ewsba.se
Charles River Associates reported a record Q1 fiscal 2026 revenue of $201 million, up 10.5% year‑over‑year, with broad-based growth across eight practices (notably Energy, Finance, Forensic Services and life sciences) and international revenue up 20.3%.
Consultant headcount rose to 971 and utilization improved to 77%, while non‑GAAP EBITDA was $23.2 million (11.5% of revenue) and margins were materially affected by $13.8 million of non‑cash forgivable loan amortization.
The firm took a $2.6 million restructuring charge to realize about $5 million of annual savings, invested $62.3 million in talent, returned $25.3 million to shareholders, increased its revolver to $300 million (net debt ~$159.5 million), and reaffirmed fiscal 2026 guidance while characterizing AI as a productivity enhancer, not a replacement for its expertise.
Interested in Charles River Associates? Here are five stocks we like better.
Charles River Associates (NASDAQ:CRAI) reported record first-quarter fiscal 2026 revenue and reiterated its full-year outlook, pointing to broad-based demand across practices, improving utilization, and continued investment in senior talent. Management also detailed a restructuring initiative intended to generate annual savings and discussed how artificial intelligence fits into the firm’s service model.
President and CEO Paul A. Maleh said CRA “continued its strong performance” into the first quarter, with revenue increasing 10.5% year-over-year to $201 million, marking the “highest quarterly revenue in the company’s history.” The company surpassed its prior record set in the fourth quarter of fiscal 2025, he said.
→ Berkshire Hathaway’s Record Cash Hoard: Why and What's Next?
Maleh attributed performance to “broad-based contributions,” noting that eight practices grew year-over-year. He said Energy, Finance, Forensic Services, and life sciences posted double-digit revenue growth, while the Antitrust & Competition Economics practice reached a new quarterly revenue high.
Growth was also geographically broad. Maleh said North American operations grew revenue 8.5% year-over-year, while international operations expanded 20.3%.
Maleh said consultant headcount increased 2.5% compared with the first quarter of 2025, and consultant utilization improved to 77%. He connected those results to sales momentum, saying average weekly project lead flow and new project originations both set quarterly records and posted double-digit growth versus the year-ago period.
Chief Financial Officer Eric Nierenberg provided additional staffing detail, saying CRA ended the quarter with 971 consultants, including 170 officers, 598 other senior staff, and 203 junior staff. That was up 2.5% year-over-year and 1.3% sequentially from the fourth quarter of fiscal 2025, he said.
→ Insider Sales: Top AST SpaceMobile Insider Cuts Postion Over 30%
On utilization trends, Maleh told analysts the firm was “pretty strong from the get-go” in 2026, describing utilization as in the upper 70s starting in January rather than improving steadily through the quarter. He added that the company’s medium- to long-term goal is to remain in the “upper 70s ballpark.”
CRA generated $23.2 million of non-GAAP EBITDA, equal to 11.5% of revenue, Maleh said. He noted that first-quarter results are typically affected by higher employee-related benefit costs and taxes tied to annual bonus payments.
Maleh emphasized that the quarter’s profitability also reflected non-cash amortization of forgivable loans of $13.8 million, or 6.9% of revenue, which increased by $4.8 million, or 53%, year-over-year. In response to an analyst question about margin dynamics, Maleh said the reported drop in EBITDA margin versus the prior year was driven by higher forgivable loan amortization, adding that when EBITDA and that amortization are combined, the year-over-year margin comparison was “within 20 basis points of each other.”
Nierenberg said non-GAAP SG&A expenses (excluding 1.5% attributable to commissions to non-employee experts) were 15.6% of revenue, compared with 15.9% a year earlier. He also said the non-GAAP effective tax rate was 30.3% versus 27.2% in the prior-year quarter, primarily due to increased non-deductible executive compensation and a decreased benefit related to share-based compensation.
On working capital, Nierenberg said days sales outstanding (DSO) was 100 days at quarter-end, down from 108 days at the end of fiscal 2025’s fourth quarter, consisting of 58 days billed and 42 days unbilled.
Maleh said first-quarter revenue from CRA’s legal and regulatory services grew 11.5%, which he said was in line with the broader legal market as total case filings and total court judgments increased 8% and 13%, respectively, compared to the first quarter of 2025.
He also highlighted M&A activity, saying worldwide M&A totaled $1.2 trillion in the first quarter of 2026, up 27% year-over-year and the third consecutive quarter above $1 trillion. Against that backdrop, he said the Antitrust & Competition Economics practice “delivered a record quarter,” driven by merger-related activity and demand for antitrust services.
