Financial Data and Key Metrics Changes - The company reported revenues of $943.7 million, a slight decrease from $949.2 million in the prior year quarter, but a sequential increase of $45.4 million or 5.1% from Q1 2025 [27] - Adjusted EBITDA was $111.6 million or 11.8% of revenue, compared to $115.9 million or 12.2% of revenues in the prior year quarter [29] - Earnings per share (EPS) decreased to $2.13 from $2.34 in the prior year quarter, but increased from $1.74 in Q1 2025 [28] Business Line Data and Key Metrics Changes - Corporate Finance and Restructuring achieved record revenues of $379.2 million, up 9% year-over-year, with adjusted segment EBITDA of $81.7 million or 21.5% of segment revenue [31] - Forensic and Litigation Consulting (FLC) revenues increased by 10% to $186.5 million, with adjusted segment EBITDA rising to $31.2 million or 16.7% of segment revenues [33] - Economic Consulting revenues decreased by 17% to $191.7 million, with adjusted segment EBITDA dropping to $14.2 million or 7.4% of segment revenues [36] - Technology segment revenues fell by 27.9% to $83.6 million, with adjusted segment EBITDA down to $5.3 million or 6.3% of segment revenues [38] - Strategic Communication achieved record revenues of $102.7 million, up 20.8%, with adjusted segment EBITDA of $18.5 million or 18% of segment revenue [39] Market Data and Key Metrics Changes - The company noted a slowdown in Foreign Corrupt Practices Act (FCPA) cases and monitorship due to changing regulatory posture, impacting FLC revenues [35] - Economic Consulting faced lower demand for M&A related antitrust services, particularly in EMEA, contributing to revenue declines [36] - The restructuring environment showed a 25% year-over-year growth, driven by increased demand for restructuring services [56] Company Strategy and Development Direction - The company is focused on investing in talent and capabilities, particularly in areas like cybersecurity, financial services, and corporate reputation [16][21] - Management emphasized the importance of maintaining a diverse portfolio to weather economic headwinds and capitalize on opportunities in challenging markets [46] - The company plans to continue hiring senior professionals, particularly in response to disruptions in competitors, to enhance its capabilities [65] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 has been a challenging year with significant headwinds, yet the company has delivered solid results [8][22] - The outlook for the second half of the year includes expectations for gradual improvement in demand for M&A related services and a focus on maintaining momentum in restructuring and corporate finance [44] - Management expressed confidence in the company's resilience and potential for future growth despite current challenges [24] Other Important Information - The company repurchased 2.2 million shares at an average price of $161.88 during the quarter, with a total of approximately $309.3 million remaining under its stock repurchase authorization [41] - Total debt, net of cash, increased to $317.2 million as of June 30, 2025, primarily due to share repurchases and forgivable loan issuances [42] Q&A Session Summary Question: Divergence between Economic Consulting and Technology Segment - Management confirmed that the strength in economic consulting was primarily non-M&A related activity, while the technology segment faced challenges due to paused or canceled second requests [50][52] Question: Hiring of Senior Professionals - The company has hired more senior professionals in the first half of the year than ever before and will continue to hire as opportunities arise [63][65] Question: Regulatory Environment Impact - Management indicated that the overall regulatory environment has posed more headwinds than tailwinds this year, affecting various segments differently [67] Question: Drivers of Weakness in Transformation Strategy - The weakness in transformation strategy is attributed to year-over-year comparisons with a strong prior year and a focus on cost takeout matters that yield success fees [78]

FTI Consulting, Inc. Second Quarter 2025 Earnings Conference Call July 24, 2025 Cautionary Note About Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve uncertainties and risks. Forward-looking statements include statements concerning our plans, initiatives, projections, prospects, policies, processes and practices, obje ...

