MMS - Earnings call transcript Q4 2021

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Operator

Greetings and welcome to the Maximus Fiscal 2021 Fourth Quarter and Year-End Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, James Francis, Vice President of Investor Relations for Maximus. you. Thank ahead. go Please

James Francis

report to thanks in President us. Management CFO and Vice earnings today and I'd Mutryn, our and forward-looking The also informative release of today we shortly. required information to a is by be or and being our results any with company of materially, statements as of and presentation a me Bruce Senior gauging our made nature. like Finance. of Please Caswell, analyze CEO, are Today's does be investors President may comparisons. in as recent everyone internally statements our law. not the reflect to for to Item differ press such morning financial most those that in With number only contains forward-looking joining predictions. will today David in circumstances, remind Good of Rick period-to-period and these identifying may be encourage the uses our risks face, and XX-Q remember that update to except that providing trends performance, revise or assume released filings Actual to including discussed quality events contained the XX-K. and events this to annual you subsequent results forms believe obligation result information statements XA We Nadeau, financial recent SEC, information. meaningful non-GAAP including review

hand over Rick a the that, press please And Company's call see of most to measures I'll earnings non-GAAP release. presented, David. For recent with and reconciliation the the

Rick Nadeau

good and morning. Thank you, James

is my Chief David become will the of the As career. here. my to right future. we as end and we succeed It as David to am all of great December CFO I a this finish that the month on in has team at for Maximus am Mutryn privilege accomplished Maximus time me and retire a Officer that during I X. in the place be help CFO proud person confident I to announced been will guide Financial together the January, to a

years. been the delivering a in to our aligned Maximus have last area commitments reporting over simultaneously to returns principles ESG all not with by of forum, while is dedicated making millions core accomplishments this we ESG unique services diligently five government shareholders, company to our discussed substantial in better-than-average vital have accessible stakeholders and we While this to people. contributions the more to

on rating BBB began look XXXX. MSCI you and at for currently a we progression the with framework, B a our If in XXXX rating hold

a believe BBB is score, be made. more While there we is to progress good

continuous Our quite and as of Social with latest commitment are ESG view ISS of October We our to we journey improvement. XXXX. score solid both, is two of Governance score one, ISS our of a pleased as

time David? report recent to updated have my at assessment our a communities fulfilling Thank the Maximus the Our most to citizens commitment serve. everyone we in includes to and with worked provide and ESG services ongoing you wonderful I essential who vulnerable for ESG experience. during materiality

David Mutryn

with which operating October U.S. Rick. accounts a borrower year, was completed of Education X.X business We acquisitions. strategic and creating Department large pandemic billion another have the branded for acquisition over accomplished servicing Maximus and significant student two million the loan including Thanks, Fiscal significant as closing challenges and in COVID we both milestones early year dynamic Aidvantage. of year owned winning XXXX with work response opportunities. COVID this and $X

also approximately increased $X.XX by result year. increased totaled and attributable was and billion revenue XX% the million COVID year-over-year billion of the As in for to increase as Attain $X.X total noted primarily in revenue morning, to $X.XX compared The VES revenue prior our acquisitions press company release in year. the response XXXX about $XXX together billion this year. Revenue to grew as of which billion a contributed the which work $X.X Federal for fiscal

year earnings line, was per On X.X% income our $X.XX. operating diluted were and full share margin the bottom

know, expense margin income is As that calculated the operating year. to significantly which for you increased assets of two amortization the after acquisitions during the closed due intangible

Excluding diluted the our be amortization be XX.X% adjusted would expense our operating and margin would EPS $X.XX.

contract million expected, point and specific leased Number which in Services assets, $XXX pertaining fourth fourth start-up quarter out items quarter. Number COVID as and than third a results. contract totaled and few segment. to one, in work write-off short-term Let deferred less is costs to million a fixed U.S. phase of assets $XXX it's quarter the two, fourth in the declined a response quarter me included the the

but our favorable. was four, you X.X% tax and our segment of are COVID a in the with $XX implied prior results, now comparable and and over Census from revenue our work there were period. quarter adjusting reason a previous our earnings diluted the And often organic rate tax puts through guidance fourth this in number I'll our While to three, detriment growth pretax midpoint range. low slightly year revenue of contract, or takes the Number XXXX our guidance fiscal expense quarter take response the significant more for results million was results. EPS showed normalized fourth most below $X.XX

