Financial Data and Key Metrics Changes - For Q3 fiscal year 2025, adjusted diluted earnings per share reached $2.16, a 24% increase year over year [5] - Adjusted EBITDA grew by 15%, with Q3 revenue of $1,350,000,000 reflecting a 4.3% organic growth year over year [5][29] - The adjusted EBITDA margin was 14.7%, compared to 13.1% in the prior year period [30] Business Line Data and Key Metrics Changes - U.S. Federal Services segment revenue increased by 11.4% to $761,000,000, driven by organic growth [31] - U.S. Services segment revenue decreased slightly to $440,000,000, impacted by the completion of the Medicaid unwinding exercise [33] - Outside the U.S. segment revenue decreased to $147,000,000, although organic growth of 7.3% was noted [34] Market Data and Key Metrics Changes - The total pipeline of sales opportunities at June 30 was $44,700,000,000, up from $41,200,000,000 reported at March 31 [24] - Approximately 63% of the current pipeline represents new work, with 67% attributable to the U.S. Federal Services segment [24] Company Strategy and Development Direction - The company is focused on leveraging recent legislation, particularly the One Big Beautiful Bill Act, to create opportunities in Medicaid and SNAP [7][54] - MAXIMUS aims to assist federal and state clients in implementing new regulations and enhancing operational efficiency through technology [14][19] - The company is expanding its focus on defense contracts, as evidenced by a recent $77,000,000 contract with the U.S. Air Force [17][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate an uncertain environment and capitalize on new legislative opportunities [6][15] - The company anticipates a strong finish to FY 2025 and is raising guidance for revenue and adjusted EPS [41][45] - Future growth is expected to be driven by the implementation of new policies and increased demand for services [46][49] Other Important Information - Cash provided by operating activities was a net outflow of $183,000,000, with free cash flow also showing a net outflow of $198,000,000 for the quarter [35] - The company ended the third quarter with total debt of $1,670,000,000, resulting in a consolidated net total leverage ratio of 2.1 times [39] Q&A Session Summary Question: What are the key drivers behind the One Big Beautiful Bill and how can MAXIMUS benefit? - The company sees significant opportunities in Medicaid and SNAP, with an emphasis on program eligibility and work requirements [53][54] Question: Can you quantify the potential benefits from these opportunities? - The U.S. Services growth rate could increase from mid-single digits to high-single digits, potentially reaching low double digits with SNAP and unemployment insurance opportunities [63][64] Question: How does MAXIMUS maintain its competitive advantage? - The company emphasizes its conflict-free status and established presence in the Medicaid space, which provides a competitive barrier [65][67] Question: Will defense become a more significant focus for MAXIMUS? - Yes, the company plans to increase its focus on defense contracts, leveraging core capabilities and recent wins to drive growth [70][75] Question: Can you provide guidance on revenue splits by segment for Q4? - It is too early to provide specific segment-level guidance due to various risks and opportunities present in both U.S. segments [76][78] Question: Is there potential for EPS growth even with flat revenue in FY 2026? - Yes, anticipated reductions in interest expense could provide a tailwind to EPS, alongside operational efficiencies [80]

Financial Performance - Q3 FY25 - Revenue reached $1.35 billion, reflecting a 4.3% year-over-year organic growth[11] - Adjusted EBITDA increased by 15% year-over-year[11] - Adjusted diluted EPS hit a record of $2.16, a 24% increase year-over-year[11] - Adjusted EBITDA margin was 14.7%, exceeding the target range of 10% to 13%[20] Segment Performance - Q3 FY25 - U.S Federal Services revenue increased by 11.4% to $761.2 million, with operating income up by 29.9% to $137.9 million[18, 22] - U.S Services revenue decreased by 6.9% to $439.8 million, with operating income down by 26.9% to $45.0 million[18, 24] - Outside the U.S revenue decreased by 7.5% to $147.4 million, but organic revenue growth was positive at 7.3%[18, 25, 27] Fiscal Year 2025 Guidance - Revenue guidance is updated to $5.375 billion - $5.475 billion, implying ~4% organic revenue growth vs FY24[32, 33] - Adjusted EBITDA margin guidance improves to approximately 13%[32] - Adjusted diluted EPS guidance increases to $7.35 - $7.55[32] - Free cash flow is projected to be $370 million - $390 million[28, 32]

