What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-02-27 compared with 2025-02-28 · 290 added, 344 removed, 906 unchanged (41% of the section changed)

6 unchanged sentences

Based on the assessment, management has concluded that its internal control over financial reporting was effective as of December 31, 2025.

As permitted by the SEC rules, management’s assessment and conclusion on the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2024, excludes an assessment of the internal control over financial reporting of AEG, acquired on December 31, 2024.

AEG represents total assets, excluding goodwill and intangibles related to the acquisitions, of 0.7% of the Company’s consolidated total assets as of December 31, 2024.

AEG did not contribute any revenue for the year ended December 31, 2024.

The Company’s independent registered public accounting firm, Grant Thornton LLP , has issued an audit report on the Company’s internal control over financial reporting, which appears herein.

6 unchanged sentences

Changes in Internal Control Over Financial Reporting.

There were no material changes in our internal control over financial reporting during the last quarter of 2024 which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations Over Internal Controls.

A control system, no matter how well designed and operated, can provide only reasonable (not absolute) assurance that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Because of the inherent limitations in any control system, misstatements due to error or fraud may occur and may not be detected.

Also, any evaluations of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

There were no material changes in our internal control over financial reporting during the fourth quarter of 2025 which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHE R INFORMATION

On December 7, 2024 , James Morgan , our Chief Operating Officer , adopted a trading plan intended to satisfy the affirmative defense conditions under Rule 10b5-1(c) of the Exchange Act.

The plan is for the sale of up to 10,000 shares and terminates on the earlier of the date all shares covered by the plan have been sold and April 1, 2026.

During the three months ended December 31, 2025, none of our directors or officers entered into, modified , or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement ,” in each case, as defined in Item 408 of Regulation S-K.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

1 unchanged sentence

Insider Information and Securities Trading

We have adopted an Insider Information and Securities Trading Policy and procedures governing the purchase, sale and/or other disposition of our securities by directors, officers, and employees, or by us, that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and listing standards applicable to us.

A copy of our policy is filed with this Annual Report on Form 10-K as Exhibit 19.0.

We have an Insider Information and Securities Trading policy and procedures (the “Policy”) governing the purchase, sale and/or other disposition of our securities by our directors, officers, and employees, or by us, that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and listing standards applicable to us.

A copy of the Policy was filed as Exhibit 19.0 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Other information required by this item will be included in our Proxy Statement for the 2026 Annual Meeting of Stockholders (the “2026 Proxy Statement”) and is incorporated herein by reference.

56 unchanged sentences

and CRS Plaza II, LLC, dated as of October 24, 2019 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K, filed October 30, 2019).

Equity Purchase Agreement by and among Creative Systems and Consulting, L.L.C., Project Apple Holdings, LLC, Vanitha Khera, Vishal Khera, and ICF Incorporated, L.L.C., dated December 13, 2021 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K/A, filed December 17, 2021).

Equity Purchase Agreement by and among ICF Incorporated, L.L.C., SemanticBits, LLC, Ramprakash Chilukuri, Vinay Kumar, and Ramprakash Chilukuri, as the Sellers’ Representative, dated June 8, 2022 (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K/A, filed July 1, 2022).

Separation Agreement and Release between Rodney Mark Lee, Jr.

and the Company (Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K, filed December 4, 2023).

Insider Trading Policy.

Insider Trading Policy (Incorporated by reference to Exhibit 19.0 to the Company ’ s Form 10-K, filed February 28, 2025).

Subsidiaries of the Registrant.*

16 unchanged sentences

/s/ JOHN WASSON

Chair, President, and Chief Executive Officer

Chair and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ JOHN WASSON

Chair, President, Chief Executive Officer, and Director

Chair, Chief Executive Officer, and Director

(Principal Executive Officer)

9 unchanged sentences

Ranjit Chadha

/s/ CAROLINE ANGOORLY

February 27, 2026

Caroline Angoorly

/s/ MARILYN CROUTHER

1 unchanged sentence

Marilyn Crouther

February 27, 2026

/s/ RANDALL MEHL

February 27, 2026

/s/ SCOTT SALMIRS

1 unchanged sentence

Scott Salmirs

February 28, 2025

/s/ MICHAEL J.

1 unchanged sentence

Michael Van Handel

/s/ RANDALL MEHL

February 27, 2026

February 28, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

3 unchanged sentences

We have audited the accompanying consolidated balance sheets of ICF International, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule included under Item 15(2) (collectively referred to as the “consolidated financial statements”).

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule listed under Item 15(2) (collectively referred to as the “consolidated financial statements”) .

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

14 unchanged sentences

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – estimates-at-completion

5 unchanged sentences

The principal considerations for our determination that the total estimated costs to complete for such contracts is a critical audit matter are the significant management judgments involved in the initial creation and subsequent updates to the Company’s EAC and related estimated profit to be recognized, if any, which required challenging and subjective auditor judgment in the execution of our procedures.

Our audit procedures in response to the matter included the following, among others:

• Testing the design and operating effectiveness of controls related to management’s review of estimate-at-completion analyses and the significant assumptions underlying the estimated total costs to complete.

• Testing management’s process for developing, revising, and calculating EAC, evaluating key inputs and assumptions by comparing them to relevant evidence, including contract documents, rate of cost incurred to date, subcontractor agreements, customer correspondence, documentation related to contractual milestones or other documentation, relevant to estimated costs to be incurred.

• Performing a lookback analysis of certain contracts completed during the year ended December 31, 2024 and comparing the EAC to the estimate of costs throughout the contract life cycle to assess the Company’s ability to develop reasonable estimates.

Our audit procedures related to the estimate of total costs to satisfy the performance obligation for contracts with revenue recognized using the cost-input method included the following, among others.

• Tested the design and operating effectiveness of controls related to management’s review of estimate-at-completion analyses and the significant assumptions underlying the estimated total costs to complete.

• Tested management’s process for developing, revising, and calculating EAC for a selection of contracts, evaluated key inputs and assumptions by comparing them to relevant evidence, including contract documents, rate of cost incurred to date, subcontractor agreements, customer correspondence, documentation related to contractual milestones or other documentation, relevant to estimated costs to be incurred.

• Performed a lookback analysis of certain contracts completed during the year ended December 31, 2025 and comparing the EAC to the estimate of costs throughout the contract life cycle to assess the Company’s ability to develop reasonable estimates.

/s/ GRANT THORNTON LLP

11 unchanged sentences

Basis for opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Annual Report on Internal Control Over Financial Reporting” (“Management’s Report”).

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

4 unchanged sentences

We believe that our audit provides a reasonable basis for our opinion.

Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of Applied Energy Group, Inc., a wholly-owned subsidiary, whose financial statements reflect total assets constituting 0.7 percent, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

As indicated in Management’s Report, Applied Energy Group, Inc.

was acquired during 2024.

Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of Applied Energy Group, Inc.

Definition and limitations of internal control over financial reporting

29 unchanged sentences

Current Liabilities:

Current portion of long-term debt

Accounts payable

7 unchanged sentences

Long-term Liabilities:

Long-term debt

Operating lease liabilities - non-current

26 unchanged sentences

Depreciation and amortization

Amortization of intangible assets

Total operating costs and expenses

1 unchanged sentence

Interest, net

Other income (expense)

Other (expense) income

Income before income taxes

3 unchanged sentences

Cash dividends declared per common share

Other comprehensive (loss) income, net of tax

Other comprehensive income (loss), net of tax

Comprehensive income, net of tax

7 unchanged sentences

Balance at January 1, 2023

Other comprehensive income

Other comprehensive loss

Equity compensation

4 unchanged sentences

Balance at December 31, 2023

Other comprehensive income

Other comprehensive loss

Equity compensation

4 unchanged sentences

Balance at December 31, 2024

Other comprehensive loss

Other comprehensive income

Equity compensation

Exercise of stock options

Issuance of shares pursuant to employee stock purchase plan and vesting of restricted stock units

15 unchanged sentences

Gain on divestiture of a business

Other operating, net

Other operating adjustments, net

Changes in operating assets and liabilities, net of the effect of acquisitions:

13 unchanged sentences

Payments for business acquisitions, net of cash acquired

Proceeds from working capital adjustments related to prior business acquisition

Proceeds from divestiture of a business

11 unchanged sentences

Other financing, net

Net Cash (Used in) Provided by Financing Activities

Net Cash Used in Financing Activities

Effect of Exchange Rate Changes on Cash, Cash Equivalents, and Restricted Cash

Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash

Net Change in Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents, and Restricted Cash, Beginning of Period

19 unchanged sentences

Intercompany transactions and balances have been eliminated.

Certain amounts reported in the previous year's consolidated statements of cash flows have been combined to conform to the current year presentation.

Software assets, which were previously included within “Property and equipment, net” and “Other assets” on the Company’s consolidated balance sheets, have been reclassified and consolidated under “Other intangible assets, net”.

To conform to the current year’s presentation, $ 1.6 million and $ 21.8 million, as of December 31, 2024, have been reclassified from “Property and equipment, net” and “Other assets”, respectively, to “Other intangible assets, net”.

Previously separate financial statement line items “Depreciation and amortization” and “Amortization of intangible assets” on the Company’s consolidated statements of comprehensive income have been combined under “Depreciation and amortization”.

Nature of Operations

The Company primarily provides professional services and technology-based solutions, including management, technology, and policy consulting and implementation services, in the areas of energy, environment, infrastructure, and disaster recovery;

health and social programs;

security and other civilian & commercial.

The Company offers a full range of services to clients throughout the entire life cycle of a policy, program, project, or initiative, from research and analysis, assessment and advice, to design and implementation of programs and technology-based solutions, and the provision of engagement services and programs.

The Company’s major customers are U.S.

federal government departments and agencies.

The Company also serves U.S.

The Company primarily provides consulting and technology services across several key domains:

strategy and public policy, energy and environmental sustainability, and climate resilience;

digital transformation including information technology (“IT”) modernization, cloud, cybersecurity, and data analytics;

health and social programs such as public health and education;

international development and capacity building;

disaster management and recovery planning;

transportation, aviation, and infrastructure;

and marketing and strategic communications.

These areas combine expertise in policy, technology, and program implementation to help organizations and governments address complex challenges and drive impactful outcomes.

The Company’s customers are primarily U.S.

federal government departments and agencies, U.S.

state (including territories) and local government departments and agencies, international governments, and commercial clients worldwide.

