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What changed in FTI CONSULTING, INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FTI CONSULTING, INC's 2023 and 2024 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 2024 report.

+273 added−286 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in FTI CONSULTING, INC's 2024 10-K

273 paragraphs added · 286 removed · 232 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+12 added−13 removed51 unchanged
Biggest changeDuring 2023, the awards and recognitions received by the Company include the following: • FTI Consulting and Compass Lexecon led the Who’s Who Legal Arbitration: Expert Witnesses for the 14th consecutive year with 74 experts recognized. • FTI Consulting named to Forbes magazine’s list of America’s Best Management Consulting Firms for the eighth consecutive year, recognized in 15 sectors and functional areas. • FTI Consulting recognized as Consulting Firm of the Year by Who’s Who Legal for the seventh consecutive year. • FTI Consulting ranked #1 and its subsidiary Compass Lexecon ranked #3 on Global Arbitration Review ’s GAR 100 Expert Witness Firms’ Power Index. • Compass Lexecon was named Competition Economics Firm of the Year by Who’s Who Legal for the ninth year in 2023, with 67 experts recognized in its 2023 Competition Guide. • FTI Consulting named a Best Firm to Work For by Consulting magazine for the sixth consecutive year. • FTI Consulting named to Forbes magazine’s lists of America’s Best Employers for Women and for New Graduates for the second consecutive year. • FTI Consulting named to Forbes magazine’s list of America’s Best Employers for New Graduates, for the second consecutive year. • FTI Consulting named Global Turnaround Consulting Firm of the Year and Americas Public Relations Firm of the Year by Global M&A Network . • FTI Consulting recognized as a leading firm in the Chambers Litigation Support 2023 Chambers Crisis and Risk Management 2023 and Chambers FinTech 2023 guides. • FTI Consulting ranked #1 U.S.
Biggest changeDuring 2024, awards and recognitions received by the Company include the following: • FTI Consulting and subsidiary Compass Lexecon led the Lexology Index (formerly Who’s Who Legal) Arbitration: Expert Witnesses list for the 15th consecutive year with 75 experts recognized, including 12 professionals identified as Future Leaders in Arbitration. • FTI Consulting recognized as Consulting Firm of the Year by Lexology Index for the eighth consecutive year. • FTI Consulting named to Forbes magazine’s list of the World’s Best Management Consulting Firms for the third consecutive year, recognized in 13 sectors and functional areas. • FTI Consulting ranked #1 U.S.
Corporate Finance & Restructuring Our Corporate Finance segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, governments and other financing sources and creditor groups, as well as other parties-in-interest.
Corporate Finance & Restructuring Our Corporate Finance segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, and other financing sources and creditor groups, as well as other parties-in-interest and governments.
We provide advisory services to help our clients stabilize finances and operations to reassure debtors, creditors and other stakeholders that proactive steps are being taken to preserve and enhance value, including the following offerings: • Company Advisory • Contentious Insolvency • Creditor Advisory • Dispute Advisory & Litigation Support • Interim Management Forensic and Litigation Consulting Our FLC segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services across risk and investigations and disputes, supported by our data & analytics technology-enabled solutions, with a focus on highly regulated industries.
We provide advisory services to help our clients stabilize finances and operations to reassure debtors, creditors and other stakeholders that proactive steps are being taken to preserve and enhance value, including the following offerings: • Company Advisory • Contentious Insolvency • Creditor Advisory • Dispute Advisory & Litigation Support • Interim Management Forensic and Litigation Consulting Our FLC segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services across risk & investigations and disputes, supported by our data & analytics technology-enabled solutions, with a focus on highly regulated industries.
We provide dispute resolution, advisory & transformation services that address the strategic, financial, operational, regulatory, and capital needs of complex construction & environmental projects, programs, liabilities, and physical asset management for organizations across multiple industries, and help organizations address environmental programmatic challenges and liability-related issues.
We provide dispute resolution, advisory and transformation services that address the strategic, financial, operational, regulatory and capital needs of complex construction and environmental projects, programs, liabilities and physical asset management for organizations across multiple industries, and help organizations address environmental programmatic challenges and liability-related issues.
To attract and retain highly qualified professionals, we offer various compensation opportunities, including sign-on bonuses, loans (including forgivable loans), retention bonuses, and incentive pay opportunities, along with a competitive benefits package and the opportunity to work on challenging global engagements with highly skilled peers. • Experts-Driven Model.
To attract and retain highly qualified professionals, we offer various compensation opportunities, including sign-on bonuses, incentive pay opportunities, and retention bonuses (including forgivable loans), along with a competitive benefits package and the opportunity to work on challenging global engagements with highly skilled peers. • Experts-Driven Model.
We help clients manage emerging data, navigate their evolving regulatory and privacy obligations, including AI, prepare for and respond to external threats, decrease storage costs, remediate and secure corporate data, enable faster and deeper insight into data, and provide expert testimony to defend corporate data management processes, including the following offerings: • Data Privacy Program Development and Implementation • Data Remediation, Disposition and Protection • Data Subject Access Requests • Migration of Enterprise Data to Cloud Applications • Pixel, Ad Tracker and AdTech Services • Post Data Breach Privacy Analysis and Response • Regulatory Readiness Advisory and Implementation Strategic Communications Our Strategic Communications segment develops and executes communications strategies to help management teams, boards of directors, law firms, governments and regulators manage change and mitigate risk surrounding transformational and disruptive events, including transactions, investigations, disputes, crises, regulation and legislation.
We help clients manage emerging data, navigate their evolving regulatory and privacy obligations, including AI, prepare for and respond to external threats, decrease storage costs, remediate and secure corporate data, enable faster and deeper insight into data, and provide expert testimony to defend corporate data management processes, including the following offerings: • AI Governance • Data Privacy Program Development and Implementation • Data Remediation, Disposition and Protection • Data Subject Access Requests • Migration of Enterprise Data to Cloud Applications • Pixel, Ad Tracker and AdTech Services • Post-data Breach Privacy Analysis and Response • Regulatory Readiness Advisory and Implementation Strategic Communications Our Strategic Communications segment develops and executes communications strategies to help management teams, boards of directors, law firms, governments and regulators manage change and mitigate risk surrounding transformational and disruptive events, including transactions, investigations, disputes, crises, regulation and legislation.
We work with companies, governments and members of the international bar to provide independent advice and expert testimony relating to business valuations and economic damages in a wide variety of commercial and treaty disputes before international arbitration tribunals, including the following offerings: • Business Valuations • Commercial and Treaty Disputes • Economic Damages • Litigation Support Technology Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk management consulting services.
We work with companies, governments and members of the international bar to provide independent advice and expert testimony relating to business valuations and economic damages in a wide variety of commercial and treaty disputes before international arbitration tribunals, including the following offerings: • Business Valuations • Commercial and Treaty Disputes • Economic Damages • Litigation Support Technology Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk management consulting and data services.
We provide our clients with expert advice and solutions involving business transformation, strategy, transactions, turnaround & restructuring, construction, projects, assets & environmental solutions, data & analytics, disputes, healthcare risk management & advisory, risk and investigations, antitrust & competition economics, financial economics, international arbitration, corporate legal department consulting, electronic discovery (or “e-discovery”) services and expertise, information governance, privacy & security services, corporate reputation, financial communications and public affairs.
We provide our clients with expert advice and solutions involving transactions, transformation & strategy, turnaround & restructuring, construction, projects, assets & environmental solutions, data & analytics, disputes, healthcare risk management & advisory, risk and investigations, antitrust & competition economics, financial economics, international arbitration, corporate legal department consulting, electronic discovery (or “e-discovery”) services and expertise, information governance, privacy & security services, corporate reputation, financial communications and public affairs.
Companies in the developing world and multinational companies can benefit from our expert advice to access capital and business markets, comply with the regulatory and other requirements of multiple countries, structure transactions and conduct due diligence, which drives demand for services across all of our segments. • Emerging Data, Including Cloud-Based Collaboration and Communications Platforms.
Companies in the developing world and multinational companies can benefit from our expert advice to access capital and business markets, comply with the regulatory, trade and other requirements of multiple countries, structure transactions and conduct due diligence, which drives demand for services across all of our segments. • Emerging Data, Including Cloud-Based Collaboration and Communications Platforms.
We support our global clients with disputes of all kinds, including the following offerings: • Claims in International Public Law • Complex Commercial and Regulatory Disputes • Energy-related Disputes • Financial Products and Broker-dealer Disputes • Insurance-related Disputes • Intellectual Property • Labor and Employment Healthcare Risk Management & Advisory.
We support our global clients with disputes of all kinds, including the following offerings: • Claims in International Public Law 4 • Complex Commercial and Regulatory Disputes • Energy-related Disputes • Financial Products and Broker-dealer Disputes • Insurance-related Disputes • Intellectual Property • Labor and Employment Healthcare Risk Management & Advisory.
Our key services include the following offerings: • Anti-corruption, Anti-money Laundering, Sanctions and Fraud Investigations 4 • Data Strategy, Governance and Reconciliation • Data Visualization, Process Improvement and Business Intelligence Solutions • Dispute Resolution • Machine Learning and Other AI Solutions • Remediation and Settlement Administration Disputes.
Our key services include the following offerings: • Anti-corruption, Anti-money Laundering, Sanctions and Fraud Investigations • Data Strategy, Governance and Reconciliation • Data Visualization, Process Improvement and Business Intelligence Solutions • Dispute Resolution • Machine Learning and Other AI Solutions • Remediation and Settlement Administration Disputes.
In most cases, equity awards granted by the Company take the form of shares of restricted stock or restricted 12 stock units subject to fixed vesting schedules ranging over two to nine years depending on the dollar value of such awards at grant.
In most cases, equity awards granted by the Company take the form of shares of restricted stock or restricted stock units subject to fixed vesting schedules ranging over two to nine years depending on the dollar value of such awards at grant.
Our services following the close of a transaction include post-M&A integration, transformation and disputes services. • Operational Challenges and Opportunities . Operational challenges and opportunities drive demand for services across all of our segments. Businesses facing challenges require the evaluation and re-evaluation of strategy, risks and 9 opportunities.
Our services following the close of a transaction include post-M&A integration, transformation and disputes services. • Operational Challenges and Opportunities . Operational challenges and opportunities drive demand for services across all of our segments. Businesses facing challenges require the evaluation and re-evaluation of strategy, risks and opportunities.
We provide services that help companies more efficiently manage complex and evolving data collection and discovery amid a rapidly evolving landscape of new data sources and types, including the following offerings: • Analytics Research • AI & Data Analytics • Blockchain Advisory Services • Cryptocurrency Disputes and Investigations • Digital Asset Advisory Services • E-discovery and Data Compliance Management • Emerging Data Sources Discovery and Governance • Investigations and Digital Forensics • Managed Document Review and Production • M&A-related Second Requests Information Governance, Privacy & Security Services.
We provide services that help companies more efficiently manage complex and evolving data collection and discovery amid a rapidly evolving landscape of new data sources and types, including the following offerings: • AI & Data Analytics • Analytics Research • Cryptocurrency Disputes and Investigations • Digital Assets and Blockchain Advisory Services • E-discovery and Data Compliance Management • E-discovery Managed Services • Emerging Data Sources Discovery and Governance • Investigations and Digital Forensics • Managed Document Review and Production • M&A-related Second Requests Information Governance, Privacy & Security Services.
We deliver a wide range of expert and analytics-powered solutions driven by investigations, litigation, antitrust and competition, M&A, restructuring and compliance and risk through three core offerings: Corporate Legal Department Consulting, E-discovery Services and Expertise, and Information Governance, Privacy & Security Services. In 2023, our Technology segment offered the following services: Corporate Legal Department Consulting.
We deliver a wide range of expert and analytics-powered solutions driven by investigations, litigation, antitrust and competition, M&A, restructuring and compliance and risk through three core offerings: Corporate Legal Department Consulting, E-discovery and Analytics Services and Expertise, and Information Governance, Privacy & Security Services. In 2024, our Technology segment offered the following services: Corporate Legal Department Consulting.
Our experts conduct investigations over a wide scope of issues and allegations, including the following offerings: • Accounting Advisory & Restatements • Anti-Bribery & Corruption Investigations • Anti-Money Laundering Investigations • Cybersecurity • Environmental, Social and Governance (“ESG”) & Sustainability • Export Controls, Sanctions & Trade • Financial Regulatory Investigations • Foreign Corrupt Practices Act (“FCPA”) Violations • Forensic Accounting & Fraud Investigations • Monitorships 5 Economic Consulting Our Economic Consulting segment, including subsidiary Compass Lexecon LLC (“Compass Lexecon”), provides law firms, companies, government entities and other interested parties with analyses of complex economic issues for use in international arbitration, legal and regulatory proceedings, and strategic decision making and public policy debates around the world.
Our experts conduct investigations over a wide scope of issues and allegations, including the following offerings: • Accounting Advisory & Restatements • Anti-bribery & Corruption Investigations • Anti-money Laundering Investigations • Cybersecurity • Environmental, Social and Governance (“ESG”) & Sustainability • Export Controls, Sanctions & Trade • Financial Regulatory Investigations • Foreign Corrupt Practices Act (“FCPA”) Violations • Forensic Accounting & Fraud Investigations • Geopolitical and Related Security Risk • Monitorships 5 Economic Consulting Our Economic Consulting segment, including subsidiary Compass Lexecon LLC (“Compass Lexecon”), provides law firms, companies, government entities and other interested parties with analyses of complex economic issues for use in international arbitration, legal and regulatory proceedings and strategic decision making and public policy debates around the world.
These written employment agreements can, but are not required to include, incentive compensation opportunities that may take the form of cash, equity or loans (including forgivable loans). Incentive-based opportunities may be fixed or be subject to financial or individual performance criteria. We may also impose meaningful time-based service requirements.
These written employment agreements can, but are not required to include, incentive compensation opportunities that may take the form of cash, equity or loans (including forgivable loans). Incentive-based opportunities are subject to financial or individual performance criteria. We may also impose meaningful time-based service requirements.
We design and provide communications strategies to help business leaders deliver consistent and credible narratives to raise capital, engage with investors and navigate transitional business events, including the following offerings: • Corporate Governance & Shareholder Activism • M&A Communications • Restructuring & Financial Issues Public Affairs.
We design and provide communications strategies to help business leaders deliver consistent and credible narratives to raise capital, engage with investors and navigate transitional business events, including the following offerings: • Corporate Governance & Shareholder Activism • ESG & Sustainability • M&A Communications • Restructuring and Financial Issues Public Affairs.
We design and provide communications to protect and enhance business reputations, build organizations’ public profiles and support their business outcomes, including the following offerings: • Crisis & Issues Management • Cybersecurity & Data Privacy Communications • Digital, Analytics & Insights • ESG & Sustainability • Litigation Communications 7 • People & Transformation Financial Communications.
We design and provide communications to protect and enhance business reputations, build organizations’ public profiles and support their business outcomes, including the following offerings: • Crisis and Issues Management • Cybersecurity and Data Privacy Communications • Digital, Analytics and Insights 7 • Litigation Communications • People & Transformation Financial Communications.
The growth and continuation of multinational companies and global consolidation can precipitate antitrust and competition scrutiny and the spread internationally of issues and practices that historically have been more common in the U.S., such as increased and complex litigation, corporate restructuring and bankruptcy activities, and antitrust and competition scrutiny.
The growth and continuation of multinational companies and global consolidation can precipitate antitrust and competition scrutiny and the international spread of issues and practices that historically have been more common in the U.S., such as increased and complex litigation, corporate restructuring and bankruptcy activities, and antitrust and competition scrutiny.
These training programs are further supplemented by self-directed e-learning programs, among other segment-level talent development and training opportunities. • Corporate Citizenship. We practice responsible corporate citizenship to drive positive change in the communities in which we do business.
These training programs are supplemented by self-directed e-learning programs, among other segment-level talent development and training opportunities. 12 • Corporate Citizenship. We practice responsible corporate citizenship to drive positive change in the communities in which we do business.
Employment Agreements, Incentive, Retention and Sign-on Payments We have written employment agreements with substantially all of our 768 Senior Managing Directors and equivalent personnel (collectively, “SMDs”) that set forth their terms and conditions of service and compensation opportunities.
Employment Agreements, Incentive, Retention and Sign-on Payments We have written employment agreements with substantially all of our 806 Senior Managing Directors and equivalent personnel (collectively, “SMDs”) that set forth their terms and conditions of service and compensation opportunities.
Our services are centered around five core offerings: Construction, Projects & Assets and Environmental Solutions, Data & Analytics, Disputes, Healthcare Risk Management & Advisory and Risk and Investigations. In 2023, our FLC segment offered the following services: Construction, Projects, Assets & Environmental Solutions (“Construction Solutions”).
Our services are centered around five core offerings: Construction, Projects & Assets and Environmental Solutions, Data & Analytics, Disputes, Healthcare Risk Management & Advisory and Risk and Investigations. In 2024, our FLC segment offered the following services: Construction, Projects & Assets and Environmental Solutions (“Construction Solutions”).
Our experienced professionals are acknowledged leaders in their chosen field not only for their level of knowledge and understanding, but for their ability to structure practical workable solutions to complex issues and real-world problems.
Our experienced professionals are recognized leaders in their chosen field not only for their level of knowledge and understanding, but for their ability to structure practical, workable solutions to complex issues and real-world problems.
Clients During the year ended December 31, 2023, no single client accounted for more than 10% of our consolidated revenues and no reportable segment had a single client that accounted for more than 10% of its respective total segment revenues.
Clients During the year ended December 31, 2024, no single client accounted for more than 10% of our consolidated revenues and no reportable segment had a single client that accounted for more than 10% of its respective total segment revenues.
We deliver a wide range of services centered around three core offerings: Antitrust & Competition Economics, Financial Economics and International Arbitration. In 2023, our Economic Consulting segment offered the following services: Antitrust & Competition Economics.
We deliver a wide range of services centered around three core offerings: Antitrust & Competition Economics, Financial Economics and International Arbitration. In 2024, our Economic Consulting segment offered the following services: Antitrust & Competition Economics.
Additionally, 98 of the top 100 law firms as ranked by American Lawyer Global 100 Most Revenue List refer or engage us directly or on behalf of numerous clients on multiple matters.
Additionally, all of the top 100 law firms as ranked by American Lawyer Global 100 Most Revenue List refer or engage us directly or on behalf of numerous clients on multiple matters.
We deliver a wide range of services centered around three core offerings: Corporate Reputation, Financial Communications and Public Affairs. In 2023, our Strategic Communications segment offered the following services: Corporate Reputation.
We deliver a wide range of services centered around three core offerings: Corporate Reputation, Financial Communications and Public Affairs. In 2024, our Strategic Communications segment offered the following services: Corporate Reputation.
Our professionals include Ph.Ds, MBAs, JDs, CPAs, CPA-ABVs (CPAs accredited in business valuations), CPA-CFFs (CPAs certified in financial forensics), CRAs (certified risk analysts), Certified Turnaround Professionals, Certified Insolvency and Reorganization Advisors, Certified Fraud Examiners, ASAs (accredited senior appraisers), construction engineers and former senior government officials. • Inclusive and High-Performing Culture.
