Q3 2024 FTI Consulting Inc Earnings Call

October 24, 2024

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Speaker Change: I would now like to turn the conference over to Mollie Hawkes head of Investor Relations. Please go ahead.

Mollie Hawkes: Good morning, welcome to the <unk> conference call to discuss the company's third quarter 2024 earnings results as reported this morning management will begin with formal remarks, after which they will take your questions.

Good morning, and welcome to the <unk> consulting third quarter 2024 earnings Conference call.

All participants will be in listen only mode.

Mollie Hawkes: Before we begin I would like to remind everyone that this conference call may include forward looking statements within the meaning of section 20 <unk> of the Securities Act of $19 33, and section 21 of the Securities Exchange Act of 1934 that involve risks and uncertainties forward looking statements include statements concerning.

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Mollie Hawkes: Plans initiatives projections prospects policies processes and practices objective goals commitments strategies future events future revenues future results and performance future capital allocations and expenditures expectation.

Mollie Hawkes: Plans or intentions relating to acquisitions share repurchases and other matters business trends ESG related matters climate change related matters, new or changes to laws and regulations, including scientific or technical developments and other information or other matters that are not historical including statements regarding.

Mollie Hawkes: Estimates of our future financial results and other matters.

Mollie Hawkes: For a discussion of risks and other factors that may cause actual results or events to differ from those contemplated by forward looking statements investors should review the safe Harbor statement in the earnings press release issued this morning, a copy which is available on our website at www Dot S. T I consulting dot com.

Mollie Hawkes: Well as other disclosures under the heading of risk factors and forward looking information in our quarterly report on Form 10-Q for the quarter ended September 32020 for our annual report on Form 10-K for the year ended December 31, 2023, and in our other filings with the SEC invest.

Mollie Hawkes: Investors are cautioned not to place undue reliance on any forward looking statements, which speak only as of the date of this earnings call and will not be updated.

Mollie Hawkes: During the call we will discuss certain non-GAAP financial measures such as total segment operating income adjusted EBITDA total adjusted segment EBITDA adjusted earnings per diluted share adjusted net income adjusted EBITDA margin and free cash flow.

Mollie Hawkes: For a discussion of these and other non-GAAP financial measures as well as our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures investors should review the press release and the accompanying financial tables that we issued this morning, which includes the reconciliations.

Mollie Hawkes: Lastly, there are two items that have been posted to the Investor Relations section of our website for your reference.

Mollie Hawkes: These include a quarterly earnings presentation, and an excel and PDF of our historical financial and operating data, which have been updated to include our third quarter 2024 earnings results.

Mollie Hawkes: Note during today's prepared remarks management will not speak directly to the quarterly earnings presentation posted to the Investor Relations section of our website to ensure our disclosures are consistent these slides provide the similar details as they have historically.

Mollie Hawkes: With me formalities out of the way I'm joined today by Steven Gunby, Our President and Chief Executive Officer, and also several hall, our Chief Financial Officer at this time I will turn the call over to our President and Chief Executive Officer, Steve Gunby. Thank you Mollie and welcome everyone and thank you all for joining us once again this morning.

Sure as usual many of you saw the earnings announcement. This morning, so what I'd like to do.

Mollie Hawkes: Maybe briefly comment on how I view those results and then with your permission, but obviously taking through the performance in more detail.

Yeah.

Mollie Hawkes: If you did in fact have time to look at the third quarter results.

Mollie Hawkes: You saw that they were weaker than we've been reporting in most quarters recently.

Mollie Hawkes: They were also weaker than we expected.

Mollie Hawkes: Year on year revenue growth was only three 7% this quarter, which is of course, nothing like what we've been averaging over the last several years and.

Nothing like what we aspire to.

Mollie Hawkes: And for the first time in a while we actually delivered less revenue this quarter.

Mollie Hawkes: And in the prior quarter.

Mollie Hawkes: As usual when there are not terrific quarters or even when they are terrific quarters.

Mollie Hawkes: There are multiple cartons in this quarter.

Mollie Hawkes: Some of the revenue pressure was due to market causes.

Mollie Hawkes: I'm sure. Many of you monitor the markets for consulting firms and you know that right now in many places around the world.

Mollie Hawkes: Not particularly robust.

Mollie Hawkes: For example, we have some challenges in our Asia businesses.

Mollie Hawkes: So on that we are not alone.

Mollie Hawkes: The number of players to region. So some of those challenges are due to market forces.

Some of the causes as usual are also in terms of us even delays and assignments.

Mollie Hawkes: For example, we have this quarter and are very capable north American <unk> business.

Mollie Hawkes: Some slowness in our strategy business, where that happened, but some large client engagements.

Mollie Hawkes: <unk> are roughly the same time.

Mollie Hawkes: Anticipating the question that perhaps some of you have in mind I did want to underscore that the shortfall in our performance. This quarter was not the result of cost pressure of the investment.

Mollie Hawkes: So the investments that we've been talking about all this year. The shortfall is not really a bottomline story the real issue this quarter was revenue.

Mollie Hawkes: We are making those investments that we've talked about that we've been talking about it and as you might expect we probably will have some effect on the bottom line.

Mollie Hawkes: But many of those investments have only just begun to come on stream.

Mollie Hawkes: And are only starting to hit the P&L.

Mollie Hawkes: So this quarter shortfall should be thought of primarily a revenue story.

Mollie Hawkes: Let me however bridge from that to pivot to talk a little bit more about the investments.

Mollie Hawkes: Because notwithstanding their potential to create some headwinds in our business and our P&L going forward.

Mollie Hawkes: <unk> are an area of considerable continued excitement for me.

Mollie Hawkes: And I think for the company as a whole.

Mollie Hawkes: We announced roughly 25 SMB hires in the last six months compared to roughly half of that in the prior six months.

Mollie Hawkes: That is by far that is far from the number of <unk>, who have accepted our offers just a number of smbs that we've been able to announce and it's far from the number of Smbs in Mds, who are talking with us with excitement and energy.

Mollie Hawkes: Potentially joining.

Mollie Hawkes: And of course, it's important to note that we're not just looking to add talent at the most senior levels. Our company is not just SMB <unk> group.

Mollie Hawkes: We need talent across all levels of our pyramid.

Mollie Hawkes: To deliver for our clients and for our growth and.

Mollie Hawkes: And in that connection I am pleased to announce that in this quarter, we welcomed more than 320 professionals from campuses.

Which was once again, our largest class ever.

Mollie Hawkes: If you'll permit me, let me try to zoom out from the quarter.

Mollie Hawkes: Topics that I see is more fundamental.

Mollie Hawkes: Just talked about the fact that this quarter.

Mollie Hawkes: It wasn't anywhere near what we typically hope for in terms of revenues, whereas a result of those revenues in terms of EPS.

Yeah.

Speaker Change: And of course, it's important to note that we are not just looking to add talent at the most senior levels. Our company is not just an SMB and MVP group, we need talent across all levels of our pyramid to deliver for.

Mollie Hawkes: With a more fundamental question is what does that mean, what does it mean not just for the quarter, but what if anything does it mean about our long term trajectory does it change the bullish view that we've had of the potential of this company.

For our clients and for our growth.

Speaker Change: And in that connection I am pleased to announce that in this quarter, we welcomed more than 320 professionals from campuses.

Mollie Hawkes: After any quarter I think hard about those questions.

Mollie Hawkes: Talk to colleagues about those questions.

Speaker Change: Which was once again, our largest class ever.

Mollie Hawkes: I think that's the most fundamental growth fundamental question.

Mollie Hawkes: My conclusion after all that thought may not be surprising to those of you who have followed us for a while.

Speaker Change: If you'll permit me, let me try to zoom out from the quarter.

Speaker Change: The topics that I see is more fundamental.

Mollie Hawkes: Which is that this quarter, though it was weaker than we would've liked.

Speaker Change: We just talked about the fact that this quarter.

Mollie Hawkes: There's absolutely nothing about the fundamental long term trajectory of this company.

Speaker Change: It wasn't anywhere near what we typically hope for in terms of revenues, whereas a result of those revenues in terms of EPS.

Mollie Hawkes: Just as with like sometimes an extraordinarily good quarter gentlemen.

Speaker Change: With a more fundamental question is what does that mean, what does it mean not just for the quarter, but what if anything does it mean about our long term trajectory does it change the bullish view that we've had of the potential of this company.

This quarter disappointed compared to what we expected.

Mollie Hawkes: It's also worthwhile, having a little perspective on that shortfall. It is still the third highest revenue quarter.

Mollie Hawkes: We've ever had.

Speaker Change: After any quarter I think hard about those questions.

Mollie Hawkes: The only eclipsed by the prior two quarters.

Mollie Hawkes: So a little perspective is one reason I don't think it changes my view of the long term trajectory.

Speaker Change: Talk to colleagues about those questions.

Speaker Change: Because that's the most fundamental growth fundamental question.

Mollie Hawkes: But more fundamentally.

Speaker Change: My conclusion after all that thought may not be surprising to those of you who have followed us for a while.

Mollie Hawkes: The prior two quarters, and where the stock's relative to the prior two quarters.

Mollie Hawkes: The data now.

Speaker Change: Which is that this quarter, though it was weaker than we would've liked.

Mollie Hawkes: To me at least convincingly shows.

Mollie Hawkes: The quarters are not particularly good indicators of the core causal factors.

Speaker Change: There's absolutely nothing about the fundamental long term trajectory of this company.

Mollie Hawkes: In fact actually determined medium and long term success and professional services.

Speaker Change: Just as with like sometimes an extraordinarily good quarter Devon, yes.

Mollie Hawkes: As we've talked about multiple times to my knowledge no one had never seen anyone building a great business and professional services.

Speaker Change: This quarter disappointed compared to what we expected.

Speaker Change: It's also worthwhile, having a little perspective on that shortfall. It is still the third highest revenue quarter.

Mollie Hawkes: With the straight lineup.

Speaker Change: We've ever had.

Mollie Hawkes: If any of you have any examples of that please send them my way.

Speaker Change: The only eclipsed by the prior two quarters.

Mollie Hawkes: There are always things in bags, sometimes substantial zig zags and individual businesses and individual geographies and individual sub businesses.

Speaker Change: So a little perspective is one reason I don't think it changes my view of the long term trajectory.

Speaker Change: But more fundamentally.

Mollie Hawkes: Sometimes those zigzags are driven by market factors or the timing or ending of large jobs, where sometimes some other idiosyncratic factors that just happened to have happened in that quarter and professional services.

Speaker Change: The prior two quarters, and where the stock's relative to the prior two quarters I think the data now.

Speaker Change: To me at least convincingly shows.

Speaker Change: The quarters are not particularly good indicators of the core causal factors that in fact actually determined medium and long term success and professional services.

Mollie Hawkes: The zig zags of course.

Mollie Hawkes: Actually don't mean anything.

Mollie Hawkes: With matters over any extended period of time as the underlying.

Speaker Change: As we've talked about multiple times to my knowledge no one had never seen anyone building a great business and professional services.

Mollie Hawkes: Trajectory.

Mollie Hawkes: Are those diggs enzymes around flatlined.

Speaker Change: With the straight lineup.

Mollie Hawkes: Are they around a downward sloping line.

Speaker Change: If any of you have any examples of that please send them my way.

Mollie Hawkes: Or what they want are they are what you want if you're building a great firm a great firm for your people a great firm for your shareholders.

Speaker Change: There are always things in bags, sometimes substantial zig zags and individual businesses and individuals geographies and individual sub businesses.

Mollie Hawkes: Which is that those zig zags.

Speaker Change: Sometimes those zigzags are driven by market factors were the timing or ending of large jobs or sometimes some other idiosyncratic factors that just happened to happen that quarter and professional services.

Mollie Hawkes: Around the fundamentally upward.

Mollie Hawkes: Sloping line.

Mollie Hawkes: The core question, which trumps.

Mollie Hawkes: And he is knowing that you have over short term bags.

Speaker Change: <unk> and bags of course.

Mollie Hawkes: Those questions in turn are driven by the core elements of what matter and professional services.

Speaker Change: Actually don't mean anything.

Mollie Hawkes: Are we in fact.

Speaker Change: What matters over any extended period of time is the underlying.

Mollie Hawkes: Making a difference for our clients.

Mollie Hawkes: Are we sitting still or are we continuing to build and evolve our capabilities, so will become ever more relevant for those clients.

Speaker Change: Trajectory.

Mollie Hawkes: On ever or more of their most pressing needs.

Mollie Hawkes: Which in turn has driven.

Mollie Hawkes: And the question of are we continuing to attract and support great driven professionals people, who cared deeply.

