CRA International, Inc. (NASDAQ:CRAI), a leading global consulting firm, has reported exceptional financial results for the first quarter of fiscal 2024, showcasing its ability to navigate the evolving market landscape and deliver value to its clients.
Financials
In the first quarter of fiscal 2024, CRA reported revenues of $171.8 million, a 12.4% increase from the $152.8 million reported in the same period of the previous year. This impressive performance was driven by broad-based contributions, with 8 out of 11 of the company's practices reporting year-over-year growth. The company's legal and regulatory services segment led the way, with a 16% increase in revenue compared to the first quarter of fiscal 2023.
CRA's net income for the fiscal year 2023 was $38.5 million, while its annual revenue reached $624.0 million. The company's operating cash flow for the year was $60.1 million, and its free cash flow was $57.7 million. These strong financial results demonstrate CRA's ability to consistently deliver value to its shareholders.
During the first quarter of fiscal 2024, CRA's non-GAAP net income, earnings per diluted share, and EBITDA all increased year-over-year by 48%, 52%, and 34%, respectively, setting new quarterly records for the company. This impressive profitability growth was driven by the company's ability to effectively manage its costs and leverage its operational efficiency.
CRA's geographic diversification is also a key strength, with approximately 17% of its net revenues in the first quarter of fiscal 2024 coming from outside the United States, compared to 23% in the same period of the previous year. This balanced approach to revenue generation helps the company mitigate risks and capitalize on growth opportunities across different markets.
Business Overview
Antitrust & Competition Economics
The company's Antitrust & Competition Economics practice was a standout performer during the quarter, establishing a new high for quarterly revenue. CRA experts were retained by Cisco to provide economic analyses across worldwide jurisdictions in support of its $28 billion acquisition of Splunk, a leader in cybersecurity. The practice also continued to support clients in legal disputes, with its consultants preparing and delivering expert reports and testimony in antitrust class actions, international disputes, and other matters across various industries.
Energy
CRA's Energy practice also had a strong quarter, providing services to utilities, large energy consumers, and government agencies. The practice assisted clients with developing integrated resource plans, evaluating reliability risks, and supporting data center operators with market modeling, energy procurement, rate design, and utility negotiations.
Financial Economics
The company's Financial Economics practice continued to assist multiple banks and their counsel in responding to regulatory inquiries on overdraft, non-sufficient funds, and related fees charged on deposit account activity. The practice also prepared a range of fair lending analyses for a large national bank and advised the bank on the development of its internal fair lending compliance monitoring procedures.
Forensic Services
CRA's Forensic Services practice experienced strong demand from clients seeking help with allegations of fraud and misconduct, as well as responding to cyber incidents. The practice's digital forensic experts were retained to search for and purge any remaining files that had originated from the plaintiff's business in a trade secret litigation matter. The practice also investigated suspicious activity involving a national law firm's network and helped the firm notify affected parties and bolster its information security environment.
Labor & Employment
The company's Labor & Employment practice continued to assist clients in navigating critical employment issues, including proactive assessments of compensation and promotion decisions, as well as examining the exposure associated with the miscalculation of the regular rate of pay for non-exempt employees.
Risk, Investigations & Analytics
CRA's Risk, Investigations & Analytics practice executed several large multidisciplinary investigative and expert assignments during the quarter, including investigating inconsistencies in revenue and receivables reporting for a U.S.-based software company and providing expert support to a banking institution related to accusations of inadequate due diligence and transaction monitoring.
Outlook
Despite the strong start to the year, CRA is maintaining its full-year financial guidance, citing ongoing macroeconomic uncertainties that could affect its business. The company is trending towards the top half of its revenue and profit ranges, but is waiting for another quarter of performance before providing any updated thoughts on its full-year guidance.
Liquidity
CRA's balance sheet remains strong, with $37.1 million in cash and cash equivalents and $175.5 million of available capacity on its revolving credit facility as of the end of the first quarter. The company returned $12.3 million to shareholders during the quarter, consisting of $3.1 million in dividend payments and $9.2 million in share repurchases.
Conclusion
Overall, CRA's impressive first-quarter results, diversified service offerings, and strong financial position position the company well for continued success in the years ahead. The company's focus on delivering value to its clients, investing in its talent, and returning capital to shareholders make it an attractive investment opportunity for those seeking exposure to the consulting services industry.