Maximus Stock Rises 5.6% Despite Q4 Earnings Missing Estimates

Core Insights - Maximus, Inc. (MMS) reported disappointing fourth-quarter fiscal 2025 results, with both earnings and revenues falling short of the Zacks Consensus Estimate, yet the stock rose 5.6% post-earnings release on Nov. 20 [1][8] - Adjusted earnings per share were $1.62, missing estimates by 0.6% but showing an 11% year-over-year increase. Revenues reached $1.32 billion, missing the consensus by 1.5% but increasing 0.19% year over year [1][8] Segmental Performance - The U.S. Federal Services segment generated revenues of $747.9 million, up 10.8% year over year, exceeding the estimate of $737.9 million [2] - The Outside the U.S. segment reported revenues of $141.2 million, down 20.3% year over year, but surpassed the anticipated $110.7 million [2] - The U.S. Services segment's revenues were $429.3 million, a decline of 7.4% year over year, falling short of the estimate of $474.2 million [2] Sales and Pipeline - Year-to-date signed contract awards totaled $4.7 billion as of Sept. 30, 2025, with pending contracts amounting to $331 million [3] - The sales pipeline stood at $51.3 billion, including $3.37 billion in pending proposals, $1.37 billion in proposals in preparation, and $46.6 billion in tracking opportunities [3] - The book-to-bill ratio was 0.9 on a trailing 12-month basis [3] Operating Performance - Operating income was $122.86 million, reflecting a 9.9% year-over-year increase, but below the expected adjusted operating income of $148.4 million, which was down 10.1% year over year [4] - The adjusted operating income margin improved to 9.32%, an increase of 82 basis points year over year [4] Financial Position - Maximus ended the quarter with cash and cash equivalents of $222 million, up from $59.8 million in the previous quarter [5] - The company generated $429 million in cash from operations, with free cash flow reported at $366 million [5] Fiscal 2026 Guidance - For fiscal 2026, total revenues are expected to range between $5.225 billion and $5.425 billion, below the Zacks Consensus Estimate of $5.61 billion [6] - Adjusted earnings are anticipated to be between $7.95 and $8.25 per share, exceeding the current consensus estimate of $7.34 [6] - The company projects an adjusted EBITDA margin of approximately 13.6-13.7% [6] - Free cash flow is expected to be between $450 million and $500 million, with interest expenses around $69 million and an effective income tax rate of approximately 25% [7]