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Maximus' Q2 Earnings & Revenues Beat Estimates, Increase Y/Y
MMSMAXIMUS(MMS) ZACKS·2025-05-09 16:50

Core Insights - Maximus, Inc. (MMS) reported better-than-expected second-quarter fiscal 2025 results with adjusted earnings of 2.01pershare,exceedingtheZacksConsensusEstimateby46.72.01 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 777.9million,an11777.9 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 141.5million,a12141.5 million, a 12% decrease year over year, but exceeded the anticipated 123.1 million [2] - The U.S. Services segment's revenues were 442.4million,down9442.4 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 2.92billionasofMarch31,2025,withcontractspendingamountingto2.92 billion as of March 31, 2025, with contracts pending amounting to 451 million. The sales pipeline stood at 41.2billion,including41.2 billion, including 1.97 billion in pending proposals, 3billioninproposalsinpreparation,and3 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 153million,reflectinga20153 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 108million,upfrom108 million, up from 73 million in the previous quarter. The company generated 42.7millionincashfromoperations,withcapitalexpendituresof42.7 million in cash from operations, with capital expenditures of 17.2 million, resulting in free cash flow of 25.5million[5]UpdatedFiscal2025Guidance−Maximusraiseditsearningsandrevenueguidanceforfiscalyear2025,nowexpectingtotalrevenuesbetween25.5 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 5.4billion,comparedtothepreviousrangeof5.4 billion, compared to the previous range of 5.2 billion to 5.35billion.Themidpointofthenewrange(5.35 billion. The midpoint of the new range (5.325 billion) is above the Zacks Consensus Estimate of 5.31billion[6]−Adjustedearningsarenowanticipatedintherangeof5.31 billion [6] - Adjusted earnings are now anticipated in the range of 6.30 to 6.60pershare,upfromthepreviousexpectationsof6.60 per share, up from the previous expectations of 5.90 to 6.20pershare,andhigherthanthecurrentZacksConsensusEstimateof6.20 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 355millionand355 million and 385 million, with forecasted interest expenses of approximately 78million,upfromthepriorestimateof78 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]