MAXIMUS(MMS) - 2024 Q3 - Quarterly Results

Revenue and Growth - Revenue for Q3 FY2024 increased by 10.6% to $1.31 billion, compared to $1.19 billion in the prior year period, with organic growth of 11.2% driven primarily by the U.S. Federal Services Segment[2] - The U.S. Federal Services Segment revenue increased by 17.0% to $683.3 million, with an operating margin of 15.5%, up from 12.7% in the prior year[4] - The U.S. Services Segment revenue increased by 5.2% to $472.3 million, with an operating margin of 13.0%, compared to 10.5% in the prior year[5] - Outside the U.S. Segment revenue increased by 2.3% to $159.3 million, with organic growth of 6.8% driven by operations in the UK[6] - Total revenue for the nine months ended June 30, 2024, was $3,990,327 thousand, compared to $3,644,775 thousand for the same period in 2023, reflecting a growth of 9.5%[21] Earnings and Profitability - Diluted earnings per share were $1.46, and adjusted diluted earnings per share were $1.74, compared to $0.50 and $0.78 in the prior year period[2] - Net income for the three months ended June 30, 2024, was $89,752,000, compared to $30,863,000 for the same period last year, marking a 190.5% increase[19] - Operating income for the three months ended June 30, 2024, was $141,739 thousand, a 10.8% margin, up from $58,388 thousand and a 4.9% margin in the prior year[21] - Gross profit for the three months ended June 30, 2024, was $332,314 thousand, representing a gross margin of 25.3%, compared to 22.2% in the same period last year[21] - The company experienced a gross profit increase for U.S. Federal Services, reaching $186,075 thousand for the three months ended June 30, 2024, with a gross margin of 27.2%[21] Cash Flow and Financial Position - Cash provided by operating activities for Q3 FY2024 totaled $199 million, and free cash flow was $165 million[8] - Operating cash flow improved significantly to $199,328,000 from a negative $5,286,000 year-over-year[19] - Free cash flow for the three months ended June 30, 2024, was $164,638 thousand, compared to a negative cash flow of $(30,398) thousand in the same period last year[24] - Cash and cash equivalents increased to $102,794,000 from $65,405,000, representing a 56.9% increase year-over-year[18] - The net debt to EBITDA ratio improved to 1.5 times as of June 30, 2024, compared to 1.7 times in the prior quarter[2] Shareholder Returns and Equity - A quarterly cash dividend of $0.30 per share is payable on August 31, 2024, to shareholders of record on August 15, 2024[9] - The total shareholders' equity increased to $1,818,715,000 from $1,667,835,000, reflecting a growth of 9.0%[18] - Retained earnings increased to $1,245,362,000 from $1,117,552,000, showing an increase of 11.4%[18] Guidance and Future Outlook - Guidance for FY2024 has been raised, with revenue now expected to range between $5.25 billion and $5.35 billion, an increase of $100 million from previous guidance[10] - Year-to-date signed contract awards totaled $1.25 billion, with contracts pending totaling $398 million, and a sales pipeline of $44.1 billion[7] Cybersecurity Costs - The company reported a significant reduction in cybersecurity incident-related costs, down to $0.3 million for the three months ended June 30, 2024, from $22.1 million in the same period last year[22]