Slides
Page 1
NOVEMBER 5, 2025 THIRD QUARTER 2025 Earnings Conference Call Presentation
Page 2
Parsons Corporation 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. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in the forward- looking statements, including, among others: the impact of COVID- 19; any issue that compromises our relationships with the U.S. federal government or its agencies or other state, local or foreign governments or agencies; any issues that damage our professional reputation; changes in governmental priorities that shift expenditures away from agencies or programs that we support; our dependence on long-term government contracts, which are subject to the government’s budgetary approval process; the size of addressable markets and the amount of government spending on private contractors; failure by us or our employees to obtain and maintain necessary security clearances or certifications; failure to comply with numerous laws and regulations; changes in government procurement, contract or other practices or the adoption by governments of new laws, rules, regulations and programs in a manner adverse to us; the termination or nonrenewal of our government contracts, particularly our contracts with the U.S. government; our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors’ protests of major contract awards received by us; our ability to generate revenue under certain of our contracts; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; changes in estimates used in recognizing revenue; internal system or service failures and security breaches; and inherent uncertainties and potential adverse developments in legal proceedings including litigation, audits, reviews and investigations, which may result in material adverse judgments, settlements or other unfavorable outcomes. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors including under the caption “Risk Factors” in our Annual Report with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2024, on Form 10-K, filed on February 19, 2025, and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statement made in this presentation that becomes untrue because of subsequent events, new information or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws. Parsons Corporation 2 FORWARD LOOKING STATEMENTS
Page 3
Parsons Corporation Q3 2025 HIGHLIGHTS ▪ Delivered double-digit revenue growth (excluding the confidential contract), significant adjusted EBITDA margin expansion, and strong free cash flow. Funded backlog at the highest level since the IPO ▪ 14% total revenue growth and 9% organic growth excluding the company’s confidential contract ▪ Adjusted EBITDA margin expands 60 basis points to 9.8% ▪ Cash flow from operations of $163M, Free Cash Flow conversion of 135% ▪ Book-to-bill ratio of 1.0x and continued streak of TTM book-to-bill ratio of 1.0x or greater in every quarter since IPO ▪ Critical Infrastructure book-to-bill >1.0x for 20 consecutive quarters ▪ After Q3, acquired Applied Sciences Consulting, expanding water expertise ▪ Modifying FY25 revenue outlook and reiterating adjusted EBITDA and cash flow guidance ranges at the mid-point 3
Page 4
Parsons Corporation 4 Q3 2025 REVENUE $1.6 Billion CASH FLOW FROM OPERATIONS $163 Million BOOK-TO-BILL RATIO 1.0x Trailing 12-months of 1.0x STRONG BALANCE SHEET ADJUSTED EBITDA $158 Million Net Debt Leverage Ratio 1.4x NET INCOME $64 Million Q3 2025 KEY HIGHLIGHTS Strong revenue growth, significant margin expansion and winning large contracts ▪ Total revenue of $1.6B and net income of $64M ▪ Total revenue growth of 14% and 9% organically, excluding confidential contract ▪ Adjusted EBITDA margin expanded 60 basis points to 9.8% Continuing to win significant contracts and positioned for growth ▪ Four contract wins over $100M in Q3 2025 ▪ Quarterly and trailing 12-month book-to-bill ratio of 1.0x ▪ Backlog increased $48M to $8.8B; 72% is funded, highest level since IPO ▪ Approximately $11B worth of contract wins that have not yet been booked into backlog ▪ $58B pipeline includes more than 115 opportunities of contracts worth $100M or more and 15 opportunities worth $500M or more Leveraging strong balance sheet to continue accretive acquisitions ▪ Net debt leverage ratio of 1.4x will enable Parsons to continue to make internal investments and accretive acquisitions to drive additional growth and margin expansion ▪ Closed strategic acquisition of Applied Sciences Consulting after the third quarter ended that enhances Parsons’ water expertise and strengthens its presence in Florida Modifying FY25 revenue outlook and reiterating adjusted EBITDA and cash flow guidance ranges at the mid-point
Page 5
