Group 1 - The article provides an initial impression of CRA International (NASDAQ: CRAI), highlighting its shareholder-friendly policies and profitability metrics, but notes concerns regarding its high price-to-earnings (P/E) ratio of approximately 25x, which leaves little margin for error [1] - The author previously rated CRAI stock as a Hold, indicating a cautious stance on the investment due to the valuation concerns despite the company's positive attributes [1] Group 2 - The article does not contain any specific financial data or performance metrics related to CRA International beyond the P/E ratio mentioned [1]

CRA International (CRAI) Conference June 11, 2025 10:45 AM ET Speaker0 Hey. Good morning, everyone. It's now 10:45 here on the East Coast, and we're ready to begin with our next presentation. My name is Mark Riddick. I'm a senior analyst with Sidoti and Company, and I thank you for joining us at the Sidoti June Small Cap Virtual Conference. Now our next presenting company is Charles River Associates, the ticker is CRAI. And joining us today is Paul Malley, June and CEO, and Chad Holmes, chief corporate deve ...

Core Viewpoint - CRA International (CRAI) is showing potential for investment as it has reached a significant support level and surpassed the 200-day moving average, indicating a long-term bullish trend [1]. Technical Analysis - The 200-day simple moving average is a critical indicator for establishing market trends, and CRAI has recently rallied by 11% over the past four weeks, currently holding a Zacks Rank of 2 (Buy) [2]. - The combination of the recent price rally and the favorable Zacks Rank suggests that CRAI may be poised for further upward movement [2]. Earnings Estimates - Positive earnings estimate revisions strengthen the bullish outlook for CRAI, with three upward revisions compared to none downward for the current fiscal year, leading to an increase in the consensus estimate [3]. - Investors are encouraged to monitor CRAI for potential gains in the near future, given its key technical levels and positive earnings revisions [3].

Core Viewpoint - CRA International (CRAI) is showing potential for investment as it has recently reached a key support level and surpassed the 50-day moving average, indicating a short-term bullish trend [1]. Technical Analysis - The 50-day simple moving average is a significant indicator for traders and analysts, used to identify support and resistance levels, and is considered crucial for signaling trends [2]. - Over the past four weeks, CRAI's stock has increased by 9.5%, and it currently holds a Zacks Rank 2 (Buy), suggesting further upward movement [2]. Earnings Estimates - There have been three upward revisions in CRAI's earnings estimates for the current fiscal year, with no downward revisions, indicating strong investor confidence in the bullish trend [3]. - The consensus earnings estimate has also increased, further supporting the positive outlook for CRAI [3].

Group 1: CRA International, Inc. (CRAI) Q1 2025 Results - CRAI reported adjusted EPS of $2.22, exceeding the Zacks Consensus Estimate by 15% and increasing 13.3% year over year [1] - Revenues reached $182 million, beating the consensus mark by 3.5% and rising 6% from the previous year [1] Group 2: Operational Metrics - The company achieved a utilization rate of 76%, with a 5% decrease in headcount year over year [2] - Non-GAAP EBITDA increased by 10.6% year over year to $24.8 million, with a non-GAAP EBITDA margin improvement of 58 basis points to 13.6% [2] Group 3: Cash Flow and Dividends - CRAI ended the quarter with cash and cash equivalents of $25.6 million, down from $26.7 million in the prior quarter [3] - The company generated $80 million from operating activities and reported capital expenditures of $974 million [3] - CRAI paid out $3.5 million in dividends during the quarter [3] Group 4: 2025 Outlook - CRAI provided 2025 revenue guidance in the range of $715 million to $735 million, with a non-GAAP EBITDA margin expected between 12% and 13% [4] - The company currently holds a Zacks Rank 3 (Hold) [4]

