PARSONS CORP

For the Three Months Ended September 30, 2026 and September 30, 2025

Consolidated Statements of Shareholders’ Equity

For the Nine Months Ended September 30, 2026 and September 30, 2025

Parsons Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Description of Operations

Organization

Parsons Corporation, a Delaware corporation, and its subsidiaries (collectively, the “Company”) provide sophisticated design, engineering and technical solutions to the United States federal government and Critical Infrastructure customers worldwide. The Company performs work in various foreign countries through local subsidiaries, joint ventures and foreign offices maintained to carry out specific projects.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited consolidated financial statements and related notes of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and pursuant to the interim period reporting requirements of Form 10-Q. They do not include all of the information and footnotes required by GAAP for complete financial statements and, therefore, should be read in conjunction with our consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

In the opinion of management, the consolidated financial statements reflect all normal recurring adjustments necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented. The results of operations and cash flows for any interim period are not necessarily indicative of results for the full year or for future years.

This Quarterly Report on Form 10-Q includes the accounts of Parsons Corporation and its subsidiaries and affiliates which it controls. Interests in joint ventures that are controlled by the Company, or for which the Company is otherwise deemed to be the primary beneficiary, are consolidated. For joint ventures in which the Company does not have a controlling interest, but exerts a significant influence, the Company applies the equity method of accounting (see “Note 14 – Investments in and Advances to Joint Ventures" for further discussion). Intercompany accounts and transactions areeliminated in consolidation. Certain amounts may not foot due to rounding.

Use of Estimates

The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. The Company’s most significant estimates and judgments involve revenue recognition with respect to the determination of the costs to complete contracts and transaction price; determination of self-insurance reserves; useful lives of property and equipment and intangible assets; valuation of deferred income tax assets and uncertain tax positions, among others. Estimates of costs to complete contracts are continually evaluated as work progresses and are revised when necessary. When a change in estimate is determined to have an impact on contract profit, the Company records a positive or negative adjustment to the consolidated statement of income.

New Accounting Pronouncements

In the fourth quarter of 2024, the FASB issued ASU 2024-03 "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03"). ASU 2024-03 requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and this ASU should be applied prospectively; however, retrospective application is also permitted. Theadoption of this ASU willnot have a material impact on the Company's consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), to improve the transparency of income tax disclosures. ASU 2023-09 requires a public business entity (“PBE”) to disclose, on an annual basis, specific categories in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 also requires all entities to disclose its income taxes paid, net of refunds received, disaggregated by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. For public business entities, the new standard is effective for annual periods beginning after December 15, 2024. This ASU was adopted in thefourth quarter of 2025, prospectively. The adoption of this ASU only impacted disclosures and didnot have a material impact on the Company's consolidated financial statements.

Acquisitions

Altamira Technologies Corporation

On January 14, 2026, the Company acquired a 100% ownership interest in Altamira Technologies Corporation ("ATC"), a privately owned company, for approximately $339 million in cash and up to an additional $45 million in the event an earn out EBITDA target is exceeded. The Company borrowed $330.0 million under the Revolving Credit Facility (as defined in "Note 10—Debt and Credit Facilities") to fund the acquisition. Headquartered in McLean, Virginia, ATC enhances Parsons’ defense and intelligence portfolio by delivering advanced analytics, signals intelligence (SIGINT), cyber, missile warning, and space capabilities, complementing the Company’s strengths in all‑domain technology integration and Indo‑Pacific operations, and expanding with intelligence community (IC) customers. In connection with this acquisition, the Company recognized $5 million of acquisition-related expenses in “Selling, general and administrative expense” in the consolidated statements of income for the nine months ended September 30, 2026, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition. No acquisition-related expenses were recognized for the three months ended September 30, 2026.

The Company agreed to pay the selling shareholders up to an additional $45 million in the event an earn out EBITDA target is exceeded during the fiscal year ended December 31, 2026. In the event that the 2026 EBITDA is less than target, the earn out payment shall bezero. The fair value of the earn out (contingent consideration in the table below) was calculated using a Black-Scholes model. See "Note 16—Fair Value" for further information on how the fair value of contingent consideration is determined.

The estimated fair value of the ATC contingent consideration as of September 30, 2026 is $14.2 million, a $13.3 million and $2.8 million increase from the quarter ended June 30, 2026 and acquisition date, respectively. The change in the estimated fair value was recorded to "selling, general and administrative expenses" in the consolidated financial statements.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed based on the purchase price allocation as of the date of acquisition (in thousands):

Amortization expense of $6.0 million and $18.1 million related to these intangible assets was recorded for the threeand nine months ended September 30, 2026, respectively. The entire value of goodwill was assigned to the Federal Solutions reporting unit and represents synergies expected to be realized from this business combination. $2.2 million of goodwill is deductible for tax purposes.

The amount of revenue generated by ATC and included within consolidated revenue is $53.6 million and $143.8 million for the three andnine months ended September 30, 2026, respectively. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of general corporate functions upon acquisition.

The Company is still in the process of finalizing its valuation of the assets and liabilities acquired.

Supplemental information of unaudited pro forma operating results assuming the ATC acquisition had been consummated as of the beginning of fiscal year 2025 (in thousands) is as follows:

The unaudited pro forma supplemental information is based on estimates and assumptions which the Company believes are reasonable and reflects the pro forma impact of additional amortization related to the fair value of acquired intangible assets, the pro forma impact of interest expense on acquired debt, and the pro forma impact of reflecting acquisition costs, which consisted of legal, advisory and due diligence fees and expenses which are reflected in the earliest period presented. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been consummated during the periods for which pro forma information is presented.

Applied Sciences Consulting, Inc.

On October 1, 2025, the Company acquired a 100% ownership interest in Applied Sciences Consulting, Inc. ("ASC"), a privately owned company, for $28.2 million from cash on hand. ASC specializes in water and stormwater solutions for cities, counties, and water management districts across the state of Florida. ASC enhances our ability to partner with Florida communities on delivering innovative solutions for their resiliency challenges, while expanding those capabilities to new and existing clients around the world. In connection with this acquisition, the Company recognized $0.5 million of acquisition-related expenses in “Selling, general and administrative expense” in the consolidated statements of income for the year ended December 31, 2025, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition.

Amortization expense of $0.4 million and $1.2 million related to these intangible assets was recorded for the three and nine months ended September 30, 2026, respectively. The entire value of goodwill was assigned to the Critical Infrastructure reporting unit and represents synergies expected to be realized from this business combination. The entire value of goodwill is deductible for tax purposes.

