Q1 2026 Parsons Corp Earnings Call

April 29, 2026

Operator: Thank you for standing by and welcome to Parsons Corporation's Q1 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star one one again. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, David Spille, Senior Vice President, Investor Relations. Please go ahead, sir.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you'll need to press star 11 on your telephone.

Speaker #1: If your And now I'd like to introduce your host for today's program, David Spille, Vice President and Investor Relations. Please go ahead, sir.

Speaker #1: question has been answered, and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded.

Speaker #2: Good morning. And thank you for joining us today to discuss our first quarter 2026 financial results. Please note that we provide a presentation slide on the investor relations section of our website.

David Spille: Good morning, and thank you for joining us today to discuss our Q1 2026 financial results. Please note that we provide the presentation slides on the investor relations section of our website. On the call with me today are Carey Smith, Chair, President, and CEO, and Matt Ofilos, CFO. Today, Carey will discuss our corporate strategy and operational highlights, then Matt will provide an overview of our Q1 financial results, as well as a review of our 2026 guidance. We 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.

Speaker #2: On the call with me today are Carey Smith, Chair President and CEO, and Matt Ofilos, CFO. Today, Carey will discuss our corporate strategy and operational highlights, and then Matt will provide an overview of our first quarter financial results, as well as a review of our 2026 guidance.

Speaker #2: 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.

Speaker #2: 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.

David Spille: 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 31 December 2025 and other SEC filings. Please refer to our earnings press release for Parsons' complete forward-looking statement 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. We remind you that these non-GAAP financial measures are not a substitute for the comparable GAAP measures. Please refer to our earnings press release and presentation slides for a reconciliation of the non-GAAP financial measures. Now I'll turn the call over to Carey.

Speaker #2: These risk factors are described in our Form 10-K for fiscal year ended December 31, 2025, and other SEC filings. Please refer to our earnings press release for PARSON's complete forward-looking statement disclosure.

Speaker #2: We do not undertake any obligation to update forward-looking statements. Management will also make reference to non-gap financial measures during this call. We remind you that these non-gap financial measures are not a substitute for the comparable gap measures.

Speaker #2: Please refer to our earnings press release and presentation slides for reconciliation of the non-gap financial measures. And now we'll turn the call over to Carey.

Speaker #3: Thank you, Dave. Good morning. Welcome to Parsons' first quarter 2026 earnings call. I want to begin by recognizing the dedication and performance of Parsons' more than 21,000 employees who delivered a strong start to the year.

Carey Smith: Thank you, David. Good morning. Welcome to Parsons' Q1 2026 earnings call. I want to begin by recognizing the dedication and performance of Parsons' more than 21,000 employees who delivered a strong start to the year. Most importantly, I'm pleased to share that our 7,500 team members in the Middle East region have remained safe during the current regional conflict. They've shown tremendous resilience in managing volatility while continuing to deliver our customers' critical missions. As we'll discuss later in the call, our Middle East business produced solid financial results this quarter, and I am very proud of what the team has achieved. As demonstrated by the current military operations, our differentiated solutions spanning cyber, electronic warfare, air-based defense, counter-unmanned aerial systems, and intelligence and operations centers are vitally important to protecting both our nation's and our allies' security.

Speaker #3: Most importantly, I'm pleased to share that our 7,500 team members in the Middle East region have remained safe during the current regional conflict. They've shown tremendous resilience in managing volatility, while continuing to deliver our customers' critical missions.

Speaker #3: As we'll discuss later in the call, our Middle East business produced solid financial results this quarter, and I am very proud of what the team has achieved.

Speaker #3: As demonstrated by the current military operations, our differentiated solutions spanning cyber, electronic warfare, air-based defense, counter-manderial systems, and intelligence and operations centers are vitally important to protecting both our nations and our allies' security.

Carey Smith: Post-conflict, Parsons is prepared to support the Middle East on its path to recovery by providing essential capabilities, including critical infrastructure protection, air-based defense, integrated air and missile defense, transportation solutions, and the reconstruction of conflict-affected areas. We believe Parsons is well positioned to advance allied priorities with our nearly 70 years in the region, extensive footprint and performance reputation. We are proud of the work we do in defense, security, and infrastructure for our global customers. Q1 highlighted the resilience of our business and our team's high level of execution as we delivered our highest adjusted EBITDA margin ever, reached record levels for both total and funded backlog, achieved a robust book-to-bill ratio of 1.4 times in both segments, and generated record Q1 cash flow.

Carey Smith: Post-conflict, Parsons is prepared to support the Middle East on its path to recovery by providing essential capabilities, including critical infrastructure protection, air-based defense, integrated air and missile defense, transportation solutions, and the reconstruction of conflict-affected areas. We believe Parsons is well positioned to advance allied priorities with our nearly 70 years in the region, extensive footprint and performance reputation. We are proud of the work we do in defense, security, and infrastructure for our global customers. Q1 highlighted the resilience of our business and our team's high level of execution as we delivered our highest Adjusted EBITDA margin ever, reached record levels for both total and funded backlog, achieved a robust book-to-bill ratio of 1.4 times in both segments, and generated record Q1 cash flow.

Speaker #3: Post-conflict, Parsons has prepared to support the Middle East on its path to recovery by providing essential capabilities, including critical infrastructure protection, air-based defense, integrated air and missile defense, transportation solutions, and the reconstruction of conflict-affected areas.

Speaker #3: We believe PARSON is well-positioned to advance allied priorities with our nearly 70 years in the region, extensive footprint, and performance reputation. We are proud of the work we do in defense, security, and infrastructure, for our global customers.

Speaker #3: The first quarter highlighted the resilience of our business and our team's high level of execution, as we delivered our highest adjusted EBITDA margin ever.

Speaker #3: Reached record levels for both total and funded backlog. Achieved a robust book-to-bill ratio of 1.4 times in both segments, and generated record first quarter cash flow.

Speaker #3: Revenue performance was in line with our expectations, and we continue to complement our organic growth with strategic accretive acquisitions that enhance our differentiation and drive long-term shareholder value.

Carey Smith: Revenue performance was in line with our expectations, and we continue to complement our organic growth with strategic, accretive acquisitions that enhance our differentiation and drive long-term shareholder value. Looking at our Q1 financials in more detail, total revenue increased by 8% and organic revenue grew 3%, excluding our confidential contract. This total revenue growth was driven by 12% growth in our Federal Solutions segment and 3% growth in Critical Infrastructure. Our record-adjusted EBITDA margin of 10.1% was driven by a 10.8% margin in Critical Infrastructure, marking our highest Q1 performance in that segment. The 50 basis points of margin expansion at the corporate level in Q1 builds on the 40 basis points of expansion we delivered in Q1 2025.

Carey Smith: Revenue performance was in line with our expectations, and we continue to complement our organic growth with strategic, accretive acquisitions that enhance our differentiation and drive long-term shareholder value. Looking at our Q1 financials in more detail, total revenue increased by 8% and organic revenue grew 3%, excluding our confidential contract. This total revenue growth was driven by 12% growth in our Federal Solutions segment and 3% growth in Critical Infrastructure. Our record-Adjusted EBITDA margin of 10.1% was driven by a 10.8% margin in Critical Infrastructure, marking our highest Q1 performance in that segment. The 50 basis points of margin expansion at the corporate level in Q1 builds on the 40 basis points of expansion we delivered in Q1 2025.

Speaker #3: Looking at our first quarter financials in more detail, total revenue increased by 8% and organic revenue grew 3%, excluding our confidential contract. This total revenue growth was driven by 12% growth in our federal solutions segment and 3% growth in critical infrastructure.

Speaker #3: Our record adjusted EBITDA margin of 10.1% was driven by a 10.8% margin in critical infrastructure, marking our highest first quarter performance in that segment.

Speaker #3: The 50 basis points of margin expansion at the corporate level in Q1 builds on the 40 basis points of expansion we delivered in the first quarter of 2025.

Speaker #3: In addition, we significantly exceeded our cash flow target and closed the quarter with record total and funded backlog of $9.3 billion and $6.6 billion, respectively.

Carey Smith: In addition, we significantly exceeded our cash flow target and closed the quarter with record total and funded backlog of $9.3 billion and $6.6 billion respectively. On the bookings front, contract awards increased 17% year-over-year, resulting in a strong book-to-bill ratio of 1.4x. Our Critical Infrastructure segment reported a book-to-bill of 1.4 for the quarter, marking 22 consecutive quarters above 1.0. Performance in the Middle East was outstanding with a book-to-bill ratio of 1.5. In Federal Solutions, contract awards increased 38% year-over-year, resulting in a book-to-bill ratio of 1.4x. These strong bookings provide a foundation for continued organic growth in both segments. A key driver of our future performance is the strategic importance of our contract wins.

Speaker #3: On the bookings front, contract awards increased 17% year over year, resulting in a strong book-to-bill ratio of 1.4 times. Our critical infrastructure segment reported a book-to-bill of 1.4 for the quarter, marking 22 consecutive quarters above 1.0.

Speaker #3: Performance in the Middle East was outstanding, with a book-to-bill ratio of 1.5. And in federal solutions, contract awards increased 38% year over year, resulting in a book-to-bill ratio of 1.4 times.

Speaker #3: These strong bookings provide a foundation for continued organic growth in both segments. A key driver of our future performance is a strategic importance of our contract wins.

Speaker #3: During the first quarter, we secured four single-award contracts valued at more than $100 million. These included a $593 million contract extension under the federal aviation administration's technical support services or TSSC-5 contract, with $410 million booked in Q1.

Carey Smith: During Q1, we secured 4 single award contracts valued at more than $100 million. These included a $593 million contract extension under the Federal Aviation Administration's Technical Support Services or TSSC V contract with $410 million booked in Q1. This award exercised the 1st option period, extends performance through 2030 and supports the FAA's Aviation System Capital Investment Plan. TSSC V has a $1.8 billion ceiling value with a 4-year base period and 2 3-year option periods. We received a production award notification from the United States Cyber Command for the Joint Cyber Hunt Kit Solution, a new sole source contract with a ceiling value of up to $500 million with $250 million booked in Q1.

Speaker #3: This award exercised the first option period, extends performance through 2030, and supports the FAA's aviation system capital investment plan. TSSC-5 has a 1.8 billion ceiling value, with a four-year base period in two three-year option periods.

Speaker #3: We received a production award notification from the United States Cyber Command for the joint cyber hunt kit solution. A new sole source contract with a ceiling value of up to $500 million with 250 million booked in Q1.

Carey Smith: Importantly, this contract was another transaction agreement which allows for faster, customized, and collaborative industry partnerships. Parsons is an industry leader in the use of these rapid delivery vehicles. We were awarded a new 5-year contract valued at over $340 million to provide program management services for a major transportation project in the Middle East, booking over $300 million in Q1. Our transportation work in the region spans rail and transit, roads and highways, bridges, airports, and intelligent transportation systems. We were awarded more than $145 million under the GARDEM contract. Under these task orders, Parsons will enhance command and control, space and intelligence surveillance and reconnaissance technologies for the Air Force and other federal customers. We will develop and sustain next-generation software, deliver on-site training, and rapidly deploy advanced mission applications.

Speaker #3: Importantly, this contract was another transaction agreement, which allows for faster, customized, and collaborative industry partnerships. PARSON is an industry leader in the use of these rapid delivery vehicles.

Speaker #3: We were awarded a new five-year contract valued at over $340 million to provide program management services for a major transportation project in the Middle East, booking over $300 million in Q1.

Speaker #3: Our transportation work in the region spans rail and transit, roads and highways, bridges, airports, and intelligent transportation systems. We were awarded more than $145 million under the GARDUM contract.

Speaker #3: Under these task orders, PARSON will enhance command and control, space, and intelligent surveillance and reconnaissance technologies for the Air Force and other federal customers.

Speaker #3: We will develop and sustain next-generation software, deliver on-site training, and rapidly deploy advanced mission applications. We book 38 million on these contracts during the first quarter.

Carey Smith: We booked $38 million on these contracts during Q1. We also received an additional $150 million on two contracts to continue serving as the main construction manager for remediation projects on the Faro Mine and Giant Mine programs in Canada, two of the largest and most complex mine reclamation projects in the world. We booked the full amount on these contracts during Q1. After Q1 ended, we received four more strategic federal awards previously unannounced. First, we were awarded $400 million for two other transaction agreements, each having a 3-year period of performance. This new work shows the continued demand for our mission-critical defense and intelligence capabilities and our ability to deliver solutions to our national security customer base rapidly.

Speaker #3: We also received an additional $150 million on two contracts to continue serving as the main construction manager for remediation projects on the Faro Mine and Giant Mine programs in Canada.

Speaker #3: Two of the largest and most complex mine reclamation projects in the world. We booked the full amount on these contracts during the first quarter.

Speaker #3: After the first quarter ended, we received four more strategic federal awards, previously unannounced. First, we were awarded $400 million for two other transaction agreements.

Speaker #3: Each has a three-year period of performance. This new work shows the continued demand for our mission-critical defense and intelligence capabilities and our ability to deliver solutions to our national security customers rapidly.

Speaker #3: Next, we were awarded a single award classified IDIQ contract with a ceiling value of $1484 million. Over seven years, that represents entirely new work for the company.

Carey Smith: Next, we were awarded a single award classified IDIQ contract with a ceiling value of $84 million over seven years that represents entirely new work for the company. We were awarded this contract based on our differentiated technology, including our unique biometrics capabilities. Finally, we were awarded an $87 million increase on its current national security prime contract. Importantly, in all of our federal solution wins, we are leveraging our artificial intelligence capabilities to enhance our solutions and create differentiated outcomes. I would now like to highlight some additional accomplishments during this quarter. We closed our acquisition of Altamira Technologies Corporation in an all-cash transaction valued at up to $375 million. Altamira advances high-priority national security missions supporting intelligence community and Department of Defense customers by providing multi-intelligence technology solutions and performing critical operations.

Speaker #3: We were awarded this contract based on our differentiated technology, including our unique biometrics capabilities. And finally, we were awarded an $87 million increase. On its current national security prime contract, importantly, in all of our federal solution wins, we are leveraging our artificial intelligent capabilities to enhance our solutions and create differentiated outcomes.

Speaker #3: I would now like to highlight some additional accomplishments during this quarter. We closed our acquisition of Altamira Technologies Corporation in an all-cash transaction valued at up to $375 million.

Speaker #3: Altamira advances high-priority national security missions supporting intelligence community and Department of War customers by providing and performing critical operations. Altamira expands PARSON's market presence in signals intelligence, missile warning, space, and foreign military exploitation, and adds critical customer depth with a national air and space intelligence center, national security agency, and other classified intelligence customers.

Carey Smith: Altamira expands Parsons’ market presence in signals intelligence, missile warning, space, and foreign military exploitation, and adds critical customer depth with the National Air and Space Intelligence Center, National Security Agency, and other classified intelligence customers. We were named one of the world’s most ethical companies by Ethisphere for the 17th consecutive year, and we were honored for our project excellence on two major infrastructure initiatives. In Georgia, our team received the Engineering Excellence Honor Award from the American Council of Engineering Companies for the Acres Mill Ramp Extension in Cobb County. Internationally, we were recognized with the Refurbishment and Retrofit Project of the Year at the Big Project Middle East Awards for our work on the King Abdullah Financial District Residential Uplift Project. Looking forward, we are optimistic about Parsons’ future.

Speaker #3: We were named one of the world's most ethical companies by Ethosphere for the 17th consecutive year, and we were honored for our project excellence on two major infrastructure initiatives.

Speaker #3: In Georgia, our team received the Engineering Excellence Honor Award from the American Council of Engineering Companies for the Acres Mill Ramp Extension and Cobb County.