which XX.X% due primarily billion $XXX write-off I the increased income revenue year. $X.XX The strong in estimated of an compared estimated compared $XXX million to operating the the margin segment, to fourth contract COVID type our to year. expectations experienced which earlier. contributed an Services for work of this in fell $X.XX to the fiscal and million in full to U.S. of response revenue billion the prior in segment XXXX as short quarter XX.X% single work was mentioned demand segment the of year For for The the prior segment

programs, operating response notably segment's the helped margin The redeterminations. The write-off, the pause had and Medicaid Services the for public health would in multiple the be core full COVID Excluding work negative year U.S. the fourth XX.X% on emergency has impact in XX.X% effect most offset quarter. most prolonged as the should October Medicare occurred for activities for income centers by XX extensions, remain fiscal Despite Medicaid that which negative communicated the work will for guidelines days. in services impact, and XXXX. this assuming and in resume the confidence give redetermination of the recently on us XX

of the For and fiscal Services of billion. offset from prior revenue year. fiscal XXXX $X.XX an this to COVID acquisitions, XXXX segment, the segment partially the in COVID estimated segment an in contract. to the estimated to response contributed increased work the the U.S. Federal work Census the benefited compared million response of XX.X% to end type by revenue due revenue work million The of $XXX lower two $XX

the Census As year. was was $XXX the contract demand fiscal made The loss or compared operating XXXX, $XXX $XXX million I in compared margin revenue our segment as approximately to to Federal XX.X% increased rebounded mentioned, than this the in in segment's most driven margin year. margin contributed prior million of contributed benefit the year. for the X.X% non-recurring operating The million X.X% from that Outside to by less as prior Operating in pronounced U.S. strong several The Services quarter operating prior XXXX Revenue experienced future U.S. million million. segment to two a acquisitions pandemic. for X.X% employment positive in was was in impacts a short income the the for the year. $XXX results. fiscal quarter investments estimates. services fell expected The it $XX $XX or and fourth XX% the our million This income are of

of quarter noted startup anticipated on the losses, U.K. XXXX we ramping. As the earnings fourth notably to fiscal Restart due call, most August Program the realized

flow to Let turn sheet items. and me the balance cash

$X.XX and this EBITDA cash September had equivalents net as to XX, cash we pro X.Xx XX, had XX, gross $XXX debt for June in the allowed As our XXXX, year unrestricted The of credit and billion X.Xx; is ratio full to accordance of XXXX, of forma at compares of of September calculated we XXXX. million. with agreement ended debt, cash

to in $XXX to the and flow respectively, call million, the our from fourth fiscal year prior quarter XXXX, $XXX free Cash we period. million debt. our for As used $XXX our we compared operations quarter cash stated free and for cash third million on reduce million $XXX was flow as totaled flows

September addition work and cash of XX government. to last from new This the to more $XXX than on driven deferral improved XX compared the in of capital same flows as working XXXX, Pro strong by resulted XX, DSO good day earnings, million. permitted U.S. in days the In forma at collections, decrease by for days year. payroll advanced the was was payments investment with taxes combined

to Our XX DSO days. XX target remains

per $X.X which and approximately million midpoint projected share guidance operating amortization is revenue between projected Turning implies $X.X to fiscal be year margin billion. this includes earnings to billion estimated $X.X. between and XXXX X.X% of expense. of Diluted to income $X be of The an $XX guidance; is

amortization operating the to adjusted diluted amortization the margin, EPS yields Excluding implied $X.XX income $X.XX and is of expense expense, XX.X%. excluding

range cash XXX and to and between free between XXX $XXX $XXX expect flow flows operations from We and million million. cash

new deferral investment fiscal eliminated that the in projecting work in are matures. We the working payroll and as the is XXXX, tax increase capital will

between the share million would rates XX%. We $XX.X and XX.X XX% assuming shares XX rate, expense million. weighted effective should change Federal to to between expect and interest be in Absent and the $XX be U.S. be tax average we between no income expect and purchases,

