Parsons Reports Fourth Quarter and Fiscal Year 2025

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]