ICF International, Inc.

Second-quarter revenue was $474.5 million, versus $476.2 million in Q2 2025. Gross margin was 37.2% versus 37.3% last year, and adjusted EBITDA was $53.4 million, up 0.9%, with adjusted EBITDA margin of 11.2%, up 10 basis points year over year. Non-GAAP EPS was $1.86, up 12%, and net income was $20.9 million, or $1.49 per diluted share, versus $23.7 million, or $1.28 per diluted share, last year. Federal revenue declined 9.5% year over year, non-federal revenue rose 6.6%, commercial revenues increased 6%, international government revenues increased 35%, and state and local revenues declined 1.9%. For full year 2026, management reaffirmed revenue guidance 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. It also kept operating cash flow guidance at $135 million to $150 million, lowered expected interest expense to $26 million to $28 million from $27 million to $29 million, reduced share-count guidance to 18.2 million from 18.3 million, and kept tax rate guidance at approximately 20.5%. Management said more than 90% of the revenue needed to achieve full-year guidance is already in backlog, and expects sequential revenue growth in each of the next two quarters, with Q4 faster than Q3.

John Wasson said the quarter matched expectations and showed the benefit of ICF’s diversified model, with growth in commercial, international, and sequential federal revenue offsetting federal award delays. He emphasized that the business is becoming more diversified, collaborative, efficient, and agile, and said the company is positioned for a return to growth in 2026 and acceleration in 2027. He also highlighted pipeline strength, contract wins over $200 million since quarter-end, and a disciplined M&A approach focused mainly on tuck-in deals in commercial energy.

James C. Morgan highlighted that cost controls and mix helped offset higher subcontractor pass-throughs: subcontractor and other direct costs were $121.4 million, or 25.6% of revenue, while gross margin stayed at 37.2%. He noted operating cash flow of $99.7 million, or $56.7 million excluding restricted cash, and reiterated full-year operating cash flow guidance of $135 million to $150 million excluding restricted cash. He also pointed to net debt of $403 million, adjusted leverage of 2.06x, expected year-end leverage under 1.6x absent acquisitions, and continued capital allocation to dividends, buybacks, organic investment, and acquisitions.

Analysts focused on whether commercial energy can accelerate to mid-teens growth in the second half to meet full-year targets; management said the math is roughly right and pointed to strong awards, expected contract conversions, and back-half-loaded performance fees. Questions also centered on the slight backlog decline and weak federal book-to-bill; management said the main issue was slower federal procurement, but they are seeing improvement and expect a healthier Q3 book-to-bill. Other topics included international growth, federal technology modernization, OEM licensing, disaster recovery timing, and acquisition appetite, with management saying international momentum looks durable, they have not seen a material OEM-related shift, and M&A remains disciplined and focused on commercial energy.