CRA International : Prepared CFO Remarks for Q1 2026 Conference Call

Published: 2026-05-07 08:13:12 ET CRAI

Published on 05/07/2026 at 08:13 am EDT

CRA is providing these prepared remarks by CFO Eric Nierenberg in combination with its press release. These remarks are offered to provide the investment community with additional information on CRA's financial results prior to the start of the conference call.

As previously announced, the conference call will be held on May 7, 2026 at 10:00 a.m. ET. These prepared remarks will not be read on the call.

Revenue: $201.0 million

Net income: $11.1 million, or 5.5% of revenue; non-GAAP net income: $13.1 million, or 6.5% of revenue

Earnings per diluted share: $1.69; non-GAAP earnings per diluted share: $1.99

Operating margin: 9.0%; non-GAAP operating margin: 9.8%

Non-GAAP EBITDA: $23.2 million, or 11.5% of revenue

Effective tax rate: 36.0%; non-GAAP effective tax rate: 30.3%

Utilization: 77%

Consultant headcount at the end of Q1 of fiscal 2026: 971, which consists of 170 officers, 598 other senior staff and 203 junior staff

Cash and cash equivalents: $32.5 million at April 4, 2026

Revolving credit facility borrowing capacity: $54.2 million at April 4, 2026

For Q1 of fiscal 2026, revenue was $201.0 million, compared with revenue of $181.9 million for Q1 of fiscal 2025.

The following table outlines CRA's consultant headcount at the end of the stated quarters:

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

Officers

170

164

159

156

Other Senior Staff

598

563

567

557

566

Junior Staff

203

232

237

221

225

Total

971

959

968

937

947

For Q1 of fiscal 2026, company-wide utilization was 77%, compared with 76% for Q1 of fiscal 2025.

For Q1 of fiscal 2026, client reimbursables were $19.1 million, or 9.5% of revenue, compared with $16.5 million, or 9.1% of revenue, for Q1 of fiscal 2025.

For Q1 of fiscal 2026, SG&A expenses were $34.5 million, or 17.2% of revenue, including non-GAAP non-cash charges of $0.2 million associated with portfolio optimization actions, compared with $32.5 million, or 17.9% of revenue, for Q1 of fiscal 2025. Commissions to non-employee experts are included in SG&A expenses. These commissions represented approximately 1.5% of revenue for Q1 of fiscal 2026 and 2.0% for Q1 of fiscal 2025. Excluding these commissions, SG&A expenses were 15.7% of revenue for Q1 of fiscal 2026, compared with 15.9% in Q1 of fiscal 2025.

Fiscal Quarter Ended

$ in 000's

April 4,

2026

As a % of

Revenue

March 29,

2025

As a % of

Revenue

SG&A expenses

34,523

17.2 %

$ 32,538

17.9 %

Less: commissions to non-employee experts

2,915

1.5 %

3,681

2.0 %

SG&A expenses excluding commissions

$ 31,608

15.7 %

$ 28,857

15.9 %

For Q1 of fiscal 2026, depreciation and amortization expenses amounted to $3.4 million, or 1.7% of revenue, compared with $3.4 million, or 1.9% of revenue, for Q1 of fiscal 2025.

For Q1 of fiscal 2026, forgivable loan amortization, including performance award amortization was $13.9 million, or 6.9% of revenue, including non-GAAP non-cash charges of $0.1 million associated with portfolio optimization actions, compared with $3.7 million, or 2.0% of revenue, for Q1 of fiscal 2025, which reflects a non-GAAP non-cash reversal of $5.4 million associated with a previously recorded performance award.

For Q1 of fiscal 2026, share-based compensation expense was approximately $1.4 million, or 0.7% of revenue, compared with $1.4 million, or 0.8% of revenue, for Q1 of fiscal 2025.

