Parsons* third quarter 2022 earnings press release

Parsons Reports Record First Quarter 2025 Results

Q1 2025 Financial Highlights

Chantilly, VA – April 30, 2025 Parsons Corporation (NYSE: PSN) today announced financial results for the first quarter ended March 31, 2025.

CEO Commentary

“We are pleased with our performance during Q1 as we achieved record first quarter results for total revenue, net income, earnings per share, adjusted EBITDA, adjusted EBITDA margin, and total and funded backlog are at all time highs,” said Carey Smith, chair, president, and chief executive officer. “We also delivered a $52 million year-over-year improvement in our operating cash flow, achieved our best employee retention since 2020, and we reported a 1.1x book-to-bill ratio, which was supported by a 1.4x ratio in our Critical Infrastructure segment.

Our balanced portfolio and six growing and profitable end markets are enabling us to achieve mid- to high- single-digit organic growth across our portfolio excluding our confidential contract. In Critical Infrastructure, we are capitalizing on unprecedented global infrastructure spending and leveraging our strong position and reputation in the North America and Middle East markets. 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. As a result of these tailwinds and the confidence I have in our team’s ability to continue to deliver strong financial results, I am extremely excited about our bright future and our ability to continue to drive long-term shareholder value.”

First Quarter 2025 Results

Year-over-Year Comparisons (Q1 2025 vs. Q1 2024)

Total revenue for the first quarter of 2025 increased by $19 million, or 1%, to $1.6 billion and was down 2% on an organic basis. Excluding the company's confidential contract, total revenue growth was 11% and organic revenue growth was 7% driven by double-digit growth in Parsons' cyber, transportation, and environmental remediation markets. Operating income increased 7% to $109 million primarily due to stronger program performance and a decrease in incentive compensation. Net income increased 67% to $66 million due the factors that impacted operating income and the convertible debt repurchase loss recorded in Q1 2024. GAAP diluted earnings per share (EPS) attributable to Parsons was $0.60 in the first quarter of 2025, compared to $0.37 in the prior year period.

Adjusted EBITDA including noncontrolling interests for the first quarter of 2025 was $149 million, a 5% increase over the prior year period. Adjusted EBITDA margin expanded 40 basis points to 9.6% in the first quarter of 2025, compared to 9.2% in the first quarter of 2024. The adjusted EBITDA increase was driven by accretive acquisitions and improved program performance, partially offset by shift in contract mix. Adjusted EPS was $0.78 in the first quarter of 2025, compared to $0.70 in the first quarter of 2024. The year-over-year adjusted EPS increase was driven by the adjusted EBITDA increases noted above.

Segment Results

Federal Solutions Segment

Federal Solutions Year-over-Year Comparisons (Q1 2025 vs. Q1 2024)

First quarter 2025 revenue decreased $67 million, or 7%, compared to the prior year period and 9% on an organic basis. Excluding the company's confidential contract, Federal Solutions' revenue increased 8%, and 6% on an organic basis. These increases were driven by growth on existing contracts and the ramp-up of new task order wins specifically in the cyber and intelligence markets.

First quarter 2025 Federal Solutions adjusted EBITDA including noncontrolling interests decreased by $17 million, or 18% from the first quarter of 2024, and adjusted EBITDA margin decreased 120 basis points to 9.0% driven primarily by contract mix. As anticipated the company's guidance, strong growth on strategic cost type programs will impact Federal margins in 2025 while the business continues to execute well.

Critical Infrastructure Segment

Critical Infrastructure Year-over-Year Comparisons (Q1 2025 vs. Q1 2024)

First quarter 2025 Critical Infrastructure revenue increased $86 million, or 14%, from the first quarter of 2024. This increase was driven by organic growth of 8% and inorganic revenue contributions from the company's BCC and TRS acquisitions. Organic growth was primarily driven by the ramp-up of recent contract wins in Parsons' North America business unit. The company's Middle East business also grew but was impacted by the timing of holidays and new business ramp. Large long-term contracts and recent wins in the Middle East are expected to drive additional growth in the second quarter of 2025 and continue for several years.

First quarter 2025 adjusted EBITDA including noncontrolling interests increased by $25 million, or 51%, compared to the prior year period. Adjusted EBITDA margin increased 260 basis points to 10.3% from 7.7% in the prior year period. These increases were driven primarily by the ramp-up of new programs, accretive acquisitions, and stronger program performance.

First Quarter 2025 Key Performance Indicators

Significant Contract Wins

Parsons continues to win new business across both segments and all six end markets. During the first quarter of 2025, the company won four single-award contracts worth more than $100 million each. After the first quarter of 2025 ended, the company won an additional contract worth more than $100 million.

Additional Corporate Highlights

Parsons continues its 80-year history of cultivating a responsible enterprise. During the quarter, the company was named one of the World’s Most Ethical Companies by Ethisphere for the 16th consecutive year.

