CRA International Q1 2025 Earnings Call Transcript

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May 1, 2025
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Operator

Day, everyone, and welcome to Charles River Associates First Quarter twenty twenty five Conference Call. Please note that today's call is being recorded. The company's earnings release and prepared CFO remarks are posted on the Investor Relations section of CRA's website at cra.com. With us today are CRA's President and Chief Executive Officer, Paul Malley and Chief Corporate Development Officer and Interim Chief Financial Officer, Chad Holmes. At this time, I'd like to turn the call over to Mr.

Operator

Holmes for opening remarks. Chad, please go ahead.

Chad Holmes
Chad Holmes
Executive VP & Chief Corporate Development Officer, Interim CFO & Treasurer at CRA International

Thank you, Rob, and good morning to everyone. Please note that the statements made during this conference call, including guidance on future revenue and non GAAP EBITDA margin and any other statements concerning the future business, operating results or financial condition of CRA, including those statements using the terms expect, outlook or similar terms, are forward looking statements as defined in Section 21 of the Exchange Act. Information contained in these forward looking statements is based on management's current expectations and is inherently uncertain. Actual performance and results may differ materially from those expressed or implied in these statements due to many important factors, including the level of demand for our services as a result of changes in general and industry specific economic conditions. Additional information regarding these factors is included in today's release and in CRA's periodic reports, including our most recently filed annual report on Form 10 ks and quarterly reports on Form 10 Q filed with the SEC.

Chad Holmes
Chad Holmes
Executive VP & Chief Corporate Development Officer, Interim CFO & Treasurer at CRA International

CRA undertakes no obligation to update any forward looking statements after the date of this call. Additionally, we will refer to some non GAAP financial measures and certain measures presented on a constant currency basis on this call. Everyone is encouraged to refer to today's release and related CFO remarks for reconciliations of these non GAAP financial measures to their GAAP comparable measures and descriptions of the calculation of EBITDA and measures presented on a constant currency basis. I will now turn it over to Paul for his report. Paul?

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Thanks, Chad, and good morning, everyone. Thank you for joining us today. Building on the momentum of an exceptional fiscal twenty twenty four, CRA continued its strong performance into the first quarter of fiscal twenty twenty five and delivered record financial results. During the first quarter, revenue increased by 5.9% year over year to $181,900,000 which represents the highest quarterly revenue in the company's history. Broad based contributions drove the quarter's strong performance with five practices growing year over year.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Four practices, energy, finance, intellectual property and life sciences posted double digit revenue growth, while the antitrust and competition economics practice posted a new high for quarterly revenue. We also expanded geographically as CRA's international operations led the way with nearly 20% year over year revenue growth. We continue to manage the business effectively, converting strong top line growth into even faster bottom line expansion. Non GAAP net income, earnings per diluted share and EBITDA increased year over year by 11%, thirteen % and eleven % respectively. Each profit metric also set a new quarterly record for CRA.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

For the company as a whole, consultant headcount decreased 5% compared to the first quarter of twenty twenty four and was flat sequentially. Consulting utilization improved on a year over year basis to 76%. The increase in utilization was supported by the continued replenishing of our sales pipeline. After a sluggish start in January, project lead flow accelerated during the quarter and increased by five percent year over year. New project originations followed a similar pattern and increased by 3% relative to the first quarter of twenty twenty four.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

I would now like to spend a few minutes highlighting the markets for our services and some of the projects delivered during the first quarter. Revenue in the first quarter from CRA's legal and regulatory services increased by roughly 5%. This growth was in line with the broader legal market as total case filings and total court judgments increased 132%, respectively, compared to the first quarter of twenty twenty four. Turning to the M and A market. Worldwide M and A activity rebounded from a slow January and February to start the year, reaching $885,000,000,000 during the first quarter of twenty twenty five.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

This represented an increase of 15% compared to year ago levels and the strongest opening quarter for deal making since 2022. Against this backdrop, the record quarter for CRA's antitrust and competition economics practice reflected continued demand for antitrust services and ongoing merger related activity. During the quarter, CRA economists worked for Microsoft to help secure a favorable decision from the UK Competition and Market Authority in its investigation of the Microsoft OpenAI partnership. The team of CRA experts documented and quantified the pace of innovation and market entry in the AI space. They further helped the CMA understand the inner workings of the partnership, its effect on the party's incentives, and its role in underpinning investment and innovation across the AI economy.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

