ICF International, Inc.

(Unaudited)

(dollar amounts in tables in thousands, except share and per share data)

NOTE 1 – BASIS OF PRESENTATION

Basis of Presentation

The accompanying consolidated financial statements are of ICF International, Inc. (“ICFI”) and its wholly-owned principal subsidiary, ICF Consulting Group, Inc. (“Consulting,” and together with ICFI, the “Company”), and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”). ICFI is a holding company with no operations or assets other than its investment in the common stock of Consulting. All other subsidiaries of the Company are wholly owned by Consulting. Intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenue and expenses. Management evaluates these estimates on an ongoing basis including those that relate to revenue recognition (including estimates of variable considerations and remaining costs to complete fixed-price contracts), expected credit losses, valuation and lives of tangible and intangible assets acquired from business combinations, and reserves for tax benefits and valuation allowances on deferred tax assets. Actual results experienced by the Company may differ from management’s estimates.

During the three months ended March 31, 2026 and 2025, the Company recognized net income of$0.4 million and$5.9 million, respectively, as a result of net changes in estimates related to fixed-price contracts accounted for under the percentage-of-completion method.

Interim Results

The unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). These rules and regulations permit some of the information and footnote disclosures normally included in annual financial statements, prepared in accordance with U.S. GAAP, to be condensed or omitted. In management’s opinion, the unaudited consolidated financial statements contain all adjustments that are of a normal recurring nature, necessary for a fair presentation of the results of operations and financial position of the Company for the interim periods presented. The Company reports operating results and financial data in as asingle operating segment and reporting unit. Operating results for thethree-month periods ended March 31, 2026 and 2025 are not necessarily indicative of the results that may be expected for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2025 and the notes thereto included in the Company’s Annual Report on Form 10-K.

Recent Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03: Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires additional disaggregation of certain costs and expenses. ASU 2024-03 specifically requires all public entities to disclose within a tabular format the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities in each relevant expense caption as well as certain amounts that are already required to be disclosed under current U.S. GAAP. ASU 2024-03 also requires public entities to disclose a qualitative description of the composition of any amounts in relevant expense captions that are not separately disaggregated and the amount and definition of the entity’s selling expenses. ASU 2024-03 will be effective for the Company for the annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The amendments may be adopted on a prospective or retrospective basis. The Company is currently evaluating the impact of the adoption of ASU 2024-03.

Intangibles—Goodwill and Other—Internal-Use Software

In September 2025, the FASB issued ASU 2025-06: Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), which modernizes the accounting for internal-use software costs by removing all references to software development project stages so that the guidance is neutral to different software development methods. ASU 2025-06 will be effective for the Company for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The amendments may be adopted on a prospective, retrospective, or modified basis. The Company is currently evaluating the impact of the adoption of ASU 2025-06.

NOTE 2 – RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalents, and restricted cash as of March 31, 2026 and 2025 to cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows for the three months ended March 31, 2026 and 2025:

(1)

The balance as of March 31, 2026, includes$12.0 million of long-term restricted cash included within "Other assets" on the Company's consolidated balance sheets. There wasno long-term restricted cash balance as of March 31, 2025.

Restricted cash is primarily related to the Company’s energy incentive management business for its public utility clients and restricted cash advances on certain programs.

NOTE 3 – ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consists of contract and other customer receivables. A reconciliation of accounts receivable, net is as follows:

(1)

Includes billed other customer receivables totaling$29.3 million and$20.6 million at March 31, 2026 and December 31, 2025 , respectively, related to the Company’s energy incentive management business for its public utility clients.

The Company sells certain billed accounts receivable in accordance with its Amended Master Receivables Purchase Agreement with MUFG Bank, Ltd. (“MUFG”) that are accounted for as sales under the Accounting Standards Codification (“ASC”) 860, Transfers and Servicing (“ASC 860”). The accounts receivable are sold without recourse and the Company does not retain any ongoing financial interest in the transferred accounts receivable, other than providing servicing activities. The following is a reconciliation of billed accounts receivable sold to MUFG:

(1)

For the three months ended March 31, 2026 and 2025, the Company recorded net outflows of$0.3 million and net inflows of$5.2 million, respectively, in its cash flows from operating activities from the sale of billed accounts receivable.

The following is a reconciliation of cash collections from customers of billed accounts receivable previously sold to MUFG that were eligible and accounted for as sales under ASC 860:

(1)

For thethree months ended March 31, 2026 and 2025, the Company recorded net inflows of$8.2 million and$5.5 million, respectively, in its cash flows from operating activities from the collection of billed accounts receivable that were sold but not yet remitted to MUFG.

