MAXIMUS(US:MMS) Businesswire·2025-11-20 11:30Core Insights - Maximus reported significant achievements in fiscal year 2025, with revenue growth and profitability exceeding initial expectations, highlighting the essential nature of its services [1][2] - The company is focusing on expanding in U.S. Federal markets and leveraging AI-enabled automation for productivity improvements in fiscal year 2026 [1] Financial Performance - Revenue for fiscal year 2025 increased by 2.4% to $5.43 billion, up from $5.31 billion in the previous year, with organic growth of 3.9% driven by clinical program volume growth in the U.S. Federal Services Segment [2][8] - The operating margin for fiscal year 2025 was 9.7%, compared to 9.2% in the prior year, while the adjusted EBITDA margin improved to 12.9% from 11.6% [3][8] - Diluted earnings per share rose to $5.51 from $4.99, and adjusted diluted earnings per share increased to $7.36 from $6.11, primarily due to enhanced operating profitability [4][8] Segment Performance - U.S. Federal Services Segment revenue grew by 12.1% to $3.07 billion, driven by organic growth from clinical programs and increased contributions from natural disaster support activities [5][8] - The operating margin for the U.S. Federal Services Segment improved to 15.3% from 12.2% in the prior year, reflecting better operating leverage and productivity enhancements [6][8] - U.S. Services Segment revenue decreased by 7.7% to $1.76 billion, attributed to excess volumes from Medicaid-related activities in the previous fiscal year [7][8] - Outside the U.S. Segment revenue fell by 8.7% to $599.9 million, impacted by divestitures, although there was positive organic growth of 4.1% [10][11] Cash Flow and Shareholder Returns - Cash flows from operating activities totaled $429 million, with free cash flow of $366 million, compared to $515 million and $401 million in the prior year [15][8] - The company repurchased approximately 5.8 million shares for $457 million during the fiscal year, with an additional $30.7 million spent on share repurchases post-September 30, 2025 [16][8] - A quarterly cash dividend of $0.30 per share was declared, payable on December 1, 2025 [17][8] Fiscal Year 2026 Guidance - Maximus expects fiscal year 2026 revenue to range between $5.225 billion and $5.425 billion, with an adjusted EBITDA margin of approximately 13.7% [18][19] - Adjusted diluted earnings per share are anticipated to be between $7.95 and $8.25 [18][19] - Free cash flow is projected to be between $450 million and $500 million for fiscal year 2026 [19][8] Sales and Pipeline - Year-to-date signed contract awards totaled $4.7 billion, with pending contracts amounting to $331 million, resulting in a book-to-bill ratio of 0.9x [12][8] - The total sales pipeline was valued at $51.3 billion, with U.S. Federal Services Segment opportunities representing approximately 66% of this pipeline [13][8] Balance Sheet - As of September 30, 2025, cash and cash equivalents stood at $222 million, with gross debt of $1.35 billion, resulting in a leverage ratio of 1.5x [14][8] - The company demonstrated strong improvement in collections, with days sales outstanding (DSO) decreasing to 62 days from 96 days [15][8]