CRA International (CRAI) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 revenue of $167.7 million, up 13.7% year-over-year, with broad-based growth across practices and regions and improved consultant utilization at 76% despite a slight decrease in headcount.

• Net income rose to $11.4 million for Q3 2024, up 33.1% year-over-year, with diluted EPS at $1.67, and non-GAAP net income and EPS increasing over 50%.

• Operating margin improved to 11.0% from 7.3% in Q3 2023, and non-GAAP EBITDA margin reached 12.9% year-to-date.

• Legal and regulatory services revenue grew nearly 20% year-over-year, outpacing mixed trends in the broader legal market.

• Increased quarterly dividend by 17% to $0.49 per share, payable December 13, 2024.

Financial highlights

• Q3 2024 revenue was $167.7 million, a 13.7% increase year-over-year; year-to-date revenue reached $511.0 million, up 10.5%.

• Q3 2024 net income was $11.4 million; diluted EPS was $1.67; non-GAAP EBITDA rose 54.8% to $21.3 million (12.7% of revenue).

• Utilization rate was 76% in Q3 2024; consultant headcount at quarter-end was 978, down 3.6% year-over-year.

• Non-GAAP SG&A (excluding commissions) was 16.2% of revenue, down from 16.5% a year ago.

• Effective non-GAAP tax rate was 28.5%–28.7%, up from 18.0%–18.3% in Q3 2023.

Outlook and guidance

• Reaffirmed full-year 2024 guidance: revenue of $670–$685 million and non-GAAP EBITDA margin of 12.2%–13.0% on a constant currency basis.

• No anticipated unusual seasonality or disruptions for Q4; guidance maintained.

• Management expects current cash, cash flow, and credit facility to cover working capital and capital expenditures for at least the next 12 months.

• Plans to continue regular quarterly dividends and share repurchases, subject to board discretion.

• Management remains confident in competitive position but notes potential macroeconomic and geopolitical headwinds.