Summary of Parsons Conference Call - December 09, 2025 Company Overview - **Company**: Parsons Corporation (NYSE: PSN) - **Segments**: 51% Federal Solutions, 49% Critical Infrastructure - **Revenue Breakdown**: - Cyber and Electronic Warfare: 20% - Space and Missile Defense: 10% - Critical Infrastructure Protection: 10% - Transportation: 28% - Water and Environment: 15% - Urban Development: 13% [3][4][5] Core Insights and Arguments - **Growth Performance**: - Anticipated total growth of 14% for the year, with 9% organic growth [7] - Excluding the Confidential Contract, Parsons has been the industry organic growth leader for three consecutive years [7][28] - The Confidential Contract contributed $355 million in revenue, expected to diminish to $20 million in Q4 and $10-$15 million in early 2026 [6][8] - **FAA Contract**: - Parsons has a long-standing relationship with the FAA, having supported them for five decades [10] - Awarded a $1.8 billion contract in April 2023, running until April 2033, with $1 billion ceiling remaining [12][14] - **Growth Areas for 2026**: 1. **Critical Infrastructure**: Expected double-digit growth in North America and the Middle East, driven by the Infrastructure Investment and Jobs Act [15] 2. **Border Security**: $160 billion allocated in the reconciliation bill, with Parsons involved in various international border security programs [16] 3. **Golden Dome Initiative**: Focus on missile defense integration, with a $1 billion ceiling remaining [17] 4. **Cybersecurity**: Addressing national security challenges, particularly concerning China [18] - **Emerging Contaminants**: - PFOS/PFAS market is estimated at $40 billion, with patented HOT ESCO technology for on-site remediation [20][48] - **International Projects**: - Significant involvement in major projects in Saudi Arabia, including preparations for the 2030 Expo and 2034 World Cup [35] - Growth in the UAE and Qatar, focusing on urban development and infrastructure [36] Additional Important Points - **M&A Activity**: - Parsons has acquired 16 companies since 2017, with a focus on enhancing capabilities in critical infrastructure and federal sectors [28][39] - Plans for continued M&A activity, with an active pipeline and a focus on share repurchases due to stock dislocation [39] - **Financial Performance**: - Consistent margin expansion, with a 50 basis point increase in margins over the past two years [30][32] - Book-to-bill ratio greater than 1.0 for 20 consecutive quarters in critical infrastructure [34] - **Capital Allocation**: - Authorized for $250 million in share repurchases, with $185 million remaining as of Q3 [39] - **Regulatory Environment**: - Federal MCO levels remain unchanged, but implementation timelines have been extended, with expectations for market peak around 2032 [49] This summary encapsulates the key points discussed during the Parsons conference call, highlighting the company's strategic focus, growth areas, and financial performance.

Core Insights - Parsons Corporation has been awarded the 2025 SpaceNews Icon Award for Civil Space Achievement for its work on the Traffic Coordination System for Space (TraCSS) program, highlighting its commitment to safe and efficient space operations [1][2] Company Achievements - The award reflects the efforts of Parsons' Space Operations Team, which successfully transitioned the TraCSS program from concept to operational capability in less than two years [2] - The development of TraCSS enhances collision avoidance measures and promotes a cooperative framework for satellite operators globally [2] Industry Context - The number of satellites in orbit has increased significantly, creating a more complex space environment that necessitates effective traffic coordination solutions [3] - Parsons, in collaboration with the Office of Space Commerce (OSC), is focused on delivering essential solutions to support safe operations in the burgeoning space industry [3]

Core Insights - Parsons Corporation (NYSE:PSN) experienced a significant decline of 21.29% week-on-week due to losing a $1 billion air traffic control system contract to Peraton [1] - The Federal Aviation Administration (FAA) awarded a $12.5 billion contract to Peraton for overseeing and overhauling the US air traffic control system, citing Peraton's capabilities in integrating complex technology and collaborating with federal agencies [1] Company Response - Parsons Corporation acknowledged the air traffic control system as a critical priority for national air travel safety and security, emphasizing its long-standing support for the FAA [2] - The company expressed readiness to support the FAA on existing contracts and expand its role as an implementation partner [2] Market Reaction - Following the FAA's decision, investment firm Raymond James downgraded Parsons Corporation from strong buy to market perform, indicating a shift in investment sentiment [2] - The firm noted that while Parsons has potential, it believes that certain AI stocks may offer better returns with limited downside risk [2]

