ICF International (ICFI) Q4 2025 earnings summary

Executive summary

• Fourth quarter and full year 2025 results were within guidance, showing resilience amid federal government challenges, including a six-week shutdown, with commercial, state & local, and international government clients driving 16% Q4 growth and 14% full-year growth.

• Non-federal revenues grew 14% year-over-year, now representing 57% of total revenues, with commercial energy leading at 24% growth; commercial energy client revenue surged 23% in Q4 and 24% for the year.

• Federal revenues declined 25% year-over-year due to contract cancellations and procurement slowdowns, but the business is stabilizing with a strong backlog and pipeline.

• Margins remained steady year-over-year, with gross margin expanding by 60 basis points and adjusted EBITDA margin at 11.1% for 2025.

• Diversification and efficiency improvements position the company for a return to revenue growth in 2026, with non-federal clients expected to exceed 60% of total revenues.

Financial highlights

• Q4 2025 revenue was $443.7M, down 10.6% year-over-year; full-year revenue was $1.87B, down from $2.02B in 2024.

• Q4 Adjusted EBITDA was $46M (10.4% margin), down from $56.3M (11.3%) last year; full-year Adjusted EBITDA was $207.2M (11.1% margin).

• Q4 net income was $17.3M ($0.94 per diluted share); full-year GAAP EPS was $4.95, non-GAAP EPS $6.77.

• Operating cash flow for 2025 was $141.9M; year-end debt was $401.4M, with an adjusted leverage ratio of 1.98x.

• Book-to-bill ratio was 1.19x; backlog stood at $3.4B, with a business development pipeline of $8.6B.

Outlook and guidance

• 2026 revenue guidance: $1.89B–$1.96B (3% growth at midpoint); GAAP EPS $5.95–$6.25; non-GAAP EPS $6.95–$7.25 (5% growth at midpoint).

• Double-digit revenue growth expected from non-federal clients, led by commercial energy, with non-federal clients expected to exceed 60% of total 2026 revenue.

• Federal revenues expected to decline at a high single-digit rate in 2026, with sequential improvement and a return to year-over-year growth by Q4.

• Q1 2026 guidance: revenue ~$450M, GAAP EPS ~$1.20, non-GAAP EPS ~$1.55.

• Full-year operating cash flow expected at $135M–$150M; capital expenditures $24M–$26M.