MMS - Earnings call transcript Q4 2017

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Operator

Welcome to the MAXIMUS Fiscal 2017 Fourth Quarter Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Lisa Miles, Senior Vice President of Investor Relations for MAXIMUS. Thank you, Ms. Miles.

begin. may You

Lisa Miles

subsequent being to thanks results Rich and XX.X and us. this risks me believes of With and Nadeau, providing in be We company in risks or Good financial may statements presentation of Please nature. Chief results including we in in non-GAAP this to recent its are for the our Executive and is does these revise circumstances. information remember XX-K statements number A Montoni, financial The performance, Financial any quality President; contain information. uses today those internal assume the and the of as Officer; filings. investors reflect analysis materially obligation today informative will to our Chief SEC. forward-looking morning, review forward-looking period-to-period most events discussed Officer. joining made actual comparisons. of Bruce Rick our predictions such trends gauging differ you not a Exhibit be these results our of or face, encourage SEC Today's information that filed events in only in may update identifying meaningful Management summary with may result to of and statements Caswell,

to earnings For a recent that, see release. press reconciliation call Rick. most of non-GAAP company's With over measures hand presented please in these the documents, I'll the

Richard Nadeau

with Fiscal our of morning cash quarter all, this highlights was Over generation, execution, portfolio record off contracts, will fourth Lisa. Thanks, and healthy by from lead results. I Year margins XXXX defined good solid a and

was fourth the quarter expected, year. period to As comparable same for of Fiscal last the XXXX revenue

level strong Segment. we bit the passthrough quarter Services was within Human of and delivery higher revenue revenue a due to However, little better our from operations the Health Segment Australian by fourth than a expected

income than a primarily the On were due $X.XX quarter better share lower diluted over tax for last increased Fiscal line, per XXXX rate. and expected, X% fourth bottom Revenue to earnings year.

driven was Federal by company expected This Segment last margin end declines and increased offset As that was expected, year. our large XX compared U.S. Total as by for a Health XX.X%, April Fiscal a Segment. in primarily to an the XXXX. Services to came growth operating XXXX was XXXX Fiscal the result of points, contract revenue basis from to good

As income Fiscal XXXX tax recorded prior years share to expected, credits income GAAP and for in to were XXXX diluted RSUs of the returns earnings stock third were research development benefits exercise and related from and that vesting impacted Fiscal the by resulting of net the per tax for and tax the lower options. favorably rates related to tax quarter

a tax Fiscal reminder, bottom line. effect was XX% compared a for new Fiscal to in equity went XX.X%, accounting rate year. compensation into standard As The which this for XXXX, XXXX increased the

per For income provided attributable approximately earnings share increased fiscal XXXX. XXXX. tax Fiscal to XX%, net to increased compared GAAP lower a The to year, diluted XX%, of $X.XX earnings the share and rate of per benefit $X.XX, Fiscal to diluted MAXIMUS

of The Fiscal their year the for per focus quarter consistently this both for the Segment revenue starting use solid Health Heath to deliver my go-forward revenue work. Fiscal growth compared to Segment a results. $X.XX apples-to-apples The of results, X%, XXXX. X% with expansion billion, draw full lesser extent, quarter acquired. primarily Excluding year and rate to been than full Fiscal modeling Fiscal XXXX recommend financial margins on was predominantly XXXX order to XXXX revenue X%. that less the will approximately for the existing currency was Segment remainder Segment. Health earnings year of growth fourth would attributable continues XXXX commentary I grew a majority an operating and these benefits, XXXX We and, have new for the to the Health and in Services to analysts of On been adjusted tax constant share. per baseline Fiscal for organic, basis, have were $X.XX in Fiscal share full Segment was Services comparison. contracts fourth strong. would growth

the over Health Margin XXXX. Service quarter contract the year XX.X%, improvements and and basis margin driven in expected the Assessment For revenue was XXXX, XXX Fiscal the operating in Health in was Fiscal both Services a expansion point by full Advisory accretive growth. year-over-year increase

performance-based the as X% the same Segment XXXX. periods for expected. $XX exercise and extends work agreement the Revenue quarter was for This our mix full lower Advisory the U.S. for subcontract by quarter lower the segment contract to for of operating year are both in increased in client the from Fiscal February our contribution contract Segment of a primarily Services Fiscal X million performed this year for with an grew full in was for Revenue margin compared to April an U.K. that the fourth finished XX.X%. of due This as was We Health the Federal years XXXX XXXX for Human XXXX XXXX. improved Segment prior Fiscal U.S. to to over compared year through Affairs. end basis Services result revenue we this from compared option contract contracts. came a predominantly was X% points large on in the Assessment and year the year, largely fourth to XXX pleased reached periods. Veterans Department revenue This XXXX. the to Service. The driven that prior Fiscal

the was the by The the coming in a the expected is came Fiscal and revenue revenue Australia segment's growth of full United combination as which contributed to U.K. the operations, XXXX. both increased the in included in higher largely driven partially and full was Segment the Kingdom operating expected, fourth Australian Human declines Work fourth year at Revenue by Programme, X.X% quarter its the the Services The expected offset for the declines For growth the of of passthrough revenue. for in level expected passthrough margin. from margin and segment revenue to X.X% quarter, Operating for lower end. work the which year in

that or won pleased to diluted $XX income to $XX on. approximately later contracts more several expected EPS. the operating announce will details are we in $X.XX contracts XXXX new Segment. recently are We to of by Services Human million, approximately million provide Rich temper Fiscal These

over reminder, these a contracts occur months will early steady of in have outcome-based As Once should will payments take contracts payments. will no payments of time. that flow outcome-based mature, a have to the contracts and these increase Accordingly, outcome-based achieve. time these