Speaker #3: Internationally, we were recognized with the Refurbishment and Retrofit Project of the Year at the Big Project Middle East Awards for our work on the King Abdullah financial district residential uplift project.

Speaker #3: Looking forward, we are optimistic about PARSON's future. The synergies between our critical infrastructure and federal solutions segments, across six growing, profitable, and enduring end markets, set us apart and create significant opportunities for us to meet or exceed our financial goals.

Carey Smith: The synergies between our Critical Infrastructure and Federal Solutions segments across 6 growing, profitable, and enduring end markets set us apart and create significant opportunities for us to meet or exceed our financial goals. In Critical Infrastructure, we continue to see strong demand in both North America and the Middle East. Our focus on hard infrastructure, roads and highways, bridges, airports, rail and transit, and intelligent transportation systems is aligned with the spending priorities in these geographies. There's a need for urban development, support to major events, and advanced manufacturing that match our core competencies. Our 1-ranked program management, 3-ranked construction management, and AI-enabled solutions underpin our success. While we continue to monitor geopolitical developments, including the ongoing war in Iraq-Iran, our momentum and our customers' commitments to advancing their projects forward give us confidence in continued growth.

Speaker #3: In critical infrastructure, we continue to see strong demand in both North America and the Middle East. Our focus on hard infrastructure—roads and highways, bridges, airports, rail and transit, and intelligent transportation systems—is aligned with the spending priorities in these geographies.

Speaker #3: Also, there's a need for urban development, support to major events, and advanced manufacturing that match our core competencies. Our number one ranked program management, number three ranked construction management, and AI-enabled solutions underpin our success.

Speaker #3: While we continue to monitor geopolitical developments, including the ongoing war in Iraq, our momentum in our customers' commitments to advancing their projects forward give us confidence in continued growth.

Speaker #3: Although our business has not been affected by the conflict to date, our customers remain focused on ensuring their budgets are aligned with the right priorities and their programs are properly phased.

Carey Smith: Although our business has not been affected by the conflict to date, our customers remain focused on ensuring their budgets are aligned with the right priorities and their programs are properly phased. Across the Middle East, the emphasis on diversifying economies, hosting major global events, and addressing defense, security, and infrastructure requirements is expected to continue driving demand for our expertise. Turning to federal solutions, we are encouraged by the momentum in the United States defense spending. In fiscal year 2026, $1 trillion has been appropriated for defense, and we're beginning to see funds flow from both the base budget and reconciliation to industry. For fiscal year 2027, the administration has submitted a $1.5 trillion defense budget comprising a $1.15 trillion base and $350 billion in reconciliation funding.

Speaker #3: Across the Middle East, the emphasis on diversifying economies hosting major global events and addressing defense, security, and infrastructure requirements is expected to continue driving demand for our expertise.

Speaker #3: Turning to federal solutions, we are encouraged by the momentum in the United States Defense spending. In fiscal year 2026, $1 trillion has been appropriated for defense, and we're beginning to see funds flow from both the base budget and reconciliation industry.

Speaker #3: For fiscal year 2027, the administration has submitted a $1.5 trillion defense budget comprising a $1.15 trillion base and $350 billion in reconciliation funding. This proposed $44% increase over current funding levels, which is focused on modernization, would represent the largest defense budget in history.

Carey Smith: This proposed 44% increase over current funding levels, which is focused on modernization, would represent the largest defense budget in history. The fiscal year 2027 budget presents substantial opportunities for Parsons that are closely aligned with our strengths, including missile defense, cyber, space, counter-unmanned aerial systems, electronic warfare, facilities modernization, critical minerals, countering weapons of mass destruction, and joint all-domain command and control. Our purpose-built federal solutions portfolio is aligned with our nation's defense and security priorities, and because of our strategic acquisitions and sustained research and development investments, we've built differentiated capabilities that help safeguard our nation and outpace evolving threats. We are encouraged by the strong bipartisan commitment to increasing US defense spending in response to the evolving global security challenges.

Speaker #3: The fiscal year 2027 budget presents substantial opportunities for PARSONS that are closely aligned with our strengths, including missile defense, cyber, space, countermandarial systems, electronic warfare, facilities modernization, critical minerals, countering weapons of mass destruction, and joint all-domain command and control.

Speaker #3: Our purpose-built federal solutions portfolio is aligned with our nation's defense and security priorities, and because of our strategic acquisitions and sustained research and development investments, we've built differentiated capabilities that help safeguard our nation and outpace evolving threats.

Speaker #3: We are encouraged by the strong bipartisan commitment to increasing U.S. defense spending and response to the evolving global security challenges. Our leading indicators, including our $54 billion pipeline, strong win rates of 60%, total backlog of $9.3 billion—of which 71% is funded—and our $11 billion of contract wins not yet booked, give us confidence that we will continue to remain an industry growth leader excluding the impact of our confidential contract in both segments.

Carey Smith: Our leading indicators, including our $54 billion pipeline, strong win rates of 60%, total backlog of $9.3 billion, of which 71% is funded, and our $11 billion of contract wins not yet booked, give us confidence that we will continue to remain an industry growth leader, excluding the impact of our confidential contract in both segments. We operate in two large and well-funded segments across six end markets, our favorable financial outlook is supported by our proven execution and effective capital deployment. We are reaffirming our 2026 guidance ranges, which Matt will review shortly. In summary, we had a strong start to the year, delivering new records for adjusted EBITDA margin and total unfunded backlog, exceptional book-to-bill ratios in both segments, and record Q1 cash flow.

Carey Smith: Our leading indicators, including our $54 billion pipeline, strong win rates of 60%, total backlog of $9.3 billion, of which 71% is funded, and our $11 billion of contract wins not yet booked, give us confidence that we will continue to remain an industry growth leader, excluding the impact of our confidential contract in both segments. We operate in two large and well-funded segments across six end markets, our favorable financial outlook is supported by our proven execution and effective capital deployment. We are reaffirming our 2026 guidance ranges, which Matt will review shortly. In summary, we had a strong start to the year, delivering new records for Adjusted EBITDA margin and total unfunded backlog, exceptional book-to-bill ratios in both segments, and record Q1 cash flow.

Speaker #3: We operate in two large and well-funded segments across six end markets, and our favorable financial outlook is supported by our proven execution and effective capital deployment.

Speaker #3: We are reaffirming our 2026 guidance ranges, which Matt will review shortly. In summary, we had a strong start to the year, delivering new records for adjusted EBITDA margin and total unfunded backlog.

Speaker #3: Exceptional book-to-bill ratios in both segments, and record first-quarter cash flow. Our operational discipline, strategic contract wins, and additional corporate achievements reinforce our position as an industry leader.

Carey Smith: Our operational discipline, strategic contract wins, and additional corporate achievements reinforce our position as an industry leader. We remain optimistic about our future and are confident in our ability to drive long-term shareholder value. With that, I'll turn the call over to Matt to provide more details on our Q1 financial results. Matt?

Speaker #3: We remain optimistic about our future, and our confidence in our ability to drive long-term shareholder value. With that, I'll turn the call over to Matt to provide more details on our first-quarter financial results.

Speaker #3: Matt?

Speaker #2: Thank you, Carey. We've started 2026 with solid results and favorable forward-looking indicators toward future growth. With a strong book-to-bill in both segments, record adjusted EBITDA margins, and our highest total and funded backlog to date, we're well positioned to deliver for our customers and shareholders.

Matt Ofilos: Thank you, Carey. We've started 2026 with solid results and favorable forward-looking indicators toward future growth. With a strong book-to-bill in both segments, record adjusted EBITDA margins, and our highest total and funded backlog to date, we are well-positioned to deliver for our customers and shareholders. We continued to effectively deploy capital, investing in strategic acquisitions, internal research and development, and increased share buybacks, all to support long-term growth and create shareholder value. Turning to the details of our Q1 results, total revenue grew 8% and 3% on an organic basis, excluding the confidential contract. These increases were driven by growth in our critical infrastructure protection, space and missile defense, and transportation markets. Highlights included strong growth on key contract drivers for the year, such as Air Base Air Defense and the FAA TSSC V contract.

Matthew Ofilos: Thank you, Carey. We've started 2026 with solid results and favorable forward-looking indicators toward future growth. With a strong book-to-bill in both segments, record Adjusted EBITDA margins, and our highest total and funded backlog to date, we are well-positioned to deliver for our customers and shareholders. We continued to effectively deploy capital, investing in strategic acquisitions, internal research and development, and increased share buybacks, all to support long-term growth and create shareholder value. Turning to the details of our Q1 results, total revenue grew 8% and 3% on an organic basis, excluding the confidential contract. These increases were driven by growth in our critical infrastructure protection, space and missile defense, and transportation markets. Highlights included strong growth on key contract drivers for the year, such as Air Base Air Defense and the FAA TSSC V contract.

Speaker #2: We continue to effectively deploy capital, investing in strategic acquisitions, internal research and development, and increased share buybacks—all to support long-term growth and create shareholder value.

Speaker #2: Turning to the details of our first-quarter results, total revenue grew 8% and 3% on an organic basis excluding the confidential contract. These increases were driven by growth in our critical infrastructure protection, space and missile defense, and transportation markets.

Speaker #2: Highlights included strong growth on key contract drivers for the year, such as air-based air defense, and the FAA TSSC-5 contract. Total revenue, including the confidential contract, decreased 4% from the prior year period and was down 8% on an organic basis.

Matt Ofilos: Total revenue, including the confidential contract, decreased 4% from the prior year period and was down 8% on an organic basis. SG&A expenses for Q1 increased 10% from the prior year period, primarily driven by costs related to recent acquisitions and higher transaction expenses. Record Q1 adjusted EBITDA of $151 million increased 1% from the prior year period. Adjusted EBITDA margin expanded 50 basis points to a record 10.1%. These increases were driven by improved execution and contributions from accretive acquisitions. I'll turn now to our operating segments, starting first with the critical infrastructure, where Q1 revenue increased by 3% from Q1 2025. This increase was driven by organic growth of 2% and inorganic revenue contributions from our TRS and Applied Sciences acquisitions.

Matthew Ofilos: Total revenue, including the confidential contract, decreased 4% from the prior year period and was down 8% on an organic basis. SG&A expenses for Q1 increased 10% from the prior year period, primarily driven by costs related to recent acquisitions and higher transaction expenses. Record Q1 Adjusted EBITDA of $151 million increased 1% from the prior year period. Adjusted EBITDA margin expanded 50 basis points to a record 10.1%. These increases were driven by improved execution and contributions from accretive acquisitions. I'll turn now to our operating segments, starting first with the critical infrastructure, where Q1 revenue increased by 3% from Q1 2025. This increase was driven by organic growth of 2% and inorganic revenue contributions from our TRS and Applied Sciences acquisitions.

Speaker #2: SG&A expenses for the first quarter increased 10% from the prior-year period, primarily driven by costs related to recent acquisitions and higher transaction expenses.

Speaker #2: Record first-quarter adjusted EBITDA of $151 million increased 1% from the prior year period. Adjusted EBITDA margin expanded 50 basis points to a record 10.1%.

Speaker #2: These increases were driven by improved execution and contributions from accretive acquisitions. I'll turn now to our operating segments, starting first with the critical infrastructure, where first-quarter revenue increased by 3% from the first quarter of 2025.

Speaker #2: This increase was driven by organic growth of 2% and inorganic revenue contributions from our TRS and applied sciences acquisitions. Organic growth was primarily driven by strength in the global transportation markets.

Matt Ofilos: Organic growth was primarily driven by strength in the global transportation markets. As a reminder, Middle East revenues were negatively impacted by the number of workdays in Q1, given the holiday schedule compared to 2025. We expect this to resolve in Q2, where there are three additional workdays compared to the prior year. Critical Infrastructure adjusted EBITDA of $79 million increased 8% from Q1 2025, and adjusted EBITDA margin expanded 50 basis points to 10.8%. Both adjusted EBITDA dollars and margins were Q1 records for Critical Infrastructure. These increases were driven by the ramp-up of recent awards, accretive acquisitions, and strong program execution. Moving to our Federal Solutions segment, where Q1 revenue increased 12% and 4% on an organic basis, excluding the confidential contract.

Matthew Ofilos: Organic growth was primarily driven by strength in the global transportation markets. As a reminder, Middle East revenues were negatively impacted by the number of workdays in Q1, given the holiday schedule compared to 2025. We expect this to resolve in Q2, where there are three additional workdays compared to the prior year. Critical Infrastructure Adjusted EBITDA of $79 million increased 8% from Q1 2025, and Adjusted EBITDA margin expanded 50 basis points to 10.8%. Both Adjusted EBITDA dollars and margins were Q1 records for Critical Infrastructure. These increases were driven by the ramp-up of recent awards, accretive acquisitions, and strong program execution. Moving to our Federal Solutions segment, where Q1 revenue increased 12% and 4% on an organic basis, excluding the confidential contract.

Speaker #2: As a reminder, Middle East revenues were negatively impacted by the number of workdays in Q1, given the holiday schedule compared to 2025. We expect this to resolve in Q2, where there are three additional workdays compared to the prior year.

Speaker #2: Critical Infrastructure adjusted EBITDA of $79 million increased 8% from the first quarter of 2025, and adjusted EBITDA margin expanded 50 basis points to 10.8%.

Speaker #2: Both adjusted EBITDA dollars and margins were first-quarter records for Critical Infrastructure. These increases were driven by the ramp-up of recent awards, accretive acquisitions, and strong program execution.

Speaker #2: Moving to our federal solution segment, where first-quarter revenue increased 12% and 4% on an organic basis excluding the confidential contract. These increases were driven by growth in our critical infrastructure protection, space and missile defense, and transportation markets.

Matt Ofilos: These increases were driven by growth in our critical infrastructure protection, space and missile defense, and transportation markets. Total Federal Solutions revenue, including the confidential contract, decreased 10% from the prior year period and 17% on an organic basis. Federal Solutions adjusted EBITDA decreased 5% from the Q1 2025, while adjusted EBITDA margin expanded 40 basis points to 9.4%. The adjusted EBITDA dollars were primarily impacted by lower volume on the fixed-price confidential contract. The adjusted EBITDA margin increase was primarily driven by accretive contract growth and acquisitions. Next, I'll discuss cash flow and balance sheet metrics. Our net DSO at the end of Q1 2026 was 72 days, a 14-day increase from the prior year period. This increase was primarily driven by lower volume on the confidential contract and timing of collections in the Middle East.

Matthew Ofilos: These increases were driven by growth in our critical infrastructure protection, space and missile defense, and transportation markets. Total Federal Solutions revenue, including the confidential contract, decreased 10% from the prior year period and 17% on an organic basis. Federal Solutions Adjusted EBITDA decreased 5% from the Q1 2025, while Adjusted EBITDA margin expanded 40 basis points to 9.4%. The Adjusted EBITDA dollars were primarily impacted by lower volume on the fixed-price confidential contract. The Adjusted EBITDA margin increase was primarily driven by accretive contract growth and acquisitions. Next, I'll discuss cash flow and balance sheet metrics. Our net DSO at the end of Q1 2026 was 72 days, a 14-day increase from the prior year period. This increase was primarily driven by lower volume on the confidential contract and timing of collections in the Middle East.

Speaker #2: Total federal solutions revenue, including the confidential contract, decreased 10% from the prior year period and 17% on an organic basis. Federal solutions adjusted EBITDA decreased 5% from the first quarter of 2025, while adjusted EBITDA margin expanded 40 basis points to 9.4%.

Speaker #2: The adjusted EBITDA dollars were primarily impacted by lower volume on the fixed price confidential contract. The adjusted EBITDA margin increase was primarily driven by accretive contract growth and acquisitions.

Speaker #2: Next, I'll discuss cash flow and balance sheet metrics. Our net DSO at the end of Q1 2026 was $72 days, a 14-day increase from the prior year period.

