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

All of the following risksrisks, uncertainties and factors could materially and adversely affect our business, prospects, financial condition andcondition, results of operations.operations, cash flows and liquidity. In addition to the risksrisks, uncertainties and factors discussed below and elsewhere in this Annual Report, other risksrisks, uncertainties and uncertaintiesfactors not currently known to us or that we currently consider immaterial could, in the future, materially and adversely affect our business, prospects, financial conditioncondition, financial results, cash flows and financial results.liquidity. Some of the factors,risks, eventsuncertainties and contingenciesfactors discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors,risks, eventsuncertainties or contingenciesfactors have occurred in the past, and instead reflect our beliefs and opinions as to the factors,risks, events,uncertainties orand contingenciesfactors that could materially and adversely affect us in the future.

Different U.S. and/or international factors outside of our control could affect demand for a segment’s practices and our services. These include: (i) fluctuations in U.S. and/or global economies, including economic downturns or recessions and the strength and rate of any general economic recoveries; (ii) the U.S. or global financial markets and the availability, costs, and terms of credit and credit modifications, including interest rate levels and inflationary pressures; (iii) level of leverage incurred by countries or businesses; (iv) M&A activity; (v) frequency and complexity of significant commercial litigation; (vi) overexpansion by businesses causing financial difficulties; (vii) business and management crises, including the occurrence of alleged fraudulent or illegal activities and practices; (viii) new and complex laws and regulations, repeals of existing laws and regulations or changes of enforcement of laws, rules and regulations, including antitrust/competition reviews of proposed M&A transactions; (ix) other economic, geographic or political factors, including wars and other geopolitical conflicts; (x) widespread public health crises, including epidemics and pandemics and government restrictions or regulations enacted in response thereto, or employees’ refusal to adhere to such restrictions; and (xi) general business or other conditions in the U.S. and other jurisdictions in which we conduct business or our employee population resides.

The results of different segments and practices may be affected differently by the above factors. Certain of our practices, particularly our restructuring practice, tend to experience their highest demand during periods when market and/or industry conditions are less favorable for many businesses. For example, in periods of limited credit availability, reduced M&A activity and/or declining business and/or consumer spending, while not always the case, there may be increased restructuring opportunities that will cause our restructuring practice to experience high demand. On the other hand, those same factors may cause one or more of our other segments and practices, such as our antitrustM&A-related &“second competitionrequest” practiceservices in Economic Consulting,Technology, to experience reduced demand. The positive effects of certain events or factors on certain segments and practices may not be sufficient to overcome the negative effects of those same or other events or factors on other parts of our business. In addition, our mix of practice offerings adds complexity to the task of predicting revenues and results of operations and managing our staffing levels and expenditures across changing business cycles and economic environments.

FLC — The settlement of litigation; less frequent instances of significant mismanagement, fraud, wrongdoing or other business problems that could result in fewer or less complex business engagements; fewer and less complex legal disputes; fewer class action suits; the timing of the completion of engagements; less government regulation, less government enforcement activity, and fewer regulatory investigations; and the timing of government investigations and litigation.

Technology — The settlement of litigation; a decline in volume and complexity of litigation proceedings and governmental investigations; a decline in volume and the timing of M&A activities and reduced or less aggressive enforcement of antitrust and competition regulations; the more rapid and successful integration of new and emerging technologies in client offerings, such as artificial intelligence (“AI”) or machine learning, by competitors, or the availability and engagement of independent consultants, which this segment, more than our other segments, relies on for staffing e-discovery and certain other types of client engagements.

Our segments may face risks of fee non-payment, and clients may seek to renegotiate existing fees and contract arrangements,arrangements and may not accept billable rate or price increases, which could result in loss of engagements, fee write-offs, reduced revenues and less profitable business.

Our segments and practices could suffer competitive, reputational and business harm or increased liability or legal or regulatory action arising from the rapid introduction, integration, deployment, evolution and use of new technologies, including AI and machine learning.AI.

Our services are extremely complicated and differ materially among our segment and practice offerings. As a result, theThe benefits and risks of adopting and implementing new and emerging technologies, such as AI and machine learning in their many forms,AI, necessitates, in most cases, our review and analysis of such technology and its risks and benefits on a service-by-service basis. The need for complex analysis could result in significant delays adopting AI and other technologies, which could adversely impact our competitive position; ability to market services; win new engagements; provide state of the artstate-of-the-art services to clients; and attract, hire and retain members of our workforce, as compared to early adopters of such technologies. Furthermore, we may not be successful in our AI or other technology-related initiatives. Moreover, AI algorithms and training methodologies may be flawed and datasets may be over-broad, insufficient or contain biased or inaccurate information. The adoption of new technologies, such as AI and machine learning,AI, may require the investment of significant capital, time and resources. Such investment could require the engagement of third-partiesthird parties or independent contractors and may interfere with the other duties of our management and employees. Leveraging AI capabilities for our internal functions and operations presents additional risks, costs and challenges, including those discussed in these risk factors. The development, adoption and use of AI technologies are still in the early stages and involve significant risks and uncertainties, which may expose us to legal, reputational and financial harm. In addition, AI and other technologies that are open source and available for no or low cost could result in low barriers to development and utilization, and additional competition from third parties, and the adoption and deployment of AI, machine learningAI and other new and emerging technologies by competitors more rapidly or successfully than we do could materially adversely affect our competitive position and financial results.

New technologies, such as AI and machine learning,AI, continue to evolve and as a resultresult, risks continue to be unknown or uncertain. We are increasingly applying AI-based technologies to our solutions and services, to how we deliver work for our clients, and in our own internal operations. As these technologies evolve, some non-expert services and tasks currently performed by our professionals have been and will continue to be replaced by automation, including AI-enabled solutions, which could lead to reduced demand for our services and/or adversely affect the utilization rate of our professionals, if demand for those services is not replaced by demand for new solutions and services or if the pace and level of spending on new solutions or services are not sufficient to make up any shortfall. If we are unable to introduce or if our clients do not accept new pricing or commercial models that reflect the value of these AI-enabled solutions, our results of operations may be adversely affected. There is no assurance that (i) we can successfully developdevelop, integrate and deploy AI or other technologies in our business, (ii) such technologies will improve and enhance our services, operations or profitability, (iii) clients will accept the incorporation of such technology in our services, (iv) we can successfully market the use of these technologies to prospective clients, (viv) we can hire and retain staff with the required specialized knowledge and skills to utilize these technologies, (vi) new cybersecurityor andheightened cybersecurity, data protection or other threatsoperational and incidentsrisks will not arise, (vii) we can identify, mitigate or recover from cybersecurity incidents or other adverse events that occur, (viii) we can protect and maintain the privacy of our employees and safeguard confidential and proprietary information, (ix) governmentalnew regulationlaws, regulations or regulatory interpretations will not be adoptedadopted, andor whatthat compliance with any such requirements will be,not be burdensome, (x) material additional monetary and time expenditures will not be required, (xi) we can pass on costs of such technologies to clients, (xii) weAI can integrateand other emerging technologies wewill usebe compatible with AI,our existing systems and technologies, or (xiii) AI and machine learning and other new technologies will not result in significant legal and other liabilities, challenges, regulatoryregulatory, reputational or operational issues, and ethical or other dilemmas. The above risks and potential effects could result in material adverse consequences to our operations, reputation, client relationships, ability to market our services, and financial results.

Our Technology segment faces certain risks, including (i) industry consolidation and a highly competitive environment, (ii) downward pricing pressure, (iii) data breach,breaches, (iv) technology changes and obsolescence, including AI and machine learning, and (v) failure to protect intellectual property (“IP”) used by the segment, which individually or together could cause the financial results and prospects of this segment and the Company to decline.

