FTI sulting(FCN) - 2025 Q1 - Quarterly Report

Financial Performance - Revenues for Q1 2025 decreased by $30.3 million, or 3.3$898.3 million compared to Q1 2024[76] - Net income for Q1 2025 decreased by $18.1 million, or 22.7$61.8 million compared to Q1 2024[80] - Adjusted EBITDA for Q1 2025 increased by $4.1 million, or 3.7$115.2 million, with an Adjusted EBITDA Margin of 12.8%[81] - Total revenues for the three months ended March 31, 2025, were $898,282,000, a decrease of 3.2$928,553,000 in the same period of 2024[86] - Net income for the three months ended March 31, 2025, was $61,824,000, down 22.7$79,965,000 in the prior year[86] - Adjusted EBITDA for the three months ended March 31, 2025, increased to $115,164,000, compared to$111,073,000 in 2024, reflecting a growth of 3.5%[87] Cash Flow and Expenses - Free Cash Flow was an outflow of $483.0 million in Q1 2025, compared to an outflow of$279.5 million in Q1 2024[84] - Net cash used in operating activities increased by $190.4 million, or 69.3$465.2 million in Q1 2025[83] - The company reported a net cash used in operating activities of $465,210,000 for the three months ended March 31, 2025, compared to$274,818,000 in 2024[89] - Unallocated corporate expenses decreased by $19.8 million, or 50.0$19.8 million for the three months ended March 31, 2025, primarily due to a legal settlement gain[91] - Net cash used in investing activities was $17.8 million, a decrease of$38.4 million compared to net cash provided by investing activities of $20.6 million in the prior year[131] - Net cash used in financing activities increased by$230.9 million to $32.3 million, primarily due to$182.6 million in common stock repurchases[132] Segment Performance - The decrease in revenues was primarily due to lower performance in the Economic Consulting and Corporate Finance segments[77] - Revenues for the Corporate Finance segment decreased by $22.4 million, or 6.1$343.6 million, primarily due to lower demand and realized bill rates for transformation & strategy and restructuring services[102] - Gross profit for the Corporate Finance segment decreased by $15.7 million, or 12.3$14.5 million, or 8.3%, to 190.6 million, driven by higher realized bill rates and increased demand for data & analytics services[106] - Gross profit for the Forensic and Litigation Consulting segment increased by 9.0 million, or 14.1%, with a gross profit margin of 38.1%[107] - Revenues for the Economic Consulting segment decreased by $24.7 million, or 12.1$179.9 million, primarily due to lower demand for M&A-related services[110] - Gross profit for the Economic Consulting segment decreased by $3.7 million, or 8.2$3.6 million, or 3.5%, to 97.2 million, primarily due to lower demand for M&A-related services[114] - Gross profit for the Technology segment decreased by 3.7 million, or 10.2%, with a gross profit margin decline of 2.5 percentage points to 33.9%[115] Employee Metrics - The total number of employees increased to 8,105 in Q1 2025 from 8,055 in Q1 2024[76] - The company experienced a net reduction in headcount of 269, or 3.2%, from December 31, 2024, to March 31, 2025[85] - The total number of billable professionals increased to 6,395, up from 6,366, reflecting a 0.5% increase year-over-year[1] - The number of billable professionals decreased by 4.5% to 937 compared to 981 in the prior year[118] Financial Obligations and Risks - Future contractual obligations include long-term obligations of $160.0 million related to outstanding borrowings under the Credit Facility as of March 31, 2025[141] - Current obligations under operating leases amount to$33.8 million, with non-current obligations totaling $201.2 million[141] - The company was contingently liable under bank guarantees totaling$13.1 million as of March 31, 2025, up from $10.9 million as of December 31, 2024[143] - Available amounts under guarantee facilities were$33.7 million as of March 31, 2025, compared to $31.8 million as of December 31, 2024[143] - Key risks include changes in demand for services, ability to recruit qualified professionals, and competition for clients and key personnel[146] - The company has no material changes in market risk exposure during the period covered by the report[148] - Future events could cause actual payments to differ from projected amounts due to various assumptions including interest rates[142] Forward-Looking Statements - The company emphasizes that forward-looking statements involve uncertainties and risks that could cause actual results to differ materially[144] - The company does not intend to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances[147] - The company has guaranteed facilities totaling$46.8 million as of March 31, 2025[143] - The company anticipates additional capital expenditures of between $50 million and$60 million for the remainder of 2025, including costs related to new office space[138] - During the three months ended March 31, 2025, the company made $182.6 million in payments for common stock repurchases, with$264.3 million remaining available under the Repurchase Program[140]