MAXIMUS, Inc. M&A announcement

Good morning and thanks for joining us. With me today is Bruce Caswell, President and CEO, and David Mutryn, CFO. I would like to remind everyone that a number of statements being made today will be preliminary or forward-looking in nature. Please remember that such statements are preliminary and subject to adjustment or 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 Form 10-K. We encourage you to review the information contained in our recent filings with the SEC and our 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. For a reconciliation of the non-GAAP measures presented, please see the company's most recent Forms 10-Q and forthcoming 10-K.

With that, I will hand the call over to Bruce.

Thanks, James, and good morning. Earlier, we announced that we have signed an agreement to acquire privately-owned Agile Defense. As we continue to execute our objective to position Maximus for the future, this acquisition is a natural next step in progressing key components of our long-term strategy. First, we have consistently discussed our desire to further expand within attractive segments of the U.S. federal market that we believe are capable of high organic growth in their own right, building upon earlier successful organic growth efforts. Agile Defense accelerates our access and presence within the defense and national security markets by bringing an earned and highly regarded reputation in serving the Department of War, Department of Homeland Security, the intelligence community, and federal law enforcement functions.

These capabilities address some of our nation's most critical and fastest-growing priorities across these federal departments and should provide substantial reach into these high-potential growth markets with durable spending characteristics. Second, this acquisition should accelerate our technology evolution by significantly strengthening our capabilities and domain knowledge in mission-focused data analytics and artificial intelligence, cybersecurity, and cloud modernization. In today's defense procurement environment, capabilities and domain knowledge alone are insufficient to succeed. Equally important are demonstrated success in what are known as nontraditional procurement models, such as other transaction agreements or OTAs, which can greatly compress the time from concept and prototype to production deployment and impact at scale. Agile Defense brings to Maximus a proven track record of winning in both the traditional and nontraditional procurement models. Agile Defense's capabilities, customer relationships, and highly skilled workforce is expected to provide Maximus with an enlarged platform for future growth.

First in the defense and national security community, but also in response to the evolving needs of federal civilian agencies. Maximus serves approximately 1 in 3 Americans through the programs we deliver on behalf of our customers. We pride ourselves in being a leader in transforming government services through technology automation, including responsible customer-driven AI deployment. Together with Agile, Maximus seeks to build on our leading position in citizen services delivery while broadening our participation in technology-intensive federal missions. We believe this combination can create long-term value for customers and shareholders. We view the acceleration of our presence within defense and national security as a strategic imperative and one that builds on our organic growth success with customers, including the Air Force Joint Cyber Command and Control, or JCC2, and the Transportation Security Administration.

We are particularly attracted to these missions because we believe they represent clear priorities of the federal government that we expect to last long into the future and align with capabilities and senior leadership in which we've been investing for years. They require continuous investment, attract significant innovation, and are increasingly dependent on advanced technology, cybersecurity, data pipeline creation, sensor integration, artificial intelligence, cloud adoption, and digital capabilities to deliver mission priorities. Agile Defense is expected to significantly expand our relationships, qualifications, and capabilities within the Department of War, national security, and federal law enforcement communities. We see a strong demand signal, and we believe our Maximus addressable services market in the Department of War will alone reach $58 billion by 2029. Technology services, including IT and digital modernization, software and analytics, in which Agile Defense is well-positioned, is the fastest-growing segment and comprises $21 billion of this addressable market.

Further, beyond the procurement of technology services and solutions, a significant and growing portion of our defense budget is allocated to research and development, testing, and evaluation, or RDT&E. Agile Defense brings highly desirable qualifications in this area, including a single award IDIQ contract with a ceiling of $1.01 billion Defense-wide. The FY 2027 RDT&E budget request represents 137% growth over FY 2026, and at $343.7 billion is 83% the size of the corresponding defense procurement budget. We believe these budget outlooks reflect a macro demand environment where our national defense priorities will place greater reliance on capabilities that advance cross-program and platform integration, joint interoperability, sensor and network integration, data pipeline construction, and AI-driven analytics. As the DoW weapon systems ecosystem becomes increasingly interconnected, linking C5ISR systems and autonomous edge devices, increasing complexity will require ongoing significant investment in RDT&E.

