Cumulative operating cash flow of $1.06B over ten quarters exceeds net income of $514M, yet quarterly FCF swung from $149.7M in 2025Q3 to -$18.6M in 2026Q1 due to working capital swings.
Parsons Corporation (PSN) cash flow statement — 9-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Cash from Operations | 384.25M | 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 % | -8.75% | -8.64% | 28.43% | 71.64% | 15.54% | -28.91% | 31.29% | -22.62% | 7.4% | - |
| Net Income | 157.41M | 241.14M | 290.67M | 207.91M | 126.56M | 88.95M | 118.92M | 137.13M | 239.44M | 111.54M |
| Depreciation & Amortization | 130.71M | 116.49M | 99.25M | 119.97M | 120.5M | 144.21M | 127.98M | 125.7M | 69.87M | 35.2M |
| Stock-Based Compensation | 22.4M | 0 | 56.08M | 34.37M | 23.01M | 20.19M | 15.23M | 8.27M | 45.16M | 40.55M |
| Deferred Taxes | 44.01M | 44.31M | 6.1M | -8.91M | -844K | -3.47M | 1.27M | -123.34M | -1.45M | 5.4M |
| Other Non-Cash Items | 239.77M | 223.42M | 157.32M | 157.64M | 71.62M | 50.62M | 70.03M | 69.78M | -91.05M | 33.77M |
| Working Capital Changes | -224.8M | -146.98M | -85.81M | -103.28M | -103.33M | -94.92M | -44.28M | 2.7M | 58.29M | 77.23M |
| Change in Receivables | -135.91M | -152.14M | -131.26M | -296.08M | -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 | -46.39M | 23.34M | -42.69M | 24.5M | -717K | -31.77M | 1.49M | -17.12M | 5.57M | 27.33M |
| Cash from Investing | -476.51M | -254M | -556.72M | -375.97M | -417.47M | -240.91M | -346.37M | -570.8M | -503.3M | -52.96M |
| Capital Expenditures | -76.11M | -67.97M | -49.21M | -40.4M | -30.59M | -21.11M | -34.04M | -67.6M | -29.28M | -27.94M |
| CapEx % of Revenue | 1.21% | 1.07% | 0.73% | 0.74% | 0.73% | 0.58% | 0.87% | 1.71% | 0.82% | 0.93% |
| Acquisitions | -355.28M | -142.66M | -507.68M | -336.12M | -387.65M | -221.13M | -313.88M | -507M | -474.45M | -27.27M |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 54.97M | 0 | 179K | 546K | 8.95M | 24.2M | 12.53M | 15.96M | 439K | 2.25M |
| Cash from Financing | -52.73M | -215.68M | 218.75M | -21.87M | 100.37M | -106.5M | 348.23M | 266.04M | 55.41M | -160.17M |
| Debt Issued (Net) | 149.08M | -15.98M | 302.39M | 0 | 150M | -50M | 400M | -180M | 180M | 0 |
| Equity Issued (Net) | -125.2M | -116.11M | -17.07M | -4.94M | -29.04M | -16.15M | 4.39M | 530.61M | -125.81M | -111.4M |
| Dividends Paid | 33.63M | 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 | -110.23M | -83.59M | -66.57M | -16.93M | -20.59M | -40.36M | -56.16M | -32.48M | 1.23M | -48.77M |
| Net Change in Cash | -145.28M | 12.84M | 180.6M | 10.4M | -81.34M | -143.33M | 291.84M | -85.82M | -164.95M | 53.13M |
| Free Cash Flow | 308.14M | 410.41M | 474.39M | 367.3M | 206.93M | 184.47M | 255.13M | 152.64M | 255.35M | 237.09M |
| FCF Margin % | 4.9% | 6.45% | 7.03% | 6.75% | 4.93% | 5.04% | 6.51% | 3.86% | 7.17% | 7.86% |
| FCF Growth % | -40.79% | -13.49% | 29.16% | 77.5% | 12.18% | -27.69% | 67.14% | -40.22% | 7.7% | - |
| FCF per Share | 2.83 | 3.74 | 4.27 | 3.19 | 1.82 | 1.65 | 2.52 | 1.65 | 3.19 | 2.96 |
| FCF Conversion (FCF/Net Income) | 1.96x | 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 |
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.
Key Metrics
Top Statement Risk
Revenue contraction and EPS miss
Metrics are mathematically derived from official filings.