XX, is Now from flow XX targeted and better and balance free our I sheet cash XX Fiscal Day our fuel of than cash operations which which will of XXXX, range record discuss to items. were helped days. flow both flow at cash for September Strong XX collections days outstanding guidance. cash sales exceeded

solid net of from the year. benefited and for the including credits lower the rate also tax impact tax income, We

cash For we and Fiscal of XXXX EBITDA $XXX of operations free million. of adjusted $XXX generated million flow cash million $XXX from and

our press have reconciliation release. We tables included in

board-authorized company shares During million. which stock XX, we has the XXXX. program MAXIMUS $XX.X ended of no extended XXXX, of cash remaining us at XXX,XXX the debt. In Fiscal $XXX.X under September borrow year credit repurchased XXXX, material our and we and common approximately September with cash We life The million. to $XXX equivalents the XXXX, to of $XXX to million approximately for September allows facility million up

the allocation million. accordion Capital As our best order up to is an to important flexibility additional right an a to reminder, gives $XXX the shareholder for value. management us investments and create team, sheet long-term make feature we to the have in balance

strategic near-term Our interest priorities our remain with unchanged, primary being M&A.

looking but, have frankly, at we and resisted be targets of a inflated actively to number valuations what been paying prices. been have high we view have We

and Above on corporate cash we in any M&A dividend, of that returns help of An of rates our can of capital program we for of is buyback near think use cost excess remain deployment tax stimulate movement the the achieve opportunistic as also committed activity continued in as share our positive component working well may uses our where cash We important reform capital. future. cash quarterly to investments. our all, tax

with release XXXX help investors to up your table supplemental to would bridge the a like attention the results increased direct our to guidance. and guidance, XXXX my versus press presentation. of wrap comparison transparency I provides actual Before I crosswalk We in to Fiscal baseline it believe XXXX

For Fiscal billion. XXXX, $X.XX MAXIMUS delivered revenue of

$X.XX guidance XXXX are will billion. This for $X.XXX We establishing increase top a X% XXXX. and line billion a X% implies to revenue range over between that Fiscal

revenue for XXXX Services We year be Segment. to Fiscal by Health of driven growth full expect the the

income pretax resulting between and comparison. In provides table, We impacts, of think Human Fiscal startup impact which of these our earnings For $XX per in similar $XX for detrimental midpoint diluted to share. includes consistent the approximately million, investors assumed which million $X.XX contracts supplemental share we we range or the from XXXX, the $X.XX, startup. unfavorable to adjusting that anticipate will $XX a new have Services per and million GAAP $X.XX is losses with more

share to $X.XX Excluding XXXX, EPS $X.XX earnings range and growth had At between per diluted XX, This the we adjusted diluted backlog. between impact, Fiscal billion adjusted for and for $X.X X% XXXX of compares Fiscal $X.XX. in X%. $X.XX implies and XXXX September would

stronger insight year Fiscal the X our for that basis, the XXXX level we will be be will by trends. high revenue XXXX appreciate that and we half driven This options is into items. forecasted in in form forecasted As XX% prefer the anticipate of you second estimate the our quarterly a have of revenue the investors first approximately half financial We a extensions. some of of of or On XXXX. know, versus backlog, into revenue already expected visibility quarterly

First, temporary of subcontractor a relief CSRA work support disaster as in Services Federal to in Segment our efforts. U.S.

that in a of be this change and work subcontract. we to today, in the Segment and facts While this the fluctuations quarter quarter may last circumstances first we have on XXXX. And forecasted now second, experience based we pending order disclosed recognized expect Health the on short-term

will because of that than income line, expect we the rate. On a tax Fiscal we the be fourth bottom more expect Fiscal first lower XXXX, the of normalized quarter quarter XXXX

to operating the or above full In the Segment of at targeted XX% continue achieve year of range by margins expect terms of margins segment, to Health will we our XX%. midpoint Services

likely possible I deliver will and guidance, will the margins There that midpoint Segment, to lost XXXX, the Federal rebid Fiscal shape the new downstream, likely that boost short-term aforementioned from we revenue expect work, an make a about methodology. our are guidance are Human we longer-term contracts to Services startup the or annual one including expect to our factors are will point be the our but not segment a hope margin, lower base contracts impact timing of maturity, the at opportunity operations, single digits. of new a unfavorably impacted or we contract For number margins change to Services rebid startups low operating and, the choose that provide in lastly, like of contracts impact contracts orders, final The and will may of be of U.S. a the coming end. would create targeted Segment mix expected towards that temporary range. that wins in we by that

