| Segment 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 solutions for mission-critical projects. The segment provides advanced technologies, supporting national security missions in cyber operations, missile defense, space, electronic warfare and facility modernization, 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 design 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 period 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):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, 2026 |
|
|
|
Federal
Solutions |
|
|
Critical
Infrastructure |
|
|
Total |
|
Revenue |
|
$ |
804,553 |
|
|
$ |
845,995 |
|
|
$ |
1,650,548 |
|
Direct cost of contracts |
|
|
(621,008 |
) |
|
|
(647,473 |
) |
|
|
(1,268,481 |
) |
Selling, general and administrative expenses (a) |
|
|
(52,570 |
) |
|
|
(48,376 |
) |
|
|
(100,946 |
) |
Equity in earnings of unconsolidated joint ventures |
|
|
1,787 |
|
|
|
5,455 |
|
|
|
7,242 |
|
Other segment items (b) |
|
|
(58,636 |
) |
|
|
(75,347 |
) |
|
|
(133,983 |
) |
Adjusted EBITDA attributable to Parsons Corporation |
|
$ |
74,126 |
|
|
$ |
80,254 |
|
|
|
154,380 |
|
Reconciliation: Segment Adjusted EBITDA to Net Income Attributable to Parsons Corporation |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA attributable to non-controlling interests |
|
|
|
|
|
|
|
|
13,463 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
(34,118 |
) |
Interest expense, net |
|
|
|
|
|
|
|
|
(15,437 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
(20,446 |
) |
Equity-based compensation expense |
|
|
|
|
|
|
|
|
(11,518 |
) |
Transaction related costs (c) |
|
|
|
|
|
|
|
|
(16,180 |
) |
Other (d) |
|
|
|
|
|
|
|
|
(2,733 |
) |
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
67,411 |
|
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(13,258 |
) |
Net income attributable to Parsons Corporation |
|
|
|
|
|
|
|
$ |
54,153 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
September 30, 2025 |
|
|
|
Federal
Solutions |
|
|
Critical
Infrastructure |
|
|
Total |
|
Revenue |
|
$ |
788,607 |
|
|
$ |
833,141 |
|
|
$ |
1,621,748 |
|
Direct cost of contracts |
|
|
(612,500 |
) |
|
|
(649,393 |
) |
|
|
(1,261,893 |
) |
Selling, general and administrative expenses (a) |
|
|
(47,980 |
) |
|
|
(44,259 |
) |
|
|
(92,239 |
) |
Equity in earnings of unconsolidated joint ventures |
|
|
986 |
|
|
|
7,280 |
|
|
|
8,266 |
|
Other segment items (b) |
|
|
(56,612 |
) |
|
|
(78,966 |
) |
|
|
(135,578 |
) |
Adjusted EBITDA attributable to Parsons Corporation |
|
$ |
72,501 |
|
|
$ |
67,803 |
|
|
|
140,304 |
|
Reconciliation: Segment Adjusted EBITDA to Net Income Attributable to Parsons Corporation |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA attributable to non-controlling interests |
|
|
|
|
|
|
|
|
17,833 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
(29,849 |
) |
Interest expense, net |
|
|
|
|
|
|
|
|
(11,696 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
(16,035 |
) |
Equity-based compensation expense |
|
|
|
|
|
|
|
|
(11,568 |
) |
Transaction related costs (c) |
|
|
|
|
|
|
|
|
(5,074 |
) |
Restructuring expense (e) |
|
|
|
|
|
|
|
|
(292 |
) |
Other (d) |
|
|
|
|
|
|
|
|
(1,829 |
) |
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
81,794 |
|
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(17,671 |
) |
Net income attributable to Parsons Corporation |
|
|
|
|
|
|
|
$ |
64,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
September 30, 2026 |
|
|
|
Federal
Solutions |
|
|
Critical
Infrastructure |
|
|
Total |
|
Revenue |
|
$ |
2,323,769 |
|
|
$ |
2,393,822 |
|
|
$ |
4,717,591 |
|
Direct cost of contracts |
|
|
(1,874,091 |
) |
|
|
(1,808,775 |
) |
|
|
(3,682,866 |
) |
Selling, general and administrative expenses (a) |
|
|
(147,818 |
) |
|
|
(144,641 |
) |
|
|
(292,459 |
) |
Equity in earnings (losses) of unconsolidated joint ventures |
|
|
5,030 |
|
|
|
(25,380 |
) |
|
|
(20,350 |
) |
Other segment items (b) |
|
|
(174,997 |
) |
|
|
(226,864 |
) |
|
|
(401,861 |
) |
Adjusted EBITDA attributable to Parsons Corporation |
|
$ |
131,893 |
|
|
$ |
188,162 |
|
|
|
320,055 |
|
Reconciliation: Segment Adjusted EBITDA to Net Income Attributable to Parsons Corporation |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA attributable to non-controlling interests |
|
|
|
|
|
|
|
|
40,937 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
(106,681 |
) |
Interest expense, net |
|
|
|
|
|
|
|
|
(45,445 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
(40,755 |
) |
