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- **Revenue Growth**: 10% net revenue increase to $137.1 million, driven by 18% growth in reactive engagements.
- **AI Expansion**: Balancing reactive litigation and proactive algorithm validation, with rapid industry adoption.
- **Financial Strength**: $28 million net income, 28.3% EBITDA margin, and $40 million in Q3 stock buybacks.
- **2026 Outlook**: 4-6% FTE growth, targeting 3-3.5% rate realization as hiring resumes.

**【CEO Summary Section】**
- Exponent reported 8% total revenue growth to $147.1 million, with net revenue up 10% to $137.1 million, driven by double-digit growth in reactive engagements across energy, transportation, and life sciences sectors.
- Proactive engagements in risk management (utility sector) and regulatory consulting (chemicals) offset lower activity in consumer electronics, with improving demand trends expected in Q4.
- AI integration is accelerating across industries, with Exponent leveraging its expertise in failure analysis and human-machine interaction to address safety-critical AI challenges.
- The company is investing in talent to maintain its technical leadership, targeting 4-6% FTE growth in 2026.

**【CFO Financial Commentary】**
- Net income rose 7.7% to $28 million ($0.55 EPS), with EBITDA up 9% to $38.8 million (28.3% margin).
- Billable hours increased 4% to 376,000, with utilization at 74.1% and a 6% realized rate increase.
- Q4 2025 guidance: net revenue growth in low to mid-single digits, EBITDA margin 26-27%, and full-year EBITDA margin 27.4-27.65%.
- $40 million in Q3 stock buybacks and a $100 million increase to the repurchase program reflect confidence in long-term growth.

**【Q&A Highlights】**
- **Hiring Strategy**: 2026 FTE growth expected in 4-6% range, focused on AI, digital health, and energy transition.
- **AI Impact**: Balanced across reactive (litigation, medical devices) and proactive (algorithm validation, hardware design) work, with rapid adoption across industries.
- **Segment Growth**: Reactive engagements grew 18%, while proactive was flat (regulatory consulting gains offset consumer electronics decline).
- **Government Shutdown Impact**: Minimal (2-3% of revenue), with ongoing contracts unaffected.
- **Rate Realization**: 6% in Q3, expected to normalize to 3-3.5% as entry-level hires dilute senior rate mix.

Exponent, Inc. (EXPO) Q3 2025 Earnings Call Transcript

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