While normal majority that streams, year. impact contracts revenue to have of our the each it is to visible also manage attrition provide important we the highly recurring vast of course recognize

each impacted year. that XX% X last X% we the has from line top attrition Over us years, to estimate anywhere

include, is work in XXXX, the segment. This main rebid that acquired essential includes losses Federal For factors attrition away. our specifically, or X going first, work

has are At designated businesses. small off. point, longer eligible rolled are to most this some bid of the We because contracts work this for no of this

rebid our extended, consider believe at in forecasted are has Second, modeling And We investors this or been is important that rate. when element lower work volumes. an third, a but changes to results.

of XXXX, will between income we and rate XX%. tax year the XX% full estimate the For range

on the jurisdictions As you as closing common contribution tax ultimately of rate XX, mix as September final our the tax stock price income on know, of will from various the XXXX. MAXIMUS well income depend operating

shares average And weighted flow assumed of finally, also XX.X million. have guidance. we outstanding XXXX, Fiscal For cash

between by the the over in and $XXX range be with I expect for We to million will $XXX to Rich. And free to $XXX we operations of that, provided to hand million. million cash million XXXX, call $XXX cash and expect range flow

Richard Montoni

remarks, the Rick, some firm the healthy base. Thank a margins on I cash and on Open Enrollment operating successful and growth, prepared give paths XXXX In Fiscal that protect the everyone. rebids recent Affordable brief finished flow. you, We will morning, footing, as highlight new today's record with good period update Act. help for I awards work that several then well to as Care long-term provide will

the and show applying an example, we X, based Affordable programs Act. volumes the on higher first core at of efforts a slightly about a period update to State-based to to replace signing appear hard exactly Affordable new on the Enrollment volumes anecdotally, calls up this Marketplace for actively who might November from of press talked during compared think centers, with than are seeds week, the planting The and early to number on call year. of began legislative Act our Care that last higher result the coverage trends Exchange competencies Americans Open and bit contact Care we Enrollment We're coverage Exchanges State-based initial long-term federal quarter's seeing start consumers at Open last new as Let's higher, for and, reports On year. to several from for be why few call, coverage rate with be last similar the a for clients. they It's speculate losing received repeal our but, a growth; ACA. days

help Screening During contracts new in facility certain new of the appropriate and value this often wins LTSS month, contracts, a These launched enhance these for also into abroad. and for to final a contracts of of We community-based recently Supports opportunities We're Preadmission converted our these Review of Long-Term Last position at several or setting awaiting Services time, award leading not receive discuss we services In placement. assessments. they execution our further are we the placements of and while contract, expanded notified is and as provider financial key were Indiana. required and as the U.S., in these X able the beneficiaries. total services U.S. we employment known details regardless case individuals assessments $XX Training on The new business, LTSS. providing ensure retention Indiana MAXIMUS the help Fiscal statewide services project Resident workforce Under years. management, contract XXXX, in and assessments to referred PASRR. program nursing approximately an we ensure also services million six over public Employment and to is the

this to these had not requirements. requested It's that move contract current is You may work one recall mandatory to beneficiary populations. Indiana worth a Medicaid certain noting to waiver that voluntary is requirement that its work new for related Medicaid

However, the state, both a this CMS. a is and still requirements Medicaid Medicaid XXXX the been state means that for that we work of now state's contract for given enrollment are decision that MAXIMUS new broker pending at work requirements. health offers forefront at The in human services waiver has

Disability have our new Moving X United Kingdom, the on Employment exciting wins business, Services we to from contract Remploy.

the value million is in new X-year launch Health XXXX. is Programme first XX contract a in The and contract a expected deliver December contract Work of has to approximately Wales. USD to and The of

well to those individuals as The or more a disabilities. certain holistic help employment. for program offers We approach individuals overcome with as unemployed will be to barriers support conditions employment offering health

We than offering support personalized will more and XX deliver seekers. to integrated service XX,XXX through delivery locations, job the

X a The contains delivery the work each combined second the award X with Start Scottish population. to lasting run the of of mainstream employment of USD years, the annual gap with Fair ambition million. program, piece of the X and The part between close government's rate disabilities working contracts, people is approximate

More of in We with will and more for be creating Scotland fair, than employment. condition. XX,XXX a personalized plan declared right than move have or health to our equipping skills half staff the support disability into a sustainable people them

noted, to the for teams Kingdom program. and our news We startups XXXX to in earnings. States business these our United global additions but, temper this good development strategic understanding unique as Congratulations the operations to a Rick socially United of and bring we wins portfolio. categorize these important So will these some as

represent These the We are our protect several well-rooted contracts. through of equally to of contracts pleased contract key extensions. and rebids base our stable portfolio base successful

the a revenue for contract to Annual and XXXX. term signed renewal through month conflict-free is contract. broker for million Under broker served services since contract this runs enrollment our of from started range Medicaid counseling the XX-year providing Medi-Cal MAXIMUS Fiscal new to The $XX more broker XXXX California as between population. million. the $XX renewed for California XXXX, last continue choice MAXIMUS state's XX year. million expected will June has and enrollment contract, for each First, Medi-Cal we providing than contract participants enrollment

