Parsons Corp Q4 2024 Earnings Call Summary

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

Question: Toby Sommer - Truist Securities - Analyst : Thank you. I was hoping you could give us, an update to the extent you can on the contours and developments with your confidential, customer and project. Thank you.

Question: Toby Sommer - Truist Securities - Analyst : Thanks, if I could ask a follow up, you mentioned sort of lateral impact from a choice related to a different program. What is the procurement environment like for what you're bidding on and has anything changed sort of since the quarter in the recent weeks

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

Question: Louie DiPalma - William Blair - Analyst : As it relates to the confidential contract, I know you're limited in what you can say, but you indicated that you received the $242 million and the funded option. And are you assuming that you recognize the $242 million in revenue this year and is that $242 million is that impacted by the adjacent contract such that $242 million may come in significantly lower if that adjacent contract is not resolved. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 1:00PM, PSN.N - Q4 2024 Parsons Corp Earnings Call

Question: Louie DiPalma - William Blair - Analyst : Okay, so are you saying that the unfunded portion may not be fully realized because of the adjacent contract then?

Question: Louie DiPalma - William Blair - Analyst : Okay, so like if it does get restarted then that $242 million could increase then.

Question: Louie DiPalma - William Blair - Analyst : Great, that is definitely. That definitely clarifies a lot of things. Thanks, and you mentioned Sentinel, can you discuss The role that your team's contract could play with Iron Dome in the Trump administration and pass Missile defense programs that you're involved with whether it's the proliferated warfare space architecture or other ones.

Question: Louie DiPalma - William Blair - Analyst : Thanks, Carrie, and one last one, it appears that your infrastructure business is firing on all cylinders, and you discussed the new contract wins in Saudi Arabia and you're doing really well domestically. Do you envision any impact, For your US projects as it relates to federal funding or what is the status there?

Question: Louie DiPalma - William Blair - Analyst : Awesome thanks Carrie thanks man. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 1:00PM, PSN.N - Q4 2024 Parsons Corp Earnings Call

Question: Sheila Kahyaoglu - Jefferies & Co - Analyst : Good morning guys, and thank you for the time. I know I carry lots of questions on the top line and I'm sure you're prepared for it, but I kind of wanted to, clarify a few things because I'm still confused. So, your guidance range is $7billion to $7.5 billion for 2025. It's a bit wider than normal. The bottom end suggests about 2% organic growth versus the 20% plus you've been doing over the last two years. So, for that. Confidential contract is it fair to assume your guidance. Has about $240 million of the let's say $600 million this contract is. In the guide or does it include the full amount. And what are sort of the big drivers to get to the bottom end given the growth you've seen?

Question: Sheila Kahyaoglu - Jefferies & Co - Analyst : Okay. And then maybe, On the pipeline, if we could talk about that, just how we think about, it seems like you've called up $12 billion imported contracts that have not yet been booked in backlog, and this is a pretty good lead indicator to your organic growth, but it's down from $13 billion over the last few quarters. But yet the contract awards were quite strong, up 34% year over year. So can you walk through the moving pieces there, please?

Question: Sheila Kahyaoglu - Jefferies & Co - Analyst : Okay, thank you so much.

Question: Noah Poponak - Goldman Sachs - Analyst : Hey, good morning Everyone.

Question: Noah Poponak - Goldman Sachs - Analyst : Carrie, one more for you on the classified program you've been discussing here. Is there any risk in your view that, if the, if that fifth stage does not get restarted, that the $2242 million you're citing is zero for the 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. FEBRUARY 19, 2025 / 1:00PM, PSN.N - Q4 2024 Parsons Corp Earnings Call

Question: Noah Poponak - Goldman Sachs - Analyst : Okay. And Matt, the other contract you had talked about when you were citing 5% to 15% coming into the year for re-compete with CCMS, can you just level set us on where how that has, shaken out and what's in the full year plan for that?

Question: Noah Poponak - Goldman Sachs - Analyst : Okay, great. And then on the, on this critical infrastructure margin, fully adjusted for the $29 million in the quarter, it's pretty high. In order to get to the implied margin for 2025, it can't be where it was on a fully adjusted basis in the fourth quarter for the year and especially to have 21% of the full year in the first quarter. The 1st quarter can't be anywhere near the fourth quarter on a fully adjusted basis. So man, maybe you can just talk me through how that. Happens and I know you've talked in the past about there's kind of some lingering close out, but if you can just help me better understand the moving pieces there and maybe the progression of the CI margin through the year.

Question: Noah Poponak - Goldman Sachs - Analyst : Okay. And then last one for you, Matt, if I go back to your 2023 investor day outlook, your 2025 cash flow guidance provided today actually matches the high end of your 2023 investor day cash flow, free cash flow guidance, and that's despite now adding over $2 billion of revenue and over $200 million of IBA to that '23. How can that be?

Question: Noah Poponak - Goldman Sachs - Analyst : Okay, thank. You.

Question: Mariana Perez Mora - Bank of America - Analyst : Thank you and good morning, everyone. My first question is going to be around like the new administration and how should we think about PIFAS and any like environmental remediation work, how fast that could grow and like where you including your 25 expectations. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 19, 2025 / 1:00PM, PSN.N - Q4 2024 Parsons Corp Earnings Call

Question: Mariana Perez Mora - Bank of America - Analyst : Thank you. And following on the line of like [M1A], could you please discuss how is the pipeline of opportunities, where is it like stronger, and mostly when you think about this new focus on efficiencies and incorporating commercially technologies, how do you decide what type of skills do you want to own versus skills you want to partner with?

Question: Alex Dwyer - KeyBanc Capital Markets - Analyst : Hey, good morning, thanks for taking my questions. Yeah, Alex. Hi, so it sounds like there was some award momentum that continued into the first quarter. There was a couple $100 million dollar wins, but then it also seems like, that the cadence of like procurements and new awards is a bit slower now. Do you think we should expect some softness in the book to build in the first quarter or the 2nd quarter, or do you think this. Your exposure to where the new awards is slow, do you think it's not meaningful enough to see it impact the backlog?

Question: Alex Dwyer - KeyBanc Capital Markets - Analyst : Okay, got it. Thank you. And then I just wanted to follow up on this GSA contract that you had mentioned in in the response to a question earlier. It seems like the GSA is another agency that. The Trump administration or Doge is coming after in terms of budget cuts. I was just wondering if you're seeing any impacts to this contract or do you think this one is kind of well insulated from these budget cuts that are being discussed?

Question: Alex Dwyer - KeyBanc Capital Markets - Analyst : Thank. You.