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A provider of advanced technology and infrastructure services, Parsons helps U.S. government agencies with cyber, space, and missile defense work while engineering transportation, water, and urban projects worldwide. Founded in 1944 by aeronautical engineer Ralph M. Parsons, the company began with post-war reconstruction and Cold War missile facilities. Its employees once owned the entire firm—the 1984 shift to employee ownership was reported as the largest such buyout in U.S. history.
Adjusted EBITDA fell 71.7% to $42.2M as Federal Solutions swung to a loss on project write-downs.
Federal Solutions swung to an loss this quarter, erasing the 's recent stability. was nearly flat at $1.58 billion, down 0.5% , as a 4.6% increase in Critical Infrastructure was offset by a 5.5% decline in Federal Solutions, but the was defined by project write-downs that pushed total Adjusted EBITDA down 71.7% to $42.2 million. The core federal business is now unprofitable at the segment level, and the company's earnings power rests on the infrastructure side while it waits for a decision on its largest confidential contract.
Key takeaways
attributable to Parsons Corporation fell 71.7% to $42.2 million, driven by Federal Solutions swinging to a $13.8 million loss from project write-downs and Critical Infrastructure falling 38.0% on from construction joint ventures.
Federal Solutions fell 5.5% , as reduced volume from a confidential contract following a Department of State reorganization was compounded by the project write-downs.
Critical Infrastructure rose 4.6% on from existing contracts and recent awards, plus contributions from acquisitions, partially offsetting the federal decline.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue fell 0.5% to $1.58B as Federal Solutions declines offset Critical Infrastructure growth; Adjusted EBITDA dropped 71.7% on project write-downs.
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Total decreased 0.5% to $1.58B in Q2 2026, driven by a $44.6M decline in Federal Solutions, partially offset by $36.1M growth in Critical Infrastructure.
widened 1.2 points to 24.0%, but fell 12.4% to $95.7 million as SG&A rose 3.2% to $260.2 million on acquisition-related costs and intangible .
fell 18.3% to $0.49, and fell 20.1% to $52.9 million.
Total remained at $9.3 billion with a year-to-date of 1.3x, while net DSO increased 16 days to 76 days, impacted by lower confidential contract volume and delayed Middle East collections.
What changed
The confidential federal client's decision on the material contract, flagged through Q1 2026, has still not been disclosed; Federal Solutions fell another 5.5% this quarter, its fifth consecutive quarterly decline, and the 's swung to a $13.8 million loss, a sharp reversal from the $71.6 million profit reported in Q1 2026.
Critical Infrastructure , which had been watched to confirm whether its 15.0% Q1 2026 rise would hold, instead fell 38.0% this quarter on from construction joint ventures, breaking the upward trend that had carried through FY2025.
The year-to-date , which had recovered to 1.4x in Q1 2026, eased to 1.3x this quarter, still above the 1.0 rate reported at the same point in FY2025 but below the 1.4x peak from FY2024.
The Alstom appellate briefing, with Parsons' final brief due February 2026, was not mentioned as resolved in this filing; the $102.5 million judgment plus $34.0 million interest remains on appeal.
What to watch
The confidential federal client's decision on whether to exercise the remaining option year or re-compete the material Federal Solutions contract, which management had previously indicated would come through Q1 2026.
Federal Solutions next quarter to see whether the $13.8 million loss this quarter was a one-time event or the start of a sustained decline.
Critical Infrastructure next quarter to determine whether the 38.0% drop from joint venture is isolated or recurring.
Alstom appellate outcome, with oral argument expected in 2026 and the $102.5 million judgment plus interest still unresolved.
Federal Solutions fell 5.5% primarily due to reduced volume from a confidential contract following a Department of State reorganization and project write-downs.
Critical Infrastructure rose 4.6% on from existing contracts and recent awards, plus contributions from acquisitions.
attributable to Parsons Corporation fell 71.7% to $42.2M, with Federal Solutions swinging to a $13.8M loss due to project write-downs and Critical Infrastructure down 38.0% on equity-in-losses from construction joint ventures.
Direct costs of contracts increased 3.6% to $1.28B, partly from a in Federal Solutions, while SG&A rose 3.2% to $260.2M on acquisition-related costs and intangible .
Year-to-date was 1.3x, with total at $9.3B as of June 30, 2026; net DSO increased 16 days to 76 days, impacted by lower confidential contract volume and delayed Middle East collections.
Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk We are exposed to interest rate risks related to the Company’s Revolving Credit Facility and Term Loan. As of June 30, 2026, there was $234.0 million outstanding under the Revolving Credit Facility. Borrowings under the Credit Facility effective June 2025 bear…
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Interest Rate Risk
We are exposed to interest rate risks related to the Company’s Revolving Credit Facility and Term Loan.
As of June 30, 2026, there was $234.0 million outstanding under the Revolving Credit Facility. Borrowings under the Credit Facility effective June 2025 bear interest at either the Term SOFR rate plus a margin between 1.0% and 1.625% or a base rate (as defined in the Credit Agreement) plus a margin of between 0% and 0.625%. The interest rate was 5.0% for all periods presented.
As of June 30, 2026, there was $450.0 million outstanding under the Term Loan. Borrowings under the Term Loan Agreement effective June 2025 will bear interest at either an adjusted Term SOFR benchmark rate plus a margin between 0.875% and 1.500% or a base rate plus a margin of between 0% and 0.500% and will initially bear interest at the middle of this range. The rates on June 30, 2026 and December 31, 2025 were 4.9% and 4.8%, respectively.
Foreign Currency Exchange Risk
We are exposed to foreign currency exchange rate risk resulting from our operations outside of the U.S. We limit exposure to foreign currency fluctuations in most of our contracts through provisions that require client payments in currencies corresponding to the currency in which costs are incurred. As a result of this natural hedge, we generally do not need to hedge foreign currency cash flows for contract work performed.
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The information required by this Item 1 is included in “Note 12 – Contingencies” included in the Notes to Consolidated Financial Statements appearing under Part I, Item 1 of this Form 10-Q which is incorporated herein by reference.
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The information required by this Item 1 is included in “Note 12 – Contingencies” included in the Notes to Consolidated Financial Statements appearing under Part I, Item 1 of this Form 10-Q which is incorporated herein by reference.