ICF International, Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
ICFI$79.68-16.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001193125-26-212358
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001193125-26-338422
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 62 previous paragraphs and 76 current paragraphs.
39 unchanged; 18 reworded; 15 added; 5 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Energy, Environment, Infrastructure, and Disaster Recovery client market revenues increased $2.6 million, or 1.0%, due to increases of $6.1 million and $1.4 million from our commercial and international government clients, respectively, offset by decreases of $4.2 million and $0.8 million from our U.S. state and local government and U.S. federal government clients, respectively.
Current report
Health and Social Programs client market revenues were comparable to the prior year, with increases of $9.2 million, $4.6 million, and $1.8 million from our international government, commercial, and U.S. state and local government clients, respectively, offset by a decrease of $15.5 million from our U.S. federal government clients.
Current report
Provision for Income Taxes. Our effective income tax rate for the three months ended June 30, 2026 and 2025 was 17.8% and 21.0%, respectively. The difference was primarily due to implementation of state tax planning strategies partially offset by valuation allowances on equity-based compensation assets and excess foreign tax credits.
Current report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Current report
Health and Social Programs client market revenues decreased $26.7 million, or 8.2%, driven by a decrease of $47.3 million from our U.S. federal government clients, offset by increases of $12.4 million, $6.9 million, and $1.3 million from our international government, commercial, and U.S. state and local government clients, respectively.
Current report
Security and Other Civilian & Commercial client market revenues decreased $21.0 million, or 14.1%, driven by decreases of $16.8 million, $4.4 million, and $0.7 million from our U.S. federal government, commercial, and international government clients, respectively, offset by an increase of $0.9 million from our U.S. state and local government clients.
Current report
Revenue for the six months ended June 30, 2026 includes subcontractor and other direct costs, which increased $1.1 million, or 0.5%, and totaled $224.0 million and $222.9 million for the six months ended June 30, 2026 and 2025, respectively, and the margin on such costs.
Current report
Direct Costs. The decrease of $32.5 million in direct costs was primarily a result of terminated U.S. federal government contracts during the first six months of 2025. For the six months ended June 30, 2026 and 2025, direct labor and related fringe benefit costs as a percentage of direct costs were 60.6% and 62.9%, respectively, and subcontractor and other direct costs as a percentage of direct costs were 39.4% and 37.1%, respectively. As a percentage of revenue, direct labor and related fringe benefit costs were 37.8% and 39.2%, respectively, and subcontractor and other direct costs were 24.6% and 23.1%, respectively, for the six months ended June 30, 2026 and 2025. Total direct costs as a percentage of revenue were 62.3% for the six months ended June 30, 2026, compared to 62.4% for the six months ended June 30, 2025.
Current report
Indirect and selling expenses. For the six months ended June 30, 2026, our indirect and selling expenses decreased by $12.8 million, or 5.0%, compared to the prior year, as a result of a decrease of $9.7 million and $3.1 million in indirect labor and related fringe benefit costs and general and administrative costs, respectively. The decreases were primarily from our efforts to align indirect and selling expenses to support our ongoing operations. As a percentage of revenue, indirect and selling expenses were 26.6% and 26.4% for the six months ended June 30, 2026 and 2025, respectively.
Current report
Depreciation and amortization. Depreciation and amortization for the six months ended June 30, 2026 was $11.4 million which is comparable to depreciation and amortization of $10.8 million for the six months ended June 30, 2025.
Current report
Provision for Income Taxes. Our effective income tax rate for the six months ended June 30, 2026 and 2025 was 21.1% and 15.7%, respectively. The difference was primarily due to additional tax provision attributable to equity-based compensation and valuation allowances on equity-based compensation assets and excess foreign tax credits in 2026 compared with tax impact of implementation of the IRC Section 987 regulations and greater research tax credits in the first quarter of 2025.
Current report
Material Cash Requirements from Contractual Obligations. Contractual obligations requiring material cash outflows primarily consist of payments related to operating and finance leases for facilities and equipment, as well as scheduled principal and interest payments under our Credit Facility. See “Note 4 – Leases” and “Note 5 – Long-Term Debt,” respectively, in the “Notes to Consolidated Financial Statements” in this Quarterly Report for additional details.
Current report
Net cash provided by our operations during the six months ended June 30, 2026 increased by $77.7 million compared to the same period in 2025 primarily due to lower taxes and interest payments and timing of cash advances related to certain energy incentive programs.
Current report
Cash used in investing activities for the six months ended June 30, 2026 decreased by $0.3 million compared to the same period in 2025 due to reduced purchases of equipment.
