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What changed in EXPONENT INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of EXPONENT INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+161 added−173 removedSource: 10-K (2025-02-28) vs 10-K (2024-02-23)

Top changes in EXPONENT INC's 2025 10-K

161 paragraphs added · 173 removed · 125 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

49 edited+14 added−21 removed72 unchanged
Biggest changeOur consultants also evaluated product designs for performance, hazards, and injury risks to assist clients with design modifications, address consumer feedback, and respond to regulators. Biomedical Engineering and Sciences Our Biomedical Engineering and Sciences Practice applies engineering principles and scientific methodologies to medical technologies, including the evaluation of designs and performance of medical devices, pharmaceuticals, and biologics.
Biggest changeAdditionally, they evaluated the implications of utilizing protective devices (such as restraint systems, airbags, and helmets) in reducing the likelihood of injury and assessed injuries in various settings, including workplaces, homes, and recreational activities. Our consultants also evaluated product designs for performance, hazards, and injury risks to assist clients with design modifications, address consumer feedback, and respond to regulatory requirements.
Our projects support many sectors of the construction and engineering industry which include electric and gas utilities, refineries, petrochemical facilities, data centers, building construction, transportation systems, infrastructure, power plants, hospitals, airports, and sporting arenas. Data Sciences The Data Sciences practice comprises our core capabilities in statistics, data analytics, and dedicated data collection.
Our projects support many sectors of the construction and engineering industry which include electric and gas utilities, refineries, petrochemical facilities, data centers, building construction, transportation systems, infrastructure, power plants, hospitals, airports, and sporting arenas. Data Sciences Our Data Sciences Practice comprises our core capabilities in statistics, data analytics, and dedicated data collection.
Our engineers use advanced computational fluid dynamics, fire, and explosion modeling tools to supplement our analytical, experimental, and field-based activities. Preventive services include process safety hazard analysis for the chemical, oil & gas, and semiconductor industries, fire protection engineering, product development support, risk-based asset management, and dust explosion consulting.
Our engineers use advanced computational fluid dynamics, fire, and explosion modeling tools to supplement our analytical, experimental, and field-based activities. Preventive services include process safety hazard analysis for the chemical, oil and gas, and semiconductor industries, fire protection engineering, product development support, risk-based asset management, and dust explosion consulting.
We have also developed analytical tools to assist utility clients assess the risk of ignition from their infrastructure. During the past year, we have continued to grow in our work in oil and gas exploration and production, liquefied natural gas and downstream oil & gas.
We have also developed analytical tools to assist utility clients assess the risk of ignition from their infrastructure. During the past year, we have continued to grow in our work in oil and gas exploration and production, liquefied natural gas and downstream oil and gas.
Our Health Sciences team, working closely with Biomechanics, Biomedical Engineering & Sciences, Data Sciences, Human Factors, Polymer Science & Materials Chemistry, and other practices, has considerable expertise in healthcare data science; strategy, design, and application of health economics and outcomes research such as burden-of-illness assessment; selection, quality assessment, and analysis of electronic health records (EHR) and healthcare claims and the explication of methodological issues such as randomization, bias, data linkages, drug interactions, and identification of high-risk populations.
Our Health Sciences team, working closely with Biomechanics, Biomedical Engineering & Sciences, Data Sciences, Human Factors, Polymer Science & Materials Chemistry, and other practices, has considerable expertise in healthcare data science; strategy, design, and application of health economics and outcomes research such as burden-of-illness assessment; selection, quality assessment, and analysis of electronic health records and healthcare claims and the explication of methodological issues such as randomization, bias, data linkages, drug interactions, and identification of high-risk populations.
During the past year, significant program activities addressed aspects of battery systems, consumer electronics, wearable devices, implantable medical devices, drug delivery systems, medical diagnostics, building materials, water handling systems, oil and gas applications, the plastics supply chain, fire retardancy and flammability, technology 8 scouting, materials science aspects of health risk, service life prediction, sustainability, and intellectual property related to consumer, recreational, medical, pharmaceutical, food packaging and other products.
During the past year, significant program activities addressed aspects of battery systems, consumer electronics, wearable devices, implantable medical devices, drug delivery systems, medical diagnostics, building materials, water handling systems, oil and gas applications, the plastics supply chain, fire retardancy and flammability, technology scouting, materials science aspects of health risk, service life prediction, sustainability, and intellectual property related to consumer, recreational, medical, pharmaceutical, food packaging and other products.
Our consultants are recognized nationally and internationally for their outstanding expertise and credentials, and their decades of experience in government, academia, and industry sectors. Our work has included numerous community and environmental health assessments, disease cluster investigations, survey research, real-world data platforms, cohort and case-control studies, exposure assessment and simulation studies, biologically based modeling, meta-analyses, and state-of-the-art literature reviews.
Our consultants are 10 recognized nationally and internationally for their outstanding expertise and credentials, and their decades of experience in government, academia, and industry sectors. Our work has included numerous community and environmental health assessments, disease cluster investigations, survey research, real-world data platforms, cohort and case-control studies, exposure assessment and simulation studies, biologically based modeling, meta-analyses, and state-of-the-art literature reviews.
Our European and U.S. teams have been working together to help clients navigate and comply with the new FDA MoCRA Cosmetics regulations that took effect in 2023. We also provided proactive and reactive product safety and litigation support. For industrial chemicals, we continued to provide full regulatory support for our clients who prepared and submitted registrations and risk assessments.
Our European and U.S. teams have been working together to help clients navigate and comply with the FDA MoCRA Cosmetics regulations that took effect in 2023. We also provided proactive and reactive product safety and litigation support. For industrial chemicals, we continued to provide full regulatory support for our clients who prepared and submitted registrations and risk assessments.
In recent years, the Thermal Sciences Practice has developed tools to evaluate fire and explosion risks of lithium-ion batteries in applications including consumer products, vehicles, and grid-scale energy storage. We continue to be very active in wildland fire investigation and continue to assist our clients in making informed risk-based decisions related to their assets and wildfires.
In recent years, our Thermal Sciences Practice has developed tools to evaluate fire and explosion risks of lithium-ion batteries in applications including consumer products, vehicles, and grid-scale energy storage. We continue to be very active in wildland fire investigation and continue to assist our clients in making informed risk-based decisions related to their assets and wildfires.
(1994) in Environmental Health from the Harvard University School of Public Health, M.S. (1991) in Environmental Engineering from Northwestern University and B.S. (1989) in Chemical Engineering from the University of California, Santa Barbara. Prior to joining Exponent he was a Vice President with Sciences International. Dr. Reiss is a Fellow of the Society of Risk Analysis. Maureen T.F.
(1994) in Environmental Health from the Harvard University School of Public Health, M.S. (1991) in Environmental Engineering from Northwestern University and B.S. (1989) in Chemical Engineering from the University of California, Santa Barbara. Prior to joining Exponent he was a Vice President with Sciences International. Dr. Reiss is a Fellow of the Society of Risk Analysis. 13 Maureen T.F.
In the area of energy storage, we are a leader in the industry in expertise and capabilities for safety of large format batteries, whether for electric vehicles or distributed storage. 6 Our team of electronic engineers works on failure analysis, product robustness and reliability for consumer devices, industrial electronics and the health industry.
In the area of energy storage, we are a leader in the industry in expertise and capabilities for safety of large format batteries, whether for electric vehicles or distributed storage. Our team of electronic engineers works on failure analysis, product robustness and reliability for consumer devices, industrial electronics and the health industry.
We use our knowledge and experience to understand how and why materials, products, and processes may not perform their intended function. Further, we use this knowledge to help our clients minimize the risk for future failures of new products as well as aging infrastructure.
We use our knowledge and experience to understand how and why materials, products, and processes may not perform 7 their intended function. Further, we use this knowledge to help our clients minimize the risk for future failures of new products as well as aging infrastructure.
Our culture actively supports the development of our professionals and their potential by creating a stimulating, growth-oriented, and inclusive environment. We keep our values and responsibilities front-and-center in everything we do: our hiring, our training, our processes, and our daily effort.
Our culture actively supports the development of our professionals and their potential by creating a stimulating, growth-oriented, and inclusive environment. 11 We keep our values and responsibilities front-and-center in everything we do: our hiring, our training, our processes, and our daily effort.
In each of our practices, we believe that the principal competitive factors are: technical capability and breadth of services, ability to deliver services on a timely basis, professional reputation and knowledge of litigation and 11 regulatory processes.
In each of our practices, we believe that the principal competitive factors are: technical capability and breadth of services, ability to deliver services on a timely basis, professional reputation and knowledge of litigation and regulatory processes.
Thermal Sciences Our Thermal Sciences Practice provides rapid response expert analysis to investigate failures involving thermo-fluid systems, fires, and explosions in industrial, residential, commercial, and transportation sectors. We have investigated and analyzed thousands of thermal incidents ranging from high loss accidents in the oil and gas sector and major wildland fires, to small insurance claims.
Thermal Sciences Our Thermal Sciences Practice provides expert analysis to investigate failures involving thermo-fluid systems, fires, and explosions in industrial, residential, commercial, and transportation sectors. We have investigated and analyzed thousands of thermal incidents ranging from high loss accidents in the oil and gas sector and major wildland fires, to small insurance claims.
We also assist with design and manufacturing failure analyses, root cause assessment, recall management, and medical device explant analysis. In addition, our staff performs analysis of clinical outcomes for medical devices and related procedures using administrative claims databases. Our expertise is also utilized in product liability, intellectual property litigation, technology acquisition and due diligence matters.
We also assist with design and manufacturing failure analyses, root cause assessment, recall management, and medical device explant analysis. In addition, our staff performs analysis of clinical outcomes for medical devices and related procedures using administrative claims databases. Our expertise is also utilized in product liability, intellectual property litigation, regulatory investigation support, technology acquisition and due diligence matters.
The firm leverages over 50 years of experience in analyzing accidents and failures to advise clients as they innovate their technologically complex products and processes, ensure the safety and health of their users, and address the challenges of sustainability.
The firm leverages over 55 years of experience in analyzing accidents and failures to advise clients as they innovate their technologically complex products and processes, ensure the safety and health of their users, and address the challenges of sustainability.
Our vision is to work together, with our teams and our clients, to solve the most formidable scientific and engineering challenges to create a safer, healthier, sustainable world.
Our vision is to work together, with our teams and our clients, to solve the most formidable scientific and engineering challenges to create a safe, healthier, sustainable world.
Our multidisciplinary team has extensive experience investigating a broad variety of health concerns such as claims of adverse health effects from exposures to a wide range of physical agents (e.g., ionizing radiation, and low- and radio-frequency electromagnetic fields); chemical agents (e.g., volatile organic compounds, metals, dusts, air pollutants, mineral fibers, fumes, and nanoparticles); and biological agents (fungi/molds, bacteria, and other micro-organisms).
