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FOR IMMEDIATE RELEASECONTACT:James Francis, VP - IR
Jessica Batt, VP - IR & ESG
Date: May 8, 2024IR@maximus.com

Maximus Reports Fiscal Year 2024 Second Quarter Results
Strong demand drives highest post-pandemic margins and further raise to FY24 guidance
(Tysons, Va. - May 8, 2024) - Maximus (NYSE: MMS), a leading provider of government services worldwide, reported financial results for the three and six months ended March 31, 2024.
Highlights for the second quarter of fiscal year 2024 include:
•Revenue increased 11.7% to $1.35 billion, compared to $1.21 billion for the prior year period. Organic growth was 12.6% and driven by expanded programs in the domestic segments and resumed Medicaid-related activities.
•Diluted earnings per share were $1.31, and adjusted diluted earnings per share were $1.57, compared to $0.52 and $0.81, respectively, for the prior year period.
•The company is raising guidance for fiscal year 2024. At the midpoints, revenue is increasing by $75 million, adjusted operating income guidance is increasing by more than $34 million, adjusted diluted earnings per share by $0.40, and free cash flow by $25 million.
•Net debt to EBITDA ratio improved to 1.7 times at March 31, 2024, compared to 2.1 times in the prior quarter.
•A quarterly cash dividend of $0.30 per share is payable on May 31, 2024, to shareholders of record on May 15, 2024.
"For the second consecutive quarter, we are able to raise guidance that reflects our confidence in the earnings power of the business," said Bruce Caswell, President and Chief Executive Officer. "We are focused on driving future growth through continued, excellent operational execution coupled with innovative technology solutions to drive long-term shareholder value."

Second Quarter Results
Revenue for the second quarter of fiscal year 2024 increased 11.7% to $1.35 billion, compared to $1.21 billion for the prior year period. Organic growth was 12.6%, driven by a combination of expanded programs in the U.S. Federal Services Segment, such as the Veterans Affairs (VA) Medical Disability Exams (MDE) contracts, as well as expanded and resumed programs in the U.S. Services Segment, such as assessment work and Medicaid-related programs, respectively.
For the second quarter of fiscal year 2024, operating margin was 9.5% and the adjusted operating margin was 11.1%. This compares to margins of 5.2% and 7.2%, respectively, for the prior year period. Diluted earnings per share were $1.31 and adjusted diluted earnings per share were $1.57. This compares to $0.52 and $0.81, respectively, for the prior year period. The strength of this quarter's earnings came from an aggregation of multiple areas across the domestic segments.
U.S. Federal Services Segment
U.S. Federal Services Segment revenue for the second quarter of fiscal year 2024 increased 20.1% to $701.7 million, compared to $584.1 million reported for the prior year period. All growth was organic and driven by volume growth on expanded programs, including the VA MDE contracts, which comprise the Veterans Evaluation Services (VES) business.
The segment operating margin for the second quarter of fiscal year 2024 was 11.9%, compared to 8.2% reported for the prior year, and results this quarter slightly beat expectations due primarily to the VA MDE contracts exceeding their production goal. The full-year fiscal 2024 margin for the U.S. Federal Services Segment is now expected to be approximately 12%.