Speaker #2: This increase was primarily driven by lower volume on the confidential contract and timing of collections in the Middle East. During the first quarter of 2026, we used $4 million of operating cash, which was an $8 million improvement from the prior year period.

Matt Ofilos: During Q1 2026, we used $4 million of operating cash, which was an $8 million improvement from the prior year period. Capital and expenditures totaled $15 million in Q1 2026. Looking ahead, we expect CapEx spend to ramp in Q2 as investments in classified facilities and upgrades to our enterprise systems accelerate to support Parsons' long-term growth and drive greater efficiency throughout the business. Trailing twelve-month free cash conversion was 102%, reflecting our disciplined focus on contract execution and collections. Our balance sheet remains strong as we ended Q1 with a net debt leverage ratio of 2.0x. This includes the impact of the upfront cash consideration of $330 million for the acquisition of Altamira in the quarter.

Matthew Ofilos: During Q1 2026, we used $4 million of operating cash, which was an $8 million improvement from the prior year period. Capital and expenditures totaled $15 million in Q1 2026. Looking ahead, we expect CapEx spend to ramp in Q2 as investments in classified facilities and upgrades to our enterprise systems accelerate to support Parsons' long-term growth and drive greater efficiency throughout the business. Trailing twelve-month free cash conversion was 102%, reflecting our disciplined focus on contract execution and collections. Our balance sheet remains strong as we ended Q1 with a net debt leverage ratio of 2.0x. This includes the impact of the upfront cash consideration of $330 million for the acquisition of Altamira in the quarter.

Speaker #2: Capital and expenditures totaled $15 million in the first quarter of 2026. Looking ahead, we expect capex spend to ramp in Q2 as investments in classified facilities and upgrades to our enterprise systems accelerate to support Parsons' long-term growth and drive greater efficiency throughout the business.

Speaker #2: Trailing 12-month free cash conversion was $102%, reflecting our disciplined focus on contract execution and collections. Our balance sheet remained strong as we ended the first quarter with a net debt leverage ratio of 2.0 times.

Speaker #2: This includes the impact of the upfront cash consideration of $330 million for the acquisition of AltaMira in the quarter. During Q1, we repurchased approximately $583,000 shares for an aggregate purchase price of $35 million.

Matt Ofilos: During Q1, we repurchased approximately 583,000 shares for an aggregate purchase price of $35 million. Turning next to bookings, in Q1, we secured $2 billion in contract awards, a 17% increase year over year, driving a strong enterprise book-to-bill ratio of 1.4x. On a trailing 12-month basis, our book-to-bill stood at 1.1x, which extends our track record of a trailing 12-month book-to-bill of 1.0 or greater for every quarter since the IPO. Both segments reported a book-to-bill ratio of 1.4x for the quarter. Our Critical Infrastructure segment continued its impressive streak with its 22nd consecutive quarter above 1.0, with particularly outstanding performance in the Middle East, where we achieved a book-to-bill ratio of 1.5x. In Federal Solutions, contract awards increased 38% year over year.

Matthew Ofilos: During Q1, we repurchased approximately 583,000 shares for an aggregate purchase price of $35 million. Turning next to bookings, in Q1, we secured $2 billion in contract awards, a 17% increase year-over-year, driving a strong enterprise book-to-bill ratio of 1.4x. On a trailing 12-month basis, our book-to-bill stood at 1.1x, which extends our track record of a trailing 12-month book-to-bill of 1.0 or greater for every quarter since the IPO. Both segments reported a book-to-bill ratio of 1.4x for the quarter. Our Critical Infrastructure segment continued its impressive streak with its 22nd consecutive quarter above 1.0, with particularly outstanding performance in the Middle East, where we achieved a book-to-bill ratio of 1.5x. In Federal Solutions, contract awards increased 38% year-over-year.

Speaker #2: Turning next to bookings, in the first quarter, we secured $2 billion in contract awards, a 17% increase year over year, driving a strong enterprise book-to-bill ratio of 1.4 times.

Speaker #2: On a trailing 12-month basis, our book-to-bill stood at 1.1 times, which extends our track record of a trailing 12-month book-to-bill of 1.0 or greater for every quarter since the IPO.

Speaker #2: Both segments reported a book-to-bill ratio of 1.4 times for the quarter. Our critical infrastructure segment continued its impressive streak with its 22nd consecutive quarter above 1.0, with particularly outstanding performance in the Middle East, where we achieved a book-to-bill ratio of 1.5 times.

Speaker #2: In federal solutions, contract awards increased 38% year over year. Our backlog at the end of the first quarter totaled $9.3 billion. A 3% increase from the prior year period.

Matt Ofilos: Our backlog at the end of Q1 totaled $9.3 billion, a 3% increase from the prior year period. Funded backlog of $6.6 billion remains the highest since our IPO and increased 7% year over year. At the end of Q1, our funded backlog represented 71% of total backlog. Now let's turn to our guidance. We are reiterating our 2026 guidance ranges provided on 11 February based on our financial results for Q1 2026 and our outlook for the remainder of the year. These guidance ranges are outlined in our earnings press release and PowerPoint presentation, both of which are located on our investor relations website. On slide 11 of our PowerPoint presentation, we also include other key assumptions in connection with our 2026 guidance, including quarterly cadences.

Matthew Ofilos: Our backlog at the end of Q1 totaled $9.3 billion, a 3% increase from the prior year period. Funded backlog of $6.6 billion remains the highest since our IPO and increased 7% year-over-year. At the end of Q1, our funded backlog represented 71% of total backlog. Now let's turn to our guidance. We are reiterating our 2026 guidance ranges provided on 11 February based on our financial results for Q1 2026 and our outlook for the remainder of the year. These guidance ranges are outlined in our earnings press release and PowerPoint presentation, both of which are located on our investor relations website. On slide 11 of our PowerPoint presentation, we also include other key assumptions in connection with our 2026 guidance, including quarterly cadences.

Speaker #2: Funded backlog of $6.6 billion remains the highest since our IPO and increased 7% year over year. At the end of Q1, our funded backlog represented $71% of total backlog.

Speaker #2: Now let's turn to our guidance. We are reiterating our 2026 guidance ranges provided on February 11th based on our financial results for the first quarter of 2026 and our outlook for the remainder of the year.

Speaker #2: These guidance ranges are outlined in our earnings press release and PowerPoint presentation. Both of which are located on our investor relations website. On slide 11 of our PowerPoint presentation, we also include other key assumptions in connection with our 2026 guidance, including quarterly cadences.

Speaker #2: 2026 guidance reflects the evolving budget environment, a competitive labor market, and the realities of a challenging government procurement landscape. While these factors present challenges, we're also benefiting from the tailwinds, including unprecedented global infrastructure spend, a federal portfolio that's tightly aligned with the administration's priorities, recompute risk of less than 3% of 2026 total revenue, and a record $9.3 billion in total backlog, including our highest funded backlog ever.

Matt Ofilos: 2026 guidance reflects the evolving budget environment, a competitive labor market, and the realities of a challenging government procurement landscape. While these factors present challenges, we're also benefiting from the tailwinds, including unprecedented global infrastructure spend, a federal portfolio that's tightly aligned with the administration's priorities, recompete risk of less than 3% of 2026 total revenue, and a record $9.3 billion in total backlog, including our highest funded backlog ever. On top of that, we have $11 billion in awarded contracts still to be booked, which further strengthens our outlook. We've lowered Q2 expectations due to the timing of recent wins. However, we continue to believe strong backlog and recent awards are supportive of growth projections in the full-year guidance.

Matthew Ofilos: 2026 guidance reflects the evolving budget environment, a competitive labor market, and the realities of a challenging government procurement landscape. While these factors present challenges, we're also benefiting from the tailwinds, including unprecedented global infrastructure spend, a federal portfolio that's tightly aligned with the administration's priorities, recompete risk of less than 3% of 2026 total revenue, and a record $9.3 billion in total backlog, including our highest funded backlog ever. On top of that, we have $11 billion in awarded contracts still to be booked, which further strengthens our outlook. We've lowered Q2 expectations due to the timing of recent wins. However, we continue to believe strong backlog and recent awards are supportive of growth projections in the full-year guidance.

Speaker #2: On top of that, we have $11 billion in awarded contracts still to be booked, which further strengthens our outlook. We have lowered second-quarter expectations due to the timing of recent wins.

Speaker #2: However, we continue to believe strong backlog and recent awards are supportive of growth projections in the full-year guidance. In summary, we delivered strong results for adjusted EBITDA margins, contract awards, total unfunded backlog, and our revenue was in line with expectations despite a complex global environment.

Matt Ofilos: In summary, we delivered strong results for adjusted EBITDA margins, contract awards, total unfunded backlog, and our revenue was in line with expectations despite a complex global environment. We can continue to deploy capital effectively, investing in organic growth opportunities, acquisitions, share repurchases to support our growth strategy. All of this reflects our disciplined execution, and we remain confident in our ability to achieve commitments and create long-term value for our shareholders by delivering critical capabilities for our customers around the world. With that, I'll turn the call back over to Carey.

Matthew Ofilos: In summary, we delivered strong results for Adjusted EBITDA margins, contract awards, total unfunded backlog, and our revenue was in line with expectations despite a complex global environment. We can continue to deploy capital effectively, investing in organic growth opportunities, acquisitions, share repurchases to support our growth strategy. All of this reflects our disciplined execution, and we remain confident in our ability to achieve commitments and create long-term value for our shareholders by delivering critical capabilities for our customers around the world. With that, I'll turn the call back over to Carey.

Speaker #2: We can continue to deploy capital effectively, investing in organic growth opportunities, acquisitions, and share repurchases to support our growth strategy. All of this reflects our disciplined execution, and we remain confident in our ability to achieve commitments and create long-term value for our shareholders by delivering critical capabilities for our customers around the world.

Speaker #2: With that, I'll turn the call back over to Carey.

Speaker #1: Thank you, Matt. This quarter's results underscore the strength and durability of the Parsons portfolio with the robust pipeline, high win rates, strong book-to-bill performance in both segments, record levels of total unfunded backlog, and $11 billion in contract wins awarded yet to be booked.

Carey Smith: Thank you, Matt. This quarter's results underscore the strength and durability of the Parsons portfolio with a robust pipeline, high win rates, strong book-to-bill performance in both segments, record levels of total unfunded backlog, and $11 billion in contract wins awarded and yet to be booked, we are confident in our outlook. With that, we will now open the line for questions.

Speaker #1: We are confident in our outlook. With that, we will now open the line for questions.

Speaker #3: Certainly. In our first question for today comes from the line of Sanjita Jain from KeyBank. Your question, please.

Operator: Certainly. Our first question for today comes from the line of Sangita Jain from KeyBank. Your question, please.

Operator: Certainly. Our first question for today comes from the line of Sangita Jain from KeyBanc. Your question, please.

Speaker #4: Good morning, Carey and Matt. Thanks for taking my question. First off, Carey, it's really good to hear that all your Parsons team members are safe.

Sangita Jain: Good morning, Carey and Matt. Thanks for taking my question. First off, Carey, it's really good to hear that all your Parsons team members are safe, and you had very strong Q1 results. Can you elaborate on some of the conversations you may be having with your customers about the balance between the short-term disruptions and the long-term opportunities?

Speaker #4: And you had very strong 1-Q results. Can you elaborate on some of the conversations you may be having with your customers about the balance between the short-term disruptions and the long-term opportunities?

Carey Smith: Certainly. Thanks, Sangeeta. Appreciate your question. As you mentioned, our first concern is always for the safety and security of our employees, and all 7,500 are safe and secure. Most importantly, all the employees are working on the job sites and in the offices. We really have not seen an impact to date. I will point out, too, the conflict has not delayed any of our funding. The Middle East exceeded their Q1 cash forecast. We have not seen any slower contract awards or pause in negotiations. That's clearly reflected by our strong 1.5x book-to-bill. We've not had any force majeure insurance claims. One thing that's good about our portfolio is that no Middle East program represents more than 1.6% of our revenue, and we have 20% of Middle East backlog.

Carey Smith: Certainly. Thanks, Sangita. Appreciate your question. As you mentioned, our first concern is always for the safety and security of our employees, and all 7,500 are safe and secure. Most importantly, all the employees are working on the job sites and in the offices. We really have not seen an impact to date. I will point out, too, the conflict has not delayed any of our funding. The Middle East exceeded their Q1 cash forecast. We have not seen any slower contract awards or pause in negotiations. That's clearly reflected by our strong 1.5x book-to-bill. We've not had any force majeure insurance claims. One thing that's good about our portfolio is that no Middle East program represents more than 1.6% of our revenue, and we have 20% of Middle East backlog.

Speaker #1: Certainly. Thanks, Sanjita. Appreciate your question. As you mentioned, our first concern is always for the safety and security of our employees and all 7,500 are safe and secure.

Speaker #1: Most importantly, all the employees are working on the job sites and in the offices; we really have not seen an impact to date. I will point out, too, the conflict has not delayed any of our funding.

Speaker #1: The Middle East exceeded their first-quarter cash forecast. We have not seen any slower contract awards or positive negotiations. That's clearly reflected by our strong 1.5 times book-to-bill.

Speaker #1: And we've not had any force majeure insurance claims. One thing that's good about our portfolio is that no Middle East program represents more than 1.6% of our revenue.

Speaker #1: And we have 20% of Middle East backlog. The contracts are pretty long in duration as well. The average contract duration is 4.7 years. And 49% of our revenue is tied to long-term frameworks.

Carey Smith: The contracts are pretty long in duration as well. The average contract duration's 4.7 years, and 49% of our revenue is tied to long-term frameworks. We're clearly holding our full year guidance for the Middle East of 8.5% organic. What we're seeing, Sangita, to your question, is that many of the GCC countries are using the periods of high oil prices to fund diversification into non-oil sectors and advanced technologies such as artificial intelligence and digital infrastructure, so that they're less vulnerable to future price swings. I do wanna point out that post-conflict, we believe there's gonna be significant investment in areas including redundancy and resiliency.

Speaker #1: And we're clearly holding our full-year guidance for the Middle East of 8.5% organic. What we're seeing, Sanjita, to your question, is that many of the GCC countries are using the periods of high oil prices to fund diversification into non-oil sectors.

Speaker #1: And advanced technology, such as artificial intelligence and digital infrastructure, so that they're less vulnerable to future price swings. I do want to point out that post-conflict, we believe there's going to be significant investment in areas including redundancy and resiliency.

Speaker #1: So not only will Parsons be doing our traditional areas of transportation, water, and environment, and urban development, but we're going to expand into prioritized areas including integrated air and missile defense, border security, counterimagine air system, critical infrastructure protection, water security and desalination, rail, pipeline security, and rebuild opportunities.

Carey Smith: Not only will Parsons be doing our traditional areas of transportation, water and environment, and urban development, but we're gonna expand into prioritized areas, including integrated air and missile defense, border security, Counter-Unmanned Air System, critical infrastructure protection, water security and desalination, rail, pipeline security, and rebuild opportunities. There's also a priority to take key assets into hardened underground facilities such as data centers, treatment plants, and military assets. Just reported on the defense front, it was 27 April, Arabian Gulf business indicated that the defense spending in the Middle East is expected to rise by 20% over the next 3 years.

Speaker #1: And there's also a priority to take key assets into hardened underground facilities, such as data centers, treatment plants, and military assets. Just reported on the defense front—it was April 27th—Arabian Gulf Business indicated that defense spending in the Middle East is expected to rise by 20% over the next three years.

Sangita Jain: That's super helpful, Carey. Maybe one for Matt. Can you talk about some of the puts and takes that went into your guidance since your FS margins have recovered really well and your CI margins are very strong, but you decided to keep the full year margin outlook unchanged? Can you help us walk through that?

