This article first appeared on GuruFocus.

Revenue: $5.43 billion for fiscal year 2025, representing a 2.4% increase.

Organic Growth: 3.9% for the consolidated business.

US Federal Services Revenue Growth: 12.1% organic growth.

Outside the US Revenue Growth: 4.1% organic growth.

Adjusted EBITA Margin: 12.9% for fiscal year 2025.

Adjusted Earnings Per Share (EPS): $7.36, a 20% increase from the prior year.

Free Cash Flow: $366 million for fiscal year 2025.

Net Leverage: 1.5 times at September 30, 2025.

Share Repurchases: Approximately $457 million worth of shares repurchased in fiscal year 2025.

Fiscal 2026 Revenue Guidance: Projected between $5.225 billion and $5.425 billion.

Fiscal 2026 Adjusted EPS Guidance: Projected between $7.95 and $8.25 per share.

Fiscal 2026 Free Cash Flow Guidance: Projected between $450 million and $500 million.

Book-to-Bill Ratio: 0.9 times for the trailing twelve-month period.

Pipeline: $51.3 billion at September 30, 2025.

Warning! GuruFocus has detected 4 Warning Signs with MMS.

Is MMS fairly valued? Test your thesis with our free DCF calculator.

Release Date: November 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Maximus Inc (NYSE:MMS) reported higher than projected revenue and profitability for fiscal year 2025, with a 3.9% organic growth rate.

The US Federal Services segment delivered a strong 12.1% organic growth, driven by high demand in clinical and natural disaster support domains.

The company's strategic investments in AI capabilities are positioning it for meaningful growth and market expansion opportunities.

Maximus Inc (NYSE:MMS) maintained stable and secure contractual relationships, with cancellations impacting just 0.5% of fiscal year 2025 revenue.

The company achieved a significant improvement in cash flows, delivering $366 million of free cash flow for fiscal year 2025.

Revenue for the US services segment decreased to $1.76 billion from $1.91 billion in the prior year, reflecting the completion of pandemic-related impacts.

The operating income margin for the US services segment dropped to 9.7% from 12.9% in the prior year, partly due to severance charges.

Revenue for the outside the US segment decreased due to divestitures, despite a 4.1% organic growth.

The company's book-to-bill ratio was 0.9 times for the trailing twelve-month period, indicating lower than normal rebit activity.

Maximus Inc (NYSE:MMS) anticipates mild revenue contraction in fiscal year 2026 for both US federal and US services segments due to overperformance in 2025.

Q: Can you provide more color on what's driving the EBITA margin expansion for fiscal 2026, even with flat revenue expectations? A: David Mutryn, CFO, explained that all three segments are expected to have slightly higher margins than fiscal 2025. This is due to continued deployment of technology, automation, and cost management. Additionally, some capitalized software projects are now operational, leading to higher depreciation and amortization but lower CapEx.

Q: Can you add more detail around growth by segment for the revenue guidance? A: David Mutryn noted that both US Federal and US Services segments might see mild contraction, with more erosion expected on the US Federal side due to overperformance in 2025. However, the Federal segment also has the strongest pipeline in the near term.

Q: How are you thinking about the effects of the government shutdown on your results both in Q1 and the full year? A: Bruce Caswell, CEO, stated that they do not anticipate negative impacts on delivery or contract portfolio in Q1 FY26. Most programs were deemed essential services, and only a few employees were affected. However, they are monitoring potential impacts if the CR funding only extends through January 30th.

Q: What are your priorities for capital allocation in the short-term, and could you add some color on M&A targets? A: Bruce Caswell emphasized disciplined capital deployment for high-quality companies that create new growth platforms, particularly in the US federal market with a focus on defense and national security. They are considering access to customer relationships, technical capabilities, and business systems capabilities.

Q: What phase of the opportunity related to the Big Beautiful Bill are you in, and what are you working on with states? A: Bruce Caswell explained that states are in the planning phase for compliance with Medicaid and SNAP requirements. They are engaging with customers to address SNAP payment error rates, which could lead to procurement activities. Maximus is well-positioned due to its historical program knowledge and technology solutions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.