FTI Consulting, Inc.

Second-quarter revenue was a record and increased 5.3% year over year; excluding pass-through revenues, revenue rose 6.5%. Adjusted EBITDA was $104.5 million, down from $111.6 million a year ago, and adjusted EBITDA margin was 10.5% versus 11.8%. GAAP EPS was $1.99 and adjusted EPS was $2.16, with $0.17 of the GAAP-versus-adjusted difference tied to extraordinary litigation-related expenses. SG&A was $230.7 million versus $202.2 million in the prior-year quarter. On cash flow, operating cash flow was $152.3 million versus $55.7 million in Q2 2025, and the company repurchased 2.6 million shares for $390.9 million at an average price of $150.84. For full-year 2026, FTI reaffirmed revenue guidance of $3.94 billion to $4.1 billion, lowered GAAP EPS guidance to $8.70 to $9.30 from $8.90 to $9.60, and kept adjusted EPS guidance at $9.10 to $9.70. Management also said Q3 SG&A is expected to be about $12 million lower than Q2, full-year SG&A is now expected to be about $70 million higher than 2025, and the effective tax rate is now expected to be 21% to 23%.

Steven Gunby said the quarter’s top line showed the strength of FTI’s platform, but the bottom line missed expectations because some revenue came in below his aspirations in the U.K., Middle East, and other overseas markets, while SG&A was also elevated. He framed the U.K. issue as largely short term, but said the Middle East remains hard to forecast because of geopolitical disruption. He repeatedly emphasized confidence in the firm’s expert-driven model, strong hiring, and the idea that AI is actually expanding demand for high-stakes advisory work.

Angela Nam highlighted record quarterly revenue growth, but said adjusted EBITDA declined because of higher direct costs and SG&A. She called out SG&A of $230.7 million versus $202.2 million last year, including higher compensation, T&E from the all-SMD meeting, higher legal expenses, and $6.6 million of extraordinary litigation-related expenses. She said operating cash flow was $152.3 million, the company bought back 2.6 million shares for $390.9 million, and about $344 million remained available under the buyback program as of June 30, 2026. On guidance, she said revenue was reaffirmed, GAAP EPS was lowered, adjusted EPS was maintained, SG&A for 2026 is now expected to be about $70 million above 2025, Q3 SG&A should be about $12 million lower than Q2, and the full-year tax rate is now expected to be 21% to 23%.

Analysts pressed management on the Middle East slowdown, restructuring demand, buyback priorities, merger-review rule changes, and what the quarter implies for EBITDA and headcount. Gunby said the Middle East is highly unpredictable, with no clear near-term turn, while Nam said restructuring is not in a boom but still has deep pockets of activity and FTI is winning the largest, most complex matters. On capital allocation, Nam said the company remains opportunistic on buybacks, keeps debt repayment as an option, and views the recent revolver upsizing from $900 million to $1.5 billion as a flexibility-enhancing move rather than a necessity. On DOJ merger-review changes, management said they have not seen any major impact yet.