Medicaid other enrollment for extensions X received projects. also key broker We

contract Texas Health our the contract has rate contracts. In these been material for its X for to any Kingdom, Advisory of the extend annual expect our Department has formally Service. the exercised to years. of Work XXXX, Our Michigan through been the change to either Assessment option extended extended Pensions deliver do August We contract for and United run not and

our As XXXX. Rick mentioned, extends work of this through February

to very improvements the worked has total, key made. and In nice our service They team government also and of a has these significant Our they've proud to operate ability to visible addition new outcomes. highly reflect stable and progress are to program, confidence we provide their this hard programs achieve intended level deliver awards the that rebids portfolio. efficient in and our healthy effective

to and Let's awards, pipeline move on rebids. new

contracts. $X XX contracts notified contracts, the quarter, unsigned quarter, billion. we of we California billion billion of contract total worth September new of brings for Michigan Also mostly but the awards, award driven awarded billion signed $X.X fourth bringing This the by signed value another were $X of during Fiscal on the contracts During XXXX. at the to fourth total and $X.X to

Of new approximately new category. significant segments at these September in very sequentially expect, billion awards, billion. our work number XX% a the of the tied should additional and is that when as important And were moves signed a pipeline, investors into that tracking. was hearty opportunities accomplishment significant award now continue of all of of to $X.X into normal to XX work just To we of of level in high X pipeline in all backfill under of to It's the $X.X unsigned. might with expect pipeline amount are to to offset billion opportunities opportunities we course fluctuations down, converting you $X work pipeline So as geographies. awards, our result our and across converted that the able reflects a new

examined our expect reported RFPs to and quarter. pipeline the analysis next to into pipeline also on know we next to pipeline the we quarter. see We return we will normalized levels roll what what longer-term expect Based this today, more

in we billion up disclosed, in previously we had under rebid for XXXX. $X contract As just value Fiscal

couple pending, including We are or X have extended on vast Michigan still largest a our won we in our of Texas. and the but rebids majority of rebids, that were we opportunities California,

a be Looking XXXX year shaping to ahead, rebids. terms is in Fiscal typical up of

solutions cost-effective winning the which encouraging. We growing aging to year health longer-term We up for while on this focused on to efficient past. pause, some taking to more have rebids put position in have similar perspective a approximately will with positive manage effects contract more value of believe We an the note the key the because time strategic continues we in the next we new to for of individuals to macro work. base some environment, and populations, experienced company it's caseloads million we To that of advantage industry Fiscal seek securing remain But $XXX we important and lingering governments XXXX. ended rebid are of in way. this be growth. total end, needs complex summary, this a years pauses continue and by also In feel wave in

more our bring X-pronged approach growth As to designed with to our we quarter, discussed growth is long-term in last targets. line us

As with includes into to the our a closing, around providing we this as quality platforms. moving set adjacent current approach and much services growing operate XX,XXX to Q&A. thank the as more Their we employees that, on next new shareholder key to deliver strive to our And value. as programs citizens in dedication by world. of I highest and we'll now the markets, is well served Operator? reminder, incorporating core clients of appreciated move the than markets the In our very

Operator

Instructions]. [Operator

with question Kinstlinger, is Our from Maxim first Brian Group.

Brian Kinstlinger

slide, methodology there's in You a that it. is this and per number attrition then actual of go than comment XX% so, the And I impacted mentioned ones typically missed 'XX more on others. had X% maybe if slide attrition you whether is think and and, Could Fiscal X through it? may new I on guidance year. bigger buckets, to have the quantify you which a

Richard Montoni

Rich. of ask That to components on and question handle Rick is going to attrition, which impactful, This is that. most the attrition one Nadeau I'm

Richard Nadeau

us, of you think Brian, time. prior looked having number those at basis X typical reasonably XX% and that's back years, over between typical. we've over that's for a an would attrition and on the gone that level that annualized Obviously, of change as is it and X% will mix kind the

as than don't that FYXX, we more all categories. studied different us of those much any affected I think think It across was pretty I of one others. piece was the there that

Brian Kinstlinger

it is range, that you're saying, is what still? in But

Richard Nadeau

Yes.

