CRA(CRAI) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue increased by 5.9% year over year to $181.9 million, marking the highest quarterly revenue in the company's history [5] - Non-GAAP net income, earnings per diluted share, and EBITDA increased year over year by 11$885 billion during the first quarter, representing a 15% increase compared to the previous year [8] - Total case filings and court judgments increased by 132% compared to the first quarter of fiscal 2024, indicating a robust legal market [8] Company Strategy and Development Direction - The company aims to optimize its service portfolio by reconfiguring teams in targeted areas, affecting approximately 15 individuals [14] - The focus remains on expanding geographic reach and enhancing service offerings, particularly in high-demand areas such as antitrust and life sciences [9][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong start to fiscal 2025, reaffirming full-year financial guidance of $715 million to$725 million in revenue [16] - The company remains cautious about uncertain global macroeconomic conditions that could impact business [17] Other Important Information - The company ended the quarter with $25.6 million in cash and$85 million in borrowings, resulting in net debt of $59.4 million [19] - The effective tax rate for the first quarter was 27.2% on a non-GAAP basis, slightly down from 28% in the previous year [18] Q&A Session Summary Question: April activity and guidance confidence - Management noted that activity levels improved throughout the quarter, with trends from March continuing into April, though it is too early to declare sustained momentum [22][24] Question: Life sciences pipeline and opportunities - The life sciences practice is experiencing success across geographic and business areas, with hopes for continued momentum into Q2 and throughout 2025 [25][26] Question: Headcount growth and retention - The company is focused on optimizing investments and expects headcount growth to align with revenue growth in the medium to long term, despite a recent 5% year-over-year decline [28][30] Question: External factors affecting business activity - Management indicated that various macroeconomic and geopolitical factors create uncertainty, impacting client decisions but noted a general growth across all practices [38][41] Question: Return to office trends - The company has not seen significant shifts in office participation, with employees averaging just over three days in the office per week, consistent with pre-COVID practices [45][46] Question: Restructuring details - Management refrained from providing specifics on the restructuring affecting 15 individuals, emphasizing that it does not reflect the overall health of the practices involved [52][53] Question: Antitrust demand trends - The antitrust and competition economics practice continues to see strong demand, driven by both merger-related activity and ongoing investigations [57] Question: Collaboration across practices - Collaboration across practices and geographies is common and is seen as an underreported strength of the company, enhancing service delivery to clients [60][61]