Our professionals include Ph.D.s, MBAs, JDs, CPAs, CPA-ABVs (CPAs accredited in business valuations), CPA-CFFs (CPAs certified in financial forensics), CRAs (certified risk analysts), Certified Turnaround Professionals, Certified Insolvency and Reorganization Advisors, Certified Fraud Examiners, ASAs (accredited senior appraisers), construction engineers and former senior government officials. • Inclusive and High-Performing Culture.
These challenges include enterprise risk management, global expansion, competition from established companies, emerging businesses and technologies, doing business in emerging markets, and new and changing regulatory requirements and legislation.
These challenges include enterprise risk management, reputational scrutiny, global expansion, competition from established companies, emerging businesses and technologies, doing business in emerging markets, and new and changing regulatory requirements and legislation.
The need to understand and address the impact of regulation and legislation, as well as the increasing costs of doing business, including the growing number of differing data sources maintained throughout the enterprise, has prompted companies to focus on better assessing and managing risks and opportunities.
The need to understand and address the impact of new or changing regulation and legislation, as well as the increasing costs of doing business, including the growing number of differing data sources maintained throughout the enterprise, has prompted companies to focus on better assessing and managing risks and opportunities.
The major industry groups that we service include: • Aerospace & Defense • Airlines & Aviation • Blockchain & Digital Assets • Chemicals • Construction & Environmental • Energy • Financial Services • Food & Agriculture • Healthcare & Life Sciences • Hospitality, Gaming & Leisure • Industrials & Automotive • Insurance • Mining • Private Equity • Power, Renewables & Energy Transition • Public Sector & Government Contracts 8 • Real Estate • Retail & Consumer Products • Telecom, Media & Technology • Transportation & Logistics Our Business Drivers Material factors that drive demand for our business offerings include: • Artificial Intelligence and Other New and Emerging Technologies.
The major industry groups that we service include: • Aerospace & Defense • Airlines & Aviation • Blockchain & Digital Assets • Chemicals • Construction & Environmental • Energy • Financial Services • Food & Agribusiness • Healthcare & Life Sciences • Hospitality, Gaming & Leisure • Industrials & Automotive • Insurance • Mining • Private Equity • Power, Renewables & Energy Transition • Professional Services 8 • Public Sector & Government Contracts • Real Estate • Retail & Consumer Products • Telecom, Media & Technology • Transportation & Logistics Our Business Drivers Material factors that drive demand for our business offerings include: • AI and Other New and Emerging Technologies.
We provide services that help clients strategize, structure, conduct diligence, integrate, carve-out, value and communicate around business transactions, including the following offerings: • Diligence (Financial, Tax, HR, IT, Synergy and Regulatory) • Fairness and Solvency Opinions • Investment Banking • Merger Integration & Carve-Out Advisory • Strategic Alternatives • Valuation Turnaround & Restructuring.
We provide services that help clients strategize, structure, diligence, integrate, carve-out, value and communicate around business transactions, including the following offerings: • Diligence (Financial, Tax, HR, IT, Synergy and Regulatory) • Fairness and Solvency Opinions • Investment Banking • Merger Integration & Carve-Out Advisory • Strategic Alternatives • Valuation Transformation & Strategy.
Our robust Talent Development program includes induction programs for new hires, milestone programs to prepare promotes for success in their new roles and leadership readiness programs to help our people build the skills needed to advance to our most senior positions.
Our robust Talent Development program includes onboarding programs for new hires, training programs to prepare promotes for success in their new roles and leadership readiness programs to help our people build the skills needed to advance to our most senior positions.
In substantially all cases, incentive compensation opportunities are subject to continued employment conditions. The compensation opportunities that we offer differ depending on an SMD’s or other employee’s, consultant’s or other professional’s title, level, and individual expertise and other qualifications, as well as across the jurisdictions in which we operate.
In substantially all cases, incentive compensation opportunities are subject to continued employment conditions. The compensation opportunities that we offer differ depending on the professional’s title, level, individual expertise and other qualifications, as well as across the jurisdictions in which we operate.
For the year ended December 31, 2023, we derived approximately 63% and 37% of our consolidated revenues from the work of professionals who are assigned to locations inside and outside the U.S., respectively. Seasonal factors, such as the timing of our employees’ and clients’ vacations and holidays, may impact the timing of our revenues across our segments.
For the year ended December 31, 2024, we derived approximately 64% and 36% of our consolidated revenues from the work of professionals who are assigned to locations inside and outside the U.S., respectively. Seasonal factors, such as the timing of our employees’ and clients’ vacations and holidays, may impact the timing of our revenues across our segments.
We help companies streamline and optimize legal operations through expertise and technology, including the following offerings: • Advisory on Governance, Policy, Standards and Execution • Advisory on Operational Efficiencies • Contract Services • Legal Technology Selection and Implementation 6 • Subscriptions and Managed Services E-discovery Services and Expertise.
We help companies streamline and optimize legal operations through an expert-driven approach leveraging technology and analytics, including the following offerings: • Advisory on Governance, Policy, Standards and Execution • Advisory on Operational Efficiencies • Contract Services 6 • Legal Technology Selection and Implementation • Subscriptions and Managed Services E-discovery and Analytics Services and Expertise.
We deliver a wide range of services centered around four core offerings: Business Transformation, Strategy, Transactions and Turnaround & Restructuring. In 2023, our Corporate Finance segment offered the following services: Business Transformation.
We deliver a wide range of services centered around three core offerings: Transactions, Transformation & Strategy and Turnaround & Restructuring. In 2024, our Corporate Finance segment offered the following services: Transactions.
Our Corporate Finance segment primarily competes with specialty boutiques and publicly traded companies providing restructuring, bankruptcy and M&A services and, to a lesser extent, large investment banks, management consulting firms and global accounting firms. Our FLC segment primarily competes with other large consulting companies, specialty boutiques and global accounting firms with service offerings similar to ours.
Our Corporate Finance segment primarily competes with specialty boutiques and publicly traded companies providing restructuring, bankruptcy and M&A services and, to a lesser extent, large investment banks, management consulting firms and global accounting firms.
We seek to integrate completed acquisitions and manage investments in a way that fosters organic growth, expands our geographic presence or complements our segments, services and industry positions. We typically structure our acquisitions to retain the services of key individuals from the acquired companies. • Profitable Growth .
We consider strategic and opportunistic acquisition opportunities on a selective basis. We seek to integrate completed acquisitions and manage investments in a way that fosters organic growth, expands our geographic presence or complements our segments, services and industry positions. We typically structure our acquisitions to retain the services of key individuals from the acquired companies. • Profitable Growth .
Our operations span the globe encompassing locations within: (i) the Americas, including 42 U.S. offices located in 22 states and Washington, D.C., and four offices located in Canada; (ii) Latin America, including six offices located in Argentina, Brazil, Colombia, Mexico, and the British Oversees Territories of the Cayman Islands and the Virgin Islands; (iii) Asia Pacific, including 16 offices located in Australia, China (including Hong Kong), India, Indonesia, Japan, Malaysia, Singapore and South Korea; and (iv) Europe, Middle East and Africa, including 35 offices located in Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Qatar, Saudi Arabia, South Africa, Spain, Switzerland, United Arab Emirates and the United Kingdom (“U.K.”).
Our operations span the globe encompassing locations within: (i) the Americas, including 38 U.S. offices located in 20 states and Washington, D.C., and four offices located in Canada; (ii) Latin America, including six offices located in Argentina, Brazil, Colombia, Mexico, and the British Overseas Territories of the Cayman Islands and the Virgin Islands; (iii) Asia Pacific, including 17 offices located in Australia, China (including Hong Kong), India, Indonesia, Japan, Malaysia, Singapore and South Korea; and (iv) Europe, Middle East and Africa, including 37 offices located in Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Lebanon, Netherlands, Portugal, Qatar, Saudi Arabia, South Africa, Spain, Sweden, Switzerland, United Arab Emirates and the United Kingdom (“UK”).
Many of our professionals are recognized experts in their respective fields. • Grow Organically . Our strategy is to identify where we are best positioned to help our clients solve their most complex issues, invest behind those positions and leverage that success to grow organically. • Strategic Acquisitions . We consider strategic and opportunistic acquisition opportunities on a selective basis.
Many of our professionals are recognized experts in their respective fields. 11 • Grow Organically . Our strategy is to identify where we are best positioned to help our clients solve their most complex issues, invest behind those positions and leverage that success to grow organically. • Strategic Acquisitions .
Financial market factors, including credit and financing availability, terms and conditions, the willingness of financial institutions to provide debt modifications or relief, corporate debt levels, default rates, capital markets transactions, increased consolidation and the growth of non-traditional currencies and related exchanges are significant drivers of demand for our business offerings, particularly our Corporate Finance segment. • Litigation and Disputes .
Financial market factors, including credit and financing availability, terms and conditions, the willingness of financial institutions to provide debt modifications or relief, corporate debt levels, default rates, bankruptcies and restructuring, capital markets transactions, increased consolidation and the growth of emerging currencies, including digital assets and related exchanges, are significant drivers of demand for our business offerings, particularly our Corporate Finance and Technology segments. 9 • Litigation and Disputes .
We provide independent business transformation expertise to help drive change across the enterprise, enhance performance, build sustainable growth and value and foster a culture of excellence, including the following offerings: • Enterprise Transformation • Office of the Chief Financial Officer & Finance Transformation • People & Change • Revenue & Operations • Technology Transformation Strategy.
We provide independent transformation & strategy expertise to deliver end-to-end value and drive change across the enterprise, enhance performance, build sustainable growth and foster a culture of excellence, including the following offerings: • Cost Transformation • Data & Technology Transformation • Office of the Chief Financial Officer & Finance Transformation • Operations & Supply Chain Transformation • People & Change • Revenue Transformation • Strategy 3 Turnaround & Restructuring.
We are also an advisor to 83 of the Fortune 100 companies, 38 of the world’s top 50 bank holding companies and 64 of the top 100 private equity firms on the Private Equity International 300 list. • Demand for Integrated Solutions and a Consultative Approach .
We are also an advisor to 90 of the Fortune 100 companies and 71 of the top 100 private equity firms on the Private Equity International 300 list. • Demand for Integrated Solutions and a Consultative Approach .
Regulatory complexity, public scrutiny and investigations drive demand for services across all of our segments. Increasingly complex global regulations and legislation, greater scrutiny of corporate governance, instances of corporate malfeasance, and more stringent and complex reporting requirements drive demand for our service offerings.
Regulatory complexity, public scrutiny and investigations drive demand for services across all of our segments. The uncertain and shifting regulatory environment, complex global regulations and legislation, greater scrutiny of corporate governance, instances of corporate malfeasance, including fraud, and evolving reporting requirements drive demand for our service offerings.
We believe our success is driven by a combination of long-standing competitive strengths, including: • Pre-eminent Positions and Professionals . We believe that we have pre-eminent market positions and professionals.
We believe our success is driven by a combination of long-standing competitive strengths, including: • Pre-eminent Positions and Professionals . As a leading global expert firm for crises and transformation, we believe that we have pre-eminent market positions and experts.
We believe that a workforce that reflects the myriad identities of our clients and vendors with whom we do business, our stakeholders and the populations of the regions in which we have operations improves the quality of our services, promotes employee satisfaction and retention, attracts a qualified workforce and increases the overall value of our business.
We believe that a workforce reflecting the diverse identities of our clients and vendors with whom we do business, our stakeholders and the populations of the regions in which we have operations improves the quality of our services, drives employee engagement and retention, attracts top talent and elevates the overall value of our business.
These programs are open to participation by all employees regardless of race and gender. Our recruitment and employment practices are designed to comply with the applicable laws of the jurisdictions in which we conduct those activities. • Talent Development. We support the development of our professionals at all levels of their careers.
Our recruitment and employment practices are designed to comply with the applicable laws of the jurisdictions in which we conduct those activities, reinforcing our commitment to equitable opportunities and a culture of belonging. • Talent Development. We support the development of our professionals at all levels of their careers.
Our key services include the following offerings: • Disputes and Investigations • Financial Advisory • Managed Care & Value Based Care • Risk, Regulatory & Quality Risk and Investigations. We provide compliance, investigative, litigation consulting and remediation expertise on a wide range of investigations to boards of directors, executive management, in-house counsel and their outside legal advisors at law firms.
We provide compliance, risk assessment, investigative, litigation consulting and remediation expertise on a wide range of investigations to boards of directors, executive management, in-house counsel and their outside legal advisors at law firms.
Loans provide that the principal amount and accrued interest will be forgiven, or repayment will be funded through an additional cash bonus payment, over the passage of time (subject to continued service) ranging from two to nine years.
Loans provide that the principal amount and accrued interest will be forgiven, or repayment will be funded through an additional cash bonus payment, over the passage of time (subject to continued service) ranging from two to nine years. Participants in non-U.S. jurisdictions may receive other forms of compensation under similar programs with substantially equivalent values and subject to comparable conditions.
Copies of this Annual Report, as well as other periodic reports filed with the SEC, may also be requested at no charge from our Corporate Secretary at FTI Consulting, Inc., 16701 Melford Boulevard, Suite 200, Bowie, MD 20715, email address: joanne.catanese@fticonsulting.com. 14
Copies of this Annual Report, as well as other periodic reports filed with the SEC, may also be requested at no charge from our Corporate Secretary at FTI Consulting, Inc., 555 12 th Street NW, Suite 700, Washington, D.C. 20004, email address: mike.rosenthall@fticonsulting.com. 14
We also engage independent contractors, who provide services to FTI Consulting to supplement our professionals on client engagements as needed. We advance the best interests of all our stakeholders through: • Attracting and Retaining Highly Qualified Professionals. Our professionals are crucial to delivering our services to clients and generating new business.
As of December 31, 2024, we employed 8,374 employees, of which 6,633 were billable professionals. We also engage independent contractors who provide services to FTI Consulting to supplement our professionals on client engagements as needed. We aim to advance the best interests of all our stakeholders through: • Attracting and Retaining Highly Qualified Professionals.
Since our businesses depend in large part on professional relationships, there are low barriers of entry for professionals, including our professionals, electing to work independently, start their own firms or change employers.
Our Technology segment, particularly with respect to hosting and e-discovery services, and to a lesser extent our other segments, may also compete on price. Since our businesses depend in large part on professional relationships, there are low barriers of entry for professionals, including our professionals, electing to work independently, start their own firms or change employers.
Through our substantial staff of highly qualified professionals, we can handle a large number of complex global assignments simultaneously.
Our professionals are crucial to delivering our services to clients and generating new business. Through our staff of highly qualified professionals, we can handle a large number of complex global assignments simultaneously.
Year Ended December 31, 2023 2022 Corporate Finance & Restructuring (1) 39 % 38 % Forensic and Litigation Consulting (1) 19 % 19 % Economic Consulting 22 % 23 % Technology 11 % 11 % Strategic Communications 9 % 9 % Total 100 % 100 % (1) Effective July 1, 2023, prior period segment information for the Corporate Finance and FLC segments has been recast in this Annual Report to include the reclassification of the portion of the Company’s health solutions practice in the FLC segment to our realigned business transformation practice within our Corporate Finance segment. 2 The following table sets forth the number of offices and countries in which each segment operates, as well as the number of revenue-generating professionals in each of our reportable segments.
Year Ended December 31, 2024 2023 Corporate Finance & Restructuring 38 % 39 % Forensic and Litigation Consulting 19 % 19 % Economic Consulting 23 % 22 % Technology 11 % 11 % Strategic Communications 9 % 9 % Total 100 % 100 % 2 The following table sets forth the number of offices and countries in which each segment operates, as well as the number of billable professionals in each of our reportable segments.
In marketing our services, we emphasize our experience, the quality of our services and our professionals’ particular areas of expertise, as well as our ability to quickly staff large engagements across multiple jurisdictions.
In marketing our services, we emphasize our experience, the quality of our services and our professionals’ particular areas of expertise, as well as our ability to quickly staff large engagements across multiple jurisdictions. While we aggressively seek new business opportunities, we maintain high professional standards and carefully evaluate potential new client relationships and engagements before accepting them.
Our breadth and depth of practice and service offerings combined with our deep industry expertise and global footprint drive demand from clients that seek our unique cross-segment and cross-region client solutions when they are facing their most significant challenges and opportunities: event-driven occurrences, reputational issues, antitrust issues, liquidity issues, investigations and disputes, and transactions across different jurisdictions. • Strong Cash Flows .
Our breadth and depth of practice and service offerings combined with our deep industry expertise and global footprint drive demand from clients that seek our unique cross-segment and cross-region client solutions as a leading global expert firm for crises and transformation: both event-driven and well-planned situations, including mergers and acquisitions, reputational issues, antitrust issues, liquidity issues, investigations and disputes, and long-term transformation and strategy events across different jurisdictions. • Strong Cash Flows .
We foster a culture where our professionals can grow their careers and achieve their full potential. We are dedicated to recruiting, employing and maintaining a diverse and inclusive workforce. As a global multi-cultural company, our talent and retention initiatives are designed to provide opportunities across genders, races, nationalities and sexual orientations.
We are committed to fostering an inclusive and high-performing culture where our professionals can grow their careers and achieve their full potential. We are dedicated to recruiting, employing and maintaining a diverse and inclusive workforce.
We do this by attracting and retaining experts in their fields, empowering a diverse and inclusive global workforce, providing opportunities for advancement and personal growth, and supporting the communities in which we do business. As of December 31, 2023, we employed 7,990 employees, of which 6,350 were revenue-generating professionals.
Human Capital Resources At FTI Consulting, we seek to provide the highest quality services to our clients. We do this by attracting and retaining experts in their fields, empowering a diverse and inclusive global workforce, providing opportunities for advancement and personal growth, and supporting the communities in which we do business.
Our Strategic Communications segment competes with large public relations firms, as well as boutique M&A, crisis communications and public affairs firms. 13 Some service providers are larger than we are and, on certain engagements, may have an advantage over us with respect to one or more competitive factors.
Some service providers are larger than we are and, on certain engagements, may have an advantage over us with respect to one or more competitive factors. Specialty boutiques or smaller local or regional firms, while not offering the range of services we provide, may compete with us on the basis of geographic proximity, specialty services or price.
Our Reportable Segments The Company is organized into five reportable segments, each of which seeks to be a global leader in its own right by serving as a trusted advisor when our clients are presented with challenging issues and the risks are high.
December 31, December 31, 2024 2024 2023 Offices Countries (1) Billable Headcount Billable Headcount Corporate Finance & Restructuring 72 29 2,286 2,215 Forensic and Litigation Consulting 68 21 1,542 1,447 Economic Consulting 51 24 1,110 1,089 Technology 44 17 714 628 Strategic Communications 43 23 981 971 Total 6,633 6,350 (1) “Countries” include the British Overseas Territories of the Cayman Islands and Virgin Islands Our Reportable Segments The Company is organized into five reportable segments, each of which seeks to be a global leader in its own right by serving as a trusted advisor when our clients are presented with challenging issues and the risks are high.
Our Economic Consulting segment primarily competes with individually recognized economists, specialty boutiques and large consulting companies with service offerings similar to ours. Our Technology segment primarily competes with consulting and/or software providers specializing in e-discovery, electronically stored information and the management of electronic content. Competitors may offer products and/or services intended to address one piece or more of those areas.