Brian Kinstlinger

they're Okay. of short run potential ramped kind my when the maybe that revenue Human on term them term? up? are And basis then what long those impacting Services from we what expect is margins the And in margins, the a on the of contracts follow-up, can

Richard Nadeau

ramped, the that, $XX the those once of those, the $XX Brian, our million revenue million incremental range. to to XX% as that of million they would $XXX new annual of would to margins work. in contribute approximately our to Segment, expect lower be we will end targeted XX%. And $XX fully would Human Of be that in are range Services million on

Operator

with Securities. Strauzer, Charlie from is CJS question next Our

Charles Strauzer

it by if to for the for breakdown segment on detail bit little line next possible? the guidance a get more year, top Would possible be the

Richard Montoni

to by what that? do Guidance top Rick, have about line. you segment say

Richard Nadeau

would We go back and indicated of in typically driven given it's led historically past year that, last we have segment. Charlie, by would did and our by years I growth I than modest suffer that what is $XX over we've haven't less a future, couple that disclosed had if followed our you been the at year. typically U.S. can Health in did us. segment Well, the but Without is Health Federal our growth say tell that you segment. look had the revenue the it of lead by But to contract that it segment that growth. segment prior we our the of that, Federal will million loss you

Charles Strauzer

you then work And the what segment, was kind are, added back a that at they of us new the give maybe as Excellent. to if to little look pipeline, color can as maybe you more by opportunities bit well?

Richard Montoni

pipeline be to work how bit, glad to rebid wins, about that convert think work. think manage it new about the versus pipeline new just I you pipe Charlie. dynamics, little I'd much I ending you of to talk pipeline to did of the and how what's composition refresh did and then When relates manage as pipeline a of much about to the

details about So those those this I very about I when about converted. the talked significant a was think, significance think when quarter, think amount We the variables of very, conversions. dynamics, and I clearly,

really So that the the happens, and backlog significant pipe backfill the pleased Whenever itself. see in a course. decrease in you'll extent sales the I was with normal of

think $X such which time. relates of is So billion, that, to as I nearly period a quite to in short backfill it substantial our ability

XX% roughly new billion the is ending the sequentially. which pipeline, $X.X roughly As a result, was was the up quarter. new pipe at of work about billion, $X.X It ending sequentially actually was the sales beginning up of while in from it of work the of the down, amount

So, the over all, pleased the to was pipe. relative I very dynamics with

Operator

Genuity. is Canaccord from Close, with question next Our Richard

Richard Close

this time costs in associated providing is really, I Human the think, Just adjusted and out on with, you're costs I calling of and EPS. first the side, specifics startup the guess, these terms startup

startup Fiscal just just we have any clear, was should that in apples-to-apples? be that so be called So to 'XX also expenses there out,

Richard Montoni

resonates the practice with the to when me And work move about to it. of startup Kingdom. impacts Our back And out extensively that Year in XXXX needle. boomerang very one when Fiscal the the HAAS the had We most startup EPS certainly, impacts been last we the was that has the of circa consolidated I called call a they startups in United out. the and we've of think couple relative of in and impacts talked the significant years

startups know about So, if public Fiscal 'XX have we impact in don't Rick, I that's of available? information the

Richard Nadeau

Richard, was to as it I out we called But the No. compared year. because think, it prior incremental

So factor when trying is we had really why creates up came looked it GAAP That at the to it was were our and with been margin year. prior than we the in we guidance, that lower it. understand the

right if you think add-back I comes within schedule our you the go the and you of back at the we and look supplemental that you FYXX. margin startups, see look range at those of what had in

because out it we it incremental. called So was

Richard Close

the follow-up base of XX, rebids. and off the Slide protecting key my is And Okay.

$XX the annual those revenue Texas change. you did how was about Can out of then, that million talk only and million. $XX call a X-year You if extension. California, contracts? to Curious And two

Richard Montoni

the of terms in call-out Rick, other aspects. Two ones? on Sure. the

Richard Nadeau

on California? of has California the your work, that same question Is basically Richard. Well, scope

Richard Close

to it $XX in was is to comparable 'XX? what Fiscal million $XX that The million,

Richard Nadeau

the basically scope work, of same Yes, yes.

Richard Close

Okay. And Texas?

Richard Montoni

Texas, X-year extension. second a the relates question And to

I think for pleased We've course. We're that's some client this dealing and receive normal extension. extension. the to been to an receive with quite X-year not time, uncommon

X- X-year-plus extension. welcome think contracts, So per while this a just an se. It and we was was rebid, type I clearly not

So it's news. I good think

Operator

Markets. is Gurda, Capital Our with KeyBanc from question Jason next

Jason Gurda

environment, industry of how devolved how the over your last pause that two? curious the I current was quarter or view

Richard Montoni

think extent would Kingdom, segment, terms trickle-down administration effect that in a most to their result, And priorities. in That's to really to most here in say sort perspective. question our the business. as U.S. state-level notably, continue of an impactful I a I Jason? think to flow the lesser is business, here notable to the Care of got longer new Is from see less Health all procurement a obviously, certainly it trying but out they're And pause Affordable that as good our what's Federal in Federal some and the this we've our U.S., there going business. some a health in for programs. this, on industry opportunities. cycles, and that and waivers And perhaps state it's the helpful, in I to Act part is pending some United most in it's from changes we through There the the to are relates particularly deal and

Jason Gurda

curious your I the to how the play curious on last, might as of may experience in how but expect pause of Yes, far this pauses long was this your you past, duration thoughts out. the just -- and it I'm as how would how how

