Earnings call transcript Q2 2023

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Operator

Welcome to the FTI Consulting Second Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions [Operator Instructions]. Please note that this event is being recorded.

I would now like to turn the conference over to Mollie Hawkes, Head of Investor Relations. ahead. go Please

Mollie Hawkes

which to the Welcome reported Consulting call remarks, conference morning. your Good second the quarter discuss after formal with company's will as will XXXX to take Management questions. morning. begin FTI they earnings this results

begin, of to remind that I XX of and the call Securities this everyone meaning the of like uncertainties. statements and Exchange risks Section XXXX forward-looking Act involve include within would Act the of we that conference Before may Section of Securities XXA XXXX

statements statements our not events, and matters relating repurchases, and including historical, financial plans Forward-looking include goals, share future concerning strategies, estimates and other are results ESG-related intentions future performance, other statements plans, regarding future matters. information or to objectives, acquisitions, trends, results financial or performance, revenues, other of future business that expectations, matters

and Safe available of events forward-looking that For website copy the review to as well risks Risk our and for our with the is in for of XX, report this and the as December of release morning, which under at XXXX, from a our issued in our cause or statements, those XX-Q differ June a other contemplated by the the Information in the earnings filings Harbor on disclosures on actual Form should results ended www.fticonsulting.com, press on XX, factors Form discussion XX-K statement headings quarterly quarter SEC. Forward-Looking investors XXXX, Factors report other annual year may ended

be of undue call this the which not forward-looking only cautioned and updated. as statements, earnings place to any of on are Investors will not reliance date speak

adjusted adjusted operating EBITDA, discuss such EBITDA financial will margin measures cash earnings income, free share, as non-GAAP total total adjusted income, segment flow. During EBITDA, diluted net per the and adjusted call, we adjusted segment certain

investors should directly as financial include morning, measures, financial review which our that accompanying this financial non-GAAP release and the of the a to most non-GAAP discussion other press and comparable reconciliations. well the measures For measures as tables these issued GAAP of reconciliations we the

are two and for have include financial your to been of our posted presentation an data, and second Excel Investor our XXXX include of results. there These Lastly, have operating a historical been updated Relations items quarterly our and section PDF that earnings website reference. the to quarter which

have note, I've directly to quarterly same earnings during consistent, will the Investor Investor said, speak posted as ensure section are they of provide disclosures Of presentation available To to website. prepared and, remarks, today's on section are our of they not historically management Relations website. the the our as details the our Relations

With Gunby, these our joined out Sabherwal, Chief our Executive Chief I'm and Steven the by of today Officer; Ajay and Officer. way, President Financial formalities

Chief our and Executive this over At Steve turn call the I to President will Officer, Gunby. time,

Steve Gunby

and Mollie. take sure more of Welcome, once the you on this will for through us in this Ajay Thank earnings everyone, joining many detail. saw this you, morning. again us announcement performance thank morning. the you I'm call

a to Let few me results. perspectives the upfront share on try

top ultimately in have I talent elements two in of terms show in face in of the organic on years, and them of revenue core the I'm few delivering attracting underscore The and consistency attracting have of growth, revenue in We've growth terms in these are talked in in success. have as terms of of them the and our revenue again professionals. strength the past. The we terms the and of about terrific organic to to showing we both and last first well going shown busts both the retaining think and that both of the market. COVID are in strength terrific the is we consistency growth, terms continue top shown booms we in been particular, in the as today retaining

that. So I'll emphasize

we fact also the But met about which have point, expectations first to going second is a talk I'm our not of year. the earnings half that the for

our missed year full we are sufficiently our fact, guidance. expectations that In lowering we

some we I'd multiyear The be come in two on. the and on is come as they point of back points like been I this thoughts it third to come how those that company means what together more I'll to, on, share perhaps continue terms Yes, for to do for but year, has believe how together. the important, trajectory

talk let will forward questions. then Ajay floor usual, take look me And of to your you quarter. the we opening three the then to and So as for the points, through those details

our In might year-over-year underscore for the just terms for to that growth. And our Year-over-year, strength level in and year. -- of expect, line so in of even the that Every revenues of each revenue want here. two the given quarter, segments, delivered our contributions grew our quarter you highlight before of revenue this XX% the organically. it's And first normalize first that as year-to-date, talk FX. multifaceted. point, the XX% overall segment is top you to And results. growth me Ajay let the will growth were the to strength, of half I

