CRA International, Inc. Q2 FY2025 earnings call

• CRA extended strong performance into Q2 2025 with 9% y-o-y revenue growth.
• Consultant utilization improved to 76% y-o-y in Q2, with over 50 new consultants added.
• Project lead flow increased 2% y-o-y in H1 2025, 5% y-o-y adjusting for IP team transition.
• Returned $46.6 million to shareholders in Q2, including $3.4 million dividends and $43.2 million share repurchases.
• Leadership transitions: Eric Nierenberg promoted to EVP, CFO; Brian Langan to EVP, Chief Strategy; Sandy David to Principal Accounting Officer.

Charles River Associates (CRA) reported second quarter 2025 revenue of $186.9 million, a 9% year-over-year increase. Seven of 11 practices grew year-over-year. Antitrust & Competition Economics, Energy, Intellectual Property, and Labor & Employment practices had double-digit revenue growth. North American operations grew 9.4% and international 7.0% in Q2. For the first half of fiscal 2025, non-GAAP net income, EPS, and EBITDA surpassed the prior year's record by 6%, 8%, and 8% respectively. Legal and regulatory services revenue rose nearly 11% in Q2. The Antitrust & Competition Economics practice set a quarterly revenue high due to merger-related activity; worldwide M&A activity in H1 2025 was $2 trillion, up 33% year-over-year. Intellectual Property practice advised on high-stakes litigation and valuation matters. Labor & Employment practice supported clients in discrimination and wage-hour litigation. Energy practice revenue grew ~5% year-over-year, driven by demand in utilities and data centers. Life Sciences practice had a slight Q2 decline but was up year-over-year for H1 2025.

• For full year fiscal 2025, CRA expects revenue in the range of $730 million to $745 million (up from prior range of $715 million to $735 million).
• Non-GAAP EBITDA margin is expected to be in the range of 12.3% to 13.0% (maintaining the upper end of the prior range).

• Uncertain global macroeconomic, business, and political conditions can affect CRA's business and client needs.
• Colleagues are at risk of being recruited by competitors, though CRA works to maintain an attractive work environment.

Q: Drivers of guidance raise and visibility A: CRA points to a strong first half of fiscal 2025 and continued lead flow activity as drivers of the guidance raise. They are mindful of geopolitical risks but remain bullish on future performance.

Q: M&A regulatory needs and deal size A: The Antitrust & Competition Economics practice had its best quarter ever, but no noticeable shift in M&A regulatory needs or change in deal size has been observed.

Q: Pricing environment A: Rate increases in fiscal 2025 have been realized, and while clients demand value, CRA focuses on efficiency and value delivery.

Q: Energy practice scaling A: The energy practice is growing via senior hires and internal promotions. Inorganic efforts are considered but strategic fit is prioritized.

Q: College hires and headcount A: CRA is bringing in over 100 recent college graduates, with headcount flat overall but investments in growing practices.

Q: Antitrust business growth and talent A: No major divergence in M&A vs non-M&A work in the Antitrust business. There are talent retention challenges as colleagues are at risk of being recruited by competitors, but CRA works to maintain an attractive environment.