Maximus' Q1 Earnings & Revenues Beat Estimates, Increase Y/Y

Core Insights - Maximus, Inc. (MMS) reported better-than-expected first-quarter fiscal 2025 results, with earnings and revenues surpassing the Zacks Consensus Estimate [1] Financial Performance - Quarterly adjusted earnings were $1.61 per share, exceeding the Zacks Consensus Estimate by 15.8% and increasing 20.2% year-over-year [1] - Revenues reached $1.4 billion, topping the consensus mark by 7% and rising 5.7% from the previous year [1] Segmental Revenues - U.S. Federal Services segment revenues were $780.7 million, up 15.3% year-over-year, beating the estimate of $687.2 million [2] - Outside the U.S. segment revenues increased to $169.8 million, a 6% rise from the first quarter of fiscal 2024, surpassing the anticipated $123.1 million [2] - U.S. Services segment revenues decreased to $452.3 million, down 7.7% year-over-year, missing the estimate of $497.2 million [2] Sales and Pipeline - Year-to-date signed contract awards totaled $2.08 billion as of December 31, 2024, with pending contracts amounting to $410 million [3] - The sales pipeline was valued at $41.4 billion, including $2.47 billion in pending proposals and $1.50 billion in proposals in preparation [3] - The book-to-bill ratio was 0.7 on a trailing 12-month basis as of December 31, 2024 [3] Operating Performance - Adjusted operating income was $156.62 million, an 11.6% increase year-over-year, compared to the expected adjusted operating income of $138.6 million [4] - The adjusted operating income margin improved to 11.2%, up 60 basis points year-over-year [4] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of the quarter were $72.7 million, down from $183.1 million in the prior quarter [5] - The company used $80 million in cash from operations, with capital expenditures of $23 million and a free cash flow outflow of $103 million [5] Updated Fiscal 2025 Guidance - Maximus raised its earnings guidance but reduced revenue expectations for fiscal year 2025, now forecasting total revenues between $5.2 billion and $5.35 billion [6] - Adjusted earnings are anticipated in the range of $5.90-$6.20 per share, higher than previous expectations [7] - Free cash flow is expected to be between $355 million and $385 million, with interest expenses anticipated at approximately $75 million [8]