Maximus Reports Strong Financial Results for Q3 FY2024 Raises FY24 Guidance
Intellectia.AI Updated: 2024-08-08
Maximus Reports Strong Financial Results for Q3 FY2024, Raises FY24 Guidance
Maximus (NYSE:MMS), a prominent provider of government services, has released its financial results for the third quarter of fiscal year 2024, ending June 30, 2024.
Key Financial Metrics (Q3 FY2024)
| Metric | Q3 FY2024 | Q3 FY2023 | YoY Change | Q2 FY2024 | QoQ Change | Consensus Estimates |
|---|---|---|---|---|---|---|
| Revenue | $1.31B | $1.19B | +10.6% | $1.30B | +0.77% | $1.29B |
| Diluted EPS | $1.46 | $0.50 | +192% | $1.40 | +4.29% | $1.34 |
| Adjusted Diluted EPS | $1.74 | $0.78 | +123% | $1.62 | +7.41% | Not Provided |
Interpretations:
Maximus showcased impressive financial performance with significant year-over-year growth in both revenue and earnings per share. Total revenue of $1.31 billion for Q3 FY2024 exceeded the consensus estimate of $1.29 billion, depicting a growth of 10.6% YoY. Diluted EPS of $1.46 surpassed the consensus estimate of $1.34 by 8.96% and represented a substantial 192% increase from the prior year, driven largely by the strong performance in the U.S. Federal Services Segment.
Segment Revenue Performance (Q3 FY2024)
| Segment | Q3 FY2024 Revenue | Q3 FY2023 Revenue | YoY Change | Comments |
|---|---|---|---|---|
| U.S. Federal Services | $683.3M | $584.0M | +17.0% | Driven by volume growth in clinical programs. |
| U.S. Services | $472.3M | $449.1M | +5.2% | Strong performance in Medicaid-related portfolio. |
| Outside the U.S. | $159.3M | $155.7M | +2.3% | Growth mainly driven by operations in the UK. |
Interpretations:
All segments experienced growth, with the U.S. Federal Services Segment leading at 17% YoY growth due to robust volume increases in clinical programs. The U.S. Services and Outside the U.S. segments showed steady growth, supported by strong Medicaid-related performance and successful operations in the UK respectively.
Key Operational Data
| Key Data | Value |
|---|---|
| Net debt to EBITDA ratio | 1.5x |
| Cash and Cash Equivalents | $103M |
| Gross Debt | $1.16B |
| Free Cash Flow | $165M |
| DSO | 59 days |
| Shares Purchased | 611,000 shares at $82.79 each |
Comments from Company Officers
Bruce Caswell, President and CEO, attributed the robust performance to favorable market conditions and exceptional operational execution by the team, resulting in Maximus significantly surpassing expectations and maintaining strong business momentum.
Dividends and Share Repo Program
Maximus declared a quarterly cash dividend of $0.30 per share, payable on August 31, 2024, to shareholders of record on August 15, 2024. The company also expanded its share repurchase program to up to $200 million.
Forward Guidance
Following the strong third quarter results, Maximus has raised its fiscal year 2024 guidance: - Revenue is now expected to be between $5.25 billion and $5.35 billion. - Adjusted operating income is anticipated to range from $570 million to $590 million. - Adjusted diluted EPS is projected to be between $6.00 and $6.20. - Free cash flow is forecasted to range between $350 million and $380 million.
Stock Price Movement
After the earnings release, Maximus’s stock price saw a slight decrease of approximately 0.75%.
Conclusion
Maximus has demonstrated a strong financial performance in Q3 FY2024 with robust revenue and earnings growth, driven primarily by the U.S. Federal Services Segment. The company’s strategic initiatives and operational efficiency have enabled it to surpass market expectations and adjust its guidance upward for FY2024. Despite a marginal dip in stock price, Maximus's enhanced financial outlook and continued operational success signify a positive trajectory for the company.
