CRA INTERNATIONAL, INC.

CRA International, Inc. operates as a leading global consulting firm specializing in providing economic, financial and management consulting services, advising clients on economic and financial matters pertaining to litigation and regulatory proceedings, and guiding corporations through critical business strategy and performance-related issues. The industry is characterized by increasing complexity in the economic, legal, and regulatory environment, prompting companies and governments to rely on outside consulting firms for independent and specialized expertise. The market for economic and management consulting services is intensely competitive, highly fragmented, and subject to rapid change, with few barriers to entry.

The company competes primarily with other economic consulting firms and individual academics in the litigation, regulatory, and financial consulting markets, and with other business and management consulting firms, specialized or industry-specific consulting firms, the consulting practices of large accounting firms, and the internal professional resources of existing and potential clients in the management consulting market. Key competitive strengths include a strong reputation for high-quality consulting with a high level of repeat business, a highly educated and experienced consulting staff, an international presence, a diversified business across service offerings and industries, an integrated business model, a diversified client base, an established corporate culture, and access to leading academic and industry experts.

The company generates revenue principally from professional services rendered by its employee consultants, charging clients on a time-and-materials basis in most instances and recognizing revenue in the period services are provided. A portion of revenue is derived from fixed-price engagements, where revenue is recognized using a proportional performance method based on the ratio of costs incurred to total estimated project costs. Revenues also include reimbursements for costs incurred in fulfilling performance obligations, such as travel and out-of-pocket expenses. The company derives substantially all of its professional services fees from the work of its own employee consultants and a portion from the work of its non-employee experts.

The company offers consulting services in two broad areas: litigation, regulatory, and financial consulting and management consulting. In litigation, regulatory, and financial consulting, the company provides services in areas such as antitrust litigation, damages and valuation disputes, financial accounting and valuation, financial economics, forensic and cyber investigations, insurance economics, intellectual property, international arbitration, labor and employment, mergers and acquisitions, regulatory economics and compliance, risk, investigations and analytics, securities and financial markets, and transfer pricing. In management consulting, the company offers services in corporate and business strategy, enterprise risk management, environmental and energy strategy, intellectual property and technology management, organization and performance improvement, and transaction advisory services.

The company has particular industry expertise in blockchain, cryptocurrency, and digital assets; communications and media; consumer products, health, and wellness; energy; entertainment and leisure; financial services; healthcare; life sciences; manufacturing and industrials; natural resources; retail and distribution; technology; and transportation. As of January 3, 2026, the company employed 959 ¹ consultants, consisting of 164 ² officers, 563 ³ other senior staff and 232 ⁴ junior staff. Approximately 79% ⁵ of the senior staff have advanced degrees, with 51% ⁶ of the advanced degrees being doctorate degrees. The company derived approximately 17% ⁷ of consolidated revenues from fixed-price contracts in fiscal 2025 and 18% ⁸ in fiscal 2024 and fiscal 2023.

During fiscal 2025, the company repurchased and retired 252,205 ⁹ shares under its share repurchase program at an average price per share of $186.95 ¹⁰. The Board of Directors authorized an expansion to the existing share repurchase program of an additional $55.0 million ¹¹ in February 2026. The company paid dividends of $13.8 million ¹² during fiscal 2025. As of January 3, 2026, there was $34.0 million ¹³ in borrowings outstanding under the revolving credit facility. The company also issued forgivable loans to employees and non-employee experts, with advances of $87.9 million ¹⁴ during fiscal 2025.

Total revenues increased by $64.2 million ¹⁵, or 9.3% ¹⁶, to $751.6 million ¹⁷ for fiscal 2025 from $687.4 million ¹⁸ for fiscal 2024. Net income increased by $8.1 million ¹⁹ to $54.8 million ²⁰ for fiscal 2025 from $46.7 million ²¹ for fiscal 2024. Diluted net income per share was $8.14 ²² per share for fiscal 2025, compared to $6.74 ²³ per share for fiscal 2024. Utilization was 77% ²⁴ for fiscal 2025, compared to 75% ²⁵ for fiscal 2024. Income from operations was $83.1 million ²⁶ for fiscal 2025, compared to $70.8 million ²⁷ for fiscal 2024.

A key growth vector is the expansion of the management consulting practice, which typically has a higher concentration of fixed-price service engagements. The company notes that revenue derived from fixed-price engagements decreased to 17% ²⁸ of net revenues for fiscal 2025 from 18% ²⁹ for fiscal 2024, and that these contracts would likely grow in number with expansion of that practice. The company also continues to invest in its international presence, with revenues outside of the U.S. increasing to 20% ³⁰ of net revenues for fiscal 2025 from 19% ³¹ for fiscal 2024, and it maintains offices throughout the Americas, Europe, and Australia to address complex issues that span countries and continents.