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of comprehensive income, stockholders' equity, and cash flows, along with their accompanying notes, providing a snapshot of the company's financial position, performance, and cash movements. [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (vs Dec 31, 2024) | Percentage Change | |---|---|---|---|---| Selected Balance Sheet Data | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |---|---|---| - Total assets **decreased by $102.67 million (2.85%)** from **$3,596.83 million** at December 31, 2024, to **$3,494.16 million** at June 30, 2025, primarily **driven by a significant decrease in cash and cash equivalents**[8](index=8&type=chunk) - Long-term debt **increased from $0** at December 31, 2024, to **$470.00 million** at June 30, 2025, indicating new borrowings[8](index=8&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Selected Comprehensive Income Data | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (YoY) | Percentage Change (YoY) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | Percentage Change (YoY) | |---|---|---|---|---|---|---|---|---| - Net income **decreased by 14.6%** for the three months ended June 30, 2025, and **by 18.5%** for the six months ended June 30, 2025, compared to the respective prior year periods[10](index=10&type=chunk) - Diluted EPS **decreased from $2.34 to $2.13 (9.0%)** for the three months and **from $4.58 to $3.87 (15.5%)** for the six months ended June 30, 2025, compared to the prior year[10](index=10&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' Equity Changes (Dec 2024 to Jun 2025) | Metric | Balance at Dec 31, 2024 (in thousands) | Balance at June 30, 2025 (in thousands) | Change (in thousands) | |---|---|---|---| - Total stockholders' equity **decreased by $358.41 million** from December 31, 2024, to June 30, 2025, primarily **due to significant common stock repurchases and reclassification of negative additional paid-in capital**[12](index=12&type=chunk) - The company purchased and retired common stock **totaling $187.68 million** in Q1 2025 and **$358.24 million** in Q2 2025, including excise tax[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Selected Cash Flow Data | Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (YoY) | Percentage Change (YoY) | |---|---|---|---|---| - Net cash used in operating activities significantly **increased from $139.59 million** in H1 2024 to **$409.52 million** in H1 2025, primarily **due to increased forgivable loan issuances, compensation, and income tax payments, and decreased cash collections**[16](index=16&type=chunk)[155](index=155&type=chunk) - Net cash used in financing activities **increased from $58.32 million provided** in H1 2024 to **$84.19 million used** in H1 2025, mainly **due to $536.7 million in common stock repurchases, partially offset by increased net borrowings under the Credit Facility**[16](index=16&type=chunk)[157](index=157&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Basis of Presentation and Significant Accounting Policies](index=8&type=section&id=1.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) The financial statements are prepared in accordance with GAAP and SEC rules for interim information, with certain disclosures condensed or omitted, and management confirms all necessary adjustments for fair presentation were made, with prior period amounts reclassified for conformity and fair values of financial instruments estimated to equal carrying values. - Unaudited condensed consolidated financial statements prepared **in accordance with GAAP and SEC rules** for interim financial information[17](index=17&type=chunk) - Certain prior period amounts have been reclassified to conform to the current period presentation[17](index=17&type=chunk) - Fair values of all financial instruments are estimated to be **equal to their carrying values** as of June 30, 2025, and December 31, 2024[17](index=17&type=chunk) [2. New Accounting Standards](index=8&type=section&id=2.%20New%20Accounting%20Standards) The company is evaluating the impact of two new FASB ASUs: ASU 2023-09 (Income Taxes), effective for annual periods after December 15, 2024, which expands income tax disclosures; and ASU 2024-03 (Income Statement Expenses), effective for annual periods after December 15, 2026, requiring disaggregated expense disclosures. - FASB issued ASU 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' effective for annual periods beginning after December 15, 2024, expanding annual disclosures in income tax rate reconciliation and cash taxes paid[19](index=19&type=chunk) - FASB issued ASU 2024-03, 'Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,' effective for annual periods beginning after December 15, 2026, requiring additional disaggregated disclosure around certain income statement expense line items[20](index=20&type=chunk) - The Company is in the process of evaluating the impact of both new ASUs on its consolidated financial statements[19](index=19&type=chunk)[20](index=20&type=chunk) [3. Earnings per Common Share](index=9&type=section&id=3.%20Earnings%20per%20Common%20Share) Basic EPS is calculated by dividing net income by the weighted average common shares outstanding, while diluted EPS adjusts for potentially dilutive common shares from equity compensation plans using the treasury stock method. Earnings Per Common Share Data | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| - Antidilutive stock options and share-based awards were **260** for the three months ended June 30, 2025, compared to **40** in the prior year, and **241** for the six months ended June 30, 2025, compared to **32** in the prior year[22](index=22&type=chunk) [4. Revenues](index=9&type=section&id=4.%20Revenues) Revenues are recognized when performance obligations are satisfied, and changes in estimated transaction price for performance-based and contingent arrangements led to **$13.5 million** and **$15.9 million** in recognized revenues for the three and six months ended June 30, 2025, respectively, with unfulfilled performance obligations totaling **$24.5 million** as of June 30, 2025, most expected to be recognized within 24 months. - Revenues are recognized when performance obligations are satisfied by transferring services to a customer, reflecting the expected consideration[23](index=23&type=chunk) Revenues from Changes in Transaction Price | Period | Revenues Recognized from Change in Transaction Price (in millions) | |---|---| Unfulfilled Performance Obligations | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | |---|---|---| [5. Accounts Receivable and Allowance for Expected Credit Losses](index=10&type=section&id=5.%20Accounts%20Receivable%20and%20Allowance%20for%20Expected%20Credit%20Losses) Accounts receivable, net, increased to **$1,126.92 million** as of June 30, 2025, from **$1,020.17 million** at December 31, 2024, driven by increases in both billed and unbilled receivables, while the provision for expected credit losses decreased significantly for both the three and six months ended June 30, 2025, compared to the prior year. Accounts Receivable, Net | Component | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | |---|---|---| Provision for Expected Credit Losses and Write-offs | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 3

