CRAI 10-K & 10-Q changes, risk factors and insider trading

•the potential need to raise significant amounts of capital to finance a transaction or the potential issuance of equity securities that could be dilutive to our existing stockholdersshareholders;

Our acquisitions have been accounted for as purchases,purchases someusing acquisition method accounting. Some of whichour acquisitions involved purchase prices in excess of tangible asset values, resulting in the creation of goodwill and other intangible assets. Under generally accepted accounting principles, we do not amortize goodwill or intangible assets acquired in a business combination that are determined to have indefinite useful lives, but instead review them annually (or more frequently if impairment indicators arise) for impairment. To the extent that we determine that such an asset has been impaired, we will write down its carrying value on our consolidated balance sheet and book a non-cash impairment charge in our consolidated statement of operations. If, as a result of acquisitions or otherwise, the amount of intangible assets being amortized increases, so will our amortization charges in future periods.

Increasing scrutiny and changing expectations from governmental organizations, investors, clients and our colleagues with respect to our ESG-relatedsustainability-related practices and those of our clients may impose additional costs on us or expose us to new or additional risks

There is varied regulation and focus on ESGsustainability matters across different jurisdictions, and stakeholder views and priorities regarding these matters continue to evolve and sometimes diverge. The European Union’s Corporate Sustainability Reporting Directive and from other governmental organizations, and our investors, clients and employees, maintain interest in ESGsustainability issues such as environmental stewardship, climate change, and workforce development. How these various stakeholders evaluate and prioritize different ESGsustainability initiatives may shift over time in ways that are difficult to predict. We continue to evaluate existing, new and proposed governmental requirements, and to monitor, report and assess policies and practices that we believe will align with our client, investor and other third-party imposed ESG-relatedsustainability-related standards and expectations. For example, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESGsustainability matters, and their evolving methodologies and assessments may lead to negative investor sentiment, stock price fluctuations and the diversion of investment to other companies. If our ESGsustainability practices do not meet evolving rules and regulations or investor or other stakeholder expectations and standards (or if we are viewed in a negative light based on positions we do or do not take or work we do or do not perform for certain clients or industries), then our reputation, our ability to attract or retain employee consultants and non-employee experts, and our ability to attract new engagements and clients could be negatively impacted, as could our attractiveness as an investment, service provider, business partner or acquirer. Additionally, the relative importance that different stakeholders place on various ESGsustainability initiatives may conflict, making it difficult to satisfy all stakeholder expectations. Similarly, our failure or perceived failure to pursue or fulfill our current or future goals, targets and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could also have similar negative impacts.

We may experience significant fluctuations in our revenues and results of operations from one quarter to the next. If our revenues or net income in a quarter fall or falldrop below the expectations of securities analysts or investors, the market price of our common stock could fall significantly. Our results of operations in any quarter can fluctuate for many reasons, including:

We are required to prepare our consolidated financial statements in accordance with generally accepted accounting principles in the United States of America, which may change periodically. From time to time, we are required to adopt new or revised accounting standards issued by recognized authoritative bodies, including the Financial Accounting Standards Board and the Securities and Exchange Commission.SEC. A change in accounting standards or practices may adversely affect our reported financial results or the way we conduct our business. It may also require changes to the current accounting treatment of certain transactions and the way they are reported in our financial statements. Additionally, such a change in accounting standards or practices may require us to enhance our internal accounting systems and processes, as well as our internal control over financial reporting.

We utilize forgivable loans with some of our employees and non-employee experts, other than our executive officers, as a way to attract and retain them. A portion of these loans is collateralized. Defaults under these loans could have a material adverse effect on our consolidated statementsstatement of operations, financial condition and liquidity.

We derive a portion of our revenues from fixed-price contracts. These contracts are more common in our management consulting area, and would likely grow in number with expansion of that area. Fluctuations in the mix between time-and-material contracts, fixed-price contracts and arrangements with fees tied to performance-based criteria may result in fluctuations of revenue and results of operations. In addition, if we fail to accurately estimate third-party vendor expenses and the resources required for a fixed-price project or fail to satisfy our contractual obligations in a manner consistent with the project budget, we might generate a smaller profit or incur a loss on the project. Revenue generated from fixed-price contracts was approximately 18%17% of our total revenues for the year ended DecemberJanuary 28,3, 2024.2026.

