Parsons Corp at UBS Global Industrials & Transportation Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Steve Fisher - UBS - Analyst : That's great. Yes, that's hard to achieve that 20% plus over that many quarters. You mentioned 16% in the Middle East. I think that's one of the unique characteristics and focus areas for your company. And it's been very strong. Maybe you can just talk a little bit about what has contributed to that success in the Middle East for you? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 2:40PM, PSN.N - Parsons Corp at UBS Global Industrials & Transportation Conference

Question: Steve Fisher - UBS - Analyst : Yes. It's amazing to see this area develop. However, there have been certain geopolitical dynamics going on in the region for sure. How does that impact your ability to kind of work in the region, if it does at all?

Question: Steve Fisher - UBS - Analyst : Interesting. Obviously, there is -- goes along with some of the geopolitical activity is potential for rebuilding. Can you talk a little bit about whether this is something that you're even thinking about or being involved in?

Question: Steve Fisher - UBS - Analyst : Yes. Fascinating. So maybe shifting gears a little bit here to something else that's fairly topical around the federal government area with the potential change or the expected change in administration, not a lot of details yet, but curious how you're thinking about this DOGE topic and how that might potentially impact your businesses and the segments?

Question: Steve Fisher - UBS - Analyst : And do you sense that there's kind of -- maybe it's too early, but is there receptivity to input from the industry?

Question: Steve Fisher - UBS - Analyst : That's great. another general federal government topic is around the budget, and we have continuing resolution right now. So I'm just curious what your expectations are for how long this might continue? And if there's any risk in terms of your kind of guidance and framework for '24 and '25 if we have a prolonged continuing resolution?

Question: Steve Fisher - UBS - Analyst : That's great. One other question that I get a lot relates to combination to DOGE and also to continuing resolutions. So maybe now is a good time to ask it is, but the trickle down from federal government to state and local given that you do a lot of infrastructure work, is there any connection that you see out there between those and any impact at the state and local level from federal dynamics?

Question: Steve Fisher - UBS - Analyst : Okay. Terrific. So now that we're on to the Critical Infrastructure area, you've had some very good success in that business. But maybe operationally, there's been a few write-downs here and there. Maybe you can just give us a little bit of an update on some of the legacy programs that have contributed to that and kind of where you stand on those legacy programs?

Question: Steve Fisher - UBS - Analyst : Awesome. Shifting back to the growth element of it, we talked in the beginning about being able to grow 20% or more than 20% organically over the last 1 to 2 years. Maybe people always kind of look at growth rates relative to book-to-bills and maybe a little bit of a disconnect. Can you just

Question: Steve Fisher - UBS - Analyst : Okay. Got it. And you talked about contract win rate over 70%. Obviously, that's very high. Can you talk a little bit about the factors contributing to the success there? And how much of that is technical ability, the availability of labor, pricing, something else? What contributes to that high win rate?

Question: Steve Fisher - UBS - Analyst : Great. Yes, I thought it was very impressive, those major wins in Critical Infrastructure. I'm wondering if there's like a context that you can provide for how it is that those big programs kind of came about at this last -- since you started booking them. It was just out of sort of like a delayed impact from the IIJA being passed is that these were on the Board. A couple of years ago, but we had an inflation period. And so maybe they were taking a little extra time to be rethought. How is it that these such big programs have now all kind of come out at one time and then where -- how do we put them in context of what's still ahead?

Question: Steve Fisher - UBS - Analyst : Fantastic. Maybe we talk a little bit about sort of longer-term revenue growth and margin expectations. There's a way to talk about that for kind of each of your segments and then Parsons overall? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 2:40PM, PSN.N - Parsons Corp at UBS Global Industrials & Transportation Conference

Question: Steve Fisher - UBS - Analyst : Got it. Great. Can't talk about federal businesses without concept of recompete. So I think you -- and option extensions. You mentioned recently that one of your -- the customer for one of your larger contracts could exercise an option year or recompete the contract. Can you just elaborate on this contract? And how much of your revenue is up for recompete in '24 and '25?

Question: Steve Fisher - UBS - Analyst : Got it. Very helpful. Maybe shifting gears a little bit to M&A, and you've had an active M&A program since you've been a publicly traded company over the last handful of years. Maybe you can just give us an update on some of these recent acquisitions that you've done and sort of what your capital allocation priorities are from here?

Question: Steve Fisher - UBS - Analyst : Great. I think one of the points I've heard you make before about your M&A approach is that you don't include synergies in your M&A assumptions. Just curious on a look back of your experiences, do you get synergies in the end? How does that end up playing out you..

Question: Steve Fisher - UBS - Analyst : Fantastic. One maybe a specific question about a specific topical area, which is PFAS. And -- just curious how large is your PFAS-related business? And are you expecting it to start materially impacting your financial results and maybe you have timing around that?

Question: Steve Fisher - UBS - Analyst : And we often get the question as it relates to PFAS, again, change of government, any federal implications around PFAS to anticipate?

Question: Steve Fisher - UBS - Analyst : Got it. Sounds good. We talked a little bit before about some of the big infrastructure programs coming out of the IIJA and how that's evolving. I wanted to ask you about program management. I know you have a capability -- a core capability there. Is that becoming an increasingly relevant skill set? And if not, maybe it's just been around a while and kind of the same, how do you differentiate in your program management offering?

Question: Steve Fisher - UBS - Analyst : Yes, it's going to be really interesting to watch. Maybe continuing with the Critical Infrastructure area. We're talking a little bit about transportation right now. We're talking about PFAS. Can you just maybe rank some of the kind of core applications and end markets within Critical Infrastructure, be it water, transportation or anything else? Where do you see the most on a relative basis exciting opportunities?

Question: Steve Fisher - UBS - Analyst : Fantastic. I wanted to just come back to the idea of just the competitive landscape. I mean like you said, you're looking for these -- the most prestigious and kind of one of those projects, how do we think about sort of who the competitive set is that you're really kind of focused on? Is it really kind of a bifurcated approach where there's lots of infrastructure projects around the country and the world? And you've got a group of companies working on those, and then you've got sort of the premier set working on these premier projects, and you're really just kind of focusing on those. How do you see the kind of competitive land scape and -- evolving in your ability to differentiate?

Question: Steve Fisher - UBS - Analyst : Great. Maybe we'll just pause here to see if anyone has any questions. If you'd like to ask and you can use the QR code or raise your hand. I think we have a question in the back. Unidentified Participant I just wanted to ask you about with infrastructure, it seems like labor availability is always a challenge. And just is there any color that you could give us on, I suppose, mostly interested in the U.S., but just how you're managing that and particularly given that products can be complex and complicated and run over years?

Question: Steve Fisher - UBS - Analyst : Please, Troy? Unidentified Participant Carey, Matt, can you maybe just talk about your thoughts on potential portfolio actions? Obviously, companies on both sides of government services and E&C have moved towards more pure play. Just curious on whether you guys are kind of thinking the same down the line? Given your unique shareholder structure, whether that kind of prevents that from happening in the time being? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 2:40PM, PSN.N - Parsons Corp at UBS Global Industrials & Transportation Conference

Question: Steve Fisher - UBS - Analyst : Great. Well, we are right about out of time. So I really want to thank you very much, Carey, Matt, Dave, thanks for being here, and best of luck for 2025.

Question: Steve Fisher - UBS - Analyst : Yes. Thank you.