Speaker #4: That's super helpful, Carey. And maybe one from Matt. Can you talk about some of the puts and takes that went into your guidance since your FS margins have recovered really well and your CI margins are very strong?

Speaker #4: But you decided to keep the full-year margin outlook unchanged. Can you help us walk through that?

Speaker #2: Yeah. Thanks, Sanjita. So to your point, really strong Q1 at 10 north of 10% margin, 10.1%. CI now has five straight quarters north of 10.

Matt Ofilos: Yeah. Thanks, Sangeeta. To your point, really strong Q1 north of 10% margin, 10.1%. CI now has 5 straight quarters north of 10, the performance there has been really strong. Obviously, still early in the year, 9.7% is, you know, 10 basis points this year, on the back of 110 basis points over the last couple of years. We're still, you know, bullish on our margin expansion opportunities over the next couple of years, obviously wanna be thoughtful. It's still early in the year. When we look at Fed, you know, Fed is 9.4% in Q1. We're high 8 to low 9s is kind of the target for us for the year. Infrastructure, we're 10.5 at the midpoint.

Matthew Ofilos: Yeah. Thanks, Sangita. To your point, really strong Q1 north of 10% margin, 10.1%. CI now has 5 straight quarters north of 10, the performance there has been really strong. Obviously, still early in the year, 9.7% is, you know, 10 basis points this year, on the back of 110 basis points over the last couple of years. We're still, you know, bullish on our margin expansion opportunities over the next couple of years, obviously wanna be thoughtful. It's still early in the year. When we look at Fed, you know, Fed is 9.4% in Q1. We're high 8 to low 9s is kind of the target for us for the year. Infrastructure, we're 10.5 at the midpoint.

Speaker #2: So the performance there has been really strong. Obviously, still early in the year, 9.7% is 10 basis points this year. But on the back of 110 basis points over the last couple of years.

Speaker #2: So we're still bullish on our margin expansion opportunities over the next couple of years. But obviously, we want to be thoughtful. It's still early in the year.

Speaker #2: When we look at Fed, Fed is 9.4 in Q1. We're high 8s, low 9s is kind of the target for us for the year.

Speaker #2: And then infrastructure, we're at $10.5 billion at the midpoint. So, $10.8 billion to start the year is a little bit better than total year expectations. But obviously, early in the year, we will expect, within federal, we'll have some additional growth and cost types.

Matt Ofilos: 10.8% to start the year is a little bit better than total year expectations. Obviously early in the year, we will expect, you know, within federal, we'll have some, you know, additional growth and cost types. We've talked previously about mix is always the biggest driver to Fed margins. Then on the infrastructure side, we had a little bit lighter passthroughs and materials in Q1, so a little bit of pressure there on margins. Again, early in the year, a great start to the year, but, you know, we'll watch over the next couple quarters.

Matthew Ofilos: 10.8% to start the year is a little bit better than total year expectations. Obviously early in the year, we will expect, you know, within federal, we'll have some, you know, additional growth and cost types. We've talked previously about mix is always the biggest driver to Fed margins. Then on the infrastructure side, we had a little bit lighter passthroughs and materials in Q1, so a little bit of pressure there on margins. Again, early in the year, a great start to the year, but, you know, we'll watch over the next couple quarters.

Speaker #2: We've talked previously about mix is always the biggest driver to Fed margins. And then on the infrastructure side, we had a little bit lighter pass-throughs in materials in Q1.

Speaker #2: So, a little bit of pressure there on margins. So again, early in the year—a great start to the year—but we'll watch over the next couple of quarters.

Sangita Jain: Great. Thank you so much.

Speaker #4: Great. Thank you so much.

Speaker #2: Thanks, Sanjita.

Matt Ofilos: Thanks, Sangita.

Matthew Ofilos: Thanks, Sangita.

Carey Smith: Thanks, Sangita.

Speaker #1: Thanks, Sanjita.

Operator: Our next question comes from the line of Sheila Kahyaoglu from Jefferies. Your question please.

Speaker #3: And our next question comes from the line of Sheila Quixote from Jefferies. Your question, please.

Operator: Our next question comes from the line of Sheila Kahyaoglu from Jefferies. Your question please.

Sheila Kahyaoglu: Good morning, guys, and thank you, Carey, Matt, Dave. Maybe Carey, can you just talk about the Middle East seems okay, but aside from that, how do you think about the H1 versus the H2 growth trends? What's really driving the upswing in the H2 and some of the major program drivers there?

Speaker #4: Good morning, guys, and thank you, Carey, Matt, Dave. Maybe Carey, can you just talk about—the Middle East seems okay, but aside from that, how do you think about the first half versus the second half growth trends?

Speaker #4: What's really driving the upswing in the second half? And some of the major program drivers there.

Speaker #1: Yeah. Thank you very much, Sheila, for the question. I appreciate it. So both we anticipate both of the segments to grow within the second half of the year.

Carey Smith: Yeah. Thank you very much, Sheila, for the question. I appreciate it. We anticipate both of the segments to grow within H2 of the year. What's driving it, let me start with Federal, are the new awards. We just highlighted the four awards, three of which were Federal, that occurred during Q1. Then the four awards that have already occurred after Q1 ended. Very strong start to the year for Federal. Also seeing significant growth on FAA. FAA, we achieved 25% growth in Q1, and we expect FAA to be strong throughout the year. I would highlight, besides the awards I mentioned during the call, areas such as munitions, Holston and Ammo, those programs are ramping up.

Speaker #1: What's driving it? And let me start with federal. Are the new awards? We just highlighted the four awards, three of which were federal that occurred during Q1 and then the four awards that have already occurred after Q1 ended.

Speaker #1: So very strong start to the year for federal. Also seeing significant growth on FAA. FAA, we achieved 25% growth in the first quarter. And we expect the FAA to be strong throughout the year.

Speaker #1: So I would highlight, besides the awards I mentioned, during the call, areas such as munitions, Holston and NAMO, those programs are ramping up. Also, a lot of classified work and other transaction agreements.

Carey Smith: Also, a lot of classified work and other transaction agreements, FAA, and then our Missile Defense Agency Teams contract, which we expect to achieve over 10% growth this year as we're supporting the important Golden Dome program. Within the critical infrastructure segment, I mentioned the Riyadh Metro, so we expect that to have a ramp-up in the latter H2. Within the North America group, we expect P-3s, particularly on the East Coast, to ramp up. Then we had some recent wins on the West Coast, including the LA Metro line A extension, the I-70 in Missouri, and the Silver Line in Texas. Probably a couple other programs I'll highlight in the Middle East would be Qiddiya, the entertainment city, as well as King Salman International Airport.

Speaker #1: FAA. And then our missile defense agency, TEAMS, contract, which we expect to achieve over 10% growth this year as we're supporting the important golden dome program.

Speaker #1: Within the critical infrastructure, segment, I mentioned the Riyadh Metro. So we expect that to have a ramp-up in the latter half of the year.

Speaker #1: Within the North America group, we expect P3s, particularly on the East Coast, to ramp up. And then we had some recent wins on the West Coast, including the LA Metroline, A Extension, the I-70 in Missouri, and the Silver Line in Texas.

Speaker #1: And probably a couple of other programs I'll highlight in the Middle East would be Qiddiyah, the entertainment city, as well as King Salmon International Airport.

Speaker #2: Yeah. And Sheila, the only other one I would add that it was we've talked previously about the joint cyber hunt kits. They're sealing tech.

Matt Ofilos: Sheila, the only one, the only other one I would add that is we've talked previously about the Joint Cyber Hunt Kit through SealingTech. That program is in LRIP, as you know, H2 will transition to production and have some critical deliveries before the end of the year. That's also benefiting H2.

Matthew Ofilos: Sheila, the only one, the only other one I would add that is we've talked previously about the Joint Cyber Hunt Kit through SealingTech. That program is in LRIP, as you know, H2 will transition to production and have some critical deliveries before the end of the year. That's also benefiting H2.

Speaker #2: That program is in El Rip, as you know. And so second half will transition to production and have some critical deliveries before the end of the year.

Speaker #2: So that's also benefiting the second half.

Speaker #4: Got it. And maybe to follow up, Matt, on that, you said Q2 is a little bit lower given award timing. Can you just give us a little bit more color on that?

Sheila Kahyaoglu: Got it. Maybe to follow up, Matt, on that, you said Q2 is a little bit lower given award timing. Can you just give us a little bit more color on that? What are you seeing in the outlay environment? Why was it lower?

Speaker #4: What are you seeing in the outlay environment? Why was it lower?

Speaker #2: Yeah. So some of the awards that Carey highlighted that came in start at Q2. We're kind of expected earlier in the year. Call it January, February.

Matt Ofilos: Yeah. Some of the awards that Carey highlighted that came in start of Q2 were kind of expected earlier in the year, call it January, February. We thought we'd be ramping on those. Additionally, some phasing within the Middle East. Middle East makes up about half of the reduction to Q2. That's really just phasing as we see the customers' prioritizations. Again, the H2 ramp on those awards is gonna benefit the Middle East business. Overall, again, the reductions are really kind of just phasing and timing of awards.

Matthew Ofilos: Yeah. Some of the awards that Carey highlighted that came in start of Q2 were kind of expected earlier in the year, call it January, February. We thought we'd be ramping on those. Additionally, some phasing within the Middle East. Middle East makes up about half of the reduction to Q2. That's really just phasing as we see the customers' prioritizations. Again, the H2 ramp on those awards is gonna benefit the Middle East business. Overall, again, the reductions are really kind of just phasing and timing of awards.

Speaker #2: So we thought we'd be ramping on those. Additionally, some phasing within the Middle East. Middle East makes up about half of the reduction to Q2.

Speaker #2: So that's really just phasing as we see the customers' prioritizations but again, the second half ramp on those awards is going to benefit the Middle East business.

Speaker #2: But overall, again, the reductions are really kind of just phasing and timing of awards.

Speaker #1: And it's super exciting to see the federal momentum that we had.

Carey Smith: It's super exciting to see the federal momentum that we had.

Speaker #4: Cool. Thank you. So helpful.

Sheila Kahyaoglu: Cool. Thank you. So helpful.

Carey Smith: Thanks, Sheila.

Speaker #1: Thanks, Sheila.

Matt Ofilos: Thank you.

Matthew Ofilos: Thank you.

Speaker #3: Thank you. And our next question comes from the line of John Gottin from City. Your question, please.

Operator: Thank you. Our next question comes from the line of John Gunn from Citi. Your question please.

John Gunn: Hey, guys. Thanks for taking my question. Maybe we could just revisit the $1.5 trillion budget. You described it as a generational investment, well aligned with the Parsons portfolio. Could you just elaborate on what's most exciting there for you? And then, you know, sort of a quick follow-up to that, obviously there's some concern about the $1.5 trillion budget going through. You guys don't have a perfect crystal ball, any thoughts on how, you know, that may play out as we just sort of form our own views?

Speaker #5: Hey, guys. Thanks for taking my question. Maybe we could just revisit the 1.5 trillion budget. You described it as a generational investment, well-aligned with the Parson portfolio.

Speaker #5: Could you just elaborate on what's most exciting there for you? And then sort of a quick follow-up to that. Obviously, there's some concern about the 1.5 trillion budget going through.

Speaker #5: You guys don't have a perfect crystal ball. But any thoughts on how that may play out as we just sort of form our own views?

Speaker #1: Yeah, thanks, John. Appreciate the question. As you mentioned, it is exciting. It is a generational investment. It's been recognized on a bipartisan basis that we're facing one of the most complex and dangerous threat environments in our nation's history, with adversaries advancing capabilities.

Carey Smith: Yeah. Thanks, John. Appreciate the question. As you mentioned, it is exciting. It is a generational investment. It's been recognized on a bipartisan basis that we're facing one of the most complex and dangerous threat environments in our nation's history with adversaries, advancing capabilities. The need for that budget is there. The budget's focused around three pillars, and I'll kind of hit on where Parsons plays in each of those pillars. The first one is supercharging America's defense industrial base. While that pillar talks about shipbuilding and air power, also within that pillar is a focus on critical minerals onshoring and energy independence in emerging technologies, both areas where Parsons plays. The area probably that's most important to us is the second pillar, securing America's military advantage in the homeland.

Speaker #1: And so the need for that budget is there. The budget's focused around three pillars. And I'll kind of hit on where Parsons plays in each of those pillars.

Speaker #1: The first one is supercharging America's defense industrial base. So why that pillar talks about shipbuilding and air power also within that pillar is a focus on critical minerals, onshoring, and energy-independence in emerging technologies, both areas where Parsons plays.

Speaker #1: The area probably it's most important to us is the second pillar, securing America's military advantage in the homeland. Counterimman air systems and autonomy are going to see big increases of greater than 70 billion on the top line for drone dominance and counterimman air systems.

Carey Smith: Counter-Unmanned Air Systems and autonomy are going to see big increases of greater than $70 billion on the top line for DroneArmor and Counter-Unmanned Air Systems. The Pacific Deterrence Initiative is going to increase from $10 billion to $11.7 billion, $3 billion of that is aligned to infrastructure improvements. In cybersecurity, there is going to be over $20 billion of additional funding. There is Artificial Intelligence, $58.5 billion of investment in AI, as well as Joint All-Domain Command and Control. There is going to be a significant hike in both procurement and Research, Development, and Technology overall, particularly in the space area, which is going to be more than double the 2026 enacted level. Missile Defense is a budget priority. Missile Defense Agency is to receive $17.9 billion.

Speaker #1: The Pacific deterrence initiative is going to increase from 10 billion to 11.7 billion. And 3 billion of that is aligned to infrastructure improvements. In cybersecurity, there's going to be over 20 billion of additional funding.

Speaker #1: There's artificial intelligence, 58.5 billion of investment in AI, as well as joint all-domain command and control. And then there's going to be a significant hike in both procurement and research development and technology overall, and particularly in the space area which is going to be more than doubled in 2026 in active level.

Speaker #1: Missile defense is a budget priority. Missile defense agencies to receive 17.9 billion. And then if you look at golden dome, that's supposed to receive 17 billion.

Carey Smith: If you look at Golden Dome, that's supposed to receive $17 billion, that would be within the budget. The next pillar focuses on securing America's military readiness. We play in two areas there. The first one is modernizing the nuclear triad. We're involved in nuclear command control and communications. The second area is in improving the infrastructure for our war fighters, which is right up our alley. Overall, I'd say, you know, looking at a procurement increase of 85% and RD&T increase of 63% is good. As you mentioned, it's not for certain. I'd say in particular, the discussion right now is over the reconciliation bill. Reconciliation 2.0 is moving forward. The future's not real clear yet.

Speaker #1: That would be within the budget. The next pillar focuses on securing America's military readiness. And we play in two areas there. The first one is modernizing the nuclear triad.

Speaker #1: We're involved in nuclear command, control, and communications. And the second area is in improving the infrastructure for our warfighters, which is right up our alley.

Speaker #1: So overall, I'd say looking at a procurement increase of 85% and RD&T increase of 63% is good. As you mentioned, it's not for certain.

Speaker #1: And I'd say in particular, the discussion right now is over the reconciliation bill. Reconciliation, 2.0, is moving forward. But the future is not real clear yet.

Speaker #1: Speaker Johnson is planning on a floor vote sometime this week, which would be based on the senator's the Senate's budget resolution. But there's a discrepancy between some of the House Republicans, someone added additional items that are election-related and additional DHS provisions.

Carey Smith: Speaker Johnson is planning on a floor vote sometime this week, which would be based on the Senate's budget resolution. There's a discrepancy between some of the House Republicans. Some wanna add additional items that are election related and additional DHS provisions. Other Republicans are recommending that the skinny vote basically be passed. I would say this week we expect the next step on the reconciliation to see whether or not the Senate and House do pass the identical reconciliations, which would move that bill forward.

