Parsons Q4 Earnings Miss Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy PSN?
Source: seekingalpha
- Earnings Performance: Parsons reported a Q4 Non-GAAP EPS of $0.75, missing expectations by $0.04, indicating pressure on profitability that may affect investor confidence.
- Revenue Decline: The company’s Q4 revenue of $1.6 billion represents a 7.5% year-over-year decline, missing estimates by $70 million, reflecting weak market demand that could pose challenges for future performance.
- Net Income Growth: Despite the revenue drop, Parsons achieved a net income of $56 million, a 3% year-over-year increase, setting a fourth-quarter record and demonstrating effective cost control measures.
- Strong Cash Flow: Operating cash flow increased by 32% to $168 million, indicating strong cash management and enhancing financial flexibility to navigate future uncertainties.
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Analyst Views on PSN
Wall Street analysts forecast PSN stock price to rise
14 Analyst Rating
10 Buy
4 Hold
0 Sell
Moderate Buy
Current: 62.670
Low
70.00
Averages
84.00
High
107.00
Current: 62.670
Low
70.00
Averages
84.00
High
107.00
About PSN
Parsons Corporation is a disruptive technology provider in the national security and global infrastructure markets, with capabilities across cyber and electronic warfare, space and missile defense, transportation, water and environment, urban development, and critical infrastructure protection. Its Federal Solutions segment provides advanced technical solutions to the United States government. This segment provides advanced technologies, supporting national security missions in cyber operations, missile defense, and military facility modernization, logistics support, hazardous material remediation and engineering services. Its Critical Infrastructure segment offers integrated engineering and management services for complex physical and digital infrastructure around the globe. This segment is a technology innovator focused on next-generation digital systems and complex structures. It also develops advanced, warfighter-focused solutions for military and security applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Decline: Overall revenue decreased by 8% year-over-year, with organic revenue down 10%, although growth was noted in space and defense services, transportation, and critical infrastructure protection; however, a decline in sales volume from a key confidential contract negatively impacted overall results.
- Cautious Outlook: Parsons anticipates a return to growth in 2026, targeting sales between $6.5 billion and $6.8 billion, which would represent a 4.5% annual revenue increase if the midpoint is achieved, yet investors express concerns over potential adverse effects from shifts in confidential contracts.
- Market Reaction: Following the earnings report, Parsons experienced significant stock volatility, with a current market cap of $7.5 billion and a trading volume of 4.7 million shares, reflecting heightened investor scrutiny and anxiety regarding the company's future prospects.
See More
Parsons Corporation Q4 2025 Earnings Call Highlights
- Significant Revenue Growth: Parsons Corporation reported a 12% total revenue growth and an 8% organic revenue growth in Q4 2025, with adjusted EBITDA margin expanding to a record 9.6%, indicating strong market demand and effective business execution.
- Outstanding Cash Flow Performance: The company achieved a 100% free cash flow conversion for fiscal year 2025, exceeding the high end of its cash flow guidance range, reflecting a healthy financial position that supports future investments and acquisitions.
- Strategic Contract Wins: In Q4, Parsons secured several key contracts, including a $392 million ten-year federal customer contract, showcasing its strong competitiveness in critical infrastructure and defense sectors, which is expected to drive future revenue growth.
- Acquisitions and Expansion: The company acquired Applied Sciences Consulting and Altamira Technologies, enhancing its capabilities in national security and intelligence, indicating Parsons' strategic decisions in technology and market expansion aimed at boosting long-term growth potential.
See More
Parsons Corporation Reports Disappointing Quarterly Results
- Revenue Decline: Parsons Corporation's fourth-quarter revenue fell 8% year-over-year to $1.6 billion, missing Wall Street's expectation of $1.63 billion, indicating challenges in the government services and infrastructure sectors.
- Profitability Fluctuations: Although net income slightly increased to $56 million with earnings per share at $0.51, adjusted earnings per share dropped to $0.75, below the market estimate of $0.79, reflecting pressure on profitability.
- Cash Flow and Order Status: Operating cash flow surged 32% to $168 million, yet net bookings decreased by 10% to $1.5 billion, resulting in a book-to-bill ratio of 0.9 times, signaling signs of weakening market demand.
- Future Outlook: Parsons forecasts revenue between $6.5 billion and $6.8 billion for 2026, with adjusted EBITDA projected at $615 million to $675 million, indicating optimism about future contract opportunities despite uncertainties.
See More
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- Stock Performance: Parson shares experienced a significant decline of 9.2% following the release of their Q4 results.
- Market Reaction: The drop in share price indicates a negative market reaction to the company's quarterly performance.
See More
