Parsons Corporation · NYSE:PSN
Parsons — Q4 2023 Earnings Presentation
19 slides from Parsons's earnings presentation, Feb 14, 2024
Slide 1: Fourth Quarter and Fiscal Year 2023 Earnings Conference Call Presentation
FOURTH QUARTER AND FISCAL YEAR 2023 Earnings Conference Call Presentation February 14, 2024
Slide 2: Forward Looking Statements
FORWARD This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and terminations or cancellations caused by competitors’ protests of major contract awards received by us;
Slide 3: Major Messages
MAJOR MESSAGES Strong execution driving consistent results Record Q4 and FY23 results since our IPO: total revenue, organic revenue, net income, adjusted EBITDA, operating cash flow, and contract awards Record total revenue: $5.4B for FY23 and $1.5B for Q4 Record organic revenue growth: 23% for
Slide 4: 2023 Financial Performance
2023 FINANCIAL PERFORMANCE Exceptional growth for all three financial guidance metrics 2023 Guidance Mid-point* 2023 Actuals Highlights 30% total revenue growth and organic growth of 23% over Total Revenue $5.250B $5.443B FY22 Adjusted EBITDA $450M $465M 32% increase over the prior year Cash Flow fr
Slide 5: Q4 2023 Key Highlights
Q4 2023 KEY HIGHLIGHTS Record finish to the year Q4 2023 revenue growth of 35% over Q4 2022 with record 34% organic growth Record net income increased 60% to $45M year-over-year Q4 2023 REVENUE Record adjusted EBITDA increased 30% to $128M $1.5 Billion Record cash flow of $190M increases 113
Slide 6: FY23 Financial Summary
FY23 FINANCIAL SUMMARY Record total revenue, organic revenue, adjusted EBITDA, operating cash flow, and contract awards FY23 total revenue of $5,443M increased 30% Cash flow from operations of $408M increased 72% and 23% organically from FY22 from FY22 Adjusted EBITDA of $465M increased 32%
Slide 7: Q4 2023 Financial Summary
Q4 2023 FINANCIAL SUMMARY Record quarterly total revenue, organic revenue, adjusted EBITDA, operating cash flow, and contract awards Q4 2023 total revenue of $1,494M increased Cash flow from operations of $190M, compared 35% and 34% organically from Q4 2022 to $89M in Q4 2022 Adjusted EBITDA o
Slide 8: FY23 Business Segment Summary
FY23 BUSINESS SEGMENT SUMMARY Federal Solutions Critical Infrastructure FY23 revenue of $3,021M increased 36% and FY23 revenue of $2,422M increased 22% 25% organically from FY22 (essentially all organic) from FY22 Adjusted EBITDA of $290M increased 45% Adjusted EBITDA of $175M increased 14%
Slide 9: Q4 2023 Business Segment Summary
Q4 2023 BUSINESS SEGMENT SUMMARY Federal Solutions Critical Infrastructure Q4 2023 revenue increased 50% and Q4 2023 revenue increased 21% and 20% 47% organically from Q4 2022 organically from Q4 2022 Adjusted EBITDA of $82M increased Adjusted EBITDA of $46M decreased 10% 73% from prior year
Slide 10: Significant Contract Wins
SIGNIFICANT CONTRACT WINS Awarded a single-award classified contract for continued work in support of the U.S. Government, valued at over Awarded $250 million. This award represents a critical task that the corporation and its acquired companies have been >$250M performing for over a decade and has
Slide 11: Significant Contract Wins (continued)
SIGNIFICANT CONTRACT WINS (continued) Awarded prime positions on two multiple-award indefinite-delivery, indefinite-quantity contracts. The first one is a Awarded U.S. Army Corps of Engineers Kansas City District contract with a value of $245 million. The five-year contract for environmental remedia
Slide 12: Additional Corporate Highlights
Additional Corporate Highlights Acquired Full-Service Consulting Firm - I.S. Engineers Parsons announced and closed the acquisition of I.S. Engineers for $12.2 million. This acquisition is consistent with Parsons' strategy of completing accretive acquisitions of companies with revenue growth and adj
Slide 13: Fiscal Year 2024 Guidance
FISCAL YEAR 2024 GUIDANCE 2023 Actuals 2024 Guidance Growth at Mid-Point Total Revenue $5.4B $5.8 - $6.0B +8% (7% organic) Adjusted EBITDA $465M $505 - $545M +13% (40 bps) Cash Flow from Operations $408M $350 - $410M -7%* *2024 free cash flow conversion is expected to be approximately 100% of adjust
Slide 14: Increased Investor Day Growth Targets
Increased Investor Day Growth Targets Current 2025 March 2023 Highlights Trajectory Investor Day Guidance Growth is off a revenue base that is $1.2 Mid- single-digit organic growth Organic Revenue Growth 3% - 5% billion higher than the figures presented in or better March 2023 Strategic acquisitions
Slide 15: Fiscal Year 2024 Guidance Assumptions
FISCAL YEAR 2024 GUIDANCE ASSUMPTIONS ~ 56% of total revenue to be generated from Federal D&A expenses of ~ $90M, which includes ~ $50M of Solutions segment at the mid-point acquisition-related amortization Adjusted EBITDA margin of ~ 8.9% at the mid-point of FY24 guidance includes ~$10M of
Slide 16: Appendix: Supplemental Materials
APPENDIX: SUPPLEMENTAL MATERIALS Parsons Corporation Sensitive / Proprietary 16
Slide 17: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION PARSONS CORPORATION Non-GAAP Financial Information Reconciliation of Net Income to Adjusted EBITDA (in thousands) Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 2023 2022 2023 2022 Net income attributable to Parsons Corporati
Slide 18: Adjusted EBITDA Attributable to NCI
ADJUSTED EBITDA ATTRIBUTABLE TO NCI PARSONS CORPORATION Non-GAAP Financial Information Computation of Adjusted EBITDA Attributable to Noncontrolling Interests (in thousands) Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 2023 2022 2023 2022 Federal Solutio
Slide 19: Adjusted Net Income Attributable to Parsons
ADJUSTED NET INCOME ATTRIBUTABLE TO PARSONS PARSONS CORPORATION Non-GAAP Financial Information Reconciliation of Net Income Attributable to Parsons Corporation to Adjusted Net Income Attributable to Parsons Corporation (in thousands, except per share information) Three Months Ended Twelve Months End