EXPO - Earnings call transcript Q3 2018

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Operator

Good day and welcome to the Exponent's Q3 2018 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Whitney Kukulka. Please go ahead, ma'am.

Whitney Kukulka

Thank you, operator. gentlemen. and ladies afternoon, Good Thank you financial third XXXX on joining conference call. us results Exponent's quarter for Please this corporate Investor Relations note on section webcast that of call will the Company's website www.exponent.com/investors. simultaneously at be the call other is or conference any written without reproduction is Exponent expressly of This and property taping prior prohibited consent. the

Executive Officer; Officer; the Vice President Executive call on Catherine and me Schlenker, Paul are Dr. Corrigan, Chief Rich Financial Chairman. President Joining today and Dr. Johnston, Chief Executive and

to opportunities remind may forward-looking involve like that financial Before the not materially contains we would uncertainties cause start, that discussion you statements, differ to limited from following I that results results and risks to, and those but actual including, discussed Exponent's market future here.

results be this statements The statements from Stock filings, Market actual to in caption periodic under SEC and most Additional differ found XX-K. in those Exponent's Affecting recent information can forward-looking factors discussed Factors Price and Exponent's including risks the could forward-looking them, in the are Results no Catherine that Operating cause Form or I otherwise. turn and now, update today to obligation over Officer. result to expectations Exponent revise current conference And as Corrigan, based as new developments Chief assumes a will of or call Dr. Executive Catherine? call whether of on

Dr. Catherine Corrigan

good you everyone. afternoon Thank and

delivered Total X% diluted one us in $XX.X to million $XX.X in compared or per the detailed million million Exponent the to with discussion growth we of quarter the also to $X.XX strong period our million. net of before review growth half third financial call. $XX.X in was the high more and EBITDA the X% Rich quarter, single-digit revenues Paul share. its same Building first of performance of a is X% the my income Following business increased the increased EBITDA the the $XX.X Revenues as provide the to third results third ago. reimbursements year quarter. question-and-answer for and saw revenue grew year, will on and outlook. portion the for

are expertise our geographies. several global indicated our capitalize industries we strong results, As trends by on excessively in and across market leveraging to

net We in growth on concluded and engaged are from quarter better span achieved a adjust in X% market of represents I'm important meet interactivity client even the heels this well third quarter. by revenue are project assignments to their that for to last that human users. needs, X% margin large we equipped the and Exponent growth the the our with and our dictated we are several is guidance note strong needs. a year the once human to this diverse In a factor remain set as of on product to need these sophisticated client leader full between third understand clients revenues, again scope results services lifecycle same pleased studies. in August. the approximately our including other business, of area the and This products strong dynamic factors project at year. project as raising We quarter duration down

demands products consumer source for vehicle automated capabilities strength are industry. services We by these virtual the encouraged a our Exponent. increased in are reality, factor for We clients other and the believe from human of

net XX% months, the nine first Our XX% in the third quarter revenue. in segments revenues and of Company's approximately compared to quarter represented engineering X% third other year-to-date grew and last Net scientific as and year. the

consumer strong especially performances industry. for factors, noteworthy consulting its in quarter, and this human engineering technology practices. sciences, transportation Battery sciences, segment had thermal electronics material construction and third electrical the and the For consulting remains

expertise positioned with to to large evaluate projects Exponent capital and construction construction on services around delays these during plans is disputes diverse provide complex the We world. overruns, expert projects. that have cost resolve and uniquely non-performance been engineering retained arise to our

third third net continues to the environmental year. health year-to-date concerns approximately and of food XX% and and and to quarter as brightest engages seeking industry. for relate reliability across X% represented rise global year-to-date the quarter in of are segment disciplines incredible health, and environmental engineers revenue. most integrated last chemicals. and segments Clients X% health this they issues. grow solutions This Net especially Our compared and Company's Exponent as as their and segment revenues safety, challenging grew range an the to environmental scientists in

our and interdisciplinary to proactive challenges. diverse form ability solutions us to client unique offer reactive Our teams with allows industry experience

third position, and and and strong positions unique strength growth generate business us term profitability. long more Rich client which relationships model provide demonstrate now of results financial to the Our of market our a will review year-to-date our detailed and outlook. performance quarter adaptable business well

