Core Insights - Parsons Corporation has been awarded the Cooperative Threat Reduction Integration Contract (CTRIC) IV by the Defense Threat Reduction Agency (DTRA), highlighting its leadership in global threat reduction and security [1][3] - The contract has a ceiling value of $3.5 billion and includes a five-year base period with one five-year option period [1][2] Contract Details - Under the CTRIC IV contract, Parsons will compete for task orders aimed at reducing threats from weapons of mass destruction (WMD), including chemical, biological, radiological, and nuclear threats [2] - The efforts will involve eliminating, securing, or consolidating WMD and related materials, as well as assisting partner nations in enhancing their operational capabilities to prevent and detect illicit trafficking of WMD-related materials and technology [2] Company Positioning - Parsons has a long-standing partnership with DTRA and is committed to leveraging its national security solutions experience to support initiatives that counter WMD and emerging threats globally [3] - The CTRIC IV contract positions Parsons to continue its critical work with DTRA, further supporting the Cooperative Threat Reduction Directorate in addressing WMD-related threats [3] Company Overview - Parsons is recognized as a leading disruptive technology provider in national security and global infrastructure markets, with capabilities spanning cyber and electronic warfare, space and missile defense, and critical infrastructure protection [5]

Question-and-Answer SessionIt's great to have you. Maybe just starting high level at the sort of industry end market level and the backdrop and environment. We've had DOGE and similar efforts. Then we had a government shutdown. Where are we now? Are things normal? Are they close to normal? Are they still completely abnormal? What are you seeing in the marketplace?Carey SmithPresident, CEO & Chairwoman Sure. So I would say with DOGE, I think that's pretty much behind us. I will say it affected a lot of the c ...

Summary of Parsons (NYSE: PSN) 2025 Conference Call Company Overview - **Company**: Parsons Corporation (NYSE: PSN) - **Industry**: Aerospace and Defense Key Points Industry and Market Environment - The impact of DOGE and government shutdowns is receding, with the market slowly returning to normal conditions [2][4] - Parsons was minimally affected by DOGE, with no contract terminations, and 50% of its business is not federal government-related, mitigating impacts from the shutdown [4][5] Financial Performance and Growth Projections - Parsons anticipates mid-teens growth in its federal segment for Q4, despite some delays in contract actions due to the shutdown [9][11] - The company expects a contribution of approximately $350 million from confidential contracts in 2025, with $285 million in the first half [11][12] - For 2026, Parsons projects mid-single digit growth for its core business, with strong tailwinds from federal funding initiatives [12][13] Major Funding Initiatives - The reconciliation bill includes significant funding allocations: $160 billion for border security, $25 billion for Golden Dome, $21 billion for the Pacific Deterrence Initiative, and $12.5 billion for Federal Aviation Modernization [5][6] - Parsons is well-positioned to benefit from these funding initiatives due to its aligned portfolio [6] FAA Project Insights - The FAA project is expected to be awarded imminently, with a total budget of $12.5 billion over three years, focusing on modernization and safety improvements [14][15] - Parsons has partnered with IBM and other leading firms to enhance its proposal for the FAA project [16][22] Golden Dome Initiative - The Golden Dome initiative has bipartisan support and is crucial for national defense, with $25 billion allocated for its development [26][27] - Parsons aims to leverage its existing $2.26 billion contract to participate in the integration efforts for Golden Dome [27][28] Infrastructure Business Growth - Parsons' infrastructure business has shown consistent growth, with over 10% margins and a strong book-to-bill ratio [47][48] - The company is involved in major projects in both North America and the Middle East, including significant contracts in Saudi Arabia and the U.S. [48][49] Capital Deployment and Acquisitions - Parsons has acquired 16 companies since 2017, with three acquisitions in the current year, focusing on enhancing capabilities in critical areas like water resiliency and cyber warfare [56][57] - The company maintains a disciplined approach to acquisitions, targeting firms with at least 10% organic revenue growth and a 10% EBITDA margin [59] Water and PFAS Market Potential - Water and environmental services constitute 15% of Parsons' total revenue, with water being the fastest-growing segment [65] - The PFAS market is estimated at $220 billion, with $40 billion addressable for Parsons, driven by innovative remediation technologies [66] Margin Outlook - Federal solutions margins are expected to stabilize in the high eights to low nines, with potential for improvement through product opportunities and acquisitions [32][35] Additional Insights - Parsons emphasizes its unique position in system integration and program management, which differentiates it from competitors in high-stakes projects [25][22] - The company is focused on maintaining strong relationships with acquired firms to enhance operational capabilities and mission impact [60][61] This summary encapsulates the key insights and projections discussed during the Parsons conference call, highlighting the company's strategic positioning and growth opportunities within the aerospace and defense sector.

