MMS · Maximus, Inc.

Maximus delivered second quarter fiscal 2026 results with revenue of $1.31 billion, down from $1.36 billion in the prior year period due to the absence of natural disaster support and temporary clinical volume surges. Despite the revenue decline, profitability improved meaningfully, with operating margin expanding to 11.4% from 11.2% and adjusted EBITDA margin rising to 14.4% from 13.7%, driven by efficiency gains from automation and AI-enabled tools across program areas. Diluted EPS increased to $1.80 from $1.69, and adjusted diluted EPS rose to $2.07 from $2.01. These gains offset a $6.9 million non-cash impairment charge in the U.S. Services segment and were partially supported by a $4.2 million discrete tax benefit, with both items excluded from adjusted metrics and having offsetting EPS impacts.

Segment performance varied: U.S. Federal Services revenue fell to $753 million from $778 million but showed 1.5% organic growth excluding prior disaster work, with margins expanding to 17.6% from 15.3% due to technology-driven efficiencies; full-year segment margin guidance raised to 17.5%. U.S. Services revenue declined to $416 million from $442 million, with margins at 9.3% (10.9% excluding impairment) versus 12.2% prior year; full-year outlook at 10.0%. Outside U.S. revenue was $137 million versus $142 million, shifting to an operating loss of $3.1 million from a $4.8 million profit, but expected to break even for the full year post-reshaping.

Management raised full-year guidance, lifting adjusted EBITDA margin outlook by 20 basis points to 14.2% and adjusted diluted EPS by $0.20 to $8.25-$8.55, while reiterating revenue ($5.2-$5.35 billion) and free cash flow ($450-$500 million) targets. CEO Bruce Caswell highlighted confidence in AI and technology for margin expansion and capital deployment, including a refreshed $400 million share repurchase authorization effective May 11, 2026, following $150.9 million in recent buybacks. A $0.33 quarterly dividend was declared, payable June 1. Balance sheet remains solid with $157 million cash, $1.55 billion debt, and net leverage at 1.8x. Sales pipeline stands at $56.8 billion, with year-to-date signed awards of $913 million.