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Segment Information
 9 Months Ended
Sep. 30, 2025
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 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 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, 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 (losses) 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 (d)

 

 

 

 

 

 

 

 

(292

)

Other (e)

 

 

 

 

 

 

 

 

(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

 

 

 

 

 

Three Months Ended

 

 

 

September 30, 2024

 

 

 

Federal
Solutions

 

 

Critical
Infrastructure

 

 

Total

 

Revenue

 

$

1,105,580

 

 

$

704,536

 

 

$

1,810,116

 

Direct cost of contracts

 

 

(881,208

)

 

 

(568,623

)

 

 

(1,449,831

)

Selling, general and administrative expenses (a)

 

 

(42,816

)

 

 

(34,776

)

 

 

(77,592

)

Equity in earnings (losses) of unconsolidated joint ventures

 

 

1,002

 

 

 

(130

)

 

 

872

 

Other segment items (b)

 

 

(62,467

)

 

 

(68,000

)

 

 

(130,467

)

Adjusted EBITDA attributable to Parsons Corporation

 

$

120,091

 

 

$

33,007

 

 

 

153,098

 

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

 

 

 

 

 

 

 

 

 

Adjusted EBITDA attributable to non-controlling interests

 

 

 

 

 

 

 

 

13,913

 

Depreciation and amortization

 

 

 

 

 

 

 

 

(24,542

)

Interest expense, net

 

 

 

 

 

 

 

 

(8,802

)

Income tax expense

 

 

 

 

 

 

 

 

(22,518

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

(21,251

)

Transaction related costs (c)

 

 

 

 

 

 

 

 

(3,770

)

Other (e)

 

 

 

 

 

 

 

 

(539

)

Net income including noncontrolling interests

 

 

 

 

 

 

 

 

85,589

 

Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

(13,638

)

Net income attributable to Parsons Corporation

 

 

 

 

 

 

 

$

71,951

 

 

 

 

 

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 losses 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 (d)

 

 

 

 

 

 

 

 

(2,653

)

Other (e)

 

 

 

 

 

 

 

 

(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

 

 

 

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

 

Federal
Solutions

 

 

Critical
Infrastructure

 

 

Total

 

Revenue

 

$

3,003,791

 

 

$

2,012,468

 

 

$

5,016,259

 

Direct cost of contracts

 

 

(2,394,247

)

 

 

(1,585,341

)

 

 

(3,979,589

)

Selling, general and administrative expenses (a)

 

 

(113,448

)

 

 

(103,611

)

 

 

(217,059

)

Equity in losses of unconsolidated joint ventures

 

 

1,999

 

 

 

(20,024

)

 

 

(18,025

)

Other segment items (b)

 

 

(182,682

)

 

 

(201,910

)

 

 

(384,593

)

Adjusted EBITDA attributable to Parsons Corporation

 

$

315,413

 

 

$

101,582

 

 

 

416,995

 

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

 

 

 

 

 

 

 

 

 

Adjusted EBITDA attributable to non-controlling interests

 

 

 

 

 

 

 

 

41,339

 

Depreciation and amortization

 

 

 

 

 

 

 

 

(73,513

)

Interest expense, net

 

 

 

 

 

 

 

 

(29,831

)

Income tax expense

 

 

 

 

 

 

 

 

(58,257

)

Equity-based compensation expense

 

 

 

 

 

 

 

 

(44,554

)

Convertible debt repurchase loss

 

 

 

 

 

 

 

 

(18,355

)

Transaction related costs (c)

 

 

 

 

 

 

 

 

(8,958

)

Other (e)

 

 

 

 

 

 

 

 

(3,565

)

Net income including noncontrolling interests

 

 

 

 

 

 

 

 

221,301

 

Net income attributable to noncontrolling interests

 

 

 

 

 

 

 

 

(40,428

)

Net income attributable to Parsons Corporation

 

 

 

 

 

 

 

$

180,873

 

 

(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 in 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 tables present revenues and property and equipment, net by geographic area (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2025

 

 

September 30, 2024

 

 

September 30, 2025

 

 

September 30, 2024

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

1,313,775

 

 

$

1,541,209

 

 

$

3,907,105

 

 

$

4,232,786

 

Middle East

 

 

302,886

 

 

 

264,437

 

 

 

838,656

 

 

 

769,421

 

Rest of World

 

 

5,087

 

 

 

4,470

 

 

 

14,670

 

 

 

14,052

 

Total Revenue

 

$

1,621,748

 

 

$

1,810,116

 

 

$

4,760,431

 

 

$

5,016,259

 

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

 

 

 

September 30, 2025

 

 

December 31, 2024

 

Property and Equipment, Net

 

 

 

 

 

 

North America

 

$

113,585

 

 

$

101,044

 

Middle East

 

 

12,282

 

 

 

10,531

 

Total Property and Equipment, Net

 

$

125,867

 

 

$

111,575

 

North America includes revenue in the United States for the three months ended September 30, 2025 and September 30, 2024 of $1.2 billion and $1.4 billion, respectively and $3.5 billion and $3.9 billion for the nine months ended September 30, 2025 and September 30, 2024, respectively. North America property and equipment, net includes $106.0 million and $94.0 million of property and equipment, net in the United States at September 30, 2025 and December 31, 2024, respectively.

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

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2025

 

 

September 30, 2024

 

 

September 30, 2025

 

 

September 30, 2024

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Defense and Intelligence

 

$

468,935

 

 

$

459,318

 

 

$

1,369,832

 

 

$

1,288,102

 

Engineered Systems

 

 

319,672

 

 

 

646,262

 

 

 

1,066,796

 

 

 

1,715,689

 

Federal Solutions revenues

 

 

788,607

 

 

 

1,105,580

 

 

 

2,436,628

 

 

 

3,003,791

 

Infrastructure – North America

 

 

528,564

 

 

 

438,307

 

 

 

1,479,720

 

 

 

1,237,752

 

Infrastructure – Europe, Middle East and Africa

 

 

304,577

 

 

 

266,229

 

 

 

844,083

 

 

 

774,716

 

Critical Infrastructure revenues

 

 

833,141

 

 

 

704,536

 

 

 

2,323,803

 

 

 

2,012,468

 

Total Revenue

 

$

1,621,748

 

 

$

1,810,116

 

 

$

4,760,431

 

 

$

5,016,259