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FOR IMMEDIATE RELEASECONTACT:James Francis 703.251.8526
JamesBFrancis@maximus.com
Date: May 4, 2022Madison West 703.251.8443
MadisonTWest@maximus.com

Maximus Reports Fiscal Year 2022 Second Quarter Results
- Ongoing Delays Represents Headwinds to Current Year While Strong Awards Drive Longer-Term Tailwinds -
(Tysons, Va. - May 4, 2022) - Maximus (NYSE: MMS), a leading provider of government services worldwide, reported financial results for the three and six months ended March 31, 2022.
Highlights for the second quarter of fiscal year 2022 include:
•Revenue increased 22.7% to $1.18 billion driven by expected contributions from the U.S. Federal Services Segment acquisitions and growth from startups ramping in the Outside the U.S. Segment.
•Operating margin was 6.4%, or 8.3% adjusting for amortization of intangible assets. Diluted earnings per share were $0.80, or $1.07 adjusting for amortization of intangible assets.
•The Company is revising earnings guidance for fiscal year 2022, primarily due to the ongoing Public Health Emergency (PHE) and other delays. Revenue guidance remains at $4.5 billion to $4.7 billion, while earnings per share are estimated to range between $3.00 and $3.50 per share, or $4.07 to $4.57 per share adjusting for amortization of intangible assets.
•Year-to-date signed contract awards at March 31, 2022, totaled $1.47 billion and contracts pending (awarded but unsigned) totaled $1.75 billion.
•A quarterly cash dividend of $0.28 per share payable on May 31, 2022, to shareholders of record on May 13, 2022.
"Results for the second quarter reflected our expectations for the business, which continues to face delays that we firmly believe to be temporary. As evidenced by strong bookings year-to-date, the business continues to be well positioned as these policy and COVID-related delays abate," shared Bruce Caswell, President and Chief Executive Officer. "Our new awards, virtually all of which are longer-term in nature, underscore our business model and prove the durability of Maximus and our ability to use strategic M&A to grow market share."
Second Quarter Results
Revenue for the second quarter of fiscal year 2022 increased 22.7% to $1.18 billion, compared to $959.3 million for the prior year period. The $218.0 million increase was principally driven by anticipated contributions from the U.S. Federal Services Segment acquisitions and the U.K. Restart Programme in the Outside the U.S. Segment. These increases were offset by expected declines in short-term COVID-19 response work. Organic revenue for the second quarter of fiscal 2022 remained relatively flat while adjusting for COVID-19 response work, normalized organic growth would be approximately 20% over the prior year period.
Earnings results in the second quarter of fiscal year 2022 reflected expectations for lower earnings caused primarily by delays in our core programs returning to pre-pandemic levels as the COVID-19 response work continues its predicted decline. Operating income totaled $75.3 million yielding an operating margin of 6.4%, or 8.3% adjusting for amortization of intangible assets. This compares to an operating margin of 11.8% for the prior year period, or 12.3% adjusting for amortization. Diluted earnings per share were $0.80, or $1.07 adjusting for amortization as compared to $1.29 per share, or $1.35 adjusting for amortization, for the prior year period.

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U.S. Services Segment
The U.S. Services Segment reported revenue of $398.1 million for the second quarter of fiscal year 2022 compared to $448.2 million reported in the prior year period. The revenue decline was due to the expected reduction in short-term COVID-19 response work. Adjusting for this work, normalized organic growth in the segment would be approximately 25% driven by ramping of new work, including COVID-19 response work that has evolved into longer-term work with new customers gained during the pandemic.
Operating margin for the second quarter of fiscal year 2022 was 11.7% for the segment compared to 18.5% reported for the prior year period. Expected declines in profitable, short term COVID-19 response work while the redetermination activities tied to the PHE remain paused were responsible for the lower comparative margin.
U.S. Federal Services Segment
U.S. Federal Services Segment revenue for the second quarter of fiscal year 2022 increased 74% to $573.3 million, compared to $330.1 million reported for the prior year. Growth was driven by expected contributions from the acquisitions of Attain Federal, VES, and Aidvantage. Organic revenue in the segment for the second quarter of fiscal 2022 increased approximately 9%. Adjusting for COVID-19 response work, normalized organic growth in the segment would be approximately 13% over the prior year period.
