Core Viewpoint - Exponent, Inc. is conducting its first quarter 2025 earnings conference call to discuss financial results and market opportunities [1][3]. Group 1: Company Overview - The conference call features key participants including Dr. Catherine Corrigan, President and CEO, and Rich Schlenker, EVP and CFO [4]. - The call is being recorded and will be available for webcast on the company's investor relations website [3]. Group 2: Financial Results and Forward-Looking Statements - The discussion includes forward-looking statements regarding Exponent's market opportunities and future financial results, which are subject to risks and uncertainties [5]. - Actual results may differ materially from those discussed due to various factors outlined in Exponent's periodic SEC filings [5].

Group 1 - Exponent (EXPO) reported quarterly earnings of $0.52 per share, exceeding the Zacks Consensus Estimate of $0.48 per share, but down from $0.59 per share a year ago, representing an earnings surprise of 8.33% [1] - The company achieved revenues of $137.44 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.92%, and showing a slight increase from $137.21 million year-over-year [2] - Exponent has outperformed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] Group 2 - The stock has underperformed the market, losing about 11.7% 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 upcoming quarter is $0.54 on revenues of $134.15 million, and for the current fiscal year, it is $1.98 on revenues of $531.67 million [7] - The Consulting Services industry, to which Exponent belongs, is currently ranked in the top 11% of over 250 Zacks industries, indicating a favorable outlook for the sector [8]

Financial Data and Key Metrics Changes - For Q1 2025, total revenues were approximately flat at $145.5 million, with net revenues also flat at $137.4 million compared to Q1 2024 [15][21] - Net income decreased to $26.7 million or $0.52 per diluted share, down from $30.1 million or $0.59 per diluted share in the prior year [15][16] - EBITDA for the quarter decreased by 6% to $37.5 million, producing a margin of 27.3% of net revenues, compared to 29.2% in Q1 2024 [16][20] - Billable hours decreased by 4% year over year to approximately 376,000, and average technical full-time equivalent employees decreased by 4% to 966 [18] Business Line Data and Key Metrics Changes - The Engineering and Scientific segment represented 84% of revenues before reimbursement, with revenues flat in Q1 2025 [21] - The Environmental and Health segment represented 16% of revenues before reimbursement, with a 2% increase driven by engagements in the chemicals industry [21][22] Market Data and Key Metrics Changes - The consumer products industry accounts for approximately 25% of revenue, with two-thirds being proactive work for consumer electronics clients [9] - The energy industry represents about 20% of revenue, split evenly between reactive and proactive services, with growing demand driven by AI and infrastructure development [10] - The transportation industry contributes mid-teens percentage of revenue, with 90% being reactive, driven by disputes in advanced vehicle technologies [11] Company Strategy and Development Direction - The company maintains a diversified business model, with 60% of work being reactive and 40% proactive, allowing it to navigate economic cycles effectively [7][14] - The focus remains on advancing capabilities, investing in talent, and delivering insights to help clients adapt to changes in their industries [31] - The company is strategically hiring in areas with increasing demand, such as automated vehicles and digital health [64] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic uncertainty but expressed confidence in the company's resilience and ability to generate long-term profitable growth [14][30] - The company expects revenue before reimbursements to decline in the low single digits for Q2 2025, with EBITDA margins projected at 26% to 27% [22][24] - Management highlighted ongoing opportunities in regulatory consulting and compliance work, particularly in the chemicals industry [29] Other Important Information - The company anticipates a tax rate of approximately 28% for Q2 2025, up from 26% in the same quarter last year [27] - Capital expenditures for the full year 2025 are expected to be between $10 million and $12 million [28] Q&A Session Summary Question: Growth rates in proactive and reactive work - The reactive business saw low single-digit growth, offset by a slight decline in proactive services overall [35][36] Question: Changes in productivity across end markets - Clients are exploring supply chain diversification, which may lead to increased demand, but changes take time to manifest [38][39] Question: Second quarter outlook and utilization - Utilization is expected to be slightly below last year, impacted by the July 4 holiday and some delays in client projects [44][46] Question: FTE growth in a choppy environment - The company plans to continue hiring in areas of increasing demand, expecting a 4% increase in headcount by year-end [64][66]

