875		101,561		104,621
Workforce and children services	64,240		32,531		167,106		90,651
Other	12,814		11,928		35,839		37,697
Total U.S. Services	$	436,338	$	336,950	$	1,269,487	$	957,929
Program administration	$	451,594	$	362,973	$	1,005,706	$	949,071
Technology solutions	89,559		42,101		187,006		130,172
Assessments and appeals	76,448		45,069		160,270		130,862
Total U.S. Federal Services	$	617,601	$	450,143	$	1,352,982	$	1,210,105
Workforce and children services	$	94,310	$	55,046	$	269,743	$	146,968
Assessments and appeals	58,664		42,468		169,753		167,397
Program administration	34,296		15,544		80,284		49,583
Other	2,311		1,186		6,105		5,719
Total Outside the U.S.	$	189,581	$	114,244	$	525,885	$	369,667
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

By contract type

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
Performance-based	$	389,800	$	295,650	$	1,033,509	$	864,077
Cost-plus	282,808		422,641		953,373		1,184,425
Fixed price	146,175		132,535		413,296		352,255
Time and materials	424,737		50,511		748,176		136,944
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

By customer type

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
New York State government agencies	$	102,195	$	79,140	$	289,462	$	276,585
Other U.S. state government agencies	329,792		265,608		976,336		692,689
Total U.S. state government agencies	431,987		344,748		1,265,798		969,274
U.S. Federal Government agencies	594,771		429,031		1,288,213		1,155,773
International government agencies	180,049		107,353		499,091		345,629
Other, including local municipalities and commercial customers	36,713		20,205		95,252		67,025
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

By geography

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
United States	$	1,053,940	$	787,092	$	2,622,469	$	2,168,033
United Kingdom	74,109		53,364		211,777		190,088
Australia	65,283		38,415		192,161		100,390
Rest of world	50,188		22,466		121,947		79,190
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

Contract balances

Differences in timing between revenue recognition and cash collection result in contract assets and contract liabilities. We classify these assets as accounts receivable — billed and billable and unbilled receivables; the liabilities are classified as deferred revenue.

In many contracts, we bill our customers on a monthly basis shortly after the month end for work performed in that month and such balances are considered collectible and are included within accounts receivable — billed and billable.

Exceptions to this pattern will arise for various reasons, including those listed below.

•Under cost-plus contracts, we are typically required to estimate a contract’s share of our general and administrative expenses. This share is based upon estimates of total costs which may vary over time. We typically invoice our customers at an agreed provisional billing rate which may differ from actual rates incurred. If our actual rates are higher than the provisional billing rates, an asset is recorded for this variance; if the provisional billing rates are higher than our actual rates, we record a liability.

•Certain contracts include retainage balances, whereby revenue is earned but some portion of cash payments are held back by the customer for a period of time, typically to allow the customer to confirm the objective criteria laid out by the contract have been met. This balance is classified as accounts receivable - unbilled until restrictions on billing are lifted.

•In certain contracts, we may receive funds from our customers prior to performing operations. These funds are typically referred to as “set-up costs” and reflect the need for us to make investments in infrastructure prior to providing a service. This investment in infrastructure is not a performance obligation which is distinct from the service that is subsequently provided and, as a result, revenue is not recognized based upon the establishment of this infrastructure, but rather over the course of the contractual relationship. The funds are initially recorded as deferred revenue and recognized over the term of the contract. Other contracts may not include set-up fees but will provide higher fees in earlier periods of the contract. The premium on these fees is deferred.

•Some of our contracts, notably our employment services contracts in the Outside the U.S. Segment, include payments for desired outcomes, such as job placement and job retention and these outcome payments occur over several months. We are required to estimate these outcome fees ahead of their realization and recognize this estimated fee over the period of delivery.

Of our revenue for the three and nine months ended June 30, 2021, approximately $7.5 million and $36.7 million, respectively, were from cash payments made to us prior to October 1, 2020. For the three and nine months ended June 30, 2020, we recognized revenue of $9.1 million and $49.2 million, respectively, from payments made prior to October 1, 2019.

Contract estimates

We are required to use estimates in recognizing revenue from some of our contracts. As discussed in "Note 1. Organization and Basis of Presentation," the calculation of these estimates has been complicated by the COVID-19 pandemic, which has reduced our ability to use past results to estimate future performance.

Some of our performance-based contract revenue is recognized based upon future outcomes defined in each contract. This is the case in many of our employment services contracts in the Outside the U.S. Segment, where we are paid as individuals attain employment goals, which may take many months to achieve. We recognize revenue on these contracts over the period of performance. Our estimates vary from contract to contract but may include estimates of the number of participants, the length of the contract, and the participants reaching employment milestones. We are required to estimate these outcome fees ahead of their realization and recognize this estimated fee over the period of delivery. In almost all of the jurisdictions in which we operate, the employment markets have experienced significant changes due to the COVID-19 pandemic. As the pandemic commenced, many employment opportunities were terminated. Our volume of new program participants is beginning to increase as governments shift their focus to addressing the residual impacts of the pandemic, such as the economy and unemployment, particularly in those countries where the pandemic has stabilized, and economies are beginning to reopen.

Other performance-based contracts with future outcomes include those where we recognize an average effective rate per participant based upon the total volume of expected participants. In this instance, we are required to estimate the amount of discount applied to determine the average rate of revenue per participant. Our revised estimates of participant numbers are based upon our updated evaluation of probable future volumes.

Where we make changes to our estimates, these are recognized on a cumulative catch-up basis. In the three and nine months ended June 30, 2021, we reported a benefit to revenue of $1.8 million and $17.8 million, respectively, and a benefit to diluted earnings per share of $0.03 and $0.20, respectively, from changes in estimates. The corresponding change in fiscal year 2020 was a decline of $1.4 million and $9.1 million for the three and nine months ended June 30, 2020, respectively.

Remaining performance obligations

At June 30, 2021, we had approximately $635 million of remaining performance obligations. We anticipate that we will recognize revenue on approximately 42% of this balance within the next 12 months. This balance excludes contracts with an original duration of twelve months or less, including contracts with a penalty-free termination for convenience clause, and any variable consideration which is allocated entirely to future performance obligations, including variable transaction fees or fees tied directly to costs incurred.

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Earnings Per Share

9 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per ShareThe weighted average number of shares outstanding used to compute earnings per share was as follows:

	Three Months Ended June 30,		Nine Months Ended June 30,
(shares in thousands)	2021	2020	2021	2020
Basic weighted average shares outstanding	62,064	61,882	62,028	63,463
Dilutive effect of unvested RSUs	389	220	272	203
Denominator for diluted earnings per share	62,453	62,102	62,300	63,666

Our dilutive earnings per share for the three and nine months ended June 30, 2021 excludes the effect from approximately 0.1 million and 0.2 million unvested restricted stock units, respectively, as adding them to our calculation would be antidilutive. Our diluted earnings per share for the three and nine months ended June 30, 2020, excludes any effect from approximately 0.3 million and 0.3 million unvested restricted stock units, respectively, as adding them to our calculation would have been antidilutive.

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Business combinations

9 Months Ended

Jun. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Business combinations

Business Combinations

VES Group, Inc. (VES)

On May 28, 2021, we acquired all of VES for an estimated cash purchase price of $1.37 billion (the Acquisition). The final purchase price is subject to adjustment and is expected to be finalized during our fourth fiscal quarter of 2021. This business was integrated into our U.S. Federal Services Segment and is expected to increase revenue attributable to providing independent and conflict-free clinical business process outsourcing (BPO) services at scale. The Acquisition also supports our ongoing strategic priority of expansion into the U.S. Federal market and creates new opportunities to apply digital solutions to improve citizen services. We entered into a new credit agreement to fund the Acquisition. See "Note 6 - Debt" for further details. The results of operations for VES are included in the consolidated results of Maximus, Inc. starting May 28, 2021.

At this time, we are in the process of finalizing the purchase price and the valuation of all acquired assets and assumed liabilities. The balances below represent our best estimate and are subject to change:

(in thousands)	Estimated Fair Value of Assets and Liabilities
Cash consideration paid, net of cash acquired	$	1,360,231
Estimated additional cash payments	7,494
Estimated cash consideration, net of cash acquired	$	1,367,725
Accounts receivable - billed, billable and unbilled	$	44,078
Prepaid expenses and other current assets	13,911
Property and equipment, net	9,113
Operating lease right-of-use assets	18,898
Intangible assets	664,000
Other assets	12,816
Total identifiable assets acquired	762,816
Accounts payable and accrued compensation	42,978
Operating lease liabilities	18,898
Income taxes payable	6,196
Deferred income taxes	177,626
Other long-term liabilities	6,667
Net identifiable assets acquired	510,451
Goodwill	857,274
Net assets acquired	$	1,367,725

Goodwill represents the value of the assembled workforce and the enhanced knowledge, capabilities, and qualifications held by the business. This goodwill balance is not expected to be deductible for tax purposes.

Our evaluation of the intangible assets acquired with VES has identified three assets. The assets were valued using methods which required a number of estimates and, accordingly, they are considered Level 3 measurements within the Accounting Standard Codification No. 820 (ASC 820) fair value methodology.

•Customer relationships represent the value of the existing contractual relationships with the United States Federal Government. These were valued using the excess earnings method, which required us to utilize estimated future revenues and earnings from contracts.