Competition from other litigation, regulatory, financial, technology and management consulting firms could hurt our business

The market for litigation, regulatory, financial, and management consulting services is intensely competitive, highly fragmented, and subject to rapid change. We may be unable to compete successfully with our existing competitors or with any new competitors. In general, there are few barriers to entry into our markets, and we expect to face additional competition from new entrants into theour economicbusiness. New technologies, such as AI and managementmachine consultinglearning, industries.continue Into the litigation, regulatory,evolve and financialas consultinga markets,result risks continue to be unknown or uncertain. There is no assurance that we competecan primarilysuccessfully withdevelop and deploy AI or other economictechnologies in our business or such technologies will improve and financialenhance consultingour firmsservices, and individual academics. In the management consulting market, we compete primarily with other business and management consulting firms, specializedoperations or industry-specific consulting firms, the consulting practices of large accounting firms, and the internal professional resources of existing and potential clients.profitability. Many of our competitorscompetitors, including possible new entrants, have national or internationalmay reputations, as well ashave significantly greater personnel, financial, managerial, technical, and marketing resources than we do, which could enhance their ability to respond more quickly to technological changes,changes (including the adoption of AI), finance acquisitions, and fund internal growth. Some of our competitors also have a significantly broader geographic presence and significantly more resources than we do.

We conduct our business in the Americas, Europe, and Australia, and the global scope of our business exposes us to risk of fluctuations in foreign currency markets. Specifically, our results of operations are subject to fluctuations primarily in the British Pound and Euro against the U.S. Dollar as well as the Euro against the British Pound. The fluctuation in foreign currency markets can both increase and decrease our overall revenue and expenses for any fiscal period, and therefore has a resulting negative impact on our reported results of operations and on our ability to predict our future results and earnings accurately. Additionally, global economic events have caused and may continue to cause significant volatility in currency exchange rate fluctuations. Revenue generated from our U.K.-based operations was approximately 13% (which includes currency exchange effects) of our total revenues for the year ended DecemberJanuary 28,3, 2024.2026. We currently do not hedge our exposure to current foreign currency exchange risks by engaging in foreign exchange hedging transactions, though we may do so in the future.

We rely on our cash and cash equivalents, cash flows from operations and borrowings under our credit agreement to fund our short-term and anticipated long-term operating activities. We currently have a revolving credit facility with our bank for up to $250.0 million, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRAwe may elect to not increase the revolving credit facility to $250.0 million. The amounts available under this revolving credit facility are constrained by various financial covenants and reduced by certain letters of credit outstanding. Our loan agreement with the bank will mature on August 19, 2027. The degree to which we are leveraged could adversely affect our ability to obtain further financing for working capital, acquisitions or other purposes and could make us more vulnerable to industry downturns and competitive pressures. Our ability to secure short-term and long-term debt or equity financing in the future will also depend on several factors, including our future profitability, the levels of our debt and equity, restrictions under our existing or any future revolving credit facility, and the overall credit and equity market environments. There werewas no$34.0 million in borrowings outstanding under the revolving credit facility as of DecemberJanuary 28,3, 2024.2026.

Our Board of Directors has from time to time authorized repurchase programs of our outstanding common stock. Under these stock repurchase programs, we are authorized to repurchase, from time-to-time, shares of our outstanding common stock on the open market or in privately negotiated transactions. The timing and amount of stock repurchases are determined based upon our evaluation of market conditions and other factors. Any stock repurchase program may be suspended, modified or discontinued at any time, and we have no obligation to repurchase any amount of our common stock under any program. Repurchases pursuant to our stock repurchase programs could affect the market price of our common stock and increase its volatility. Any termination of our stock repurchase programs could cause a decrease in the market price of our common stock, and the existence of a stock repurchase program could cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity and trading volumes of our common stock. There can be no assurance that any stock repurchases under these programs will enhance stockholdershareholder value because the market price of our common stock may decline below the levels at which those repurchases were made. Although our stock repurchase programs are intended to enhance long-term stockholdershareholder value, short-term fluctuations in the market price of our common stock could reduce the programs' effectiveness.

Our costs of services include the salaries, bonuses, share-based compensation expense, forgivable loan amortization, and benefits of our employee consultants. Our bonus program awards discretionary bonuses based on our revenues and profitability and individual performance. Costs of services also include out-of-pocket and other third-party vendor expenses, and the salaries of support staff whose time is billed directly to clients, such as librarians, editors, and programmers, as well as the amounts billed to us by our outside consultants for services rendered while completing a project. Costs of services does not include depreciation and amortization. Selling, general and administrative expenses include salaries, bonuses, share-based compensation expense, and benefits of our administrative and support staff, feescommissions to non-employee experts for generating new business, office rent, marketing, and other operating costs.

