Parsons | 8-K: FY2026 Q2 Revenue Misses Estimate at USD 1.576 B

Revenue: As of FY2026 Q2, the actual value is USD 1.576 B, missing the estimate of USD 1.607 B.

EPS: As of FY2026 Q2, the actual value is USD -0.14, missing the estimate of USD 0.4936.

EBIT: As of FY2026 Q2, the actual value is USD 20.14 M.

Financial Highlights (Q2 2026 vs Q2 2025)

Total Revenue

Parsons Corporation reported a total revenue of $1.6 billion for the second quarter of 2026, marking a 1% decrease year-over-year and a 5% decrease on an organic basis. Excluding a confidential contract and portfolio-shaping actions, total revenue increased by 8%, with organic revenue growing by 3%.

Net Income

Net income for the quarter was - $15 million, representing a $70 million year-over-year decrease and a 128% decline, primarily due to net losses of - $85 million on programs related to portfolio-shaping actions and charges on a joint venture program.

Operating Income

Operating income decreased by 99% to $1 million.

Adjusted EBITDA

Adjusted EBITDA decreased by 72% to $42 million. Excluding - $118 million of charges, adjusted EBITDA was $161 million, an 8% increase year-over-year.

Adjusted EBITDA Margin

Adjusted EBITDA margin contracted by 670 basis points to 2.7%. When excluding the impact of charges, the adjusted EBITDA margin expanded by 70 basis points to 10.1%.

Segment Performance (Q2 2026 vs Q2 2025)

Critical Infrastructure Segment

Revenue for the Critical Infrastructure segment increased by $36 million, or 5%, to $815 million, driven by 4% organic growth and contributions from the Applied Sciences acquisition. Organic revenue growth in the Middle East was 10%.Adjusted EBITDA for this segment decreased by $26 million, or -32%, to $56 million, including - $41 million of joint venture-related charges. The adjusted EBITDA margin contracted by 360 basis points to 6.9% from 10.5%. Excluding these charges, adjusted EBITDA increased by 18% to $97 million, and the adjusted EBITDA margin expanded by 140 basis points to 11.9%.

Federal Solutions Segment

Revenue for the Federal Solutions segment decreased by $45 million, or 6%, to $761 million, and was down 14% on an organic basis. Excluding the confidential contract and portfolio-shaping actions, Federal Solutions’ revenue increased by 11%, with organic growth of 2%.Adjusted EBITDA for this segment decreased by $81 million, or -121%, to - $14 million, including - $77 million in charges related to programs planned for divestiture. The adjusted EBITDA margin decreased to -1.8% from 8.3%. Excluding these charges, adjusted EBITDA decreased by 5% to $64 million, and the adjusted EBITDA margin declined by 10 basis points to 8.2%.

Operational Metrics and Key Performance Indicators

Book-to-Bill Ratio

Parsons Corporation reported a book-to-bill ratio of 1.2x for the quarter on net bookings of $1.9 billion. The trailing twelve-month book-to-bill ratio was 1.1x on net bookings of $7.0 billion. Federal Solutions bookings increased by 51% year-over-year.

Backlog

Total backlog increased to $9.3 billion, up $314 million from Q2 2025. Funded backlog reached $6.6 billion, representing 71% of the total backlog.

Cash Flow from Operating Activities

Cash flow from operating activities for Q2 2026 was $58 million, compared to $160 million in the second quarter of 2025. This decrease was primarily due to proactive investment in memory and storage inventory for high-margin products and the timing of customer payments.

Fiscal Year 2026 Guidance

Parsons Corporation updated its fiscal year 2026 guidance, anticipating revenue between $6.2 billion and $6.5 billion, a reduction from the prior guidance of $6.5 billion to $6.8 billion. Adjusted EBITDA is now projected to be between $500 million and $560 million, down from the previous range of $615 million to $675 million. Cash flow from operating activities is expected to be between $430 million and $490 million, revised down from $470 million to $530 million.