Exponent, Inc.

For Q2 2026, total revenues increased 21% year over year to $171.6 million, while net revenues increased 12% to $148.9 million. Net income rose 11% to $29.4 million, and diluted EPS increased 15% to $0.60 versus $0.52 a year ago. EBITDA increased 16% to $42.7 million, with margin at 28.7% of net revenues versus 27.8% in Q2 2025. Billable hours were approximately 390,000, up 8%; average technical full-time employees were 1,012, up 6%; utilization was 74% versus 72%; and realized rates increased about 4%. For the third quarter, management expects net revenues to be up 8% to 10% and EBITDA margin to be 28.0% to 28.5% of net revenues. For full-year 2026, Exponent raised guidance to 9% to 10% net revenue growth and 27.8% to 28.1% EBITDA margin. The company also expects full-year utilization of 72.5% to 73%, realized rate increases of 3.5% to 4%, capex of $12 million to $14 million, and tax rate of 28.5%.

Catherine Corrigan said demand is being driven by long-term themes: rapid technological innovation, more complex products and systems, higher energy demand, resilient infrastructure needs, and rising expectations for safety, reliability, and performance. She emphasized that Exponent is increasingly valuable when AI moves into physical products and real-world systems, where human factors, regulatory issues, and failure analysis intersect. Her tone was confident and focused on Exponent’s differentiated multidisciplinary role.

Eric Anderson highlighted that Q2 growth benefited from reimbursable user research spending, including a large study that ended up representing about 4% of net revenues instead of the 2% expected. He cited EBITDA of $42.7 million, a 28.7% margin, and noted margin expansion despite higher compensation, G&A, and infrastructure investments. On capital allocation, he said the company spent $67.4 million on buybacks in the quarter at an average price of $59.88, paid $14.8 million in dividends, and returned $272 million to shareholders over the last 12 months; the board also added $50 million to the repurchase authorization. He added that cash is now at a lower but still comfortable level, with a stated willingness to operate in a $50 million to $70 million cash range.

Analysts focused on how AI is showing up in both proactive and reactive work, and management said it is contributing to both. On the reactive side, Catherine pointed to advanced driver assistance litigation, data-center failures, battery energy storage, cooling systems, and other infrastructure-related investigations; on the proactive side, user research for AI-enabled products remains especially strong. Questions also centered on the expanding scope of user research and whether utilization could rise further, with management saying the large study expanded meaningfully but should normalize to about 2% of revenues for the rest of the year, while second-half utilization is expected to stay around 74% to 75% in Q3 and lower seasonally in Q4. A final topic was repurchases, and Eric said the company will keep buying back enough stock to offset dilution, with more aggressive buybacks when the stock pulls back, but at a lower pace than in the first half of 2026.