ICF International Inc. (NASDAQ:ICFI) Q4 2018 Earnings Conference Call - Final Transcript
Feb 26, 2019 • 04:30 pm ET
Welcome to the ICF International Fourth Quarter 2018 Earnings Conference Call. My name is Vanessa, and I will be your operator for today's call. During the presentation, all participant lines will be in listen-only mode. Afterwards, you'll be invited to participate in a question-and-answer session. (Operator Instructions) Please note, this conference is being recorded on Tuesday, February 26, 2019 and cannot be reproduced or rebroadcast without permission from the Company.
I would now like to turn the program over to Lynn Morgen of AdvisIRy Partners.
Thank you, Vanessa. Good afternoon, everyone and thank you for joining us to review ICF's fourth quarter and full year 2018 performance. With us today from ICF are Sudhakar Kesavan, Chairman and CEO; John Wasson, President and COO; and James Morgan, CFO.
During this call, we will make forward-looking statements to assist you in understanding ICF Management's expectations about our future performance. These statements are subject to a number of risks that could cause actual events and results to differ materially, and I refer you to our February 26, 2019 press release and our SEC filings for discussions of those risks. In addition, our statements during this call are based on our views as of today. We anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may, at some point, elect to update the forward-looking statements made today, but specifically disclaim any obligation to do so.
I will now turn the call over to ICF's CEO, Sudhakar Kesavan, to discuss fourth quarter and full year 2018 performance. Sudhakar?
Thank you, Lynn and thank you all for joining us today to review our 2018 fourth quarter and full year results and discuss our outlook and guidance for 2019. Our fourth quarter performance represented a strong finish to a record year for ICF. Revenues increased 18% year-on-year and non-GAAP EPS increased 50%. Revenue in each of our client categories grew, driven by increasing demand for our advisory and implementation services.
In line with our guidance, we reported an exceptional adjusted EBITDA to service revenue margin of 16.5% in the fourth quarter, benefiting from a 10% increase in service revenue, higher utilization and a favorable mix of business. Additionally, the value of contracts awards won during the year reached a record $1.8 billion at year-end, 40% above the prior year, resulting in an annual book-to-bill ratio of 1.4. And our business development pipeline was $5.8 billion at the end of the year, up 38% year-on-year and 7% ahead of third quarter levels. These metrics underscore our confidence in ICF's expected growth in 2019, as we continue to execute well across our diversified portfolio.
Looking at market dynamics, we see four key growth catalysts for ICF in 2019 and beyond. First, we expect growth in Federal Government revenues in 2019, based on our backlog, which includes a significant contract wins in the second half of 2018. We also believe that the additional time that our civilian agency clients have this