Divyam Bothra

Divyam Bothra, on behalf of James Yaro from Goldman Sachs, requested an update on the current and foreseen impacts of AI on FTI Consulting's business, particularly elaborating on the anticipated positive benefits for 2026 and any potential negative consequences. Divyam Bothra also inquired about any current impacts from market disruptions affecting capital markets on FTI Consulting's businesses, and whether further AI disruption could exacerbate these effects. Lastly, Divyam Bothra asked for clarity on FTI Consulting's capital deployment priorities, given the $145 million sequential debt reduction and lower-than-expected share repurchases in Q4 2025, and the firm's view on its ability to add leverage.

Answer

Steven Gunby, CEO and Chairman, clarified that AI's primary benefits for FTI Consulting are on the revenue side, driven by new demand stemming from disruption, rather than significant efficiency gains. He cited examples in the FLC practice where AI models require compliance evaluations, leading to new work for experts in regulation, data analysis, and regulatory credibility. Gunby emphasized that AI-driven disruption creates opportunities across crisis communications, bankruptcies, and investigations for FTI Consulting's expert-driven model. Gunby explained that FTI Consulting is broadly positioned to assist clients during economic dislocations, such as private credit perturbations, fraud investigations, bankruptcies, or M&A opportunities. He noted that the firm's diverse expertise allows it to be helpful across various market disruptions. Gunby reiterated FTI Consulting's consistent capital strategy focused on organic growth and opportunistic cash deployment. He outlined priorities as A-plus acquisitions (rare), reducing high-expense debt (already done), and strategic share buybacks when the market undervalues the company, which has occurred three times in the past decade. Gunby highlighted the firm's minimal net debt (approximately $100 million in Q4 2025) and ample flexibility for future capital actions.