Earnings call transcript Q2 2023

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Operator

Welcome to the Second Quarter 2023 ICF Earnings Conference Call. My name is Tess and I will be your operator for today's call. [Operator Instructions] I will now turn the call over to Lynn Morgen of Advisory Partners. Lynn, you may begin.

Lynn Morgen

Thank you, Tesh. thank XXXX joining performance. and ICF's to everyone, quarter second afternoon, you us for review Good With Wasson, and Chair today and us from CEO; Barry ICF Broadus, are John CFO.

Morgan, Officer. is Chief them James Joining Operating

our we will of ICF differ actual are X, events could SEC understanding about August subject During this a expectations you and conference make statements I of you for management's These to performance. filings future release to those cause number press and materially, and forward-looking refer our to risks. results in assist statements to XXXX that call, risks our discussions

some second XXXX In information addition, will ICF's statements this in the may, to We presented any call developments change. to cause statements today. do of but on call turn are to today, John our I CEO, that update views Wasson, light. as over our future during obligation made anticipate at quarter our the the that specifically consider will performance. We discuss now views John? based Please disclaim so. to point, elect forward-looking to

John Wasson

Thank the you, this we you Lynn, and us for afternoon business transactions our outlook. announced QX our and to review joining thank results, all

second I will ICF. There the are there's lot discuss move performance. growth underway at on developments the quarter initiatives our to As quarter and the several highlights recent a takeaways of and to focus today, second on quickly then comment from on key

and of are demand. this well First, with quarter excellent services ICF. XX%, was an capabilities how increased for aligned our Revenues indicative market

with represented mid-XXXX. our by XX% comparisons we completed and in key markets growth the revenue led acquisition was in quarter year-on-year SemanticBits' Second organic growth, together growth strong

represented second wins areas year-on-year, competitive business priority strong. Second, new positioning ICF's and be XX% wins in in our of we up quite contract second another [inaudible], of half quarter awards indication contract expect Over XX% of to were spending.

our expectations in the this growth for ratio year supports industry X.X significant XXXX. is and the book-to-bill and XX-month trailing among into revenue of highest Our

pipeline ended growth year of our the attributable we development XX% emerging from contracts, which bid record IIJA to ago and billion, increased ability business to are growth our to the scale our $XX.X Third, levels. opportunities and larger This thanks on is represents the quarter almost with capabilities, IRA expanded to that our a legislation. compared

we growth areas support our Lastly, position key growth strengthened long-term strategy. that executed transactions in ICF's and

Energy nearly for Our performer energy a client market, XX% disaster and environment, infrastructure growth, be primarily implementation this XX%, investors, second work market and accounted energy of for commercial increased large second that organic quarter of global advisory for revenues. spans includes recovery the continue in utilities our standout services environmental and of and to which other representing the and utilities Revenues government quarter. market for and energy Commercial energy providers. utilities, programs over energy set, and slightly part developers efficiency represents a distributed and

energy programs, permit, analyze, that expertise connect, the services advisory available plan and portion tax of work new finance, also and financing large particular IRA. strength the a for new multiple energy Commercial and There strong in quarter electrification, awards projects increased our projects is the year-to-date. and to second won is equity. was focusing in on and necessary country material operate construct, for renewable arena. services energy several the our A monitor in energy pilot through to across of and offshore. commercial contract credits we innovative their provide the XX% This XX% IIJA made as expanded and We environmental funds planning clients greater and saw quarter are efficiency and renewable light clients utility revenues up of in programs demand

firm data decision-making engineering on resources storage and of and CMY grid, analytics today's will the utilities, electrical expedite interconnection team the work municipalities including next-generation issued provides cooperatives. work. power our demand more Energy a acquisition developers Federal should electric which we Europe advisory and Commission Solutions, release, expand and drive order has solutions and informed of should XX electric last an In The solar the new market drive and electrical that that and technology week grid the CMY sector. utilities investments. is within CMY with that engineers U.S., about who which Asia, announced to Solutions for a Regulatory wind, additional of investor-owned our modernization addressable across