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U.S. Services Segment
U.S. Services Segment revenue for the second quarter of fiscal year 2024 increased 8.1% to $486.1 million, compared to $449.7 million reported in the prior year period. All growth was organic and driven by expanded programs, including assessment services and revenue from resumed programs related to the commencement of Medicaid redeterminations.
The segment operating margin for the second quarter of fiscal year 2024 was 14.0%, compared to 9.5% reported for the prior year, which had been impacted by the pause to Medicaid redeterminations. Results this quarter are anticipated to represent a peak for segment profitability and tied to extra volumes from performing redetermination work. The U.S. Services Segment's margin outlook across all periods in fiscal year 2024 has improved, with a full-year margin expected of approximately 13% and in the middle of the segment's 11% to 14% long-term operating margin target.
Outside the U.S. Segment
Outside the U.S. Segment revenue for the second quarter of fiscal year 2024 decreased 7.2% to $160.5 million, compared to $173.1 million reported in the prior year period. The divestiture of businesses in the prior fiscal year reduced revenue by 8.2%, currency was a benefit of 1.8%, and organic growth was flat.
The segment realized an operating profit of $0.7 million for the second quarter of fiscal year 2024, compared to an operating loss of $3.7 million in the prior year period. With some recent stability in the segment, the company remains focused this fiscal year on shaping the Outside the U.S. Segment to be aligned strategically with the rest of the business and deliver consistent profitability.
Sales and Pipeline
Year-to-date signed contract awards at March 31, 2024, totaled $568 million, and contracts pending (awarded but unsigned) totaled $797 million. The book-to-bill ratio at March 31, 2024, was 1.1x calculated on a trailing twelve-month basis.
The sales pipeline at March 31, 2024, totaled $37.8 billion, comprised of approximately $1.31 billion in proposals pending, $987 million in proposals in preparation, and $35.5 billion in opportunities tracking. New work opportunities represent approximately 75% of the total sales pipeline.
Balance Sheet and Cash Flows
At March 31, 2024, cash and cash equivalents totaled $77.4 million, and gross debt was $1.22 billion. The ratio of debt, net of allowed cash, to EBITDA for the quarter ended March 31, 2024, as calculated in accordance with the company's credit agreement, was 1.7x. This compares to 2.1x at December 31, 2023.
For the second quarter of fiscal year 2024, cash provided by operating activities totaled $130.5 million, and free cash flow was $105.2 million. DSO at March 31, 2024, were 62 days, compared with 59 days at December 31, 2023.
Subsequent to March 31, 2024, we purchased approximately 242,000 shares at a cost of $19.3 million.
On April 5, 2024, our Board of Directors declared a quarterly cash dividend of $0.30 for each share of our common stock outstanding. The dividend is payable on May 31, 2024, to shareholders of record on May 15, 2024.
Raising FY24 Guidance
Maximus is raising fiscal year 2024 guidance following second quarter results and an improved outlook for the remainder of the fiscal year. Revenue is now expected to range between $5.15 billion and $5.25 billion, representing an increase of $75 million from prior guidance at the midpoint.
Adjusted operating income is now expected to range between $540 million and $560 million, representing an increase of more than $34 million from prior guidance. Adjusted operating income excludes an estimated $89 million of expense for amortization of intangible assets and $1 million of divestiture-related charges.

Adjusted diluted earnings per share is now expected to range between $5.65 and $5.85 per share, representing an increase of $0.40 per share from prior guidance.
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Free cash flow is now expected to range between $330 million and $370 million as a result of the increased earnings guidance. Interest expense is estimated to be $77 million for fiscal year 2024.
Conference Call and Webcast Information
Maximus will host a conference call tomorrow, May 9, 2024, 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
As a leading strategic partner to governments across the globe, Maximus helps improve the delivery of public services amid complex technology, health, economic, environmental, and social challenges. With a deep understanding of program service delivery, acute insights that achieve operational excellence, and an extensive awareness of the needs of the people being served, our employees advance the critical missions of our partners. Maximus delivers innovative business process management, impactful consulting services, and technology solutions that provide improved outcomes for the public and higher levels of productivity and efficiency of government-sponsored programs. For more information, visit maximus.com.
Non-GAAP Measures and Risk Factors
This release refers to non-GAAP measures and other indicators, including organic growth, free cash flow, operating income and EPS adjusted for amortization of intangible assets and divestiture-related charges, adjusted EBITDA, and other non-GAAP measures.
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 earnings presentation and 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, operating income, 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, 2023, which was filed with the Securities and Exchange Commission (SEC) on November 16, 2023. 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, 2024March 31, 2023March 31, 2024March 31, 2023
(in thousands, except per share amounts)
Revenue$1,348,357 $1,206,852 $2,675,398 $2,456,098 
Cost of revenue1,030,768 978,249 2,057,755 1,982,748 
Gross profit317,589 228,603 617,643 473,350 
Selling, general, and administrative expenses168,454 142,448 337,649 288,900 
Amortization of intangible assets21,641 23,650 44,990 47,168 
Operating income127,494 62,505 235,004 137,282 
Interest expense20,366 20,999 41,873 42,605 
Other expense/(income), net(822)(818)(334)(1,084)
Income before income taxes107,950 42,324 193,465 95,761 
Provision for income taxes27,440 10,536 48,807 23,978 
Net income$80,510 $31,788 $144,658 $71,783 
Earnings per share:
Basic$1.31 $0.52 $2.36 $1.17 
Diluted$1.31 $0.52 $2.35 $1.17 
Weighted average shares outstanding:
Basic61,371 61,120 61,330 61,119 
Diluted61,622 61,383 61,573 61,265 
Dividends declared per share$0.30 $0.28 $0.60 $0.56 










