Charles River Associates — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue increased 15.6% year-over-year to $214.9 million for the fiscal third quarter ended October 3, 2026.
• Net income increased 21.2% year-over-year to $13.9 million (6.5% of revenue), compared to $11.5 million (6.2% of revenue) in the prior year quarter.
• Non-GAAP net income increased 1.5% year-over-year to $13.9 million (6.4% of revenue), compared to $13.7 million (7.3% of revenue) in the prior year quarter.
• Earnings per diluted share increased 27.2% year-over-year to $2.20 from $1.73; non-GAAP earnings per diluted share increased 6.3% year-over-year to $2.19 from $2.06.
• Non-GAAP EBITDA increased 11.2% to $27.1 million (12.6% of revenue), compared to $24.4 million (13.1% of revenue) in the prior year quarter.
• Utilization was 78% and quarter-end consultant headcount increased 6.2% year-over-year.
• Year-to-date revenue was $626.7 million and year-to-date net income was $38.5 million (6.2% of revenue).
• Year-to-date non-GAAP EBITDA was $77.1 million (12.3% of revenue).
• Cash and cash equivalents were $20.4 million as of October 3, 2026, compared to $18.2 million as of January 3, 2026.
• Total liabilities were $487.9 million as of October 3, 2026, compared to $415.3 million as of January 3, 2026.
• Revolving line of credit usage was $75.0 million as of October 3, 2026, compared to $34.0 million as of January 3, 2026.
• Non-current portion of term loan was $72.9 million as of October 3, 2026.
• Net cash used in operating activities for the year-to-date period was $43.9 million.
• Net cash provided by financing activities for the year-to-date period was $52.1 million.
• Cash dividends and dividend equivalents paid were $11.0 million for the year-to-date period.
• Repurchase of common stock was $49.3 million for the year-to-date period.

Guidance and Future Outlook:

• Full-year fiscal 2026 revenue guidance on a constant currency basis was increased to a range of $830 million to $840 million, up from the prior range of $805 million to $820 million.
• Full-year fiscal 2026 non-GAAP EBITDA margin guidance on a constant currency basis was narrowed to a range of 12.2% to 12.8%, compared to the prior range of 12.0% to 13.0%.
• The constant currency adjustment is expected to decrease reported annual revenue by approximately $2.9 million and reported annual EBITDA by approximately $0.4 million for fiscal 2026.
• Non-cash forgivable loan amortization is expected to increase in fiscal 2026 by approximately $15 million, reflecting investments in talent to drive profitable growth.
• Fiscal 2026 returns to a typical 52-week year, whereas fiscal 2025 contained an extra week (53-week year).

Business Segments and Product Lines:

• Seven practices grew year-over-year, representing approximately 95% of total third-quarter revenue.
• Forensic Services, Life Sciences, and Risk, Investigations & Analytics practices each posted double-digit revenue growth year-over-year.
• Antitrust & Competition Economics practice posted a new high for quarterly revenue.
• Legal & Regulatory offerings grew 15.7% year-over-year.
• Management Consulting services increased 9.8% year-over-year.
• North American operations increased 18.0% year-over-year.
• International operations grew 6.2% year-over-year.

Market and Competitive Landscape:

• Management stated the company remains confident in its competitive position.
• The company noted that uncertain global macroeconomic, business, and political conditions can affect clients and the business.
• Forward-looking statements cite potential risks including changes in general and industry-specific economic conditions, timing of engagements, competitive services and pricing, and the development and use of artificial intelligence.

Risks and Challenges:

• Risks include the possibility that demand for services may decline due to economic conditions, effects of competitive services and pricing, and the development and use of artificial intelligence.
• Challenges include the ability to attract and retain key employees or non-employee experts and the inability to integrate and utilize existing consultants.
• Risks also include global economic conditions, foreign currency exchange rate fluctuations, financing risks, unanticipated expenses, risks inherent in international operations, changes in tax law or accounting standards, and the ability to collect on forgivable loans.
• Professional and other legal liability or settlements are identified as potential risks.

Management Commentary and Tone:

• Paul Maleh, President and CEO, described the results as the company's best-ever third-quarter performance, citing record top-line performance and highest third-quarter profits in history.
• Management characterized the financial performance as having "broad-based contributions," reflecting the quality and depth of the portfolio.
• The year-to-date performance represents the best first three quarters of revenue and non-GAAP EBITDA in the company's history.
• Management expressed confidence in the competitive position, reflected in the decision to raise the quarterly cash dividend.

Other Key Points:

• The company increased its quarterly cash dividend by 17.5%, from $0.57 to $0.67 per common share.
• This marks the tenth anniversary of CRA's inaugural dividend and the tenth consecutive annual increase.
• The dividend is payable on December 11, 2026, to shareholders of record as of November 24, 2026.
• CRA returned $3.6 million of capital to shareholders via dividend payments in the third quarter.
• The company does not provide reconciliations of annual non-GAAP EBITDA margin guidance to GAAP net income margin due to uncertainty regarding unusual gains or charges, foreign currency exchange rates, and the impact of equity awards on taxes.