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What changed in ICF International, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ICF International, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+280 added−305 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-28)

Top changes in ICF International, Inc.'s 2025 10-K

280 paragraphs added · 305 removed · 218 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

67 edited+38 added−61 removed38 unchanged
Biggest changeIn fiscal years 2024, 2023, and 2022, our largest three U.S. government clients by revenue and their percentages to our total revenue are as follows: 2024 Department of Health and Human Services 25 % Department of State 3 % Environmental Protection Agency 3 % Total 31 % 2023 Department of Health and Human Services 26 % Department of State 5 % Department of Defense 3 % Total 34 % 2022 Department of Health and Human Services 23 % Department of State 6 % Department of Defense 4 % Total 33 % There was no single commercial client with revenue greater than 2% of our total revenue for the 2024, 2023, and 2022 fiscal years, respectively.
Biggest changeIn fiscal years 2025, 2024, and 2023, our revenue by client type and contract type are as follows: Year ended December 31, 2025 2024 2023 U.S. federal government 43 % 54 % 55 % U.S. state and local government 17 % 16 % 16 % International government 7 % 5 % 5 % Commercial 33 % 25 % 24 % Total 100 % 100 % 100 % Year ended December 31, 2025 2024 2023 Time-and-materials 43 % 42 % 41 % Fixed-price 50 % 46 % 45 % Cost-based 7 % 12 % 14 % Total 100 % 100 % 100 % In fiscal years 2025, 2024, and 2023, our largest client was the Department of Health and Human Services (“HHS”) with 22%, 25%, and 26% of total revenue, respectively.
We can also offer clients our extensive performance measurement, program evaluation, and performance management services. Finally, our network of offices across the U.S. allows us to focus our business development efforts on addressing the needs of U.S. federal and state and local government agencies with operations outside of the Washington, D.C. metropolitan area.
We can also offer clients our extensive performance measurement, program evaluation, and performance management services. Finally, our network of offices across the U.S. allows us to focus our business development efforts on addressing the needs of U.S. federal and state and local government agencies with operations outside the Washington, D.C. metropolitan area.
Our broad range of services to the aviation industry makes us well positioned to capitalize on significant industry changes; substantial airline equipment upgrades to newer, more efficient aircraft models in a cost-constrained environment; testing and adoption of Sustainable Aviation Fuels (“SAF”); and changes to airport business models and strategy as they place increasing importance on passenger experience.
Our broad range of services to the aviation industry makes us well positioned to capitalize on significant industry changes; substantial airline equipment upgrades to newer, more efficient aircraft models in a cost-constrained environment; testing and adoption of sustainable aviation fuels; and changes to airport business models and strategy as they place increasing importance on passenger experience.
We then use this knowledge to provide continuous improvement across our entire range of services, which maintains the relevance of our recommendations. 11 Our technology-enabled solutions are driven by our subject matter expertise and creativity Government and commercial decision-makers have become increasingly aware that, to be effective, technology-based solutions need to be seamlessly integrated with people and processes.
We then use this knowledge to provide continuous improvement across our entire range of services, which maintains the relevance of our recommendations. 9 Our technology-enabled solutions are driven by our subject matter expertise and creativity Government and commercial decision-makers have become increasingly aware that, to be effective, technology-based solutions need to be seamlessly integrated with people and processes.
We possess a strong knowledge and experience base in information technology and a thorough understanding of organizational behavior and human decision processes. We have strong partnerships and experience in cloud-based technology platforms and open-source ecosystems that are central to our federal government clients’ technology modernization agendas.
We possess a strong knowledge and experience base in IT and a thorough understanding of organizational behavior and human decision processes. We have strong partnerships and experience in cloud-based technology platforms and open-source ecosystems that are central to our federal government clients’ technology modernization agendas.
We believe our balance between government civilian and defense agencies, our commercial presence, and the diversity of markets in which our clients operate help mitigate the impact of policy or political shifts, as well as annual shifts in our clients’ budgets and priorities.
We believe our balance between government agencies, our commercial presence, and the diversity of markets in which our clients operate help mitigate the impact of policy or political shifts, as well as annual shifts in our clients’ budgets and priorities.
We believe we can leverage many of our long-term client relationships by introducing these existing clients, where appropriate, to our other services in order to better meet their needs. For example, we introduce many of our advisory clients to our capabilities to provide associated information technology, cybersecurity, large-scale program management, and strategic communications and digital services.
We believe we can leverage many of our long-term client relationships by introducing these existing clients, where appropriate, to our other services in order to better meet their needs. For example, we introduce many of our advisory clients to our capabilities to provide associated IT, cybersecurity, large-scale program management, and strategic communications and digital services.
Some of our principal competitors include: Abt Associates; Accenture; AECOM Technology Corporation; Booz Allen Hamilton Holding Corporation; CACI International Inc.; CLEAResult Consulting, Inc.; Deloitte LLP; General Dynamics, Inc.; Guidehouse; HORNE; Leidos Holdings, Inc.; PA Consulting Group; Science Applications International Corporation; Research Triangle Institute; Tetra Tech Inc.; and Westat, Inc.
Some of our principal competitors include: Abt Global; Accenture; AECOM Technology Corporation; Booz Allen Hamilton Holding Corporation; CACI International Inc.; CLEAResult; Deloitte LLP; General Dynamics, Inc.; Guidehouse; Leidos Holdings, Inc.; PA Consulting Group; Science Applications International Corporation; Research Triangle Institute, International; Tetra Tech Inc.; and Westat, Inc.
For example, we believe we can continue to expand our program- and technology-based services in areas such as assisting with the implementation of energy efficiency programs, electrification and decarbonization initiatives, information technology applications, and environmental management services for larger utilities.
For example, we believe we can continue to expand our program-based and technology-enabled services in areas such as assisting with the implementation of energy efficiency programs, electrification and decarbonization initiatives, IT applications, and environmental management services for larger utilities.
Our 10 largest contracts by revenue collectively accounted for approximately 12%, 14%, and 15% of our revenue in the 2024, 2023, and 2022 fiscal years, respectively. 15 CONTRACT BACKLOG We define backlog as the future revenue we expect to receive from our contracts and other engagements.
Our 10 largest contracts by revenue collectively accounted for approximately 14%, 12%, and 14% of our revenue in the 2025, 2024, and 2023 fiscal years, respectively. CONTRACT BACKLOG We define backlog as the future revenue we expect to receive from our contracts and other engagements.
We converted to a Delaware corporation in 2003 and changed our name to ICF International, Inc. in 2006. We completed our initial public offering in September 2006. We provide professional services and technology-based solutions, including management, technology, and policy consulting and implementation services.
We converted to a Delaware corporation in 2003 and changed our name to ICF International, Inc. in 2006. We completed our initial public offering in September 2006. We provide professional services and technology-based solutions, including management, technology, and policy consulting and implementation services, to government and commercial clients.
Many of our government contracts provide for option periods that may be exercised by the client. In 2024, 2023, and 2022, no single contract accounted for more than 2%, 2%, and 3% of our revenue for those fiscal years, respectively.
Many of our government contracts provide for option periods that may be exercised by the client. In 2025, 2024, and 2023, no single contract accounted for more than 2% of our revenue for those fiscal years, respectively.
We will focus not only on defending our current market footprint, but also on innovating to continue expanding across key growth markets, such as U.S. federal government energy and resilience-related programs, reengineering of U.S. public health and research efforts, and cybersecurity initiatives, digital services, and disaster recovery work for state and local governments.
We will focus not only on enhancing our current market footprint and continue expanding across key growth markets, such as U.S. federal government energy and resilience-related programs, reengineering of U.S. public health and research efforts, and cybersecurity initiatives, digital services, and disaster recovery work for state and local governments.
We have a broad global presence We serve our clients with a global network of 55 regional offices throughout the U.S., and 15 offices in key markets outside the U.S., including offices in the U.K., Belgium, Spain, India, and Canada.
We have a broad global presence We serve our clients with a global network of 49 regional offices throughout the U.S., and 14 offices in key markets outside the U.S., including offices in the U.K., Belgium, Spain, India, and Canada.
Our global presence also gives us access to many of the leading experts on a variety of issues from around the world, allowing us to expand our knowledge base and areas of functional expertise. Over the years, we worked in dozens of countries, helping government and commercial clients with energy, environment, infrastructure, healthcare, interactive technology/e-commerce, and air transport matters.
Our global presence also gives us access to many of the leading subject matter experts from around the world, allowing us to expand our knowledge base and areas of functional expertise. Over the years, we have worked in dozens of countries, helping government and commercial clients with energy, environment, infrastructure, healthcare, interactive technology/e-commerce, and air transport matters.
We continue to see growth opportunities in our current commercial business in the utility sector as well as significant potential to expand our business in other commercial areas such as aviation and tourism. 12 We view the energy industry as a particularly attractive sector for us over the next decade due to concerns over controlling energy costs and limiting climate and environmental impacts, increasing energy demands related to electrification projects and the expansion of data centers due to AI, changing state and federal regulation, the need for cleaner and more diverse sources of energy, and the concomitant need for infrastructure to transport/transmit, store, and/or convert those new energy sources.
We continue to see growth opportunities in our current commercial energy business as well as continued focus on other commercial business such as aviation and tourism. 10 We view the energy industry as a particularly attractive sector for us over the next decade due to concerns over controlling energy costs and limiting climate and environmental impacts, increasing energy demands related to electrification projects and the expansion of data centers due to AI, changing state and federal regulation, the need for cleaner and more diverse sources of energy, and the concomitant need for infrastructure to transport/transmit, store, and/or convert those new energy sources.
We have tailored offerings for every stage of career, and every type of learner, ranging from experiential learning to informal learning like our mentoring program, and formal courses. In 2024, we delivered digital and instructor-led programs to build skills in various areas, including leadership, people management, project management, consulting, business development, finance, technology, and innovation skills.
We have tailored learning and development offerings for every stage of career, and every type of learner, ranging from experiential learning to informal learning and formal courses. In 2025, we delivered digital and instructor-led programs to build skills in various areas, including leadership, people management, project management, consulting, business development, finance, technology, collaboration, and innovation skills.
We use these innovative, and often proprietary, software, analytical models, and tools throughout our service offerings. Our staff regularly maintains, updates, and improves these software, models, and tools based on our corporate experience. In addition, we sometimes retain limited rights in software applications we develop for clients. We use a variety of means to protect our intellectual property.
Our staff regularly maintains, updates, and improves these software, models, and tools based on our corporate experience. In addition, we sometimes retain limited rights in software applications we develop for clients. We use a variety of means to protect our intellectual property.
As of December 31, 2024, approximately 43% of our benefits-eligible staff held post-graduate degrees in diverse fields such as the social sciences, business and management, physical sciences, public policy, human capital, information technology, mathematics, engineering, planning, economics, life sciences, and law.
As of December 31, 2025, approximately 42% of our benefits-eligible staff held post-graduate degrees in diverse fields such as the social sciences, business and management, physical sciences, public policy, human capital, IT, mathematics, engineering, planning, economics, life sciences, and law.
Our funded and estimates of unfunded and total backlog were as follows at December 31: (in millions) 2024 2023 2022 Funded $ 1,857.1 $ 1,775.1 $ 1,786.9 Unfunded 1,929.2 2,002.7 2,069.3 Total backlog $ 3,786.3 $ 3,777.8 $ 3,856.2 There were no awards included in our 2024, 2023, or 2022 backlog amounts that were under protest.
Our funded and estimates of unfunded and total backlog were as follows at December 31: (in millions) 2025 2024 2023 Funded $ 1,711.7 $ 1,857.1 $ 1,775.1 Unfunded 1,693.3 1,929.2 2,002.7 Total backlog $ 3,405.0 $ 3,786.3 $ 3,777.8 There were no awards included in our 2025, 2024, or 2023 backlog amounts that were under protest.
We generated revenue of $2,019.8 million, $1,963.2 million, and $1,780.0 million during the years ended December 31, 2024, 2023, and 2022, respectively. Our total backlog was $3,786.3 million, $3,777.8 million, and $3,856.2 million at December 31, 2024, 2023, and 2022, respectively.
We generated revenue of $1,872.9 million, $2,019.8 million, and $1,963.2 million during the years ended December 31, 2025, 2024, and 2023, respectively. Our total backlog was $3,405.0 million, $3,786.3 million, and $3,777.8 million at December 31, 2025, 2024, and 2023, respectively.
As of December 31, 2024, we had approximately 9,300 full-time and part-time employees around the globe, including many recognized as thought leaders in their respective fields.
As of December 31, 2025, we had approximately 8,400 full-time and part-time employees around the globe, including many recognized as thought leaders in their respective fields.
Defend, expand, and deepen our presence in core U.S. federal and state and local government markets Changing and somewhat unpredictable political priorities at the U.S. federal, state, and local government levels have created challenging market conditions for all competitors in the government services sector; however, we believe that changes driven by the Trump administration will provide opportunities to accelerate digital transformation of the U.S. federal government activities and to provide advisory and analytic support to changing policy priorities.
Enhance and deepen our presence in core government markets The current political and policy environment have created challenging market conditions for all competitors in the government services sector; however, we believe that changes driven by the Administration will provide opportunities to accelerate digital transformation of the U.S. federal government activities and to provide advisory and analytic support to changing policy priorities.
Each team participates in regular executive reviews of marketing plans and proposal development processes. Our non-federal government clients are served by account leaders from operating units and coordinated by senior leaders with industry experience where such coordination is deemed appropriate to enhance our business development success. This account-based approach allows deep insight into the needs of current and future clients.
Our non-federal government clients are served by account leaders from operating units and coordinated by senior leaders with industry experience where such coordination is deemed appropriate to enhance our business development success. This account-based approach allows deep insight into the needs of current and future clients.
We are led by an experienced management team Our management team, consisting of 293 senior leaders with the title of vice president or higher, possesses extensive industry experience and had an average tenure of approximately 17 years with us as of December 31, 2024 (including prior service with companies we have acquired).
We are led by an experienced management team Our management team, consisting of 279 senior leaders with the title of vice president or higher, possesses extensive industry experience and had an average tenure of approximately 18 years with us as of December 31, 2025 (including prior service with companies we have acquired). This tenure allows us to retain institutional knowledge.
The marketing function also executes corporate communications campaigns to support specific lines of business. Our contracts and administration function supports bid price development in partnership with the business development account teams. COMPETITION We operate in a highly competitive and fragmented marketplace and compete against a number of firms in each of our clients’ key markets.
Our contracts and administration function supports bid price development in partnership with the business development account teams. COMPETITION We operate in a highly competitive and fragmented marketplace and compete against a number of firms in each of our clients’ key markets.
Our business development processes and systems are designed to enable agility and speed-to-market over the business development life cycle, especially given the distinctions between commercial and government clients. Business development efforts in priority market areas, which include some of our largest federal agency accounts (HHS, DoS, DoE, U.S. Department of Transportation, and EPA), are executed through account teams.
BUSINESS DEVELOPMENT Our business development efforts are critical to our organic growth. Our business development processes and systems are designed to enable agility and speed-to-market over the business development life cycle, especially given the distinctions between commercial and government clients. Business development efforts in priority market areas, which include some of our largest federal agency accounts (HHS, the U.S.
Our estimate of unfunded backlog for a particular contract is based, to a large extent, on the amount of revenue we have recently recognized on the particular contract under the assumption that future utilization will be similar, our past experience in utilizing contract capacity on similar types of contracts, and our professional judgment.
In addition, the amount of revenue we have recently recognized on the particular contract under the assumption that future utilization will be similar, our past experience in utilizing contract capacity on similar types of contracts, and our professional judgment.
This low turnover allows us to retain institutional knowledge. Our managers are experienced both in marketing efforts and in successfully managing and executing our key services. Our management team also has experience in acquiring other businesses and integrating those operations with our own. A number of our managers are industry-recognized thought leaders.
Our managers are experienced both in marketing efforts and in successfully managing and executing our key services. Our management team also has experience in acquiring other businesses and integrating those operations with our own. Dozens of our managers are industry-recognized thought leaders.
We believe that this acquisition will further enhance our market presence and client footprint. We expect that interest in energy advisory services will continue to expand as clients in a number of industries, including information service providers and companies engaged in travel and tourism, seek to better understand their energy consumption options and the positive benefits of demonstrating environmental stewardship.
We expect that interest in energy advisory services will continue to expand as clients in a number of industries, including information service providers, seek to better understand their energy consumption options and the positive benefits of demonstrating energy efficiency and environmental stewardship.