The success of our Technology segment and its ability to compete depends significantly on our ability to safeguard client data. There is no assurance that we will not incur losses related to cyber incidents or malicious data breachbreaches from external or internal sources in the future.

Maintaining the confidentiality of proprietary, confidential and trade secret information is critical to maintaining the trust of our clients, the success of our segments and the reputation of our company. In addition, our Technology segment is dependent on providing secure storage of, and access to, client information as a service. Our systems, which include those of third parties on whom we rely, may fail or not operate properly or become disabled as a result of network security failures. We are subject to and routinely face cyber-based attacks and attempts by hackers and similar unauthorized users to gain access to or corrupt our information technology systems. Such attacks, if successful, could harm our overall professional reputation, disrupt our business operations, cause us to incur unanticipated losses or expenses, and result in unauthorized disclosures of confidential or proprietary information. We expect to continue to face such attempts. Although we seek to prevent, detect and investigate these network security incidents and have taken steps to mitigate the likelihood of network security breaches, cyber-based attacks and other cyber events are evolving, unpredictable and increasing in sophistication, including through the use of increasingly sophisticated and evolving AI technologies, and there can be no assurance that attacks by unauthorized users will not be attempted in the future or that our security measures will be effective. If we fail to effectively protect the confidentiality of our clients’ or our own IP and proprietary information from disclosure or misuse by our employees, contractors or third parties, the financial results of the affected segment or the Company and our reputation would be adversely affected. There is no certainty that we or third parties on whom we rely,rely can maintain the confidentiality, prevent the misuse of our own or our clients’ information or mitigate related damages. As of December 31, 2024,2025, we are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected us, including our business strategy, results of operations or financial condition, or that we believe are reasonably likely to have such an effect over the long term.

Our operations involve financial and business risks that differ among the U.S. and the different foreign jurisdictions in which we operate including: (i) cultural and language differences; (ii) various levels of FTI Consulting “brand” recognition; (iii) different employment laws and rules, employment or service contracts, compensation methods, and social and cultural factors that could result in employee turnover, lower utilization rates, higher costs and cyclical fluctuations in utilization that could adversely affect financial and operating results; (iv) foreign currency disruptions and currency fluctuations between the U.S. dollar and foreign currencies that could adversely affect financial and operating results; (v) differing legal and regulatory requirements and other barriers to conducting business; (vi) difficulties resolving the collection of receivables when legal proceedings are necessary; (vii) difficulties in managing our non-U.S. operations, including client relationships, in certain locations; (viii) disparate systems, policies, procedures and processes; (ix) failure to comply with the FCPAForeign Corrupt Practices Act and anti-bribery laws of other jurisdictions; (x) higher operating costs; (xi) longer sales and/or collections cycles; (xii) potential restrictions or adverse tax consequences resulting from the repatriation of foreign earnings, such as trapped foreign losses and importation or withholding taxes; (xiii) different or less stable political and/or economic environments; (xiv) wars and other geopolitical conflicts; (xv) conflicts between and among the U.S. and countries in which we conduct business, including those arising from trade disputes or disruptions, the termination or suspension of treaties, or boycotts; (xvi) civil disturbances or other catastrophic events that reduce business activity; (xvii) political interference with our ability to conduct business in the applicable jurisdiction; (xviii) impact of public health crises, including varying governmental responses and requirements, client impacts and travel restrictions; (xix) failure to achieve or maintain a diverse workforce or otherwise meet evolving governmental or client-related standards and requirements pertaining to ESG-relatedsustainability and corporate responsibility-related issues; and (xx) physical risks associated with climate change, including rising temperatures, severe storms, energy disruptions, fires or wildfires, flooding and rising sea levels, among others.

We have a robust Code of Ethics and Business Conduct, Anti-Corruption Policy, Policy on Inside Information and Insider Trading, and other policies and procedures that are designed to educate and establish the standards of conduct that we expect from our executive officers, outside directors, employees, and independent consultants and contractors. These policies require strict compliance with U.S. and local laws and regulations applicable to our business operations, including those laws and regulations prohibiting improper payments to government officials. In addition, as a corporation whose securities are registered under the Securities Act and publicly traded on the NYSE, our executive officers, outside directors, employees and independent contractors are required to comply with the prohibitions against insider trading of our securities. In addition, we impose certain restrictions on the trading of securities of our clients. Nonetheless, we cannot assure our stakeholders that our policies, procedures and related training programs will ensure full compliance with all applicable legal requirements. Illegal or improper conduct by our executive officers, directors, employees, independent consultants or contractors, or others who are subject to our policies and procedures could damage our reputation in the U.S. and internationally, which could adversely affect our existing client relationships or adversely affect our ability to attract and retain new clients, or lead to litigation or governmental or regulatory proceedings in the U.S. or foreign jurisdictions, which could result in civil or criminal penalties, including substantial monetary awards, fines and penalties, as well as disgorgement of profits. We are also exposed to new and changing regulations related to climate change, both in the U.S. and internationally. The fast pace of changes to regulation in this area can pose compliance challenges, and we may face risks similar to those described above.

Changes to corporate income tax laws and rules and regulations and tax treaties in jurisdictions where we pay taxes that increase rates, eliminate or reduce deductions or affect the utility or value of deferred tax assets or liabilities could negatively affect our reported financial results and increase our cash tax payment obligations. For example, to the extent the expansion of Section 162(m) of the U.S. Internal Revenue Code, which will become effective for the Company’s year ending December 31, 2027, reduces the amount of tax deductions available to us, our income tax expense would increase, which would reduce our net income.

Due to the global nature of our business, we are exposed to a variety of physical risks relatedthat tomay be exacerbated by climate change, including extreme temperatures, severe storms, energy disruptions, fires or wildfires, floods and rising sea levels, among others, all of which are beyond our control. There ishas also been increased regulation as well as focus from governmental organizations, and our investors, clients and employees, as well as other stakeholders and the media (including social media), on environmental- and sustainability-related issues. Governments and regulators in the U.S. and around the world arehave increasinglybeen enacting or revising laws and regulations regarding climatethese change. In October 2023, California enacted legislation addressing the disclosure of greenhouse gas emissions, climate-related risks, environmental claims,issues and thetheir usepriorities or salerequirements ofmay voluntarynot carbonbe offsets. In January 2023, the EU enacted the Corporate Sustainability Reporting Directive, which will require sustainability reporting across a broad range of topics for both EU and non-EU companies. Numerous countries have also begun proposing climate-reporting frameworks aligned with the International Sustainability Standards Board standards.reconcilable. The threats from environmental events could adversely impact our ability to maintain business continuity, and could impair access to our leased office space in affected geographies and the integrity of our information technology systems. Further, compliance with the disparate climate-related frameworks, including requirements related to greenhouse gas emissions and climate change by federal, state, local and foreign legislatures and governmental agencies could cause us to incur operational and other costs to comply, and penalties if we fail to do so.

Differing (and often conflicting) perceptions, attitudes or legal pronouncements regarding the consideration of social-related characteristics based on race, gender, sexual orientation and other attributes are complicating our ability to attract and maintain an inclusive workforce and comply with disparate U.S. federal and state and foreign legislative and court decisions. Some U.S. states, recent U.S. court decisions, the federal government and third-party activists are restricting or otherwise attempting to influence how we make and manage recruiting, hiring and other employment decisions. This contrasts with regulations being adopted by certain foreign jurisdictions in which we operate, the demands of many of our investors and other stakeholders, as well as third-party proxy and other advisory firms who provide information to investors on corporate governance and related matters, who encourage or demand heightened consideration of diversity-related factors, including the reporting of characteristics of our employee populations, as well as reporting of our recruitment, hiring and other employment processes. Consequently, our employment processes, human capital management, risk management and reporting functions have become more complicated. Any failure to comply with U.S. federal and state and international laws and regulations or court decisions, or to meet the evolving and disparate expectations of our investors, other stakeholders and interested parties, and the media (including social media), could result in legal or regulatory proceedings against us, increased adverse public scrutiny, client dissatisfaction, reputational harm, employee disenfranchisement, increased employee turnover and other challenges in retaining, recruiting and hiring employees, which may give rise to damages or penalties, and materially adversely affect our business, financial results and stock performance.

