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    FCN
    Earnings call· Mar 2026(Q1 FY26)

    FTI CONSULTING Q1 FY26 earnings call FCN

    Apr 30, 2026 Source

    Executive summary

    FTI Consulting Q1 FY26 — Strong Revenue Growth Driven by Corporate Finance, Strategic Communications, and Technology

    FTI Consulting delivered solid first-quarter results, driven by robust growth in Corporate Finance, Strategic Communications, and Technology, which offset softness in Economic Consulting and FLC. The company maintained its full-year guidance, emphasizing its event-driven business model and continued investment in talent, particularly senior hires, to capitalize on market disruptions and expand capabilities globally. Management highlighted the firm's strong culture and ability to attract top professionals as key to its long-term growth trajectory.

    Highlights

    5

    • Total revenues increased 9.5% year-over-year to $983.3 million, with a 6.8% increase excluding FX impact.

    • Corporate Finance revenues grew 19.2% to $409.5 million, with strong performance across turnaround & restructuring, transactions, and transformation.

    • Strategic Communications delivered record revenues of $103 million, up 18.4%, and record adjusted segment EBITDA of $21.9 million.

    • Technology revenues increased 5.3% to $102.3 million, driven by litigation and information governance, privacy, and security services.

    • Repurchased 787,098 shares for $126.8 million at an average price of $161.11 per share.

    Concerns

    5

    • Net income decreased to $57.6 million from $61.8 million in the prior year, primarily due to higher direct costs, SG&A, interest expense, and a higher effective tax rate.

    • Economic Consulting revenues decreased 2.3% to $175.6 million, primarily due to lower demand for antitrust services, resulting in an operating loss of $7.3 million.

    • FLC revenues increased only 1.2% to $192.9 million, underperforming expectations due to lumpy engagements and higher compensation/SG&A expenses.

    • Q1 FY26 effective tax rate was 26.6%, higher than the prior year's 23.3% and the full-year expectation of 22-24%.

    • SG&A expenses increased $38 million to $222.3 million, or 22.6% of revenues, compared to 20.5% of revenues in the prior year quarter, partly due to higher legal expenses and lack of prior-year legal settlements.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $3.94 billion to $4.1 billion
    high materiality
    High
    Full-year 2026 EPS
    $8.90 to $9.60
    high materiality
    High
    Full-year 2026 Effective Tax Rate
    22% to 24%
    medium materiality
    Medium
    Full-year 2026 SG&A Expenses
    approximately $60 million higher than 2025
    medium materiality
    Medium
    Q2 2026 SG&A Expenses
    approximately $5 million higher than Q1 2026
    medium materiality
    Medium