for delivering which excellent have us. interconnection, We results addressable as renewables commercial an CMY this resilience with and expands us the clients, record can CMY and ability for compelling and well of positive have giving together for our a providing market technology us track and capabilities needs made successfully government partnered our that support projects management and our by distribution grid we in several our transaction data energy as upgrades substation client to clients clients. offer new

of we also strong in second Services, quarter and our know, all energy, you commercial to experienced categories. client cut addition In demand our as across for Environmental Climate the which,

newer growth EPA, USAID NASA, quarter X Climate DOE, projects our business Second and in large utilities. East expanding was driven by Coast at

and in assessment, one has demand risk resulting and management large-scale decarbonization the for sector disclosure funding programmatic private funding IRA. if government, and IIJA leading the including climate and we of programs, not practice are leading, including seeing the ICF in the by for country, of the strong

over of in and planning disaster management quarter. monitoring and increased account in which revenues, local over total services state second XX% environmental and XX% the for our Our

level continued from interconnections our double-digit which sea in new to rise, work IRA rate another are quarter. the end of Pent-up example and Revenues the flood are front at fire, climate a risk, investment significant energy demand required that planning increasingly such ICF's environmental considering projects are and growing infrastructure equity, and of scopes recovery the grow resilience, play post of the COVID competitive and at and market to IIJA disaster second advantages. is that driving

a with the the contract recovery million new just to work U.S. recovery our provide continued funded Rico territory accelerate to services management We territory. consulting in $XX.X Puerto disaster efforts and announced federally across

our and state reside. is programs, for small which from contribution and social clients. market health our government, market majority Our of and and public modernization the part the work representing services This of and local is to federal where minor comprised a otherwise is government the services primarily IT health international clients commercial

XX% revenues SemanticBits revenues. second the quarter, were of XX%, growth total accounted organic quarter and of acquisition its In this second reflecting both up in for market the

strong and health funded. have X We SemanticBits that see areas which well increase share runway continue IT the resulting bipartisan we over opportunities of and Department growth to X health second bid modernization the Services, to tied X have of expect in garnered acquisition, been from our IT specific synergies significant market support to months. the Human Health modernization to We revenue and next Public are see public quarter. to the year-on-year for in and historically

our our is the in larger strong, seen our programs we see Also, and across opportunity social set. pipeline to material federal HHS expect in client and is past scale opening greater very more at future. this Similarly, in more government the for us area and and growth have

growth and AI seeing amongst increased and opportunities increased we use well clients, XX% this from Further, period regard arena. federal X% in federal government of in continued to with ICF federal to from trend. outlook interest the the year and are for our pipeline sequentially, last federal similar government benefit government supporting our is Our the opportunities, positioned

In machine fact, and been clients. have our we AI federal years with deploying for learning

various in have into technologists source been and approaches automate As no-go to a solutions, platforms, our platforms. same these continue a to novel we to of and leader generative to X,XXX time, and capabilities enhanced of AI of the developing AI way productivity platforms in efficient leveraging embedded migration the the generative At enable open improve developer cogeneration our and own shift corporate and take functions more as including ICF. and advantage to to AI employees local at will AI the productivity see experience technology streamline modern

generative year, for utilized beginning AI In use productivity within to to of client-related enablement cases this identify ICF. for and be team we and efforts the both internally and established Gen increase a AI at work up fact, develop

that financial marketing signed commercial programs Lastly, in loyalty our sell integrated the were sale ICF services to set commercial agreements and announced earnings in communication of release, today's Included our we definitive group. recently This a of growth group the and has engagement utility communication to clients. the important contributed and consumer provided brought we for clients. have provide ICF's services capabilities government and and that our to

commercial we the do As we growth core business. this and focus our to our areas become client and made was key and energy thus government however, sets, group mission-related the less what increased decision divest to have has within markets on

in call close provide offered are expected acquirer, the leadership We Barry and the effect Barry senior and details the of acquisition to remarks. transaction that, CMY quarter, in turn positions financial and staff pleased been on additional especially his the the the is to the a our With that Broadus over have third for by review. will Barry? group's net CFO, divestiture this I'll

