Maximus' Q2 Earnings & Revenues Beat Estimates, Increase Y/Y

Maximus, Inc. MMS reported better-than-expected second-quarter fiscal 2025 results.

Quarterly adjusted earnings of $2.01 per share beat the Zacks Consensus Estimate by 46.7% and increased 28% year over year. Revenues of $1.36 billion topped the consensus mark by 5.8% and rose 1% from the year-ago quarter.

Segmental Revenues of Maximus

The U.S. Federal Services segment’s revenues of $777.9 million rose 11% from the year-ago reported number and beat our estimate of $687.2 million. The Outside the U.S. segment’s revenues of $141.5 million decreased 12% year over year and outpaced our anticipated $123.1 million. The U.S. Services segment’s revenues of $442.4 million decreased 9% year over year and missed our estimate of $497.2 million.

MMS’ Sales and Pipeline

Year-to-date signed contract awards, as of March 31, 2025, totaled $2.92 billion. Contracts pending (awarded but unsigned) amounted to $451 million. The sales pipeline, as of March 31, was $41.2 billion. This included $1.97 billion in pending proposals, $3 billion in proposals in preparation, and $36.3 billion in opportunities tracking. The book-to-bill ratio was 0.8X on a trailing 12-month basis. 

MMS’ Operating Performance

Operating income of $153 million increased 20% year over year. This compares with our expected adjusted operating income of $138.6 million, down 16.2% year over year. The adjusted operating income margin of 11.2% increased 170 basis points year over year.

Maximus’ Balance Sheet and Cash Flow

Maximus ended the quarter with a cash and cash equivalent balance of $108 million compared with $73 million reported at the end of the prior quarter.

The company generated $42.7 million in cash from operations. Capital expenditures were $17.2 million, and free cash flow amounted to $25.5 million.

MMS Updated Fiscal 2025 Guidance

Maximus has raised earnings and revenue guidance for fiscal year 2025. Total revenues are now expected between $5.25 billion and $5.4 billion compared with the previous expectation of $5.2 billion and $5.35 billion. The midpoint ($5.325 billion) of the raised guided range is above the Zacks Consensus Estimate of $5.31 billion.

Adjusted earnings are anticipated in the range of $6.30-$6.60 per share compared with the previous expectations of $5.90-$6.20 per share. The updated guided range is higher than the current Zacks Consensus Estimate of $6.08. The company expects an adjusted EBITDA margin of approximately 11.7% compared with 11.2% expected earlier.

Free cash flow expectation stayed unchanged between $355 million and $385 million. The company forecasts interest expenses of approximately $78 million compared with the prior anticipation of $75 million. The effective income tax rate is anticipated to be within 28-29%. On a full-year basis, the weighted average shares outstanding are forecasted to be approximately 58 million shares.

Currently, Maximus carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot

S&P Global Inc. SPGI reported impressive first-quarter 2025 results. 

SPGI’s adjusted EPS of $4.37 surpassed the Zacks Consensus Estimate by 3.6% and gained 9% year over year. Revenues of $3.8 billion beat the consensus estimate by 2% and grew 8.3% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Verisk VRSK has reported impressive first-quarter fiscal 2025 results. 

VRSK’s adjusted earnings were $1.73 per share, surpassing the Zacks Consensus Estimate by 3.6% and increasing 6.1% from the year-ago quarter. Total revenues of $753 million beat the consensus estimate marginally and increased 7% on a year-over-year basis.

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

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