Maximus hopes its Air Force cyber win is just a starting point

Known primarily for its civilian work, Maximus naturally views the defense landscape as part of its long-term blueprint and a key assignment for a growth leadership team the company stood up in 2024.

Maximus can point to a potential five-year, $77 million Air Force cybersecurity contract booked in July as a sign that it is making headway on that front.

During Maximus’ fiscal third quarter earnings call with investors Thursday, chief executive Bruce Caswell admitted growing the company’s defense footprint has not been a priority because others got in the way.

After all, Maximus did have to integrate two record acquisitions and further shore up its footing in areas of the civilian market close to the company’s core business.

But the purchase of Veterans Evaluation Services in 2021 led Maximus to identify defense health programs as a set of revenue synergy opportunities. Caswell described Maximus’ federal pipeline as in three categories of defense, civilian and health.

Evidently defense health was just a starting point for other work across this customer set. Caswell told analysts the company sees the cyber win as “further evidence of our ability to expand into adjacent agencies and deliver capabilities aligned with the mission of our Air Force customer.”

Maximus is also working with an unnamed agency to create a road map for their artificial intelligence adoption pathway, Caswell said.

Defense and civilian agencies share some common aspects in terms of what their needs are, according to Caswell.

“The technology modernization challenges that we're seeing in the civilian area in terms of modernizing antiquated legacy applications, migrating to the cloud and so forth, are obviously seen in the defense community as well,” Caswell said. “Some of the core competencies and skills that we need to bring to bear in terms of assisting customers in moving payloads, application stacks into the cloud, modernizing them even in some cases, then buying those back as a service that can be delivered are important to the defense community.”

In mid-December, Maximus received a CMMC Level 2 certification under the Defense Department’s new cyber and supply chain security standard for its entire industrial base.

Caswell said that will be key in Maximus’ positioning for opportunities across the entire federal landscape as the Cybersecurity Maturity Model Certification’s requirements become more normalized.

Maximus also sees itself as ready for an environment that will have more performance-based or outcome-based contracts where they are practical. Caswell said this is a way for the Trump administration to open up the aperture for more commercial providers.

“We've got strategic relationships that we've been developing and that we have been kind of bringing to the market with key commercial software providers that are addressing the government marketplace,” Caswell said.

Fiscal third quarter revenue of $1.35 billion was 2.5% higher than the prior year period and the company also touted a 4.3% organic growth rate. Profit of $198.3 million represented a 14.8% year-over-year increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

Maximus lifted its fiscal 2025 financial outlook on both the top and bottom lines, with revenue now seen in the range of $5.375 billion-to-$5.475 billion on an adjusted EBITDA margin of roughly 13%.