FTI Consulting Raises Financial Outlook Following Record Third Quarter Performance

FTI Consulting posted record third-quarter results and raised full-year guidance as strength in Corporate Finance & Restructuring and Forensic & Litigation Consulting offset continued weakness in its Economic Consulting and Technology units. For the quarter ended September 30, revenue rose 3.3% to $956.2 million, while earnings per share climbed 41% to $2.60, helped by one-time items that management described as tilting positive. The company's adjusted EBITDA increased to $130.6 million, representing 13.7% of revenue compared to 11.1% a year earlier.

The Corporate Finance segment led the company's performance with revenue up 18.6% to $404.9 million, driven primarily by restructuring and deal advisory services. This strong performance pushed the segment's EBITDA margin to 23.8%, demonstrating the continued demand for financial restructuring expertise in uncertain economic conditions. Similarly, Forensic & Litigation Consulting revenue rose 15.4% to $194.7 million, with stronger pricing in risk and investigations and data analytics pushing margins to 21.9%. The Strategic Communications business also showed growth, increasing 7.4% to $89.4 million, reflecting sustained demand for crisis management, transformation, and cybersecurity counsel.

However, not all segments performed equally well. Economic Consulting, dominated by Compass Lexecon, fell 22% to $173.1 million and posted a $4.6 million adjusted EBITDA loss amid softer antitrust work and higher retention and hiring costs. Management indicated that costs have stabilized but cautioned that a revenue inflection will take multiple quarters as new hires ramp up their productivity. The Technology segment also faced challenges, with revenue declining 14.8% to $94.1 million due to fewer second-request matters, though management noted that activity improved sequentially from the previous quarter.

Chief Executive Steve Gunby characterized the quarter's performance as a payoff from years of organic investment and strategic talent acquisitions across geographies and adjacent service areas. He reaffirmed the company's commitment to continued spending on artificial intelligence capabilities and senior recruiting despite near-term pressure in the weaker segments. This long-term strategic approach appears to be yielding results, as the company now expects 2025 revenue of $3.685 billion to $3.735 billion, with EPS projected between $7.62 and $8.12, and adjusted EPS ranging from $8.20 to $8.70, assuming a 22% to 24% tax rate.

The company's financial strength was further demonstrated through its share repurchase activity, with FTI Consulting repurchasing 1.426 million shares during the quarter at an average price of $164.18 and an additional 469,610 shares post-quarter at $160.23. The board also added $500 million to the existing buyback authorization, signaling confidence in the company's future prospects. At quarter-end, cash stood at $146 million with net debt of $364 million, providing the company with financial flexibility to navigate market conditions.

Management acknowledged typical fourth-quarter seasonality but expressed confidence that 2025 would mark an 11th consecutive year of adjusted EPS growth barring unforeseen market disruptions. The company's performance and raised guidance reflect the ongoing demand for specialized consulting services in corporate restructuring, litigation support, and strategic communications, particularly during periods of economic uncertainty and corporate transformation. The sustained growth across multiple business segments suggests that companies continue to value expert guidance in navigating complex financial, legal, and operational challenges.