Mollie Hawkes: The two impactful work to make a difference.

Mollie Hawkes: And cared deeply about building teams and supporting people behind them with similar values and aspirations.

Mollie Hawkes: I believe the data show that if you do those activities and commit to those activities over an extended period of time.

Mollie Hawkes: End up winning in the two markets the two markets that matter and professional services.

Mollie Hawkes: The markets for great clients.

Mollie Hawkes: But also the market for great talent, you become more capable.

Mollie Hawkes: More relevant more able to help your clients address their deepest and most significant opportunities and challenges.

Mollie Hawkes: Which clients ultimately those I'll say ultimately because molly sitting across the table from me and she also has marketing clients ultimately with a little help from marketing and RP F&B is ultimately notice.

Mollie Hawkes: Which then in turn means you win the biggest jobs.

Mollie Hawkes: And at the same time, you're seeing as the best home for ambitious people want to make a difference and we wanted to develop themselves into their best versions of themselves, which in turn allows you to attract the sort of people who can do the quarterly.

Mollie Hawkes: Even if you do everything I just said right.

Mollie Hawkes: Any business can still have a bad quarter.

Mollie Hawkes: But if you do it because you are relevant because you create a great platform, but the best professionals, though you will still have Susan bags.

Mollie Hawkes: It will be zig zags around would you aspire to.

Mollie Hawkes: Fundamentally upward sloping line.

Mollie Hawkes: That has been not just a theory, but our experience these past 10 years.

Mollie Hawkes: And when I look at our business today, the powerful positions we have built.

Mollie Hawkes: Not only in the United States.

Mollie Hawkes: But now also in many markets overseas.

Mollie Hawkes: The leading talent that has been with US now for many years growing and developing becoming more powerful capable versions of themselves.

Mollie Hawkes: As well as the talent that wants to join us at the senior level, but also at the entry levels.

Mollie Hawkes: All of that leaves me ever more confident.

Mollie Hawkes: About where this company has the right to believe it can be.

Mollie Hawkes: Where I believe we can do.

Mollie Hawkes: With that let me turn the call over to your logic.

Speaker Change: Thank you Steve.

Speaker Change: Good morning, everybody.

Speaker Change: In my prepared remarks, I will take you through our company wide and segment results and discuss guidance for the full year.

Speaker Change: As Steve said our results this quarter, primarily revenue growth were below our expectations.

Speaker Change: Revenue growth of three 7% was not sufficient to offset the four 9% increase in direct costs and a 10, 7% increase in selling general and administrative or SG&A expenses.

Which resulted in a 13, 3% decline in adjusted EBITDA.

Speaker Change: FX re measurement losses versus gains in the prior year quarter, and a higher tax rate further dampened earnings year.

Speaker Change: Year over year, our quarterly earnings per share declined 49 cents or 29%.

Speaker Change: And our economic consulting and technology segments, we continue to report year over year revenue growth.

But revenues in our corporate finance and restructuring and strategic communications segments declined year over year.

Speaker Change: Forensic and litigation consulting or <unk> revenues were up slightly year over year.

Speaker Change: Turning to our results in more detail revenues of $926 million increased $32 8 million.

Speaker Change: Compared to revenues of $8 $93 $3 million in the prior year quarter.

Speaker Change: Earnings per share of $1 85 in third quarter 24, compared to $2 34.

Speaker Change: In the prior year quarter.

Speaker Change: Net income of $66 $5 million compared to $83 3 million in the prior year quarter.

Speaker Change: SG&A expenses of $206 million or 22, 2% of revenues.

Speaker Change: This compares to SG&A expenses of $186 $1 million or 28% of revenues in the third quarter of 2023.

Speaker Change: The increase in SG&A was primarily due to higher non billable headcount and related compensation.

Speaker Change: An increase in investments, including in AI capabilities.

Speaker Change: Travel and entertainment.

Speaker Change: And legal expenses.

Speaker Change: Third quarter 2024, adjusted EBITDA of $102 9 million or 11, 1% of revenues compared to $118 $7 million or 13, 3% of revenues in the prior year quarter.

Speaker Change: Our third quarter effective tax rate of 25, 1% compares to 22, 6% in third quarter of 2003.

Speaker Change: The higher tax rate was primarily related to unfavorable tax return adjustments.

Speaker Change: As compared to the prior year income tax provision.

Speaker Change: For the full year, we continue to expect our effective tax rate to be between 2022%.

Speaker Change: Weighted average shares outstanding a ratio for the third quarter ended September 32024, or 35 9 million shares compared to 35 7 million shares for the prior year quarter.

Speaker Change: Billable head count increased by 181 professionals or two 8% and non billable head count increased by 112 professionals or 7% compared to the prior year quarter.

Speaker Change: With the largest increases in technology, corporate finance and restructuring and economic consulting.

Speaker Change: Provision.

Speaker Change: For the full year, we continue to expect our effective tax rate to be between 2022%.

Speaker Change: Sequentially billable head count increased by 325 professionals are five 1%.

Speaker Change: Weighted average shares outstanding a ratio for the third quarter ended September 32024, or 35 9 million shares compared to 35 7 million shares for the prior year quarter.

Which included 322, new joiners from University campuses, our largest class ever.

Billable head count increased by 181 professionals or two 8%.

Speaker Change: Non billable head count increased by 20 professionals or one 2%.

Speaker Change: And non billable head count increased by 112 professionals or 7% compared to the prior year quarter.

Speaker Change: Now I will share some insights at the segment level.

Speaker Change: In corporate finance and restructuring revenues of $341 5 million decreased one 7% compared to the prior year quarter.

Speaker Change: With the largest increases in technology, corporate finance and restructuring and economic consulting.

Speaker Change: Sequentially billable head count increased by 325 professionals are five 1%.

Speaker Change: The decrease in revenues was primarily due to lower demand.

Speaker Change: For our business transformation and strategy services, which more than offset an increase in demand for our transaction services.

Speaker Change: Which included 322, new joiners from University campuses.

Speaker Change: Our largest class ever.

Restructuring revenues were flat year over year.

Speaker Change: Non billable head count increased by 20 professionals or one 2%.

Speaker Change: Adjusted segment EBITDA of $57 9 million or 17.

Speaker Change: Now I will share some insights at the segment level.

17% of segment revenues compared to $68 1 million or 19, 6% of segment revenues in the prior year quarter.

Speaker Change: In corporate finance and restructuring revenues of 341 $5 million decreased one 7% compared to the prior year quarter.

Speaker Change: The decrease in adjusted segment EBITDA was primarily due to lower revenues and higher SG&A expenses, primarily due to an increase in bad debt.

The decrease in revenues was primarily due to lower demand.

Speaker Change: For our business transformation and strategy services, which more than offset an increase in demand for our transaction services.

Speaker Change: In the third quarter restructuring represented 47% of segment revenues.

Speaker Change: Restructuring revenues were flat year over year.

Speaker Change: Business transformation and strategy represented 28% of segment revenues.

Speaker Change: Adjusted segment EBITDA of $57 9 million or.

Speaker Change: Transactions represented 25% of segment revenues.

Speaker Change: Our 17% of segment revenues compared to $68 1 million or 19, 6% of segment revenues in the prior year quarter.

Speaker Change: This compares to 46% for restructuring, 33% for business transformation and strategy and 22% for transactions in <unk> of 'twenty three.

Speaker Change: The decrease in adjusted segment EBITDA was primarily due to lower revenues and higher SG&A expenses, primarily due to an increase in bad debt.

Speaker Change: Sequel for insulin.

Speaker Change: Corporate finance and restructuring revenues decreased $6 $5 million or one 9%.

Speaker Change: In the third quarter restructuring represented 47% of segment revenues.

Speaker Change: As 8% growth in restructuring was more than offset by a 13% decline in business transformation and strategy revenues and a 4% decline in transactions revenues.

Speaker Change: Business transformation and strategy represented 28% of segment revenues.

Speaker Change: Transactions represented 25% of segment revenues.

Speaker Change: As Steve mentioned, our business transformation and strategy business had certain large jobs conclude and others, where the level of billings were significantly lower than last year.

Speaker Change: This compares to 46% for restructuring.

Speaker Change: 3% for business transformation and strategy and 22% for transactions in <unk> of 'twenty three.

Speaker Change: Adjusted segment EBITDA decreased by $8 5 million or 12, 9% sequentially, primarily due to lower revenues and higher SG&A expenses.

Speaker Change: <unk> actually <unk>.

Speaker Change: <unk> finance and restructuring revenues decreased $6 $5 million or one 9%.

Speaker Change: As 8% growth in restructuring was more than offset by a 13% decline in business transformation and strategy revenues and a 4% decline in transactions revenues.

Speaker Change: Turning to forensic and litigation consulting or SLC revenues of $168 $8 million increased one 6% compared to the prior year quarter.

Speaker Change: Acquisition related revenues contributed $1 9 million in the quarter.

Excluding acquisition related revenues the increase in revenues was primarily due to higher construction solutions and dispute revenues, which was partially offset by a decrease in data and analytics and investigations revenues.

Speaker Change: Adjusted segment EBITDA decreased by $8 5 million or 12, 9% sequentially.

Speaker Change: Adjusted segment EBITDA of $20 million or 11, 8% of segment revenues compared to $21 5 million or 12, 9% of segment revenues in the prior year quarter.

Speaker Change: Primarily due to lower revenues and higher SG&A expenses.

Speaker Change: Turning to forensic and litigation consulting our SLC revenues of $168 $8 million increased one 6% compared to the prior year quarter.

Speaker Change: The decrease in adjusted segment EBITDA was primarily due to higher compensation and SG&A expenses.

Speaker Change: Acquisition related revenues contributed $1 9 million in the quarter.

Speaker Change: Sequentially revenues were flat.

Speaker Change: Excluding acquisition related revenues the increase in revenues was primarily due to higher construction solutions and dispute revenues, which was partially offset by a decrease in data and analytics and investigations revenues.

Speaker Change: Adjusted segment EBITDA increased $5 million.

Speaker Change: <unk> due to lower compensation.

Speaker Change: Which was driven largely by a true up in the second quarter from a change in compensation plans.

Speaker Change: Which was partially offset by higher SG&A expenses.

Speaker Change: Adjusted segment EBITDA of $20 million or 11, 8% of segment revenues compared to $21 5 million or 12, 9% of segment revenues in the prior year quarter.

Speaker Change: Our economic consulting segment revenues of $222 million increased 14, 5% compared to the prior year quarter.

Speaker Change: The decrease in adjusted segment EBITDA was primarily due to higher compensation and SG&A expenses.

The increase in revenues was primarily due to higher demand for M&A related antitrust services, which was partially offset by lower demand for non M&A related antitrust services.

Speaker Change: Sequentially revenues were flat.

Speaker Change: Adjusted segment, EBITDA increased $5 million, primarily due to lower compensation.

Adjusted segment EBITDA of $35 2 million or.

Speaker Change: Which was driven largely by a true up in the second quarter from a change in compensation plans.

Speaker Change: A 15, 9% of segment revenues compared to 27 8 million or 14, 3% of segment revenues in the prior year quarter.

Speaker Change: Which was partially offset by higher SG&A expenses.

Speaker Change: The increase in adjusted segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation, which included the impact of the three 2% increase in billable head count.

Speaker Change: Our economic consulting segment revenues of $222 million increased 14, 5% compared to the prior year quarter.

Speaker Change: The increase in revenues was primarily due to higher demand for M&A related antitrust services, which was partially offset by lower demand for non M&A related antitrust services.

Speaker Change: Part of the increase in revenues this quarter was that we recognized.

Speaker Change: $8 1 million in revenues that were previously deferred as.

Speaker Change: Adjusted segment EBITDA of $35 2 million or.

Speaker Change: As client acceptance conditions for revenue recognition were met which boosted adjusted segment EBITDA by approximately $7 million in the third quarter.

Speaker Change: Our 15, 9% of segment revenues compared to 27 8 million or 14, 3% of segment revenues in the prior year quarter.

Speaker Change: Sequentially revenues decreased $8 8 million or three 8%, primarily due to lower financial economics revenues, which was partially offset by higher M&A related antitrust rep revenues.

Speaker Change: Adjusted segment EBITDA decreased $9 $1 million, primarily due to lower revenues.

Speaker Change: Part of the increase in revenues this quarter was that we recognized.

Speaker Change: $8 1 million in revenues that were previously deferred as.

Speaker Change: In technology revenues of $110 4 million.

Speaker Change: As client acceptance conditions for revenue recognition were met which boosted adjusted segment EBITDA by approximately $7 million in the third quarter.

Increased 11, 7% compared to the prior year quarter. The increase in revenues was primarily due to higher demand for M&A related second request.

