Parsons at Baird Conference: Strategic Growth and Market Alignment

On Wednesday, 04 June 2025, Parsons Corp (NYSE:PSN) participated in the Baird Global Consumer, Technology & Services Conference 2025. The event provided a strategic overview of the company’s operations, highlighting both growth prospects and challenges. CEO Carrie Smith discussed adjustments to guidance due to a Department of State contract and emphasized alignment with government priorities and infrastructure growth, especially in the Middle East.

Key Takeaways

• Parsons projects 17% total and 14% organic growth, with significant opportunities in the Middle East.
• The removal of a Department of State contract led to a revision in guidance.
• The company maintains a strong position in Federal and Critical Infrastructure sectors.
• Parsons focuses on technology and M&A strategies to drive future growth.

Financial Results

• Guidance Revision:

- Parsons revised its guidance due to a Department of State contract, initially expected to last ten years, now experiencing reduced volume.

- The contract saw a decrease to 80% in Q1 and 50% in Q2, with it being zeroed out after June.

• Growth Rates:

- Overall growth is projected at 17% total and 14% organic.

- The Federal segment is expected to grow 19% total and 17% organically.

- Critical Infrastructure is projected to grow 15% total and 11% organically.

• Margins:

- Q1 margins stood at 10.1%, with expectations of a 30 basis points expansion for the year.

- A 60 basis points increase is anticipated from the Critical Infrastructure segment.

• Middle East:

- Double-digit growth is projected in the Middle East, with Saudi Arabia and Qatar over 10% and the UAE over 30%.

Operational Updates

• Federal Business:

- Parsons holds a four-decade-long position as the top contractor for the Missile Defense Agency.

- The company is involved in FAA modernization, working on the Technical Support Service Contract for 24 years.

• Critical Infrastructure:

- Parsons has secured five of its six largest projects in the last 24 months.

- The company employs a "work from anywhere" model, achieving high utilization rates.

• Middle East Expansion:

- Infrastructure development is driven by population growth in the UAE and major events in Saudi Arabia.

Future Outlook

• Federal Priorities:

- Parsons aligns with 10 of the Secretary of Defense’s 17 priority areas, including cyber and munitions modernization.

• M&A Strategy:

- The company targets firms with over 10% top-line growth and EBITDA margins, focusing on cyber and electronic warfare capabilities.

• Infrastructure Spending:

- The US infrastructure bill and Saudi Arabia’s public investment fund are expected to drive significant infrastructure spending.

Q&A Highlights

• Dodge Impact:

- Parsons remains unaffected by Dodge due to its non-consulting nature.

• FAA Modernization:

- A $12.5 billion allocation in the reconciliation bill aims to complete FAA modernization in four years.

• Tariff Impact:

- Tariffs may lower spending, but Parsons’ work is not directly impacted.

• Middle East Book-to-Bill:

- Parsons anticipates a book-to-bill ratio above one in the Middle East, with double-digit growth expected.

Readers are encouraged to refer to the full transcript for a detailed understanding of Parsons’ strategic direction and market positioning.

Full transcript - Baird Global Consumer, Technology & Services Conference 2025:

Andy Whitman, Host, Baird: Okay. Great. Alright. Come on in. Have a seat.

Some some of the good seats up front still if you need one. You’re welcome to sit wherever. I’m just saying they’re available if you want it. Thanks for joining us for the next session at Baird’s Global Consumer Technology and Service Conference. I’m Andy Whitman, together with Justin Hockey.

We cover the consulting and engineering companies, construction and engineering companies, and facility service companies. This next session here is with Parsons. We are really delighted to have them, and this is, I think, the third time that you’ve been at this conference, Carrie?

Carrie Smith, CEO, Parsons: That’s correct.

Andy Whitman, Host, Baird: Carrie Smith is the company’s CEO, And we are going to do this one as a fireside chat. I usually like to just start off with the question of why don’t you tell us who Parsons is and what you do? And I’ll launch from there with the other questions that we have for you.

Carrie Smith, CEO, Parsons: Sounds great, Andy. Happy to be back at the Bayer Conference. It’s always terrific forum. So Parsons, we have about 20,000 people. We’re located in 23 countries around the world.