Our multidisciplinary team has extensive experience investigating a broad variety of health concerns such as claims of adverse health effects from exposures to a wide range of physical agents (e.g., ionizing radiation, and low-and radio-frequency electromagnetic fields); chemical agents (e.g., volatile organic compounds, per- and polyfluoroalkyl substances (PFAS), mineral fibers, metals, air pollutants, fumes, and nanoparticles); and biological agents (fungi/molds, bacteria, and other micro-organisms).
Pricing and Terms of Engagements We provide our services on either a fixed-price basis or on a time and material basis, charging in the latter case hourly rates for each staff member involved in a project, based on their skills and experience. Our standard rates for professionals range from $200 to $985 per hour.
Pricing and Terms of Engagements We provide our services on either a fixed-price basis or on a time and material basis, charging in the latter case hourly rates for each staff member involved in a project, based on their skills and experience. Our standard rates for professionals range from $210 to $1,050 per hour.
Our European and U.S. offices were active in supporting our clients with their E.U. and U.K. Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) and U.S. Toxic Substances Control Act regulatory requirements.
Our European and U.S. offices were active in supporting our clients with their E.U. and U.K. Registration, Evaluation, Authorisation and Restriction of Chemicals and TSCA regulatory requirements.
Her activities at 3M included technology identification, materials selection and qualification, product development, customer support, program management, acquisition integration, intellectual property analysis, and patent litigation support. On February 6, 2024, Dr. Reitman was elected to the National Academy of Engineering. Richard L. Schlenker, Jr., joined the Company in 1990. Mr.
Her activities at 3M included technology identification, materials selection and qualification, product development, customer support, program management, acquisition integration, intellectual property analysis, and patent litigation support. On February 6, 2024, Dr. Reitman was elected to the National Academy of Engineering. Joseph Sala, Ph.D., joined the Company in 2005.
We currently operate the following 17 practices in two reportable operating segments, (i) Engineering and Other Scientific and (ii) Environmental and Health: ENGINEERING AND OTHER SCIENTIFIC • Biomechanics • Biomedical Engineering & Sciences • Buildings & Structures • Civil Engineering • Construction Consulting • Data Sciences • Electrical Engineering & Computer Science • Human Factors • Materials & Corrosion Engineering • Mechanical Engineering • Polymer Science & Materials Chemistry 4 • Thermal Sciences • Vehicle Engineering ENVIRONMENTAL AND HEALTH • Chemical Regulation & Food Safety • Ecological & Biological Sciences • Environmental & Earth Sciences • Health Sciences ENGINEERING AND OTHER SCIENTIFIC Biomechanics Our Biomechanics Practice uses engineering and principles of biomechanics to solve complex problems at the intersection of biology and engineering.
We currently operate the following 16 practices in two reportable operating segments, (i) Engineering and Other Scientific and (ii) Environmental and Health: ENGINEERING AND OTHER SCIENTIFIC • Biomechanics • Biomedical Engineering & Sciences • Civil & Structural Engineering • Construction Consulting • Data Sciences • Electrical Engineering & Computer Science • Human Factors • Materials & Corrosion Engineering • Mechanical Engineering • Polymer Science & Materials Chemistry • Thermal Sciences 4 • Vehicle Engineering ENVIRONMENTAL AND HEALTH • Chemical Regulation & Food Safety • Ecological & Biological Sciences • Environmental & Earth Sciences • Health Sciences ENGINEERING AND OTHER SCIENTIFIC Biomechanics Our Biomechanics Practice applies engineering principles and biomechanical knowledge to address intricate challenges at the intersection of biology, healthcare, and engineering.
Our Human Factors scientists have been actively engaged in research and project work with Advanced Driver Assistance Systems (ADAS) and automated vehicle technology, in order to understand and advise our clients on how these technologies may change the nature and dynamic of driving, and the role and performance of the driver.
Our Human Factors scientists have been actively engaged in research and project work supporting the National Highway Traffic Safety Administration (NHTSA), covering topics such as Advanced Driver Assistance Systems (ADAS) and automated vehicle technology, in order to understand and advise our clients on how these technologies may change the nature and dynamic of driving, and the role and performance of the driver.
During the past year, our biomechanics staff performed analyses of human injuries which occurred while individuals were utilizing a variety of products including recreational vehicles, sporting goods, trucks, trains, aircraft, industrial equipment, and automobiles.
Over the past year, our biomechanics staff conducted analyses of human injuries that occurred while individuals were utilizing a diverse range of products, including recreational vehicles, sporting goods, trucks, trains, aircraft, industrial equipment, and automobiles.
The U.S. side of our business was also involved in many projects related to agrochemical, antimicrobial, emerging technologies and biochemical product regulatory submissions in the U.S., Canada and Mexico. These included new active ingredients, end-use products, emerging technologies and import tolerances (EPA and FDA). Our state registration business remained solid in the U.S.
The U.S. side of our business was also involved in many projects related to agrochemical, antimicrobial, emerging technologies and biochemical product regulatory submissions and approvals in the U.S., Canada, Brazil and Mexico. These included new active ingredients, end-use products, emerging technologies and import tolerances (EPA and FDA). In addition, we have supported several clients in the U.S. with U.S.
The computer science and engineering expertise we offer encompasses a breadth of areas including machine learning and artificial intelligence, information and numerical sciences, algorithms and data structures, computer graphics, computer architecture, networking and communications, as well as security and cryptography. We operate laboratories for testing heavy equipment and electronics and we have a broad capability in analyzing computer software.
The computer science and engineering expertise we offer encompasses a breadth of areas including machine learning and artificial intelligence, information and numerical sciences, algorithms and data structures, computer graphics, computer architecture, networking and communications, as well as security and cryptography.
Our staff, consisting of mechanical, chemical, fire protection, aeronautical & astronautical and nuclear engineers, have assisted clients in assessing risk to, and from, their facilities, consumer product recalls, regulatory compliance and frequently provide expert testimony in domestic litigation and international arbitration.
Information gained from these analyses has allowed us to also assist clients in proactively making their assets and products safer. 8 Our staff, consisting of mechanical, chemical, fire protection, aeronautical and astronautical and nuclear engineers, have assisted clients in assessing risk to, and from, their facilities, consumer product recalls, regulatory compliance and frequently provide expert testimony in domestic litigation and international arbitration.
He was promoted to Principal Engineer in 2005 and was appointed Corporate Vice President in 2014. Dr. James was appointed Group Vice President on January 4, 2020. Dr. James received his Ph.D. (1994) in Metallurgical and Materials Engineering from the Colorado School of Mines and his B.S. (1988) in Metallurgical Engineering from the University of Washington.
James was appointed Group Vice President on January 4, 2020. Dr. James received his Ph.D. (1994) in Metallurgical and Materials Engineering from the Colorado School of Mines and his B.S. (1988) in Metallurgical Engineering from the University of Washington. He is a licensed professional engineer in the states of California and Texas. Prior to joining Exponent, Dr.
Over the past year, we performed a wide array of investigations ranging from assessing damage to electrical power infrastructure from the effect of weather-related events to working with clients to develop sophisticated machine learning algorithms applied to large quantities of unstructured data.
We operate laboratories for testing heavy equipment and electronics and we have a broad capability in analyzing computer software. 6 Over the past year, we performed a wide array of investigations ranging from assessing damage to electrical power infrastructure from the effect of weather-related events to working with clients to develop sophisticated machine learning algorithms applied to large quantities of unstructured data.
During 2023, we provided services representing approximately 22%, 18%, 17% and 11% of revenues to clients in the consumer products industry, energy and utilities industries, transportation industry and chemical industry, respectively.
During 2024, we provided services representing approximately 24%, 19%, 16% and 10% of revenues to clients in the consumer products industry, energy and utilities industries, transportation industry and chemical industry, respectively.
He was promoted to Principal Engineer in 2006 and was appointed Corporate Vice President in 2009. Dr. Pye was appointed Group Vice President in January 2014. Dr. Pye received his Ph.D. (1999) in Aerospace Engineering from Stanford University, M.S. (1993) in Aerospace Engineering from Stanford University, and B.A.Sc. (1992) in Engineering Science from the University of Toronto, Canada.
He was promoted to Principal Engineer in 2006 and was appointed Corporate Vice President in 2009. Dr. Pye was appointed Group Vice President in January 2014 and was appointed Vice President of Global Offices and Innovation on November 22, 2024. Dr. Pye received his Ph.D. (1999) in Aerospace Engineering from Stanford University, M.S.
Catherine Ford Corrigan, Ph.D., joined the Company in 1996. She was promoted to Principal in the Biomechanics practice in 2002 and was appointed Group Vice President in May 2012. Dr. Corrigan was named President in July 2016. She was named Chief Executive Officer and elected to the Board of Directors in May 2018. Dr. Corrigan earned her Ph.D.
There is no family relationship between any of the directors and officers of the Company. 12 Catherine Ford Corrigan, Ph.D., joined the Company in 1996. She was promoted to Principal in the Biomechanics practice in 2002 and was appointed Group Vice President in May 2012. Dr. Corrigan was named President in July 2016.
In addition, we provided many specialist assessments relating to human and environmental exposure, risk and product efficacy as well as national and international Maximum Residue Limit/import tolerance submissions covering countries such as South Korea, Taiwan and Hong Kong.
We have also provided support for reviews of a large number of biocidal products through European and South Korean regulatory 9 reviews. In addition, we provided many specialist assessments relating to human and environmental exposure, risk and product efficacy as well as national and international Maximum Residue Limit/import tolerance submissions covering countries such as South Korea and Japan.
Our consultants specialize in the areas of environmental fate and transport, environmental chemistry and forensics, remediation consulting, environmental engineering and waste management, and natural resources damages assessment. 10 Our expertise also includes hydrology and hydrogeology, modeling and monitoring, water quality, water rights and water resources, extreme weather event and climate change risk management, and evaluation of environmental and social risks.
Our expertise also includes hydrology and hydrogeology, modeling and monitoring, water quality, water rights and water resources, extreme weather event and climate change risk management, and evaluation of environmental and social risks.
Whether the objective is design analysis, component testing, failure analysis, or accident reconstruction, our knowledge of vehicle systems and engineering principles coupled with our experience from conducting full-scale tests aim to add insight and proficiency to every project. 9 ENVIRONMENTAL AND HEALTH SCIENCES Chemical Regulation & Food Safety Our Chemical Regulation and Food Safety Practice includes both technical and regulatory specialists who are experts in dealing with foods, food ingredients, cosmetics, dietary supplements, pesticides and biocides (including conventional chemicals, microbials, antimicrobials/biocides, biopesticides, emerging technologies and products of biotechnology), industrial chemicals, pesticide/biocide devices, consumer products, medical devices and pharmaceuticals.
