Exponent, Inc.

Good afternoon and welcome to the Exponent Second Quarter 2024 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, Managing Director, Riveron Consulting. Please go ahead.

Thank you. Good afternoon, ladies and gentlemen. Thank you for joining us on Exponent's second quarter 2024 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.investors.exponent.com. 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 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 captioning 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 second quarter 2024 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 delivered net income growth of 14% and expanded EBITDA margin in the second quarter, reflecting the results of efforts to align our operating model with market demand. As expected, revenue growth moderated during the quarter due to ongoing headwinds in the consumer electronics and chemical sectors and a tough comparison against 20% growth in our reactive work last year. Despite these challenges, our reactive business delivered mid-single-digit growth fueled by demand across the transportation, utilities, and medical device sectors. Our proactive business continued to experience softness in consumer electronics, partially offset by modest year-over-year growth in the utility sector. Turning to our engagements in more detail, in our reactive work, we saw strong demand within transportation related to product liability and regulatory matters. These included evaluating the performance and safety implications of advanced driver assistance technologies and battery systems, as well as railway failure investigations. In life sciences, our team continued to leverage their expertise in engineering, manufacturing, and human factors to understand the root causes of medical device safety concerns. The energy transition continued to be a driver as we advised clients facing infrastructure disputes involving wind, solar, and large-scale energy storage. During the quarter, we continued to see headwinds in the chemical sector as some clients paused near-term litigation work. Within our proactive services, engagements in the quarter were driven by our asset integrity work in the utility sector. For example, evaluating ignition risks and mitigations for electrical infrastructure, and in transportation, evaluating vehicle emissions technologies. While we continue to experience headwinds in the consumer electronics industry related to product lifecycle timing and broader industry impacts, we are seeing more signs of stabilization. Our product development consulting activities began to recover modestly in the quarter and were encouraged by an uptick in human subject research engagements. Turning to our segments, exponents engineering and other scientific segments represented 84% of revenues before reimbursements in the second quarter. Revenues before reimbursements in this segment increased 4%. driven by demand for exponents services across the transportation and energy sectors. Exponents environmental and health segment represented 16% of revenues before reimbursements in the second quarter. Revenues before reimbursements in this segment decreased 4% due to ongoing headwinds in the chemical sector. Looking ahead, accelerating transformation across industries will continue to create attractive market opportunities. from groundbreaking technology and data applications in life sciences to renewables and infrastructure resilience in the energy sector and electrification and automation of transportation. Exponent remains well positioned to support our clients with vital insights for current challenges while preparing the path toward the future. Considering our encouraging performance in the first half of 2024 and the outlook for the remainder of the year, We are raising our full year revenue and margin expectations. Rich will take us through the details of that. However, we still face headwinds in the chemical sector, as well as tough comparisons based on unusually strong prior year growth in our reactive services. Over the last several quarters, our incredible team has demonstrated agility in adapting to ongoing dynamics in both our consulting and our talent marketplaces. Going forward, we will continue to leverage and build upon our diversified portfolio of talent and capabilities as we flex to meet market demands. I'll now turn the call over to Rich to provide more detail on our second quarter results, as well as discuss our outlook for the third quarter and the full year, 2024.