COVID, acquisitions fuel Maximus' revenue growth

Maximus has seen significant revenue growth in its latest quarter fueled by support of the government's COVID-19 response and what has come from recent acquisitions.

Maximus has seen a sharp uptick in business this year as the company has rallied around federal customers who need support responding to the COVID 19 pandemic.

That work includes vaccination distribution support, unemployment insurance program support, disease investigation, contact tracing and other services.

One result is a fiscal third quarter that saw a record $1.24 billion in revenue, a 38-percent increase compared to $901.3 million for the same quarter last year.

COVID-related work contributed $460 million during the third quarter and $860 million for the company's fiscal year so far. Maximus expects the COVID-related revenue to hit $1 billion for the entire years.

That COVID-related work has exceeded Maximus' expectations for revenue but in its fiscal year 2021 fourth quarter, the company expects that to start tapering off.

The profitability of the COVID work has steadily improved and now has operating margins higher than the company average.

For the quarter, the overall operating margin was 11.2 percent compared to 9.7 percent for the same quarter last year.

The bump from COVID more than offset declines in Maximus’s Census Bureau work and delays in other parts of the business caused by the pandemic.

The Census Bureau work declined by $170.4 million in the third quarter compared to the same quarter last year. The decrease was expected, the company said.

Also adding to the growth is the acquisition of Attain’s federal business, which contributed $56 million in its first full quarter as part of Maximus. The acquisition of Veterans Enterprise Services added $46 million after about a month of operating as part of Maximus during the third quarter.

The company estimates that on an annual basis, the two acquisitions will add $515 million in revenue.

"Several months into our relationship together, I’m even more impressed with the capabilities and dedication that our Attain Federal and VES teams bring to Maximus. Already, we see the anticipated acquisition benefits coming to fruition for the combined companies and for our customers,” Maximus CEO Bruce Caswell said.

So far in its fiscal 2021, Maximus has signed contract awards worth $3.24 billion and has pending awards of around $1.38 billion. Pending awards are contracts that have been awarded but not yet signed. 

For its fiscal 2021 ending Sept. 30, Maximus expects between $4.2 billion and $4.25 billion in revenue.