CRAI's Revenue Surges, Net Income Jumps 31% YTD Amid Operational Cost Rises

Ticker: CRAI · Form: 10-Q · Filed: Oct 30, 2025 · CIK: 1053706

Sentiment: mixed

Topics: Consulting Services, Revenue Growth, Net Income, Operating Cash Flow, Share Repurchases, Forgivable Loans, Debt

Related Tickers: CRAI, FTI, KFY, GART

TL;DR

**CRAI is growing revenue and net income, but watch those rising costs and the massive jump in forgivable loans – it's a mixed bag for profitability and cash flow.**

AI Summary

CRA International, Inc. reported a robust increase in revenues for both the fiscal quarter and year-to-date periods ended September 27, 2025. Quarterly revenues rose by 10.8% to $185.9 million from $167.7 million in the prior year, while year-to-date revenues increased by 8.5% to $554.6 million from $511.0 million. Despite the revenue growth, quarterly income from operations slightly decreased by 6.4% to $17.2 million from $18.4 million, primarily due to higher costs of services and selling, general, and administrative expenses. However, year-to-date net income saw a significant jump of 31.4% to $41.6 million from $31.7 million, driven by strong revenue performance over the longer period. The company's balance sheet shows an increase in total assets to $629.0 million from $571.4 million at December 28, 2024, largely due to a substantial rise in forgivable loans to $101.3 million from $55.5 million. Cash and cash equivalents decreased by $4.2 million year-to-date, primarily due to significant cash used in operating activities of $37.6 million and substantial share repurchases totaling $47.1 million. The company also increased its borrowings under its revolving line of credit by $95.0 million to fund operations and share repurchases.

Why It Matters

CRA International's strong revenue growth, particularly the 8.5% year-to-date increase to $554.6 million, signals robust demand for its consulting services, which is positive for investors. However, the slight dip in quarterly operating income and increased operational costs warrant closer scrutiny, suggesting potential margin pressures. The significant increase in forgivable loans to $101.3 million could indicate aggressive talent acquisition or retention strategies, impacting future cash flow. For employees, this growth could mean more opportunities, but the competitive landscape for consulting talent remains fierce, as evidenced by the forgivable loans. Customers benefit from CRAI's continued investment in its service capabilities, while the broader market sees a strong player in the consulting sector navigating economic shifts.

Risk Assessment

Risk Level: medium — The company's cash and cash equivalents decreased by $4.2 million year-to-date, with net cash used in operating activities totaling $37.6 million. This negative operating cash flow, coupled with a significant increase in forgivable loans from $55.5 million to $101.3 million, indicates a potential strain on liquidity and aggressive talent investment. Additionally, the company drew $95.0 million from its revolving line of credit, increasing current liabilities to $338.6 million from $251.3 million, which raises concerns about debt reliance.

Analyst Insight

Investors should closely monitor CRAI's operating cash flow and the impact of its forgivable loan strategy on future profitability and liquidity. While revenue growth is positive, the increased reliance on debt and negative operating cash flow suggest a need for caution. Consider holding existing positions but deferring new investments until there's clearer evidence of improved cash generation and reduced debt reliance.

Financial Highlights

revenue
$554.6M
operating Margin
11.3%
total Assets
$629.0M
total Debt
$95.0M
net Income
$41.6M
eps
$6.16
cash Position
$22.5M
revenue Growth
+8.5%

Revenue Breakdown

SegmentRevenueGrowth
Total Revenues$185.9M+10.8%
Total Revenues$554.6M+8.5%

Key Numbers

Key Players & Entities

FAQ

What were CRA International's revenues for the fiscal quarter ended September 27, 2025?

CRA International, Inc. reported revenues of $185,891 thousand for the fiscal quarter ended September 27, 2025, an increase from $167,748 thousand in the same period last year.

How did CRA International's net income change year-to-date in 2025 compared to 2024?

CRA International's net income for the fiscal year-to-date period ended September 27, 2025, was $41,597 thousand, a significant increase from $31,666 thousand for the same period in 2024.

