WASHINGTON, April 25, 2024 (GLOBE NEWSWIRE) — FTI Consulting, Inc. (NYSE: FCN) today released financial results for the first quarter ended March 31, 2024.
First quarter 2024 revenues of $928.6 million increased $121.8 million, or 15.1%, compared to revenues of $806.7 million in the prior year quarter. The increase in revenues was primarily due to higher demand across all business segments. Net income of $80.0 million compared to $47.5 million in the prior year quarter. The increase in net income was primarily due to higher revenues, a lower effective tax rate and lower FX remeasurement losses compared to the prior year quarter, which was partially offset by an increase in compensation and selling, general and administrative (“SG&A”) expenses compared to the prior year quarter. Adjusted EBITDA of $111.1 million, or 12.0% of revenues, compared to $78.4 million, or 9.7% of revenues, in the prior year quarter. First quarter 2024 earnings per diluted share (“EPS”) of $2.23 compared to $1.34 in the prior year quarter.
Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, “Our sustained double-digit organic revenue growth this quarter reflects strong underlying business performance, which, in turn, reflects continued progress on our twin overriding goals: continuing to help clients with their most fundamental opportunities and challenges, and continuing to attract and develop terrific professionals.”
Cash Position and Capital Allocation
Net cash used in operating activities of $274.8 million for the quarter ended March 31, 2024 compared to $254.2 million for the quarter ended March 31, 2023. The year-over-year increase in net cash used in operating activities was primarily due to an increase in salaries, higher annual bonus payments and an increase in forgivable loan issuances, which was partially offset by higher cash collections compared to the prior year quarter.
Cash and cash equivalents of $244.0 million at March 31, 2024 compared to $238.5 million at March 31, 2023 and $303.2 million at December 31, 2023. Total debt, net of cash and short-term investments, of ($39.0) million at March 31, 2024 compared to $122.7 million at March 31, 2023 and ($328.7) million at December 31, 2023. The sequential increase in total debt, net of cash and short-term investments, was primarily due to higher borrowings under the Company’s senior secured bank revolving credit facility, which were primarily used for annual bonus payments.
There were no share repurchases during the quarter ended March 31, 2024. As of March 31, 2024, approximately $460.7 million remained available for common stock repurchases under the Company’s stock repurchase program.
First Quarter 2024 Segment Results
Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $50.4 million, or 16.0%, to $366.0 million in the quarter compared to $315.7 million in the prior year quarter. The increase in revenues was primarily due to higher restructuring, business transformation & strategy and transactions revenues. Adjusted Segment EBITDA of $75.2 million, or 20.6% of segment revenues, compared to $51.8 million, or 16.4% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation and SG&A expenses compared to the prior year quarter.
Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $18.3 million, or 11.6%, to $176.1 million in the quarter compared to $157.7 million in the prior year quarter. Acquisition-related revenues contributed $0.5 million in the quarter. The increase in revenues was primarily due to higher demand and realized bill rates for investigations and disputes services. Adjusted Segment EBITDA of $33.7 million, or 19.1% of segment revenues, compared to $21.8 million, or 13.8% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation compared to the prior year quarter.
Economic Consulting
Revenues in the Economic Consulting segment increased $35.0 million, or 20.6%, to $204.5 million in the quarter compared to $169.6 million in the prior year quarter. The increase in revenues was primarily due to higher demand and realized bill rates for non-merger and acquisition (“M&A”)-related antitrust and financial economics services. Adjusted Segment EBITDA of $14.2 million, or 6.9% of segment revenues, compared to $14.2 million, or 8.4% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to an increase in compensation, which includes an increase in variable compensation and the impact of a 5.8% increase in billable headcount, higher contractor costs and an increase in SG&A expenses, primarily related to an increase in bad debt, compared to the prior year quarter.
Technology
Revenues in the Technology segment increased $10.1 million, or 11.1%, to $100.7 million in the quarter compared to $90.6 million in the prior year quarter. The increase in revenues was primarily due to higher demand for M&A-related “second request” and information governance, privacy & security services, which was partially offset by lower demand for investigations services. Adjusted Segment EBITDA of $14.6 million, or 14.5% of segment revenues, compared to $15.4 million, or 17.0% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to an increase in compensation, which includes the impact of an 11.2% increase in billable headcount, higher as-needed consultant costs and an increase in SG&A expenses compared to the prior year quarter.
Strategic Communications
Revenues in the Strategic Communications segment increased $8.1 million, or 11.1%, to $81.2 million in the quarter compared to $73.1 million in the prior year quarter. Excluding the estimated positive impact from foreign currency translation, revenues increased $7.1 million, or 9.7%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for public affairs and corporate reputation services. Adjusted Segment EBITDA of $12.4 million, or 15.3% of segment revenues, compared to $9.6 million, or 13.1% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation and higher SG&A expenses compared to the prior year quarter.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 8,000 employees located in 33 countries and territories, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $3.49 billion in revenues during fiscal year 2023. More information can be found at www.fticonsulting.com.
