UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)


☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission File Number 001-07782

PARSONS CORPORATION

(Exact name of Registrant as Specified in Its Charter)


Delaware		95-3232481
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
14291 Park Meadow Drive, Suite 100 Chantilly, VA		20151
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (703) 988-8500

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Common Stock, $1 par value

     PSN

     New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock on The New York Stock Exchange on June 30, ~~2024~~2025, was $87.7 billion.

The number of shares of Registrant’s Common Stock outstanding as of February 113, ~~2025~~2026 was ~~106~~105,~~777~~831,~~126~~019

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Parsons’ ~~2025~~2026 Proxy Statement are incorporated by reference into Part III of this Annual Report on Form 10-K.

Table of Contents

		Page
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	2223
Item 1B.	Unresolved Staff Comments	5150
Item 1C.	Cybersecurity	51
Item 2.	Properties	52
Item 3.	Legal Proceedings	52
Item 4.	Mine Safety Disclosures	53
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	54
Item 6.	Reserved	56
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	57
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	82
Item 8.	Financial Statements and Supplementary Data	82
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	82
Item 9A.	Controls and Procedures	82
Item 9B.	Other Information	83
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	83
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	84
Item 11.	Executive Compensation	84
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	84
Item 13.	Certain Relationships and Related Transactions, and Director Independence	84
Item 14.	Principal Accounting Fees and Services	8485
PART IV
Item 15.	Exhibits, Financial Statement Schedules	8586
Item 16	Form 10-K Summary	8586
	Exhibit Index	8687
	Signatures	9091
	Index to Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm	F-1

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may”, “will”, “should”, “expects”, “plans”, “anticipates”, “could”, “intends”, “target”, “projects”, “contemplates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We believe that these factors include, but are not limited to, the following:

•

any issue that compromises our relationships with the U.S. federal government or its agencies or other state, local or foreign governments or agencies;

•

any issues that damage our professional reputation;

•

changes in governmental priorities that shift expenditures away from agencies or programs that we support;

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volatility of government budgets and funding;

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our dependence on the award, maintenance and renewal of long-term government contracts, which are subject to the government’s budgetary approval process;

•

the size of our addressable markets and the amount of government spending on private contractors;

•

failure by us or our employees to obtain and maintain necessary security clearances or certifications;

•

failure to comply with numerous laws and regulations;

•

changes in government procurement, contract or other practices or the adoption by governments of new laws, rules, regulations and programs in a manner adverse to us;

•

the termination or nonrenewal of our government contracts, particularly our contracts with the U.S. federal government;

•

our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors’ protests of major contract awards received by us;

•

our ability to generate revenue under certain of our contracts;

•

any inability to attract, train or retain employees with the requisite skills, experience and security clearances;

•

the loss of members of senior management or failure to develop new leaders;

•

misconduct or other improper activities from our employees or subcontractors;

•

our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog;

•

changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts;

•

changes in estimates used in recognizing revenue;

•

internal system or service failures and security breaches;

•

inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements or other unfavorable outcomes; and

•

other risks and factors listed under “Risk Factors” and elsewhere in this report.

We have based the forward-looking statements contained in this report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described in the section captioned “Risk Factors” and elsewhere in this report. These risks are not exhaustive. Other sections of this report include additional factors that could adversely impact our business and financial performance. Furthermore, new risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

You should read this report and the documents that we reference in this report and have filed as exhibits to the registration statement of which this report forms a part with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

The forward-looking statements made in this report relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this report or to conform such statements to actual results or revised expectations, except as required by law.

iii

PART I

Item 1. Business.

Overview

Parsons is a leading provider of the solutions and services required to support the complex security environment, unprecedented global infrastructure demand, and a world of digital transformation impacting our customers. For more than 8081 years, we have solved our customers’ most challenging problems and enabled a safer, smarter, more secure, and more connected world thanks to a culture of ~~innovation~~creativity, a focus on delivery, and a mission-focused workforce. ~~Across~~We ~~those~~are ~~eight decades, we’ve~~ established ~~ourselves~~ as a leading provider of integrated solutions and services that solve emerging customer challenges by leveraging our depth of experience and expertise in the markets where we operate. Today, that legacy of success has never been more true or more important, with Parsons uniquely positioned to deliver innovative solutions to our customers’ most challenging current and emerging requirements.

We have ~~developed~~ significant expertise and differentiated capabilities in ~~key~~six growing, enduring and profitable end markets including cyber and ~~intelligence~~electronic warfare, space and missile defense, critical infrastructure protection, transportation, ~~environmental~~water ~~remediation~~and environment, and urban development. ~~Whether~~Leveraging aboth ~~first-of-a-kind~~organic ~~sustainable~~and inorganic investments, ~~industrial~~we ~~city~~have ~~that~~positioned ~~runs~~ourselves onas ~~100%~~a ~~renewable~~technologically ~~energy,~~differentiated ~~security-as-a-service~~leader ~~platform~~in ~~that~~each ~~uses~~end ~~advanced~~market. ~~analytics~~By exploiting digital technology and artificial intelligence~~/machine~~ ~~learning~~(AI), towe ~~defend~~will ~~against~~continue ~~critical~~to ~~infrastructure~~drive ~~cyber~~accelerated ~~threats (transportation~~growth, ~~utility~~create transformative solutions, ~~water~~and enhance efficiency. Example areas include assured position, ~~facility~~navigation and ~~healthcare~~timing (A-PNT), orcounter ~~elimination~~unmanned ofaircraft ~~emerging~~systems, ~~contaminants~~advanced ~~from~~traffic ~~the~~management ~~environment~~systems, webiometrics, ~~deliver~~and ~~integrated~~non-kinetic ~~solutions~~effectors. ~~that~~Additionally, our ~~customers~~unique, ~~need~~complementary and ~~the~~diverse ~~world~~portfolio ~~demands.~~enables ~~Across~~us ~~those~~to ~~programs~~realize synergies in sectors including but not limited to events management, wecritical ~~have~~infrastructure ~~developed~~protection, energy resilience, aviation modernization, and emerging contaminant elimination. Our longstanding relationships with a wide-ranging global customer set that includes U.S. federal government departments and agencies, the U.S. military, state and local governments, and international clients; ~~all~~has ~~know~~positioned Parsons as a trusted partner ~~sought~~with ~~out~~a reputation for ~~our commitment to their success~~delivery. ~~We’ve~~A ~~further~~testament ~~differentiated~~of ~~ourselves with those customers by delivering solutions through~~ our ~~One~~legacy ~~Parsons~~is ~~approach, bringing together capabilities from across~~ our ~~markets~~ranking toby ~~provide~~Engineering ~~integrated~~News ~~and~~Record ~~unique offerings that leverage our global experience and in-depth technological expertise in areas of emerging demand such~~ as ~~our~~the ~~application~~#1 ofprogram ~~artificial intelligence to critical areas including cyber, engineering design, traffic~~ management ~~and~~company ~~counter~~in ~~unmanned~~the ~~aircraft systems~~world.

Organizationally, we operate in two reportable segments, Federal Solutions and Critical Infrastructure, with revenue contribution of 5951% and 4149%, respectively, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) contribution of 6946% and 3154%, respectively, for the year ended December 31, ~~2024~~2025 (“fiscal ~~2024~~2025”). See "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment Results” for further discussion on our segments.

Federal Solutions: Our Federal Solutions segment is an advanced technology provider to the U.S. government, delivering innovative, timely, and cost-effective solutions for mission-critical projects. We provide critical technologies, including cyber; integrated air and missile defense; intelligence; aviation modernization; electronic warfare; space ground systems;, ~~space~~cislunar, A-PNT, and ~~weapon~~classified ~~system resiliency~~sensors; geospatial intelligence; signals intelligence; environmental remediation; border security and counter-drug, critical infrastructure protection; counter unmanned air systems; biometrics; and ~~biosurveillance~~bio surveillance. The U.S. government and its agencies represent substantially all of the revenue of our Federal Solutions segment. These U.S. government agencies include the Intelligence Community, the Departments of ~~Defense~~War, Energy, Labor, State, Homeland Security, and Commerce, the United States Postal Service, the National Aeronautics and Space Administration, and the Federal Aviation Administration.

Critical Infrastructure: Our Critical Infrastructure segment provides program management, planning, design and engineering services, and owners representative support for complex physical and digital infrastructure assets around the globe. WeRanked the #1 program manager and #3 construction manager in the world by Engineering News Record, we develop digital solutions focused on next generation aviation; rail and transit; bridges,; roads and highways; and urban destinations; and leverage sensors and data to drive smart sustainable infrastructure. Our capabilities in environmental remediation, water and wastewater treatment and conveyance systems, and urban development allow us to deliver ~~value to our customers by employing advanced technologies, improving timelines and decreasing costs while reducing environmental impacts and improving the quality~~

ofvalue ~~life.~~to Weour ~~design~~customers ~~and~~by ~~lead~~employing ~~the~~advanced ~~delivery of complex infrastructure projects~~technologies, ~~leveraging~~improving ~~our~~timelines ~~expertise~~and asdecreasing acapital ~~leader in bridges, transportation,~~ and ~~urban~~operating ~~development~~costs towhile ~~support~~reducing ~~customers~~environmental inimpacts ~~programs~~and ~~that~~improving ~~are transforming~~ the ~~global~~quality ~~landscape.~~of life. We serve a wide-ranging global customer base including federal, state, municipal and industry customers, and private sector infrastructure owners, such as the transportation authorities for the cities of Los Angeles, San Francisco, New York, and Paris, the state of New Jersey, Amtrak, CSX, Metrolinx (Ontario, Canada), Southern Nevada Water Authority, the Royal Commission for Riyadh City, the Dubai Municipality, Dubai Roads and Transportation Authority, Abu Dhabi Department of Municipalities and Transport, Qatar Public Works Authority, Saudi Arabia’s Public Investment Fund, and major international property developers.

Advances in technology and geopolitical events are dramatically shifting the operating landscape across our markets, with pressing challenges ranging from ~~confronting~~ increasingly sophisticated cybersecurity threats, tonew ~~upgrading~~uses for unmanned aircraft systems, confronting a spectrum of missile systems, aging infrastructure, tocoastal ~~reducing~~resiliency ~~environmental~~and ~~footprint~~the ~~and~~need ~~improving~~to improve water quality. Our customers are seeking smart technology-enabled solutions leveraging artificial intelligence and digital technologies such as model-based systems engineering and digital twins to enhance and transform their systems performance and to address these challenges. Parsons’ extensive capabilities enable us to provide our ~~services~~solutions, products, and ~~solutions~~services across the national security and critical infrastructure markets, and we are well positioned to benefit from the trends in these markets. We have capabilities in the following four areas that span our two segments and four business units:

Systems Integration: We provide engineering ~~services~~solutions and ~~technology~~services for large digital and physical systems with high technical complexity. We lead projects from concept development through research and design, implementation, testing and verification, ensuring interoperability of these complex, disparate systems.

Program Management: We provide expertise and technology to advance our customers’ execution of large, complex projects within their defined, technical, quality, time and cost parameters.

Design Engineering: We provide advanced systems and infrastructure engineering design associated with utility capital projects, water/wastewater treatment, environmental remediation, ~~ammunition~~industrial ~~plant~~base ~~upgrades~~modernization, roads and highways, bridges, rail and transit systems, and other associated infrastructure. ~~Additionally, we are leveraging digital engineering technology including model-based systems engineering and digital twins.~~

Product Development: We develop software and hardware across many domains and mission-specific applications. Our experienced engineers and developers design, develop, integrate, operate and sustain mission-critical software and hardware products for ~~intelligence~~defense, ~~defense~~security, and infrastructure customers.

Our customer relationships, which are based on a long history of successfully delivering complex technical solutions and services, are key to our success. We are often involved in the early stages of our customers’ planning processes, which allows us to efficiently optimize our delivery model. These relationships, along with our technical expertise and intellectual property, enable Parsons to successfully provide solutions that meet our customers’ demanding technical and execution requirements and fulfill our corporate purpose of developing a better world.

Our Services, Products and Solutions

Within each of our segments, we focus our solutions, products and services on the needs of customers in each of our business units. Parsons is differentiated by our people, processes, and technology that work together to develop, rapidly prototype and deploy specialized hardware, software and infrastructure solutions to meet continually evolving customer missions and needs. With a culture driven by agility, innovation and collaboration, we provide operationally proven capabilities in emerging technical areas, including advanced analytics, artificial intelligence/machine learning, cyber, electronic warfare, environmental remediation and space systems. We perform systems integration, product development, program management, and engineering across our segments and business units.

In fiscal ~~2024~~2025, we generated revenues of $6.84 billion, net income attributable to Parsons Corporation of $~~235~~241.1 million and Adjusted EBITDA of $~~605~~609.03 million. For a definition of Adjusted EBITDA and reconciliation to net income attributable to Parsons Corporation, see Management’s Discussion and Analysis of Financial Condition and Results of Operations.

We achieved an overall win rate of 7261% in fiscal ~~2024~~2025, 6672% in the year ended December 31, ~~2023~~2024 (“fiscal ~~2023~~2024”) and 4966% in the year ended December 31, ~~2022~~2023 (‘fiscal ~~2022~~2023”), which includes strong re-compete win rates of 8499.6% in fiscal ~~2024~~2025 giving us long-term certainty on key contracts. As of December 31, ~~2024~~2025, our total backlog was $8.97 billion, ana ~~increase~~decrease of 42% from December 31, ~~2023~~2024.

Federal Solutions

Our Federal Solutions business provides integrated solutions, software and hardware products, and engineering design services. Federal Solutions consists of two business units: Defense & Intelligence (D&I) and Engineered Systems (ES). Our strategy is to deliver information dominance across all domains.

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D&I—Our D&I business unit is organized into ~~three~~four related areas: defense, ~~space~~ and engineering services; ~~cyber~~space ~~and~~solutions; national security operations; and high consequence missions. Our customers include the U.S. Department of ~~Defense~~War, the U.S. Intelligence Community, the Department of Commerce, and the National Aeronautics and Space Administration. D&I is a mission partner for differentiated technical solutions, products, and services, delivering innovations in cyber, space, missile defense, electronic warfare, multi-domain command and control, intelligence, surveillance and reconnaissance, electromagnetic spectrum dominance, and directed energy. Our solutions are used to meet national security challenges from space to the tactical edge around the globe. In ~~2024~~2025, we expanded our footprint across the important Indo-Pacific Command (INDOPACOM) region, as well as the European theater.

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Defense ~~Space~~ and Engineering Services – We provide software, hardware, and technical expertise to clients across a variety of mission areas, including but not limited to, ~~space~~intelligence, ~~missile~~air defense, weapons systems, integration, and warfighter applications. Our customers span the U.S. Intelligence Community, including the ~~(Defense Intelligence Agency (DIA),~~ National Geospatial-Intelligence Agency (NGA), National Reconnaissance Office (NRO)); U.S. Department of ~~Defense~~War (~~DOD~~DOW) (military services, and Special Operations Command (SOCOM),). ~~Missile~~Representative ~~Defense~~products ~~Agency~~include our Command-and-Control Core (~~MDA~~C2Core®), ~~United~~mission ~~States~~planning ~~Cyber~~and ~~Command~~tasking ~~(CYBERCOM);~~suite ~~National~~that ~~Oceanic~~links requests, effects, and ~~Atmospheric~~operational ~~Administration~~guidance ~~(NOAA)~~in a unified database, and ~~National~~the ~~Aeronautics~~ZEUS® ~~and~~laser ~~Space~~neutralization ~~Administration~~system ~~(NASA)~~offering critical force protection in any operational theater.

▪

Space Solutions – We integrate hardware, software, and other capabilities in support of space operations, missile defense, and large-scale systems integration for programs such as Golden Dome. Our customers include the Missile Defense Agency (MDA), National Oceanic and Atmospheric Administration (NOAA), U.S. Air Force, and National Aeronautics and Space Administration (NASA).

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We provide satellite ground systems support and operations, flight dynamics, data fusion and analytics, platform system integration, directed energy, joint all-domain operations, and command and control systems.

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As an example, our ground systems enable efficient and effective access to space for small satellites on the Polar Operational Environmental Satellite (POES) and other commercial, national security and small class launch systems. Importantly, we offer this innovative ground spacecraft operations center on a commercial as-a-service business model.

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~~Representative~~We ~~products~~are ~~include~~the ~~our~~prime ~~Command-~~Technical, Engineering, Advisory and~~-Control~~ ~~Core~~Management Support (~~C2Core®~~TEAMS) ~~mission~~Next ~~planning~~contractor ~~and~~for ~~tasking~~the ~~suite~~MDA, ~~that~~where ~~links~~we ~~requests~~provide engineering, ~~effects~~analysis, and ~~operational~~management ~~guidance~~support infor athe ~~unified~~development ~~database,~~of integrated and ~~ZEUS®~~layered ~~Recovery~~missile ofdefense ~~Airbase~~systems ~~Denied~~that bydefend ~~Ordnance~~U.S. ~~(RADBO)~~and ~~laser~~allied ~~neutralization~~forces ~~system~~against ~~offering~~ballistic, ~~critical~~hypersonic, ~~force~~and ~~protection~~cruise inmissile ~~any~~threats, ~~operational~~and ~~theater.~~

We are the prime Technical, Engineering, Advisory and Management Support (TEAMS) Next contractor for the MDA, where we provide engineering, analysis, and management support for the development of integrated and layered missile defense systems that defend U.S. and allied forces against ballistic, hypersonic, and cruise missile threats, and advance the agency’s integrated air and missile defense, command and control, and battle management and communications missions across all-domain battlespace.

~~Cyber~~advance ~~and National Operations – We provide capabilities across~~ the ~~digital~~agency’s ~~landscape,~~integrated ~~including~~air ~~full-spectrum~~and ~~cyber,~~missile ~~defensive cyber operations~~defense, ~~information~~command ~~operations,~~ and ~~analytics. Our customers include the U.S. intelligence community~~control, ~~U.S. Cyber Command, DOD research laboratories,~~ and ~~military~~battle ~~cyber~~management ~~services. The acquisition of Black Signal expands our offensive solution offerings~~ and ~~our~~communications ~~intelligence~~missions ~~community~~across ~~customer~~all-domain ~~base~~battlespace.

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~~Cyber~~National ~~solutions~~Security ~~and~~Operations ~~products~~– ~~augment~~We ~~and~~provide ~~automate~~capabilities ~~full~~across ~~spectrum~~the ~~cyber~~digital ~~operations~~landscape, including ~~our~~full-spectrum ~~Automated Management Solutions (AMS)~~cyber, adefensive ~~software framework that integrates disparate~~ cyber ~~capabilities~~operations, ~~tools~~information operations, and ~~infrastructures~~analytics. ~~into~~Our acustomers ~~common~~include ~~system~~the ~~architecture~~U.S. ~~that~~intelligence ~~assists~~community, ~~military cyber operators~~U.S. WeCyber ~~develop~~Command, ~~and~~DOW ~~maintain~~research ~~enterprise~~laboratories, ~~platforms used by the DOD to perform network analysis~~ and ~~vulnerability~~military ~~assessments~~cyber ~~for defensive missions~~services.

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We conduct vulnerability research and resiliency solutions for existing weapon systems, critical infrastructure and space systems, while supporting the development and integration of next generation electronic warfare capabilities. We also develop analysis and anomaly detection tools for radio frequency and airborne communications.

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We develop tools and tradecraft to conduct Information Operations across the physical and cyber domains, giving customers complete situational awareness for force protection and decision making with the information environment.

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High-Consequence Missions – We provide capabilities across the digital landscape, electronic warfare, multi-domain operations, mission support and national to tactical operations. Our customers include the U.S. Intelligence Community, U.S. Cyber Command, and ~~DOD~~DOW research laboratories.

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Our tools and products are used across a wide variety of electronic warfare operations, including commercial cellular survey, automated signal identification and characterization using Artificial Intelligence/Machine Learning (AI/ML), signal modeling and simulation used for radio frequency (RF) ranges and test and evaluation centers using our Threat Representative Environment (TReX®) platform, and integrated RF and cyber solutions to deliver effects from long standoff distances.

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We conduct vulnerability research and provide resiliency solutions for existing weapon systems, critical infrastructure, and space systems, while supporting the development and integration of next generation electronic warfare capabilities. We also develop analysis and anomaly detection tools for radio frequency and airborne communications.

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~~ES—Our~~Cyber ESsolutions ~~business unit focuses on advanced technology services for complex energy~~ and ~~chemical~~products ~~systems,~~augment ~~aviation, life sciences~~ and ~~bio-surveillance~~automate ~~systems,~~full ~~environmental~~spectrum ~~remediation,~~cyber ~~security and protection systems~~operations, ~~and~~including ~~associated~~our ~~complex~~Automated ~~infrastructure.~~Management ~~Representative~~Solutions ~~customers include the Department of State~~ (~~DOS~~AMS), ~~Department~~a ofsoftware ~~Energy~~framework ~~(DOE),~~that ~~Defense~~integrates ~~Threat~~disparate ~~Reduction~~cyber ~~Agency (DTRA)~~capabilities, ~~Department~~tools ~~of Homeland Security (DHS), U.S. Army Corps of Engineers (USACE), Federal Aviation Administration (FAA), National Aeronautics~~ and ~~Space~~infrastructures ~~Administration~~into ~~(NASA),~~a ~~United~~common ~~States~~system ~~Postal~~architecture ~~Service~~that ~~(USPS),~~assists ~~Department~~military ofcyber ~~Labor (DOL), and Jet Propulsion Laboratory (JPL)~~operators. ~~Representative~~We ~~offerings~~develop ~~include~~and ~~weapons~~maintain ofenterprise ~~mass~~platforms ~~destruction~~used ~~elimination,~~by ~~munitions~~the ~~destruction;~~DOW ~~remediation~~to ofperform ~~unexploded~~network ~~ordinances~~analysis and ~~hazardous,~~vulnerability ~~toxic,~~assessments ~~reactive~~for ~~wastes;~~defensive architectural and engineering design; program and construction management; infectious disease control; advanced electronic security systems; border security; counter-unmanned aircraft systems; and biometrics solutionsmissions.

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~~Our~~We ~~expertise~~deliver ~~includes~~situational ~~designing~~awareness and ~~upgrading~~tactical ~~processing~~command and ~~production~~control ~~facilities~~for ~~such~~both asoverseas ~~Army~~and ~~ammunition,~~border ~~technology~~security ~~deployment~~operations inthrough ~~response~~our tosupport ~~pandemic~~Team ~~outbreaks,~~Awareness ~~and~~Kit ~~delivery~~(TAK) ofprogram. ~~solutions~~Parsons’ ~~addressing~~acquisition ~~resiliency,~~of ~~security~~CTI ~~and~~brought ~~sustainability~~TAK capabilities, aswhich ~~well~~we asare ~~delivery~~integrating ofinto ~~highly-complex~~various ~~infrastructure~~Parsons’ ~~in challenging environments and geographies.~~ programs

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ES—Our ES business unit focuses on advanced technology services for complex energy and chemical systems, aviation, life sciences and bio surveillance systems, environmental remediation, security and protection systems, and associated complex infrastructure. Representative ~~programs~~customers include the ~~National~~Department ~~Science~~of ~~Foundation’s~~State ~~Antarctica~~(DOS), ~~Infrastructure~~Department ~~Modernization~~of ~~for~~Energy ~~Science~~(DOE), ~~the~~Defense Threat Reduction Agency (DTRA), Department of Homeland Security (DHS), U.S. Army Corps of Engineers (USACE), Federal Aviation Administration (FAA), ~~Technical~~National ~~Services~~Aeronautics ~~Contract~~and Space Administration (NASA), ~~the~~United States Postal Service (USPS), Department of Labor (DOL), and Jet Propulsion Laboratory (JPL). Representative offerings include weapons of mass destruction elimination, munitions destruction; remediation of unexploded ordinances and hazardous, toxic, reactive wastes; architectural and engineering design; program and construction management; infectious disease control; advanced electronic security systems; border security; counter-unmanned aircraft systems; and biometrics solutions.

~~DTRA~~Our ~~Cooperative~~expertise ~~Threat~~includes ~~Reduction~~designing ~~Integrating~~and ~~Contract,~~upgrading ~~the~~processing ~~Department~~and ofproduction ~~State~~facilities ~~Overseas~~such ~~Security~~as ~~Installation~~Army ~~Services~~ammunition and munitions industrial bases, and delivery of solutions addressing resiliency, security and ~~the~~sustainability, ~~Radford~~as ~~Army~~well ~~Munition~~as ~~Plant~~delivery ~~Energetic~~of ~~Waste~~highly ~~Incinerator~~complex infrastructure in challenging environments and geographies.

Our technological investments in areas including counter-unmanned aircraft systems and biometrics have enabled us to deliver operationally relevant solutions and products to critical customer needs. DroneArmor is a Technology Readiness Level 9 solution to effectively counter unmanned aircraft systems and ensure the safety and security of personnel, bases and assets. Parsons’ uses AI/ML to detect, track, identify and defeat UAS. In biometrics, we have expanded our identity management offerings to include the new AresNXT next-generation, multi-platform biometric collection solution.

Representative programs include the National Science Foundation’s (NSF) Antarctica Infrastructure Modernization for Science, the FAA Technical Support Services Contract, the DTRA Cooperative Threat Reduction Integrating Contract and Red Team contract, the Department of State Overseas Security Installation Services, the Radford Army Munition Plant Energetic Waste Incinerator and the Holston Ammonium Nitrate Solution Tank Farm.

Critical Infrastructure

Our Critical Infrastructure business provides planning, engineering, design, program management, owners representative services and digital solutions consisting of two business units focused on two major geographies: North America (INF-NA) and Europe, Middle East, and Africa (EMEA). Our growth strategy includes leveraging our portfolio of sophisticated engineering solutions and technologies for complex physical infrastructure projects to capture the increasing demand and investment in global infrastructure programs. We are expanding our portfolio in key emerging growth areas, including intelligent transportation systems, smart mobility, environmental remediation, events management, urban development ~~and~~ rebuild, and water/wastewater treatment.

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INF – NA - Our INF – NA business unit provides planning, engineering and management services for complex infrastructure, including bridges, ~~and~~ tunnels, roads and highways, and water and wastewater systems. Our customer relationships include states (e.g., Texas, Florida, California, Colorado, Washington, Illinois, New York, New Jersey and Georgia), cities, and Canadian provinces and territories (e.g., Ontario, British Columbia, Quebec, Nova Scotia, and Alberta), as well as transportation, and water and wastewater authorities. Our capabilities include technologies in long-span bridges, tunnels, building Information modeling, and water/wastewater treatment and conveyance.

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Examples of our design capabilities are our role as the lead designer of the Tacoma Narrows Bridge, the largest twin tower suspension bridge in the world when it opened, lead designer for the new Goethals Bridge connecting Staten Island, NY and Elizabeth, NJ, and lead designer for the Federal Way rail extension for Sound Transit in Seattle.

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For program management, we are the Owner’s Engineer for the Gordie Howe International Bridge between Windsor, Ontario and Detroit, Michigan, which will have the longest main span of any cable-stayed bridge in North America and Gateway, the new two-tube Hudson River Tunnel. In addition, we are the program manager for the California Delta Water Conveyance Modernization Project, a multi-billion environmentally compliant water transfer project to improve water supply sustainability and reliability for human and environmental uses.

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INF- NA - Our INF-NA business unit also includes intelligent transportation systems, utilities, environmental remediation, emerging contaminants (including PFAS/PFOS), aviation, rail and transit, and ParsonsX, our enterprise digital transformation organization. Our customers include state and local governments, Fortune 100 companies, utility companies, smart city developers, and private sector infrastructure owners, such as the transportation authorities for the cities of Los Angeles and New York, states and provinces, and rail and transit entities, including Amtrak, CSX, Metrolinx (Ontario Canada), and WMATA. Technology capabilities include AI/ML, cloud, digital twins, cyber, systems integration, intelligent transportation network software, vehicle inspection data analytics software, automated people mover, electric vehicle infrastructure, and autonomous vehicle integration.

Parsons provides integrated traffic solutions for arterials, smart intersections, airport landside, ports, and tolling integrators. An example is our role as provider of Advanced Traffic Management Systems, or ATMS, through our iNET™ platform. Since the first deployment in 2007, iNET® has been delivered to twenty-five state Departments of Transportation, twenty-four cities, eight county agencies, eight toll agencies, and seven different countries.

For aviation, we play a critical role as program manager and lead designer for global airports. We are the program manager of the environmentally sensitive Diamond Head Extension Program at Honolulu International Airport, the Houston Airport System, and

the ~~Landside~~cities ~~Access~~of ~~Modernization~~Los ~~Program~~Angeles ~~for~~and ~~Los~~New ~~Angeles~~York, ~~International~~states ~~Airport;~~and provinces, and ~~were~~rail ~~lead~~and ~~designer~~transit onentities, ~~the~~including ~~award-winning~~Amtrak, ~~Newark~~CSX, ~~Airport~~Metrolinx ~~Terminal~~(Ontario ACanada), ~~replacement~~and ~~project~~WMATA. ~~known~~Technology ascapabilities ~~Terminal~~include 1AI/ML, cloud, digital twins, cyber, systems integration, intelligent transportation network software, vehicle inspection data analytics software, automated people mover, electric vehicle infrastructure, and autonomous vehicle integration.

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~~Our~~Parsons ~~rail~~provides ~~and~~integrated ~~transit~~traffic ~~capabilities~~solutions ~~include~~for ~~systems optimization~~arterials, ~~communications-based~~smart ~~train control~~intersections, ~~rail~~airport ~~system~~landside, ~~design~~ports, and ~~system~~tolling ~~assurance~~integrators. WeAn ~~have~~example ~~more~~is ~~than~~our ~~six~~role ~~decades~~as provider of ~~experience~~Advanced inTraffic ~~this~~Management ~~market~~Systems, ~~and~~or ~~have~~ATMS, ~~supported~~through ~~over~~our ~~400~~iNET™ ~~rail and transit customers~~platform. ~~Key~~Since ~~programs~~the ~~include~~first ~~Honolulu~~deployment ~~Authority~~in ~~for~~2007, ~~Rapid~~iNET® ~~Transit,~~has ~~New~~been ~~York~~delivered ~~MTA~~to ~~Systems~~twenty-five ~~and~~state ~~Facility~~Departments ~~Engineering~~of ~~Services~~Transportation, ~~and the Bay Area Rapid Transit Communications~~twenty-~~Based~~four ~~Train Control. For our bus transit customers~~cities, weeight ~~provide~~county ~~strategic fleet transition planning~~agencies, ~~zero-emission~~eight ~~bus~~toll ~~infrastructure design~~agencies, and ~~benefit-cost~~seven ~~analysis~~different ~~to achieve net zero goals~~countries.

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~~EMEA~~For –aviation, ~~Our~~we ~~EMEA~~play ~~business unit has~~ a ~~region-wide~~critical ~~customer~~role ~~base~~ in ~~Europe,~~capital ~~the~~program ~~Middle~~delivery ~~East~~for ~~and~~global ~~Africa~~airports, ~~with~~having asupported ~~key~~more ~~focus~~than on450 ~~the~~airport ~~Gulf Cooperation Council (GCC) states~~projects. ~~Services~~We ~~provided~~are ~~include~~the ~~multi-disciplinary~~program ~~design,~~manager ~~technical,~~of ~~and~~the ~~management~~environmentally ~~solutions~~sensitive ~~from~~Diamond ~~project~~Head ~~conceptualization~~Extension toProgram ~~urban~~at ~~planning,~~Honolulu ~~landscape~~International ~~architecture~~Airport, ~~sewage~~the ~~treatment~~Houston ~~and~~Airport ~~drainage~~System, ~~events management, engineering~~ and ~~program management, utilizing state-of-~~the~~-art~~ ~~digital~~Landside ~~solutions~~Access ~~and~~Modernization ~~embedded~~Program ~~sustainability concepts~~ for ~~enhanced~~Los ~~delivery~~Angeles ofInternational ~~large-scale~~Airport; and ~~highly~~we ~~complex~~were ~~infrastructure~~lead ~~assets.~~designer ~~Our~~on ~~client~~the ~~base includes top tier public authorities and state~~award-~~owned~~winning ~~developers~~Newark ~~across~~Airport ~~different~~Terminal ~~markets~~A ~~from~~replacement ~~city-scale~~project ~~developments~~known toas ~~major~~Terminal ~~city-wide infrastructure schemes~~1.

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Our ~~extensive~~rail ~~planning~~ and ~~design~~transit capabilities ~~enable~~include ussystems tooptimization, ~~lead~~communications-based ~~key~~train ~~infrastructure~~control, track operations and ~~development~~maintenance ~~projects~~facility, ~~including~~station, ~~Dubai’s~~traction ~~Integrated~~power, ~~Traffic~~and ~~System~~rail system design and ~~operation~~system toassurance. ~~enable~~We ~~traffic~~have ~~optimization~~more ~~and~~than ~~efficiency,~~six ~~and~~decades ~~transportation~~of ~~infrastructure~~experience ~~projects~~in tothis ~~increase~~market ~~capacity~~ and ~~reduce~~have ~~congestion,~~supported ~~Abu~~over ~~Dhabi’s~~400 ~~Mid-Island~~rail ~~Parkway~~and ~~connecting~~transit ~~multiple~~customers. ~~islands~~Key ~~for~~programs ~~future~~include ~~sustainable~~Honolulu ~~developments,~~Authority ~~Green~~for ~~Riyadh~~Rapid ~~landscape~~Transit, ~~and~~New ~~infrastructure~~York ~~design~~MTA ~~for~~Systems ~~increased~~and ~~urban~~Facility ~~green~~Engineering ~~space~~Services, and ~~Denmark’s~~the ~~Banedanmark~~Bay ~~Rail~~Area ~~Signaling~~Rapid ~~Program~~Transit toCommunications-Based ~~enable~~Train ~~better~~Control. ~~centralized~~For ~~traffic~~our ~~control~~bus transit customers, ~~energy~~we ~~optimization~~provide strategic fleet transition planning, zero-emission bus infrastructure design, and ~~reduced~~benefit-cost ~~delays~~analyses to achieve a wide range of client goals.

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~~Parsons~~EMEA – Our EMEA business unit has a ~~long~~region-~~standing~~wide ~~program~~customer ~~management~~base ~~legacy~~ in Europe, the Middle East ~~for~~and ~~infrastructure~~Africa, ~~mega~~with ~~cities,~~a ~~and~~key ~~urban~~focus ~~development.~~on ~~We are part of~~ the ~~consortium~~Gulf ~~Riyadh~~Cooperation ~~Metro~~Council ~~Transit~~(GCC) ~~Consultants~~states. ~~responsible~~Solutions ~~for~~and ~~program~~services ~~management~~include ofmulti-disciplinary ~~the~~design, ~~Riyadh~~technical, ~~Metro~~and –management ~~the~~solutions ~~largest~~from ~~metro~~project ~~system~~conceptualization ~~under~~to ~~development~~urban inplanning, ~~the~~landscape ~~world~~architecture, ~~which~~sewage ~~successfully~~treatment ~~opened~~and indrainage, ~~2024.~~events Wemanagement, ~~managed~~traffic ~~successful~~management, ~~delivery~~defense ofand ~~the~~security ~~award-winning~~program ~~Abu~~management, ~~Dhabi~~engineering ~~International~~and ~~Airport~~program ~~tripling~~management, ~~the~~utilizing ~~size~~ state-of -the-art ~~previous~~digital ~~terminals,~~solutions ~~led~~and ~~the~~embedded ~~Dubai~~sustainability ~~Strategic~~concepts ~~Sewage~~for ~~Network~~enhanced ~~program~~delivery toof ~~increase~~large-scale ~~capacity~~ and ~~sustainability,~~highly ~~managed~~complex ~~Lusail~~infrastructure ~~City~~assets. ~~Development~~Our ~~the~~client ~~largest~~base ~~ever~~includes ~~city~~top ~~development~~tier inpublic ~~Qatar,~~authorities and ~~provided~~state-owned ~~program~~developers ~~management~~across ofdifferent ~~Riyadh’s~~markets ~~King~~from ~~Abdullah~~city-scale ~~Financial~~developments ~~District~~to ~~prime~~major ~~business,~~city-wide ~~hospitality~~infrastructure ~~and lifestyle destination~~schemes.

