ICFI

ICF International’s second quarter saw revenue remain flat year over year, coming in just below Wall Street’s expectations. Despite this, management pointed to robust performance in commercial energy efficiency, international government, and technology modernization segments as key factors supporting margins and profitability. CEO John Wasson noted, “Our diversified integrated business model made a positive difference in ICF’s results,” highlighting that commercial, state and local, and international clients now account for a larger mix of total revenue. Management also underscored effective cost controls and expanding business development pipelines, particularly in non-federal client categories, as supporting continued profitability despite sluggish federal procurement. Is now the time to buy ICFI? Find out in our full research report (it’s free). Revenue: $474.5 million vs analyst estimates of $477.6 million (flat year on year, 0.7% miss) Adjusted EPS: $1.86 vs analyst estimates of $1.65 (13% beat) Adjusted EBITDA: $53.37 million vs analyst estimates of $52.79 million (11.2% margin, 1.1% beat) The company reconfirmed its revenue guidance for the full year of $1.93 billion at the midpoint Management reiterated its full-year Adjusted EPS guidance of $7.10 at the midpoint Operating Margin: 8.4%, in line with the same quarter last year Backlog: $3.3 billion at quarter end, down 2.9% year on year Market Capitalization: $1.61 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Tim Mulrooney (William Blair) asked whether mid-teens growth in commercial energy for the second half is achievable. CEO John Wasson explained growth will be driven by strong awards, a robust pipeline, and performance fees typically realized later in the year. Tim Mulrooney (William Blair) inquired about the slight sequential decline in backlog. CFO James C. Morgan attributed this to slower federal procurement but noted signs of improvement and anticipated a healthier book-to-bill ratio in Q3. Jason Tilchen (Canaccord Genuity) requested more detail on expectations for 2027 growth. Wasson outlined that non-federal business is expected to see high single- to low double-digit growth, while federal is expected to deliver low to mid-single digits, resulting in overall mid- to high-single-digit growth. Tobey Sommer (Truist) asked about trends in technology modernization contracts and government procurement of software licenses. President Anne Choate indicated procurement is picking up, contract sizes remain steady, and most work is labor-based rather than license passthrough. Marc Riddick (Sidoti) questioned the impact of fewer disaster recovery projects and funding delays. CEO John Wasson said long-term growth potential remains, with optionality for significant upside if large-scale disasters occur. In upcoming quarters, the StockStory team will closely monitor (1) the pace of new contract awards and ramp-up in the commercial energy and international government segments, (2) whether federal procurement activity meaningfully rebounds to support backlog growth, and (3) the impact of AI-enabled offerings and technology modernization projects on both client acquisition and margins. Execution on these initiatives will be key to delivering on ICF’s growth and margin expansion targets. ICF International currently trades at $89.55, up from $85.31 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 4:30 p.m. ET Chair and Chief Executive Officer - John Wasson President - Anne Choate Chief Operating and Financial Officer - James C. Morgan Operator: Welcome to the Second Quarter 26 ICF Earnings Conference Call. My name is Lauren Cannon, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I will now turn the call over to Lynn Morgen of Advisory Partners. Lynn, you may begin. Lynn Morgen: Thank you, Lauren. Good afternoon, everyone, and thank you for joining us to review ICF's second quarter 26 performance. With us today from ICF are John Wasson, Chair and CEO Anne Choate, President and James C. Morgan, Chief Operating and Financial Officer. During this conference call, we will make forward-looking statements to assist you in understanding ICF management's expectations about our future performance. These statements are subject to a number of risks that could cause actual events and results to differ materially and I refer you to our 8/6/2026 press release and our SEC filings for discussions of those risks. In addition, our statements during this call are based on our views as of today. We anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may at some point elect to update the forward-looking statements made today but specifically disclaim any obligation to do so. I will now turn the call over to ICF's CEO, John Wasson, to discuss second quarter 26 performance. John? John Wasson: Thank you, Lynn, and thank you all for joining us this afternoon to review our second quarter results and discuss our business outlook. Second quarter business trends in our markets were consistent with our expectations allowing us to deliver revenues in line with last year's second quarter while we continue to carefully manage costs and directed our resources towards expanding our pipeline of new business opportunities. Key takeaways from our second quarter results included a 6% increase in revenues from commercial clients, led by commercial energy efficiency and related utility program revenues that increased 6.7% year-on-year. A sequential increase in revenues from federal government clients as we had anticipated, reflecting growth in our technology modernization work, a 35% increase in revenues from international government clients, as we ramped up work on the large contract awards secured in 2025 and earlier this year. We maintained our strong margins with adjusted EBITDA margin of 11.2%, up 10 basis points from last year's second quarter Non GAAP EPS increased 12% driven by the profitability I just noted, and year-on-year tax interest and share count benefits Our trailing 12-month book to bill ratio was a healthy 1.09x And, since the end of the second quarter, we have been awarded contracts in excess of $200 million And, we ended the second quarter with a robust pipeline valued at $9.3 billion, a 9% sequential increase over the $8.5 billion reported at the end of this year's first quarter. In short, this was another quarter in which our diversified integrated business model made a positive difference in ICF's results. Positioning us to achieve our guidance expectations for the full year. Revenues from our commercial, state and local and international clients accounted for 61% of our second-quarter revenues in keeping with our expectation that these client categories will represent over 60% of our 2026 revenues, up from 57% in 2025. The diversification within our client set provides us with both resilience and the ability to shift our resources to capture growth opportunities as markets evolve. Approximately 75% of our second-quarter contract wins were in these non federal client categories. As delays in procurement decisions constrained federal government awards. We continue to invest in these non federal client categories, while at the same time pivoting to expand our presence in federal agencies that are benefiting from increased funding. Additionally, we are seeing greater opportunities to bring insights and capabilities from across client categories and domain expertise to help clients address complex challenges. For example, many of the issues facing today's energy market including low growth, grid reliability, transmission development, resilience affordability and energy security are being addressed simultaneously by commercial clients, regulators and other government agencies. The fact that we work with all these market participants gives us a broader perspective on emerging challenges and potential solutions providing significant competitive advantage to ICF. Also, our work with state regulators and industry associations helps us to develop innovative approaches to transmission investment, and grid planning. It provides us with insights that we can directly apply to our energy advisory clients. Our work related to data centers leverages capabilities across planning, policy, financial and engineering disciplines as well as across our client categories. We provide assistance to states, counties and other local governments as they evaluate the economic and energy infrastructure and community impacts of data center development, which gives us valuable perspective on stakeholder concerns and public issues that we are able to bring to our hyperscaler developer and utility clients as they plan for and develop new projects. And our deep energy expertise, including decades of support to the federal government and to commercial oil and gas companies regarding critical reserves, and potential disruptions, positioned us to support the state of California with real time monitoring of refinery production, energy imports, and stocks so the state can better take actions to address price variability. Finally, we are adapting AI enabled analytics and technical assistance solutions that we originally developed for federal government clients to support commercial and state and local government clients. As I mentioned earlier, we ended the second quarter with a business development pipeline of $9.3 billion opportunities in the key long term growth markets we have identified namely commercial energy, technology modernization, and disaster management and related state and local government work, accounted for approximately $5.5 billion or 60% of that pipeline, supporting our expectation for continued growth in these markets. Summing up the quarter, we were pleased that our revenues were similar to last year's second quarter results, in advance of our return to year-on-year growth for 2026 and to positive quarterly revenue comparisons beginning next quarter. We are also pleased with the way we have managed our cost structure, to maintain strong margin performance while then growing our substantial business development pipeline. Our year to date repurchases of over 435 thousand shares represent a first-half record for ICF. And a strong indication of the confidence that management and the board have in our company's long term prospects. We continue to review acquisition opportunities particularly in the commercial energy space, but we remain very disciplined. Our focus is primarily on tuck in transactions that provide capabilities with the potential to drive meaningful revenue synergies and will be accretive soon after completion. Now I will turn the call over to our President, Anne Choate, to discuss our business performance. Anne? Anne Choate: Good afternoon, everyone. I am pleased to present a business review of ICF second quarter results, which as John mentioned, set the stage for our return to year-on-year growth in the second half of this year starting in Q3. I am also happy to discuss how ICF's diversified integrated business model continues to differentiate us and provide us with a unique multidisciplinary viewpoint in solving complex problems for clients. In my remarks, I will walk through some specific examples of work in each of our client categories, starting with commercial energy. We continue to experience strong demand for ICF's utility programs which include energy efficiency, flexible load management, electrification, and battery storage programs. Revenues from this part of the business increased 6.7% in the second quarter and represented approximately 82% of second-quarter commercial energy revenues. Our results in this area were driven by the continued success of our performance based programs, the expansion of existing engagements, and the start up of new projects. The addressable market for these services is large, and ICF is a recognized market leader with our share gains coming from excellent results we are delivering to clients introduction of new services and winning work away from competitors. Energy advisory work for commercial clients increased 2.5% in the quarter, reflecting the timing of client transaction activity, and increased 8.6% for the first-half. Accounting for about 13% of first-half commercial energy revenues. Contributions from this part of our business tend to vary due to the timing of assignments and client transactions. As we look to Q3, we are expecting more robust M&A activity, which should drive our valuation and due diligence services. Additionally, we are seeing increased demand for our supply-strategy and market access assessments for natural gas. As well as greater developer demand for data centers and other large loads in need of assistance in citing decisions. These decisions reflect a complex suite, including grid capacity, interconnection and queue position, and proximity to future load growth. All areas where ICF's integrated advisory capabilities are particularly well positioned. In addition, our energy advisory team is fielding requests from our energy advisory services from state and local governments as they also address citing challenges affordability concerns, economic development priorities, reliability, and growing energy demand. The remaining less than 5% of our commercial energy revenues represent environmental and planning work that we do for utility