Professional consulting firm ICF International NASDAQ:ICFI missed Wall Street’s revenue expectations in Q2 CY2026, with sales flat year on year at $474.5 million. On the other hand, the company’s full-year revenue guidance of $1.93 billion at the midpoint came in 1% above analysts’ estimates. Its non-GAAP profit of $1.86 per share was 13% above analysts’ consensus estimates.
ICF International (ICFI) Q2 CY2026 Highlights:
- Revenue: $474.5 million vs analyst estimates of $477.6 million (flat year on year, 0.7% miss)
- Adjusted EPS: $1.86 vs analyst estimates of $1.65 (13% beat)
- Adjusted EBITDA: $53.37 million vs analyst estimates of $52.79 million (11.2% margin, 1.1% beat)
- The company reconfirmed its revenue guidance for the full year of $1.93 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $7.10 at the midpoint
- Operating Margin: 8.4%, in line with the same quarter last year
- Free Cash Flow Margin: 19.8%, up from 9.7% in the same quarter last year
- Backlog: $3.3 billion at quarter end, down 2.9% year on year
- Market Capitalization: $1.54 billion
John Wasson, chair and chief executive officer, said, "Second quarter business trends in our markets were in line with our expectations and continued to reflect the benefits of our integrated business model. Revenues from commercial clients increased 5.9% year-on-year, federal government client revenues continued to improve on a sequential basis driven by technology modernization, and revenues from international government clients climbed by 35%. This enabled us to report total second quarter 2026 revenues that were similar to prior-year levels, in advance of our return to year-on-year growth for 2026 with positive quarterly comparisons beginning in this year's third quarter.
Company Overview
Operating at the intersection of policy, technology, and implementation for over five decades, ICF International NASDAQ:ICFI provides professional consulting services and technology solutions to government agencies and commercial clients across energy, health, environment, and security sectors.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $1.82 billion in revenue over the past 12 months, ICF International is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.
As you can see below, ICF International grew its sales at a tepid 3.1% compounded annual growth rate over the last five years. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. ICF International’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.3% annually.
We can dig further into the company’s revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. ICF International’s backlog reached $3.3 billion in the latest quarter and averaged 5.7% year-on-year declines over the last two years. Because this number is in line with its revenue growth, we can see the company effectively balanced its new order intake and fulfillment processes.
This quarter, ICF International missed Wall Street’s estimates and reported a rather uninspiring 0.3% year-on-year revenue decline, generating $474.5 million of revenue.
Looking ahead, sell-side analysts expect revenue to grow 8.6% over the next 12 months, an improvement versus the last two years. This projection is healthy and implies its newer products and services will catalyze better top-line performance.
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Adjusted Operating Margin
Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.
ICF International’s adjusted operating margin has more or less stayed the same over the last 12 months , averaging 8.1% over the last five years. This profitability was mediocre for a business services business and caused by its suboptimal cost structure.
Looking at the trend in its profitability, ICF International’s adjusted operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
In Q2, ICF International generated an adjusted operating margin profit margin of 8.4%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
ICF International’s EPS grew at 6.3% compounded annual growth rate over the last five years. This performance was better than its revenue growth but doesn’t tell us much about its business quality because its adjusted operating margin improvement was less than peers.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For ICF International, its two-year annual EPS declines of 3.3% show it’s continued to underperform. These results were bad no matter how you slice the data.
In Q2, ICF International reported adjusted EPS of $1.86, up from $1.66 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects ICF International’s full-year EPS to grow 15.9% from $6.50 to $7.54.
Key Takeaways from ICF International’s Q2 Results
It was good to see ICF International beat analysts’ EPS expectations this quarter. We were also happy its full-year EPS guidance narrowly outperformed Wall Street’s estimates. On the other hand, its revenue slightly missed. Overall, this print had some key positives. The stock remained flat at $85.64 immediately after reporting.
Big picture, is ICF International a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. .