Barry Broadus

second you, I additional details XXXX. of everyone. share will our good now in of performance Thank and quarter John, afternoon, financial the

As our second July with which growth XX.X% XX% Revenue of local of organic together second result growth, our and year-over-year reflecting of acquisition state clients, XX% government revenue was double-digit and energy million. the revenue. strong federal, John for coupled our increase which from quarter noted, quarter to of revenue year SemanticBits we last had performance, drove and broad-based, of a increases was $XXX.X commercial accounted

the acquisition second of which and lower Several of period represented for quarter. revenue, the same basis last timing higher decline in and total the last SemanticBits, year's which margins generates XXX quarter Gross decrease, the including EBITDA $XXX.X points to of contract costs is XX.X% but direct margin ramp-ups. year's Subcontractor contributed XX.X%, as was a certain gross second a factors compared last other with year. million and of to projects margin line of

basis of improvement to indirect margins effective of in see this adjusted points second We due to and year. expect scale expenses the indirect revenue expenses. sequential XXX Year-over-year, management XX.X% half our the greater in declined of progressive to gross

our to our selling investments a and million, $XXX.X continue slower to than which significantly XX.X% we to long-term and technology was pace indirect increased As expenses year-on-year revenue make in at growth. people support our growth,

from adjusted last $XX million year-over-year. of second $X.X Interest Second $XX.X to year's XX.X% level. increase and to increased an million million, for million, expense EBITDA $XX.X was quarter quarter EBITDA XX.X% the increased

The coupled to our was acquisition expense anticipated. of CMY, forecast, be interest rates which with not embedded our we higher in in the than second increase quarter interest drove prior

impact than the optimization we quarter tax implemented. more of higher second was our EPS interest benefit The from strategies expense the offset by

or this forecasted million $XX.X $X.XX was per the expense or optimization strategies the million remainder second and additional benefit in severance expect inclusive We tax-affected the per year-over-year Net of our $X.XX mitigate higher for charges. share income M&A share year. interest of of to from tax quarter, this $X.X diluted

second which tax a EPS year-end benefit beyond net year the income based incremental rate tax was diluted share our quarter ETR from upon. guidance Our and included $X.XX estimated per full

quarter the the benefit with net share. diluted to Second was of our million also $X.XX year-to-date XXXX and pleased which per includes strategies. long-term $XX.X or EPS cash share, We're XX.X% quarter increased $X.XX flow very income generation. per Non-GAAP of tax second company's

$XX.X Our and on our in million XXXX. second first half quarter cash ahead results of significantly year-to-date flow the from a basis, operations of $XX.X was million

primarily quarter. to cash improved compared totaled second outstanding generation performance also the to to key $XX half driver Year-to-date to cash compared days the as XXXX. ongoing capital initiatives as Our management the our of days in million XX contributed XX $XX.X favorable a last expenditures first technology were of investments sales million in year's related days and of

the our quarter. balance was to the similar at first million, the end of debt of at end debt Our June $XXX.X

is of during through Our was The debt the CMY executed the inclusive of cash generation second of QX. from purchase quarter largely flow Solutions. the funding acquisition operations

X.XX% quarter to adjusted net the first the of quarter. end at X.XX ratio at leverage Our was end compared

marketing additional X the down year, ratio our we no this net be from Assuming our divestiture acquisitions commercial group. turn, expected to year-end of proceeds leverage inclusive approximately expect the of

rate swaps, company which $XXX the In rate debt. our during of fixed additional second of debt quarter, XX% increased total to an million be approximately the addition, executed interest

addition With the new average all-in swaps, now stands at X.XX%. of interest these our rate

support in to offset In addition continuing dividends, half of consider programs strategic making year growth, shares We impact repurchasing reduction, to to repurchase to shares. our million employee allocation paying $XX.X first XXX,XXX used and incentive acquisitions. investments debt capital to the this priorities include the of organic

remaining million plan. repurchase $XX.X have authorization We current stock under the