The amount of revenue generated by ASC and included within consolidated revenue is $2.7 million and $8.4 million for the three andnine months ended September 30, 2026, respectively. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of general corporate functions upon acquisition.

Supplemental information of unaudited pro forma operating results assuming the ASC acquisition had been consummated as of the beginning of fiscal year 2024 (in thousands) is as follows:

The unaudited pro forma supplemental information is based on estimates and assumptions which the Company believes are reasonable and reflects the pro forma impact of additional amortization related to the fair value of acquired intangible assets, and the pro forma impact of reflecting acquisition costs, which consisted of legal, advisory and due diligence fees and expenses which are reflected in the earliest period presented. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been consummated during the periods for which pro forma information is presented.

Chesapeake Technology International, Corp

On June 30, 2025, the Company acquired a 100% ownership interest in Chesapeake Technology International, Corp ("CTI"), a privately owned company, for $91.5 million from cash on hand. CTI brings extensive capabilities as an all-domain technology solutions provider, powered by cutting-edge products that enhance the warfighters’ ability to sense, evaluate and deliver effects within the invisible battlespaces. CTI enhances our mission-ready solutions for the Department of War. In connection with this acquisition, the Company recognized $2.2 million of acquisition-related expenses in “Selling, general and administrative expense” in the consolidated statements of income for the year ended December 31, 2025, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition.

Amortization expense of $1.2 million and $3.9 million related to these intangible assets was recordedfor the three and nine months ended September 30, 2026, respectivelyand $1.4 million for the three and nine months ended September 30, 2025. The entire value of goodwill was assigned to the Federal Solutions reporting unit and represents synergies expected to be realized from this business combination. $8.8 million of goodwill is deductible for tax purposes.

The amount of revenue generated by CTI and included within consolidated revenue is $19.2 million for the three and nine months ended September 30, 2025. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of general corporate functions upon acquisition.

Supplemental information of unaudited pro forma operating results assuming the CTI acquisition had been consummated as of the beginning of fiscal year 2024 (in thousands) is as follows:

The unaudited pro forma supplemental information is based on estimates and assumptions which the Company believes are reasonable and reflects the pro forma impact of additional amortization related to the fair value of acquired intangible assets, and the pro forma impact of reflecting acquisition costs, which consisted of legal, advisory and due diligence fees and expenses which are reflected in the earliest period presented. This supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been consummated during the periods for which pro forma information is presented.

TRS Group, Inc.

On January 31, 2025, the Company acquired a 100% ownership interest in TRS Group, Inc. ("TRS"), a privately owned company, for $36.6 million from cash on hand (of which $3.8 million was paid in July 2026). TRS is an environmental solutions firm that specializes in remediation technology. In connection with this acquisition, the Company recognized $0.5 millionof acquisition-related expenses in “Selling, general and administrative expense” in the consolidated statements of income for the year ended December 31, 2025, including legal fees, consulting fees, and other miscellaneous direct expenses associated with the acquisition.

The following table summarizes the acquisition date fair value of the purchase consideration transferred (inthousands):

Amortization expense of $0.4 million and $1.1 million related to these intangible assets was recorded for the three and nine months ended September 30, 2026, respectively and $0.4 million and $1.1 million for the three and nine months ended September 30, 2025, respectively. The entire value of goodwill was assigned to the Critical Infrastructure reporting unit and represents synergies expected to be realized from this business combination. The entire value of goodwill is deductible for tax purposes.

The amount of revenue generated by TRS and included within consolidated revenue is $7.6 million and $19.0 million for the three and nine months ended September 30, 2025, respectively. The Company has determined that the presentation of net income from the date of acquisition is impracticable due to the integration of general corporate functions upon acquisition.

Supplemental information of unaudited pro forma operating results assuming the TRS acquisition had been consummated as of the beginning of fiscal year 2024 (in thousands) is as follows:

Theunaudited pro forma supplemental information is based on estimates and assumptions which the Company believes are reasonable and reflects the pro forma impact of additional amortization related to the fair value of acquired intangible assets, and the pro forma impact of reflecting acquisition costs, which consisted of legal, advisory and due diligence fees and expenses which are reflected in the earliest period presented. This supplemental pro forma information hasbeen prepared for comparative purposes and does not purport to be indicative of what would have occurred had the acquisition been consummated during the periods for which pro forma information is presented.

Contracts with Customers

Disaggregation of Revenue

The Company’s contracts contain both fixed-price and cost reimbursable components. Contract types are based on the component that represents the majority of the contract. The following table presents revenue disaggreg ated by contract type (in thousands):

See “Note 18 – Segments Information” for the Company’s revenues by each of our segments.

Contract Assets and Contract Liabilities

Contract assets and contract liabilities balances at September 30, 2026 and December 31, 2025 were as follows (in thousands):

(1)

Contract assets includes $18.6 million and $0.0 million of assets held for sale as of September 30, 2026 and December 31, 2025, respectively, and is reported in assets held for sale on the consolidated balance sheets. Refer to contracts held for sale section below.

(2)

Contract liabilities includes $57.4 million and $0.0 million of liabilities held for sale as of September 30, 2026 and December 31, 2025, respectively, and is reported in liabilities held for sale on the consolidated balance sheets. Refer to contracts held for sale section below.

(3)

Total contract retentions included in net contract assets (liabilities) were$110.2 million as of September 30, 2026, of which$53.5 million are not expected to be paid in the next 12 months. Total contract retentions included in net contract assets (liabilities) were$114.6 million as of December 31, 2025. Contract assets as of September 30, 2026 and December 31, 2025 include$58.9 million and$58.9 million, respectively, related tonet claim recoveries. For the three and nine months ended September 30, 2026 and September 30, 2025, there were no material losses recognized related to the collectability of claims, unapproved change orders, and requests for equitable adjustment.

During the three months ended September 30, 2026 and September 30, 2025, the Company recognized revenue of$14.1 million and$12.9 million, respectively and$185.0 million and$178.1 million during the nine months ended September 30, 2026 and September 30, 2025, respectively, that was included in the corresponding contract liability balances at December 31, 2025 and December 31, 2024, respectively.