Richard Montoni

to forecast The what good do that lion's off, here, is an first in But melt. there's we trying is of I share news continues. mission ice critical. think This this, business

continues. it a on if that we've freeze got we're as the doing work today. not It's So

on-the-margin is think, have gives you, type is as on at So it's comfort discussions to are efficiency, it status becomes quo. In and but we're the progress. the such free-up the least our focused I maintain on the a we it meaningful what programs more clients, margin until the happening certain going improving interim, that see level a time with we really

We'll see see of So those opportunities. which non-incumbent. I out some and types pursue rebids think we'll we'll of as come

hopeful in new this, will momentum but perspective. we were years X that I to case. for just And very It's to point I That's we initiative, say, look federal to we the there's modernize there's government I I'm sincere government. of all some could of see months guarantee efficiencies, appetite, with difference, time. think to if individuals continuing point that in handicap melt a in the a it's is, increasing see I government from terms work pick we're charge think those So noticeable large hope levels, meetings this there change federal look at that political for areas. highly now, And from the the to up where can regard. this, not those I'm daily to very technology, at say that, And having we'll in government but no that's a X and going to

improvement and continue existing going be legislative it processes, and as change, more on but So holistic I to these acceptance opposed the think of margin change. to see we're will to

Operator

from Matthew W. next with Robert Our question Baird. is Gillmor,

Matthew Gillmor

revenues financial Can the you much healthcare first you talked you quarter how an Fiscal disaster support that have first will half quarter? order hit of maybe in the first and segment. size think that of on I the the the for quarterly second in about trends part change you of impact On up 'XX? And out the will in mentioned called that 'XX, then then, or the

Richard Montoni

the year, you the that is on work to question amount we're disaster your of the Rick, going forecast do So do the one? area. half of the to want for in first field

Richard Nadeau

It's actually in process right now.

really also out depends that QX subject a can't a is variation. This one build because number. but identified it a be volume guidance, When we've you calls reasonable. we to the a called analysis will ranges. could that with variable figure it it say fair event. at we out in and I there it to for prudent our And a come of QX call put build on ultimately meaningful number, So it's that and of in. we will our be been a trying in quite I in and degree is that

Richard Montoni

a And after see it's this Rick, and say, fair we event QX/QX as to largely that. non-recurring

Richard Nadeau

the I yes, And how calls last. it that, on yes. long Well, think depends

the the September occurred ended in quarter so disasters XX. And

past go February would to not be So logical. much

Richard Montoni

a And the relative mentioned order call. that Matthew, was Rick part I question there to think second this your change in to

Richard Nadeau

having United a to in we come going not. in is in big hoping did will really a that already because were what change you a And been that It you and period. give sign state -- the But lift costs is we prior when you order there FYXX. States, hit in wind the up order QX. was you the it a do revenue, think will in now in change That that that have but recognized FYXX, that like it get

for guidance half the why of of told first on bit reasons one Year a 'XX the Fiscal that's So we little the of we'll a bump. get you

Matthew Gillmor

on earlier specifically of CMS they and waiver bit more requirements. requirement up with flexibility work discussion And the signaled I discussions, Okay. waivers, think to then this respect and I a some mentioned That's Medicaid week helpful. following the work little think

when be could there I curious terms do of any around So will if general? approvals. we see terms of of then, was thoughts flexibility the you more any in in helpful broadly, in think those you had some impact And waivers,

Richard Montoni

about we know thoughts. of I lots number thoughts have Well, share I'm ask of to limited Bruce that, Matthew, going and Caswell a those to

Bruce Caswell

a CMS. those front are aware, different of probably you're there of a we're components. And waivers, as roughly number pending and about waivers tracking waivers dozen in have Interestingly,

waivers premium behaviors, other of also lock-out requirements But and work component waivers pending a and periods. healthy time cost are like the approval eligibility introduce retroactive waiving their X So sharing that states in are items incentivizing time limits, presently. about changes,

get and near review So to of X of requirement, through at fashion highly CMS, them the likely in the presently expedited Interestingly, and in CMS work does think waivers an some approved time. a them several X take are term. are that complicated, waivers of the pending are them for relative get we have to

CMS that further information demonstration fast-track which approved week and it state the came assistance, form states these state, a help out already providing like right the process. approval about CMCS an that's technical follows available that for the being they'll November that waivers. to for just implementing another there's used is to And things substantively They're Medicaid if absolutely You're expedited that process so that's better similar this they're do templates forth. ensure been for talk and in one Section they And bulletin state to XXXX directors, waiver did issue that really X. process, a of what's improvements on guidance waiver

by indicates just working faster XXXX and was are So ways and as clear process administrator you the make conference message NAMD there not really state at I think modify plan the the that Medicaid that other that states that but, waivers, amendments. the to waivers delivered like programs, their path they're the XXXX know, for

for waivers think So would through months generally, those into approved operational to would that I we'd X beginning period. of and all approval programs And opportunities state by allow us for probably then see be be we clients. for our given to that, operational translated the winter post late fall/early

for us. written Because form has whom when Kaiser you are to really look back at is doubles of of the the before, Medicaid many XX% half particularly already the work historical FYXX, work. more So be singles about requirements, some of opportunity and this, on said relates in probably that's I'd the we've eligible of population, to I and it, and of in more these as population, work type think by that a standards, view it

So we need to keep that in context.

