A tech-enabled government services provider, Maximus runs health and human services programs, administering Medicaid eligibility, employment services, clinical assessments, and technology for federal, state, and international clients. It was founded in 1975 by Air Force veteran David Mastran, who launched the consulting business from his home. The Latin name means "greatest," chosen to reflect the company's mission of maximizing government efficiency.
U.S. Federal Services margin hit 18.1% as operating income rose 17%, but a $220M nine-month cash outflow from billing delays will reverse in Q4.
U.S. Federal Services reached 18.1%, the highest quarterly level in the data provided, as medical assessment volumes and FEMA support work drove a 17% increase in . fell 5.1% to $1.28 billion, but widened 0.6 points to 27.3% and rose 4.8% to $1.95 as cost reductions outpaced the top-line decline. The cash flow story remains the same as last quarter: a $220 million nine-month outflow from administrative billing delays, with over $300 million collected after June 30 and a significant Q4 benefit expected.
Key takeaways
U.S. Federal Services expanded to 18.1% from 15.5% a year ago, as rose 17.1% to $132.7 million on higher medical assessment volumes, including PACT Act work, and FEMA support.
U.S. Services fell 28.3% to $38.6 million, with margin contracting to 10.2% from 13.0%, as the prior-year period still benefited from elevated Medicaid redetermination activity that has now largely normalized.
The Outside the U.S. swung to a $3.1 million operating loss from a $4.8 million profit a year ago, as organic fell 8.6% due to lower contract volumes.
Section summaries
Management's Discussion and Analysis
Q3 FY2026 revenue fell 5.1% to $1.28B on lower volumes and divestitures, but margins improved as cost cuts outpaced revenue declines.
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Consolidated declined 5.1% in Q3 and 4.4% YTD, driven by lower transaction-based volumes in U.S. Federal Services and broad demand softness in U.S. Services.
Consolidated widened 1.3 points to 26.2%, helped by efficiency savings and the absence of lower-margin disaster recovery work in the U.S. Federal Services .
was a $54.9 million use of cash for the quarter, bringing the nine-month total to a $220 million outflow, after administrative billing delays pushed higher; over $300 million in past-due receivables were collected after June 30.
The company repurchased $306.4 million of common shares in the first nine months and increased to cover the short-term collection delays, with the at 2.09x.
What changed
The VA Medical Disability Examinations and CMS Contact Center Operations recompetes, each representing 10–15% of annual , remain unresolved — flagged in every prior filing and still open.
U.S. Services fell to 10.2% from 13.0% a year ago, confirming the decline flagged in Q2 FY2025 and Q3 FY2025 as the Medicaid redetermination exhausted; the has now settled near the 10% level management guided toward.
The Outside the U.S. swung to a $3.1 million loss, reversing the profitability achieved after the FY2024 divestitures and falling short of the 3%–5% full-year margin set in Q2 FY2025.
The over $300 million in post-quarter collections flagged in Q3 FY2025 materialized, but new billing delays pushed the nine-month cash outflow to $220 million, and remained elevated at 78 days versus 62 days at fiscal year-end.
The rose to 2.09x from 1.6x at FY2024 year-end, as increased to cover share repurchases during the cash flow shortfall — a trajectory flagged in Q3 FY2025 that has continued.
What to watch
Whether the over $300 million in post-quarter collections translates into a significant Q4 benefit, and whether retreats from 78 days toward the 62-day level at fiscal year-end.
The outcome of the VA Medical Disability Examinations and CMS Contact Center Operations recompetes, each representing 10–15% of annual , which remain unresolved and could reshape the U.S. Federal Services .
Whether U.S. Services stabilizes around the 10% level now that the Medicaid redetermination normalization is largely complete, or whether further declines are ahead.
The trajectory of the , which rose to 2.09x as increased to cover share repurchases during the cash flow shortfall, and whether it declines as Q4 collections arrive.
expanded to 27.3% in Q3 (from 26.7%) and 25.7% YTD (from 24.3%) as cost of fell faster than revenue, aided by growth on profitable contracts.
U.S. Federal Services fell 5.3% in Q3, partly due to non-recurring disaster recovery work; a temporary contract modification effective July 2026 is expected to reduce by ~$0.35 per quarter.
Outside the U.S. dropped 28% in Q3 on organic volume declines, and the segment is forecast to operate at a breakeven margin for FY2026.
was negative $179.9M YTD due to administrative payment delays on a large federal contract, but $245M was collected after quarter-end.
The company repurchased $204.9M of common stock YTD and maintained a 2.00x net , well within its 4.00x limit.
Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, we are exposed to financial risks such as changes in interest rates, foreign currency exchange rates, and counterparty risk. We use derivative instruments to manage selected interest rate exposures. The Company's market rate risk disclosures set…
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In the normal course of business, we are exposed to financial risks such as changes in interest rates, foreign currency exchange rates, and counterparty risk. We use derivative instruments to manage selected interest rate exposures. The Company's market rate risk disclosures set forth in Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" on our Annual Report on Form 10-K, filed with the SEC on November 20, 2025, have not changed materially during the nine month period ended June 30, 2026.
There were no material changes during the nine months ended June 30, 2026 to the risk factors previously disclosed in our Annual Report on Form 10-K, filed with the SEC on November 20, 2025.
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There were no material changes during the nine months ended June 30, 2026 to the risk factors previously disclosed in our Annual Report on Form 10-K, filed with the SEC on November 20, 2025.