ENVIRONMENTAL AND HEALTH SCIENCES Chemical Regulation & Food Safety Our Chemical Regulation and Food Safety Practice includes both technical and regulatory specialists who are experts in dealing with foods, food ingredients, cosmetics, dietary supplements, pesticides and biocides (including conventional chemicals, microbials, antimicrobials/biocides, biopesticides, emerging technologies and products of biotechnology), industrial chemicals, pesticide/biocide devices, consumer products, medical devices and pharmaceuticals.
We also capitalize on this knowledge to conduct human error risk and culture assessments to help clients proactively control human performance gaps, improve occupational and process safety performance, and create administrative controls and procedures. 7 In addition to helping clients address the frequency and severity of incidents related to human error, fatigue, and performance, these and other similar project activities can be leveraged to improve efficiency, reliability, and maintainability of normal operations.
In addition to helping clients address the frequency and severity of incidents related to human error, fatigue, and performance, these and other similar project activities can be leveraged to improve efficiency, reliability, and maintainability of normal operations.
He is a Registered Professional Mechanical Engineer in the State of California. Prior to joining Exponent, Dr.
(1993) in Aerospace Engineering from Stanford University, and B.A.Sc. (1992) in Engineering Science from the University of Toronto, Canada. He is a Registered Professional Mechanical Engineer in the State of California. Prior to joining Exponent, Dr.
We offer technical, regulatory, and litigation support to industries that include oil and gas, mining and minerals, chemicals, forest products, railroads, aerospace, development, and trade associations, and to municipal and governmental clients.
We offer technical, regulatory, and litigation support to industries that include oil and gas, mining and minerals, chemicals, forest products, railroads, aerospace, development, and trade associations, and to municipal and governmental clients. Our consultants specialize in the areas of environmental fate and transport, environmental chemistry and forensics, remediation consulting, environmental engineering and waste management, and natural resources damages assessment.
Shepard 63 Chief Human Resources Officer Executive officers of Exponent are appointed by the Board of Directors of the Company (the “Board of Directors”) and serve at the discretion of the Board of Directors until the appointment of their successors. There is no family relationship between any of the directors and officers of the Company.
Schlenker, Jr. 59 Executive Vice President, Chief Financial Officer and Corporate Secretary Executive officers of Exponent are appointed by the Board of Directors of the Company (the “Board of Directors”) and serve at the discretion of the Board of Directors until the appointment of their successors.
The European and U.S. sides of the practice were jointly involved with ongoing support of several new pesticide active ingredients and end-use products. The European side of our business was involved with many projects related to plant protection and biocidal product regulatory submissions, from new active substances and those under review to product-specific dossiers for European member states.
The European side of our business was involved with many projects related to plant protection and biocidal product regulatory submissions, from new active substances and those under review to product-specific dossiers for European Union member states and the United Kingdom. This has included new technologies in plant protection that meet the regulatory pressures to achieve greater sustainability.
Our staff includes 955 employees with advanced degrees, of which 746 employees have achieved doctorate degrees. As of December 29, 2023 approximately 89% of our employees were located in the United States and 11% were located in other global regions. 12 Technical full-time equivalent employees is a key metric that we use to analyze our revenues.
As of January 3, 2025 approximately 88% of our employees were located in the United States and 12% were located in other global regions. Technical full-time equivalent employees is a key metric that we use to analyze our revenues. During 2024 technical full-time equivalent employees decreased 8% to 967 as compared to 1,047 during the prior year.
(1996) in Medical Engineering and Medical Physics and M.S. (1992) in Mechanical Engineering from the Massachusetts Institute of Technology and her B.S. in Bioengineering from the University of Pennsylvania. Prior to joining Exponent, Dr. Corrigan was a researcher in the Orthopedic Biomechanics Laboratory at Beth Israel Hospital and Harvard Medical School. On February 9, 2021, Dr.
She was named Chief Executive Officer and elected to the Board of Directors in May 2018. Dr. Corrigan earned her Ph.D. (1996) in Medical Engineering and Medical Physics and M.S. (1992) in Mechanical Engineering from the Massachusetts Institute of Technology and her B.S. in Bioengineering from the University of Pennsylvania. Prior to joining Exponent, Dr.
EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of Exponent and their ages as of February 23, 2024 are as follows: Name Age Position Catherine Ford Corrigan, Ph.D. 55 President and Chief Executive Officer Eric Guyer, Ph.D. 47 Group Vice President Brad A. James, Ph.D. 58 Group Vice President John D.
The content of our Internet website is not incorporated into and is not part of this Annual Report on Form 10-K. EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of Exponent and their ages as of February 28, 2025 are as follows: Name Age Position Catherine Ford Corrigan, Ph.D. 56 President and Chief Executive Officer Brad A.
We have assessed these risks to high-rise buildings, bridges, tunnels, industrial facilities, pipelines and nuclear power plant structures and provided testimony both in the U.S. and international courts of law. 5 Civil Engineering Our Civil Engineering Practice provides broad expertise that includes geotechnical engineering, geological engineering, engineering geology, and geology to address a host of geo-failures, complex international and domestic construction claims, and disputes involving expert consultation and testimony.
We have assessed such risks to high-rise buildings, bridges, tunnels, industrial facilities, pipelines and nuclear power plant structures and provided testimony in the U.S. and international courts of law. Our expert consultation ensures that clients—from property owners and contractors to utilities and government agencies—receive the highest level of technical support and innovative solutions to complex engineering challenges.
Corrigan was elected to the National Academy of Engineering. Eric Guyer, Ph.D., joined the Company in 2005. He was promoted to Principal Engineer in 2011 and was appointed Corporate Vice President in 2019. Dr. Guyer was appointed Group Vice President on April 1, 2023. Dr. Guyer received his Ph.D. (2005) in Materials Science and Engineering and M.S.
Corrigan was a researcher in the Orthopedic Biomechanics Laboratory at Beth Israel Hospital and Harvard Medical School. On February 9, 2021, Dr. Corrigan was elected to the National Academy of Engineering. Brad A. James, Ph.D., joined the Company in 1994. He was promoted to Principal Engineer in 2005 and was appointed Corporate Vice President in 2014. Dr.
He is a licensed professional engineer 13 in the states of California and Texas. Prior to joining Exponent, Dr. James was employed as a Research Engineer, Materials Performance Division, at the Babcock and Wilcox R&D Center. John D. Pye, Ph.D., joined the Company in 1999.
James was employed as a Research Engineer, Materials Performance Division, at the Babcock and Wilcox R&D Center. Brian Kundert, joined the Company on July 10, 2023 as Vice President - Human Resources and was promoted to Chief Human Resources Officer on March 16, 2024. Prior to joining Exponent, Mr.
Pye, Ph.D. 53 Group Vice President Joseph Rakow, Ph.D. 47 Group Vice President Richard Reiss, Sc.D. 57 Group Vice President Maureen T.F. Reitman, Sc.D. 55 Group Vice President Richard L. Schlenker, Jr. 58 Executive Vice President, Chief Financial Officer and Corporate Secretary Sally B.
James, Ph.D. 59 Group Vice President Brian Kundert 50 Chief Human Resources Officer John D. Pye, Ph.D. 54 Vice President for Global Offices and Innovation Joseph Rakow, Ph.D. 48 Group Vice President Richard Reiss, Sc.D. 58 Group Vice President Maureen T.F. Reitman, Sc.D. 56 Group Vice President Joseph Sala, Ph.D. 48 Group Vice President Richard L.
Our expertise is used to understand and evaluate the interaction between the human body as a biological system and the physical environment to explore the cause, nature, and severity of injuries. Additionally, we utilize biomechanical principles to evaluate injury potential associated the use (and misuse) of consumer and industrial products.
Our expertise enables us to comprehend and evaluate the interaction between the human body as a biological system and the physical environment. This analysis facilitates the identification of the causes, nature, and severity of injuries, as well as the potential impact and optimization of human health and well-being.
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They also looked at the implications of using protective devices (such as restraint systems, airbags, and helmets) on reducing the potential for injury, and assessed injuries in the workplace, in the home, and during recreational activities.
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We apply biomechanical principles to assess the injury potential associated with the use and misuse of consumer and industrial products. Furthermore, we extend these principles to support the development and integration of wearable and digital technology solutions, tailored to specific use cases and user outcomes.
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Buildings & Structures The basic function of a building, bridge, or other type of structure is to provide a safe, durable, economically constructed and environmentally controlled system to house, transport, or otherwise protect occupants and contents.
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Finally, they designed and conducted a series of large-scale laboratory-based and subsequent clinical validation and benchmarking efforts to support the design, development, and adoption of fit-for-purpose solutions. Biomedical Engineering and Sciences Our Biomedical Engineering and Sciences Practice applies engineering principles and scientific methodologies to medical technologies, including the evaluation of designs and performance of medical devices, pharmaceuticals, and biologics.
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If these basic functions are not achieved, it is because one or more aspect(s) of the structures design or construction has failed to meet a performance objective.
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Civil & Structural Engineering Our Civil & Structural Engineering Practice brings together decades of expertise to offer a comprehensive, multidisciplinary approach to promoting the safety, durability, and economic viability of a wide range of infrastructure assets.
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Our architects, structural engineers, and material scientists have been investigating such failures for decades, and we use this experience to solve problems with a variety of structural systems and components, including finding the best repair options and mitigating the risk of future failures.
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We address the challenges inherent in designing, constructing, and maintaining buildings, bridges, tunnels, pipelines, and industrial facilities—investigating the extent to which these structures perform their essential functions under a variety of loading conditions and natural hazards. Our team, which includes structural engineers, geotechnical experts, architects, material scientists, and geologists, is dedicated to identifying and solving complex engineering problems.
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During the past year, we have evaluated numerous problems with residential, commercial, transportation, and industrial structures for owners, designers, and builders at project sites around the world. Our evaluations often include property inspections, laboratory or on-site testing, engineering analysis, and the development of repair recommendations.
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Whether it’s evaluating structural failures due to natural or human-induced phenomena, or investigating soil issues such as landslides, foundation and retaining wall damage, and dam or levee failures, we leverage sophisticated simulation tools, on-site inspections, laboratory testing, and state-of-the-art remote sensing technologies to provide actionable insights and recommendations for remediation. 5 In addition to failure investigations and repair recommendations, we specialize in assessment and mitigation of risk to the built environment associated with hazards such as hurricanes, flooding, wildfires, earthquakes, explosions, ground movement, and aging infrastructure.
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In addition, we have worked with owners to assess and mitigate the risk of failure associated with hazards such as hurricanes, flooding, earthquakes, explosions, ground movement, and aging infrastructure.
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We also capitalize on this knowledge to conduct human error risk and culture assessments to help clients proactively control human performance gaps, improve occupational and process safety performance, and create administrative controls and procedures.
