FTI Consulting Q4 2025 Earnings Call Summary

1Key Financial Results and Metrics

Full Year 2025 Results:

Record revenues of $3.79 billion, up 2.4% from 2024.

Record adjusted EBITDA of $463.6 million.

Record GAAP EPS of $8.24 and adjusted EPS of $8.83.

Q4 2025 Results:

Revenues of $990.7 million, a 10.7% increase year-over-year.

Net income of $54.5 million, up 9.7% from Q4 2024.

GAAP EPS of $1.78, a 29% increase year-over-year.

Adjusted EBITDA of $106.2 million, representing 10.7% of revenues.

2Strategic Updates and Business Highlights

Segment Performance:

CorpFin: Revenues of $423.2 million, up 26.1%, driven by strong demand in turnaround and restructuring services.

FLC: Revenues of $192.9 million, up 9.7%, benefiting from higher bill rates in risk and investigation services.

Economic Consulting: Revenues decreased 14.5% to $176.2 million, impacted by lower demand for antitrust services.

Technology: Revenues of $99 million, up 9.3%, due to increased demand for litigation-related services.

Stratcom: Revenues of $99.4 million, up 14.8%, driven by corporate reputation services.

Talent Investment: Announced 85 senior hires in 2025 with plans for further recruitment in 2026.

3Forward Guidance and Outlook

2026 Guidance:

Revenue expected between $3.94 billion and $4.1 billion.

GAAP EPS projected between $8.90 and $9.50.

Anticipates 6.1% year-over-year growth at the midpoint of revenue guidance.

Expects challenges in the first half of 2026, particularly in Economic Consulting due to prior year disruptions.

4Bad News, Challenges, or Points of Concern

Headwinds:

Economic Consulting and Technology segments faced significant declines, contributing to nearly $100 million of adjusted EBITDA headwind.

Anticipated tough comparisons in the first half of 2026 due to prior year performance.

Increased SG&A expenses expected to rise $45 million in 2026, with Q1 anticipated to be $30 million higher than Q1 2025.

Market Conditions: The company faces uncertainty from regulatory changes and market slowdowns, particularly in the Economic Consulting sector.

5Notable Q&A Insights

Economic Consulting: Management acknowledged ongoing struggles in the Economic Consulting segment, particularly due to the Compass Lexecon situation, with a slow ramp-up in productivity from new hires.

AI Impact: Management views AI as a potential positive disruptor, creating new demand for their services, particularly in regulatory compliance and crisis management.

Capital Deployment: The company remains committed to organic growth and opportunistic share buybacks, with a strong balance sheet allowing for flexibility in capital allocation. Overall, FTI Consulting reported a record year despite facing significant challenges, particularly in certain segments. The outlook for 2026 includes cautious optimism with anticipated growth, although headwinds remain a concern.