globally. to year, soar. sure of team strength. of M&A now it's years Tech our this notwithstanding delivered And I'm activity as muted business you First, That have many multiple Tech noticed, has continues

world We major places around jobs and with in law are the winning multiple with firms. major corporations prominent

second business out FLC. to like The I'd is point

it to for To while. expectations we you been investing year of a As some in the year importantly, data our in terrific underperform investigations our from particularly it quarters performances in many we've last a know, seen and, in see strong quarter half first potential with FLC whole. And me, has, have analytics sub-business as is tremendous beginning actually FLC and this show it of the businesses. to the

delivered bit, just examples. this across this little the talk two will segment -- two are growth. Because in Ajay, those to and board, others. So a every the quarter you year

minutes to level of can a guess to let key how have I growth, I what few turn this. me were would that is I you earnings not question let So growth? With the me revenue also show So listening take giving And Fin, do question. only to broader you example use that our Fin, apparent more via one of me that businesses, of illustrate of not the and example, let or Corp disconnect on an disconnect. that but Corp as best if an

revenue actually X%. I had revenue know the And it is think half for But most people face terrific of of on the business the of performance, call, that Fin the ours. Corp first declined growth, adjusted EBITDA in this you incredible year, an our XX% XX% growth. a in

There reasons. does how several that are So happen?

higher for is revenue see general, your In First, if same you, the margins. our course, XX% of total revenue than head your count was period. on less XX%, than up the count, pressure up head

inflation. because accentuated that these But gets pressure days of

cumulatively. We been I what no inflation inflation of might about environment or XX% three you suspect longer or metric year, whose globally. are it over depending less the in an U.S., on there's X% be or In about years, in X%. This U.S. the use, forecast

grow. our consequence, up higher is Fin, structure, in than line was cost non-billable XX%. as total was Corp a because our of including quite count, inflation, which, costs, and billable of it didn't a course, not of but XX% bit in segment So EBITDA head And adjusted up XX%

the else has that inflation, If is you One during surprised lower beyond we've us look what attrition. year? had

XX%, been, of higher somewhat. head have our up XX% have up and couple gap XX%, a this that would the be had to If of it attrition closed points quarter. being count, instead been would or expected We

we people certainly here. So Fin Corp attrition. terrific want business. out the find found we we talent, least hired join as as to And and can be terrific because believe talent also in I long I point this companies think when hire, clear, the at we this to we attrition, year and we business, many do and out half are pointing we quarter

So typically we when continued you And it people, profitable senior hire. is hire to initially. not know, you as

strong actually revenues. a were is slightly we the revenues Fin, even is one, expected stronger first year this which the point third different for as and Corp quarter this half of in The as

us in bankruptcies year were people about or the about and in think If bankruptcy the back thinking a budgets places pace multiple set of we what a the you world. ago economy were around fall most think thinking I year most faster the being forecasts, this of expected and when in

Some folks, a didn't We did a certainly we world. boom. places observers, but who boom, the expect expected outside strengthening expect around are in multiple

to in X%, places the Corp seeing put been the Corp gain, of XX% instead change instead points of up gain, revenue down Fin strength different had few being And strength a how in some in Fin we're had revenue, seeing world. a we results around have adjusted segment places. EBITDA, seeing XX% weaknesses revenue XX%. are not we're if, would our we to just we and perspective sensitive are in But have and some certainly every Now not boom place,

essentially, the important revenues to Corp example Fin grew set it's the the but shared we course, company the understand there. also happened subsegments changes different structure faster. XX% at themes this quarter reasons just reflects actually Fin though the weighting highlighted different cost look I regions, happened because of the But it in the level, you that that and of what in grew and when year-to-date, and largest various I XX% general our And illustrates our three a principles example. the around places Corp firm. story it's, At segments, So of of various

attrition. is first The lower

were slow, it. found The when that on in jumped second we terrific we places where we even talent,

And a year the our not place is third we some expectations. versus did places, some revenue have but versus every shortfall, not but last places,

why. was us the year the actually quarter, So solid quarter and it the for those Even of disappointing. will a were EPS three terms Ajay EBITDA basis this are a of adjusted for though, half reasons first say, terrific as revenue, in