Earnings Quality Masked by Working Capital Swings
In 2026Q2, operating cash flow of $57.6M contrasted sharply with a net loss of $15.2M, yielding an OCF/NI of -3.78, as reported in the cash flow statement. This divergence appears driven by a $70M working capital outflow, suggesting earnings quality is obscured by timing.
The negative OCF/NI ratio in 2026Q2 is a red flag, but the positive operating cash flow despite a net loss indicates that non-cash charges like D&A ($36.6M) and SBC ($11.2M) are providing a cushion. However, the massive working capital outflow of $70M suggests that cash conversion is being distorted by project timing, possibly related to milestone billings or contract settlements. Investors should monitor whether this is a recurring pattern or a one-off quarter.
Free Cash Flow Volatility Reflects Contract Timing
Free cash flow swung from $149.7M in 2025Q3 to -$18.6M in 2026Q1, with FCF margins ranging from 9.5% to -1.6% over the past year, based on reported figures. This volatility appears tied to working capital swings rather than a fundamental deterioration in cash generation.
The FCF trajectory is highly erratic, with positive quarters in 2025Q2-Q4 and 2026Q2, but negative in 2026Q1. The negative quarters coincide with large working capital outflows, suggesting that Parsons' cash flow is heavily influenced by the timing of contract payments and milestone achievements. The average FCF margin over the last four quarters is roughly 4.9%, which is below the peer average of ~8.5%, indicating that Parsons may be less efficient at converting revenue to cash.
Capital Expenditures Remain Modest
Capital expenditures averaged $15.4M per quarter over the last ten quarters, representing only 1.0% of revenue in 2026Q2, as per the cash flow statement. This low capital intensity suggests Parsons is a services business with minimal fixed asset requirements, but it also implies limited organic growth investment.
CapEx as a percentage of revenue has been consistently below 2%, which is typical for a government services firm. The low capital intensity means that free cash flow is largely driven by working capital management and operating profitability. However, the lack of significant CapEx may indicate that Parsons is not investing heavily in new capabilities or infrastructure, which could limit long-term growth potential.
Working Capital Swings Dominate Cash Flow
Working capital changes have been the primary driver of cash flow volatility, with outflows of $143.4M in 2026Q1 and $70.0M in 2026Q2, as reported in the cash flow statement. These swings appear tied to the timing of receivables and payables on large government contracts.
The working capital swings are substantial, with negative changes in most quarters, indicating that Parsons is using cash to fund growth in receivables or to pay down payables. The pattern suggests that the company's cash conversion cycle is lengthening, possibly due to slower collections from government clients or increased prepayments to subcontractors. This is a key area to monitor, as persistent working capital outflows could pressure liquidity.
Capital Deployment Focused on Buybacks and Acquisitions
Parsons has consistently repurchased shares, with buybacks totaling $15M in 2026Q2 and $35M in 2026Q1, while also making net acquisitions of $3.4M and $333.5M in those quarters, according to the cash flow statement. No dividends were paid in most quarters, indicating a growth-oriented capital allocation.
The company is returning capital to shareholders through buybacks, but the amounts are modest relative to market cap. The significant acquisition outflows in 2026Q1 ($333.5M) and 2024Q4 ($193.4M) suggest an active M&A strategy, likely to bolster its technology offerings. The lack of dividends indicates that management is prioritizing reinvestment and buybacks over income distribution.
Cumulative Cash Generation Exceeds Net Income
Over the last ten quarters, cumulative operating cash flow of $1.06B far exceeded cumulative net income of $514M, as per the cash flow statement. This divergence suggests that earnings are understated relative to cash generation, possibly due to non-cash charges and working capital benefits.
The cumulative OCF/NI ratio of approximately 2.06 indicates that Parsons is generating significantly more cash than its reported net income. This could be due to high D&A and SBC, which are non-cash expenses, and favorable working capital timing. However, the recent quarters show a reversal, with OCF lagging net income in 2026Q1 and Q2, which may signal a normalization or deterioration in cash conversion.
Cash Flow Statement Obscures Acquisition Impact
The cash flow statement shows net acquisition outflows of $333.5M in 2026Q1 and $193.4M in 2024Q4, as reported, which may obscure the underlying cash generation of the core business. These acquisitions could be masking organic growth challenges.
The significant acquisition activity suggests that Parsons is using cash to buy growth rather than generating it organically. The cash flow statement does not separate the cash flows of acquired businesses, making it difficult to assess the organic performance. Additionally, the large working capital swings may be partly due to acquisition-related adjustments, such as earn-outs or working capital true-ups. Investors should be cautious in interpreting the reported cash flow figures without adjusting for these items.