•VES maintains a provider network of third-party providers that assist in the performance of their clinical services. This network was valued using the cost method, which included both the cost of recreating such a network and the profits foregone during the time which would be required to recreate the network.

•VES maintained proprietary technology which interacted with U.S. Federal Government systems, facilitated the transmission of examination data and supported the performance of the contracts. We valued the technology using a relief-from-royalty method, which required us to estimate future revenues and an arms' length royalty rate that a third-party provider might use to supply this service.

A summary of the asset values and asset lives is as follows:

(in thousands)	Estimated Straight-Line Useful Life	Estimated Fair Value
Customer contracts and relationships	12 years	$	580,000
Provider network	12 years	57,000
Technology-based intangible assets	14 years	27,000
Total intangible assets		$	664,000

In connection with certain liabilities acquired in the VES acquisition, we have established a liability of $12.0 million for a billing dispute between VES and its customer relating to prior year billings. Our exposure is partially offset by an indemnification asset of $6.0 million. In the event that this dispute is settled for less than $6.0 million, we will return the indemnification asset to the sellers (as well as any difference between the settlement amount and $6.0 million). In the event that the settlement exceeds $6.0 million, we are entitled to utilize the indemnification asset, and if the settlement exceeds $12.0 million, pursue other recourse permitted under the purchase agreement. At this time $12.0 million remains our best estimate of this liability. In addition, we have established a tax liability of $11.8 million for uncertain tax positions within VES, partially offset by another indemnification asset of $6.7 million. Both indemnification assets are secured in third party escrow accounts and we have recourse to other funds in the event these contingencies exceed the escrow balances.

From the acquisition date of May 28, 2021 through June 30, 2021, the acquired business contributed revenue of $45.8 million and gross profit of $19.5 million. Amortization of intangible assets for the period through June 30, 2021 was $4.6 million.

The Federal division of Attain, LLC (Attain)

On March 1, 2021, we acquired all of Attain for a cash purchase price of $419.1 million. This business was integrated into our U.S. Federal Services Segment and is expected to strengthen our position to further design, develop, and deliver more innovative, impactful solutions and drive automation of processes to improve citizen engagement and the delivery of critical federal programs, as well as expand our presence in the U.S. Federal market. We utilized borrowings on the credit facility we had in place at the time, as well as cash on our balance sheet to fund the acquisition. The results of operations for Attain are included in our results from March 1, 2021.

We are in the process of finalizing the valuation as of March 1, 2021, of all acquired assets and assumed liabilities and, accordingly, the balances below represent our best estimate and are subject to change:

(in thousands)	Estimated fair value of assets and liabilities at acquisition date as of March 31, 2021		Adjustments		Estimated fair value of assets and liabilities at acquisition date as of June 30, 2021
Cash consideration, net of cash acquired	$	419,864	$	(767)	$	419,097
Accounts receivable - billed, billable and unbilled	$	39,274	$	101	$	39,375
Prepaid expenses and other current assets	1,336		(410)		926
Property and equipment, net	703		(703)		—
Operating lease right-of-use assets	25,089		(129)		24,960
Other assets	84		(10)		74
Intangible assets	105,000		—		105,000
Total identifiable assets acquired	171,486		(1,151)		170,335
Accounts payable and other liabilities	28,301		562		28,863
Operating lease liabilities, less current portion	26,786		(385)		26,401
Net identifiable assets acquired	116,399		(1,328)		115,071
Goodwill	303,465		561		304,026
Net assets acquired	$	419,864	$	(767)	$	419,097

Goodwill represents the value of the assembled workforce and the enhanced knowledge, capabilities, and qualifications held by the business. This goodwill balance is expected to be deductible for tax purposes.

The intangible assets acquired represent customer relationships. We estimated this balance using the excess earnings method (which is a Level 3 measurement within the ASC 820 fair value hierarchy) and used a number of estimates, including expected future earnings from the acquired business and an appropriate expected rate of return. We have assumed a useful economic life of ten years, representing our expectation of the period over which we will receive the benefit.

During the three and nine months ended June 30, 2021, the acquired business contributed revenue of $56.4 million and $74.8 million, respectively, and gross profit of $13.2 million and $17.1 million, respectively.

VES and Attain

The following table presents certain pro forma results for the three and nine months ended June 30, 2021 and 2020 and the twelve months ended June 30, 2021, as though the acquisitions of both VES and Attain had occurred on October 1, 2019. The twelve month information is consistent with that utilized in our debt covenant calculations. This pro forma information is presented for information purposes only and is not necessarily indicative of the results if the acquisition had taken place on that date. The pro forma results below eliminate intercompany transactions, include amortization charges for acquired intangible assets, and estimates of interest expense based upon our total estimated borrowings, eliminate pre-acquisition transaction costs and reflect corresponding changes in our provision for income taxes. Acquisition related costs incurred by Maximus, VES and Attain have been excluded in the following pro forma results. These costs were $8.8 million, $52.2 million and $0.3 million, respectively.

	Unaudited pro forma results
	Three Months Ended June 30,				Nine Months Ended June 30,				Trailing Twelve Months Ended June 30,
(in thousands, except per share amounts)	2021		2020		2021		2020		2021
Revenue	$	1,335,780	$	996,462	$	3,566,466	$	2,934,920	$	4,645,540
Cost of revenue	1,004,523		787,189		2,679,170		2,283,589		3,503,074
Gross profit	331,257		209,273		887,296		651,331		1,142,466
Selling, general, and administrative expenses	151,321		110,754		425,062		360,370		551,143
Amortization of intangible assets	21,301		25,090		63,856		75,868		88,586
Operating income	158,635		73,429		398,378		215,093		502,737
Interest expense	8,701		9,423		26,715		28,528		36,426
Other (expense)/income, net	(7,320)		(2,126)		(10,401)		(11,755)		(11,437)
Income before income taxes	142,614		61,880		361,262		174,810		454,874
Provision for income taxes	37,123		15,549		94,735		38,897		120,248
Net income	$	105,491	$	46,331	$	266,527	$	135,913	$	334,626
Basic earnings per share	$	1.70	$	0.75	$	4.30	$	2.14	$	5.40
Diluted earnings per share	$	1.69	$	0.75	$	4.28	$	2.13	$	5.37
Dividends declared per share	$	0.28	$	0.28	$	0.84	$	0.84	$	1.12
Weighted average shares outstanding:
Basic	62,064		61,882		62,028		63,463		62,001
Diluted	62,453		62,102		62,300		63,666		62,285

Other acquisitions

On February 28, 2020, we acquired 100% of the share capital of InjuryNet Australia Pty Limited (InjuryNet) for a purchase price of $4.4 million ($6.7 million Australian Dollars), which included acquisition-related contingent consideration of $2.1 million ($3.1 million Australian Dollars) based upon future earnings. InjuryNet provides workplace medical services in Australia. The business was integrated into our Outside the U.S. Segment. We have completed our assessment of all acquired assets and liabilities assumed. We recorded estimated goodwill and intangible assets of $2.6 million and $0.9 million, respectively, related to the acquisition.

On August 21, 2020, we acquired 100% of the share capital of Index Root Korea Co. Ltd (Index Root) for an estimated purchase price of $5.4 million (6.3 billion South Korean Won), which includes acquisition-related contingent consideration estimated at $0.9 million (1.1 billion South Korean Won) based upon future earnings. We acquired Index Root to expand our geographic presence to South Korea. The business was integrated into our Outside the U.S. Segment. We have completed our assessment of all acquired assets and liabilities assumed. We recorded estimated goodwill and intangible assets of $4.6 million and $1.4 million, respectively, related to the acquisition. During the second quarter of fiscal year 2021, we concluded that payment of the contingent consideration was unlikely and, accordingly, a benefit of $1.0 million was recorded within our acquisition expenses.

Changes in goodwill for the nine months ended June 30, 2021, were as follows:

(in thousands)	U.S. Services		U.S. Federal Services		Outside the U.S		Total
Balance as of September 30, 2020	$	164,472	$	381,719	$	46,938	$	593,129
Estimated effects of acquisitions	—		1,161,300		623		1,161,923
Foreign currency translation	—		—		2,743		2,743
Balance as of June 30, 2021	$	164,472	$	1,543,019	$	50,304	$	1,757,795

There have been no impairment charges to our goodwill.

The following table sets forth the components of intangible assets (in thousands):

	As of June 30, 2021						As of September 30, 2020
(in thousands)	Cost		Accumulated Amortization		Intangible Assets, net		Cost		Accumulated Amortization		Intangible Assets, net
Customer contracts and relationships	$	921,023	$	112,546	$	808,477	$	235,287	$	90,302	$	144,985
VES Provider network	57,000		396		56,604		—		—		—
Technology-based intangible assets	32,400		4,994		27,406		5,631		4,723		908
Trademarks and trade names	4,516		4,516		—		4,479		4,479		—
Total	$	1,014,939	$	122,452	$	892,487	$	245,397	$	99,504	$	145,893

As of June 30, 2021, our intangible assets have a weighted average remaining life of 11.2 years, comprising 11.2 years for customer contracts and relationships, 11.9 years for the provider network and 13.7 years for technology-based intangible assets. The estimated future amortization expense for the next five years for the intangible assets held by the Company as of June 30, 2021 is shown below. As noted above, we have not yet completed our assessment of the valuation of the intangible assets acquired with VES and Attain. These future amortization expenses represent our best estimate of future costs.