Speaker Change: Litigation and information governance services, which was partially offset by lower demand for an investigation services.

Speaker Change: Adjusted segment EBITDA of $16 5 million or 14, 9% of segment revenues compared to $14 9 million or 15% per segment revenues in the prior year quarter.

Speaker Change: Adjusted segment EBITDA decreased $9 $1 million, primarily due to lower revenues.

Speaker Change: The increase in adjusted segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation.

Speaker Change: In technology revenues of $110 4 million.

Speaker Change: Increased 11, 7% compared to the prior year quarter. The increase in revenues was primarily due to higher demand for M&A related second request.

Speaker Change: Which includes the impact of a 14, 1% increase in billable head count.

Sequentially revenues decreased $5 $5 million of four 7%, primarily due to lower demand for M&A related second request and investigation services, which was partially offset by higher demand for litigation and information governance services.

Speaker Change: Litigation and information governance services, which was partially offset by lower demand for an investigation services.

Speaker Change: Adjusted segment EBITDA of $16 5 million or 14, 9% of segment revenues compared to $14 9 million or 15% of segment revenues in the prior year quarter.

Speaker Change: Adjusted segment EBITDA decreased $4 5 million sequentially, primarily due to lower revenues.

Speaker Change: The increase in adjusted segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation.

Speaker Change: Revenues in the strategic communications segment of $83.3 million decreased four 1% compared to the prior year quarter.

Speaker Change: Which includes the impact of a 14, 1% increase in billable head count.

Speaker Change: Excluding the estimated positive impact from FX revenues decreased $4 $4 million or five 1%.

Speaker Change: Sequentially revenues decreased $5 5 million or four 7%, primarily due to lower demand for M&A related second request and investigation services, which was partially offset by higher demand for litigation and information governance services.

Speaker Change: The decrease in revenues was primarily due to a decline in pass through revenues and lower corporate reputation revenues, which was partially offset by higher public affairs revenues.

Speaker Change: Adjusted segment EBITDA decreased $4 5 million sequentially, primarily due to lower revenues.

Speaker Change: Adjusted segment EBITDA of $12 1 million or 14, 6% per segment revenues compared to $13 5 million or 15, 5% of segment revenues in the prior year quarter.

Speaker Change: Revenues in the strategic communications segment of $83.3 million decreased four 1% compared to the prior year quarter.

Speaker Change: The decrease in adjusted segment EBITDA was primarily due to lower revenues and higher SG&A expenses compared to the prior year quarter.

Speaker Change: Excluding the estimated positive impact from FX revenues decreased $4 4 million or five 1%.

Speaker Change: Sequentially revenues in strategic communications decreased $1 6 million or one 9% primarily due to a decrease in pass through revenues and lower financial communications revenues.

Speaker Change: Adjusted segment EBITDA of $12 1 million or 14, 6% per segment revenues compared to $13 5 million or 15, 5% of segment revenues in the prior year quarter.

Speaker Change: Adjusted segment EBITDA increased a half a million dollars, primarily due to lower direct compensation and SG&A expenses, which more than offset the decrease in revenues.

Speaker Change: Let me now discuss key cash flow and balance sheet items.

Speaker Change: The decrease in adjusted segment EBITDA was primarily due to lower revenues and higher SG&A expenses compared to the prior year quarter.

Speaker Change: Net cash provided by operating activities of $219 4 million for the quarter compared to a $106 7 million for the prior year quarter.

Speaker Change: The year over year increase in net cash provided by operating activities was primarily due to an increase in cash collections.

Speaker Change: Adjusted segment, EBITDA increased $8 million, primarily due to lower direct compensation and SG&A expenses, which more than offset the decrease in revenues.

Speaker Change: They say.

Speaker Change: Sales outstanding or DSO of 108 days at the end of September 2024, compared with 114 days at the end of September 2023.

Speaker Change: Let me now discuss key cash flow and balance sheet items.

Speaker Change: Free cash flow was $212 $3 million in the quarter.

Speaker Change: Net cash provided by operating activities of $219 4 million for the quarter compared to a $106 7 million for the prior year quarter.

Speaker Change: Total debt net of cash and short term investments of negative.

Speaker Change: $386 3 million.

Speaker Change: At September 32020 forward compared to positive $59 4 million at September 32023, and negative $166 4 million at June 32024.

Speaker Change: The year over year increase in net cash provided by operating activities was primarily due to an increase in cash collections.

Speaker Change: Days sales outstanding or DSO of 108 days at the end of September 2024, compared with 114 days at the end of September 2023.

Speaker Change: The sequential decrease in total debt net of cash and short term investments was primarily due to an increase in net cash provided by operating activities.

Speaker Change: Free cash flow was $212 $3 million in the quarter.

Speaker Change: There were no share repurchases during the quarter.

Speaker Change: As of September 32020 for approximately $467 million remained available for common stock repurchases under the company's stock repurchase program.

Speaker Change: Total debt net of cash and short term investments of negative.

Speaker Change: $386 3 million.

Speaker Change: At September 32020 forward compared to positive $59 4 million at September 32023, and negative $166 4 million at June 32024.

Speaker Change: Turning to our guidance, we are updating our guidance for revenues and EPS as follows.

Speaker Change: We estimate revenues will range between $3 7 billion and $3 $75 billion.

Speaker Change: The sequential decrease in total debt net of cash and short term investments was primarily due to an increase in net cash provided by operating activities.

Speaker Change: Which compares to our previous revenue guidance range of $3 7 billion to $3 $79 billion.

Speaker Change: We estimate EPS will range between $7 90.

Speaker Change: There were no share repurchases during the quarter.

Speaker Change: And $8 35.

Speaker Change: As of September 32020 for approximately $467 million remained available for common stock repurchases under the company's stock repurchase program.

Speaker Change: Which compares to our previous EPS guidance guidance range of $8 10 to $8 60.

Speaker Change: Our guidance is shaped by several key considerations.

Speaker Change: Turning to our guidance, we are updating our guidance for revenues and EPS as follows we estimate revenues will range between $3 7 billion and $3 $75 billion, which compares to our previous revenue guidance range of $3 7 billion to $3.

Speaker Change: First.

Speaker Change: Our revenue and EPS guidance is provided within the range and at times, we find actual results are outside even such a range.

Speaker Change: Because ours is a fixed cost business in the short term were significant new matters, starting or ending can cause short term swings in revenue that then have a disproportionate impact on earnings per share.

Speaker Change: $709 billion.

Speaker Change: We estimate EPS will range between $7 90.

Speaker Change: And $8 35.

Speaker Change: Second we expect.

Speaker Change: Which compares to our previous EPS guidance guidance range of $8 10 to $8 60.

Speaker Change: The slower revenue moment momentum.

Speaker Change: Going into the fourth quarter main person.

Speaker Change: Our guidance is shaped by several key considerations.

Speaker Change: Just.

Speaker Change: Third the restructuring activity remains robust.

Speaker Change: First.

Speaker Change: On a revenue and EPS guidance is provided within the range and at times, we find actual results are outside even such a range.

Speaker Change: We have had weakening results in our business transformation and strategy practices.

Speaker Change: Additionally, economic consulting which has been very strong for the entire year has a large matter that is slowing down.

Speaker Change: For the fourth quarter is typically a weaker quarter for us because of the seasonal business slowdown as professionals may take time off during the holidays.

Speaker Change: Second we expect.

Speaker Change: The slower revenue momentum momentum.

Speaker Change: I want to recognize that last year was an exception in this regard as many of our practitioners in many areas. We're busier than is typical during the fourth quarter.

Speaker Change: Going into the fourth quarter main.

Speaker Change: Persist.

Speaker Change: Third the restructuring activity remains robust.

Speaker Change: Fisk as Steve has said, we have the appetite appetites to continue making investments.

Speaker Change: We have had weakening results in our business transformation and strategy practices.

Speaker Change: Although our head count growth. This year has not yet been significant we have welcomed top notch senior professionals and we expect to build teams behind them.

Speaker Change: Additionally, economic consulting which has been very strong for the entire year has a large matter that is slowing down.

Speaker Change: For the fourth quarter is typically a weaker quarter for us because of the seasonal business slowdown as professionals may take time off during the holidays.

Speaker Change: And of course, we continue to have a lot of additional conversations.

Speaker Change: We cannot say with certainty, though when such investments will be made and therefore, how much impact they may have in this calendar year.

Speaker Change: Want to recognize that last year was an exception in this regard as many of our practitioners in many areas. We're busier than is typical during the fourth quarter.

Speaker Change: Lastly, as you may have noticed as our updated guidance at the midpoint essentially takes us close to where we were when we first set guidance for this year with a narrower range as we have only one quarter left in the year.

Speaker Change: Fifth as Steve has said we have the appetite.

Speaker Change: Advertisers to continue making investments.

Speaker Change: Although our head count growth. This year has not yet been significant we have welcomed top notch senior professionals and we expect to build teams behind them.

Speaker Change: Before I close the right, obviously want to acknowledge that this quarter was not the quarter, we aspired to.

I did want to reiterate four key themes that I believe continue to underscore the strength of our company.

Speaker Change: Of course, we continue to have a lot of additional conversations.

Speaker Change: We cannot say with certainty, though when such investments will be made and therefore, how much impact they may have in this calendar year.

Speaker Change: First we are an expert driven firm and we are confident that the deep expertise of our professionals is what sets us apart and allows us to help our clients navigate more complex and ever increasing dislocation.

Speaker Change: Second we have a set of businesses that is uniquely diverse which can allow us to grow regardless of business cycles.

Speaker Change: Before I close do I, obviously want to acknowledge that this quarter was not the quarter, we aspired to.

Speaker Change: Third we have a growth mindset focused on both retaining and attracting top talent.

Speaker Change: I did want to reiterate four key themes that I believe continue to underscore the strength of our company.

Speaker Change: As evidenced by key senior hires announced this year in areas such as business transformation strategy transactions cyber security forensic accounting and advisory and construction solutions.

Speaker Change: First we are an expert at driven firm and we are confident that the deep expertise of our professionals is what sets us apart and allows us to help our clients navigate more complex and ever increasing dislocation.

Speaker Change: Third our balance sheet remains exceptionally strong.

Speaker Change: We have the ability to boost shareholder value through share buybacks organic growth and acquisitions, when we see the right ones.

Speaker Change: Second we have a set of businesses that is uniquely diverse which can allow us to grow regardless of business cycles.

Speaker Change: Let's open the call up for your questions.

Speaker Change: Thank you if you'd like to ask a question. Please press Star then one.

Speaker Change: Third we have a growth mindset focused on both retaining and attracting top talent.

Speaker Change: Hudson has already been addressed and like to remove yourself from queue. Please press Star then two.

Speaker Change: So the first question comes from Andrew Nicholas with William Blair. Please go ahead.

Speaker Change: Hi, good morning.

Andrew Nicholas: Was hoping you could start by talking a little bit more about restructuring I guess after a decent sequential step down last quarter. It looks like it bounced back a little bit can you talk a little bit about that business that environment how much.

Speaker Change: Our balance sheet remains exceptionally strong.

Speaker Change: We have the ability to boost shareholder value through share buybacks organic growth and acquisitions, when we see the right ones.

Andrew Nicholas: Maybe credit pressures.

Andrew Nicholas: Our getting to you in the form of bankruptcy or restructuring and just overall outlook on that part of the business.

Speaker Change: Let's open the call up for your questions.

Speaker Change: Thank you as he was about.

Speaker Change: To ask a question. Please press Star then one two questions already will address the volt to remove yourself from queue. Please press Star then two.

So Andrew restructuring remains strong.

Andrew Nicholas: The restaurant chain.

Speaker Change: The first question comes from Andrew Nicholas with William Blair. Please go ahead.

Andrew Nicholas: That has customers not going there because after COVID-19 people's patterns have changed.

Andrew Nicholas: Hi, good morning.

Andrew Nicholas: Those those businesses have to do we have to file as they get to that situation or the airline that is facing inflationary cost pressures and competitive pressures may have no choice, even with last quarter I talked about liability management, we have a couple of instances where those liability management.

Andrew Nicholas: You in the form of bankruptcy or restructuring and just overall outlook on that part of the business.

Andrew Nicholas: Companies have now filed.

Andrew Nicholas: So restructuring remains strong.

Andrew Nicholas: Obviously, if interest rates fall by 200 basis points.

Speaker Change: So Andrew restructuring remains strong.

Andrew Nicholas: Credit becomes free that does have a dampening effect, but for now it's robust.

Andrew Nicholas: The restaurant chain.

Andrew Nicholas: That has customers not going there because after COVID-19 people's patterns have changed.