Our Technology segment primarily competes with consulting and/or software providers specializing in e-discovery, electronically stored information and the management of electronic content. Our Strategic Communications segment competes with large public relations firms, as well as boutique M&A, crisis communications and public affairs firms.
Larger competitors may be able to react more quickly to new regulatory or legal requirements and other changes and may be able to innovate more quickly and efficiently.
In addition, some segments compete in industries subject to significant and rapid innovation. Larger competitors may be able to react more quickly to new regulatory or legal requirements and other changes. Corporate Information Our common stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol FCN.
Restructuring Advisor by The Deal for the 16th consecutive year. 10 • FTI Consulting recognized as Cybersecurity Public Relations Agency of the Year by Cybersecurity Excellence Awards for the third consecutive year. • Diversified Service Offerings . Our five reportable segments offer a diversified portfolio of practices providing services across our four geographic regions.
News Best Companies to Work For by U.S. News & World Report . • Compass Lexecon ranked as an Elite Competition Economics Firm in the Global Competition Review 100 2024 . • Diversified Service Offerings . Our five reportable segments offer a diversified portfolio of practices providing services across our four geographic regions.
Removed
December 31, December 31, 2023 2023 2022 Offices Countries (1) Billable Headcount Billable Headcount Corporate Finance & Restructuring (2) 70 26 2,215 2,100 Forensic and Litigation Consulting (2) 68 19 1,447 1,430 Economic Consulting 47 19 1,089 1,007 Technology 43 18 628 556 Strategic Communications 42 22 971 970 Total 6,350 6,063 (1) “Countries” include the British Overseas Territories of the Cayman Islands and Virgin Islands (2) Effective July 1, 2023, prior period segment information for the Corporate Finance and FLC segments has been recast in this Annual Report to include the reclassification of the portion of the Company’s health solutions practice in the FLC segment to our realigned business transformation practice within our Corporate Finance segment.
Added
Our key services include the following offerings: • Disputes and Investigations • Financial Advisory • Managed Care & Value-based Care • Risk, Regulatory and Quality Risk and Investigations.
Removed
Our FTI Delta strategy offering delivers tangible value throughout the entire strategy-to-execution journey for top-tier corporations, private equity and debt investors, mid-market companies and governments from our industry-specialized strategy practice, including the following offerings: • Commercial Diligence • Commercial Excellence • Cost Transformation • Merger & Acquisition (“M&A”) Strategy • Organization and Governance 3 • Product Innovation and Research & Development Transactions.
Added
We have been leveraging AI to develop solutions for our clients for over a decade, building a leading position in the legal market. We continue to invest in machine learning and AI-related platforms to support our internal infrastructure.
Removed
We have identified AI and other new and emerging technologies as future growth engines for FTI Consulting. We currently offer AI-related consulting as a service to clients and are actively investigating other opportunities. We also incorporate AI, machine learning and other new technologies to perform certain of the other services that we currently offer.
Added
We help our clients adapt to the changing technological, regulatory and ethical landscape and actively partner with them to integrate these new technologies into their organizations, including embedding these technologies into our transformation & strategy and disputes offerings, among others.
Removed
We have been making judicious investments to refine our strategy, develop new services, identify opportunities, improve our performance and client satisfaction, and otherwise benefit our clients. Our segments employ specialists in AI and other developing technologies who provide specialized services and expertise.
Added
Our AI experts craft tailored AI strategies that align with our clients’ business objectives, leveraging AI and other technologies in their organizations to respond to the market, unlock growth opportunities and manage risk.
Removed
We believe that demand for AI, machine learning and other innovative technology-related consulting services will continue to grow as the development of AI and other technologies progress, investment increases, markets expand, products and applications develop, innovation continues, technology matures, acceptance rises, regulation advances, and ethical and similar issues are addressed.
Added
We continue to invest in our open-source approach while making judicious investments in new and emerging technologies, adapting and refining our strategy by embracing new ways of working to develop services, identify commercial opportunities, improve our performance, increase internal efficiencies and otherwise add value for our clients.
Removed
We believe that organizations will seek out expertise like ours to improve workflow and outcomes. • Developing Markets .
Added
We have seen, and continue to believe, that the demand for AI and other technology-enabled consulting services will continue to grow as these capabilities advance in sophistication. • Cybersecurity Risk.
Removed
While we aggressively seek new business opportunities, we maintain high professional standards and carefully evaluate potential new client relationships and engagements before accepting them. 11 Human Capital Resources At FTI Consulting, we seek to provide the highest quality services to our clients.
Added
The evolving cybersecurity risk landscape, characterized by increasingly sophisticated threats and rising incidents of data breaches, drives demand for cybersecurity preparedness, post-breach investigations, crisis communications and related services, particularly in our FLC, Technology and Strategic Communications segments.
Removed
We also hire and strive to retain professionals with the diverse set of qualities, backgrounds and expertise that our clients and teams need.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFLC — The settlement of litigation; less frequent instances of significant mismanagement, fraud, wrongdoing or other business problems that could result in fewer or less complex business engagements; fewer and less complex legal disputes; fewer class action suits; the timing of the completion of engagements; less government regulation or fewer regulatory investigations; and the timing of government investigations and litigation.
Biggest changeFLC — The settlement of litigation; less frequent instances of significant mismanagement, fraud, wrongdoing or other business problems that could result in fewer or less complex business engagements; fewer and less complex legal disputes; fewer class action suits; the timing of the completion of engagements; less government regulation, less government enforcement activity, and fewer regulatory investigations; and the timing of government investigations and litigation. 16 Economic Consulting — Fewer, smaller and less complex M&A activity; less capital markets activity or fewer complex transactions; a reduced number of regulatory filings and less litigation, reduced or less aggressive antitrust and competition regulation or enforcement; fewer government investigations and proceedings; and the timing of client utilization of our services.
There is no assurance that (i) we can successfully develop and deploy AI or other technologies in our business, (ii) such technologies will improve and enhance our services, operations or profitability, (iii) clients will accept the incorporation of 17 such technology in our services, (iv) we can successfully market the use of these technologies to prospective clients, (vi) we can hire and retain staff with the required specialized knowledge and skills to utilize these technologies, (vi) new cybersecurity and other threats and incidents will not arise, (vii) we can identify, mitigate or recover from cybersecurity or other adverse events that occur, (viii) we can protect and maintain the privacy of our employees and confidential and proprietary information, (ix) governmental regulation will be adopted and what such requirements will be, (x) material additional monetary and time expenditures will not be required, (xi) we can pass on costs of such technologies to clients, (xii) we can integrate other technologies we use with AI, or (xiii) AI and machine learning and other new technologies will not result in significant legal and other liabilities, challenges, regulatory or operational issues, and ethical or other dilemmas.
There is no assurance that (i) we can successfully develop and deploy AI or other technologies in our business, (ii) such technologies will improve and enhance our services, operations or profitability, (iii) clients will accept the incorporation of such technology in our services, (iv) we can successfully market the use of these technologies to prospective clients, (vi) we can hire and retain staff with the required specialized knowledge and skills to utilize these technologies, (vi) new cybersecurity and other threats and incidents will not arise, (vii) we can identify, mitigate or recover from cybersecurity or other adverse events that occur, (viii) we can protect and maintain the privacy of our employees and confidential and proprietary information, (ix) governmental regulation will be adopted and what such requirements will be, (x) material additional monetary and time expenditures will not be required, (xi) we can pass on costs of such technologies to clients, (xii) we can integrate other technologies we use with AI, or (xiii) AI and machine learning and other new technologies will not result in significant legal and other liabilities, challenges, regulatory or operational issues, and ethical or other dilemmas.
Our operations involve financial and business risks that differ among the U.S. and the different foreign jurisdictions in which we operate including: (i) cultural and language differences; (ii) various levels of FTI Consulting “brand” recognition; (iii) different employment laws and rules, employment or service contracts, compensation methods, and social and cultural factors that could result in employee turnover, lower utilization rates, higher costs and cyclical fluctuations in utilization that could adversely affect financial and operating results; (iv) foreign currency disruptions and currency fluctuations between the U.S. dollar and foreign currencies that could adversely affect financial and operating results; (v) differing legal and regulatory requirements and other barriers to conducting business; (vi) difficulties resolving the collection of receivables when legal proceedings are necessary; (vii) difficulties in managing our non-U.S. operations, including client relationships, in certain locations; (viii) disparate systems, policies, procedures and processes; (ix) failure to comply with the FCPA and anti-bribery laws of other jurisdictions; (x) higher operating costs; (xi) longer sales and/or collections cycles; (xii) potential restrictions or adverse tax consequences resulting from the repatriation of foreign earnings, such as trapped foreign losses and importation or withholding taxes; (xiii) different or less stable political and/or economic environments; (xiv) wars and other geopolitical conflicts; (xv) conflicts between and among the U.S. and countries in which we conduct business, including those arising from trade disputes or disruptions, the termination or suspension of treaties, or boycotts; (xvi) civil disturbances or other catastrophic events that reduce business activity; (xvii) political interference with our ability to conduct business in the applicable jurisdiction; (xviii) impact of public health crises, including varying governmental responses and requirements, client impacts and travel restrictions; (xix) failure to achieve or maintain a diverse workforce or otherwise meet evolving governmental or client-related standards and requirements pertaining to ESG-related issues; and (xx) physical risks associated with climate change, including rising temperatures, severe storms, energy disruptions, flooding and rising sea levels, among others.
Our operations involve financial and business risks that differ among the U.S. and the different foreign jurisdictions in which we operate including: (i) cultural and language differences; (ii) various levels of FTI Consulting “brand” recognition; (iii) different employment laws and rules, employment or service contracts, compensation methods, and social and cultural factors that could result in employee turnover, lower utilization rates, higher costs and cyclical fluctuations in utilization that could adversely affect financial and operating results; (iv) foreign currency disruptions and currency fluctuations between the U.S. dollar and foreign currencies that could adversely affect financial and operating results; (v) differing legal and regulatory requirements and other barriers to conducting business; (vi) difficulties resolving the collection of receivables when legal proceedings are necessary; (vii) difficulties in managing our non-U.S. operations, including client relationships, in certain locations; (viii) disparate systems, policies, procedures and processes; (ix) failure to comply with the FCPA and anti-bribery laws of other jurisdictions; (x) higher operating costs; (xi) longer sales and/or collections cycles; (xii) potential restrictions or adverse tax consequences resulting from the repatriation of foreign earnings, such as trapped foreign losses and importation or withholding taxes; (xiii) different or less stable political and/or economic environments; (xiv) wars and other geopolitical conflicts; (xv) conflicts between and among the U.S. and countries in which we conduct business, including those arising from trade disputes or disruptions, the termination or suspension of treaties, or boycotts; (xvi) civil disturbances or other catastrophic events that reduce business activity; (xvii) political interference with our ability to conduct business in the applicable jurisdiction; (xviii) impact of public health crises, including varying governmental responses and requirements, client impacts and travel restrictions; (xix) failure to achieve or maintain a diverse workforce or otherwise meet evolving governmental or client-related standards and requirements pertaining to ESG-related issues; and (xx) physical risks associated with climate change, including rising temperatures, severe storms, energy disruptions, fires or wildfires, flooding and rising sea levels, among others.
Our senior secured bank revolving credit facility (“Credit Facility”), or our other indebtedness outstanding from time to time, contains or may contain operating covenants that may, subject to exceptions, limit our ability and the ability of our subsidiaries to, among other things: (i) create, incur or assume certain liens; (ii) make certain restricted payments, investments and loans; (iii) create, incur or assume additional indebtedness or guarantees; (iv) create restrictions on the payment of dividends or other distributions to us from our restricted subsidiaries; (v) engage in M&A transactions, consolidations, sale- 26 leasebacks, joint ventures, and asset and security sales and dispositions; (vi) pay dividends or redeem or repurchase our capital stock; (vii) alter the business that we and our subsidiaries conduct; (viii) engage in certain transactions with affiliates; (ix) modify the terms of certain indebtedness; (x) prepay, redeem or purchase certain indebtedness; and (xi) make material changes to accounting and reporting practices.
Our senior secured bank revolving credit facility (“Credit Facility”), or our other indebtedness outstanding from time to time, contains or may contain operating covenants that may, subject to exceptions, limit our ability and the ability of our subsidiaries to, among other things: (i) create, incur or assume certain liens; (ii) make certain restricted payments, investments and loans; (iii) create, incur or assume additional indebtedness or guarantees; (iv) create restrictions on the payment of dividends or other distributions to us from our restricted subsidiaries; (v) engage in M&A transactions, consolidations, sale-leasebacks, joint ventures, and asset and security sales and dispositions; (vi) pay dividends or redeem or repurchase our capital stock; (vii) alter the business that we and our subsidiaries conduct; (viii) engage in certain transactions with affiliates; (ix) modify the terms of certain indebtedness; (x) prepay, redeem or purchase certain indebtedness; and (xi) make material changes to accounting and reporting practices.
Technology — The settlement of litigation; a decline in volume and complexity of litigation proceedings and governmental investigations; a decline in volume and the timing of M&A activities and reduced or less aggressive enforcement 16 of antitrust and competition regulations; the more rapid and successful integration of new and emerging technologies in client offerings, such as AI or machine learning, by competitors, or the availability and engagement of independent consultants, which this segment, more than our other segments, relies on for staffing e-discovery and certain other types of client engagements.
Technology — The settlement of litigation; a decline in volume and complexity of litigation proceedings and governmental investigations; a decline in volume and the timing of M&A activities and reduced or less aggressive enforcement of antitrust and competition regulations; the more rapid and successful integration of new and emerging technologies in client offerings, such as AI or machine learning, by competitors, or the availability and engagement of independent consultants, which this segment, more than our other segments, relies on for staffing e-discovery and certain other types of client engagements.
In addition, our Economic Consulting segment has contracts with select economists or professionals that provide for compensation equal to a percentage of such individual’s annual collected client fees plus a percentage of the annual fees generated by junior professionals working on engagements managed by such professionals, which results in compensation expenses for that segment being a higher percentage of segment revenues and Adjusted Segment EBITDA than the compensation paid by other segments.
In addition, our Economic Consulting segment has contracts with select economists or professionals that provide for compensation equal to a percentage of such individual’s annual collected client fees plus a percentage of the annual fees generated by junior professionals working on engagements managed by such professionals, which results in compensation expenses for that segment being a higher percentage of segment revenues and Adjusted Segment EBITDA than the 22 compensation paid by other segments.
We are subject to and routinely face cyber-based attacks and attempts by hackers and similar unauthorized users to gain access to or corrupt our information technology systems. Such attacks, if successful, could harm our overall professional reputation, disrupt our business operations, cause us to incur unanticipated losses or expenses, and result in unauthorized disclosures of confidential or proprietary information.
We are subject to and routinely face cyber-based attacks and attempts by hackers and similar unauthorized users to gain access to or corrupt our information technology systems. Such attacks, if successful, could harm our overall professional reputation, disrupt our business operations, cause us to incur unanticipated losses or expenses, and result in unauthorized disclosures of 18 confidential or proprietary information.
In addition, the adoption and deployment of AI, machine learning and other new and emerging technologies by competitors more rapidly or successfully than we do could materially adversely affect our competitive position and financial results. New technologies, such as AI and machine learning, continue to evolve and as a result risks continue to be unknown or uncertain.
In addition, the adoption and deployment of AI, machine learning and other new and emerging technologies by 17 competitors more rapidly or successfully than we do could materially adversely affect our competitive position and financial results. New technologies, such as AI and machine learning, continue to evolve and as a result risks continue to be unknown or uncertain.
Certain activities may be carved out of, or otherwise may not be prohibited by, these arrangements. We cannot assure that one or more of the parties from whom we acquire a business or assets, or who do not join us or leave our employment, will not compete with us or solicit our employees or clients in the future.
Certain activities may be carved out of, or otherwise may not be prohibited by, these 25 arrangements. We cannot assure that one or more of the parties from whom we acquire a business or assets, or who do not join us or leave our employment, will not compete with us or solicit our employees or clients in the future.
If we cannot manage our work in process, our professionals may be underutilized until we can reassign them or obtain new engagements, which can adversely affect financial results. 24 The engagement letters that we typically enter into with clients do not obligate them to continue to use our services.
If we cannot manage our work in process, our professionals may be underutilized until we can reassign them or obtain new engagements, which can adversely affect financial results. The engagement letters that we typically enter into with clients do not obligate them to continue to use our services.
The loss of key professionals may harm our business and financial results and cause us not to realize the anticipated benefits of the acquisition. Risks Related to Our Indebtedness Our leverage could adversely affect our financial condition or operating flexibility if the Company fails to comply with operating covenants under applicable debt instruments.
The loss of key professionals may harm our business and financial results and cause us not to realize the anticipated benefits of the acquisition. 26 Risks Related to Our Indebtedness Our leverage could adversely affect our financial condition or operating flexibility if the Company fails to comply with operating covenants under applicable debt instruments.
We believe that a workforce that reflects the myriad identities of our clients and vendors with whom we do business, our stakeholders and the populations of the regions in which we have operations results in best in class advice to our clients, improves the quality of our services, promotes employee satisfaction and retention, and increases the overall value of our business.
We believe that a workforce that reflects the myriad identities of our clients and vendors with whom we do business, our stakeholders and the populations of the regions in which we have operations results in best in class advice to our clients, improves the quality of our 23 services, promotes employee satisfaction and retention, and increases the overall value of our business.
In addition, we may not pursue legal remedies if we determine that preserving cooperation and a professional relationship with a former employee or his or her clients, or other concerns, outweighs the benefits of any possible legal recourse or the likelihood of success does not justify the costs of pursuing a legal 25 remedy.
In addition, we may not pursue legal remedies if we determine that preserving cooperation and a professional relationship with a former employee or his or her clients, or other concerns, outweighs the benefits of any possible legal recourse or the likelihood of success does not justify the costs of pursuing a legal remedy.
In addition, as a corporation whose securities are registered under the Securities Act and publicly traded on the NYSE, our executive officers, outside directors, employees and 19 independent contractors are required to comply with the prohibitions against insider trading of our securities. In addition, we impose certain restrictions on the trading of securities of our clients.
In addition, as a corporation whose securities are registered under the Securities Act and publicly traded on the NYSE, our executive officers, outside directors, employees and independent contractors are required to comply with the prohibitions against insider trading of our securities. In addition, we impose certain restrictions on the trading of securities of our clients.
The results of different segments and practices may be affected differently by the above factors. Certain of our practices, particularly our restructuring practice, tend to experience their highest demand during periods when market and/or industry conditions are less favorable for many businesses.
The results of different segments and practices may be affected differently by the above factors. Certain of our practices, particularly our restructuring practice, tend to experience their highest demand during periods when market and/or industry 15 conditions are less favorable for many businesses.
We promote inclusion through education, training and development opportunities. Failure to maintain an inclusive workforce may adversely affect our business. 23 Risks Related to Our Client Relationships Damage to our reputation could result in material adverse consequences to our business and adversely impact our client engagements and financial results.
We promote inclusion through education, training and development opportunities. Failure to maintain an inclusive workforce may adversely affect our business. Risks Related to Our Client Relationships Damage to our reputation could result in material adverse consequences to our business and adversely impact our client engagements and financial results.
If we fail to effectively protect the confidentiality of our clients’ or our own IP and proprietary information from disclosure or misuse by our employees, contractors or third parties, the financial results of the affected segment or the Company 18 and our reputation would be adversely affected.
