Core Viewpoint - Parsons (PSN) reported quarterly earnings of $0.75 per share, missing the Zacks Consensus Estimate of $0.80 per share, and showing a decrease from $0.78 per share a year ago, indicating an earnings surprise of -6.02% [1] Financial Performance - The company posted revenues of $1.6 billion for the quarter ended December 2025, which was 4.9% below the Zacks Consensus Estimate and a decline from $1.73 billion in the same quarter last year [2] - Over the last four quarters, Parsons has surpassed consensus EPS estimates three times but has not beaten consensus revenue estimates [2] Stock Performance - Parsons shares have increased by approximately 13.6% since the beginning of the year, outperforming the S&P 500, which gained 1.4% [3] Future Outlook - The company's earnings outlook is crucial for investors, including current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the next quarter is $0.74 on revenues of $1.55 billion, and for the current fiscal year, it is $3.39 on revenues of $6.68 billion [7] Industry Context - The Technology Services industry, to which Parsons belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

FOURTH QUARTER AND FISCAL YEAR 2025 Earnings Conference Call Presentation FEBRUARY 11, 2025 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs, and assumptions, and are not guarantees of future performance. Fo ...

Financial Performance - In fiscal 2025, the company generated revenues of $6.4 billion, net income attributable to Parsons Corporation of $241.1 million, and Adjusted EBITDA of $609.3 million[29]. - The company achieved an overall win rate of 61% in fiscal 2025, with a strong re-compete win rate of 99.6%, ensuring long-term certainty on key contracts[30]. - The company achieved an average award and incentive fee of 93% in fiscal 2025, 86% in fiscal 2024, and 92% in fiscal 2023[54]. - The company aims for financial performance goals of over 10% top line growth and over 10% Adjusted EBITDA margin, aligning with its six focused markets[83]. Revenue Segments - The Federal Solutions segment contributed 51% to revenue and 46% to Adjusted EBITDA, while the Critical Infrastructure segment contributed 49% to revenue and 54% to Adjusted EBITDA for fiscal 2025[20]. - Federal Solutions revenues decreased by 20% year-over-year, while Critical Infrastructure revenues increased by 15%[54]. Backlog and Contracts - As of December 31, 2025, the total backlog was $8.7 billion, reflecting a decrease of 2% from the previous year[30]. - As of December 31, 2025, the total backlog was approximately $8.7 billion, consisting of $6.4 billion funded backlog and $2.3 billion unfunded backlog, with an expectation to recognize $4.1 billion of funded backlog as revenue in the next twelve months[82]. - The company’s backlog includes orders under contracts that can extend for several years, with federal contracts typically only partially funded at any point during their term[81]. Strategic Growth and Market Presence - The company expanded its footprint in the Indo-Pacific Command region and the European theater in 2025, enhancing its strategic presence[31]. - The company serves a diverse customer base, including federal, state, municipal, and private sector infrastructure owners, enhancing its market reach[23]. - The company focuses on high-growth markets such as cyber and electronic warfare, space and missile defense, and critical infrastructure protection, with strategies to drive innovation and optimize performance[77]. Technological Investments - Technological investments include the DroneArmor solution for countering unmanned aircraft systems and the AresNXT biometric collection solution, addressing critical