Most of our revenue is derived from prime contracts under which we work directly for the end customer. These accounted for approximately 87%, 89%, and 91% of our revenue for the 2024, 2023, and 2022 fiscal years, respectively. Our contract periods typically extend from one month to five years, including option periods.
There was no other client with revenue greater than 5%. Our revenue is primarily from prime contracts under which we work directly for the end customer. These accounted for approximately 86%, 87%, and 89% of our revenue for the 2025, 2024, and 2023 fiscal years, respectively. Our contract periods typically extend from one month to five years, including option periods.
Our subject matter expertise includes public health, biomedical research, healthcare quality, mental health, international health and development, health communications and associated interactive technologies, education, child and family welfare needs, housing and communities, and substance abuse.
Our expertise spans: • Public health, biomedical research, healthcare quality, mental health, and health development; • Health communications and interactive technologies; and • Education, child and family welfare, housing and community development, and substance abuse prevention.
We consider our principal competitive advantages to be long-standing client relationships, the good reputation and past performance of the firm, client references, the technical knowledge and industry expertise of our employees, the quality of our services and solutions, and the scope and scale of our service offerings. 17 INTELLECTUAL PROPERTY We own a number of trademarks and copyrights, and internally developed software that helps maintain our business and competitive position.
We consider our principal competitive advantages to be long-standing client relationships, the good reputation and past performance of the firm, client references, the technical knowledge and industry expertise of our employees, the quality of our services and solutions, and the scope and scale of our service offerings.
To this end, on December 31, 2024, we acquired Applied Energy Group (“AEG”), a leading energy technology and advisory services company with over 100 utility management and demand side energy experts. AEG provides a suite of integrated technology and advisory solutions to electric and gas utilities, state and local governments, and state energy offices nationwide.
To this end, on December 31, 2024, we acquired Applied Energy Group (“AEG”), a leading energy technology and advisory services company with over 100 utility management and demand side energy experts.
The corporate business development function also includes a market research and competitive intelligence group, a proposal group, and a strategic capture unit. The marketing function engages in brand marketing and strategic marketing program development and execution to raise awareness of our services and solutions across our markets, and to generate leads for further pursuit by sales personnel.
The marketing function engages in brand marketing and strategic marketing program development and execution to raise awareness of our services and solutions across our markets, and to generate leads for further pursuit by sales personnel. The marketing function also executes corporate communications campaigns to support specific lines of business.
General Services Administration (the “GSA”) Multiple Award Schedule (“GSA Schedule”) contracts, other Indefinite Delivery/Indefinite Quantity (“IDIQ”) contracts, Master Service Agreements (“MSAs”), or other contract vehicles that are also held by a large number of firms and under which potential future delivery orders or task orders might be issued by any of a large number of different agencies, and are likely to be subject to a competitive bidding process.
We do not include any estimate of revenue relating to potential future delivery orders that might be awarded under our GSA Schedule contracts, other IDIQ contracts, Master Service Agreements (“MSAs”), or other contract vehicles that are also held by a large number of firms and under which potential future delivery orders or task orders might be issued by any of a large number of different agencies, and are likely to be subject to a competitive bidding process.
REGULATION We provide our services to U.S. federal and state and local governments, as well as international government clients, and we are therefore subject to certain laws and regulations. Our failure to comply with the complex laws, rules, and regulations applicable to us could cause us to lose business and subject us to a variety of penalties and sanctions.
REGULATION We provide our services to U.S. federal and state and local governments, as well as international government clients, and we are therefore subject to a variety of laws and regulations.
We do, however, include potential future work expected to be awarded under IDIQ contracts that are available to be utilized by a limited number of potential clients and are held either by us alone or by a limited number of firms, and we have a history of working with these clients on predecessor IDIQ contracts or other contract vehicles.
We do, however, include potential future work expected to be awarded under IDIQ contracts that are available to be utilized by a limited number of potential clients and are held either by us alone or by a limited number of firms, and we have a history of working with these clients on predecessor IDIQ contracts or other contract vehicles. 13 We include expected revenue in funded backlog when we have been authorized by the client to proceed under a contract up to the dollar amount specified by our client, and this amount will be owed to us under the contract after we provide the services pursuant to the authorization.
Our domain expertise is well suited in Europe to meet the need for cutting-edge climate change, energy, and environmental solutions, particularly with our offerings to the U.K. government and the E.C.
Our domain expertise is well suited in Europe to meet the need for cutting-edge climate change, energy, and environmental solutions, particularly with our offerings to the U.K. government and the E.C. Strengthen our technology-based offerings Since 2020, we have executed a series of strategic acquisitions to strengthen our leadership in IT modernization and cloud-based solutions.
We have numerous contacts at various levels within our clients’ organizations, ranging from key decision-makers to functional managers. The long-standing nature and breadth of our client relationships adds greatly to our institutional knowledge, which, in turn, helps us carry out our client engagements more effectively and maintain and expand such relationships.
The long-standing nature and breadth of our client relationships adds greatly to our institutional knowledge, which, in turn, helps us carry out our client engagements more effectively and maintain and expand such relationships.
We are positioned to increase these services by expanding the technological underpinnings of our business, while bringing cloud, AI, business process automation, data management, and analytics offerings to our clients to better link them with citizens, consumers, and other stakeholders. 13 Leverage advisory work into full life-cycle solutions We plan to continue to leverage our advisory services and strong client relationships to increase our revenue by winning longer-term engagements.
These investments, combined with the introduction of our proprietary ICF Fathom AI platform in 2025, position us to deliver advanced offerings in cloud, AI, business process automation, data management, and analytics that help clients better connect with citizens, consumers, and stakeholders. 11 Leverage advisory work into full life-cycle solutions We plan to continue to leverage our advisory services and strong client relationships to increase our revenue by winning longer-term engagements.
It also helps us anticipate our clients’ evolving requirements over the coming 12 to 18 months and position ourselves to meet those requirements. Each administrative group is responsible for maximizing sales in our existing accounts and finding opportunities in closely related accounts.
It also helps us anticipate our clients’ evolving requirements over the coming 12 to 18 months and position ourselves to meet those requirements.
We serve clients globally from our headquarters in the Washington, D.C. metropolitan area, our 55 regional offices throughout the U.S., and 15 offices outside the U.S., including offices in the United Kingdom (“U.K.”), Belgium, Spain, India, and Canada.
We serve clients globally from our headquarters in the Washington, D.C. metropolitan area, our 49 regional offices throughout the U.S., and 14 offices outside the U.S., including offices in the United Kingdom (the “U.K.”), Belgium, Spain, India, and Canada. 5 OUR COMPANY INFORMATION Our principal executive office is located at 1902 Reston Metro Plaza, Reston, Virginia 20190, and our telephone number is (703) 934-3000.
We generally include in our backlog the estimated revenue represented by contract options that have been priced, but not exercised. We do not include any estimate of revenue relating to potential future delivery orders that might be awarded under our U.S.
We generally include in our backlog the estimated revenue represented by contract options that have been priced, but not exercised.
Our commitment to supporting employees holistically, regardless of where they live and work, reinforces our focus on fostering a resilient, engaged workforce that drives long-term success. Our approach was recognized by FlexJobs.
Our commitment to supporting employees holistically, regardless of location, reinforces our focus on fostering a resilient, engaged workforce that drives long-term success. Recognizing this approach, FlexJobs named ICF among its Top 100 Companies to Watch.
We support these organizations with a variety of technology and program support services. 10 COMPETITIVE STRENGTHS We possess the following key business strengths: We have a highly educated professional staff with deep subject matter knowledge We possess strong intellectual capital that provides us with a deep understanding of policies, processes, and programs across our clients’ markets.
As governments and enterprises face escalating security challenges, we are well equipped to deliver solutions that protect infrastructure, safeguard communities, and enable rapid recovery. 8 COMPETITIVE STRENGTHS We possess the following key business strengths: We have a highly educated professional staff with deep subject matter knowledge We possess strong intellectual capital that provides us with a deep understanding of policies, processes, and programs across our clients’ markets.
Sales and licenses of our intellectual property do not currently comprise a substantial portion of our revenue or profit. We rely on the technology and models, proprietary processes, and other intellectual property we own or have the right to use in our analyses and other work we perform for our clients.
We rely on the technology and models, proprietary processes, and other intellectual property we own or have the right to use in our analyses and other work we perform for our clients. We use these innovative, and often proprietary, software, analytical models, and tools throughout our service offerings.
In general, a client is considered to be a government client if its primary funding is from a government agency or institution. If we are a subcontractor, we classify the revenue based on the nature of the ultimate client receiving the services.
If we are a subcontractor, we classify the revenue based on the nature of the ultimate client receiving the services.
We have designed our human resources programs to enable our high-performing workforce to reach its full potential. We develop our employees to prepare them for critical roles; reward and support employees through pay, benefit, and perquisite programs that we believe are competitive; and evolve and invest in technology, tools, and resources to empower employees to belong, grow, and thrive.
We have designed our human resources programs to enable our workforce of experts to reach their full potential. We develop our employees so they can build our capability for the future; reward and support employees through competitive pay and benefit programs; and evolve and invest in technology, tools, and resources that maximize our impact.
We believe that this acquisition will further enhance our market presence and client footprint. 7 We support federal, state, and local governments in planning, designing, and executing large-scale disaster recovery and mitigation programs across the United States. As extreme weather events become increasingly frequent and severe, we foresee an escalating demand for our services.
Disaster Recovery and Mitigation We support federal, state, and local governments in planning, designing, and executing large‑scale disaster recovery and mitigation programs across the U.S. and its territories. As extreme weather events become more frequent and severe, we expect increasing demand for these services.
By leveraging our multi-disciplinary skills, which range from finance and economics to earth and life sciences, information technology, and program management, we are able to provide a wide range of services that include complex environmental impact assessments, environmental management information systems, air quality assessments, program evaluation, transportation and aviation planning and operational improvement, strategic communications, and regulatory reinvention.
Our multi‑disciplinary capabilities in finance and economics, earth and life sciences, IT, and program management enable us to deliver services such as environmental impact assessments, environmental management information systems, air quality assessments, program evaluation, transportation and aviation planning and operational improvement, strategic communications, and regulatory modernization.
To increase enterprise-wide access to industry-leading content, we also partnered with best-in-class providers like LinkedIn Learning, Udemy, Workday, and Microsoft for digital learning in self-paced programs. For managers and leaders, we offer programs that support their development and ensure they have the tools and resources they need to be effective, whether they are at an emerging, experienced, or senior level.
For managers and leaders, we offer programs that support their development and ensure they have the tools and resources they need to be effective, whether they are at an emerging, experienced, or senior level leaders. In 2025, we introduced a new enterprise-wide approach to continue building our pipeline of tomorrow’s leaders.
In addition, our anytime feedback process and recognition program empower employees to receive and give feedback or kudos from and to peers, managers, and leaders at any point during the year. In 2024, all eligible employees also received a performance appraisal with feedback from their manager on their 2023 performance.
In addition, our anytime feedback process and recognition program empower employees to give and receive feedback from their peers, managers, and leaders at any point during the year. 16 Year on year, we experience voluntary employee turnover that is consistently below industry benchmarks.
These elements of our strategy permeate all of the Company and influence our day-to-day decisions. We believe that, collectively, they support the overall long-term growth of the organization. 14 CLIENT AND CONTRACT MIX Government clients (including U.S. federal, state and local, as well as international) accounted for approximately 75%, 76%, and 76% of our 2024, 2023, and 2022 revenue, respectively.
These elements of our strategy permeate throughout the Company and influence our day-to-day decisions. We believe that, collectively, they support the overall long-term growth of the organization. 12 CLIENT AND CONTRACT MIX Our clients span a broad range of civilian and defense agencies and commercial enterprises.
We believe our culture and values help us attract a wide pool of talent and perspectives so we can select the most capable people to support a workplace culture that best supports the clients we serve and the constituencies we support. Talent Acquisition, Development, and Retention Successful talent attraction and retention hinges on a healthy and recognizable employer brand.
Since our founding in 1969, we have been a mission-driven company delivering high-impact results that help our clients move forward with confidence. We believe our culture and values help us attract a wide pool of talent, perspectives, and experiences so we can select the most capable people to support a workplace culture that best serves our clients.
Our shared values emphasize integrity and collaboration as we embrace our personal passions and differences to challenge assumptions and deliver outcomes that we and our clients can be proud of. Grounded in data-driven insights, we foster a high-performance environment that values creativity, critical thinking, mutual respect and support, and a multidisciplinary approach.
We are a vibrant community of experts, united by our drive to increase the value we provide and make a positive impact. Grounded in data-driven insights and our shared purpose, we foster a high-performance environment that values creativity, agility, critical thinking, mutual respect and support, and a multidisciplinary approach.
We provide services to our diverse client base that deliver value throughout the entire life cycle of a policy, program, project, or initiative. Our primary services include: • Advisory Services. We research critical policy, industry, and stakeholder issues, trends, and behavior.
Our services primarily support clients that operate in these key markets: • Energy, Environment, Infrastructure, and Disaster Recovery; • Health and Social Programs; and • Security and Other Civilian & Commercial. We provide services to our diverse client base that deliver value throughout the entire life cycle of a policy, program, project, or initiative.
HUMAN CAPITAL Human Capital Management As a global advisory and technology services provider, our human capital strategy is vital to our business. Our business depends substantially on attracting, developing, and retaining a highly qualified workforce that provides excellent, effective, and efficient performance reflecting the vast communities we serve.
HUMAN CAPITAL Human Capital Management Our human capital strategy is fundamental to our success as a global solutions and technology provider. To that end, we put immense effort into attracting, developing, and retaining highly qualified individuals who deliver innovation, efficiency, and impact to the clients and communities we serve.
We have strong, long-standing relationships with clients across a diverse set of markets The long-term relationships we maintain with many of our clients reflect our successful track record of fulfilling our clients’ needs. We have advised the U.S. Environmental Protection Agency (“EPA”), the United States Agency for International Development (“USAID”), and HHS for more than 30 years, the U.S.
We have strong, long-standing relationships with clients across a diverse set of markets The long-term relationships we maintain with many of our clients reflect our successful track record of fulfilling our clients’ needs. We have numerous contacts at various levels within our clients’ organizations, ranging from key decision-makers to functional managers.
We have also been named as one of the best places to work by PRWeek and one of the best places to work in Washington, D.C., by Built In, a community for startups and tech companies. 18 Once a new hire joins us, we set them up for long-term success with a robust onboarding program, including sessions focused on our purpose and values and required compliance training.
Once a new hire joins us, we engage with the employee to enable them for long-term success with a robust onboarding program, including sessions focused on our purpose and values, well-being and benefits offerings, and growth opportunities.
To this end, on December 31, 2024, we acquired Applied Energy Group (“AEG”), a leading energy technology and advisory services company with over 100 utility management and demand side energy experts. AEG provides a suite of integrated technology and advisory solutions to electric and gas utilities, state and local governments, and state energy offices nationwide.
AEG provides a suite of integrated technology and advisory solutions to electric and gas utilities, state and local governments, and state energy offices nationwide and has enhanced our market presence and client footprint.
We believe that a confluence of factors will drive an increased need for public and private focus on these areas, including, among others: • Expanded healthcare services; • Rising healthcare expenditures, which require the evaluation of the effectiveness and efficiency of current and new programs; • Rampant substance abuse and widespread social and health impacts of the opioid abuse epidemic; • The need to digitally transform and modernize the technology infrastructure underpinning government operations, including via the use of machine learning and AI technologies; • The need for greater transparency and accountability of public sector programs; • A continued high need for social support systems, in part due to an aging population, and the interrelated nature of health, housing, transportation, employment, and other social issues; and • A changing regulatory environment.
A convergence of factors is driving unprecedented demand for innovation and accountability in these areas, including: • Expanded healthcare services and rising expenditures requiring rigorous evaluation of program effectiveness; • Substance abuse crises, including the widespread impact of the opioid epidemic; • The urgent need to digitally transform government operations through advanced technologies such as AI and machine learning; • Increasing requirements for transparency and accountability in public sector programs; • Growing demand for social support systems, fueled by an aging population and interconnected issues across health, housing, transportation, energy, and employment; and • A rapidly evolving regulatory environment. 7 We are well positioned to help clients design, implement, and manage effective programs at international, national, regional, and local levels.
As of December 31, 2024, we employed over 9,300 people, 86% of whom were employed full-time. The results of our most recent employee engagement survey reflect a strong culture that encourages our employees to stay and grow a career with us. We are proud that a large number of our employees believe their values align with our values.
