FTI Consulting Reports Record Third Quarter 2022 Financial Results

Rhea-AI Summary

FTI Consulting reported third quarter 2022 revenues of $775.9 million, marking a 10.5% year-over-year increase. Excluding foreign currency impacts, revenues rose by 14.8%. EPS also increased to $2.15, up 9.7% from $1.96 in the previous year.

The firm narrowed its full-year 2022 revenue guidance to between $2.965 billion and $3.025 billion and EPS to $6.40 to $6.80. Cash provided by operations declined to $128.3 million compared to $196.9 million in Q3 2021.

Positive

• Revenues increased by $73.6 million, or 10.5%, in Q3 2022 year-over-year.
• EPS increased to $2.15, reflecting a 9.7% growth compared to the prior year.
• Cash and cash equivalents improved to $327.0 million from $255.7 million at Q2 2022.
• Segment revenues in Technology grew by 31.3% year-over-year.

Negative

• Cash provided by operating activities decreased to $128.3 million, down from $196.9 million in the prior year.
• Adjusted EBITDA margin declined from 14.3% to 12.8% year-over-year.
• Total debt net of cash increased to ($10.8) million from ($1.3) million year-over-year.

• Third Quarter 2022 Revenues of $775.9 Million, Up 10.5% Compared to $702.2 Million in Prior Year Quarter; Excluding Estimated Negative Impact of FX, Third Quarter 2022 Revenues Up 14.8% Compared to Prior Year Quarter
• Third Quarter 2022 EPS of $2.15, Up 9.7% Compared to $1.96 in Prior Year Quarter; Third Quarter 2022 Adjusted EPS of $2.15, Up 6.4% Compared to $2.02 in Prior Year Quarter
• Company Narrows 2022 Guidance Ranges for Revenues and EPS
  

WASHINGTON, Oct. 27, 2022 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today released financial results for the quarter ended September 30, 2022.

Third quarter 2022 revenues of $775.9 million increased $73.6 million, or 10.5%, compared to revenues of $702.2 million in the prior year quarter. Excluding the estimated negative impact from foreign currency translation ("FX"), revenues increased $103.7 million, or 14.8%, compared to the prior year quarter. Acquisition-related revenues contributed $3.1 million during the quarter. The increase in revenues was due to higher realization, which includes the recognition of revenues previously deferred, and higher demand across all business segments. Net income of $77.3 million compared to $69.5 million in the prior year quarter. The increase in net income was primarily due to higher revenues, a lower effective tax rate, an increase in FX remeasurement gains and lower interest expense, which was partially offset by an increase in compensation, including the impact of a 12.4% increase in total headcount, and higher selling, general and administrative ("SG&A") expenses compared to the prior year quarter. The lower effective tax rate was primarily related to a combined $8.3 million benefit from the use of foreign tax credits and a deferred tax benefit arising from an intracompany intellectual property license agreement. Adjusted EBITDA of $99.0 million, or 12.8% of revenues, compared to $100.3 million, or 14.3% of revenues, in the prior year quarter.

Third quarter 2022 earnings per diluted share ("EPS") of $2.15 compared to $1.96 in the prior year quarter. Third quarter 2021 EPS included $2.4 million of non-cash interest expense related to the Company's 2.0% convertible senior notes due 2023 ("2023 Convertible Notes"), which decreased EPS by $0.06. Third quarter 2022 Adjusted EPS of $2.15 compared to Adjusted EPS of $2.02 in the prior year quarter. Third quarter 2021 Adjusted EPS excluded the non-cash interest expense related to the 2023 Convertible Notes. The aforementioned $8.3 million tax benefit increased third quarter 2022 EPS and Adjusted EPS by $0.23.

Steven H. Gunby, President and Chief Executive Officer of FTI Consulting, commented, "Our record results this quarter reflect the combination of solid underlying business performance in aggregate, together with some one-time benefits. As always, our focus remains on driving the powerful multi-year trajectory our firm has been on by continuing to invest behind our strong positions and the ambitions of our people."

Cash Position and Capital Allocation

Net cash provided by operating activities of $128.3 million for the quarter ended September 30, 2022 compared to $196.9 million for the quarter ended September 30, 2021. The year-over-year decrease in net cash provided by operating activities was largely due to an increase in compensation, primarily related to headcount growth, as well as a decrease in cash collections compared to the same period in the prior year.

