Parsons reported record revenue of $1.6 billion during the first quarter of fiscal year 2025, reflecting a 1 percent year-over-year growth, and ended the quarter with a record total backlog of $9.1 billion with a book-to-bill ratio of 1.1x on net bookings of $1.8 billion.
Q1 2025 Financial Highlights
In an earnings release published Wednesday, the Chantilly, Virginia-based defense and infrastructure engineering company said Q1 net income rose 67 percent to $66 million and Q1 earnings per share jumped 61 percent to $0.60.
Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, for the first quarter was $149 million, up 5 percent from the prior-year period.
Meanwhile, adjusted EBITDA margin increased 40 basis points to 9.6 percent.
Financial Results of Business Segments
The company’s federal solutions segment reported $842.5 million in Q1 revenue, down 7 percent from the same period the previous year. Its adjusted EBITDA for the quarter dropped 18 percent to $75.6 million.
The critical infrastructure business segment posted $712 million in Q1 revenue, up 14 percent from the prior-year period, and a 51 percent rise in adjusted EBITDA driven by the ramp-up of new programs, stronger program performance and accretive acquisitions.
CEO on Contract Award Activity in Federal Solutions Segment
During Wednesday’s earnings call, Carey Smith, chairwoman, president and CEO of Parsons and a seven-time Wash100 awardee, told analysts that award activity within its federal solutions segment met the company’s expectations with a book-to-bill ratio of 0.9x.
“In this quarter, we were awarded four contracts that each exceeded $100 million, demonstrating the demand for our Federal Solutions and the national security alignment of our portfolio, three of the four wins greater than $100 million in the first quarter were in our Federal segment, and we won an additional $95 million federal contract during the quarter. And just after the quarter ended, we were awarded another new federal contract valued at greater than $100 million,” said Smith, a 2025 Wash100 awardee and chair of Executive Mosaic’s 4×24 Group 1 Leadership.
The chief executive noted that Parsons was awarded an option year worth $243 million on a General Services Administration contract covering continuing and new defense work to deliver global quick reaction capabilities that leverage advanced technology platforms across the all-domain battlespace.
“This award is part of our cyber and intelligence end market, which continues to achieve double-digit revenue growth after two years with growth of more than 20%,” Smith told analysts.
“In Federal Solutions, our portfolio is aligned with the new administration’s national security priorities as well as their desire to deliver fast, innovative and operationally relevant solutions that outpace near peer threats,” she added.
Smith on M&A Plans
In response to a question about the company’s merger and acquisition plans, the Parsons chairman said the company expects to do two to three acquisitions in 2025.
“We obviously already acquired TRS Group, so that’s one. We have a robust pipeline still both within Federal and within Critical Infrastructure. It would be great if we can do 1 acquisition in each this year. But I’d say the pipeline continues,” Smith said.
“Critical Infrastructure, probably a little more robust. Some federal companies are kind of uncertain on whether to go to market right now. Given that we do our deals preemptively though, on the federal side, these are generally companies we’ve been courting for quite a while that want to be with Parsons,” she added.