and other commercial clients. Lower quarterly revenue comparisons in this part of our business were due to the wind down of several wind energy projects that ended in last year's third quarter. We expect improvement in this area of our business in the second half of this year given recent utility transmission line related awards, and our increasing support for power developers who are colocating data centers with renewable generation assets. To sum up commercial energy, the drivers underlying demand for this part of our business remain very strong. The combination of accelerating electricity demand and the need to modernize aging infrastructure is expanding the addressable market across nearly all of our energy offerings. As these infrastructure investments are unlikely to satisfy the scale and timing of emerging grid needs, demand for cost effective community centric programmatic solutions such as energy efficiency, demand response, distributed energy resources, and flexible load management programs continues to grow. These are areas where ICF has significant scale and expertise and the economics of these solutions are becoming increasingly attractive as power and capacity costs rise. Commercial energy contract awards represented approximately 47% of ICF's second quarter contract awards and commercial energy opportunities accounted for more than $1.5 billion of our pipeline at the end of the quarter. Good indications of our future growth prospects. Next, I will move to our state and local portfolio. Second quarter state and local government revenues were 1.9% below the comparable period last year, with disaster management and recovery services continuing to account for about 45% of this client category. ICF is a recognized leader in the development and implementation of disaster recovery and mitigation programs, and we currently support 75 active disaster recovery projects in 22 states and territories. Fewer major disasters and funding delays have constrained near term activity in this arena. But ICF continues to execute on substantial rebuilding and mitigation projects, which includes utilizing our environmental and climate expertise to advise state and local clients on optimal mitigation solutions. We anticipate a direct opportunity for ICF as state and local governments look to increase their capability and capacity for both response and recovery, as well as preemptive disaster mitigation. In February, we announced the award of a comprehensive management services contract by the state of Florida. As expected, that contract is now serving as a platform for new opportunities including a $4 million funded contract to support the administration's approach to rural health transformation via state agencies. Also in Florida, we expect to see more opportunities for a state agricultural land preservation program we support that just earned appropriations of $425 million in funding for the 26-27 program budget year. Additionally, we leveraged our state and local expertise in the disaster management arena to win a contract to provide grants management and compliance services to a commercial client. A Northeast utility, where we will support hundreds of millions of dollars in FEMA funding across multiple hazard mitigation projects designed to improve the utility's grid infrastructure, resilience and reliability. Energy, environmental, and disaster services have always comprised the majority of our state and local portfolio. As I mentioned, this year, we are actively expanding the offerings we provide to our state and local clients to include health expertise and advanced technology solutions. State and local government opportunities represented approximately $1.3 billion of the total pipeline at the end of the second quarter, and we expect year-on-year revenue growth from this client category in the second half of the year. As we discussed on our last call, our international portfolio is showing growth. International government revenues increased 35% in the second quarter, reflecting the significant contracts that ICF has been awarded over the last 18 months by the European Union and UK clients. And it is continued to be strong across our international portfolio, as we have been winning key recompetes and securing net new contracts. That support growth for the next few years. Lastly, I will talk about our work with US federal clients. Our federal business has stabilized. Second quarter revenues from federal government clients increased 1.4% sequentially, in line with our expectations after delivering 0.6% sequential growth in Q1. Moving forward, we are expecting Q3 to be another quarter of sequential revenue growth. Before returning to year-on-year growth in federal revenues in this year's fourth quarter. Procurement activity continues to improve, but award activity remains and varies from agency to agency. Protests of large opportunities are also much more common. Accordingly, we have adapted our go to market approach to increasingly focus on prototyping and demonstration of capabilities, both on contract and to secure new contracts. Technology modernization represents about 1-half of our $185 million in revenues from federal government clients, and increased 4% sequentially in the second quarter. Over 80% of ICF's technology modernization work is performed under outcome based fixed price contracts. The preferred contract vehicles for government technology projects. Our federal agency clients remain focused on data, AI, speed, efficiency and automation. And continue to prioritize modernizing legacy systems and improving interoperability across the federal technology environment. Areas that are closely aligned with ICF's expertise. While primarily serving federal agency clients, we have deployed our technology capabilities across the company's client categories. As such, technology modernization represents $2.6 billion of our pipeline at the end of the second quarter. With respect to our programmatic work for federal government clients, we continue to execute key contracts across our long standing client agencies. At the same time, we are making progress repositioning our federal portfolio toward areas aligned with administration priorities. For example, we are seeing growing opportunity as agencies look to move away from traditional labor intensive approaches and towards more data driven AI enabled customer engagement models. We believe ICF's combination of technology, data, and mission expertise positions us well to support this shift. And at both DHS and HHS, we are seeing increased engagement and pipeline activity related to these capabilities. On balance, we see significant opportunities for our integrated capabilities in the federal government arena. In summary, second quarter business trends across all 4 of our client categories were aligned with our expectations. Our business unit leaders are collaborating across client categories with a winning mindset, and a commitment to assist clients with speed and agility. Now I will turn the call over to Chief Operating and Financial Officer, James C. Morgan. James C. Morgan: Thank you, Anne, and good afternoon, everyone. I will provide additional details on our second quarter 26 results. From an overall perspective, as you have heard from both John and Anne, second quarter results were consistent with our expectations. Our non federal revenues increased just under 7% year-over-year and our federal government revenues increased sequentially in line with the expectations we provided on our last call. Additionally, we continue to execute various cost management initiatives that we have discussed on past calls. Including modernizing our infrastructure, specifically contract management system and our vendor management system. These ERP system implementations remain on track. And are expected to drive meaningful efficiency gains in our back office operations over time. And we have a disciplined programmatic initiative to implement AI tools across our internal processes to drive further efficiencies. While a portion of these efficiency gains will be seen in our margin expansion, we will continue to reinvest in growth initiatives to ensure ICF is well positioned to capitalize on the opportunities we see in front of us. With these efficiency improvements and a favorable business mix derived from the greater contribution of commercial revenues, and a higher percentage of revenues tied to fixed-price and T&M contracts, we remain well positioned to achieve our target of 10 to 20 basis points adjusted EBITDA margin expansion for the full year. As well as over the longer term. We have committed to this level of margin expansion over the last decade, during which we have averaged more than 10 basis points per year. And we have the confidence that we will continue to be able to deliver this on this commitment into the foreseeable future. Turning to second quarter results, Total revenue was $474.5 million stable with the $476.2 million reported in the second quarter of 25. Revenues from federal clients declined 9.5% year-on-year, given the difficult comparisons caused by the impact of contract cancellations that occurred in the first half of 25. Non federal revenues in the second quarter grew 6.6% year-over-year. On a sequential basis, total revenues increased 8.5% from the $437.5 million reported in the first quarter of fiscal year 26. As revenues with commercial clients sequentially increased 13.6%, state and local grew 9.1%, international government revenues increased 24.2% sequentially, and federal revenues again improved sequentially consistent with our expectations. Subcontractor and other direct costs totaled $121.4 million and represented 25.6% of total revenues. up 23.6% from the prior year quarter. Reflecting higher pass throughs on certain non federal contracts. In spite of the 200-basis-point increase in subcontractor and other direct costs, our gross margin of 37.2% was similar to the 37.3% in the prior year. Benefiting from the contribution of higher margin commercial revenues as well as a healthy contract mix. With fixed price and T and M contracts representing approximately 95% of revenues. Indirect and selling expenses totaled $123.3 million, representing 26% of total revenues. In line with the prior year. As I mentioned before, we are carefully managing our indirect spend while continuing to invest in our highest priority growth areas. Second quarter EBITDA was essentially flat year-over-year at $53.1 million Adjusted EBITDA rose 0.9% to $53.4 million and adjusted EBITDA margin expanded year over year-over-year by 10 basis points to 11.2%. Net interest expense declined nearly 20% to $6.8 million reflecting progress in reducing our average debt balance. The second quarter tax rate was 17.8%, down from 21% in the second quarter of fiscal year 25. This year's second quarter benefited from various strategic planning tax-planning actions which drove a tax benefit of $0.09 to EPS on a GAAP basis and $0.11 to non-GAAP EPS relative to the second quarter's 23% tax rate guidance we shared during our last earnings call in May. We are still expecting our full year tax rate of approximately 20.5%, with the third quarter carrying the largest offsetting discretionary tax benefits. Net income in the second quarter was $20.9 million or $1.49 per diluted share, above the $23.7 million or $1.28 per diluted share reported in the prior year quarter. Non GAAP EPS rose 12% year-over-year to $1.86 per share driven mainly by a lower tax rate, lower interest expense, and a reduced share count as well as improved EBITDA margins. Bottom line results are tracking well. And we continue to expect full year EPS to be within guidance range. Turning to the balance sheet and cash flows. Operating cash flow in the second quarter was approximately $99.7 million, a substantial increase from the $52 million generated in the prior year period. It is worth noting that the operating cash flow amounts include restricted cash that is mostly associated with energy efficiency programs for utilities. For those utility programs, the cash is passed through and tied to incentive payments to utility customers. The timing of which can be uneven. Excluding this item, our core cash generation remains strong at $56.7 million for the quarter, as compared to $50.4 million in the prior year quarter. Excluding the potential impact of restricted cash, which is aligned with the basis for our initial guidance, we continue to expect full year operating cash flow of $135 million to $150 million Days sales outstanding were 72 days. Compared to 80 days in last year's second quarter. Driven mainly by improved collections and increases in advanced payments. Capital expenditures totaled $5.7 million in the quarter, the same as the prior year quarter. We ended the quarter with net debt of $403 million down from $457 million at the end of last year's second quarter. With approximately 43% of the debt at a fixed rate. Our adjusted leverage ratio was 2.06x Absent any acquisitions, we expect our year end adjusted leverage ratio to be under 1.6x. The capital allocation, our priorities remain unchanged. Organic investment to drive growth and operating efficiencies, ongoing quarterly dividends, returning capital through opportunistic share repurchases, and evaluating acquisitions