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Maximus, Inc.
Consolidated Balance Sheets
March 31, 2024September 30, 2023
(unaudited)
(in thousands)
Assets:
Cash and cash equivalents$77,370 $65,405 
Accounts receivable, net916,004 826,873 
Income taxes receivable14,167 16,556 
Prepaid expenses and other current assets110,912 146,632 
Total current assets1,118,453 1,055,466 
Property and equipment, net35,371 38,831 
Capitalized software, net141,943 107,811 
Operating lease right-of-use assets148,413 163,929 
Goodwill1,780,158 1,779,215 
Intangible assets, net676,909 703,648 
Deferred contract costs, net49,102 45,372 
Deferred compensation plan assets51,786 42,919 
Deferred income taxes2,129 2,459 
Other assets36,880 46,147 
Total assets$4,041,144 $3,985,797 
Liabilities and Shareholders' Equity:
Liabilities:
Accounts payable and accrued liabilities$276,199 $282,081 
Accrued compensation and benefits172,601 194,251 
Deferred revenue, current portion76,574 60,477 
Income taxes payable15,792 451 
Long-term debt, current portion88,517 86,844 
Operating lease liabilities, current portion48,470 49,852 
Other current liabilities50,563 49,058 
Total current liabilities728,716 723,014 
Deferred revenue, non-current portion33,374 38,849 
Deferred income taxes192,890 203,898 
Long-term debt, non-current portion1,121,337 1,163,149 
Deferred compensation plan liabilities, non-current portion53,539 46,432 
Operating lease liabilities, non-current portion112,780 129,367 
Other liabilities9,365 13,253 
Total liabilities2,252,001 2,317,962 
Shareholders' equity:
Common stock, no par value; 100,000 shares authorized; 61,037 and 60,998 shares issued and outstanding as of March 31, 2024, and September 30, 2023, respectively594,387 577,898 
Accumulated other comprehensive loss(30,149)(27,615)
Retained earnings1,224,905 1,117,552 
Total shareholders' equity1,789,143 1,667,835 
Total liabilities and shareholders' equity$4,041,144 $3,985,797 
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Maximus, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months EndedFor the Six Months Ended
March 31, 2024March 31, 2023March 31, 2024March 31, 2023
(in thousands)
Cash flows from operating activities:
Net income$80,510 $31,788 $144,658 $71,783 
Adjustments to reconcile net income to cash flows from operations:
Depreciation and amortization of property, equipment, and capitalized software8,205 14,041 16,616 26,321 
Amortization of intangible assets21,641 23,650 44,990 47,168 
Amortization of debt issuance costs and debt discount601 601 1,202 1,635 
Deferred income taxes(6,150)(37)(8,315)(1,368)
Stock compensation expense8,697 9,540 18,124 13,943 
Loss on sale of businesses— 883 1,018 883 
Change in assets and liabilities, net of effects of business combinations:
Accounts receivable(57,006)263,278 (92,385)62,529 
Prepaid expenses and other current assets9,876 2,788 19,932 13,412 
Deferred contract costs(2,712)1,596 (3,600)583 
Accounts payable and accrued liabilities9,242 (10,003)(6,301)(6,361)
Accrued compensation and benefits56,836 39,049 (10,556)(14,222)
Deferred revenue9,828 (33,111)10,705 (18,347)
Income taxes(8,940)(16,043)13,310 (6,578)
Operating lease right-of-use assets and liabilities703 (1,124)(385)(2,072)
Other assets and liabilities(843)(17,200)3,083 (14,272)
Net cash provided by operating activities130,488 309,696 152,096 175,037 
Cash flows from investing activities:
Purchases of property and equipment and capitalized software(25,300)(18,054)(47,547)(33,751)
Asset acquisition(18,006)— (18,006)— 
Proceeds from divestitures1,263 9,124 3,078 9,124 
Net cash used in investing activities(42,043)(8,930)(62,475)(24,627)
Cash flows from financing activities:
Cash dividends paid to Maximus shareholders(18,309)(17,016)(36,608)(34,033)
Tax withholding related to RSU vesting— — (13,455)(8,475)
Payments for contingent consideration(5,349)(2,626)(8,168)(4,041)
Proceeds from borrowings195,000 193,696 423,409 462,398 
Principal payments for debt(298,129)(469,105)(464,787)(530,460)
Cash-collateralized escrow liabilities3,918 (47,587)5,122 (57,060)
Net cash used in financing activities(122,869)(342,638)(94,487)(171,671)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(731)765 1,115 3,186 
Net change in cash, cash equivalents, and restricted cash(35,155)(41,107)(3,751)(18,075)
Cash, cash equivalents, and restricted cash, beginning of period153,495 159,827 122,091 136,795 
Cash, cash equivalents, and restricted cash, end of period$118,340 $118,720 $118,340 $118,720 
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Maximus, Inc.
Consolidated Results of Operations by Segment
(Unaudited)
 For the Three Months EndedFor the Six Months Ended
March 31, 2024March 31, 2023March 31, 2024March 31, 2023
Amount% (1)Amount% (1)Amount% (1)Amount% (1)
(dollars in thousands)
Revenue:
U.S. Federal Services$701,702 $584,075 $1,378,780 $1,202,242 
U.S. Services486,115 449,703 975,960 889,181 
Outside the U.S.160,540 173,074 320,658 364,675 
Revenue$1,348,357 $1,206,852 $2,675,398 $2,456,098 
Gross profit:
U.S. Federal Services$163,337 23.3 %$122,874 21.0 %$319,999 23.2 %$245,568 20.4 %
U.S. Services130,122 26.8 %86,016 19.1 %248,485 25.5 %169,614 19.1 %
Outside the U.S.24,130 15.0 %19,713 11.4 %49,159 15.3 %58,168 16.0 %
Gross profit$317,589 23.6 %$228,603 18.9 %$617,643 23.1 %$473,350 19.3 %
Selling, general, and administrative expenses:
U.S. Federal Services$79,867 11.4 %$75,050 12.8 %$167,722 12.2 %$146,699 12.2 %
U.S. Services62,201 12.8 %43,415 9.7 %114,501 11.7 %89,257 10.0 %
Outside the U.S.23,460 14.6 %23,425 13.5 %48,601 15.2 %51,814 14.2 %
Divestiture-related charges (2)— NM883 NM1,018 NM883 NM
Other (3)2,926 NM(325)NM5,807 NM247 NM
Selling, general, and administrative expenses$168,454 12.5 %$142,448 11.8 %$337,649 12.6 %$288,900 11.8 %
Operating income/(loss):
U.S. Federal Services$83,470 11.9 %$47,824 8.2 %$152,277 11.0 %$98,869 8.2 %
U.S. Services67,921 14.0 %42,601 9.5 %133,984 13.7 %80,357 9.0 %
Outside the U.S.670 0.4 %(3,712)(2.1)%558 0.2 %6,354 1.7 %
Amortization of intangible assets(21,641)NM(23,650)NM(44,990)NM(47,168)NM
Divestiture-related charges (2)— NM(883)NM(1,018)NM(883)NM
Other (3)(2,926)NM325 NM(5,807)NM(247)NM
Operating income$127,494 9.5 %$62,505 5.2 %$235,004 8.8 %$137,282 5.6 %
        