As of December 31, 2025, we employed approximately 8,400 employees, 83% of whom were employed full-time. The results of our continuous employee listening surveys consistently reflect a strong level of engagement that empowers our employees to thrive in their work, in our culture, and in their lives.
We help our clients conceive, develop, implement, and improve solutions that address complex business, natural resource, social, technological, and public safety issues. Our services primarily support clients that operate in three key markets: • Energy, Environment, Infrastructure, and Disaster Recovery; • Health and Social Programs; and • Security and Other Civilian & Commercial.
Our government clients include U.S. federal agencies, state and local governments, as well as international governments. Our commercial clients include those that are inside and outside of the U.S. We help our clients conceive, develop, implement, and improve solutions that address complex business, natural resource, social, technological, and public safety issues.
Our mission is to assist these communities in overcoming disaster challenges, building long-term resilience, and securing the necessary recovery and mitigation funding to ensure their future stability and growth. We also have decades of experience in designing, evaluating, and implementing environmental policies and environmental compliance programs for energy, transportation (including aviation), and other infrastructure projects.
We also anticipate growth in our utility program design and delivery business, including energy efficiency programs, electrification and decarbonization initiatives, resiliency planning, environmental management, and IT integration. 6 Environmental, Transportation, and Infrastructure We have decades of experience designing, evaluating, and implementing environmental policies and compliance programs for energy, transportation (including aviation), and infrastructure projects.
MARKET OPPORTUNITY, SERVICES, AND SOLUTIONS Complex, long-term market factors, which include geopolitical, technological, environmental, and demographic trends, are changing the way people live and their priorities, and the way government and industry operate and interact. We are all affected not only by the increasing breadth and invasiveness of change, but also by its velocity.
MARKET OPPORTUNITY, SERVICES, AND SOLUTIONS Complex, long-term market factors, which include geopolitical, technological, environmental, and demographic trends, are accelerating change and reshaping priorities for government and industry. These dynamics, combined with increasing demands for efficiency, transparency, and accountability, are driving growth in advisory and technology-enabled services.
With over 25 years of experience in disaster management, we have worked on the ground after the most impactful disaster events in US history, including Hurricane Katrina, Hurricane Rita, Superstorm Sandy, and Hurricanes Harvey, Irma, Maria, Helene, and Milton. Our extensive expertise enables us to address a broad spectrum of hazards, ranging from hurricanes and flooding to tornadoes and wildfires.
Our work spans multiple years and includes recovery and housing assistance, environmental and infrastructure solutions, and mitigation planning. With over 25 years of experience, we have provided on-the-ground support following major disasters, including Hurricanes Katrina, Rita, Harvey, Irma, Maria, Helene, and Milton, as well as Superstorm Sandy.
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We measure and evaluate results and their impact and, based on those assessments, provide strategic planning and advice to our clients on how to navigate societal, market, business, communication, and technology challenges. • Program Implementation Services. We identify, define, and implement policies, plans, programs, and business tools that make our clients’ organizations more effective and efficient.
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We empower organizations to thrive in a rapidly changing world through five integrated service areas: Advisory Services, Program Implementation, Analytics Services, Digital Services, and Engagement Services. Our Advisory Services deliver strategic insights that help leaders anticipate trends and make confident decisions. Through Program Implementation, we turn strategy into action with tailored policies, programs, and tools that drive efficiency and impact.
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Our comprehensive, end-to-end solutions are implemented through a wide range of standard and customized methodologies designed to match our clients’ business context. • Analytics Services. We conduct survey research and collect and analyze wide varieties and large volumes of data to understand critical issues and options for our clients and provide actionable business intelligence.
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Our Analytics Services transform data into intelligence, leveraging advanced analytics and artificial intelligence (“AI”) to uncover opportunities and more informed decisions. With Digital Services, we design and secure innovative technology solutions that optimize performance, modernize information technology (“IT”) systems, and protect against evolving threats.
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We provide information and data management solutions that allow for integrated, purpose-driven data usage, including the client-specific utilization of Artificial Intelligence (“AI”). • Digital Services. We design, develop, and implement cutting-edge technology systems and business tools that are key to our clients’ mission or business performance, and include solutions to optimize the customer and citizen experience for our clients.
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Finally, our Engagement Services connect organizations with their audiences through compelling communications, branding, and digital experiences that inspire trust and action. Together, we provide end-to-end solutions that accelerate growth, strengthen resilience, and deliver measurable results. We report operating results and financial data in one operating and reportable segment.
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We provide cybersecurity solutions that support the full range of cybersecurity missions and protect evolving information technology (“IT”) infrastructures in the face of relentless threats and modernize IT systems core to our clients’ operations. We assist our clients in the application of AI to support their missions/businesses and to streamline their operations. • Engagement Services.
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We see significant opportunities in areas such as analytics, digital services, and strategic communications, as clients seek solutions that integrate domain expertise with innovative technologies such as AI, cloud-native platforms, and low-code/no-code tools.
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We inform and engage our clients’ constituents, customers, and employees to drive behavior and outcomes through public relations, branding and marketing, multichannel and strategic communications, and reputation issues management. Our engagement services frequently rely on our digital design and implementation skills, such as web and app development. We perform work for both government and commercial clients.
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Additionally, energy independence and prevention of fraud, waste, and abuse in our healthcare delivery systems, disaster recovery, and homeland security will continue to create demand for our services. Our proven experience in disaster relief and infrastructure recovery positions us well to support federal, state, and local agencies in addressing critical societal challenges.
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Our government clients include U.S. federal agencies, state and local governments, as well as governments outside the U.S. Our commercial clients include both U.S. and international clients. Our clients utilize our services because we offer a combination of deep subject matter expertise, technical solutions, and institutional experience which contribute to our solutions being beneficial.
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As the federal government prioritizes efficiency and modernization, our agile, scalable, and cost-effective technology solutions deliver measurable outcomes aligned with commercial best practices. Future success will depend on further strengthening client relationships, pursuing larger engagements across full program lifecycles, and executing strategic acquisitions to expand capabilities and geographic reach.
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We believe that our domain expertise and the program knowledge developed from our advisory engagements further position us to provide our full suite of services. 5 We report operating results and financial data in one operating and reportable segment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs described elsewhere in this Form 10-K, we have three principal types of contracts with our clients: fixed-price, time-and-materials and cost-based. We derived 46%, 45%, and 45% of our total revenue from fixed-price contracts in 2024, 2023, and 2022, respectively.
Biggest changePROFITABILITY RISKS Our inability to accurately estimate or control our costs on our fixed price contracts may result in a decrease of our operating margins, and in some cases result in contract losses. As described elsewhere in this Form 10-K, we have three principal types of contracts with our clients: fixed-price, time-and-materials, and cost-based.
As a federal government contractor, we face a heightened risk of a security breach or disruption with respect to personally identifiable, controlled unclassified information, classified, or otherwise protected data resulting from an attack by computer hackers, foreign governments, and/or cyber terrorists.
As a federal government contractor, we face a heightened risk of a security breach or disruption with respect to personally identifiable, controlled unclassified information, classified information, or otherwise protected data resulting from an attack by computer hackers, foreign governments, and/or cyber terrorists.
Accordingly, we expect that, due to changing government budgeting and spending priorities, including necessary balancing of defense spending with civilian agency spending, and related disputes among Congress and the Administration, some of our government clients in the future may elect to terminate or issue stop-work orders with respect to contracts or programs for which we perform services, delay payments due to us, eventually fail to pay what they owe us, and/or delay certain programs and projects.
We expect that, due to changing government budgeting and spending priorities, including necessary balancing of defense spending with civilian agency spending, and related disputes among Congress and the Administration, some of our government clients in the future may elect to terminate or issue stop-work orders with respect to our contracts or programs for which we perform services, delay payments due to us, eventually fail to pay what they owe us, and/or delay certain programs and projects.
Particularly as we continue to grow our commercial business, we anticipate that conflicts of interest and business conflicts will pose a greater risk. We derive significant revenue and profit from contracts awarded through a competitive bidding process, which can impose substantial costs on us, and we will lose revenue and profit if we fail to compete effectively.
Particularly as we continue to grow our commercial business, we anticipate that conflicts of interest and business conflicts will pose a greater risk. 20 We derive significant revenue and profit from contracts awarded through a competitive bidding process, which can impose substantial costs on us, and we will lose revenue and profit if we fail to compete effectively.
These risks relate to, among other things, the demand for our services, the availability of our staffing and business partners, a possible slowdown of client decision-making as to our services, a significant deterioration of global supply chains and other business conditions, and a possible reprioritization of spending by our clients. ITEM 1B. UNRESOLV ED STAFF COMMENTS None.
These risks relate to, among other things, the demand for our services, the availability of our staffing and business partners, a possible slowdown of client decision-making as to our services, a significant deterioration of global supply chains and other business conditions, and a possible reprioritization of spending by our clients. ITEM 1B. UNRESOLV ED STAFF COMMENTS None. 30
Civil False Claims Act and the False Statements Act; and • U.S. laws, rules, and regulations restricting (i) the use and dissemination of information classified for national security purposes, (ii) the exportation of specified products, technologies, and technical data, and (iii) the use and dissemination of sensitive but unclassified data. 29 Any failure to comply with applicable federal, and/or state and local government laws, rules, and regulations could subject us to civil and criminal penalties and administrative sanctions, including termination of contracts, repayment of amounts already received under contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with federal and/or state and local government agencies and departments, any of which could adversely affect our reputation, our revenue, our operating results, and/or the value of our stock.
Civil False Claims Act and the False Statements Act; and • U.S. laws, rules, and regulations restricting (i) the use and dissemination of information classified for national security purposes, (ii) the exportation of specified products, technologies, and technical data, and (iii) the use and dissemination of sensitive but unclassified data. 28 Any failure to comply with applicable federal, and/or state and local government laws, rules, and regulations could subject us to civil and criminal penalties and administrative sanctions, including termination of contracts, repayment of amounts already received under contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with federal and/or state and local government agencies and departments, any of which could adversely affect our reputation, our revenue, our operating results, and/or the value of our stock.
Because of the following factors affecting our business, operations, financial position or future financial performance, reputation, and/or value of our stock, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. 19 GOVERNMENT BUDGETING AND SPENDING PRIORITIES RISKS The failure of Congress to approve appropriations bills in a timely manner for the federal government agencies and departments we support, or the failure of the Administration and Congress to reach an agreement on fiscal issues, could delay and reduce spending, cause us to lose revenue and profit, and affect our cash flow.
Because of the following factors affecting our business, operations, financial position or future financial performance, reputation, and/or value of our stock, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. 17 GOVERNMENT BUDGETING AND SPENDING PRIORITIES RISKS The failure of Congress to approve appropriations bills in a timely manner for the federal government agencies and departments we support, or the failure of the Administration and Congress to reach an agreement on fiscal issues, could delay and reduce spending, cause us to lose revenue and profit, and affect our cash flow.
Even if we prevail in defending the contract award, the resulting delay in the startup and funding of the work under these contracts may adversely affect our operating results. 24 Moreover, in order to protect our competitive position, we may protest the contract awards of our competitors.
Even if we prevail in defending the contract award, the resulting delay in the startup and funding of the work under these contracts may adversely affect our operating results. Moreover, in order to protect our competitive position, we may protest the contract awards of our competitors.
Our contracts may contain provisions that are unfavorable to us and permit our clients to, among other things, terminate our contracts partially or completely at any time prior to completion. Our contracts may contain provisions that allow our clients to terminate or modify these contracts at their convenience on short notice.
Our contracts may contain provisions that are unfavorable to us and permit our clients to, among other things, terminate our contracts partially or completely at any time prior to completion. Certain contracts contain provisions that allow our clients to terminate or modify these contracts at their convenience on short notice.
We have to date determined that goodwill has not been impaired; however, future events or changes in circumstances that result in an impairment of goodwill or intangible assets would have a negative impact on our profitability and operating results. 27 RISKS RELATED TO OUR CORPORATE AND CAPITAL STRUCTURE Provisions of our charter documents and Delaware law may prevent or deter potential acquisition bids to acquire us and other actions that stockholders may consider favorable, and the market price of our common stock may be lower as a result.
We have to date determined that goodwill has not been impaired; however, future events or changes in circumstances that result in an impairment of goodwill or intangible assets would have a negative impact on our profitability and operating results. 26 RISKS RELATED TO OUR CORPORATE AND CAPITAL STRUCTURE Provisions of our charter documents and Delaware law may prevent or deter potential acquisition bids to acquire us and other actions that stockholders may consider favorable, and the market price of our common stock may be lower as a result.
The budgets of many of our state and local government clients are also subject to similar divisions, risks, and uncertainties as are inherent in the federal budget process. Government spending priorities may change in a manner adverse to our business.
The budgets of many of our state and local government clients are also subject to similar divisions, risks, and uncertainties as are inherent in the federal budget process. 18 Government spending priorities may change in a manner adverse to our business.
This reliance on commercial clients presents certain risks and challenges. For example, our commercial work is heavily concentrated in industries which can be cyclical, such as: energy, air transportation, and environmental services.
This reliance on commercial clients presents certain risks and challenges. For example, our commercial work is heavily concentrated in industries which can be cyclical, such as air transportation and environmental services.
However, these contract vehicles require us to compete for each delivery order and task order, rather than having a more predictable stream of activity during the term of a multi-year contract. In addition, we may spend considerable cost and managerial time and effort to prepare bids and proposals for contracts, delivery orders or task orders that we may not win.
However, these contract vehicles require us to compete for each delivery order and task order, rather than having a more predictable stream of activity during the term of a multi-year contract. In addition, we may spend considerable cost and managerial time and effort preparing bids and proposals for contracts, delivery orders or task orders that we may not win.
Our property and business interruption insurance may be inadequate to compensate us for all losses that may occur as a result of any system or operational failure or disruption and, as a result, revenue, profits, and operating results could be adversely affected. 26 We depend on our intellectual property and our failure to protect it could harm our competitive position.
Our property and business interruption insurance may be inadequate to compensate us for all losses that may occur as a result of any system or operational failure or disruption and, as a result, revenue, profits, and operating results could be adversely affected. 25 We depend on our intellectual property and our failure to protect it could harm our competitive position.
In any such event, we likely would have no right to seek lost fees or other damages. In addition, certain contracts with international government clients may have more severe and/or different contract clauses than what we are accustomed to with federal and state and local government clients, such as penalties for any delay in performance.
In any such event, we would have no right to seek lost fees or other damages. Certain contracts with international government clients may have more severe and/or different contract clauses than what we are accustomed to with federal and state and local government clients, such as penalties for any delay in performance.
Should any of these or other unforeseen consequences arise, they could have an adverse effect on our business, financial condition, results of operations, future business opportunities and/or ability to satisfy our obligations under our debt. 28 We may not pay special or regular dividends on our stock in the future.
Should any of these or other unforeseen consequences arise, they could have an adverse effect on our business, financial condition, results of operations, future business opportunities and/or ability to satisfy our obligations under our debt. 27 We may not pay special or regular dividends on our stock in the future.
If a client terminates one of our contracts for convenience, we will only bill the client for work completed prior to the termination, plus any commitments and settlement expenses that we may claim and the client agrees to pay, but not for any work not yet performed.
When a client terminates one of our contracts for convenience, we will only bill the client for work completed prior to the termination, plus any commitments and settlement expenses that we may claim and the client agrees to pay, but not for any work not yet performed.
Authorization of dividends by the Board is subject to adherence/compliance with our Credit Facility. The Board may, upon taking into consideration any of the foregoing or other relevant factors, decide not to declare dividends in the future.
Authorization of dividends by the Board is subject to adherence/compliance with our Credit Facility. The Board may, upon taking into consideration any of the foregoing or other relevant factors, decide to reduce the amount of, or not declare, dividends in the future.
Certain lines of business of our commercial work depend on certain sectors of the global economy that are highly cyclical, which can lead to substantial variations in our revenue and profit from period to period. Our commercial clients, which include clients outside the U.S., generated approximately 25%, 24%, and 24% of our revenue in 2024, 2023, and 2022, respectively.
Certain lines of business of our commercial work depend on certain sectors of the global economy that are highly cyclical, which can lead to substantial variations in our revenue and profit from period to period. Our commercial clients, which include clients outside the U.S., generated approximately 33%, 25%, and 24% of our revenue in 2025, 2024, and 2023, respectively.
