CRA INTERNATIONAL, INC. Q4 FY2024 earnings call

• Fiscal 2024 revenue was $687.4M, a 10.2% increase, marking seventh consecutive record annual revenue. Legal and regulatory services grew 12%.
• Q4 2024 revenue up 9.2%, best quarterly revenue in company history. North American up 7.8%, international up 15.7%.
• Seven practices in energy, finance, IP had double-digit Q4 growth. Sales pipeline growth with 5.5% increase in project lead flow and 7.5% in new project originations.
• Utilization in Q4 2024 was 78% vs. 73% in Q4 2023. Non-GAAP net income, EPS, and EBITDA increased 21.2%, 24.5%, and 28.4% respectively in Q4.
• Highlighted market performance: Legal and regulatory services grew 7% in Q4, surpassing broader legal market. Antitrust, finance, IP, etc., practices had strong growth.

Revenue for fiscal 2024 increased by 10.2% to $687.4 million. Legal and regulatory services led growth with a 12% increase year over year. Six practices had double-digit revenue growth. In the fourth quarter, revenue increased 9.2% compared to Q4 2023, with North American operations up 7.8% and international up 15.7%. Legal and regulatory services in Q4 grew ~7%, with finance and intellectual property practices each delivering over 20% quarterly revenue growth. Seven of eleven practices in energy, finance, and intellectual property had double-digit revenue growth in Q4 2024.

• For full-year fiscal 2025, constant currency revenue expected $715M-$735M. Non-GAAP EBITDA margin expected 12.0%-13.0%.
• Capital expenditures for fiscal 2025 expected $5M-$6M. Returned $45.6M to shareholders in 2024, with Board authorizing expansion of share repurchase program to $45M, leaving ~$58.1M available.

• Uncertain global macroeconomic, business, and political conditions can affect demand for services.
• Potential impacts from market disruptions or optimization actions could affect utilization and growth.

Q: Thoughts on high utilization level in Q4 and headcount expectations for 2025?

A: Utilization in Q4 was 78% due to legal and regulatory being a larger portfolio part. Headcount growth should roughly equal revenue growth in medium to long term.

Q: Thoughts on new administration impact?

A: Too early to call, M&A in Jan was low but uncertainly may delay expenditures.

Q: Timing of Q4 gains?

A: All of Q4 was strong, no marked difference between Oct-Nov-Dec.

Q: Antitrust retention in 2025 outlook?

A: Guidance includes best expectations, net positive expected but more work needed on talent retention/recruitment.

Q: Impact of talent competition on margins?

A: Margin range incorporates new comp arrangements, with employees potentially benefiting from higher wages.