Fiscal Year 2025 Guidance

The company is reiterating its fiscal year 2025 revenue, adjusted EBITDA, and cash flow from operations guidance ranges. The table below summarizes the company’s fiscal year 2025 guidance.

Net income guidance is not presented as the company believes volatility associated with interest, taxes, depreciation, amortization and other matters affecting net income, including but not limited to one-time and nonrecurring events and impact of M&A, will preclude the company from providing accurate net income guidance for fiscal year 2025.

Conference Call Information

Parsons will host a conference call today, April 30, 2025, at 8:00 a.m. ET to discuss the financial results for its first quarter 2025.

Access to a webcast of the live conference call can be obtained through the Investor Relations section of the company's website (https://investors.parsons.com). Those parties interested in participating via telephone may register on the Investor Relations website or by clicking here.

A replay will be available on the company's website approximately two hours after the conference call and continuing for one year.

About Parsons Corporation

Parsons (NYSE: PSN) is a leading disruptive technology provider in the national security and global infrastructure markets, with capabilities across cyber and intelligence, space and missile defense, transportation, environmental remediation, urban development, and critical infrastructure protection. Please visit Parsons.com and follow us on LinkedIn and Facebook to learn how we’re making an impact.

Forward-Looking Statements

This Earnings Release and materials included therewith contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs, and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially

from those indicated in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in the forward-looking statements, including, among others: the impact of COVID-19; any issue that compromises our relationships with the U.S. federal government or its agencies or other state, local or foreign governments or agencies; any issues that damage our professional reputation; changes in governmental priorities that shift expenditures away from agencies or programs that we support; our dependence on long-term government contracts, which are subject to the government’s budgetary approval process; the size of addressable markets and the amount of government spending on private contractors; failure by us or our employees to obtain and maintain necessary security clearances or certifications; failure to comply with numerous laws and regulations; changes in government procurement, contract or other practices or the adoption by governments of new laws, rules, regulations and programs in a manner adverse to us; the termination or nonrenewal of our government contracts, particularly our contracts with the U.S. government; our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors’ protests of major contract awards received by us; our ability to generate revenue under certain of our contracts; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; changes in estimates used in recognizing revenue; internal system or service failures and security breaches; and inherent uncertainties and potential adverse developments in legal proceedings including litigation, audits, reviews and investigations, which may result in material adverse judgments, settlements or other unfavorable outcomes. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors including under the caption “Risk Factors” in our Annual Report with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2024, on Form 10-K, filed on February 19, 2025, and our other filings with the Securities and Exchange Commission.

All forward-looking statements are based on currently available information and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statements made in this presentation that becomes untrue because of subsequent events, new information or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.

PARSONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

Weighted average number shares used to compute basic and diluted EPS

(In thousands) (Unaudited)

Net income available to shareholders used to compute diluted EPS as a result of adopting the if-converted method in connection with the Convertible Senior Notes

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PARSONS CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share information)

PARSONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

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(Unaudited)

Contract Awards

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Backlog

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Book-To-Bill Ratio1:

Non-GAAP Financial Information

The tables under "Parsons Corporation Inc. Reconciliation of Non-GAAP Measures" present Adjusted Net Income attributable to Parsons Corporation, Adjusted Earnings per Share, Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), Adjusted EBITDA, EBITDA Margin, and Adjusted EBITDA Margin, reconciled to their most directly comparable GAAP measure. These financial measures are calculated and presented on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles ("Non-GAAP Measures"). Parsons has provided these Non-GAAP Measures to adjust for, among other things, the impact of amortization expenses related to our acquisitions, costs associated with a loss or gain on the disposal or sale of property, plant and equipment, restructuring and related expenses, costs associated with mergers and acquisitions, software implementation costs, legal and settlement costs, and other costs considered non-operational in nature. These items have been Adjusted because they are not considered core to the company’s business or otherwise not considered operational or because these charges are non-cash or non-recurring. The company presents these Non-GAAP Measures because management believes that they are meaningful to understanding Parsons’s performance during the periods presented and the company’s ongoing business. Non-GAAP Measures are not prepared in accordance with GAAP and therefore are not necessarily comparable to similarly titled metrics or the financial results of other companies. These Non-GAAP Measures should be considered a supplement to, not a substitute for, or superior to, the corresponding financial measures calculated in accordance with GAAP.

1 Book-to-Bill ratio is calculated as total contract awards divided by total revenue for the period.

PARSONS CORPORATION

Non-GAAP Financial Information

Reconciliation of Net Income to Adjusted EBITDA

(in thousands)

PARSONS CORPORATION

Non-GAAP Financial Information

Computation of Adjusted EBITDA Attributable to Noncontrolling Interests

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PARSONS CORPORATION

Non-GAAP Financial Information

Reconciliation of Net Income Attributable to Parsons Corporation to Adjusted Net Income Attributable to Parsons Corporation

(in thousands, except per share information)