Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Second Quarter 2023 Parsons Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

hand Senior over Relations. Vice to today, your like Spille, Dave President now the to conference speaker I’d of Investor go ahead. Please

Dave Spille

today of that we Thank for presentation slides quarter and morning, Investor provided financial to Relations the us section XXXX note you. second website. discuss Please thank results. on our our Good joining you

and Carey and the close then session. quarter and and Matt CEO; call President Chair, and strategy an provide with On will of then question-and-answer financial corporate CFO. Matt me XXXX will Today, overview Smith, operational second will our today We a guidance. highlights, a are Carey our our discuss Ofilos, with of review results

the statements, the the events, make of uncertainties regarding and that, also company. predict. We forward-looking may difficult caution and risks, Management performance, statements that of during future future are guarantees anticipated to are you involve not performance trends, call, and such future anticipated future

Actual a We press in results not described Form may differ year earnings undertake statements XX-K filings. forward-looking Factors XXXX, other Parsons Please for our to of forward-looking ended in complete SEC These variety obligation due to refer are our and fiscal for projected disclosure. Risk forward-looking update the XX, factors. December release materially statement from those any to do statements.

GAAP you comparable We Management their financial will not also make this substitute financial that these for remind non-GAAP measures reference call. to non-GAAP are a during measures measures.

now, I’ll call And Carey. the to turn over

Carey Smith

welcome with results earnings I pleased call. morning, our Thank XXXX you, quarter. am this Dave. to Parsons and quarter second Good again very

organic and backlog. time delivered with we EBITDA, contract as awards, quarter continues total all momentum adjusted highs revenue, for total growth, record revenue Our another

all quarter, growth segments records. XX% second company achieved both million, contracts six of the business over over revenue $XXX we In and won in organic

was and contract key and retention. growing employee segments, record new hiring record Our driven improved up existing work, contracts on by winning both ramping in revenue contracts, growth

also to contributing growth for the ability half total M&A adjusted strategic QX program differentiated win our quarter, while large with addition, And EBITDA half growth that is contracts second of revenue to will our and total by of In successful note the I XX%. for enhancing adjusted growth. total revenue grew XX% first solutions. grew increased XXXX, first EBITDA the XX% and by XXXX, EBITDA increased revenue XX%. adjusted exceeded In technical

Our drive revenue our ability expansion. EBITDA growth growth faster demonstrates adjusted focus on to than strong margin our

flow markets solutions, capitalize the for right unprecedented team demand the have to the warfare, information global continue increasing national to We especially security space, cyber portfolio right high on in priority spending and and and infrastructure growth intelligence electronic as such which will near cash peer adjusted operations, which intelligence, year These EBITDA us address our and positive few a confidence discuss and factors and all artificial of in a provide revenue visibility threats. full to raise Matt minutes. with guidance,

ratio second basis. the a in This achieved XX% the an times. book-to-bill book-to-bill X.X has were increase awards. ratio we of XXth on quarter, is a by exceeded which critical These During results year-over-year contract X.X now quarter driven consecutive infrastructure’s in times enterprise

by developing capabilities, rates higher offering hiring differentiated a and Our and technology value and chain driven win workforce. retaining robust record delivering the by customer’s year-to-date bookings up moving end our missions, solutions, were prestigious on

span Aviation the important three-year to provide the $X.X ceiling and million. contract after second period large the two we Federal contracts contracts customer. quarter and for both were base segments wins contract million forward business increased the visibility this our support to outlook. more Parsons ended. value Significant during Aviation we on These their which booked six been contractor more quarter, $XXX $XXX than Administration’s to We this billion included has of look one System recompete and support work second Plan, awarded decades Investment prime exceeded the for continuing Capital financial that quarter just to

and the the next With we has of year we’ve seven our $X of span Services with to of of Jobs FAA award billion We major awarded all million. recompetes the each, four secured with Administration XX base a the new single Infrastructure these a Also of Act, FAA $X $XXX $X.X for five-year years. one for the billion Investment contract value contracts were period this from billion which win, General potential facilities-related booked additional work. approximately funding and

contains all-domain technology Defense This contract Defense contract Exercises, strategic contract under million and this space. We its new Threat of global million and company This Reduction Modeling, to capabilities, reviews, across order $XX second work Threat quarter. We Simulation partners the Support provide and battle Department won supports the $XXX threats. booked vulnerability contract IDIQ spectrum the Agency vulnerabilities and delivering Agency’s the Defense a solutions to analysis advanced on counter mitigate design in and Department task advances vehicle. the reaction and missions emerging leveraging of Assessments, and of existing that quick existing and by and assessments, the Reduction Defense broad

