PSN

Parsons is a government-focused engineering and technology-services contractor, split between national-security/defense solutions and critical-infrastructure work. After several years of rapid growth — revenue climbed from $3.66B (FY2021) to $6.75B (FY2024) — FY2025 revenue dipped 5.7% to $6.36B, a pause likely tied to the roll-off of a large program. Earnings held up better than the top line: net income rose 2.6% to $241M and diluted EPS gained 3.8% to $2.20, helped by a modest buyback. The business model is steady but structurally low-margin — a 6.6% operating margin and 3.8% net margin are typical for government services — producing a 9.1% ROE.

Capital allocation and the balance sheet show a company leaning into growth via acquisitions: long-term debt jumped 57.9% to $1.24B (funding M&A), while equity grew 9.3% to $2.64B and retained earnings rose 54.9%, leaving moderate leverage at 1.14x. Operating cash flow of $478M (down 8.6%) comfortably covers the light $68M of capex and the $125M of buybacks; Parsons pays no dividend, reinvesting instead.