Maximus reported $1.4 billion in fiscal year 2025 first-quarter revenue, up 5.7 percent from the prior-year period, and organic growth of 6.3 percent due to contributions from the U.S. federal services segment.
In an earnings release published Thursday, the Tysons, Virginia-based government services contractor said its operating margin for the first quarter was 6.2 percent and its Q1 adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, margin was 11.2 percent.
The company recorded $0.69 in diluted earnings per share and adjusted diluted EPS of $1.61 during the quarter.
Contract Awards & Sales Pipeline
Maximus posted $2.08 billion in year-to-date signed contract awards and $410 million in pending contracts.
During the earnings call Thursday, Bruce Caswell, president and CEO of Maximus, mentioned two recent contract wins that provide further evidence of the company’s execution on its three- to five-year strategy: a $76 million contract with the Federal Reserve System to provide contact center services through the company’s Total Experience Management platform and a potential five-year, $123 million contract with the National Energy Technology Laboratory for professional IT services.
As of Dec. 31, 2024, the company’s sales pipeline totaled $41.4 billion, with new work opportunities accounting for 57 percent of the total pipeline.
Federal Services Segment’s Financial Results
The company’s U.S. federal services segment logged $780.7 million in FY 2025 Q1 revenue, up 15.3 percent from the same period the previous year.
The segment’s Q1 operating margin was 12.7 percent, driven by outsized volumes on other clinical programs.
At the call, Caswell, a four-time Wash100 awardee, told analysts about the company’s continued focus on the U.S. federal sector.
“We are continuing to focus on the US Federal sector, where we believe technology modernization and cost effective program administration using private sector partners will remain a priority, while maintaining a balanced mix of federal and state opportunities. This approach aims to ensure a responsibly diversified portfolio and well-managed exposure across the segments,” the chief executive noted.
Advancing AI Capabilities
Caswell announced the establishment of a new artificial intelligence and data accelerator group by Maximus Chief Digital and Information Officer Derrick Pledger to help speed up the development and deployment of AI-driven platforms while adhering to governance principles.
He said Maximus is partnering with a company working on “human-in-the-loop AI capabilities specific to clinical assessment services.”
“Our objective is to support our clinicians in a manner that allows for fully auditable, timely, effective and quality health assessments and evaluations. We’ve structured an investment that is designed to drive increased financial performance on our existing clinical programs, while bringing differentiating technology to our government clients,” the Maximus board member added.
FY 2025 Earnings Guidance
For its FY 2025 guidance, Maximus said it expects to record $5.2 billion to $5.35 billion in revenue and adjusted diluted EPS of between $5.90 and $6.20.
An adjusted EBITDA margin, excluding divestiture-related charges, of about 11.2 percent is anticipated for the full year.
The company expects its FY 2025 free cash flow to range between $355 million and $385 million.