Ajay other clarifies. some segments. will I the more hope through of on that some go details

turn you does which leave generally and us the the the And take leave point, let of where where third sense respect what for medium it to but is year, to long us us? I me to where some does more with most guidance gives think a So leaves the it moment important term? maybe is that

for on. and not stay situations absolutely, any I, environment, course, of just hate I what economic global disappointed we grew to changes to what for that will Look, guidance. in In this of I we year-to-date. at fundamental Having economic and said I grew look revenues believe trajectory the this me the I talked we guidance grew company and XX% and been we face, this talked of hard of long-term that, little, am am. the lower face about we it lowering about positive say face revenues just year? a is what has the the -- on environment revenues

places some And the so current moves was invest found we hit the great talent less aspirations. even had those face our And utilization the we yes, me, ultimate we the than that, in of where incredibly you the market, behind of revenue for see lower than in those is of in the course, other And in we invested. that attrition. And available of did term people is wanting top of in of any economics. short investing for to to this growing how you, anything potential it's hard factors, terms company. join talent, terms positive line great great some But

to revenue been this year, able so not many five years, prior drive We the the but -- only different past growth over circumstances. through or have

that slow downtimes restructuring, active us has in boom double-digit markets in to and markets through this average organic to COVID; Through company in times important me, allowed that a rediscover way services. restructuring; professional allowed has M&A also but most growth. formula in the through To M&A

attract you who then clients, who people valuable will clients support highly those about work for do work valuable and great highly great doing If people. for you care

of great virtuous you to them areas willing professional significant you attract services. behind of firm, people, grow, invest and get And you loop into as you're other client you in a if need, prosper, the

the am clients at Of by has. better were we me, our points this important are to am. most earnings I and by year? by Am talent? Am ask you clients last indicators serving ever way few the by I the disappointed I far, about disappointed their course, me if that future No great Am So getting on our company to bright of performance? These I I thrilled I attract able are, absolutely No. the revenue the serving am. best this we way. disappointed way needs? the

you With that, take in let to details. through Ajay to turn more quarter the me over this

Ajay Sabherwal

you take Thank and everybody. prepared my you, guidance through the will morning, Steve. Good I In segment for and discuss company-wide year. our remarks, full results

growing delivered Beginning XX.X% the summary, year-over-year. with quarter our all solid we In we record a revenue second quarter with results. had segments level, growth, revenues. company with At

net talent financial growing continuing with those billable income increased XX.X%. XX.X% year-over-year. XX.X% Our increased and globally adjusted add while headcount We EBITDA achieved to results

than expectations. first results were Though our weaker the for half solid, our internal

mentioned, guidance revenue lowering factors Steve are prepared will lowering remarks. this our midway and we range. my of year, As guidance the I discuss towards top revised through guidance the the end shaping end our EPS of

FX. million, compared revenues, prior-year a higher our of direct in Revenues an from $X.XX rate the Turning $XX.X per Net million increase higher by in prior-year XXXX second $XXX.X quarter. to to $XX.X in quarter in million the quarter. compared to which and million was effective Earnings offset an in due $X.XX, compared tax to quarter. compensation higher was $XXX.X increase prior-year million of partially SG&A the This impact detail. increased results costs, more to income of $XXX unfavorable share expenses,

of million the revenues. year-over-year of XXXX. expenses. were expenses services compensation or $XXX.X $XXX.X quarter XX.X% SG&A SG&A to million, revenues, of and of expenses increase second The outside was This primarily XX.X% due to of compares SG&A in in

Second EBITDA or adjusted quarter revenues, to compared in of or XXXX XX.X% revenues, quarter. $XX.X of $XXX.X prior-year XX.X% the million, of million,

The of tax increase vesting adjustment prior-year rate compared compensation from XX.X% the foreign due primarily to tax an quarter. rate second a lower shares was fewer to effective XX.X%, tax share-based in higher quarter Our discrete effective to taxes. and related in

rate We tax between XX%, tax expect includes XXXX full XX% our half XXXX effective of first to our XX.X%. be which rate and for year

QX the of year XX.X compared million quarter. outstanding, or prior shares, to in Weighted average shares shares million for WASO, XX.X