(In thousands)	Estimated Future Amortization Expense
Year ended September 30, 2021, Remainder of year	$	20,518
Year ended September 30, 2022	82,025
Year ended September 30, 2023	82,009
Year ended September 30, 2024	81,885
Year ended September 30, 2025	81,678
Year ended September 30, 2026	81,551

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Debt

9 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Debt

Debt

Concurrent with the acquisition of VES, we entered into a new credit agreement (the "Credit Agreement"), which replaced our existing revolving credit facility.

The Credit Agreement has three components.

•A five year $1.10 billion term loan with interest payable at a rate based upon the London Interbank Offered Rate (LIBOR) plus a margin dependent upon our leverage ratio. From the inception of the loan through June 30, 2021, the interest rate was LIBOR plus 1.75%.

•A seven year $400.0 million term loan with interest payable at the higher of LIBOR or 0.5%, plus 2.0%. From the inception of the loan through June 30, 2021, the interest rate was 2.5%.

•A $600.0 million revolving credit facility, which is repayable in full in May 2026. Interest on the revolving credit facility is based upon LIBOR plus a margin dependent upon our leverage ratio. From the inception of the loan through June 30, 2021, the interest rate was LIBOR plus 1.75%.

LIBOR is anticipated to be phased out over the next 18 months and alternative benchmark rates have been identified in this agreement. This is the only significant arrangement within the Company that utilizes LIBOR.

The Credit Agreement is available for general corporate purposes, including the funding of working capital, capital expenditures and possible future acquisitions. In addition to borrowings, it allows us to continue to issue letters of credit when necessary. The Credit Agreement includes a number of covenants, the terms of which are customary and include a net total leverage ratio and a net interest coverage ratio. The net total leverage ratio is calculated as total outstanding debt less unrestricted cash, not to exceed $75.0 million. With certain exceptions, the leverage ratio does not permit our total indebtedness to exceed four times our EBITDA, as defined by the Credit Agreement, calculated over the previous twelve months. We are in compliance with those covenants at this time, with a calculated net total leverage ratio of 2.4:1. We do not believe that the covenants represent a significant restriction to our ability to successfully operate the business or to pay our dividends.

Costs incurred in establishing the Credit Agreement have been reported as a reduction to the gross debt balance and will be amortized over the respective lives of the arrangements. Prior to the completion of the acquisition of VES, we entered into a bridging loan facility to ensure that funds were available in the event that our new credit facility would not be available in time. We did not use this interim facility. The $8.5 million cost of this facility was included within "other (expense)/income, net" on our consolidated statements of operations for the three and nine months ended June 30, 2021.

We estimate the fair value of its debt by discounting the future cash flows of each instrument using estimated market rates of debt instruments with similar maturities and credit profiles. These inputs are classified as Level 3 within the fair value hierarchy. At June 30, 2021, the carrying value reported in the consolidated balance sheet for our long-term debt approximated its fair value.

In addition to the Credit Agreement, we hold smaller credit facilities in Australia and the United Kingdom. These allow our businesses to borrow to meet any short-term working capital needs.

Our debt balances at June 30, 2021 and September 30, 2020 were as follows:

(in thousands)	June 30, 2021		September 30, 2020
Five year, $1.1 billion loan	$	1,100,000	$	—
Seven year, $400 million loan	400,000		—
New $600 million revolving credit facility	200,000		—
Old $400 million revolving credit facility	—		—
Subsidiary loan agreements	7,754		28,895
Total debt principal	1,707,754		28,895
Less unamortized debt-issuance costs and discounts	(14,033)		—
Total debt	1,693,721		28,895
Less current portion	(60,586)		(10,878)
Long-term debt	$	1,633,135	$	18,017

The scheduled repayments of our debt balance is as follows:

(In thousands)	Scheduled Debt Repayments
Year ended September 30, 2021, Remainder of year	$	15,724
Year ended September 30, 2022	62,895
Year ended September 30, 2023	68,761
Year ended September 30, 2024	86,500
Year ended September 30, 2025	91,656
Thereafter	1,382,218
Total debt principal	$	1,707,754

Derivative - Interest rate swap

In June 2021, we entered into an interest rate swap agreement for a notional amount of $300.0 million, effective June 28, 2021, with an expiration date of May 28, 2026, which hedged the floating LIBOR on a portion of the term loan (Tranche A, $1.10 billion balance) under the Credit Agreement to a fixed rate of 0.986%. We elected to designate this interest rate swap as a cash flow hedge for accounting purposes. At June 30, 2021, our derivative was in a $1.4 million net liability position and recorded in "other current liabilities" on our consolidated balance sheet. As this cash flow hedge is considered effective, any future gains and losses will be reflected within

Accumulated Other Comprehensive Income in the Consolidated Statements of Comprehensive Income. No ineffectiveness was recorded on this contract during the three or nine months ended June 30, 2021.

We are exposed to credit losses in the event of nonperformance by the counterparty to our derivative instrument. Our counterparty has investment grade credit ratings; accordingly, we anticipate that the counterparty will be able to fully satisfy its obligations under the contracts. Our agreements outline the conditions upon which it or the counterparty are required to post collateral. At June 30, 2021,we had no collateral posted with its counterparty related to the derivatives.

The only assets or liabilities we had at June 30, 2021 that are recorded at fair value on a recurring basis is the interest rate swaps. Generally, the Company obtains its Level 2 pricing inputs from its counterparties. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

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Supplemental Disclosures

9 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Disclosures

Supplemental Disclosures

Under a resolution adopted in March 2020, the Board of Directors authorized the purchase, at management's discretion, of up to $200 million of our common stock. This supplemented a similar resolution adopted in June 2018. During the nine months ended June 30, 2021, we purchased approximately 52,000 shares of our common stock at a cost of $3.4 million. During the nine months ended June 30, 2020, we purchased approximately 2,767,000 shares of our common stock at a cost of $167.0 million. At June 30, 2021, $146.7 million remained available for future stock repurchases.

During the nine months ended June 30, 2021, we granted approximately 366,000 restricted stock units (RSUs) to our employees. Most of these awards will vest ratably over four years, as opposed to five years in previous years. In addition, we awarded approximately 85,000 performance stock units in the nine months ended June 30, 2021, to certain executives that will vest at the end of a three-year performance period with the actual number of vested units dependent upon the Company's achievement of certain performance targets.

Our deferred compensation plan uses both mutual fund and life insurance investments to fund its obligations. The mutual funds are recorded at fair value, based upon quoted prices in active markets (Level 1), and the life insurance investments at cash surrender value; changes in value are reported in our consolidated statements of operations. At June 30, 2021, the deferred compensation plan held $28.9 million of the mutual fund investments.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and other amounts included within current assets and liabilities that meet the definition of a financial instrument are shown at values equivalent to fair value due to the short-term nature of these items. Our accounts receivable billed and billable balance includes both amounts invoiced and amounts that are ready to be invoiced where the funds are collectible within standard invoice terms. Our accounts receivable unbilled balance includes balances where revenue has been earned but contractual terms preclude invoicing at June 30, 2021. Restricted cash represents funds which are held in our bank accounts but which we are precluded from using for general business needs through contractual requirements; these requirements include serving as collateral for lease, credit card, or letter of credit arrangements, or where we hold funds on behalf of clients. Restricted cash is included within "prepaid expenses and other current assets" on our consolidated balance sheets and is included within "cash, cash equivalents, and restricted cash" in our consolidated statements of cash flows. A reconciliation of these balances is shown below.

	Balance as of
(in thousands)	June 30, 2021		September 30, 2020		June 30, 2020
Cash and cash equivalents	$	96,110	$	71,737	$	81,548
Restricted cash (recorded within "prepaid expenses and other current assets")	17,126		16,824		14,440
Cash, cash equivalents, and restricted cash	$	113,236	$	88,561	$	95,988

As noted in "Note 6 - Debt", we recently entered into new long term debt arrangements. Accordingly, we believe the balances disclosed approximates the fair value.