If we fail to effectively protect the confidentiality of our clients’ or our own IP and proprietary information from disclosure or misuse by our employees, contractors or third parties, the financial results of the affected segment or the Company and our reputation would be adversely affected.
We depend on multiple information systems, including our enterprise resource planning (“ERP”) system, for operating our business and internal controls. We utilize commercially available third-party technology solutions, which in many cases are customized to our business needs.
We depend on multiple information systems, including our enterprise resource planning system, for operating our business and internal controls. We utilize commercially available third-party technology solutions, which in many cases are customized to our business needs.
On the other hand, those same factors may cause one or more of our other segments and practices, such as our 15 antitrust & competition practice in Economic Consulting, to experience reduced demand.
On the other hand, those same factors may cause one or more of our other segments and practices, such as our antitrust & competition practice in Economic Consulting, to experience reduced demand.
Any failure to comply with U.S. federal and state, and international laws and regulations or court decisions, or to meet the evolving expectations of our investors and other stakeholders and interested parties, could result in legal or regulatory proceedings against us, increased adverse public scrutiny, client dissatisfaction, reputational harm, employee disenfranchisement, increased employee turnover and other challenges in retaining, recruiting and hiring employees, which may give rise to damages or penalties, and materially adversely affect our business, financial results and stock performance.
Any failure to comply with U.S. federal and state and international laws and regulations or court decisions, or to meet the evolving expectations of our investors, other stakeholders and interested parties, and the media (including social media), could result in legal or regulatory proceedings against us, increased adverse public scrutiny, client dissatisfaction, reputational harm, employee disenfranchisement, increased employee turnover and other challenges in retaining, recruiting and hiring employees, which may give rise to damages or penalties, and materially adversely affect our business, financial results and stock performance.
The Company’s own confidential and proprietary information and that of our clients or vendors could be compromised, whether intentionally or unintentionally, by our employees, consultants, contractors or vendors. In addition, physical risks associated with climate change, including energy disruptions, flooding and other events, may adversely impact the integrity of our information technology systems.
The Company’s own confidential and proprietary information and that of our clients or vendors could be compromised, whether intentionally or unintentionally, by our employees, consultants, contractors or vendors. In addition, physical risks associated with climate change, including energy disruptions, flooding, fires or wildfires, and other events, may adversely impact the integrity of our information technology systems.
As of December 31, 2023, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, including our business strategy, results of operations or financial condition, or that we believe are reasonably likely to have such an effect over the long term.
As of December 31, 2024, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, including our business strategy, results of operations or financial condition, or that we believe are reasonably likely to have such an effect over the long term.
We experience fluctuations in our annual and quarterly financial results, including revenues, operating income and earnings per share, for reasons that include: (i) the types and complexity, number, size, timing and duration of client engagements; (ii) the timing of revenues; (iii) the utilization of revenue-generating professionals, including the ability to adjust staffing levels up or down to accommodate the business and prospects of the applicable segment and practice; (iv) the number of new hires, their compensation and the time it takes before a new hire becomes profitable; (v) the geographic locations of our clients or the locations where services are rendered; (vi) billing rates and fee arrangements, including the opportunity and ability to successfully reach milestones, and complete engagements and collect success fees and other outcome-contingent or performance-based fees; (vii) the length of billing and collection cycles and changes in amounts that may become uncollectible; (viii) changes in the frequency and complexity of government regulatory and enforcement activities; (ix) business and asset acquisitions; (x) fluctuations in the exchange rates of various currencies against the U.S. dollar; (xi) wage and cost increases; and (xii) other economic factors beyond our control.
We experience fluctuations in our annual and quarterly financial results, including revenues, operating income and earnings per share, for reasons that include: (i) the types and complexity, number, size, timing and duration of client engagements; (ii) the timing of revenues; (iii) the utilization of billable professionals, including the ability to adjust staffing levels up or down to accommodate the business and prospects of the applicable segment and practice; (iv) the number of new hires, their compensation and the time it takes before a new hire becomes profitable; (v) the departure of professionals in the ordinary course of business; (vi) the geographic locations of our clients or the locations where services are rendered; (vii) billing rates and fee arrangements, including the opportunity and ability to successfully reach milestones, and complete engagements and collect success fees and other outcome-contingent or performance-based fees; (viii) the length of billing and collection cycles and changes in amounts that may become uncollectible; (ix) changes in the frequency and complexity of government regulatory and enforcement activities; (x) business and asset acquisitions; (xi) fluctuations in the exchange rates of various currencies against the U.S. dollar; (xii) wage and cost increases; and (xiii) other economic factors beyond our control.
They also develop strong bonds with the clients they serve, which is a critical element in obtaining and maintaining client engagements. Our continued success depends upon our ability to attract and retain professionals who have expertise, a good reputation and client relationships critical to maintaining and developing our business.
Our professionals have highly specialized skills. They also develop strong bonds with the clients they serve, which is a critical element in obtaining and maintaining client engagements. Our continued success depends upon our ability to attract and retain professionals who have expertise, a good reputation and client relationships critical to maintaining and developing our business.
Due to the global nature of our business, we are exposed to a variety of physical risks related to climate change, including extreme temperatures, severe storms, energy disruptions, floods and rising sea levels, among others, all of which are beyond our control.
Due to the global nature of our business, we are exposed to a variety of physical risks related to climate change, including extreme temperatures, severe storms, energy disruptions, fires or wildfires, floods and rising sea levels, among others, all of which are beyond our control.
Our segments and practices could suffer competitive, reputational and business harm or increased liability arising from the rapid introduction, deployment, evolution and use of new technologies, including Artificial Intelligence (“AI”) and machine learning. Our services are extremely complicated and differ materially among our segment and practice offerings.
Our segments and practices could suffer competitive, reputational and business harm or increased liability arising from the rapid introduction, deployment, evolution and use of new technologies, including AI and machine learning. Our services are extremely complicated and differ materially among our segment and practice offerings.
Some U.S. states, recent U.S. court decisions and third-party activists are restricting or otherwise attempting to influence how we make and manage recruiting, hiring and other employment decisions.
Some U.S. states, recent U.S. court decisions, the federal government and third-party activists are restricting or otherwise attempting to influence how we make and manage recruiting, hiring and other employment decisions.
Delays in fully finalizing and implementing our new ERP system or any of our other information systems or failure of such system to work properly or if any of them should become unavailable, could require us to expend substantial time, effort and costs to adjust our processes, implement changes or corrections, or repair or replace such systems, to carry out our operations, including preparation of our financial statements and to maintain the effectiveness of our internal controls.
Delays in implementing our information systems, upgrading such systems or failure of such systems to work properly or if any of them should become unavailable, could require us to expend substantial time, effort and costs to adjust our processes, implement changes or corrections, or repair or replace such systems, to carry out our operations, including preparation of our financial statements and to maintain the effectiveness of our internal controls.
There is increased regulation as well as focus from governmental organizations, and our investors, clients and employees, on environmental- and sustainability-related issues. Governments and regulators around the world are increasingly enacting laws and regulations regarding climate change.
There is increased regulation as well as focus from governmental organizations, and our investors, clients and employees, as well as other stakeholders and the media (including social media), on environmental- and sustainability-related issues. Governments and regulators around the world are increasingly enacting laws and regulations regarding climate change.
For example, in periods of limited credit availability, reduced M&A activity and/or declining business and/or consumer spending, while not always the case, there may be increased restructuring opportunities that will cause our restructuring practice to experience high demand as was the case for our Corporate Finance segment in 2023.
For example, in periods of limited credit availability, reduced M&A activity and/or declining business and/or consumer spending, while not always the case, there may be increased restructuring opportunities that will cause our restructuring practice to experience high demand.
Our success and future growth is dependent, in large part, on our ability to keep our supply of skills and human resources in balance with client demand around the world. To attract and retain clients, we need to demonstrate professional acumen and build trust and strong relationships. Our professionals have 21 highly specialized skills.
We deliver sophisticated professional services to our clients. Our success and future growth is dependent, in large part, on our ability to keep our supply of skills and human resources in balance with client demand around the world. To attract and retain clients, we need to demonstrate professional acumen and build trust and strong relationships.
An increase in debt service obligations under our variable rate indebtedness could affect our ability to make payments required under the terms of the agreements governing our indebtedness or our other indebtedness outstanding from time to time.
An increase in debt service obligations under our variable rate indebtedness could affect our ability to make payments required under the terms of the agreements governing our indebtedness or our other indebtedness outstanding from time to time. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Our failure to achieve and maintain an inclusive workforce may impair our ability to attract and retain qualified employees, win and maintain clients, or attract investment, which could have a material adverse effect on our business and financial results, as well as reputational harm.
Our failure to achieve and maintain an inclusive workforce may impair our ability to attract and retain qualified employees, win and maintain clients, or attract investment, which could have a material adverse effect on our business and financial results, as well as reputational harm. As a global company, our talent and retention initiatives are designed to create an inclusive workforce.
If we default on any guaranteed indebtedness, our U.S. subsidiaries that are guarantors could be required to make payments under their guarantees, and the lenders under our Credit Facility could foreclose on certain of our U.S. subsidiaries’ assets to satisfy unpaid obligations, which could materially adversely affect our business and financial results. 27 Our variable rate indebtedness will subject us to interest rate risk, which could cause our annual debt service obligations to increase significantly.
If we default on any guaranteed indebtedness, our U.S. subsidiaries that are guarantors could be required to make payments under their guarantees, and the lenders under our Credit Facility could foreclose on certain of our U.S. subsidiaries’ assets to satisfy unpaid obligations, which could materially adversely affect our business and financial results.
In the event an employee departs and acts in a way that we believe violates an applicable non-competition or non-solicitation agreement, we will consider any available legal remedies we may have against such person on a case-by-case basis.
In the case of employees outside the U.S., we draft non-competition provisions in an effort to comply with applicable foreign law. In the event an employee departs and acts in a way that we believe violates an applicable non-competition or non-solicitation agreement, we will consider any available legal remedies we may have against such person on a case-by-case basis.
We are exposed to certain physical and regulatory risks related to climate change, which could adversely affect our business, financial condition and results of operations.
Such charges have had and could have a material adverse impact on our results of operations. We are exposed to certain physical and regulatory risks related to climate change, which could adversely affect our business, financial condition and results of operations.
Professionals may leave our Company to form or join competitors or clients, and we may not have, or may choose not to pursue, legal recourse against such professionals. Our professionals typically have close relationships with the clients they serve, based on their expertise and bonds of personal trust and confidence.
Professionals may leave our Company to form or join competitors or clients, and the loss of such professionals may negatively impact our business and operations. Our professionals typically have close relationships with the clients they serve, based on their expertise and bonds of personal trust and confidence.
Our information systems may be compromised by power outages, computer and telecommunications failures, computer viruses, security breaches, hackers, catastrophic events, human error and other events, many of which are beyond our control, and are subject to obsolescence and technological changes. We continue to implement and improve the utilization of our new ERP system that went into effect in April 2023.
Our information systems may be compromised by power outages, computer and telecommunications failures, computer viruses, security breaches, hackers, catastrophic events, human error and other events, many of which are beyond our control, and are subject to obsolescence and technological changes.
Any claim by a client or third-party against us could expose us to reputational issues that adversely affect our ability to attract new or maintain existing engagements or clients or qualified professionals or other employees, consultants or contractors.
Any claim by a client or third-party against us could expose us to reputational issues that adversely affect our ability to attract new or maintain existing engagements or clients or qualified professionals or other employees, consultants or contractors. 24 Our clients may terminate our engagements with little or no notice and without penalty, which may result in unexpected declines in our utilization and revenues.
We expect to continue to face such attempts. Although we seek to prevent, detect and investigate these network security incidents and have taken steps to mitigate the likelihood of network security breaches, there can be no assurance that attacks by unauthorized users will not be attempted in the future or that our security measures will be effective.
Although we seek to prevent, detect and investigate these network security incidents and have taken steps to mitigate the likelihood of network security breaches, cyber-based attacks and other cyber events are evolving, unpredictable and increasing in sophistication, including through the use of increasingly sophisticated and evolving AI technologies, and there can be no assurance that attacks by unauthorized users will not be attempted in the future or that our security measures will be effective.
Failure to comply with governmental, regulatory and legal requirements or with our company-wide Code of Ethics and Business Conduct, Anti-Corruption Policy, Policy on Inside Information and Insider Trading, and other policies could lead to governmental or legal proceedings that could expose us to significant liabilities and damage our reputation.
If we are not able to quickly adapt to or effectively manage our operations in the geographic markets in which we conduct business, our business prospects and results of operations could be negatively impacted. 19 Failure to comply with governmental, regulatory and legal requirements or with our company-wide Code of Ethics and Business Conduct, Anti-Corruption Policy, Policy on Inside Information and Insider Trading, and other policies could lead to governmental or legal proceedings that could expose us to significant liabilities and damage our reputation.
The threats from environmental events could adversely impact our ability to maintain business continuity, and could impair access to our leased office space in affected geographies and the integrity of our information technology systems.
Numerous countries have also begun proposing climate-reporting frameworks 20 aligned with the International Sustainability Standards Board standards. The threats from environmental events could adversely impact our ability to maintain business continuity, and could impair access to our leased office space in affected geographies and the integrity of our information technology systems.
The adoption of restraints on our ability to adopt or enforce employment provisions considered as a restraint on competition may increase turnover and compensation costs to hire and retain professionals, and may adversely impact our ability to hire, maintain and increase headcount, and our ability to service and keep our clients and secure engagements.
These restrictions on our ability to adopt or enforce non-competition and non-solicitation clauses may increase turnover and compensation costs to hire and retain professionals, and may adversely impact our ability to hire, maintain and increase headcount, and our ability to service and keep our clients and secure engagements.
Transactions may be postponed or canceled, litigation may be settled or dismissed, and disputes may be resolved, in each case with little or no prior notice to us.
Our engagements center on transactions, disputes, litigation and other event-driven occurrences that require independent analysis or expert services. Transactions may be postponed or canceled, litigation may be settled or dismissed, and disputes may be resolved, in each case with little or no prior notice to us.
If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our cash flows could be adversely affected.
Dollar borrowings at the Secured Overnight Financing Rate and, for borrowings in British Pound, the Sterling Overnight Index Average, which expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our cash flows could be adversely affected.
Further, compliance with the disparate climate-related frameworks, including requirements related to greenhouse gas emissions and climate change by federal, state, local and foreign legislatures and governmental agencies could cause us to incur operational and other costs to comply, and penalties if we fail to do so. 20 Increasing scrutiny and changing expectations from governmental organizations, investors, clients and our colleagues with respect to our social-related practices and those of our clients may impose additional costs on us or expose us to new or additional risks, including reputational harm.
Further, compliance with the disparate climate-related frameworks, including requirements related to greenhouse gas emissions and climate change by federal, state, local and foreign legislatures and governmental agencies could cause us to incur operational and other costs to comply, and penalties if we fail to do so.
This has occurred in the past, and we expect that it will continue to occur from time to time in the future. While our written employment agreements with our Senior Managing Directors and equivalent employees may include non-competition and non-solicitation clauses, such clauses may offer us only limited or no protections and may be unenforceable in one or more jurisdictions.
While our written employment agreements with our Senior Managing Directors and equivalent employees may include non-competition and non-solicitation clauses, such clauses may offer us only limited or no protections and may be unenforceable in one or more jurisdictions. Further, in certain jurisdictions, non-competition clauses have been abolished or banned.
However, changes in state laws and rules and new court decisions can raise questions about the enforceability of contractual restrictions that, when originally agreed, appeared to be enforceable. In the case of employees outside the U.S., we draft non-competition provisions in an effort to comply with applicable foreign law.
When inclusion of a non-competition clause is appropriate, we have generally drafted the restrictions to seek to comply with applicable state law, including “reasonableness” standards regarding scope and duration. However, changes in state laws and rules and new court decisions can raise questions about the enforceability of contractual restrictions that, when originally agreed, appeared to be enforceable.
Our Credit Facility is guaranteed by substantially all of our wholly-owned domestic subsidiaries and will be required to be guaranteed by future wholly-owned domestic subsidiaries, including those that join us in connection with acquisitions.
Furthermore, if any rating agency changes our credit rating or outlook, our debt and equity securities could be negatively affected, which could adversely affect our financial condition and financial results. 27 Our Credit Facility is guaranteed by substantially all of our wholly-owned domestic subsidiaries and will be required to be guaranteed by future wholly-owned domestic subsidiaries, including those that join us in connection with acquisitions.
These situations have increased, and we expect that they will continue into the future to increase, our costs to retain other professionals at the Company and impact our ability to retain existing clients and win new engagements. 22 We rely heavily on our executive officers and the heads of our segments and industry and regional leaders for the success of our business, the loss of whom may negatively impact our business and operations.
Such professionals will often pursue other business and professional opportunities and may compete with the Company for clients and/or employees. These situations have increased, and we expect that they will continue into the future to increase, our costs to retain other professionals at the Company and impact our ability to retain existing clients and win new engagements.
We rely heavily on our executive officers and our segment, industry and regional leaders to manage our operations.
We rely heavily on our executive officers and the heads of our segments and industry and regional leaders for the success of our business, the loss of whom may negatively impact our business and operations. We rely heavily on our executive officers and our segment, industry and regional leaders to manage our operations.
In addition, our mix of practice offerings adds complexity to the task of predicting revenues and results of operations and managing our staffing levels and expenditures across changing business cycles and economic environments. Our results are subject to seasonal and similar factors, such as during the fourth quarter when our professionals and our clients typically take vacations.
In addition, our mix of practice offerings adds complexity to the task of predicting revenues and results of operations and managing our staffing levels and expenditures across changing business cycles and economic environments. We derive a portion of our revenues from large engagements.
Risks Related to Our People Our failure to recruit and retain qualified professionals and manage headcount needs and utilization could negatively affect our financial results and our ability to staff client engagements, maintain relationships with clients and drive future growth. We deliver sophisticated professional services to our clients.
The available legal remedies for the use or misuse of social media may not adequately compensate us for the damages caused by such use or misuse and consequences arising from such actions. 21 Risks Related to Our People Our failure to recruit and retain qualified professionals and manage headcount needs and utilization could negatively affect our financial results and our ability to staff client engagements, maintain relationships with clients and drive future growth.
If interest rates or other factors existing at the time of refinancing result in higher interest rates upon refinancing, we will incur higher interest expense. Furthermore, if any rating agency changes our credit rating or outlook, our debt and equity securities could be negatively affected, which could adversely affect our financial condition and financial results.
If interest rates or other factors existing at the time of refinancing result in higher interest rates upon refinancing, we will incur higher interest expense.
Borrowings under our Credit Facility will be at variable rates of interest, including for U.S. Dollar borrowings at the Secured Overnight Financing Rate (“SOFR”) and, for borrowings in British Pound, the Sterling Overnight Index Average (“SONIA”), which expose us to interest rate risk.
Our variable rate indebtedness will subject us to interest rate risk, which could cause our annual debt service obligations to increase significantly. Borrowings under our Credit Facility will be at variable rates of interest, including for U.S.
