FTI Consulting — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 revenues reached a record $1.013 billion, an increase of 5.9% (or $56.4 million) compared to $956.2 million in the prior year quarter.
• Net income was $63.4 million, down from $82.8 million in the prior year quarter, primarily due to a $46.0 million special charge and higher direct costs, SG&A expenses, and interest expense.
• Adjusted EBITDA was $153.7 million (15.2% of revenues), up from $130.6 million (13.7% of revenues) in the prior year quarter.
• GAAP EPS was $2.35, down from $2.60 in the prior year quarter; Adjusted EPS was $3.84, up 48% from $2.60 in the prior year quarter.
• Net cash provided by operating activities was $190.4 million for the quarter, compared to $201.9 million in the prior year quarter.
• Cash and cash equivalents stood at $88.1 million at September 30, 2026, down from $146.0 million at September 30, 2025.
• Total debt was $852.0 million at September 30, 2026, compared to $510.0 million at September 30, 2025.

Guidance and Future Outlook:

• Reaffirmed full year 2026 revenue guidance range of $3.940 billion to $4.100 billion.
• Updated full year 2026 EPS guidance range to $7.55–$8.05, down from the prior range of $8.70–$9.30.
• Raised full year 2026 Adjusted EPS guidance range to $9.50–$10.00, up from the prior range of $9.10–$9.70.
• Expects actions taken in the third and fourth quarters of 2026 to align staffing with demand to generate approximately $80 million in annualized cost savings.
• Expects to record a fourth quarter 2026 special charge of approximately $7 million, bringing the estimated combined special charge for full year 2026 to approximately $53 million.

Business Segments and Product Lines:

• Corporate Finance: Revenues increased 4.8% to $424.4 million, driven by higher success fees and realized bill rates, partially offset by lower demand for turnaround & restructuring and transactions services. Adjusted Segment EBITDA was $102.8 million (24.2% margin).
• Forensic and Litigation Consulting: Revenues increased 0.2% to $195.1 million, driven by higher realized bill rates, partially offset by lower demand for risk & investigations and data & analytics services. Adjusted Segment EBITDA was $38.0 million (19.5% margin).
• Economic Consulting: Revenues increased 9.3% to $189.3 million, driven by higher demand for non-M&A and M&A-related antitrust services, partially offset by lower demand for financial economics services. Adjusted Segment EBITDA was $14.0 million (7.4% margin).
• Technology: Revenues increased 9.7% to $103.2 million, driven by higher demand for M&A-related "second request" services. Adjusted Segment EBITDA was $16.0 million (15.5% margin).
• Strategic Communications: Revenues increased 12.5% to $100.6 million, driven by higher demand for public affairs and corporate reputation services. Adjusted Segment EBITDA was $20.4 million (20.3% margin).

Market and Competitive Landscape:

• Management noted that clients are increasingly turning to the firm for its depth and breadth of capabilities in a world facing major change and disruption.
• The company operates with over 8,200 employees in 32 countries and territories as of September 30, 2026.

Risks and Challenges:

• The decrease in net income was driven by a $46.0 million special charge related to aligning staffing with demand, which included $45.5 million in salary- and benefits-related costs and $0.5 million in non-cash real estate-related costs.
• Higher direct costs, SG&A expenses, and interest expense offset revenue growth and a lower income tax provision.
• The company faces ongoing litigation in FTI Consulting, Inc. et al., v. Jonathan M. Orszag et al., with expenses related to this case classified as Extraordinary Litigation-Related Expenses.

Management Commentary and Tone:

• CEO Steven H. Gunby stated that record results reflect the strength and breadth of the global platform, driven by client demand for the firm's capabilities amidst global change and disruption.
• Management highlighted favorable non-recurring items, including record success fees and a lower effective tax rate, as contributors to the quarter's performance.

Other Key Points:

• The company repurchased 523,588 shares of common stock during the quarter at an average price of $151.55 per share, totaling $79.4 million.
• Approximately $264.7 million remained available for common stock repurchases under the Company's stock repurchase program as of September 30, 2026.
• Billable headcount in the Corporate Finance segment increased 6.3%, and in the Strategic Communications segment increased 5.5% during the quarter.
• The variance between GAAP EPS and Adjusted EPS guidance for full year 2026 is attributed to estimated special charges of approximately $1.55 per share and estimated Extraordinary Litigation-Related Expenses of $0.40 per share.