Commercial clients primarily include airlines, airports, electric and gas utilities, health care companies, banks and other financial services companies.

The terms “federal” or “federal government” refer to the U.S.

2 unchanged sentences

The Company, incorporated in Delaware, is headquartered in Reston, Virginia.

It maintains additional offices throughout the world, including more than 55 offices in the U.S.

It maintains additional offices throughout the world, including 49 offices in the U.S.

territories and 14 offices in key markets outside the U.S., including offices in the United Kingdom (“U.K.”), Belgium, Spain, India, and Canada.

3 unchanged sentences

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.

Areas of the consolidated financial statements where estimates may have the most significant effect include contractual and regulatory reserves, valuation and lives of tangible and intangible assets, contingent consideration related to business acquisitions and divestitures, impairment of long-lived assets, accrued liabilities, revenue recognition (including estimates of variable considerations in determining the total contract price and allocation of performance obligations), the remaining costs to complete fixed-price contracts, bonus and other incentive compensation, stock-based compensation, reserves for tax benefits and valuation allowances on deferred tax assets, provisions for income taxes, collectability of receivables, and loss accruals for litigation.

Areas of the consolidated financial statements where estimates may have the most significant effect include valuation and lives of tangible and intangible assets, impairment of long-lived assets, accrued liabilities, revenue recognition (including estimates of variable considerations in determining the total contract price and allocation of performance obligations), the remaining costs to complete fixed-price contracts, bonus and other incentive compensation, stock-based compensation, reserves for tax benefits and valuation allowances on deferred tax assets, provisions for income taxes, collectability of receivables, and loss accruals for litigation.

Actual results experienced by the Company may differ from management’s estimates.

1 unchanged sentence

The Company enters into agreements with clients that create enforceable rights and obligations and for which it is probable that the Company will collect the consideration to which it will be entitled as services and solutions are transferred to the client.

Except in certain narrowly defined situations, the Company’s agreements with its clients are written and revenue is generally not recognized on oral or implied arrangements.

Except in certain narrowly defined situations, the Company’s contracts with its clients are written and revenue is generally not recognized on oral or implied arrangements.

The Company recognizes revenue based on the consideration specified in the applicable agreement and excludes payments to customers and amounts collected on behalf of third parties.

6 unchanged sentences

These variable amounts are generally awarded at the completion of a contractually stipulated performance assessment period based on the achievement of performance metrics, program milestones or cost targets, and the amount awarded may be subject to client discretion.

Variable consideration is estimated based on the most likely amount.

Once the Company selects a method to estimate variable consideration, it applies that method consistently.

Variable consideration is estimated primarily by using the most likely amount method based on our prior history in providing the services to the customer or, if no history exists, the variable consideration is constrained until the initial determination by the customer.

Once the Company selects a method to estimate variable consideration, it applies that method consistently over the performance assessment periods with changes in estimates resulting in cumulative catch-up adjustments in the period.

Estimates of variable consideration will be constrained only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

The changes in estimates result in cumulative catch-up adjustments.

The Company evaluates contractual arrangements to determine whether revenue should be recognized on a gross versus net basis.

11 unchanged sentences

The selection of the method used to measure progress requires judgment and is dependent, among other factors, on the contract type and the nature of the services provided.

For time-and-materials contracts, the Company uses the right-to-invoice practical expedient to recognize revenue earned based on hours worked in contract performance at negotiated billing rates.

For time-and-materials contracts, the Company uses the right-to-invoice practical expedient to recognize revenue earned based on hours worked in contract performance at negotiated billing rates as the Company believes this amount is commensurate with the value transferred to the customer.

Fixed-price level-of-effort contracts are substantially similar to time-and-materials contracts except that the Company is required to deliver a specified level of effort over a stated period of time.

For these contracts, the Company determines the revenue earned using contract hours worked at negotiated bill rates as the Company delivers the contractually required workforce.

For certain cost-based contracts that meet the criteria for the right-to-invoice practical expedient to be used, the Company recognizes revenue based on the amount to which the Company has a contractual right to invoice which is typically costs incurred plus contractually-stipulated fixed fees.

For certain cost-based contracts that meet the criteria for the right-to-invoice practical expedient to be used as the Company believes this amount is commensurate with the value transferred to the customer, the Company recognizes revenue based on the amount to which the Company has a contractual right to invoice which is typically costs incurred plus contractually-stipulated fixed fees.

Cost-based contracts may include variable consideration which is allocated to the distinct periods in which they relate to and recognized in that period.

For series-services performance obligations, the Company measures progress using either a cost input measure, a time-elapsed output measure, or the right to invoice practical expedient.

For certain fixed-price contracts, the Company uses the percentage-of-completion method to estimate the amount of revenue, based on the ratio of actual costs incurred to total estimated costs, provided that costs incurred (an input method) represents a reasonable measure of progress towards the satisfaction of a performance obligation and transfer of control to the customer.

For certain fixed-price contracts requiring the delivery of a product or service, the Company uses the percentage-of-completion method to estimate the amount of revenue, based on the ratio of actual costs incurred to total estimated costs, provided that costs incurred (an input method) represents a reasonable measure of progress towards the satisfaction of a performance obligation and transfer of control to the customer.

This method provides a faithful depiction of the transfer of value to the client when the Company is satisfying a performance obligation that entails integration of tasks for a combined output, which requires the Company to coordinate the work of employees, subcontractors and delivery of other contract costs.

1 unchanged sentence

When this method is used, the changes in estimated costs to complete the obligations result in adjustments to revenue on a cumulative catch-up basis, which causes the effect of revised estimates for prior periods to be recognized in the current period.

For the years ended December 31, 2025, 2024, and 2023, the Company recognized net favorable revenue adjustments of $ 8.1 million , $ 4.9 million , and $ 3.9 million , respectively.

Changes in these estimates may routinely occur over contract performance for a variety of reasons, which include:

3 unchanged sentences

or performing better or worse than previously estimated.

For fixed-price contracts in which the estimated cost to perform exceeds the consideration to be received, the Company accrues for the entire estimated loss during the period in which the loss is determined by recording additional direct costs.

For certain fixed-price contracts in which the estimated cost to perform exceeds the consideration to be received, the Company accrues for the entire estimated loss during the period in which the loss is determined by recording additional direct contract costs.

In some fixed-price service contracts, the Company performs services of a recurring nature, such as maintenance and other services of a “stand ready” nature.

7 unchanged sentences

The Company evaluates incremental costs of obtaining a contract and, if they are recoverable from the client and relate to a specific future contract, they are deferred and recognized over contract performance or the estimated life of the customer relationship if renewals are expected.

The Company expenses these costs when incurred if the amortization period is one year or less.

Unfulfilled performance obligations represent amounts expected to be earned on non-cancellable contracts or those that are cancellable, but the Company has determined to have substantive termination penalties, and do not include the value of negotiated, unexercised contract options, which are classified as marketing offers.

Indefinite delivery/indefinite quantity and similar arrangements provide a framework for the client to issue specific tasks, delivery or purchase orders in the future and these arrangements are considered marketing offers until a specific order is executed.

Some of the Company’s contracts include variable consideration, which requires the Company to estimate and, as necessary, revise the most likely amounts that will be earned over the respective performance assessment periods.

For these obligations, changes in estimates result in cumulative catch-up adjustments and may have a significant impact on earnings during a given period.

The Company has elected to apply the practical expedient to recognize these costs when incurred if the amortization period is one year or less.

Unfulfilled performance obligations (“UPO”) represent amounts expected to be earned on non-cancellable contracts or those that are cancellable, but the Company has determined to have substantive termination penalties.

UPO does not include the value of negotiated, unexercised contract options, indefinite delivery/indefinite quantity and similar arrangements, which are considered as marketing offers.

The Company’s operating cycle for long-term contracts may be greater than one year and is measured by the average time between the inception and completion of those contracts.

Contract-related assets and liabilities are classified as current assets and current liabilities.

Contract-related assets and liabilities are classified as current assets and current liabilities if the performance obligations are expected to be completed within one year.

Cash and Cash Equivalents

3 unchanged sentences

Contract Receivables, Net

Contract receivables represent amounts billed and due from clients in accordance with respective contractual terms.

The amounts due are stated at their net realizable value.

Contract receivables represent amounts billed and due from clients and billable when there is an unconditional right to the consideration in accordance with respective contractual terms.

The amounts are stated at their net realizable value.

The Company estimates an allowance for expected credit loss to reflect the amount of receivables that will not be collected.

The Company considers a number of factors in estimating the amount of the allowance, including knowledge of a client’s financial condition, its historical collection experience, and other factors relevant to assessing the collectability of the receivables.

The Company has elected to use the practical expedient that allows for the assumption that current conditions as of the balance sheet date will persist through the remaining life of the contract receivables when developing reasonable and supportable forecasts as part of estimating the allowance for expected credit losses.

The Company writes off contract receivables when such amounts are determined to be uncollectible.

5 unchanged sentences

Goodwill and any intangible assets acquired in a business combination that are deemed to have an indefinite useful life are not amortized, but instead are reviewed for impairment annually, or more frequently if impairment indicators arise.

The Company performs its annual goodwill impairment test as of October 1 of each year.

The Company performs its annual goodwill impairment test as of October 1.

As its business is highly integrated and all of its components have similar economic characteristics, the Company has concluded it has one aggregated reporting unit at the consolidated entity level and performs the assessment at that level.

4 unchanged sentences

If the total of the expected undiscounted future net cash flows is less than the carrying amount of the long-lived asset group being evaluated, a loss is recognized for any excess of the carrying amount over the fair value of the asset group.

During the years ended December 31, 2024, 2023, and 2022 , the Company recognized impairment losses of $ 3.6 million, $ 6.8 million, and $ 8.4 million, respectively, related to operating facility lease right-of-use assets and leasehold improvements that it no longer used in ongoing operations.

There was no impairment loss related to operating facility lease right-of-use assets and leasehold improvements recorded for the year ended December 31, 2025;

however, during the years ended December 31, 2024 and 2023, the Company recognized impai rment losses of $ 3.6 million and $ 6.8 million, respectively, related to operating facility lease right-of-use assets and leasehold improvements that it no longer used in ongoing operations.

The impairment losses were included in indirect and selling expenses on the Company’s consolidated statements of comprehensive income.