The CMA concluded that there was no basis to review the partnership under the merger regulations. CRA's antitrust and competition economics practice remained active in high stakes legal disputes during the first quarter. Our consultants and affiliated experts prepared and delivered expert reports and testimony in a range of competition related matters, including in litigated mergers, claims of anti competitive conduct, antitrust class actions, and in matters at the intersection of antitrust and intellectual property. These engagements span the diverse set of industries such as technology, healthcare, retail and consumer goods. In the first quarter, CRA's finance practice continued to be active in several merger and other transaction related lawsuits in Delaware Chancery Court and Federal Court.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

As an example, during the quarter, the practice collaborated with members of CRA's antitrust and competition economics practice and the risk investigations and analytics practice to investigate on behalf of a European tax authority and alleged multi jurisdictional fraud connected to a dividend arbitrage scheme. Chicago, New York, Boston and London based teams performed extensive trading and market practice analysis, investigative research, document review, forensic accounting and flow of funds analysis. A CRA expert testified at trials in several jurisdictions, including The United States. In February, a jury in The US awarded $500,000,000 to CRA's clients. CRA's intellectual property property practice advised on multiple high stakes litigation, arbitration, and valuation matters covering a broad range of industries, including artificial intelligence, chemicals, consumer electronics, energy, financial services, food and beverage, life sciences, software, and telecommunications.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

In one example, a CRA expert testified as an economic damages and licensing expert on behalf of a leading telecommunications company being sued for patent infringement in Marshall, Texas, 1 of the most active patent litigation venues in The US. CRA's analysis and testimony demonstrated, among other things, that the features in questions had low value based on analysis of customer usage metrics and that the plaintiff's claim of over $1,000,000,000 in royalties was excessive and economically unjustified based on the facts in the case, the juries found in favor of CRA's clients. Within our management consulting services, revenue increased 10% year over year as both energy and life sciences practice delivered double digit revenue growth. During the first quarter, CRA's energy practice delivered strong performance across strategy, risk and compliance, data center support, utility planning, and transaction support services. For example, on a strategy assignment, the team assisted a major utility in developing its large load strategy encompassing data centers and the onshoring of additional manufacturing needs in its service region.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Within risk and compliance, the practice provided expertise to infrastructure investors on the impacts of California wildfires, leveraging a skilled team with a background in wildfire mitigation planning. And in resource planning, the team supported Liberty Utilities in filing its 2025 integrated resource plan in Missouri with plans for subsequent filings in other states. Finally, on the transaction advisory side, the practice supported due diligence efforts across multiple transactions, including a utility buy side diligence and a chemical sell side diligence, leveraging depth of the team's industry expertise. CRA's life sciences practice continues to emphasize a commitment to R and D pipeline opportunities in the industry, working with our clients' commercial and product development teams as they assess opportunities and work to bring new products to market. The first quarter featured projects focused on opportunity assessment, sales forecasting and launch planning.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Additionally, the quarter was highlighted by expert witness work involving antitrust matters, an area that we expect will grow in the years ahead as combination products become more common in the life sciences industry. Some obvious combinations are drugs approved for administration with a particular device, but similar concerns are likely to be faced by new gene therapies and the associated viral vectors needed to deliver the gene therapy to the appropriate cells. Overall, I'm grateful to all of my colleagues for their hard work during the first quarter as we helped our clients address their most important challenges. While pleased with the strong performance of the business, we continue to look for opportunities to further optimize our service portfolio by reconfiguring the teams in targeted areas of the company. During the quarter, these efforts affected approximately 15 individuals, resulting in a restructuring charge that was offset by the reversal of non cash charges associated with a previously recorded performance award.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Now turning to guidance. We are encouraged by the strong start to the year and the trend of lead flow activity within the quarter. As such, we are reaffirming our full year financial guidance for fiscal twenty twenty five. For full year fiscal twenty twenty five on a constant currency basis relative to fiscal twenty twenty four, we expect revenue in the range of $715,000,000 to $725,000,000 and non GAAP EBITDA margin in the range of 12% to 13%. However,

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

we

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

are mindful that uncertain global macroeconomic, business and political conditions can be volatile and affect our business. With that, I'll turn the call over to Chad for a few additional comments. Chad?