The segment's operating margin for the second quarter of fiscal year 2022 was 8.1% as compared to 7.0% reported for the prior year period. Contributions from the Attain Federal and VES acquisitions improved margins in the segment but were tempered by impacts from the Aidvantage business. Costs tied to the transition from the prior provider were higher than anticipated and the continued delay in return to repayment resulted in reduced revenue and lower profitability in the quarter.
Outside the U.S. Segment
Outside the U.S. Segment revenue for the second quarter of fiscal year 2022 increased 13.8% to $206.0 million as compared to $180.9 million reported for the prior year. The primary driver of growth was ramping of the U.K. Restart Programme.
The segment's operating margin for the second quarter of fiscal year 2022 was 2.1%. The margin for the prior year period of 8.3% benefited from above average performance in Australia. Results for this quarter benefited from stronger than anticipated performance on the U.K. Restart Programme which achieved profitability ahead of schedule. This is tempered by future volume reductions on the largest employment services contract in Australia following a rebid process.
Sales and Pipeline
Year-to-date signed contract awards at March 31, 2022, totaled $1.47 billion and contracts pending (awarded but unsigned) totaled $1.75 billion. The awards are comprised of longer periods of performance that reflect solid, long-term drivers in the business.
The sales pipeline at March 31, 2022, was $29.8 billion (comprised of approximately $7.4 billion in proposals pending, $3.6 billion in proposals in preparation, and $18.8 billion in opportunities tracking). New work opportunities represent approximately 55% of the total sales pipeline.
Balance Sheet and Cash Flows
At March 31, 2022, cash and cash equivalents totaled $92.6 million and gross debt was $1.46 billion. The ratio of debt, net of allowed cash, to pro-forma EBITDA for the quarter ended March 31, 2022, as calculated in accordance with our credit agreement, was 2.4x.
For the second quarter of fiscal year 2022, cash flows were strong as anticipated. Cash from operating activities totaled $114.8 million, and free cash flow was $98.2 million.
As of March 31, 2022, Days Sales Outstanding (DSO) were 68 days and within the Company's typical range of 65 to 80 days.
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Purchases of Maximus common stock totaled $24.5 million in the second quarter of fiscal year 2022.
On April 8, 2022, our Board of Directors declared a quarterly cash dividend of $0.28 for each share of our common stock outstanding. The dividend is payable on May 31, 2022, to shareholders of record on May 13, 2022.
Revised Earnings Guidance
The Company is maintaining revenue guidance for fiscal year 2022 with revenue expected to range between $4.5 billion and $4.7 billion. Earnings guidance is revised following further extensions of the ongoing PHE and other delays. Diluted earnings per share (DEPS) is expected to range between $3.00 and $3.50 per share, or between $4.07 and $4.57 per share adjusting for amortization of intangible assets.
The reduction to earnings guidance is comprised of three primary components. First, the PHE has been extended through mid-July, which is approximately $0.30 DEPS of estimated impact for the one-quarter delay. The Company has further lowered the bottom end of earnings guidance to allow for an additional PHE extension through mid-October, representing an additional $0.30 DEPS of estimated impact. Second, further delays on ramping of new work in the U.S. Services and Outside the U.S. segments reduced guidance by an estimated $0.20 DEPS. These delays are believed to be temporary and are partly attributable to ongoing COVID-19 disruptions. Third, the revised expectations for the Australia employment services rebid result in an estimated DEPS reduction of approximately $0.15; the impact is outsized in fiscal year 2022 compared to subsequent periods and includes severance charges in the third quarter.
For fiscal year 2022, cash flows from operations are expected to range between $225 million and $300 million, and free cash flow to range between $175 million and $250 million in fiscal year 2022. The effective income tax rate is expected to range between 24.5% and 25.5%, weighted average shares outstanding to range between 62.0 million and 62.2 million, absent significant share purchase activity, and interest expense to range between $40 million and $42 million for fiscal year 2022.
