FTI Consulting (NYSE: FCN) lifts Q2 revenue to $993M as earnings ease
FTI Consulting reported Q2 2026 revenue of $993.5 million, up 5.3% year over year, driven by growth in Corporate Finance, Technology and FLC, partly offset by lower pass-through revenue in Strategic Communications and softer activity in Economic Consulting.
Net income fell 19.4% to $57.8 million and diluted EPS declined to $1.99, as higher direct costs, SG&A and sharply higher interest expense outweighed revenue growth and a lower income tax provision. Adjusted EBITDA decreased 6.4% to $104.5 million, with margin at 10.5% versus 11.8%, while Adjusted EPS edged up to $2.16, reflecting $6.6 million of Extraordinary Litigation-Related Expenses added back.
The company generated operating cash flow of $152.3 million in Q2, up from $55.7 million, lifting Free Cash Flow to $141.0 million. For the first half, operating cash flow was an outflow of $157.7 million. Long-term debt increased to $1.02 billion as the unsecured revolving credit facility was upsized and extended, and $393.2 million was spent on share repurchases in Q2.
Positive
- None.
Negative
- None.
Filing Explained
The completed credit amendment raises borrowing capacity, while repurchases leave 27.7 million shares outstanding at June 30, 2026.
This Form 10-Q is an unaudited interim report for the quarter ended
Under the amended agreement, the revolving credit limit is up to
The repurchase program was increased to
The company also invested
Key Figures
Revenue Q2 2026: $993,464 thousand
Net income Q2 2026: $57,810 thousand
Diluted EPS Q2 2026: $1.99 per share
+5 more
8 metrics
Revenue Q2 2026
$993,464 thousand
Three months ended June 30, 2026 revenues
Net income Q2 2026
$57,810 thousand
Three months ended June 30, 2026 net income
Diluted EPS Q2 2026
$1.99 per share
Earnings per common share — diluted, Q2 2026
Adjusted EBITDA Q2 2026
$104,462 thousand
Adjusted EBITDA for the three months ended June 30, 2026
Net cash from operating activities Q2 2026
$152,294 thousand
Net cash provided by operating activities, three months ended June 30, 2026
Free Cash Flow Q2 2026
$141,027 thousand
Free Cash Flow for the three months ended June 30, 2026
Long-term debt June 30, 2026
$1,019,320 thousand
Long-term debt, net, as of June 30, 2026
Shares repurchased Q2 2026
2,591 thousand shares
Shares of common stock repurchased and retired in Q2 2026
Key Terms
Adjusted EBITDA, Free Cash Flow, tax equity investment, Revolving Credit Facility, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA for the three months ended June 30, 2026 decreased $7.2 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Free Cash Flow financial
"Free Cash Flow was an inflow of $141.0 million and $38.3 million"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
tax equity investment financial
"We entered into a tax equity investment (“TEI”) during the three months ended June 30, 2026."
Revolving Credit Facility financial
"our senior unsecured bank revolving credit facility (the “Revolving Credit Facility”)"
A revolving credit facility is a type of loan that a business can borrow from whenever it needs money, up to a set limit. It’s like having a credit card for companies—allowing them to borrow, pay back, and borrow again as needed, providing flexibility for managing cash flow or funding short-term expenses.
Secured Overnight Financing Rate financial
"bear interest, at the Company’s option, at a rate based on a term or daily Secured Overnight Financing Rate"
A secured overnight financing rate (SOFR) is a daily benchmark interest rate that reflects the cost of borrowing cash overnight using U.S. Treasury securities as collateral. Think of it as the market price to “rent” cash for a day with a very safe pledge, similar to paying a short-term rental fee for money backed by government bonds. Investors track SOFR because it underpins pricing for loans, bonds and derivatives, so movements change borrowing costs, interest income and the valuation of interest-rate–linked positions.
Extraordinary Litigation-Related Expenses financial
"Extraordinary Litigation-Related Expenses represent expenses related to the Company’s litigation"
AI-generated analysis. How Rhea-AI works. Not financial advice.
See more from StockTitan in Google Search and AI answers.
Adds StockTitan as a preferred source · opens Google
FAQ
What were FTI Consulting (FCN) Q2 2026 revenues and year-over-year growth?
FTI Consulting posted Q2 2026 revenues of $993.5 million, a 5.3% increase from $943.7 million in Q2 2025. Growth was led by Corporate Finance, Technology and FLC, while Strategic Communications and Economic Consulting were softer, including lower pass-through revenues.
How did FTI Consulting (FCN) profitability change in Q2 2026?
Q2 2026 net income was $57.8 million, down 19.4% from $71.7 million, with diluted EPS at $1.99 versus $2.13. Adjusted EBITDA fell to $104.5 million from $111.6 million, while Adjusted EPS rose slightly to $2.16, aided by litigation expenses excluded from this measure.
What were FTI Consulting (FCN) Q2 2026 operating cash flow and Free Cash Flow?
Q2 2026 net cash provided by operating activities was $152.3 million, up from $55.7 million a year earlier. After $11.3 million of capital expenditures, Free Cash Flow was $141.0 million, compared with $38.3 million in Q2 2025, reflecting stronger collections and lower tax payments.
How much debt and credit capacity does FTI Consulting (FCN) have after its new agreement?
As of June 30, 2026, long-term debt totaled $1.02 billion, including a $720.0 million Revolving Credit Facility and a $300.0 million Incremental Term Loan. The unsecured revolver’s capacity was increased to $1.5 billion and its maturity extended to June 30, 2031, enhancing available liquidity.
How much stock did FTI Consulting (FCN) repurchase in Q2 2026?
During Q2 2026, the company repurchased and retired 2.591 million shares for $390.9 million excluding commissions and excise tax. Total Q2 payments for repurchases, including excise tax, were $393.2 million. As of June 30, 2026, $344.0 million remained available under the $2.6 billion authorization.
What is FTI Consulting (FCN)’s new tax equity investment and related tax benefit?
FTI Consulting made a $42.1 million tax equity investment in solar energy projects during Q2 2026. As of June 30, 2026, the unamortized balance was $25.2 million, and the company recognized net tax benefits of $7.1 million, including $24.0 million of tax credits and related benefits.
How did key segments perform for FTI Consulting (FCN) in Q2 2026?
Corporate Finance revenue rose to $411.4 million, up 8.5%. FLC grew to $194.3 million, while Economic Consulting slipped to $188.8 million. Technology improved to $99.0 million on strong M&A-related demand, and Strategic Communications reported $100.0 million, with underlying growth excluding pass-through revenue.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-14875
(Exact Name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||
(202 ) 312-9100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at July 23, 2026 | ||||
| Common Stock, $0.01 par value | |||||
FTI CONSULTING, INC. AND SUBSIDIARIES
INDEX
Page | ||||||||
PART I—FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | 3 | ||||||
Condensed Consolidated Balance Sheets—June 30, 2026 and December 31, 2025 | 3 | |||||||
Condensed Consolidated Statements of Comprehensive Income—Three and Six Months Ended June 30, 2026 and 2025 | 4 | |||||||
Condensed Consolidated Statements of Stockholders’ Equity—Three and Six Months Ended June 30, 2026 and 2025 | 5 | |||||||
Condensed Consolidated Statements of Cash Flows—Six Months Ended June 30, 2026 and 2025 | 7 | |||||||
Notes to Condensed Consolidated Financial Statements | 8 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 39 | ||||||
Item 4. | Controls and Procedures | 39 | ||||||
PART II—OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 41 | ||||||
Item 1A. | Risk Factors | 41 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 41 | ||||||
Item 3. | Defaults Upon Senior Securities | 42 | ||||||
Item 4. | Mine Safety Disclosures | 42 | ||||||
Item 5. | Other Information | 42 | ||||||
Item 6. | Exhibits | 43 | ||||||
SIGNATURES | 44 | |||||||
2
PART I—FINANCIAL INFORMATION
FTI Consulting, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except per share data)
| Item 1. | Financial Statements | ||||
| June 30, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Current portion of notes receivable | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease assets | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Notes receivable, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable, accrued expenses and other | $ | $ | |||||||||
| Accrued compensation | |||||||||||
| Billings in excess of services provided | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, net | |||||||||||
| Noncurrent operating lease liabilities | |||||||||||
| Deferred income taxes | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Stockholders’ equity | |||||||||||
Preferred stock, $ outstanding | |||||||||||
Common stock, $ issued and outstanding | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements
3
FTI Consulting, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income
(in thousands, except per share data)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Direct cost of revenues | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Special charges | |||||||||||||||||||||||
| Amortization of intangible assets | |||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest income and other | ( | ( | |||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| ( | ( | ( | ( | ||||||||||||||||||||
| Income before income tax provision | |||||||||||||||||||||||
| Income tax provision | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per common share — basic | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per common share — diluted | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss), net of tax | |||||||||||||||||||||||
Foreign currency translation adjustments, net of tax expense of $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Total other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to condensed consolidated financial statements
4
FTI Consulting, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands)
(Unaudited)
| Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | |||||||||||||||||||||||||||||||||
| Shares | Amount | Total | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | $ | — | $ | — | $ | $ | — | $ | ||||||||||||||||||||||||||
| Other comprehensive loss: | |||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Issuance of common stock in connection with: | |||||||||||||||||||||||||||||||||||
| Exercise of options | — | — | — | ||||||||||||||||||||||||||||||||
Restricted share grants, less net settled shares of | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Purchase and retirement of common stock, including excise tax | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Reclassification of negative additional paid-in capital | — | — | ( | — | |||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | $ | — | $ | — | $ | $ | — | $ | ||||||||||||||||||||||||||
| Other comprehensive loss: | |||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Issuance of common stock in connection with: | |||||||||||||||||||||||||||||||||||
| Exercise of options | — | — | — | ||||||||||||||||||||||||||||||||
Restricted share grants, less net settled shares of | ( | — | — | ( | |||||||||||||||||||||||||||||||
| Purchase and retirement of common stock, including excise tax | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Reclassification of negative additional paid-in capital | — | — | ( | — | |||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
5
| Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | |||||||||||||||||||||||||||||||||
| Shares | Amount | Total | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | $ | — | $ | — | $ | $ | — | $ | ||||||||||||||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock in connection with: | |||||||||||||||||||||||||||||||||||
| Exercise of options | — | — | — | ||||||||||||||||||||||||||||||||
Restricted share grants, less net settled shares of | ( | — | — | ( | |||||||||||||||||||||||||||||||
| Purchase and retirement of common stock, including excise tax | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Reclassification of negative additional paid-in capital | — | — | ( | — | |||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Net income | — | $ | — | $ | — | $ | $ | — | $ | ||||||||||||||||||||||||||
| Other comprehensive income: | |||||||||||||||||||||||||||||||||||
| Cumulative translation adjustment | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock in connection with: | |||||||||||||||||||||||||||||||||||
| Exercise of options | — | — | — | ||||||||||||||||||||||||||||||||
Restricted share grants, less net settled shares of | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Purchase and retirement of common stock, including excise tax | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Reclassification of negative additional paid-in capital | — | — | ( | — | |||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements
6
FTI Consulting, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
| Depreciation of property and equipment | |||||||||||
| Amortization of intangible assets | |||||||||||
| Amortization of notes receivable | |||||||||||
| Amortization of tax equity investment | |||||||||||
| Provision for expected credit losses | |||||||||||
| Share-based compensation | |||||||||||
| Deferred income taxes | |||||||||||
| Other | |||||||||||
| Changes in operating assets and liabilities, net of effects from acquisitions: | |||||||||||
| Accounts receivable, billed and unbilled | ( | ( | |||||||||
| Notes receivable, net of repayments | ( | ( | |||||||||
| Prepaid expenses and other assets | ( | ( | |||||||||
| Accounts payable, accrued expenses and other | ( | ( | |||||||||
| Income taxes | ( | ( | |||||||||
| Accrued compensation | ( | ( | |||||||||
| Billings in excess of services provided | ( | ||||||||||
| Net cash used in operating activities | ( | ( | |||||||||
| Investing activities | |||||||||||
| Purchases of property and equipment and other | ( | ( | |||||||||
| Payment for tax equity investment | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Financing activities | |||||||||||
| Borrowings under revolving line of credit | |||||||||||
| Repayments under revolving line of credit | ( | ( | |||||||||
| Proceeds from issuance of term loan | |||||||||||
| Payments of debt issuance costs | ( | ||||||||||
| Purchase and retirement of common stock, including excise tax | ( | ( | |||||||||
| Share-based compensation tax withholdings | ( | ( | |||||||||
| Deposits and other | ( | ||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
| Net decrease in cash and cash equivalents | ( | ( | |||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
| Supplemental cash flow disclosures | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for income taxes and tax credits, net of refunds | $ | $ | |||||||||
| Non-cash investing and financing activities: | |||||||||||
| Issuance of stock units under incentive compensation plans | $ | $ | |||||||||
| Excise tax on purchase and retirement of common stock | $ | $ | |||||||||
| Non-cash additions to property and equipment | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements
7
FTI Consulting, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(dollar and share amounts in tables in thousands, except per share data)
(Unaudited)
1. Basis of Presentation and Significant Accounting Policies
The unaudited condensed consolidated financial statements of FTI Consulting, Inc., including its consolidated subsidiaries (collectively, the “Company,” “we,” “our” or “FTI Consulting”), presented herein, have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and under the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Some of the information and footnote disclosures normally included in annual financial statements have been condensed or omitted pursuant to those rules and regulations. Certain prior period amounts have been reclassified to conform to the current period presentation. In management’s opinion, the interim financial statements reflect all adjustments that are necessary for a fair presentation of the results for the interim periods presented. All adjustments made were normal recurring accruals. The fair values of all financial instruments are estimated to be equal to their carrying values as of June 30, 2026 and December 31, 2025. Results of operations for the interim periods presented herein are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC.