Speaker Change: Okay. Thank you and then.

Speaker Change: On the M&A front.

Andrew Nicholas: Those those businesses have to do we have to file as they get to that situation of the airline that is facing inflationary cost pressures and competitive pressures may have no choice, even with last quarter I talked about liability management, we have a couple of instances where those liability management comes.

Speaker Change: It sounds like at least year over year things have improved you see that in M&A related antitrust.

Speaker Change: You see it in transactions, although sequentially a little bit weaker.

Speaker Change: Can you just speak to that environment as well, maybe if theres any distinctions in terms of M&A appetite by firm size.

Andrew Nicholas: <unk> now filed.

Speaker Change: All of that color would be helpful.

Andrew Nicholas: Restructuring remains strong now obviously, if interest rates fall by 200 basis points in immuno credit becomes free that does have a dampening effect, but for now it's robust.

Speaker Change: Again there.

Speaker Change: The availability of credit is spurring the transactions.

Speaker Change: And now listen sequentially, you've got it just right I mean, roughly speaking we will use to get the M&A was about 15% of our revenues M&A driven few AD from technology economic consulting and corporate finance this year its been as Dean and 20%.

Okay. Thank you and then.

Speaker Change: On the M&A front it.

Speaker Change: It sounds like at least year over year things have improved you see that in M&A related antitrust.

You see it in transactions, although sequentially a little bit weaker.

Speaker Change: And is it 1% slippage this quarter versus the sequential quarter not much so.

Speaker Change: Can you just speak to that environment as well, maybe if theres any distinctions in terms of M&A appetite by firm size.

Speaker Change: It's a robust environment and doing and doing quite well.

Speaker Change: All of that color would be helpful.

Speaker Change: And we have we have distinctly strong positions in a variety of our segments to assist our clients.

Speaker Change: Again there.

Speaker Change: The availability of credit is spurring the transactions.

Speaker Change: Alright. Thank you and then if I could just squeeze one more in you mentioned part of the increase in SG&A was.

Speaker Change: And now listen sequentially you got it just right I mean, roughly speaking we will use to get the M&A was about 15% of our revenues M&A driven if you add from technology economic consulting and corporate finance this year its been as Dean and 20%.

Speaker Change: An increase in investments and you noted AI.

Speaker Change: AI capabilities within that can you flush out some of those investments or what you can say on how youre planning to leverage that technology within your various businesses going forward.

Speaker Change: And there's 1% slippage this quarter versus the sequential quarter not much so, it's a robust environment and doing and doing quite well.

Speaker Change: While I can take that or do you want to take that one too sensor okay look.

Speaker Change: We are like everybody.

Speaker Change: In AI I mean, I think I think.

Speaker Change: Bill Gates famously said on point about all fundamental new technologies.

And we have we have distinctly strong positions in a variety of our segments to assist our clients.

Speaker Change: It is.

Speaker Change: <unk>.

Speaker Change: Confidently predict the first two years always get it wrong in a day.

Speaker Change: Alright. Thank you and then if I could just squeeze one more in you mentioned part of the increase in SG&A was.

Speaker Change: I always overestimate the speed of things, but then for fundamental new technologies.

Speaker Change: An increase in investments and you noted AI capabilities within that can you flush out some of those investments or what you can say on how youre planning to leverage that technology within your various businesses going forward.

Speaker Change: The other corollary as people underestimate the dramatic effect that it has.

Speaker Change: On the world and our businesses in the ensuing 10, and so we're doing a lot of things to make sure. We are at the forefront and not caught unaware and that has to do with.

Speaker Change: While I can take that or do you want to take that one too sensor, okay look where we are like everybody.

Speaker Change: Stuff that we've done for a while our tech and data analytics business that have been on the forefront of machine learning and extending that we've been working on internal tools to help our company navigate but also in out there with clients trying to figure out what early stage things Theyre doing how we can help with them.

Speaker Change: In AI I mean, I think I think.

Speaker Change: Bill Gates famously said on point about all fundamental new technologies.

Speaker Change: It is.

Speaker Change: Funded too.

Speaker Change: Confidently predict the first two years always get it wrong and they always overestimate the speed of things, but then for fundamental new technologies.

Speaker Change: What risks there are because there's a lot of risk associated with the lucent hallucinations and bias in sensitive areas. How we can help them guard against that and so we've invested a lot a lot of internal.

Speaker Change: The other corollary as people underestimate the dramatic effect that it has on the world and our businesses in the ensuing 10 and so we're doing a lot of things to make sure. We are at the forefront and not caught unaware and that has to do with.

Speaker Change: <unk> some some.

Speaker Change: The dollars to build tools and so forth, but also a lot of internal time to do it as well as to train our broader.

Speaker Change: Stuff that we've done for a while our tech and data analytics businesses I've been on the forefront of machine learning and extending that we've been working on internal tools to help our company navigate but also in out there with clients trying to figure out what early stage things Theyre doing how we can help with them.

Speaker Change: SMB cohort because what.

What do you need over time is <unk> seven.

Speaker Change: 750, <unk> in a bunch of Mds, we cannot engage conversations with their clients.

Speaker Change: Going on and the risks and I consider that an investment because yes, we've got some revenue from it but clearly a lot of the work we've done has been.

Speaker Change: What risks there are because there's a lot of risk associated with Lucent hallucinations and bias in sensitive areas. How we can help them guard against that and so we've invested a lot of a lot of internal.

Speaker Change: Without P&L in mind, but really around building the capability of our organization does that start to address your question Andrew.

Andrew Nicholas: It does thank you I'll get back in the queue.

Speaker Change: <unk> some some.

Speaker Change: Thank you and our next question today comes from Tobey Sommer of Truest. Please go ahead.

Speaker Change: The dollars to build tools and so forth, but also a lot of internal time to do it as well as to train our broader.

Pablo Marshwan: Hi, Pablo Marshwan fertility.

Speaker Change: SMB cohort because what.

Tobey Sommer: Excluding the outcome of the election could you talk about some of the headwinds.

Speaker Change: Would you need over time is in the 750, Smbs and a bunch of Mds, we cannot engage conversations with their clients.

Tobey Sommer: <unk> at the business is going to phase in 2025.

Tobey Sommer: Sean.

Speaker Change: What's going on and the risks and I consider that investment to guests we've gotten some revenue from it but clearly a lot of the work we've done has been.

Tobey Sommer: Steadfastly refused to.

Sean: Ever predict an election or the effects of an election on our business.

Without a P&L in mind, but really around building the capability of our organization does that start to address your question Andrew.

No.

Sean: We have lots of people in our company can do that particularly in our stratcom business and God bless them.

Sean: I think.

Andrew Nicholas: It does thank you I'll get back in queue.

Sean: I think most most pundits out there don't even Mexican predictable outcome of this election, let alone the second and third or consequences I will say that obviously things like elections geopolitical events.

Speaker Change: Thank you and our next question today comes from Tobey Sommer of Truest. Please go ahead.

Tobey Sommer: Hi, Paolo Marathon fertility, just excluding the outcome of the election can you talk about some of the headwinds.

Sean: These things can affect our business, but I would say that.

Tobey Sommer: <unk> of the business is going to face in 2025. Thank you.

Sean: We followed a.

Sean: Patterns since I've been here of.

Sean: Stop doing well with me because Brexit is coming and instead focused on the fact that if Brexit comes clients are going to have needs and let's focus on what those needs are and make sure we're positioned against it and I think.

Tobey Sommer: Sean.

Speaker Change: I am.

Speaker Change: Fastly refused to.

Speaker Change: Ever predict an election or the effects of an election on our business.

Speaker Change: No.

Speaker Change: We have lots of people in our company can do that particularly in our stratcom business and God bless them.

Sean: To me you can't predict say that there is no effect on any of these forces that can have an effect, but our company is better served by sort of saying, we'll see where it comes but let's make sure we're positioned against the needs. Because there are needs that are going to be out there and what we need to be positioned against that so that's the rhetoric I haven't I steadfastly refused to give a prediction that you.

Speaker Change: I think that.

Speaker Change: Most most pundits out there don't even think I can predict the outcome of this election, let alone the second and third or consequences I will say that.

Speaker Change: Obviously things like elections geopolitical events.

Speaker Change: These things can affect our business, but I would say that.

Sean: Ask for it so I apologize for that but at least hopefully up somewhat.

Speaker Change: We followed a pattern.

Patterns since I've been here of.

Speaker Change: Got it and then just looking forward how should we think about uses of cash going forward can you maybe just talk about willingness to buy back stock even with the stock at a higher than historical multiple going forward.

Speaker Change: Stop doing what we need because Brexit is coming and instead focused on the fact that if Brexit comes clients are going to have needs and.

Speaker Change: Let's focus on what those needs are and make sure we're positioned against it and I think.

Speaker Change: Well, let me, let me say something about the historical.

Speaker Change: I think RJ, we never comment specifically on what are intending to do in the next quarter or two one on cash.

Speaker Change: To me you can't predict say that there is no effect on any of these forces that can have an effect, but our company is better served by sort of saying well see where it comes but let's make sure we're positioned against the needs. Because there are needs that are going to be out there and what we need to be positioned against that so that's the rhetoric I haven't I steadfastly refused to give a prediction that you.

Speaker Change: Let me say this that.

Speaker Change: And we are acutely aware of the fact that good use of cash are not good use of cash is a key ingredient for creating value for shareholders and we've been focused on that.

Speaker Change: As for it so I apologize for that but at least hopefully up somewhat.

Speaker Change: RJ and my entire time here <unk>.

Speaker Change: We have never felt the need to use the cash in any given quarter. What we are focused on is we are still real leverage for taking the business further and for rewarding shareholders, who have a long term perspective on us and I think it's been a critical ingredients, sometimes it's been we've used it for.

Speaker Change: Well, let me, let me say something about the historical.

Speaker Change: I think RJ, we never comment specifically on what are intending to do in the next quarter or two one on cash.

Speaker Change: Buying back high price debt other times, we've used it where we have seen that critical enabling acquisition, we haven't done a lot of acquisitions, but we've used the cash where we found the right ones. Other times, we've reacted to it my sense is occasionally the stock market has gone crazy on us negatively.

Let me say this that.

Speaker Change: And we are acutely aware of the fact that good use of cash are not good use of cash is a key ingredient for creating value for shareholders and we've been focused on that during <unk> and my entire time here <unk>.

Speaker Change: And you look at the middle of 2017, when that drove our stock price down even though we're reaffirming guidance and.

Speaker Change: We have never felt the need to use the cash in any given quarter. What we are focused on is where is the real leverage for taking the business further and for rewarding shareholders, who have a long term perspective on us and I think it's been a critical ingredient sometimes it's been we've used it for.

Speaker Change: We bought back I think something like 10% of our company that and then same thing happened at the end of 2000 and it wasn't a little perturbation of the stock into the big drop like and.

Speaker Change: When that happens you can buyback a lot of shares and then for the shareholders who have stayed with you.

Speaker Change: Buying back high price debt other times, we've used it where we have seen that critical enabling acquisition, we haven't done a lot of acquisitions, but we would use the cash where we found the right ones. Other times, we've reacted to it my sense is occasionally the stock market has gone crazy on us negatively.

Speaker Change: With tremendous returns. So we think hard about that we do not feel compelled to use the cash in any given quarter, but we are very focused on talking in management and with the board about what's the next level of way that we can do to make it accretive for our shareholders.

Speaker Change: And you look at the middle of 2017, when that drove our stock price down even though we're reaffirming guidance and.

Speaker Change: John anything to add.

Speaker Change: And then just final one can you maybe just talk about areas you see to drive margin expansion going forward.

Speaker Change: We bought back I think something like 10% of our company that and the same thing happened at the end of 2000 and it wasn't a little perturbation of the stock into the big drop like and.

John: Look I think I think a lot of it has to do with.

John: Just getting the revenue in there I mean, we're such a fixed cost business in any short period of time, you say, how can that be well.

Speaker Change: When that happens you can buyback a lot of shares and then for the shareholders who have stayed with you.

John: There is some professional services that have extremely variable comp structures, that's not us for most part we have.

Speaker Change: No.

John: Legacy of our big four comp structure in many parts of our business, where even the SMB is have a relatively fixed cost cost structure and so.

John: If you believe obviously if you don't believe in the business anymore. You believe people you can get rid of all the people, but if you believe in the business and even the people you take the hit the revenue falls dramatically to the bottom line.

Speaker Change: John anything to add.

Speaker Change: And then just final one can you maybe just talk about areas you see to drive margin expansion going forward.

John: And so.

John: Look I think I think a lot of it has to do with.

John: The only solution.