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Examples of geo-failures evaluated by the practice include landslides, foundation and retaining wall failures, pipeline failures, dam and levee failures. The practice’s evaluation of complex construction claims involves geotechnical design issues, site characterization, and damage from adjacent construction.
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Whether the objective is design analysis, component testing, failure analysis, or accident reconstruction, our knowledge of vehicle systems and engineering principles coupled with our experience from conducting full-scale tests aim to add insight and proficiency to every project.
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Over the past year, our consultants have been engaged in a number of investigations related to wildland fires, landslide evaluations, construction claim and defect evaluations, foundation and retaining wall failures, and effects of infrastructure projects on the surrounding environments.
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The European and U.S. sides of the practice were jointly involved with ongoing support of several new pesticide active ingredients and end-use products.
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The practice has been a leader in using advanced remote sensing technologies to evaluate complex problems and applying this state of the art technology to solutions and insight into clients' engineering challenges. This practice provided services for property owners, contractors, design professionals, state agencies, international government agencies, attorneys and insurance carriers.
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Toxic Substances Control Act and USDA Animal and Plant Health Inspection Service compliance. We have supported clients with scientific and regulatory human and environmental exposure, risk assessments and product reviews.
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Information gained from these analyses has allowed us to also assist clients in proactively making their assets and products safer.
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As of January 3, 2025, we employed 1,168 full-time, part-time and intermittent employees, including 917 engineering and scientific staff, 49 technical support staff and 202 administrative and support staff. Our staff includes 874 employees with advanced degrees, of which 683 employees have achieved doctorate degrees.
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This has included new technologies in plant protection that meet the regulatory pressures to achieve greater sustainability. We have provided support for reviews of a large number of biocidal products through European and South Korean regulatory reviews.
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Kundert was most recently the Global Director of Human Resources for the Resilience division at Arcadis, a global design and consulting company, where he worked for 19 years. Mr. Kundert holds a B.A. (1996) in Psychology from the University of California, Berkeley. John D. Pye, Ph.D., joined the Company in 1999.
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In the past few years, we have expanded our expertise to include pharmacoepidemiology; the development and application of real-world evidence (RWE) for regulated medical products (pharmaceuticals and biologics, vaccines, devices, and combination products); and digital therapeutics, across the product life cycle from pre-approval planning to market access to post-approval safety evaluation and regulatory consulting on emergent safety issues.
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He was promoted to Principal Scientist in 2012 and was appointed Corporate Vice President in 2019. Dr. Sala was appointed Group Vice President on November 22, 2024. Dr. Sala received his Ph.D. (2004) in Psychology and M.A. (2001) in Psychology and Brain Sciences from John Hopkins University and B.A. (1998) in Psychology and B.S.
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To enable a culture where diversity, equity, and inclusion are embedded we have articulated four pillars of actions: communication, development, outreach, and recruiting. Communication - Our annual employee survey and Diversity, Equity & Inclusion Advisory Committee help increase transparency and ensure a two-way dialogue between employees and leadership. Development - We foster equitable opportunities via our development pathways.
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(1998) in Administration of Justice from Rutgers University. Prior to joining Exponent, Dr. Sala was a post-doctoral fellow at Stanford University where he focused his research on the cognitive neuroscience of human information processing, the brain mechanisms underlying learning, memory, vision, and cognitive control, and their behavioral manifestations. Richard L. Schlenker, Jr., joined the Company in 1990. Mr.
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Our mentoring, sponsorship, and buddy programs provide unbiased growth opportunities, support, and connection. Outreach - Our Diversity, Equity & Inclusion outreach leverages science, technology, engineering, and math (STEM) to empower the communities around us. Initiatives include staff volunteering in classrooms, professional societies, and direct gifts to universities.
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Schlenker holds a B.S. in Finance from the University of Southern California. 14
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Recruiting - We engage graduate students at more than 100 universities, including those in connection with affinity professional organizations. We employ a behavioral, competency-based interviewing process to actively avoid bias. As of December 29, 2023, we employed 1,320 full-time, part-time and intermittent employees, including 1,047 engineering and scientific staff, 73 technical support staff and 200 administrative and support staff.
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During 2023 technical full-time equivalent employees increased 10% to 1,048 as compared to 955 during the prior year. We attribute our ability to grow technical full-time equivalent employees to a number of factors, including exciting and challenging assignments, strong leadership and management, the opportunity to learn new skills and advance careers, along with competitive and equitable total rewards.
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The content of our Internet website is not incorporated into and is not part of this Annual Report on Form 10-K.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeClimate-related events, including the increasing frequency of extreme weather events and their impact on critical infrastructure, have the potential to disrupt our business. 21 Changes in interpretation and application of tax laws could harm our business, revenue, cash flows and financial results. Tax reform remains a legislative priority for the U.S. government and certain legislations have already been enacted.
Biggest changeChanges in interpretation and application of tax laws could harm our business, revenue, cash flows and financial results. Tax reform remains a legislative priority for the U.S. government and certain legislations have already been enacted. While there is current uncertainty regarding what changes will eventually be enacted, such new laws may affect our operating results and financial conditions.
These can interfere with our global operating model, client relationships, and competitive position. Further escalation of any specific trade tensions between the U.S. and China, or in global trade conflict more broadly could be harmful to global economic growth or to our business in or with China or other countries. Our quarterly results may vary.
These can interfere with our global operating model, client relationships, and competitive position. Further escalation of any specific trade tensions between the U.S. and China, or in global trade conflict more broadly could be harmful to global economic growth or to our business in China or other countries. Our quarterly results may vary.
Such misconduct could include the failure to comply with government procurement regulations, regulations regarding the protection of classified information, regulations prohibiting bribery and other foreign corrupt practices, regulations regarding the pricing of labor and other costs in government contracts, regulations on lobbying or similar activities, regulations pertaining to the internal controls over financial reporting, environmental laws and any other applicable laws or regulations.
Such misconduct could include the failure to comply with government procurement regulations, regulations regarding the protection of classified information, regulations prohibiting bribery and other foreign corrupt practices, regulations regarding the pricing of labor and other costs in government contracts, regulations on lobbying or similar activities, regulations pertaining to the internal controls over financial reporting, environmental laws and any other applicable 18 laws or regulations.
Because a high percentage of our expenses, 20 particularly personnel and facilities related expenses, are relatively fixed in advance of any particular quarter, a variation in the timing of the initiation or the completion of our client assignments can cause significant variations in operating results from quarter to quarter. The market price of our common stock may be volatile.
Because a high percentage of our expenses, particularly personnel and facilities related expenses, are relatively fixed in advance of any particular quarter, a variation in the timing of the initiation or the completion of our client assignments can cause significant variations in operating results from quarter to quarter. The market price of our common stock may be volatile.
To the extent changes in such laws, regulations and enforcement or other factors significantly reduce the exposures of manufacturers, owners, service providers and others to liability, the demand for our services may be significantly reduced. Tort reform can reduce demand for our services. Several of our practices have a significant concentration in litigation support consulting services.
To the extent deregulation and changes in such laws, regulations and enforcement or other factors significantly reduce the exposures of manufacturers, owners, service providers and others to liability, the demand for our services may be significantly reduced. Tort reform can reduce demand for our services. Several of our practices have a significant concentration in litigation support consulting services.
Competitive pressure could reduce the market acceptance of our services and result in limitations in our ability to implement billing rate increases or maintain billing rates that could have a material adverse effect on our business, financial condition or results of operations. We hold substantial investments that could present liquidity risks.
Competitive pressure could reduce the market acceptance of our services and result in limitations in our ability to 19 implement billing rate increases or maintain billing rates that could have a material adverse effect on our business, financial condition or results of operations. We hold substantial investments that could present liquidity risks.
In addition to our offices in the United States, we have a presence in the United Kingdom, Switzerland, Hong Kong, China, Singapore, Ireland, Germany, and Canada, and conduct business in several other countries. We expect to continue to expand globally and our international revenues may account for an increasing portion of our revenues in the future.
In addition to our offices in the United States, we have a presence in the United Kingdom, Switzerland, Hong Kong, China, Singapore, Ireland, and Germany, and conduct business in several other countries. We expect to continue to expand globally and our international revenues may account for an increasing portion of our revenues in the future.
Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward multinational companies, as well as tariffs, export controls, restrictions on outbound investment or other trade barriers, sanctions, currency controls, or changes to tax or other laws or policies, have been and may continue to be disruptive to our business.
Political 20 changes and trends such as populism, protectionism, economic nationalism and sentiment toward multinational companies, as well as tariffs, export controls, restrictions on outbound investment or other trade barriers, sanctions, currency controls, or changes to tax or other laws or policies, have been and may continue to be disruptive to our business.
Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as well as disrupt the management of our business operations. We maintain insurance coverage from third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain specific insurance coverage limits.
Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as well as disrupt the management of our business operations. 21 We maintain insurance coverage from third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain specific insurance coverage limits.
We cannot provide 16 any assurance that we can continue to attract sufficient numbers of highly qualified technical and managerial personnel and retain existing employees. We have experienced and expect to continue to experience employee turnover.
We cannot provide any assurance that we can continue to attract sufficient numbers of highly qualified technical and managerial personnel and retain existing employees. We have experienced and expect to continue to experience employee turnover.
In addition, many states, U.S. federal governmental authorities and non-U.S. jurisdictions have adopted, proposed, or are considering adopting 17 or proposing, additional data security and/or data privacy statutes or regulations.
In addition, many states, U.S. federal governmental authorities and non-U.S. jurisdictions have adopted, proposed, or are considering adopting or proposing, additional data security and/or data privacy statutes or regulations.
We are subject to risks arising from adverse changes in economic and political conditions, both domestically and globally, including unfavorable changes in economic conditions, such as inflation, rising interest rates or a recession, and other events beyond our control, such as geopolitical developments, economic sanctions, natural disasters, pandemics, epidemics, political instability, armed conflicts and wars, including the Russia-Ukraine war and the conflict in the Middle East.
We are subject to risks arising from adverse changes in economic and political conditions, both domestically and globally, including regulatory uncertainty and unfavorable changes in economic conditions, such as inflation, rising interest rates or a recession, and other events beyond our control, such as geopolitical developments, economic sanctions, natural disasters, pandemics, epidemics, political instability, armed conflicts and wars, including the Russia-Ukraine war and the conflict in the Middle East.
Any decision by the client not to exercise contract options or to terminate, cancel, modify or curtail our programs or contracts would adversely affect our revenues, revenue growth and profitability. Risks Related to Our Operations Failure to attract and retain key employees may adversely affect our business. Our business involves the delivery of professional services and is labor-intensive.
Any decision by the client not to exercise contract options or to terminate, cancel, modify or curtail our projects would adversely affect our revenues, revenue growth and profitability. Risks Related to Our Operations 16 Failure to attract and retain key employees may adversely affect our business. Our business involves the delivery of professional services and is labor-intensive.