Financial Data and Key Metrics Changes - Revenue increased by 5.9% year over year to $181.9 million, marking the highest quarterly revenue in the company's history [5] - Non-GAAP net income, earnings per diluted share, and EBITDA increased year over year by 11%, 13%, and 11% respectively, each setting a new quarterly record [6] - Consultant headcount decreased by 5% compared to the first quarter of fiscal 2024, remaining flat sequentially [7][18] - Consulting utilization improved year over year to 76% [7] Business Line Data and Key Metrics Changes - Four practices (energy, finance, intellectual property, and life sciences) posted double-digit revenue growth, while the antitrust and competition economics practice achieved a new high for quarterly revenue [6] - Revenue from legal and regulatory services increased by roughly 5%, aligning with broader legal market trends [9] - Management consulting services revenue increased by 10% year over year, driven by strong performance in energy and life sciences practices [13] Market Data and Key Metrics Changes - Worldwide M&A activity reached $885 billion during the first quarter of fiscal 2025, representing a 15% increase compared to the previous year [9] - Total case filings and court judgments increased by 132% compared to the first quarter of fiscal 2024 [9] Company Strategy and Development Direction - The company aims to optimize its service portfolio by reconfiguring teams in targeted areas, affecting approximately 15 individuals [16] - The company is focused on maintaining a strong pipeline of projects and is optimistic about the life sciences practice's growth potential [25][26] Management's Comments on Operating Environment and Future Outlook - Management noted that the journey to a record-setting Q1 was not linear, with a slow start in January followed by increased activity in February and March [23] - The company reaffirmed its full-year financial guidance for fiscal 2025, expecting revenue in the range of $715 million to $725 million and a non-GAAP EBITDA margin of 12% to 13% [17] Other Important Information - The company concluded the quarter with $25.6 million in cash and $85 million in borrowings under its revolving credit facility, resulting in net debt of $59.4 million [20] - The company will celebrate its sixtieth anniversary by ringing the opening bell for NASDAQ on June 2 [67] Q&A Session Summary Question: April activity and guidance confidence - Management observed that trends from March have continued into April, but it is too early to declare sustained success [24] Question: Life sciences pipeline opportunities - The life sciences practice is experiencing success geographically and across business concentration areas, with hopes for continued momentum [26] Question: Headcount growth and retention - The company is focused on optimizing investments and expects headcount growth to align with revenue growth in the medium to long term [30][32] Question: External factors affecting business activity - Management noted that various macro and geopolitical factors create uncertainty, impacting client decisions [41] Question: Industry verticals showing activity - All parts of the portfolio are growing, contributing to strong financial results [44] Question: Return to office trends - There has been no significant shift in office participation, with colleagues averaging just over three days a week in the office [47] Question: Restructuring details - The restructuring affected 15 individuals, aimed at optimizing the portfolio without indicating general health issues in the practices [56] Question: Antitrust demand trends - The antitrust and competition economics practice continues to see strong demand, driven by both merger-related activity and investigations [59] Question: Collaboration across practices - Collaboration across practices and geographies is common and is expected to grow as client needs become more complex [62]

分组1 - CRA International (CRAI) reported quarterly earnings of $2.22 per share, exceeding the Zacks Consensus Estimate of $1.93 per share, and up from $1.96 per share a year ago, representing an earnings surprise of 15.03% [1] - The company posted revenues of $181.85 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.46%, compared to year-ago revenues of $171.79 million [2] - CRA has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance [2] 分组2 - The stock has underperformed the market, losing about 13.4% since the beginning of the year, compared to the S&P 500's decline of 5.3% [3] - The current consensus EPS estimate for the coming quarter is $1.85 on revenues of $179.52 million, and for the current fiscal year, it is $7.75 on revenues of $717.66 million [7] - The Consulting Services industry is currently ranked in the top 11% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8]