Our that of average our for XXXX, the WASO, past quarter, quarter a EPS mature impact XX, this August price notes $XXX.XX was potential approximately on conversion in of the X.X had threshold million convertible above on shares dilutive included price. $XXX.XX as share

of January the during principal we in reminder, we we disclosed amounts X, the XXXX, a shares. And to of the XXXX, premium quarter elected have elected in settle As cash. on notes settle that the second to

by increased period. XX.X%, headcount Sequentially, same XX XXX Non-billable compared Billable head to or increased XX professionals, increased quarter. headcount professionals, increased count by professionals. professionals, head prior the by year non-billable XX.X%, by XXX the billable or for count

share Restructuring, X.X% was Corporate transformation for revenues the restructuring for Now higher increased which level. & and segment $XXX.X some the insights I offset demand by The services. In in to primarily revenues Finance of business was prior-year services, at compared transaction to increase will demand quarter. million due partially lower

quarter. XX.X% Adjusted was includes segment higher EBITDA increase expenses. impact in of a compared or segment of decrease revenues, segment segment $XX in revenues, EBITDA to million, million, or XX.X% of headcount primarily of SG&A to $XX billable which higher XX.X% The in and the due compensation, adjusted prior-year the

year-over-year successfully share services, decreased XX% we of and Restructuring The year-over-year X% of entertainment transaction XXXX. and revenues a as of software revenues in declined XX% restructuring transaction XXXX. The utilities, XX%. XX% in XX% grew variety QX grew clients XX% of of transformation XXXX transformation healthcare, revenues of as airlines. in share of and QX business to in such to media revenues Business increased verticals from and revenues helped XXXX in from QX QX and

activity transformation basis, offset $X.X in sequential XX% revenues million or decline was level to This Growth matters. transaction sequential was increased a X% QX revenues in increased in there X.X%. business from while with in On slowdown restructuring significant by saw growth slowed the revenues X% a we low a XXXX. revenues as several

includes decreased increase billable than increase impact revenues. as compensation, in Adjusted offset of and headcount increased more the annual $X in salary increases, a segment EBITDA million which the X%

to higher increase and XX.X% year demand of primarily Adjusted of revenues, $XX.X services. to and The revenues, prior-year quarter. in for $XXX.X segment segment realized segment analytics rates the in of data increased Turning and investigations XX.X% or XX.X% to of million, was Revenues prior to due bill the or revenues EBITDA $XX.X quarter. compared million FLC. compared million,

offset which revenues, or offset health Sequentially, million. in increase adjusted to in which lower SG&A higher by data increased to revenues partially services. and for was by and increased increase Adjusted X.X%, analytics segment in partially demand $X.X due increase The demand services, expenses compensation, an million, by an higher $X.X increased primarily EBITDA solutions primarily was EBITDA was contractor and investigations expenses. due for segment

segment services. $XXX.X antitrust, to and segment's arbitration Consulting segment M&A-related to of $XX.X increase international variable was of SG&A recognition XX% rates, higher prior-year of in and related to Economic EBITDA the previously countas to head was XX.X% million, The offset increase due in Adjusted as was $XX.X for compared increase quarter. increased increase in prior revenues or segment revenues primarily revenues, partially higher million the XX.X% quarter. billable revenues, adjusted due Our in realized segment year compensation, an non-M&A-related revenues, which an EBITDA demand bill XX.X% compared from The the of of by revenues to in higher million, well compensation higher and primarily higher primarily antitrust or primarily deferred expenses.

and $XX.X adjusted non-M&A-related and million. was by segment antitrust services. or increased Revenue revenues Sequentially, growth XX%, EBITDA arbitration increased million, international by our M&A-related antitrust, led $XX.X

As not I revenues experienced typical QX for call, met. of quarter, recognition than our from deferral on mentioned last earnings more being conditions revenue we

segment more typical recorded we revenue, from revenues large $X.X in experienced million. million This which of one matter in quarter, reversals EBITDA periods, prior which by including benefited deferred adjusted $X.X we than

year higher services, revenues, in offset Technology, increase compared demand higher The segment $XX.X revenues, In segment partially XX.X% and to The increase or in revenues of headcount. million, the Adjusted was privacy EBITDA to partially was compensation, $XX.X services. primarily investigations security the which includes was XX.X% primarily for segment demand adjusted or of which quarter. impact an XX.X% $X.X governance, in by which and EBITDA billable of of in segment was million, by a to to litigation offset for in information the increase prior-year revenues lower million prior due increased revenues, increase of due XX.X% quarter. by compared