Cash and cash equivalents of $327.0 million at September 30, 2022 compared to $342.5 million at September 30, 2021 and $255.7 million at June 30, 2022. FX translation unfavorably impacted cash and cash equivalents at September 30, 2022 compared to September 30, 2021 and June 30, 2022. Total debt, net of cash, of ($10.8) million at September 30, 2022 compared to ($1.3) million at September 30, 2021 and $60.5 million at June 30, 2022. The sequential decrease in total debt, net of cash, was due to an increase in cash and cash equivalents.

During the quarter, the Company repurchased 127,791 shares of its common stock at an average price per share of $159.87 for a total cost of $20.4 million. As of September 30, 2022, approximately $143.5 million remained available for common stock repurchases under the Company’s stock repurchase authorization.

Third Quarter 2022 Segment Results

Corporate Finance & Restructuring
Revenues in the Corporate Finance & Restructuring segment increased $15.0 million, or 6.0%, to $265.4 million in the quarter compared to $250.3 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $24.1 million, or 9.6%, compared to the prior year quarter. Acquisition-related revenues contributed $3.1 million in the quarter. The increase in revenues was primarily due to higher demand for restructuring and business transformation services, which was partially offset by lower demand for transactions services and a decline in success fees compared to the prior year quarter. Adjusted Segment EBITDA of $51.5 million, or 19.4% of segment revenues, compared to $55.6 million, or 22.2% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was more than offset by higher compensation, which includes the impact of an 11.5% increase in billable headcount, and higher SG&A expenses.

Forensic and Litigation Consulting
Revenues in the Forensic and Litigation Consulting segment increased $14.7 million, or 10.1%, to $159.9 million in the quarter compared to $145.3 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $18.4 million, or 12.7%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for health solutions and investigations services and higher realization, which was partially offset by lower demand for disputes services compared to the prior year quarter. Adjusted Segment EBITDA of $18.2 million, or 11.4% of segment revenues, compared to $16.6 million, or 11.4% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which includes the impact of a 9.3% increase in billable headcount, and higher SG&A expenses compared to the prior year quarter.

Economic Consulting
Revenues in the Economic Consulting segment increased $20.6 million, or 12.0%, to $193.2 million in the quarter compared to $172.5 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $30.1 million, or 17.4%, compared to the prior year quarter. The increase in revenues was due to higher realization, primarily from the recognition of revenues previously deferred and higher demand for non-merger and acquisition ("M&A")-related antitrust services, which was partially offset by lower demand for M&A-related antitrust services compared to the prior year quarter. Adjusted Segment EBITDA of $32.9 million, or 17.0% of segment revenues, compared to $29.9 million, or 17.3% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by higher compensation expenses, primarily related to an increase in variable compensation, and the impact of a 7.9% increase in billable headcount compared to the prior year quarter.

Technology
Revenues in the Technology segment increased $20.3 million, or 31.3%, to $84.9 million in the quarter compared to $64.7 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $22.6 million, or 34.9%, compared to the prior year quarter. The increase in revenues was primarily due to higher demand for M&A-related "second request" and investigations services compared to the prior year quarter. Adjusted Segment EBITDA of $13.2 million, or 15.6% of segment revenues, compared to $7.8 million, or 12.1% of segment revenues, in the prior year quarter. The increase in Adjusted Segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which includes the impact of a 23.7% increase in billable headcount and an increase in contractors, as well as higher SG&A expenses compared to the prior year quarter.

Strategic Communications
Revenues in the Strategic Communications segment increased $3.0 million, or 4.3%, to $72.4 million in the quarter compared to $69.4 million in the prior year quarter. Excluding the estimated negative impact from FX, revenues increased $8.5 million, or 12.2%, compared to the prior year quarter. The increase in revenues was primarily due to increased demand for corporate reputation services compared to the prior year quarter. Adjusted Segment EBITDA of $12.9 million, or 17.9% of segment revenues, compared to $15.5 million, or 22.3% of segment revenues, in the prior year quarter. Adjusted Segment EBITDA declined compared to the prior year quarter, as the increase in revenues was more than offset by higher compensation, which includes the impact of a 16.4% increase in billable headcount, and higher SG&A expenses.

2022 Guidance
The Company is narrowing its full year 2022 guidance ranges for revenues and EPS. The Company now expects revenues to range between $2.965 billion and $3.025 billion, which compares to the previous range of between $2.920 billion and $3.045 billion. The Company now expects EPS to range between $6.40 and $6.80, which compares to the previous range of between $6.40 and $7.20. The Company does not currently expect Adjusted EPS to differ from EPS.