We We transportation as The pedestrian value designer at entire in new bridge, were York John International Kennedy enhance Authority awarded on-airport New garage, includes booked to lead and F. roadway New upgrades. contract network, a the utility new scope the the second this Port parking of Airport. infrastructure $XXX million quarter. for Jersey and single-award contract a

the on position $XX Cyber our mission. recognition with is Command excited now in consecutive national this deliver to to federal budget year authority booked awarded testing, were booked Command about which capability quarter. and importance million second to million Cyber discovery, as Parsons This of million of the win subcontractor Cyber the We a $XXX we’re We supporting the contract cyber new to customer’s States second a were customer, million advanced contract awarded and development, We critical a also provide technology solutions. analytics. $XXX $XX Command a detection and this this gaining their contract is from United security. recompete our

in greater the each, awarded new this million We the major Saudi management Arabia. million value complete to contract a of were entire project second we $XXX contract design for addition $XX quarter. the booked development and single-award in than to six a In wins

And after work Repairs, prime Maintenance, share Operations, was quarter shortly to the $XXX contract the Engineering our is million. contractor. and awarded Parsons NASA ended,

During growing quarter, cyber Critical we acquisition for closed modernization the Partners. Parsons Power and This also markets, second on in expands our rapidly acquisition grid resiliency strategic Infrastructure. of two IPKeys presence end

and recent IPKeys grid optimize execution strong especially resiliency. bring M&A to our technology market operators with utility pleased and acquisition. very a operations, to cybersecurity program, achieve enables efficiency, with Parsons experience secure to tools, Xator of our I’m

have large contracts. prime win to Our and enabled us acquisitions

and has up us create and strategic acquisitions and selective to end to approach differentiated core positions Our move markets. chain enabled the six our value

both into M&A pipeline use strong our segments, continue balance and we active growth our We and will to business. complete sheet margin drive to that have an acquisitions expansion additional across accretive

longstanding world our report April, safer, part we more ESG healthier, XXXX our and of As to ESG we’re making sustainable. released commitment in the detailing how

report, this that X and target announced our we of we by XXXX exceeded already X to XX%. part As emissions reduce Scope

a emission for target and to updated science-based near aligned we gas reductions set As published initiatives. commitment with greenhouse long-term targets result, our

employer Washington top Forbes Magazine, quarter, as Women the Journal. a The distinguished During Engineering Business were diversity organizations for and recognized we by including

we veterans. were Indexes by for In addition, our VETS recognized commitment for

companies ISS commitment, label’s among Shareholder the Services sustainability related successfully to opportunities were scores and to prime in achieving ESG Institutional our upgraded ESG As a we best peers. This status. awarded of or managing for risks result their by

the filled The comply that chemical I’m this with years, nerve the the weapon. of agent share Parsons’ MXX monumental us members XXXX Chemical destroying mission congratulate that over by personnel the sarin last agreement final on I team leading was Parsons to hundreds also and United helped the our this supported X. proud to States team many rocket the was want that Weapons Convention partner part destroyed accomplishment. country’s July to of

our critical on As incentive one legacy margin of our contract and milestone impacted driving quarter. to Relative program by two this this programs, adjusted Solutions fees for its a the XX% Federal the result of segment achievement million $XX weapons destruction was million quarter. one-time infrastructure to major quarter, chemical earned our EBITDA other $XX margin over this

on over with completion XXXX early respectively. to final are the significant late write and progress bringing XXXX While programs, downs in QX disappointing, and complete them XX% both expected dates XX% made we’ve

progress program the that XXXX, technical requirements. For important ends against in second demonstrate quarter, during we the

In In had our of EBITDA, of second extremely we organic proud talented employees. quarter, I’m total years. delivered revenue, revenue achieved second strong summary, excellent adjusted we consistently and the and an work total backlog. the awards quarter. growth, two contract the last performance have results over record They hard

book-to-bill ratio by increasing a awards reported times also by We X.X XX%. contract

accretive additional and program to execute sheet our continue to for acquisitions. balance on M&A continued leverage we Additionally, plan our to strategic

forward, As about I our excited future. look extremely bright I’m

are with all differentiated We growing. simultaneously great six are that in markets technology

a first culture, is enabling We leaders the have team management which people our experience growth of promoting of business delivering be in is us segments. organic one an results to both that strong and

With highlights. to financial Matt? over our quarter that, call I’ll turn to second the discuss Matt

