In talking with Wall Street, CEO John Wasson describes technology modernization efforts as continuing and programmatic work as more impacted at its largest federal client. ICF is holding to the financial outlook it presented at the start of this year and to expectations of a return to growth in 2026, even amid the bumpy ride 2025 has presented the company and industry.
Calendar year 2025 began with the start of the Trump administration’s push for contract spending cuts, primarily through the Department of Government Efficiency, and could end with the government still in a protracted shutdown.
During ICF’s third quarter earnings call with investors Thursday, chief executive John Wasson provided an overview of its work that continues during the shutdown and what is on pause until the reopening.
Technology modernization efforts continue to move ahead, including new awards, with expectations of those to ramp and further modifications to take place. Wasson said ICF is “less concerned or would not expect a slowdown or disruption in the ramp-up of those efforts.”
ICF’s programmatic work at the Health and Human Services Department is another story altogether.
“Many of those agencies are impacted by the shutdown. That’s also impacted the procurements there,” Wasson said. “That portion of the business, I think, will take longer to rebound post shutdown in terms of procurements and that’s certainly reflected in how we’re thinking about Q4 and the guidance we’ve given.”
Wasson characterized ICF’s federal business mix as roughly an even split between the technology modernization and programmatic aspects. HHS is ICF’s largest federal customer, according to the company’s second quarter investor presentation, and was already affected by DOGE’s activities over the course of 2025.
At this juncture, ICF expects a $25 million impact on revenue and $7.5 million impact on gross profit for the fourth quarter. Wasson described that as a “push to the right,” based on past precedent.
“Typically in prior shutdowns, once the work comes back, we will do that work,” Wasson said. “If history is any guide at that foregone revenue, we would recoup it over the remaining life of the contract in future years, and so we would expect for that to happen again.”
Third quarter revenue of $465.4 million was down 11.1% from the prior year period, while profit of $53.2 million showed a 9% year-over-year increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
ICF’s guidance for 2025 included expectations of a 10% revenue decline. For the month of October, ICF expects an $8 million impact on revenue and $2.5 million impact on gross profit.
Also on the call, Wasson said he and ICF’s other four named executive officers will take a 20% base salary reduction for the duration of the shutdown. The salary cut will be treated as lost wages and not be repaid once the shutdown ends, ICF said in a regulatory filing.
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