Third Quarter 2022 Conference Call
FTI Consulting will host a conference call for analysts and investors to discuss third quarter 2022 financial results at 9:00 a.m. Eastern Time on Thursday, October 27, 2022. The call can be accessed live and will be available for replay over the internet for 90 days by logging onto the Company’s investor relations website here.

About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 7,500 employees located in 31 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $2.78 billion in revenues during fiscal year 2021. More information can be found at www.fticonsulting.com.

Non-GAAP Financial Measures
In the accompanying analysis of financial information, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Certain of these financial measures are considered not in conformity with GAAP ("non-GAAP financial measures") under the United States Securities and Exchange Commission ("SEC") rules. Specifically, we have referred to the following non-GAAP financial measures:

• Total Segment Operating Income
• Adjusted EBITDA
• Total Adjusted Segment EBITDA
• Adjusted EBITDA Margin
• Adjusted Net Income
• Adjusted Earnings per Diluted Share
• Free Cash Flow
  

We have included the definitions of Segment Operating Income and Adjusted Segment EBITDA, which are GAAP financial measures, below in order to more fully define the components of certain non-GAAP financial measures presented in this press release. 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. We define Adjusted Segment EBITDA as a segment’s share of consolidated operating income 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 current 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 and losses on early extinguishment of debt. 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. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is 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 these non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies. We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share ("Adjusted EPS"), which are non-GAAP financial measures, as net income and EPS, respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes and the gain or loss on sale of a business. 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 an additional understanding of our business operating results, including underlying trends.

We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company’s ability to generate cash for ongoing business operations and other capital deployment.

Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables accompanying this press release.

Safe Harbor Statement

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve uncertainties and risks. Forward-looking statements include statements concerning our plans, initiatives, projections, prospects, policies and practices, objectives, goals, commitments, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends, new or changes to laws and regulations, including U.S. and foreign tax laws, environmental, social and governance ("ESG")-related issues, climate change-related matters, scientific and technological developments, and other information that is not historical, including statements regarding estimates of our future financial results. When used in this press release, words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "commits," "aspires," "forecasts," "future," "goal," "seeks" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s plans, expectations, intentions, aspirations, beliefs, goals, estimates, forecasts and projections will result or be achieved. Our actual financial results, performance or achievements and outcomes could differ materially from those expressed in, or implied by, any forward-looking statements. Further, unaudited quarterly results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flows in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer; the mix of the geographic locations where our clients are located or where services are performed; fluctuations in the price per share of our common stock; adverse financial, real estate or other market and general economic conditions; the impact of the COVID-19 pandemic and related events that are beyond our control, which could affect our segments, practices and the geographic regions in which we conduct business differently and adversely; and other future events, which could impact each of our segments, practices and the geographic regions in which we conduct business differently and could be outside of our control; the pace and timing of the consummation and integration of future acquisitions; the Company’s ability to realize cost savings and efficiencies; competitive and general economic conditions; retention of staff and clients; new laws and regulations or changes thereto; and other risks described under the heading "Item 1A, Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022 and in the Company’s other filings with the SEC. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

FINANCIAL TABLES FOLLOW

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)

		September 30,				December 31,
			2022				2021
		(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	327,047			$	494,485
Accounts receivable, net			947,993				754,120
Current portion of notes receivable			27,198				30,256
Prepaid expenses and other current assets			91,187				91,166
Total current assets			1,393,425				1,370,027
Property and equipment, net			144,713				142,163
Operating lease assets			195,339				215,995
Goodwill			1,212,541				1,232,791
Intangible assets, net			25,673				31,990
Notes receivable, net			54,144				53,539
Other assets			56,259				54,404
Total assets		$	3,082,094			$	3,100,909
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable, accrued expenses and other		$	175,491			$	165,025
Accrued compensation			422,985				507,556
Billings in excess of services provided			50,523				45,535
Total current liabilities			648,999				718,116
Long-term debt, net			314,756				297,158
Noncurrent operating lease liabilities			213,449				236,026
Deferred income taxes			161,486				170,612
Other liabilities			98,821				95,676
Total liabilities			1,437,511				1,517,588
Stockholders' equity
Preferred stock, $0.01 par value; shares authorized — 5,000; none   outstanding			—				—
Common stock, $0.01 par value; shares authorized — 75,000; shares   issued and outstanding 34,422 (2022) and 34,333 (2021)			344				343
Additional paid-in capital			—				13,662
Retained earnings			1,868,424				1,698,156
Accumulated other comprehensive loss			(224,185	)			(128,840	)
Total stockholders' equity			1,644,583				1,583,321
Total liabilities and stockholders' equity		$	3,082,094			$	3,100,909