Illegal or improper conduct by our executive officers, directors, employees, independent consultants or contractors, or others who are subject to our policies and procedures could damage our reputation in the U.S. and internationally, which could adversely affect our existing client relationships or adversely affect our ability to attract and retain new clients, or lead to litigation or governmental or regulatory proceedings in the U.S. or foreign jurisdictions, or could subject us to fines and penalties, loss of security clearances and suspension or debarment from contracting, any or all of which could harm our reputation, reduce our revenue and profits and subject us to criminal and civil enforcement actions. 18 Failure to comply with domestic and international export laws could adversely affect our business.
Illegal or improper conduct by our executive officers, directors, employees, independent consultants or contractors, or others who are subject to our policies and procedures could damage our reputation in the U.S. and internationally, which could adversely affect our existing client relationships or adversely affect our ability to attract and retain new clients, or lead to litigation or governmental or regulatory proceedings in the U.S. or foreign jurisdictions, or could subject us to fines and penalties, loss of security clearances and suspension or debarment from contracting, any or all of which could harm our reputation, reduce our revenue and profits and subject us to criminal and civil enforcement actions.
As of December 29, 2023, we had no impairment charge associated with our investment portfolio relating to such adverse financial 19 market conditions. Although we believe our current investment portfolio has a low risk of impairment, we cannot predict future market conditions or market liquidity and can provide no assurance that our investment portfolio will remain unimpaired.
As of January 3, 2025, we had no impairment charge associated with our investment portfolio relating to such adverse financial market conditions. Although we believe our current investment portfolio has a low risk of impairment, we cannot predict future market conditions or market liquidity and can provide no assurance that our investment portfolio will remain unimpaired.
Our cash equivalent portfolio as of December 29, 2023 consisted primarily of obligations of the U.S. Treasury. We follow an established investment policy to monitor, manage and limit our exposure to interest rate and credit risk.
Our cash equivalent portfolio as of January 3, 2025 consisted primarily of obligations of the U.S. Treasury. We follow an established investment policy to monitor, manage and limit our exposure to interest rate and credit risk.
Impairment of goodwill may require us to record a significant charge to earnings. On our balance sheet as of December 29, 2023, we have $8,607,000 of goodwill subject to periodic evaluation for impairment.
Impairment of goodwill may require us to record a significant charge to earnings. On our balance sheet as of January 3, 2025, we have $8,607,000 of goodwill subject to periodic evaluation for impairment.
Any factors that damage our professional reputation could have a material adverse effect on our business. 15 Our business can be adversely impacted by deregulation or reduced regulatory enforcement.
Proven or unproven allegations against us may damage our professional reputation. Any factors that damage our professional reputation could have a material adverse effect on our business. 15 Our business can be adversely impacted by regulatory uncertainty, deregulation or reduced regulatory enforcement.
If a client's financial difficulties become severe, the client may be unwilling or unable to pay our invoices in the ordinary course of business, which could adversely affect collections of both our accounts receivable and unbilled services. Recent global economic volatility and increased cost of capital could impact the ability of our customers to pay for our services.
If a client's financial difficulties become severe, the client may be unwilling or unable to pay our invoices in the ordinary course of business, which could adversely affect collections of both our accounts receivable and unbilled services.
While we have taken reasonable steps to prevent and mitigate the damage of a security breach by continuously improving our design and coordination of security controls across our business, those steps may not be effective and there can be no assurance that any such steps can be effective against all possible risks.
While we have taken reasonable steps to prevent and mitigate the damage of a security breach by continuously improving our design and coordination of security controls across our business, those steps may not be effective and there can be no assurance that any such steps can be effective against all possible risks. 17 Laws regarding data protection continue to rapidly evolve, and failure to protect client and employee data may have an adverse effect on our business.
For example, in California, wildfire danger increases the probability of planned power outages which may impact our employees’ abilities to commute to work and to stay connected.
For example, in California, wildfire danger increases the probability of planned power outages which may impact our employees’ abilities to commute to work and to stay connected. Climate-related events, including the increasing frequency of extreme weather events and their impact on critical infrastructure, have the potential to disrupt our business.
On occasion, some of our clients have entered bankruptcy, which has prevented us from collecting amounts owed to us. The bankruptcy of a client with substantial accounts receivable could have a material adverse effect on our financial condition and results of operations. Our business is dependent on our professional reputation.
The bankruptcy of a client with substantial accounts receivable could have a material adverse effect on our financial condition and results of operations. Our business is dependent on our professional reputation. The professional reputation of Exponent and its consultants is critical to our ability to successfully compete for new client engagements and attract or retain professionals.
Laws regarding data protection continue to rapidly evolve, and failure to protect client and employee data may have an adverse effect on our business. We manage, utilize, and store sensitive or confidential client and employee data, including personal data and protected health information.
We manage, utilize, and store sensitive or confidential client and employee data, including personal data and protected health information.
Removed
The professional reputation of Exponent and its consultants is critical to our ability to successfully compete for new client engagements and attract or retain professionals. Proven or unproven allegations against us may damage our professional reputation.
Added
To the extent there is global economic volatility or an increase in the cost of capital, there could be an adverse impact on the ability of our customers to pay for our services. On occasion, some of our clients have entered bankruptcy, which has prevented us from collecting amounts owed to us.
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While there is current uncertainty regarding what changes will eventually be enacted, such new laws may affect our operating results and financial conditions.
Added
Many of our engagements center on disputes, litigation and other event-driven occurrences that require independent analysis or expert services. Litigation may be settled or dismissed, and disputes may be resolved, in each case with little or no prior notice to us.
Removed
On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 that includes, among other provisions, changes to the U.S. corporate income tax system, including a fifteen percent minimum tax based on “adjusted financial statement income,” and a one percent excise tax on net repurchases of stock after December 31, 2022.
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If an engagement is terminated unexpectedly, our employees working on the engagement could be underutilized until we assign them to other projects. In addition, because much of our work is project-based rather than recurring in nature, our employees’ utilization depends on our ability to secure additional engagements on a continual basis.
Added
Failure to comply with domestic and international export laws could adversely affect our business.
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An increase in government use of export controls and sanctions lists could affect both our client engagements and our operations.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur Test and Engineering Center (TEC) occupies 147 acres in Phoenix, Arizona. We lease this land from the state of Arizona under a 30-year lease agreement that expires in January 2028 and have options to renew for two 15-year periods.
Biggest changeOur Test and Engineering Center (TEC) occupies 147 acres in Phoenix, Arizona. We lease this land from the State of Arizona under a lease agreement that expires in January 2043 and have an option to renew for one 15-year period.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph assumes that $100 26 was invested on the last day of 2018. Note that the historic price performance is not necessarily indicative of future price performance. Item 6. (Reserved ) 27
Biggest changeThe Company does not have a comparable peer group and thus has selected the S&P MidCap 400 Index. The graph assumes that $100 was invested on the last day of 2019. Note that the historic price performance is not necessarily indicative of future price performance. Item 6. (Reserved ) 26
COMPANY STOCK PRICE PERFORMANCE GRAPH This graph compares the Company’s cumulative total stockholder return calculated on a dividend-reinvested basis from 2019 through 2023 with those of the Standard & Poor’s (“S&P”) 500 Index, the S&P MidCap 400 Index, and the S&P SmallCap 600 Index.
COMPANY STOCK PRICE PERFORMANCE GRAPH This graph compares the Company’s cumulative total stockholder return calculated on a dividend-reinvested basis from 2020 through 2024 with those of the Standard & Poor’s (“S&P”) 500 Index, the S&P MidCap 400 Index, and the S&P SmallCap 600 Index.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Exponent’s common stock is traded on the NASDAQ Global Select Market, under the symbol “EXPO.” As of February 16, 2024, there were 166 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Exponent’s common stock is traded on the NASDAQ Global Select Market, under the symbol “EXPO.” As of February 21, 2025, there were 162 holders of record of our common stock.
Removed
The following table provides information on the Company’s share repurchases (of Company common stock) for the quarter ended December 29, 2023 (in thousands, except price per share): Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan or Program September 30 to October 27 44 $ 73.51 44 $ 42,411 October 28 to November 24 54 73.73 54 $ 38,390 November 25 to December 29 - - - $ 38,390 Total 98 73.63 98 $ 38,390 Repurchases of the Company’s common stock were affected pursuant to a repurchase program authorized by the Company’s Board of Directors.
Removed
On February 22, 2022 the Company’s Board of Directors announced approval of $150,000,000 for the repurchase of the Company’s common stock. On February 1, 2024 the Company's Board of Directors authorized an additional $61,600,000 for the repurchase of the Company's common stock. These repurchase programs have no expiration dates.
Removed
The Company does not have a comparable peer group and thus has selected the S&P MidCap 400 Index. In prior years the company used the S&P SmallCap 600 Index. During 2023, the company was added to the S&P MidCap 400 Index. As such the company selected this index for 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

44 edited+17 added−21 removed19 unchanged
Biggest changeFor all other customers we recognize allowances for contract losses and doubtful accounts taking into consideration factors such as historical write-offs, customer concentration, customer creditworthiness, current and forecasts of future economic conditions, and aging of amounts due. 28 The following table sets forth, for the periods indicated, the percentage of revenues of certain items in our consolidated statements of income and the percentage increase (decrease) in the dollar amount of such items year to year: Percentage of Revenues for Period to Fiscal Years Period Change 2023 2022 2023 v 2022 Revenues 100.0 % 100.0 % 4.6 % Operating expenses: Compensation and related expenses 59.6 51.5 21.1 Other operating expenses 7.7 6.8 18.4 Reimbursable expenses 7.4 9.6 (20.0 ) General and administrative expenses 4.6 4.6 3.3 79.3 72.6 14.2 Operating income 20.7 27.4 (21.0 ) Other income, net 4.6 (1.7 ) 385.5 Income before income taxes 25.3 25.8 2.8 Provision for income taxes 6.6 5.8 18.9 Net income 18.7 % 19.9 % (1.9 )% EXECUTIVE SUMMARY Revenues for 2023 increased 5% and revenues before reimbursements increased 7% as compared to the prior year.
Biggest changeFor all other customers we recognize allowances for contract losses and doubtful accounts taking into consideration factors such as historical write-offs, customer concentration, customer creditworthiness, current and forecasts of future economic conditions, and aging of amounts due. 27 The following table sets forth, for the periods indicated, the percentage of revenues of certain items in our consolidated statements of income and the percentage increase (decrease) in the dollar amount of such items year to year: Percentage of Revenues for Period to Fiscal Years Period Change 2024 2023 2024 v 2023 Revenues 100.0 % 100.0 % 4.1 % Operating expenses: Compensation and related expenses 59.1 59.6 3.2 Other operating expenses 8.3 7.7 11.2 Reimbursable expenses 7.2 7.4 1.1 General and administrative expenses 4.1 4.6 (7.0 ) 78.6 79.3 3.2 Operating income 21.4 20.7 7.4 Other income, net 5.0 4.6 13.2 Income before income taxes 26.4 25.3 8.4 Provision for income taxes 6.9 6.6 7.9 Net income 19.5 % 18.7 % 8.6 % EXECUTIVE SUMMARY Revenues and revenues before reimbursements for 2024 increased 4% as compared to the prior year.