Parsons Corporation 5 Q3 2025 FINANCIAL SUMMARY Q3 2025 Total Revenue ▪ Total revenue excluding the company’s confidential contract increased 14% and 9% organically ▪ Total revenue of $1,622M decreased 10% from Q3 2024 ▪ Book-to-bill ratio of 1.0x ▪ Adjusted EBITDA margin expands 60 bps to 9.8%, second-highest for Q3 ▪ Adjusted EBITDA of $158M decreased 5% from prior year period ▪ Cash flow from operations of $163 million exceeded expectations for Q3 Strong total and organic revenue growth (excluding confidential contract), adjusted EBITDA margins, and cash flow from operations exceeded our forecast 0 600 1,200 1,800 Q3 2024 Q3 2025 $1,383M $1,574M Millions $1,622M Adjusted EBITDAAdjusted EBITDA Margin 0% 5% 10% Q3 2024 Q3 2025 9.2% 9.8% Percentage 0 50 100 150 200 Q3 2024 Q3 2025 $167M $158M Millions +14% Ex-confidential $1,810M -10% -5% +60 bps
Page 6
Parsons Corporation 6 BUSINESS SEGMENT SUMMARY ▪ Q3 2025 revenue increased 18% and 13% organically from Q3 2024 ▪ Adjusted EBITDA of $86M increased 83% from prior year period ▪ Q3 2025 adjusted EBITDA margin of 10.3% increased 360 bps from prior year period ▪ Book-to-bill ratio of 1.1x Critical Infrastructure Federal Solutions ▪ Q3 2025 revenue growth of 9% and 5% on an organic basis excluding the company’s confidential contract ▪ Q3 2025 total revenue decreased 29% and 31% organically from prior year period ▪ Adjusted EBITDA margin of 9.2%; impacted by contract mix and increased investments for B&P activity on strategic pursuits and key personnel 0 500 1,000 Q3 2024 Q3 2025 $679M $741M Millions Total RevenueAdjusted EBITDA Margin +9% Ex-Confidential $1,106M $789M -29% 0% 6% 12% Q3 2024 Q3 2025 6.7% 10.3% Percent +360 bps Adjusted EBITDA Margin 0% 6% 12% Q3 2024 Q3 2025 10.9% 9.2% Percent -170 bps 0 500 1,000 Q3 2024 Q3 2025 +18% $705M $833M Millions Total Revenue
Page 7
Parsons Corporation 7 Awarded Significant Industrial Base Modernization Contract Awarded a new large ten-year single-award task order contract as exclusive sub-contractor to provide design and modernization support for the Holston Army Ammunition Plant Government-Owned Contractor-Operated Production & Modernization contract. Awarded $133M Received an additional six-year, $133 million authorization to continue serving as the lead designer for the Georgia State Route 400 Express Lanes. This project is adding new express lanes and uses state-of-the-art traffic, incident management, and digital twin systems. The company booked the full amount on this contract during the third quarter. Awarded $100M+ Awarded two new multi-year single-award defense and security contracts for two Middle Eastern government customers, including a contract valued at over $100 million. These contracts represent new work to lead the design review and project and construction management of regional national security infrastructure programs. Additionally, the company will design border security infrastructure and facilities across critical border regions. These contracts reflect Parsons’ ability to bring its comprehensive national security, critical infrastructure protection, and program management capabilities and expertise to bear on the success of its regional customer base in the Middle East. The company booked over $100 million of these contracts during the third quarter. Awarded $665M MPA Delivery Partners, a joint venture of three companies including Parsons, was awarded a $665 million, 4.5-year contract extension by the Gateway Development Commission to continue managing the successful delivery of the Hudson Tunnel Project. The project will build a new two-tube rail tunnel under the Hudson River and rehabilitate the existing 115-year old tunnel as well as nine miles of new passenger rail track between New York and New Jersey. SIGNIFICANT CONTRACT WINS
Page 8
Parsons Corporation 8 Awarded $88M; $190M+ Year-To-Date Awarded over $190 million in task order contract wins through the nine-months ended 2025, including a $88 million task order contract awarded in the third quarter under the Air Base Air Defense (ABAD) IDIQ contract vehicle. Under this task order, Parsons will provide equipment procurement and configuration, systems integration, training, technical support, and ongoing maintenance to support the European and African continent areas of responsibility for the U.S. Air Forces at Ramstein Air Base, Germany. The contract includes a one-year base period and two one-year option periods. The company booked $82 million on this contract during the third quarter. Awarded $23M Awarded three contracts in the PFAS market with a total value of $23 million during the third quarter. These strategic wins across the Federal Solutions and Critical Infrastructures businesses continue to expand the portfolio in the highly strategic and rapidly growing PFAS market. The company booked $16 million on these contracts during the third quarter. Year-to-date, the company has won nearly $70 million in PFAS contact awards and PFAS represents a $40 billion addressable market for Parsons. These wins represent revenue synergies with the company's TRS Group acquisition. Awarded $43.5B Awarded prime positions on four multiple-award IDIQ contracts by federal customers, with a combined ceiling value of $43.5 billion. SIGNIFICANT CONTRACT WINS