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WeOur ~~are~~extensive ~~members~~planning ofand ~~various~~design ~~collaborative~~capabilities ~~delivery~~enable ~~models~~us to lead key infrastructure and development projects, including ~~Delivery~~Dubai’s ~~Partner~~and onRiyadh’s ~~the~~Integrated ~~Qiddiya~~Traffic ~~destination~~System ~~city~~design ~~development~~and ~~near~~operation ~~Riyadh~~to enable traffic optimization and aefficiency, ~~team~~and ~~member~~transportation oninfrastructure ~~NEOM~~projects ~~The~~to ~~Line~~increase capacity and reduce congestion, Abu Dhabi’s Mid-Island Parkway connecting multiple islands for future sustainable ~~city~~developments, inGreen ~~Saudi~~Riyadh ~~Arabia~~landscape and infrastructure design for increased urban green space, and Denmark’s Banedanmark Rail Signaling Program to enable better centralized traffic control, energy optimization, and reduced delays.

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Parsons ishas ~~considered~~ a golong-tostanding ~~service~~program ~~provider~~management legacy in the Middle East for ~~successful~~infrastructure, mega cities, and ~~timely~~urban ~~delivery~~development. ofWe ~~world~~are ~~events~~part ~~with~~of ~~fixed~~the ~~opening~~consortium ~~dates,~~Riyadh ~~including~~Metro ~~UAE’s~~Transit ~~World~~Consultants ~~Expo~~consortium ~~2020~~responsible for ~~which~~program ~~Parsons~~management ~~provided~~of ~~site-wide~~the ~~infrastructure,~~Riyadh ~~landscape~~Metro ~~design~~– the world's longest fully driverless metro system, ~~and~~which ~~construction~~successfully ~~supervision~~opened ~~services;~~in ~~and~~2024. We are currently the Delivery Partner for ~~FIFA~~the ~~World~~King ~~Cup~~Salman ~~2022~~International Airport (KSIA) airside and landside infrastructure, ~~where~~the ~~services~~world’s ~~from~~largest ~~transportation~~airport ~~management~~currently ~~planning~~under todevelopment ~~vehicle~~covering ~~access~~57sgkm ~~strategies~~(22 ~~and~~sgm) ~~design~~with ~~were~~six ~~provided~~runways to ~~manage~~accommodate ~~traffic~~185 ~~and~~million ~~build~~annual ~~resilient~~passengers ~~infrastructure~~by ~~for~~2030, led the ~~mega~~Dubai ~~sporting~~Strategic ~~event.~~Sewage Network program to

The team maintains a keen focus on innovative practices. As an example, we are integrating cutting-edge AI-driven design and construction supervision technologies across over 50 major GCC projects, enhancing efficiency and capabilities and driving much needed innovation in the construction industry.

~~Our~~increase ~~Smart~~capacity ~~Solutions Lab provides digital solutions to our clients as an important~~ and ~~integral aspect of our technical offerings. Within our Advisory Services group~~sustainability, ~~Parsons~~managed isLusail ~~providing~~City ~~clients~~Development ~~with relevant asset information across~~ the ~~full~~largest ~~range~~ever ofcity ~~asset~~development ~~types~~in toQatar, ~~enable~~and ~~data~~provided ~~driven~~program management ~~decisions and maximize ROI. We help clients optimize their lifecycle costs with a focus on O&M, including the provision~~ of ~~O&M planning and inspections on various roads including Dubai~~Riyadh’s ~~Shindagha~~King ~~Bridge,~~Abdullah ~~modeling~~Financial ~~the~~District ~~O&M~~prime ~~outlook for Dubai Municipality on its major Strategic Sewage Tunnel Program~~business, ~~managing~~hospitality ~~O&M strategy~~ and ~~implementation~~lifestyle for urban development and infrastructure in Abu Dhabi with attainment of multiple Green Flag awards for parks and green spaces, and setting O&M strategies for optimized asset operations for mega cities such as Qiddiya, NEOM, as well as Yanbu and Jazan industrial citiesdestination.

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We are members of various collaborative delivery models, including Delivery Partner on the KSIA mentioned above, Qiddiya destination city development near Riyadh and a team member on NEOM The Line sustainable city in Saudi Arabia

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Parsons is considered a go-to service provider for successful and timely delivery of world events with fixed opening dates, including UAE’s World Expo 2020 for which Parsons provided site-wide infrastructure, landscape design, and construction supervision services; and for FIFA World Cup 2022, where services from metro systems delivery and transportation management planning to vehicle access strategies and design were provided to manage traffic and build resilient infrastructure for the mega sporting event.

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The team maintains a keen focus on innovative practices. As an example, we are integrating cutting-edge AI-driven design and construction supervision technologies across over 100 major GCC projects, enhancing efficiency and capabilities and driving much needed innovation in the construction industry.

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Our Digital Solutions Lab applies tools developed in our Technology Advancement Group to provide digital solutions to our clients as an important and integral aspect of our technical offerings. Across our portfolio, Parsons is providing asset owners with relevant information across the full range of asset types to enable data driven management decisions and maximize ROI. We help clients optimize their lifecycle costs with a focus on O&M, including the provision of O&M planning and inspections on various roads and structures, including Dubai’s Shindagha Bridge, modeling the O&M outlook for Dubai Municipality on its major Strategic Sewage Tunnel Program, managing O&M strategy and implementation for urban development and infrastructure in Abu Dhabi with attainment of multiple Green Flag awards for parks and green spaces, and setting O&M strategies for optimized asset operations for mega cities such as Qiddiya, NEOM, as well as our continued work on the Yanbu and Jazan industrial cities, where Parsons has been setting and implementing O&M policies for over five decades.

Our Market Opportunities

Technology revolution, geopolitical events, regulatory changes, and environmental ~~impact~~impacts isare driving a swift pace of change, resulting in ongoing societal transformation, complicated ~~geopolitical~~global dynamics, and a shifting threat landscape~~, and the globalization of commerce~~. To address this evolving landscape, our customers are actively seeking technology-enabled solutions at the speed of relevancy to upgrade and transform assets and operations. The below trends are key growth drivers in both our Federal Solutions and Critical Infrastructure segments.

Defense Spending Remains a Priority of the U.S. national agenda due to the reemergence of long-term strategic peer competition, ~~which~~and ~~has been cited in~~ the ~~National~~continuance ~~Defense~~of ~~Strategy~~domestic asand ~~the~~international ~~primary concern for U~~terrorism.S. ~~national~~The ~~prosperity~~near ~~and~~peer ~~security.~~nation ~~This~~state ~~reemergence~~reinvigoration has resulted in increased global disorder and a security environment, defined by rapid technological change~~, which may be more complex than ever before~~. We believe the U.S. Department of ~~Defense~~War and Intelligence Community will continue to invest in cyber, space, artificial intelligence, electronic warfare, missile defense, and critical infrastructure protection. In addition, as a result of supporting ongoing war efforts, ammunition and munitions need to be replenished and the Army ammunition plants must be modernized to support this need.

Cyber is Mission Critical to U.S. National Security and cyber adversaries are increasing in volume and sophistication as global connectivity and the rise of social media have led to an explosion in the amount of available and exploitable data. Additionally, there has been an increase in aggressive nation state cyber activity. Attacks by cyber-criminals seeking financial gain are also growing in volume and sophistication. We believe that the cyber market will continue to grow in response to the nation state threat landscape and the vulnerabilities inherent in critical infrastructure. Our unique portfolio of Federal Solutions and Critical Infrastructure provides the technical capabilities to detect and prevent cyberattacks along with the domain knowledge to understand how to secure infrastructure from threats. Additionally, the United States must remain on the leading edge of cyber operations, platforms and tool development.

Consistent Need for Actionable Intelligence to Support U.S. Priorities is driving a shifting threat landscape that necessitates a greater need for collaboration and cooperation between intelligence agencies. There is a new demand for joint all-domain command and control systems that are optimized to function cohesively across a spectrum of domains. This in turn drives a need for sophisticated data analytics to aggregate data into useful formats in real-time. To respond, we believe the United States intelligence community and Department of Defense will need continued focus on information sharing and collaboration for improved intelligence accuracy and timeliness encompassing multiple forms of intelligence collection.

Indo-Pacific is the Department of Defense’s Priority Theater. The United States has an enduring commitment to uphold a free and open Indo-Pacific region. This has become complicated due to inter-state strategic competition and increasingly complex security environment. The United States is focused on competing, deterring and winning in this environment to safeguard free and open international order.

~~Global~~Solutions ~~Infrastructure Needs Significant Replacements~~ and ~~Technology-Driven~~Critical ~~Upgrades.~~Infrastructure ~~Physical~~provides ~~infrastructure is in need of upgrade throughout~~ the ~~world~~technical ~~and~~capabilities ~~there is unprecedented spend. Furthermore, modernized infrastructure is important~~ to ~~recover~~detect ~~from unexpected disasters caused by climate change. The $1.2 trillion United States Infrastructure Investment~~ and ~~Jobs~~prevent ~~Act~~cyberattacks ~~(IIJA)~~along ~~has~~with ~~increased~~the ~~funding~~domain ~~for~~knowledge ~~roads~~to ~~and~~understand ~~highways,~~how ~~bridges,~~to ~~rail~~secure ~~and~~infrastructure ~~transit,~~from ~~and aviation~~threats. Additionally, ~~there is significant demand in other regions, including Canada and~~ the ~~Middle~~United ~~East.~~States ~~The~~must ~~Middle~~remain ~~East~~on ~~has a planned spend that exceeds $1.5 trillion per~~ the ~~Middle~~leading ~~East~~edge ~~Economic~~of ~~Digest~~cyber ~~and Canada has invested $140 billion through the Investing in Canada Plan launched in 2016 for a 12-year period. In particular~~operations, ~~the~~platforms ~~Saudi Vision 2030 focus is driving major industrial city~~ and ~~urban~~tool development ~~projects~~. Critical infrastructure, specifically transportation infrastructure that is essential to national economic and security concerns, is also vulnerable to cyber threats. We believe that a focus on safety, security, sustainability and environmental impacts will continue to drive replacement of aging infrastructure.

~~Per-~~Consistent ~~and~~Need ~~Polyfluoroalkyl~~for ~~Substances~~Actionable ~~(PFAS)~~Intelligence ~~Remediation.~~to ~~PFAS~~Support ~~are~~U.S. ~~manufactured~~Priorities ~~chemicals~~is ~~that~~driving ~~have~~a ~~been~~shifting ~~used~~threat inlandscape ~~industry~~that ~~and~~necessitates ~~consumer~~a ~~products~~greater ~~since~~need ~~the~~for ~~1940s.~~collaboration ~~Scientific~~and ~~studies~~cooperation ~~have~~between ~~shown~~intelligence ~~that~~agencies. ~~exposure~~There tois ~~PFAS~~a innew ~~the~~demand ~~environment~~for ~~may~~joint beall-domain ~~linked~~command ~~to harmful health effects in humans~~ and ~~animals.~~control ~~Therefore,~~systems ~~there~~that isare aoptimized ~~need~~ to ~~reduce~~function ~~PFAS~~cohesively inacross ~~the~~a ~~environment~~spectrum –of ~~groundwater, soil, and surface water~~domains. ~~The~~This ~~Environmental~~in ~~Protection~~turn ~~Agency~~drives ~~has~~a ~~taken~~need ~~actions,~~for ~~including~~sophisticated ~~$10~~data ~~billion~~analytics ofto ~~funding~~aggregate todata ~~address~~into ~~emerging~~useful ~~contaminants~~formats in ~~the~~real-time. ~~IIJA,~~To ~~issuing health advisories and proposing new~~respond, ~~legally~~we ~~enforceable~~believe ~~Maximum~~the ~~Contaminant~~United ~~Levels~~States ~~for~~intelligence ~~PFAS~~community ~~substances~~and ~~found~~Department inof ~~drinking~~War ~~water.~~will ~~Parsons~~need ~~has~~continued ~~unique~~focus ~~capabilities,~~on ~~expertise,~~information sharing and ~~experience~~collaboration tofor ~~mitigate~~improved ~~PFAS~~intelligence ~~risks~~accuracy and ~~liabilities~~timeliness ~~for~~encompassing ~~federal,~~multiple ~~state,~~forms ~~and~~of ~~commercial~~intelligence ~~customers~~collection.

~~Urbanization~~Securing ~~Creates~~the ~~Demand~~border is a high priority for ~~Smart~~the ~~Cities~~Department ~~with~~of ~~Connected~~Homeland ~~Populations~~Security. ~~Cities~~This ~~around~~includes ~~the~~but ~~globe~~is ~~increasingly~~not ~~demand~~limited ~~connected~~to both physical and ~~more~~smart ~~sustainable~~border ~~capabilities~~walls, ~~such~~protection asagainst ~~sensor~~unmanned ~~networks~~air systems, and ~~communication~~identity ~~strategies~~management. toAdditionally, ~~connect~~the ~~streetlights,~~increased ~~security~~focus ~~cameras,~~on ~~and~~the ~~emergency~~western ~~systems,~~hemisphere toas ~~provide~~outlined ~~important~~in ~~real-time~~the ~~information~~National ~~and~~Defense ~~better~~Strategy ~~serve~~requires ~~their~~similar ~~citizens~~capabilities ~~and~~to ~~reduce~~support ~~carbon~~counter-drug ~~emissions~~efforts. ~~Integrated~~Our ~~corridor~~proven ~~management~~and ~~solutions,~~global ~~intelligent~~border ~~transportation~~security ~~systems,~~capabilities ~~advanced~~include ~~rail~~but ~~systems,~~are ~~and~~not ~~updated~~limited ~~telecommunication~~to ~~networks~~border ~~will~~security ~~keep~~design, ~~cities~~program ~~around~~management, ~~the~~prevention ~~world~~of ~~functioning~~weapons asof ~~smart~~mass ~~and~~destruction ~~sustainable~~proliferation, ~~cities~~counter nuclear smuggling detection and ~~serve~~deterrence, assecurity ~~engines~~training, ~~for~~C-UAS, ~~economic~~and ~~growth.~~identity management.

~~Transformation~~Indo-Pacific ofCommand ~~Legacy~~(INDOPACOM) ~~Service Delivery Models through Technology and Digital Transformation. Historical capital project management~~ is ~~changing with~~ the ~~introduction~~Department of ~~cloud-connected~~War’s ~~computer-aided~~Priority ~~design, automation, big data, machine learning, and other technologies~~Theater. The ~~introduction~~United ofStates ~~these~~has ~~new~~an ~~technologies~~enduring ~~allows~~commitment ~~industry participants~~ to ~~reimagine~~uphold ~~existing~~a ~~value~~free ~~chains,~~and ~~address~~open ~~integrated~~INDOPACOM ~~lifecycle~~region. ~~objectives,~~This ~~assure~~has ~~human~~become ~~rights~~complicated ~~are~~due ~~observed~~to ininter-state ~~their~~strategic ~~supply~~competition ~~chains, provide environmentally sensitive~~ and ~~sustainable~~increasingly ~~solutions,~~complex ~~boost~~security ~~productivity, and streamline project management~~environment. ~~Industry~~The ~~participants~~United ~~that~~States ~~have~~is ~~the~~focused ~~capability~~on tocompeting, ~~embrace~~deterring ~~these new technologies to enhance their capability~~ and ~~service~~winning ~~offering~~in tothis ~~higher~~environment ~~value solutions will be well positioned~~ to ~~assist~~safeguard ~~governments~~free and ~~communities~~open ininternational ~~their transformation~~order.

~~Change~~Golden ~~equals~~Dome ~~opportunity,~~is ~~and~~a ~~Parsons~~Key isProgram ~~well-positioned~~in toSupport ~~serve~~of aNorth ~~large~~America ~~array~~Homeland ofDefense. ~~global~~The ~~customers.~~Golden ~~Across~~Dome aprogram ~~broad~~will ~~set~~accelerate ofand ~~industries,~~augment wethe ~~provide~~delivery ~~smart~~of ground and ~~agile~~space-based ~~solutions~~capabilities ~~that~~to ~~create~~defend the ~~future~~Homeland ~~for~~against ~~our~~missiles, ~~national~~threats, ~~security~~drone attacks against major urban areas, and ~~critical~~key ~~infrastructure~~installations. ~~customers~~Parsons asis ~~they~~well ~~adapt~~positioned to ~~the~~support ~~rapid~~Golden ~~changes~~Dome ofthrough aour ~~more~~MDA ~~interconnected~~TEAMS Next program and ~~technology~~Non-~~driven~~Kinetics ~~world~~Effects (NKE) capabilities across both Department of War and Intelligence customers, as well as our presence in both the United States and Canada.

Global Infrastructure Demand Drives Need for Significant Replacements and Technology-Driven Upgrades. Physical infrastructure is in need of upgrade throughout the world, driving unprecedented spending. Furthermore, modernized infrastructure is important to recover from unexpected disasters caused by climate events. The $1.2 trillion United States Infrastructure Investment and Jobs Act (IIJA) has increased funding for roads and highways, bridges, rail and transit, and aviation. Additionally, there is significant demand in other regions, including Canada and the Middle East. The Middle East has a planned spend that exceeds $1.8 trillion through 2030 and Canada has invested $140 billion through the Investing in Canada Plan launched in 2016 for a 12-year period. In particular, the Saudi Vision 2030 focus is driving major industrial city and urban development projects to meet economic diversification goals which drive both organic population growth and ambitious tourism, leisure, and entertainment development, while significant population inflows resulting Vision Plans are driving demand for infrastructure and urban development across the UAE. Critical infrastructure, specifically transportation infrastructure that is essential to national economic and security concerns, is also vulnerable to cyber threats. We believe that a focus on safety, security, sustainability and environmental impacts will continue to drive the replacement of aging infrastructure.

Per- and Polyfluoroalkyl Substances (PFAS) Remediation. PFAS are manufactured chemicals that have been used in industry and consumer products since the 1940s. Scientific studies have shown that exposure to PFAS in the environment may be linked to harmful health effects in humans and animals. Therefore, there is a need to reduce PFAS in the environment – groundwater, soil, and surface water. The Environmental Protection Agency has taken actions, including $10 billion of funding to address emerging contaminants in the IIJA, issuing health advisories and proposing new, legally enforceable

Maximum Contaminant Levels for PFAS substances found in drinking water. Parsons has unique capabilities, expertise, experience, and patents to mitigate PFAS risks and liabilities for federal, state, and commercial customers.

Urbanization Creates Demand for Smart Cities with Connected Populations. Cities around the globe increasingly demand connected and more sustainable capabilities, such as sensor networks and communication strategies to connect traffic signals, security cameras, and emergency systems, to provide important real-time information and better serve their citizens and reduce carbon emissions. Integrated corridor management solutions, intelligent transportation systems, advanced rail systems, and updated telecommunication networks will keep cities around the world functioning as smart and sustainable cities and serve as engines for economic growth.

Transformation of Legacy Service Delivery Models through Technology and Digital Transformation. Historical capital project management is changing with the introduction of cloud-connected digital design, automation, big data, machine learning, and other technologies. The introduction of these new technologies allows future-focused industry participants to reimagine existing value chains, address integrated lifecycle objectives, assure human rights are observed in their supply chains, provide environmentally sensitive and sustainable solutions, boost productivity, and streamline project management. Professional services firms that have the capability to embrace these new technologies to enhance their capability and service offering to higher value solutions will be well positioned to assist governments and communities in their transformation.

Change equals opportunity, and Parsons is well-positioned to serve a large array of global customers. We have a unique, complementary and diverse portfolio where we can capitalize on synergies. Across a broad set of industries and geographies, we provide smart and agile solutions that create the future for our national security and critical infrastructure customers as they adapt to the rapid expansion and changes of a more interconnected and technology-driven world.

Our Competitive Strengths

Proven Track Record

Our proven track record is a result of our strong performance, the dedication of our employees, and our longstanding customer relationships. We focus on being a company that delivers on its promises, holds integrity at the highest level and successfully assists our clients as they execute their most complex missions. Driven by our integrated people, processes and technology approach, we have a reputation for innovation and delivering mission outcomes for our customers’ most important endeavors.

Our differentiated business model and ability to move up the value chain and win larger programs, has driven high win rates with strong book-to-bill, leading organic revenue growth, expanded bottom line performance, and low capital requirements. We achieved average award and incentive fees of 93% in fiscal 2025, 86% in fiscal 2024 and 92% in fiscal 2023. Incentive fees are fees earned for achievement of certain performance criteria included in our contracts, such as achievement of target completion dates or target costs, and our incentive fees average is calculated as the actual incentive fees achieved as a percentage of incentive fees expected to be earned in the applicable period. In addition, we achieved a win rate of 61% in fiscal 2025, 72% in fiscal 2024 and 66% in fiscal 2023. Our re-compete win rate was 99.6% in fiscal 2025, 84% in fiscal 2024 and 93% in fiscal 2023. In fiscal 2025, our Federal Solutions revenues decreased 20% and our Critical Infrastructure revenues increased 15% year-over-year. As of December 31, 2025, our backlog was $8.7 billion, an decrease of 2% from year end fiscal 2024.

Our differentiated business model and ability to move up the value chain and win larger programs, has driven high win rates with strong book-to-bill, leading organic revenue growth, expanded bottom line performance, and low capital requirements. We achieved average award and incentive fees of 86% in fiscal 2024, 92% in fiscal 2023 and 91% in fiscal 2022. Incentive fees are fees earned for achievement of certain performance criteria included in our contracts, such as achievement of target completion dates or target costs, and our incentive fees average is calculated as the actual incentive fees achieved as a percentage of incentive fees expected to be earned in the applicable period. In addition, we achieved a win rate of 72% in fiscal 2024, 66% in fiscal 2023 and 49% in fiscal 2022. Our re-compete win rate was 84% in fiscal 2024, 93% in fiscal 2023 and 89% in fiscal 2022. In fiscal 2024, our Federal Solutions revenues increased 33% and our Critical Infrastructure revenues increased 13% year-over-year. As of December 31, 2024, our backlog was $8.9 billion, an increase of 4% from year end fiscal 2023.

Long-Term Customer Relationships

We maintain long-term relationships with key government and commercial customers, many of which span over 40 years. For example, in the Federal Solutions segment, wethe Parson's team have been providing support to the Missile Defense Agency for nearly 40 years with ~~over~~approximately 1,000 personnel embedded with the customer. We have provided services to the Department of Energy (DOE) for over 50 years on a variety of projects, including work on DOE’s National Nuclear Security Agency program and have provided over 20 years of support to the United States Space Force and predecessor organizations. In the Critical Infrastructure segment, we have supported the Washington Metropolitan Area Transit Authority for over 50 years and have served as Program Manager for Yanbu Industrial City for nearly 50 years.

These longstanding relationships give us the insight and customer intimacy to align our research and development investments based on customer needs and enable high win rates for prime contract positions on the most technically demanding assignments. We believe that our position as a recognized leader in integrity, innovation, operational efficiency, safety and security, environmental and health, and our ability to deliver exceptional quality, has resulted in a high level of re-compete wins and has driven substantial customer loyalty. Our six core markets, including cyber and intelligence, space and missile defense, critical infrastructure protection, transportation, environmental remediation and urban development require leading-edge technologies and extensive technical know-how, and necessitate consistently exceptional performance, thus further entrenching us with our key customers and driving our long-term relationships. 9

years on a variety of projects, including work on DOE’s National Nuclear Security Agency program and have provided over 20 years of support to the United States Space Force and predecessor organizations. In the Critical Infrastructure segment, we have supported the Washington Metropolitan Area Transit Authority for over 50 years and have served as Program Manager for Yanbu Industrial City for nearly 50 years.

These longstanding relationships give us the insight and customer intimacy to align our research and development investments based on customer needs and enable high win rates for prime contract positions on the most technically demanding assignments. We believe that our position as a recognized leader in integrity, innovation, operational efficiency, safety and security, environmental and health, and our ability to deliver exceptional quality, has resulted in a high level of re-compete wins and has driven substantial customer loyalty. Our six core markets, including cyber and electronic warfare, space and missile defense, critical infrastructure protection, transportation, water and environment and urban development require leading-edge technologies and extensive technical know-how, and necessitate consistently exceptional performance, thus further entrenching us with our key customers and driving our long-term relationships.

Technology Innovation

Technology and our people are our most important assets, together they underpin our ability to consistently deliver for our customers. Investment in key technological capabilities is core to our business and helps us to stay at the forefront of the evolving trends across our end markets. To meet the challenges of tomorrow, we are focusing our technology investment in areas including artificial intelligence and machine learning; digital transformation; space, cyber and electronic warfare; assured position navigation and timing; emerging contaminant remediation; and quantum computing. The work of our collaborative, highly skilled and dedicated employees has enabled our long track record of continued innovation and execution on behalf of our customers. Our team of engineers, scientists, programmers and other specialists include PhDs and certified hackers, and over 4,~~000~~400 of our skilled workforce hold government security clearances, which provides a competitive advantage for the highly technical and demanding work we perform. Our dual technical career path and Technical Fellows program enable retention and development of our strong technical talent.

Leveraging our agile innovation framework and a cadre of seasoned domain experts, solutions architects, and technologists, we seek customer challenges and lead with innovative solutions to drive growth. Additionally, through our acquisitions, we continue to enhance our overall capability offerings in innovative ways, providing more robust solutions that meet our customers’ most challenging needs.

Environmental Sustainability and Resiliency Excellence

Delivering a safer, healthier and more connected world means a focus on environmental sustainability, ~~resilience, conservation~~ and ~~lifecycle impacts~~resilience. For Parsons, sustainability is a core value. We provide services to plan, design and support complex sustainable projects for our customers across the markets we serve, including transportation (aviation, rail and transit, intelligent transportation systems), ports, buildings, environmental remediation, and water/wastewater treatment.

~~With~~We ~~over~~are ~~233~~committed ~~sustainability~~to ~~accreditations~~implementing efficient strategies in our corporate operations, wecultivating ~~deliver~~an ~~resilient~~internal ~~infrastructure~~culture of sustainability, and ~~sustainable~~fostering ~~projects~~continuous ~~that~~improvement. ~~utilize~~As ~~best~~of ~~industry~~the ~~practices~~end of 2025, asour ~~well~~employees held 288 sustainability-related credentials (such as ~~utilize~~LEED ~~leading~~APs, ~~edge~~Envision ~~technology~~SPs, Certified Energy Managers and ~~tools~~Pearl Qualified Professionals), underpinning our ability to ~~provide~~deliver ~~environmental~~environmentally ~~remediation.~~sound, Wesustainable, ~~work~~and ~~with~~resilient ~~customers~~solutions tofor ~~achieve~~infrastructure, defense, security, and ~~obtain~~construction ~~the~~clients. ~~highest~~Our ~~possible~~environmental ~~ratings~~experts ~~such~~are asalso on the ~~LEED,~~leading ~~Envision,~~edge ~~Estidama,~~of ~~and~~developing ~~others~~innovative remediation approaches for emerging contaminants.

We ~~are proud to work with customers, such as the Indiana Finance Authority, on the first bridge and tunnel project to achieve Envision recognition; and we~~ have obtained LEED certifications of transit and aviation facilities with customers in the United States, United Arab Emirates, and the Kingdom of Saudi Arabia.

Parsons is focused on the risks and opportunities associated with climate change. In 2024, Parsons elected to disclose information related to our climate-related governance, risk management and metrics utilizing the Task Force on Climate-Related Financial Disclosures (TCFD) framework. We conducted climate risk and opportunity workshops with senior leaders representing a cross-section of our geographies, markets and corporate functions. By releasing annual Environmental, Social and Governance (ESG) disclosures and increasing our transparency, we received improved ratings from ISS, MSCI, Sustainalytics and S&P Global.10

The Corporate Governance and Responsibility Committee of our Board of Directors provides oversight of environmental, social and governance, including climate-related topics, and the Audit and Risk Committee provides oversight of our enterprise risk management program, including climate-related risks. Our Chief Executive Officer holds overall executive-level responsibility for these matters.

Scalable and Agile Business Offerings

Our scalable and agile offerings enable us to satisfy robust and evolving customer needs. The demanding environments where we operate are characterized by a need for high-confidence solutions, widespread application and mission critical outcomes. We pride ourselves on providing agile technologies through inventive and refined processes that provide quality outcomes to our customers on time sensitive projects. Our domain knowledge of our customers’ current and emerging requirements enables us to deliver responsive, high-quality solutions on time and with operational relevance. By having the ability to respond to customers’ requirements with global deployment capability, we are well positioned to be the preferred contractor for many of our customers’ needs.

Our technologies and platforms are designed to be applicable across end user markets and sub-markets. This approach allows for scalable solutions that can be quickly and seamlessly integrated into multiple customer applications, regardless of geography or industry, allowing us to deploy a given service or platform across multiple markets.

World Class Talent

We aim to be the employer of choice for top talent in every market that we serve by fostering a positive culture for employee engagement; emphasizing health and wellbeing for all employees; and encouraging career development at all levels of the organization. Our success is measured by our business performance, by the enthusiasm of our employees, and by our commitment to our employees’ growth. We strive to be a destination employer that attracts, retains and develops our workforce. As a testament to our employee engagement, in 2025 we had a record year for employee retention.

Demonstrated Ability to Identify and Execute Acquisitions to Transform our Business

Strategic acquisitions that augment our technology offerings and capabilities are a key tenet of our growth strategy. WeFrom ~~have~~the ~~completed~~beginning ~~thirteen~~of ~~strategic acquisitions since~~ 2017. ~~Ten~~through ~~of these acquisitions were within~~ the ~~Federal~~end ~~Solutions~~of ~~business segment~~2025, ~~two~~we ~~were~~have incompleted ~~the~~sixteen ~~Critical~~strategic ~~Infrastructure segment (I~~acquisitions.S. ~~Engineers,~~In ~~LLC,~~2025 ~~and~~we ~~BCC~~acquired ~~Engineering, LLC) and the remaining~~ one ~~spanning~~company ~~both~~within ~~segments~~Federal ~~(IPKeys~~Solutions ~~Power Partners~~(CTI)., ~~Our~~and ~~focus~~two ~~continues~~within toCritical beInfrastructure ~~moving~~(Applied upSciences ~~the value chain with technology differentiation~~ and inTRS ~~particular software~~Group). We seek companies that meet our strict financial criteria and have a similar mission-focused culture. These acquisitions include:

•

~~BCC~~Applied ~~Engineering~~Sciences Consulting, ~~LLC~~Inc.: Acquired ~~November~~October 1, ~~2024~~2025, at a purchase price of $~~232~~28.71 million. ~~BCC~~Applied Sciences is a ~~full-service~~Florida based engineering firm that ~~provides~~specializes ~~planning,~~in ~~design,~~water and ~~management~~stormwater ~~services~~solutions for ~~transportation~~cities, ~~civil~~counties, and ~~structural~~water ~~engineering~~management ~~projects~~districts inacross ~~Florida,~~the ~~Georgia,~~state. ~~Texas,~~Applied ~~South~~Sciences ~~Carolina,~~works ~~and~~closely ~~Puerto~~with ~~Rico.~~agencies ~~This~~across ~~acquisition~~Florida ~~strengthens~~to ~~Parsons’~~deliver ~~position~~solutions asthat anprotect ~~infrastructure~~and ~~leader~~advance ~~while expanding~~ the ~~company~~region’s ~~reach~~water ininfrastructure ~~the~~resilience. ~~southeastern~~This ~~United~~acquisition ~~States,~~expands anParsons’ ~~area~~water ~~where~~expertise ~~the Infrastructure Investment~~ and ~~Jobs~~strengthens ~~Act~~its ~~(IIJA)~~presence ~~provided~~in ~~approximately~~Florida ~~$100~~and ~~billion~~water inis ~~Federal~~our ~~Highway~~most ~~Administration~~profitable ~~dollars~~and ~~for~~fastest-growing ~~fiscal~~market ~~years~~within ~~2022~~Infrastructure ~~through~~North ~~2026~~America..

•

~~BlackSignal~~Chesapeake ~~Technologies,~~Technology ~~LLC~~International Corp. (CTI): Acquired ~~August~~July 161, ~~2024~~2025, atfor a purchase price of $~~203~~91.75 million. ~~BlackSignal~~CTI isstrengthens aParsons’ ~~next-generation~~defense ~~provider~~customer ~~built~~posture towith ~~counter~~Special ~~near~~Operations ~~peer~~forces ~~threats.~~and ~~This~~enhances ~~acquisition expands~~ Parsons’ ~~customer~~position ~~base~~in ~~across~~ the ~~Department~~INDOPACOM area of ~~Defense~~operations. ~~and~~CTI ~~Intelligence~~brings ~~Community~~extensive ~~and~~capabilities ~~significantly~~as ~~strengthens~~an ~~Parsons’ positioning with full~~all-~~spectrum~~domain ~~cyber~~technology ~~and~~solutions ~~electronic warfare~~provider, ~~while~~powered ~~adding~~by ~~new~~cutting-edge ~~capabilities~~products inthat enhance the ~~counterspace~~warfighters’ ~~radio~~ability ~~frequency domain – markets anticipated~~ to ~~grow~~sense, ~~more~~evaluate ~~than~~and ~~10%~~deliver ~~annually~~effects ~~with~~within ~~double~~the ~~digit~~invisible ~~margin~~battle ~~expectations~~spaces. ~~BlackSignal~~These ~~uses~~capabilities ~~artificial~~are ~~intelligence~~critical ~~and~~for ~~machine~~modern ~~learning~~warfare ~~to create innovative signal processing techniques that detect~~ and ~~disrupt~~align ~~difficult~~with tothe ~~access~~new ~~command~~administration’s ~~and~~spending ~~control systems and platforms~~priorities.

•

TRS Group, Inc.: Acquired January 31, 2025, for a purchase price of $36.6 million. TRS is an industry leader in per and polyfluoroalkyl substances (PFAS), thermal, and holistic environmental remediation, having cleaned hazardous and toxic substances from soil,

groundwater, and fire suppression systems for global clients. TRS has successfully completed more than 160 in situ thermal remediation projects, establishing itself as a proven operator in treating volatile and semi-volatile organic compounds, including PFAS, energetics, and pesticides, in soil, groundwater and bedrock.

•

BCC Engineering, LLC: Acquired November 1, 2024, at a purchase price of $233.5 million. BCC is a full-service engineering firm that provides planning, design, and management services for transportation, civil and structural engineering projects in Florida, Georgia, Texas, South Carolina, and Puerto Rico. This acquisition strengthens Parsons’ position as an infrastructure leader while expanding the company’s reach in the southeastern United States, an area where the Infrastructure Investment and Jobs Act (IIJA) provided approximately $100 billion in Federal Highway Administration dollars for fiscal years 2022 through 2026.

•

BlackSignal Technologies, LLC: Acquired August 16, 2024, at a purchase price of $203.7 million. BlackSignal is a next-generation provider built to counter near peer threats. This acquisition expands Parsons’ customer base across the Department of War and Intelligence Community and significantly strengthens Parsons’ positioning with full-spectrum cyber and electronic warfare, while adding new capabilities in the counterspace radio frequency domain – markets anticipated to grow more than 10% annually with double digit margin expectations. BlackSignal uses artificial intelligence and machine learning to create innovative signal processing techniques that detect and disrupt difficult to access command and control systems and platforms.