Financial Data and Key Metrics Changes - For Q1 2025, total revenues were approximately flat at $145.5 million, with net revenues also flat at $137.4 million compared to Q1 2024 [14] - Net income decreased to $26.7 million or $0.52 per diluted share, down from $30.1 million or $0.59 per diluted share in the prior year [15] - EBITDA decreased by 6% to $37.5 million, producing a margin of 27.3% of net revenues, compared to 29.2% in Q1 2024 [16] - Billable hours decreased by 4% year over year to approximately 376,000, and average technical full-time equivalent employees decreased by 4% to 966 [17] Business Line Data and Key Metrics Changes - The Engineering and Scientific segment represented 84% of revenues before reimbursement, with revenues flat in Q1 2025 [20] - The Environmental and Health segment represented 16% of revenues before reimbursement, with a 2% increase driven by engagements in the chemicals industry [21] Market Data and Key Metrics Changes - The consumer products industry accounts for approximately 25% of revenue, with two-thirds being proactive work for consumer electronics clients [8] - The energy industry represents about 20% of revenue, split evenly between reactive and proactive services [9] - The transportation industry contributes mid-teens percentage of revenue, with approximately 90% being reactive [10] Company Strategy and Development Direction - The company maintains a diversified business model, with 60% of work being reactive and 40% proactive, focusing on litigation support and regulatory consulting [7][34] - The company is strategically hiring in areas with increasing demand, such as automated vehicles and digital health [62] - The company anticipates long-term growth opportunities driven by technological advancements and increasing safety and health expectations [30] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic uncertainties but expressed confidence in the company's resilience through economic cycles [13] - The company expects revenue before reimbursements to grow in the low single digits for fiscal 2025, maintaining margin guidance [21] - Management highlighted ongoing opportunities in regulatory consulting and compliance work, particularly in the chemicals industry [28] Other Important Information - The company experienced a negative tax impact associated with share-based awards, resulting in a consolidated tax rate of 29.4% for Q1 2025 [16] - Capital expenditures for the full year 2025 are expected to be between $10 million and $12 million [27] Q&A Session Summary Question: Growth rates in proactive and reactive work - Reactive business grew in the low single digits, offset by a slight decline in proactive services overall [33] Question: Changes in productivity across end markets - Clients are exploring supply chain diversification, which may take time to manifest [36] Question: Second quarter outlook and utilization - Utilization is expected to be slightly below last year, impacted by the July 4 holiday and some delays in client projects [42][44] Question: Impact of government policies and macro environment - Clients are tightening budgets but continue to proceed with necessary work, indicating resilience in the business [56] Question: FTE growth in a choppy environment - The company plans to continue hiring in areas of increasing demand, expecting a 4% increase in headcount by year-end [63]

Revenue Performance - Total revenues for Q1 2025 were approximately flat at $145.5 million, compared to $144.9 million in Q1 2024[5] - Exponent anticipates low-single digit revenue growth for the full fiscal year 2025 compared to fiscal year 2024[10] - The engineering and other scientific segment accounted for 84% of revenues before reimbursements, remaining flat year-over-year[8] - The environmental and health segment represented 16% of revenues before reimbursements, with a 2% increase driven by the chemicals industry[9] Income and Profitability - Net income decreased to $26.7 million, or $0.52 per diluted share, down from $30.1 million, or $0.59 per diluted share in Q1 2024[6] - EBITDA decreased to $37.5 million, representing 27.3% of net revenues, compared to $40.1 million, or 29.2% of net revenues in Q1 2024[7] - Exponent's operating income for Q1 2025 was $44.4 million, compared to $30.7 million in Q1 2024[22] - Net income for the quarter ended April 4, 2025, was $26,650 million, a decrease of 4.9% from $30,142 million in the same quarter of 2024[28] - EBITDA for the quarter was $37,538 million, down 6.4% from $40,121 million year-over-year[28] - EBITDAS for the quarter was $45,717 million, a decline of 3.7% compared to $47,461 million in the previous year[28] Expenses and Taxation - Income taxes increased to $11,110 million from $10,281 million, reflecting a rise of 8.1%[28] - Stock-based compensation rose to $8,179 million, up 11.4% from $7,340 million in the prior year[28] - Depreciation and amortization expenses increased to $2,492 million, compared to $2,324 million, marking a growth of 7.2%[28] - Interest income, net, was $(2,714) million, slightly higher than $(2,626) million in the previous year[28] - The consolidated tax rate for Q1 2025 was 29.4%, up from 25.4% in Q1 2024[6] Cash and Dividends - The company plans to maintain its quarterly cash dividend of $0.30, with $16.4 million paid in dividends during Q1 2025[7] - Exponent closed the quarter with $245.1 million in cash and cash equivalents[7] Operating Performance Measures - The company emphasizes that EBITDA and EBITDAS are useful measures of operating performance and cash flow, providing meaningful comparisons of past, present, and future results[29] - Management believes that non-GAAP measures like EBITDA and EBITDAS should be considered in addition to GAAP measures for a comprehensive view of financial performance[29] - The company continues to focus on enhancing operating performance despite the decline in net income and EBITDA metrics[29]

Core Viewpoint - Exponent, Inc. has declared a quarterly cash dividend of $0.30 per share, reflecting its commitment to shareholder value amidst macroeconomic challenges [1][3]. Dividend Information - The quarterly cash dividend of $0.30 per share will be paid on June 20, 2025, to shareholders of record as of June 6, 2025 [1]. - Exponent plans to continue paying quarterly dividends each year in March, June, September, and December, subject to the Board's final determination [2]. Company Strategy and Positioning - The company emphasizes its diversified services portfolio, which positions it to withstand short-term volatility while pursuing long-term growth opportunities [3]. - Exponent integrates over 90 technical disciplines and employs more than 950 consultants to address complex challenges across various industries [3][4]. Global Operations - Exponent's consultants leverage multidisciplinary expertise and resources from offices in North America, Asia, and Europe, enabling the delivery of high-value insights to clients [4].

