CRAI 10-Q
Cra International, Inc. (CRAI)
10-Q
2025-10-30
For: 2025-09-27
View Original
Added on
April 08, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________________________________________
FORM 10-Q
________________________________________________________________________________________
For the quarterly period ended September 27, 2025
OR
For the transition period from to
Commission file number: 000-24049
________________________________________________________________________________________
(Exact name of registrant as specified in its charter)
________________________________________________________________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
(617 ) 425-3000
(Registrant’s telephone number, including area code)
_____________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at October 24, 2025 | |||||||||||||
| Common Stock, no par value per share | ||||||||||||||
CRA International, Inc.
INDEX
2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except per share data)
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | ||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Costs of services (exclusive of depreciation and amortization) | |||||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Foreign currency gains (losses), net | ( | ( | ( | ||||||||||||||||||||
| Income before provision for income taxes | |||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Net income per share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average number of shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
3
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
(in thousands)
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | ||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss) | |||||||||||||||||||||||
| Foreign currency translation adjustments, net of tax | ( | ||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
4
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)
| September 27, 2025 | December 28, 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowances of $ | |||||||||||
Unbilled services, net of allowances of $ | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Forgivable loans | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Goodwill, net | |||||||||||
| Intangible assets, net | |||||||||||
| Right-of-use assets | |||||||||||
| Deferred income taxes | |||||||||||
| Forgivable loans, net of current portion | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses | |||||||||||
| Deferred revenue and other liabilities | |||||||||||
| Current portion of lease liabilities | |||||||||||
| Current portion of deferred compensation | |||||||||||
| Revolving line of credit | |||||||||||
| Total current liabilities | |||||||||||
| Non-current liabilities: | |||||||||||
| Deferred compensation and other non-current liabilities | |||||||||||
| Non-current portion of lease liabilities | |||||||||||
| Deferred income taxes | |||||||||||
| Total non-current liabilities | |||||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Shareholders’ equity: | |||||||||||
Preferred stock, | |||||||||||
Common stock, | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities and shareholders’ equity | $ | $ | |||||||||
See accompanying notes to the condensed consolidated financial statements.
5
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands)
| Fiscal Year-to-Date Period Ended | |||||||||||
| September 27, 2025 | September 28, 2024 | ||||||||||
| OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Right-of-use asset amortization | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Share-based compensation expense | |||||||||||
| Bad debt expense (recovery) | |||||||||||
| Unrealized foreign currency remeasurement (gains) losses, net | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Unbilled services | ( | ( | |||||||||
| Prepaid expenses and other current assets, and other assets | ( | ||||||||||
| Forgivable loans | ( | ( | |||||||||
| Incentive cash awards payable | |||||||||||
| Accounts payable, accrued expenses, and other liabilities | ( | ( | |||||||||
| Lease liabilities | ( | ( | |||||||||
| Net cash used in operating activities | ( | ( | |||||||||
| INVESTING ACTIVITIES: | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Consideration paid for acquisition | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| FINANCING ACTIVITIES: | |||||||||||
| Borrowings under revolving line of credit | |||||||||||
| Repayments under revolving line of credit | ( | ( | |||||||||
| Tax withholding payments reimbursed by shares | ( | ( | |||||||||
| Cash dividends paid | ( | ( | |||||||||
| Repurchase of common stock | ( | ( | |||||||||
| Net cash provided by financing activities | |||||||||||
| Effect of foreign exchange rates on cash and cash equivalents | |||||||||||
| Net decrease in cash and cash equivalents | ( | ( | |||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
| Noncash investing and financing activities: | |||||||||||
| Increase in accounts payable and accrued expenses for property and equipment | $ | $ | |||||||||
| Asset retirement obligations | $ | $ | |||||||||
| Excise tax on share repurchases | $ | ( | $ | ( | |||||||
| Right-of-use assets obtained in exchange for lease obligations | $ | $ | |||||||||
| Supplemental cash flow information: | |||||||||||
| Cash paid for taxes | $ | $ | |||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for amounts included in operating lease liabilities | $ | $ | |||||||||
See accompanying notes to the condensed consolidated financial statements.
