Financial Data and Key Metrics Changes - Total revenues in Q2 2025 increased by 1% to $142 million, while net revenues were approximately flat at $132.9 million compared to the same period in 2024 [11] - Net income decreased to $26.6 million or $0.52 per diluted share, down from $29.2 million or $0.57 per diluted share in the prior year [11] - EBITDA decreased by 7% to $37 million, with a margin of 27.8% of net revenues, compared to $39.9 million or 30.2% in the same period in 2024 [12] - Utilization in Q2 was 72.1%, down from 75.1% in the same period of 2024 [13] Business Line Data and Key Metrics Changes - The engineering and other scientific segment represented 85% of net revenues, with a 1% increase driven by demand in construction, automotive, and medical device sectors [15] - The Environmental and Health segment, representing 15% of net revenues, saw a 4% decrease due to lower activity in proactive projects in life sciences and chemical regulation services [16] Market Data and Key Metrics Changes - Demand for failure analysis expertise drove growth in dispute-related activities, particularly in construction, automotive, and medical device sectors [4] - Proactive engagements in the utilities sector were strong, while there was softer demand for chemical regulatory work [5] Company Strategy and Development Direction - The company is focused on capitalizing on market drivers at the intersection of safety, health, and the environment, with a strong emphasis on recruiting top-tier talent [8] - Engagements in transformative innovations, including distributed energy systems and AI applications, are seen as significant long-term growth opportunities [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate complex challenges and capitalize on growth drivers, particularly in safety-critical systems and advanced technologies [23] - The company expects revenues before reimbursements to grow in the low single digits for the full year 2025, with EBITDA margins projected between 26.5% and 27% [17] Other Important Information - The company is experiencing a return to headcount growth, with expectations of a 1% to 2% increase in technical full-time equivalent employees for Q3 2025 [18] - Capital expenditures for the full year 2025 are expected to be between $10 million and $12 million [21] Q&A Session Summary Question: How did the utilization play out in the quarter? - Management indicated that the decline in utilization was partly due to the July 4 holiday and a step down from strong utilization last year [26][27] Question: Can you discuss trends related to easing tariff uncertainty? - Management noted that clients are cautious due to tariff uncertainties, which has caused some delays in engagements, particularly in the chemical sector [28][30] Question: What are the growth rates in proactive and reactive sides of the business? - Growth rates were similar in both proactive and reactive sides, with litigation-related work growing 7% year over year [45][46] Question: How has the regulatory environment impacted demand? - Management acknowledged some delays due to the EPA's movement but stated that most work continues and clients are committed to their global product strategies [47][50]