primarily $X.X litigation Sequentially, or increased by revenues Adjusted to million, EBITDA increased due investigations increased X.X%, services. and segment demand $X.X million. for

of in affairs to increased and Revenues XX% segment $XX.X compared revenues, higher quarter. primarily corporate Adjusted million the $XX.X primarily compensation, was revenues the in XX.X% in Communications demand headcount due million, to includes EBITDA increase XX% or expenses. was adjusted or in increase Strategic impact EBITDA of was public to segment compared in reputation segment of revenues, SG&A The which for by quarter. partially to which higher increase billable million, prior an offset a segment of increase segment prior-year year of the $XX.X in services. revenues, XX.X% and due The higher

Sequentially, services and of primarily assisted as broad demand Adjusted across reputation affairs million, clients increased or revenues to range by industries. XX.X%, EBITDA higher a million. corporate segment $X.X due public for we $X.X increased

the ERP not higher in collections. new salaries, payments, the Net now largely part in system. due in of used was me net which growth of an key our to for the billing operating and discuss to balance due cash $XX keep did activities cash of increase XXXX. was flow quarter cash operating items. Let used growth in to an million quarter income year-over-year cash operating sheet and in The million Cash collections related increase by to offset of expenses $XX and second activities transition headcount to during a primarily tax in compared pace revenues, in with quarter cash net by in operating activities the provided increase partially

million $XXX.X on an June of net cash XX, on XXXX. $XX.X at million quarter. to Total compared million XX, outflow the and $XX March was million XXXX, flow XXXX, in of XX, $XXX.X June debt cash Free of

in Economic quarter offset our significant guidance. Even to our weaker-than-expected with the relative this a of results revenue recognition Consulting expectations, adequately did not quarter. prior segment, our deferred to Turning first

end billion, We two range of billion range the quarters revenues billion. range behind and now taking top year. will And between our lowering our now previous we $X.XX of are with from billion us, $X.XX our down between and for guidance the $X.XX $X.X expect

is and which EPS We $X.XX. $X.XX our previous now of from $X.XX, range range between between $X.XX and down expect to

of of our the and a range we year guidance for still of first the are midpoint revenue our stronger top imply range, and updated lowering year. range our ranges While second EPS our the the for revenue XXXX compared half -- the half end EPS for to of year, EPS the

shaped key guidance updated Our by five factors. is

loose backdrop First, forecasts. available, enough economic more hesitant a of to corporations now Credit less on M&A. of operating though we against growth, uncertain the thereby restructuring yet pace is becoming possibly are become slowing for not

in I XQ and growth down X% growth X%, which my said to from XXXX XXXX from was XXXX QX in growth XXXX to earlier is XX% QX XQ to sequential As restructuring QX down from from XXXX remarks, from QX XXXX.

reflecting We our restructuring in slowed are this trajectory growth guidance.

both pressures and staff with cost Second, Total X.X% the from things. of short in continue we attrition we half attrition anticipated the having the from impact first XXXX X.X% XXXX. of headcount term among to face inflation lower than of the first more half of in compares other in

utilization while the to hiring it we senior globe. attract earnings talented we Third, are to the hire campus, impacts with if opportunities are across are XXX we in superb the and practices low remaining set fall, to even in professionals, In from steadfast seeing our our graduates in short talent welcome commitment still term. negatively moderating

the we be Offsetting the annual half the year We year. the meetings than to company second. had client April across SG&A in that first that, lower Fourth, will of the not X. expect and the in salary recur first were the several the effective increases in in half partner half of second on

business slowdown. an us typically, is both weaker and quarter a increase of because the finally, holidays for our the off in time And quarter fourth employees during seasonal for a

I themes I close, believe key company. a Before distinguish want that emphasize our few I to

this of times and is reported revenues their practitioners relationships it that these testimonial quarter. a our in the expertise all for our striking First, their record and relevance segments

to Second, both core in grow globally. our are opportunities and we practices, finding adjacent

Magazine, verification from quantity place of Forbes buybacks, and ability has have a Consulting others. the external by exceptionally value the us share to great that growth view been we to we when we finally, shareholder FTI as and and work. and Third, strong, see and recognition quality sheet And to that attrition right validated professionals coming our also low among ones. organic through Verification balance remains is acquisitions the our boost

the With for your call questions. up that, let's open

Operator

begin [Operator will Instructions] William session. Nicholas question-and-answer from first the We comes Blair. Today's ahead. question now Andrew with go Please

