ICF sees its 4 growth priorities holding firm in new administration

ICF believes four of the key growth drivers the company sees for itself and laid out at a late 2019 investor day as areas to watch will hold firm under the new Biden administration.

Two in particular may be intertwined for Fairfax, Virginia-based ICF in technology modernization and public health -- areas that are being highlighted during the coronavirus pandemic.

On ICF’s fourth quarter earnings call with investors Thursday, CEO John Wasson highlighted the White House’s proposal to include $9 billion in IT modernization and cybersecurity funding as part of a new $1.9 trillion COVID-19 relief bill likely to get through the Democratic-controlled Congress and get President Biden’s signature.

“We believe the new administration will likely drive critical IT modernization efforts that can support agency efforts to respond to COVID-19 and enhance delivery of digital services that citizens are demanding,” Wasson told analysts.

That will also apply for when the U.S. moves from the pandemic response phase to recovery, the latter of which Wasson said will require “modernization of disease surveillance systems and associated analytics” to detect and mitigate future pandemics.

Wasson acknowledged that contracts for work in the recovery phase will materialize but are “still a little bit early” given the U.S. is still in the response phase. But the work ICF is performing to support that response is largely through existing contracts and task orders under current vehicles.

ICF’s push for a greater IT modernization footprint took greater shape last year through the $255 million acquisition of Incentive Technology Group, which specializes in work on so-called “low code no code” platforms that rely more on graphical user interfaces and configurations versus hardware-focused approaches.

Bringing ITG in tow helped ICF string together several IT modernization wins last year with a combined $300 million ceiling value, Wasson said.

Fourth quarter revenue from U.S. federal agencies rose 19 percent year-over-year to $165.5 million. Full-year sales in that client set also climbed 19 percent to $666.9 million versus.

Overall fourth quarter sales of $434 million was 9.5-percent higher than the prior year period, while full-year sales of $1.5 billion registered 1.9-percent growth.

ICF also reported a 6.2-percent increase on the bottom line for the year to $143.2 million adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), which translates to a margin there of 9.5 percent.

The company’s financial outlook for this year sees between $1.525 billion and $1.575 billion in revenue.

Alongside IT modernization and public health, two other major growth drivers the company has emphasized in recent years are in disaster recovery, then energy and utilities. Those are also ones Wasson said he believes “will remain strong” in this administration.