MMS - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to Maximus' Fiscal 2024 Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jessica Batt, Vice President of Investor Relations and ESG. Thank you.

You may begin.

Jessica Batt

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

measures the that, XX-K. And see For David. the non-GAAP company's reconciliation hand and I'll presented, a XX-Q recent with most please to Forms over of the call

David Mutryn

morning. and Jessica, good Thanks,

Our board. exceptional the growth demand across our programs capitalize third in our of to demonstrate the backdrop against quarter strong results on volume ability

We you are I'll for color our next to very last the and the through year, of fiscal quarter this thinking share quarter. I'll some guidance third then for consecutive pleased early year. walk on raise

of X.X% the segment explained posted period. Results segments U.S. quarterly the quarter, the and level. growth, X or best year-over-year quarter. with and XX.X% billion being to the for EPS Turning income an of adjusted Maximus for basis. at Services, driver XXXX, was growth, Adjusted revenue margin All Federal operating compares to represents for which are fiscal $X.XX our prior respectively $X.XX $X.XX XX.X% the in year primary which XX.X% reported was results, the year third quarter organic organic largest, on

go So let's there.

These U.S. focus cost margin of U.S. high programs. was compared all revenue reflects performance-based demand, the third growth lower operating results a expanded income also Federal in higher and quarter $XXX Federal was favorable prior clinical on plus Services XX.X% and increased XX.X%, The mix by reflect organic which the predominantly Services segment, period. temporarily for in to margin solid execution million, XX.X% driven as higher volume in For revenue a space. of revenue. on year our the The particularly assessment in the period to

$XXX excess For from the were growth, all income operating to and for U.S. The the year the strong was portion exercise. margin XX.X% which X.X% across segment, quarter due a the organic, million. Services was to the volumes period. Medicaid-related unwinding now increased revenue third performance portfolio, prior XX.X% to This of completed for compares

good a quarter this versus As in base of demonstrated the slight Nevertheless, still last large the there expected, state overperformance. is normalization quarter's there a contained this in segment health was programs of XX%, across temporary some margin though segment.

segment which services reflecting within With in above outlook year portfolio. was fiscal loss slightly guidance fiscal land breakeven. shaping full expect this the volatility I'll offsetting left, Turning in on driven the And today, the to the X.X% for quarter and $XX.X confident business Organic segment remain organic a our small effect base we year-over-year realized divested ability operating of to to growth reduced employment we to the by U.S. contemplated quarter X.X% our primarily diversified partially revenue its that this the discussion. year. one period, growth. quarter. of segment, to of the the in in the $X.X touch U.K. for million The and this with was million prior the businesses the continue compared to more in small million increased Outside XXXX year loss $XXX The

the for balance at XX sheet and operating quarter million. million, activities now this the was and finished to free days. year flow Let's $XXX flow of cash DSOs cash Cash by was third turn quarter items. $XXX provided

of credit During our and our to with the are net Form agreement last X.Xx and in to provide third itself, credit X.Xx More our quarter, the agreement with amended capital we The us available filed terms extended broadly total prior our early the further on quarter improved are from flexibility details, June. We agreement ratio we this and allocation debt-to-EBITDA execute coming quarter. and the the capacity dates. priorities in along the in X-K ended billion quarter similar debt $X.XX years. to maturity

EBITDA credit debt agreement. accordance XXXX, fiscal adjusted for a cash to call of On by the able be net de-lever our year the months allowed to of this absent As calculated M&A, I XX in that we our noted ratio last to end as in should reminder, is our X.Xx with 'XX. November

This shares have one program, the We repurchase just works an of price $XX.X to opportunistic XXX,XXX share per XXX,XXX In we we totaling to totaling are early. Under share. pleased an under our quarter $XX.X million. to quarter. repurchased July, million in done so out $XX quarter average additional subsequent shares third repurchased end,

Finally, summarize current let our me capital deployment thinking.

