Establishes fiscal year 2025
guidance
Maximus (NYSE: MMS), a leading provider of government services
worldwide, reported financial results for the three months and year
ended September 30, 2024.
Highlights for the fourth quarter and full fiscal year 2024
include:
- Full year revenue increased 8.2% to $5.31 billion, compared to
$4.90 billion for the prior year. Organic growth was 8.8% and
driven by higher volumes on key programs in the U.S. segments.
Fourth quarter revenue grew 4.4%, or 4.7% on an organic basis.
- Full year diluted earnings per share were $4.99, and adjusted
diluted earnings per share were $6.11. Fourth quarter diluted
earnings per share were $1.19, and adjusted diluted earnings per
share were $1.46.
- Full year cash flows from operating activities totaled $515
million, and free cash flow was $401 million, enabling debt
reduction across the year to yield a 1.4x leverage ratio at
September 30, 2024, as calculated in accordance with our credit
agreement.
- A quarterly cash dividend of $0.30 per share payable on
November 30, 2024, to shareholders of record on November 15,
2024.
"We are proud of the team for an excellent finish to a strong
year, and one that demonstrates a healthy core business operating
within our margin expectations," said Bruce Caswell, President and
Chief Executive Officer. "We kick off fiscal 2025 with guidance
that blends the momentum of fiscal 2024 with thoughtfulness toward
the upcoming U.S. Presidential transition."
Caswell continued, "Our earned position as an efficient and
flexible partner to government in the administration of entitlement
programs and essential government services perennially supported on
a bipartisan basis positions us well to advise, adapt, and rapidly
implement new priorities."
Consolidated Fiscal Year 2024 Fourth Quarter and Full Year
Results
Revenue for the full fiscal year 2024 increased 8.2% to $5.31
billion, compared to $4.90 billion for the prior year. Organic
growth was 8.8% over the prior year. Revenue for the fourth quarter
of the fiscal year grew 4.4% to $1.32 billion, or 4.7% on an
organic basis. Both periods benefited from volume growth on
clinical programs in the U.S. Federal Services Segment. The U.S.
Services Segment had a full fiscal year 2024 contribution of
Medicaid redetermination activities that have returned to normal
levels, plus excess volumes from Medicaid-related support
activities that were concluded by the fourth quarter of fiscal year
2024.
For the full fiscal year 2024, the operating margin was 9.2% and
the adjusted EBITDA margin was 11.6%. This compares to margins of
6.0% and 9.1%, respectively, for the prior year that reflected
ramping volumes on core programs and a partial period contribution
from resumed Medicaid-related activities. Adjusted EBITDA margin
excludes divestiture-related charges which were not material in
either fiscal year.
Earnings per share were $4.99 and adjusted diluted earnings per
share were $6.11. This compares to $2.63 and $3.83, respectively,
for the prior year. Fourth quarter diluted earnings per share were
$1.19, and adjusted diluted earnings per share were $1.46. This
compares to $0.96 and $1.29, respectively, for the prior-year
period.
U.S. Federal Services Segment
U.S. Federal Services Segment revenue for fiscal year 2024
increased 13.9% to $2.74 billion, compared to $2.40 billion
reported for the prior year. All growth was organic and driven
primarily by volume growth on clinical programs.
The segment operating margin for the full fiscal year 2024 was
12.2%, as compared to 10.4% reported for the prior year. The
segment delivered an 11.1% margin in fourth quarter of fiscal year
2024. Higher demand for services, particularly in clinical
services, and a higher mix of performance-based work were drivers
of margin enhancement in the segment this year.
U.S. Services Segment
U.S. Services Segment revenue for fiscal year 2024 increased by
5.5% to $1.91 billion, compared to $1.81 billion reported in the
prior year. All growth was organic and driven by strong performance
across the Medicaid-related portfolio. This included excess volumes
from the unwinding exercise, which was concluded by the fourth
quarter of this fiscal year.
The segment operating margin for fiscal year 2024 was 12.9%,
compared to 10.1% reported in the prior year, and benefited from
the strong Medicaid-related performance and the aforementioned
excess volumes. The segment delivered an 11.1% margin in fourth
quarter of fiscal year 2024 and did not benefit from excess
volumes.
Outside the U.S. Segment
Outside the U.S. Segment revenue for fiscal year 2024 decreased
4.6% to $657.1 million as compared to $689.1 million reported for
the prior year. Prior-year divestitures reduced revenue by 6.1%,
while currency effects provided a 1.7% benefit to revenue
growth.