Core Points - Parsons Corporation has been selected by the Missouri Highways and Transportation Commission for the Interstate 70 Rocheport to Columbia Design-Build project, valued at $441 million [1][2] - The project aims to enhance a critical segment of I-70 by adding a third lane in each direction, modernizing infrastructure, and improving interchange operations to facilitate safer freight and passenger movement [2][3] - Construction is scheduled to commence in mid-2026 and is expected to be completed by December 2029 [2] Company Expertise - Parsons and Emery Sapp & Sons (ESS) have a strong track record with a combined portfolio of 69 design-build projects and 15 I-70 rehabilitation efforts completed or in progress over the last five years [3] - The team has extensive experience with Missouri Department of Transportation programs, including previous I-70 modernization projects, which positions them well to meet budget, schedule, and mobility objectives [3] Industry Impact - The project is part of Missouri's initiative to strengthen its transportation corridors, which is crucial for regional economic development and infrastructure reliability [3] - Parsons is recognized as a leading provider of disruptive technology in national security and global infrastructure markets, with capabilities spanning various sectors including transportation and critical infrastructure protection [4]

Core Insights - Parsons Corporation has secured a position on Sound Transit's $1 billion ceiling Multiple Award Task Order Contract (MATOC) for design services, supporting a $60 billion capital program in North America [1][2] - The contract spans five years with two potential one-year extensions, focusing on architecture, engineering, and related services for various transportation projects [2][3] Company Background - Parsons Corporation is recognized as a leading provider of disruptive technology in national security and global infrastructure markets, with expertise in areas such as cyber warfare, transportation, and critical infrastructure protection [6] - The company has extensive experience in designing and delivering infrastructure, including over 10,000 miles of roadways and 4,500 bridges, contributing to improved safety and efficiency in urban environments [4] Project Details - Under the MATOC, Parsons will engage in projects that include light rail extensions, system resiliency improvements, and state of good repair initiatives [2] - The company has a history of collaboration with Sound Transit, including significant projects like the Federal Way Link Extension and the Everett Link Extension [3][8]

Group 1 - Parsons Corporation will participate in a fireside chat at the Raymond James TMT and Consumer Conference on December 9, 2025, at approximately 10:40 a.m. Eastern Time [1] - The presentation will be available live via webcast on the investor relations section of Parsons' website, with a replay available for 30 days following the presentation [2] Group 2 - Parsons Corporation is a leading disruptive technology provider in national security and global infrastructure markets, with capabilities in cyber and electronic warfare, space and missile defense, transportation, water and environment, urban development, and critical infrastructure protection [3]

Market Performance - U.S. stocks showed positive movement with the Nasdaq Composite gaining approximately 0.2% on Friday, while the Dow increased by 0.17% to 47,933.71, and the S&P 500 rose by 0.15% to 6,867.40 [1] - Communication services sector saw a notable increase of 0.9%, while utilities stocks experienced a decline of 0.6% [1] Economic Indicators - The U.S. PCE price index rose by 0.3% month-over-month in September, consistent with the previous month and aligning with market expectations [2][11] - U.S. personal income increased by 0.4% month-over-month to $26.397 trillion in September [8] Commodity Prices - Oil prices increased by 0.7% to $60.08, while gold rose by 0.1% to $4,245.70. Silver saw a significant increase of 2.7% to $59.035, and copper rose by 1.2% to $5.4385 [5] Company News - Praxis Precision Medicines Inc shares surged by 31% to $248.00 following the completion of its pre-NDA meeting with the FDA [9] - DigitalBridge Group Inc shares increased by 32% to $12.86 amid reports of SoftBank's interest in acquiring the company [9] - Rubrik Inc shares rose by 23% to $86.80 after reporting better-than-expected third-quarter results and raising its FY26 guidance [9] - Parsons Corp shares dropped by 25% to $62.97 after losing a joint bid with IBM for a new air traffic control system [9] - Sportsman's Warehouse Holdings Inc shares fell by 30% to $1.70 following disappointing third-quarter results [9] - Domo Inc shares decreased by 23% to $8.87 after reporting third-quarter results and issuing lower-than-expected fourth-quarter sales guidance [9]

