Parsons reported $1.62 billion in third quarter fiscal 2025 revenue, down 10 percent year-over-year and 14 percent on an organic basis.
Excluding its confidential contract, the defense and infrastructure engineering company achieved double-digit revenue growth of 14 percent and an organic revenue increase of 9 percent, driven by growth in its critical infrastructure, transportation, urban development, and space and missile defense markets, according to an earnings release published Wednesday.
Operating income decreased by 6 percent to $108 million, reflecting lower revenue from the confidential contract and increased investments in bid and proposal activity, and strategic hiring. Net income totaled $64 million, down $8 million or 11 percent from the prior-year period.
Parsons reported an adjusted EBITDA of $158 million, a 5 percent decrease from the previous year. Despite the decline, its adjusted EBITDA margin rose 60 basis points from 9.2 percent to 9.8 percent, driven by stronger program performance and recent acquisitions. Diluted adjusted earnings per share, or EPS, was $0.86, down from $0.95 a year earlier.
The company’s total backlog rose to $8.8 billion, with 72 percent funded. According to Parsons, this represents the highest funded level since its initial public offering. Concurrently, the company revised its financial projections for fiscal year 2025, lowering the top end of its revenue outlook to a new range of $6.4 billion to $6.5 billion, down from the prior range of $6.48 billion to $6.68 billion. Despite the updated revenue forecast, the company is reiterating its guidance for both adjusted EBITDA and cash flow at the midpoint of their respective ranges.
Remarks From Parsons CEO Carey Smith
“We are pleased with our third quarter results,” said Carey Smith, chair, president and CEO of Parsons. “We delivered double-digit revenue growth, achieved 60 basis points of margin expansion, exceeded our cash flow expectation, secured defense contracts in the Administration’s priority areas, and continued to deliver outstanding results in our Critical Infrastructure segment. In addition, our win rates and hiring and retention remain strong, and we completed another accretive acquisition after the quarter ended,” added the seven-time Wash100 Award winner.
“Given our healthy forward-looking financial metrics, team’s strong execution, recent large contract wins, and the tailwinds we have in both segments, we remain optimistic that we will continue to deliver industry leading organic growth rates and drive long-term shareholder value,” Smith continued.
What Contracts Did Parsons Win During the Third Quarter?
During the period, Parsons secured contracts exceeding $100 million, including a 10-year task order for design and modernization support at the Holston Army Ammunition Plant; a six-year, $133 million contract extension to continue its role as the lead designer for Georgia’s State Route 400 Express Lanes; and two multiyear defense and security contracts for two Middle East government clients, focused on national security infrastructure and border protection.
Parsons also expanded its presence in the per- and polyfluoroalkyl substances remediation market with three contracts totaling $23 million, bringing year-to-date PFAS awards to nearly $70 million.
What Is Parsons’ Outlook on the Golden Dome Program?
During the earnings call, Smith indicated that Parsons is well-positioned to benefit from the upcoming Golden Dome missile defense program, citing its current role as the Missile Defense Agency’s systems engineering and integration contractor and its preparations for Golden Dome funding expected to commence around December. She further highlighted that Parsons’ space capabilities, including space situational awareness, ground systems and an alternative GPS navigation system, align directly with Golden Dome priorities.
