Exponent, Inc.

Good afternoon, and welcome to the Exponent First Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Joni Constantelos with Investor Relations. Please go ahead.

Thank you. Good afternoon, ladies and gentlemen. Thank you for joining us on Exponent's first quarter 2023 financial results conference call. Please note that this call will simultaneously be 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. Katherine Corrigan, President and Chief Executive Officer, and Rich Flanker, 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, Exponent's 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 Exponent's 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. An 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 first quarter 2023 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. We're pleased to report another solid quarter, growing net revenues by over 9% despite evolving macroeconomic challenges and uncertainty. Our results demonstrate the strength of our business with a diversified portfolio of offerings serving a broad range of industries across the entirety of the product lifecycle. Safety, health, and the environment are increasingly important as companies deliver innovation and push the envelope with new technologies. Exponent remains uniquely positioned as a trusted advisor, harnessing the power of technical excellence, objectivity, and disciplinary diversity to help our clients solve their toughest science, engineering, and business challenges. Increased demand for our reactive services, which have been foundational to Exponent from our inception, bolstered our growth in the first quarter. In the quarter, we saw an influx of litigation-related activity as well as product safety and recall-related work that spanned multiple industries. On the proactive side, activity in the quarter was driven primarily by work in the consumer products, chemicals, utilities, automotive, and life sciences sectors. Turning to our engagements in more detail, Within our reactive business, we saw strong demand for both our domestic litigation and international arbitration-related work, particularly involving the transportation and energy sectors, as well as intellectual property disputes. We also saw increased engagements around product safety and recall across a number of end markets, including transportation and life sciences. Within our proactive business, Engagements in the quarter were primarily driven by regulatory issues across multiple industries, product design consulting in the electronics and medical device spaces, and asset integrity and risk-related work. Engagements continued related to machine learning data collection and user research across a range of end markets. This work is reflective of ongoing demand from our clients as they seek differentiated data to improve user experience and advanced product performance and reliability of their next-generation designs. Across the business, ExpoMint is well-positioned to capitalize on macro trends, including escalation in safety, health, and environmental concerns that will have a significant impact on our business over the next several years. We're excited about transformations related to energy storage, vehicle electrification and automation, consumer electronics, and digital health, as the complexities associated with these innovations will continue to drive work for our services. We are intently focused on understanding what is on the horizon and are positioning ourselves with the talent, capabilities, and relationships to grow our client base and expand our business. In the quarter, our headcount grew 12% year over year, driven by our ability to attract and retain top-tier talent. We are an employer of choice for the best and brightest scientists and engineers who choose Exponent because of our esteemed reputation for technical excellence, objectivity, and disciplinary diversity. We are committed to growing our world-class team and are pleased with our accelerated recruiting efforts over the last year, which has strengthened our unique position to meet the complex and dynamic needs of our clients. As always, we will continue to balance strategically expanding our team with utilization to ensure that we are positioned correctly for any market environment to deliver value over the long term for all of our stakeholders. Turning to our segments, exponents engineering and other scientific segment represented 83% of our net revenues in the first quarter, increasing 11% as compared to the prior year period, with continued strong demand for our services across the transportation, utilities, consumer products, and life sciences sectors. Exponents environmental and health segment represented 17% of our net revenues in the first quarter. Net revenues in this segment decreased 1% compared to the same period in the prior year. Excluding the impact of foreign exchange, net revenues for the environmental and health segment increased 2% in the first quarter as compared to the prior year period. Work in this segment was primarily driven by Exponent's safety-related engagements, evaluating the impacts of chemicals on human health and the environment. Before I turn the call over to Rich to review the financials, I do want to highlight the recent launch of Exponent's newly designed website, which underscores how we are helping clients create a safer, healthier, and more sustainable world. We are incredibly proud to showcase our people and the diverse and impactful work of our team of experts who have helped assess some of the world's biggest disasters and challenges, including building collapses, chemical spills, and high profile product failures. Exponent's world class team combines that experience with a vast array of scientific and engineering expertise to help our clients build future focused solutions for their most profoundly unique, unprecedented, and urgent challenges. Overall, our first quarter results exemplify the strength of our adaptable business model, unique market position, and depth of our client relationship. We will continue to position ourselves for the future, investing in our talent, knowledge base, and skills to deliver increasing value to our clients and our shareholders. I'll now turn the call over to Rich to provide more detail on our first quarter results, as well as discuss our outlook for the second quarter and the full year 2023.