John: Is is is the revenue now you can also stopped making investments and investments in new geographies in order to get revenue you tend to lose money on those initial investments initially or your investment in AI you can stop doing but if you stop doing that then youre not a vibrant growth company than you are and you're milking off the growth of the past and Thats not what we.

John: Just getting the revenue in there I mean, we're such a fixed cost business in any short period of time, you say, how can that be well.

John: There are some professional services that have extremely variable comp structures, that's not us for most part we have.

John: Legacy of our big four comp structure in many parts of our business, where even the SMB is have a relatively fixed cost structure and so.

John: Historically event to be so.

Speaker Change: Does that mean, we don't hire massively into businesses, where we don't see any growth in the next 12 months to 24 months, we've tightened the hiring there, but we continue to invest in the businesses, where we see opportunities for growth or we can get great talent. So for those businesses the story, you're getting back from revenue.

John: If you believe obviously if you don't believe in the business anymore. You believe in people you can get rid of all the people, but if you believe in the business and we believe and the people you take the hit the revenue falls dramatically to the bottom line.

John: So.

John: The only solution.

Speaker Change: We're not a growth business, if youre a sustainable three 7% revenue growth. So that's not what we aspire to does that help.

John: Is is is the revenue now you can also stopped making investments and investments in new geographies, even though the revenue you tend to lose money on those initial investments initially or your investment in AI you can stop doing but if you stop doing that then youre not a vibrant growth company than you are and you're milking off the growth of the past and that's not what we.

Speaker Change: Yes. Thank you.

Speaker Change: Thank you and our next question comes from James <unk> with Goldman Sachs. Please go ahead.

James <unk>: Good morning, and thanks for taking my questions. Steve Obviously, you have your idiosyncratic growth strategy that I have no doubt you will continue to execute on but as you brought it up I just love to get your perspective on the drivers of the weaker industry backdrop, and consulting which does appear weaker than at least global economic growth. What do you think causes this.

John: Historically meant to be so.

Speaker Change: Does that mean, we don't not higher massively into businesses, where we don't see any growth in the next 12 months to 24 months, we've tightened the hiring there, but we continue to invest in the businesses, where we see opportunities for growth or we can get great talent. So for those businesses. The story is getting back from revenue.

James <unk>: Back drop to improve and then as a corollary do you think your business is more or less impacted by these industry trends.

Speaker Change: We're not a growth business, if youre a sustainable three 7% revenue growth. So that's not what we aspire to does that help.

Speaker Change: The second one is easier I think in general we are a little less.

Speaker Change: Yes. Thank you.

Speaker Change: Impacted by those industry trends for two reasons first of all some of our businesses. We have some important businesses that are not correlated with the other ones like restructuring is not necessarily correlated and secondly over the last few years I think in many of our businesses like for example.

Speaker Change: Thank you and our next question comes from James <unk> with Goldman Sachs. Please go ahead.

James: Good morning, and thanks for taking my questions. Steve Obviously, you have your idiosyncratic growth strategy that I have no doubt you will continue to execute on but.

James: As you brought it up I just love to get your perspective on the drivers of the weaker industry backdrop, and consulting which it does appear weaker than at least global economic growth. What do you think causes this backdrop to improve and then as a corollary do you think your business is more or less impacted by these industry trends.

Speaker Change: Are you discovery businesses, we can gain share and so if you can share here.

Speaker Change: Effective than by the competitors, who are losing share right, so and that's our aspiration.

Speaker Change: No.

Speaker Change: Why the big four and some of the other firms are having such slowdowns.

Speaker Change: You can read there.

Speaker Change: The second one is easier I think in general we are a little less.

Speaker Change: Our earnings report I don't know I Havent.

Speaker Change: Founded totally satisfactory I suspect some of it has to do with.

Impacted by those industry trends for two reasons first of all some of our businesses. We have some important businesses that are not correlated with the other ones like restructuring is not necessarily correlated and then secondly over the last few years I think in many of our businesses like for example.

Speaker Change: No.

Speaker Change: There was an over exuberance for a couple of years in terms of deals and so forth and so that the growth rate there.

Speaker Change: That was seen before it wasn't actually a real sustainable growth rate and this is a catch up or catch down I guess would be the case.

Speaker Change: Are you discovery businesses, we can gain share. So if you can share here.

Speaker Change: Some of that has to do presumably.

Speaker Change: Affected by the competitors, who are losing share right, so and that's our aspiration.

Speaker Change: With.

Speaker Change: The global economic conditions, I mean, Europe is not exactly robust in terms of global growth. Some of it has to do with geopolitical conditions.

Speaker Change: No.

Speaker Change: Why the big four and some of the other firms are having such slowdowns.

Speaker Change: The number of.

Speaker Change: We're not in the geopolitical realm, but.

Speaker Change: You can read there.

Speaker Change: Our earnings report I don't know I Havent.

Speaker Change: In Asia, we are feeling our clients who are cutting back.

Speaker Change: Founded totally satisfactory I suspect some of it has to do with.

Speaker Change: That has some effect on us and I think for a number of people those things and we have a confluence of things going on sometimes there is a pause in spending when there is uncertainty I remember this now from not only.

Speaker Change: There was an over exuberance for a couple of years in terms of deals and so forth and so that the growth rate there.

Speaker Change: We've seen before it wasn't actually a real sustainable growth rate and this is a catch up or down I guess would be the case.

Speaker Change: MTI, but my prior employer that.

Speaker Change: Bad news or good news.

Speaker Change: Some of that has to do presumably.

Speaker Change: Often triggers need for for.

Speaker Change: For help uncertainty triggers.

Speaker Change: With.

Speaker Change: The global economic conditions, I mean, Europe is not exactly robust in terms of global growth. Some of it has to do with geopolitical conditions.

Speaker Change: Let me pause and wait at least on anything discretionary, but I don't change, sometimes I really feel like I know the answer to questions and sometimes I'm feeling like I'm correlating a bunch of answers that.

Speaker Change: The number of.

We're not in the geopolitical realm, but.

Speaker Change: Might be plausible and I have to tell you more than that more in that situation here, but do you have other thoughts sharing with me, though and I appreciate yours as well.

Speaker Change: In Asia, we are feeling our clients who are cutting back.

Speaker Change: No I mean, I think it's really entering Steve Kim.

Speaker Change: I'm not sure I have the answer either but that's super helpful color.

Speaker Change: Maybe just.

Speaker Change: Another one here, which is just I think you've had a number of in I've had a number of inbound invest from investors around the potential for the soft spot in revenue and earnings growth for a period.

Speaker Change: MTI, but in my prior employer that.

Speaker Change: Bad news or good news.

Speaker Change: Often triggers need for for.

Speaker Change: For help uncertainty triggers.

Speaker Change: You move past the lower hiring in the back half of last year in the first half of this year to the stronger hiring that you've started to exhibit in this quarter's results. So just putting aside the macro.

Speaker Change: Let me pause and wait at least on anything discretionary, but I, Don James sometimes I really feel like I know the answer to questions and sometimes I'm feeling like I'm correlating a bunch of answers that.

Speaker Change: Is that the case and then I think more importantly over what time period do you think that you would be able to return to the healthy healthier top line growth rates that we are used to from you.

Speaker Change: Might be plausible and I have to tell you more than that more in that situation here, but do you have other thoughts sharing with me, though I appreciate yours as well.

Speaker Change: No I mean, I think it's really entering Steve.

Speaker Change: I'm not sure I have the answer either but that's super helpful color.

Speaker Change: Sure. So James we're not going to give you guidance for next year just yet.

Speaker Change: Maybe just.

Speaker Change: Another one here, which is just I think you've had a number of in I've had a number of investors invest from investors around the potential for the soft spot in revenue and earnings growth for a period.

Speaker Change: You'll have to wait till February for that.

Speaker Change: But we've never aspired for three 6% revenue growth. So let me let me leave that one in terms of when you say when when do you want to return to it.

You move past the lower hiring in the back half of last year in the first half of this year to the stronger hiring that you started to exhibit in this quarter's results. So just putting aside the macro.

Speaker Change: Let me leave it on that amendment in terms of the hiring that.

Speaker Change: The two aspects for this quarters hiring the bulk of the hiring this quarter and billable head count has been from University hires that we gave.

Speaker Change: <unk> offers two one year back.

Speaker Change: So don't read anything.

Speaker Change: We accelerated or whatnot musical commitments made a year back and in terms of hiring of other professionals like the top notch smbs the principles that Steve has been there.

Speaker Change: Sure. So James we're not going to give you guidance for next year just yet.

Speaker Change: You'll have to wait till February for that.

Speaker Change: There for a long time, we will hire exceptional Doc.

Speaker Change: But we've never aspired for three 6% revenue growth. So let me let me leave that one in terms of when you say when when do you want to return to it.

Speaker Change: Talent, regardless of where we are at in the business cycle or in the sub practice is that top notch talent becomes available.

Speaker Change: Let me leave it on that amendment in terms of the hiring.

Speaker Change: Excellent that's very clear. Thank you just one last one on the hiring.

Speaker Change: The two aspects for this quarters hiring the bulk of the hiring this quarter and billable head count has been from University hires that we gave.

Speaker Change: Obviously hirings bounce around a little bit in recent quarters. The company is substantially larger than a few years since you've executed on your strategy. So maybe just taking a step back.

Speaker Change: <unk> offers two one year back.

Speaker Change: So don't read anything.

Speaker Change: We accelerated or whatnot. These were commitments made a year back and in terms of hiring of other professionals like the top notch smbs. The principles that Steve has been there for a long time, we will hire exceptional.

Speaker Change: What do you think a normalized or longer term hiring growth rate should be.

Speaker Change: I think that might just help us think about the longer term growth of the company.

Speaker Change: Yes look.

Speaker Change: I've never given a pinpoint number on that but I've always I think if you go back to the actually the Investor day in 2017.

Talent, regardless of where we are at in the business cycle or in the sub practice.

Speaker Change: Is that top notch talent becomes available.

Speaker Change: I said then when we finally thought had turned this company back into a growth engine that.

Speaker Change: Excellent that's very clear thank you.

Speaker Change: One last one on the hiring.

Speaker Change: That my math said to combined but youre asking in at Pryor.

Speaker Change: <unk>.

Speaker Change: Question, Turkey, if you combined.

Speaker Change: Mid to high.

Speaker Change: Single single digit organic growth.

Speaker Change: What do you think a normalized or longer term hiring growth rate should be.

Speaker Change: And a really good use of cash that over an extended period of time.

Speaker Change: You can turn that that will turn into a top quartile S&P.

Speaker Change: I think that might just help us think about the longer term growth of the company.

Speaker Change: S&P 500 return.

Speaker Change: Yes look.

Speaker Change: And I think that's been true since now we've actually probably averaged.

Speaker Change: I've never given a pinpoint number on that but I've always I think if you go back to the actually the Investor day in 2017, what I said then when we finally thoughts have turned this company back into a growth engine that debt.

Speaker Change: Posted double digit organic growth over that period, which is certainly my aspiration over over over the low singles.

Speaker Change: Hello.

Speaker Change: The 5% to 6% level, but I think that if you do that you have the opportunity to make the investments you want or need to make investments internally on it systems and on on training and the vibrant growth engine that attracts people I think it's hard to have that vitamin C. When you are.

Speaker Change: That my math said to combined what youre asking in a prior call.

Speaker Change: Question, Turkey, if you combined.

Speaker Change: Mid to high.

Speaker Change: Single single digit organic growth.

Speaker Change: And a really good use of cash that over an extended period of time.

Speaker Change: Three 7% growth for any extended period of time, so it's certainly not our aspiration leather.

Speaker Change: You can turn that that will turn into a top quartile S&P.

Speaker Change: Whether we can be I don't know last few years has probably been closer to 10 or 12% growth, where we can do that forever I don't know, but but we aspire to get back much closer to that on a sustained basis not every quarter not every two quarters and you can have you can have a bad year you have a bad 12 months, but my experience is if you do the right thing I've never seen a perfect.

Speaker Change: S&P 500 return.

Speaker Change: And I think that's been true since now we've actually probably averaged.

Speaker Change: Posted double digit organic growth over that period, which is certainly my aspiration over over over the low single.

Speaker Change: Book.

Speaker Change: For five or 6% level, but I think that if you do that you have the opportunity to make the investments you want or need to make the investments internally on it systems and on on training and the vibrant growth engine that attracts people I think it's hard to have that vitamin C. When you are.

Professional services firm that did the right thing that over two years wasn't doing better than this quarter would reflect and so at least that's maybe some historical perspective that gives a little light does that help James Abbott.

James Abbott: Absolutely. Thank you so much Steve.