U.S. Stock Market Performance - U.S. stocks traded higher, with the Nasdaq Composite gaining around 0.2% on Friday [1] - The Dow increased by 0.17% to 47,933.71, while the NASDAQ rose 0.16% to 23,543.03, and the S&P 500 gained 0.15% to 6,867.40 [1] - Communication services shares jumped by 0.9%, while utilities stocks fell by 0.6% [1] Economic Indicators - The U.S. PCE price index increased by 0.3% month-over-month in September, consistent with the previous month and market estimates [2][11] - U.S. personal income rose by 0.4% month-over-month to $26.397 trillion in September [8] Commodity Market - Oil traded up 0.7% to $60.08, gold increased by 0.1% to $4,245.70, silver rose by 2.7% to $59.035, and copper gained 1.2% to $5.4385 [5] Company-Specific Movements - Praxis Precision Medicines Inc shares surged 31% to $248.00 after announcing completion of its pre-NDA meeting with the FDA [9] - DigitalBridge Group Inc shares increased by 32% to $12.86 following reports of SoftBank's interest in acquiring the company [9] - Rubrik Inc shares rose 23% to $86.80 after reporting better-than-expected third-quarter results and raising FY26 guidance [9] - Parsons Corp shares dropped 25% to $62.97 after losing a joint bid with IBM for a new air traffic control system [9] - Sportsman's Warehouse Holdings Inc shares fell 30% to $1.70 after reporting third-quarter results [9] - Domo Inc shares decreased by 23% to $8.87 after reporting third-quarter results and issuing lower-than-expected fourth-quarter sales guidance [9]

Upgrades - Rubrik (RBRK) upgraded to Outperform from Market Perform due to "stellar beat-and-raise results" and ongoing share gains in the cyber-resilience market [2] - Corpay (CPAY) upgraded to Outperform from Perform with a price target of $380, as shares offer "growth at a discount" [2] - Humana (HUM) upgraded to Buy from Hold with a price target increased to $313 from $253, following an analysis of the company's Stars diversification effort [2] - Unity (U) upgraded to Overweight from Equal Weight with a price target raised to $51 from $42, based on a positive outlook for the mobile game advertising industry in 2026 [3] - Dollar General (DG) upgraded to Buy from Accumulate with a price target of $140, noting strong traffic growth compared to Dollar Tree (DLTR) [3] Downgrades - Argan (AGX) downgraded to Hold from Buy with a price target raised to $325 from $260, citing a top-tier valuation despite strong execution and a $3B backlog [4] - AIG (AIG) downgraded to Equal Weight from Overweight with a price target reduced to $88 from $95, due to limited attractive growth opportunities in the current pricing environment [4] - Synchrony (SYF) downgraded to Neutral from Outperform with an unchanged price target of $82, as lower end consumer exposure makes shares less appealing after a recent rally [4] - Parsons (PSN) double downgraded to Market Perform from Strong Buy without a price target, following the FAA's decision to award a significant contract to Peraton [4] - Kosmos (KOS) double downgraded to Underperform from Buy with a price target lowered to $1 from $3.40, after cutting brent oil price forecasts for 2026 and 2027 to $60 and $62 per barrel respectively [4]

Group 1 - U.S. stock futures were mostly higher, with Nasdaq futures gaining around 100 points [1] - Domo Inc reported quarterly earnings of 1 cent per share, beating the analyst consensus estimate of a loss of 5 cents per share [2] - Domo's quarterly sales were $79.400 million, exceeding the analyst consensus estimate of $78.967 million [2] Group 2 - Domo shares fell 14.2% to $9.93 in pre-market trading following the earnings report and weak fourth-quarter sales guidance [2] - Sportsman's Warehouse Holdings Inc tumbled 18.8% to $1.99 in pre-market trading after reporting third-quarter results [4] - Argan Inc fell 11.6% to $315.00 in pre-market trading due to worse-than-expected third-quarter sales results [4] - Hewlett Packard Enterprise Co shares dipped 9.2% to $20.80 after mixed fourth-quarter financial results and weak first-quarter sales guidance [4] - SentinelOne Inc declined 8% to $15.61 after narrowing its FY26 sales guidance below estimates [4] - SoFi Technologies Inc fell 7.5% to $27.39 as the company announced pricing of a public offering of common stock [4] - Oklo Inc fell 6.6% to $104.30 after entering into an equity distribution agreement to offer up to $1.5 billion of common stock [4] - Docusign Inc fell 5.5% to $67.21 following third-quarter results [4] - Parsons Corp fell 5.3% to $80.00 in pre-market trading [4] - Chatham Lodging Trust fell 4.3% to $6.24 in pre-market trading [4]