Maximus Q3 Revenue Misses, But EPS Beats; Guidance Cut on Federal Contract Modification

summarizeSummary

Maximus Q3 revenue fell 5% to $1.28B, missing estimates, but adjusted EPS of $2.22 beat. Full-year earnings guidance was cut due to a temporary federal contract modification, overshadowing the beat.

check_boxKey Events · Earnings and Guidance · MMS

• Revenue Miss, EPS Beat

  Q3 revenue of $1.28B missed the $1.33B consensus, down 5% YoY. Adjusted diluted EPS of $2.22 beat by $0.06, driven by efficiency initiatives.

• Guidance Cut on Contract Modification

  Full-year adjusted diluted EPS guidance lowered to $7.90-$8.20 from prior implied ~$8.50 midpoint, due to a temporary customer-directed contractual modification on a major federal program effective July 1, 2026.

• Segment Margin Impact

  U.S. Federal Services segment operating margin expected to decline to 16.5%-17.0% for FY2026 from 18.6% in Q3, reflecting the contract modification's profitability impact.

• Share Repurchases and Dividend

  Repurchased 0.75M shares for $50.4M in Q3; $400M authorization remains. Declared quarterly dividend of $0.33 per share, payable August 31, 2026.

auto_awesomeAnalysis · MMS · Trade & Services

Maximus reported a 5% revenue decline to $1.28B, missing the $1.33B consensus, driven by lower disaster and clinical volumes. Adjusted EPS of $2.22 beat by $0.06, but the company cut full-year adjusted EPS guidance to $7.90-$8.20 from a prior implied ~$8.50 midpoint due to a temporary customer-directed contractual modification on a major federal program effective July 1. This modification reduces profitability expectations for the remainder of FY2026, with U.S. Federal Services segment operating margin now seen at 16.5%-17.0% vs. 18.6% in Q3. The stock may react negatively to the guidance cut despite the EPS beat, as the contract change introduces uncertainty into a key profit driver. The company also repurchased $50.4M in shares and declared a $0.33 dividend, signaling confidence in its financial position.