CRA International (CRAI) Small-Cap Growth Virtual Investor Conference summary

Business overview and strategy

• Operates in two main segments: legal and regulatory, and management consulting, with a focus on highly credentialed talent and low voluntary turnover among top revenue generators.

• Antitrust and competition economics is the largest practice, representing 40%-45% of the business, with significant roles in high-profile regulatory cases globally.

• Maintains strong client relationships, working with 82 of the Fortune 100 and 97 of the Am Law 100 law firms in the past two years.

Financial performance and capital allocation

• Achieved consistent revenue and profit growth over the past 12 years, with profits growing faster than revenue.

• Reduced share count by about 35% over the past decade, combining buybacks with business value growth.

• Share repurchases and dividends split roughly 75%/25%, with all capital funded by operations and no debt.

• Returns about half of adjusted cash flow to shareholders, supporting 8%-9% annual top-line growth.

• Profitability is understated due to non-cash amortization of forgivable loans used in talent acquisition.

Operational metrics and utilization

• Target utilization rate is mid-70s percent, achieved consistently over the past decade, though 2023 ended at 70% due to demand volatility and low attrition.

• Legal and regulatory practices typically have higher utilization than management consulting.

• Headcount growth is tied to utilization; current focus is on increasing utilization before expanding headcount.