Supplementary Cash Flow Information

	Nine Months Ended June 30,
(in thousands)	2021		2020
Interest payments	$	4,751	$	1,200
Income tax payments	68,031		55,600
Cash payments included in the measurement of lease liabilities	75,172		83,700
Operating lease liabilities arising from new or remeasured right-of-use assets	18,537		39,900

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Litigation

9 Months Ended

Jun. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Litigation

Litigation

We are subject to audits, investigations, and reviews relating to compliance with the laws and regulations that govern our role as a contractor to agencies and departments of federal, state, local, and foreign governments, and otherwise in connection with performing services in countries outside of the U.S. Adverse findings could lead to criminal, civil, or administrative proceedings, and we could be faced with penalties, fines, suspension, or debarment. Adverse findings could also have a material adverse effect on us because of our reliance on government contracts. We are subject to periodic audits by federal, state, local, and foreign governments for taxes. We are also involved in various claims, arbitrations, and lawsuits arising in the normal conduct of our business. These include but are not limited to bid protests, employment matters, contractual disputes, and charges before administrative agencies. Although we can give no assurance, based upon our evaluation and taking into account the advice of legal counsel, we do not believe that the outcome of any existing matter would likely have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

Medicaid claims

The Centers for Medicare and Medicaid Services (CMS) asserted two disallowances against a state Medicaid agency. The state contested the first disallowance and ultimately settled that claim for approximately $7.3 million. The second disallowance of approximately $19.9 million is still being contested by the state. The state is seeking reimbursement from us for the first disallowance ($7.3 million) and has indicated its intention to seek reimbursement of the second disallowance if its legal challenge is unsuccessful. From 2004 through 2009, we had a contract with the state agency in support of its school-based Medicaid claims. We entered into separate agreements with the school districts under which we assisted the districts with preparing and submitting claims to the state Medicaid agency which, in turn, submitted claims for reimbursement to CMS. The state has asserted that its agreement with us requires us to reimburse the state for the amounts owed to CMS. However, our agreements with the school districts require them to reimburse us for such amounts, and therefore we believe the school districts are responsible for any amounts that ultimately must be refunded to CMS. Although it is reasonably possible that a court could conclude we are responsible for the full balance of the disallowances, we believe our exposure in this matter is limited to our fees associated with this work and that the school districts will be responsible for the remainder. We have reserved our estimated fees earned from this engagement relating to the disallowances. We exited the federal healthcare-claiming business in 2009 and no longer provide the services at issue in this matter.

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Subsequent Events	9 Months Ended
	Jun. 30, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn July 9, 2021, our Board of Directors declared a quarterly cash dividend of $0.28 for each share of our common stock outstanding. The dividend is payable on August 31, 2021, to shareholders of record on August 13, 2021. Based upon the number of shares outstanding, we anticipate a cash payment of approximately $17.2 million.

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Organization and Basis of Presentation (Policies)

9 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. As permitted by these instructions, they do not include all of the information and notes required by generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation are included. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended June 30, 2021, are not necessarily indicative of the results that may be expected for the full fiscal year. The balance sheet at September 30, 2020, has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements.

Estimates

Estimates

The preparation of these financial statements, in conformity with GAAP in the United States, 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 goodwill and amounts related to income taxes, certain accrued liabilities, and contingencies and litigation.

We base our estimates on historical experience and expectations of the future that we believe to be reasonable. The economic and political effects of the coronavirus (COVID-19) global pandemic increase uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates may be subject to greater volatility than has been the case in the past.

•Our balance sheet includes goodwill valued at $1.76 billion. This balance is allocated between reporting units, which are consistent with our three operating segments. Goodwill is not amortized but is tested for impairment when necessary and no less than once per year. We performed our last annual goodwill impairment test as of July 1, 2020, using a qualitative assessment. There has been no indication of impairment of any reporting unit at this time or since.

•Our balance sheet includes a number of long-lived assets, including property and equipment, capitalized software, operating lease right-of-use assets, deferred contract costs and intangible assets. These assets are depreciated or amortized over their estimated useful economic lives but are subject to impairment if events indicate that the carrying amounts may not be recoverable. At this time, there are no balances which we believe are not recoverable.

•Included within our long-lived assets are $892.5 million of intangible assets, which have been acquired through business combinations. We use judgment in identifying, valuing, and assigning a useful economic life to assets as they are acquired. The judgments required vary with the type of asset but may include projections of future results, estimated costs to recreate or replace assets, the cost of utilizing other, similar assets provided by a third party and an appropriate cost of capital. Where appropriate, we utilize the services of a third-party specialist to assist us in these valuations.

•Our balance sheet includes $1.13 billion of billed, billable and unbilled accounts receivable, net of allowance for credit losses. Beginning October 1, 2020, we have evaluated credit risk under ASC Topic 326, as further described below. Credit risk has not historically been significant to our business due to the nature of our customers. During the three and nine months ended June 30, 2021, we recorded changes to our estimated credit losses of $0.1 million and $1.0 million, respectively.

•As disclosed in "Note 3. Revenue Recognition," revenue for some of our employment services contracts in the Outside the U.S. Segment is based upon achievement of future outcomes as defined in each contract. Specifically, we are paid as individuals attain employment goals, which may take many months to achieve. Revenue is recognized on these contracts over the period of performance. Employment markets worldwide

suffered a significant shock during fiscal year 2020 due to COVID-19, which resulted in significant reductions in work performed and outcomes reached. Although we are seeing recovery in fiscal year 2021, this revenue remains subject to volatility.

•As disclosed in "Note 5. Business Combinations," we have acquired two businesses during fiscal year 2021. For assets acquired and liabilities assumed, we are required to identify and recognize these balances at their fair value as of the date of acquisition. We are still in the process of completing the valuations of these assets and, accordingly, there may be changes in these balances.

Changes in financial reporting

Changes in financial reporting

In August 2018, the Financial Accounting Standards Board (FASB) issued ASU No. 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This accounting guidance requires customers in cloud-computing arrangements to identify and defer certain implementation costs in a manner broadly consistent with that of existing guidance on the costs to develop or obtain internal-use software. Costs capitalized under this guidance will be expensed over the term of the cloud computing arrangement. We adopted this guidance on October 1, 2020, using a prospective approach.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This update introduces a new model for recognizing credit losses on financial instruments, including losses on accounts receivable. This update replaced the existing incurred loss impairment model with an expected loss model. We adopted this guidance on October 1, 2020, with no material impact to our financial statements.

In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. This standard will not change the manner in which we would identify a goodwill impairment but would change any subsequent calculation of an impairment charge. We adopted this standard on October 1, 2020. The effect of this new standard will depend upon the outcome of future goodwill impairment tests.

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Segment Information (Tables)

9 Months Ended

Jun. 30, 2021

Segment Reporting [Abstract]

Schedule of financial information for each of the Company's business segments

	Three Months Ended June 30,						Nine Months Ended June 30,
(in thousands)	2021		% (1)	2020		% (1)	2021		% (1)	2020		% (1)
Revenue:
U.S. Services	$	436,338		$	336,950		$	1,269,487		$	957,929
U.S. Federal Services	617,601			450,143			1,352,982			1,210,105
Outside the U.S.	189,581			114,244			525,885			369,667
Total	$	1,243,520		$	901,337		$	3,148,354		$	2,537,701
Gross profit:
U.S. Services	$	104,814	24.0%	$	93,029	27.6%	$	323,256	25.5%	$	268,073	28.0%
U.S. Federal Services	155,776		25.2%	84,723		18.8%	312,405		23.1%	232,502		19.2%
Outside the U.S.	31,266		16.5%	7,851		6.9%	92,908		17.7%	13,576		3.7%
Total	$	291,856	23.5%	$	185,603	20.6%	$	728,569	23.1%	$	514,151	20.3%
Selling, general & administrative expense:
U.S. Services	$	42,606	9.8%	$	31,996	9.5%	$	116,655	9.2%	$	102,633	10.7%
U.S. Federal Services	69,647		11.3%	45,490		10.1%	172,877		12.8%	131,455		10.9%
Outside the U.S.	22,973		12.1%	13,668		12.0%	65,018		12.4%	47,125		12.7%
Gain on sale of business (3)	—		NM	(1,706)		NM	—		NM	(1,706)		NM
Other (2)	4,903		NM	134		NM	9,948		NM	4,155		NM
Total	$	140,129	11.3%	$	89,582	9.9%	$	364,498	11.6%	$	283,662	11.2%
Operating income:
U.S. Services	$	62,208	14.3%	$	61,033	18.1%	$	206,601	16.3%	$	165,440	17.3%
U.S. Federal Services	86,129		13.9%	39,233		8.7%	139,528		10.3%	101,047		8.4%
Outside the U.S.	8,293		4.4%	(5,817)		(5.1)%	27,890		5.3%	(33,549)		(9.1)%
Amortization of intangible assets	(12,132)		NM	(8,712)		NM	(23,718)		NM	(26,734)		NM
Gain on sale of business (3)	—		NM	1,706		NM	$	—	NM	1,706		NM
Other (2)	(4,903)		NM	(134)		NM	(9,948)		NM	(4,155)		NM
Total	$	139,595	11.2%	$	87,309	9.7%	$	340,353	10.8%	$	203,755	8.0%

(1) Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.”

(2) Other selling, general, and administrative expenses includes credits and costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed. Our results for the three and nine months ended June 30, 2021, included $5.6 million and $8.8 million, respectively, of expenses relating to the acquisitions of Attain, LLC, and VES Group, Inc. For more information, see "Note 5. Business Combinations."

(3) During fiscal year 2020, we sold Q2 Administrators LLC, a subsidiary within our U.S. Federal Services Segment, resulting in a gain.

Schedule of identifiable assets by segment

Identifiable assets for the segments are shown below. Identifiable assets for U.S. Federal Services increased due to the acquisitions of Attain, LLC and VES Group, Inc. Refer to "Note 5. Business Combinations" for details.