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)

	Three Months Ended September 30,
		2022				2021
	(Unaudited)
Revenues	$	775,865			$	702,228
Operating expenses
Direct cost of revenues		526,654				472,235
Selling, general and administrative expenses		159,186				138,600
Amortization of intangible assets		2,315				2,860
		688,155				613,695
Operating income		87,710				88,533
Other income (expense)
Interest income and other		7,771				5,175
Interest expense		(2,378	)			(5,073	)
		5,393				102
Income before income tax provision		93,103				88,635
Income tax provision		15,836				19,155
Net income	$	77,267			$	69,480
Earnings per common share ― basic	$	2.29			$	2.07
Weighted average common shares outstanding ― basic		33,812				33,495
Earnings per common share ― diluted	$	2.15			$	1.96
Weighted average common shares outstanding ― diluted		35,918				35,362
Other comprehensive loss, net of tax
Foreign currency translation adjustments, net of tax expense of $0	$	(48,475	)		$	(18,607	)
Total other comprehensive loss, net of tax		(48,475	)			(18,607	)
Comprehensive income	$	28,792			$	50,873

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, except per share data)

	Nine Months Ended September 30,
		2022				2021
	(Unaudited)
Revenues	$	2,254,477			$	2,099,991
Operating expenses
Direct cost of revenues		1,539,838				1,431,381
Selling, general and administrative expenses		476,097				399,076
Amortization of intangible assets		7,320				8,515
		2,023,255				1,838,972
Operating income		231,222				261,019
Other income (expense)
Interest income and other		10,418				5,297
Interest expense		(7,468	)			(15,164	)
		2,950				(9,867	)
Income before income tax provision		234,172				251,152
Income tax provision		46,156				54,394
Net income	$	188,016			$	196,758
Earnings per common share ― basic	$	5.57			$	5.88
Weighted average common shares outstanding ― basic		33,741				33,478
Earnings per common share ― diluted	$	5.25			$	5.58
Weighted average common shares outstanding ― diluted		35,825				35,265
Other comprehensive loss, net of tax
Foreign currency translation adjustments, net of tax expense of $0	$	(95,345	)		$	(18,042	)
Total other comprehensive loss, net of tax		(95,345	)			(18,042	)
Comprehensive income	$	92,671			$	178,716

FTI CONSULTING, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data)

		Three Months Ended September 30,							Nine Months Ended September 30,
			2022			2021				2022			2021
		(Unaudited)							(Unaudited)
Net income		$	77,267		$	69,480			$	188,016		$	196,758
Add back:
Remeasurement of acquisition-related contingent   consideration			—			—				—			(3,130	)
Non-cash interest expense on convertible notes			—			2,412				—			7,141
Tax impact of non-cash interest expense on   convertible notes			—			(627	)			—			(1,857	)
Adjusted Net Income		$	77,267		$	71,265			$	188,016		$	198,912
Earnings per common share — diluted		$	2.15		$	1.96			$	5.25		$	5.58
Add back:
Remeasurement of acquisition-related contingent   consideration			—			—				—			(0.09	)
Non-cash interest expense on convertible notes			—			0.08				—			0.20
Tax impact of non-cash interest expense on   convertible notes			—			(0.02	)			—			(0.05	)
Adjusted earnings per common share — diluted		$	2.15		$	2.02			$	5.25		$	5.64
Weighted average number of common shares   outstanding ― diluted			35,918			35,362				35,825			35,265

FTI CONSULTING, INC.
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)

Three Months Ended September 30, 2022 (Unaudited)		Corporate Finance & Restructuring			Forensic and Litigation Consulting			Economic Consulting			Technology			Strategic Communications			Unallocated Corporate				Total
Net income																					$	77,267
Interest income and other																						(7,771	)
Interest expense																						2,378
Income tax provision																						15,836
Operating income		$	47,948		$	16,570		$	31,674		$	9,833		$	12,155		$	(30,470	)		$	87,710
Depreciation and amortization			1,675			1,350			1,239			3,380			629			676				8,949
Amortization of intangible assets			1,909			242			—			—			163			1				2,315
Adjusted EBITDA		$	51,532		$	18,162		$	32,913		$	13,213		$	12,947		$	(29,793	)		$	98,974

