FTI sulting(US:FCN)2026-02-26 12:30Financial Performance - Revenues for the year ended December 31, 2025 increased by $90.2 million, or 2.4%, to $3,788.9 million compared to $3,698.7 million in 2024[196] - Net income for the year ended December 31, 2025 decreased by $9.2 million, or 3.3%, to $270.9 million compared to $280.1 million in 2024[199] - Adjusted EBITDA for the year ended December 31, 2025 increased by $59.9 million, or 14.8%, to $463.6 million, with an Adjusted EBITDA Margin of 12.2% compared to 10.9% in 2024[200] - EPS for the year ended December 31, 2025 increased by $0.43 to $8.24 compared to $7.81 in 2024[201] - Adjusted EPS for the year ended December 31, 2025 increased by $0.84 to $8.83 compared to $7.99 in 2024[202] - Total revenues increased to $3,788.9 million in 2025, up from $3,698.7 million in 2024, representing a growth of 2.4%[208] - Adjusted EBITDA for 2025 was $463.6 million, compared to $403.7 million in 2024, reflecting a growth of 14.8%[209] - Net income for 2025 was $270.9 million, a slight decrease from $280.1 million in 2024, resulting in a diluted EPS of $8.24[208][211] Cash Flow and Expenses - Net cash provided by operating activities for the year ended December 31, 2025 decreased by $243.0 million to $152.1 million compared to $395.1 million in 2024[203] - Free Cash Flow decreased to $93.6 million in 2025 from $360.2 million in 2024, primarily due to lower net cash from operating activities and higher capital expenditures[204] - Unallocated corporate expenses decreased by $19.8 million, or 13.4%, to $127.8 million in 2025 compared to $147.6 million in 2024[214] - Interest expense increased significantly by $14.4 million, or 207.8%, to $21.4 million in 2025 due to higher borrowings[217] - The income tax provision rose by $29.5 million, or 41.7%, to $100.1 million in 2025, with an effective tax rate of 27.0%[218] - Net cash provided by operating activities decreased by $243.0 million to $152.1 million, primarily due to higher compensation and tax payments[254] - Net cash used in investing activities increased to $58.5 million, driven by a $23.1 million rise in capital expenditures[255] - Net cash used in financing activities surged to $510.5 million, largely due to $858.7 million in common stock repurchases[256] Segment Performance - The increase in revenues was driven by higher performance in the Corporate Finance, FLC, and Strategic Communications segments, partially offset by lower revenues in the Economic Consulting and Technology segments[197] - Corporate Finance segment revenue rose to $1,550.97 million in 2025, a 11.5% increase from $1,391.21 million in 2024[208] - Revenues for the Corporate Finance segment increased by $159.8 million, or 11.5%, to $1,550.97 million for the year ended December 31, 2025, driven by higher demand for turnaround & restructuring and transactions services[225] - Revenues for the Forensic and Litigation Consulting segment increased by $74.5 million, or 10.8%, to $764.7 million, primarily due to higher realized bill rates[229] - Revenues for the Economic Consulting segment decreased by $142.7 million, or 16.5%, to $720.8 million, with a 1.2% estimated positive impact from FX[234] - Revenues for the Technology segment decreased by $43.8 million, or 10.5%, to $373.9 million, primarily due to lower demand for M&A-related services[238] Employee and Operational Metrics - The total number of employees decreased by 3.1% to 8,118 in 2025 from 8,374 in 2024[196] - The number of billable professionals in the Corporate Finance segment increased by 0.5% to 2,297, with a utilization rate of 60%[224] - The number of billable professionals in the Technology segment decreased by 7.3% to 662, with a gross profit margin of 33.1%[237] - Days sales outstanding (DSO) improved to 88 days at December 31, 2025, down from 97 days at December 31, 2024[203] Shareholder Actions - The company repurchased 5,264,916 shares at an average price of $163.07, totaling $858.6 million, with $491.8 million remaining under the Repurchase Program as of December 31, 2025[205] Financial Position and Future Outlook - As of December 31, 2025, the company had $265.1 million in cash and cash equivalents and $535.0 million available under its Credit Facility[258] - The company anticipates capital expenditures between $48 million and $58 million for 2026[262] - The company entered into a lease agreement for new office space in London, with fixed rental payments expected to total approximately $115.0 million starting in February 2028[267] - The company had $365.0 million of outstanding borrowings under its Credit Facility as of December 31, 2025, with a weighted average interest rate of 5.81% during the twelve months ended December 31, 2025[285] Accounting and Valuation - The company performed its annual impairment tests for goodwill in 2025, indicating no impairment existed for any reporting units[278] - No impairment charges for intangible assets were recorded in 2025[279] - The company assesses its deferred tax assets and has recorded valuation allowances due to a lack of objective evidence supporting realization of these assets[282] - Revenue recognition is primarily based on three arrangements: time and expense, fixed-fee, and performance-based[271] - The company utilizes a proportional performance method for estimating revenues in fixed-fee arrangements[273] - The company continuously monitors its estimates related to revenues and goodwill, which may materially impact its results of operations[275] Foreign Exchange and Investments - The company recorded a total unrealized change in net investments of foreign subsidiaries amounting to $46.968 million for the year ended December 31, 2025, compared to a loss of $26.112 million in 2024[288] - The company’s foreign exchange exposure primarily relates to intercompany receivables and payables, with significant exposure to currencies such as Euro, Australian dollar, British pound, and Canadian dollar[286] - A hypothetical 100 basis point increase in interest rate for the year ended December 31, 2025, would have a $3.3 million effect on interest expense[285]