The following discussion and analysis is intended to help investors understand our business, financial condition, results of operations, liquidity and capital resources. You should read this discussion together with our consolidated financial statements and related notes thereto included elsewhere in this Form 10-Q and in conjunction with the Company’s Form 10-K for the year ended December 31, 2025. Certain amounts may not foot due to rounding. The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Risk Factors” and “Special Note Regarding Forward-Looking Statements” in the Company’s Form 10-K for the year ended December 31, 2025. We undertake no obligation to revise publicly any forward-looking statements. Actual results may differ materially from those contained in any forward-looking statements. PARSONS CORPORATION Enabling a safer, smarter, and more interconnected world. Engineered solutions for complex physical and digital infrastructure challenges SEGMENTS KEY FACTS AND FIGURES Technology-driven solutions for defense and intelligence customers FINANCIAL SNAPSHOT $4B Total Revenue Trailing 12-Months (Q2 2020) $4B Contract Awards Trailing 12-Months (Q2 2020) 75+ Years Of History Federal Solutions 49% Critical Infrastructure 51% Federal Solutions 58% Critical Infrastructure 42% Federal Solutions Critical Infrastructure ~16K Employees 6% Revenue Growth Trailing 12-Months (Q2 2020) 1.0X Book-To-Bill Ratio Trailing 12-Months (Q2 2020) $7.7B Backlog As Of 6/30/2020 PARSONS CORPORATION. Overview We are a leading provider of the integrated solutions and services required in today’s complex security environment and a world of digital transformation. We deliver innovative technology-driven solutions to customers worldwide. We have developed significant expertise and differentiated capabilities in key areas of cyber and electronic warfare, space and missile defense, critical infrastructure protection, transportation, water and environment, and urban development. By combining our talented team of professionals and advanced technology, we solve complex technical challenges to enable a safer, smarter, more secure and more connected world. We operate in two reporting segments, Federal Solutions and Critical Infrastructure. Our Federal Solutions business is an advanced technology provider to the U.S. government. Our Critical Infrastructure business provides integrated design and engineering services for complex physical and digital infrastructure around the globe. Our employees provide services pursuant to contracts that we are awarded by the customer and specific task orders relating to such contracts. These contracts are often multi-year, which provides us backlog and visibility on our revenues for future periods. Many of our contracts and task orders are subject to renewal and rebidding at the end of their term, and some are subject to the exercise of contract options and issuance of task orders by the applicable government 34 entity. In addition to focusing on increasing our revenues through increased contract awards and backlog, we focus our financial performance on margin expansion and cash flow. Key Metrics We manage and assess the performance of our business by evaluating a variety of metrics. The following table sets forth selected key metrics (in thousands, except Book-to-Bill): June 30, 2026 June 30, 2025 Awards (year to date) $ 3,927,375 $ 3,272,551 Backlog (1) $ 9,256,893 $ 8,943,038 Book-to-Bill (year to date) 1.3 1.0 (1)Difference between our backlog of $9.3 billion and our remaining unsatisfied performance obligations, or RUPO, of $6.9 billion, each as of June 30, 2026, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable. Awards Awards generally represent the amount of revenue expected to be earned in the future from funded and unfunded contract awards received during the period. Contract awards include both new and re-compete contracts and task orders. Given that new contract awards generate growth, we closely track our new awards. The following table summarizes the year to-date value of new awards for the periods presented below (in thousands): Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Federal Solutions $ 985,300 $ 650,770 $ 2,016,634 $ 1,395,479 Critical Infrastructure $ 883,666 855,275 1,910,741 1,877,072 Total Awards $ 1,868,966 $ 1,506,045 $ 3,927,375 $ 3,272,551 The change in new awards from year to year is primarily due to ordinary course fluctuations in our business. The volume of contract awards can fluctuate in any given period due to win rate and the timing and size of the awards issued by our customers. The increase in awards for the three and six months ended June 30, 2026 in our Critical Infrastructure segment when compared to the corresponding period last year was primarily driven by an overall increase in awards in the current year period. The increase in awards for the three and six months ended June 30, 2026 in our Federal Solutions segment when compared to the corresponding period last year was primarily driven by significant awards. The comparable period included a delay in the timing of awards of a number of contracts being pursued. Backlog We define backlog to include the following two components: •Funded—Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts. •Unfunded—Unfunded backlog represents the revenue value of orders for services under existing contracts for which funding has not been appropriated or otherwise authorized less revenue previously recognized on these contracts. Unfunded backlog does not include potential task orders expected to be awarded under multiple awards IDIQ (indefinite delivery, indefinite quantity) contract vehicles, where task orders are competitively awarded and separately priced. 