We’re located in all 50 states. We report in two segments, federal, which will comprise about 52% of the company’s revenue this year and critical infrastructure, which will be about 48% of the company’s revenue this year. We have six end markets. The first one is cyber and intelligence that represents roughly 20% of the company’s revenue. One of our fastest growing areas is very exciting.

We’ve delivered over 20% growth in the last two years in the cyber market. We play predominantly in offensive. I always like to look at cyber in three layers. You have offensive, defensive and infrastructure and services. We do about 75% offensive, 25% defensive and we don’t really play in infrastructure and services.

The second market area is space and missile defense, that makes up about 10% of the company’s revenue. There we’re the number one contractor for the missile defense agency. So if you think about the system engineering and integration work that goes on there, that’s a role that we’ve held for four decades and it’s a role that’s going to be increasingly important as we look forward to the future in critical programs like Golden Dome for America. In the space area, we’re involved in space domain awareness. We’ve provided those capabilities to Department of Defense and the intel community for a couple of decades.

Then a few years ago, we were awarded the commerce mission to be able to provide a space domain awareness for civilian customers as well as international customers. We’re involved in assured position, navigation and timing. So if you lose your GPS signal, you’re still able to get location information. There we have an exclusive partnership with Globalstar where we’re providing our proprietary software defined radio capabilities. We’ve currently demonstrated the system over in Europe and we’re looking forward to demonstrating it in the Indo Pacific in the future.

We also do space ground systems. We’ve done over 170 different space ground systems. Third part of our portfolio is critical infrastructure protection that represents about 17% of the company’s revenue. There we’re focused on protecting two eighty five embassies and consulates all over the world. We’re the number one provider of electronic security systems for the Department of State.

We’re number one for the army and we’re number three for the air force. We also provide counter unmanned air systems. So particularly for groups one to three, making sure that we protect embassies and consulates against threats and we do biometrics capabilities. So if somebody is trained and properly enter an embassy or consulate, we can tell just within minutes that they’re not supposed to be there and make sure that they’re rejected. The next area is transportation sector.

That makes up about 26% of the company’s revenue. There we’ve designed and built over 10,000 miles of roads and highway across six continents all over the world. We’ve been involved in over 4,500 bridge projects. We’re a world leader in long span bridges. We’ve done over 450 rail and transit projects, over 450 airport projects, including the recent win we just announced in Saudi Arabia Two Weeks ago.

We’re really proud to be the program manager for the new King Salmon International Airport that will be handling 120,000,000 passengers per year by 2000 and represents about 12% of the company’s revenue. There we do work in mine reclamation for some of the world’s abandoned mines up in Canada, the Faroe And Giant Mine. We’re also involved in PFAS, PFAS, emerging contaminant elimination. That’s an area where we hold unique patents, specifically a capability called HOTISCO that will destroy the PFAS molecule on spite situ on spot. And we think that’s first technology of its kind.

That market is expected to be about a 40,000,000,000 addressable market for persons by 02/1932. And then the final areas are urban development market that represents about 12% of the company’s revenue. Really exciting market area that’s mostly in The Middle East. We are the number one program manager in Saudi Arabia. We’re the number one program manager in The UAE, number one program manager in Qatar.

We’re pretty much involved in every major project that’s going on in the region today, particularly in Saudi Arabia. But I’ll say we’ve seen a resurgence in The UAE too as their population has tripled within, the last five years. I just got back, in fact, from the Middle East trip, when the president went over in the delegation two weeks ago and had the opportunity to go visit all three of those countries. Yeah. That’s my quick snapshot.

Andy Whitman, Host, Baird: That’s a lot there, isn’t there? Everybody’s like, woah. That’s a great rundown. I love how you’ve got that totally committed to memory. Okay.

So I’m just gonna start with where everybody’s kind of focused. So you cut guidance, the stock went up 7%. That’s that’s the punchline. The reason you cut guidance was a one singular contract that was very large that you had. And so why don’t you talk about, if you could, this is a confidential contract, so you’re not gonna say a lot about it.

But we’re starting to get a handle between the guidance reduction and what the financial impact was. So can you talk about how big this contract was last year, what it’s done this year, and how it affected your your reduced guidance just so we can level set and understand the moving pieces and the change of your guidance first?

