Maximus, Inc. MMS reported mixed fourth-quarter fiscal 2024 results. Earnings marginally missed the Zacks Consensus Estimate, but revenues beat the Zacks Consensus Estimate.

Quarterly adjusted earnings of $1.46 per share marginally lagged the Zacks Consensus Estimate but increased 13.2% on a year-over-year basis. Revenues of $1.32 billion beat the consensus mark by 1.8% and rose 4.4% from the year-ago quarter.

Maximus, Inc. Price, Consensus and EPS Surprise

Maximus, Inc. price-consensus-eps-surprise-chart | Maximus, Inc. Quote

Segmental Revenues of Maximus

The U.S. Federal Services segment’s revenues of $675 million rose 9.4% from the year-ago reported number and beat our estimate of $642.8 million. The Outside the U.S. segment’s revenues of $177.2 million increased 5% from fourth-quarter fiscal 2023 and outpaced our anticipated $154.4 million. The U.S. Services segment’s revenues of $463.6 million decreased 2.2% year over year and missed our estimate of $487.1 million.

MMS’ Sales and Pipeline

Year-to-date signed contract awards, as of Sept. 30, 2024, totaled $2.2 billion. Contracts pending (awarded but unsigned) amounted to $312 million. The sales pipeline, as of Sept. 30, was $54.3 billion. This included $4.22 billion in pending proposals, $7.12 billion in proposals in preparation and $42.9 billion in opportunities tracking.

The book-to-bill ratio, as of Sept. 30, 2023, was 0.4 on a trailing 12-month basis. 

MMS’ Operating Performance

Adjusted operating income of $134.79 million increased 7% year over year. This compares with our expected adjusted operating income of $139.6 million, down 3.5% year over year. The adjusted operating income margin of 10.2% increased 20 basis points year over year.  

Maximus’ Balance Sheet and Cash Flow

Maximus ended the quarter with a cash and cash equivalent balance of $183.12 million compared with $102.79 million reported at the end of the prior quarter.

The company used $163.83 million in cash from operations. Capital expenditures were $31.95 million, and free cash flow amounted to $131.8 million.

Currently, Maximus carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MMS’ Fiscal 2025 Guidance

Total revenues are expected between $5.28 billion and $5.43 billion. The midpoint of the guided range ($5.35 billion) is in line with the Zacks Consensus Estimate of $5.35 billion.

Adjusted earnings are anticipated in the range of $5.70-$6.00 per share, the midpoint ($5.85) of which is higher than the current Zacks Consensus Estimate of $5.83. Free cash flow is expected between $345 million and $375 million for fiscal year 2025. The company forecasts expenses of $92 million for amortization of intangible assets, $45 million for depreciation and amortization, interest expenses of approximately $65 million, an effective income tax rate within 25% and weighted average shares outstanding within 61 million for fiscal 2025.

An adjusted EBITDA margin, which excludes divestiture-related charges, of approximately 11% is anticipated for the full year.

Recent Earnings Snapshots

Omnicom OMC reported impressive third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate.

OMC’s earnings of $2 per share beat the consensus estimate by 3.1% and increased 9.1% year over year. Total revenues of $3.9 billion surpassed estimates by 2.3% and rose 8.5% year over year.

Equifax EFX reported mixed third-quarter 2024 results. Earnings surpassed the Zacks Consensus Estimate, while revenues missed the same.

EFX’s adjusted earnings were $1.8 per share, beating the Zacks Consensus Estimate by a slight margin and increasing by 5.1% from the year-ago quarter’s actual. Total revenues of $1.4 billion missed the consensus estimate by a slight margin but increased 9.3% from the year-ago quarter.

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