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Corporate Finance
    Revenue growth driven by higher demand and realized bill rates across all sub-businesses. Sequentially, revenues decreased due to lower success fees and pass-throughs, but Adjusted EBITDA increased due to lower compensation.
    Revenue growth ex-FX: 16.7%Adjusted segment EBITDA: $88.7 millionAdjusted segment EBITDA margin: 21.6%Prior year Operating Income: $41 millionPrior year Adjusted segment EBITDA: $55.9 millionPrior year Adjusted segment EBITDA margin: 16.3%Turnaround & Restructuring revenue growth: 19%Transactions revenue growth: 18%Transformation revenue growth: 20%Million-plus engagements nearly doubled compared to Q1 2025Sequential Adjusted segment EBITDA increase: $8.5 million
    		$409.5 million19.2%-3.2%$85.2 million (Operating Income)
    FLC
    Underperformed expectations due to timing-driven volatility, large and lumpy engagements rolling off or starting late, higher compensation, hiring-related expenses, and bad debt. Long-term confidence remains due to investment in top talent.
    Revenue growth ex-FX: -0.9%Adjusted segment EBITDA: $25.3 millionAdjusted segment EBITDA margin: 13.1%Prior year Operating Income: $30.1 millionPrior year Adjusted segment EBITDA: $37.5 millionPrior year Adjusted segment EBITDA margin: 19.7%Higher realized bill rates for risk investigation and construction solutions servicesSequential Adjusted segment EBITDA increase: $1.4 million
    		$192.9 million1.2%flat$23.1 million (Operating Income)
    Economic Consulting
    Performance was in line with expectations but requires multi-quarters of work to improve P&L. Progress made in Europe, but North American antitrust revenue base needs rebuilding. Higher compensation, largely due to forgivable loan amortization, contributed to the loss.
    Revenue growth ex-FX: -5.7%Adjusted segment EBITDA: -$5.9 million (loss)Adjusted segment EBITDA margin: -3.4%Prior year Operating Income: $12.1 millionPrior year Adjusted segment EBITDA: $14.4 millionPrior year Adjusted segment EBITDA margin: 8%Lower demand for antitrust services, partially offset by higher demand for financial economic services and higher realized bill rates
    		$175.6 million-2.3%flat-$7.3 million (Operating Loss)
    Technology
    Growth driven by litigation and information governance, privacy, and security services, particularly from clients in healthcare, media, and technology industries, and a large privacy breach. The business leverages AI expertise for complex client issues.
    Revenue growth ex-FX: 2.8%Adjusted segment EBITDA: $11.8 millionAdjusted segment EBITDA margin: 11.6%Prior year Operating Income: $6.6 millionPrior year Adjusted segment EBITDA: $11.6 millionPrior year Adjusted segment EBITDA margin: 11.9%Higher demand for litigation and information governance, privacy and security servicesLower demand for investigations and M&A-related second request services
    		$102.3 million5.3%3.3%$7.7 million (Operating Income)
    Strategic Communications
    Record results reflect multiyear investments in higher-margin event-driven offerings (crisis, cyber, transactions, activism) and collaboration with other segments. Strong sequential Adjusted EBITDA growth due to higher revenue.
    Revenue growth ex-FX: 14.5%Adjusted segment EBITDA: $21.9 million (record)Adjusted segment EBITDA margin: 21.3% (record)Prior year Operating Income: $8.7 millionPrior year Adjusted segment EBITDA: $12.9 millionPrior year Adjusted segment EBITDA margin: 14.8%Higher demand for corporate reputation, public affairs and financial communications services
    		$103 million18.4%3.6%$20.8 million (Operating Income)

    Operational metrics

    19
    Revenue growth excluding FX
    $60.8 million6.8% YoY
    Q1 FY26

    Company-wide revenue increase excluding the positive impact of foreign exchange.

    Net income
    $57.6 milliondecreased from $61.8 million (Q1 FY25)
    Q1 FY26

    Decrease primarily due to higher direct costs, SG&A, interest expense, and a higher effective tax rate.

    SG&A expenses
    $222.3 millionincreased $38 million from $184.3 million (Q1 FY25)
    Q1 FY26

    Increase primarily due to higher legal expenses (no prior-year legal settlement benefit) and higher compensation and T&E expenses.

    Adjusted EBITDA
    $96.8 milliondecreased from $115.2 million (Q1 FY25)
    Q1 FY26

    The decrease was primarily due to higher direct costs and SG&A expenses, which more than offset the increase in revenues.

    Effective tax rate
    26.6%increased from 23.3% (Q1 FY25)
    Q1 FY26

    Primarily due to a less favorable tax benefit related to share-based compensation and an increase in valuation allowance.

    Weighted average shares outstanding (WASO)
    30.3 milliondecreased from 35.5 million (Q1 FY25)
    Q1 FY26

    The decrease reflects share repurchases.

    EPS
    $1.90increased from $1.74 (Q1 FY25)
    Q1 FY26

    Q1 2025 EPS included a $25.3 million special charge ($0.55/share) related to severance.

    Adjusted EPS
    $2.29
    Q1 FY25

    Excluding a $0.55 special charge related to severance and other employee-related costs in Q1 2025.

