Parsons Corporation (NYSE:PSN) reported first-quarter results on Wednesday that exceeded profit expectations, even as revenue declined.
Shares rose 3.2% in premarket trading, with investors focusing on record margins and a strong backlog.
Adjusted earnings per share came in at $0.79, beating the analyst consensus of $0.69 by $0.10.
Revenue totaled $1.5 billion, in line with estimates but down 4% year over year, or 8% on an organic basis. Excluding a confidential contract, revenue increased 8% year over year, with organic growth of 3% driven by strength in Critical Infrastructure Protection, Space and Missile Defense, and Transportation.
Adjusted EBITDA reached a record $151 million, up 1% from the prior year, while margins expanded by 50 basis points to a record 10.1%. Net income declined 20% to $53 million.
Operating cash flow improved to a $4 million outflow, marking a record first-quarter performance compared with a $12 million outflow in the same period last year.
“Our first quarter results 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 1.4x in both segments, and generated record first quarter cash flow,” said Carey Smith.
The company secured $2.1 billion in net bookings during the quarter, resulting in a book-to-bill ratio of 1.4x across both segments. Total backlog rose to a record $9.3 billion, while funded backlog reached $6.6 billion, the highest level since the company’s 2019 IPO.
For fiscal year 2026, Parsons reaffirmed its revenue guidance of $6.5 billion to $6.8 billion. The midpoint of $6.65 billion is slightly below the analyst consensus of $6.665 billion.