Financial Data and Key Metrics Changes - Revenue increased by 5.9% year over year to $181.9 million, marking the highest quarterly revenue in the company's history [5] - Non-GAAP net income, earnings per diluted share, and EBITDA increased year over year by 11%, 13%, and 11% respectively, each setting a new quarterly record [6] - Consultant headcount decreased by 5% compared to the first quarter of fiscal 2024, while consulting utilization improved to 76% [7][18] Business Line Data and Key Metrics Changes - Four practices: energy, finance, intellectual property, and life sciences posted double-digit revenue growth, while the antitrust and competition economics practice achieved a new high for quarterly revenue [6] - Revenue from legal and regulatory services increased by approximately 5%, aligning with broader legal market trends [8] - Management consulting services revenue increased by 10% year over year, driven by strong performance in energy and life sciences practices [12] Market Data and Key Metrics Changes - Worldwide M&A activity reached $885 billion during the first quarter, representing a 15% increase compared to the previous year [8] - Total case filings and court judgments increased by 132% compared to the first quarter of fiscal 2024, indicating a robust legal market [8] Company Strategy and Development Direction - The company aims to optimize its service portfolio by reconfiguring teams in targeted areas, affecting approximately 15 individuals [14] - The focus remains on expanding geographic reach and enhancing service offerings, particularly in high-demand areas such as antitrust and life sciences [9][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong start to fiscal 2025, reaffirming full-year financial guidance of $715 million to $725 million in revenue [16] - The company remains cautious about uncertain global macroeconomic conditions that could impact business [17] Other Important Information - The company ended the quarter with $25.6 million in cash and $85 million in borrowings, resulting in net debt of $59.4 million [19] - The effective tax rate for the first quarter was 27.2% on a non-GAAP basis, slightly down from 28% in the previous year [18] Q&A Session Summary Question: April activity and guidance confidence - Management noted that activity levels improved throughout the quarter, with trends from March continuing into April, though it is too early to declare sustained momentum [22][24] Question: Life sciences pipeline and opportunities - The life sciences practice is experiencing success across geographic and business areas, with hopes for continued momentum into Q2 and throughout 2025 [25][26] Question: Headcount growth and retention - The company is focused on optimizing investments and expects headcount growth to align with revenue growth in the medium to long term, despite a recent 5% year-over-year decline [28][30] Question: External factors affecting business activity - Management indicated that various macroeconomic and geopolitical factors create uncertainty, impacting client decisions but noted a general growth across all practices [38][41] Question: Return to office trends - The company has not seen significant shifts in office participation, with employees averaging just over three days in the office per week, consistent with pre-COVID practices [45][46] Question: Restructuring details - Management refrained from providing specifics on the restructuring affecting 15 individuals, emphasizing that it does not reflect the overall health of the practices involved [52][53] Question: Antitrust demand trends - The antitrust and competition economics practice continues to see strong demand, driven by both merger-related activity and ongoing investigations [57] Question: Collaboration across practices - Collaboration across practices and geographies is common and is seen as an underreported strength of the company, enhancing service delivery to clients [60][61]

