ICF International (ICFI) Cantor Fitzgerald Global Technology Conference summary

Efficiency impacts and government market trends

• $90 million in annualized revenue impacts from federal contract terminations and stop work orders, mainly at USAID, due to efficiency and cost-cutting by the new administration.

• Programmatic federal work most affected, representing about 4% of total revenues; conservative guidance set for 2025.

• Half of business outside federal market (commercial, state/local, international) expected to grow at least 15% in 2025, with commercial energy up 26% last year.

• State/local disaster recovery and international contracts (notably $210M in Europe) drive growth outside federal.

• Federal IT modernization remains robust, with a focus on AI, automation, and cloud, despite a temporary procurement pause.

IT modernization and technology strategy

• Federal IT modernization is in mid-stages, with civilian agencies in the fourth or fifth inning; defense/intel further along.

• Emphasis on multi-tech fluency, mission outcomes, and leveraging automation and AI for workflow improvements.

• AI implementation and workflow automation are the fastest-growing, highest-margin areas in IT modernization.

• Maintenance of legacy systems and PMO-style work are low-margin and a small part of the portfolio.

• Cybersecurity remains a lagging area, but all systems are validated to the highest standards regardless of regulatory changes.

Financial performance and margin outlook

• Less than 15% of federal business is cost plus; 45% is fixed price, which is growing and delivers strong margins.

• Commercial business yields 25% higher margins and is expanding rapidly, supporting overall margin growth.

• Margins expected to be maintained in 2024, with potential upside long-term; careful cost management required amid federal transition.