Core Insights - FTI Consulting has appointed Scott Cockerham as Senior Managing Director in the Corporate Finance & Restructuring segment, focusing on the Power, Renewables & Energy Transition practice in Houston [1][2] Company Overview - FTI Consulting is a global expert firm specializing in crisis and transformation, with over 8,100 employees across 33 countries as of March 31, 2025 [4] - The company generated $3.70 billion in revenues during fiscal year 2024 [4] Leadership and Expertise - Scott Cockerham brings over 20 years of experience in business transformation, turnarounds, and restructurings, having held various leadership roles including CEO and CFO [2][3] - Cockerham's previous role was as Chief Financial Officer at Camin Cargo Control, and he co-led the restructuring energy team at a global consulting firm [3] Industry Context - The energy sector is facing unprecedented uncertainty due to macroeconomic trends and policy shifts, impacting business plans [3] - FTI Consulting aims to leverage Cockerham's expertise to assist clients in navigating challenges and creating value in the dynamic energy landscape [3][4]

Financial Data and Key Metrics Changes - The company's first quarter revenues declined by 1.4% year over year to $487.6 million, which is within the guidance range [17] - Adjusted EBITDA margin on total revenues expanded by 10 basis points to 11.3%, reflecting careful cost management [6][21] - Non-GAAP EPS increased by 9.6% year over year to $1.90, significantly outpacing revenue performance [22] Business Line Data and Key Metrics Changes - Revenues from commercial clients increased by 22.1% year over year, accounting for 29.5% of total revenues, up from 23.9% in the previous year [6][18] - Revenues from commercial energy clients rose by 21%, driven by strong demand for energy efficiency programs [5][7] - Revenues from state and local government clients remained stable year on year, with disaster management revenues experiencing lower pass-through revenues [11][12] - International government client revenues increased by 7.2% in the first quarter, aided by new task orders from the European Union and UK government [12][13] Market Data and Key Metrics Changes - The company reported that revenues from commercial, state and local, and international government clients collectively accounted for 51% of first quarter revenues, up from approximately 45% a year ago [5][18] - Federal client revenues declined by 12.6% year over year, impacted by contract funding curtailments and a slower pace of new RFPs [13][15] Company Strategy and Development Direction - The company aims to maintain adjusted EBITDA margins comparable to 2024 levels while navigating a dynamic federal government business environment [15][30] - The focus remains on capturing growth opportunities in commercial energy, state and local, and international government sectors, with expectations of at least 15% growth in these areas for the full year [29] - The company is also exploring strategic acquisitions, particularly in the energy sector, while remaining cautious in the federal arena due to uncertainty [74] Management's Comments on Operating Environment and Future Outlook - Management indicated that the federal business environment remains fluid and unsettled, with expectations of continued activity but not significantly more impactful than the first quarter [33] - The company reaffirmed its revenue guidance for 2025, projecting a decline of flat to 10% from last year, primarily due to federal government revenue losses [15][29] - Management expressed confidence in the growth prospects for the commercial energy business, citing increased budgets from utility clients for energy efficiency programs [10][16] Other Important Information - The backlog at the end of the first quarter was $3.4 billion, with $1.9 billion funded, indicating stability in the business [23] - The company repurchased 313,000 shares for a total of $35 million during the first quarter, demonstrating confidence in its long-term outlook [25][26] Q&A Session Summary Question: Guidance on the impact of federal government changes - Management expects Q2 and Q3 to have similar impacts as Q1, with no significant increase in federal activity [33] Question: Update on stop work orders - The figure for stop work orders has increased to approximately $375 million [34] Question: Contribution of Applied Energy Group to revenues - Specific revenue figures for Applied Energy Group were not disclosed, but integration and performance have been positive [36][37] Question: Outlook for IT modernization business - The IT modernization business is expected to decline by 5% to 10% due to delays in awards, with no significant cuts observed yet [41][42] Question: Growth outlook for disaster recovery business - The disaster recovery business is expected to grow, supported by a robust pipeline of opportunities [60] Question: Potential for acquisitions - Future acquisitions are likely to focus on the energy sector, with smaller tuck-in acquisitions being more probable [74][76]

