Maximus reported its financial results for the first quarter of fiscal year 2025, ended December 31, 2024. Revenue for the quarter increased 5.7% to $1.40 billion, with organic growth of 6.3%, primarily driven by the U.S. Federal Services Segment.
The company's adjusted diluted earnings per share (EPS) for Q1 FY25 was $1.61, compared to $1.34 in the prior year period. Operating margin was 6.2% and adjusted EBITDA margin was 11.2%, reflecting strong performance despite divestiture-related charges of approximately $38 million.
Maximus raised its earnings guidance for fiscal year 2025, with adjusted diluted EPS now expected to range between $5.90 and $6.20 per share, up from the previous range of $5.70 to $6.00. Revenue guidance was adjusted to $5.2 billion to $5.35 billion, reflecting the recent divestiture partially offset by increased organic growth.
The U.S. Federal Services Segment saw a 15.3% revenue increase to $780.7 million, driven by clinical assessment volumes and other clinical programs, achieving a 12.7% operating margin. The Outside the U.S. Segment also showed improved profitability with a 4.8% operating margin, benefiting from recent divestitures.
Cash used in operating activities was $80.0 million, resulting in a free cash flow outflow of $103.0 million, which was anticipated due to seasonal payment timing. However, full-year free cash flow guidance was increased by $10 million to a range of $355 million to $385 million. The company also repurchased 3.1 million shares for $237 million during the quarter.
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