Certain changes in contract assets and contract liabilities consisted of the following (in thousands):

During the three months ended September 30, 2026, there wasno significant write-down of contract assets. For the nine months ended September 30, 2026, the Company recognized a reduction to contract assets of $14.8 millionand anincrease to contract liabilities of $61.2 million due to two loss position contracts and related cumulative catch-up reductions to revenue. These contracts and related contract assets and liabilities are classified as held for sale as of September 30, 2026. Refer to the Contracts Held for Sale section below. There wasno significant write-down of contract assets recognized during the three and nine months ended September 30, 2025.

The following table presents revisions in estimates, such as changes in estimated claims or incentives, related to performance obligations partially satisfied in previous periods that individually had an impact of $5 million or more on revenue. In certain instances, revisions in estimates do not exceed the threshold in any particular quarter but exceed the threshold on a year-to-date basis (in thousands):

Contracts Held for Sale

During the second quarter of 2026 management committed to a plan to sell two Remote Programs within the Federal Solutions segment as part of its strategy to transfer the remaining contractual obligations to a third party. Management expects the sale and novation to be completed by the end of 2026. The assets and liabilities are classified as held for sale, reported at the lower of the carrying value or fair value less cost to sell and consist primarily of property and equipment, net of $2.4 million, contract assets of $18.6 million and contract liabilities of $57.4 million as of September 30, 2026. These balances are reported as assets held for sale and liabilities held for sale on the consolidated balance sheet.

Accounts Receivable, net

Accounts receivable, net consisted of the following as of September 30, 2026 and December 31, 2025 (in thousands):

Billed accounts receivable represents amounts billed to clients that have not been collected. Unbilled accounts receivable represents amounts where the Company has a present contractual right to bill but an invoice has not been issued to the customer at the period-end date. Receivables from contracts with the U.S. federal government and its agencies were 15% and 19% as of September 30, 2026 and December 31, 2025, respectively.

The allowance for doubtful accounts was determined based on consideration of trends in actual and forecasted credit quality of clients, including delinquency and payment history, type of client, such as a government agency or commercial sector client, and general economic conditions and particular industry conditions that may affect a client’s ability to pay.

Transaction Price Allocated to the Remaining Unsatisfied Performance Obligations

The Company’s remaining unsatisfied performance obligations (“RUPO”) as of September 30, 2026 represent a measure of the total dollar value of work to be performed on contracts awarded and in-progress. The Company had$7.6 billion in RUPO as of September 30, 2026.

RUPO will increase with awards of new contracts and decrease as the Company performs work and recognizes revenue on existing contracts. Projects are included within RUPO at such time the project is awarded and agreement on contract terms has been reached.

RUPO is comprised of: (a) original transaction price, (b) change orders for which written confirmations from our customers have been received, (c) pending change orders for which the Company expects to receive confirmations in the ordinary course of business, and (d) claim amounts that the Company has made against customers for which it has determined that it has a legal basis under existing contractual arrangements and a significant reversal of revenue is not probable, less revenue recognized to-date.

The Company expects to satisfy its RUPO as of September 30, 2026 over the following periods (in thousands):

Leases

The Company has operating and finance leases for corporate and project office spaces, vehicles, heavy machinery and office equipment. Our leases have remaining lease terms ofone year toeleven years, some of which may include options toextend the leases for up tofive years, and some of which may include options toterminate the leases after thethird year.

The components of lease costs for the three and nine months ended September 30, 2026 and September 30, 2025 are as follows (in thousands):

Supplemental cash flow information related to leases for the nine months ended September 30, 2026 and September 30, 2025 is as follows (in thousands):

Supplemental balance sheet and other information related to leases as of September 30, 2026 and December 31, 2025 are as follows (in thousands):

As of September 30, 2026, the Company hasno material leases that have not yet commenced.

A maturity analysis of the future undiscounted cash flows associated with the Company’s operating and finance lease liabilities as of September 30, 2026 is as follows (in thousands):

Goodwill

The following table summarizes the changes in the carrying value of goodwill by reporting segment from December 31, 2025 to September 30, 2026 (in thousands):

The Company performed a qualitative triggering analysis and determined there was no triggering event indicating a potential impairment to the carrying value of its goodwill at September 30, 2026 and concluded there hasnot been an impairment.

Intangible Assets

The gross amount and accumulated amortization of intangible assets with finite useful lives included in “Intangible assets, net” on the consolidated balance sheets are as follows (in thousands except for years):

The aggregate amortization expense of intangible assets for the three months ended September 30, 2026 and September 30, 2025 was $21.5 million and $18.0 million, respectively and for the nine months ended September 30, 2026 and September 30, 2025 was$69.0 million and$51.4 million, respectively.

Estimated amortization expense for the remainder of the current fiscal year and in each of the next four years and beyond is as follows (in thousands):

Property and Equipment, Net

Property and equipment consisted of the following at September 30, 2026 and December 31, 2025 (in thousands):

Depreciation expense for the three months ended September 30, 2026 and September 30, 2025 was$10.7 million and$9.5 million, respectively and for the nine months ended September 30, 2026 and September 30, 2025 was$31.5 million and$28.1 million, respectively.

Debt and Credit Facilities

Debt consisted of the following (in thousands):

In June 2025, the Company terminated its $350 million Delayed Draw Term Loan due 2025 and its $650 million Revolving Credit Facility due 2026 and replaced these revolving credit facilities with a $450 million Term Loan due 2028 and a $750 million Revolving Credit Facility due 2030. Proceeds from the Term Loan were used to pay off the outstanding balance of the Delayed Draw Term Loan.

Term Loan due 2028

In June 2025, the Company entered into a $450 million unsecured Term Loan with an increase option of up to $150 million. The Term Loan has athree-year maturity and permits the Company to borrow in U.S. dollars. Proceeds of the Term Loan Agreement may be used (a) to pay off in full, or partially pay off, the Company’s existing Convertible Senior Notes, (b) to prepay revolving loans outstanding under the Revolving Credit Facility (as defined below), or (c) for working capital, capital expenditures and other lawful corporate purposes. The Company incurred $0.9 million of debt issuance costs in connection with the Term Loan. These costs are presented as a direct deduction from long-term debt on the face of the balance sheet. Interest expense related to the Term Loan for the three and nine months ended September 30, 2026 was $5.7 million and $16.8 million, respectively, and $6.4 million and $8.1 million for the three and nine months ended September 30, 2025, respectively. Included in these amounts were amortization of debt fees of $0.1 million and $0.2 million for the three and nine months ended September 30, 2026, respectively, and $0.1 million for the three and nine months ended September 30, 2025. The amortization of debt issuance costs and interest expense is recorded in “Interest expense” on the consolidated statements of income. As of September 30, 2026 and December 31, 2025, the net carrying value of the Term Loan was $449.5 million and $449.3 million, respectively.