Speaker Change: Three 7% growth for any extended period of time. So it is certainly not our aspiration leather.

Speaker Change: Thank you and we have no further questions at this time.

Speaker Change: Well, let me just say thank you again for your attention look.

Speaker Change: Whether we can be I don't know last few years 1000 closer to 10 or 12% growth, where we can do that forever I don't know, but but we aspire to get back much closer to that on a sustained basis not every quarter not every two quarters and you can have you can have a bad year you have a bad 12 months, but my experience is if you do the right thing I've never seen a perfect.

Speaker Change: <unk>, 7% as we've said multiple times is not our aspiration.

Speaker Change: But I did look Molly's one of Molly's team sent me recently, just some data I think.

Speaker Change: And the last mile since RJ has been that.

Speaker Change: <unk> and <unk> I think we had 17 down quarters.

Speaker Change: Professional services firm that did the right thing that over two years wasn't doing better than this quarter would reflect and so at least that's maybe some historical perspective that gives a little light does that help James Abbott.

Speaker Change: During that time.

Speaker Change: Which is almost two year almost two a year down quarters and at that time, our actual results have quadrupled.

Speaker Change: So our business is not about keeping every quarter go straight lineup are.

James Abbott: Absolutely. Thank you so much Steve.

Speaker Change: Our business is about building a business.

Speaker Change: Thank you and we have no further questions at this time.

Speaker Change: That.

Speaker Change: <unk>.

Speaker Change: Well, let me just say thank you again for your attention look.

Speaker Change: That has two returns.

Speaker Change: For you the shareholder but the mechanism to do it is to build a vital growth engine that has great people wanting to be here and build something and that is our commitment to do overtime and we are committed we focus on the shareholder value, but we're focusing on making it substantial and sizable and durable and that's what we're in the business of trying.

Speaker Change: <unk>, 7% as we said multiple times, it's not our aspiration.

Speaker Change: But I did look Molly's one of Molly's team sent me recently, just some data I think.

Speaker Change: And the last mile since RJ, it's been.

Speaker Change: And I've been CEO I think we had 17 down quarters.

Speaker Change: During that time.

Speaker Change: To do thanks for your time.

Speaker Change: Which is almost two year almost two a year down quarters and at that time, our actual results have quadrupled.

Speaker Change: Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Speaker Change: So our business is not about keeping every quarter go straight lineup are.

Speaker Change: Our business is about building a business.

Speaker Change: That.

As to Baidu.

Speaker Change: That has two returns.

Speaker Change: For you the shareholder but the mechanism to do it is to build a vital growth engine that has great people wanting to be here and build something and that is our commitment to do over time and we're committed we focus on the shareholder value, but we're focusing on making it substantial and sizable and durable and that's what we're in the business of trying.

Speaker Change: Thanks for your time.

Speaker Change: Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Good morning, and welcome to the F T I consulting third quarter 'twenty to 'twenty four earnings conference call.

Speaker Change: All participants will be in most of them only mode <unk>.

Speaker Change: Should you need assistance.

Speaker Change: Specialists about pushing the star key followed by zero.

Speaker Change: After todays presentation, there will be an opportunity to ask questions.

Speaker Change: To ask a question you May press Star then one on your telephone keypad.

Speaker Change: To withdraw your question. Please press Star then two.

Speaker Change: Please note today's event is being recorded.

Speaker Change: I would now like to turn the conference over to Mollie Hawkes head of Investor Relations. Please go ahead.

Mollie Hawkes: Good morning, welcome to the MSCI consulting conference call to discuss the company's third quarter 2024 earnings results as reported this morning management will begin with formal remarks, after which they will take your questions.

Mollie Hawkes: Before we begin I would like to remind everyone that this conference call may include forward looking statements within the meaning of section 27 a.

Mollie Hawkes: The Securities Act of 1933 and section 21 of the Securities Exchange Act of 1934 that involve risks and uncertainties forward. Looking statements include statements concerning plans initiatives projections prospects policies processes and practices objectives.

Mollie Hawkes: Goals commitments strategies future events future revenues future results and performance future capital allocations and expenditures expectations plans or intentions relating to acquisitions share repurchases and other matters business trends ESG related matters.

Mollie Hawkes: Climate change related matters, new or changes to laws and regulations, including scientific or technical developments and other information or other matters that are not historical including statements regarding estimates of our future financial results and other matters.

Mollie Hawkes: Heading of risk factors and forward looking information in our quarterly report on Form 10-Q for the quarter ended September 32020 for our annual report on Form 10-K for the year ended December 31, 2023, and in our other filings with the SEC.

Mollie Hawkes: Investors are cautioned not to place undue reliance on any forward looking statements, which speak only as of the date of this earnings call and will not be updated.

Mollie Hawkes: For a discussion of these and other non-GAAP financial measures as well as a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures investors should review the press release and the accompanying financial tables that we issued this morning, which includes the reconciliations.

Mollie Hawkes: Lastly, there are two items that have been posted to the Investor Relations section of our website for your reference.

Mollie Hawkes: During today's prepared remarks management will not speak directly to the quarterly earnings presentation posted to the Investor Relations section of our website to ensure our disclosures are consistent these slides provide the similar details as they have historically.

Mollie Hawkes: With the formalities out of the way I'm joined today by Steven Gunby, Our President and Chief Executive Officer, and Ajay <unk>, our Chief Financial Officer.

Mollie Hawkes: At this time I will turn the call over to our President and Chief Executive Officer, Steve Gunby. Thank you Mollie and welcome everyone and thank you all for joining us once again this morning.

Mollie Hawkes: Sure as usual many of you saw the earnings announcement. This morning, so what I'd like to do is maybe briefly comment on how I view those results and then with your permission.

Mollie Hawkes: I'll just take you through the performance in more detail.

Mollie Hawkes: If you did in fact that time to look at the third quarter results.

Mollie Hawkes: You saw that they were weaker than we've been reporting in most quarters recently.

Mollie Hawkes: They were also weaker than we expected.

Mollie Hawkes: Year on year revenue growth was only three 7% this quarter, which is of course is nothing like what we've been averaging over the last several years and up.

Like what we aspire to.

Mollie Hawkes: And for the first time in a while we actually delivered less revenue this quarter.

Mollie Hawkes: And in the prior quarter.

Mollie Hawkes: As usual when there are not terrific quarters or even when they are terrific quarters.

Mollie Hawkes: There are multiple cartons and this quarter.

Mollie Hawkes: Some of the revenue pressure is due to the market causes.

Mollie Hawkes: I'm sure. Many of you monitor the markets for consulting firms and you know that right now in many places around the world.

Mollie Hawkes: Not particularly robust.

Mollie Hawkes: For example, we have some challenges in our Asia businesses.

Mollie Hawkes: Of course and that we are not alone.

Mollie Hawkes: Two of the number of players in the region. So some of those challenges are due to market forces, but some of the causes as usual are also in terms of either delays and assignments.

Mollie Hawkes: For example, we have this quarter and are very capable north American <unk> business.

Mollie Hawkes: Where some slowness in our strategy business, where that happens at some large client engagements. All concluded are roughly the same time.

Mollie Hawkes: So the investments that we've been talking about all this year. The shortfall is not really a bottom line story the real issue this quarter was revenue.

Mollie Hawkes: We are making those investments that we talked about that we've been talking about and as you might expect we probably will have some effect on the bottom line.

Mollie Hawkes: But many of those investments have only just begun to come on stream.

Mollie Hawkes: And are only starting to hit the P&L.

Mollie Hawkes: So this quarter's shortfall should be thought of primarily a revenue story.

Mollie Hawkes: Let me however bridge from that to pivot to talk a little bit more about the investments.

Mollie Hawkes: Because notwithstanding their potential to create some headwinds in our business and our P&L going forward.

Mollie Hawkes: Or an area of considerable continued excitement for me.

Mollie Hawkes: And I think for the company as a whole.

Mollie Hawkes: We announced roughly 25 S&P hires in the last six months compared to roughly half of that in the prior six months.

Mollie Hawkes: That is by far that is far from the number of Smbs, who have accepted our offers just the number of smbs that we've been able to announce and it's far from the number of F&B as in Mds, who are talking with us with excitement and energy about potentially joining.

Mollie Hawkes: And of course, it's important to note that we're not just looking to add talent at the most senior levels. Our company is not just in F&B and MDC group.

Mollie Hawkes: We need talent across all levels of our pyramid to.

Mollie Hawkes: To deliver for our clients and for our growth.

Mollie Hawkes: And in that connection I am pleased to announce that in this quarter, we welcomed more than 320 professionals from campuses.

This was once again, our largest class ever.

Mollie Hawkes: If you'll permit me, let me try to zoom out from the quarter to some topics that I see is more fundamental.

Mollie Hawkes: We just talked about the fact that this quarter.

Mollie Hawkes: It wasn't anywhere near what we typically hope for in terms of revenues, whereas the results of those revenues in terms of EPS.

Mollie Hawkes: After any quarter I think hard about those questions I talk to colleagues about those questions.

Mollie Hawkes: Because that's the most fundamental with fundamental question.

Mollie Hawkes: My conclusion after all that thought may not be surprising to those of you who have followed us for a while.

Mollie Hawkes: Which is that this quarter, though it was weaker than we would've liked.

Mollie Hawkes: There's absolutely nothing about the fundamental long term trajectory of this company.

Mollie Hawkes: Just as with like sometimes an extraordinarily good quarter gentlemen.

Mollie Hawkes: This quarter disappointed compared to what we expected.

Mollie Hawkes: It's also worthwhile, having a little perspective on that shortfall. It is still the third highest revenue quarter.

Mollie Hawkes: Perfect.

Mollie Hawkes: The only eclipsed by the prior two quarters.

Mollie Hawkes: So a little perspective is one reason I don't think it changes my view of the long term trajectory.

Mollie Hawkes: But more fundamentally.

Mollie Hawkes: The prior two quarters, and where the stock's relative to the prior two quarters.

Mollie Hawkes: The data now.

Mollie Hawkes: To me at least convincingly shows.

Mollie Hawkes: The quarters are not particularly good indicators of the core causal factors that in.

Mollie Hawkes: In fact actually determined medium and long term success and professional services.

Mollie Hawkes: As we've talked about multiple times to my knowledge no one had never seen anyone building a great business and professional services.

Mollie Hawkes: With the straight lineup.

Mollie Hawkes: If any of you have any examples of that please send them my way.

Mollie Hawkes: There are always things in bags, sometimes substantial zig zags and individual businesses and individuals geographies and individual sub businesses.

Mollie Hawkes: Sometimes these <unk> are driven by market factors or the timing or ending of large jobs or sometimes some other idiosyncratic factors that just happened to happen in that quarter and professional services.

Mollie Hawkes: The zig zags of course.

Mollie Hawkes: Actually don't mean anything.

With matters over any extended period of time as the underlying.

Mollie Hawkes: Trajectory.

Are those big transactions around the Flatlined.

Mollie Hawkes: Are they around a downward sloping line.

Mollie Hawkes: Or what they want are they are what you want if you're building a great firm a great firm for your people a great firm for your shareholders.

Mollie Hawkes: Which is that those zig zags.

Mollie Hawkes: A round of fundamentally upward.

Mollie Hawkes: <unk>, that's the core question, which trumps.

Mollie Hawkes: And he is knowing that you have over short term bags.

Those questions in turn are driven by the core elements of what matter and professional services.

Mollie Hawkes: Are we in fact.

Mollie Hawkes: Making a difference for our clients.

Mollie Hawkes: Are we sitting still or are we continuing to build and evolve our capabilities. So we become ever more relevant for those clients.

Mollie Hawkes: On ever or more of their most pressing needs.

Mollie Hawkes: Which in turn has driven.

Mollie Hawkes: Now the question of are we continuing to attract.

Mollie Hawkes: Support great driven professionals people, who cared deeply.

To do impactful work to make a difference.

Mollie Hawkes: And care deeply about building teams and supporting people behind them with similar values and aspirations.

Mollie Hawkes: I believe the data show that if you do those activities and commit to those activities over an extended period of time.

Mollie Hawkes: The end up winning in two markets the two markets that matter and professional services.

Mollie Hawkes: The markets for great clients.

Mollie Hawkes: But also the market for great talent, you become more capable.

Mollie Hawkes: More relevant more able to help our clients address their deepest their most significant opportunities and challenges.

Which then in turn means you win the biggest jobs.

Mollie Hawkes: Even if you do everything I, just said right Andy.

Speaker Change: Any business can still have a bad quarter.

Speaker Change: But if you do it because you are relevant because you create a great platform, but the best professionals, though you will still have <unk>.

