FTI Consulting’s third quarter results were shaped by strong performances in its Corporate Finance, Forensic and Litigation Consulting, and Strategic Communications segments, which together more than offset ongoing headwinds in the Economic Consulting and Technology businesses. Management credited prior investments in talent and service expansion for the robust quarter, with CEO Steve Gunby noting, “These results reflect the activities and courage shown by key leaders in those segments, not only this quarter, but over the prior years.” Despite this, the market reacted negatively, reflecting concerns about persistent challenges in certain business areas.
Is now the time to buy FCN? Find out in our full research report (it’s free for active Edge members).
FTI Consulting (FCN) Q3 CY2025 Highlights:
- Revenue: $956.2 million vs analyst estimates of $945.2 million (3.3% year-on-year growth, 1.2% beat)
- Adjusted EPS: $2.60 vs analyst estimates of $1.99 (30.4% beat)
- Adjusted EBITDA: $130.6 million vs analyst estimates of $101.2 million (13.7% margin, 29% beat)
- The company reconfirmed its revenue guidance for the full year of $3.71 billion at the midpoint
- Management raised its full-year Adjusted EPS guidance to $8.45 at the midpoint, a 4.3% increase
- Operating Margin: 12.3%, up from 9.8% in the same quarter last year
- Market Capitalization: $5.11 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From FTI Consulting’s Q3 Earnings Call
- Andrew Nicholas (William Blair) asked about the drivers behind Economic Consulting’s revenue decline and margin outlook. CEO Steve Gunby estimated two-thirds of the decline was due to talent transitions, while the remainder related to market softness, and cautioned that EBITDA bottoming is not guaranteed in the near term.
- Andrew Nicholas (William Blair) inquired about factors driving strength in the transactions practice. Gunby attributed most growth to the leadership team’s execution and rising credibility, noting larger, more complex mandates rather than a broad market upswing.
- Andrew Nicholas (William Blair) questioned the sustainability of pricing gains in Forensic and Litigation Consulting. Gunby responded that while there is continued rate potential, the significant catch-up realized this year is unlikely to repeat at the same scale in the future.
- James Yaro (Goldman Sachs) sought clarification on the impact of AI across business lines. Gunby explained that AI is yielding positive client-facing opportunities, particularly in investigations, but noted little negative impact on billable hours or internal cost structure so far.
- Tyler Barishaw (Truist) asked about headcount growth and margin trends for next year. Gunby said headcount growth this year is lower than historic trends due to targeted reductions, but reaffirmed the long-term need to expand talent to support future opportunities.
Catalysts in Upcoming Quarters
As we look to future quarters, the StockStory team will focus on (1) evidence of revenue stabilization and margin improvement in Economic Consulting, (2) continued demand and pricing momentum in Corporate Finance and Forensic and Litigation Consulting, and (3) the pace of AI tool adoption and new client mandates in Technology. Execution on senior talent integration and progress toward more balanced segment performance will also be important markers.
FTI Consulting currently trades at $168.78, up from $155.81 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members).
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