FTI Consulting Q2 profit misses on higher direct costs

Overview

• US consulting firm's Q2 revenue rose 5.3% yr/yr, slightly missing analyst expectations

• Adjusted EPS for Q2 missed analyst expectations

• Company repurchased $390.9 mln of its shares during the quarter

Outlook

• FTI Consulting reaffirms 2026 revenue guidance of $3.94 bln to $4.10 bln

• Company updates 2026 EPS guidance to $8.70-$9.30, down from $8.90-$9.60

• FTI Consulting introduces 2026 adjusted EPS guidance of $9.10-$9.70

Result Drivers

• CORPORATE FINANCE GROWTH - Revenue gains in Corporate Finance were driven by higher realized bill rates for transactions, transformation and turnaround restructuring services, increased demand for transformation services, and higher success fees

• TECHNOLOGY SEGMENT DEMAND - Higher demand for MA-related 'second request' services boosted Technology segment revenue

• COST PRESSURES - Higher direct costs, SGA expenses, and interest expense weighed on net income

Company press release: ID:nGNX1X4JBy

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the business support services peer group is "buy"

• Wall Street's median 12-month price target for FTI Consulting Inc is $168.45, about 1.2% below its July 29 closing price of $170.42

• The stock recently traded at 17 times the next 12-month earnings vs. a P/E of 18 three months ago

Reuters Recommended Reads

• July 28 - Huron Consulting Q2 revenue before reimbursable expenses rises 16%

• July 29 - Moelis Q2 adjusted revenue rises driven by higher average fees

• July 29 - Houlihan Lokey Q1 revenue falls 15% driven by Middle East conflict

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)