Andrew Nicholas

Hi, questions. Thanks my to the for ask cost good morning. I taking first wanted on side.

than think both any and pressuring cost bill it's rates Is to more, of more rate or looking bill to half it ahead people first people. costing side? up. having expected also kind are obviously, through the harder keep you you a time that 'XX? as so the hire to pressure I mentioned mismatch inflation dynamic it passing that I'm there's expect through you Or on relates wondering half if as would pressuring than to second going there even

Steve Gunby

we were shortfall realization. rates. year, the subparts There bill of where been business we're around take -- trouble Look, would had think that's I ton a raise to a the different of factor don't we're think, have said not me I of places complicated this a last the Let crack obviously, year. a parts I with in getting a the main at couple we world. little have that. slow

if and Like there. to up utilization with commensurate business It's realization that been strong. we for the actually I don't has It's think has lower. example, know But as get line. hasn't the you're not revenue didn't lower a inflation. of been restructuring it rates how not on they raise utilization, shows that our been lot that

a to rates sure obviously there shortfall I there was have said I'm of the of But that's were would have last year, less half should not of and realization the year. then a three. first It's been. to little mixture the we the raise cause commitment all slow primary than in

Andrew Nicholas

assumption thread transaction That's front, helpful. do like offsetting of there sense. an here terms of of on activity? level wondering bit restructuring growth, kind is of M&A up like terms picked I of you're wanted expectation is larger quarter a if the kind your of a an soft makes the increased which if the for comp. to It we ask guidance. in I'm lowering the pace And needle or of then kind there landing seems on deal Understood. of what conservatism It in easier first sounds practice

restructuring acceleration wondering the seeing of if modest not back but on also slower is half how growth kind that relatively front. Just you're expecting still only or that

Ajay Sabherwal

exactly the midpoint, are there's what a growth growth Andrew, you around Slower we And midpoint. expecting that's it. in transactions. At and said. exactly that restructuring moderate range

Andrew Nicholas

Great. Thanks so much.

Ajay Sabherwal

you. Thank

Operator

The with Yaro Please Goldman next from question comes ahead. go James Sachs.

James Yaro

my Good thank taking for questions. morning. you And

Steve Gunby

morning, James. Good

James Yaro

guidelines U.S. should So as just How catalyst we in as or not could business? update help dialogue antitrust and do maybe then that these you just understand you if received business should segments proposed And a which the antitrust us well on in affect changes as some your you to your see think you might Hart-Scott-Rodino. for broadly? U.S., just any how benefit. And outside of the the

Steve Gunby

think any a the significant go world, and more we to places antitrust around of by and make Ajay fair group it's world. have, think me wants the we I into general I experts think firm, of details. at statement see leading a let say then Look, if margin, to I'll -- least have most I around Look, the

any So these demand by stimulates private whether incredibly investigations in world stakes the regulatory of or authorities, sort public litigation because it's antitrust, the are dynamics things high. of just litigation, of

market country not E-Con because deferrals had specific these I ours. -- are changes year are regulatory demand would just terrific And M&A our business, to continue, -- which and robust. the of stuff, been -- and all individual stimulates always So mean by business some a general, it as year E-Con the thought many E-Con a we and different it the the have is the in just more litigation business. tends is In specifics in more I legislation. but have general this professionals would all as slow world, it the it think have for best that had I think our of slower people sort to we -- start

James Yaro

Okay. That's you, Thank clear. very Steve.

the sort Is going consulting should forward tremendous touched in in build normalized what there to trying out sequential of related forward? bit. onetime to revenue on first great. there growth this any is were E-Con You level Or I'm little right models quarter? there. put our factors quarter, obviously a There's business going just the for which a to this we deferred figure in the off

Steve Gunby

Well, there onetime factors. were clearly

Let me you about have that, point. important that's an to talk Ajay but

Ajay Sabherwal

divide the should side. by going way pad it add the third better into the launch that That's is James, two and the quarters revenue have That's on first to the do two. quarter. -- you