6
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (unaudited)
(in thousands, except share data)
| Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | ||||||||||||||||||||||||||
| Shares Issued | Amount | ||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 28, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | ||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | ||||||||||||||||||||||||||
| Restricted shares vesting | — | — | — | — | |||||||||||||||||||||||||
| Redemption of vested employee restricted shares for tax withholding | ( | ( | — | — | ( | ||||||||||||||||||||||||
| Accrued excise tax on shares repurchased | — | — | — | ||||||||||||||||||||||||||
| Accrued dividends on unvested shares | — | — | — | ||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
| BALANCE AT MARCH 29, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | ||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | ||||||||||||||||||||||||||
| Restricted shares vesting | — | — | — | — | |||||||||||||||||||||||||
| Redemption of vested employee restricted shares for tax withholding | ( | ( | — | — | ( | ||||||||||||||||||||||||
| Shares repurchased | ( | ( | ( | — | ( | ||||||||||||||||||||||||
| Accrued excise tax on shares repurchased | — | — | ( | — | ( | ||||||||||||||||||||||||
| Accrued dividends on unvested shares | — | — | — | ||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
| BALANCE AT JUNE 28, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | ( | ( | ||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | ||||||||||||||||||||||||||
| Restricted shares vesting | — | — | — | — | |||||||||||||||||||||||||
| Redemption of vested employee restricted shares for tax withholding | ( | ( | — | — | ( | ||||||||||||||||||||||||
| Shares repurchased | ( | ( | ( | — | ( | ||||||||||||||||||||||||
| Accrued excise tax on shares repurchased | — | — | ( | — | ( | ||||||||||||||||||||||||
| Accrued dividends on unvested shares | — | — | ( | — | ( | ||||||||||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
| BALANCE AT SEPTEMBER 27, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
7
CRA INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (unaudited)
(in thousands, except share data)
| Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | ||||||||||||||||||||||||||
| Shares Issued | Amount | ||||||||||||||||||||||||||||
| BALANCE AT DECEMBER 30, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | ( | ( | ||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | ||||||||||||||||||||||||||
| Restricted shares vesting | — | — | — | — | |||||||||||||||||||||||||
| Redemption of vested employee restricted shares for tax withholding | ( | ( | — | — | ( | ||||||||||||||||||||||||
| Shares repurchased | ( | ( | — | ( | |||||||||||||||||||||||||
| Accrued excise tax on shares repurchased | — | — | ( | — | ( | ||||||||||||||||||||||||
| Accrued dividends on unvested shares | — | — | — | ||||||||||||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
| BALANCE AT MARCH 30, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | ( | ( | ||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | ||||||||||||||||||||||||||
| Restricted shares vesting | — | — | — | — | |||||||||||||||||||||||||
| Redemption of vested employee restricted shares for tax withholding | ( | ( | — | — | ( | ||||||||||||||||||||||||
| Shares repurchased | ( | ( | ( | — | ( | ||||||||||||||||||||||||
| Accrued excise tax on shares repurchased | — | — | ( | — | ( | ||||||||||||||||||||||||
| Accrued dividends on unvested shares | — | — | ( | — | ( | ||||||||||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
| BALANCE AT JUNE 29, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | ||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | ||||||||||||||||||||||||||
| Restricted shares vesting | — | — | — | — | |||||||||||||||||||||||||
| Redemption of vested employee restricted shares for tax withholding | ( | ( | — | — | ( | ||||||||||||||||||||||||
| Accrued excise tax on shares repurchased | — | — | — | ||||||||||||||||||||||||||
| Accrued dividends on unvested shares | — | — | ( | — | ( | ||||||||||||||||||||||||
Cash dividends paid ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
| BALANCE AT SEPTEMBER 28, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
8
CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Significant Accounting Policies
Description of Business
CRA International, Inc. and its wholly-owned subsidiaries (collectively, "CRA, "the "Company," “we,” “our” or “us”) is a worldwide leading consulting services firm that applies advanced analytic techniques and in-depth industry knowledge to complex engagements for a broad range of clients. CRA offers services in two broad areas: litigation, regulatory, and financial consulting and management consulting. CRA operates in one business segment. CRA operates its business under its registered trade name, Charles River Associates.