The Term Loan does not require any amortization payments by the Company. Depending on the Company’s consolidated leverage ratio (or debt rating after such time as the Company has such rating), borrowings under the Term Loan Agreement bear interest at either an adjusted Term SOFR benchmark rate plus a margin between 0.875% and 1.500% or a base rate plus a margin of between 0% and 0.500% and initially bore interest at the middle of this range. Amounts outstanding under the Term Loan Agreement may be prepaid at the option of the Company without premium or penalty, subject to customary breakage fees in connection with the prepayment of benchmark rate loans. The rates on September 30, 2026 and December 31, 2025 were 5.2% and 4.8%, respectively.

Delayed Draw Term Loan (Terminated June 2025)

In September 2022, the Company entered into a $350 million unsecured Delayed Draw Term Loan with an increase option of up to $150 million (the “2022 Delayed Draw Term Loan”). Proceeds of the 2022 Delayed Draw Term Loan Agreement may be used (a) to pay off in full, or partially pay off, the Company’s existing Senior Notes, (b) to prepay revolving loans outstanding under the Revolving Credit Facility (as defined below), or (c) for working capital, capital expenditures and other lawful corporate purposes. The Company incurred $0.9 million of debt issuance costs in connection with the delayed draw term loan. These costs are presented as a direct deduction from long-term debt on the face of the balance sheet. Interest expense related to the Delayed Draw Term Loan for the three and nine months ended September 30, 2025 were $0.0 million and $8.2 million, respectively. Included in these amounts were amortization of debt fees of $0.0 million and $0.1 million for the three and nine months ended September 30, 2025, respectively. The amortization of debt issuance costs and interest expense is recorded in “Interest expense” on the consolidated statements of income.

Convertible Senior Notes due 2025

In August 2020, the Company issued an aggregate $400.0 million of 0.25% Convertible Senior Notes due 2025, including the exercise of a $50.0 million initial purchasers’ option. The Company received proceeds from the issuance and sale of the Convertible Senior Notes of $389.7 million, net of $10.3 million of transaction fees and other third-party offering expenses. The Convertible Senior Notes accrued interest at a rate of 0.25% per annum, payable semi-annually on February 15 and August 15 of each year beginning on February 15, 2021. The Convertible Senior Notes due 2025 matured August 15, 2025.

The Company recognized interest expense of $0.04 million and $0.2 million for the three and nine months ended September 30, 2025.

Convertible Senior Notes due 2029

In February 2024, the Company issued an aggregate $800.0 million of 2.625% Convertible Senior Notes due 2029 (the “2029 Convertible Notes”), including the exercise of a $100.0 million initial purchasers’ option in full. The Company received proceeds from the issuance and sale of the 2029 Convertible Notes of $781.1 million, net of $18.9 million of transaction fees and other third-party offering expenses. The 2029 Convertible Notes accrue interest at a rate of 2.625%per annum, payable semi-annually on March 1 and September 1 of each year beginning on September 1, 2024, and will mature on March 1, 2029, unless earlier repurchased, redeemed or converted.

The 2029 Convertible Notes are the Company’s senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the 2029 Convertible Notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness, including borrowings under the Company’s Revolving Credit Facility and Term Loan, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.

Each $1,000 of principal of the 2029 Convertible Notes will initially be convertible into 10.6256 shares of our common stock, which is equivalent to an initial conversion price of approximately $94.11 per share, subject to adjustment upon the occurrence of specified events. On or after October 1, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date of the 2029 Convertible Notes, holders may convert all or a portion of their 2029 Convertible Notes, regardless of the conditions below.

Prior to the close of business on the business day immediately preceding October 1, 2028, the 2029 Convertible Notes will be convertible at the option of the holders thereof only under the following circumstances:

•

during any calendar quarter commencing after the calendar quarter ending on June 30, 2024, if the last reported sale price of the Company’s common stock for at least 20 trading days, whether or not consecutive, during a period of 30 consecutive trading days ending on, and including the last trading day of the immediately preceding calendar quarter, is greater than or equal to 130% of the conversion price on each applicable trading day;

•

during thefive business day period after anyten consecutive trading day period in which, for each trading day of that period, the trading price per $1,000 principal amount of 2029 Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;

•

if the Company calls such 2029 Convertible Notes for redemption; or

•

upon the occurrence of specified corporate events described in the Indenture.

The Company may redeem all or any portion of the 2029 Convertible Notes for cash, at its option, on or after March 8, 2027 and before the 51 st scheduled trading day immediately before the maturity date at a redemption price equal to 100% of the principal amount of the 2029 Convertible Notes to be redeemed, plus accrued and unpaid interest, but only if the last reported sale price per share of the Company’s common stock exceeds 130%of the conversion price for a specified period of time. In addition, calling any 2029 Convertible Notes for redemption will constitute a Make-Whole Fundamental Change with respect to that 2029 Convertible Note, in which case the conversion rate applicable to the conversionof that 2029 Convertible Notes will be increased in certain circumstances if it is converted after it is called for redemption.

Upon the occurrence of a Make-Whole Fundamental Change prior to the maturity date of the 2029 Convertible Notes, holders of the 2029 Convertible Notes may require the Company to repurchase all or a portion of the 2029 Convertible Notes for cash at a price equal to 100% of the principal amount of the 2029 Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Upon conversion, the Company will settle the principal amount of the 2029 Convertible Notes converted in cash and will settle the remainder of the consideration owed upon conversion in cash, shares of the Company’s common stock, or a combination thereof, at the Company’s option, with such amount of cash and, if applicable, shares of common stock due upon conversion based on a daily conversion value calculated on a proportionate basis for each trading day in a 50-trading day observation period.

The Company recognized interest expense with respect to the Convertible Senior Notes Due 2029 of $6.3 million for the three months ended September 30, 2026 and September 30, 2025 and $18.9 million for the nine months ended September 30, 2026 and September 30, 2025. Included in these amounts were amortization of debt fees of $1.0 million for the three months ended September 30, 2026 and September 30, 2025 and $3.1 million for the nine months ended September 30, 2026 and September 30, 2025. As of September 30, 2026 and December 31, 2025, the net carrying value of the Convertible Senior Notes Due 2029 were $791.6 million and $788.5 million, respectively.

