Welcome to the Third Quarter 2020 ICF Earnings Conference Call. My name is Vanessa, and I will be your operator for today’s call. During the presentation, all participants are in a listen-only mode. Afterwards, you will be invited to participate in a question-and-answer session. Please note, this conference is being recorded on Thursday, November 5, 2020, and cannot be reproduced or rebroadcast without permission from the company. And now I would like to turn the program over to Lynn Morgen of AdvisIRy Partners.

Thank you, Vanessa. Good afternoon, everyone. And thank you for joining us to review ICF’s third quarter 2020 performance. With us today from ICF are John Wasson, President and Chief Executive Officer; Bettina Welsh, Chief Financial Officer; and joining them are Sudhakar Kesavan, Executive Chairman; and James Morgan, Chief of Business Operations. During this conference call, we will make forward-looking statements to assist you in understanding ICF management’s expectations about our future performance. These statements are subject to a number of risks that could cause actual events and results to differ materially, and I refer you to our November 5, 2020, press release and our SEC filings for discussions of those risks. In addition, our statements during this call are based on our views as of today. We anticipate that future developments will cause our views to change. Please consider the information presented in that light. We may, at some point, elect to update the forward-looking statements made today but specifically disclaim any obligation to do so. I will now turn the call over to ICF’s CEO, John Wasson to discuss third quarter 2020 performance. John?

