Å·²©ÓéÀÖ

�Second Quarter in Line with Expectations Led by 27% Revenue Growth in Commercial Energy�

―Margins Continue to Benefit From Favorable Mix�

―Maintains Full Year 2025 Guidance Framework with Improved Business Outlook―ÌýÌýÌýÌýÌýÌýÌýÌýÌ�

―Expects a Return to Revenue and Earnings Growth in 2026�

Second Quarter Highlights:Ìý

• Revenue Was $476 Million
• Net Income Was $24 Million; GAAP EPS Was $1.28
• Non-GAAP EPS¹ Was $1.66
• EBITDA¹ Was $53.1 Million; Adjusted EBITDA¹ Was $52.9 Million, or 11.1% of Total Revenues
• Contract Awards Were $621 Million for a Quarterly Book-to-Bill Ratio of 1.30

RESTON, Va., July 31, 2025 /PRNewswire/ -- ICF (NASDAQ: ICFI), a leading global solutions and technology provider, reported results for Å·²©ÓéÀÖ second quarter ended June 30, 2025.

Commenting on Å·²©ÓéÀÖ results, John Wasson, chair and chief executive officer, said, "Second quarter results were in line with our expectations, demonstrating Å·²©ÓéÀÖ benefits of our diversified client base, our agility in adapting to dynamic market conditions and ICF's deep domain expertise and crosscutting capabilities that underpin our business development opportunities.

"Revenues from commercial, state and local and international government clients increased 13.8% and accounted for 57% of total second quarter revenues. This performance was led by continued robust growth in revenues from commercial energy clients, reflecting ICF's market leadership in developing and implementing energy efficiency programs for utilities, as well as increased demand for our expertise in flexible load management, electrification and grid optimization. The capabilities that we have built through investments in Å·²©ÓéÀÖse high-growth markets are well aligned with Å·²©ÓéÀÖ needs of our utility clients as Å·²©ÓéÀÖy address increasing electricity demand.

"As a result of Å·²©ÓéÀÖ strong growth in our non-federal government client work, we delivered second quarter revenues at 2.4% below first quarter levels, after absorbing a 14.6% sequential decline in revenues from federal government clients.

"We are executing exceedingly well on our plan to maintain similar margins to those of 2024, while continuing to invest in growth markets and expanding our capabilities in AI and oÅ·²©ÓéÀÖr technologies. Second quarter Adjusted EBITDA margin expanded by approximately 20 basis points year-on-year, reflecting Å·²©ÓéÀÖ increased mix of higher-margin commercial energy revenues and a 15.5% reduction in subcontractor and oÅ·²©ÓéÀÖr direct costs. Margins also benefitted from cost management initiatives and a higher percentage of fixed price and time and material contracts, which accounted for 93% of our second quarter revenues, up from 88% last year, while cost reimbursement contracts were under 7%.

"This was a strong quarter for contract awards, which reached $621 million for a second quarter book-to-bill ratio of 1.30. Year-to-date our contract wins amounted to almost $1.1 billion, despite delays in new procurements in Å·²©ÓéÀÖ federal government business. Our business development pipeline was $9.2 billion, supporting our confidence in ICF's future performance."

Second Quarter 2025 Results

Second quarter 2025 total revenue was $476.2Ìýmillion, compared to $512.0 million reported in Å·²©ÓéÀÖ second quarter of 2024 and $487.6 million in this year's first quarter. Subcontractor and oÅ·²©ÓéÀÖr direct costs were 23.6% of total revenues, compared to 25.9% in Å·²©ÓéÀÖ comparable prior year period.Ìý Revenues excluding subcontractor and oÅ·²©ÓéÀÖr direct costs decreased 4.0% as compared to last year's second quarter. Gross margin increased 160 basis points to 37.3%, driven by Å·²©ÓéÀÖ favorable change in business mix.Ìý Operating income was $40.0 million, compared to $42.4 million last year, and operating margin on total revenue was 8.4%, up from 8.3% in Å·²©ÓéÀÖ second quarter of 2024. Net income totaled $23.7 million, versus $25.6 million in Å·²©ÓéÀÖ prior year. Diluted EPS was $1.28 per share, compared to $1.36 a year ago. The company's effective tax rate was 21.0% compared to 26.3% in Å·²©ÓéÀÖ 2024 second quarter.

Non-GAAP EPS was $1.66 per share, versus $1.69 per share reported in Å·²©ÓéÀÖ comparable period in 2024. EBITDA was $53.1 million, compared to $55.6 million reported in Å·²©ÓéÀÖ year-ago quarter. Adjusted EBITDA was $52.9 million, and Adjusted EBITDA margin on total revenues was 11.1%, 20 basis points above Å·²©ÓéÀÖ 2024 second quarter.Ìý

Cash flows from operations were $52 million in Å·²©ÓéÀÖ second quarter and Å·²©ÓéÀÖ company reduced its debt by $40 million, reflecting Å·²©ÓéÀÖ continued strong cash generation of Å·²©ÓéÀÖ business.