Speaker #1: In other Republicans, recommending that the skinny vote basically be passed. So I would say this week, we expect the next step on the reconciliation to see whether or not the Senate and House do pass the identical reconciliations, which would move that bill forward.

John Gunn: That was excellent. Thank you. If I could just ask one totally separate question on M&A. You guys closed 3 deals in the last 12 months and a relatively large one just recently. Can you just, you know, refresh us on M&A pipeline, thoughts from here and how we should be thinking about the M&A strategy maybe for the next 12 or 24 months? Thanks.

Speaker #3: That was excellent. Thank you. And if I could just ask, one totally separate question on M&A. You guys closed three deals in the last 12 months.

Speaker #3: And of relatively large one, just recently, can you just refresh us on M&A pipeline thoughts from here and how we should be thinking about the M&A strategy maybe for the next 12 or 24 months?

Speaker #3: Thanks.

Speaker #1: Yeah. Thanks, John. So M&A remains our number one focus for capital deployment. As you mentioned, we closed three deals last year, followed by a deal, the first quarter of this year.

Carey Smith: Yeah. Thanks, John. M&A remains our number 1 focus for capital deployment. As you mentioned, we closed 3 deals last year, followed by a deal the Q1 of this year. We anticipate this year we'll close between 2 to 4 deals. We've got a strong pipeline in both federal and critical infrastructure. We continue to keep our high bar of growing greater than 10% on the top line, greater than 10% EBITDA margin. We're continuing with our strategy of preemptive as well. We like to get with companies that we know well, that we've worked with. We have a similar mission and culture, and that way we're more certain for success after the integration of those assets. You can expect to see us continue to focus most of our capital on M&A. I think it's been a significant differentiator for the company.

Speaker #1: We anticipate this year we'll close between two to four deals. We've got a strong pipeline in both federal and critical infrastructure. We continue to keep our high bar of growing greater than 10% on the top line, greater than 10% EBITDA margin.

Speaker #1: We're continuing with our strategy of preemptive as well. We like to get with companies that we know well, that we've worked with. We have a similar mission and culture.

Speaker #1: And that way, we're more certain for success after the integration of those assets. So you can expect to see us continue to focus most of our capital on M&A.

Speaker #1: I think it's been a significant differentiator for the company. In fact, as I look over those the federal wins that I cited on the script, I would say many of those are due to the fact of our revenue synergies that we've been able to drive across the federal business.

Carey Smith: In fact, as I look over those, the federal wins that I cited on the script, I would say many of those are due to the fact of our revenue synergies that we've been able to drive across the federal business.

John Gunn: That was excellent. Thank you so much.

Speaker #3: That was excellent. Thank you so much.

Speaker #2: Thanks, John.

Matt Ofilos: Thanks, John.

Matthew Ofilos: Thanks, John.

Speaker #1: Thank you.

Carey Smith: Thank you.

Operator: Thank you. Our next question comes from the line of Andrew Wittmann from Baird. Your question, please.

Speaker #3: Thank you. And our next question comes from the line of Andrew Whitman from Baird. Your question, please.

Andrew Wittmann: Great. Thanks for taking my questions, and good morning. I just, Matt, I just wanted to help understand the quarter a little bit better. The holiday timing in the Middle East, how did that affect? Can you quantify the effect or estimate the effect on the growth rates in the CI segment for the quarter? Then how much of the benefit you're gonna pick up here in Q2, just to understand those moving pieces a little bit more clearly.

Speaker #4: Great. Thanks for taking my questions and good morning. Matt, I just wanted to help understand the quarter a little bit better. The holiday timing in the Middle East, how did that affect?

Speaker #4: Can you quantify the effect or estimate the effect on the growth rate in the CI segment for the quarter? And then how much of the benefit you're going to pick up here in the second quarter?

Speaker #4: Just to understand those moving pieces a little bit more clearly.

Speaker #2: Yeah. It was about three days from Q1 to Q2. So think of it as 10 to 15 million dollars of impact so we had a little bit of a headwind in Q1.

Matt Ofilos: It was about 3 days from Q1 to Q2, so think of it as $10 to 15 million of impact. We had a little bit of a headwind in Q1. Nice part for, you know, when we originally guided to Q1 for Middle East, we were expecting flattish to down a bit. It actually came in up 2.5%. You know, a little bit of strong start to the year for the Middle East and, you know, some tailwinds into Q2.

Matthew Ofilos: It was about 3 days from Q1 to Q2, so think of it as $10 to 15 million of impact. We had a little bit of a headwind in Q1. Nice part for, you know, when we originally guided to Q1 for Middle East, we were expecting flattish to down a bit. It actually came in up 2.5%. You know, a little bit of strong start to the year for the Middle East and, you know, some tailwinds into Q2.

Speaker #2: The nice part for when we originally guided to first quarter for Middle East, we were expecting flattish to down a bit. It actually came in up two and a half percent.

Speaker #2: And so a little bit a strong start to the year for the Middle East. And some tailwinds into Q2.

Speaker #4: Got it. Okay. And then Carrie, on the 11 billion of awarded but unbooked, that number has been pretty steady there. Is that getting worked down?

Andrew Wittmann: Got it. Okay. Carey, on the $11 billion of awarded but unbooked, that number's been pretty steady there. Is that getting worked down and then just gonna get replenished to the same level, or is it kind of stagnant? I'm just kind of curious as to the dynamics of what's going on in there.

Speaker #4: And then just can you replenish to the same level? Or is it kind of stagnant? I'm just kind of curious as to the dynamics of what's going on in there.

Speaker #1: Yeah. Great question, Andy. So what we did is we moved the FAA work, which we booked for 410. So that basically moved out of where it had not booked.

Carey Smith: Yeah, great question, Andy. What we did is we moved the FAA work, which we booked for $410. That basically moved out of a way, awarded not booked. As you saw by the announcements that we made of the stuff that we've already won post Q1, we're gonna be well over that. That number's gonna go right back up as we go into the next quarter. I think the important thing as well is to look at our book-to-bill ratios, which very strong again across the board. 1.4 for Parsons, 1.4 for federal and critical infrastructure, and our backlog of $9.3 billion, and then add to that $11 billion. Again, the $11 billion, to your point, is gonna be replenished by these new awards.

Speaker #1: But as you saw by the announcements that we made of the stuff that we've already won post-Q1, we're going to be well over that.

Speaker #1: So that number is going to go right back up as we go into the next quarter. So I think the important thing as well is to look at our book-to-bill ratios, which very strong again across the board, 1.4 per persons, 1.4 for federal and critical infrastructure, and our backlog of 9.3 billion.

Speaker #1: And then add to that 11 billion. And again, the 11 billion to your point is going to be replenished by these new awards.

Speaker #4: Okay. And then I guess maybe just one final thing, just on cash flow, Matt. Your contract assets number, so your unbilled or contract assets, cash that you've got, or that you don't have that work that you performed, is up a decent amount.

Andrew Wittmann: I guess maybe just one final thing, just on cash flow, Matt. Your contract assets number, so your unbilled or contract assets, cash that you've got or that you don't have, that work that you performed is up a decent amount. Maybe you could just drill into that a little bit. Is this a certain types of work that you're starting to perform in greater amounts today? Is this a geographic thing with somebody that, you know, you're working for and have that asset? It's sticking out and that with the DSOs up a little bit, obviously there's a seasonal effect there. I think just digging into some of these working capital pieces would be interesting to just understand those dynamics.

Speaker #4: Maybe you could just drill into that a little bit. Is this a certain types of work that you're starting to perform in greater amounts today?

Speaker #4: Is this a geographic thing with somebody that you're working for and have that asset? It's sticking out with the DSOs up a little bit.

Speaker #4: Obviously, there's a seasonal effect there. I think just digging into some of these working capital pieces are would be interesting to just understand those dynamics.

Speaker #2: Yeah. Good question, Andy. So to your point, DSO was up about 14 days, which is a good number. And so overall, really happy with the cash performance in Q1.

Matt Ofilos: Yeah, good question, Andy. To your point, DSO was up about 14 days, which is, you know, a good number. Overall, really happy with the cash performance in Q1. We do have a higher, you know, balances. A lot of it is related in the federal business to milestones on some of the munitions projects that it will deliver over the next 2 quarters. I expect that number to come down over the next 2 quarters. I don't think it will continue to expand. I think, you know, when we get into production on the Cyber Hunt Kits, we may have a little bit of fluctuation, but not to the same scale. I'd say the biggest driver has been the munitions programs and the upcoming milestones there.

Matthew Ofilos: Yeah, good question, Andy. To your point, DSO was up about 14 days, which is, you know, a good number. Overall, really happy with the cash performance in Q1. We do have a higher, you know, balances. A lot of it is related in the federal business to milestones on some of the munitions projects that it will deliver over the next 2 quarters. I expect that number to come down over the next 2 quarters. I don't think it will continue to expand. I think, you know, when we get into production on the Cyber Hunt Kits, we may have a little bit of fluctuation, but not to the same scale. I'd say the biggest driver has been the munitions programs and the upcoming milestones there.

Speaker #2: We do have a higher balances, a lot of it is related in the federal business to milestones on some of the munitions projects that we'll deliver over the next two quarters.

Speaker #2: So I expect that number to come down over the next two quarters. I don't think it will continue to expand. I think when we get into production on the cyber hunt kits, we may have a little bit of fluctuation, but not to the same scale.

Speaker #2: So I'd say the biggest driver has been the munitions programs. And the upcoming milestones there.

Speaker #4: Okay. All right. Thank you very much.

Andrew Wittmann: Okay. All right. Thank you very much.

Speaker #1: Thanks, Andy.

Carey Smith: Thanks, Andy.

Speaker #2: Thank you.

Operator: Thank you. Our next question comes from the line of Gavin Parsons from UBS. Your question, please.

Speaker #3: Thank you. And our next question comes from the line of Gavin Parsons from UBS. Your question, please.

Speaker #5: Thank you. Morning.

Gavin Parsons: Thank you. Morning.

Speaker #2: Good morning, Gavin.

Carey Smith: Morning, Gavin.

Gavin Parsons: Carey, how big is your CUAS business, and are you seeing any accelerated procurement yet given Middle East learnings?

Speaker #5: Carrie, how big is your CUAS business? And are you seeing any accelerated procurement yet given Middle East learnings?

Speaker #1: Yeah. So the big part of that kind of our UAS, we have two components. One is our non-kinetic business. And that mostly goes through the Army 10-CAP program.

Carey Smith: Yeah. The big part of the counter-UAS, we have two components. One is our non-kinetic business, and that mostly goes through the Army TENCAP program. And as I mentioned, it's deployed in the Middle East right now. The second part of it is our DroneArmor, which is a system of systems. And that's basically, it's a technology readiness level 9 that's been deployed. It is currently deployed in Laredo on the southern border. If I pull those two components out, I would guess probably $100 million-ish if I had to make an estimate. Yes, we see growth-

Speaker #1: And as I mentioned, it's deployed in the Middle East right now. The second part of it is our drone armor, which is a system of systems.

Speaker #1: And that's basically it's a technology readiness level nine that's been deployed is currently deployed in Laredo on the southern border. So if I pull those two components out, I would guess probably 100 million-ish if I had to make an estimate.

Speaker #1: Yes, we see growth as far as the we see future growth as far as the Middle East. So we were brought in the Middle East originally to fix another company system that was not working.

Gavin Parsons: What about-

Carey Smith: We see future growth as far as the Middle East. We were brought in the Middle East originally to fix another company system that was not working, so our system had basically replaced that. There's ongoing demand. We also see demand within the United States. There's a couple of procurements that we're waiting on award from Department of Homeland Security, Customs and Border Protection, and the Coast Guard.

Speaker #1: So our system had basically replaced that. And there's ongoing demand. We also see demand within the United States. There's a couple of procurements that we're waiting on award from the Department of Homeland Security and Customs and Border Protection.

Speaker #1: And the Coast Guard.

Gavin Parsons: The ABAD contracts, I think that might also possibly fall in that category. I mean, is that just Europe and Africa? Are there other geographical opportunities?

Speaker #5: The ABAD contract? I think that might also possibly fall in that category. I mean, is that just Europe and Africa? Are there other geographical opportunities?

Speaker #1: Yeah. That's a great point, Gavin. I didn't include that in the number. I just threw out. But they're a base air defense contract. That's roughly a billion dollars over five years.

Carey Smith: Yeah, that's a great point, Gavin. I didn't include that in the number I just threw out. Their Air Base Air Defense contract. That's roughly $1 billion over 5 years, and we're on a run rate to achieve that. If I throw that in the Counter-Unmanned Air System, it's much higher. We think Air Base Air Defense is going to continue to increase within the region as well as within INDOPACOM. Our contract within Europe has rapidly expanded. It's currently being used for early warning for the Middle East activities.

Speaker #1: And we're on a run rate to achieve that. So if I throw that in the counter, I'm in air system. It's much higher. We think air-based defense is going to continue to increase within the region as well as within Indo-Pacom.

Speaker #1: Our contract within Europe is rapidly expanded. It's currently being used for early morning for the Middle East activities.

Speaker #5: Got it. Thank you very much.

Gavin Parsons: Got it. Thank you very much.

Operator: Thank you. Our next question comes from the line of Gautam Khanna from TD Securities. Your question, please.

Speaker #3: Thank you, and our next question comes from the line of Gautam Khanna from TDC Securities. Your question, please.

Speaker #6: Yeah. Thanks. Good morning, guys.

Gautam Khanna: Yeah, thanks. Good morning, guys.

Speaker #1: Good morning, Gautam.

Carey Smith: Morning, Gautam.

Matt Ofilos: Morning, Gautam.

Matthew Ofilos: Morning, Gautam.

Speaker #2: Good morning, Gautam.

Speaker #6: I was wondering, what's the latest on the FAA program that Periton won? I didn't know if much work has come your way yet. And what's your latest expectation on that?

Gautam Khanna: Was wondering what's the latest on the FAA program that Raytheon won? I didn't know if much work has come your way yet. You know, what's your latest expectation on that?

Speaker #1: Yeah. So just to recap, we've been spraying the FAA for over five decades. We've supported them for 24 years on the technical support service contract.

Carey Smith: Just to recap, we've been supporting the FAA for over 5 decades. We've supported them for 24 years on the technical support service contract. The FAA just issued our extension for 3 years, 1 full year early, indicating their intent to fully use that contract. Under that contract, we provide engineering and design support, installation, and integration services. We do project construction management and also technical logistics and field support. Importantly, we've supported about 1,000 FAA sites. We have people pretty much everywhere embedded in the facilities and equipment work that occurs with the National Airspace System, whether it's radars, navigation aids, communications, surveillance, and automation towers. We do the terminal radar approach control system. There are route traffic control centers and much more.

Speaker #1: The FAA just issued our extension for three years, one full year early. Indicating their intent to fully use that contract under that contract, we provide engineering and design support, installation, integration services, we do project construction management, and also technical logistics and field support.

Speaker #1: Importantly, we've supported about 1,000 FAA sites. So we have people pretty much everywhere embedded in the facilities and equipment work that occurs with the National Airspace System, whether it's radars, navigation aids, communications, surveillance, automation, towers.

Speaker #1: We do the terminal radar approach control system. There are route traffic control centers and much more. Our FAA revenue, as I mentioned, is projected to grow at 25% this year.

Carey Smith: Our FAA revenue, as I mentioned, is projected to grow at 25% this year on the just the TSSC contract. We were at 25% for Q1. We also had additional growth in FAA on areas like voice communication switches and some contracts that we have outside the TSSC, putting us at around a 35% growth rate. In addition to the legacy work that we've performed on the TSSC, we're starting to perform work for the implementation of the new air traffic control system. That work includes voice communication, automation, and training systems. We've been working very closely with Raytheon. We have an associate contractor agreement as well as with the FAA. Both the FAA and Raytheon want to continue to use Parsons as the implementer for that work.