Matt Ofilos

Carey. you, Thank

$X.X record the in backlog. organic adjusted revenue the indicated, was up As and basis. of on was number growth, and increased the highlighted year areas, organic total XX% total results awards, XXXX of including XX% contract billion from Carey our EBITDA, quarter Total second by of quarter period second prior for revenue, revenue an

second wins quarter, and of growth driven acquisitions contributed our was million up inorganic approximately growth the on existing of Organic by growth. the In contract $XXX contracts. ramp recent

As May end growth. second so reflected at XXXX only in quarter XXXX, acquisition June a of Xator reminder, our our are the closed organic results

XX% from Adjusted second on quarter quarter across second quarter the XX% to due growth for of XXXX. the million expenses $XXX EBITDA continued the XX% SG&A the a of revenue portfolio. of second in increased efficient of total compared XXXX were focus to

This to awards increase our the and from wins weapons acquisition. operating contributions incentive was by contract margin from chemical The programs, contract leverage. as driven basis point well X.X% or on driven volume the Xator was fees year-over-year new and Xator XXX recent improvement as primarily acquisition destruction by

and first from our million This quarter and increase discussed. $XXX I’ll increased by XXXX. XX% with revenue Department of operating million the primarily growth previously quarter XX% second $XXX where existing growth driven by Starting fees contracts Xator. now expansion growth with to driven from turn incentive of Solutions, second the Organic was State by Federal new was on segments. and organic of or

$XX driven of XXX by million quarter increased $XX increased fees primarily EBITDA to XX.X%. XX% and from and These increases second by adjusted Xator. the basis XXXX, margin points or million non-recurring adjusted from incentive Solutions EBITDA the contributions Federal were

now Moving to Infrastructure our segment. Critical

the quarter was East by driven was increased from higher driven revenue quarter XXXX. by second XX% our Middle the $X from growth Organic in and of volume of organic by growth North million Second million XX% or This acquisition. $XXX increase America. IPKeys and both

The impacted expansion or contracts. two Notwithstanding, XX% to of XXXX. points the on excluding was stronger XX million to $X Critical on the of basis see by driven Infrastructure by legacy from million Critical Infrastructure second The existing adjusted margin downs decreased was programs. by EBITDA $XX adjusted increased write X.X%. we and margin higher Adjusted two new from margin EBITDA quarter increase EBITDA legacy continue impacts core programs. with volume

Next, cash and I’ll balance metrics. sheet discuss flow

up at net the the end XXXX days period. from four days year DSO prior QX Our of was XX

During generated flow collected on of was XXXX, in year million few early of decrease which receipts, $XX timing cash the second QX. $XX quarter to prior of collections compared we driven were period. by in large a The operating the million

ramped the patterns, midpoint in programs the XXXX. Additionally, cash second increased typical of support growth capital in flow get to strong consumed working be the quarter strong as expect Consistent to seasonality us our year for guidance new was of half to to we up. the the with

in approximately annual be of with XXXX, year $XX relatively totaled spend of revenue. million continues of second plan which well quarter controlled remains consistent the our CapEx in expenditures with to Capital and the prior is period. line X%

which Our balance net the in X.X cash after we quarter the as strong IPKeys’ than with of ended debt April. remains closed $XX a acquisition, times ratio less all leverage sheet million

long-term and accretive free enable to flow to cash to make undrawn and support internal leverage, low growth. acquisitions strong investments continue capacity borrowing outlook Our us

Infrastructure. by award to XX% increased increase increase which to a and Solutions quarter. the Turning XX% highest Critical XXX% the a Year-over-year billion, Federal our company’s bookings history. driven in segment contract is our strong in The activity was in bookings for second $X.X performance

ratio Our at second book-to-bill X.X Federal Infrastructure quarter X.X healthy X.X. our X.X with at Infrastructure Solutions X.X ratio book-to-bill Solutions XX-month Critical with Critical a at and at was times X.X. On the trailing a for and basis, remains Federal times

XXXX. or $XXX X% $X.X Our at the quarter record quarter of up second from million second backlog totaled of end the the at billion

turn I’ll guidance. our to Now

and We’re results, outlook hiring record to large X contract ranges of retention market exposure, increasing for provided all of positive our recent XXXX quarter end on remainder and momentum, our wins, guidance the May second the reflect year. our

our by basis. to For revenue of revenue XXXX, total an organic million $XXX XX% increasing range growth midpoint This billion. the we’re at on billion to represents $X.XX and $X.XX XX%

increasing EBITDA our the adjusted midpoint and million represents our we’re expect to adjusted at ranges midpoint Additionally, We be of at and $XXX which the range. Margin revenue $XXX growth the XX% EBITDA between remains at X.X%. range. now adjusted EBITDA million, of

are flow We between midpoint. million, also $XXX guidance. $XXX our and representing flow expect be growth XX% operating increasing at cash now We million to cash the