9 unchanged sentences

The Company capitalizes certain costs to develop, enhance, and upgrade internal-use software.

Capitalized costs include external direct costs and payroll costs for employees directly associated with such activities.

These costs are amortization on a straight-line basis over the expected economic life of the software, typically lasting three to five years .

As of December 31, 2024, and 2023, capitalized software, net of accumulated amortization, totaled $ 21.8 million and $ 12.8 million , respectively.

The Company capitalizes costs related to the implementation costs of cloud computing arrangements that are service contracts.

Capitalized costs include external subcontract costs and payroll costs for employees directly associated with such activities.

Once completed, the software is amortized on a straight-line basis over their expected economic life, typically lasting three to five years .

The amounts are included as part of “ Other intangible assets, net” on the consolidated balance sheets (see “Note 6 - Goodwill and Other Intangible Assets”).

The Company also capitalizes costs related to the implementation costs of cloud computing arrangements that are service contracts, and the amounts are included as part of “Other assets” on the consolidated balance sheets.

These costs are amortized over the term of the hosting arrangement.

As of December 31, 2024 and 2023, capitalized costs, net of accumulated amortization, totaled $ 2.8 million and $ 2.6 million , respectively.

The amounts are included as part of other assets on the consolidated balance sheets.

As of December 31, 2025 and 2024, capitalized costs of cloud computing arrangements, net of accumulated amortization, totaled $ 2.0 million and $ 2.8 million , respectively.

Stock-Based Compensation

The Company recognizes stock-based compensation expense to employees and non-employee directors, including grants of stock options, restricted stock awards, restricted stock units (“RSUs”), and cash-settled restricted stock units (“CSRSUs”) on a straight-line basis over the requisite service period, which is generally the vesting period.

The Company recognizes expense for performance-based share awards (“PSAs”), which have both performance and service conditions, on a straight-line basis over the three-year performance period.

The Company recognizes stock-based compensation expense of awards given to employees and non-employee directors, including grants of stock options, restricted stock awards, restricted stock units (“RSUs”), and cash-settled restricted stock units (“CSRSUs”) on a straight-line basis over the requisite service period, which is generally the vesting period.

The Company recognizes expenses for performance-based share awards (“PSAs”), which have both performance and service conditions, on a straight-line basis over a three-year performance period.

Non-employee director awards are granted annually for board-related services and therefore expensed over the service period of one year .

4 unchanged sentences

The fair value of stock options, restricted stock awards, RSUs, PSAs, and non-employee director awards is estimated based on the fair value of a share of common stock at the grant date.

The fair value of PSAs is estimated using a Monte Carlo simulation model.

The fair value of PSAs is also estimated using a Monte Carlo simulation model for the market-based performance period.

CSRSUs are settled only in cash payments based on the fair value of the Company’s stock price at the vesting date, calculated by multiplying the number of CSRSUs vested by the Company’s closing stock price on the vesting date, subject to a maximum payment cap and a minimum payment floor.

1 unchanged sentence

Derivative Instruments

Derivative instruments include interest rate swaps, foreign currency hedges, and forward contracts.

Derivative instruments designated as cash flow hedges are recorded on the consolidated balance sheets at fair value as of the reporting date and reclassified to earnings (to the same category as the item being hedged) in the period that the hedged instruments affect earnings, and the effective portion of the hedge is recorded in other comprehensive income (loss) (“AOCI”), net of tax, on the consolidated statements of comprehensive income.

Derivative instruments primarily include interest rate swaps.

Derivative instruments designated as cash flow hedges are recorded on the consolidated balance sheets at fair value as of the reporting date and reclassified to earnings (to the same category as the item being hedged) in the period that the hedged instruments affect earnings, and the effective portion of the hedge is recorded in other comprehensive income (loss), net of tax, on the consolidated statements of comprehensive income and as part of cash flows from operating activities on the consolidated statements of cash flows.

Management reviews the effectiveness of the hedges on a quarterly basis.

15 unchanged sentences

Other Comprehensive Income (Loss)

Other comprehensive income (loss) includes foreign currency translation adjustments, the changes in fair value of interest rate agreements designated as cash flow hedges, net of taxes, and the gain on the sale of an interest rate hedge agreement designated as a cash flow hedge.

Acquisition-Related Costs

Costs related to acquisitions include professional fees for legal, financial, and other advisory services and are expensed in the period that they are incurred.

Other comprehensive income (loss) includes foreign currency translation adjustments and the changes in fair value of interest rate swaps designated as cash flow hedges, net of taxes.

Business Combinations

Acquisitions that meet the definition of a business in accordance with ASC 805, Business Combinations, are recorded using the acquisition method of accounting.

Except for contract assets and contract liabilities, the Company recognizes and measures identifiable assets acquired, liabilities assumed, and any non-controlling interest as of the acquisition date at fair value.

Acquisitions that meet the definition of a business in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations, are recorded using the acquisition method of accounting.

Except for contract assets and contract liabilities, the Company recognizes and measures identifiable assets acquired, liabilities assumed, contingent purchase considerations, and any non-controlling interest as of the acquisition date at their fair values.

Contract assets and contract liabilities from acquired contracts are measured as if the Company had originated the contracts.

The valuation of intangible assets is determined by using an approach:

market, income, or cost approach.

Adjustments to contingent purchase considerations subsequent to the acquisition date are recorded as part of earnings in the same period of the adjustment.

The valuation of intangible assets is determined by using either a market, income, or cost approach.

The excess, if any, of total consideration transferred in a business combination over the fair value of identifiable assets acquired, liabilities assumed and any non-controlling interest is recognized as goodwill.

Costs related to acquisitions include professional fees for legal, financial, and other advisory services and are expensed in the period in which they are incurred.

Direct costs exclude depreciation and amortization and amortization of intangible assets, which are presented separately on the consolidated statements of comprehensive income.

1 unchanged sentence

Indirect and selling expenses exclude depreciation and amortization, and amortization of intangible assets, which are presented separately on the consolidated statements of comprehensive income.

The Company measures and reports certain financial assets and liabilities at fair value in accordance with the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 280”).

The Company measures and reports certain financial assets and liabilities at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”).

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

3 unchanged sentences

Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active;

inputs other than quoted prices that are observable for the asset or liability (e.g.

interest rates and yield curves that are observable at commonly quoted intervals, and implied volatilities);

inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves that are observable at commonly quoted intervals, and implied volatilities);

and inputs derived principally from or corroborated by observable market data by correlation or other means;

1 unchanged sentence

Certain financial instruments, including cash and cash equivalents, contract receivables, and accounts payable are carried at cost, which, due to their short maturities, approximates their fair values.

The carrying value of the Company’s long-term debt approximates the estimated fair value for debt with similar terms, interest rates, and remaining maturities currently available to companies with similar credit ratings (Level 2).

The carrying value of the Company’s debt approximates the estimated fair value for debt with similar terms, interest rates, and remaining maturities currently available to companies with similar credit ratings (Level 2).

Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, derivative financial instruments, and contract receivables.

The Company’s domestic bank accounts are insured up to $ 250,000 by the Federal Deposit Insurance Corporation.

As of December 31, 2024 and 2023, the Company had $ 9.3 million and $ 0.3 million , respectively, of cash in its accounts that exceeded the insured limit.

The majority of the Company’s cash transactions are processed through one U.S.

commercial bank.

commercial bank, and the accounts are insured up to $ 250,000 by the Federal Deposit Insurance Corporation.

As of December 31, 2025 and 2024, the Company had $ 61.9 million and $ 9.3 million , respectively, of cash and restricted cash in its accounts that exceeded the insured limit.

As of December 31, 2025 and 2024, the Company held approximately $ 4.5 million and $ 4.6 million , respectively, of cash and restricted cash in foreign bank accounts.

4 unchanged sentences

The Company extends credit in the normal course of operations and does not require collateral from its clients.

At December 31, 2025 , the Company had one client who accounted for 13.8 % of contract receivables, ne t, of which a portion of the outstanding invoices was paid subsequent to December 31, 2025 such that the contract receivables would have been below 10 % of contract receivables, net.

At December 31, 2024, t here was no client that accounted for more than 10 % of contract receivables, net.

Recent Accounting Pronouncements

Accounting Pronouncements Adopted

Segment Reporting

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07:

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), that required additional disclosures for public entities currently required under the ASC.

While it does not change how a public entity identifies its operating segments, ASU 2023-07 enhances the current segment reporting disclosures of Topic 280 by requiring significant segment expenses that are regularly provided to the Chief Operating Decision Maker (the “CODM”), the amount and description of other segment items, and interim disclosures of reportable segment’s profit or loss and assets.

ASU 2023-07 also requires public entities that have a single reportable segment to provide all the disclosures required in Topic 280, as amended.

The Company completed its adoption of the provisions of ASU 2023-07 during the fourth quarter of 2024, see Note 22 – Segment Information and Geographic Data.

Accounting Pronouncements Not Yet Adopted

Financial Instruments - Credit Losses

In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-05:

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).

Under ASU 2025-05, entities may elect a practical expedient method for estimating the allowance for expected credit losses which assumes that the conditions as of the balance sheet date do not change for the remaining life of the asset when developing reasonable and supportable forecasts as part of estimating expected credit losses on current accounts receivable and contract assets.

ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company early adopted the provisions of ASU 2025-05 during the third quarter of fiscal year 2025 and the adoption did not have any impact on the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes:

Improvements to Income Tax Disclosures (“ASU 2023-09”), that require greater disaggregation of income tax rate and amounts paid by entities.

Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires greater disaggregation of income tax rate and amounts paid by entities.

ASU 2023-09 specifically requires all entities to disclose, on an annual basis, disaggregated domestic and foreign pre-tax income or loss from continuing operations and the disaggregated income tax expense or benefit by federal, state, and foreign components, and a tabular rate reconciliation, using both percentages and reporting currency amounts, of eight specific categories as well as any individual reconciling items that are equal to or greater than 5% of a threshold computed by multiplying pretax income or loss from continuing operations by the applicable federal rate.

2 unchanged sentences

The amendments may be adopted on a prospective or retrospective basis.

The Company is currently evaluating the impact of the adoption of ASU 2023-09 but does not expect the adoption to have a material impact, if any, on the consolidated financial statements.

