Maximus' Q1 Earnings Surpass Estimates, Revenues Fall Short

Maximus MMS reported mixed first-quarter fiscal 2026 results, as earnings beat the Zacks Consensus Estimate while revenues missed the same.

MMS’s earnings per share of $1.85 beat the consensus mark by 0.5% and rose 14.9% year over year. Total revenues of $1.4 billion, however, missed the consensus mark by 4.6% and declined 4.1% from the year-ago quarter.

The company’s shares have gained 12.1% over the past year against the 20% decline of the industry.

Segmental Revenues of Maximus

The U.S. Federal Services segment’s revenues of $786.6 million rose from the year-ago reported number and beat our estimate of $775.2 million. Outside the U.S. segment’s revenues of $143.2 million decreased 15.7% year over year and missed our estimate of $162.1 million. The U.S. Services segment’s revenues of $415.2 million fell 8.2% year over year and lagged our estimate of $470.8 million. The book-to-bill ratio was 0.2 in the quarter.

MMS’ Sales and Pipeline

Year-to-date signed contract awards, as of Dec. 31, 2025, totaled $246 million. Contracts pending (awarded but unsigned) amounted to $699 million due to the direct impact of the U.S. federal government shutdown during the quarter. The sales pipeline was $59.1 billion, including $3.82 billion in pending proposals, $2.36 billion in proposals in preparation and $52.9 billion in opportunities tracking.

MMS’ Operating Performance

Operating income of $146.2 million increased 68.5% year over year and exceeded our estimate of $136.8 million. Operating income margin of 10.9% increased 470 basis points year over year, above our expectation of 9.7%.

Key Balance Sheet and Cash Flow Figures

Maximus ended the quarter with cash and cash equivalents of $137.6 million compared with $222.4 million reported at the end of the prior quarter. Long-term debt was $1.5 billion at the end of the quarter, compared with $1.3 billion at September-end quarter.

The company used $244.4 million of cash in operations. Capital expenditures were $6.2 million during the quarter.

MMS Updates Fiscal 2026 Guidance

For fiscal 2026, MMS expects total revenues to be between $5.20 billion and $5.35 billion. The Zacks Consensus Estimate is pegged at $5.45 billion.

Adjusted earnings are anticipated in the range of $8.05 to $8.35 per share. The midpoint of the updated guided range of $8.20 is higher than the current Zacks Consensus Estimate of $8.19.

The company now expects adjusted EBITDA margin of approximately 14%, up from the previously guided range of 13.6%–13.7%.

Free cash flow is expected to be between $450 million and $500 million. The company forecasts interest expenses of approximately $75 million. The effective income tax rate is anticipated to be between 24.5% and 25.5%.

Currently, Maximus carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Earnings Snapshots

Trane Technologies TT reported impressive fourth-quarter 2025 results.TT’s quarterly earnings of $2.86 per share beat the Zacks Consensus Estimate by 1.4% and increased 9.6% from the year-ago quarter.

TT’s Total revenues of $5.1 billion surpassed the consensus estimate by 1.3% and increased 5.5% from the year-ago quarter.

Booz Allen Hamilton BAH posted mixed results for third-quarter fiscal 2026.

BAH’s earnings per share of $1.77 beat the consensus mark by 40.5% and increased 14.2% from the year-ago quarter.

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This article originally published on Zacks Investment Research (zacks.com).

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