James Yaro

clear. down my last one That's year. year presidential entering you the could Consulting Maybe could is in historically, speak just what U.S. Okay. election. for think a U.S. in around next and just the you Litigation We're events. this to an year? step next Forensic growth coming election you mean the had have revenue election into around those extremely in And for And business

Steve Gunby

we And of Brexit these of actually people the stopped markets But mean And know James, external idea. periods and BCG lead to have Europe markets. was of started let XXXX chunk that performing, I a going because markets, the a to look, no -- from say When in about -- low we When used I worried -- can election they have results all talking slow lot big have talked have events. not sorts the I cause today. things. When great it we attract BCG. how's we doesn't external this. monitor markets. What a can't me we us. affect dislocating performing, I the run the relevance mark found don't about we and

short-term -- over on. determine my your spend our is, trying focus don't future we when get kind We months, or I against And fourth XX ourselves answer, dislocations, third our but so and market. change needs people entire the at crystal election who's crystal our balls over we to even and to I know any -- like order we just feel my we your right spend right then that's the the had at of are positioning clients, Otherwise, the I the saying clients right? is world experience for look that's we who's crack with how time our it. sure it. about ball what to make that's you have -- time, better XX could and time in what on get think a live two, wish going we to there's for going It's if order. I propositions out elected James, we're nominated,

James Yaro

and understood. Thanks Ajay. Steve so Totally much,

Steve Gunby

you. Thank

Operator

go next Sommer The Truist Securities. ahead. comes with from Please Tobey question

Tobey Sommer

Thank morning. you. not, leverage be G&A 'XX? when? And there in Good Will if

Ajay Sabherwal

the second is half, expect -- midpoint. lower Answer higher at than the in growth we which do we half the G&A first expect and revenue do

So in yes, we do expect G&A second the leverage half.

Tobey Sommer

rather And the just XXXX on year? half would basis at looking be of the true versus an annualized for than 'XX? guidance Just that discrete period

Ajay Sabherwal

lot a 'XX hotel think flight same to whether little see sure cost have where of same about costs Those 'XX. has not those you for lot I'm to SG&A And some -- a that's and I'll bit the more. inflationary more. been more costs that flights a up. the pressures.

in And justified, the those pay which are the on clients. can't of you pass to very increases, terms

it's have think you I those. do But turning. So

Steve Gunby

costs count. me just lot there add Let on something SG&A so of SG&A I our think and are Look, our billable by flights head forth. A that. are like driven costs

real add have and SG&A of thumb new a you lot more have you new sort lot in You Whether Open stuff. leveraged is rule count. all be travel you computers, -- billable estate, services. of a gets a there to historically our that a office, head have used professional new

gotten goes over count, managing an you've than reverse. on extended faster it leverage If then head of the stupidly, you're period unless your time your and SG&A, revenue up your

as a get growth, which of growth. have leverage, but than has we can things, plus went count is we leverage get of faster big put guidance inflation, to order to count out today some up half uncertainty expenditures a much go growth our we chose we once Tobey? second a in help, had actually Does had And about have It's And have the get to we point. ahead and issue revenue -- year didn't get I of your we revenue year head we revenue issue our there. lot which that We inflation will is expect think that around. revenue, to control. not we the that SG&A do. the of billable and The headcount And the on this head we

Tobey Sommer

Steve. a be prompts would inflation needs points. including at own rates your that growth? follow-up, count grow Is It to X numbers So right? this Does mean example, revenue that above head year, for that using

Steve Gunby

accountants I got [ph]. basis, blah you things specific are I a on there will trump you got that look, the all short-term rates blah of exchange right? -- you blah millions and tell can mean think this think I

haven't so detail. I looked Ajay And in has, probably that, at

of faster through long Does help? head I think inflation. billable truism to you your SG&A, of for out grow period, in plus services lot periods a very And over companies actually that many want revenue any than a flied get that's count of order time. leverage multiyear that has professional to

Tobey Sommer

are either things It headcount, going does, understand revenue who that when maybe hire junior toggling conditions? could you could I improve to utilization. growth. internally But are dig you slowing staff your control, to discretion senior changing response less people hire under what can but that billable in So differently available. the office into you your your generate the are particularly they're to you're are

toggles you those could. of some describe So if

Steve Gunby

Yeah.

