Parsons (PSN) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $1.651B, up 1.8% YoY; adjusted EBITDA was $167.8M, up 6.1%, with a record 10.2% margin, and operating cash flow was $269M.

• Awards were $1.8B, up 14% YoY; backlog reached $9.36B and funded backlog $6.84B, while $12B in contract wins remained unbooked.

• 9M revenue fell 0.9% to $4.718B; net income declined to $91.9M from $185.6M and adjusted EBITDA to $361.0M from $456.0M.

Financial highlights

• Revenue rose 2% YoY; growth was 5% excluding the confidential contract and divestitures, and 2% organically excluding the confidential contract.

• GAAP net income was $54.2M versus $64.1M; adjusted net income was $94.9M versus $93.1M, and adjusted diluted EPS was $0.89 versus $0.86.

• Q3 operating cash flow was $269M; trailing 12-month cash flow rose 12% to $490M, with free cash flow conversion of 130%.

• SG&A rose 9.7% to $285.5M, reflecting acquisitions, acquired-intangible amortization, technology investment and higher ATC earnout valuation.

Outlook and guidance

• FY2026 guidance: revenue of $6.25B–$6.45B, adjusted EBITDA of $510M–$550M and operating cash flow of $430M–$490M; free cash flow conversion is expected to exceed 100% of adjusted net income.

• Guidance midpoint assumptions include adjusted EBITDA margin of ~8.3%, Federal Solutions at ~49.3% of revenue, net interest expense of ~$60M and a GAAP tax rate of ~24%.

• Q4 revenue is expected to decelerate seasonally, including FAA and Canada mine-program trends; federal adjusted EBITDA margin is expected to ramp to ~9.7%.

• $4.0B of funded backlog was expected to convert to revenue in the next 12 months, subject to customer funding and contract options.