Page 9
Parsons Corporation 9 Acquired Applied Sciences Consulting Parsons announced and closed its acquisition of Applied Sciences Consulting, Inc., a Florida-based engineering firm that specializes in water and stormwater solutions for cities, counties, and water management districts across the state. The acquisition expands Parsons’ water expertise, strengthens its presence in Florida, and is consistent with the company’s strategy of completing accretive acquisitions with revenue growth and adjusted EBITDA margins of at least 10%. This acquisition closed after the third quarter ended. World’s Best Companies 2025 by TIME and Statista Recognized by TIME and Statista as one of the World’s Best Companies in 2025. The World’s Best Companies 2025 ranking is a comprehensive analysis conducted to identify the top-performing companies across the globe and were identified based employee satisfaction, revenue growth, and sustainability. Best-Led Companies in 2025 by Glassdoor Honored by Glassdoor as one of the Best-Led Companies in 2025, based on employee reviews and ratings from the previous year. Ranked #27, Parsons is the highest-ranked company among national security and critical infrastructure firms and the only member of its peer group to be included on the list. Diamond Award in Structural Systems by ACEC Honored with the prestigious Diamond Award in the Structural Systems category from the American Council of Engineering Companies (ACEC) of New York for the company’s work on the Brooklyn Bridge Rehabilitation Project. This award places the Brooklyn Bridge Rehabilitation among North America’s most distinguished infrastructure projects. ADDITIONAL CORPORATE HIGHLIGHTS
Page 10
Parsons Corporation Current FY25 Guidance Prior FY25 Guidance Highlights Total Revenue $6,400 - $6,500M $6,480 - $6,680M -4% growth and -8% organically; +14% growth and +9% organically excluding confidential contract Adjusted EBITDA $600 - $630M $595 - $635M +2% growth (50 bps expansion) Cash Flow from Operations $380 - $460M $400 - $440M -20% growth* 10 Top Line Drivers Bottom Line Drivers ▪ Ramp-up of recent contract wins ▪ $8.8B of total backlog (72% funded) ▪ $11B in contract wins not included in total backlog ▪ Both segments poised for increased spending ▪ Hiring and retention momentum ▪ Strong contract win rates ▪ On-contract growth ▪ Strong program execution ▪ Increasing demand for global infrastructure ▪ Improved equity in earnings ▪ Bid discipline ▪ Growth in high margin markets ▪ Growth on margin accretive contracts ▪ Accretive M&A Net income guidance is not presented as the company believes volatility associated with interest, taxes, depreciation, amortization and other matters affecting net income, including but not limited to one-time and nonrecurring events and impact of M&A, will preclude the company from providing accurate net income guidance for fiscal year 2025. *2025 free cash flow conversion is expected to be 85% of adjusted net income given timing of collections and a change in our 401-K match benefit UPDATING FISCAL YEAR 2025 GUIDANCE
Page 11
Parsons Corporation 11 ▪ ~ 51% of total revenue to be generated from Federal Solutions segment at the mid-point ▪ Adjusted EBITDA margin of ~ 9.5% at the mid-point of the revenue guidance, up 50bps from 2024 ▪ Net interest expense of ~ $45M ▪ GAAP effective tax rate of ~ 20% ▪ Net income attributable to noncontrolling interests of ~ $70M ▪ Tax effect on adjustments ~ (-$33M) for full-year ▪ Adjusted net income diluted share count of ~ 108.5M shares ▪ GAAP diluted share count of ~ 109.8M shares ▪ CapEx of ~ $70M (approximately 1% of total revenue) ▪ Equity-based compensation expenses of ~ $42M ▪ D&A expenses of ~ $115M, which includes ~ $69M of acquisition-related amortization ▪ FY25 guidance includes ~$24M of transaction and other expenses - does not include future acquisitions FISCAL YEAR 2025 GUIDANCE ASSUMPTIONS Revenue: approximately 4% sequential growth (Q3 2025 to Q4 2025) to arrive at guidance mid-point of $6,450M Adjusted EBITDA $: expect Q4 2025 to be ~ 26% of 2025’s full-year AEBITDA to arrive at guidance mid-point of $615M Operating Cash Flow: expect Q4 2025 to be ~ 26% of 2025’s full-year operating cash flow to arrive at guidance mid-point of $420M PATTERNS