Speaker #1: On just the TSSC contract, and we were at 25% for the first quarter. We also had additional growth in FAA on areas like voice communication switches and some contracts that we have outside the TSSC, putting us at around a 35% growth rate.

Speaker #1: In addition to the legacy work that we've performed on the TSSC, we're starting to perform work for the implementation of the new air traffic control system.

Speaker #1: And that work includes voice communication, automation, and training systems. We've been working very closely with Periton. We have an associate contractor agreement as well as with the FAA.

Speaker #1: Both the FAA and Periton want to continue to use Parsons as the implementer for that work.

Gautam Khanna: I just wanted to also circle back to the Q2 commentary. It sounded like bookings have been pretty strong to start the quarter. What would you expect? Do you have a view on what book-to-bill could be in the Q2 based on what's in the pipeline and what you've already been awarded?

Speaker #6: And I just wanted to also circle back to the Q2 commentary. It sounded like bookings have been pretty strong to start the quarter. What would you expect?

Speaker #6: Do you have a view on what book-to-bill could be in the second quarter based on what's in the pipeline and what you've already been awarded?

Speaker #2: Yeah. To your point, Gautam, really strong start to the year. We are expecting north of 1.0 again at the Parsons level in Q2.

Matt Ofilos: Yeah. To your point, Gautam, really strong start to the year. We are expecting north of 1.0 again at the Parsons level in Q2.

Matthew Ofilos: Yeah. To your point, Gautam, really strong start to the year. We are expecting north of 1.0 again at the Parsons level in Q2.

Speaker #6: Okay. And within the segments, is there any skew? Is one particularly strong relative to the other?

Gautam Khanna: Okay. Within the segments, is there any skew? Is one particularly strong relative to the other?

Speaker #2: Not really. I think they'll both just be around one or better. I don't think we'll see another one four necessarily, but I think they're both in a good place to be north of one.

Matt Ofilos: Not really. I think they'll both just be, you know, around one or better. I don't think we'll see another.

Matthew Ofilos: Not really. I think they'll both just be, you know, around one or better. I don't think we'll see another.

Gautam Khanna: Okay. Sure

Matt Ofilos: 1, another 1 4 necessarily, but I think they're both in a good place to be north of 1.

Matthew Ofilos: 1, another 1 4 necessarily, but I think they're both in a good place to be north of 1.

Carey Smith: critical infrastructure, 22 consecutive quarters greater than 1.0, and our trailing 12 month as a company has been over 1.0 since IPO.

Speaker #1: And again, critical infrastructure, 22 consecutive quarters, greater than 1.0. And our trailing 12-month as a company has been over 1.0 since IPO.

Carey Smith: critical infrastructure, 22 consecutive quarters greater than 1.0, and our trailing 12 month as a company has been over 1.0 since IPO.

Gautam Khanna: Great. I mean, obviously, you touched on the Middle East business being more resilient than I think people worry about. At what point do you start to worry about this? I mean, I'm just curious in terms of, you know, does it disrupt the pace of contract awards? I know you mentioned there's a long duration to the backlog there, but you know, I'm just curious, at what point should we worry? It does seem like an overhang.

Speaker #6: Great. And then you did, I mean, obviously, you touched on the Middle East business, being more resilient than I think people worry about. At what point do you start to worry about this?

Speaker #6: I mean, I'm just curious in terms of does it disrupt the pace of contract awards? I know you mentioned there's a long duration to the backlog there, but I'm just curious, at what point should we worry?

Speaker #6: Because it does seem like an overhang.

Carey Smith: Yeah. Again, I would say we're not worried. The work that we're performing there is critical infrastructure work, and now we've actually added additional defense capabilities supporting the war. Hitting on the critical infrastructure work, for 60% of our work is in Saudi Arabia. The Public Investment Fund just released their priority six ecosystems this week. Whether it's tourism, travel, and entertainment, urban development, advanced manufacturing, industrials and logistics, clean energy, NEOM, we play in every single one of those areas. They also reiterated that they're gonna maintain all giga projects. They don't see any cancellations. There's only been minor rephasing of programs, but they've got to get ready to be on the world stage, which is gonna be 2030 for the Expo, 2034 for the World Cup.

Speaker #1: Yeah. Again, I would say we are not worried. The work that we're performing there is critical infrastructure work. And now we've actually added additional defense capabilities supporting the war.

Speaker #1: Hitting on the critical infrastructure work for 60% of our work is in Saudi Arabia. The public investment fund just released their priority six ecosystems this week.

Speaker #1: So whether it's tourism, travel, and entertainment, urban development, advanced manufacturing, industrials, and logistics, clean energy, neon, we play in every single one of those areas.

Speaker #1: They also reiterated that they're going to maintain all giga projects. I don't see any cancellations. So there's only been minor rephasing of programs, but they've got to get ready to be on the world stage which is going to be 2030 for the Expo, 2034 for the World Cup.

Speaker #1: And I'll point out in Saudi Arabia, importantly, 80% of the investment is going to be deployed within Saudi Arabia. We've been there for seven decades.

Carey Smith: I'll point out in Saudi Arabia, importantly, 80% of the investment is gonna be deployed within Saudi Arabia. We've been there for 7 decades. We have a 50/50 joint venture company, so we see that as very stable. Within the UAE, we're focused still on a lot of development work. There's still a lot of development that has been going on, so we don't see any slowdown there. In Qatar, our focus is primarily on 2 areas. Ashghal is our primary customer, and then we do a lot of work in the city of Lusail, for which we just got the contract recompete win. We've been very strong. As a result of the war, we've been supporting during the war effort, cyber, electronic warfare, Counter-Unmanned Air Systems, air base defense.

Speaker #1: We have a 50-50 joint venture company. So we see that as very stable. Within the UAE, we're focused still on a lot of development work.

Speaker #1: There's still a lot of development that has been going on. So we don't see any slowdown there. And Qatar, our focus is primarily on two areas.

Speaker #1: We have Ashghal, our primary customer. And then we do a lot of work in the city of Lusail, for which we just got the contract repeat win.

Speaker #1: So we've been very strong. As a result of the war, we've been supporting during the war effort cyber, electronic warfare, counter-Iran air systems, air-based defense.

Carey Smith: We see, as I mentioned earlier, post-war, that we're gonna have opportunities, particularly when you look at areas like critical infrastructure protection. A lot of the attacks from Iran have been on data centers, water, and utility. Those assets are all gonna have to be protected, potentially put underground, but definitely have critical infrastructure protection. There's gonna be additional rebuild. To have a company that has a long, deep history within the region, a very demonstrative proven performance as a trusted partner, we look forward to continuing to work across the Middle East and be able to help that region very quickly recover.

Speaker #1: And then we see, as I mentioned earlier, post-war, that we're going to have opportunities, particularly when you look at areas like critical infrastructure protection.

Speaker #1: A lot of the attacks from Iran have been on data centers, water, utilities. So those assets are all going to have to be protected, potentially put underground, but definitely have critical infrastructure protection.

Speaker #1: And then there's going to be additional rebuild. So to have a company that has a loan deep history within the region, very demonstrated, proven performance is a trusted partner.

Speaker #1: We look forward to continuing to work across the Middle East and be able to help that region very quickly recover.

Operator: Thanks very much, Carey.

Gautam Khanna: Thanks very much, Carey.

Speaker #6: Thanks very much, Gary.

Speaker #1: Thank you, Ms. Gautam.

Carey Smith: Thank you, Gautam Khanna.

Carey Smith: Thank you, Gautam.

Operator: Thank you. Our next question comes from the line of Jonathan Siegmann from Stifel. Your question, please.

Speaker #5: Thank you. And our next question comes from the line of Jonathan Siegman from Stifel. Your question, please.

Speaker #7: Good morning, Carrie Matt and Dave. Thanks for taking my question.

Jonathan Siegmann: Good morning, Carey, Matt, and David. Thanks for taking my question.

Carey Smith: Good morning, Jonathan.

Speaker #1: Good morning, Jonathan.

Jonathan Siegmann: On the cyber hunt contract win, interesting work, and it's new for Parsons. You mentioned it's gonna start ramping up in the H2. Can you maybe level set just how steep that ramp could be and any kind of differences in margins or capital intensity of that type of work? Thank you.

Speaker #7: On the cyber hunt, contract win interesting work and it's new for Parsons. You mentioned it's going to start ramping up in the second half.

Speaker #7: Can you maybe level set just how steep that ramp could be and any kind of differences in margins or capital intensity of that type of work?

Speaker #7: Thank you.

Carey Smith: Yeah, I'll start. Matt can jump in as well. We're excited about the Joint Cyber Hunt Kit award. It started off as another transaction agreement. Over 100 companies submitted white papers. They down selected the 3 companies to build prototypes, we were ultimately selected as the successful winner. We've already started the low rate initial production, and we'll be moving into production in the fall. I will note that we've produced over 500 of these kits. We're expecting another 500 to 750 as we go forward on the new contract. Another unique thing that was in our solution is it's the first use of a genetic AI in a threat hunt kit solution, and we think that was a big discriminator in helping us win that award. It's margin accretive. It is double-digit margins.

Speaker #1: Yeah. So I'll start. Matt can jump in as well. But we're excited about the joint cyber hunt kit. It started off as another transaction agreement over $100 companies submitted white papers.

Speaker #1: They down-selected the three companies to build prototypes. And then we were ultimately selected as the successful winner. We've already started the low rate initial production.

Speaker #1: Then we'll be moving into production in the fall. I will note that we've produced over 500 of these kits. We're expecting another 500 to 750 as we go forward on the new contract.

Speaker #1: Another unique thing that was in our solution is it's the first use of a Genic AI in a threat hunt kit solution. And we think that was a big discriminator in helping us win that award.

Speaker #1: It's margin accretive. It is double-digit margins.

Matt Ofilos: Yeah. John, just to add on to Carey's $500 million ceiling over a relatively short window, kind of 3 to 5-year contract. Booked the first 250 within the quarter. Feel really good about that work. We've already kind of started long lead material purchases on the production orders to kind of get ahead of schedule and help out there. I would say, you know, for H2 versus H1, we're seeing about a $50 million growth on those on that contract, which is helping our H2, of course. You know, I think from a margin perspective this year, it's favorable and accretive. I think we'll see more benefit in the out years as we get further into the production and deliveries.

Matthew Ofilos: Yeah. Jon, just to add on to Carey's $500 million ceiling over a relatively short window, kind of 3 to 5-year contract. Booked the first 250 within the quarter. Feel really good about that work. We've already kind of started long lead material purchases on the production orders to kind of get ahead of schedule and help out there. I would say, you know, for H2 versus H1, we're seeing about a $50 million growth on those on that contract, which is helping our H2, of course. You know, I think from a margin perspective this year, it's favorable and accretive. I think we'll see more benefit in the out years as we get further into the production and deliveries.

Speaker #7: Yeah. So, John, just to add on to Carrie's, 500 million dollar ceiling over a relatively short window, kind of three to five year contract.

Speaker #7: Booked the first 250 within the quarter. So feel really good about that work. We've already kind of started long lead material purchases on the production orders to kind of get ahead of schedule and help out there.

Speaker #7: I would say for second half versus first half, we're seeing about a $50 million growth on those on that contract. Which is helping our second half, of course.

Speaker #7: And then I think from a margin perspective this year, it's favorable and accretive. I think we'll see more benefit in the out years as we get further into the production and deliveries.

Jonathan Siegmann: Fantastic. Thank you. Maybe one more for you, Matt. I think your earlier comments tie to this, but just to confirm directly, remaining performance obligations for the Altamira solutions was down sequentially and diverged from funded backlog. Is that just the phasing that you mentioned earlier, or is there anything else to kind of keep in mind?

Speaker #8: Fantastic. Thank you. And maybe one more for you, Matt. And I think your earlier comments tied to this. But just to confirm directly, remaining performance obligations for the fellow solutions was down sequentially and diverged from funded backlog.

Speaker #8: Is that just the phasing that you mentioned earlier, or is there anything else to kind of keep in mind?

Speaker #7: Yeah, no, exactly. It was the phasing that I mentioned, and nothing else behind that, I would say.

Matt Ofilos: Yeah, no, exactly. It was the phasing that I mentioned and nothing else behind that. That's it.

Matthew Ofilos: Yeah, no, exactly. It was the phasing that I mentioned and nothing else behind that. That's it.

Speaker #8: Appreciate it. Good luck with the rest of the quarter.

Jonathan Siegmann: Appreciate it. Good luck with the rest of the quarter.

Speaker #7: Thanks, John.

Matt Ofilos: Thanks, John.

Matthew Ofilos: Thanks, John.

Carey Smith: Thanks.

Speaker #5: Thank you. And our next question comes from the line of Toby Summer from Truist Securities. Your question, please.

Operator: Thank you. Our next question comes from the line of Tobey Sommer from Truist Securities. Your question, please.

Speaker #8: Thanks. I want to double-click on the Middle East again if we could. With some of the your customers' experiencing less oil, petrochemical revenue currently, is there how do you look at the risk that the eventual rebuilding of that to generate revenue could crowd out or elongate the projects that you are working on in pressure a little bit of revenue growth there?

Tobey Sommer: Thanks. I wanna double-click on the Middle East again, if we could. With some of your customers experiencing less oil, you know, petrochemical revenue currently, how do you look at the risk that the eventual rebuilding of that to generate revenue could crowd out or elongate the projects that you are working on and pressure a little bit of revenue growth there?

Speaker #1: Yeah. First, Toby, I'd say that among sort of the three major investment funds—Abu Dhabi, Qatar, and Saudi Public Investment Fund—they've amassed over $5 trillion of wealth.

Carey Smith: First, Tobey Sommer, I'd say that among sort of the three major investment funds, Abu Dhabi, Qatar, and Saudi Public Investment Fund, they've amassed over $5 trillion of wealth. When you look at Abu Dhabi Investment Fund, they're like the 4th largest sovereign fund in the world. The Public Investment Fund is the 5th largest sovereign fund in the world. They have amassed a lot of wealth over time regarding oil prices. They also have the capability, both in the UAE and Saudi, that they aren't dependent on the Strait of Hormuz. They both have oil pipelines that they can continue to transport oil. The focus within the regions is very strong. There's a Saudi Vision 2030. There's visions in the UAE for 2030 and 2040. There's a national vision for Qatar for 2030.

Carey Smith: First, Tobey, I'd say that among sort of the three major investment funds, Abu Dhabi, Qatar, and Saudi Public Investment Fund, they've amassed over $5 trillion of wealth. When you look at Abu Dhabi Investment Fund, they're like the 4th largest sovereign fund in the world. The Public Investment Fund is the 5th largest sovereign fund in the world. They have amassed a lot of wealth over time regarding oil prices. They also have the capability, both in the UAE and Saudi, that they aren't dependent on the Strait of Hormuz. They both have oil pipelines that they can continue to transport oil. The focus within the regions is very strong. There's a Saudi Vision 2030. There's visions in the UAE for 2030 and 2040. There's a national vision for Qatar for 2030.

Speaker #1: So when you look at Abu Dhabi investment fund, they're like the fourth largest sovereign fund in the world. The public investment fund is the fifth largest sovereign fund in the world.

Speaker #1: So they have amassed a lot of wealth over time. Regarding oil prices, they also have the capability, both in the UAE and Saudi, that they aren't dependent on the Strait of Hormuz.

Speaker #1: They both have oil pipelines that they can continue to transport oil. The focus within the regions is very strong. There's a Saudi Vision 2030.