What is the current status of CRA International's revolving line of credit?

As of September 27, 2025, CRA International had $95,000 thousand outstanding on its revolving line of credit, compared to no balance at December 28, 2024.

What was CRA International's net cash flow from operating activities for the year-to-date period?

For the fiscal year-to-date period ended September 27, 2025, CRA International reported net cash used in operating activities of $37,595 thousand, a decrease from net cash used of $29,689 thousand in the prior year.

How much did CRA International spend on share repurchases year-to-date in 2025?

CRA International repurchased common stock totaling $47,149 thousand for the fiscal year-to-date period ended September 27, 2025, an increase from $33,348 thousand in the prior year.

What is the significance of the increase in forgivable loans for CRA International?

Forgivable loans increased substantially to $101,346 thousand at September 27, 2025, from $55,492 thousand at December 28, 2024. This indicates a significant investment in attracting and retaining key talent, which could impact future cash flows and compensation expenses.

What new accounting standards will affect CRA International's disclosures?

CRA International will adopt ASU 2023-09, 'Improvements to Income Tax Disclosures,' for annual periods beginning after December 15, 2024, and ASU 2024-03, 'Disaggregation of Income Statement Expenses,' for annual periods beginning after December 15, 2026. These ASUs will primarily impact disclosures, not financial position or results of operations.

How are CRA International's revenues disaggregated by type of contract?

For the fiscal year-to-date period ended September 27, 2025, CRA International's revenues were disaggregated into $91,332 thousand from fixed-price contracts and $463,288 thousand from time-and-materials contracts.

What were the total assets for CRA International at September 27, 2025?

CRA International's total assets stood at $629,041 thousand as of September 27, 2025, an increase from $571,439 thousand at December 28, 2024.

What is CRA International's primary business segment?

CRA International operates in one business segment, providing consulting services that apply advanced analytic techniques and in-depth industry knowledge to complex engagements for a broad range of clients.

Risk Factors

Industry Context

CRA International operates in the management consulting industry, which is characterized by a demand for specialized expertise in areas like economic, financial, and management consulting. The industry is competitive, with firms vying for projects from corporations and governments. Trends include a growing need for data analytics, digital transformation consulting, and regulatory compliance advisory services.

Regulatory Implications

As a consulting firm, CRAI is subject to various regulations depending on the industries and jurisdictions it serves. This can include compliance with government contracting rules, data privacy regulations (like GDPR or CCPA), and professional conduct standards. Changes in regulatory environments can create both opportunities for consulting services and compliance risks for the firm itself.

What Investors Should Do

  1. Monitor margin trends closely.
  2. Analyze the impact of increased debt.
  3. Evaluate the strategic purpose of forgivable loans.
  4. Assess the effectiveness of share repurchases.

Key Dates

Glossary

Forgivable Loans
Loans that may be forgiven by the lender if certain conditions are met, often related to employee retention or performance targets. They are recorded as loans until conditions are met, at which point they may be recognized as compensation expense or a grant. (The significant increase in forgivable loans on the balance sheet ($101.3M total) is a key balance sheet change impacting assets and potentially future expenses.)
Revolving Line of Credit
A type of credit facility that allows a company to borrow money up to a certain limit, repay it, and then borrow it again. It provides flexible access to funds. (The company has drawn $95.0M on its revolving line of credit, indicating increased short-term debt to finance operations and share repurchases.)
Costs of services
Direct costs incurred in delivering services to clients, including salaries, benefits, and other direct expenses related to project execution. (An increase in these costs contributed to the decrease in quarterly operating income, despite revenue growth.)
Selling, general and administrative expenses (SG&A)
Indirect costs associated with running the business, including marketing, sales, executive salaries, and administrative functions. (An increase in SG&A also contributed to the decline in quarterly operating income.)
Comprehensive Income
A measure of the total change in a company's equity during a period from non-owner sources. It includes net income plus other comprehensive income (OCI) items like foreign currency translation adjustments. (While net income was stable quarter-over-quarter, comprehensive income decreased due to negative foreign currency translation adjustments in the current quarter.)