Another growth vector is the ongoing hiring of consultant employees or groups of consultant employees and the evaluation of opportunities to acquire other businesses. The company states that its business strategy is dependent, in part, upon its ability to grow by hiring consultant employees or groups of consultant employees, and it regularly evaluates opportunities to acquire other businesses. During fiscal 2025, consultant headcount increased by 13 ³² consultants, and the company made $87.9 million ³³ in forgivable loan advances to attract and retain highly skilled professionals.

The filing does not provide specific margin or cost outlook targets. However, the company notes that costs of services (exclusive of depreciation and amortization) as a percentage of net revenue decreased to 69.1% ³⁴ for fiscal 2025 as compared to 69.8% ³⁵ for fiscal 2024, and selling, general and administrative expenses as a percentage of revenues decreased to 18.0% ³⁶ for fiscal 2025 from 18.2% ³⁷ for fiscal 2024. The company also states that a significant majority of its operating expenses, primarily office rent and salaries, are fixed in the short term.

The filing does not provide a detailed operational outlook regarding supply chain, manufacturing capacity, or technology infrastructure investments beyond noting that capital expenditures were $3.9 million ³⁸ in fiscal 2025, primarily related to furniture and leasehold improvements. The company's workforce strategy involves hiring highly qualified consultants, and as of January 3, 2026, it employed 959 ³⁹ consultants.

The company's capital allocation strategy includes share repurchases, dividends, and potential acquisitions. During fiscal 2025, the company repurchased and retired 252,205 ⁴⁰ shares for $47.1 million ⁴¹ and paid $13.8 million ⁴² in cash dividends. As of January 3, 2026, approximately $10.9 million ⁴³ was available for future repurchases under the share repurchase program, which was expanded by an additional $55.0 million ⁴⁴ in February 2026. The company also had $34.0 million ⁴⁵ in borrowings outstanding under its revolving credit facility as of January 3, 2026. The filing does not specify R&D spending levels.

A structural headwind explicitly flagged by management is the potential for clients to terminate engagements at any time, as many engagements depend upon disputes, proceedings, or transactions that involve clients, who may decide to resolve the dispute, abandon the transaction, or file for bankruptcy. The company notes that engagements can terminate suddenly and without advance notice, and because much of its work is project-based rather than recurring, the termination of a single large engagement could have an immediate adverse impact on revenues and results of operations.

Another constraint is the intense competition for hiring and acquisition opportunities, which could increase the compensation offered to potential employees or the prices paid for businesses. The company also faces risks from changes in global economic, business, health and political conditions, which can affect clients' businesses and their demand or ability to pay for services, as well as the market for its services. Additionally, the company's international operations carry financial and business risks, including adverse social, political and economic conditions, unexpected changes in trading policies and regulatory requirements, and fluctuations in currency exchange rates, with revenue generated from U.K.-based operations being approximately 13% ⁴⁶ of total revenues for fiscal 2025.

The company's business depends heavily on the efforts and personal relationships of its employee consultants, and the loss of any key employee or group of employees could adversely affect revenues and results of operations, as many employee consultants can terminate their relationships at any time and the company does not have non-competition agreements with a majority of them. Clients can terminate engagements at any time, and because much of the work is project-based, the termination of a single large engagement could have an immediate adverse impact. The company derives a portion of its revenues from a limited number of large engagements, and failure to obtain a significant number of new large engagements each year could harm the business. The company also faces risks related to its international operations, with revenue from U.K.-based operations being approximately 13% ⁴⁷ of total revenues for fiscal 2025, exposing it to fluctuations in currency exchange rates and adverse political and economic conditions. Additionally, the company's debt obligations, with $34.0 million ⁴⁸ in borrowings outstanding under its revolving credit facility as of January 3, 2026, could adversely affect its ability to obtain further financing and make it more vulnerable to industry downturns.

Management's message emphasizes the company's strong reputation, high level of repeat business, and diversified business model as key drivers of success. The tone is forward-looking, highlighting the company's ability to provide sophisticated consulting services in high-stakes matters. Key strategic priorities include continuing to hire and retain highly qualified consultants, expanding the management consulting practice, and pursuing growth through both organic hiring and acquisitions. The filing states that the company expects to continue to repurchase shares under its share repurchase program and anticipates paying regular quarterly dividends for the foreseeable future, though the declaration of any future dividends is subject to the discretion of the Board of Directors.