Chad Holmes
Chad Holmes
Executive VP & Chief Corporate Development Officer, Interim CFO & Treasurer at CRA International

Thanks, Paul. As a reminder, more expansive commentary on our financial results is available on the Investor Relations section of our website under Prepared CFO Remarks. Before we get to your questions, I will provide a few additional metrics related to our performance in the first quarter of fiscal twenty twenty five. In terms of consultant headcount, we ended the quarter at nine forty seven, consisting of 156 officers, five 60 six other senior staff, and two twenty five junior staff. This represents a 5% year over year decrease compared with the nine ninety seven consultant headcount reported at the end of Q1 fiscal twenty twenty four and is flat sequentially relative to the nine forty six consultant headcount reported at the end of Q4 fiscal twenty twenty four.

Chad Holmes
Chad Holmes
Executive VP & Chief Corporate Development Officer, Interim CFO & Treasurer at CRA International

Non GAAP selling, general and administrative expenses, excluding the 2% attributable to commissions to non employee experts, was 15.9% of revenue for the first quarter of fiscal twenty twenty five compared with 15.6% a year ago. The effective tax rate for the first quarter of fiscal twenty twenty five on a non GAAP basis was 27.2% compared with 28% on a non GAAP basis for the first quarter of fiscal twenty twenty four. Turning to the balance sheet. DSO at the end of the first quarter was one hundred and seven days compared with one hundred and six days at the end of the fourth quarter of fiscal twenty twenty four. DSO in the quarter consisted of sixty five days of billed and forty two days of unbilled.

Chad Holmes
Chad Holmes
Executive VP & Chief Corporate Development Officer, Interim CFO & Treasurer at CRA International

Turning to our capital deployment during the quarter, we concluded the quarter with $25,600,000 of cash and $85,000,000 of borrowings under our revolving credit facility, resulting in net debt of $59,400,000 The borrowings during the first quarter were primarily to fund bonus payments, which is consistent with our practice in prior years. Bonuses relating to fiscal twenty twenty four were largely paid in the first quarter, with the final installments expected to be completed by the end of the second quarter. In addition to the normal bonus cycle, the first quarter of twenty twenty five saw cash outlays of $27,400,000 to acquire and retain senior talent and $1,000,000 for capital expenditures. During the first quarter, we also delivered $3,500,000 of dividends to our shareholders. That concludes our prepared remarks.

Chad Holmes
Chad Holmes
Executive VP & Chief Corporate Development Officer, Interim CFO & Treasurer at CRA International

We'll now open the call for questions. Operator, please go ahead.

Operator

Thank you. At this time, we'll be conducting a question and answer session. Our first question comes from Andrew Nicholas with William Blair. Please proceed with your question.

Andrew Nicholas
Equity Research Analyst at William Blair

Hi, good morning. Thanks for taking my questions. I wanted to first ask on April to date activity. Paul, a little bit of color on maybe what you've seen over the past couple of weeks in a pretty choppy market environment. And maybe relatedly, how what you've seen in April impacts or informs your confidence in reiterating guidance this year?

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Sure. First of all, good morning, Andrew. As we talked about our journey to a record setting Q1 of fiscal twenty five was not necessarily a straight line. We began with an unusually slow January and we have seen the level of activity both in terms of business inflow, new project originations and billings grow as the quarter proceeded. So February was greater than January and March was greater than February.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

We only are in a couple of weeks into the month of April. And what I can share is that the trends that we have seen in March have continued, but I think it's a little too early to declare victory or to assume that those trends would just naturally continue going forward. But so far, so good.

Andrew Nicholas
Equity Research Analyst at William Blair

Got it. Thank you. And then, a really nice quarter, it sounds like for life sciences. Could you maybe talk a little bit about that pipeline specifically, maybe where some of the bigger opportunities are and how excited you are for that business maybe relative to some challenges over past couple years?

