Parsons delivered a powerful third-quarter performance for 2025, strategically positioning the company for future expansion. While total reported revenue reached $1.6 billion, the firm’s core growth drivers—specifically new Parsons Federal Solutions contracts and robust infrastructure spending—achieved double-digit growth.
Management successfully increased adjusted EBITDA margin by 60 basis points, hitting 9.8%, which reflects successful execution across major programs and accretive acquisitions. The quarter’s financial strength is underpinned by a substantial increase in total backlog, achieving a record high since the company’s IPO.
Record Backlog and Strategic Wins Cement Future Revenue
The company significantly bolstered its future revenue base, with total backlog climbing to $8.8 billion. This figure is the highest since the company went public, and an impressive 72% of it is now funded. This robust pipeline, combined with a quarterly book-to-bill ratio of 1.0x, demonstrates continuous success in securing new work.
The third quarter featured four contract wins valued at over $100 million each. These strategic wins included key defense contracts in the Middle East, a $665 million extension for the Gateway Program, and a design role for the Georgia State Route 400 Express Lanes.
Strong Growth in Critical Infrastructure and Federal Solutions
Analysis of the segment results reveals powerful momentum in core markets. The Critical Infrastructure segment surged, increasing revenue by 18%, including 13% organic growth, driven by rapid contract ramp-ups in North America and the Middle East. This performance lifted the segment’s adjusted EBITDA by an impressive 83%.
In the Federal sector, performance remained strong despite the winding down of a large, confidential contract that impacted reported revenue comparisons. Excluding this program, the Parsons Federal Solutions segment grew revenue by 9%, achieving 5% organic growth.
This strong, underlying growth resulted from successful contract execution and continued wins in national security and defense priority areas, including work supporting facilities like the Holston Army Ammunition Plant.
Confident Outlook and Acquisition Strategy
Parsons generated $163 million in operating cash flow, exceeding internal expectations for the quarter. The company affirmed its commitment to leveraging its strong balance sheet to drive expansion through strategic acquisitions.
Following the quarter’s end, the firm completed another accretive acquisition in the fast-growing water market, enhancing capabilities and strengthening its regional presence. These actions support a revised but confident outlook for the full fiscal year, as the company reaffirms its guidance for adjusted EBITDA and operating cash flow, reflecting confidence in its execution and market tailwinds.