(in thousands)	June 30, 2021		September 30, 2020
U.S. Services	$	728,347	$	702,728
U.S. Federal Services	3,149,694		937,477
Outside the U.S.	304,952		224,532
Corporate	187,600		159,965
Total	$	4,370,593	$	2,024,702

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Revenue Recognition (Tables)

9 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

By operating segment and service

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
Program administration	$	325,755	$	251,616	$	964,981	$	724,960
Assessments and appeals	33,529		40,875		101,561		104,621
Workforce and children services	64,240		32,531		167,106		90,651
Other	12,814		11,928		35,839		37,697
Total U.S. Services	$	436,338	$	336,950	$	1,269,487	$	957,929
Program administration	$	451,594	$	362,973	$	1,005,706	$	949,071
Technology solutions	89,559		42,101		187,006		130,172
Assessments and appeals	76,448		45,069		160,270		130,862
Total U.S. Federal Services	$	617,601	$	450,143	$	1,352,982	$	1,210,105
Workforce and children services	$	94,310	$	55,046	$	269,743	$	146,968
Assessments and appeals	58,664		42,468		169,753		167,397
Program administration	34,296		15,544		80,284		49,583
Other	2,311		1,186		6,105		5,719
Total Outside the U.S.	$	189,581	$	114,244	$	525,885	$	369,667
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

By contract type

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
Performance-based	$	389,800	$	295,650	$	1,033,509	$	864,077
Cost-plus	282,808		422,641		953,373		1,184,425
Fixed price	146,175		132,535		413,296		352,255
Time and materials	424,737		50,511		748,176		136,944
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

By customer type

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
New York State government agencies	$	102,195	$	79,140	$	289,462	$	276,585
Other U.S. state government agencies	329,792		265,608		976,336		692,689
Total U.S. state government agencies	431,987		344,748		1,265,798		969,274
U.S. Federal Government agencies	594,771		429,031		1,288,213		1,155,773
International government agencies	180,049		107,353		499,091		345,629
Other, including local municipalities and commercial customers	36,713		20,205		95,252		67,025
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

By geography

	Three Months Ended June 30,				Nine Months Ended June 30,
(in thousands)	2021		2020		2021		2020
United States	$	1,053,940	$	787,092	$	2,622,469	$	2,168,033
United Kingdom	74,109		53,364		211,777		190,088
Australia	65,283		38,415		192,161		100,390
Rest of world	50,188		22,466		121,947		79,190
Total revenue	$	1,243,520	$	901,337	$	3,148,354	$	2,537,701

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Earnings Per Share (Tables)

9 Months Ended

Jun. 30, 2021

Earnings Per Share [Abstract]

Weighted average number of shares used to compute earnings per share

The weighted average number of shares outstanding used to compute earnings per share was as follows:

	Three Months Ended June 30,		Nine Months Ended June 30,
(shares in thousands)	2021	2020	2021	2020
Basic weighted average shares outstanding	62,064	61,882	62,028	63,463
Dilutive effect of unvested RSUs	389	220	272	203
Denominator for diluted earnings per share	62,453	62,102	62,300	63,666

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Business combinations (Tables)

9 Months Ended

Jun. 30, 2021

Business Combination and Asset Acquisition [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The balances below represent our best estimate and are subject to change:

(in thousands)	Estimated Fair Value of Assets and Liabilities
Cash consideration paid, net of cash acquired	$	1,360,231
Estimated additional cash payments	7,494
Estimated cash consideration, net of cash acquired	$	1,367,725
Accounts receivable - billed, billable and unbilled	$	44,078
Prepaid expenses and other current assets	13,911
Property and equipment, net	9,113
Operating lease right-of-use assets	18,898
Intangible assets	664,000
Other assets	12,816
Total identifiable assets acquired	762,816
Accounts payable and accrued compensation	42,978
Operating lease liabilities	18,898
Income taxes payable	6,196
Deferred income taxes	177,626
Other long-term liabilities	6,667
Net identifiable assets acquired	510,451
Goodwill	857,274
Net assets acquired	$	1,367,725

We are in the process of finalizing the valuation as of March 1, 2021, of all acquired assets and assumed liabilities and, accordingly, the balances below represent our best estimate and are subject to change:

(in thousands)	Estimated fair value of assets and liabilities at acquisition date as of March 31, 2021		Adjustments		Estimated fair value of assets and liabilities at acquisition date as of June 30, 2021
Cash consideration, net of cash acquired	$	419,864	$	(767)	$	419,097
Accounts receivable - billed, billable and unbilled	$	39,274	$	101	$	39,375
Prepaid expenses and other current assets	1,336		(410)		926
Property and equipment, net	703		(703)		—
Operating lease right-of-use assets	25,089		(129)		24,960
Other assets	84		(10)		74
Intangible assets	105,000		—		105,000
Total identifiable assets acquired	171,486		(1,151)		170,335
Accounts payable and other liabilities	28,301		562		28,863
Operating lease liabilities, less current portion	26,786		(385)		26,401
Net identifiable assets acquired	116,399		(1,328)		115,071
Goodwill	303,465		561		304,026
Net assets acquired	$	419,864	$	(767)	$	419,097

Schedule of Acquired Finite-Lived Intangible Assets by Major Class

A summary of the asset values and asset lives is as follows:

(in thousands)	Estimated Straight-Line Useful Life	Estimated Fair Value
Customer contracts and relationships	12 years	$	580,000
Provider network	12 years	57,000
Technology-based intangible assets	14 years	27,000
Total intangible assets		$	664,000

Schedule of Business Acquisition, Pro Forma Information

The pro forma results below eliminate intercompany transactions, include amortization charges for acquired intangible assets, and estimates of interest expense based upon our total estimated borrowings, eliminate pre-acquisition transaction costs and reflect corresponding changes in our provision for income taxes. Acquisition related costs incurred by Maximus, VES and Attain have been excluded in the following pro forma results. These costs were $8.8 million, $52.2 million and $0.3 million, respectively.

	Unaudited pro forma results
	Three Months Ended June 30,				Nine Months Ended June 30,				Trailing Twelve Months Ended June 30,
(in thousands, except per share amounts)	2021		2020		2021		2020		2021
Revenue	$	1,335,780	$	996,462	$	3,566,466	$	2,934,920	$	4,645,540
Cost of revenue	1,004,523		787,189		2,679,170		2,283,589		3,503,074
Gross profit	331,257		209,273		887,296		651,331		1,142,466
Selling, general, and administrative expenses	151,321		110,754		425,062		360,370		551,143
Amortization of intangible assets	21,301		25,090		63,856		75,868		88,586
Operating income	158,635		73,429		398,378		215,093		502,737
Interest expense	8,701		9,423		26,715		28,528		36,426
Other (expense)/income, net	(7,320)		(2,126)		(10,401)		(11,755)		(11,437)
Income before income taxes	142,614		61,880		361,262		174,810		454,874
Provision for income taxes	37,123		15,549		94,735		38,897		120,248
Net income	$	105,491	$	46,331	$	266,527	$	135,913	$	334,626
Basic earnings per share	$	1.70	$	0.75	$	4.30	$	2.14	$	5.40
Diluted earnings per share	$	1.69	$	0.75	$	4.28	$	2.13	$	5.37
Dividends declared per share	$	0.28	$	0.28	$	0.84	$	0.84	$	1.12
Weighted average shares outstanding:
Basic	62,064		61,882		62,028		63,463		62,001
Diluted	62,453		62,102		62,300		63,666		62,285

Schedule of Goodwill

Changes in goodwill for the nine months ended June 30, 2021, were as follows:

(in thousands)	U.S. Services		U.S. Federal Services		Outside the U.S		Total
Balance as of September 30, 2020	$	164,472	$	381,719	$	46,938	$	593,129
Estimated effects of acquisitions	—		1,161,300		623		1,161,923
Foreign currency translation	—		—		2,743		2,743
Balance as of June 30, 2021	$	164,472	$	1,543,019	$	50,304	$	1,757,795

Schedule of Finite-Lived Intangible Assets

The following table sets forth the components of intangible assets (in thousands):

	As of June 30, 2021						As of September 30, 2020
(in thousands)	Cost		Accumulated Amortization		Intangible Assets, net		Cost		Accumulated Amortization		Intangible Assets, net
Customer contracts and relationships	$	921,023	$	112,546	$	808,477	$	235,287	$	90,302	$	144,985
VES Provider network	57,000		396		56,604		—		—		—
Technology-based intangible assets	32,400		4,994		27,406		5,631		4,723		908
Trademarks and trade names	4,516		4,516		—		4,479		4,479		—
Total	$	1,014,939	$	122,452	$	892,487	$	245,397	$	99,504	$	145,893

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

The estimated future amortization expense for the next five years for the intangible assets held by the Company as of June 30, 2021 is shown below. As noted above, we have not yet completed our assessment of the valuation of the intangible assets acquired with VES and Attain. These future amortization expenses represent our best estimate of future costs.