Equity-based compensation expense |
|
|
|
|
|
|
|
|
(31,049 |
) |
Transaction related costs (c) |
|
|
|
|
|
|
|
|
(17,493 |
) |
Restructuring expense (e) |
|
|
|
|
|
|
|
|
- |
|
Other (d) |
|
|
|
|
|
|
|
|
12,588 |
|
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
132,157 |
|
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(40,297 |
) |
Net income attributable to Parsons Corporation |
|
|
|
|
|
|
|
$ |
91,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
September 30, 2025 |
|
|
|
Federal
Solutions |
|
|
Critical
Infrastructure |
|
|
Total |
|
Revenue |
|
$ |
2,436,628 |
|
|
$ |
2,323,803 |
|
|
$ |
4,760,431 |
|
Direct cost of contracts |
|
|
(1,917,218 |
) |
|
|
(1,781,022 |
) |
|
|
(3,698,240 |
) |
Selling, general and administrative expenses (a) |
|
|
(136,604 |
) |
|
|
(138,938 |
) |
|
|
(275,542 |
) |
Equity in earnings of unconsolidated joint ventures |
|
|
983 |
|
|
|
5,954 |
|
|
|
6,937 |
|
Other segment items (b) |
|
|
(168,684 |
) |
|
|
(217,614 |
) |
|
|
(386,298 |
) |
Adjusted EBITDA attributable to Parsons Corporation |
|
$ |
215,105 |
|
|
$ |
192,183 |
|
|
|
407,288 |
|
Reconciliation: Segment Adjusted EBITDA to Net Income Attributable to Parsons Corporation |
|
|
|
|
|
|
|
|
|
Adjusted EBITDA attributable to non-controlling interests |
|
|
|
|
|
|
|
|
48,756 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
(85,844 |
) |
Interest expense, net |
|
|
|
|
|
|
|
|
(33,301 |
) |
Income tax expense |
|
|
|
|
|
|
|
|
(53,702 |
) |
Equity-based compensation expense |
|
|
|
|
|
|
|
|
(30,190 |
) |
Transaction related costs (c) |
|
|
|
|
|
|
|
|
(13,910 |
) |
Restructuring expense (e) |
|
|
|
|
|
|
|
|
(2,653 |
) |
Other (d) |
|
|
|
|
|
|
|
|
(2,374 |
) |
Net income including noncontrolling interests |
|
|
|
|
|
|
|
|
234,070 |
|
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
|
|
(48,514 |
) |
Net income attributable to Parsons Corporation |
|
|
|
|
|
|
|
$ |
185,556 |
|
(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 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)Includes a combination of gain/loss related to sale of businesses and sale of fixed assets, software implementation costs, and other individually insignificant items that are non-recurring in nature. (e)Reflects costs associated with and related to our corporate restructuring in initiatives.
Asset information by segment is not a key measure of performance used by the CODM. The following tables present revenues and property and equipment, net by geographic area (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
1,339,507 |
|
|
$ |
1,313,775 |
|
|
$ |
3,827,218 |
|
|
$ |
3,907,105 |
|
Middle East |
|
|
306,462 |
|
|
|
302,886 |
|
|
|
875,850 |
|
|
|
838,656 |
|
Rest of World |
|
|
4,579 |
|
|
|
5,087 |
|
|
|
14,523 |
|
|
|
14,670 |
|
Total Revenue |
|
$ |
1,650,548 |
|
|
$ |
1,621,748 |
|
|
$ |
4,717,591 |
|
|
$ |
4,760,431 |
|
The geographic location of revenue is determined by the location of the customer.
|
|
|
|
|
|
|
|
|
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
Property and Equipment, Net |
|
|
|
|
|
|
North America |
|
$ |
155,087 |
|
|
$ |
137,894 |
|
Middle East |
|
|
13,199 |
|
|
|
13,167 |
|
Total Property and Equipment, Net |
|
$ |
168,286 |
|
|
$ |
151,061 |
|
North America includes revenue in the United States for the three months ended September 30, 2026 and September 30, 2025 of $1.2 billion and $1.2 billion, respectively and $3.5 billion and $3.5 billion for the nine months ended September 30, 2026 and September 30, 2025, respectively. North America property and equipment, net includes $148.6 million and $130.5 million of property and equipment, net in the United States as of September 30, 2026 and December 31, 2025, respectively. The following table presents revenues by business units (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Defense and Intelligence |
|
$ |
536,542 |
|
|
$ |
468,935 |
|
|
$ |
1,570,296 |
|
|
$ |
1,369,832 |
|
Engineered Systems |
|
|
268,011 |
|
|
|
319,672 |
|
|
|
753,473 |
|
|
|
1,066,796 |
|
Federal Solutions revenues |
|
|
804,553 |
|
|
|
788,607 |
|
|
|
2,323,769 |
|
|
|
2,436,628 |
|
Infrastructure – North America |
|
|
537,663 |
|
|
|
528,564 |
|
|
|
1,511,759 |
|
|
|
1,479,720 |
|
Infrastructure – Europe, Middle East and Africa |
|
|
308,332 |
|
|
|
304,577 |
|
|
|
882,063 |
|
|
|
844,083 |
|
Critical Infrastructure revenues |
|
|
845,995 |
|
|
|
833,141 |
|
|
|
2,393,822 |
|
|
|
2,323,803 |
|
Total Revenue |
|
$ |
1,650,548 |
|
|
$ |
1,621,748 |
|
|
$ |
4,717,591 |
|
|
$ |
4,760,431 |
|
|