Exponent Inc. Reports Modest Revenue Growth and Net Income Increase in Q3 2024

Exponent Inc. reported its financial results for the third quarter and the first nine months of fiscal 2024, highlighting a modest increase in revenues and net income compared to the same periods in the previous year. For the three months ended September 27, 2024, the company generated revenues of $136.3 million, a 2% increase from $133.3 million in Q3 2023. For the nine months, revenues reached $421.7 million, up 1.9% from $413.9 million in the prior year.

Net income for Q3 2024 was $26.0 million, reflecting a 6% increase from $24.5 million in Q3 2023. The nine-month net income also rose to $85.4 million from $79.4 million in the same period last year. The diluted earnings per share for Q3 2024 improved to $0.51, compared to $0.48 in Q3 2023.

Operating income for the third quarter decreased to $25.8 million from $33.9 million in the prior year, primarily due to a significant rise in corporate operating expenses, which increased by 79.1% to $(22.0 million). This increase was largely attributed to a $9.9 million rise in deferred compensation expenses. The Engineering and Other Scientific segment, however, saw an increase in operating income, rising to $40.3 million from $38.7 million in Q3 2023.

The company’s total current assets increased to $412.6 million as of September 27, 2024, from $379.5 million at the end of December 2023. Cash and cash equivalents also rose to $219.7 million from $187.2 million during the same period. Total liabilities increased to $333.8 million from $290.7 million, while total stockholders’ equity grew to $410.3 million from $356.1 million.

In terms of operational metrics, billable hours decreased by 5% to 362,000 in Q3 2024, although the utilization rate improved to 73% from 70% in Q3 2023. The company’s workforce saw a reduction, with technical full-time equivalent employees decreasing by 10% to 949.

Strategically, Exponent has focused on increasing proactive engagements in the consumer electronics sector, which has contributed to revenue growth. However, challenges remain in the chemicals sector and from high growth benchmarks set in the previous year. The company also extended its lease with the State of Arizona, resulting in an additional right-of-use asset and operating lease liability of $48.7 million.

Overall, Exponent's financial performance reflects a combination of revenue growth and increased operational costs, with strategic initiatives aimed at enhancing its market position in key sectors.