ICON Reports Fourth Quarter and Full Year 2025 Results and Provides Outcome of Audit Committee Investigation
ICON plc a world-leading clinical research organization, reported its financial results for the fourth quarter and full year 2025, and announced the outcome of its investigation by the Audit Committee of the Board of Directors into certain accounting practices.
CEO, Mr. Barry Balfe commented, “ICON demonstrated continued commercial momentum through the fourth quarter, underpinned by disciplined execution against our strategic priorities. We achieved notably strong net bookings, with gross awards strengthening, cancellations normalizing and forward-looking indicators encouraging. Our competitive position remains very strong, with established partnerships continuing to deliver, while newer relationships are maturing and increasingly contributing to results. Importantly, the demand environment is also improving, supported by strengthening biotech funding and sustained large pharma investment.
I am also pleased that we have concluded the investigation into certain accounting practices. We identified the issues, rigorously investigated them and are actively building a stronger control environment. This will remain a priority for me, for our Board and for the broader leadership team.
Looking ahead, ICON retains a positional advantage in the drug development industry. Our leading scale, capabilities and customer base are augmented by our strategic investments in differentiated agentic technologies. While near-term financial performance will reflect the headwinds identified in 2025, increasing commercial momentum and a maturing portfolio of strategic partnerships point to sustainable growth into 2027 and beyond.”
Fourth Quarter 2025 Results
In quarter four 2025, gross bookings were $3,233 million with cancellations of $365 million. This resulted in net business wins of $2,868 million and a book to bill of 1.36.
Revenue for the fourth quarter was $2,112.5 million. This represents an increase of 2.5% on prior year revenue or 1.1% on a constant currency basis.
GAAP net income was $149.2 million, resulting in diluted earnings per share of $1.93 in quarter four 2025, compared to diluted earnings per share of $3.58 in quarter four 2024, a decrease of 46.1% year over year. Adjusted net income for the quarter was $195.1 million, resulting in adjusted diluted earnings per share of $2.52 compared to $3.86 per share for the fourth quarter 2024.
Adjusted EBITDA for the fourth quarter was $327.1 million or 15.5% of revenue.
The effective tax rate on adjusted net income in quarter four 2025 was 19.0%.
Cash generated from operating activities for the quarter was $234.2 million. During the quarter, $59.3 million was spent on capital expenditure. Additionally, $7.4 million of Term Loan B payments were made during the quarter. At December 31, 2025, the Group had cash and cash equivalents of $647.3 million, compared to cash and cash equivalents of $468.9 million at September 30, 2025 and $538.8 million at December 31, 2024. Net indebtedness as at December 31, 2025 was $2.8 billion.
Backlog Reporting Enhancements
The Company has decided to adjust how it calculates and presents cancellations and its backlog. The changes implemented are intended to provide enhanced visibility into reported metrics that are relevant to assess current and future performance of the business.
Effective October 1, 2025, ICON modified its cancellations policy, such that reported quarterly cancellation amounts now reflect in-period cancellation notifications from customers, in addition to studies that have been inactive, or identified by management as at-risk for cancellation. There is no change to ICON’s treatment of awards and their recognition into backlog.
These policy changes resulted in an adjustment to reported backlog of $3.9 billion, resulting in an updated backlog value of $21.1 billion, as of October 1, 2025.
Full Year 2025 Results and 2026 Guidance
Gross business wins were $11,867 million and cancellations were $2,834 million, as determined under the new policy. This resulted in net business wins of $9,033 million and a book to bill of 1.09. As of December 31, 2025, under the new methodology, total backlog was $21.8 billion.
Full year revenue was $8,251.3 million. This represents a year on year increase of 0.8% or 0.1% on a constant currency basis.
GAAP net income was $229.3 million, resulting in $2.90 diluted earnings per share compared to $8.90 per share for the equivalent prior year period, representing a decrease of 67.4%. Adjusted net income was $989.8 million, resulting in an adjusted diluted earnings per share of $12.53 compared to $13.37 per share for the equivalent prior year period. This represents a decrease of 6.3%.
Adjusted EBITDA was $1,530.7 million or 18.6% of revenue, a year on year decrease of 8.4%.
The effective tax rate on adjusted net income in 2025 was 16.9%.
Cash generated from operating activities in 2025 was $1,036.2 million. $174.2 million was spent on capital expenditure. $750.0 million worth of stock was repurchased at an average price of $167 per share. Additionally, $29.8 million of Term Loan B payments were made.
The Company is issuing full-year financial guidance for 2026 with revenue expected in the range of $7,850 – $8,150 million, and adjusted diluted earnings per share expected in the range of $10.00 – $11.00.
Conclusion of Investigation and Restatement of Financial Statements
The Audit Committee of the Board of Directors has completed its previously announced investigation into certain accounting practices and controls, initiated following concerns reported through Company management.
The investigation primarily focused on revenue recognition practices and concluded that improper adjustments were made to the clinical trial services revenue of the Company from the third quarter of 2023 to the fourth quarter of 2024, which impacted the timing of revenue recognition. The Company also identified errors in determining the estimated cost to complete, the assessment of realizable value, and certain manual adjustments in respect of clinical trial services revenue contracts during 2023, 2024 and 2025. The Company also identified issues with the presentation of unbilled and unearned revenue, where contract assets and liabilities eligible for offset were not fully identified.
As described in the Form 20-F, the Company has concluded that revenue was overstated by $65.3 million for the year ended December 31, 2023 (0.8% total revenue) and by $92.7 million for the year ended December 31, 2024 (1.1% of total revenue). As part of the investigation, ICON identified material weaknesses in its internal control over financial reporting. The Company’s entity level controls, including the tone from management, were insufficient to enforce the monitoring and maintenance of a proper environment for effective internal control over financial reporting. Management did not design and operate effective internal controls to prevent material errors to revenue and related accounts.
The Company’s current management, under the oversight of the Audit Committee, is committed to remediating the material weaknesses identified above, fostering continuous improvement in internal controls and enhancing its overall internal control environment. The Company’s remediation plan includes enhancements in relation to four key areas: oversight of control environment, policies and procedures, training and internal controls over manual adjustments.
The 2025 Annual Report on Form 20-F contains additional details regarding the material weaknesses and actions the Company have taken and continue to take to remediate the identified material weaknesses.
Board of Directors Update
The Company also announced that Mr. Kevin Egan and Mr. Jeff Elliott will join ICON’s Board of Directors, effective June 1, 2026 and that Dr. Steve Cutler resigned from the Board effective May 21, 2026.
Mr. Kevin Egan brings a wealth of experience, notably in auditing, after completing a 37-year career in public auditing, including leading PwC Ireland’s audit and assurance practice from 2007 – 2015. He also currently serves as non-executive director and Chair of the Audit Committee at Perrigo plc.
Mr. Jeff Elliott also brings a significant amount of expertise and financial depth, from previous leadership and operational roles. He was Chief Financial Officer of Exact Sciences Corp. from 2016 to 2024, and also served as Chief Operating Officer from 2021 to 2023. Prior to his roles at Exact Sciences, Jeff was a senior equity research analyst covering healthcare companies at Robert W. Baird & Co. Additionally, Jeff currently serves as non-executive director on the Boards of Quanterix, Inc. and Sera Prognostics.
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