expected XXX% conversion cash Free to adjusted around is remain flow of income. net

reflect visibility new and increases revenue growth the XXXX retention key guidance additional our Relations Our our connection outlined our and on are updated adjusted PowerPoint demand, X% represents with on funding the at assumptions located staffing in presentation of and midpoint higher These customer confidence in XX estimates. into programs, website. EBITDA Slide in ranges. on guidance greater today’s Other of Investor

summary, quarter growth revenue achieved financial EBITDA of Through adjusted XX% delivered first year, growth first second XX%. and half the In of of the we’ve results. we and record

ability We’re momentum, total achieve award increased retention portfolio. infrastructure in confident to our as continued and record activity a hiring new Solutions global of and XXXX spend, guidance our in Federal our strong result backlog,

I’ll to Carey. that, call With the back over turn

Carey Smith

the very the last years. Thank our you, Matt. I’m performance company two of pleased over with

leaders one of in revenue in of continue growth both We to segments. top our be the organic

revenue awards, we of all performance, three financial raising EBITDA strong Given are metrics. adjusted for and guidance our our

have we them are record continue we six with markets business of positioned All a company win well forward, unique that in is growing, with company to Looking two rates. business complimentary our a portfolio each segments. new win in end and of

a hiring that exceeding seek value-driven we’re retention combines employer, firm with culture. destination as a for an goals entrepreneurial to mission employee As and work

all and Parsons employees Our M&A our us that and companies technical customers’ to support program of dedication continues value the the Parsons Thank missions. have the joined moved differentiation chain. strengthened successful their have and to our the be up you family for

With now questions. open that, the for will we line

Operator

[Operator first with question comes of Truist from Sommer Tobey line Our the Securities. Instructions]

Tobey Sommer

you. Thank Can you me? hear

Carey Smith

Yes.

Matt Ofilos

Tobey. morning, Good

Carey Smith

Tobey. Hey,

Tobey Sommer

in I or in in morning. top you what wondering could the would explain, my that Good least sequential like and would Is quarter help there that? line Thanks. work XQ looks that at declines, that if describe the by factors implied was completed math seasonal us some guidance XQ. understand was something

Matt Ofilos

specifically, calls of some Yes. Tobey, prior so talked if we’re looking in program at QX the year, bit quadrillion, a the – so in a that peaked an last headwinds to of second we’ve that that’s bit completed about half related little specifically impact.

driven Department our seasonality also, through good and have summer been obviously the We your of East months, portion point, a of growth has the State work. some by to Middle of

of the toward now, We’ll where some little of and bit. trends. we bit go kind end, we but So uncertainty the continue hiring QX, budget seasonality little the midpoint months a adjusts obviously have summer things then pretty the trend well high down comfortable. the right And we’re we have a with

Tobey Sommer

then modeling next there And real – that as non-recurring look in you growth from the does is EBITDA we third that to a into Okay. a year? the XXXX, quarter, described headwind significant fee provide does perspective,

Carey Smith

Tobey. No, we does, don’t it believe,

we that provided at long Day. still targets on range with track our Investor We’re the

Matt Ofilos

Yes.

XXXX over the we’ve I goal federal federal, mentioned and So our from you the typically are CI in margin say, Tobey, get perspective, high CI we think before, a X%. low-Xs would Xs, as is if the to business about by businesses,

is in number. would a those fair I somewhere So ranges say,

Tobey Sommer

look significant and of having of couple cadence risk? last one for what years, like could, kind pretty Okay. recently I some recompetes if me won next retired over the does And the Thanks. recompete

Carey Smith

it’s the year, Tobey, it’s year of and rest Yes. this X%, for next for X%.

to very that fact XX all and proud the particularly seven with programs years. of we major pleased duration spanning We’re those recompetes the of four won

Tobey Sommer

much. very you Thank

Carey Smith

you. Thank

Operator

Subin from comes question next Bert Our line with of the Stifel.

Bert Subin

and results strong in morning the the on good quarter. Hey, congrats

Carey Smith

Thank you, Bert.

