ICF International (NASDAQ: ICFI) reported Q2 EPS of $0.89, $0.17 better than the analyst estimate of $0.72. Revenue for the quarter came in at $353.99 million versus the consensus estimate of $350.45 million.

Second Quarter Highlights:

• Total Revenue Was $354 Million, Down 3.5% Primarily Reflecting Lower Pass-Through Revenues
• Service Revenue¹ Up 3.5% Led by Growth in Revenues from Federal Government and Commercial Energy Clients
• Diluted EPS of $0.72; Non-GAAP EPS¹ Was $0.89
• EBITDA¹ Increased 3.7%; Adjusted EBITDA¹ Stable Year-over-Year
• Adjusted EBITDA Margin on Service Revenue¹ Was 12.4%
• Contract Awards of $282 Million; TTM Contract Awards Were $1.5 Billion for a Book-to-Bill Ratio of 1.0
• Positive Cash Flow for First Half, Substantially Above Last Year's Levels
• Business Development Pipeline Exceeds $7 Billion—
• Reaffirms Full Year 2020 Guidance—

"Second quarter results demonstrated the strength and resilience of ICF's diversified business model," said John Wasson, president and chief executive officer. Service revenue increased 3.5% year-over-year and 2.3% sequentially, led by our federal government and commercial energy businesses. Favorable business mix, higher utilization and lower G&A costs drove a 3.7% year-over-year increase in EBITDA and sequential increases of 30.9% in GAAP EPS, 7.2% in Non-GAAP EPS and 28.6% in EBITDA, on revenues that were stable with first quarter levels.

1 Non-GAAP EPS, Service Revenue, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA Margin on Service Revenue are non-GAAP measurements. A reconciliation of all non-GAAP measurements to the most applicable GAAP number is set forth below. Special charges are items that were included within our consolidated statements of comprehensive income but are not indicative of ongoing performance and have been presented net of applicable U.S. GAAP taxes. The presentation of non-GAAP measurements may not be comparable to other similarly titled measures used by other companies.

"We are very pleased with our results for the period, which reflected strong execution in several key areas of focus, including IT modernization and public health in our federal markets, commercial energy advisory and implementation projects for utility clients and disaster management work. Disaster management now is expected to account for approximately $110 million in revenues in 2020, due to less client insourcing than originally expected.

"Our contract awards in the quarter largely represented new wins at existing clients, notably $13 million in new COVID-related work for federal government clients, including support to our largest client, the U.S. Department of Health and Human Services (HHS), in collecting and analyzing data as well as communicating with healthcare professionals and the general public. At the end of the second quarter our business development pipeline reached a record $7.1 billion. We also have received notice of awards with an aggregate value of over $250 million, which we expect to be included in third quarter contract wins."

GUIDANCE:

ICF International sees FY2020 EPS of $3.50-$3.80, versus the consensus of $3.59. ICF International sees FY2020 revenue of $1.45-1.51 billion, versus the consensus of $1.48 billion.

"First half results represented a positive showing for ICF that enables us to reaffirm our full year 2020 guidance for revenue of $1.450 to $1.510 billion and EBITDA of $126.0 million to $136.0 million. GAAP earnings per diluted share are expected to range from $2.85 to $3.15, exclusive of special charges. Non-GAAP diluted EPS is expected to range from $3.50 to $3.80. Per share guidance is based on a weighted average number of shares outstanding of 19.2 million.

"We also are pleased to reaffirm our guidance for operating cash flow of approximately $110 million, significantly ahead of the $91.4 million generated in 2019.

"Our substantial backlog, recession-resistant revenue mix, strong balance sheet and record business development pipeline underpin our confidence in ICF's ability to operate effectively throughout this period of economic uncertainty and emerge as an even stronger company. Our civilian domain expertise in the high growth, high profile areas of IT modernization, digital transformation and public health; our qualifications and experience in disaster management and mitigation; and our leadership in energy efficiency and advisory work position ICF for continued progress in 2020 and accelerated growth in the periods beyond.

"We appreciate the tremendous commitment that ICF employees have shown to our company and our clients. The ICF culture has been a key driver of our growth thus far and has enabled us to perform well during this health crisis. A key tenet of this culture has focused on embracing diversity and, given recent events, we believe in this more than ever and are thus redoubling our efforts with respect to diversity, equity and inclusion. We have a message on our website that puts forth ICF's position on social justice, and we encourage all of our stakeholders to read it," Mr. Wasson concluded.

For earnings history and earnings-related data on ICF International (ICFI) click here.