The Company adopted the provisions of ASU 2023-09 on a retrospective basis and, aside from additional disclosures (see “Note 13 - Income Taxes”), the adoption did not have any impact on the consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures

3 unchanged sentences

ASU 2024-03 also requires public entities to disclose a qualitative description of the composition of any amounts in relevant expense captions that are not separately disaggregated and the amount and definition of the entity’s selling expenses.

ASU 2024-03 is effective for the Company for the 2027 fiscal year and interim periods within the 2028 fiscal year, with early adoption permitted.

ASU 2024-03 will be effective for the Company for the 2027 fiscal year and interim periods within the 2028 fiscal year, with early adoption permitted.

The amendments may be adopted on a prospective or retrospective basis.

The Company is currently evaluating the impact of the adoption of ASU 2024-03 but does not expect the adoption to have a material impact, if any, on the consolidated financial statements.

The Company is currently evaluating the impact of the adoption of ASU 2024-03.

Intangibles - Goodwill and Other - Internal-Use Software

In September 2025, the FASB issued ASU 2025-06:

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”) which, among other things, removes the project development stage requirements and allows capitalization of internal-use software costs once (i) management has authorized and committed to funding the project and (ii) it is probable that the project will be completed and the software will be used as intended.

ASU 2025-06 will be effective for the Company for the 2028 fiscal year, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The amendments may be adopted on a prospective, retrospective, or modified basis.

The Company is currently evaluating the impact of the adoption of ASU 2025-06.

NOTE 3 - RESTRICTED CASH

The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the consolidated balance sheets at December 31, 2025 and 2024 to the total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows for the years ended December 31, 2025, 2024, and 2023:

December 31, 2025

December 31, 2024

December 31, 2023

Cash and cash equivalents

1 unchanged sentence

Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows

(1) Restricted cash at December 31, 2025 includes $ 3.0 million of long-term restricted cash that is part of “ Other assets ” on the Company’ s consolidated balance sheets.

Restricted cash is primarily related to the Company’s energy incentive business with public utility clients and restricted cash advances on certain programs.

NOTE 4 - CONTRACT RECEIVABLES, NET

3 unchanged sentences

Contract receivables, net

The Company sells certain billed contract receivables in accordance with its Master Receivables Purchase Agreement (the “MRPA”) with MUFG Bank, Ltd.

The contract receivables that are sold without recourse and where the Company does not retain any ongoing financial interest in the transferred receivables, other than providing servicing activities, are accounted for as sales under ASC 860, Transfers and Servicing (“ASC 860”).

Consequently, these contract receivables are derecognized from the Company’s consolidated balance sheets at the date of the sale, and the cash received from MUFG is presented as part of cash flows from operating activities.

The following is a reconciliation of billed contract receivables sold to MUFG that were eligible and accounted for as sales under ASC 860, including billed contract receivables sold to MUFG and collected from customers on behalf of MUFG during the twelve months ended December 31, 2024 and 2023, and the balance of billed contract receivables not yet collected from customers as of December 31, 2024 and 2023, respectively:

The Company sells certain billed contract receivables in accordance with its Amended Master Receivables Purchase Agreement with MUFG Bank, Ltd.

(“MUFG”) that are accounted for as sales under ASC 860, Transfers and Servicing (“ASC 860”).

The receivables are sold without recourse and the Company does not retain any ongoing financial interest in the transferred receivables, other than providing servicing activities.

The following is a reconciliation of billed contract receivables sold to MUFG, including billed contract receivables sold to MUFG and payments from customers collected on behalf of MUFG during the twelve months ended December 31, 2025 and 2024, and the balance of billed contract receivables not yet collected from customers as of December 31, 2025 and 2024, respectively:

As of and for the Year Ended

8 unchanged sentences

(3) The ending balances represent billed contract receivables that were sold and derecognized by the Company but have not yet been collected from customers as of December 31, 2025 and 2024 , respectively.

The following is a reconciliation of cash collections from customers of billed contract receivables previously sold to MUFG that were eligible and accounted for as sales under ASC 860, including collections from customers on behalf of MUFG of previously sold billed contract receivables and remittances of cash collections to MUFG during the twelve months ended December 31, 2024 and 2023, and the balance of cash collected but not yet remitted to MUFG as of December 31, 2024 and 2023, respectively:

The following is a reconciliation of cash collections from customers of billed contract receivables previously sold to MUFG, including collections from customers on behalf of MUFG of previously sold billed contract receivables and remittances of cash collections to MUFG during the twelve months ended December 31, 2025 and 2024, and the balance of cash collected but not yet remitted to MUFG as of December 31, 2025 and 2024, respectively:

As of and for the Year Ended

6 unchanged sentences

(1) The beginning balances represent cash collected from customers on behalf of MUFG for billed contract receivables that were previously sold and derecognized by the Company but have not yet been remitted to MUFG as of January 1, 2025 and 2024 , respectively.

(2) For the twelve months ended December 31, 2024 and 2023, the Company recorded net inflows of $ 1.5 million and $ 15.6 million , respectively, in its cash flows from operating activities from the collection of billed contract receivables that were sold but not yet remitted to MUFG.

(2) For the twelve months ended December 31, 2025 and 2024, the Company recorded a net outflow of $ 19.5 million and a net inflow of $ 1.5 million , respectively, in its cash flows from operating activities from the collection of billed contract receivables that were sold but not yet remitted to MUFG.

(3) The ending balances are included as part of “Accrued expenses and other current liabilities” on the Company’s consolidated balance sheets.

The Company services the receivables sold by collecting cash and remitting it to MUFG.

The related servicing fee received from MUFG was immaterial.

The aggregate impact of the sale of billed contract receivables on the Company’s operating cash flows was $ 6.2 million and $ 33.1 million for the twelve months ended December 31, 2024 and 2023, respectively.

The Company also sold certain billed contract receivables to MUFG that did not qualify as sales under ASC 860.

Consequently, the cash received from and remitted back to MUFG is presented as cash from financing activities within “Proceeds from other short-term borrowings” and “Repayments of other short-term borrowings” on the Company’s consolidated statements of cash flows.

At December 31, 2024 and 2023, the amounts due to MUFG for cash collected and not yet remitted for billed contract receivables sold that did not qualify as sales under ASC 860 totaled $ 7.9 million and $ 6.9 million , respectively.

These amounts are included as part of “Accrued expenses and other current liabilities” on the Company’s consolidated balance sheets.

The aggregate impact of the sale of billed contract receivables on the Company’s operating cash flows was a net outflow of $ 7.3 million and a net inflow of $ 6.2 million for the twelve months ended December 31, 2025 and 2024, respectively.

At December 31, 2025 and 2024, the amounts due to MUFG for cash collected and not yet remitted for certain billed contract receivables sold that did not qualify as sales under ASC 860 totaled $ 3.4 million and $ 7.9 million , respectively.

These amounts are included as part of “Accrued expenses and other current liabilities” on the Company’s consolidated balance sheets, and included within cash flows from financing activities on the Company’s consolidated statements of cash flows.

NOTE 5 - PROPERTY AND EQUIPMENT

1 unchanged sentence

Leasehold improvements

Purchased software

Furniture and office equipment

2 unchanged sentences

Total property and equipment, net

Depreciation and amortization expense for the years ended December 31, 2024, 2023, and 2022 totaled $ 20.5 million , $ 25.3 million , and $ 21.5 million , respectively.

Depreciation and amortization expense of property and equipment for the years ended December 31, 2025, 2024, and 2023 totaled $ 14.9 million , $ 16.0 million , and $ 18.4 million , respectively.

NOTE 6 - GOODWILL AND OTHER INTANGIBLE ASSETS

2 unchanged sentences

Goodwill resulting from business combinations

Goodwill resulting from business divestitures

Effect of foreign currency translation

2 unchanged sentences

Other Intangible Assets

Intangible assets with definite lives are primarily amortized over periods ranging from approximately 1 to 11 years.

The weighted-average period of amortization for all intangible assets, calculated as of December 31, 2024, is 5.7 years.

The customer-related intangible assets, which consist of customer contracts, backlog, and non-contractual customer relationships, are being amortized based on estimated cash flows and respective estimated economic benefit of the assets.

The weighted-average period of amortization of the customer-related intangibles calculated as of December 31, 2024 is 5.7 years.

Intangible assets related to developed technology are being amortized over a weighted-average period, calculated as of December 31, 2024, of 7.6 years.

Intangible assets with an indefinite life consist of a domain name.

Other intangibles consisted of the following at December 31:

Other intangible assets consists of (i) intangible assets with definite lives previously acquired through mergers and acquisitions, purchased software, and internally-developed software (completed and in the process of completion), and (ii) a domain name with an indefinite life.

The intangible assets with definite lives are amortized over periods ranging from approximately 1 to 12 years.

The customer-related intangible assets, which consist of customer contracts, backlog, and non-contractual customer relationships, are amortized based on estimated cash flows and respective estimated economic benefit of the assets or straight-line over the estimated lives.

As of December 31, 2025, the weighted-average periods of amortization are as follows:

Customer-related

1 unchanged sentence

Total amortizable intangible assets

The carrying values of other intangible assets are as follows at December 31, 2025 and 2024:

Customer-related

Developed technology

Total amortizable intangible assets

Software in development

Intangible with indefinite life

3 unchanged sentences

Total amortizable intangible assets

Software in development

Intangible with indefinite life

Total other intangible assets

Aggregate amortization expense for the years ended December 31, 2024, 2023, and 2022, was approximately $ 33.0 million , $ 35.5 million , and $ 28.4 million , respectively.

The estimated future amortization expense relating to intangible assets is as follows:

Amortization expense of amortizable intangible assets for the years ended December 31, 2025, 2024, and 2023, totaled $ 43.2 million , $ 37.5 million , and $ 42.3 million , respectively.

The estimated future amortization expense relating to amortizable other intangible assets is as follows:

Year ending December 31,

2 unchanged sentences

The leases may include options to extend the lease periods for up to 5 years at rates approximating market rates and/or options to terminate the leases within 1 year .

The leases may include a residual value guarantee or a responsibility to return the property to its original state of use.

The leases may also include a residual value guarantee or a responsibility to return the property to its original state of use.

A limited number of leases contain provisions that provide for rental increases based on consumer price indices.

