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MMS' Q3 EPS rose 24.1% to $2.16, topping estimates by 55.4%, with revenues up 2.6% to $1.35B.
U.S. Federal Services revenues jumped 11.4%, while U.S. and Outside U.S. segments declined 6.9% each.
MMS raised 2025 EPS outlook to $7.35-$7.55 and revenues to $5.38B-$5.48B, with margins seen near 13%.
Maximus, Inc. (MMS - Free Report) reported impressive third-quarter fiscal 2025 results. Both earnings and revenues beat the Zacks Consensus Estimate. The better-than-expected results positively impacted the market as the stock has rallied 4% since the earnings release.
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Quarterly adjusted earnings of $2.16 per share beat the Zacks Consensus Estimate by 55.4% and increased 24.1% year over year. Revenues of $1.35 billion topped the consensus mark by 4.5% and rose 2.6% from the year-ago quarter.
Maximus raised the earnings and revenue guidance for fiscal year 2025. Total revenues are now expected between $5.38 billion and $5.48 billion compared with the previous expectation of $5.25 billion and $5.34 billion. The Zacks Consensus Estimate is pegged at $5.38 billion.
Adjusted earnings are anticipated in the range of $7.35-$7.55 per share compared with the previous expectations of $6.30-$6.60 per share. The updated guided range is higher than the current Zacks Consensus Estimate of $6.61.
Segmental Revenues of Maximus
The U.S. Federal Services segment’s revenues of $761.2 million rose 11.4% from the year-ago reported number and beat our estimate of $686.8 million. Meanwhile, the Outside the U.S. segment’s revenues of $147.4 million decreased 6.9% year over year and missed our anticipation of $163.7 million. The U.S. Services segment’s revenues of $439.8 million fell 6.9% year over year and lagged our estimate of $440.2 million.
MMS’ Sales and Pipeline
Year-to-date signed contract awards, as of June 30, 2025, totaled $3.37 billion. Contracts pending (awarded but unsigned) amounted to $1.44 billion. The sales pipeline, as of June 30, was $44.7 billion. This included $3.05 billion in pending proposals, $1.20 billion in proposals in preparation and $40.4 billion in opportunities tracking. The book-to-bill ratio was 0.8 on a trailing 12-month basis.
MMS’ Operating Performance
Operating income of $165.7 million increased 16.9% year over year. This compares with our expected adjusted operating income of $128 million, down 22.6% year over year. The adjusted operating income margin of 12.3% increased 151 basis points year over year.
Maximus’ Balance Sheet and Cash Flow
Maximus ended the quarter with a cash and cash equivalent balance of $59.8 million compared with $73 million reported at the end of the prior quarter.
The company generated $182.7 million in cash from operations. Free cash outflow was $198.2 million.
MMS Updates Fiscal 2025 Guidance
The company expects an adjusted EBITDA margin of approximately 13% compared with 11.7% expected earlier.
Free cash flow expectation is between $370 million and $390 million. The company forecasts interest expenses of approximately $81 million compared with the prior anticipation of $78 million. The effective income tax rate is anticipated to be within 28-29%. On a full-year basis, the weighted average shares outstanding are forecasted to be approximately 58 million.
Fiserv, Inc. (FI - Free Report) reported mixed second-quarter 2025 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
FI’s adjusted EPS of $2.47 topped the consensus mark by 2.5% and rose 16% year over year. Adjusted revenues of $5.2 billion lagged the consensus estimate by a slight margin but gained 1.7% on a year-over-year basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported impressive second-quarter 2025 results. Both earnings and revenues beat the Zacks Consensus Estimate.
IPG’s adjusted earnings of 75 cents per share surpassed the Zacks Consensus Estimate by 36.4% and jumped 23% from the year-ago quarter. Revenues before billable expenses (net revenues) of $2.2 billion beat the consensus estimate by a slight margin but declined 19.8% year over year. Total revenues of $2.5 billion decreased 7.2% year over year but outpaced the Zacks Consensus Estimate of $2.2 billion.
