Parsons (NYSE: PSN) posted a record revenue of $1.7 billion during the second quarter of 2024, reflecting a year-over-year growth of 23 percent, and ended the quarter with a total backlog of $8.8 billion with a book-to-bill ratio of 0.9x on net bookings of $1.5 billion.
The Centreville, Virginia-based defense and infrastructure engineering company said Wednesday it saw its Q2 organic revenue grow 22 percent driven by the continued ramp-up on contract awards and execution on its backlog programs.
The company’s Q2 net income rose 60 percent to $69 million and adjusted earnings before interest, taxes, depreciation and amortization for the quarter increased 27 percent to $150 million.
The adjusted earnings per share of Parsons during the second quarter was $0.84, up from $0.63 from the prior-year period.
Financial Results of Business Segments
Parsons’ federal solutions segment saw its Q2 revenue rise 30 percent to $989 million due to organic growth of 27 percent and SealingTech acquisition.
The critical infrastructure business segment reported $682 million in Q2 revenue, up 15 percent from the same period last year, and a 46 percent rise in adjusted EBITDA driven by improved operating performance and growth on accretive programs.
CEO Carey Smith on BlackSignal Acquisition, M&A Plans
During Wednesday’s earnings call, Carey Smith, chairwoman, president and CEO of Parsons, discussed the company’s move to acquire BlackSignal Technologies.
Parsons announced on Tuesday that it agreed to buy BlackSignal Technologies for approximately $200 million to expand its cybersecurity, artificial intelligence and electronic warfare capabilities and customer base across the Department of Defense and Intelligence Community.
“This acquisition, which is expected to close in August 2024, is consistent with our strategy of completing accretive acquisitions of companies we know well and have revenue growth and adjusted EBITDA margins of 10% or more, while adding critical intellectual property that strengthens our existing portfolio,” said Smith, a 2024 Wash100 awardee and chair of 4×24 Group 1 Leadership.
The chief executive noted that BlackSignal is directly aligned with the company’s “solution-selling vision” and has 90 percent IP-enabled offerings.
When asked about Parsons’ prospective merger and acquisition pipeline, Smith described it as “very strong.”
“We have a lot of candidates within both Critical Infrastructure and within Federal, and we’re on track to do two to three acquisitions this year,” she added.
CFO Matt Ofilos on Fiscal Year 2024 Guidance
Parsons Chief Financial Officer Matt Ofilos told analysts that the company is increasing all of its fiscal year 2024 guidance ranges to reflect its record Q2 results, positive end-market exposure and recent contract wins and option awards.
According to Ofilos, Parsons expects its fiscal year 2024 revenue to hit $6.35 billion to $6.55 billion, up from the prior guidance of between $6.1 billion and $6.4 billion.
“This represents total revenue growth of 19% at the midpoint and 18% on an organic basis,” he said during the call.
The CFO stated that the company expects its adjusted EBITDA to hit $555 million to $595 million and operating cash flow to be between $395 million and $455 million.
