ICF International, Inc.

Welcome to the Q1, 2026 ICF Earnings Conference Call. My name is Lauren Cannon, and I will be your operator for today's 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 ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I will now turn the call over to Lynn Morgan of Advisory Partners. Lynn, you may begin. Thank you, Lauren.

Good afternoon, everyone, and thank you for joining us to review ICF's first quarter 2026 performance. With us today from ICF are John Wasson, Chair and CEO, Ann Cho, President, and James Morgan, Chief Operating and Financial Officer. During this conference call, we will make forward-looking statements to assist you in understanding ICF management's expectations about our future. 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 May 7, 2026 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. You may at some point elect to update the floor that these statements made today, but specifically disclaim any obligation to do so. I will now turn the call over to ICF CEO, John Watson, to discuss first quarter 2026 performance.

John? Thank you, Lynn, and thank you all for joining us this afternoon to review our first quarter results and discuss our business outlook. The first quarter represented a solid start to the year. We executed well across our client set, reflecting successful strategic initiatives to diversify our business model and our track record of delivering positive outcomes for our clients. This track record is a function of ICF's deep domain expertise, paired with cross-cutting capabilities in technology, digital transformation, complex program management, and engagement. By going to market with this unique combination of capabilities and experience, We continue to maintain healthy win rates, report industry-leading book-to-bill ratios, and build our business development pipeline, all metrics that underpin ICF's future growth potential. Key takeaways from the first quarter of 2026 include, first, an 8.6% potential increase in our revenues from federal government clients, representing a strong indication that this part of the business is stabilized and is on the upswing. As we noted last quarter, we expect to see sequential improvement in our revenues from federal government clients through the third quarter of this year, with year-on-year growth in this client category anticipated for the 2026 fourth quarter. Second, a 17% year-on-year increase in revenues from international government clients, which was a strong showing tied directly to recent contract wins, many of which are single award contracts. Third, of the total of $12 million in revenues, that shifted out of the first quarter to the timing of project work for commercial and international government clients. We expect one half to be recognized in the second quarter and the remainder to come through the second half of this year, supporting our four-year guidance for company-wide revenue growth of 3% at the midpoint. And lastly, we continue to win north of 90% of our re-competes. New business, including modifications, represented 65% of this quarter's awards, a strong indication of how well our qualifications are aligned with client demand. ICF was awarded $450 million in contracts in the first quarter, maintaining our 12-month book-to-bill ratio at a healthy 1.21. And after this quarter's awards, our business development pipeline stood at $8.5 billion. Also, we were pleased with our strong margin performance in the first quarter, which we achieved while continuing to invest organically in areas where we have identified as drivers of long-term growth for ICF, namely commercial energy, disaster recovery, and federal technology modernization. There are several important secular trends supporting our growth expectations for these areas, including rapidly growing demand for electricity in North America, highlighting the importance of energy efficiency and grid modernization programs, increased frequency and severity of natural disasters, including hurricanes, wildfires, and other extreme weather events, which often result in major damage to homes, businesses, and critical infrastructure, and the tremendous need for digital and AI-driven technology modernization to improve mission delivery across federal civilian agencies. ICF is well-positioned to capture more than our fair share of growth in these markets, which supports our confidence that ICF will return to mid- to high-single-digit organic growth at 2027, and continued growth beyond. And when you layer on the potential for creative acquisitions, you see a clear path to return to double-digit growth. Given our expectations for continued favorable business mix and our ongoing internal efficiencies, many of which are coming from AI and other tools, we expect earnings growth to continue to outpace revenue growth as we look forward. I know that investors are concerned about the impact of agentic AI tools, on the technology modernization work that is being done at federal government agencies. While we understand the concerns, we are doing work in this market every day, and over the last two years, we have adjusted our offerings to strengthen our resilience to just that concern. For example, we focus on longer-term demand drivers, including AI augmented application development and foundational modernization and AI governance and orchestration. Here are several insights that are relevant to ICF. First, 80% of our technology monetization work for federal clients is fixed price or outcome based, and our civilian agency clients require a lot of support in this area. As AI augmented methods enable us to complete projects in less time and at a lower cost, we will simply move on to the next project more quickly than in the past. While technology is moving quickly, There is a substantial backlog of modernization work to be done to address the existing technical debt in the federal civilian arena. Second, as our clients move to advance AI at enterprise scale, we anticipate even greater demand for foundational data, cybersecurity, and cloud services. This is the foundation that determines whether AI deployments produce reliable, secure, and scalable outcomes or fail in production. we are prepared to help our clients continue on their journeys to improve and modernize their data and cloud architectures in order to capitalize on the promise of AI. And third, these AI capabilities also open up a larger technology market. We will see new opportunities for smarter workflow automation as agencies reimagine what's possible, also be able to address legacy technical debt that was heretofore too expensive to address through traditional modernization And finally, we'll help our clients in addressing new challenges with AI governance, orchestration, and platform optimization that are all emerging as we speak. These areas require both technology and domain expertise combined with human judgment and oversight to get it right. The upshot is that the government technology market is expanding in scope, shifting in shape, and asking more of its partners than it did before AI. I see of his position to lead and grow through this evolution. Before turning the call over to Ann Choate, our president, who will provide a more detailed business review, I did want to comment on M&A. Last year, we were fully concentrated on building our capabilities across our non-federal client base and on tightly managing our federal government business in light of the volatility that we experienced in the first half of 2025. This year, We are taking a more aggressive stance with respect to M&A, given the substantial opportunities we see in our key growth markets, and in particular, commercial energy. We remain disciplined, but if we find an acquisition that meets our criteria for driving revenue, synergies, and growth areas, and for being impeded soon after completion, we will move forward. Acquisitions have been an important part of ICF's growth strategy over the last 25 years, and we have a great track record of using precast flows. to pay down debt quickly. So now I'll turn the call over to Ann to discuss first quarter business performance across our client set. Ann?