Maximus (MMS) Q2 2026 earnings summary

Executive summary

• Q2 FY26 revenue was $1.31 billion, down 4.1% year-over-year, with net income of $98.1 million, up 1.5% from Q2 2025, and profitability driven by technology and AI-enabled efficiency gains.

• Adjusted EBITDA margin improved to 14.4% from 13.7% year-over-year; adjusted diluted EPS rose to $2.07 from $2.01, with two unusual items (a $6.9 million impairment and $4.2 million R&D tax benefit) offsetting each other.

• Raised FY26 adjusted EBITDA margin guidance to 14.2% and adjusted diluted EPS guidance to $8.25–$8.55.

• Announced a $400 million share repurchase program and declared a $0.33 per share quarterly dividend.

• Technology investments, especially in AI and automation, are delivering measurable bottom-line returns and operational efficiencies.

Financial highlights

• Q2 FY26 revenue: $1.31 billion (down from $1.36 billion prior year); six-month revenue: $2.65 billion (down from $2.76 billion prior year).

• Q2 FY26 net income: $98.1 million; diluted EPS: $1.80; adjusted diluted EPS: $2.07.

• Q2 FY26 adjusted EBITDA: $188.0 million (14.4% margin); operating income: $148.5 million (11.4% margin).

• Q2 FY26 free cash flow: $179 million; six-month free cash flow: $(71.6) million, reflecting working capital timing.

• Total debt at quarter end was $1.55 billion; net leverage ratio at 1.8x, below target range of 2–3x.

Outlook and guidance

• FY26 revenue guidance maintained at $5.2–$5.35 billion; adjusted EBITDA margin guidance raised to 14.2%; adjusted diluted EPS guidance increased to $8.25–$8.55.

• Free cash flow guidance reiterated at $450–$500 million.

• Effective tax rate for FY26 projected between 24% and 25%.

• U.S. Federal Services margin guide raised to ~17.5%; U.S. Services to ~10.0%; Outside U.S. expected to be roughly break even.

• DSO expected to finish FY26 below 70 days, improving cash flow in H2.