Rich Schlenker

Catherine. Thanks

year-over-year Let a on saying me start all by unless will that basis be specified. comparisons otherwise

before reimbursements to increased million or refer up will the as total Net hereon as $XX.X revenues million. to to compared for of For quarter X.X% third $XX.X them third $XX.X quarter net Revenues the revenues XXXX, XX.X% were X.X% million. to I $XX.X million. increased from income to

as this accounted million half large taxes ago. as income reminder, tax X.X% share year X% from of in were I The increased revenues $X.XX that the third compared shortly. previously from the the We year. the discussed quarter. have Earnings $XX.X new net projects for net to to the expected a decelerate rate. $XX.X the to million a EBITDA for ago. large approximately tax project also to had second we legislation provide quarter of a details will year our consolidated compared third more benefited on $X.XX per As which quarter our reduced our diluted in

the we in August. as concluded However, project mentioned, Catherine

accounted $XXX.X quarter total comparison increased purposes, in XX.X% to for the X.X% revenues $XXX.X X% the Year-to-date, XXXX project revenues net the revenues in and For third increased X% net to of million, fourth million. quarter. in and

realized share year. compared to $XX to same in a were million for standard last with compared as nine the awards. base diluted months EBITDA year $XX.X as tax was to The ago. the diluted net $X.XX XXXX. as of year, a was hours to year-to-date million adopted Exponent million or share first to period associated X.X% income For diluted quarter $X.XX share increased $X.X per the XX% compared $X.XX adjustments Billable per $X.XX accounting In in classification million. XXXX, tax or earnings in $XXX,XXX. $X.X of the Year-to-date, share, increased million per third new benefit $XX.X Year-to-date, the

year-over-year period billable which in increased The compared utilization partially project, For was due is large to to $XXX,XXX. decline the Utilization year third realized challenging by the by impacted in offset our as X.X% month ago. nine XX.X% was a XX% quarter in hours gains to rate. comparison the

vacations. there a business our reminder, seasonality holidays of As is timing the to in due and

the utilization fourth three quarter is than result, a four points to lower typically percentage the third As in quarter.

to to expect ago. was We Year-to-date, XX% quarter same in as one as XX% fourth XX.X%, utilization compared utilization approximately the last compared in be XX%, quarter year to the year. XX.X% to

down the up we utilization XX.X% X Technical year points be XXX, to For in year. percentage equivalent quarter from from to approximately XXXX, were achieved full the employees X.X% X.X expect last XXXX. full time in

was to approximately FTEs approximately The rate by third X.X% in the X%. grow expect quarter We increase the fourth realized quarter. sequentially in

large than high utilization of on third rate project. in the during our junior the lower a reminder, of staff average was XXXX the very quarter quarters other XXXX As to due

So higher first gain realized to or the in we as half the XXXX fourth had expected percentage realize a of XXXX than expect quarter in had third quarter. the

expect fourth increase the of year-over-year quarter. realized We a rate approximately in X%

revenues. of XX margin EBITDA points decreased quarter points net basis XXX increased XX% basis the Year-to-date XX.X%. to margin has For EBITDA to

adjusting for last after included year. in X.X compensation of and quarter, increased For compensation gains in million, compensation up $X.X deferred a gain expense million the in by total compensation X%, from losses expenses, deferred

in reminder, to losses in offset last million the on expense have and are was bottom-line. compensation a and $X.X and As gains quarter, the compared as year. income Stock-based miscellaneous X.X no compensation impact deferred million

stock-based compensation quarter. million expense operating in is X% third be expect X.X the increased of approximately other operating to X.X expenses quarter. the in We depreciation approximately Included X.X million. fourth Other million in to expenses

to which in in half our operating we principals other to the quarter, $X.X of expenses. XX%, meeting expect were quarter, expenses G&A includes range For million the of million. million X expenses fourth the up X.X be

of the legislation. fourth in meeting quarter. will the G&A costs are expensed consolidated in be $X the Exponent's to to the fourth expected in rate other million be new million quarter. expenses benefited tax half range the The tax of $X.X from

inclusive the For as last was XX.X% tax quarter, benefits ago. XX.X%, was for tax year a XX.X% compared Exponent's compared XX.X%, the in third of same consolidated our to share to awards, the Year-to-date based year. rate as tax period rate

tax new to excluding tax benefit legislation. tax compared purposes share XX.X% to year-to-date the decreased to Exponent comparison based due the For awards, XX%, as rate for