•

I.S. Engineers, LLC: Acquired on October 31, 2023 for a purchase price of $12.2 million. I.S. Engineers is a full-service consulting engineering firm which specializes in transportation engineering, including roads and highways, and program management located in Texas. Texas is poised to receive nearly $30 billion in total transportation funding from the Infrastructure Investment and Jobs Act between 2022 and 2026.

•

Sealing Technologies, Inc.: Acquired on August 23, 2023 for a purchase price of $176.0 million. SealingTech expands Parsons’ customer base across the Department of ~~Defense~~War and Intelligence Communities and further enhances Parsons’ capabilities in defensive cyber operations; integrated mission-solutions powered by artificial intelligence (AI) and machine learning (ML); edge computing and edge access modernization; critical infrastructure protection, and secure data management that protects national security.

•

IPKeys Power Partners, Inc.: Acquired on April 13, 2023 for a total purchase price of $43.0 million. IPKeys enhances Parsons’ critical infrastructure protection capabilities through comprehensive cloud-based cybersecurity, software solutions that operate at the intersection of information and operational technology (IT and OT), and technologies that will help accelerate the global clean energy transition. This acquisition expands Parsons’ presence in two rapidly growing end markets: grid modernization and cyber resiliency for critical infrastructure.

•

Xator Corporation: Acquired on May 31, 2022 at a purchase price of $387.5 million. Xator expands Parsons’ presence within the U.S. Special Operations Command, the Intelligence Community, Federal Civilian customers, and global critical infrastructure markets, while providing new customer access at the Department of State. Xator also expands Parsons’ customer base and brings differentiated technical capabilities in critical infrastructure protection, counter-unmanned aircraft systems (cUAS), intelligence and cyber solutions, biometrics, and global threat assessment and operations, increasing our addressable market in both the Federal Solutions and Critical Infrastructure segments.

•

Echo Ridge LLC: Acquired on July 30, 2021 at a purchase price of $9 million. Echo Ridge adds position, navigation, and timing devices; modeling simulation, test and measurement tools; and deployable software defined radio products and signal processing services to Parsons’ space portfolio.

BlackHorse Solutions, Inc.: Acquired July 6, 2021 at a purchase price of $205.0 million. Black Horse expands Parsons’ capabilities and products in next-generation military, intelligence, and space operations, specifically in cyber, electronic warfare, and information dominance. Black Horse’s technology is shaping the future of information dominance and converged military operations by unifying cyber, electromagnetic warfare, and information operations for the Department of Defense and Intelligence Community customers. The company also provides autonomous and distributed detection, identification, exploitation and the defeat of today’s most complex communications.12

•

~~Braxton~~BlackHorse ~~Science and Technology Group~~Solutions, ~~LLC~~Inc.: Acquired inJuly ~~November~~6, ~~2020~~2021 at a purchase price of $~~310~~205.90 million. ~~($267~~Black ~~million~~Horse ~~less~~expands ~~the~~Parsons’ ~~tax~~capabilities ~~asset),~~and ~~Braxton~~products ~~operates~~in atnext-generation ~~the~~military, ~~forefront~~intelligence, ofand ~~satellite~~space operations, ~~ground~~specifically ~~automation~~in cyber, ~~flight~~electronic ~~dynamics~~warfare, and ~~spacecraft~~information ~~antenna~~dominance. ~~simulation~~Black ~~for~~Horse’s ~~the~~technology ~~U.S.~~is ~~Department~~shaping the future of ~~Defense~~information dominance and ~~Intelligence~~converged ~~Community.~~military ~~These~~operations ~~capabilities~~by ~~position~~unifying ~~Parsons~~cyber, toelectromagnetic ~~capitalize~~warfare, onand ~~the~~information ~~quickly~~operations ~~evolving~~for ~~space~~the ~~missions~~Department of ~~its~~War ~~national~~and ~~security~~Intelligence ~~space~~Community customers. ~~and~~The ~~address~~company ~~rapid~~also ~~market~~provides ~~growth~~autonomous ~~driven~~and bydistributed ~~proliferated~~detection, ~~low~~identification, ~~earth~~exploitation ~~orbit~~and ~~constellations,~~the ~~small~~defeat ~~satellite~~of ~~expansion~~today’s ~~and~~most ~~space~~complex ~~cyber resiliency~~communications.

•

Braxton Science and Technology Group, LLC: Acquired in November 2020 at a purchase price of $310.9 million ($267 million less the tax asset), Braxton operates at the forefront of satellite operations, ground automation, flight dynamics, and spacecraft antenna simulation for the U.S. Department of War and Intelligence Community. These capabilities position Parsons to capitalize on the quickly evolving space missions of its national security space customers and address rapid market growth driven by proliferated low earth orbit constellations, small satellite expansion and space cyber resiliency.

•

QRC® Technologies: Acquired in 2019 at a purchase price of $214.1 million, QRC® Technologies is a disruptive product company that provides design and development of open-architecture radio-frequency products.

•

OGSystems: Acquired in 2019 at a purchase price of $292.4 million, OGSystems is a disruptive geo-intelligence solutions and immersive engineering provider that creates technology solutions for the United States intelligence community and the U.S. Department of ~~Defense~~War. OGSystems’ VIPER Labs and Immersive Engineering techniques serve as the catalysts for deployment of geospatial systems and software, embedded system threat analytics and cloud engineering solutions. OGSystems’ advanced hardware solutions include the ~~PeARL~~PeARLtm family of sensors, combining industry-leading camera and optic lens technologies with our software solutions, yielding very high resolution 2D and 3D aerial imagery.

•

Polaris Alpha: Acquired in 2018 at a purchase price of $489.1 million, Polaris Alpha is an advanced, technology-focused provider of innovative mission solutions for national security, intelligence, defense and other U.S. federal customers. With leading technologies in artificial intelligence/machine learning, cloud computing, command and control and data analytics, Polaris Alpha has long-term customer relationships and is known as a technology disruptor.

•

Williams Electric. Acquired in 2017 for a purchase price of $26.4 million. Williams Electric provides industrial control system security, including utility monitoring systems and electronic support systems for customers, including the Army Corps of Engineers and the Smithsonian Institute.

We maintain a robust acquisition pipeline and are continually evaluating potential opportunities for disciplined growth by acquisition to further transform our business.

Our Strategy for Growth

Our growth strategy is to create the future of national security and critical infrastructure, while moving up the value chain as a solutions integrator and software provider. The future is full of possibility, and the defense, ~~intelligence~~security, and critical infrastructure markets are where we can collectively shape what tomorrow will look like.

In a complex security environment with adversaries challenging on every domain and an economy driven by digital transformation, Parsons leverages innovative technologies to deliver integrated solutions at the speed of relevance. Our global integrated solutions span all domains (sea, land, air, space and cyber), ensuring information dominance and smart, sustainable infrastructure.

12To create the future, we focus on people-first, “get-to-yes”, and having top positions in high-growth, sustainable and profitable markets. This focus includes hiring, retaining, and developing our employees,

~~at the speed of relevance. Our global integrated solutions span all domains (sea, land, air, space and cyber), ensuring information dominance and smart, sustainable infrastructure.~~13

To create the future, we focus on people-first, “get-to-yes”, and having top positions in high-growth, sustainable and profitable markets. This focus includes hiring, retaining, and developing our employees, continually enhancing and optimizing our core business processes, resourcing and capitalizing on our high-growth markets and acquiring and integrating companies that possess transformative and disruptive technologies.

People First

Driven by our people-first and high-purpose culture, we recognize that our people are key to our success in developing and delivering the technology and solutions to support our customers’ critical missions. Our most important asset is our team of talented employees, over 1921,~~600~~000 as of December 31, ~~2024~~2025, who are committed and passionate experts critical to delivering leading capabilities and whose expertise is sought by our clients for their most sophisticated applications and challenges. Our employees choose Parsons and stay with us for the opportunity to collaborate with our customers, deploy our expansive technical resources, rapidly bring bold ideas to market and work on leading solutions to enable a better world. Our management team has extensive experience executing strategies for delivering profitable growth and is recognized for operational excellence and leadership integrity. They have strong leadership capabilities in the markets we serve and the solutions and technology we deliver. Most importantly, we strive to give our employees and managers the best possible employee experience throughout their careers with Parsons.

We are committed to attracting, retaining, and developing an experienced workforce by having a:

•

Culture of employee engagement at all organizational levels

•

Work environment that promotes training, mentoring, and career development planning

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Differentiated benefits program, including flexible work hours, remote work options, and an employee stock ownership plan

•

Dual technical career path that leads to positions as Chief Technology Officer and/or Technical Fellow

•

“Parsons Gives Back” program to support our communities and promote volunteering

•

Global hiring strategy outside of high-employment zones

•

Robust university relations and intern program to help shape the next generation of leaders

•

Internal mobility program that supports employee growth, career development and retention

“Get to Yes”

By “getting to yes”, we enable the delivery of agile, innovative, and transformative solutions to our customers. This is increasingly important as our federal customers seek to reform their acquisition processes and make them more commercial. As a company that operates in both federal and commercial spaces, we align with this approach. We seek to enhance and optimize our core business and improve our financial performance, including revenue growth, margin expansion and positive cash flow, using the following strategies:

•

Developing a company-wide agile framework to enable responsive solutions delivery

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Promoting collaboration and cross-company sharing to drive informed, timely decision making

•

Aligning goals through shared one-company objectives and a focus on timely feedback to ensure opportunities for improvement are realized and executed

•

Using ~~digital~~artificial ~~transformation~~intelligence tools to improve our internal processes and deliver an improved customer experience

•

Cross-selling new solutions to our existing customers and existing solutions to new customers

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•

Promoting a culture that enables employees to drive technology and business model innovation

•

Streamlining operations and processes to optimize performance delivery and reduce overhead expenditures

•

Rigorously managing our working capital to maximize cash flow

•

Committing to being a responsible corporation for Parsons and our customers

Top Positions in High-Growth, Sustainable Markets

We have a balanced portfolio between national security and critical infrastructure and a wide range of end markets. We recognize the importance of driving business focus and will resource/invest in areas where we believe Parsons can have a top position in markets that are high-growth, profitable, and enduring. These include cyber and ~~intelligence~~electronic warfare, space and missile defense, transportation, ~~environmental~~water ~~remediation~~and environment, and urban development. We utilize the following strategies, among others, towards achieving this goal:

•

We continuously evaluate and shape our portfolio to divest, exit and de-emphasize lower-performing businesses and markets.

•

We invest in critical, differentiated technology areas, including artificial intelligence, assured position navigation and timing, PFAS remediation, ~~space~~ cyber/electronic warfare, and product development in areas including defensive cyber, space command and control, intelligent transportation systems, spectrum operations and biometrics.

•

We seek continuous expansion in our focused high-growth markets:

Cyber and ~~Intelligence~~Electronic Warfare – Continue our growth momentum by offering end-to-end full spectrum cyber operations and comprehensive electromagnetic spectrum coverage including solutions, tools, operations and platforms for our U.S. Department of ~~Defense~~War and Intelligence Community customers.

Space and Mission Defense – Extend our space situational awareness, ~~command and control and enterprise~~ ground systems, classified sensors and assured position, navigation and timing solutions to our current space customers and to new space, and geospatial customers' in the government and commercial space markets. Support our customer’s integrated air and missile defense strategy and deployment. Provide thought leadership in evolving areas, including ~~counter~~Golden ~~hypersonics~~Dome.

Critical Infrastructure Protection – Provide critical infrastructure protection in sectors where we have installed base, including facilities, health care, transportation, water and energy. Deliver holistic solutions including electronic security systems, cybersecurity, counter unmanned air systems and biometrics.

Transportation – Capitalize on the increased IIJA funding and increased global transportation and infrastructure spending to further our roads and highways, bridges, rail and transit, and aviation business. Leverage technology to drive smart infrastructure.

~~Environmental~~Water ~~remediation~~and Environment – Leverage our specialized skill and experience with respect to remediating mines and oil wells and eliminating emerging contaminants. Apply our design capabilities and innovative technologies to modernize, upgrade and create new water/wastewater treatment systems. Provide coastal resiliency. Lead elimination of emerging contaminants (PFOS) from our soil, groundwater and surface water.

Urban development – Leverage our program management, urban planning and urban design competencies to develop new industrial cities and mixed-use developments.

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Mergers and Acquisitions

We continue to pursue the acquisition and integration of high growth, technology driven companies which meet the following criteria:

•

Financial performance goals: >10% top line growth, >10% Adjusted EBITDA margin, and strong cash flow

•

Align to our six focused markets

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Technology differentiation: fill technology gaps, drive end-to-end solutions, move up the value chain, scale within and across our businesses and add valuable intellectual property rights

Our objective is to continue to transform our business into an integrated, full life-cycle solutions integrator that delivers scalable solutions and drives revenue growth, expanded margins, and strong cash flows.

Backlog

We view growth in total backlog as a key measure of our business growth. We define backlog to include the following two components:

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Funded—Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts.

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Unfunded—Unfunded backlog represents the revenue value of orders for services under existing contracts for which funding has not been appropriated or otherwise authorized less revenue previously recognized on these contracts. Unfunded backlog does not include potential task orders expected to be awarded under multiple awards IDIQ contract vehicles, where task orders are competitively awarded and separately priced.

Backlog includes (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.

Our backlog includes orders under contracts that can extend for several years. For example, the U.S. Congress generally appropriates funds for our U.S. federal government customers on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years to complete. As a result, our federal contracts typically are only partially funded at any point during their term. All or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

As of December 31, ~~2024~~2025, our total backlog was approximately $8.97 billion, consisting of $56.94 billion of funded backlog and $32.03 billion of unfunded backlog. We expect to recognize $34.91 billion of our funded backlog as of December 31, ~~2024~~2025 as revenues in the following twelve months. However, our government customers may cancel their contracts with us at any time through a termination for convenience or may elect to not exercise option periods under such contracts. In the case of a termination for convenience, we would not receive anticipated future revenues but would generally be permitted to recover all or a portion of our incurred costs and fees for work performed.

Competition

The industries we operate in consist of a ~~large~~wide ~~number~~range of enterprises ranging from small, niche-oriented companies to multi-billion-dollar corporations that serve ~~many~~diverse ~~governmental~~government and commercial customers. We compete on the basis of our technical expertise, ~~technological~~and innovation, our ability to deliver cost-effective multi-faceted solutions and services in a timely manner, our reputation and relationships with our

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~~relationships with our~~ customers, qualified and/or security-clearance personnel, and pricing. Our peer group in Federal Solutions are U.S. federal systems integrators and service providers such as Booz Allen Hamilton, CACI International Inc, Leidos Holdings, Inc., and Science Applications International Corporation. Our peer group in Critical Infrastructure includes AECOM, Jacobs Solutions Inc., Stantec, Tetra Tech, Inc., and WSP.

Seasonality

Human Capital Management

We are committed to enhancing our position as a leading employer in our industry and aim to do this through providing a positive employee experience. Our culture and reputation as a leading provider of technology-driven solutions in the defense, ~~intelligence~~security and critical infrastructure markets enables us to recruit and retain some of the best available talent across the globe.

Our professionals are highly educated, with a wide range of technical acumen and in-depth domain knowledge and expertise. Our culture and values enable us to continue attracting qualified talent, particularly those with security clearances and requisite skills in multiple areas, including Project Management, Engineering, Software Development, Cyber, Data Analytics, Environmental and Architecture. We have over 10,~~300~~600 employees who hold degrees and over 3,~~300~~600 with advanced degrees and professional credentials as of December 31, ~~2024~~2025. Our experienced teams understand our clients and are comprised of technology subject matter experts and professionals with deep knowledge and experience.

Engagement

We pulse our workforce annually through an employee engagement survey and the data these surveys provide help us identify areas where our culture is evolving and key strategic areas where we need to continue to focus our energies to improve employee engagement and the employee experience. This data is critical in guiding our cultural journey to become a more dynamic, entrepreneurial, and creative place to work.

This year, we saw some of our highest participation rates among our business groups and functions, with an overall response of 60 percent, which is higher than last year’s overall rate of 54 percent. We are also pleased that our employee engagement score was 80 against a benchmark of 75, up from 78 in 2023. At the highest level, our results describe an organization with a strong performance-driven and team-based culture.

Employee Recognition

As a people first organization, we are dedicated to recognizing employee performance and promoting a culture of recognition. We are immensely proud to maintain a formal employee recognition program that is 100% developed and maintained in-house – a rare accomplishment in our industry. We approach company culture this way: recognition is a mindset.

The Distinguished Recognition and Incentive Program, affectionately known as the DRIVE Program, recognizes, rewards, and encourages high-caliber work. The DRIVE program is comprised of nine distinct award levels, each with its own criteria, workflow, and rewards – some monetary and some non-monetary. The program is open to all part- and full-time employees around the globe, and awards can be distributed from supervisor to team or team member, individual contributor to supervisor, and from peer to peer. That flexibility is what we are most proud of—all employees can recognize someone else or be recognized themself. In 2025, we are pleased that over 4,000 DRIVE awards were conveyed to our employees with monetary awards totaling over $7.1 million.

award levels, each with its own criteria, workflow, and rewards – some monetary and some non-monetary. The program is open to all part- and full-time employees around the globe, and awards can be distributed from supervisor to team or team member, individual contributor to supervisor, and from peer to peer. That flexibility is what we are most proud of—all employees can recognize someone else or be recognized themself. In 2024, we are pleased that over 4,500 DRIVE awards were conveyed to our employees with monetary awards totaling over $7.5 million.

Mentoring

Parsons has a robust mentoring program that facilitates several types of pairings, including senior leaders and employees, peer-to-peer, veterans-to-veterans, and early career professionals with more experienced employees. Employees choose their own mentor and work closely with them to design a mentoring relationship that is tailored to meet their unique goals. Resources are provided to both mentors and mentees to ensure a successful and enriching experience for both. Most Parsons’ Vice Presidents and above are available and engaged in mentoring relationships thus actively fostering a culture of employee growth and development.

and mentees to ensure a successful and enriching experience for both. Most Parsons’ Vice Presidents and above are available and engaged in mentoring relationships thus actively fostering a culture of employee growth and development.

Career Development

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Parsons Learning Series – This program is open to all employees and consists of live, virtual one-hour courses across a wide range of topics appealing to both employees and managers. One or two topics are delivered each month. The live sessions are held at three separate times on the same day to accommodate our global workforce, and sessions are recorded and made available following live session dates.

•

Engaged Leadership Program (ELP) – This 4-month, cohort-based program helps people and project managers develop their management and leadership skills through learning about and then applying new skills on the job. The extended nature of this program fosters a collaborative environment and builds cross-organizational relationships among participants.

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Intentional Leadership Program (ILP) – This is a program for senior leaders, Director-level and above. Participants will complete a facilitated 2-day curriculum designed to strengthen senior leadership skills and help participants intentionally define their own leadership approach while fostering cross-organizational communication and relationship-building.

•

Fellows Program - recognizes our top technical experts and promotes innovation in solving our customers’ most difficult technical challenges. It is a collaborative network of over fifty selected motivated and passionate subject matter experts working to solve technical challenges through either strategic research and development or through the development of long-term technical policies and best practices. The program defines its success through engagement, mentorship, and retention.

•

Technical Career Path - demonstrates two distinct career progressions for technical employees across our organization: one that follows a management path, the other that can be followed as an individual contributor. The Technical Career Path coupled with an integrated competency model and Workday tools such as the Opportunity Graph are resources designed to improve the quality of manager-employee career discussions and, ultimately, career movement.

Employee Stock Ownership Plan

At December 31, ~~2024~~2025, approximately 65,~~600~~800 of our employees participated in our Employee Stock Ownership Plan (ESOP) which held 5450,~~117~~864,~~904~~117 shares at December 31, ~~2024~~2025. Our employees own approximately 4039% of the total outstanding shares in the ESOP. InThe ~~December 2020, the~~ board of directors approved anamendments ~~amendment~~ to the ESOP to provide greater diversification rights to participants., ~~The~~greater ~~amendment~~flexibility ~~provides~~for ~~that,~~certain ~~with~~eligible ~~respect~~participants to ~~all~~receive ~~diversifications~~their ~~elected~~balances orin ~~processed~~fewer ~~after~~installments, ~~January~~and 1,for ~~2021,~~lump sum distributions to participants and removing the ~~definition~~annual ofinstallments. aAnnual ~~qualified~~diversification ~~participant~~elections ~~shall~~and ~~mean~~five-year avested ~~participant~~termination ~~who~~distributions ~~has~~are ~~attained~~not ~~the~~impacted ~~age~~by ofthis 50amendment and ~~who~~will still occur annually and over installments as outlined in the Plan.

has completed at least three years of participation in the ESOP and other criteria. Each qualified participant shall generally be permitted to direct the ESOP as to the diversification of 50% of the value of the eligible vested portion of the participant’s ESOP account. Further, in January 2021, the board of directors approved an amendment to the ESOP whereby distributions to participants in the Plan were modified as follows: (1) the threshold amount of an ESOP participant’s balance to be eligible for a single lump sum distribution was increased from $20,000 or less to $500,000 or less; (2) the threshold balance for a participant to be eligible to receive payment in two annual installments was increased from $40,000 or less to $750,000 or less; and (3) the threshold balance for a participant to be eligible to receive payment in three annual installments was increased to greater than $750,000. This change was made to facilitate greater flexibility for certain eligible participants to receive their balances in fewer installments and to accelerate the increase in publicly traded float for the Company’s common stock. In April 2022, the board of directors approved an amendment providing for lump sum distributions to participants and removing the annual installments. Annual diversification elections and five-year vested termination distributions are not impacted by this amendment and will still occur annually and over installments as outlined in the Plan.

Employee Stock Purchase Plan

At the 2020 Annual Meeting of Parsons’ Shareholders, the shareholders approved the implementation of the Employee Stock Purchase Plan (ESPP). The ESPP provides an opportunity for eligible employees (as defined in the ESPP) to purchase Parsons’ stock. By participating in the ESPP, an eligible employee may purchase Parsons’ shares at a 5% discount from the New York Stock Exchange closing price at the end date for each offering period (June 30th and December 31st of each year). During ~~2024~~2025 and ~~2023~~2024, our employees purchased approximately 95149,~~984~~844 and ~~116~~95,~~650~~984 shares, respectively, of Parsons’ stock.

Stock Repurchase Plan

On August 9, 2021, the board of directors authorized Parsons Corporation to acquire a number of shares of common stock having an aggregate market value of not greater than $100,000,000 from time to time, commencing on August 12, 2021. InThe Board further amended this authorization in August 2022, ~~the~~to ~~Board~~remove ~~amended~~ the ~~stock~~prior ~~repurchase~~expiration ~~program~~date and ~~authorized~~grant executive ~~management~~leadership the discretion to determine anthe ~~acceptable~~ price for ~~repurchasing~~ such ~~shares~~share repurchases. The Board ~~authorized~~further ~~management~~amended tothis ~~execute~~authorization ~~any~~in ~~agreements~~February ~~providing~~2024 ~~for~~to restore the repurchase ofcapacity ~~the~~to ~~Company’s~~$100 ~~stock,~~million ~~subject~~and toremoved ~~such~~the ~~conditions,~~$25 onmillion ~~behalf~~quarterly ofcap ~~the~~on ~~company in~~ such ~~lots~~repurchases, ~~blocks~~and or(ii) ~~other~~March ~~amounts,~~2025 ~~from~~to ~~such~~increase ~~persons~~the orshare ~~entities,~~repurchase ~~from~~authorization ~~such~~to ~~sources~~$250,000,000. onAny repurchases made by the ~~open~~Company ~~market,~~during inQ1 ~~privately~~of ~~negotiated~~2025 ~~transactions,~~would orbe ~~otherwise,~~deducted onfrom ~~such~~the ~~terms~~reset ~~and~~capacity. ~~conditions,~~With ~~from~~the ~~time~~March to2025 ~~time~~increase, inthe ~~accordance~~Board ~~with~~authorized ~~applicable~~the ~~federal~~Corporation ~~and~~to ~~state~~appoint ~~regulations.~~a ~~The~~Pricing ~~Board~~Committee ~~further~~to ~~amended~~approve ~~this~~terms ~~authorization~~for inshare ~~February~~repurchases ~~2024~~pursuant to ~~restore~~a ~~the~~Rule ~~repurchase~~10b5-1 ~~capacity~~Plan to ~~$100~~provide ~~million~~for ~~and~~regular ~~removed~~quarterly ~~the~~share ~~$25~~repurchases, ~~million~~and ~~quarterly~~the ~~cap~~Pricing onCommittee ~~such~~approved ~~repurchases.~~the AtCorporation’s ~~the~~Rule ~~time~~10b5-1 ofPlan ~~the~~in ~~February~~May ~~2024~~2025. ~~authorization~~Under prior authorizations, the Company ~~had~~ repurchased shares with an ~~aggregated~~aggregate market value ~~(including fees)~~ of $5479.7 million. The aggregate market value of the shares of Common Stock ~~the~~that Company is authorized to acquire, from ~~both~~prior ~~the~~authorizations ~~August 2021~~ and ~~February~~the ~~2024~~March ~~authorizations,~~2025 authorization is not greater than $~~154~~329.7 million. As of December 31, ~~2024~~2025, the company ~~had~~has ~~repurchased~~spent 1$204.7 million to repurchase 3,~~713~~535,~~481~~849 shares of common stock at an average price of $57.89 per share. ofOf the $46204.517 ~~(including~~million ~~commissions~~of ~~calculated~~repurchases, at$45 ~~the~~million ~~average~~were ~~price~~acquired ~~per~~pursuant ~~share)~~to ~~for~~the aRule ~~total~~10b5-1 ~~amount of $79~~Plan.~~7 million.~~

Intellectual Property

Our intellectual property portfolio consists of issued and pending patents as well as trademarks for many of our technologies. In addition, we maintain a number of trade secrets that we endeavor to protect to ensure their continuing availability to us. Our technical expertise is vital to our growth strategy, and we believe they are a core competitive advantage. We have 4041 ~~registered~~issued patents and 1912 pending patents in the United States and 57 pending patents internationally. We have 6364 registered trademarks and 94 pending trademark applications in the United States, and 80 trademarks and 12 pending trademark applications internationally. We also currently offer 45 products for sale to our global customers.

pending trademark applications in the United States, and 159 trademarks and 18 pending trademark applications internationally. We also currently offer 45 products for sale to our global customers.

We rely upon a combination of nondisclosure agreements and other contractual arrangements, as well as copyright, trademark, patent, and trade secret laws to protect our proprietary information. We also enter into proprietary information and intellectual property agreements with employees, which require them to disclose any inventions created during employment, to convey such rights to inventions to us and to restrict any disclosure of proprietary information. While protecting trade secrets and proprietary information is important, we are not materially dependent on maintenance of any specific trade secret or group of trade secrets.

During the normal course of business, we perform research and development and technology consulting services and related products in support of our customers. Typically, these services do not depend on patent protection. In accordance with applicable law, our government contracts often provide government agencies certain data rights to our intellectual property. Government agencies may in turn provide to other contractors (including our competitors) the right to utilize our intellectual property. In addition, in the case of our work as a subcontractor, our prime contractor may also have certain rights to data, information and products we develop under the subcontract. At the same time, our government contracts often provide to us the right to utilize intellectual property owned by third parties.

Regulation

Our business is impacted by government procurement, anti-bribery, international trade, environmental, health and safety and other regulations and requirements. Below is a summary of some of the significant regulations that impact our business.

Government Procurement. The services we provide to the U.S. Government are subject to Federal Acquisition Regulation, or FAR, Defense Federal Acquisition Regulation, or DFARS, the Truthful Cost and Pricing Data Act, Cost Accounting Standards, or CAS, the Services Contract Act, the False Claims Act, export controls rules and U.S. Department of Defense security regulations, as well as government agency policies and many other laws and regulations. These laws and regulations affect how we transact business with our clients and, in some instances, impose additional costs on our business operations. A violation of specific laws and regulations could lead to fines, contract termination or suspension of future contracts. Generally, our government clients can also terminate, renegotiate, or modify any of their contracts with us at their convenience, and many of our government contracts are subject to renewal or extension annually.

On January 31, 2020, the U.S. Department of Defense (DOD) released the Cybersecurity Maturity Model Certification (“CMMC”) program as a framework to assess and enhance the cybersecurity posture of the Defense Industrial Base (“DIB”), particularly as it relates to controlled unclassified information (CUI) within the supply chain. CMMC is designed to ensure that contractors providing services to the U.S. DOD have implemented cybersecurity controls and processes to adequately protect information that resides on DIB systems and networks. An interim rule was issued on September 29, 2020, to amend the Defense Federal Acquisition Regulation Supplement (DFARS) by adding a new DFARS clause, 252.204-7021, which specifies CMMC requirements and enables the DOD to verify the protection of the Federal Contract Information (FCI) and CUI within the unclassified networks of DIB companies. DOD initiated an internal review and ultimately published draft “Version 2.0” of the CMMC program structure in November 2021.The DOD finalized the CNNC Program rule 32 CFR on October 15, 2024 and went into effect on December 16, 2024.

The CMMC is codified in two parts. The first, 32 CFR defines the requirements for CMMC and grants C3PAOs (CMMC 3rd Party Assessment Organizations) the ability to conduct CMMC assessments, and companies now have the ability to have official CMMC assessments conducted. The second is the 48 CFR. This rule will enforce the CMMC requirements in new and existing contracts and will allow the DOD to require a specific CMMC level in a solicitation or contract. This rule is currently in the adjudication/comment review process. The DOD has not yet provided details of timeliness for final

~~implementation~~export ofcontrols ~~this~~rules ~~rule~~and U.S. ~~The~~Department ~~expectation~~of isWar ~~for~~security ~~the~~regulations, ~~rule~~as towell beas ~~completed~~government inagency ~~mid-to-late~~policies ~~2025.~~and ~~Initially,~~many ~~the~~other ~~DFARS~~laws ~~252~~and regulations.~~204-7012~~ ~~clause~~These ~~required~~laws ~~companies~~and toregulations ~~self-attest~~affect ~~their~~how ~~compliance~~we transact business with ~~NIST~~our ~~800-171~~clients and, ~~but~~in ~~with~~some ~~the~~instances, ~~implementation~~impose additional costs on our business operations. A violation of ~~CMMC,~~specific ~~companies~~laws ~~will~~and beregulations ~~required~~could lead to befines, ~~officially~~contract ~~assessed~~termination byor asuspension ~~C3PAO~~of future contracts. Generally, our government clients can also terminate, renegotiate, or ~~DIBCAC~~modify ~~(Defense~~any ~~Industrial~~of ~~Base~~their ~~Cybersecurity~~contracts ~~Assessment~~with ~~Center)~~us ~~depending~~at ~~upon~~their ~~the~~convenience, ~~certification~~and ~~level~~many ~~pursued~~of our government contracts are subject to renewal or extension annually.

AsOn ~~part~~January of31, 2020, the ~~Defense~~U.S. ~~Contract~~Department ~~Management~~of ~~Agency~~War (~~DCMA~~DOW) ~~Joint~~released ~~Surveillance~~the ~~Voluntary~~Cybersecurity ~~Assessment~~Maturity Model Certification (~~JSVA~~“CMMC”) ~~Program,~~program ~~Parsons~~as ~~procured~~a anframework ~~authorized~~to ~~C3PAO,~~assess ~~that~~and ~~along~~enhance ~~with~~the cybersecurity posture of the ~~DIBCAC~~Defense Industrial Base (“DIB”), ~~conducted~~particularly aas ~~High~~it ~~Confidence~~relates to controlled unclassified information (CUI) within the supply chain. CMMC ~~Level~~is 2)designed ~~Assessment~~to ~~for~~ensure that contractors providing services to the ~~Parsons’~~U.S. ~~FedNet®~~DOW ~~Secure~~have ~~environment~~implemented incybersecurity ~~July~~controls ~~2023.~~and ~~Parsons~~processes isto ~~currently~~adequately ~~DFARS/NIST~~protect ~~800-171~~information ~~compliant,~~that resides on DIB systems and wenetworks. ~~anticipate~~An ~~that~~interim ~~Parsons~~rule ~~will~~was beissued ~~CMMC~~on ~~Level~~September 229, ~~certified~~2020, ~~once~~to amend the ~~CMMC~~Defense ~~program~~Federal ~~goes~~Acquisition ~~into~~Regulation ~~effect~~Supplement (DFARS) by adding a new DFARS clause, 252.204-7021, ~~All~~which ~~110~~specifies ~~control~~CMMC requirements and ~~320~~enables ~~control~~the ~~objectives~~DOW ~~with~~to ~~NIST~~verify ~~800-171~~the ~~were~~protection ~~deemed~~of ~~100%~~the ~~satisfied~~Federal asContract ~~per~~Information (FCI) and CUI within the ~~DIBCAC’s~~unclassified ~~SPRS~~networks ~~entry~~of DIB companies. DOW initiated an internal review and ~~official~~ultimately ~~report.~~published ~~Parsons~~draft ~~anticipates~~“Version ~~expanding~~2.0” of the CMMC ~~Level~~program 2structure ~~certification~~in toNovember ~~additional~~2021.The ~~networks~~DOW infinalized ~~2025~~the CNNC Program rule 32 CFR on October 15, 2024 and went into effect on December 16, 2024.

The CMMC is codified in two parts. The first, 32 CFR defines the requirements for CMMC and grants C3PAOs (CMMC 3rd Party Assessment Organizations) the ability to conduct CMMC assessments, and companies now have the ability to have official CMMC assessments conducted. The second is the 48 CFR. This rule enforces the CMMC requirements in new and existing contracts and allows the DOW to require a specific CMMC level in a solicitation or contract. The 48 CFR went into effect on November 15, 2025, beginning Phase 1 of the CMMC Program. Companies are now required to be officially assessed by a C3PAO for Level 2 certifications and, in certain circumstances, may be reassessed by DIBCCAC (Defense Industrial Base Cybersecurity Assessment Center).

As part of the Defense Contract Management Agency (DCMA) Joint Surveillance Voluntary Assessment (JSVA) Program, Parsons successfully passed a High Confidence (CMMC Level 2) Assessment in July 2023 for the FedNet® Secure closed environment. Due to a significant change in the assessment scope, FedNet® Secure required a recertification assessment on December 15, 2025 with an external C3PAO. Parsons established an internet-accessible secure environment designated for CUI program work, which was CMMC Level 2 certified on September 25, 2025. All 110 control requirements and 320 control objectives were deemed 100% satisfied within the C3PAO’s official report and the acquired certification.

Anti-Bribery and other regulations. We are subject to the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to foreign government officials for the purpose of obtaining or retaining business. The U.K. Bribery Act of 2010 prohibits both domestic and international bribery, as well as bribery across both private and public sectors. In addition, an organization that “fails to prevent bribery” committed by anyone associated with the organization can be charged under the U.K. Bribery Act unless the organization can establish the defense of having implemented “adequate procedures” to prevent bribery.

International Trade. We are subject to U.S. export control laws and regulations, including the International Traffic in Arms Regulations, or ITAR, and the Export Administration Regulations, or EAR, as well as U.S. economic and trade sanctions, including those administered and enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, or OFAC. To the extent we export items and provide services outside of the United States (or to certain parties in the United States), we must do so in compliance with these laws and regulations. These laws and regulations impose export licensing requirements, and we may not be successful in obtaining necessary licenses and other authorizations. Further, these laws and regulations restrict our ability to export items or provide services to certain countries and certain persons, including those that are the target of OFAC sanctions. Noncompliance with these or similar laws could lead to government investigations, penalties, reputational harm, and other negative consequences, and thereby could adversely affect our business and financial condition. Further, any change in these laws and regulations, or any shift in the approach to their enforcement or scope, or change to the countries, persons, or items targeted by such regulations, could potentially result in our decreased ability to export or sell items or services to existing or potential customers.

