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MMS NYSE· Maximus Inc
Earnings report Q4 2023

MMS Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

MMS reported total revenue of $1.33 billion for the three months ended December 31, 2023, representing an 11.5% increase compared to the same period in the previous year. This growth was driven by organic expansion across all segments.

  • The U.S. Federal Services segment generated revenue of $677.08 million, a 9.5% increase from the previous year. This growth was primarily attributed to expanded eligibility support and clinical services programs, as well as the resumption of Medicaid redetermination activities. The segment's gross profit percentage improved to 23.1% from 19.8% in the previous year, indicating increased profitability.

  • The U.S. Services segment reported revenue of $489.85 million, reflecting a 11.5% increase compared to the previous year. The growth in this segment was largely driven by increased volumes on expanded programs, including the U.S. Department of VA's Medical Disability Examinations contracts. The segment's gross profit percentage also improved to 24.2% from 19.0% in the previous year.

Strengths

MMS demonstrated strong revenue growth in the latest quarter, driven by organic expansion across all segments. The U.S. Federal Services segment benefited from expanded eligibility support and clinical services programs, as well as the resumption of Medicaid redetermination activities. The U.S. Services segment experienced increased volumes on expanded programs, particularly the U.S. Department of VA's Medical Disability Examinations contracts. The improvement in gross profit percentages for both segments indicates increased profitability.

Challenges

One of the challenges faced by MMS in the previous year was the pause in Medicaid redetermination activities, which resulted in depressed margins for many programs in the U.S. Services segment. This was due to reduced operating leverage as costs could not scale down at the same rate to meet lower demand. However, with the resumption of redetermination activities, MMS expects a recovery of operating leverage in fiscal year 2024 and beyond.

Noteworthy

MMS reported a gross profit of $300.05 million, representing a gross profit percentage of 22.6%. The operating income for the quarter was $107.51 million, with an operating margin of 8.1%. These figures indicate improved profitability compared to the previous year. Additionally, MMS anticipates its full-year operating margin to range between 11% and 12%.

Summary

MMS delivered strong revenue growth in the latest quarter, driven by organic expansion across all segments. The U.S. Federal Services segment benefited from expanded eligibility support and clinical services programs, as well as the resumption of Medicaid redetermination activities. The U.S. Services segment experienced increased volumes on expanded programs, particularly the U.S. Department of VA's Medical Disability Examinations contracts. Despite challenges faced in the previous year, MMS expects a recovery of operating leverage with the resumption of redetermination activities. Overall, MMS demonstrated improved profitability with higher gross profit percentages and anticipates a favorable full-year operating margin.

Source documents

Form 10-Q  filed on Feb 08, 2024
110 pages scanned

Reference data

Company financials Q4 revenue 0
Analyst estimates Q4 EPS missed by 0.00%
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