Q2 2022 Parsons Corp Earnings Call
Good day and welcome to the Parsons Corporation second quarter 2022 earnings Conference call, all participants will be in a listen only mode.
Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one. Please note that this event is being recorded I would now like to turn the conference over to Dave <unk> Senior Vice President of Investor Relations. Please go ahead Sir.
Thank you good morning, and thank you for joining us today to discuss our second quarter 2022 financial results. Please note that we've provided presentation slides on the Investor Relations section of our website on the call with me today are Kerry Smith Chair, President and CEO and Matt Uplifts CFO today, Cary will discuss our corporate strategy and.
<unk> highlights and then Matt will provide an overview of our second quarter financial results. We then will close with a question and answer session management May also make forward looking statements during the call regarding future events anticipated future trends and the anticipated future performance of the company. We caution you that such statements are not guarantees of future performance.
And involve risks and uncertainties that are difficult to predict actual results may differ materially from those projected in the forward looking statements due to a variety of factors. These risk factors are described in our Form 10-K for fiscal year ended December 31 2021.
Our SEC filings. Please refer to our earnings press release for Parsons complete forward looking statements disclosure, we do not undertake any obligation to update forward looking statements.
Management will also make reference to non-GAAP financial measures. During this call and we remind you that these non-GAAP financial measures are not a substitute for their comparable GAAP measures and now I will turn the call over to Carrie.
Thank you Dave.
Good morning, and welcome to person second quarter 2022 earnings call before we review our quarterly results I want to welcome Matt All flushed our call today as we announced last week, Matt was appointed our Chief Financial Officer effective July 25th.
Many of you've had the opportunity to meet Matt over the last several months at Investor conferences, Roadshows and during conference calls.
Since October of last year that has been a valued member of our leadership team and has significant public company experience financial acumen and integrity made him a natural selection to service. Our next CFO I know you will enjoy working with him that as much as I have and we look forward to the positive impact he will have on our growth and operate.
Yes.
I also want to thank George ball, our prior CFO for his numerous contributions to Parsons since taking over as CFO in 2008.
His strategic counsel and thought leadership enabled Parsons to become an industry leader in both the national security and critical infrastructure markets.
George it's been a great business partner to me and I am thrilled that we will continue to benefit from his insights and expertise as a member of our board of directors.
I am also pleased to announce the addition of Ellen Lord the former under Secretary of Defense for acquisition, It's a statement to our board.
As you can imagine we're thrilled to have an individual with her stature in defense expertise, which will complement GA is infrastructure and federal solutions knowledge.
Now, let's turn to our results we.
We delivered strong second quarter financial results and momentum established over the last year have continued.
During the quarter, we achieved 9% organic revenue growth, which is our highest since our IPO and we generated adjusted EBITDA and cash flow results in line with our expectations.
We also leveraged our balance sheet to complete our largest acquisition since our IPO.
Actually the tourists in important strategic and financially accretive acquisition that diversifies, our customer base broadens and further differentiates our capabilities and increases our addressable market in both the federal solutions and critical infrastructure segments.
As a result of our strong performance through the first half of 2022 and the extra tour acquisition, we are increasing our revenue and adjusted EBITDA guidance, which Matt will discuss in a few minutes.
During the second quarter, we generated total revenue growth of 15% our year over year organic revenue growth was 9%, including 11% within our federal solutions segment and 8% within our critical infrastructure segment.
These results reflect the improvements we've made to our business over the last year and were driven by sustained recruiting and retention growing revenue on existing contracts driving task orders to large single award contracts and operating effectively and to well funded and growing markets.
We grew adjusted EBITDA, 18% year over here and expect to expand margins in the second half of the year. We also generated cash flow from operations of $51 million during the quarter.
Our ability to successfully deliver on our customers' missions has allowed us to continue to win large strategic contracts in areas that are aligned with national security and global infrastructure priorities.
During the second quarter, we achieved a book to Bill ratio of 1.1 times on an enterprise basis, driven by a one three times book to Bill ratio in our critical infrastructure segment, marking the seventh consecutive quarter in which Chris critical infrastructure slipped to fill ratio has exceeded one point O times.
During the second quarter, we were awarded the following notable contracts.
$148 million contract value increase on our program management contract for the Riyadh Metro program, which is the largest metro system development project in the world.