We deliver sophisticated professional services to our clients. Our success and future growth isare dependent, in large part, on our ability to keep our supply of skills and human resources in balance with client demand around the world. To attract and retain clients, we need to demonstrate professional acumen and build trust and strong relationships. Our professionals have highly specialized skills. They also develop strong bonds with the clients they serve, which is a critical element in obtaining and maintaining client engagements. Our continued success depends upon our ability to attract and retain professionals who have expertise, a good reputationreputations and client relationships critical to maintaining and developing our business. We face intense competition in recruiting and retaining highly qualified professionals to drive our organic growth and support expansion of our services and geographic footprint. We incur significant expenses, time and resources to train, integrate and develop our professionals. We experience attrition of highly qualified professionals in the normal course of our business. We cannot assure that we will be able to attract or retain any particular qualified professionals or replace those that choose to leave us, or maintain or expand our business. If we are unable to successfully integrate, motivate, retain or replace qualified professionals, our ability to continue to secure or perform work may suffer. Competition and third-party recruiting efforts targeting professionals with expertise relevant to our business have accelerated and have caused our costs of retaining and hiring qualified professionals to increase. That is a trend that we see continuing and that has contributed to and in the future is likely to continue to contribute to increased costs of operations and, in some cases, lower operating margins. In addition, the departure of one professional may lead to the departure of other professionals who have worked together here and desire to continue to work together elsewhere.

Despite fixed terms or renewal provisions, we face retention issues during and at the end of the terms of those agreements and large compensation expenses to secure extensions. There is no assurance we will be able to enter into new or extend existing employment agreements with professionals subject to written employment agreements. We monitor contract expirations carefully to commence dialogues with professionals regarding their employment in advance of the actual contract expiration dates. Our goal is to renew employment agreements when advisable and to stagger the expirations of the agreements if possible. Because of the concentration of contract expirations in certain years, we may experience high turnover or other adverse consequences, such as higher costs, loss of clients and engagements or difficulty in staffing engagements, if we are unable to renegotiate employment agreements or the costs of retaining qualified professionals become too high. The implementation of new compensation arrangements may result in the concentration of potential turnover in future years.

In some cases, however, we have been, and in the future expect that we will continue to be, unsuccessful in reaching agreement on compensation or other key employment terms with certain highly qualified professionals who then choose to leave the Company. Such professionals will often pursue other business and professional opportunities and may compete with the Company for clients and/or employees. These situations have increased, and we expect that they will continue intoin the future to increase, our costs to retain other professionals at the Company and impact our ability to retain existing clients and win new engagements.

From time to time we may decide that we cannot or should not accept an engagement from an existing or prospective client or represent multiple clients in connection with the same or competitive engagements. In addition, uponon occasion, we may decide that we should or must resign from a client engagement. Such decisions may negatively impact our revenues, growth and financial results. While we follow internal practices to assess real and potential issues in the relationships between and among our clients, engagements, segments, practices and professionals, such concerns cannot always be avoided. For example, we generally will not represent parties adverse to each other in the same matter. Under U.S. federal bankruptcy rules, we generally may not represent both a debtor and its creditors in the same proceeding, and we are required to notify the U.S. Trustee of real or potential conflicts. Even if we begin a bankruptcy-related engagement, the U.S. Trustee could find that we no longer meet the disinterestedness standard because of real or potential changes in our status as a disinterested party and order us to resign, which could result in disgorgement of fees. Future acquisitions may require us to resign from a client engagement because of relationship issues that are not currently identifiable. In addition, businesses that we acquire or employees who join us may not be free to accept engagements they could have accepted prior to our acquisition or hire because of relationship issues.

Our competitors include large organizations, such as the global accounting firms and the large management and financial consulting companies that offer a broad range of consulting services; investment banking firms; IT consulting and software companies, which offer niche services that are the same or similar to services or products offered by one or more of our segments; and small firms and independent contractors that focus on specialized services. Some of our competitors have significantly more financial resources, a larger national or international presence, larger professional staffs and greater brand recognition than we do. Some have lower overhead and other costs and can compete through lower cost-servicecost service offerings.

Acquisitions also may involve a number of special financial, business and operational risks, such as: (i) difficulties in integrating diversediffering corporate cultures and management styles; (ii) disparate policies and practices; (iii) client relationship issues; (iv) decreased utilization during the integration process; (v) loss of key existing or acquired personnel; (vi) increased costs to improve or coordinate managerial, operational, financial and administrative systems; (vii) dilutive issuances of equity securities, including convertible debt securities, to finance acquisitions; (viii) the assumption of legal liabilities; (ix) future earn-out payments or other price adjustments; (x) potential future write-offs relating to the impairment of goodwill or other acquired intangible assets or the revaluation of assets; (xi) difficulty or inability to collect receivables; and (xii) undisclosed liabilities.

Our governance and management policies and practices will not mirror the policies and practices of an acquired company or its parent. In some cases, different management practices and policies may lead to workplace dissatisfaction on the part of professionals who join our Company.Company following an acquisition. Some professionals of an acquired company may choose not to join our Company or leave after joining us. Existing professionals may leave us as well. The loss of key professionals may harm our business and financial results and cause us not to realize the anticipated benefits of the acquisition.

Our senior securedunsecured bank revolving credit facility (“Credit Facility”), or our other indebtedness outstanding from time to time, contains or may contain operating covenants that may, subject to exceptions, limit our ability and the ability of our subsidiaries to, among other things: (i) create, incur or assume certain liens; (ii) make certain restricted payments, investments and loans; (iii) create, incur or assume additional indebtedness or guarantees; (iv) create restrictions on the payment of dividends or other distributions to us from our restricted subsidiaries; (v) engage in M&A transactions, consolidations, sale-leasebacks, joint ventures, and asset and security sales and dispositions; (vi) pay dividends or redeem or repurchase our capital stock; (vii) alter the business that we and our subsidiaries conduct; (viii) engage in certain transactions with affiliates; (ix) modify the terms of certain indebtedness; (x) prepay, redeem or purchase certain indebtedness; and (xi) make material changes to accounting and reporting practices.

Operating results below a certain level or other adverse factors, including a significant increase in interest rates, could result in us being unable to comply with certain covenants. IfAdditionally, failure to attain or maintain certain credit ratings could result in our being required to secure the Credit Facility by the assets of substantially all of our wholly-owned U.S. subsidiaries. rIf we violate any applicable covenants and are unable to obtain waivers, our agreements governing our indebtedness or other applicable agreement could be declared in default and could be accelerated, which could permit, in the case of secured debt, the lenders to foreclose on our assets securing the debt thereunder. If the indebtedness is accelerated, we may not be able to repay our debt or borrow sufficient funds to refinance it. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. If our debt is in default for any reason, our cash flows, financial results or financial condition could be materially and adversely affected. In addition, complying with these covenants may cause us to take actions that are not favorable to holders of our outstanding indebtedness and may make it more difficult for us to successfully execute our business strategy and compete against companies that are not subject to such restrictions.