Current report
Cash used in financing activities for the six months ended June 30, 2026 was higher than the same period in 2025 by $31.5 million primarily due to lower net borrowings and payment of costs related to the refinancing of our Credit Facility, partially offset by reduced share repurchases.
Removed paragraphs (5)
Previous report
Health and Social Programs client market revenues decreased $26.8 million, or 15.9%, due to decreases of $31.8 million and $0.4 million from our U.S. federal government and U.S. state and local government clients, respectively, offset by increases of $3.2 million and $2.2 million from our international government and commercial clients, respectively.
Previous report
Provision for Income Taxes. Our effective income tax rate for the three months ended March 31, 2026 and 2025 was 25.1% and 10.5%, respectively. A reconciliation of the Company’s statutory rate to the effective tax rate (the “ETR”) for the three months ended March 31, 2026 and 2025 is as follows:
Previous report
Net cash used in operations decreased by $29.9 million, primarily due to higher cash collections from customers and timing of payment of vendors.
Previous report
Cash used in investing activities decreased by $0.6 million as a result of lower capital expenditures in the first quarter of 2026 compared to 2025.
Previous report
Cash provided by financing activities decreased by $25.9 primarily due to lower net borrowings from our Credit Facility and short-term borrowings, partially offset by reduced share repurchases.
Reworded paragraphs (18)
Previous wording
We believe that, in the long-term, demand for our services will continue to grow as government, industry, and other stakeholders seek to address critical long-term societal and natural resource issues due to heightened concerns about the environment and use of clean energy and energy efficiency; health promotion, treatment, and cost control; the means by which healthcare can be delivered effectively on a cross-jurisdiction basis; natural disaster relief and rebuild efforts; and ongoing homeland security threats. In the wake of the major hurricanes that devastated communities in Texas, Florida, North Carolina, Louisiana, the U.S. Virgin Islands, and Puerto Rico, and the impact of wildfires in Hawaii, Oregon, and southern California, the affected areas remain in various stages of evacuation, relief, and recovery efforts. We believe our prior and current experience with disaster relief and rebuild efforts, including after hurricanes (Katrina, Rita, and more recently Helene and Milton) and Superstorm Sandy, and the wildfires in Oregon, put us in a favorable position to continue to provide recovery and housing assistance, and environmental and infrastructure solutions, including disaster mitigation, on behalf of federal departments and agencies, state, territorial, and local jurisdictions, and regional agencies.
Current wording
We believe that, in the long-term, demand for our services will continue to grow as government, industry, and other stakeholders seek to address critical long-term societal and natural resource issues due to heightened concerns about the environment and use of clean energy and energy efficiency, particularly as a result of increasing energy demand from data centers, cryptocurrency operations, and electrification of buildings and vehicles; health promotion, treatment, and cost control; the means by which healthcare can be delivered effectively on a cross-jurisdiction basis; natural disaster relief and rebuild efforts; and ongoing homeland security threats. In the wake of the major hurricanes that devastated communities in Texas, Florida, North Carolina, Louisiana, the U.S. Virgin Islands, and Puerto Rico, and the impact of wildfires in Hawaii, Oregon, and southern California, the affected areas remain in various stages of recovery efforts. We believe our prior and current experience with disaster relief and rebuild efforts, including after hurricanes (Katrina, Rita, Helene, and Milton) and Superstorm Sandy, and the wildfires in Oregon, put us in a favorable position to continue to provide recovery and housing assistance, and environmental and infrastructure solutions, including disaster mitigation, on behalf of federal departments and agencies, state, territorial, and local jurisdictions, and regional agencies.
Previous wording
Security and Other Civilian & Commercial client market revenues decreased by $16.9 million, or 21.2%, due to decreases of $13.6 million, $3.1 million, and $0.3 million from our U.S. federal government, commercial, and international government clients, respectively, offset by an increase of $0.1 million from our U.S. state and local government clients.
Current wording
Security and Other Civilian & Commercial client market revenues decreased by $4.4 million, or 6.3%, due to decreases of $3.2 million, $1.5 million, and $0.3 million from our U.S. federal government, commercial, and international government clients, respectively, offset by an increase of $0.7 million from our U.S. state and local government clients.
Previous wording
Revenue for the three months ended March 31, 2026 includes subcontractor and other direct costs, which decreased $8.0 million, or 7.2%, from the first quarter of 2025 and totaled $102.7 million and $110.6 million for the three months ended March 31, 2026 and 2025, respectively, and the margin on such costs.