And $99 million new contract win by Axa tour with classified customer after our acquisition closed on May 31st.
And $88 million of Recompete contract to provide enterprise construction management services for the department of energy National Nuclear Security Administration.
A new contract in Saudi Arabia, where it's over $75 million related to developing the fast growing entertainment sector to improve their quality of life as part of the Saudi vision 2030 program and a $75 million task order contract by a rail customer for infrastructure projects, we all.
Also one prime positions on to multiple award <unk> contracts with ceiling values of $10.095 billion.
Customers for these contracts are the defense Health agency and naval facilities Engineering systems Command respectfully.
After the second quarter ended we won two large middle east contracts with values that are being finalized.
We also won prime positions on two additional multiple award <unk> contract. One idea IQ is a classified contract with a $5 billion ceiling value over 10 years to provide offensive cyber operations.
Second idea. It you win is for the defense threat reduction agency assessment exercise and modeling and simulation support contract with an $850 million ceiling over 10 years.
Overall contract award remains healthy and is particularly strong in our critical infrastructure segment.
Infrastructure spending in the middle East for our projects aligned with Saudi Arabias objective to diversify their economy remains strong.
In Canada, it's also investing in their future with multiple provinces accelerating major infrastructure programs.
The United States infrastructure spending remains healthy and it's only at the very beginning stages of an anticipated prolong increasing spending due to the passage of the infrastructure Bill in November 2021.
Well word activity in the federal solutions segment has been slower than anticipated over the last few quarters as clients are taking longer to evaluate an award proposals and protests have been increased.
However over the next two quarters, we expect several of our large proposals to be adjudicated and we anticipate an increase in overall contract award activity as the United States government Obligates appropriated funds.
In Federal solutions, we are fortunate to have won several large single award contracts over the past few years and we're focused on driving new task orders to these existing vehicles, which is resulting in our strong organic revenue growth.
We operate in wealth funded high priority markets, such as cyber space critical infrastructure protection and missile defense and we believe we will continue to win more than our fair share of contracts.
As noted previously we closed the 388 million dollar access where acquisition at the end of May.
We continue to effectively use our balance sheet to complete financially accretive acquisitions of companies, we know well and have revenue growth and adjusted EBITDA margin of 10% or more.
Except for expanse person's presence with a special operations command intelligence community and federal civilian customers.
It's just we're also provides new customer access at the department of state, whose budget is expected to grow over 10% from 2020 to 2025.
With strong capabilities in security and surveillance systems, biometrics and counter unmanned aircraft systems exit tour enhances our position in our critical infrastructure National security and training solutions markets benefiting both of Pearsons business segments.
This quarter, we opened a person's laboratory for development and integration called Palatin, where we already showcased extra tourists capabilities and discuss the synergies what the person's portfolio to customers and partners.
Extra tourists off to a strong start with its $99 million classified contract win and we are pleased to welcome their more than 900 employees to the person's family.
From an ESG perspective, Parsons was again recognized as a top 50 employer by minority engineer magazine, where we were honored by the Washington business Journal as one of the most diverse companies and employers in the Washington D C Metropolitan area.
In addition, our spring Valley remediation project one the Secretary of Defense Environmental Award for remediation of chemical warfare material in our Dubai Metro Route extension program, one of sustainable transport best consulting aboard.
Parsons was recognized as one of the top four companies and engineering news record 2022 rankings for both professional services and program management firms. These.
These rankings reflect our overall reputation in these markets and the value we provide in support of our customers' projects.
In summary, I am, especially encouraged by our progress this quarter and over the past year and optimistic about our future.
This quarter, yet again extends our track record of momentum starting since the back half of last year.
It is gratifying to see the hard work of our employees and the improvements we've made on our business over the last year, having a positive impact on our financial results.
We've delivered strong results across both of our segments, particularly during a time when the broader market is experiencing volatility and macroeconomic uncertainty.
Parsons is well positioned to take advantage of the growing budgets and opportunities that exist in both our critical infrastructure and national security markets and we expect our progress to continue as we further leverage the technical expertise of our talented employees.
With that I will turn the call over to Matt.
Vegetarian.
I wanted to be named the CFO for persons since joining the company last year I've had the opportunity to spend time with many of the engineers program managers functional leadership and the finance team have.