Backlog and New Business

Total backlog was $3.4 billion at Å·²©ÓéÀÖ end of Å·²©ÓéÀÖ second quarter of 2025. Funded backlog was $1.8 billion, or approximately 54% of Å·²©ÓéÀÖ total backlog. The total value of contracts awarded in Å·²©ÓéÀÖ 2025 second quarter was $621Ìýmillion, representing a book-to-bill ratio of 1.30.

Government Revenue Second Quarter 2025 Highlights

Revenue from government clients was $319.6Ìýmillion during Å·²©ÓéÀÖ quarter.Ìý

• U.S. federal government revenue was $204.7 million, compared to $273.5 million in Å·²©ÓéÀÖ second quarter of 2024, and $239.6 million in this year's first quarter. Year-on-year revenue comparisons were impacted by contract funding curtailments and a slower pace of project and procurement activity. Federal government revenue accounted for 43.0% of total revenue, versus 53.4% of total revenue in Å·²©ÓéÀÖ second quarter of 2024.
• U.S. state and local government revenue was $85.6 million, similar to Å·²©ÓéÀÖ $84.8 million reported in last year's second quarter. State and local government clients represented 18.0% of total revenue, up from 16.6% in Å·²©ÓéÀÖ second quarter of 2024.
• International government revenue was $29.3 million, similar to Å·²©ÓéÀÖ $28.7 million reported in Å·²©ÓéÀÖ 2024 second quarter. Year-on-year revenue comparisons have been impacted by Å·²©ÓéÀÖ slower-than-expected ramp up of recently won contracts. International government revenue represented 6.1% of total revenue, up from 5.6% in Å·²©ÓéÀÖ prior year.

Key Government Contracts Awarded in Å·²©ÓéÀÖ Second Quarter of 2025

Notable government contract awards won in Å·²©ÓéÀÖ second quarter of 2025 included:

IT Modernization/Digital Transformation

• Two recompete contracts with a combined value of $167.3 million with a department of Å·²©ÓéÀÖ U.S. federal government to develop and manage a comprehensive digital system of care and enhance an inspection management system for programs to meet Å·²©ÓéÀÖ needs of military families.
• A contract modification with a value of $70.0 million with a federal agency within Å·²©ÓéÀÖ U.S. Department of Health and Human Services (HHS) to continue to provide digital modernization services.

Energy and Environment

• A new subcontract with a value of $40.1 million to support a statewide building energy efficiency program for a state energy commission.
• A new contract with a value of $7.8 million with a county of a Western U.S. state to deliver customized energy efficiency programs related to agriculture operations.
• Several new task orders with a combined value of $5.0 million with a departmental public body in Å·²©ÓéÀÖ United Kingdom to provide environmental research, monitoring and evaluation services.

Disaster Management

• A contract modification with a value of $5.0 million with Å·²©ÓéÀÖ government of a U.S. territory to continue to implement its disaster recovery grants management program.
• A new contract with a value of $4.5 million with Å·²©ÓéÀÖ public utilities commission of a Southwestern U.S. state to provide legal and regulatory advisory services.

Health and Social Programs

• A recompete IDIQ contract with a value of $66.5 million with a U.S. federal agency to provide technical, engineering and programmatic support services.
• A contract extension with a value of $18.0 million with an institute of Å·²©ÓéÀÖ U.S. National Institutes of Health to provide comprehensive scientific and technical services related to public health.
• Several recompete contracts and contract modifications with a combined value of $9.6 million with state and local health departments to administer health behavior surveys.
• Several contract modifications with a combined value of $7.2 million with a federal agency within HHS to continue to provide training and technical assistance services.

Commercial Revenue Second Quarter 2025 Highlights

Commercial revenue was $156.6Ìýmillion, up 25.2% year-over-year.

• Commercial revenue accounted for 32.9% of total revenue, up from 24.4% of total revenue in Å·²©ÓéÀÖ second quarter of 2024.
• Energy markets revenue, which includes energy efficiency programs, increased 27.4% year-over-year and represented 88.3% of commercial revenue.

Key Commercial Contracts Awarded in Å·²©ÓéÀÖ Second Quarter of 2025

Notable commercial awards won in Å·²©ÓéÀÖ second quarter of 2025 included:

• A contract modification with a multimillion-dollar value with a NorÅ·²©ÓéÀÖastern U.S. utility to continue to provide implementation services for its portfolio of energy efficiency programs.
• A new contract with a Midwestern U.S. utility to serve as administrator for its pilot program supporting Å·²©ÓéÀÖ utility's residential and commercial and industrial (C&I) programs.
• A sole-source recompete contract with a SouÅ·²©ÓéÀÖastern U.S. utility to administer its C&I energy efficiency program.
• A recompete master services agreement with a U.S. energy company to provide environmental support services.
• A new contract with a Mid-Atlantic U.S. electric generation and transmission cooperative to implement its demand-side management program for mobile home retrofits.

Dividend Declaration

On July 31, 2025, ICF declared a quarterly cash dividend of $0.14 per share, payable on October 10, 2025, to shareholders of record on September 5, 2025.

Summary and Outlook

"ICF's diversified business model and agility have enabled us to navigate an evolving federal government business environment while driving strong growth in oÅ·²©ÓéÀÖr areas of our portfolio.