Thank you, Lynn. And thank you all for joining us this afternoon to review our third quarter performance and discuss our business outlook. There are several key takeaways from our third quarter results that I would like to highlight. First, our diversified business model continues to provide ICF with substantial resilience, enabling us to benefit from broad trends across our government and commercial clients. Second, we continue to see considerable year-on-year growth in service revenue, which represents the work performed by ICF employees. In the third quarter, service revenue increased 3% and is up 4.1% year-to-date, reflecting increased demand for our services and excellent execution on client programs by our professional staff. Third, the growth catalysts that we have identified across our markets are driving these higher service revenue comparisons and our exceptional business development momentum. ICF had record third-quarter contract awards of $792 million for a book-to-bill of 2.2. Our trailing 12-month book-to-bill ratio improved to 1.2 at the end of the quarter, which has set the stage for our continued growth in 2021. Fourth, we succeeded in generating record year-to-date operating cash flow, which enabled us to pay down debt and reduce our leverage ratio to a level that we had not expected to achieve until the end of the fourth quarter. This performance is aligned with our historical track record of leveraging to make strategic acquisitions and then utilizing our strong cash flow to pay down debt in short order. Year-on-year increase in service revenue we achieved in the third quarter was led by programs for federal government clients and our energy advisory and implementation work for commercial clients, primarily utilities. The decline in total revenue for the period was primarily attributable to a $21 million reduction in pass-through revenues on which we generally earn little or no margin. We were pleased to report even higher growth in adjusted EBITDA, thanks to a combination of favorable business mix, higher utilization, and lower SG&A costs. While SG&A costs will increase once we emerge from this pandemic, a portion of the cost savings that we have achieved in the last two quarters will become permanent. We continue to work towards optimizing our facility costs. This will help us return to expanding our adjusted EBITDA to service revenue margins in 2021 and beyond. Our third-quarter revenue performance was led by strong growth in our federal government business, which was up 18% year-on-year, reflecting both organic growth and the ITG acquisition. ITG is proving to be an excellent fit, and the combination of their broad IT modernization capabilities with our deep domain expertise and client relationships has provided significant growth opportunities to us. In the third quarter, we were awarded approximately $100 million in IT modernization work, including a $35 million plus-up on our re-compete with the Department of Health and Human Services Children’s Bureau that expands the scope of our work to include operating and modernizing its child welfare IT systems. Additionally, we received a new single-award blanket purchase agreement with a $49 million ceiling from the U.S. Food and Drug Administration to provide IT platform advisory and development services for its digital services center. And a new $24.4 million contract with HHS Children’s Bureau for engineering and architecture services to develop a new cloud-based National Child Welfare Data Management System. At the end of the third quarter, our business development pipeline, and IT modernization alone was a robust $1.5 billion. The Department of Health and Human Services is ICF’s largest client and, including the IT modernization contracts I just mentioned, represented almost 60% of our $792 million in third-quarter contract wins. The large re-compete contracts, new contracts, and BPAs that we were awarded in the third quarter are noted in today’s release. Additionally, ICF was chosen for another $12 million in COVID-related work by several government agencies. As we have mentioned on past calls, we see significant growth opportunities for ICF in the public health arena. We are still in the response phase regarding COVID-19 and are active in information dissemination and surveillance and analytics work to better understand how the virus spreads. The recovery phase, which will come next, is expected to require monetization of disease surveillance systems and associated analytics, and our expanded IT modernization capabilities, together with our public health expertise, will be very relevant to these programs. Revenues from state and local clients were consistent with our expectations. The great majority of the work we do for state and local clients is either federally funded or funded by municipal bonds to support infrastructure projects, making our work more resilient to the vagaries of state budgets. Disaster management represents approximately half of the revenues in this client category and remains on track to contribute approximately $110 million in revenues this year. Since the beginning of this year, we have won small but strategic mitigation contracts in four states, Missouri, West Virginia, Florida, and South Carolina, which represent many of the mitigation contracts that have been let to date, and we are awaiting award decisions on larger contracts in other jurisdictions. ICF is very competitive when it comes to HUD funded mitigation opportunities. The combination of our 30-plus years of climate resilience work, our 30-plus years of HUD technical assistance and experience with large scale mitigation projects has given us key qualifications in this emerging market. We have already been very active in the very early stages of the response to the weather events of 2020. We have contracts in the Gulf States that have been expanded recently to incorporate initial response and recovery activities for Hurricanes Laura and Delta, for which our innovative drone technology and data management tools have been in high demand. Revenue from international government clients came in as expected and consistent with the prior quarter. Approximately two-thirds of the negative year-on-year comparison reflected the falloff in pass-through revenues on which we earn minimal profit. Our strategy is to keep costs in check and pivot towards those areas of the business that remain resilient in these challenging times. For example, in the third quarter, we secured a significant contract to support the implementation of a European government energy efficiency program. Our commercial energy business, which mainly serves utility clients, performed well in the third quarter, led by the continued strength of our energy markets advisory business. This was largely due to strong demand for ICF’s financial and technical advisory services to support considerable transaction activity driven by renewables, storage, and gas asset development. Work on energy efficiency programs for utilities continued apace and we are awaiting decisions on multiple submitted proposals in California, with contract awards expected by early in 2021 and startup in 2021 or 2022. We are also awaiting additional RFPs for which we have been down-selected. Our distributed energy resources consulting practice also performed well in the third quarter as we advised utility clients on how to address the impact of distributed resources on the grid and developed and implemented pilot testing programs related to distributed energy technology. Lastly, our commercial marketing services clients are experiencing the pandemic in different ways. Clients in certain verticals are expecting the recovery curve to be longer and deep into 2021, while others are executing on their budgets. We are effectively managing costs in our commercial marketing services business and continue to deploy our resources in growth areas while ensuring that we are ready to scale programs when business conditions improve. After a record third quarter of contract awards, I am pleased to report that our business development pipeline was a robust $6.8 billion at the end of the third quarter, representing a diversified set of opportunities across our client set. This pipeline, together with a very strong backlog of $2.9 billion, supports our confidence in ICF’s future prospects. I also would like to highlight the strong improvement in cash flow that we achieved in the third quarter. Our ability to generate substantial operating cash helps us fund acquisitions to support our growth strategy. Now, I will turn the call over to our CFO, Bettina Welsh, for a review of our third quarter results. Bettina?