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").America. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets and liabilities, as well as related disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates are monitored and analyzed by management for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if our assumptions based on past experience or our other assumptions do not turn out to be substantially accurate.

Deferred Compensation. We account for performance-based and service-based cash awards using an accrual method where changes in estimates or the forgiveness of the principal amount of loans are accountedrecorded foras prospectivelycompensation expense over the remaining service period. To the extent the terms of an award attribute all or a portion of the expected future benefits to a period of service greater than one year, the cost of those benefits is accrued over the employee's or non-employee's requisite service period in a systematic and rational manner.

The requisite service period typically ranges from two to seveneight years starting with the employee's employment date or non-employee's affiliation date. For an employee or non-employee consultant currently affiliated with us, the requisite service period generally begins at the start of the award's measurement period.period and when compliance is met with certain contractual requirements. A recipient of such an award is expected to be employed by or affiliated with us for the entire measurement period. If the recipient's employment or affiliation with us terminates during the measurement period, the amount paid will be determined in accordance with the recipient's specific contract provisions.

The terms of award agreements may include the achievement of minimum required financial targets over the award's measurement period. These financial targets may include a measure of revenue generation, profitability, or both. The amount of the liability of the award agreements is estimated based on internally generated financial projections.projections or sourced revenue. The process of projecting these financial targets over the measurement period is highly subjective and requires significant judgment and estimates. There can be no assurance that the estimates and assumptions used in preparing these projections will prove to be accurate.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in several different tax jurisdictions. We are periodically reviewed by domestic and foreign tax authorities. These reviews include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. We account for uncertainties in income tax positions in accordance with Topic 740, Income Taxes ("ASC Topic 740").Taxes. The number of years with open tax audits varies depending on the tax jurisdiction.

CRA adopted Accounting Standards Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07") during fiscal 2024 and ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09") during fiscal 2025. Please refer to the section captioned "Recent Accounting Standards" in Note 1 of our Notes to Consolidated Financial Statements contained in this Form 10-K.

Our fiscal year end is the Saturday nearest December 31 of each year. Our fiscal years periodically contain 53 weeks rather than 52 weeks. Fiscal 20242025 was a 53-week year, and fiscal 20232024 werewas botha 52-week years.year.

Revenues. Revenues increased by $63.4$64.2 million, or 10.2%,9.3%, to $751.6 million for fiscal 2025 from $687.4 million for fiscal 2024 from $624.0 million for fiscal 2023.2024. Utilization increased to 77% for fiscal 2025 from 75% for fiscal 2024 from 70% for fiscal 2023,2024, while consultant headcount decreasedincreased by 5813 consultants during fiscal 2024.2025. Billable hours remainedincreased relativelyby flat6.0% for fiscal 20242025 when compared to fiscal 2023.2024.

Overall, revenues outside of the U.S. decreasedincreased to 19%20% of net revenues for fiscal 20242025 from 21%19% for fiscal 2023.2024. Revenues derived from fixed-price engagements remaineddecreased atto 18%17% of net revenues for fiscal 20242025 from 18% for fiscal 2023.2024. Revenues derived from time-and-materials engagements remainedincreased unchangedto at 82%83% of net revenues for fiscal 20242025 from 82% for fiscal 2023.2024. The percentages of revenue derived from fixed-price engagements depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service engagements.

Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $40.1$39.4 million, or 9.1%,8.2%, to $519.3 million for fiscal 2025 from $479.9 million for fiscal 2024 from $439.8 million for fiscal 2023.2024. The increase in costs of services was due primarily to an increase of $33.5$35.8 million in employee compensation and fringe benefit costs, an increase in forgivable loan amortization of $4.6 million, and an increase of $2.3$6.3 million of client reimbursable indirect project expenses in fiscal 20242025 compared to fiscal 2023.2024. These increases were partially offset by a decrease in forgivable loan amortization of $0.2$2.6 million and a decrease of $0.1 million in expense related to contingentmiscellaneous considerationand other expenses in fiscal 20242025 compared to fiscal 2023.2024. As a percentage of net revenue, costs of services decreased to 69.8%69.1% for fiscal 20242025 as compared to 70.5%69.8% for fiscal 2023.2024.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $10.0$9.9 million, or 8.6%,7.9%, to $135.0 million for fiscal 2025 from $125.1 million for fiscal 2024 from $115.1 million for fiscal 2023.2024. This increase was due primarily to a $4.6$3.5 million increase in legal and professional services, a $2.4 million increase in employee compensation and fringe benefit costs, a $2.0 million increase in legal and professional services, a $1.6$1.5 million increase in rent expense, a $1.5 million increase in travel and entertainment expenses, a $1.1 million increase in other operating expenses, and a $0.8 million increase in software subscription and data services, a $0.7 million increase in commissions to our non-employee experts, and $0.3 million increase in travel and entertainment expenses.services. These increases were partially offset by a $0.7$0.9 million decrease in othercommissions operatingto expenses.our non-employee experts.

