Parsons Corporation, a prominent player in the national security and global infrastructure markets, has announced its financial results for the third quarter ending September 30, 2025. Despite a notable dip in total revenue, the company remains optimistic about its strategic direction, showcasing resilience and strong potential for future growth.
Parsons Corp Earnings
Parsons reported a decrease in total revenue to $1.6 billion in Q3 2025, a drop of 10% year-over-year and 14% on an organic basis. However, excluding the impact of a confidential contract, revenue growth was positive, marking an increase of 14%, with organic growth at 9%. Net income stood at $64 million, reflecting an $8 million decline from the previous year.
Key Financial Metrics
Here's a closer look at the financial metrics comparing year-over-year performance:
| Financial Metric | Q3 2025 | Q3 2024 | Year-over-Year Change |
|---|---|---|---|
| Total Revenue | $1.6 billion | $1.788 billion | -10% |
| Net Income | $64 million | $72 million | -11% |
| GAAP EPS | $0.59 | $0.65 | -9.2% |
| Adjusted EBITDA | $158 million | $166 million | -5% |
| Adjusted EBITDA Margin | 9.8% | 9.2% | +60 basis points |
| Diluted Adjusted EPS | $0.86 | $0.95 | -9.5% |
Revenue Breakdown
Revenue performance across the company's major segments is as follows:
| Segment | Q3 2025 Revenue | Q3 2024 Revenue | Year-over-Year Change |
|---|---|---|---|
| Critical Infrastructure | $845 million | $716 million | +18% |
| Federal Solutions | $775 million | $1.092 billion | -29% |
Segment Performance Analysis
Critical Infrastructure Segment : The year-over-year revenue increase of 18% in the Critical Infrastructure segment was driven by 13% organic growth and contributions from acquisitions. This growth stems from the ramp-up of recent contract wins and existing contracts in North America and the Middle East. The segment also saw a massive 83% rise in adjusted EBITDA to $39 million, indicating improved program performance and effective acquisitions.
Federal Solutions Segment : In contrast, the Federal Solutions segment saw a 29% decrease in revenue, primarily due to lower volume on a confidential contract and investments in strategic personnel and bid activities. Despite the drop, excluding the core confidential contract, this segment displayed a 9% growth in revenue, driven by strong performance in Critical Infrastructure Protection, Transportation, and Space and Missile Defense markets.
Key Developments
The third quarter of 2025 was significant for Parsons in terms of strategic wins and operational highlights. Key contracts included:
- Four contracts exceeding $100 million each.
- A ten-year task order contract to support the Holston Army Ammunition Plant as part of an $18 billion modernization plan.
- A $133 million expansion on Georgia State Route 400, enhancing express lanes and deploying modern traffic management systems.
Additionally, Parsons was awarded significant contracts in crucial markets like the Middle East and the U.S., further consolidating its market position.
Comments from Company Officers
CEO Carey Smith expressed satisfaction with the third-quarter performance: "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... and continued to deliver outstanding results in our Critical Infrastructure segment." Smith emphasized the company's strong execution, large contract wins, and strategic acquisitions that bolster long-term shareholder value.
Dividends and Share Repurchases
Currently, the report does not provide specific details on dividends or a share repurchase program. However, it emphasizes ongoing investment towards strategic growth through contracts and acquisitions, indicating a preference to reinvest into business growth rather than immediate shareholder returns.
Parsons Corp Stock Forecast
Parsons' stock prospects show a blend of challenges and potential opportunities, given the reduction in total revenue. The company's market capitalization after the event is approximately $8.71 billion. Given the strong fundamentals, contract pipeline, and segment growth potential, the stock projection ranges:
- High Projection : $50 per share, assuming successful execution of new contracts, strategic growth, and potential economic tailwinds.
- Low Projection : $40 per share, considering current revenue declines and market challenges in certain segments.
Ultimately, Parsons maintains a robust strategic position, underpinned by a diversified portfolio and strong contract wins. As it navigates through revenue headwinds, continued success in its strategic initiatives will be crucial for long-term growth and shareholder value.
