MMS - Maximus, Inc.

Maximus, Inc. provides government program management and technology services, primarily operating Health and Human Services programs such as Medicaid eligibility determinations, welfare-to-work initiatives, and unemployment insurance administration on behalf of federal and state government agencies under long-term government contracts. The business model is government B2B services with multi-year contracts, often on a cost-plus or fixed-price basis, with revenue tied to caseload volumes and program scale. Maximus generates approximately $5B in annual revenue, with the United States accounting for the majority of business, supplemented by operations in the United Kingdom, Australia, and Canada. Key service lines include the federal Medicaid redetermination contracts and the U.S. Digital Services division supporting agencies like the IRS and VA.

Past Year Trends

• Maximus FY2025 full-year revenue grew 2.4% to $5.43 billion, with adjusted diluted EPS of $7.36 and adjusted EBITDA margin expanding to 12.9%, driven by high demand for clinical services in the U.S. Federal Services segment and a new large Air Force contract win that closed out the fiscal year above expectations. (Bullish)
• Pandemic-era Medicaid continuous enrollment unwinding caused Medicaid enrollment to fall 7.6% in FY2025, compressing volumes in Maximus's state-level eligibility and enrollment administration business within the U.S. Services segment, contributing to the company's ~3% revenue headwind entering FY2026. (Bearish)
• DOGE-related federal contract scrutiny resulted in only $4 million of direct FY2025 revenue impact for Maximus, but reduced clinical and disaster-response work volumes following FY2025 overperformance drove FY2026 full-year revenue guidance down to $5.20–$5.35 billion, a roughly 2% year-over-year decline at the midpoint. (Bearish)

Next Year Trends

• Proposed federal budget reconciliation legislation enacting $911 billion in Medicaid cuts—including new work requirements and federal financing restrictions—threatens to materially reduce state Medicaid program administration contract volumes, which are a core revenue driver for Maximus's U.S. Services segment. (Bearish)
• Maximus raised its FY2026 adjusted EBITDA margin guidance by 20 basis points to approximately 14.2% and lifted adjusted diluted EPS guidance to $8.25–$8.55, signaling that AI- and technology-driven service delivery efficiency is expanding profitability even as top-line revenue contracts. (Bullish)
• A $56.8 billion total sales pipeline as of March 31, 2026—including $4.55 billion in proposals pending and $699 million in awarded-but-unsigned contracts—positions Maximus for contract award acceleration in the remaining FY2026 quarters as a federal government shutdown delayed award activity expected to clear in subsequent quarters. (Bullish)

Red Flags

No severe red flags identified as of August 2025.