Maximus Reports Fiscal Year 2026 Third Quarter Results
Maximus (NYSE: MMS), a leading provider of government services, reported financial results for the three and nine months ended June 30, 2026. Highlights for the third quarter of fiscal year 2026 inclu...
Strong earnings performance reflects disciplined execution
TYSONS, Va.: Maximus (NYSE: MMS), a leading provider of government services, reported financial results for the three and nine months ended June 30, 2026.
Highlights for the third quarter of fiscal year 2026 include:
- Revenue of $1.28 billion, compared to $1.35 billion for the prior year period, was in line with expectations and supports our full year revenue guidance outlook.
- Diluted earnings per share were $1.95 and adjusted diluted earnings per share were $2.22, compared to $1.86 and $2.16, respectively, for the prior year period.
- Revenue guidance is reiterated and expected to range between $5.2 billion and $5.35 billion for fiscal year 2026.
- Earnings guidance for fiscal year 2026 is updated to reflect a temporary customer-directed contractual modification on a major federal program. Adjusted diluted earnings per share are now expected to range between $7.90 and $8.20 per share, and adjusted EBITDA margin is expected to be approximately 13.7% for fiscal year 2026.
- Free cash flow guidance is updated to range between $425 million and $475 million.
- Repurchases of Maximus common stock in the quarter totaled 0.75 million shares for $50.4 million.
- A quarterly cash dividend of $0.33 per share is payable on August 31, 2026, to shareholders of record on August 14, 2026.
"Our third quarter results demonstrate the resilience of the Maximus business and our ability to deliver strong earnings performance while continuing to invest in long-term growth opportunities," said Bruce Caswell, President and Chief Executive Officer.
Caswell continued, "More broadly, we continue to see encouraging demand signals across our markets, increased adoption of AI-enabled solutions, growing interest in our SNAP-related offerings, and a substantial opportunity set in the defense and national security markets."
Third Quarter Results
Revenue for the third quarter of fiscal year 2026 was $1.28 billion and was consistent with our expectations entering the quarter. Prior year period revenue was $1.35 billion and benefited from elevated natural disaster support activity as well as temporary clinical volume surges within the U.S. Federal Services Segment.
For the third quarter of fiscal year 2026, operating margin was 12.6% and adjusted EBITDA margin was 15.0%. This compares to margins of 12.3% and 14.7%, respectively, for the prior year period. Diluted earnings per share were $1.95, and adjusted diluted earnings per share were $2.22. This compares to $1.86 and $2.16, respectively, for the prior year period.
Consolidated earnings improved over the prior year period primarily due, in part, to ongoing efficiency initiatives across multiple program areas, including broader deployment of automation and AI-enabled tools.
U.S. Federal Services Segment
U.S. Federal Services Segment revenue for the third quarter of fiscal year 2026 was $721 million. Prior year period revenue of $761 million benefited from elevated natural disaster response work and temporary clinical volume surges that did not recur at the same level in the current quarter.
The segment operating margin for the third quarter of fiscal year 2026 was 18.6%, compared to 18.1% reported for the prior year period. Productivity improvements, technology-enabled efficiencies, and stable performance across core program areas contributed to the improvement.
During the quarter, we received notification from a major customer regarding a temporary contractual modification effective July 1, 2026, through December 31, 2026, which affects profitability expectations for the remainder of fiscal year 2026. This is reflected in updated fiscal year 2026 guidance as well as the full-year operating margin for the U.S. Federal Services Segment, which is now expected to range between 16.5% and 17.0%.
U.S. Services Segment
U.S. Services Segment revenue for the third quarter of fiscal year 2026 was $418 million and was consistent with our expectation for continued sequential improvement as we progress toward the positive revenue growth anticipated by the end of the fiscal year. The prior year period segment revenue was $440 million.
The segment operating margin for the third quarter of fiscal year 2026 was 10.8%, reflecting continued progression throughout the fiscal year, and compares to the prior year period segment operating margin of 10.2%. The full-year fiscal 2026 operating margin for the U.S. Services Segment is expected to range between 9.5% and 10.0%.
Outside the U.S. Segment
Outside the U.S. Segment revenue for the third quarter of fiscal year 2026 was $140 million, compared to $147 million in the prior year period. Variances in volumes across several programs, including both clinical and employment services contracts, were primarily responsible for the year-over-year revenue change.
The segment operating margin for the third quarter of fiscal year 2026 was 0.9%, compared to 4.0% reported for the prior year period. With the segment still expected to break even for fiscal year 2026, we continue to focus on driving growth and further margin improvement through the successful conversion of this segment's sales pipeline.
Sales and Pipeline
Year-to-date signed contract awards at June 30, 2026, totaled $1.25 billion, and contracts pending (awarded but unsigned) totaled $1.35 billion.
The sales pipeline at June 30, 2026, totaled $50.4 billion, comprised of approximately $2.86 billion in proposals pending, $2.42 billion in proposals in preparation, and $45.1 billion in opportunities we are tracking. New work opportunities represent approximately 57% of the total sales pipeline, and U.S. Federal Services Segment opportunities represent approximately 55% of the total sales pipeline.
