FTI sulting(US:FCN)2025-10-23 11:30Financial Performance - Revenues for Q3 2025 increased by $30.1 million, or 3.3%, compared to Q3 2024, with a 1.1% positive impact from foreign exchange (FX) [82] - Net income for Q3 2025 rose by $16.4 million, or 24.6%, compared to Q3 2024, driven by higher revenues and lower selling, general and administrative (SG&A) expenses [83] - Adjusted EBITDA for Q3 2025 increased by $27.6 million, or 26.8%, with an Adjusted EBITDA Margin of 13.7% compared to 11.1% in Q3 2024 [84] - EPS for Q3 2025 increased by $0.75 to $2.60 compared to $1.85 in Q3 2024, attributed to higher net income and a decrease in diluted weighted average shares outstanding [85] - Total revenues for Q3 2025 reached $956.2 million, a 3.1% increase from $926.0 million in Q3 2024 [91] - Net income for Q3 2025 was $82.8 million, up 24.6% from $66.5 million in Q3 2024 [91] - Adjusted EPS for Q3 2025 was $2.60, compared to $1.85 in Q3 2024, reflecting a 40.5% increase [92] - Total revenues for the nine months ended September 30, 2025, were $2,798.1 million, slightly down from $2,803.7 million in the same period of 2024 [81] - Net income for the nine months ended September 30, 2025, was $216,340,000, compared to $230,378,000 for the same period in 2024, reflecting a decrease of 6.1% [106] Cash Flow and Expenses - Net cash provided by operating activities for Q3 2025 decreased by $17.5 million, or 8.0%, to $201.9 million compared to $219.4 million in Q3 2024 [86] - Free Cash Flow for Q3 2025 was $187.0 million, down from $212.3 million in Q3 2024, primarily due to lower net cash provided by operating activities [87] - Unallocated corporate expenses decreased by $4.3 million, or 10.8%, to $35.1 million in Q3 2025 [95] - Interest expense increased by $6.4 million, or 533.3%, to $7.6 million in Q3 2025 due to higher borrowings [98] - Income tax provision for Q3 2025 increased by $6.6 million, or 29.5%, to $28.9 million compared to Q3 2024 [99] - Net cash used in operating activities was $207.6 million for the nine months ended September 30, 2025, compared to net cash provided of $79.8 million in the prior year [156] - Net cash used in investing activities was $50.1 million, primarily due to a $28.4 million increase in capital expenditures [157] - Net cash used in financing activities was $277.3 million, mainly due to $770.9 million in common stock repurchases [158] Segment Performance - Corporate Finance segment revenues increased to $404.9 million in Q3 2025, up 18.6% from $341.5 million in Q3 2024 [91] - Economic Consulting segment reported a revenue decline of 22.0% to $173.1 million in Q3 2025 from $222.0 million in Q3 2024 [91] - Revenues for the forensic and litigation consulting segment increased by $25.9 million, or 15.4%, to $194.7 million for the three months ended September 30, 2025 [117] - Revenues for the Technology segment for the three months ended September 30, 2025, decreased by $16.3 million, or 14.8%, to $94.1 million, with a 1.0% positive impact from FX [132] Employee Metrics - The total number of employees as of September 30, 2025, was 8,167, a decrease from 8,382 in the previous year [81] - The number of billable professionals at the end of Q3 2025 was 6,457, a decrease from 6,659 in Q3 2024, indicating a reduction of 3.0% [107] - Total headcount as of September 30, 2025 was 8,167, a decrease of 2.5% from 8,374 on December 31, 2024 [90] Special Charges and Obligations - Special charges for the nine months ended September 30, 2025, amounted to $25.3 million, with no special charges reported in the same period of 2024 [81] - Future contractual obligations include long-term obligations of $510.0 million related to outstanding borrowings under the Credit Facility, with current obligations of $33.4 million and non-current obligations of $226.0 million under operating leases as of September 30, 2025 [168] - The company is contingently liable under bank guarantees totaling $19.1 million as of September 30, 2025, primarily supporting bid and performance obligations [170] Capital Expenditures and Future Outlook - Capital expenditures for the nine months ended September 30, 2025, amounted to $50.1 million, with an expected additional $13 million to $15 million for the remainder of 2025 [165] - The company anticipates that future capital requirements will be influenced by staffing levels, technology needs, and potential acquisitions [165] - Forward-looking statements indicate that actual financial results may differ materially from projections due to various risks and uncertainties, including changes in demand for services and competition for clients [171] - The company has identified potential risks related to the adoption of technological innovations such as AI and machine learning, which could impact business operations [173] Profitability Metrics - Total Adjusted Segment EBITDA for Q3 2025 was $165,020,000, an increase from $141,743,000 in Q3 2024, representing a growth of 16.5% [106] - Operating income for Q3 2025 was $117,670,000, up from $90,892,000 in Q3 2024, reflecting a growth of 29.5% [106] - Gross profit rose by $42.0 million, or 38.4%, to $151.6 million for the same period, with a gross profit margin increase of 5.4 percentage points [111] - SG&A expenses increased by $3.9 million, or 7.2%, to $58.2 million, representing 14.4% of revenues, down from 15.9% in the prior year [112]