Thank you, John. Good afternoon, everyone. I am pleased to provide additional color on the company’s strong financial performance and cash flow in the third quarter of 2020, which led to an increase in our full-year guidance for both earnings and operating cash flow. Total revenue for the third quarter of 2020 was $360.3 million, 3.6% below last year’s level, primarily as a result of lower pass-through revenues, which accounted for 26.5% of total revenue this quarter, compared to 31.2% in last year’s third quarter. Like the prior sequential quarter, we saw an increase in service revenue, which was up 2.9% in the third quarter to $264.7 million. On a year-to-date basis, it was up 4.1% compared to last year. Our gross profit was $137 million, an increase of 0.9% from $135.8 million in the year-ago quarter. Gross profit margin on total revenue expanded by 170 basis points to 38% due to lower pass-through revenues year-to-year on which we earned lower margins. Indirect and selling expenses of $100 million were flat year-to-year, inclusive of the ITG acquisition. As a percentage of service revenue, indirect and selling expenses declined to 37.8% from 38.9% in last year’s third quarter, which is due to lower SG&A expenses such as travel. EBITDA increased 3.6% to $36.9 million from $35.6 million last year. Adjusted EBITDA, which excludes special charges related to severance for staff alignment, as well as acquisition-related charges was up 4.9% to $37.8 million during the third quarter of this year, compared to $36 million last year. Adjusted EBITDA margin on service revenue was 14.3%, compared to 14% last year. Operating income was $28.3 million, compared to $28.7 million reported in the third quarter of 2019 and includes an increase of $1.6 million in amortization of intangibles, primarily related to the ITG acquisition, which was completed on January 31st of this year. Our tax rate was 27.2%, compared to 23.6% in the third quarter of 2019, primarily reflecting a benefit last year due to the higher deductibility of employee compensation programs. Net income for the quarter was $17.9 million or $0.94 per diluted share. This compares to $19.6 million or $1.02 per diluted share in the third quarter of 2019. This year’s third-quarter results reflected increased interest and amortization expense related to the ITG acquisition and the higher tax rate. Non-GAAP diluted EPS, which excludes the impact of amortization of intangibles and special charges related to severance for staff realignment was $1.10, compared to $1.12 reported in the third quarter of 2019. We were very pleased with our cash flow generation in the third quarter, primarily as a result of continued strong collection activity. Year-to-date, operating cash flow was $95.2 million, compared to $6.4 million for the comparable period a year ago. Consequently, we now expect full year 2020 operating cash flow of approximately $120 million, 31% ahead of 2019 and ahead of the $110 million we originally anticipated. Days sales outstanding were 83 days or 71 days excluding the slower-paying Puerto Rico contract, compared to 94 days and 77 days, respectively, in the third quarter of 2019. By year-end, we anticipate DSOs to be in the range of 78 days to 83 days. Our net leverage ratio at the end of September was 2.88, compared to 3.52 at the end of June 2020, reflecting our use of cash flow to pay down $79 million of our long-term debt associated with the January acquisition of ITG. We expect our net leverage ratio to be approximately 2.6 at year-end 2020. Year-to-date capital expenditures were $14.6 million, compared to $22.3 million a year ago. As we continue to manage our costs due to the ongoing COVID-19 health crisis, we now anticipate our full-year capital expenditures to range from $21 million to $23 million, down $2 million from our previous guidance. As for our capital allocation strategy, our priorities remain the same, grow our business organically, fund acquisitions, and pay down debt and we will continue to pay our dividend and will repurchase shares under our current authorization to minimize dilution from our employee incentive programs. Today, we declared a quarterly cash dividend of $0.14 per share payable on January 12, 2021, to shareholders of record on December 11, 2020. For modeling purposes, our expectations for full-year 2020 are as follows, depreciation and amortization expense in the range of $20.5 million to $21.5 million, amortization of intangibles of $13.3 million, interest expense between $14 million to $14.5 million, $1 million below our previous guidance given debt reduction, tax rate of no more than 27%, and fully diluted weighted average shares of approximately 19.1 million. With that, I will turn the call back to John for his closing remarks.

Thanks, Bettina. Thanks to better than anticipated year-to-date performance, we are raising our guidance for full-year 2020 EPS and cash flow. Specifically, we now expect GAAP diluted EPS to range from $3.15 to $3.30, exclusive of special charges, up from the previous guidance midpoint of $3 and non-GAAP diluted EPS of $3.90 to $4.05, up from the previous guidance midpoint of $3.65. Revenues are now expected to range from $1.46 billion to $1.5 billion. Additionally, we are now guiding to operating cash flow of approximately $120 million for 2020, up from our previous guidance of $110 million and representing a 31% increase from 2019 levels. Looking ahead, we are confident in ICF’s growth prospects heading into 2021. We have managed well through the COVID-19 health crisis, driving considerable service revenue growth, winning substantial contract awards and building a robust business development pipeline. These metrics, which reflect the underlying growth catalysts in our market, position ICF for mid single-digit organic growth in service revenue in the coming years. In the third quarter, our personnel turnover rate was 11.2%, remaining below the industry average. I would like to take a moment to commend ICF employees, who have pivoted so well to address the needs of our clients while working remotely. They have been and will continue to be a key driver of our success. Finally, ICF has prioritized being a good corporate citizen. In addition to the mission-related work we do for our clients, we have been focused on managing to the highest standards with respect to environmental and social issues, including being the first professional services firm to go carbon neutral and embracing social justice, diversity, and equal pay. We are proud of these accomplishments, which have had a positive impact on society. Operator, I’d now like to open the call to questions.