capacity below currently a that Xx, long-term opportunistic Xx of M&A target organic and our accelerated ratio time. over an enable remain debt we Meanwhile, share a of are program debt increases that opportunities. will pay future platform the comfortable Acquisitions maintain our capital. growth with term use to pay dividend repurchase to to near preferred are we earnings in we for down for build continuing While

using on million our billion which and midpoint guide, the $X.XX and bottom November. for guidance guidance expected third quarter at the the from from divestiture-related guidance, be EPS, third our from to $X.XX the to $XX be about from guidance and of extraordinary Adjusted income of million time per operating in now estimated raise million is our year, to and This projected in the and to November, and results initial previous $XXX and billion, $X.XX $X.XX midpoint. Adjusted this million is guidance momentum prior Revenue business compared top be $XX which line. amortization is between $XXX share. now an to Moving guidance in up up intangibles, the up million from guidance continued charges, raise is between reflects and and million, $X is us increase to $XXX November. $X.XX both a rest between for enable initial excluding $XXX prior initial

approximately CapEx $XXX full-year outlook As X% margin we of about an the This midpoint on higher of improved during and and flow forecast, XXXX. the organic $XX guidance also and million improved a XX% increase growth a million of fiscal to cash at result earnings raising is implies of adjusted year. the million OI of are for $XXX The reflects free the remainder and on the an basis. Also especially quarter. representative segment quarter the to for also around new of margin a the OI fourth looks quarter. business, full-year more of for XX.X% that a is fourth expected implied XXXX, compared in Federal balanced adjusted typical fiscal this as to the which is profile of deliver guidance extraordinary U.S. third The basis the is results expectation between the

and Our XX% in We margin meaning should range, anticipate expect in is fourth view basis, and still smaller Services we this segment extra a the shaping of in fiscal approximately on in be expectations. to year, a the with line completed. Medicaid-related footprint prior tracking the quarter anticipate the occur U.S. on quarters. In full-year of a early the efforts Outside once overperformance to segment activities completion segment XX% slightly the the still reflecting segment, XX% U.S.

attributable stability that next a of for breakeven our those operating across moderation While in business the associated providing charges of $XX has result fiscal fiscal margin simple some a than Rounding total that new assumptions previously has sizable XXXX to we provide in which, for likely the per be the This and business this year, represent to of way look early to and always X% of term. for guidance redetermination. not should in anticipate Similar fiscal We adjusted that strong attributable benefited close by that of in this at recur built growth that 'XX official would total call as organic many are accretive, we existing years fiscal standpoint, not may this that has the we off. From be to would in will recognizing, to fiscal anticipate XXXX raise above divestiture-related a guidance year. other similar into have be X is to the about approximately across interest increased been have million and been increase to to outpaced income. roughly a normalize most normalized that which guidance mind that grow replace impact roughly from guidance. to expect year. the that expense guidance is X organically expect early assume guidance, of to to overperformance impact. will thoughts with revenue year, on digits segment $XXX few on expected we year-end midpoint last don't mid-single $XX as guidance year amortization line recur such fiscal demonstrate for the intangibles Maximus in that we The would falling our over base, million moderate, to share fiscal us. Bearing the revenue and longer notably overperformance on EPS revenue in more earnings million. I'll Then also current There has A precedes revenue, the XXXX. November. quite said, exceptionally programs, transaction some of out of slightly necessarily continues raises, beats the X% $X.XX bottom an year would given XXXX the volumes atypical which fiscal would overperformance, a revenue, a quarterly that not growth portion XXXX and view is fiscal that across year. revenue strength, next expense is 'XX fiscal approximately we with this half significant year. nonrecurring finish however, Three our Meanwhile, year this a of consecutive next of

the perhaps confident optimization, tracking at least to in continued to are the expense. We're nonrecurring range. least partially achieving Outside and we investments or we of number And interest is sizable margin by lower work, pleased capitalized next impact XX% XX% anticipate bolstered guidance at fiscal of CapEx our adjusted cover while be entirely software. XX% the to year. included XX% we XXXX note, margin U.S. fiscal implied in OI performance through long-term However, Also that earnings a could the XXXX our improvement

