Parsons (PSN) 2 Nov 222022 Q3 Earnings call transcript

Good morning, and welcome to the Q3 2022 Parsons Corporation Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this is being recorded.

I now like to hand the conference over to Dave Spille, VP of Investor Relations. ahead. go Please

Relations morning, to Good Please you joining the for that, website. Thank our and third today Investor on slides discuss provided results. of quarter us our we you. presentation thank section XXXX note financial

We today with an quarter Today, and and CFO. Carey Smith, will then will operational overview highlights, discuss third our then Matt On CEO; me Chair, results. a Matt provide and of with the our question-and-answer financial are call and will Ofilos, Carey President close corporate strategy session.

risks, statements, also make future to difficult the may We events, performance, statements Management and future the guarantees predict. involve anticipated of trends forward-looking caution uncertainties anticipated during the that not call, such that, future are and are regarding you company. future of performance and

results XX, and XX-K statement from differ to in statements. press variety projected disclosure. of forward-looking are to complete our to the any not update fiscal These We for release filings. obligation materially year our a for earnings forward-looking forward-looking undertake in XXXX, described statements, Parsons' risk other December factors SEC due factors. Please refer Form do may Actual those ended

to remind measures for financial non-GAAP make this call. GAAP during measures. We comparable their Management also are not will you reference non-GAAP these substitute that, financial measures a

And now, I'll turn the call over to Carey.

record XXXX Good Thank with to record We and call. earnings quarter strong EBITDA. and delivered you, quarter third morning, results, revenue Dave. Parsons' adjusted third financial welcome

grew During by contract EBITDA and revenue in by awards quarter, growth both business the achieved adjusted segments and year-over-year we organic double-digit XX%. XX%

our balance acquisition first nine year-over-year and We sheet XX% and meaningful XX% months further to is increased results. contributions making the year. Xator flow our for cash by Operating our of the robust strengthened by

XXXX Given adjusted and our EBITDA flow revenue, our the we of third guidance raising ranges. strong cash are midpoints results, quarter

of revenue we third XX%. total growth the During quarter, generated

contracts, segment. Federal XX% segment in and single Our contracts within XX% to These growing by sustained our year-over-year two driving Infrastructure existing our was growth revenue driven within Critical and results recruiting large retention, Solutions task effectively well-funded organic and markets. growing were on orders operating and XX%, including award revenue

to ability our win contracts large and with continue national and us customers' to in deliver allowed has missions, global secure infrastructure Our re-competes areas successfully strategic to our aligned on security priorities.

we enterprise which third exceeded both in basis, an book-to-bill business the X.X the During This now X.X on quarter, ratio book-to-bill is achieved times Infrastructure's and has of in times. a consecutive segments. eighth ratio quarter Critical

two contracts. of $XXX During development of support on in the new in the East. to industrial all-domain provide third notable A quarter, operations and year Mission contract, work the $XXX operations. contracts million joint of Support our defensive following Combatant option Commands Middle offensive support we intelligence the Cyber two open-source cities we were awarded and cyber under million where major

and installation On contract these under $XXX each construction contract. Over engineering, million phase oversight, Jobs Agency. Investment A Next contract on recompete lifecycle the was Act. facilities support Infrastructure and services advisory management of provide services giga support to services. funded Missile growth provide work we projects, under million only project contract the FAA's $XXX of technical booked of Defense technical the the and to million this Teams first $XX to new technical the

for to have branch other a cyber task a occurred. assessments order vulnerability a $XX comprehensive service military perform new A remedial and investigation releases studies where customer provide million extension weapon contaminant million by $XX contract to PFAS And for feasibility classified and systems.

