PARSONS CORP Q4 FY2024 earnings call

• Expressed sympathies to those affected by California wildfires and offered assistance. - 2024 was an exceptional year with record total revenue, adjusted EBITDA, and contract awards. Delivered organic revenue growth of 22% and adjusted EBITDA growth of 30% in fiscal year 2024, with adjusted EBITDA margin expanding by 50 basis points. - Strong balance sheet enables investment in high - growth areas. - Record contract awards in 2024, including 15 contracts worth over $100 million for the full year. Significant fourth quarter contract wins, such as two new three - year contracts in Saudi Arabia, a Newark AirTrain replacement program win, and options on various contracts. - Acquisitions played a key role, including BlackSignal, BCC Engineering, TRS Group, etc. - Federal portfolio aligned with new administration's priorities, and Critical Infrastructure benefits from global infrastructure spending.

For the Federal Solutions segment, fourth quarter revenue increased by $160 million or 19% from the fourth quarter of 2023, driven by organic growth of 17% and the contribution from the BlackSignal acquisition. Full - year revenue increased by $986 million or 33% from 2023, driven by organic growth of 30% and contributions from acquisitions. Adjusted EBITDA for fourth quarter Federal Solutions increased by 21% from the fourth quarter of 2023, and margin increased 20 basis points to 10%. Full - year adjusted EBITDA increased $126 million or 43% from 2023, and margin increased 80 basis points to 10.4%. For the Critical Infrastructure segment, fourth quarter revenue increased by $80 million or 12% from the fourth quarter of 2023, driven by organic growth of 9% and inorganic revenue contributions from acquisitions. Full - year revenue increased by $321 million or 13%, almost all organic. Fourth quarter adjusted EBITDA increased by 2% from the fourth quarter of 2023, with margin decreasing 60 basis points to 6.4%. Full - year adjusted EBITDA increased by $14 million or 8% from 2023, and margin decreased 30 basis points to 6.9%.

• 2025 revenue expected to be between $7.0 billion and $7.5 billion, representing ~7.5% growth at midpoint and 5% organic growth. - Adjusted EBITDA expected to be between $640 million and $710 million with a margin of 9.3% at midpoint, representing 12% growth and ~30 basis points margin expansion from 2024. - Cash flow from operating activities expected to be between $420 million and $480 million. - 2025 cash flow down year - over - year due to timing of incentive fees and 401K match change.

• Confidential program's related work being paused which impacts the scope of Parsons' mission. - Domestic budget uncertainty. - Competitive labor market. - Current estimates related to government procurements.

Q: Questions about PFAS and M&A pipeline.

A: PFAS remediation is strengthened by the acquisition of TRS Group, which has emerging PFAS remediation capability. M&A pipeline is strong, with build, buy, partner approach. Look for companies with >10% top - line growth, >10% EBITDA margin, and technology differentiation. Partner with commercial companies like MAW Telecom, Globalstar, Microsoft, etc.

Q: Questions about the confidential contract regarding when it was authorized.

A: Confidential contract option year two was exercised before January 20th (during the transition from Biden to Trump administration).

Q: Questions about the GSA contract and impacts of budget cuts.

A: GSA contract already awarded for $1.2 billion, so insulated from some budget cuts. Targeting within GSA is more around facilities - type areas and reducing footprint, with Parsons having other vehicles to move work to.