Current wording
Revenue for the three months ended June 30, 2026 includes subcontractor and other direct costs, which increased $9.1 million, or 8.1%, compared to 2025 and totaled $121.4 million and $112.3 million for the three months ended June 30, 2026 and 2025, respectively, and the margin on such costs.
Previous wording
Direct Costs. For the three months ended March 31, 2026 and 2025, direct labor and related fringe benefit costs as a percentage of direct costs were 62.1% and 63.4%, respectively, and subcontractor and other direct costs as a percentage of direct costs were 37.9% and 36.6%, respectively. As a percentage of revenue, direct labor and related fringe benefit costs were 38.4% and 39.4%, respectively, and subcontractor and other direct costs were 23.5% and 22.7%, respectively, for the three months ended March 31, 2026 and 2025.
Current wording
Direct Costs. For the three months ended June 30, 2026 and 2025, direct costs totaled $297.9 million which was comparable to the same period in 2025. As a percentage of direct costs, direct labor and related fringe benefit costs were 59.3% and 62.4%, respectively, and subcontractor and other direct costs as a percentage of direct costs were 40.7% and 37.6%, respectively. As a percentage of revenue, direct labor and related fringe benefit costs were 37.2% and 39.1%, respectively, and subcontractor and other direct costs were 25.6% and 23.6%, respectively, for the three months ended June 30, 2026 and 2025.
Previous wording
Indirect and selling expenses. The change in total indirect and selling expenses were due to decreases of $10.5 million and $2.6 million, respectively, in indirect labor and related fringe benefit costs and general and administrative costs for the three months ended March 31, 2026 compared to the same period in 2025. Indirect labor and related fringe benefit costs as a percentage of indirect and selling expenses were 73.6% and 74.3% for the three months ended March 31, 2026 and 2025, respectively, and general and administrative costs as a percentage of indirect and selling expenses were 26.4% and 25.7% for the three months ended March 31, 2026 and 2025, respectively.
Current wording
Indirect and selling expenses. Indirect and selling expenses for the three months ended June 30, 2026 totaled $123.3 million which was comparable to the same period in 2025. As a percentage of indirect and selling expenses, indirect labor and related fringe benefit costs were consistent at 75.2% and 74.7% for the three months ended June 30, 2026 and 2025, respectively, and general and administrative costs as a percentage of indirect and selling expenses were also consistent at 24.8% and 25.3% for the three months ended June 30, 2026 and 2025, respectively.
Previous wording
Depreciation and amortization. Depreciation and amortization for the three months ended March 31, 2026 was $5.6 million which was comparable to $5.3 million for the three months ended March 31, 2025.
Current wording
Depreciation and amortization. Depreciation and amortization for the three months ended June 30, 2026 was $5.8 million which was comparable to $5.5 million for the three months ended June 30, 2025.
Previous wording
The decrease of $1.9 million in amortization of intangible assets acquired in business combinations from $9.5 million for the three months ended March 31, 2025 to $7.6 million for the three months ended March 31, 2026 was primarily due to certain intangible assets previously acquired becoming fully amortized.
Current wording
The decrease of $1.6 million in amortization of intangible assets acquired in business combinations from $9.2 million for the three months ended June 30, 2025 to $7.6 million for the three months ended June 30, 2026 was primarily due to certain intangible assets previously acquired becoming fully amortized.
Previous wording
Interest, net. The decrease of $0.6 million in interest, net, was primarily due to lower average debt balance of $453.5 million for the three months ended March 31, 2026 compared to $514.3 million for the same period in 2025. Interest from debt facilities was $5.7 million for the three months ended March 31, 2026, compared to $7.3 million for the three months ended March 31, 2025. Use of floating-to-fixed interest rate swap agreements to hedge the variable interest portion of debt facilities resulted in an increase of interest by less than $0.1 million for the three months ended March 31, 2026 compared to a reduction of $0.7 million for the same period in 2025. The average interest rate for our debt facilities was 5.0% for the three months ended March 31, 2026 compared to 5.7% for the same period in 2025. Inclusive of the impact of the swap agreements, our interest rate was 5.1% for the three months ended March 31, 2026 compared to 5.1% for the same period in 2025.