Page 12
12Parsons Corporation APPENDIX: SUPPLEMENTAL MATERIALS
Page 13
13 ADJUSTED EBITDA RECONCILIATION PARSONS CORPORATION Non-GAAP Financial Information Reconciliation of Net Income to Adjusted EBITDA (in thousands) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Net income attributable to Parsons Corporation $64,123 $71,951 $185,556 $180,873 Interest expense, net 11,696 8,802 33,301 29,831 Income tax expense 16,035 22,518 53,702 58,257 Depreciation and amortization (a) 29,849 24,542 85,844 73,513 Net income attributable to noncontrolling interests 17,671 13,638 48,514 40,428 Equity-based compensation 11,568 21,251 30,190 44,554 Convertible debt repurchase loss - - - 18,355 Transaction-related costs (b) 5,074 3,770 13,910 8,958 Restructuring (c) 292 - 2,653 - Other (d) 1,829 539 2,374 3,565 Adjusted EBITDA $158,137 $167,011 $456,044 $458,334 (a) Depreciation and amortization for the three and nine months ended September 30, 2025, is $21.1 million and $60.7 million, respectively in the Federal Solutions Segment, and $8.8 million and $25.1 million, respectively in the Critical Infrastructure Segment. Depreciation and amortization for the three and nine months ended September 30, 2024, is $19.4 million and $58.7 million, respectively in the Federal Solutions Segment and $5.2 million and $14.8 million, respectively in the Critical Infrastructure Segment. (b) Reflects costs incurred in connection with acquisitions and other non-recurring transaction costs, primarily fees paid for professional services and employee retention. (c) Reflects costs associated with and related to our corporate restructuring initiatives. (d) Includes a combination of gain/loss related to sale of fixed assets, software implementation costs, and other individually insignificant items that are non-recurring in nature. Three Months Ended Nine Months Ended
Page 14
14 ADJUSTED EBITDA ATTRIBUTABLE TO NCI PARSONS CORPORATION Non-GAAP Financial Information Computation of Adjusted EBITDA Attributable to Noncontrolling Interests (in thousands) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Federal Solutions Adjusted EBITDA attributable to Parsons Corporation $72,501 $120,091 $215,105 $315,413 Federal Solutions Adjusted EBITDA attributable to noncontrolling interests 11 35 73 125 Federal Solutions Adjusted EBITDA including noncontrolling interests 72,512 120,126 215,178 315,538 Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation 67,803 33,007 192,183 101,582 Critical Infrastructure Adjusted EBITDA attributable to noncontrolling interests 17,822 13,878 48,683 41,214 Critical Infrastructure Adjusted EBITDA including noncontrolling interests 85,625 46,885 240,866 142,796 Total Adjusted EBITDA including noncontrolling interests $158,137 $167,011 $456,044 $458,334 Three Months Ended Nine Months Ended
Page 15
15 ADJUSTED NET INCOME ATTRIBUTABLE TO PARSONS PARSONS CORPORATION Non-GAAP Financial Information Reconciliation of Net Income Attributable to Parsons Corporation to Adjusted Net Income Attributable to Parsons Corporation (in thousands, except per share information) (a) Reflects costs incurred in connection with acquisitions and other non-recurring transaction costs, primarily fees paid for professional services and employee retention. (b) Reflects costs associated with and related to our corporate restructuring initiatives. (c) Includes a combination of gain/loss related to sale of fixed assets, software implementation costs, and other individually insignificant items that are non-recurring in nature. (d) Excludes dilutive effect of convertible senior notes due 2025 due to bond hedge. September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Net income attributable to Parsons Corporation $64,123 $71,951 $185,556 $180,873 Acquisition related intangible asset amortization 17,996 13,328 51,431 40,777 Equity-based compensation 11,568 21,251 30,190 44,554 Convertible debt repurchase loss - - - 18,355 Transaction-related costs (a) 5,074 3,770 13,910 8,958 Restructuring (b) 292 - 2,653 - Other (c) 1,829 539 2,374 3,565 Tax effect on adjustments (7,829) (8,016) (24,235) (29,413) Adjusted net income attributable to Parsons Corporation 93,053 102,823 261,879 267,669 Adjusted earnings per share: Weighted-average number of basic shares outstanding 106,763 106,291 106,864 106,211 Weighted-average number of diluted shares outstanding (d) 108,158 107,952 108,264 107,839 Adjusted net income attributable to Parsons Corporation per basic share $0.87 $0.97 $2.45 $2.52 Adjusted net income attributable to Parsons Corporation per diluted share $0.86 $0.95 $2.42 $2.48 Three Months Ended Nine Months Ended