Substantially all of our wholly-owned U.S. subsidiaries guarantee our obligations under our Credit Facility, and substantially all of their assets are pledged as collateral under the Credit Facility. Future wholly-owned U.S. subsidiaries, subject to certain exclusions, will be required to provide similar guarantees and asset pledges under the Credit Facility.guarantees. If we default on any guaranteed indebtedness, our U.S. subsidiaries that are guarantors could be required to make payments under their guarantees, and the lenders under our Credit Facility could foreclose on certain of our U.S. subsidiaries’ assets to satisfy unpaid obligations, which could materially adversely affect our business and financial results.

Our variable rate indebtedness will subjectsubjects us to interest rate risk, which could cause our annual debt service obligations to increase significantly.

Borrowings under our Credit Facility will be atbear variable rates of interest, including for U.S. Dollar borrowings at the Secured Overnight Financing Rate and, for borrowings in British Pound,Pounds, the Sterling Overnight Index Average, which expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our cash flows could be adversely affected. An increase in debt service obligations under our variable rate indebtedness could affect our ability to make payments required under the terms of the agreements governing our indebtedness or our other indebtedness outstanding from time to time.

FTI Consulting, Inc., including its consolidated subsidiaries (collectively, the “Company,” “we,” “our” or “FTI Consulting”) is a leading global business advisoryexpert firm dedicated to helpingfor organizations managefacing change, mitigate riskcrisis and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional.transformation. Individually, each of our segments and practices is staffed with experts recognized for the depth of their knowledge and a track record of making an impact. Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle, from proactive risk management to rapid response to unexpected events and dynamic environments.

Our Corporate Finance & Restructuring (“Corporate Finance”) segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, and other financing sources and creditor groups, asgovernments well asand other parties-in-interestinterested and governments.parties. We deliver a wide range of services centered around three core offerings: Transactions, Transformation & Strategy and Turnaround & Restructuring.

Our Forensic and Litigation Consulting (“FLC”) segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services across risk & investigations and disputes, supported by our data & analytics technology-enabled solutions, with a focus on highly regulated industries. Our services are centered around five core offerings: Construction, Projects & Assets and Environmental Solutions, Data & Analytics, Disputes,Dispute Advisory Services, Healthcare Risk Management & Advisory and Risk & Investigations, which includes our cybersecurity and Investigations.financial services-related offerings.

Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk managementmanagement, consultingartificial intelligence (“AI”) and data services. Our professionals help organizations better address risk as the growing volume and variety of enterprise and emerging data intersects with legal, regulatory and compliance needs. We deliver a wide range of expert and analytics-poweredAI-powered solutions driven by investigations, litigation, antitrust and competition, M&A, restructuring and compliance and risk through threefive core offeringsclient needs: CorporateBlockchain Legal& DepartmentDigital Consulting, E-discovery and Analytics Services and Expertise, andAssets, Information Governance, Privacy & SecuritySecurity, Services.Investigations, Litigation, and M&A, Antitrust and Competition.

Our Strategic Communications segment develops and executes communications strategies to help management teams, boards of directors, law firms, governments and regulators manage change and mitigate risk surrounding transformational and disruptive events, including crises, transactions, investigations, disputes, crises, regulation and legislation. We deliver a wide range of services centered around three core offerings: Corporate Reputation, Financial Communications and Public Affairs.

We derive substantially all of our revenues from providing professional services to both U.S. and international clients. Most of our services are rendered under time and expense contract arrangements, which require the client to pay us based on the number of hours worked at contractually agreed-upon rates. Under this arrangement, we typically bill our clients for reimbursable expenses, including those relating to travel, out-of-pocket expenses, outside consultants and other outside service costs. Certain contracts are rendered under fixed-fee arrangements, which require the client to pay a fixed-fee in exchange for a predetermined set of professional services. Fixed-fee arrangements may require certain clients to pay us a recurring retainer. Our contract arrangements may also contain success fees or performance-based arrangements in which our fees are based on the attainment of contractually defined objectives with our client. This type of success fee may supplement a time and expense or fixed-fee arrangement. Success fees and other contractual terms may cause variations in our revenues and operating results due to the timing of when achieving the performance-based criteria becomes probable. Seasonal factors, such as the timing of our employees’ and clients’ vacations and holidays, may impact the timing of our revenue recognition across our segments.

We define Segment Operating Income as a segment’s share of consolidated operating income. We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA, which is a non-GAAP financial measure. We define Adjusted Segment EBITDA as aSegment segment’sOperating share of consolidated operating incomeIncome before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects core operating performance and provides an indicator of the segment’s ability to generate cash. We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses.

(1)Excluded from non-GAAP financial measuresmeasures, including Adjusted EBITDA and Adjusted EPS.

Revenues for the year ended December 31, 20242025 increased $209.4$90.2 million, or 6.0%,2.4%, compared to the year ended December 31, 20232024, due to increasedhigher revenues in allour ofCorporate Finance, FLC and Strategic Communications segments, which was partially offset by lower revenues in our businessEconomic Consulting and Technology segments.

During the year ended December 31, 2024,2025, we recorded special charges of $8.2$25.3 million. The charges related to targeted headcount reductions in areas of each segment and region where we realigned our workforce with current business demand for our consulting services. AThe portionmajority of the special charges waswere paid during the year ended December 31, 20242025 and the remaining amounts will be paid in cash in the next 12three months.

Net income for the year ended December 31, 20242025 increaseddecreased $5.2$9.2 million, or 1.9%,3.3%, compared to the year ended December 31, 2023.2024. The increasedecrease in net income was primarily due to higher revenues,direct lowercosts, which includes the impact of an increase in variable compensation and forgivable loan amortization, as well as higher income taxestaxes, special charges and aninterest FXexpense. gainThe compared to an FX loss in the prior year. This increasedecrease was partially offset by higher directrevenues compensationand expenses, which includes the impact of a 4.5% increase in billable headcount, higherlower selling, general and administrative (“SG&A”) expenses, which includesinclude thelegal impactsettlement of a 6.2% increase in non-billable headcount, and an increase in bad debt and outside services expenses.gains.

Adjusted EBITDA for the year ended December 31, 20242025 decreasedincreased $21.1$59.9 million, or 5.0%,14.8%, compared to the year ended December 31, 2023.2024. Adjusted EBITDA Margin of 12.2% of revenues for the year ended December 31, 2025 compared to 10.9% of revenues for the year ended December 31, 2024 compared to 12.2% of revenues for the year ended December 31, 2023.2024. The decreaseincrease in Adjusted EBITDA was primarily due to anhigher revenues and lower SG&A expenses, which include legal settlement gains. The increase inwas partially offset by higher direct compensation expenses,costs, which includes the impact of a 4.5% increase in billable headcount, higher SG&Avariable expenses, which includes the impact of a 6.2% increase in non-billable headcount,compensation and anforgivable increaseloan in bad debt and outside services expenses, which was partially offset by higher revenues.amortization. Adjusted EBITDA for the yearyears ended December 31, 2025 and 2024 excludes the $25.3 million and $8.2 million special charge.charges, respectively.

EPS for the year ended December 31, 20242025 increased $0.10$0.43 to $7.81$8.24 compared to $7.71$7.81 for the year ended December 31, 2023.2024. The increase in EPS was primarily due to thelower higherweighted average shares outstanding, which was partially offset by a decrease in net incomeincome, as described above.

Adjusted EPS for the year ended December 31, 20242025 increased $0.28$0.84 to $7.99$8.83 compared to $7.71$7.99 for the year ended December 31, 2023.2024. Adjusted EPS for the yearyears ended December 31, 2025 and 2024 excludes the $25.3 million and $8.2 million special charge,charges, which increased Adjusted EPS by $0.18.$0.59 and $0.18, respectively.

