CRA Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: $210.8 million, a year-over-year increase of 12.8%, marking the highest quarterly revenue in CRA's history.

Profitability: Non-GAAP net income grew by 9%, earnings per diluted share increased by 14.9%, and EBITDA rose by 15.3%.

Consultant Utilization: Increased to 77% from 76% in Q2 2025.

Consultant Headcount: Grew by 3.3% year-over-year to 968.

Non-GAAP SG&A Expenses: Decreased to 15.5% of revenue from 16.3% a year ago.

Effective Tax Rate: Increased to 32.6% from 29.0% year-over-year.

Cash and Debt: Ended the quarter with $21.4 million in cash and $219 million in borrowings, resulting in net debt of $197.6 million.

2Strategic Updates and Business Highlights

Practice Growth: Eight practices contributed to revenue growth, with six (Energy, Finance, Forensic Services, Intellectual Property, Life Sciences, Risk, Investigations & Analytics) achieving double-digit growth.

M&A Activity: CRA's Antitrust & Competition Economics practice capitalized on a record $2.85 trillion in global M&A activity, marking the strongest start to a year since 1980.

New Client Engagements: Notable projects included advising Fivetran on its merger with dbt Labs and significant litigation support in the finance and forensic sectors.

International Operations: Strong performance, particularly in Life Sciences and Antitrust practices, with organic growth in European markets exceeding 30%.

3Forward Guidance and Outlook

Revenue Guidance: Increased for full-year 2026 to a range of $805 million to $820 million (up from $785 million to $805 million).

EBITDA Margin Guidance: Reaffirmed at 12.0% to 13.0%.

Constant Currency Impact: Expected to decrease reported annual revenue by approximately $2.5 million and EBITDA by less than $250,000.

Hiring Plans: Anticipated mid-single-digit growth in headcount by year-end, with a focus on maintaining consultant utilization in the mid to upper 70s.

4Bad News, Challenges, or Points of Concern

Forecasting Challenges: Management expressed caution about forecasting from record performance levels, indicating potential unpredictability in sustaining growth.

Increased Noncash Expenses: Noncash forgivable loan amortization is expected to rise by approximately $15 million in fiscal 2026, impacting EBITDA metrics.

Geopolitical and Economic Risks: Management noted ongoing concerns regarding global macroeconomic conditions that could affect business performance.

5Notable Q&A Insights

Management Consulting Strength: Growth in Life Sciences and Energy practices is expected to persist due to strong demand and high conversion rates of new opportunities.

Antitrust Business Impact: No immediate effects from recent DOJ changes in merger review processes, but potential for increased value in early economic assessments.

Visibility and Comfort Levels: Management is optimistic about growth but acknowledges the challenge of forecasting from unprecedented financial peaks.

International Growth: Strong organic growth in international markets, particularly in Life Sciences and Antitrust, attributed to internal development rather than acquisitions.

Senior Talent Integration: New senior hires are performing above expectations, although their revenue contributions may take time due to non-compete restrictions. This summary encapsulates CRA's robust performance in Q2 2026 while also highlighting strategic initiatives and potential challenges moving forward.