Parsons Corporation Jefferies Global Industrials Conference 2026

My name is Sheila Kahyaoglu with the Jefferies Aerospace Defense and Airlines Equity Research Team, in case you're on the webcast and don't recognize me. We have 31 minutes left in our buyer side chat due to the elevators, but great news. We have the Parsons management team here. If you haven't heard Carey speak yet, she's the Chair, President, and CEO of Parsons, and she's extra speedy, so we won't have a problem within these 31 minutes. Matt Ofilos, who's the CFO. With that, Carey and Matt, maybe you could just, for folks who aren't familiar with the story, Parsons has gone through a lot, has had some great wins. How do we think about Parsons going forward from here?

Yeah. First, thanks for having us here today. I'll start off with a very brief overview of Parsons. We are organized. We're about 50% federal solutions, 50% within critical infrastructure. We have 21,000 people that work in 25 countries around the world, all 50 states. I'd like to talk about the company in terms of six end markets, all of which are growing between 4%-11% compound annual growth rate. Starting off with transportation. Transportation represents about 29% of the company's revenue, and there we're involved in roads and highways, bridges. Both those areas are very important as you look at the next five-year surface transportation bill, because they're the two areas that are mostly going to get emphasized.

We also do an advanced traffic management system, one of the most globally deployed in the world, and we just had an exciting first deployment within the Middle East in the city of Riyadh. Then we're involved in areas like ports and airports. We've done over 450 airport projects, including the new King Salman International Airport and 450 rail and transit projects. Second area is cybersecurity, also an area that's very exciting, an area that should be the fastest-growing end market at a rate between 9%-11%. That represents about 20% of Parsons' revenue. There we do about 60% offensive cyber, about 40% defensive cyber. One of the recent wins, Sheila, that we just had in the defensive cyber area would be the Joint Cyber Hunt Kit. That's a $750 million program over five years. It's product-based, so it's margin accretive, but we're excited about that.

The other area within cyber that's getting increasing attention is critical infrastructure protection. Whether you look at what's happened recently in the U.S., where there's been attacks on the water supply within 12 states, and we recently participated as founding member of the Project Watershed kickoff within the state of Texas, where we're going to try and help the water companies be able to basically harden their infrastructure through cybersecurity capabilities. That's going to be important, or whether you look at what's going on in the conflict today in the Middle East, where a lot of the shots are being taken at water companies, utility companies, and data centers. That's another area that we can help support. That's kind of the cyber market. Third market area is space. That's about 15% of the company's revenue.

Within space and missile defense, we are the number 1 contractor for the Missile Defense Agency for system engineering and integration. That is important as we look at the Golden Dome for America program, because the Missile Defense Agency is designated as the lead for the system engineering. Also in space, we have done over 170 space ground systems. We are involved in space situational awareness, both for Department of War and the intelligence community, as well as the U.S. Department of Commerce, which supports civilian and international missions. We have an assured position navigation, timing solution, exclusive partnership with Globalstar, now Amazon, which allows you to get location information in case your GPS is jammed because we are using a different frequency constellation. The next area would be 14% of the company's revenue would be water and environment.

We do a lot in the area of water, so we are involved in water, wastewater treatment plants. We are involved in desalination. We are involved in water conveyance. We also do mine reclamation projects. Two of the largest abandoned mines up in Canada, Faro and Giant mine, fall within that. Next area would be urban development, 14% of the company's revenue. That is what we do in the Middle East. We have been in the Middle East for 7 decades. We are the number 1 program manager within Saudi Arabia, within Qatar, and within the UAE. We are on every single Saudi gigaproject. We are the program manager that is doing the new King Salman International Airport. We are the program manager for King Salman Park, 5 times the size of Central Park. Program manager for Qiddiya, the world's largest entertainment city.

We are also redesigning the roads and highways around Riyadh, going to be critically important to get that right for the upcoming Expo and World Cup, and we deployed our advanced traffic management system. The final area, about 7% of the company's revenue, is critical infrastructure protection. One of the recent wins we had in that area was a $392 million classified win that we announced in the fourth quarter. That leveraged our biometric solutions capability. We do biometrics for over 50 different customers, state and local, Department of War, and intelligence community. There we also, within critical infrastructure protection, support 285 embassies and consulates throughout the world, providing counter-UAS in addition to biometrics capability. Quick snapshot and 1 additional comment I would make on recent awards. This year in the first half, we have been awarded 9 contracts greater than $100 million.

That compares with 7 a year ago and 5 the year before that. So we are on a trajectory where we have won quite a bit of big awards, and within the 9, 5 represent new business, 3 are follow-ons, and 1 was repeat.

Great. Lots to digest there. Can we talk about the Federal Solutions business? Bookings were stellar in the quarter, and they accelerated significantly up 45% in the first half, I'm sorry, for a book-to-bill of 1.3. What are some of the demand signals you're seeing? What's benefiting from the defense budget versus what you're seeing from recompetes and new business opportunities?

Yeah. So to your point, Sheila, we had a 1.4 book-to-bill for Federal in the first quarter, 1.3 in the second quarter. Federal bookings have been very strong. After the quarter ended, it was also announced on the Federal Procurement Data System that we were awarded a $665 million counter-UAS job with the Army. That's going to be over a seven-year period of performance. So I would say where we're seeing acceleration is in a lot of our classified programs, such as the Navy's Intelligence Carry-On Program. That was a new start, $184 million over five years. We also won some Other Transaction Authority agreements. Two of those were worth $400 million. Those are over three years. OTAs, I'd say, is an area that we're really excited about because we currently have about 94 OTAs between what's in our pipeline and what's been awarded.

37 of the OTAs have been awarded. So we're seeing this now be kind of a billions of dollars type of representative for our market. The Joint Cyber Hunt Kit I'll hit on again. That's a great example of where we applied artificial intelligence. So we had the first deployed agentic AI use for a cyber threat hunt kit, and I think it was a key enabler to us winning. The neat thing about that contract being another Other Transaction Authority agreement, originally 101 companies submitted white papers. It was down-selected to three companies for a prototype, and then we were ultimately selected as the winner for that contract. That was done in a period of nine to 12 months, so something that traditionally would've taken a long time, and that's the benefit of what's happening in acquisition reform.

Now we're going to be delivering 74 kits each year for the first three years, and then the last two years, that contract's going to be opened up for international customers and other military services.

Lots to digest. How do we think about that $11 billion pipeline as well? You have mentioned it. It has been pretty constant, actually, over the last three years. How do we think about it expanding, things moving into backlog and into revenues?

Yeah. Our backlog is about $9.3 billion, 71% of which is funded, which is very strong compared to any of our peers. We also have an $11 billion awarded, not booked. You can think of that is work that has come to Parsons as a single prime contractor. Half of the $11 billion represents option years on follow-on contracts, and the other half of the $11 billion represents potential ceiling value. That would be like an OTA where we have to drive work to that. That number will tend to fluctuate based on when we do bookings. A good example, last quarter, we booked $593 million for our FAA contract, so that was for the three-year option year. That comes out of the $11 billion and gets reflected into bookings.