I continue to be amazed by the talent and experience of our team as we deliver on some of the most complex infrastructure defense and security projects for our customers.
I couldn't be more enthusiastic about the opportunity ahead, as we support to high growth markets.
Before I review the financials I want to thank George ball for his 14 years of service as our company's CFO enforced Mentorship to me over the last nine months, but look forward to continuing to work with him as a member of our board.
Now, let's turn to the financials.
I was curious indicated second quarter results were highlighted by strong organic and total revenue growth in both segments.
Total revenue for the second quarter of 2022 increased 15% from the prior year period and was up 9% on an organic basis.
Organic growth was driven by the ramp up on contract awards and $48 million of contribution from acquisitions, mainly black horse and extort.
The growth was partially offset by the previously discussed completion of our S. WPS contract, which is a $20 million negative impact to revenue per quarter through the first quarter of 2023.
SG&A expenses increased by $12 million, primarily due to higher acquisition expenses, including transaction related costs.
Adjusted EBITDA of $77 million increased 18% from the second quarter of 2021, and adjusted EBITDA margin increased to seven 7%.
These increases were driven primarily by stronger program performance and contributions from acquisitions.
I'll turn now to our operating segments, starting first with federal solutions, where second quarter revenue increased by $95 million or 21% from the second quarter of 2021.
This increase was driven by organic growth of 11% and approximately $48 million from acquisitions.
Organic growth was driven by the ramp up of recent contract awards and increased activity on existing contracts, partially offset by the $20 million from our SVP of contract completion.
Federal solutions, adjusted EBITDA increased $15 million or 46% from the second quarter of 2021.
Adjusted EBITDA margin increased 150 basis points to eight 9%.
These increases were driven primarily by stronger program performance and contributions from acquisitions.
Moving now to our critical infrastructure segment second quarter revenue increased by $34 million or 8% from the second quarter of 2021, all of which was organic.
This increase was driven primarily by the ramp up of recent contract awards increased hiring activity and stronger program performance.
Critical infrastructure, adjusted EBITDA decreased by $3 million or 10% from the second quarter of 2021, and adjusted EBITDA margin decreased to six 3%.
These decreases were driven primarily by investments in future growth cost adjustments on legacy programs and program completions.
We expect these costs to normalize and margins to expand in the second half of the year.
Next I'll discuss cash flow and balance sheet metrics.
Our net DSO at the end of Q2 was 72 days compared to 67 days at the end of the second quarter of 2021, and 76 days at the end of Q1 2022.
Our second quarter operating cash flow totaled $51 million, which includes $8 million of extra toward transaction related payments.
The decrease from the one or $404 million, we reported in the second quarter of 2021 was due to the timing of cash receipts in the middle East.
Operating cash flow for the six months of 2022 totaled $25 million compared to $38 million in the prior year period.
Consistent with typical typical seasonality patterns, we expect cash flow to be strong in the second half of the year to get us to the midpoint of our 2022 guidance range.
Capital expenditures totaled $9 million in the second quarter of 2022 compared to $5 million in the prior year period.
This increase was primarily due to planned investments related to our recent large critical infrastructure contract win.
Our balance sheet remains strong as we ended the quarter with a net debt leverage ratio of 2.0 times, which includes the impact from the $388 million purchase price for <unk>.
Turning to bookings for the second quarter, we reported contract awards of $992 million, representing a book to Bill ratio of 1.0 times.
On a trailing 12 month basis, our book to Bill ratio is also 1.0 times.
Our backlog at the end of the second quarter totaled $8 $2 billion in line with first quarter of 2022, and total backlog continues to represent a little more than two years of annual revenue.
Now, let's turn to our guidance.
We are increasing our 2022 revenue and adjusted EBITDA guidance ranges to reflect our strong organic operating performance in the first half of the year our outlook for the remainder of the year and our exit of our acquisition.
We are reiterating our cash flow guidance as first half results were in line with our expectations and cash flow generated by extra tours will be offset by transaction related outflows.
For 2022, we are increasing our revenue range by $250 million to $3 95 to $4 one $5 billion.
This represents 11% growth at the midpoint of the range and reflects both our strong organic growth as well as approximately $150 million of contribution from that store.
We are increasing our adjusted EBITDA range to between 330 and $360 million, which includes approximately $15 million from Ecuador.
