Strength and Durability? FTI Consulting Reports Fourth Quarter and Full Year 2022 Financial Results (2024)

• FourthQuarter 2022 Revenues of$774.4 Million, Up15%Compared to$676.2 Millionin PriorYear Quarter; Excluding Estimated Negative Impact of FX,FourthQuarter 2022 Revenues Up18%Compared to PriorYear Quarter
• FourthQuarter 2022 EPS of$1.33Compared to$1.07in PriorYear Quarter;FourthQuarter 2022 Adjusted EPS of$1.52Compared to$1.13in PriorYear Quarter
• Full Year 2022 Revenues of$3.029 Billion, Up 9% Compared to$2.776 Billionin Prior Year; Excluding Estimated Negative Impact of FX, Full Year 2022 Revenues Increased 12% Compared to Prior Year
• Full Year 2022 EPS of$6.58Compared to$6.65in Prior Year; Full Year 2022 Adjusted EPS of$6.77Compared to$6.76in Prior Year
• Introduces 2023 Guidance

WASHINGTON,Feb. 23, 2023(GLOBE NEWSWIRE) —FTI Consulting, Inc.(NYSE: FCN) today released financial results for the full year and fourth quarter endedDecember 31, 2022.

For the full year 2022, revenues of$3.029 billionincreased$252.7 million, or 9.1%, compared to revenues of$2.776 billionin the prior year. Excluding the estimated negative impact from foreign currency translation (“FX”), revenues increased$339.8 million, or 12.2%, compared to the prior year. The increase in revenues was primarily due to higher demand in the Corporate Finance & Restructuring,Forensic and Litigation Consulting,Technology and Strategic Communicationsbusiness segments. Net income of$235.5 millioncompared to$235.0 millionin the prior year. The increase in net income was primarily due to higher revenues, which was largely offset by higher compensation, including the impact of a 12.3% increase in billable headcount, and a 19.2% increase in selling, general and administrative (“SG&A”) expenses compared to the prior year. In full year 2022, there was an$8.3 millionspecial charge recorded in the fourth quarter related to severance and other employee-related costs. Adjusted EBITDA, which excludes the special charge, of$357.6 million, or 11.8% of revenues, compared to$354.0 million, or 12.8% of revenues, in the prior year period.

Full year 2022 earnings per diluted share (“EPS”) of$6.58compared to$6.65in the prior year. Full year 2022 EPS included the$8.3 millionspecial charge, which reduced EPS by$0.19. Full year 2021 EPS included$9.6 millionof non-cash interest expense related to the Company’s 2.0% convertible senior notes due 2023 (“2023 Convertible Notes”), which reduced EPS by$0.20, and$3.1 millionin fair value remeasurement of acquisition-related contingent consideration, which increased EPS by$0.09. Full year 2022 Adjusted EPS of$6.77compared to Adjusted EPS of$6.76in the prior year.

Steven H. Gunby, President and Chief Executive Officer ofFTI Consulting, commented, “We are pleased that in 2022, we once again reported record revenues, Adjusted EBITDA and Adjusted EPS. That strength and durability, to me, are consequences of our teams’ commitment to invest behind our people and positions, independent of market conditions, a commitment which has allowed us to increasingly serve our clients as they face their most significant opportunities and challenges.”

Cash Position and Capital Allocation

Net cash provided by operating activities of$188.8 millionfor the year endedDecember 31, 2022compared to$355.5 millionfor the year endedDecember 31, 2021. The year-over-year decrease in net cash provided by operating activities was largely due to higher compensation, operating expenses and income taxes paid, which was partially offset by an increase in cash collected.

Cash and cash equivalents of$491.7 millionatDecember 31, 2022compared to$494.5 millionatDecember 31, 2021and$327.0 millionatSeptember 30, 2022. Total debt, net of cash, of($175.5) millionatDecember 31, 2022compared to ($178.2)million atDecember 31, 2021and($10.8) millionatSeptember 30, 2022. The sequential decrease in total debt, net of cash, was primarily due to an increase in cash provided by operating activities, which was partially offset by share repurchases.

OnDecember 1, 2022, FTI Consulting’s Board of Directors authorized the additional amount of$400.0million to repurchase its outstanding shares of common stock under its stock repurchase program. During the quarter endedDecember 31, 2022, the Company repurchased 425,016 shares of its common stock at an average price per share of$153.09for a total cost of$65.1 million. In full year 2022, the Company repurchased 574,418 shares of its common stock at an average price per share of$154.23for a total cost of$88.6 million. As ofDecember 31, 2022, approximately$478.5million remained available for common stock repurchases under the Company’s stock repurchase program.