Basis of Presentation
Note 1 to the Consolidated Financial Statements included in Part II, Item 8, on Form 10-K for the fiscal year ended December 28, 2024 describes the significant accounting policies and methods used in preparation of the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
Recent Accounting Standards Not Yet Adopted
Income Taxes (Topic 740): Improvements to Income Tax Disclosures
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). The ASU expands annual disclosures in an entity’s income tax rate reconciliation table and requires annual disclosures regarding cash taxes paid both in the U.S. (federal, state and local) and foreign jurisdictions. ASU 2023-09 also requires income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign.
ASU 2023-09 is effective for CRA for annual periods beginning after December 15, 2024. CRA plans to adopt the amendment during the annual reporting for fiscal year 2025. CRA has assessed the impact of the amendment and has modeled out the changes to its income tax disclosures. As the amendment relates solely to disclosures, the adoption is not expected to have an impact on CRA's financial position or its results of operations.
Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). The
9
CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
ASU requires disclosure, in the notes to the financial statements, specified information about certain costs and expenses including employee compensation, depreciation, and intangible asset amortization.
ASU 2024-03, further clarified in ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense
Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date is effective for CRA for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. CRA expects the adoption of this ASU will have no impact on its financial position or its results of operations, but will result in additional disclosures.
2. Revenues and Allowances
The contracts CRA enters into and operates under specify whether the projects are billed on a time-and-materials or a fixed-price basis. Time-and-materials contracts are typically used for litigation, regulatory, and financial consulting projects while fixed-price contracts are principally used for management consulting projects. In general, project costs are classified in costs of services and are based on the direct salary of CRA’s employee consultants on the engagement, plus all direct expenses incurred to complete the project, including any amounts billed to CRA by its non-employee experts.
Disaggregation of Revenue
The following tables disaggregate CRA’s revenue by type of contract and geographic location (in thousands):
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | |||||||||||||||||||||||||
| Type of Contract | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Consulting services revenues: | ||||||||||||||||||||||||||
| Fixed-price | $ | $ | $ | $ | ||||||||||||||||||||||
| Time-and-materials | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
Revenues have been attributed to locations based on the location of the legal entity generating the revenues.
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | |||||||||||||||||||||||||
| Geographic Breakdown | September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||
| Consulting services revenues: | ||||||||||||||||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||||||||||||
| United Kingdom | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
Reserves for Variable Consideration and Credit Risk
Revenues from CRA's consulting services are recorded at the net transaction price, which includes estimates of variable consideration for which reserves are established. Variable consideration reserves are based on specific price concessions and those expected to be extended to CRA customers estimated by CRA's historical realization rates. Reserves for variable consideration are recorded as a component of the allowances for accounts receivable and unbilled services on the condensed consolidated balance sheets. Adjustments to the reserves for variable consideration are included in revenues on the condensed consolidated statements of operations.
10
CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
CRA also maintains allowances for accounts receivable and unbilled services for estimated losses resulting from clients’ failure to make required payments. Under ASC Topic 326, Financial Instruments—Credit Losses, CRA estimates allowances based on historical charge-off rates, adjusted for days sales outstanding and expected changes to clients’ financial conditions during the anticipated collection period. Bad debt expense, net of recoveries of previously written off allowances, is recorded as a component of selling, general and administrative expenses on the condensed consolidated statements of operations.
The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands):
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | |||||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||||||
| Bad debt expense (recovery), net | $ | $ | ( | $ | $ | |||||||||||||||||||||
Reimbursable Expenses
Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including travel and other out-of-pocket expenses, fees for outside consultants, and other reimbursable expenses. CRA recovers substantially all of these costs. The following expenses are subject to reimbursement (in thousands):
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | |||||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||||||
| Reimbursable expenses | $ | $ | $ | $ | ||||||||||||||||||||||
Contract Balances from Contracts with Customers
The timing of revenue recognition, billings, and cash collections results in accounts receivables, unbilled services, and contract liabilities on the condensed consolidated balance sheets. Revenues recognized for services performed, but not yet billed to clients, are recorded as unbilled services. The following table presents the open and closing balances of CRA's accounts receivable, net and unbilled services, net (in thousands):
| September 27, 2025 | December 28, 2024 | December 30, 2023 | ||||||||||||||||||
| Accounts receivable, net | $ | $ | $ | |||||||||||||||||
| Unbilled services, net | $ | $ | $ | |||||||||||||||||
CRA defines contract assets as assets for which it has recorded revenue because it determines that it is probable that it will earn a performance-based or contingent fee, but is not yet entitled to receive a fee because certain events, such as completion of the measurement period or client approval, must occur. The contract assets balance was immaterial as of September 27, 2025, December 28, 2024, and December 30, 2023.