The aggregate impact of the sale of billed accounts receivable on the Company’s operating cash flows was net inflows of$7.9 million and$10.7 million for the three months ended March 31, 2026 and 2025, respectively.

At March 31, 2026 and December 31, 2025, the amounts due to MUFG for cash collected and not yet remitted for billed accounts receivable sold that did not qualify as sales under ASC 860 totaled$2.5 million and$3.4 million, respectively. These amounts are included as part of “Accrued expenses and other current liabilities” on the Company’s consolidated balance sheets, and included within cash flows from financing activities on the Company’s consolidated statements of cash flows.

NOTE 4 – LEASES

At March 31, 2026, the Company had operating and finance leases for facilities and equipment with remaining duration ranging from 1 to 13 years. Future minimum lease payments under non-cancellable operating and finance leases as of March 31, 2026 were as follows:

NOTE 5 – LONG-TERM DEBT

At March 31, 2026 and December 31, 2025, long-term debt consisted of:

As of March 31, 2026, the Company had$512.4 million of unused borrowing capacity under the $600.0 million revolving line of credit under a credit agreement with a group of lenders (the “Credit Facility”). The unused borrowing capacity is inclusive of outstanding letters of credit totaling$1.6 million. The average interest rate on borrowings under the Credit Facility was 5.0% and 5.7% for the three months ended March 31, 2026 and 2025, respectively, and 5.6% for the twelve months ended December 31, 2025. Inclusive of the impact of floating-to-fixed interest rate swaps (see “Note 7– Derivative Instruments and Hedging Activities”), the average interest rate was 5.1% for both the three months ended March 31, 2026 and 2025, respectively, and 5.4% for the twelve months ended December 31, 2025.

Future scheduled repayments of debt principal are as follows:

(1)

On April 10, 2026, the Company refinanced the Credit Facility, extending the maturity date to April 10, 2031. See Note 15 – Subsequent Event.

NOTE 6 – REVENUE

Substantially all of the Company’s revenue is recognized over time as control of the related goods or services is transferred to customers.

Disaggregation of Revenue

The Company disaggregates revenue from clients into categories that depict how the nature, amount, and uncertainty of revenue and cash flows are affected by economic and business factors. Those categories are client market, client type, and contract mix.

Contract Assets and Liabilities

Contract assets consist of unbilled receivables on contracts where revenue recognized exceeds the amount billed. Contract liabilities result from advance payments received on a contract or from billings in excess of revenue recognized.

The following table summarizes the contract assets and liabilities as of March 31, 2026 and December 31, 2025:

The decrease in net contract assets (liabilities) is primarily due to the timing difference between the performance of services and billings to customers. During the three months ended March 31, 2026 and 2025, the Company recognized$13.9 million and$12.8 million in revenue related to the contract liabilities balance at December 31, 2025 and 2024, respectively.

Unfulfilled Performance Obligations

In computing unfulfilled performance obligations (“UPO”), the Company excludes contracts with stated term of one year or less (practical expedient), and contracts with the U.S. federal government. As of March 31, 2026, the UPO was$0.2 billion, of which 46% is expected to be recognized as revenue by December 31,2026,64% by December 31,2027,86% by December 31, 2028, and the remainder by December 31,2029.

NOTE 7 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

At March 31, 2026, the Company had floating-to-fixed interest rate swap agreements (the “Swaps”) for an aggregate notional amount of $175.0 million, of which$50.0 million will mature on February 28, 2030, $25.0 million will mature on June 26, 2030, and $100.0 million will mature on July 31, 2030. The Company has designated the Swaps as cash flow hedges. See “Note 5– Long-Term Debt” for details on the impact of the Swaps on the Company’s interest rates, and “Note 12– Fair Value” for the fair value of these Swaps.

NOTE 8– INCOME TAXES

The Company’s effective tax rate (the “ETR”) was 25.1% and 10.5% for the three months ended March 31, 2026 and 2025, respectively. The change in the ETR was primarily due to an income tax benefit of$4.5 million, or 14.8%, recognized in the first quarter of 2025 related to the regulations under Internal Revenue Code (“IRC”) 987, and income tax provisions of$1.9 million, or 6.9%, in the first quarter of 2026 attributable to stock-based compensation vesting.

NOTE 9 – STOCKHOLDERS’ EQUITY

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss as of March 31, 2026 and 2025 included the following:

(1)

The Company expects toreclassify approximately$0.2 million of unrealized losses related to the Change in Fair Value of Interest Rate Hedge Agreements from accumulated other comprehensive (loss) income into earnings during the next 12 months.

(1)

During the first quarter of 2025, the Company reclassified $4.1 million of effect of taxes related to Foreign Currency Translation Adjustments from accumulated other comprehensive (loss) income into earnings in connection with IRC 987.