Failures by Congress and the Administration to enact appropriations bills in a timely manner can force federal government agencies and departments to shut down or to cancel, change, or delay the implementation of existing or new initiatives. Such events may result in the loss of revenue and profit, or the deferral of revenue and profit to later periods.
Failures by Congress and the Administration to enact appropriations bills in a timely manner can force federal government agencies and departments to shut down or to cancel, change, or delay the implementation of existing or new initiatives, which may result in the loss of revenue and profit, or the deferral of revenue and profit to later periods.
Any failure of these third-party systems, which are outside of our control but still impact us, could have similar adverse effects. 25 Impermissible use, misuse, or an improper disclosure of personal data or confidential information and breaches of, or disruptions to, our information technology systems or those of our third-party providers, could adversely affect our business and could result in liability and harm to our reputation.
Any failure of these third-party systems, which are outside of our control but still impact us, could have similar adverse effects. 24 Impermissible use, misuse, or an improper disclosure of personal data or confidential information and breaches of, or disruptions to, our IT systems or those of our third-party providers, could adversely affect our business and could result in liability and harm to our reputation.
Budget compromises that may be needed for future fiscal years may continue to be extraordinarily difficult given the complicated grassroots political environment, a closely divided Congress, an increasing federal deficit and debt load, and a challenged economy.
Budget compromises that may be needed for future fiscal years may continue to be extraordinarily difficult given the complicated political environment, a closely divided Congress, an increasing federal deficit, and debt load.
All of our acquisitions have involved purchase prices in excess of tangible asset values net of liabilities assumed, resulting in the creation of an increased amount of goodwill and other intangible assets. As of December 31, 2024, goodwill and purchased intangibles accounted for approximately 60% and 4%, respectively, of our total assets.
All of our acquisitions have involved purchase prices in excess of tangible asset values net of liabilities assumed, resulting in the creation of an increased amount of goodwill and other intangible assets. As of December 31, 2025, goodwill and purchased intangibles accounted for approximately 61% and 4%, respectively, of our total assets.
Federal government audits have been completed on our incurred contract costs only through 2019 for our NIH-cognizant indirect rates and through 2015 for our USAID-cognizant indirect rates, but audits for costs incurred on work performed since then have not yet been completed.
Federal government audits have been completed on our incurred contract costs only through 2022 and 2023 for our NIH-cognizant indirect rates and through 2015 for our USAID-cognizant indirect rates, but audits for costs incurred on work performed since then have not yet been completed.
In addition, federal government contracts rely on Congressional appropriation of funding, which is typically provided on an incremental basis at any point during the term of federal government contracts, and all or some of the work to be performed under a contract may require future appropriations by Congress and the subsequent allocation of funding by the procuring agency or department to the contract.
In addition, federal government contracts rely on Congressional appropriation of funding, which is typically provided on an incremental basis at any point during the term of federal government contracts, and all or some of the work to be performed under a contract may require future appropriations by Congress and the subsequent allocation of funding by the procuring agency or department to the contract. 21 Protests of contracts continue to be common in our industry.
Any interruption in our operations or any systems failures, including, but not limited to: (i) the inability of our staff to perform their work in a timely fashion, whether caused by limited access to and/or closure of our and/or our clients’ offices or otherwise; (ii) the failure of network, software, and/or hardware systems; and (iii) other interruptions and failures, whether caused by us, a third-party service provider, unauthorized intruders/ hackers, computer viruses, natural disasters, power shortages, terrorist attacks, or otherwise, could cause loss of data and interruptions or delays in our business or that of our clients, or both.
Any interruption in our operations or any systems failures, including, but not limited to: (i) the inability of our staff to perform their work in a timely fashion, whether caused by limited access to and/or closure of our and/or our clients’ offices or otherwise; (ii) the failure of network, software, and/or hardware systems; and (iii) other interruptions and failures, whether caused by us, a third-party service provider, unauthorized intruders/ hackers, computer viruses, the use of emerging technologies such as AI, natural disasters or extreme weather events, power shortages, terrorist attacks, or otherwise, could cause loss of data and interruptions or delays in our business or that of our clients, or both.
As of December 31, 2024, we had an aggregate of $411.7 million of outstanding indebtedness (net of unamortized debt issuance costs) that will mature on May 6, 2027. Subject to the limits contained in the agreements governing our Credit Facility, we may incur additional debt in the future to fund our ongoing operations as well as acquisitions.
As of December 31, 2025, we had an aggregate of $401.4 million of outstanding indebtedness (net of unamortized debt issuance costs) that will mature on May 6, 2027. Subject to the limits contained in the agreements governing our Credit Facility, we may incur additional debt in the future to fund our ongoing operations as well as acquisitions.
Our international operations are subject to risks associated with operating in, and selling to and in, countries other than the U.S., that could, directly or indirectly, adversely affect our international and domestic operations and our overall revenue, profit, and operating results including, but not limited to: • Compliance with the laws, rules, regulations, policies, legal standards, and enforcement mechanisms of the U.S. and the other countries in which we operate, including bribery and anti-corruption laws, economic sanctions, trade restrictions, local tax and income laws, and local labor and employment laws, which are sometimes inconsistent; • Restrictions on the ability to repatriate profits to the U.S. or otherwise move funds; • Potential personal injury to personnel who may be exposed to military conflicts and other hostile situations in foreign countries; • Expropriation and nationalization of our assets or those of our subcontractors, and other inabilities to protect our property rights; and/or • Difficulties in managing and staffing such operations, including obtaining work permits or visas, identifying qualified local employees, operating according to different local labor laws and regulations, dealing with different local business cultures and practices, and collecting contract receivables.
Our international operations are subject to risks associated with operating in, and selling to and in, countries other than the U.S., that could, directly or indirectly, adversely affect our international and domestic operations and our overall revenue, profit, and operating results including, but not limited to: • Compliance with the laws, rules, regulations, policies, legal standards, and enforcement mechanisms of the U.S. and the other countries in which we operate, including bribery and anti-corruption laws, economic sanctions, trade restrictions, local tax and income laws, and local labor and employment laws, which are sometimes inconsistent; • Restrictions on the ability to repatriate profits to the U.S. or otherwise move funds; • Potential personal injury to personnel who may be exposed to military conflicts and other hostile situations in foreign countries; • Expropriation and nationalization of our assets or those of our subcontractors, and other inabilities to protect our property rights; and/or • Difficulties in managing and staffing such operations, including obtaining work permits or visas, identifying qualified local employees, operating according to different local labor laws and regulations, dealing with different local business cultures and practices, and collecting contract receivables. 29 In addition, because of our work with international clients, certain of our revenues and costs are denominated in other currencies, then translated to U.S. dollars for financial reporting purposes.
The delayed funding or shutdown of many parts of the federal government, including agencies, departments, programs, and projects we support, could have a substantial negative effect on our revenue, profit, and cash flows.
We have experienced delayed funding or shutdown of many parts of the federal government, including agencies, departments, programs, and projects we support, and such events in the future could have a substantial negative effect on our revenue, profit, and cash flows.
We derived approximately 54%, 55%, and 55% of our revenue in 2024, 2023, and 2022, respectively, from contracts with federal government clients, and approximately 21%, 21%, and 21% of our revenue from contracts with state and local governments and international governments in 2024, 2023, and 2022, respectively.
We derived approximately 43%, 54%, and 55% of our revenue in 2025, 2024, and 2023, respectively, from contracts with federal government clients, and approximately 24%, 21%, and 21% of our revenue from contracts with state and local governments and international governments in 2025, 2024, and 2023, respectively.
Protests of contracts continue to be common in our industry. We do not include contract awards that are subject to a pending protest in our calculation of backlog. If a contract previously included in backlog becomes the subject of a protest, we would adjust backlog to remove that amount and reassess following resolution of the protest.
We do not include contract awards that are subject to a pending protest in our calculation of backlog. If a contract previously included in backlog becomes the subject of a protest, we would adjust backlog to remove that amount and reassess following resolution of the protest.
In addition, we extend our services to new clients, lines of business, and selected geographic locations, including outside the U.S., and seek out new cross-border opportunities.
In addition, we seek to extend our services to new clients, lines of business, and select geographic locations, including outside the U.S., and capitalize on new cross-border opportunities.
In particular, implementation and improvement services often relate to the development, implementation, and improvement of critical infrastructure or operating systems that our clients may view as “mission critical”.
Our expansion of services may result in decisions that could harm our profit and operating results. In particular, implementation and improvement services often relate to the development, implementation, and improvement of critical infrastructure or operating systems that our clients may view as “mission critical”.
Any factor that diminishes client relationships and/or professional reputation with federal, state and local, and international government clients, as well as commercial clients, could make it substantially more difficult for us to compete successfully for new engagements and qualified employees.
Any factor that diminishes client relationships and/or professional reputation with federal, state and local, and international government clients, as well as commercial clients, could make it substantially more difficult for us to compete successfully for new engagements and qualified employees. To the extent our client relationships and/or professional reputation deteriorate, our revenue and operating results could be adversely affected.
We face a constant risk of cybersecurity threats, whether from deliberate attacks or unintentional events, including computer viruses, attacks by computer hackers, malicious code, cyber and phishing attacks, and other electronic security breaches such as unauthorized access to our and our clients’ systems.
We face a constant risk of cybersecurity threats, whether from (i) deliberate attacks or unintentional events, including computer viruses, attacks by computer hackers, malicious code, cyber and phishing attacks, (ii) other electronic security breaches such as unauthorized access to our and our clients’ systems, and (iii) emerging technologies, including AI, which pose increasingly harder-to-detect threats.
In addition, the federal government and other governments with which we do business may change their procurement practices or requirements, or adopt new contracting laws, rules, or regulations that could be costly to satisfy or that could impair our ability to obtain new contracts and reduce our revenue and profit, such as curtailing the use of services firms or increasing the use of firms with a “preferred status,” such as small businesses.
In addition, the federal government and other governments with which we do business may change their procurement practices or requirements, or adopt new contracting laws, rules, or regulations that could (i) be costly to satisfy, (ii) impair our ability to obtain new contracts and reduce our revenue and profit (such as by curtailing the use of services firms or increasing the use of firms with a “preferred status,” such as small businesses), or (iii) impose restrictions or prohibitions on us which may impact our business or our ability to return capital to our shareholders (such as through dividends, share repurchases, or other similar actions).
In addition, increased government deficits and debt, both domestic and international, may lead to reduced spending by agencies and departments on projects or programs we support. 20 Risks Related to THE Changing Business ENVIRONMENT IN WHICH WE OPERATE As we develop new services, clients and practices, enter new lines of business, and focus more of our business on providing a full range of client solutions, the additional demands that such growth places on our management and staff, information and operational systems, and cash flow may adversely affect the quality of our work, our operating margins, and our operating results.
Risks Related to THE Changing Business ENVIRONMENT IN WHICH WE OPERATE As we develop new services, clients, and practices, enter new lines of business, and focus more of our business on providing a full range of client solutions, the additional demands that such growth places on our management and staff, information and operational systems, and cash flow may adversely affect the quality of our work, our operating margins, and our operating results.
The war has impacted member states of the E.U. in a variety of ways, including through their provision of weapons, humanitarian supplies, and substantial financial support to Ukraine, and their absorption of millions of Ukrainian refugees.
Presently, there is active armed conflict across the territory of Ukraine as a result of a Russian invasion. The war has impacted member states of the E.U. in a variety of ways, including through their provision of weapons, humanitarian supplies, and substantial financial support to Ukraine, and their absorption of millions of Ukrainian refugees.
Moreover, our revenue, profit and operating results could be adversely affected if any prime contractor or teammate does not pay our invoices in a timely fashion, chooses to offer products or services of the type that we provide, teams with other companies to provide such products or services, or otherwise reduces its reliance upon us for such products or services. 23 PROFITABILITY RISKS Our inability to accurately estimate or control our costs on our fixed price contracts may result in a decrease of our operating margins, and in some cases result in contract losses.
Moreover, our revenue, profit, and operating results could be adversely affected if any prime contractor or teammate does not pay our invoices in a timely fashion, chooses to offer products or services of the type that we provide, teams with other companies to provide such products or services, or otherwise reduces its reliance upon us for such products or services.
To the extent our client relationships and/or professional reputation deteriorate, our revenue and operating results could be adversely affected. 21 The diversity of the services we provide, and the clients we serve, may create actual, potential, and perceived conflicts of interest and business conflicts that limit our growth and could lead to potential liabilities for us.
The diversity of the services we provide, and the clients we serve, may create actual, potential, and perceived conflicts of interest and business conflicts that limit our growth and could lead to potential liabilities for us.
There may also be changes in the manner in which the GSA approaches procurement under the various GSA Schedule contract vehicles and other IDIQ contracts that may impact our ability to pursue and obtain awards of new or recompete opportunities. 22 We may not receive revenue corresponding to the full amount of our backlog, or may receive it later than we expect, which could adversely affect our revenue and operating results.
There may also be changes in the manner in which the GSA approaches procurement under the various GSA Schedule contract vehicles and other IDIQ contracts that may impact our ability to pursue and obtain awards of new or recompete opportunities.
The 2018 California Consumer Privacy Act (“CCPA”), which went into effect January 2020, imposes similar requirements. New privacy laws in California, Colorado, Virginia, and other states took effect in 2023, with others likely to follow. Several privacy bills have also been introduced in Congress.
The 2018 California Consumer Privacy Act (“CCPA”), which went into effect January 2020, imposes similar requirements. Over the last several years, many states have enacted new privacy laws, including Delaware, New Jersey, Maryland, New Hampshire, Tennessee, Minnesota, California, Colorado, and Virginia. More are likely to follow. Several privacy bills have also been introduced in Congress.
The percentage of work we perform on a fixed-price basis may increase in the future based on changes to the procurement approach of our clients.
We derived 50%, 46%, and 45% of our total revenue from fixed-price contracts in 2025, 2024, and 2023, respectively. The percentage of work we perform on a fixed-price basis may increase in the future based on changes to the procurement approach of our clients.
Revenue recognition on fixed-price contracts requires us to make cost and scheduling estimates based on a number of assumptions, including assumptions about availability of labor, equipment, materials, change in contractual scope, and future economic conditions, among others.
Under fixed-price contracts, we receive a fixed price irrespective of the actual costs we incur and, consequently, we realize a profit on fixed-price contracts only if we can control our costs and prevent cost overruns while meeting our contractual obligations. 22 Revenue recognition on fixed-price contracts requires us to make cost and scheduling estimates based on a number of assumptions, including assumptions about availability of labor, equipment, materials, change in contractual scope, and future economic conditions, among others.
Therefore, even if we do grow, the demands on our people and systems, controls, compliance efforts, policies, and procedures may adversely affect the quality of our work, our operating margins, and our operating results, at least in the short-term, and perhaps in the long-term.
Therefore, even if we do grow, the demands on our people and systems, controls, compliance efforts, policies, and procedures may adversely affect the quality of our work, our operating margins, and our operating results, at least in the short-term, and perhaps in the long-term. 19 Efforts involving a different focus, new services, new clients, new practice areas, new lines of business, and increasing internationalization include risks associated with our inexperience and competition from mature participants in those areas.
The calculation of backlog is conditioned on numerous uncertainties and estimates, and we may, in fact, fail to receive the amounts we have included in our backlog.
We may not receive revenue corresponding to the full amount of our backlog, or may receive it later than we expect, which could adversely affect our revenue and operating results. The calculation of backlog is conditioned on numerous uncertainties and estimates, and we may, in fact, fail to receive the amounts we have included in our backlog.
COMPLIANCE RISKS We are subject to various routine and non-routine governmental and other reviews, audits, and investigations and unfavorable results could force us to adjust previously reported operating results, affect future operating results, and subject us to a variety of penalties and sanctions.
This process takes the time and energy of our executives and employees, is likely to divert management’s attention from other important matters, and could cause us to incur additional legal and consultant costs. 23 COMPLIANCE RISKS We are subject to various routine and non-routine governmental and other reviews, audits, and investigations and unfavorable results could force us to adjust previously reported operating results, affect future operating results, and subject us to a variety of penalties and sanctions.
Expenditures by our federal government clients may be restricted or reduced by Administration or Congressional actions, by action of the Office of Management and Budget, by action of individual agencies or departments, or by other actions from the DOGE advisory commission.
Expenditures by our federal government clients may be restricted or reduced by Administration or Congressional actions, by action of the Office of Management and Budget, or by action of individual agencies or departments. This may include impact to our revenue, profit, and cash flows as a result of changes by or changes in the priorities of the Administration.
