Parsons Corporation

Good day and thank you for standing by. Welcome to the first quarter 2022 Parsons Corporation earnings conference call. At this time, all participants are in listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star, then 1 on your telephone keypad. Please be advised today's conference may be recorded. If you require operator assistance during the call, please press star, then 0. I'd now like to hand the conference over to your host today, Dave Spilly, Senior Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, and thank you for joining us today to discuss our first quarter of 2022 financial results. Please note that we provide presentation slides on the Investor Relations section of our website. On the call with me today are Kerry Smith, President and CEO, and George Ball, CFO. Today, Kerry will discuss our corporate strategy and operational highlights, and then George will provide an overview of our first quarter financial results. We then will close with a question and answer session. Management may also make forward-looking statements during the call regarding future events, anticipated future trends, and anticipated future performance of the company. We caution you that such statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ materially from those projected in forward-looking statements due to a variety of factors. These risk factors are described in our Form 10-K for fiscal year ended December 31, 2021 and other SEC filings. Please refer to our earnings press release for Parson's 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 their comparable GAAP measures. I now will turn the call over to Carrie.

Thank you, Dave. Good morning, everyone, and welcome to Parson's first quarter 2022 earnings call. We delivered strong first quarter financial results and continued the momentum established in the second half of 2021. We generated healthy organic revenue growth in both business segments, reported our highest first quarter adjusted EBITDA on operating cash flow since our IPO in May 2019, won three contract awards over $100 million, and continued strong hiring and retention. For the full year, we are reiterating our guidance across the board. During the quarter, we generated total year-over-year growth of 9% with contributions from both segments and all four business units. Our year-over-year organic revenue growth was 6%, including 8% within our critical infrastructure segment and 4% within our federal solutions segment. We also grew adjusted EBIT off 8% year-over-year and improved operating cash flow by $40 million from the prior year period. I attribute this success to both our strategic evolution to an integrated solutions provider as well as our strong operating discipline. We lead with differentiated technology, have proven our ability to recruit and retain employees, and have a strong position in two complementary, enduring, high-growth markets that are well aligned with macroeconomic trends and United States federal government priorities. This balanced portfolio across critical infrastructure and national security markets is a differentiator for Parsons. We continue to be excited about the position of our critical infrastructure business given global demand. In the United States, the infrastructure bill priorities of transportation, environmental remediation, and water and wastewater treatment align well with persons' capabilities. We're also seeing increased infrastructure spending in Canada, and continued oil price strength is enabling our Middle East customers to move forward with new projects. Demand for our federal solutions capabilities, such as cyber, space, missile defense, and C5ISR is rising due to the threat environment focused on technologically advanced near-peer competitors. Today, we're facing increased cyber attacks from nation, state, and other actors. We have a space race that's increasingly crowded and contested, and which includes anti-satellite and hypersonic threats. Parsons is well-positioned to offer solutions to address many of these challenges. Our two segments are highly complementary, and we're uniquely positioned with our collective credentials. We're bringing federal capabilities in cyber, artificial intelligence, data analytics, and cloud-enabled solutions to our critical infrastructure customers. We also leverage our expansive critical infrastructure capabilities in design, program management, and environmental planning and remediation to our federal customers. We will continue to benefit from our balanced portfolio as threats evolve and the world becomes more connected and reliant on data that's essential to our national security interests and our ability to safely and efficiently move both people and goods with resilient and sustainable infrastructure. Our ability to successfully deliver on our customers' missions continues to enable us to win large strategic contracts. During the first quarter, we won three contracts valued at more than $100 million. We were awarded an option year exercise for $118 million by the United States General Services Administration under the Combatant Command Cyber Mission Support Contract. Under this contract, which represents new work, we will be researching, developing, testing, and evaluating tailored cyber solutions for cyberspace operations, advanced concepts and technologies, and integrating operational platforms. We also received $116 million of contract growth on our FAA program for modernizing the United States National Airspace System. The bipartisan infrastructure bill provided $5 billion to replace air traffic facilities, update and upgrade equipment including landing and navigational aids, and improve safety, security, and environmental standards at facilities. And this FAA contract is a great representative example of the complementary nature of our federal solutions and critical infrastructure segments. As noted on our last earnings call, we were awarded a new task order to provide testing solutions in response to the COVID-19 pandemic for the Department of Homeland Security, Immigration, and Customs Enforcement facilities across the United States. This award has a potential total ceiling value, including surge capacity, of more than $100 million. Realization of this ceiling value will depend upon the future of the pandemic and the long-term need for testing. In the first quarter, we also won two Middle East contracts worth a combined value of over $75 million related to Saudi Arabia's Vision 2030 to redefine urban living in industrial cities within the kingdom. After the first quarter closed, we received a $149 million contract value increase on a program management contract for the Riyadh Metro Program, which is the largest metro system development project in the world. Also after first quarter closed, we were awarded a $75 million task order contract by a rail customer for a series of infrastructure projects. Parsons remains a leader in the rail transit sector, and we're pleased to see the strong investment of our nation's rail system in the Infrastructure Investment and Jobs Act. Collectively, these awards highlight our ability to staff new contracts and successfully deliver on our customers' missions. as well as win contracts in well-funded areas of national security and infrastructure importance. Our competitiveness is tied to our team's effort and talent, but also the capabilities that we've added to our portfolio through strategic M&A. During the quarter, we also received notable recognition for our diversity and inclusion initiatives, and we were named one of the world's most ethical companies by Ethisphere for the 13th consecutive year. A summary of the specific ESG awards we won during the quarter are listed in today's earnings press release. We have a strong commitment to ESG, which is interwoven within our core values, how we operate as a company, and the portfolio we deliver to our customers. Accordingly, we made a strategic hire of an ESG vice president to lead this important function across persons. In summary, we delivered a strong first quarter. We generated healthy organic revenue growth in both segments, reported our highest first quarter adjusted EBITDA and operating cash flow since our IPO, continued to win large contracts, maintained our hiring momentum, and continued to be recognized as an employer of choice. These results build on our momentum from the back half of last year. As I look forward, I am very excited about our business. We are well positioned in two growing, enduring, and complementary markets. We have made significant strides in recruiting and retention and solidified our base of business by winning all major recent repeat contracts. We have over two years of revenue and backlog and a strong balance sheet that will enable us to continue to make ongoing organic and M&A investments to drive growth and expand margins. With that, I'll turn the call over to George to discuss our first quarter financial highlights. George?