Provision for Income Taxes. For fiscal 2024,2025, our income tax provision was $19.6$21.8 million and the effective tax rate ("ETR") was 29.6%,28.5%, as compared to a provision of $13.8$19.6 million and an effective tax rate of 26.4%29.6% for fiscal 2023.2024. The ETR for fiscal 20242025 was higherlower than the prior year primarily due to the releaseimpact of astate valuationlegislative allowance in a foreign jurisdictionchanges in the prior year that was nonrecurring in the current year,year and the impact of the jurisdictional mix of earnings, partially offset by increases in executive compensation and the remeasurement of our current-year deferred tax assets as a result of changes in taxstate laws, and a decrease in the tax benefit related to share-based compensation.apportionment. The ETR for fiscal 20242025 was higher than our combined federal and state statutory rate primarily due to non-deductible meals and entertainment, non-deductible compensation paid to executive officers, the remeasurement of current year deferred tax assets, partially offset by the tax benefit related to share-based compensation. The ETR for fiscal 20232024 was approximatelyhigher the same asthan our combined federal and state statutory rate and included offsetting items stemming fromfor the releasesame ofreason anoted valuationfor allowancefiscal in a foreign jurisdiction and tax benefits related to share-based compensation offset by non-deductible meals, entertainment and compensation paid to executive officers.2025.

We believe that current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As of DecemberJanuary 28,3, 2024,2026, we have $26.7$18.2 million of cash and cash equivalents and $196.0$162.2 million of borrowing capacity under our revolving credit facility.

At DecemberJanuary 28,3, 2024,2026, $0.4$2.9 million of our cash and cash equivalents were held within the U.S. We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility, to fund U.S. operations over the next 12 months without the need to repatriate funds from our foreign subsidiaries.

As of DecemberJanuary 28,3, 2024,2026, our cash accounts were concentrated at two financial institutions, which potentially exposes us to credit risks. The financial institutions are creditworthy and we have not experienced any losses related to such accounts. We do not believe that there is significant risk of non-performance by the financial institutions, and its cash on deposit is fully liquid. We continually monitor the credit ratings of these institutions.

Sources and Uses of Cash. During fiscal 2024,2025, net cash provided by operating activities was $49.7$22.4 million. Net income was $46.7$54.8 million for fiscal 2024.2025. Sources of cash for operating activities included a $23.2$15.9 million increase in accounts payable, accrued expenses,expenses and other liabilities and a $9.8$11.9 million increase in incentive cash awards payable. Offsetting these sources of cash for operating activities included, a $22.2$25.7 million increase in accounts receivable and unbilled receivables, a $14.9$20.5 million decrease in lease liabilities, a $11.8$53.4 million increase in forgivable loans, (comprised of $42.8$86.0 million of forgivable loan issuances, net of repayments, offset by $31.0$32.6 million of forgivable loan amortization), and a $10.4$4.4 million increasedecrease in prepaid expenses and other current assets.

Cash provided by operating activities included the non-cash items of right-of-use asset amortization of $15.1$15.4 million, depreciation and amortization expense of $11.7$14.1 million, share-based compensation expenses of $5.3$5.9 million, and offset by deferred income taxes of $2.9$1.7 million.

During fiscal 2024,2025, net cash used in investing activities was $18.1$3.9 million, which included capital expenditures primarily related to furniture,furniture and leasehold improvements, and funding investments related to our IT infrastructure.improvements.

We used $48.8$29.8 million of net cash in financing activities during fiscal 2024,2025, primarily as a result of $33.3$47.1 million of repurchases of our common stock, paymentnet borrowings of $12.3$34.0 million on our revolving credit facility, $13.8 million of cash dividends and dividend equivalents, and tax withholding payments reimbursed by restricted shares of $3.2$2.9 million.

We are a lessee under certain operating leases for office space and equipment, which have remaining lease terms between one and elevennine years, many of which include one or more options to extend the term for periods of up to five years for each option. The maturities of lease liabilities, as of DecemberJanuary 28,3, 2024,2026, related to office space and equipment are discussed in Note 4 in our Notes to Consolidated Financial Statements. We have no additional significant operating leases we have committed to that have not yet commenced.