The segment realized an operating profit of $7.7 million for
fiscal year 2024, compared to an operating loss of $9.1 million in
the prior year. Profitability for the segment this year, including
the 4.8% margin in fourth quarter, reflects progress in containing
volatile programs that have acted as greater headwinds in prior
periods.
Sales, Pipeline, and Backlog
Year-to-date signed contract awards at September 30, 2024,
totaled $2.2 billion, and contracts pending (awarded but unsigned)
totaled $312 million. The book-to-bill ratio at September 30, 2024,
was 0.4x on a trailing twelve-month basis. The lower book-to-bill
reflects an anticipated lower-than-normal period of rebid activity.
Given circumstances as best known today, the volume of
adjudications for both rebids and new work are expected to increase
over the next 12 months and result in an improved book-to-bill.
The sales pipeline at September 30, 2024, was $54.3 billion
(comprised of approximately $4.22 billion in proposals pending,
$7.12 billion in proposals in preparation, and $42.9 billion in
opportunities tracking). New work opportunities represent
approximately 48% of the total sales pipeline.
Backlog at September 30, 2024, which represents estimated future
revenue from existing signed contracts, contracts that have been
awarded but not yet signed, and unexercised priced contract
options, was estimated to be $16.2 billion. This compares to $20.7
billion at the same point in the prior year. Remaining option
periods for the Contact Center Operations (CCO) contract are
included in the year-end balance, while the backlog associated with
the Veterans Affairs Medical Disability Examination contracts has
been reduced to account for the two-year recompete currently in the
procurement stage.
Balance Sheet and Cash Flows
At September 30, 2024, cash and cash equivalents totaled $183
million, and gross debt was $1.15 billion. The ratio of debt, net
of allowed cash, to consolidated EBITDA for the full year ended
September 30, 2024, as calculated in accordance with our credit
agreement, was 1.4x. At the same point in the prior year, the ratio
was 2.2x, and we remain below our target leverage range of 2x to
3x.
For fiscal year 2024, cash flows from operating activities
totaled $515 million, and free cash flow was $401 million. This
compares to $314 million and $224 million, respectively, in the
prior year. DSO at September 30, 2024, were 61 days, compared with
60 days at the same point in the prior year.
During fiscal year 2024, we purchased approximately 0.9 million
shares totaling $73.1 million. Subsequent to September 30, 2024,
and through November 19, 2024, we purchased approximately 0.5
million shares totaling $43.2 million. Including the subsequent
activity, approximately $128 million remains on the current $200
million Board of Directors authorization granted in June 2024.
On October 5, 2024, our Board of Directors declared a quarterly
cash dividend of $0.30 for each share of our common stock
outstanding. The dividend is payable on November 30, 2024, to
shareholders of record on November 15, 2024.
Fiscal Year 2025 Outlook
Maximus is establishing fiscal year 2025 guidance. Revenue is
expected to range between $5.275 billion and $5.425 billion. An
adjusted EBITDA margin, which excludes divestiture-related charges,
of approximately 11.0% is anticipated for the full year. Adjusted
diluted earnings per share, which excludes expense for amortization
of intangible assets and divestiture-related charges, is expected
to range between $5.70 and $6.00 per share.
Free cash flow is expected to range between $345 million and
$375 million for fiscal year 2025. Forecasted expense of $92
million for amortization of intangible assets, $45 million for
depreciation and amortization, and $65 million for interest is
anticipated for the full year. An effective income tax rate of
approximately 25% and weighted average shares outstanding of about
61 million is expected for fiscal year 2025.
Conference Call and Webcast Information
Maximus will host a conference call tomorrow, November 21, 2024,
at 9:00 a.m. ET. Shareholders are invited to submit questions for
management’s consideration by emailing IR@maximus.com up to one
hour prior to the call.
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 governments across the globe,
Maximus helps improve the delivery of public services amid complex
technology, health, economic, environmental, 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 delivers
innovative business process management, impactful consulting
services, 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 Risk Factors
This release refers to non-GAAP measures and other indicators,
including organic growth, free cash flow, operating income, and EPS
adjusted for amortization of intangible assets and
divestiture-related charges, adjusted EBITDA, and other non-GAAP
measures.
A description of these non-GAAP measures, the reasons why we use
and present them, and details as to how they are calculated are
included in our earnings presentation and forthcoming Form
10-K.
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, 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.
Statements that are not historical facts, including statements
about the company’s confidence and strategies, and the company’s
expectations about revenues, results of operations, profitability,
future contracts, market opportunities, market demand, or
acceptance of the company’s products are forward-looking statements
that involve risks and uncertainties.
