Exponent — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues increased 18% year-over-year to $173.7 million for the third quarter of 2026, compared to $147.1 million in the third quarter of 2025.
• Revenues before reimbursements increased 12% year-over-year to $153.1 million for the third quarter of 2026, compared to $137.1 million in the prior year period.
• Net income increased to $30.9 million ($0.64 per diluted share) for the third quarter of 2026, up from $28.0 million ($0.55 per diluted share) in the same period of 2025.
• EBITDA increased to $45.0 million for the third quarter of 2026, representing 29.4% of revenues before reimbursements, compared to $38.8 million (28.3% margin) in the prior year period.
• For the first three quarters of 2026, total revenues increased 18% to $511.6 million and revenues before reimbursements increased 11% to $453.7 million, compared to $434.6 million and $407.4 million respectively in 2025.
• Year-to-date net income increased to $89.9 million ($1.83 per diluted share) for the first three quarters of 2026, compared to $81.2 million ($1.58 per diluted share) in 2025.
• Year-to-date EBITDA increased to $130.8 million, representing 28.8% of revenues before reimbursements, compared to $113.4 million (27.8% margin) in the prior year period.
• Consolidated tax rate was 28.0% for the third quarter of 2026 and 28.7% for the first three quarters of 2026.
• Cash and cash equivalents stood at $114.7 million as of October 2, 2026, down from $221.9 million as of January 2, 2026.
• Accounts receivable, net, increased to $209.6 million as of October 2, 2026, from $181.5 million as of January 2, 2026.
• Deferred revenues were $18.5 million as of October 2, 2026, compared to $18.9 million as of January 2, 2026.

Guidance and Future Outlook:

• For the fourth quarter of fiscal 2026, Exponent anticipates revenues before reimbursements to grow 8% to 10% year-over-year.
• For the fourth quarter of fiscal 2026, Exponent anticipates EBITDA to be 26.3% to 26.8% of revenues before reimbursements.
• For the full fiscal year 2026, Exponent anticipates revenues before reimbursements to grow 10% to 11% year-over-year.
• For the full fiscal year 2026, Exponent anticipates EBITDA to be 28.0% to 28.3% of revenues before reimbursements.
• Management raised full-year revenue and margin guidance reflecting year-to-date performance and outlook for the remainder of the year.
• Management expressed confidence in the long-term growth trajectory driven by rapid technological innovation, increasing complexity, and rising societal expectations for safety and reliability.

Business Segments and Product Lines:

• The engineering and other scientific segment represented 85% of revenues before reimbursements in the third quarter and first three quarters of 2026.
• Revenues before reimbursements in the engineering and other scientific segment increased 13% year-over-year in both the third quarter and first three quarters of 2026.
• Growth in the engineering segment was driven by user research activity in health applications, dynamic environments, and sensory perception, as well as dispute-related services in chemical, consumer products, and advanced transportation sectors.
• The environmental and health segment represented 15% of revenues before reimbursements in the third quarter and first three quarters of 2026.
• Revenues before reimbursements in the environmental and health segment increased 3% in the third quarter and 4% in the first three quarters of 2026 year-over-year.
• Growth in the environmental and health segment was driven by projects assessing the effects of chemicals on human health and the environment.

Market and Competitive Landscape:

• The company operates in a market shaped by rapid technological innovation, increasing complexity, and the convergence of digital and physical worlds.
• Demand is driven by clients' need to validate AI-enabled systems, strengthen critical infrastructure, and understand user interaction with technology.
• Exponent serves clients across more than a dozen industries, including multinational companies, startups, law firms, insurance companies, and governments.

Risks and Challenges:

• Potential risks include declines in service demand due to changes in economic conditions, timing of engagements, competitive pricing, and the absence of backlog.
• Risks also include the ability to attract and retain key employees, the effects of tort reform and government regulation, and liabilities from claims.
• Management noted that the tax impact of equity awards is uncertain and may have a material effect on GAAP results.

Management Commentary and Tone:

• CEO Dr. Catherine Corrigan stated the company delivered double-digit growth in revenues and earnings, driven by demand for specialized engineering and scientific expertise.
• CFO Eric Anderson highlighted a 77% utilization rate and expanded profitability during the quarter, noting the ability to scale the operating model in response to market demand.
• Management emphasized the company's differentiated position at the convergence of data, computation, and real-world evidence.

Other Key Points:

• Exponent paid $46.1 million in dividends and repurchased $146.1 million of common stock during the first three quarters of 2026.
• The company announced a quarterly cash dividend of $0.31 per share to be paid on December 18, 2026, and reiterated its intent to continue paying quarterly dividends.
• The company operates with 90+ technical disciplines and 950+ consultants across offices in North America, Asia, and Europe.
• EBITDA and EBITDAS are presented as non-GAAP financial measures; management did not provide a reconciliation for EBITDA guidance due to the inability to estimate reconciling items with reasonable certainty.