Note 1 to the Consolidated Financial Statements included in Part II, Item 8, of our Annual Report on Form 10-K for the year ended December 31, 2025 describes the significant accounting policies and methods used in preparation of the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
We entered into a tax equity investment (“TEI”) during the three months ended June 30, 2026. The TEI is structured through limited liability companies that invest in clean energy projects that are eligible to receive energy tax credits. We elected to use the proportional amortization method (“PAM”) for the TEI. Under PAM, an investment is amortized in proportion to the allocation of tax benefits received in each period, and tax benefit amounts, net of amortization expense, are presented within “Income tax provision” on our Condensed Consolidated Statements of Comprehensive Income.
2. New Accounting Standards
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional, disaggregated disclosure around certain income statement expense line items. The amendments in this ASU are effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, although early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software costs by increasing the operability of the recognition guidance to reflect neutrality toward different methods of software development. The amendments in this ASU are effective for annual and interim periods beginning after December 15, 2027 and can be applied prospectively, retrospectively, or with a modified transition approach. Early adoption is permitted. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.
8
3. Earnings per Common Share
Basic earnings per common share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per common share adjusts basic earnings per common share for the effects of potentially dilutive common shares. Potentially dilutive common shares include the dilutive effects of shares issuable upon exercise or vesting of outstanding awards under our equity compensation plans, including stock options and share-based awards (restricted share awards, restricted stock units and performance stock units), each using the treasury stock method.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator — basic and diluted | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Denominator | |||||||||||||||||||||||
Weighted average number of common shares outstanding — basic | |||||||||||||||||||||||
| Effect of dilutive share-based awards and stock options | |||||||||||||||||||||||
Weighted average number of common shares outstanding — diluted | |||||||||||||||||||||||
| Earnings per common share — basic | $ | $ | $ | $ | |||||||||||||||||||
| Earnings per common share — diluted | $ | $ | $ | $ | |||||||||||||||||||
| Antidilutive share-based awards | |||||||||||||||||||||||
4. Revenues
We generate the majority of our revenues by providing consulting services to our clients. Revenues are recognized when we satisfy a performance obligation by transferring services promised in a contract to a customer and in an amount that reflects the consideration that we expect to receive in exchange for those services. Performance obligations in our contracts represent distinct or separate services that we provide to our customers. If, at the outset of an arrangement, we determine that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met.
Revenues recognized during the current period may include revenues from performance obligations satisfied or partially satisfied in prior periods. This primarily occurs when the estimated transaction price has changed based on our current probability assessment over whether the agreed-upon outcome for our performance-based and contingent arrangements will be achieved. The aggregate amount of revenues recognized related to a change in the transaction price in the current period, which related to performance obligations satisfied or partially satisfied in a prior period, was $15.1 million and $14.8 million for the three and six months ended June 30, 2026, respectively, and $13.5 million and $15.9 million for the three and six months ended June 30, 2025, respectively.
Unfulfilled performance obligations primarily consist of fees not yet recognized on certain fixed-fee, performance-based and contingent arrangements. As of June 30, 2026 and December 31, 2025, the aggregate amount of the remaining contract transaction price allocated to unfulfilled performance obligations was $16.1 million and $27.3 million, respectively. We expect to recognize the majority of the related revenues over the next 12
Contract assets are defined as assets for which we have recorded revenues but are not yet entitled to receive our fees because certain events, such as completion of the measurement period or client approval, must occur. The contract asset balance was immaterial as of June 30, 2026 and December 31, 2025.
Contract liabilities are defined as liabilities incurred when we have received consideration but have not yet performed the agreed-upon services. This may occur when clients pay fees before work begins. The contract liability balance was immaterial as of June 30, 2026 and December 31, 2025.
9
5. Accounts Receivable and Allowance for Expected Credit Losses
The following table summarizes the components of “Accounts receivable, net” as presented on the Condensed Consolidated Balance Sheets:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Accounts receivable: | |||||||||||
| Billed receivables | $ | $ | |||||||||
| Unbilled receivables | |||||||||||
| Allowance for expected credit losses | ( | ( | |||||||||
| Accounts receivable, net | $ | $ | |||||||||
The following table summarizes the total provision for expected credit losses and write-offs:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Provision for expected credit losses | $ | $ | $ | $ | |||||||||||||||||||
| Write-offs | $ | $ | $ | $ | |||||||||||||||||||
Our provision for expected credit losses includes recoveries, direct write-offs and charges to other accounts. Billed accounts receivables are written off when the potential for recovery is considered remote.
6. Special Charges
There were no
During the six months ended June 30, 2025, we recorded special charges of $25.3 million related to targeted headcount reductions in each segment and region where we realigned our workforce with current business demand for our consulting services.
The following table details the special charges by segment:
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| Corporate Finance | $ | ||||||||||||||||||||||
| Forensic and Litigation Consulting (“FLC”) | |||||||||||||||||||||||
| Economic Consulting | |||||||||||||||||||||||
| Technology | |||||||||||||||||||||||
| Strategic Communications | |||||||||||||||||||||||
| Segment special charges | |||||||||||||||||||||||
| Unallocated Corporate | |||||||||||||||||||||||
| Total | $ | ||||||||||||||||||||||
10
7. Goodwill and Intangible Assets
Goodwill
The table below summarizes the changes in the carrying amount of goodwill by reportable segment:
Corporate Finance (1) | FLC (1) | Economic Consulting (1) | Technology (1) | Strategic Communications (2) | Total | ||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(1) There were no
(2) Amounts for our Strategic Communications segment include gross carrying values of $311.5 million and $312.7 million as of June 30, 2026 and December 31, 2025, respectively, and accumulated impairment losses of $194.1
Intangible Assets
Intangible assets were as follows:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||
Amortizing intangible assets (1) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Non-amortizing intangible assets (2) | — | — | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
(1) Amortizing intangible assets primarily include customer relationships as of June 30, 2026 and December 31, 2025.
(2) Non-amortizing intangible assets include trademarks as of June 30, 2026 and December 31, 2025.
Intangible assets with finite lives are amortized over their estimated useful lives. We recorded amortization expense of $0.5 million and $1.2 million during the three and six months ended June 30, 2026, respectively, and $1.1 million and $2.1 million during the three and six months ended June 30, 2025, respectively.
8. Debt
On June 30, 2026, we entered into a third amended and restated credit agreement (as amended and restated, the “Credit Agreement”) governing our senior unsecured bank revolving credit facility (the “Revolving Credit Facility”) and our Incremental Term Loan (as defined below), to, among other things, (i) extend the maturity date of the Revolving Credit Facility to June 30, 2031, (ii) increase the revolving line of credit limit from $900.0 million to up to $1.5 billion, with the existing $300.0 million Incremental Term Loan remaining outstanding under the Credit Agreement, and (iii) permit the Company to incur incremental facilities in an aggregate amount of up to (a) the greater of $500.0 million and 100% of consolidated EBITDA, plus (b) an unlimited amount, subject to certain conditions. Our Revolving Credit Facility is unsecured, based on the Company’s investment grade credit rating from S&P Global, with only unsecured guarantees being provided by certain of our material wholly-owned domestic subsidiaries.
On March 17, 2026, we entered into an incremental amendment to our second amended and restated credit agreement (the “Incremental Amendment”) which provides for a term loan in the aggregate amount of $300.0 million (the “Incremental Term Loan”). The Incremental Term Loan matures on March 17, 2029, and requires the Company to pay customary fees and expenses.
We incurred $4.6 million and $5.4 million of debt issuance costs during the three and six months ended June 30, 2026, respectively, associated with the amendment and restatement of the Credit Agreement and the Incremental Amendment.
11
The table below presents the components of our debt:
| June 30, 2026 | December 31, 2025 | ||||||||||
| Revolving Credit Facility | $ | $ | |||||||||
| Incremental Term Loan | |||||||||||
| Total debt | |||||||||||
| Less: deferred debt issuance costs | |||||||||||
Long-term debt, net (1) | $ | $ | |||||||||
(1)There were no
Borrowings under the Revolving Credit Facility and the Incremental Term Loan bear interest, at the Company’s option, at a rate based on a term or daily Secured Overnight Financing Rate (“SOFR”) plus an applicable margin, or a base rate plus an applicable margin. The applicable margins are variable and fluctuate between 1.00 % and 1.625 % per annum based upon the Company’s credit ratings (as defined in the Credit Agreement) at such time or a base rate plus an applicable margin that will fluctuate between 0.00 % and 0.625 % per annum based upon the Company’s credit ratings at such time. The base rate is a fluctuating rate per annum equal to the highest of (1) the Federal Funds rate (as defined in the Credit Agreement) plus 50 basis points, (2) the rate of interest in effect for such day as the prime rate announced by Bank of America, and (3) the one-month Term SOFR plus 100 basis points.
Under the Revolving Credit Facility, we are required to pay a commitment fee rate that fluctuates between 0.125 % and 0.275 % per annum and a letter of credit fee rate that fluctuates between 1.00 % and 1.625 % per annum, in each case, based upon the Company’s credit ratings.
9. Leases
We lease office space and equipment under non-cancelable operating leases. The table below summarizes the carrying amount of our operating lease assets and liabilities:
| Leases | Classification | June 30, 2026 | December 31, 2025 | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Operating lease assets | Operating lease assets | $ | $ | |||||||||||||||||
| Total lease assets | $ | $ | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Operating lease liabilities | Accounts payable, accrued expenses and other | $ | $ | |||||||||||||||||
| Noncurrent | ||||||||||||||||||||
| Operating lease liabilities | Noncurrent operating lease liabilities | |||||||||||||||||||
| Total lease liabilities | $ | $ | ||||||||||||||||||
The table below summarizes total lease costs:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| Lease Cost | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Operating lease costs | $ | $ | $ | $ | ||||||||||||||||||||||
| Variable lease costs and other | ||||||||||||||||||||||||||
| Total lease cost, net | $ | $ | $ | $ | ||||||||||||||||||||||
12
The maturity analysis below summarizes the remaining future undiscounted cash flows for our operating leases and includes a reconciliation to operating lease liabilities reported on the Condensed Consolidated Balance Sheets:
As of June 30, 2026 | |||||
2026 (remaining) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total future lease payments | |||||
| Less: imputed interest | ( | ||||
| Total | $ | ||||
The table below includes cash paid for our operating lease liabilities, other non-cash information, our weighted average remaining lease term and weighted average discount rate:
| Six Months Ended June 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | |||||||||||||||||||||
| Operating lease assets obtained in exchange for lease liabilities | $ | $ | |||||||||||||||||||||
| Weighted average remaining lease term (years) | |||||||||||||||||||||||
| Operating leases | |||||||||||||||||||||||
| Weighted average discount rate | |||||||||||||||||||||||
Operating leases | % | % | |||||||||||||||||||||
10. Commitments and Contingencies
We are subject to legal actions arising in the ordinary course of business. In management’s opinion, we believe we have adequate legal defenses and/or insurance coverage with respect to the eventuality of such actions. We are not aware of any asserted or unasserted legal proceedings or claims that we believe would have a material adverse effect on our financial condition or our results of operations. During the six months ended June 30, 2025, the Company recorded the impact of proceeds received from legal settlements. These amounts are included as a gain in “Selling, general and administrative (“SG&A”) expenses” on our Condensed Consolidated Statements of Comprehensive Income.
As of June 30, 2026 and December 31, 2025, we were contingently liable under bank guarantees issued in favor of third parties that totaled $18.6 million and $17.5 million, respectively. These bank guarantees primarily support bid and performance obligations and operating leases for office space. The amounts are guaranteed under guarantee facilities totaling $40.7 million and $32.5 million as of June 30, 2026 and December 31, 2025, respectively. We had $22.1 million and $15.0 million available under the guarantee facilities as of June 30, 2026 and December 31, 2025, respectively. These bank guarantees are issued separately from our Revolving Credit Facility and, as a result, do not affect available borrowing capacity under our Revolving Credit Facility.
13
11. Income Taxes
We entered into a TEI of $42.1 million during the three months ended June 30, 2026. The TEI owns projects related to solar energy and produces tax credits under Section 48 and 48E of the Internal Revenue Code. The initial investment is included in “Payment for tax equity investment” on the Condensed Consolidated Statement of Cash Flows. As of June 30, 2026, the remaining unamortized balance of the investment totaled $25.2 million and was included within “Prepaid expenses and other current assets” on our Condensed Consolidated Balance Sheets.
We recognized net tax benefits of $7.1 million related to our tax equity investment during the three months ended June 30, 2026. These recognized net tax benefits were recorded within “Income tax provision” on our Condensed Consolidated Statements of Comprehensive Income. The net tax benefits include tax credits and other income tax benefits of $24.0 million, which were partially offset by amortization expense of $16.9 million during the three months ended June 30, 2026. The amortization expense is presented in “Amortization of tax equity investment” on the Condensed Consolidated Statement of Cash Flows.