Balance Sheet and Cash Flows
At June 30, 2026, unrestricted cash and cash equivalents totaled $57 million, and gross debt was $1.65 billion. The ratio of debt, net of allowed cash, to consolidated EBITDA for the quarter ended June 30, 2026, as calculated on a trailing twelve-month basis in accordance with our credit agreement, was 2.0x, compared to 1.8x at March 31, 2026. The ratio remains within our target net leverage ratio of 2x to 3x.
For the third quarter of fiscal year 2026, cash used in operating activities totaled $125 million, and free cash flow was an outflow of $137 million. DSO were 98 days at June 30, 2026. Collections from a major federal customer accelerated during July, and we continue to expect DSO to finish fiscal year 2026 below 70 days.
During the third quarter of fiscal year 2026, we purchased approximately 0.75 million shares of Maximus common stock totaling $50.4 million. In May 2026, the Board of Directors authorized a refresh to the repurchase program for Maximus common stock up to an aggregate of $400 million. As of June 30, 2026, the entire $400 million authorization remained available for future repurchases.
On July 6, 2026, our Board of Directors declared a quarterly cash dividend of $0.33 for each share of our common stock outstanding. The dividend is payable on August 31, 2026, to shareholders of record on August 14, 2026.
Fiscal Year 2026 Guidance Update
We reiterate our fiscal year 2026 revenue guidance, which is expected to range between $5.2 billion and $5.35 billion, with results anticipated toward the lower end of the range.
We are updating fiscal year 2026 earnings guidance to account for the temporary contractual modification. We now expect our adjusted EBITDA margin to be approximately 13.7% and adjusted diluted earnings per share to range between $7.90 and $8.20 per share for fiscal year 2026.
We now expect free cash flow to range between $425 million and $475 million for fiscal year 2026, which corresponds to the earnings guidance change.
Interest expense is estimated to be $88 million, and the full fiscal year tax rate is expected to range between 24.0% and 24.5% for fiscal year 2026.
Conference Call and Webcast Information
Maximus will host a conference call this morning, August 6, 2026, at 9:00 a.m. ET.
The call is open to the public and available by webcast or by phone at:
877.407.8289 (Domestic) / +1.201.689.8341 (International)
For those unable to listen to the live call, a recording of the webcast will be available on investor.maximus.com.
About Maximus
As a leading strategic partner to government, Maximus helps improve the delivery of public services amid complex technology, health, economic, and social challenges. With a deep understanding of program service delivery, acute insights that achieve operational excellence, and an extensive awareness of the needs of the people being served, our employees advance the critical missions of our partners. Maximus provides tech-enabled services to government agencies, including innovative business process management and technology solutions, that provide improved outcomes for the public and higher levels of productivity and efficiency of government-sponsored programs. For more information, visit maximus.com.
Non-GAAP Measures and Forward-Looking Statements
This release contains non-GAAP measures and other indicators, including adjusted net income, free cash flow, diluted EPS adjusted for amortization of intangible assets and divestiture-related charges and gains, adjusted EBITDA, adjusted EBITDA margin, consolidated EBITDA (as defined by our Credit Agreement), and other non-GAAP measures.
A description of these non-GAAP measures and details as to how they are calculated are included with our earnings presentation and forthcoming Form 10-Q.
The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operations, revenue growth, operating income, or net income as measures of performance. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies.
Included in this release are forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "on track,” "opportunity," "could," "potential," "believe," "project," "estimate," "expect," "continue," "forecast," "strategy," "future," "likely," "may," "should," "will," and similar references to future periods. Forward-looking statements that are not historical facts, including statements about our confidence, strategies and initiatives, guidance and expectations about revenues, results of operations, profitability, future contracts, liquidity, market opportunities, market demand, acceptance of our products and service offerings, or acquisitions and divestitures, are forward-looking statements that involve risks and uncertainties.
These risks could cause our actual results to differ materially from those indicated by such forward-looking statements. A summary of risk factors can be found in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025, filed on November 20, 2025, and subsequent filings with the Securities and Exchange Commission (SEC). Our SEC filings are accessible on maximus.com.
Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to update the guidance herein or any other forward-looking statement as circumstances evolve.