35 Backlog includes (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable. The following table summarizes the value of our backlog at the respective dates presented below (in thousands): June 30, 2026 June 30, 2025 Federal Solutions: Funded $ 1,868,875 $ 1,816,590 Unfunded 2,636,203 2,656,547 Total Federal Solutions 4,505,078 4,473,137 Critical Infrastructure: Funded 4,712,089 4,421,015 Unfunded 39,726 48,886 Total Critical Infrastructure 4,751,815 4,469,901 Total Backlog (1) $ 9,256,893 $ 8,943,038 (1)Difference between our backlog of $9.3 billion and our RUPO of $6.9 billion, each as of June 30, 2026, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable. Our backlog includes orders under contracts that in some cases extend for several years. For example, the U.S. Congress generally appropriates funds for our U.S. federal government customers on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years to complete. As a result, our federal contracts typically are only partially funded at any point during their term. All or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract. We expect to recognize $3.8 billion of our funded backlog at June 30, 2026 as revenues in the following twelve months. However, our U.S. federal government customers may cancel their contracts with us at any time through a termination for convenience or may elect to not exercise option periods under such contracts. In the case of a termination for convenience, we would not receive anticipated future revenues, but would generally be permitted to recover all or a portion of our incurred costs and fees for work performed. See “Risk Factors—Risk Relating to Our Business—We may not realize the full value of our backlog, which may result in lower-than-expected revenue” in the Company’s Form 10-K for the year ended December 31, 2025. The increase in backlog in the Critical Infrastructure segment was primarily from ordinary course fluctuations in our business and an overall increase in awards. The decrease in Federal Solutions backlog was primarily related to a reduction in work on our confidential contract as a result of the Department of State reorganization issued May 29, 2025, partially offset by an overall increase in awards. Book-to-Bill Book-to-bill is the ratio of total awards to total revenue recorded in the same period. Our management believes our book-to-bill ratio is a useful indicator of our potential future revenue growth in that it measures the rate at which we are generating new awards compared to the Company’s current revenue. To drive future revenue growth, our goal is for the level of awards in a given period to exceed the revenue booked. A book-to-bill ratio greater than 1.0 indicates that awards generated in a given period exceeded the revenue recognized in the same period, while a book-to-bill ratio of less than 1.0 indicates that awards generated in such period were less than the revenue recognized in such period. The following table sets forth the book-to-bill ratio for the periods presented below: Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Federal Solutions 1.3 0.8 1.3 0.8 Critical Infrastructure 1.1 1.1 1.2 1.3 Overall 1.2 1.0 1.3 1.0 36 Factors and Trends Affecting Our Results of Operations We believe that the financial performance of our business and our future success are dependent upon many factors, including those highlighted in this section. Our operating performance will depend upon many variables, including the success of our growth strategies and the timing and size of investments and expenditures that we choose to undertake, as well as market growth and other factors that are not within our control. Government Spending Changes in the relative mix of government spending and areas of spending growth, with shifts in priorities on homeland security, intelligence, defense-related programs, infrastructure and urbanization, and continued increased spending on technology and innovation, including cyber, artificial intelligence, connected communities and physical infrastructure, could impact our business and results of operations. Cost-cutting and efficiency initiatives, current and future budget restrictions, spending cuts and other efforts to reduce government spending could cause our government customers to reduce or delay funding or invest appropriated funds on a less consistent basis or not at all, and demand for our solutions or services could diminish. Furthermore, any disruption in the functioning of government agencies, including as a result of government closures and shutdowns, could have a negative impact on our operations and cause us to lose revenue or incur additional costs due to, among other things, our inability to deploy our staff to customer locations or facilities as a result of such disruptions. Federal Budget Uncertainty There is uncertainty around the timing, extent, nature and effect of Congressional and other U.S. government actions to address budgetary constraints, caps on the discretionary budget for defense and non-defense departments and agencies, and the ability of Congress to determine how to allocate the available budget authority and pass appropriations bills to fund both U.S. government departments and agencies that are, and those that are not, subject to the caps. Additionally, budget deficits and the growing U.S. national debt increase pressure on the U.S. government to reduce federal spending across all federal agencies, with uncertainty about the size and timing of those reductions. Furthermore, delays in the completion of future U.S. government budgets could in the future delay procurement of the federal government services we provide. A reduction in the amount of, or delays, or cancellations of funding for, services that we are contracted to provide to the U.S. government as a result of any of these impacts or related initiatives, legislation or otherwise could have a material adverse effect on our business and results of operations. Regulations Increased audit, review, investigation and general scrutiny by government agencies of performance under government contracts and compliance with the terms of those contracts and applicable laws could affect our operating results. Negative publicity and increased scrutiny of government contractors in general, including us, relating to government expenditures for contractor services and incidents involving the mishandling of sensitive or classified information, as well as