CRA International,Inc.

Good day, everyone, and welcome to Charles River Associates' first quarter 2023 earnings conference call. Please note that today's call is being recorded. The company's earnings release and prepared remarks from CRA's chief financial officer are posted on the investor relations section of CRA's website at crai.com. With us today are CRA's president and chief executive officer, Paul Malley, chief financial officer, Dan Mahoney, and Chief Corporate Development Officer, Chad Holmes. At this time, I'd like to turn the call over to Mr. Mahoney for opening remarks. Dan, please go ahead.

Thank you, Rob, and good morning, everyone. Please note that the statements made during this conference call, including guidance on future revenue and non-GAAP EBITDA margin, and any other statements concerning the future business, operating results, or financial condition of CRA, including those statements using the terms expect, outlook, or similar terms, are forward looking statements as defined in Section 21 of the Exchange Act. Information contained in these forward looking statements is based on management's current expectations and is inherently uncertain. Actual performance and results may differ materially from those expressed or implied in these statements due to many important factors, including the level of demand for our services as a result of changes in general and industry specific economic conditions. Additional information regarding these factors is included in today's release and in CRA's periodic reports, including our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC. CRA undertakes no obligation to update any forward-looking statements after the date of this call. Additionally, we will refer to some non-GAAP financial measures and certain measures presented on a constant currency basis on this call. Everyone is encouraged to refer to today's release and related CFO remarks for reconciliations of these non-GAAP financial measures to their GAAP-comparable measures and descriptions of the calculation of EBITDA and measures presented on a constant currency basis. I will now turn it over to Paul for his report. Paul?