This may include impact to our revenue, profit, and cash flows as a result of changes by or changes in the priorities of the Administration. In addition, many state and local governments are not permitted to operate with budget deficits, and nearly all state and local governments face considerable challenges in balancing their budgets.
In addition, many state and local governments are not permitted to operate with budget deficits, and nearly all state and local governments face considerable challenges in balancing their budgets.
Federal, state and local government, and/or international government elections could also affect spending priorities and budgets at all levels of government.
Federal, state and local government, and/or international government elections could also affect spending priorities and budgets at all levels of government. In addition, increased government deficits and debt, both domestic and international, may lead to reduced spending by agencies and departments on projects or programs we support.
We have been the target of cyberattacks in the past and expect to continue to be a target in the future. As these security threats continue to evolve, we may be required to devote additional resources to protect against, prevent, detect, and respond to cybersecurity attacks, system disruptions, and security breaches.
As these security threats continue to evolve, including through the development and use of AI and other advanced machine learning, we may be required to devote additional resources to protect against, prevent, detect, and respond to cybersecurity attacks, system disruptions, and security breaches. Moreover, we also rely in part on third-party software and IT vendors to run our information systems.
If a client were to terminate, decline to exercise options under, or curtail further performance under one or more of our major contracts, our revenue and operating results could be adversely affected.
We have experienced clients terminating contracts on short notices, declining to exercise options under, and/or curtailing further performance under one or more of our major contracts, and additional actions could adversely affect our revenue and operating results.
These hedges may not be successful in reducing our exposure to foreign currency fluctuations and, in fact, the hedges may adversely affect our operating results. 30 Presently, there is active armed conflict across the territory of Ukraine as a result of a Russian invasion.
These hedges may not be successful in reducing our exposure to foreign currency fluctuations and, in fact, the hedges may adversely affect our operating results. Our business operations are also subject to risks related to international trade.
Removed
Efforts involving a different focus, new services, new clients, new practice areas, new lines of business, and increasing internationalization include risks associated with our inexperience and competition from mature participants in those areas. Our expansion of services may result in decisions that could harm our profit and operating results.
Added
Pursuant to the executive orders issued by the Administration and actions by the Department of Government Efficiency (“DOGE”), we received contract terminations and temporary stop-work orders primarily in the first and second quarters of 2025.
Removed
Under fixed-price contracts, we receive a fixed price irrespective of the actual costs we incur and, consequently, we realize a profit on fixed-price contracts only if we can control our costs and prevent cost overruns while meeting our contractual obligations.
Added
In addition, as we deploy AI-enabled solutions (including our proprietary ICF Fathom AI platform) and other technology-based offerings, we may face heightened risks related to performance errors, data rights, evolving regulatory requirements, and increased client scrutiny, any of which could increase costs, delay delivery, result in disputes or liability, and harm our reputation.
Removed
This process takes the time and energy of our executives and employees, is likely to divert management’s attention from other important matters, and could cause us to incur additional legal and consultant costs.
Added
Further, efforts to streamline procurement or reduce spending may cause agencies to delay, reduce, or cancel planned task orders (or shift work to other contract vehicles), increase the use of more price-competitive procurement approaches at the task-order level, or increase compliance and reporting requirements, which could reduce our revenue, compress margins, and increase our costs.
Removed
In addition, non-audit reviews may still be conducted on all of our government contracts, even for periods before 2015.
Added
We have been the target of cyberattacks in the past and expect to continue to be a target in the future.
Removed
Moreover, we also rely in part on third-party software and information technology vendors to run our information systems.
Added
International trade disputes and general tensions arising from recent changes in international trade policies, including the United States’ actual and threatened imposition of new and increased tariffs against the U.K, the E.U., Canada, and other countries and such countries’ responses, have contributed to general economic uncertainty and disruptions to the U.S. and global economies.
Removed
In addition, because of our work with international clients, certain of our revenues and costs are denominated in other currencies, then translated to U.S. dollars for financial reporting purposes.
Added
Tariffs and other trade restrictions could cause our clients to pause spending on discretionary projects, impact global supply chains, exacerbate inflationary pressures, or negatively affect credit markets.
Added
As a result, we may experience increased costs that we may be unable to pass onto our clients, a reduction in the demand for our services, and harm to our pricing leverage and ability to renegotiate long-term contracts, all or any of which may damage our reputation, reduce our profits, or otherwise adversely affect our financial condition.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity Governance and Oversight Our Board, directly or through its committees, is responsible for the oversight of the Company's overall enterprise risk management program, which includes cybersecurity risks. Our Audit Committee regularly reviews and evaluates cybersecurity risks and the procedures and policies implemented by management to identify, manage, and mitigate such risks.
Biggest changeOur Audit Committee regularly reviews and evaluates cybersecurity risks and the procedures and policies implemented by management to identify, manage, and mitigate such risks. Management is responsible for day-to-day assessment and management of cybersecurity risks. Our Chief Information Officer (the “CIO”) and the Chief Information Security Officer (the “CISO”) have primary oversight of material risks from cybersecurity threats.
They have a combined tenure of over three decades with the Company in various progressive management roles in information systems and technology and in formation security. They conduct regular meetings with the Audit Committee and the Board to communicate updates on cybersecurity risks, incidents, and mitigation efforts.
They have a combined tenure of several decades with the Company in various progressive management roles in information systems and technology and in formation security. They conduct regular meetings with the Audit Committee and the Board to communicate updates on cybersecurity risks, incidents, and mitigation efforts.
The primary components of our risk mitigation strategy include: • Security Controls: We maintain a comprehensive set of controls aligned with industry standards such as the National Institute of Standards and Technology (“NIST”) and the International Organization of Standards (“ISO”) 27001 to protect our systems, networks, and data. • Incident Response Plan: We have a well-defined incident response plan that outlines roles, responsibilities, and procedures for handling cybersecurity incidents. • Employee Training and Awareness: We have training programs to ensure that our employees understand their role in maintaining a secure environment and recognize potential threats. • Third-Party Risk Assessment and Management: We assess and manage cybersecurity risks associated with our vendors, partners, and service providers. 31 Our approach to information security follows a defense-in-depth methodology in which security is embedded throughout the system architecture.
The primary components of our risk mitigation strategy include: • Security Controls: We maintain a comprehensive set of controls aligned with industry standards such as the National Institute of Standards and Technology (“NIST”) and the International Organization of Standards (“ISO”) 27001 to protect our systems, networks, and data. • Incident Response Plan: We have a well-defined incident response plan that outlines roles, responsibilities, and procedures for handling cybersecurity incidents. • Employee Training and Awareness: We have training programs to ensure that our employees understand their role in maintaining a secure environment and recognize potential threats. • Third-Party Risk Assessment and Management: We assess and manage cybersecurity risks associated with our vendors, partners, and service providers.
Our Deputy CIO has over 30 years of experience leading implementation of various IT infrastructure and systems, and our CISO has over 20 years of specific cybersecurity experience and is responsible for maintaining compliance with applicable security requirements.
The CIO has over 30 years of professional experience across various engineering, business, and management roles and experience leading implementation of various IT infrastructure and systems. Our CISO has over 20 years of specific cybersecurity experience and is responsible for maintaining compliance with applicable security requirements.
Our approach to accessing protected networks is based on the principle of least privilege. Notwithstanding the vigorous approach we take to cybersecurity, we may not always be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
Notwithstanding the vigorous approach we take to cybersecurity, we may not always be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
The data center is designed to host mission-critical computer systems with fully redundant subsystems and compartmentalized security zones. Our primary data center also undergoes independent assessment on an annual basis. Our computing infrastructures are protected by multiple independent layers of security measures managed by the corporate information security department.
Our critical corporate information systems are maintained in a commercial grade data center with climate controls, fire suppression, redundant power, and several telecommunication options. The data center is designed to host mission-critical computer systems with fully redundant subsystems and compartmentalized security zones. Our primary data center also undergoes independent assessment on an annual basis.
Technical controls rely on proven technologies, such as network-based intrusion detection systems, next generation firewalls with advanced threat detection, secure server networks, demilitarized zones, and endpoint detection and response capabilities. Security techniques, such as encryption at rest and encryption in transit, are used to incorporate relevant practices.
Our approach to information security follows a defense-in-depth methodology in which security is embedded throughout the system architecture. Technical controls rely on proven technologies, such as network-based intrusion detection systems, next generation firewalls with advanced threat detection, secure server networks, demilitarized zones, and endpoint detection and response capabilities.
To date, we have not identified cybersecurity risks, threats, or incidents that have materially affected us or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial conditions.
To date, we have not identified cybersecurity risks, threats, or incidents that have materially affected us or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. 31 Cybersecurity Governance and Oversight Our Board, directly or through its committees, is responsible for the oversight of the Co mpany’s overall enterprise risk management program, which includes cybersecurity risks.
We undergo annual third-party security assessments such as security control compliance reviews, incident response exercises, penetration testing, and red team drills to maintain the effectiveness of the security program. Our critical corporate information systems are maintained in a commercial grade data center with climate controls, fire suppression, redundant power, and several telecommunication options.
Security techniques, such as encryption at rest and encryption in transit, are used to incorporate relevant practices. We undergo annual third-party security assessments such as security control compliance reviews, incident response exercises, penetration testing, and red team drills to maintain the effectiveness of the security program.
Removed
Management is responsible for day-to-day assessment and management of cybersecurity risks. Our current Chief Information Officer (the “CIO”), the Deputy Chief Information Office (the “Deputy CIO”) and the Chief Information Security Officer (the “CISO”) have primary oversight of material risks from cybersecurity threats. The CIO has decades of professional experience across various engineering, business and management roles.
Added
Our computing infrastructures are protected by multiple independent layers of security measures managed by the corporate information security department. Our approach to accessing protected networks is based on the principle of least privilege.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2024, we had leases in place for approximately 920,239 square feet of office space in more than 70 office locations throughout the U.S. and around the world, with various lease terms expiring over the next fourteen years.
Biggest changeAs of December 31, 2025, we had leases in place for approximately 814,808 square feet of office space in more than 60 office locations throughout the U.S. and around the world, with various lease terms expiring over the next thirteen years.
We continually review our need for office space, and we believe that our current office space, as well as other future office space we expect to be able to obtain in the lease marketplace, will be sufficient to meet our office space needs. 32
We continually review our need for office space, and we believe that our current office space, as well as other future office space we expect to be able to obtain in the lease marketplace, will be sufficient to meet our office space needs.
ITEM 2. PR OPERTIES We lease our offices and do not own any real estate. As of December 31, 2024, we leased approximately 208,274 square feet of office space at our corporate headquarters at 1902 Reston Metro Plaza, Reston, Virginia (in the Washington, D.C. metropolitan area) through May 2039 (the “Reston Office”).
ITEM 2. PR OPERTIES We lease our offices and do not own any real estate. As of December 31, 2025, we leased approximately 208,274 square feet of office space at our corporate headquarters at 1902 Reston Metro Plaza, Reston, Virginia (in the Washington, D.C. metropolitan area) through May 2039 (the “Reston Office”).

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile these matters and proceedings cause us to incur costs, including, but not limited to, attorneys’ fees, we currently believe that any ultimate liability arising out of these matters and proceedings will not have a material adverse effect on our financial position, results of operations, or cash flows. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 33 PAR T II
Biggest changeWhile these matters and proceedings cause us to incur costs, including, but not limited to, attorneys’ fees, we currently believe that any ultimate liability arising out of these matters and proceedings will not have a material adverse effect on our financial position, results of operations, or cash flows. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 32 PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe historical information set forth below is not necessarily indicative of future performance. 35 Year Ended December 31, 2019 2020 2021 2022 2023 2024 ICF International, Inc. $ 100.00 $ 81.80 $ 113.53 $ 110.27 $ 149.96 $ 133.84 Nasdaq Composite 100.00 144.92 177.06 119.45 172.77 223.87 Russell 2000 Index 100.00 119.96 137.74 109.59 128.14 142.93 S&P Composite 1500 Commercial & Professional Services 100.00 118.06 148.95 134.63 158.80 184.99 Recent Sales of Unregistered Securities None.
Biggest changeThe historical information set forth below is not necessarily indicative of future performance. 34 Year Ended December 31, 2020 2021 2022 2023 2024 2025 ICF International, Inc. $ 100.00 $ 138.79 $ 134.81 $ 183.33 $ 163.61 $ 117.82 Nasdaq Composite 100.00 122.18 82.43 119.22 154.48 187.14 Russell 2000 Index 100.00 114.82 91.35 106.82 119.14 134.40 S&P Composite 1500 Commercial & Professional Services 100.00 126.16 114.03 134.51 156.69 149.33 Recent Sales of Unregistered Securities None.
Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock from December 31, 2019 through December 31, 2024, with the cumulative total return on (i) the Nasdaq Composite, (ii) the Russell 2000 stock index, and (iii) the S&P 1500 companies having GICS Code 2020 Commercial & Professional Services. 34 The comparison below assumes an initial investment of $100.00 on December 31, 2019 in which all dividends (if any) are reinvested and all returns are market-cap weighted.
Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock from December 31, 2020 through December 31, 2025, with the cumulative total return on (i) the Nasdaq Composite, (ii) the Russell 2000 stock index, and (iii) the S&P 1500 companies having GICS Code 2020 Commercial & Professional Services. 33 The comparison below assumes an initial investment of $100.00 on December 31, 2020 in which all dividends (if any) are reinvested and all returns are market-cap weighted.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the Nasdaq Global Select Market under the symbol “ICFI.” Holders As of February 21, 2025, there were 23 registered holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the Nasdaq Global Select Market under the symbol “ICFI.” Holders As of February 20, 2026, there were 22 registered holders of record of our common stock.
As of December 31, 2024, $149.3 million of authority remained available for share repurchases. 36 Repurchases of Equity Securities The following table summarizes the share repurchase activity for the three months ended December 31, 2024 for our share repurchase plan and shares purchased in satisfaction of employee tax withholding obligations related to the settlement of restricted stock units.
As of December 31, 2025, $94.0 million of authority remained available for share repurchases. 35 Repurchases of Equity Securities The following table summarizes the share repurchase activity for the three months ended December 31, 2025 for our share repurchase plan and shares purchased in satisfaction of employee tax withholding obligations related to the settlement of restricted stock units.
During the three months ended December 31, 2024, we repurchased 136,321 under the stock repurchase program at an average price of $131.47 and 8,326 shares of common stock from employees in satisfaction of tax withholding obligations at an average price of $170.69 per share. b) The current share repurchase program authorizes share repurchases in the aggregate up to $300.0 million.
During the three months ended December 31, 2025, we repurchased 219,601 under the stock repurchase program at an average price of $80.93 and 1,301 shares of common stock from employees in satisfaction of tax withholding obligations at an average price of $82.04 per share. b) The current share repurchase program authorizes share repurchases in the aggregate up to $300.0 million.
During the year ended December 31, 2024, we used $44.4 million to repurchase 327,321 shares under this program at an average price of $135.77 per share.
During the year ended December 31, 2025, we used $55.3 million to repurchase 563,988 shares under this program at an average price of $98.08 per share.
Period Total Number of Shares Purchased (a) Average Price Paid per Share (a) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b) October 1 – October 31 — $ — — $ 67,217,536 November 1 – November 30 75,255 $ 139.83 66,929 $ 158,114,581 December 1 – December 31 69,392 $ 127.10 69,392 $ 149,293,133 Total 144,647 $ 133.72 136,321 a) The total number of shares purchased includes any shares repurchased pursuant to our share repurchase program described further in footnote (b) below, as well as shares purchased from employees to pay required withholding taxes related to the settlement of restricted stock units in accordance with our applicable long-term incentive plan.
Period Total Number of Shares Purchased (a) Average Price Paid per Share (a) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b) October 1 – October 31 — $ — — $ 111,742,998 November 1 – November 30 209,659 $ 80.78 208,358 $ 94,910,350 December 1 – December 31 11,243 $ 84.02 11,243 $ 93,965,514 Total 220,902 $ 80.94 219,601 a) The total number of shares purchased includes any shares repurchased pursuant to our share repurchase program described further in footnote (b) below, as well as shares purchased from employees to pay required withholding taxes related to the settlement of restricted stock units in accordance with our applicable long-term incentive plan.