    Billable headcount growth
    1.1%
    Q1 FY26

    Growth in CorpFin and FLC segments partially offset by declines in StratCom, Econ, and Tech.

    Non-billable headcount change
    -0.4%
    Q1 FY26

    Compared to the prior year quarter.

    Net cash used in operating activities
    $310 milliondecreased from $455.2 million (Q1 FY25)
    Q1 FY26

    Decrease primarily due to a decline in forgivable loan issuances, higher cash collections, and lower income tax payments, partially offset by increased compensation payments.

    Shares repurchased
    787,098
    Q1 FY26

    Part of the company's stock repurchase program.

    Average share repurchase price
    $161.11
    Q1 FY26

    Average price per share for repurchased common stock.

    Total cost of share repurchases
    $126.8 million
    Q1 FY26

    Total cost for shares repurchased during the quarter.

    Remaining share repurchase authorization
    $354.9 million
    as of March 31, 2026

    Amount remaining available under the company's stock repurchase program.

    Total debt net of cash
    $556.7 millionincreased from $8.9 million (March 31, 2025) and $99.9 million (December 31, 2025)
    as of March 31, 2026

    Sequential increase primarily due to annual bonus payments and share repurchases.

    Senior hires
    85
    FY25

    Number of senior hires made in the previous fiscal year.

    SMD and affiliate hires
    29
    YTD 2026

    Hires made year-to-date in key geographies and adjacencies such as transaction, transformation, public affairs, cybersecurity, data privacy and AI.

    SG&A expenses increase
    $60 million
    FY26 vs FY25

    Expected increase in SG&A expenses for the full year 2026 compared to 2025, largely due to higher legal and compensation expenses.

    Deals & partnerships

    7
    Omnicom / IPGWorking on one of the largest mergers in the market

    FTI Consulting is supporting this large merger, expanding its services across the deal life cycle.

    Skyworks Solutions / QorvoWorking on one of the largest mergers in the market

    FTI Consulting is supporting this large merger, expanding its services across the deal life cycle.

    Lumen / AT&TWorking on a large carve-out (Lumen's sale of fiber-to-the-home business to AT&T)

    FTI Consulting is supporting this large carve-out, expanding its services across the deal life cycle.

    Spirit AirlinesWorking on one of the largest bankruptcies globally

    FTI Consulting's Corporate Finance segment is involved in this significant turnaround and restructuring engagement in the U.S.

    SaksWorking on one of the largest bankruptcies globally

    FTI Consulting's Corporate Finance segment is involved in this significant turnaround and restructuring engagement in the U.S.

    Prax Oil RefineryWorking on one of the largest bankruptcies globally

    FTI Consulting's Corporate Finance segment is involved in this significant turnaround and restructuring engagement in the U.K.

    Azul AirlinesWorking on one of the largest bankruptcies globally

    FTI Consulting's Corporate Finance segment is involved in this significant turnaround and restructuring engagement in Brazil.

    Risks & headwinds

    5
    FLC underperformance and lumpinessQ1 FY26

    FLC revenues increased only 1.2% YoY; Adjusted segment EBITDA margin decreased to 13.1% from 19.7% YoY.

    Mitigation: Long-term investment in top talent (SMDs) to drive revenue in higher-margin services; acknowledging that results can be lumpy due to event-driven nature of large engagements.

    Economic Consulting (Compass Lexecon) challengesQ1 FY26 and multi-quarters ahead

    Revenues decreased 2.3% YoY; Operating loss of $7.3 million; Adjusted segment EBITDA loss of $5.9 million.

    Mitigation: Progress made in Europe; rebuilding North American antitrust revenue base by adding talent; managing forgivable loan amortization for academics with longer payback periods.

    Higher effective tax rateQ1 FY26

    Q1 FY26 effective tax rate of 26.6% compared to 23.3% in Q1 FY25.

    Mitigation: Full-year tax rate still expected to be between 22% and 24%.

    Higher SG&A expensesQ1 FY26, with Q2 FY26 expected to be the high point.