11 unchanged sentences

Future minimum lease payments under non-cancellable operating and finance leases as of December 31, 2025 were as follows:

December 31, 2025

December 31, 2026

December 31, 2027

December 31, 2028

December 31, 2029

Total future minimum lease payments

10 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities

Property and equipment obtained in exchange for finance lease liabilities

Weighted-average remaining lease term

4 unchanged sentences

Finance leases

NOTE 8 - ACCRUED SALARIES AND BENEFITS

Accrued salaries and benefits consisted of the following at December 31:

Bonuses, liability-classified awards, and commissions

Paid time off and leave

Payroll taxes and withholdings

Total accrued salaries and benefits

NOTE 9 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following at December 31:

Restricted contract funds

Taxes and insurance premiums

Facilities rental and lease exit costs

Professional services

Cash collected not yet remitted to purchaser of billed receivables

Other accrued expenses and current liabilities

Total accrued expenses and other current liabilities

NOTE 10 - LONG-TERM DEBT

NOTE 8 - DEBT

On May 6, 2022, the Company entered into the Restated Credit Agreement with a group of lenders with (a) PNC Bank, National Association as the Administrative Agent and (b) PNC Capital Markets LLC, BOFA Securities, Inc., TD Securities (USA) LLC, Wells Fargo Securities, LLC and Citizens Bank, N.A., as joint lead arrangers.

14 unchanged sentences

The Base Rate is a fluctuating rate of interest equal to the highest of (a) the Overnight Bank Funding Rate (as defined in the Restated Credit Agreement), plus 0.5 %, (b) the Prime Rate (as defined in the Restated Credit Agreement) and (c) the Daily Simple SOFR Rate (as defined in the Restated Credit Agreement) plus 1 %, all as then adjusted to include the Applicable Margin (as defined in the Restated Credit Agreement) as then in effect (and as determined pursuant to the then-current Consolidated Leverage Ratio).

For the years ended December 31, 2024 and 2023, the average interest rate on borrowings under the Credit Facility was 6.6 % and 6.7 % , respectively.

Inclusive of the impact of floating-to-fixed interest rate swaps (see “Note 12 – Derivative Instruments and Hedging Activities”), the average interest rate was 5.3 % and 5.6 % for the years ended December 31, 2024 and 2023, respectively.

For the years ended December 31, 2025 and 2024, interest expense from debt facilities was $ 29.2 million and $ 31.8 million , respectively, and the average interest rate on borrowings under the Credit Facility was 5.6 % and 6.6 % , respectively.

As a result of floating-to-fixed interest rate swaps (see “Note 10 - Derivative Instruments and Hedging Activities”), interest expense decreased by $ 1.2 million and $ 6.2 million for the years ended December 31, 2025 and 2024, respectively, and the average interest rate was 5.4 % and 5.3 % for the years ended December 31, 2025 and 2024, respectively.

The Credit Facility is collateralized by substantially all the assets of the Company and its material domestic subsidiaries and requires that the Company remain in compliance with certain financial and non-financial covenants including, but not limited to the Consolidated Leverage Ratio and the Consolidated Interest Coverage Ratio.

1 unchanged sentence

As of December 31, 2025, the Company was in compliance with all covenants.

As of December 31, 2024, the Company had $ 411.7 million (net of unamortized debt issuance costs) of long-term debt outstanding from the Credit Facility and unused borrowing capacity of $ 541.1 million , from the available $ 600.0 million revolving line of credit under the Credit Facility.

As of December 31, 2025, the Company had unused borrowing capacity of $ 550.0 million from the available $ 600.0 million revolving line of credit.

The unused borrowing capacity is inclusive of four outstanding letters of credit totaling $ 1.6 million .

As of December 31, 2024 and 2023, long-term debt consisted of the following:

As of December 31, 2025 and 2024, debt consisted of the following:

December 31, 2025

6 unchanged sentences

Unamortized debt issuance costs

Current portion of long-term debt

Long-term debt - non-current

Future scheduled repayments of debt principal are as follows:

3 unchanged sentences

December 31, 2026

December 31, 2027

May 6, 2027 (Maturity)

Debt Issuance Cost

4 unchanged sentences

The Company disaggregates revenue from clients into categories that depict how the nature, amount, and uncertainty of revenue and cash flows are affected by economic and business factors.

Those categories are client market, client type, and contract mix.

Those categories are:

client markets, client type, and contract mix.

Client markets provide insight into the breadth of the Company’s expertise.

In classifying revenue by client market, the Company attributes revenue from a client to the market that the Company believes is the client’s primary market.

In classifying revenue by client markets, the Company attributes revenue from a client to the market that the Company believes is the client’s primary market.

The Company also classifies revenue by the type of client for which it does business, which is an indicator of the diversity of its client base.

The Company attributes revenue generated as a subcontractor to the market or type of the ultimate client.

For the years ended December 31, 2025, 2024, and 2023, the Company’s largest client was the Department of Health and Human Services with $ 415.5 million , $ 503.9 million , and $ 509.5 million of revenue, respectively.

There was no other client with revenue greater than 5 % of total revenue for the years ended December 31, 2025, 2024, and 2023.

Disaggregation by contract mix provides insight in terms of the degree of performance risk that the Company has assumed.

3 unchanged sentences

Cost-based contracts are considered to provide the lowest amount of performance risk since the Company is generally reimbursed for all contract costs incurred in performance of contract deliverables with only the amount of incentive or award fees (if applicable) dependent on the achievement of negotiated performance requirements.

The Company’s revenue by client markets, type, and contract mix are in the following tables.

Certain immaterial revenue amounts in the prior years have been reclassified due to minor adjustments and reclassification.

The Company’s revenue by client market, client type, and contract mix are summarized below.

Year ended December 31,

13 unchanged sentences

Contract assets consist of unbilled receivables on contracts where revenue recognized exceeds the amount billed.

Contract liabilities result from advance payments received on a contract or from billings in excess of revenue recognized on long-term contracts.

Contract liabilities result from advance payments received on a contract or from billings in excess of revenue recognized on contracts.

The following table summarizes the contract balances as of December 31, 2025 and December 31, 2024:

4 unchanged sentences

Net contract assets (liabilities)

(1) Contract liabilities as of December 31, 2025 include $ 3.0 million of long-term contract liabilities that are part of “ Other long-term liabilities ” on the Company's consolidated balance sheets.

The net contract assets (liabilities) as of December 31, 2025 decreased by $ 24.2 million as compared to December 31, 2024, primarily due to the timing difference between the performance of services and billings to and payments from customers.

1 unchanged sentence

During the years ended December 31, 2025 and 2024, the Company recognized $ 20.6 million and $ 17.6 million in revenue related to the contract liabilities balance at December 31, 2024 and 2023, respectively.

Changes in Estimates on Contracts:

For the years ended December 31, 2025, 2024, and 2023, the aggregate net changes in estimates on contracts accounted under the percentage-of-completion method reflected increases of $ 14.8 million , $ 12.7 million , and $ 7.9 million , respectively, to “Operating income” on the Company’s consolidated statements of comprehensive income.

The impact of the changes on the Company’s diluted earnings per share was $ 0.65 , $ 0.54 , and $ 0.36 , respectively.

The Company used its effective tax rates of 18.2 % , 20.2 % , and 14.4 % , respectively, to calculate the impact on net income.

Revenue Adjustments from Previously Satisfied Performance Obligations:

For the years ended December 31, 2025 and 2024, the Company recognized $ 4.8 million , and $ 1.6 million , respectively, of revenue from previously satisfied performance obligations.

For the year ended December 31, 2023, the Company reduced revenue by $ 1.4 million from previously satisfied performance obligations.

The adjustments were primarily due to changes in the transaction prices and final performance determination of certain awards.

Unfulfilled Performance Obligations:

The Company had $ 1.3 billion in remaining unfulfilled performance obligations (“UPO”) as of December 31, 2024 which the Company expects to recognize as revenue approximately 61 % by December 31, 2025, 73 % by December 31, 2026, and the remaining thereafter.

Subsequent to December 31, 2024, and through February 25, 2025, pursuant to the recent executive orders issued by the Administration or actions by DOGE, the Company received notices for termination-for-convenience and for stop-work orders.

Had these termination-for-convenience occurred prior to December 31, 2024, the total UPO would be reduced by approximately $ 245 million.

It is unknown if the stop-work orders notices will be lifted and the Company will resume work on these programs, or if the stop-work orders will result in a termination-for-convenience.

The Company had $ 0.7 billion in UPO as of December 31, 2025, of which approximately 66 % relates to its contracts with U.S.

federal government.

During the year ended December 31, 2025, pursuant to the executive orders issued by the Administration or actions by the Department of Government Efficiency, the Company received notices for termination-for-convenience.

The termination notices were received primarily in the first and second quarters of the 2025 fiscal year.

The Company expects to recognize the remaining UPO as revenue of approximately 74 % by December 31, 2026 , 91 % by December 31, 2027 , and the remaining thereafter.

NOTE 10 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

1 unchanged sentence

The Company does not use such instruments for speculative or trading purposes.

At December 31, 2024, the Company had floating-to-fixed interest rate swaps for an aggregate notional amount of $ 275.0 million, of which $ 100.0 million will mature on February 28, 2025 , $ 75.0 million will mature on February 28, 2028 , and $ 100.0 million will mature on June 27, 2028 .

The C ompany has designated the Swaps as cash flow hedges.

During the second and third quarters of the 2025 fiscal year, the Company executed a strategy that extended the term of the existing Swaps at a lower interest rate while maintaining the same overall notional value of each Swap.

As a result of the amendment, $ 50.0 million will mature on February 28, 2030 , $ 25.0 million will mature on June 26, 2030 , and $ 100.0 million will mature on July 31, 2030 .

The Company has designated the modified Swaps as cash flow hedges .

See “Note 8 - Debt” for details on the impact of the Swap on the Company’s interest rates.

See “Note 11 - Fair Value” for the fair value of these Swaps.

For the years ended December 31, 2025 and 2024, the effect of the Swaps on the Company’s financial statements are as follows:

5 unchanged sentences

Interest Rate Swaps

As of December 31, 2024, $ 0.8 million in unrealized gains from the Swaps are expected to be reclassified from AOCI into earnings within the next twelve months .

As of December 31, 2025, $ 0.6 million in unrealized losses from the Swaps are expected to be reclassified from AOCI into earnings within the next twelve months .