Capped Call Transactions - Convertible Senior Notes due 2029

In February 2024, in connection with the offering of the 2029 Convertible Notes, the Company entered into capped call transactions (the “Capped Call Transactions”) with certain financial institutions. The Capped Call Transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the Convertible Senior Notes due 2029 and/or offset any cash payments the Company is required to make in excess of the principal amount of any converted Convertible Senior Notes due 2029, as the case may be. If, however, the market price per share of the Company’s common stock, as measured under the terms of the Capped Call Transactions, exceeds the cap price of the Capped Call Transactions, there would nevertheless be dilution and/or there would not be an offset of such cash payments, in each case, to the extent that such market price exceeds the cap price of the Capped Call Transactions.

The cap price of the Capped Call Transactions is initially $131.7575 per share, which represents a premium of 75% over the last reported sale price of the Company’s common stock of $75.29 per share on the New York Stock Exchange on February 21, 2024, and is subject to certain adjustments under the terms of the Capped Call Transactions. The cost of $88.4 million for the Capped Call Transactions was recorded as a reduction to additional paid-in capital in the consolidated balance sheets.

At issuance, the Company recorded a deferred tax asset of $22.3 million related to the Capped Call Transactions costs through additional paid-in capital. The deferred tax asset was included in Deferred tax assets in the consolidated balance sheets.

Revolving Credit Facility due 2030

In June 2025, the Company entered into a $750 million unsecured revolving credit facility (the “Revolving Credit Facility”). The Company incurred $1.7 million of costs in connection with this Revolving Credit Facility. The 2025 Revolving Credit Facility replaced an existing Revolving Credit Facility dated as of June 25, 2021. Under the new agreement, the Company’s revolving credit facility was increased from $650 million to $750 million. The revolving credit facility has afive-year maturity, which may be extended up totwo times for periods determined by the Company and the applicable extending lenders, and permits the Company to borrow in U.S. dollars, certain specified foreign currencies, and each other currency that may be approved in accordance with the 2025 Facility. The borrowings under the Revolving Credit Facility bear interest at either the Term SOFR rate plus a margin between 1.0% and 1.625% or a base rate (as defined in the Revolving Credit Facility) plus a margin of between 0% and 0.625%. The rates on September 30, 2026 and December 31, 2025 were 5.3% and 5.0%, respectively. Letters of credit commitments outstanding under this agreement aggregated to$40.9 million at September 30, 2026 which reduced borrowing limits available to the Company.

Interest expenses related to the Revolving Credit Facilities (due 2030 and due 2026) were $3.8 million and $0.1 million for the three months ended September 30, 2026 and September 30, 2025, respectively and were $11.5 millionand

$0.6 million for the nine months ended September 30, 2026 and September 30, 2025, respectively. Included in these amounts were amortization of debt fees of $0.1 million for the three months ended September 30, 2026 and September 30, 2025 and $0.3 million for the nine months ended September 30, 2026 and September 30, 2025. The net carrying value of the Revolving Credit Facility was $116.0 million as of September 30, 2026 and there wasno amount outstanding as of December 31, 2025.

The Revolving Credit Facility includes various covenants, including restrictions on indebtedness, liens, acquisitions, investments or dispositions, payment of dividends and maintenance of certain financial ratios and conditions. The Company was in compliance with these covenants at September 30, 2026.

Letters of Credit

The Company also has in place several secondary bank credit lines for issuing letters of credit, principally for foreign contracts, to support performance and completion guarantees. Letters of credit commitments outstanding under these bank lines aggregated approximately$335.5 million and$356.2 million at September 30, 2026 and December 31, 2025, respectively.

Income Taxes

The Company’s effective tax rate was 23.3% and 16.4% for the three months ended September 30, 2026 and September 30, 2025, respectively. The increase in the effective tax rate was due primarily to the increased valuation allowances against deferred tax assets related to foreign tax credit carryforwards (FTCs) and a decrease in the current three month period compared to the corresponding period last year in discrete tax benefits primarily resulting from the expiration of the statute of limitations and re-evaluation of tax positions related to certain unrecognized tax benefits, partially offset by a change in jurisdictional mix of earnings. The Company’s effective tax rate was 23.6% and 18.7% for the nine months ended September 30, 2026 and September 30, 2025, respectively. The change in effective tax rate was due primarily to increased valuation allowances against deferred tax assets related to foreign net operating loss carryforwards (NOLs) and FTCs and a decrease in the current nine month period compared to the corresponding period last year in discrete tax benefits primarily resulting from the expiration of the statute of limitations and re-evaluation of tax positions related to certain unrecognized tax benefits, partially offset by a change in jurisdictional mix of earnings.

The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21% for the three months ended September 30, 2026 primarily relates to state income taxes and increased valuation allowances, partially offset by decreases in uncertain tax positions, earnings subject to lower tax in foreign jurisdictions, untaxed income attributable to noncontrolling interests, and federal tax credits. The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21% for the nine months ended September 30, 2026 primarily relates to increased valuation allowances, state income taxes, and executive compensation subject to Section 162(m), partially offset by decreases in uncertain tax positions, earnings subject to lower tax in foreign jurisdictions, untaxed income attributable to noncontrolling interests, federal tax credits, and the windfall equity-based compensation deduction.

As of September 30, 2026, the Company’s deferred tax assets were subject to a valuation allowance of $60.4 million primarily related to foreign net operating loss carryforwards, foreign tax credit carryforwards, and capital losses that the Company has determined are not more-likely-than-not to be realized. The factors used to assess the likelihood of realization include: the past performance of the entities, forecasts of future taxable income, future reversals of existing taxable temporary differences, and available tax planning strategies that could be implemented to realize the deferred tax assets. The ability or failure to achieve the forecasted taxable income in these entities could affect the ultimate realization of deferred tax assets.

As of September 30, 2026 and December 31, 2025, the liability for income taxes associated with uncertain tax positions was $25.1 million and $32.4 million, respectively.

Although the Company believes its reserves for its tax positions are reasonable, the final outcome of tax audits could be materially different, both favorably and unfavorably.