Critical our contract months. over Solutions wins aggressively in Federal team in Contaminant nine Emerging in and Parsons Infrastructure with share market has pursuing over building $XX million Our opportunities a the of both segments been total last PFAS

prime award contracts. IDIQ three on won also notable positions We

value ceiling provide offensive to $X billion one contract first is years. The operations a over classified XX cyber with

years. second Engineering win years. $XXX States $XXX million for third contract support simulation over Threat Center with assessment, and contract XX and Reduction and Agency's the Support seven ceiling IDIQ a ceiling million United with for over modeling an Army the the The And is Defense exercise IDIQ is

Under this systems our amount will maintenance. contract, security awarded on we the design provide contained contracts and work ESG-related work. of electronic substantial A during quarter

XXX% addition industries the goal a residents renewable I giga-projects in highlighted powered the to of all the In mentioned East recent city one PFAS and ensure has earlier, wins to Middle are I by energy.

trip met customers East, Middle I to and site focus this and the with impressive. visited recent my and During environmental is employees their

the sustainable of transportation, our LAX which standard to emissions. made and having zero achieving vehicles people-mover sets joined automated customer a materials unveiling high of shells also we their quarter environmentally celebrate This for recyclable

and continue to also I which society. Assistance of the is the our Program increases our the support survivors heroes. on environment including work support and advocacy for make positive Tragedy fallen numerous am impacts to of Parsons We for families charities proud doing nation's

going Turning and integrated Xator The revenue aligned new pursue work to been research is they're synergies our in expectations are acquisition, leadership with targets. sales leveraging key development the have retained well. to We've profitability recent and and most integration their line across and our our both segments. and exceeding programs

leverage ratio robust Given times. X.X quarter we our a ended flow of the cash with third net

and enable investments and culture. development debt to Our in capacity to and low us strategic continue people ample accretive our leverage acquisitions, and research make will

XXXX very as flow record cash pleased In am delivered remain We with excellent our our about summary, well execution revenue and future. this results. quarter I and optimistic as profitability, and throughout

operate complementary benefit differentiator leadership, portfolio Parsons. is performance to balanced a markets contracts. growing two our strong our continue and from for our win to and execution and ability We strategic We large in

budgets Solutions we're wastewater our high water with treatment In to the environmental grow urban Infrastructure, threats our are seeing transportation aligned globe, remediation, and and markets. Critical segment, across remain which tensions In development global and evolve. continue Federal

Defense missile Review, recently threats. Missile cyber and which aligns protection released infrastructure peer portfolio National the Posture on critical defense of Nuclear Strategy, near focused Our and Review to Defense space, administration's

will both drive Given our to our position people segments, we invest in to technologies and shareholder value. positive end market future continue in

And call turn over the that with to I'll Matt.

Carey. you Thank

revenue growth and from driven of was cash and contracts was period highlighted prior profitability flow. As the XX% by and Organic quarter third existing the year XX% strong increased indicated, by on Carey Total ramp-up for XXXX up by primarily third new basis. and an growth work results the organic quarter organic were hiring. strong of on

the contributed by due period, approximately Xator increased of the third acquisition to year X% the Adjusted primarily the prior quarter. Xator expenses impact Our $XX million, revenue in million $X from or of SG&A acquisition. These primarily leverage by points from XXXX, and from of the Xator. EBITDA stronger were quarter of adjusted increased to EBITDA increases contributions increased driven operating X.X%. $XXX and margin third XX% XX million basis

on were existing basis contracts Federal EBITDA third revenue by increases Xator. increased to recent XX% with from control quarter XX% starting the $XXX These or of strong from and operating now to awards. our growth $XX quarter was increased primarily turn XXXX. approximately increased continuing margin million, adjusted increase was activity This first third of or of million, and to third million Solutions the of the XX where contract driven while Solutions X.X%. from $XX driven XXXX growth, by by points organic ramp-up XX% driven I'll Organic quarter revenue segments by costs. EBITDA increased and growth Federal adjusted

now Moving our to Critical Infrastructure segment.

driven of million, strong revenue the by was XX% which third of was activity from recent activity. all or of and Third XXXX organic. This and quarter awards contracts growth $XX existing increased quarter primarily increased worldwide the by increased hiring ramp-up contract on

adjusted from and third margin EBITDA Critical or X.X%. million, quarter to of Infrastructure XXXX XX% adjusted EBITDA the increased by $X decreased

equity lower Our by offset adjusted earnings. strong EBITDA was increase growth by and driven partially revenue