In January 2023, the EU enacted the Corporate Sustainability Reporting Directive, which will require sustainability reporting across a broad range of topics for both EU and non-EU companies. Numerous countries have also begun proposing climate-reporting frameworks aligned with the International Sustainability Standards Board standards.
In October 2023, California enacted legislation addressing the disclosure of greenhouse gas emissions, climate-related risks, environmental claims, and the use or sale of voluntary carbon offsets. In January 2023, the EU enacted the Corporate Sustainability Reporting Directive, which will require sustainability reporting across a broad range of topics for both EU and non-EU companies.
Accordingly, there may be times we may decide not to pursue legal action, even if it is available. Starting January 1, 2024, California adopted legislation that expanded that state’s existing restrictions on non-competes to agreements created out-of-state and created new enforcement rights for employees to challenge such clauses.
Accordingly, there may be times we may decide not to pursue legal action, even if it is available. If we do decide to pursue legal action, we will incur additional costs as a result of such action.
Removed
Economic Consulting — Fewer, smaller and less complex M&A activity; less capital markets activity or fewer complex transactions; a reduced number of regulatory filings and less litigation, reduced or less aggressive antitrust and competition regulation or enforcement; fewer government investigations and proceedings; and the timing of client utilization of our services.
Added
Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future.
Removed
If we are not able to quickly adapt to or effectively manage our operations in the geographic markets in which we conduct business, our business prospects and results of operations could be negatively impacted.
Added
The loss of a large client or the completion of a major engagement can impact our business, financial condition, and results of operations if we do not obtain a sufficient number of new large engagements to replace lost clients or completed engagements.
Removed
On October 8, 2021, the Organization for Economic Co-operation and Development (“OECD”) announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting which agreed to a two-pillar solution to address the tax challenges arising from the digitalization of the economy.
Added
Our results are also subject to seasonal and similar factors, such as during the fourth quarter when our professionals and our clients typically take vacations.
Removed
On December 20, 2021, the OECD released the Global Anti-Base Erosion (“GLoBE”) Model Rules introducing a global minimum corporate tax rate of 15% to apply to certain multinational enterprises. The OECD continues to release additional guidance on these rules.
Added
We expect to continue to face such attempts.
Removed
Many countries have or are in the process of enacting legislation intended to implement the OECD GLoBE Model Rules effective starting on January 1, 2024. The impact on the Company will depend on the exact nature of each country's GLoBE legislation, guidance and regulations thereon and their application by tax authorities.
Added
We may be required to recognize goodwill impairment charges, which could materially affect our financial results. We assess our goodwill and related intangible assets as required by Generally Accepted Accounting Principles in the U.S. to determine whether they are impaired and, if they are, to record appropriate impairment charges.
Removed
In October 2023, California enacted legislation addressing the disclosure of greenhouse gas emissions, climate-related risks, environmental claims, and the use or sale of voluntary carbon offsets. The SEC has proposed a mandatory climate change reporting framework that, if implemented, is likely to materially increase the amount of time, monitoring, diligence and reporting costs related to these matters.
Added
Factors we consider include significant underperformance relative to expected historical or projected future operating results and significant negative industry or economic trends. We have previously recorded impairment charges to the carrying value of goodwill of certain segments and it is possible that we may be required to record significant impairment charges in the future.
Removed
International efforts continue toward the adoption of international treaties or protocols that would address global climate change issues, including plans developed in connection with the Paris climate conference in December 2015, the Katowice climate conference in December 2018 and the UN Climate Change Conferences since 2021.
Added
Increasing scrutiny and changing expectations from governmental organizations, investors, clients and our colleagues with respect to our social-related practices and those of our clients may impose additional costs on us or expose us to new or additional risks, including reputational harm.
Removed
The available legal remedies for the use or misuse of social media may not adequately compensate us for the damages caused by such use or misuse and consequences arising from such actions.
Added
This has occurred in the past, and we expect that it will continue to occur from time to time in the future. We may not have, or may choose not to pursue, legal recourse against professionals that leave our Company to join competitors or clients.
Removed
Such professionals will often pursue other business and professional opportunities and may compete with the Company for clients and/or employees.
Removed
In certain jurisdictions, non-competition clauses have been abolished or banned. When inclusion of a non-competition clause is appropriate, we have generally drafted the restrictions to seek to comply with applicable state law, including “reasonableness” standards regarding scope and duration.
Removed
Other states, such as New York, are considering or have adopted similar legislation restricting the scope or enforceability of contractual non-competition provisions. There has been some discussion that non-competition clauses should be banned on a federal level. In January 2023, the Federal Trade Commission proposed a new rule that would ban employers from imposing non-competition agreements on workers.
Removed
As a global multicultural company our talent and retention initiatives are designed to provide opportunities across genders, races, nationalities and sexual orientations.
Removed
Our clients may terminate our engagements with little or no notice and without penalty, which may result in unexpected declines in our utilization and revenues. Our engagements center on transactions, disputes, litigation and other event-driven occurrences that require independent analysis or expert services.
Removed
SOFR and SONIA are available replacements for the London Interbank Offered Rate (“LIBOR”), which the U.K.’s Financial Conduct Authority is phasing out as a benchmark. The change from LIBOR to SOFR and SONIA could expose our borrowings to less favorable rates.
Removed
If the change to SOFR and SONIA results in increased interest rates or if our lenders have increased costs due to the change, then the Company's debt that uses benchmark rates could be affected and, in turn, the Company's cash flows and interest expense could be adversely impacted.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also provide regular reminders to employees regarding suspicious emails or other communications and conduct periodic phishing simulations and remedial spot testing and training to reinforce recognition and response techniques. In 2023, we conducted a tabletop training with an executive officer and an outside director simulating cybersecurity events and appropriate responses.
Biggest changeWe also provide regular reminders to employees regarding suspicious emails or other communications and conduct periodic phishing simulations and remedial spot testing and training to reinforce recognition and response techniques. In 2024, we conducted two tabletop exercises, simulating cybersecurity events and appropriate responses, with the senior leadership team of FTI including an executive officer and an outside director.
Governance Management and Board of Directors’ Role The Audit Committee meets regularly with management to manage and assess risk exposures and potential damages related to information security, cybersecurity, and data protection and the steps management has taken to identify, monitor, and control such exposures, as well as associated mitigation and remediation action, and actions to continue our operations.
Governance Management and Board of Directors’ Role The Audit Committee meets regularly with management to help manage and assess risk exposures and potential damages related to information security, cybersecurity, and data protection and the steps management has taken to help identify, monitor, and control such exposures, as well as associated mitigation and remediation action, and actions to continue our operations.
Approach and Integration Cybersecurity risk is integrated and managed as part of our broader enterprise risk management program under the direction of our Vice President – Chief Risk and Compliance Officer – who works closely with our Chief Information Officer and others, including the Head of our Cybersecurity & Privacy division to identify, review, assess and address cybersecurity and other security risks.
Approach and Integration Cybersecurity risk is integrated and managed as part of our broader enterprise risk management program under the direction of our Vice President – Chief Risk and Compliance Officer – who works closely with our Chief Information Officer and others, including the Head of our Cybersecurity & Privacy division to help identify, review, assess and address cybersecurity and other security risks.
To educate our management, employees, and consultants, and mitigate the risk of human failure in exposing our Information Technology systems to cybersecurity threats from bad actors; management, employees, and consultants are required to complete on-line cybersecurity training annually.
To educate our management, employees, and consultants, and help mitigate the risk of human failure in exposing our Information Technology systems to cybersecurity threats from bad actors; management, employees, and consultants are required to complete on-line cybersecurity training annually.
The existence of this team within FTI serves to aid in our ability to have current incident and threat intelligence that we can use to bolster our own security posture and defenses. Our cybersecurity 29 practice also provides us with supplemental incident response investigation services in partnership with independent, external consultants, as needed and as appropriate.
The existence of this team within FTI aids in our ability to have current incident and threat intelligence that we can use to bolster our own security posture and defenses. Our cybersecurity practice also 29 provides us with supplemental incident response investigation services in partnership with independent, external consultants, as needed and as appropriate.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We operate our segments and their practices through FTI Consulting and its subsidiaries in 31 countries with different business, client, and geographic cybersecurity risk profiles.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We operate our segments and their practices through FTI Consulting and its subsidiaries in 34 countries with different business, client, and geographic cybersecurity risk profiles.
When our Procurement group processes a vendor relationship involving information systems, various groups will review the vendor and its systems for 28 potential data security-related issues and risks associated with using the tools, technology, data processing and other services of such vendor. Our contracts include terms addressing the safeguarding of our data.
When our Procurement group processes a vendor relationship involving information systems, various groups will review the vendor and its systems for 28 potential data security-related issues and risks associated with using the tools, technology, data processing and other services of such vendor. Our contracts include terms that help address the safeguarding of our data.
We intend to continue to conduct such simulation training with this group on a periodic basis. Other directors and officers of the Company will be given the opportunity to participate in such training. In addition, our outside directors are encouraged to attend continuing education relating to cybersecurity. In 2023, two directors received certificates in cybersecurity oversight or emerging technologies.
We intend to continue to conduct such simulation training with this group on a periodic basis. Other directors and officers of the Company have been and will continue to be given the opportunity to participate in such training. In addition, our outside directors are encouraged to attend continuing education relating to cybersecurity.
As of December 31, 2023, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, including our business strategy, results of operations, or financial condition, or that we believe are reasonably likely to have such an effect over the long term.
Since the beginning of the last fiscal year, we have not identified risks from known cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, including our business strategy, results of operations, or financial condition, or that we believe are reasonably likely to have such an effect over the long term.
Our Information Technology Group (“ITG”) closely monitors and analyzes cybersecurity incidents and risks and our progress mitigating and resolving such threats. This information is regularly discussed with our outside directors and executive management and other interested parties.
Our Information Technology Group (“ITG”) helps monitor and analyze cybersecurity incidents and risks and our progress mitigating and resolving such threats. This information is regularly discussed with our outside directors and executive management.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeWe also lease offices to support our operations in 32 other cities across the U.S., including New York, Chicago, Denver, Houston, Dallas, Los Angeles and San Francisco, and we lease office space to support our international locations in 30 countries and territories — the U.K., Ireland, Finland, France, Germany, Spain, Belgium, Switzerland, Denmark, Italy, Netherlands, Australia, Malaysia, China (including Hong Kong), Japan, Singapore, the United Arab Emirates, South Korea, South Africa, Argentina, Brazil, Colombia, Mexico, Canada, Indonesia, India, Qatar, Saudi Arabia, the Cayman Islands and the Virgin Islands (British).
Biggest changeWe also lease offices to support our operations in 30 other cities across the U.S., including New York, Chicago, Denver, Houston, Dallas, Los Angeles and San Francisco, and we lease office space to support our international locations in 33 countries and territories — the UK, Ireland, Finland, France, Germany, Spain, Belgium, Switzerland, Denmark, Italy, Netherlands, Portugal, Sweden, Australia, Malaysia, China (including Hong Kong), Japan, Singapore, the United Arab Emirates, Lebanon, South Korea, South Africa, Argentina, Brazil, Colombia, Mexico, Canada, Indonesia, India, Qatar, Saudi Arabia, the Cayman Islands and the Virgin Islands (British).

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+3 added−3 removed0 unchanged
Biggest changeThe shares were issued pursuant to the exemption from registration under Section 3(a)(9) of the Securities Act. 31 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information with respect to purchases we made of our common stock during the fourth quarter of 2023: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (1) Approximate Dollar Value That May Yet Be Purchased Under the Program (in thousands, except per share data) October 1 through October 31, 2023 1 (2) $ 186.35 — $ 460,653 November 1 through November 30, 2023 — $ — — $ 460,653 December 1 through December 31, 2023 5 (3) $ 206.18 — $ 460,653 Total 6 — (1) On June 2, 2016, our Board of Directors authorized a stock repurchase program of up to $100.0 million (the “Repurchase Program”).
Biggest changeSales of Unregistered Securities None. 31 Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table provides information with respect to purchases we made of our common stock during the fourth quarter of 2024: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (in thousands, except per share data) October 1 through October 31, 2024 4 (2) $ 223.59 — $ 460,653 November 1 through November 30, 2024 45 (3) $ 197.69 42 (5) $ 452,481 December 1 through December 31, 2024 14 (4) $ 197.89 10 (6) $ 450,436 Total 63 52 (1) On June 2, 2016, our Board of Directors authorized a stock repurchase program (the “Repurchase Program”), which was most recently increased by $400.0 million to an aggregate authorization of $1.3 billion on December 1, 2022.
(3) Includes 875,277 shares of common stock available for issuance under our 2017 Omnibus Incentive Compensation Plan, all of which are available for stock-based awards.
(2) Includes 644,842 shares of common stock available for issuance under our 2017 Omnibus Incentive Compensation Plan, all of which are available for stock-based awards.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Our common stock currently trades on the New York Stock Exchange (the “NYSE”) under the symbol FCN. As of January 31, 2024, the number of holders of record of our common stock was 273.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Our common stock currently trades on the New York Stock Exchange (the “NYSE”) under the symbol FCN.
Securities Authorized for Issuance under Equity Compensation Plans The following table includes the number of shares of common stock of the Company authorized or to be issued upon exercise of outstanding options, warrants and rights awarded under our employee equity compensation plans as of December 31, 2023: (a) (b) (c) Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) Plan Category (in thousands, except per share data) Equity compensation plans approved by our security holders 300 (1) $ 37.29 875 (3) Equity compensation plans not approved by our security holders 53 (2) $ 36.75 — Total 353 $ 37.21 875 (1) Includes up to (i) 1,243 shares of common stock issuable upon exercise of fully vested stock options granted under our 2006 Global Long-Term Incentive Plan (as Amended and Restated Effective as of May 14, 2008) and (ii) 299,121 shares of common stock issuable upon exercise of fully vested stock options granted under our 2009 Omnibus Incentive Compensation Plan (as Amended and Restated Effective as of June 3, 2015).
Securities Authorized for Issuance under Equity Compensation Plans The following table includes the number of shares of common stock of the Company authorized or to be issued upon exercise of outstanding options, warrants and rights awarded under our employee equity compensation plans as of December 31, 2024: (a) (b) (c) Number of Securities to Be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) Plan Category (in thousands, except per share data) Equity compensation plans approved by our security holders 60 (1) $ 37.93 643 (2) Total 60 $ 37.93 643 (1) Includes up to 60,063 shares of common stock issuable upon exercise of fully vested stock options granted under our 2009 Omnibus Incentive Compensation Plan (as Amended and Restated Effective as of June 3, 2015).
(3) Includes 5,250 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock. ITEM 6. [RESERVED] 32
(3) Includes 3,464 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock. (4) Includes 3,710 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.
On December 1, 2022, our Board of Directors authorized an additional $400.0 million, increasing the Repurchase Program to an aggregate authorization of $1.3 billion. No time limit has been established for the completion of the Repurchase Program, and the Repurchase Program may be suspended, discontinued or replaced by the Board of Directors at any time without prior notice.
No time limit has been established for the completion of the Repurchase Program, and the Repurchase Program may be suspended, discontinued or replaced by the Board of Directors at any time without prior notice.
There were no repurchases of shares of our common stock pursuant to the Repurchase Program during the quarter ended December 31, 2023. (2) Includes 429 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.
During the quarter ended December 31, 2024, we repurchased an aggregate of 51,717 shares of our common stock under the Repurchase Program at an average price of $197.53 per share for a total cost of approximately $10.2 million. (2) Includes 4,460 shares of common stock withheld to cover payroll tax withholdings related to the lapse of restrictions on restricted stock.
Removed
(2) Includes up to 53,552 shares of common stock issuable upon exercise of fully vested stock options granted as employment inducement on July 30, 2014 to an executive officer hire pursuant to Rule 303.08 of the NYSE.
Added
As of January 31, 2025, the number of holders of record of our common stock was 297, which does not include a substantially greater number of beneficial holders whose shares are held by banks, brokers and other financial institutions.
Removed
Sales of Unregistered Securities On August 17, 2023, we issued a total of 1,460,740 shares of our common stock to holders in connection with the conversion of their 2.0% convertible senior notes due 2023 (“2023 Convertible Notes”) at maturity, which represents the excess of the conversion value over the principal amount of $280.3 million.
Added
(5) During the month ended November 30, 2024, we repurchased and retired 41,417 shares of common stock, at an average price per share of $197.29, for an aggregate cost of $8.2 million.
Removed
On each of May 18, 2017, December 1, 2017, February 21, 2019 and February 20, 2020, our Board of Directors authorized an additional $100.0 million. On each of July 28, 2020 and December 3, 2020, our Board of Directors authorized an additional $200.0 million.
Added
(6) During the month ended December 31, 2024, we repurchased and retired 10,300 shares of common stock, at an average price per share of $198.50, for an aggregate cost of $2.0 million. ITEM 6. RESERVED 32

Item 7. Management's Discussion & Analysis

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

86 edited+18 added−20 removed48 unchanged
Biggest changeBillable Headcount Corporate Finance (1) FLC (1) Economic Consulting Technology Strategic Communications Total Non-Billable Headcount Total Headcount December 31, 2022 2,100 1,430 1,007 556 970 6,063 1,572 7,635 Additions, net 115 17 82 72 1 287 68 355 December 31, 2023 2,215 1,447 1,089 628 971 6,350 1,640 7,990 Percentage change in headcount from December 31, 2022 5.5% 1.2% 8.1% 12.9% 0.1% 4.7% 4.3% 4.6% (1) Effective July 1, 2023, prior period segment information for the Corporate Finance and FLC segments has been recast in this Annual Report to include the reclassification of the portion of the Company’s health solutions practice in the FLC segment to our realigned business transformation practice within our Corporate Finance segment. 37 RESULTS OF OPERATIONS Segment and Consolidated Operating Results: Year Ended December 31, 2023 2022 (in thousands, except per share data) Revenues Corporate Finance (1) $ 1,346,678 $ 1,147,118 FLC (1) 654,105 579,933 Economic Consulting 771,374 695,208 Technology 387,855 319,983 Strategic Communications 329,230 286,666 Total revenues $ 3,489,242 $ 3,028,908 Segment operating income Corporate Finance (1) $ 216,504 $ 197,424 FLC (1) 81,296 52,693 Economic Consulting 109,818 98,178 Technology 48,196 33,431 Strategic Communications 47,167 46,982 Total segment operating income 502,981 428,708 Unallocated corporate expenses (125,420) (124,830) Operating income 377,561 303,878 Other income (expense) Interest income and other (4,867) 3,918 Interest expense (14,331) (10,047) (19,198) (6,129) Income before income tax provision 358,363 297,749 Income tax provision 83,471 62,235 Net income $ 274,892 $ 235,514 Earnings per common share — basic $ 8.10 $ 6.99 Earnings per common share — diluted $ 7.71 $ 6.58 (1) Effective July 1, 2023, prior period segment information for the Corporate Finance and FLC segments has been recast in this Annual Report to include the reclassification of the portion of the Company’s health solutions practice in the FLC segment to our realigned business transformation practice within our Corporate Finance segment. 38 Reconciliation of Net Income to Adjusted EBITDA: Year Ended December 31, 2023 2022 (in thousands) Net income $ 274,892 $ 235,514 Add back: Income tax provision 83,471 62,235 Interest income and other 4,867 (3,918) Interest expense 14,331 10,047 Depreciation and amortization 41,079 35,697 Amortization of intangible assets 6,159 9,643 Special charges — 8,340 Adjusted EBITDA $ 424,799 $ 357,558 Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS: Year Ended December 31, 2023 2022 (in thousands, except per share data) Net income $ 274,892 $ 235,514 Add back: Special charges — 8,340 Tax impact of special charges — (1,584) Adjusted Net Income $ 274,892 $ 242,270 Earnings per common share — diluted $ 7.71 $ 6.58 Add back: Special charges — 0.23 Tax impact of special charges — (0.04) Adjusted earnings per common share — diluted $ 7.71 $ 6.77 Weighted average number of common shares outstanding — diluted 35,646 35,783 Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow: Year Ended December 31, 2023 2022 (in thousands) Net cash provided by operating activities $ 224,461 $ 188,794 Purchases of property and equipment (49,562) (53,098) Free Cash Flow $ 174,899 $ 135,696 Year Ended December 31, 2023 Compared with December 31, 2022 Revenues and operating income See “Segment Results” for an expanded discussion of revenues, gross profit and SG&A expenses.
