On October 31, 2024, CRA International Inc (CRAI, Financial) released its 8-K filing detailing its financial results for the third quarter of 2024. The U.S.-based advisory firm, known for its economic, financial, and management consultancy services, reported a significant increase in revenue and profitability, surpassing analyst estimates.
Record Revenue and Profitability
CRA International Inc (CRAI, Financial) achieved a record third-quarter revenue of $167.7 million, marking a 13.7% year-over-year growth and exceeding the analyst estimate of $167.61 million. This growth was driven by strong performance across multiple practices, with seven out of eleven practices reporting year-over-year revenue increases. Notably, the Antitrust & Competition Economics, Energy, Financial Economics, Intellectual Property, and Risk, Investigations & Analytics practices each grew by more than 10%.
The company's net income rose by 33.1% to $11.4 million, or 6.8% of revenue, compared to $8.6 million, or 5.8% of revenue, in the same quarter last year. Earnings per diluted share increased by 38.0% to $1.67, surpassing the analyst estimate of $1.58. Non-GAAP earnings per diluted share also saw a significant increase of 56.6% to $1.77.
Financial Achievements and Industry Impact
CRA International Inc's financial achievements are noteworthy in the business services industry, where consistent revenue growth and profitability are critical. The company's ability to convert top-line performance into strong profitability highlights its effective management and operational efficiency. The increase in quarterly dividend by 17% further underscores the company's confidence in its financial health and commitment to returning value to shareholders.
Key Financial Metrics
Utilization for the quarter was reported at 76%, with a slight decrease in quarter-end headcount by 3.6% year-over-year. Non-GAAP EBITDA increased by 54.8% to $21.3 million, or 12.7% of revenue, compared to $13.8 million, or 9.3% of revenue, in the third quarter of 2023. These metrics are crucial as they reflect the company's operational efficiency and ability to manage costs effectively.
Income Statement and Balance Sheet Highlights
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $167.7 million | $147.6 million |
| Net Income | $11.4 million | $8.6 million |
| Earnings per Diluted Share | $1.67 | $1.21 |
On the balance sheet, CRA International Inc reported total assets of $582.3 million, with cash and cash equivalents amounting to $24.5 million. The company's total liabilities stood at $377.8 million, with shareholders' equity at $204.5 million.
Cash Flow and Capital Management
For the fiscal year-to-date period, CRA International Inc reported net cash used in operating activities of $29.7 million. The company also returned $2.9 million to shareholders through quarterly dividend payments. The increase in the quarterly dividend reflects the company's robust cash flow management and its strategic focus on enhancing shareholder value.
Analysis and Outlook
CRA International Inc's strong third-quarter performance and strategic initiatives, such as the dividend increase, position the company favorably in the business services sector. However, the company remains cautious of macroeconomic headwinds and geopolitical conditions that could impact future performance. The reaffirmation of its revenue and profit guidance for the full year of 2024 indicates confidence in its competitive position and operational strategy.
“Continued momentum in the business and demand for our services drove CRA’s quarterly revenue to $167.7 million, representing 13.7% year-over-year growth and the highest third-quarter revenue in the Company’s history,” said Paul Maleh, CRA’s President and Chief Executive Officer.
Explore the complete 8-K earnings release (here) from CRA International Inc for further details.