Core Viewpoint - Maximus reported strong quarterly earnings, significantly exceeding expectations, indicating robust performance in the government health services sector [1][2]. Financial Performance - The company achieved earnings of $2.16 per share, surpassing the Zacks Consensus Estimate of $1.39 per share, and up from $1.74 per share a year ago, representing an earnings surprise of +55.40% [1]. - Maximus posted revenues of $1.35 billion for the quarter, exceeding the Zacks Consensus Estimate by 4.48%, and up from $1.31 billion year-over-year [2]. Market Position and Outlook - Despite the strong earnings report, Maximus shares have underperformed the market, gaining only about 0.3% since the beginning of the year compared to the S&P 500's gain of 7.9% [3]. - The company's earnings outlook is crucial for future stock performance, with current consensus EPS estimates at $1.48 for the next quarter and $6.61 for the current fiscal year [7]. Industry Context - The Government Services industry, to which Maximus belongs, is currently ranked in the top 16% of over 250 Zacks industries, suggesting a favorable environment for the company's performance [8].

FOR IMMEDIATE RELEASE CONTACT: James Francis, VP - IR Jessica Batt, VP - IR Date: August 7, 2025 IR@maximus.com Maximus Reports Fiscal Year 2025 Third Quarter Results Third Consecutive Raise to FY25 Guidance Caswell added, "Over the 50 years that Maximus has served as a trusted and impartial delivery partner for government, we've consistently demonstrated adaptability as legislation and regulatory changes lead to new program imperatives and advanced technologies like AI reshape citizen services." Third Quar ...

While investors typically use consensus earnings and revenue estimates as a yardstick to evaluate the company's quarterly performance, scrutinizing analysts' projections for some of the company's key metrics can offer a more comprehensive perspective. Bearing this in mind, let's now explore the average estimates of specific Maximus metrics that are commonly monitored and projected by Wall Street analysts. Analysts on Wall Street project that Maximus (MMS) will announce quarterly earnings of $1.39 per share ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Maximus (MMS) as a strong value stock based on various financial metrics [1][7]. Valuation Metrics - Maximus (MMS) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating it is a high-quality value stock [3]. - The stock's P/E ratio is 11.25, which is lower than the industry average of 12.87, suggesting it may be undervalued [3]. - MMS's P/B ratio is 2.4, compared to the industry's average P/B of 3.22, indicating an attractive valuation [4]. - The P/S ratio for MMS is 0.75, slightly below the industry's average of 0.77, reinforcing its value proposition [5]. - MMS has a P/CF ratio of 9.39, significantly lower than the industry's average P/CF of 18.99, further suggesting it is undervalued [6]. Investment Outlook - The combination of these metrics indicates that Maximus is likely undervalued, and its strong earnings outlook makes it an appealing investment opportunity [7].

Core Viewpoint - Maximus (MMS) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, driven by institutional investors adjusting their valuations based on these estimates [4][6]. - Rising earnings estimates for Maximus suggest an improvement in the company's underlying business, which could lead to higher stock prices as investors respond positively [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions, positioning Maximus favorably for potential market-beating returns [9][10]. Recent Earnings Estimate Revisions - For the fiscal year ending September 2025, Maximus is expected to earn $6.49 per share, with a 6.7% increase in the Zacks Consensus Estimate over the past three months [8].

