Maximus Inc. (NYSE:MMS) reported second-quarter fiscal 2026 results on Thursday that exceeded earnings expectations but missed Wall Street revenue forecasts, sending shares down 3.05% following the announcement.
The government services contractor posted adjusted earnings of $2.07 per share, topping the analyst consensus estimate of $2.02 by $0.05.
Revenue declines year-over-year
Quarterly revenue totaled $1.31 billion, below analyst expectations of $1.37 billion and down 3.7% from $1.36 billion in the same period last year.
The company said the year-over-year decline was largely due to the absence of natural disaster response work and temporary spikes in clinical service volumes that boosted results during the prior-year quarter.
Company raises earnings outlook
Despite weaker revenue, Maximus increased its full-year adjusted diluted earnings per share guidance by $0.20 to a range of $8.25 to $8.55.
The midpoint of $8.40 is above the previous midpoint of $8.20.
The company also raised its adjusted EBITDA margin outlook by 20 basis points to approximately 14.2%.
However, Maximus maintained its full-year revenue forecast of $5.2 billion to $5.35 billion. The midpoint of $5.275 billion sits slightly below the analyst consensus estimate of $5.32 billion.
AI and automation drive margin expansion
“Our second consecutive earnings guidance increase reflects growing confidence in our ability to leverage in-house AI and other technology capabilities to improve efficiency and support margin expansion,” said Bruce Caswell, President and Chief Executive Officer.
The company said improved profitability was supported by operational efficiencies and automation initiatives, including the use of AI-enabled tools across multiple program areas.
Adjusted EBITDA margin expanded to 14.4%, compared with 13.7% in the prior-year quarter.
Board approves new buyback program
Maximus also announced that its Board of Directors approved a new $400 million share repurchase authorization.
In addition, the company declared a quarterly dividend of $0.33 per share.
More about Maximus
Maximus provides government services and technology solutions focused on health, employment, and human services programs. The company works with federal, state, and local governments to administer public-sector operations, customer support, clinical services, and digital transformation initiatives.