Turning our Services XX% U.S. to the segment we and for year. segment to XX% between margins, expect be

which to line U.S. our This in the Aidvantage over program time. expectation be deliver in portfolio XX% we includes similar BPO Services' to XX% margin expect to contracts the expect in range. margins We federal with Federal the

contract we increase as as contracts and with program expect lower our the many matures. of start to margins Aidvantage with the However,

the outside margins U.S. Finally, range. in we income X% X% expect to operating the

some first began is $XXX down is fiscal which in fiscal million top work support to of commentary guidance. COVID year and of work unemployment the later XXXX winding predominantly with and line, some periods expected that provide to XXXX. me insurance now insurance performance. support. about administration on to COVID contribute leading the related longer-term work, On notable shorter particularly are in It note stages to work tied currently COVID of vaccine our response the is revenue that Let to relationships with response is began unemployment important item

add XXXX $XXX item start-ups to prior second of We the outside The earnings is million the revenue startups restart. thinking our fiscal on these will U.S., unchanged call. which forecast the from U.K. that including is

be and these There The VES $X third item billion our fiscal full make up is from approximately of the forecasted Attain contributions Combined, period will Federal, the acquisitions. acquisitions Aidvantage revenue acquisition. XXXX revenue. three

year. core the out normalized reflects that organic top guidance demonstrates of the growth business than contract our revenue fiscal in $X.X by work. growth over in the line XX%, billion. the course separate increases the COVID and of in a our engine a you Of that, of contract XXXX. acquisitions less If year of small This profile COVID is work awards Census $X in amount work, the contract with were new fiscal that XXXX, awards new driven response We total successful accelerating, with associated winning was billion with value

Our with largest U.K. of the million more single-award years. value than Program six contract a total was over Restart $XXX

segments awarded the term U.S. longer are addition, In new work. which several of were contracts, all

fiscal On primary the returning anticipate first the Number core pre-pandemic are our earnings factors half. line slow XXXX one, solid two of a in but line, levels the to to also to creates in a start delays sight this. half depressed programs strong of we fiscal second a causing XXXX. continued bottom There

U.K. a core continue the reminder, U.S. programs losses the to now the with see the Outside before return half fiscal operating of we The noted in segment, work we ramp As COVID are contracts is decline Restart, the experiencing. two, what which XXXX. startup in notably previously may we first will most Number that

in earnings and We steeper in our margins by significant achieve in XX% currently the the ramp the programs with of guideposts The fiscal performance anticipate of earnings, XX% and continue improvement these be contracts operating half the XX% the back are and year will progressing over are to our their To meeting operating corporate we XX% to midpoint breakeven quantify financial income of XXXX. expectation. startup forecast to our in of realized second half to income well lives.

quarter to quarterly the in of the less While of lower exiting the the but fiscal first We fiscal to look revenue segments as are fiscal our over than earnings. run share steep segment fourth profile to for I fourth the to we similar ranges year, noted quarterly first rate is normalizing strong year, year expected a quarter. be course forecasted rate. a is margins not at anticipate the I The do three earlier. earnings for XXXX the expected margin guidance XXXX valley quarter the will of of that in improve the expected all profile half tax provide the suggests the after

emergency a of the emerge many of ramping scheduled which right up of other leadership and closing, fiscal with guidance cause Delays our portions unique that of our may outside restart guidance reflect short to I, to the years and our expectation third and XXXX. that revenue fiscal and The proud two Outside the Our in move The will startups in awards redeterminations along company. are begin quarter. fall will for to new in fiscal the Maximus how XXXX. earnings does fiscal and stronger are are challenges to public the last control XXXX health are to potentially revenue of Bruce, any and rose that we have generating items overcome In U.S. work these to conclude team Rick broader

organic see With as We recent his the like personally years. will and leadership are seven the call I over pleased would to I that, acquisitions to turn the to come of improving, the we for Rick also our for well. out growth underlying Bruce. thank past performing pandemic

