Segments Information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segments Information

20.Segments Information

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

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

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

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

The following tables summarize business segment information for the periods presented (in thousands):

	2023		2022		2021
Revenues:
Federal Solutions	$	3,020,701	$	2,212,987	$	1,888,050
Critical Infrastructure		2,422,048		1,982,285		1,772,721
Total revenues	$	5,442,749	$	4,195,272	$	3,660,771

	2023			2022		2021
Equity in (losses) earnings of unconsolidated joint ventures:
Federal Solutions	$	4,190		$	3,677	$	2,303
Critical Infrastructure		(51,941	)		12,670		34,559
Total equity in (losses) earnings of unconsolidated joint ventures	$	(47,751	)	$	16,347	$	36,862

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

	2023			2022			2021
Adjusted EBITDA attributable to Parsons Corporation
Federal Solutions	$	289,250		$	199,004		$	162,733
Critical Infrastructure		127,785			123,385			121,700
Adjusted EBITDA attributable to Parsons    Corporation		417,035			322,389			284,433
Adjusted EBITDA attributable to noncontrolling    interests		47,638			30,393			25,287
Depreciation and amortization		(119,973	)		(120,501	)		(144,209	)
Interest expense, net		(29,306	)		(22,219	)		(17,301	)
Income tax expense		(56,138	)		(39,657	)		(23,636	)
Equity-based compensation expense		(36,151	)		(24,354	)		(19,601	)
Transaction-related costs (a)		(12,013	)		(16,270	)		(11,965	)
Restructuring expense (b)		(1,244	)		(213	)		(736	)
Other (c)		(1,933	)		(3,003	)		(3,320	)
Net income including noncontrolling    interests	$	207,915		$	126,565		$	88,952
Net income attributable to noncontrolling interests		(46,766	)		(29,901	)		(24,880	)
Net income attributable to Parsons    Corporation	$	161,149		$	96,664		$	64,072

(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.

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

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

	2023		2022		2021
Revenues:
North America	$	4,481,492	$	3,463,128	$	3,028,760
Middle East		943,175		710,830		610,655
Rest of World		18,082		21,314		21,356
Total revenues	$	5,442,749	$	4,195,272	$	3,660,771
Property and equipment, net
North America	$	91,766	$	91,217	$	100,674
Middle East		7,191		4,833		3,522
Total property and equipment, net	$	98,957	$	96,050	$	104,196

North America revenue includes $4.1 billion, $3.2 billion and $2.7 billion of United States revenue for the years ended December 31, 2023, December 31, 2022 and December 31, 2021, respectively. North America property and equipment, net includes $83.9 million, $84.4 million and $95.0 million of property and equipment, net in the United States at December 31, 2023, December 31, 2022 and December 31, 2021, respectively.

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

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

	2023		2022		2021
Revenue:
Defense & Intelligence	$	1,539,968	$	1,368,779	$	1,269,030
Engineered Systems		1,480,733		844,208		619,020
Federal Solutions revenues		3,020,701		2,212,987		1,888,050
Infrastructure – North America		1,472,768		1,265,376		1,155,511
Infrastructure – Europe, Middle East and Africa	$	949,280		716,909		617,210
Critical Infrastructure revenues		2,422,048		1,982,285		1,772,721
Total revenues	$	5,442,749	$	4,195,272	$	3,660,771

Effective June 1, 2022, the Company made changes to its Federal Solutions business units by transferring a portion of legacy Defense and Intelligence business unit to the Engineered Systems business unit. Effective October 1, 2023, the Company reorganized its Critical Infrastructure business units from Mobility Solutions and Connected Communities to Infrastructure – North America and Infrastructure – Europe, Middle East and Africa. The prior year information in the table above has been reclassified to conform to the business unit changes.