Our margin is eight 5% at the midpoint of our revenue and our adjusted EBITDA guidance ranges.
As indicated earlier, we are reiterating our cash flow guidance of $240 million to $280 million and free cash flow conversion is expected to remain at approximately 100% of adjusted net income.
As it relates to second half 2022 revenue, we expect total revenue in the third and fourth quarters to grow approximately 9% to 10% over their respective prior year periods.
In terms of adjusted EBITDA, we expect year over year growth of 8% to 12% for both the third and fourth quarters with a higher growth rate in the fourth quarter to get to the midpoint of the 2022 guidance range.
For operating cash flow, we continue to expect sequential improvements throughout the balance of the year consistent with our typical quarterly cadence.
Other key assumptions in connection with our 2022 guns have also been updated and are outlined on slide 10 in today's Powerpoint presentation.
With that I'll turn the call back to Gary.
Thank you Matt.
I'm very pleased with our second quarter results, we generated significant organic revenue growth in both business segments and delivered adjusted EBITDA and cash flow results in line with our expectations. Our leadership team is delivering consistent results and capitalizing on increasing budgets, we've shifted from a place where we were focused on stay.
The life in the business to a position, where we're transforming parsons into an industry leader, we remain laser focused on growing our top line and improving margins and cash flow. So we can continue to drive shareholder value.
As always I would like to thank our entire team for their tireless efforts and dedication to our customers' missions. Our employees are the foundation of our business and we could not have achieved our goals without their ongoing commitment to operational excellence with that well now open the line for questions.
Thank you and we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
Using a speakerphone please pick up your handset before pressing the keys.
Charlie a question. Please press Star then two.
And our first question today will come from Sheila <unk> with Jefferies. Please go ahead.
Hi, Good morning, guys and congrats to both now and George.
Terry your revenue guidance by 250 million with 100 million from organic can you maybe talk about you know a restart up organic growth really kicking in what trends and what's sort of improved here.
You know are there any other contract completions that we should be aware of and just what's going on in the different end markets within federal.
Sure. So thank you Sheila for that question, what's really kicked in on the organic growth side is we had won a lot of single contract awards over the past two years and they were all with greater than $100 million most of them around 500 million. So what we've been able to do is drive task orders onto those single award I D.
IQ contracts, what's important to know about those is they are very much aligned with national security needs. At this time, so they're focused on cyber space missile Defense C. Five ISR and critical infrastructure protection all important areas for the department of Defense. We've also seen some improvement and contract.
Such as our F. A H contract and our Kwajalein contract and that's on the federal side on their critical infrastructure side. The big organic revenue growth driver has been in the middle East and we expect that to continue the middle East has accelerated their programs both as a part of Saudi vision 2030, but also based on the strong one.
All prices they've been moving those programs to the left and we've been fortunate to win four large contracts right out the gate.
Great and then I just wanted to ask on bookings being a little bit lighter in the quarter. I think you mentioned an improvement in the second half and how.
How much of revenue visibility do you have versus at this time in the quarter, you know historically and.
But things should we be looking out for for F. S. Specifically.
Sure. So we do have good revenue visibility and again I'll go back to those large contracts that we've already won because we've got the ceiling values. Then that's already been awarded we're just driving task orders. So that's very strong for US I would think you know book to Bill is interesting in its revenue the matter of some we're just really proud of the fact that we've been able to drive such.
Strong revenue the best since IPO and really industry, leading book to Bill is inherently lumpy. So if we get a large award like AR team's missile defense contract in a quarter. It obviously goes up but I'd say overall, we're pleased with where we are and mostly what these single award contracts.
If you look at our backlog also I was going to highlight we've been able to move unfunded to funded backlog and our funded backlog is up in federal 18% year over ear.
So much for that.
That.
Thank you Sheila.
And our next question will come from Tobey Sommer with Truest. Please go ahead.
Hey, good morning. This is actually Jasper bibb on for Tobey. Thanks for taking our questions. So there's just been a pretty impressive acceleration in connected communities the past few quarters.
You could provide a bit more color on your progress on that business and what your expectations are going forward.
Yes, it wasn't connected communities, we've been fortunate to win some new business. We've won it across the board I mean, we've had rail and transit wins, we've also had aviation wins.
So I would say that's been the biggest one and also not having write downs a large write downs like we did a year ago.