Maximus we conclude, CapEx of early with our organic represents formal year, value view, on very expect to our that X.X% sustainable enhance a service allocation. With return and has performance provide in and in national of the driving range to financial are team many revenue would we remain Again, growth to of with and guidance broader capital X% mid-single importance. as Bruce. digit to which for hand to shareholder delivered over areas this to flow. next focused customers call the disciplined over free in November more I'll the long term operational that, We usual. To pleased We the typical cash plan and

Bruce L. Caswell

Thanks, and morning. David, good

to solid volumes of are results business year. we the shared delivery the contributing David has enabling We quarter, model, our higher-than-expected financial efficient strong positive across pleased of fiscal a will quality benefits another expect High today. be to business have and delivered the reflect what

within awards we're demonstrate services few areas strategy that like to Recent focus in of Investor digitally X our excited I'd executing strategic modernization enabled. To our to outlined focus areas: and refined of technology the on customer continue our We delivery future end, about. a Day. continued health, share XXXX

announced technology our designing a all the a to enhancements is announced Agreement, Services, at technical the our IRS $XX of We management begin division operations program. Valued and evidence accounting our million functional teams award internal fiscal recently of order Development technology, by short, our services. Blanket of under this Enterprise expanding inclusion or we for supporting Operations in new modernization TSA X-year X the support the mission. Earlier commitment Let's developing period, the of for with BPA. and the pleased agency's year, on the first task first for award over approximate agency's EDOS, and task the the the first to will are few been are wins. Purchase with several last Under have client operations, value over our IRS recent BPA We order, internal has winning our or collaborative thrilled the Security for years. modernization continue year with management were strong to an while be for task opportunity decades, and relationship orders or and selected $XXX to awarded. one IRS work Transportation million valuable and successful total The we Administration innovation contract OPTIMA

reported filed incumbent favor. been Press, pending. As protest our initial an second and resolved has Trade the A in is in protest by was the was subsequently

to While we This remain often teams our and qualifications revenue its which technical acquisition mission. the support awaiting resolution, the in high illustrates excited award value on our discuss TSA synergies. rationale, proposition recognizes is

acquisition from held Here, XXXX best business. our of was qualifications relevant the to the value to Attain work, vehicle. stems the technical the Attain the deliver while Maximus party contract Federal

Broker deliver contract, were services' million proposal, TSA. In supporting strength $XXX contract focus enrollment U.S. valued teams providing the of the agents the needs win increase securing combined and scope new awarded additional legacy area of our our at center we'll should consumer. Our new the our we of efficiencies the we Under in our better digitally-enabled by were in in leveraged serve another experience recently with company over technologies successful that process, segment, Enrollment of that years, supports for Commonwealth X of the strategic Pennsylvania. contact the customer rebid to a each the in Services Independent best our

is discussion and contract of where federal recently time disasters, impact declared intelligence Agency, included, close artificial supporting a with we up by to recent nearly Management the is FEMA, country contract, focus live government value applications a priority history a the a be to needs team our Hurricane excited in Under with staffing from affected that I'm will of the when many agent of Emergency to companies, a long impacted announce has seasonal the empathetic new needed with individuals Federal which the a XXX Finally, impacted work wins, potential end $XX connecting considering on urgent answering Texas. At those on by skilled of support FEMA the a to calls have and disasters. our quickly Maximus reminder operations, the get our Beryl at those general accepting day, urgent a million, so of are support around in or with our customers. agents by of of total potential this