Bruce Caswell

On David. Rick, behalf for your leadership. we management Thank our you, appreciation of team, the offer deep

international of proved accomplishments new a at funding large and not and through major geographies, many across company our note supporting our to talent M&A the of maturing a growth. corporate a should diluted back and ended we facility $X.XX. tenure of compound as the acquisitions, into had with including four our April Mentoring closing revenues when debt $X.XX, building stars advancements. countries earnings acquisition organic You $X.X many new corporate inorganic reporting leading pushing that billion sponsoring, and company in and we XXXX, with billion of in in growth FY at we're rising six think navigate helping and to have Acentia vital growth XX% $X.XX but Today, revenue of including Maximus which our diluted I championing as new rate your a us company, from we and our ESG VES the during strategy beginning and for respectively. development XXXX, strategy grew per operate EPS led division sources credit share to and nine, the as office our capacity scale, XX%, only pipeline, finance through CFO, development and

approved leading FY about more. several us brand Department making loans articulated I've scale. which programs in government helped delivery critical expertise Maximus I to time executing U.S. Your we we partner all continue the XXXX our these Aid, growth leadership and are on October as a global spend closed us. wins, October has in made that acquisitions, Student a will goals contract realized Since Thank again a of in or of of to since Federal of How and on of January you those progress servicing strategy refinements April the support Aidvantage. four talking some our beginning today novation FSA, transitioned the completed large begin On Education, acquisitions the X, Federal segment four my name, toward to we've 'XX, XX behalf XXXX. student on the Navient the under with new Corporation strategy.

provider or scale student the and our an provide to through trusted interactions with Maximus as a long-term As our increased both component the development government, support will partnership and loan core with citizen availability manage and do This the end-to-end relationships that services. We services Aidvantage and our support opportunity consumer focus approach business at loan independent and conflict help our partner successfully fulfill FSA's government, borrowers. we model. insights, for apply of business. experience remaining build customers, FSA a an origination, companies is and FSA while will on student of is collection to view quality-driven ability of engagement as of agency's extension and servicing the line scope of can core a and long-standing never on expertise to mission not in consolidation borrower demonstrates to free,

recall, we on will likely this transition work have may to next-gen contract position future the which contract a you FSA As periods. vehicle in

our the Our the of goals borrower FSA's immediate Navient through priority borrower under and includes service, is management and experience accounts repayment our contract. the they plan high-quality February to forgiveness to successfully on million navigate loan performance transparency We and is to servicing student promote support the and to that X.X improving repayment and accountability transition obligations monitoring focus loan XXXX. stability subsequently role compliance. authorized review, implementing quality available continuous provide borrowers, and will resume student options loan best Again, to related practices solely end, performance, transparency on To improved programs. stated for maintain many as as X, greater

an recently as Likewise, expansion juncture in critical Customs securing and for Commission and moves and for pre-pandemic it's Securities disability work evaluations, benefit to the U.S. the and Meanwhile, success, that operating to we or bit expected VES planned, will Attain delivering as color, recent financial To not as of particularly the that of and consistent As going FSA, proud rebid a and veterans critical client provide originate with analysis. Exchange their in more conflict Attain at acquisition volumes achieved of have Immigration loans. colleague's VES our colleagues integration scheduling our supporting consolidate and including are own, Services results our free closer independent model. partner the our a I'm program mission. operating are critical acquisitions record

enables has combination past approximately in more UK. share of team centers largest the citizen Connect providers joined Kingdom, services and to several respond As locations, this Maximus segments. of year provider that billion resulted The pleased strengthens the country. tireless markets, support expansion COVID including professionals our work work and response employment, people and engagement pandemic. in of the $X.X capabilities contracts This we administration a government into in help in across Assist, lacked Maximus many market-leading administration employs as for the than contact of to our serving Kingdom, than United governments now X,XXX the more approximately and XXX fourth I'm digital previously center prerequisite United a the capabilities our for of X,XXX program in as across new country, acquisition this to adjacent one includes healthcare disability health our program opportunities procurements.

ability where Program far, at Restart additional to driving employment of people and effectively U.K. program, Thus for by Maximus notable several than year, outside the Our with quickly delivery June our for employment nearly XXXX, the provides our and finding respond provided points support work our against have as beyond end help U.S. clients we support unemployment more enhanced of thousands since our of the This projected. fiscal X,XXX tailored delivery opportunities people such restart has the startup This states the includes we won back sustainable began work. people services new into program now insurance very pandemic. relationships supported we the favorably services to been proof work forecast. tracking

and to XX. new of September pipeline awards Turning as

of work, represents new billion of XX, not $X.X September September than For yet COVID $XXX awarded the signed. were work response Further, $X.XX value million awards quarter $X billion in billion of healthy XX. our been signed but total with XXXX, awards with that fiscal business. contracts of less illustrating signed have contract work the of level billion Of associated at a $X.X core work, new there fiscal year were fourth year worth at full another

