Maximus : Q2 FY26 Financial Results Presentation

Published: 2026-05-07 06:43:12 ET MMS

Published on 05/07/2026 at 06:43 am EDT

Fiscal 2026 Second Quarter Earnings Call

Chief Financial Officer

May 7, 2026

Total Company Results - Second Quarter of FY26

($ in millions, except per share data) Q2 FY26 Margin Q2 FY25 Margin % Change

U.S. Federal Services

$ 753.1

$ 777.9

(3.2)%

U.S. Services

415.8

442.4

(6.0)%

Outside the U.S.

137.1

141.5

(3.1)%

Total Revenue

1,306.0

1,361.8

(4.1)%

U.S. Federal Services

132.7

17.6%

119.0

15.3%

11.5 %

U.S. Services

38.6

9.3%

53.8

12.2%

(28.3)%

Outside the U.S.

(3.1)

-2.3%

4.8

3.4%

Intangibles amortization

(20.3)

(23.0)

(11.7)%

Divestiture-related gains/charges

(1.0)

Other

0.6

(0.6)

Total Operating Income

148.5

11.4%

153.0

11.2%

(2.9)%

Intangibles amortization

20.3

23.0

(11.7)%

Divestiture-related gains/charges

1.0

Depreciation & amortization (PP&E/CapSW)

12.3

9.4

30.6 %

Capitalized software impairment charge

6.9

Adjusted EBITDA (Non-GAAP)

$ 188.0

14.4%

$ 186.4

13.7%

0.9 %

Interest expense

$ 22.1

$ 21.5

3.0 %

Effective tax rate

22.5 %

27.1 %

Net income

$ 98.1

$ 96.6

1.5 %

Diluted EPS

1.80

1.69

6.5 %

Intangibles amortization per share

0.27

0.30

(10.0)%

Divestiture-related gains/charges per share

0.02

This quarter reflected strong execution, sequential profitability improvement, and growing technology-driven returns

Q2 FY26 revenue was consistent with the full-year FY26 outlook provided in February, which remains unchanged

Q2 FY25 contained elevated natural disaster support work and temporary clinical volume surges in both domestic segments

Adjusted EBITDA margin was 14.4%, compared to 13.7% in the prior year period, driven by efficiencies enabled by automation, including AI tools

Adjusted diluted EPS was $2.07, compared to $2.01 for the prior year period

Adjusted Diluted EPS (Non-GAAP) $ 2.07 $ 2.01 3.0 %

Two unusual items in Q2 FY26, a non-cash impairment charge ($0.09 per share) and a discrete R&D tax benefit ($0.08 per share), roughly offset and had no impact on adjusted EBITDA

3 | Maximus: Q2 FY26 Earnings Presentation

Segment Results - Second Quarter of FY26

U.S. Federal Services Segment

Revenue of $753 million, as anticipated, reflects the absence of elevated natural disaster support work performed in the prior year period

Excluding natural disaster support, the segment would have grown 1.5%

Segment operating margin of 17.6% delivers on our commitment to technology-enabled programs that drive scalability, underpinning our decision to raise segment guidance again for FY26

($ in millions)

Q2 FY26

Q2 FY25

% Change

Revenue

$753.1

$777.9

(3.2)%

Operating Income

$132.7

$119.0

11.5 %

Operating Margin %

17.6 %

15.3%

U.S. Services Segment

Revenue of $416 million is tracking to anticipated positive organic growth in Q4 FY26

Segment operating margin of 9.3%, impacted by a $6.9 million non-cash impairment charge

Excluding the charge, the segment margin would have been 10.9%, representing expected, sequential improvement from the Q1 FY26 segment margin

($ in millions)

Q2 FY26

Q2 FY25

% Change

Revenue

$415.8

$442.4

(6.0) %

Operating Income

$38.6

$53.8

(28.3) %

Operating Margin %

9.3 %

12.2 %

Outside the U.S. Segment

Revenue of $137 million derived predominantly from the United Kingdom, with Canada and the Gulf Region comprising the balance, following our reshaping efforts

The segment recorded an operating loss of $3.1 million in the quarter

We continue to track a focused set of pipeline opportunities in these remaining geographies while prioritizing growth and margin improvement

($ in millions)

Q2 FY26

Q2 FY25

% Change

Revenue

$137.1

$141.5

(3.1) %

Operating Income

$(3.1)

$4.8

Operating Margin %

(2.3)%

3.4%

4 | Maximus: Q2 FY26 Earnings Presentation

Cash Flows and Balance Sheet

Cash Flows & DSO

$ in millions

Q2 FY26

FY26 Guidance

Cash provided by operating activities

$ 189.5

Purchases of property and equipment and capitalized software costs

(10.5)

Free cash flow (Non-GAAP)

$ 179.0

$450M - $500M

We expect cash generation to improve through H2 FY26 and reaffirm full-year free cash flow guidance

DSO remained elevated at 78 days due to administrative delays at a major federal customer. Collections are expected to accelerate in H2 FY26 with DSO projected to finish below 70 days at September 30, 2026