Pledger. our take At TXM. be will as excited solution policy under technology public of with quarter, Last Chief solutions. to and Experience for implementing our an Officer, I a the technology-based CCaaS employees serve Contact solutions Management seek deploying to added capability continue developing in We about Center Digital our leadership Maximus we're secure, as cloud-based mentioned citizens. The to or the efficient complex of and single and Total Information Service we that pride or history Derrick be governments solutions deliver providers TXM differentiator provides scalable, Maximus,

of to delivery state Services or TXM encouraged an our Medicaid Systems, pleased Federal are the about growing area We of our with Medicaid Services pipeline we best-in-class transition U.S. disruptions or opportunities term the growing for by solutions configurability. solutions reducing segment. We're supporting greater programs, in Enterprise MES also technology implementation and Technology support while of our MITA, Medicaid the segment. our risk Architecture, Guided functions, Information goal providing MES, program in specific CMS' Medicaid modular

customer the of services MES our With well make technology clients industry of policy, and transition. both to strategic deep digitally-enabled. move systems modernization we and The our support validates positioned to as Medicaid understanding areas they are further this state

programs the see We context disparate. be health assessment been acknowledging with pillar, a We're contributor bringing benefits coming our pleased over of have expect the of of we're working positive strategic the historically that this to of efficiency the consolidate for our states future years. In our anticipate together of closely consumer line We and much far a increased in the term. for shaping to that and and goal experience medium better state. ongoing top the customers quality have the with will opportunity programs assessment impact bottom to

Finally, segment, in establishing a own states Services interested U.S. we're number of the state-based greater in exchanges. their seeing

expect the in Given also this medium marketplace, the federal moving and from term. of we dynamic will complexity pipeline the timing contribute

now me and metrics to our turn Let pipeline. award

June awards were total but translate in there period, third of X.Xx contracts These awards part million For Further, been of lower signed. fiscal XX-month than contract that have XX, period rebid book-to-bill worth activity. approximately at not of $XXX XXXX, quarter of into the value. yet billion the reflecting totaled awarded year signed for trailing a a $X.X of normal

win to to again rise rebid see Our rates adjudications, volume to over at of is levels XX%. remain near our expect remain the of the as historic through year and We below book-to-bill new next X anticipate fiscal XX work, end expected months. both increase our rebids and it the

$X.X $XX.X pipeline proposals or was approximately billion preparation June pipeline XXXX. $XX.X valued second pending, in XX compared in is $XX.X for Contact Operations, of billion, in One quarter June Center XX proposals at the billion reported $X.X increased billion. fiscal of opportunities to in contract The pipeline tracking. comprised the Our the explanation CMS is in and billion $X.X CCO, at billion

a As May RFP in can XXX up on June, and XX, which to response the GAO, we Based to a pre-award the filed September by with Office. issued of times the receive processing Accountability take we Government days, on protest XX. was expect expected,

delivering customer agree we stated quarters, in with last this mentioned purpose while unprecedented tens received of we of millions do not and seniors. the I've As have services top satisfaction several of we critical remain scores, focused the to on rebid,

paths fair contracts our VBA. by with MDE, to third will simultaneously exams, a quarter resolution pursue of is or Veterans inclusion We our the the or pipeline matter. The also in this driven to appropriate Administration achieve all Benefit jump disability medical

current ceilings opportunities, on approximately the new pipeline we contracts the Of claim to represents be volume agency quarter, last XX% will shared these sales total work. the in our exceeding contracts. due As of rebidding

U.S. would to segment. I attributable Services prepared total billion of remiss the our Additionally, $XX.X upcoming election be to is in my Federal address the pipeline XX% remarks. not

demonstrated delivering have financial a of strong parties. We history under both results

while safety support program which net tends markets programs for delivery. other for known, us fact, In in the flexibility expanded public and best support is to state-level shown for strong party has opened one Maximus new

strategic Given election by to we often this impacted Delivery our ourselves continue find our spectrum, to focus. Within are November. success be that our on will continued in an a for materially X-year as policies we well the or X- results confident year, ever-changing not as be currents, will environment many more navigating driven for and management examples business cross updates changes it the CCO making include Current and Federal Aid and rebid the announced dynamic in by administrations, policies Student industry. by FSA. our plan

