CRA International,Inc.

Good day, everyone, and welcome to Charles River Associates' first quarter 2025 conference call. Please note that today's call is being recorded. The company's earnings release and prepared CFO remarks are posted on the investor relations section of CRA's website at cra.com. With us today are CRA's President and Chief Executive Officer, Paul Malley, and Chief Corporate Development Officer and Interim Chief Financial Officer, Chad Holmes. At this time, I'd like to turn the call over to Mr. Holmes for opening remarks. Chad, please go ahead.

Thank you, Rob, and good morning to 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, or 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, Chad.

And good morning, everyone. Thank you for joining us today. Building on the momentum of an exceptional fiscal 2024, CRA continued its strong performance into the first quarter of fiscal 2025 and delivered record financial results. During the first quarter, revenue increased by 5.9% year-over-year to $181.9 million and which represents the highest quarterly revenue in the company's history. Broad-based contributions drove the quarter's strong performance, with five practices growing year over year. Four practices, energy, finance, intellectual property, and life sciences, posted double-digit revenue growth, while the antitrust and competition economics practice posted a new high for quarterly revenue. We also expanded geographically as CRA's international operations led the way with nearly 20% year-over-year revenue growth. We continue to manage the business effectively, converting strong top-line growth into even faster bottom-line expansion. Non-GAAP net income, earnings per diluted share, and EBITDA increased year-over-year by 11%, 13%, and 11%, respectively. Each profit metric also set a new quarterly record for CRA. For the company as a whole, consultant headcount decreased 5% compared to the first quarter of 2024 and was flat sequentially. Consultant utilization improved on a year-over-year basis to 76%. The increase in utilization was supported by the continued replenishing of our sales pipeline. After a sluggish start in January, Project lead flow accelerated during the quarter and increased by 5% year over year. New project originations followed a similar pattern and increased by 3% relative to the first quarter of 2024. I would now like to spend a few minutes highlighting the markets for our services and some of the projects delivered during the first quarter. Revenue in the first quarter from CRA's legal and regulatory services increased by roughly 5%. This growth was in line with the broader legal market as total case filings and total court judgments increased 13% and 2% respectively compared to the first quarter of 2024. Turning to the M&A market, worldwide M&A activity rebounded from a slow January and February to start the year, reaching $885 billion during the first quarter of 2025. This represented an increase of 15% compared to year-ago levels and the strongest opening quarter for deal-making since 2022. Against this backdrop, the record quarter for CRA's antitrust and competition economics practice reflected continued demand for antitrust services and ongoing merger-related activity. During the quarter, CRA economists worked for Microsoft to help secure a favorable decision from the UK Competition and Market Authority in its investigation of the Microsoft OpenAI partnership. The team of CRA experts documented and quantified the pace of innovation and market entry in the AI space. They further helped the CMA understand the inner workings of the partnership its effect on the party's incentives, and its role in underpinning investment and innovation across the AI economy. The CMA concluded that there was no basis to review the partnership under the merger regulations. CRA's antitrust and competition economics practice remained active in high stakes legal disputes during the first quarter. Our consultants and affiliated experts prepared and delivered expert reports and testimony in a range of competition-related matters, including in litigated mergers, claims of anti-competitive conduct, antitrust class actions, and in matters at the intersection of antitrust and intellectual property. These engagements spanned a diverse set of industries, such as technology, healthcare, retail, and consumer goods. In the first quarter, CRA's finance practice continued to be active in several merger and other transaction-related lawsuits in Delaware Chancery Court and federal court. As an example, during the quarter, the practice collaborated with members of CRA's antitrust and competition economics practice and the risk investigations and analytics practice to investigate on behalf of a European tax authority an alleged multi-jurisdictional fraud connected to a dividend arbitrage scheme. Chicago, New York, Boston, and London-based teams performed extensive trading and market practice analysis, investigative research, document review, forensic accounting, and flow of funds analysis. A CRA expert testified at trials in several jurisdictions, including the United States. In February, a jury in the U.S. awarded $500 million to CRA's client. CRA's intellectual property practice advised on multiple high-stakes litigation, arbitration, and valuation matters covering a broad range of industries, including artificial intelligence, chemicals, consumer electronics, energy, financial services, food and beverage, life sciences, software, and telecommunications. In one example, a CRA expert testified as an economic damages and licensing expert on behalf of a leading telecommunications company being sued for patent infringement in Marshall, Texas, one of the most active patent litigation venues in the U.S. CRA's analysis and testimony demonstrated, among other things, that the features in questions had low value based on an analysis of customer usage metrics and that the plaintiff's claim of over $1 billion in royalties was excessive and economically unjustified. based on the facts in the case, the juries found in favor of CRA's clients. Within our management consulting services, revenue increased 10% year over year as both energy and life sciences practice delivered double-digit revenue growth. During the first quarter, CRA's energy practice delivered strong performance across strategy, risk, and compliance, data center support, utility planning, and transaction support services. For example, on a strategy assignment, the team assisted a major utility in developing its large load strategy encompassing data centers and the onshoring of additional manufacturing needs in its service region. Within risk and compliance, the practice provided expertise to infrastructure investors on the impacts of California wildfires. leveraging a skilled team with a background in wildfire mitigation planning. And in resource planning, the team supported Liberty Utilities in filing its 2025 integrated resource plan in Missouri, with plans for subsequent filings in other states. Finally, on the transaction advisory side, the practice supported due diligence efforts across multiple transactions, including a utility buy-side diligence, and a chemical sell-side diligence, leveraging depth of the team's industry expertise. CRA's life sciences practice continues to emphasize a commitment to R&D pipeline opportunities in the industry, working with our clients' commercial and product development teams as they assess opportunities and work to bring new products to market. The first quarter featured projects focused on opportunity assessment, sales forecasting, and launch planning. Additionally, the quarter was highlighted by expert witness work involving antitrust matters, an area that we expect will grow in the years ahead as combination products become more common in the life sciences industry. Some obvious combinations are drugs approved for administration with a particular device, but similar concerns are likely to be faced by new gene therapies and the associated viral vectors needed to deliver the gene therapy to the appropriate cells. Overall, I'm grateful to all of my colleagues for their hard work during the first quarter as we helped our clients address their most important challenges. While pleased with the strong performance of the business, we continue to look for opportunities to further optimize our service portfolio by reconfiguring the teams in targeted areas of the company. During the quarter, these efforts affected approximately 15 individuals, resulting in a restructuring charge that was offset by the reversal of non-cash charges associated with a previously recorded performance award. Now turning to guidance, we are encouraged by the strong start to the year and the trend of lead flow activity within the quarter. As such, we are reaffirming our full-year financial guidance for fiscal 2025. For full-year fiscal 2025 on a constant currency basis relative to fiscal 2024, we expect revenue in the range of $715 million to $725 million and non-GAAP EBITDA margin in the range of 12% to 13%. However, we are mindful that Uncertain global macroeconomic, business, and political conditions can be volatile and affect our business. With that, I'll turn the call over to Chad for a few additional comments. Chad?