Core Insights - FTI Consulting reported second quarter 2025 revenues of $943.7 million, a decrease of $5.5 million or 0.6% compared to the same quarter last year, with a more significant decline of $17.6 million or 1.8% when excluding foreign currency impacts [2][8] - Net income for the quarter was $71.7 million, down from $83.9 million in the prior year, primarily due to lower revenues and increased direct costs [2][3] - The company’s adjusted EBITDA was $111.6 million, representing 11.8% of revenues, compared to $115.9 million or 12.2% of revenues in the prior year [2] Financial Performance - Revenues decreased in the Economic Consulting and Technology segments, while Corporate Finance & Restructuring, Forensic and Litigation Consulting, and Strategic Communications segments saw revenue increases [2][6][10][11][12] - The Corporate Finance & Restructuring segment experienced a revenue increase of $31.3 million or 9.0%, reaching $379.2 million, driven by higher demand for restructuring services [6] - The Forensic and Litigation Consulting segment's revenues rose by $17.0 million or 10.0%, totaling $186.5 million, attributed to higher realized bill rates [7] Segment Analysis - Economic Consulting revenues fell by $39.2 million or 17.0% to $191.7 million, primarily due to decreased demand for M&A-related services [10] - Technology segment revenues decreased by $32.3 million or 27.9% to $83.6 million, driven by lower demand for M&A-related services [11] - Strategic Communications segment revenues increased by $17.7 million or 20.8% to $102.7 million, mainly due to higher demand for corporate reputation services [12] Cash Position and Capital Allocation - Net cash provided by operating activities was $55.7 million, down from $135.2 million in the prior year, primarily due to increased forgivable loan issuances [3] - The company repurchased 2,192,333 shares at an average price of $161.88, totaling $354.9 million, with approximately $309.3 million remaining for future repurchases [4] - Cash and cash equivalents stood at $152.8 million, a decrease from $226.4 million a year earlier [5] Guidance - FTI Consulting revised its full-year 2025 revenue guidance to a range of $3.660 billion to $3.760 billion, with EPS expected between $7.24 and $7.84 [13]

Over the last 30 days, there has been no revision in the consensus EPS estimate for the quarter. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course of this timeframe. While it's common for investors to rely on consensus earnings and revenue estimates for assessing how the business may have performed during the quarter, exploring analysts' forecasts for key metrics can yield valuable insights. In light of this perspective, let's dive into the average e ...

Core Insights - FTI Consulting has appointed Eva Tomlinson as Senior Managing Director and Breck Heidlberg as Managing Director in the Export Controls, Sanctions and Trade practice, enhancing the firm's capabilities in navigating complex trade environments [1][2]. Company Developments - The appointments of Tomlinson and Heidlberg reflect FTI Consulting's commitment to investing in top-tier global trade talent, aiming to bolster its advisory services amid a challenging trade landscape [3]. - Tomlinson brings over 20 years of experience in Foreign-Trade Zone solutions and tariff mitigation strategies, having previously founded a multimillion-dollar advisory firm focused on these areas [3][4]. - Heidlberg, with a background in trade compliance at Microsoft and experience in the U.S. government, will expand FTI Consulting's export controls and sanctions advisory services [5][6]. Strategic Focus - Tomlinson will lead the firm's trade and customs services, emphasizing trade compliance, supply chain optimization, and tariff mitigation [4]. - Heidlberg will focus on helping clients navigate risk and compliance issues, leading investigations, and advising on remediation measures [5][6]. Company Overview - FTI Consulting is a leading global expert firm with over 8,100 employees in 33 countries, generating $3.70 billion in revenues during fiscal year 2024 [6].