Biggest changeThe net additions include targeted reductions in areas of each segment described in the “Special Charges” section above: Billable Headcount Corporate Finance FLC Economic Consulting Technology Strategic Communications Total Non-Billable Headcount Total Headcount December 31, 2023 2,215 1,447 1,089 628 971 6,350 1,640 7,990 Additions, net 71 95 21 86 10 283 101 384 December 31, 2024 2,286 1,542 1,110 714 981 6,633 1,741 8,374 Percentage change in headcount from December 31, 2023 3.2% 6.6% 1.9% 13.7% 1.0% 4.5% 6.2% 4.8% 37 RESULTS OF OPERATIONS Segment and Consolidated Operating Results: Year Ended December 31, 2024 2023 (in thousands, except per share data) Revenues Corporate Finance $ 1,391,206 $ 1,346,678 FLC 690,211 654,105 Economic Consulting 863,557 771,374 Technology 417,637 387,855 Strategic Communications 336,041 329,230 Total revenues $ 3,698,652 $ 3,489,242 Segment operating income Corporate Finance $ 225,711 $ 216,504 FLC 77,490 81,296 Economic Consulting 104,090 109,818 Technology 41,875 48,196 Strategic Communications 45,790 47,167 Total segment operating income 494,956 502,981 Unallocated corporate expenses (147,594) (125,420) Operating income 347,362 377,561 Other income (expense) Interest income and other 10,360 (4,867) Interest expense (6,951) (14,331) 3,409 (19,198) Income before income tax provision 350,771 358,363 Income tax provision 70,683 83,471 Net income $ 280,088 $ 274,892 Earnings per common share — basic $ 7.96 $ 8.10 Earnings per common share — diluted $ 7.81 $ 7.71 Reconciliation of Net Income to Adjusted EBITDA: Year Ended December 31, 2024 2023 (in thousands) Net income $ 280,088 $ 274,892 Add back: Income tax provision 70,683 83,471 Interest income and other (10,360) 4,867 Interest expense 6,951 14,331 Depreciation of property and equipment 43,910 41,079 Amortization of intangible assets 4,183 6,159 Special charges 8,230 — Adjusted EBITDA $ 403,685 $ 424,799 38 Reconciliation of Net Income and EPS to Adjusted Net Income and Adjusted EPS: Year Ended December 31, 2024 2023 (in thousands, except per share data) Net income $ 280,088 $ 274,892 Add back: Special charges 8,230 — Tax impact of special charges (1,857) — Adjusted Net Income $ 286,461 $ 274,892 Earnings per common share — diluted $ 7.81 $ 7.71 Add back: Special charges 0.23 — Tax impact of special charges (0.05) — Adjusted earnings per common share — diluted $ 7.99 $ 7.71 Weighted average number of common shares outstanding — diluted 35,845 35,646 Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow: Year Ended December 31, 2024 2023 (in thousands) Net cash provided by operating activities $ 395,097 $ 224,461 Purchases of property and equipment (34,900) (49,562) Free Cash Flow $ 360,197 $ 174,899 Year Ended December 31, 2024 Compared to December 31, 2023 Revenues and operating income See “Segment Results” for an expanded discussion of revenues, gross profit and SG&A expenses.
We report financial results for the following five reportable segments: Our Corporate Finance & Restructuring (“Corporate Finance”) segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, governments and other financing sources and creditor groups, as well as other parties-in-interest.
We report financial results for the following five reportable segments: Our Corporate Finance & Restructuring (“Corporate Finance”) segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, and other financing sources and creditor groups, as well as other parties-in-interest and governments.
Our Forensic and Litigation Consulting (“FLC”) segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services across risk and investigations and disputes, supported by our data & analytics technology-enabled solutions, with a focus on highly regulated industries.
Our Forensic and Litigation Consulting (“FLC”) segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services across risk & investigations and disputes, supported by our data & analytics technology-enabled solutions, with a focus on highly regulated industries.
We deliver a wide range of expert and analytics-powered solutions driven by investigations, litigation, antitrust and competition, M&A, restructuring and compliance and risk through three core offerings: Corporate Legal Department Consulting, E-discovery Services and Expertise, and Information Governance, Privacy & Security Services.
We deliver a wide range of expert and analytics-powered solutions driven by investigations, litigation, antitrust and competition, M&A, restructuring and compliance and risk through three core offerings: Corporate Legal Department Consulting, E-discovery and Analytics Services and Expertise, and Information Governance, Privacy & Security Services.
The second amended and restated credit agreement entered into on November 21, 2022 (the “Credit Agreement”) governing the Credit Facility and our other indebtedness outstanding from time to time contains covenants that, among other things, may limit our ability to: incur additional indebtedness; create liens; pay dividends on our capital stock, make distributions or repurchases of our capital stock or make specified other restricted payments; consolidate, merge or sell all or substantially all of our assets; guarantee obligations of other entities or our foreign subsidiaries; enter into hedging agreements; enter into transactions with affiliates or related persons; or engage in any business other than consulting-related businesses.
The second amended and restated credit agreement entered into on November 21, 2022 (the “Credit Agreement”) governing the Credit Facility and our other indebtedness outstanding from time to time contains covenants that, among other things, may limit our ability to: incur additional indebtedness; create liens; pay dividends on our capital stock, make distributions or repurchases of our capital stock or make specified other restricted payments; consolidate, merge or sell all or substantially all of our assets; guarantee obligations of other entities or our foreign subsidiaries; enter into hedging agreements; 48 enter into transactions with affiliates or related persons; or engage in any business other than consulting-related businesses.
In performance-based or contingent arrangements, fees are based on contractually defined objectives, such as completing a business transaction or assisting the client in achieving a specific business objective. Variable consideration to be included in the transaction price is estimated using the expected value method or the most likely amount method based on facts and circumstances.
In performance-based or contingent arrangements, fees are based on contractually defined objectives, such as completing a business transaction or assisting the client in achieving a specific business objective. Variable consideration to be included in the transaction price is typically estimated using the expected value method or the most likely amount method based on facts and circumstances.
Fixed-fee arrangements may require certain clients to pay us a recurring retainer. Our contract arrangements may also contain success fees or performance-based arrangements in which our fees are based on the attainment of contractually defined objectives with our client. This type of success fee may supplement a time and expense or fixed-fee arrangement.
Fixed-fee arrangements may require certain clients to pay us a recurring retainer. 33 Our contract arrangements may also contain success fees or performance-based arrangements in which our fees are based on the attainment of contractually defined objectives with our client. This type of success fee may supplement a time and expense or fixed-fee arrangement.
We deliver a wide range of services centered around three core offerings: Antitrust & Competition Economics, Financial Economics and International Arbitration. Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk management consulting services.
We deliver a wide range of services centered around three core offerings: Antitrust & Competition Economics, Financial Economics and International Arbitration. Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk management consulting and data services.
Factors we consider when making the determination include assessing macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant reporting unit specific events; • Decide whether to bypass the qualitative assessment and perform a quantitative assessment.
Factors we consider when making the determination include assessing macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, and other relevant reporting unit specific events; 50 • Decide whether to bypass the qualitative assessment and perform a quantitative assessment.
The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events such as economic and workforce disruptions arise, including any future impact of future public health crises, or economic or business conditions change from those currently prevailing or from those now anticipated, or if unexpected circumstances or other events beyond our control arise that may have a material effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or those of our clients, and the operating performance or financial results of our business.
The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events such as economic, political and workforce disruptions arise, including any impact of future public health crises, or economic, political or business conditions change from those currently prevailing or from those now anticipated, or if unexpected circumstances or other events beyond our control arise that may have a material adverse effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or those of our clients, and the operating performance or financial results of our business.
We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash.
We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects core operating performance and provides an indicator of the segment’s ability to generate cash.
If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset group, we estimate the fair value of the asset group to determine whether an impairment loss should be recognized. No impairment charges for intangible assets were recorded in 2023.
If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset group, we estimate the fair value of the asset group to determine whether an impairment loss should be recognized. No impairment charges for intangible assets were recorded in 2024.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of our consolidated financial condition, results of operations and liquidity and capital resources for each of the two years in the period ended December 31, 2023 and significant factors that could affect our prospective financial condition and results of operations.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of our consolidated financial condition, results of operations and liquidity and capital resources for each of the two years in the period ended December 31, 2024 and significant factors that could affect our prospective financial condition and results of operations.
(3) We calculate the utilization rate for our billable professionals by dividing the number of hours that all of our billable professionals worked on client assignments during a period by the total available working hours for all of our billable professionals during the same period.
(2) We calculate the utilization rate for our billable professionals by dividing the number of hours that all of our billable professionals worked on client assignments during a period by the total available working hours for all of our billable professionals during the same period.
For a similar discussion and analysis of our results for the year ended December 31, 2022 compared with our results for the year ended December 31, 2021, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report for the year ended December 31, 2022, filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on February 23, 2023.
For a similar discussion and analysis of our results for the year ended December 31, 2023 compared to our results for the year ended December 31, 2022, refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report for the year ended December 31, 2023, filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on February 22, 2024.
We define Segment Operating Income as a segment’s share of consolidated operating income. We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA.
We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA, which is a non-GAAP financial measure.
Principal Uses of Capital Resources Future Capital Requirements We anticipate that our future capital requirements will principally consist of funds required for: • operating and general corporate expenses relating to the operation of our businesses; • capital expenditures, primarily for information technology equipment and information or financial systems, office furniture and leasehold improvements; • debt service requirements, including interest payments on our long-term debt; • compensation to designated executive management and senior managing directors under our various long-term incentive compensation programs; • discretionary funding of the Repurchase Program; • contingent obligations related to our acquisitions; • potential acquisitions of businesses; and • other known future contractual obligations.
Principal Uses of Capital Resources Future Capital Requirements We anticipate that our future capital requirements will principally consist of funds required for: • operating and general corporate expenses; • capital expenditures, primarily for information technology equipment and systems, office furniture and leasehold improvements; • debt service requirements, including interest payments; • compensation to designated executive management and senior managing directors under our various long-term incentive compensation programs, including forgivable loans; • discretionary funding of the Repurchase Program; • contingent obligations related to our acquisitions; • potential acquisitions of businesses; and • other known future contractual obligations.
Success fee revenues may cause variations in our revenues and operating results due to the timing of when achieving the performance-based criteria becomes probable. Seasonal factors, such as the timing of our employees’ and clients’ vacations and holidays, may impact the timing of our revenues across our segments.
Success fees and other contractual terms may cause variations in our revenues and operating results due to the timing of when achieving the performance-based criteria becomes probable. Seasonal factors, such as the timing of our employees’ and clients’ vacations and holidays, may impact the timing of our revenues across our segments.
Future Contractual Obligations We have no future contractual obligations as of December 31, 2023 related to outstanding borrowings under our Credit Facility. For more information on our Credit Facility, refer to Note 14, “Debt” in Part II, Item 8.
Future Contractual Obligations We have no future contractual obligations as of December 31, 2024 related to outstanding borrowings under our Credit Facility. For more information on our Credit Facility, refer to Note 14, “Debt” in Part II, Item 8 of this Annual Report.
We deliver a wide range of services centered around four core offerings: Business Transformation, Strategy, Transactions and Turnaround & Restructuring.
We deliver a wide range of services centered around three core offerings: Transactions, Transformation & Strategy and Turnaround & Restructuring.
Specifically, we have referred to the following non-GAAP financial measures: • Total Segment Operating Income • Adjusted EBITDA • Total Adjusted Segment EBITDA • Adjusted EBITDA Margin • Adjusted Net Income 34 • Adjusted Earnings per Diluted Share • Free Cash Flow We have included the definitions of Segment Operating Income and Adjusted Segment EBITDA, which are GAAP financial measures, below in order to more fully define the components of certain non-GAAP financial measures in the accompanying analysis of financial information.
Specifically, we have referred to the following non-GAAP financial measures: • Total Segment Operating Income • Adjusted Segment EBITDA • Total Adjusted Segment EBITDA • Adjusted EBITDA • Adjusted EBITDA Margin • Adjusted Net Income • Adjusted Earnings per Diluted Share • Free Cash Flow We have included the definition of Segment Operating Income, which is a GAAP financial measure, below in order to more fully define the components of certain non-GAAP financial measures in the accompanying analysis of financial information. 34 We define Segment Operating Income as a segment’s share of consolidated operating income.
See information under the heading “Risk Factors” in Part I, Item 1A of this Annual Report. 47 Cash Flows Year Ended December 31, 2023 2022 Cash Flows (dollars in thousands) Net cash provided by operating activities $ 224,461 $ 188,794 Net cash used in investing activities $ (73,835) $ (60,061) Net cash used in financing activities $ (354,663) $ (106,012) Effect of exchange rate changes on cash and cash equivalents $ 15,571 $ (25,518) DSO (1) 100 97 (1) DSO is a performance measure used to assess how quickly revenues are collected by the Company.
See information under the heading “Risk Factors” in Part I, Item 1A of this Annual Report. 47 Cash Flows Year Ended December 31, 2024 2023 Cash Flows (dollars in thousands) Net cash provided by operating activities $ 395,097 $ 224,461 Net cash used in investing activities $ (10,162) $ (73,835) Net cash used in financing activities $ (15,383) $ (354,663) Effect of exchange rate changes on cash and cash equivalents $ (12,281) $ 15,571 DSO (1) 97 100 (1) DSO is a performance measure used to assess how quickly revenues are collected by the Company.
SEGMENT RESULTS Total Adjusted Segment EBITDA We evaluate the performance of each of our operating segments based on Adjusted Segment EBITDA, which is a GAAP financial measure.
SEGMENT RESULTS Adjusted Segment EBITDA We evaluate the performance of each of our operating segments based on multiple measures of segment profit, including Adjusted Segment EBITDA, which is a non-GAAP financial measure.
In 48 addition, the Credit Agreement includes a financial covenant that requires us not to exceed a maximum consolidated total net leverage ratio (the ratio of funded debt (less unrestricted cash up to $300.0 million) to Consolidated EBITDA, as defined in the Credit Agreement).
In addition, the Credit Agreement includes a financial covenant that requires us not to exceed a maximum consolidated total net leverage ratio (the ratio of funded debt (less unrestricted cash up to $300.0 million) to Consolidated EBITDA, as defined in the Credit Agreement). As of December 31, 2024, we were in compliance with the covenants contained in the Credit Agreement.
We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company’s ability to generate cash for ongoing business operations and other capital deployment.
We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with useful supplemental information on the Company’s ability to generate cash for ongoing business operations and capital deployment.
Refer to Note 1, “Description of Business and Summary of Significant Accounting Policies” in our consolidated financial statements for further information on our significant accounting policies. 49 We evaluate our estimates, including those related to revenues, goodwill and intangible assets, income taxes and contingencies, on an ongoing basis.
Refer to Note 1, “Description of Business and Summary of Significant Accounting Policies” in Part II, Item 8 of this Annual Report for further information on our significant accounting policies. We evaluate our estimates, including those related to revenues, goodwill and intangible assets, income taxes and contingencies, on an ongoing basis.
We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with an additional understanding of our business operating results, including underlying trends.
We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with useful supplemental information on our business operating results, including underlying trends.
Share Repurchase Program During the year ended December 31, 2023, we made $21.0 million in payments for common stock repurchases under the Repurchase Program. We had $460.7 million remaining under the Repurchase Program to repurchase additional shares as of December 31, 2023.
Share Repurchase Program During the year ended December 31, 2024, we made $10.2 million in payments for common stock repurchases under the Repurchase Program. We had $450.4 million remaining under the Repurchase Program to repurchase additional shares as of December 31, 2024.
Our financial results are primarily driven by: • the number, size and type of engagements we secure; • the rate per hour or fixed charges we charge our clients for services; • the utilization rates of the revenue-generating professionals we employ; • the timing of revenue recognition related to revenues subject to certain performance-based contingencies; • the number of revenue-generating professionals; • the types of assignments we are working on at different times; • the length of the billing and collection cycles; and • the geographic locations of our clients or locations in which services are rendered.
Our financial results are primarily driven by: • the number, size and type of engagements we secure; • the number of billable professionals; • the utilization rates of the billable professionals we employ; • the rate per hour or fixed charges we charge our clients for services; • the timing of revenue recognition; • the length of the billing and collection cycles; and • the geographic locations of our clients or locations in which services are rendered.
The above amounts reflect future unconditional payments and are based on the terms of the relevant agreements, appropriate classification of items under GAAP currently in effect and certain assumptions such as interest rates. Future events could cause actual payments to differ from these amounts. Critical Accounting Estimates General.
The above amounts reflect future unconditional payments and are based on the terms of the relevant agreements, appropriate classification of items under GAAP currently in effect and certain assumptions such as interest rates.
The increase in Free Cash Flow for the year ended December 31, 2023 was primarily due to higher net cash provided by operating activities, as described above.
The increase in Free Cash Flow for the year ended December 31, 2024 was primarily due to higher net cash provided by operating activities, as described above, and a decrease in net cash used for purchases of property and equipment.
The increase in gross profit was partially offset by higher SG&A expenses, primarily due to higher non-billable compensation expenses, which includes the impact of an increase in non-billable headcount, an increase in bad debt, outside services and other general and administrative expenses resulting in higher Adjusted EBITDA.
The decrease in Adjusted EBITDA was primarily due to an increase in direct compensation expenses, which includes the impact of a 4.5% increase in billable headcount, higher SG&A expenses, which includes the impact of a 6.2% increase in non-billable headcount, and an increase in bad debt and outside services expenses, which was partially offset by higher revenues.
Gross profit increased $34.5 million, or 18.7%, to $218.7 million for the year ended December 31, 2023. Gross profit margin increased 1.9 percentage points from 2022 to 2023.
Gross profit increased $16.5 million, or 7.5%, to $235.1 million for the year ended December 31, 2024. Gross profit margin decreased 1.1 percentage points from 2023 to 2024.
Under our operating leases as described in Note 15, “Leases” in Part II, Item 8, we have current obligations of $33.9 million and non-current obligations of $223.8 million.
Under our operating leases as described in Note 15, “Leases” in Part II, Item 8 of this Annual Report, we have current obligations of $34.1 million and non-current obligations of $208.0 million.