Differentnon-US tax jurisdictions continue to enact legislation to adopt components of the Organization for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Pillar Two Model Rules. In September 2026, the OECD released a Pillar Two implementation package. The package supports the consistent implementation and application of the Global Minimum Tax, including a framework for the full legislative review process, updatesto the Global Anti-Base Erosion (GloBE) Information Return (GIR), and new guidance on the application of the GloBE Model Rules. The Company has evaluated the impact of the enacted legislation to date and has determined there is no material impact to the Company’s income tax provision. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending enactment of legislation by individual countries.

Contingencies

The Company is subject to certain lawsuits, claims and assessments that arise in the ordinary course of business. A liability is recorded when it is both probable that a loss has been incurred and the amount of loss or range of loss can be reasonably estimated. When using a range of loss estimate, the Company records the liability using the low end of the range unless some amount within the range of loss appears at that time to be a better estimate than any other amount in the range. The Company records a corresponding receivable for costs covered under its insurance policies. Management judgment is required to determine the outcome and the estimated amount of a loss related to such matters. Management believes that there areno claims or assessments outstanding which would materially affect the consolidated results of operations or the Company’s financial position.

In September 2015, a former Parsons employee filed an action in the United States District Court for the Northern District of Alabama against us as a qui tam relator on behalf of the United States (the “Relator”) alleging violation of the False Claims Act. The plaintiff alleges that, as a result of these actions, the United States paid in excess of $1 million per month between February and September 2006 that it should have paid to another contractor, plus $2.9 million to acquire vehicles for the contractor defendant to perform its security services. The lawsuit sought (i) that we cease and desist from violating the False Claims Act, (ii) monetary damages equal to three times the amount of damages that the United States has sustained because of our alleged violations, plus a civil penalty of not less than $5,500 and not more than $11,000 for each alleged violation of the False Claims Act, (iii) monetary damages equal to the maximum amount allowed pursuant to §3730(d) of the False Claims Act, and (iv) Relator’s costs for this action, including recovery of attorneys’ fees and costs incurred in the lawsuit. The United States government did not intervene in this matter as it is allowed to do so under the statute. The court heard dispositive motions in 2023, including Parsons’ motion for summary judgment. In March 2025, the court granted Parsons’ motion for summary judgment. The Relator has appealed this decision. Oral argument was held before the appellate court in May 2026 and in October 2026 the appellate court affirmed the lower court's grant of summary judgment. The Relator has requested anen banc review of the Appeal’s Court decision.

On July 1, 2024, a final judgment was filed with the clerk of the Superior Court of the State of California In and For the County of San Mateo with an award of damages in the total amount of approximately $102.5 million in favor of Parsons Transportation Group, Inc. ("PTG") and against Alstom Signaling Operations LLC ("Alstom"). This proposed award relates to a lawsuit Parsons initially filed against the Peninsula Corridor Joint Powers Board for breach of contract and wrongful termination in February 2017 (which was settled between Parsons and the Joint Powers Board in 2021) and a cross-complaint filed against Alstom Signaling Operations LLC in November 2017, as subsequently amended, for breach of contract, negligence and intentional misrepresentation. On September 23, 2024, the Court awarded PTG pre-judgment interest in the amount of $34.0 million and amended the judgment accordingly to include such interest. Alstom filed a Notice of Appeal and has posted a bond as required under California law. The appellate briefs have been filed and both parties have requested oral argument, which has been scheduled for November 20, 2026. In the interim, Parsons and Alstom are exploring opportunities for resolution. At this time, the Company is unable to determine the outcome of the Alstom litigation.

Additionally, the Company has been named as a defendant in lawsuits alleging personal injuries as a result of contact with asbestos products at various project sites. Management believes that any significant costs relating to these claims will be reimbursed by applicable insurance and, although there can be no assurance that these matters will be resolved favorably, management believes that the ultimate resolution of any of these claims will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

Federal government contracts are subject to audits, which are performed for the most part by the Defense Contract Audit Agency (“DCAA”). Audits by the DCAA and other agencies consist of reviews of our overhead rates, operating systems and cost proposals to ensure that we account for such costs in accordance with the Federal Acquisition Regulations (“FAR”). If the DCAA determines we have not accounted for such costs in accordance with the FAR, the DCAA may disallow these costs. The disallowance of such costs may result in a reduction of revenue and additional liability for the Company. Historically, the Company has not experienced any material disallowed costs as a result of government audits. However, the Company can provide no assurance that the DCAA or other government audits will not result in material disallowances for incurred costs in the future. All audits of costs incurred on work performed through 2024 have been closed, and years thereafter remain open.

Although there can be no assurance that these matters will be resolved favorably, management believes that their ultimate resolution will not have a material adverse impact on the Company’s consolidated financial position, results of operations, or cash flows.

Retirement Benefit Plan

The Company’s principal retirement benefit plan is the Parsons Employee Stock Ownership Plan (“ESOP”), a stock bonus plan, established in 1975 to cover eligible employees of the Company and certain affiliated companies. Contributions of treasury stock to the ESOP are made annually in amounts determined by the Company’s board of directors and are held in trust for the sole benefit of the participants. Shares allocated to a participant’s account are fully vested after three years of credited service, or in the event(s) of reaching age 65, death or disability while an active employee of the Company. As of September 30, 2026 and December 31, 2025, total shares of the Company’s common stock outstanding were 105,531,047 and 106,968,082, respectively, of which 48,528,639 and 50,864,117, respectively, were held by the ESOP.

A participant’s interest in their ESOP account is redeemable upon certain events, including retirement, death, termination due to permanent disability, a severe financial hardship following termination of employment, certain conflicts of interest following termination of employment, or the exercise of diversification rights. Distributions from the ESOP of participants’ interests are made in the Company’s common stock based on quoted prices of a share of the Company’s common stock on the NYSE. A participant will be able to sell such shares of common stock in the market, subject to any requirements of the federal securities laws.

Total ESOP contribution expense was$20.7 million and$18.6 million for the three months ended September 30, 2026 and September 30, 2025, respectively and$59.8 million and$54.0 million for the nine months ended September 30, 2026 and September 30, 2025, respectively. The expense is recorded in “Direct costs of contracts” and “Selling, general and administrative expense” in the consolidated statements of income. The fiscal 2026 ESOP contribution has not yet been made. The amount is currently included in accrued liabilities.

Investments in and Advances to Joint Ventures

The Company participates in joint ventures to bid, negotiate and complete specific projects. The Company is required to consolidate these joint ventures if it holds the majority voting interest or if the Company meets the criteria under the consolidation model, as described below.