"While pandemic-related delays continue to constrain our fiscal 2022 earnings, I am encouraged by the potential of our business next fiscal year and beyond once the uncertainties of the pandemic are behind us. In the meantime, we continue to build momentum for the business," Caswell continued. "We believe the long-term macroeconomic drivers favor our business as we continue to be a valuable partner to government with growing capabilities. I look forward to sharing more, including our refreshed 3-to-5-year strategy for Maximus, on our Investor Day on May 24, 2022."
Conference Call and Webcast Information
Maximus will host a conference call tomorrow, May 5, 2022, at 9:00 a.m. (ET). Shareholders are invited to submit questions for management’s consideration by emailing IR@maximus.com up to one hour prior to the call.
The call is open to the public and available by webcast or by phone at:
877.407.8289 (Domestic) / +1.201.689.8341 (International)
For those unable to listen to the live call, a recording of the webcast will be available on investor.maximus.com.
About Maximus
Since 1975, Maximus has operated under its founding mission of Helping Government Serve the People®, enabling citizens around the globe to successfully engage with their governments at all levels and across a variety of health and human services programs. Maximus delivers innovative business process management and technology solutions that contribute to improved outcomes for citizens and higher levels of productivity, accuracy, accountability, and efficiency of government-sponsored programs. With more than 38,000 employees worldwide, Maximus is a proud partner to government agencies in the United States, Australia, Canada, Italy, Saudi Arabia, Singapore, South Korea, Sweden, and the United Kingdom. For more information, visit maximus.com.
Non-GAAP Measures and Risk Factors
This release refers to non-GAAP measures and other indicators, including free cash flow, operating income and EPS adjusted for amortization of intangible assets and other non-GAAP measures.
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A description of these non-GAAP measures, the reasons why we use and present them, and details as to how they are calculated are included in our forthcoming Form 10-Q.
The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operations, revenue growth, or net income as measures of performance. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies.
Statements that are not historical facts, including statements about the Company’s confidence and strategies, and the Company’s expectations about revenues, results of operations, profitability, future contracts, market opportunities, market demand, or acceptance of the Company’s products are forward-looking statements that involve risks and uncertainties.
These risks could cause the Company’s actual results to differ materially from those indicated by such forward-looking statements. A summary of risk factors can be found in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2021, which was filed with the Securities and Exchange Commission (SEC) on November 18, 2021. The Company's SEC reports are accessible on maximus.com.

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Maximus, Inc.
Consolidated Statements of Operations
(Unaudited)
For the Three Months EndedFor the Six Months Ended
March 31, 2022March 31, 2021March 31, 2022March 31, 2021
(in thousands, except per share amounts)
Revenue$1,177,326 $959,280 $2,328,202 $1,904,834 
Cost of revenue948,875 728,622 1,871,596 1,468,121 
Gross profit228,451 230,658 456,606 436,713 
Selling, general, and administrative expenses130,307 112,402 254,528 224,369 
Amortization of intangible assets22,856 5,070 45,261 11,586 
Operating income75,288 113,186 156,817 200,758 
Interest expense(9,438)(756)(19,076)(962)
Other income/(expense), net715 (520)404 (1,295)
Income before income taxes66,565 111,910 138,145 198,501 
Provision for income taxes16,469 31,296 34,719 53,810 
Net income$50,096 $80,614 $103,426 $144,691 
Earnings per share:
Basic$0.81 $1.30 $1.66 $2.33 
Diluted$0.80 $1.29 $1.66 $2.33 
Weighted average shares outstanding:
Basic62,227 62,026 62,256 62,022 
Diluted62,381 62,294 62,409 62,212 
Dividends declared per share$0.28 $0.28 $0.56 $0.56 











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Maximus, Inc.
