Parsons reported $6.4 billion in revenue for fiscal year 2025, while achieving record adjusted EBITDA and net income for the full year.
How Did Parsons Perform Financially in Fiscal Year 2025?
In an earnings release published Wednesday, the Chantilly, Virginia-based disruptive technology provider said total revenue of $6.4 billion showed a 6 percent year-over-year decrease and a 9 percent organic decline. However, excluding the impact of a confidential contract, the total revenue grew 12 percent for the full fiscal year and 8 percent on an organic basis, underscoring strength across Parsons’ core markets.
Furthermore, the company’s adjusted EBITDA reached a record $609 million, up 1 percent from the prior year, with an adjusted EBITDA margin of 9.6 percent, also a full-year high. Net income also rose 3 percent to $241 million, with diluted earnings per share, or EPS, reaching $2.20.
“2025 was a successful year despite a dynamic federal government macroenvironment. We achieved double-digit revenue growth excluding our confidential contract, delivered record adjusted EBITDA and adjusted EBITDA margin, exceeded our cash flow expectation, and secured fifteen contract wins valued at over $100 million for the full year, matching last year’s record. These accomplishments validate the strength and resilience of our diversified portfolio,” said Carey Smith, chair, president and CEO of Parsons.
“Additionally, we achieved high win rates, maintained strong hiring and record retention rates, were recognized as the number one program manager in the world by Engineering News-Record, and continued to efficiently deploy capital through three accretive acquisitions and increased share repurchases, all while maintaining a strong balance sheet,” the eight-time Wash100 Award winner added.
What Did Parsons’ Q4 2025 Financial Results Show?
For the fourth quarter of 2025, Parsons posted revenue of $1.6 billion, an 8 percent decrease year-over-year and a 10 percent decline on an organic basis. Excluding the confidential contract, total revenue grew 11 percent and 8 percent on an organic basis, reflecting underlying strength across the company’s portfolio.
Parsons reported that net income for the quarter increased 3 percent year-over-year to $56 million, marking a fourth-quarter record for the company. The company also achieved a record adjusted EBITDA of $153 million, up 5 percent from the prior-year period, and an adjusted EBITDA margin of 9.6 percent.
In addition, cash flow from operations rose 32 percent year-over-year to $168 million. Parsons also recorded a book-to-bill ratio of 0.9x for the quarter and extended its streak of achieving a trailing 12-month book-to-bill ratio of 1.0x or greater in every quarter since its initial public offering.
What Drove Segment Results?
The Critical Infrastructure segment posted a 15 percent annual revenue growth to $3.1 billion and a 73 percent increase in adjusted EBITDA. This growth was fueled by the Transportation and Urban Development markets and contributions from the acquisitions of TRS and BCC Engineering. Conversely, Federal Solutions’ revenue decreased 20 percent to $3.2 billion due to the impact of the confidential contract. However, excluding that contract, the segment grew 9 percent, behind gains in cyber and electronic warfare and space and missile defense.
What Key Contract Wins And Acquisitions Highlighted The Fourth Quarter?
Parsons ended the year with an $8.7 billion backlog and 15 contract wins exceeding $100 million each. Notable Q4 awards include a $392 million biometrics and network engineering contract, a $125 million task order supporting the U.S. Army’s High Performance Computing Modernization Program, a $100 million award from Nammo for a rocket motor manufacturing facility in Florida, and a $593 million contract extension from the Federal Aviation Administration to continue supporting National Airspace System modernization efforts.
Additionally, the company finalized the acquisition of Applied Sciences Consulting and the $375 million acquisition of Altamira Technologies, moves that significantly deepen Parsons’ capabilities in signals intelligence and space solutions for the intelligence community and the Department of War.
2026 Guidance Overview
Parsons expects fiscal 2026 revenue between $6.5 billion and $6.8 billion, and adjusted EBITDA of $615 million to $675 million. Operating cash flow is forecast between $470 million and $530 million, with 100 percent free cash flow conversion, as the company continues to target mid-single-digit or better organic growth and double-digit margins by 2028.