Certain of our operating leases have terms that impose asset retirement obligations due to office modifications or the periodic redecoration of the premises, which are included in accrued expenses and deferred compensation and other non-current liabilities in our consolidated balance sheetssheet and are recorded at a value based on their estimated discounted cash flows. At DecemberJanuary 28,3, 2024,2026, we expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months of $0.1$0.2 million. The remainder of our asset retirement obligations and redecoration obligations are approximately $3.1$3.0 million and are expected to be settled between fiscal 20262027 and fiscal 2035 when the underlying leases terminate. We expect to satisfy these lease and related obligations, as they become due, from cash generated from operations.

CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides usCRA with a $250.0 million revolving credit facility, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million. The revolving credit facility includes a $25.0 million sublimit for the issuance of letters of credit.

Under the Credit Agreement, we must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1.0 and a minimum consolidated interest coverage ratio.ratio of 2.5 to 1.0. The primary non-financial covenants include, but are not limited to, restrictions on our ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including our failure to pay principal, interest or fees, or upon the breach of any covenant. As of DecemberJanuary 28,3, 2024,2026, we were in compliance with the covenants of the Credit Agreement.

There werewas no$34.0 million in borrowings outstanding under the revolving credit facility as of DecemberJanuary 28,3, 2024.2026. As of DecemberJanuary 28,3, 2024,2026, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $4.0$3.8 million. CRA has chosen to classify the revolving credit facility as a current liability in its consolidated balance sheet, as CRA has the intent to repay the amount within 12 months after the balance sheet date.

In order to attract and retain highly skilled professionals, we may issue forgivable loans or term loans to employees and non-employee experts. A portion of these loans is collateralized by key person life insurance. The forgivable loans have terms that are generally between two and sixeight years. The principal amount of forgivable loans and accrued interest is forgiven by us over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with us and complies with certain contractual requirements. The forgiveness of the principal amount of the loans is recorded as compensation over the service period, which is consistent with the term of the loans.

Our Amended and Restated 2006 Equity Incentive Plan, as amended (the "2006 Equity Plan"), authorizes the grant of a variety of incentive and performance equity awards to our directors, employees and non-employee experts, including stock options, shares of restricted stock, restricted stock units, and other equity awards.

Our long-term incentive program,program orLTIP "LTIP,"serves as a framework for equity grants made under our 2006 equityEquity incentive planPlan to our senior corporate leaders, practice leaders, and key revenue generators. The equity awards granted under the LTIP include stock options, time-vesting restricted stock units, and performance-vesting restricted stock units.

Our LTIP also allows us to grant service and performance-based cash awards in lieu of, or in addition to, equity awards to our senior corporate leaders, practice leaders, and key revenue generators. The compensation committee of our Board of Directors is responsible for approving all cash and equity awards under the LTIP. Under our cash incentive plan, we expect to pay LTIP cash awards of approximately $10.1$12.0 million over the next twelve months and $22.8$26.7 million between fiscal 20262027 and fiscal 2029.2030. We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings on our revolving credit facility.

In February 20252026 and February 2024,2025, our Board of Directors authorized an expansion to our existing share repurchase program, authorizing the purchase of an additional $45.0$55.0 million and $35.0$45.0 million, respectively, of our common stock. The program has no expiration date. We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.

During fiscal 2025, fiscal 2024, fiscal 2023, and fiscal 2022,2023, we repurchased and retired 206,379252,205 shares, 296,158206,379 shares, and 319,534296,158 shares, respectively, under our share repurchase program at an average price per share of $186.95, $161.59, $106.08, and $86.47,$106.08, respectively. We had approximately $13.1$10.9 million and $58.1$65.9 million available for future repurchases under our share repurchase program as of DecemberJanuary 28,3, 20242026 and February 20,26, 2025,2026, respectively. We plan to finance future repurchases with available cash, cash from future operations and funds from our revolving credit facility. We expect to continue to repurchase shares under our share repurchase program.

We anticipate paying regular quarterly dividends each year. These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings under our revolving credit facility. Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors. During the fiscal years ended January 3, 2026, December 28, 2024, and December 30, 2023, and December 31, 2022, we paid dividends of $13.8 million, $12.3 million, and $10.8 million, and $9.6 million, respectively.

