Earnings

ICF Restores Year-on-Year Revenue Growth

The Tip Desk · November 11, 2026 · 4 min read

Third-quarter revenue was $470.5 million, up 1.1% from a year earlier, as non-GAAP earnings reached $1.98 a share.

ICF International (ICFI), a global consulting and technology services provider, reported third-quarter revenue of $470.5 million, up 1.1% from $465.4 million a year earlier, marking a return to year-on-year growth after second-quarter revenue of $474 million that was similar to prior-year levels.

Chair and chief executive John Wasson said the third quarter demonstrated the year-on-year revenue growth the company had anticipated would begin in the second half of 2026.

Net income was $31.7 million, or $1.76 a share, compared with $23.8 million, or $1.28 a share, in the year-ago quarter. The company said the GAAP result benefited from a tax rate of 15.0%, versus 22.7% a year earlier, and a lower share count. Non-GAAP earnings rose 18.6% to $1.98 a share.

Operating income was $43.6 million, up 13.6% from $38.4 million, and operating margin expanded 100 basis points to 9.3% from 8.3%. Gross margin was 38.1%, 50 basis points above the prior-year period. Subcontractor and other direct costs were 23.6% of revenue.

Adjusted EBITDA was $54.2 million, or 11.5% of total revenues, expanding 10 basis points from 11.4% a year earlier and a notable sequential increase from 11.2% in the second quarter. Wasson attributed the margin performance to efficient contract delivery and favorable contract mix. Fixed-price contracts accounted for 50.2% of third-quarter revenues, up from 48.7% in the similar period last year, and together with time-and-material contracts represented 94.3% of the quarter’s revenues.

Revenue from government clients was $311.7 million. U.S. federal government revenue was $191.3 million, 3.4% above the $185.1 million in the second quarter of 2026, and 3.5% below the $198.3 million reported in the year-ago third quarter. The company said year-on-year comparisons were impacted by contract cancellations that occurred in 2025 and a slower pace of new RFPs. Federal government revenue accounted for 40.7% of total revenue, compared with 42.6% in the third quarter of 2025.

U.S. state and local government revenue was $87.9 million, 7.6% above the $81.7 million reported a year earlier. International government revenue was $32.5 million, up 12.0% from $29.0 million.

Commercial revenue was $158.8 million, up 1.5% year-over-year, and accounted for 33.8% of total revenue. Commercial energy revenues represented 88.6% of commercial revenue. Revenues from the company’s commercial energy programs were similar to last year’s levels after a 6.7% year-on-year increase in the second quarter. Wasson said third-quarter revenues from commercial energy clients were considerably below expectations due to a sharp fall-off in contract add-on activity, a material increase in political and regulatory pressure on utilities to develop affordable solutions, and slower-than-expected ramp-ups on new contracts. ICF’s revenues from commercial energy clients are expected to increase at a low- to mid-single-digit rate for 2026.

Energy advisory revenues increased 14.1% in the quarter, after a 2.5% increase in the second quarter. Other commercial energy comparisons declined year-on-year due to the wind-down of several wind energy projects through last year’s third quarter.

Contract awards were $746 million, 4.5% ahead of last year, for a quarterly book-to-bill ratio of 1.59, versus second-quarter awards of $402 million and a 0.85 book-to-bill ratio. Trailing twelve-month contract awards totaled $2.0 billion for a book-to-bill ratio of 1.11. More than 60% of third-quarter awards represented new business. Total backlog was $3.5 billion, with funded backlog of $1.8 billion, or approximately 52% of the total. The business development pipeline stood at $8.2 billion at quarter-end, down from $9.3 billion at the end of the second quarter.

Cash flows from operations were $35.2 million in the quarter. Excluding restricted cash mainly tied to energy efficiency programs, operating cash flow was $45.5 million, up from $17.3 million in the comparable prior-year period.

For full year 2026, ICF expects revenues similar to 2025 levels, with GAAP EPS of approximately $5.95, inclusive of $0.11 of special charges. The company is maintaining the midpoint of its non-GAAP EPS guidance range of $7.10, representing 4.9% year-on-year growth, and said the outlook benefits from improved margins, a lower interest rate and reduced share count. Operating cash flow is expected to range from $135 million to $150 million, excluding the impact of restricted cash.

ICF declared a quarterly cash dividend of $0.14 a share, payable on January 8, 2027, to shareholders of record on December 4, 2026.

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