    SG&A increased $38 million YoY to $222.3 million (22.6% of revenues) from $184.3 million (20.5% of revenues) in Q1 FY25.

    Mitigation: Increase largely due to higher legal and compensation expenses; Q2 expected to be the high point, then normalize.

    M&A market uncertaintyRemainder of FY26

    M&A market had a strong start to the year, but uncertainty remains how activity will continue through the remainder of the year.

    Mitigation: Continued investment in talent and platform strength to win headline-making jobs regardless of market cycles.

    What to watch in Q2 FY26

    5

    Economic Consulting P&L recovery

    As the year goes on (Q2 FY26 and beyond).
    CurrentAdjusted segment EBITDA loss of $5.9 million in Q1 FY26.
    TargetImprovement in P&L, moving towards profitability.

    Why it matters

    This segment is a key area of focus for management, and its recovery is crucial for overall firm profitability.

    though we believe our adjusted segment EBITDA in Economic Consulting has hit its low point this quarter, as Steve said, we have multiple quarters of work ahead to get the P&L back to the levels we are happy with.

    Q&A highlights

    8

    How feasible is it for both restructuring and M&A businesses to grow strongly at the same time, given their typical inverse relationship?

    Steve Gunby explained that while market forces often suggest an inverse relationship, FTI's ability to defy this is due to expanding global presence, adding talent, and gaining market share in transactions and transformation. He noted that the current environment sees unusual coalescing of supportive market forces.

    “I think the other thing that goes on here is that we've actually -- our teams have done a fabulous job of adding talent and expanding the businesses. These are not just U.S. businesses today. They're global businesses where we have powerful positions overseas, and we continue to be attracting talent.”

    asked by Andrew Nicholas · answered by Steve Gunby

    2 min read5 chapters

    Detailed Narrative

    01

    All SMD Meeting Insights

    Steve Gunby opened by discussing the recent all-SMD meeting, highlighting a strong sense of pride, excitement, and conviction among attendees. This sentiment stemmed from overcoming significant headwinds in 2024-2025 across most businesses (excluding Compass Lexecon) to achieve record performance in 2025. The meeting reinforced the belief that the firm's success is driven by individual and collective actions, not just market conditions, and that the company is still much closer to the beginning of its powerful journey.

    02

    Talent and Geographic Expansion

    The meeting showcased the firm's significant growth in capabilities, particularly in new geographies like Italy, Nordics, Amsterdam, Middle East, Germany, Australia, Asia, and Latin America, where the number of Senior Managing Directors (SMDs) has substantially increased since 2018. Similar growth was noted in practice areas like cyber, transactions, aviation, and financial crimes investigations, demonstrating a powerful transformation of the firm's global footprint and expertise and a strong sense of capability within the firm.

    03

    Strategic Investment in Talent

    Management emphasized a continued strategy of investing in top talent, with 85 senior hires in 2025 and 29 SMD and affiliate hires year-to-date in 2026. These hires are concentrated in key geographies and adjacencies such as transaction, transformation, public affairs, cybersecurity, data privacy, and AI, often benefiting from competitive disruptions. The firm plans to increase junior hiring in the second half of 2026 to support these senior professionals and maintain optimal ratios.

    04

    M&A Market and Event-Driven Business

    The M&A market had a strong start to the year, benefiting FTI's businesses supporting M&A-related activity in Corporate Finance, Economic Consulting, Technology, and Strategic Communications. However, management acknowledged the inherent lumpiness of their event-driven business, noting that results can fluctuate due to the timing of📎 large engagements, as seen with FLC's underperformance this quarter, but their ability to win headline-making jobs reflects platform strength.

    05

    AI Impact and Pricing Models

    The firm is actively exploring the impact of AI on its business, particularly in the tech segment. While AI may reduce the need for junior-level work, it increases demand for senior oversight and expertise, often leading to higher bill rates. FTI is experimenting with various pricing models, including fixed-price contracts, to deliver value faster and broader, staying ahead of rapid technological changes and gaining market share.

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