~~handling,~~these ~~transportation and disposal of solid waste and requires states to develop programs to ensure the safe disposal of solid waste. Under RCRA, persons may be liable at sites where the past~~ or ~~present~~similar ~~storage,~~laws ~~handling,~~could ~~treatment,~~lead ~~transportation, or disposal of any solid or hazardous waste may present an imminent and substantial endangerment~~ to ~~health~~government ~~or the environment. These persons can include the current owner or operator of property where disposal occurred~~investigations, ~~any persons who owned or operated the property when the disposal occurred~~penalties, ~~and~~reputational ~~any persons who disposed of~~harm, ~~or arranged for the transportation or disposal of, hazardous substances at a contaminated property. Liability under RCRA is strict~~ and, ~~under~~other ~~certain~~negative ~~circumstances~~consequences, ~~joint~~ and ~~several,~~thereby socould ~~that~~adversely ~~any~~affect ~~responsible~~our ~~party~~business ~~may be held liable for the entire cost of investigating~~ and ~~remediating~~financial ~~the release of hazardous substances~~condition. ~~Violations and liabilities with respect to environmental~~Further, ~~health~~any ~~and~~change ~~safety~~in these laws and regulations ~~could result in significant administrative~~, ~~civil,~~ or ~~criminal~~any ~~penalties,~~shift ~~remedial~~in ~~clean-ups,~~the ~~natural~~approach ~~resource~~to ~~damages,~~their ~~permit~~enforcement ~~modifications~~ or ~~revocations~~scope, ~~operational interruptions~~ or ~~shutdowns~~change ~~and~~to ~~other~~the ~~liabilities. Additionally~~countries, ~~Congress~~persons, ~~state~~or ~~legislatures,~~items ~~local~~targeted ~~governing~~by ~~bodies~~such ~~and federal and state agencies frequently revise environmental laws and~~ regulations, ~~and any changes~~ could potentially result in ~~more stringent or costly requirements for~~ our ~~operations.~~decreased ~~Our~~ability ~~costs related~~ to ~~complying~~export ~~with environmental, health and safety laws and regulations have not been material in the past and are not currently material to our total operating costs~~ or ~~cash~~sell ~~flows.~~items ~~However, if we have any violations of,~~ or ~~incur~~services ~~liabilities pursuant~~ to ~~these~~existing ~~laws~~ or ~~regulations~~potential ~~in the future, our financial condition and operating results could be adversely affected~~customers. In addition, in the unlikely event that we are required to fund remediation of a contaminated site, the statutory framework might allow us to pursue rights of contribution from other potentially responsible parties.

Environmental, Health and Safety. We are subject to federal, state and local laws and regulations relating to environmental, health and safety matters, including, among other things, the handling, transport and disposal of regulated substances and wastes, including hazardous and radioactive materials; contamination by regulated substances and wastes; the types, quantities and concentration of materials that can be released into the environment; the acquisition of a permit or other approval before conducting regulated activities; the maintenance of information about hazardous materials used or produced in operations and provision of such information to employees, state and local government authorities and the public; and employee health and safety. Our previous ownership and current and previous operation of real property may subject us to liability pursuant to these laws or regulations. Under the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, and related state laws, certain persons may be liable at sites where or from a release or threatened release of hazardous substances has occurred or is threatened. These persons can include the current owner or operator of property where a release or threatened release occurred, any persons who owned or operated the property when the release occurred, and any persons who disposed of, or arranged for the transportation or disposal of, hazardous substances at a contaminated property. Liability under CERCLA is strict, retroactive and, under certain circumstances, joint and several, so that any responsible party may be held liable for the entire cost of investigating and remediating the release of hazardous substances. The Resource Conservation and Recovery Act, or RCRA, regulates the generation, treatment, storage, handling, transportation and disposal of solid waste and requires states to develop programs to ensure the safe disposal of solid waste. Under RCRA, persons may be liable at sites where the past or present storage, handling, treatment, transportation, or disposal of any solid or hazardous waste may present an imminent and substantial endangerment to health or the environment. These persons can include the current owner or operator of property where disposal occurred, any persons who owned or operated the property when the disposal occurred, and any persons who disposed of, or arranged for the transportation or disposal of, hazardous substances at a contaminated property. Liability under RCRA is strict and, under certain circumstances, joint and several, so that any responsible party may be held liable for the entire cost of investigating and remediating the release of hazardous substances. Violations and liabilities with respect to environmental, health and safety laws and regulations could result in significant administrative, civil, or criminal penalties, remedial clean-ups, natural resource damages, permit modifications or revocations, operational interruptions or shutdowns and other liabilities. Additionally, Congress, state legislatures, local governing bodies and federal and state agencies frequently revise environmental laws and regulations, and any changes could result in more stringent or costly requirements for our operations. Our costs related to complying with environmental, health and safety laws and regulations have not been material in the past and are not currently material to our total operating costs or cash flows. However, if we have any violations of, or incur liabilities pursuant to these laws or regulations in the future, our financial condition and operating results could be adversely affected. In addition, in the unlikely event that we are required to fund remediation of a contaminated site, the statutory framework might allow us to pursue rights of contribution from other potentially responsible parties.

We maintain a compliance program designed to ensure compliance with the various regulations and requirements applicable to us. The compliance program, managed by our Chief Ethics and Compliance Counsel and overseen by our Chief Compliance Officer, includes an annual audit of performance with respect to our codes of ethics and business conduct and the adequacy of our compliance program, among other initiatives.

Executive Officers

Carey A. Smith, age 6162, was appointed Chair of the Board of Directors on January 18, 2022. She became the President and Chief Executive Officer on July 1, 2021 ~~and was appointed to the board of directors in December 2020~~. She was initially appointed as President and Chief Operating Officer in November 2019, Chief Operating Officer in November 2018 and led Parsons’ Federal Solutions business from November 2016. Before joining Parsons, Ms. Smith served in progressive leadership roles at Honeywell International Inc. (“Honeywell”) from 2011 to 2016, including President of the Defense and Space business unit. In total, Ms. Smith has 39 years of industry experience spanning the defense, intelligence and infrastructure markets. Ms. Smith serves on the Edison International board of directors, including on the Compensation and Executive Personnel and Safety and Operations Committees. She is a National Association of Corporate Directors (NACD) Directorship (NCADD.DC) and Cyber Governance Certified. Ms. Smith received an honorary doctorate degree from Ohio Northern University, a Master of Science degree in electrical engineering from Syracuse University and a bachelor-of-science in electrical engineering from Ohio Northern University. She received the GovCon Executive of the Year award in 2023 and Parsons received GovCon Company of the Year Award in 2024. Ms. Smith was selected to serve on our board of directors because of the perspective and experience that she brings as our CEO and due to her significant industry and operations experience.

~~Matthew~~President ~~Ofilos,~~and ~~age~~Chief ~~45,~~Operating ~~was~~Officer ~~appointed~~in November 2019, Chief ~~Financial~~Operating Officer ofin November 2018 and led Parsons’ ~~Corporation~~Federal ~~effective~~Solutions ~~July~~business ~~25,~~from ~~2022.~~November Mr2016. ~~Ofilos~~Before ~~previously~~joining Parsons, Ms. Smith served asin ~~the~~progressive ~~Parsons’~~leadership ~~executive~~roles ~~vice~~at ~~president~~Honeywell ofInternational ~~finance~~Inc. ~~and~~(“Honeywell”) ~~brings~~from ~~more~~2011 ~~than~~to ~~twenty~~2016, ~~years~~including President of ~~finance~~the ~~experience~~Defense and aSpace ~~proven~~business ~~track~~unit. ~~record~~In oftotal, ~~delivering~~Ms. ~~profitable~~Smith ~~growth~~has ~~and~~40 ~~building~~years ~~high-performance~~of ~~finance~~industry ~~teams~~experience tospanning the ~~role.~~defense, Asintelligence ~~executive~~and ~~vice~~infrastructure ~~president,~~markets. MrMs. ~~Ofilos~~Smith ~~led~~serves on the ~~company’s~~Edison ~~financial~~International ~~operations~~board of directors, including ~~project~~on ~~controls,~~the ~~financial~~Compensation ~~planning,~~and ~~accounting,~~Executive ~~treasury~~Personnel Committee, ~~and~~where ~~financial~~she ~~systems.~~is ~~Prior~~the tocommittee ~~joining~~chair, ~~Parsons~~and inthe ~~2021,~~Safety heand ~~led~~Operations ~~multi-billion-dollar~~Committee. ~~finance~~She ~~organizations,~~is ~~including~~a ~~those~~National ~~for~~Association ~~Amazon~~of ~~Web~~Corporate ~~Services~~Directors (~~AWS~~NACD) ~~Worldwide~~Directorship ~~Public~~(NCADD.DC) ~~Sector~~ and ~~Strategic~~Cyber ~~Industry~~Governance ~~businesses~~Certified. ~~Prior~~Ms. toSmith ~~AWS~~received an honorary doctorate from Ohio Northern University, hea ~~held~~master’s ~~roles~~degree in electrical engineering from Syracuse University and a bachelor-of-science ~~increasing~~in ~~responsibility~~electrical atengineering ~~Raytheon,~~from ~~concluding~~Ohio ~~his~~Northern ~~tenure~~University. asShe ~~CFO~~has ~~for~~numerous recognitions including the ~~Space~~GovCon ~~and~~Executive ~~Command~~of &the ~~Control~~Year ~~businesses~~award ~~for~~in ~~the~~2023. ~~Intelligence~~Additionally, ~~Information~~Parsons ~~and~~received ~~Services~~GovCon ~~segment~~Company of the Year Award in 2024. MrMs. ~~Ofilos~~Smith ~~holds~~was aselected ~~Master~~to serve on our board of ~~Business~~directors ~~Administration~~because ~~from~~of ~~Boston~~the ~~University~~deep industry and aoperations ~~Bachelor~~experience ofthat ~~Science~~she ~~from~~has ~~Babson~~as ~~College~~our CEO.

~~Michael~~Matthew ~~R. Kolloway~~Ofilos, age 6446, was appointed ~~General~~Chief ~~Counsel~~Financial ~~and~~Officer ~~Corporate Secretary~~ of Parsons Corporation ineffective ~~October~~July ~~2017~~25, ~~and later became our Chief Legal Officer in January 2019~~2022. ~~Before assuming the role of General Counsel and Corporate Secretary,~~ Mr. ~~Kolloway~~Ofilos previously served as ~~Deputy~~the ~~General~~Parsons’ ~~Counsel~~executive –vice ~~Americas~~president ~~from~~of ~~March~~finance ~~2016~~and ~~through~~brings ~~October~~more ~~2017.~~than ~~Before~~twenty-five ~~joining~~years ~~Parsons,~~of ~~Mr.~~finance ~~Kolloway~~experience ~~served~~and asa ~~Senior~~proven ~~Vice~~track ~~President~~record ~~and~~of ~~Assistant~~delivering ~~General~~profitable ~~Counsel~~growth ~~for Operations~~ and ~~Risk~~building ~~Management~~high-performance atfinance ~~AECOM~~teams ~~Technology~~to ~~Corporation,~~the ~~a publicly traded company~~role. ~~Prior~~As toexecutive ~~his~~vice ~~tenure at AECOM~~president, Mr. ~~Kolloway~~Ofilos ~~was~~led athe ~~partner~~company’s infinancial ~~the~~operations, ~~Chicago~~including ~~law~~project ~~firm~~controls, offinancial ~~Rock~~planning, ~~Fusco~~accounting, ~~& Garvey~~treasury, ~~Ltd~~ and afinancial ~~member~~systems. ofPrior ~~the~~to ~~Federal~~joining ~~Trial~~Parsons ~~Bar~~in ~~for~~2021, ~~the~~he ~~Northern~~led ~~District~~multi-billion-dollar offinance ~~Illinois.~~organizations, ~~Mr.~~including ~~Kolloway~~those ~~received~~for ~~his~~Amazon ~~Bachelor~~Web ofServices ~~Arts~~(AWS) ~~degree~~Worldwide ~~from~~Public ~~St.~~Sector ~~Norbert~~and ~~College,~~Strategic ~~his~~Industry ~~Juris~~businesses. ~~Doctor~~Prior ~~from~~to ~~the~~AWS, ~~University~~he ofheld ~~Illinois~~roles ~~College~~ of ~~Law~~increasing ~~and~~responsibility ~~completed~~at ~~the~~Raytheon, ~~General~~concluding ~~Counsel~~his ~~Program~~tenure atas ~~the~~CFO ~~Harvard~~for ~~University~~the ~~School~~Space ofand ~~Law.~~Command ~~Mr.~~& ~~Kolloway~~Control ~~served~~businesses onfor the ~~Board~~Intelligence, ofInformation ~~Directors~~and ~~for~~Services ~~MUSE/IQUE~~segment. ~~based in Pasadena, California~~Mr. HeOfilos isholds a ~~member~~Master of ~~the~~Business ~~Association~~Administration offrom ~~Corporate~~Boston ~~Counsel~~University and ~~the~~a ~~In-House~~Bachelor ~~Mentorship~~of ~~Committee~~Science ~~for~~from ~~the~~Babson ~~Charlotte Chapter~~College.

~~Susan~~Michael ~~Balaguer~~R. Kolloway, age 5565, was appointed asGeneral ~~Chief~~Counsel ~~Human~~and ~~Resources~~Corporate ~~Officer~~Secretary of Parsons Corporation ~~effective~~in ~~July~~October ~~16,~~2017 ~~2021.~~and ~~Ms.~~later ~~Balaguer~~became isour ~~responsible~~Chief ~~for~~Legal ~~all~~Officer ~~aspects~~in ofJanuary 2019. Before assuming the ~~human~~role ~~resources~~of ~~function,~~General ~~including~~Counsel ~~benefits,~~and ~~recruitment,~~Corporate ~~retention~~Secretary, ~~and~~Mr. ~~the~~Kolloway ~~employee~~served ~~lifecycle~~as ~~and~~Deputy ~~employee~~General ~~experience~~Counsel ~~for~~– ~~the~~Americas ~~company.~~from MsMarch 2016 through October 2017. ~~Balaguer~~Before ~~has~~joining ~~over~~Parsons, ~~thirty~~Mr. ~~years~~Kolloway ofserved ~~extensive~~as ~~experience~~Senior inVice ~~global~~President ~~human~~and ~~resources~~Assistant General Counsel for ~~public~~Operations and ~~private~~Risk ~~companies~~Management at AECOM Technology Corporation, ~~and~~a ~~over~~publicly ~~twelve~~traded ~~years~~company. ofPrior ~~experience~~to ~~with~~his ~~public~~tenure ~~and~~at ~~private~~AECOM, ~~mergers~~Mr. ~~and~~Kolloway ~~acquisitions~~was a partner in the Chicago law firm of Rock, ~~private~~Fusco ~~equity~~& Garvey, Ltd and ~~large-scale~~a ~~business~~member ~~integrations~~of the Federal Trial Bar for the Northern District of Illinois. ~~Before~~Mr. ~~joining~~Kolloway ~~Parsons~~received inhis ~~2021~~Bachelor of Arts degree from St. Norbert College, ~~she~~his ~~served~~Juris asDoctor from the ~~Chief~~University ~~Human~~of ~~Resources~~Illinois ~~Officer~~College of Law and completed the General Counsel Program at ~~Serco~~the ~~North~~Harvard ~~America~~University ~~and~~School ~~Engility~~of Law. ~~She~~Mr. ~~also~~Kolloway ~~previously~~ served ason the ~~senior~~Board ~~vice~~of ~~president~~Directors for MUSE/IQUE based in Pasadena, California. He is a member of HRthe ~~operations~~Association atof ~~CACI~~Corporate Counsel and, the In-House Mentorship Committee for ~~over~~the ~~twenty~~Charlotte ~~years,~~Chapter. ~~she~~Mr. ~~held~~Kolloway ~~progressive~~will HRretire ~~leadership~~during ~~positions~~the atsecond ~~Raytheon~~quarter of 2026. John T. Martinez will succeed Mr. Kolloway as Chief Legal Officer on February 16, 2026.

Susan Balaguer, age 56, was appointed as Chief Human Resources Officer of Parsons Corporation effective July 16, 2021. Ms. Balaguer is responsible for all aspects of the human resources function, including benefits, recruitment, retention, and the employee lifecycle and employee experience for the company. Ms. Balaguer has over thirty-five years of extensive experience in global human resources for public and private companies, and over a decade of experience with public and private mergers and acquisitions, private equity, and large-scale business integrations. Before joining Parsons in 2021, she served as the Chief Human Resources Officer at Serco North America and Engility. She also previously served as the senior vice president of HR operations at CACI and, for over twenty years, she held progressive HR leadership positions at Raytheon.

Available Information

We file annual, quarterly, and current reports and other information with the Securities and Exchange Commission (SEC). The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding registrants that file electronically with the SEC, including us. You may also access, free of charge, our reports filed with the SEC (for example, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K and any amendments to those forms) through the “Investors” portion of our website (www.parsons.com). Reports filed with or furnished to the SEC will be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Our website is included in this Annual Report as an inactive textual reference only. The information found on our website is not part of this or any other report filed with or furnished to the SEC.

SEC, including us. You may also access, free of charge, our reports filed with the SEC (for example, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K and any amendments to those forms) through the “Investors” portion of our website (www.parsons.com). Reports filed with or furnished to the SEC will be available as soon as reasonably practicable after they are filed with or furnished to the SEC. Our website is included in this Annual Report as an inactive textual reference only. The information found on our website is not part of this or any other report filed with or furnished to the SEC.

Item 1A. Risk Factors.

You should carefully consider the risks described below and the other information contained in this Annual Report, including our consolidated financial statements and the related notes, before making an investment decision. Our business, financial condition and results of operations could be materially and adversely affected by any of these risks or uncertainties. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.

Risk Factors Summary

The following is a summary of the principal risks that could adversely affect our business, operations and financial results.

Risk Relating to Our Business

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Government budgets, spending and priorities could change in a manner that adversely affects our future revenue and limits our growth prospects.

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The U.S. federal government and its agencies collectively are our largest single customer and, if our reputation or relationships with the U.S. federal government were harmed, our future revenues and cash flows would be adversely affected.

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Our failure to comply with a variety of complex procurement rules and regulations could result in our being liable for penalties, including termination of our government contracts, disqualification from bidding on future government contracts, and suspension or debarment from government contracting.

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A substantial portion of our business is subject to reviews, audits, and cost adjustments by government agencies, which, if resolved unfavorably to us, could adversely affect our profitability, cash flows or growth prospects.

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Our government contracts may be terminated by the government counterparty at any time and may contain other provisions permitting the government to discontinue contract performance, and if lost contracts are not replaced, our operating results may differ materially and adversely from those anticipated.

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Our revenue and growth prospects may be harmed if we or our employees are unable to obtain government granted eligibility or other qualifications, we and they need to perform services for our customers.

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We may make acquisitions, investments, joint ventures and divestitures in the future that involve numerous risks, which if realized, may adversely affect our business and our future results.

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Our acquisitions may not achieve their full intended benefits or may disrupt our plans and operations.

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We conduct a portion of our work through joint venture entities, some of which we do not have management control over, and with which we typically have joint and several liability with our joint venture partners.

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Our earnings and profitability may vary based on the mix of our contracts and may be adversely affected by our failure to accurately estimate and manage costs, time and resources.

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We use estimates in recognizing revenues and, if we make changes to estimates used in recognizing revenues, our profitability may be adversely affected.

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Systems that we develop, integrate, maintain, or otherwise support could experience security breaches which may damage our reputation with our clients and hinder future contract win rates.

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Services we provide and technologies we develop are designed to detect and monitor threats to our clients, the failure of which may lead to reputational harm or liability against us by our clients or third parties and may subject our staff to potential threats, risk of loss or harm.

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Internal system or service failures affecting us or our vendors, including as a result of cyber or other security threats, could disrupt our business and impair our ability to effectively provide our services to our clients, which could damage our reputation and have a material adverse effect on our business, financial condition and results of operations.

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Our business is subject to numerous legal and regulatory requirements and any violation of these requirements or any misconduct by our employees, subcontractors, agents, or business partners could harm our business and reputation.

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Our business is subject the impact of supply chain disruption and inflation risk upon the cost of providing materials and services to customers and upon the profitability for certain contracts.

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Our business may be impacted by the imposition of tariffs upon markets in which we conduct business.

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Goodwill and intangible assets represent a significant amount of our total assets, and any impairment of these assets would negatively impact our results of operations.

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We depend on our teaming arrangements and relationships with other contractors and subcontractors. If we are not able to maintain these relationships, or if these parties fail to satisfy their obligations to us or the customer, our revenues, profitability and growth prospects could be adversely affected.

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Many of our contracts require innovative design capabilities, are technologically complex or are dependent upon factors not wholly within our control. Failure to meet these obligations could adversely affect our business, financial condition or results of operations.

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Assertions by third parties of infringement, misappropriation or other violations by us of their intellectual property rights could result in significant costs and substantially harm our business, financial condition and operation results.

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We have operations in the Middle East, neighboring regions, and other regions across the globe, and these regions may experience turmoil, political upheaval and similar crises that may impact our current projects, future business, and financial stability.

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We may not realize the full value of our backlog, which may result in lower-than-expected revenue.

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Many of our field project sites and facilities are inherently dangerous workplaces. Failure to manage our field project sites and facilities safely could result in environmental disasters, employee deaths or injuries, reduced profitability, the loss of projects or clients and possible exposure to litigation.

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The impact of extreme weather events, including floods, hurricanes, droughts, and wildfires, including as a result of climate change or supply shortages, could have an adverse impact on our business and operations.

Our business, results of operations, financial condition, cash flows and stock price can be adversely affected by pandemics, epidemics, or other public health emergencies, such as the global COVID-19 pandemic and variants thereof. The pandemic resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, “shelter in place” and “stay at home” orders, travel restrictions, business curtailments, school closures, and other measures. While many of these restrictions have been removed or reduced, the spread of new variants or viruses may result in the imposition of additional restrictions. In addition, governments and central banks in several parts of the world have enacted, or may enact in the future, fiscal and monetary stimulus measures to counteract the impacts of any such emergency. The extent to which any emergency may impact our business will depend on future developments, which are highly uncertain and unpredictable, and the resultant financial impact cannot be estimated reasonably at this time but may materially adversely affect our ability to collect accounts receivables and our business, results of operations, financial condition and cash flows. Further, the economic impact of such events may cause extreme volatility in financial and other capital markets which may continue to adversely impact our stock price and our ability to access capital markets. Health emergencies may also have the effect of heightening many of

•

Risk Related to Our Common Stock

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Your ability to influence corporate matters may be limited because the ESOP beneficially owns a ~~majority~~significant amount of our stock and therefore our employees, voting the shares allocated to them under the ESOP, or the ESOP Trustee, who will have the right to vote shares for which no voting instructions are provided by employees, could have substantial control over us.

We are a “controlled company” within the meaning of the New York Stock Exchange listing standards and, as a result, qualify for exemptions from certain corporate governance requirements. You may not have the same protections afforded to stockholders of companies that are subject to such requirements.

Risks Related to Government Contracts

Government spending and priorities could change in a manner that adversely affects our future revenue and limits our growth prospects.

We derive, and expect to continue to derive, a significant portion of our revenue from contracts with government entities. As a result, our business depends upon continued government expenditures on defense, intelligence, civil and engineering programs for which we provide support, both among foreign governments and at federal, state and local levels domestically. These expenditures have not remained constant over time. Our business, prospects, financial condition or operating results could be materially harmed, among other causes, by the following:

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budgetary constraints, including mandated automatic spending cuts, affecting across-the-board government spending, or specific agencies in particular, and changes in available funding;

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a shift in expenditures away from agencies or programs that we support;

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reduced government outsourcing of functions that we are currently contracted to provide, including as a result of increased insourcing by various U.S. government agencies due to changes in the definition of “inherently governmental” work, including proposals to limit contractor access to sensitive or classified information and work assignments;

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efforts to improve efficiency and reduce costs affecting government programs;

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changes or delays in government programs that we support or the programs’ requirements;

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U.S. government shutdowns due to, among other reasons, a failure by elected officials to fund the government, such as the shutdowns which occurred during government fiscal years 2019 and 2014 and, to a lesser extent, government fiscal year 2018, and other potential delays in the appropriations process;

•

continuing resolutions (CRs) which are temporary spending bills that allow federal government operations to continue when final appropriations have not been enacted. CRs generally continue the level of funding from the prior year’s appropriations or the previously approved CR from the current year;

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U.S. government agencies awarding contracts on a technically acceptable/lowest cost basis in order to reduce expenditures;

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delays in the payment of our invoices by government payment offices;

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results of elections, including politicians who may have priorities that would reduce spending in areas in which we operate;

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an inability by the U.S. government to fund its operations as a result of a failure to increase the federal government’s debt ceiling, a credit downgrade of U.S. government obligations or for any other reason; and

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changes in the political climate and general economic conditions, including a slowdown of the economy or unstable economic conditions and responses to conditions, such as emergency spending, that reduce funds available for other government priorities.

Any disruption in the functioning of government agencies, including as a result of government closures and shutdowns, terrorism, war, natural disasters, destruction of government facilities, and other potential calamities could have a negative impact on our operations and cause us to lose revenue or incur additional costs due to, among other things, our inability to deploy our staff to client locations or facilities as a result of such disruptions.

In particular, with regard to our largest single customer, the U.S. federal government, budget deficits, the national debt and the prevailing economic condition, and actions taken to address them, could negatively affect the U.S. government expenditures on defense, intelligence, and civil programs for which we provide support. ~~Two~~One customer ~~sets~~set within the federal government exceeded 20% of Parsons’ revenue during ~~2024~~2025. ~~Parsons~~The ~~was~~volume ~~awarded~~of ~~the~~work ~~second~~awarded ~~option year~~ to ~~continue~~Parsons ~~our~~pursuant ~~contract with a confidential customer through February 2026. However, a related program performed by others has recently been paused, which impacts our ability~~ to ~~complete~~ the ~~scope~~second-year ofoption ~~our~~for ~~mission.~~a ~~The~~large ~~long-term~~confidential ~~continuation of our~~ contract iswas ~~contingent~~significantly onreduced ~~the~~during ~~related~~2025 ~~program~~and ~~restarting. If the project~~ is ~~halted,~~currently itwinding ~~would have a material adverse impact~~down.

Most government contracts are subject to the government’s budgetary approval process. Legislatures typically appropriate funds for a given program on a year-by-year basis, even though contract performance may take more than one year. In addition, public-supported financing such as state and local municipal bonds may be only partially raised to support existing infrastructure projects. As a result, at the beginning of a program, the related contract is only partially funded, and additional funding is normally committed only as appropriations are made in each fiscal year. These appropriations, and the timing of payment of appropriated amounts, may be influenced by, among other things, the state of the economy, competing priorities for appropriation, changes in administration or control of legislatures and the timing and amount of tax receipts and the overall level of government expenditures. Similarly, the impact of an economic downturn on state and local governments may make it more difficult for them to fund infrastructure projects. If appropriations are not made in subsequent years on our government contracts, then we will not realize all of our potential revenue and profit from that contract, and we may incur substantial labor costs without reimbursement.

Government funding with respect to our Critical Infrastructure services fluctuates over time and new or changing government policies and priorities may affect our Critical Infrastructure business and operations. Government spending for our Critical Infrastructure services may also depend on factors related to government demand, such as the condition of the existing infrastructure and buildings and the need for new or expanded infrastructure and buildings. Our government clients may face budget cuts or deficits that prohibit them from funding proposed and existing Critical Infrastructure projects.

These or other factors could cause our defense, intelligence, infrastructure or civil clients to decrease the number of new government contracts awarded generally and fail to award us new government contracts, reduce their purchases under our existing government contracts, exercise their right to terminate our government contracts or not exercise options to renew our government contracts, any of which could materially and adversely affect our business, financial condition and results of operations.

right to terminate our government contracts or not exercise options to renew our government contracts, any of which could materially and adversely affect our business, financial condition and results of operations.

The U.S. federal government and its agencies, including the military and intelligence community, collectively are our largest customer. In particular, it represents substantially all of the revenue of our Federal Solutions segment. Approximately 2319% and 1823% of accounts receivable as of December 31, ~~2024~~2025 and December 31, ~~2023~~2024, respectively were derived from contracts with the U.S. federal government and its agencies. Our reputation and relationships with various U.S. government entities and agencies, including the U.S. Department of ~~Defense~~War, the U.S. Department of State, the Federal Aviation Administration, the United States Intelligence Community, and other federal civilian customers are key factors in maintaining and growing these revenues and winning new bids for new business. Negative press reports or publicity, regardless of accuracy, could harm our reputation. If our reputation or relationships with government agencies were to be negatively affected, or if we are suspended or debarred from contracting with government agencies for any reason, the amount of business with government and other customers would decrease and our financial condition and results of operations could be adversely affected.

Our failure to comply with a variety of complex procurement rules and regulations could result in our being liable for penalties, including termination of our government contracts, disqualification from bidding on future government contracts and suspension or debarment from government contracting.

We must comply with various laws and regulations relating to the formation, administration, and performance of government contracts, which affect how we do business with our customers and may impose added costs on our business.

Many of our U.S. government contracts contain organizational conflict of interest, or OCI, clauses that may limit our ability to compete for or perform contracts or other types of services for particular customers. OCI arises when we engage in activities that may make us unable to render impartial assistance or advice to the U.S. government, impair our objectivity in performing contract work or provide us with an unfair competitive advantage. Existing OCI, and any OCI that may develop, could preclude our competition for or performance on a significant project or contract, which could limit our opportunities.

Some U.S. federal and state statutes and regulations provide for automatic debarment based on our actions, such as violations of the U.S. False Claims Act or the U.S. Foreign Corrupt Practices Act, or FCPA. The suspension or debarment in any particular case may be limited to the facility, contract or subsidiary involved in the violation or could be applied to our entire enterprise in severe circumstances. Even a narrow scope suspension or debarment could result in negative publicity that could adversely affect our ability to renew contracts and to secure new contracts, both with governments and private customers, which could materially and adversely affect our business, financial condition and results of operations.

Governments may adopt new contract rules and regulations or revise their procurement practices in a manner adverse to us at any time.

The government-related industries within which we do business continue to experience significant changes to business practices as a result of an increased focus on affordability, efficiencies and recovery of costs, among other items. Our existing and potential clients are similarly focused on increasing the productivity of their contractual arrangements. Moreover, government agencies may face restrictions or pressure regarding the type and amount of services that they may obtain from private contractors. Legislation, regulations and initiatives dealing with procurement reform, mitigation of potential OCIs, deterrence of fraud, and environmental responsibility or sustainability could have an adverse effect on us. Moreover, shifts in the buying practices of government agencies, such as increased usage of fixed price contracts, multiple award contracts and small business set-aside contracts, could have adverse effects on government contractors, including us. Any of these changes could impair our ability to obtain new

Moreover, shifts in the buying practices of government agencies, such as increased usage of fixed price contracts, multiple award contracts and small business set-aside contracts, could have adverse effects on government contractors, including us. Any of these changes could impair our ability to obtain new contracts or contract renewals. Any new contracting requirements or procurement methods could be costly or administratively difficult for us to implement and could adversely affect our business, financial condition and results of operations.

A substantial portion of our business is subject to reviews, audits and cost adjustments by government agencies, which, if resolved unfavorably to us, could adversely affect our profitability, cash flows or growth prospects.

Government agencies routinely audit and review a contractor’s performance on government contracts, indirect cost rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. They also review the adequacy of the contractor’s compliance with government standards for its business systems, which are defined as the contractor’s accounting, earned value management, estimating, materials management, property management and purchasing systems. A finding of significant control deficiencies in a contractor’s business systems or a finding of noncompliance with U.S. government Cost Accounting Standards, or CAS, can result in decremented billing rates to U.S. government customers until the control deficiencies are corrected and their remediation is accepted by the Defense Contract Management Agency. The agencies conducting these audits and reviews have come under increased scrutiny. As a result, audits and reviews have become more rigorous and the standards to which we are held are being more strictly interpreted which has increased the likelihood of an audit or review resulting in an adverse outcome.

If a review or investigation by a government agency identifies improper or illegal activities, we may be subject to civil or criminal penalties or administrative sanctions which could include the termination of contracts, forfeiture of profits, the triggering of price reduction clauses, suspension of payments, fines, and suspension or debarment from doing business with governmental agencies. We may suffer harm to our reputation if allegations of impropriety are made against us, which would impair our ability to win new contract awards or receive contract renewals. Penalties and sanctions are not uncommon in our industries. If we incur a material penalty or administrative sanction or otherwise suffer harm to our reputation, our profitability, cash position and future prospects could be adversely affected.

Government audits and reviews may conclude that our practices are not consistent with applicable laws and regulations and result in adjustments to contract costs and mandatory customer refunds. Such adjustments can be applied retroactively, which could result in significant customer refunds, and those refunds would negatively impact our revenue. Receipt of adverse audit findings or the failure to obtain an “approved” determination on our various business systems could significantly and adversely affect our business by, among other things, restricting our ability to bid on new contracts and, for those proposals under evaluation, diminishing our competitive position. A determination of noncompliance could also result in penalties and sanctions against us, including withholding of payments, suspension of payments and increased government scrutiny. Increased scrutiny could adversely impact our ability to perform on contracts, affect our ability to invoice for work performed, delay the receipt of timely payment on contracts, and weaken our ability to compete for new contracts with the government.

Government contracts often contain provisions and are subject to laws and regulations that provide government clients with rights and remedies not typically found in commercial contracts. These rights and remedies allow government clients, among other things, to:

•

terminate existing contracts, with short notice, for convenience as well as for default;

reduce orders under or otherwise modify contracts;

•

reduce orders under or otherwise modify contracts;

•

for contracts subject to the Truthful Cost and Pricing statute, reduce the contract price or cost where it was increased because a contractor or subcontractor furnished cost or pricing data during negotiations that was not complete, accurate and current;

•

for some contracts, (1) demand a refund, make a forward price adjustment or terminate a contract for default if a contractor provided inaccurate or incomplete data during the contract negotiation process and (2) reduce the contract price under triggering circumstances, including the revision of price lists or other documents upon which the contract award was predicated;

•

terminate our facility security clearances and thereby prevent us from receiving classified contracts and complete work on existing contracts;

•

cancel multi-year contracts and related task orders if funds for contract performance for any subsequent year become unavailable;

•

decline to exercise an option to renew a multi-year contract or issue task orders in connection with indefinite delivery/indefinite quantity contracts, or IDIQ contracts;

•

claim rights in solutions, systems and technology produced by us, appropriate such work-product for their continued use without continuing to contract for our services and disclose such work-product to third parties, including other government agencies and our competitors, which could harm our competitive position;

•

prohibit future procurement awards with a particular agency due to a finding of organizational conflicts of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors, or the existence of conflicting roles that might bias a contractor’s judgment;

•

subject the award of contracts to protest by competitors, which may require the contracting federal agency or department to suspend our performance pending the outcome of the protest and may also result in a requirement to resubmit offers for the contract or in the termination, reduction or modification of the awarded contract;

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suspend or debar us from doing business with the applicable government; and

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control or prohibit the export of our services.