(In thousands)	Estimated Future Amortization Expense
Year ended September 30, 2021, Remainder of year	$	20,518
Year ended September 30, 2022	82,025
Year ended September 30, 2023	82,009
Year ended September 30, 2024	81,885
Year ended September 30, 2025	81,678
Year ended September 30, 2026	81,551

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Debt (Tables)

9 Months Ended

Jun. 30, 2021

Debt Disclosure [Abstract]

Schedule of Debt

Our debt balances at June 30, 2021 and September 30, 2020 were as follows:

(in thousands)	June 30, 2021		September 30, 2020
Five year, $1.1 billion loan	$	1,100,000	$	—
Seven year, $400 million loan	400,000		—
New $600 million revolving credit facility	200,000		—
Old $400 million revolving credit facility	—		—
Subsidiary loan agreements	7,754		28,895
Total debt principal	1,707,754		28,895
Less unamortized debt-issuance costs and discounts	(14,033)		—
Total debt	1,693,721		28,895
Less current portion	(60,586)		(10,878)
Long-term debt	$	1,633,135	$	18,017

Schedule of Maturities of Long-term Debt

The scheduled repayments of our debt balance is as follows:

(In thousands)	Scheduled Debt Repayments
Year ended September 30, 2021, Remainder of year	$	15,724
Year ended September 30, 2022	62,895
Year ended September 30, 2023	68,761
Year ended September 30, 2024	86,500
Year ended September 30, 2025	91,656
Thereafter	1,382,218
Total debt principal	$	1,707,754

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Supplemental Disclosures (Tables)

9 Months Ended

Jun. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Cash and Cash Equivalents

A reconciliation of these balances is shown below.

	Balance as of
(in thousands)	June 30, 2021		September 30, 2020		June 30, 2020
Cash and cash equivalents	$	96,110	$	71,737	$	81,548
Restricted cash (recorded within "prepaid expenses and other current assets")	17,126		16,824		14,440
Cash, cash equivalents, and restricted cash	$	113,236	$	88,561	$	95,988

Restrictions on Cash and Cash Equivalents

A reconciliation of these balances is shown below.

	Balance as of
(in thousands)	June 30, 2021		September 30, 2020		June 30, 2020
Cash and cash equivalents	$	96,110	$	71,737	$	81,548
Restricted cash (recorded within "prepaid expenses and other current assets")	17,126		16,824		14,440
Cash, cash equivalents, and restricted cash	$	113,236	$	88,561	$	95,988

Supplementary Cash Flow Information

Supplementary Cash Flow Information

	Nine Months Ended June 30,
(in thousands)	2021		2020
Interest payments	$	4,751	$	1,200
Income tax payments	68,031		55,600
Cash payments included in the measurement of lease liabilities	75,172		83,700
Operating lease liabilities arising from new or remeasured right-of-use assets	18,537		39,900

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Organization and Basis of Presentation - Narrative (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2021 USD ($) segment business	Sep. 30, 2020 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Goodwill	$ 1,757,795	$ 1,757,795	$ 593,129
Number of operating segments | segment		3
Intangible assets, net	892,487	$ 892,487	$ 145,893
Billed, billable and unbilled accounts receivable	1,130,000	1,130,000
Bad debt expense	$ 100	$ 1,000
Number of businesses acquired | business		2

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Segment Information - Financial information by segment (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($) segment state	Jun. 30, 2020 USD ($)
Financial information for each of the Company's business segments
Number of operating segments | segment			3
Number of states supported in unemployment insurance programs (more than) | state			15
Revenue:
Revenue	$ 1,243,520	$ 901,337	$ 3,148,354	$ 2,537,701
Gross profit:
Gross profit	$ 291,856	$ 185,603	$ 728,569	$ 514,151
Gross profit (as a percent)	23.50%	20.60%	23.10%	20.30%
Selling, general & administrative expense:
Selling, general, and administrative expenses	$ 140,129	$ 89,582	$ 364,498	$ 283,662
Selling, general, and administrative expense (as a percent)	11.30%	9.90%	11.60%	11.20%
Gain on sale of a business			$ 0	$ 1,706
Operating income:
Operating income	$ 139,595	$ 87,309	$ 340,353	$ 203,755
Operating income (as a percent)		9.70%	10.80%	8.00%
Amortization of intangible assets	(12,132)	$ (8,712)	$ (23,718)	$ (26,734)
Acquisition-related expenses			8,800
Segment Reconciling Items
Selling, general & administrative expense:
Selling, general, and administrative expenses	4,903	134	9,948	4,155
Gain on sale of a business	0	1,706	0	1,706
Operating income:
Amortization of intangible assets	(12,132)	(8,712)	(23,718)	(26,734)
Other	(4,903)	(134)	(9,948)	(4,155)
Acquisition-related expenses	5,600		8,800
U.S. Services
Revenue:
Revenue	436,338	336,950	1,269,487	957,929
U.S. Services | Operating Segments
Revenue:
Revenue	436,338	336,950	1,269,487	957,929
Gross profit:
Gross profit	$ 104,814	$ 93,029	$ 323,256	$ 268,073
Gross profit (as a percent)	24.00%	27.60%	25.50%	28.00%
Selling, general & administrative expense:
Selling, general, and administrative expenses	$ 42,606	$ 31,996	$ 116,655	$ 102,633
Selling, general, and administrative expense (as a percent)	9.80%	9.50%	9.20%	10.70%
Operating income:
Operating income	$ 62,208	$ 61,033	$ 206,601	$ 165,440
Operating income (as a percent)	14.30%	18.10%	16.30%	17.30%
U.S. Federal Services
Revenue:
Revenue	$ 617,601	$ 450,143	$ 1,352,982	$ 1,210,105
U.S. Federal Services | Operating Segments
Revenue:
Revenue	617,601	450,143	1,352,982	1,210,105
Gross profit:
Gross profit	$ 155,776	$ 84,723	$ 312,405	$ 232,502
Gross profit (as a percent)	25.20%	18.80%	23.10%	19.20%
Selling, general & administrative expense:
Selling, general, and administrative expenses	$ 69,647	$ 45,490	$ 172,877	$ 131,455
Selling, general, and administrative expense (as a percent)	11.30%	10.10%	12.80%	10.90%
Operating income:
Operating income	$ 86,129	$ 39,233	$ 139,528	$ 101,047
Operating income (as a percent)	13.90%	8.70%	10.30%	8.40%
Outside the U.S.
Revenue:
Revenue	$ 189,581	$ 114,244	$ 525,885	$ 369,667
Outside the U.S. | Operating Segments
Revenue:
Revenue	189,581	114,244	525,885	369,667
Gross profit:
Gross profit	$ 31,266	$ 7,851	$ 92,908	$ 13,576
Gross profit (as a percent)	16.50%	6.90%	17.70%	3.70%
Selling, general & administrative expense:
Selling, general, and administrative expenses	$ 22,973	$ 13,668	$ 65,018	$ 47,125
Selling, general, and administrative expense (as a percent)	12.10%	12.00%	12.40%	12.70%
Operating income:
Operating income	$ 8,293	$ (5,817)	$ 27,890	$ (33,549)
Operating income (as a percent)	4.40%	(5.10%)	5.30%	(9.10%)

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Segment Information - Identifiable assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Sep. 30, 2020
Financial information for each of the Company's business segments
Assets	$ 4,370,593	$ 2,024,702
Corporate
Financial information for each of the Company's business segments
Assets	187,600	159,965
U.S. Services | Operating Segments
Financial information for each of the Company's business segments
Assets	728,347	702,728
U.S. Federal Services | Operating Segments
Financial information for each of the Company's business segments
Assets	3,149,694	937,477
Outside the U.S. | Operating Segments
Financial information for each of the Company's business segments
Assets	$ 304,952	$ 224,532

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Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 1,243,520	$ 901,337	$ 3,148,354	$ 2,537,701
United States
Disaggregation of Revenue [Line Items]
Revenue	1,053,940	787,092	2,622,469	2,168,033
United Kingdom
Disaggregation of Revenue [Line Items]
Revenue	74,109	53,364	211,777	190,088
Australia
Disaggregation of Revenue [Line Items]
Revenue	65,283	38,415	192,161	100,390
Rest of world
Disaggregation of Revenue [Line Items]
Revenue	50,188	22,466	121,947	79,190
Total U.S. state government agencies
Disaggregation of Revenue [Line Items]
Revenue	431,987	344,748	1,265,798	969,274
New York State government agencies
Disaggregation of Revenue [Line Items]
Revenue	102,195	79,140	289,462	276,585
Other U.S. state government agencies
Disaggregation of Revenue [Line Items]
Revenue	329,792	265,608	976,336	692,689
U.S. Federal Government agencies
Disaggregation of Revenue [Line Items]
Revenue	594,771	429,031	1,288,213	1,155,773
International government agencies
Disaggregation of Revenue [Line Items]
Revenue	180,049	107,353	499,091	345,629
Other, including local municipalities and commercial customers
Disaggregation of Revenue [Line Items]
Revenue	36,713	20,205	95,252	67,025
Performance-based
Disaggregation of Revenue [Line Items]
Revenue	389,800	295,650	1,033,509	864,077
Cost-plus
Disaggregation of Revenue [Line Items]
Revenue	282,808	422,641	953,373	1,184,425
Fixed price
Disaggregation of Revenue [Line Items]
Revenue	146,175	132,535	413,296	352,255
Time and materials
Disaggregation of Revenue [Line Items]
Revenue	424,737	50,511	748,176	136,944
U.S. Services
Disaggregation of Revenue [Line Items]
Revenue	436,338	336,950	1,269,487	957,929
U.S. Federal Services
Disaggregation of Revenue [Line Items]
Revenue	617,601	450,143	1,352,982	1,210,105
Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	189,581	114,244	525,885	369,667
Program administration | U.S. Services
Disaggregation of Revenue [Line Items]
Revenue	325,755	251,616	964,981	724,960
Program administration | U.S. Federal Services
Disaggregation of Revenue [Line Items]
Revenue	451,594	362,973	1,005,706	949,071
Program administration | Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	34,296	15,544	80,284	49,583
Technology solutions | U.S. Federal Services
Disaggregation of Revenue [Line Items]
Revenue	89,559	42,101	187,006	130,172
Assessments and appeals | U.S. Services
Disaggregation of Revenue [Line Items]
Revenue	33,529	40,875	101,561	104,621
Assessments and appeals | U.S. Federal Services
Disaggregation of Revenue [Line Items]
Revenue	76,448	45,069	160,270	130,862
Assessments and appeals | Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	58,664	42,468	169,753	167,397
Workforce and children services | U.S. Services
Disaggregation of Revenue [Line Items]
Revenue	64,240	32,531	167,106	90,651
Workforce and children services | Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	94,310	55,046	269,743	146,968
Other | U.S. Services
Disaggregation of Revenue [Line Items]
Revenue	12,814	11,928	35,839	37,697
Other | Outside the U.S.
Disaggregation of Revenue [Line Items]
Revenue	$ 2,311	$ 1,186	$ 6,105	$ 5,719

