ICF International Inc (ICFI) Reports 7% Revenue Growth in Q3 2023

Net Income and Diluted EPS Increase by 24% Amid Record Contract Awards

  • ICF International Inc (ICFI) reported a 7% increase in revenue, reaching $502 million in Q3 2023.
  • Net income and diluted EPS both rose by 24%, amounting to $24 million and $1.25 respectively.
  • Contract awards hit a record $875 million, indicating a book-to-bill ratio of 1.7.
  • ICFI raised its GAAP and Non-GAAP EPS guidance due to a lower tax rate.
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ICF International Inc (ICFI, Financial) released its Q3 2023 earnings report on November 2, 2023, revealing significant growth across major markets. The company's revenue increased by 7% to $502 million, while net income rose by 24% to $24 million. Diluted EPS also saw a 24% increase, reaching $1.25. Non-GAAP EPS was up by 12%, and EBITDA1 rose by 14% to $49.2 million.

Financial Performance and Business Highlights

ICFI's Q3 2023 total revenue increased by 7.2% to $501.5 million, up from $467.8 million in Q3 2022. Operating income increased by 13.0% to $31.9 million, and net income totaled $23.7 million. Diluted EPS for Q3 2023 was $1.25 per share, representing increases of 24.3% and 23.8% respectively.

John Wasson, chair and chief executive officer, commented on the results, stating,

This was another quarter of strong execution for ICF. Revenues increased 7.2% year-on-year. Adjusting for the sale of the Commercial Marketing Group that was completed in the third quarter and the commercial U.K. events business that we exited at the end of the second quarter, revenue growth is estimated at 8.4%1."

Government and Commercial Revenue Highlights

Revenue from government clients was $383.3 million, up 6.6% year-over-year. U.S. federal government revenue was $279.3 million, 2.8% above the $271.6 million reported in Q3 2022. Commercial revenue was $118.2 million, 9.2% above the $108.2 million reported in Q3 2022.

Outlook and Guidance

ICFI's strong year-to-date performance has set the stage for continued growth in 2024. The company is narrowing its guidance range for full-year 2023 revenue to $1,950 million to $1,980 million, and it anticipates subcontractor and other direct costs will be approximately 27% of total revenue. Adjusted EBITDA is expected to range from $212 million to $218 million.

ICFI is raising its guidance ranges for diluted EPS to $5.00 to $5.10, exclusive of special charges, and Non-GAAP EPS to $6.40 to $6.50 due to a lower than anticipated tax rate. Operating cash flow is projected at approximately $150 million in 2023.

Looking ahead to 2024, ICF's record sales, substantial backlog, and robust business development pipeline support expectations for high single-digit organic growth in recurring revenues.

Explore the complete 8-K earnings release (here) from ICF International Inc for further details.