the increasingly complex requirements of the U.S. Department of War and the U.S. intelligence community, including those related to cybersecurity, could impact our ability to perform in the markets we serve. Competitive Markets The industries we operate in consist of a large number of enterprises ranging from small, niche-oriented companies to multi-billion-dollar corporations that serve many government and commercial customers. We compete on the basis of our technical expertise, technological innovation, our ability to deliver cost-effective multi-faceted services in a timely manner, our reputation and relationships with our customers, qualified and/or security-clearance personnel, and pricing. We believe that we are well positioned to take advantage of the markets in which we operate because of our proven track record, long-term customer relationships, technology innovation, scalable and agile business offerings and world class talent. Our ability to effectively deliver on project engagements and successfully assist our customers affects our ability to win new contracts and drives our financial performance. 37 Acquired Operations Altamira Technologies Corporation. On January 14, 2026, the Company acquired a 100% ownership interest in Altamira Technologies Corporation ("ATC"), a privately owned company, for approximately $339 million in cash and up to an additional $45 million in the event an earn out EBITDA target is exceeded. The Company borrowed $330.0 million under the Credit Agreement to fund the acquisition. Headquartered in McLean, Virginia, ATC enhances Parsons’ defense and intelligence portfolio by delivering advanced analytics, signals intelligence (SIGINT), cyber, missile warning, and space capabilities, complementing the company’s strengths in all‑domain technology integration and Indo‑Pacific operations, and expanding with intelligence community (IC) customers. The financial results of ATC have been included in our consolidated results of operations from March 31, 2026 onward. Applied Sciences Consulting, Inc. On October 1, 2025, the Company acquired a 100% ownership interest in Applied Sciences Consulting, Inc. ("ASC"), a privately owned company, for $28.2 million from cash on hand. ASC specializes in water and stormwater solutions for cities, counties, and water management districts across the state of Florida. ASC enhances our ability to partner with Florida communities on delivering innovative solutions for their resiliency challenges, while expanding those capabilities to new and existing clients around the world. The financial results of ASC have been included in our consolidated results of operations from December 31, 2025 onward. Chesapeake Technology International, Corp On June 30, 2025, the Company acquired a 100% ownership interest in Chesapeake Technology International, Corp ("CTI"), a privately owned company, for $91.5 million from cash on hand. CTI brings extensive capabilities as an all-domain technology solutions provider, powered by cutting-edge products that enhance the warfighters’ ability to sense, evaluate and deliver effects within the invisible battlespaces. CTI enhances our mission-ready solutions for the Department of War. The financial results of CTI have been included in our consolidated results of operations from June 30, 2025 onward. TRS Group, Inc. On January 31, 2025, the Company acquired a 100% ownership interest in TRS Group, Inc. ("TRS") a privately owned company, for $36.6 million. TRS is an environmental solutions firm that specializes in remediation technology. The acquisition of TRS significantly enhances Parsons’ environmental remediation capabilities. The financial results of TRS have been included in our consolidated results of operations from January 31, 2025 onward. Seasonality Our results may be affected by variances as a result of weather conditions and contract award seasonality impacts that we experience across our businesses. The latter issue is typically driven by the U.S. federal government fiscal year-end, September 30. While not certain, it is not uncommon for U.S. government agencies to award task orders or complete other contract actions in the weeks before the end of the U.S. federal government fiscal year in order to avoid the loss of unexpended U.S. federal government fiscal year funds. In addition, we have also historically experienced higher bid and proposal costs in the months leading up to the U.S. federal government fiscal year-end as we pursue new contract opportunities expected to be awarded early in the following U.S. federal government fiscal year as a result of funding appropriated for that U.S. federal government fiscal year. Furthermore, many U.S. state governments with fiscal years ending on June 30 tend to accelerate spending during their first quarter, when new funding becomes available. We may continue to experience this seasonality in future periods, and our results of operations may be affected by it. Results of Operations Revenue Our revenue consists of both services provided by our employees and pass-through fees from subcontractors and other direct costs. Our Federal Solutions segment derives revenue primarily from the U.S. federal government and our Critical Infrastructure segment derives revenue primarily from government and commercial customers. We enter into the following types of contracts with our customers: •Under cost-plus contracts, we are reimbursed for allowable or otherwise defined costs incurred, plus a fee. The contracts may also include incentives for various performance criteria, including quality, timeliness, 38 safety and cost-effectiveness. In addition, costs are generally subject to review by clients and regulatory audit agencies, and such reviews could result in costs being disputed as non-reimbursable under the terms of the contract. •Under time-and-materials contracts, hourly billing rates are negotiated and charged to clients based on the actual time spent on a project. In addition, clients reimburse actual out-of-pocket costs for other direct costs and expenses that are incurred in connection with the performance under the contract. •Under fixed-price contracts, clients pay an agreed fixed-amount negotiated in advance for a specified scope of work. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and “Note 2—Summary of Significant Accounting Policies” in the notes to our consolidated financial statements included in the Company’s Form 10-K for the year ended December 31, 2025 for a description of our policies on revenue recognition. The table below presents the percentage of total revenue for each type of contract. Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Fixed-price 29.7% 33.6% 30.6% 35.3% Time-and-materials 25.4% 23.5% 25.2% 22.9% Cost-plus 44.9% 42.9% 44.2% 41.8% The amount of risk and potential reward varies under each type of contract. Under cost-plus contracts, there is limited financial risk, because we are reimbursed for all allowable costs up to a ceiling. However, profit margins on this type of contract tend to be lower than on time-and-materials and fixed-price contracts. Under time-and-materials contracts, we are reimbursed for the hours worked using the predetermined hourly rates for each labor category. In addition, we are typically reimbursed for other direct contract costs and expenses at cost. We assume financial risk on time-and-materials contracts because our labor costs may exceed the negotiated billing rates. Profit margins on well-managed time-and-materials contracts tend to be higher than profit margins on cost-plus contracts as long as we are able to staff those contracts with people who have an appropriate skill set. Under fixed-price contracts, we are required to deliver the objectives under the contract for a pre-determined price. Compared to time-and-materials and cost-plus contracts, fixed-price contracts generally offer higher profit margin opportunities because we receive the full benefit of any cost savings, but they also generally involve greater financial risk because we bear the risk of any cost overruns. In the aggregate, the contract type mix in our revenue for any given period will affect that period’s profitability. Over time, we have generally experienced a relatively stable contract mix. The change in the contract mix for the three and six months ended June 30, 2026 compared to the corresponding periods last year primarily relates to decreased business volume from a fixed price contract from a confidential contract in our Federal Solutions segment. Our recognition of profit on long-term contracts requires the use of assumptions related to transaction price and total cost of completion. Estimates are continually evaluated as work progresses and are revised when necessary. When a change in estimated cost or transaction price is determined to have an impact on contract profit, we record a positive or negative adjustment to revenue. Joint Ventures We conduct a portion of our business through joint ventures or similar partnership arrangements. For the joint ventures we control, we consolidate all the revenues and expenses in our consolidated statements of income (including revenues and expenses attributable to noncontrolling interests). For the joint ventures we do not control, we recognize equity in (losses) earnings of unconsolidated joint ventures. Our revenues included amounts related to services we provided to our unconsolidated joint ventures for the three months ended June 30, 2026 and June 30, 2025 of $46.7 million and $42.0 million, respectively and $96.3 million and $87.5 million for the six months ended June 30, 2026 and June 30, 2025, respectively. Operating costs and expenses Operating costs and expenses primarily include direct costs of contracts and selling, general and administrative expenses. Costs associated with compensation-related expenses for our people and facilities, which includes ESOP contribution expenses, are the most significant component of our operating expenses. Total ESOP contribution expense for the three months ended June 30, 2026 and June 30, 2025 was $19.8 million and $17.6 million, respectively and $39.1 39 million and $35.4 million for the six months ended June 30, 2026 and June 30, 2025, respectively and is recorded in “Direct cost of contracts” and “Selling, general and administrative expenses.” Direct costs of contracts consist of direct labor and associated fringe benefits, indirect overhead, subcontractor and materials (“pass-through costs”), travel expenses and other expenses incurred to perform on contracts. Selling, general and administrative expenses (“SG&A”) include salaries and wages and fringe benefits of our employees not performing work directly for customers, facility costs and other costs related to these indirect functions. Other income and expenses Other income and expenses primarily consist of interest income, interest expense and other income, net. Interest income primarily consists of interest earned on U.S. government money market funds. Interest expense consists of interest expense incurred under our Convertible Senior Notes, Term Loan, and Revolving Credit Agreement. Other income, net primarily consists of gain or loss on sale of businesses and sale of assets, sublease income and transaction gain or loss related to movements in foreign currency exchange rates. Adjusted EBITDA The following table sets forth Adjusted EBITDA, Net Income Margin, and Adjusted EBITDA Margin for the three and six months ended June 30, 2026 and June 30, 2025. Three Months Ended Six Months Ended (U.S. dollars in thousands) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Adjusted EBITDA (1) $ 42,220 $ 149,131 $ 193,149 $ 297,907 Net Income Margin (2) 0.0 % 4.4 % 2.1 % 4.9 % Adjusted EBITDA Margin (3) 2.7 % 9.4 % 6.3 % 9.5 % (1)A reconciliation of net income attributable to Parsons Corporation to Adjusted EBITDA is set forth below (in thousands). (2)Net Income Margin is calculated as net income including noncontrolling interest divided by revenue in the applicable period. (3)Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by revenue in the applicable period. Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net income attributable to Parsons Corporation $ (15,219 ) $ 55,230 $ 37,707 $ 121,433 Interest expense, net 15,821 11,501 30,008 21,605 Income tax expense 4,222 18,690 20,309 37,667 Depreciation and amortization 36,637 28,592 72,563 55,995 Net income attributable to noncontrolling interests 14,754 15,259 27,039 30,843 Equity-based compensation 10,077 11,519 19,531 18,622 Transaction-related costs (a) (7,126 ) 5,135 1,313 8,836 Restructuring (b) - 2,361 - 2,361 Other (c) (16,946 ) 844 (15,321 ) 545 Adjusted EBITDA $ 42,220 $ 149,131 $ 193,149 $ 297,907 (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 and related to our corporate restructuring initiatives. (c)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. 40 Adjusted EBITDA is a supplemental measure of our operating performance used by management and our board of directors to assess our financial performance both on a segment and on a consolidated basis. We discuss Adjusted EBITDA because our management uses this measure for business planning purposes, including to manage the business against internal projected results of operations and measure the performance of the business generally. Adjusted EBITDA is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Adjusted EBITDA is not a GAAP measure of our financial performance or liquidity and should not be considered as an alternative to net income as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. We define Adjusted EBITDA as net income attributable to Parsons Corporation, adjusted to include net income 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 we do not consider in our evaluation of ongoing operating performance. These other items include, among other things, impairment of goodwill, intangible and other assets, interest and other expenses recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs, equity-based compensation and expenses related to our corporate restructuring initiatives. Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future, including, among other things, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. Management compensates for these limitations by relying on our GAAP results in addition to using Adjusted EBITDA supplementally. Our measure of Adjusted EBITDA is not necessarily comparable to similarly titled captions of other companies due to different methods of calculation. The following tables show Adjusted EBITDA attributable to Parsons Corporation for each of our reportable segments and Adjusted EBITDA attributable to noncontrolling interests (in thousands): Three Months Ended Variance June 30, 2026 June 30, 2025 Dollar Percent Federal Solutions Adjusted EBITDA attributable to Parsons Corporation $ (13,786 ) $ 67,072 $ (80,858 ) (120.6 )% Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation 41,007 66,193 (25,186 ) (38.0 )% Adjusted EBITDA attributable to noncontrolling interests 14,999 15,866 (867 ) (5.5 )% Total Adjusted EBITDA $ 42,220 $ 149,131 $ (106,911 ) (71.7 )% Six Months Ended Variance June 30, 2026 June 30, 2025 Dollar Percent Federal Solutions Adjusted EBITDA attributable to Parsons Corporation $ 57,767 $ 142,604 $ (84,837 ) (59.5 )% Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation 107,908 $ 124,380 (16,472 ) (13.2 )% Adjusted EBITDA attributable to noncontrolling interests 27,474 $ 30,923 (3,449 ) (11.2 )% Total Adjusted EBITDA $ 193,149 $ 297,907 $ (104,758 ) (35.2 )% 41 The following table sets forth our results of operations for the three and six months ended June 30, 2026 and June 30, 2025 as a percentage of revenue. Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Revenues 100.0 % 100.0 % 100.0 % 100.0 % Direct costs of contracts 81.3 % 78.0 % 78.7 % 77.6 % Equity in (losses) earnings of unconsolidated joint ventures (2.1 )% (0.0 )% (0.9 )% (0.0 )% Selling, general and administrative expenses 16.5 % 15.9 % 17.2 % 15.8 % Operating income 0.1 % 6.0 % 3.2 % 6.5 % Interest income 0.0 % 0.1 % 0.1 % 0.1 % Interest expense (1.0 )% (0.8 )% (1.1 )% (0.8 )% Other income, net 1.2 % 0.3 % 0.6 % 0.2 % Total other income (expense) 0.2 % (0.4 )% (0.4 )% (0.5 )% Income before income tax expense 0.2 % 5.6 % 2.8 % 6.1 % Income tax expense (0.3 )% (1.2 )% (0.7 )% (1.2 )% Net income including noncontrolling interests (0.0 )% 4.4 % 2.1 % 4.9 % Net income attributable to noncontrolling interests (0.9 )% (1.0 )% (0.9 )% (1.0 )% Net income attributable to Parsons Corporation (1.0 )% 3.5 % 1.2 % 3.9 % Revenue Three Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Revenue $ 1,575,867 $ 1,584,323 $ (8,456 ) (0.5 )% Revenue decreased $8.5 million for the three months ended June 30, 2026 when compared to the corresponding period last year, due to a decrease in revenue in our Federal Solutions segment of $44.6 million, offset by an increase in revenue in our Critical Infrastructure Segment of $36.1 million. See “Segment Results” below for a further discussion of the changes in the Company's revenue. Six Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Revenue $ 3,067,043 $ 3,138,683 $ (71,640 ) (2.3 )% Revenue decreased $71.6 million for the six months ended June 30, 2026 when compared to the corresponding period last year, due to a decrease in revenue in our Federal Solutions segment of $128.8 million, offset by an increase in revenue in our Critical Infrastructure Segment of $57.2 million. See “Segment Results” below for a further discussion of the changes in the Company's revenue. Direct costs of contracts Three Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Direct costs of contracts $ 1,280,629 $ 1,235,970 $ 44,659 3.6 % 42 Direct cost of contracts increased $44.7 million for the three months ended June 30, 2026 when compared to the corresponding period last year, primarily due to an increase of $24.9 million in our Federal Solutions segment and an increase of $19.8 million in our Critical Infrastructure segment. The increase in direct costs of contracts in the Federal Solutions segment is primarily related to a write down, partially offset by reduced volume from our confidential contract. See “Segment Results” below for further