Revenue declined 5.7% YoY in 2026Q2, marking the fourth consecutive quarter of contraction, while gross margin plummeted 510 bps to 16.9%, driving operating income down 98.7% to $1.3M.
Parsons Corporation (PSN) annual income statement — 9-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Sales/Revenue | 6.29B | 6.36B | 6.75B | 5.44B | 4.2B | 3.66B | 3.92B | 3.95B | 3.56B | 3.02B |
| Revenue Growth % | -5.84% | -5.72% | 24.03% | 29.74% | 14.6% | -6.59% | -0.91% | 11.07% | 18.01% | - |
| Cost of Goods Sold | 4.94B | 4.93B | 5.34B | 4.24B | 3.25B | 2.81B | 3.04B | 3.12B | 2.8B | 2.4B |
| COGS % of Revenue | - | 77.51% | 79.17% | 77.84% | 77.43% | 76.7% | 77.63% | 78.97% | 78.5% | 79.55% |
| Gross Profit | 1.35B | 1.43B | 1.41B | 1.21B | 946.72M | 852.82M | 876.86M | 831.75M | 765.5M | 616.87M |
| Gross Margin % | 21.5% | 22.49% | 20.83% | 22.16% | 22.57% | 23.3% | 22.37% | 21.03% | 21.5% | 20.45% |
| Gross Profit Growth % | - | 1.79% | 16.62% | 27.39% | 11.01% | -2.74% | 5.42% | 8.65% | 24.09% | - |
| Operating Expenses | 1.05B | 1.01B | 978.36M | 917.66M | 761.06M | 720.38M | 699.04M | 739.69M | 560.5M | 466.17M |
| OpEx % of Revenue | - | 15.92% | 14.49% | 16.86% | 18.14% | 19.68% | 17.84% | 18.7% | 15.74% | 15.45% |
| Selling, General & Admin | 1.05B | 1.01B | 955M | 869.9M | 777.4M | 757.24M | 729.1M | 781.41M | 597.41M | 506.25M |
| SG&A % of Revenue | - | 15.92% | 14.15% | 15.98% | 18.53% | 20.69% | 18.6% | 19.76% | 16.78% | 16.78% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | 0 | 23.36M | 47.75M | -16.35M | -36.86M | -30.06M | -41.72M | -36.91M | -40.09M |
| Operating Income | 305.08M | 418.19M | 428.07M | 288.36M | 185.67M | 132.45M | 177.81M | 92.06M | 205.01M | 150.7M |
| Operating Margin % | 4.85% | 6.57% | 6.34% | 5.3% | 4.43% | 3.62% | 4.54% | 2.33% | 5.76% | 5% |
| Operating Income Growth % | - | -2.31% | 48.45% | 55.31% | 40.18% | -25.51% | 93.14% | -55.09% | 36.04% | - |
| EBITDA | 363.22M | 534.68M | 527.32M | 408.33M | 306.17M | 276.65M | 305.8M | 217.76M | 274.88M | 185.9M |
| EBITDA Margin % | 5.77% | 8.4% | 7.81% | 7.5% | 7.3% | 7.56% | 7.8% | 5.51% | 7.72% | 6.16% |
| EBITDA Growth % | -30.87% | 1.4% | 29.14% | 33.37% | 10.67% | -9.53% | 40.43% | -20.78% | 47.86% | - |
| D&A (Non-Cash Add-back) | 58.14M | 116.49M | 99.25M | 119.97M | 120.5M | 144.21M | 127.98M | 125.7M | 69.87M | 35.2M |
| EBIT | 336.5M | 433.81M | 419.23M | 295.55M | 189.41M | 130.28M | 182.37M | 90.97M | 174.29M | 110.62M |
| Net Interest Income | -52.83M | -44.42M | -40.15M | -29.31M | -22.22M | -17.3M | -20.17M | -22.43M | -18.13M | -13.33M |
| Interest Income | 6.04M | 6.88M | 11.43M | 2.19M | 966K | 396K | 787K | 1.3M | 2.71M | 2.46M |
| Interest Expense | 58.87M | 51.3M | 51.58M | 31.5M | 23.18M | 17.7M | 20.96M | 23.73M | 20.84M | 15.8M |
| Other Income/Expense | -27.46M | -35.68M | -60.41M | -24.3M | -19.44M | -19.86M | -16.4M | -24.82M | 54.8M | -17.7M |
| Pretax Income | 277.62M | 382.51M | 367.65M | 264.05M | 166.22M | 112.59M | 161.41M | 67.24M | 259.8M | 133M |
| Pretax Margin % | 4.41% | 6.01% | 5.45% | 4.85% | 3.96% | 3.08% | 4.12% | 1.7% | 7.3% | 4.41% |
| Income Tax | 56.29M | 73.65M | 76.99M | 56.14M | 39.66M | 23.64M | 42.49M | -69.89M | 74.75M | 21.46M |
| Effective Tax Rate % | 20.28% | 19.25% | 20.94% | 21.26% | 23.86% | 20.99% | 26.33% | -103.93% | 28.77% | 16.14% |
| Net Income | 157.41M | 241.14M | 235.05M | 161.15M | 96.66M | 64.07M | 98.54M | 120.53M | 167.95M | 97.33M |
| Net Margin % | 2.5% | 3.79% | 3.48% | 2.96% | 2.3% | 1.75% | 2.51% | 3.05% | 4.72% | 3.23% |
| Net Income Growth % | -60.12% | 2.59% | 45.86% | 66.71% | 50.87% | -34.98% | -18.25% | -28.23% | 72.56% | - |
| Net Income (Continuing) | 221.33M | 308.86M | 290.67M | 207.91M | 126.56M | 88.95M | 118.92M | 137.13M | 239.44M | 111.54M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 116.35M | 125.65M | 118.1M | 89.5M | 52.37M | 36.34M | 47.65M | 30.87M | 46.46M | 27.49M |
| EPS (Diluted) | 1.45 | 2.20 | 2.12 | 1.42 | 0.85 | 0.59 | 0.97 | 1.30 | 2.10 | 1.22 |
| EPS Growth % | -35.27% | 3.77% | 49.3% | 67.06% | 44.07% | -39.18% | -25.38% | -38.1% | 72.13% | - |
| EPS (Basic) | - | 2.26 | 2.21 | 1.56 | 0.93 | 0.62 | 0.98 | 1.30 | 2.10 | 1.22 |
| Diluted Shares Outstanding | 108.71M | 109.69M | 111.09M | 115.08M | 113.48M | 112.13M | 101.2M | 92.75M | 80.01M | 80.01M |
| Basic Shares Outstanding | 108.71M | 106.83M | 106.29M | 104.99M | 103.76M | 102.54M | 100.85M | 92.42M | 80.01M | 80.01M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | 43.22% | - | - |
Quick answers to the most common questions about buying PSN stock.