For Q1 of fiscal 2026, operating income was $18.0 million, or 9.0% of revenue, compared with operating income of $25.5 million, or 14.0% of revenue, for Q1 of fiscal 2025. Non-GAAP operating income was $19.8 million, or 9.8% of revenue, for Q1 of fiscal 2026, compared with $21.4 million, or 11.8% of revenue, for Q1 of fiscal 2025.

Fiscal Quarter Ended

$ in 000's

April 4,

2026

As a % of

Revenue

March 29,

2025

As a % of

Revenue

Income from operations

$ 18,032

9.0 %

$ 25,548

14.0 %

Adjustments needed to reconcile GAAP income from operations to non-GAAP income from operations:

Restructuring and other (1)(2)

1,759

0.9 %

(4,170)

(2.3)%

Non-GAAP income from operations

$ 19,791

9.8 %

$ 21,378

11.8 %

(1) Fiscal quarter ended April 4, 2026 includes cash severance of $1.6 million and non-cash charges of $1.0 million associated with portfolio optimization actions.

(2) Fiscal quarter ended March 29, 2025 includes $1.2 million of restructuring charges, net of the reversal of $5.4 million of non-cash charges associated with a previously recorded performance award.

For Q1 of fiscal 2026, net interest expense was $1.0 million, or 0.5% of revenue, compared with net interest expense of $0.4 million, or 0.2% of revenue, for Q1 of fiscal 2025.

For Q1 of fiscal 2026, net foreign currency gains were $0.4 million, or 0.2% of revenue, compared with net foreign currency losses of

$0.5 million, or 0.3% of revenue, for Q1 of fiscal 2025.

Foreign currency gains (losses), net, is comprised of net gains and losses on foreign denominated transactions and the revaluation of working capital balances.

The following table outlines CRA's income tax provision recorded and the resulting effective tax rates:

GAAP

Non-GAAP

Fiscal Quarter Ended

$ in 000's

April 4,

2026

March 29,

2025

April 4,

2026

March 29,

2025

Tax Provision

$ 6,267

$ 6,643

$ 5,681

$ 5,696

Effective Tax Rate

36.0 %

27.0 %

30.3 %

27.2 %

Fiscal Quarter Ended

$ in 000's

April 4,

2026

As a % of

Revenue

March 29,

2025

As a % of

Revenue

Income before provision for income taxes

$ 17,399

8.7 %

$ 24,645

13.6 %

Adjustments needed to reconcile GAAP income before provision for income taxes to non-GAAP income before provision for income taxes

Restructuring and other (1)(2)

1,759

0.9 %

(4,170)

(2.3)%

Foreign currency (gains) losses, net

(378)

(0.2)%

474

0.3 %

Non-GAAP income before provision for income taxes

$ 18,780

9.3 %

$ 20,949

11.5 %

GAAP provision for income taxes

$ 6,267

$ 6,643

Tax effect on non-GAAP adjustments

(586)

(947)

Non-GAAP provision for income taxes

$ 5,681

$ 5,696

(1) Fiscal quarter ended April 4, 2026 includes cash severance of $1.6 million and non-cash charges of $1.0 million associated with portfolio optimization actions.

For Q1 of fiscal 2026, net income was $11.1 million, or 5.5% of revenue, or $1.69 per diluted share, compared with net income of

$18.0 million, or 9.9% of revenue, or $2.62 per diluted share, for Q1 of fiscal 2025. Non-GAAP net income for Q1 of fiscal 2026 was

$13.1 million, or 6.5% of revenue, or $1.99 per diluted share, compared with $15.3 million, or 8.4% of revenue, or $2.22 per diluted share, for Q1 of fiscal 2025.

For Q1 of fiscal 2026, non-GAAP EBITDA was $23.2 million, or 11.5% of revenue, compared with $24.8 million, or 13.6% of revenue, for Q1 of fiscal 2025.

For Q1 of fiscal 2026, revenue was $201.0 million, and net income was $11.1 million, or 5.5% of revenue, or $1.69 per diluted share. On a constant currency basis relative to Q1 of fiscal 2025, Q1 of fiscal 2026 revenue would have been lower by $2.6 million at $198.4 million, GAAP net income would have been lower by $0.2 million at $10.9 million, or 5.5% of revenue, and earnings per diluted share would have decreased by $0.04 to $1.65 per diluted share.

