CRA International (CRAI) Earnings Date & Reports

Key Takeaways

• Revenue reached a record $214.9 million in the fiscal third quarter, up 15.6% year over year and well above the roughly $199 million consensus estimate.
• Non-GAAP earnings per share (EPS) came in at $2.19, beating the $2.07 consensus by about 5.6%, while GAAP diluted EPS rose 27.2% to $2.20.
• Management raised full-year fiscal 2026 revenue guidance to a range of $830 million to $840 million, up from the prior $805 million to $820 million.
• Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) reached $27.1 million, topping estimates, with the operating margin expanding to 11.1% from 9.3% a year earlier.
• The company raised its quarterly dividend 17.5% to $0.67 per share, marking its tenth consecutive annual increase.
• Seven practices grew year over year, representing roughly 95% of total revenue, while consultant utilization improved to 78%.
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Earnings Context and Why It Matters

Charles River Associates (CRA) is a global consulting firm specializing in economic, financial, and management services, with a strong franchise in antitrust, litigation support, and regulatory consulting. This quarterly earnings report matters because it signals whether demand for high-value advisory work remains resilient amid a shifting mergers and acquisitions (M&A) environment and evolving regulatory conditions. CRA entered the quarter with momentum, having posted record revenue in the prior two quarters, and investors were watching whether that acceleration could continue. The results also offer a read on consultant hiring, utilization, and margin discipline, key drivers of profitability in a people-intensive business. A raised full-year outlook reinforced the company's confidence in its pipeline.

Reported Results

For the fiscal third quarter ended October 3, 2026, CRA reported revenue of $214.9 million, up 15.6% from the prior-year period and above the roughly $199 million consensus estimate. Net income increased 21.2% to $13.9 million, while GAAP diluted EPS climbed 27.2% to $2.20. On a non-GAAP basis, adjusted EPS was $2.19, exceeding the $2.07 consensus by about 5.6%.

Adjusted EBITDA came in at $27.1 million, ahead of the approximately $24.7 million analysts expected, and the operating margin improved to 11.1% from 9.3% a year earlier. Growth was broad-based: seven practices grew year over year, representing about 95% of total revenue. Legal & Regulatory revenue rose 15.7%, while Management Consulting revenue increased 9.8%. Consultant headcount grew 6.2% year over year, and utilization improved to 78% from 77%.

Management raised its full-year fiscal 2026 revenue guidance to $830 million to $840 million on a constant-currency basis, up from $805 million to $820 million, while narrowing its non-GAAP EBITDA margin outlook to 12.2% to 12.8% from 12.0% to 13.0%. The company also declared a 17.5% dividend increase to $0.67 per share.

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Market Reaction and Investor Sentiment

The initial market reaction to CRA's report was relatively muted, with shares trading roughly flat in the immediate aftermath of the release despite a sizable revenue beat and an upward revision to full-year guidance. That tempered response reflects a key tension in the results: the top line grew more than twice as fast as non-GAAP EPS, as higher interest expense, a rising tax rate, and increased forgivable loan amortization tied to talent investments pressured the bottom line. Investors appeared to weigh the strong demand story against margin and tax headwinds, as well as a narrowing of the upper end of the EBITDA margin guidance range.

Forward Outlook and Key Factors to Monitor

Looking ahead, investors will be watching whether CRA can sustain its revenue acceleration while managing costs that have kept earnings growth below top-line growth. The company's raised full-year revenue guidance of $830 million to $840 million signals continued confidence in demand, but the narrowed EBITDA margin range of 12.2% to 12.8% suggests profitability expectations remain measured.

One important factor is the M&A environment. Worldwide M&A activity slowed sharply in the third quarter, even as CRA's Antitrust & Competition Economics practice posted a seventh consecutive record quarter. Because antitrust work tends to lag deal activity, a sustained slowdown in dealmaking could eventually weigh on one of the company's strongest franchises.

Cost trends also deserve attention. Forgivable loan amortization related to consultant hiring is expected to rise roughly $15 million this year, and a higher non-GAAP tax rate pressured earnings. Finally, investors should monitor consultant headcount, utilization, and the sales pipeline, since lead flow and new project originations grew more than 20% year over year and remain central to sustaining growth into fiscal 2027.

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