There are many risks and uncertainties that can affect our future business, financial performance or results of operations. In addition to the other information set forth in this report, please review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 3, 2026. There have been no material changes to these risk factors during the fiscal quarter ended AprilJuly 4, 2026.

Our critical accounting policies involving the more significant estimates and judgments used in the preparation of our financial statements as of AprilJuly 4, 2026 remain unchanged from January 3, 2026. Please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 3, 2026, filed with the SEC on February 26, 2026 for details on these critical accounting policies.

Results of Operations—For the Fiscal Quarter and Fiscal Year-to-Date Period Ended AprilJuly 4, 2026, Compared to the Fiscal Quarter and Fiscal Year-to-Date Period Ended MarchJune 29,28, 2025

Fiscal Quarter Ended AprilJuly 4, 2026, Compared to the Fiscal Quarter Ended MarchJune 29,28, 2025

Revenues. Revenues increased by $19.1$23.9 million, or 10.5%,12.8%, to $201.0$210.8 million for the firstsecond quarter of fiscal 2026 from $181.9$186.9 million for the firstsecond quarter of fiscal 2025. Utilization increased to 77% for the firstsecond quarter of fiscal 2026 from 76% for the firstsecond quarter of fiscal 2025, while consultant headcount increased to 971968 at the end of the firstsecond quarter of fiscal 2026 from 947937 at the end of the firstsecond quarter of fiscal 2025.

Overall, revenues outside of the U.S. represented approximately 20%22% and 18%19% of net revenues for each of the firstsecond quartersquarter of fiscal 2026 and fiscal 2025, respectively. Revenues derived from fixed-price projects increased to 18%23% of net revenues for the firstsecond quarter of fiscal 2026 compared to 17%16% of net revenues for the firstsecond quarter of fiscal 2025. The percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $24.6$20.2 million, or 20.4%,15.7%, to $145.0$148.7 million for the firstsecond quarter of fiscal 2026 from $120.4$128.5 million for the firstsecond quarter of fiscal 2025. The increase in costs of services was due to an increase in employee and incentive compensation of $11.8$15.1 million, an increase in forgivable loan amortization, including performance award amortization of $10.2$4.7 million, and an increase in indirectclient projectreimbursable expenses of $2.6$0.5 million.million, partially offset by a decrease of $0.1 million in indirect project expenses. As a percentage of revenues, costs of services (exclusive of depreciation and amortization) increased to 72.2%70.6% for the firstsecond quarter of fiscal 2026 from 66.2%68.8% for the firstsecond quarter of fiscal 2025.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $2.0$0.2 million, or 6.2%,0.6%, to $34.5$35.3 million for the firstsecond quarter of fiscal 2026 from $32.5$35.1 million for the firstsecond quarter of fiscal 2025. Within this category of expenses, there was a $1.0$2.2 million increase in employee and incentive compensation,compensation and a $0.7$1.1 million increase in travelsoftware subscriptions and entertainment,data a $0.5 million increase in legal and professional service fees, a $0.3 million increase in rent expense, and a $0.3 million increase in miscellaneous and other fees,services, partially offset by a $0.8$1.9 million decrease in commissions to non-employee expertsexperts, a $0.7 million decrease in miscellaneous and other fees, and a $0.5 million decrease in travel and entertainment for the firstsecond quarter of fiscal 2026 as compared to the firstsecond quarter of fiscal 2025.

As a percentage of revenues, selling, general and administrative expenses decreased to 17.2%16.7% for the firstsecond quarter of fiscal 2026 from 17.9%18.8% for the firstsecond quarter of fiscal 2025. Commissions to our non-employee experts decreased to 1.5%1.3% of revenues for the firstsecond quarter of fiscal 2026 compared to 2.0%2.4% of revenues for the firstsecond quarter of fiscal 2025.

Provision for Income Taxes. The income tax provision was $6.3$6.6 million and the ETR was 36.0%32.9% for the firstsecond quarter of fiscal 2026 compared to $6.6$5.0 million and 27.0%29.2% for the firstsecond quarter of fiscal 2025. The ETR for the fiscal quarter ended AprilJuly 4, 2026 was higher than the fiscal quarter ended MarchJune 29,28, 2025 primarily due to an increase in nondeductible executive compensation, the recording of a valuation allowance in a foreign jurisdiction, and a decrease in tax benefit related to share-based compensation,compensation partially offset by a decreaseremeasurement of deferred tax assets related to achanges priorin yearcurrent-year taxstate reserve.apportionment. The ETR for the firstsecond quarters of fiscal 2026 and 2025 were both higher than the combined federal and state statutory tax rate primarily due to nondeductible executive compensation and nondeductible meals and entertainment expenses, partially offset by the tax benefit related to share-based compensation and the Foreign-Derived Deduction Eligible Income deduction. Specific to the current quarter, thean ETRadditional wasoffset also higher duerelates to the recordingremeasurement of adeferred valuationtax allowanceassets related to changes in acurrent-year foreignstate jurisdiction.apportionment.

