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ICF Stock Declines 6.6% Since Q1 Earnings & Revenue Miss
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Key Takeaways
ICFI missed Q1 estimates as revenues fell 10.3% and adjusted EPS dropped 22.7% year over year.
ICF shares declined 6.6% after results despite growth in commercial and international revenues.
ICFI reaffirmed its 2026 guidance and ended the quarter with a $3.4 billion backlog.
ICF (ICFI - Free Report) reported unimpressive first-quarter 2026 results, with both earnings and revenues missing the Zacks Consensus Estimate.
The company’s first-quarter 2026 adjusted earnings of $1.50 per share missed the Zacks Consensus Estimate of $1.55 by 3.2% and declined 22.7% year over year. Revenues of $437.5 million decreased 10.3% from the prior-year quarter and missed the consensus mark of $449.8 million by 2.7%.
The stock has declined 6.6% since the release of results on May 7, reflecting poor quarterly performance and low confidence among shareholders.
ICF International, Inc. Price, Consensus and EPS Surprise
The quarterly performance reflected the timing shift of nearly $12 million in commercial energy and international government project work. Still, federal government revenues rose 8.6% sequentially, while contract awards totaled $450 million, resulting in a quarterly book-to-bill ratio of 1.03.
ICFI’s Commercial Business Shows Resilience
Commercial revenues increased 1.9% year over year to $146.3 million and accounted for 33.4% of total revenues compared with 29.6% in the year-ago quarter. Commercial energy revenues represented 87.7% of total commercial revenues.
Management noted that approximately $8 million in commercial energy project work shifted beyond the quarter under fixed-price contracts. Excluding this timing impact, commercial energy revenues would have posted stronger growth. Demand remained healthy for energy efficiency, electrification, flexible load management and grid optimization programs.
ICF Benefits From International Momentum
International government revenues increased 17.5% year over year to $31.8 million, aided by recent contract wins from the United Kingdom and European Union clients. The segment represented 7.3% of total revenues compared with 5.6% in the prior-year quarter.
State and local government revenues were flat year over year at $77 million. ICF continued to benefit from disaster recovery and mitigation-related engagements and supported more than 75 active disaster recovery programs across 22 states and territories during the quarter.
ICFI Federal Revenues Improve Sequentially
U.S. federal government revenues declined 23.7% year over year to $182.3 million due to contract cancellations that occurred between February and May 2025. However, revenues improved 8.6% sequentially from fourth-quarter 2025 levels.
Management stated that federal operations stabilized during the quarter, supported by technology modernization engagements. Procurement activity also improved, with some previously paused opportunities returning to the market. The company continues to expect sequential federal revenue growth in the second and third quarters of 2026 and year-over-year growth by the fourth quarter.
ICF Maintains Solid Margin Performance
Gross margin expanded 10 basis points year over year to 38.1%. Operating income totaled $34.9 million compared with $38.4 million in the prior-year quarter. Operating margin improved slightly to 8% from 7.9% a year ago.
Adjusted EBITDA decreased 11.4% year over year to $48.9 million. However, the adjusted EBITDA margin remained relatively stable at 11.2% compared with 11.3% in the first quarter of 2025. A favorable business mix and cost management initiatives helped support profitability.
The quarter’s effective tax rate was 25.1% compared with 10.5% in the prior-year period. The higher tax rate stemmed from lower-than-expected deductible equity-based compensation expense and negatively impacted GAAP EPS by 7 cents and adjusted EPS by 9 cents.
ICFI Reaffirms 2026 Outlook
ICFI reaffirmed its full-year 2026 guidance. Revenues are still expected to be in the range of $1.89-$1.96 billion, with the midpoint of $1.925 billion being higher than the Zacks Consensus Estimate of $1.92 billion. Adjusted earnings are projected between $6.95 and $7.25 per share, with the midpoint of $7.10 above the Zacks Consensus Estimate of $6.96.
Management expects the commercial, state and local, and international government businesses to grow at a double-digit rate collectively and contribute more than 60% of total 2026 revenues. The company also anticipates an expansion of the adjusted EBITDA margin by 10-20 basis points for the year.
Operating cash flow is projected between $135 million and $150 million, while capital expenditures are expected in the range of $24-$26 million. During the quarter, ICF repurchased 217,500 shares and ended with net debt of $436 million, down from $499 million in the prior-year period.
ICF Expands Pipeline & Contract Activity
ICF ended the quarter with a total backlog of $3.4 billion, of which nearly 51% was funded. The company’s business development pipeline was $8.5 billion.
New business represented roughly 65% of quarterly contract awards. Management highlighted continued investments in commercial energy, disaster recovery and federal technology modernization markets, which are expected to support long-term growth.
Equifax Inc. (EFX - Free Report) reported better-than-expected first-quarter 2026 results. EFX’s adjusted earnings per share of $1.86 beat the Zacks Consensus Estimate by 10.1% and increased 21.6% from the year-ago quarter. EFX’s revenues of $1.6 billion surpassed the consensus estimate by 2.3% and improved 14.4% year over year.
Waste Connections, Inc. (WCN - Free Report) posted impressive first-quarter 2026 results. WCN’s adjusted earnings of $1.23 per share outpaced the consensus mark by 3.4% and rose 8.9% from the year-ago quarter. WCN’s total revenues of $2.37 billion beat the consensus mark by 0.7% and increased 6.4% year over year.
