Parsons (PSN) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 results for revenue, net income, adjusted EBITDA, operating cash flow, and contract awards, with organic revenue growth exceeding 20% for the sixth consecutive quarter.

• Delivered double-digit total revenue growth in both business segments, marking the 11th consecutive quarterly record for revenue and 12th for adjusted EBITDA.

• Closed BlackSignal Technologies acquisition and announced agreement to acquire BCC Engineering, expanding cyber, electronic warfare, and infrastructure capabilities.

• Raised full-year 2024 guidance for revenue, adjusted EBITDA, and cash flow due to strong operating performance and strategic acquisitions.

• Continued strategic investments in software, integrated solutions, and accretive acquisitions to enhance defense and infrastructure capabilities.

Financial highlights

• Q3 2024 revenue reached $1.81 billion, up 28% year-over-year; organic revenue growth was 26%.

• Net income increased 52% to $72 million; adjusted EBITDA grew 31% to $167 million, with margin expanding to 9.2%.

• For the first nine months, revenue grew 27% and adjusted EBITDA increased 36%, with margin up to 9.1%.

• Operating cash flow for Q3 was $299 million, up 47% year-over-year; trailing 12-month cash flow rose 91% to $587 million.

• Contract awards increased 24% to $1.8 billion; backlog stood at $8.8 billion, providing strong revenue visibility.

Outlook and guidance

• 2024 revenue guidance raised to $6.6–$6.8 billion, representing 23% growth at midpoint; adjusted EBITDA guidance increased to $590–$620 million, with margin outlook at 9.0%.

• Operating cash flow guidance increased to $425–$465 million; free cash flow conversion expected at ~100% of adjusted net income.

• Management expects to recognize $3.9 billion of funded backlog as revenue in the next twelve months.

• Anticipates mid-single-digit or better top-line growth for 2025.

• Q4 FY24 expected to deliver low double-digit revenue growth and 10–15% adjusted EBITDA growth year-over-year.