PART I. FINANCIAL INFORMATION Item 1. Financial Statements Presents ICF International, Inc.'s unaudited consolidated financial statements for periods ended June 30, 2025, covering balance sheets, income, equity, and cash flows Consolidated Balance Sheets Details the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (Unaudited) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $6,981 | $4,960 | | Goodwill | $1,253,025 | $1,248,855 | | Total Assets | $2,073,991 | $2,066,353 | | Liabilities & Equity | | | | Long-term debt | $462,319 | $411,743 | | Total Liabilities | $1,073,599 | $1,083,894 | | Total Stockholders' Equity | $1,000,392 | $982,459 | - Total assets increased slightly to $2.07 billion, primarily driven by an increase in contract assets and goodwill, while total liabilities decreased slightly. Long-term debt increased by approximately $50.6 million since year-end 202412 Consolidated Statements of Comprehensive Income Outlines the company's financial performance, including revenue, operating income, net income, and diluted EPS for Q2 and YTD 2025 and 2024 Key Income Statement Data (Unaudited) | (in thousands, except per share) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $476,155 | $512,029 | $963,773 | $1,006,465 | | Operating Income | $40,011 | $42,407 | $78,401 | $83,351 | | Net Income | $23,661 | $25,611 | $50,512 | $52,928 | | Diluted EPS | $1.28 | $1.36 | $2.72 | $2.80 | - Revenue and net income declined in both the second quarter and first half of 2025 compared to the same periods in 2024. Diluted EPS also decreased year-over-year for both periods15 Consolidated Statements of Cash Flows Summarizes cash flows from operating, investing, and financing activities for the first six months of 2025 and 2024 Cash Flow Summary (Unaudited) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $18,923 | $50,635 | | Net Cash Used in Investing Activities | ($8,799) | ($8,677) | | Net Cash Used in Financing Activities | ($3,544) | ($46,508) | - Net cash from operating activities significantly decreased to $18.9 million in the first six months of 2025 from $50.6 million in the prior-year period. Net cash used in financing activities decreased substantially, primarily due to changes in borrowings and repayments on working capital facilities20 Notes to Consolidated Financial Statements Provides detailed explanations and additional information supporting the consolidated financial statements, including accounting policies and significant transactions - The Company recognized $11.6 million in net income during the first six months of 2025 due to changes in estimates for fixed-price contracts accounted for under the percentage-of-completion method25 - On December 31, 2024, the Company acquired Applied Energy Group, Inc. (AEG) for $59.9 million in cash. The purchase consideration included $30.6 million allocated to goodwill and $25.4 million to intangible assets like customer relationships and developed technology5960 - Unfulfilled performance obligations (UPO) decreased from $1.3 billion at year-end 2024 to $0.8 billion as of June 30, 2025, reflecting a $0.3 billion impact from termination-for-convenience notifications related to executive orders45 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance for Q2 and YTD June 30, 2025, highlighting revenue decline from terminated government contracts and future strategies Overview and Outlook Management's perspective on current performance, strategic direction, and future expectations, including impacts from government contract terminations - The company received termination-for-convenience notices during the first six months of 2025 pursuant to executive orders by the Trump Administration, resulting in a $418.2 million reduction in backlog. These terminated contracts represented approximately 6.4% of total fiscal year 2024 revenue81 - Management believes long-term demand for its services will grow, particularly in areas like clean energy, health promotion, disaster relief, and homeland security77 - Future strategy focuses on enhancing client relationships, seeking larger engagements, and pursuing strategic acquisitions to build scale and expertise79 Results of Operations Analyzes financial performance for Q2 and YTD periods, detailing revenue, operating income, and net income changes Q2 2025 vs Q2 2024 Performance | (in thousands) | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $476,155 | $512,029 | ($35,874) | (7.0%) | | Operating Income | $40,011 | $42,407 | ($2,396) | (5.7%) | | Net Income | $23,661 | $25,611 | ($1,950) | (7.6%) | - The Q2 revenue decrease was primarily driven by a $68.8 million reduction from U.S. federal government clients due to terminated contracts, partially offset by a $31.5 million increase from commercial clients85 YTD 2025 vs YTD 2024 Performance | (in thousands) | YTD 2025 | YTD 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $963,773 | $1,006,465 | ($42,692) | (4.2%) | | Operating Income | $78,401 | $83,351 | ($4,950) | (5.9%) | | Net Income | $50,512 | $52,928 | ($2,416) | (4.6%) | - The YTD revenue decrease was driven by a $103.4 million reduction from U.S. federal government clients, partially offset by a $57.5 million increase from commercial clients96 Non-GAAP Measures Provides reconciliations of non-GAAP financial measures, such as Adjusted EBITDA and Non-GAAP Diluted EPS, to their GAAP equivalents Reconciliation of Net Income to Adjusted EBITDA | (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $23,661 | $25,611 | $50,512 | $52,928 | | EBITDA | $53,074 | $55,643 | $105,207 | $112,082 | | Adjusted EBITDA | $52,875 | $56,013 | $108,073 | $111,168 | Reconciliation of U.S. GAAP Diluted EPS to Non-GAAP Diluted EPS | | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | U.S. GAAP Diluted EPS | $1.28 | $1.36 | $2.72 | $2.80 | | Non-GAAP Diluted EPS | $1.66 | $1.69 | $3.61 | $3.46 | Liquidity and Capital Resources Assesses the company's ability to meet financial obligations and fund operations, detailing cash flows, debt compliance, and available credit - As of June 30, 2025, the company was in compliance with its debt covenants and had $488.3 million available under its Credit Facility117 - The company paid quarterly cash dividends of $0.14 per share, totaling $5.2 million in payments during the first six months of 2025121 - Net cash provided by operating activities decreased to $18.9 million for the first six months of 2025, compared to $50.6 million for the same period in 2024122 Quantitative and Qualitative Disclosures About Market Risk States no material changes in market risk disclosures since the last Annual Report on Form 10-K - There have been no material changes in the disclosures regarding market risk from those presented in the company's Annual Report124 Controls and Procedures Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no significant internal control changes - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective125 - No significant changes were made to internal controls over financial reporting during the quarter125 PART II. OTHER INFORMATION Legal Proceedings The company is involved in various legal matters but does not expect a material adverse effect on its financial position - The company does not expect current legal proceedings to have a material adverse effect on its financial results128 Risk Factors Indicates no material changes to risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes in the risk factors from those disclosed in the company's Annual Report129 Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities Details share repurchase activity for Q2 2025, including program repurchases and shares for employee tax obligations - During Q2 2025, the company repurchased 31,339 shares for an aggregate price of $2.5 million under its share repurchase program131 - As of June 30, 2025, $111.7 million of repurchase authority remained available under the program131 Share Repurchase Activity (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - April 30 | 15,180 | $79.28 | | May 1 - May 31 | 16,193 | $79.69 | | June 1 - June 30 | — | $— | | Total | 31,373 | $79.49 | Other Information Discloses COO James Morgan modified a Rule 10b5-1(c) trading plan to sell up to 10,000 shares of common stock - On May 27, 2025, Chief Operating Officer James Morgan modified a Rule 10b5-1(c) trading plan to sell up to 10,000 shares of common stock. Trading under the modified plan can begin no earlier than September 24, 2025137 Exhibits Lists exhibits filed with the Form 10-Q, including officer certifications and financial data formatted in iXBRL - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by the Sarbanes-Oxley Act138
ICF International(ICFI) - 2025 Q2 - Quarterly Report