discussion. The increase in direct costs of contracts in the Critical Infrastructure segment is primarily related to increased volume from new and existing contracts. Six Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Direct costs of contracts $ 2,414,385 $ 2,436,347 $ (21,962 ) (0.9 )% Direct cost of contracts decreased $22.0 million for the six months ended June 30, 2026 when compared to the corresponding period last year, primarily due to an decrease of $51.6 million in our Federal Solutions segment and an increase of $29.7 million in our Critical Infrastructure segment. The decrease in direct costs of contracts in the Federal Solutions segment is primarily related to reduced volume from our confidential contract. See “Segment Results” below for further discussion. The increase in direct costs of contracts in the Critical Infrastructure segment is primarily related to increased volume from new and existing contracts. Equity in losses of unconsolidated joint ventures Three Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Equity in losses of unconsolidated joint ventures $ (33,748 ) $ (642 ) $ (33,106 ) (5,156.7 )% Equity in losses of unconsolidated joint ventures decreased by $33.1 million for the three months ended June 30, 2026 compared to the corresponding period last year primarily due to a write down in the Critical Infrastructure segment. The Company is winding down its participation in construction joint ventures. Six Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Equity in losses of unconsolidated joint ventures $ (27,592 ) $ (1,329 ) $ (26,263 ) (1,976.1 )% Equity in losses of unconsolidated joint ventures decreased by $26.3 million for the six months ended June 30, 2026 compared to the corresponding period last year primarily due to a write down in the Critical Infrastructure segment. The Company is winding down its participation in construction joint ventures. Selling, general and administrative expenses Three Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Selling, general and administrative expenses $ 260,195 $ 252,050 $ 8,145 3.2 % As a percentage of revenue, our SG&A increased by 0.6% to 16.5% for the three months ended June 30, 2026 compared to 15.9% for the corresponding period last year. The increase in SG&A was primarily due to acquisitions and intangible asset amortization associated with the Company's acquisitions compared to the corresponding period last year. Partially offsetting these increase in SG&A was a decrease in the estimated fair value of the ATC contingent consideration. Six Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Selling, general and administrative expenses $ 528,097 $ 496,113 $ 31,984 6.4 % As a percentage of revenue, our SG&A increased by 1.4% to 17.2% for the six months ended June 30, 2026 compared to 15.8% for the corresponding period last year. The increase in SG&A was primarily due to higher transaction costs, acquisitions and intangible asset amortization associated with the Company's acquisitions compared to the corresponding period last year. Partially offsetting these increase in SG&A was a decrease in the estimated fair value of the ATC contingent consideration. 43 Total other income (expense) Three Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Interest income $ 565 $ 1,068 $ (503 ) (47.1 )% Interest expense (16,386 ) (12,569 ) (3,817 ) 30.4 % Other income (expense), net 18,283 5,019 13,264 264.3 % Total other income (expense) $ 2,462 $ (6,482 ) $ 8,944 (138.0 )% Six Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Interest income $ 2,376 $ 3,210 $ (834 ) (26.0 )% Interest expense (32,384 ) (24,815 ) (7,569 ) 30.5 % Other income (expense), net 18,094 6,654 11,440 171.9 % Total other income (expense) $ (11,914 ) $ (14,951 ) $ 3,037 -20.3 % Interest income is related to interest earned on investments in government money funds. Interest expense for the three and six months ended June 30, 2026 and June 30, 2025 is primarily due to debt related to our Convertible Senior Notes, Term Loan, and Revolving Credit Facility. The amounts in other income (expense), net are primarily related to a gain on sale of business, transaction gains and losses on foreign currency transactions and sublease income. Income tax expense Three Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Income tax expense $ 4,222 $ 18,690 $ (14,468 ) (77.4 )% The Company’s effective tax rate was 112.4% and 21.0% and income tax expense was $4.2 million and $18.7 million for the three months ended June 30, 2026 and June 30, 2025, respectively. The decrease in tax expense for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was due primarily to the tax impact of a decrease in pre-tax income and a change in the jurisdictional mix of earnings, partially offset by increases in valuation allowances on foreign net operating loss carryovers (NOLs) and foreign tax credit carryovers (FTCs). Six Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Income tax expense $ 20,309 $ 37,667 $ (17,358 ) (46.1 )% The Company’s effective income tax rate was 23.9% and 19.8% for the six months ended June 30, 2026 and June 30, 2025, respectively. Income tax expense was $20.3 million and $37.7 million for the six months ended June 30, 2026 and June 30, 2025, respectively. The decrease in tax expense for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to the tax impact of a decrease in pre-tax income and a change in the jurisdictional mix of earnings, partially offset by increases in valuation allowances on NOLs and FTCs and decreases in tax benefits from the foreign-derived deduction eligible income (FDDEI) and windfall equity-based compensation. 