These risks could cause the company’s 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 year ended September 30,
2024, expected to be filed shortly with the Securities and Exchange
Commission (SEC). The Company's SEC reports are accessible on
maximus.com.
FY25 Guidance Reconciliation -
Non-GAAP
($ in millions except per share items)
Low End
High End
Operating income
$
439
$
464
Add: amortization of intangible assets
92
92
Add: depreciation & amortization of
property, equipment and capitalized software
45
45
Add: divestiture-related charges
—
—
Adjusted EBITDA
$
576
$
601
Revenue
$
5,275
$
5,425
Adjusted EBITDA Margin
10.9
%
11.1
%
Diluted EPS
$
4.60
$
4.90
Add: effect of amortization of intangible
assets on diluted EPS
1.10
1.10
Add: divestiture-related charges
—
—
Adjusted diluted EPS
$
5.70
$
6.00
Cash flows from operating activities
$
435
$
465
Remove: purchases of property and
equipment and capitalized software costs
(90
)
(90
)
Free cash flow
$
345
$
375
Maximus, Inc. Consolidated
Statements of Operations (Unaudited)
For the Three Months Ended
September 30,
For the Year Ended
September 30,
2024
2023
2024
2023
(in thousands, except per share
amounts)
Revenue
$
1,315,870
$
1,259,953
$
5,306,197
$
4,904,728
Cost of revenue
1,014,175
969,059
4,054,545
3,876,120
Gross profit
301,695
290,894
1,251,652
1,028,608
Selling, general, and administrative
expenses
166,901
167,778
671,583
639,223
Amortization of intangible assets
23,038
23,992
91,570
94,591
Operating income
111,756
99,124
488,499
294,794
Interest expense
20,012
20,507
82,440
84,138
Other (income)/expense, net
(925
)
442
(450
)
363
Income before income taxes
92,669
78,175
406,509
210,293
Provision for income taxes
20,165
19,029
99,595
48,501
Net income
$
72,504
$
59,146
$
306,914
$
161,792
Earnings per share:
Basic
$
1.20
0.97
$
5.03
$
2.65
Diluted
$
1.19
0.96
$
4.99
$
2.63
Weighted average shares outstanding:
Basic
60,553
61,138
61,049
61,125
Diluted
61,085
61,617
61,484
61,450
Dividends declared per share
$
0.30
$
0.28
$
1.20
$
1.12
Maximus, Inc. Consolidated
Balance Sheets (Unaudited)
As of September 30,
2024
2023
(in thousands)
Assets:
Cash and cash equivalents
$
183,123
$
65,405
Accounts receivable, net
879,514
826,873
Income taxes receivable
5,282
16,556
Prepaid expenses and other current
assets
132,625
146,632
Total current assets
1,200,544
1,055,466
Property and equipment, net
38,977
38,831
Capitalized software, net
187,677
107,811
Operating lease right-of-use assets
133,594
163,929
Goodwill
1,782,871
1,779,215
Intangible assets, net
630,569
703,648
Deferred contract costs, net
59,432
45,372
Deferred compensation plan assets
55,913
42,919
Deferred income taxes
14,801
2,459
Other assets
27,130
46,147
Total assets
$
4,131,508
$
3,985,797
Liabilities and Shareholders' Equity:
Liabilities:
Accounts payable and accrued
liabilities
$
303,321
$
282,081
Accrued compensation and benefits
237,121
194,251
Deferred revenue, current portion
83,238
60,477
Income taxes payable
26,535
451
Long-term debt, current portion
40,139
86,844
Operating lease liabilities, current
portion
47,656
49,852
Other current liabilities
69,519
49,058
Total current liabilities
807,529
723,014
Deferred revenue, non-current portion
45,077
38,849
Deferred income taxes
169,118
203,898
Long-term debt, non-current portion
1,091,954
1,163,149
Deferred compensation plan liabilities,
non-current portion
57,599
46,432
Operating lease liabilities, non-current
portion
97,221
129,367
Other liabilities
20,195
13,253
Total liabilities
2,288,693
2,317,962
Shareholders' equity:
Common stock, no par value; 100,000 shares
authorized; 60,352 and 60,998 shares issued and outstanding as of
September 30, 2024 and 2023, respectively
598,304
577,898
Accumulated other comprehensive loss
(32,460
)
(27,615
)
Retained earnings
1,276,971
1,117,552
Total shareholders' equity
