Operating cash flow was notably negative in **Q1 2024** primarily because the company incurred **higher salaries and annual bonus payments**, along with an **increase in forgivable loan issuances**, which significantly raised cash outflows. These factors were only partially offset by higher cash collections, resulting in a net cash usage of **$(274,818) thousand** for the period.  **[0000887936-24-000065_fcn-20240331.htm:4]** **[0000887936-24-000065_fcn-20240331.htm:27]** **[FCN_3380740_6]** **[0001193125-24-122638_d813421dex991.htm:9]** 

Why was Operating Cash Flow so negative in Q1 2024?

The surge in **Operating Cash Flow** in **Q4 2023** was primarily due to **strong cash collections** resulting from **improved billings**. Earlier in the year, collections were slower because of a transition to a new ERP system, but by Q4, billings had recovered significantly. Additionally, the absence of share repurchases and the full repayment of borrowings under its credit facility further contributed to the improved cash flow outcomes.  **[FCN_3374544_6]** **[0001193125-24-046274_d739790dex991.htm:10]** **[0000887936-24-000015_fcn-20231231.htm:68]** 

What contributed to the surge in Operating Cash Flow in Q4 2023?

Investing activities turned positive in Q1 2024 primarily because the company saw a significant inflow from the **maturity of short-term investments** amounting to **$25,246 thousand**, which was not present in Q1 2023. Additionally, there was a notable **decrease in capital expenditures** by **$13,372 thousand**, largely due to lower spending on leasehold improvements and cloud computing costs. These factors collectively resulted in a net improvement of **$38,618 thousand** compared to the previous year's Q1, turning the investing activities positive.  **[0000887936-24-000065_fcn-20240331.htm:27]** **[0000887936-24-000065_fcn-20240331.htm:4]** 

Why did investing activities turn positive in Q1 2024?

The **cash balance increase** in Q3 2024 was driven by several key factors: a significant boost in **net cash provided by operating activities** (rising to **$219.4 million** from **$106.7 million** in the prior year), a reduction in **Days Sales Outstanding** (down from **114 days** to **108 days**, which improved the speed of cash collection), and a substantial rise in **free cash flow** (increasing to **$212.3 million** from **$92.5 million**) due to both higher operating cash inflows and lower cash outflows for property and equipment.  **[0001193125-24-244186_d860119dex991.htm:1]** **[0000887936-24-000141_fcn-20240930.htm:19]** **[0000887936-24-000141_fcn-20240930.htm:32]** **[0000887936-24-000141_fcn-20240930.htm:19]** **[FCN_3403613_8]** **[0001193125-24-244203_d867386dex991.htm:1]** 

What factors boosted cash balances in Q3 2024?

4e0ca83b592d9b0a33712b77bde425e3997c9e6cf1eb5647f66893ce79590e56

The low **Cash and Cash Equivalents** in **Q3 2023** can be attributed to several key factors. First, the company made a significant cash outflow by fully repaying its **convertible senior notes**, which involved a **$315.8 million** principal repayment in cash.  **[0001193125-23-266240_d568897dex991.htm:7]** **[FCN_3362130_5]**  Additionally, there was a marked increase in **net cash used in operating activities**—**$158.5 million** for the nine months ended September 30, 2023, compared to **$40.4 million** in the previous period—driven by lower-than-expected cash collections, higher employee compensation, and increased operating expenses.  **[0000887936-23-000115_fcn-20230930.htm:35]**  This was compounded by higher cash used in investing activities (up to **$67.6 million** compared to **$45.7 million** previously) and additional cash outflows in financing activities due largely to the note repayment, despite partial offset from net borrowings.  **[0000887936-23-000115_fcn-20230930.htm:35]**  Consequently, the cash balance dropped from around **$491.7 million** at the end of FY 2022 to about **$201.1 million** in Q3 2023.  **[0000887936-23-000115_fcn-20230930.htm:2]** **[0001193125-23-265196_d582634dex991.htm:7]** 

Why was Cash and Cash Equivalents so low in Q3 2023?

The significant drop in **Long-term Debt, Net** in Q3 2023 was primarily due to the following actions: the company fully repaid its **2% convertible senior notes** that matured on **August 15, 2023**, resulting in a **$315.8 million cash repayment** for the principal, and to partially offset this impact, it increased its net borrowings by **$285 million** under its senior secured bank revolving credit facility. This combination of actions resulted in the sequential decrease of total net debt from **$137.2 million** at the end of Q2 2023 to **$59.4 million** at the end of Q3 2023.  **[0001193125-23-266240_d568897dex991.htm:7]** **[0001193125-23-265196_d582634dex991.htm:1]** **[FCN_3362130_5]** **[FCN_3362130_8]** 

Why did Long-term Debt, Net drop significantly in Q3 2023?