Okay, and then I just wanted to ask about the exit for acquisition.
You speak to the Recompete profile of that business and then what opportunities you're seeing with giving access to the department of state to this customer.
I caught the first part, but I missed the second part to re competes and what was the second part of your question.
Our new opportunities with giving access to the department of state that's customer.
Certainly so on the <unk> piece, they have very low recompete percentage. Fortunately most of their large contracts were secured and they run out between seven to 10 years and about that's largely with the department of state the opportunities that we see there is most of the work that ex toward performances with diplomatic security.
And we have more capabilities that we can provide with diplomatic security director and as you look across our all of our core competencies are weak.
Can actually enhance our counter UAS solution with signals intelligence, our radio frequency in our radar capability. We can provide additional capabilities in biometrics, what's our back office processing capability and also cyber security is a major focus area for department of State and then if you look beyond diplomatic security.
There's as our director of it so that we have not done work with a great example would be overseas building office.
Then we can bring our critical infrastructure team to bear so we see a growth potential not just with the current part of department of state.
Across the department of state.
Okay makes sense thanks, everyone.
Thank you.
And our next question will come from Bert <unk> with Stifel. Please go ahead hey.
Good morning, and congratulations to Matt and to George I'm glad I got a small dose of George's encyclopedic knowledge before he departed.
Thanks Bert.
So so Carrie maybe first one for you you noted a $15 million increase in EBITDA, but 100 billion in organic sales for the year or so.
I think that essentially assumes no additional EBITDA beyond the what you acquired with <unk> is there a reason for that updated outlook has a or is that just a conservative view that you've taken as you update guidance.
Well first thanks for the question Bert were always focused as you are aware on providing measured guidance. It's very important to us we're happy with the margin growth that we've had year to date at seven 7% to get to the midpoint, we need to be in the low 99, 3% for Cornell GARP structure nine 2% for federal for the.
The rest of the year. We also did have a project change order on a non consolidated joint venture that George mentioned last quarter and this is overall a good thing because its additives EBITDA, but it will be spread over the next three years and that change order for the year will be 7 million $2 5 million for this quarter overall, we're very.
<unk> that we can achieve the midpoint if you look at historically and what we did last year, we had eight 8% in Q3 nine 6% in Q4 and again, it's really just about providing measured guidance that we're going to achieve.
Makes sense, Thanks, Kerry and just as a follow up you noted increased traction in the Middle East with project Awards rising at least what you guys noted in the presentation do you expect this to ultimately be the largest growth lever and critical infrastructure. Clearly you are getting the benefit from U S and Canadian infrastructure, there too and then just a sort of a follow on.
Are there similar question on the missile defense side do you expect any incremental tailwind from the state Department approving 5 billion in missile defense system for the UAE and Saudi Arabia.
Sure. So the first one is I would say in the short term that middle East is gonna be a significant driver for us and that's really just because of the infrastructure Bill will take a little more time to rollout with the middle East has done has pulled their programs left and that's why we've been able to win for a major awards recently, Canada is ahead of us.
United States, because the Canadian infrastructure Bill was passed in 2016. So they were kind of already in full run rate mode. We're starting to see funds from the infrastructure Act. We've already received upticks on several of our federal contracts such as with FAA with Amtrak.
But those funds, what we expected and planned for a largely to start more in 'twenty three type of timeframe.
As far as missile defense and the uptake. So we do a couple of things there in the UAE and Saudi Arabia, we have a contract with the Army Corps, where we're involved in supporting some of the systems implementation installation design, so that would be for like if they are buying new souter Patriot system. So I would expect that we will get more opportunity there.
The biggest opportunity for some missile defense just focused on the Endo paid com area really on defense of Guam, and so that's been an uptick for us.
Thanks, Gary and congrats on that.
Thanks, Bert Thank you.
Our next question will come from Gavin Parsons with Goldman Sachs. Please go ahead.
Hey, good morning, and congrats to you on that in Georgia.
Kevin.
Cares about it I want to spend a little bit more time on critical infrastructure margins. If you could you know Cary you mentioned, what you need to see in the back half of the year to get to the guide but.
Margins each kind of drag you.
Each of the last few quarters, where theyre more charges there this quarter and maybe give us a little more detail what the headwinds were what gives you confidence in being able to get that.