Share Repurchases

The Company repurchases shares under the $300.0 million share repurchase program authorized by the Company’s board of directors. In addition, the Company repurchases shares in connection with the vesting of restricted stock units (“RSUs”) and performance share awards (“PSAs”) granted to employees.

Repurchases for thethree months ended March 31, 2026 and 2025 are as follows:

NOTE 10 – STOCK-BASED COMPENSATION

The Company’s 2018 Amended and Restated Omnibus Incentive Plan (the “2018 A&R Omnibus Plan”) allows the Company to grant up to 2,050,000 total shares of common stock to officers, key employees, and non-employee directors. As of March 31, 2026, the Company had 579,300 shares available for grant under the 2018 A&R Omnibus Plan.

The following awards were granted during thethree months ended March 31, 2026 and 2025:

The total stock-based compensation expense was$5.4 million and$4.0 million for the three months ended March 31, 2026 and 2025, respectively. The unrecognized compensation expense at March 31, 2026 was$36.2 million, which is expected to vest over the next 2.1 years.

NOTE 11 – EARNINGS PER SHARE

Earnings per share (“EPS”), including the dilutive effect of stock awards for each period reported is summarized below:

There were 2,243 and 79,863 ofpotentially dilutive shares of restricted stock awards that were excluded from the calculation of weighted-average diluted share computations for the three months ended March 31, 2026 and 2025, respectively, because they were anti-dilutive.

NOTE 12 – FAIR VALUE

Financial instruments measured at fair value on a recurring basis and their location within the accompanying consolidated balance sheets are as follows:

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Letters of Credit and Guarantees

The Company had open standby letters of credit totaling$1.6 million at both March 31, 2026 and December 31, 2025. Open standby letters of credit reduce the Company’s borrowing capacity under the Credit Facility.

At March 31, 2026 and December 31, 2025, the Company had$5.8 million and$7.0 million, respectively, of bank guarantees for facility leases and contract performance obligations.

Litigation and Claims

The Company is involved in various legal matters and proceedings arising in the ordinary course of business. While these matters and proceedings cause it to incur costs, including, but not limited to, attorneys’ fees, the Company currently believes that any ultimate liability arising out of these matters and proceedings will not have a material adverse effect on its financial position, results of operations, or cash flows.

NOTE 14– SEGMENT INFORMATION

The Company provides a broad array of professional services to its clients across several markets, primarily within the U.S. The Company operates as asingle reportable and operating segment because the Chief Operating Decision Maker (the “CODM”), which is the Chief Executive Officer, manages the business activities on a consolidated basis. Although the Company disaggregates its revenue by client market and client type, it does not manage its business or allocate resources based on client market or type.

The CODM assesses performance of the segment based on consolidated net income that is reported on the Company’s consolidated statements of comprehensive income. The CODM uses consolidated net income to evaluate the Company’s performance against budgets and decide whether to use the profits to invest in the business, paydown debt, repurchase stock, pay dividends, or fund acquisitions. Asset information provided to the CODM is not used for the purpose of making decisions and assessing performance of the Company.

The segment revenue, significant segment expenses, and segment profit are as follows:

(1) Other segment expense includes interest income and gains/losses on foreign currency and disposition of assets.

NOTE 15– SUBSEQUENT EVENT

On April 10, 2026, the Company completed the refinancing of its current Amended and Restated Credit Agreement, dated May 6, 2022 (the “Existing Credit Agreement”) by entering into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with PNC Bank, National Association as administrative agent, BOFA Securities, Inc., and Wells Fargo Securities, LLC as the joint lead arrangers, certain other financial institutions as lenders, and certain guarantors party thereto.

The Amended and Restated Credit Agreement: (a) maintains a $600 million revolving credit facility (together and inclusive of a $75 million swing line sublimit and $100 million sublimit for letters of credit); (b) increases the existing term loan facility from $300 million to $450 million; (c) maintains a delayed draw term loan facility of $400 million; (d) increases the existing incremental credit facility from an aggregate principal amount of not more than $300.0 million, to an aggregate principal amount not to exceed the greater of (i) $300.0 million and (ii)100% of Consolidated EBITDA, plus the amounts of voluntary prepayments of Term Loans and Delayed Draw Term Loans; (e) amendsthe definition of “Consolidated Indebtedness” to net Unrestricted Cash and replaces the existing maximum Consolidated Leverage Ratio covenant with a maximum Consolidated Net Leverage Ratio covenant, which is maintained at a maximum of 4.50 to 1.00 (with temporary increases to 5.00 to 1.00 for the three fiscal quarters following a “Material Permitted Acquisition”);(f) extends the maturity date of the Credit Facility until April 10, 2031; and (g) modifies certain definitions and covenants.