12. Share-Based Compensation
We granted equity awards of 199,200 restricted shares, 120,926 restricted stock units and 117,570 performance stock units during the six months ended June 30, 2026, under the FTI Consulting, Inc. 2017 Omnibus Incentive Compensation Plan, as amended, our employee equity compensation plan. Our performance stock units are presented at the maximum potential payout percentage of target shares granted. These awards are recorded as equity on the Condensed Consolidated Balance Sheets. During the six months ended June 30, 2026, 6,155 shares of restricted stock and 11,737 restricted stock units were forfeited prior to the completion of the applicable vesting requirements. Additionally, 42,132 performance stock units were forfeited during the six months ended June 30, 2026, including award targets that were not achieved.
Total share-based compensation expense, net of forfeitures, is detailed in the following table:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| Income Statement Classification | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Direct cost of revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||
| Total share-based compensation expense | $ | $ | $ | $ | ||||||||||||||||||||||
13. Stockholders’ Equity
Stock Repurchase Program
On June 2, 2016, our Board of Directors authorized a stock repurchase program (the “Repurchase Program”), which was most recently increased by $370.0 million to an aggregate authorization of $2.6 billion on June 3, 2026. No time limit has been established for the completion of the Repurchase Program, and the Repurchase Program may be suspended, discontinued or replaced by the Board of Directors at any time without prior notice. As of June 30, 2026, we had $344.0 million available under the Repurchase Program to repurchase additional shares of our common stock.
The following table details our stock repurchases under the Repurchase Program:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Shares of common stock repurchased and retired | ||||||||||||||||||||||||||
Average price paid per share (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Total cost (1) | $ | $ | $ | $ | ||||||||||||||||||||||
(1) Excludes commissions and excise tax of $3.8 million and $5.2 million incurred during the three and six months ended June 30, 2026, respectively, and $3.3 million and $4.8 million for the three and six months ended June 30, 2025, respectively.
As we repurchase our common shares, we reduce stated capital on our Condensed Consolidated Balance Sheets for the $0.01
14
Common Stock Outstanding
Common stock outstanding was approximately 27.7 million shares and 30.9 million shares as of June 30, 2026 and December 31, 2025, respectively. Common stock outstanding includes unvested restricted stock awards, which are considered issued and outstanding under the terms of the restricted stock award agreements. The decrease in common stock outstanding was primarily due to stock repurchases under the Repurchase Program during the six months ended June 30, 2026.
14. Segment Reporting
We manage our business in five reportable segments: Corporate Finance, FLC, Economic Consulting, Technology and Strategic Communications.
Our Corporate Finance segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, and other financing sources and creditor groups, governments and other interested parties. We deliver a wide range of services centered around three core offerings: Transactions, Transformation and Turnaround & Restructuring.
Our FLC segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services across risk & investigations and disputes, supported by our data & analytics technology-enabled solutions, with a focus on highly regulated industries. Our services are centered around five core offerings: Construction, Projects & Assets and Environmental Solutions, Data & Analytics, Dispute Advisory Services, Healthcare Risk Management & Advisory and Risk & Investigations, which includes our cybersecurity and financial services-related offerings.
Our Economic Consulting segment, including subsidiary Compass Lexecon LLC, provides law firms, companies, government entities and other interested parties with analyses of complex economic issues for use in international arbitration, legal and regulatory proceedings and strategic decision making and public policy debates around the world. We deliver a wide range of services centered around three core offerings: Antitrust & Competition Economics, Financial Economics and International Arbitration.
Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk management, artificial intelligence (“AI”) and data services. Our professionals help organizations better address risk as the growing volume and variety of enterprise and emerging data intersects with legal, regulatory and compliance needs. We deliver a wide range of expert and AI-powered solutions driven by five core client needs: Blockchain & Digital Assets, Information Governance, Privacy & Security, Investigations, Litigation, and M&A, Antitrust and Competition.
Our Strategic Communications segment develops and executes communications strategies to help management teams, boards of directors, law firms, governments and regulators manage change and mitigate risk surrounding transformational and disruptive events, including crises, transactions, investigations, disputes, regulation and legislation. We deliver a wide range of services centered around three core offerings: Corporate Reputation, Financial Communications and Public Affairs.
We have considered information that is regularly provided to our Chief Executive Officer, who is our chief operating decision maker (“CODM”), for our segment reporting disclosure. Our CODM assesses the performance and allocates resources to each segment based on revenues and multiple measures of segment profit, including gross profit, which is the measure closest to GAAP reporting principles. Gross profit is defined as revenues less direct costs of revenues. Our CODM uses gross profit (i) to evaluate reportable segment performance against budgets, forecasts and strategies and (ii) to make strategic decisions regarding resource allocation, such as billable headcount and related compensation costs, as well as utilization and bill rates of our service offerings. Our CODM is not provided asset information by reportable segment.
15
The tables below summarize revenues, significant expenses and gross profit by reportable segment:
| Three Months Ended June 30, 2026 | Corporate Finance | FLC | Economic Consulting | Technology | Strategic Communications | Total | ||||||||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Direct costs | ||||||||||||||||||||||||||||||||||||||
Compensation expenses (1) | ||||||||||||||||||||||||||||||||||||||
Other segment items (2) | ||||||||||||||||||||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | Corporate Finance | FLC | Economic Consulting | Technology | Strategic Communications | Total | ||||||||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Direct costs | ||||||||||||||||||||||||||||||||||||||
Compensation expenses (1) | ||||||||||||||||||||||||||||||||||||||
Other segment items (2) | ||||||||||||||||||||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2025 | Corporate Finance | FLC | Economic Consulting | Technology | Strategic Communications | Total | ||||||||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Direct costs | ||||||||||||||||||||||||||||||||||||||
Compensation expenses (1) | ||||||||||||||||||||||||||||||||||||||
Other segment items (2) | ||||||||||||||||||||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | Corporate Finance | FLC | Economic Consulting | Technology | Strategic Communications | Total | ||||||||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Direct costs | ||||||||||||||||||||||||||||||||||||||
Compensation expenses (1) | ||||||||||||||||||||||||||||||||||||||
Other segment items (2) | ||||||||||||||||||||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
(1)The significant expense category and amounts align with the segment-level information that is regularly provided to the CODM.
(2)Other segment items include expenses for contractor fees and other costs. In our Technology segment, other segment items also include expenses related to software, licensing, data storage and depreciation.
16
The table below reconciles income before income tax provision to total segment gross profit:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Income before income tax provision | $ | $ | $ | $ | ||||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||
| Interest income and other | ( | ( | ||||||||||||||||||||||||
| Amortization of intangibles | ||||||||||||||||||||||||||
| Special charges | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||
| Total segment gross profit | $ | $ | $ | $ | ||||||||||||||||||||||
17
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
The following is a discussion and analysis of our consolidated financial condition, results of operations, and liquidity and capital resources for the three and six months ended June 30, 2026 and 2025, and significant factors that could affect our prospective financial condition and results of operations. This discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes and with our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”). In addition to historical information, the following discussion includes forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations and intentions. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, these expectations or any of the forward-looking statements could prove to be incorrect, and actual results could differ materially from those projected or assumed in the forward-looking statements.
BUSINESS OVERVIEW
FTI Consulting, Inc., including its consolidated subsidiaries (collectively, the “Company,” “we,” “our” or “FTI Consulting”) is a leading global expert firm for organizations facing crisis and transformation. Individually, each of our segments and practices is staffed with experts recognized for the depth of their knowledge and a track record of making an impact.
We report financial results for the following five reportable segments:
Our Corporate Finance segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, and other financing sources and creditor groups, governments and other interested parties. We deliver a wide range of services centered around three core offerings: Transactions, Transformation and Turnaround & Restructuring.
Our Forensic and Litigation Consulting (“FLC”) segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services across risk & investigations and disputes, supported by our data & analytics technology-enabled solutions, with a focus on highly regulated industries. Our services are centered around five core offerings: Construction, Projects & Assets and Environmental Solutions, Data & Analytics, Dispute Advisory Services, Healthcare Risk Management & Advisory and Risk & Investigations, which includes our cybersecurity and financial services-related offerings.
Our Economic Consulting segment, including subsidiary Compass Lexecon LLC, provides law firms, companies, government entities and other interested parties with analyses of complex economic issues for use in international arbitration, legal and regulatory proceedings and strategic decision making and public policy debates around the world. We deliver a wide range of services centered around three core offerings: Antitrust & Competition Economics, Financial Economics and International Arbitration.
Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk management, artificial intelligence (“AI”) and data services. Our professionals help organizations better address risk as the growing volume and variety of enterprise and emerging data intersects with legal, regulatory and compliance needs. We deliver a wide range of expert and AI-powered solutions driven by five core client needs: Blockchain & Digital Assets, Information Governance, Privacy & Security, Investigations, Litigation, and M&A, Antitrust and Competition.
Our Strategic Communications segment develops and executes communications strategies to help management teams, boards of directors, law firms, governments and regulators manage change and mitigate risk surrounding transformational and disruptive events, including crises, transactions, investigations, disputes, regulation and legislation. We deliver a wide range of services centered around three core offerings: Corporate Reputation, Financial Communications and Public Affairs.
We derive substantially all of our revenues from providing professional services to both U.S. and international clients. Most of our services are rendered under time and expense contract arrangements, which require the client to pay us based on the number of hours worked at contractually agreed-upon rates. Under this arrangement, we typically bill our clients for reimbursable expenses, including those relating to travel, out-of-pocket expenses, outside consultants and other outside service costs. Certain contracts are rendered under fixed-fee arrangements, which require the client to pay a fixed-fee in exchange for a predetermined set of professional services. Fixed-fee arrangements may require certain clients to pay us a recurring retainer. Our contract arrangements may also contain success fees or performance-based arrangements in which our fees are based on the attainment of contractually defined objectives with our client. This type of success fee may supplement a time and expense or fixed-fee arrangement. Success fees and other contractual terms may cause variations in our revenues and operating results due
18
to the timing of when achieving the performance-based criteria becomes probable. Seasonal factors, such as the timing of our employees’ and clients’ vacations and holidays, may impact the timing of our revenue recognition across our segments.
In our Technology segment, certain clients are billed based on the amount of data storage used or the volume of information processed. Unit-based revenues are defined as revenues billed on a per item, per page or another unit-based method and include revenues from data processing and hosting. Unit-based revenues include revenues associated with licensed software products made available to customers via a web browser (“on-demand”). On-demand revenues are charged on a unit or monthly basis and include, but are not limited to, processing and review related functions.
Our financial results are primarily driven by:
•the number, size and type of engagements we secure;
•the number of billable professionals;
•the utilization rates of the billable professionals we employ;
•the rate per hour or fixed charges we charge our clients for services;
•the timing of revenue recognition;
•the length of the billing and collection cycles; and
•the geographic locations of our clients or locations in which services are rendered.
We define acquisition growth as revenues of acquired companies in the first 12 months following the effective date of an acquisition. When significant, we identify the impact of acquisition-related revenue growth.
When significant, we identify the estimated impact of foreign currency (“FX”) driven by our businesses with functional currencies other than the U.S. dollar (“USD”). The estimated impact of FX on the period-to-period performance results is calculated as the difference between the prior period results multiplied by the average FX exchange rates to USD in the current period and the prior period results, multiplied by the average FX exchange rates to USD in the prior period.
Non-GAAP Financial Measures
In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). Certain of these financial measures are considered not in conformity with GAAP (“non-GAAP financial measures”) under the SEC rules. Specifically, we have referred to the following non-GAAP financial measures:
•Total Segment Operating Income
•Adjusted Segment EBITDA
•Total Adjusted Segment EBITDA
•Adjusted EBITDA
•Adjusted EBITDA Margin
•Adjusted Net Income
•Adjusted Earnings per Diluted Share
•Free Cash Flow
We have included the definition of Segment Operating Income, which is a GAAP financial measure, below in order to more fully define the components of certain non-GAAP financial measures in the accompanying analysis of financial information.
We define Segment Operating Income as a segment’s share of consolidated operating income. We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment
19
EBITDA, which is a non-GAAP financial measure. We define Adjusted Segment EBITDA as Segment Operating Income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects core operating performance and provides an indicator of the segment’s ability to generate cash. We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses.
We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business, losses on early extinguishment of debt and Extraordinary Litigation-Related Expenses (as defined below). We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. Many of our competitors use common alternative measures of operating performance. Non-GAAP financial measures are used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that our non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with useful supplemental information.
We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income and earnings per diluted share (“EPS”), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, the gain or loss on sale of a business, losses on early extinguishment of debt and Extraordinary Litigation-Related Expenses (as defined below). We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with useful supplemental information on our business operating results, including underlying trends.
We define Free Cash Flow, which is a non-GAAP financial measure, as net cash used in operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with useful supplemental information on the Company’s ability to generate cash for ongoing business operations and capital deployment.
