Cash flow generation remains volatile, evidenced by a $143.4 million working capital outflow in 2026Q1 that contributed to a negative 1.2% free cash flow margin.
| Cash from Operations | 486.47M | 478.38M | 523.61M | 407.7M | 237.53M | 205.57M | 289.16M | 220.24M | 284.63M | 265.03M |
| Operating CF Margin % | - | 7.52% | 7.76% | 7.49% | 5.66% | 5.62% | 7.38% | 5.57% | 7.99% | 8.78% |
| Operating CF Growth % | 54.33% | -8.64% | 28.43% | 71.64% | 15.54% | -28.91% | 31.29% | -22.62% | 7.4% | - |
| Net Income | 227.86M | 241.14M | 290.67M | 207.91M | 126.56M | 88.95M | 118.92M | 137.13M | 239.44M | 111.54M |
| Depreciation & Amortization | 122.66M | 116.49M | 99.25M | 119.97M | 120.5M | 144.21M | 127.98M | 125.7M | 69.87M | 35.2M |
| Stock-Based Compensation | 11.24M | 0 | 56.08M | 34.37M | 23.01M | 20.19M | 15.23M | 8.27M | 45.16M | 40.55M |
| Deferred Taxes | 47.28M | 44.31M | 6.1M | -8.91M | -844K | -3.47M | 1.27M | -123.34M | -1.45M | 5.4M |
| Other Non-Cash Items | 202.37M | 223.42M | 157.32M | 157.64M | 71.62M | 50.62M | 70.03M | 69.78M | -91.05M | 33.77M |
| Working Capital Changes | -124.95M | -146.98M | -85.81M | -103.28M | -103.33M | -94.92M | -44.28M | 2.7M | 58.29M | 77.23M |
| Change in Receivables | -100.87M | -152.14M | -131.26M | 0 | -117.32M | 99.89M | -8.62M | -30.21M | 461.3M | -2.96M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | -132.64M | -7.47M | 29.88M | -448.96M | 25.53M |
| Change in Payables | -77.75M | 23.34M | -42.69M | 24.5M | -717K | -31.77M | 1.49M | -17.12M | 5.57M | 27.33M |
| Cash from Investing | -557.18M | -254M | -556.72M | -375.97M | -417.47M | -240.91M | -346.37M | -570.8M | -503.3M | -52.96M |
| Capital Expenditures | -69.42M | -67.97M | -49.21M | -40.4M | -30.59M | -21.11M | -34.04M | -67.6M | -29.28M | -27.94M |
| CapEx % of Revenue | 1.1% | 1.07% | 0.73% | 0.74% | 0.73% | 0.58% | 0.87% | 1.71% | 0.82% | 0.93% |
| Acquisitions | -444.82M | -142.66M | -507.68M | -336.12M | -387.65M | -221.13M | -313.88M | -507M | -474.45M | -27.27M |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 0 | 179K | 546K | 8.95M | 24.2M | 12.53M | 15.96M | 439K | 2.25M |
| Cash from Financing | 81.93M | -215.68M | 218.75M | -21.87M | 100.37M | -106.5M | 348.23M | 266.04M | 55.41M | -160.17M |
| Debt Issued (Net) | 258.02M | -15.98M | 302.39M | 0 | 150M | -50M | 400M | -180M | 180M | 0 |
| Equity Issued (Net) | -125.54M | -116.11M | -17.07M | -4.94M | -29.04M | -16.15M | 4.39M | 530.61M | -125.81M | -111.4M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -52.09M | 0 | 0 |
| Share Repurchases | -134.99M | -124.99M | -25M | -11M | -22M | -21.7M | 0 | -6.27M | -125.81M | -111.4M |
| Other Financing | -50.56M | -83.59M | -66.57M | -16.93M | -20.59M | -40.36M | -56.16M | -32.48M | 1.23M | -48.77M |
| Net Change in Cash | 14.18M | 12.84M | 180.6M | 10.4M | -81.34M | -143.33M | 291.84M | -85.82M | -164.95M | 53.13M |
| Free Cash Flow | 417.05M | 410.41M | 474.39M | 367.3M | 206.93M | 184.47M | 255.13M | 152.64M | 255.35M | 237.09M |
| FCF Margin % | 6.62% | 6.45% | 7.03% | 6.75% | 4.93% | 5.04% | 6.51% | 3.86% | 7.17% | 7.86% |
| FCF Growth % | -20.1% | -13.49% | 29.16% | 77.5% | 12.18% | -27.69% | 67.14% | -40.22% | 7.7% | - |
| FCF per Share | 3.85 | 3.74 | 4.27 | 3.19 | 1.82 | 1.65 | 2.52 | 1.65 | 3.19 | 2.96 |
| FCF Conversion (FCF/Net Income) | 1.83x | 1.98x | 2.23x | 2.53x | 2.46x | 3.21x | 2.93x | 1.83x | 1.69x | 2.72x |
| Interest Paid | 43.81M | 0 | 34.44M | 30.27M | 20.82M | 14.99M | 14.21M | 23.25M | 16.8M | 12.9M |
| Taxes Paid | 0 | 0 | 65.27M | 74.13M | 32.17M | 22.46M | 55.35M | 60.48M | 17.05M | 14.36M |
Working capital volatility
As reported in financial statements, Parsons Corporation exhibits significant volatility in cash conversion, with OCF/NI ratios swinging from a negative 0.07 in 2026Q1 to a high of 4.23 in 2023Q4, highlighting a disconnect between accounting net income and actual cash generation capabilities.
The extreme variance in the OCF/NI ratio suggests that net income is frequently impacted by non-cash items or timing differences inherent in long-term government contract accounting. Investors should monitor whether this instability reflects genuine operational friction or merely the lumpy nature of milestone-based revenue recognition.
Based on recent SEC filings, Parsons experienced severe working capital outflows, notably a $165.4 million drain in 2025Q1 and a $143.4 million outflow in 2026Q1, which directly undermined the company's ability to maintain positive operating cash flow during those specific reporting periods.
These periodic working capital spikes appear to be the primary driver of the company's inconsistent cash flow performance. The reliance on large-scale infrastructure projects likely necessitates significant upfront cash outlays that are not immediately offset by collections, creating a recurring liquidity drag that warrants further investigation.
According to the provided cash flow data, free cash flow margins have fluctuated wildly, ranging from a negative 4.7% in 2024Q1 to a peak of 15.9% in 2024Q3, indicating that the company's ability to generate surplus cash remains highly sensitive to project-specific timing.
The lack of a stable FCF trajectory suggests that Parsons has not yet achieved the operational maturity required to smooth out cash generation across its diverse contract portfolio. This inconsistency makes it difficult to forecast the company's capacity for sustained capital allocation or debt reduction.
As indicated by historical cash flow tables, Parsons has prioritized share repurchases and acquisitions, such as the $333.5 million spent on acquisitions in 2026Q1, even during quarters where operating cash flow was negative, suggesting a management strategy that favors growth over immediate cash preservation.
The decision to fund acquisitions and buybacks while operating cash flow is under pressure may indicate high management confidence in the long-term value of their strategic pivot. However, this approach increases the company's reliance on external financing or existing cash reserves, which could become a vulnerability if contract wins do not materialize.
Quick answers to the most common questions about buying PSN stock.
Parsons Corporation (PSN) generated $478.4M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Parsons Corporation (PSN) generated $410.4M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Parsons Corporation (PSN) spent $68.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Parsons Corporation (PSN) spent $125.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.