our opportunities. our addressable Let attention me of pipeline turn sales to

total year XX $XX.X of proposals Our PHE the the in billion quarter total $XX.X Health of will of expect quarter approximately months second billion $X.X as long the The We XX $XX.X expire new of the preparation billion at 'XX fiscal or contract we September of of run in pipeline this Public XXXX. mind, Of pipeline, XXXX. in we first FY billion the rate. in billion start PHE. half in opportunities. a value a in September is tracking. Emergency, compared exit opportunities at should since solid to XX and work anticipate been proposals comprised XX% at reported was It $X.X has David pending, means, represents strong third the the end With which that noted, calendar pipeline

area that anticipated received create substantial medical federal a attention. for month, together, or view market national of dynamics for anticipated has mandated 'XX, business. Taken requiring half include second into Biden COVID-XX, in conclusion of These direction, January and and also not fully the to against with momentum also that just more exemptions and the this goes contribution exiting order is The the in want OSHA religious I our wins of of the signed pipeline. that per and and organic of employers the President's reasons. also coming U.S.-based an services which positive dynamics operating employees environment online. XXXX. company the a employees resumption in or their new government work testing new effect XXX contractors FY limited 'XX address vaccination for pre-pandemic the activities, Earlier integration redeterminations weekly PHE acquisitions phase, contracts vaccinated benefits be including executive an in to September, U.S. President In but and the with startup FY maturing

education of off requirements are and employee a frequent which We vaccination paid time resources, and for implementation planning regarding options. receive includes reminders extensive and to lines these time

As the and and guidance accordingly. have throughout highly and safety talent prioritized procedures is for well-being monitor actively competitive. have we pandemic, Demand we update our employee we

and our workforce in was, result future key people. over may as hiring XX and to meeting past has said, attrition difficulty Our implemented many our a some with differentiator support anything, talent or we if brand Maximus the being programs strengthened implementation protect months, That of needs. that quickly benefits strong existing and these the requirements a

the hired more around than XX,XXX we 'XX, employees world. FY During

people identifying disabilities, development through practices recruiting evaluating backgrounds. addition training and a the development support including XXX,XXX are tools welcome with To socioeconomic learning available, and employees, those focus opportunities. in other from programs that veterans, our workforce, over to talent resources barriers on online of diverse varying language Our and and

environment, requirements. to due to continue on-site recognizing customer that some required in employees operate We be a are hybrid to

line digital community imagining us We and our On planning process working our collaborative the new Operator? position has bounds. for the of And ideas talent XXXX. Investor define business. even with that and historical energy and put open a clinical over pronged an long-term to in the outside ways in Q&A. pleased are that look strategy through that value and are the more our business our driving better note, over Day final strategy to workplace three looking forward next across expanding do for attract our the business, I'm necessary of geographical to sharing only we flexibility our table execution refresh on of With through we and we phase transformation I'm initiative journey markets. to since I off our led our for this about excited as the current further but balanced and focus markets and future participation yielded kicked shareholders expanded seek have insights X-year clinical in to planned inorganic the became the our technology would adjacent customers with will the concurrently analyst new in growth backdrop and on citizens like look horizon delivering from acquisitions shareholder that, we our formal a our growth FY 'XX with core our CEO the and serve successfully this annual during expanding the X-year will what organic organic Not for than already and and we we process. to in set has

Operator

[Operator Instructions] Our Donald from first KeyBanc Markets. question Hooker go Capital ahead. is Please coming of

Donald Hooker

morning. luck future Good And best with of Great. endeavors. your Rick,

So seems me is year. looks on second the sense that? half is message the your line to sort run a get Or that? one wrong the if north confidence And half. redeterminations. guess what to it these rough I like the the variables big on a EPS of that? share sort bit visibility a you here. of have of you're that then $X going but exiting that, of And I'm wanted year maybe rate with I message Or I here, going of be the to of the the around guess, first be the Correct any big have to a restarting of timing just quantification of the of

Rick Nadeau

Thank you David question. I'll answer appreciate do for comments. that Mutryn let the But it. I

