Financial Data and Key Metrics Changes - For Q3 fiscal year 2025, adjusted diluted earnings per share reached $2.16, a 24% increase year over year [5] - Adjusted EBITDA grew by 15%, with Q3 revenue of $1,350,000,000 reflecting a 4.3% organic growth year over year [5][29] - The adjusted EBITDA margin was 14.7%, compared to 13.1% in the prior year period [30] Business Line Data and Key Metrics Changes - U.S. Federal Services segment revenue increased by 11.4% to $761,000,000, driven entirely by organic growth [31] - U.S. Services segment revenue decreased slightly to $440,000,000, impacted by the completion of the Medicaid unwinding exercise [33] - Outside the U.S. segment revenue decreased to $147,000,000, partially offset by organic growth of 7.3% [34] Market Data and Key Metrics Changes - The total pipeline of sales opportunities increased to $44,700,000,000 from $41,200,000,000 reported previously [24] - Approximately 63% of the current pipeline represents new work, with 67% attributable to the U.S. Federal Services segment [24] Company Strategy and Development Direction - The company is focused on leveraging recent legislation and regulatory changes to assist federal and state clients, particularly in Medicaid and SNAP [6][14] - MAXIMUS aims to expand its role in the defense sector, as evidenced by a recent $77,000,000 contract with the U.S. Air Force [18][70] - The company is investing in technology and process efficiencies to enhance service delivery and operational readiness [19][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of the U.S. Services segment over the next 18 to 24 months due to new regulatory requirements [14] - The company anticipates a strong fourth quarter of free cash flow, supported by recent improvements in accounts receivable collections [40] - Management highlighted potential headwinds from budget constraints but remains optimistic about long-term growth opportunities [46][48] Other Important Information - The company raised its guidance for fiscal year 2025, with revenue expected to range between $5,375,000,000 and $5,475,000,000 [41] - Adjusted EPS guidance increased to a range between $7.35 and $7.55 per share, reflecting year-over-year earnings growth of 22% [42] - The company achieved Cybersecurity Maturity Model Certification Level 2, enhancing its competitive position in federal contracting [20] Q&A Session Summary Question: What are the key drivers behind the opportunities from the One Big Beautiful Bill? - Management indicated that the opportunities in Medicaid and SNAP are substantial, with a focus on program eligibility and work requirements expected to positively impact growth [53][54] Question: Can you quantify the potential benefits from these opportunities? - Management suggested that the U.S. Services segment growth rate could increase from mid-single digits to high-single digits, with potential for low double-digit growth depending on the timing and size of opportunities [64][65] Question: How does MAXIMUS maintain its competitive advantage? - The company emphasized its conflict-free status and established presence in the Medicaid space, which provides a competitive barrier [66][68] Question: Will defense become a more significant focus for MAXIMUS? - Management confirmed that defense is an increasing focus, with plans to leverage core capabilities in the defense community [69][70] Question: Can you provide guidance on revenue splits by segment for Q4? - Management indicated it was too early to provide specific segment-level guidance due to various risks and opportunities present [76][78] Question: Is there potential for EPS growth even with flat revenue next year? - Management noted that reduced interest expenses could provide a tailwind to EPS, potentially improving it by $0.30 year over year [81]