Carrie Smith, CEO, Parsons: Yes. I’d say this was an important contract. It was through Department of State. It was one that we competed for. There were actually 10 companies that originally bid on it.

We were deemed the only company capable of performing the mission, so we did get the mission directed sole source. The mission was originally gonna be a ten year program. We were in year three of that job this year. January 20, when the new administration came in, there was the foreign aid executive order. That paused a contract that was related to ours.

It did not stop ours, but it did cause our work to run at reduced volume. We ran about 80% volume for the first quarter. We were about 50% volume for the second quarter. Recently, there was a testimony where, the Secretary of State testified and did indicate they were going to fulfill statutory obligations but there was a little more clarity added the week after that when we received the organization chart and it did eliminate the office. So we felt that due to the uncertainty and the ability for us to be able to estimate this contract that it was best if we reset our guidance and just took this contract out.

I’d like to highlight that our performance on that contract has been rated excellent for the past three years, just an outstanding mission and we had outstanding performance on it. We won’t also as a company be affected much from a personnel perspective. We were predominantly doing program management work and providing the technology capabilities. So we just will basically reassign a handful of people. Without this contract, we’re really excited about our growth prospects because when you look at Parsons, we’re going to be growing 17% in total and 14% organic growth.

That would be 19% total growth in our federal segment, 17% organic growth. And then if you look at our critical infrastructure segment, that’s 15% total growth and 11% organic growth. And that’s really a result of the strong tailwinds that we have in both of our segments to be able to deliver double digit organic growth.

Andy Whitman, Host, Baird: Yeah. This contract took up a lot of airtime. So, this allows you to breathe free kind of in a way and just really focus on those really attractive growth rates, 17 total, 14% organic at the consolidated level. Just I wanna be clear here, Like, the office is closed. The contract has not technically been canceled.

It’s just you’re just taking it out of guidance. Do you anticipate that, like, some of this could show up still depending on what the administration wants to do? Like like, how do you think how should investors think about that?

Carrie Smith, CEO, Parsons: Yeah. So what we’ve done is after June, we’ve zeroed the contract. We have assumed that for June, we would be demobilizing, but it could trickle on. If anything that would come out after this time, we would disclose separately.

Andy Whitman, Host, Baird: Okay. That’ll be helpful to understand what’s going on then too. Okay. Alright. So where do I wanna go next?

Let’s talk about the federal business. That’s a little bit bigger party business. Think it’s at 52% now, and growing 17% organically. In there, there’s a couple of things. There’s a few topics that I wanna get to.

Wanna get Doge. I wanna get to FAA, and I wanna get to Golden Dome. So let’s let’s do those in reverse order here. Why don’t you talk about your stripes in missile defense and how applicable they will be to Golden Dome. As I understand it, I think you’ve had some recent meetings with senior level officials in the administration that are helping you understand what the plan is here.

So to the extent that you can share with us what the plan is, can you tell us about that plan and how Parsons factors into it?

Carrie Smith, CEO, Parsons: Yes. So first, I’d say we’re really excited about the Golden Dome opportunity. Again, we’ve been the missile defense agency system engineer and integration contractor for four decades. So a very strong position there. A lot of what is going to happen on Golden Dome is actually integration because a lot of integration because a lot of the systems are out there.

They just need to be put together to be able to provide coverage across The United States for unmanned air systems, cruise missiles, hypersonic missiles, all the way up to intercontinental ballistic missiles. So we would see our role as being heavily involved in system engineering and integration. In addition to those capabilities, we do provide non kinetic effects. So you think instead of a missile taking out a missile, we can use cyber and electronic warfare effects to be able to perform that capability. That really came through our purpose built federal portfolio where I’d say starting in November 2016, we pretty much only had missile defense work and then we really started to buy and organically grow our capabilities in cyber electronic warfare to be one of the elite companies within that space.

So we look forward to the prospects on that.

Andy Whitman, Host, Baird: And that was a couple of different acquisitions. It wasn’t just one acquisition that was this. Like you built up a couple of different acquisitions that all helped you in this as you were reforming the company in your vision.