And thank you. We have our first question from Tobey Sommer with Truist Securities. Please go ahead.

Thanks. Wondering if you could maybe characterize the contract awards as sort of the proportion that was new if you mentioned that I didn’t catch it, I apologize. Just trying to see, it is a big number, but want to see how it may flow through into organic growth sort of next year and the year after? Thanks.

Sure. Tobey, in approximate terms, about 40% to 45% of the awards in the third quarter were from re-competes, while 55% were from new contract awards.

Okay. It looks like you had some fairly sizable recent awards for IT modernization.

Yeah.

Were those related to ITG being part of the firm, or do you think those bids and contract awards are still influenced by independent ITG before ICF took ownership?

I think, as we discussed last quarter, we have fully integrated ITG with our legacy IT modernization skills. A portion of this integration involves the synergies related to ITG's capabilities along with our client relationships and domain expertise, while another part comes from opportunities that ITG had in its pipeline before joining ICF, based on their strengths. Overall, I would describe it as a combination of both. However, I can say that we are experiencing increasing success and synergies from our IT modernization efforts by leveraging ITG's capabilities alongside our client relationships and domain knowledge. There were several examples I mentioned earlier, including the Child Welfare Information Gateway, which is a long-term contract for us. We enhanced that contract during the re-competition, resulting in significant additional revenues from IT modernization. This is a clear instance where we would not have been able to enhance that contract without ITG and their capabilities.

Perfect. And then it still may be early, but with respect to the fiscal and federal response to the pandemic over the more medium- and long-term. Do you have any more refined way to think about the size of what that could look like early in the pandemic, there were some funds. But over the longer term, those may look more like down payments than the net effort on the part of Congress to really address the issue?

Yeah. I think it’s hard for me to, I think, put a dollar value on that, Tobey. As you know, there was significant funding for the public health agency in the stimulus bill, as I recall, $500 billion for CDC and close to, I think, $900 billion for NIH. Certainly, part of that has gone to the immediate response; some of that will be for the longer recovery. I think those funds are still there and can potentially drive future contract awards. I talked about some of those opportunities in my remarks, potential types of opportunities. Frankly, I think these public health agencies are still in the immediate response phase and totally focused on that. How those larger longer-term opportunities play out, I think, is still to be seen and it’s hard to put a dollar value on them. You can rest assured that we are watching it carefully and in those discussions with our clients constantly. But they are still focused on the immediate COVID response for obvious reasons.

Okay. I will get back in queue. Thank you.

And thank you. We have our next question from Sam England with Berenberg.

Hi, everyone. Thanks for your questions. To start, could you provide some insights on the current RFP volumes for the government sector? Have you noticed any decline, particularly at the state and local levels, regarding the number of RFPs?

I would say on the RFP front, we really haven’t seen any slowdown on the federal or state and local side. I mean I think we are seeing typical flow of opportunities. Our pipeline remains quite robust. We are writing a lot of proposals. We were quite pleased to see the awards here in the third quarter, which was important for us to get our book-to-bill ratio back to 1.2 for the trailing 12 months, so the award and proposal activity in the federal arena, I think, continues apace. In state and local, we continue to be busy on opportunities on the disaster recovery front. We continue to see new opportunities and are waiting on several awards there. As I said, our pipeline is quite robust $6.5 billion, and so across both those markets, I think, the proposal activity and business development opportunities continue apace.

Great. Thanks. And then the second one, you talked about some permanent cost savings that you have made. Can you just give a bit more detail around that and is there anything else you can do on the marketing services side of the business around cost?

As we've mentioned in previous calls, our spending on indirect travel and consultants has significantly declined due to the COVID crisis. As the pandemic subsides, our consultants will need to resume traveling, but we don’t expect to maintain these low levels of travel expenses. However, we believe we can secure some of the savings we’ve achieved for the long term, which will structurally enhance our margins and allow us to invest more in the business regarding travel and consultancy. We are also closely examining our facilities to identify potential savings. Since we have shifted to a fully remote working model, while we intend for employees to eventually return to the office, we believe we can reduce our office space and secure long-term savings in that area. I’ll ask James Morgan, our Chief of Business Operations, if he has anything to add on this topic.

I believe you have highlighted the main points. Ultimately, we have adapted well to this virtual environment, and we will continue to some extent as we progress. This will lead to cost savings in travel and facilities, which are two important areas.