Net Income. Net income decreasedincreased to $11.1$13.5 million for the firstsecond quarter of fiscal 2026 from $18.0$12.1 million for the firstsecond quarter of fiscal 2025. The net income per diluted share was $1.69$2.10 per share for the firstsecond quarter of fiscal 2026, compared to $2.62$1.79 for the firstsecond quarter of fiscal 2025. Weighted average diluted shares outstanding decreased by approximately 274,000346,000 shares to approximately 6,588,0006,407,000 shares for the firstsecond quarter of fiscal 2026 from approximately 6,862,0006,753,000 shares for the firstsecond quarter of fiscal 2025. The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since MarchJune 29,28, 2025, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units since MarchJune 29,28, 2025.

Fiscal QuarterYear-to-Date Period Ended AprilJuly 4, 2026

We believe that our current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As of AprilJuly 4, 2026, we had $32.5$21.4 million of cash and cash equivalents and $54.2$77.3 million of borrowing capacity under our revolving credit facility.

General. During the fiscal quarteryear-to-date period ended AprilJuly 4, 2026, cash and cash equivalents increased by $14.3$3.2 million. We completed the period with cash and cash equivalents of $32.5$21.4 million. The principal drivers of the increase in cash and cash equivalents were net borrowings of $158.0$185.0 million, offset by the payment of a significant portion of our fiscal 2025 performance bonuses in the first quarter of fiscal 2026, forgivable loan advances, repurchase of shares, and the payment of dividends.

At AprilJuly 4, 2026, $5.6$6.4 million of our cash and cash equivalents was held within the U.S. We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility to fund U.S. operations for the next 12 months without the need to repatriate funds from our foreign subsidiaries.

Sources and Uses of Cash. During the fiscal quarteryear-to-date period ended AprilJuly 4, 2026, net cash used in operating activities was $113.9$118.3 million. Net income was $11.1$24.6 million for the fiscal quarteryear-to-date period ended AprilJuly 4, 2026. Uses of cash for operating activities included a decrease in accounts payable, accrued expenses, and other liabilities of $91.2$77.9 million, primarily due to the payment of a significant portion of our fiscal 2025 performance bonuses, an increase in forgivable loans for the period of $52.6$58.3 million which was primarily driven by $62.3$80.4 million of forgivable loan issuances, net of repayments, offset by $9.7$22.1 million of forgivable loan amortization, a decrease of $14.7 million in accounts receivable, and a $9.2 million decrease in lease liabilities. Partially offsetting these uses of cash was an increase of $27.0$38.3 million in unbilled receivables, aan $4.8increase of $6.4 million decrease in leaseincentive liabilities,cash awards payable, and a $4.3$1.4 million increase in prepaid expenses and other current assets, and other assets. Partially offsetting these uses of cash was a decrease of $41.7 million in accounts receivable and an increase of $3.2 million in incentive cash awards payable.

Non-cash items included right-of-use amortization of $3.7$7.4 million, depreciation and amortization expense of $3.4$6.7 million, share-based compensation expenses of $1.4$3.8 million, and unrealizeddeferred foreignincome currency remeasurement losses, nettaxes of $0.3$3.2 million.

During the fiscal quarteryear-to-date period ended AprilJuly 4, 2026, net cash used in investing activities was $2.6$4.3 million, which consisted of capital expenditures, primarily related to computer equipment.equipment, software and furniture.

During the fiscal quarteryear-to-date period ended AprilJuly 4, 2026, net cash provided by financing activities was $131.3$126.2 million, primarily as a result of net borrowings under the revolving credit facility of $158.0$185.0 million. Offsetting this increase in cash provided by financing activities were repurchases of common stock of $21.5$49.3 million, payment of cash dividends and dividend equivalents of $3.8$7.4 million, and tax withholding payments reimbursed by restricted shares on vesting of $1.4$2.1 million.

