Parsons tops Q3 profit estimates, revenue in line with forecasts

Parsons Corporation (PSN) said on Oct. 28 that third-quarter adjusted earnings were 89 cents per share, topping the 80 cents consensus estimate compiled by Finnhub. Revenue was in line with the $1.65 billion estimate, according to a press release attached to a regulatory filing.

Revenue for the quarter ended Sept. 30 rose 2% from a year earlier and fell 1% on an organic basis. The company said it exceeded its own commitments for the period.

Here's how the company did:

• Adjusted EPS: 89 cents vs. 86 cents a year earlier, according to Finnhub estimates of 80 cents
• Revenue: $1.65 billion vs. $1.62 billion a year earlier
• GAAP diluted EPS: 51 cents vs. 59 cents a year earlier
• Net income attributable to Parsons: $54 million vs. $64 million a year earlier
• Adjusted EBITDA: $168 million vs. $158 million a year earlier, with a margin of 10.2%

The company said adjusted EBITDA margin rose 40 basis points to a company record of 10.2%, from 9.8% a year earlier. Net income was reduced by transaction-related expenses, which the company said were higher than a year earlier.

Segment results

Critical Infrastructure revenue rose 2% to $846 million, reaching an all-time high for the segment. The company said organic growth of 1% was driven mainly by its Transportation market, and the Applied Sciences acquisition added to revenue.

Critical Infrastructure adjusted EBITDA rose 9% to $94 million, and its margin widened 80 basis points to a record 11.1%. The company attributed the gain to ramp-up of recent awards, contributions from acquisitions and stronger program execution.

Federal Solutions revenue rose 2% to $805 million. The company said revenue fell 3% on an organic basis, and excluding its confidential contract, segment revenue increased 9%.

Federal Solutions adjusted EBITDA rose 2% to $74 million, and its margin held at 9.2%. The company said acquisitions and growth on accretive contracts drove the increase.

Bookings and backlog

The company booked a book-to-bill ratio of 1.1 times on net bookings of $1.8 billion in the quarter. Total backlog reached a record $9.4 billion, up 6% from a year earlier, and funded backlog reached a record $6.8 billion, up 7%.

Operating cash flow was $269 million in the quarter, compared with $163 million a year earlier. On a trailing 12-month basis, the company generated $490 million in operating cash flow, up 12%.

According to its SEC filings, net income has fallen in each of the last three quarters, from $64.1 million in the third quarter of 2025 to a loss of $15.2 million in the second quarter of 2026.

Fiscal 2026 guidance

The company narrowed its fiscal 2026 revenue forecast to $6.25 billion to $6.45 billion, from the $6.20 billion to $6.50 billion range it had given. It kept the midpoint of its adjusted EBITDA guidance and reiterated its operating cash flow range.

CEO Carey Smith, who is also chair and president, said, "We delivered a strong third quarter, exceeding our commitments with record adjusted EBITDA and adjusted EBITDA margin." Smith added, "Strong awards, record total and funded backlog, and a robust pipeline provide a solid foundation for continued organic growth."

Contract wins and portfolio changes

The company received three contract actions valued at more than $100 million each during the quarter. It said it received an increase in the ceiling value of its five-year, sole-source agreement with U.S. Cyber Command to $750 million.

The company also signed a definitive purchase agreement for the divestiture of its remote-location contracts, and said it was finalizing the novation. It made measurable progress on its Critical Infrastructure joint venture program, the company said.

Chief financial officer change

Matt Ofilos, Parsons' chief financial officer, resigned effective Nov. 6, 2026, to pursue another professional opportunity, the company said. The company said his resignation was not the result of any disagreement on its operations, policies or practices.

George Ball, who served as chief financial officer from 2008 to 2022 and has been on the board since 2022, was appointed interim chief financial officer effective Nov. 6, 2026.