Government services contractor Maximus, Inc. (NYSE:MMS) reported fiscal first-quarter 2026 adjusted earnings on Thursday that exceeded market expectations, although revenue came in below forecasts due to softer activity levels in its U.S. Services division.
Shares of Maximus rose slightly, gaining 0.81% in after-hours trading following the announcement.
For the quarter ending December 31, 2025, the company recorded adjusted earnings of $1.85 per share, outperforming analyst estimates of $1.75. Revenue totaled $1.35 billion, missing expectations of $1.44 billion and declining 4.1% from the same period a year earlier. The drop included about a 1.5% reduction linked to divestitures, with the remaining decrease stemming from underlying operational trends.
“Q1 FY26 results were broadly in line with expectations contemplated in November guidance for FY26,” said David Mutryn, Chief Financial Officer. The company posted an adjusted EBITDA margin of 12.7%, improving from 11.2% in the prior-year quarter, supported by strong results within the U.S. Federal Services unit.
The U.S. Federal Services segment, Maximus’ largest revenue contributor, delivered a slight 0.8% increase in sales to $786.6 million. The division also saw operating margin expand significantly to 16.5%, compared with 12.7% a year earlier. In contrast, revenue from the U.S. Services segment declined 8.2% to $415.2 million, reflecting reduced participation or demand across several programs.
Maximus revised its fiscal 2026 outlook, tightening its revenue projection to a range of $5.2 billion to $5.35 billion, compared with the earlier guidance of $5.225 billion to $5.425 billion and below the analyst consensus of $5.47 billion. However, the company increased its adjusted EBITDA margin forecast to roughly 14.0% from 13.7%, while raising its adjusted EPS guidance to between $8.05 and $8.35 from the previous $7.95 to $8.25 range.
“We continue to be ’customer zero,’ where we develop capabilities and experience that we believe are valuable to our customers,” said Bruce Caswell, President and CEO, pointing to the company’s artificial intelligence initiatives that have helped secure recent contract awards.
Maximus added that the recent U.S. government shutdown had little direct impact on its financial results but did slow contract award activity within the U.S. Federal Services division, weighing on its quarterly book-to-bill ratio. The company expects that metric to strengthen in the remaining quarters of fiscal 2026.