Core Insights - FTI Consulting has appointed Natasha Passley as a Senior Managing Director in the Cybersecurity practice, enhancing its capabilities in addressing complex cybersecurity threats [1][3] - Ms. Passley brings over 20 years of experience in security, risk, and technology, focusing on cybersecurity maturity and regulatory compliance [2][3] - The appointment comes at a time when Australian businesses face significant regulatory changes and increased cybersecurity threats, emphasizing the need for robust cybersecurity programs [3][4] Company Overview - FTI Consulting is a global expert firm specializing in crisis and transformation, with over 8,100 employees across 33 countries as of March 31, 2025 [5] - The company generated $3.70 billion in revenues during the fiscal year 2024, indicating strong financial performance [5] Industry Context - The cybersecurity landscape is becoming increasingly complex due to geopolitical tensions and regulatory shifts, necessitating enhanced compliance standards and risk management strategies [3][4] - There is a growing emphasis on organizational resilience and the ability to maintain operations during disruptions, which is critical for businesses in the current environment [4]

Core Insights - FTI Consulting has appointed Natasha Passley as a Senior Managing Director in the Cybersecurity practice, enhancing its capabilities in addressing complex cybersecurity threats [1][3][4] Company Overview - FTI Consulting is a leading global expert firm specializing in crisis and transformation, with over 8,100 employees across 33 countries as of March 31, 2025 [5] - The company generated $3.70 billion in revenues during the fiscal year 2024 [5] Industry Context - Organizations are facing increasingly complex cybersecurity threats due to rising geopolitical tensions and regulatory changes, making robust cybersecurity programs essential [3][4] - Australia is undergoing significant reforms in cybersecurity regulations, leading to enhanced compliance standards and increased penalty risks, which present both challenges and opportunities for businesses [4]

Core Insights - FTI Consulting projects U.S. e-commerce sales to reach $1.27 trillion in 2025, marking an 8.5% increase from the previous year [1] - The online retail market share is expected to rise to 23.5% in 2025, up from 22.7% in 2024 and 21.6% in 2023, but growth is anticipated to decelerate and plateau near 30% by 2030 [2] Retail Sales Analysis - Total retail sales from 2020 to 2024 increased by $2.4 trillion above pre-COVID expectations, with 40% of this growth attributed to inflation [3] - Online retail sales during the same period were $932 billion above pre-COVID expectations, influenced by altered shopping patterns due to the COVID-19 pandemic [3] Consumer Spending Trends - Inflation-adjusted sales growth has been marginal or negative since 2023, with consumers facing challenges such as tariff concerns, a cautious job market, and geopolitical uncertainty [4] - The report indicates that consumer spending appetite is subdued for the second half of the year, despite ongoing spending increases [4] Evolution of Retail Strategies - Brands are adapting by embracing retail partnerships, moving away from solely direct-to-consumer models, as evidenced by consumer excitement around events like Amazon's Prime Day [4] - The next wave of successful retailers will be those who invest wisely and build capabilities that connect various consumer touchpoints [5]

Company Announcement - FTI Consulting, Inc. will release its financial results for the second quarter ended June 30, 2025, before the New York market opens on July 24, 2025 [1] - A conference call to discuss these financial results will take place on July 24, 2025, at 9:00 a.m. Eastern Time, hosted by senior management [1] Conference Call Details - The conference call will be simulcast live on the Internet and accessible via the Company's investor relations website [2] - A replay of the webcast will be available on the Company's investor relations website for 90 days following the call [2] Company Overview - FTI Consulting, Inc. is a leading global expert firm specializing in crisis and transformation, with over 8,100 employees across 33 countries and territories as of March 31, 2025 [3] - The Company generated $3.70 billion in revenues during the fiscal year 2024 [3]