Fourth Quarter 2022 Results

Fourth quarter 2022 revenues of$774.4 millionincreased$98.2 million, or 14.5%, compared to revenues of$676.2 millionin the prior year quarter. Excluding the estimated negative impact from FX, revenues increased$124.3 million, or 18.4%, compared to the prior year quarter. Acquisition-related revenues contributed$3.5 millionduring the quarter. The increase in revenues was primarily due to higher demand across the Corporate Finance & Restructuring,Forensic and Litigation Consultingand Technology segments. Net income of$47.5 millioncompared to$38.2 millionin the prior year quarter. The increase in net income was primarily due to higher revenues, which was partially offset by an increase in compensation, including the impact of a 12.3% increase in billable headcount, higher SG&A expenses, the aforementioned$8.3 millionspecial charge, an increase in FX remeasurement losses and a higher effective tax rate compared to the prior year quarter. Adjusted EBITDA, which excludes the special charge, of$92.0 million, or 11.9% of revenues, compared to$62.0 million, or 9.2% of revenues, in the prior year quarter.

Fourth quarter 2022 EPS of$1.33compared to$1.07in the prior year quarter. Fourth quarter 2022 EPS included the$8.3 millionspecial charge, which decreased EPS by$0.19. Fourth quarter 2021 EPS included$2.4 millionof non-cash interest expense related to the Company’s2023 Convertible Notes, which decreased EPS by$0.06. Fourth quarter 2022 Adjusted EPS of$1.52, which excludes the special charge, compared to Adjusted EPS of$1.13in the prior year quarter. Fourth quarter 2021 Adjusted EPS excluded the non-cash interest expense related to the Company’s 2023 Convertible Notes.

FourthQuarter 2022 Segment Results

Corporate Finance & Restructuring

Revenues in the Corporate Finance & Restructuring segment increased$61.3 million, or 26.5%, to$292.8 millionin the quarter, compared to$231.5 millionin the prior year quarter. Excluding the estimated negative impact from FX, revenues increased$68.4 million, or 29.5%, compared to the prior year quarter. Acquisition-related revenues contributed$3.5 millionin the quarter. The increase in revenues was due to higher demand for restructuring and business transformation services. Adjusted Segment EBITDA of$52.4 million, or 17.9% of segment revenues, compared to$22.2 million, or 9.6% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which includes the impact of a 14.3% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

Forensic and Litigation Consulting

Revenues in theForensic and Litigation Consultingsegment increased$22.4 million, or 16.2%, to$160.4 millionin the quarter, compared to$138.0 millionin the prior year quarter. Excluding the estimated negative impact from FX, revenues increased$25.9 million, or 18.8%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for investigations, data & analytics and health solutions services. Adjusted Segment EBITDA of$13.8 million, or 8.6% of segment revenues, compared to$8.5 million, or 6.2% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which includes the impact of a 5.9% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

Economic Consulting

Revenues in theEconomic Consultingsegment decreased$0.3 million, or 0.2%, to$172.0 millionin the quarter, compared to$172.3 millionin the prior year quarter. Excluding the estimated negative impact from FX, revenues increased$8.4 million, or 4.9%, compared to the prior year quarter. The increase in revenues was primarily due to higher realization for merger and acquisition (“M&A”)-related antitrust and international arbitration services, which was partially offset by lower demand for financial economics services compared to the prior year quarter. Adjusted Segment EBITDA of$27.3 million, or 15.9% of segment revenues, compared to$30.0 million, or 17.4% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to higher SG&A expenses compared to the prior year quarter.

Technology

Revenues in the Technology segment increased$12.2 million, or 18.9%, to$76.8 millionin the quarter, compared to$64.6 millionin the prior year quarter. Excluding the estimated negative impact from FX, revenues increased$14.4 million, or 22.2%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for investigations and M&A-related “second request” services. Adjusted Segment EBITDA of$11.8 million, or 15.3% of segment revenues, compared to$7.8 million, or 12.1% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which includes the impact of an 18.8% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

Strategic Communications

Revenues in theStrategic Communicationssegment increased$2.6 million, or 3.7%, to$72.4 millionin the quarter, compared to$69.9 millionin the prior year quarter. Excluding the estimated negative impact from FX, revenues increased$7.3 million, or 10.4%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for public affairs and financial communications services. Adjusted Segment EBITDA of$10.5 million, or 14.5% of segment revenues, compared to$14.9 million, or 21.4% of segment revenues, in the prior year quarter. The decrease in Adjusted Segment EBITDA was primarily due to higher compensation, which includes the impact of a 19.2% increase in billable headcount, and an increase in SG&A expenses compared to the prior year quarter.

2023 Guidance

The Company estimates that revenues for full year 2023 will range between $3.330 billion and $3.470 billion. The Company estimates that EPS for full year 2023 will range between $6.80 and $7.70. The Company does not currently expect Adjusted EPS to differ from EPS.

FourthQuarter and Full Year 2022 Conference Call

FTI Consulting will host a conference call for analysts and investors to discuss fourth quarter and full year 2022 financial results at 9:00 a.m. Eastern Time on Thursday, February 23, 2023. The call can be accessed live and will be available for replay over the internet for 90 days by logging onto the Company’s investor relations websitehere.

AboutFTI Consulting

FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 7,600 employees located in 31 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $3.0 billion in revenues during fiscal year 2022. More information can be found atwww.fticonsulting.com.