We full an XX% additional tax is to quarter it the of been lower our tax year as tax XX to would expect of which than in our XX%, fourth approximately rate million consolidated will net be result $X lower approximately generate new legislation. have This be million to rate points $X.X rate tax and the to a XX% to XX% income.

the of which our Today, capital term we $X.XX million dividend to for per operating towards Moving the flows. development dividend short flows is in quarterly XXXX. Year-to-date, of distributed new Year-to-date, fourth investments. payments. cash quarter the scheduled $XX.X building, cash be which million share of of $XXX million, with million XXXX. We went to were our quarter ended million have we the in area $XX.X to $X.X Boston middle shareholders through expenditures announced of payment another completed cash $XX were of

and increasing For our are revenue year margin we growth the full expectations. XXXX,

August which year-to-date comparison factors the areas, Our several momentum XXXX. by partially year-over-year due outlook in of project, performance the in reflects human offset concluded large our to strong positive business and challenging

revenues the year full in XX.X% the as year growth XXXX closing to middle a from revenue call the as We increase declining points now XX achieved the the digits Catherine compared the to I single XX year, for including to margin for back fourth is points quarter period grow to expect EBITDA in expected high-single XXXX. basis digits. before the EBITDA XXX margin same approximately This fourth full for quarter reimbursement compared last will turn ago. remarks. to in basis in to year the includes

Dr. Catherine Corrigan

Rich. you, Thank

changing market throughout capabilities have is demand. multi-disciplinary highly adaptable with geographic Exponent's truly year. pleased to sustained our are growth the market differentiated that and We created a offering reach

While the year testament this the comparison, we a we resilience our a have presents of full to are and year-over-year We last margins. challenging revenue we still over plus anticipating and the EBITDA future. the are that growth years, strength about fourth XX and excited business quarter is believe strong built

delivering stakeholders. our focused for significant long Company positioning We value for strong are term on financial success, the and creating results

open now Operator? will call questions. the We for

Operator

Thank from Tim question come will you. [Operator will Blair. Instructions] And William our first McHugh

Tim McHugh

some the more project. I is on of guess that picks they about And I there that Just anything these any -- guess thought? project point. just sooner wanted of about it ended I up, you color the end to performance it that than the chance nature but ask the at kind can was anything understand that's large some time, any there also is at conversely on there back

Dr. Catherine Corrigan

Tim, regards we in to so, we generate where and the clients terms were them. with pleased very are are Right, for that we of able data to the

this you As product gone throughout very has pleased we the time. generated. with It's for been some large know, client quite work on a the been And work, have that has quite the project.

of performance. pleased pace This mean, I consumer space. not perspective, it there particular in innovation am was absolutely occurring technological was issue at to from the occurs that that this product an So, I issue related an very

So, a was needed to they that and brought project the they the had close. data so

of of We they continue do continue work we restarting to had, in projects whether have it, area. one good this large to is of very that that be with with the believe anticipate news happening. scale, this are do client, They not not we terms that same concluded. In them. that this we But we to anticipate but the

clients. And So, capability the with capabilities bringing area. other fact market that our that that is a testament we're the they're to in pleased also that out very to to

be believe going we us a area of source forward. particular this that strength So will for

Tim McHugh

broad I projects redeploy potential unusual this event? you even human client others what's potential is a guess, understand an as for guess for just think for of about I Or to this was, size? demand was the trying this resources? size there on other projects I really and And taking a trying of we different factors scope, project guess those to

Dr. Catherine Corrigan

the from the I firm. across disciplines not one I think that And broadly on our Yes. it's, I note mean all were with here. the in across processes that important all, project able of engage well, came thing it's about resources, this staff the to mean, to redeploying utilize we if nearly folks we

so, into projects, well, our able of staff relatively to flow portfolio broad we're those as easily. we relatively diverse typical the And conclude projects more back

we're those people that to or single the so, might a And practice a happy have you contrast involve and it's flow where all just situation single projects back in area. to just in group