These expenses include the costs associated with our human resources, finance, information technology, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with our deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in our allowance for contract losses and doubtful accounts.
These expenses include the costs associated with our human resources, finance, information technology, corporate, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with our deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in our allowance for contract losses and doubtful accounts.
First quarter operating cash requirements are generally higher due to payment of our annual bonuses accrued during the prior year. Our largest source of operating cash flows is cash collections from our clients. Our primary uses of cash from operating activities are for employee-related expenditures, leased facilities, taxes, and general operating expenses.
First quarter operating cash requirements are generally higher due to payment in the first quarter of our annual bonuses accrued during the prior year. Our largest source of operating cash flows is collections from our clients. Our primary uses of cash from operating activities are for employee related expenditures, leased facilities, taxes, and general operating expenses.
Item 7. Management’s Discussion and Analysis o f Financial Condition and Results of Operations This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Item 7. Management’s Discussion and Analysis o f Financial Condition and Results of Operations This section of this Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
The decrease in the excess tax benefit was due to a smaller increase in the value of our common stock between the grant date and the release date for the restricted stock units released in 2023 as compared to restricted stock units released in 2022.
The decrease in the excess tax benefit was due to a smaller increase in the value of our common stock between the grant date and the release date for the restricted stock units released in 2024 as compared to restricted stock units released in 2023.
We believe that the assumptions, judgments and estimates involved in accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts impact on our consolidated financial statements, so we consider these to be our critical accounting policies. We discuss below the assumptions, judgments and estimates associated with these policies.
We believe that the assumptions, judgments and estimates involved in accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts have the greatest potential impact on our consolidated financial statements, so we consider these to be our critical accounting policies. We discuss below the assumptions, judgments and estimates associated with these policies.
Discussions of 2022 and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2022.
Discussions of 2023 and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report form 10-K can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2023.
We also remain focused on capitalizing on emerging growth areas, managing other operating expenses, generating cash from operations, maintaining a strong balance sheet and undertaking activities such as share repurchases and dividends to enhance shareholder value. 29 OVERVIEW OF THE YEAR ENDED December 29, 2023 Our revenues consist of professional fees earned on consulting engagements, fees for use of our equipment and facilities, and reimbursements for outside direct expenses associated with the services performed that are billed to our clients.
We also remain focused on capitalizing on emerging growth areas, managing other operating expenses, generating cash from operations, maintaining a strong balance sheet and undertaking activities such as share repurchases and dividends to enhance shareholder value. 28 OVERVIEW OF THE YEAR ENDED January 3, 2025 Our revenues consist of professional fees earned on consulting engagements, fees for use of our equipment and facilities, and reimbursements for outside direct expenses associated with the services performed that are billed to our clients.
Excluding the impact of the excess tax benefit, the effective tax rate would have been 28.8% and 27.0% for 2023 and 2022, respectively.
Excluding the impact of the excess tax benefit, the effective tax rate would have been 27.9% and 28.8% for 2024 and 2023, respectively.
We operate on a 52-53 week fiscal year with each year ending on the Friday closest to December 31 st . Fiscal period 2023 included 52 weeks of activity and ended on December 29, 2023. Fiscal period 2022 included 52 weeks of activity and ended on December 30, 2022.
We operate on a 52-53 week fiscal year with each year ending on the Friday closest to December 31 st . Fiscal period 2024 included 53 weeks of activity and ended on January 3, 2025. Fiscal period 2023 included 52 weeks of activity and ended on December 29, 2023.
The increase in our effective tax rate, excluding the impact of the excess tax benefit, was primarily due to the re-measurement of our deferred tax assets in connection with relocating one of our offices to a location designated as tax exempt for all state and local taxes and a decrease in our foreign rate benefit.
The decrease in our effective tax rate, excluding the 31 impact of the excess tax benefit, was primarily due to a re-measurement that reduced the value of our deferred tax assets in connection with relocating one of our offices to a location designated as tax exempt for all state and local taxes during 2023.
The decrease in net cash used in financing activities during 2023 as compared to 2022 was primarily due to a decrease in repurchases of our common stock and a reduction in payroll taxes for restricted stock units, partially offset by an increase in our quarterly dividend payment.
The decrease in net cash used in financing activities during 2024 as compared to 2023 was primarily due to a decrease in repurchases of our common stock, a reduction in payroll taxes for restricted stock units, and an increase in exercise of stock-based payment awards, partially offset by an increase in dividends.
Other Income (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Other income $ 24,574 $ (8,608 ) (385.5 )% Percentage of total revenues 4.6 % (1.7 )% Other income consists primarily of interest income earned on available cash, cash equivalents and short-term investments, changes in the value of assets associated with our deferred compensation plan and rental income from leasing excess space in our Silicon Valley and Natick facilities.
Other Income (In thousands except percentages) Fiscal Years Percent 2024 2023 Change Other income $ 27,813 $ 24,574 13.2 % Percentage of total revenues 5.0 % 4.6 % Other income, net consists primarily of changes in the value of assets associated with our deferred compensation plan, interest income earned on available cash, cash equivalents and short-term investments, and rental income from leasing space in our Silicon Valley and Natick facilities.
The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid.
The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid.
We lease office, laboratory, and storage space in 13 states and the District of Columbia, as well as in China, Germany, Hong Kong, Ireland, Singapore, Switzerland, and the United Kingdom under non-cancellable operating lease arrangements that expire at various dates through 2033. As of December 29, 2023, the value of our obligations under operating leases was $28,261,000.
We lease office, laboratory, and storage space in 13 states and the District of Columbia, as well as in China, Germany, Hong Kong, Ireland, Singapore, Switzerland, and the United Kingdom under non-cancellable operating lease arrangements that expire at various dates through 2033.
Fiscal period 2021 included 52 weeks of activity and ended on December 31, 2021. Fiscal period 2024 is 53 weeks and will end on January 3, 2025. During 2023, billable hours increased 2% to 1,495,000 as compared to 1,465,000 during 2022. Our utilization decreased to 69% for 2023 as compared to 74% for 2022.
Fiscal period 2022 included 52 weeks of activity and ended on December 30, 2022. Fiscal period 2025 is 52 weeks and will end on January 2, 2026. Billable hours were 1,495,000 during both 2024 and 2023. Our utilization increased to 73% for 2024 as compared to 69% for 2023.
Other Operating Expenses (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Other operating expenses $ 41,541 $ 35,083 18.4 % Percentage of total revenues 7.7 % 6.8 % Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements.
Other Operating Expenses (In thousands except percentages) Fiscal Years Percent 2024 2023 Change Other operating expenses $ 46,196 $ 41,541 11.2 % Percentage of total revenues 8.3 % 7.7 % Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements.
The increase in net cash used in investing activities during 2023 as compared to 2022 was due to an increase in capital expenditures primarily due to leasehold improvements associated with our new operating lease for office and lab space in Philadelphia.
The decrease in net cash used in investing activities during 2024 as compared to 2023 was due to a decrease in capital expenditures primarily due to leasehold improvements during 2023 associated with our office and lab space in Philadelphia.
Reimbursable Expenses (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Reimbursable expenses $ 39,577 $ 49,473 (20.0 )% Percentage of total revenues 7.4 % 9.6 % The amount of reimbursable expenses will vary from year to year depending on the nature of our projects.
Reimbursable Expenses (In thousands except percentages) Fiscal Years Percent 2024 2023 Change Reimbursable expenses $ 40,024 $ 39,577 1.1 % Percentage of total revenues 7.2 % 7.4 % The amount of reimbursable expenses will vary from year to year depending on the nature of our projects.
The excess tax benefit associated with stock-based awards decreased to $3,620,000 during 2023 as compared to $5,829,000 during 2022. The decrease in the excess tax benefit was due to a smaller increase in value of our common stock between the grant date and the release date for the restricted stock units released during 2023 as compared to 2022.
The decrease in the excess tax benefit was due to a smaller increase in value of our common stock between the grant date and the release date for the restricted stock units released during 2024 as compared to 2023.
The decrease in reimbursable expenses as compared to 2022 was due to a decrease in proactive projects for the consumer electronics sector.
The increase in reimbursable expenses as compared to 2023 was due to an increase in proactive projects for the consumer electronics sector.
LIQUIDITY AND CAPITAL RESOURCES Fiscal Years (In thousands) 2023 2022 Net cash provided by (used in): Operating activities $ 127,352 $ 93,807 Investing activities $ (16,356 ) $ (12,043 ) Financing activities $ (86,009 ) $ (215,977 ) We financed our business in 2023 through available cash and cash flows from operating activities.
LIQUIDITY AND CAPITAL RESOURCES Fiscal Years (In thousands) 2024 2023 Net cash provided by (used in): Operating activities $ 144,537 $ 127,352 Investing activities $ (6,939 ) $ (16,356 ) Financing activities $ (65,108 ) $ (86,009 ) We financed our business in 2024 through available cash and cash flows from operating activities.
We invest our excess cash in cash equivalents. As of December 29, 2023, our cash and cash equivalents were $187,150,000 as compared to $161,458,000 at December 30, 2022.
We invest our excess cash in cash equivalents. As of January 3, 2025, our cash and cash equivalents were $258,901,000 as compared to $187,150,000 at December 29, 2023.
The following table shows EBITDA as a percentage of revenues before reimbursements for 2023 and 2022: (In thousands, except percentages) Fiscal Years 2023 2022 Revenues before reimbursements $ 497,189 $ 463,820 EBITDA $ 137,662 $ 137,217 EBITDA as a % of revenues before reimbursements 27.7 % 29.6 % The decrease in EBITDA as a percentage of revenues before reimbursements during 2023 as compared to 2022 was primarily due to the decrease in utilization and an increase in other operating expenses.
The following table shows EBITDA as a percentage of revenues before reimbursements for 2024 and 2023: (In thousands, except percentages) Fiscal Years 2024 2023 Revenues before reimbursements $ 518,490 $ 497,189 EBITDA $ 147,058 $ 137,662 EBITDA as a % of revenues before reimbursements 28.4 % 27.7 % The increase in EBITDA as a percentage of revenues before reimbursements during 2024 as compared to 2023 was primarily due to the increase in utilization and a decrease in general and administrative expenses, partially offset by an increase in other operating expenses.