We expect Infrastructure margin to and higher-margin our earnings fourth in and higher expand sequentially the with and equity on programs. quarter growth continued Critical year-over-year

flow metrics. I'll sheet Next and cash balance discuss

strong at segment. QX, the end collections days period end days, equal of XXXX the DSO and the QX, down net of in the federal Our XX from prior year four was to with

Our totaled quarter cash nine $XXX million period $XXX from million. the cash flow third prior Operating and the flow increased months year increased the XX% to of for first third XXXX. XXXX operating over XX% by of quarter

and the in compared prior period. of X% third of in $X million quarter of controlled revenue. Capital XXXX, continues our spend $X Spend expenditures well below to totaled year be to million the planned

as with leverage times. net remains a ratio X.X debt Our balance quarter strong ended the sheet of we

recent make internal to leverage borrowing drive coupled our low undrawn and continue enable to additional Parsons. and acquisitions capacity the of private refinancing accretive placement with Our investments to notes us for growth will

for award activity was the third X.X representing approximately also Contract bookings XX% by to our segments $X.X segments. in increased Turning X.X ratio and a Contract to both in increased ratio XX% both book-to-bill billion, book-to-bill times. quarter. of awards

annual XXXX continues revenue. our and quarter of backlog totaled $X.X to billion two years represent the of quarter end Our in second third backlog total of at line with the

Now our let's turn to guidance.

strong are to third year. and increasing cash revenue, our our XXXX the flow our of quarter and EBITDA results for outlook guidance We adjusted the remainder reflect

have raised represents midpoint We X% billion. at to an on organic million $X.XX total $X.X of $XX This revenue midpoint at billion basis. and updated growth the the by and range revenue the XX% to

at now of adjusted of represents range. EBITDA are EBITDA remains Additionally, the and X.X%. EBITDA to which adjusted at of range. revenue between $XXX million the midpoint expect at – Margin $XXX at growth the midpoint we increasing XX% adjusted the our We be range and the our midpoint and million,

million flow expect today's flow between We our of updated to to XX have outlined in remain expected also our are million in XXX% guidance. income. with presentation. on $XXX guidance Other net $XXX flow at operating also cash and free key approximately cash and are assumptions cash increasing the midpoint is connection XXXX of conversion adjusted now and Slide been be PowerPoint We

With the over Carey. to call back that turn I'll

our segments organic We I'm awards more revenue XX% each. double-digit and Matt. cash flow in by with you, growth year-over-year both adjusted grew operating results. Thank third business achieved quarter than contract pleased and EBITDA, very

Xator to further off our our acquisition sheet great and We is also strengthened start. balance a

from in Our and we segment. results each delivering consistent team are benefiting tailwinds is

is our to our momentum aligned given portfolio expect markets. to growing trends and important in We environment well well-funded macro two continue,

again performance. to like their team thank would entire for our I outstanding once

to the customers' work most Our success challenges. and is complex product their hard dedication our of solving

forward learn in Before look I'm the unit vision, next that announce we We session, hear be March opportunity to from strategic participate event XX Q&A our year. your business to we conducting sessions. will to will Day and about participation. more pleased and Investor on begin a Q&A leaders be our great This the

With questions. that the will for line we now open

first from Greg We session. [Operator now come question-and-answer begin will Jefferies. with Instructions] will the Our Konrad question

now may ahead. go You

Good morning.

Good morning, Greg.

last this place this beats really into the back you've of coming of over think a I getting done of that throughout into and stressed quarters year. kind about couple and year and raises, you

ahead profile new programs, of plan? How much acceleration improved? revenue really quarters, the about that's or the think tracking you of to over just of tied what's maybe couple of If hiring last awards

Thanks, Greg for the question.

say, would sustained the driven hiring. has I So and momentum. as our really new been trajectory well around as consistent last hiring awards We by we revenue growth turned July that

this look you last year, quarter-over-quarter if you up we're at XX%. And this year. the our months hiring is of quarter, first If XX% over nine up look

mentioned the all new perspective the on house ceiling awards single-award side of federal the IDIQs. Then had these we from won we've continuously

our to really task those we which IDIQ vehicles, was orders new So objective how done. do drive successfully we've

little with benefit year. as steam had bit FAA of returned some Kwajalein COVID a some also We as such tailwinds to our federal in full and work of this

fortunately those. side infrastructure many of were from Middle the to Infrastructure They their we're programs global particularly, already moved the and winning in of East. successful left Critical Greg. benefiting the we Thanks, On the on house, spend,

on And budgets. that kind mean, business I good maybe a and follow-up talked in infrastructure. of really turn to you growing been there's about then just critical

based pipeline just about You think think maybe And East. kind that's growth you can you're in the versus what kind is maybe just growth? And when the bucket Middle what's that of that of do mentioned you front you that trending? out you driving today? pipeline of how capturing how about But on