Financial Performance - For Q1 of fiscal 2025, revenue was $181.9 million, a 5.9% increase from $171.8 million in Q1 of fiscal 2024[3] - Net income for Q1 of fiscal 2025 was $18.0 million, or 9.9% of revenue, compared to $13.7 million, or 8.0% of revenue, in Q1 of fiscal 2024[19] - Non-GAAP net income increased to $15,253 thousand, or 8.4% of revenue, up from $13,798 thousand, which was 8.0% of revenue in the previous year[42] - Non-GAAP EBITDA for Q1 of fiscal 2025 was $24.8 million, or 13.6% of revenue, compared to $22.4 million, or 13.0% of revenue, in Q1 of fiscal 2024[20] - Revenues for the fiscal quarter ended March 29, 2025, were $181,851 thousand, a 5.9% increase from $171,789 thousand for the same period in 2024[42] - Net income for the quarter was $18,002 thousand, representing 9.9% of revenue, compared to $13,691 thousand or 8.0% of revenue in the prior year[42] Operational Metrics - Companywide utilization rate improved to 76% in Q1 of fiscal 2025, up from 73% in Q1 of fiscal 2024[5] - Total Days Sales Outstanding (DSO) for Q1 of fiscal 2025 was 107 days, slightly up from 106 days in Q1 of fiscal 2024[24] - The weighted average number of diluted shares outstanding decreased from 7,011 in Q1 2024 to 6,862 in Q1 2025, indicating a reduction in share dilution[40] Expenses and Liabilities - SG&A expenses for Q1 of fiscal 2025 were $32.5 million, or 17.9% of revenue, compared to $30.5 million, or 17.8% of revenue, in Q1 of fiscal 2024[7] - Selling, general and administrative expenses for Q1 2025 were $32,538, which is 17.9% of revenue, slightly up from 17.8% in Q1 2024[38] - Total liabilities stood at $363,123 thousand, slightly up from $359,366 thousand in the previous quarter[45] Cash Flow and Capital Expenditures - Cash and cash equivalents decreased to $25.6 million at March 29, 2025, from $37.1 million at March 30, 2024[25] - Cash and cash equivalents at the end of Q1 2025 were $25,598, down from $37,122 at the beginning of the period, reflecting a net decrease of $11,524[30] - Capital expenditures totaled $1.0 million for Q1 of fiscal 2025, an increase from $0.7 million in Q1 of fiscal 2024[27] - Net cash provided by operating activities for Q1 2025 was $32,821, compared to $(79,994) in Q4 2024, indicating a significant recovery[30] - Adjusted net cash flows from operations for Q1 2025 reached $97,135, while for Q1 2024 it was $77,593, reflecting a year-over-year increase of 24.0%[32] Tax and Borrowings - The effective tax rate for Q1 of fiscal 2025 was 27.0%, compared to 28.0% in Q1 of fiscal 2024[17] - Outstanding borrowings under CRA's revolving credit facility increased to $85.0 million as of March 29, 2025, from $70.0 million at March 30, 2024[26] - The company borrowed $90,000 thousand under its revolving line of credit, compared to $70,000 thousand in the prior year[47] Foreign Currency and Other Losses - The company experienced a foreign currency loss of $474 in Q1 2025, compared to a loss of $142 in Q1 2024, indicating increased volatility in foreign exchange rates[40]

Core Viewpoint - Charles River Associates (CRAI) has demonstrated strong performance over the past year and is expected to maintain this momentum, making it a compelling addition to investment portfolios [1] Group 1: Performance and Rankings - CRAI's stock has increased by 17% over the past year, contrasting with a 13% decline in the industry [2] - The company holds a Zacks Rank of 2 (Buy) and a VGM Score of A, indicating strong investment potential [3] Group 2: Earnings Estimates and Surprises - In the last 60 days, three earnings estimates for 2025 have been revised upward, with no downward revisions, reflecting analysts' confidence [4] - The Zacks Consensus Estimate for 2025 earnings has risen by 3.1% [4] - CRAI has consistently exceeded earnings expectations, achieving an average surprise of 25.9% over the last four quarters [4] Group 3: Revenue and Growth Projections - The Zacks Consensus Estimate for CRAI's 2025 revenues is $717.7 million, representing a year-over-year growth of 4.4% [5] - The consensus estimate for earnings per share is $7.75, indicating a 2% year-over-year growth [5] Group 4: Talent and Workforce - CRAI's success is heavily reliant on its ability to attract and retain talent, with 74% of senior staff holding advanced degrees [6] - As of the end of 2024, CRAI employed 946 consulting staff, including 151 officers, 552 senior staff, and 243 junior staff [6] Group 5: Shareholder Returns - The company has consistently increased its dividend payouts, with payments of $9.6 million in 2022, $10.8 million in 2023, and $12.3 million in 2024 [7] - Dividend per share has risen from $1.24 in 2022 to $1.75 in 2024, demonstrating a commitment to enhancing shareholder returns [7]