in our key growth markets. On that note, we repurchased approximately 435 thousand shares in the first half of this year. As John discussed, we are actively evaluating acquisition opportunities with commercial energy as the primary focus. Today, we announced a quarterly dividend of $0.14 per share payable on 10/9/2026, to shareholders on record on 9/4/2026. We are pleased to again reaffirm the guidance we gave in February, for 2026 revenue and EPS to return to growth. Full year revenues are expected to range from $1.89 billion to $1.96 billion And as of today, more than 90% of the revenue is required to achieve our guidance for full year 2026 is already in backlog. For EPS, we continue to forecast GAAP EPS of $5.95 to $6.25 and non GAAP EPS of $6.95 to $7.25 Now to help you with your financial models, please note the following for the full year 2026. With regard to the cadence of the remainder of the year, we would expect sequential revenue growth in each of the next 2 quarters accelerating at a faster pace in the fourth quarter than in the third. Depreciation and amortization of intangibles are expected to continue to be between $22 million and $24 million Full year interest expense is now expected to be between $26 million and $28 million compared to the prior guidance of $27 million to $29 million We anticipate capital expenditures of $23 million to $25 million versus prior guidance of $24 million to $26 million We continue to expect operating cash flow of $135 million to $150 million for the full year exclusive of the impact of restricted cash, As I previously mentioned, we continue to expect the full year tax rate approximately 20.5% And lastly, we have lowered our full year weighted average share count guidance from 18.3 million shares to 18.2 million shares. To reflect share repurchases in the first half. With that, I will turn the call back over to John for his closing remarks. John? John Wasson: Thanks, James. We are pleased that 2026 is shaping up as we expected. We are looking ahead to a return to growth this year and an acceleration next year. Bringing us back to mid to high single digit growth in 2027. This could not be achieved without the ability and dedication shown by our professional staff and management teams who have effectively pivoted to capture revenue opportunities. While maintaining our margin levels. In many ways, the disruptions of 2025 have made ICF a stronger company, more diversified, more collaborative, more efficient, and more agile. We are enthusiastic about the opportunities ahead. And with that operator, I would please open the call to questions. Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star-11 on your telephone and wait for your name to be announced. To withdraw your question, please press star-11 again. Our first question comes from the line of Timothy Mulrooney with William Blair. Your line is now open. Tim Mulrooney: Yes. Good afternoon. Congrats on the solid execution here in the quarter. It sounds like the guidance is fully intact here. So I am going to ask some more targeted questions. The first 1's on your commercial energy business. It grew, you know, 4% in the second quarter. I think that implies a growth rate of about 3% in the first half. Think you need to grow more in the mid-teens range in the second half of the year to achieve your full year goal of at least 10% growth for the full year. I my question is, am I right about that math? And can you walk us through the you know, the primary drivers that would help get you there? John Wasson: Well, maybe I will start off, Timothy, and then I will let Anne and James weigh in. Generally your math is correct. We will have to grow mid-teens in the second half of the year. To achieve that goal. I think, as you noted, and as I think we indicated in our remarks, I think the way we will get there is first of all, we did have strong awards in the second quarter. But it is now announced in our release. You can see the list of projects there. Second, we do have a set of projects that we, since that time we have been told we will be awarded but we are still in negotiations with those contracts and we have a robust pipeline of opportunities on the commercial energy front. So I think those 3 things are giving us confidence that we can achieve double digit growth required in the second half of the year. To get to our original guidance. I would also note that our performance awards and performance fees are typically back half loaded and so we will certainly benefit from those awards coming in to help drive additional revenue growth for the year. So I think that is, at a high level, what we see getting us to that level of growth. Anne Choate: Anne, do you want to add anything on? Well, maybe I will just mention that. So the energy advisory work, which you know is a smaller percentage, but an important percentage of our commercial energy work, that was a little bit slower in the second quarter. And that reflected delayed timing of certain of the technical advisory and the independent engineering services that we provide, which actually had the reason for that was the administration sunset date for some of the tax credits was July 4. That put several of the client there. It put their focus on the immediate you know, initiating construction to hit that tax credit deadline, and so now that we are past that date, we have already seen signs that the planning and financing work that we do will proceed as expected for the rest of the year. So that is a piece of that. But otherwise, I agree with what John has said. James C. Morgan: The pipeline is really strong. And to make this year, and I would just reiterate again the last 2 years, the 2 prior years in our energy business, grew mid-teens. For the year. And we have not seen a shift in the market and the trends driving that business. And so I think for us to return to mid-teens growth in our energy, commercial energy business in the second half of the year is achievable, and it is it is consistent certainly with the performance we have had the last several years in that market. Tim Mulrooney: Okay. Thank you. that is a good point, John. And I appreciate all the color there, Anne. I also heard you say in your prepared remarks, to expect a pickup in M&A activity in the second half, maybe some other things too. So that is helpful color. Shifting gears really quickly to the backlog. Which was $3.3 billion. Down slightly sequentially from the first quarter We have seen backlog flat to up. The last couple of years as you move from the second from the first quarter to the second quarter. Can you talk about some of the factors here that impacted that slight decel into the second quarter? Is it still somewhat sluggish I guess, on the U.S. Federal side? Or is it primarily a timing thing? Just trying to understand your expectations for book to bill as we move through the third quarter here. James C. Morgan: Yeah. I guess I can I can speak to that a little bit? I would say as far as I mean, as we reported for the quarter this is James. For the quarter, our book to bill was 0.85, and where that was the main impact below 1 was in the federal space where, because we have mentioned we have had a little bit slower in the procurement cycle, but we are seeing signs where that is picking up and has been starting to pick up even subsequent to the end of Q2. So we are we are looking to have a healthier book to bill as we move into Q3. Which will certainly look at driving the backlog up as we move forward. Beyond that. So from an overall perspective, if you look at what the impact is on backlog, quarter over quarter, it is more on the federal areas, probably the biggest area. Impact. Understood. Thanks, James. Thank you, everybody. Operator: Thank you. Our next question comes from the line of Jason Tilchen with Canaccord Genuity. Your line is now open. Jason Tilchen: Good afternoon, everyone. Thanks for taking my questions. Start in your outlook commentary referenced that same return to mid to high single digit growth in 2027 that you mentioned last quarter. Just hoping maybe with a little bit more you could expand on your expectations for next year a bit more and help frame some of the key puts and takes that could drive either upside or downside relative to that range? Thanks. John Wasson: Sure. So I think, as you know, we do expect to return to mid- to high-single-digit growth next year. And I think the way we have discussed that in the past, I think, and what we continue to believe today is for the percent of the business that is non federal, we would expect to deliver high single digit to low double digit growth. In the federal arena, we would expect to achieve low to mid single digit growth And so then if you do the math on that, I think it will get you to mid to high single digit growth across the portfolio. And so I think that is how we are thinking about that for next year. Jason Tilchen: Okay. Great. Thank you. And then just wanted to unpack that particularly strong international growth both from the quarter and really the award wins you have seen over the past 18 months or so. Just wondering if you could help dive into some of the underlying trends in those markets that are driving those wins and how confident you are that you will be able to continue here going forward? Anne Choate: So I think I mentioned in my remarks that so we have won several of those contracts over the last say, 18 months or so. And it was a matter of sort of-- it took a while as a result of elections and some other things happening in Europe for those contracts to really hit their stride. But we now feel like they have hit their stride. We feel that the runway for those contracts and our positioning is really strong. In some cases, we are single award holder. In other cases, we are 1 of 2 or sort of at the top of a framework contract, sort of right of first refusal. And so as a result, you are seeing the results of, I guess, of that long term business development effort. Materialize here. And we continue to expand that footprint, which so that is been that is the part that from a BD standpoint that is been exciting this year is using that as a launching off point for winning work with additional agencies sort of under the EU umbrella. James C. Morgan: Yeah. This is James. I would just on top of that too. I mean, if you look at even going forward, certainly we are ramping those programs in the past, but also the pipeline of opportunities that we have in front of us is actually healthier now than even what it is been in the past. there is a multitude of opportunities coming out. So if we have the largest pipeline of opportunities for our international government business, beyond what we have had in the last ever. I mean, actually. John Wasson: And I would say for I mean, you guys have seen the results for the first half. Of the year in terms of growth in international business. I think we expect similar growth results for the second half of the year. And based on the comments both Anne and James has made about the pipeline and the backlog, I am confident in double digit revenue growth in international when we look forward to 2027. Very helpful. Thank you very much. Operator: Thank you. Our next question comes from the line of Tobey Sommer with Truist. Your line is now open. Tobey Sommer: Thank you very much. Within your technology modernization business, what the trend has been like on contract size in the procurement environment in case of procurements and maybe if you could, as part of your answer, touching on this particular market, describe your experience with customers purchasing licenses and other things that historically have been passed through directly from OEMs. Thanks. Anne Choate: Hi there. So I think that in terms of you had several parts. But I think that we have seen procurements picking up in that area. We have a very significant amount of a high fraction of our submitted bids where we are pending award. Relate to that technology modernization business. that is an area where, as we mentioned, you know, we have been pivoting in the federal space We have been using that those technology modernization services as a way to access new clients and new offices within client agencies. So that is been pretty successful. In terms of the size, I do not think we have seen a significant change in the average size of those deals. As I mentioned, we have seen tremendous variability in terms of the time between knowing about an opportunity, seeing an RFI, or not seeing an RFI, going to a, you know, going to either a limited competition or an open competition, and then actually getting to award. And then in many cases when it is large, seeing a protest. And so I think that is that is the part of that sales cycle that, you know, that we are trying to navigate. But I think that it is pretty consistent for technology modernization across federal government right now. I am trying to think of your last question. The licenses with OEMs, can you say a little bit more about that? Tobey Sommer: Yeah. there is been news, in the market about the government deciding to procure those sort of things directly from the OEMs rather than via an integrator. So I am wondering if that is something that you are having experience with or not at this juncture. Anne Choate: I not that I am aware of. So I think that we are working in close partnership with our customers. And in some cases, for instance, their access to certain providers, they may They may want us to work in their cloud environment or something like that. But I am not aware of anything beyond that. John Wasson: I would say we have not seen a material shift. As you know, Tobey, we work and have the capabilities to work across a low code, no code set of players. We are still seeing opportunities to support the federal government and partner across Salesforce, ServiceNow, Appian, also can deliver IT modernization capabilities and services on open source and do not think we have seen a fundamental shift in those markets or our relationships with those players to date on our IT modernization work. James C. Morgan: Yeah, I guess I would also say too, I mean, the majority of the work we do is more labor based services. it is not passing through of license costs and things of that nature. Tobey Sommer: Thank you. And, last question for me. On the capital deployment front. I think been may be looking to reengage and be more active since in the wake of the DOD experience and the business stabilizing and even kind of starting to grow. What are your expectations as you look at the back half of the year and into 2027 for growing the business inorganically. John Wasson: I think as we have discussed in the past, I mean, I think, you know, we remain in the market looking for potential acquisitions that we think are good strategic fit, good cultural fit and meet our financial criteria. I think we will be very disciplined. I think as I said in my remarks, I think we are primarily focused in that arena in the commercial energy area. Would expect us to lean more to tuck in acquisitions as we think about the rest of this year. And generally, I think we have a balanced approach to capital allocation. We are investing for organic growth. I talked about the stock buybacks. We have been active there. And we will continue to look to deploy it on the M and M&A front if we find the right opportunity. And so balance but discipline would be mine. Message. James C. Morgan: Do not know, James, do you want to No, think that is right. We are fortunate enough that we certainly have capacity in our credit facility where we are not constrained, where we can continue to have that balance between investing organically and doing share buybacks, and then also the right opportunity comes across from an acquisition perspective to pursue that. So and certainly that is that is a focus in identifying and finding those opportunities. Thank you. Operator: Thank you. Our next question comes from the line of Kevin Steinke with Barrington Research Associates. Your line is now open. Kevin Steinke: Great. Thank you. In your prepared remarks, I believe you talked about on the federal programmatic side, shifting your focus from more labor intensive projects to more along the lines of helping your clients with AI enablement, efficiencies, etcetera. Correct me if I am wrong, but I think that is how I heard it. And I am just wondering, what that would do to kind of your business model in terms of project size or staffing levels or any other metrics So, Kevin, this is Anne. Anne Choate: Thank you for asking because that I am hoping that is not how it came across. But what I did say was that we are looking to help the federal government in places where they federal government, these agencies, are looking to move away from their traditional sort of labor intensive approaches, like think of things like grant management, think of things like you know, data validation and things like that. Where they are trying to move from many, many federal staff and support doing these kinds of tasks. We are trying to help them where you can tie systems together, you can have more data driven AI enabled customer engagement models that allow them to basically provide their to fulfill their mission, but in a more efficient sort of a streamlined way. And so that is where we have where we have been successful working with some of these agencies combining technology and data and mission expertise. You know, where you can and where you cannot find those streamlining efficiencies. that is been a sweet spot for us. Does that help? Kevin Steinke: Yes. Yeah. Thank you for that color and that clarification. So I think you also, when talking about commercial energy, you mentioned 1 of the growth drivers is being the introduction of new services. And, you know, I do not know if there is been anything more recent on that front. Or if it is kind of been some of the other program management type services that you have discussed in the past contributing to growth. Anne Choate: Well, no. I think, you know, we a couple years ago, and maybe it was only a year ago, we started talking about important large load and data centers are going to be. So obviously, that is been a place where you know, we have been introducing new services and new packages of services to address a kind of a new need. So, you know, for you know, as an example, for hyperscalers now we are helping clients evaluate the speed to power, what strategy solutions, should they use to get speed to power, assessing the alternative power and technologies. So they are navigating procurement and funding in new ways. There are some that are trying to look to get the speed to power, in a renewable or a sustainable way, kind of depending on where they are. that is obviously a place where we can provide a lot of value. We also are supporting some of this community impact initiative, you know, to the extent they are trying to work to balance the need for increased electricity with the communities, we are helping to work with them to think about that strategy, those strategies. that is 1 example, or 1 suite of examples. But I could give you more. Kevin Steinke: No. Think that is fine. Yeah. that is helpful. Leslie, I just wanted to ask a little more about international government. You talked about these large contracts maybe being a launching point for you to pursue work with other EU agencies. And just wondering how much of a focus international government is right now for growth investments, expansion of services, or you kind of feel like that you have the service footprint already in place that you need there. Anne Choate: I think that we are you know, I think that the role that John's asked me to play does provide a little bit more connectivity. So for instance, our energy, our decarbonization, or whatever skill sets that we have here where we can augment skill sets that we have in our Europe and Asia, you know, business lines. I think that, you know, that connectivity is strong and has been strong, but it can, I think, it is even stronger now? I think that the business development engine that we have there is pretty tight and efficient. And we have because of the work that we have done in the last couple of years, I think that our brand, our reputation is really strong, both in The UK and the areas where we work and also in the EU. So I guess the answer is absolutely, we are committed to it. Absolutely, we are supporting it. But I do not see that we are investing more necessarily in that direction. John Wasson: Is there anything Right. I agree. I think it is a mean, it is a business is doing terrific. I do think that there is ways we can connect the capabilities in North America to Europe and find additional opportunity. And so we have a very strong fellow there running that business. And so it is a good business. I do not think we are it is not 1 of our key mean, the scale and size it is just not 1 of our key growth drivers, so it is not getting a disproportionate amount of investment. But we are certainly investing at levels as we have in past and we are seeing very nice results. We will continue to do that. Okay. Great. Thank you. Operator: Thank you. As a reminder, to ask a question, please press star-11 on your telephone and wait for your name to be announced. Our next question comes from the line of Marc Riddick with Sidoti. Your line is now open. Marc Riddick: Hey, good afternoon. Hi. Hey, Marc. I wanted to touch a little bit on disaster recovery and mitigation, and maybe you could talk a little bit on the some of the commentary you had in either in prepared remarks or it was in or just in the press release as far as the you know, the fewer disasters and, funding delays that you are seeing. Maybe you could touch a little bit on some of the details around that and maybe the sources of that and then I just have a quick follow-up there. John Wasson: Because you know I will start off, Anne. Okay. I will get that started. Yeah, We have been in the disaster business for quite some time. We are quite committed to that business. We were a market leader in that business. Think as Anne noted in her remarks, I mean, there is been fewer disasters recently that have limited the number of new opportunities. With a long term view, I do think this is a growth market. And there is optionality. Those of you who have known ICF for some time, we have had 3 or 4 periods in this firm when disaster recovery materially grew the company. In response to significant disasters. So we remain quite committed, but there is we have had fewer disasters, but this is certainly optionality in my view versus significant growth. We look down the line, I think we have managed the business very well and are seeing opportunities in state and local markets. And we have also connected the dots. And I think some of the answer, Marc, talked about how we have connected it to utility work and other areas. So, I think we expect the business to grow and it will be optionality for very significant growth. Anne Choate: The only thing I would say is that anybody who is looking at their phone at any point in the day probably thinks, what do you mean, there are less disasters? There are plenty of natural disasters that are on the news. I think the issue is that the of the size that really that John's talking about, those are the ones that have been few and far between. And so the size and the declaration that would then lead to the funding that would be a large scale disaster recovery program. John Wasson: Right. Anne Choate: Okay. Okay, I got you then. Marc Riddick: And then I wanted to follow-up on just the timing of procurement decisions on the federal side and I think you made commentary as to that loosening up toward the end of the quarter, I guess, or going into going into the third quarter here. But I was wondering if you are seeing that as is that do you think that is something that is tied to, approaching the end of the federal year end, or is it sort of driven more by current project needs and or maybe what is what might loosen up that opportunity? Anne Choate: I mean, my take is that it is so variable. Even within agencies, it is variable. there is you know, in some places you have contracting officers who understand they have a some sort of deadline, regulatory deadline, otherwise. And they are incentivized to get these to get the contracts moving even if they have been stalled. And in other places, might have that same driver, but you do not have enough contract staff to get the thing out the door. And that is where you sometimes see some mods. You know, people are just modding repeatedly. They might also be modding because they are aware of work, are afraid of a protest, and so just to keep for continuity purposes, they mod and so that sets up delays. In other places we have seen, you know, a pickup and things moving more quickly. So it really is, I would argue, it is really variable by agency. I am looking at John and James to see if that is I agree. John Wasson: I understand. that is right. Marc Riddick: Great. And then, last thing for me, and maybe talk a little bit about some of the, the range of catalysts on the technology modernization side that you are seeing and whether they whether they differ, federal versus nonfederal or, you know, are you seeing any particular catalyst or needs that are sort of coming to the forefront that are driving folks to act as opposed to sort of, you know, standing on the sidelines and sort of weighing how some of these things sort of play out, whether it is an AI driven concern or cost driven or the like. Anne Choate: In the federal space, I would say that the, you know, the drivers are much as what we have been talking about, probably not just us, but we have been discussing this, you know, desire for streamlining, desire for modernizing aging systems, the desire for more efficiency, also a desire on the part of the federal agencies to find ways to utilize AI you know, it is for efficiency purposes or whether it is for as part of this modernization activity. So I think that is all true. I think that when we get involved in tech technology projects at a state and local level, often it is because there is a mission orientation, whether it is disaster or energy or underground storage tanks or whatever it is, and there is a technology system that is getting in the way of doing that mission oriented work, that is where we actually have a lot to offer because we can say, well, we can unstick that technology barrier to achieving your mission outcome. And so that is really where our sweet spot is. Outside of federal. Marc Riddick: Well, I know it is been quite the journey to get to growth resumption and, you know, over the over the last few quarters and certainly encouraging to see their pacing there. So congratulations on that. Appreciate it. Thank you. Glad to see you too. A lot of hard work. Thank you. Operator: This concludes the question and answer session. I would now like to turn it back to John Wasson for closing remarks. John Wasson: Well, thanks, everyone, for participating in today's call. We look forward to seeing you at upcoming conferences and calls. So hope to see you all soon. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Icf International. The Motley Fool has a disclosure policy. ICF International (ICFI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