Carrie Smith, CEO, Parsons: Absolutely. We had a vision basically that said we were going to provide full spectrum cyber operations and we wanted to cover as much of the electromagnetic spectrum as we could. So even our most recent acquisition that we did, Black Signal, helped us in both of those areas, cyber and electronic warfare. Okay.

Andy Whitman, Host, Baird: The FAA has been getting a lot of attention as well. While this is you could argue this is critical infrastructure side of the house, it’s actually think you report this in the federal side of the because it’s a federal agency. Gosh. There’s talk of, what, dollars 12,000,000,000 of spend to kind of redo air traffic control. Maybe for the benefit of the room, can you talk about what you’ve done for air traffic control systems historically and where your position is on that competitively?

And, that the implications that that has for this next round of investment that the government wants to make.

Carrie Smith, CEO, Parsons: Yes. And Andy, correct. There’s 12,500,000,000.0 that’s in the reconciliation bill for FAA modernization. The goal would be to complete that modernization effort within the next four years. Parsons has been responsible for the FAA infrastructure.

We’ve supported the FAA for four decades. On our current contract which is called technical support service contract, we’ve been on that contract for twenty four years. We’re pretty much at every FAA location. We do everything from permitting, site access, design, program management, construction management for anything that’s being basically installed, upgraded within those systems. So we are very excited about helping the FAA to achieve its vision.

I will say the FAA does have a plan that what they have needed is funding. And so it’s exciting to see that money moving forward within the reconciliation bill.

Andy Whitman, Host, Baird: What’s a realistic time frame for them to get going? I mean, you said you’ve they’ve got the plan. They just needed the funding. The funding could be coming everybody was saying July 4. We’ll see about that.

That’s politics and not here that we’re gonna something here that we’re going to solve. But sometimes it’s just they’ve they’ve got 12 and a half billion dollars they want to spend, but you’re human capital limited. Can can is is the time frame that they wanted to deploy that possible? And and how can does and does Parsons have enough people to help them get at that goal?

Carrie Smith, CEO, Parsons: Yes. So I would say they have a reasonable plan, and they’ve kinda outlaid the various different areas. So, like, infrastructure, here’s what needs to be done. Surveillance, here’s what needs to be done. Automation, here’s what needs to be done.

And they’ve laid it out over a four year period. So once the funding is authorized, they’re ready to go and that four year clock will start moving.

Andy Whitman, Host, Baird: Okay. Doge, I think one of the interesting questions from your last conference call was how much have you debooked because of Doge? The answer was? Zero. Yeah.

Exactly. And then there’s the kind of the addendum question to this is there’s been talk about the Department of Defense making cuts of 8% per year for a few years, actually. But then there’s this conflicting information that the the big beautiful bill is talking about a trillion dollar defense budget, which would be an increase of a hundred and $50,000,000,000 and not a decrease. Can you help us reconcile how both of those things can be true at the same time?

Carrie Smith, CEO, Parsons: Sure. So let me start with Doge. Doge had several objectives and they were really looking at consulting firms. So first, Doge and GSA looked at the top 10 consulting firms. Then they went to the next nine consulting firms.

Because Parsons is not a consulting firm, that’s why we really have not seen any impact. There was also a memo last week that secretary Hagseff issued which was about in sourcing areas such as enterprise IT consulting work, and advisory and administrative work. Again, that’s not what Parsons does. We’re a solutions provider. We’re focused on getting mission capabilities to the warfighter.

Regarding the f y twenty six budget, there’s a goal to realign to from non priorities to areas of priorities. So to basically starting with the five year defense plan in f y twenty six, take out 8% or 50,000,000,000 per year and align it to a set of 17 priorities which secretary Haig Seth has outlined. Parsons is aligned at 10 of those priority areas. So it’s things like I already talked about such as cyber, munitions modernization, Indo Pacific Region, cyber command, space command, nuclear deterrence, etcetera. So again, I’d say we’re quite excited about the budget realignment into those priority areas and I think our purpose built federal portfolio is ready to help solve some of those problems.

Couple other areas we didn’t talk about, you know, that are in the budget. I’d say munitions modernization was put in by the house at 21,000,000,000. The senate republicans came back with 23,000,000,000. Parsons is currently at Holston and Radford, and so we’re upgrading those facilities. We just received an award last week for the ammonium nitrate tank farm that’s gonna be added to Holston.