When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after performance obligations have been satisfied and all revenue recognition criteria have been met. Contract liabilities are included in deferred revenue and other liabilities in the condensed consolidated balance sheets. The following table presents the closing balances of CRA's contract liabilities (in thousands):
| September 27, 2025 | December 28, 2024 | December 30, 2023 | ||||||||||||||||||
| Contract liabilities | $ | $ | $ | |||||||||||||||||
11
CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
CRA recognized the following revenue that was included in the contract liabilities balance as of the opening of the respective period or for performance obligations satisfied in previous periods (in thousands):
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | |||||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||||||
| Amounts included in contract liabilities at the beginning of the period | $ | $ | $ | $ | ||||||||||||||||||||||
| Performance obligations satisfied in previous periods | $ | $ | $ | $ | ||||||||||||||||||||||
3. Forgivable Loans
In order to attract and retain highly skilled professionals, CRA may issue forgivable loans to employees and non-employee experts, certain of which may be denominated in local currencies. A portion of these loans is collateralized. The forgivable loans have terms that are generally between and eight years with interest rates currently between 0.43 % and 5.12 %. The principal amount of forgivable loans and accrued interest is forgiven by CRA over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with CRA and complies with certain contractual requirements. During the fiscal year-to-date period ended September 27, 2025 and fiscal year 2024 there were no balances due under these loans for which the full principal and interest were not forgiven or not collected upon termination of employment or affiliation with CRA. The forgiveness of the principal amount of the loans is recorded as compensation over the service period, which is consistent with the term of the loans.
The following table presents forgivable loan activity for the respective periods (in thousands):
| September 27, 2025 | December 28, 2024 | |||||||||||||
| Beginning balance | $ | $ | ||||||||||||
| Advances | ||||||||||||||
| Repayments | ( | ( | ||||||||||||
Reclassifications from accrued expenses or to other assets (1) | ( | ( | ||||||||||||
Amortization (2) | ( | ( | ||||||||||||
| Effects of foreign currency translation | ( | |||||||||||||
| Ending balance | $ | $ | ||||||||||||
| Current portion of forgivable loans | $ | $ | ||||||||||||
| Non-current portion of forgivable loans | $ | $ | ||||||||||||
_______________________________
(1)Relates to the reclassification of performance awards previously recorded as accrued expenses or forgivable loans that have been reclassified to other receivables.
4. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the fiscal year-to-date period ended September 27, 2025 are summarized as follows (in thousands):
12
CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
| Goodwill, at December 28, 2024 | $ | |||||||
| Accumulated goodwill impairment | ( | |||||||
| Goodwill, net at December 28, 2024 | ||||||||
| Foreign currency translation adjustment | ||||||||
| Goodwill, net at September 27, 2025 | $ | |||||||
Goodwill, net at September 27, 2025 is comprised of goodwill of $166.5 million and accumulated impairment of $71.9 million. There were no
Intangible assets that are separable from goodwill and have determinable useful lives are valued separately and amortized using the straight-line method over their expected useful lives. There were no
The components of acquired identifiable intangible assets are as follows (in thousands):
| September 27, 2025 | December 28, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Useful Life (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
5. Accrued Expenses
Accrued expenses consist of the following (in thousands):
| September 27, 2025 | December 28, 2024 | ||||||||||
| Compensation and related expenses | $ | $ | |||||||||
| Performance awards | |||||||||||
| Direct project accruals | |||||||||||
| Other | |||||||||||
| Total accrued expenses | $ | $ | |||||||||
As of September 27, 2025 and December 28, 2024, approximately $120.4 million and $144.2 million, respectively, of accrued bonuses were included above in “Compensation and related expenses.”