So, in unusual that possible, are we this of believe fairly that why the is scale. is we near-term. to are, that at anticipate -- having It's we we some large on. of this a things that certainly that scale, we the strong. regards our but project We business But do necessarily fairly don't is likelihood part be feel of will get not would ongoing it banking with that this something

Tim McHugh

I something bad to the just that I even picked up I and project, that Is math. quickly was this a the to tell things? that this a at don't how But that -- sign just business? I the Or picked is there off up so guess, redeploy into quite when I is, other in project look bit. that way mathematic, understand at excluding quickly how last a I excluding look able if a else this there people maybe And actually say, Okay. look in it's rate as of at that quarter -- you areas, other those redeployed are think project now large guess, growth about I rate, the be got growth could you it's question is if know it.

Dr. Catherine Corrigan

there consumer very, that very think areas of business terms opportunities. into area, the other only redeployment at space. space, about one also we’re but battery folks I look parts, There’s that electronics of are work very we That two the in excited is right. transportation active things. there But seeing doing the the Well, substantial not is we the When in growth are in other underlying are we’re of consulting. in traction

actually strength where something across capabilities industries, there. that that’s So we our porting are seeing

We’re on regulatory This in proactive work as work some by area. seeing as side with side. agricultural both well strength on chemical the driven chemicals is reactive our the that

unique. that, our Another area place strong I that infrastructure offering is to related might is in we’re construction seeing international point That out and where traction a pursuits. is is quite

able in and able really integrated we’re expertise but to only the we table is quite expertise issues, deep are this not We to bring construction we that to for delay the terms offering finding also bring have. engineering damages are of market and that, that hungry that

back So, strong. are parts we’re yes, of to other we’re but able also seeing project, business quite the flow that into the

Tim McHugh

guess? different, be strength anything the I guess. throughout similar that And may trying I seeing I been be the clear, there if just commentary to that guess to I Is up stepped XXXX that understand guess of you’ve those level of any of felt some just sounds in to fairly trends

Dr. Catherine Corrigan

that’s feel be quarter those are particularly areas right. this that that things market there those like I And for exactly drivers are strong. not over it’s just are where think We for Yes. and strong mean, will the time. I

it if what sounds absolutely yes, quarter, similar heard might So is have we’re that. actually to last very you glad and about it

Operator

our comes Sommer from SunTrust. with And Tobey next question

Tobey Sommer

shedding that mean project you be Does With throughout want it the resources? as understand that. client, of really respect slightly of ending? utilization, a disciplines kind a you from of sure many, any draw Just referenced is there to that many the the to have how result lower just firm. I large last function to Or make won’t of

Dr. Catherine Corrigan

Yes.

off. project right. any reduction staff do related We So, of this kind coming not to Tobey, exactly anticipate that’s

In talents, senior as with portfolio to because strength fact, recruiting be along level both junior that aggressively of we at projects. particularly areas top well as the diversifying at that are very we the the human of continue level, mentioned factors, in I

folks medical And out devices. in business that go work We’re growth the able more are across of new they’re that and expertise. areas, across folks transportation, in, PhD of their electronics, because are of drivers level bring they in niche across we marketplace to because we expect the find the doing user and they experience

opposite. not be grow in expect So, the but it’s we We staff our staff. to quite fact to only, shedding will continue not

Tobey Sommer

dialogue if dynamic? realized headcount for typically how your to there on be But and I'm any is in know your respect I addition? about future. the of know about change talked out is does rate the about bill that kind I additions, economy strokes -- your pricing With wondering far you curious in And more general are picking expectation what there inflation broad increases. up, in I'd headcount too that plans or net

Rich Schlenker

Yes. is Tobey, Rich. this

I point long First the of will But of that done in X% we headcount at continue in we X% headcount that planning what in organic side, all our our actually additions XXXX. model right process will middle that our be. over range we haven't for model continue think time. on We're That's to to X% X%, to the specific in year-over-year and the continue is for growth as at headcount. -- this we the range from look us growth we think term believe to

that. about we very are So, positive

As fourth growth going that we're and from We to see Catherine that grow. quarter we'll continuing to headcount third sequential indicated, indicated on front. recruit

