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    CRAI
    Earnings call· Jul 2025(Q2 FY26)

    CRA INTERNATIONAL Q2 FY26 earnings call CRAI

    Aug 6, 2026 Source

    Executive summary

    CRA International Q2 FY26 — Record Revenue and Strong Profit Growth

    CRA International achieved record quarterly revenue and strong profit growth in Q2 FY26, driven by broad-based contributions across its practice areas, particularly in Life Sciences, Energy, and Forensic Services. The company raised its full-year revenue guidance, reflecting a healthy pipeline and strong first-half performance. Management highlighted the successful integration of new senior talent and the strategic expansion of its credit facility to support continued growth and operational flexibility.

    Highlights

    5

    • Achieved record quarterly revenue of $210.8 million, representing 12.8% year-over-year growth.

    • Non-GAAP net income grew 9%, diluted EPS grew 14.9%, and EBITDA grew 15.3% year-over-year.

    • Eight practices, comprising 95% of total revenue, grew year-over-year, with six practices posting double-digit growth.

    • International operations revenue increased 32.9% year-over-year, and North American revenue increased 8.7%.

    • Consultant headcount increased 3.3% year-over-year, and utilization ticked up to 77% from 76%.

    Concerns

    3

    • Non-GAAP effective tax rate increased to 32.6% in Q2 FY26 from 29.0% in Q2 FY25.

    • Days Sales Outstanding (DSO) increased to 113 days at quarter-end from 100 days at Q1 FY26 end.

    • Evolving geopolitical, global macroeconomic, and business conditions remain potential headwinds.

    Guidance & targets

    10
    CategoryTargetConfidence
    Full-year 2026 revenue (constant currency)
    $805 million to $820 million
    high materiality
    High
    Full-year 2026 non-GAAP EBITDA margin
    12.0% to 13.0%
    high materiality
    High
    Full-year 2026 constant currency adjustment for reported annual revenue
    decrease by approximately $2.5 million
    low materiality
    High
    Full-year 2026 constant currency adjustment for reported annual EBITDA
    decrease by less than $250,000
    low materiality
    High
    Second half FY26 constant currency adjustment for reported revenue
    increase reported revenue by approximately $500,000
    low materiality
    High
    Second half FY26 constant currency adjustment for reported EBITDA
    increase reported EBITDA by $100,000
    low materiality
    High
    Full-year 2026 noncash forgivable loan amortization increase
    approximately $15 million
    medium materiality
    High
    Second half FY26 noncash forgivable loan amortization increase
    slightly more than $5 million
    medium materiality
    High
    Full-year 2026 effective tax rate
    32% to 33%
    medium materiality
    High
    Remainder of FY26 effective tax rate
    33% to 34%
    medium materiality
    High

    Segment performance

    11
    SegmentRevenueYoYQoQMargin
    Antitrust & Competition Economics
    Capitalized on ongoing merger-related activity and continued demand for antitrust services.
    Quarterly Revenue: new highRecord Quarters: 6 consecutive
    		————
    Energy
    Achieved strong results across diverse clients including utilities, private equity investors, electric system operators, and large energy consumers. Advised on 'Utility of the Future' strategy and secured multiyear engagement with PJM for data center load forecasts.
    		—in excess of 20%——
    Finance
    Active in complex commercial disputes and investigations, including bankruptcy matters. Second consecutive quarter of double-digit revenue growth.
    		—double-digit——
    Forensic Services
    Established a new high for quarterly revenue, responding to numerous crisis management events, including cyber incidents amplified by AI sophistication.
    Quarterly Revenue: new high
    		—over 20%——
    Intellectual Property
    Advised on multiple high-stakes litigation and valuation matters, including patent infringement claims for a global smartphone manufacturer and international arbitration.
    		—double-digit——
    Life Sciences
    Helped clients build strategies across the life cycle, leveraging AI tools for market analysis and supporting global launch strategies for blockbuster products. Growth driven by both pricing/market access and litigation-related matters.
    		—in excess of 20%——
    Risk, Investigations & Analytics
    Worked on large investigative advisory and damage-related expert assignments, including forensic accounting for a fraudulent misrepresentation claim in private aviation.
    		—more than 20%——
    Legal & Regulatory services
    Growth supported by trends in the broader legal market, with total case filings up 11% and total court judgments up 5%.
    		—10.1%——
    Management Consulting services
    Analyst estimate for growth, confirmed by management's discussion of strong performance in Energy and Life Sciences practices.
    		—25-26%——
    North America
    Contributed to overall revenue growth.
    		—8.7%——
    International
    Strong growth, particularly in Life Sciences and Antitrust & Competition Economics practices, driven by organic efforts.
    		—32.9%——

    Operational metrics

    29
    Total Revenue
    $210.8 millionup 12.8% YoY
    Q2 FY26

    Building on 8 consecutive years of record annual revenue and a best-ever first quarter.

