FTI sulting(FCN) - 2024 Q2 - Quarterly Results

Financial Performance - Revenue for Q2 2024 was $949.2 million, up 9.8% year-over-year from$ 864.6 million[38]. - Adjusted EBITDA increased by 15.7% year-over-year, reflecting strong performance across all segments, particularly in corporate finance and restructuring, economic consulting, and technology[17]. - Net income rose to $83.9 million, compared to$ 62.4 million in the prior year quarter, driven by higher revenues and a lower effective tax rate[38]. - Adjusted segment EBITDA for the quarter was $66.5 million, representing 19.1% of segment revenues, compared to 14.3% in the prior year quarter[40]. - Adjusted segment EBITDA for Q2 2024 was$ 115.9 million, representing 12.2% of revenues, an increase from $100.2 million or 11.6% in the prior year quarter[63]. - Free cash flow for the quarter was$ 125.2 million, with total debt net of cash at negative $166.4 million as of June 30, 2024[73]. - The company reported a revenue increase of 15% year-over-year, reaching$ 1.2 billion in Q3 2023[132]. - The company provided a forward guidance of 10% revenue growth for the next quarter, projecting $1.32 billion[132]. Tax and Expenses - Effective tax rate for Q2 2024 was 18.2%, down from 26.7% in the prior year quarter, with an expected full-year rate of 20% to 22%[37]. - SG&A expenses were$ 206.2 million, accounting for 21.7% of revenues, compared to 21.6% in the prior year quarter[18]. - The effective tax rate for Q2 2024 was 18.2%, down from 26.7% in the prior year quarter, primarily due to favorable tax adjustments related to share-based compensation[63]. - Cash levels increased by $23 million quarter-on-quarter, with less interest expense compared to the same period last year[110]. - Cost-cutting measures implemented resulted in a 5% reduction in operational expenses, saving$ 10 million[132]. Revenue Growth by Segment - Business transformation and strategy revenues grew by 24% year-over-year, while transaction revenues increased by 13%[41]. - Economic consulting segment revenues reached a record $230.9 million, increasing by 14.4% year-over-year, driven by higher demand for M&A-related antitrust services[67]. - Technology segment revenues increased by 18.9% year-over-year to$ 115.9 million, primarily due to higher demand for M&A-related second request services[69]. - Corporate finance and restructuring revenues decreased by $18 million (4.9%) sequentially, impacted by a 13% decline in restructuring revenues[41]. Headcount and Talent Acquisition - Billable headcount increased by 103 professionals (1.7%) year-over-year, while non-billable headcount rose by 81 professionals (5%)[19]. - The company announced 19 senior managing director hires, with an additional 15 expected to join soon[12]. - The company plans to welcome over 300 campus hires in the second half of the year, indicating a focus on talent acquisition[51]. - The hiring strategy involves lateral hires, with a productivity curve indicating losses in the first year, breakeven in the second, and profitability in the third year[98]. - The company aims for mid to high single-digit growth in headcount over the long term, which is expected to positively impact revenue growth[127]. - The management emphasizes the importance of building a strong talent pool to support future growth[130]. Strategic Initiatives - Revenue guidance for 2024 has been raised to a range of$ 3.70 billion to $3.79 billion, up from the previous range of$ 3.65 billion to $3.79 billion[49]. - Earnings per share (EPS) guidance has also been revised upwards to a range of$ 8.10 to $8.60, compared to the previous range of$ 7.75 to $8.50[49]. - The company plans to pay down its small revolver and maintain sufficient capital for organic growth investments[90]. - The company has tough filters for acquisitions and will act opportunistically when the right opportunities arise[90]. - The company plans to enter two new international markets by Q2 2024, aiming for a 15% revenue contribution from these markets[132]. - The company announced a strategic acquisition of a tech startup for$ 100 million to bolster its product offerings[132]. Customer and Market Insights - User data showed a growth of 25% in active users, totaling 5 million by the end of the quarter[132]. - New product launches contributed to a 20% increase in sales, with the latest product generating $200 million in its first month[132]. - Market expansion efforts have led to a 30% increase in market share in the Asia-Pacific region[132]. - Customer satisfaction ratings improved by 10% following the implementation of new service protocols[132]. Economic Outlook - The company expects restructuring levels to remain consistent with Q2 levels for the remainder of the year[124]. - There is a consensus among rating agencies that speculative debt default rates are not expected to rise[113]. - There is a focus on using cash wisely to create long-term value, avoiding unnecessary expenditures[91]. - Economic consulting segment showed strong revenue growth, with EBITDA margins remaining high despite competitive pressures[100].