6. Income Taxes
For the fiscal quarters ended September 27, 2025 and September 28, 2024, CRA’s effective income tax rate (“ETR”) was 29.3 % and 28.7 %, respectively. The ETR for the third quarter of fiscal 2025 was higher than the third quarter of fiscal 2024 primarily due to a decreased benefit related to share-based compensation, a remeasurement of deferred tax assets related to changes in current-year state apportionment, and an increase to a prior year tax reserve. The increase was partially offset by the impact of state tax law changes effective for fiscal 2025.
13
CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
For the fiscal year-to-date periods ended September 27, 2025 and September 28, 2024, CRA's ETR was 28.3 % and 29.1 %, respectively. The ETR for the current fiscal year-to-date period was lower than the prior year-to-date period primarily due to the impact of state tax law changes effective for fiscal 2025, partially offset by the remeasurement of deferred tax assets related to changes in current-year state apportionment.
7. Net Income Per Share
CRA calculates basic earnings per share using the two-class method. CRA calculates diluted earnings per share using the more dilutive of either the two-class method or treasury stock method. The two-class method was more dilutive for the fiscal quarters and fiscal year-to-date periods ended September 27, 2025 and September 28, 2024.
Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all the net earnings for the period had been distributed. CRA's participating securities consist of unvested share-based payment awards that contain a nonforfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders. Net earnings allocable to these participating securities were not material for the fiscal quarters and fiscal year-to-date periods ended September 27, 2025 and September 28, 2024.
The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data):
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | |||||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | |||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Net income — basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Less: net income attributable to participating shares | ||||||||||||||||||||||||||
| Net income — diluted | $ | $ | $ | $ | ||||||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Weighted average shares outstanding — basic | $ | |||||||||||||||||||||||||
| Effect of dilutive stock options and restricted stock units | ||||||||||||||||||||||||||
| Weighted average shares outstanding — diluted | ||||||||||||||||||||||||||
| Net income per share: | ||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
There were no anti-dilutive share-based awards for the fiscal quarter period ended September 27, 2025. For the fiscal year-to-date period ended September 27, 2025, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding amounted to 1,283 shares. For the fiscal quarter and fiscal year-to-date period ended September 28, 2024, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average outstanding shares amounted to 4,900 and 1,225 shares, respectively.
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CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
8. Fair Value of Financial Instruments
As of September 27, 2025 and December 28, 2024, CRA did not have any financial instruments measured at fair value on a recurring basis.
CRA had no contingent consideration obligations during the fiscal quarter and fiscal year-to-date period ended September 27, 2025.
The contingent consideration liability pertained to estimated future contingent consideration payments related to the acquisition of bioStrategies Group, Inc. during fiscal 2022. The following table summarizes the changes in the contingent consideration liability for the fiscal year ended December 28, 2024 (in thousands):
| Fiscal Year Ended | ||||||||
| December 28, 2024 | ||||||||
| Beginning balance | $ | |||||||
| Remeasurement of acquisition-related contingent consideration | ( | |||||||
| Ending balance | $ | |||||||
9. Credit Agreement
CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides CRA with a $250.0 million revolving credit facility, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million. The revolving credit facility includes a $25.0 million sublimit for the issuance of letters of credit.
Under the Credit Agreement, CRA must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1 and a minimum consolidated interest coverage ratio of 2.5 to 1. The primary non-financial covenants include, but are not limited to, restrictions on CRA's ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including CRA's failure to pay principal, interest or fees, or upon the breach of any covenant. As of September 27, 2025, CRA was in compliance with the covenants of the Credit Agreement.
10. Commitments and Contingencies
As described in Note 9, CRA is party to standby letters of credit with its banks in support of minimum future lease payments under certain operating leases for office space.
CRA is subject to legal actions arising in the ordinary course of business. In management’s opinion, based on current knowledge, CRA believes it has adequate legal defenses or insurance coverage, or both, with respect to the eventuality of such actions. CRA does not believe any settlement or judgment relating to any pending legal action would materially affect its
15
CRA INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
financial position or results of operations. However, the outcome of such legal actions is inherently unpredictable and subject to inherent uncertainties.
