ICF's subject matter knowledge-based approach to the cyber market showed returns last year and the company is intent on gaining more.
ICF has been laying some groundwork for a return to growth in its federal government business and started to see some success with a pair of large cyber wins as part of that.
During ICF’s fourth quarter and year-end earnings call Tuesday, Chief Operating Officer John Wasson indicated the company is far from done on that front.
The Fairfax, Virginia-based company is “bidding more aggressively on cybersecurity work, which is slated to increase at the Department of Defense and across civilian agencies,” Wasson said.
“Given the underlying trends in those markets and the focus across the government on cyber, we're seeing a lot of opportunity,” Wasson also said. “Obviously, given the relationships we have throughout civilian agencies, as budgets go up to support cyber work, it's generally a positive trend for us. And so that is a market where we are seeing increases in spend and growth.
During 2018, ICF won one of two spots on a potential eight-year, $175 million contract for cyber research-and-development work with the Army Research Laboratory that includes both demonstrations and technology protoyping.
The other major win Wasson touted is a task order worth up to $50 million to work with the Air Force on shifting its core cyberspace function to a different entity within the service branch.
ICF’s approach to the federal cyber market is somewhat different from other government technology contractors in that the company largely stays out of systems integration-type work and largely concentrates on the strategy and implementation side.
Rather, ICF emphasizes the subject matter expertise of its employees to try and offer a blend of program knowledge with technical skills to “bring something a little different to the customer,” Executive Vice President Ellen Glover told me in September of last year.
That pair of wins with the Army and Air Force contributed to almost $865 million in federal contract awards last year for a book-to-bill of 1.6x, or how fast the company grows its backlog versus drawdowns from it to recognize revenue.
Most of those contracts were won during the second half of last year, Wasson said, and “sets us up very well for growth in 2019 and beyond.”
ICF’s new annual regulatory filing for 2018 it generated almost $543.9 million in revenue last year, down from the $550.8 million recorded during 2017 and $563.5 million for 2016.
Overall revenue for ICF has climbed however to a company record $1.3 billion last year. Compare that to respective figures of $1.2 billion for 2017 and $1.19 billion for 2016.
The company expects continued overall sales growth this year to $1.45-$1.5 billion. That includes the impact of $3 million in lost revenue from the five-week government shutdown of many civilian agencies. ICF expects to recapture those sales.