Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• CRA International Inc (NASDAQ:CRAI) delivered record financial results with a 5.9% year-over-year revenue increase to $181.9 million, marking the highest quarterly revenue in the company's history.
• Five practices, including energy, finance, intellectual property, and life sciences, posted double-digit revenue growth, with the antitrust and competition economics practice achieving a new high for quarterly revenue.
• CRA's international operations led with nearly 20% year-over-year revenue growth, showcasing successful geographic expansion.
• Non-GAAP net income, earnings per diluted share, and EBITDA increased by 11%, 13%, and 11% respectively, setting new quarterly records for the company.
• Consultant utilization improved to 76% year-over-year, supported by a replenished sales pipeline and increased project lead flow.

Negative Points

• Consultant headcount decreased by 5% compared to the first quarter of 2024, indicating potential challenges in workforce management.
• Non-GAAP selling, general, and administrative expenses increased slightly to 15.9% of revenue from 15.6% a year ago, suggesting rising operational costs.
• The effective tax rate on a non-GAAP basis was 27.2%, slightly lower than the previous year's 28.0%, but still a significant expense.
• Days Sales Outstanding (DSO) increased to 107 days from 106 days, indicating potential delays in cash collection.
• The company incurred a restructuring charge affecting approximately 15 individuals, highlighting ongoing efforts to optimize the service portfolio.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Signs with BVN.

Q: Can you provide some insights into the activity levels in April and how they impact your confidence in reiterating guidance for the year? A: Paul Malley, CEO: We started the year with a slow January, but activity levels increased in February and March. In April, the trends from March have continued, but it's too early to declare victory. We are cautiously optimistic about maintaining our guidance for the year.

Q: Could you elaborate on the strong performance of the life sciences practice and its future prospects? A: Paul Malley, CEO: The life sciences practice has been performing well, with success across various areas such as litigation strategy and regulatory support. We hope to see this momentum continue into the second quarter and beyond.

Q: What are your plans for headcount growth, and how are you managing retention and attrition? A: Paul Malley, CEO: We are focused on optimizing our investments in talent. While there was a 5% year-over-year decrease in headcount due to previous actions, we are investing in growth across all practices. Retention efforts are ongoing, and the maintenance capital spent aligns with our expectations.

Q: Are there any specific industry verticals showing more activity recently? A: Paul Malley, CEO: All parts of our portfolio are growing, including legal, regulatory, and management consulting services. While growth rates vary, the overall portfolio is performing well, contributing to our strong financial results.

Q: How often does collaboration across practices and offices occur, and is it a significant part of your strategy? A: Paul Malley, CEO: Collaboration across practices and geographies is common and often underreported. We focus on bringing the best talent to client engagements, and as the world becomes more complex, opportunities for collaboration are expected to grow.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.