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ICF Stock Declines 6.6% Since Q1 Earnings & Revenue Miss
Key Takeaways
ICF (ICFI - Free Report) reported unimpressive first-quarter 2026 results, with both earnings and revenues missing the Zacks Consensus Estimate.
The company’s first-quarter 2026 adjusted earnings of $1.50 per share missed the Zacks Consensus Estimate of $1.55 by 3.2% and declined 22.7% year over year. Revenues of $437.5 million decreased 10.3% from the prior-year quarter and missed the consensus mark of $449.8 million by 2.7%.
The stock has declined 6.6% since the release of results on May 7, reflecting poor quarterly performance and low confidence among shareholders.
ICF International, Inc. Price, Consensus and EPS Surprise
ICF International, Inc. price-consensus-eps-surprise-chart | ICF International, Inc. Quote
The quarterly performance reflected the timing shift of nearly $12 million in commercial energy and international government project work. Still, federal government revenues rose 8.6% sequentially, while contract awards totaled $450 million, resulting in a quarterly book-to-bill ratio of 1.03.
ICFI’s Commercial Business Shows Resilience
Commercial revenues increased 1.9% year over year to $146.3 million and accounted for 33.4% of total revenues compared with 29.6% in the year-ago quarter. Commercial energy revenues represented 87.7% of total commercial revenues.
Management noted that approximately $8 million in commercial energy project work shifted beyond the quarter under fixed-price contracts. Excluding this timing impact, commercial energy revenues would have posted stronger growth. Demand remained healthy for energy efficiency, electrification, flexible load management and grid optimization programs.
ICF Benefits From International Momentum
International government revenues increased 17.5% year over year to $31.8 million, aided by recent contract wins from the United Kingdom and European Union clients. The segment represented 7.3% of total revenues compared with 5.6% in the prior-year quarter.
State and local government revenues were flat year over year at $77 million. ICF continued to benefit from disaster recovery and mitigation-related engagements and supported more than 75 active disaster recovery programs across 22 states and territories during the quarter.
ICFI Federal Revenues Improve Sequentially
U.S. federal government revenues declined 23.7% year over year to $182.3 million due to contract cancellations that occurred between February and May 2025. However, revenues improved 8.6% sequentially from fourth-quarter 2025 levels.
Management stated that federal operations stabilized during the quarter, supported by technology modernization engagements. Procurement activity also improved, with some previously paused opportunities returning to the market. The company continues to expect sequential federal revenue growth in the second and third quarters of 2026 and year-over-year growth by the fourth quarter.
ICF Maintains Solid Margin Performance
Gross margin expanded 10 basis points year over year to 38.1%. Operating income totaled $34.9 million compared with $38.4 million in the prior-year quarter. Operating margin improved slightly to 8% from 7.9% a year ago.
Adjusted EBITDA decreased 11.4% year over year to $48.9 million. However, the adjusted EBITDA margin remained relatively stable at 11.2% compared with 11.3% in the first quarter of 2025. A favorable business mix and cost management initiatives helped support profitability.
The quarter’s effective tax rate was 25.1% compared with 10.5% in the prior-year period. The higher tax rate stemmed from lower-than-expected deductible equity-based compensation expense and negatively impacted GAAP EPS by 7 cents and adjusted EPS by 9 cents.
ICFI Reaffirms 2026 Outlook
ICFI reaffirmed its full-year 2026 guidance. Revenues are still expected to be in the range of $1.89-$1.96 billion, with the midpoint of $1.925 billion being higher than the Zacks Consensus Estimate of $1.92 billion. Adjusted earnings are projected between $6.95 and $7.25 per share, with the midpoint of $7.10 above the Zacks Consensus Estimate of $6.96.
Management expects the commercial, state and local, and international government businesses to grow at a double-digit rate collectively and contribute more than 60% of total 2026 revenues. The company also anticipates an expansion of the adjusted EBITDA margin by 10-20 basis points for the year.
Operating cash flow is projected between $135 million and $150 million, while capital expenditures are expected in the range of $24-$26 million. During the quarter, ICF repurchased 217,500 shares and ended with net debt of $436 million, down from $499 million in the prior-year period.
ICF Expands Pipeline & Contract Activity
ICF ended the quarter with a total backlog of $3.4 billion, of which nearly 51% was funded. The company’s business development pipeline was $8.5 billion.
New business represented roughly 65% of quarterly contract awards. Management highlighted continued investments in commercial energy, disaster recovery and federal technology modernization markets, which are expected to support long-term growth.
ICFI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots
Equifax Inc. (EFX - Free Report) reported better-than-expected first-quarter 2026 results. EFX’s adjusted earnings per share of $1.86 beat the Zacks Consensus Estimate by 10.1% and increased 21.6% from the year-ago quarter. EFX’s revenues of $1.6 billion surpassed the consensus estimate by 2.3% and improved 14.4% year over year.
Waste Connections, Inc. (WCN - Free Report) posted impressive first-quarter 2026 results. WCN’s adjusted earnings of $1.23 per share outpaced the consensus mark by 3.4% and rose 8.9% from the year-ago quarter. WCN’s total revenues of $2.37 billion beat the consensus mark by 0.7% and increased 6.4% year over year.