Operator

question from next is Our First Sparacino, with Analysis. Frank

Frank Sparacino

driven was contracts? know maybe in rebid can First, on that the was quarter, additional the existing of the how much signed terms rebids Of tell unsigned, that's or XX, the mostly on me that billion I you pipeline. Slide by of work. in versus $X the new

Richard Montoni

that haven't the At all metric. we'll into historically a the of feather that Frank, on we it end basis. guidance our provided of day, take go-forward and

able I'm metric not So in that at to provide point you this time.

Frank Sparacino

you're and guys factored And declines? that. the head work given HealthCare.gov your more enough. and the risk work pretty year, lot enrollment should just as just as you is, this -- you that state And So we projections sort of think given uncertainty, lot there's we year we particularly around of federal to there thinking HealthCare.gov, a a how obviously also, 'XX, significant around into a up I'm up more trying sort follow-up have ago, how the my around it. about exchanges. how about guidance, into sized size curious and into it's And Fair headed

Richard Montoni

I fair, Frank. that's think

we You the Exchanges, it to have Act, table at exchange, risk. federal good the on recall. Affordable HealthCare.gov, talked State-based as do the is We've about how much how much relates work Care have the

So, Bruce, you want to field this one?

Bruce Caswell

first November double a enrollments the in period Americans and of the a seen, according XX%. up on Frank, consumers surge the report time. more have XXX,XXX at same Open Interestingly, that's very Washington was the by number actually plan Post, there X, on to in About that Enrollment you days signed the HealthCare.gov. few that may up, in a year about than Traffic of last was chose

very Rich activities as business exchange volumes aware are days, shortened got as XX exchange Enrollment for business of would much large federal I in seeing some their get that level, commensurate noted, usual through they've have usual. state are through it's to that kind lengthened the nuance. the as process. At enrollment the One level, a get largely states think and interestingly, kind and So, you'd population that with have to state folks that funded at outreach be operations, with of trying expect what we're Open really periods, the period,

in has The is shorter back employer-related FYXX, we appeals anecdotally, for tied little We reduced uncertainty Open guidance. was lower other the Care that we've our around volumes contracts a backlog ACA-related the that be will under some than since bit do For Enrollment of that funding to in a indicated in FYXX Act had that part are the of our appeals itself previously Affordable And estimate we you 'XX. period, states of period. year-over-year. the calls led To or situation the we million down in the had work Act sense Marketplace federal increases the that Care through. biggest that presently first FYXX think about give Affordable revenue, a is a in a our worked to, really we directly from change revenue as about that's driving $XXX

expect our component we that more revenue in that normalized a to So FYXX level of returning we're for business. of

Operator

[Operator Instructions].

a Our Canaccord next Close, from is question with Richard Genuity. follow-up

Richard Close

with coming back was exchanges? terms conversion wondering, I handle terms you in how respect of Open of are going if rates Enrollment Bruce, people the could the in into guess any to with

Bruce Caswell

a versus I seen are enrollments. know that right would good that got lot say folks how not much of significant question Richard, re-enrolling of I'd break to into kind of out is optics are now. like right a that any asking new we've data that folks that's I've now. this

qualify early you seeing for I little insurance that some give Do kind Care think, of color color, is I So think more if I that we folks -- a else new But have enrollments of go up. need might obviously the states, component give to Medicaid actually There's for returning likely that you bit been eliminated. think what eligibility of those are that has re-enrolling the in other a for? Medicaid? folks I need immediate just in the qualify that more calls could think in out calls to fairly a been for anything, I breaking versus a much insurance. days it's I lot the Affordable related people limited and because are Act some well, saying, so got you've marketplace that Enrollment confusion who more Open folks one

generally, the really young given come conditions, to And or seeing sustained enrollments that what -- likely, in and in concerns been that the actuarially they're the it need day about invincibles of like they in have actually will be are you I've so presently that day enrollment pressing will be later fact XX? cycle. going we're health kind pool, fill to and Does uptick in help? XX in this reading whether that the Because don't

Richard Close

markets? you any general maybe of details us be, just Or additional little you second the A is just more and provide move to the would wave a next comments talk Yes. Can that your commentary? question Rich, there? could here growth if specifics on adjacent for position bit

