Key Takeaways
Parsons Corporation (NYSE: PSN) reported first-quarter adjusted earnings of $0.79 per diluted share, a slight increase from the prior year, even as revenue saw a modest decline.
"Our first quarter results highlighted the resilience of our business and our team's high level of execution, as we delivered our highest adjusted EBITDA margin ever, reached record levels for both total and funded backlog, achieved a robust book-to-bill ratio of 1.4x in both segments, and generated record first quarter cash flow," said Carey Smith, chair, president, and chief executive officer.
Total revenue for the quarter ended March 31, 2026, decreased 4% year-over-year to $1.5 billion. The company attributed the top-line fall to lower volume on a confidential contract. Excluding this, organic revenue grew 3%. Adjusted EBITDA increased 1% to $151 million, with the corresponding margin expanding 50 basis points to a company record 10.1%.
The company ended the quarter with a record backlog of $9.3 billion and a book-to-bill ratio of 1.4x, pointing to future revenue potential. Parsons confirmed its full-year 2026 guidance, projecting revenue between $6.5 billion and $6.8 billion and adjusted EBITDA in the range of $615 million to $675 million. Stock price reaction to the earnings report was not immediately available.
The company's two segments showed divergent top-line results, largely due to the impact of the confidential contract.
The Critical Infrastructure segment posted revenue of $733 million, a 3% increase from the prior year, driven by organic growth in global transportation markets and contributions from acquisitions. The segment's adjusted EBITDA rose 8% to a first-quarter record of $79 million.
The Federal Solutions segment saw revenue decrease by 10% to $758 million. However, excluding the confidential contract, the segment's revenue increased by 12%. Adjusted EBITDA for the segment fell 5% to $72 million, though its margin expanded by 40 basis points to 9.4%.
Parsons secured four single-award contracts valued at over $100 million each during the quarter, contributing to a total of $2.1 billion in new awards. With a record backlog and what the company calls a "robust pipeline of large opportunities," management expressed confidence in its positioning for future growth.
The reiterated guidance suggests management's confidence that new contract wins and growth in core markets will offset the revenue impact from the conclusion of its large confidential project. Investors will be watching the company's conference call for further details on segment margins and the ramp-up of new contracts.
This article is for informational purposes only and does not constitute investment advice.
