Maximus reported strong financial results for the second quarter of fiscal year 2025, ended March 31, 2025. Revenue for the quarter increased 1.0% to $1.36 billion, with organic growth of 3.0%, primarily driven by the U.S. Federal Services Segment.
The company's adjusted diluted earnings per share (EPS) for Q2 FY25 was $2.01, a notable increase from $1.57 in the prior year period. Operating margin reached 11.2% and adjusted EBITDA margin was 13.7%, reflecting robust profitability.
Maximus raised its fiscal year 2025 guidance for the second consecutive time. Revenue is now projected to be between $5.25 billion and $5.4 billion, an increase of $50 million, all organic. Adjusted diluted EPS guidance was raised by $0.40 to a new range of $6.30 to $6.60 per share, and the adjusted EBITDA margin improved by 50 basis points to approximately 11.7%.
The U.S. Federal Services Segment continued its strong performance, with revenue increasing 10.9% to $777.9 million and an operating margin of 15.3%, benefiting from higher clinical assessment volumes. The full-year operating margin for this segment is now expected to be between 12.5% and 13%.
Cash provided by operating activities was $42.7 million, with free cash flow at $25.5 million. Days Sales Outstanding (DSO) increased to 73 days due to a temporary delay in collections from a single U.S. state customer, though full-year free cash flow guidance remains unchanged as collections are anticipated to improve. The company also repurchased 0.9 million shares for $72.8 million during the quarter.
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