But and term a again, to increases go, believe As to far increase, really period back, continue that, a that is over our been of where engineering depends raise to annual looking the our have able that from currently rate expect for range we're And rates increase for time of be rates. we overall on able people on But we as scientific on long the if at X% rate you years of have over in X.X% more last I high demand in little we to range basis. demand. some we're bit realized continue the rates at mean, that the the the XXXX. looking our but modest, look demand. to rates indicated been you've in to the that decade as inflation is

Tobey Sommer

XX an us think to initiative. about know key update of initiative? update industries? on But for ultimately you the kind long-term where your that approach on do growth last it's you give of are I you the we get addition I derive sales now what and during Can together to consultants might an a these around talked know your from to and call curious kind market days I'm you

Dr. Catherine Corrigan

focus I'm learning the clients human these in our the over work, let's selling the for our by expertise say, of a particular table. we in we've by with a be seeing and experience they our one know Yes, deepening industry our and to the factors been so terms actively deepening of existing right in clients. around and key our now number are be I particular the us to out user of diversity in bring client perhaps players regards clients to, cross Historically, better relationships. relationships, have In related been really battery and that with. But with relatively we continue consultants industry, recognition a Again, but can I seeing they'll And the that involved those that a of we're working relationships that. I know focus, area. is work. of am clients, and our the to might effective focus strengthening have is engaged the us a

we're electronics, is And the And year-over-year positive very look strongly growth double approach. so, this we this way. look that at know I are strong is I'm in growth. with evolve let's the at, along you of I furthest That where growing area consumer a achieving which say, seeing kind digit in, process area very when

into for client And grow porting different we doing necessarily industries. some there continuing industry are other practices expect are that seeing consulting even are on are are and of that But industry from others, taking is best we hit see and within our so, is relationships. quite out of lot we those this coming overall every is hard to an I well that And that client teamwork that these But like will to the ranks transfer some laying and things are of best industry industry. them I'm that. which of building work is the practices don't foundation client what we we really what over over the to with and from a working

Tobey Sommer

kind think years? of Last me of us and the be you is. what how three question Company sized about -- a to will how play into sort current business Could talk dynamics? And over will you to five from be that your do it more medium to international

Dr. Catherine Corrigan

Sure.

is see So, think than right has a when average that now, faster the business. average. business But that that, look probably about international of the XX% bit I at our been we growing we on

we're of is but that to engineering. only there more the regulatory in due area, getting not in that Some traction doing in over growth we the also are work the chemicals

well disciplines consumer are engineering growth. related in industry traditional we electronics are regulatory as to in work Our as seeing where over and areas Asia Europe work the

anticipate So that that do bit small term part average although the you that's sort talk about the I than in would will a of average. the grow that that medium I of overall a on think part faster business. it's that business of

Operator

And Fitzgerald. you. Joseph our next Thank with Cantor question comes Foresi from

Drew Kootman

wondering, Joe. revenues proactive Kootman I could is This you that? Drew the is on was what more little and on provide for color a if driving

Dr. Catherine Corrigan

work is strong. already I've particularly a number consumer little proactive a and So, consumer where the the space of electronics. talked product there bit areas specifically are about

So, engaged really this lifecycle. number ourselves in of space, product the find around with we clients a

that side of assistance that'd the that through be transportation with design the advanced kind human reality in driver a deal having cycle, what of traction and occurring clients terms being then it We're users the whether particular understand from can as technologies. wants seeing iterations products the product. in that part life side, to project of of designing experience between from on very lifecycle and the So, be their the early virtual when be interface are as developed, are whether great are the

seeing we’re there. So, strength

in side, a and is we’re that within environment resource constraints the only industry. able step to the mergers particular to with stringent, chemicals to that scenarios and where hurdles. more sort particular, seems the have happened see get help continue those On in the those that We regulatory and of them chemical also get have regulatory agricultural clients place where through

a infrastructure Issues are in integrity to management material of those that of to science. utility work. an of area So, number areas like suited is our the addition metallurgy, utilities traditional the our around that disciplines is very well engineering

some so And by in are example, traction utility we seeing clients of the way good space. across