44 Segment Results We evaluate segment operating performance using segment revenue and segment Adjusted EBITDA attributable to Parsons Corporation. Adjusted EBITDA attributable to Parsons Corporation is Adjusted EBITDA excluding Adjusted EBITDA attributable to noncontrolling interests. Presented above, in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, is a discussion of our definition of Adjusted EBITDA, how we use this metric, why we present this metric and the material limitations on the usefulness of this metric. See “Note 18—Segments Information” in the notes to the consolidated financial statements in this Form 10-Q for further discussion regarding our segment Adjusted EBITDA attributable to Parsons Corporation. The following table shows Adjusted EBITDA attributable to Parsons Corporation for each of our reportable segments and Adjusted EBITDA attributable to noncontrolling interests: Three Months Ended Six Months Ended (U.S. dollars in thousands) June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Federal Solutions Adjusted EBITDA attributable to Parsons Corporation $ (13,786 ) $ 67,072 $ 57,767 $ 142,604 Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation 41,007 66,193 107,908 124,380 Adjusted EBITDA attributable to noncontrolling interests 14,999 15,866 27,474 30,923 Total Adjusted EBITDA $ 42,220 $ 149,131 $ 193,149 $ 297,907 Federal Solutions Three Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Revenue $ 760,868 $ 805,464 $ (44,596 ) (5.5 )% Adjusted EBITDA attributable to Parsons Corporation $ (13,786 ) $ 67,072 $ (80,858 ) (120.6 )% The decrease in Federal Solutions revenue for the three months ended June 30, 2026 compared to the corresponding period last year was primarily driven by our confidential contract operating at a reduced volume as a result of the Department of State reorganization issued May 29, 2025 and write downs on projects. These decreases were offset by growth on existing contracts and acquisitions. The decrease in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the three months ended June 30, 2026 compared to the corresponding period last year was primarily due to write downs on projects and the factors impacting revenue discussed above. Six Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Revenue $ 1,519,216 $ 1,648,021 $ (128,805 ) (7.8 )% Adjusted EBITDA attributable to Parsons Corporation $ 57,767 $ 142,604 $ (84,837 ) (59.5 )% The decrease in Federal Solutions revenue for the six months ended June 30, 2026 compared to the corresponding period last year was primarily driven by our confidential contract operating at a reduced volume as a result of the Department of State reorganization issued May 29, 2025. This decrease was offset by growth on existing contracts and acquisitions. 45 The decrease in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the six months ended June 30, 2026 compared to the corresponding period last year was primarily due to the factors discussed above for Adjusted EBITDA for the three months ended June 30, 2026. Critical Infrastructure Three Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Revenue $ 814,999 $ 778,859 $ 36,140 4.6 % Adjusted EBITDA attributable to Parsons Corporation $ 41,007 $ 66,193 $ (25,186 ) (38.0 )% The increase in Critical Infrastructure revenue for the three months ended June 30, 2026 compared to the corresponding period last year was primarily related to organic growth and business acquisitions. Organic growth was primarily due to an increase in business volume from existing contracts and ramping up of recent awards. The decrease in Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation for the three months ended June 30, 2026 compared to the corresponding period last year was primarily related to the equity in earnings impacts discussed above. This decrease in Adjusted EBITDA was partially offset by the revenue impacts above. Six Months Ended Variance (U.S. dollars in thousands) June 30, 2026 June 30, 2025 Dollar Percent Revenue $ 1,547,827 $ 1,490,662 $ 57,165 3.8 % Adjusted EBITDA attributable to Parsons Corporation $ 107,908 $ 124,380 $ (16,472 ) (13.2 )% The increase in Critical Infrastructure revenue for the six months ended June 30, 2026 compared to the corresponding period last year was primarily related to organic growth and business acquisitions. Organic growth was primarily due to an increase in business volume from existing contracts and ramping up of recent awards. The decrease in Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation for the six months ended June 30, 2026 compared to the corresponding period last year was primarily related to the equity in earnings impacts discussed above. This decrease in Adjusted EBITDA was partially offset by the revenue impacts above. Liquidity and Capital Resources We currently finance our operations and capital expenditures through a combination of internally generated cash from operations, our Convertible Senior Notes, Term Loan and periodic borrowings under our Revolving Credit Facility. Generally, cash provided by operating activities has been adequate to fund our operations. Due to fluctuations in our cash flows and growth in our operations, it may be necessary from time to time in the future to borrow under our Credit Agreement to meet cash demands. Our management regularly monitors certain liquidity measures to monitor performance. We calculate our available liquidity as a sum of cash and cash equivalents from our consolidated balance sheet plus the amount available and unutilized on our Credit Agreement. As of June 30, 2026, we believe we have adequate liquidity and capital resources to fund our operations, support our debt service and support our ongoing acquisition strategy for at least the next twelve months based on the liquidity from cash provided by our operating activities, cash and cash equivalents on-hand and our borrowing capacity under our Revolving Credit Facility. Management continually monitors debt maturities to strategically execute optimal terms and ensure appropriate levels of working capital liquidity are maintained for the company. Cash Flows Cash received from customers, either from the payment of invoices for work performed or for advances in excess of revenue recognized, is our primary source of cash. We generally do not begin work on contracts until funding is appropriated by the customers. Billing timetables and payment terms on our contracts vary based on a number of factors, including whether the contract type is cost-plus, time-and-materials, or