v3.25.4
Segments Information
 12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
Segments Information
20.
Segments Information

The Company operates in two reportable segments: Federal Solutions and Critical Infrastructure.

The Federal Solutions segment provides advanced technical solutions to the U.S. government, delivering timely, cost-effective hardware, software and services for mission-critical projects. The segment provides advanced technologies, supporting national security missions in cyber operations, missile defense, and military facility modernization, logistics support, hazardous material remediation and engineering services.

The Critical Infrastructure segment provides integrated engineering and management services for complex physical and digital infrastructure around the globe. The Critical Infrastructure segment is a technology innovator focused on next generation digital systems and complex structures. Industry leading capabilities in engineering and project management allow the Company to deliver significant value to customers by employing cutting-edge technologies, improving timelines and reducing costs.

The Company defines its reportable segments based on the way the chief operating decision maker (“CODM”), its Chief Executive Officer, evaluates the performance of each segment and manages the operations of the Company for purposes of allocating resources among the segments. The CODM evaluates segment operating performance using segment Revenue, segment direct cost of contracts, segment Selling, General and Administrative expense and segment Adjusted EBITDA attributable to Parsons Corporation.

 

The Company defines Adjusted EBITDA attributable to Parsons Corporation as Adjusted EBITDA excluding Adjusted EBITDA attributable to noncontrolling interests. The Company defines Adjusted EBITDA as net income (loss) attributable to Parsons Corporation, adjusted to include net income (loss) attributable to noncontrolling interests and to exclude interest expense (net of interest income), provision for income taxes, depreciation and amortization and certain other items that are not considered in the evaluation of ongoing operating performance. These other items include net income (loss) attributable to noncontrolling interests, asset impairment charges, income and expense recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs and expenses related to our prior restructuring.

 

Adjusted EBITDA is the measure of our operating performance used by the CODM to assess our segments’ financial performance. The CODM uses Adjusted EBITDA for business planning purposes, including to manage our segments against internal projected results of operations and measure the performance of our segments generally.

 

The following tables present segment information provided to the CODM, as of each fiscal year presented, along with a reconciliation of segment adjusted EBITDA attributable to Parsons Corporation to net income attributable to Parsons Corporation for the periods presented (in thousands):

 

 

 

Year Ended

 

 

 

December 31, 2025

 

 

 

Federal
Solutions

 

 

Critical
Infrastructure

 

 

Total

 

Revenue

 

$

3,220,797

 

 

$

3,143,448

 

 

$

6,364,245

 

Direct cost of contracts

 

 

(2,530,560

)

 

 

(2,402,151

)

 

 

(4,932,711

)

Selling, general and administrative expenses (a)

 

 

(179,032

)

 

 

(186,893

)

 

 

(365,925

)

Equity in earnings (losses) of unconsolidated joint ventures

 

 

4,107

 

 

 

(1,524

)

 

 

2,583

 

Other segment items (b)

 

 

(234,196

)

 

 

(292,774

)

 

 

(526,970

)

Adjusted EBITDA attributable to Parsons Corporation

 

$

281,116

 

 

$

260,106

 

 

 

541,222

 

Reconciliation: Segment Adjusted EBITDA to Net Income Attributable to Parsons Corporation

 

 

 

 

 

 

 

 

 

Adjusted EBITDA attributable to non-controlling interests

 

 

 

 

 

 

 

 

68,084

 

Depreciation and amortization

 

 

 

 

 

 

 

 

(116,486

)

Interest expense, net

 

 

 

 

 

 

 

 

(44,424

)

Income tax expense

 

 

 

 

 

 

 

 

(73,647

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

(40,225

)

Transaction related costs (c)

 

 

 

 

 

 

 

 

(18,205

)

Restructuring expense (d)

 

 

 

 

 

 

 

 

(2,653

)

Other (e)

 

 

 

 

 

 

 

 

(4,802

)

Net income including noncontrolling interests

 

 

 

 

 

 

 

 

308,864

 

Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

(67,725

)

Net income attributable to Parsons Corporation

 

 

 

 

 

 

 

$

241,139

 

 

 

 

Year Ended

 

 

 

December 31, 2024

 

 

 

Federal
Solutions

 

 

Critical
Infrastructure

 

 

Total

 

Revenue

 

$

4,007,114

 

 

$

2,743,462

 

 

$

6,750,576

 

Direct cost of contracts

 

 

(3,187,829

)

 

 

(2,156,325

)

 

 

(5,344,154

)

Selling, general and administrative expenses (a)

 

 

(157,442

)

 

 

(146,744

)

 

 

(304,186

)

Equity in earnings (losses) of unconsolidated joint ventures

 

 

3,254

 

 

 

(26,615

)

 

 

(23,361

)

Other segment items (b)

 

 

(249,759

)

 

 

(280,877

)

 

 

(530,636

)

Adjusted EBITDA attributable to Parsons Corporation

 

$

415,338

 

 

$

132,901

 

 

 

548,239

 

Reconciliation: Segment Adjusted EBITDA to Net Income Attributable to Parsons Corporation

 

 

 

 

 

 

 

 

 

Adjusted EBITDA attributable to non-controlling interests

 

 

 

 

 

 

 

 

56,714

 

Depreciation and amortization

 

 

 

 

 

 

 

 

(99,251

)

Interest expense, net

 

 

 

 

 

 

 

 

(40,154

)

Income tax expense

 

 

 

 

 

 

 

 

(76,986

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

(61,492

)

Convertible debt repurchase loss

 

 

 

 

 

 

 

 

(18,355

)

Transaction related costs (c)

 

 

 

 

