Revenue

Down ~1.4% (from $494.436M in Q1 2024 to $487.618M in Q1 2025)

The slight decline in revenue reflects a contraction in client orders or market uncertainties relative to the strong revenue base of Q1 2024, possibly driven by challenges in specific segments such as federal government spending. " " This decline is modest compared to other metrics, suggesting that overall sales largely held steady, but the revenue mix may be shifting from higher-growth areas.

Operating Income

Down ~6.2% (from $40.944M in Q1 2024 to $38.390M in Q1 2025)

The larger percentage drop in operating income compared to revenue indicates rising cost pressures or lower margins despite a relatively small revenue decline. This suggests that cost structures and operating efficiencies that supported Q1 2024 performance were not fully sustained in Q1 2025, resulting in decreased profitability. " "

Net Income

Down ~1.7% (from $27.317M in Q1 2024 to $26.851M in Q1 2025)

Net income’s near-flat performance despite a more pronounced decline in operating income was largely due to a significant reduction in the tax expense, which helped cushion the bottom line. The net effect is a slight decline, indicating effective management of non-operational items compared to the previous period. " "

Depreciation and Amortization

Up 166% (from $5.574M in Q1 2024 to $14.795M in Q1 2025)

The dramatic increase in depreciation and amortization points to a one-time or structural adjustment, such as the accelerated write-off of assets or changes in depreciation schedules that were not present in Q1 2024. This alteration in accounting treatment has a significant impact on expense recognition. " "

Provision for Income Taxes

Down ~55% (from $7.019M in Q1 2024 to $3.150M in Q1 2025)

A substantial drop in the tax provision helped partially offset operating challenges, likely due to revised tax planning strategies or lower taxable income relative to Q1 2024. This change contributed to stabilizing net income despite weaker operating performance. " "

Operating Cash Flow

From a strong positive of $95.360M (Q4 2024) to negative $33.034M (Q1 2025)

The swing in operating cash flow reflects deteriorating cash generation driven by adverse working capital movements, such as a large decrease in accounts payable and an increase in accrued expenses in Q1 2025. This suggests that timing differences in cash collections and payments, as well as declining revenue, negatively impacted liquidity compared to previous periods. " "

Long-term Debt

Up ~22% (from $411.743M in Q4 2024 to $502.044M in Q1 2025)

The rise in long-term debt indicates increased borrowing, which may have been undertaken to address short-term cash flow challenges or to refinance existing obligations under more favorable terms. This increase is also reflective of adjustments in working capital facilities compared to the previous period. " "

Revenue

FY 2025

flat to down 10% " "

flat to down 10% " "

no change

Adjusted EBITDA Margins

FY 2025

remain consistent with 2024 levels "

remain similar to 2024 levels " "

no change

GAAP EPS

FY 2025

flat to down 10% "

flat to down 10% "

no change

Non-GAAP EPS

FY 2025

flat to down 10% "

flat to down 10% "

no change

Depreciation and Amortization Expense

FY 2025

$21 million to $23 million "

$21 million to $23 million "

no change

Amortization of Intangibles

FY 2025

$35 million to $37 million "

$35 million to $37 million "

no change

Interest Expense

FY 2025

$30 million to $32 million "

$30 million to $32 million "

no change

Capital Expenditures

FY 2025

$26 million to $28 million "

$26 million to $28 million "

no change

Full-Year Tax Rate

FY 2025

approximately 20.5% "

approximately 18.5% "

lowered

Full-Year Operating Cash Flow

FY 2025

$150 million "

$150 million "

no change

Fully Diluted Weighted Average Share Count

FY 2025

approximately 18.6 million "

approximately 18.6 million "

no change

Commercial Energy, State, Local, & International Government Clients

FY 2025

no prior guidance

growth of at least 15% in the aggregate "

no prior guidance

IT Modernization Business

FY 2025

no prior guidance

decline by 5% to 10% "

no prior guidance

Federal Contracting Dynamics and Uncertainty

Q4 2024: Emphasized risks from the new administration – stop work orders, contract terminations, estimated revenue cushion, and diversification away from risky federal programmatic work. " " " Q3 2024: Focused on expanding federal IT modernization and climate services with an optimistic outlook on bipartisan spending, despite mentioning delays in some federal awards. " " "

Q1 2025: Detailed challenges including $115 million in impacted revenues from stop work orders and contract terminations, adjusted backlog by $375 million, and reaffirmed flat-to-down revenue guidance; noted further slowdown in new federal opportunities. " " " " "

Heightened uncertainty and more cautious tone. The discussion has shifted toward acknowledging significant revenue impacts and slower contract awards compared to previous periods.

Commercial Energy Business Growth and Sustainability

Q3 2024: Reported strong double-digit growth and nearly 25% revenue increase driven by market ramp-up, along with emphasis on long-term trends and profitability. " " Q4 2024: Outlined impressive performance with 26% overall growth, strong Q4 numbers, and strategic acquisition of AEG boosting capabilities. " " " "

Q1 2025: Continued to highlight robust growth with 21% revenue increase, integration of the AEG acquisition, and new programs (flexible load management, electrification, battery storage) that position the sector as the highest-margin business; expected aggregate growth of at least 15% for commercial, state/local and international clients. " " " "

Consistently strong and positive. The growth narrative remains robust with strategic acquisitions integrated, though pace moderates slightly, the overall sentiment stays positive.