hires XXX-some-odd we're junior It really -- Let We're mean -- your in the It September, guess new has me look, and a in our start hurts the I where all pull postpone it's right? the we September plug doing, from duress, not we benefit not company duress, if by I on show right? P&L, on I are your brand up some burns what mean, were to in things. campus. -- supposed describing P&L. do, a that to to benefit doing people. that. and temporary temporary they people It could

of the our this or not short-term help mean discipline confidence enough in the couple hurt a in in all order looking -- term that is -- that hoping have short doing long really fixes things for that quarter company of are really and that help of you we're doing I company us. we're what term two. don't we a to that quarters be the boost So shouldn't

And say, you're when available. in are committed is, if going of the things supportive even best is And one available you forever we've want of opposite, the best that is that, you which as in doesn't one talent sometimes the to you talent often on things find is the going places the of is And on utilized business, forward. complicated believe slow weird we XX% you sub-parts of times to and mean where to at have utilization. our But the -- businesses in jump it. that jump

doing so is company. what the the on U-turn we're not strategy a And core of doing

we the Now reflecting -- point mean view at cutting do Do not to look landlords I in Absolutely. is, about your at point. terms we I real rates reality fine-tune yes, are things? of my estate, this think

at hires we're to we real we are, point Are unless we course, talent. So slow businesses? this slow in expand find Of in time. estate slowing backfill really fabulous

and act that growth to value is multiyear we the it have off without on for deliver led enough And success discipline that. core a have our understand the of So responsibility deliver this accordingly basis a wonderful company. to choking the to shareholders. is what thing has we we look, But to of

that's And we try Does balance. to help, that Tobey? what so

Tobey Sommer

was Solutions? is growth What what in Health And Sure. the outlook?

Ajay Sabherwal

specific sub-practice Tobey. We don't that, like numbers provide

Tobey Sommer

you growth. -- when it describing segment, but you understand, I said said Well, was fueling the

expect to give speak numbers? specific without a the So could you percentage, I but question to you don't

Ajay Sabherwal

Yeah.

we in sub-practice the we FLC remarks, our growth in said had within segment. As that prepared

Tobey Sommer

Okay. In if gains, share Tech, do you market fueling you market that it? what And performance. think strong Is is share growth? market cited a gains,

Steve Gunby

gaining business, in have data, my my been sense we Look, for that but judgment, there's now no are and you giving hard years. so I'm share is we

know we soaring. us for weren't while the before -- worked -- place a at point, while one I got and firms us in It strategy, trial. new law team with marketed strategy, hadn't out changed you aggressively. went The put a think a gave took that

give those we I when increase think would in they we firms wow, rebuying this a world. us and a the And is us the or And corporates give rebuying. in that what and the firms. get places share not within trial, the individual law you they U.S. trial market commodity not law is tell around just a different happening get we that's but say,

win this forces not is boom Now a lots to Sure. jobs. we're continuing matter? of M&A do market But terrific market, and

of say So it's market I would a lot share.

Tobey Sommer

a the company is just of a me quarters shoulder Okay. check. that the in Chairman longer cycle? basic were think of M&A performance didn't -- the Is the gut strong And that waiting between that a period here next kind over few no really models and in last of for kind Fed handoff said restructuring cycle kind recession. wasn't I positive one a a risk for Pawle

Steve Gunby

I worry. -- I you incredible Look, the paint think look, that is if want worries. look, you mean, can always

you bubble 'XX. bankruptcy where market say You back we and people refinance in, Not avoid big -- back to a then to as the they're exactly and goes that has do interest works only rates just economy the but refinancing this everybody significant most able out in they as 'XX, totally guess, that want were can then 'XX hoped. to I who to lows drop recession, were you and the And do the worry, the past. in

M&A You often could over that can time. Under extended Fin positions those we us show scenarios. there but boom, there growth over scenarios, Look, I like more run extended we those period -- in think globally of be timing? be of to would time any any feel Corp period have allow and

for me mine on quarters. caught can guess is as a as of couple you whether good as that of get the end wrong -- Your

ball. have good don't I -- just You a crystal that

Tobey Sommer

you much. Thank very

Operator

concluded. and the has Ladies gentlemen, call now

Steve Gunby

all for down forward all further the the thank you continued Let to engaging to say with look me attention you. and Thank and you you of support, road. we

Operator

your participation. for Thank you

lines. your disconnect now may You

FTI Consulting (FCN) 27 Jul 232023 Q2 Earnings call transcript