Recent and potential future budget cuts, the impact of sequestration and recent efforts by the Office of Management and Budget to decrease federal awards for management support services, may cause agencies with which we currently have contracts to terminate, reduce the number of task orders under or fail to renew such contracts. If a government client were to unexpectedly terminate, cancel, or decline to exercise an option to renew with respect to one or more of our significant contracts, or suspend or debar us from doing business with such government, our revenue and operating results would be materially harmed.

A number of government programs require contractors to have certain kinds of government granted eligibility, such as security clearance credentials. Depending on the project, eligibility can be difficult and time-consuming to obtain. If we or our employees are unable to obtain or retain the necessary eligibility, including local ownership requirements, we may not be able to win new business, and our existing customers could terminate their contracts with us or decide not to renew them. To the extent we cannot obtain or maintain the required security clearances for our employees working on a particular contract, we may not derive the revenue or profit anticipated from such contract.

Risks Related to Our Operations and Markets

Our profitability could suffer if we are not able to timely and effectively utilize our employees or manage our cost structure.

The cost of providing our services, including the degree to which our employees are utilized, affects our profitability. The degree to which we are able to utilize our employees in a timely manner or at all is affected by a number of factors, including:

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our ability to transition employees from completed projects to new assignments and to hire, assimilate and deploy new employees;

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our ability to forecast demand for our services and to maintain and deploy headcount that is aligned with demand, including employees with the right mix of skills and experience to support our projects;

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our employees’ ability to obtain or retain necessary security clearances or required certifications;

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changes to or delays or cancellations of projects, as a result of governmental budgetary processes or otherwise;

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our ability to manage attrition;

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the impact of inflation upon the cost of services and materials provided to customers; and

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our need to devote time and resources to training, business development, and other non-chargeable activities.

If our employees are under-utilized, our profit margin and profitability could suffer. Additionally, if our employees are over-utilized, it could have a material adverse effect on employee morale and attrition, which would in turn have a material adverse impact on our business, financial condition or results of operations.

Our profitability is also affected by the extent to which we are able to effectively manage our overall cost structure for operating expenses, such as wages and benefits, real estate expenses, overhead and capital and other investment-related expenditures. If we are unable to effectively manage our costs and expenses and achieve efficiencies, our competitiveness and profitability may be adversely affected.

Our focus on new growth areas for our business entails risks, including those associated with new relationships, clients, talent needs, capabilities, service offerings and maintaining our collaborative culture and core values.

We are focused on growing our presence in our addressable markets by enhancing and optimizing our core operations, extending into opportunity-rich adjacent markets and acquiring and integrating transformative, disruptive technologies. These efforts entail inherent risks associated with innovation and competition from other participants in those areas, potential failure to help our clients respond to the challenges they face, our ability to comply with uncertain evolving legal standards applicable to some of our service offerings, including those in the cybersecurity area, and, with respect to potential international growth, risks associated with operating in foreign jurisdictions, such as compliance with applicable foreign and U.S. laws and regulations that may impose different and, occasionally, conflicting or contradictory requirements, and the economic, legal, and political conditions in the foreign jurisdictions in which we operate, as described in additional detail below. As we attempt to develop new relationships, clients, capabilities, and service offerings, these efforts could harm our results of operations due to, among other things, a diversion of our focus and resources and actual costs, opportunity costs of pursuing these opportunities in lieu of others and a failure to reach a profitable return on our investments in new technologies, capabilities, and businesses, including expenses on research and development investments, and these efforts could ultimately be unsuccessful. Additionally, the possibility exists that our competitors might develop new capabilities or service offerings that might cause our existing capabilities

and service offerings to become obsolete. If we fail in our new capabilities development efforts or our capabilities or services fail to achieve market acceptance more rapidly than our competitors, our ability to procure new contracts could be negatively impacted, which would negatively impact our results of operations and our financial condition.

In addition, our ability to grow our business by leveraging our operating model to deploy our people efficiently and effectively across our client base is largely dependent on our ability to maintain our collaborative culture. To the extent that we are unable to maintain our culture for any reason, including our effort to focus on new growth areas or acquire new businesses with different corporate cultures, we may be unable to grow our business. Any such failure could have a material adverse effect on our business, financial condition and results of operations.

With the growth of our U.S. and international operations, we are now providing client services and undertaking business development efforts in numerous and disparate geographic locations both domestically and internationally. Our ability to effectively serve our clients is dependent upon our ability to successfully leverage our operating model across all of these and any future locations, maintain effective management controls over all of our locations to ensure, among other things, compliance with applicable laws, rules and regulations, and instill our core values in all of our personnel at each of these and any future locations. Any inability to ensure any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

We have submitted claims and change orders to clients for work we performed beyond the initial scope of some of our contracts. If these clients do not approve these claims and change orders, our results of operations could be adversely impacted.

We typically have pending claims and change orders submitted under some of our contracts for payment of work performed beyond the initial contractual requirements for which we have already recorded revenue. Our client may dispute these change orders and claims, and we cannot guarantee that such claims will be approved in whole, in part, or at all. Often, these claims and disputes can be the subject of lengthy arbitration or litigation proceedings, and it is difficult to accurately predict when these claims and disputes will be fully resolved. We may also renegotiate contracts to address these additional costs. When these types of events occur, we have used working capital in projects to cover cost overruns. If our claims are not approved or resolved, our revenue may be reduced in future periods.

We design and develop technologically advanced and innovative products and services applied by our customers in a variety of environments. Problems and delays in development or delivery as a result of issues with respect to design, technology, licensing and patent rights, labor, learning curve assumptions or materials and components could prevent us from achieving contractual requirements. Our offerings cannot be tested and proven in all situations and are otherwise subject to unforeseen problems that could negatively affect revenue and profitability such as problems with governmental inaction, quality and workmanship, delivery of subcontractor components or services, unplanned degradation of product performance, unavailability of vendor materials and changes in the project scope requested by our clients. Among the factors that may adversely affect our business, financial condition or results of operations could be unforeseen costs and expenses not covered by insurance or indemnification from the customer, diversion of management focus in responding to unforeseen problems, loss of follow-on work, damage to our reputation and repayment to the customer of contract cost and fee payments we previously received.

We face aggressive competition that can impact our ability to obtain contracts and may affect our future revenues, profitability and growth prospects.

We expect that a majority of the business that we seek in the foreseeable future will be awarded through a competitive bidding process. For example, the U.S. government increasingly relies on IDIQ, GSA Schedule and other multi-award contracts, which has resulted in greater competition and increased pricing pressure. The competitive bidding process involves substantial costs and a number of risks, including significant cost and managerial time to prepare bids and proposals for contracts that may not be awarded to us, or that may be awarded but for which we do not receive meaningful task orders. For contracts awarded to us, we also face the risk of inaccurately estimating the resources and costs that will be required to fulfill any contract we win. Following contract award, we may encounter significant expense, delay, contract modifications or even contract loss as a result of our competitors protesting the award of contracts to us in competitive bidding. Any resulting loss or delay of startup and funding of work under protested contract awards may adversely affect our revenues and/or profitability. In addition, multi-award contracts require that we make sustained post-award efforts to obtain task orders under the contract. As a result, we may not be able to obtain these task orders or recognize revenues under these multi award contracts. Our failure to compete effectively in this procurement environment would adversely affect our business, financial condition and results of operations.

Projects may be awarded based solely upon price, but often take into account other factors, such as technical qualifications, proposed project team, schedule and past performance on similar projects. We compete with larger companies that have greater name recognition, financial resources and larger technical staffs and with smaller, more specialized companies that are able to concentrate their resources on particular areas. Additionally, we may compete with a government’s own capabilities. Technology-focused companies may also develop products and services that could disrupt our business or compete with our services. To remain competitive, we must consistently provide superior service, technology and performance on a cost-effective basis to our customers and there is no assurance that we will do so.

Changes in global tax laws or their interpretation could have a material impact on our effective income tax rate.

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Accordingly, our effective tax rate is impacted by changes in the mix ~~among~~of earnings in countries with differing tax rates and the changes in tax laws or their interpretation. Due to economic and political conditions, many tax jurisdictions, including the U.S., have called for comprehensive changes to fiscal and tax policies that could significantly impact how we are taxed on our domestic and foreign earnings. Such changes, if enacted into law, could increase our effective tax rate and have a material adverse impact on our financial condition and results of operations. For example, the Organization for Economic Co-Operation and Development ~~continues~~has todeveloped ~~advance~~a ~~proposals~~two-pillar ~~for~~framework ~~modernizing~~to reform and modernize international tax rules, including the release of global minimum tax standards referred to as the Pillar Two Model Rules (and also referred to as the Global Anti-Base Erosion (or “GloBE” rules). Several jurisdictions in which we operate have enacted these rules, ~~some~~and ofare ~~which became~~ effective for the Company’s ~~2024~~2025 fiscal year. The Company has considered the impact of the GloBE implementation in its provision for income taxes based on currently enacted legislation and continues to monitor the impacts of pending enactments and changes to the GloBE rules ~~implementation~~.

We are also subject ~~regularly~~ to regular examination by tax authorities. Although we believe that our positions are reasonable, they could be materially affected by many factors, including the final outcome of tax audits, introduction of new income tax legislation or regulations and related interpretations. We regularly assess the likelihood of an adverse outcome resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance as to the outcome of these examinations. If the ultimate determination of our taxes owed is for an amount in excess of amounts previously accrued, our financial condition and results operation could be materially affected.

Risks Related to Acquisitions and Joint Ventures

We may make acquisitions, investments, joint ventures and divestitures in the future that involve numerous risks, which if realized, may adversely affect our business and our future results.

We may make strategic acquisitions, engage in joint ventures or divest existing businesses, which could cause us to incur unforeseen expenses and have disruptive effects on our business and may not yield the benefits we expect. Our Credit Agreement imposes limitations on our ability to make other acquisitions. Subject to those limitations, we may selectively pursue additional strategic acquisitions, investments and joint ventures in the future. Any future acquisitions, investments and joint ventures may pose many risks that could adversely affect our reputation, operations or financial results, including:

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we may not retain key employees (including those with needed security clearances), customers and business partners of an acquired business in the future;

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we may fail to successfully integrate acquired businesses, such as failing to successfully integrate information technology and other control systems relating to the operations of any acquired business;

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acquisitions normally require a significant investment of time and resources, which may disrupt our business and distract our management from other important responsibilities;

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we may not be able to accurately estimate the financial effect of any acquisitions and investments on our business and we may not realize anticipated revenue opportunities, cost savings, or other synergies or benefits, or acquisitions may not result in improved operating performance; and

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we may assume known as well as unknown material liabilities, legal or regulatory risks that were not identified as part of our due diligence or for which we are unable to receive a purchase price adjustment or reimbursement through indemnification.

If any acquisitions, investments or joint ventures fail, perform poorly or their value is otherwise impaired for any reason, including contractions in credit markets and global economic conditions, our business, financial condition and results of operations could be adversely affected.

In addition, we may periodically divest or plan to divest businesses, including businesses that are no longer a part of our ongoing strategic plan. These divestitures similarly require significant investment of time and resources and may disrupt our business, distract management from other responsibilities and may result in losses on disposal or continued financial involvement in the divested business, including through indemnification, guarantee or other financial arrangements, for a period of time following the transaction, which could adversely affect our business, financial condition or results of operations. When we determine that we would like to divest a business, we may not be able to divest that business on attractive terms or at all.

1213% of our revenue during fiscal ~~2024~~2025, 1312% of our revenue during fiscal ~~2023~~2024 and 1213% of our revenue during fiscal ~~2022~~2023 was derived from our operations through consolidated joint ventures. In addition, 23.71% of our revenue during fiscal ~~2024~~2025, 32.97% of our revenue during fiscal ~~2023~~2024 and 53.19% of our revenues in fiscal ~~2022~~2023 related to services we provided to our unconsolidated joint ventures, where control resides with unaffiliated third parties, and 50.56% of our operating income during fiscal ~~2024~~2025, 16(5.65)% of our operating income during fiscal ~~2023~~2024 and 8(16.86)% of our operating income during fiscal ~~2022~~2023 was derived from equity in our unconsolidated joint ventures. As with most joint venture arrangements, differences in views among the joint venture participants may result in delayed decisions or disputes. We also cannot control the actions of our joint venture partners and we typically have joint and several liability with our joint venture partners under the applicable contracts for joint venture projects. These factors

could potentially adversely impact the business and operations of a joint venture and, in turn, our business and operations.

Operating through joint ventures in which we are a minority holder results in us having limited control over many decisions made with respect to projects and internal controls relating to projects. We generally do not have control of these unconsolidated joint ventures. These joint ventures may not be subject to the same requirements regarding internal controls and internal control over financial reporting that we follow. As a result, internal control problems may arise with respect to these joint ventures, which could have a material adverse effect on our business, financial condition and results of operations and could also affect our reputation in the industries we serve.

We participate in joint ventures where we provide guarantees and may be adversely impacted by the failure of such joint venture or its participants to fulfill their obligations.

We have investments in and commitments to joint ventures with unrelated parties. These joint ventures from time to time may borrow money to help finance their activities and, in some circumstances, we may be required to provide guarantees of the obligations of our affiliated entities. As of December 31, ~~2024~~2025, we had $~~176~~184.74 million of letters of credit and guarantees that relate to joint ventures. If these entities are not able to honor their obligations under the guarantees, we may be required to expend additional resources or suffer losses, which could be significant.

Our acquisitions may not achieve their full intended benefits or may disrupt our plans and operations.

We cannot assure you that we will be able to successfully integrate acquired companies with our business or otherwise realize the expected benefits of our acquisitions. For example, in the last several years we have made four large acquisitions. The combination of multiple independent businesses will be a complex, costly, and time-consuming process. Our business may be negatively impacted following acquisitions if we are unable to effectively manage our expanded operations. The integration process will require significant time and focus from our management team and may divert attention from the day-to-day operations of the combined business. Additionally, consummation of acquisitions could disrupt our current plans and operations, which could delay the achievement of our strategic objectives.

The expected synergies and operating efficiencies of the acquisitions may not be fully realized, which could result in increased costs and have a material adverse effect on our business, financial condition and results of operations. In addition, the overall integration of the businesses may result in material unanticipated problems, expenses, liabilities, competitive responses, loss of customer relationships and diversion of management’s attention, among other potential adverse consequences. The risks of combining our operations of the businesses include, among others:

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we may have underestimated the costs to integrate the information systems of acquired companies with ours;

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we may face difficulties in integrating employees, integrating different corporate cultures and in attracting and retaining key personnel; and

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we may face challenges in keeping existing contracts and customers.

Many of these risks will be outside of our control and any one of them could result in increased costs, decreases in the amount of expected revenue, and diversion of our management’s time and energy, which could have a material adverse effect on our business, financial condition and results of operations. In addition, even if our operations are integrated successfully, we may not realize the full benefits of the acquisitions, including the synergies, operating efficiencies, or sales or growth opportunities that are expected. These benefits may not be achieved within the anticipated time frame or at all.

We depend on our teaming arrangements and relationships with other contractors and subcontractors. If we are not able to maintain these relationships, of if these parties fail to satisfy their obligations to us or the customer, our revenues, profitability and growth prospects could be adversely affected.

We rely on teaming relationships with other prime contractors and subcontractors in order to submit bids for large procurements or other opportunities where we believe the combination of services, products, and solutions provided by us and our teammates will help us to win and perform the contract. Our future revenues and growth prospects could be adversely affected if the other contractors eliminate or reduce their contract relationships with us, of if our government clients terminate or reduce these other contractors’ programs, do not award them new contracts or refuse to pay under a contract. Companies that do not have access to government contracts or experience with our customers may perform services as our subcontractor that we cannot otherwise provide ourselves, and that exposure could enhance such companies’ prospects of securing a future position as a prime government contractor which could increase competition for future contracts and impair our ability to win these contracts.

Whenever our subcontractors fail to timely meet their contractual obligations, have regulatory compliance or other problems, our ability to fulfill our obligations as a prime contractor or higher tier subcontractor may be jeopardized. Subcontractor performance deficiencies under subcontracts with us as the prime contractor could lead to significant losses in future periods and could result in our termination for default as the prime contractor even though it was the subcontractor that failed to perform and not our personnel.

Risks Related to Estimates and Accounting

Our earnings and profitability may vary based on the mix of our contracts and may be adversely affected by our failure to accurately estimate and manage costs, time and resources.

We generate revenue under various types of contracts, which include time-and-materials, cost-plus and fixed-price contracts. Our earnings and profitability may vary materially depending on changes in the proportionate amount of revenues derived from each type of contract, the nature of services or solutions provided, as well as the achievement of performance objectives and the stage of performance at which the right to receive fees, particularly under incentive fee contracts, is finally determined. Cost-plus and time-and-materials contracts generally have lower profitability than fixed-price contracts. To varying degrees, each of our contract types involves some risk that we could underestimate the costs and resources necessary to fulfill the contract. Our profitability is adversely affected when we incur costs on cost-plus and time-and-materials contracts that we cannot bill to our customers. While fixed-price contracts allow us to benefit from cost savings, these contracts also increase our exposure to the risk of cost overruns.

Revenue derived from fixed-price contracts represented 4234% of our total revenue during fiscal ~~2024~~2025, 3342% of our total revenue during fiscal ~~2023~~2024, and 2733% of our total revenue during fiscal ~~2022~~2023. When making proposals on fixed-price contracts, we rely heavily on our estimates of costs, scope and timing for completing the associated projects, as well as assumptions regarding technical issues. In particular, contracts in our Critical Infrastructure segment are often won in a hard-bid process, in which clients primarily select the lowest price from a qualified bidder with the understanding that they will not pay above the bid amount, even if we perform work beyond the initial scope of our contract. In each case, our failure to accurately estimate costs, scope or the resources and technology needed to perform our contracts or to effectively manage and control our costs during the performance of work could result, and in some instances has resulted, in reduced profits or in losses. More generally, any increased or unexpected costs or unanticipated delays in connection with the performance of our contracts, including costs and delays caused by contractual disputes or other factors outside of our control, such as performance failures of our subcontractors, natural disasters or other force majeure events, could make our contracts less profitable than expected or unprofitable.

We use estimates in recognizing revenues and, if we make changes to estimates used in recognizing revenues, our profitability may be adversely affected.

A significant portion of our contract revenues are recognized using the cost-to-cost measure of progress method. This method requires estimates of total costs at completion or measurement of progress towards completion. Particularly due to the technical nature of the services being performed and the length of the contracts, this estimation process is complex and involves significant judgment. Adjustments to original estimates are often required as work progresses, experience is gained and additional information becomes known, even though the scope of the work required under the contract may not change. Any adjustment as a result of a change in estimate is recognized immediately. Changes in the underlying assumptions, circumstances or estimates could result in adjustments that may adversely affect our financial results of operations.

Goodwill and intangible assets represent a significant amount of our total assets and any impairment of these assets would negatively impact our results of operations.

As of December 31, ~~2024~~2025, we had goodwill and intangible assets of $2.45 billion. Goodwill is tested for impairment annually, or more often if indicators of potential impairment exist, and intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Examples of events or changes in circumstances indicating that the carrying value of goodwill may not be recoverable could include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, loss of key contracts, customer relationships, or personnel that affect current and future operating cash flows of the reporting unit. Any future impairment of goodwill or other intangible assets would have a negative impact on our profitability and financial results.

Risks Related to Technology Systems

Systems that we develop, integrate, maintain, or otherwise support could experience security breaches which may damage our reputation with our clients and hinder future contract win rates.

We develop, integrate, maintain, or otherwise support systems and provide services that include managing and protecting information involved in intelligence, national security and other sensitive or classified government functions. Our systems also store and process sensitive information for commercial clients. The cyber and security threats that our clients face have grown more frequent and sophisticated. A security breach in one of these systems could cause serious harm to our business, damage our reputation, and prevent us from being eligible for further work on sensitive systems for government or commercial clients. Work for non-government and commercial clients involving the protection of information systems or that store clients’ information could also be harmed due to associated security breaches. Damage to our reputation or limitations on our eligibility for additional work or any liability resulting from a security breach in one of the systems we develop, install, maintain, or otherwise support could have a material adverse effect on our business, financial condition and results of operations.

We help our clients detect, monitor and mitigate threats to their people, information and facilities. These threats may originate from nation states, terrorist or criminal actors, activist hackers or others who seek to harm our clients. There are many factors, some of which are beyond our control, which could result in the failure of our products to detect, monitor or mitigate these threats. Successful attacks on our clients may cause physical or reputational harm to us and our clients, as well as lead to liability claims against us by our clients or third parties, particularly if such attacks are a result of a failure or perceived failure of our services or technologies. In addition, as a result of our involvement with some clients or projects, our staff, information and facilities may be targeted by these or other threat actors and may be at risk for loss, or physical or reputational harm.

We create, implement, and maintain information technology and engineering systems and also use vendors to provide services that are often critical to our clients’ operations, some of which involve sensitive information and may be conducted in war zones or other hazardous environments, or include information whose confidentiality is protected by law. As a result, we may be subject to systems or service failures, not only resulting from our own failures or the failures of third-party service providers, natural disasters, power shortages, or terrorist attacks, but also from continuous exposure to cyber and other security threats, including computer viruses and malware, attacks by computer hackers or physical break-ins. There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as a cyber services contractor, we hold classified, controlled unclassified and other sensitive information. As a result, we and our vendors face a heightened risk of a security breach or disruption resulting from an attack by computer hackers, foreign governments, and cyber terrorists. While we put in place policies, controls and technologies to help detect and protect against such attacks, we cannot guarantee that future incidents will not occur, and if an incident does occur, we may not be able to successfully mitigate the impact. We have been the target of these types of attacks in the past and future attacks are likely to occur. If successful, these types of attacks on our network or other systems or service failures could have a material adverse effect on our business, financial condition and results of operations, due to, among other things, the loss of client or proprietary data, interruptions or delays in our clients’ businesses and damage to our reputation. In addition, the failure or disruption of our systems, communications, vendors, or utilities could cause us to interrupt or suspend our operations, which could have a material adverse effect on our business, financial condition and results of operations. In addition, if our employees inadvertently do not adhere to appropriate information security protocols, our protocols are inadequate, or our employees intentionally avoid these protocols, our or our clients’ sensitive information may be released thereby causing significant negative impacts to our reputation and exposing us or our clients to liability.

If our or our vendors’ systems, services or other applications have significant defects or errors, are successfully attacked by cyber and other security threats, suffer delivery delays or otherwise fail to meet our clients’ expectations, we may:

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lose revenue due to adverse client reaction;

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be required to provide additional services to a client at no charge;

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incur additional costs related to remediation, monitoring and increasing our cybersecurity;

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lose revenue due to the deployment of internal staff for remediation efforts instead of client assignments;

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receive negative publicity, which could damage our reputation and adversely affect our ability to attract or retain clients;

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be unable to successfully market services that are reliant on the creation and maintaining of secure information technology systems to government and commercial clients;

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suffer claims by clients or impacted third parties for substantial damages, particularly as a result of any successful network or systems breach and exfiltration of client and/or third-party information; or

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incur significant costs, including fines from government regulators related to complying with applicable federal or state law, including laws pertaining to the security and protection of personal information.

In addition to any costs resulting from contract performance or required corrective action, these failures may result in increased costs or loss of revenue if they result in clients postponing subsequently scheduled work or canceling or failing to renew contracts.

The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means. Additionally, some cyber technologies and techniques that we utilize or develop may raise potential liabilities related to legal compliance, intellectual property and civil liberties, including privacy concerns, which may not be fully insured or indemnified. We may not be able to obtain and maintain insurance coverage on reasonable terms or in sufficient amounts to cover one or more large claims, or the insurer may disclaim coverage as to some types of future claims. The successful assertion of any large claim against us could seriously harm our business. Even if not successful, these claims could result in significant legal and other costs, may be a distraction to our management, and may harm our client relationships. In some new business areas, we may not be able to obtain sufficient insurance and may decide not to accept or solicit business in these areas.

As a contractor supporting defense and national security clients, we are also subject to regulatory compliance requirements under the Federal Acquisition Regulations, the Defense Federal Acquisition Regulation Supplement and other federal regulations requiring that our networks and information technology systems comply with the security and privacy controls in National Institute of Standards and Technology Special Publications and similar documents. To the extent that we do not comply with the applicable security and control requirements, whether imposed by regulation or contract, unauthorized access or disclosure of sensitive information could potentially result in a contract termination that has a material adverse effect on our business, financial condition and results of operations and reputational harm.

Risk Related to Legal Matters and Insurance

Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as well as disrupt the management of our business operations.

We maintain insurance coverage from third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain specific insurance coverage limits. If any of our third-party insurers fail, suddenly cancel our coverage or otherwise are unable to provide us with adequate insurance coverage, then our overall risk exposure and our operational expenses would increase, and the management of our business operations would be disrupted. In addition, there can be no assurance that any of our existing insurance coverage will be renewable upon the expiration of the coverage period or that future coverage will be affordable at the required limits.

Adverse judgments or settlements in legal disputes could result in materially adverse monetary damages or injunctive relief and damage our reputation.

We are subject to, and may become a party to, a variety of litigation or other claims and suits that arise from time to time in the ordinary course of our business. For example, our performance under U.S. government contracts and compliance with the terms of those contracts and applicable laws and regulations are subject to continuous audit, review, and investigation by the U.S. government which may include such investigative techniques as subpoenas or civil investigative demands.

The results of litigation and other legal proceedings, including the claims described under “Business—Legal Proceedings”, are inherently uncertain and adverse judgments or settlements in some or all of these legal disputes may result in materially adverse monetary damages or injunctive relief against us. Additionally, our insurance policies may not protect us against potential liability due to various exclusions in the policies and self-insured retention amounts. Partially or completely uninsured claims, if successful and of significant magnitude, could have a material adverse effect on our business, financial condition and results of operations. Furthermore, any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or obtain adequate insurance in the future.

Our business is subject to numerous legal and regulatory requirements and any violation of these requirements or any misconduct by our employees, subcontractors, agents or business partners could harm our business and reputation.

In addition to government contract procurement laws and regulations, we are subject to numerous other federal, state and foreign legal requirements on matters as varied as data privacy and protection, employment and labor relations, immigration, taxation, anti-corruption, import/export controls, trade restrictions, internal and disclosure control obligations, securities regulation and anti-competition. Compliance with complex and changing legal requirements is costly, time-consuming and requires significant resources. Violations of one or more of these requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation. Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to compete for work and allegations by our customers that we have not performed our contractual obligations.

Misconduct by our employees, subcontractors, agents or business partners could subject us to fines and penalties, restitution or other damages, loss of security clearance, loss of current and future customer contracts and suspension or debarment from contracting with federal, state or local government agencies, any of which could adversely affect our business, financial condition and results of operations. Such misconduct could include fraud or other improper activities such as falsifying time or other records, failure to comply with our policies and procedures or violations of applicable laws and regulations.

Our services and operations sometimes involve handling or disposing of hazardous substances or dangerous materials, and we are subject to environmental requirements and risks which could result in significant costs, liabilities and obligations.

Our operations are subject to stringent and complex federal, state and local laws and regulations governing the discharge of materials into the environment, the health and safety aspects of our operations, or otherwise relating to environmental protection. Some of our services and operations involve the handling or disposal of hazardous substances or dangerous materials, including explosive, chemical, biological, radiological or nuclear materials. These activities generally subject us to extensive foreign, federal, state and local environmental protection and health and safety laws and regulations, which, among other things, require us to incur costs to comply with these regulations and could impose liability on us for handling or disposing of hazardous substances or dangerous materials. Numerous governmental authorities, such as the U.S. Environmental Protection Agency, or the EPA, and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them. Such enforcement actions often involve difficult and costly compliance measures or corrective actions. Furthermore, failure to comply with these environmental protection and health and safety laws and regulations could result in civil, criminal, regulatory, administrative or contractual sanctions, including fines, penalties or suspension or debarment from contracting with the U.S. government, and could also result in investigations, the imposition of corrective action or remedial obligations, and the issuance of orders limiting or prohibiting some or all of our operations. In certain instances, citizen groups also have the ability to bring legal proceedings against us if we are not in compliance with environmental laws. In addition, claims for damages to persons or property, including natural resources, may result from the environmental, health and safety impacts of our operations. We, like other businesses, can never completely eliminate the risk of contamination or injury from certain materials that we use in our business. If we have any violations of, or incur liabilities pursuant to, these laws or regulations, it may result in a material adverse effect on our business, financial condition or results of operations.

Certain environmental laws impose strict liability (i.e., no showing of “fault” is required) as well as joint and several liability for costs required to remediate and restore sites where hazardous substances, hydrocarbons or solid wastes have been stored or released. We may be required to remediate contaminated properties currently or formerly owned or operated by us or facilities of third parties that

received waste generated by our operations, regardless of whether such contamination resulted from the conduct of others or from the consequences of our own actions that were in compliance with all applicable laws at the time those actions were taken.

We have limited, and potentially insufficient, insurance coverage for expenses and losses that may arise in connection with environmental contamination. Finally, in connection with certain acquisitions, we could acquire, or be required to provide indemnification against, environmental liabilities that could expose us to material losses.

Our failure to meet contractual schedule requirements, meet a required performance standard, meet our internal contractual performance projections or otherwise perform adequately on a project could adversely affect our business, financial condition or results of operations.

Under some of our contracts, we can incur liquidated or other damages if we do not achieve project completion by a scheduled date. In addition, our costs generally increase from schedule delays and/or could exceed our projections for a particular project. Project performance can be affected by a number of factors beyond our control, including unavoidable delays from governmental inaction, public opposition, inability to obtain financing, weather conditions, unavailability of vendor materials, changes in the project scope of services requested by our clients, industrial accidents, environmental hazards, labor disruptions and other factors. Any defects or errors, or failures to meet our clients’ expectations, in our projects or services could result in claims for damages against us and could adversely affect our reputation. Material performance problems for existing and future contracts could cause actual results of operations to differ from those anticipated by us and also could cause us to suffer damage to our reputation within our industries and client base.

Failure to adequately protect, maintain, or enforce our rights in our intellectual property may adversely limit our competitive position.

We rely upon a combination of nondisclosure agreements and other contractual arrangements, as well as copyright, trademark, patent and trade secret laws to protect our proprietary information. We also enter into proprietary information and intellectual property agreements with employees, which require them to disclose any inventions created during employment, to convey such rights to inventions to us, and to restrict any disclosure of proprietary information. Trade secrets are generally difficult to protect. Although our employees are subject to confidentiality obligations, this protection may be inadequate to deter or prevent misappropriation of our confidential information and/or the infringement of our patents and copyrights. Further, we may be unable to detect unauthorized use of our intellectual property or otherwise take appropriate steps to enforce our rights. Failure to adequately protect, maintain, or enforce our intellectual property rights may adversely limit our competitive position.

In recent years, there has been significant litigation involving intellectual property rights in technology industries. We may face from time to time, allegations that we or a supplier or customer have violated the rights of third parties, including patent, trademark, and other intellectual property rights. If, with respect to any claim against us for violation of third-party intellectual property rights, we are unable to prevail in the litigation or retain or obtain sufficient rights or develop non-infringing intellectual property or otherwise alter our business practices on a timely or cost-efficient basis, our business, financial condition or results of operations may be adversely affected.

Any infringement, misappropriation or related claims, whether or not meritorious, are time consuming, divert technical and management personnel, and are costly to resolve. As a result of any such dispute, we may have to develop non-infringing technology, pay damages, enter into royalty or licensing agreements, cease utilizing products or services, or take other actions to resolve the claims. These actions, if required, may be costly or unavailable on terms acceptable to us.

Risks Related to International Operations

Our operations outside the United States expose us to legal, political and economic risks in different countries as well as currency exchange rate fluctuations that could harm our business and financial results.

Revenue attributable to our services provided outside of the United States as a percentage of our total revenue was 2226.61% in ~~2024~~2025, 2422.46% in ~~2023~~2024 and 24.94% in ~~2022~~2023. There are risks inherent in doing business internationally, including:

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imposition of governmental controls and changes in laws, regulations or policies;

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political and economic instability and turmoil internationally, including countries in the Middle East;

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civil unrest, acts of terrorism, force majeure, war, or other armed conflict, including the ongoing war and unrest in Israel, which has the potential to impact other countries in the Middle East;

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greater physical security risks;

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changes in U.S. and other national government trade policies affecting the markets for our services;

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changes in regulatory practices, tariffs and taxes;

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potential non-compliance with a wide variety of laws and regulations, including anti-corruption, U.S. export controls and economic and trade sanctions, and anti-boycott laws and similar non-U.S. laws and regulations;

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changes in labor conditions;

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logistical and communication challenges;

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currency exchange rate fluctuations, devaluations and other conversion restrictions; and

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health and safety concerns, including those related to the COVID-19 pandemic, variants and other potential epidemics.

Any of these factors could have a material adverse effect on our business, financial condition or results of operations.

We have operations in the Middle East, neighboring regions, and other regions across the globe, and these regions may experience turmoil, political upheaval or similar crises that may impact our current projects, future business and financial stability.

We currently have operations in the Middle East, including in Oman, Qatar, Saudi Arabia, and the United Arab Emirates. This part of the world often has conflicts, such as the current Israel-Hamas situation. Further, we may undertake work in other countries that may experience turmoil, political upheaval, or other similar crises. This uncertainty may affect our ability to continue our projects in these regions due to lack of resources, local support, and safety for our workers. If we are unable to finish these projects, it is likely that our finances will be impacted. Furthermore, we may experience liability regarding our employees and their safety and security in these locations. We also may incur material costs to maintain the safety of our personnel. Despite these precautions, the safety of our personnel in these locations may continue to be at risk. Acts of terrorism and threats of armed conflicts in or around various areas in which we operate could limit or disrupt markets and our operations, including disruptions resulting from the evacuation of personnel, cancellation of contracts, or the loss of key employees, contractors or assets.

We operate in many different jurisdictions, and we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws.

The FCPA and similar worldwide anti-corruption laws, including the U.K. Bribery Act of 2010, generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. Our internal policies mandate compliance with these anti-corruption laws, including the requirements to maintain accurate information and internal controls which may fall within the purview of the FCPA, its books and records provisions or its anti-bribery provisions. We operate in many parts of the world that have experienced governmental corruption to some degree; and, in some circumstances, strict compliance with anticorruption laws may conflict with local customs and practices. Despite our training and compliance programs, we cannot be certain that our internal control policies and procedures always will protect us from reckless or criminal acts committed by our employees or agents. In addition, from time to time, government investigations of corruption in industries we operate in may affect us and our peers. Violations of these laws, or allegations of such violations, could disrupt our business and result in a material adverse effect on our business, financial condition or results of operations.

Risks Related to Debt and Backlog

We may not realize the full value of our backlog, which may result in lower-than-expected revenue.