Financial Data and Key Metrics Changes - The overall performance for the first quarter showed a revenue increase of 70% from $494 million to $838 million, primarily due to the acquisition of Markham [13] - Adjusted EBITDA doubled from $119 million to $238 million, reflecting strong margin and scale attributes [14] - Adjusted diluted EPS increased approximately 40% from $1.63 to $2.29 per share [15] Business Line Data and Key Metrics Changes - The Financial Services segment's revenue was $714 million, up $341 million or approximately 92%, with adjusted EBITDA doubling to $230 million [16] - The Benefits and Insurance segment delivered revenue of $113 million, up $5 million or approximately 4%, with adjusted EBITDA increasing by 10% to $30 million [17] Market Data and Key Metrics Changes - Non-recurring services now represent approximately 23% of total revenue, with anticipated softness due to economic conditions [19] - The government healthcare consulting business showed strong revenue growth and a robust pipeline of new projects [8] Company Strategy and Development Direction - The company is focused on integrating technology systems post-acquisition to enhance operational improvements and streamline processes [23] - There is an ongoing evaluation of M&A opportunities to build geographic presence and strengthen service lines [25] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the challenging economic environment but expressed confidence in the business model's resilience [6] - The company maintained its adjusted EBITDA and adjusted EPS guidance, while widening revenue guidance to $2.8 billion to $2.95 billion due to uncertainties [19] Other Important Information - The company expects approximately $60 million in payments related to prior acquisitions in 2025, with $30 million already paid in Q1 [19] - Total debt at the end of the quarter was approximately $1.5 billion, with a leverage ratio of about four times [18] Q&A Session Summary Question: Concerns about capital markets and revenue guidance - Management indicated that capital markets are a significant concern, with reliance on deal flow affecting revenue [37][40] Question: Outlook for government healthcare consulting - Management expects continued strong performance in government healthcare consulting, with a positive outlook for the remainder of the year [42] Question: Breakdown of integration costs - Management provided insights into integration costs, estimating $75 million for 2025, with significant IT-related costs extending into 2026 [44] Question: Conditions for revised revenue guidance - Management clarified that the revised revenue guidance reflects a pragmatic assessment of current economic conditions and historical performance during similar downturns [49][51] Question: Operational adjustments to maintain earnings guidance - Management highlighted various levers to protect earnings, including adjustments in compensation and discretionary spending [58][60] Question: Capital allocation priorities - Management emphasized a focus on reducing leverage while remaining opportunistic for strategic acquisitions and share repurchases [64][65] Question: Client conflicts and their impact on guidance - Management acknowledged client conflicts as expected during the integration process, with most impacts now behind them [70][72]

Financial Data and Key Metrics Changes - The company reported second quarter revenue of $59.6 million, slightly below the $61.3 million achieved in Q2 last year, primarily due to government-related cancellations [44] - Adjusted EBITDA for the quarter was $2.1 million, landing at the top end of expectations despite government disruptions [44] - Revenue guidance for the year has been adjusted to between $275 and $285 million, reflecting a decrease of $7 million or 2.5% lower than last year [21][53] Business Line Data and Key Metrics Changes - The education business saw a revenue growth of 3% in the second quarter and is up 7% year-to-date, with invoiced amounts up 13% [40] - Advanced bookings for new services in the U.S. and Canada, excluding government, increased by 5% year-to-date compared to the same period last year [48] - The percentage of subscription revenue under multiyear contracts was 61%, indicating strong client retention [26][46] Market Data and Key Metrics Changes - Approximately 6% or $17 million of total business is tied to governmental entities, with $5 million in government revenue already canceled or postponed [13] - International revenues are expected to decline by as much as $4 million due to government actions and trade tensions, particularly affecting operations in China [14][15] - The company anticipates a potential $3 million impact on education revenue due to uncertainties surrounding the Department of Education [16][18] Company Strategy and Development Direction - The company is focused on a go-to-market transformation aimed at accelerating revenue growth from single-digit to double-digit growth in the coming years [19] - Investments of $16 million are being made to support this transformation, with a commitment to not cut back on these growth investments despite current challenges [22][82] - The strategic strength of the business model is evident, with a focus on helping organizations address mission-critical challenges [24] Management's Comments on Operating Environment and Future Outlook - The external economic environment is described as turbulent and uncertain, impacting revenue growth but not the overall business model [8][11] - Management remains confident in the actions taken to accelerate future revenue growth and expects significant growth in adjusted EBITDA and cash flow [9][21] - The company is monitoring potential impacts from government actions and is taking steps to reduce costs in affected areas [22][70] Other Important Information - The company has over $100 million in liquidity and has invested approximately $105 million to repurchase shares since 2022 [51] - The guidance for the third quarter is set at revenue between $67 and $71 million, with adjusted EBITDA between $4 million and $6.5 million [53] Q&A Session Summary Question: Impact of government actions on revenue - Management confirmed that the $17 million in government-related revenue is primarily from federal agencies, with expectations that this revenue will not be recovered this year [60][69] Question: Education revenue and funding sources - The company clarified that it does not sell directly to the Department of Education, and funding is expected to continue flowing from state governments despite potential federal cuts [74][76] Question: Guidance and future expectations - Management indicated that the current guidance reflects a one-year step back, with expectations to return to original EBITDA projections in the following year [85][89] Question: New logo sales and project starts - Management reported strong new logo sales and confirmed that project starts have not been delayed despite external uncertainties [108][113] Question: Long-term growth and market strategy - The company sees significant potential for growth in both new client acquisition and expansion within existing accounts, with a focus on maintaining a balance between these two strategies [132][134]

Core Insights - FTI Consulting, Inc. has expanded its Board of Directors by electing Eric T. Steigerwalt and Janet H. Zelenka as independent directors, increasing the board size from nine to eleven members [1] Group 1: New Board Members - Eric T. Steigerwalt, age 63, is the President and CEO of Brighthouse Financial, a major provider of annuities and life insurance in the U.S. [2] - Janet H. Zelenka, age 66, is the former Executive Vice President, CFO, and CIO of Stericycle, a company specializing in regulated medical waste disposal, which was acquired by WM in November 2024 [2][3] Group 2: Board Member Expertise - Mr. Steigerwalt brings extensive experience in operations, finance, and corporate culture, having held multiple senior roles at MetLife prior to his current position [3] - Ms. Zelenka has significant expertise in finance, IT, cybersecurity, governance, and corporate ethics, along with her experience as Audit Committee Chair on the boards of two private companies [5][6] Group 3: Company Overview - FTI Consulting is a leading global expert firm with over 8,300 employees across 34 countries, generating $3.69 billion in revenues during fiscal year 2024 [6]