 

 

 

 

(17,138

)

Other (e)

 

 

 

 

 

 

 

 

(912

)

Net income including noncontrolling interests

 

 

 

 

 

 

 

 

290,665

 

Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

(55,612

)

Net income attributable to Parsons Corporation

 

 

 

 

 

 

 

$

235,053

 

 

 

 

 

Year Ended

 

 

 

December 31, 2023

 

 

 

Federal
Solutions

 

 

Critical
Infrastructure

 

 

Total

 

Revenue

 

$

3,020,701

 

 

$

2,422,048

 

 

$

5,442,749

 

Direct cost of contracts

 

 

(2,375,350

)

 

 

(1,861,385

)

 

 

(4,236,735

)

Selling, general and administrative expenses (a)

 

 

(129,507

)

 

 

(129,747

)

 

 

(259,254

)

Equity in earnings (losses) of unconsolidated joint ventures

 

 

4,190

 

 

 

(51,941

)

 

 

(47,751

)

Other segment items (b)

 

 

(230,784

)

 

 

(251,190

)

 

 

(481,974

)

Adjusted EBITDA attributable to Parsons Corporation

 

$

289,250

 

 

$

127,785

 

 

 

417,035

 

Reconciliation: Segment Adjusted EBITDA to Net Income Attributable to Parsons Corporation

 

 

 

 

 

 

 

 

 

Adjusted EBITDA attributable to non-controlling interests

 

 

 

 

 

 

 

 

47,638

 

Depreciation and amortization

 

 

 

 

 

 

 

 

(119,973

)

Interest expense, net

 

 

 

 

 

 

 

 

(29,306

)

Income tax expense

 

 

 

 

 

 

 

 

(56,138

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

(36,151

)

Transaction related costs (c)

 

 

 

 

 

 

 

 

(12,013

)

Restructuring expense (d)

 

 

 

 

 

 

 

 

(1,244

)

Other (e)

 

 

 

 

 

 

 

 

(1,933

)

Net income including noncontrolling interests

 

 

 

 

 

 

 

 

207,915

 

Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

(46,766

)

Net income attributable to Parsons Corporation

 

 

 

 

 

 

 

$

161,149

 

 

(a)
The amount of selling, general and administrative expenses (“SG&A”) is total SG&A excluding allocations.
(b)
The amount of other segment items is the difference between segment revenue less direct cost of contracts, segment SG&A expenses, equity in earnings (losses) of unconsolidated joint ventures, and Adjusted EBITDA attributable to Parsons Corporation. Other segment items primarily include:
i.
Corporate and shared segment SG&A (excluding Adjusted EBITDA items)
ii.
Noncontrolling interests attributable to operating income and other income/expense
iii.
Bad debt expense
iv.
Sublease income
v.
Foreign currency gain/loss, and
vi.
Certain other income/expense items
(c)
Reflects costs incurred in connection with acquisitions, and other non-recurring transaction costs, primarily fees paid for professional services and employee retention.
(d)
Reflects costs associated with and related to our corporate restructuring initiatives.
(e)
Includes a combination of gain/loss related to sale of fixed assets, software implementation costs, and other individually insignificant items that are non-recurring in nature.

Asset information by segment is not a key measure of performance used by the CODM.

The following table presents revenues and property and equipment, net by geographic area (in thousands):

 

 

 

2025

 

 

2024

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

 

North America

 

$

5,182,232

 

 

$

5,677,933

 

 

$

4,481,492

 

Middle East

 

 

1,162,213

 

 

 

1,052,509

 

 

 

943,175

 

Rest of World

 

 

19,800

 

 

 

20,134

 

 

 

18,082

 

Total revenues

 

$

6,364,245

 

 

$

6,750,576

 

 

$

5,442,749

 

Property and equipment, net

 

 

 

 

 

 

 

 

 

North America

 

$

137,894

 

 

$

101,044

 

 

$

91,766

 

Middle East

 

 

13,167

 

 

 

10,531

 

 

 

7,191

 

Total property and equipment, net

 

$

151,061

 

 

$

111,575

 

 

$

98,957

 

 

North America revenue includes $4.7 billion, $5.2 billion and $4.1 billion of United States revenue for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively. North America property and equipment, net includes $130.5 million, $94.0 million and $83.9 million of property and equipment, net in the United States at December 31, 2025, December 31, 2024 and December 31, 2023, respectively.

The geographic location of revenue is determined by the location of the customer.

The following table presents revenues by business lines (in thousands):

 

 

 

2025

 

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

 

 

 

Defense & Intelligence

 

$

1,872,635

 

 

$

1,772,481

 

 

$

1,539,968

 

Engineered Systems

 

 

1,348,162

 

 

 

2,234,633

 

 

 

1,480,733

 

Federal Solutions revenues

 

 

3,220,797

 

 

 

4,007,114

 

 

 

3,020,701

 

Infrastructure – North America

 

 

1,973,356

 

 

 

1,683,664

 

 

 

1,472,768

 

Infrastructure – Europe, Middle East and Africa

 

 

1,170,092

 

 

 

1,059,798

 

 

 

949,280

 

Critical Infrastructure revenues

 

 

3,143,448

 

 

 

2,743,462

 

 

 

2,422,048

 

Total revenues

 

$

6,364,245

 

 

$

6,750,576

 

 

$

5,442,749

 

 

 

Effective October 1, 2023, the Company reorganized its Critical Infrastructure business units from Mobility Solutions and Connected Communities to Infrastructure – North America and Infrastructure – Europe, Middle East and Africa. The 2023 information in the table above has been reclassified to conform to the business unit changes.