Speaker Change: It will be zig zags around which you aspire to.

Speaker Change: Fundamentally upward sloping line.

Speaker Change: That has been not just a theory, but our experience these past 10 years.

Speaker Change: And when I look at our business today, the powerful positions we have built.

Speaker Change: Not only in the United States.

Speaker Change: But now also in many markets overseas.

Speaker Change: The leading talent that has been with US now for many years growing and developing becoming more powerful capable versions of themselves.

Speaker Change: As well as the talent that wants to join us at the senior level, but also at the entry levels.

Speaker Change: All of that leaves me ever more confident.

About where this company has the right to believe it can be.

Speaker Change: Where I believe we can do.

Speaker Change: With that let me turn the call over to your logic.

Speaker Change: Thank you Steve.

Speaker Change: Good morning, everybody.

Speaker Change: In my prepared remarks, I will take you through our company wide and segment results and discuss guidance for the full year.

Speaker Change: As Steve said our results this quarter, primarily revenue growth were below our expectations.

Speaker Change: The revenue growth of three 7% was not sufficient to offset the four 9% increase in direct costs and a 10, 7% increase in selling general and administrative or SG&A expenses.

Speaker Change: Which resulted in a 13, 3% decline in.

Speaker Change: And adjusted EBITDA.

FX re measurement losses versus gains in the prior year quarter, and a higher tax rate further dampened earnings.

Speaker Change: Year over year, our quarterly earnings per share declined 49 or 29%.

Speaker Change: And our economic consulting and technology segments, we continue to report year over year revenue growth.

Speaker Change: But revenues in our corporate finance and restructuring and strategic communications segments declined year over year.

Speaker Change: Forensic and litigation consulting or <unk> revenues were up slightly year over year.

Speaker Change: Turning to our results in more detail revenues of $926 million increased $32 8 million compared.

Speaker Change: Compared to revenues of $8 $93 3 million in the prior year quarter.

Speaker Change: Earnings per share of $1 85 in third quarter 24, compared to $2 34.

Speaker Change: In the prior year quarter.

Speaker Change: Net income of $66 $5 million compared to $83 3 million in the prior year quarter.

Speaker Change: SG&A expenses of $206 million or 22, 2% of revenues.

Speaker Change: This compares to SG&A expenses of $186 1 million or 28% of revenues in the third quarter of 2023.

Speaker Change: The increase in SG&A was primarily due to higher non billable headcount and related compensation.

Speaker Change: An increase in investments, including in AI capabilities.

Speaker Change: And entertainment.

Speaker Change: And legal expenses.

Speaker Change: Third quarter 2024, adjusted EBITDA of $102 9 million or.

Speaker Change: Our 11, 1% of revenues compared to $118 $7 million or 13, 3% of revenues in the prior year quarter.

Speaker Change: Our third quarter effective tax rate of 25, 1% compares to 22, 6% in third quarter of 2003.

Speaker Change: The higher tax rate was primarily related to unfavorable tax return adjustments.

Speaker Change: As compared to the prior year income tax provision.

Speaker Change: For the full year, we continue to expect our effective tax rate to be between 2022%.

Speaker Change: Weighted average shares outstanding a ratio for the third quarter ended September 32024, or 35 9 million shares compared to 35 7 million shares for the prior year quarter.

Speaker Change: Billable head count increased by 181 professionals or two 8%.

Speaker Change: And non billable head count increased by 112 professionals or 7% compared to the prior year quarter.

Speaker Change: With the largest increases in technology, corporate finance and restructuring and economic consulting.

Speaker Change: Sequentially billable head count increased by 325 professionals are five 1%.

Speaker Change: Which included 322, new joiners from University campuses, our largest class ever.

Non billable head count increased by 20 professionals or one 2%.

Speaker Change: Now I will share some insights at the segment level.

Speaker Change: In corporate finance and restructuring revenues of 341 $5 million decreased one 7% compared to the prior year quarter.

Speaker Change: The decrease in revenues was primarily due to lower demand.

Speaker Change: For our business transformation and strategy services, which more than offset an increase in demand for our transaction services.

Speaker Change: Our restructuring revenues were flat year over year.

Speaker Change: Adjusted segment EBITDA of $57 9 million or 17% of segment revenues compared to $68 1 million or 19, 6% of segment revenues in the prior year quarter.

Speaker Change: The decrease in adjusted segment EBITDA was primarily due to lower revenues and higher SG&A expenses, primarily due to an increase in bad debt.

Speaker Change: In the third quarter restructuring represented 47% of segment revenues business transformation and strategy represented 28% of segment revenues and transactions represented 25% of segment revenues.

Speaker Change: This compares to 46% for restructuring, 33% for business transformation and strategy and 22% for transactions in <unk> of 'twenty three.

Speaker Change: <unk> actually.

Speaker Change: <unk> finance and restructuring revenues decreased $6 $5 million or one 9%.

Speaker Change: As 8% growth in restructuring was more than offset by a 13% decline in business transformation and strategy revenues and a 4% decline in transactions revenues.

Speaker Change: Adjusted segment EBITDA decreased by $8 5 million or 12, 9% sequentially.

Speaker Change: Primarily due to lower revenues and higher SG&A expenses.

Speaker Change: Turning to forensic and litigation and consulting or <unk> revenues of $168 $8 million increased one 6% compared to the prior year quarter.

Speaker Change: Acquisition related revenues contributed $1 9 million in the quarter.

Speaker Change: Adjusted segment EBITDA of $20 million or 11, 8% of segment revenues compared to $21 5 million or 12, 9% of segment revenues in the prior year quarter.

Speaker Change: The decrease in adjusted segment EBITDA was primarily due to higher compensation and SG&A expenses.

Speaker Change: Sequentially revenues were flat at.

Speaker Change: Adjusted segment EBITDA increased $5 million.

Speaker Change: Primarily due to lower compensation, which was driven largely by a true up in the second quarter from a change in compensation plans.

Speaker Change: Which was partially offset by higher SG&A expenses.

Speaker Change: Our economic consulting segment revenues of $222 million increased 14, 5% compared to the prior year quarter. They.

Speaker Change: The increase in revenues was primarily due to higher demand for M&A related antitrust services, which was partially offset by lower demand for non M&A related antitrust services.

Speaker Change: Adjusted segment EBITDA of $35 2 million or 15, 9% of segment revenues compared to 27 8 million or 14, 3% of segment revenues in the prior year quarter.

Speaker Change: Part of the increase in revenues this quarter was that we recognized.

Speaker Change: $8 1 million in revenues that were previously deferred as.

Speaker Change: As client acceptance conditions for revenue recognition were met which boosted adjusted segment EBITDA by approximately $7 million in the third quarter.

Speaker Change: Sequentially revenues decreased $8 $8 million or three 8%, primarily due to lower financial economics revenues, which was partially offset by higher M&A related antitrust rep revenues.

Speaker Change: Adjusted segment EBITDA decreased $9 $1 million, primarily due to lower revenues.

Speaker Change: In technology revenues of $110 4 million.

Speaker Change: Increased 11, 7% compared to the prior year quarter. The increase in revenues was primarily due to higher demand for M&A related second request.

Speaker Change: Litigation and information governance services, which was partially offset by lower demand for an investigation services.

Speaker Change: Adjusted segment EBITDA of $16 5 million or 14, 9% of segment revenues compared to $14 9 million or 15% of segment revenues in the prior year quarter.

Speaker Change: The increase in adjusted segment EBITDA was primarily due to higher revenues, which was partially offset by an increase in compensation.

Speaker Change: Which includes the impact of a 14, 1% increase in billable headcount.

Speaker Change: Sequentially revenues decreased $5 $5 million of four 7%, primarily due to lower demand for M&A related second request and investigation services, which was partially offset by higher demand for litigation and information governance services.

Speaker Change: Adjusted segment EBITDA decreased $4 5 million sequentially, primarily due to lower revenues.

Speaker Change: Revenues in the strategic communications segment of $83.3 million decreased four 1% compared to the prior year quarter.

Speaker Change: Excluding the estimated positive impact from FX revenues decreased $4 4 million or five 1%.

Adjusted segment EBITDA of $12 $1 million or 14, 6% of segment revenues compared to $13 5 million or 15, 5% of segment revenues in the prior year quarter.

Speaker Change: The decrease in adjusted segment EBITDA was primarily due to lower revenues and higher SG&A expenses compared to the prior year quarter.

Speaker Change: Adjusted segment, EBITDA increased $5 million, primarily due to lower direct compensation and SG&A expenses, which more than offset the decrease in revenues.

Speaker Change: Let me now discuss key cash flow and balance sheet items.

Speaker Change: Net cash provided by operating activities of $219 4 million for the quarter compared to a $106 7 million for the prior year quarter.

Speaker Change: The year over year increase in net cash provided by operating activities was primarily due to an increase in cash collections.

Speaker Change: Days sales outstanding or DSO of 108 days at the end of September 2024, compared with 114 days at the end of September 2023.

Speaker Change: Free cash flow was $212 $3 million in the quarter.

Speaker Change: Total debt net of cash and short term investments of negative.

Speaker Change: $386 3 million at September 32020 forward compared to positive $59 4 million at September 32023, and negative $166 4 million at June 32024.

Speaker Change: The sequential decrease in total debt net of cash and short term investments was primarily due to an increase in net cash provided by operating activities.

Speaker Change: There were no share repurchases during the quarter.

Speaker Change: As of September 32020 for approximately $467 million remained available for common stock repurchases under the company's stock repurchase program.

Speaker Change: Turning to our guidance, we are updating our guidance for revenues and EPS as follows.

Speaker Change: We estimate revenues will range between $3 7 billion and $3 75 billion.

Speaker Change: Which compares to our previous revenue guidance range of $3 7 billion to $3 $79 billion.

Speaker Change: We estimate EPS will range between $7 90.

And $8 35.

Speaker Change: Which compares to our previous EPS guidance guidance range of $8 10 to $8 60.

Speaker Change: Our guidance is shaped by several key considerations.

Speaker Change: First.

Speaker Change: On a revenue and EPS guidance is provided within the range and at times, we find actual results are outside even such a range.

Speaker Change: Second we expect.

Speaker Change: The slower revenue moment momentum.

Speaker Change: Going into the fourth quarter main.

Speaker Change: Just.

Speaker Change: Third, though restructuring activity remains robust.

Speaker Change: We have had weakening results in our business transformation and strategy practices.

Speaker Change: Additionally, economic consulting which has been very strong for the entire year has a large matter that is slowing down.

Speaker Change: For the fourth quarter is typically a weaker quarter for us because of the seasonal business slowdown as professionals may take time off during the holidays.

Speaker Change: I want to recognize that last year was an exception in this regard as many of our practitioners in many areas. We're busier than is typical during the fourth quarter.

Speaker Change: Fifth as Steve has said, we have the appetite appetites to continue making investments.

Speaker Change: Although our head count growth. This year has not yet been significant we have welcomed stopped notch senior professionals and we expect to build themes behind them.

Speaker Change: And of course, we continue to have a lot of additional conversations.

Speaker Change: We cannot say with certainty, though when such investments will be made and therefore, how much impact they may have in this calendar year.

Speaker Change: Before I close, though I, obviously want to acknowledge that this quarter was not the quarter, we aspire to.

Speaker Change: I did want to reiterate four key themes that I believe continue to underscore the strength of our company.

Speaker Change: Second we haven't set of businesses that is uniquely diverse which can allow us to grow regardless of business cycles.

Speaker Change: Third we have a growth mindset focused on both retaining and attracting top talent.

Speaker Change: For our balance sheet remains exceptionally strong.

Speaker Change: We have the ability to boost shareholder value through share buybacks organic growth and acquisitions, when we see the right ones.

Speaker Change: Let's open the call up for your questions.

Speaker Change: Thank you if you'd like to ask a question. Please press Star then one.

Speaker Change: Hudson has already been addressed and like to remove yourself from queue. Please press Star then two.

Speaker Change: So the first question comes from Andrew Nicholas with William Blair. Please go ahead.

Hi, good morning.

Andrew Nicholas: <unk>, maybe credit pressures.

Andrew Nicholas: We are getting to you in the form of bankruptcy or restructuring and just overall outlook on that part of the business.

Speaker Change: So Andrew restructuring remains strong.

Speaker Change: The restaurant chain.

Speaker Change: That has customers not going there because after COVID-19 people's patterns have changed.

Speaker Change: Those those businesses have to do we have to file as they get to that situation or the airline that is facing inflationary cost pressures and competitive pressures may have no choice, even with last quarter I talked about liability management, we have a couple of instances where those liability management.

Speaker Change: <unk> now filed.

Speaker Change: So restructuring remains strong.