Okay. Great. Thanks. And then maybe just one more, I just wondered what you are seeing on the commercial side of the business in terms of actual project cancellations versus just lower levels of revenues on existing sort of contracts that you are working on?

Our commercial energy business is continuing to perform well without any cancellations, and we are experiencing growth in that area. In terms of commercial marketing services, the market remains stable as we previously described, with no significant deterioration or new challenges compared to last quarter. While we did see some reductions from Q1 to Q2, we have effectively managed that by adjusting the size of the business and aligning it with our backlog. We feel confident in our approach and the current utilization and profitability levels are generally meeting our expectations. Overall, we are not observing further decline, and the key question moving forward is when we will see improvements and a ramp-up in these businesses, which will depend on the specific sectors. However, we are effectively managing the situation as it stands.

Great. Thanks so much, guys. I will leave it there.

And thank you. We have our next question from Joseph Vafi with Canaccord.

Hey, everyone. Good afternoon. I have a couple of quick questions regarding the strong bookings figure this quarter. John, I believe I've asked this before, but I think it's important to discuss deal sizes, the deal pipeline, and the IT mix. I may have joined the call a bit late, so I apologize if this has already been addressed. As ICF continues to grow, I would like to see larger deals being pursued. An update on this would be appreciated, and I'll have a quick follow-up after that.

Sure. Joe, so I think, obviously, on the IT modernization front, as you could see in our third-quarter sales results described in our press release. We are winning sizable contracts that are $50 million to $100 million contracts, which as we have discussed in the past, one of the great attractions of the IT modernization area is that these are larger longer-term contracts that really have the potential to move the needle for us. The sales in the third quarter and some of those larger contracts described certainly show that there are large opportunities, and we can win these larger contracts. That’s certainly, IT modernization and the opportunities we see there are certainly driving our pipeline and driving our sales in addition to the significant opportunities we are seeing across HHS. As I said in my remarks, the majority of our contract wins in the quarter were in HHS. So yes, Joe, we are seeing those larger opportunities and we are winning them, and it is driving up our pipeline. Some of these contracts are also longer period; they can be five years to seven years, eight years, and so that obviously drives up the sales as the contract period becomes longer.

Sure. With a change in administration, ICF has often been regarded as more favorable under Democratic leadership. However, the financial results don't always reflect that perception. When there is a change in administration, it can bring about certain transitions related to initiatives, regardless of the political climate. If there is a change in the White House, should we identify any potential policy shifts that could be advantageous in the long run but might slow down progress in the short term?

I would like to revisit your initial point. At times, it seems that our social work might align more strongly with one political party over another. However, I want to emphasize that this is not necessarily true. Sudhakar and I have been at ICF for over 30 years and have witnessed seven or eight changes in administration during that time. I want to highlight that changes in administration generally have less impact on our business than expected. The U.S. Government, in a sense, operates like a massive aircraft carrier that doesn’t change course rapidly. We have consistently managed to grow and identify opportunities under both Republican and Democratic administrations. While the policy focus, such as energy or public health, does shift from one administration to another, our diverse capabilities enable us to adapt and support these changes in our areas of expertise. We’ve demonstrated resilience under both Democratic and Republican leadership. Our experience shows that budgets tend to remain stable and do not undergo drastic changes during a divided government. With the current election, it appears that we will continue with the Biden administration. The growth catalysts we have identified have proven to be bipartisan. IT modernization was prioritized under Obama and has continued to be a focus during the Trump administration. Public health and health services are usually bipartisan as well and have held up effectively. Additionally, it’s evident that disaster recovery efforts have fostered bipartisan support, especially as storms become more severe and frequent. Our growth catalysts appear to be largely bipartisan. Regarding which administration might be stronger or weaker, opportunities related to the environment and climate may be more prevalent under a Democratic administration, which could benefit us if we see a Democratic President. Overall, I view the growth drivers as strong, and I believe we’ll perform well regardless of whether a Democrat or Republican is in office.

Great. Thanks for that color, John. Much appreciated.

And thank you. We have our next question from Andrew Nicholas with William Blair.

Hi. Good afternoon. Thanks for taking my questions. If we see a return to more stringent business restrictions in the winter, alongside higher COVID case counts, how would you expect the business to react differently a second time through compared to how it performed and reacted in March and April? Just trying to get a sense or think through the puts and takes to a second wave, both in terms of your ability to convert on the pipeline and also generate new business?