As of December 31, ~~2024~~2025, our total backlog was $8.97 billion, of which $56.94 billion was funded. Our backlog includes orders under contracts that can extend for several years. We historically have not realized all of the revenue included in our total backlog, and we may not realize all of the revenue included in our total backlog in the future. There is a somewhat higher degree of risk in this regard with respect to unfunded backlog and backlog related to unexercised options years and IDIQ contracts for which task orders have not yet been issued. In addition, there can be no assurance that our backlog will result in actual revenue in any particular period. This is because the actual receipt, timing and amount of revenue under contracts included in backlog are subject to various contingencies, including congressional appropriations, many of which are beyond our control. In particular, delays in the completion of the U.S. government’s budgeting process and the use of continuing resolutions could adversely affect our ability to timely recognize revenue under our contracts included in backlog. Furthermore, the actual receipt of revenue from contracts included in backlog may never occur or may be delayed because: a program schedule could change or the program could be canceled; a contract’s funding or scope could be reduced, modified, delayed or terminated early, including as a result of a lack of appropriated funds or as a result of cost cutting initiatives and other efforts to reduce government spending; in the case of funded backlog, the period of performance for the contract has expired; in the case of unfunded backlog, funding may not be available; in the case of backlog related to unexercised option years, the contract option is not yet exercised or may ever be exercised; and, in the case of backlog related to IDIQ contracts where task orders have not been issued, no further task orders may be issued. In addition, headcount growth is the primary means by which we are able to achieve revenue growth. Any inability to hire additional appropriately qualified personnel or failure to timely and effectively deploy such additional personnel against funded backlog could negatively affect our ability to grow our revenue. We may also not recognize revenue on funded backlog due to, among other reasons, the tardy submissions of invoices by our subcontractors and the expiration of the relevant appropriated funding in accordance with a predetermined expiration date such as the end of the U.S. government’s fiscal year. The amount of our funded backlog is also subject to change, due to, among other factors: changes in appropriations that reflect changes in government policies or priorities resulting from various military, political, economic or international developments; changes in the use of government contracting vehicles, and the provisions therein used to procure our services; and adjustments to the scope of services under, or cancellation of contracts, by the applicable government at any time. Furthermore, even if our backlog results in revenue, the contracts may not be profitable.

If we cannot collect our receivables or if payment is delayed, our business may be adversely affected by our inability to generate cash flow, provide working capital or continue our business operations.

As of December 31, ~~2024~~2025, our accounts receivable, net was $1.1 billion We depend on the timely collection of our receivables to generate cash flow, provide working capital and continue our business operations. If our customers fail to pay or delay the payment of invoices for any reason, our business and financial condition may be materially and adversely affected. Our customers have in the past and may in the future delay or fail to pay invoices for a number of reasons, including lack of appropriated funds, lack of an approved budget or as a result of audit findings by government regulatory agencies. We also experience longer payment cycles in the Middle East. We cannot assure you that we will collect all our accounts receivable in excess of our allowance for doubtful accounts in a timely manner, which would impact our cash flows.

The agreements governing our debt contain a number of restrictive covenants which may limit our ability to finance future operations, acquisitions or capital needs or engage in other business activities that may be in our interest.

As of December 31, ~~2024~~2025, our total indebtedness was approximately $1.2 billion. Our Credit Agreement and the agreements governing our ~~Delayed Draw~~ Term Loan and Convertible Notes contain a number of covenants that impose operating and other restrictions on us and our subsidiaries. Such restrictions affect or will affect, and in many respects limit or prohibit our ability and the ability of our subsidiaries to, among other things:

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incur additional indebtedness;

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create liens;

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pay dividends and make other distributions in respect of our equity securities;

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redeem our equity securities;

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make loans, advances, investments or other restricted payments;

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sell assets or receivables;

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engage in certain business activities;

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amend our ESOP’s plan documents;

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enter into transactions with affiliates; and

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effect mergers or consolidations.

In addition, our Credit Agreement also requires us to comply with certain financial ratio covenants, including a debt leverage ratio and an interest charge coverage ratio. Our ability to comply with these ratios may be affected by events beyond our control.

These restrictions could limit our ability to plan for or react to market or economic conditions or meet capital needs or otherwise restrict our activities or business plans and could adversely affect our ability to finance our operations, acquisitions, investments or strategic alliances or other capital needs or to engage in other business activities that would be in our interest.

A breach of any of these covenants or our inability to comply with the required financial ratios could result in a default under our debt instruments. If an event of default occurs, our creditors could elect to:

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declare all borrowings outstanding, together with accrued and unpaid interest, to be immediately due and payable;

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require us to apply all of our available cash to repay the borrowings; or

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prevent us from making debt service payments on some of our borrowings.

If we were unable to repay or otherwise refinance these borrowings when due, the lenders under our Credit Agreement could demand payment from subsidiary guarantors, as provided under our Credit Agreement. These guarantors constitute substantially all of our domestic, wholly owned subsidiaries’ assets.

~~Prior~~The toParsons' ~~our initial public offering, we were 100% owned by the~~ ESOP, ~~which~~ is a qualified retirement plan ~~that is intended to be qualified~~ under the Internal Revenue Code. If the ESOP failed to meet the requirements of a tax qualified retirement plan, we could be subject to substantial penalties.

The ESOP is a defined contribution retirement plan subject to the requirements of the Internal Revenue Code (Code) and the Employment Retirement Income Security Act (ERISA). The ESOP received a determination letter, dated January 31, 2012, from the Internal Revenue Service (IRS) that it meets the requirements of a tax qualified retirement plan in form, and we endeavor to maintain and administer the ESOP in compliance with all requirements of the Code and ERISA. However, the rules regarding tax qualified plans, and especially ESOPs, are complex and change frequently. Accordingly, it is possible that the ESOP may not have been administered in full compliance with all applicable rules under the Code or ERISA at all times.

If the ESOP were determined not to be in material compliance with the Code or ERISA, then the ESOP could lose its tax qualified status and we could be subject to substantial penalties under the Code and ERISA which could have a material adverse effect on our business, financial condition or results of operations. ~~Additionally, loss of the ESOP’s tax-qualified status would adversely impact our prior treatment as an S Corporation.~~

Risks Related to our Employees

A failure to attract, train and retain skilled employees and our senior management team would adversely affect our ability to execute our strategy and may disrupt our operations.

Our business relies heavily upon the expertise and services of our employees. Our continued success depends on our ability to recruit and retain highly-trained and skilled engineering, technical and professional personnel. Competition for skilled personnel is intense and competitors aggressively recruit key employees. In addition, many U.S. government programs require contractors to have security clearances. Depending on the level of required clearance, security clearances can be difficult and time-consuming to obtain and personnel with security clearances are in great demand. Particularly in highly specialized areas, it has become more difficult to retain employees and meet all of our needs for employees in a timely manner, which may affect our growth in the current and future fiscal years. Although we intend to continue to devote significant resources to recruiting, training and retaining qualified employees, we may not be able to attract, effectively train and retain these employees. Any failure to do so could impair our ability to efficiently perform our contractual obligations, timely meet our customers’ needs and ultimately win new business, all of which could adversely affect our business, financial condition and results of operations.

We believe that our success also depends on the continued employment of a highly qualified and experienced senior management team and that team’s ability to retain existing business and generate new business. The loss of key personnel in critical functions could lead to lack of business continuity or disruptions in our business until we are able to hire and train replacement personnel.

We may lose one or more members of our senior management team or fail to develop new leaders, which could cause a disruption in the management of our business.

We believe that the future success of our business and our ability to operate profitably depends on the continued contributions of the members of our senior management and the continued development of new members of senior management. We rely on our senior management to generate business and execute programs successfully. In addition, the relationships and reputation that many members of our senior management team have established and maintain with our clients are important to our business and our ability to identify new business opportunities. We do not have any employment agreements

~~and our ability to identify new business opportunities. We do not have any employment agreements~~ providing for a specific term of employment with any members of our senior management. The loss of any member of our senior management or our failure to continue to develop new members could impair our ability to identify and secure new contracts, to maintain good client relations, and to otherwise manage our business, and could have a material adverse effect on our business, financial condition and results of operations.

Negotiations with labor unions and possible work actions could divert management attention and disrupt operations. In addition, new collective bargaining agreements or amendments to existing agreements could increase our labor costs and operating expenses.

We are signatory to approximately ~~fourteen~~10 active union collective bargaining agreements as of December 31, ~~2024~~2025 and employ more than ~~300~~400 employees represented by unions. The outcome of any future negotiations relating to union representation or collective bargaining agreements for these or other employees in the future may not be favorable to us. We may reach agreements in collective bargaining that increase our operating expenses and lower our net income as a result of higher wages or benefit expenses. In addition, negotiations with unions could divert management attention and disrupt operations, which may adversely affect our results of operations. If we are unable to negotiate acceptable collective bargaining agreements, we may have to address the threat of union-initiated work actions, including strikes. Depending on the nature of the threat or the type and duration of any work action, these actions could disrupt our operations and adversely affect our operating results.

Our field project sites and facilities, particularly in our Critical Infrastructure business, often put our employees and others in close proximity with mechanized equipment, moving vehicles, chemical and manufacturing processes, and highly regulated materials. On some field project sites and in some of our facilities, we may be responsible for safety and, accordingly, we have an obligation to implement effective safety procedures. If these procedures are not appropriately implemented or are ineffective, our employees could be injured or killed, and we could be exposed to possible litigation. As a result, our failure to maintain adequate safety standards and equipment could result in reduced profitability or the loss of projects or clients and could have a material adverse impact on our business, financial condition, and results of operations.

Risk Related to Our Common Stock

If we are unable to maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control. The process of designing, implementing and testing the internal control over financial reporting required to comply with this obligation is time-consuming, costly and complicated. If we identify material weaknesses in our internal control over financial reporting, or if we are unable to comply in a timely manner with the management certification requirements of Section 404 of the Sarbanes-Oxley Act as to the effectiveness of our internal control over financial reporting or to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be negatively affected, and we could become subject to investigations by our stock exchange, the SEC or other regulatory authorities, which could require additional financial and management resources.

If our stock price fluctuates, you could lose a significant part of your investment.

The market price of our stock may be influenced by many factors, some of which are beyond our control, including the following:

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the opinions and estimates of any securities analysts who publish research about us;

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announcements by us or our competitors of significant contracts, acquisitions or capital commitments;

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variations in quarterly operating results;

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changes in general economic or market conditions or trends in our industry or the economy as a whole;

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future sales of our common stock; and

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investor perception of us and the industries we operate in.

As a result of these factors, investors in our common stock may not be able to resell their shares at or above the initial purchase price. These broad market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. In the past, stockholders have instituted securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources, and the attention of management could be diverted from our business.

Our operating results and share price may be volatile, and the market price of our common stock may drop.

Quarterly operating results may fluctuate. In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance. Our operating results and the trading price of our shares may fluctuate in response to various factors, including:

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market conditions in the broader stock market;

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actual or anticipated fluctuations in our quarterly financial and operating results;

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introduction of new products or services by us or our competitors;

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changes in our awards, backlog and book-to-bill ratios in a given period;

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issuance of new or changed securities analysts’ reports or recommendations;

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results of operations that vary from expectations of securities analysis and investors;

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guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

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strategic actions by us or our competitors;

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announcement by us, our competitors or our acquisition targets;

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sales, or anticipated sales, of large blocks of our stock;

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additions or departures of key personnel;

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regulatory, legal or political developments;

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public response to press releases or other public announcements by us or third parties, including our filings with the SEC;

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litigation and governmental investigations;

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seasonality associated with U.S. federal, state, regional and local government funding and spending;

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changing economic conditions;

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changes in accounting principles;

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default under agreements governing our indebtedness;

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exchange rate fluctuations; and

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other events or factors, including those from natural disasters, war, actors of terrorism or responses to these events and pandemics, such as the COVID-19 pandemic.

These and other factors, many of which are beyond our control, may cause our operating results and the market price and demand for our shares to fluctuate substantially. While we believe that operating results for any particular quarter are not necessarily a meaningful indication of future results, fluctuations in our quarterly operating results could limit or prevent investors from readily selling their shares and may otherwise negatively affect the market price and liquidity of our shares. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our profitability and reputation.

Sales of outstanding shares of our common stock into the market in the future by the ESOP could cause the market price of our common stock to drop significantly.

At December 31, ~~2024~~2025, we had ~~146~~145,~~656~~676,~~225~~335 shares of our common stock issued and 106,~~775~~968,~~350~~082 outstanding. Of these shares, 5450,~~117~~864,~~904~~117 shares are owned by the ESOP, 5256,~~657~~103,~~447~~965 shares are publicly owned, and 3938,~~880~~708,~~875~~253 shares are Treasury stock. We are party to a registration rights agreement with the ESOP Trustee, providing the ESOP with certain demand registration rights related to shares held by the ESOP in the event the ESOP Trustee determines in good faith, in exercising its fiduciary duties under ERISA, that the ESOP is required to sell its shares, which we believe is only likely to occur if our business, financial condition or results of operations have materially and adversely deteriorated.

Qualifying ESOP participants have the right to receive distributions of shares of our common stock from the ESOP and can sell such shares in the market.

As of December 31, ~~2024~~2025, there were 5450,~~117~~864,~~904~~117 shares of common stock held in the ESOP. Shares held in the ESOP are eligible for sale in the public market, subject to applicable Rule 144 limitations, vesting restrictions and any applicable market standoff agreements and lock-up agreements. Participants are generally entitled to distributions from the ESOP only following termination of employment or upon death and in order to diversify their accounts upon attaining a specified age and completing a specified number of years of service. As previously noted in the section of Part 1, Item 1 entitled “Employee Stock Ownership Plan”, ~~in December 2020,~~ the board of directors previously approved anamendments ~~amendment~~ to the Employee Stock Ownership Plan to provide more flexible diversification rights for participants, ~~and in January 2021,~~ the ~~board of directors approved the~~ modification of the thresholds for distributions to participants in the ESOP ~~effective~~for ~~March 1, 2021. In April 2022,~~ the ~~board~~provision of ~~directors approved an amendment providing for~~ lump sum distributions to participants and removing the annual installments. Annual diversification elections and

~~installments. Annual diversification elections and~~ five-year vested termination distributions ~~are~~were not impacted ~~by this amendment~~ and ~~will~~ still occur annually and over installments as outlined in the Plan.

ESOP distributions are made in the form of shares of our common stock (other than distributions in respect of fractional shares, which will be made in cash). Upon receiving a distribution of our common stock from the ESOP, a participant will be able to sell such shares in the market. As a result, we cannot predict the effect, if any, that these distributions and the corresponding sales of shares by the participants may have on the market price of our common stock. Distribution of substantial amounts of our common stock to participants may cause the market price of our common stock to decline.

The issuance of additional stock, not reserved for issuance under our equity incentive plans or otherwise, will dilute all other stockholdings.

We have an aggregate of ~~853~~854,~~343~~323,~~775~~665 shares of common stock authorized but not outstanding and not reserved for issuance under our 2021 Plan, under our existing Incentive Plans or otherwise. We may issue all of these shares without any action or approval by our stockholders. The issuance of additional shares could be dilutive to existing holders. We historically have made annual contributions of our common stock to the ESOP. We made contributions of ~~633~~1,~~033~~172,622 shares in fiscal ~~2024~~2025, ~~915~~633,~~113~~033 shares in fiscal ~~2023~~2024, and 1915,~~188,129~~113 shares in fiscal ~~2022~~2023 of our common stock to the ESOP and intend to continue to make annual contributions in shares of our common stock to the ESOP. In fiscal ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, we made annual contributions to the ESOP in shares of our common stock in the amount of 8% of the participants’ cash compensation for the applicable year (net of shares forfeited by participants in the applicable year). For future fiscal years, the annual contribution to the ESOP shall be in amounts as determined by the board of directors.

Your ability to influence corporate matters may be limited because the ESOP beneficially owns a majority of our stock and therefore our ESOP participants, voting the shares allocated to them under the ESOP, or the ESOP Trustee, who will have the right to vote shares for which no voting instructions are provided by employees, could have substantial control over us.

Our common stock has one vote per share. The ESOP beneficially owns approximately 5147% of our outstanding common stock, 4039% of which is owned by current employees of Parsons Corporation. Under the terms of the ESOP, each participant has the ability to direct the ESOP Trustee on the voting of the shares allocated to his or her account under the ESOP. However, the ESOP Trustee will vote any shares that a participant does not direct the voting, or any shares that are held by the ESOP which are not allocated to participants’ accounts. As such, the ESOP Trustee may be able to exercise a greater influence than otherwise over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.

The purpose of the ESOP is to provide retirement income to employees and their beneficiaries. Accordingly, the interests of the ESOP and the ESOP participants may be contrary to yours as an outside investor.

ERISA sets forth certain fiduciary requirements that require an ERISA fiduciary, like the ESOP Trustee, to act solely in the interests of plan participants and their beneficiaries for the purpose of providing retirement benefits. The Department of Labor, which is the agency with the authority to interpret and enforce the fiduciary sections of ERISA, has indicated in its interpretative guidance that voting is an ERISA fiduciary act. The ESOP Trustee’s fiduciary duties under ERISA to the ESOP and its participants may cause the ESOP Trustee to override participants’ voting directions to the extent that following such directions would violate ERISA. In such case, the ESOP Trustee will be able to exercise voting control over all of the ESOP’s shares. Further, the interests of the minority stockholders may not be aligned with those of the ESOP as the majority stockholder, because the ESOP Trustee is required under ERISA to act in the best interest of the ESOP participants and beneficiaries, this may present a conflict.

As a result, the concentration of ownership in our company by the ESOP could delay or prevent a change in control of our company or otherwise discourage a potential acquirer from attempting to obtain control of our company, which in turn could reduce the price of our common stock.

The ESOP holds common stock representing approximately 51% of the voting power of our common stock as of December 31, 2024. As a result, we are considered a “controlled company” for the purposes of New York Stock Exchange (“NYSE”) rules and corporate governance standards. As a controlled company, we are exempt from certain NYSE corporate governance requirements, including those that would otherwise require our board of directors to have a majority of independent directors and require that we either establish compensation and nominating and corporate governance board committees, each comprised entirely of independent directors, or otherwise ensure that the compensation of our executive officers and nominees for directors are determined or recommended to the board of directors by the independent members of the board of directors. While we intend to have a majority of independent directors, and our compensation and nominating and corporate governance committees to consist entirely of independent directors, we may decide at a later time to rely on one of the “controlled company” exemptions. Accordingly, our common stock may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE corporate governance requirements.

Our ability to raise capital in the future may be limited, which could limit our business plan or adversely affect your investment.

Our business and strategic plans may consume resources faster than we anticipate. In the future, we may need to raise additional funds through the issuance of new equity securities, debt or a combination of both. However, any decline in the market price of our common stock could impair our ability to raise capital. Separately, additional financing may not be available on favorable terms, or at all. If adequate funds are not available on acceptable terms, we may be unable to fund our operations or new investments. If we issue new debt securities, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity securities, existing stockholders will experience dilution, and the new equity securities could have rights senior to those of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, our stockholders bear the risk of our future securities offerings reducing the market price of our common stock and diluting their interest.

Anti-takeover provisions in our organizational documents could delay a change in management and limit our share price.

Provisions of our certificate of incorporation and bylaws could make it more difficult for a third party to acquire control of us even if such a change in control would increase the value of our common stock and prevent attempts by our stockholders to replace or remove our current board of directors or management.

We have a number of anti-takeover devices that could hinder takeover attempts and could reduce the market value of our common stock or prevent sale at a premium. Our anti-takeover provisions:

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permit the board of directors to establish the number of directors and fill any vacancies and newly created directorships;

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provide that our board of directors is classified into three classes with staggered, three-year terms and that directors may only be removed for cause;

•

include blank-check preferred stock, the preference, rights and other terms of which may be set by the board of directors and could delay or prevent a transaction or a change in control that might involve a premium price for our common stock or otherwise benefit our stockholders;

•

eliminate the ability of our stockholders to call special meetings of stockholders;

•

specify that special meetings of our stockholders can be called only by our board of directors, or a board committee authorized with the power to call such meetings;

•

prohibit stockholder action by written consent, which has the effect of requiring all stockholder actions to be taken at a meeting of our stockholders;

•

provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

•

prohibit cumulative voting in the election of directors; and

•

establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholders’ meetings.

In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law (DGCL). These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a period of time.

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for the following civil actions:

•

any derivative action or proceeding brought on our behalf;

•

any action asserting a claim of breach of a fiduciary duty by any of our directors, officers, employees or agents or our stockholders;

•

any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or

•

any action asserting a claim governed by the internal affairs doctrine.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could have a material adverse effect on our business, financial condition or results of operations.

We have no current plans to declare dividends.

We do not currently pay a dividend and have no current plans to declare any cash dividends to holders of our common stock. Any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon results of operations, financial condition, any contractual restrictions, our indebtedness, restrictions imposed by applicable law and other factors our board of directors deems relevant. Consequently, investors may need to sell all or part of their holdings of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.

common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock depends, in part, on the research and reports that securities or industry analysts publish about us or our business. If an analyst who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our stock price and trading volume to decline.

Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.

We use NIST Cybersecurity Framework and CIS Critical Security Controls as a guide to help us identify, assess, and manage cybersecurity relevant to our business. We are also structured to CMMC which aligns with ~~DOD~~DOW/Federal contractor program compliance. This does not imply that we meet any particular technical standards, specifications, or requirements.

Our cybersecurity risk management program is integrated with our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. Our cybersecurity risk management program includes the following key elements:

•

risk assessments designed to help identify material cybersecurity risks to our critical systems, information, services, and our broader enterprise IT environment;

•

a team comprised of IT security, IT infrastructure, and IT compliance personnel principally responsible for directing (1) our cybersecurity risk assessment processes; (2) our security processes; and (3) our response to cybersecurity incidents;

•

the use of external cybersecurity service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;

•

cybersecurity awareness training of employees with access to our IT systems;

•

a cybersecurity incident response plan and Security Operations Center to respond to cybersecurity incidents;

•

a third-party risk management process for service providers.

We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial conditions, as we have described in the Risk Factors section of this Form 10-K.

if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial conditions, as we have described in the Risk Factors section of this Form 10-K.

Cybersecurity Governance

Our Board considers cybersecurity risk as critical to the enterprise and delegates the cybersecurity risk oversight function to the Audit and Risk Committee. The Audit and Risk Committee oversees management’s design, implementation, and enforcement of our cybersecurity risk management program.

Our Chief Security & Risk Officer reports to the Chief Technology Officer and works closely with the Chief Legal Officer to ensure that all disclosure or reporting requirements are satisfied if an incident were to occur. The Chief Security & Risk Officer leads Parsons’ overall cybersecurity function and provides quarterly reports to the Audit and Risk Committee on our cybersecurity risks, including briefings on our cybersecurity risk management program and cybersecurity incidents. The Audit and Risk Committee also receives periodic presentations on relevant cybersecurity topics as part of the Committee and the Board’s continuing education on topics that impact public companies.

Our Chief Security & Risk Officer supervises efforts to prevent, detect, mitigation and remediate cybersecurity risks and incidents through various means, which include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external cybersecurity service providers; and alerts and reports produced by security tools deployed in the IT environment. Our Chief Security & Risk Officer is responsible for assessing and managing our material risks from cybersecurity threats and has primary responsibility for leading our overall cybersecurity risks management program and supervises both our internal cybersecurity ~~personnel and our external cybersecurity service providers. Our Chief Security & Risk Officer has significant global experience in managing and leading IT and cybersecurity teams.~~

personnel and our external cybersecurity service providers. Our Chief Security & Risk Officer has significant global experience in managing and leading IT and cybersecurity teams.

Item 2. Properties.

Our headquarters are located in Chantilly, Virginia. As of December 31, ~~2024~~2025, we leased ~~246~~248 commercial facilities (including our headquarters) with an aggregate of approximately 2.7 million square feet of space across 3837 U.S. states and 1516 countries used in connection with the various services rendered to our customers. Additionally, we operate at several customer-accredited Sensitive Compartmented Information Facilities, which are highly specialized, secure facilities used to perform classified work for the United States intelligence community. We also have employees working at customer sites throughout the U.S. and in other countries. We believe our facilities are adequate for our current and presently foreseeable needs.

Item 3. Legal Proceedings.

Our performance under our contracts and our compliance with the terms of those contracts and applicable laws and regulations are subject to continuous audit, review and investigation by our customers, including the U.S. federal government. In addition, we are from time to time involved in legal proceedings and investigations arising in the ordinary course of business, including those relating to employment matters, relationships with clients and contractors, intellectual property disputes, environmental matters and other business matters. Although the outcome of any such matter is inherently uncertain and may be materially adverse, based on current information, except as noted below, we believe there are no pending lawsuits or claims that may have a material adverse effect on our business, financial condition or results of operations.

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. In March 2025, the court granted Parsons’ motion for summary judgment. The Relator has appealed this decision. We anticipate that oral argument will be heard by the appellate court in 2026.

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. and against Alstom Signaling Operations LLC (Alstom"). This proposed award relates back 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 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 with Parsons having until February 2026 to file their final brief. We anticipate oral argument will occur in 2026.

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. We are awaiting the court’s rulings upon such motions, which will determine whether a trial will be necessary for this matter in 2025.

At this time, the Company is unable to determine the probability of the outcome of the litigation.

Item 4. Mine Safety Disclosures.

Not Applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock is listed on the NYSE under the ticker symbol “PSN”.

Dividend Policy

During the years ended December 31, ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, the Company did not declare any dividends. We currently do not intend to declare or pay any cash dividends in the foreseeable future. Any determination to pay dividends on our capital stock will be at the discretion of our board of directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, restrictions under our Convertible Senior Notes, or the ~~Delayed Draw~~ Term Loan and Credit Agreement, and other factors that our board of directors considers relevant.

Shareholders

According to the records of our transfer agent, there were ~~three~~two shareholders of record as of February 113, ~~2025~~2026.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information as of December 31, ~~2024~~2025 regarding compensation plans under which our equity securities are authorized for issuance.

Plan Category

Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights(a)

Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(b)

Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(c)

Equity compensation plans approved by security holders (1)

1,~~367~~217,~~785~~941

(2)

Equity compensation plans not approved by security holders

1,~~883~~591,~~018~~245

(3)

76,~~651~~931,~~085~~420

(4)

Total

1,~~883~~591,~~018~~245

98,~~018~~149,~~870~~361

(1)

Consists of the 2020 Employee Stock Purchase Plan.

(2)

Amount represents 1,~~367~~217,~~785~~941 shares remaining available for future issuance under the 2020 Employee Stock Purchase Plan (of which 4779,~~860~~496 shares were purchased pursuant to the offering period that ended on December 31, ~~2024~~2025).

(3)

Amount represents the sum of 1,~~883~~591,~~018~~245 shares of common stock subject to outstanding RSU and PSU awards under the 2019 Incentive Plan (with PSU awards reflected at “target” levels),

(4)

Amount represents 76,~~651~~931,~~085~~420 shares remaining available for future issuance under the 2019 Incentive Plan.

Performance Graph

The following graph compares the cumulative total return, from December 31, ~~2019~~2020 through December 31, ~~2024~~2025, to shareholders of Parsons Corporation common stock relative to the cumulative total returns of the Russell 2000 Index and the Standard and Poor’s IT Consulting & Other Services Index. The graph assumes that the value of the initial investment in our common stock and each of the two indexes was $100 on December 31, ~~2019~~2020, and tracks it through December 31, ~~2024~~2025 (including reinvestment of dividends). The stock performance included in this graph is not necessarily indicative of future stock price performance.

		12/19	12/20	12/21	12/22	12/23	12/24
	12/20	12/21	12/22	12/23	12/24	12/25
Parsons Corp.	100.00	~~100~~92.0042	88127.2003	81172.5223	~~112~~253.0436	~~151~~169.9173	~~223.47~~
Russell 2000	100.00	~~100~~114.0082	~~119~~91.9635	~~137~~106.7482	~~109~~119.5914	~~128~~134.1440	~~142.93~~
S&P Composite 1500 IT Consulting & Other Services	100.00	~~100~~137.0094	~~113~~105.4438	~~156~~133.4879	~~119~~151.5597	~~151~~154.7721	~~172.40~~

Securities Authorized for Issuance Under Equity Compensation Plans

The information required by this item with respect to our equity compensation plans is incorporated by reference to our ~~2024~~2026 Proxy Statement.

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

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 ~~February~~March ~~2024~~2025 to ~~restore~~increase and reset the repurchase capacity to $~~100~~250 million. ~~and~~Any ~~removed~~purchases made by the ~~$25~~Company ~~million~~during ~~quarterly~~Q1 ~~cap~~of on2025 ~~such~~were ~~repurchases~~deducted from the reset capacity.

AtUnder ~~the~~prior ~~time of the February 2024 authorization~~authorizations, the Company had repurchased shares with an ~~aggregated~~aggregate market value ~~(including fees)~~ of $5479.7 million. The aggregate market value of shares of Common Stock the Company is authorized to acquire, from ~~both~~prior ~~the~~authorizations ~~August 2021~~ and ~~February~~the ~~2024~~March ~~authorizations,~~2025 authorization is not greater than $~~154~~329.7 million.

As of December 31, ~~2024~~2025, the Company has spent $79204.7 million (which includes commissions paid of $3471 thousand) repurchasing 13,~~713~~535,~~481~~849 shares of Common Stock at an average price of $4657.5189 per share.

The following table presents the Company’s purchase of equity securities for the three months ended December 31, ~~2024~~2025.

Period	(a)Total number of shares (or units purchased)		(b)Average price paid per share (or unit) (1)		(c)Total number of shares (or units) purchased as part of publicly announced plans or programs		(d)Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans programs
October 1 to 31, 2024		-	$	-		-	$	90,000,219
October 1 to 31, 2025		-	$	-		-	$	185,005,893
November 1 to 30, 2024		104,527		95.67		104,527		80,000,351
November 1 to 30, 2025		235,596	$	84.89		235,596		165,006,133
December 1 to 31, 2024		51,425		97.22		51,425		75,000,926
December 1 to 31, 2025		620,832	$	64.43		620,832		125,006,260
Total		~~155~~856,~~952~~428	$	9670.1806		~~155~~856,~~952~~428	$	75125,~~000~~006,~~926~~260

(1)

Includes commissions and calculated at the average price per share

Item 6. Reserved

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis is intended to help investors understand our business, financial condition, results of operations, liquidity and capital resources. You should read this discussion together with our consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. Certain amounts may not foot due to rounding.

The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” Actual results may differ materially from those contained in any forward-looking statements.

PARSONS CORPORATION Enabling a safer, smarter, and more interconnected world. Federal Solutions Technology-driven solutions for defense and intelligence customers SEGMENTS Critical Infrastructure Engineered solutions for complex physical and digital infrastructure challenges FINANCIAL SNAPSHOT $4B FY 2019 Revenue Critical Infrastructure52% Federal Solutions48% $4.3BFY 2019 Contract Awards Critical Infrastructure41% Federal Solutions59% KEY FACTS AND FIGURES 75Years of History ~ 16KEmployees 11%Revenue Growth (FY 2019) 1.1XTTM Book-to-Bill $8.0BBacklog as of 12/31/2019

Overview

We are a leading provider of the integrated solutions and services required in today’s complex security environment and a world of digital transformation. We deliver innovative technology-driven solutions to customers worldwide. We have developed significant expertise and differentiated capabilities in key areas of cyber and intelligence, space and missile defense, critical infrastructure protection, transportation, environmental remediation and urban development. By combining our talented team of professionals and advanced technology, we solve complex technical challenges to enable a safer, smarter, more secure and more connected world.

We operate in two reporting segments, Federal Solutions and Critical Infrastructure. Our Federal Solutions business is an advanced technology provider to the U.S. government. Our Critical Infrastructure business provides integrated design and engineering services for complex physical and digital infrastructure around the globe.

Our employees provide services pursuant to contracts that we are awarded by the customer and specific task orders relating to such contracts. These contracts are often multi-year, which provides us backlog and visibility on our revenues for future periods. Many of our contracts and task orders are subject to renewal and rebidding at the end of their term, and some are subject to the exercise of contract options and issuance of task orders by the applicable government entity. In addition to focusing on increasing our revenues through increased contract awards and backlog, we focus our financial performance on margin expansion and cash flow.

Key Metrics

We manage and assess the performance of our business by evaluating a variety of metrics. The following table sets forth selected key metrics (in thousands, except Book-to-Bill):

	Period Ended
	December 31, 2025		December 31, 2024		December 31, 2023
	December 31, 2024		December 31, 2023		December 31, 2022
Awards	$	6,371,950	$	7,039,272	$	5,996,780
Awards	$	7,039,272	$	5,996,780	$	4,274,721
Backlog (1)	$	8,716,788	$	8,893,915	$	8,592,271
Backlog (1)	$	8,893,915	$	8,592,271	$	8,179,245
Book-to-Bill		1.0		1.0		1.1
Book-to-Bill		1.0		1.1		1.0

(1)

Difference between our backlog of $8.97 billion and our remaining unsatisfied performance obligations, or RUPO, of $6.7.1 billion, each as of December 31, ~~2024~~2025, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.

Awards

Awards generally represent the amount of revenue expected to be earned in the future from funded and unfunded contract awards received during the period. Contract awards include both new and re-compete contracts and task orders. Given that new contract awards generate growth, we closely track our new awards each year.

The following table summarizes the total value of new awards for the periods presented below (in thousands):

Fiscal Year Ended

December 31, 2024

December 31, 2023

December 31, 2022

December 31, 2025

December 31, 2024

December 31, 2023

Federal Solutions

32,~~880~~686,~~290~~461

3,~~259~~880,~~052~~290

13,~~921~~259,~~123~~052

Critical Infrastructure

3,~~158~~685,~~982~~489

23,~~737~~158,~~728~~982

2,~~353~~737,~~598~~728

Total Awards

76,~~039~~371,~~272~~950

57,~~996~~039,~~780~~272

45,~~274~~996,~~721~~780

The change in new awards from year to year is primarily due to ordinary course fluctuations in our business. The volume of contract awards can fluctuate in any given period due to win rate and the timing and size of the awards issued by our customers.

The change in new awards in ~~both~~ our ~~Federal Solutions and~~ Critical Infrastructure ~~segments~~segment for the year ended December 31, ~~2024~~2025 when compared to the corresponding period last year was primarily due to ~~significant~~an ~~option~~overall ~~period~~increase in awards in the current year. The decrease in awards for the year ended December 31, 2025 in our Federal Solutions segment ~~and~~when ~~three~~compared ~~large~~to ~~transportation~~the ~~awards~~corresponding ~~and~~period alast ~~mining~~year ~~award~~was inprimarily ~~our~~driven ~~Critical~~by ~~Infrastructure~~a ~~segment.~~delay

in the timing of awards of a number of contracts being pursued. Awards in the Federal Solutions segment for the year ended December 31, 2024 included $1.5 billion from the confidential contract compared to $293 million for the year ended December 31, 2025.

Backlog

We define backlog to include the following two components:

•

The following table summarizes the value of our backlog at the respective dates presented (in thousands):

As of

December 31, 2024

December 31, 2023

December 31, 2022

December 31, 2025

December 31, 2024

December 31, 2023

Federal Solutions:

Funded

1,~~712~~853,~~627~~658

1,~~454~~712,~~581~~627

1,~~257~~454,~~537~~581

Unfunded

2,~~961~~298,~~356~~073

32,~~490~~961,~~781~~356

3,~~586~~490,~~791~~781

Total Federal Solutions

4,~~673~~151,~~983~~731

4,~~945~~673,~~362~~983

4,~~844~~945,~~328~~362

Critical Infrastructure:

Funded

4,~~167~~523,~~611~~891

34,~~578~~167,~~902~~611

3,~~280~~578,~~701~~902

Unfunded

5241,~~321~~166

6852,~~007~~321

5468,~~216~~007

Total Critical Infrastructure

4,~~219~~565,~~932~~057

34,~~646~~219,~~909~~932

3,~~334~~646,~~917~~909

Total Backlog (1)

8,~~893~~716,~~915~~788

8,~~592~~893,~~271~~915

8,~~179~~592,~~245~~271

(1)

Difference between our backlog of $8.97 billion and our RUPO of $6.7.1 billion, each as of December 31, ~~2024~~2025, is due to (i) unissued task orders and unexercised option years, to the extent their issuance or exercise is probable, as well as (ii) contract awards, to the extent we believe contract execution and funding is probable.