So that’s an area that we’re excited about. Another one would be border security. There’s 61,500,000,000.0 in the budget for border security. We’ve performed border security all over the world for the past two decades. Also, we’ve done work on the Mexico US border sets and other area that we believe that we’re gonna tap into.

Nuclear deterrence, it’s about 13,000,000,000 that’s in the reconciliation budget. That would be for the Sentinel ground based infrastructure. So Parsons has been engineer architect of record on Atlas, Titan, and Minuteman. So we look forward to getting involved in Sentinel as well.

Andy Whitman, Host, Baird: And that’s all missile defense stuff basically.

Carrie Smith, CEO, Parsons: Missile defense, yes, ground based infrastructure. And then I’d say the final area, 11,000,000,000 for the Indo Pacific region where we’re currently positioned on Guam, Kwaja, and we have hundreds of people in Hawaii.

Andy Whitman, Host, Baird: Yes. So basically, the takeaway I hear from that is the areas that are getting cut, you don’t do, and you’re aligned to the stuff that is getting the redirection of those funds. That’s before we even talk about the increase in the budget from $850,000,000,000 to $1,000,000,000,000

Carrie Smith, CEO, Parsons: Yes. We’re excited about the federal budget. Where do

Andy Whitman, Host, Baird: and and is there does it make sense to ask the question about where the extra hundred and 50,000,000,000 goes? Because most of what I heard from you there was probably just the 50,000,000,000 per year that’s getting realigned. Is there is it different buckets or is it all the same?

Carrie Smith, CEO, Parsons: Yes. The reconciliation budget, which is going through, which the president would like to have signed by July 4, that has the additional funds that will be spent originally. Reconciliation could be over a ten year period. They hope to have that money expended over a four year period. And then the FY ’26 is basically a reallocation 8% per year over the five year defense plan.

Andy Whitman, Host, Baird: Got it. Okay. While we’re talking about federal, guess maybe we’ll wrap up on this part of the conversation by asking about your kind of goals strategically through M and A from here. You already talked about how you purpose built this. When you came in, you brought your experience in the federal government service.

You looked at what you had, what you should have, and we’ve articulated some of that. What still don’t you have maybe is the question from here. Where would you like to go next to really kind of keep rounding out your portfolio of services?

Carrie Smith, CEO, Parsons: Yes. So when we do M and A, we look at companies growing greater than 10% top line, companies that have greater than 10% EBITDA margin. On the federal side, we’re going to continue to double down the areas I described. So how do we do end to end cyber? How do we do end to end electronic warfare?

And basically positioned to be a leader in information operations. On the critical infrastructure side, we’re also looking at M and A. In fact, our most recent deal that we closed, we’re quite excited about was BCC Engineering in Florida which enhanced our transportation engineering capabilities. We will look at specific states. So the states that we identify as tier one are California, Florida, Texas, New York, New Jersey, and Georgia.

Those are the states that are gonna receive the most funds that come through the formula funds. And so we’re kinda doubling down. It’s not enough for example just to be in Florida. We happen to be in Jacksonville and had a big presence but we really need a presence in Miami. So we’ll look there.

We’ll also look at digital transformation capabilities on that critical infrastructure side. I think Parsons is the pioneer leading digital transformation of infrastructure. How do you apply artificial intelligence to the problem? How do you apply cyber security to protect our utilities, our water companies, our transportation systems? We’re fortunate that we can vertically integrate because we have the domain knowledge on the infrastructure side, but we have cyber technology on the federal side of the house.

Andy Whitman, Host, Baird: I feel like even just technology is a great enhancement to I’m gonna switch over to critical infrastructure now. Let’s talk about the design business, the consulting engineering design business. Technology is great, and it’s gonna make your team more efficient. But I kinda feel like even just your base employee utilization rates have been a pretty important story over the last few years. Can you talk about how the growth rates that have been underpinning your critical infrastructure business have driven utilization?

How that’s changed over the last couple of years? And if you expect that to continue to improve?

Carrie Smith, CEO, Parsons: Yes. I’d say we have very strong utilization rates. We tend to run between 8090%. One thing that we do that’s unique is we move, we have the ability to work from anywhere. So you can be working up in Canada on a program in The Middle East.

