MAXIMUS, Inc. (MMS Quick QuoteMMS - Free Report) reported impressive first-quarter fiscal 2023 results with both earnings and revenues beating the Zacks consensus estimate.

The stock gained 11.4% since the earnings release on Feb 8 in response to the better-than-expected results and the raised fiscal 2023 guidance.

MAXIMUS raised its 2023 adjusted EPS guidance to $4-$4.3 from the previous view of $3.7-$4. The midpoint ($4.15) of the updated guidance range is above the current Zacks Consensus Estimate of $4.05. The company raised its 2023 revenue guidance to $4.85-$5 billion from the previous view of $4.75-$4.9. The midpoint ($4.93 billion) of the updated guidance range is above the current Zacks Consensus Estimate of $4.89.

Quarterly adjusted earnings of 94 cents per share beat the Zacks Consensus Estimate by 19% but declined 16.1% year over year. Revenues of $1.25 billion beat the consensus mark by 8.4% and increased 8.6% year over year.

Segmental Revenues

The U.S. Services segment’s revenues of $439.5 million rose 13.7% year over year. The U.S. Federal Services segment’s revenues of $618.2 million increased 6.2% from the year-ago quarter. Outside the U.S. segment’s revenues of $191.6 million increased 4.9% year over year.

Sales and Pipeline

Signed contract awards on Dec 31 totaled $481 million, and contracts pending (awarded but unsigned) amounted to $661 million. The sales pipeline on Dec 31 was $30.5 billion. This included $6 billion in pending proposals, $1.71 billion in proposals in preparation and $22.8 billion in opportunities tracking.

Operating Performance

Adjusted operating income of $98.3 million decreased 5.4% year over year. The operating income margin of 7.9% declined 110 basis points year over year.

Balance Sheet and Cash Flow

MAXIMUS ended the quarter with cash and cash equivalents of $63.1 million compared with $40.7 million in the prior quarter.

The company used $134.7 million in cash from operations. Capital expenditures were $15.7 million. Free cash flow amounted to $150.4 million.

2023 Outlook

Adjusted operating income is expected between $415 million and $440 million compared with the previous guidance of $390-$415 million. Free cash flow is still anticipated in the range of $225-$275 million. The effective tax rate is anticipated in the range of 24.5-25.5%. Weighted average shares outstanding are projected in the range of 61.2-61.3 million.

MAXIMUS currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Some Other Business Services Companies

Robert Half International Inc. (RHI Quick QuoteRHI - Free Report) reported mixed fourth-quarter 2022 results, wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.

RHI’s quarterly earnings of $1.37 per share beat the Zacks Consensus Estimate by 1.5% but declined 9.3% year over year. Revenues of $1.73 billion missed the Zacks Consensus Estimate by 0.6% and decreased 2.4% year over year.

Automatic Data Processing, Inc. (ADP Quick QuoteADP - Free Report)  reported better-than-expected second-quarter fiscal 2023 results.

ADP’s adjusted earnings per share of $1.96 beat the Zacks Consensus Estimate by 0.5% and grew 19% from the year-ago fiscal quarter. Total revenues of $4.4 billion beat the Zacks Consensus Estimate by 0.3% and improved 9.1% from the year-ago fiscal quarter.

Booz Allen Hamilton Holding Corp. (BAH Quick QuoteBAH - Free Report) reported impressive third-quarter fiscal 2023 results, wherein both earnings and revenues beat the respective Zacks Consensus Estimate. Quarterly adjusted earnings per share of $1.07 beat the Zacks Consensus Estimate by 4.9% and increased 4.9% on a year-over-year basis.

BAH’s total revenues of $2.3 billion beat the Zacks Consensus Estimate by 4% and increased 12.1% on a year-over-year basis.