For Q1 of fiscal 2026, revenue was $201.0 million, and non-GAAP net income was $13.1 million, or 6.5% of revenue, or $1.99 per diluted share. On a constant currency basis relative to Q1 of fiscal 2025, Q1 of fiscal 2026 revenue would have been lower by $2.6 million at $198.4 million, non-GAAP net income would have been lower by $0.2 million at $12.9 million, or 6.5% of revenue, non-GAAP earnings per diluted share would have decreased by $0.04 to $1.95 per diluted share, and non-GAAP EBITDA would have been lower by $0.3 million at $22.9 million, or 11.5% of revenue.

A description of the process for calculating the measures presented on a constant currency basis is contained under the heading "Non-GAAP Financial Measures" below.

Billed and unbilled receivables at April 4, 2026 were $233.3 million, compared with $223.3 million at March 29, 2025. Current liabilities at April 4, 2026 were $380.8 million, compared with $270.5 million at March 29, 2025.

Total Days Sales Outstanding, or DSO, for Q1 of fiscal 2026 was 100 days, consisting of 58 days of billed and 42 days of unbilled. This compares with 107 days reported for Q1 of fiscal 2025, consisting of 65 days of billed and 42 days of unbilled.

Cash and cash equivalents was $32.5 million at April 4, 2026, compared with $25.6 million at March 29, 2025.

Net cash used in operating activities for Q1 of fiscal 2026 was $113.9 million, compared with net cash used in operating activities of

$80.0 million for Q1 of fiscal 2025.

As of April 4, 2026, there were $192.0 million in borrowings outstanding under CRA's revolving credit facility. At March 29, 2025, there were $85.0 million in borrowings outstanding under CRA's revolving credit facility.

Capital expenditures totaled $2.6 million for Q1 of fiscal 2026, compared with $1.0 million for Q1 of fiscal 2025.

CRA repurchased approximately 116,000 shares of common stock during Q1 of fiscal 2026 for $21.5 million. During the fiscal quarter ended March 29, 2025, CRA did not repurchase any shares under this share repurchase program.

A quarterly cash dividend of $0.57 per common share, for total dividends and dividend equivalents of $3.8 million, was paid in Q1 of fiscal 2026, compared with a quarterly cash dividend of $0.49 per common share, for total dividends and dividend equivalents of $3.5 million paid in Q1 of fiscal 2025.

CRA has derived the condensed consolidated statement of cash flow data for the fourth quarters and the years ended January 3, 2026 and December 28, 2024 from its audited financial statements appearing on Form 10-K for the fiscal year ended January 3, 2026, filed with the Securities and Exchange Commission on February 26, 2026. The condensed consolidated statement of cash flow data for the first, second and third quarters of fiscal year 2025, and the second, and third quarters of fiscal year 2024 have been derived from CRA's unaudited financial statements appearing on Form 10-Q for each of the respective fiscal quarters as well as the consolidated statements of cash flows appearing on Form 10-K for the fiscal years ended January 3, 2026 and December 28, 2024 and have been prepared on the same basis as CRA's audited financial statements.

GAAP Condensed Consolidated Statement of Cash Flows

LTM

($ in 000's)

Q1 2026

2026

2025

Net cash provided by (used in) operating activities

$ (11,471)

$ (113,889)

$ 60,019

$ 36,547

$ 5,852

Net cash used in investing activities

(5,543)

(2,649)

(1,055)

(650)

(1,189)

Net cash provided by (used in) financing activities

22,382

131,282

(64,733)

(32,292)

(11,875)

Effect of foreign exchange rates on cash and cash equivalents

1,530

(458)

1,483

(557)

1,062

Net increase (decrease) in cash and cash equivalents

$ 6,898

$ 14,286

$ (4,286)

$ 3,048

$ (6,150)