NOTE 11 - FAIR VALUE

2 unchanged sentences

Location on Balance Sheet

Interest rate swaps - current portion

Prepaid expenses and other assets

Interest rate swaps - long-term portion

Company-owned life insurance policies

7 unchanged sentences

Prepaid expenses and other assets

Foreign currency forward and swap contracts

Prepaid expenses and other assets

Interest rate swaps - long-term portion

Company-owned life insurance policies

Financial and non-financial instruments measured or remeasured at fair value on a non-recurring basis include certain impaired right-of-use assets from operating leases and assets acquired and liabilities assumed from acquisitions, using the discounted cash flows method with Level 3 inputs as of the impairment and acquisition dates.

Interest swaps - current portion

Accrued expenses and other current liabilities

Interest swaps - long-term portion

Other long-term liabilities

Financial and non-financial instruments measured or re-measured at fair value on a non-recurring basis after initial measurement include certain impaired right-of-use assets from operating leases (see “Note 19 - Exit Activities”) using the discounted cash flows method with Level 3 inputs as of the impairment dates.

NOTE 12 - STOCKHOLDERS ’ EQUITY

3 unchanged sentences

Accumulated other comprehensive (loss) income at January 1, 2023

Current period other comprehensive income (loss):

Other comprehensive income (loss) before reclassifications

Current period other comprehensive (loss) income:

Other comprehensive (loss) income before reclassifications

Amounts reclassified from accumulated other comprehensive (loss) income

Effect of taxes

Total current period other comprehensive income (loss)

Total current period other comprehensive (loss) income

Accumulated other comprehensive (loss) income at December 31, 2023

Current period other comprehensive income (loss):

Current period other comprehensive (loss) income:

Other comprehensive (loss) income before reclassifications

1 unchanged sentence

Effect of taxes

Total current period other comprehensive income (loss)

Total current period other comprehensive (loss) income

Accumulated other comprehensive (loss) income at December 31, 2024

Current period other comprehensive income (loss):

Other comprehensive income (loss) before reclassifications

Current period other comprehensive (loss) income:

Other comprehensive (loss) income before reclassifications

Amounts reclassified from accumulated other comprehensive (loss) income (3)

Effect of taxes

Total current period other comprehensive income (loss)

Total current period other comprehensive (loss) income

Accumulated other comprehensive (loss) income at December 31, 2025

(1) Represents the change in fair value of interest rate hedge agreements designated as a cash flow hedges.

The fair value of the interest rate hedge agreements was recorded in other comprehensive income, net of tax, and will be reclassified to earnings when earnings are impacted by the hedged items, as interest payments are made on the Credit Facility from through June 27, 2028.

(1) Represents the change in fair value of interest rate hedge agreements designated as cash flow hedges.

See additional details of the hedge agreements in “Note 10 - Derivative Instruments and Hedging Activities” .

(2) The Company expects to reclassify $ 0.6 million in unrealized gains related to the Change in Fair Value of Interest Rate Hedge Agreement from accumulated other comprehensive loss into earnings during the next 12 months.

(3) The Company’s effective tax rate for the years ended December 31, 2024, 2023, and 2022 was 20.2 % , 14.4 % , and 23.5 % , respectively.

(3) During the first quarter of 2025, the Company reclassified $ 4.1 million of effect of taxes related to Foreign Currency Translation Adjustments from accumulated other comprehensive (loss) income into earnings in connection with Section 987 (“IRC 987”) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).

See “Note 13 - Income Taxes”.

Share Repurchases

The Company’s current approved share repurchase program allows for share repurchases in the aggregate up to $ 300.0 million under approved share repurchase plans pursuant to Rules 10b5-1 and 10b-18 under the Exchange Act.

The repurchase program and the authorized amount have no expiration date.

On an annual basis, the Credit Facility (see Note 10 – Long-Term Debt) permits share repurchases of at least $ 25.0 million provided that the Company is not in default of its covenants, and higher amounts provided that the Company’s Consolidated Leverage Ratio, prior to and after giving effect to such repurchases, is 0.50 to 1.00 less than the then-applicable maximum Consolidated Leverage Ratio and subject to the Company having net liquidity of at least $ 100.0 million after giving effect to such repurchases.

On an annual basis, the Credit Facility (see “Note 8 - Debt”) pe rmits share repurchases of at least $ 25.0 million provided that the Company is not in default of its covenants, and higher amounts provided that the Company’s Consolidated Leverage Ratio, prior to and after giving effect to such repurchases, is 0.50 to 1.00 less than the then-applicable maximum Consolidated Leverage Ratio and subject to the Company having net liquidity of at least $ 100.0 million after giving effect to such repurchases.

Purchases under this program may be made from time to time at prevailing market prices in open market purchases or in privately negotiated transactions pursuant to Rule 10b-18 under the Exchange Act and in accordance with applicable insider trading and other securities laws and regulations.

9 unchanged sentences

NOTE 13 - INCOME TAXES

The domestic and foreign components of income before provision for income taxes are as follows for the years ended December 31:

For the years ended December 31, 2025, 2024, and 2023, domestic and foreign income before income taxes is as follows:

Income before income taxes

4 unchanged sentences

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes.

The Company’s provision for income taxes differs from the U.S.

federal statutory tax rate of 21.0 % due to the following reconciling items:

Year Ended December 31,

federal statutory tax rate

State and local income taxes, net of federal income tax effect (1)

Foreign tax effects:

Foreign branch tax

Effect of changes in tax laws or rates enacted in the current period (2)

Effect of cross-border tax laws:

Global intangible low-taxed income

Research and development tax credits

Foreign tax credits

Changes in valuation allowances

Nontaxable or nondeductible items:

Share-based payments

Capital loss (3)

Worthless Stock deduction (4)

Excess compensation

Changes in unrecognized tax benefits

Effective tax

(1) State taxes in Virginia, Maryland, and the District of Columbia make up the majority (greater than 50 percent) of the tax effect in this category.

(2) The 2025 provision for income tax includes a benefit recognized in the first fiscal quarter of 2025 from tax planning implemented in connection with the “transitional rules” governing unrealized foreign exchange gains and losses derived from translation of the operations, assets and liabilities of non-U.S.

qualified subsidiaries provided by recently finalized U.S.

federal tax regulations under IRC 987.

The regulations under IRC 987 are effective for the Company for tax years beginning after December 31, 2024, and require computation of a pre-transition foreign currency gain or loss to be included in the determination of future taxable income or loss and an analysis of the various elections available to taxpayers.

Based on the Company’s current analysis of the regulations and the available election to amortize its pre-2025 cumulative unrealized foreign exchange gains and losses impacting U.S.

taxation of foreign earnings under Subpart F of the Internal Revenue Code, the Company recognized a non-cash deferred income tax benefit of $ 4.5 million related to its election to amortize its pre-transition foreign currency losses against taxable income over ten years .

(3) During 2023, the Company restructured the ownership of its Canadian entities for tax purposes, resulting in a 3.8 % decrease in the Company’s effective income tax rate for the year ended December 31, 2023.

(4) During 2023, the Company liquidated one of its U.K.

subsidiaries as part of the wind-down of its commercial marketing business, resulting in a reduction in the Company’s effective income tax rate of 5.1 % for the year ended December 31, 2023.

Income taxes paid, net of refunds received, consisted of the following:

State and local

District of Columbia

Total state and local

Total foreign

Total income taxes paid, net of refunds

(1) Primarily includes taxes paid to California, New York, New Jersey, and Texas.

(2) Primarily includes taxes paid to Belgium and Puerto Rico.

The Company measures certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is 27.0 %.

Deferred tax assets (liabilities) consisted of the following at December 31:

8 unchanged sentences

Foreign exchange

Section 987 pretransition loss

Research tax credits

Foreign deferred

13 unchanged sentences

Total Net Deferred Tax Assets (Liabilities)

The Company measures certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is 27.0 %.

Effective for tax years beginning after January 1, 2022, research and development costs are required to be capitalized and amortized over a period of five years for domestic and fifteen years for foreign research and development for income tax purposes.

As a result of the capitalization, the Company rec ognized increases of $ 23.6 million and $ 28.1 million in deferre d tax asset for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the cumulative foreign tax credit carryforward balance increased by approximately $ 0.1 million and the valuation allowance required increased by approximately $ 0.1 million.

No additional income taxes have been provided for any undistributed foreign earnings not subject to the transition tax.

No additional deferred income taxes have been provided for the $ 5.0 million of additional favorable outside basis differences inherent in these foreign entities as of December 31, 2024 because these amounts continue to be permanently reinvested in foreign operations.

As of December 31, 2024 , the Company has net operating loss (“NOL”) carryforwards for state income tax purposes of approximately $ 5.9 million, which expire between 2029 and 2034 .

The Company acquired these NOLs as a result of its purchase of a business in November 2014.

IRC Section 382 imposes an annual limitation on the use of a corporation’s NOLs, tax credits and other carryovers after an “ownership change” occurs.

Section 382 imposes an annual limitation on the amount of post-ownership change taxable income a corporation may offset with pre-ownership change NOLs and credits.

In general, the annual limitation is determined by multiplying the value of the corporation’s stock immediately before the ownership change (subject to certain adjustments) by the applicable long-term tax-exempt rate.

Any unused portion of the annual limitation is available for use in future years until such NOLs are scheduled to expire (in general, NOLs may be carried forward 15 to 20 years).

The Company established a full valuation allowance of approximately $ 0.5 million against the portion of the deferred tax asset which it is more-likely-than-not that it will not be recoverable (e.g.

expiration of the statute of limitations, etc.)

As of December 31, 2024, the C ompany had gross state income tax credit carryforwards of approximately $ 2.4 million, which expire between 2025 and 2035 .

The Company’s 2022, 2023, and 2024 tax years remain subject to examination by the Internal Revenue Service for federal tax purposes.

Certain significant state and foreign tax jurisdictions are also either currently under examination or remain open under the statutes of limitation and subject to examination for the tax years from 2021, 2022, 2023, and 2024.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (the “OB3 Act”).

The OB3 Act made permanent changes to certain key elements of the Tax Cuts and Jobs Act of 2017 (the “TCJA”), including 100 % bonus depreciation, domestic research cost expensing, the business interest expense limitation, and the repeal of various clean energy tax credits.

As a result, the OB3 Act impacted the Company’s income tax payables and deferred tax assets as of July 4, 2025, the date of enactment, via the reversal of approximately $ 32.0 million of deferred tax assets resulting from capitalized research expenses incurred through June 30, 2025.