That growth.
Yeah. Thanks, Kevin So first overall the adjusted EBITDA dollars were in line with our expectations and were holding our organic EBIT dollar guidance, but I would put them into three buckets. The first category is investment in growth I talked about the middle east projects that we've been able to win but what we needed to do was step up our leadership team.
And also have people in place that we're ready to perform Monday, one of winning that work. So we spent some investment there a bid and proposal money mobilization as well as recruiting.
The second category and these are all three equal kind of on margin. The second category is cost growth on the three legacy programs that we've talked about for a while on the call I'm happy to and our cost growth on those three by the way they were all not material. So there was no one that hit our materiality threshold of five.
But the cost growth on those programs. The first one a program. We have completed is up in operations. So that one we're kind of down to two the second program. We're still on track as we've indicated for the last year to wrap up at the end of this year. The third one is the only one that goes into next year, we are starting to.
See those write downs minimize the again no significant charges. This quarter. So the program execution is improving on those efforts. The third category was program completions, we had some programs wrap up in the Middle East and then smaller ones in North America, but the ones that we've been awarded in the Middle East will replace those that have wrapped up in north.
America.
Great. Okay. That's helpful.
Oh, no federal solutions growth can you just give us an update on where the COVID-19 impacted programs like claws, you are tracking to close or below normalized now and.
How much revenue each contributed.
So we're going against you.
Yes, there are definitely fully up and ramping in fact, there pre COVID-19 levels.
Those were very strong contributors in engineered systems for this quarter.
The FAA contract in particular, because they've already started to receive some of the infrastructure Act funding is up and running.
And as far as the second part, yes. So those I think each one contributed about $20 million of additional revenue for the quarter.
Okay, and maybe just one last one on visibility in.
Federal.
You mentioned that you do have good visibility due to much higher idea to ceilings and then you just need to get the task orders on them.
I know you guys don't recognize those backlogs that way.
Is there a way we could think about how much that ceiling is up over the last few years just given the total reported backlog hasn't moved much over the last few years.
We've won and have about probably.
6 billion that we have not yet booked or put into backlog.
Okay. Thank you all.
Thank you.
And our next question will come from Josh Sullivan with the Benchmark company. Please go ahead.
Hey, good morning, Gary.
Congratulations George.
Thanks, Josh.
What is the long term strategy just between the balance of services and hardware you know looking at the theatre acquisition.
Really biometrics counter UAV cross opportunities with the current portfolio should we expect to see more products and hardware down the road and then how might that influence the long term margin profile.
Yeah, So our focus really I'm being an integrated solutions provider and that's where we've been focused and that's where all of our M&A have been it basically moves us up the value chain and that's what's enabled us to bid prime and win these larger jobs.
From a product portfolio, we are a predominantly software products and I think you can expect to see that continue not just on the federal side, but also the critical infrastructure side of the house, we do have some hardware product offerings, but it's really software that we're focused on.
Got it.
What do you see the look recruitment is.
As large tech companies, so often somebody already or are you seeing any measurable increase in labor availability.
Well first I'll say, we're really proud of our recruitment for the past year. If you look at quarter two over quarter, one which was a strong quarter. We actually grew 21% on hiring if you look at the first half of this year or the second half of last year, which was very strong we grew 20%.
Sun and May and June were our best hiring months since IPO I'll say part of that is from tech companies, but not all of that is from tech companies. Overall I think our team is just doing a really good job I'm recruiting.
Great. Thank you for that Doug.
Thank you.
And our next question.
He would like to ask a question. Please press Star then one our next question will come from Cai von <unk> with Cowen. Please go ahead.
Thanks, So much and let me join everyone in welcoming that can drive to George.
So you know.
I'm a little confused with fed solutions I mean, your pattern was the same as booz and lighthouse with much.
Much better revenues and I think everyone expected and pretty anemic bookings that yet we know that the FY 'twenty two budget was very generous.
So and where there are mixed.
<unk> comments in terms of what we should expect for the Q3, but are we going to see like a super blowout budget flush in Q3, what's your expected expectation for fed solutions Q3 bookings.
Yeah. Thanks Kai So again book to Bill is inherently lumpy I'm not expecting a super flush in Q3, it depends really when these large program awards get adjudicated. We do have 11 billion are waiting notice of award so which is a big number for us and within that.
