# Maximus Inc. (MMS) — Financial Analysis

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/MMS/thesis · /stocks/MMS/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: MMS
step: "04"
title: Financial Snapshot — P&L, Margins, Key Metrics
created: 2026-05-29
---

### Step 04: Financial Snapshot

#### Income Statement Summary (FY2020–FY2024)

| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024E |
|--------|--------|--------|--------|--------|---------|
| Revenue | $3,044M | $4,254M | $4,253M | $4,907M | $5,279M |
| YoY Growth | +4.8% | +39.7% | -0.0% | +15.4% | +7.6% |
| Gross Profit | ~$600M | ~$750M | ~$700M | ~$810M | ~$870M |
| Gross Margin | ~19.7% | ~17.6% | ~16.5% | ~16.5% | ~16.5% |
| Operating Income | ~$275M | ~$330M | ~$370M | ~$430M | ~$480M |
| Operating Margin | ~9.0% | ~7.8% | ~8.7% | ~8.8% | ~9.1% |
| Net Income | ~$190M | ~$220M | ~$240M | ~$290M | ~$330M |
| Diluted EPS | $3.01 | $3.48 | $3.84 | $4.64 | $5.42 |
| Adjusted EPS | ~$3.20 | ~$3.60 | $4.21 | $5.18 | $5.85 |

*Note: FY2021 revenue surge driven by COVID-era unemployment insurance processing. FY2022 reflects VES acquisition ($1.5B, closed Jan 2022) partially offset by UI normalization. Adjusted EPS excludes amortization of acquired intangibles and certain transaction costs.*

#### Key Margin Analysis

##### Gross Margin Trend

Maximus's gross margins (~16–20%) are lower than pure SaaS peers but consistent with labor-intensive BPO businesses. The VES acquisition diluted gross margins slightly (cost-plus structure generates lower gross margins than state fixed-price contracts) but improved operating leverage at the EBITDA level through scale.

Gross margin pressures:
- **Labor inflation**: ~70–75% of COGS is labor; wage inflation 2021–2023 was a headwind
- **Contract mix**: More federal cost-plus = lower gross margin
- **Medicaid redetermination**: Task orders at US Services improved utilization; mix tailwind during peak

##### Operating Margin Drivers

Operating margins (8–9%) are driven by:
- **SG&A leverage**: Relatively fixed corporate overhead spread over growing revenue base
- **Business development (bid & proposal) costs**: Expensed as incurred; can fluctuate with recompete activity
- **Technology investment**: Maximus has been reinvesting in automation/AI — dilutive short-term, accretive medium-term
- **Amortization**: VES acquisition created significant acquired intangibles; amortization ~$80–100M/year

##### EBITDA

| Metric | FY2022 | FY2023 | FY2024E |
|--------|--------|--------|---------|
| Operating Income | $370M | $430M | $480M |
| D&A (total) | ~$150M | ~$155M | ~$160M |
| EBITDA | ~$520M | ~$585M | ~$640M |
| EBITDA Margin | ~12.2% | ~11.9% | ~12.1% |
| Adjusted EBITDA | ~$560M | ~$635M | ~$690M |

The gap between reported and adjusted EBITDA reflects primarily acquired intangible amortization from VES.

#### COVID-Era Program Surge & Normalization

The revenue trajectory requires careful interpretation:

**FY2021 UI surge**: COVID pandemic drove an unprecedented surge in unemployment insurance claims. State UI systems were overwhelmed; Maximus rapidly scaled contact center operations. This added ~$700–900M in non-recurring UI revenue vs. baseline. As UI claims normalized FY2022–2023, US Services revenue faced a structural headwind offset by Medicaid continuous enrollment.

**FY2022–2023 Medicaid continuous enrollment**: The PHE (Public Health Emergency) prohibited states from disenrolling Medicaid beneficiaries. This kept Maximus's Medicaid workload elevated with limited eligibility churn. When the PHE ended April 2023, states began "unwinding" — re-verifying all 90M+ Medicaid enrollees within 12-24 months. This created substantial **redetermination revenue** for Maximus as states needed surge capacity.

**FY2024 onward**: Medicaid redetermination revenue peaks and normalizes. The underlying Medicaid business (lower volume) will settle at a new run rate. VES continues growing. The net result: revenue growth slowing from ~15% to mid-single-digits.

#### Valuation Context

| Metric | Current (~$75-80/share) |
|--------|------------------------|
| Market Cap | ~$4.5B |
| Enterprise Value | ~$5.7B (incl. ~$1.2B net debt) |
| EV/Revenue | ~1.1x |
| EV/EBITDA | ~8.3x (adjusted) |
| P/E (adjusted) | ~13x |
| P/E (GAAP) | ~14-15x |
| Dividend Yield | ~1.5% ($1.12/share) |

MMS trades at a discount to broader IT services peers (EV/EBITDA 10–14x) reflecting government contract risk, leverage from VES, and Medicaid normalization headwind. The discount appears excessive given revenue visibility and dividend support.

#### One-Time Items & Adjustments

| Item | Year | Impact | Notes |
|------|------|--------|-------|
| VES acquisition costs | FY2022 | -~$20M | Transaction and integration |
| Acquired intangible amortization | FY2022–ongoing | -$80-100M/yr | Primarily VES customer relationships |
| Restructuring charges | FY2022 | -~$15M | Workforce rationalization |
| Attain LLC acquisition | FY2022 | -~$5M | Smaller federal IT acquisition |
| Legal settlements | Various | Immaterial | Normal course |

#### Tax Rate & Interest

| Metric | FY2022 | FY2023 | FY2024E |
|--------|--------|--------|---------|
| Effective Tax Rate | ~25% | ~26% | ~26% |
| Interest Expense (gross) | ~$55M | ~$70M | ~$65M |
| Cash Interest (approx.) | ~$50M | ~$65M | ~$60M |

Interest expense elevated post-VES but declining as debt is paid down. Net debt reduction of ~$300M/year is achievable given strong FCF.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/MMS/fundamental

## Navigation

- Overview: /stocks/MMS
- Financials (this page): /stocks/MMS/financials
- Thesis: /stocks/MMS/thesis
- Investment Memo: /stocks/MMS/memo
- Coverage universe: /stocks