MAXIMUS, INC. has recently released its latest 10-Q report. Maximus operates as a government services provider with three reporting segments: U.S. Federal Services, U.S. Services, and Outside the U.S. The company, founded in 1975 and based in McLean, Virginia, provides business process services, eligibility and enrollment support, clinical services, and technology solutions for government programs in the U.S. and abroad.
In Item 2, management said revenue for the quarter ended June 30, 2026 was $1.279 billion, down from $1.348 billion a year earlier, while nine-month revenue fell to $3.930 billion from $4.113 billion. Gross profit for the quarter was $348.8 million, compared with $359.5 million last year, and nine-month gross profit rose to $1.010 billion from $999.9 million, lifting gross margin to 25.7% from 24.3%.
Operating income in the quarter was $161.4 million, versus $165.7 million a year earlier, while nine-month operating income increased to $456.1 million from $405.4 million. Net income for the quarter was $103.6 million, compared with $106.0 million, and diluted earnings per share were $1.95 versus $1.86. For the nine months, net income rose to $295.6 million from $243.7 million, and diluted EPS increased to $5.45 from $4.20.
Revenue declined 5.1% in the quarter, with management attributing the drop to a $63.0 million organic decline and a $7.0 million reduction from business disposals, partly offset by a $0.6 million currency benefit. For the nine months, revenue fell 4.4%, including a $160.8 million organic decline and a $34.6 million impact from disposals, offset by $12.6 million of currency benefit.
Selling, general and administrative expenses were $167.2 million in the quarter, down from $170.8 million, and $492.8 million for nine months, down from $525.4 million. The company said nine-month SG&A included a $10.1 million divestiture-related gain from the sale of its U.S. child support business in December 2025, while the prior-year period included $39.3 million of divestiture-related charges tied to businesses sold in the Outside the U.S. segment.
Interest expense increased to $23.9 million in the quarter from $22.7 million, and to $66.8 million for nine months from $61.6 million, reflecting expansions of the Term Loan B and Term Loan A credit facilities. The effective tax rate was 25.0% for the quarter and 24.4% for the nine months, compared with 25.9% and 29.2% a year earlier.
U.S. Federal Services generated $721.0 million of revenue in the quarter, down 5.3% from $761.2 million, and $2.261 billion for nine months, down 2.5% from $2.320 billion. Segment operating income was $134.0 million in the quarter, versus $137.9 million, and $396.5 million for nine months, up from $355.9 million. Management said the decline was driven largely by lower volumes on large transaction-based contracts and less short-term disaster recovery work than in fiscal 2025. It also said a temporary contractual modification effective July 1, 2026 through December 31, 2026 is expected to reduce diluted EPS by about $0.35 per quarter through the rest of fiscal 2026 and the first quarter of fiscal 2027.
U.S. Services posted quarterly revenue of $418.2 million, down 4.9% from $439.8 million, and nine-month revenue of $1.249 billion, down 6.4% from $1.334 billion. Operating income was $45.2 million in the quarter, roughly flat with $45.0 million a year earlier, but nine-month operating income fell to $113.1 million from $139.6 million. The company said the segment continued to experience lower volumes and demand across a broad range of contracts, and it recorded a $6.9 million impairment charge in the second quarter tied to a capitalized software asset.
Outside the U.S. revenue was $139.8 million in the quarter, down 5.2% from $147.4 million, and $420.0 million for nine months, down from $458.7 million. Segment operating income fell to $1.2 million in the quarter from $5.9 million, and the segment posted an operating loss of $3.3 million for nine months versus income of $18.9 million a year earlier. Gross profit in the segment dropped to $19.8 million in the quarter from $27.4 million, with management citing lower organic revenue and weaker gross profit performance. Following these announcements, the company's shares moved -8.72%, and are now trading at a price of $57.64. If you want to know more, read the company's complete 10-Q report here.
