Maximus 2025 Q4 Earnings Misses Estimates but Projects 3.8% Net Income Growth

Maximus (MMS) reported Q4 2025 earnings on Nov 20, 2025, with results falling short of Wall Street expectations. The company’s revenue remained flat at $1.32 billion year-over-year, missing the $1.34 billion consensus estimate by $20 million. Non-GAAP EPS of $1.62, while up 8.4% from $1.46 in 2024 Q4, trailed the $1.63 estimate by $0.01. Despite the miss, Maximus provided 2026 guidance aligning with its strategic focus on AI and federal growth, projecting revenue of $5.225–$5.425 billion and adjusted EPS of $7.95–$8.25.

Revenue

Maximus’s Q4 revenue totaled $1.32 billion, unchanged from 2024 Q4. Segment performance varied: U.S. Federal Services generated $747.94 million, reflecting 10.8% year-over-year growth, while U.S. Services revenue declined 7.4% to $429.27 million. International operations reported $141.11 million, a 20.4% decline year-over-year, attributed to divestitures.

Earnings/Net Income

Earnings per share rose 14.3% to $1.37 in 2025 Q4, with net income growing 3.8% to $75.29 million. The EPS increase outpaced the 3.8% net income growth, indicating improved operational efficiency. However, the 14.3% EPS growth contrasts with the 3.8% net income expansion, suggesting cautious optimism about profitability.

Post-Earnings Price Action Review

Following the earnings release, Maximus’s stock gained 3.60% in the latest trading day and 1.91% over the past week. However, it fell 6.44% month-to-date. The mixed performance reflects investor skepticism about near-term execution against 2026 guidance, despite the company’s emphasis on AI-driven automation and federal market expansion.

CEO Commentary

CEO Bruce L. Caswell highlighted “3.9% consolidated organic growth” and 0.5% cancellation rates, underscoring strong client retention. Strategic priorities include scaling U.S. federal services, leveraging the One Big Beautiful Bill Act for Medicaid/SNAP compliance, and advancing AI automation. Caswell emphasized Maximus’s transition to a “tech-enabled mission-critical partner,” with AI investments enhancing contract delivery and internal operations.

Guidance

Maximus projected 2026 revenue of $5.225–$5.425 billion (midpoint $5.325 billion) and adjusted EPS of $7.95–$8.25 (midpoint $8.10). Free cash flow guidance of $450–$500 million reflects margin expansion to 13.7% adjusted EBITDA. The company plans to prioritize M&A in federal/defense sectors and maintain a net leverage ratio of 1.5x.

Additional News

Maximus announced a quarterly dividend of $0.30 per share, payable Dec. 1, 2025, signaling a 1.5% yield. The company secured a $86 million U.S. Air Force Cyber Command contract, expanding its national security capabilities. Additionally, Maximus formed a cooperative research and development agreement (CRADA) to enhance intellectual property and AI-driven government solutions. These moves align with its 2026 strategic focus on federal growth and technological innovation.

Key Takeaways:

• Dividend Update:

  $0.30 per share payout with a 22.1% payout ratio.

• Contract Wins:

  $86 million Air Force contract and CRADA for AI/IP development.

• Strategic M&A:

  Targeting federal/defense growth via acquisitions and share repurchases.

Maximus’s 2025 Q4 performance underscores resilience in core operations despite revenue misses. The 2026 guidance, anchored in AI and federal expansion, positions the company to capitalize on policy-driven initiatives. However, near-term execution risks and sector-specific challenges, such as post-pandemic normalization, will be critical to monitor.