Our backlog includes orders under contracts that in some cases extend for several years. For example, the U.S. Congress generally appropriates funds for our U.S. federal government customers on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years to complete. As a result, our federal contracts typically are only partially funded at any point during their term. All or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

We expect to recognize $34.91 billion of our funded backlog at December 31, ~~2024~~2025 as revenues in the following twelve months. However, our U.S. federal government customers may cancel their contracts with us at any time through a termination for convenience or may elect to not exercise option periods under such contracts. In the case of a termination for convenience, we would not receive anticipated future revenues, but would generally be permitted to recover all or a portion of our incurred costs and fees for work performed. See “Risk Factors—Risks Relating to Our Business—We may not realize the full value of our backlog, which may result in lower than expected revenue.”

future revenues, but would generally be permitted to recover all or a portion of our incurred costs and fees for work performed. See “Risk Factors—Risks Relating to Our Business—We may not realize the full value of our backlog, which may result in lower than expected revenue.”

The changes in backlog in both the Federal Solutions and Critical Infrastructure segments were primarily from ordinary course fluctuations in our business and the impacts related to the Company’s awards discussed above. Our backlog will fluctuate in any given period based on the volume of awards issued and the rate of revenue generated from our existing contracts.

Book-to-Bill

Book-to-bill is the ratio of total awards to total revenue recorded in the same period. Our management believes our book-to-bill ratio is a useful indicator of our potential future revenue growth in that it measures the rate at which we are generating new awards compared to the Company’s current revenue. To drive future revenue growth, our goal is for the level of awards in a given period to exceed the revenue booked. A book-to-bill ratio greater than 1.0 indicates that awards generated in a given period exceeded the revenue recognized in the same period, while a book-to-bill ratio of less than 1.0 indicates that awards generated in such period were less than the revenue recognized in such period. The following table sets forth the book-to-bill ratio for the periods presented below:

	Fiscal Year Ended
	December 31, 2024		December 31, 2023		December 31, 2022
	December 31, 2025		December 31, 2024		December 31, 2023
Federal Solutions		1.0.8		1.10		01.91
Critical Infrastructure		1.2		1.12		1.21
Overall		1.0		1.10		1.01

Factors and Trends Affecting Our Results of Operations

We believe that the financial performance of our business and our future success are dependent upon many factors, including those highlighted in this section. Our operating performance will depend upon many variables, including the success of our growth strategies and the timing and size of investments and expenditures that we choose to undertake, as well as market growth and other factors that are not within our control.

Government Spending

Changes in the relative mix of government spending and areas of spending growth, with shifts in priorities on homeland security, intelligence, defense-related programs, infrastructure and urbanization, and continued increased spending on technology and innovation, including cyber, artificial intelligence, connected communities and physical infrastructure, could impact our business and results of operations. Cost-cutting and efficiency initiatives, current and future budget restrictions, spending cuts and other efforts to reduce government spending could cause our government customers to reduce or delay funding or invest appropriated funds on a less consistent basis or not at all, and demand for our solutions or services could diminish. Furthermore, any disruption in the functioning of government agencies, including as a result of government closures and shutdowns, could have a negative impact on our operations and cause us to lose revenue or incur additional costs due to, among other things, our inability to deploy our staff to customer locations or facilities as a result of such disruptions.

Federal Budget Uncertainty

There is uncertainty around the timing, extent, nature and effect of Congressional and other U.S. government actions to address budgetary constraints, caps on the discretionary budget for defense and non-defense departments and agencies, and the ability of Congress to determine how to allocate the available budget authority and pass appropriations bills to fund both U.S. government departments and agencies that are, and those that are not, subject to the caps. Additionally, budget deficits and the growing U.S. national debt increase pressure on the U.S. government to reduce federal spending across all federal agencies, with uncertainty about the size and timing of those reductions. Furthermore, delays in the completion of future U.S. government budgets could in the future delay procurement of the federal

agencies that are, and those that are not, subject to the caps. Additionally, budget deficits and the growing U.S. national debt increase pressure on the U.S. government to reduce federal spending across all federal agencies, with uncertainty about the size and timing of those reductions. Furthermore, delays in the completion of future U.S. government budgets could in the future delay procurement of the federal government services we provide. A reduction in the amount of, or delays, or cancellations of funding for, services that we are contracted to provide to the U.S. government as a result of any of these impacts or related initiatives, legislation or otherwise could have a material adverse effect on our business and results of operations.

Regulations

Increased audit, review, investigation and general scrutiny by government agencies of performance under government contracts and compliance with the terms of those contracts and applicable laws could affect our operating results. Negative publicity and increased scrutiny of government contractors in general, including us, relating to government expenditures for contractor services and incidents involving the mishandling of sensitive or classified information, as well as the increasingly complex requirements of the U.S. Department of ~~Defense~~War and the U.S. intelligence community, including those related to cybersecurity, could impact our ability to perform in the markets we serve.

Competitive Markets

The industries we operate in consist of a large number of enterprises ranging from small, niche-oriented companies to multi-billion-dollar corporations that serve many government and commercial customers. We compete on the basis of our technical expertise, technological innovation, our ability to deliver cost-effective multi-faceted services in a timely manner, our reputation and relationships with our customers, qualified and/or security-clearance personnel, and pricing. We believe that we are well positioned to take advantage of the markets in which we operate because of our proven track record, long-term customer relationships, technology innovation, scalable and agile business offerings and world class talent. Our ability to effectively deliver on project engagements and successfully assist our customers affects our ability to win new contracts and drives our financial performance.

Acquired Operations

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 $28.1 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. The financial results of ASC have been included in our consolidated results of operations from October 1, 2025 onward.

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. The financial results of CTI have been included in our consolidated results of operations from June 30, 2025 onward.

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 will be paid in July 2026). TRS is an environmental solutions firm that specializes in remediation technology. The financial

results of TRS have been included in our consolidated results of operations from January 31, 2025 onward.

BCC Engineering, LLC

On November 1, 2024, the Company acquired a 100% ownership interest in BCC Engineering, LLC ("BCC") a privately owned company, for $~~232~~233.75 million. BCC is a full-service engineering firm that provides planning, design, and management services for transportation, civil and structural engineering projects in Florida, Georgia, Texas, South Carolina, and Puerto Rico. This acquisition strengthens Parsons’ position as an infrastructure leader while expanding the company’s reach in the southeastern United States. The financial results of BCC have been included in our consolidated results of operations from October 18, 2024 onward.

BlackSignal Technologies, LLC

On August 16, 2024, the Company acquired a 100% ownership interest in BlackSignal Technologies, LLC, ("BlackSignal") a privately-owned company, for $203.7 million. Headquartered in Chantilly, Virginia, BlackSignal is a next-generation digital signal processing, electronic warfare, and cyber security provider built to counter near peer threats. Parsons believes that the acquisition will expand Parsons' customer base across the Department of ~~Defense~~War and Intelligence Community and significantly strengthen Parsons' positioning within cyber warfare, while adding new capabilities in the counterspace radio frequency domain. The financial results of BlackSignal have been included in our consolidated results of operations from August 16, 2024 onward.

I.S. Engineers, LLC

On October 31, 2023, the Company entered into a Membership Interest Purchase Agreement to acquire a 100% ownership interest in I.S. Engineers, LLC, a privately-owned company, for $12.2 million, subject to certain adjustments. Headquartered in Texas, I.S. Engineers, LLC provides full-service consulting specializing in transportation engineering, including roads and highways, and program management. The financial results of I.S. Engineers have been included in our consolidated results of operations from October 31, 2023 onward.

Sealing Technologies, Inc.

On August 23, 2023, the Company acquired a 100% ownership interest in Sealing Technologies, Inc (“SealingTech”), a privately-owned company, for $176.0 million and up to an additional $25 million in the event an earn out revenue target is exceeded. Headquartered in Maryland, SealingTech expands Parsons’ customer base across the Department of ~~Defense~~War and Intelligence Community, and further enhances the company’s capabilities in defensive cyber operations; integrated mission-solutions powered by artificial intelligence (AI) and machine learning (ML); edge computing and edge access modernization; critical infrastructure protection; and secure data management. The financial results of SealingTech have been included in our consolidated results of operations from August 23, 2023 onward.

IPKeys Power Partners

On April 13, 2023, the Company entered into a merger agreement to acquire a 100% ownership interest in IPKeys Power Partners (“IPKeys”), a privately-owned company, for $43.0 million. The merger brings IPKeys' established customer base, expanding Parsons' presence in two rapidly growing end markets: grid modernization and cyber resiliency for critical infrastructure. Headquartered in Tinton Falls, New Jersey, IPKeys is a trusted provider of enterprise software platform solutions that is actively delivering cyber and operational security to hundreds of electric, water, and gas utilities across North America. The financial results of IPKeys have been included in our consolidated results of operations from April 13, 2023 onward.

Xator Corporation

On May 31, 2022, the Company acquired Xator Corporation for $387.5 million. This strategic acquisition expands Parsons’ presence within the U.S. Special Operations Command, the Intelligence Community, Federal Civilian customers, and global critical infrastructure markets, while providing new customer access at the Department of State. Xator also expands Parsons’ customer base and brings differentiated technical capabilities in critical infrastructure protection, counter-unmanned aircraft systems (cUAS), intelligence and cyber solutions, biometrics, and global threat assessment and operations, increasing our addressable market in both the Federal Solutions and Critical Infrastructure segments. The financial results of Xator have been included in our consolidated results of operations from May 31, 2022 onward.

Seasonality

Our results may be affected by variances as a result of weather conditions and contract award seasonality impacts that we experience across our businesses. The latter issue is typically driven by the U.S. federal government fiscal year-end, September 30. While not certain, it is not uncommon for U.S. government agencies to award task orders or complete other contract actions in the weeks before the end of the U.S. federal government fiscal year in order to avoid the loss of unexpended U.S. federal government fiscal year funds. In addition, we have also historically experienced higher bid and proposal costs in the months leading up to the U.S. federal government fiscal year-end as we pursue new contract opportunities expected to be awarded early in the following U.S. federal government fiscal year as a result of funding appropriated for that U.S. federal government fiscal year. Furthermore, many U.S. state governments with fiscal years ending on June 30 tend to accelerate spending during their first quarter, when new funding becomes available. We may continue to experience this seasonality in future periods, and our results of operations may be affected by it.

end of the U.S. federal government fiscal year in order to avoid the loss of unexpended U.S. federal government fiscal year funds. In addition, we have also historically experienced higher bid and proposal costs in the months leading up to the U.S. federal government fiscal year-end as we pursue new contract opportunities expected to be awarded early in the following U.S. federal government fiscal year as a result of funding appropriated for that U.S. federal government fiscal year. Furthermore, many U.S. state governments with fiscal years ending on June 30 tend to accelerate spending during their first quarter, when new funding becomes available. We may continue to experience this seasonality in future periods, and our results of operations may be affected by it.

Results of Operations

Revenue

Our revenue consists of both services provided by our employees and pass-through fees from subcontractors and other direct costs. Our Federal Solutions segment derives revenue primarily from the U.S. federal government and our Critical Infrastructure segment derives revenue primarily from government and commercial customers.

We enter into the following types of contracts with our customers:

•

Under cost-plus contracts, we are reimbursed for allowable or otherwise defined costs incurred, plus a fee. The contracts may also include incentives for various performance criteria, including quality, timeliness, safety and cost-effectiveness. In addition, costs are generally subject to review by clients and regulatory audit agencies, and such reviews could result in costs being disputed as non-reimbursable under the terms of the contract.

•

Under time-and-materials contracts, hourly billing rates are negotiated and charged to clients based on the actual time spent on a project. In addition, clients reimburse actual out-of-pocket costs for other direct costs and expenses that are incurred in connection with the performance under the contract.

•

Under fixed-price contracts, clients pay an agreed fixed-amount negotiated in advance for a specified scope of work.

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” and “Note 2—Summary of Significant Accounting Polices” in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for a description of our policies on revenue recognition applicable to each type of contract.

The table below presents the percentage of total revenue for each type of contract.

	Fiscal Year Ended
	December 31, 2024	December 31, 2023	December 31, 2022
	December 31, 2025	December 31, 2024	December 31, 2023
Fixed-price	4234%	3342%	2733%
Time-and-materials	2124%	2521%	2825%
Cost-plus	3742%	4237%	4542%

The amount of risk and potential reward varies under each type of contract. Under cost-plus contracts, there is limited financial risk, because we are reimbursed for all allowable costs up to a ceiling. However, profit margins on this type of contract tend to be lower than on time-and-materials and fixed-price contracts. Under time-and-materials contracts, we are reimbursed for the hours worked using the predetermined hourly rates for each labor category. In addition, we are typically reimbursed for other direct contract costs and expenses at cost. We assume financial risk on time-and-materials contracts because our labor costs may exceed the negotiated billing rates. Profit margins on well-managed time-and-materials contracts tend to be higher than profit margins on cost-plus contracts as long as we are able to staff those contracts with people who have an appropriate skill set. Under fixed-price contracts, we are required to deliver the objectives under the contract for a pre-determined price. Compared to time-and-materials and cost-plus contracts, fixed-price contracts generally offer higher profit margin opportunities because we receive the full benefit of any cost savings, but they also generally involve greater financial risk because we bear the risk of any cost overruns. In the aggregate, the contract type mix in our revenue for any given period will affect that period’s profitability. Over time, we have experienced a relatively stable contract mix.

The significant change in the contract mix for the year ended December 31, 2024 compared to the corresponding period last year relates to increased business volume from a significant fixed price contract in our Federal Solutions segment.

Our recognition of profit on long-term contracts requires the use of assumptions related to transaction price and total cost of completion. Estimates are continually evaluated as work progresses and are revised when necessary. When a change in estimated cost or transaction price is determined to have an impact on contract profit, we record a positive or negative adjustment to revenue.

The Company is involved in a significant volume of contracts with the United States federal government and state and local governments. Approximately 59%, 55%, and 53% of consolidated revenues for the years ended December 31, 2024, December 31, 2023 and December 31, 2022,

~~respectively~~time-and-materials ~~were~~and ~~derived~~cost-plus ~~from~~contracts, fixed-price contracts ~~with~~generally offer higher profit margin opportunities because we receive the ~~United~~full ~~States~~benefit ~~federal~~of ~~government.~~any Nocost ~~other~~savings, ~~customers~~but ~~represented~~they ~~10%~~also orgenerally ~~more~~involve greater financial risk because we bear the risk of ~~consolidated~~any ~~revenues~~cost oroverruns. ~~accounts~~In ~~receivable~~the aggregate, the contract type mix in our revenue for any ofgiven ~~the~~period ~~periods~~will ~~presented~~affect that period’s profitability. Over time, we have experienced a relatively stable contract mix.

The significant change in the contract mix for the year ended December 31, 2025 compared to the corresponding period last year relates to decreased business volume from a fixed price contract from a confidential contract in our Federal Solutions segment.

The Company is involved in a significant volume of contracts with the United States federal government and state and local governments. Approximately 51%, 59%, and 55% of consolidated revenues for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively were derived from contracts with the United States federal government. No other customers represented 10% or more of consolidated revenues or accounts receivable in any of the periods presented.

Joint Ventures

We conduct a portion of our business through joint ventures or similar partnership arrangements. For the joint ventures we control, we consolidate all the revenues and expenses in our consolidated statements of income (including revenues and expenses attributable to noncontrolling interests). For the joint ventures we do not control, we recognize equity in earnings (losses) of unconsolidated joint ventures. Our revenues included $~~182~~194.67 million in ~~2024~~2025, $~~213~~182.86 million in ~~2023~~2024, and $~~217~~213.48 million in ~~2022~~2023 related to services we provided to our unconsolidated joint ventures.

Operating costs and expenses

Operating costs and expenses primarily include direct costs of contracts and selling, general and administrative expenses. Costs associated with compensation-related expenses for our people and facilities, which includes ESOP contribution expenses, are the most significant component of our operating expenses. In ~~2024~~2025, ~~2023~~2024 and ~~2022~~2023, we made annual contributions to the ESOP in the amount of 8% of the participants’ cash compensation for the applicable year. Total ESOP contribution expense was $5972.85 million for ~~2024~~2025, $5859.28 million for ~~2023~~2024, and $5458.72 million for fiscal ~~2022~~2023, and is recorded in “Direct cost of contracts” and “Selling, general and administrative expenses.” We expect operating expenses to increase due to our anticipated growth. However, on a forward-looking basis, we generally expect these costs to decline as a percentage of our total revenue as we realize the benefits of scale.

Direct costs of contracts consist of direct labor and associated fringe benefits, indirect overhead, subcontractor and materials (“pass-through costs”), travel expenses and other expenses incurred to perform on contracts.

Selling, general and administrative expenses (“SG&A”) include salaries and wages and fringe benefits of our employees not performing work directly for customers, facility costs and other costs related to these indirect functions.

Other income and expenses

Other income and expenses primarily consist of interest income, interest expense, and other income, net.

Interest income primarily consists of interest earned on U.S. government money market funds.

Interest expense consists of interest expense incurred under our Convertible Senior Notes, Credit Agreement and ~~Delayed Draw~~ Term Loan.

Other income, net primarily consists of gain or loss on sale of assets, sublease income. transaction gain or loss related to movements in foreign currency exchange rates, contingent consideration and convertible debt repurchase loss.

64Year ended December 31, 2025 compared to year ended December 31, 2024

The following table sets forth our results of operations for fiscal 2025 and fiscal 2024 as a percentage of revenue.


	Fiscal Year Ended
	December 31, 2025			December 31, 2024
Revenues		100.0	%		100.0	%
Direct costs of contracts		77.5	%		79.2	%
Equity in (losses) earnings of unconsolidated joint ventures		0.0	%		(0.3	)%
Selling, general and administrative expenses		16.0	%		14.1	%
Operating income		6.6	%		6.3	%
Interest income		0.1	%		0.2	%
Interest expense		(0.8	)%		(0.8	)%
Convertible debt repurchase loss		0.0	%		(0.3	)%
Other income, net		0.1	%		(0.0	)%
Total other income benefit (expense)		(0.6	)%		(0.9	)%
Income before income tax expense		6.0	%		5.4	%
Income tax expense		(1.2	)%		(1.1	)%
Net income including noncontrolling interests		4.9	%		4.3	%
Net income attributable to noncontrolling interests		(1.1	)%		(0.8	)%
Net income attributable to Parsons Corporation		3.8	%		3.5	%

Revenue


	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2025		December 31, 2024		Dollar			Percent
Revenue	$	6,364,245	$	6,750,576	$	(386,331	)		(5.7	)%

The decrease in revenue of $386.3 million for the year ended December 31, 2025 when compared to the prior year was due to a decrease of in revenue in our Federal Solutions segment of $786.3 million offset by an increase in revenue in our Critical Infrastructure segment of $400.0 million. See “—Segment Results” below for a further discussion.

Direct costs of contracts


	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2025		December 31, 2024		Dollar			Percent
Direct cost of contracts	$	4,932,711	$	5,344,155	$	(411,444	)		(7.7	)%

Direct cost of contracts decreased $411.4 million for the year ended December 31, 2025 compared to the prior year, due to a decrease of $657.3 million in our Federal Solutions segment offset by an increase of $245.8 million in our Critical Infrastructure segment. The decrease in direct costs of contracts in the Federal Solutions segment is primarily related to reduced volume from our confidential contract, See “Segment Results” below for a further discussion. The increase in direct costs of contracts in the Critical Infrastructure segment is primarily related to increased volume from new and existing contracts.

Equity in (losses) earnings of unconsolidated joint ventures


	Fiscal Year Ended					Variance
(U.S. dollars in thousands)	December 31, 2025		December 31, 2024			Dollar		Percent
Equity in earnings of unconsolidated joint ventures	$	2,583	$	(23,361	)	$	25,944		111.1	%

Equity in losses of unconsolidated joint ventures for the year ended December 31, 2025 improved by $25.9 million compared to the prior year which included significant write-downs on certain joint ventures. The Company is winding down its participation in construction joint ventures.

Selling, general and administrative expenses


	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2025		December 31, 2024		Dollar		Percent
Selling, general and administrative expenses	$	1,016,043	$	954,995	$	61,048		6.4	%

As a percentage of revenue, SG&A increased by 1.9% to 16.0% for the year ended December 31, 2025 compared to 14.1% for the corresponding period last year. The increase in SG&A was primarily due to an increase in segment level SG&A, in particular from business acquisitions, increased investments in bid and proposal activity, critical hires in support of our strong pipeline, and large strategic pursuits aligned to the Trump administration’s priorities. Partially offsetting these increases in SG&A was a decrease in incentive compensation and equity compensation costs. Partially driving the increase in SG&A as a percent of revenue, was the decrease in business volume in the Federal Solutions segment discussed below.

Total other income (expense)


	Twelve Months Ended						Variance
(U.S. dollars in thousands)	December 31, 2025			December 31, 2024			Dollar			Percent
Interest income	$	6,879		$	11,428		$	(4,549	)		(39.8	)%
Interest expense		(51,303	)		(51,582	)		279			0.5	%
Convertible debt repurchase loss		-			(18,355	)		18,355			-
Other income (expense), net		8,861			(1,906	)		10,767			564.9	%
Total other income (expense)	$	(35,563	)	$	(60,415	)	$	24,852			41.1	%

Interest income is related to interest earned on investments in government money funds.

Interest expense for the year ended December 31, 2025 is primarily due to debt related to our Convertible Senior Notes and Term Loan. Interest expense for the year ended December 31, 2024

included a $3.2 million charge related to the March 2024 partial repurchase of the Company's Convertible Senior Notes due 2025 (discussed in more detail below).

During the year ended December 31, 2024, we paid $495.6 million in cash to repurchase $284.6 million aggregate principal amount of our Convertible Senior Notes due 2025 (the "Repurchase Transaction") concurrently with the offering of 2.625% Convertible Senior Notes due 2029. As a result of the Repurchase Transaction, we incurred a $18.4 million loss on debt extinguishment. The Repurchase Transaction is a partial repurchase of our Convertible Senior Notes due 2025. See “Note 11 – Debt and Credit Facilities,” for a further discussion of this transaction.

The amounts in other income (expense), net are primarily related to transaction gains and losses on foreign currency transactions and sublease income, and changes in the fair value of contingent consideration. Other income (expense), net included a net foreign currency gain of $5.5 million for the year ended December 31, 2025 compared to a net foreign currency loss of $6.9 million for the year ended December 31, 2024 for a net foreign currency gain of $12.4 million.

Income tax expense


	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2025		December 31, 2024		Dollar			Percent
Income tax expense	$	73,647	$	76,986	$	(3,339	)		(4.3	)%

Income tax expense decreased in fiscal 2025 primarily due to a change in the jurisdictional mix of earnings, decreases in the change of valuation allowance on NOLs and nondeductible executive compensation subject to Section 162(m), an increase in untaxed income attributed to noncontrolling interests, and an increase in business tax credits, partially offset by decreases in the foreign-derived intangible income (FDII) deduction and windfall equity-based compensation deduction.

Our effective tax rate was 19.3% and 20.9% for the years ended December 31, 2025 and 2024, respectively. The difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the year ended December 31, 2025 primarily relates to state income taxes, valuation allowances and executive compensation subject to Section 162(m), offset by benefits related to untaxed income attributable to noncontrolling interests, earnings subject to lower tax in foreign jurisdictions, and federal business tax credits.

The Company continues to evaluate the implementation of the Organization for Economic Co-operation and Development’s (OECD) Global Anti-Base Erosion (GloBE) rules, which aim to ensure that multinational enterprises (MNEs) pay a 15% minimum level of tax regardless of where the MNE operates. The Company has evaluated the impact of enacted GloBE rules on its 2025 income tax position and has determined there is no material impact on the Company’s income tax provision.

Year ended December 31, 2024 compared to year ended December 31, 2023

The following table sets forth our results of operations for fiscal 2024 and fiscal 2023 as a percentage of revenue.


	Fiscal Year Ended
	December 31, 2024			December 31, 2023
Revenues		100.0	%		100.0	%
Direct costs of contracts		79.2	%		77.8	%
Equity in (losses) earnings of unconsolidated joint ventures		(0.3	)%		(0.9	)%
Selling, general and administrative expenses		14.1	%		16.0	%
Operating income		6.3	%		5.3	%
Interest income		0.2	%		0.0	%
Interest expense		(0.8	)%		(0.6	)%
Convertible debt repurchase loss		(0.3	)%		(—	)%
Other income, net		(0.0	)%		0.1	%
Total other income benefit (expense)		(0.9	)%		(0.4	)%
Income before income tax expense		5.4	%		4.9	%
Income tax expense		(1.1	)%		(1.0	)%
Net income including noncontrolling interests		4.3	%		3.8	%
Net income attributable to noncontrolling interests		(0.8	)%		(0.9	)%
Net income attributable to Parsons Corporation		3.5	%		3.0	%

Revenue


	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2024		December 31, 2023		Dollar		Percent
Revenue	$	6,750,576	$	5,442,749	$	1,307,827		24.0	%

Revenue for the year ended December 31, 2024 compared to the prior year increased $1.3 billion. Revenue increased in both the Federal Solutions and Critical Infrastructure segments by $986.4 million and $321.4 million, respectively. See “—Segment Results” below for further discussion.

Direct costs of contracts


	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2024		December 31, 2023		Dollar		Percent
Direct cost of contracts	$	5,344,154	$	4,236,735	$	1,107,419		26.1	%

Direct cost of contracts for the year ended December 31, 2024 compared to the prior year increased $1.1 billion. Direct cost of contracts increased in both the Federal Solutions and Critical Infrastructure segments by $812.5 million and $294.9 million, respectively. The increase in direct costs of contracts in both the Federal Solutions and Critical Infrastructure segments was primarily related to increased volume from new and existing contracts.

Equity in ~~(losses)~~ earnings of unconsolidated joint ventures

	Fiscal Year Ended						Variance
(U.S. dollars in thousands)	December 31, 2024			December 31, 2023			Dollar		Percent
Equity in losses of unconsolidated joint ventures	$	(23,361	)	$	(47,751	)	$	24,390		51.1	%
Equity in earnings of unconsolidated joint ventures	$	(23,361	)	$	(47,751	)	$	24,390		51.1	%

6568

Equity in losses of unconsolidated joint ventures for the year ended December 31, 2024 improved by $24.4 million compared to the prior year. Impacting equity in losses of unconsolidated joint ventures for the year ended December 31, 2024 were write-downs of $51.7 million related to Parsons' participation in a design build joint venture. For the year ended December 31, 2023 the Company had write-downs of $83.4 million, inclusive of $57.9 million related to the design build joint venture referenced above. Results for the year ended December 31, 2023 also included earnings on higher margin change orders which did not reoccur for the year ended December 31, 2024. Joint venture volume has decreased year-over-year as we move away from our participation in construction joint ventures.

Selling, general and administrative expenses


	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2024		December 31, 2023		Dollar		Percent
Selling, general and administrative expenses	$	954,995	$	869,905	$	85,090		9.8	%

As a percentage of revenue, SG&A decreased by 1.9% to 14.1% for the year ended December 31, 2024 compared ~~to16~~to 16.0% for the corresponding period last year.

Total other ~~income~~ (expense) income

	Fiscal Year Ended						Variance
(U.S. dollars in thousands)	December 31, 2024			December 31, 2023			Dollar			Percent
Interest income	$	11,428		$	2,191		$	9,237			421.6	%
Interest expense		(51,582	)		(31,497	)		(20,085	)		(63.8	)%
Convertible debt repurchase loss		(18,355	)		-			(18,355	)	n/a	-
Other income (expense), net		(1,906	)		5,001			(6,907	)		(138.1	)%
Total other income (expense)	$	(60,415	)	$	(24,305	)	$	(36,110	)		(148.6	)%

Interest income is related to interest earned on investments in government money funds. Interest income increased for the year ended December 31, 2024 compared to the corresponding period last year is due to higher cash balances held and increased interest rates compared to the corresponding period last year.

Interest expense for the year ended December 31, 2024 is primarily due to debt related to our Convertible Senior Notes and Delayed Draw Term Loan. The increase in Interest expense for the year ended December 31, 2024 compared to the corresponding period last year is primarily related to an increase in debt balances and a $3.2 million charge from the acceleration of the amortization of debt issuance costs associated with the partial repurchase of the 0.25% Convertible Senior Notes due 2025 discussed below.

During the year ended December 31, 2024, we paid $495.6 million in cash to repurchase $284.6 million aggregate principal amount of our Convertible Senior Notes due 2025 (the "Repurchase Transaction") concurrently with the offering of 2.625% Convertible Senior Notes due 2029. As a result of the Repurchase Transaction, we incurred an $18.4 convertible debt repurchase ~~loss1~~loss. The Repurchase Transaction is a partial repurchase of our Convertible Senior Notes due 2025. See “Note 11 – Debt and Credit Facilities,” for a further discussion of this transaction.

~~1During~~The ~~the~~amounts ~~first~~in ~~quarter~~other ofincome ~~2024~~(expense), ~~prior to the early adoption of ASU 2024-04~~net, ~~the~~are ~~Company~~primarily ~~recorded~~related ato ~~$211.0~~transaction ~~million~~gains ~~loss~~and losses on ~~debt~~foreign ~~extinguishment~~currency ~~associated~~transactions, ~~with~~sublease ~~the~~income, ~~0.25%~~and ~~Convertible Senior Notes due 2025. Please see "Note 2—Summary of Significant Accounting Policies—New Accounting Pronouncements" for~~ a ~~discussion~~change ofin the ~~Company's~~fair ~~adoption~~value of ~~ASU~~contingent ~~2024-04~~consideration.. ~~As a result of the early adoption, the extinguishment charge was reversed from the~~

6669

Company's consolidated financial statements and a convertible debt repurchase loss was recorded as described above.

The amounts in other income (expense), net, are primarily related to transaction gains and losses on foreign currency transactions, sublease income, and a change in the fair value of contingent consideration.

Income tax expense


	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2024		December 31, 2023		Dollar		Percent
Income tax expense	$	76,986	$	56,138	$	20,848		37.1	%

Income tax expense increased in fiscal 2024 primarily due to an increase in overall pre-tax income, increases in current year foreign Net Operating Losses (NOLs) subject to valuation allowances and an increase in non-deductible executive compensation subject to Section 162(m), partially offset by increases in the foreign-derived intangible income (FDII) deduction, and increased equity based-compensation deductions.

Our effective tax rate was 20.9% and 21.3% for the years ended December 31, 2024 and 2023, respectively. The difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the year ended December 31, 2024 primarily relates to state income taxes, valuation allowance and executive compensations subject to Section 162(m) offset by benefits related to untaxed income attributable to noncontrolling interests, earnings in lower tax jurisdictions, the FDII deduction, and equity-based compensation.

In 2021 the Organization for Economic Co-operation and Development (OECD) announced an inclusive Framework on Base Erosion and Profit Shifting (BEPS) including Pillar Two Model Rules defining the global minimum tax, also known as the Global Anti-Base Erosion (GloBE), which aims to ensure that multinational enterprises (MNEs) pay a 15% minimum level of tax regardless of where the MNE operates. The OECD released additional administrative guidance in June 2024 and January 2025. Many non-US tax jurisdictions have either recently enacted legislation to adopt components of the Pillar Two Model Rules beginning in 2024 and/or have announced their plans to enact legislation in future years. The Company has evaluated the implementation of Pillar Two on its 2024 income tax position based on currently enacted legislation and has determined there is no material impact. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending enactment of legislation by individual countries.

Year ended December 31, 2023 compared to year ended December 31, 2022

The following table sets forth our results of operations for fiscal 2023 and fiscal 2022 as a percentage of revenue.

	Fiscal Year Ended
	December 31, 2023			December 31, 2022
Revenues		100.0	%		100.0	%
Direct costs of contracts		77.8	%		77.4	%
Equity in earnings of unconsolidated joint ventures		(0.9	)%		0.4	%
Selling, general and administrative expenses		16.0	%		18.5	%
Operating income		5.3	%		4.4	%
Interest income		0.0	%		0.0	%
Interest expense		(0.6	)%		(0.6	)%
Other income, net		0.1	%		0.1	%
Total other income benefit (expense)		(0.4	)%		(0.5	)%
Income before income tax expense		4.9	%		4.0	%
Income tax expense		(1.0	)%		(0.9	)%
Net income including noncontrolling interests		3.8	%		3.0	%
Net income attributable to noncontrolling interests		(0.9	)%		(0.7	)%
Net income attributable to Parsons Corporation		3.0	%		2.3	%

Revenue

	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2023		December 31, 2022		Dollar		Percent
Revenue	$	5,442,749	$	4,195,272	$	1,247,477		29.7	%

Revenue for the year ended December 31, 2023 compared to the prior year increased $1.2 billion. Revenue increased in both the Federal Solutions and Critical Infrastructure segments by $807.7 million and $439.8 million, respectively. See “—Segment Results” below for further discussion.

Direct costs of contracts

	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2023		December 31, 2022		Dollar		Percent
Direct cost of contracts	$	4,236,735	$	3,248,550	$	988,185		30.4	%

Direct cost of contracts for the year ended December 31, 2023 compared to the prior year increased $988.2 million. Direct cost of contracts increased in both the Federal Solutions and Critical Infrastructure segments by $672.1 million and $316.1 million, respectively. The increases were primarily due to an increase in business volume and from business acquisitions offset by a decrease of $37.9 million in the Critical Infrastructure segment related to a legal matter on a previously completed contract.

Equity in earnings of unconsolidated joint ventures

	Fiscal Year Ended					Variance
(U.S. dollars in thousands)	December 31, 2023			December 31, 2022		Dollar			Percent
Equity in (losses) earnings of unconsolidated joint ventures	$	(47,751	)	$	16,347	$	(64,098	)		(392.1	)%

Equity in earnings of unconsolidated joint ventures for the year ended December 31, 2023 decreased by $64.1 million compared to the prior year. The decrease was primarily related to write-downs on joint ventures of $83.4 million. $57.9 million of the joint venture write-downs related to Parsons’ participation in a design build joint venture.

Selling, general and administrative expenses

	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2023		December 31, 2022		Dollar		Percent
Selling, general and administrative expenses	$	869,905	$	777,403	$	92,502		11.9	%

As a percentage of revenue, SG&A decreased by 2.5% to 16.0% for the year ended December 31, 2023 compared to 18.5% for the corresponding period last year.

Total other (expense) income

	Fiscal Year Ended						Variance
(U.S. dollars in thousands)	December 31, 2023			December 31, 2022			Dollar			Percent
Interest income	$	2,191		$	966		$	1,225			126.8	%
Interest expense		(31,497	)		(23,185	)		(8,312	)		(35.9	)%
Other income (expense), net		5,001			2,775			2,226			80.2	%
Total other income (expense)	$	(24,305	)	$	(19,444	)	$	(4,861	)		(25.0	)%

Interest income is related to interest earned on investments in government money funds. Interest income increased for the year ended December 31, 2023 compared to the corresponding period last year primarily due to an increase in interest rates compared to the prior year on investments in government money funds.

Interest expense is primarily due to debt related to our Convertible Senior Notes and Delayed Draw Term Loan. Interest expense increased for the year ended December 31, 2023 compared to the corresponding period last year primarily due to higher interest rates on borrowings.

The amounts in other income (expense), net, are primarily related to transaction gains and losses on foreign currency transactions, sublease income, and a change in the estimated fair value of contingent consideration.

Income tax expense

	Fiscal Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2023		December 31, 2022		Dollar		Percent
Income tax expense	$	56,138	$	39,657	$	16,481		41.6	%

Income tax expense increased in fiscal 2023 primarily due to an increase in overall earnings and an increase in foreign withholding taxes partially offset by increases in the foreign-derived intangible income (FDII) deduction and earnings in lower tax jurisdictions.