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Maximus' Q3 Earnings Beat Estimates, Stock Rallies 4%
Key Takeaways
Maximus, Inc. (MMS - Free Report) reported impressive third-quarter fiscal 2025 results. Both earnings and revenues beat the Zacks Consensus Estimate. The better-than-expected results positively impacted the market as the stock has rallied 4% since the earnings release.
Image Source: Zacks Investment Research
Quarterly adjusted earnings of $2.16 per share beat the Zacks Consensus Estimate by 55.4% and increased 24.1% year over year. Revenues of $1.35 billion topped the consensus mark by 4.5% and rose 2.6% from the year-ago quarter.
Maximus, Inc. Price, Consensus and EPS Surprise
Maximus, Inc. price-consensus-eps-surprise-chart | Maximus, Inc. Quote
Maximus raised the earnings and revenue guidance for fiscal year 2025. Total revenues are now expected between $5.38 billion and $5.48 billion compared with the previous expectation of $5.25 billion and $5.34 billion. The Zacks Consensus Estimate is pegged at $5.38 billion.
Adjusted earnings are anticipated in the range of $7.35-$7.55 per share compared with the previous expectations of $6.30-$6.60 per share. The updated guided range is higher than the current Zacks Consensus Estimate of $6.61.
Segmental Revenues of Maximus
The U.S. Federal Services segment’s revenues of $761.2 million rose 11.4% from the year-ago reported number and beat our estimate of $686.8 million. Meanwhile, the Outside the U.S. segment’s revenues of $147.4 million decreased 6.9% year over year and missed our anticipation of $163.7 million. The U.S. Services segment’s revenues of $439.8 million fell 6.9% year over year and lagged our estimate of $440.2 million.
MMS’ Sales and Pipeline
Year-to-date signed contract awards, as of June 30, 2025, totaled $3.37 billion. Contracts pending (awarded but unsigned) amounted to $1.44 billion. The sales pipeline, as of June 30, was $44.7 billion. This included $3.05 billion in pending proposals, $1.20 billion in proposals in preparation and $40.4 billion in opportunities tracking. The book-to-bill ratio was 0.8 on a trailing 12-month basis.
MMS’ Operating Performance
Operating income of $165.7 million increased 16.9% year over year. This compares with our expected adjusted operating income of $128 million, down 22.6% year over year. The adjusted operating income margin of 12.3% increased 151 basis points year over year.
Maximus’ Balance Sheet and Cash Flow
Maximus ended the quarter with a cash and cash equivalent balance of $59.8 million compared with $73 million reported at the end of the prior quarter.
The company generated $182.7 million in cash from operations. Free cash outflow was $198.2 million.
MMS Updates Fiscal 2025 Guidance
The company expects an adjusted EBITDA margin of approximately 13% compared with 11.7% expected earlier.
Free cash flow expectation is between $370 million and $390 million. The company forecasts interest expenses of approximately $81 million compared with the prior anticipation of $78 million. The effective income tax rate is anticipated to be within 28-29%. On a full-year basis, the weighted average shares outstanding are forecasted to be approximately 58 million.
Currently, Maximus carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Fiserv, Inc. (FI - Free Report) reported mixed second-quarter 2025 results, wherein earnings beat the Zacks Consensus Estimate, but revenues missed the same.
FI’s adjusted EPS of $2.47 topped the consensus mark by 2.5% and rose 16% year over year. Adjusted revenues of $5.2 billion lagged the consensus estimate by a slight margin but gained 1.7% on a year-over-year basis.
The Interpublic Group of Companies, Inc. (IPG - Free Report) reported impressive second-quarter 2025 results. Both earnings and revenues beat the Zacks Consensus Estimate.
IPG’s adjusted earnings of 75 cents per share surpassed the Zacks Consensus Estimate by 36.4% and jumped 23% from the year-ago quarter. Revenues before billable expenses (net revenues) of $2.2 billion beat the consensus estimate by a slight margin but declined 19.8% year over year. Total revenues of $2.5 billion decreased 7.2% year over year but outpaced the Zacks Consensus Estimate of $2.2 billion.