“Extraordinary Litigation-Related Expenses” represent expenses related to the Company’s litigation in the case captioned FTI Consulting, Inc. et al., v. Jonathan M. Orszag et al., 8:23-cv-03200-BAH-AAQ (D.Md.) (together with ancillary proceedings, “FTI vs. Orszag, et al”). In May 2026, the United States District Court for the District of Maryland (the “Court”) allowed the Company to file a third amended complaint to an existing proceeding against Jonathan Orszag, adding Econic Partners LLC, a competitor of the Company, and Dr. Mark Israel, a former Company employee, as defendants. The third amended complaint also added additional claims, including for theft of Company trade secrets and conspiracy to unlawfully compete. This litigation was originally filed in November 2023 against Mr. Orszag, a former Company employee, to enforce the terms of his employment agreement. As a result of the Court’s allowance of the third amended complaint, in the Company’s judgment, beginning in the second quarter of 2026, FTI vs Orszag, et al became non-recurring and outside of the ordinary course of business based on the following considerations: (i) the magnitude of the proceedings, (ii) the complexity of the proceedings, (iii) the counterparties involved and (iv) the Company’s overall litigation strategy. No non-GAAP financial measures for prior periods presented have been adjusted for litigation expenses related to FTI vs. Orszag, et al because the proceedings did not become extraordinary until the second quarter of 2026.
Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included elsewhere in this report.
20
EXECUTIVE HIGHLIGHTS
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (dollar amounts in thousands, except per share data) | (dollar amounts in thousands, except per share data) | ||||||||||||||||||||||
| Revenues | $ | 993,464 | $ | 943,662 | $ | 1,976,809 | $ | 1,841,944 | |||||||||||||||
Special charges (1) | $ | — | $ | — | $ | — | $ | 25,295 | |||||||||||||||
| Net income | $ | 57,810 | $ | 71,698 | $ | 115,441 | $ | 133,522 | |||||||||||||||
| Adjusted EBITDA | $ | 104,462 | $ | 111,640 | $ | 201,280 | $ | 226,804 | |||||||||||||||
| EPS | $ | 1.99 | $ | 2.13 | $ | 3.89 | $ | 3.87 | |||||||||||||||
| Adjusted EPS | $ | 2.16 | $ | 2.13 | $ | 4.06 | $ | 4.43 | |||||||||||||||
| Net cash provided by (used in) operating activities | $ | 152,294 | $ | 55,693 | $ | (157,729) | $ | (409,517) | |||||||||||||||
| Total number of employees | 8,124 | 7,907 | 8,124 | 7,907 | |||||||||||||||||||
(1)Excluded from non-GAAP financial measures, including Adjusted EBITDA and Adjusted EPS.
Second Quarter 2026 Executive Highlights
Revenues
Revenues for the three months ended June 30, 2026 increased $49.8 million, or 5.3%, compared to the three months ended June 30, 2025, primarily due to higher revenues in our Corporate Finance, Technology and FLC segments, which was partially offset by a $9.2 million decline in pass-through revenues.
Net income
Net income for the three months ended June 30, 2026 decreased $13.9 million, or 19.4%, compared to the three months ended June 30, 2025. The decrease in net income was primarily due to higher direct costs, selling, general and administrative (“SG&A”) expenses and interest expense, which was partially offset by the increase in revenues and a lower income tax provision compared to the same quarter in the prior year.
Adjusted EBITDA
Adjusted EBITDA for the three months ended June 30, 2026 decreased $7.2 million, or 6.4%, compared to the three months ended June 30, 2025. Adjusted EBITDA Margin of 10.5% for the three months ended June 30, 2026 compared to 11.8% for the three months ended June 30, 2025. The decrease in Adjusted EBITDA was primarily due to higher direct costs and SG&A expenses, excluding $6.6 million of Extraordinary Litigation-Related Expenses during the three months ended June 30, 2026, which was partially offset by the increase in revenues compared to the same quarter in the prior year.
EPS and Adjusted EPS
EPS for the three months ended June 30, 2026 decreased $0.14 to $1.99 compared to $2.13 for the three months ended June 30, 2025. The decrease in EPS was primarily due to the decrease in net income as described above, which was partially offset by the favorable impact of lower weighted average shares outstanding.
Adjusted EPS for the three months ended June 30, 2026 increased $0.03 to $2.16 compared to $2.13 for the three months ended June 30, 2025. Adjusted EPS for the three months ended June 30, 2026 excludes the $6.6 million of Extraordinary Litigation-Related Expenses, which increased Adjusted EPS by $0.17. Adjusted EPS was equal to EPS for the three months ended June 30, 2025.
Liquidity and Capital Allocation
Net cash provided by operating activities for the three months ended June 30, 2026 increased $96.6 million, or 173.5%, to $152.3 million compared to $55.7 million for the three months ended June 30, 2025. The increase in net cash provided by operating activities was primarily due to higher cash collections and decreases in forgivable loan issuances and income tax payments, which was partially offset by an increase in operating expense and compensation payments. Days sales outstanding (“DSO”) of 99 days at June 30, 2026 compared to 100 days at June 30, 2025.
21
Free Cash Flow was an inflow of $141.0 million and $38.3 million for the three months ended June 30, 2026 and 2025, respectively. The increase in Free Cash Flow was primarily due to higher net cash provided by operating activities, as described above.
During the three months ended June 30, 2026, we made $393.2 million in payments for common stock repurchases, including excise tax, under the Repurchase Program.
Headcount
The following table includes the net headcount additions (reductions) by segment and in total for the six months ended June 30, 2026.
| Billable Headcount | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate Finance | FLC | Economic Consulting | Technology | Strategic Communications | Total | Non-Billable Headcount | Total Headcount | |||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | 2,297 | 1,541 | 1,014 | 662 | 907 | 6,421 | 1,697 | 8,118 | ||||||||||||||||||||||||||||||||||||||||||
| Additions (reductions), net | 45 | 2 | (14) | 3 | 10 | 46 | 6 | 52 | ||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | 2,342 | 1,543 | 1,000 | 665 | 917 | 6,467 | 1,703 | 8,170 | ||||||||||||||||||||||||||||||||||||||||||
| Additions (reductions), net | 16 | (16) | (30) | (24) | (4) | (58) | 12 | (46) | ||||||||||||||||||||||||||||||||||||||||||
| June 30, 2026 | 2,358 | 1,527 | 970 | 641 | 913 | 6,409 | 1,715 | 8,124 | ||||||||||||||||||||||||||||||||||||||||||
| Percentage change in headcount from December 31, 2025 | 2.7% | (0.9)% | (4.3)% | (3.2)% | 0.7% | (0.2)% | 1.1% | 0.1% | ||||||||||||||||||||||||||||||||||||||||||
RESULTS OF OPERATIONS
Segment and Consolidated Operating Results:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands, except per share data) | (in thousands, except per share data) | ||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Corporate Finance | $ | 411,399 | $ | 379,239 | $ | 820,901 | $ | 722,884 | |||||||||||||||
| FLC | 194,254 | 186,517 | 387,132 | 377,119 | |||||||||||||||||||
| Economic Consulting | 188,812 | 191,657 | 364,460 | 371,518 | |||||||||||||||||||
| Technology | 99,017 | 83,599 | 201,340 | 180,755 | |||||||||||||||||||
| Strategic Communications | 99,982 | 102,650 | 202,976 | 189,668 | |||||||||||||||||||
| Total revenues | $ | 993,464 | $ | 943,662 | $ | 1,976,809 | $ | 1,841,944 | |||||||||||||||
| Segment operating income | |||||||||||||||||||||||
| Corporate Finance | $ | 82,475 | $ | 78,128 | $ | 167,705 | $ | 119,078 | |||||||||||||||
| FLC | 29,215 | 29,071 | 52,300 | 59,177 | |||||||||||||||||||
| Economic Consulting | 7,444 | 12,807 | 113 | 24,896 | |||||||||||||||||||
| Technology | 4,813 | 1,560 | 12,516 | 8,154 | |||||||||||||||||||
| Strategic Communications | 17,390 | 17,474 | 38,228 | 26,199 | |||||||||||||||||||
| Total segment operating income | 141,337 | 139,040 | 270,862 | 237,504 | |||||||||||||||||||
| Unallocated corporate expenses | (56,316) | (39,776) | (101,924) | (59,533) | |||||||||||||||||||
| Operating income | 85,021 | 99,264 | 168,938 | 177,971 | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Interest income and other | (401) | (2,068) | 673 | 774 | |||||||||||||||||||
| Interest expense | (11,630) | (5,257) | (18,075) | (6,225) | |||||||||||||||||||
| (12,031) | (7,325) | (17,402) | (5,451) | ||||||||||||||||||||
| Income before income tax provision | 72,990 | 91,939 | 151,536 | 172,520 | |||||||||||||||||||
| Income tax provision | 15,180 | 20,241 | 36,095 | 38,998 | |||||||||||||||||||
| Net income | $ | 57,810 | $ | 71,698 | $ | 115,441 | $ | 133,522 | |||||||||||||||
| Earnings per common share — basic | $ | 2.01 | $ | 2.16 | $ | 3.93 | $ | 3.91 | |||||||||||||||
| Earnings per common share — diluted | $ | 1.99 | $ | 2.13 | $ | 3.89 | $ | 3.87 | |||||||||||||||
22
Reconciliation of Net Income to Adjusted EBITDA:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||||||||||
| Net income | $ | 57,810 | $ | 71,698 | $ | 115,441 | $ | 133,522 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax provision | 15,180 | 20,241 | 36,095 | 38,998 | |||||||||||||||||||
| Interest income and other | 401 | 2,068 | (673) | (774) | |||||||||||||||||||
| Interest expense | 11,630 | 5,257 | 18,075 | 6,225 | |||||||||||||||||||
| Depreciation of property and equipment | 12,279 | 11,323 | 24,568 | 21,468 | |||||||||||||||||||
| Amortization of intangible assets | 539 | 1,053 | 1,151 | 2,070 | |||||||||||||||||||
| Special charges | — | — | — | 25,295 | |||||||||||||||||||
Extraordinary Litigation-Related Expenses (1) | 6,623 | — | 6,623 | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 104,462 | $ | 111,640 | $ | 201,280 | $ | 226,804 | |||||||||||||||
(1)Refer to “Non-GAAP Financial Measures” in Part I, Item 2 of this Quarterly Report on Form 10-Q for our definition of “Extraordinary Litigation-Related Expenses”.
Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands, except per share data) | (in thousands, except per share data) | ||||||||||||||||||||||
| Net income | $ | 57,810 | $ | 71,698 | $ | 115,441 | $ | 133,522 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Special charges | — | — | — | 25,295 | |||||||||||||||||||
| Tax impact of special charges | — | — | — | (5,799) | |||||||||||||||||||
Extraordinary Litigation-Related Expenses (1) | 6,623 | — | 6,623 | — | |||||||||||||||||||
Tax impact of Extraordinary Litigation-Related Expenses (1) | (1,694) | — | (1,694) | — | |||||||||||||||||||
| Adjusted Net Income | $ | 62,739 | $ | 71,698 | $ | 120,370 | $ | 153,018 | |||||||||||||||
| EPS | $ | 1.99 | $ | 2.13 | $ | 3.89 | $ | 3.87 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Special charges | — | — | — | 0.73 | |||||||||||||||||||
| Tax impact of special charges | — | — | — | (0.17) | |||||||||||||||||||
Extraordinary Litigation-Related Expenses (1) | 0.23 | — | 0.23 | — | |||||||||||||||||||
Tax impact of Extraordinary Litigation-Related Expenses (1) | (0.06) | — | (0.06) | — | |||||||||||||||||||
| Adjusted EPS | $ | 2.16 | $ | 2.13 | $ | 4.06 | $ | 4.43 | |||||||||||||||
| Weighted average number of common shares outstanding — diluted | 29,038 | 33,591 | 29,680 | 34,541 | |||||||||||||||||||
(1)Refer to “Non-GAAP Financial Measures” in Part I, Item 2 of this Quarterly Report on Form 10-Q for our definition of “Extraordinary Litigation-Related Expenses”.
23
Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 152,294 | $ | 55,693 | $ | (157,729) | $ | (409,517) | |||||||||||||||
| Purchases of property and equipment | (11,267) | (17,425) | (21,885) | (35,228) | |||||||||||||||||||
| Free Cash Flow | $ | 141,027 | $ | 38,268 | $ | (179,614) | $ | (444,745) | |||||||||||||||
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Revenues and operating income
See “Segment Results” for an expanded discussion of revenues, gross profit and SG&A expenses.
Unallocated corporate expenses
Unallocated corporate expenses increased $16.5 million, or 41.6%, to $56.3 million compared to $39.8 million for the three months ended June 30, 2025, primarily due to $6.6 million in Extraordinary Litigation-Related Expenses, an increase in expenses related to our All SMD meeting, which did not occur in 2025, and higher compensation expenses.
Interest income and other
Interest income and other, which includes FX gains and losses, increased $1.7 million to a $0.4 million loss for the three months ended June 30, 2026 compared to a $2.1 million loss for the three months ended June 30, 2025, primarily due to a $1.5 million decrease in FX remeasurement losses compared to the same quarter in the prior year.
FX gains and losses, both realized and unrealized, relate to the remeasurement or settlement of monetary assets and liabilities that are denominated in a currency other than an entity’s functional currency. These monetary assets and liabilities include cash, as well as third-party and intercompany receivables and payables.
Interest expense
Interest expense increased $6.4 million, or 121.2%, to $11.6 million for the three months ended June 30, 2026 compared to $5.3 million for the three months ended June 30, 2025, primarily due to higher borrowings on the $300.0 million term loan under our Credit Agreement (the "Incremental Term Loan") and our senior unsecured bank revolving credit facility (the “Revolving Credit Facility”).