Group 1: Labor Market Overview - The U.S. job market exceeded expectations for the 11th consecutive month, with 147,000 jobs added in June compared to the forecast of 110,000 [1] - The unemployment rate decreased from 4.2% to 4.1%, better than the expected 4.3% [1] - Average hourly earnings increased by 0.2% month-over-month and 3.7% year-over-year [1] Group 2: Payroll Stocks Performance - Paylocity Holding Corporation (PCTY) and Dayforce (DAY) saw stock increases of over +2% and +1% respectively, both classified as Zacks Rank 3 (Hold) [2] - Paychex (PAYX) is noted for its integrated Human Capital Management (HCM) solutions and has a Zacks Rank 2 (Buy), with expectations for steady growth in top and bottom lines [3] - Maximus (MMS) is identified as a strong buy with a Zacks Rank 1 (Strong Buy), despite a 21% decline from its 52-week high, attributed to a spike in FY25 EPS estimates by 7% [5] Group 3: Market Reactions and Economic Implications - The dip in Maximus stock followed the announcement of 7,000 federal government job cuts, but this may be an overreaction given the addition of 47,000 state government jobs and 19,000 social assistance jobs [6] - The resilient labor market and better-than-expected jobs report contribute positively to the stock market's recovery, making payroll stocks particularly attractive [8]

Core Viewpoint - Maximus (MMS) is experiencing significant selling pressure, with a 6.1% decline over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory, supported by analyst expectations of better-than-previously predicted earnings [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold conditions, with a reading below 30 typically indicating that a stock is oversold [2] - MMS has an RSI reading of 29.15, suggesting that the heavy selling may be exhausting itself, indicating a potential bounce back towards equilibrium in supply and demand [5] Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts that earnings estimates for MMS will improve, with a 0.5% increase in the consensus EPS estimate over the last 30 days, which often correlates with near-term price appreciation [7] - MMS holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further indicating a potential turnaround [8]

Core Insights - Maximus, Inc. (MMS) reported better-than-expected second-quarter fiscal 2025 results with adjusted earnings of $2.01 per share, exceeding the Zacks Consensus Estimate by 46.7% and increasing 28% year over year. Revenues reached $1.36 billion, surpassing the consensus mark by 5.8% and rising 1% from the previous year [1] Segmental Revenues - The U.S. Federal Services segment generated revenues of $777.9 million, an 11% increase from the prior year, beating the estimate of $687.2 million [2] - The Outside the U.S. segment reported revenues of $141.5 million, a 12% decrease year over year, but exceeded the anticipated $123.1 million [2] - The U.S. Services segment's revenues were $442.4 million, down 9% year over year, falling short of the estimate of $497.2 million [2] Sales and Pipeline - Year-to-date signed contract awards totaled $2.92 billion as of March 31, 2025, with contracts pending amounting to $451 million. The sales pipeline stood at $41.2 billion, including $1.97 billion in pending proposals, $3 billion in proposals in preparation, and $36.3 billion in tracking opportunities. The book-to-bill ratio was 0.8X on a trailing 12-month basis [3] Operating Performance - Operating income was $153 million, reflecting a 20% year-over-year increase, compared to the expected adjusted operating income of $138.6 million, which was down 16.2% year over year. The adjusted operating income margin improved to 11.2%, up 170 basis points year over year [4] Balance Sheet and Cash Flow - Maximus ended the quarter with cash and cash equivalents of $108 million, up from $73 million in the previous quarter. The company generated $42.7 million in cash from operations, with capital expenditures of $17.2 million, resulting in free cash flow of $25.5 million [5] Updated Fiscal 2025 Guidance - Maximus raised its earnings and revenue guidance for fiscal year 2025, now expecting total revenues between $5.25 billion and $5.4 billion, compared to the previous range of $5.2 billion to $5.35 billion. The midpoint of the new range ($5.325 billion) is above the Zacks Consensus Estimate of $5.31 billion [6] - Adjusted earnings are now anticipated in the range of $6.30 to $6.60 per share, up from the previous expectations of $5.90 to $6.20 per share, and higher than the current Zacks Consensus Estimate of $6.08. The adjusted EBITDA margin is expected to be approximately 11.7%, compared to the earlier expectation of 11.2% [7] - Free cash flow expectations remain unchanged between $355 million and $385 million, with forecasted interest expenses of approximately $78 million, up from the prior estimate of $75 million. The effective income tax rate is anticipated to be within 28-29%, with approximately 58 million shares expected to be outstanding on a full-year basis [8]