The sharp increase in **Accounts Receivable, Net** in Q3 2023 is primarily driven by a **15.1% increase in revenues**, which resulted in a higher volume of billed services not yet collected. Additionally, the implementation of a new ERP system in April 2023 led to **billing delays** and slower collections, while the **Day Sales Outstanding increased from 106 days to 114 days**, indicating slower collections relative to the pace of revenue growth.  **[0001193125-23-265221_d576406dex991.htm:2]** **[0001193125-23-265196_d582634dex991.htm:1]** **[FCN_3362130_5]** **[FCN_3362130_11]** **[0000887936-23-000115_fcn-20230930.htm:35]** 

What drove the sharp increase in Accounts Receivable, Net in Q3 2023?

The decline in **Intangible Assets, Net** in Q3 2023 appears to be attributed to the **amortization** of intangible assets, which was **$4,939 thousand** for the nine months ended September 30, 2023.  **[0001193125-23-265196_d582634dex991.htm:7]** **[0000887936-23-000115_fcn-20230930.htm:2]** 

Why did Intangible Assets, Net decline so much in Q3 2023?

8bde9e9489bf236a717a05372f58435dc88f261b4879d1b7fde5fe1978c5767c

Operating income in Q3 2024 was lower primarily due to **higher SG&A expenses** driven by an increase in non-billable headcount, investments in artificial intelligence, and higher travel and entertainment costs, which together pressured margins. Additionally, the company incurred a **foreign currency remeasurement loss of $2.5 million** compared to a previous FX gain, further impacting profitability. Segment-specific challenges also played a role, with declines in both the **Corporate Finance & Restructuring** and **Strategic Communications** segments, alongside increased overall compensation costs. These factors collectively contributed to the decrease in operating income in Q3 2024.  **[0001193125-24-244186_d860119dex991.htm:1]** **[FCN_3403613_6]** **[0000887936-24-000141_fcn-20240930.htm:21]** 

Why was Operating income lower in Q3 2024?

The drop in Q3 2024 net income was primarily due to several factors. **Increased expenses** played a major role, with a **10.7% rise in SG&A expenses** driven by higher non‐billable headcount, compensation, investments in AI capabilities, and increased travel and entertainment costs, as well as higher bad debt expenses.  **[FCN_3403613_6]** **[0000887936-24-000141_fcn-20240930.htm:21]**  Additionally, the company experienced a **foreign exchange remeasurement loss** of **$2.5 million** compared to a prior gain of **$2.8 million**, resulting in a negative swing of **$5.3 million**.  **[0000887936-24-000141_fcn-20240930.htm:21]**  The **effective tax rate** also increased to **25.1%** from **22.6%**, and while revenues grew by **3.7%**, this was not enough to offset the **4.9% rise in direct costs** and overall expense increases, ultimately leading to a decline in adjusted EBITDA.  **[FCN_3403613_6]** **[0000887936-24-000141_fcn-20240930.htm:21]** 

What contributed to the drop in Net income in Q3 2024?

In Q3 2024, the **basic EPS declined** due to a combination of factors. First, **operating expenses increased significantly**—with direct costs rising by **4.9%** and SG&A expenses by **10.7%**—which outpaced revenue growth of **3.7%**. Additionally, the company faced **FX remeasurement losses** instead of a gain, which further reduced net income. The effective tax rate also **increased to 25.1% from 22.6%**, and revenue declines in segments such as **Corporate Finance & Restructuring** and **Strategic Communications** compounded the impact, leading to an overall **20.9% year-over-year decline in EPS**.  **[FCN_3403613_6]** **[0000887936-24-000141_fcn-20240930.htm:19]** 

Why did basic EPS decline in Q3 2024?

The downturn in Interest income and other in Q4 2023 was primarily driven by **foreign exchange (FX) losses**. Specifically, significant FX losses—amounting to a **$9.3 million net FX loss** over the year ended December 31, 2023, in contrast to a **$0.1 million net FX gain** from the previous year—led to a marked decrease in this line item.  **[0000887936-24-000015_fcn-20231231.htm:61]** 

What drove the downturn in Interest income and other in Q4 2023?

