[Management View]
FTI Consulting reported resilient results in Q2 2025 despite significant headwinds in the Economic Consulting and Technology segments. Management highlighted the company's ability to weather challenges due to its strong business foundation and strategic investments in talent and capabilities.

[Outlook]
The company narrowed its full-year revenue guidance to $3.66 billion–$3.76 billion and adjusted EPS to $7.80–$8.40, reflecting a cautious outlook due to ongoing challenges in Technology and Economic Consulting. Management anticipates a bottoming of EBITDA in these segments over the coming quarters.

[Financial Performance]
FTI Consulting's total revenues were $943.7 million in Q2 2025, a slight decrease of 0.6% YoY but a 5.1% increase sequentially. Reported EPS was $2.13, down from $2.34 YoY but up from $1.74 in Q1 2025. The Technology segment saw a 27.9% revenue decline, while Corporate Finance & Restructuring achieved record revenue growth of 9% YoY.

[Q&A Highlights]
Question 1: Can you explain the divergence between Economic Consulting and Technology segments?
Answer: Economic Consulting showed strength due to non-M&A related activities, while Technology faced paused or canceled second requests due to regulatory changes.

Question 2: How do you assess the commercial capability of newly recruited academic professionals?
Answer: The company has a long history of integrating academics into its business, with a mix of experienced and new professionals. It will take about a year to fully assess their commercial impact.

Question 3: What is driving the 25% growth in the restructuring segment?
Answer: Growth is driven by the expertise of restructuring professionals globally, LME cases returning for bankruptcy, and increased company-side work.

Question 4: Will the hiring of senior professionals continue at the current pace?
Answer: Hiring is opportunity-driven, and the company will continue to hire when high-quality talent is available, especially amidst competitor disruptions.

Question 5: How do you view the overall regulatory environment's impact on your business?
Answer: The regulatory environment presents more headwinds than tailwinds, affecting various segments differently, but the company remains resilient.

Question 6: What is the expected low point for Economic Consulting?
Answer: The low point in EBITDA is expected in Q3 or Q4 2025, with costs stabilizing and revenue flattening out.

Question 7: What are the drivers of weakness in the transformation strategy?
Answer: Weakness is due to a strong prior year comparison, geographic challenges, and a shift towards success-fee-based work.

Question 8: How do you view your leverage capacity?
Answer: The company has significant leverage capacity, with a gross debt to EBITDA ratio of 1.2 times, and views leverage as an outcome rather than a target.

Question 9: What are the expectations for Technology segment margins?
Answer: Margins are expected to remain under pressure due to pricing challenges, but the company is well-positioned for long-term recovery.

Question 10: Is the $35 million EBITDA hit in Economic Consulting still accurate?
Answer: The impact is larger than initially expected, driven by talent acquisition costs and market challenges in EMEA.

[Sentiment Analysis]
Analysts expressed concern over the challenges in Economic Consulting and Technology but acknowledged the company's strategic resilience. Management maintained a cautiously optimistic tone, emphasizing long-term strength and adaptability.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | Q1 2025 |
|-------------------------------|---------|---------|---------|
| Total Revenues | $943.7M | $949.2M | $898.3M |
| Reported EPS | $2.13 | $2.34 | $1.74 |
| Net Income | $71.7M | $83.9M | N/A |
| Free Cash Flow | $38M | $125.2M | N/A |
| Technology Revenue Decline | 27.9% | N/A | N/A |
| Corporate Finance Revenue | $379.2M | N/A | N/A |

[Risks and Concerns]
Key risks include persistent regulatory challenges impacting Technology and Economic Consulting, potential macroeconomic headwinds, and the impact of talent acquisition costs on short-term profitability.

[Final Takeaway]
FTI Consulting demonstrated resilience in Q2 2025, managing to deliver solid results despite formidable headwinds in key segments. The company's strategic focus on talent acquisition and diversification across business lines positions it well for future growth, although near-term challenges persist. Management's cautious outlook reflects the need to navigate ongoing regulatory and market uncertainties while leveraging its strong business foundation to capitalize on emerging opportunities.