The reversal is reflected on the Company’s annual financial statements as of and for the year ended December 31, 2025.

These capitalized research expenses are being recovered over their remaining useful lives as outlined in IRC 174A enacted via the OB3 Act.

As of December 31, 2025 , the Company had gross state income tax credit carryforwards of approximately $ 1.7 million, which expire b etween 2025 and 2030 .

A deferred tax asset of approximately $ 1.3 million, net of federal benefit, has been established related to these state income tax credit carryforwards as of December 31, 2025.

1 unchanged sentence

Appropriate consideration has been given to all available evidence, including historical operating results, projections of taxable income, and tax planning alternatives.

The Company concluded that a $ 0.4 million valuation allowance was required for tax attributes related to specified state jurisdictions, a $ 1.0 million valuation allowance was required for tax attributes related to capital loss carryforwards, and an additional $ 8.1 million valuation allowance is required against our U.S.

The Company concluded that a $ 0.4 million valuation allowance was required for tax attributes related to specified state jurisdictions, a $ 1.1 million valuation allowance was required for tax attributes related to capital loss carryforwards, a $ 0.7 million valuation allowance was required for certain equity-based compensation assets, and an additional $ 8.7 million valuation allowance was required against our U.S.

foreign tax credit carryforwards.

2 unchanged sentences

The components of unrecognized tax benefits, excluding penalty and interest, are as follows at December 31:

transfer pricing

India transfer pricing

Section 41 tax credit

Section 174 expense capitalization

India transfer pricing

The unrecognized tax benefit reconciliation, excluding penalty and interest, is as follows:

Unrecognized tax benefits at January 1, 2023

Decrease attributable to tax positions taken during the current period

Unrecognized tax benefits at December 31, 2022

Increase attributable to tax positions taken during a prior period

4 unchanged sentences

Unrecognized tax benefits at December 31, 2024

The Company’s 2021, 2022, and 2023 tax years remain subject to examination by the Internal Revenue Service for federal tax purposes.

Although the Company believes it has adequately provided for all uncertain tax positions, amounts asserted by taxing authorities could be greater than the Company’s accrued position.

Accordingly, additional provisions on federal, state, and foreign income tax related matters could be recorded in the future as revised estimates are made or the underlying matters are effectively settled or otherwise resolved.

Conversely, the Company could settle positions with the tax authorities for amounts lower than have been accrued.

The Company believes it is reasonably possible that, during the next 12 months, the Company’s liability for uncertain tax positions may not change.

The Company’s provision for income taxes differs from the federal statutory rate.

The differences between the statutory rate and the Company’s provision are as follows for the years ended December 31:

Taxes at statutory rate

State taxes, net of federal benefit

Foreign tax rate differential

Executive compensation

Other permanent differences

Global intangible low-taxed income (GILTI)

Prior year tax adjustments

Deferred impact of state rate change

Worthless stock deduction

Unrecognized tax benefits

Valuation allowance

Equity-based compensation

Taxes at effective rate

During 2023, the Company restructured the ownership of its Canadian entities for tax purposes resulting in a 3.8 % decrease in the Company’s effective income tax rate for the year ended December 31, 2023.

During 2023, the Company liquidated one of its U.K.

subsidiaries as part of the wind-down of its commercial marketing business resulting in a reduction in the Company’s effective income tax rate of 5.1 % for the year ended December 31, 2023.

During 2024 and 2023, the Company completed its annual true-up of the prior year income tax provision in connection with the filing of its U.S.

federal & state income tax returns.

As a result of that process, the Company recorded changes in the estimate of certain tax credits it is eligible to claim with its income tax return filings tha t resulted in decreases of 2.0 % and 6.4 %, respectively, in the Company’s effective income tax rates for the years ended D ecember 31, 2024 and 2023.

Decrease attributable to tax positions taken during a prior period

Increase attributable to tax positions taken during the current period

Unrecognized tax benefits at December 31, 2025

NOTE 14 - STOCK-BASED COMPENSATION

Stock Incentive Plans

On June 1, 2023, the Company’s stockholders approved an amendment and restatement of the 2018 Omnibus Plan (the “2018 A&R Omnibus Plan”) which increased the number of shares available for issuance to 2,050,000 shares using stock options, stock appreciation rights, restricted stock, RSUs, performance units and PSAs, cash-based awards, and other stock-based awards to all key officers, key employees, and non-employee directors of the Company.

10 unchanged sentences

The stock-based compensation expense is deductible for income tax purposes.

For the years ended December 31, 2024, 2023, and 2022, the Company recognized excess income tax benefits of $ 2.4 million , $ 1.1 million , and $ 1.1 million , respectively, related to stock-based compensation.

The income tax expense reflects adjustments for differences between the stock-based compensation expense and the actual compensation included in award recipient’s gross income.

For the year ended December 31, 2025, the Company recognized an additional $ 0.4 million of shortfall tax expense related to stock-based compensation.

For the years ended December 31, 2024 and 2023, the Company recognized windfall tax benefits of $ 2.4 million , and $ 1.1 million , respectively, related to stock-based compensation.

Restricted Stock Units

30 unchanged sentences

Performance Share Awards

In 2015, the Board approved a performance-based share program (the “Program”) that provides for the issuance of PSAs to its senior management.

Under the Program, the number of PSAs that the participant will receive depends on the Company’s achievement of two performance goals during two performance periods.

The Company’s performance-based share program (the “Program”) provides for the issuance of PSAs to its senior management.

Under the Program, the PSAs that the participant will receive depends on the Company’s achievement of two performance goals during two performance periods.

The performance goals under the Program are based on (i) the Company’s compounded annual growth rate in EPS (adjusted to exclude certain items specified in the award’s agreement) during a two-year performance period (the “Initial Period”) and (ii) the Company’s cumulative total shareholder return relative to its peer group (“rTSR”) during a performance period from the first day of the performance period (typically January 1 of the year awarded) to the last day of the third year of the performance period (typically December 31).

24 unchanged sentences

(“AEG”), an energy technology and advisory services company , for $ 59.9 million in cash consideration.

The purchase price is subjected to net working capital adjustments expected to be completed within ninety days.

AEG provides a suite of integrated technology and advisory solutions to electric and gas utilities, state and local governments, and state energy offices nationwide which will further enhance the Company’s service offering and client footprint.

As part of the preliminary allocation of the purchase consideration, the Company recorded the following:

AEG provides a suite of integrated technology and advisory solutions to electric and gas utilities, state and local governments, and state energy offices nationwide which further enhance the Company’s service offering and client footprint.

As part of the allocation of the purchase consideration, the Company recorded the following:

Net working capital

4 unchanged sentences

Purchase considerations

Net working capital includes restricted cash of $ 5.6 million, accounts receivable of $ 4.5 million, and accrued expenses of $ 5.7 million.

The finalization of allocation is expected to be completed by the second quarter of 2025, and is currently open primarily for final net working capital adjustments, valuation of acquired intangibles, and computation of deferred revenue.

Net working capital includes restricted cash of $ 5.4 million, accounts receivable of $ 4.4 million, contract assets of $ 2.6 million, accrued expenses of $ 6.6 million, accounts payable of $ 1.3 million, and other assets and liabilities of $ 0.7 million.

The allocation of the purchase consideration was finalized during the third quarter of the 2025 fiscal year.

The estimated useful lives of acquired intangible assets are as follows:

18 unchanged sentences

The pro-forma impact of the acquisition is not material to the Company’s results of operations.

Blanton & Associates

On September 1, 2022, the Company completed the acquisition of Blanton & Associates (“Blanton”), an environmental consulting, planning, and project management firm headquartered in Austin, Texas, for $ 22.9 million.

Blanton brought domain expertise in environmental regulatory compliance and permitting for the transportation, renewable energy, water, and resource management sectors and added technically specialized staff in all aspects of environmental services to the Company.

As part of the allocation of the purchase consideration, the Company recorded the following:

Net working capital

Property and equipment

Customer-related intangibles

Contract backlog

Trade names and trademarks

Deferred income tax liabilities

Purchase consideration

The estimated useful lives of acquired intangible assets are as follows:

Customer-related intangibles

Contract backlog

Trade names and trademarks

Goodwill has an indefinite life and is not deductible for income tax purposes.

The pro-forma impact of the acquisition is not material to the Company’s results of operations.

SemanticBits, LLC

On July 13, 2022, the Company completed the acquisition of SemanticBits, LLC (“SemanticBits”), a 450-person Virginia limited liability company.

SemanticBits is a partner to U.S.

federal health agencies for mission-critical digital modernization solutions and provides a suite of scalable digital modernization services using open-source frameworks, including end-to-end agile scale

development capabilities, cloud-native solutions, data analytics and human-centered designs.

The acquisition provides synergies and scalabilities to support federal agencies with advanced IT solutions, digital modernization, and health expertise to solve complex customer challenges.

The purchase price was $ 216.0 million in cash and was funded by the existing Credit Facility.

The final purchase price allocation is summarized as follows:

Contract receivables

Contract assets

Customer-related intangibles

Trade names and trademarks

Other current and non-current assets

Accrued salaries and benefits

Accrued expenses and other liabilities

Deferred tax liability

Net assets acquired

Purchase consideration

The estimated useful lives of acquired intangible assets are as follows:

Customer-related intangibles

Trade names and trademarks

Goodwill is reflective of the existing workforce of SemanticBits and the expected synergies created with the Company as part of the acquisition.

Goodwill and intangible assets are not deductible for income tax purposes.

Acquisition-related costs and integration costs totaled $ 4.3 million and are included as part of indirect and selling expenses in the Company’s consolidated statements of comprehensive income.

For the year ended December 31, 2022, SemanticBits contributed revenues of $ 64.3 million and gross profit of $ 26.7 million.

Computation of an earnings measure other than gross profit is impracticable due to SemanticBits’ operations and financial systems being integrated with those of the Company.

The following unaudited condensed pro forma information presents combined financial information as if the acquisition of SemanticBits had been effective at January 1, 2021, the beginning of the 2021 fiscal year, and as a result, fiscal year 2022 represents the pro forma results for year two of the acquisition.

The pro forma information includes alignment of SemanticBits’ revenue recognition policy, corrections of employee-related expenses, and adjustments reflecting changes in the amortization of intangibles, acquisition-related costs, interest expense, and records income tax effects as if SemanticBits had been included in the Company’s results of operations.

