Key Highlights

  • Consensus EPS of 0.78 compares with second-quarter diluted EPS of negative 0.14, against 0.50 a year earlier.
  • Consensus revenue of USD 1.62 billion compares with second-quarter revenue of USD 1,575,867 thousand, against USD 1,584,323 thousand.
  • Management cut the 2026 revenue guidance midpoint by USD 300 million, to USD 6.2 billion to USD 6.5 billion.
  • Adjusted EBITDA guidance of USD 500 million to USD 560 million reflects USD 118 million of nonrecurring charges.

Parsons (NYSE:PSN) reports third-quarter results on Wednesday, Oct. 28, before the market opens. Consensus stands at EPS of 0.78 on revenue of USD 1.62 billion, and the company has a market capitalization of USD 5.34 billion.

Parsons reports Federal Solutions and Critical Infrastructure segments. Second-quarter revenue was USD 1,575,867 thousand against USD 1,584,323 thousand, and the company reported a net loss attributable to Parsons of USD 15,219 thousand against net income of USD 55,230 thousand.

Estimates Against the Second-Quarter Loss and Full-Year Guidance

The EPS estimate of 0.78 is above the second-quarter diluted EPS of negative 0.14, which compared with 0.50 a year earlier, and the estimates table does not state its EPS basis. The revenue estimate of USD 1.62 billion is above the USD 1,575,867 thousand reported.

Management lowered full-year 2026 guidance to revenue of USD 6.2 billion to USD 6.5 billion, adjusted EBITDA of USD 500 million to USD 560 million and operating cash flow of USD 430 million to USD 490 million. It attributed the change to divestitures, a joint venture charge and contract timing.

What Management Guided and What It Left Open

Management said the adjusted EBITDA range reflects USD 118 million of nonrecurring charges and put 2026 capital expenditures at 1.5% of revenue. It cited a backlog of USD 9.3 billion, 71% of it funded, and USD 1.9 billion of second-quarter awards.

Management left open the pace of federal awards, saying uneven timing and budget uncertainty continue to delay them, and it did not give quarterly dollar guidance. It also cited USD 11 billion of contract awards not yet booked.

Charges That Reduced Second-Quarter Operating Income

Management cited a USD 41 million joint venture charge from an extraordinary weather event on a legacy project, and a USD 77 million loss on two remote contracts held for sale. A USD 19 million gain followed the sale of two advisory contracts. Equity in losses of unconsolidated joint ventures was USD 33,748 thousand against USD 642 thousand.

Operating income was USD 1,295 thousand against USD 95,661 thousand, and direct cost of contracts was USD 1,280,629 thousand against USD 1,235,970 thousand. SG&A expenses were USD 260,195 thousand against USD 252,050 thousand, and interest expense was USD 16,386 thousand against USD 12,569 thousand.

Segments, Cash Flow and Balance Sheet

Federal Solutions revenue decreased USD 44.6 million and Critical Infrastructure revenue increased USD 36.1 million. Management put the book-to-bill ratio at 1.2x, with Federal Solutions at 1.3x and Critical Infrastructure at 1.1x, and normalized adjusted EBITDA margin at 10.1%.

For the six months, net cash provided by operating activities was USD 53,884 thousand against USD 148,014 thousand, and payments for acquisitions, net of cash acquired, were USD 330,123 thousand. Cash and cash equivalents were USD 266,044 thousand against USD 466,388 thousand at year-end, and long-term debt was USD 1,474,048 thousand against USD 1,237,816 thousand. The estimates table lists a market capitalization of USD 5.34 billion.

Items to Track in the Report

Reported EPS against 0.78 and revenue against USD 1.62 billion are the headline comparisons. Other markers are joint venture results, the divestitures, backlog and the 2026 adjusted EBITDA range.