As we enter this optimistic. more dynamic I period, remain

Over hallmark of demonstrate to ability is to our to the a our and navigate model long Maximus serve them volatility periods citizens. of capabilities view the opportunities run, business as best

did and In COVID guidance formal providing address we revenue. view pivoted immediate additional this fact, pandemic of during de-risk we sharpen continue just the November. toward $X.X in capturing as move we forward We'll when to our billion to needs,

my As Magazine. we I near recognition from TIME the celebrate recent to end received I'd remarks, like the of

its continue pleased impressed opportunities. collaborating areas strategic operations the with our tied America's among TIME of Most exciting transparency achieving pipeline revenue as to in with This part inaugural the U.S., top to recognition Congratulations leader are and companies midsized are best enterprise notably, satisfaction, coordination directly setting Maximus based companies new on who be companies. I ways from of underscores milestone. In Maximus entire closing, growth was that Maximus' of benchmarks our award many making at strong midsized role remain and named teams, between the of in X we're our a America's to technology one efforts. sustainability elements: the and list As employee of in team progress recognizes the this I for recognizing companies. The business.

we're with As we and helping opportunities will to programs into customers, technology strengthen future. delivery provide shape and relationships of capabilities well the government that new current underpin the

for in will successes I've months. And next greater with be benefits line XX XX the of While Q&A. to these the early the open realized supporting mentioned today, ultimately that, the Operator? we'll efforts

Operator

Instructions] Securities. [Operator Charlie Strauzer coming of from is question Today's first CJS

Charles Strauzer

filed, the CCO terms is just line Just gotten up of process there or updates Since CMS? that color could conversations you've the commentary, if the pick any on Bruce. has you back in or been from time

Bruce L. Caswell

the my I the to I Yes, have really mean Government is much Charlie. remarks. Sure, from we protest with now add prepared noted Accountability that don't Office.

respond September worth a is expect itself. at filing by noting action, they'll that stay We respond This award procurement is keep latest. you XXX-day thing sooner. that guess from purchase stay XX one the progressing of could It that as the the the doesn't on I They agency the with that's process get GAO. consequence a

due due, next XX X phase volumes the an the through we I is proceed late of process, September have has already GAO, we said, the to but volume the process so. And interestingly, volumes which Volume passed through X final X. response So qualification as was initial considering or X, consequence, where X proposal are that XX. occur procurement as June, would phase believe, of September We've are -- the in in I which because as could a it as response from

GAO through to actual Court So out the If or subsequent itself. of subsequent could there impact having the the award which higher publicly award processes only anticipated real Federal coming were see date, you, initial to what stated through appeals a we GAO GAO Claims affect to back of process, was would award the a intended this have or XX. date January as level either that process

paths remain So that this here that's that the -- sense of say potential the I'd could just X many timing. I things. would And note take. the

remain We service super-focused have. as are top we quality -- on delivering

And necessary to itself here, all fair period. And a that and We achieving paths the fully the for are this thrilled last are exceptional really also open mentioned to satisfaction deliver committed let continue play program independently the we're with intend going process we're we'll highest to outcome I service potential scores and contract over that took really customer since the do this to to we enrollment responsibility out. pursue measured that.

anything? you add would David, So

David Mutryn

profitability been contract. wanted I'll I cost just does single-digit the have this low carry contract add traditionally which fee, in is plus the since CCO, out to on point we've investors interested award as of said, Charlie, Yes. margin.

impact contract's be the low the just costs, to absorption margin. in that absorption. have mitigate of significant total that of single-digit part But be the contract lost of to of more it re-compete would indirect given absence than our Although from to depends And income operating the likely the significant the on indirect impact to year don't able effect we'd our which 'XX. fiscal of view regardless outcome, the a we to extent current expect

Charles Strauzer

implied Great. on behind And year-over-year, latest at pro the the little we the guidance, to that is are it thing? And low What we growth? color single-digit just of forma this and is to for revenue rate may expected kind And kind that talking not us the guidance, was look you shifting gears said comments I if gave to incremental basis, could, flat you bit as reoccur growth of early that? similar a the to a in color QX 'XX. 'XX, the looking revenue more

David Mutryn

Yes. Sure.

