Parsons stock falls on revenue shortfall, lowered guidance

[Military Surveillance Officer Working on a City Tracking Operation in a Central Office Hub for Cyber Control and Monitoring for Managing National Security, Technology and Army Communications.]
gorodenkoff/iStock via Getty Images

Parsons (PSN [https://seekingalpha.com/symbol/PSN]) shares fell 9.2% in premarket trading Wednesday after the engineering and defense contractor posted [https://seekingalpha.com/news/4515522-parsons-reports-mixed-q3-results-updates-fy25-outlook] mixed third-quarter results, topping Wall Street’s profit expectations but falling short on revenue. It also trimmed its full-year sales outlook.

The company reported adjusted earnings of $0.86 a share, above analysts’ estimates of $0.75, while revenue declined 10% to $1.6 billion, missing the consensus forecast of $1.67 billion.

Net income fell to $64 million, or $0.59 a share, from $72 million, or $0.65 a share, a year earlier.

Parsons (PSN [https://seekingalpha.com/symbol/PSN]) said the decline reflected the wind-down of a large confidential contract and higher bid and proposal spending as the company invests in major strategic pursuits. Still, margins improved: earnings, before interest, taxes, depreciation and amortization fell 5% year over year to $158 million, but the ebitda margin expanded 60 basis points to 9.8%, supported by stronger program performance and recent acquisitions.

The company’s Critical Infrastructure segment remained a bright spot, with revenue rising 18% and adjusted ebitda up 83% on growth in North American and Middle Eastern projects. In contrast, the Federal Solutions segment saw revenue drop 29%, driven by the conclusion of the confidential contract and slower government spending.

Parsons’ (PSN [https://seekingalpha.com/symbol/PSN]) backlog grew to $8.8 billion, the highest funded level since its IPO, and the firm reported a book-to-bill ratio of 1.0 times for the quarter. However, cash flow from operations fell to $163 million from $299 million a year earlier, and management lowered full-year revenue guidance to between $6.4 billion and $6.5 billion, from a prior range of $6.48 billion to $6.68 billion.

Chief Executive Carey Smith said the company remains confident in its long-term growth trajectory, citing recent large contract wins in infrastructure modernization, national security and defense programs.

MORE ON PARSONS

* Parsons Corporation: Why I Am Maintaining My Buy Rating [https://seekingalpha.com/article/4835745-parsons-corp-why-i-am-maintaining-my-buy-rating]
* Parsons reports mixed Q3 results; updates FY25 outlook [https://seekingalpha.com/news/4515522-parsons-reports-mixed-q3-results-updates-fy25-outlook]
* Parsons Q3 2025 Earnings Preview [https://seekingalpha.com/news/4514863-parsons-q3-2025-earnings-preview]
* Seeking Alpha’s Quant Rating on Parsons [https://seekingalpha.com/symbol/PSN/ratings/quant-ratings]
* Historical earnings data for Parsons [https://seekingalpha.com/symbol/PSN/earnings]