FISCAL YEARS ENDED December 29, 2023 AND December 30, 2022 Revenues (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Engineering and Other Scientific $ 446,888 $ 427,796 4.5 % Percentage of total revenues 83.3 % 83.3 % Environmental and Health 89,878 85,497 5.1 % Percentage of total revenues 16.7 % 16.7 % Total revenues $ 536,766 $ 513,293 4.6 % The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billable hours and an increase in billing rates.
FISCAL YEARS ENDED January 3, 2025 AND December 29, 2023 Revenues (In thousands except percentages) Fiscal Years Percent 2024 2023 Change Engineering and Other Scientific $ 469,544 $ 446,888 5.1 % Percentage of total revenues 84.1 % 83.3 % Environmental and Health 88,970 89,878 (1.0 )% Percentage of total revenues 15.9 % 16.7 % Total revenues $ 558,514 $ 536,766 4.1 % The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billing rates and an increase in billable hours.
The increases in depreciation and information technology related expenses were due to continued investment in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent and continue to make investments in our corporate infrastructure.
We expect other operating expenses to grow as we selectively add new talent and continue to make investments in our corporate infrastructure.
Company assets that are designated to fund the benefits under the plans are held in a rabbi trust and are subject to the claims of our creditors. As of December 29, 2023, invested amounts under the plans of $101,169,000 were recorded as a non-current asset on our consolidated balance sheet.
Vested amounts due under the plans of $14,976,000 were recorded as a current liability on our consolidated balance sheet at January 3, 2025. Company assets that are designated to fund the benefits under the plans are held in a rabbi trust and are subject to the claims of our creditors.
The following table is a reconciliation of EBITDA and EBITDAS to the most comparable GAAP measure, net income, for 2023 and 2022: (In thousands) Fiscal Years 2023 2022 Net income $ 100,339 $ 102,330 Add back (subtract): Income taxes 35,557 29,904 Interest income (7,150 ) (2,096 ) Depreciation and amortization 8,916 7,079 EBITDA 137,662 137,217 Stock-based compensation 20,357 20,364 EBITDAS $ 158,019 $ 157,581
The following table is a reconciliation of EBITDA and EBITDAS to the most comparable GAAP measure, net income, for 2024 and 2023: (In thousands) Fiscal Years 2024 2023 Net income $ 109,002 $ 100,339 Add back (subtract): Income taxes 38,368 35,557 Interest income (10,001 ) (7,150 ) Depreciation and amortization 9,689 8,916 EBITDA 147,058 137,662 Stock-based compensation 23,239 20,357 EBITDAS $ 170,297 $ 158,019
The decrease in utilization was due to the 5% increase in technical full-time equivalent employees. Revenues are primarily derived from services provided in response to client requests or events that occur without notice and engagements are generally terminable or subject to postponement or delay at any time by our clients.
Technical full-time equivalents decreased 9% to 208 during 2024 as compared to 229 for 2023. Revenues are primarily derived from services provided in response to client requests or events that occur without notice and engagements are generally terminable or subject to postponement or delay at any time by our clients.
Operating Income (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Engineering and Other Scientific $ 153,918 $ 152,679 0.8 % Environmental and Health 28,432 27,340 4.0 % Total segment operating income 182,350 180,019 1.3 % Corporate operating expense (71,028 ) (39,177 ) 81.3 % Total operating income $ 111,322 $ 140,842 (21.0 )% The increase in operating income for our Engineering and Other Scientific segment during 2023 as compared to 2022 was due to an increase in revenues, partially offset by an increase in expenses.
Operating Income (In thousands except percentages) Fiscal Years Percent 2024 2023 Change Engineering and Other Scientific $ 164,883 $ 153,918 7.1 % Environmental and Health 29,995 28,432 5.5 % Total segment operating income 194,878 182,350 6.9 % Corporate operating expense (75,321 ) (71,028 ) 6.0 % Total operating income $ 119,557 $ 111,322 7.4 % The increase in operating income for our Engineering and Other Scientific segment during 2024 as compared to 2023 was due to an increase in revenues and an increase in utilization.
Income Taxes (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Income taxes $ 35,557 $ 29,904 18.9 % Percentage of total revenues 6.6 % 5.8 % Effective tax rate 26.2 % 22.6 % The increase in our effective tax rate was due to a decrease in the excess tax benefit associated with stock-based awards.
Income Taxes (In thousands except percentages) Fiscal Years Percent 2024 2023 Change Income taxes $ 38,368 $ 35,557 7.9 % Percentage of total revenues 6.9 % 6.6 % Effective tax rate 26.0 % 26.2 % The excess tax benefit associated with stock-based awards decreased to $2,793,000 during 2024 as compared to $3,620,000 during 2023.
Net income was $100,339,000 during 2023 as compared to $102,330,000 during 2022. Diluted earnings per share decreased to $1.94 for 2023 as compared to $1.96 for 2022. Net income and diluted earnings per share for 2023 and 2022 benefited from the excess tax benefit associated with stock-based awards.
The increase in profitability was due to our continued efforts to better align resources with demand. Net income and diluted earnings per share for 2024 and 2023 benefited from the excess tax benefit associated with stock-based awards. The excess tax benefit associated with stock-based awards decreased to $2,793,000 during 2024 as compared to $3,620,000 during 2023.
As of December 29, 2023, invested amounts under the plans of $14,018,000 were recorded as other current assets on our consolidated balance sheet. As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was serving, at our request in such capacity.
As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was serving, at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime.
General and Administrative Expenses (In thousands except percentages) Fiscal Years Percent 2023 2022 Change General and administrative expenses $ 24,440 $ 23,660 3.3 % Percentage of total revenues 4.6 % 4.6 % 31 The increase in general and administrative expenses during 2023 was primarily due to an increase in travel and meals of $953,000, an increase in bad debt expense of $402,000 and an increase in marketing and business development expenses of $313,000, partially offset by a decrease in outside consulting expenses and other professional services of $736,000.
General and Administrative Expenses (In thousands except percentages) Fiscal Years Percent 2024 2023 Change General and administrative expenses $ 22,726 $ 24,440 (7.0 )% Percentage of total revenues 4.1 % 4.6 % 30 The decrease in general and administrative expenses during 2024 was primarily due to a decrease in outside consulting expenses of $1,304,000, a decrease in travel and meals of $844,000 and a decrease in personnel expenses of $673,000.
Furthermore, cash reserves may be used to repurchase common stock under our stock repurchase programs, pay dividends, procure facilities and equipment or strategically acquire professional service firms that are complementary to our business. We maintain nonqualified deferred compensation plans for the benefit of a select group of highly compensated employees.
The value of our non-cancellable unconditional purchase obligations was not material at January 3, 2025. We expect to continue our investing activities, including capital expenditures. Furthermore, cash reserves may be used to repurchase common stock under our stock repurchase programs, pay dividends, procure facilities and equipment or strategically acquire professional service firms that are complementary to our business.
As our suite of offerings and key markets expands, so does the demand for our multidisciplinary services. We continue to expand our client relationships and enhance our reputation and capabilities across the firm. As innovation and technology become increasingly complex, the critical nature of our insights uniquely positions Exponent to address our clients’ needs throughout the product lifecycle.
Society is raising the bar for safety, health, sustainability and reliability, and clients are increasingly seeking our interdisciplinary proactive solutions. As our suite of offerings and key markets expands, so does the demand for our multidisciplinary services. We continue to expand our client relationships and enhance our reputation and capabilities across the firm.
Compensation and Related Expenses (In thousands except percentages) Fiscal Years Percent 2023 2022 Change Compensation and related expenses $ 319,886 $ 264,235 21.1 % Percentage of total revenues 59.6 % 51.5 % 30 The increase in compensation and related expenses during 2023 was due to a change in the value of assets associated with our deferred compensation plan and an increase in wages and fringe benefits.
Compensation and Related Expenses (In thousands except percentages) Fiscal Years Percent 2024 2023 Change Compensation and related expenses $ 330,011 $ 319,886 3.2 % Percentage of total revenues 59.1 % 59.6 % 29 The increase in compensation and related expenses during 2024 was due an increase in payroll expense, an increase in bonus expense and an increase in stock-based compensation.
The increase in revenues from our Environmental and Health segment was due to an increase in billing rates offset by a decrease in billable hours. Growth in this segment during 2023 was primarily driven by safety-related work evaluating the impacts of chemicals on human health and the environment.
Technical full-time equivalent employees in this segment decreased 7% to 759 during 2024 as compared to 818 for 2023. The decrease in revenues from our Environmental and Health segment was due to a decrease in billable hours partially offset by an increase in billing rates.
The decrease in utilization during 2023 was due to an increase in technical full-time equivalent employees. Technical full-time equivalent employees increased 10% to 1,047 for 2023 as compared to 955 for 2022. We continue to selectively hire key talent to expand our capabilities.
The increase in utilization during 2024 was due to our efforts to align resources with demand. Technical full-time equivalent employees decreased 8% to 967 for 2024 as compared to 1,047 for 2023.
The increase in revenues was due to an increase in billable hours and an increase in billing rates. Growth was driven by demand for our services across the transportation and energy sectors. The increase in expenses was due to an 11% increase in technical full-time equivalent employees and investments in our corporate infrastructure.
The increase in revenues was due to an increase in billing rates and an increase in billable hours driven by demand for our services across the consumer products and utilities industries. The increase in utilization was due to our efforts to align resources with demand.
Vested amounts due under the plans of $103,398,000 were recorded as a long-term liability on our consolidated balance sheet at December 29, 2023. Vested amounts due under the plans of $13,166,000 were recorded as a current liability on our consolidated balance sheet at December 29, 2023.
We maintain nonqualified deferred compensation plans for the benefit of a select group of highly compensated employees. Vested amounts due under the plans of $112,646,000 were recorded as a long-term liability on our consolidated balance sheet at January 3, 2025.
Growth in this segment during 2023 was primary driven by demand for our services across the transportation and energy sectors. During 2023, billable hours for this segment increased by 3% to 1,188,000 as compared to 1,153,000 during 2022.
During 2024, billable hours for this segment increased by 1% to 1,199,000 as compared to 1,188,000 during 2023. Utilization for this segment increased to 75% for 2024 as compared to 70% for 2023 due to our continued efforts to align resources with demand.
Certain operating expenses are excluded from our measure of segment operating income.
The increase in operating income for our Environmental and Health segment was due to an increase in utilization due to our efforts to align resources with demand. Certain operating expenses are excluded from our measure of segment operating income.
The increase in other operating expenses was primarily due to an increase in occupancy expense of $2,037,000, an increase in depreciation expense of $1,837,000 and an increase in information technology related expenses of $1,715,000. The increase in occupancy expenses was due to growth in technical full-time equivalent employees and the transition back to our offices from a remote work environment.
The increase in other operating expenses was primarily due to an increase in occupancy expense of $3,437,000, an increase in information technology related expenses of $839,000 and an increase in depreciation expense of $773,000. Our land lease with the State of Arizona was extended on June 19, 2024.