Thanks, Dan, and good morning, everyone. Thank you for joining us today. During the first quarter, CRA continued to build momentum in the business and demand for our services. Revenue increased to $152.8 million the highest quarterly revenue in the company's history. Our North American and international operations both expanded in the first quarter, led by our international operations, which grew by 8.8% year over year. Fueling this expansion was a 10.7% year over year increase in consulting headcount and a utilization of 70% during the first quarter. I'm excited that Top Talent continues to make CRA a destination of choice. This expanded and talented collection of CRA colleagues will continue to provide ample opportunities for value-creating growth in the quarters ahead. On a constant currency basis, CRA reported year-over-year growth of 5.1% and non-GAAP EBITDA margin of 11.4%. Both metrics are squarely in the range of our previously announced annual financial guidance for fiscal 2023. Turning to our service offerings, CRA's legal and regulatory practices drove our overall revenue growth. Four practices, antitrust and competition economics, financial economics, forensic services, and labor and employment grew year over year with forensic services, and labor and employment, each posting double-digit revenue growth. I would now like to spend a few minutes highlighting the market for our services and some of the projects delivered to our clients during the first quarter. Our antitrust and competition economics practice established a new high for quarterly revenue as work continued on merger-related projects and demand for antitrust services remained strong, despite a challenging backdrop. Worldwide M&A activity, as measured by aggregate transaction value, fell to a decade low in the first quarter of 2023 and declined 44% compared to the first quarter of 2022. As such, the competition practice experienced an 18% decline in lead flow of merger-related opportunities in the first quarter of 2023 relative to a year ago. However, The ongoing strength of the practice overcame these industry trends. The practice saw overall project lead flow, including both merger-related and non-merger-related opportunities, expand by more than 20% in the first quarter relative to a year ago, partially fueling the practice's increase in revenue year over year. During the quarter, CRA's antitrust and competition economics practice continue to support clients on high-profile mergers in several industries, including consumer technology, software, hardware, and industrial products. For example, a CRA team supported the merger of Capco and Shaftesbury, two UK-registered real estate investment trusts and landlords of lettable units in central London. The merger will bring together the parties' complementary property portfolio, resulting in a mixed-use portfolio of approximately 670 buildings with about 2.9 million square feet of lettable space. After a Phase I review, the UK's Competition and Market Authority, in line with the analysis prepared by CRA, found no evidence that the merger would lead to a substantial lessening of competition and unconditionally cleared the acquisitions. In addition to their merger review work, CRA's antitrust and competition economics practice continued to support clients in legal disputes. During the first quarter, CRA consultants prepared and delivered expert reports and testimony in antitrust class actions, international disputes, and other matters arising from competition claims. For example, multiple CRA experts were engaged to support a client's trademark infringement and unfair competition claims in U.S. District Court. The experts and their teams developed analyses and provided expert opinions with regard to trademark valuation, consumer surveys, damages, and monetary relief. Looking more broadly, the legal market delivered mixed trends during the first quarter. Total case filings were up 5% year over year, However, the number of total court judgments declined 5% relative to the first quarter of 2022. CRA bucked these trends and grew revenue from its legal and regulatory offering by nearly 7% in the first quarter. During the quarter, mortgage lending experts in CRA's financial economics practice group provided testimony in support of a mortgage servicer in a litigation matter alleging discrimination in the maintenance and marketing of foreclosed homes. The practice also continues to assist several banks and mortgage companies in responding to regulatory investigations concerning potential discriminatory redlining. CRA provided statistical analysis of the client's geographic lending patterns in relation to other lenders in the market, and in some cases assisted the client in resolving the matter with a regulatory agency. The forensic services practice continues to experience strong demand from boards and C-suite clients seeking assistance with investigations into alleged fraud, cybercrime, trade secret theft, and other misconduct. The team investigates and responds to hundreds of cyber incident response matters per year. In the last quarter, we assisted a publicly traded software company in responding to an unauthorized incident involving its corporate network. We helped the health care system respond to a six-month unauthorized intrusion. We assisted a leading North American insurance brokerage respond to and recover from a massive ransomware incident. Leveraging our digital forensic competencies, the practice also helped multiple clients investigate allegations of trade secret theft, including a global financial markets trading company and a major pharmaceutical and medical device company. Finally, our forensic accounting and e-discovery capabilities to assist the the audit committee of a publicly traded insurance company, investigate allegations that its former chief marketing officer had embezzled millions of dollars. CRA's labor and employment practice continues to be engaged across industries, including finance, healthcare, legal, and entertainment, to help clients proactively navigate recent restructuring activities as companies adjust to changing economic conditions. During the first quarter, CRA consultants were regularly retained to assist clients in making annual performance and compensation decisions in order to proactively assess internal equity concerns. Separately, the practice continues to be a critical partner for clients entering mediation on multiple California Wage and Hour and Federal Fair Labor Standards Act lawsuits. Sarah's deep expertise in employment matters also led to multiple client retentions on actions brought by individuals, class, or collectives, and the Equal Employment Opportunity Commission. The practice also held a retreat during the first quarter that brought together leaders to commemorate the one-year anniversary of the acquisition of Welch Consulting. The gathering focused on expanding efforts to leverage the team's more than 500 years of combined labor and employment consulting experience. For the company as a whole, we continue to replenish our sales pipeline. Project lead flow increased in the first quarter by more than 10% year over year after adjusting for the Welch Consulting projects acquired one year ago. This builds on the strong lead flow generated during the fourth quarter of 2022. Together, the past six months represents the strongest period of lead flow activity in CRA's history. While we're pleased with the record lead flow over the past two quarters, our new project originations remained roughly flat year over year after adjusting for the Welch Consulting Transition projects. During the first quarter we observed a delay in the conversion of leads into new projects. Based on an examination of lead composition and discussions with our leading revenue generators, we see no evidence relative to our history over the past several years that we are losing projects more frequently to competitors. Instead, it appears that clients are delaying their decision to begin work on their projects. Turning to guidance, based on our first quarter performance, we are reaffirming our financial guidance for full year fiscal 2023. As a reminder, our previously stated guidance is provided on a constant currency basis relative to fiscal 2022 and calls for expected revenue in the range of $615 million to $640 million and non-GAAP EBITDA margin in the range of 10.8% to 11.5%. Overall, I'm grateful to my colleagues for their hard work during the first quarter as we helped our clients address their most important challenges. With that, I'll turn the call over to Chad and then Dan for a few additional comments. Chad? Thanks, Paul.