CRA International (CRAI) Sidoti March Small-Cap Virtual Conference summary

Strategic overview and business fundamentals

• Celebrated 60th anniversary, emphasizing resilience and consistent expertise in economics, finance, and strategy.

• Operates in two main segments: Legal & Regulatory (80% of portfolio) and Management Consulting.

• Antitrust & Competition Economics, Forensic Services, and Life Sciences are the top three revenue-generating practices, together accounting for 75% of total revenue.

• Maintains strong client relationships, serving 88 of the Fortune 100 and 98 of the top 100 law firms in the past two years.

• Less than 5% voluntary turnover among top revenue generators over five years, reflecting strong talent retention.

Financial performance and capital allocation

• Achieved high single-digit annual revenue growth (9-10%) and faster profit growth over the past decade.

• Converts over 110% of EBITDA into operating cash flow, with no long-term debt and all investments funded internally.

• About half of cash generation over five years invested in talent, generating significant revenue returns; the other half returned to shareholders via buybacks and dividends.

• Repurchased 1.7 million shares (15% reduction in share count) and increased quarterly dividend from $0.14 to $0.57, resulting in a 5.5% shareholder yield.

• Plans to continue returning roughly 50% of adjusted cash flows to shareholders, with a focus on share repurchases.

Forward-looking guidance and growth drivers

• Fiscal 2026 revenue guidance set at $785M–$805M (constant currency), with reported revenue expected to be $790M–$810M.

• Guidance does not include potential new inorganic growth, providing upside opportunity.

• Non-GAAP EBITDA margin will be impacted by a $14M increase in forgivable loan amortization.

• Utilization rates expected in the mid- to upper 70% range, supporting continued profitability.

• Energy and Intellectual Property practices highlighted as emerging growth areas, especially given increasing complexity in the electric utility and AI-driven IP sectors.