Sure.

new East the in So East, the Giga with portfolio Middle building programs say cities. I also and be Canada. our they're these then the in would would established where they've benefiting in States industrial predominantly we're from Starting third Middle United

be ahead them. a billion. of announcing $XXX worth want so billion; And city worth get second single $XXX shortly don't is a to our those city customer will I programs for But is example

If States at spend, United are starting you benefit from infrastructure we the that. look to

well bill. $XX program transit Infrastructure the benefit across our As of already example as the from our moving as projects FAA has are on customers on seeing rail the program their million great come FAA And some we're and forward. customers a aviation

And their then Canada, finally in passed infrastructure back in XXXX. they spend

some there work of So seeing but well their road And and programs also are transit, additional already and highway. we're predominantly a underway. rail lot

Thank you.

Thank you.

Thanks, Greg.

Our next from Stifel. Subin Bert with come question will

now may You go ahead.

Matt, morning Dave. Good Carey,

Good morning.

Good morning, Bret.

infrastructure are your we were spend about relative on maybe you as a to US or year? unfolded thoughts earlier what grow can materialize And to just talk has how sequentially comment. XXXX? follow-up this infrastructure how that what Carey, head Maybe into the expectations your starts

Sure.

So recap, as bridges, that benefit transportation, we power utility, and roads of infrastructure billion for trillion, as $XXX transit. And funding, and rail the well $XXX to and $X.X and as which just where aviation, the bill is is billion such highways, sold is areas new. ports, dams, tunnels, from

What on customers we've first. started are funds that initial the the to Federal rollout see is Bert getting funds. of

get and an billion that transit of out. to the funding of to start and mentioned was that's states. rolling formula and seen funding out So the rail I FAA, road highway allocated funds example like also $XX about the we've some roll There been

in from Thank perspective more lines of a the planning the peak we of As being we've XXXX, XXXX. though, past that the along indicated anticipate you.

No, helpful. Thanks Okay. Yeah. that's Carey.

ultimately X%. critical a you margin little Should time infrastructure a follow-up, think Thank are margins a to point those forward Any thoughts going expect time? levels their be expected critical segments It around Do XX% closer? accretion side the get then those the get margins And were lower you. think on rose as looked sustainable? Solutions you we quarter. than maybe were in would about infrastructure the more beyond two should Just the XQ on maybe almost some segments? Federal where so maybe helpful. how margins over And over we like across

Yeah, great question.

we've and in So from indicated single we're we've business fees given revenue that every about we award a at perspective incentive really XX% well. stronger in continuously that in, we it in reimbursable higher because been as it been two-thirds federal federal. past, bringing we've bringing with don't on depends the are But that the as timing margins expect cost quarter pleased the of

side improve talked legacy of in two-thirds we've higher margin. On material these roll the past We infrastructure price those our been time. that to started critical work segment critical the have That a that given performing on have over that infrastructure segment. of fixed should drain will be time the that off and some margin the in house programs and we

board going critical as pricing at in When So both as we've you of spend, infrastructure you look of to to the expand to these the costs come forward, the a Parsons performance segments, particularly of then start programs this to we'll margins continue we so as improved legacy And wind-down look infrastructure. result global revenue execution. strength that's continue at achieved growth. across control the

helpful. Very Carey. Thank you

Mariana America. will question of Mora next Bank come with Our from Perez

go You ahead. may now

Thank you. Good morning.