customer needs[34]. - The company leverages advanced technologies such as artificial intelligence and digital twins to enhance system performance and address market challenges[24]. - The company is integrating AI-driven design and construction technologies across over 100 major projects in the Gulf Cooperation Council (GCC) region[41]. - The company is committed to leveraging artificial intelligence and machine learning to enhance internal processes and improve customer experience[76]. - The company is focusing technology investments in areas such as artificial intelligence, digital transformation, and quantum computing to stay at the forefront of evolving trends[58]. Acquisitions and Growth Strategy - The company completed 16 strategic acquisitions from 2017 to the end of 2025, including Applied Sciences for $28.1 million and CTI for $91.5 million, aimed at expanding its technology offerings and capabilities[67]. - The acquisition of TRS Group for $36.6 million enhances the company's expertise in environmental remediation, particularly in PFAS treatment, with over 160 successful projects completed[68]. - The company has a robust acquisition pipeline, continually evaluating opportunities for disciplined growth through acquisitions[69]. - The company is committed to pursuing acquisitions of high-growth, technology-driven companies to transform its business into an integrated solutions provider[79]. Employee Engagement and Culture - The company has over 21,000 employees as of December 31, 2025, reflecting a commitment to employee engagement and retention[74]. - Employee participation in the Employee Stock Ownership Plan (ESOP) includes approximately 5,800 employees, who collectively own about 39% of the total outstanding shares in the ESOP[93]. - In 2025, over 4,000 DRIVE awards were given to employees, with monetary awards totaling over $7.1 million, reflecting a strong culture of employee recognition[89]. - The company emphasizes a people-first culture, promoting employee development and engagement to attract and retain top talent[74]. - The company has a robust mentoring program that includes senior leaders and employees, fostering a culture of growth and development[90]. Compliance and Risk Management - The company maintains a compliance program overseen by the Chief Compliance Officer to ensure adherence to various regulations[110]. - The company is subject to U.S. export control laws and regulations, which may impact its ability to export items or provide services[107]. - Environmental, health, and safety regulations could lead to significant liabilities if the company incurs violations in the future[109]. - The company has not experienced material costs related to compliance with environmental, health, and safety laws in the past[109]. Financial Obligations and Debt - As of December 31, 2025, the company had $450.0 million outstanding under the Term Loan Agreement, with an interest rate of 4.8%[449]. - The interest rate for borrowings under the Term Loan Agreement effective June 2025 will range from 0.875% to 1.500% based on the adjusted Term SOFR benchmark rate[449]. - The company had no amounts outstanding under the Revolving Credit Facility as of December 31, 2025 and December 31, 2024[448]. - The interest rate for the Revolving Credit Facility effective June 2025 will range from 1.0% to 1.625% based on the leverage ratio at the end of each quarter[448]. - The interest rate for the previous facility was 5.6% as of December 31, 2024[449]. Intellectual Property - The company holds 41 issued patents and 12 pending patents in the United States, along with 64 registered trademarks, indicating a strong intellectual property portfolio[97].

