Maximus (NYSE: MMS) has reported its financial results for the third quarter of fiscal year 2025, ending June 30, 2025, with several noteworthy highlights.
Revenue for the third quarter increased by 2.5% to $1.35 billion compared to $1.31 billion for the same period in the previous year, driven primarily by organic growth of 4.3% in the U.S. federal services segment.
Diluted earnings per share were $1.86 and adjusted diluted earnings per share were $2.16, compared to $1.46 and $1.74, respectively, for the prior year period.
The company has raised its revenue and earnings guidance for fiscal year 2025. Full-year revenue is now expected to range between $5.375 billion and $5.475 billion, with adjusted EBITDA margin expected to be approximately 13%, and adjusted diluted earnings per share expected to range between $7.35 and $7.55 per share.
Maximus also declared a quarterly cash dividend of $0.30 per share, payable on August 31, 2025, to shareholders of record on August 15, 2025.
The U.S. federal services segment saw a significant 11.4% increase in revenue for the third quarter, reaching $761.2 million, with an operating margin of 18.1%, compared to 15.5% for the prior year period. The segment's full-year fiscal 2025 operating margin is now expected to be approximately 15%.
In contrast, the U.S. services segment experienced a 6.9% decrease in revenue to $439.8 million, with an operating margin of 10.2% for the third quarter, compared to 13.0% for the prior year period. The full-year fiscal 2025 operating margin for this segment is now expected to be approximately 10.5%.
Outside the U.S. segment revenue decreased to $147.4 million, compared to $159.3 million in the prior year period, but showed positive organic growth of 7.3%. The segment's operating margin for the third quarter of fiscal year 2025 was 4.0%, compared to an operating loss of 0.9% in the prior year period.
Maximus also provided insight into its sales and pipeline, reporting year-to-date signed contract awards totaling $3.37 billion and a sales pipeline totaling $44.7 billion.
The company's balance sheet and cash flows revealed that unrestricted cash and cash equivalents totaled $59.8 million, and gross debt was $1.67 billion. For the third quarter of fiscal year 2025, cash used in operating activities totaled $182.7 million, with free cash flow being an outflow of $198.2 million.
Maximus has also raised its fiscal year 2025 guidance for revenue, earnings, and free cash flow. Revenue guidance has increased by $100 million at the midpoint and is now expected to range between $5.375 billion and $5.475 billion. Adjusted EBITDA margin guidance has improved by 130 basis points to approximately 13%, and guidance for adjusted diluted earnings per share has increased by $1.00 at the midpoint.
These results demonstrate Maximus' continued growth and resilience in delivering essential government services efficiently and accountably. As a result of these announcements, the company's shares have moved -1.56% on the market, and are now trading at a price of $74.87. For the full picture, make sure to review MAXIMUS, INC.'s 8-K report.
