On February 19, 2025, Parsons Corp (PSN, Financial) released its 8-K filing detailing its financial results for the fourth quarter and fiscal year ended December 31, 2024. Parsons Corp, a provider of technology-driven solutions in the defense, intelligence, and critical infrastructure markets, reported record results since its IPO, showcasing significant growth across its Federal Solutions and Critical Infrastructure segments.
Q4 and FY 2024 Financial Highlights
Parsons Corp reported a record revenue of $1.7 billion for Q4 2024, marking a 16% increase year-over-year, driven by 14% organic growth. The company's net income for the quarter rose by 21% to $54 million, with a GAAP diluted EPS of $0.49, which is below the analyst estimate of $0.62. However, the adjusted EPS was $0.78, surpassing the analyst estimate. Adjusted EBITDA for the quarter increased by 14% to $147 million, although the adjusted EBITDA margin slightly decreased to 8.5% from 8.6% in the previous year.
For the fiscal year 2024, Parsons Corp achieved a record revenue of $6.8 billion, a 24% increase from the previous year, with organic growth contributing 22%. The company's net income surged by 46% to $235 million, and the diluted EPS was $2.12, compared to $1.42 in the prior year. Adjusted EBITDA for the year was $605 million, a 30% increase, with an adjusted EBITDA margin of 9.0%, up from 8.5% in 2023.
Segment Performance and Strategic Achievements
The Federal Solutions segment saw a 19% increase in revenue for Q4 2024, reaching $1.0 billion, driven by 17% organic growth and contributions from acquisitions. The segment's adjusted EBITDA rose by 21% to $100 million, with an improved margin of 10.0%. For the fiscal year, Federal Solutions revenue increased by 33% to $4.0 billion, with a 43% rise in adjusted EBITDA to $415 million.
The Critical Infrastructure segment reported a 12% increase in Q4 2024 revenue to $731 million, with 9% organic growth. However, the adjusted EBITDA margin decreased to 6.4% due to adjustments on two programs. For the fiscal year, the segment's revenue grew by 13% to $2.7 billion, with an 8% increase in adjusted EBITDA to $189 million.
Key Financial Metrics and Strategic Initiatives
Parsons Corp's cash flow from operations for Q4 2024 was $127 million, while for the fiscal year, it increased by 28% to $524 million. The company reported record contract awards of $7.0 billion for the fiscal year, a 17% increase, with a total backlog of $8.9 billion, up 4% from Q4 2023.
Significant contract wins included two new contracts in Saudi Arabia totaling over $275 million and a lead design contract for the Newark AirTrain Replacement Program. The company also completed strategic acquisitions, including BCC Engineering and TRS Group, enhancing its infrastructure and environmental remediation capabilities.
“2024 was another exceptional year for Parsons. We achieved record results for total revenue, adjusted EBITDA, adjusted EBITDA margin, operating cash flow, contract win rates, and contract awards,” said Carey Smith, chair, president, and chief executive officer.
Analysis and Outlook
Parsons Corp's strong financial performance in 2024 highlights its ability to leverage organic growth and strategic acquisitions to drive revenue and earnings. The company's focus on critical infrastructure protection and cyber markets, along with its balanced portfolio, positions it well to capitalize on global infrastructure spending. Despite challenges such as adjustments impacting margins, Parsons Corp's strategic initiatives and contract wins demonstrate its resilience and potential for continued growth.
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Explore the complete 8-K earnings release (here) from Parsons Corp for further details.