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Revenue Recognition - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Revenue from Contract with Customer [Abstract]
Deferred revenue, revenue recognized	$ 7.5	$ 9.1	$ 36.7	$ 49.2
Cumulative catch-up adjustment to revenue from change in estimates	$ 1.8	$ (1.4)	$ 17.8	$ (9.1)
Cumulative catch-up adjustment to diluted earnings per share from change in estimates (in dollars per share)	$ 0.03		$ 0.20

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Revenue Recognition - Remaining Performance Obligation (Details) $ in Millions	Jun. 30, 2021 USD ($)
Revenue from Contract with Customer [Abstract]
Revenue, remaining performance obligation, amount	$ 635
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 635
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	42.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period	12 months

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Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020
Earnings Per Share [Abstract]
Basic weighted average shares outstanding	62,064	61,882	62,028	63,463
Dilutive effect of unvested RSUs	389	220	272	203
Denominator for diluted earnings per share	62,453	62,102	62,300	63,666
Antidilutive securities excluded from computation of earnings per share (in shares)	100	300	200	300

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Business combinations - Narrative (Details) $ in Thousands, $ in Millions, ₩ in Billions									1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2021 USD ($)	May 28, 2021 USD ($)	Mar. 31, 2021 USD ($)	Mar. 01, 2021 USD ($)	Aug. 21, 2020 USD ($)	Aug. 21, 2020 KRW (₩)	Feb. 28, 2020 USD ($)	Feb. 28, 2020 AUD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)	Aug. 21, 2020 KRW (₩)	Feb. 28, 2020 AUD ($)
Business Acquisition [Line Items]
Amortization of intangible assets										$ 12,132	$ 8,712	$ 23,718	$ 26,734
Revenue										1,243,520	901,337	3,148,354	2,537,701
Gross profit										291,856	$ 185,603	728,569	$ 514,151
Acquisition-related expenses												8,800
Goodwill	$ 1,757,795								$ 1,757,795	1,757,795		$ 1,757,795		$ 593,129
Weighted Average
Business Acquisition [Line Items]
Estimated Straight-Line Useful Life												11 years 2 months 12 days
Weighted Average | Customer contracts and relationships
Business Acquisition [Line Items]
Estimated Straight-Line Useful Life				11 years 2 months 12 days
Weighted Average | Technology-based intangible assets
Business Acquisition [Line Items]
Estimated Straight-Line Useful Life												13 years 8 months 12 days
Weighted Average | Provider network
Business Acquisition [Line Items]
Estimated Straight-Line Useful Life												11 years 10 months 24 days
VES Group, Inc.
Business Acquisition [Line Items]
Percentage of voting equity interests acquired		100.00%
Estimated cash consideration, net of cash acquired		$ 1,367,725
Liabilities arising from contingencies		12,000
Indemnification assets		6,000
Indemnification assets, range of outcomes, value, low		6,000
Indemnification assets, range of outcomes, value, high		12,000
Liability for uncertainty in income taxes		11,800
Revenue contributed from acquired business									45,800
Gross profit contributed from acquired business									19,500
Amortization of intangible assets									4,600
Acquisition-related expenses												$ 52,200
Goodwill		857,274
Intangible assets		664,000
VES Group, Inc. | Indemnification Asset On Uncertain Tax Positions
Business Acquisition [Line Items]
Indemnification assets		$ 6,700
VES Group, Inc. | Customer contracts and relationships
Business Acquisition [Line Items]
Estimated Straight-Line Useful Life		12 years
VES Group, Inc. | Technology-based intangible assets
Business Acquisition [Line Items]
Estimated Straight-Line Useful Life		14 years
Attain
Business Acquisition [Line Items]
Estimated cash consideration, net of cash acquired	419,097		$ 419,864	$ 419,100
Revenue										56,400		74,800
Gross profit										13,200		17,100
Acquisition-related expenses												300
Goodwill	304,026		303,465						304,026	304,026		304,026
Intangible assets	$ 105,000		$ 105,000						$ 105,000	105,000		$ 105,000
Attain | Customer Relationships
Business Acquisition [Line Items]
Estimated Straight-Line Useful Life				10 years
InjuryNet
Business Acquisition [Line Items]
Percentage of voting equity interests acquired							100.00%									100.00%
Cash payment to acquire business							$ 4,400	$ 6.7
Contingent consideration							2,100									$ 3.1
Goodwill							2,600
Intangible assets							$ 900
Index Root
Business Acquisition [Line Items]
Percentage of voting equity interests acquired					100.00%										100.00%
Cash payment to acquire business					$ 5,400	₩ 6.3
Contingent consideration					900										₩ 1.1
Goodwill					4,600
Intangible assets					$ 1,400
Reversal of acquisition related costs										$ 1,000

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Business combinations - Schedule of Asset Acquired and Liabilities Assumed, VES (Details) - USD ($) $ in Thousands		9 Months Ended
	May 28, 2021	Jun. 30, 2021	Jun. 30, 2020	Sep. 30, 2020
Business Acquisition [Line Items]
Cash consideration paid, net of cash acquired		$ 1,779,473	$ 2,611
Goodwill		$ 1,757,795		$ 593,129
VES Group, Inc.
Business Acquisition [Line Items]
Cash consideration paid, net of cash acquired	$ 1,360,231
Estimated additional cash payments	7,494
Estimated cash consideration, net of cash acquired	1,367,725
Accounts receivable - billed, billable and unbilled	44,078
Prepaid expenses and other current assets	13,911
Property and equipment, net	9,113
Operating lease right-of-use assets	18,898
Intangible assets	664,000
Other assets	12,816
Total identifiable assets acquired	762,816
Accounts payable and other liabilities	42,978
Operating lease liabilities, less current portion	18,898
Income taxes payable	6,196
Deferred income taxes	177,626
Other long-term liabilities	6,667
Net identifiable assets acquired	510,451
Goodwill	857,274
Net assets acquired	$ 1,367,725

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Business combinations - Schedule of the Valuation of the Intangible Assets Acquired (Details) - VES Group, Inc. $ in Thousands	May 28, 2021 USD ($)
Finite-Lived Intangible Assets [Line Items]
Estimated Fair Value	$ 664,000
Customer contracts and relationships
Finite-Lived Intangible Assets [Line Items]
Estimated Straight-Line Useful Life	12 years
Estimated Fair Value	$ 580,000
Provider network
Finite-Lived Intangible Assets [Line Items]
Estimated Straight-Line Useful Life	12 years
Estimated Fair Value	$ 57,000
Technology-based intangible assets
Finite-Lived Intangible Assets [Line Items]
Estimated Straight-Line Useful Life	14 years
Estimated Fair Value	$ 27,000

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Business combinations - Schedule of Asset Acquired and Liabilities Assumed, Attain (Details) - USD ($) $ in Thousands				3 Months Ended
	Jun. 30, 2021	Mar. 31, 2021	Mar. 01, 2021	Jun. 30, 2021	Sep. 30, 2020
Estimated fair value of assets and liabilities at acquisition date
Goodwill	$ 1,757,795			$ 1,757,795	$ 593,129
Attain
Estimated fair value of assets and liabilities at acquisition date
Cash consideration, net of cash acquired	419,097	$ 419,864	$ 419,100
Accounts receivable - billed, billable and unbilled	39,375	39,274		39,375
Prepaid expenses and other current assets	926	1,336		926
Property and equipment, net	0	703		0
Operating lease right-of-use assets	24,960	25,089		24,960
Other assets	74	84		74
Intangible assets	105,000	105,000		105,000
Total identifiable assets acquired	170,335	171,486		170,335
Accounts payable and other liabilities	28,863	28,301		28,863
Operating lease liabilities, less current portion	26,401	26,786		26,401
Net identifiable assets acquired	115,071	116,399		115,071
Goodwill	304,026	303,465		304,026
Net assets acquired	$ 419,097	$ 419,864		419,097
Adjustments
Cash consideration, net of cash acquired				(767)
Accounts receivable - billed, billable and unbilled				101
Prepaid expenses and other current assets				(410)
Property and equipment, net				(703)
Operating lease right-of-use assets				(129)
Other assets				(10)
Intangible assets				0
Total identifiable assets acquired				(1,151)
Accounts payable and other liabilities				562
Operating lease liabilities, less current portion				(385)
Net identifiable assets acquired				(1,328)
Goodwill				561
Net assets acquired				$ (767)