Our effective tax rate was 21.3% and 23.9% for the years ended December 31, 2023 and 2022, respectively. The difference between the statutory U.S. federal income tax rate of 21% and the effective tax rate for the year ended December 31, 2023 primarily relates to state income taxes, valuation allowance on foreign tax credit carryovers originating from foreign withholding taxes offset in part by

benefits related to income attributable to noncontrolling interests, earnings in lower tax jurisdictions, the FDII deduction, and federal business tax credits.

Effective for tax year 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to currently deduct research and development expenditures in the year incurred and requires taxpayers to amortize such expenditures over five years for tax purposes (15 years for foreign research and development expenditures). This provision resulted in additional cash tax liability for the 2023 tax year of approximately $12 million. To date, there has been no enacted legislation that would change the tax treatment of these research and development expenditures and the Company continues to capitalize and amortize these expenses in accordance with the law.

Non-GAAP Financial Measures:

(U.S. dollars in thousands)	December 31, 2024			December 31, 2023			December 31, 2022
	Fiscal Year Ended
(U.S. dollars in thousands)	December 31, 2025			December 31, 2024			December 31, 2023
Other Information:
Adjusted EBITDA (1)	$	~~604~~609,~~953~~306		$	~~464~~604,~~673~~953		$	~~352~~464,~~782~~673
Net Income Margin (2)		4.39	%		34.83	%		3.08	%
Adjusted EBITDA Margin (3)		9.06	%		89.50	%		8.45	%

(1)

A reconciliation of net income attributable to Parsons Corporation to Adjusted EBITDA is set forth below (in thousands).

(2)

Net Income Margin is calculated as net income including noncontrolling interest divided by revenue in the applicable period.

(3)

Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by revenue in the applicable period.

December 31, 2024

December 31, 2023

December 31, 2022

December 31, 2025

December 31, 2024

December 31, 2023

Net income attributable to Parsons Corporation

~~235~~241,~~053~~139

~~161~~235,~~149~~053

96161,~~664~~149

Interest expense, net

4044,~~154~~424

2940,~~306~~154

2229,~~219~~306

Income tax expense (benefit)

76,986

56,138

39,657

Income tax expense

73,647

76,986

56,138

Depreciation and amortization

99116,~~251~~486

~~119~~99,~~973~~251

~~120~~119,~~501~~973

Net income attributable to noncontrolling interests

5567,~~612~~725

4655,~~766~~612

2946,~~901~~766

Equity-based compensation

6140,~~492~~225

3661,~~151~~492

2436,~~354~~151

Transaction-related costs (a)

1718,~~138~~205

1217,~~013~~138

1612,~~270~~013

Convertible debt repurchase loss

~~18,355~~-

-18,355

Restructuring (b)

-2,653

~~1,244~~-

~~213~~1,244

Other (c)

~~912~~4,802

~~1,933~~912

31,~~003~~933

Adjusted EBITDA

~~604~~609,~~953~~306

~~464~~604,~~673~~953

~~352~~464,~~782~~673

(a)

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

(b)

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

(c)

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

Adjusted EBITDA is a supplemental measure of our operating performance included in this Annual Report on Form 10-K because it is used by management and our board of directors to assess our financial performance both on a segment and on a consolidated basis. We discuss Adjusted EBITDA because our management uses this measure for business planning purposes, including to manage the business against internal projected results of operations and to measure the performance of the business ~~generally. Adjusted EBITDA is frequently used by analysts, investors and other interested parties to evaluate companies in our industry.~~

things, impairment of goodwill, intangible and other assets, interest and other expenses recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs, equity-based compensation, and expenses related to our corporate restructuring initiativesgenerally. Adjusted EBITDA ~~should~~is ~~not~~frequently beused ~~construed as an inference that our future results will be unaffected~~ by ~~unusual or non-recurring items. Additionally~~analysts, ~~Adjusted~~investors ~~EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect tax payments, debt service requirements, capital expenditures~~ and ~~certain~~ other ~~cash~~interested ~~costs~~parties ~~that~~to ~~may~~evaluate ~~recur~~companies in the future, including, among other things, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. Management compensates for these limitations by relying on our Uindustry.S. GAAP results in addition to using Adjusted EBITDA supplementally. Our measure of Adjusted EBITDA is not necessarily comparable to similarly titled captions of other companies due to different methods of calculation.

Adjusted EBITDA is not a U.S. GAAP measure of our financial performance or liquidity and should not be considered as an alternative to net income as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with U.S. GAAP. We define Adjusted EBITDA as net income attributable to Parsons Corporation, adjusted to include net income 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 we do not consider in our evaluation of ongoing operating performance. These other items include, among other things, impairment of goodwill, intangible and other assets, interest and other expenses recognized on litigation matters, expenses incurred in connection with acquisitions and other non-recurring transaction costs, equity-based compensation, and expenses related to our corporate restructuring initiatives. Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future, including, among other things, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. Management compensates for these limitations by relying on our U.S. GAAP results in addition to using Adjusted EBITDA supplementally. Our measure of Adjusted EBITDA is not necessarily comparable to similarly titled captions of other companies due to different methods of calculation.

See “Segment Results” below and "Note 20—Segments Information” in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further discussion regarding our segment Adjusted EBITDA attributable to Parsons Corporation

Segment Results

We evaluate segment operating performance using segment revenue and segment Adjusted EBITDA attributable to Parsons Corporation. Adjusted EBITDA attributable to Parsons Corporation is Adjusted EBITDA excluding Adjusted EBITDA attributable to noncontrolling interests.

The following table shows Adjusted EBITDA attributable to Parsons Corporation for each of our reportable segments and Adjusted EBITDA attributable to noncontrolling interests:

Fiscal Year Ended

(U.S. dollars in thousands)

December 31, ~~2024~~2025

December 31, ~~2023~~2024

December 31, ~~2022~~2023

Federal Solutions Adjusted EBITDA attributable to Parsons Corporation

~~415~~281,~~338~~116

~~289~~415,~~250~~338

~~199~~289,~~004~~250

Critical Infrastructure Adjusted EBITDA attributable to Parsons Corporation

~~132~~260,~~901~~106

~~127~~132,~~785~~901

~~123~~127,~~385~~785

Adjusted EBITDA attributable to noncontrolling interests

5668,~~714~~084

4756,~~638~~714

3047,~~393~~638

Total Adjusted EBITDA

~~604~~609,~~953~~306

~~464~~604,~~673~~953

~~352~~464,~~782~~673

Year ended December 31, 2025 compared to year ended December 31, 2024

Federal Solutions


	The Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2025		December 31, 2024		Dollar			Percent
Revenue	$	3,220,797	$	4,007,114	$	(786,317	)		(19.6	)%
Adjusted EBITDA attributable to Parsons Corporation	$	281,116	$	415,338	$	(134,222	)		(32.3	)%

The decrease in Federal Solutions revenue for the year ended December 31, 2025 compared to the corresponding period last year was primarily driven by our confidential contract operating at a reduced volume as a result of the Department of State reorganization issued May 29, 2025. This decrease was offset by the recognition of incentive fees, growth on existing contracts, and the ramp-up of new task orders.

The decrease in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the year ended December 31, 2025 compared to the prior year was primarily due to the factors impacting revenue discussed above and an increase in SG&A including investments made in key personnel and bid and proposal activity on strategic pursuits.

Critical Infrastructure


	The Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2025		December 31, 2024		Dollar		Percent
Revenue	$	3,143,448	$	2,743,462	$	399,986		14.6	%
Adjusted EBITDA attributable to Parsons Corporation	$	260,106	$	132,901	$	127,205		95.7	%

The increase in Critical Infrastructure revenue for the year ended December 31, 2025 compared to the corresponding period last year was primarily related to organic growth of 10% and $113.9 million from business acquisitions. Organic growth was primarily due to an increase in business volume from existing contracts and ramping up of recent awards.

The increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons for the year ended December 31, 2025 compared to the corresponding period last year was primarily due to the revenue impacts discussed above, recent business acquisitions, and improvement in equity in earnings (losses) from unconsolidated joint ventures. These increases in Adjusted EBITDA, were partially offset by an increase in SG&A.

Year ended December 31, 2024 compared to year ended December 31, 2023

Federal Solutions


	The Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2024		December 31, 2023		Dollar		Percent
Revenue	$	4,007,114	$	3,020,701	$	986,413		32.7	%
Adjusted EBITDA attributable to Parsons Corporation	$	415,338	$	289,250	$	126,088		43.6	%

The increase in Federal Solutions revenue for the year ended December 31, 2024 compared to the corresponding period last year was primarily related to organic growth of 30% and $73.6 million from business acquisitions. Organic growth was primarily due to the ramp up of recent awards including growth on a significant contract, growth of existing contracts, partially offset by the winding down of certain contracts. Revenue for the year ended December 31, 2023 included incentive fees on two contracts of approximately $20 million that did not reoccur for the year ended December 31, 2024.

The increase in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the year ended December 31, 2024 compared to the prior year was primarily due to the factors impacting revenue discussed above.

Critical Infrastructure


	The Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2024		December 31, 2023		Dollar		Percent
Revenue	$	2,743,462	$	2,422,048	$	321,414		13.3	%
Adjusted EBITDA attributable to Parsons Corporation	$	132,901	$	127,785	$	5,116		4.0	%

The increase in Critical Infrastructure revenue for the year ended December 31, 2024 compared to the corresponding period last year was primarily related to organic growth of 12% and $29.9 million from business acquisitions. Organic growth was primarily due to an increase in business volume from existing contracts and ramping up of recent awards offset by the winding down of certain contracts and contract write-downs of $44.5 million.

The increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons for the year ended December 31, 2024 compared to the corresponding period last year was primarily due to the increase in organic revenue. This increase was offset by the contract write-downs discussed above along with a write-down in equity in losses from unconsolidated joint ventures of $51.7 million compared to write-downs of $83.4 million for the year ended December 31, 2023. Also impacting Adjusted EBITDA were higher margin change orders on an unconsolidated joint venture for the year ended December 31, 2023 which did not reoccur for the year ended December 31, 2024.

Year ended December 31, 2023 compared to year ended December 31, 2022

Federal Solutions

	The Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2023		December 31, 2022		Dollar		Percent
Revenue	$	3,020,701	$	2,212,987	$	807,714		36.5	%
Adjusted EBITDA attributable to Parsons Corporation	$	289,250	$	199,004	$	90,246		45.3	%

The increase in Federal Solutions revenue for the year ended December 31, 2023 compared to the corresponding period last year was primarily due to organic growth of 25% and increases from business acquisitions of $264.1 million.

The increase in Federal Solutions Adjusted EBITDA attributable to Parsons Corporation for the year ended December 31, 2023 compared to the prior year was primarily due to the factors impacting revenue discussed above and non-recurring incentive fees of approximately $20 million. These increases were offset by higher selling general and administrative costs from business acquisitions, business development and sales activities, and incentive compensation costs as a result of the company's strong operating performance and growing employee base.

Critical Infrastructure

	The Year Ended				Variance
(U.S. dollars in thousands)	December 31, 2023		December 31, 2022		Dollar		Percent
Revenue	$	2,422,048	$	1,982,285	$	439,763		22.2	%
Adjusted EBITDA attributable to Parsons Corporation	$	127,785	$	123,385	$	4,400		3.6	%

The increase in Critical Infrastructure revenue for the year ended December 31, 2023 compared to the corresponding period last year was substantially due to organic growth.

The increase in Critical Infrastructure Adjusted EBITDA attributable to Parsons for the year ended December 31, 2023 compared to the corresponding period last year was primarily due to increases in business volume and a decrease in direct cost of contracts of $38 million related to a legal matter on a previously completed contract, offset by write-downs on joint ventures discussed above and higher selling general and administrative costs from business development and sales activities and higher incentive compensation costs as a result of the company's strong operating performance and growing employee base.

Liquidity and Capital Resources

We currently finance our operations and capital expenditures through a combination of internally generated cash from operations, our Convertible Senior Notes, ~~Delayed Draw~~ Term Loan and periodic borrowings under our Revolving Credit Facility.

Generally, cash provided by operating activities has been adequate to fund our operations. Due to fluctuations in our cash flows and growth in our operations, it may be necessary from time to time in the future to borrow under our Credit Agreement to meet cash demands. Our management regularly monitors certain liquidity measures to monitor performance. We calculate our available liquidity as a sum of cash and cash equivalents from our consolidated balance sheet plus the amount available and unutilized on our Revolving Credit Facility.

As of December 31, ~~2024~~2025, we believe we have adequate liquidity and capital resources to fund our operations, support our debt service and support our ongoing acquisition strategy for at least the next twelve months based on the liquidity from cash provided by our operating activities, cash and cash equivalents on-hand and our borrowing capacity under our Revolving Credit Facility. Management continually monitors debt maturities to strategically execute optimal terms and ensure appropriate levels of working capital liquidity are maintained for the company.

Cash Flows

Cash received from customers, either from the payment of invoices for work performed or for advances in excess of revenue recognized, is our primary source of cash. We generally do not begin work on contracts until funding is appropriated by the customers. Billing timetables and payment terms on our contracts vary based on a number of factors, including whether the contract type is cost-plus, time-and-materials, or fixed-price. We generally bill and collect cash more frequently under cost-plus and time-and-materials contracts, as we are authorized to bill as the costs are incurred or work is performed. In contrast, we may be limited to bill certain fixed-price contracts only when specified milestones, including deliveries, are achieved. A number of our contracts may provide for performance-based payments, which allow us to bill and collect cash prior to completing the work.

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.

~~Accounts~~Billed ~~receivable~~accounts ~~is the principal component of our working capital and is generally driven by revenue growth. Accounts~~ receivable ~~includes~~represents ~~billed and unbilled~~ amounts. ~~The~~billed ~~total amount of our accounts receivable can vary significantly over time but is generally sensitive~~ to ~~revenue~~clients ~~levels.~~that Wehave ~~experience~~not ~~delays~~been ~~in collections from time to time from Middle East customers~~collected. ~~Net~~Unbilled ~~days sales outstanding, which we refer to as net DSO, is calculated by dividing (i)~~ accounts receivable ~~(net~~represents ofamounts ~~project~~where ~~accruals, billings in excess of revenue and accounts payable) by (ii) average revenue per day (calculated by dividing trailing twelve months revenue by~~ the ~~number~~Company ofhas ~~days~~a inpresent ~~that~~contractual ~~period).~~right ~~We focus on collecting outstanding receivables~~ to ~~reduce~~bill ~~net~~but ~~DSO~~an ~~and~~invoice ~~improve~~has ~~working~~not ~~capital.~~been ~~Net~~issued ~~DSO~~to ~~was~~the 55customer ~~days~~ at ~~December~~the ~~31,~~period-end ~~2024, down from 59 days at December 31, 2023 and 69 days at December 31, 2022~~date. ~~Our working capital (current assets less current liabilities) was $546.8 million at December 31, 2024, $726.6 million at December 31, 2023 and $611.7 million at December 31, 2022.~~

~~Our~~Accounts ~~cash~~receivable is the principal component of our working capital and ~~cash~~is ~~equivalents~~generally ~~increased~~driven by ~~$180~~revenue growth.6 ~~million~~Accounts receivable includes billed and unbilled amounts. The total amount of our accounts receivable can vary significantly over time but is generally sensitive to ~~$453~~revenue levels.5 ~~million~~We experience delays in collections from time to time from Middle East customers. Net days sales outstanding, which we refer to as net DSO, is calculated by dividing (i) accounts receivable (net of project accruals, billings in excess of revenue and accounts payable) by (ii) average revenue per day (calculated by dividing trailing twelve months revenue by the number of days in that period). We focus on collecting outstanding receivables to reduce net DSO and improve working capital. Net DSO was 67 days at December 31, ~~2024~~2025, up from ~~$272.9~~55 ~~million~~days at December 31, ~~2023.~~2024 ~~This~~and ~~compares~~59 todays anat ~~increase~~December in31, ~~cash~~2023. ~~and~~Our ~~cash~~working ~~equivalents~~capital of(current assets less current liabilities) was $101.42 ~~million~~billion toat December 31, 2025, $~~272~~546.98 million at December 31, ~~2023~~2024 ~~from~~and $~~262~~726.56 million at December 31, ~~2022~~2023.

Our cash and cash equivalents increased by $12.8 million to $466.4 million at December 31, 2025 from $453.5 million at December 31, 2024. This compares to an increase in cash and cash equivalents of $180.6 million to $453.5 million at December 31, 2024 from $272.9 million at December 31, 2023.

The following table summarizes our sources and uses of cash over the periods presented (in thousands):

Fiscal Year Ended

December 31, 2024

December 31, 2023

December 31, 2022

December 31, 2025

December 31, 2024

December 31, 2023

Net cash provided by operating activities

~~523~~478,~~606~~382

~~407~~523,~~699~~606

~~237~~407,~~526~~699

Net cash used in investing activities

(~~556~~255,~~715~~584

)

(~~375~~556,~~970~~715

)

(~~417~~375,~~468~~970

)

Net cash (used in) provided by financing activities

~~218~~(214,~~749~~100

)

~~(21~~218,~~871~~749

)

~~100~~(21,~~368~~871

)

Effect of exchange rate changes

(54,~~035~~142

)

~~546~~(5,035

)

~~(1,770~~546

)

Net increase (decrease) in cash and cash equivalents

~~180~~12,~~605~~840

10180,~~404~~605

~~(81~~10,~~344~~404

)

Operating Activities

Net cash provided by operating activities consists primarily of net income adjusted for noncash items, such as: equity in (losses) earnings of unconsolidated joint ventures, contributions of treasury stock, depreciation and amortization of property and equipment and intangible assets, provisions for doubtful accounts, amortization of deferred gains, and impairment charges. The timing between the conversion of our billed and unbilled receivables into cash from our customers and disbursements to our employees and vendors is the primary driver of changes in our working capital. Our operating cash flows are primarily affected by our ability to invoice and collect from our clients in a timely manner, our ability to manage our vendor payments and the overall profitability of our contracts.

Net cash provided by operating activities ~~increased~~decreased $~~115~~45.92 million to $~~523~~478.64 million during ~~2024~~2025 compared to $~~407~~523.76 million during ~~2023~~2024. The ~~increase~~decrease in net cash provided by operating activities is primarily due to ~~a $98.4 million change in net income after adjusting for non-cash items and convertible debt settlement and from~~ changes in our working capital accounts of $4666.49 million (primarily from contract assets and prepaid expenses, accrued expenses and other current liabilities, and other assets offset by accounts payable, ~~accrued~~and ~~expenses~~contract ~~and~~liabilities). ~~other~~This ~~current~~decrease ~~liabilities,~~was ~~and~~offset ~~contract~~by ~~liabilities)~~a $15.9 ~~These~~million ~~increase~~change ~~were~~in ~~offset~~net income after adjusting for non-cash items and convertible debt settlement and by a $295.08 million change in cash used for other long-term liabilities.

Net cash provided by operating activities increased $~~170~~115.29 million to $~~407~~523.76 million during ~~2023~~2024 compared to $~~237~~407.57 million during ~~2022~~2023. The increase in net cash provided by operating activities is primarily due to a $~~170~~98.14 million change in net income after adjusting for non-cash items and ~~the~~convertible ~~10-day~~debt ~~improvement~~settlement inand ~~DSO. This increase was offset, in part,~~ from changes in our working capital accounts of $646.34 million. ~~The~~(primarily ~~changes~~from incontract ~~the~~assets ~~Company's~~and ~~various~~prepaid ~~working~~expenses ~~capital~~and ~~accounts~~other ~~were~~assets ~~driven~~offset ~~primarily~~ by ~~the~~accounts ~~significant increase in business volume during the year ended December 31~~payable, ~~2023~~accrued ~~compared~~expenses toand ~~the~~other ~~corresponding period last year.~~

current liabilities, and contract liabilities). These increase were offset by a $29.0 million change in cash used for other long-term liabilities.

Investing Activities

Net cash used in investing activities consists primarily of cash flows associated with capital expenditures and business acquisitions.

Net cash used in investing activities ~~increased~~decreased $~~180~~301.71 million to $~~556~~255.76 million during ~~2024~~2025 compared to $~~376~~556.07 million during ~~2023~~2024. The change was primarily driven by a $~~206~~283.86 million ~~increase~~decrease in payments for acquisitions, and a $1450.3 million ~~from~~reduction in investments in unconsolidated joint ventures, ~~and~~offset by an increase of $818.8 million ~~from~~in capital expenditures ~~offset~~and ~~by a~~ $4914.97 million ~~increase~~ in return of investments in unconsolidated joint ventures. The increase in capital expenditures is primarily due to facilities related investments.

Net cash used in investing activities ~~decreased~~increased $41180.57 million to $~~376~~556.07 million during ~~2023~~2024 compared to $~~417~~376.50 million during ~~2022~~2023. The change was primarily driven by a $~~157~~206.58 million ~~reduction~~increase in payments for acquisitions, ~~offset in part by a~~ $~~102~~14.03 million ~~increase~~from in investments in unconsolidated joint ventures, aand $98.8 million ~~increase~~from in capital expenditures ~~(primarily~~offset ~~from~~by ~~computer~~a ~~systems~~$49.9 ~~and~~million ~~equipment)~~increase ~~and~~in ~~a change from~~ return of investments in ~~unconsolidated~~consolidated joint ventures ~~of $4~~.~~4 million.~~

Financing Activities

Net cash provided by (used in) financing activities is primarily associated with proceeds from debt, the repayment thereof, transactions related to the Company’s common stock, and contributions by and distributions to noncontrolling interests.

Net cash used in financing activities changed by $432.8 million to $214.1 million used in 2025 compared to $218.7 million provided by in 2024. The change in cash flows provided by (used in) financing activities is primarily driven by net cash inflows from our convertible bond transactions of $302.4 million for the year ended December 31, 2024. See “Note 11 – Debt and Credit Facilities,” for a further discussion of these transactions and proceeds from the term loan of $100 million. Offsetting cash provided by financing activities were $125.0 million of repurchase of common stock and a $34.1 million change in distributions to noncontrolling interests.

During the year ended December 31, 2025, the Company paid $113.4 million to holders of the remaining balance of the Company's Convertible Senior Notes due 2025 that matured on August 15, 2025.

Net cash provided by (used in) financing activities increased by $240.6 million to $218.7 million in 2024 compared to $(21.9) million in 2023. The change in cash flows from financing activities is primarily driven by net cash inflows from our convertible bond transactions which generated $285.4 million in cash. See “Note 11 – Debt and Credit Facilities,” for a further discussion of these transactions. This increase was offset in part by distributions to noncontrolling interests of $16.7 million, taxes paid on vested stock of $15.3 million and $14.0 million from repurchases of common stock.

~~Net~~In ~~cash~~January ~~provided~~2026, bythe ~~(used~~company ~~in)~~spent ~~financing~~approximately ~~activities changed by~~ $~~122.2~~340 million to ~~$(21.9)~~acquire ~~million~~Altamira inTechnologies ~~2023 compared to $100~~Corporation.4 ~~million~~The inCompany ~~2022.~~drew ~~This~~down ~~change was primarily due to a decrease of~~ $~~150.0~~350 million from ~~net~~the ~~borrowing~~revolving ~~related~~credit ~~activities~~facility ~~and~~to apartially ~~$7.4~~fund ~~million~~the ~~change~~acquisition inand ~~contributions~~for byworking ~~noncontrolling~~capital ~~interests offset by a decrease in distributions to noncontrolling interests of $11~~needs.6 ~~billion,~~The acompany ~~decrease~~expects ~~in cash used~~ to ~~repurchase~~pay ~~common~~back ~~stock~~the ofoutstanding ~~$11.0~~balance ~~million~~under ~~and~~the ~~from~~revolving ~~$11.2~~credit ~~million~~facility ~~of payments~~ in ~~warrants~~February ~~for~~2026 ~~the~~from ~~year~~working ~~ended December 31, 2022 that did not reoccur in 2023~~capital.

Letters of Credit

We also have 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 $~~328~~356.42 million as of December 31, ~~2024~~2025. Letters of credit outstanding under the Credit Agreement total $4341.08 million.

Critical Accounting Policies and Estimates

Our significant accounting policies are described in “Note 2—Summary of Significant Accounting Policies” in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Management makes estimates and judgments in preparing our consolidated financial statements. These estimates and judgments affect the reported amounts of certain assets and liabilities and the revenues and expenses reported for the periods presented in the consolidated financial statements. Although such estimates and assumptions are based on information available through the date of the issuance of our consolidated financial statements, actual results could differ significantly from those estimates and assumptions. Our estimates, judgments and assumptions are evaluated periodically and adjusted accordingly.

We believe that the following items are the most critical accounting policies and estimates that involved significant judgment as we prepared our financial statements. We consider an accounting policy or estimate to be critical if the policy or estimate requires assumptions to be made that were uncertain at the time they were made and if changes in these assumptions could have a material impact on our financial condition or results of operations.

or estimate to be critical if the policy or estimate requires assumptions to be made that were uncertain at the time they were made and if changes in these assumptions could have a material impact on our financial condition or results of operations.

Revenue Recognition and Cost Estimation

In our industry, recognition of revenue and profit on long-term contracts requires the use of assumptions and estimates related to total contract revenue, total cost at completion, and the measurement of progress towards completion. Estimates are continually evaluated as work progresses and are revised when necessary. When a change in estimate is determined to have an impact on contract revenue or profit, we record a positive or negative adjustment to the consolidated statements of income.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. To the extent a contract is deemed to have multiple performance obligations, we allocate the transaction price of the contract to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. We determine the relative standalone selling price utilizing observable prices for the sale of the underlying goods or services. Contracts are considered to have a single performance obligation if the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts or is not distinct in the context of the contract, which is mainly because we provide a significant service of integrating a complex set of tasks and components into a single project or capability. Engineering and construction contracts are generally accounted for as a single performance obligation, while our engineering and construction supervision contracts are accounted for as two separate performance obligations. When providing construction supervision services, we are not liable for the construction of the asset, but have an overall responsibility to oversee, coordinate, measure, and evaluate the quality of construction work and the performance of the construction contractor on behalf of the customer. Customers are generally billed as we satisfy our performance obligations and payment terms typically range from 30 to 120 days from the invoice date. Billings under certain fixed-price contracts may be based upon the achievement of specified milestones, while some arrangements may require advance customer payment. Our contracts generally do not include a significant financing component.

The transaction price for our contracts may include variable consideration, which includes award and incentive fees, increases to the transaction price for approved and unpriced change orders, claims, and reductions to transaction price for liquidated damages. We recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to-date is recognized in the period the adjustment is identified. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, we recognize the total loss in the quarter it is identified.

Claims revenue is related to amounts in excess of agreed contract price that we seek to collect from clients or others for customer-caused delays, errors in specifications and designs, contract terminations, change orders that are either in dispute or are unapproved as to both price and scope, or other causes of unanticipated additional contract costs, including factors outside of our control, where we therefore believe we are entitled to additional compensation. Claims revenue, when recorded, is only recorded to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur. We include certain unapproved claims in the transaction price when the claims are legally enforceable, we consider collection to be probable and believe we can reliably estimate the ultimate value. We continue to engage in negotiations with our customers on our outstanding claims. However, these claims may be resolved at amounts that differ from our current estimates, which could result in increases or decreases in future estimated contract profits or losses. Costs related to claims are recognized when they are incurred.

~~recognized~~Claims onrevenue ais ~~cumulative~~related ~~catch~~to amounts in excess of agreed contract price that we seek to collect from clients or others for customer-upcaused ~~basis.~~delays, Toerrors ~~the~~in ~~extent~~specifications and designs, contract terminations, change orders ~~included~~that are either in ~~the~~dispute ~~transaction~~or are unapproved as to both price and scope, or other causes of unanticipated additional contract costs, including factors outside of our control, where we therefore believe we are entitled to additional compensation. Claims revenue, when recorded, is only recorded to the extent it is probable that a significant reversal of cumulative revenue recognized will not ~~resolved~~occur. We include certain unapproved claims in ~~our~~the ~~favor~~transaction price when the claims are legally enforceable, ~~there~~we ~~could~~consider collection to be ~~reductions~~probable and believe we can reliably estimate the ultimate value. We continue to engage in negotiations with our customers on our outstanding claims. However, orthese ~~reversals~~claims ofmay ~~previously~~be ~~reported~~resolved at amounts ~~of,~~that ~~revenues~~differ ~~and~~from ~~profits~~our current estimates, ~~and~~which ~~charges~~could ~~against~~result ~~current~~in ~~earnings~~increases or decreases in future estimated contract profits or losses. Costs ~~relating~~related to ~~change~~claims ~~orders~~ are recognized when they are incurred.

Change orders, which are a normal and recurring part of our business, are generally not distinct and are accounted for as part of the existing contract. The effect of a change order that is not distinct on the transaction price and our measure of progress for the performance obligation to which it relates is recognized on a cumulative catch-up basis. To the extent change orders included in the transaction price are not resolved in our favor, there could be reductions in, or reversals of previously reported amounts of, revenues and profits, and charges against current earnings. Costs relating to change orders are recognized when they are incurred.

We recognize revenue for most of our contracts over time as performance obligations are satisfied, as we are continuously transferring control to the customer. Typically, revenue is recognized over time using an input measure (i.e., costs incurred to date relative to total estimated costs at completion) to measure progress.

We often enter into contracts in which the amount billed to the customer corresponds directly with the amount of work performed. These contract types qualify for the “right to invoice” practical expedient method of measuring progress, in which the right to consideration corresponds directly with the value to the customer of our performance to date. For these contracts, revenue is recognized in the amount that we have the right to invoice.

Provisions for anticipated losses on contracts, including those arising from disputes and other contingencies, are recorded in the period such loss becomes known; provisions not ultimately required are released as disputes or contingencies are resolved.

Contract costs include labor and materials, amounts payable to subcontractors, direct overhead costs and equipment expense (primarily depreciation, fuel, maintenance and repairs). All contract costs are recorded as incurred. Changes to estimated contract costs, either due to unexpected events or revisions to management’s initial estimates, for a given project are recognized in the period in which they are determined.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets and current and long-term operating lease liabilities in the consolidated balance sheets. Finance leases are included in other noncurrent assets, accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit interest rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably ~~certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.~~

We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component. Additionally, for certain equipment leases, we apply a portfolio approach to effectively account for the operating lease ROU assets and liabilities.

Wecertain ~~have~~that ~~operating~~we ~~and~~will ~~finance~~exercise ~~leases~~that ~~for corporate and project office spaces, vehicles, heavy machinery and office equipment~~option. ~~Our~~Lease ~~leases~~expense ~~have~~for ~~remaining~~operating lease ~~terms~~payments ofis ~~one~~recognized ~~year~~on toa ~~eleven~~straight-line ~~years,~~basis ~~some~~over ~~of which may include options to extend~~ the ~~leases~~lease ~~for up to five years, and some of which may include options to terminate the leases up to the third year~~term.

We have operating and finance leases for corporate and project office spaces, vehicles, heavy machinery and office equipment. Our leases have remaining lease terms of one year to ten years, some of which may include options to extend the leases for up to five years, and some of which may include options to terminate the leases up to the third year.

Business Combinations

The cost of an acquired company is assigned to the tangible and intangible assets purchased and the liabilities assumed on the basis of their fair values at the date of acquisition. The determination of fair values of assets acquired and liabilities assumed requires us to make estimates and use valuation techniques when a market value is not readily available. Any excess of purchase price over the fair value of tangible and intangible assets acquired and obligations assumed is allocated to goodwill. Goodwill typically represents the value paid for the assembled workforce and enhancement of our service offerings. Transaction costs associated with business combinations are expensed as incurred. The determination of fair values of assets acquired and liabilities assumed requires the Company to make estimates and use valuation techniques when a market value is not readily available. The Company adjusts the preliminary purchase prices allocation, as necessary, during the measurement period of up to one year after the acquisition closing date as the Company obtains more information as to facts and circumstances existing at the acquisition date.

Certain business acquisitions include contingent earn-out arrangements, which are generally based on meeting a revenue target. The fair value of this contingent consideration is included as part of the purchase price of the acquired company on the acquisition date and recorded at its fair value within other liabilities or other long-term liabilities, as appropriate on the consolidated balance sheets.

We measure our contingent consideration at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. The fair value of contingent consideration is determined using the option pricing method prescribed in the earnout valuation guide published by The Appraisal Foundation. We consider three major risks associated with earnout, i.e. risk in the underlying metric, risk in the earnout structure, and counterparty credit risk. Our valuation model is based on the Black Scholes option pricing formula and major assumptions including projected revenue, the revenue discount rate, the revenue volatility, and the Company's credit adjusted discount rate. Subsequent adjustments to these assumptions can cause changes to the measure of contingent consideration.

The Company reassess the estimated fair value of contingent consideration on a quarterly basis with any change in the fair value recorded to selling, general and administrative expense in the current quarter. The updated fair value could differ materially from the acquisition date fair value. The amount of contingent consideration ultimately paid that is less than or equal to the liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amounts paid in excess of the liability on the acquisition date is reflected as cash used in operating activities in our consolidated statements of cash flows.

Goodwill and Intangible Assets

Goodwill is not amortized but is subject to an annual impairment test. Interim testing for impairment is performed if indicators of potential impairment exist. For purposes of impairment testing, goodwill is allocated to the applicable reporting units based on the current reporting structure. When evaluating goodwill for impairment, we may decide to first perform a qualitative assessment, or “step zero” impairment test, to determine whether it is more likely than not that impairment has occurred. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of our reporting units exceeds their carrying amounts, we perform a quantitative assessment and calculate the estimated fair value of the respective reporting unit. If the carrying amount of a reporting unit’s goodwill exceeds the fair value of that goodwill, an impairment loss is recognized.

Our decision to perform a qualitative impairment assessment in a given year is influenced by a number of factors, including the significance of the excess of our estimated fair value over carrying value

atimpairment ~~the~~test, ~~last~~to ~~quantitative~~determine ~~assessment~~whether ~~date~~it is more likely than not that impairment has occurred. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the ~~amount~~fair value of ~~time~~our inreporting ~~between~~units exceeds their carrying amounts, we perform a quantitative assessment and calculate the estimated fair value ~~assessments,~~of ~~and~~the respective reporting unit. If the ~~date~~carrying amount of a reporting unit’s goodwill exceeds the ~~applicable~~fair ~~acquisitions~~value of that goodwill, ifan ~~any~~impairment loss is recognized.

WeOur decision to perform a ~~goodwill~~qualitative impairment ~~test~~assessment ~~annually,~~in ona ~~October~~given ~~1st of each~~ year, ~~for~~is ~~each~~influenced ~~reporting~~by ~~unit~~a ~~that~~number ~~requires~~of ~~certain assumptions and estimates be made regarding industry economic~~ factors, ~~and~~including ~~future~~the ~~profitability.~~significance ~~For~~of the ~~years~~excess ~~ended~~of ~~December~~our ~~31,~~estimated ~~2024,~~fair ~~December~~value ~~31,~~over ~~2023~~carrying ~~and~~value ~~December~~at ~~31,~~the ~~2022,~~last ~~we performed a~~ quantitative ~~analysis~~assessment ~~for~~date, ~~all~~the amount of ~~our~~time ~~reporting~~in ~~units.~~between Itquantitative ~~was determined that the~~ fair value ofassessments, ~~each~~and ofthe ~~our~~date ~~reporting~~of ~~units~~the ~~substantially~~applicable ~~exceeded their carrying values. As a result~~acquisitions, noif ~~goodwill impairments were identified for those periods~~any.

We perform a goodwill impairment test annually, on October 1st of each year, for each reporting unit that requires certain assumptions and estimates be made regarding industry economic factors and future profitability. For the years ended December 31, 2025, December 31, 2024

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