Nine Months Ended September 30, 2022 (Unaudited)		Corporate Finance & Restructuring			Forensic and Litigation Consulting			Economic Consulting			Technology			Strategic Communications			Unallocated Corporate				Total
Net income																					$	188,016
Interest income and other																						(10,418	)
Interest expense																						7,468
Income tax provision																						46,156
Operating income		$	148,936		$	47,126		$	72,056		$	25,005		$	37,623		$	(99,524	)		$	231,222
Depreciation and amortization			5,049			4,265			3,698			9,935			1,962			2,136				27,045
Amortization of intangible assets			6,036			735			—			—			548			1				7,320
Adjusted EBITDA		$	160,021		$	52,126		$	75,754		$	34,940		$	40,133		$	(97,387	)		$	265,587

FTI CONSULTING, INC.
RECONCILIATION OF NET INCOME AND OPERATING INCOME TO ADJUSTED EBITDA
(in thousands)

Three Months Ended September 30, 2021 (Unaudited)		Corporate Finance & Restructuring				Forensic and Litigation Consulting			Economic Consulting			Technology			Strategic Communications			Unallocated Corporate				Total
Net income																						$	69,480
Interest income and other																							(5,175	)
Interest expense																							5,073
Income tax provision																							19,155
Operating income		$	52,316			$	15,101		$	28,455		$	4,416		$	14,219		$	(25,974	)		$	88,533
Depreciation and amortization			1,446				1,270			1,462			3,419			533			737				8,867
Amortization of intangible assets			1,873				249			—			—			737			1				2,860
Adjusted EBITDA		$	55,635			$	16,620		$	29,917		$	7,835		$	15,489		$	(25,236	)		$	100,260
Nine Months Ended September 30, 2021 (Unaudited)		Corporate Finance & Restructuring				Forensic and Litigation Consulting			Economic Consulting			Technology			Strategic Communications			Unallocated Corporate				Total
Net income																						$	196,758
Interest income and other																							(5,297	)
Interest expense																							15,164
Income tax provision																							54,394
Operating income		$	126,718			$	59,599		$	82,891		$	38,315		$	35,537		$	(82,041	)		$	261,019
Depreciation and amortization			4,016				3,808			4,304			9,636			1,630			2,237				25,631
Amortization of intangible assets			5,644				647			—			—			2,221			3				8,515
Remeasurement of acquisition-related   contingent consideration			(3,130	)			—			—			—			—			—				(3,130	)
Adjusted EBITDA		$	133,248			$	64,054		$	87,195		$	47,951		$	39,388		$	(79,801	)		$	292,035

FTI CONSULTING, INC.
OPERATING RESULTS BY BUSINESS SEGMENT

	Segment Revenues			Adjusted EBITDA				Adjusted EBITDA Margin			Utilization			Average Billable Rate			Revenue- Generating Headcount
	(in thousands)																(at period end)
Three Months Ended September 30, 2022 (Unaudited)
Corporate Finance & Restructuring	$	265,370		$	51,532			19.4	%		61%			$	455		1,900
Forensic and Litigation Consulting		159,948			18,162			11.4	%		53%			$	368		1,614
Economic Consulting		193,183			32,913			17.0	%		67%			$	579		998
Technology (1)		84,915			13,213			15.6	%		N/M			N/M			548
Strategic Communications (1)		72,449			12,947			17.9	%		N/M			N/M			951
	$	775,865		$	128,767			16.6	%								6,011
Unallocated Corporate					(29,793	)
Adjusted EBITDA				$	98,974			12.8	%
Nine Months Ended September 30, 2022 (Unaudited)
Corporate Finance & Restructuring	$	795,766		$	160,021			20.1	%		62%			$	455		1,900
Forensic and Litigation Consulting		478,092			52,126			10.9	%		55%			$	360		1,614
Economic Consulting		523,201			75,754			14.5	%		70%			$	506		998
Technology (1)		243,181			34,940			14.4	%		N/M			N/M			548
Strategic Communications (1)		214,237			40,133			18.7	%		N/M			N/M			951
	$	2,254,477		$	362,974			16.1	%								6,011
Unallocated Corporate					(97,387	)
Adjusted EBITDA				$	265,587			11.8	%
Three Months Ended September 30, 2021 (Unaudited)
Corporate Finance & Restructuring	$	250,321		$	55,635			22.2	%		62%			$	465		1,704
Forensic and Litigation Consulting		145,264			16,620			11.4	%		54%			$	355		1,476
Economic Consulting		172,543			29,917			17.3	%		68%			$	539		925
Technology (1)		64,657			7,835			12.1	%		N/M			N/M			443
Strategic Communications (1)		69,443			15,489			22.3	%		N/M			N/M			817
	$	702,228		$	125,496			17.9	%								5,365
Unallocated Corporate					(25,236	)
Adjusted EBITDA				$	100,260			14.3	%
Nine Months Ended September 30, 2021 (Unaudited)
Corporate Finance & Restructuring	$	707,495		$	133,248			18.8	%		60%			$	457		1,704
Forensic and Litigation Consulting		446,831			64,054			14.3	%		58%			$	350		1,476
Economic Consulting		525,122			87,195			16.6	%		73%			$	510		925
Technology (1)		222,762			47,951			21.5	%		N/M			N/M			443
Strategic Communications (1)		197,781			39,388			19.9	%		N/M			N/M			817
	$	2,099,991		$	371,836			17.7	%								5,365
Unallocated Corporate					(79,801	)
Adjusted EBITDA				$	292,035			13.9	%