We cash of payable record also $X.XX share, per XXXX, to September announced X, October dividend on today a shareholders XX, XXXX. quarterly on of

is be essentially this emphasize to which to marketing our with commercial second half revenues in I first want as part compared Now to due divestiture help the net the the flat lower divestiture group, acquisition. you financial half year. that models, your will million offset will our in of the to towards generated weighted second this revenue acquisition our the part by and of effect The latter from the $XX the approximately the CMY by year of half of revenue

reaffirming and our group. As of John of revenue the are which non-GAAP acquisition our is previously for stated, guidance marketing EPS we inclusive CMY commercial both the divestiture XXXX, pending and

In potential impact the addition, commercial our onetime associated and stranded facilities will any guidance. with associated noncash divestiture marketing gain charge group non-GAAP not the EPS with

move guidance metrics. I'll to key on other Now

our expected million. to should of and to to be amortization average debt rates to be previously expenses depreciation million mentioned. range Our is of expense balances $XX I to of Interest million from previous as be of in expected million, higher in range $XX approximately million. to higher $XX $XX -- resulting forecast compared interest $XX are million approximate now the million Amortization $XX is and the intangibles $XX

Our approximately XX.X% the tax of tax this first be compared rate rate to to as to with specifically, first XX% half expect at XX% to in half of rate to based -- year, we more third projected now the for on second be previously in we the XX%. the in our half quarter range year year tax guided the this with the the of approximately and the be

is $XXX flow projected be cash million. Operating to

no count anticipated diluted be our million financial to million. have approximately our measure revenue between we costs. will on not public included direct to On a million We weighted in line to other be $XX will and $XX investor are expect subcontractor revenue our removed Service expenditures $XX share capital information and presentations note, is reports company in The continue it final published our service stated documents. and with the and guidelines. recently SEC fully average non-GAAP be other provide longer and as of filings,

And I his with call back to for closing will turn now John the that, over remarks.

John Wasson

Thanks, Barry.

year our full We reaffirm to guidance. are pleased

range $XXX We revenue be estimated costs of other drug billion, anticipate revenue. approximately expect is XX% of to and from to EBITDA XXXX total we will subcontractor $XXX total to $X and $X.XX billion million $X.XX. expected XXXX. in million at $XXX of to cash and is projected be to flow Operating approximately charges. expected special exclusive $XXX Non-GAAP is GAAP EPS is EPS $X.XX $X.XX, from to to million range

to group to energy continue was strategic CMY resources the us execute marketing acquisition in we ICF technology commercial fully the The And have of our existing quarter, to while share and on sale opportunities. future streamline enabled identified. we our increased markets greater people second the and In to to key our effectively contracts demand invest growth growth from that of the we of anticipate positioning with a support decision commercial clients. business capture an deploy our our aligns even

to continued Our pipeline point billion of $XX.X development trailing ahead. with industry-leading growth record book-to-bill XX-month a X.X, ratio business together

the services all society provide well I justice natural protection report, Additionally, and as in people support saving, to we social ICF highlights corporate areas. the our its reduction on development which carbon you we health, programs programs. of as of through our that and recently are impact are education, proud impacts and resource released these in review energy citizenship having clients of encourage

With up we'll that, for questions. it open operator,

Operator

Instructions] [Operator

Vafi Joseph from from be will question first Our Canaccord Genuity.

Joseph Vafi

there afternoon. you strong and where Good Everyone steady said John, on again, results. second of opening circle once back to solid you would some and half your -- expected congratulations everyone. thought, Hey, just a I your that I the deals IIJA signed, like. are the comments But to say going there's environment bit and it's it's be little a to in and unlike you of the tailwinds bookings. to know lot unless a relative solid. the out And I

And any some a there, solid July? I'll follow-up. maybe already just color perhaps bookings So in have happened then

John Wasson

very we Sure, strong first have I'd Joe. results, obviously, all, I appreciate a in record and question. saw of the Well, pipeline. heard a the pipeline, you say, as

our certainly our federal, QX, again, state years and and and year, strongest for but across and also generally know, the the wins couple As QX some in quite you year of awards fiscal last awards, has end local. our [inaudible] the commercial far last been driven also is over of away of government strong, the with quarter with

And size that QX the strong I quite results. the QX strong that so leading much pipeline quite the in I of and confidence amount QX, of we for degree strong, and of final the is differ significant think were we proposal the given pipeline be sales of like QX the very and negotiation high year, have a and submitted last a where or do obviously is think the opportunity, will and in wins award

think clear should so think driving what's that's visibility play have Again, of And I I awards we the those out. how confidence.