ICF International, Inc. ICFI reported mixed second-quarter 2026 results with earnings beating the Zacks Consensus Estimate but revenues missing the same. ICFI’s non-GAAP earnings of $1.86 per share topped the Zacks Consensus Estimate of $1.69 by 10.1% and increased 12% year over year. The gain reflected lower tax and interest expenses, a reduced share count and improved EBITDA margins. ICF International, Inc. price-consensus-eps-surprise-chart | ICF International, Inc. Quote Revenues of $474.5 million missed the consensus mark of $476.2 million by 0.4% and fell 0.4% year over year. Commercial and international growth partly offset federal weaknesses. Backlog ended the quarter at $3.3 billion, while the business development pipeline climbed 9% sequentially to $9.3 billion. However, the earnings beat and strong 2026 guidance impressed investors, as the stock has gained 11.4% since the company released results on Aug. 6. ICFI reaffirmed its 2026 revenue guidance of $1.89-$1.96 billion, with the midpoint of $1.925 billion being higher than the Zacks Consensus Estimate of $1.90 billion. Non-GAAP earnings guidance is $6.95-$7.25 per share, with the midpoint of $7.10 per share being marginally higher than the Zacks Consensus Estimate of $7.01 per share. ICFI’s shares have gained 0.7% over the past year compared with the industry’s 2.1% growth. The Zacks S&P 500 composite has risen 24.1% over the same time frame. Commercial revenues increased 5.9% year over year to $166 million and accounted for 35% of total revenues compared with 32.9% a year ago. Commercial energy revenues rose 4.4%, representing 87.1% of commercial revenues. Utility programs, including energy efficiency, flexible load management, electrification and battery storage, grew 6.7%. Energy advisory revenues increased 2.5%, with management expecting stronger activity in the third quarter as delayed planning and financing work resumes. International government revenues jumped 35.1% year over year to $39.5 million, representing 8.3% of quarterly revenues. Growth reflected the ramp-up of major contracts secured from European Union and U.K. clients over the past 18 months. Management expects similar international growth in the second half and double-digit growth in 2027. The company said its international opportunity pipeline is at its highest level to date, supported by additional opportunities across EU agencies. U.S. federal government revenues declined 9.5% year over year to $184.9 million as prior-year contract cancellations and a slower pace of new requests for proposals weighed on comparisons. However, revenues increased 1.4% sequentially. Technology modernization represented roughly half of federal revenues and grew 4% sequentially. More than 80% of this work is performed under outcome-based fixed-price contracts. ICFI expects another sequential federal revenue increase in the third quarter and a return to year-over-year growth in the fourth quarter. Gross margin was 37.2%, down 10 basis points from the prior-year period despite subcontractor and other direct costs rising to 25.6% of revenues from 23.6%. A greater contribution from higher-margin commercial work and favorable contract mix supported profitability. Adjusted EBITDA increased 0.9% to $53.4 million, while adjusted EBITDA margin expanded 10 basis points to 11.2%. Net interest expense declined nearly 20% to $6.8 million. The tax rate fell to 17.8% from 21%, providing an 11-cent benefit to non-GAAP earnings relative to management's previous tax-rate assumption. More than 90% of the revenues needed to reach the guidance range are already included in backlog. Management expects sequential revenue growth in each of the next two quarters, with faster growth in the fourth quarter. GAAP earnings are projected at $5.95-$6.25 per share. The company continues to target 10-20 basis points of adjusted EBITDA margin expansion and expects operating cash flow, excluding restricted cash, of $135-$150 million. Second-quarter operating cash flow totaled $99.7 million, including $43 million of restricted cash associated with energy-efficiency programs. Excluding restricted cash, operating cash flow was $56.7 million compared with $50.4 million a year ago. Net debt ended the quarter at $403 million, down from $457 million a year earlier. ICFI repurchased 217,542 shares during the quarter, bringing first-half repurchases to 435,055 shares. Management lowered its full-year weighted-average share count forecast to 18.2 million from 18.3 million shares. Currently, ICF International carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Trane Technologies plc TT reported impressive second-quarter 2026 results. TT’s adjusted earnings of $4.31 per share outpaced the consensus mark by 0.9% and rose 11.1% from the year-ago quarter’s actual. TT’s total revenues of $6.35 billion surpassed the consensus mark by 2.9% and increased 6.4% year over year. Clean Harbors, Inc.CLH posted better-than-expected second-quarter 2026 results. CLH’s adjusted earnings of $3.22 per share beat the Zacks Consensus Estimate by 17.5% and rose 36.4% year over year. Total revenues of $1.74 billion surpassed the consensus estimate by 6.8% and increased 12% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ICF International, Inc. (ICFI) : Free Stock Analysis Report Clean Harbors, Inc. (CLH) : Free Stock Analysis Report Trane Technologies plc (TT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Commercial energy efficiency and utility programs drove 6.7% year-on-year growth, benefiting from performance-based contracts and rising electricity demand. International government revenues surged 35% as the company successfully ramped up large-scale contracts secured in Europe and the UK over the past 18 months. Federal government revenues stabilized with sequential growth, though year-on-year comparisons remain difficult due to 2025 contract cancellations. Management is pivoting the federal portfolio toward technology modernization and AI-enabled customer engagement models to offset labor-intensive legacy work. The company is leveraging cross-sector expertise to address complex energy challenges, such as assisting hyperscalers with data center siting and grid reliability. A record first-half share repurchase of 435,000 shares signals management's confidence in long-term growth despite near-term federal procurement headwinds. Management expects a return to year-on-year revenue growth starting in Q3 2026, with acceleration projected for the fourth quarter. Long-term guidance targets mid-to-high single-digit growth for 2027, supported by high single-digit growth in non-federal sectors. The $9.3 billion pipeline, up 9% sequentially, is heavily weighted toward commercial energy, tech modernization, and disaster management. Full-year adjusted EBITDA margin expansion of 10 to 20 basis points is anticipated, driven by a favorable mix of commercial and fixed-price contracts. M&A strategy remains disciplined, focusing on tuck-in acquisitions within the commercial energy space that offer immediate revenue synergies. Federal procurement activity remains variable by agency, with increased frequency of contract protests causing delays in award execution. Disaster management revenues were constrained by a lack of major new disasters and federal funding delays, though 75 projects remain active. Internal efficiency initiatives, including new ERP and vendor management systems, are on track to drive back-office margin improvements. A strategic tax benefit of $0.11 to non-GAAP EPS was realized in Q2, though the full-year tax rate is still expected to average 20.5%. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth will be driven by a back-half loading of performance awards and fees, alongside a robust pipeline of utility projects. Management noted that energy advisory work slowed in Q2 due to clients focusing on construction deadlines for tax credits, but planning work is now resuming. The Q2 book-to-bill of 0.85 was primarily impacted by the slow federal procurement cycle, but management reported signs of picking up subsequent to quarter-end. Procurement delays are attributed to staffing shortages at federal agencies and a cautious approach to avoid contract protests. Management clarified they have not seen a material shift in the government procuring licenses directly from OEMs instead of integrators. ICF's work remains primarily labor-based services rather than the pass-through of high-cost software licenses. While the business is currently stable, management views disaster recovery as a source of 'optionality' for significant growth spikes following major events. The company is expanding these capabilities into state and local health and agricultural sectors to diversify revenue streams.

ICF International (ICFI) reported $474.5 million in revenue for the quarter ended June 2026, representing a year-over-year decline of 0.4%. EPS of $1.86 for the same period compares to $1.66 a year ago. The reported revenue represents a surprise of -0.36% over the Zacks Consensus Estimate of $476.22 million. With the consensus EPS estimate being $1.69, the EPS surprise was +10.06%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately. Here is how ICF performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: Revenue by Client Type- Government- U.S. federal government: $184.91 million versus the two-analyst average estimate of $192.15 million. The reported number represents a year-over-year change of -9.7%. Revenue by Client Type- Government- U.S. state and local government: $84.05 million versus $88.28 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -1.9% change. Revenue by Client Type- Commercial: $166.01 million versus $164.56 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +6% change. Revenue by Client Type- Government: $308.48 million versus the two-analyst average estimate of $312.13 million. The reported number represents a year-over-year change of -3.5%. Revenue by Client Type- Government- International government: $39.52 million versus $31.71 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +35.1% change. View all Key Company Metrics for ICF here>>> Shares of ICF have returned +11.8% over the past month versus the Zacks S&P 500 composite's +2.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ICF International, Inc. (ICFI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in ICF International, Inc.? Here are five stocks we like better. Q2 revenue was essentially flat at $474.5 million, as 6.6% growth in non-federal markets offset a 9.5% decline in federal revenue. Adjusted EBITDA increased 0.9% to $53.4 million, while non-GAAP EPS rose 12% to $1.86. Growth is being driven by commercial energy and international operations: commercial revenue increased 6%, international government revenue jumped 35%, and the business-development pipeline expanded to $9.3 billion. Management expects federal and state/local revenue to return to year-over-year growth in the second half. ICF reaffirmed its 2026 guidance for revenue of $1.89 billion to $1.96 billion and non-GAAP EPS of $6.95 to $7.25. Cash generation improved, with core operating cash flow rising to $56.7 million and net debt declining to $403 million. ICF International (NASDAQ:ICFI) reported second-quarter 2026 revenue that was essentially unchanged from a year earlier as growth in commercial, international and other non-federal markets offset a year-over-year decline in federal revenue. Management said the company remains on track to return to year-over-year revenue growth in the second half of 2026 and reaffirmed its full-year guidance. Total second-quarter revenue was $474.5 million, compared with $476.2 million in the prior-year quarter. Adjusted EBITDA rose 0.9% to $53.4 million, while adjusted EBITDA margin expanded 10 basis points to 11.2%. Non-GAAP diluted earnings per share increased 12% to $1.86, supported by lower interest expense, a lower tax rate, a reduced share count and improved margins. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth “Second quarter business trends in our markets were consistent with our expectations,” Chair and CEO John Wasson said, adding that the company managed costs while expanding its pipeline of new business opportunities. Non-federal revenue increased 6.6% year over year, while revenue from federal clients declined 9.5% from the prior-year quarter. Chief Operating and Financial Officer James Morgan said the federal decline reflected difficult comparisons related to contract cancellations in the first half of 2025. → Visa’s BioCatch Deal Could Make Fraud Prevention a Bigger Business Federal revenue did improve sequentially, rising 1.4% in the second quarter after an 8.6% sequential increase in the first quarter. Management expects another quarter of sequential federal growth in the third quarter and a return to year-over-year federal growth in the fourth quarter. Commercial, state and local, and international clients represented 61% of second-quarter revenue. Wasson said the company expects those client groups to account for more than 60% of 2026 revenue, compared with 57% in 2025. About 75% of second-quarter contract wins came from non-federal categories, as federal procurement decisions remained delayed. → Dodging Deutsche Telekom: T-Mobile's Strategic Win The company ended the quarter with a $9.3 billion business-development pipeline, up 9% sequentially from $8.5 billion at the end of the first quarter. Opportunities in commercial energy, technology modernization, disaster management and related state and local work represented about $5.5 billion, or 60%, of the pipeline. ICF also said it had received contract awards exceeding $200 million since the end of the second quarter. Revenue from commercial clients rose 6% year over year, led by commercial energy-efficiency and related utility-program revenue, which increased 6.7%. President Anne Choate said those programs, including energy efficiency, flexible-load management, electrification and battery storage, accounted for approximately 82% of commercial-energy revenue in the quarter. Commercial energy contract awards represented about 47% of total second-quarter awards, and commercial-energy opportunities exceeded $1.5 billion in the pipeline. Management expects commercial energy to accelerate in the second half, aided by new project starts, performance-based fees that are typically weighted toward the back half of the year, and anticipated increased activity in energy advisory services. Choate said the company is seeing demand for work related to data-center development, including assessments of grid capacity, interconnection positions, future load growth and siting considerations. ICF also expects improvement in environmental and planning work during the second half, following recent utility transmission-related awards and increased support for developers co-locating data centers with renewable-generation assets. International government revenue increased 35% year over year as ICF ramped work on contracts awarded by European Union and U.K. clients over the past 18 months. Choate said several contracts had moved beyond their initial mobilization phases, while the company continued to pursue additional EU opportunities. Wasson said he expects double-digit international revenue growth in 2027 based on backlog and pipeline activity. Technology modernization accounted for roughly half of ICF’s $185 million in federal revenue and grew 4% sequentially. More than 80% of the company’s federal technology modernization work is performed under outcome-based fixed-price contracts, according to management. ICF said federal clients continue to prioritize data, artificial intelligence, automation, interoperability and the modernization of legacy systems. However, Choate said procurement timing remains uneven across agencies, with large opportunities more frequently subject to protests and delays. State and local government revenue declined 1.9% from the year-earlier period. Disaster management and recovery services represented about 45% of that portfolio. ICF currently supports 75 active disaster-recovery projects in 22 states and territories, but management said fewer large-scale disasters and funding delays constrained near-term activity. The company expects state and local revenue to return to year-over-year growth in the second half. It cited opportunities stemming from a Florida management-services contract, including a $4 million funded contract tied to rural health transformation, as well as a Northeast utility engagement involving FEMA-funded hazard-mitigation projects. ICF reaffirmed its 2026 outlook for revenue of $1.89 billion to $1.96 billion, GAAP EPS of $5.95 to $6.25, and non-GAAP EPS of $6.95 to $7.25. More than 90% of the revenue needed to meet the full-year outlook was already in backlog, Morgan said. The company expects sequential revenue growth in both the third and fourth quarters, with faster growth in the fourth quarter. Wasson said ICF anticipates a return to mid-to-high single-digit companywide growth in 2027, driven by expected high-single-digit to low-double-digit growth in non-federal operations and low-to-mid-single-digit growth in federal operations. Second-quarter operating cash flow was approximately $99.7 million, including restricted cash associated primarily with utility energy-efficiency programs. Excluding that item, core cash generation was $56.7 million, compared with $50.4 million a year earlier. Net debt was $403 million at quarter-end, down from $457 million a year earlier. ICF repurchased approximately 435,000 shares in the first half of 2026 and declared a quarterly dividend of $0.14 per share, payable Oct. 9 to shareholders of record Sept. 4. Management said it continues to evaluate acquisitions, particularly tuck-in opportunities in commercial energy, while maintaining a disciplined approach to capital allocation. ICF International (NASDAQ: ICFI), commonly known as ICF, is a global consulting and digital services provider specializing in the intersection of strategy, technology, and policy. The firm delivers integrated services and solutions to government and commercial clients in areas such as energy and environment, health and social programs, transportation, infrastructure, technology, and marketing and communications. ICF's offerings span strategic planning, data analytics, program evaluation, digital transformation, and implementation support. Founded in 1969 and headquartered in Reston, Virginia, ICF has grown through both organic expansion and targeted acquisitions to broaden its capabilities and geographic reach. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "ICF International Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Total Revenue: $474.5 million in Q2 2026, stable compared to $476.2 million in Q2 2025. Sequential Revenue Growth: Total revenues increased 8.5% from $437.5 million in Q1 2026. Commercial Client Revenue: Increased 6% year over year, with commercial energy efficiency and utility program revenues up 6.7%. International Government Revenue: Increased 35% year over year. Federal Government Revenue: Declined 9.5% year over year but increased 1.4% sequentially. Adjusted EBITDA: $53.4 million, up 0.9% year over year, with margin expanding 10 basis points to 11.2%. Gross Margin: 37.2%, similar to 37.3% in the prior year quarter. Net Income: $26.9 million, or $1.49 per diluted share, up from $23.7 million ($1.28 per share) in Q2 2025. Non-GAAP EPS: $1.86 per share, up 12% year over year. Operating Cash Flow: Approximately $99.7 million in Q2, up from $52 million in the prior year period; core cash generation was $56.7 million. Net Debt: $403 million at quarter end, down from $457 million in Q2 2025. Full-Year Revenue Guidance: Expected to range from $1.89 billion to $1.96 billion. Full-Year EPS Guidance: GAAP EPS of $5.95 to $6.25 and non-GAAP EPS of $6.95 to $7.25. Warning! GuruFocus has detected 8 Warning Sign with WHG. Is ICFI fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Non-federal revenues grew 6.6% year-over-year, with commercial energy efficiency and utility program revenues up 6.7% and international government revenues surging 35%. Adjusted EBITDA margin expanded by 10 basis points to 11.2%, and non-GAAP EPS rose 12% year-over-year to $1.86. The business development pipeline increased 9% sequentially to $9.3 billion, with commercial energy, technology modernization, and disaster management representing 60% of the pipeline. Operating cash flow improved significantly to $99.7 million in Q2, up from $52 million in the prior year, and net debt decreased to $403 million from $457 million. Management reaffirmed full-year 2026 guidance for revenue and EPS growth, with over 90% of required revenues already in backlog and expectations for sequential revenue growth in Q3 and Q4. Total revenue was flat year-over-year at $474.5 million, and federal government revenues declined 9.5% due to contract cancellations in the prior year. The book-to-bill ratio for Q2 was 0.85, below 1.0, primarily due to slower federal procurement activity and constrained award decisions. State and local government revenues decreased 1.9% year-over-year, impacted by fewer major disasters and funding delays in disaster management. Commercial energy growth in Q2 was only 4%, requiring mid-teens growth in the second half to meet full-year targets, which may be challenging. Subcontractor and other direct costs increased to 25.6% of revenues, up from 23.6% in the prior year, pressuring gross margins. Q: Can you walk us through the primary drivers that will help commercial energy achieve the mid-teens growth required in the second half of the year to meet the full-year goal of at least 10% growth? A: John Wasson (Chairman and CEO) confirmed the math, stating that the company expects mid-teens growth in the second half. He cited strong Q2 awards, a set of projects where the company has been told it will be awarded contracts but is still in negotiations, and a robust pipeline of commercial energy opportunities. He also noted that performance fees are typically back-half loaded. Anne Choate (President) added that energy advisory work was delayed in Q2 due to clients focusing on the July 4th tax credit deadline, but planning and financing work is expected to proceed in the second half. John Wasson reiterated that the company has grown this business mid-teens for the past two years and sees no shift in market trends. Q: Can you expand on your expectations for 2027 and frame the key puts and takes that could drive upside or downside relative to the mid to high single-digit growth range? A: John Wasson (Chairman and CEO) explained that for the 60% of the business that is non-federal, the company expects high single-digit to low double-digit growth. In the federal arena, they expect low to mid-single-digit growth. Combining these segments, he stated that the math gets them to mid to high single-digit growth across the portfolio for 2027. Q: Can you unpack the strong international growth and the underlying trends driving those wins, and how confident are you that this can continue? A: Anne Choate (President) stated that contracts won over the last 18 months have now hit their stride after delays from European elections. She noted the company is often the single award holder or at the top of a framework contract, providing a strong runway. James Morgan (COO and CFO) added that the pipeline of opportunities for the international government business is the largest it has ever been. John Wasson (Chairman and CEO) expressed confidence in double-digit growth for international in 2027 based on the pipeline and backlog. Q: What has the trend been like on contract size and the procurement environment in the technology modernization business, and are you seeing customers purchase licenses directly from OEMs rather than through integrators? A: Anne Choate (President) noted that procurements are picking up, with a high fraction of pending bids related to technology modernization. She stated there hasn't been a significant change in average deal size, but there is tremendous variability in the time between opportunity identification and award, with protests on large opportunities being common. Regarding OEM licenses, she said she is not aware of a shift. John Wasson (Chairman and CEO) added that they haven't seen a material shift and continue to partner with Salesforce, ServiceNow, and Appian. James Morgan (COO and CFO) clarified that the majority of their work is labor-based services, not passing through license costs. Q: What are your expectations for growing the business inorganically in the back half of the year and into 2027? A: John Wasson (Chairman and CEO) stated they remain in the market looking for acquisitions that are a good strategic and cultural fit and meet financial criteria. He emphasized discipline and a primary focus on tuck-in acquisitions in the commercial energy area. He reiterated a balanced approach to capital allocation, including organic investment, share buybacks, and M&A. James Morgan (COO and CFO) added that they have the capacity in their credit facility to pursue the right opportunities without being constrained. Q: On the federal programmatic side, you mentioned shifting focus from labor-intensive projects to AI enablement. What would that do to your business model in terms of project size or staffing levels? A: Anne Choate (President) clarified that they are helping federal agencies move away from traditional labor-intensive approaches like grant management and data validation. They are helping agencies tie systems together and use data-driven, AI-enabled customer engagement models to fulfill their mission more efficiently. She emphasized that this is a sweet spot for ICF, combining technology, data, and mission expertise to find