    Non-GAAP Net Income Growth
    9%YoY
    Q2 FY26

    Translated from top line performance.

    Non-GAAP Diluted EPS Growth
    14.9%YoY
    Q2 FY26

    Translated from top line performance.

    Non-GAAP EBITDA Growth
    15.3%YoY
    Q2 FY26

    Translated from top line performance.

    Consultant Headcount
    968up 3.3% YoY from 937
    Q2 FY26 end

    Welcomed more than 60 new consultants during Q2.

    Consultant Utilization
    77%up from 76% in Q2 FY25
    Q2 FY26

    Ticked up year-over-year.

    Average Weekly Project Lead Flow Growth
    double-digitrelative to Q2 FY25
    Q2 FY26

    Remained strong, supporting increases in headcount and utilization.

    New Project Originations Growth
    double-digitrelative to Q2 FY25
    Q2 FY26

    Remained strong, supporting increases in headcount and utilization.

    Worldwide M&A Activity
    $2.85 trillionup 50% compared to year-ago levels
    H1 2026

    Against this backdrop, CRA's Antitrust & Competition Economics practice posted its sixth straight record quarter.

    Worldwide M&A Activity
    $1.6 trillionup 31% compared to Q1 2026
    Q2 2026

    Surpassing $1 trillion for the fourth consecutive quarter.

    Total Revenue (constant currency)
    $408.8 millionrelative to FY25
    H1 FY26

    Given our strong first half results and healthy pipeline.

    Non-GAAP EBITDA (constant currency)
    $49.7 millionrelative to FY25
    H1 FY26

    Resulting in a margin of 12.2%.

    Non-GAAP EBITDA Margin (constant currency)
    12.2%
    H1 FY26

    Resulting from $49.7 million non-GAAP EBITDA on $408.8 million revenue.

    Noncash Forgivable Loan Amortization Increase
    more than $9 millionrelative to H1 FY25
    H1 FY26

    Reflected as an expense when presenting EBITDA metrics.

    Cash and Cash Equivalents
    $21.4 million
    Q2 FY26 end

    Concluded the quarter with this balance.

    Borrowings under Revolving Credit Facility
    $219 million
    Q2 FY26 end

    Used to manage working capital needs during the first 2 quarters, including funding annual bonus payments.

    Net Debt
    $197.6 million
    Q2 FY26 end

    Calculated from cash and borrowings.

    Net Cash Outlays for Talent Investments
    $18.2 million
    Q2 FY26

    In addition to normal bonus cycle.

    Traditional Capital Expenditures
    $1.6 million
    Q2 FY26

    Cash outlay during the quarter.

    Capital Returned to Shareholders
    $31.4 million
    Q2 FY26

    Consisting of dividend payments and share repurchases.

    Dividend Payments
    $3.6 million
    Q2 FY26

    Part of capital returned to shareholders.

    Share Repurchases
    $27.8 million
    Q2 FY26

    Part of capital returned to shareholders.

    Share Repurchases
    $49.3 million
    YTD FY26

    Year-to-date spending on repurchases.

    Remaining Share Repurchase Authorization
    $16.6 million
    Q2 FY26 end

    Available under current program.

    Total Liquidity
    $98.7 million
    Q2 FY26 end

    Consisting of cash and available credit.

    Non-GAAP SG&A (excluding commissions)
    15.5%compared with 16.3% a year ago
    Q2 FY26

    Excluding 1.3% attributable to commissions to nonemployee experts.

    Non-GAAP Effective Tax Rate
    32.6%compared with 29.0% in Q2 FY25
    Q2 FY26

    Increased year-over-year.

    Days Sales Outstanding (DSO)
    113 dayscompared with 100 days at Q1 FY26 end
    Q2 FY26 end

    Increased sequentially.

    Extra Week Impact on Growth Rate
    100 to 150 basis point
    Q4 FY25

    The extra week in FY25 was a 53-week year, impacting YoY growth calculations.