Joseph Vafi

know then of I but you about size feels it player kind while. lot having And scale a you've size I scale for mentioned the it. of for that mean a Got also bid, like scale verticals. a a in and kind and had you're kind of of bigger

wanted your just sneak I then John, those more size average and drill these in. that relative to comments too, one to down And deal you're might So seeing days? size into

John Wasson

I area the helping really Sure. the IT last scale us years is know, long size the Joe, I way we've there. the several the a on I mean, mean and modernization is come as where technology think front. you over and

have As I our we remarks, X,XXX technologies. said in

$XXX technology $XXX numbers have We business. revenue of million million in round

area and able capture And and opportunities. pursue where are so increasingly that's we opportunities, larger an larger think seeing to I we are

combine to CMS and as open the and the also that in ICF that has on source given legacy deeper bring SemanticBits has and about, with capabilities a think technology capabilities really bid into scale I low-code larger CMS. acquisition, with the within talked the no-code ICF we opportunities position us

we SemanticBits And leverage then into capabilities open broader also client base. our can source the civilian

emphasize only really so I'd thing coming scale I second the think energy to And is to wouldn't fore of mean, is The growth. our I results, on say right respect other I as as with the terms business saw technology. I in here quarter mean, you to certainly now, the in

I see think a efficiency And so scale the all area. think in we see on to and we have in opportunities obviously grew there continue -- commercial of and I XX% energy. large lot opportunities, think I energy we

on that's emphasize think I the side. would I so And what scale

Joseph Vafi

Got guidance more. the acquisition coming just it moving some Maybe it without P&L a takes kind M&A kind in the marketing of accretive. been some those any M&A. ask that little of core of to the EPS know EPS it. drill and I I then in But here ask was sale And there the reiterated, have divestitures. you're doing if CMY's with second there's to could to going to lose upside EPS because be there was better, reiterated to started bit a and coming of are add get and of we little from, if how puts one kind just the business with half -- more on in, with parts. guess, any I'd would and I thought But color down

Barry Broadus

question. thanks for Joe, the

guidance from on would will the any stated have think for we think of given reaffirming certainly including help that that divestitures divestiture. as implemented the tax are lost non-GAAP different strategies I EPS year. parts, I this moving that the we the that the we've offset We all strong and EPS the

we like feel this for solidly that So there we're year.

John Wasson

given EPS exactly at would energy, at from It end commercial smaller revenues what acquisition and guidance -- the are say, the is divestiture just commercial look divested line low perspective, of million. business. the business. why Its would and the marketing are revenues on the of we it with The revenue the what were the our marketing we'd we're shift commercial federal I high add I say which expect down, $XX our of how gave commercial Barry for we energy. end CMG is business, that. to think the of we front. at mid what would kind how the on bottom earnings the coming on well, I is CMY just energy a than And to a CMY, divesting and million $XX commercial business margins margins

relative perspective, the I or less revenues. given end margins from So EPS the more day, and would a of at of say, the an kind loss the

Operator

We Sommer Securities. from Truist have Tobey

Tobey Sommer

Thanks.

at strong back look for the pretty towards you expectation contract If year. half in of your this

the like IIJA If you of from those, it strong? of composition and your your are the Or that budget vantage and/or them what is way point, at to look climate bill -- regular source of the is they that sort makes spending by customers? related

John Wasson

at expect I'd the the them that, X Yes. I to I areas. I mean, say Tobey, see pipeline I we're think high seeing in a level, growth and the across guess the would growth awards.

would I so the across local. and federal, so And is and -- state pipeline commercial, -- expanding and

it's my so drivers. actually X acceleration I in is our growth across those said Joe's broad-based commercial do think And on Having to question business in I showing I said, I response as energy said remarks that that, here. said and

that broad reported from we a in in the IIJA and think in programs business across quarter, to I awards. that pipeline here utility to climate, opportunities advisory our And pipeline, second our across for have to our total planning. way environment --

million approaching we're for pipeline $XXX think about I IIJA opportunities.