We are a lessee under certain operating leases for office space and equipment. Certain of our operating leases have terms that impose asset retirement obligations due to office modifications or the periodic redecoration of the premises, which are included in deferred compensation and other non-current liabilities on our condensed consolidated balance sheets and are recorded at a value based on their estimated discounted cash flows. At AprilJuly 4, 2026, we do not expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months of $0.2 million.months. The remainder of our asset retirement obligations and redecoration obligations are approximately $3.0 million and are expected to be paid between fiscal year 2026 and fiscal year 2035 when the underlying leases terminate or when the respective lease agreement requires redecoration. We expect to satisfy these lease and related obligations as they become due from cash generated from operations.

CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Existing Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Existing Credit Agreement provides CRA with a $250.0$300.0 million revolving credit facility, which may be decreased at CRA's option to $200.0$240.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0$300.0 million. The revolving credit facility includes a $25.0 million sublimit for the issuance of letters of credit. On May 4, 2026, the Credit Agreement was amended and restated to increase the capacity of the revolving credit facility by $50.0 million to $300.0 million. The expanded facility will continue to provide financial flexibility to support our continued growth and working capital needs.

We may use the proceeds of the revolving credit loans under the Existing Credit Agreement for general corporate purposes and may repay any borrowings under the revolving credit facility at any time, but any borrowings must be repaid no later than August 19, 2027. Borrowings under the revolving credit facility bear interest at a rate per annum equal to one of the following rates, at our election, plus an applicable margin as described below: (i) in the case of borrowings in U.S. dollars by us, the Base Rate (as defined in the Existing Credit Agreement), (ii) in the case of borrowings in U.S. dollars, a rate based on Term SOFR (as defined in the Existing Credit Agreement) for the applicable interest period, (iii) in the case of borrowings in Euros, EURIBOR (as defined in the Existing Credit Agreement) for the applicable interest period, (iv) in the case of borrowings in Pounds Sterling, a daily rate based on SONIA (as defined in the Existing Credit Agreement), (v) in the case of borrowings in Canadian Dollars, Term CORRA (as defined in the Existing Credit Agreement) for the applicable interest period, (vi) in the case of borrowings in Swiss Francs, a daily rate based on SARON (as defined in the Existing Credit Agreement), or (vii) in the case of borrowings in any other Alternate Currency (as defined in the Existing Credit Agreement), the relevant daily or term rate determined as provided in the Existing Credit Agreement. The applicable margin on borrowings based on the Base Rate varies within a range of 0.25% to 1.00% depending on our consolidated net leverage ratio, and the applicable margin on borrowings based on any of the other rates described above varies within a range of 1.25% to 2.00% depending on our consolidated net leverage ratio.

Under the Existing Credit Agreement, we must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1.0 and a minimum consolidated interest coverage ratio of 2.5 to 1.0. The primary non-financial covenants include, but are not limited to, restrictions on our ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including our failure to pay principal, interest or fees, or upon the breach of any covenant. As of AprilJuly 4, 2026, we were in compliance with the covenants of the Existing Credit Agreement.

There were $192.0$219.0 million and $34.0 million in borrowings outstanding under the revolving credit facility as of AprilJuly 4, 2026 and January 3, 2026, respectively. The amounts available under the revolving credit facility were reduced by certain letters of credit outstanding, which amounted to $3.7 million and $3.8 million, as of both AprilJuly 4, 2026 and January 3, 2026.2026, CRArespectively. hasWe have chosen to classify the revolver as a current liability in its condensed consolidated balance sheet, as CRAwe hashave the intent to repay the amount within 12 months after the balance sheet date.

During the fiscal quarter and fiscal year-to-date period ended AprilJuly 4, 2026, we repurchased and retired 116,040192,945 and 308,985 shares under our share repurchase program at an average price per share of $184.96.$144.29 and $159.56, respectively. During the fiscal quarter and the fiscal year-to-date period ended June 28, 2025, we repurchased and retired 230,673 shares under our share repurchase program at an average price per share of $187.06. We had approximately $44.5$16.6 million available for future repurchases under our share repurchase program as of AprilJuly 4, 2026. We plan to finance future repurchases with available cash, cash from future operations, and borrowings available under our revolving credit facility. We expect to continue to repurchase shares under our share repurchase program.

We anticipate paying regular quarterly dividends each year. These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings available under our revolving credit facility. Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors. During the fiscal quartersquarter and fiscal year-to-date period ended AprilJuly 4, 2026 we paid dividends and Marchdividend 29,equivalents of $3.6 million and $7.4 million, respectively. During the fiscal quarter and fiscal year-to-date period ended June 28, 2025, we paid dividends and dividend equivalents of $3.8$3.4 million and $3.5$6.9 million, respectively.