Maximus, Inc. MMS reported better-than-expected first-quarter fiscal 2025 results. Earnings and revenues beat the Zacks Consensus Estimate.

Quarterly adjusted earnings of $1.61 per share beat the Zacks Consensus Estimate by 15.8% and increased 20.2% on a year-over-year basis. Revenues of $1.4 billion topped the consensus mark by 7% and rose 5.7% from the year-ago quarter.

Maximus, Inc. Price, Consensus and EPS Surprise

Maximus, Inc. price-consensus-eps-surprise-chart | Maximus, Inc. Quote

Segmental Revenues of Maximus

The U.S. Federal Services segment’s revenues of $780.7 million rose 15.3% from the year-ago reported number and beat our estimate of $687.2 million. The Outside the U.S. segment’s revenues of $169.8 million increased 6% from the first quarter of fiscal 2024 and outpaced our anticipated $123.1 million. The U.S. Services segment’s revenues of $452.3 million decreased 7.7% year over year and missed our estimate of $497.2 million.

MMS’ Sales and Pipeline

Year-to-date signed contract awards, as of Dec. 31, 2024, totaled $2.08 billion. Contracts pending (awarded but unsigned) amounted to $410 million. The sales pipeline, as of Dec. 31, was $41.4 billion. This included $2.47 billion in pending proposals, $1.50 billion in proposals in preparation and $37.5 billion in opportunities tracking.

The book-to-bill ratio, as of Dec.31, 2024, was 0.7 on a trailing 12-month basis. 

MMS’ Operating Performance

Adjusted operating income of $156.62 million increased 11.6% year over year. This compares with our expected adjusted operating income of $138.6 million, down 16.2% year over year. The adjusted operating income margin of 11.2% increased 60 basis points year over year.  

Maximus’ Balance Sheet and Cash Flow

Maximus ended the quarter with a cash and cash equivalent balance of $72.7 million compared with $183.1 million reported at the end of the prior quarter.

The company used $80 million in cash from operations. Capital expenditures were $23 million, and free cash flow was an outflow amounted to $103 million.

MMS Updated Fiscal 2025 Guidance

Maximus has raised earnings but shrunk revenue guidance for fiscal year 2025. Total revenues are now expected between $5.2 billion and $5.35 billion compared with the previous expectation of $5.275 billion to $5.425 billion. The midpoint ($5.28 billion) of the updated guided range is below the Zacks Consensus Estimate of $5.32 billion.

Adjusted earnings are anticipated in the range of $5.90-$6.20 per share compared with the previous expectations of $5.70 and $6.00 per share. The midpoint ($6.05) of the updated guided range is higher than the current Zacks Consensus Estimate of $6.00.

The company expects adjusted EBITDA margin of approximately 11.2% compared with 11% expected earlier.

Free cash flow is expected between $355 million and $385 million compared with the prior expectation of $345 million to $375 million. The company forecasts interest expenses of approximately $75 million compared with the prior anticipation of $65 million. The effective income tax rate is anticipated to be within 28%-29% compared with the prior expectation of 25%. On a full-year basis, the weighted average shares outstanding are forecasted to be approximately 58 million shares compared with the prior anticipation of 561 million shares.

Currently, Maximus carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot

Broadridge Financial Solutions, Inc. BR reported impressive second-quarter fiscal 2025 results, as earnings and revenues surpassed the Zacks Consensus Estimate.

BR’s adjusted earnings of $1.6 per share outpaced the consensus mark by 12.2% and increased 69.6% from the year-ago quarter. Total revenues of $1.6 billion surpassed the consensus mark by 3% and rose 12.8% year over year.

Automatic Data Processing, Inc. ADP reported impressive second-quarter fiscal 2025 results. Both earnings and revenues surpassed the Zacks Consensus Estimate.

ADP’s earnings per share of $2.4 beat the consensus estimate by 3.5% and increased 10.3% from the year-ago quarter. Total revenues of $5 billion surpassed the consensus estimate by 1.6% and grew 8.2% on a year-over-year basis.

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