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Segment Information
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Segment Information
18.
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 services for mission-critical projects. The segment provides advanced technologies, supporting national security missions in cybersecurity, 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 and segment Adjusted EBITDA attributable to Parsons Corporation.

The following table summarizes business segment revenue for the periods presented (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

Federal Solutions revenue

 

$

1,105,580

 

 

$

780,114

 

 

$

3,003,791

 

 

$

2,177,457

 

Critical Infrastructure revenue

 

 

704,536

 

 

 

638,457

 

 

 

2,012,468

 

 

 

1,771,066

 

Total revenue

 

$

1,810,116

 

 

$

1,418,571

 

 

$

5,016,259

 

 

$

3,948,523

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

Equity in (losses) earnings of unconsolidated joint ventures:

 

 

 

 

 

 

 

 

 

 

 

 

Federal Solutions

 

$

1,002

 

 

$

1,435

 

 

$

1,999

 

 

$

3,502

 

Critical Infrastructure

 

 

(130

)

 

 

8,827

 

 

 

(20,024

)

 

$

995

 

Total equity in (losses) earnings of unconsolidated joint ventures

 

$

872

 

 

$

10,262

 

 

$

(18,025

)

 

$

4,497

 

 

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, equity-based compensation, 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. The following table reconciles business segment

Adjusted EBITDA attributable to Parsons Corporation to Net Income attributable to Parsons Corporation for the periods presented (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Adjusted EBITDA attributable to Parsons Corporation

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

     Federal Solutions

 

$

120,091

 

 

$

65,039

 

 

$

315,413

 

 

$

206,827

 

     Critical Infrastructure

 

 

33,007

 

 

 

50,188

 

 

 

101,582

 

 

 

95,481

 

Adjusted EBITDA attributable to Parsons Corporation

 

 

153,098

 

 

 

115,227

 

 

 

416,995

 

 

 

302,308

 

Adjusted EBITDA attributable to noncontrolling interests

 

 

13,913

 

 

 

12,606

 

 

 

41,339

 

 

 

34,222

 

Depreciation and amortization

 

 

(24,542

)

 

 

(30,154

)

 

 

(73,513

)

 

 

(87,202

)

Interest expense, net

 

 

(8,802

)

 

 

(8,120

)

 

 

(29,831

)

 

 

(20,778

)

Income tax benefit (expense)

 

 

(22,518

)

 

 

(15,218

)

 

 

(12,699

)

 

 

(41,944

)

Equity-based compensation expense

 

 

(21,251

)

 

 

(9,075

)

 

 

(44,554

)

 

 

(25,092

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

(211,018

)

 

 

-

 

Transaction-related costs (a)

 

 

(3,770

)

 

 

(5,493

)

 

 

(8,958

)

 

 

(9,028

)

Restructuring expense (b)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(546

)

Other (c)

 

 

(539

)

 

 

38

 

 

 

(3,565

)

 

 

(2,082

)

Net (loss) income including noncontrolling interests

 

 

85,589

 

 

 

59,811

 

 

 

74,196

 

 

 

149,858

 

Net income attributable to noncontrolling interests

 

 

13,638

 

 

 

12,364

 

 

 

40,428

 

 

 

33,617

 

Net (loss) income attributable to Parsons Corporation

 

$

71,951

 

 

$

47,447

 

 

$

33,768

 

 

$

116,241

 

 

(a)
Reflects costs incurred in connection with acquisitions and other non-recurring transaction costs, primarily fees paid for professional services and employee retention.
(b)
Reflects costs associated with corporate restructuring initiatives.
(c)
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 tables present revenues and property and equipment, net by geographic area (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

1,541,209

 

 

$

1,166,547

 

 

$

4,232,786

 

 

$

3,251,552

 

Middle East

 

 

264,437

 

 

 

247,689

 

 

 

769,421

 

 

 

684,340

 

Rest of World

 

 

4,470

 

 

 

4,335

 

 

 

14,052

 

 

 

12,631

 

Total Revenue

 

$

1,810,116

 

 

$

1,418,571

 

 

$

5,016,259

 

 

$

3,948,523

 

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

 

 

 

September 30, 2024

 

 

December 31, 2023

 

Property and Equipment, Net

 

 

 

 

 

 

North America

 

$

91,327

 

 

$

91,766

 

Middle East

 

 

9,866

 

 

 

7,191

 

Total Property and Equipment, Net

 

$

101,193

 

 

$

98,957

 

North America includes revenue in the United States for the three months ended September 30, 2024 and September 30, 2023 of $1.4 billion and $1.1 billion, respectively and for the nine months ended September 30, 2024 and September 30, 2023 of $3.9 billion and $3.0 billion, respectively. North America property and equipment, net includes $83.4 million and $83.9 million of property and equipment, net in the United States at September 30, 2024 and December 31, 2023, respectively.

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

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Defense and Intelligence

 

$

459,318

 

 

$

398,632

 

 

$

1,288,102

 

 

$

1,144,320

 

Engineered Systems

 

 

646,262

 

 

 

381,482

 

 

 

1,715,689

 

 

 

1,033,137

 

Federal Solutions revenues

 

 

1,105,580

 

 

 

780,114

 

 

 

3,003,791

 

 

 

2,177,457

 

Infrastructure – North America

 

 

438,307

 

 

 

389,452

 

 

 

1,237,752

 

 

 

1,082,164

 

Infrastructure – Europe, Middle East and Africa

 

 

266,229

 

 

 

249,005

 

 

 

774,716

 

 

 

688,902

 

Critical Infrastructure revenues

 

 

704,536

 

 

 

638,457

 

 

 

2,012,468

 

 

 

1,771,066

 

Total Revenue

 

$

1,810,116

 

 

$

1,418,571

 

 

$

5,016,259

 

 

$

3,948,523

 

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 prior year information in the table above has been reclassified to conform to the business unit changes.