Financial Performance - Total revenue for Q4 2025 decreased by $131 million, or 8%, to $1.6 billion, and was down 10% on an organic basis[6] - Net income for Q4 2025 increased by 3% to a record $56 million, with diluted EPS at $0.51 compared to $0.49 in Q4 2024[8] - Record adjusted EBITDA for Q4 2025 was $153 million, a 5% increase year-over-year, with an adjusted EBITDA margin of 9.6%[9] - For fiscal year 2025, total revenue decreased by $386 million, or 6%, to $6.4 billion, and was down 9% on an organic basis[10] - Fiscal year 2025 net income increased to $241 million, with diluted EPS at $2.20 compared to $2.12 in the prior year[10] - For the fourth quarter of 2025, Parsons reported revenue of $1.6 billion, with a net income of $74.8 million[37] - Basic earnings per share for the fourth quarter of 2025 was $0.52, while diluted earnings per share was $0.51[37] - Net income for 2025 was $308,864 thousand, up from $290,665 thousand in 2024, reflecting an increase of 6.5%[41] - Adjusted net income attributable to Parsons Corporation for the twelve months ended December 31, 2025, was $343,411,000, compared to $352,699,000 for the same period in 2024, indicating a decrease of 2.6%[51] Revenue Segments - Critical Infrastructure revenue for Q4 2025 increased by $89 million, or 12%, to $820 million, driven by organic growth of 9%[12] - Federal Solutions revenue for Q4 2025 decreased by $219 million, or 22%, to $784 million, and was down 24% on an organic basis[17] Contracts and Acquisitions - The company secured 15 contract wins valued at over $100 million for the full year, matching last year's record[22] - Parsons was awarded a new ten-year $392 million contract, leveraging its biometrics and network engineering capabilities, with $36 million booked during Q4[23] - Parsons was awarded a $593 million contract extension under the FAA's Technical Support Services Contract, extending performance through 2030[26] - The company received a sole-source contract notification with a ceiling value of up to $500 million, booking $13 million for low-rate initial production[26] - Parsons closed its acquisition of Altamira Technologies Corporation for up to $375 million, enhancing its capabilities in signals intelligence and space solutions[26] - The acquisition of Applied Sciences Consulting, Inc. was completed, expanding Parsons' water expertise and presence in Florida[26] Cash Flow and Assets - Cash flow from operations for Q4 2025 increased by 32% to $168 million, while for the full year it decreased by 9% to $478 million[23] - Total assets increased to $5,769,534 thousand in 2025 from $5,487,962 thousand in 2024, representing a growth of 5.1%[40] - Cash flows from operating activities for 2025 were $478,382 thousand, compared to $523,606 thousand in 2024, a decrease of 8.6%[41] Debt and Liabilities - Long-term debt increased to $1,237,816 thousand in 2025 from $784,096 thousand in 2024, marking a rise of 57.7%[40] - The company reported a decrease in total current liabilities to $1,531,664 thousand in 2025 from $1,915,644 thousand in 2024, a reduction of 20.0%[40] Guidance and Future Outlook - Fiscal Year 2026 revenue guidance is set between $6.5 billion and $6.8 billion, with adjusted EBITDA guidance of $615 million to $675 million[28] - Long-term growth targets include mid-single-digit organic revenue growth and adjusted EBITDA margin expansion to double digits by 2028[30] - Free cash flow is expected to exceed 100%, supporting future investments[30] - The company aims to prioritize capital deployment towards M&A and share repurchases to enhance shareholder value[30] Operational Metrics - Total contract awards for the twelve months ended December 31, 2025, were $6,371,950 thousand, a decrease of 9.5% from $7,039,272 thousand in 2024[42] - Total backlog as of December 31, 2025, was $8,716,788 thousand, down from $8,893,915 thousand in 2024, indicating a decline of 2.0%[43] - The overall book-to-bill ratio for the twelve months ended December 31, 2025, was 1.0, consistent with the previous year[44] Adjusted Metrics - Adjusted EBITDA and other non-GAAP measures were provided to give a clearer picture of the company's operational performance, excluding non-recurring costs[45] - Adjusted EBITDA for Q4 2025 reached $153,262,000, up from $146,619,000 in Q4 2024, representing a growth of 4.5%[50] - Federal Solutions Adjusted EBITDA attributable to Parsons Corporation was $66,011,000 for Q4 2025, down from $99,925,000 in Q4 2024, a decrease of 33.9%[50] - Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation increased to $67,923,000 in Q4 2025 from $31,319,000 in Q4 2024, a significant rise of 116.5%[50] Expenses - Total interest expense for the twelve months ended December 31, 2025, was $44,424,000, compared to $40,154,000 in 2024, reflecting an increase of 10.5%[48] - The company incurred transaction-related costs of $4,295,000 in Q4 2025, down from $8,180,000 in Q4 2024, a reduction of 47.5%[51] - The weighted-average number of diluted shares outstanding for Q4 2025 was 108,221,000, compared to 108,355,000 in Q4 2024, a slight decrease of 0.1%[51] - Adjusted earnings per share for Q4 2025 was $0.75, down from $0.78 in Q4 2024, a decline of 3.8%[51]

