ICFI Filings — Icf International, Inc. - FilingSpy
ICFI
Icf International, Inc.
A provider of consulting, technology, and policy services to governments and businesses, ICF helps clients with everything from energy and disaster recovery to health, social, and security programs. Founded in 1969 as the Inner City Fund, it began as a venture capital fund backing minority-owned businesses in Washington, D.C. before shifting into consulting. It also helped launch the federal ENERGY STAR program.
Revenue stabilized after five quarters of decline, while net income rose 13.9% on lower interest and tax costs.
was essentially flat for the first time in five quarters. Revenue was $474.5 million, down just 0.3% , while rose 13.9% to $26.9 million as lower and a lower tax rate offset a shift toward lower-margin subcontractor work. The federal revenue decline slowed, but the business mix is changing in ways that pressure profitability.
Key takeaways
was nearly flat at $474.5 million, down 0.3% , as growth in the Energy, Environment, Infrastructure, and Disaster Recovery market and international work offset a $15.5 million decline in federal Health and Social Programs revenue.
contracted 0.1 points to 37.2% as the mix of direct costs shifted: subcontractor costs rose 8.1% while direct labor costs fell 5.2%, reflecting a change in project composition toward more .
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue was flat at $474.5M while net income rose 13.9% to $26.9M, driven by lower interest, amortization, and taxes.
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was nearly flat at $474.5M, as growth in Energy/Environment and international markets offset a $15.5M decline in federal Health and Social Programs work.
Direct costs were stable, but the mix shifted toward higher subcontractor costs (up 8.1%) and lower direct labor (down 5.2%), reflecting a change in project composition.
was essentially flat at $39.9 million, as a $1.6 million decline in of acquired intangibles and flat indirect expenses were offset by the less favorable mix.
rose 13.9% to $26.9 million, helped by a $1.7 million decline in net from a lower average debt balance and a lower of 17.8%, down from 21.0% a year ago.
for the first half of fiscal 2026 was $96.6 million, up from $18.9 million a year ago, driven by lower tax and interest payments and the timing of cash advances on energy programs.
fell 12.1% to $406.2 million, and the company had $586.4 million in unused borrowing capacity under its .
What changed
The pace of federal decline slowed sharply: the drop was $15.5 million this quarter, compared with $68.8 million in Q2 2025 and $56.7 million in Q1 2026, suggesting the federal flagged in prior quarters may be stabilizing.
The business-mix shift that had been widening gross margins for several quarters reversed: subcontractor costs rose as a share of direct costs while direct labor fell, a change management attributed to project composition rather than a return to subcontractor-heavy work.
The fell to 17.8% from 21.0% a year ago, continuing the quarter-to-quarter volatility that had been flagged as a watch item — it remains below the mid-20% range that had been expected.
declined to $406.2 million from $462.3 million a year ago, reversing the increase seen in Q3 2025 and bringing back toward the level at the end of fiscal 2024.
What to watch
Whether the shift toward higher subcontractor costs and lower direct labor persists, and whether it signals a structural change in project mix that would keep below the 38% level reached in Q1 2026.
Whether the stabilization in federal holds, or whether additional contract terminations or stop-work orders beyond those already disclosed cause the decline to widen again.
The trajectory of the — whether it remains near 17.8% or rises toward the mid-20% range, which would remove a that has been cushioning .
How the company deploys its $586.4 million in unused borrowing capacity, particularly whether it pursues acquisitions that could reshape the mix or add to the $1.2 billion in and intangibles.
was essentially flat at $39.9M, as a $1.6M drop in intangible and flat indirect expenses were offset by the mix shift.
rose 13.9% to $26.9M, helped by a $1.7M decline in net from lower average debt and a lower of 17.8%.
surged to $96.6M for the first half of FY2026 from $18.9M a year ago, primarily due to lower tax and interest payments and the timing of cash advances on energy programs.
Liquidity remained strong with $586.4M in unused capacity, and the company declared a regular $0.14 per share quarterly .
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in the disclosures discussed in the section entitled “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our Annual Report.
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There have been no material changes in the disclosures discussed in the section entitled “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our Annual Report.
We are involved in various legal matters and proceedings arising in the ordinary course of business. While these matters and proceedings cause us to incur costs, including, but not limited to, attorneys’ fees, we currently believe that any ultimate liability arising out of these…
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We are involved in various legal matters and proceedings arising in the ordinary course of business. While these matters and proceedings cause us to incur costs, including, but not limited to, attorneys’ fees, we currently believe that any ultimate liability arising out of these matters and proceedings will not have a material adverse effect on our financial position, results of operations, or cash flows.
There have been no material changes in the risk factors discussed in the section entitled “Risk Factors” disclosed in Part I, Item 1A of our Annual Report.
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There have been no material changes in the risk factors discussed in the section entitled “Risk Factors” disclosed in Part I, Item 1A of our Annual Report.