CRA International (CRAI) Conference Transcript

Summary of CRA International (CRAI) Conference Call - June 11, 2025 Company Overview - Company Name: Charles River Associates (CRAI) - Industry: Consulting, specifically in legal and regulatory consulting and management consulting - Revenue Breakdown: Legal and regulatory consulting accounts for approximately 80% of revenue, while management consulting makes up the remaining 20% [5][6] Key Points and Arguments - Company History: CRA is celebrating its 60th anniversary, founded by professors from MIT and Harvard, focusing on delivering academic-quality research to the business world [5] - Employee Retention: CRA has a strong retention rate, with less than 10% turnover among top revenue generators over the past five years, indicating a positive work environment [9] - Client Base: CRA has worked with 85 of the Fortune 100 companies in the past two years and 98 of the Amlaw 100 law firms, showcasing its strong market position [12][13] - Financial Performance: Over the past ten years, CRA has seen a sixfold increase in stock price and a 2.5 times growth in revenue, with consistent performance across various time frames [15] - Capital Allocation: CRA has a strategy of returning excess capital to shareholders primarily through share repurchases, with a significant reduction in shares outstanding over the past decade [29] - Shareholder Yield: The current shareholder yield is approximately 6%, reflecting a growing market value for CRA [30] Growth and Market Dynamics - Headcount and Talent Acquisition: CRA is adding headcount in both legal regulatory and management consulting areas, despite a temporary flattening due to excess capacity in life sciences [34][36] - Growth Factors: Economic uncertainty and M&A activity levels are potential limiting factors for growth. CRA has historically performed well across various macroeconomic environments [37][38] - Promising Segments: The antitrust and competition economics practice, forensic practice, and energy practice are highlighted as areas with significant growth potential [41][43] Capital Structure and Acquisition Strategy - Willingness to Take on Debt: CRA is open to taking on debt for the right acquisition opportunities, emphasizing that any debt would be based on the asset's value rather than for share repurchases [46][48] - Active Acquisition Pipeline: There is an active pipeline for acquisitions, with CRA positioned to benefit from industry disruptions and seeking to attract the right candidates for growth [49] Conclusion - Future Outlook: CRA's success is attributed to its collective talent and the ability to adapt to changing market conditions. The company is well-positioned for future growth and continues to celebrate its legacy while looking ahead [52]