I believe that about 90% of our business has been unaffected and continues at its usual pace despite COVID. I don’t foresee any significant impacts from additional lockdowns. We managed through previous lockdowns, and while some areas have felt the effects, it's hard to predict how things will unfold this time. So far, we have handled the current challenges well, and our operations align with our existing backlog. We do not anticipate new awards or opportunities, and forecasting the future is challenging based on the nature and severity of potential lockdowns.

Got it. That’s fair. And then just a housekeeping item for me. Given the decline in pass-through revenue you have experienced of late, I was wondering if you could speak to how the amount of pass-through revenue typically varies across the segments. I am just trying to get a better sense of growth rates at the net service level, net service revenue level, given the gross revenue growth metrics are being negatively impacted by pass-through? Thanks.

I believe that our pass-through ratio across the company generally falls within the 25% to 30% range on average. However, there are specific areas of the business where the pass-through ratio is higher. For instance, in disaster recovery, the ratio can reach as high as 40% or 45%. We have not seen any significant effects from COVID in the disaster recovery sector. Another segment with a higher pass-through ratio is our marketing and communications business in Europe, particularly because it relies heavily on in-person events, leading to similar pass-through levels of around 40% to 45%. Unfortunately, due to the impact of COVID, this segment has experienced a significant revenue decline, with about two-thirds of that decline attributable to pass-throughs. This indicates a considerably higher pass-through ratio in that area. Bettina, would you like to add anything?

I think the other part of the business that may have been affected is our loyalty program segment, particularly in relation to hospitality and the travel industry, which has experienced some pass-through activity. Beyond that, I believe it's primarily been influenced by events in Europe and Asia.

Got it. Thank you.

And thank you. We have our next question from Marc Riddick with Sidoti.

Hi. Good evening.

Hi, Marc.

Hi.

So I wanted to touch a little bit on a couple of questions. One on the energy efficiency side, I was wondering if you could sort of give an update as to maybe what you are seeing as to market opportunities there, particularly sort of where things stand with California and then I have a follow-up on the IT side of the house.

Sure. As I mentioned earlier, we are actively engaged in proposals in California. There's a two-step process for bidding there. In the first round, you submit your ideas, and they narrow down the submissions. If your ideas are well-received, you move on to the second round, which is a more formal proposal. We are participating in both rounds and are currently awaiting awards for several proposals we've put forward in round two, with expectations for these awards as we enter next year. We anticipate continued opportunities as we start next year, and we will be involved in the initial phase of this two-step process. California is very active, and we're busy preparing proposals. We project that awards will begin in 2021, and we will continue to be engaged in proposals throughout the year. Historically, California has outsourced 20% of its energy efficiency budget, aiming to increase that to 60% by 2022. Therefore, we expect to be busy with proposals and see awards during 2021 and 2022.

Okay. Great. Now shifting to ITG, we're nearing a year since the acquisition, and I'm glad to hear you feel confident about the integration. New business wins have been announced, which is promising. I'm curious if you could provide an update on your thoughts about the overall marketplace compared to when you initially acquired the company at the start of the year. How does the specific pipeline look? Does it match your expectations, or is it better or worse? Additionally, regarding long-term growth, does it align with your initial projections, or have your views changed since bringing ITG in-house? Thank you.

I think we couldn't be happier with the outcome of the ITG acquisition. We saw it as a crucial market for our civilian clients, especially given the significant focus from the federal government and the large opportunities present. Our strategy was to combine ITG’s top-notch IT modernization skills and their track record with our relationships and expertise in the civilian sector. This approach has allowed us to uniquely position ourselves and drive their pipeline forward, leading to considerable growth and synergistic gains. We believe we are performing very well in this regard. Since we closed the acquisition at the end of January, we have secured over $200 million in IT modernization contracts and we maintain a strong pipeline of $1.5 billion. We are confident that we can grow this business by more than 15%. In the long term, considering the federal government's push for modernization, this will serve as a growth engine for many years. Overall, I don't think it could have gone better, and we are very pleased with our progress with ITG and the opportunities ahead.

It’s great to hear. Thank you very much for the color.

And thank you. We have no further questions. I will now turn the call over to management for closing remarks.

Thank you for participating with us today. We look forward to seeing you virtually at upcoming conferences and meetings. Thanks for attending and stay safe.

And thank you. Ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.