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Sep 30
Parsons Q3 2025 Earnings Report
Parsons reported lower revenue and earnings compared to the prior year as it adjusted for the loss of a major confidential contract, though performance remained strong in Critical Infrastructure.
Key Takeaways
Parsons saw a 10% decline in Q3 2025 revenue primarily due to the loss of a confidential contract in Federal Solutions. However, adjusted EBITDA margin improved, and Critical Infrastructure achieved double-digit revenue and profit growth. The company maintained its adjusted EBITDA and cash flow guidance.
Revenue declined 10% YoY to $1.6 billion, mainly from a lost confidential contract.
Critical Infrastructure revenue rose 18% YoY to $833 million, driven by both organic and inorganic growth.
Adjusted EBITDA margin expanded to 9.8% despite a 5% drop in absolute EBITDA.
Total backlog rose to $8.8 billion, with funded backlog at its highest level since IPO.
Parsons
Parsons
Parsons Revenue by Segment
Revenue by Segment
Critical Infrastructure Revenue
CapyFin.comFederal Solutions Revenue
CapyFin.com Forward Guidance
Parsons revised its FY25 revenue guidance downward while reaffirming adjusted EBITDA and cash flow targets.
Positive Outlook
- Maintained adjusted EBITDA guidance range of $600M to $630M.
- Maintained operating cash flow guidance of $380M to $460M.
- Achieved highest funded backlog level since IPO.
- Strong win rates and hiring trends continue.
- Closed acquisition of Applied Sciences Consulting to expand water expertise.
Challenges Ahead
- FY25 revenue guidance lowered to $6.4B–$6.5B from previous $6.48B–$6.68B.
- Revenue decline from loss of confidential federal contract.
- Lower Q3 net income and EPS YoY.
- Cash flow from operations declined compared to prior year.
- Federal Solutions segment experienced 29% YoY revenue drop.