Good morning Mariana.

for? us First, active? on are how the pipeline? it M&A? Pricing? Not? Is update could M&A looking you please What you

Thanks M&A the strong. Mariana. Yeah, still is pipeline very

Federal and the looking companies EBITDA we're strong looking are that margin. robust in outreach at we're Infrastructure have looking to top We've expanded solutions than for becoming of each. by and on the technology. continue both strategic greater line XX% that We're a our for financial companies us integrator our to advanced We and criteria differentiated than focused greater still And candidate segment perspective. keep the going have a growth a XX% that's of from on Critical vision list have companies in strong we and

interest the you rate are when these environment How you thinking about you. uncertainty look at Thank deals? and

that Mariana. take one to happy I'm Yes.

the interest So still low-Xs obviously, after company high-Xs, -- we're our would we're average everybody an term say, rate the loan. is expense, from rates. still interest low-Xs, at dealing level, with higher I in

look an a at continue Carey about make what to good on acquisitions sense we're accretive mentioned. at really as makes We'll feel assessment as company. where and So,

I Organic guidance year-to-date. the to compares And one quarter? X% may in last if to Thanks. deceleration that the growth but X% in quarter. your updated growth, related What is factor for main organic like fourth is about

contract. largely our Quadilent on [ph]. And We for Yes, tend the during peak to and fourth increase deliveries a And had QX. quarter we We also would fourth great area vacations be we're third seasonality in in faced had period the then, with FAA major quarter. the question. some holidays have

the will So fourth slightly in that down quarter. come

much. you Thank very

you. Thank

from Our next come question Tobey will with Truist. Sommer

go ahead. now may You

respect the some that there may from into others morning. last two-year quarter you. contracting heard the for year's an Thank been With from environment, Good budget of flow the Federal with to we've spending to opportunity have December -- some contracting. money December

of we're for the could a sort as the not fiscal government do So, be long do that of how quarter you the sort expectation Federal CR? final but year? think in average good of a you have baseline December this above And a as

could one, prize. will I big a get should say I I continue. would I end hope If But this and year can the that answer last CR we the

all deliver. think mission company that's We've lot of got every we've critically that work I important a to important. got

I that through at go would we QX. the would get expect can to longest So into really hope that I this say it we year.

have question of On what awards forward. see about that right to move the start notice We is we now your billion hope part first we awaiting of those Tobey, $X do award.

We quality the year. those I have a those of billion. very many to strong of love before $X see the awarded would end within pipeline

have up federal That's also work about protest. well. as $XXX We in all tied billion

to that like in So on some is to driving single-award work again, that is meantime, yet. booked billion year we ceiling haven't of we're the well is what do resolution $X all doing that. very to our over continue is, have we'd that going we've see And we contracts unused to what been

I or year financial consider give earnings of as accelerated has What of examples to And wanted equity least What Critical that more, Infrastructure medium-term a do? business a this what From are open-ended mean? multiyear. question, last at in the the And perspective, it two of in does sort maybe I reaccelerated. terms those over DSO but the financial implications in terms accelerates? ask growth a Critical growth and/or implications of Infrastructure

will $XXX think Yes, be part protest Tobey in I'll said the should first our $XXX take take back DSO. Matt million we I I on To It the billion. have protest. come that

with accelerating. Regarding Critical multiyear Infrastructure

a and So, to used programs predominantly where equity we us Critical partner. for be legacy is earnings Infrastructure minority

is complex because to start we back design And this Matt equity focused business program over go stronger will which and time re-pivoted you is core and well the purpose on the management. of you we down DSO? engineering to So, and areas earnings drive as to see margins. we've can our the do the where know de-risk to get portfolio want address as

Yes. Tobey I'd say at. it's something definitely we're looking

I continue to down. drive DSO think to to we're the push going teams

there's East to their little teams terms to push But customers Obviously think is the opportunity there's collections. I pay bills. longer a cash want in opportunities. Middle bit of the

-- it's from So, like opportunities improvements billings there's things and that.

out I it's already be XXXX significant will don't a it impact. feel So, think type comparable modeled number for next and We've DSO a year. like

you then side more in allocation And as opportunity you respect capital to particular business? look any of see acquisitions, with at the your do

Yes.