Matt Ofilos

Bert. Thanks

Bert Subin

EBITDA just you’re target. X%-plus the CI downs the XX%, would’ve Matt, I there XX.X%, comments imply already which in would maybe project been your adjusted to Tobey, follow-up a absent margin margin outpacing quarter, that something think to right like over CI

one-time Was the outside of the million quarter So project is something, beneficial the write-downs? had thing? you a in I just there that guess, $XX from headwind

Matt Ofilos

say, think Yes. starting I business point, would I to Bert, your we’re within executing. to core CI the is see

of then the As second Carey slipped into quarter. mentioned, we up have wrapping that of within it’s next QX, year. one kind And in will the one be middle early October program

It’s programs. we getting term. the where So of challenge core king longer executing is be – again, through it really it’s to expect business these

So CI years. over low-Xs the the and with again, targeting next of we couple feel comfortable

Carey Smith

Yes.

you to X.X for the about first to add would’ve Just year, mentioned, the CI XX.X pro we that, half for pro so of forma the were quarter margins as we an for forma. been

these fortunate, of up. close are to one is We wrapping programs very

we’re And list requirements, QX fact, some terms in had final results That’ll program, the XXXX QX in – date. In terrific of the stage complete key gives year. second quarter which demonstrating early end for this that. the of punch in technical confidence us of we in this

Bert Subin

CI, you, at high side, Got question it. a If the contracts setup. East. ton I both FS It’s a of of created look the a lot Maybe organic impressive you’ve recent won in more America the for and like a up level success, growth in Middle pretty success Carey. North in

good cleared projects? contract work writedown that the are wins I classified some How new projects. you related this cyber legacy were path pretty I guess, about, do on these and the to things hiring hiring comfortable of classified – and particularly then the both should sort to on think think risks to these we you FS, pretty the And then around the involve On projects, last a going main is of individuals? hiring, see legacy forward? front, those that

Carey Smith

first. let’s the take part last So – your

can’t but we programs end, at point, complete, as unknowns, the of this are XX% think end where progress of one unknown the the we nearing – predict On this complete. to again, XX% one guided demonstrating legacy both quarter. it’s And projects, and we the are at obviously we’ve at completion

doing the the across job board. we’ve a hiring, been On great

improved business our increased segment. have done all also of job And headcount X%. including by in We We’ve cleared retention. retention our the four a terrific net on units, year-over-year,

and HR doing all So Parsons. department people attracting have our our of keeping quality within and great been job units a of business

Bert Subin

Great. Can one being moved us how Do XXXX And to up just still a PFOS, or know the had Thanks, you’re is you that’s Carey. XXXX think update final that you. I on story? give PFAS, to Thank question. a you thinking tailwind. any be that about potential more

Carey Smith

Yes.

addressable We are PFAS, demand When about news look at with more starting market some the to the billion. and you’ve PFOS, industrial addressable out service market as manufacturing for seen billion in addressable $XX for around that, of is companies. which market particularly of see the a $XXX it’s we Parsons

in get goes involved mostly and as involved on. still investigations, the we’ll time today’s remediations we’re more in So then

are the of being over in that couple we the expect look With put as that standards government, to years. increasing place accelerate see by the we next

Bert Subin

Carey, Great. thanks, and Thank you, Matt.

Matt Ofilos

Bert. Thanks,

Carey Smith

Thanks.

Operator

question Jefferies. Sheila next from Kahyaoglu the of comes Our line with

Sheila Kahyaoglu

you Thank so Good morning guys. much.

on line, first I the So single to wanted possible. great off, like just on quarter every top metric ask

How of it right some guys you seems organic is the you you well, with the much what’s could coming doing It has getting win your guys tailwinds CI of the but talk growth great on market top thing. you XX%. from line like addressable major about also are bigger? as changing just if Are going business? So way

was in update a growth So contract much updated have how awards your to versus And if of versus – just it you new coming tied follow-up. better. I’ll guidance, hiring could then on talk about

Carey Smith

Sheila, Yes. morning. good

hitting units one inorganic up pleased value if What business So investment cylinders. change, all M&A. and we’re and I’d moved four been very probably six we’ve the and our there’s say, of we’ve a all of of done, markets all inorganic the have result chain as end on

jobs significant were end-to-end GSA us awarded. So allowed to the string that win we to able $X.X being like together billion capabilities has job

bid extremely record year-to-date. also for very we’ve what delivered company selective win and We’re XX% at rates the on we high

Addressable market, again, it’s really six back markets. to core our

missile all X% cyber and development, at XX%. to in transportation, increasing growth and remediation, that a annual urban time defense, infrastructure. of the environmental intelligence, and We’re we’re And compound fortunate rates between space critical are

up laser than year-to-date, greater have So stay programs. that have, is all bid on year and the XX $XXX chain bigger year, six – with million and that the This win deliver, pairs we the won we’ve customers do the that we full last we continue and really for to year. markets, move capabilities that win jobs XX value focused to

And is, a in We’ve wins both growth was by very hiring last as we’re business year than stronger it’s strong seen new and a it improved the was which on very So well this trajectory. year, retention’s again, good contract as across already year board. X%.

