Maximus, Inc. (NYSE:MMS) Q2 2023 Earnings Conference Call May 4, 2023 9:00 AM ET
Company Participants
Jessica Batt - Vice President of Investor Relations & Environmental, Social & Governance
David Mutryn - Chief Financial Officer
Bruce Caswell - President & Chief Executive Officer
James Francis - Vice President of Investor Relations
Conference Call Participants
Charles Strauzer - CJS Securities
Operator
Greetings and welcome to the Maximus Fiscal Year 2023 Second Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Jessica Batt, Vice President of Investor Relations and ESG. Thank you. Please go ahead.
Jessica Batt
Good morning and thanks for joining us. With me today is Bruce Caswell, President and CEO; David Mutryn, CFO; and James Francis, Vice President of Investor Relations. I'd like to remind everyone that a number of statements being made today will be forward-looking in nature. Please remember that such statements are only predictions. Actual events and results may differ materially as a result of risks we face, including those discussed in Item 1A of our most recent Forms 10-Q and 10-K. We encourage you to review the information contained in our recent filings with the SEC and our earnings press release. The company does not assume any obligation to revise or update these forward-looking statements to reflect subsequent events or circumstances, except as required by law.
Today's presentation also contains non-GAAP financial information. Management uses this information internally to analyze results and believe it may be informative to investors in gaging the quality of our financial performance, identifying trends, and providing meaningful period-to-period comparisons. For a reconciliation of the non-GAAP measures presented, please see the company's most recent Forms 10-Q and 10-K.
And with that, I'll hand the call over to David.
David Mutryn
Thanks, Jessica, and good morning. We made significant progress in the second quarter executing on our financial and strategic priorities while generating strong cash flows and delevering our balance sheet by 0.5 turn sequentially. We also have strong line of sight on the drivers that will support margin improvement in the second half of the year, and as a result, are reaffirming our fiscal year 2023 financial. Finally, we divested 2 small businesses in the Outside the U.S. segment.
I will now discuss our results in greater detail. Maximus reported revenue of $1.21 billion for the second quarter of fiscal year 2023, which represents 2.5% year over year growth, or 4% on an organic basis. Our organic growth more than overcame the completion of short-term COVID work that was about $100 million in the year ago quarter. Adjusted operating income margin was 7.1% and adjusted EPS was $0.80 for the quarter. This compares to 8.3% and $1.07, respectively, for the prior year period, which still included profitable short-term COVID response work in the domestic segments and lower interest expense due to the interest rate environment a year ago. Last year's second quarter was effectively the last period with meaningful short-term work in the business. The Outside the U.S. segment realized a loss and margins in the quarter were slightly below our expectations, primarily driven by the U.S. Federal segment.