10-Q · April 29, 2026
In its Q1 2026 10-Q filing, Parsons Corporation reported a revenue of $1.55 billion, marking a 7.3% decline compared to $1.67 billion in Q4 2025 and a 1.9% decrease versus $1.58 billion in Q1 2025. Gross margins…
Earnings analysis · 10-Q
PSN earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Parsons reported Q2 revenue of $1.576 billion, down 0.5% year over year but up 5.7% sequentially, while GAAP diluted EPS fell to a $0.14 loss and operating margin compressed to 0.1% from 6.0%. Federal Solutions' $44.596…
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Parsons reported Q2 revenue of $1.576 billion, down 0.5% year over year but up 5.7% sequentially, while GAAP diluted EPS fell to a $0.14 loss and operating margin compressed to 0.1% from 6.0%. Federal Solutions' $44.596 million revenue decline and a $13.786 million segment EBITDA loss, together with $33.748 million of joint-venture losses, overwhelmed growth in Critical Infrastructure. Awards, book-to-bill, and backlog improved, but weaker cash conversion, acquisition-related borrowing, and significant profitability deterioration leave the filing’s trend bearish.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
Reported figures
- Earnings per share
- $-0.14
What stood out
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Awards and book-to-bill strengthened
Q2 awards rose $362.921 million (+24.1%) year over year to $1.869 billion, producing a 1.2x overall quarterly book-to-bill ratio versus 1.0x. Year-to-date awards increased to $3.927 billion from $3.273 billion.
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Backlog supports near-term revenue
Total backlog increased $313.855 million to $9.257 billion at June 30, 2026. Management expects to convert $3.8 billion of funded backlog into revenue over the following 12 months.
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Critical Infrastructure delivered growth
Critical Infrastructure revenue grew $36.140 million, or 4.6%, to $814.999 million, driven by organic volume on existing contracts, ramping recent awards, and acquisitions.
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Revenue recovered sequentially
Revenue improved sequentially by $84.8 million, or 5.7%, from $1.491 billion in Q1 2026 to $1.576 billion in Q2 2026, although it declined $8.456 million year over year.
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ATC expands defense and intelligence capabilities
ATC was acquired for approximately $339 million in cash, with up to $45 million of contingent consideration; its results have been included from March 31, 2026 and broaden the defense, intelligence, cyber and space portfolio.
What to watch
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Earnings and margins deteriorated sharply
Revenue fell $8.456 million (-0.5%) year over year to $1.576 billion, while GAAP diluted EPS turned to a $0.14 loss from $0.50 earnings in Q2 2025. Operating margin contracted to 0.1% from 6.0%.
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Federal Solutions loss drove profit decline
Federal Solutions revenue decreased $44.596 million (-5.5%) to $760.868 million and segment Adjusted EBITDA swung to a $13.786 million loss from $67.072 million profit, reflecting reduced confidential-contract volume and project write-downs.
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Construction joint-venture write-downs
Critical Infrastructure recorded $33.748 million of equity losses from unconsolidated joint ventures, versus a $0.642 million loss a year earlier, as the company winds down participation in construction joint ventures.
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Cash conversion and liquidity weakened
Cash and equivalents declined $200.344 million in the first half to $266.0 million; operating cash flow fell to $53.884 million from $148.014 million. Net DSO reached 76 days, up 16 days year over year, partly due to delayed Middle East collections.
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Acquisition financing increased leverage costs
Debt funding rose following the ATC acquisition: $234.0 million was outstanding on the revolving credit facility and $450.0 million on the term loan at June 30, 2026. Six-month interest expense increased $7.569 million (+30.5%) to $32.384 million.
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No formal risk-factor update; funding exposure remains
Item 1A states there were no material changes to risk factors from the December 31, 2025 Form 10-K. However, $2.636 billion of Federal Solutions backlog remained unfunded at June 30, 2026, subject to appropriations and customer funding decisions.
Management's outlook
The 10-Q MD&A does not provide quantitative revenue or EPS guidance; outlook is limited to management's statement that it believes liquidity is adequate for at least the next 12 months.
Earlier filings 1
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.