Added
The program and the authorized amount have no expiration date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYears Ended December 31, 2024 and 2023 (dollars in thousands) Year Ended December 31, Year to Year Change 2024 2023 2024 2023 2023 to 2024 Dollars Percentages Dollars Percent Revenue $ 2,019,787 $ 1,963,238 100.0 % 100.0 % $ 56,549 2.9 % Direct Costs: Direct labor & related fringe costs 775,239 730,322 38.4 % 37.2 % 44,917 6.2 % Subcontractors & other direct costs 506,777 534,696 25.1 % 27.2 % (27,919 ) (5.2 )% Total Direct Costs 1,282,016 1,265,018 63.5 % 64.4 % 16,998 1.3 % Operating Costs and Expenses Indirect and selling expenses 518,453 505,162 25.7 % 25.7 % 13,291 2.6 % Depreciation and amortization 20,484 25,277 1.0 % 1.3 % (4,793 ) (19.0 )% Amortization of intangible assets 32,992 35,461 1.6 % 1.8 % (2,469 ) (7.0 )% Total Operating Costs and Expenses 571,929 565,900 28.3 % 28.8 % 6,029 1.1 % Operating Income 165,842 132,320 8.2 % 6.7 % 33,522 25.3 % Interest, net (29,590 ) (39,681 ) (1.5 )% (2.0 )% 10,091 (25.4 )% Other income 1,806 3,908 0.1 % 0.2 % (2,102 ) (53.8 )% Income Before Income Taxes 138,058 96,547 6.8 % 4.9 % 41,511 43.0 % Provision for Income Taxes 27,888 13,935 1.4 % 0.7 % 13,953 100.1 % Net Income $ 110,170 $ 82,612 5.5 % 4.2 % $ 27,558 33.4 % Year ended December 31, 2024 compared to year ended December 31, 2023 Revenue.
Biggest changeYears Ended December 31, 2025 and 2024 (dollars in thousands) Year Ended December 31, Year to Year Change 2025 2024 2025 2024 2024 to 2025 Dollars Percentages Dollars Percent Revenue $ 1,872,851 $ 2,019,787 100.0 % 100.0 % $ (146,936 ) (7.3 )% Direct Costs: Direct labor & related fringe benefit costs 722,849 775,239 38.6 % 38.4 % (52,390 ) (6.8 )% Subcontractors and other direct costs 453,986 506,777 24.2 % 25.1 % (52,791 ) (10.4 )% Total Direct Costs 1,176,835 1,282,016 62.8 % 63.5 % (105,181 ) (8.2 )% Operating Costs and Expenses Indirect and selling expenses 492,404 518,453 26.3 % 25.7 % (26,049 ) (5.0 )% Depreciation and amortization: Depreciation and amortization 21,140 20,484 1.1 % 1.0 % 656 3.2 % Amortization of intangible assets acquired in business combinations 37,007 32,992 2.0 % 1.6 % 4,015 12.2 % Total Depreciation and Amortization: 58,147 53,476 3.1 % 2.6 % 4,671 8.7 % Total Operating Costs and Expenses 550,551 571,929 29.4 % 28.3 % (21,378 ) (3.7 )% Operating Income 145,465 165,842 7.8 % 8.2 % (20,377 ) (12.3 )% Interest, net (30,833 ) (29,590 ) (1.6 )% (1.5 )% (1,243 ) 4.2 % Other (expense) income (2,639 ) 1,806 (0.1 )% 0.1 % (4,445 ) (246.1 )% Income Before Income Taxes 111,993 138,058 6.0 % 6.8 % (26,065 ) (18.9 )% Provision for Income Taxes 20,405 27,888 1.1 % 1.4 % (7,483 ) (26.8 )% Net Income $ 91,588 $ 110,170 4.9 % 5.5 % $ (18,582 ) (16.9 )% Year ended December 31, 2025 compared to year ended December 31, 2024 Revenue.
Other companies may define similarly titled non-GAAP measures differently and, accordingly, care should be exercised in understanding how we define these measures as similarly named measures are unlikely to be comparable across different companies. EBITDA and Adjusted EBITDA Earnings before interest, tax, and depreciation and amortization (“EBITDA”) is a measure we use to evaluate operating performance.
Other companies may define similarly titled non-GAAP measures differently and, accordingly, care should be exercised in understanding how we define these measures as similarly named measures are unlikely to be comparable across different companies. 45 EBITDA and Adjusted EBITDA Earnings before interest, tax, and depreciation and amortization (“EBITDA”) is a measure we use to evaluate operating performance.
Additionally, we continuously analyze our capital structure to ensure we have capital to fund future strategic acquisitions. We continuously monitor the state of the financial markets to assess the availability of borrowing capacity under the Credit Facility and the cost of additional capital from both debt and equity markets.
Additionally, we continuously analyze our capital structure to ensure we have capital to fund future strategic acquisitions. 47 We continuously monitor the state of the financial markets to assess the availability of borrowing capacity under the Credit Facility and the cost of additional capital from both debt and equity markets.
At present, we believe we will be able to continue to access these markets at commercially reasonable terms and conditions if we need additional capital in the near term. Material Cash Requirements from Contractual Obligations .
At present, we believe we will be able to continue to access these markets on commercially reasonable terms and conditions if we need additional capital in the near term. Material Cash Requirements from Contractual Obligations .
Discussions of 2023 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 28, 2024, and is incorporated by reference into this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Discussions of 2024 items and year-to-year comparisons between 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 28, 2025, and is incorporated by reference into this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
GAAP measures (“non-GAAP”). While we believe that these non-GAAP financial measures provide additional information to investors and may be useful in evaluating our financial information, they should be considered supplemental in nature and not as a substitute for financial information prepared in accordance with U.S. GAAP.
While we believe that these non-GAAP financial measures provide additional information to investors and may be useful in evaluating our financial information, they should be considered supplemental in nature and not as a substitute for financial information prepared in accordance with U.S. GAAP.
Our actual results could differ materially from those anticipated in the forward-looking statements. Factors that could cause or contribute to our actual results differing materially from those anticipated include those discussed in “Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Our actual results could differ materially from those anticipated in the forward-looking statements. Factors that could cause or contribute to our actual results differing materially from those anticipated include those discussed in Item 1A. “Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Our discussion of the items for the years ended December 31, 2023 and 2022 can be found in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 28, 2024.
Our discussion of the items for the years ended December 31, 2024 and 2023 can be found in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 28, 2025.
However, our current belief is that the combination of internally generated funds, available bank borrowings, and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund ongoing operations, customary capital expenditures, quarterly cash dividends, share repurchases, and organic growth.
However, our current belief is that the combination of internally generated funds, available bank borrowing capacity, and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund ongoing operations, customary capital expenditures, quarterly cash dividends, share repurchases, and organic growth.
We believe that the supplemental adjustments provide additional information to investors. The following table presents a reconciliation of U.S. GAAP Diluted EPS to Non-GAAP Diluted EPS for the periods indicated: Year ended December 31, 2024 2023 2022 U.S.
We believe that the supplemental adjustments provide additional information to investors. 46 The following table presents a reconciliation of U.S. GAAP Diluted EPS to Non-GAAP Diluted EPS for the periods indicated: Year ended December 31, 2025 2024 2023 U.S.
Our primary source of borrowings is from our Credit Facility, as described in “Note 10 - Long-Term Debt” in the “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K.
Our primary source of borrowings is from our Credit Facility, as described in “Note 8 - Debt” in the “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K.
We borrow funds under the Credit Facility at interest rates based on both the SOFR (i.e., 1-, 3-, or 6-month rates) and a fluctuating Base Rate (see “Note 10 - Long-Term Debt” in the “Notes to Consolidated Financial Statements” in this Annual Report).
We borrow funds under the Credit Facility at interest rates based on both the SOFR (i.e., 1, 3, or 6-month rates) and a fluctuating Base Rate (see “Note 8 - Debt” in the “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K).
Most of our revenue is from contracts on which we are the prime contractor, which we believe provides us with strong client relationships. In 2024, 2023, and 2022, approximately 87%, 89%, and 91% of our revenue, respectively, was from prime contracts.
Most of our revenue is from contracts on which we are the prime contractor, which we believe provides us with strong client relationships. In 2025, 2024, and 2023, approximately 86%, 87%, and 89% of our revenue, respectively, was from prime contracts.
The following table summarizes our cash flows from the years ended December 31, 2024, 2023, and 2022.
The following table summarizes our cash flows from the years ended December 31, 2025, 2024, and 2023.
As of December 31, 2024, we had $541.1 million of unused borrowing capacity available under the Credit Facility to fund our ongoing operations, future acquisitions, dividend payments, and share repurchase program. Should the need arise, we intend to further increase our borrowing capacity in the future to provide us with adequate working capital to continue our ongoing operations.
As of December 31, 2025, we had $550.0 million of unused borrowing capacity available under the Credit Facility to fund our ongoing operations, future acquisitions, dividend payments, and share repurchase program. Should the need arise, we intend to further increase our borrowing capacity in the future to provide us with adequate working capital to continue our ongoing operations.
For the years ended December 31, 2024, 2023, and 2022, our revenue from contracts in which we use EACs totaled $479.7 million, $310.1 million, and $287.4 million, respectively. Our contracts may include variable considerations such as award fees and incentives that may increase or decrease the transaction price.
For the years ended December 31, 2025, 2024, and 2023, our revenue from contracts in which we use EACs totaled $453.8 million, $479.7 million, and $310.1 million, respectively. Our contracts may include variable considerations such as award fees and incentives that may increase or decrease the transaction price.
(2) Income tax effects were calculated using the effective tax rate, adjusted for discrete items, if any, of 20.2%, 22.8% and 28.0% for the years ended December 31, 2024, 2023, and 2022, respectively. 47 LIQUIDITY AND CAPITAL RESOURCES Liquidity and Borrowing Capacity .
(3) Income tax effects were calculated using the effective tax rate, adjusted for discrete items, if any, of 22.2%, 20.2% and 22.8% for the years ended December 31, 2025, 2024, and 2023, respectively. LIQUIDITY AND CAPITAL RESOURCES Liquidity and Borrowing Capacity .
There are other conditions, such as the ongoing wars in Ukraine and the instability in the Middle East, that create uncertainty in the global economy, which in turn may impact, among other things, our ability to generate positive cash flows from operations and our ability to successfully execute and fund key initiatives.
There are other conditions, such as the ongoing wars in Ukraine, instabilities in the Middle East, and volatility in global trade (including the imposition of tariffs), that create uncertainty in the global economy, which in turn may impact, among other things, our ability to generate positive cash flows from operations and our ability to successfully execute and fund key initiatives.
The estimates do not take into account future drawdowns and repayments on the debt or changes in the variable interest rate, and actual interest may be different. As of December 31, 2024, we have operating leases for facilities and equipment with remaining terms ranging from 1 to 14 years.
The estimates do not consider future drawdowns and repayments on the debt or changes in the variable interest rate, and actual interest may be different. As of December 31, 2025, we have operating leases for facilities and equipment with remaining terms ranging from 1 to 13 years.
We estimate the most likely amount expected to be achieved based on our prior history in providing the services to the customer or, if no history exists, we constrain the variable consideration until the initial determination by the customer.
We estimate variable consideration primarily by using the most likely amount method based on our prior history in providing the services to the customer or, if no history exists, we constrain the variable consideration until the initial determination by the customer.
(2) These are primarily third-party costs related to acquisitions and potential acquisitions, integration of acquisitions, and separation of discontinued businesses or divestitures. (3) These costs are mainly due to involuntary employee termination benefits for our officers, and employees who have been notified that they will be terminated as part of a business reorganization or exit.
(2) These are primarily third-party costs related to acquisitions and integration of acquisitions. (3) These costs are due to involuntary employee termination benefits for (i) our officers and (ii) a group of employees who have been notified that they will be terminated as part of a business reorganization or exit.
Although we describe our multiple service offerings to clients that operate in three markets to provide a better understanding of the scope and scale of our business, we do not manage our business or allocate our resources based on those service offerings or client markets.
Our single segment represents our core business: professional services to our broad array of clients. Although we describe our multiple service offerings to clients that operate in three markets to provide a better understanding of the scope and scale of our business, we do not manage our business or allocate our resources based on those service offerings or client markets.
Fair Value of Acquired Assets from Business Combinations Our consolidated balance sheets as of December 31, 2024 and 2023 include $88.3 million and $94.9 million, respectively, of net intangible assets that were created through business acquisitions.
Fair Value of Acquired Assets from Business Combinations Our consolidated balance sheets as of December 31, 2025 and 2024 include $50.2 million and $88.2 million, respectively, of net intangible assets that were created through business acquisitions.
Revenue by contract mix provides insight in terms of the degree of performance risk that we have assumed. Significant variances in the key metrics tables that are provided below are discussed under the revenue section of the results of operations.
Client type is an indicator of the diversity of our client base. Revenue by contract mix provides insight in terms of the degree of performance risk that we have assumed. Significant variances in the key metrics tables that are provided below are discussed under the revenue section of the results of operations.
As of December 31, 2024, we also have finance leases for equipment and furniture with lease payment obligations through 2029 as discussed in “Note 7 - Leases” in the “Notes to Consolidated Financial Statements”.
As of December 31, 2025, we also have finance leases for equipment and furniture with lease payment obligations through 2029 as discussed in “Note 7 - Leases” in the “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K.
As a percentage of total indirect and selling expenses, indirect labor and associated fringe costs were 71.0% and 71.1%, respectively, and general and administrative costs were 29.0% and 28.9%, respectively, for the years ended December 31, 2024 and 2023. As a percentage of revenue, indirect and selling expenses was 25.7% for the years ended December 31, 2024 and 2023.
As a percentage of total indirect and selling expenses, indirect labor and associated fringe costs were 73.9% and 71.0%, respectively, and general and administrative costs were 26.1% and 29.0%, respectively, for the years ended December 31, 2025 and 2024.
There are three main types of contracts: time-and-materials contracts, fixed-price contracts, and cost-based contracts. 43 The following table shows the approximate percentage of our revenue for each of these types of contracts for the periods indicated. Certain immaterial revenue amounts in the prior years have been reclassified due to minor adjustments and reclassification within contract mix.
The following table shows the approximate percentage of our revenue for each of these types of contracts for the periods indicated. Certain immaterial revenue amounts in the prior years have been reclassified due to minor adjustments and reclassification within contract mix.
We generally have been able to price our contracts in a manner that accommodates the rates of inflation experienced in recent years, although we cannot ensure that we will be able to do so in the future.
We generally have been able to price our contracts in a manner that accommodates the rates of inflation experienced in recent years, although we cannot ensure that we will be able to do so in the future. 39 BUSINESS COMBINATIONS A key element of our growth strategy is to pursue acquisitions.
Cash dividends declared in 2024 were as follows: Declaration Date Dividend Per Share Record Date Payment Date February 27, 2024 $ 0.14 March 22, 2024 April 12, 2024 May 2, 2024 $ 0.14 June 7, 2024 July 12, 2024 August 1, 2024 $ 0.14 September 6, 2024 October 11, 2024 October 31, 2024 $ 0.14 December 6, 2024 January 10, 2025 Cash Flows .
Cash dividends declared in 2025 were as follows: Declaration Date Dividend Per Share Record Date Payment Date February 27, 2025 $ 0.14 March 28, 2025 April 14, 2025 May 1, 2025 $ 0.14 June 6, 2025 July 11, 2025 July 31, 2025 $ 0.14 September 5, 2025 October 10, 2025 October 30, 2025 $ 0.14 December 5, 2025 January 9, 2026 48 Cash Flows .
GAAP Diluted EPS $ 5.82 $ 4.35 $ 3.38 Impairment of long-lived assets 0.19 0.40 0.44 Acquisition and divestiture-related expenses 0.07 0.25 0.34 Severance and other costs related to staff realignment 0.08 0.33 0.33 Expenses related to facility consolidations and office closures (1) 0.06 0.24 0.26 Expenses related to the transfer to our new corporate headquarters — — 0.44 Expenses related to our agreement for the sale of receivables — — 0.01 Pre-tax gain from divestiture of a business (0.11 ) (0.30 ) — Amortization of intangibles 1.74 1.87 1.49 Income tax effects of the adjustments (2) (0.40 ) (0.64 ) (0.92 ) Non-GAAP Diluted EPS $ 7.45 $ 6.50 $ 5.77 (1) These are exit costs related to actual office closures (previously included in Adjusted EBITDA) and accelerated depreciation related to fixed assets for planned office closures.