Year-Over-Year Comparison

Compared to the prior year's filing, CRA International has demonstrated strong revenue growth, with quarterly revenues up 10.8% to $185.9M and year-to-date revenues up 8.5% to $554.6M. However, quarterly operating income saw a slight decline due to increased costs. Year-to-date net income shows a significant improvement of 31.4%, driven by the overall revenue performance. The balance sheet reflects a substantial increase in forgivable loans and new borrowings on the revolving line of credit, while cash reserves have decreased due to operating activities and aggressive share repurchases.

Filing Stats: 4,523 words · 18 min read · ~15 pages · Grade level 17.5 · Accepted 2025-10-30 08:15:53

Filing Documents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION ITEM 1.

Financial Statements

Financial Statements 3 Condensed Consolidated Statements of Operations (unaudited)—Fiscal Quarters and Fiscal Year-to-Date Periods Ended September 27, 2025 and September 28, 2024 3 Condensed Consolidated Statements of Comprehensive Income (unaudited)—Fiscal Quarters and Fiscal Year-to-Date Periods Ended September 27, 2025 and September 28, 2024 4 Condensed Consolidated Balance Sheets (unaudited)—September 27, 2025 and December 28, 2024 5 Condensed Consolidated Statements of Cash Flows (unaudited)—Fiscal Year-to-Date Periods Ended September 27, 2025 and September 28, 2024 6 Condensed Consolidated Statements of Shareholders' Equity (unaudited)—Fiscal Year-to-Date Periods Ended September 27, 2025 and September 28, 2024 7 Notes to Condensed Consolidated Financial Statements (unaudited) 9 ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 23 ITEM 4.

Controls and Procedures

Controls and Procedures 23

OTHER INFORMATION

PART II. OTHER INFORMATION ITEM 1.

Legal Proceedings

Legal Proceedings 24 ITEM 1A.

Risk Factors

Risk Factors 24 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 24 ITEM 3. Defaults Upon Senior Securities 25 ITEM 4. Mine Safety Disclosures 25 ITEM 5. Other Information 25 ITEM 6. Exhibits 26

Signatures

Signatures 27 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

ITEM 1. Financial Statements CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data) Fiscal Quarter Ended Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Revenues $ 185,891 $ 167,748 $ 554,620 $ 510,979 Costs of services (exclusive of depreciation and amortization) 131,468 115,188 380,364 359,394 Selling, general and administrative expenses 33,725 31,269 101,342 93,784 Depreciation and amortization 3,487 2,900 10,428 8,503 Income from operations 17,211 18,391 62,486 49,298 Interest expense, net ( 1,750 ) ( 1,457 ) ( 3,975 ) ( 3,405 ) Foreign currency gains (losses), net 763 ( 904 ) ( 527 ) ( 1,236 ) Income before provision for income taxes 16,224 16,030 57,984 44,657 Provision for income taxes 4,751 4,593 16,387 12,991 Net income $ 11,473 $ 11,437 $ 41,597 $ 31,666 Net income per share: Basic $ 1.74 $ 1.68 $ 6.22 $ 4.62 Diluted $ 1.73 $ 1.67 $ 6.16 $ 4.57 Weighted average number of shares outstanding: Basic 6,556 6,760 6,675 6,840 Diluted 6,621 6,843 6,745 6,922 See accompanying notes to the condensed consolidated financial statements. 3 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (in thousands) Fiscal Quarter Ended Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Net income $ 11,473 $ 11,437 $ 41,597 $ 31,666 Other comprehensive income (loss) Foreign currency translation adjustments, net of tax ( 1,061 ) 2,895 4,505 1,475 Comprehensive income $ 10,412 $ 14,332 $ 46,102 $ 33,141 See accompanying notes to the condensed consolidated financial statements. 4 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share data) September 27, 2025 December 28, 2024 ASSETS Current assets: Cash and cash equivalents $

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