Financial Analysis

"4. Acquisitions Altamira Technologies Corporation On January 14, 2026, the Company acquired a 100 % ownership interest in Altamira Technologies Corporation (""ATC""), a privately owned company, for approximately $ 339 million in cash and up to an additional $ 45 million in the event an earn out EBITDA target is exceeded. The Company borrowed $ 330.0 million under the Credit Agreement (as defined in ""Note 10 Debt and Credit Facilities"") to fund the acquisition. Headquartered in McLean, Virginia, ATC enhances Parsons defense and intelligence portfolio by delivering advanced analytics, signals intelligence (SIGINT), cyber, missile warning, and space capabilities, complementing the Companys strengths in all-domain technology integration and Indo-Pacific operations, and expanding with intelligence community (IC) customers. In connection with this acquisition, the Company recognized $ 5 million of acquisition-related expenses in Selling, general and administrative expense in the consolidated statements of income for the six months ended June 30, 2026 , including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition. No acquisition-related expenses were recognized for the three months ended June 30, 2026. The Company agreed to pay the selling shareholders up to an additional $ 45 million in the event an earn out EBITDA target is exceeded during the fiscal year ended December 31, 2026. In the event that the 2026 EBITDA is less than ta …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

"12. Contingencies The Company is subject to certain lawsuits, claims and assessments that arise in the ordinary course of business. Additionally, the Company has been na med as a defendant in lawsuits alleging personal injuries as a result of contact with asbestos products at various project sites. Management believes that any significant costs relating to these claims will be reimbursed by applicable insurance and, although there can be no assurance that these matters will be resolved favorably, management believes that the ultimate resolution of any of these claims will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows. A liability is recorded when it is both probable that a loss has been incurred and the amount of loss or range of loss can be reasonably estimated. When using a range of loss estimate, the Company records the liability using the low end of the range unless some amount within the range of loss appears at that time to be a better estimate than any other amount in the range. The Company records a corresponding receivable for costs covered under its insurance policies. Management judgment is required to determine the outcome and the estimated amount of a loss related to such matters. Management believes that there are no claims or assessments outstanding which would materially affect the consolidated results of operations or the Companys financial position. In September 2015, a former Parsons employe …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

13. Retirement Benefit Plan The Companys principal retirement benefit plan is the Parsons Employee Stock Ownership Plan (ESOP), a stock bonus plan, established in 1975 to cover eligible employees of the Company and certain affiliated companies. Contributions of treasury stock to the ESOP are made annually in amounts determined by the Companys board of directors and are held in trust for the sole benefit of the participants. Shares allocated to a participants account are fully vested after three years of credited service, or in the event(s) of reaching age 65, death or disability while an active employee of the Company. As of June 30, 2026 and December 31, 2025, total shares of the Companys common stock outstanding were 106,797,748 and 106,968,082 , respectively, of which 49,241,105 and 50,864,117 , respectively, were held by the ESOP. A participants interest in their ESOP account is redeemable upon certain events, including retirement, death, termination due to permanent disability, a severe financial hardship following termination of employment, certain conflicts of interest following termination of employment, or the exercise of diversification rights. Distributions from the ESOP of participants interests are made in the Companys common stock based on quoted prices of a share of the Companys common stock on the NYSE. A participant will be able to sell such shares of common stock in the market, subject to any requirements of the federal securities laws. Total ESOP contributi …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