streamlining efficiencies. Q: Can you provide more detail on the disaster recovery and mitigation business, specifically regarding fewer disasters and funding delays? A: John Wasson (Chairman and CEO) stated that fewer disasters have limited new opportunities, but he views this as a long-term growth market with optionality. He noted that historically, ICF has materially grown during periods of significant disasters. Anne Choate (President) clarified that while there are many natural disasters in the news, the issue is the lack of disasters of a size that would lead to large-scale disaster recovery program funding. Q: Is the loosening of federal procurement decisions tied to the approaching end of the federal year-end, or is it driven by current project needs? A: Anne Choate (President) stated that the situation is highly variable, even within agencies. In some places, contracting officers are incentivized to get contracts moving due to regulatory deadlines, while in others, a lack of contract staff causes delays and repeated modifications. She noted they have seen a pickup in some areas, but it remains variable by agency. James Morgan (COO and CFO) agreed, confirming the variability. Q: Can you discuss the range of catalysts on the technology modernization side and whether they differ between federal and non-federal clients? A: Anne Choate (President) stated that in the federal space, the drivers are the desire for streamlining, modernizing aging systems, efficiency, and utilizing AI. At the state and local level, technology projects are often mission-oriented, such as disaster or energy work, where a technology system is a barrier to achieving mission outcomes. She noted ICF's sweet spot is unsticking those technology barriers to help clients achieve their mission. Q: Can you provide more color on the new services being introduced in the commercial energy space that are contributing to growth? A: Anne Choate (President) highlighted the growing importance of large loads and data centers. She explained that ICF is helping hyperscalers evaluate speed-to-power strategies, assess alternative power and technology solutions, and navigate procurement and funding in new ways. They are also supporting community impact initiatives to help clients balance the need for increased electricity with community impact. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Professional consulting firm ICF International (NASDAQ:ICFI) missed Wall Street’s revenue expectations in Q2 CY2026, with sales flat year on year at $474.5 million. On the other hand, the company’s full-year revenue guidance of $1.93 billion at the midpoint came in 1% above analysts’ estimates. Its non-GAAP profit of $1.86 per share was 13% above analysts’ consensus estimates. Is now the time to buy ICF International? Find out in our full research report. Revenue: $474.5 million vs analyst estimates of $477.6 million (flat year on year, 0.7% miss) Adjusted EPS: $1.86 vs analyst estimates of $1.65 (13% beat) Adjusted EBITDA: $53.37 million vs analyst estimates of $52.79 million (11.2% margin, 1.1% beat) The company reconfirmed its revenue guidance for the full year of $1.93 billion at the midpoint Management reiterated its full-year Adjusted EPS guidance of $7.10 at the midpoint Operating Margin: 8.4%, in line with the same quarter last year Free Cash Flow Margin: 19.8%, up from 9.7% in the same quarter last year Backlog: $3.3 billion at quarter end, down 2.9% year on year Market Capitalization: $1.54 billion John Wasson, chair and chief executive officer, said, "Second quarter business trends in our markets were in line with our expectations and continued to reflect the benefits of our integrated business model. Revenues from commercial clients increased 5.9% year-on-year, federal government client revenues continued to improve on a sequential basis driven by technology modernization, and revenues from international government clients climbed by 35%. This enabled us to report total second quarter 2026 revenues that were similar to prior-year levels, in advance of our return to year-on-year growth for 2026 with positive quarterly comparisons beginning in this year's third quarter. Operating at the intersection of policy, technology, and implementation for over five decades, ICF International (NASDAQ:ICFI) provides professional consulting services and technology solutions to government agencies and commercial clients across energy, health, environment, and security sectors. Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. With $1.82 billion in revenue over the past 12 months, ICF International is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. As you can see below, ICF International grew its sales at a tepid 3.1% compounded annual growth rate over the last five years. This shows it failed to generate demand in any major way and is a rough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. ICF International’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.3% annually. We can dig further into the company’s revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. ICF International’s backlog reached $3.3 billion in the latest quarter and averaged 5.7% year-on-year declines over the last two years. Because this number is in line with its revenue growth, we can see the company effectively balanced its new order intake and fulfillment processes. This quarter, ICF International missed Wall Street’s estimates and reported a rather uninspiring 0.3% year-on-year revenue decline, generating $474.5 million of revenue. Looking ahead, sell-side analysts expect revenue to grow 8.6% over the next 12 months, an improvement versus the last two years. This projection is healthy and implies its newer products and services will catalyze better top-line performance. ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable. These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE. Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals. ICF International’s adjusted operating margin has more or less stayed the same over the last 12 months , averaging 8.1% over the last five years. This profitability was mediocre for a business services business and caused by its suboptimal cost structure. Looking at the trend in its profitability, ICF International’s adjusted operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. In Q2, ICF International generated an adjusted operating margin profit margin of 8.4%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable. Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions. ICF International’s EPS grew at 6.3% compounded annual growth rate over the last five years. This performance was better than its revenue growth but doesn’t tell us much about its business quality because its adjusted operating margin improvement was less than peers. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For ICF International, its two-year annual EPS declines of 3.3% show it’s continued to underperform. These results were bad no matter how you slice the data. In Q2, ICF International reported adjusted EPS of $1.86, up from $1.66 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects ICF International’s full-year EPS to grow 15.9% from $6.50 to $7.54. It was good to see ICF International beat analysts’ EPS expectations this quarter. We were also happy its full-year EPS guidance narrowly outperformed Wall Street’s estimates. On the other hand, its revenue slightly missed. Overall, this print had some key positives. The stock remained flat at $85.64 immediately after reporting. Is ICF International an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

ICF International (ICFI) came out with quarterly earnings of $1.86 per share, beating the Zacks Consensus Estimate of $1.69 per share. This compares to earnings of $1.66 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +10.06%. A quarter ago, it was expected that this consulting and technology services provider would post earnings of $1.55 per share when it actually produced earnings of $1.5, delivering a surprise of -3.23%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. ICF, which belongs to the Zacks Government Services industry, posted revenues of $474.5 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 0.36%. This compares to year-ago revenues of $476.15 million. The company has not been able to beat consensus revenue estimates over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. ICF shares have lost about 0.6% since the beginning of the year versus the S&P 500's gain of 12.8%. While ICF has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for ICF was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.97 on $494.19 million in revenues for the coming quarter and $7.01 on $1.9 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Government Services is currently in the top 21% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Bitdeer Technologies Group (BTDR), another stock in the broader Zacks Business Services sector, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 10. This company is expected to post quarterly loss of $0.35 per share in its upcoming report, which represents a year-over-year change of +54%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Bitdeer Technologies Group's revenues are expected to be $224.08 million, up 44% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ICF International, Inc. (ICFI) : Free Stock Analysis Report Bitdeer Technologies Group (BTDR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

―Second Quarter Business Results in Line with Company Expectations― ―Continued Strong Margin Performance Reflects Business Mix Benefits and Effective Cost Management― ―Business Development Pipeline Reached $9.3 Billion at Quarter-End― ―Reaffirms 2026 Revenue and EPS Guidance Ranges― ―First Half 2026 Share Repurchases Totaled 435,055 Shares― Second Quarter Highlights: Revenue Was $474 Million Net Income Was $27 Million; GAAP EPS Was $1.49 Non-GAAP EPS1 Was $1.86 EBITDA1 Was $53.0 Million; Adjusted EBITDA1 Was $53.4 Million, or 11.2% of Total Revenues Contract Awards Were $402 Million for a Quarterly Book-to-Bill Ratio of 0.85 and TTM Book-to-Bill Ratio of 1.09 RESTON, Va., Aug. 6, 2026 /PRNewswire/ -- ICF (NASDAQ: ICFI), a global consulting and technology services provider, reported results for the second quarter ended June 30, 2026. Management Commentary John Wasson, chair and chief executive officer, said, "Second quarter business trends in our markets were in line with our expectations and continued to reflect the benefits of our integrated business model. Revenues from commercial clients increased 5.9% year-on-year, federal government client revenues continued to improve on a sequential basis driven by technology modernization, and revenues from international government clients climbed by 35%. This enabled us to report total second quarter 2026 revenues that were similar to prior-year levels, in advance of our return to year-on-year growth for 2026 with positive quarterly comparisons beginning in this year's third quarter. "We maintained our strong margins in the second quarter, benefiting from the contribution of higher-margin commercial client revenues and the disciplined management of our cost structure. This performance is aligned with our long-standing commitment to increase adjusted EBITDA margins by 10 to 20 basis points annually, while continuing to invest in our key growth markets and advance our technology capabilities. "Second quarter contract awards of $402 million were achieved despite delays in procurement decisions related to federal government proposals. ICF's trailing twelve-month book-to-bill ratio was a healthy 1.09, and our business development pipeline reached $9.3 billion, representing considerable sequential growth. We have seen early signs of an increase in award decisions. Specifically, since the end of the second quarter we have been awarded contracts in excess of $200 million." Second Quarter Business Highlights in Key Growth Markets Commercial EnergyICF continues to experience strong demand from utility clients for its market-leading energy efficiency, flexible load management, electrification and battery storage programs. Revenues from this part of the company's commercial energy business increased 6.7% to account for approximately 82% of second quarter 2026 commercial energy revenues. Energy advisory work for commercial clients increased 2.5% in the quarter, reflecting the timing of client transaction activity, and increased 8.6% for the first half. Energy advisory work accounted for 12.2 % of second quarter 2026 commercial energy revenues. Other commercial energy comparisons declined year-on-year due to the wind-down of several wind energy projects through last year's third quarter. Commercial energy awards represented approximately 47% of second quarter contract awards, and commercial energy opportunities represented more than $1.5 billion of our pipeline at the end of the second quarter. Additionally, ICF's energy work includes programs for federal and state agencies that provide us with greater insight into the regulatory and stakeholder environment, which strengthens our ability to meet and often exceed the milestones of our commercial energy contracts. Technology ModernizationICF has built out its technology modernization