Richard Montoni

at the glad be look you growth to I'll additional as commentary say, our to it we growth environment, some, I'll provide relates how Richard. really strategy,

the reasonable human around that that individuals before, a governments of I are confident and when those We to of from to that their mix things services. accommodate looking a and individuals the And macros governments this. long-term of many able growth, that's the We continue in obviously of in factor other very when remain into area of germane that the that more this place, and about simply see you've times just health play compounding for help the in happen. come are long-term not we globe and that lot very this there's terms number think heard increasing the question. are macros be think might

in all as these out very mentioned on there. of is are become has But to reform come these help transform it. when legislation significant the that governments demand and hoops The to So factor for social sense complicating efforts more and hurdles spend modernize individuals. more government programs and programs, compelled these really with governments really ways a the willing Q&A, along I to helping and is to earlier efficient I look the and

offer are So our at services the it. core on as and expanding forward, growth new platforms. sits actively in move we looking of We're top thinking. existing this our and we to past, adjacencies, And strategy where we some of we've looking that demonstrated offer already we for the new

platform which think us example, for about. excited gives for which acquired quarters capabilities I government we that new the a recent Revitalised, So, United new very us is in in the Kingdom. is It

is is Singapore plan at to We have which of that our it's good we And pilot that's part deliver time, do in is a that example point satisfactorily. the in good that but an geographies. And a leadership expansion in to value. progressing but our testimony situation going program one move Singapore, the world new be of the this intent to into

digital lastly, do like I And expect see the opportunity geographically. that So we'll that more capabilities.

to early state we've of are other of programs. their those going with doing it's governments least if using those to years, their business governments of And think their participation up help clients and in demand the their will along. to from us, regard. the to trusted dozens examples technology that's their it's applications for I part built take participation get sign like successes available of that governments that believe not fair that in to had X able look with an citizens ease a And MAXIMUS now or such Medicaid renew governments citizens at our dozens some of to to We've them better program and there. move and are partners going to decade,

quite excited that we're So about helpful, Richard? that. Is

Operator

from question is next Styblo, Our with Jefferies. Dave

David Styblo

I joined the conference quite late.

to a where bit at has the that about go things talked environment forward, type we're declining. environment this But quarters? if where color might to you little changing the of a the but a apologize for might had more about that XX%-ish Do characterized maybe for number advance. this the 'XX, new that in Obviously, asked in the past in have I as you that as point might obviously over or to sort be the evolving range past? 'XX or you you few be have in single-digits work return pipeline more growth a growth such stopped visibility you bit in little macro 'XX, So guys been you not be stabilized, that

that curious a other the used it to be. what environment anecdotes sign. about provide good to to any in could line But that So you returning your confidence top was hear

Richard Montoni

upon of the in great we think when to I And that macros. a of Dave, question. think come a vicinity I couple growth, that's just touched thoughts about And XX%, XX% mind. the

more that, the for understand to other rate, in think same think working simply to that remain gaining I I is in opportunities. We're double-digit significance. If solution new get place. they're with macros growth requires I So customers. But concurrent to the people adjacencies, the I working that to anything, thing are on think and platforms important also, than back a think solutions. on it the we And to end, same the

offerings. acquisitions new to back play going and will getting in Strategic a that, role be geographies. lead prior new will So service it's my complement that to answer, and

we X will our provides see new go think adjacencies move X we this will business, new a existing in as as as I as And pursue think doing think think strong your I that way a opportunities, quarter, take which existing of really demonstrated these lift So we context. that and we customers. service we're or grow to additional forward it job successfully, adjacencies into just that I is past and to the business, keep book good first in I

I'll for new raw with get the in geographies our looking ingredients new to the got pause to capabilities the So I materials there, capabilities, with, thaw a double-digit and raw adding say, you're new concurrent and think growth.

David Styblo

question the initial would be then, are these might that And you have contracts the creating just new follow-up helpful. That's Okay. tailwinds from that on drag. earnings

'XX. $X.XX, Fiscal to so, I think it Year in $X.XX was or

earnings that with a associated So think back where contracts, slides the early pressure where is And And of curious years improve a was is started think boomerang? it would there with much you that ago few out-year. quite in do effect as think up I'm to we have how called these sort about contracts on. revenue and of you to boomerang I drag? or guys associated X actually understand and revenue how really bit new how I them. X slide, a what boomerang much the large

Richard Montoni

Okay.

I think fair that's question. a

I ago, think few Rick Rick, Nadeau touched field that? upon that a want minutes to but, you

Richard Nadeau

million $XX those The be revenue to really for would is are the $XXX component million million. total to that million new to startups contracts $XX in related revenue the range. $XX of The that about

the With payments be beginning, will reached will find what you payments, at these haven't right outcome-based outcome-based the is you that zero those because milestones.

will improve milestones Your over time.

margin. you So time you'll normal breakeven. be able back if over these yourself to to should more losses go you then forward a FYXX, toward to take And startup get

where the off with year, we had we year. into than the a started targeted high contract digits then second moved in had loss third more then the HAAS in first the in in different no single the So year. range up we position We and

gentlemen, and call. XX%, the MAXIMUS session losses and particular toward participation. kind this of a time. end going thanks of margin. for reached have we'll range in time our type then You're which the your But see and of question-and-answer Services Ladies in from to more we over effect Human the for is today's a same case, normal startup go to breakeven 'XX, you

You this at may your lines disconnect time.

Maximus (MMS) 11 Nov 172017 Q4 Earnings call transcript