war. that's be to you That that vision. type the companies all have that past we peer near fight and that warfare So, the threat areas priority convergence five at at information and our look towards be where drive years on looking we're space on continue able cyber the over aligned M&A spectrum focused the and be been to can of electromagnetic would to we

the we're Infrastructure house, Critical technology the On at looking of side differentiation.

designed to to to differently. done it's XXX-year start In past, for the span. span. XX it going going it's about to future, life back a the life In be the about infrastructure for build be was XX-year we designed As

critically is technology So, important.

resiliency. which of out funding, to area is new and billion funding there's billion $XXX back infrastructure of other the cyber $XXX the Then ties the of

and that our have is resiliency a have portfolio, to So, gets given any that. to going cyber component to we're in on position unique built and capitalize

Thank you very much.

Thanks.

Our will Company. come Sullivan question from Josh The next with Benchmark

go now ahead. You may

Hey good morning.

Good morning Josh.

in Middle you're flow the Just region the you're contract like what labor availability does the relative highlighting, projects to looking Eastern on at? look

Yes, great question.

of job in countries a bring we've We the around So, from world. XX hiring been Middle folks great in over the doing East.

largely venture in successful years. over for expansive well-established we've XX Saudi for an we've reason across done I a And joint many had the there that Arabia, decades. had And network. company think place the in business we've we've So, region. in been Extremely particular,

to What So, outreach have These we done. never is type unique know for personnel. very we've management. the been right of been immediately to that first-of-a-kind are strong projects how getting looking program

an programs. it's challenge on to exciting that and to time take So, for engineers for and over come those people also on work

it. about on mentioned Got Any the contract I think we Middle else should of dynamics in But market? anything cycles as should longer cash think should that And how importance about? material the region we versus for North in East you And grows cycles collection. think American the then we think you?

people is I the of is Saudi Yeah. shorter in we've And on on oil. which Saudi Vision do. really And They've how things would dependency lot cycles acquisition. basically do Saudi what the these need to benefited employed, able it working, has moved XXXX be say to recently that having young some to reduce left a to programs to they seen their us. of motivated, capitalize on to and keep they do

but for they're work, these new tourism centers. people can building places also So recreational centers where cities

to to the So that's for going help we Saudi. next think decade again continue

the Thank you time. for

Josh. Thank you,

from come will with von Rumohr Cowen. question next Our Cai

ahead. now may go You

Yes. two Thank but late, so questions. bit you a much. I'm joining little

as two of DoD approval CR? know Is you. plus ceiling being on flowing. of think What those would the up? that seeing the potential of is, a flow awards outweigh the some one secondly, Leidos awards? picking do a these XX. pluses First And in they you terms Thank occupancy September are impact was of a of call, lifted you Bill And on to the LaPlante as get congressional yesterday at discussed you

Cai. you, Thank

things others have are Bill him I people occupancy back to do a we lift moving. working relationship LaPlante changes. get very great important getting both positive The as they the think in is with industry.

forward was our I I would who held role. think previously I fact Board testament significant for that also we're say be on would added to Ellen see recently, things highlight we're think the very would But moving optimistic that a Lord quarter. that And he's I been think this a to yes, positive. the side. to federal federal addition our I which going X.XX we book-to-bill

picking seeing the that of end any things you third side? up signs the Are on since quarter federal the are

early our seeing I to to ability What be to ceiling. is tell. orders are too still able we drive would say a to unused task little our

Great. the one. then And last

Mid Is has the know little US to threat as in that see do in strain. Saudi any bit any impact So East you be or having you more the a with expect a relationship started on way? to your business there, that

No, threat. be we it to don't expect a

In that fact, young the the work employment good cities work entertainment developing places we're because do we the of is type go for Saudis of and centers. there and for basically to world

change. had not So decades. that It's do based there on been that say I the any we for expect very there We've continue. would no of solid. And do will work business six type we

you Thank so much. Terrific.

Cai. Thanks,

come Blair. from with will DiPalma William Our [Operator question Louie next Instructions]

ahead. go now may You

Matt Carey, morning. Dave, good and

Good Louie. morning,

Good morning, Louie.

Good morning, Louie.

past for quarters. much strong and Do you the year? increased headcount over retention particularly Hiring been has past how the approximately has several know

Yeah.

