ICF International(US:ICFI)2025-10-30 21:04Revenue Performance - Revenue for Q3 2025 was $465.4 million, a decrease of 10.0% from $517.0 million in Q3 2024, primarily due to a reduction of $83.9 million from U.S. federal government clients[87][89]. - Revenue for the nine months ended September 30, 2025 decreased by $94.3 million, or 6.2%, to $1,429.2 million compared to $1,523.5 million in 2024[101]. Income and Earnings - Net income for Q3 2025 was $23.8 million, down 27.3% from $32.7 million in Q3 2024[87]. - Operating income for the nine months ended September 30, 2025 was $116.8 million, a decrease of $12.5 million, or 9.7%, from $129.4 million in 2024[101]. - Net income for the nine months ended September 30, 2025 was $74.3 million, down $11.3 million, or 13.2%, from $85.6 million in 2024[101]. - U.S. GAAP Diluted EPS for Q3 2025 was $1.28, down 26% from $1.73 in Q3 2024; Non-GAAP Diluted EPS was $1.67, down 22% from $2.13[120]. - For the nine months ended September 30, 2025, U.S. GAAP Diluted EPS was $4.01, a decrease of 11.5% from $4.53 in 2024; Non-GAAP Diluted EPS was $5.30, down 5% from $5.58[120]. Costs and Expenses - Direct costs decreased by $34.5 million, with total direct costs as a percentage of revenue at 62.4% for Q3 2025, compared to 62.9% in Q3 2024[92]. - Indirect and selling expenses decreased by $10.6 million, or 7.9%, with these expenses representing 26.3% of revenue in Q3 2025[93]. - Direct costs decreased by $73.4 million, or 7.6%, totaling $891.5 million for the nine months ended September 30, 2025, primarily due to terminated U.S. federal government contracts[105]. - Indirect and selling expenses decreased by $11.8 million, or 3.0%, totaling $377.2 million for the nine months ended September 30, 2025[106]. Taxation - The effective income tax rate increased to 18.1% for the nine months ended September 30, 2025, compared to 20.0% for the same period in 2024[110]. - The effective tax rate for Q3 2025 was 22.7%, compared to 13.8% in Q3 2024, reflecting a significant increase in tax burden[122]. Backlog and Market Conditions - The company experienced a reduction of $418.2 million in backlog due to termination notices primarily in the first and second quarters of fiscal year 2025[84]. - Health and Social Programs client market revenues decreased by $44.8 million, or 22.8%, driven by declines from U.S. federal government clients[91]. - The federal government shutdown in October 2025 is estimated to result in a revenue reduction of $7.6 million for that month[86]. Strategic Initiatives - The company aims to enhance client relationships and seek larger engagements while evaluating strategic acquisition opportunities to broaden service offerings[82]. - The company’s future results will depend on the successful integration of strategic acquisitions and the ability to replicate its business model in selective geographies[82]. - The company is well-positioned to provide disaster recovery services, leveraging experience from past major disasters[80]. Cash Flow and Financial Position - Net cash provided by operating activities for the nine months ended September 30, 2025 was $66.2 million, a decrease of $9.9 million from $76.2 million in 2024[127]. - Total dividend payments for the nine months ended September 30, 2025 were $7.8 million, with a consistent quarterly dividend of $0.14 per share[127]. - As of September 30, 2025, the company had $501.6 million available under its Credit Facility for operations, acquisitions, dividends, and share repurchases[123]. - The company entered into interest rate swap agreements with a total notional value of $175.0 million to hedge a portion of its floating-rate Credit Facility[124]. - The net change in cash, cash equivalents, and restricted cash for the nine months ended September 30, 2025 was an increase of $35.1 million, compared to a decrease of $1.8 million in 2024[127]. - The company experienced a $46.4 million change in cash used in financing activities, primarily due to increased net borrowings and share repurchases[128]. Amortization and EBITDA - Amortization of intangible assets acquired in business combinations increased by $3.0 million, or 12.0%, totaling $27.9 million for the nine months ended September 30, 2025[107]. - Amortization of intangible assets for Q3 2025 totaled $9.2 million, compared to $8.3 million in Q3 2024; for the nine months, it was $27.9 million versus $24.9 million[121]. - EBITDA for the nine months ended September 30, 2025 was $158.0 million, down from $170.3 million in 2024[115]. - Adjusted EBITDA for the nine months ended September 30, 2025 was $161.2 million, compared to $169.7 million in 2024[115].