NYSE:PSN
PARSONS CORP
A premier provider of high-value engineering and cyber services to US government and commercial markets with strong recent profitability.
Key Metrics
Investment Thesis
Bull Case
The stock benefits from sustained federal spending on cyber defense and space infrastructure which aligns with Parsons' core competencies. Strong operating cash flow relative to net income suggests high quality earnings and the ability to fund growth without excessive dilution.
Bear Case
Revenue contracted slightly in 2025 to $6.36B after a peak of $6.75B, raising concerns about demand saturation or contract losses. High accounts receivable balance of $1.12B relative to cash reserves creates liquidity pressure if government payments are delayed.
About PARSONS CORP
Parsons Corporation provides engineering, scientific, and professional services to federal, state, local, and international government agencies and commercial clients globally. The company leverages its expertise in cybersecurity, space technology, intelligence support, and infrastructure to deliver mission-critical solutions for the defense sector.
Analysis
Management Discussion
Parsons delivered robust financial performance in 2025 with net income of $308.9M, maintaining strong cash flow from operations at $478.4M. The company successfully managed large capital expenditures of $255.6M and share repurchases of $125.0M while increasing receivables to $1.12B, indicating aggressive sales growth.
Industry Overview
The defense and aerospace services industry is characterized by long-term contracts with government entities that provide stable but cyclical revenue streams. Competition is fierce among large integrators, yet specialized expertise in niche areas like cyber warfare and satellite systems commands premium valuations.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $4.20B | $5.44B | $6.75B | $6.36B |
| Cost of Revenue | $3.25B | $4.24B | $5.34B | $4.93B |
| Gross Profit | $946.7M | $1.21B | $1.41B | $1.43B |
| Operating Expenses | $761.1M | $917.7M | $978.4M | $1.01B |
| Operating Income | $185.7M | $288.4M | $428.1M | $418.1M |
| G&A | $777.4M | $869.9M | $955.0M | $1.02B |
| Stock-Based Comp | $23.0M | $34.4M | $56.1M | $43.2M |
| D&A | $120.5M | $120.0M | $99.3M | $116.5M |
| Depreciation | $39.0M | $39.1M | $37.4M | $42.0M |
| Amortization | $78.2M | $76.6M | $55.6M | $69.6M |
| Other OpEx | $-16.3M | $47.8M | $23.4M | $-2.6M |
| Non-Operating Income | $-19.4M | $-24.3M | $-60.4M | $-35.6M |
| Interest Expense | $23.2M | $31.5M | $51.6M | $51.3M |
| Interest Income | $966.0K | $2.2M | $11.4M | $6.9M |
| Pre-Tax Income | $166.2M | $264.1M | $367.7M | $382.5M |
| Income Tax | $39.7M | $56.1M | $77.0M | $73.6M |
| Continuing Ops | $126.6M | $207.9M | $290.7M | $308.9M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $126.6M | $207.9M | $290.7M | $308.9M |
| Minority Interest | $29.9M | $46.8M | $55.6M | $67.7M |
| Net to Common | $96.7M | $161.1M | $235.1M | $241.1M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $1.72B | $2.14B | $2.46B | $2.68B |
| Cash & Equivalents | $262.5M | $272.9M | $453.5M | $466.4M |
| Accounts Receivable | $717.3M | $915.6M | $1.10B | $1.12B |
| Prepaid Expenses | $105.9M | $191.4M | $167.0M | $176.9M |
| Other Current Assets | $634.0M | $757.5M | $741.5M | $915.8M |
| Long-Term Assets | $2.48B | $2.67B | $3.03B | $3.09B |
| PP&E (Net) | $96.0M | $99.0M | $111.6M | $151.1M |
| Intangibles | $254.1M | $275.6M | $349.9M | $325.9M |
| Goodwill | $1.66B | $1.79B | $2.08B | $2.19B |
| Operating Leases | $155.1M | $159.2M | $153.0M | $126.8M |
| Other LT Assets | $311.2M | $340.1M | $328.3M | $295.6M |
| Total Assets | $4.20B | $4.80B | $5.49B | $5.77B |
| Current Liabilities | $1.11B | $1.41B | $1.92B | $1.53B |
| Accounts Payable | $201.4M | $242.8M | $207.6M | $250.5M |
| Current Debt | — | — | $463.4M | $0 |
| Current Leases | $59.1M | $58.6M | $52.7M | $45.4M |
| Deferred Revenue | $213.1M | $301.1M | $289.8M | $340.1M |
| Other Current Liab | $634.5M | $808.4M | $902.1M | $895.7M |
| Long-Term Liabilities | $994.1M | $1.02B | $1.04B | $1.47B |
| Long-Term Debt | $743.6M | $746.0M | $784.1M | $1.24B |
| LT Operating Leases | $111.4M | $117.5M | $114.4M | $94.0M |
| Other LT Liab | $139.1M | $153.0M | $139.3M | $138.3M |
| Total Liabilities | $2.10B | $2.43B | $2.95B | $3.00B |
| Shareholders' Equity | $2.10B | $2.38B | $2.53B | $2.77B |
| Retained Earnings | $43.1M | $203.7M | $426.8M | $661.2M |
| AOCI | $-17.8M | $-14.9M | $-26.6M | $-20.9M |
| Treasury Stock | $844.9M | $827.3M | $815.3M | $792.6M |
| Total L&E | $4.20B | $4.80B | $5.49B | $5.77B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $126.6M | $207.9M | $290.7M | $308.9M |
| Non-Cash Adjustments | $-83.3M | $-316.5M | $207.9M | $-50.3M |
| Working Capital Changes | $194.3M | $516.3M | $25.1M | $219.9M |
| Cash from Operations | $237.5M | $407.7M | $523.6M | $478.4M |
| Cash from Investing | $-417.5M | $-376.0M | $-556.7M | $-255.6M |
| Share Buybacks | $22.0M | $11.0M | $25.0M | $125.0M |
| Cash from Financing | $100.4M | $-21.9M | $218.7M | $-214.1M |
| FX Effect | $-1.8M | $546.0K | $-5.0M | $4.1M |
| Net Change in Cash | $-81.3M | $10.4M | $180.6M | $12.8M |
| Beginning Cash | $343.9M | $262.5M | $272.9M | $453.5M |
| Ending Cash | $262.5M | $272.9M | $453.5M | $466.4M |
Frequently Asked Questions
How does PARSONS CORP make money?
Core revenue streams include Cybersecurity Services focusing on threat detection and network defense; Space Technology offering satellite communications and launch services; Intelligence Support providing data analytics for national security; and Infrastructure delivering engineering design and construction for public works.
What are the main risks for PSN?
Concentration risk with significant revenue tied to US federal government spending cycles; Potential budget cuts or policy shifts in national security priorities could impact backlog; Inflationary pressures on labor and supply chains may erode gross margins despite price increases.
What is PSN's competitive advantage?
Deep institutional knowledge of federal acquisition processes creates high barriers to entry; Diversified portfolio across multiple government departments reduces reliance on single contracts; Proprietary technology platforms in cyber and space sectors enhance margin potential.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.