Net cash provided by operating activities for the year ended December 31, 20242025 increaseddecreased $170.6$243.0 million to $395.1$152.1 million compared to $224.5$395.1 million for the year ended December 31, 2023.2024. The increasedecrease in net cash provided by operating activities was primarily due to anhigher increaseforgivable inloan cashissuances, collections,compensation and income tax payments, which was partially offset by higheran compensation, forgivable loan issuances, operating expenses and income tax payments as compared to the same periodincrease in thecash prior year.collections. Days sales outstanding (“DSO”) was 88 days at December 31, 2025 and 97 days at December 31, 2024 and 100 days at December 31, 2023. The decrease in DSO was primarily due to cash collections that outpaced the increase in revenues.2024.

Free Cash Flow was $360.2an inflow of $93.6 million and $174.9$360.2 million for the years ended December 31, 20242025 and 2023,2024, respectively. The increasedecrease in Free Cash Flow for the year ended December 31, 2024 was primarily due to higherlower net cash provided by operating activities, as described above, and a decrease inhigher net cash used for purchases of property and equipment.

A portion of net cash provided by operating activities was used to repurchase and retire 51,7175,264,916 shares of our common stock under our Repurchase Program for an average price per share of $197.53,$163.07, at a total cost of $10.2$858.6 millionmillion, excluding commissions, during the year ended December 31, 2024.2025. We had $450.4$491.8 million remaining under the Repurchase Program to repurchase additional shares as of December 31, 2024.2025.

The following table includes the net headcount additions (reductions) by segment and in total for the year ended December 31, 2024. The net additions include targeted reductions in areas of each segment described in the “Special Charges” section above2025:

Unallocated corporate expenses increaseddecreased $22.2$19.8 million, or 17.7%,13.4%, to $147.6$127.8 million compared to $125.4$147.6 million for the year ended December 31, 2023. The increase was2024, primarily due to investments related to artificial intelligence (“AI”) capabilities, higher compensation expenses, largely related to headcount growth, and an increase in legal expenses.settlement gains.

Interest income and other, which includes FX gains and losses, increaseddecreased $15.2$7.0 million, or 67.9%, to a gain of $3.3 million for the year ended December 31, 2025, compared to a gain of $10.4 million for the year ended December 31, 2024,2024. comparedThe decrease was primarily due to a loss of $4.9$4.3 million net FX loss for the year ended December 31, 2023.2025 The increase was primarily duecompared to a $0.5 million net FX gain for the year ended December 31, 20242024, comparedas towell as a $9.3$1.4 million net FX loss for the year ended December 31, 2023 and a $3.3 million increasedecrease in interest income.

Interest expense decreasedincreased $7.4$14.4 million, or 51.5%,207.8%, to $7.0 million in 2024 compared to $14.3$21.4 million for the year ended December 31, 2023.2025 Thecompared decreaseto was$7.0 million for the year ended December 31, 2024, primarily due to lower borrowings, which was partially offset by higher interest rates on our borrowings. Our borrowings in the prior year included amounts owed on our 2.0% convertible senior notes due 2023 (“2023 Convertible Notes”), which matured in August 2023, as well as borrowings on our senior securedunsecured bank revolving credit facility (“Credit Facility”).

Our income tax provision decreasedincreased $12.8$29.5 million, or 15.3%,41.7%, to $70.7 million in 2024 compared to $83.5$100.1 million for the year ended December 31, 2023.2025 compared to $70.7 million for the year ended December 31, 2024. Our effective tax rate of 20.2%27.0% forin 20242025 compared to 23.3%20.2% forin 2023.2024. The decreaseincrease in the income tax provision was primarily due to a moreless favorable tax benefit related to share-based compensation, asresulting afrom larger number offewer non-qualified stock optionsoption wereexercises exercisedand duringan theincrease yearin endedvaluation Decemberallowances 31,against 2024certain foreign deferred tax assets as compared to the prior year.

We evaluate the performance of each of our operating segments based on multiple measures of segment profit, including Adjusted Segment EBITDA, which is a non-GAAP financial measure. The following tabletables reconcilesreconcile Segment Operating Income to Adjusted Segment EBITDA for the years ended December 31, 20242025 and 20232024:

CORPORATE FINANCE & RESTRUCTURING

Revenues increased $44.5$159.8 million, or 3.3%,11.5%, to $1,391.2$1,551.0 million for the year ended December 31, 2024. Pass-through revenues contributed $9.7 million, or 0.7% of the increase. Excluding the pass-through revenues, the $34.9 million, or 2.7%, increase in revenues was2025, primarily due to higher demand for our turnaround & restructuring and transactions services, higher realized bill rates for our restructuringtransformation and transactions services and higheran demandincrease forin oursuccess transactions services,fees, which was partially offset by lower demand for our transformation services and lower realized bill rates for our turnaround & strategyrestructuring services.

Gross profit increased $21.8$83.4 million, or 5.0%,18.4%, to $453.8$537.1 million for the year ended December 31, 2024.2025. Gross profit margin increased 0.52.0 percentage points from 20232024 to 2024.2025. The increase in gross profit margin was primarily due to a 2 percentage point increase in utilization and the impact of higher realized bill rates, which was partially offset by a 2 percentage point decline in utilization.rates.

SG&A expenses increased $9.3$14.7 million, or 4.4%,6.7%, to $219.6$234.4 million for the year ended December 31, 2024.2025. SG&A expenses of 15.8%15.1% of revenues in 20242025 compared to 15.6%15.8% in 2023.2024. The increase in SG&A expenses was primarily due to higher bad debt, outside services, infrastructure supportsupport, and badother debtgeneral and administrative expenses.

Revenues increased $36.1$74.5 million, or 5.5%,10.8%, to $690.2$764.7 million for the year ended December 31, 2024. Acquisition-related revenues contributed $6.8 million, or 1.0% of the increase. Excluding the acquisition-related revenues, the $29.3 million, or 4.5%, increase in revenues was2025, primarily due to higher realized bill rates and demand for our constructionsrisk & investigations, data & analytics and construction solutions services, higher realized bill rates for our disputes services and an increase in success fees.services.

Gross profit increased $8.4$48.9 million, or 3.9%,21.7%, to $225.2$274.1 million for the year ended December 31, 2024.2025. Gross profit margin decreasedincreased 0.53.2 percentage points from 20232024 to 2024.2025. The decreaseincrease in gross profit margin was primarily due to higher compensationrealized expensesbill as a percentage of revenues, which was largely offset by internal cost recovery related to an initiative to develop AI capabilities for the Company. The related costs are included in our unallocated corporate expenses.rates.

SG&A expenses increased $10.4$1.4 million, or 7.7%,1.0%, to $145.1$146.5 million for the year ended December 31, 2024.2025. SG&A expenses of 21.0%19.2% of revenues in 20242025 compared to 20.6%21.0% in 2023.2024. The increase in SG&A expenses was primarily drivendue to higher compensation and infrastructure support expenses, which was partially offset by higherfavorable badlitigation debt, travel and entertainment, rent, and other general and administrative expenses.settlements.

Revenues increaseddecreased $92.2$142.7 million, or 12.0%,16.5%, to $863.6$720.8 million for the year ended December 31, 2024,2025, which included a 1.2% estimated positive impact from FX. Excluding the estimated impact from FX, revenues decreased $153.5 million, or 17.8%. The decrease in revenues was primarily due to higherlower demand and realized bill rates for our M&A-related antitrust and non-M&A-related antitrust services, which was partially offset by higher demand for our financial economics servicesservices, andas well as higher realized bill rates for our non-M&A-related antitrust services,and which was partially offset by lower demand for our non-MM&A-related antitrust services.