11. Segment Reporting
CRA manages its business globally within one operating segment, professional and consulting services, in accordance with ASC Topic 280, Segment Reporting. The accounting policies of the professional and consulting services segment are the same as those described in Note 1 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, filed with the SEC on February 20, 2025.
The chief operating decision maker, which is our Chief Executive Officer, assesses performance for the professional and consulting services segment and decides how to allocate resources based on consolidated net income that is also reported in the condensed consolidated statements of operations as net income. The measure of segment assets is reported in the condensed consolidated balance sheets as total assets.
The following table represents consolidated net income reported by segment revenue, segment profit or loss, and significant segment expenses (in thousands):
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | ||||||||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||||||||
| Employee compensation and fringe benefit costs | |||||||||||||||||||||||||||||
| Forgivable loan amortization | |||||||||||||||||||||||||||||
| Client reimbursable expenses | |||||||||||||||||||||||||||||
Other segment expense (1) | |||||||||||||||||||||||||||||
| Provision for income taxes | |||||||||||||||||||||||||||||
| Segment net income | |||||||||||||||||||||||||||||
| Reconciliation of profit or loss | |||||||||||||||||||||||||||||
| Adjustments and reconciling items | |||||||||||||||||||||||||||||
| Consolidated net income | $ | $ | $ | $ | |||||||||||||||||||||||||
1 Other segment expenses included in segment net income includes, rent, commissions to non-employee experts, legal and professional services, software subscription and data services, travel and entertainment expenses, training and marketing expenses, other operating expenses, depreciation and amortization, interest expense, net, and foreign currency gains (losses), net. | |||||||||||||||||||||||||||||
12. Subsequent Events
On October 30, 2025, CRA announced that its Board of Directors declared a quarterly cash dividend of $0.57 per common share, payable on December 12, 2025 to shareholders of record as of November 25, 2025.
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
Except for historical facts, the statements in this quarterly report are forward-looking statements. Forward-looking statements are merely our current predictions of future events. These statements are inherently uncertain, and actual events could differ materially from our predictions. Important factors that could cause actual events to vary from our predictions include those discussed below under the heading “Risk Factors.” We assume no obligation to update our forward-looking statements to reflect new information or developments. We urge readers to review carefully the risk factors described in the other documents that we file with the SEC. You can read these documents at www.sec.gov.
Additional Available Information
Our principal Internet address is www.crai.com. Our website provides a link to a third-party website through which our annual, quarterly, and current reports, and amendments to those reports, are available free of charge. We do not maintain or provide any information directly to the third-party website, and we do not check its accuracy.
Critical Accounting Policies and Estimates
Our critical accounting policies involving the more significant estimates and judgments used in the preparation of our financial statements as of September 27, 2025 remain unchanged from December 28, 2024. Please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, filed with the SEC on February 20, 2025 for details on these critical accounting policies.
Recent Accounting Standards
There are no recent accounting standards that impact the unaudited condensed consolidated financial statements.
Results of Operations—For the Fiscal Quarter and Fiscal Year-to-Date Period Ended September 27, 2025, Compared to the Fiscal Quarter and Fiscal Year-to-Date Period Ended September 28, 2024
The following table provides operating information as a percentage of revenues for the periods indicated:
| Fiscal Quarter Ended | Fiscal Year-to-Date Period Ended | ||||||||||||||||||||||
| September 27, 2025 | September 28, 2024 | September 27, 2025 | September 28, 2024 | ||||||||||||||||||||
| Revenues | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
| Costs of services (exclusive of depreciation and amortization) | 70.7 | 68.7 | 68.6 | 70.3 | |||||||||||||||||||
| Selling, general and administrative expenses | 18.1 | 18.6 | 18.3 | 18.4 | |||||||||||||||||||
| Depreciation and amortization | 1.9 | 1.7 | 1.9 | 1.7 | |||||||||||||||||||
| Income from operations | 9.3 | 11.0 | 11.3 | 9.6 | |||||||||||||||||||
| Interest expense, net | (0.9) | (0.9) | (0.7) | (0.7) | |||||||||||||||||||
| Foreign currency gains (losses), net | 0.4 | (0.5) | (0.1) | (0.2) | |||||||||||||||||||
| Income before provision for income taxes | 8.7 | 9.6 | 10.5 | 8.7 | |||||||||||||||||||
| Provision for income taxes | 2.6 | 2.7 | 3.0 | 2.5 | |||||||||||||||||||
| Net income | 6.2 | % | 6.8 | % | 7.5 | % | 6.2 | % | |||||||||||||||
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Fiscal Quarter Ended September 27, 2025, Compared to the Fiscal Quarter Ended September 28, 2024
Revenues. Revenues increased by $18.2 million, or 10.8%, to $185.9 million for the third quarter of fiscal 2025 from $167.7 million for the third quarter of fiscal 2024. Utilization increased to 77% for the third quarter of fiscal 2025 from 76% for the third quarter of fiscal 2024, while consultant headcount decreased to 968 at the end of the third quarter of fiscal 2025 from 978 at the end of the third quarter of fiscal 2024.
