ICF International Inc. (NASDAQ:ICFI) Q2 2019 Earnings Conference Call - Final Transcript
Aug 01, 2019 • 04:30 pm ET
Welcome to the Second Quarter 2019 ICF Earnings Conference Call. My name is Vanessa, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded on Thursday, August 1, 2019 and cannot be reproduced or rebroadcast without permission from the company.
I will now turn the call over to your host, Lynn Morgen of AdvisIRy Partners.
Thank you, Vanessa. Good afternoon, everyone, and thank you for joining us to review ICF's second quarter 2019 performance. With us today from ICF are Sudhakar Kesavan, Chairman and CEO; John Wasson, President and COO; and James Morgan, CFO.
During this conference 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 August 1, 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 second quarter 2019 performance. Sudhakar?
Thank you, Lynn, and thank you for joining us to review the second quarter results and our business outlook for the remainder of 2019.
We continued to execute well in the second quarter, posting 13% year-on-year revenue growth that converted into even higher growth in adjusted EBITDA and non-GAAP EPS. At the same time, key forward-looking metrics such as backlog and the business development pipeline are robust, supporting our expectations for strong performance in the second half of this year and beyond. The catalysts that we have identified in key government and commercial markets continue to provide ICF with significant growth opportunities. First, in the federal government market, we are encouraged that there is basic agreement on a two year budget that will take us through fiscal 2021. The agreement boosts funding across defense and civilian agencies, with an approximately 4% increase in discretionary spending in 2020.
We believe this will provide significant opportunities for ICF, particularly in high-priority areas such as the opioid emergency, IT modernization, cybersecurity and citizen engagement, all areas in which we have been awarded substantial contracts over the last several years. Additionally, we think that by coming to an early agreement, federal agency clients will have the time they need to efficiently formulate their spending plans and issue RFPs.
Second, in our state and local government market, our substantial disaster recovery qualifications have resulted in important contract wins for ICF this year in Puerto Rico and Texas, which John Wasson will discuss in detail a little later. From a strategic standpoint, we see disaster recovery as becoming an ongoing