Gross profit increaseddecreased $16.5$92.8 million, or 7.5%,39.5%, to $235.1$142.4 million for the year ended December 31, 2024.2025. Gross profit margin decreased 1.17.5 percentage points from 20232024 to 2024.2025. The decrease in gross profit margin was primarily due to ana increase7 percentage point decrease in compensationutilization and outsidehigher consultantforgivable expensesloan asamortization a percentage of revenues,expenses, which was partially offset by higher realized bill rates for our non-M&A-related antitrust and M&A-related antitrust services and lower compensation expenses, including the impact of higheran realized8.6% billdecline rates.in billable headcount.

SG&A expenses increaseddecreased $22.2$8.5 million, or 20.4%,6.5%, to $131.0$122.6 million for the year ended December 31, 2024.2025, which included a 1.3% estimated negative impact from FX. SG&A expenses of 17.0% of revenues in 2025 compared to 15.2% of revenues in 2024 compared to 14.1% in 2023.2024. The increasedecrease in SG&A expenses was primarily driven by higherlower bad debt,debt largely related to one engagement, compensation and infrastructure support expenses.expense.

(3)Includes personnel involved in direct client assistance and billable consultants and excludes professionals employed on an as-needed basis Revenues increaseddecreased $29.8$43.8 million, or 7.7%,10.5%, to $417.6$373.9 million for the year ended December 31, 2024,2025, primarily due to higherlower demand for our M&A-related “second request” and information governance, privacy & security services, which was partially offset by lower demand for our investigations services.

Gross profit decreased $3.4$21.2 million, or 2.3%,14.6%, to $145.1$123.9 million for the year ended December 31, 2024.2025. Gross profit margin decreased 3.51.6 percentage points from 20232024 to 2024.2025. The decrease in gross profit margin was primarily due to lower profitability of our consultingprocessing, hosting and hostingmanaged review services, primarily resulting from the decline in revenues from our M&A-related “second request” services, which was partially offset by an increase in profitability of our consulting services.

SG&A expenses increaseddecreased $2.3$8.7 million, or 2.3%,8.5%, to $102.6$93.9 million for the year ended December 31, 2024.2025. SG&A expenses of 25.1% of revenues in 2025 compared with 24.6% of revenues in 2024 compared to 25.9% of revenues in 2023.2024. The increasedecrease in SG&A expenses was primarily due to higherlower compensation, infrastructure support and travel and entertainment expenses,and whichoutside was partially offset by lower bad debtservices expenses.

SG&A expensesRevenues increased $4.8$42.4 million, or 6.7%,12.6%, to $76.4$378.5 million for the year ended December 31, 2024.2025, SG&Awhich expensesincluded ofa 22.7%1.5% ofestimated positive impact from FX. Excluding the estimated impact from FX, revenues inincreased 2024$37.4 comparedmillion, toor 21.8% in 2023. The increase in SG&A expenses was11.1%, primarily due to higher rent,demand compensation,for marketing,our corporate reputation services and otheran general$18.2 andmillion administrativeincrease expenses.in pass-through revenues.

Results of operations for our non-U.S. subsidiaries are translated from the designated functional currency to our reporting currency of USD. Revenues and expenses are translated at average exchange rates for each month, while assets and liabilities are translated at balance sheet date exchange rates and certain equity transactions are translated at historical rates. Resulting net translation adjustments are recorded as a component of stockholders’ equity in “Accumulated other comprehensive loss.”

Net cash provided by operating activities increaseddecreased $170.6$243.0 million, or 76.0%,million to $395.1$152.1 million compared to $224.5$395.1 million for the year ended December 31, 2023.2024. The increasedecrease in net cash provided by operating activities was primarily due to anhigher increaseforgivable inloan cashissuances, collections,compensation payments and income tax payments, which was partially offset by higheran compensation,increase forgivablein loancash issuances to retain key professionals, operating expenses and income tax payments as compared to the prior year.collections. DSO was 88 and 97 days as of December 31, 20242025 and 1002024, days as of December 31, 2023. The decrease in DSO was primarily due to cash collections that outpaced the increase in revenues.respectively.

Net cash used in investing activities decreasedincreased $63.7$48.4 million, or 86.2%,million to $10.2$58.5 million compared to $73.8$10.2 million for the year ended December 31, 2023.2024. The decreaseincrease in net cash used in investing activities was primarily due to a $24.4$23.1 million payment for a short-term investment during 2023 and the maturity of the short-term investment of $25.2 million during 2024. In addition, there was a $14.1 million decreaseincrease in capital expendituresexpenditures, primarily drivenrelated byto lowerhigher spend on cloud computing costs and leasehold improvements as compared to the year ended December 31, 2024, as well as the prior year.year maturity of a short-term investment of $25.2 million, which created an inflow in the comparative prior year period.

Net cash used in financing activities decreasedincreased $339.3$495.1 million, or 95.7%,million to $15.4$510.5 million compared to $354.7$15.4 million for the year ended December 31, 2023.2024. The decreaseincrease in net cash used in financing activities was primarily due to thean repaymentincrease of the $315.8 million principal amount of our 2023 Convertible Notes at maturity during 2023, a decrease of $10.8$848.5 million in payments for common stock repurchases under the Repurchase ProgramProgram, andwhich was partially offset by an increase in proceedsnet on stock option exercisesborrowings of $9.6$365.0 million asunder our Credit Facility compared to the prioryear year.ended December 31, 2024.

The effect of exchange rate changes on cash and cash equivalents had a favorable impact of $21.5 million for the year ended December 31, 2025 compared to an unfavorable impact of $12.3 million for 2024the comparedyear toended aDecember favorable31, impact of $15.6 million for 2023.2024.

For the year ended December 31, 2024, cashCash paid for income taxes and tax credits, net of refundstax refunds, included $28.9 million and $40.6 million of payments for the purchase of tax credits.credits during the years ended December 31, 2025 and 2024, respectively.

The second amended and restated credit agreement entered into on November 21, 2022 (the “Credit Agreement”) governing the Credit Facility and our other indebtedness outstanding from time to time contains covenants that, among other things, may limit our ability to: incur additional indebtedness; create liens; pay dividends on our capital stock, make distributions or repurchases of our capital stock or make specified other restricted payments; consolidate, merge or sell all or substantially all of our assets; guarantee obligations of other entities or our foreign subsidiaries; enter into hedging agreements; enter into transactions with affiliates or related persons; or engage in any business other than consulting-related businesses. In addition, the Credit Agreement includes a financial covenant that requires us not to exceed a maximum consolidated total net leverage ratio (the ratio of funded debt (less unrestricted cash up to $300.0 million) to Consolidated EBITDA, as defined in the Credit Agreement). As of December 31, 2025, we were in compliance with the covenants contained in the Credit Agreement. See Note 13, “Debt” in Part II, Item 8 of this Annual Report for a further discussion of the Credit Agreement.

During 2024,2025, we spent $34.9$58.5 million in capital expenditures to support our organization, including direct support for specific client engagements.organization. During 2025,2026, we currently expect to make capital expenditures to support our organization in an aggregate amount of between $70$48 million and $86$58 million, which includes costs related to leasehold improvements for our new office space in Chicago, Illinois, cloud computing costs and investments related to AI capabilities.million. Our estimate takes into consideration the needs of our existing businesses but does not include the impact of any purchasesexpenditures that we may be required to make as a result of future acquisitions or specific client engagements that are not completed or not currently contemplated. Our capital expenditure requirements may change if our staffing levels or technology needs change significantly from what we currently anticipate, if we are required to purchase additional equipment specifically to support new client engagements or if we pursue and complete acquisitions.

