Parsons (PSN) Q1 2025 earnings summary

Executive summary

• Achieved record Q1 revenue of $1.6B (up 1% YoY), net income up 67% to $66M, and adjusted EBITDA of $149M with margin at 9.6%; backlog reached an all-time high of $9.1B.

• Book-to-bill ratio was 1.1x enterprise-wide, 1.4x in Critical Infrastructure, and 0.9x in Federal Solutions.

• Five contract wins over $100M, strong win rate of 68%, and best employee retention since 2020.

• Three acquisitions (TRS Group, BCC Engineering, BlackSignal Technologies) expanded capabilities in environmental remediation, infrastructure, and cyber/electronic warfare.

• Reiterated all 2025 guidance metrics, with strong performance despite reduced volume on a key federal contract.

Financial highlights

• Q1 total revenue: $1.6B, up 1% YoY; organic revenue down 2%. Excluding confidential contract, total revenue up 11%, organic revenue up 7%.

• Net income: $66.2M (up 67% YoY); adjusted EPS: $0.78 (diluted); GAAP diluted EPS: $0.60.

• Adjusted EBITDA: $149M (+5% YoY); margin at 9.6%, a Q1 record.

• Cash used in operating activities: $12M (vs. $63M prior year); net debt leverage ratio at 1.6x.

• Backlog at $9.1B, with 69% funded, both company records; $12B in awarded but not yet booked contracts.

Outlook and guidance

• 2025 revenue guidance: $7.0B–$7.5B (7% growth at midpoint, 5% organic); adjusted EBITDA: $640M–$710M; cash flow from operations: $420M–$480M.

• Excluding confidential contract, expected total revenue growth of 18% and organic growth of 15%.

• Sequential revenue and adjusted EBITDA growth expected through Q4 2025.

• Less than 5% re-compete risk; both segments poised for increased spending.

• Pipeline of $55B, with $12B in awarded but not yet booked contracts.