For fiscal year 2025, Parsons Corporation (PSN) reported total revenue of $6.36B. This represents a 110.9% increase compared to $3.02B in 2017.
Parsons Corporation (PSN) is profitable, generating $241.1M in net income for the fiscal year ending 2025 with a net profit margin of 3.8%.
Parsons Corporation (PSN) reported an operating income of $418.2M, resulting in an operating profit margin of 6.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Parsons Corporation (PSN) generated $1.43B in gross profit for the year, representing a gross profit margin of 22.5%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Revenue contraction and EPS miss
Metrics are mathematically derived from official filings.
Top-Line Contraction Persists
Parsons' revenue declined 5.7% year-over-year in 2026Q2, marking the fourth consecutive quarter of negative growth, according to recent financial statements. The contraction appears driven by deliberate portfolio pruning and contract timing, though the pace of decline is moderating.
The revenue trajectory has decelerated sharply from the 27.6% growth seen in 2024Q3 to a persistent decline, with the most recent quarter showing only a 0.5% sequential dip. This suggests the company may be exiting lower-margin legacy work, but the lack of new high-tech wins to offset the decline raises questions about the durability of the pivot. Investors should monitor backlog conversion and funded backlog levels to assess whether the contraction is transient or structural.
Gross Margin Volatility Spikes
Gross margin plummeted to 16.9% in 2026Q2 from 22.0% a year earlier, as reported in the income statement. This 510-basis-point drop appears tied to a one-time charge or project mix shift, but it underscores the inherent volatility in Parsons' contract portfolio.
The gross margin decline in 2026Q2 is anomalous relative to the stable 21-24% range seen over the prior eight quarters. While the company's blended margin profile is lower than pure-play defense IT peers like Booz Allen (20.9%), the sharp contraction suggests potential cost overruns on fixed-price contracts or a significant change in revenue mix. If this is a one-time event, margins may revert, but the magnitude warrants close scrutiny of contract estimates at completion.
Operating Leverage Inverted
Operating income collapsed to $1.3 million in 2026Q2, a 98.7% drop from the prior year, despite SG&A remaining relatively flat at $265 million, based on reported figures. This indicates a severe loss of operating leverage, likely due to the gross margin compression.
The operating margin of 0.1% in 2026Q2 is a stark contrast to the 6-7% range maintained over the past two years. SG&A expenses have grown modestly, but the collapse in gross profit overwhelmed any overhead efficiency. This suggests that Parsons' cost structure is highly sensitive to project-level profitability, and the company may need to reassess its contract bidding strategy to restore operating leverage.
EPS Miss Clouds Earnings Quality
Parsons reported a diluted EPS of -$0.14 in 2026Q2, missing estimates by $0.92, according to the earnings release. The net loss of $15.2 million appears driven by a substantial one-time charge, but the lack of disclosure on its nature raises concerns about recurring profitability.
The net margin turned negative at -1.0%, a stark reversal from the 3.5% positive margin in the prior quarter. Stock-based compensation of $11.2 million remained consistent, but the net loss suggests non-operating items or tax anomalies played a role. Given the CEO's commentary on strong book-to-bill, the miss may be transient, but investors should demand clarity on the charge to assess the quality of future earnings.
SG&A Discipline Amidst Turmoil
SG&A expenses rose only 5.2% year-over-year in 2026Q2 to $265.2 million, even as revenue declined, based on the income statement. This suggests management is maintaining overhead discipline, but the cost structure remains heavily weighted toward labor, leaving margins exposed to wage inflation.
The SG&A-to-revenue ratio increased to 16.6% in 2026Q2 from 15.9% a year earlier, reflecting the revenue decline rather than aggressive spending. With R&D reported as zero, the company's investment in future capabilities appears limited, which may hinder its ability to shift toward higher-margin proprietary software. The flat SBC suggests no unusual equity compensation, but the overall cost structure remains variable and tied to project labor.
Is the Pivot Stalling?
The persistent revenue decline and the 2026Q2 EPS miss could indicate that Parsons' strategic shift toward high-tech defense is not generating enough growth to offset legacy work exits, as reported in recent filings. Short-sellers may argue the company is losing relevance in both segments.
While management frames the contraction as deliberate pruning, the lack of visible acceleration in high-margin revenue streams is concerning. The gross margin collapse in 2026Q2, if not a one-time event, could signal that the remaining portfolio is more competitive and lower-margin than expected. Additionally, the lowered guidance suggests near-term headwinds that may not be fully captured in consensus estimates. Investors should weigh the balance sheet strength (0.53% debt-to-equity) against the operational deterioration, as the former provides flexibility but the latter tests execution.