Speaker #1: There are Visions in the UAE for 2030 and 2040. There's a national vision for Qatar for 2030. Their whole focus has been: how do they diversify their dependence away from oil.

Carey Smith: Their whole focus has been how do they diversify their dependence away from oil. To be able to do that and achieve that, they're still going to prioritize infrastructure investments and to be on the world stage and be present for those events. What we're seeing, and I'll take Public Investment Fund strategic plan that they just published, is they're rephasing and moving things away from other sectors or other priorities to stay laser-focused on what's going to drive economic and social benefit to the region, and that's where we play.

Speaker #1: So to be able to do that and achieve that, they're still going to prioritize infrastructure investments and to be on the world stage and be present for those events.

Speaker #1: What we're seeing—and I'll take Public Investment Fund's strategic plan that they just published—is they're rephasing and moving things away from other sectors or other priorities to stay laser-focused on what's going to drive economic and social benefit to the region.

Speaker #1: And that's where we play.

Speaker #8: Appreciate that. And then if I could, with respect to the cyber kits and that aspect of your business related to technology and sort of products, how do you envision that growing and becoming a more meaningful part of the company?

Tobey Sommer: Appreciate that. If I could, with respect to the cyber kits and that aspect of your business related to technology and sort of products, how do you envision that growing and becoming a more meaningful part of the company? If you could, dovetail your M&A strategy in coming years with your response. Thanks.

Speaker #8: And if you could, dovetail your M&A strategy in coming years with your response. Thanks.

Speaker #1: Yeah. Thanks. So we have a lot of products within the portfolio. Cyber hunt kit being one of those. We also have I'll just give you a few examples.

Carey Smith: Yeah, thanks. We have a lot of products within the portfolio, Cyber Hunt Kit being one of those. We also have, I'll just give you a few examples. Assured precision navigation and timing. If you lose your GPS signal, you can get location information. We have a product called T-REX, which is an emulator product that can emulate certain signals that's been useful in Ukraine and can also be useful in INDOPACOM and in the Middle East region. In the space side, we have a space series of products. It's called the ACES products that are involved with a lot of the control timing of satellite vehicles. We have space ground systems. We've delivered over 170 different ground system solutions.

Speaker #1: Assured Position Navigation and Timing. So if you lose your GPS signal, you can get location information. We have a product called T-Rex, which is an emulator product that can emulate certain signals that's been useful in Ukraine and can also be useful in Indo-Pakistan and in the Middle East region.

Speaker #1: And the space side, we have a space series of products. It's called the ACES products. That are involved with a lot of the control timing of satellite vehicles.

Speaker #1: We have space ground systems. We've delivered over 170 different ground system solutions. And then on the infrastructure side, we have the intelligent transportation system where we're the most globally deployed system in the world today, just extending our reach now into the Middle East.

Carey Smith: On the infrastructure side, we have the intelligent transportation system, where we're the most globally deployed system in the world today, just extending our reach now into the Middle East. We had our first deployment there, and we've won some real big statewide procurements recently, including Georgia. Products is definitely a focus for us. I'm gonna put products into two categories. We have products that you might call hardware products, and I'll take, like, our BlueFly system. It's a search and rescue system that's able to assist local law enforcement as well as Customs and Border Protection. The secret sauce within there is really the digital signal processing, and that's an area that we focus on as a company. Our product offerings include both software as well as hardware.

Speaker #1: We had our first deployment there, and we've won some real big statewide procurements recently, including Georgia. So products is definitely a focus for us.

Speaker #1: I'm going to put products into two categories. We have products that you might call hardware products. And I'll take our Blue Fly system. It's a search and rescue system that's able to assist local law enforcement as well as customs and border protection.

Speaker #1: But the secret sauce within there is really the digital signal processing, and that's an area that we focus on as a company. So our product offerings include both software as well as hardware.

Speaker #1: And I would say a lot of the companies that we have been acquiring in addition to SealingTech, which produced the joint cyber hunt kit, do have products capacity and focus.

Carey Smith: I would say a lot of the companies that we have been acquiring, in addition to SealingTech, which produced the Joint Cyber Hunt Kit, do have products, capacity, and focus, and you can expect to see that going forward. We think that that helps with our differentiation as a company. We think that's driven our very strong win rates, which have been consistent over the past 3 years, and they are also margin accretive.

Speaker #1: And you can expect to see that going forward. We think that that helps with our differentiation as a company. We think that's driven our very strong win rates, which have been consistent over the past three years.

Speaker #1: And they're also margin accretive.

Tobey Sommer: Thank you.

Speaker #8: Thank you.

Speaker #1: Thank you.

Carey Smith: Thank you.

Operator: Thank you. Our next question comes from the line of Mariana Perez-Mora from Bank of America. Your question please.

Speaker #5: Thank you. And our next question comes from the line of Mariana Perez Mora from Bank of America. Your question, please.

Mariana Perez Mora: Good morning, everyone. Thank you for taking my question.

Mariana Perez: Good morning, everyone. Thank you for taking my question.

Speaker #9: Good morning, everyone. Thank you for taking my question.

Carey Smith: Hi, Mariana.

Speaker #10: Hi, Mariana.

Mariana Perez Mora: This first one is a little bit on the budget. The market is mostly concerned about not like the $1.5 trillion dollars ask, but actually how much could actually be done in an election year. How do you think about growth, and how much is already, like, funded or procured if you were to think about, like, a full year continuing resolution and how are you positioned to that scenario?

Speaker #9: So this first one is a little bit on the budget. The market is mostly concerned about now the $1.5 trillion ask. But actually, how much could actually be done in an election year?

Mariana Perez: This first one is a little bit on the budget. The market is mostly concerned about not like the $1.5 trillion dollars ask, but actually how much could actually be done in an election year. How do you think about growth, and how much is already, like, funded or procured if you were to think about, like, a full year continuing resolution and how are you positioned to that scenario?

Speaker #9: How do you think about growth? And how much is already funded or procured? If you were to think about a full year continuum resolution and how are you positioned to that scenario?

Speaker #1: Yeah. First, so I would say in an election year, a full year continuing resolution is probably very likely. We know how to live with continuing resolutions.

Carey Smith: Yeah. First, I would say in an election year, a full year continuing resolution is probably very likely. We know how to live with continuing resolutions. We've lived with them for decades. The key for us is really getting these, large, on the federal side, large task order awards, which we've just announced, two that are worth $400 million over the next three years. Cause once you have those, then you don't really fall under the CR. All you need to do is deliver task orders to those. Another important thing, obviously, with our portfolio is 50% of our portfolio does not fall under the federal government, so half our business is kind of immune from that.

Speaker #1: We've lived with them for decades. The key for us is really getting these large on the federal side, large task order awards, which we've just announced two that are worth $400 million over the next three years, because once you have those, then you don't really fall under the CRO.

Speaker #1: You need to do is deliver task orders to those. Another important thing, obviously, with our portfolio is 50% of our portfolio does not fall under the federal government.

Speaker #1: So half of our business is kind of immune from that. I would say the budget we are excited about not just this upcoming budget, but excited to see the $150 billion of prior reconciliation dollars starting to flow, whether that's for Golden Dome, the munitions, Pacific deterrence, the FAA modernization.

Carey Smith: I would say the budget, we are excited about not just this upcoming budget, but excited to see the $150 billion of prior reconciliation dollars starting to flow, whether that's for Golden Dome, the munitions, Pacific Deterrence, the FAA modernization. That all benefits our portfolio. We do have a record backlog as well. Out of that backlog, 71% is funded and $11 billion of awards not booked yet. I think, you know, we're well prepared as a company to run for a long time, and having these large other transaction agreements and IDIQs puts us in a good spot.

Speaker #1: That all benefits our portfolio. We do have a record backlog as well. And out of that backlog, 71% is funded. And $11 billion of awards, not booked yet.

Speaker #1: So I think we're well prepared as a company to run for a long time. And having these large other transaction agreements and IDIQs puts us in a good spot.

Mariana Perez Mora: Great. Thank you. If I can be more specific, there is, about, a month ago, the Department of State put out a request for information for the second iteration of DiPSS, the Diplomatic Platform Support Services contract at Exatour. You actually benefited from that, you got the confidential contract within that main award. How do you think about that? When you look at the areas they are looking at, covers transportation and logistics, security with physical and electronic security support, infrastructure, maintaining and construction and remediation. If we think about the activity going on in the Middle East right now, a good half expect those volumes to pick up. How are you thinking about that contract right now? How are you thinking about the request for information and your positioning towards that?

Mariana Perez: Great. Thank you. If I can be more specific, there is, about, a month ago, the Department of State put out a request for information for the second iteration of DiPSS, the Diplomatic Platform Support Services contract at Exatour. You actually benefited from that, you got the confidential contract within that main award. How do you think about that? When you look at the areas they are looking at, covers transportation and logistics, security with physical and electronic security support, infrastructure, maintaining and construction and remediation. If we think about the activity going on in the Middle East right now, a good half expect those volumes to pick up. How are you thinking about that contract right now? How are you thinking about the request for information and your positioning towards that?

Speaker #9: Great, thank you. And then, if I can be more specific, about a month ago the Department of State put out a Request for Information for the second iteration of DIPS—the Diplomatic Platform Support Services contract—that Exator, you actually benefited from that.

Speaker #9: And you got the confidential contract within that main award. How do you think about that? Because when you look at the areas they are looking at, cars, transportation, logistics, security, with physical and electronic security support, infrastructure, maintaining and construction and remediation, and if we think about the activity going on in the Middle East right now, a good have expect those volumes to pick up.

Speaker #9: How do you think about that contract right now? How do you think about the request for information and your positioning towards that?

Speaker #1: Yeah. Thanks, Mariana. So the DIPS contract, to your point, is coming out for reprocurement again. I believe we were the number one award year at the very top on the last DIPS contract.

Carey Smith: Yes. Thanks, Mariana. The DiPSS contract, to your point, is coming out for reprocurement again. I believe we were the number one awardee or at the very top on the last steps contract. We are definitely planning to bid and prepare to win that contract. Within the Department of State today, the majority of our work is with diplomatic security. We provide for diplomatic security, electronic security systems, we do biometrics capabilities, and Counter-Unmanned Air Systems. We've deployed those at over 250 embassies and consulates to date throughout the world. I'd say that's kind of our ongoing continuous business. The DiPSS contract, we are gonna be bidding.

Speaker #1: We are definitely planning to bid and prepare to win that contract. Within the Department of State today, the majority of our work is with diplomatic security.

Speaker #1: We provide for diplomatic security electronic security systems. We do biometrics capabilities, encounter unmanned air systems. We've deployed those at over 250 embassies and consulates.

Speaker #1: To date, throughout the world. And I'd say that's kind of our ongoing, continuous business. But the DIPS contract, we are going to be bidding.

Mariana Perez Mora: Great. Thank you so much for the color.

Mariana Perez: Great. Thank you so much for the color.

Speaker #9: Great. Thank you so much for the caller.

Speaker #1: Thank you.

Carey Smith: Thank you.

Operator: Thank you. Our next question comes from the line of Louis DiPalma from William Blair. Your question please.

Operator: Thank you. Our next question comes from the line of Louie DiPalma from William Blair. Your question please.

Speaker #5: Thank you, and our next question comes from the line of Louis De Palma from William Blair. Your question, please.

Louie DiPalma: Carey Smith, Matt Ofilos, and David Spille, good morning.

Louie DiPalma: Carey, Matt, and David, good morning.

Speaker #11: Terry, Matt, and Dave, good morning.

Speaker #8: Good morning, Louis.

Carey Smith: Good morning, Louie.

Matt Ofilos: Hey, Louie.

Matthew Ofilos: Hey, Louie.

Speaker #1: Hey, Louis.

Louie DiPalma: On the space front, last year, you announced a strategic partnership with Globalstar, and I was wondering, do you anticipate any potential positive impacts from the proposed Amazon acquisition? Perhaps you could become one of Amazon's main satellite partners for defense applications across their LEO broadband and also their LEO cellular constellations that are in the process of being built out. Also related to the Globalstar partnership, is there the potential that your technology could be embedded into drones and other unmanned platforms to provide resiliency in the various theaters right now, whether it's the Middle East, Ukraine, or the Asia Pacific? Thanks.

Speaker #11: On the space front, last year, you announced a strategic partnership with GlobalStar. And I was wondering, do you anticipate any potential positive impacts from the proposed Amazon acquisition, perhaps you could become one of Amazon's main satellite partners for defense applications across their Leo broadband and also their Leo cellular constellations that are in the process of being built out?

Speaker #11: And also related to the GlobalStar partnership, is there the potential that your technology could be embedded into drones and other unmanned platforms to provide resiliency in the various theaters right now, whether it's the Middle East, Ukraine, or the Asia-Pacific?

Speaker #11: Thanks.

Speaker #1: Yeah. Thanks, Louis. Appreciate the question. On the second part, the answer is yes, it could be embedded into drones to be able to support.

Carey Smith: Yeah. Thanks, Louis. Appreciate the question. On the second part, the answer is yes, it could be embedded into drones to be able to support. We're excited about the acquisition of Globalstar by Amazon, and we are starting to engage with Amazon. I don't wanna get ahead of those discussions, but I'd be happy to discuss that on future upcoming calls.

Carey Smith: Yeah. Thanks, Louie. Appreciate the question. On the second part, the answer is yes, it could be embedded into drones to be able to support. We're excited about the acquisition of Globalstar by Amazon, and we are starting to engage with Amazon. I don't wanna get ahead of those discussions, but I'd be happy to discuss that on future upcoming calls.

Speaker #1: We're excited about the acquisition of GlobalStar by Amazon. And we are starting to engage with Amazon. I don't want to get ahead of those discussions, but I'd be happy to discuss that on future upcoming calls.

Louie DiPalma: Well, thanks, Carey. There's been a lot of questions and answers on the Middle East. Are you reiterating the prior full year outlook for 8.5% growth in the region? Has there been any change in, like, the long-term view? In terms of the variables, like, how important is, like, the price of oil in terms of, like, the long-term picture here in the Middle East? Thanks.

Speaker #11: Excellent. Thanks, Carrie. And there's been a lot of questions and answers on the Middle East. But are you reiterating the prior full year outlook for eight and a half percent growth in the region?

Speaker #11: And has there been any change in the long-term view? And in terms of the variables, how important is the price of oil in terms of the long-term picture here in the Middle East?

Speaker #11: Thanks.

Carey Smith: Thanks, Louis. Yes, we are reiterating our 8.5% growth for the Middle East. Long-term view, we're very optimistic about the Middle East. One thing we've done very well is first, we've been positioned there 7 decades. We have gotten in at kind of ahead of need. We're seen as their trusted partner for all their big programs. We positioned intentionally around Riyadh about 3 years ago because we knew if there ever became funding challenges, they would focus on Riyadh because of the Expo and because of the World Cup. We're involved in transportation, we're involved in urban development, we're involved in water, and environment. We expanded our capabilities recently into defense and security. We won a border wall project, and we won a project with the Ministry of Defense. We've moved into other sectors. We've also gotten into data centers.

Speaker #1: Thanks, Louis. Yes, we are reiterating our 8.5% growth for the Middle East long-term view. We're very optimistic about the Middle East. One thing we've done very well is, first, we've been positioned there seven decades.

Speaker #1: We have gotten in at kind of ahead of need. We're seen as their trusted partner for all their big programs. We position intentionally around Riyadh about three years ago because we knew if there ever became funding challenges, they would focus on Riyadh because of the expo and because of the World Cup.

Speaker #1: So we're involved in transportation. We're involved in urban development. We're involved in water and environment. Then we expanded our capabilities recently into defense and security.

Speaker #1: So we went a border wall project, and we went a project with the Ministry of Defense. So we've moved into other sectors. We've also gotten into data centers.