about I we're awards to million XX think here. up

IIJA momentum seeing see on in so we the the we some half positive said front, second which And thought we we are year. would the of

and a of market, impact lot we're IRA, the on interest is positive that solar the utilities, and lot a time around activities of developers, with of very seeing investment on economics which for think pipeline. the a wind our I particularly

think playing growth XXXX. go said indication it's And into And even our things those and into I positive just it we way. positive. up not potentially significant amount -- sets for the a that remains momentum areas. so in said, a seeing And it's as IRA contents IIJA us I say as would are we're built I further as think I've from from I've -- XXXX before, there's think we that a I out of positive

Tobey Sommer

from I you don't crystal curious fourth fiscal particular assume Okay. What guidance have get into of but you your does the it, a quarter. calendar federal XXXX assumption budget or as you predict sort know have can't a CR. what ball you and

John Wasson

think have goal Obviously, potential we we haven't I -- the we long-term Day do double-digit growth at se mean single-digit we're sheet our I and articulated our given yet. growth over guidance balance mean, through leveraging for XXXX. time I XXXX per around high organic the for with Investor

it's we'll I Certainly, think momentum a I federal think assuming areas. continuing think, better And priority what results is our areas side, the would budget those than resolution. generally, either has strong backlog bipartisan, momentum to in in those we we those, assumption have in the do remained IT we that health and budget. the civilian deliver Ideally, given that we've will we're expect our with we'll modernization and average public budget. a frankly, tended that fact have That's of through be the given have with very the a discussed on continue have to a the place markets, contract increase I in high and so awards to to have XXXX.

there cuts think be will or budget there there's if we're I not I either are shutdown government a -- obviously, or But resolution. expecting. be a we're what Obviously, continuing a mean, unexpected generally, unexpected assuming will

Operator

will question Associates. Kevin from Barrington Steinke, next We our have Research

Kevin Steinke

the divestiture the of Good just about ask marketing afternoon. commercial I group. to with wanted

to of retain the government provide those forward within and key they serve you bases? that that you engagement you utility You your that the going capabilities to those growth of your communication services with helped even are that still going mentioned clients. of the client serve some to -- divestiture after company, some Do

John Wasson

Yes.

of a I separate communication mean, services question. be is within clients. brand. our business federal to staying have part that's It's next That's to our $XXX within ICF. business, federal sub make key our so our the me resides a ICF Let of and ICF that business, we provides government with That clear, million going north business business. There's and marketing a no very that good Kevin. group and

core programs. support the our and business set our utility business, are we'll Those We our work. people to they commercial in particular, with in ICF, other with efficiency all energy energy also have that a continue people in are of market, communication and energy do staying that commercial embedded

Brussels. And have of international also marketing communications with an then And that's remaining us. we business out

businesses in with stand-alone the those on the remaining de marketing all interaction firm, but bit been operating There's minimis. of they've basis. a little a So commercial group, of it's

And business, those marketing, so some which for we're clients, consulting our core part hospitality, business capabilities part of kind -- skills transformation we travel, more all a not good all who packaging all super retail, thing the that services core of the innovative are a do really of today which broadly we commercial keep marketing the core and selling the those included The we'll hospitality, people. is business, and all serve.

And kind divesting of transaction. what this with so we're that's

Kevin Steinke

Okay. That's Understood. helpful.

and service to a internally that to although that monitor of be and revenue, Just the health margins to overall business going your the continue of progress to look at metric ask business? it's investor to wanted mentioned going also of communications anymore. not the part Is you be about you

Barry Broadus

Barry. core the is Yes, of question representation yes. think very question. that at Thanks do this is We for it's is answer to the Kevin, a we that And the business how performing. an good it's think And we important that as metric. look