Furthermore, work in this area requires a high degree of cleared resources, facility access, and that RDT&E contractors provide continuous agility and independence from traditional OEMs. The combination with Agile Defense brings these desirable attributes to Maximus and helps build on the independent and conflict-free status that we have maintained, providing favorable barriers to entry in certain civilian business lines. As we have demonstrated with prior acquisitions, our objective is to support customer missions where there are opportunities to strengthen a competitive position amidst ongoing demand for services that are underpinned by prioritized funding streams. We believe that Agile Defense fits this formula to facilitate sustainable, diversified, long-term growth, which we regard as an important characteristic of our business. Let me turn to offer a more detailed picture of what Agile Defense offers its customers and some interesting features of the company.

Agile Defense brings deep technical expertise, innovation, and mission understanding developed through years of supporting customers that range from the Defense Information Systems Agency, or DISA, and the Chief Digital and Artificial Intelligence Office, or CDAO, under the DoW, to the US Army and US Cyber Command. Agile's relationships also extend to USCIS in the Department of Homeland Security. A particularly compelling aspect of Agile Defense is Agile Labs, the company's innovation engine that we believe can be a powerful driver of growth and differentiation across the companies. Agile Labs brings specialized technical talent, applied research and development capabilities, and expertise in emerging technologies that help customers rapidly translate innovation into mission outcomes, all within the secure, AI-enabled solutions they demand from Maximus today.

We believe the combination enables Maximus to extend the reach and impact of our existing investments in software engineering, secure platforms, and novel delivery services across a broader set of customer missions. As an example, through its forward-deployed engineers and trainers, Agile Labs brings high-performance AI-driven engineering and Department of War-proven AI harness that shorten the time between data integration and AI-enabled decision-making, and training for combatant commands and joint staff. Agile Labs provides a platform for continued modernization designed to deliver new capabilities at speed that government missions demand and strengthens Maximus' technology leadership. Across government, customers increasingly seek partners that can do more than deploy technology. They need partners that can translate technology investments into measurable mission outcomes, bring together mission expertise, secure integration, and execution that make AI operationally effective, even as the underlying models continue to advance.

For this reason, Agile Labs is embedded in many of the programs delivered by Agile Defense and plays a leading role in their CDAO enterprise-wide OTAs. Further demonstrating their alignment with the preferred purchasing models of the DoW, over 50% of Agile Defense's revenue comes from fixed-price contract arrangements and only 6% from cost-plus work. Together, this ability to rapidly deliver technology capabilities and solutions, often in the field, under non-traditional structures and on a performance basis, we believe positions Agile Defense to contribute organic growth at a rate in excess of our traditional civilian business lines. As we combine our organizations, we believe there will be opportunities to integrate Agile Defense capabilities into existing Maximus customer relationships while also bringing Maximus' operational expertise and technology-enabled solutions to a broader set of federal customers.

More specifically, Agile Defense provides Maximus with valuable access to established customers, contract vehicles, technical qualifications, and more than 1,100 cleared professionals that strengthen our ability to pursue opportunities across the national security marketplace. There are also native elements of the company that we've been seeking, one notable example being a certified procurement system. Correspondingly, with our CMMI Level 5 designation and highly desirable FedRAMP boundary, Maximus brings new capabilities to support Agile Defense. Importantly, the combination expands our addressable opportunity pipeline beyond the simple addition of the two companies' existing pipelines, unlocking a new set of opportunities that neither organization could have pursued as effectively on a standalone basis, and increasing the p-win on joint pipeline opportunities.

We believe the combination creates a stronger platform for innovation by bringing together complementary technical, operational, and mission-focused capabilities to support increasingly complex customer missions while continuing to deliver the quality and reliability our government partners expect. Finally, an important consideration in pursuing this deal was the recognition that the cultures of our organizations are highly aligned, as both companies are mission-driven, focused on customer outcomes, and recognize that lasting success comes from combining talented people, innovative technology, and disciplined execution. I'll close my remarks by underscoring that Agile Defense's deep multi-domain expertise and strong reputation are expected to provide the foundation for Maximus to meet the increasingly complex priorities of government while accelerating our evolution as a federal technology and mission services company. Together, we expect to create a stronger platform to support customers across healthcare, civilian, defense, national security, and federal law enforcement missions.