FTI sulting(FCN) - 2024 Q4 - Annual Report

Financial Performance - Revenues for the year ended December 31, 2024, increased by $209.4 million, or 6.0$3,698.7 million compared to $3,489.2 million in 2023[199] - Net income for the year ended December 31, 2024, increased by$5.2 million, or 1.9%, to $280.1 million compared to$274.9 million in 2023[202] - Adjusted EBITDA for the year ended December 31, 2024, decreased by $21.1 million, or 5.0$403.7 million, with an Adjusted EBITDA Margin of 10.9% compared to 12.2% in 2023[203] - Earnings per diluted share for the year ended December 31, 2024, increased by $0.10 to$7.81, while Adjusted EPS increased by $0.28 to$7.99[204] - Total revenues for the year ended December 31, 2024, increased to $3,698.7 million, up 6.0$3,489.2 million in 2023[211] - Net income for 2024 was $280.1 million, a slight increase of 1.0$274.9 million in 2023[211] - Adjusted EBITDA for 2024 decreased to $403.7 million, down 4.9$424.8 million in 2023[212] Cash Flow and Expenses - Net cash provided by operating activities for the year ended December 31, 2024, increased by $170.6 million to$395.1 million compared to $224.5 million in 2023[205] - Free Cash Flow for the year ended December 31, 2024, was$360.2 million, up from $174.9 million in 2023[206] - Unallocated corporate expenses rose by$22.2 million, or 17.7%, to 147.6 million, primarily due to investments in AI capabilities and higher compensation expenses[217] - SG&A expenses increased by 4.8 million, or 6.7%, to $76.4 million, representing 22.7$63.7 million, or 86.2%, to $10.2 million, primarily due to reduced capital expenditures[256] - Net cash used in financing activities decreased by$339.3 million, or 95.7%, to $15.4 million, reflecting the repayment of$315.8 million in Convertible Notes in 2023[257] Employee and Headcount - The total number of employees increased by 4.8% to 8,374 in 2024 from 7,990 in 2023[199] - The total headcount increased by 384, or 4.8%, from 7,990 as of December 31, 2023, to 8,374 as of December 31, 2024[209] - The company expects to record a special charge of approximately $17 million in Q1 2025 due to targeted headcount reductions[208] Segment Performance - Revenues for the Corporate Finance segment increased by$44.5 million, or 3.3%, to $1,391.2 million for the year ended December 31, 2024[227] - Gross profit for the Corporate Finance segment increased by$21.8 million, or 5.0%, to $453.8 million, with a gross profit margin of 32.6$36.1 million, or 5.5%, to $690.2 million, with acquisition-related revenues contributing$6.8 million[231] - Gross profit for the Forensic and Litigation Consulting segment increased by $8.4 million, or 3.9$225.2 million, with a gross profit margin of 32.6%[232] - Revenues for the Economic Consulting segment increased by $92.2 million, or 12.0$863.6 million, driven by higher demand for M&A-related services[235] - Gross profit for the Economic Consulting segment increased by $16.5 million, or 7.5$235.1 million, with a gross profit margin of 27.2%[236] - Revenues for the Technology segment increased by $29.8 million, or 7.7$417.6 million, primarily due to higher demand for M&A-related services[240] Interest and Taxation - Interest income increased by $15.2 million to a gain of$10.4 million in 2024, compared to a loss of $4.9 million in 2023[218] - Interest expense decreased by$7.4 million, or 51.5%, to $7.0 million in 2024, down from$14.3 million in 2023[220] - The effective tax rate decreased to 20.2% in 2024 from 23.3% in 2023, contributing to a $12.8 million reduction in the income tax provision[221] Shareholder Actions - The company repurchased 51,717 shares at an average price of$197.53, totaling $10.2 million, with$450.4 million remaining under the Repurchase Program as of December 31, 2024[207] - The company repurchased $10.2 million in common stock during 2024, with$450.4 million remaining under the Repurchase Program[264] Market Risks and Foreign Exchange - The company is exposed to market risk primarily from changes in interest rates and foreign exchange rates[281] - The largest foreign exchange exposure relates to unsettled intercompany payables and receivables, which are regularly reviewed[283] - The total unrealized changes in net investments of foreign subsidiaries for the year ended December 31, 2024 amounted to a loss of $26.112 million, compared to a gain of$26.262 million in 2023[285] - The unfavorable impact of exchange rate changes on cash and cash equivalents was $12.3 million for 2024, compared to a favorable impact of$15.6 million in 2023[258] Impairment and Valuation - The company performed annual impairment tests for each reporting unit in 2024, indicating no impairment existed[279] - No impairment charges for intangible assets were recorded in 2024[280] - The company evaluates goodwill and indefinite-lived intangible assets for impairment annually, considering macroeconomic conditions and overall financial performance[277] - The cash flows used in the income approach for impairment evaluation are based on recent forecasts and budgets, discounted using a weighted average cost of capital[278]