Speaker #1: We're currently involved in about 12 data center projects within the region, and also artificial intelligence projects. So I think what the team has done there very well is successfully moved from our core, which is going to continue, into new areas.

Carey Smith: We're currently involved in about 12 data center projects within the region, and also artificial intelligence projects. I think what the team has done there very well is successfully moved from our core, which is going to continue, into new areas. I believe that we're focused on the right priorities. If you look at Saudi Arabia, 49% of their GDP is now based on non-oil. The countries over there have been very successful in diversifying away from oil. I'm really excited about our prospects in the country. I think they're going to only increase after the war with Iran ends.

Speaker #1: And I believe that we're focused on the right priorities. If you look at Saudi Arabia, 49% of their GDP is now based on non-oil.

Speaker #1: So the country's over there have been very successful in diversifying away from oil. I'm really excited about our prospects in the country. I think they're going to only increase after the war with Iran ends.

Louie DiPalma: Great. Even if priorities shift, you expect to maintain your share because, you know, Parsons' ability to be versatile in terms of, like, perhaps shifting from a transportation project or an entertainment project to a data center project, or what shifts do you expect to potentially take place?

Speaker #11: Great. And so even if priorities shift, you expect to maintain your share because Parsons' ability to be versatile in terms of perhaps shifting from a transportation project or an entertainment project to a data center project or what shifts do you expect to potentially take place?

Speaker #1: So I would say, again, public investment fund in Saudi just reiterated their six priorities. So their laser-focused on tourism and entertainment, urban development, advanced manufacturing, industrial logistics, clean energy, and neon.

Carey Smith: I would say, again, Public Investment Fund in Saudi just reiterated their six priorities. They're laser-focused on tourism and entertainment, urban development, advanced manufacturing, industrials, logistics, clean energy, and NEOM. We're in all six of those areas. You know, whether it's doing airports, the world's largest entertainment city, participating in the World Cup and the Expo, tourism and hospitality sector we're in. We do a lot of urban development with the developers there. I mentioned we're doing the data center work in country. We're building industrial cities. We're performing logistics efforts. We do a lot of water work, desalination work, renewable work. I think we're just really well-positioned where the money's gonna be spent.

Speaker #1: We're in all six of those areas. So whether it's doing airports, the world's largest entertainment city, participating in the World Cup and the expo, tourism and hospitality sector we're in.

Speaker #1: We do a lot of urban development with the developers there. I mentioned we're doing the data center work in-country. We're building industrial cities. We're performing logistics efforts.

Speaker #1: We do a lot of water work, desalination work, renewable work. So I think we're just really well positioned where the money's going to be spent.

Louie DiPalma: Well, thanks, Carey, and thanks, Matt and Dave.

Speaker #11: Thanks, Carrie. And thanks, Matt and Dave.

Speaker #8: Thanks, Louis.

Carey Smith: Thanks, Louie.

Speaker #1: Thanks, Louis.

Operator: Thank you.

Carey Smith: Thanks, Louie.

Speaker #5: Thank you. And our next question comes from the line of Noah Popnock from Goldman Sachs. Your question, please.

Operator: Thank you. Our next question comes from the line of Noah Poponak from Goldman Sachs. Your question please.

Noah Poponak: Hey, good morning, everyone.

Speaker #12: Hey, good morning, everyone.

Carey Smith: Morning, Don.

Carey Smith: Morning, Noah.

Speaker #1: Good morning, Noah.

Noah Poponak: Matt. Hey, guys. Matt, is it possible to quantify what's in the full year revenue guidance? What are you assuming for organic revenue growth in Federal Solutions ex confidential and organic revenue growth at CI, and how do you expect those to split H1 versus H2?

Speaker #12: I'm Matt. Hey, guys. Matt, is it possible to quantify what's in the full year revenue guidance? What do you assume for organic revenue growth in federal solutions, ex-confidential, and organic revenue growth at CI?

Speaker #12: And how do you expect those to split first half versus second half? Yeah. So federal, excluding confidential contract, organic revenue growth is 6.6%. And then CI is just north of 6, 6.1.

Matt Ofilos: Yeah. Federal excluding confidential contract organic revenue growth is 6.6%, and then CI is just north of 6.61. H1 versus H2, call it just about 4% on federal versus 9 in H2, and then infrastructure is three-ish H1 and then 9 H2. That's the ramps that we talked about earlier.

Matthew Ofilos: Yeah. Federal excluding confidential contract organic revenue growth is 6.6%, and then CI is just north of 6.61. H1 versus H2, call it just about 4% on federal versus 9 in H2, and then infrastructure is three-ish H1 and then 9 H2. That's the ramps that we talked about earlier.

Speaker #12: And first half or second half, call it just about 4% on federal versus 9 in the second half. And then infrastructure is 3-ish first half and then 9 second half.

Speaker #12: So that's the ransom we talked about earlier. Helpful. Thank you. And Matt, on the CI margin I guess a lot of progress there in the last 18 months.

Noah Poponak: Helpful. Thank you. Matt, on the, on the CI margin, you know, I guess a lot of progress there in the last 18 months. The guidance implies that slows down quite a bit through the rest of the year. Can you talk a little bit more about that? It's trying to figure out if that's, you know, truly mix and other inputs or if you're sort of still living in ultra-conservative mode because of the history of that margin.

Speaker #12: The guidance implies that slows down quite a bit through the rest of the year. Can you talk a little bit more about that? Trying to figure out if that's truly mixed and other inputs, or if you're sort of still living in ultra-conservative mode.

Speaker #12: Because of the history of that margin. Yeah. So without a doubt, very happy with the performance of the CI margin over the past five quarters, 18 months to your point.

Matt Ofilos: Without a doubt, very happy with the performance of the CI margin over the past 5 quarters, 18 months to your point. Again, 10.5 at the midpoint is about 10 basis points above 2025. We still have these legacy contract closeouts that we're going. I would say there's some thought in my mind around, you know, some flexibility for Carey and I if we were to accelerate some of these closeouts. Generally speaking, to your point, the performance within the business is quite strong, we feel really good. Generally, the only other thing I would add is, you know, Q1 was a little bit stronger than expected with lower passthroughs and materials, as I mentioned before.

Matthew Ofilos: Without a doubt, very happy with the performance of the CI margin over the past 5 quarters, 18 months to your point. Again, 10.5 at the midpoint is about 10 basis points above 2025. We still have these legacy contract closeouts that we're going. I would say there's some thought in my mind around, you know, some flexibility for Carey and I if we were to accelerate some of these closeouts. Generally speaking, to your point, the performance within the business is quite strong, we feel really good. Generally, the only other thing I would add is, you know, Q1 was a little bit stronger than expected with lower passthroughs and materials, as I mentioned before.

Speaker #12: And so again, 10.5 at the midpoint is about 10 basis points above 2025. We still have these legacy contract closeouts that we're going. So I would say there's some thought in my mind around some flexibility for Carrie and I if we were to accelerate some of these closeouts.

Speaker #12: But generally speaking, to your point, the performance within the business is quite strong, and so we feel really good. Generally, the only other thing I would add is Q1 was a little bit stronger than expected, with lower pass-throughs and materials that I mentioned before.

Speaker #12: And so there's some natural headwinds over the next three quarters. As we ramp on some of those newer programs, but all in all, again, just really strong performance out of Middle East and North America.

Matt Ofilos: There's some natural headwinds over the next three quarters as we ramp on some of those newer programs. All in all, again, just really strong performance out of Middle East and North America and, you know, some favorable trends.

Matthew Ofilos: There's some natural headwinds over the next three quarters as we ramp on some of those newer programs. All in all, again, just really strong performance out of Middle East and North America and, you know, some favorable trends.

Speaker #12: And some favorable trends. Okay. And Carrie, you mentioned munitions and missile support, missions work a few times on this call. Remind us what you do there and maybe how big that is, and then you also mentioned reshoring of critical minerals.

Noah Poponak: Okay. Carey, you mentioned munitions and missile support missions work a few times on this call. Remind us what you do there and maybe how big that is. You also mentioned reshoring of critical minerals. What does Parsons do there?

Speaker #12: What does Parsons do there?

Speaker #1: Yeah. So Matt will give you the numbers on how big that is in just a second. But let me hit on what we do with munitions.

Carey Smith: Yeah. Matt will give you the numbers on how big that is in just a second. Let me hit on what we do in munitions. We're currently have projects at both Holston and Radford, and we've been awarded 4 of those projects, 2 at each. What we're doing is modernizing the facilities. When you go to these facilities, they're old. They're, like, 3 to 5 decades old. We will go in, for example, and put in a new incinerator system that is more modern, doesn't have as many environmental issues. That would be a sample project. We've built a great moat around this because we actually have not had competition on most of these projects, we're really well positioned there.

Speaker #1: So we're currently have projects at both Holston and Radford. And we've been awarded four of those projects: two at each. And what we're doing is modernizing the facilities.

Speaker #1: When you go to these facilities, they're old. They're like three to five decades old. So we will go in, for example, and put in a new incinerator system.

Speaker #1: That is more modern. Doesn't have as many environmental issues. That would be a sample project. We've built a great moat around this because we actually have not had competition on most of these projects.

Speaker #1: So we're really well positioned there. The most recent win that we have was the NAMO award. And that was a unique one because that's with a commercial Norwegian company to stand up an energetics facility within the United States.

Carey Smith: The most recent win that we have was the Nammo award, and that was a unique one because that's with a commercial Norwegian company to stand up an energetics facility within the United States. When you look forward, both under the reconciliation funds that were already passed and you look forward at the next budget, there's a big focus to redo our plants, recognizing the importance of both ammunition and munitions, and I think we're in a really strong spot for those. Your second question on critical minerals. We provide, we're a delivery partner to private clients as well as federal agencies across mining projects, industrial projects, and infrastructure programs. Our history in the mining and critical minerals space dates back to 2013, and it really started with the two mine projects I mentioned on the call, Giant and Faro mines.

Speaker #1: So, when you look forward, both under the reconciliation funds that were already passed, and you look forward at the next budget, there's a big focus to redo our plants, recognizing the importance of both ammunition and munitions.

Speaker #1: And I think we're in a really strong spot for those. And then your second question on critical minerals. So we provide we're a delivery partner to private clients as well as federal agencies, across mining projects, industrial projects, and infrastructure programs.

Speaker #1: Our history in the mining and critical minerals space dates back to 2013. And it really started with the two mine projects I mentioned on the call, Giant and Farrow Mines.

Speaker #1: Those are two of the most complex high-risk environmental programs in North America. They're up in northern Canada. So at Giant Mine, for example, we're managing the safety construction of the roaster complex, stabilizing the underground workings, and containing about 237,000 tons of underground arsenic trioxide.

Carey Smith: Those are two of the most complex high-risk environmental programs in North America. They're up in Northern Canada. At Giant Mine, for example, we're managing the safe deconstruction of the roaster complex, stabilizing the underground workings, and containing about 237,000 tons of underground arsenic trioxide. At Faro Mine, we lead contaminated water treatment, dam safety management, landform reconstruction, and habitat. These are both multi-billion dollar projects. They're each over $2 billion, and they range from $12 billion to $20 billion. The expertise that we have there is very applicable to some of the critical minerals onshoring activities where they're gonna need companies that come in and they understand the technology, they understand speed of production, can manage program and construction management, perform contaminated waste management, deal with indigenous communities, and understand how to do the environmental work.

Speaker #1: And at Farrow Mine, we lead contaminated water treatment, dam safety management, landform reconstruction, and habitats. These are mostly multibillion-dollar projects that are each over $2 billion, and they range from $12 to $20 billion.

Speaker #1: So the expertise that we have there is very applicable to some of the critical minerals onshoring activities where they're going to need companies that come in and they understand the technology.

Speaker #1: They understand speed of production. Can manage program and construction, management, perform contaminated waste management, deal with indigenous communities, and understand how to do the environmental work.

Carey Smith: Matt, over to you on that.

Speaker #1: Matt, over to you once again.

Matt Ofilos: Yeah. I'd say just high, high level, each one of these is contributes kind of $40 to $50 million a piece. Radford's a little bit smaller this year as it kind of scales back in terms of delivery. All in all, you know, a really strong market that's growing, and we're really excited to be part of it. Obviously, it's a high demand for the administration, we're happy to use our capabilities here and be able to grow this market.

Matthew Ofilos: Yeah. I'd say just high, high level, each one of these is contributes kind of $40 to $50 million a piece. Radford's a little bit smaller this year as it kind of scales back in terms of delivery. All in all, you know, a really strong market that's growing, and we're really excited to be part of it. Obviously, it's a high demand for the administration, we're happy to use our capabilities here and be able to grow this market.

Speaker #12: Yeah. I'd say just high level, each one of these is contributes kind of 40 to 50 million dollars a piece. Radford's a little bit smaller this year as it kind of scales back into the delivery.

Speaker #12: But all in all, a really strong market that's growing. And we're really excited to be part of it. Obviously, it's a high demand for the administration.

Speaker #12: And so we're happy to use our capabilities here and be able to grow this market.

Carey Smith: Each of the five projects I mentioned are over $100 million in revenue.

Speaker #1: And each of the five projects I mentioned are over 100 million in revenue.

Carey Smith: Each of the five projects I mentioned are over $100 million in revenue.

Speaker #12: Over the period, it's about $40 or $50 million per year. Yep. Okay. Thank you for the detail. Appreciate it.

Matt Ofilos: Over the period. It's about $40 million or $50 million per year.

Matthew Ofilos: Over the period. It's about $40 million or $50 million per year.

Carey Smith: Yes.

Matt Ofilos: Yep.

Matthew Ofilos: Yep.

Noah Poponak: Okay. Thank you for the detail. Appreciate it.

Speaker #1: Thanks.

Carey Smith: Thanks.

Speaker #13: Thank you. And our final question for today comes from the line as a follow-up from Jonathan Siegman from Stifel. Your question, please.

Operator: Thank you. Our final question for today comes from the line. It's a follow-up from Jonathan Siegmann from Stifel. Your question, please.

Speaker #12: Thanks so much for taking the follow-up. Just back on some of these products. The ironclad controller that you guys offer, can you just sketch out the opportunity for that product?

Jonathan Siegmann: Thanks so much for taking a follow-up. Just back on some of these products. The IronClad controller that you guys offer, can you just sketch out the opportunity for that product? Is that something that might have been used on some of the drones that were deployed in Epic Fury or maybe partnered with some of the drone dominance programs? Thanks again.

Speaker #12: And is that something that might have been used on some of the drones that were deployed in Epic Fury or maybe partnered with some of the drone dominance programs?

Speaker #12: Thanks again.

Speaker #1: Yeah. The name's not ringing a bell with me, John. I'll have to get back to you on that one.

Carey Smith: Yeah. The name's not ringing a bell with me, John. I'll have to get back to you on that one.

Carey Smith: Yeah. The name's not ringing a bell with me, Jon. I'll have to get back to you on that one.

Speaker #12: Thank you.

Jonathan Siegmann: Thank you.

Speaker #13: Thanks, John.

Matt Ofilos: Thanks, John.

Matthew Ofilos: Thanks, Jon.

Carey Smith: Sure.

Speaker #1: Thanks.

Operator: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to David Spille for any further remarks.

Speaker #13: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to David Spille for any further remarks.

Speaker #14: Thank you all for joining us this morning. If you have any additional questions, please feel free to contact me directly. We look forward to connecting with many of you over the coming weeks.

David Spille: Thank you all for joining us this morning. If you have any additional questions, please feel free to contact me directly. We look forward to connecting with many of you over the coming weeks. With that, we'll end today's call. Have a great day.

Speaker #14: And with that, we'll end today's call. Have a great day.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Q1 2026 Parsons Corp Earnings Call

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