So those you. I some for think are good examples

Drew Kootman

how about next longer margins heading and year think into term? And should we

Rich Schlenker

XX% at XXs, operating we continue leverage continues improve can Look, as end Rich. a the we in in give XXXX, for but there’s Exponent that room margins high-single-digit can middle from to to for can that And we grow there’s gradually improve on side. think our where some the and room towards of that the revenues, up somewhere guidance the there we time that in that and that the is think in if utilization improvement. be to it year grow margin is continues single-digits, top-line gained. This middle the believe on this help for to range call we aren’t If prepared this we’ll

to to XX years something the we expect might average out be five basis margins in three So, can on annually. to that the the still XX over would next we over of think that gain time, points average

Drew Kootman

then higher. at just last balance sheet. allocation Can the strategy at to balance The And all? looking continues the changes you question get cash your discuss capital

Rich Schlenker

Yes.

We’ve in continued a at put the least earnings to faster we’ve would the last in We faster earnings near-term. We that it the place increase years expect over dividend. ago. look, years. So than this to few than several grow grown

a occurred back dividends timeframe ’XX look those pace. one-time in that the year ’XX, growing the to be December But you be overall, tax excluding strong we would clearly, last legislation. we over for at As expect adjustment at

will have active We $XX been we we Clearly, years expect our with stock currently X result, that. in expect repurchase to continue over demonstrated bring be that repurchases. our chase in we supplementing stock in got repurchases to under as more haven’t the the be be up. million that the been able and active balance we active X We’ve on authorized to program over overtime and to have on sort cash pullbacks rises it to do to the be next down. the to continue of one to But long-term a stock

Operator

And with from you. Thank comes our Marc next Riddick Sidoti. question

Marc Riddick

or Following up as path a there general of balance that think guess Is just already an million on to process me, we're following on. that or $XX up a excuse thought that I $XX -- on, around balance that optimal should still XX how XX kind we million about numerically?

Rich Schlenker

Yes. That has not changed.

Marc Riddick

you're areas thought bit on can and to as that sort might going what give pipeline as you general update what of as as into a some for but front? you the without looking be to, in acquisition us of too an acquisition Okay much great. at out detail, attractive you're to maybe little a of there then moving sort seeing if far And

Dr. Catherine Corrigan

Sure.

say of presence good fit be are in right where bit where that of pharma a could That is but could I example some significant that there a it areas space. think, we area not a we've have related consulting way done could an a That market. work, So, would find couple had new for in if activity. the to be we a see

eyes have we place a So open that where certainly. is our

think science. Another or area be I seeded around with expansion that for be acquisition right could be computer could a would small

player. we authentication. some not something is where do We about in think that but you work cybersecurity, it As our area, have substantial

So, that would cite I areas those interest that for certainly you. two are ones

Marc Riddick

the proactive wanted on spend certainly And on areas. on then you're mix to circle we back time doing proactive I reactive what the

could reactive So kind wondering I a maybe And you though that? in bit but the still it faster of give looks keeping wanted than you've like what a you're an faster give looking of mix in I reactive, if than I sort growing currently what's busy? bit on, that update you it what of And business? was as seeing an side guess of reactive been me, could excuse proactive update on if sounds at growing and of the

Dr. Catherine Corrigan

Sure yes.

reactive on of the business there few the areas. So side are

working area. zone we're products recall. about in area of reactive, general think in on investigation. in transportation in that between this active very consumer sort a gray we're also are and is defect And area to And response recall of the to routinely -- you that but sort side. Those maybe so As related proactive much very product the in

those are the large work I also would not arbitration. the also strength sort traditional is we So more dispute, failure industries capital simply but two would I This international large only are analysis. there. related of is projects related cite to that in to that doing of reiterate

they So, forums. related but pipeline and failure the analysis related failure these difference not or The we're that in seeing. may be necessarily they're being international construction reactive litigated being analysis disputes to issues arbitration related large that aircraft are

build So to three. our really, considerably reputation last year for will something or it's And up as grow that or believe ramped we has us this that the in has is that space. continue over something internationally two we

Marc Riddick

I however change of me, far wondering might related about of to when out. a that what from is? trend as thing it? you comes want might anything bit seeing? thought you've you last what be opportunity thinking But perspective events or Is we should a difficult as was terms or be Or as to I this events kind to to types weather related parse from was one there climate we're the and what seen those Then put it curious if about