GAAP Diluted EPS $ 4.95 $ 5.82 $ 4.35 Impairment of long-lived assets — 0.19 0.40 Acquisition and divestiture-related expenses 0.02 0.07 0.25 Severance and other costs related to staff realignment 0.32 0.08 0.33 Charges and adjustments related to facility consolidations and office closures (1) (0.01 ) 0.06 0.24 Pre-tax gain from divestiture of a business — (0.11 ) (0.30 ) Amortization of intangible assets acquired in business combinations (2) 2.00 1.74 1.87 Income tax effects of the adjustments (3) (0.51 ) (0.40 ) (0.64 ) Non-GAAP Diluted EPS $ 6.77 $ 7.45 $ 6.50 (1) These are office closure charges and adjustments previously included in Adjusted EBITDA and accelerated depreciation related to fixed assets for planned office closures.
The total direct costs as a percentage of revenue was 63.5% for the year ended December 31, 2024 compared to 64.4% for 2023. Indirect and selling expenses. The increase in indirect and selling expenses was due to additional $8.9 million in indirect labor and related fringe benefit costs and $4.4 million in general and administrative costs.
The total direct costs as a percentage of revenue was 62.8% for the year ended December 31, 2025 compared to 63.5% for 2024. Indirect and selling expenses. The decrease in indirect and selling expenses was due to a reduction of $21.8 million in general and administrative costs and $4.2 million in indirect labor and associated fringe benefit costs.
CMY Solutions, LLC – In May 2023, we acquired CMY, an engineering and automation solutions provider to utilities and organizations. Applied Energy Group – In December 2024, we acquired AEG, a leading energy technology and advisory services company.
During the previous three fiscal years, we completed the acquisitions summarized as follows: CMY Solutions, LLC – In May 2023, we acquired CMY, an engineering and automation solutions provider to utilities and organizations. Applied Energy Group – In December 2024, we acquired AEG, a leading energy technology and advisory services company.
This section of the Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This section of this Annual Report on Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
International government clients generated approximately 5%, 5%, and 6% of our revenue in 2024, 2023, and 2022, respectively. 38 We also serve a variety of commercial clients worldwide, including: airlines, airports, electric and gas utilities, health care companies, banks and other financial services companies, transportation, non-profits/associations, manufacturing firms, retail chains, and distribution companies.
We also serve a variety of commercial clients worldwide, including: airlines, airports, electric and gas utilities, health care companies, banks and other financial services companies, transportation, non-profits/associations, manufacturing firms, retail chains, and distribution companies. Our commercial clients, which include clients outside the U.S., generated approximately 33%, 25%, and 24% of our revenue in 2025, 2024, and 2023, respectively.
We routinely review EACs for changes that could materially impact our measurement of progress toward completion of the performance obligations and adjust our revenue in the period that the changes occur. When a contract EAC exceeds the contract value, we recognize the loss in the same period of determination.
We routinely review EACs for changes that could materially impact our measurement of progress toward completion of the performance obligations and adjust our revenue in the period that the changes occur. For product-delivery contracts in which their EACs exceed their contract value, we recognize the losses in the same period of determination.
Year ended December 31, 2024 Year ended December 31, 2023 Year ended December 31, 2022 (dollars in thousands) Dollars Percent Dollars Percent Dollars Percent Contract Mix: Time-and-materials $ 855,538 42 % $ 811,911 41 % $ 713,693 40 % Fixed-price 932,351 46 % 886,200 45 % 802,568 45 % Cost-based 231,898 12 % 265,127 14 % 263,703 15 % Total $ 2,019,787 100 % $ 1,963,238 100 % $ 1,779,964 100 % Payments we received on cost-based contracts with the federal government are provisional payments subject to adjustment upon audit by the government.
Year ended December 31, 2025 Year ended December 31, 2024 Year ended December 31, 2023 (dollars in thousands) Dollars Percent Dollars Percent Dollars Percent Contract Mix: Time-and-materials $ 802,013 43 % $ 855,533 42 % $ 811,911 41 % Fixed-price 932,659 50 % 932,353 46 % 886,200 45 % Cost-based 138,179 7 % 231,901 12 % 265,127 14 % Total $ 1,872,851 100 % $ 2,019,787 100 % $ 1,963,238 100 % Payments we received on cost-based contracts with the federal government are provisional payments subject to adjustment upon audit by the government.
Year ended December 31, (in thousands) 2024 2023 2022 Net cash provided by operating activities $ 171,544 $ 152,383 $ 162,206 Net cash used in investing activities (74,805 ) (3,673 ) (258,844 ) Net cash (used in) provided by financing activities (86,898 ) (152,588 ) 90,371 Effect of exchange rate changes on cash, cash equivalents, and restricted cash (473 ) 359 (1,198 ) Increase (decrease) in cash, cash equivalents, and restricted cash $ 9,368 $ (3,519 ) $ (7,465 ) Cash provided by operating activities for the year ended December 31, 2024 increased by $19.2 million compared to 2023 primarily due to the profitability of our contracts, our ability to invoice our customers and subsequent collection of cash, and the timing of vendor payments.
Year ended December 31, (in thousands) 2025 2024 2023 Net cash provided by operating activities $ 141,870 $ 171,544 $ 152,383 Net cash used in investing activities (21,511 ) (74,805 ) (3,673 ) Net cash used in financing activities (84,307 ) (86,898 ) (152,588 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 1,455 (473 ) 359 Net change in cash, cash equivalents, and restricted cash $ 37,507 $ 9,368 $ (3,519 ) Net cash provided by operating activities for the year ended December 31, 2025 decreased by $29.7 million compared to 2024 primarily due to profitability of our contracts, our ability to invoice our customers and subsequent collection of cash, and the timing of vendor payments.
We believe that the estimates, assumptions, and judgments involved in the accounting practices described below have the greatest potential impact on our financial statements and, therefore, consider them to be critical accounting policies. Significant accounting estimates are more fully described and discussed in “Note 2 - Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements”.
We believe that the estimates, assumptions, and judgments involved in the accounting practices described below have the greatest potential impact on our financial statements and, therefore, consider them to be critical accounting policies.
We believe that the combination of internally generated funds, available bank borrowings, and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund ongoing operations, potential acquisitions, customary capital expenditures, and other working capital requirements. 39 Our results of operations and cash flows may vary significantly from quarter to quarter depending on a number of factors, including, but not limited to: • Progress of contract performance; • Extraordinary economic events and natural disasters; • Number of billable days in a quarter; • Timing of client orders; • Timing of award fee notices; • Changes in the scope of contracts; • Variations in purchasing patterns under our contracts; • Changes in priorities, especially with the federal government; • Federal and state and local governments’ and other clients’ spending levels; • Federal government shutdowns; • Timing of billings to, and collection of payments from, clients; • Timing of receipt of invoices from, and payments to, employees and vendors; • Commencement, completion, and termination of contracts; • Strategic decisions, such as acquisitions, consolidations, divestments, spin-offs, joint ventures, strategic investments, and changes in business strategy; • Timing of significant costs and investments (such as bid and proposal costs and the costs involved in planning or making acquisitions); • Timing of events related to discrete tax items; • Our contract mix and use of subcontractors or the timing of other direct costs for which we may earn lower contract margin; • Changes in contract margin performance due to performance risks; • Additions to, and departures of, staff; • Changes in staff utilization; • Paid time off taken by our employees; • Level and cost of our debt; • Changes in accounting principles and policies; and/or • General market and economic conditions.
We believe our prior and current experience with disaster relief and rebuild efforts, including after hurricanes Katrina and Rita and Superstorm Sandy, and the wildfires in Oregon, put us in a favorable position to continue to provide recovery and housing assistance, and environmental and infrastructure solutions, including disaster mitigation, on behalf of federal departments and agencies, state, territorial, and local jurisdictions, and regional agencies. 38 Our results of operations and cash flows may vary significantly from quarter to quarter depending on a number of factors, including, but not limited to: • Progress of contract performance; • Extraordinary economic events and natural disasters; • Number of billable days in a quarter; • Timing of client orders; • Timing of award fee notices; • Changes in the scope of contracts; • Variations in purchasing patterns under our contracts; • Changes in priorities, especially with the federal government; • Federal and state and local governments’ and other clients’ spending levels; • Federal government shutdowns; • Timing of billings to, and collection of payments from, clients; • Timing of receipt of invoices from, and payments to, employees and vendors; • Commencement, completion, and termination of contracts; • Strategic decisions, such as acquisitions, consolidations, divestments, spin-offs, joint ventures, strategic investments, and changes in business strategy; • Timing of significant costs and investments (such as bid and proposal costs and the costs involved in planning or making acquisitions); • Timing of events related to discrete tax items; • Our contract mix and use of subcontractors or the timing of other direct costs for which we may earn lower contract margin; • Changes in contract margin performance due to performance risks; • Additions to, and departures of, staff; • Changes in staff utilization; • Paid time off taken by our employees; • Level and cost of our debt; • Changes in accounting principles and policies; and/or • General market and economic conditions.
Year ended December 31, 2024 2023 2022 Net income $ 110,170 $ 82,612 $ 64,243 Interest, net 29,590 39,681 23,281 Provision for income taxes 27,888 13,935 19,737 Depreciation and amortization 53,476 60,738 49,917 EBITDA 221,124 196,966 157,178 Impairment of long-lived assets (1) 3,583 7,666 8,354 Acquisition and divestiture-related expenses (2) 1,313 4,759 6,441 Severance and other costs related to staff realignment (3) 1,535 6,366 6,302 Charges for facility consolidations and office closures (4) 464 3,187 5,034 Expenses related to the transfer to our new corporate headquarters (5) — — 8,287 Expenses related to our agreement for the sale of receivables (6) — — 240 Pre-tax gain from divestiture of a business (7) (2,013 ) (5,712 ) — Total adjustments 4,882 16,266 34,658 Adjusted EBITDA $ 226,006 $ 213,232 $ 191,836 46 (1) Represents impairment of operating lease right-of-use and leasehold improvement assets associated with exit from certain facilities, and an intangible asset associated with exit of a business.
Year ended December 31, 2025 2024 2023 Net income $ 91,588 $ 110,170 $ 82,612 Interest, net 30,833 29,590 39,681 Provision for income taxes 20,405 27,888 13,935 Depreciation and amortization 58,147 53,476 60,738 EBITDA 200,973 221,124 196,966 Impairment of long-lived assets (1) — 3,583 7,666 Acquisition and divestiture-related expenses (2) 492 1,313 4,759 Severance and other costs related to staff realignment (3) 5,863 1,535 6,366 Charges and adjustments related to facility consolidations and office closures (4) (138 ) 464 3,187 Pre-tax gain from divestiture of a business (5) — (2,013 ) (5,712 ) Total adjustments 6,217 4,882 16,266 Adjusted EBITDA $ 207,190 $ 226,006 $ 213,232 (1) Represents impairment of operating lease right-of-use and leasehold improvement assets associated with exit from certain facilities, and an intangible asset associated with exit of a business.
RESULTS OF OPERATIONS The following table sets forth certain items from our consolidated statements of comprehensive income for the years ended December 31, 2024 and 2023 and expresses these items as a percentage of revenue for the periods indicated and the period-over-period rate of change in each of them.
Contract revenue for subsequent periods has been recorded in amounts that are expected to be realized on final audit and settlement of costs. 43 RESULTS OF OPERATIONS The following table sets forth certain items from our consolidated statements of comprehensive income for the years ended December 31, 2025 and 2024 and expresses these items as a percentage of revenue for the periods indicated and the period-over-period rate of change in each of them.
We report operating results and financial data as a single segment based on the consolidated information used by our chief operating decision-maker in evaluating the financial performance of our business and allocating resources. Our single segment represents our core business: professional services to our broad array of clients.
The increase in commercial revenue was primarily due to higher commercial energy business in 2025. We report operating results and financial data as a single segment based on the consolidated information used by our chief operating decision-maker in evaluating the financial performance of our business and allocating resources.
Assuming that our interest rate on the Credit Facility is the same as on December 31, 2024, we anticipate our interest payments on the debt to be approximately $23.6 million in 2025, $23.6 million in 2026, and $6.2 million in 2027 when our Credit Facility expires.
Assuming that our interest rate on the Credit Facility is the same as on December 31, 2025, we anticipate our interest payments on the debt to be approximately $20.7 million annually in 2026 and for each year thereafter.
Revenue Recognition We generate our revenue by primarily providing services and technology-based solutions for clients. We enter into agreements with clients that create enforceable rights and obligations and for which it is probable that we will collect the consideration to which we will be entitled as services and solutions are provided to the client.
We enter into agreements with clients that create enforceable rights and obligations and for which it is probable that we will collect the consideration to which we will be entitled as services and solutions are provided to the client. Our contracts may be partially funded, often incrementally in annual amounts.
The current and long-term finance lease liabilities at December 31, 2024 of $13.9 million represent the present value of the minimum payments totaling $15.1 million. 48 Inflation.
The current and long-term finance lease liabilities at December 31, 2025 of $11.3 million represent the present value of the minimum payments totaling $12.0 million. Inflation.
Our primary services include: • Advisory Services; • Program Implementation Services; • Analytics Services; • Digital Services; and • Engagement Services. Our clients utilize our services because we combine diverse institutional knowledge and experience with the deep subject matter expertise of our highly educated staff, which we deploy in multi-disciplinary teams.
Our primary services include: • Advisory Services; • Program Implementation Services; • Analytics Services; • Digital Services; and • Engagement Services. Our clients rely on us because we combine broad institutional knowledge with the deep subject‑matter expertise of our highly trained staff, working together in multidisciplinary teams.
The selection of the method used to measure progress requires judgment and, among other things, is dependent on the contract type selected by the client during contract negotiation and the nature of the services and solutions to be provided. 41 For cost-based contracts, we recognize revenue as a single performance obligation based on contract costs incurred, as we become contractually entitled to reimbursement of the contract costs, plus a most likely estimate of award or incentive fees earned on those costs even though final determination of fees earned occurs after the contractually stipulated performance assessment period ends.
For cost-based contracts, we recognize revenue as a single performance obligation based on contract costs incurred, as we become contractually entitled to reimbursement of the contract costs, plus a most likely estimate of award or incentive fees earned on those costs even though final determination of fees earned occurs after the contractually stipulated performance assessment period ends.
For performance obligations requiring the delivery of a service for a fixed price, we use the ratio of actual costs incurred to total estimated costs at completion (“EAC”) provided that costs incurred (an input method) represents a reasonable measure of progress towards the satisfaction of a performance obligation, in order to estimate the portion of total revenue earned.
For the years ended December 31, 2025, 2024, and 2023, revenue from cost-based contracts totaled $138.2 million, $231.9 million, and $265.1 million, respectively. 40 For performance obligations requiring the delivery of a service or a product for a fixed price, we use the ratio of actual costs incurred to total estimated costs at completion (“EAC”) provided that costs incurred (an input method) represents a reasonable measure of progress towards the satisfaction of a performance obligation, in order to estimate the portion of total revenue earned.
Unless the context requires otherwise, we use the term “contracts” to refer to contracts and any task orders or delivery orders issued under a contract.
Unless the context requires 42 otherwise, we use the term “contracts” to refer to contracts and any task orders or delivery orders issued under a contract. There are three main types of contracts: time-and-materials contracts, fixed-price contracts, and cost-based contracts.
Federal government clients generated approximately 54%, 55%, and 55% of our revenue in 2024, 2023, and 2022, respectively. State and local government clients generated approximately 16%, 16%, and 15% of our revenue in each of 2024, 2023, and 2022, respectively.
State and local government clients generated approximately 17%, 16%, and 16% of our revenue in each of 2025, 2024, and 2023, respectively. International government clients generated approximately 7%, 5%, and 5% of our revenue in 2025, 2024, and 2023, respectively.
Year ended December 31, 2024 Year ended December 31, 2023 Year ended December 31, 2022 (dollars in thousands) Dollars Percent Dollars Percent Dollars Percent Client Markets: Energy, environment, infrastructure, and disaster recovery $ 929,711 46 % $ 805,942 41 % $ 714,628 40 % Health and social programs 764,477 38 % 814,789 42 % 704,465 40 % Security and other civilian & commercial 325,599 16 % 342,507 17 % 360,871 20 % Total $ 2,019,787 100 % $ 1,963,238 100 % $ 1,779,964 100 % Our primary clients within the client markets are the agencies and departments of the federal government and commercial clients.
Year ended December 31, 2025 Year ended December 31, 2024 Year ended December 31, 2023 (dollars in thousands) Dollars Percent Dollars Percent Dollars Percent Client Markets: Energy, environment, infrastructure, and disaster recovery $ 979,137 52 % $ 934,399 46 % $ 805,942 41 % Health and social programs 620,731 33 % 765,139 38 % 814,789 42 % Security and other civilian & commercial 272,983 15 % 320,249 16 % 342,507 17 % Total $ 1,872,851 100 % $ 2,019,787 100 % $ 1,963,238 100 % Our primary clients within the client markets are the agencies and departments of the federal government and commercial clients.
