FTI Consulting (FCN) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues reached $926.0 million, up 3.7% year-over-year but down sequentially, driven by strong demand in Economic Consulting and Technology, while Corporate Finance and Strategic Communications declined; this marked the third highest quarterly revenue in company history but fell short of expectations due to market and idiosyncratic factors.

• Net income for Q3 2024 was $66.5 million, down 20.2% year-over-year, mainly due to higher compensation, SG&A expenses, and FX losses.

• Adjusted EBITDA for Q3 2024 was $102.9 million (11.1% margin), down 13.3% year-over-year and 11.2% sequentially.

• EPS for Q3 2024 was $1.85, a 20.9%–21% decrease from $2.34 in Q3 2023.

• Free cash flow for Q3 2024 surged to $212.3 million, driven by improved cash collections and lower capital expenditures.

Financial highlights

• Year-to-date (nine months) 2024 revenues were $2.80 billion, up 9.3% year-over-year; net income was $230.4 million, up 19.2%.

• Adjusted EBITDA for the nine months was $329.9 million (11.8% margin), up 10.9% year-over-year.

• Cash and cash equivalents stood at $386.3 million at quarter-end, up from $201.1 million a year ago.

• Net cash provided by operating activities for Q3 2024 was $219.4 million, up from $106.7 million in Q3 2023.

• No total debt outstanding as of September 30, 2024; net debt position improved to negative $386.3 million.

Outlook and guidance

• Full-year 2024 revenue guidance narrowed to $3.70–$3.75 billion (previously $3.70–$3.79 billion).

• Full-year 2024 EPS guidance revised to $7.90–$8.35 (prior: $8.10–$8.60); adjusted EPS is not expected to differ from reported EPS.

• Management expects cash flows from operations and available credit to fund needs for at least the next 12 months.

• Capital expenditures for the remainder of 2024 are projected at $14–$17 million.

• Management expects slow revenue momentum to persist into Q4, with typical seasonal slowdown and some large matters winding down.