CRA(US:CRAI)2023-03-02 19:57Financial Data and Key Metrics Changes - CRA reported a revenue increase of 4.4% to $590.9 million for fiscal 2022, marking the fifth consecutive year of record revenue [6] - Non-GAAP EBITDA, net income, and earnings per diluted share grew by 120%, 167%, and 211% respectively over the five-year period [6] - For the fourth quarter, reported revenue increased by 7.6% compared to Q4 2021, with currency headwinds reducing revenue by $4.4 million or 3.3% year-over-year on a constant currency basis [19][18] Business Line Data and Key Metrics Changes - Legal and regulatory services led revenue growth with an 8% year-over-year increase [7] - Eight of CRA's practices grew their top line, with four practices (antitrust and competition economics, intellectual property, labor and employment, and risk investigations and analytics) delivering double-digit revenue growth in fiscal 2022 [46] - The antitrust and competition economics practice experienced a 15% growth in project lead flow despite a slowdown in merger-related leads [48][108] Market Data and Key Metrics Changes - Worldwide M&A activity totaled $3.6 trillion in 2022, a decrease of 37% compared to 2021, with a significant decline in the second half of the year [9] - Revenue from CRA's legal and regulatory services during Q4 increased by 12% year-over-year, despite mixed trends in the legal market [49] Company Strategy and Development Direction - CRA's strategy includes a focus on commercialization and product launch in the Life Sciences practice, with continued client work in oncology and other therapeutic categories [14] - The acquisition of bioStrategies Group aims to enhance CRA's capabilities in developing commercial strategies for healthcare products and technologies [27] - The company plans to maintain a strong focus on antitrust enforcement and regulatory compliance, benefiting from increased demand in these areas [69] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in CRA's resilience amid macroeconomic uncertainties, noting a strong lead flow into the first months of fiscal 2023 [41] - For fiscal 2023, CRA expects revenue in the range of $615 million to $640 million and a non-GAAP EBITDA margin of 10.8% to 11.5% [30] - Management acknowledged strong currency headwinds but emphasized the company's ability to achieve record profits despite these challenges [18] Other Important Information - CRA ended the year with a consultant headcount of 939, representing a 9.1% increase compared to the previous year [34] - The company repaid $45 million of borrowings, concluding the year with zero outstanding debt and a total liquidity of $227 million [31][35] - CRA returned a total of $37.2 million to shareholders through dividends and share repurchases, exceeding its goal of returning half of adjusted cash flows from operations [32] Q&A Session Summary Question: Details on headcount growth in 2023 - Management indicated a year-over-year growth of about 10% in headcount and plans to match labor supply with service demand [37][38] Question: Comments on macroeconomic factors - Management noted resilience in performance despite macroeconomic uncertainties and observed a positive lead flow trend [41][42] Question: Insights on antitrust and competition economics practice - The practice saw a 15% growth in project lead flow, driven by ongoing investigations and demand for services in antitrust enforcement [48][108] Question: Outlook for life sciences practice - The inclusion of bioStrategies Group is expected to enhance CRA's capabilities and geographic reach in the life sciences sector [123] Question: Discussion on capital allocation and acquisitions - Management confirmed a commitment to returning capital to shareholders while remaining open to acquisition opportunities, with a focus on strategic fit [103][104]