Uncertain tax positions that meet the more-likely-than-not recognition threshold are measured in order to determine the tax benefit recognized in the financial statements. 42 Recent Accounting Pronouncements New accounting standards are discussed in “Note 2 - Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements”.
Uncertain tax positions that meet the more-likely-than-not recognition threshold are measured in order to determine the tax benefit recognized in the financial statements.
Cash used in investing activities for the year ended December 31, 2024 increased by $71.1 million compared to 2023 primarily due to our acquisition of AEG during fiscal year 2024. We used $86.9 million of cash in financing activities during the year ended December 31, 2024 compared to $152.6 million during 2023.
Net cash used in investing activities for the year ended December 31, 2025 was lower than 2024 by $53.3 million primarily due to our acquisition of AEG during the 2024 fiscal year.
Our current and long-term operating lease liabilities of $176.7 million at December 31, 2024 represent the present value of the minimum payments required under the non-cancellable leases, and the actual cash payments total $214.9 million. The operating lease payment obligations by year are further discussed in “Note 7 - Leases” in the “Notes to Consolidated Financial Statements”.
Our current and long-term operating lease liabilities of $158.7 million at December 31, 2025 represent the present value of the minimum payments required under the non-cancellable leases, and the actual cash payments total $191.5 million.
As of December 31, 2024, contractual obligations that require a material use of cash include payments of interest on our Credit Facility and operating lease obligations for facilities and equipment. At December 31, 2024, our outstanding Credit Facility balance, net of unamortized debt issuance costs, was $411.7 million, which is due in 2027 upon maturity.
As of December 31, 2025, contractual obligations that require a material use of cash include payments of interest on our Credit Facility and operating lease obligations for facilities and equipment.
SELECTED KEY METRICS In order to evaluate operations, we track revenue by key metrics that provide useful information about the nature of our operations. Client markets provide insight into the breadth of our expertise. Client type is an indicator of the diversity of our client base.
Recent Accounting Pronouncements New accounting standards are discussed in “Note 2 - Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements”. 41 SELECTED KEY METRICS In order to evaluate operations, we track revenue by key metrics that provide useful information about the nature of our operations. Client markets provide insight into the breadth of our expertise.
The increase in provision for income taxes in 2024 was primarily due to the favorable impact of one-time tax planning strategies implemented in 2023 which were not repeated in 2024. 45 NON-GAAP MEASURES The following tables provide reconciliations of financial measures that are not calculated in accordance with generally accepted accounting principles in the U.S. to their most comparable U.S.
NON-GAAP MEASURES The following tables provide reconciliations of financial measures that are not calculated in accordance with generally accepted accounting principles in the U.S. (“non-GAAP”) to their most comparable U.S. GAAP measures.
Year ended December 31, 2024 Year ended December 31, 2023 Year ended December 31, 2022 (dollars in thousands) Dollars Percent Dollars Percent Dollars Percent Client Type: U.S. federal government $ 1,087,349 54 % $ 1,084,047 55 % $ 980,746 55 % U.S. state and local government 316,083 16 % 309,516 16 % 259,764 15 % International government 110,798 5 % 103,446 5 % 103,609 6 % Government 1,514,230 75 % 1,497,009 76 % 1,344,119 76 % Commercial 505,557 25 % 466,229 24 % 435,845 24 % Total $ 2,019,787 100 % $ 1,963,238 100 % $ 1,779,964 100 % Contract mix Contract mix varies from year to year due to numerous factors, including our business strategies and the procurement activities of our clients.
Year ended December 31, 2025 Year ended December 31, 2024 Year ended December 31, 2023 (dollars in thousands) Dollars Percent Dollars Percent Dollars Percent Client Type: U.S. federal government $ 809,073 43 % $ 1,088,607 54 % $ 1,084,047 55 % U.S. state and local government 322,956 17 % 316,017 16 % 309,516 16 % International government 119,131 7 % 110,680 5 % 103,446 5 % Government 1,251,160 67 % 1,515,304 75 % 1,497,009 76 % Commercial 621,691 33 % 504,483 25 % 466,229 24 % Total $ 1,872,851 100 % $ 2,019,787 100 % $ 1,963,238 100 % Contract mix Contract mix, which provides insight into the performance risks that we have assumed and, therefore, the predictability of our contract revenues and margins, varies from year to year due to numerous factors, including our business strategies and the procurement activities of our clients.
The average interest rate was 6.6% in 2024 compared to 6.7% in 2023. We utilize floating-to-fixed interest rate swap agreements to hedge the variable interest portion of our debt. Our 2024 interest expense from our debt was reduced by $6.2 million from the swap agreements, compared to $6.9 million in 2023.
Interest from our debt facilities was $29.2 million for the year ended December 31, 2025, compared to $31.8 million for 2024. We utilize floating-to-fixed interest rate swap agreements to hedge the variable interest portion of our debt, which decreased interest by $1.2 million and $6.2 million for the years ended December 31, 2025 and 2024, respectively.
Revenue from Energy, Environment & Infrastructure and Disaster Recovery client market increased by $123.8 million, or 15.4%, due to: • Increases of $88.0 million from commercial, $31.8 million from U.S. federal government, $3.4 million from international government, and $0.5 million from U.S. state and local government clients, respectively. 44 Revenue from Health and Social Programs client market decreased by $50.3 million, or 6.2%, due to: • Decreases of $48.1 million from U.S. federal government and $13.8 million from commercial clients, respectively, driven by lower pass-throughs from several U.S. federal contracts and our exit from the commercial marketing business during 2023, offset by • Increases of $6.3 million and $5.4 million from U.S. state and local government and international government clients, respectively.
The following were changes in revenue from our various client markets: • Energy, Environment, Infrastructure, and Disaster Recovery client market revenues increased $44.7 million, or 4.8%, driven by increases of $106.8 million, $5.6 million, and $5.0 million from our commercial, international government, and U.S. state and local government clients, respectively, offset by a decrease of $72.7 million from our U.S. federal government clients as described above. • Health and Social Programs client market revenues decreased $144.4 million, or 18.9%, driven by a decrease of $156.6 million from our U.S. federal government clients as described above, offset by increases of $8.2 million, $3.2 million, and $0.8 million from our commercial, international government, and U.S. state and local government clients, respectively. • Security and Other Civilian & Commercial client market revenues decreased by $47.3 million, or 14.8%, driven by decreases of $50.2 million and $0.4 million from our U.S. federal government, as described above, and international government clients, respectively, offset by increases of $2.2 million and $1.1 million from our commercial and U.S. state and local government clients, respectively.
The decrease in cash used in financing activities was primarily due to reduced net borrowings from our Credit Facility, partially offset by an increase in share repurchases during fiscal year 2024.
The change in net cash used in financing activities was primarily due to higher net borrowings from our debt facilities, in part to fund additional share repurchases during the 2025 fiscal year.
Our government efforts include work performed under subcontract agreements to commercial clients whose ultimate customers are government agencies and departments. Our largest clients are U.S. federal government departments and agencies. Our federal government clients include every cabinet-level department, most significantly HHS, EPA, and DoS.
Our government work includes projects for federal, state, local, and international agencies, as well as subcontracted engagements performed for commercial clients whose end customers are government entities. 37 Our largest clients are U.S. federal government departments and agencies. Our federal government clients include every cabinet-level department, most significantly HHS, DoD, DoE, and DoT.
For the years ended December 31, 2024 and 2023, direct labor and related fringe benefit costs were 60.5% and 57.7% of total direct costs, respectively, and subcontractors and other direct costs were 39.5% and 42.3% of total direct costs, respectively.
The decrease in direct costs was primarily a result of terminated U.S. federal government contracts during 2025. For the years ended December 31, 2025 and 2024, direct labor and related fringe benefit costs were 61.4% and 60.5% of total direct costs, respectively, and subcontractors and other direct costs were 38.6% and 39.5% of total direct costs, respectively.
(7) Includes pre-tax gain from the divestitures of our U.S. commercial marketing and Canadian mobile text aggregation businesses. Non-GAAP Diluted Earnings per Share Non-GAAP diluted earnings per share (“Non-GAAP Diluted EPS”) represents diluted U.S. GAAP earnings per share (“U.S.
(5) Pre-tax gain related to the 2023 divestiture of our U.S. commercial marketing business which includes contingent gains realized in the first and third quarters of 2024. Non-GAAP Diluted Earnings per Share Non-GAAP diluted earnings per share (“Non-GAAP Diluted EPS”) represents diluted U.S. GAAP earnings per share (“U.S.
The growth in revenue of $56.5 million was driven by increases of $39.3 million from commercial clients, $7.4 million from international government clients, $6.6 million from U.S. state and local government clients, and $3.3 million from U.S. federal government clients, respectively.
This decline was offset by increases of $117.2 million, $8.5 million, and $6.9 million from our commercial, international government, and U.S. state and local government clients, respectively.
We recognized $5.7 million of pre-tax gains in 2023 fiscal year compared to $2.0 million in 2024 fiscal year. Provision for income taxes . The effective income tax rate for the years ended December 31, 2024 and 2023 was 20.2% and 14.4%, respectively.
Provision for income taxes . The effective income tax rate for the years ended December 31, 2025 and 2024 was 18.2% and 20.2%, respectively.
The decrease in amortization of intangible assets was due to having fewer intangible assets primarily as a result of the divestiture of our U.S. commercial marketing business in 2023. Interest, net . The decrease in interest, net was primarily due to our lower average debt balance of $474.0 million in 2024 compared to $613.5 million in 2023.
Interest, net . The increase in interest, net was primarily due to our higher average debt balance of $513.3 million in 2025 compared to $474.0 million in 2024. The average interest rate was 5.6% in 2025 compared to 6.6% in 2024.
(4) These are exit costs associated with terminated leases or full office closures that we either (i) will continue to pay until the contractual obligations are satisfied but with no economic benefit to us, or (ii) paid upon termination and cease-use of the leased facilities.
(4) These charges and adjustments are related to a previously exited leased facility which we will continue to pay until the contractual obligations are satisfied but with no economic benefit to us, and the closure of certain international offices.
We have successfully worked with many of our clients for decades, with the result that we have a thorough and nuanced perspective of their objectives and needs. We serve both governmental and commercial clients. Our government clients include those from departments and agencies of the federal government, state and local governments, and international governments.
Many of our client relationships span decades, giving us a nuanced understanding of their objectives and needs. We serve both government and commercial clients.
Our average interest rate inclusive of the impact of the swap agreements was 5.3% for 2024 compared to 5.6% for 2023. Other income . The decrease in other income was primarily due to higher pre-tax gains from the divestiture of our U.S. commercial marketing and Canadian mobile aggregation businesses in 2023.
Inclusive of the impact of the swap agreements, our interest rate was 5.4% and 5.3% for years ended December 31, 2025 and 2024, respectively. Other (expense) income .
Removed
Our commercial clients, which include clients outside the U.S., generated approximately 25%, 24%, and 24% of our revenue in 2024, 2023, and 2022, respectively. We believe that our domain expertise and the program knowledge developed from our research and analytics, and assessment and advisory engagements further position us to provide a full suite of services.
Added
Federal government clients generated approximately 43%, 54%, and 55% of our revenue in 2025, 2024, and 2023, respectively. The decrease in U.S. federal government revenue was primarily as a result of terminated contracts in 2025 due to the Administration’s changing priorities and the actions recommended by DOGE, as well as the disruption in the typical U.S. federal government procurement cycle.
Removed
We believe our prior and current experience with disaster relief and rebuild efforts, including after hurricanes Katrina and Rita and Superstorm Sandy, and the wildfires in Oregon, put us in a favorable position to continue to provide recovery and housing assistance, and environmental and infrastructure solutions, including disaster mitigation, on behalf of federal departments and agencies, state, territorial, and local jurisdictions, and regional agencies.
Added
Significant accounting estimates are more fully described and discussed in “Note 2 - Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements” of this Annual Report on Form 10-K. Revenue Recognition We generate our revenue by primarily providing services and technology-based solutions for clients.
Removed
We also see significant opportunity to further leverage our digital and client engagement capabilities across our client base. Our future results will depend on the success of our strategy to enhance our client relationships and seek larger engagements that span the entire program life cycle, and to complete and successfully integrate additional strategic acquisitions.
Added
The selection of the method used to measure progress requires judgment and, among other things, is dependent on the contract type selected by the client during contract negotiation and the nature of the services and solutions to be provided.
Removed
We will continue to focus on building scale in our vertical and horizontal domain expertise, developing business with our existing clients as well as new customers, and replicating our business model in selective geographies.
Added
The decrease in revenue was driven by a reduction of $279.5 million from our U.S. federal government clients, primarily as a result of terminated contracts in 2025 due to the Administration’s changing priorities and the actions recommended by DOGE, as well as the disruption in the typical U.S. federal government procurement cycle.
Removed
In doing so, we will continue to evaluate strategic acquisition opportunities that enhance our subject matter knowledge, broaden our service offerings, gain access to or expand customer relationships, and/or provide scale in specific geographies. Although we continue to see favorable long-term market opportunities, there are certain business challenges facing all government service providers.
Added
Revenue for the year ended December 31, 2025 includes subcontractor and other direct costs, which 44 decreased $52.8 million, or 10.4%, and totaled $454.0 million and $506.8 million for the years ended December 31, 2025 and 2024, respectively, and the margin on such costs. Direct costs .

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSee “Note 12 - Derivative Instruments and Hedging Activities” in the “Notes to Consolidated Financial Statements”. 49 As a result of conducting business in currencies other than the U.S. dollar, we are subject to market risk with respect to adverse fluctuations in currency exchange rates.
Biggest changeAs a result of conducting business in currencies other than the U.S. dollar, we are subject to market risk with respect to adverse fluctuations in currency exchange rates. In general, our currency risk is mitigated largely by matching costs with revenues in a given currency.
As a result, a 10% increase or decrease in the value of the U.S. dollar against all currencies would have an estimated impact on revenue of approximately 1%, or $15.1 million.
As a result, a 10% increase or decrease in the value of the U.S. dollar against all currencies would have an estimated impact on revenue of approximately 1%, or $15.9 million.
We use a sensitivity analysis to assess the impact of movement in foreign currency exchange rates on revenue. During the year ended December 31, 2024, approximately 7% of our revenue was generated from our international operations based on the location to which a contract was awarded.
We use a sensitivity analysis to assess the impact of movement in foreign currency exchange rates on revenue. During the year ended December 31, 2025, approximately 8% of our revenue was generated from our international operations based on the location to which a contract was awarded.
Based on our borrowings under the Credit Facility, a 1% increase in interest rates would have increased interest expense by approximately $4.8 million and would have decreased our annual net income and operating cash flows by a comparable amount.
Based on our borrowings under the Credit Facility, a 1% increase in interest rates would have increased interest expense by approximately $5.2 million and would have decreased our annual operating income and operating cash flows by a comparable amount.
In general, our currency risk is mitigated largely by matching costs with revenues in a given currency. However, our exposure to fluctuations in other currencies against the U.S. dollar increases as a greater portion of our revenue is generated in currencies other than the U.S. dollar.
However, our exposure to fluctuations in other currencies against the U.S. dollar increases as a greater portion of our revenue is generated in currencies other than the U.S. dollar.
Actual gains and losses in the future could differ materially from this analysis based on the timing and amount of both foreign currency exchange rate movements and our actual exposure. ITEM 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA The consolidated financial statements of ICF International, Inc. and subsidiaries are provided in Part IV in this Annual Report on Form 10-K.
Actual gains and losses in the future could differ materially from this analysis based on the timing and amount of both foreign currency exchange rate movements and our actual exposure. ITEM 8.
At December 31, 2024, we had seven interest rate swap agreements with a total aggregate notional amount of $275.0 million to hedge against changes in interest rates and offset potential increases in interest expense.
At December 31, 2025, we had six interest rate swap agreements with a total aggregate notional amount of $175.0 million to hedge against changes in interest rates and offset potential increases in interest expense. See “Note 10 - Derivative Instruments and Hedging Activities” in the “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCO UNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA The consolidated financial statements of ICF International, Inc. and subsidiaries are provided in Part IV in this Annual Report on Form 10-K. 49 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCO UNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.

Other ICFI 10-K year-over-year comparisons