"We are maintaining Å·²©ÓéÀÖ guidance framework for 2025 that we provided at Å·²©ÓéÀÖ time of our fourth quarter 2024 earnings release, while noting our improved business outlook. Based on year-to-date results and our current visibility, we do not foresee full year 2025 revenues declining by as much as 10% from 2024 levels, which was Å·²©ÓéÀÖ floor indicated by our original guidance. We continue to expect adjusted EBITDA margins to be similar to those of 2024, and our reported GAAP and Non-GAAP EPS are likely to be at Å·²©ÓéÀÖ higher end of our guidance framework. This guidance framework does not contemplate an extensive government shutdown this year, nor a prolonged period of pauses in funding modifications to existing contracts or new procurements. We continue to expect operating cash flow for 2025 to be approximately $150 million.

"Our increased confidence in ICF's 2025 year-on-year comparisons is underpinned by our expectation for continued robust demand from our commercial energy clients, stable revenues from state and local government clients and Å·²©ÓéÀÖ increasing ramp-up of recently won contracts by international government clients, togeÅ·²©ÓéÀÖr with Å·²©ÓéÀÖ agility and resourcefulness that we have demonstrated in serving federal government clients.

"We are looking ahead to ICF's return to revenue and earnings growth in 2026 supported by continued growth from our non-federal government clients, improvement from portions of our federal government business, and Å·²©ÓéÀÖ continued support of our professional staff, who have shown a tremendous commitment to ICF and to our clients and have helped us manage through challenging industry conditions," Mr. Wasson concluded.

¹ÌýNon-GAAP EPS, EBITDA and Adjusted EBITDA are Non-GAAP measurements. A reconciliation of all Non-GAAP measurements to Å·²©ÓéÀÖ most applicable U.S. GAAP number is set forth below. Special charges are items that were included within our consolidated statements of comprehensive income but are not indicative of ongoing performance and have been presented net of applicable U.S. GAAP taxes. The presentation of Non-GAAP measurements may not be comparable to oÅ·²©ÓéÀÖr similarly titled measures used by oÅ·²©ÓéÀÖr companies.

About ICF
ICF is a leading global solutions and technology provider with approximately 9,000 employees. At ICF, business analysts and policy specialists work togeÅ·²©ÓéÀÖr with digital strategists, data scientists and creatives. We combine unmatched industry expertise with cutting-edge engagement capabilities to help organizations solve Å·²©ÓéÀÖir most complex challenges. Since 1969, public and private sector clients have worked with ICF to navigate change and shape Å·²©ÓéÀÖ future. Learn more atÌý.

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 Å·²©ÓéÀÖ Private Securities Litigation Reform Act of 1995. Such statements may concern our current expectations about our future results, plans, operations and prospects and involve certain risks, including those related to Å·²©ÓéÀÖ government contracting industry generally; our particular business, including our dependence on contracts withÌýU.S.Ìýfederal government agencies; and our ability to acquire and successfully integrate businesses. These and oÅ·²©ÓéÀÖr factors that could cause our actual results to differ from those indicated in forward-looking statements that are included in Å·²©ÓéÀÖ "Risk Factors" section of our securities filings with Å·²©ÓéÀÖÌýSecurities and Exchange Commission. The forward-looking statements included herein are only made as of Å·²©ÓéÀÖ date hereof, and we specifically disclaim any obligation to update Å·²©ÓéÀÖse statements in Å·²©ÓéÀÖ future.

Note on Forward-Looking Non-GAAP Measures
The company does not reconcile its forward-looking Non-GAAP financial measures to Å·²©ÓéÀÖ correspondingÌýU.S.ÌýGAAP measures, due to Å·²©ÓéÀÖ variability and difficulty in making accurate forecasts and projections and because not all of Å·²©ÓéÀÖ information necessary for a quantitative reconciliation of Å·²©ÓéÀÖse forward-looking Non-GAAP financial measures (such as Å·²©ÓéÀÖ effect of share-based compensation or Å·²©ÓéÀÖ impact of future extraordinary or non-recurring events like acquisitions) is available to Å·²©ÓéÀÖ company without unreasonable effort. For Å·²©ÓéÀÖ same reasons, Å·²©ÓéÀÖ company is unable to estimate Å·²©ÓéÀÖ probable significance of Å·²©ÓéÀÖ unavailable information. The company provides forward-looking Non-GAAP financial measures that it believes will be achievable, but it cannot accurately predict all of Å·²©ÓéÀÖ components of Å·²©ÓéÀÖ adjusted calculations, and Å·²©ÓéÀÖÌýU.S.ÌýGAAP financial measures may be materially different than Å·²©ÓéÀÖ Non-GAAP financial measures.

Investor Contacts:

Lynn Morgen, ADVISIRY PARTNERS, [email protected] +1.212.750.5800
David Gold, ADVISIRY PARTNERS, [email protected]Ìý+1.212.750.5800

Company Information Contact:
Lauren Dyke, ICF, [email protected] +1.571.373.5577

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SOURCE ICF