Maximus Stock Earnings Reports

Maximus reported solid fiscal 2026 first quarter results, with no material income statement impact from last fall's government shutdown. Management raised full-year earnings guidance, narrowed revenue guidance (now $5.20B to $5.35B) and left free cash flow guidance unchanged ($450M–$500M). Revenue was $1.35B (-4.1% YoY) driven by organic performance: US Federal Services grew slightly and delivered margin expansion (operating margin ~16.5%), while US Services and Outside the US contracted due to lower volumes and prior divestitures. Adjusted EBITDA margin improved to 12.7% and adjusted EPS was $1.85 for the quarter. The company completed a small divestiture (child support business) and recognized a ~$9M gain; earlier larger divestitures reshaped the outside-US footprint. Q1 cash flow showed seasonally expected outflows (operating cash use $244M; free cash flow outflow $251M) and DSO rose to 78 days, but management expects normalization later in the year. Pipeline increased to $59.1B (including $6.2B proposals pending or in preparation) and management is positioning for sizable state opportunities from new Medicaid redetermination cadence, Medicaid community engagement (work requirements) and SNAP funding/accuracy changes (including an AI-powered "Accuracy Assistant" product). The company is accelerating automation and AI adoption (internal and partner-enabled) and highlighted a recent GSA BPA award (GXCC) as a platform opportunity. Management expects much of the near-term new work to ramp in FY2027–FY2028 and reiterated capital allocation priorities: organic investment first, disciplined M&A focused on federal market acceleration, and target leverage of ~1.0x by year-end absent M&A/repurchases.