Core Insights - Exponent, Inc. reported first quarter results for fiscal year 2025, showing resilience in its diversified business model despite challenges in the consumer electronics sector [2][4][9] Financial Performance - Total revenues for Q1 2025 were approximately flat at $145.5 million compared to $144.9 million in Q1 2024, while revenues before reimbursements were $137.4 million, slightly up from $137.2 million [4] - Net income decreased to $26.7 million, or $0.52 per diluted share, down from $30.1 million, or $0.59 per diluted share in the same period last year [5][22] - EBITDA fell to $37.5 million, representing 27.3% of net revenues, compared to $40.1 million, or 29.2% of net revenues in Q1 2024 [6][27] Business Segments - The engineering and other scientific segment accounted for 84% of revenues before reimbursements, remaining flat year-over-year, driven by demand in transportation and utilities [7] - The environmental and health segment represented 16% of revenues before reimbursements, with a 2% increase attributed to higher engagements in the chemicals industry [8] Business Outlook - Exponent anticipates low-single-digit revenue growth for the full fiscal year 2025, maintaining its guidance despite facing headwinds in the second quarter [9][17] - The company is returning to a 52-week fiscal year in 2025, which may impact full-year comparisons due to the previous year's 53-week benefit [10]

Core Insights - Exponent, Inc. will report its First Quarter of fiscal year 2025 financial results on May 1, 2025, after market close [1] - The conference call to discuss the financial results will be hosted by Dr. Catherine Corrigan and Richard Schlenker at 4:30 p.m. ET [1][2] - A live and archived webcast of the conference call will be available on the company's Investor Relations website [2] Company Overview - Exponent integrates over 90 technical disciplines with more than 950 consultants to assist clients in navigating complex industry challenges [3] - The company focuses on failure analysis and developing solutions aimed at creating a safer, healthier, and more sustainable world [3] - Exponent's consultants leverage multidisciplinary expertise and resources globally, providing insights to various sectors including multinational companies, startups, law firms, and governments [4]

Exponent Inc. (NASDAQ: EXPO ) is a little-followed consulting company. That said, it is a market leader and has consistently grown in the past decade. Consulting for safety, litigation, regulation, accidents, and failures is a unique business that grows with time. The dividend yield is low, the dividendI am a self-taught individual investor and I have been investing in stocks for over 25 years. I focus on dividend growth investing with a long-term horizon since I believe in the compounding power of dividend ...

Financial Performance - Revenues for 2024 increased by 4.1% to $558,514,000 compared to $536,766,000 in 2023[167] - Net income rose by 9% to $109,002,000 in 2024, up from $100,339,000 in 2023, with diluted earnings per share increasing to $2.11 from $1.94[162] - Total operating income increased to $119,557,000 in 2024, up 7.4% from $111,322,000 in 2023[176] - Other income increased by 13.2% to $27,813,000, primarily due to a $2,851,000 rise in interest income from cash and cash equivalents[178] - EBITDA for 2024 was $147,058,000, representing 28.4% of revenues before reimbursements, up from 27.7% in 2023[191] - Effective tax rate decreased to 26.0% in 2024 from 26.2% in 2023, with an adjusted rate of 27.9% excluding excess tax benefits[179] Segment Performance - Engineering and Other Scientific segment revenues increased by 5.1% to $469,544,000, accounting for 84.1% of total revenues[167] - Environmental and Health segment revenues decreased by 1.0% to $88,970,000, representing 15.9% of total revenues[167] - Engineering and Other Scientific segment operating income rose by 7.1% to $164,883,000, driven by increased billing rates and billable hours[176] Expenses - Compensation and related expenses increased by 3.2% to $330,011,000, constituting 59.1% of total revenues[170] - Other operating expenses rose by 11.2% to $46,196,000, making up 8.3% of total revenues[172] - General and administrative expenses decreased by 7.0% to $22,726,000, representing 4.1% of total revenues[174] Utilization and Operations - Utilization rate improved to 73% in 2024 from 69% in 2023, driven by better alignment of resources with demand[166] - Billable hours remained constant at 1,495,000 for both 2024 and 2023, with a slight increase in utilization[166] - Utilization rate improved to 73% in 2024, up from 69% in 2023, reflecting increased demand for services[192] Cash Flow and Investments - Net cash provided by operating activities was $144,537,000 in 2024, compared to $127,352,000 in 2023[181] - Cash and cash equivalents increased to $258,901,000 as of January 3, 2025, from $187,150,000 at December 29, 2023[181] - The company plans to continue investing in capital expenditures and may use cash reserves for stock repurchases and strategic acquisitions[186] Strategic Focus - The company continues to focus on expanding client relationships and enhancing its capabilities in response to increasing demand for multidisciplinary services[161] Foreign Currency Exposure - The company has net assets of approximately $24.2 million in British Pounds, indicating exposure to foreign currency risk[196]