Gross profit increased $35.1 million, or 31.0%, to $148.5 million for the year ended December 31, 2023. Gross profit margin increased 2.9 percentage points from 2022 to 2023.
Gross profit increased $8.4 million, or 3.9%, to $225.2 million for the year ended December 31, 2024. Gross profit margin decreased 0.5 percentage points from 2023 to 2024.
SG&A expenses increased $17.0 million, or 14.4%, to $134.7 million for the year ended December 31, 2023. SG&A expenses of 20.6% of revenues in 2023 compared with 20.3% in 2022.
SG&A expenses increased $10.4 million, or 7.7%, to $145.1 million for the year ended December 31, 2024. SG&A expenses of 21.0% of revenues in 2024 compared to 20.6% in 2023.
(4) For engagements where revenues are based on number of hours worked by our billable professionals and fixed-fee arrangements, average billable rate per hour is calculated by dividing revenues (excluding revenues from success fees, pass-through revenues and outside consultants) for a period by the number of hours worked on client assignments during the same period.
We have not presented utilization rates for our Technology and Strategic Communications segments as most of the revenues of these segments are not generated on an hourly basis. 41 (3) For engagements where revenues are based on number of hours worked by our billable professionals and fixed-fee arrangements, average billable rate per hour is calculated by dividing revenues (excluding revenues from success fees, pass-through revenues and outside consultants) for a period by the number of hours worked on client assignments during the same period.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included elsewhere in this report. 35 Full Year 2023 Executive Highlights Financial Highlights Year Ended December 31, 2023 2022 % Increase (Decrease) (dollar amounts in thousands, except per share amounts) Revenues $ 3,489,242 $ 3,028,908 15.2 % Special charges (1) $ — $ 8,340 (100.0) % Net income $ 274,892 $ 235,514 16.7 % Adjusted EBITDA $ 424,799 $ 357,558 18.8 % Earnings per common share — diluted $ 7.71 $ 6.58 17.2 % Adjusted earnings per common share — diluted $ 7.71 $ 6.77 13.9 % Net cash provided by operating activities $ 224,461 $ 188,794 18.9 % Total number of employees 7,990 7,635 4.6 % (1) Excluded from non-GAAP financial measures Revenues Revenues for the year ended December 31, 2023 increased $460.3 million , or 15.2%, as compared with the year ended December 31, 2022 , primarily due to increased demand across all of our business segments.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included elsewhere in this report. 35 Full Year 2024 Executive Highlights Financial Highlights Year Ended December 31, 2024 2023 % Increase (Decrease) (dollar amounts in thousands, except per share amounts) Revenues $ 3,698,652 $ 3,489,242 6.0 % Special charges (1) $ 8,230 $ — 100.0 % Net income $ 280,088 $ 274,892 1.9 % Adjusted EBITDA $ 403,685 $ 424,799 -5.0 % Earnings per common share — diluted $ 7.81 $ 7.71 1.3 % Adjusted earnings per common share — diluted $ 7.99 $ 7.71 3.6 % Net cash provided by operating activities $ 395,097 $ 224,461 76.0 % Total number of employees 8,374 7,990 4.8 % (1) Excluded from non-GAAP financial measures Revenues Revenues for the year ended December 31, 2024 increased $209.4 million , or 6.0%, compared to the year ended December 31, 2023 due to increased revenues in all of our business segments.
The increase in SG&A expenses was primarily driven by higher infrastructure support, travel and entertainment, compensation, and other general and administrative expenses. 46 LIQUIDITY AND CAPITAL RESOURCES Liquidity We typically finance our day-to-day operations, capital expenditures, acquisitions and share repurchases through cash flows from operations.
The increase in SG&A expenses was primarily due to higher rent, compensation, marketing, and other general and administrative expenses. 46 LIQUIDITY AND CAPITAL RESOURCES Liquidity Our annual cash flows from operations generally exceed our cash needs for capital expenditures and debt service requirements. We typically finance our day-to-day operations, capital expenditures, acquisitions and share repurchases through cash flows from operations.
We have not presented utilization rates for our Technology and Strategic Communications segments as most of the revenues of these segments are not generated on an hourly basis.
We have not presented average billable rates per hour for our Technology and Strategic Communications segments as most of the revenues of these segments are not based on billable hours.
Principal Sources of Capital Resources As of December 31, 2023, our capital resources included $303.2 million of cash and cash equivalents, a $24.4 million short-term investment and available borrowing capacity of $899.9 million under the $900.0 million revolving line of credit under our Credit Facility.
Principal Sources of Capital Resources As of December 31, 2024, our capital resources included $660.5 million of cash and cash equivalents and available borrowing capacity of $900.0 million under the revolving line of credit under our Credit Facility.
The increase in SG&A expenses was primarily driven by higher infrastructure support, bad debt, compensation, outside services, and other general and administrative expenses. 44 TECHNOLOGY Year Ended December 31, 2023 2022 (dollars in thousands) Revenues $ 387,855 $ 319,983 Percentage change in revenues from prior year 21.2 % Operating expenses Direct cost of revenues 239,343 206,611 Selling, general and administrative expenses 100,316 79,835 Special charges — 106 339,659 286,552 Segment operating income 48,196 33,431 Percentage change in segment operating income from prior year 44.2 % Add back: Depreciation and amortization 14,515 13,161 Special charges — 106 Adjusted Segment EBITDA $ 62,711 $ 46,698 Gross profit (1) $ 148,512 $ 113,372 Percentage change in gross profit from prior year 31.0 % Gross profit margin (2) 38.3 % 35.4 % Adjusted Segment EBITDA as a percentage of revenues 16.2 % 14.6 % Number of revenue-generating professionals (at period end) (3) 628 556 Percentage change in number of revenue-generating professionals from prior year 12.9 % (1) Revenues less direct cost of revenues (2) Gross profit as a percentage of revenues (3) Includes personnel involved in direct client assistance and revenue-generating consultants and excludes professionals employed on an as-needed basis Year Ended December 31, 2023 Compared with December 31, 2022 Revenues increased $67.9 million, or 21.2%, to $387.9 million for the year ended December 31, 2023, primarily due to increased demand for investigations and litigation services, which was partially offset by lower demand for information governance, privacy & security services.
The increase in SG&A expenses was primarily driven by higher bad debt, largely related to one engagement, compensation and infrastructure support expenses. 44 TECHNOLOGY Year Ended December 31, 2024 2023 (dollars in thousands) Revenues $ 417,637 $ 387,855 Percentage change in revenues from prior year 7.7 % Operating expenses Direct cost of revenues 272,519 239,343 Selling, general and administrative expenses 102,576 100,316 Special charges 667 — 375,762 339,659 Segment operating income 41,875 48,196 Percentage change in segment operating income from prior year -13.1 % Add back: Depreciation 15,999 14,515 Special charges 667 — Adjusted Segment EBITDA $ 58,541 $ 62,711 Gross profit (1) $ 145,118 $ 148,512 Percentage change in gross profit from prior year -2.3 % Gross profit margin (2) 34.7 % 38.3 % Adjusted Segment EBITDA as a percentage of revenues 14.0 % 16.2 % Number of billable professionals (at period end) (3) 714 628 Percentage change in number of billable professionals from prior year 13.7 % (1) Revenues less direct cost of revenues (2) Gross profit as a percentage of revenues (3) Includes personnel involved in direct client assistance and billable consultants and excludes professionals employed on an as-needed basis Year Ended December 31, 2024 Compared to December 31, 2023 Revenues increased $29.8 million, or 7.7%, to $417.6 million for the year ended December 31, 2024, primarily due to higher demand for our M&A-related “second request” and information governance, privacy & security services, which was partially offset by lower demand for our investigations services.
The increase in SG&A expenses was primarily driven by higher infrastructure support, compensation and bad debt expenses. 43 ECONOMIC CONSULTING Year Ended December 31, 2023 2022 (dollars in thousands, except rate per hour) Revenues $ 771,374 $ 695,208 Percentage change in revenues from prior year 11.0 % Operating expenses Direct cost of revenues 552,697 510,987 Selling, general and administrative expenses 108,859 86,012 Special charges — 31 661,556 597,030 Segment operating income 109,818 98,178 Percentage change in segment operating income from prior year 11.9 % Add back: Depreciation and amortization 5,989 4,881 Special charges — 31 Adjusted Segment EBITDA $ 115,807 $ 103,090 Gross profit (1) $ 218,677 $ 184,221 Percentage change in gross profit from prior year 18.7 % Gross profit margin (2) 28.3 % 26.5 % Adjusted Segment EBITDA as a percentage of revenues 15.0 % 14.8 % Number of revenue-generating professionals (at period end) 1,089 1,007 Percentage change in number of revenue-generating professionals from prior year 8.1 % Utilization rate of billable professionals 67 % 68 % Average billable rate per hour $ 547 $ 508 (1) Revenues less direct cost of revenues (2) Gross profit as a percentage of revenues Year Ended December 31, 2023 Compared with December 31, 2022 Revenues increased $76.2 million, or 11.0%, to $771.4 million for the year ended December 31, 2023, primarily due to higher realized bill rates and demand for our non-M&A-related antitrust services and higher demand and realized bill rates for our financial economics and international arbitration services.
The increase in SG&A expenses was primarily driven by higher bad debt, travel and entertainment, rent, and other general and administrative expenses. 43 ECONOMIC CONSULTING Year Ended December 31, 2024 2023 (dollars in thousands, except rate per hour) Revenues $ 863,557 $ 771,374 Percentage change in revenues from prior year 12.0 % Operating expenses Direct cost of revenues 628,424 552,697 Selling, general and administrative expenses 131,035 108,859 Special charges 8 — 759,467 661,556 Segment operating income 104,090 109,818 Percentage change in segment operating income from prior year -5.2 % Add back: Depreciation 5,400 5,989 Special charges 8 — Adjusted Segment EBITDA $ 109,498 $ 115,807 Gross profit (1) $ 235,133 $ 218,677 Percentage change in gross profit from prior year 7.5 % Gross profit margin (2) 27.2 % 28.3 % Adjusted Segment EBITDA as a percentage of revenues 12.7 % 15.0 % Number of billable professionals (at period end) 1,110 1,089 Percentage change in number of billable professionals from prior year 1.9 % Utilization rate of billable professionals 66 % 67 % Average billable rate per hour $ 584 $ 547 (1) Revenues less direct cost of revenues (2) Gross profit as a percentage of revenues Year Ended December 31, 2024 Compared to December 31, 2023 Revenues increased $92.2 million, or 12.0%, to $863.6 million for the year ended December 31, 2024, primarily due to higher demand and realized bill rates for our M&A-related antitrust and financial economics services and higher realized bill rates for our non-M&A-related antitrust services, which was partially offset by lower demand for our non-M&A-related antitrust services.
We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors.
We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends.
These valuations are based on estimates and assumptions, including projected future cash flows, determination of appropriate comparable guideline companies and the determination of whether a premium or discount should be applied to such comparable guideline companies. 50 The process of evaluating the potential impairment of goodwill requires significant judgment and estimates.
In the market approach, we utilize market multiples derived from comparable guideline companies. These valuations are based on estimates and assumptions, including projected future cash flows, determination of appropriate comparable guideline companies and the determination of whether a premium or discount should be applied to such comparable guideline companies.
Additionally, a portion of net cash provided by operating activities was used to purchase a $24.4 million short-term investment and to repurchase and retire 112,139 shares of our common stock under our Repurchase Program for an average price per share of $158.70, at a total cost of $17.8 million during the year ended December 31, 2023.
A portion of net cash provided by operating activities was used to repurchase and retire 51,717 shares of our common stock under our Repurchase Program for an average price per share of $197.53, at a total cost of $10.2 million during the year ended December 31, 2024.
Gross profit increased $40.8 million, or 23.2%, to $216.8 million for the year ended December 31, 2023. Gross profit margin increased 2.8 percentage points from 2022 to 2023. The increase in gross profit margin was primarily due to a 3 percentage point increase in utilization and higher realized bill rates.
Gross profit increased $21.8 million, or 5.0%, to $453.8 million for the year ended December 31, 2024. Gross profit margin increased 0.5 percentage points from 2023 to 2024. The increase in gross profit margin was primarily due to the impact of higher realized bill rates, which was partially offset by a 2 percentage point decline in utilization.
The increase in SG&A expenses was primarily due to higher compensation, infrastructure support, bad debt expenses and lease abandonment costs. 45 STRATEGIC COMMUNICATIONS Year Ended December 31, 2023 2022 (dollars in thousands) Revenues $ 329,230 $ 286,666 Percentage change in revenues from prior year 14.8 % Operating expenses Direct cost of revenues 210,151 177,910 Selling, general and administrative expenses 71,615 60,716 Special charges — 369 Amortization of intangible assets 297 689 282,063 239,684 Segment operating income 47,167 46,982 Percentage change in segment operating income from prior year 0.4 % Add back: Depreciation and amortization of intangible assets 3,742 3,269 Special charges — 369 Adjusted Segment EBITDA $ 50,909 $ 50,620 Gross profit (1) $ 119,079 $ 108,756 Percentage change in gross profit from prior year 9.5 % Gross profit margin (2) 36.2 % 37.9 % Adjusted Segment EBITDA as a percentage of revenues 15.5 % 17.7 % Number of revenue-generating professionals (at period end) 971 970 Percentage change in number of revenue-generating professionals from prior year 0.1 % (1) Revenues less direct cost of revenues (2) Gross profit as a percentage of revenues Year Ended December 31, 2023 Compared with December 31, 2022 Revenues increased $42.6 million, or 14.8%, to $329.2 million for the year ended December 31, 2023, primarily driven by higher demand for our corporate reputation and public affairs services.
The increase in SG&A expenses was primarily due to higher compensation, infrastructure support and travel and entertainment expenses, which was partially offset by lower bad debt expenses. 45 STRATEGIC COMMUNICATIONS Year Ended December 31, 2024 2023 (dollars in thousands) Revenues $ 336,041 $ 329,230 Percentage change in revenues from prior year 2.1 % Operating expenses Direct cost of revenues 213,301 210,151 Selling, general and administrative expenses 76,378 71,615 Special charges 295 — Amortization of intangible assets 277 297 290,251 282,063 Segment operating income 45,790 47,167 Percentage change in segment operating income from prior year -2.9 % Add back: Depreciation and amortization of intangible assets 3,884 3,742 Special charges 295 — Adjusted Segment EBITDA $ 49,969 $ 50,909 Gross profit (1) $ 122,740 $ 119,079 Percentage change in gross profit from prior year 3.1 % Gross profit margin (2) 36.5 % 36.2 % Adjusted Segment EBITDA as a percentage of revenues 14.9 % 15.5 % Number of billable professionals (at period end) 981 971 Percentage change in number of billable professionals from prior year 1.0 % (1) Revenues less direct cost of revenues (2) Gross profit as a percentage of revenues Year Ended December 31, 2024 Compared to December 31, 2023 Revenues increased $6.8 million, or 2.1%, to $336.0 million for the year ended December 31, 2024, primarily due to higher public affairs and financial communications revenues, which was partially offset by lower corporate reputation revenues.
SG&A expenses increased $10.9 million, or 18.0%, to $71.6 million for the year ended December 31, 2023. SG&A expenses of 21.8% of revenues in 2023 compared with 21.2% in 2022.
SG&A expenses increased $9.3 million, or 4.4%, to $219.6 million for the year ended December 31, 2024. SG&A expenses of 15.8% of revenues in 2024 compared to 15.6% in 2023.
The increase in gross profit margin was primarily due to lower variable compensation expenses as a percentage of revenues and higher realized bill rates, which was partially offset by a 1 percentage point decline in utilization. SG&A expenses increased $22.8 million, or 26.6%, to $108.9 million for the year ended December 31, 2023.
The decrease in gross profit margin was primarily due to an increase in compensation and outside consultant expenses as a percentage of revenues, which was partially offset by the impact of higher realized bill rates. SG&A expenses increased $22.2 million, or 20.4%, to $131.0 million for the year ended December 31, 2024.
EPS and Adjusted EPS EPS for the year ended December 31, 2023 increased $1.13 to $7.71 com pared with $6.58 for the year ended December 31, 2022. The increase in EPS was primarily due to the higher net income described above.
Adjusted EBITDA for the year ended December 31, 2024 excludes the $8.2 million special charge. EPS and Adjusted EPS EPS for the year ended December 31, 2024 increased $0.10 to $7.81 com pared to $7.71 for the year ended December 31, 2023. The increase in EPS was primarily due to the higher net income described above.
Gross profit increased $10.3 million, or 9.5%, to $119.1 million for the year ended December 31, 2023. Gross profit margin decreased 1.8 percentage points from 2022 to 2023. The decrease in gross profit margin was primarily driven by higher compensation expenses as a percentage of revenues.
Gross profit increased $3.7 million, or 3.1%, to $122.7 million for the year ended December 31, 2024. Gross profit margin increased 0.4 percentage points from 2023 to 2024. The increase in gross profit margin was primarily due to lower compensation expenses as a percentage of revenues.
SG&A expenses of 15.6% of revenues in 2023 compared with 15.1% in 2022.
SG&A expenses of 15.2% of revenues in 2024 compared to 14.1% in 2023.
The decrease was primarily due to $9.3 million in net FX losses for the year ended December 31, 2023 compared to $0.1 million in net FX gains for the year ended December 31, 2022.
The increase was primarily due to a $0.5 million net FX gain for the year ended December 31, 2024 compared to a $9.3 million net FX loss for the year ended December 31, 2023 and a $3.3 million increase in interest income.
Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which we have prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities.
As of December 31, 2023, we were in compliance with the covenants contained in the Credit Agreement. See Note 14, “Debt” in Part II, Item 8 for a further discussion of the Credit Agreement.
See Note 14, “Debt” in Part II, Item 8 of this Annual Report for a further discussion of the Credit Agreement.
We believe that our cash flows from operations, supplemented by borrowings under our Credit Facility, as necessary, will provide adequate cash to fund our cash needs for at least the next 12 months. Generally, our cash flows from operations for the full year exceed our cash needs for capital expenditures and debt service requirements.
We believe that our cash flows from operations, supplemented by borrowings under our Credit Facility, as necessary, will provide adequate cash to fund our cash needs for at least the next 12 months. Our operating assets and liabilities consist primarily of billed and unbilled accounts receivable, notes receivable from employees, accounts payable, accrued expenses and accrued compensation expenses.
These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows.
Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans or changes in anticipated future cash flows.
The increase in SG&A expenses was primarily due to higher infrastructure support, bad debt, compensation, and other general and administrative expenses. 42 FORENSIC AND LITIGATION CONSULTING Year Ended December 31, 2023 2022 (1) (dollars in thousands, except rate per hour) Revenues $ 654,105 $ 579,933 Percentage change in revenues from prior year 12.8 % Operating expenses Direct cost of revenues 437,318 403,921 Selling, general and administrative expenses 134,708 117,728 Special charges — 4,614 Amortization of intangible assets 783 977 572,809 527,240 Segment operating income 81,296 52,693 Percentage change in segment operating income from prior year 54.3 % Add back: Depreciation and amortization of intangible assets 6,813 6,266 Special charges — 4,614 Adjusted Segment EBITDA $ 88,109 $ 63,573 Gross profit (2) $ 216,787 $ 176,012 Percentage change in gross profit from prior year 23.2 % Gross profit margin (3) 33.1 % 30.4 % Adjusted Segment EBITDA as a percentage of revenues 13.5 % 11.0 % Number of revenue-generating professionals (at period end) 1,447 1,430 Percentage change in number of revenue-generating professionals from prior year 1.2 % Utilization rate of billable professionals 57 % 54 % Average billable rate per hour $ 386 $ 359 (1) Effective July 1, 2023, prior period segment information for the Corporate Finance and FLC segments has been recast in this Annual Report to include the reclassification of the portion of the Company’s health solutions practice in the FLC segment to our realigned transformation practice within our Corporate Finance segment.
