ICF International (ICFI) Q2 Earnings Beat, 2022 Guidance Up

ICF International, Inc. ICFI delivered mixed second-quarter 2022 results wherein earnings beat the Zacks Consensus Estimate but revenues missed the same.

The stock has gained 5.9% since the earnings release on Aug 3, as ICFI’s guidance for 2022 was strong. Revenues are now projected in the range of $1.760-$1.820 billion (prior view: $1.7-$1.76 billion). The midpoint ($1.79 billion) of the guidance is higher than the current Zacks Consensus Estimate of 1.75 billion.  ICF expects 2022 non-GAAP earnings per share to be $5.50-$5.80 (prior view: $5.15-$5.45). The midpoint of the guidance ($5.65) is above the current Zacks Consensus Estimate of $5.53.

Non-GAAP earnings (excluding 36 cents from non-recurring items) of $1.33 per share surpassed the Zacks Consensus Estimate by 2.3% and rose 11.8% on a year over year basis. However, revenues of $423.1 million missed the consensus mark by 1.5% but climbed 7.8% year over year owing to rising service revenues (up 9% year over year).

Revenues in Detail

Revenues from government clients came in at $316.4 million, up 13.9% on a year-over-year basis. The U.S. federal government revenues of $225.2 million increased 23.6% year over year and contributed 53% to total revenues.

ICF International, Inc. Price, Consensus and EPS Surprise

ICF International, Inc. price-consensus-eps-surprise-chart | ICF International, Inc. Quote

The U.S. state and local government revenues of $64.1 million moved up 9.5% year over year and contributed 15% to total revenues.

International government revenues of $27.1 million were down 27% year over year, contributing 7% to total revenues.

Commercial revenues totaled $106.7 million, down 7% from the year-ago quarter’s figure and contributed 25% to total revenues. Energy markets and marketing services contributed 62% and 27%, respectively, to commercial revenues.

Backlog and Value of Contracts

Total backlog and funded backlog amounted to $3.2 billion and $1.5 billion at the end of the quarter, respectively. The total value of contracts awarded in the first quarter of 2022 came in at $346.1 million for a quarterly book-to-bill ratio of 1.21.

Operational Results

Adjusted EBITDA of $44.1 million rose 10% from the year-ago quarter’s figure. Adjusted EBITDA margin on revenues of 10.4% increased 20 basis points (bps) year over year. Adjusted EBITDA margin on service revenues was 14.4%, up 20 bps year over year.

Balance Sheet

ICF exited the second quarter with a cash and cash equivalent balance of $6.1 million compared with $7.4 million recorded at the end of the previous quarter. ICFI had a long-term debt of $435.1 million compared with $449.7 million at the end of the prior quarter.

ICFI used $13.4 million cash from operating activities, while capex was $4.55 million. ICF paid out dividends of $2.64 million in the quarter.

Dividend

On Aug 3, 2022, ICF declared a quarterly cash dividend of 14 cents per share, to be paid out on Oct 13 to its stockholders of record as of Sep 9.

2022 Guidance

Service revenues are expected in the band of $1.275-$1.325 billion (prior view: $1.225-$1.275 billion).

Adjusted EBITDA is expected between $186 million and $198 million (prior view: $168 million and $180 million). Operating cash flow is expected to increase to $140 million in 2022. ICF currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performances of Some Other Business Services Companies

Equifax EFX reported mixed second-quarter 2022 results, wherein earnings beat estimates but revenues missed the same.

EFX’s adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate by 3% and improved 5.6% on a year-over-year basis. Revenues of $1.32 billion missed the consensus estimate marginally but improved 6.6% year over year.

IQVIA Holdings IQV reported solid second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

IQV’s adjusted earnings per share of $2.44 beat the consensus mark by 2.1% and improved 15% on a year-over-year basis. Total revenues of $3.54 billion outpaced the consensus estimate by 1.2% and increased 3% year over year.

Omnicom Group OMC reported impressive second-quarter 2022 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

OMC’s earnings of $1.68 per share beat the consensus mark by 7.7% and increased 15.1% year over year, driven by a strong margin performance. Total revenues of $3.6 billion surpassed the consensus estimate by 4.4% but declined slightly year over year.

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