Cash and cash equivalents at beginning of period

25,598

18,210

22,496

19,448

25,598

Cash and cash equivalents at end of period

$ 32,496

$ 18,210

$ 22,496

$ 19,448

GAAP Condensed Consolidated Statement of Cash Flows

LTM

($ in 000's)

Q1 2025

2025

2024

Net cash provided by (used in) operating activities

$ 32,821

$ (79,994)

$ 79,424

$ 31,584

$ 1,807

Net cash used in investing activities

(18,367)

(974)

(10,591)

(2,986)

(3,816)

Net cash provided by (used in) financing activities

(25,851)

79,058

(64,629)

(29,927)

(10,353)

Effect of foreign exchange rates on cash and cash equivalents

(127)

797

(1,974)

1,161

(111)

Net increase (decrease) in cash and cash equivalents

$ (11,524)

$ (1,113)

$ 2,230

$ (168)

$ (12,473)

Cash and cash equivalents at beginning of period

37,122

26,711

24,481

24,649

37,122

Cash and cash equivalents at end of period

$ 25,598

$ 26,711

$ 24,481

$ 24,649

Below are the quarterly and last twelve-month reconciliations of GAAP net cash provided by (used in) operating activities for each of the periods presented to non-GAAP adjusted net cash flows from operations. The reconciling items are forgivable loan advances and repayments for each period, which are reported as a component of GAAP net cash provided by (used in) operating activities, along with other non-recurring cash items.

Adjusted Net Cash Flows from Operations

LTM

($ in 000's)

Q1 2026

2026

2025

GAAP net cash provided by (used in) operating activities

$ (11,471)

$ (113,889)

$ 60,019

$ 36,547

$ 5,852

Forgivable loan advances

122,845

62,367

17,571

29,400

13,507

Forgivable loan repayments

(1,383)

(50)

(1,333)

Adjusted net cash flows from operations

$ 109,991

$ (51,572)

$ 77,590

$ 64,614

$ 19,359

Net revenue

$ 770,707

$ 200,975

$ 196,963

$ 185,891

$ 186,878

GAAP net cash provided by (used in) operating activities as a percentage of net revenue

(1.5)%

-56.7%

30.5 %

19.7%

3.1 %

Adjusted net cash flows from operations as a percentage of net revenue

14.3 %

-25.7%

39.4 %

34.8%

10.4 %

Adjusted Net Cash Flows from Operations

LTM

($ in 000's)

Q1 2025

2025

2024

GAAP net cash provided by (used in) operating activities

$ 32,821

$ (79,994)

$ 79,424

$ 31,584

$ 1,807

Forgivable loan advances

67,675

27,431

7,106

14,258

18,880

Forgivable loan repayments

(3,361)

(600)

(2,473)

(288)

Adjusted net cash flows from operations

$ 97,135

$ (53,163)

$ 84,057

$ 45,842

$ 20,399

Net revenue

$ 697,476

$ 181,851

$ 176,435

$ 167,748

$ 171,442

GAAP net cash provided by (used in) operating activities as a percentage of net revenue

4.7 %

(44.0)%

45.0 %

18.8%

1.1 %

Adjusted net cash flows from operations as a percentage of net revenue

13.9 %

(29.2)%

47.6 %

27.3%

11.9 %

In these remarks, CRA has supplemented the presentation of its financial results calculated in accordance with U.S. generally accepted accounting principles or "GAAP" with the following financial measures that were not calculated in accordance with GAAP: non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP EBITDA, non-GAAP income from operations (and non-GAAP operating margin), non-GAAP provision for income taxes (and non-GAAP effective tax rate), SG&A expenses excluding commissions and non-GAAP adjusted net cash flows from operations. CRA believes that these non-GAAP financial measures are important to management and investors because these measures supplement the understanding of CRA's ongoing operating results, financial condition and cash flows. Non-GAAP adjusted net cash flows from operations is used by management to assess CRA's ability to fund items such as the acquisition of talent, office expansions, debt repayment and distributions to shareholders. In addition, non-GAAP net income and non-GAAP EBITDA are used by CRA in its budgeting process, and the non-GAAP adjustments described below are made to the performance measures for some of CRA's performance-based compensation.

