FTI sulting(US:FCN)2025-10-23 14:00Financial Data and Key Metrics Changes - The company reported record results with earnings per share (EPS) and adjusted EPS of $2.6, representing an increase of over 40% year-over-year [5][40] - Revenue for Q3 2025 was $956.2 million, a 3.3% increase compared to the prior year quarter [40] - Net income increased by 25% to $82.8 million compared to the prior year quarter [40] - Adjusted EBITDA for Q3 2025 was $130.6 million, or 13.7% of revenue, compared to $102.9 million, or 11.1% of revenue in the prior year quarter [40][42] Business Line Data and Key Metrics Changes - Corporate Finance (Corp Fin): Revenue increased by 18.6% to $404.9 million, driven by higher demand for restructuring and transaction services [43] - Forensic and Litigation Consulting (FLC): Revenue rose by 15.4% to $194.7 million, primarily due to higher realized bill rates and increased demand for risk and investigation services [46] - Economic Consulting (Econ): Revenue decreased by 22% to $173.1 million, attributed to lower demand for non-M&A related antitrust services [49] - Technology (Tech): Revenue decreased by 14.8% to $94.1 million, mainly due to lower demand for M&A related services [53] - Strategic Communications (Stratcom): Revenue increased by 7.4% to $89.4 million, driven by higher demand for corporate reputation services [54] Market Data and Key Metrics Changes - The company experienced double-digit organic revenue growth across Corp Fin, FLC, Tech, and Stratcom, which offset declines in Econ and Tech [39] - The restructuring segment represented 46% of Corp Fin's revenue, with significant growth in key geographies including the U.S., UK, Germany, Spain, France, and Australia [45] Company Strategy and Development Direction - The company emphasizes organic growth and investment in high-value areas where it believes it has a competitive advantage [8][9] - There is a focus on enhancing team capabilities and attracting top talent, even during challenging market conditions [35][61] - The leadership is committed to maintaining a diverse and resilient business model, with a strong emphasis on client service and expertise [10][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and potential for future growth, despite facing headwinds in certain segments [37][60] - The company anticipates a gradual return to revenue growth in the Econ segment, although the timing remains uncertain [59] - There is a belief that the company is closer to the beginning of its growth journey than to the end, indicating optimism for long-term prospects [38] Other Important Information - The company repurchased 1.426 million shares at an average price of $164.18, with an additional $500 million authorized for share repurchases [57][58] - Cash and cash equivalents decreased to $146 million from $386.3 million a year ago, while total debt net of cash increased to $364 million [58] Q&A Session Summary Question: Can you unpack how much of the top line performance in the quarter was market-driven versus talent dynamics? - Management estimated that approximately two-thirds of the revenue decline was due to talent transition and one-third due to market conditions [69] Question: What is the outlook for the U.S. Government shutdown's impact? - Management noted that there has not been a significant effect from the government shutdown so far, but an extended shutdown could impact business [70] Question: Can you elaborate on the strength of the transactions practice? - The strength is largely attributed to the quality of the team and their credibility in the market, which has allowed for the introduction of additional services [75][76] Question: Regarding price realization, can this continue into future years? - Management indicated that there is potential for rate increases across all segments, but the significant catch-up seen this year may not be repeated annually [80]