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December 4, 2025 • 4 min read
For those who don't follow the government services sector closely, Maximus, Inc. (MMS) is the engine behind many of the public programs citizens interact with daily. From managing student loan servicing to conducting health assessments and running state Medicaid enrollment, Maximus operates at the intersection of government policy and private sector execution.
We are diving into their latest 10-K filing for the fiscal year ended September 30, 2025, to see how the company performed. Our goal is to peel back the layers of their income statement to understand not just how much money they made, but where they made it and the costs involved in keeping the government running.
You can read the full filing here:
To visualize the flow of capital through the business, we have generated a Sankey diagram. This illustrates the company's revenue streams, where that money goes in terms of costs and expenses, and finally, what hits the bottom line as net income.
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Maximus delivered a solid year, characterized by steady top-line growth and margin expansion in its key segments. Total revenue climbed to $5.43 billion, a 2.4% increase from $5.31 billion in 2024.
More impressively, the company managed to squeeze more profit out of those revenues. Operating income rose to $528 million, resulting in an operating margin of 9.7%, up from 9.2% the previous year. This translated to a Net Income of $319 million (or $5.51 per diluted share), demonstrating the company's ability to navigate a complex inflationary environment.
The clear star of the report is the U.S. Federal Services segment. This division generated $3.07 billion in revenue, accounting for 56% of the company's total intake. This represents a robust 12.1% organic growth year-over-year.
What stands out here is the profitability. The operating margin for this segment hit 15.3%, significantly higher than the company average. Management attributes this to successful technology initiatives—essentially, using tech to make their operations more productive. In the government contracting world, where margins are often squeezed by "lowest price technically acceptable" bidding, maintaining mid-teen margins is a strong indicator of a competitive moat, likely built on specialized expertise in areas like clinical assessments and federal program administration.
While the Federal side boomed, the U.S. Services segment—which primarily serves state and local governments—faced challenges. Revenue in this segment dropped 7.7% to $1.76 billion. Operating margins here compressed to 9.7%, down from 12.9% in 2024. This segment deals with high-volume beneficiary support, such as eligibility redeterminations, which can fluctuate based on state budgetary cycles and federal policy changes.
Similarly, the Outside the U.S. segment saw revenue decline by 8.7% to $600 million. This was largely intentional, driven by the company's strategy to divest (sell off) certain businesses to refine its portfolio. While the revenue footprint shrank, the segment did manage to improve its profitability, with margins creeping up to 3.7%.
No analysis of a modern data-heavy enterprise is complete without looking at the risks. Maximus handles sensitive personal data for millions of people, making cybersecurity a critical operational concern.
The filing touches on the "MOVEit" cybersecurity incident, noting ongoing litigation. For a company whose "product" is often trust and data administration, these incidents are more than just IT headaches—they represent reputational and financial risks that investors must monitor. Additionally, because the vast majority of their revenue comes from government contracts, Maximus remains sensitive to political gridlock, budget delays, and government shutdowns.
Maximus, Inc. appears to be a company in the midst of a successful pivot toward higher-value work. By leaning heavily into its U.S. Federal Services segment—where it enjoys its highest margins and strongest growth—it is offsetting softness in state-level contracts and international divestitures. With a healthy gross margin of 24.6% and growing earnings per share, MMS demonstrates that the business of government administration, while complex, remains a lucrative field for established players.
Last updated: December 4, 2025