Core Points - Parsons Corporation will participate in a fireside chat at the Goldman Sachs Industrials and Materials Conference on December 3, 2025 [1] - The session will feature Carey Smith, chair, president, and CEO, and Matt Ofilos, CFO [1] - The presentation will be available live via webcast and can be accessed on the investor relations section of Parsons' website [2] Company Overview - Parsons Corporation is a leading provider of disruptive technology in national security and global infrastructure markets [3] - The company has capabilities in various sectors including cyber and electronic warfare, space and missile defense, transportation, water and environment, urban development, and critical infrastructure protection [3]

Core Insights - Q3 2025 saw strong market gains, providing opportunities for active managers to excel by leveraging the market's rally and effectively navigating Federal Reserve policy changes [2][3] - The PSN Top Guns list highlights top-performing separate accounts, managed accounts, and managed ETF strategies, showcasing the value of active management in separately managed accounts (SMAs) [1][2] Market Performance - Strong equity performance was driven by demand for artificial intelligence and technology, anticipated interest rate cuts, and solid corporate earnings [3] - Investors showed resilience amid policy uncertainties, trade tensions, persistent inflation, and elevated valuations [3] PSN Top Guns List - The PSN Top Guns list for Q3 2025 includes notable strategies such as: - White Pine Capital, LLC.: Small Cap (+25.7% for the quarter) - RBC Global Asset Management: RBC China Equity (+31.9% for the quarter) - Fisher Investments: China A-Share Equity (+27.6% for the quarter) [6] PSN Database and Features - The PSN SMA database comprises over 2,800 firms, 285 universes, and more than 21,000 products, providing detailed asset breakdowns and compliance information [2][8] - PSN's historical database offers over 40 years of data, including net and gross-of-fee returns, enhancing its value for asset managers [2][8] New Initiatives - Zephyr launched the "Inside SMAs" podcast to discuss SMA strategies, market trends, and industry insights, aiming to engage thought leaders in the field [5][10] - The PSN Manager Advantage program was introduced to enhance visibility and branding for PSN contributors through digital coverage and market intelligence [4]

Core Insights - Parsons Corporation has been awarded a position on the $15 billion Pacific Deterrence Initiative Multiple Award Construction Contract (PDI MACC) by the Naval Facilities Engineering Systems Command (NAVFAC) [1][2] - The contract includes a 5-year base period with three one-year option periods and aims to enhance deterrence capabilities and regional security in the Indo-Pacific region [1][3] - Parsons will compete for task orders to provide design and engineering services for projects exceeding $100 million, including various critical infrastructure developments [2][3] Company Performance - Parsons has been recognized as the number one Program Management Firm by Engineering News-Record and has secured over $400 million in INDOPACOM-related contracts since 2019 [4] - The company leverages its expertise in program and construction management, engineering, and national security solutions to deliver integrated solutions across the national security and critical infrastructure sectors [4][5] Strategic Importance - The PDI MACC will facilitate faster execution of critical infrastructure projects in strategic locations such as Australia and the Philippines, enhancing regional resilience and support for U.S. forces [3][4] - The contract underscores Parsons' integrated portfolio and its capability to provide comprehensive solutions in national security and critical infrastructure protection [5]

Core Insights - Parsons Corporation has been awarded a contract to modernize the U.S. Coast Guard's Biometrics at Sea System (BASS 2.0), which is essential for maritime law enforcement operations [1][2] - The contract has a five-year performance period and signifies new work for Parsons, enhancing its role in national security [1][2] Company Overview - Parsons is recognized as a leading provider of disruptive technology in national security and global infrastructure markets, with expertise in various sectors including cyber warfare, space defense, and critical infrastructure protection [5] - The company has delivered over 3,500 mobile biometrics solutions to various federal customers, including the Department of Defense and law enforcement agencies [4] Contract Details - Under the new contract, Parsons will provide personnel for strategic planning and technical support for the BASS platform, including the JavelinXL devices and Ares Gateway [2][3] - The JavelinXL devices are rugged, Android-based handhelds capable of multi-modal biometric capture, enhancing real-time data collection and threat detection [3] Technological Capabilities - The JavelinXL kits and Ares Gateway will enable the Coast Guard to collect and analyze biometric data more efficiently, improving identity verification and threat detection during missions [3] - These devices are designed for use in dynamic maritime environments, providing lightweight and modular solutions for biometric data integration [3]

