ICF International, Inc.

Good day, everyone, and thank you for standing by. Welcome to the third quarter 2024 ICF earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw the question, simply press star 1-1 again. please be advised that today's conference is being recorded. Now it's my pleasure to turn the call to Lynn Morgan with Advisory Partners.

Thank you, Operator. Good afternoon, everyone, and happy Halloween. Thank you for joining us to review ICF's third quarter 2024 performance. With us today from ICF are John Wasson, Chair and CEO, and Barry Broadus, CFO. Joining them is James Morgan, Chief Operating Officer. During this conference call, we will make forward-looking statements to assist you in understanding ICF management's expectations about our future performance. These statements are subject to a number of risks that could cause actual events and results to differ materially, and I refer you to our October 31st, 2024 press release and our SEC filings for discussions of those risks. In addition, our statements during this call are based on our views as of today. We anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may at some point elect to update the forward-looking statements made today, but specifically disclaim any obligation to do so. I will now turn the call over to ICF CEO, John Wasson, to discuss third quarter 2024 performance. John?

Thank you, Lynn, and thank you all for participating in today's call. to review our third quarter results and discuss our business outlook. I want to echo Lynn's happy Halloween issues, and I'm pleased to say we have no tricks and lots of treats in our Q3 results. So with that said, I'll move this along so those of you who are going out trick-or-treating tonight can get there in a timely way. So this was another strong quarter for ICF. Our staff executed very well on existing contracts, and our forward-looking metrics indicate that we are well-positioned for continued growth. Looking at the key takeaways from the quarter, first, revenue from continuing operations increased 6% year-on-year. Additionally, revenues from continuing operations less pass-throughs increased 10% year-on-year. This is representative of the work done by ICF employees. Second, we outperformed across all profitability metrics, reflecting favorable business mix and tax benefits. enabling us to increase our EPS guidance by 35 cents for the full year. Third, we had solid third quarter contract wins, resulting in a healthy trailing 12-month book-to-bill ratio of 1.31. And lastly, we ended the third quarter with a record new business development pipeline of 10.6 billion, providing substantial growth potential for ICF across our government and commercial client sets over the coming years. Third quarter revenue growth, again, was led by our energy, environment, infrastructure, and disaster recovery client market. We're accelerating demand for ICF's multidisciplinary solutions, our analytics, and our program management expertise drove a 15.3% increase in revenue. Robust growth in our higher margin revenues from commercial energy clients continued to be a key contributor to our strong performance. Year-on-year growth conducted both the addition of new clients and the increasing scope of work we're performing for existing clients. ICF is a market leader in developing and implementing the latest generation of residential energy efficiency programs, and we're also gaining share in the commercial and industrial energy efficiency markets. We have a long track record of consistently reaching and exceeding performance goals on our energy efficiency programs, and have invested organically and through tuck-in acquisitions to significantly expand our capabilities in adjacent areas. As a result, we have earned the trust of our utility clients and have a broad range of very timely and relevant offerings that bring together our expertise in energy, climate, grid engineering, and disaster recovery, which is a unique set of capabilities that ICF has. This has led to consistent growing demand for our program development and implementation services beyond energy efficiency programs to include pilot programs on flexible load management, developing programs on electrification, and advising on grid resilience. And this demand has accelerated given the rapid pace of load growth from new data centers and transportation electrification. In the third quarter, we also continued to work for utilities in support of undergrounding power lines and advising on wildfire restoration and resilience. Additionally, third quarter commercial energy market revenues growth reflected ongoing work for renewable developers across solar, storage, and wind, where we have seen recent wins to provide the full breadth of ICF's licensing, permitting, compliance, and habitat conservation services. We continue to see opportunities from the IIJA and IRA. To date, ICF has won about $185 million in work related to the IIJA and IRA, primarily from federal and state government clients, and their pipeline is over 250 million. This does not include all the related work that we're doing for commercial clients, where it's more difficult to tie the engagements to specific legislation. RFPs from state and local governments for IJA and IRA-related grant management support are being released, with many more expected in Q4 and early 2025. These RSPs for programs such