Maximus (MMS) Q4 2024 earnings summary

Executive summary

• FY 2024 revenue rose 8.2% to $5.31B, driven by 8.8%–9% organic growth and high volumes in key U.S. programs, resulting in record adjusted EPS of $6.11 per share.

• Maintained leadership as a government partner, supporting policy priorities and adapting to political transitions, leveraging bipartisan support for core programs.

• Secured significant new contracts, including IRS EDOS ($128M), California Independent Medical Review ($120M), and Department of Defense AI projects.

• Launched Global Capability Center via acquisition, enhancing delivery and innovation, and advanced the Maximus Forward transformation initiative for operational efficiencies.

• Free cash flow reached $401M, supporting debt reduction and dividend payments.

Financial highlights

• FY 2024 consolidated revenue increased 8.2% to $5.31B; organic revenue growth was 8.8%.

• Adjusted EBITDA margin rose to 11.6% from 9.1% prior year; adjusted EPS was $6.11, up from $3.83.

• Net income increased 89.7% year-over-year to $306.9M; diluted EPS up to $4.99.

• Free cash flow reached $401M, nearly 80% growth year-over-year, with a 1.3x conversion to net income.

• Net leverage reduced to 1.4x from 2.2x, with over $100M in debt repaid.

Outlook and guidance

• FY 2025 revenue projected at $5.275B–$5.425B; adjusted EBITDA margin ~11%; adjusted EPS $5.70–$6.00.

• Guidance reflects modest organic growth, with only 2% of revenue from new work not yet won due to anticipated procurement delays.

• Free cash flow expected between $345M–$375M; CapEx to trend toward 1.5% of revenue.

• U.S. Federal Services margin expected near 12%, U.S. Services at 11%, and Outside the U.S. at 1–3%.

• Weighted average shares outstanding expected at ~61M for FY25.