Sheila Kahyaoglu

not organic think How but six as about factor decline Got so it. in That’s and the as FAA – the up super mentioned XX maybe then really well? GSA well, on helpful. about some the QX we think half, then QX. we these organic comes contract of the win ramp and there you already, the does And as off and what up with only decline, second

Carey Smith

Yes.

we earlier, small mentioned of from couple of million, contract completions. headwind $XX a about quadrillion a Matt So have there’s and

uncertainty, positive increasing factored to FAA federal the in for government budget seasonality, side. factored comparables. half. does on in the And that do your tougher we we We point, have that’s second have particularly have

Sheila Kahyaoglu

Great, thank you.

Carey Smith

you. Thank

Operator

Our next with the TD Cai Cowen. from comes question von of Rumohr line

Cai von Rumohr

Thank you very much.

quarter. Congratulations, really. So great wow,

Carey Smith

you, Thank Cai.

Cai von Rumohr

maybe us big, were to at reset, help and be numbers fed given midpoint systems the so expect you Critical you where kind both Could at your the of Infrastructure?

Carey Smith

Yes.

and Matt, growth federal share want to organic. the so. XX% have you to expect we XX% year, total the for So And

Matt Ofilos

Yes.

for me look… let – So

Carey Smith

business federal CI. XX% and XX%

Cai von Rumohr

your the QX you’ve for been much are and year the at ask, Because X.X, and helpful. maybe every and the look quarter? over third one seems the what very like to are but XXXX. good in IT it since for That’s defense pretty bookings think Okay. so seasonally I this historicals And too sector, then is

in sectors bookings are we for what looking So third in the quarter? both

Carey Smith

So the just below point Critical be for do based rest what Infrastructure federal again, if see we’ve the quarter, spend infrastructure the slightly volume planned typically very global third continues in bookings. that strong on to of I contracts won third should a did greater out was $XXX won those that XX point million. already we’ve – NASA than in million earlier, and we’ve ROME already the That for quarter remain contract strong. year year-to-date, your We of we would the And $XXX We X.X. the announced. one

Cai von Rumohr

And adjusted of then picky raised the so you it. $X by only it’s Got you’ve Maybe flow your not cash EBITDA question, come increased significantly, how million. a more? kind but

Matt Ofilos

Yes. I we on I were half, behind, I had mentioned couple Cai. quarter. little very script we the from say, had – links collected where question, We the we’re the a I – in large think we a through would early bit that third Good planned. first guess, were Obviously, that

the East what is we’re of for, We’re but more There’s uncertainty, probably obviously Middle the growth given some and in end the of around uncertainty Middle bit kind year-to-date. hoping billings East XX% high collections. the little a

if do I’d second almost collections or we go cash to well, So million the $XXX things half. do in in in say, have

coming in. kind that of So up with we’re it’s estimate a just confident

Cai von Rumohr

basically so it cooling on I for you’re as the last that mean, moment given growing, for how can what’s growing one, Terrific. on And appetite organically, M&A? Are deliver you you basically you’re well acquisitions? your as do fast acquisitions? fast

Carey Smith

part our do acquisitions. chain believe win growth story, being critical a moving the bid still value jobs. intend us of a that’s really been as larger We and We solutions integrator, to up able to

than – we high greater line, plan are at than that need EBITDA look XX% to have greater XX% same So companies bar, continue, it keep top so to margin. we’ll the growing we

going very be continue selective. to We’re to

stronger be if what going our to to acquisition It’s like I win think been you us and able able are most more deliver. and be to Xator be able business. to make and to they’ve that our growth look to really into capabilities companies the contribute couple being at to recent going

and areas On protection. the in infrastructure like and cyber at federal area of critical going to we’re space, around or side, look cyber defensive companies particularly

look if how money. side, look On more getting states also you of we’re of infrastructure because going the is, the spend critical the geographies, are to infrastructure at larger at areas the

double So see down you can expect us to there.

Cai von Rumohr

you very Thank much.

Carey Smith

Thanks, Cai.

Operator

the of Our Andrew with next question comes Wittmann Baird. line from

Andrew Wittmann

Excuse with awards front have year, not guess, but the me. I level in just your federal terms success this Thanks broadly bids in the only is for kind the just outstanding here. was of recompetes, notable of taking the obviously wondering my with with question. of awards I the in And does you does summer earlier heard with now, right that happening does year? Carey? bidding the velocity any the How pace or that back on the appropriations affect that yet. fall? compare in How of that’s uncertainty not that’s the process coming this bidding

Carey Smith

Andrew. Thanks, Yes.