Income tax provision
Our income tax provision decreased $5.1 million, or 25.0%, to $15.2 million for the three months ended June 30, 2026 compared to $20.2 million for the three months ended June 30, 2025. Our effective tax rate of 20.8% for the three months ended June 30, 2026 compared to 22.0% for the three months ended June 30, 2025. The decrease in the income tax provision was due to both a decrease in income before income tax provision and a lower effective tax rate. The lower effective tax rate was primarily due to the net tax benefits associated with our tax equity investment, which was partially offset by an unfavorable impact from share-based compensation and an increase in the valuation allowance recorded against current period losses as compared to the three months ended June 30, 2025.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Revenues and operating income
See “Segment Results” for an expanded discussion of revenues, gross profit and SG&A expenses.
Unallocated corporate expenses
Unallocated corporate expenses increased $42.4 million, or 71.2%, to $101.9 million compared to $59.5 million for the six months ended June 30, 2025, primarily due to a legal settlement gain recorded during the six months ended June 30, 2025 that did not recur, higher compensation expenses, $6.6 million in Extraordinary Litigation-Related Expenses incurred during the three months ended June 30, 2026, and higher expenses related to our All SMD meeting, which did not occur in 2025.
24
Interest income and other
Interest income and other, which includes FX gains and losses, decreased $0.1 million to a $0.7 million gain for the six months ended June 30, 2026 compared to a $0.8 million gain for the six months ended June 30, 2025, primarily due to a $3.0 million decrease in interest income, which was partially offset by a $2.8 million decrease in FX remeasurement losses compared to the same period in the prior year.
Interest expense
Interest expense increased $11.9 million, or 190.4%, to $18.1 million for the six months ended June 30, 2026 compared to $6.2 million for the six months ended June 30, 2025, primarily due to higher borrowings on our Revolving Credit Facility and Incremental Term Loan.
Income tax provision
Our income tax provision decreased $2.9 million, or 7.4%, to $36.1 million for the six months ended June 30, 2026 compared to $39.0 million for the six months ended June 30, 2025. Our effective tax rate of 23.8% for the six months ended June 30, 2026 compared to 22.6% for the six months ended June 30, 2025. The decrease in the income tax provision was primarily due to a decrease in income before income tax provision, which was partially offset by an increase in the effective tax rate. The higher effective tax rate was primarily due to an unfavorable impact from share-based compensation and an increase in the valuation allowance recorded against current period losses, which was partially offset by the net tax benefits related to our tax equity investment, as compared to the six months ended June 30, 2025.
SEGMENT RESULTS
Adjusted Segment EBITDA
We evaluate the performance of each of our operating segments based on multiple measures of segment profit, including Adjusted Segment EBITDA, which is a non-GAAP financial measure. The following tables reconcile Segment Operating Income to Adjusted Segment EBITDA for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended June 30, 2026 | Corporate Finance | FLC | Economic Consulting | Technology | Strategic Communications | Unallocated Corporate | Total | |||||||||||||||||||||||||||||||||||||
| Net income | $ | 57,810 | ||||||||||||||||||||||||||||||||||||||||||
| Interest income and other | 401 | |||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 11,630 | |||||||||||||||||||||||||||||||||||||||||||
| Income tax provision | 15,180 | |||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 82,475 | $ | 29,215 | $ | 7,444 | $ | 4,813 | $ | 17,390 | $ | (56,316) | $ | 85,021 | ||||||||||||||||||||||||||||||
| Depreciation of property and equipment | 3,208 | 1,949 | 1,360 | 4,237 | 1,038 | 487 | 12,279 | |||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 280 | 190 | — | — | 69 | — | 539 | |||||||||||||||||||||||||||||||||||||
Extraordinary Litigation-Related Expenses (1) | — | — | — | — | — | 6,623 | 6,623 | |||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 85,963 | $ | 31,354 | $ | 8,804 | $ | 9,050 | $ | 18,497 | $ | (49,206) | $ | 104,462 | ||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | Corporate Finance | FLC | Economic Consulting | Technology | Strategic Communications | Unallocated Corporate | Total | |||||||||||||||||||||||||||||||||||||
| Net income | $ | 115,441 | ||||||||||||||||||||||||||||||||||||||||||
| Interest income and other | (673) | |||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 18,075 | |||||||||||||||||||||||||||||||||||||||||||
| Income tax provision | 36,095 | |||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 167,705 | $ | 52,300 | $ | 113 | $ | 12,516 | $ | 38,228 | $ | (101,924) | $ | 168,938 | ||||||||||||||||||||||||||||||
| Depreciation of property and equipment | 6,313 | 3,899 | 2,809 | 8,367 | 2,022 | 1,158 | 24,568 | |||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 595 | 419 | — | — | 137 | — | 1,151 | |||||||||||||||||||||||||||||||||||||
Extraordinary Litigation-Related Expenses (1) | — | — | — | — | — | 6,623 | 6,623 | |||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 174,613 | $ | 56,618 | $ | 2,922 | $ | 20,883 | $ | 40,387 | $ | (94,143) | $ | 201,280 | ||||||||||||||||||||||||||||||
(1)Refer to “Non-GAAP Financial Measures” in Part I, Item 2 of this Quarterly Report on Form 10-Q for our definition of “Extraordinary Litigation-Related Expenses”.
25
| Three Months Ended June 30, 2025 | Corporate Finance | FLC | Economic Consulting | Technology | Strategic Communications | Unallocated Corporate | Total | |||||||||||||||||||||||||||||||||||||
| Net income | $ | 71,698 | ||||||||||||||||||||||||||||||||||||||||||
| Interest income and other | 2,068 | |||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 5,257 | |||||||||||||||||||||||||||||||||||||||||||
| Income tax provision | 20,241 | |||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 78,128 | $ | 29,071 | $ | 12,807 | $ | 1,560 | $ | 17,474 | $ | (39,776) | $ | 99,264 | ||||||||||||||||||||||||||||||
| Depreciation of property and equipment | 2,768 | 1,889 | 1,376 | 3,724 | 938 | 628 | 11,323 | |||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 756 | 228 | — | — | 69 | — | 1,053 | |||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 81,652 | $ | 31,188 | $ | 14,183 | $ | 5,284 | $ | 18,481 | $ | (39,148) | $ | 111,640 | ||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2025 | Corporate Finance | FLC | Economic Consulting | Technology | Strategic Communications | Unallocated Corporate | Total | |||||||||||||||||||||||||||||||||||||
| Net income | $ | 133,522 | ||||||||||||||||||||||||||||||||||||||||||
| Interest income and other | (774) | |||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 6,225 | |||||||||||||||||||||||||||||||||||||||||||
| Income tax provision | 38,998 | |||||||||||||||||||||||||||||||||||||||||||
| Operating income | $ | 119,078 | $ | 59,177 | $ | 24,896 | $ | 8,154 | $ | 26,199 | $ | (59,533) | $ | 177,971 | ||||||||||||||||||||||||||||||
| Depreciation of property and equipment | 5,350 | 3,602 | 2,735 | 6,794 | 1,779 | 1,208 | 21,468 | |||||||||||||||||||||||||||||||||||||
| Amortization of intangible assets | 1,475 | 457 | — | — | 138 | — | 2,070 | |||||||||||||||||||||||||||||||||||||
| Special charges | 11,696 | 5,475 | 983 | 1,928 | 3,268 | 1,945 | 25,295 | |||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 137,599 | $ | 68,711 | $ | 28,614 | $ | 16,876 | $ | 31,384 | $ | (56,380) | $ | 226,804 | ||||||||||||||||||||||||||||||
Total Adjusted Segment EBITDA
We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. The following table reconciles net income to Total Segment Operating Income and Total Adjusted Segment EBITDA for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | (in thousands) | ||||||||||||||||||||||
| Net income | $ | 57,810 | $ | 71,698 | $ | 115,441 | $ | 133,522 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Income tax provision | 15,180 | 20,241 | 36,095 | 38,998 | |||||||||||||||||||
| Interest income and other | 401 | 2,068 | (673) | (774) | |||||||||||||||||||
| Interest expense | 11,630 | 5,257 | 18,075 | 6,225 | |||||||||||||||||||
| Unallocated corporate expenses | 56,316 | 39,776 | 101,924 | 59,533 | |||||||||||||||||||
| Total segment operating income | 141,337 | 139,040 | 270,862 | 237,504 | |||||||||||||||||||
| Add back: | |||||||||||||||||||||||
| Segment depreciation expense | 11,792 | 10,695 | 23,410 | 20,260 | |||||||||||||||||||
| Amortization of intangible assets | 539 | 1,053 | 1,151 | 2,070 | |||||||||||||||||||
| Segment special charges | — | — | — | 23,350 | |||||||||||||||||||
| Total Adjusted Segment EBITDA | $ | 153,668 | $ | 150,788 | $ | 295,423 | $ | 283,184 | |||||||||||||||
26
Other Segment Operating Data
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Number of billable professionals (at period end): | |||||||||||||||||||||||
| Corporate Finance | 2,358 | 2,188 | 2,358 | 2,188 | |||||||||||||||||||
| FLC | 1,527 | 1,482 | 1,527 | 1,482 | |||||||||||||||||||
| Economic Consulting | 970 | 991 | 970 | 991 | |||||||||||||||||||
Technology (1) | 641 | 655 | 641 | 655 | |||||||||||||||||||
| Strategic Communications | 913 | 892 | 913 | 892 | |||||||||||||||||||
| Total billable professionals | 6,409 | 6,208 | 6,409 | 6,208 | |||||||||||||||||||
Utilization rates of billable professionals: (2) | |||||||||||||||||||||||
| Corporate Finance | 59 | % | 61 | % | 60 | % | 59 | % | |||||||||||||||
| FLC | 54 | % | 57 | % | 56 | % | 58 | % | |||||||||||||||
| Economic Consulting | 61 | % | 64 | % | 61 | % | 63 | % | |||||||||||||||
Average billable rate per hour: (3) | |||||||||||||||||||||||
| Corporate Finance | $ | 553 | $ | 532 | $ | 549 | $ | 513 | |||||||||||||||
| FLC | $ | 465 | $ | 439 | $ | 458 | $ | 434 | |||||||||||||||
| Economic Consulting | $ | 633 | $ | 593 | $ | 605 | $ | 566 | |||||||||||||||
(1)The number of billable professionals for the Technology segment excludes as-needed professionals, who we employ based on demand for the segment’s services. We employed an average of 755 and 357 as-needed employees during the three months ended June 30, 2026 and 2025, respectively.
(2)We calculate the utilization rate for our billable professionals by dividing the number of hours that all of our billable professionals worked on client assignments during a period by the total available working hours for all of our billable professionals during the same period. Available hours are determined by the standard hours worked by each employee, adjusted for part-time hours, U.S. standard work weeks and local country holidays. Available working hours include vacation and professional training days, but exclude local country holidays. Utilization rates are presented for our segments that primarily bill clients on an hourly basis. We have not presented utilization rates for our Technology and Strategic Communications segments as most of the revenues of these segments are not generated on an hourly basis.
(3)For engagements where revenues are based on number of hours worked by our billable professionals and fixed-fee arrangements, average billable rate per hour is calculated by dividing revenues (excluding revenues from success fees, pass-through revenues and outside consultants) for a period by the number of hours worked on client assignments during the same period. We have not presented average billable rates per hour for our Technology and Strategic Communications segments as most of the revenues of these segments are not based on billable hours.
27
CORPORATE FINANCE
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (dollars in thousands, except rate per hour) | (dollars in thousands, except rate per hour) | ||||||||||||||||||||||
| Revenues | $ | 411,399 | $ | 379,239 | $ | 820,901 | $ | 722,884 | |||||||||||||||
| Percentage change in revenues from prior year | 8.5 | % | 9.0 | % | 13.6 | % | 1.2 | % | |||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Direct cost of revenues | 270,318 | 246,151 | 532,753 | 477,723 | |||||||||||||||||||
| Selling, general and administrative expenses | 58,326 | 54,204 | 119,848 | 112,912 | |||||||||||||||||||
| Special charges | — | — | — | 11,696 | |||||||||||||||||||
| Amortization of intangible assets | 280 | 756 | 595 | 1,475 | |||||||||||||||||||
| 328,924 | 301,111 | 653,196 | 603,806 | ||||||||||||||||||||
| Segment operating income | 82,475 | 78,128 | 167,705 | 119,078 | |||||||||||||||||||
| Percentage change in segment operating income from prior year | 5.6 | % | 23.6 | % | 40.8 | % | -11.9 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Depreciation and amortization of intangible assets | 3,488 | 3,524 | 6,908 | 6,825 | |||||||||||||||||||
| Special charges | — | — | — | 11,696 | |||||||||||||||||||
| Adjusted Segment EBITDA | $ | 85,963 | $ | 81,652 | $ | 174,613 | $ | 137,599 | |||||||||||||||
Gross profit (1) | $ | 141,081 | $ | 133,088 | $ | 288,148 | $ | 245,161 | |||||||||||||||
| Percentage change in gross profit from prior year | 6.0 | % | 14.3 | % | 17.5 | % | 0.4 | % | |||||||||||||||
Gross profit margin (2) | 34.3 | % | 35.1 | % | 35.1 | % | 33.9 | % | |||||||||||||||
| Adjusted Segment EBITDA as a percentage of revenues | 20.9 | % | 21.5 | % | 21.3 | % | 19.0 | % | |||||||||||||||
| Number of billable professionals (at period end) | 2,358 | 2,188 | 2,358 | 2,188 | |||||||||||||||||||
| Percentage change in number of billable professionals from prior year | 7.8 | % | 1.0 | % | 7.8 | % | 1.0 | % | |||||||||||||||
| Utilization rate of billable professionals | 59 | % | 61 | % | 60 | % | 59 | % | |||||||||||||||
| Average billable rate per hour | $ | 553 | $ | 532 | $ | 549 | $ | 513 | |||||||||||||||
(1)Revenues less direct cost of revenues
(2)Gross profit as a percentage of revenues
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Revenues increased $32.2 million, or 8.5%, to $411.4 million for the three months ended June 30, 2026, primarily due to higher realized bill rates for our transactions, transformation and turnaround & restructuring services, an increase in demand for transformation services, and higher success fees, which was partially offset by lower demand for turnaround & restructuring services.