Overall, revenues outside of the U.S. represented approximately 21% and 19% of net revenues for each of the third quarters of fiscal 2025 and fiscal 2024, respectively. Revenues derived from fixed-price projects decreased to 17% of net revenues for the third quarter of fiscal 2025 compared to 18% of net revenues for the third quarter of fiscal 2024. The percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.
Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $16.3 million, or 14.1%, to $131.5 million for the third quarter of fiscal 2025 from $115.2 million for the third quarter of fiscal 2024. The increase in costs of services was due to an increase in employee and incentive compensation of $11.8 million, an increase in forgivable loan amortization of $2.3 million, and an increase in client reimbursable indirect project expenses of $2.2 million. As a percentage of revenues, costs of services (exclusive of depreciation and amortization) increased to 70.7% for the third quarter of fiscal 2025 from 68.7% for the third quarter of fiscal 2024.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $2.4 million, or 7.7%, to $33.7 million for the third quarter of fiscal 2025 from $31.3 million for the third quarter of fiscal 2024. Within this category of expenses, there was a $1.2 million increase in legal and professional service fees, a $0.7 million increase in employee and incentive compensation, a $0.6 million increase in travel and entertainment, a $0.3 million increase in rent expense, a $0.2 million increase in miscellaneous and other fees, partially offset by a $0.6 million decrease in commissions to non-employee experts for the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024.
As a percentage of revenues, selling, general and administrative expenses decreased to 18.1% for the third quarter of fiscal 2025 from 18.6% for the third quarter of fiscal 2024. Commissions to our non-employee experts decreased to 1.8% of revenues for the third quarter of fiscal 2025 compared to 2.4% of revenues for the third quarter of fiscal 2024.
Provision for Income Taxes. The income tax provision was $4.8 million and the ETR was 29.3% for the third quarter of fiscal 2025 compared to $4.6 million and 28.7% for the third quarter of fiscal 2024. The ETR for the third quarter of fiscal 2025 was higher than the third quarter of fiscal 2024 primarily due to a decreased benefit related to share-based compensation, a remeasurement of deferred tax assets related to changes in current-year state apportionment, and an increase to a prior year tax reserve. The increase was partially offset by the impact of state tax law changes effective for fiscal 2025. The ETR for the third quarter of fiscal 2025 and 2024 were both higher than the combined federal and state statutory tax rate primarily due to nondeductible executive compensation and nondeductible meals and entertainment expenses, partially offset by the tax benefit related to share-based compensation and the Foreign-Derived Intangible Income (“FDII”) deduction.
Net Income. Net income remained relatively unchanged at $11.5 million for the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024. The net income per diluted share was $1.73 per share for the third quarter of fiscal 2025, compared to $1.67 of net income per diluted share for the third quarter of fiscal 2024. Weighted average diluted shares outstanding decreased by approximately 222,000 shares to approximately 6,621,000 shares for the third quarter of fiscal 2025 from approximately 6,843,000 shares for the third quarter of fiscal 2024. The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since September 28, 2024, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units since September 28, 2024.
Fiscal Year-to-Date Period Ended September 27, 2025, Compared to the Fiscal Year-to-Date Period Ended September 28, 2024
Revenues. Revenues increased by $43.6 million, or 8.5%, to $554.6 million for the fiscal year-to-date period ended September 27, 2025 from $511.0 million for the fiscal year-to-date period ended September 28, 2024. Utilization increased to 76% for the fiscal year-to-date period ended September 27, 2025 from 75% for the fiscal year-to-date period ended September 28, 2024, while consultant headcount decreased from 978 at the end of the third quarter of fiscal 2024 to 968 at the end of the third quarter of fiscal 2025.