MD&A calculate number, to and see like how that, So the see to to section. able certainly ODCs be so look be we that to and that, XX-Q that if we'll file in -- able and on break we we that you'll will at provide you'll down when you will subcontractors the you'd information that Street the continue in

we So I appreciate think it's the yes, question. do important. And

Operator

our from comes question next Sidoti. Riddick from of And I line Marc the show

Marc Riddick

good Hi, everyone. evening,

encouraging as back to the making a which the in talent enterprise circle I a one to you're actually certainly, you that time made -- and lot a arise, the little some early folks, an as may wanted just the of to for things the lot it's in of of season some not to it's opportunities there, well. encouraged -- for of that discussing kind I prepared somewhat a regarding those some remarks you there progress jump but but it's as could capabilities are folks needs too around wondering little So entire commentary refreshing AI, of I on sort you're if overall that is was spend within on wanted by. of and of that this well of see as specifically AI the that any some area of

John Wasson

Sure.

I in we the as have think a said IT I significant technology modernization. on prepared So business obviously, remarks,

certainly will expectation [inaudible] been platforms. I AI that embedded that years business is honestly, work years looking and it's go forms for part clients we AI in AI part and these and has these in clients with been become also generative forward. learning platforms many think and for sector. of as as AI as doing are for their machine a I experimenting these what AI in And for federal the And used of business, our that generative has indicated, with for embedded of

to -- utilize and at continue hard a those client And that, so to productivity. we meet those clients products take how meet our and and look look capabilities how internally work to to to needs evaluate best at with that, improve

and And causes and data avoid literature used at of [inaudible] based and for patterns on to how for client looking searches least diseases, broadly, machine we've -- learning what abuse clients and might our patterns domain also data. have to used over that predictive like years understand and fraud AI the things -- more staff

AI and use have how also that's how the come created do -- then our we certainly our that cases to looking try in at been test our to marketing, to what our nature. and improve generative those We're development and we've domain can to sandboxes internally can with product part on experiment And of use business so done of of of improve services we we contracts things review how side. corporate --

obviously the terms is of technology talent, the In talent we certainly, I important. business quite our think finding in

an significant been area find talent. think talent be of where I and need -- our -- generally to we -- the I is think it's As in continue to we'll challenging made to for business. competitive talent. is that able support our highly But recruiting; it's I and to say, It we'll we've look investments that we'll that find we part business,

Marc Riddick

one I any you the a bit talk you're that that? really where or are most that far was environment about through little sensitive funding pricing areas into that as up? there environment due to the price then areas Great. if given last you not little me, and changes rules are And more come price when the wondering putting play a economic increases running for could as And

John Wasson

price and a the No, And business the I to is regulated I wouldn't technically been mean, think client federal significant of the have generally quality of certainly for compete our in environment. important. not about utilities, over by the your people been wouldn't change performance, And I capabilities, important, areas say business acceptable business. most in the your there's kind lowest talked in Price with we've the of our past, seen with is is But your years competitive. writing there's the past a you pricing but I client all concepts. we've proposals, say you're as change. civilian

I would that passing give in stated and of we've that we side on, companies, pay costs March on year. compensation the terms those the given many and like increases I in raises think, significant salaries each we say tension In market

March. did give increases races we So material in in

pass quickly. on price. XX% period T&M, of know, XX of cost plus about think XX% more fixed don't talked I about, our as you those is I is we've plus, less XX% Only work cost can with or --

the people categories more -- with they rates experience. move We a up can we can on when those Now basis. raise yearly T&M,

challenges things And address do to on cost so the the of are we those fixed price.

pass best built those have escalators. strategies in sure can. to you We'll enough that make We the can all raises there over strategies. use to always along time as They're and those cover not you the as you deploy

that, depending don't They happen overnight type we're and the generally we it's two but and think remain I well. on -- focused I of strategies. on that tried they think, managing -- contract,

Operator

further like I'm back queue. questions At turn to for time, closing remarks. the John no over to the showing this call in I'd

John Wasson

the call, of with at in Okay. future and to a for summer. connecting today's we forward you Well, good care. you events. thank rest look and Have conferences participating Take

Operator

concludes Thank you. for This you today's conference Thank call. participating.

disconnect. now may You

ICF International (ICFI) 3 Aug 232023 Q2 Earnings call transcript