FTI Consulting's 2024 Earnings: Navigating Headwinds and Maintaining Momentum

FTI Consulting, Inc. (NYSE: FCN) recently released its financial results for the full year and fourth quarter ended December 31, 2024, showcasing record revenues and earnings per share. Despite facing headwinds, the company remains confident in its multiyear growth trajectory. Let's delve into the key takeaways and explore how FTI Consulting can maintain this momentum in 2025.



Full Year 2024 Results
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FTI Consulting's full year 2024 revenues increased by 6.0% to $3.699 billion, driven by growth in all business segments. Net income of $280.1 million compared to $274.9 million in the prior year, primarily due to higher revenues, lower income taxes, and a foreign currency ("FX") remeasurement gain. Adjusted EBITDA of $403.7 million, or 10.9% of revenues, compared to $424.8 million, or 12.2% of revenues, in the prior year.

Full year 2024 earnings per diluted share ("EPS") of $7.81 compared to $7.71 in the prior year, including an $8.2 million special charge related to severance and other employee-related costs. Adjusted EPS of $7.99 compared to Adjusted EPS of $7.71 in the prior year.

Fourth Quarter 2024 Results
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Fourth quarter 2024 revenues of $894.9 million decreased by 3.2% compared to revenues of $924.7 million in the prior year quarter, primarily due to lower demand in the Corporate Finance & Restructuring and Technology segments. Net income of $49.7 million compared to $81.6 million in the prior year quarter, primarily due to lower revenues, an increase in direct compensation and SG&A expenses, and the aforementioned special charge.

Fourth quarter 2024 EPS of $1.38 compared to $2.28 in the prior year quarter, including the $8.2 million special charge. Adjusted EPS of $1.56 compared to $2.28 in the prior year quarter.



Maintaining Momentum in 2025
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To maintain the momentum of record full year 2024 revenues and earnings per share in 2025, despite the headwinds mentioned by Steven H. Gunby, President and Chief Executive Officer, FTI Consulting can consider the following strategies:

1. Diversify revenue streams: FTI Consulting can focus on growing its segments that performed well in 2024, such as Forensic and Litigation Consulting, which saw higher demand. This can help offset any potential declines in other segments like Corporate Finance & Restructuring and Technology.
2. Invest in strategic initiatives: Allocating resources to strategic initiatives can help FTI Consulting stay competitive and adapt to changing market conditions. For instance, the company could invest in technology and digital solutions to enhance its service offerings and attract more clients.
3. Strengthen cash position: Maintaining a strong cash position allows FTI Consulting to weather economic storms and invest in growth opportunities. In 2024, the company's cash and cash equivalents and short-term investments increased to $660.5 million, up from $328.7 million in the prior year. Continuing to manage cash effectively will be crucial in 2025.
4. Focus on operational efficiency: Improving operational efficiency can help FTI Consulting maintain profitability despite headwinds. This could involve streamlining processes, reducing costs, and optimizing resource allocation. In 2024, the company saw an increase in direct compensation and SG&A expenses, which could be an area to focus on for improvement.
5. Expand market reach: FTI Consulting can explore new markets or geographies to tap into additional revenue streams. This could involve expanding its global presence or entering new industries where its expertise is in demand. As a global consulting firm, FTI Consulting is well-positioned to pursue these opportunities.

By implementing these strategies, FTI Consulting can work towards maintaining its record revenues and earnings per share in 2025, despite the headwinds mentioned by Gunby. The company's strong performance in 2024 serves as a solid foundation for continued growth and success in the coming year.

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