1,842,815
1,667,835
Total liabilities and shareholders'
equity
$
4,131,508
$
3,985,797
Maximus, Inc. Consolidated
Statements of Cash Flows (Unaudited)
For the Three Months Ended
September 30,
For the Year Ended
September 30,
2024
2023
2024
2023
(in thousands)
Cash flows from operating activities:
Net income
$
72,504
$
59,146
$
306,914
$
161,792
Adjustments to reconcile net income to
cash flows from operations:
Depreciation and amortization of property,
equipment and capitalized software
9,811
17,633
33,957
54,725
Amortization of intangible assets
23,038
23,992
91,570
94,591
Amortization of debt issuance costs and
debt discount
635
601
3,534
2,837
Deferred income taxes
(32,252
)
(823
)
(36,022
)
1,552
Stock compensation expense
7,744
7,283
35,349
29,522
Loss on sale of businesses
—
—
1,018
883
Change in assets and liabilities, net of
effects of business combinations and disposals:
Accounts receivable
(24,034
)
(31,076
)
(50,562
)
(23,401
)
Prepaid expenses and other current
assets
(8,751
)
(20,242
)
10,565
859
Deferred contract costs
(4,778
)
443
(13,155
)
2,688
Accounts payable and accrued
liabilities
19,926
814
18,267
17,729
Accrued compensation and benefits
59,290
44,262
38,247
12,650
Deferred revenue
10,455
19,624
28,534
(12,123
)
Income taxes
21,729
16,228
32,305
(16,958
)
Operating lease right-of-use assets and
liabilities
225
1,707
(1,906
)
(2,035
)
Other assets and liabilities
8,292
4,997
16,643
(10,971
)
Net cash provided by operating
activities
163,834
144,589
515,258
314,340
Cash flows from investing activities:
Purchases of property and equipment and
capitalized software
(31,953
)
(31,832
)
(114,190
)
(90,695
)
Asset acquisition
7
—
(17,999
)
—
Proceeds from divestitures
7
608
3,085
9,732
Net cash used in investing activities
(31,939
)
(31,224
)
(129,104
)
(80,963
)
Cash flows from financing activities:
Cash dividends paid to Maximus
shareholders
(18,054
)
(17,020
)
(72,901
)
(68,073
)
Purchases of Maximus common stock
(25,794
)
—
(73,069
)
—
Tax withholding related to RSU vesting
—
—
(13,455
)
(8,475
)
Payments for contingent consideration
—
(2,769
)
(10,977
)
(9,431
)
Payments for debt financing costs
—
—
(9,724
)
—
Proceeds from borrowings
250,000
161,901
1,100,166
844,299
Principal payments for debt
(259,377
)
(222,460
)
(1,212,202
)
(952,974
)
Cash-collateralized escrow liabilities
7,398
(1,601
)
16,516
(56,144
)
Net cash used in financing activities
(45,827
)
(81,949
)
(275,646
)
(250,798
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
1,894
(1,018
)
3,164
2,717
Net change in cash, cash equivalents, and
restricted cash
87,962
30,398
113,672
(14,704
)
Cash, cash equivalents and restricted
cash, beginning of period
147,801
91,693
122,091
136,795
Cash, cash equivalents and restricted
cash, end of period
$
235,763
$
122,091
$
235,763
$
122,091
Maximus, Inc. Consolidated
Results of Operations by Segment (Unaudited)
For the Three Months Ended
September 30,
For the Year Ended
September 30,
2024
2023
2024
2023
Amount
% (1)
Amount
% (1)
Amount
% (1)
Amount
% (1)
(dollars in thousands)
Revenue:
U.S. Federal Services
$
675,117
$
617,404
$
2,737,244
$
2,403,606
U.S. Services
463,555
473,827
1,911,813
1,812,069
Outside the U.S.
177,198
168,722
657,140
689,053
Revenue
$
1,315,870
$
1,259,953
$
5,306,197
$
4,904,728
Gross
profit:
U.S. Federal Services
$
159,688
23.7%
$
155,373
25.2%
$
665,762
24.3%
$
557,886
23.2%
U.S. Services
110,290
23.8%
109,389
23.1%
479,787
25.1%
377,541
20.8%
Outside the U.S.
31,717
17.9%
26,132
15.5%
106,103
16.1%
93,181
13.5%
Gross profit
$
301,695
22.9%
$
290,894
23.1%
$
1,251,652
23.6%
$
1,028,608
21.0%
Selling, general,
and administrative expenses:
U.S. Federal Services
$
84,469
12.5%
$
78,606
12.7%
$
332,140
12.1%
$
308,197
12.8%
U.S. Services
58,773
12.7%
54,198
11.4%
232,805
12.2%
194,991
10.8%
Outside the U.S.