As used herein, CRA defines non-GAAP EBITDA as net income before interest expense (net), provision for income taxes, and depreciation and amortization further adjusted for the impact of certain items that we do not consider indicative of its core operating performance, such as non-cash amounts relating to valuation changes in contingent consideration, acquisition-related costs, foreign currency (gains) losses, net, restructuring costs and related tax effects. Non-GAAP net income, non-GAAP income from operations and non-GAAP provision for income taxes also exclude non-cash amounts relating to valuation changes in contingent consideration, acquisition-related costs, foreign currency (gains) losses, net, restructuring costs and related tax effects. The adjustments made to non-GAAP adjusted net cash flows from operations add back forgivable loan issuances, net of repayments, along with other non-recurring cash items. These remarks also present certain current fiscal period financial measures on a "constant currency" basis in order to isolate the effect that foreign currency exchange rate fluctuations can have on CRA's financial results. These constant currency measures are determined by recalculating the current fiscal period local currency financial measure using the specified corresponding prior fiscal period's foreign exchange rates.

All of the non-GAAP financial measures referred to above should be considered in conjunction with, and not as a substitute for, the GAAP financial information presented in these remarks. The financial measures identified in these remarks as "non-GAAP" are reconciled to their GAAP comparable measures either in these remarks or in the attached financial tables. In evaluating these non-GAAP financial measures, note that the non-GAAP financial measures used by CRA may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Fiscal Quarter Ended

April 4,

2026

As a % of

Revenue

March 29,

2025

As a % of

Revenue

Revenues

$ 200,975

100.0 %

$ 181,851

100.0 %

Costs of services (exclusive of depreciation and amortization)

145,029

72.2 %

120,354

66.2 %

Selling, general and administrative expenses

34,523

17.2 %

32,538

17.9 %

Depreciation and amortization

3,391

1.7 %

3,411

1.9 %

Income from operations

18,032

9.0 %

25,548

14.0 %

Interest expense, net

(1,011)

-0.5 %

(429)

-0.2 %

Foreign currency gains (losses), net

378

0.2 %

(474)

-0.3 %

Income before provision for income taxes

17,399

8.7 %

24,645

13.6 %

Provision for income taxes

6,267

3.1 %

6,643

3.7 %

Net income

$ 11,132

5.5 %

$ 18,002

9.9 %

Net income per share:

Basic

$ 1.71

$ 2.65

Diluted

$ 1.69

$ 2.62

Weighted average number of shares outstanding:

Basic

6,512

6,775

Diluted

6,588

6,862

Fiscal Quarter Ended

April 4,

2026

As a % of

Revenue

March 29,

2025

As a % of

Revenue

Revenues

$ 200,975

100.0 %

$ 181,851

100.0 %

Net income

$ 11,132

5.5 %

$ 18,002

9.9 %

Adjustments needed to reconcile GAAP net income to non-GAAP net income:

Restructuring and other (1)(2)

1,759

0.9 %

(4,170)

-2.3 %

Foreign currency (gains) losses, net

(378)

-0.2 %

474

0.3 %

Tax effect on adjustments(1)

586

0.3 %

947

0.5 %

Non-GAAP net income

$ 13,099

6.5 %

$ 15,253

8.4 %

Non-GAAP net income per share:

Basic

$ 2.01

$ 2.25

Diluted

$ 1.99

$ 2.22

Weighted average number of shares outstanding:

Basic

6,512

6,775

Diluted

6,588

6,862

(1) Fiscal quarter ended April 4, 2026 includes cash severance of $1.6 million and non-cash charges of $1.0 million associated with portfolio optimization actions.