(1)Percentage of respective segment revenue. Percentages not considered meaningful are marked "NM."
(2)We have sold businesses in both fiscal years 2023 and 2024.
(3)Other expenses includes credits and 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 Flows - Non-GAAP
(Unaudited)
For the Three Months EndedFor the Six Months Ended
March 31, 2024March 31, 2023March 31, 2024March 31, 2023
(in thousands)
Net cash provided by operating activities$130,488 $309,696 $152,096 $175,037 
Purchases of property and equipment and capitalized software(25,300)(18,054)(47,547)(33,751)
Free cash flow (Non-GAAP)$105,188 $291,642 $104,549 $141,286 


Maximus, Inc.
Non-GAAP Adjusted Results Excluding Amortization of Intangible Assets and Divestiture-Related Charges
(Unaudited)
For the Three Months EndedFor the Six Months Ended
March 31, 2024March 31, 2023March 31, 2024March 31, 2023
(dollars in thousands, except per share data)
Operating income$127,494 $62,505 $235,004 $137,282 
Add back: Amortization of intangible assets21,641 23,650 44,990 47,168 
Add back: Divestiture-related charges— 883 1,018 883 
Adjusted operating income excluding amortization of intangible assets and divestiture-related charges (Non-GAAP)$149,135 $87,038 $281,012 $185,333 
Adjusted operating income margin excluding amortization of intangible assets and divestiture-related charges (Non-GAAP)11.1 %7.2 %10.5 %7.5 %
Net income$80,510 $31,788 $144,658 $71,783 
Add back: Amortization of intangible assets, net of tax15,949 17,446 33,158 34,806 
Add back: Divestiture-related charges— 883 1,018 883 
Adjusted net income excluding amortization of intangible assets and divestiture-related charges (Non-GAAP)$96,459 $50,117 $178,834 $107,472 
Diluted earnings per share$1.31 $0.52 $2.35 $1.17 
Add back: Effect of amortization of intangible assets on diluted earnings per share0.26 0.28 0.53 0.57 
Add back: Effect of divestiture-related charges on diluted earnings per share— 0.01 0.02 0.01 
Adjusted diluted earnings per share excluding amortization of intangible assets and divestiture-related charges (Non-GAAP)$1.57 $0.81 $2.90 $1.75 
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