fixed-price. We generally bill and collect cash more frequently under cost-plus and time-and-materials contracts, as we are authorized to bill as the costs are incurred or work 46 is performed. In contrast, we may be limited to bill certain fixed-price contracts only when specified milestones, including deliveries, are achieved. A number of our contracts may provide for performance-based payments, which allow us to bill and collect cash prior to completing the work. Billed accounts receivable represents amounts billed to clients that have not been collected. Unbilled accounts receivable represents amounts where the Company has a present contractual right to bill but an invoice has not been issued to the customer at the period-end date. Accounts receivable is the principal component of our working capital and is generally driven by revenue growth. Accounts receivable includes billed and unbilled amounts. The total amount of our accounts receivable can vary significantly over time but is generally sensitive to revenue levels. We experience delays in collections from time to time from Middle East customers. Net days sales outstanding, which we refer to as net DSO, is calculated by dividing (i) accounts receivable (net of project accruals, billings in excess of revenue and accounts payable) by (ii) average revenue per day (calculated by dividing trailing twelve months revenue by the number of days in that period). We focus on collecting outstanding receivables to reduce net DSO and improve working capital. Net DSO was 76 days at June 30, 2026, a 16 day increase from June 30, 2025. Impacting the change in DSO was lower volume from our confidential contract and delayed collections in the Middle East. Our working capital (current assets less current liabilities) was $1.1 billion at June 30, 2026 and $1.2 billion at December 31, 2025. Our cash and cash equivalents decreased by $200.3 million to $266.0 million at June 30, 2026 from $466.4 million at December 31, 2025. The following table summarizes our sources and uses of cash over the periods presented (in thousands): Six Months Ended June 30, 2026 June 30, 2025 Net cash provided by operating activities $ 53,884 $ 148,014 Net cash used in investing activities (386,491 ) (164,308 ) Net cash provided by (used in) financing activities 133,434 (29,193 ) Effect of exchange rate changes (1,171 ) 3,266 Net decrease in cash and cash equivalents $ (200,344 ) $ (42,221 ) Operating Activities Net cash provided by operating activities consists primarily of net income adjusted for noncash items, such as: equity in losses (earnings) of unconsolidated joint ventures, contributions of treasury stock, depreciation and amortization of property and equipment and intangible assets, provisions for doubtful accounts, amortization of deferred gains, and impairment charges. The timing between the conversion of our billed and unbilled receivables into cash from our customers and disbursements to our employees and vendors is the primary driver of changes in our working capital. Our operating cash flows are primarily affected by our ability to invoice and collect from our clients in a timely manner, our ability to manage our vendor payments and the overall profitability of our contracts. Net cash provided by operating activities decreased $94.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The primary drivers of the decrease in cash flows provided by operating activities was a $56.2 million change in cash flows from net income after adjusting for non-cash items, a change in other long-term liabilities of $21.1 million, and a change in income taxes of $16.0 million. Investing Activities Net cash used in investing activities consists primarily of cash flows associated with capital expenditures, joint ventures and business acquisitions. Net cash used in investing activities increased $222.2 million for the six months ended June 30, 2026, when compared to the six months ended June 30, 2025. This change was primarily driven by a $212.3 million increase in payments for acquisitions, net of cash acquired, a $21.4 million increase in investments in unconsolidated joint ventures, and a $8.1 million increase in capital expenditures, offset by $24.0 million in proceeds from sale of business. Financing Activities Net cash provided by (used in) financing activities is primarily associated with proceeds from debt, the repayment thereof, and distributions to noncontrolling interests. 47 Net cash provided by (used in) financing activities changed by $162.6 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The change in cash flows provided by (used in) financing activities is primarily driven by net proceeds of $234.0 million from our Revolving Credit Facility. Also impacting net cash provided by (used in) financing activities were a $8.5 million change in distributions to noncontrolling interest offset by a $10.0 million of repurchase of common stock. Letters of Credit We also have in place several secondary bank credit lines for issuing letters of credit, principally for foreign contracts, to support performance and completion guarantees. Letters of credit commitments outstanding under these bank lines aggregated to $338.7 million as of June 30, 2026. Letters of credit outstanding under the Credit Agreement total $40.9 million as of June 30, 2026. Off-Balance Sheet Arrangements As of June 30, 2026, we have no off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources. Recent Accounting Pronouncements See the information set forth in “Note 3—New Accounting Pronouncements” in the notes to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Critical Accounting Policies and Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported. Actual results could differ from those estimates. Our Annual Report on Form 10-K, filed with the SEC on February 11, 2026, includes a summary of critical accounting policies we believe are the most important to aid in understanding our financial results. There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenues, or expenses during the six months ended June 30, 2026.