David Mutryn

Yes, expected of the Don. that be heard the say remarks XX% that earnings to we Thanks, Yes. my did in XX% prepared half to are year. you in the back of

So I that redetermination, the respect what assumption built is your programs. our would to say there. the follow With guidance April be math of X on would I the resumption our those in

potentially guidance. put I business that, on on the in of new could some slip not our range could starting say the that that risk bottom with that timing. would our time, other out of risk, While some I accommodate along pointed end pressure

Bruce Caswell

conference coverage. of that great wanted color about referred of CMS states, topic unwinding just well. summer ensuring continued National seeing lose and Don, we under of policy dialogue -- is kind to This a more the I topic NAMD XX that's the concluded. -- attention period XX this with Medicaid And broadly to million the don't when during little this This Brooks-LaSure is a Association you Directors back just being what's What the discussion. I cliff is to getting or is of beneficiaries CMS spoke importance recently Administrator, Bruce mean, and are a the off Chiquita fall gained that as on going lot as to the at as of PHE as these coverage the Caswell. give the Medicaid pandemic Medicaid of a days.

not lot for of are million going pandemic effectively, only enrollments because to we XX coverage million that during gained talking now there's folks is on XX the a planning to my So have eligibility. but sense Medicaid those about re-determined from right XX because went

needed further Act pick employer-sponsored that's great choreography qualify between the operational so And but so be to the needs there's rather by topic to numbers on suggests it What the tight, variants the that there's so subsidized around that is to we Care programs relates we've benefits anything is because dialogue a it sensing caveat likelihood different pandemic, or presently. tight I dialogue quarter for the based assumption Affordable around shift. exchanges right? existing was everybody strains right, as what's is not going with ago, the are kind or deal very now And insurance But and choreography coverage this topic. that this assumption operational that under going could saying, will which a of up the cause any individuals. there -- forth, happen is, Medicaid is that a that and our know that continuity than environment that you of to solid of this a a to seamless for never

Rick Nadeau

do Don, Thanks. Great. follow-up? you have a

Donald Hooker

that and the rate on Yes. the half follow-up I'll do the of year of one theme EPS of sort year. coming the of second the run quick on out

are trying mind or other the variable, to The acquisitions. around the around get sort my of hands

something give acquisitions. of, $X And billion There maybe I billion. little a you you $X pieces around out color revenue U.K. that. bit acquired. mentioned how about billion about Can you maybe think the that are that different to acquisitions incremental break just I a talk of the more bit are third, from us and growing? And talked three a think, You $X in little

David Mutryn

It's Don. David. Sure,

on a we It's billion clear. not incremental million is our total $XXX the revenue in expect to color little about from Attain the to of Last And So number VES from an and XXXX. to from $X year-to-year those. give it. quarter, fiscal be said you revenue more

you look at For seller $XXX the running of filings year. you business, the to of that Aidvantage, can per at it see of revenue $XXX if that was million million about

rest really So in all that three Aidvantage add million those now. $XXX and to VES growth we we that more the and the of Attain, is expect

Rick Nadeau

question, please. guidance Operator, on slide XXXX, XXXX then you; see to fiscal in of can billion revenues in XXXX. fiscal and you million And next $XXX to back commentary growing acquisition the $X for

Operator

next Strauzer. Our is question from coming go Instructions] Please [Operator Charlie ahead.

Unidentified Analyst

want wanted Brendan spend Federal. there's well. Charlie. on sounds a for is bit morning, investment there. and margin, I the wish Rick some increased Good as this U.S. light [ph] well, like obviously, And to ask We costs is The to in it just on

us walk And there? exactly be that If doing you're FY could recurring you anything through for just what 'XX?

Bruce Caswell

Sure. we Brendan, believe to benefit going that ask we've that. these it's Bruce. future I'm said, periods. obviously, David? investments to David And address like

David Mutryn

Yes.

a XX.X bit noted the Federal short the for the margin and we previously as OI quarter segment fall X.X% which of year we had had So what U.S. fourth in the communicated. did little a for remarks,

period. modification the another So lower contract documentation item future fourth paid that point a will benefit little workers on agreed believe is some a I'd investments. and in having vaccinated the And revenue. was future we where also the There and These staff more we out to for that margin customer but accept a vaccinated. the incentives bit one made to the payments funding quarter with item be to were we the that with overall increased

Rick Nadeau

you Great. question a follow Brendan, up? next do or have

Unidentified Analyst

But the the we're with just us kind really -- back. get just the can your to to first quarters be you on. cadence some through of to from from Could work the similar half? second margin drop is dramatic, us COVID to the to is going good really We guess, redeterminations half but with were give I guys going cadence? half starting how, moving a expected the getting the an it's you services second doing be a higher idea of of coming know Obviously, Yes. walk in where in follow-up of margin. idea service off that which -- after margin you couple the Yes, just of U.S.