During the year ended December 31, 2024,2025, we made $10.2$858.7 million in paymentspayments, including commissions, for common stock repurchases under the Repurchase Program. We had $450.4$491.8 million remaining under the Repurchase Program to repurchase additional shares as of December 31, 2024.2025.

We have noOur future contractual obligations as of December 31, 20242025 include long-term obligations of $365.0 million related to outstanding borrowings under our Credit Facility. For more information on our Credit Facility, refer to Note 14,13, “Debt” in Part II, Item 8 of this Annual Report. Under our operating leases as described in Note 15,14, “Leases” in Part II, Item 8 of this Annual Report, we have current obligations of $34.1$37.2 million and non-current obligations of $208.0$224.5 million.million as of December 31, 2025.

As of December 31, 20242025 and 2023,2024, thewe Company waswere contingently liable under bank guarantees issued by our banks in favor of third parties that totaled $10.9$17.5 million and $7.8$10.9 million, respectively. These bank guarantees primarily support bid and performance obligations and operating leases for office space. The amounts are guaranteed under guarantee facilities totaling $42.7$32.5 million and $36.2$42.7 million atas of December 31, 20242025 and 2023,2024, respectively. The CompanyWe had $31.8$15.0 million and $28.4$31.8 million available under the guarantee facilities atas of December 31, 20242025 and 2023,2024, respectively. These bank guarantees are issued separateseparately from our Credit Facility and, as a result, do not affect available borrowingsborrowing capacity under our Credit Facility.

The following is a discussion and analysis of our consolidated financial condition, results of operations, and liquidity and capital resources for the three and six months ended MarchJune 31,30, 2026 and 2025, and significant factors that could affect our prospective financial condition and results of operations. This discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes and with our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”). In addition to historical information, the following discussion includes forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations and intentions. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, these expectations or any of the forward-looking statements could prove to be incorrect, and actual results could differ materially from those projected or assumed in the forward-looking statements.

We have included the definition of Segment Operating Income (Loss),Income, which is a GAAP financial measure, below in order to more fully define the components of certain non-GAAP financial measures in the accompanying analysis of financial information.

We define Segment Operating Income (Loss) as a segment’s share of consolidated operating income. We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment Operating Income (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA, which is a non-GAAP financial measure. We define Adjusted Segment EBITDA as Segment Operating Income (Loss) before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects core operating performance and provides an indicator of the segment’s ability to generate cash. We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses.

We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business andbusiness, losses on early extinguishment of debt.debt and Extraordinary Litigation-Related Expenses (as defined below). We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. Many of our competitors use common alternative measures of operating performance. Non-GAAP financial measures are used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that our non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with useful supplemental information.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income and earnings per diluted share (“EPS”), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, the gain or loss on sale of a business andbusiness, losses on early extinguishment of debt.debt and Extraordinary Litigation-Related Expenses (as defined below). We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with useful supplemental information on our business operating results, including underlying trends.

FirstSecond Quarter 2026 Executive Highlights

Revenues for the three months ended MarchJune 31,30, 2026 increased $85.1$49.8 million, or 9.5%,5.3%, compared to the three months ended MarchJune 31,30, 2025. The increase in revenues was2025, primarily due to higher revenues in our Corporate Finance, Strategic CommunicationsTechnology and TechnologyFLC segments, which was partially offset by lowera revenues$9.2 million decline in ourpass-through Economic Consulting segment. Excluding an estimated 2.7% positive impact from FX, revenues increased $60.8 million, or 6.8%, compared to the three months ended March 31, 2025.revenues.

Net income for the three months ended MarchJune 31,30, 2026 decreased $4.2$13.9 million, or 6.8%,19.4%, compared to the three months ended MarchJune 31,30, 2025. The decrease in net income was primarily due to higher direct costs andcosts, selling, general and administrative (“SG&A”) expenses,expenses includingand theinterest impact of legal settlement gains recorded in the same quarter in the prior yearexpense, which did not recur, as well as an increase in interest expense and a higher effective tax rate. These decreases werewas partially offset by higherthe increase in revenues and thea absencelower ofincome specialtax charges,provision compared to the same quarter in the prior year.

Adjusted EBITDA for the three months ended MarchJune 31,30, 2026 decreased $18.3$7.2 million, or 15.9%,6.4%, compared to the three months ended MarchJune 31,30, 2025. Adjusted EBITDA Margin of 9.8%10.5% for the three months ended MarchJune 31,30, 2026 compared to 12.8%11.8% for the three months ended MarchJune 31,30, 2025. The decrease in Adjusted EBITDA was primarily due to higher direct costs and SG&A expenses, includingexcluding $6.6 million of Extraordinary Litigation-Related Expenses during the impactthree ofmonths legalended settlementJune gains30, recorded in the same quarter in the prior year that did not recur,2026, which morewas thanpartially offset by the increase in revenues compared to the same quarter in the prior year. Adjusted EBITDA for the three months ended March 31, 2025 excludes special charges.

EPS for the three months ended MarchJune 31,30, 2026 increaseddecreased $0.16$0.14 to $1.90$1.99 compared to $1.74$2.13 for the three months ended MarchJune 31,30, 2025. The increasedecrease in EPS was primarily due to lower weighted average shares outstanding, which was partially offset by athe decrease in net income as described above.above, which was partially offset by the favorable impact of lower weighted average shares outstanding.

Adjusted EPS for the three months ended MarchJune 31,30, 2026 decreasedincreased $0.39$0.03 to $1.90$2.16 compared to $2.29$2.13 for the three months ended MarchJune 31,30, 2025. Adjusted EPS for the three months ended June 30, 2026 excludes the $6.6 million of Extraordinary Litigation-Related Expenses, which increased Adjusted EPS by $0.17. Adjusted EPS was equal to EPS for the three months ended MarchJune 31,30, 2026. Adjusted EPS for the three months ended March 31, 2025 excludes the $25.3 million in special charges, which increased Adjusted EPS by $0.55.2025.

Net cash usedprovided inby operating activities for the three months ended MarchJune 31,30, 2026 decreasedincreased $155.2$96.6 million, or 33.4%,173.5%, to $310.0$152.3 million compared to $465.2$55.7 million for the three months ended MarchJune 31,30, 2025. The decreaseincrease in net cash usedprovided inby operating activities was primarily due to a decrease in forgivable loan issuances, higher cash collections and a decreasedecreases in forgivable loan issuances and income tax payments, which was partially offset by an increase in operating expense and compensation payments. Days sales outstanding (“DSO”) of 9899 days at MarchJune 31,30, 2026 compared to 100 days at MarchJune 31,30, 2025.

Free Cash Flow was an outflowinflow of $320.6$141.0 million and $483.0$38.3 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase in Free Cash Flow was primarily due to lowerhigher net cash usedprovided inby operating activities, as described above.

During the three months ended MarchJune 31,30, 2026, we made $126.8$393.2 million in payments for common stock repurchasesrepurchases, including excise tax, under the Repurchase Program.

The following table includes the net headcount additions (reductions) by segment and in total for the threesix months ended MarchJune 31,30, 2026.

Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow:

Unallocated corporate expenses increased $25.9$16.5 million, or 130.8%,41.6%, to $45.6$56.3 million compared to $19.8$39.8 million for the three months ended MarchJune 31,30, 2025, primarily due to a$6.6 legalmillion settlementin gainExtraordinary recordedLitigation-Related during the three months ended March 31, 2025, andExpenses, an increase in legal expenses duringrelated theto threeour monthsAll endedSMD Marchmeeting, 31,which 2026.did not occur in 2025, and higher compensation expenses.