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Business combinations - Pro Forma Results (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021	Jun. 30, 2020	Jun. 30, 2021
Business Combination and Asset Acquisition [Abstract]
Revenue	$ 1,335,780	$ 996,462	$ 3,566,466	$ 2,934,920	$ 4,645,540
Cost of revenue	1,004,523	787,189	2,679,170	2,283,589	3,503,074
Gross profit	331,257	209,273	887,296	651,331	1,142,466
Selling, general, and administrative expenses	151,321	110,754	425,062	360,370	551,143
Amortization of intangible assets	21,301	25,090	63,856	75,868	88,586
Operating income	158,635	73,429	398,378	215,093	502,737
Interest expense	8,701	9,423	26,715	28,528	36,426
Other (expense)/income, net	(7,320)	(2,126)	(10,401)	(11,755)	(11,437)
Income before income taxes	142,614	61,880	361,262	174,810	454,874
Provision for income taxes	37,123	15,549	94,735	38,897	120,248
Net income	$ 105,491	$ 46,331	$ 266,527	$ 135,913	$ 334,626
Basic earnings per share (in dollars per share)	$ 1.70	$ 0.75	$ 4.30	$ 2.14	$ 5.40
Diluted earnings per share (in dollars per share)	1.69	0.75	4.28	2.13	5.37
Dividends paid per share (in dollars per share)	$ 0.28	$ 0.28	$ 0.84	$ 0.84	$ 1.12
Basic (in dollars per share)	62,064	61,882	62,028	63,463	62,001
Diluted (in dollars per share)	62,453	62,102	62,300	63,666	62,285

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Business combinations - Changes in Goodwill (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2021 USD ($)
Goodwill [Roll Forward]
Balance at the beginning of the period	$ 593,129
Estimated effects of acquisitions	1,161,923
Foreign currency translation	2,743
Balance at the end of the period	1,757,795
U.S. Services
Goodwill [Roll Forward]
Balance at the beginning of the period	164,472
Estimated effects of acquisitions	0
Foreign currency translation	0
Balance at the end of the period	164,472
U.S. Federal Services
Goodwill [Roll Forward]
Balance at the beginning of the period	381,719
Estimated effects of acquisitions	1,161,300
Foreign currency translation	0
Balance at the end of the period	1,543,019
Outside the U.S.
Goodwill [Roll Forward]
Balance at the beginning of the period	46,938
Estimated effects of acquisitions	623
Foreign currency translation	2,743
Balance at the end of the period	$ 50,304

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Business combinations - Components of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Sep. 30, 2020
Finite-Lived Intangible Assets [Line Items]
Cost	$ 1,014,939	$ 245,397
Accumulated Amortization	122,452	99,504
Intangible Assets, net	892,487	145,893
Customer contracts and relationships
Finite-Lived Intangible Assets [Line Items]
Cost	921,023	235,287
Accumulated Amortization	112,546	90,302
Intangible Assets, net	808,477	144,985
VES Provider network
Finite-Lived Intangible Assets [Line Items]
Cost	57,000	0
Accumulated Amortization	396	0
Intangible Assets, net	56,604	0
Technology-based intangible assets
Finite-Lived Intangible Assets [Line Items]
Cost	32,400	5,631
Accumulated Amortization	4,994	4,723
Intangible Assets, net	27,406	908
Trademarks and trade names
Finite-Lived Intangible Assets [Line Items]
Cost	4,516	4,479
Accumulated Amortization	4,516	4,479
Intangible Assets, net	$ 0	$ 0

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Business combinations - Estimated Future Amortization Expense For Intangible Assets (Details) $ in Thousands	Jun. 30, 2021 USD ($)
Business Combination and Asset Acquisition [Abstract]
Year ended September 30, 2021, Remainder of year	$ 20,518
2022	82,025
2023	82,009
2024	81,885
2025	81,678
2026	$ 81,551

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Debt - Narrative (Details)		1 Months Ended		9 Months Ended
	May 28, 2021 USD ($)	Jun. 30, 2021 USD ($)	May 31, 2021 USD ($)	Jun. 30, 2021 USD ($)	Jun. 30, 2020 USD ($)	Jun. 28, 2021 USD ($)	Sep. 30, 2020 USD ($)
Debt Instrument [Line Items]
Costs related to debt financing				$ 8,509,000	$ 0
Total debt principal		$ 1,707,754,000		1,707,754,000			$ 28,895,000
Other Current Liabilities
Debt Instrument [Line Items]
Fair value of derivative instrument		(1,400,000)		(1,400,000)
Interest Rate Swap
Debt Instrument [Line Items]
Derivative, notional amount						$ 300,000,000.0
Derivative, fixed interest rate						0.986%
Secured Debt
Debt Instrument [Line Items]
Maximum amount netted against funded debt		$ 75,000,000.0		$ 75,000,000.0
Net total leverage ratio		2.4		2.4
Secured Debt | Five Year Term Loan
Debt Instrument [Line Items]
Debt instrument, term	5 years
Debt instrument, face amount	$ 1,100,000,000
Interest rate during period		1.75%
Total debt principal		$ 1,100,000,000		$ 1,100,000,000			0
Secured Debt | Seven Year Term Loan
Debt Instrument [Line Items]
Debt instrument, term	7 years
Debt instrument, face amount	$ 400,000,000.0
Interest rate during period		2.50%
Base rate	0.50%
Total debt principal		$ 400,000,000		$ 400,000,000			$ 0
Secured Debt | Seven Year Term Loan | LIBOR or Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%
Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Interest rate during period		1.75%
Maximum borrowing capacity	$ 600,000,000.0
Bridge Loan
Debt Instrument [Line Items]
Costs related to debt financing			$ 8,500,000

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Debt - Schedule of Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Sep. 30, 2020
Debt Instrument [Line Items]
Total debt principal	$ 1,707,754	$ 28,895
Less unamortized debt-issuance costs and discounts	(14,033)	0
Total debt	1,693,721	28,895
Less current portion	(60,586)	(10,878)
Long-term debt	1,633,135	18,017
Secured Debt | Five Year Term Loan
Debt Instrument [Line Items]
Total debt principal	1,100,000	0
Secured Debt | Seven Year Term Loan
Debt Instrument [Line Items]
Total debt principal	400,000	0
Line of Credit | Revolving Credit Facility | New Revolving Credit Facility
Debt Instrument [Line Items]
Total debt principal	200,000	0
Line of Credit | Revolving Credit Facility | Old Revolving Credit Facility
Debt Instrument [Line Items]
Total debt principal	0	0
Subsidiary Loans
Debt Instrument [Line Items]
Total debt principal	$ 7,754	$ 28,895

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Debt - Schedule of Repayments (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Sep. 30, 2020
Debt Disclosure [Abstract]
Year ended September 30, 2021, Remainder of year	$ 15,724
2022	62,895
2023	68,761
2024	86,500
2025	91,656
Thereafter	1,382,218
Total debt principal	$ 1,707,754	$ 28,895

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Supplemental Disclosures - Narrative (Details) - USD ($) shares in Thousands	9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020	Mar. 31, 2020
Payments for Repurchase of Equity [Abstract]
Repurchases of common stock	$ 3,363,000	$ 166,959,000
Investments in mutual funds	$ 28,900,000
Restricted Stock Units (RSUs)
Payments for Repurchase of Equity [Abstract]
Granted (in shares)	366
Vesting period	4 years	5 years
Performance-based RSUs
Payments for Repurchase of Equity [Abstract]
Granted (in shares)	85
Vesting period	3 years
Common Stock
Payments for Repurchase of Equity [Abstract]
Common shares repurchased (in shares)	52	2,767
Repurchases of common stock	$ 3,400,000	$ 167,000,000.0
Stock Repurchase Program, March 2020 | Common Stock
Payments for Repurchase of Equity [Abstract]
Stock repurchase programs, authorized amount			$ 200,000,000
Remaining authorized repurchase amount	$ 146,700,000

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Supplemental Disclosures - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Jun. 30, 2021	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents	$ 96,110	$ 71,737	$ 81,548
Restricted cash (recorded within "prepaid expenses and other current assets")	17,126	16,824	14,440
Cash, cash equivalents, and restricted cash	$ 113,236	$ 88,561	$ 95,988	$ 116,492

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Supplemental Disclosures - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2021	Jun. 30, 2020
Text Block [Abstract]
Interest payments	$ 4,751	$ 1,200
Income tax payments	68,031	55,600
Cash payments included in the measurement of lease liabilities	75,172	83,700
Operating lease liabilities arising from new or remeasured right-of-use assets	$ 18,537	$ 39,900

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Litigation (Details) $ in Millions	Jun. 30, 2021 USD ($)
Settled Litigation
Loss Contingencies [Line Items]
Disallowance	$ 7.3
Pending Litigation
Loss Contingencies [Line Items]
Disallowance	$ 19.9

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Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions	Aug. 31, 2021	Jul. 09, 2021
Common Stock | Forecast
Subsequent Event [Line Items]
Payments of Dividends	$ 17.2
Subsequent Event
Subsequent Event [Line Items]
Cash dividend declared (in dollars per share)		$ 0.28