Gross profit increased $8.0 million, or 6.0%, to $141.1 million for the three months ended June 30, 2026. Gross profit margin decreased 0.8 percentage points for the three months ended June 30, 2026. The decrease in gross profit margin was primarily due to higher compensation as a percentage of revenues, which included the impact of a 7.8% increase in billable headcount and a 2 percentage point decrease in utilization, which was partially offset by higher realized bill rates.
SG&A expenses increased $4.1 million, or 7.6%, to $58.3 million for the three months ended June 30, 2026, primarily due to higher compensation, infrastructure support and other general and administrative expenses, which was partially offset by lower bad debt expenses. SG&A expenses of 14.2% of revenues for the three months ended June 30, 2026 compared to 14.3% of revenues for the three months ended June 30, 2025.
28
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Revenues increased $98.0 million, or 13.6%, to $820.9 million for the six months ended June 30, 2026, primarily due to higher demand and realized bill rates for our transformation, transactions and turnaround & restructuring services. Excluding an estimated 1.6% positive impact from FX, revenues increased $86.3 million, or 11.9%.
Gross profit increased $43.0 million, or 17.5%, to $288.1 million for the six months ended June 30, 2026. Gross profit margin increased 1.2 percentage points for the six months ended June 30, 2026. The increase in gross profit margin was primarily due to higher realized bill rates and a 1 percentage point increase in utilization.
SG&A expenses increased $6.9 million, or 6.1%, to $119.8 million for the six months ended June 30, 2026, primarily due to higher travel and entertainment, compensation and other general and administrative expenses, which was partially offset by lower bad debt expenses. The increase in SG&A expenses included an estimated 2.0% negative impact from FX. SG&A expenses of 14.6% of revenues for the six months ended June 30, 2026 compared to 15.6% of revenues for the six months ended June 30, 2025.
FORENSIC AND LITIGATION CONSULTING
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (dollars in thousands, except rate per hour) | (dollars in thousands, except rate per hour) | ||||||||||||||||||||||
| Revenues | $ | 194,254 | $ | 186,517 | $ | 387,132 | $ | 377,119 | |||||||||||||||
| Percentage change in revenues from prior year | 4.1 | % | 10.0 | % | 2.7 | % | 9.1 | % | |||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Direct cost of revenues | 126,041 | 120,760 | 253,454 | 238,721 | |||||||||||||||||||
| Selling, general and administrative expenses | 38,808 | 36,458 | 80,959 | 73,289 | |||||||||||||||||||
| Special charges | — | — | — | 5,475 | |||||||||||||||||||
| Amortization of intangible assets | 190 | 228 | 419 | 457 | |||||||||||||||||||
| 165,039 | 157,446 | 334,832 | 317,942 | ||||||||||||||||||||
| Segment operating income | 29,215 | 29,071 | 52,300 | 59,177 | |||||||||||||||||||
| Percentage change in segment operating income from prior year | 0.5 | % | 121.9 | % | -11.6 | % | 31.3 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Depreciation and amortization of intangible assets | 2,139 | 2,117 | 4,318 | 4,059 | |||||||||||||||||||
| Special charges | — | — | — | 5,475 | |||||||||||||||||||
| Adjusted Segment EBITDA | $ | 31,354 | $ | 31,188 | $ | 56,618 | $ | 68,711 | |||||||||||||||
Gross profit (1) | $ | 68,213 | $ | 65,757 | $ | 133,678 | $ | 138,398 | |||||||||||||||
| Percentage change in gross profit from prior year | 3.7 | % | 32.6 | % | -3.4 | % | 22.2 | % | |||||||||||||||
Gross profit margin (2) | 35.1 | % | 35.3 | % | 34.5 | % | 36.7 | % | |||||||||||||||
| Adjusted Segment EBITDA as a percentage of revenues | 16.1 | % | 16.7 | % | 14.6 | % | 18.2 | % | |||||||||||||||
| Number of billable professionals (at period end) | 1,527 | 1,482 | 1,527 | 1,482 | |||||||||||||||||||
| Percentage change in number of billable professionals from prior year | 3.0 | % | 1.7 | % | 3.0 | % | 1.7 | % | |||||||||||||||
| Utilization rate of billable professionals | 54 | % | 57 | % | 56 | % | 58 | % | |||||||||||||||
| Average billable rate per hour | $ | 465 | $ | 439 | $ | 458 | $ | 434 | |||||||||||||||
(1)Revenues less direct cost of revenues
(2)Gross profit as a percentage of revenues
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Revenues increased $7.7 million, or 4.1%, to $194.3 million for the three months ended June 30, 2026, primarily due to higher realized bill rates and demand for our risk & investigations services, which was partially offset by lower demand for our dispute advisory services.
29
Gross profit increased $2.5 million, or 3.7%, to $68.2 million for the three months ended June 30, 2026. Gross profit margin was relatively flat for the three months ended June 30, 2026, primarily due to a 3 percentage point decrease in utilization, which was offset by higher realized bill rates.
SG&A expenses increased $2.4 million, or 6.4%, to $38.8 million for the three months ended June 30, 2026, primarily due to higher bad debt, compensation and travel and entertainment expenses. SG&A expenses of 20.0% of revenues for the three months ended June 30, 2026 compared to 19.5% of revenues for the three months ended June 30, 2025.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Revenues increased $10.0 million, or 2.7%, to $387.1 million for the six months ended June 30, 2026, primarily due to higher realized bill rates and demand for our risk & investigations services and higher realized bill rates for our dispute advisory services, which was partially offset by lower demand for our dispute advisory services. Excluding an estimated 1.4% positive impact from FX, revenues increased $4.9 million, or 1.3%.
Gross profit decreased $4.7 million, or 3.4%, to $133.7 million for the six months ended June 30, 2026. Gross profit margin decreased 2.2 percentage points for the six months ended June 30, 2026. The decrease in gross profit margin was primarily due to a 2 percentage point decrease in utilization, which was partially offset by higher realized bill rates.
SG&A expenses increased $7.7 million, or 10.5%, to $81.0 million for the six months ended June 30, 2026, primarily due to an increase in hiring-related, bad debt, and travel and entertainment expenses. The increase in SG&A expenses included an estimated 1.4% negative impact from FX. SG&A expenses of 20.9% of revenues for the six months ended June 30, 2026 compared to 19.4% of revenues for the six months ended June 30, 2025.
30
ECONOMIC CONSULTING
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (dollars in thousands, except rate per hour) | (dollars in thousands, except rate per hour) | ||||||||||||||||||||||
| Revenues | $ | 188,812 | $ | 191,657 | $ | 364,460 | $ | 371,518 | |||||||||||||||
| Percentage change in revenues from prior year | -1.5 | % | -17.0 | % | -1.9 | % | -14.7 | % | |||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Direct cost of revenues | 151,360 | 149,843 | 306,435 | 288,288 | |||||||||||||||||||
| Selling, general and administrative expenses | 30,008 | 29,007 | 57,912 | 57,351 | |||||||||||||||||||
| Special charges | — | — | — | 983 | |||||||||||||||||||
| 181,368 | 178,850 | 364,347 | 346,622 | ||||||||||||||||||||
| Segment operating income | 7,444 | 12,807 | 113 | 24,896 | |||||||||||||||||||
Percentage change in segment operating income from prior year | -41.9 | % | -70.2 | % | -99.5 | % | -55.4 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Depreciation of property and equipment | 1,360 | 1,376 | 2,809 | 2,735 | |||||||||||||||||||
| Special charges | — | — | — | 983 | |||||||||||||||||||
| Adjusted Segment EBITDA | $ | 8,804 | $ | 14,183 | $ | 2,922 | $ | 28,614 | |||||||||||||||
Gross profit (1) | $ | 37,452 | $ | 41,814 | $ | 58,025 | $ | 83,230 | |||||||||||||||
| Percentage change in gross profit from prior year | -10.4 | % | -41.8 | % | -30.3 | % | -28.8 | % | |||||||||||||||
Gross profit margin (2) | 19.8 | % | 21.8 | % | 15.9 | % | 22.4 | % | |||||||||||||||
| Adjusted Segment EBITDA as a percentage of revenues | 4.7 | % | 7.4 | % | 0.8 | % | 7.7 | % | |||||||||||||||
| Number of billable professionals (at period end) | 970 | 991 | 970 | 991 | |||||||||||||||||||
| Percentage change in number of billable professionals from prior year | -2.1 | % | -7.9 | % | -2.1 | % | -7.9 | % | |||||||||||||||
| Utilization rate of billable professionals | 61 | % | 64 | % | 61 | % | 63 | % | |||||||||||||||
| Average billable rate per hour | $ | 633 | $ | 593 | $ | 605 | $ | 566 | |||||||||||||||
(1)Revenues less direct cost of revenues
(2)Gross profit as a percentage of revenues
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Revenues decreased $2.8 million, or 1.5%, to $188.8 million for the three months ended June 30, 2026, primarily due to lower demand for our non-M&A-related antitrust and international arbitration services, which was partially offset by higher demand for M&A-related antitrust services and higher realized bill rates for our financial economics services.
Gross profit decreased $4.4 million, or 10.4%, to $37.5 million for the three months ended June 30, 2026. Gross profit margin decreased 2.0 percentage points for the three months ended June 30, 2026. The decrease in gross profit margin was primarily due to a 3 percentage point decrease in utilization, which was partially offset by higher realized bill rates.
SG&A expenses increased $1.0 million, or 3.5%, to $30.0 million for the three months ended June 30, 2026, primarily driven by higher bad debt and outside services expenses. SG&A expenses of 15.9% of revenues for the three months ended June 30, 2026 compared to 15.1% of revenues for the three months ended June 30, 2025.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Revenues decreased $7.1 million, or 1.9%, to $364.5 million for the six months ended June 30, 2026, primarily due to lower demand for our non-M&A-related antitrust and international arbitration services, which was partially offset by higher realized bill rates across our services and higher demand for our M&A-related antitrust services. Excluding an estimated 1.9% positive impact from FX, revenues decreased $14.3 million, or 3.8%.
31
Gross profit decreased $25.2 million, or 30.3%, to $58.0 million for the six months ended June 30, 2026. Gross profit margin decreased 6.5 percentage points for the six months ended June 30, 2026. The decrease in gross profit margin was primarily due to higher forgivable loan amortization and variable compensation as a percentage of revenues and a 2 percentage point decrease in utilization, which was partially offset by higher realized bill rates.
SG&A expenses increased $0.6 million, or 1.0%, to $57.9 million for the six months ended June 30, 2026, primarily due to higher compensation and outside services expenses, which was partially offset by lower infrastructure support expenses. The increase in SG&A expenses included an estimated 2.3% negative impact from FX. SG&A expenses of 15.9% of revenues for the six months ended June 30, 2026 compared to 15.4% of revenues for the six months ended June 30, 2025.
TECHNOLOGY
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (dollars in thousands) | (dollars in thousands) | ||||||||||||||||||||||
| Revenues | $ | 99,017 | $ | 83,599 | $ | 201,340 | $ | 180,755 | |||||||||||||||
| Percentage change in revenues from prior year | 18.4 | % | -27.9 | % | 11.4 | % | -16.5 | % | |||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Direct cost of revenues | 67,181 | 58,864 | 136,197 | 123,122 | |||||||||||||||||||
| Selling, general and administrative expenses | 27,023 | 23,175 | 52,627 | 47,551 | |||||||||||||||||||
| Special charges | — | — | — | 1,928 | |||||||||||||||||||
| 94,204 | 82,039 | 188,824 | 172,601 | ||||||||||||||||||||
| Segment operating income | 4,813 | 1,560 | 12,516 | 8,154 | |||||||||||||||||||
| Percentage change in segment operating income from prior year | 208.5 | % | -90.9 | % | 53.5 | % | -71.0 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Depreciation of property and equipment | 4,237 | 3,724 | 8,367 | 6,794 | |||||||||||||||||||
| Special charges | — | — | — | 1,928 | |||||||||||||||||||
| Adjusted Segment EBITDA | $ | 9,050 | $ | 5,284 | $ | 20,883 | $ | 16,876 | |||||||||||||||
Gross profit (1) | $ | 31,836 | $ | 24,735 | $ | 65,143 | $ | 57,633 | |||||||||||||||
| Percentage change in gross profit from prior year | 28.7 | % | -43.0 | % | 13.0 | % | -28.0 | % | |||||||||||||||
Gross profit margin (2) | 32.2 | % | 29.6 | % | 32.4 | % | 31.9 | % | |||||||||||||||
| Adjusted Segment EBITDA as a percentage of revenues | 9.1 | % | 6.3 | % | 10.4 | % | 9.3 | % | |||||||||||||||
Number of billable professionals (at period end) (3) | 641 | 655 | 641 | 655 | |||||||||||||||||||
| Percentage change in number of billable professionals from prior year | -2.1 | % | -1.1 | % | -2.1 | % | -1.1 | % | |||||||||||||||
(1)Revenues less direct cost of revenues
(2)Gross profit as a percentage of revenues
(3)Includes personnel involved in direct client assistance and billable consultants and excludes professionals employed on an as-needed basis
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Revenues increased $15.4 million, or 18.4%, to $99.0 million for the three months ended June 30, 2026, primarily due to higher demand for our M&A-related “second request” services, which was partially offset by lower demand for our investigations services.
