FTI Consulting Reports Mixed Q2 Results with Strong Restructuring Performance Amid Strategic Investments

FTI Consulting reported steady second-quarter results with revenue of $944 million, essentially unchanged from the previous year but exceeding Wall Street expectations. The Washington, D.C.-based advisory firm demonstrated resilience despite earnings per share declining to $2.13 from $2.34 a year earlier, with the figure still surpassing analyst projections. The company's adjusted EBITDA margin remained stable at just under 12%, indicating maintained operational efficiency amid challenging market conditions.

The quarter showcased significant divergence across FTI Consulting's business segments. Corporate Finance & Restructuring emerged as the standout performer, achieving record revenue of $379 million representing a 9% increase. Strategic Communications delivered a surprising 21% surge to $103 million, driven by increased demand for corporate reputation and crisis management services. Forensic and Litigation Consulting also posted solid growth with a 10% revenue increase to $187 million, demonstrating the firm's strength in legal advisory services.

However, the results revealed challenges in other divisions. Economic Consulting experienced a 17% revenue decline with margins narrowing to 7%, while the Technology segment faced a substantial 28% decrease in revenue attributed to fewer regulatory-driven discovery assignments. Management emphasized that current investments in senior hires and strategic partnerships, though temporarily impacting margins, are designed to support long-term growth objectives. The company's approach reflects its commitment to strategic positioning across market cycles.

FTI Consulting maintained its aggressive capital return program, repurchasing $355 million of stock during the second quarter and $540 million year-to-date. The buyback initiative has been financed through increased debt, with total debt rising to approximately $470 million from $160 million in the prior quarter. Despite this increase, leverage remains modest at about 1.2 times gross debt to EBITDA, providing financial flexibility for future opportunities. CFO Ajay Sabherwal characterized the current leverage level as an outcome rather than a target, highlighting management's opportunistic approach to capital deployment.

The upcoming CFO transition adds another layer of significance to the quarterly results. Sabherwal, who has served as CFO since 2016, is scheduled to depart in September for a role outside the consulting industry. Paul Linton, currently Chief Strategy and Transformation Officer, will assume the interim CFO position. Analysts suggest the transition should maintain continuity, though Sabherwal's established track record in capital discipline makes the leadership change noteworthy for investors monitoring the firm's financial strategy.

FTI shares currently trade around $163, representing approximately 22 times forward earnings and 14 times EBITDA, with little movement since July. This valuation suggests investors recognize the company's stability and cash generation capabilities while awaiting clearer signs of recovery in the underperforming segments. Chief Executive Steven Gunby has characterized 2025 as a challenging year, acknowledging the mixed performance across business units while emphasizing the firm's strategy of maintaining investment discipline through varying market conditions.

The divergent performance across segments underscores the broader consulting industry's adaptation to evolving client needs and regulatory environments. The strong showing in restructuring and communications suggests increased corporate demand for crisis management and financial reorganization services, while the technology segment's challenges reflect shifting regulatory priorities and discovery requirements. This performance pattern may indicate broader market trends affecting professional services firms specializing in regulatory and economic advisory work.