23,149
13.1%
26,375
15.6%
98,398
15.0%
102,311
14.8%
Divestiture related charges (2)
—
NM
2,868
NM
1,018
NM
3,751
NM
Other (3)
510
NM
5,731
NM
7,222
NM
29,973
NM
Selling, general, and administrative
expenses
$
166,901
12.7%
$
167,778
13.3%
$
671,583
12.7%
$
639,223
13.0%
Operating
income/(loss):
U.S. Federal Services
$
75,219
11.1%
$
76,767
12.4%
$
333,622
12.2%
$
249,689
10.4%
U.S. Services
51,517
11.1%
55,191
11.6%
246,982
12.9%
182,550
10.1%
Outside the U.S.
8,568
4.8%
(243
)
(0.1)%
7,705
1.2%
(9,130
)
(1.3)%
Amortization of intangible assets
(23,038
)
NM
(23,992
)
NM
(91,570
)
NM
(94,591
)
NM
Divestiture related charges (2)
—
NM
(2,868
)
NM
(1,018
)
NM
(3,751
)
NM
Other (3)
(510
)
NM
(5,731
)
NM
(7,222
)
NM
(29,973
)
NM
Operating income
$
111,756
8.5%
$
99,124
7.9%
$
488,499
9.2%
$
294,794
6.0%
(1)
Percentage of respective segment revenue. Percentages not
considered meaningful are marked "NM."
(2)
During fiscal years 2024 and 2023, we sold a number of
businesses in our Outside the U.S. Segment.
(3)
Other includes credits and costs that are not allocated to a
particular segment, including charges related to acquisitions,
divestitures, and certain legal activities. For fiscal year 2023,
these included charges of $29.3 million related to a
previously disclosed cybersecurity incident.
Maximus, Inc. Consolidated
Free Cash Flows - Non-GAAP (Unaudited)
For the Three Months Ended
September 30,
For the Year Ended
September 30,
2024
2023
2024
2023
(in thousands)
Net cash provided by operating
activities
$
163,834
$
144,589
$
515,258
$
314,340
Purchases of property and equipment and
capitalized software
(31,953
)
(31,832
)
(114,190
)
(90,695
)
Free cash flow
$
131,881
$
112,757
$
401,068
$
223,645
Maximus, Inc. Non-GAAP
Adjusted Results - Operating Income, Adjusted EBITDA, Net Income,
and Diluted Earnings per Share (Unaudited)
For the Three Months Ended
September 30,
For the Year Ended
September 30,
2024
2023
2024
2023
(dollars in thousands, except per
share data)
Operating income
$
111,756
$
99,124
$
488,499
$
294,794
Add back: Amortization of intangible
assets
23,038
23,992
91,570
94,591
Add back: Divestiture-related charges
—
2,868
1,018
3,751
Adjusted operating income excluding
amortization of intangible assets and divestiture-related charges
(Non-GAAP)
$
134,794
$
125,984
$
581,087
$
393,136
Adjusted operating income margin excluding
amortization of intangible assets and divestiture-related charges
(Non-GAAP)
10.2
%
10.0
%
11.0
%
8.0
%
Add back: Depreciation and amortization of
property, equipment, and capitalized software
9,811
17,633
33,957
54,725
Adjusted EBITDA (Non-GAAP)
$
144,605
$
143,617
$
615,044
$
447,861
Adjusted EBITDA margin (Non-GAAP)
11.0
%
11.4
%
11.6
%
9.1
%
Net income
$
72,504
$
59,146
$
306,914
$
161,792
Add back: Amortization of intangible
assets, net of tax
16,973
17,682
67,481
69,714
Add back: Divestiture-related charges
—
2,868
1,018
3,751
Adjusted net income excluding amortization
of intangible assets and divestiture-related charges (Non-GAAP)
$
89,477
$
79,696
$
375,413
$
235,257
Diluted earnings per share
$
1.19
$
0.96
$
4.99
$
2.63
Add back: Effect of amortization of
intangible assets on diluted earnings per share
0.27
0.28
1.10
1.14
Add back: Effect of divestiture-related
charges on diluted earnings per share
—
0.05
0.02
0.06
Adjusted diluted earnings per share
excluding amortization of intangible assets and divestiture-related
charges (Non-GAAP)
$
1.46
$
1.29
$
6.11
$
3.83
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241120519885/en/
James Francis, VP - IR Jessica Batt, VP - IR & ESG
IR@maximus.com
Grafico Azioni MAXIMUS (NYSE:MMS)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni MAXIMUS (NYSE:MMS)
Storico
Da Dic 2023 a Dic 2024
