ICF International (ICFI) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $487.6 million, down 1.4% year-over-year, in line with expectations, as commercial, state, local, and international government clients grew to 51% of revenue, offsetting a 12.6% federal government decline due to contract terminations and new administration priorities.

• Net income was $26.9 million, with GAAP EPS at $1.44, flat year-over-year, including $0.12 per share in special charges and a $0.13 per share one-time tax benefit; Non-GAAP EPS rose 9.6% to $1.94.

• Adjusted EBITDA was $55.2 million (11.3% margin), nearly flat year-over-year, reflecting stable operating performance and favorable business mix.

• Completed integration of Applied Energy Group, acquired in December 2024, enhancing energy segment growth and technology capabilities.

• Repurchased 313,000 shares for $35 million in Q1; quarterly dividend of $0.14 per share declared, payable July 11, 2025.

Financial highlights

• Operating income for Q1 2025 was $38.4 million (7.9% margin), down from $40.9 million (8.3% margin) in Q1 2024.

• Gross margin expanded to 38% due to favorable mix and lower subcontractor costs.

• Adjusted EBITDA margin was 11.3%; book-to-bill ratio was 0.96; backlog at quarter-end was $3.4 billion, with $1.9 billion funded.

• Net cash used in operating activities was $33.0 million, mainly due to timing of invoicing and collections.

• Long-term debt stood at $502.0 million as of March 31, 2025.

Outlook and guidance

• 2025 revenue guidance reaffirmed: flat to down 10% from 2024, with a 10% decline as the floor due to federal revenue loss.

• Commercial, energy, state, local, and international government revenues expected to grow at least 15% in aggregate for 2025.

• Adjusted EBITDA margins expected to remain comparable to 2024; operating cash flow guidance at $150 million.

• Full-year tax rate expected at 18.5%; guidance excludes Q1 2025 special tax benefit.

• IT modernization business expected to decline 5-10% in 2025 due to delayed federal awards.