CRA International,Inc.

Good day, everyone, and welcome to Charles River Associates' fourth quarter 2023 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 his opening remarks. Please go ahead.

Thank you, Rob, and good morning to everyone. Please note the statements made during this conference call, including guidance on future revenue and non-GAAP EBITDA margin, along with 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 at 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 in 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. Revenue for fiscal 2023 increased by 5.6% to $624 million. marking the sixth consecutive year in which CRA established a new record for annual revenue. CRA's revenue growth for the year was balanced geographically as our North American operations increased by 5% and international operations grew by 7%. For fiscal 2023, seven of CRA's 11 practices grew their top line with two practices, forensic services and labor and employment, delivering double-digit revenue growth relative to fiscal 2022. In the fourth quarter, strength across our portfolio drove an increase in revenue of 11.5% compared to the fourth quarter of fiscal 2022. We translated this top-line expansion into profits that grew at an even faster rate. For the quarter, non-GAAP net income and diluted earnings per share increased year-over-year by 15 and 19 percent, respectively, as CRA established new all-time highs for both metrics. Our improvement reflected new project originations and consulting headcount that were more in line with our expectations. On the demand side, our project lead flow continued to expand, notably in the fourth quarter of fiscal 2023, The conversion of lead flow into new revenue-producing assignments improved significantly, approaching levels consistent with prior years, and helped fuel a double-digit increase in new project originations relative to the third quarter of 2023. Retention rates within our consulting team remain high. we are pleased with the team that we have assembled and remain focused on balancing the supply of labor against the demand for our services. With this mindset, we ended the quarter with a consulting headcount of 1,004, which represents a 6.9% increase year-over-year and is in line with the mid- to high-single-digit percentage increase we projected at the time of our third quarter earnings call. With conversion rates improving and as consulting headcount aligned with our expectations, firm-wide utilization surged to 73% in the fourth quarter from 66% reported for Q3. 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 fourth quarter. Revenue in the fourth quarter from CRA's legal and regulatory services increased 16%, which surpassed growth rates observed in the broader legal market. Total case filings in the fourth quarter were up 10% year-over-year, while the number of total court judgments increased 7% year-over-year. Within our legal and regulatory services, the antitrust and competition economics and forensic services practices led the way with each delivering quarterly revenue growth of more than 20% year-over-year. In addition, our labor and employment practice expanded revenue year-over-year. Turning to the market for antitrust and competition economics practice, worldwide M&A activity, as measured by aggregate transaction value, increased 23% in the fourth quarter compared to the third quarter of 2023. Capitalizing on this increase in merger-related activity and continued demand for antitrust services, the practice established another high for quarterly revenue, eclipsing the prior mark established in the second quarter of this year. During the quarter, CRA experts supported the recently completed acquisition of VMware by Broadcom, The transaction combining VMware's advanced software solutions for data center servers with Broadcom's hardware offerings for data centers presented complex regulatory challenges that were investigated by multiple antitrust authorities across the globe, most notably the U.S. Federal Trade Commission, the European Commission, the Competition and Markets Authority of the United Kingdom, the State Administration for Market Supervision in China, and the Korea Fair Trade Commission. Responding to these challenges, CRA's team of economists played a crucial role in addressing the concern for antitrust authorities. The team's comprehensive analysis informed the clearance decisions and the design of effective remedies that satisfied regulators' concerns about future competition. In another transaction, CRA experts supported the first of its kind joint venture between gasoline and service station provider BP and utility and electric vehicle charging station provider Iberdrola. The European Commission unconditionally cleared the venture following a phase one investigation. CRA provided economic assistance to Iberdrola and their counsel on multiple possible market definitions, market shares, and the competitive assessment. The CRA team calculated current and forward market shares for local candidate markets using various regional areas and different market segmentations. Our forensic services practice continues to experience strong demand from boards and C-suite clients who seek help responding to allegations of fraud and misconduct, such as financial statements irregularities, cybercrime, and trade secret theft. During the third quarter, I'm sorry, during the fourth quarter, the team was called upon by the board of a large publicly traded energy company to investigate allegations of accounting irregularities, undisclosed conflicts of interest, and flawed or falsified SOX 404 internal controls testing. Ransomware attacks came roaring back in 2023 as the threat actors continued to innovate and evolve. For example, during the fourth quarter, the forensic services practice helped a multinational insurance broker respond to a massive breach that caused a partial network shutdown and compromised multiple servers. We eradicated the threat actor, helped the client restore operations, and hardened its information security environment. We also data mined a staggering quantity of structured and unstructured data, so the client could notify impacted individuals around the world in a timely manner. CRA's labor and employment practice continues to be engaged across a diverse set of industries, including automotive, computer software, information technology, retail, and entertainment, to assist clients with proactive consulting, mediation, government agency investigations, and litigation. During the quarter, the practice supported Professor Robert Tappell, in a matter involving an alleged monopoly and monopsony power in the sports entertainment industry. CRA experts were also retained to assist computer software and information technology firms in examining allegations of discrimination filed in federal court, as well as ongoing investigations by the California Civil Rights Department. In the wake of last year's Supreme Court ruling in the Harvard and University of North Carolina matters, Our practice is regularly retained to assist clients navigate diversity, equity, and inclusion initiatives. Within our management consulting services, our energy practice delivered double-digit revenue growth during the quarter, while our life sciences practice also expanded its revenue year over year. The energy practice continued to serve its diverse client base across the energy value chain. Our clients included utilities, grid operators, investors, law firms, government agencies, and large energy consumers. During the fourth quarter, the practice worked with several utilities, including NYSource, for their integrated resource plans and energy procurements. For system operators, the practice is working with MISO, the Mid-Continent Independent System Operator, on several studies, including one that will support future market design. CRA experts offer testimony in confidential litigation and arbitration proceedings both domestically and internationally. For investors, we have provided diligence to support transactions of electric utilities and individual assets. For government agencies, the practice is working with the New York regulator to audit gas utility decarbonization plans. Our life sciences practice continues to support clients' strategic initiatives. During the quarter, the team performed a cross-functional strategic review of a portfolio of immunology for a global pharmaceutical company, assessing the opportunity for a variety of possible products across the U.S., Germany, and Asia, and another project supporting clinical a European pharmaceutical company, we continue to work on drug-device combination products, focusing on customer and market dynamics to inform the commercial model for inhaled product formulations, identify critical factors for pricing and access success, and lay the foundation for impactful commercial strategy. Recapping our record financial performance, CRA reported revenue for fiscal 2023 of $624.0 million or $624.1 million on a constant currency basis relative to fiscal 2022. Full-year non-GAAP EBITDA was $68.3 million or $68.9 million on a constant currency basis. Non-GAAP EBITDA margin was 11.0% on a constant currency basis. Our fiscal 2023 financial performance demonstrates our continued success in the marketplace, and we are looking to continue our trend of broad-based profitable growth in the years ahead. For full year fiscal 2024, on a constant currency basis relative to fiscal 2023, We expect revenue in the range of $645 million to $675 million and non-GAAP EBITDA margin in the range of 10.8% to 11.5%. Overall, I'm grateful to all my colleagues for their hard work during the fourth quarter and throughout the year as we help their clients address their most important challenges. With that, I will turn the call over to Chad. and then to Dan for a few additional comments. Chad?