The pro forma information is not intended to reflect the actual combined results of operations that would have occurred if the acquisition was completed on January 1, 2021, nor is it indicative of future operating results after the acquisition date of July 13, 2022.

Commercial Marketing

1 unchanged sentence

commercial marketing business for $ 47.1 million in cash.

The disposal of the commercial marketing business was not a major strategic shift that was, or will be significant to the Company’s operations and financial results.

For the years ended December 31, 2024 and 2023 , the Company recorded pre-tax gain of $ 2.0 million and $ 2.5 million, that is included as part of other income on the Company’s consolidated statements of comprehensive income.

The disposal of the commercial marketing business was not a major strategic shift that was significant to the Company’s operations and financial results.

For the years ended December 31, 2024 and 2023, the Company recorded pre-tax gain of $ 2.0 million and $ 2.5 million, respectively, that are included within other income on the Company’s consolidated statements of comprehensive income.

Mobile and SMS Messaging Aggregator Business

On November 1, 2023, the Company completed the divesture of its Canadian mobile and Short Message Service (“SMS”) messaging aggregator business for $ 5.4 million in cash.

The disposal of the mobile aggregation and SMS messaging aggregator

business was not a major strategic shift that was, or will be, significant to the Company’s operations and financial results.

In connection with the sale, the Company recorded a pre-tax gain of $ 3.2 million that is included as part of other income on the Company’s consolidated statements of comprehensive income.

The disposal of the mobile aggregation and SMS messaging aggregator business was not a major strategic shift that was significant to the Company’s operations and financial results.

In connection with the sale, the Company recorded a pre-tax gain of $ 3.2 million that is included within other (expense) income on the Company’s consolidated statements of comprehensive income for the year ended December 31, 2023.

NOTE 16 - EARNINGS PER SHARE

The Company’s EPS is computed by dividing reported net income by the weighted-average number of shares outstanding.

EPS is computed by dividing reported net income by the weighted-average number of shares outstanding.

Diluted EPS considers the potential dilution that could occur if common stock equivalents of stock options, RSUs, and PSAs were exercised or converted into stock.

3 unchanged sentences

however, the PSAs granted during the year ended December 31, 2025 have not yet completed their initial two-year performance period and therefore were excluded in the calculation of diluted EPS.

The dilutive effect of stock options, RSUs, and performance shares for each period reported is summarized below:

There were 32,629 , 518 , and 1,925 of potentially dilutive shares of stock awards that were excluded from the calculation of weighted-average diluted share computations for the years ended December 31, 2025, 2024, and 2023, respectively, because they were anti-dilutive.

EPS, including the dilutive effect of stock awards for each period reported, is summarized below:

Weighted-average number of basic shares outstanding during the period

10 unchanged sentences

The Company is involved in various legal matters and proceedings arising in the ordinary course of business.

While these matters and proceedings cause it to incur costs, including, but not limited to, attorneys’ fees, the Company currently believes it is not reasonably possible that any ultimate liability arising out of these matters and proceedings will have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

While these matters and proceedings cause it to incur costs, including, but not limited to, attorneys’ fees, the Company currently believes that any ultimate liability arising out of these matters and proceedings will not have a material adverse effect on the Company’s financial position, results of operations, or cash flows.

NOTE 18 - EMPLOYEE BENEFIT PLANS

3 unchanged sentences

Participants are able to elect to defer up to 70 % of their compensation, subject to statutory limitations, and are entitled to receive 100 % employer matching contributions for the first 3 % and 50 % for the next 2 % of their compensation.

Contribution expense for the years ended December 31, 2024, 2023, and 2022 was $ 26.8 million , $ 25.4 million , and $ 22.9 million , respectively.

The Company’s contribution expense for the years ended December 31, 2025, 2024, and 2023 was $ 26.1 million , $ 26.8 million , and $ 25.4 million , respectively.

Deferred Compensation Plan

Certain key employees of the Company are eligible to defer a specified percentage of their cash compensation by having it contributed to a nonqualified deferred compensation plan.

Certain key employees of the Company are eligible to defer a specified percentage of their cash compensation to a non-qualified deferred compensation plan.

Eligible employees may elect to defer up to 80 % of their base salary and up to 100 % of performance bonuses, reduced by any amounts withheld for the payment of taxes or other deductions required by law.

1 unchanged sentence

The Company funds its deferred compensation liabilities by making cash contributions to a Rabbi Trust (the “Trust”) at the time the salary or bonus being deferred would otherwise be payable to the employee.

As of December 31, 2024 , the liability to plan participants was $ 24.3 million which was materially funded by assets in the Trust.

The deferred compensation plan does not have a material net impact on the Company’s results of operations.

As of December 31, 2025 and 2024, the deferred compensation liabilities to plan participants totaled $ 26.2 million and $ 24.3 million, respectively, which were materially funded by assets in the Trust.

NOTE 19 - EXIT ACTIVITIES

3 unchanged sentences

commercial marketing and Canadian mobile and SMS messaging aggregator businesses .

As a result of the divestitures, the Company incurred and paid retention and severance benefits of $ 1.9 million and $ 1.7 million for the years ended December 31, 2023 and 2022, respectively, which was primarily recorded within direct costs.

As part of the sale of the businesses, the Company incurred $ 0.6 million in related compensation expense which was recorded within indirect and selling expenses.

As a result of these wind-down and divestitures that were completed, the Company recorded impairment of $ 0.9 million related to a customer-related intangible from a prior acquisition, $ 3.0 million related to right-of-use operating leases, and accrued $ 2.4 million for other facility-related exit costs.

During the year ended December 31, 2022, the Company incurred charges related to:

(i) the reduction and wind-down of certain non-core U.S.

commercial marketing businesses, and (ii) the reduction of facilities utilized by the remaining elements of the commercial marketing group.

Specifically, these charges included the impairment of certain right-of-use operating leases and related assets associated with exited facilities of $ 8.2 million, $ 4.8 million in other facility-related exit costs recorded within indirect and selling expenses, and retention and severance of $ 2.3 million primarily recorded within direct costs.

Of the $ 2.3 million in retention and severance benefits, $ 1.3 million was paid during the 2022 fiscal year and the remaining liability was paid during the 2023 fiscal year.

As a result of these divestitures, the Company incurred and paid retention and severance benefits of $ 1.9 million for the year ended December 31, 2023, which was primarily recorded within direct costs.

As a result of these wind-down and divestitures, the Company also recorded $ 3.0 million related to right-of-use operating leases, accrued $ 2.4 million for other facility-related exit cost, and recorded impairment of $ 0.9 million related to a customer-related intangible from a prior acquisition.

NOTE 20 - SEGMENT INFORMATION AND GEOGRAPHIC DATA

The Company provides a broad array of professional services to its clients across several markets, primarily within the U.S.

The Company operates as a single reportable and operating segment because the CODM, which is the Chief Executive Officer , manages the business activities on a consolidated basis.

The Company operates as a single reportable and operating segment because the Chief Operating Decision Maker (the “CODM”) , which is the Chief Executive Officer, manages the business activities on a consolidated basis.

Although the Company disaggregates its revenue by client market and client type, it does not manage its business or allocate resources based on client market or type.

1 unchanged sentence

The CODM uses consolidated net income to evaluate the Company’s performance against budgets and decide whether to use the profits to invest in the business, paydown debt, repurchase stock, pay dividends, or fund acquisitions.

Asset information provided to the CODM is not used for the purposes of making decisions and assessing performance of the Company.

Asset information provided to the CODM is not used for the purpose of making decisions and assessing performance of the Company.

The segment revenue, significant segment expenses, and segment profit are as follows:

1 unchanged sentence

Significant segment expenses:

Direct labor & related fringe costs

Direct labor & related fringe benefit costs

Subcontractors & other direct costs

1 unchanged sentence

Depreciation and amortization

Amortization of intangible assets

Amortization of intangible assets acquired in business combinations

Interest expense

Provision for income taxes

Other segment (income) expense (1)

(1) Other segment income (expenses) includes interest income, foreign currency expense, and gains/losses on disposition of assets.

Other segment expense (income) (1)

(1) Other segment expense (income) primarily includes interest income, gains/losses on foreign currency, and gains/losses on disposition of assets.

Other Segment Information and Geographic Data

1 unchanged sentence

There was no single foreign country that individually accounted for 10% or more of total revenue for the years ended December 31, 2025, 2024, and 2023 .

The following table provide net revenue for the Company ’s home country and foreign countries:

The following table provides net revenue for the Company’s home country and foreign countries:

Year ended December 31,

1 unchanged sentence

Total revenue

At December 31, 2024 and 2023, long-lived assets were primarily held in the U.S.

At December 31, 2025 and 2024 , tangible long-lived assets were primarily held in the U.S.

There was no single foreign country that, individually, held more than 10% of the total long-lived assets.

The following table provide long-lived assets held in the Company’s home country and in foreign countries:

The following table provides tangible long-lived assets held in the Company’s home country and in foreign countries:

Long-lived assets:

1 unchanged sentence

Total long-lived assets

NOTE 23 - SUBSEQUENT EVENTS

As of February 25, 2025, the Company repurchased 258,218 shares at a total cost of $ 30.5 million , or $ 118.14 per share pursuant to the Plan authorized by the Company's board of directors (see Note 14 - Stockholders’ Equity - Share Repurchases).

NOTE 21 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following at December 31:

Client advances and restricted funds

Cash collected not yet remitted to purchaser of billed receivables

Other accrued expenses and current liabilities

Total accrued expenses and other current liabilities

Schedule II - Valuation and Qualifying Accounts

Allowance for Credit Losses

Balance at beginning of period

Provision for credit losses

Write-offs, net of recoveries

Effect of foreign currency translation

Balance at end of period

Income Tax Valuation Allowance

Balance at beginning of period

Provision for income taxes - valuation allowance

Beginning Balance

Charged to costs and expenses

Charged to other accounts

Balance at end of period

Year ended December 31, 2023

Deducted from asset accounts:

Allowances for expected credit losses

Valuation allowance for deferred tax assets

Year ended December 31, 2024

Deducted from asset accounts:

Allowances for expected credit losses

Valuation allowance for deferred tax assets

Year ended December 31, 2025

Deducted from asset accounts:

Allowances for expected credit losses

Valuation allowance for deferred tax assets

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures