Exponent (EXPO) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenues increased 1% year-over-year to $142 million, driven by growth in dispute-related services in construction, automotive, and medical device sectors, while proactive risk management in utilities offset softer demand in chemical regulatory work.

• Net income for Q2 2025 decreased 9% year-over-year to $26.6 million ($0.52 per diluted share), due to higher compensation and operating expenses and a lower tax benefit from stock-based awards.

• Billable hours declined 6% year-over-year to 359,000; utilization dropped to 72% from 75.1%; average technical FTEs were 958, down 2%.

• Early-stage work in digital health, AI, AR/VR, energy transition, and distributed energy systems showed encouraging momentum for long-term growth.

• Recruiting narrowed the technical FTE headcount gap from 5%-6% to 2% by quarter-end, with further increases expected in the second half.

Financial highlights

• Q2 2025 total revenues were $142 million (up 1% year-over-year); net revenues before reimbursements were flat at $132.9 million.

• Net income for Q2 2025 was $26.6 million ($0.52 per diluted share), down from $29.2 million ($0.57 per share) a year ago.

• EBITDA for Q2 2025 was $37 million (27.8% margin), down from $39.9 million (30.2%) last year.

• Cash and cash equivalents at July 4, 2025, were $231.8 million, down from $258.9 million at January 3, 2025.

• Paid $31.6 million in dividends and repurchased $32.7 million of stock in H1 2025.

Outlook and guidance

• Q3 2025 net revenues before reimbursements expected to rise mid-single digits year-over-year; EBITDA margin guidance at 26.75%-27.75%.

• Full-year 2025 net revenues before reimbursements anticipated to grow low single digits; EBITDA margin expected at 26.5%-27%.

• Q4 2025 will face a 6% revenue headwind due to fewer workdays versus Q4 2024; fiscal 2025 returns to a 52-week year.

• Headcount expected to be up 1%-2% in Q3 and 4% higher by year-end; utilization projected at ~72% for FY2025, with realized rate increases of 4%-5%.

• Stock-based compensation for FY2025 expected at $23.5M-$24M; capital expenditures at $10M-$12M.