Speaker Change: Obviously, if interest rates fall by 200 basis points.

Speaker Change: Credit becomes free that does have a dampening effect, but for now it's robust.

Speaker Change: Okay. Thank you and then.

Speaker Change: On the M&A front.

Speaker Change: It sounds like at least year over year things have improved you see that in M&A related antitrust.

Speaker Change: You see it in transactions, although sequentially a little bit weaker.

Speaker Change: Can you just speak to that environment as well, maybe if theres any distinctions in terms of M&A appetite by firm size.

Speaker Change: All of that color would be helpful.

Speaker Change: Again.

Speaker Change: Sure.

Speaker Change: The availability of credit is spurring the transactions.

Speaker Change: And now listen sequentially, you've got it just right I mean, roughly speaking we will use to get the M&A was about 15% of our revenues M&A driven if you add from technology economic consulting and corporate finance this year its been as Dean and 20%.

1% slippage this quarter versus the sequential quarter not much so it's a robust environment.

Speaker Change: And doing and doing quite well.

Speaker Change: And we have we have distinctly strong positions in a variety of our segments to assist our clients.

Speaker Change: Alright. Thank you and then if I could just squeeze one more in you mentioned part of the increase in SG&A was.

Speaker Change: And an increase in investments and you noted AI capabilities within that can you flush out some of those investments or what you can say on how youre planning to leverage that technology within your various businesses going forward.

Speaker Change: While I can take that or do you want to take that one just sensor, okay look where we are like everybody.

Speaker Change: In AI I mean, I think I think.

Speaker Change: Bill Gates famously said on point about all fundamental new technologies.

Speaker Change: It is.

Speaker Change: Funded too.

Speaker Change: Confidently predict the first two years always get it wrong and they always overestimate the speed of things, but then for fundamental new technologies.

Speaker Change: What risks there are because there's a lot of risk associated with Elisa hallucinations and bias in sensitive areas. How we can help them guard against that and so we've invested a lot a lot of internal.

Speaker Change: <unk> some some.

Speaker Change: The dollars to build tools and so forth, but also a lot of internal time to do it as well as to train our broader.

Speaker Change: SMB cohort because with.

Speaker Change: What do you need over time is in the.

Speaker Change: 750, <unk> in a bunch of Mds, we cannot engage conversations with their clients.

Speaker Change: What's going on and the risks and I consider that an investment because yes, we've gotten some revenue from it but clearly a lot of the work we've done has been.

Speaker Change: Without P&L in mind, but really around building the capability of our organization does that start to address your question Andrew.

Andrew Nicholas: It does thank you I'll get back in queue.

Thank you and our next question today comes from Tobey Sommer of Truest. Please go ahead.

Tobey Sommer: Hi, Paolo Marathon fertility, just excluding the outcome of the election can you talk about some of the headwinds.

Tobey Sommer: <unk> that the business is going to phase in 2025.

Tobey Sommer: Thank you.

Tobey Sommer: Sean.

Tobey Sommer: I am steadfastly refused to.

Speaker Change: Ever predict an election or the effects of an election on our business.

Tobey Sommer: No.

Tobey Sommer: We have lots of people in our company can do that particularly in our stratcom business and God bless them.

Tobey Sommer: I think that.

Tobey Sommer: Most most pundits out there don't even Mexican predictable outcome of this election, let alone the second and third or consequences I will say that.

Tobey Sommer: Obviously things like elections geopolitical events.

Tobey Sommer: These things can affect our business, but I would say that.

Tobey Sommer: We followed a pattern.

Tobey Sommer: Patterns since I've been here of.

Tobey Sommer: Stop doing what worries me, because Brexit is coming and instead focused on the fact that if Brexit comes clients are going to have needs and let's focus on what those needs are and make sure we're positioned against it and I think.

Tobey Sommer: To me you can't predict say that there's no effect of any of these forces that can have an effect, but our company is better served by sort of saying well see where it comes but let's make sure we're positioned against the needs. Because there are needs that are going to be out there and what we need to be positioned against that so that's the rhetoric I have and I steadfastly refused to give a prediction that you.

Tobey Sommer: As for it so I apologize for that but at least that hopefully up somewhat.

Speaker Change: Well, let me, let me say something about the historical.

Speaker Change: I think RJ, we never comment specifically on what are intending to do in the next quarter or two one on cash.

Speaker Change: Let me say this that.

Speaker Change: We have never felt the need to use the cash in any given quarter. What we are focused on is where is the real leverage for taking the business further and rewarding shareholders, who have a long term perspective on us and I think it's been a critical ingredient sometimes it's been we've used it for.

Buying back high price debt other times, we've used it where we have seen that critical enabling acquisition, we haven't done a lot of acquisitions, but we've used the cash where we found the right ones. Other times, we've reacted to it my sense is occasionally the stock market has gone crazy on us negatively.

Speaker Change: And you look at.

Speaker Change: The middle of 2017, when that drove our stock price down even though we're reaffirming guidance and.

Speaker Change: We bought back I think something like 10% of our company that and same thing happened at the end of 2000 and it wasn't a little perturbation of the stock into the big drop like.

Speaker Change: <unk>.

Speaker Change: When that happens you can buyback a lot of shares and then for the shareholders who have stayed with you.

Speaker Change: Hi, John anything to add.

Speaker Change: And then just final one can you maybe just talk about areas you see to drive margin expansion going forward.

Speaker Change: Look I think I think a lot of it has to do with.

Speaker Change: Just getting the revenue in there I mean, we're such a fixed cost business in any short period of time, you say, how can that be well.

Speaker Change: Some professional services that have extremely variable comp structures, that's not us for the most part we have.

Speaker Change: Legacy of our big four comp structure in many parts of our business, where even the SMB is have a relatively fixed cost structure and so.

Speaker Change: If you believe it obviously if you don't believe in the business anymore. You believe people you can get rid of all the people, but if you believe in the business and we believe and the people you take the hit the revenue falls dramatically to the bottom line and so.

Speaker Change: The only solution.

Speaker Change: Is is is the revenue.

Speaker Change: Now you can also stopped making investments and investments in new geographies, even though if you get revenue you tend to lose money on those initial investments initially or your investment in AI you can stop doing but if you stop doing that then youre not a vibrant growth company than you are and you're milking off the growth of the past and that's not what we've historically meant to be so.

Speaker Change: Does that mean, we don't hire massively into businesses, where we don't see any growth in the next 12 months to 24 months, we've taken the hiring there, but we continue to invest in the businesses, where we see opportunities for growth or we can get great talent.

Speaker Change: So for those businesses the story, you're getting back from revenue.

Speaker Change: No not a growth business, if youre a sustainable three 7% revenue growth. So that's not what we aspired to does that help.

Speaker Change: Yes. Thank you.

Speaker Change: Thank you and our next question comes from James <unk> with Goldman Sachs. Please go ahead.

James <unk>: Good morning, and thanks for taking my questions. Steve Obviously, you have your idiosyncratic growth strategy that I have no doubt you will continue to execute on but as you brought it up I just love to get your perspective on the drivers of the weaker industry backdrop, and consulting which it does appear weaker than at least global economic growth.

James <unk>: Do you think causes this backdrop to improve and then as a corollary do you think your business is more or less impacted by these industry trends.

Speaker Change: The second one is easier I think in general we are a little less.

Speaker Change: Impacted by those industry trends for two reasons first of all some of our businesses.

Speaker Change: We have some important businesses that are not correlated with the other ones like restructuring is not necessarily correlated and then secondly over the last few years I think in many of our businesses like for example.

Speaker Change: Are you discovery businesses, we can gain share. So if you are gaining share here.

Speaker Change: Effective than by the competitors, who are losing share right, so and that's our aspiration.

Speaker Change: Why the big four and some of the other firms are having such slowdowns.

Speaker Change: <unk>.

Speaker Change: You can read there they're their earnings report I don't know I founded.

Speaker Change: Founded totally satisfactory I suspect some of it has to do with.

Speaker Change: No.

Speaker Change: There was an over exuberance for a couple of years in terms of deals and so forth and so that the growth rate there.

Speaker Change: We've seen before it wasn't actually a real sustainable growth rate and this is a catch up or catch down I guess would be the case.

Speaker Change: Some of that has to do presumably.

Speaker Change: With.

Speaker Change: The global economic conditions, I mean, Europe is not exactly robust in terms of global growth. Some of it has to do with geopolitical conditions.

Speaker Change: The number of.

Speaker Change: We're not in the geopolitical realm, but.

Speaker Change: In Asia, we are feeling our clients who are cutting back.

Speaker Change: STI, but the my prior employer that.

Speaker Change: Bad news or good news.

Speaker Change: Often triggers need for for.

Speaker Change: For help uncertainty triggers.

Let me pause and wait at least on anything discretionary, but I, Don James sometimes I really feel like I know the answer to questions and sometimes I'm feeling like I'm co leading a bunch of answers that.

Speaker Change: Might be plausible and I have to tell you more than that more in that situation here, but do you have other thoughts sharing with me, though and I appreciate yours as well.

No I mean, I think it's really entering Steve because im not sure I have the answer either but that's super helpful color.

Speaker Change: Maybe just.

Speaker Change: You move past the lower hiring in the back half of last year in the first half of this year to the stronger hiring that you started to exhibit in this quarter's results. So just putting aside the macro.

Speaker Change: Sure. So James we're not going to give you guidance for next year just yet.

Speaker Change: You'll have to wait till February for that.

Speaker Change: But we've never aspired for three 6% revenue growth. So let me let me leave that one in terms of when you say when when do you want to return to it.

Speaker Change: Let me leave it on that amendment in terms of the hiring.

Speaker Change: The two aspects of this quarter's hiding the bulk of the hiring this quarter and billable head count has been from University hires that we gave.

Speaker Change: <unk> offers two one year back.

Speaker Change: So don't read anything.

Speaker Change: That we accelerated or whatnot. These were commitments made a year back and in terms of hiring of other professionals like the top notch smbs. The principles that Steve has said has been there for a long time, we will hire exceptional.

Speaker Change: Talent, regardless of where we are at in the business cycle or in the sub practice.

Speaker Change: Is that top notch talent becomes available.

Speaker Change: Excellent that's very clear thank you.

Speaker Change: One last one on the hiring.

What do you think a normalized or longer term hiring growth rate should be.

Speaker Change: I think that might just help us think about the longer term growth of the company.

Yes look.

Speaker Change: That my math said to combined but youre asking in a prior call.

Speaker Change: Question.

Speaker Change: If you combined mid.

Speaker Change: Mid to high.

Speaker Change: Single single digit organic growth.

Speaker Change: And a really good use of cash that over an extended period of time.

Speaker Change: You can turn that that will turn into a top quartile.

Speaker Change: S&P 500 return.

And I think that's been true since now we've actually probably averaged.

Speaker Change: Posted double digit organic growth over that period, which is certainly my aspiration over over over the low singles.

Speaker Change: Hello.

Speaker Change: The 5% to 6% level, but but I think that if you do that you have the opportunity to make the investments you want or need to make investments internally on it systems and on on training and the vibrant growth engine that attracts people I think it's hard to have that vitamin C. When you are.

Speaker Change: Three 7% growth for any extended period of time. So it is certainly not our aspiration leather.

Speaker Change: Every two quarters and you can have you can have a bad year you have a bad 12 months, but my experience is if you do the right thing I've never seen a perfect great professional services firm that did the right thing that over two years wasn't doing better than this quarter would reflect and so at least that's maybe some historical perspective that gives a little light does that help James.

Absolutely. Thank you so much Steve.

Speaker Change: Thank you and we have no further questions at this time.

Speaker Change: Well, let me just say thank you.

Speaker Change: You again for your attention look.

Speaker Change: Three 7% as we said multiple times, it's not our aspiration.

But I did look Molly's one of Molly's team sent me recently, just some data I think.

Speaker Change: And the last mile since RJ, it's been.

Speaker Change: And I've been CEO I think we had 17 down quarters.

Speaker Change: During that time.

Speaker Change: Which is almost two year almost two a year down quarters and at that time, our actual results have quadrupled.

Speaker Change: So our business is not about keeping every quarter go straight line up a.

Speaker Change: Our business is about building a business.

Speaker Change: Matt.

Matt: Asked too.

Matt: That has two returns.

Matt: For you the shareholder but the mechanism to do it is to build a vital growth engine that has great people wanting to be here and build something and that is our commitment to do overtime and we are committed we focus on the shareholder value, but we're focusing on making it substantial and sizable and durable and thats what were in the business of trying to.

Matt: Thanks for your time.

Speaker Change: Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

Q3 2024 FTI Consulting Inc Earnings Call

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