David Mutryn

Sure, this again. is David

we yes, also that is expected services, U.S. improve be for in is margin and XX% XX% So it said segments. I be the the would over in the 'XX. expected year to out margin between that pointed FY to as all

range the of that, slope back to we in the you of little in end just services, expect XX% the to particular, year. would of U.S. to For give high sense half of be that XX% above the a

Rick Nadeau

keep back queue. we'll have for No open, to anything else Brendan, line in get need your you if the us.

Unidentified Analyst

in jump back queue. I'll the

Rick Nadeau

ahead? you don't go Why

Operator

looking be please? to sorry, for live again, made you're individual which I'm

Rick Nadeau

here. We That's okay. add quickly just me let -- let something say, me

appointment might the audience the like hear thought later an shareholder who'd management the today call have answer We a We this team. on today well. topic like with the to with cover to as

business explained contract? to steps for I taken are would be, the is the what you everyone. on how Maximus Bruce, is helpful risks speak That topic address that this think, Aidvantage So to earlier. Could you the being And handling transition?

Bruce Caswell

to. Absolutely. I'd be happy

forth loan been including outreach. of terms So I'd is by been team that Navient in borrowers. risk delinquency risk them program tough accounts the reminders by to begin and provider and the risk a first called are of steps the there's so which to program help that mailing for important obviously, critical in to this try those keep and terms to-date And proactive all, of saying One accounts profiled outreach running the elements this taken, falling that's has in two current. to is to of are into are process that like

second of or income-driven really that Navient provided On them We're excited service. called to IDR. to is historically. component to continue KPIs, provide welcome the to team both service The has those excellent Maximus repayment,

prepared not loans. my note very I As in originating are remarks, it's that Navient, consolidation unlike important providing to mentioned we or

be service be as of a rather that at than It's is approach. will there borrowers XXXX to conflict you a in this dynamic facing prospective have a was lead don't a loans need resume into in February same the this government All customer very lender in all that the for and we period manner. independent So interest. time all nor could providers risk We're super adequate profile will effect phased of which go which will can obligations the direct pool reinstated. to during the -- the servicing potential conflict when staffing for and because addressed, of delinquencies payment important number loan federal be free same program the

they to our we're ensure very time staffing historically risk I of that that with team. that envision the a was borrower experience model that extended program. also servicers look no that add was to providing So, improves FSA, and as company the in by end, same that of the transparency preparing also the level that on might been citizen-centric that and contract terms contract and but centric We're services that the frankly, intent we're pride FSA a outreach underpin accountability us and administer should to provided that ourselves all committed course novated To strong that answering contracts programs we the surprise. to continuing have phones conditions we aligned normal have to Navient work by as every and on as now forward that in operate. come in do we quite We really we on that borrower in partnership working in a the day

customer also manner think and complaints Contractors monitoring So to borrower for related timely that abandonment as think a which There a established very so to to minimum are is rate, threshold in interaction are common the thing. and like a there's related respond in There's work performance to things. good we required those do. satisfaction. contract and metric metrics We well. accuracy full quality a good forth we

will greater contract the this a will the new believe of we overtime on will SLAs driver look, the accounts substantial lead that and know KPIs that assignment volumes. we achieving So be have we in now and to and

held like saying this much goes of It a very where we're without supportive. model contractors accountable. So are

Rick Nadeau

back those for Thanks you. Bruce. thoughts, Operator, to Great.

Operator

This Instructions] participation. you Q&A to you of Ladies bring session. Maximus thanks [Operator us your participation. for the we for thank end gentlemen, our your does and

time. You may at this disconnect

Maximus (MMS) 18 Nov 212021 Q4 Earnings call transcript