as climate pollution reduction, solar for all, home energy rebates, and grid resilience and innovation provide significant opportunities for ICF, building on our existing work across the country for utilities and for state and local climates on climate and clean energy topics. In fact, we continue to see strong demand for our climate-related services across our clients set in the third quarter, with revenues up substantially year-on-year and solid growth and new contract wins. Indicative of the breadth and depth of our climate work with state governments are third quarter wins with the state of Hawaii for sea level rise vulnerability assessments, the California Air Resources Board for a refinery infrastructure study, and carbon reduction strategies for the Texas Capital Area Metropolitan Planning Organization. And our disaster recovery work continues to be in high demand. As you know, we generally are not involved in the initial response to disasters. But we have won numerous small contracts from clients in Florida, North Carolina, South Carolina, and Virginia to provide immediate disaster assessment support post-hurricanes Helene and Milton. Later in 2025, we will respond to competitive solicitations to address their longer-term recovery needs, and these small initial assignments will raise ICF's profile and allow us to develop key client relationships now. ICF is currently delivering on roughly 50 disaster recovery programs in 16 states and two territories. And we're currently supporting more than 30 clients mitigation efforts in 10 states and one territory. And our programs are expanding as evidenced by a recent $38 million contract extension from an existing client to continue supporting their disaster recovery and mitigation efforts. And a new contract with another existing client to provide services to support compliance with federal and local disaster management regulations related to its hurricane recovery efforts. Moving to our health and social programs client market, reported revenues from continual operations declined 5.2% year on year, but that includes a reduction in pass-through revenues of approximately $12 million in the third quarter. Adjusting for the lower pass-through revenues, revenues from continual operations in this client market were slightly ahead of last year. As we discussed last quarter, we have faced difficult comparison in this client market in 2024 for two major reasons. The anticipated fall-off in revenues from small business set-aside contracts that were held by the IT modernization firms we acquired in 2022 and ramp-up delays on certain USAID health-related contracts. Please also keep in mind that several of our large international government contracts are included in this client market. We won several new contracts in the public health and social programs arena in the third quarter, including a new task order worth $40 million to deliver strategic and digital communication and engagement campaigns to combat human trafficking. And we continue to see growth opportunities related to capacity building, training, and technical assistance for federal grantees. Currently, we support about $200 million per year of this work across the federal government, including at ACF, NIH, CDC, DOJ, and EPA. Also in the third quarter, we were awarded a new $70 million contract by the government of the U.S. territory to design, build, and implement a new geospatial data management system. This is an excellent example of the increased traction we're seeing on opportunities that combined our technology and domain expertise, particularly when the scope of work includes a data or AI focus. Other examples of recent wins where we're combining our technology and domain expertise within the public health and social programs area include a new project for the Advanced Research Projects Agency for Health, or ARPA-H, in which we'll develop and apply methods to make genomic and other complex scientific data AI ready. The biomedical research data from NIH institutes and centers will then be included in ARPA's age biomedical data fabric toolbox and be more easily accessible by researchers. Also, we executed on our expanded contract to modernize the data infrastructure that supports CDC's Youth Risk Behavior Survey, which is the largest public health surveillance system in the U.S., monitoring health-related behaviors among high school students like alcohol and drug use, physical activity, and unintentional injuries and violence. As we end the year and move into 2025, We believe that the federal digital modernization efforts will continue to remain a bipartisan spending priority and that this market will continue to grow at a high single-digit rate. Further, we're pleased to see an increase in the number of procurements being released with expected awards in the first half of 2025. On the topic of new business, as I mentioned earlier, we ended the third quarter with a healthy trailing 12-month book-to-bill ratio of 1.31, which is a positive indication of future growth. New business accounted for 63% of our year-to-date contract lens, demonstrating how well our capabilities are aligned with client spending priorities. In summary, this was a quarter of significant progress for ICF in terms of execution, profitability, and forward-looking metrics. I'll now turn the call over to our CFO, Barry Broaddus, for financial review. Barry?