Maximus (MMS) risk factors, FY2025 10-K

Maximus's FY2025 10-K, filed Nov 20, 2025, lists 36 risk factors. Against the prior year's 32: 6 new, 2 dropped, 11 substantially reworded.

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Risk factors listed
361 groups
New this year
6vs 32 last year
Dropped
2since the prior 10-K
Substantially reworded
11of those kept
Section length
9k wordsItem 1A

What the changes say

  • Maximus tightened disclosures around government contract dependency, noting that 60% of revenue now comes from top 10 contracts.
  • New AI, ESG, and employee misconduct risks were added to reflect modern operating challenges.

What changed since the prior 10-K

New

  • New

    Risks Pertaining to Our Client Relationships

    General risks associated with managing and retaining our client relationships.

  • New

    Investments we make in the business may not be recovered on a timely basis, or at all

    Investments in office space, software, and personnel may not be recovered if expected revenues and cost savings fail to materialize.

  • New

    We face competition from a variety of organizations, many of which have substantially greater financial resources than we do; we may be unable to compete successfully with these organizations

    We face intense competition from larger, well-funded companies and may be unable to meet performance bond requirements for large contracts.

  • New

    We may not be successful in our AI initiatives, which could adversely affect our business, reputation, and/or financial results

    Our AI integration initiatives may fail, and better-funded competitors could outpace us or lower market entry barriers.

  • NewRisks Related to our Acquisitions

    Our employees or subcontractors may engage in misconduct or other improper activities, which could harm our business

    Employee or subcontractor misconduct, such as misusing client information or falsifying time records, could trigger fines and reputational damage.

  • NewRisks Related to our Acquisitions

    Requirements and expectations related to the manner in which we operate our business, particularly pertaining to environmental, social and governance practices, may differ between our stakeholders, exposing us to additional costs and risks

    Conflicting stakeholder expectations regarding environmental, social, and governance practices could increase compliance costs and damage stock valuation.

Dropped

  • Dropped

    We may incur significant costs before receiving related contract payments, which could result in an increased use of cash and risk of impairment charges

  • Dropped

    We face competition from a number of different organizations depending upon the market and geographic location in which we are competing. Some of our most significant competitors are included in Item 1 of this Annual Report on Form 10-K

Reworded

  • 78% rewritten

    We obtain most of our business through competitive bidding in response to government Requests For Proposals (RFP). We may not be awarded contracts through this process at the same level in the future as in the past, and contracts we are awarded may not be profitable

    Clarified that RFP contract awards require beating competitor proposals under short timetables and strict compliance rules.

    Was: We obtain most of our business through competitive bidding in response to government RFPs. We may not be awarded contracts through this process at the same level in the future as in the past, and contracts we are awarded may not be profitable

  • 76% rewritten

    Our business could be adversely affected by legislative or government budgetary and spending changes, including pricing changes

    Added government shutdowns as a specific reason for delayed funding and early contract termination.

    Was: Our business could be adversely affected by future legislative or government budgetary and spending changes

  • 73% rewrittenRisks Related to our Acquisitions

    We may face liabilities arising from divested or discontinued businesses

    Expanded divested business risks to include management distractions and post-divestiture financial guarantees.

  • 61% rewritten

    Our growth initiatives could adversely affect our profitability

    Added strategic expansion details, noting organic growth initiatives may divert management focus from core operations.

  • 52% rewritten

    Government entities have in the past and may in the future conclude their contracts with us earlier than we expect, or they could terminate their contracts with us earlier than we expect, which may result in revenue shortfalls and unrecovered costs

    Specified that government customers may terminate contracts either fully or partially without notice.

    Was: Government entities have in the past terminated and may, in the future, terminate their contracts with us earlier than we expect, which may result in revenue shortfalls and unrecovered costs

  • 46% rewritten

    If we fail to establish and maintain important relationships with government officials, entities and agencies, our ability to successfully bid under RFPs, retain existing work, and secure new work on future procurements may be adversely affected

    Updated to reflect reliance on third-party consultants and coalitions for maintaining government relationships.

    Was: If we fail to establish and maintain important relationships with government officials, entities and agencies, our ability to successfully bid under RFPs and retain existing work and secure new work on future procurements may be adversely affected

  • 39% rewritten

    We rely on key contracts with state, local, and federal governments for a significant portion of our revenue. A substantial reduction in those contracts would materially adversely affect our operating results

    Updated revenue concentration figures: top 10 contracts now drive 60% of revenue, and a single federal agency accounts for about 20%.

  • 29% rewrittenRisks Related to our Acquisitions

    In connection with our acquisitions, we may be required to take write-downs, write-offs, restructuring, impairment, or other charges that could negatively affect our business, assets, liabilities, prospects, outlook, financial condition, and results of operations

    Added explicit mention of potential restructuring and impairment charges if acquisitions underperform.