Financial Data and Key Metrics Changes - In Q3 2025, the company achieved a total revenue growth of 14% and an organic revenue growth of 9%, excluding the impact from a confidential contract [5][17] - Adjusted EBITDA margin expanded by 60 basis points to 9.8%, driven by improved program performance and accretive acquisitions [18][24] - The company generated $163 million in cash flow from operations, resulting in a free cash flow conversion of 135% for the quarter [20][24] Business Line Data and Key Metrics Changes - Critical Infrastructure revenue increased by 18% year-over-year, with organic growth of 13%, driven by recent contract wins and growth on existing contracts [19] - Federal Solutions revenue increased by 9% year-over-year, with organic growth of 5%, excluding the confidential contract [19] - Adjusted EBITDA for Critical Infrastructure increased by 83% year-over-year, with an adjusted EBITDA margin of 10.3% [19] Market Data and Key Metrics Changes - The company reported a book-to-bill ratio of 1.0 times for the quarter and trailing twelve months, maintaining a streak since its IPO [6][21] - The total backlog at the end of Q3 was nearly $9 billion, with 72% funded, and a funded backlog of $6.4 billion, the highest since the IPO [16][22] - The company has a $58 billion pipeline, including over 115 opportunities worth $100 million or more [16][42] Company Strategy and Development Direction - The company is focused on capitalizing on long-term macro trends in national security and infrastructure, with a strong emphasis on operationally relevant solutions [4][12] - Recent acquisitions, particularly in the water market, are aimed at enhancing capabilities and expanding presence in high-growth areas [11][49] - The company expects mid-single-digit organic revenue growth excluding the confidential contract for the foreseeable future [12][47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities, citing strong program execution and a robust pipeline of large opportunities [12][24] - The company anticipates a surge in activity once the government reopens, as there is a significant backlog of contracting actions [94][96] - The FAA air traffic control system contract is expected to be awarded imminently, with the company well-positioned to capitalize on this opportunity [39][90] Other Important Information - The company was recognized as one of the world's best companies by Time and received the Diamond Award from ACEC New York for its work on the Brooklyn Bridge Rehabilitation Project [12] - The company completed its third accretive acquisition of the year in the strategic water market [17] Q&A Session Summary Question: Revenue from the confidential contract in Q3 and its impact on Q4 guidance - Management confirmed that there was some revenue from the confidential contract in Q3, but it was small and immaterial, with expectations for Q4 to be similar [27] Question: Critical Infrastructure margins and future expectations - Management indicated that strong program execution has led to consistent double-digit margins in Critical Infrastructure, with expectations for continued solid performance [29][31] Question: Top line performance and federal customer capacity - Management noted that timing issues affected Q3 performance, with expectations for a recovery in Q4 as delays are resolved [35][37] Question: FAA contract and its implications - Management confirmed that the FAA air traffic control system contract is not impacted by the government shutdown and is expected to be awarded soon [39] Question: Growth outlook for Federal Solutions - Management projected high single-digit growth for Federal Solutions, with a strong pipeline and backlog supporting this outlook [76] Question: Impact of the government shutdown on operations - Management stated that 50% of the business is not federal government-related, and a surge in activity is expected once the government reopens [94][96]

Core Viewpoint - Parsons (PSN) reported quarterly earnings of $0.86 per share, exceeding the Zacks Consensus Estimate of $0.72 per share, but down from $0.95 per share a year ago, indicating an earnings surprise of +19.44% [1][2] Financial Performance - The company posted revenues of $1.62 billion for the quarter ended September 2025, missing the Zacks Consensus Estimate by 3.03% and down from $1.81 billion year-over-year [2] - Over the last four quarters, Parsons has surpassed consensus EPS estimates three times but has not beaten revenue estimates [2] Stock Performance - Parsons shares have declined approximately 13.8% year-to-date, contrasting with the S&P 500's gain of 15.1% [3] - The current Zacks Rank for Parsons is 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.91 on revenues of $1.79 billion, and for the current fiscal year, it is $3.20 on revenues of $6.6 billion [7] - The outlook for the Technology Services industry, where Parsons operates, is currently in the top 39% of Zacks industries, suggesting potential for better performance compared to lower-ranked industries [8]

Q3 2025 Financial Performance - Total revenue reached $1622 million, reflecting a 14% increase excluding the confidential contract [8, 12] - Organic revenue growth, excluding the confidential contract, was 9% [7, 15] - Adjusted EBITDA margin expanded by 60 basis points to 98% [7, 13] - Cash flow from operations amounted to $163 million, with a free cash flow conversion of 135% [7, 8] - The book-to-bill ratio was 10x, maintaining a trailing 12-month ratio of 10x or greater since the IPO [7, 8] Segment Performance - Critical Infrastructure revenue increased by 18% to $833 million, with adjusted EBITDA margin expanding by 360 basis points to 103% [17] - Federal Solutions revenue decreased by 29% to $789 million, with adjusted EBITDA margin decreasing by 170 basis points to 92% [19] Contract Wins and Backlog - The company secured four contract wins exceeding $100 million in Q3 2025 [10] - Backlog increased by $48 million to $88 billion, with 72% being funded [10] - The company has approximately $11 billion worth of contract wins not yet included in the backlog [10] Fiscal Year 2025 Guidance - The company is modifying its FY25 revenue outlook to $64 billion - $65 billion, representing a -4% growth and -8% organically, but reiterating adjusted EBITDA guidance of $600 million - $630 million and cash flow guidance at the mid-point [7, 36]