Maximus (MMS) Q4 2024 earnings summary

Executive summary

• Achieved organic revenue growth of 8.8% and record adjusted EPS of $6.11 per share for FY 2024, exceeding forecasts and demonstrating strong execution across all segments.

• Delivered free cash flow of $401M, supporting debt reduction and a 1.4x leverage ratio.

• Maintained leadership as a government partner, supporting policy priorities and adapting to political transitions.

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

• Quarterly dividend of $0.30 per share declared.

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% the prior year; Q4 margin was 11.0%.

• Adjusted EPS was $6.11, up from $3.83 in FY 2023, aided by volume growth and margin expansion.

• Free cash flow reached $401M, up from $224M in the prior year.

• 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 EPS $5.70–$6.00; adjusted EBITDA margin ~11%.

• Guidance reflects modest organic growth, with excess FY 2024 volumes not expected to recur.

• 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%, Outside U.S. at 1–3%.

• Only 2% of FY 2025 revenue guidance is from new work not yet won, reflecting prudence amid potential procurement delays.