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Sure. No, I'm very happy for the life sciences practice. I know they've been working hard to benefit from some of the seeds of growth that they've been planting. I would love to see a true streak start. So they've posted a couple of good quarters together.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

There again, I'd like to see that continue. But they're enjoying success geographically. They're enjoying success across the business concentration areas of that litigation strategy and more regulatory support there. So things are clicking right now for that practice. And we're just hoping that the momentum continues into Q2 and throughout 2025.

Andrew Nicholas
Equity Research Analyst at William Blair

Great. And maybe if you wouldn't mind me squeezing one more in just on headcount growth and plans there. Another really good quarter of utilization. So if you could just kind of talk about where you said it looks like forgivable loan outlays were also a little bit higher than normal. So any comments on retention or attrition would also be helpful.

Andrew Nicholas
Equity Research Analyst at William Blair

Thanks again.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Sure. So on headcount, the one thing I want to put out there as a reminder, there was a headcount action that took place in Q2 of fiscal twenty twenty four. And we are still seeing the effect in terms of year over year comparisons on the headcount. That's why we provided the year over year growth rate or decline of roughly 5%, but also wanted to highlight sequentially it was flat relative to Q4. What we are constantly trying to do is make sure we are optimizing the investments we put into this firm.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

And investments aren't always just cash outlays for talent. Investments are always making sure that our business units are operating as profitably as one would expect. And if there are areas of underperformance to see whether action is required with that. So I could say for those 15 individuals impacted There, it's just really unfortunate positioning of where heads may exist and where the revenue opportunities are being realized across the portfolio. But we are still investing for headcount growth across all of our practices.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

And as I said before, medium to long term, we should expect headcount growth to be roughly in line with revenue growth. So that positioning hasn't changed. So hopefully, I addressed the headcount point there, Andrew. Moving on to the talent investments. As Chad highlighted, the talent outlays were both for new talent acquisitions and retention.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Retention or maintenance payments for talent is nothing new. I know it's getting a little more airtime because of some of the disruptions in the broader industry. But relative to our expectations, as we enter 2025 or we look at longer term for maintenance capital, what we incurred in Q1 is not that far different than what our ex ante expectations were. So I'm pleased that our colleagues are choosing to stay at CRA because they have plenty of opportunities. And it's our job as leaders to make sure this environment is one that they want to stay and prosper at.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

So yes, there was maintenance capital, but it wasn't that dissimilar from ex ante expectations, Andrew.

Andrew Nicholas
Equity Research Analyst at William Blair

Very helpful. Thanks, Paul.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Thank you.

Operator

Our next question comes from Mark Riddick with Sidoti and Company. Please proceed with your question.

Marc Riddick
Business Services Analyst at Sidoti & Company, LLC

Good morning.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Good morning, Mark.

Marc Riddick
Business Services Analyst at Sidoti & Company, LLC

So congratulations on a nice strong start to the year. I was sort of curious as to it's interesting that you mentioned the cadence of sort of how things built through the months. I was wondering if was there anything that you could tie the external headlines to within any of the practices that were sort of a noticeable trigger? Or do you get the sense that these were just general opportunities that you were already working on that just sort of maybe came to fruition a little bit more aggressively toward the back half of the quarter?

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Sure. I really wish I could discreetly tie cause and effect here, but there's been so many causes right now in our macro and geopolitical environments here. And that the pace of the hits to our economy, the global economy have been pretty consistent through the quarter. So I can't necessarily say it's related A or related to B. You overlay to that, there's also been some shocks to our industry in which we operate in.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

So to say it is directly tied to one or another, I'm not prepared to do that. I think the one thing that's clear, to me at least, all of these impacts create uncertainty. And sometimes uncertainty causes a pause in our clients moving forward with matters, in our clients announcing mergers, in our clients pursuing strategic advice. So I'm happy to say that we are just building from the slow start to January and hopefully that trend continues forward, but no direct tie to any particular announcement.

Marc Riddick
Business Services Analyst at Sidoti & Company, LLC

Okay. And then I was sort of curious as to whether or not you're seeing much in the way of any particular industry verticals, client industry verticals that are a little more active recently or if there's any that anything that stands out to you currently?

