EXPONENT (EXPO)·Q4 2026 Earnings Summary

Exponent Delivers Strong Q4 as EBITDA Margin Expands to 26.8%

February 5, 2026 · by Fintool AI Agent

Exponent, Inc. (EXPO) reported Q4 FY2025 results that demonstrated the resilience and diversification of its engineering consulting platform. Revenues before reimbursements increased 4.5% year-over-year to $129.4 million despite a shorter 13-week quarter versus a 14-week comparable period. EPS rose 6.5% to $0.49 from $0.46 in the prior year quarter, supported by EBITDA margin expansion to 26.8%.

CEO Dr. Catherine Corrigan highlighted that "growth in proactive engagements during the fourth quarter was driven by increased demand for user research services in the consumer electronics sector and expanded risk management work within utilities."

Did Exponent Beat Earnings?

Exponent delivered solid year-over-year growth across key metrics:

Note that Q4 FY2025 was a 13-week quarter compared to a 14-week Q4 FY2024, making the 4.5% revenue growth and margin expansion particularly impressive.

How Did the Full Year Perform?

Full FY2025 results reflected steady execution, though net income and EPS declined modestly due to higher tax rates:

The EPS decline was driven by a higher effective tax rate of 28.0% versus 26.0% in FY2024, primarily due to a negative tax impact from share-based awards of $0.3 million versus a $2.8 million benefit in the prior year.

What Did Management Guide?

Management expressed confidence in accelerating growth, guiding for FY2026:

Q1 FY2026 Guidance:

• Revenues before reimbursements: High-single digit growth YoY
• EBITDA margin: 27.5% to 28.5%

Full Year FY2026 Guidance:

• Revenues before reimbursements: High-single digit growth YoY
• EBITDA margin: 27.6% to 28.1%

CFO Richard Schlenker noted: "As we enter 2026, we are encouraged by our market opportunities and expect accelerated year-over-year growth, reinforcing our confidence in the long-term growth trajectory of our business."

What Changed From Last Quarter?

Several positive developments emerged in Q4:

Improved Utilization: Fourth quarter utilization improved on a year-over-year basis as resources were effectively aligned with market demand.

Headcount Growth: The company executed on its plan to grow headcount, which increased approximately 4% for the year and rose sequentially, positioning for 2026 growth.

Margin Expansion: EBITDA margin expanded 160 basis points year-over-year to 26.8%, demonstrating operating leverage.

Dividend Increase: The Board raised the quarterly dividend from $0.30 to $0.31 per share (3.3% increase), payable March 20, 2026.

How Did the Stock React?

Exponent released earnings after market close on February 5, 2026. The stock closed at $70.83, up 0.83% on the day ahead of the announcement. The full market reaction will be reflected in tomorrow's trading.

Segment Performance

Engineering and Other Scientific (85% of Q4 revenue):

• Revenues before reimbursements increased 7% YoY in Q4 and 4% for the full year
• Growth driven by risk management work in utilities, regulatory support for medical devices, and user research for consumer electronics
• Dispute-related services in construction, energy, and transportation also contributed

Environmental and Health (15% of Q4 revenue):

• Revenues before reimbursements decreased 5% YoY in Q4, approximately flat for the full year
• Decline attributed to one less week of activity in Q4 FY2025 compared to Q4 FY2024

What Are the Key Growth Drivers?

CEO Dr. Corrigan outlined the structural tailwinds supporting Exponent's growth:

1. AI and Advanced Technologies: As artificial intelligence and other advanced technologies become embedded in complex systems, rising expectations for safety and reliability drive demand for specialized expertise.

2. Proactive Engagements: User research services in consumer electronics and risk management work in utilities are expanding, particularly as energy infrastructure faces challenges from rising power demand and extreme weather.

3. Reactive Engagements: Failure analysis and dispute-related activities across energy, construction, transportation, and life sciences continue to drive demand for Exponent's independent scientific judgment.

4. Critical Systems Expertise: The most high-stakes situations—where systems fail, interact unexpectedly, or operate at design limits—require human judgment that AI cannot replace.

Capital Allocation

Exponent maintains a shareholder-friendly capital return policy:

The dividend increase and robust share repurchase activity signal management's confidence in the business and commitment to returning excess capital to shareholders.

Balance Sheet Highlights

Exponent remains debt-free with a strong cash position, providing financial flexibility for strategic investments and continued capital returns.

Looking Ahead

Management's confidence in "accelerated year-over-year growth" for FY2026 is underpinned by:

• Structural demand drivers: Rising complexity of systems, AI integration risks, and heightened safety expectations create a durable growth backdrop
• Diversified platform: 90+ technical disciplines and 950+ consultants across multiple industries provide resilience
• Proven operating model: Track record of margin expansion and consistent execution
• Talent investment: 4% headcount growth positions the company to capture demand

Dr. Corrigan concluded: "Supported by strong market drivers, a proven operating model, and a long track record of execution, Exponent is well positioned to create long-term value for our shareholders."

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Earnings call scheduled for February 5, 2026 at 4:30 PM ET. Updated analysis including Q&A highlights will be added once the transcript is available.

Related: EXPO Company Profile | Q3 FY2025 Earnings