10. Debt and Credit Facilities Debt consisted of the following (in thousands): June 30, 2026 December 31, 2025 Long-Term Debt: Convertible senior notes due 2029 $ 800,000 $ 800,000 Revolving credit facility 234,000 - Term loan due 2028 450,000 450,000 Debt issuance costs ( 9,952 ) ( 12,184 ) Total Long-Term Debt 1,474,048 1,237,816 Total Debt $ 1,474,048 $ 1,237,816 In June 2025, the Company terminated its $ 350 million Delayed Draw Term Loan due 2025 and its $ 650 million Revolving Credit Facility due 2026 and replaced these credit facilities with a $ 450 million Term Loan due 2028 and a $ 750 million Revolving Credit Facility due 2030. Proceeds from the Term Loan were used to pay off the outstanding balance of the Delayed Draw Term Loan. Term Loan In June 2025 , the Company entered into a $ 450 million unsecured Term Loan with an increase option of up to $ 150 million. Proceeds of the Term Loan Agreement may be used (a) to pay off in full, or partially pay off, the Companys existing Convertible Senior Notes, (b) to prepay revolving loans outstanding under the Revolving Credit Agreement (as defined below), or (c) for working capital, capital expenditures and other lawful corporate purposes. The Company incurred $ 0.9 million of debt issuance costs in connection with the Term Loan. These costs are presented as a direct deduction from long-term debt on the face of the balance sheet. Interest expense related to the Term Loan for the three and six months ended June 30, 2026 was …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The Companys contracts contain both fixed-price and cost reimbursable components. Contract types are based on the component that represents the majority of the contract. The following table presents revenue disaggreg ated by contract type (in thousands): Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Fixed-Price $ 468,471 $ 532,135 $ 939,374 $ 1,106,708 Time-and-Materials 400,580 372,945 773,425 720,035 Cost-Plus 706,816 679,243 1,354,244 1,311,940 Total $ 1,575,867 $ 1,584,323 $ 3,067,043 $ 3,138,683 …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

16. Fair Value of Financial Instruments The authoritative guidance on fair value measurement defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an exit price). At June 30, 2026 and December 31, 2025, the Companys financial instruments include cash, cash equivalents, accounts receivable, accounts payable, and other liabilities. The fair values of these financial instruments approximate their carrying values due to their short-term maturities. Fair value is determined by using one or more of the following valuation techniques: Market approach Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; Cost approach Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and Income approach Techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing models and lattice models). In addition, the guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The t …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

11. Income Taxes The Companys effective tax rate was 112.4 % and 21.0 % for the three months ended June 30, 2026 and June 30, 2025, respectively. The increase in the effective tax rate was due primarily to the Companys lower pre-tax quarterly income relative to the impact of increased valuation allowances against deferred tax assets related to foreign net operating loss carryforwards (NOLs) and foreign tax credit carryforwards (FTCs), partially offset by a change in jurisdictional mix of earnings. The Companys effective tax rate was 23.9 % and 19.8 % for the six months ended June 30, 2026 and June 30, 2025, respectively. The change in effective tax rate was due primarily to increased valuation allowances against deferred tax assets related to NOLs and FTCs, partially offset by a change in jurisdictional mix of earnings. The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21 % for the three months ended June 30, 2026 primarily relates to increased valuation allowances relative to lower pre-tax quarterly earnings, state income taxes and executive compensation subject to Section 162(m) of the Internal Revenue Code, partially offset by earnings subject to lower tax in foreign jurisdictions, untaxed income attributable to noncontrolling interests, and federal tax credits. The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21 % for the six months ended June 30, 2026 primarily relates to increas …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

6. Leases The Company has operating and finance leases for corporate and project office spaces, vehicles, heavy machinery and office equipment. Our leases have remaining lease terms of one year to eleven years , some of which may include options to extend the leases for up to five years , and some of which may include options to terminate the leases after the third year. The components of lease costs for the three and six months ended June 30, 2026 and June 30, 2025 are as follows (in thousands): Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Operating lease cost $ 15,843 $ 16,709 $ 32,376 $ 33,264 Short-term lease cost 4,478 $ 3,289 9,748 6,667 Amortization of right-of-use assets 1,201 $ 1,169 2,332 2,277 Interest on lease liabilities 125 $ 133 242 261 Sublease income ( 606 ) $ ( 898 ) ( 1,473 ) ( 1,822 ) Total lease cost $ 21,041 $ 20,402 $ 43,225 $ 40,647 Supplemental cash flow information related to leases for the six months ended June 30, 2026 and June 30, 2025 is as follows (in thousands): Six Months Ended June 30, 2026 June 30, 2025 Operating cash flows for operating leases $ 31,893 $ 33,068 Operating cash flows for finance leases 248 261 Financing cash flows from finance leases 2,356 2,210 Right-of-use assets obtained in exchange for new operating lease liabilities 19,318 10,174 Right-of-use assets obtained in exchange for new finance lease liabilities $ 3,413 $ 1,591 Supplemental balance sheet and other information related …