Gross profit increased $7.1 million, or 28.7%, to $31.8 million for the three months ended June 30, 2026. Gross profit margin increased 2.6 percentage points for the three months ended June 30, 2026. The increase in gross profit margin was primarily due to an increase in profitability of our consulting, processing and review services, which was partially offset by a decrease in profitability of our hosting services.
SG&A expenses increased $3.8 million, or 16.6%, to $27.0 million for the three months ended June 30, 2026, primarily due to higher bad debt, compensation and travel and entertainment expenses. SG&A expenses of 27.3% of revenues for the three months ended June 30, 2026 compared to 27.7% of revenues for the three months ended June 30, 2025.
32
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Revenues increased $20.6 million, or 11.4%, to $201.3 million for the six months ended June 30, 2026, primarily due to higher demand for our M&A-related “second request,” litigation and information governance, privacy & security services, which was partially offset by lower demand for our investigations services. Excluding an estimated 1.6% positive impact from FX, revenues increased $17.7 million, or 9.8%.
Gross profit increased $7.5 million, or 13.0%, to $65.1 million for the six months ended June 30, 2026. Gross profit margin increased 0.5 percentage points for the six months ended June 30, 2026. The increase in gross profit margin was primarily due to higher profitability of our consulting, review and processing services, which was partially offset by lower profitability of our hosting services.
SG&A expenses increased $5.1 million, or 10.7%, to $52.6 million for the six months ended June 30, 2026, primarily due to higher bad debt, compensation, and travel and entertainment expenses. The increase in SG&A expenses included an estimated 1.4% negative impact from FX. SG&A expenses of 26.1% of revenues for the six months ended June 30, 2026 compared to 26.3% of revenues for the six months ended June 30, 2025.
STRATEGIC COMMUNICATIONS
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (dollars in thousands) | (dollars in thousands) | ||||||||||||||||||||||
| Revenues | $ | 99,982 | $ | 102,650 | $ | 202,976 | $ | 189,668 | |||||||||||||||
| Percentage change in revenues from prior year | -2.6 | % | 20.8 | % | 7.0 | % | 14.2 | % | |||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Direct cost of revenues | 62,291 | 65,523 | 124,870 | 122,215 | |||||||||||||||||||
| Selling, general and administrative expenses | 20,232 | 19,584 | 39,741 | 37,848 | |||||||||||||||||||
| Special charges | — | — | — | 3,268 | |||||||||||||||||||
| Amortization of intangible assets | 69 | 69 | 137 | 138 | |||||||||||||||||||
| 82,592 | 85,176 | 164,748 | 163,469 | ||||||||||||||||||||
| Segment operating income | 17,390 | 17,474 | 38,228 | 26,199 | |||||||||||||||||||
| Percentage change in segment operating income from prior year | -0.5 | % | 64.9 | % | 45.9 | % | 18.7 | % | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Depreciation and amortization of intangible assets | 1,107 | 1,007 | 2,159 | 1,917 | |||||||||||||||||||
| Special charges | — | — | — | 3,268 | |||||||||||||||||||
| Adjusted Segment EBITDA | $ | 18,497 | $ | 18,481 | $ | 40,387 | $ | 31,384 | |||||||||||||||
Gross profit (1) | $ | 37,691 | $ | 37,127 | $ | 78,106 | $ | 67,453 | |||||||||||||||
| Percentage change in gross profit from prior year | 1.5 | % | 23.0 | % | 15.8 | % | 13.5 | % | |||||||||||||||
Gross profit margin (2) | 37.7 | % | 36.2 | % | 38.5 | % | 35.6 | % | |||||||||||||||
| Adjusted Segment EBITDA as a percentage of revenues | 18.5 | % | 18.0 | % | 19.9 | % | 16.5 | % | |||||||||||||||
| Number of billable professionals (at period end) | 913 | 892 | 913 | 892 | |||||||||||||||||||
| Percentage change in number of billable professionals from prior year | 2.4 | % | -8.2 | % | 2.4 | % | -8.2 | % | |||||||||||||||
(1)Revenues less direct cost of revenues
(2)Gross profit as a percentage of revenues
Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025
Revenues decreased $2.7 million, or 2.6%, to $100.0 million for the three months ended June 30, 2026. The decrease in revenues was primarily due to a $7.4 million decline in pass-through revenues. Excluding pass-through revenues, revenues increased $4.7 million, or 5.4%, to $92.4 million, primarily due to higher demand for our corporate reputation services.
Gross profit increased $0.6 million, or 1.5%, to $37.7 million for the three months ended June 30, 2026. Gross profit margin increased 1.5 percentage points for the three months ended June 30, 2026. The increase in gross profit margin was
33
primarily due to lower pass-through revenues and expenses, which was partially offset by higher compensation expenses as a percentage of revenues.
SG&A expenses increased $0.6 million, or 3.3%, to $20.2 million for the three months ended June 30, 2026, primarily due to higher travel and entertainment and compensation expenses. The increase in SG&A expenses included an estimated 1.2% negative impact from FX. SG&A expenses of 20.2% of revenues for the three months ended June 30, 2026 compared to 19.1% of revenues for the three months ended June 30, 2025.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Revenues increased $13.3 million, or 7.0%, to $203.0 million for the six months ended June 30, 2026. Revenues included an $8.1 million decline in pass-through revenues. Excluding pass-through revenues, revenues increased $21.4 million, or 12.9%, to $186.8 million, primarily due to higher demand for corporate reputation, financial communications and public affairs services. Excluding an estimated 2.3% positive impact from FX, revenues increased $9.0 million, or 4.7%.
Gross profit increased $10.7 million, or 15.8%, to $78.1 million for the six months ended June 30, 2026. Gross profit margin increased 2.9 percentage points for the six months ended June 30, 2026. The increase in gross profit margin was primarily due to lower pass-through revenues and expenses and lower compensation expenses as a percentage of revenues.
SG&A expenses increased $1.9 million, or 5.0%, to $39.7 million for the six months ended June 30, 2026, primarily due to higher travel and entertainment, marketing and compensation expenses. The increase in SG&A expenses included an estimated 2.8% negative impact from FX. SG&A expenses of 19.6% of revenues for the six months ended June 30, 2026 compared to 20.0% of revenues for the six months ended June 30, 2025.
CRITICAL ACCOUNTING ESTIMATES
Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which we have prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Note 1 to the Consolidated Financial Statements included in Part II, Item 8, of our Annual Report on Form 10-K for the year ended December 31, 2025 describes the significant accounting policies and methods used in preparation of the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. We evaluate our estimates, including those related to revenues, goodwill and intangible assets, income taxes and contingencies, on an ongoing basis. Our estimates are based on current facts and circumstances, historical experience and various other assumptions that we believe are reasonable, which form the basis for making judgments about the values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The accounting estimates that reflect our more significant judgments, and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results, include the following:
•Revenue Recognition
•Goodwill and Intangible Assets
•Income Taxes
There were no material changes to our critical accounting estimates from the information provided in “Critical Accounting Estimates” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations, in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2025, or from the information provided in Part II, Item 8, of our Annual Report on Form 10-K for the year ended December 31, 2025.
SIGNIFICANT NEW ACCOUNTING PRONOUNCEMENTS
See Note 2, “New Accounting Standards” in Part I, Item 1, of this Quarterly Report on Form 10-Q.
34
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
Our annual cash flows from operations generally exceed our cash needs for capital expenditures and debt service requirements. We typically finance our day-to-day operations, capital expenditures, acquisitions and share repurchases through cash flows from operations. We believe that our cash flows from operations, supplemented by borrowings under our Revolving Credit Facility, as necessary, and our Incremental Term Loan under our third amended and restated credit agreement entered into on June 30, 2026 (as amended and restated, the “Credit Agreement”), will provide adequate cash to fund our cash needs for at least the next 12 months.
Our operating assets and liabilities consist primarily of billed and unbilled accounts receivable, notes receivable from employees, accounts payable, accrued expenses and accrued compensation expenses. The timing of billings and collections of receivables, as well as compensation and vendor payments, affects the changes in these balances.
Results of operations for our non-U.S. subsidiaries are translated from the designated functional currency to our reporting currency of USD. Revenues and expenses are translated at average exchange rates for each month, while assets and liabilities are translated at balance sheet date exchange rates and certain equity transactions are translated at historical rates. Resulting net translation adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive loss.”
Uncertainties and Trends Affecting Liquidity
Our conclusion that we will be able to fund our cash requirements for at least the next 12 months by using existing capital resources and cash generated from operations does not take into account events beyond our control that could result in a material adverse impact on our business, the impact of any future acquisitions or unexpected significant changes in the number of employees or other unanticipated uses of cash. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events such as economic, political and workforce disruptions arise, including any impact of future public health crises, or economic, political or business conditions change from those currently prevailing or from those now anticipated, or if unexpected circumstances or other events beyond our control arise that may have a material adverse effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or those of our clients, and the operating performance or financial results of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding and could require us to borrow under our Revolving Credit Facility or raise additional debt or equity funding to meet those needs. Our ability to borrow or raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:
•our future profitability;
•the quality of our accounts receivable;
•our relative levels of debt and equity;
•the volatility and overall condition of the capital markets; and
•the market prices of our securities.
Any new debt funding, if available, may be on terms less favorable to us than our Revolving Credit Facility and Incremental Term Loan under our Credit Agreement. See “Forward-Looking Statements” in Part I, Item 2, of this Quarterly Report on Form 10-Q, and the information contained under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2025.
35
Cash Flows
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash Flows | (dollars in thousands) | ||||||||||
| Net cash used in operating activities | $ | (157,729) | $ | (409,517) | |||||||
| Net cash used in investing activities | $ | (63,986) | $ | (35,228) | |||||||
| Net cash provided by (used in) financing activities | $ | 124,512 | $ | (84,194) | |||||||
| Effect of exchange rate changes on cash and cash equivalents | $ | (4,141) | $ | 21,277 | |||||||
DSO (1) | 99 | 100 | |||||||||
(1)DSO is a performance measure used to assess how quickly revenues are collected by the Company. We calculate DSO at the end of each reporting period by dividing accounts receivable, net reduced by billings in excess of services provided, by revenues for the quarter, adjusted for changes in foreign exchange rates. We multiply the result by the number of days in the quarter.
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Net cash used in operating activities decreased $251.8 million, or 61.5%, to $157.7 million compared to $409.5 million for the six months ended June 30, 2025. The decrease in net cash used in operating activities was primarily due to a decrease in forgivable loan issuances, higher cash collections and a decrease in income tax payments, which was partially offset by an increase in compensation and interest payments. DSO was 99 and 100 days as of June 30, 2026 and 2025, respectively.
Net cash used in investing activities increased $28.8 million, or 81.6%, to $64.0 million compared to $35.2 million for the six months ended June 30, 2025. The increase in net cash used in investing activities was due to a $42.1 million payment for a tax equity investment, which was partially offset by a $13.3 million decrease in capital expenditures, primarily related to lower spend on leasehold improvements as compared to the six months ended June 30, 2025.
Net cash provided by financing activities increased $208.7 million to $124.5 million compared to net cash used in financing activities of $84.2 million for the six months ended June 30, 2025. The increase in net cash provided by financing activities was primarily due to receipt of $300.0 million in proceeds from the Incremental Term Loan, which was partially offset by a decrease in net borrowings of $115.0 million under our Revolving Credit Facility compared to the six months ended June 30, 2025.
The effect of exchange rate changes on cash and cash equivalents had an unfavorable impact of $4.1 million during the six months ended June 30, 2026 compared to a favorable impact of $21.3 million during the six months ended June 30, 2025.
Cash paid for income taxes and tax credits, net of refunds, included $6.8 million and $28.9 million of payments for the purchase of tax credits during the six months ended June 30, 2026 and 2025, respectively.
Principal Sources of Capital Resources
As of June 30, 2026, our capital resources included $163.7 million of cash and cash equivalents and available borrowing capacity of $780.0 million under the revolving line of credit under our Revolving Credit Facility. We also hold an Incremental Term Loan in the aggregate amount of $300.0 million, which matures on March 17, 2029.
The availability of borrowings, as well as issuances and extensions of letters of credit under our Revolving Credit Facility, are subject to specified conditions. See Note 8, “Debt” in Part I, Item 1, of this Quarterly Report on Form 10-Q for a further discussion of variable interest rates and guarantees under the Revolving Credit Facility and Incremental Term Loan.
