Exponent(US:EXPO)2025-11-07 21:00Financial Performance - Revenues for Q3 2025 increased 8% to $147,120,000 compared to $136,279,000 in Q3 2024[81] - Net income rose 8% to $28,044,000 in Q3 2025, with diluted earnings per share increasing to $0.55 from $0.50[82] - Total revenues for the nine months ended October 3, 2025, increased by 3.0% to $434,589,000 compared to $421,748,000 for the same period in 2024[96] - For the three months ended October 3, 2025, revenues before reimbursements were $137,073,000, compared to $125,085,000 for the same period in 2024, representing a year-over-year increase of 9.6%[117] - Net income for the three months ended October 3, 2025, was $28,044,000, compared to $26,044,000 for the same period in 2024, reflecting a year-over-year increase of 7.7%[119] Segment Performance - Engineering and Other Scientific segment revenues increased by 7.6% to $124,016,000, driven by higher billable hours and billing rates[85] - Environmental and Health segment revenues increased by 9.8% to $23,104,000, attributed to increased regulatory consulting engagements[86] - Billable hours in the Engineering and Other Scientific segment decreased by 2% to 896,000, while utilization decreased to 75%[96] - Revenues in the Environmental and Health segment increased by 1.4% to $67,459,000, despite a 4% decrease in billable hours to 215,000[97] Expenses - Compensation and related expenses rose 7% to $87,726,000, accounting for 59.6% of total revenues[87] - Other operating expenses increased by 5.7% to $12,655,000, representing 8.6% of total revenues[89] - General and administrative expenses surged 44.2% to $7,654,000, primarily due to increased travel and personnel expenses[91] - Compensation and related expenses rose by 3.7% to $261,103,000, representing 60.1% of total revenues[98] - Other operating expenses increased by 9.3% to $36,822,000, accounting for 8.5% of total revenues[99] Operating Income - Total operating income increased by 12.3% to $29,038,000, with segment operating income for Engineering and Other Scientific rising by 13.7%[92] - Operating income for the total segments increased by 1.5% to $158,030,000, while total operating income decreased by 1.8% to $90,647,000[103] Tax and Other Income - Income tax expense increased by 6.9% to $10,573,000, with an effective tax rate of 27.4%[95] - Other income, net, decreased by 5.0% to $22,545,000, primarily due to a decrease in rental income[106] - Income taxes increased by 4.3% to $31,945,000, with an effective tax rate of 28.2%[107] Cash Flow and Assets - Net cash provided by operating activities was $76,148,000, down from $88,485,000 in the prior year[109] - Cash and cash equivalents as of October 3, 2025, were $207,380,000, a decrease from $258,901,000 at January 3, 2025[109] EBITDA - EBITDA for the three months ended October 3, 2025, was $38,837,000, which is 28.3% of revenues before reimbursements, a slight decrease from 28.6% in the same period last year[117] - For the nine months ended October 3, 2025, EBITDA was $113,366,000, down from $115,825,000 in the same period in 2024, indicating a decrease of 2.1%[119] - The company reported a decrease in EBITDA as a percentage of revenues for the first nine months of 2025, primarily due to increased travel and meals expenses related to a company-wide managers' meeting[118] Foreign Currency Risk - The company has foreign currency risk related to revenues and expenses in currencies such as the British Pound, Euro, Chinese Yuan, and Hong Kong Dollar, which may negatively affect financial results[121] - As of October 3, 2025, the company had net assets of approximately $13.8 million in British Pounds and $5.8 million in Hong Kong Dollars, among other currencies[122] - The company does not use foreign exchange contracts to hedge foreign currency exposures, which may lead to fluctuations in net income due to exchange rate changes[124] Interest Rate Risk Management - The company maintains an investment portfolio primarily consisting of high-quality debt instruments to manage interest rate risk, with a maximum effective maturity of 3 years[120]