Financial Data and Key Metrics Changes - Total revenue for Q4 2025 was $443.7 million, a 10.6% decline year-over-year from $496.3 million in Q4 2024 [18] - Full-year revenue decreased to $1.87 billion from $2.02 billion in 2024, with a 25.7% decline in federal revenues offset by a 14.2% growth in non-federal business [23][24] - Adjusted EBITDA for 2025 totaled $207.2 million, with an adjusted EBITDA margin of 11.1%, stable compared to 11.2% in the previous year [25] Business Line Data and Key Metrics Changes - Revenue from commercial energy clients increased by 24% in 2025, accounting for nearly one-third of total revenue [20] - Revenues from state and local government clients increased by 2.2% for the year, with disaster recovery work making up approximately 45% of these revenues [10] - International government revenues grew by 7.6% for the year, driven by contracts with the European Commission and the UK government [11] Market Data and Key Metrics Changes - The commercial energy sector is projected to achieve double-digit growth in 2026, with a market share of 35% in residential and 20% in commercial and industrial energy efficiency [6][40] - The total addressable market for utility programs, including residential and commercial energy efficiency, is estimated to be between $3 billion and $5 billion [75] - The federal business is expected to decline at a high single-digit rate in 2026, with a return to growth anticipated by 2027 [16][57] Company Strategy and Development Direction - The company aims to increase non-federal revenues to over 60% of total revenues in 2026, driven by strong demand in commercial energy [12][33] - Continued investment in AI and technology capabilities is a priority to support long-term growth aspirations [25] - The company plans to pursue strategic acquisitions and maintain a disciplined approach to capital allocation, including share repurchases and dividends [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a return to revenue growth in 2026, anticipating a 10% year-on-year increase at the midpoint [3][33] - The procurement environment for federal contracts is improving, with no recent contract cancellations reported [56] - The company is well-positioned to benefit from increased federal IT modernization budgets and ongoing demand for efficiency improvements [15][62] Other Important Information - The company ended 2025 with a backlog of $3.4 billion and a business development pipeline of $8.6 billion, indicating strong growth expectations [4][26] - The company repurchased approximately 564,000 shares in 2025, reflecting confidence in its long-term outlook [29] Q&A Session Summary Question: Growth in commercial energy business - The commercial energy business grew about 24% in 2025, with expectations for at least 10% organic growth in 2026, driven by utility programs [39][40] Question: Comparison with competitors - ICF's commercial energy business is larger than competitors like Willdan, focusing more on residential and public sector clients [44][48] Question: Non-federal revenue projections - The exit rate in Q4 2025 is a good proxy for the projected non-federal share exceeding 60% in 2026 [53] Question: Federal procurement environment - The procurement environment is improving, with no recent disruptions, and IT modernization is expected to return to growth [56][57] Question: International growth drivers - Recent large contracts with the European Commission and UK government are driving international growth, with expectations for double-digit growth [72]

ICF International (NasdaqGS:ICFI) Q4 2025 Earnings call February 26, 2026 04:30 PM ET Speaker5Welcome to the fourth quarter and full year 2025 ICF earnings conference call. My name is Lauren Cannon. I will be your operator for today's call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advisi ...