Consolidated Balance Sheets
March 31, 2022September 30, 2021
(unaudited)
(in thousands)
Assets:
Cash and cash equivalents$92,638 $135,061 
Accounts receivable, net885,685 834,819 
Income taxes receivable14,757 5,413 
Prepaid expenses and other current assets97,420 104,201 
Total current assets1,090,500 1,079,494 
Property and equipment, net57,945 62,627 
Capitalized software, net42,877 42,868 
Operating lease right-of-use assets160,183 179,349 
Goodwill1,780,370 1,774,406 
Intangible assets, net851,564 879,168 
Deferred contract costs, net42,813 36,486 
Deferred compensation plan assets44,773 46,738 
Deferred income taxes2,635 990 
Other assets34,036 16,839 
Total assets$4,107,696 $4,118,965 
Liabilities and Shareholders' Equity:
Liabilities:
Accounts payable and accrued liabilities$302,912 $305,565 
Accrued compensation and benefits142,512 186,809 
Deferred revenue, current portion122,070 98,588 
Income taxes payable3,883 6,782 
Long-term debt, current portion59,911 80,555 
Operating lease liabilities, current portion70,731 76,077 
Other current liabilities51,247 35,057 
Total current liabilities753,266 789,433 
Deferred revenue, non-current portion30,429 35,932 
Deferred income taxes198,848 194,638 
Long-term debt, non-current portion1,387,386 1,429,137 
Deferred compensation plan liabilities, non-current portion44,923 47,405 
Operating lease liabilities, non-current portion106,670 121,771 
Other liabilities31,958 20,320 
Total liabilities2,553,480 2,638,636 
Shareholders' equity:
Common stock, no par value; 100,000 shares authorized; 61,610 and 61,954 shares issued and outstanding as of March 31, 2022 and September 30, 2021, respectively (shares in thousands)
550,228 532,411 
Accumulated other comprehensive loss(26,098)(39,908)
Retained earnings1,030,086 987,826 
Total shareholders' equity1,554,216 1,480,329 
Total liabilities and shareholders' equity$4,107,696 $4,118,965 
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Maximus, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months EndedFor the Six Months Ended
March 31, 2022March 31, 2021March 31, 2022March 31, 2021
(in thousands)
Cash flows from operating activities:
Net income$50,096 $80,614 $103,426 $144,691 
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization of property, equipment and capitalized software9,834 11,018 21,199 22,835 
Amortization of intangible assets22,856 5,070 45,261 11,586 
Amortization of debt issuance costs and debt discount648 — 1,297 — 
Deferred income taxes(3,089)6,653 (3,318)7,951 
Stock compensation expense6,804 7,417 15,052 13,479 
Change in assets and liabilities, net of effects of business combinations
Accounts receivable(34,950)62,408 (49,064)70,217 
Prepaid expenses and other current assets14,884 3,181 9,769 8,074 
Deferred contract costs380 (8,979)(6,431)(9,184)
Accounts payable and accrued liabilities29,405 1,196 (3,047)12,395 
Accrued compensation and benefits28,024 18,921 (28,281)(16,761)
Deferred revenue12,544 7,539 18,473 13,296 
Income taxes(23,836)(13,717)(13,515)3,230 
Operating lease right-of-use assets and liabilities5,077 4,513 (1,293)(414)
Other assets and liabilities(3,899)(4,251)2,331 (1,697)
Net cash provided by operating activities114,778 181,583 111,859 279,698 
Purchases of property and equipment and capitalized software(16,571)(14,490)(22,898)(23,584)
Acquisitions of businesses, net of cash acquired(4)(413,781)(4)(413,940)
Net cash used in investing activities(16,575)(428,271)(22,902)(437,524)
Cash flows from financing activities:
Cash dividends paid to Maximus shareholders(17,312)(17,207)(34,659)(34,414)
Purchases of Maximus common stock(24,464)— (25,843)(3,363)
Tax withholding related to RSU vesting— — (9,673)(9,818)
Proceeds from borrowings140,000 352,310 240,000 500,162 
Principal payments for debt(287,023)(117,650)(303,708)(263,838)
Other— 1 — (2,762)
Net cash (used in)/provided by financing activities(188,799)217,454 (133,883)185,967 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(48)(619)324 3,263 
Net change in cash, cash equivalents, and restricted cash(90,644)(29,853)(44,602)31,404 
Cash, cash equivalents and restricted cash, beginning of period202,612 149,818 156,570 88,561 
Cash, cash equivalents and restricted cash, end of period$111,968 $119,965 $111,968 $119,965 
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Maximus, Inc.