| FY26 Guidance Reconciliation - Non-GAAP | ||||||
($ in millions except per share items) | Low End |
| High End | ||||
Net income | $ | 376 |
|
| $ | 392 |
|
Add: Interest expense and other expense/(income) |
| 88 |
|
|
| 88 |
|
Add: Provision for income taxes |
| 120 |
|
|
| 126 |
|
Add: Amortization of intangible assets |
| 81 |
|
|
| 81 |
|
Add: Depreciation & amortization of property, equipment and capitalized software |
| 50 |
|
|
| 50 |
|
Add: Capitalized software impairment charges |
| 7 |
|
|
| 7 |
|
Add: Divestiture-related gains |
| (10 | ) |
|
| (10 | ) |
Adjusted EBITDA | $ | 712 |
|
| $ | 734 |
|
Revenue | $ | 5,200 |
|
| $ | 5,350 |
|
|
|
|
| ||||
Net income margin |
| 7.2 | % |
|
| 7.3 | % |
Adjusted EBITDA margin |
| 13.7 | % |
|
| 13.7 | % |
|
|
|
| ||||
Diluted EPS | $ | 6.94 |
|
| $ | 7.24 |
|
Add: effect of amortization of intangible assets on diluted EPS |
| 1.10 |
|
|
| 1.10 |
|
Add: effect of divestiture-related gains on diluted EPS |
| (0.14 | ) |
|
| (0.14 | ) |
Adjusted diluted EPS | $ | 7.90 |
|
| $ | 8.20 |
|
|
|
|
| ||||
Cash flows from operating activities | $ | 465 |
|
| $ | 515 |
|
Remove: purchases of property and equipment and capitalized software costs |
| (40 | ) |
|
| (40 | ) |
Free cash flow | $ | 425 |
|
| $ | 475 |
|
Maximus, Inc. Consolidated Statements of Operations (Unaudited) | ||||||||||||||
| For the Three Months Ended |
| For the Nine Months Ended | |||||||||||
| June 30, 2026 |
| June 30, 2025 |
| June 30, 2026 |
| June 30, 2025 | |||||||
| (in thousands, except per share amounts) | |||||||||||||
Revenue | $ | 1,278,971 |
|
| $ | 1,348,400 |
| $ | 3,929,984 |
|
| $ | 4,112,861 |
|
Cost of revenue |
| 930,168 |
|
|
| 988,887 |
|
| 2,920,247 |
|
|
| 3,112,970 |
|
Gross profit |
| 348,803 |
|
|
| 359,513 |
|
| 1,009,737 |
|
|
| 999,891 |
|
Selling, general, and administrative expenses |
| 167,188 |
|
|
| 170,831 |
|
| 492,827 |
|
|
| 525,423 |
|
Amortization of intangible assets |
| 20,187 |
|
|
| 23,010 |
|
| 60,785 |
|
|
| 69,041 |
|
Operating income |
| 161,428 |
|
|
| 165,672 |
|
| 456,125 |
|
|
| 405,427 |
|
Interest expense |
| 23,878 |
|
|
| 22,657 |
|
| 66,805 |
|
|
| 61,648 |
|
Other (income)/expense, net |
| (608 | ) |
|
| 48 |
|
| (1,639 | ) |
|
| (603 | ) |
Income before income taxes |
| 138,158 |
|
|
| 142,967 |
|
| 390,959 |
|
|
| 344,382 |
|
Provision for income taxes |
| 34,565 |
|
|
| 36,986 |
|
| 95,360 |
|
|
| 100,636 |
|
Net income | $ | 103,593 |
|
| $ | 105,981 |
| $ | 295,599 |
|
| $ | 243,746 |
|
|
|
|
|
|
|
|
| |||||||
Earnings per share: |
|
|
|
|
|
|
| |||||||
Basic | $ | 1.96 |
|
| $ | 1.87 |
| $ | 5.48 |
|
| $ | 4.22 |
|
Diluted | $ | 1.95 |
Related news
Last NewsRSA at Cybertech Europe 2024Alaa Abdul Nabi, Vice President, Sales International at RSA presents the innovations the vendor brings to Cybertech as part of a passwordless vision for… Italian Security Awards 2024: G11 Media honours the best of Italian cybersecurityG11 Media's SecurityOpenLab magazine rewards excellence in cybersecurity: the best vendors based on user votes How Austria is making its AI ecosystem growAlways keeping an European perspective, Austria has developed a thriving AI ecosystem that now can attract talents and companies from other countries Sparkle and Telsy test Quantum Key Distribution in practiceSuccessfully completing a Proof of Concept implementation in Athens, the two Italian companies prove that QKD can be easily implemented also in pre-existing… Most readAlibaba Group Announces June Quarter 2026 Results$BABA #AI--Alibaba Group Holding Limited (NYSE: BABA and HKEX: 9988 (HKD Counter) and 89988 (RMB Counter), “Alibaba” or “Alibaba Group”) today announced… SimpleClosure Releases H1 2026 Shutdown Report with SaaS Startups Closing…SimpleClosure, the industry standard for responsible company shutdowns, today published its H1 2026 Shutdown Report highlighting data trends from the… Orvera AI Featured as Core Performing on the CMP Prism for Voicebot/Conversational…#AIAgents--Orvera AI proudly announces its placement on the CMP Prism, for Voicebot/Conversational IVR. The CMP Prism is an independent, analyst-led evaluation… CrowdStrike’s Fal.Con 2026 Unites Cybersecurity’s Ecosystem to Secure…CrowdStrike (NASDAQ: CRWD) today announced that Fal.Con 2026 will feature a record 150+ ecosystem sponsors, led by Amazon Web Services (AWS), Accenture,… G11 Media Networks
InnovationOpenLab is a channel of BitCity, a newspaper registered at the court of Como , 
| |||||||||||