Acquisition Integration and Strategic M&A

Q3 2024: Emphasized having plenty of capacity to pursue M&A with disciplined criteria—evaluating opportunities based on capabilities, culture, and customer sets (with specific mention of energy and federal health IT). " " Q4 2024: Detailed integration of the AEG acquisition and a clear focus on energy sector tuck-in deals while avoiding federal acquisitions due to uncertainty. " "

Q1 2025: Confirmed successful integration of AEG and reiterated that any near-term acquisitions are likely to focus on the energy sector rather than the federal market, while maintaining ample capacity to pursue attractive opportunities. " " "

Stable focus with disciplined execution. The strategy continues to pivot away from the federal space while reinforcing strength in energy-related acquisitions and integration.

IT Modernization Downturn

Q3 2024: Noted a strong push in federal IT modernization—with larger contract bids, pipeline progress, and bipartisan support leading to a high single-digit growth outlook. " " Q4 2024: Acknowledged the potential for mid-to-high single-digit revenue shrinkage due to slower procurements and a change in government priorities, though expecting recovery in the medium term. " " "

Q1 2025: Reported an expected decline of 5% to 10% for the year owing to procurement delays caused by Department of State reviews; while no material cuts have occurred, the shift in pace is clear, with optimism for opportunities later in the year potentially driving growth in 2026. " "

Shift from earlier optimism to caution. Q3 was upbeat while Q4 and Q1 now focus on near-term challenges and slower contract awards, indicating a more cautious sentiment for this business line.

Share Repurchase and Capital Management

Q3 2024: Highlighted targeted share repurchases to offset employee dilution and outlined a balanced approach with investments in organic growth, strategic M&A, debt reduction, and quarterly dividends. " " Q4 2024: More aggressive share repurchases were noted, with significant buybacks and clear communication of capital allocation priorities, including deleveraging. " "

Q1 2025: Continued opportunistic share repurchase activity (313,000 shares for $35 million) with an unwavering commitment to debt reduction, strategic M&A, organic growth and maintaining a quarterly dividend, reinforcing confidence in long-term value creation. "

Consistent and positive. The focus on capital management remains stable with disciplined share repurchases, debt reduction, and balanced capital allocation across periods.

Climate Services Growth

Q3 2024: Reported that climate services were growing at a double-digit rate with robust demand across commercial, state/local, and federal segments, despite federal share being only 15%-20% of the portfolio. " " Q4 2024: No explicit mention of climate services growth, although related environmental contracts were referenced indirectly. "

Q1 2025: Provided detailed insights on climate-related opportunities, emphasizing growth among state and local governments (driven by IRA and infrastructure funds) and international wins with the EU and UK; expected to contribute substantially to a 15% aggregate growth target. " "

Elevated and more detailed focus. While Q3 was positive on domestic growth, Q1 has expanded the narrative to include international opportunities and more granular insight on climate resilience, suggesting increased strategic emphasis.

Health and Social Programs Challenges

Q3 2024: Highlighted challenges with a 5.2% revenue decline from the Health and Social Programs segment due to pass-through revenue reductions and ramp-up delays on USAID contracts. " " Q4 2024: Discussed challenges around federal contract risks and workload in public health areas (nutrition, obesity, suicide prevention) amid new administration priorities. "

Q1 2025: Less focus on challenges and more on potential new opportunities in the HHS space—particularly areas related to children’s health, pesticides, and food additives—with clarity on these opportunities expected later in the year. "

Shifting sentiment from challenges to opportunity. Whereas previous calls emphasized revenue declines and ramp-up delays, Q1 now projects potential growth areas under the new administration’s focus, softening earlier challenges.

Cost Management and Workforce Impact

Q3 2024: Emphasized operational efficiencies with a 50 bps decline in indirect expense as a percentage of revenue, improved gross and adjusted EBITDA margins, and high utilization rates; workforce improvements were linked to higher direct labor contributions. " " Q4 2024: Focused on aggressive cost management and transparent workforce redeployment strategies to counteract federal contract uncertainties. " " " "

Q1 2025: Continued careful cost management achieving higher gross and adjusted EBITDA margins despite modest revenue decline; noted specific challenges from a reduction in the federal workforce while highlighting the company's agility and strong corporate culture. " "

Consistent focus with slight increased emphasis on agile redeployment. While cost management remains disciplined across periods, Q1 presents a sharper focus on adapting the workforce due to federal sector contraction.

Increased Competition in the Energy Sector

Q3 2024: Mentioned by John Wasson as a notable trend—with new entrants coming into the energy sector and challenging valuations, even as the space presented tremendous opportunity. " Q4 2024: There was no reference to increased competition in this domain.

Q1 2025: Not mentioned.

Topic dropped from discussion. Increased competition was explicitly discussed in Q3 2024 but absent in Q1 2025, suggesting that competitive pressures may not be a current focus for management.

Debt Reduction and Financial Flexibility

Q3 2024: Detailed reduction in debt from $533.9 million to $419.1 million with a notable improvement in adjusted net leverage (from 2.7x to 1.85x) and highlighted capacity for further acquisitions. " " Q4 2024: Reported continued debt reduction with lower interest expenses, improved adjusted net leverage (1.8x), and active share repurchases supporting financial flexibility. " "

Q1 2025: Addressed a net debt level of $499 million (seasonal increase partly driven by share repurchases and acquisitions) and reiterated plans to reduce leverage by ¾ of a turn by year-end; maintained robust financial flexibility for future acquisitions and strategic measures. " "

Consistent strategic emphasis. Though absolute debt levels vary slightly due to seasonal factors and recent acquisitions, the overall approach toward deleveraging and maintaining financial flexibility is steady and positive.