Parsons(US:PSN)2025-11-05 11:38Acquisitions - The Company acquired Chesapeake Technology International, Corp for $91.5 million, recognizing $2.2 million in acquisition-related expenses[40] - The Company acquired TRS Group, Inc. for $36.6 million, with $0.5 million recognized in acquisition-related expenses[44] - The Company acquired BCC Engineering, LLC for $233.5 million, with $4.2 million in acquisition-related expenses recognized[50] - The acquisition of BlackSignal Technologies, LLC was completed for $203.7 million, enhancing the company's capabilities in cyber warfare and electronic warfare[55] - The Company has entered into a merger agreement to acquire Applied Sciences Consulting, Inc. for approximately $28 million, which is not material to the consolidated financial statements[173] Revenue - Revenue generated by CTI for the three and nine months ended September 30, 2025, was $19.2 million[42] - Revenue generated by TRS for the three and nine months ended September 30, 2025, was $7.6 million and $19.0 million, respectively[47] - Revenue generated by BCC was $32.5 million and $95.9 million for the three and nine months ended September 30, 2025, respectively[52] - Pro forma revenue for the three months ended September 30, 2025, assuming CTI acquisition was $1,621,748 thousand[43] - Pro forma revenue for the three months ended September 30, 2025 was $1,621,748 thousand, compared to $1,836,915 thousand for the same period in 2024, reflecting a decrease of approximately 11.7%[54] - Revenue for Q3 2025 was $1,621,748, a decrease from $1,810,116 in Q3 2024, with North America contributing $1,313,775 and the Middle East $302,886[169] - Total revenue for the three months ended September 30, 2025, was $1,621,748, a decrease of 10.4% compared to $1,810,116 for the same period in 2024[172] - Federal Solutions segment generated revenue of $788,607 in Q3 2025, while the Critical Infrastructure segment contributed $833,141[166] - Defense and Intelligence segment revenue increased to $468,935 for the three months ended September 30, 2025, up from $459,318 in 2024, reflecting a growth of 1.3%[172] - Engineered Systems segment revenue decreased significantly to $319,672 for the three months ended September 30, 2025, down from $646,262 in 2024, representing a decline of 50.6%[172] - Federal Solutions revenue for the three months ended September 30, 2025, was $788,607, a decrease of 28.7% from $1,105,580 in 2024[172] Financial Performance - Pro forma net income for the nine months ended September 30, 2025, including noncontrolling interests, was $236,520 thousand[43] - The Company reported net income attributable to Parsons Corporation for Q3 2025 was $64,123, compared to $71,951 in Q3 2024[166] - The company reported net income attributable to Parsons Corporation of $180,873 for the nine months ended September 30, 2024, compared to $33,768 in the same period of 2023, indicating a significant increase[174] - Basic earnings per share (EPS) for the three months ended September 30, 2025, was $0.60, down from $0.68 in the same period of 2024[153] - Diluted EPS for the three months ended September 30, 2025, was $0.59, compared to $0.65 for the same period in 2024[153] - Basic earnings per share for the nine months ended September 30, 2024, was $1.70, up from $0.32 in the previous year[174] Assets and Liabilities - Total contract assets increased by 10.9% to $822,487 thousand as of September 30, 2025, compared to $741,504 thousand at December 31, 2024[62] - Total accounts receivable, net, increased to $1,223,904 thousand as of September 30, 2025, from $1,100,396 thousand as of December 31, 2024[65] - The company's remaining unsatisfied performance obligations (RUPO) amounted to $7.0 billion as of September 30, 2025[68] - The carrying value of goodwill increased from $2,082,680 thousand on December 31, 2024, to $2,163,469 thousand on September 30, 2025, representing a growth of 3.9%[75] - Total debt as of September 30, 2025, was $1,236,700 thousand, a slight decrease from $1,247,501 thousand on December 31, 2024[79] - The total joint venture equity for consolidated joint ventures decreased to $210,569 thousand as of September 30, 2025, from $230,314 thousand at the end of 2024[139] - The company's total liabilities for unconsolidated joint ventures remained relatively stable at $1,414,504 thousand as of September 30, 2025, compared to $1,416,880 thousand at the end of 2024[141] Expenses - The Company recognized $12.9 million in revenue during the three months ended September 30, 2025, from contract liability balances[63] - Amortization expense related to intangible assets was $3.2 million for the three months ended September 30, 2025[57] - The aggregate amortization expense for intangible assets for the nine months ended September 30, 2025, was $51.4 million, compared to $40.8 million for the same period in 2024, an increase of 25.5%[76] - Operating lease costs for the three months ended September 30, 2025, were $16,971 thousand, compared to $16,022 thousand for the same period in 2024, reflecting an increase of 5.9%[72] - Total lease costs for the nine months ended September 30, 2025, were $61,557 thousand, slightly up from $61,098 thousand in 2024, indicating a year-over-year increase of 0.75%[72] - The Company recognized interest expense of $18.9 million for the nine months ended September 30, 2025, related to the Convertible Senior Notes due 2029[100] - Total ESOP contribution expense was $18.6 million for the three months ended September 30, 2025, compared to $13.2 million for the same period in 2024[133] Cash Flow and Financing - The Company reported operating cash flows for operating leases of $49,892 thousand for the nine months ended September 30, 2025, down from $51,013 thousand in 2024, a decrease of 2.2%[73] - The Company entered into a $450 million unsecured Term Loan in June 2025, with an interest rate of 5.3% as of September 30, 2025[82] - The Company issued $800.0 million of 2.625% Convertible Senior Notes due 2029, receiving proceeds of $781.1 million net of transaction fees[93] - The Company entered into a $750 million unsecured revolving credit facility with a five-year maturity, increasing the previous facility from $650 million[109] - The interest rate on the new Credit Agreement was 5.4% as of September 30, 2025[109] - The Company incurred $1.7 million in costs related to the new Credit Agreement[109] - The net carrying value of the Convertible Senior Notes due 2029 was $787.5 million as of September 30, 2025[100] - The Company has no amounts outstanding under the Revolving Credit Facility as of September 30, 2025, with interest rates at 5.4%[280] Taxation - The effective tax rate for the three months ended September 30, 2025, was 16.4%, down from 20.8% for the same period in 2024[116] - The effective tax rate for the nine months ended September 30, 2025, was 18.7%, compared to 20.8% for the same period in 2024[117] - The Company recorded a deferred tax asset of $22.3 million related to the Capped Call Transactions costs through additional paid-in capital[103] - As of September 30, 2025, the Company's deferred tax assets were subject to a valuation allowance of $45.0 million[120] - The liability for income taxes associated with uncertain tax positions was $28.1 million as of September 30, 2025[121] Joint Ventures - Consolidated joint ventures reported revenue of $213,752 thousand for the three months ended September 30, 2025, representing a 10.6% increase from $193,461 thousand in the same period of 2024[139] - Net income for consolidated joint ventures increased to $35,629 thousand for the three months ended September 30, 2025, up 29.2% from $27,588 thousand in the prior year[139] - Unconsolidated joint ventures reported revenue of $608,305 thousand for the three months ended September 30, 2025, a 4.0% increase compared to $581,232 thousand for the same period in 2024[142] - The net income from unconsolidated joint ventures was $44,473 thousand for the three months ended September 30, 2025, significantly up from $20,740 thousand in the same period of 2024[142] - The company had net contributions of $7.5 million to unconsolidated joint ventures for the nine months ended September 30, 2025, compared to $83.7 million for the same period in 2024[142] Other - The Company believes that the ultimate resolution of certain lawsuits will not have a material adverse effect on its consolidated financial position[124] - The company limits exposure to foreign currency fluctuations through contract provisions, reducing the need for hedging foreign currency cash flows[282]