Exponent, Inc.

Please stand by. Good day, everyone, and welcome to the Exponent Incorporated Third Quarter of Fiscal Year 2022 Financial Results Conference. Today's call is being recorded, and now at this time, I would like to turn the call over to Joni Constantelos. Please go ahead.

Thank you, operator. Good afternoon, ladies and gentlemen. Thank you for joining us on Exponent's Third Quarter 2022 Financial Results Conference call. Please note that this call will be simultaneously webcast on the investor relations section of the company's corporate website at www.exponent.com backslash investors. This conference call is the property of Exponent and any taping or other reproduction is expressly prohibited without prior written consent. Joining me on the call today are Dr. Catherine Corrigan, President and Chief Executive Officer, and Rich Schlenker, Executive Vice President and Chief Financial Officer. Before we start, I would like to remind you that the following discussion contains forward-looking statements including, but not limited to, exponents' market opportunities and future financial results that involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in exponents' periodic SEC filings, including those factors discussed under the caption risk factor in Exponent's most recent Form 10-Q. The forward-looking statements and risks in this conference call are based on current expectations as of today, and Exponent assumes no obligation to update or revise them, whether as a result of new developments or otherwise. And now I will turn the call over to Dr. Katherine Corrigan, Chief Executive Officer. Katherine?

Thank you, Joni, and thank you, everyone, for joining us today. I will start off by reviewing our third quarter 2022 business performance. Rich will then provide a more detailed review of our financial results and outlook, and we will then open the call for questions. Exponent delivered another solid quarter with year-over-year growth in revenue, EBITDA, and diluted earnings per share. These results demonstrate the strength and resiliency of Exponent's business model and our ability to grow as an organization despite ever evolving macroeconomic challenges and uncertainty. As companies push forward innovations with increasing attention to safety, health and the environment, Exponent remains a necessary and critical advisor as they leverage our differentiated data analytics and unrivaled subject matter expertise to help solve their most profound challenges. Demand for our scientific and engineering expertise remains strong, with broad-based growth driven by work related to the consumer products, utilities, automotive, and life sciences sectors. Within our proactive services, we saw strong demand for our work related to virtual reality, wearable technologies, and energy storage. On the reactive side, we benefited from a robust litigation activity and also a diversified portfolio of product safety and recall-related work, particularly in the life sciences space. Overall, traction across our multidisciplinary offering showcases the strength of our long-term strategy. Turning to our engagements in more detail, on the proactive side, we saw increased demand for virtual and augmented reality work driven by our clients' need to better understand the cognitive impacts of these technologies. We also saw increased engagements related to machine learning and human participant studies as clients remain reliant on Exponent's data-driven insights to improve user experience and product performance. Importantly, the increasing need for scientific data regarding the safety and value of healthcare products and treatments has furthered our work in the life sciences sector. Within the automotive space, we are supporting clients through our work in batteries and energy storage, advising them on safety frameworks to mitigate risk. While still in the early stages, we see long-term growth opportunities related to electric vehicles driven by society's ongoing focus on sustainability. Our reactive business remains healthy, and we experienced another quarter of growth driven by additional litigation-related work. Reactive engagements in the quarter included domestic litigation and international arbitrations, which are ahead of 2019 levels as well as product safety and recall work spanning several industries, including automotive, pharmaceutical, and medical devices. Overall, we remain encouraged by the evolving opportunities related to energy storage, advanced vehicles, consumer electronics, and digital health, which we expect to deliver a growing impact over time as we execute our long-term strategy. Turning to our segments, exponents engineering and other scientific segments represented 84% of our net revenues in the third quarter. Net revenues increased 6.9% compared to the prior year period as we experienced strong demand for exponents services across several industries, including consumer products, energy, and transportation, as well as robust litigation activity. Exponents environmental and health segment represented 16% of the company's net revenues in the third quarter. Net revenues in this segment increased 2.7% compared to the same period in the prior year, driven by exponents expanding scope of work in health data science and year-over-year growth in the life sciences space, driven by increased engagements within pharmaceuticals. Excluding the impact of foreign exchange, Net revenue for the environmental and health segment increased 7.5% in the third quarter of 2022 as compared to the prior year period. We also remain committed to recruiting and retaining a world-class team here at Exponent. While the demand for engineering and scientific talent is competitive in any market, we've continued to improve our processes for attracting and retaining talent to ensure we have the best and the brightest on our team. Our turnover is decreasing, our hiring pipeline is robust, and we are seeing exceptional candidates that add both depth and breadth of experience to our roster. We continue to show our ability to not only acquire but also retain talent in this ever-evolving environment. As we look to the future, it is evident that society will keep raising the bar on health, safety, and the environment. All pillars of Exponent's successful strategy that has persevered through business cycles and ongoing macroeconomic volatility and uncertainty. We remain a strategic advisor to clients, providing services that are imperative to their operations, whether they need to gather data and conduct technical analysis, respond to regulatory frameworks, or are trying to understand in-market product performance and risk. This, along with our ability to attract and maintain a top tier team of talent across an expanding portfolio of competencies, gives us confidence in our business as we navigate through the end of the year. I'll now turn the call over to Rich to provide more detail on our third quarter results, as well as discuss our outlook for the fourth quarter and the full year 2022.