Removed
The increase in revenues was due to an increase in billable hours and an increase in billing rates. Our multidisciplinary team of scientists and engineers continues to provide critical data, analyses and insights for our clients as society raises expectations for safety, health and the environment.
Added
Our focus on effective resource management drove significant improvement in utilization. Demand for our proactive services strengthened during the year driven by the consumer electronics and utilities industries. We saw increased activity in user research studies and product development consulting in the consumer electronics sector and strong demand for our risk-related work in utilities.
Removed
Growth during 2023 was driven by our reactive business, which experienced strong demand for failure investigations and dispute-related work. Demand for our services across the transportation and energy sectors was strong during 2023. Proactive revenues for the consumer electronics sector declined during 2023 due to ongoing industry headwinds and product lifecycle timing.
Added
Growth in reactive services was supported by strong activity in the utilities and medical device industries. With increasing global demand for energy and the related investments in infrastructure, we are actively involved in failure analysis and dispute-related projects around the world. Our multidisciplinary team of scientists and engineers continues to provide critical data, analyses and insights for our clients.
Removed
The remainder of our proactive portfolio grew during 2023 primarily driven by safety-related work evaluating the impacts of chemicals on human health and the environment. Society is raising the bar for safety, health, sustainability and reliability, and clients are increasingly seeking our interdisciplinary proactive solutions.
Added
As innovation and technology become increasingly complex, the critical nature of our insights uniquely positions Exponent to address our clients’ needs throughout the product lifecycle. Net income increased 9% to $109,002,000 during 2024 as compared to $100,339,000 during 2023. Diluted earnings per share increased to $2.11 for 2024 as compared to $1.94 for 2023.
Removed
Utilization for this segment decreased to 70% for 2023 as compared to 75% for 2022 due to an increase in technical full-time equivalent employees. Technical full-time equivalent employees in this segment increased 11% to 818 during 2023 as compared to 736 for 2022.
Added
Growth in this segment during 2024 was primary driven by demand for our services across the consumer products and utilities industries. In the consumer electronics sector we advised clients on projects related to digital health and wearables, such as advanced sensors in health applications and engagements in augmented and virtual reality.
Removed
During 2023, billable hours for this segment decreased by 2% to 307,000 as compared to 312,000 during 2022. Utilization for this segment decreased to 64% for 2023 as compared to 69% for 2022. Technical full-time equivalents increased 5% to 229 during 2023 as compared to 219 for 2022.
Added
During 2024, billable hours for this segment decreased by 4% to 296,000 as compared to 307,000 during 2023. The decrease in billable hours was related to headwinds in the chemical and life sciences sectors. Utilization for this segment increased to 67% for 2024 as compared to 64% for 2023 due to our continued efforts to align resources with demand.
Removed
During 2023, deferred compensation expense increased $28,502,000 with a corresponding increase to other income, net, as compared to the prior year due to the change in value of assets associated with our deferred compensation plan.
Added
During 2024, payroll expense increased $3,771,000 due to the impact of our annual salary increase partially offset by a decrease in technical full-time equivalent employees. During 2024, bonus expense increased by $5,096,000 due to a corresponding increase in our bonus pool. Stock-based compensation increased $1,150,000 during 2024 due to an increase in unvested restricted stock unit grants.
Removed
This increase consisted of an increase in the value of the plan assets of $14,315,000 during 2023 as compared to a decrease in the value of the plan assets of $14,187,000 during 2022. Wages increased $21,084,000 and fringe benefits increased $4,888,000 during 2023 due to the impact of our annual salary increase and increase in number of employees.
Added
We expect compensation expense, excluding the change in value of deferred compensation plan assets, to increase as we selectively add new talent and adjust compensation to market conditions.
Removed
The increase in travel and meals was due to the continued easing of COVID-19 pandemic-related business and travel restrictions. The increase in bad debt expense was due to an increase in write-offs. The increase in marketing and business development expenses was due to an increase in our business development activities.
Added
This extension resulted in additional non-cash rent expense of approximately $2,316,000 during 2024. The remainder of the increase in occupancy expense was due to investments in our office and laboratory facilities. The increases in depreciation and information technology related expenses were due to continued investment in our corporate infrastructure.
Removed
The decrease in outside consulting expenses and other professional services was due a reduction in activity associated with developing content for our external website.
Added
Outside consulting decreased primarily due to activity associated with content creation for our external website during 2023. The decrease in travel and meals was due to the decrease in technical full-time equivalent employees and a firm-wide principals' meeting which was held in 2023.We did not have any firm-wide meetings during 2024.
Removed
The increase in operating income for our Environmental and Health segment was due to an increase in revenues. The increase in revenues was due to an increase in billing rates, partially offset by a reduction in billable hours. Growth was driven by evolving regulatory requirements which drove safety-related engagements evaluating the impacts of chemicals on human health and the environment.
Added
The decrease in personnel expenses was due to lower relocation and recruiting costs. We expect general and administrative expenses to increase as we expand our business development and staff development initiatives.
Removed
The increase in corporate operating expenses during 2023 as compared to 2022 was primarily due to an increase in deferred compensation expense and an increase in the costs associated with our human resources, finance, information technology and business development groups.
Added
The increase in corporate operating expenses was due to an increase in stock-based compensation and an increase in the provision for contract losses and doubtful accounts.
Removed
During 2023, deferred compensation expense increased $28,502,000, with a corresponding increase to other income, net, as compared to the prior year, due to the change in value of assets associated with our deferred compensation plan.
Added
The increase in other income, net was primarily due to an increase in interest income of $2,851,000 due to an increase in cash and cash equivalents.
Removed
This increase consisted of an increase in the value of plan assets of $14,315,000 during 2023 as compared to a decrease in the value of plan assets of $14,187,000 during 2022.
Added
On June 19, 2024, we entered into an agreement with the State of Arizona to extend our land lease for 15 years beginning on January 17, 2028. We are currently obligated to make payments under the lease of $1,009,000 per year, which obligation will continue at that level until January 16, 2028.
Removed
The increase in other income was primarily due to the change in value of assets associated with our deferred compensation plan and a change in the realized gain and loss on foreign exchange partially offset by an increase in interest income and an increase in rental income.
Added
Beginning on January 17, 2028, our payments under the lease will increase to approximately $6,183,000 per year for the 15-year extension term with adjustments to the annual rent payment in 2033 and 2038 based on the consumer price index.
Removed
During 2023, other income increased $28,502,000 with a corresponding increase to deferred compensation expense as compared to 2022 due to the change in value of assets associated with our deferred compensation plan.
Added
As a result of this extension, we added an additional right-of-use asset in exchange for an operating lease liability of $48,683,000 during the second quarter of 2024. As of January 3, 2025, the value of our obligations under operating leases was $81,477,000. See Note 12 of our Notes to Consolidated Financial Statements for additional information regarding our lease obligations.
Removed
This increase 32 consisted of an increase in the value of the plan assets of $14,315,000 during 2023 as compared to a decrease in the value of the plan assets of $14,187,000 during 2022. During 2023, other income decreased $781,000 as compared to 2022 due to realized gain and loss on foreign exchange.
Added
As of January 3, 2025, invested amounts under the plans of $110,259,000 were recorded as a non-current asset on our consolidated 32 balance sheet. As of January 3, 2025, invested amounts under the plans of $17,578,000 were recorded as other current assets on our consolidated balance sheet.
Removed
This decrease consisted of a realized loss on foreign exchange of $259,000 during 2023 as compared to a realized gain on foreign exchange of $522,000 during 2022. During 2023, interest income increased by $5,054,0000 due to higher interest rates.
Added
Our utilization increased to 73% during 2024 as compared to 69% during 2023. The increase in utilization was due to demand for proactive services in the consumer electronics and utilities 33 industries, demand for reactive services in the utilities and medical device industries and our efforts to align resources with demand.
Removed
During 2023, rental income increased $433,000 as compared to 2022 due to the addition of an additional tenant in our Natick facility and an increase in rent.
Removed
The excess tax benefit associated with stock-based awards decreased to $3,620,000 during 2023 as compared to $5,829,000 during 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−0 removed5 unchanged
Biggest changeAccordingly, changes in exchange rates may negatively affect the revenues and net income of our foreign subsidiaries as expressed in U.S. dollars.
Biggest changeWe have foreign currency risk related to our revenues and expenses denominated in currencies other than the U.S. dollar, primarily the British Pound, the Hong Kong Dollar, the Chinese Yuan, and the Singapore Dollar. Accordingly, changes in exchange rates may negatively affect the revenues and net income of our foreign subsidiaries as expressed in U.S. dollars.
However, our continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations. 35 Item 8. Financial Statemen ts and Supplementary Data See Item 15 of this Annual Report on Form 10-K for required financial statements and supplementary data. Item 9.
However, our continued international expansion increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations. 34 Item 8. Financial Statemen ts and Supplementary Data See Item 15 of this Annual Report on Form 10-K for required financial statements and supplementary data. Item 9.
At December 29, 2023, we had net assets denominated in the non-functional currency of approximately $8.7 million. We do not use foreign exchange contracts to hedge any foreign currency exposures. To date, the impacts of foreign currency exchange rate changes on our consolidated revenues and consolidated net income have not been material.
At January 3, 2025, we had net assets denominated in the non-functional currency of approximately $13.4 million. We do not use foreign exchange contracts to hedge any foreign currency exposures. To date, the impacts of foreign currency exchange rate changes on our consolidated revenues and consolidated net income have not been material.
At December 29, 2023, we had net assets of approximately $17.2 million with a functional currency of the British Pound, net assets of approximately $2.7 million with a functional currency of the Hong Kong Dollar, net assets of approximately $2.4 million with a functional currency of the Chinese Yuan, and net assets of approximately $2.3 million with a functional currency of the Singapore Dollar associated with our operations in the United Kingdom, Hong Kong, China, and Singapore respectively.
At January 3, 2025, we had net assets of approximately $24.2 million with a functional currency of the British Pound, net assets of approximately $3.5 million with a functional currency of the Hong Kong Dollar, net assets of approximately $2.3 million with a functional currency of the Chinese Yuan, and net assets of approximately $1.2 million with a functional currency of the Singapore Dollar associated with our operations in the United Kingdom, Hong Kong, China, and Singapore respectively.
Notwithstanding our efforts to manage interest rate risk, there can be no assurances that we will be adequately protected against the risks associated with interest rate fluctuations. We have foreign currency risk related to our revenues and expenses denominated in currencies other than the U.S. dollar, primarily the British Pound, the Chinese Yuan, and the Hong Kong Dollar.
Notwithstanding our efforts to manage interest rate risk, there can be no assurances that we will be adequately protected against the risks associated with interest rate fluctuations.

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