Maleh cited several assignments completed during the quarter across practices, including:
Antitrust & Competition Economics: CRA was jointly retained in a merger between two large North American distributors of janitorial, sanitation, and food services products, analyzing competitive impacts by locality and customer vertical. Maleh said the work supported an FTC review and “culminat[ed] in the agency’s unconditional clearance of the transaction.”
Competition/patent damages: A CRA team advised REEL International in a case before the Hamburg Local Division of the Unified Patent Court. Maleh said the court dismissed the damages claim in full in February 2026.
Finance: CRA supported expert testimony on damages in what Maleh described as “the first Caremark trial in Delaware Court of Chancery,” and supported testimony in litigation tied to Serta Simmons Bedding’s 2020 liability management “uptier transaction.”
Forensic Services: CRA assisted a global software company in assessing whether software development environments were compromised and supported an advertising technology company in defending a privacy class action involving online tracking technologies, including multi-terabyte data analysis and an expert report.
Energy: CRA advised on data center tariffs and load management, was hired by PJM to lead a “backstop procurement auction” tied to increasing loads amid data center growth, and provided diligence on a community solar portfolio for a private equity client.
Life sciences: CRA developed a strategy for a mid-sized global pharmaceutical company and conducted a global pricing study for a combination therapy, including consideration of “Most Favored Nation pricing policies” being put forth by the current U.S. administration.
In the question-and-answer session, Maleh said the firm is seeing heightened demand across practices and described the environment as “perhaps the strongest that I have seen during my tenure at CRA.” Asked what is driving demand, he said he could not point to one factor, but added, “The world isn’t getting more simple, it’s more complex, and thus the need for that kind of expertise in our services continues to grow.”
Maleh said CRA reconfigured targeted areas of its consulting team during the quarter. The effort affected 22 individuals across about a half dozen practices and various corporate departments, resulting in a $2.6 million restructuring charge comprised of $1.6 million of cash charges and $1.0 million of non-cash charges. He said anticipated annual cost savings are approximately $5 million, with minimal impact on revenue, and that the company intends to redeploy those savings into the business.
Chief Corporate Development Officer Chad M. Holmes discussed capital deployment, saying CRA had net cash outlays of $62.3 million for talent investments in the quarter. Holmes said about one-quarter went to acquire senior revenue-generating talent, about one-half funded performance awards earned by previously acquired talent under original transaction terms, and the remaining quarter related to talent retention.
Holmes said CRA returned $25.3 million to shareholders, including $3.8 million in dividends and $21.5 million for repurchases of about 116,000 shares. The company had $44.5 million remaining under its share repurchase program, he added.
CRA ended the quarter with $32.5 million in cash and $192 million borrowed under its revolving credit facility, for net debt of $159.5 million, Holmes said. He also noted that first-quarter borrowings are typically elevated due to annual bonus payments, with more than 80% of bonuses related to fiscal 2025 paid in the first quarter and final installments expected by the end of the second quarter. Total liquidity at quarter-end was $86.7 million, consisting of cash and available credit capacity.
Holmes also said the company increased its revolving credit facility by $50 million to $300 million in aggregate borrowing capacity, citing growth in the business since the facility was established in 2022.
On outlook, Maleh said CRA is “reaffirming our full year financial guidance for fiscal 2026,” citing the strong start to the year, supportive market trends, and pipeline replenishment, while noting that evolving geopolitical and macroeconomic conditions could affect the business.
Maleh also addressed AI, saying CRA views it as “both a demand amplifier and productivity enhancer,” but not a replacement for the firm’s expertise and credibility. “AI can accelerate and in many cases enhance our work,” he said, “but it does not replace CRA’s expertise and credibility in complex and high-stakes environments.”
Charles River Associates (NASDAQ: CRAI) is a global consulting firm specializing in economic, financial and management advisory services. Founded in 1965 and headquartered in Boston, Massachusetts, the company provides expert analysis to support litigation, regulatory proceedings, and strategic decision-making. Its multidisciplinary teams draw on academic rigor and industry experience to deliver quantitative and qualitative insights tailored to clients' needs.
The firm's service offerings include competition economics, antitrust and merger analysis, intellectual property valuation and damages assessment, and risk management.
The article "Charles River Associates Q1 Earnings Call Highlights" was originally published by MarketBeat.