Parsons Posts Record Margin and Backlog, Narrows 2026 Guidance

Parsons said its third-quarter revenue, profitability and cash flow all exceeded its own commitments, with adjusted EBITDA and margin reaching records, as the national security and infrastructure contractor tightened its full-year outlook around an unchanged midpoint.

The Chantilly, Virginia-based company reported third-quarter revenue of $1.7 billion, up 2% from a year earlier and down 1% on an organic basis, according to its earnings release filed with an 8-K on Wednesday. Excluding what the company calls its confidential contract, revenue rose 5% and organic revenue grew 2%.

Record margin, lower GAAP profit

Adjusted EBITDA including noncontrolling interests rose 6% to a record $168 million, and adjusted EBITDA margin expanded 40 basis points to a record 10.2%. Adjusted diluted EPS was 89 cents, compared with 86 cents a year earlier.

On a GAAP basis, results went the other way. Operating income fell 4% to $104 million and net income dropped 16% to $54 million, both primarily due to higher transaction-related expenses, the company said. GAAP diluted EPS was 51 cents, down from 59 cents.

Guidance narrowed

Parsons narrowed its 2026 revenue guidance to $6.25 billion to $6.45 billion from $6.20 billion to $6.50 billion. It narrowed adjusted EBITDA guidance to $510 million to $550 million from $500 million to $560 million, keeping both midpoints unchanged. Operating cash flow guidance stayed at $430 million to $490 million.

"While we continue to navigate procurement timing and geopolitical uncertainty, the alignment of our differentiated capabilities with our customers' most critical national security and infrastructure needs reinforces our confidence in Parsons' outlook," Chair, President and CEO Carey Smith said.

Both segments grow

Critical Infrastructure revenue rose 2% to an all-time high of $846 million, helped by its Transportation market and the Applied Sciences acquisition. The segment's adjusted EBITDA margin widened 80 basis points to a record 11.1%.

Federal Solutions revenue rose 2% to $805 million and fell 3% organically. Excluding the confidential contract, segment revenue grew 9%, driven by Cyber and Electronic Warfare and Transportation markets plus the Altamira acquisition. Federal Solutions contract awards rose 53%, according to the release.

Bookings and backlog

Parsons posted a 1.1x book-to-bill ratio on net bookings of $1.8 billion, with consolidated contract awards up 14% year over year. Total backlog hit a record $9.4 billion, up 6%, and funded backlog reached a record $6.8 billion.

Among notable awards, the company said the ceiling value of its sole-source agreement with U.S. Cyber Command was increased to $750 million, and it won a 66-month contract with a $495 million ceiling for a national security customer.

Operating cash flow was $269 million in the quarter, compared with $163 million a year earlier. Separately on Wednesday, Parsons said in another 8-K that CFO Matt Ofilos will resign effective Nov. 6, with former CFO George Ball named interim CFO.

By the numbers

• Revenue: $1.7 billion, up 2%; down 1% organically
• Adjusted EBITDA: record $168 million, 10.2% margin
• EPS: 51 cents GAAP; 89 cents adjusted
• Total backlog: record $9.4 billion
• 2026 revenue guidance: $6.25 billion to $6.45 billion

Sources

1. Parsons Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0001193125-26-435041)
2. Parsons Form 8-K announcing chief financial officer transition (Exhibit 99.1), filed Oct. 28, 2026 (accession 0001193125-26-435047)

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