ICF International Reports $487.6 Million Revenue in Q1 2025, Down 1.4% Year-Over-Year

ICF International, Inc. reported a revenue of $487.6 million for the first quarter of 2025, a decrease of 1.4% from $494.4 million in the same period of 2024. The decline in revenue was primarily attributed to a $34.6 million drop in contracts with U.S. federal government clients, influenced by recent contract terminations due to shifting governmental priorities. This decrease was partially offset by increases in revenue from commercial and international government clients, which rose by $26 million and $1.8 million, respectively. The company's net income for the quarter was $26.9 million, down from $27.3 million a year earlier, resulting in diluted earnings per share of $1.44, unchanged from the previous year.

In terms of operational metrics, ICF's direct costs decreased by 2.6% to $302.5 million, driven by a reduction in subcontractor and other direct costs. Indirect and selling expenses increased by 2.2% to $131.9 million, reflecting higher indirect labor costs, including severance. The company's effective tax rate significantly decreased to 10.5% from 20.4% in the prior year, largely due to a $4.5 million tax benefit related to new federal regulations on foreign exchange gains and losses.

Strategically, ICF completed the acquisition of Applied Energy Group, Inc. in December 2024 for $60.7 million, enhancing its service offerings in energy technology and advisory services. The company continues to focus on integrating this acquisition and expanding its client base. As of March 31, 2025, ICF had a total of $2.1 billion in assets, with cash and cash equivalents increasing to $5.7 million from $5.0 million at the end of 2024. The company also reported a total stockholders' equity of $968.9 million, down from $982.5 million at the end of the previous fiscal year.

Looking ahead, ICF anticipates continued demand for its services, particularly in disaster recovery and environmental solutions, as government and industry stakeholders address pressing societal issues. However, the company acknowledges potential challenges, including the impact of ongoing geopolitical tensions and the complexities of government procurement processes. ICF remains committed to enhancing client relationships and pursuing strategic acquisitions to bolster its market position. The company has $448.4 million available under its credit facility, providing liquidity for ongoing operations and future growth initiatives.