The Company performs an analysis to determine whether its variable interests give the Company a controlling financial interest in a Variable Interest Entity (“VIE”) for which the Company is the primary beneficiary and should, therefore, be consolidated. Such analysis requires the Company to assess whether it has the power to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

The Company analyzed all of its joint ventures and classified them into two groups: (1) joint ventures that must be consolidated because they are either not VIEs and the Company holds the majority voting interest, or because they are VIEs and the Company is the primary beneficiary; and (2) joint ventures that do not need to be consolidated because they are either not VIEs and the Company holds a minority voting interest, or because they are VIEs and the Company is not the primary beneficiary.

Many of the Company’s joint venture agreements provide for capital calls to fund operations, as necessary; however, such funding is infrequent and is not anticipated to be material.

Letters of credit outstanding described in “Note 10 – Debt and Credit Facilities” that relate to project joint ventures are $166.1 million and$184.4 million at September 30, 2026 and December 31, 2025, respectively.

In the table below, aggregated financial information relating to the Company’s joint ventures is provided because their nature, risk and reward characteristics are similar. None of the Company’s current joint ventures that meet the characteristics of a VIE are individually significant to the consolidated financial statements.

Consolidated Joint Ventures

The following represents financial information for consolidated joint ventures included in the consolidated financial statements (in thousands):

The assets of the consolidated joint ventures are restricted for use only by the particular joint venture and are not available for the Company’s general operations. The liabilities of the consolidated joint ventures are obligations of the respective joint ventures, and creditors of these joint ventures do not have recourse to the general credit of the Company.

Unconsolidated Joint Ventures

The Company accounts for its unconsolidated joint ventures using the equity method of accounting. Under this method, the Company recognizes its proportionate share of the net earnings of these joint ventures as “Equity in (losses) earnings of unconsolidated joint ventures” in the consolidated statements of income. The Company’s maximum exposure to loss as a result of its investments in unconsolidated joint ventures is typically limited to the aggregate of the carrying value of the investment and future funding commitments.

The following represents the financial information of the Company’s unconsolidated joint ventures as presented in their unaudited financial statements (in thousands):

The Company had net contributions to its unconsolidated joint ventures of$14.3 million and$0.2 million for the three months ended September 30, 2026 and September 30, 2025, respectively and$50.5 million and$7.5 million for the nine months ended September 30, 2026 and September 30, 2025, respectively.

The following table presents certain financial statement impacts from changes in estimates on an unconsolidated joint venture in the Critical Infrastructure segment, driven by increases in costs to complete. In certain instances, revisions in estimates on unconsolidated joint ventures do not exceed the threshold in any particular quarter but exceed the threshold on a year-to-date basis (in thousands):

Related Party Transactions

The Company often provides services to unconsolidated joint ventures and revenues include amounts related to recovering costs for these services. Revenues related to services the Company provided to unconsolidated joint ventures for the three months ended September 30, 2026 and September 30, 2025 were$44.8 million and$56.9 million, respectively and for the nine months ended September 30, 2026 and September 30, 2025 were$141.1 million and$144.3 million, respectively.

For the three months ended September 30, 2026 and September 30, 2025, the Company incurred reimbursable costs of$33.5 million and$36.4 million, respectively and for the nine months ended September 30, 2026 and September 30, 2025 were$100.8 million and$104.2 million, respectively.

Amounts included in the consolidated balance sheets related to services the Company provided to unconsolidated joint ventures are as follows (in thousands):

Fair Value of Financial Instruments

The authoritative guidance on fair value measurement defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an “exit price”). At September 30, 2026 and December 31, 2025, the Company’s financial instruments include cash, cash equivalents, accounts receivable, accounts payable, and other liabilities. The fair values of these financial instruments approximate their carrying values due to their short-term maturities.

Fair value is determined by using one or more of the following valuation techniques:

•

Market approach—Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities;

•

Cost approach—Amount that would be required to replace the service capacity of an asset (i.e., replacement cost); and

•

Income approach—Techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing models and lattice models).

In addition, the guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are:

Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities;

Level 2 Pricing inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument; and

Level 3 Prices or valuations that require inputs that are both significant to the fair value measurements and unobservable.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

Financial assets and liabilities measured at fair value on a quarterly basis are as follows:

Fair value as of September 30, 2026 (in thousands):

The carrying values and estimated fair values of our financial instruments that are not required to be recorded at fair value in our consolidated balance sheets, on the basis of Level 2 inputs, were as follows (in thousands):

Earnings Per Share

Basic earnings per share (“EPS”) is computed using the weighted average number of shares outstanding during the period and income available to shareholders. Diluted EPS includes additional common shares that would have been outstanding if potential common shares with a dilutive effect had been issued using the if-converted method for Convertible Debt and the treasury stock method for all other instruments.

Under the treasury stock method, the weighted average number of shares outstanding is adjusted to reflect the dilutive effects of stock-based awards.

Under the if-converted method:

Convertible Senior Notes due 2025:

a.

Income available to shareholders is adjusted to add back interest expense, after tax (unless antidilutive).

b.

Weighted average number of shares outstanding is adjusted to include the shares underlying the convertible debt (unless antidilutive).

c.

Shares underlying the bond hedge (unless antidilutive).

d.

Shares underlying the warrants (unless antidilutive).

Convertible Senior Notes due 2029:

a.

No shares have been included in the denominator of diluted EPS. The principal amount of convertible debt will be settled in cash with any excess conversion value settled in cash or shares of common stock.

b.

Excludes shares underlying the capped call as the shares are antidilutive.

The following tables reconcile the denominator and numerator used to compute basic EPS to the denominator and numerator used to compute diluted EPS for the three and nine months ended September 30, 2026 and September 30, 2025 (in thousands):

Anti-dilutive stock-based awards excluded from the calculation of earnings per share for the three months ended September 30, 2026 and September 30, 2025 were 76,503 and 2,521, respectively and for the nine months ended September 30, 2026 and September 30, 2025 were 49,211 and 13,248, respectively.

Share Repurchases

On August 9, 2021, the Company’s Board of Directors authorized the Company to acquire a number of shares of common stock having an aggregate market value of not greater than $100 million from time to time, commencing on August 12, 2021. The Board further amended this authorization in August 2022 to remove the prior expiration date and grant executive leadership the discretion to determine the price for such share repurchases. The Board further amended this authorization in March 2025 to increase and reset the repurchase capacity to $250 million. Repurchases made by the Company during the first quarter of 2025 were deducted from the reset capacity. In July 2026, the Board further amended this authorization to increase the repurchase capacity by an additional $250 million.