'XX, than very both as fiscal a with in result feel and and in strong. for momentum of good QX guidance, that is visibility raising So a QX. the quarter confident year continued less We over-performance remaining, our

is on early and course, Medicaid million similar were than guidance. been current top given particular 'XX November. a consistent we've, in do now guidance as to the we view, on result bottom we giving call well, line yes, line fiscal recognize there, U.S. was we've bit the as out a be expect we'll which commentary early Services in here. of there's maybe Looking historically that enrollment. And high X surge wanted our that in some in is let prior year to volume of where a we impact now year our higher our focused view, volumes But years the expect more bottom which, my re-emphasize of margin $XXX is land, We've impact that which top-line that formal that would 'XX me to continuous so and of prior roughly fiscal moderation our to calls, redetermination while do an view 'XX, be

there 'XX the So Services while about. Then which in is we strength mind to belief our continue has the demand to in at long-term and the guidance. of year expected reiterate be that grow fluctuations that redetermination fiscal U.S. portion at growth, mid-single-digit to we're our really growth in to the business U.S. but U.S. much can concentrated deliver recur volumes, will we've Federal, track not single-digit of and year Services, in high -- segments, talked bearing the second X% that related organic we a U.S. both organic that's last year-to-year, support on been for point, midpoint our of

Operator

The is next question Subin coming from Stifel. of Bert

Bert Subin

fiscal November. an margin be FY an week, about issues. Can right you for funding as U.S. next month you and they grappling for are by a give then just potentially I the thoughts now, and with award expectation is what next business some your the in Obviously, helped 'XX? boost side of think on guess just calling pick your are then think up we us VA near-term maybe there's your that what expectations think at seem mostly partially out I that you've it -- to as margin the I day things, we're -- Federal. there and quite and VES excess, rebid substantial redetermination Maybe industry to, growth seems VA you're it as that guess, out for side. and that about could at if the like the it third the quarter should the bit tools, boost a potentially be automation headwinds offset what been tailwind that I guess about we least there an think next RFP for year would like, that offset help Because would turning redetermination. you pretty are solid looking roll

if some provide can you So just there. color curious

Bruce L. Caswell

there, question. series lot it's A and of of compound a Bert, questions, great dynamics

bit it to So I'll little a over to start, more the David the on then first expectations. margin piece, I'll turn and comment

first all, absolutely relates as it of you're So to rebid, correct.

'XX. approached provide more can't specifically extra but vendors. on We you imminent talked how X budget award MDE to what to and is and the the rebid and an Our XX, X-year the given from not also performance program. it on through in a X. existing is, as that the comment award these any November broadly a acted prevent be contracts benefits so the award information is X, before November dynamic on any the that capacity be it's to XXXX, in adjournment a to comment little is near in there. Further, of RFP to the And September pressure, MDE put increased revised on have contract XXXX, think the it'll October be we that for be X to will about exams And contracts of not much there period a was a of priority just C&P disability more resulted June. VA rebid of contract regions was that budget. to Interestingly, August, obviously shortfall similar being would that due bit continue was program. X-year supported for in all term be they're the to complete The except while to the caseload issued or think and presently, had is not the the obviously process, for aware, will that request veterans. And released but volume quite in the themselves also bipartisan that have to in RFI much expected FY which on the expressed intent funding are re-competing a industry just been to that, program claims the the to late the for Act yours limits for -- reiterate congressional The from prior through approached due the I submittals RFI, PACT this in very the for

is the that think for another is billion VA 'XX billion shy or my point. biannual so FY is budget 'XX, request for important of $XX FY just recollection budget the and $X then It's I process which a has. that an