___________________________

N/M	Not meaningful
(1)	The majority of the Technology and Strategic Communications segments' revenues are not generated based on billable hours. Accordingly, utilization and average billable rate metrics are not presented as they are not meaningful as a segment-wide metric.

FTI CONSULTING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	Nine Months Ended September 30,
		2022				2021
	(Unaudited)
Operating activities
Net income	$	188,016			$	196,758
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		27,045				25,631
Amortization and impairment of intangible assets		7,320				8,515
Acquisition-related contingent consideration		863				(1,014	)
Provision for expected credit losses		13,101				14,816
Share-based compensation		18,491				17,150
Amortization of debt discount and issuance costs and other		1,588				8,551
Deferred income taxes		(9,140	)			5,128
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable, billed and unbilled		(251,280	)			(115,544	)
Notes receivable		838				4,392
Prepaid expenses and other assets		(3,066	)			1,145
Accounts payable, accrued expenses and other		21,936				(22,745	)
Income taxes		3,940				18,025
Accrued compensation		(67,763	)			2,803
Billings in excess of services provided		7,672				(7,691	)
Net cash provided by (used in) operating activities		(40,439	)			155,920
Investing activities
Payments for acquisition of businesses, net of cash received		(6,742	)			(9,833	)
Purchases of property and equipment and other		(38,935	)			(52,441	)
Net cash used in investing activities		(45,677	)			(62,274	)
Financing activities
Borrowings under revolving line of credit		165,000				377,500
Repayments under revolving line of credit		(165,000	)			(352,500	)
Purchase and retirement of common stock		(23,530	)			(46,133	)
Share-based compensation tax withholdings and other		(15,663	)			(8,277	)
Payments for business acquisition liabilities		(4,848	)			(7,496	)
Deposits and other		7,092				1,928
Net cash used in financing activities		(36,949	)			(34,978	)
Effect of exchange rate changes on cash and cash equivalents		(44,373	)			(11,094	)
Net increase (decrease) in cash and cash equivalents		(167,438	)			47,574
Cash and cash equivalents, beginning of period		494,485				294,953
Cash and cash equivalents, end of period	$	327,047			$	342,527

FTI CONSULTING, INC.
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW
(in thousands)

	Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Net cash provided by (used in) operating activities	$	128,292			$	196,946			$	(40,439	)		$	155,920
Purchases of property and equipment		(13,316	)			(24,745	)			(38,951	)			(52,470	)
Free Cash Flow	$	114,976			$	172,201			$	(79,390	)		$	103,450

FTI Consulting, Inc.
555 12th Street NW
Washington, DC 20004
+1.202.312.9100

Investor & Media Contact:
Mollie Hawkes
+1.617.747.1791
mollie.hawkes@fticonsulting.com

FAQ

What were FTI Consulting's third quarter 2022 revenues?

FTI Consulting reported revenues of $775.9 million for the third quarter of 2022.

How much did EPS increase in Q3 2022 for FCN?

Earnings per share (EPS) for FTI Consulting increased to $2.15 in Q3 2022, up 9.7% from $1.96 in the prior year.

What is FTI Consulting's updated guidance for 2022 revenues?

FTI Consulting has narrowed its revenue guidance for 2022 to a range between $2.965 billion and $3.025 billion.