Fiscal Quarter Ended

April 4,

2026

As a % of Revenue

March 29,

2025

As a % of

Revenue

Revenues

$ 200,975

100.0 %

$ 181,851

100.0 %

Net income

$ 11,132

5.5 %

$ 18,002

9.9 %

Adjustments needed to reconcile GAAP net income to non-GAAP net income:

Restructuring and other (1)(2)

1,759

0.9 %

(4,170)

-2.3 %

Foreign currency (gains) losses, net

(378)

-0.2 %

474

0.3 %

Tax effect on adjustments(1)

586

0.3 %

947

0.5 %

Non-GAAP net income

$ 13,099

6.5 %

$ 15,253

8.4 %

Adjustments needed to reconcile non-GAAP net income to non-GAAP EBITDA:

Interest expense, net

$ 1,011

0.5 %

$ 429

0.2 %

Provision for income taxes

5,681

2.8 %

5,696

3.1 %

Depreciation and amortization

3,391

1.7 %

3,411

1.9 %

Non-GAAP EBITDA

$ 23,182

11.5 %

$ 24,789

13.6 %

(1) Fiscal quarter ended April 4, 2026 includes cash severance of $1.6 million and non-cash charges of $1.0 million associated with portfolio optimization actions.

April 4,

2026

January 3,

2026

Assets

Cash and cash equivalents

$ 32,496

$ 18,210

Accounts receivable and unbilled services, net

233,262

248,862

Other current assets

50,714

36,057

Total current assets

316,472

303,129

Property and equipment, net

36,312

36,713

Goodwill and intangible assets, net

99,777

100,404

Right-of-use assets

72,101

76,132

Other assets

137,752

112,495

Total assets

$ 662,414

$ 628,873

Liabilities and Shareholders' Equity

Accounts payable

$ 24,273

$ 30,177

Accrued expenses

132,454

223,460

Current portion of lease liabilities

17,239

17,223

Revolving line of credit

192,000

34,000

Other current liabilities

14,875

25,169

Total current liabilities

380,841

330,029

Non-current portion of lease liabilities

70,889

76,009

Other non-current liabilities

12,294

9,237

Total liabilities

464,024

415,275

Total shareholders' equity

198,390

213,598

Total liabilities and shareholders' equity

$ 662,414

$ 628,873

Fiscal Year-to-Date Period Ended

April 4,

2026

March 29,

2025

Operating activities:

Net income

$ 11,132

$ 18,002

Adjustments to reconcile net income to net cash used in operating activities:

Non-cash items, net

10,061

8,112

Accounts receivable and unbilled services

14,724

(2,746)

Working capital items, net

(149,806)

(103,362)

Net cash used in operating activities

(113,889)

(79,994)

Investing activities:

Purchases of property and equipment, net

(2,649)

(974)

Net cash used in investing activities

(2,649)

(974)

Financing activities:

Borrowings under revolving line of credit

208,000

90,000

Repayments under revolving line of credit

(50,000)

(5,000)

Tax withholding payments reimbursed by shares

(1,449)

(2,454)

Cash dividends and dividend equivalents paid

(3,806)

(3,488)

Repurchase of common stock

(21,463)

Net cash provided by financing activities

131,282

79,058

Effect of foreign exchange rates on cash and cash equivalents

(458)

797

Net increase (decrease) in cash and cash equivalents

14,286

(1,113)

Cash and cash equivalents at beginning of period

18,210

26,711

Cash and cash equivalents at end of period

$ 32,496

$ 25,598

Noncash investing and financing activities:

Increase (decrease) in accounts payable and accrued expenses for property and equipment

$ 52

$ (596)

Excise tax on share repurchases

$ (192)

$ 39

Right-of-use assets obtained in exchange for lease obligations

$ -

$ 701

Supplemental cash flow information:

Cash paid for taxes

$ 1,926

$ 3,181

Cash paid for interest

$ 564

$ 131

Cash paid for amounts included in operating lease liabilities

$ 5,956

$ 5,714

Disclaimer

CRA International Inc. published this content on May 07, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 07, 2026 at 12:12 UTC.