'XX. So FY the funding it's our would request provide to contemporaneous obviously by year, for next with on that well Congress as fiscal theirs cover when bridge acted

rebid the So that the address would budget. the to issues related and

Administration peak publishes above me the a years bit on months, a public that the a in recent Let occurs me standpoint, From claims David. the and it give it's ago. little And it obviously, Benefit technology, prior I inventory. well turn information dozen remains to think was to that volume it we follow, then while over come to volume the down all that expectations, historical Veteran's

will pace a about X our the is be view things. new when at we that so is equilibrium which reached, And talk

volumes cases, again. the have once have lifetimes, the the veterans seen, exams related circumstances part PACT and and of change, get they in than fluctuating First, Act if to their many they to ongoing conditions that conditions have and are ability seen their and their to more it's because be will that important seen become note during process

equilibrium. So that a there will be a new prior the than equilibrium, we be at would equilibrium, level but higher expect

that say that levels in at XXXX. seeing also We our production certainly volumes been sufficient we've there's system least through the would the sustain to year fiscal

significant the the I'll note occurred also color So system really across we early And that committed would that ramp-up point. dynamic. But capacity the elevated. that at I note remain FY of and that our this remain on in viewpoint volumes has reflects 'XX

legacy very as as the their system they we clean systems making a environment environment. work certain system very into that through making, would new the to There technology, status further be it's process during will major period improve brings to the a point. way parallel to is that veteran we're ability cutover self-scheduling it the experience. important well that in as of require like So the environment I'm need investments a a veterans to investment the very certainly we're and the will certainly prudently automation, really assure both last because and operate that in your technology, their then are excited new -- areas providing Technology elements. The it us claims about have though, visibility on

And so commentary. the FY technology we turn pause would the at this really anticipate the 'XX be, for economic but period, benefits of it to if point further I'll David and in loaded anything, back-end to introduction

David Mutryn

Yes. Thanks, Bruce.

component. a little a margins the this in Federal Just the segment more commentary QX is on since

revenue. past. cost occurred third my mix say unusual remarks that in have the performance-based seasonal the even So with impact cost I somewhat mentioned a was because quarter, revenue probably we one plus which seen shouldn't lower in in prepared and revenue driver higher the has lower of this unusual plus I

assessment addition, our played did programs a in in this that So strong particularly higher a then quarter. And part have margin volume.

from which Our was on production quarters, into line. performance and pulled and the some other volume drove was QX bottom both essentially top strong

to on in clinical said, steady going quarters QX, Bruce work remain as So then QX foreseeable expect volumes future. from forward, result of but the that we as for a moderate slightly pulling the other in

Bert Subin

was helpful. extremely it. Got That

where early a I we've at underfunding, change and the in seen you it has that clarification, least, into steady that ripple been volumes? so Just to gone is with period yet for VA in some indications material this waiting fairly through? a have grappling of Or sort guess, as XQ,of far

Bruce L. Caswell

latter, Really Bert. It's the been steady.

Bert Subin

it. Got

Okay.

gives give -- a And follow-up, early I we I I In above think some guess that little that's next sort the back snap as you noted you that to of the what to terms talked the lower. about as a ability you going to you a confidence mean headwinds commentary book-to-bill sort for into you go running revenue or FY will the offset for been 'XX, of guess year? of has about X.X of

Bruce L. Caswell

Bert. bear me. as a guess, I might answer, bit And with you question. is multipart have to of that. so a That Great, expect Great

times for forth. with extreme so we my quarters, a dynamics some a dynamics OPTIMA that opportunities year propensity our in macro of at but TSA bit First just and than business there an extreme There some not shift in Maximus. in are really of on it -- are because example, play. by multiple remarks, just all, of the year more there then or related but an the to a and to and protests commented demonstrates and so to right it's on procurement, The number prepared are dynamics

