FTI sulting(US:FCN)2024-04-25 11:30Financial Performance - Revenues for Q1 2024 increased by $121.8 million, or 15.1%, to $928.6 million compared to Q1 2023, driven by increased demand across all business segments and higher realized bill rates [86]. - Net income for Q1 2024 rose by $32.4 million, or 68.2%, to $80.0 million compared to Q1 2023, attributed to higher revenues and a lower effective tax rate [87]. - Adjusted EBITDA for Q1 2024 increased by $32.6 million, or 41.6%, to $111.1 million, with an Adjusted EBITDA Margin of 12.0% compared to 9.7% in Q1 2023 [88]. - Earnings per diluted share (EPS) for Q1 2024 increased by $0.89 to $2.23 compared to $1.34 in Q1 2023, primarily due to higher net income [89]. - Total revenues for the three months ended March 31, 2024, increased by $121.8 million, or 15.1%, to $928.6 million compared to $806.7 million for the same period in 2023 [96]. - Net income for the three months ended March 31, 2024, was $79.965 million, representing an increase of $32.418 million, or 68.2%, from $47.547 million in the prior year [96]. - Adjusted EBITDA for the three months ended March 31, 2024, was $111.073 million, up $32.646 million, or 41.6%, from $78.427 million in the same period of 2023 [97]. Cash Flow and Operating Activities - Net cash used in operating activities for Q1 2024 increased by $20.6 million to $274.8 million compared to $254.2 million in Q1 2023, mainly due to higher salaries and annual bonus payments [91]. - Free Cash Flow was an outflow of $279.5 million in Q1 2024 compared to $272.2 million in Q1 2023, primarily due to higher net cash used in operating activities [92]. - Net cash used in operating activities increased by $20.6 million, or 8.1%, to $274.8 million for the three months ended March 31, 2024, compared to $254.2 million for the same period in 2023 [141]. - Net cash provided by investing activities was $20.6 million for the three months ended March 31, 2024, a significant increase of $38.6 million, or 214.4%, from a net cash used of $18.0 million in the same period of 2023 [142][143]. - Net cash provided by financing activities surged to $198.6 million for the three months ended March 31, 2024, an increase of $182.8 million, or 1,159.5%, compared to $15.8 million in the prior year [144]. Employee and Workforce Metrics - Total number of employees increased to 8,055 in Q1 2024 from 7,794 in Q1 2023, reflecting a growth in workforce [85]. - The number of revenue-generating professionals increased to 6,366 as of March 31, 2024, a rise of 3.1% from 6,186 in the prior year [110]. - The number of revenue-generating professionals increased across segments, with a total of 1,463 professionals in one segment, reflecting a 2.5% increase year-over-year [1]. Segment Performance - Corporate Finance segment revenues increased by $50.4 million, or 16.0%, to $366.0 million for the three months ended March 31, 2024 [113]. - FLC segment revenues rose by $18.3 million, or 11.6%, to $176.1 million for the three months ended March 31, 2024 [117]. - Revenues for the Technology segment increased by $10.1 million, or 11.1%, to $100.7 million, primarily due to higher demand for M&A-related services [125]. - Revenues for the Strategic Communications segment increased by $8.1 million, or 11.1%, to $81.2 million, with a 1.4% positive impact from foreign exchange [130]. Expenses and Profitability - Unallocated corporate expenses increased by $4.8 million, or 13.8%, to $39.5 million for the three months ended March 31, 2024 [101]. - Interest expense decreased by $1.2 million, or 41.5%, to $1.7 million for the three months ended March 31, 2024, compared to $2.9 million in the prior year [104]. - The income tax provision increased by $4.6 million, or 30.4%, to $19.5 million for the three months ended March 31, 2024, with an effective tax rate of 19.6% [105]. - SG&A expenses rose by $7.2 million, or 28.7%, to $32.2 million, representing 15.8% of revenues for the three months ended March 31, 2024 [123]. - SG&A expenses in the Technology segment increased by $1.0 million, or 3.9%, to $25.7 million, accounting for 25.5% of revenues [127]. - SG&A expenses in the Strategic Communications segment rose by $1.2 million, or 7.2%, to $17.7 million, representing 21.8% of revenues [132]. Cash and Capital Management - As of March 31, 2024, the company had $244.0 million in cash and cash equivalents and an available borrowing capacity of $695.0 million under its $900.0 million revolving line of credit [146]. - Future capital expenditures for 2024 are expected to range between $28 million and $34 million, excluding potential acquisitions [150]. - The company anticipates long-term obligations of $205.0 million related to outstanding borrowings under its Credit Facility as of March 31, 2024 [151]. - The company plans to use future capital primarily for operating expenses, capital expenditures, and potential acquisitions [149]. - The company remains in compliance with the covenants of its Credit Facility as of March 31, 2024 [148]. Operational Efficiency - Days sales outstanding (DSO) increased to 105 days in Q1 2024 from 102 days in Q1 2023, indicating cash collections did not keep pace with higher revenues [91]. - Days Sales Outstanding (DSO) increased to 105 days as of March 31, 2024, compared to 102 days in the same period of 2023 [141]. - The increase in net income was partially offset by higher direct compensation expenses and increased selling, general and administrative expenses [87]. - The company reported a 5.0% increase in non-billable headcount, contributing to higher compensation costs [87].