Debt, Repurchases & Capital Allocation

At March 31, 2026, total debt was $1.55 billion, and the ratio of debt, net of allowed cash, to consolidated EBITDA on a TTM basis, as calculated in accordance with our credit agreement, remains at 1.8x and below our stated target leverage ratio range of 2 to 3x

During the second quarter, we repurchased approximately 1.4 million shares totaling $111 million and, subsequent to quarter end through May 1st, we repurchased an additional 0.6 million shares totaling $40 million

The Board approved a share repurchase program refresh, authorizing up to an aggregate of $400 million, effective May 11, 2026

In the near term, our priority is opportunistic share repurchases when we believe our share price does not reflect the intrinsic value of the business

Amidst market conditions that we believe are favorable to share repurchases, we continue to pursue value-accretive M&A that enhances capabilities and adds and expands customer relationships within our 2 to 3x target net debt range

5 | Maximus: Q2 FY26 Earnings Presentation

Updated Fiscal Year 2026 Guidance

Fiscal 2026 Guidance Updated Previous

Raising FY26 adjusted EBITDA margin and

Revenue

$5.2B - $5.35B

Adjusted EBITDA margin Approx. 14.2% Approx. 14.0%

(no change)

$5.2B - $5.35B

adjusted diluted EPS for the second consecutive quarter while reiterating revenue and free cash flow guidance

Adjusted diluted EPS $8.25 - $8.55 $8.05 - $8.35

Free cash flow

$450M - $500M

(no change)

$450M - $500M

FY26 Guidance Reconciliation - Non-GAAP

($ in millions except per share items)

Low End

High End

Net Income

$ 394

$ 411

Add: interest expense / other (income)

Add: provision for income taxes

128

133

Add: amortization of intangible assets

Add: depreciation & amortization of PP&E and CapSW

Add: capitalized software impairment charges

Add: divestiture-related gains

(9)

Adjusted EBITDA

$ 739

$ 761

Revenue

$ 5,200

$ 5,350

Adjusted EBITDA margin

14.2%

Diluted EPS

$ 7.27

$ 7.57

Add: effect of amortization of intangible assets on diluted EPS

1.10

Add: effect of divestiture-related gains on diluted EPS (0.12) (0.12)

Adjusted EBITDA margin guidance increases by 20 basis points to ~14.2%, and adjusted diluted EPS guidance increases by $0.20 to

$8.25 - $8.55 per share

FY26 segment margin commentary:

U.S. Federal Services Segment: ~17.5%

U.S. Services Segment: ~10.0%

Outside the U.S. Segment: breakeven

Other FY26 updated assumptions:

Adjusted diluted EPS

Cash flows from operating activities

$ 8.25 $

$ 485 $

8.55

535

Interest expense: ~$84 million

Remove: purchases of property and equipment and capitalized software costs (35) (35)

Full-year effective income tax rate: 24% - 25%

Free cash flow

6 | Maximus: Q2 FY26 Earnings Presentation

$ 450 $

500

Fiscal 2026 Second Quarter Earnings Call

President & Chief Executive Officer

May 7, 2026

Combating Fraud: Technology-Enabled Program Integrity

Traditional Model

Government customers are shifting from "pay-and-chase" models to upfront prevention, prioritizing integrity, efficiency, and public trust

Pay

Detect

Recover

Maximus embeds program integrity directly into operations using analytics, automation, data matching, and AI-supported workflows

Reactive

Advanced data integration is designed to enable faster, more accurate prevention of issues like enrollment errors before they occur

Identify

Validate

Prevent

Maximus Model

As a trusted partner, Maximus operationalizes policy intent into practical, technology-enabled solutions that strengthen program integrity and reinforce public trust

Predictive

Insights from tens of millions of annual citizen interactions inform data-driven solutions that help eliminate friction, prevent fraud, and enhance program performance

8 | Maximus: Q2 FY26 Earnings Presentation

Accelerating AI

TXM platform recognized by a federal customer as "the most sophisticated AI deployment they have seen in a government contact center," which is designed to address a multi-billion-dollar market

Generative and probabilistic AI is automating nearly half of high-volume dispute resolution workflows, freeing staff to focus on outcome accuracy and more complex cases

99 | Maximus: Q2 FY26 Earnings Presentation

Procurement Updates, Awards, and Pipeline

Adjacent opportunities: our Accuracy Assistant demos for SNAP payment error rate support are impressing customers, and renewed demand for unemployment insurance administration expands near-term pipeline

10 | Maximus: Q2 FY26 Earnings Presentation

New Awards (YTD)

March 31, 2026

Signed Contracts

$913 million

Unsigned Contracts

$322 million

Book-to-Bill ratio (TTM)

0.5x

Book-to-Bill ratio (Q2 FY26)

0.5x

$56.8B

59%

New work

Total pipeline

58%

U.S. Federal Services Segment

of sales

opportunities

Comprised of

Proposals pending

Proposals in preparation

Opportunities tracking

| Maximus: Q2 FY26 Earnings Presentation

Disclaimer

Maximus Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 10:42 UTC.