The increase in SG&A expenses was primarily due to higher infrastructure support and bad debt expenses. 42 FORENSIC AND LITIGATION CONSULTING Year Ended December 31, 2024 2023 (dollars in thousands, except rate per hour) Revenues $ 690,211 $ 654,105 Percentage change in revenues from prior year 5.5 % Operating expenses Direct cost of revenues 465,026 437,318 Selling, general and administrative expenses 145,072 134,708 Special charges 1,785 — Amortization of intangible assets 838 783 612,721 572,809 Segment operating income 77,490 81,296 Percentage change in segment operating income from prior year -4.7 % Add back: Depreciation and amortization of intangible assets 7,442 6,813 Special charges 1,785 — Adjusted Segment EBITDA $ 86,717 $ 88,109 Gross profit (1) $ 225,185 $ 216,787 Percentage change in gross profit from prior year 3.9 % Gross profit margin (2) 32.6 % 33.1 % Adjusted Segment EBITDA as a percentage of revenues 12.6 % 13.5 % Number of billable professionals (at period end) 1,542 1,447 Percentage change in number of billable professionals from prior year 6.6 % Utilization rate of billable professionals 57 % 57 % Average billable rate per hour $ 390 $ 386 (1) Revenues less direct cost of revenues (2) Gross profit as a percentage of revenues Year Ended December 31, 2024 Compared to December 31, 2023 Revenues increased $36.1 million, or 5.5%, to $690.2 million for the year ended December 31, 2024.
Days sales outstanding (“DSO”) was 100 days at December 31, 2023 and 97 days at December 31, 2022. Free Cash Flow was an inflow of $174.9 million and $135.7 million for the years ended December 31, 2023 and 2022, respectively.
Days sales outstanding (“DSO”) was 97 days at December 31, 2024 and 100 days at December 31, 2023. The decrease in DSO was primarily due to cash collections that outpaced the increase in revenues. Free Cash Flow was $360.2 million and $174.9 million for the years ended December 31, 2024 and 2023, respectively.
Results of operations for our non-U.S. subsidiaries are translated from the designated functional currency to our reporting currency of USD. Revenues and expenses are translated at average exchange rates for each month, while assets and liabilities are translated at balance sheet date exchange rates.
Revenues and expenses are translated at average exchange rates for each month, while assets and liabilities are translated at balance sheet date exchange rates.
Capital Expenditures During 2023, we spent $49.6 million in capital expenditures to support our organization, including direct support for specific client engagements. During 2024, we currently expect to make capital expenditures to support our organization in an aggregate amount of between $35 million and $42 million.
Capital Expenditures During 2024, we spent $34.9 million in capital expenditures to support our organization, including direct support for specific client engagements.
The increase of $248.7 million, or 234.5%, in net cash used in financing activities was primarily due to the repayment of the $315.8 million principal amount of our 2023 Convertible Notes at maturity, which was partially offset by a decrease of $64.4 million in payments for common stock repurchases under the Repurchase Program as compared to 2022.
The decrease was primarily due to the repayment of the $315.8 million principal amount of our 2023 Convertible Notes at maturity during 2023, a decrease of $10.8 million in payments for common stock repurchases under the Repurchase Program and an increase in proceeds on stock option exercises of $9.6 million as compared to the prior year.
Adjusted EPS for the year ended December 31, 2022 excluded the $8.3 million special charge, which increased Adjusted EPS by $0.19. 36 Liquidity and Capital Allocation Net cash provided by operating activities for the year ended December 31, 2023 increased $35.7 million to $224.5 million compared with $188.8 million for the year ended December 31, 2022.
Liquidity and Capital Allocation Net cash provided by operating activities for the year ended December 31, 2024 increased $170.6 million to $395.1 million compared to $224.5 million for the year ended December 31, 2023.
The effect of exchange rate changes on cash and cash equivalents had a favorable impact of $15.6 million for 2023 compared to an unfavorable impact of $25.5 million for 2022.
The effect of exchange rate changes on cash and cash equivalents had an unfavorable impact of $12.3 million for 2024 compared to a favorable impact of $15.6 million for 2023. For the year ended December 31, 2024, cash paid for income taxes and tax credits, net of refunds included $40.6 million of payments for the purchase of tax credits.
The increase was primarily due to higher compensation expenses, which was partially offset by higher allocation of infrastructure support spend. 39 Interest income and other Interest income and other, which includes FX gains and losses, decreased $8.8 million to a $4.9 million loss for the year ended December 31, 2023, compared with a $3.9 million gain for the year ended December 31, 2022.
Interest income and other Interest income and other, which includes FX gains and losses, increased $15.2 million to a gain of $10.4 million for the year ended December 31, 2024, compared to a loss of $4.9 million for the year ended December 31, 2023.
The increase in gross profit margin was primarily due to an increased mix and profitability of our hosting and consulting services, which was partially offset by lower mix of our higher margin processing services. SG&A expenses increased $20.5 million, or 25.7%, to $100.3 million for the year ended December 31, 2023.
Gross profit decreased $3.4 million, or 2.3%, to $145.1 million for the year ended December 31, 2024. Gross profit margin decreased 3.5 percentage points from 2023 to 2024. The decrease in gross profit margin was primarily due to lower profitability of our consulting and hosting services.
The following table reconciles net income to Total Adjusted Segment EBITDA, a non-GAAP financial measure, for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 (in thousands) Net income $ 274,892 $ 235,514 Add back: Income tax provision 83,471 62,235 Interest income and other 4,867 (3,918) Interest expense 14,331 10,047 Unallocated corporate expenses 125,420 124,830 Total segment operating income 502,981 428,708 Add back: Segment depreciation expense 39,233 32,876 Amortization of intangible assets 6,159 9,642 Segment special charges — 7,564 Total Adjusted Segment EBITDA $ 548,373 $ 478,790 40 Other Segment Operating Data Year Ended December 31, 2023 2022 Number of revenue-generating professionals (at period end): Corporate Finance (1) 2,215 2,100 FLC (1) 1,447 1,430 Economic Consulting 1,089 1,007 Technology (2) 628 556 Strategic Communications 971 970 Total revenue-generating professionals 6,350 6,063 Utilization rates of billable professionals: (3) Corporate Finance (1) 60 % 60 % FLC (1) 57 % 54 % Economic Consulting 67 % 68 % Average billable rate per hour: (4) Corporate Finance (1) $ 494 $ 456 FLC (1) $ 386 $ 359 Economic Consulting $ 547 $ 508 (1) Effective July 1, 2023, prior period segment information for the Corporate Finance and FLC segments has been recast in this Annual Report to include the reclassification of the portion of the Company’s health solutions practice in the FLC segment to our realigned business transformation practice within our Corporate Finance segment.
The following table reconciles net income to Total Segment Operating Income and Total Adjusted Segment EBITDA, for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (in thousands) Net income $ 280,088 $ 274,892 Add back: Income tax provision 70,683 83,471 Interest income and other (10,360) 4,867 Interest expense 6,951 14,331 Unallocated corporate expenses 147,594 125,420 Total segment operating income 494,956 502,981 Add back: Segment depreciation expense 41,861 39,233 Amortization of intangible assets 4,183 6,159 Segment special charges 8,081 — Total Adjusted Segment EBITDA $ 549,081 $ 548,373 Other Segment Operating Data Year Ended December 31, 2024 2023 Number of billable professionals (at period end): Corporate Finance 2,286 2,215 FLC 1,542 1,447 Economic Consulting 1,110 1,089 Technology (1) 714 628 Strategic Communications 981 971 Total billable professionals 6,633 6,350 Utilization rates of billable professionals: (2) Corporate Finance 58 % 60 % FLC 57 % 57 % Economic Consulting 66 % 67 % Average billable rate per hour: (3) Corporate Finance $ 510 $ 494 FLC $ 390 $ 386 Economic Consulting $ 584 $ 547 (1) The number of billable professionals for the Technology segment excludes as-needed professionals, who we employ based on demand for the segment’s services.
We have not presented average billable rates per hour for our Technology and Strategic Communications segments as most of the revenues of these segments are not based on billable hours. 41 CORPORATE FINANCE & RESTRUCTURING Year Ended December 31, 2023 2022 (1) (dollars in thousands, except rate per hour) Revenues $ 1,346,678 $ 1,147,118 Percentage change in revenues from prior year 17.4 % Operating expenses Direct cost of revenues 914,707 766,514 Selling, general and administrative expenses 210,388 172,760 Special charges — 2,444 Amortization of intangible assets 5,079 7,976 1,130,174 949,694 Segment operating income 216,504 197,424 Percentage change in segment operating income from prior year 9.7 % Add back: Depreciation and amortization of intangible assets 14,333 14,941 Special charges — 2,444 Adjusted Segment EBITDA $ 230,837 $ 214,809 Gross profit (2) $ 431,971 $ 380,604 Percentage change in gross profit from prior year 13.5 % Gross profit margin (3) 32.1 % 33.2 % Adjusted Segment EBITDA as a percentage of revenues 17.1 % 18.7 % Number of revenue-generating professionals (at period end) 2,215 2,100 Percentage change in number of revenue-generating professionals from prior year 5.5 % Utilization rate of billable professionals 60 % 60 % Average billable rate per hour $ 494 $ 456 (1) Effective July 1, 2023, prior period segment information for the Corporate Finance and FLC segments has been recast in this Annual Report to include the reclassification of the portion of the Company’s health solutions practice in the FLC segment to our realigned business transformation practice within our Corporate Finance segment.
CORPORATE FINANCE & RESTRUCTURING Year Ended December 31, 2024 2023 (dollars in thousands, except rate per hour) Revenues $ 1,391,206 $ 1,346,678 Percentage change in revenues from prior year 3.3 % Operating expenses Direct cost of revenues 937,456 914,707 Selling, general and administrative expenses 219,645 210,388 Special charges 5,326 — Amortization of intangible assets 3,068 5,079 1,165,495 1,130,174 Segment operating income 225,711 216,504 Percentage change in segment operating income from prior year 4.3 % Add back: Depreciation and amortization of intangible assets 13,319 14,333 Special charges 5,326 — Adjusted Segment EBITDA $ 244,356 $ 230,837 Gross profit (1) $ 453,750 $ 431,971 Percentage change in gross profit from prior year 5.0 % Gross profit margin (2) 32.6 % 32.1 % Adjusted Segment EBITDA as a percentage of revenues 17.6 % 17.1 % Number of billable professionals (at period end) 2,286 2,215 Percentage change in number of billable professionals from prior year 3.2 % Utilization rate of billable professionals 58 % 60 % Average billable rate per hour $ 510 $ 494 (1) Revenues less direct cost of revenues (2) Gross profit as a percentage of revenues Year Ended December 31, 2024 Compared to December 31, 2023 Revenues increased $44.5 million, or 3.3%, to $1,391.2 million for the year ended December 31, 2024.
The increase in gross profit was partially offset by higher selling, general and administrative (“SG&A”) expenses, primarily due to higher non-billable compensation expenses, which includes the impact of an increase in non-billable headcount, an increase in bad debt, outside services and other general and administrative expenses resulting in higher operating income.
This increase was partially offset by higher direct compensation expenses, which includes the impact of a 4.5% increase in billable headcount, higher selling, general and administrative (“SG&A”) expenses, which includes the impact of a 6.2% increase in non-billable headcount, and an increase in bad debt and outside services expenses. 36 Adjusted EBITDA Adjusted EBITDA for the year ended December 31, 2024 decreased $21.1 million, or 5.0%, compared to the year ended December 31, 2023.
(2) The number of revenue-generating professionals for the Technology segment excludes as-needed professionals, who we employ based on demand for the segment’s services. We employed an average of 670 and 561 as-needed employees during the years ended December 31, 2023 and 2022, respectively.
We employed an average of 776 and 670 as-needed employees during the years ended December 31, 2024 and 2023, respectively.
The increase was partially offset by higher compensation expenses primarily related to headcount growth, an increase in other operating expenses and higher use of working capital required for growth. DSO was 100 days as of December 31, 2023 and 97 days as of December 31, 2022.
The increase was primarily due to an increase in cash collections, which was partially offset by higher compensation, forgivable loan issuances to retain key professionals, operating expenses and income tax payments as compared to the prior year. DSO was 97 days as of December 31, 2024 and 100 days as of December 31, 2023.
Adjusted EPS for the year ended December 31, 2023 increased $0.94 to $7.71 compared with $6.77 for the year ended December 31, 2022.
Adjusted EPS for the year ended December 31, 2024 increased $0.28 to $7.99 compared to $7.71 for the year ended December 31, 2023. Adjusted EPS for the year ended December 31, 2024 excludes the $8.2 million special charge, which increased Adjusted EPS by $0.18.
We had $460.7 million remaining under the Repurchase Program to repurchase additional shares as of December 31, 2023. Headcount The following table includes the net headcount additions by segment and in total for the year ended December 31, 2023.
The Company expects to record a special charge of approximately $17 million in the first quarter of 2025. Headcount The following table includes the net headcount additions by segment and in total for the year ended December 31, 2024.
The increase in net cash provided by operating activities was primarily due to higher cash collections resulting from increased billings. The increase was partially offset by higher compensation expenses primarily related to headcount growth, an increase in other operating expenses and higher use of working capital required for growth.
The increase in net cash provided by operating activities was primarily due to an increase in cash collections, which was partially offset by higher compensation, forgivable loan issuances, operating expenses and income tax payments as compared to the same period in the prior year.
Year Ended December 31, 2023 Compared with December 31, 2022 Net cash provided by operating activities of $224.5 million for 2023 compared with $188.8 million for 2022. The increase of $35.7 million, or 18.9%, in net cash provided by operating activities was primarily due to higher cash collections resulting from increased billings.
Year Ended December 31, 2024 Compared to December 31, 2023 Net cash provided by operating activities increased $170.6 million, or 76.0%, to $395.1 million compared to $224.5 million for the year ended December 31, 2023.
It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies.
In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry.
In 2023, we performed our annual impairment tests for each of our reporting units. The results of that test indicated that for each of our reporting units, no impairment existed. If market conditions significantly deteriorate from our current assumptions regarding forecasted cash flows, we may be required to record goodwill impairment charges in future periods.
If market conditions significantly deteriorate from our current assumptions regarding forecasted cash flows, we may be required to record goodwill impairment charges in future periods. It is not possible at this time to determine if any future impairment charge would result or, if it does, whether such charge would be material.
SG&A expenses of 25.9% of revenues for 2023 compared with 24.9% in 2022.
SG&A expenses increased $2.3 million, or 2.3%, to $102.6 million for the year ended December 31, 2024. SG&A expenses of 24.6% of revenues in 2024 compared to 25.9% of revenues in 2023.
Operating income was partially offset by higher income taxes resulting in an increase in net income. Adjusted EBITDA Adjusted EBITDA for the year ended December 31, 2023 increased $67.2 million, or 18.8%, as compared with the year ended December 31, 2022.
Net income Net income for the year ended December 31, 2024 increased $5.2 million, or 1.9%, compared to the year ended December 31, 2023 . The increase in net income was primarily due to higher revenues, lower income taxes and an FX gain compared to an FX loss in the prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeYear Ended December 31, 2023 2022 2021 Changes in Net Investment of Foreign Subsidiaries (in thousands) Euro $ 6,210 $ (9,187) $ (12,381) Australian dollar (161) (4,930) (4,002) British pound 15,842 (29,738) (3,132) Canadian dollar 1,017 (747) (247) All other 3,354 (3,280) (2,643) Total $ 26,262 $ (47,882) $ (22,405) 52
Biggest changeThese translation adjustments are reflected in “Other comprehensive income (loss)” on our Consolidated Statements of Comprehensive Income. Year Ended December 31, 2024 2023 Changes in Net Investment of Foreign Subsidiaries (in thousands) Euro $ (10,136) $ 6,210 Australian dollar (6,109) (161) British pound (1,928) 15,842 Canadian dollar (1,514) 1,017 All other (6,425) 3,354 Total $ (26,112) $ 26,262 52
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk from changes in interest rates and foreign exchange rates. Interest Rate Risk and Market Risk We are exposed to interest rate risk associated with borrowings under our Credit Facility.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk primarily from changes in interest rates and foreign exchange rates. Interest Rate Risk We are exposed to interest rate risk associated with borrowings under our Credit Facility.
Our most significant exposures to translation risk relate to functional currency assets and liabilities that are denominated in the Euro, Australian dollar, British pound and Canadian dollar. The following table details the unrealized changes in the net investments of foreign subsidiaries whose currencies are denominated in currencies other than USD for the years ended December 31, 2023, 2022 and 2021.
Our most significant exposures to translation risk relate to functional currency assets and liabilities that are denominated in the Euro, Australian dollar, British pound and Canadian dollar. The following table details the unrealized changes in the net investments of foreign subsidiaries whose currencies are denominated in currencies other than USD for the years ended December 31, 2024 and 2023.
A hypothetical 100 basis point increase in interest rate for the year ended December 31, 2022 would have a $0.1 million effect on interest expense. Future interest rate risk may be affected by revolving line of credit borrowings subsequent to December 31, 2023 and prior to the November 21, 2027 maturity date of our Credit Facility.
A hypothetical 100 basis point increase in interest rate for the year ended December 31, 2023 would have a $0.8 million effect on interest expense. Future interest rate risk may be affected by revolving line of credit borrowings subsequent to December 31, 2024 and prior to the November 21, 2027 maturity date of our Credit Facility.
For details related to variable interest rates on our Credit Facility, refer to Note 14, “Debt” in Part II Item 8 of this Annual Report. As of December 31, 2023, our Credit Facility had no borrowings outstanding. Variable interest borrowings had a weighted average interest rate of 7.09% during the twelve months ended December 31, 2023.
For details related to variable interest rates on our Credit Facility, refer to Note 14, “Debt” in Part II, Item 8 of this Annual Report. As of December 31, 2024 and 2023, our Credit Facility had no borrowings outstanding. Variable interest borrowings had a weighted average interest rate of 7.45% during the twelve months ended December 31, 2024.
A hypothetical 100 basis point increase in interest rate for the year ended December 31, 2023 would have a $0.8 million effect on interest expense. As of December 31, 2022, our Credit Facility had no borrowings outstanding. Variable interest borrowings had a weighted average interest rate of 3.64% during the twelve months ended December 31, 2022.
A hypothetical 100 basis point increase in interest rate for the year ended December 31, 2024 would have a $0.6 million effect on interest expense. Variable interest borrowings had a weighted average interest rate of 7.09% during the twelve months ended December 31, 2023.
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These translation adjustments are reflected in “Other comprehensive income (loss)” on our Consolidated Statements of Comprehensive Income.

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