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CHANTILLY, Va. - On Wednesday, Parsons Corporation (NYSE:PSN) reported third-quarter revenue that missed analyst expectations, despite posting better-than-expected earnings.
The engineering and defense contractor’s shares plunged 9.16% in pre-market trading after the results.
The company reported third-quarter revenue of $1.62 billion, falling short of the $1.67 billion consensus estimate and representing a 10% decline YoY. Excluding a confidential contract, however, revenue grew 14% (9% on an organic basis). Adjusted earnings per share came in at $0.86, exceeding analyst expectations of $0.75. The company also reported adjusted EBITDA of $158 million, down 5% from the same period last year, though adjusted EBITDA margin improved by 60 basis points to 9.8%.
Parsons lowered its fiscal year 2025 revenue guidance to $6.4-6.5 billion from the previous $6.48-6.68 billion range, below the analyst consensus of $6.57 billion. The company maintained its adjusted EBITDA and cash flow guidance ranges at the mid-point.
"We are pleased with our third quarter results. 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," said Carey Smith, chair, president and chief executive officer.
The company’s Critical Infrastructure segment showed strong performance with revenue increasing 18% to $833 million and adjusted EBITDA surging 83% to $86 million. However, the Federal Solutions segment saw revenue decline 29% to $789 million, primarily due to lower volume on a confidential contract.
Parsons maintained a book-to-bill ratio of 1.0x on net bookings of $1.6 billion for the quarter, with total backlog increasing to $8.8 billion. The company noted that 72% of its backlog is funded, representing the highest level since its 2019 IPO.
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