CRA(CRAI) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue increased by 12.4% to $171.8 million, marking the highest quarterly revenue in the company's history [4] - Non-GAAP net income, earnings per diluted share, and EBITDA grew year-over-year by 48%, 52%, and 34%, respectively [4][13] - Non-GAAP selling, general and administrative expenses were 15.6% of revenue, down from 16.2% a year ago [16] Business Line Data and Key Metrics Changes - Eight out of eleven practices experienced year-over-year growth, with legal and regulatory services leading at a 16% revenue increase [27] - The Antitrust & Competition Economics practice achieved record quarterly revenue, driven by high-profile mergers and ongoing antitrust services [28][62] - The Energy practice continued to support clients in transitioning away from fossil fuels and managing reliability risks [8] Market Data and Key Metrics Changes - New project originations grew by more than 10% compared to Q1 2023 [5] - The project lead flow increased by 3% year-over-year, consistent with broader legal market trends [27] Company Strategy and Development Direction - The company is focused on maintaining strong performance while being mindful of macroeconomic uncertainties [13] - There is a cautious approach to adding headcount, aiming to improve utilization rates closer to historical norms [45] - The company continues to see a healthy flow of opportunities and is viewed as an attractive destination for top talent [51][66] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic uncertainties remain prevalent, but there has been no internal decline in demand [42][60] - The company is reaffirming its full-year financial guidance, awaiting another quarter of performance before making updates [13][60] - There is optimism about the demand drivers across practices, although caution is exercised due to broader market conditions [48][65] Other Important Information - The company ended the quarter with$ 37.1 million in cash and $70 million in borrowings, resulting in net debt of$ 32.9 million [14] - A total of $12.3 million was returned to shareholders, including$ 3.1 million in dividends and $9.2 million in share repurchases [37] - Days Sales Outstanding (DSO) was 106 days, slightly up from 105 days in the previous quarter [58] Q&A Session Summary Question: Guidance maintenance after strong quarter - Management indicated that maintaining guidance reflects broader market uncertainties rather than internal performance issues [41][60] Question: Talent acquisition and headcount additions - The company is cautiously adding headcount to support strong performance while aiming to improve utilization rates [45] Question: Demand drivers and visibility - Management observed consistent demand drivers across practices, with no significant deterioration noted [48][62] Question: Antitrust and M&A activity - The Antitrust & Competition Economics practice continues to perform well, with growth driven by non-merger antitrust services [62] Question: Consultant retention and hiring plans - Attrition rates are approaching normal levels, allowing for a conservative approach to hiring while still attracting top talent [67]