Right now, 42,000 federal workers at the USDA are in limbo, and so are the crucial programs they manage, which feed more than 41 million Americans a month. The government shutdown means half of the agriculture department staff is furled, while future funding is uncertain for critical federal assistance programs like SNAP, food stamps, and wick, which provides food and support to mothers and babies. Joining me now, Ellen May, a furled federal worker and chapter president of the NTEU chapter 255.Ellen, I want ...

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]

Healthcare & Policy Impact - 17 million Americans are projected to lose healthcare coverage due to the new law [3] - Healthcare costs are expected to increase for everyone due to uncompensated care that hospitals will have to write off [3] - 4 million Americans will no longer have ACA tax credits, making healthcare unaffordable on the exchanges [8] - Medicaid changes will lead to people losing coverage, and hospitals potentially closing [5][6] SNAP & Social Safety Net - 3 million people are going to lose access to SNAP (Supplemental Nutrition Assistance Program) [15] - $285 billion of SNAP food assistance is being cut [16] - Every $1 invested in SNAP returns approximately $1.50 into the US economy [17] - Almost 70% of SNAP recipients are seniors, the disabled, and children [17] Political Strategy & Communication - Democrats need to communicate the impact of the bill every single day [2] - The long-term impacts of the bill, such as cuts to Medicaid, don't hit until after the 2026 midterm elections and some parts after the 2028 presidential election [10] - The administration has not been focused on lowering costs for Americans [12][15]

Fiscal Policy & Budget - The bill could increase the deficit by over $3 trillion over the next 10 years [1] - The bill proposes overhauling social programs such as SNAP (food stamps) and Medicaid [1] - The Senate bill would modify how states receive Medicaid funds, reducing the amount received via a special tax and creating a $25 billion fund to support rural hospitals [2] Political Dynamics & Opposition - Senator Tom Tillis initially voted against the bill, facing threats from President Trump [2] - Democrats argue the bill's growth is out of control, with strong criticism of its content [3] Specific Allocations & Provisions - The bill includes earmarks such as $85 million for moving the retired space shuttle Discovery [4] - The bill proposes creating a $1,000 Trump saving account for all newborns and requiring a $100 fee for asylum applications [4]