You can work in North America on a program up in Canada. So it’s kind of engineered design from anywhere. We’re fortunate in the critical infrastructure side, particularly in the North America market that in the last twenty four months we’ve won five, six of our biggest projects in our company’s history. So really moving up the value chain. And we’re ranked by Engineer News record now in three categories as top three companies and punching above our weight class.

Within The Middle East, I mentioned number one program management consultant with, in all three of the major countries, Saudi Arabia, UAE, and Qatar. We get excited about The US infrastructure bill, 1,200,000,000,000.0 infrastructure investment and jobs act. That won’t peak till 2028 and it’s got about six to eight year tail after that. We’ll have the next surface transportation bill that hopefully will be passed by November of twenty twenty six. Then you look at The Middle East spend in Saudi Arabia alone, we’re anticipating 1,300,000,000,000.0 of spend from the public investment fund on infrastructure.

So a lot of global trends right now in infrastructure upgrades.

Andy Whitman, Host, Baird: Yeah. There’s a lot to unpack there. I wanna maybe go back before I go forward on some of those. One of the things you didn’t say that some of the other publicly listed firms said, they’ve got low cost engineering centers. Parsons has elected not to do that and instead to work share like you described around domestic for better engineering centers.

Why?

Carrie Smith, CEO, Parsons: For us, it’s been very effective because you can easily move work. You don’t have to move people. You don’t have to reestablish a new center. You can keep the same trained people that you’ve had. And for persons particularly in this critical infrastructure sector, people have been with the company for decades and have a lot of expertise that we want to retain.

Andy Whitman, Host, Baird: Got it.

Carrie Smith, CEO, Parsons: We set up basically practice areas. So we have like a bridge practice area. We have a roads and highway practice area. And these are really deep domain experts.

Andy Whitman, Host, Baird: Yeah. And these are teams that, again, they’ve got people all over the place that are part of the bridge team or they’re part of the whatever team. And they work when we spent our day with with your team and infrastructure, they worked really closely. It seemed like they knew each other all, like, personally in some ways, which is pretty impressive. Yeah.

So there’s one other thing I wanted to ask about that. It’s escaping me now. Okay. Maybe I’ll just move on. The Does tariff or macro uncertainty become a factor in your customers making decisions to move forward with projects?

Carrie Smith, CEO, Parsons: I would say the only area that probably tariff will affect the industry would be potentially lower spend due to tariffs. Generally because the type of work we perform, which is design and program management, we’re not personally impacted.

Andy Whitman, Host, Baird: You’re not personally impacted, but because maybe more dollars have to go to the materials, the volume of design work will have to shrink because each individual project costs a little bit more is what you’re saying. Is there any tangible signs that that’s happening yet?

Carrie Smith, CEO, Parsons: I have not seen it. And obviously with critical infrastructure, we’ve had 18 consecutive quarters greater than one o book to bill. So we’ve been running pretty well for a long time.

Andy Whitman, Host, Baird: The question that I had before just came back to me. And so I’ll ask it. When you’re work, you said that you won five of the company’s six largest infrastructure problem projects of all time here in the last, like, year or two. I I have to think that if your teams are assigned on big continuous projects like that, it’s above average margin. Is that a is that a fair assumption?

Just because the there’s just less frictional time from mobilizing teams and demobilizing teams. They just go to work every day knowing what they have to do for a long period of time. Is that right?

Carrie Smith, CEO, Parsons: I would say that’s a factor, and I would also say right now demand’s greater than supply.

Andy Whitman, Host, Baird: And are you the price for that? It seems like when you’re working for public sector customers, my experience is that most of the companies are maybe tend to be a little bit more like a price taker. But is that changing with the demand being greater than supply today?

Carrie Smith, CEO, Parsons: So I think we’re getting good margins within the infrastructure business. I would say though we don’t compete on a margin basis or a cost basis. We win or lose on technology. And that’s true by the way in both of our segments. And that’s one reason I’m proud of the fact we’re kind of focused on being an advanced solutions integrator that differentiates with technology.