Core Insights - Parsons Corporation reported a successful fiscal year 2025 with double-digit revenue growth excluding a confidential contract, record adjusted EBITDA, and strong cash flow performance [4][5] - The company secured 15 contracts valued over $100 million, matching the previous year's record, demonstrating the strength of its diversified portfolio [4][20] Q4 2025 Financial Highlights - Total revenue for Q4 2025 decreased by $131 million, or 8%, to $1.6 billion, with a 10% decline on an organic basis; however, excluding the confidential contract, revenue grew by 11% [5][6] - Operating income increased by 5% to $105 million, while net income rose by 3% to $56 million, with GAAP diluted EPS at $0.51 compared to $0.49 in Q4 2024 [5][6] - Record adjusted EBITDA reached $153 million, a 5% increase year-over-year, with an adjusted EBITDA margin of 9.6% [6][7] Fiscal Year 2025 Highlights - Total revenue for FY 2025 decreased by $386 million, or 6%, to $6.4 billion, with a 9% decline on an organic basis; excluding the confidential contract, revenue grew by 12% [8][9] - Net income for FY 2025 was a record $241 million, with diluted EPS at $2.20, up from $2.12 in FY 2024 [8][9] - Adjusted EBITDA for FY 2025 was a record $609 million, a 1% increase, with an adjusted EBITDA margin of 9.6% [9] Segment Results Critical Infrastructure Segment - Q4 2025 revenue increased by $89 million, or 12%, to $820 million, driven by organic growth of 9% and contributions from recent acquisitions [10][11] - Adjusted EBITDA for Q4 2025 rose by 87% to a record $87 million, with an adjusted EBITDA margin of 10.6% [11] - FY 2025 revenue increased by $400 million, or 15%, to $3.1 billion, with adjusted EBITDA up by 73% to $328 million [12][14] Federal Solutions Segment - Q4 2025 revenue decreased by $219 million, or 22%, to $784 million, with a 24% decline on an organic basis; however, excluding the confidential contract, revenue increased by 9% [15][16] - Adjusted EBITDA for Q4 2025 decreased by 34% to $66 million, with an adjusted EBITDA margin of 8.4% [16] - FY 2025 revenue decreased by $786 million, or 20%, to $3.2 billion, with adjusted EBITDA down by 32% to $281 million [17][18] Key Performance Indicators - Q4 2025 net bookings decreased by 10% to $1.5 billion, with a book-to-bill ratio of 0.9x [19] - FY 2025 net bookings decreased by 9% to $6.4 billion, maintaining a book-to-bill ratio of 1.0x [21] Significant Contract Wins - Parsons secured four contracts worth over $100 million each in Q4 2025, totaling 15 such contracts for the year [20] - Notable contracts include a ten-year $392 million contract for biometrics solutions and a $125 million task order for the U.S. Army [22] Corporate Highlights - The company completed strategic acquisitions, including Altamira Technologies for $375 million, enhancing its capabilities in signals intelligence and space solutions [28] - Parsons received multiple awards for its support of the military community and advancements in space traffic coordination [23][28] Fiscal Year 2026 Guidance - The company projects FY 2026 revenue between $6.5 billion and $6.8 billion, with adjusted EBITDA guidance of $615 million to $675 million [25]