Interest income and other, which includes FX gains and losses, decreasedincreased $1.8$1.7 million to $1.1a $0.4 million loss for the three months ended MarchJune 31,30, 2026 compared to $2.8a $2.1 million loss for the three months ended MarchJune 31,30, 2025, primarily due to a $3.1$1.5 million decrease in interest income, which was partially offset by a $1.3 million positive impact from FX remeasurement. There was no FX remeasurement gain or loss during the three months ended March 31, 2026 aslosses compared to a $1.3 million FX loss during the same quarter in the prior year.

Interest expense increased $5.5$6.4 millionmillion, or 121.2%, to $6.4$11.6 million for the three months ended MarchJune 31,30, 2026 compared to $1.0$5.3 million for the three months ended MarchJune 31,30, 2025, primarily due to higher borrowings on the $300.0 million term loan under our Credit Agreement (the "Incremental Term Loan") and our senior unsecured bank revolving credit facility (the “ Revolving Credit Facility”).

Our income tax provision increaseddecreased $2.2$5.1 million, or 11.5%,25.0%, to $20.9$15.2 million for the three months ended MarchJune 31,30, 2026 compared to $18.8$20.2 million for the three months ended MarchJune 31,30, 2025. Our effective tax rate of 26.6%20.8% for the three months ended MarchJune 31,30, 2026 compared to 23.3%22.0% for the three months ended MarchJune 31,30, 2025. The increasedecrease in the income tax provision was due to both a decrease in income before income tax provision and a lower effective tax rate. The lower effective tax rate was primarily due to athe less favorablenet tax benefitbenefits relatedassociated towith our tax equity investment, which was partially offset by an unfavorable impact from share-based compensation, as fewer shares vested during the period,compensation and an increase in the valuation allowance recorded against current period losses as compared to the three months ended MarchJune 31,30, 2025.

We evaluate the performance of each of our operating segments based on multiple measures of segment profit, including Adjusted Segment EBITDA, which is a non-GAAP financial measure. The following tables reconcile Segment Operating Income (Loss) to Adjusted Segment EBITDA for the three and six months ended MarchJune 31,30, 2026 and 2025:

We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. The following table reconciles net income to Total Segment Operating Income and Total Adjusted Segment EBITDA for the three and six months ended MarchJune 31,30, 2026 and 2025:

(1)The number of billable professionals for the Technology segment excludes as-needed professionals, who we employ based on demand for the segment’s services. We employed an average of 1,233755 and 639357 as-needed employees during the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Revenues increased $65.9$32.2 million, or 19.2%,8.5%, to $409.5$411.4 million for the three months ended MarchJune 31,30, 2026, primarily due to higher demand and realized bill rates for our transactions, transformation and turnaround & restructuring,restructuring transactionsservices, an increase in demand for transformation services, and transformationhigher success fees, which was partially offset by lower demand for turnaround & restructuring services. Excluding an estimated 2.5% positive impact from FX, revenues increased $57.4 million, or 16.7%.

Gross profit increased $35.0$8.0 million, or 31.2%,6.0%, to $147.1$141.1 million for the three months ended MarchJune 31,30, 2026. Gross profit margin increaseddecreased 3.30.8 percentage points for the three months ended MarchJune 31,30, 2026. The increasedecrease in gross profit margin was primarily due to higher compensation as a 5percentage of revenues, which included the impact of a 7.8% increase in billable headcount and a 2 percentage point increasedecrease in utilizationutilization, andwhich was partially offset by higher realized bill rates.

SG&A expenses increased $2.8$4.1 million, or 4.8%,7.6%, to $61.5$58.3 million for the three months ended MarchJune 31,30, 2026, primarily due to higher outsidecompensation, services,infrastructure travelsupport and entertainmentother general and compensationadministrative expenses, which was partially offset by lower bad debt expenses. The increase in SG&A expenses included an estimated 2.8% negative impact from FX. SG&A expenses of 15.0%14.2% of revenues for the three months ended MarchJune 31,30, 2026 compared to 17.1%14.3% of revenues for the three months ended MarchJune 31,30, 2025.

Revenues increased $2.3$7.7 million, or 1.2%,4.1%, to $192.9$194.3 million for the three months ended MarchJune 31,30, 2026, primarily due to higher realized bill rates and demand for our risk & investigations and construction solutions services, which was partially offset by lower demand for our dispute advisory services. Excluding an estimated 2.1% positive impact from FX, revenues decreased $1.7 million, or 0.9%.

Gross profit decreasedincreased $7.2$2.5 million, or 9.9%,3.7%, to $65.5$68.2 million for the three months ended MarchJune 31,30, 2026. Gross profit margin decreasedwas 4.2relatively percentage pointsflat for the three months ended MarchJune 31,30, 2026. The decrease in gross profit margin was2026, primarily due to a 23 percentage point decrease in utilization, which was partially offset by higher realized bill rates.

SG&A expenses increased $5.3$2.4 million, or 14.4%,6.4%, to $42.2$38.8 million for the three months ended MarchJune 31,30, 2026, primarily due to higher hiring-related, bad debt, compensation and travel and entertainment expenses. The increase in SG&A expenses includedof an estimated 2.1% negative impact from FX. SG&A expenses were 21.9%20.0% of revenues for the three months ended MarchJune 31,30, 2026 compared to 19.3%19.5% of revenues for the three months ended MarchJune 31,30, 2025.

Revenues decreased $4.2$2.8 million, or 2.3%,1.5%, to $175.6$188.8 million for the three months ended MarchJune 31,30, 2026, primarily due to lower demand for our non-M&A-related antitrust and international arbitration services, which was partially offset by higher demand for our financial economics and M&A-related antitrust services,services and higher realized bill rates.rates Excludingfor anour estimatedfinancial 3.4%economics positive impact from FX, revenues decreased $10.3 million, or 5.7%.services.

Gross profit decreased $20.8$4.4 million, or 50.3%,10.4%, to $20.6$37.5 million for the three months ended MarchJune 31,30, 2026. Gross profit margin decreased 11.32.0 percentage points for the three months ended MarchJune 31,30, 2026. The decrease in gross profit margin was primarily due to highera forgivable loan amortization, variable compensation and outside consultant expenses as a3 percentage ofpoint revenues,decrease in utilization, which was partially offset by higher realized bill rates.

SG&A expenses decreasedincreased $0.4$1.0 million, or 1.6%,3.5%, to $27.9$30.0 million for the three months ended MarchJune 31,30, 2026, whichprimarily includeddriven anby estimatedhigher 3.9%bad negativedebt impactand fromoutside FX.services expenses. SG&A expenses wereof 15.9% of revenues for the three months ended MarchJune 31,30, 2026 compared to 15.8%15.1% of revenues for the three months ended MarchJune 31,30, 2025.

(3)Includes personnel involved in direct client assistance and billable consultants and excludes professionals employed on an as-needed basis Revenues increased $5.2$15.4 million, or 5.3%,18.4%, to $102.3$99.0 million for the three months ended MarchJune 31,30, 2026, primarily due to higher demand for our litigationM&A-related and“second information governance, privacy & securityrequest” services, which was partially offset by lower demand for our investigations and M&A-related “second request” services. Excluding an estimated 2.5% positive impact from FX, revenues increased $2.7 million, or 2.8%.

Gross profit increased $0.4$7.1 million, or 1.2%,28.7%, to $33.3$31.8 million for the three months ended MarchJune 31,30, 2026. Gross profit margin decreasedincreased 1.32.6 percentage points for the three months ended MarchJune 31,30, 2026. The decreaseincrease in gross profit margin was primarily due to loweran increase in profitability of our hostingconsulting, processing and processingreview services, which was partially offset by highera decrease in profitability of our consulting and reviewhosting services.