The Credit Agreement governing the Revolving Credit Facility and the Incremental Term Loan contains covenants that, among other things, may limit our ability to: incur additional indebtedness; create liens; pay dividends on our capital stock, make distributions or repurchases of our capital stock or make specified other restricted payments; consolidate, merge or sell all or substantially all of our assets; or engage in any business other than consulting-related businesses. In addition, the Credit Agreement includes a financial covenant that requires us not to exceed a maximum consolidated total net leverage ratio (the ratio of funded debt (less unrestricted cash up to $400.0 million) to Consolidated EBITDA, as defined in the Credit Agreement). As of June 30, 2026, we were in compliance with the covenants contained in the Credit Agreement. See Note 8, “Debt” in Part I, Item 1, of this Quarterly Report on Form 10-Q for a further discussion of the Credit Agreement.
36
Principal Uses of Capital Resources
Future Capital Requirements
We anticipate that our future capital requirements will principally consist of funds required for:
•operating and general corporate expenses;
•capital expenditures, primarily for information technology equipment and systems, office furniture and leasehold improvements;
•debt service requirements, including interest payments;
•compensation to designated executive management and senior managing directors under our various long-term incentive compensation programs, including forgivable loans;
•discretionary funding of the Repurchase Program;
•contingent obligations related to our acquisitions;
•potential acquisitions of businesses; and
•other known future contractual obligations.
Capital Expenditures
During the six months ended June 30, 2026, we spent $21.9 million in capital expenditures to support our organization. For the remainder of 2026, we currently expect additional capital expenditures to support our organization in an aggregate amount of between $24 million and $29 million. Our estimate takes into consideration the needs of our existing businesses but does not include the impact of any expenditures that we may be required to make as a result of future acquisitions or specific client engagements that are not completed or not currently contemplated. Our capital expenditure requirements may change if our staffing levels or technology needs change significantly from what we currently anticipate, if we are required to purchase additional equipment specifically to support new client engagements, or if we pursue and complete acquisitions.
Share Repurchase Program
During the six months ended June 30, 2026, we made $520.0 million in payments, including commissions and excise taxes, for common stock repurchases under the Repurchase Program. We had $344.0 million remaining under the Repurchase Program to repurchase additional shares as of June 30, 2026.
Future Contractual Obligations
Our future contractual obligations as of June 30, 2026 include long-term obligations of $1,020.0 million related to outstanding borrowings under our Revolving Credit Facility and Incremental Term Loan. For more information on our Revolving Credit Facility and Incremental Term Loan, refer to Note 8, “Debt” in Part I, Item 1 of this Quarterly Report on Form 10-Q. Under our operating leases as described in Note 9, “Leases” in Part I, Item 1 of this Quarterly Report on Form 10-Q, we have current obligations of $39.5 million and non-current obligations of $208.7 million as of June 30, 2026.
The above amounts reflect future unconditional payments and are based on the terms of the relevant agreements, appropriate classification of items under GAAP currently in effect and certain assumptions such as interest rates. Future events could cause actual payments to differ from these amounts.
Off-Balance Sheet Arrangements
As of June 30, 2026 and December 31, 2025, we were contingently liable under bank guarantees issued in favor of third parties that totaled $18.6 million and $17.5 million, respectively. These bank guarantees primarily support bid and performance obligations and operating leases for office space. The amounts are guaranteed under guarantee facilities totaling $40.7 million and $32.5 million as of June 30, 2026 and December 31, 2025, respectively. We had $22.1 million and $15.0 million available under the guarantee facilities as of June 30, 2026 and December 31, 2025, respectively. These bank guarantees are issued separately from our Revolving Credit Facility and, as a result, do not affect available borrowing capacity under our Revolving Credit Facility.
37
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact, including among other things, statements about future events, anticipated growth, industry prospects, business trends, our future results of operations and financial position, business strategy and plans, future revenues or performance, financing needs, and objectives of management for future operations, are forward-looking statements. Forward-looking statements often contain words such as “may,” “might,” “will,” “should,” “could,” “would,” “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “commits,” “aspires,” “forecasts,” “future,” “goal,” “seeks” and variations of such words or similar expressions.
There are a number of risks, uncertainties and other factors that could cause our actual results or outcomes, and the timing of our results or outcomes, to differ materially from the forward-looking statements expressed or implied by this Quarterly Report on Form 10-Q. Although we believe that the expectations and assumptions reflected in these forward-looking statements are reasonable, we can provide no assurance that these expectations and assumptions will prove to be correct. Forward-looking statements relate to future events, results and outcomes and are inherently uncertain. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements. Important factors that could cause our actual results or outcomes, and the timing of our results and outcomes, to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q include those set forth under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2025, as well as in other information that we file with the SEC from time to time, and include, but are not limited to, the following:
•changes in demand for our services;
•our ability to recruit and retain qualified professionals and senior management, including segment, industry and regional leaders;
•conflicts resulting in our inability to represent certain clients;
•our former employees joining or forming competing businesses;
•the enactment of legislation rendering contractual protections against competition by former employees unenforceable;
•our ability to manage our headcount needs and our professionals’ utilization and billing rates and maintain or increase the pricing of our services and products;
•our ability to identify suitable acquisition candidates, negotiate favorable terms, take advantage of opportunistic acquisition situations and integrate the operations of acquisitions, as well as the costs of integration;
•our ability to adapt to and manage the risks associated with operating in non-U.S. markets;
•our ability to replace key personnel, including former executives, officers, senior managers and practice and regional leaders who have highly specialized skills and experience;
•our ability to protect the confidentiality of internal and client data and proprietary and confidential information, including from cyberattacks, systems failures or other similar events or outside or internal bad actors, or the use or misuse of social media;
•legislation or judicial rulings, including legislation or rulings regarding data privacy and the discovery process;
•periodic fluctuations in revenues, operating income and cash flows;
•damage to our reputation as a result of claims involving the quality of our services, failures of our internal information technology systems controls or adverse publicity relating to certain clients or engagements;
•fee discounting or renegotiation, lower pricing, less advantageous contract terms and unexpected termination of client engagements;
•competition for clients and key personnel;
38
•general economic factors, industry trends, restructuring and bankruptcy rates, legal or regulatory requirements, capital market conditions, merger and acquisition activity, major litigation activity, geopolitical disruptions, including wars and other conflicts, and other events outside of our control;
•our ability to manage growth;
•risk of non-payment of receivables;
•the amount and terms of our outstanding indebtedness;
•risks relating to the obsolescence, replacement, protection, implementation or operation of our information technology systems, including our enterprise resource planning and other financial systems, and software, proprietary software products, intellectual property rights and trade secrets, which could adversely affect our ability to retain or win clients, conduct business, preserve or enhance our reputation, maintain business continuity or report financial results;
•risks relating to the adoption and integration of technological innovations such as AI and machine learning;
•foreign currency disruptions and currency fluctuations between the U.S. dollar and foreign currencies;
•U.S. and foreign tax law changes, including the enactment of tax legislation, proposed from time to time, into law, which could increase our effective tax rate and cash tax expenditures;
•physical risks related to climate change, including rising temperatures, severe storms, energy disruptions, fires or wildfires, flooding and rising sea levels, among others, which could adversely impact our ability to conduct business or maintain business continuity, including by affecting our access to our leased office space in affected geographies and the integrity of our information technology systems;
•our climate change and sustainability and corporate responsibility-related initiatives and goals, including our policies and practices relating to the environment and climate change, sustainability, and inclusion, if they do not meet or keep pace with current or evolving governmental, investor or other stakeholder or media (including social media) expectations and standards or rules and regulations; and
•fluctuations in the mix of our services and the geographic locations in which our clients are located or our services are rendered.
All forward-looking statements are presented as of the date of this Quarterly Report on Form 10-Q and are expressly qualified in their entirety by the cautionary statements included herein. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement for any reason.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | ||||
For information regarding our exposure to certain market risks, see “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A, of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in our market risk exposure during the period covered by this Quarterly Report on Form 10-Q.
| Item 4. | Controls and Procedures | ||||
Evaluation of Disclosure Controls and Procedures. An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q, was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (a) were effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is timely recorded, processed, summarized and reported and (b) included, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
39
Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
40
PART II—OTHER INFORMATION
| Item 1. | Legal Proceedings | ||||
From time to time in the ordinary course of business, we are subject to claims, asserted or unasserted, or named as a party to lawsuits or investigations. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings cannot be predicted with any certainty, and in the case of more complex legal proceedings the results are difficult to predict at all. We are not aware of any asserted or unasserted legal proceedings or claims that we believe would have a material adverse effect on our financial condition or our results of operations.
| Item 1A. | Risk Factors | ||||
There have been no material changes in any risk factors previously disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC. We may disclose changes to risk factors or disclose additional factors from time to time in our future filings with the SEC. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | ||||
Unregistered sales of equity securities.
None.
Repurchases of our common stock.
The following table provides information with respect to purchases we made of our common stock during the three months ended June 30, 2026:
| Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program (1) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program | ||||||||||||||||||||
| (in thousands, except price per share data) | |||||||||||||||||||||||
| April 1 through April 30, 2026 | 2 | (2) | $ | 180.04 | — | $ | 364,929 | ||||||||||||||||
| May 1 through May 31, 2026 | 1,382 | (3) | $ | 153.38 | 1,382 | (5) | $ | 152,941 | |||||||||||||||
| June 1 through June 30, 2026 | 1,221 | (4) | $ | 148.01 | 1,209 | (6) | $ | 344,024 | |||||||||||||||
| 2,605 | 2,591 | ||||||||||||||||||||||
(1)On June 2, 2016, our Board of Directors authorized a stock repurchase program (the “Repurchase Program”), which was most recently increased by $370.0 million to an aggregate authorization of $2.6 billion on June 3, 2026. No time limit has been established for the completion of the Repurchase Program, and the Repurchase Program may be suspended, discontinued or replaced by the Board of Directors at any time without prior notice. During the quarter ended June 30, 2026, we repurchased an aggregate of 2,591,133 shares of our common stock under the Repurchase Program at an average price of $150.84 per share for a total cost of approximately $390.9 million.
(2)Includes 1,770 shares of common stock withheld to cover payroll tax withholdings.
(3)Includes 174 shares of common stock withheld to cover payroll tax withholdings.
(4)Includes 11,629 shares of common stock withheld to cover payroll tax withholdings.
(5)During the month ended May 31, 2026, we repurchased and retired 1,381,913 shares of common stock, at an average price per share of $153.38, for an aggregate cost of $212.0 million.
(6)During the month ended June 30, 2026, we repurchased and retired 1,209,220 shares of common stock, at an average price per share of $147.94, for an aggregate cost of $178.9 million.
41
| Item 3. | Defaults Upon Senior Securities | ||||
None.
| Item 4. | Mine Safety Disclosures | ||||
Not applicable.
| Item 5. | Other Information | ||||
(c) Trading plans
During the quarter ended June 30, 2026, no director or Section 16 officer of the Company adopted terminated
42
| Item 6. | EXHIBIT INDEX | ||||
| Incorporated by Reference | ||||||||||||||
| Exhibit Number | Exhibit Description | Form | Exhibit | Filing Date | ||||||||||
| 3.1 | Articles of Incorporation of FTI Consulting, Inc., as Amended and Restated | 8-K | 99.2 | 05/23/2003 | ||||||||||
| 3.2 | Articles of Amendment dated June 1, 2011 to Charter of FTI Consulting, Inc. | 8-K | 3.1 | 06/02/2011 | ||||||||||
| 3.3 | Bylaws of FTI Consulting, Inc., as Amended and Restated Adopted February 21, 2023 | 8-K | 3.1 | 02/21/2023 | ||||||||||
| 10.1^ | Third Amendment and Restatement Agreement, dated as of June 30, 2026, by and among FTI Consulting, Inc., the Subsidiaries of the Company party thereto, as Guarantors, the Lenders party thereto and Bank of America, N.A., as administrative agent (including Annex B - Third Amended and Restated Credit Agreement, dated as of June 30, 2026, by and among FTI Consulting, Inc., the Subsidiaries of the Company party thereto, as Guarantors, the Lenders party thereto and Bank of America, N.A., as administrative agent) | 8-K | 10.1 | 07/01/2026 | ||||||||||
| 31.1* | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended (Section 302 of the Sarbanes-Oxley Act of 2002) | |||||||||||||
| 31.2* | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended (Section 302 of the Sarbanes-Oxley Act of 2002) | |||||||||||||
| 32.1** | Certification of Principal Executive Officer Pursuant to 18 USC. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) | |||||||||||||
| 32.2** | Certification of Principal Financial Officer Pursuant to 18 USC. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) | |||||||||||||
| 101 | The following financial information from the Quarterly Report on Form 10-Q of FTI Consulting, Inc., included herewith, and formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025; (ii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025; (iii) Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2026 and 2025; (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025; and (v) Notes to the Condensed Consolidated Financial Statements, tagged as blocks of text. | |||||||||||||
| 104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL (included as Exhibit 101). | |||||||||||||
* Filed herewith.
** Furnished herewith. This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
^ Pursuant to Item 601(a)(5) of Regulation S-K, certain exhibits and schedules have been omitted. The registrant hereby agrees to furnish a copy of any omitted exhibit or schedule to the Securities and Exchange Commission upon request.
43
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: July 30, 2026
| FTI CONSULTING, INC. | ||||||||
| By: | /s/ BRENDAN J. KEATING | |||||||
| Brendan J. Keating | ||||||||
| Chief Accounting Officer and Controller | ||||||||
| (principal accounting officer) | ||||||||
44