Consolidated Results of Operations by Segment
(Unaudited)
For the Three Months EndedFor the Six Months Ended
March 31, 2022March 31, 2021March 31, 2022March 31, 2021
Amount% (1)Amount% (1)Amount% (1)Amount% (1)
(dollars in thousands)
Revenue:
U.S. Services$398,077 $448,215 $784,494 $833,149 
U.S. Federal Services573,288 330,136 1,155,159 735,381 
Outside the U.S.205,961 180,929 388,549 336,304 
Revenue$1,177,326 $959,280 $2,328,202 $1,904,834 
Gross Profit:
U.S. Services$84,971 21.3 %$119,440 26.6%$174,670 22.3 %$218,442 26.2%
U.S. Federal Services115,153 20.1 %74,133 22.5%241,729 20.9 %156,629 21.3%
Outside the U.S.28,327 13.8 %37,085 20.5%40,207 10.3 %61,642 18.3%
Gross Profit$228,451 19.4 %$230,658 24.0%$456,606 19.6 %$436,713 22.9%
Selling, general, and administrative expenses:
U.S. Services$38,273 9.6 %$36,593 8.2%$73,375 9.4 %$74,049 8.9%
U.S. Federal Services68,949 12.0 %50,978 15.4%133,874 11.6 %103,230 14.0%
Outside the U.S.24,011 11.7 %22,013 12.2%45,351 11.7 %42,045 12.5%
Other (2) (926)NM2,818 NM1,928 NM5,045 NM
Selling, general, and administrative expenses$130,307 11.1 %$112,402 11.7%$254,528 10.9 %$224,369 11.8%
Operating income/(loss):
U.S. Services$46,698 11.7 %$82,847 18.5%$101,295 12.9 %$144,393 17.3%
U.S. Federal Services46,204 8.1 %23,155 7.0%107,855 9.3 %53,399 7.3%
Outside the U.S.4,316 2.1 %15,072 8.3%(5,144)(1.3) %19,597 5.8%
Amortization of intangible assets(22,856)NM(5,070)NM(45,261)NM(11,586)NM
Other (2)926 NM(2,818)NM(1,928)NM(5,045)NM
Operating income/(loss)$75,288 6.4 %$113,186 11.8%$156,817 6.7 %$200,758 10.5%
(1)Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM."
(2)Other selling, general, and administrative expenses includes costs that are not allocated to a particular segment. This includes expenses incurred as part of our acquisitions, as well as potential acquisitions which have not been or may not be completed.        

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Maximus, Inc.
Consolidated Free Cash Flow - Non-GAAP
(Unaudited)
For the Three Months EndedFor the Six Months Ended
March 31, 2022March 31, 2021March 31, 2022March 31, 2021
(in thousands)
Net cash provided by operating activities$114,778 $181,583 $111,859 $279,698 
Purchases of property and equipment and capitalized software costs(16,571)(14,490)(22,898)(23,584)
Free cash flow (Non-GAAP)$98,207 $167,093 $88,961 $256,114 

Maximus, Inc.
Non-GAAP Adjusted Results Excluding Amortization of Intangible Assets
(Unaudited)
For the Three Months EndedFor the Six Months Ended
March 31, 2022March 31, 2021March 31, 2022March 31, 2021
(dollars in thousands, except per share data)
Operating income$75,288 $113,186 $156,817 $200,758 
Add back: Amortization of intangible assets22,856 5,070 45,261 11,586 
Adjusted operating income excluding amortization of intangible assets (Non-GAAP)$98,144 $118,256 $202,078 $212,344 
Adjusted operating income margin excluding amortization of intangible assets (Non-GAAP)8.3 %12.3 %8.7 %11.1 %
Net income$50,096 $80,614 $103,426 $144,691 
Add back: Amortization of intangible assets, net of tax16,884 3,756 33,414 8,578 
Adjusted net income excluding amortization of intangible assets (Non-GAAP)$66,980 $84,370 $136,840 $153,269 
Diluted earnings per share$0.80 $1.29 $1.66 $2.33 
Add back: Effect of amortization of intangible assets on diluted earnings per share0.27 0.06 0.53 0.13 
Adjusted diluted earnings per share excluding amortization of intangible assets (Non-GAAP)$1.07 $1.35 $2.19 $2.46 
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