Slide 1: Fiscal 2023 Third Quarter Earnings Call
Fiscal 2023 Third Quarter Earnings Call David Mutryn Chief Financial Officer August 3, 2023 1 | Maximus: Q3 FY23 Earnings Presentation
Slide 2: Forward-looking Statements & Non-GAAP Information
Forward-looking Statements & Non-GAAP Information These slides should be read in conjunction with the Company’s most recent quarterly earnings press release, along with listening to or reading a transcript of the comments of Company management from our most recent quarterly earnings conference call.
Slide 3: Total Company Results – Third Quarter of FY23
Total Company Results – Third Quarter of FY23 ($ in millions, except per share data) Q3 FY23 Q3 FY22 % Change • Strong organic revenue growth and margin improvement in U.S. Federal and U.S. Services Revenue segments driven by unprecedented demand for U.S. Federal Services $ 584.0 $ 525.5 11 % clinic
Slide 4: U.S. Federal Services Segment
U.S. Federal Services Segment • Revenue increased 11% which was all organic and due to volume growth in both ($ in millions) Q3 FY23 Q3 FY22 % Change the Veterans Evaluation Services (VES) business and student loan servicing work Revenue U.S. Federal Services $ 584.0 $ 525.5 11 % • Segment margin of
Slide 5: U.S. Services Segment
U.S. Services Segment • Revenue increased 12% which was all organic and driven by contributions new work wins last ($ in millions) Q3 FY23 Q3 FY22 % Change year as well as an uptick from start of Medicaid redetermination volume Revenue U.S. Services $ 449.1 $ 399.3 12 % • Segment margin of 10.5% for
Slide 6: Outside the U.S. Segment
Outside the U.S. Segment • Revenue decrease of 23% is attributable to organic contraction totaling 17% due to last ($ in millions) Q3 FY23 Q3 FY22 % Change year’s Australia rebid outcome and a $14.4 million reduction due to lower estimates for future Revenue period outcomes-based payments on the Out
Slide 7: Cash Flows & Debt
Cash Flows & Debt Cash Flows & DSO $ in millions Q3 FY23 YTD FY23 Cash (used in)/provided by operating activities $ (5.3) $ 169.8 Purchases of property and equipment and capitalized software costs (25.1) (58.9) Free cash flow $ (30.4) $ 110.9 • DSO of 61 days at June 30, 2023 was within target range
Slide 8: Updated Fiscal Year 2023 Guidance
Updated Fiscal Year 2023 Guidance • Tightening revenue guidance range around unchanged midpoint of New Guidance Prior Guidance New Guidance Excl. Cybersecurity $4.925B, which represents approximately 6.5% growth over FY22 Incident • Adjusted operating incoming guidance includes the approximately $22
Slide 9: Fiscal Year 2024 Early Thoughts
Fiscal Year 2024 Early Thoughts • Current line of sight suggests topline organic growth of mid-single digits over FY23 • FY24 earnings expected to show meaningful lift over FY23; Q4 FY23 earnings anticipated to be good proxy for the business next year • Consider redetermination dynamic: elevated Med
Slide 10: Fiscal 2023 Third Quarter Earnings Call
Fiscal 2023 Third Quarter Earnings Call Bruce Caswell President & Chief Executive Officer August 3, 2023 10 | Maximus: Q3 FY23 Earnings Presentation
Slide 11: Executing on Programs of National Policy Significance
Executing on Programs of National Policy Significance • Supporting Medicaid Redeterminations • Delivering enhanced benefits to our Veterans • Servicing Federal student loans returning to repayment 11 | Maximus: Q3 Q2 FY23 Earnings Presentation
Slide 12: Return-to-Repayment
Return-to-Repayment Background How our teams are preparing: • We act as a servicer of Federal direct loans – working − Communication with borrowers is key. For the under the rules and oversight of the Department of loans we service, Maximus is supplementing FSA Education, Federal Student Aid (or FSA
Slide 13: Updates on Core Programs
Updates on Core Programs Medicaid Redeterminations • Medicaid eligibility and enrollment teams have been preparing for the unwind phase, which commenced in April of this year • The unprecedented nature of this unwind phase makes it inherently difficult to forecast eligibility redetermination volumes
Slide 14: Innovation Woven into our Strategic Direction
Innovation Woven into our Strategic Direction • Innovation goes beyond cost savings and margin enhancement to creating differentiating capabilities in our highest-value programs • Examples include innovations we have developed and patented by which we can intake, index, and categorize large volumes
Slide 15: Cybersecurity Incident Impacting Hundreds of Companies
• As previously disclosed, MOVEit is a third-party application that is used by our project teams to share our government customers’ data • The MOVEit vulnerability that was exploited was a critical “zero- Cybersecurity day” vulnerability; because the vulnerability wasn’t known, there Incident Impact
Slide 16: Recent Wins Continue to Deliver on Strategy
Recent Wins Continue to Deliver on Strategy • Largest provider of the new Functional Assessment Services, or FAS, contract due to launch in the United Successful rebid year provides stability and line of Kingdom in FY24; $1 billion over five years sight to our revenue and earnings for FY24 and beyon
Slide 17: New Awards & Pipeline
New Awards & Pipeline New Awards (YTD) June 30, 2023 • As of June 30, our book-to- Signed Contracts $4.3 billion bill ratio was approximately 2.2x (TTM basis) Unsigned Contracts $3.1 billion 80% new work • Normalized for CCO, which will no longer be part total pipeline of the calculation next $32.1B
Slide 18: Maximus Named to Forbes' 2023 Best Employers for Diversity List
Maximus Named to Forbes’ 2023 Best Employers for Diversity List • Our #13 ranking is a significant improvement from 2022 • We continue to take steps to integrate DE&I into the important work we do each day, strengthening the fabric of our company • Enthusiastic response and engagement of thousands o
Slide 19: Closing Remarks
Closing Remarks With FY23 nearing its end, and FY24 on the horizon: • The success of our rebids this year has created a solid foundation for the future • Our focus is on new work in the form of competitive wins and scope expansion of existing contracts • We remain focused on executing our three-to-f
Slide 20: | Maximus: Q3 FY23 Earnings Presentation
20 | Maximus: Q3 FY23 Earnings Presentation