MAXIMUS(MMS) - 2025 Q1 - Quarterly Report

Revenue and Profitability - Revenue for the three months ended December 31, 2024, was $1,402,675, a 5.7$1,327,041 in the same period of 2023[101] - Gross profit for the same period was $301,557, reflecting a 0.5$300,054 year-over-year, with a gross profit percentage of 21.5% compared to 22.6%[101] - Operating income decreased to $86,787, resulting in an operating margin of 6.2$780,655, with an operating margin of 12.7%[111] - U.S. Services Segment revenue decreased by 7.7% to $452,250, with an operating margin of 9.0$169.77 million, representing a 6.0% increase from $160.12 million in the same period of 2023[120] - Gross profit increased to$33.24 million, a 32.8% increase from $25.03 million year-over-year, with a gross profit percentage of 19.6$8.12 million from a loss of $0.11 million in the prior year, resulting in an operating margin of 4.8$156,618,000, representing an increase from $140,288,000 year-over-year, with an adjusted EBITDA margin of 11.2$41,196,000, down from $64,148,000 in 2023[148] - Diluted earnings per share decreased to$0.69 from $1.04 year-over-year, while adjusted diluted earnings per share rose to$1.61 from $1.34[148] Tax and Expenses - The effective tax rate increased to 40.3$38.3 million in divestiture-related charges from the sale of businesses in the Outside the U.S. Segment[105] Cash Flow and Debt - As of December 31, 2024, the company had $72.7 million in cash and cash equivalents, with a total debt of$1.40 billion[124][133] - The effective cash interest rate was reported at 5.5%, with various term loans having interest rates ranging from 3.81% to 6.36%[126][127] - The company reported a net cash outflow from operating activities of $79.99 million for the three months ended December 31, 2024, compared to a cash inflow of$21.61 million in the same period of 2023[128][129] - Free cash flow for the three months ended December 31, 2024, was $(102.99) million, a significant decrease from$(0.64) million in the prior year[141] Segment Performance and Divestitures - The Outside the U.S. Segment has divested businesses in Australia and Korea, impacting overall segment performance[119] - The organic growth effect contributed $17.11 million (10.7$10.90 million (6.8% decrease)[121] - The anticipated full-year operating margin for the segment is expected to range between 3% and 5% for fiscal year 2025[123] Shareholder Actions - The company has acquired 3.1 million common shares at a cost of $236.7 million during the first quarter of fiscal year 2025, with an additional 0.7 million shares acquired at a cost of$52.9 million[132] Financial Management and Risk - The company incurred losses on sales of businesses for the three months ended December 31, 2024, and 2023, impacting financial performance[146] - The company regularly refreshes fixed assets and technology to sustain cash flows from operations, with free cash flow provided to complement the statement of cash flows[148] - The company uses derivative instruments to manage selected interest rate exposures, indicating exposure to financial risks such as interest rate changes and foreign currency exchange rates[149] - The adjusted net income excluding amortization of intangible assets and divestiture-related charges was $96,514,000 for the three months ended December 31, 2024[148] - The company calculates Days Sales Outstanding (DSO) to evaluate efficiency in converting revenue into cash receipts[148] New Initiatives - The company launched Maximus Total Experience Management (TXM), an integrated solution aimed at enhancing government service delivery[98]