We have 19 programs that are greater than 100 million. So it's really gotten depend on the timing of those we also have 410 million that is a protest and $350 million of that is federal solutions. So once again, it really depends on when and how those protests get adjudicated bookings are always very.
Tough to predict and that's why I'm really proud of the fact that we don't have to depend on that because we have these IDI cues and we can drive the task orders to them.
Yeah.
Thank you and then you also mentioned you had the four multi award <unk> choose to in the quarter or two after.
Do you expect I mean, I assume you don't book any of those you only book the task orders what does the task order.
<unk> been on those and what's kind of the expectation.
Yeah. So those four were just awarded so we don't yet have any task orders. There was one task order on the defense threat reduction contract that I mentioned that has been protested so that is in our protests to other than that we if they're just too new.
Great.
Last one is.
As you know and say I see has this contract Vanguard with department of state that I guess is gonna be re competed a broken up is that an opportunity first day tour.
It is an opportunity that we're looking at yes.
Okay. Thank you very much.
Thanks, Scott Thank you.
And once again, if you'd like to ask a question. Please press Star then one.
Our next question will come from Louie Dipalma with William Blair. Please go ahead.
[laughter], Terry Matt and Dave Good morning.
Good morning.
George and Matt Congrats on your new roles and great job everyone. The result my.
My question relates to how last year, you won several contracts such as the $618 million.
E O I S task order.
Thank you on the $2 billion of Ferro mine contract program and.
Separate $550 million or so of classified contract where.
Were those three contracts the key drivers for your 9%.
Ganic growth this quarter.
The two that were the main drivers were see CMS and see us.
Great and have.
Have these large contracts that you won last year carry have they.
Fully ramped or should we expect continued growth over the next coming quarters from them.
So we're at a pretty good run rate right now and see CMS that was the first contracts booked. She also is picking up the pace and the other ones are in the same fashion. They are picking up the pace. We have roughly 10 of these IDI cues that we're driving single driving task orders too because they're all single award contracts, but T C L.
Yes would be the one that I say has the best run rate at this time, which you would expect because it was awarded first.
Great.
And for the ex N or acquisition I mean, you have highlighted how their solutions are.
Utilized for critical infrastructure.
<unk>, how does X eight are positioning Parsons for.
Infrastructure Bill opportunities as like cyber security for critical critical infrastructure.
Topic right now.
Yeah, Great question. So in the infrastructure App, there's 115 billion that's for cyber M. Resiliency any component that gets funded with an infrastructure bill as opposed to have cyber resiliency tied to it and built into the system based on the work that axa toward does and critical infrastructure protection.
We're already starting to leverage their qualification. So if you think about rail and transit systems or airports or port those are all going to require a security and that's where we take ex tore can have a good profitable play.
Great and final one what does the overall infrastructure Bill related pipeline look like right now some of your peers have said that the funds have been like very celebrity deliberate in terms of being dispersed.
Or do you expect like the pace of activity to have to ramp from here and what are you seeing overall.
Yes, so we're starting to see some and it's mostly federal level because it gets to federal first then it takes a little longer flow down through state and local but we have seen some funds being applied they do kind of get blurred because for for example, if you're off a a and you have a budget for facilities.
That budget gets blurred sort of with the infrastructure funds and all the work that we're performing a like whiteside could use Amtrak or I could use the Washington Metro as an example formula funds are rolling out already existing grant programs are already being applied new grant programs are being stood up but again from a planning purpose.
We've always said 2023 would be when we'd expect to see a bigger ramp.
Sounds good. Thanks. Thanks Kerry thanks, everyone. Thank you know like things like flu.
And that's all the time, we have for questions. Today. So this will conclude our question and answer session I would like to turn the conference back over to David Bailey for any closing remarks.
Thank you for joining us. This morning, if you have any questions. Please don't hesitate to give me a call and we look forward to speaking with many of you over the coming weeks and with that we'll end today's call have a great day.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.
Okay.
[music].
Yeah.
Yeah.
Okay.
[music].
Hum.
[music].
Yeah.
[music].
[music].
Yeah.
[music].
Mhm.
Yeah.
Yeah.
[music].
Hum.
[music].
Yeah.
Yeah.
Okay.
[music].
Yeah.
Yeah.