ICF International Inc

ICF International has secured multiple new contracts and expanded its share repurchase authorization, supporting its growth outlook. The company won a $35 million contract from Entergy Louisiana for energy-efficiency programs, a $25 million five-year cybersecurity and R&D agreement with the U.S. Army Research Laboratory, and a $14 million three-year contract from the California Department of Transportation. ICF also increased its share repurchase authorization by $100 million to $165 million, having already repurchased about 435,000 shares for $29 million year to date. Revenues are expected to rise 1.3% in 2026 and 6.1% in 2027, with earnings anticipated to grow 4.3% and 10.3% respectively. The stock has gained 29.1% over three months, outperforming the industry's 17.9% growth.

ICF International expects to return to growth after a roughly 25% decline in its federal business in 2025, with guidance for 3% revenue growth and 5% non-GAAP EPS growth this year. Chairman and CEO John Wasson said non-federal operations, including commercial energy, international work, and disaster recovery, are leading the recovery, while federal IT modernization is beginning to offset recent weakness. The company anticipates mid- to high-single-digit organic growth from 2027 onward, with federal business growing at a low- to mid-single-digit rate. President Anne Choate said AI is changing client engagement, as ICF uses its Fathom AI sandbox to develop prototypes for government clients, and the company is expanding in energy efficiency, electrification, battery storage, and data-center consulting. ICF also plans to balance acquisitions with share repurchases, having recently added $100 million to its buyback authorization.

ICF International reported second-quarter 2026 revenue of $474.5 million, essentially flat compared to $476.2 million a year earlier, while non-GAAP EPS rose 12% to $1.86. The company reaffirmed its full-year 2026 revenue guidance of $1.89 billion to $1.96 billion and non-GAAP EPS guidance of $6.95 to $7.25, with more than 90% of required revenue already in backlog. International government revenue grew 35.1% to $39.5 million, commercial client revenue increased 5.9% to $166.0 million, and federal government revenue declined 9.5% to $184.9 million due to 2025 contract cancellations but rose 1.4% sequentially. Adjusted EBITDA margin expanded 10 basis points to 11.2%, and the business development pipeline reached $9.3 billion, up 9% from the first quarter. The company also declared a quarterly dividend of $0.14 per share payable on October 9, 2026.

Shares of ICF International surged 11.4% to $95.05 after the consulting firm reported adjusted earnings per share of $1.86, beating estimates by about 13%, and reaffirmed its full-year guidance despite a slight revenue miss. Revenue was $474.5 million, essentially flat year over year and below forecasts, as pressure in federal client work was offset by demand from commercial energy, state and local, and international government clients. Management maintained its full-year revenue outlook of $1.89 billion to $1.96 billion and non-GAAP EPS of $6.95 to $7.25, noting that roughly 90% of the revenue needed for the midpoint is already in backlog. Strong operating cash flow in the quarter reinforced the quality of earnings, and the reaffirmed guidance with high backlog coverage reassured investors about a second-half federal recovery despite the top-line miss.

ICF has been awarded a new subcontract task order by Parsons Corporation to deliver cybersecurity technology and research and development services to the U.S. Army Combat Capabilities Development Command Army Research Laboratory. The contract has a ceiling value of $25 million and a term of five years, including a 12-month base and four one-year options. ICF will support the lab's mission of advancing secure, resilient tactical networks for military operations, providing services such as artificial intelligence, machine learning, network science, systems administration, modeling, simulation, and testing. The company has supported the Army Research Laboratory's cyber operations and research and development initiatives for nearly three decades.

ICF International launched an AI-powered licensing, permitting and inspections accelerator built on Salesforce and DocuSign, strengthening its position in the government digital modernization market. The company also increased its share repurchase authorization by $100 million, bringing the total to $165 million, reflecting management's confidence in long-term growth. Additionally, ICF International secured a $14 million recompete contract with the California Department of Transportation, extending a partnership of more than 20 years. The stock carries a Zacks Rank #2, or Buy, and has surged 8.4% over the past 30 days, outperforming the Zacks Government Services industry's 0.5% growth.

The California Department of Transportation has awarded ICF a recompete contract with a ceiling value of $14 million to provide on-call environmental policy and implementation services. The three-year contract, awarded in the first quarter of 2026, will support the statewide transportation infrastructure project delivery program. ICF will help Caltrans accelerate project delivery by strengthening cross-agency coordination and aligning reviews with compliance and permitting requirements to simplify the environmental review process. The company has a 20-year partnership with Caltrans Headquarters.

ICF has announced a $100 million increase to its share repurchase authorization, bringing the total remaining authority to $165 million. The board approved the expansion, which underscores confidence in the company's long-term prospects. Year to date, ICF has repurchased approximately 435,000 shares for a total of $29 million. Chair and CEO John Wasson stated the program will be used alongside strong cash flow to return capital to shareholders, maintain dividends, and pursue organic investments and strategic acquisitions.