MAXIMUS(US:MMS)2026-02-05 16:04Revenue Performance - Revenue for the three months ended December 31, 2025, was $1,345,046, a decrease of 4.1% compared to $1,402,675 for the same period in 2024[94] - The U.S. Federal Services Segment reported revenue of $786,601, a slight increase of 0.8% from $780,655 in the previous year, with a gross profit margin of 27.3%[103] - The U.S. Services Segment experienced a revenue decline of 8.2% to $415,248, with a gross profit margin of 20.3%[108] - The Outside the U.S. Segment's revenue decreased by 15.7% to $143,197, with a significant drop in gross profit margin to 13.5%[113] - Revenue for the three months ended December 31, 2025, was $143.2 million, a decrease of 15.7% from $169.8 million in the same period of 2024[116] Profitability Metrics - Gross profit increased to $318,670, representing a gross profit margin of 23.7%, up from 21.5% in the prior year[94] - Operating income for the three months ended December 31, 2025, was $146,210, with an operating margin of 10.9%, compared to $86,787 and 6.2% in the same period of 2024[94] - Net income for the three months ended December 31, 2025, was $93,943, significantly higher than $41,196 in the prior year[94] - Gross profit decreased to $19.3 million, representing a gross profit percentage of 13.5%, down from 19.6% in the prior year[116] - Operating loss for the quarter was $1.4 million, compared to an operating income of $8.1 million in the same quarter of the previous year, reflecting a significant decline in operating margin percentage from 4.8% to (1.0)%[116] Cash Flow and Liquidity - Net cash used in operating activities was $244.4 million for the first three months of fiscal year 2026, compared to $80.0 million for the same period in fiscal year 2025[122] - Net cash provided by financing activities was $156.9 million for the first three months of fiscal year 2026, a significant increase from net cash used of $8.3 million in the same period of 2025[126] - The company had $137.6 million in cash and cash equivalents as of December 31, 2025, with access to a $750 million revolving credit facility[117] - Free cash flow for the three months ended December 31, 2025, was $(250.7) million, compared to $(103.0) million for the same period in 2024[137] Earnings Per Share - Diluted earnings per share for Q4 2025 were $1.70, compared to $0.69 in Q4 2024, reflecting a growth of 146.4%[144] - Adjusted diluted earnings per share, excluding amortization of intangible assets and divestiture-related adjustments, was $1.85 for Q4 2025, up from $1.61 in Q4 2024[144] Tax and Expenses - The effective tax rate for the three months ended December 31, 2025, was 25.6%, down from 40.3% in the previous year[101] - SG&A expenses for the three months ended December 31, 2025, included a $9.0 million gain from the divestiture of the child support business[97] Operational Efficiency - Days Sales Outstanding (DSO) increased to 78 days as of December 31, 2025, up from 62 days at September 30, 2025, indicating slower cash collections[123] - Days Sales Outstanding (DSO) is calculated to evaluate the efficiency in converting revenue into cash receipts, with revenue per day determined by dividing total revenue by 91 days[144] Financial Ratios and Leverage - The company reported a Consolidated Net Total Leverage Ratio of 1.79 as of December 31, 2025, which is below the maximum allowable ratio of 4.00:1.00[135] - Consolidated EBITDA for the three months ended December 31, 2025, was $183.8 million, compared to $804.2 million for the trailing twelve months[133] - Adjusted EBITDA for Q4 2025 reached $170,414,000, compared to $156,618,000 in Q4 2024, with an adjusted EBITDA margin of 12.7%, up from 11.2%[144] Financial Risks - The company is exposed to financial risks such as interest rate changes and foreign currency exchange rates, and uses derivative instruments to manage selected interest rate exposures[146] - The reconciliation of cash flows from operations to free cash flow is provided in the "Liquidity and Capital Resources" section of the financial statements[144] - The company regularly refreshes its fixed assets and technology to sustain cash flows from operations[144]