Current wording
Interest, net. The decrease of $1.7 million in interest, net, was primarily due to lower average debt balance of $459.8 million for the three months ended June 30, 2026 compared to $542.2 million for the same period in 2025. Interest from debt facilities was $5.7 million for the three months ended June 30, 2026, compared to $7.8 million for the three months ended June 30, 2025. Use of floating-to-fixed interest rate swap agreements to hedge the variable interest portion of debt facilities resulted in an increase of interest by less than $0.1 million for the three months ended June 30, 2026 compared to a reduction of $0.2 million for the same period in 2025. The average interest rate for our debt facilities was 4.9% for the three months ended June 30, 2026 compared to 5.7% for the same period in 2025. Inclusive of the impact of the swap agreements, our interest rate was 5.0% for the three months ended June 30, 2026 compared to 5.6% for the same period in 2025.
Previous wording
Revenue. The decrease in revenue was driven by a reduction of $56.7 million from our U.S. federal government clients primarily as a result of terminated contracts during the first half of 2025 due to the Administration’s changing priorities and the actions recommended by the Department of Government Efficiency. Revenue from our commercial, U.S. state and local government, and international government clients increased a combined $6.6 million to offset the decrease of revenue from our U.S. federal government clients. The following were changes in revenue from our various client markets:
Current wording
Revenue. The decrease in revenue of $51.8 million was driven by a reduction of $76.2 million and $1.7 million from our U.S. federal government clients, primarily as a result of terminated contracts in the first six months of 2025 due to the Administration’s changing priorities and the actions recommended by the Department of Government Efficiency as well as the disruption of the typical U.S. federal government procurement cycle, and U.S. state and local government clients, respectively. This decline was offset by increases of $15.0 million and $11.1 million from our international government and commercial clients, respectively. The following were changes in revenue from our various client markets:
Previous wording
Energy, Environment, Infrastructure, and Disaster Recovery client market revenues decreased $6.4 million, or 2.7%, due to a decrease of $11.3 million from our U.S. federal government clients, offset by increases of $2.8 million, $1.9 million, and $0.2 million from our commercial, international government, and U.S. state and local government clients, respectively.
Current wording
Energy, Environment, Infrastructure, and Disaster Recovery client market revenues decreased $4.0 million, or 0.8%, driven by decreases of $12.1 million and $3.9 million from our U.S. federal government and U.S. state and local government clients, respectively, offset by increases of $8.7 million and $3.3 million from our commercial and international government clients, respectively.
Previous wording
Other expense. The decrease in other expense for the three months ended March 31, 2026 was primarily due to foreign currency expense in 2026 of $0.3 million compared to $1.0 million in 2025, partially offset by losses from disposal of assets of $0.5 million in 2026 associated with early exits from certain leased facilities.
Current wording
Other expense. The change in other expense for the six months ended June 30, 2026 as compared to 2025 was primarily due to lower foreign currency expense in 2026 of $0.5 million compared to $2.5 million in 2025, offset by higher losses from disposal of assets of $0.6 million in 2026 compared to $0.1 million in 2025.
Previous wording
Non-GAAP diluted earnings per share (“Non-GAAP Diluted EPS”) represents diluted U.S. GAAP earnings per share (“U.S. GAAP Diluted EPS”) excluding the impact of certain items noted above, amortization of acquired intangible assets, and the related income tax effects. While these adjustments may be recurring and not infrequent or unusual, we do not consider these adjustments to be indicative of the performance of our ongoing operations. We believe that the supplemental adjustments provide additional useful information to investors.
Current wording
Non-GAAP diluted earnings per share (“Non-GAAP Diluted EPS”) represents diluted U.S. GAAP earnings per share (“U.S. GAAP Diluted EPS”) excluding the impact of the specific items noted above, amortization of acquired intangible assets, and the related income tax effects. While these adjustments may be recurring and not infrequent or unusual, we do not consider these adjustments to be indicative of the performance of our ongoing operations. We believe that the supplemental adjustments provide additional useful information to investors.
Previous wording
The amortization of intangible assets acquired from business combinations totaled $7.6 million and $9.5 million for the three months ended March 31, 2026 and 2025, respectively.
Current wording
The amortization of intangible assets acquired from business combinations totaled $7.6 million and $9.2 million for the three months ended June 30, 2026 and 2025, respectively, and $15.2 million and $18.7 million for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
Income tax effects were calculated using the effective tax rate, adjusted for certain discrete items, if any, of 25.1% and 10.5% for the three months ended March 31, 2026 and 2025, respectively.
