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 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, although organic growth of 7.3% was noted [34] Market Data and Key Metrics Changes - The total pipeline of sales opportunities at June 30 was $44,700,000,000, up from $41,200,000,000 reported at March 31 [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, particularly the One Big Beautiful Bill Act, to create opportunities in Medicaid and SNAP [7][54] - MAXIMUS aims to assist federal and state clients in implementing new regulations and enhancing operational efficiency through technology [14][19] - The company is expanding its focus on defense contracts, as evidenced by a recent $77,000,000 contract with the U.S. Air Force [17][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate an uncertain environment and capitalize on new legislative opportunities [6][15] - The company anticipates a strong finish to FY 2025 and is raising guidance for revenue and adjusted EPS [41][45] - Future growth is expected to be driven by the implementation of new policies and increased demand for services [46][49] Other Important Information - Cash provided by operating activities was a net outflow of $183,000,000, with free cash flow also showing a net outflow of $198,000,000 for the quarter [35] - The company ended the third quarter with total debt of $1,670,000,000, resulting in a consolidated net total leverage ratio of 2.1 times [39] Q&A Session Summary Question: What are the key drivers behind the One Big Beautiful Bill and how can MAXIMUS benefit? - The company sees significant opportunities in Medicaid and SNAP, with an emphasis on program eligibility and work requirements [53][54] Question: Can you quantify the potential benefits from these opportunities? - The U.S. Services growth rate could increase from mid-single digits to high-single digits, potentially reaching low double digits with SNAP and unemployment insurance opportunities [63][64] Question: How does MAXIMUS maintain its competitive advantage? - The company emphasizes its conflict-free status and established presence in the Medicaid space, which provides a competitive barrier [65][67] Question: Will defense become a more significant focus for MAXIMUS? - Yes, the company plans to increase its focus on defense contracts, leveraging core capabilities and recent wins to drive growth [70][75] Question: Can you provide guidance on revenue splits by segment for Q4? - It is too early to provide specific segment-level guidance due to various risks and opportunities present in both U.S. segments [76][78] Question: Is there potential for EPS growth even with flat revenue in FY 2026? - Yes, anticipated reductions in interest expense could provide a tailwind to EPS, alongside operational efficiencies [80]