ICF International (ICFI) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $437.5 million, down 10.3% year-over-year, mainly due to timing shifts and terminated federal contracts, but federal government revenues increased 8.6% sequentially and international government revenues grew 17.5% year-over-year.

• Net income was $20.5 million, with GAAP EPS of $1.12 (including a $0.07 unfavorable tax item) and non-GAAP EPS of $1.50 (including a $0.09 unfavorable tax item), both down from Q1 2025.

• Adjusted EBITDA was $48.9 million (11.2% margin), stable year-over-year but down from $55.2 million in Q1 2025.

• Commercial, state and local, and international clients accounted for over 58% of Q1 revenues, with commercial revenue at 33.4% and commercial energy revenue up 1.9% year-over-year.

• The company remains focused on expanding client relationships, pursuing larger engagements, and strategic acquisitions.

Financial highlights

• Gross margin was 38.1%, up 10 basis points year-over-year despite lower revenues.

• Operating income was $34.9 million (8.0% margin), down 9.2% year-over-year.

• Operating cash flow used was $3.1 million, a significant improvement from $33 million used in Q1 2025.

• Direct costs decreased 10.5% to $270.6 million; indirect and selling expenses fell 9.9% to $118.8 million.

• Net cash provided by financing activities was $15.1 million, including $18.3 million in share repurchases and $2.6 million in dividends paid.

Outlook and guidance

• Reaffirmed full-year 2026 guidance: revenue of $1.89–$1.96 billion (3% growth at midpoint), GAAP EPS of $5.95–$6.25, non-GAAP EPS of $6.95–$7.25 (5% growth at midpoint).

• Operating cash flow expected at $135–$150 million for 2026.

• Double-digit growth anticipated from commercial, state and local, and international clients, with non-federal revenues expected to exceed 60% of total 2026 revenues.

• Targeting mid to high single-digit organic growth in 2027, with potential for double-digit growth including acquisitions.

• Management expects long-term demand growth driven by government and industry needs in energy, health, disaster recovery, and security.