Current wording
Income tax effects were calculated using the effective tax rate, adjusted for certain discrete items, if any, of 17.8% and 21.0% for the three months ended June 30, 2026 and 2025, respectively, and 21.1% and 23.1% for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
Liquidity and Borrowing Capacity. In addition to cash and cash equivalents on hand and cash generated from operations, our primary source of liquidity is the Credit Facility with a syndicate of commercial banks, as described in “Note 5– Long-Term Debt” in the “Notes to Consolidated Financial Statements” in this Quarterly Report. The Credit Facility requires that we remain in compliance with certain financial and non-financial covenants (as defined by the Credit Agreement, see “Note 8 - Debt” in the “Notes to Consolidated Financial Statements” in our Annual Report for additional details). As of March 31, 2026, we remained in compliance with these covenants, and we had $512.4 million available under the Credit Facility to fund our ongoing operations, future acquisitions, dividend payments, and share repurchase program. On April 10, 2026, we completed the refinancing of the Credit Facility, see “Note 15 - Subsequent Events” in the “Notes to Consolidated Financial Statements” in this Quarterly Report.
Current wording
Liquidity and Borrowing Capacity. In addition to cash and cash equivalents on hand and cash generated from operations, our primary source of liquidity is the Credit Facility with a syndicate of commercial banks, as described in “Note 5– Long-Term Debt” in the “Notes to Consolidated Financial Statements” in this Quarterly Report. The Credit Facility requires that we remain in compliance with certain financial and non-financial covenants (as defined by the Credit Agreement, see “Note 5 – Long-Term Debt” in the “Notes to Consolidated Financial Statements” in this Quarterly Report for additional details). As of June 30, 2026, we remained in compliance with these covenants, and we had $586.4 million of unused borrowing capacity under the $600.0 million revolving line of credit and $400.0 million of unused delayed draw term loan facilities under the Credit Facility available to fund our ongoing operations, future acquisitions, dividend payments, and share repurchase program.
Previous wording
We have entered into floating-to-fixed interest rate swap agreements for a total notional value of $175.0 million to hedge a portion of our floating-rate Credit Facility. The interest rate swaps will expire in 2030, but we may consider entering into additional swap agreements prior to the expiration of these existing hedges. As of March 31, 2026, the percentage of our fixed-rate debt to total debt from our Credit Facility was 40%.
Current wording
We have entered into floating-to-fixed interest rate swap agreements for a total notional value of $175.0 million to hedge a portion of our floating-rate debt under the Credit Facility. The interest rate swaps will expire in 2030, but we may consider entering into additional swap agreements prior to the expiration of these existing hedges. As of June 30, 2026, the percentage of our fixed-rate debt to total debt from the Credit Facility was 43%.
Previous wording
Dividends. We have historically paid quarterly cash dividends to our stockholders of record at $0.14 per share. Total dividend payments during the three months ended March 31, 2026 were $2.6 million.
Current wording
Dividends. We have historically paid quarterly cash dividends to our stockholders of record at $0.14 per share. Total dividend payments during the six months ended June 30, 2026 were $5.1 million.
Previous wording
Cash Flow. The following table sets forth our sources and uses of cash for the three months ended March 31, 2026 and 2025:
Current wording
Cash Flow. The following table sets forth our sources and uses of cash for the six months ended June 30, 2026 and 2025:
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Revenue. Revenue for the three months ended June 30, 2026 was $474.5 million, which was comparable to the same period in 2025. The following were changes in revenue from our various client markets:
Current report — wording carried from elsewhere
Other expense. The change in other expense for the three months ended June 30, 2026 as compared to 2025 was primarily due to foreign currency expense in 2026 of $0.3 million compared to $1.6 million in 2025.
Current report — wording carried from elsewhere
The decrease in amortization of intangible assets acquired in business combinations was primarily due to certain intangible assets previously acquired becoming fully amortized.
Current report — wording carried from elsewhere
Interest, net. The decrease of $2.3 million in interest, net, was primarily due to lower average debt balance of $456.7 million for the six months ended June 30, 2026 compared to $528.3 million for the same period in 2025. Interest from debt facilities was $11.4 million for the six months ended June 30, 2026, compared to $15.1 million for the six months ended June 30, 2025. Use of floating-to-fixed interest rate swap agreements to hedge the variable interest portion of debt facilities resulted in an increase of interest by less than $0.1 million for the six months ended June 30, 2026 compared to a reduction of $0.9 million for the same period in 2025. The average interest rate for our debt facilities was 5.0% for the six months ended June 30, 2026 compared to 5.7% for the same period in 2025. Inclusive of the impact of the swap agreements, our interest rate was 5.0% for the six months ended June 30, 2026 compared to 5.4% for the same period in 2025.