Under prior authorizations, the Company had repurchased shares with an aggregate market value of $79.7 million. The aggregate market value of shares of common stock the Company is authorized to acquire from prior authorizations, the March 2025 authorization, and July 2026 authorization as of September 30, 2026 was not greater than $579.7 million.

As of September 30, 2026, the Company has spent$314.7 million (which includes commissions paid of $0.1 million) repurchasing 5,709,204 shares of common stock at an average price of$55.12 per share.

Repurchased shares of common stock are retired and included in “Repurchases of common stock” in cash flows from financing activities in the Consolidated Statements of Cash Flows. The primary purpose of the Company’s share repurchase program is to reduce the dilutive effect of shares issued under the Company’s ESOP and other stock benefit plans. The timing, amount and manner of share repurchases may depend upon market conditions and economic circumstances, availability of investment opportunities, the availability and costs of financing, the market price of the Company's common stock, other uses of capital and other factors.

The following table summarizes the repurchase activity under the stock repurchase program:

(1)Includes commissions in the calculation of average price per share

Segment Information

The Company operates intwo reportable segments: Federal Solutions and Critical Infrastructure.

The Federal Solutions segment provides advanced technical solutions to the U.S. government, delivering timely, cost-effective hardware, software and solutions for mission-critical projects. The segment provides advanced technologies, supporting national security missions in cyber operations, missile defense, space, electronic warfare and facility modernization, hazardous material remediation, and engineering services.

The Critical Infrastructure segment provides integrated engineering and management services for complex physical and digital infrastructure around the globe. The Critical Infrastructure segment is a technology innovator focused on next generation digital systems and complex structures. Industry leading capabilities in engineering design and project management allow the Company to deliver significant value to customers by employing cutting-edge technologies, improving timelines and reducing costs.

The Company defines its reportable segments based on the way the chief operating decision maker (“CODM”), its Chief Executive Officer, evaluates the performance of each segment and manages the operations of the Company for purposes of allocating resources among the segments. The CODM evaluates segment operating performance using segment Revenue, segment direct cost of contracts, segment Selling, General and Administrative expense and segment Adjusted EBITDA attributable to Parsons Corporation.

The Company defines Adjusted EBITDA attributable to Parsons Corporation as Adjusted EBITDA excluding Adjusted EBITDA attributable to noncontrolling interests. The Company defines Adjusted EBITDA as net income (loss) attributable to Parsons Corporation, adjusted to include net income (loss) attributable to noncontrolling interests and to exclude interest expense (net of interest income), provision for income taxes, depreciation and amortization and certain other items that are not considered in the evaluation of ongoing operating performance. These other items include net income (loss) attributable to noncontrolling interests, asset impairment charges, income and expense recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs and expenses related to our prior restructuring.

Adjusted EBITDA is the measure of our operating performance used by the CODM to assess our segments’ financial performance. The CODM uses Adjusted EBITDA for business planning purposes, including to manage our segments against internal projected results of operations and measure the performance of our segments generally.

The following tables present segment information provided to the CODM, as of each period presented, along with a reconciliation of segment adjusted EBITDA attributable to Parsons Corporation to net income attributable to Parsons Corporation for the periods presented (in thousands):

(a)

The amount of selling, general and administrative expenses (“SG&A”) is total SG&A excluding allocations.

(b)

The amount of other segment items is the difference between segment revenue less direct cost of contracts, segment SG&A expenses, equity in earnings (losses) of unconsolidated joint ventures, and Adjusted EBITDA attributable to Parsons Corporation. Other segment items primarily include:

i.

Corporate and shared segment SG&A (excluding Adjusted EBITDA items)

ii.

Noncontrolling interests attributable to operating income and other income/expense

iii.

Bad debt expense

iv.

Sublease income

v.

Foreign currency gain/loss, and

vi.

Certain other income/expense items

(c)

Reflects costs incurred in connection with acquisitions, and other non-recurring transaction costs, primarily fees paid for professional services and employee retention.

(d)

Includes a combination of gain/loss related to sale of businesses and sale of fixed assets, software implementation costs, and other individually insignificant items that are non-recurring in nature.

(e)

Reflects costs associated with and related to our corporate restructuring in initiatives.

Asset information by segment is not a key measure of performance used by the CODM.

The following tables present revenues and property and equipment, net by geographic area (in thousands):

The geographic location of revenue is determined by the location of the customer.

North America includes revenue in the United States for the three months ended September 30, 2026 and September 30, 2025 of $1.2 billion and $1.2 billion, respectively and $3.5 billion and $3.5 billion for the nine months ended September 30, 2026 and September 30, 2025, respectively. North America property and equipment, net includes $148.6 million and $130.5 million of property and equipment, net in the United States as of September 30, 2026 and December 31, 2025, respectively.

The following table presents revenues by business units (in thousands):

Sale of Receivables

During the quarter ended September 30, 2026, the Company entered into a Master Receivables Purchase Agreement ("MRPA Facility") with JPMorgan Chase Bank, N.A. (the "Purchaser") for the sale of up to $65 million of certain designated eligible trade receivables with the U.S. government. The trade receivables sold under the MRPA Facility are without recourse for any U.S. government credit risk. The MRPA Facility is uncommitted and expires in September of 2027. The purchase price for any trade receivable sold under the MRPA Facility is the trade receivable balance minus a purchase discount fee.

Trade receivables sold under the MRPA Facility have been recognized as sales, as the trade receivables had been legally isolated from the Company, the Purchaser had a right to pledge or exchange the assets received and, although Company generally remains the servicer for sold trade receivables, we do not maintain effective control over the transferred receivables. The fair value of the sold trade receivables approximated their book value due to their short-term nature.

The cash received from trade receivables sold under the MRPA Facility, all of which remains outstanding as of the three and nine months ended September 30, 2026, was $19.6 million. The Company does not retain an ongoing financial interest in the sold trade receivables other than cash collection and administrative servicing. The Company estimated that its servicing fee was at fair value and therefore hasnot recognized a servicing asset or liability as of September 30, 2026.

For the three and nine months ended September 30, 2026, the Company incurred purchase discount fees of $0.1 million, which are presented in "Selling, general and administrative expense" on the consolidated statements of income.

Subsequent Events

None.