  • 28% rewrittenRisks Related to our Acquisitions

    A number of factors may cause our cash flows and results of operations to vary from quarter to quarter

  • 28% rewrittenRisks Related to our Acquisitions

    Our indebtedness could adversely affect our business and our ability to meet our obligations

  • 22% rewritten

    We use third parties to assist us in providing services to our customers, and these third parties may not perform as expected

All 36 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01Risks Pertaining to Our Client RelationshipsNew
  2. 02We rely on key contracts with state, local, and federal governments for a significant portion of our revenue. A substantial reduction in those contracts would materially adversely affect our operating results39% rewritten
  3. 03We obtain most of our business through competitive bidding in response to government Requests For Proposals (RFP). We may not be awarded contracts through this process at the same level in the future as in the past, and contracts we are awarded may not be profitable78% rewritten
  4. 04Our business could be adversely affected by legislative or government budgetary and spending changes, including pricing changes76% rewritten
  5. 05Government entities have in the past and may in the future conclude their contracts with us earlier than we expect, or they could terminate their contracts with us earlier than we expect, which may result in revenue shortfalls and unrecovered costs52% rewritten
  6. 06If we fail to establish and maintain important relationships with government officials, entities and agencies, our ability to successfully bid under RFPs, retain existing work, and secure new work on future procurements may be adversely affected46% rewritten
  7. 07Our customers may limit or prohibit the outsourcing of certain programs or may refuse to grant consents and/or waivers necessary to permit contractors, such as us, to perform certain elements of government programs
  8. 08Risks Pertaining to the Performance of Our Business
  9. 09If we fail to accurately estimate the factors upon which we base our contract pricing, we may generate less profit than expected or incur losses on those contracts
  10. 10Our growth initiatives could adversely affect our profitability61% rewritten
  11. 11Investments we make in the business may not be recovered on a timely basis, or at allNew
  12. 12We face competition from a variety of organizations, many of which have substantially greater financial resources than we do; we may be unable to compete successfully with these organizationsNew
  13. 13We use third parties to assist us in providing services to our customers, and these third parties may not perform as expected22% rewritten
  14. 14Risks Pertaining to Technology, Data and Data Security
  15. 15We may not be successful in our AI initiatives, which could adversely affect our business, reputation, and/or financial resultsNew
  16. 16Our systems and networks are and have been subject to cybersecurity breaches
  17. 17Many of our projects handle protected health information or other forms of confidential personal information, the loss or disclosure of which has adversely affected, and in the future, could further adversely affect, our business, results of operations, and reputation

Risks Related to our Acquisitions

  1. 18We may experience difficulties in integrating our operations with those of acquired businesses and realizing the expected benefits of these acquisitions
  2. 19We may face liabilities arising from divested or discontinued businesses73% rewritten
  3. 20In connection with our acquisitions, we may be required to take write-downs, write-offs, restructuring, impairment, or other charges that could negatively affect our business, assets, liabilities, prospects, outlook, financial condition, and results of operations29% rewritten
  4. 21We are subject to review and audit by governments at their sole discretion and, if any improprieties are found, we may be required to refund revenue we have received or forego anticipated revenue, which could have a material adverse impact on our revenue and our ability to bid in response to RFPs
  5. 22We may be subject to fines, penalties, and other sanctions if we fail to comply with laws governing our business
  6. 23Adverse judgments or settlements in legal disputes could harm our operating results, cash flows, and financial condition
  7. 24We may be precluded from bidding and performing certain work due to other work we currently perform
  8. 25Our employees or subcontractors may engage in misconduct or other improper activities, which could harm our businessNew
  9. 26Requirements and expectations related to the manner in which we operate our business, particularly pertaining to environmental, social and governance practices, may differ between our stakeholders, exposing us to additional costs and risksNew
  10. 27We may lose executive officers and senior managers on whom we rely to generate business and execute projects successfully
  11. 28We may be unable to attract and retain sufficient qualified personnel to sustain our business
  12. 29A number of factors may cause our cash flows and results of operations to vary from quarter to quarter28% rewritten
  13. 30Our profitability may be constrained by the effects of inflation
  14. 31Our indebtedness could adversely affect our business and our ability to meet our obligations28% rewritten
  15. 32We may not be able to realize the full value of our backlog
  16. 33We are subject to the risks of doing business internationally
  17. 34Our business could be materially and adversely impacted by natural or man-made factors outside of our control
  18. 35Inaccurate, misleading, or negative media coverage could adversely affect our reputation and our ability to bid for government contracts
  19. 36Our Articles of Incorporation and bylaws include provisions that may have anti-takeover effects

Other Maximus 10-Ks

  • FY2024 10-K risk factors
    32 risks

    Maximus relies heavily on government contracts, with 50% from the federal government and 37% from state and local agencies. Performance-based contracts represented 55% of revenue and fixed-price contracts 13% in fiscal 2024. Debt stands at $1.1 billion under credit facilities with a 5.52% effective interest rate. Backlog totals $16.2 billion, while international revenue accounts for 12%.

    Filed Nov 21, 2024

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.