Maximus 2025 Q3 Earnings Strong Earnings Growth Despite Revenue Miss

Maximus (MMS) reported its fiscal 2025 Q3 earnings on August 7, 2025. The company delivered stronger-than-expected earnings, with net income and EPS rising significantly, while revenue grew modestly. The report also included a raised full-year revenue guidance, reflecting confidence in future performance.

Maximus (MMS) reported its fiscal 2025 Q3 earnings on August 7, 2025. The company delivered a modest 2.5% revenue increase to $1.35 billion, while earnings surged, with net income rising 18.1% and EPS growing 27.2%. The firm also raised full-year 2025 revenue guidance, indicating improved confidence in its performance.

Revenue
Maximus reported total revenue of $1.35 billion in Q3 2025, a 2.5% increase from $1.31 billion in the same period last year. The U.S. Federal Services segment led the way with $761.17 million in revenue, driven by strong performance in federal contracts. The U.S. Services segment contributed $439.82 million, showing steady demand for domestic services. Internationally, the company generated $147.41 million, reflecting a consistent presence outside the U.S.

Earnings/Net Income
Maximus’s earnings performance was robust, with EPS rising 27.2% to $1.87 in Q3 2025 compared to $1.47 in Q3 2024. The company also reported net income of $105.98 million, up 18.1% from $89.75 million in the prior year. The strong EPS and net income growth underscore the company’s improved profitability and cost efficiency.

Price Action
The stock price of Maximus edged down 1.47% during the latest trading day but showed strong momentum over the week, gaining 6.01%, and 10.30% month-to-date. The share price has remained resilient amid broader market volatility.

Post Earnings Price Action Review
The post-earnings strategy of buying Maximus shares after a revenue beat and holding for 30 days has yielded moderate returns over the past three years, with a compound annual growth rate (CAGR) of 8.75%. Notably, the approach has not experienced any losses, as indicated by a 0.00% maximum drawdown. However, the strategy underperformed the benchmark, delivering a -23.53% excess return. Despite the positive earnings results, the stock has shown higher volatility than the market, as reflected in a Sharpe ratio of 0.36.

CEO Commentary
Bruce Caswell, President and CEO of Maximus, highlighted the company’s resilience and adaptability in navigating legislative and technological changes, particularly in AI. He emphasized the strong performance of the U.S. Federal Services segment and the company’s 50-year history of delivering mission-critical government services. Caswell expressed optimism about Maximus’s long-term positioning, reinforcing confidence in the business model.

Guidance
Maximus raised its full-year 2025 revenue guidance to a range of $5.375 billion to $5.475 billion, with adjusted EBITDA margin expected to remain around 13%. The company is now projecting adjusted diluted earnings per share between $7.35 and $7.55. The U.S. Federal Services segment is expected to deliver a full-year operating margin of approximately 15%, while the U.S. Services segment anticipates a margin of about 10.5%. Year-to-date contract awards totaled $3.37 billion, and the sales pipeline stood at $44.7 billion as of June 30, 2025.

Additional News
On August 6, 2025, it was reported that Maximus secured a $77 million contract with the U.S. Air Force Life Cycle Management Center to provide cybersecurity, cloud-based services, and engineering support over a potential five-and-a-half-year term. The contract reinforces Maximus’s growing role in federal technology and its ability to deliver modernized solutions in critical government domains. Additionally, the company was recently re-awarded the Medical Disability Exam contracts in January 2025, ensuring continued revenue from a core government partnership. While these wins add momentum to Maximus’s investment narrative, particularly in technology modernization and federal contracts, investors are reminded that the company remains vulnerable to policy shifts and budget constraints. Maximus also projects $5.7 billion in revenue and $342.6 million in earnings by 2028, based on 1.7% annual revenue growth and a $42.6 million increase in earnings.