Parsons Corporation reported fourth‑quarter and full‑year 2025 results on February 11, 2026, with revenue falling 8% to $1.60 billion in Q4 and 6% to $6.40 billion for the year. Adjusted earnings per share were $0.75 in the quarter and $3.17 for the year, both below analyst consensus of $0.79 and $3.26, respectively. Adjusted EBITDA rose 5% to $153 million in Q4 and 1% to $609 million for the year, giving an adjusted EBITDA margin of 9.6% in Q4 and 9.6% for the full year, up from 9.0% in 2024.
The revenue decline was driven by a 22% drop in the Federal Solutions segment, largely attributable to the termination of a confidential contract that had previously contributed $350 million to the segment. In contrast, the Critical Infrastructure segment grew 12% organically, reflecting strong demand for infrastructure modernization projects. When the confidential contract is excluded, the company’s revenue growth would have been roughly 11% in Q4 and 12% for the year, underscoring the impact of the contract loss on top‑line performance.
Margin expansion was largely a result of disciplined cost management and a favorable mix shift toward higher‑margin projects. Adjusted EBITDA margin increased to 9.6% from 9.0% in 2024, despite the revenue decline, because operating costs grew at a slower pace and the company leveraged its scale to negotiate better pricing on materials and labor. The company also reported operating cash flow of $168 million in Q4, and a free‑cash‑flow conversion rate of 100% for the full year, indicating strong cash‑generation capability.
Management guided for 2026 revenue of $6.5 billion to $6.8 billion, a range that aligns with analyst expectations of $6.65 billion. The company reiterated its target of mid‑single‑digit organic revenue growth and double‑digit adjusted EBITDA margin expansion by 2028, signaling confidence in its execution strategy and the resilience of its core business lines.
CEO Carey Smith noted that 2025 was a “successful year despite a dynamic federal government macroenvironment.” She highlighted the company’s record adjusted EBITDA and margin, and emphasized the importance of continued investment in high‑return verticals. Investors reacted negatively to the revenue and EPS misses, which outweighed the margin expansion and cash‑flow strength, reflecting a focus on top‑line growth and the impact of the confidential contract termination.
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