LesseeOperatingLeasesTextBlock · excerpt; the full note is in the filing

15. Related Party Transactions The Company often provides services to unconsolidated joint ventures and revenues include amounts related to recovering costs for these services. Revenues related to services the Company provided to unconsolidated joint ventures for the three months ended June 30, 2026 and June 30, 2025 were $ 46.7 million and $ 42.0 million , respectively and for the six months ended June 30, 2026 and June 30, 2025 were $ 96.3 million and $ 87.5 million , respectively. For the three months ended June 30, 2026 and June 30, 2025, the Company incurred reimbursable costs of $ 34.9 million and $ 34.0 million , respectively and for the six months ended June 30, 2026 and June 30, 2025 were $ 67.2 million and $ 67.8 million , respectively. Amounts included in the consolidated balance sheets related to services the Company provided to unconsolidated joint ventures are as follows (in thousands): June 30, 2026 December 31, 2025 Accounts receivable $ 49,578 $ 45,116 Contract assets 35,701 29,283 Contract liabilities 6,351 7,297

RelatedPartyTransactionsDisclosureTextBlock

5. Contracts with Customers Disaggregation of Revenue The Companys contracts contain both fixed-price and cost reimbursable components. Contract types are based on the component that represents the majority of the contract. The following table presents revenue disaggreg ated by contract type (in thousands): Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Fixed-Price $ 468,471 $ 532,135 $ 939,374 $ 1,106,708 Time-and-Materials 400,580 372,945 773,425 720,035 Cost-Plus 706,816 679,243 1,354,244 1,311,940 Total $ 1,575,867 $ 1,584,323 $ 3,067,043 $ 3,138,683 See Note 18 Segments Information for the Companys revenues by business lines. Contract Assets and Contract Liabilities Contract assets and contract liabilities balances at June 30, 2026 and December 31, 2025 were as follows (in thousands): June 30, 2026 December 31, 2025 $ change % change Contract assets (1) $ 1,077,066 $ 915,806 $ 161,260 17.6 % Contract liabilities (2) 407,301 340,113 67,188 19.8 % Net contract assets (liabilities) (3) $ 669,765 $ 575,693 $ 94,072 16.3 % (1) Contract assets includes $ 14.8 million and $ 0 of assets held for sale as of June 30, 2026 and December 31, 2025, respectively, and is reported in assets held for sale on the consolidated balance sheets. Refer to contracts held for sale section below. (2) Contract liabilities includes $ 60.7 million and $ 0 of liabilities held for sale as of June 30, 2026 and December 31, 2025, respectively, and is reported …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

18. Segment Information The Company operates in two reportable segments: Federal Solutions and Critical Infrastructure. The Federal Solutions segment provides advanced technical solutions to the U.S. government, delivering timely, cost-effective hardware, software and solutions for mission-critical projects. The segment provides advanced technologies, supporting national security missions in cyber operations, missile defense, space, electronic warfare and facility modernization, hazardous material remediation, and engineering services. The Critical Infrastructure segment provides integrated engineering and management services for complex physical and digital infrastructure around the globe. The Critical Infrastructure segment is a technology innovator focused on next generation digital systems and complex structures. Industry leading capabilities in engineering design and project management allow the Company to deliver significant value to customers by employing cutting-edge technologies, improving timelines and reducing costs. The Company defines its reportable segments based on the way the chief operating decision maker (CODM), its Chief Executive Officer , evaluates the performance of each segment and manages the operations of the Company for purposes of allocating resources among the segments. The CODM evaluates segment operating performance using segment Revenue, segment direct cost of contracts, segment Selling, General and Administrative expense and segment Adjusted EB …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

19. Subsequent Events None.

SubsequentEventsTextBlock