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

No. No. Again, I'm I'm real happy that I had all parts of the portfolio were growing, from legal regulatory is expanding, management consulting is expanding, North America, international. And are they expanding at the same rate? No, they're not.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

But the fact is they never expand at identical rates. That's why we have a portfolio and that's also why we've been able to deliver, if I do say so myself, the excellence in financial results, for such an extended period of time. It's the portfolio works. So I'm probably, if I'm taking away one of the things I'm most proud of is the fact that the contributions are coming from all parts of the organization.

Marc Riddick
Business Services Analyst at Sidoti & Company, LLC

It's certainly encouraging. Then I was sort of curious as to whether or not you're seeing much in the way of them. We get commentary and headlines around the sort of return to office, pacings and thoughts. And I was wondering if you're seeing much in the way of that, both, I guess, maybe internally for your own company, but I guess maybe more broadly in your dealings with clients, do you find yourself seeing much in the way of any change there over the last few months?

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

You know, we were doing so well, Mark, on your question until we got to this topic. So I will start with what we're seeing on in the outside world, maybe our clients. All I could really comment there is what I'm reading in the popular press the same as you're reading. I know there's been a little bit of a movement to try to get people back into the office for a whole sorts of reasons. But it's more again, third party consumption here of the data.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

I have no primary information. With respect to CRA, there hasn't been any kind of significant shift both in terms of management asks of our colleagues or our colleagues participation in the office. If I look on average, my colleagues are in the office little more than three days a week on average. And a lot of times people wanna compare that to a five day a week type average. But the fact is even pre COVID, my colleagues were never in the office five days a week.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Sometimes they're traveling on business, sometimes, they took advantage of the flexibility that exists to work from home, when those conditions are necessary. So comparing three to five is probably not an accurate or a fair comparison. So what I love to see, the in office participation grow a little bit, yes, But that means I need to do a better job making clear of the advantages to my colleagues for being in the office. We don't operate by edict at CRA.

Marc Riddick
Business Services Analyst at Sidoti & Company, LLC

Excellent. Thank you very much.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Thank you, Mark.

Operator

Our next question comes from Kevin Steinke with Barrington Research. Please proceed with your question.

Kevin Steinke
Managing Director at Barrington Research Associates

Hey, good morning, Paul and Chad.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Hey, Kevin, good morning.

Kevin Steinke
Managing Director at Barrington Research Associates

I want to start off by asking about, I know it was a pretty small action in terms of the restructuring impacting 15 individuals, but maybe any more color on what led to that decision and if there are any specific practice areas affected.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

I'm not gonna get into a lot more detail on geography or the practices affected, namely because a couple things. I wanna respect the impacted individuals with that and the impacts with respect to the practices are not indicative of the general health of those practices. So I don't want the narrative to get away from the reality here.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Typically,

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

we are constantly trying to optimize the portfolio. Many times, any kind of actions taken are just running through our GAAP financials. We had enough of issues both creating reductions of profitability and some creating increases of profitability that I wanted to try possible to our shareholders, so they could look at the financial results and gleam what impact it may have on future quarters. That's why we broke it out today. Because as you saw the GAAP financials would actually have been more lucrative in terms of profitability levels than the non GAAP financials.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

I just want to give clarity as to potential expectations going forward on that.

Kevin Steinke
Managing Director at Barrington Research Associates

Okay, thanks. And then I know for antitrust and competition economics for that practice, a lot of times headlines around M and A get a lot of the attention and the discussion. But just from some recent headlines related to the tech sector, it seems like antitrust activity is still really strong, which I would assume is benefiting you. So maybe just any comments on trends in antitrust demand within that practice?

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Sure. All I can say is bow and give them accolades. I don't know how many times I'm going to have to sit here during a quarterly report and talk about the record levels achieved by this practice, our largest practice. Compared to anything out there in the industry, this practice has been growing. This practice has been providing exceptional services to our clients who come back time and time again for assistance by CRA.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

When it's not merger related activity that may be driving the growth, it is support in various antitrust investigations. So I am regularly at awe. I know I shouldn't be after being at CRA for thirty five years, but the performance of our antitrust and competition economics practice both in North America and abroad has been nothing short of exceptional now for the past decade. So hats off to them. And even when markets appear to be slowing, their strength in that market continues to drive ample demand.