XX% I'll months for of that We XX%. first last this year, you the we're year. the specifically, not shared percentages, have to year And then this from QX give QX nine but up quarter-over-quarter

XXXX our the hiring. first already nine exceeded through also We of total have all months

you analysts backlog? such backlog seems of contract been And has to And winning it this a were contract wondering is renewal? low, would full go referenced a is artificially for your I'm And down Carey. renewal. by the be support to up status And how is Thanks, your the if of reason, you the that And and for scrutinized into in $XXX is But contract like often because million program. you've the the technical new year-over-year. contract. past, FAA's amount what win mentioned Great. backlog

different So this I'm FAA contract? just with here wondering, dynamics the

Yeah.

the is are first, status the the re-compete evaluation. So, in bids of

expect backlog. be again, second into first of award We made of fully the everything put perspective or our quarter decision we an to next From year. time don't some backlog,

is give our only I'll was So a team's Agency great $X.XX you million. Missile backlog Defense billion. example, That put $XXX contract. in We

similar we So, same the I would conservative half. and the a Middle first take approach on on where East took And we the booked referenced, jobs that two conservative only likely that's year we FAA. these approach

what addition, up that's our sequentially backlog at. is In we really and look funded

Great. And you rate higher? exceptional you quarter. of Middle one trend visited Middle built new and opportunities customer the that mentioned East Carey, this revenue are can from the pipeline your pretty Is saw how continue that cause there to recently growth to East, in you the run final futuristic in that a one. for customer being also cities your

with a industrial with to there, I'm say ago the projects. we've definitely Yeah, cities. the two these years UAE. a all our Saudi that Oxagon There's been couple mostly, were is able fortunate giga we And Louie. series got success to Saudi, going continue NEOM, in of award. floor next the but we has also And on very ground of the

Saudi. UAE, would such of very quite one robust example. there. We urban robust I development a But great in pipeline say EMR companies pipeline a in be also bit where we're the But doing for have would work as

Matt Carey, Thanks, and good. Sounds Dave.

Thanks, Louie.

next Gavin Sachs. from with Goldman will Parsons come question Our

You go may ahead. now

morning. good Hey,

Gavin. morning, Good

Good morning, Gavin.

East sized guess, Middle what's build? total that number loaded over lifetime is So program spread of city the spend sole-sourced I is think maybe that or the question And and of front-end the numbers you is, the some of Carey, how much you? of kind booked giga overall that for you project to cities there? addressable maybe How the I those $XXX is much total management guys million. of

Yes.

decade-long are management, So programs. on have partner using can these percent be specific they're I towards called how what's don't tell long-term are going They're to model such because starting is a much What program new an I integrated delivery now, these a it go will you model. but programs.

three they for mentioned. will the of So each companies I that projects of announcing selection be the

now be that source. awarded will split basically we've sole three the work the So, been among for those. companies

Did timing already the give contracts $XXX that you've you million Okay. on booked?

those. We working started. already they've we're already on Well,

Is that one-year duration?

is million. duration the year $XXX X.X for

Got it.

and NCI Infrastructure trend that lower And you is Okay. said then Critical time. over I going to think

quarter I said of of help majority drivers in at that had step-up the higher than ex from to core was today you you've Can federal drove X% that critical in in the some think and NCI it can surpass margin the while bridge point? kind mid the single-digits of biggest this you the just sequential a one infrastructure margin the margin.

Yes.

drivers, the is now I two We're had down those once And So first, third legacy and programs. already get these off these the operational. one key to our fully think what we've books. it's of complete

wrap two have got programs we we up. So

will them up year, early XXXX. to wrap at end of other next of second one the year One quarter next the

execution. help performance So alone will that us improved

As we have lot end visibility. closer to of more a get these the we

So about think that's move along bidding earlier And pricing pricing the we're to we given spend strength. going from that global margin. that talked significant. help And strength as to be get will the that our infrastructure fact the we're I we've that got going higher-margin I expand work

you. Thank

Thank you.

Thanks, Gavin.

That is for to have for remarks. any back all the over Spille would the closing time to conference like we turn I Dave questions.

us joining for morning. this Thanks you. Thank

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