Revenue Recognition

12 Months Ended

Dec. 31, 2025

Revenue from Contract with Customer [Abstract]

Revenue Recognition

NOTE 9 - REVENUE RECOGNITION

Disaggregation of Revenue

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 markets, client type, and contract mix.

Client markets provide insight into the breadth of the Company’s expertise. 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. Fixed-price contracts are considered to provide the highest amount of performance risk as the Company is required to deliver a scope of work or level of effort for a negotiated fixed price. Time-and-materials contracts require the Company to provide skilled employees for negotiated fixed hourly rates. Since the Company is not required to deliver a scope of work, but merely skilled employees, it considers these contracts to be less risky than a fixed-price agreement. 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 market, client type, and contract mix are summarized below.

	Year ended December 31,
	2025		2024		2023
Client Markets:
Energy, environment, infrastructure, and disaster recovery	$	979,137	$	934,399	$	805,942
Health and social programs		620,731		765,139		814,789
Security and other civilian & commercial		272,983		320,249		342,507
Total	$	1,872,851	$	2,019,787	$	1,963,238

	Year ended December 31,
	2025		2024		2023
Client Type:
U.S. federal government	$	809,073	$	1,088,607	$	1,084,047
U.S. state and local government		322,956		316,017		309,516
International government		119,131		110,680		103,446
Total Government		1,251,160		1,515,304		1,497,009
Commercial		621,691		504,483		466,229
Total	$	1,872,851	$	2,019,787	$	1,963,238

	Year ended December 31,
	2025		2024		2023
Contract Mix:
Time-and-materials	$	802,013	$	855,533	$	811,911
Fixed-price		932,659		932,353		886,200
Cost-based		138,179		231,901		265,127
Total	$	1,872,851	$	2,019,787	$	1,963,238

Contract Assets and Liabilities:

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 contracts.

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

	December 31, 2025			December 31, 2024			Change
Contract assets	$	186,684		$	188,941		$	(2,257	)
Contract liabilities (1)		(46,487	)		(24,580	)		(21,907	)
Net contract assets (liabilities)	$	140,197		$	164,361		$	(24,164	)

(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. There were no material changes to contract balances due to impairments or credit losses during the period. 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 $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.