I we would So quarter of we win ceiling unbooked call have much. $XX out though, $X have also what value. billion awaiting notice because of I point we did last award, lighter so than which is billion a over little

$X.X the at contract, So take that for billion which way we if a that $XXX you the we again FAA and do example, booked look bookings of award million. was

reflected rest backlog our It’s of bookings. in So value. that in unbooked $XX billion you see don’t of that, or the

dealing at backlog. record to commercial. international, And those based like the that that you continuing the you that’s have resolutions. through billion billion gotten the If XX% We’ve not look $X.X look of amount CR unfortunately, with both local very of budget strong very and value. we’ve our uncertain able appropriations with used And unbooked on to process, $XX environments, we’re run and at subject we then state obviously to is got process, if business

for while. we a to able feel we’ll be So run confident

Matt Ofilos

your a if just two award, rate to awaiting that’s of our I’d a add was – billion what couple notice couple ago. And years times that look almost years, point, $X Andy, that’s of back run we

in right still a but recently. the there’s there, direction kind So backlog of trending it’s

Carey Smith

pipeline. And Andy, a we $XX also billion have

Andrew Wittmann

Is are think, elaborate the what all of wanted. just, there expected year-to-date. any you reason or seen. any experienced? win better change win you’ve it rates. there kind you believe doing rates I be on maybe you’ve missed than numbers than kind it’s been Great. quick you’ve I been just or can of that guess, a Those good should I know I worse in Carey, had the that expected maybe on I to comment

Carey Smith

been years. I the And over chain it’s back We’ve by again, moving consistently is about year, we’ve our up say, if to key will value it’s look And at point look year we every our I we’re process, years, a three and very I sort bidding XX% way improved selective, it almost the very customer mean, XX%. the couple last of think emerging Yes. back last for doing I positioning with over year-to-date. up This requirements. customers. working goes being well business early,

not somebody we’re a digital solve problems pair market a the take our threat and you transformation the key always solve that’s problems future, to contributor So near in share, but do the we company within like trying of rather infrastructure? else’s do I And think coming to or how success. that’s how

Andrew Wittmann

good Great. Have Thank you very day. much. a

Matt Ofilos

Thanks, Andy.

Carey Smith

Andy. Thanks,

Operator

question The Benchmark line Josh Our Company. with from Sullivan the next comes of

Josh Sullivan

quarter. great morning, good Hey,

Carey Smith

morning. Thank you. Good Josh.

Josh Sullivan

tent XX looking of Eastern the up do months? staging on $XX next international how ahead, piece, contract of polls value, the or following Middle that large cadence billion in the Just over any the unbooked we think

Carey Smith

Yes.

two and five Neom also to as So would Qiddiya. been of Neom of Middle they and successful biggest at be Project us works, Line up. five on to would ones The The get East giga-projects going and are ramp grow on the to for the Oxagon we’ve those be continue

city the there long that’s as sustainable the partner world their largest and the as Line Qiddiya totally city. Empire to of X then we’re by the State projects. The people Island, both entertainment being delivery as Neom goal Riyadh, – million as have Long is have tall just So in outside being those we And city living XXXX of Building, on

So investment I seeing are long to would XXXX. runs you’re see vision ramp they Saudi as of and because Dubai that of Then kind going and a tail, outside say, have and Qatar, those to to a continue well.

Vision, the the those defined. strong. and like that’s projects UAE they So have National the There’s been Qatar XX of so the are

Josh Sullivan

we costs there outside think the should setting legacy are writedowns? And Got it. the as far as about terminal programs, sun then of any

Carey Smith

I’m not.

Matt Ofilos

within them but No. of I kind wouldn’t, nothing it’s up and them ASCs. wrapping specific just the completing Josh,

Josh Sullivan

inflation just lastly, the far seeing and availability generally markets retention labor what it. you and retention, Got And wage are then as hiring as or rates? in

Carey Smith

Yes.

culture great big from we’re year. think come little X% that see doing, drop people year-over-year last I Parsons We’ve we to it’s and down again, a is company a like retention. think and credit a just great like flexibility. very act on place they Parsons. culture our though, terms we a it’s company, of of our a seen It’s a So small to to be. And I’ll bit improvement. we’re agility, I but our kind It’s – supportive in big really

of So share our more I why attracting fair than we’re talent. kind of believe that’s

Josh Sullivan

the for you Thank Great. time.

Carey Smith

Thank you.

Operator

Our comes of Louie next DiPalma Blair. with line question William from the

Louie DiPalma

morning. good Dave, and Matt Carey,

Carey Smith

morning, Good Louie.

