CRA International Reports 13.6% Revenue Growth and Improved Profitability in Latest Quarter

CRA International, Inc. reported significant financial growth for the fiscal quarter ended September 28, 2024, with revenues reaching $167.7 million, a 13.6% increase from $147.6 million in the same quarter of the previous year. Year-to-date revenues also rose to $511.0 million, up 10.5% from $462.4 million. The increase in revenue was primarily driven by consulting services, with fixed-price consulting revenues at $30.7 million and time-and-materials revenues at $137.1 million for the quarter.

The company's profitability improved markedly, with income from operations for the quarter at $18.4 million, compared to $10.8 million in the prior year, representing an increase in the operating margin from 7.3% to 11.0%. Year-to-date income from operations also increased to $49.3 million from $40.4 million. Net income for the quarter was $11.4 million, up from $8.6 million, while year-to-date net income rose to $31.7 million from $27.0 million. Basic net income per share increased to $1.68 from $1.22 for the quarter and to $4.62 from $3.83 year-to-date.

Despite the positive revenue and income growth, CRA International experienced a decrease in cash and cash equivalents, which fell to $24.5 million from $45.6 million at the end of the previous fiscal year. This decline was attributed to performance bonuses, forgivable loan advances, share repurchases, and dividend payments. The company reported net cash used in operating activities of $29.7 million for the year-to-date period.

Strategically, CRA International has been active in managing its capital structure, with $60.0 million in borrowings outstanding under its revolving credit facility as of September 28, 2024, compared to no borrowings at the end of the previous fiscal year. The company has also expanded its share repurchase program, authorizing an additional $35.0 million, although no shares were repurchased in the latest quarter.

The company’s consultant headcount decreased from 1,014 to 978 year-over-year, while the utilization rate improved to 76% from 66%. Selling, general, and administrative expenses increased to $31.3 million for the quarter, but as a percentage of revenues, they decreased slightly to 18.6%. The effective tax rate for the quarter rose to 28.7% from 18.3% in the prior year.

CRA International plans to adopt ASU 2023-09 in its annual reporting for fiscal year 2025, which is expected to have no impact on financial results. The company continues to evaluate acquisition opportunities and expects to fund its long-term cash needs from existing capital resources and cash generated from operations.