0c06300c2bfe77c80bea8ec50648f28be49bc798bd357f92b1e3fe1d693af281

Revenues (USD, thousands)

Direct cost of revenues (USD, thousands)

Selling, general and administrative expenses (USD, thousands)

Amortization of intangible assets (USD, thousands)

Operating income (USD, thousands)

Interest income and other (USD, thousands)

Interest expense (USD, thousands)

Income before income tax provision (USD, thousands)

Income tax provision (USD, thousands)

Net income (USD, thousands)

Earnings per common share – basic (USD)

Earnings per common share – diluted (USD)

Foreign currency translation adjustments, net of tax (USD, thousands)

Total other comprehensive income (loss), net of tax (USD, thousands)

Comprehensive income (USD, thousands)

8dfa1bd385817ff35a7b5bce9b89f0196bde089f4496c257ddabf828d7464965

Depreciation and amortization (USD, thousands)

Provision for expected credit losses (USD, thousands)

Share-based compensation (USD, thousands)

Net cash provided by (used in) operating activities (USD, thousands)

Purchases of property and equipment and other (USD, thousands)

Maturity of short-term investment (USD, thousands)

Net cash provided by (used in) investing activities (USD, thousands)

Borrowings under revolving line of credit (USD, thousands)

Repayments under revolving line of credit (USD, thousands)

Purchase and retirement of common stock (USD, thousands)

Share-based compensation tax withholdings (USD, thousands)

Proceeds on stock option exercises (USD, thousands)

Deposits and other (USD, thousands)

Net cash used in financing activities (USD, thousands)

Effect of exchange rate changes on cash and cash equivalents (USD, thousands)

Net increase (decrease) in cash and cash equivalents (USD, thousands)

Deferred income taxes (USD, thousands)

Cash and cash equivalents, beginning of period (USD, thousands)

Cash and cash equivalents, end of period (USD, thousands)

3e9fae71a9ab2e4e30f24a9830796331cfd1422455ac77158f96b9900942324c

Cash and Cash Equivalents (USD, thousands)

Accounts Receivable, Net (USD, thousands)

Current Portion of Notes Receivable (USD, thousands)

Prepaid Expenses and Other Current Assets (USD, thousands)

Total Current Assets (USD, thousands)

Property and Equipment, Net (USD, thousands)

Operating Lease Assets (USD, thousands)

Goodwill (USD, thousands)

Intangible Assets, Net (USD, thousands)

Notes Receivable, Net (USD, thousands)

Other Assets (USD, thousands)

Total Assets (USD, thousands)

Accounts Payable, Accrued Expenses and Other (USD, thousands)

Accrued Compensation (USD, thousands)

Billings in Excess of Services Provided (USD, thousands)

Total Current Liabilities (USD, thousands)

Long-term Debt, Net (USD, thousands)

Noncurrent Operating Lease Liabilities (USD, thousands)

Deferred Income Taxes (USD, thousands)

Other Liabilities (USD, thousands)

Total Liabilities (USD, thousands)

Common Stock (USD, thousands)

Additional Paid-in Capital (USD, thousands)

Retained Earnings (USD, thousands)

Accumulated Other Comprehensive Loss (USD, thousands)

Total Stockholders’ Equity (USD, thousands)

Total Liabilities and Stockholders’ Equity (USD, thousands)

4f4d7626294c8cbcf552ed9360566417f125536c0dbd79718b0b9bdd94e49890

fda136d2ece124383ec66330960f4b2d532ff04aefbb2f01caa41f53cbc8903b

Current Assets (USD, thousands)

Accounts Receivable (USD, thousands)

Inventory (USD, thousands)

Non-Current Assets (USD, thousands)

Property, Plant, and Equipment (PP&E) (USD, thousands)

Intangible Assets (USD, thousands)

Current Liabilities (USD, thousands)

Accounts Payable (USD, thousands)

Short-term Debt (USD, thousands)

Accrued Expenses (USD, thousands)

Non-Current Liabilities (USD, thousands)

Long-term Debt (USD, thousands)

Lease Liabilities (USD, thousands)

Deferred Tax Liabilities (USD, thousands)

Shareholders' Equity (USD, thousands)

84c385347502da6dbc1ca0103143995275432b0d2b87478d72438dfb5aaa1af4

United States

United Kingdom

All Other Foreign Countries

North America

EMEA

Asia Pacific

Latin America

Total Revenue

3139ca6ff957a70ae58c3d0a607c1c47e3beb58f86936cf52ef9e3a0b60380d9

Total Revenue (USD, thousands)

Cost of Goods Sold (COGS) (USD, thousands)

SG&A (USD, thousands)

R&D (USD, thousands)

D&A (USD, thousands)

Interest Expense (USD, thousands)

Operating Income (EBIT) (USD, thousands)

Net Income (USD, thousands)

EPS - Basic (USD)

EPS - Diluted (USD)

9ad4c5eb7c6634ef8257a66ccce3aab237f9550a80d03267d800df8069340979

Corporate Finance

- Restructuring

- Transformation and Strategy

- Transactions

Forensic and Litigation Consulting (FLC)

Economic Consulting

Technology

Strategic Communications

7c5aaf34be846b6ade10d387fcda17758d541688ea8729ee7672d8dfc9566246

FTI CONSULTING (FCN)

Financials