Parsons (PSN) Goldman Sachs Industrials and Materials Conference summary

Strategic positioning and market outlook

• Focused on six high-growth end markets, each with 5%-12% expected CAGR, driving sustained revenue growth above sector averages.

• Infrastructure business in North America secured its six largest contracts in history over the past 16 months, with several still ramping up.

• Middle East infrastructure comprises 15% of total revenue and about half of infrastructure revenue, with major projects expected to peak around 2030-2032.

• Federal business benefits from increased cybersecurity demand and modernization of army ammunition plants, with new large contracts ramping.

• Environmental remediation, including PFAS, is an early-stage but high-potential market, with significant addressable opportunity and expected growth through 2032.

Growth drivers and pipeline

• Pipeline stands at $55 billion, with 100 programs over $100 million, nearly double the number from 2022.

• Recent wins include a $1.2 billion GSA contract and classified federal programs, both still ramping.

• Infrastructure projects like JFK Roadway, Newark Bay Bridge, and Hawaii Rail are multi-year, high-value contracts.

• Middle East program management consulting is low-risk, time-and-materials based, with no exposure to cost or scope creep.

• U.S. infrastructure funding is secure, with 80% of federal funds yet to be deployed, supporting future growth.

Margin performance and business transformation

• Federal margins have shifted from mid-9% to mid-10% due to a mix of fixed-price contracts, expected to stabilize in high 9s to low 10s.

• Infrastructure margins are improving as legacy construction projects wind down, targeting double-digit margins over time.

• Transitioned away from high-risk construction JV roles to core design, program management, and owner's engineer services.

• Write-downs are now limited to minor adjustments, with only one legacy program remaining to be completed.

• Middle East consulting model further reduces margin risk, focusing on fee-based contracts.