Dr. Catherine Corrigan

there change, climate Yes, sort folks to using a various look certainly, to so and of predict of of events the that. mean, at weather if are the are respect I as models of you that the with that likelihood sort consequence occur severe

at the in not of business the are least predicting at moment the weather. We sort changes the in of

there Hurricane the relevant and over an industry, industry, area what climate great that I the of and with risk chemical and opportunity work I be severe management Harvey. occurring, risk. proactive However, think say, chemical with gas could with the we've regard the releases I And those. evolving do is that associated that with with was that concerns managing seen believe an understanding some events to, let's risk weather climate is assisting the the clients and there is very oil preparation and change, to were change around there believe

one And an the opportunity example so, able that's where I business would think on grow to proactive of some side. potentially we be

Operator

Thank you.

question from next Berenberg. with England Our Sam comes

Sam England

the the linked then just hiring to thought had tough And the on market? you moment? a environment that comp bit, competition that the is hiring touch in the up Could gone is tool at I how

Dr. Catherine Corrigan

where programs job Yes, PhDs so Valley, where is whether headquarters about competitive certainly of competition our are Silicon types that grad, the we the grad, or that of these those what have When looking it's such you. areas, level, or hire like is out is. or geographic top places people about are we of the Coast market. fairly Stanford East junior of There are seeing on places Berkeley, particularly our a and are MIT York think no as an it, to at New some in fierce. you course, doubt And Boston

are competing way. good in some that base but healthy So, of we news a for compensation client the the is packages, have is we also companies set that that the with having compete to with talents we're

client they surprised well that the we to folks scale to keep these order by to talent able recognize accordingly. pay community for need and our that And billing is we're charge not in them, rate we that. that So,

need absolutely that need and in So of offers competitive. to ourselves competition to and to although, we best on our top do our we we to stay keep be, need find we

of marketplace. price adjust we terms in the in that are to able how We for

Rich Schlenker

just one growth. increase this year Sam, I'll pretty thing, our the you And know in add much our revenue compensation in line with costs is

growth. in line they’re our So, with headcount

growing So, headcount X% growing on a that compensation And X% raises basis. you’re seeing year. year-over-year and last over includes the is that that is occurred

line hire headcount you we’re junior with more able So but pleased revenues. manage and growth that down have our in within staff, to pretty been you of we’ve do that as is the sort blending some

Sam England

things the pretty demand And the is for presume have? as you your things important have electronics any I consumer you seen that churn on well the particularly types rate especially the high like where guides, of amongst changes staff in

Dr. Catherine Corrigan

Yes.

and professional that look find of leaving you we they substantially ours, has a we So for going find consistent. folks it turnover several is They’re think to exit seen premium do years. it the would in what consulting we with they’ve consistent are primarily last our we and The though, competitors in them. data our we expect when we about news learn fairly usually at isn’t do that at tried not kind that, been increased But are haven’t It’s turnover and they interviews of it decided level what consulting where services we fairly when really organization. not, good. is good which the see is going certainly we junior our because ranks in

our for potential flow And number actually at And we’ve a then client ambassadors of good organizations or into client they the to least so they often sponsors examples had us will or become very where very those organizations. organizations. within those

So, something as We’ve to for is work the it where in But the I ahead it’s business. got headcount. turnover they’re stay think of positive and I terms of that our to steady. fairly grow going, see

Sam England

contract QX the win. on just then And

new that So is clients? more come clients or from existing/previous

Rich Schlenker

clients. to think is from business see coming Yes, the our revenues I We mean, we majority of clients. repeat XX% that our continue repeat are for of about

into get be and repeat is traction to coming some automotive consumer look discussed, of increasing new clients in definitely revenue some Catherine I such we’re not are might some picking areas new think there, existing the It’s deeper some -- you from products is -- those of over to new we’re relationships work with as when Clearly, ones. most and the the clients. there up us. strength about, and that actually as building that beginning industry, with the of players again, not some area disruptors such see some the But that players to base.

Operator

have this today’s teleconference. further And at no you concludes And questions we now may Thank you. time. Ladies and disconnect. gentlemen, this

Exponent (EXPO) 18 Oct 182018 Q3 Earnings call transcript