Kevin Steinke
Managing Director at Barrington Research Associates

Great. And lastly, I just wanted to ask about one of the kind of project and client examples you talked about in your prepared remarks. You talked quite a bit about collaboration across practices and across offices. And was just wondering how often that occurs in terms of that collaboration across practices and offices, and maybe if that's kind of a underreported part of the story that we should be thinking about in terms of your ability to collaborate?

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

Sure. No, that's a good question. And I'll take the opportunity to say it is probably underreported. We do not operate with any kind of targets on strategic revenue generation or revenue coming from that cross practice collaboration. Our general position is that practice structures are something for internal organization.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

But when you go to market, it's all about bringing the best talent to bear on your client's particular, engagement. That's why in this report, what we tried to do is call out when the matter is dictating the combination of our talents across geographies and across our practices. And as our world becomes more complicated, some of the opportunities to combine our resources, I think that will grow. So congrats to my colleagues for delivering the best services possible On the geographic collaboration, quite frankly, that has been going on for a long time. We operate in a global labor pool, so individuals regularly work across geographic borders.

Kevin Steinke
Managing Director at Barrington Research Associates

Alright, great, that's helpful. Again, congratulations to the strong start to the year and I'll turn it back over.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

No, thank you, Kevin.

Operator

Have reached the end of the question and answer session. I'd now like to turn the call back over to Paul Malley for closing comments.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

As we wrap up today's call, I have a special point to highlight. In June 1965, CRA formally began operations. Our founders envisioned a company that would bring the developing expertise of academia, especially in the then burgeoning area of quantitative methods and economics to the business world. This vision continues to resonate strongly today as we apply cutting edge quantitative tools and microeconomic analysis to practical business problems. On Monday, June 2, CRA will ring the opening bell for NASDAQ to celebrate the company's sixtieth birthday.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

It'll be a celebration of colleagues past and present. So just a moment to say thank you to my existing colleagues and to the alumni of CRA. I would like to also thank everyone who joined us today. We appreciate your time and interest in CRA and the support you provided the company over the years. We'll be participating in meetings with investors in the coming months and we look forward to updating you on our progress on our second quarter call.

Paul Maleh
Paul Maleh
Chairman, President & CEO at CRA International

That concludes today's call. Thank you everyone.

Operator

This concludes today's conference. You may disconnect your lines at this time and we thank you for your participation.

Executives
    • Chad Holmes
      Chad Holmes
      Executive VP & Chief Corporate Development Officer, Interim CFO & Treasurer
    • Paul Maleh
      Paul Maleh
      Chairman, President & CEO
Analysts
    • Andrew Nicholas
      Equity Research Analyst at William Blair
    • Marc Riddick
      Business Services Analyst at Sidoti & Company, LLC
    • Kevin Steinke
      Managing Director at Barrington Research Associates
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Key Takeaways

  • CRA delivered record quarterly revenue of $181.9 million in Q1 FY25, up 5.9% year-over-year, driven by double-digit growth in energy, finance, intellectual property and life sciences, plus a 20% jump in international revenues.
  • Strong profitability converted top-line growth into all-time highs for non-GAAP net income (+11%), EPS (+13%) and EBITDA (+11%), setting new quarterly records for each metric.
  • Consultant headcount was 947, down 5% year-over-year and flat sequentially, while utilization improved to 76%; lead flow increased 5% and new project originations rose 3% versus Q1 FY24.
  • Management reaffirmed full-year FY25 guidance of $715 million–$725 million in revenue and a 12%–13% non-GAAP EBITDA margin on a constant currency basis, citing healthy pipeline trends despite macro uncertainties.
  • The antitrust and competition economics practice achieved a new quarterly revenue high, highlighted by work for Microsoft in securing UK CMA approval of its OpenAI partnership, and the firm leveraged cross-practice teams on high-stakes investigations and litigation.
AI Generated. May Contain Errors.
Earnings Conference Call
CRA International Q1 2025
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