Parsons Corp Q2 2025 Earnings Call Transcript

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

Question: Tobey Summer - Truist - Analyst : Thank you. Good morning. I wanted to ask about the opportunities in front of the company sort of over the near to medium term with respect to Golden Dome and the very large FAA procurement. Could you just discuss how you're pursuing those? And I know that we've heard that the FAA procurement is sort of fluid, they're soliciting a lot of advice, and it's not yet determined kind of how that path will proceed, but is there sort of an optimal way that, that could proceed from your perspective?

Question: Tobey Summer - Truist - Analyst : Thanks. If I could ask a follow-up. What's your expectation for the calendar 3Q which is seasonally the industry's strongest from a book-to-bill perspective. And this year, we've seen obligation action sort of lagging pretty significantly. Do you expect a bigger-than-normal seasonal catch-up for the industry and yourselves?

Question: Tobey Summer - Truist - Analyst : Thank you.

Question: Andrew Whitman - Baird - Analyst : Great. Good morning and thank you for taking my questions. I guess, Carey, I thought I would just check in here and get your comments on how the One Big Beautiful Bill, which obviously, you've articulated the aspects on the federal side. Can you talk about how it might impact your infrastructure side, particularly as it relates to the state and local budgets that are out there and how they might be affected if you're hearing anything from your customers on that side of the house of how the bill might impact them. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2025 / 12:00PM, PSN.N - Q2 2025 Parsons Corp Earnings Call

Question: Andrew Whitman - Baird - Analyst : Got it. Okay. And then just my follow-up for Matt, easy one here. But just the guidance increase at least here on the income statement. It looks like it's mostly the contribution of the incremental acquisition that you did in the quarter. It looks like the income statement for the company for the quarter was mostly in line. Is that the correct way of thinking about the guidance increase or is there some other nuance there that we should be aware of?

Question: Andrew Whitman - Baird - Analyst : Thank you very much.

Question: Sheila Kahyaoglu - Jefferies LLC - Analyst : Good morning, guys. Thanks so much and thanks for mentioning Armenia in the script. I don't think I've heard that before. So I appreciate that. Maybe if we could just talk about the organic growth outlook a little bit more, Carey. How do you think about the puts and takes? It seems like we're down 1 point to 6% organic, given CTI contribution? How do we think about the second half contributors playing into that and the ramp-up?

Question: Sheila Kahyaoglu - Jefferies LLC - Analyst : What changed to cut the core by 1 point since your last update? And then my second question, if I can squeeze that into just on CI, the performance has been quite stellar 10.4% margins year-to-date. Just any update on the programs that previously faced supply chain challenges.

Question: Sheila Kahyaoglu - Jefferies LLC - Analyst : Awesome. Thank you.

Question: Noah Poponak - Goldman Sachs Group Inc - Analyst : Hey, good morning, everyone. Matt, what's the second half Federal Solutions organic ex confidential that's now in the guidance? Because just looking at the slide you have that shows that confidential was still just over $100 million in the second quarter. If I take that out sequentially, it looks like a bit of a lift to overcome that sequentially unless seasonality is in your favor or there's an acceleration kind of everywhere else? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2025 / 12:00PM, PSN.N - Q2 2025 Parsons Corp Earnings Call

Question: Noah Poponak - Goldman Sachs Group Inc - Analyst : Yes, Carey, I guess, you've cited a number of specifics for the basis for that. But from a top-down perspective, I guess, how much risk is there just in the slower contracting environment that we're in to assume double the growth rate in that business in the back half versus the first half?

Question: Noah Poponak - Goldman Sachs Group Inc - Analyst : Okay. And it sounds like you're saying you're able to say right now that July -- I mean, it's one month, but July at least, is tracking to that directional plan.

Question: Noah Poponak - Goldman Sachs Group Inc - Analyst : Okay. Great. Just last one for me. The Federal Solutions margin has come down. How much was confidential helping that margin? And maybe you can just -- was there anything abnormal in the quarter or where does that go in the back half from here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2025 / 12:00PM, PSN.N - Q2 2025 Parsons Corp Earnings Call

Question: Noah Poponak - Goldman Sachs Group Inc - Analyst : Okay, thanks so much.

Question: Samantha Steyer - Bank of America - Analyst : Hi. Good morning. This is Samantha Steyer on from Mariana. Sticking with the FS margin, you highlighted strategic personnel hires. So with that, how has the hiring environment been? And then how -- what is your ability to move people within the company around to these kind of high priority areas?

Question: Samantha Steyer - Bank of America - Analyst : Great. Thank you. I'll keep it at one. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2025 / 12:00PM, PSN.N - Q2 2025 Parsons Corp Earnings Call

Question: Gautam Khanna - Cowen and Company LLC - Analyst : Yes. Thanks. Good morning.

Question: Gautam Khanna - Cowen and Company LLC - Analyst : I was wondering if you could elaborate on the unbooked backlog, if you will, I think it changed by $1 billion in the quarter. Maybe you touched on it and I missed it, but $12 billion worth of money...

Question: Gautam Khanna - Cowen and Company LLC - Analyst : Okay. And maybe -- did you guys comment on what your outstanding bids are as of the end of the quarter?

Question: Gautam Khanna - Cowen and Company LLC - Analyst : Okay. And is there any risk of the second -- you mentioned you've booked a lot of the stuff already that gives you confidence in the second half ramp. But is there any sort of change in the funding environment, the funded backlog that you're seeing that raises any risk to that outlook or does that look well aligned at this point?

Question: Gautam Khanna - Cowen and Company LLC - Analyst : Terrific. Thank you.

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Carry, Matt and Dave, good morning.

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Carey, you discussed the strong second half growth for -- I think, 7 large US infrastructure programs. For these programs, will the revenue trajectory take the shape of a bell curve? And does that peak funding for these programs should it resemble general peak funding for IIJA. I think you mentioned that there should be funding that should increase for IIJA through 2028. And so is that how we should assume the revenue trajectory for these programs?

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Okay. I guess as a whole for these programs, would there be difficult comps in 2028 or 2027 for the ones that are front-end loaded or how should we think about them collectively?

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Great, Carey. And for the confidential contract, was there any breakup fee or should we assume 0 in revenue in the third quarter or how should we think about that?

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Okay. Thanks. And is it possible, Matt, could you provide the quarterly for the confidential contract for the third quarter and fourth quarter of last year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2025 / 12:00PM, PSN.N - Q2 2025 Parsons Corp Earnings Call

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Great. And one final one. Earlier this week, Carey and Matt, you announced a satellite communications partnership with Globalstar to bring services to Europe, and what does that partnership entail? The reason I'm asking is as everybody on the call are aware, there has been significant GPS jamming attacks across Europe with the conflict. And so does your Globalstar partnership provide any types of alternative like position navigation and timing services to help alleviate those jamming attacks? Thanks.

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Excellent. So you can potentially bring into other geographies as well?

Question: Louie DiPalma - William Blair Capital Partners - Analyst : Great. Thanks, Carey, Matt and Dave. Have a great day.