Andy Whitman, Host, Baird: Yeah. This obviously brings me to the next question is that your first quarter, your March, which is usually actually seasonally in the design business, not the strongest quarter of the year, you had 10.1% margins, which is above the margins that you’re guiding for the year. So was there anything unusual about that 10.1% that we should know about that suggests that the year would be less than that?

Carrie Smith, CEO, Parsons: Yes. So we’ve always said we would get the business to double digit margin. I would say Q1 was what I would call a clean quarter. So there were no one time upticks and no one time downticks. We’ve been moving away from what we called legacy programs, which were the company used to get involved in areas like construction joint ventures.

It was a business we started exiting in 2018. So as we exit that business, you’re going to naturally see our margins progress. Last year we had 50 basis points margin expansion. This year, we will have 30 basis points margin expansion. And really you could look at that as 60 basis points coming from the Critical Infrastructure segment.

Andy Whitman, Host, Baird: Got it. I want to spend the last amount of time that we have here talking about The Middle East, probably not frankly, not enough time to talk about The Middle East. This business has been growing very rapidly. Why don’t you quantify for that quantify that for us? But really, the question I wanna get to now that this business is approaching almost half of your infrastructure segment, think it’s 40%.

Carrie Smith, CEO, Parsons: It’s about a third.

Andy Whitman, Host, Baird: Yes. A third. Okay. A third of the business. The revenue compares are presumably getting tougher.

Maybe they’re not. But against that, can this book to bill continue to be above one in The Middle East over the next twelve months based on what we’ve seen today?

Carrie Smith, CEO, Parsons: Yes, we are projecting it to be above one. We’re projecting double digit growth within The Middle East. All three countries within The Middle East, expect double digit growth. Saudi and Qatar over 10% and then The UAE over 30%. What’s been happening there if I just take The UAE for a minute?

The UAE’s population from the year 2000 went from 3,300,000. Five years later, you’re at 9,700,000. So when you triple your population, you now have to add transportation, infrastructure, additional water capabilities, utilities, etcetera. So we’re very involved in helping with that and also doing a lot of build out in Abu Dhabi for example. What we’ve seen in Saudi Arabia is a similar population trajectory.

It’s gone from 24,000,000 people in 2000 up to 33,000,000 people into 2025. More importantly, they’re gonna be on the world stage in 2029 for the Asian games, two thousand and thirty for the expo, two thousand and thirty four the World Cup. So what’s really important for Saudi Arabia is making sure they have the traffic flow, the traffic management, particularly around Riyadh, is going very smoothly for those efforts. So we’re involved in modernizing the roads. We’re also doing the traffic management program.

We also just opened the probably the biggest most beautiful metro at least I’ve ever been on, which the Riyadh metro, and had the opportunity to ride that, before the opening ceremony, just a pristine metro. We’re doing, the world’s largest entertainment city, Cadia. We’re the program manager for King Salmon Park, 5 times size Central Park. We’re in Moltenow Seda which is a resort location that’s gonna be on the left. We got a contract to convert palaces to hotels.

We’re in the tourism and entertainment industry. And I think all this to say it is amazing when you go over there. I think in terms of transportation, infrastructure, it’s some of the best in the world. It gets done the fastest in the world. It’s the most modern.

It’s being done with the most recent technology. We like that fact. We can actually bring a lot of that capability even back to North America.

Andy Whitman, Host, Baird: So the confidence behind having a greater than one book to bill in these businesses, does that come from the fact that you’re on these programs and the full scope hasn’t been released? So you’ve just got visibility that like the future scope increases are coming on these existing programs? Or do you need other projects to be, I don’t know, unveiled for lack of a better term that would contribute to the backlog?

Carrie Smith, CEO, Parsons: Yeah. I’d say it’s a combination of both. You look at The U. Not peaking until 2028, we don’t expect the Middle East region to peak until about the 2030 or 2032 time frame. So we are still indeed on the ramp up.

But every day, we’re continuing to win new projects like we just announced during the Middle East trip, the win of the King Salmon International Airport. So just making sure we continue to win, but also continue to perform on the projects we’re currently on.

Andy Whitman, Host, Baird: Great. I’m gonna leave it there. We’re out of time. Please join me in thanking Carrie for the presentation.

Carrie Smith, CEO, Parsons: Thanks, Annie.

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