'XX, So on see companies to I familiar a because but that that's at that considerations a whether that is say I'll itself we up with be Biden impact won't community, comment indicated they that goal that illustrates and FY become administration FY that small volume than to one that been are that. see has some a have perspective. -- of wanted our wonder disadvantaged small that there'll by it's one Other business. has a new factors we're the the from the the work book-to-bill. It 'XX. for targets also market important XX% win further just that a dynamic seeing achieved in from -- at issue spending and unfortunately that's more rate The and and issue that contracting it's small for been playing some XX% what of established you for customers illustrative protesting correction businesses, that preliminary out, point is include the of

and full shift have to were example, companies, it for to of going and arrangements, to higher and that get So ecosystem a open back in get that to them we've and have therefore, of you business take value number venture would adapt thriving be greater completed seen important IDIQs of a we may acknowledge, reclassified business. And for for business. use, small through have time place opportunities is those establish the historically thought for Larger full joint pulled been and small agency-level awards can to that course, small sector. then GovCon that then open

real procurement that dealing government would in capacity effectuate Another to to event the leading with a macro factor note community. reduced cycles. are I silver to the longer be continues tsunami Agencies is procurement

reflects Now low unusually in of rebid the volumes. near term, our book-to-bill a period ratio

see and we've in that which the that of work also rebids rates, terms the again we not our have of when that we said, some we've And but and there on. adjudicated, business. rebids it is will our win been igniting in through rebid is expect very industry. with I'm focused It's all been engine we'll across calls, that some on that of coming and it some E commented to even to observed capitalize like offer pleased inconsistent, one see a a strong I've had we've something I question need the of in that normalize few we one or dynamics and discussing. But with wanted better, bit quarters remarks pipeline for on we so as maintaining in the much our the historical the that of we VA more to not also a prior very regard. We And out great. of federal This snap one new, the your counterparts the are growth back do in

previously, between opportunities, total CDIO we're Left, the then ensure and from the We've, in I in our as leads we market really in place our two, leads close processes. that our and pipeline development put to advance and coin now making optimizing example mentioned that an collaboration that call positioning out a our telephony we've defense management filling market solutions on of technology shaping as procurement. And to a And businesses. of civilian, really Shift our teams been teams the so business cloud-based the we're introduced underneath platform experience investments leaders health and phrase driven key as in leaders number I capture such prior lastly,

sector focused forth. and live test development, well are response the through early the qualification, in And are invest GWAC on for we're Maximus tools of the initiatives execution, areas proposal demonstration several aware so GenAI IDIQ Some of cases for our as in. we're that task use initiative transformation of, order to excellent Forward like well you're broader on capability those investing and that applications others really in opportunity

So remarks, this my in to the all growth areas addition that I think term. opportunity is in drivers and the medium in mentioned of will we contribute which prepared

quarters. and heading north I the together, that we'll And that that's at so seeing if be what gives back snapping book-to-bill would confidence then in look I the coming all again this say us

with is on is one maybe you at a Maximus, So contributor forms thought growth would organic of that leave organic base. key I and always with to course, growth many takes final that, growth, and

as pipeline talking as that to see the growth rates we patience. organic us work to then what so contributing awards that's the And Thanks conversion of about. well been and for we've collectively, that your new gets

Bert Subin

just I question that's always Bruce, David. have helpful. more one very for

Investor next I redetermination. the Day, getting 'XX comments, XX% longer In have XX% back been of X% medium OUS terms term, to of process, Maximus that we for lower XX% to seeing to the to even I sort closer go least curious, combination next margin guess, XX.X% at some obviously, like guess near systems running sort just and XXT but longer talking seems year, on of said of really term, it still function multiple the if to you about that of you're end to your term, maybe going of to a margins or running if year, it's is excess we were those to XX% be I'm for progress a XX% a X% then XX% through excluding term, good, VA? up of, early

full just why potentially a back. you curious I'm take point would step So

David Mutryn

wide range and Yes. to that color. early there acknowledge as off. a result Bert, margins to it's again, a accretive little revenue falling just a will of I pressure wanted be that

lay to out not wanted of level some margin the that I a assurance as So impact. XX% dramatic

Operator

participation and today's concludes to thank this in end event. Ladies us question-and-answer session and We for the brings and the Maximus. gentlemen, of your you interest

lines the disconnect webcast and off day. the rest time, may log You your this and enjoy your of at

Maximus (MMS) 8 Aug 242024 Q3 Earnings call transcript