Louie DiPalma

highly active Parsons on for that a related fairly State seems to be was you’ve acquisition. it’s as recent significant your Department It award now? to as this year. for I of wondering, more pipeline M&A four you the BlackHorse seems your the effective years, topic, past does million your think been state And $XXX this seems and contract but GSA on IPKeys the done current for encourage $X.X acquisition just every to what formula this the Xator I win front year, billion be is was And M&A right the

you wondering market. the was about So feel I how Thanks. M&A just

Carey Smith

companies, point, very Louie. to ability And right the the leadership seen growth companies, Legacy, has contributor to say Thanks, our led almost bought. it of been by the companies Yes. I the M&A all to it we’ve the legacy has our BlackHorse, we’ve is work but and to a Xator. was important I’d GSA mean, success. win our growth, – from critical to Parsons. our in integrate State that what The Department was people Polaris Braxton, buy included retain been To OGSystems, the your Alpha, QRC,

the after that We work companies all really emerging the is very integrate week. both and customer acquisitions, federal win, on I a quickly that pipeline side. see would critical infrastructure was And culmination requirements. the still to every go say, ability of to We those the ability good look and the at

enable so growth to the that going selective be we’re that been delivering. continue to companies very the buying we’ve that We’re

Louie DiPalma

hire Parsons demand to it with very specific relates keep the reported to to region? enough Carey. the that labor geography? Is And Great. been market to Thanks, Middle able East, how You in as up the growth. revenue has that strong

Carey Smith

labor Louie. Thanks, XX very about hire from the The around We Yes. good. world. market, has been there different countries

involved So a want like quite people they’re to are stage. of to we first there that really be in greenfield and projects have we’re and countries, these, so kind, of in a a so because of they’re doing a bit compared one unique of type pull kind other the

more a or see you’re like in being an there’s able of on work So exciting go career. rest if the Qiddiya may to that than never your you engineer, nothing project Neom

Louie DiPalma

Dave. Excellent. and Thanks Carey, Matt

Carey Smith

Louie. Thanks,

Operator

Instructions] Mariana Bank Mora Our comes with Pérez question of next America. [Operator from

Mariana Pérez Mora

Good morning, everyone.

Carey Smith

morning. Good

Matt Ofilos

Good Mariana. morning,

Mariana Pérez Mora

you what with end XX% you times the is, are year, have this the three, growth Question – year. accomplish year expected. like of three lower you That’s guidance. organic expecting And just four CAGR you almost this that

organic future future? should two how the don’t the and a place about are keep up in in know, I we some night, what that years? it’s into you conservatism still you build And variables I to next think put don’t know, like like at the growth the First, second, and

Carey Smith

update We of three financial a lot Thanks, as to We’ve out the won Mariana. midpoint a our base. the top upside Day QX of an a of targets our hear Investor from us But for update. put our significant a result. Great We’ve And during that of perspective, financial amount you’ll QX question. I of updated half mid-single start you success as first guidance for total had point would the in $X.XX billion targets do higher plan and either from of and work. growth modeling revenue year with to year. targets on or now,

second issues comfortable within what was part up? I Oh, about. control feel And macro say, your I you if the then headwinds. any keeps your everything – our part environment would of of question

seeing a second Right talked that the we the ones about become in we is, with keep question the or an more be earlier, Does now, eye end difficult? half year. would quadrillion would but do those, hiring up a retention being So of those not longer we’re the we than a headwind year on. CR,

Mariana Pérez Mora

constraints And M&A you. because of the the have seen then hard any on closing on scrutiny? thank Perfect, end, deals side, at you

Carey Smith

at work value gaps solutions look up and have a help things. all us that We stronger seen closing fill chain. not integrator on against, deals. constraints a We the competing companies, move capability couple but for will become companies I’ll to point of that out to not

try get also companies We and preemptively.

to companies, build try we long get know M&A with mentioned, don’t worked So time, case. understand we One to they’re going our into so that unlike that processes. avoid we’ve synergies a fit. I other We item other auction be we a and companies for we culture in their

get acquisitions. are to M&A to buy focus the team case. executive So anytime team, And after on then of be came able key companies, fact, we additive from to many us leadership leadership the my cost keep revenue our or we those synergies, it’s folks of in today

Mariana Pérez Mora

Thanks much. so

Carey Smith

you. Thank

Matt Ofilos

Mariana. Thanks,

Operator

I’d to we like have Dave to the for remarks. today. closing for questions the time call back all That’s turn Spille

Dave Spille

us you thank for And this morning. you. Thank joining

give we’ll that, great today’s me speaking If of to weeks. call. don’t end with day. over Have have coming many any look to hesitate We a the And with a you you forward questions, call. please

Operator

conference for This call. you today’s concludes participating. Thank

disconnect. now may You

Parsons (PSN) 2 Aug 232023 Q2 Earnings call transcript