capabilities over the last six years, which in the second quarter represented approximately one-half of our $185 million in revenues from federal government clients. Over 80% of ICF's technology modernization work is performed under outcome-based, fixed-price contracts, the preferred contract vehicles for government technology projects. Our federal agency clients remain focused on data, AI, speed, efficiency and automation and continue to prioritize modernizing legacy systems and improving interoperability across the federal technology environment, areas that are closely aligned with ICF's expertise. While primarily serving federal agency clients, our technology modernization capabilities are deployed across the company's client categories. Technology modernization opportunities represented approximately $2.6 billion of our pipeline at the end of the second quarter. Disaster RecoveryICF is a recognized leader in the development and implementation of disaster recovery and mitigation programs, which represent approximately 45% of the Company's state and local revenues. In the second quarter, ICF supported over 75 active disaster recovery programs in 22 states and territories and views the disaster management market as a driver of long-term growth. Fewer major disasters and funding delays recently have constrained near-term activity in this arena, but ICF continues to execute on substantial rebuilding and mitigation projects, which includes utilizing our environmental and climate expertise to advise state and local clients on optimal mitigation solutions. Additionally, we have expanded the offerings we provide to our state and local clients by leveraging our health expertise and advanced technology solutions. State and local government opportunities represented approximately $1.3 billion of the total pipeline at the end of the second quarter, and we expect year-on-year revenue growth from this client category in the second half of this year. Second Quarter 2026 Financial Results Second quarter 2026 total revenue was $474.5 million, compared to $476.2 million reported in the second quarter of 2025. Sequentially, total revenue increased 8.5% from the $437.5 million reported in the first quarter of 2026. Subcontractor and other direct costs were 25.6% of total revenues, compared to 23.6% in last year's second quarter. Gross margin was 37.2%, 10 basis points below the prior year period. Operating income was $39.9 million, with an operating margin on total revenue of 8.4%, compared to operating income of $40.0 million, with an operating margin of 8.4% in the prior year period. Net income totaled $26.9 million, versus $23.7 million reported in the second quarter of 2025. Diluted EPS was $1.49 per share, up 16.4%, benefiting from a 17.8% tax rate. This compares to $1.28 per share in the prior year, when the company's tax rate was 21.0%. Non-GAAP EPS totaled $1.86 per share, up 12.0%, benefiting from the tax rate difference mentioned above. This compares to $1.66 per share reported in the comparable period in 2025. EBITDA was $53.0 million, similar to the $53.1 million reported in the year-ago quarter. Adjusted EBITDA was $53.4 million, and Adjusted EBITDA margin on total revenues was 11.2%, compared to 11.1% in the second quarter of 2025. Cash flows from operations were $99.7 million in this year's second quarter, including $43.0 million in restricted cash tied to energy efficiency programs. Cash flows from operations excluding restricted cash were $56.7 million compared to $50.4 million on the same basis in last year's second quarter. Backlog and New Business Total backlog was $3.3 billion at the end of the second quarter of 2026. Funded backlog was more than $1.6 billion, or approximately 50% of the total backlog. The total value of contracts awarded in the 2026 second quarter was $402 million for a quarterly book-to-bill ratio of 0.85 and trailing twelve-month contract awards totaled $2.0 billion for a book-to-bill ratio of 1.09. The business development pipeline increased 9% sequentially to $9.3 billion. Commercial Revenue Second Quarter 2026 Highlights Commercial revenue was $166.0 million during the quarter, up 5.9% year-over-year. Commercial revenue accounted for 35.0% of total revenue, up from 32.9% of total revenue in the 2025 second quarter. Commercial energy revenues increased 4.4%, led by a 6.7% increase in utility programs, and represented 87.1% of commercial revenue. Key Commercial Contracts Awarded in the Second Quarter of 2026 Notable commercial awards won in the second quarter of 2026 included: A new contract with Entergy Louisiana to implement its portfolio of residential, commercial and industrial energy efficiency programs. A recompete contract with a consortium of Northeastern U.S. utilities to continue serving as lead implementer for its residential new construction energy efficiency program. A recompete contract under a master services agreement with a Western U.S. utility to provide management assistance services related to regulatory compliance and permitting and construction for environmental and capital projects. A recompete subcontract with a Midwestern U.S. energy company to support residential and low-income energy efficiency program implementation services. A recompete contract with a Mid-Atlantic U.S. utility to provide energy efficiency program management and customer marketing support. A recompete contract with a Mid-Atlantic U.S. utility to implement its residential and commercial energy efficiency programs. A recompete subcontract to support implementation of beneficial electrification programs for a Midwestern U.S. utility. A new contract with a Mid-Atlantic U.S. energy efficiency nonprofit organization to provide home performance energy efficiency program implementation services. Government Revenue Second Quarter 2026 Highlights Revenue from government clients was $308.5 million during the quarter. U.S. federal government revenue was $184.9 million, down 9.5% compared to the $204.4 million reported in the year-ago second quarter, and 1.4% above the $182.4 million in the first quarter of 2026. Year-on-year revenue comparisons were impacted by contract cancellations that occurred between February and May of last year, and a slower pace of new RFPs during that time. Federal government revenue accounted for 39.0% of total revenue, compared to 42.9% of total revenue in the second quarter of 2025. U.S. state and local government revenue was $84.0 million, 1.9% below the $85.7 million reported in the year-ago quarter. State and local government clients represented 17.7% of total revenue, compared to 18.0% in the second quarter of 2025. International government revenue was $39.5 million, up 35.1% from the $29.3 million reported in the year-ago quarter. International government revenue represented 8.3% of total revenue, compared to 6.1% in the second quarter of 2025. Key Government Contracts Awarded in the Second Quarter of 2026 Notable government contract awards won in the second quarter of 2026 included: A new subcontract task order with a ceiling value of $25.0 million to deliver cybersecurity technology and research and development services to the Army Research Lab. A recompete subcontract with a value of $19.6 million to develop and implement innovative value-based-care analytic infrastructure and cloud-based tools for a federal health agency. Two new subcontracts with a combined value of $13.5 million to provide technical assistance supporting sustainable site reuse and land revitalization initiatives and hazardous waste site cleanup for a federal government agency. A new contract with a value of $9.7 million to build open-source software to support authoring and testing of electronic healthcare quality measures for a federal health agency. A new contract with a value of $8.6 million with a federal government department to provide digital modernization and technology support services. A contract modification with a value of $7.3 million with a U.S. state housing agency to provide program management support services. A recompete contract with a value of $7.0 million with a Western U.S. county government to provide project management services for its electric vehicle charger installation project. Dividend Declaration On August 6, 2026, ICF declared a quarterly cash dividend of $0.14 per share, payable on October 9, 2026, to shareholders of record on September 4, 2026. Summary and Outlook "We are looking ahead to a strong second half, led by accelerated growth in revenues from commercial energy and state & local government clients, continued double-digit growth in revenues from international government clients, and sequential growth in revenues from federal government clients in the third quarter, followed by a return to year-on-year growth in that client category in the fourth quarter. Approximately 90% of the revenues required to reach the midpoint of our guidance range for full year 2026 are already in backlog. This supports our expectation for revenues in the range of $1.89 billion to $1.96 billion, GAAP EPS from $5.95 to $6.25 and Non-GAAP EPS of $6.95 to $7.25. We expect operating cash flow to range from $135 million to $150 million, excluding the impact of restricted cash. "In the last 18 months, we have demonstrated the resilience of ICF's business model and the agility of our professional staff and management teams, who have effectively pivoted to capture revenue opportunities while maintaining margins. These efforts, together with our investments in growth markets, have positioned ICF for growth in 2026 and a return to mid- to high-single digit growth in 2027. "Demonstrating our confidence in ICF's long-term prospects, we repurchased 217,542 ICF shares in the second quarter, bringing our share repurchases to 435,055 for the first half of 2026," Mr. Wasson concluded. About ICF ICF is a leading global solutions and technology provider. At ICF, business analysts and policy specialists work together with digital strategists, data scientists and creatives. We combine unmatched industry expertise with cutting-edge engagement capabilities to help organizations solve their most complex challenges. Since 1969, public and private sector clients have worked with ICF to navigate change and shape the future. Learn more at icf.com. Caution Concerning Forward-looking Statements Statements that are not historical facts and involve known and unknown risks and uncertainties are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, as amended. Such statements may concern our current expectations about our future results, plans, operations and prospects and involve certain risks, including those related to: the government contracting industry generally; our dependence on contracts with U.S. federal, state and local, and international government clients for the majority of our revenue; failure by Congress or other governmental bodies to approve budgets and appropriations in a timely fashion, reductions in government spending, and the impact of a lengthy federal government shutdown; the current Administration's policy changes, executive orders, and failure to spend Congressionally mandated appropriations, including the resulting effect on government audits and contract terminations; changes in federal government budgeting and spending priorities; our ability to estimate and control costs under our fixed-price contracts; the realization of our backlog; the dependence of our commercial work on sectors of the global economy that are highly cyclical; and our ability to acquire and successfully integrate businesses. These and other factors that could cause our actual results to differ materially from those indicated in our forward-looking statements are described in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2025, and in our subsequent filings with the Securities and Exchange Commission. The forward-looking statements included herein are made only as of the date hereof, and we specifically disclaim any obligation to update these statements in the future. Note on Forward-Looking Non-GAAP MeasuresThe company does not reconcile its forward-looking non-GAAP financial measures to the corresponding U.S. GAAP measures, due to the variability and difficulty in making accurate forecasts and projections and because not all of the information necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures (such as the effect of share-based compensation or the impact of future extraordinary or non-recurring events like acquisitions) is available to the company without unreasonable effort. For the same reasons, the company is unable to estimate the probable significance of the unavailable information. The company provides forward-looking non-GAAP financial measures that it believes will be achievable, but it cannot accurately predict all of the components of the adjusted calculations, and the U.S. GAAP financial measures may be materially different than the non-GAAP financial measures. Investor Contacts: Lynn Morgen, ADVISIRY PARTNERS, [email protected] +1.212.750.5800 David Gold, ADVISIRY PARTNERS, [email protected] +1.212.750.5800 Company Information Contact: Lauren Dyke, ICF, [email protected] +1.571.373.5577 View original content to download multimedia:https://www.prnewswire.com/news-releases/icf-reports-second-quarter-2026-results-302845321.html