Core Insights - Parsons Corporation has been awarded a $125 million contract over five years to support the U.S. Army's research and development initiatives, specifically through the Army Research Laboratory and its High Performance Computing Modernization Program [1][2] - This contract reflects Parsons' long-standing commitment to innovation and excellence in military support, continuing a partnership with the Army Research Laboratory that has lasted over 20 years [1][2] Company Overview - Parsons is recognized as a leading provider of disruptive technology in national security and global infrastructure markets, with expertise in areas such as cyber and electronic warfare, space and missile defense, and critical infrastructure protection [5] - The company emphasizes its agility and rapid development capabilities to deliver transformative solutions that enhance national security and mission readiness [2][5] Contract Details - Under the new contract, Parsons will provide a range of services including research, development, testing and evaluation, infrastructure operations, and project management [3] - The initiative aims to enhance scientific research and technology in critical areas such as information processing, network sciences, and advanced computing [2][3] Collaboration and Impact - The collaboration with the Army Research Directorate is designed to empower the Army's capabilities in AI/ML research and cybersecurity, contributing to impactful operations [2] - The contract also includes support for the Defense Research and Engineering Network operations, ensuring robust network security and effective systems administration [3]

Core Insights - Parsons Corporation secured a $91 million contract extension for the Overseas Security Installation Services (OSIS II) contract, part of a nearly $1.12 billion contract with the U.S. Department of State, highlighting the company's reliable performance in security solutions [1] Group 1: Contract Details - The $91 million extension represents the seventh option year of a 10-year contract, emphasizing Parsons' long-standing reputation as a trusted partner for government clients [1] - The OSIS II contract involves comprehensive security solutions for over 265 U.S. diplomatic facilities worldwide, including embassies and consulates [2] Group 2: Company Capabilities - Parsons provides a range of integrated security solutions, including technical security installation, operations support, access control systems, counter-unmanned aircraft systems, and biometric security technologies [2] - The company focuses on delivering transformative solutions that enhance national security and operational capabilities, aligning with federal goals for acquisition reform and rapid technology delivery [3] Group 3: Recent Developments - The OSIS II extension reflects Parsons' ongoing growth in the defense and security sector, with recent contracts for national security infrastructure programs and border security in the Middle East [4] - Parsons' global defense and security teams offer tailored protection solutions and project management expertise across military, government, and civilian infrastructure [5] Group 4: Company Overview - Parsons is recognized as a leading provider of disruptive technology in national security and global infrastructure, with capabilities spanning cyber warfare, space defense, transportation, and critical infrastructure protection [6]

Core Insights - Parsons Corporation has deployed its counter-unmanned aircraft system, DroneArmor™, to enhance security along the U.S. southern border for a Federal national security customer [1][2] - DroneArmor™ is a Technology Readiness Level 9 (TRL-9) capability that provides real-time situational awareness and precise mitigation against unauthorized drone activity [2] - The system integrates advanced technologies including AI and machine learning to autonomously track and mitigate threats, thereby improving decision-making and situational awareness [3][4] Company Overview - Parsons Corporation is recognized as a leading disruptive technology provider in national security and global infrastructure markets, with expertise in various sectors including cyber warfare, space defense, and critical infrastructure protection [6] - The company emphasizes rapid innovation and adaptability in its C-UAS solutions, utilizing a modular and scalable command and control platform [4] - The development of DroneArmor™ takes place at Parsons' C-UAS Center of Excellence in West Virginia, which focuses on rapid prototyping and interoperability testing [4]

Core Insights - Parsons Corporation has been awarded a six-year, $60 million contract by the Foothill Gold Line Construction Authority to design phase 2B2 of the Foothill Gold Line project, which includes a 2.3-mile extension from Pomona to Claremont [1][2] Group 1: Project Details - The Foothill Gold Line project is part of the longest linear light rail line in the world, enhancing the Metro A Line light rail system [1] - The new segment aims to improve commuter and visitor access between downtown Los Angeles and eastern Los Angeles County, addressing previous limitations for commuters [2] Group 2: Company Experience and Impact - Parsons has led design teams for each phase of the Foothill Gold Line project for the past 25 years, showcasing its long-standing commitment to the project [2] - The company has extensive experience in infrastructure design, including over 10,000 miles of roadways, 4,500 bridges, and more than 450 rail and transit projects [3] Group 3: Environmental and Community Benefits - The project is expected to provide innovative and sustainable solutions that reduce traffic congestion, improve air quality, and enhance commuter safety and reliability [2] - Parsons has been involved in improving connections between California communities since its founding in 1944, contributing to the overall quality of life [3]

Core Insights - New Murabba Development Co. (NMDC) is testing the market for modular and offsite fit-out solutions for its Mukaab development through a request for information (RFI) [2][3] - The RFI was issued on January 26, with a submission deadline set for February 11 [3] - NMDC plans to meet with potential firms in the first week of February to discuss solutions in detail [4] Company Developments - NMDC is seeking experienced suppliers and contractors to provide advice on the feasibility, constraints, and execution strategy for non-load-bearing modular systems for the four corner towers of the Mukaab structure [4] - Feedback from the RFI will be used to inform future design and procurement decisions [5] - NMDC was launched in February 2023 by Crown Prince and Prime Minister Mohammed bin Salman to develop the world's largest modern downtown in Riyadh [6] Project Management - The company has appointed US-based Parsons as the infrastructure lead design consultant for the first phase of its development [7] - The agreement with Parsons aims to establish the technical foundations for activating the first phase and supporting future phases of Riyadh's new downtown [8]