    Deals & partnerships

    1
    Fivetran, dbt LabsCRA advised Fivetran on competition and regulatory compliance aspects of its merger with dbt Labs.

    The merger brings together two category-defining platforms to advance open data infrastructure for AI. Announced completion on June 1, 2026.

    Risks & headwinds

    3
    Evolving geopolitical, global macroeconomic, and business conditionsongoing

    unquantified

    Mitigation: Remain mindful, but encouraged by strong start to year and healthy pipeline.

    Increase in non-GAAP effective tax rateQ2 FY26

    32.6% in Q2 FY26 vs 29.0% in Q2 FY25

    Mitigation: Expect full year rate of 32-33%, with H2 rate of 33-34%.

    Increased Days Sales Outstanding (DSO)Q2 FY26

    113 days at Q2 FY26 end vs 100 days at Q1 FY26 end

    What to watch in Q3 FY26

    5

    Management Consulting Growth

    next quarter
    CurrentLife Sciences and Energy practices grew in excess of 20% YoY in Q2 FY26
    TargetContinued persistent double-digit growth

    Why it matters

    Sustained high growth in these key practices is critical for overall revenue performance and validates the company's strategic focus areas.

    Life Sciences and the Energy practice both grew in excess of 20% year-over-year. I think they delivered similar type of year-over-year growth in Q1. So it has been persistent now for the last, let's say, 2 or 3 quarters for both.

    Q&A highlights

    7

    Asked for more detail on the 25-26% growth in Management Consulting, specifically which areas are growing fastest and the sustainability of this demand.

    Paul Maleh highlighted Life Sciences and Energy practices both growing over 20% YoY, with persistent strength over the last 2-3 quarters. He noted strong inbound opportunities and high conversion rates, making the near-to-medium term positive. He attributed Energy growth to the unprecedented change in the utility industry and data center demand.

    “Life Sciences and the Energy practice both grew in excess of 20% year-over-year. I think they delivered similar type of year-over-year growth in Q1. So it has been persistent now for the last, let's say, 2 or 3 quarters for both.”

    asked by Andrew Nicholas · answered by Paul Maleh

    2 min read6 chapters

    Detailed Narrative

    01

    Record Performance and Broad-Based Growth

    CRA International achieved its highest quarterly revenue ever at $210.8 million, marking a 12.8% year-over-year increase. This growth was broad-based, with eight practices contributing to 95% of total revenue, and six practices (Energy, Finance, Forensic Services, Intellectual Property, Life Sciences, and Risk, Investigations & Analytics) experiencing double-digit growth. The Antitrust & Competition Economics practice also set a new quarterly revenue record.

    02

    Strategic Talent Investment and Utilization

    The company increased its consultant headcount by 3.3% year-over-year, adding over 60 new consultants in Q2, and saw consultant utilization rise to 77% from 76%. This talent expansion, including the successful ramp-up of 30 new Vice Presidents hired in 2025, is supported by a strong sales pipeline and robust project lead flow, indicating sustained demand for CRA's services.

    03

    Legal & Regulatory Market Dynamics

    Revenue from Legal & Regulatory services grew by 10.1%, benefiting from broader legal market trends including an 11% increase in total case filings and a 5% increase in total court judgments. The Antitrust & Competition Economics practice capitalized on record M&A activity, which totaled $2.85 trillion in H1 2026, marking the strongest opening period for dealmaking since 1980.

    04

    Impact of AI and Crisis Management

    The Forensic Services practice grew over 20% year-over-year, driven by increased demand for cyber incident response work. Management noted that AI acts as both a productivity enhancer and a "demand amplifier," as the sophistication of AI tools used by hackers contributes to the complexity and frequency of cyber-attacks, creating a persistent need for forensic expertise.

    05

    Energy Transition and Data Center Demand

    The Energy practice delivered over 20% year-over-year growth, advising major utilities on "Utility of the Future" strategies, including distributed energy resources and rapidly increasing demand from data centers. The practice also secured a multiyear engagement with PJM to develop enhanced data center load forecasts, highlighting its role in navigating complex energy market shifts.

    06

    Enhanced Financial Flexibility

    CRA expanded and extended its credit facility to $400 million, consisting of a $75 million term loan and a $325 million revolving credit facility. This new 5-year facility replaces the prior one and provides increased financial flexibility to manage working capital needs and support growth, reflecting management's bullish outlook on the company's future prospects.

    AI-generated summary of the company’s earnings call. Not investment advice.