18
Overall, revenues outside of the U.S. represented approximately 19% and 18% of net revenues for the fiscal year-to-date periods ended September 27, 2025 and September 28, 2024, respectively. Revenues derived from fixed-price projects decreased to 16% of net revenues for the fiscal year-to-date periods ended September 27, 2025 compared to 18% of net revenues for the third quarter of fiscal 2024. The percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.
Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $21.0 million, or 5.8%, to $380.4 million for the fiscal year-to-date period ended September 27, 2025 from $359.4 million for the fiscal year-to-date period ended September 28, 2024. The increase in costs of services was due to an increase of $22.5 million in employee compensation and fringe benefit costs, an increase of $5.4 million in client reimbursable indirect project expenses, partially offset by a decrease in forgivable loan amortization of $6.9 million. As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 68.6% for the fiscal year-to-date period ended September 27, 2025 from 70.3% for the fiscal year-to-date period ended September 28, 2024.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $7.5 million, or 8.0%, to $101.3 million for the fiscal year-to-date period ended September 27, 2025 from $93.8 million for the fiscal year-to-date period ended September 28, 2024. Within this category of expenses, there was a $2.8 million increase in legal and professional service fees, $1.4 million increase in rent expense, $1.2 million increase in employee compensation and fringe benefit costs, a $1.3 million increase in travel and entertainment expense, and a $0.8 million increase in miscellaneous and other fees for the fiscal year-to-date period ended September 27, 2025 as compared to the fiscal year-to-date period ended September 28, 2024.
As a percentage of revenues, selling, general and administrative expenses decreased to 18.3% for the fiscal year-to-date period ended September 27, 2025 from 18.4% for the fiscal year-to-date period ended September 28, 2024. Commissions to our non-employee experts decreased to 2.1% of revenues for the fiscal year-to-date period ended September 27, 2025 compared to 2.3% of revenues for the fiscal year-to-date period ended September 28, 2024.
Provision for Income Taxes. The income tax provision was $16.4 million and the ETR was 28.3% for the fiscal year-to-date period ended September 27, 2025, compared to $13.0 million and 29.1% for the fiscal year-to-date period ended September 28, 2024. The ETR for the fiscal year-to-date period ended September 27, 2025 was lower than the fiscal year-to-date period ended September 28, 2024 primarily due to the impact of state tax law changes effective for fiscal 2025, partially offset by the remeasurement of deferred tax assets and an increase to a prior year tax reserve, both noted above. The ETR for the current and prior fiscal year-to-date periods were both higher than the combined federal and state statutory tax rate primarily due to nondeductible executive compensation and nondeductible meals and entertainment expenses, partially offset by the tax benefit related to share-based compensation and the FDII deduction.
Net Income. Net income increased by $9.9 million to $41.6 million for the fiscal year-to-date period ended September 27, 2025 from $31.7 million for the fiscal year-to-date period ended September 28, 2024. The diluted net income per share was $6.16 for the fiscal year-to-date period ended September 27, 2025, compared to diluted net income per share of $4.57 for the fiscal year-to-date period ended September 28, 2024. Weighted average diluted shares outstanding decreased by approximately 177,000 shares to approximately 6,745,000 shares for the fiscal year-to-date period ended September 27, 2025 from approximately 6,922,000 shares for the fiscal year-to-date period ended September 28, 2024. The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since September 28, 2024, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units since September 28, 2024.
Liquidity and Capital Resources
Fiscal Year-to-Date Period Ended September 27, 2025
We believe that our current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As of September 27, 2025, we had $22.5 million of cash and cash equivalents and $101.1 million of borrowing capacity under our revolving credit facility.
General. During the fiscal year-to-date period ended September 27, 2025, cash and cash equivalents decreased by $4.2 million. We completed the period with cash and cash equivalents of $22.5 million. The principal drivers of the decrease of cash and cash equivalents were the payment of a significant portion of our fiscal 2024 performance bonuses in the first quarter of fiscal 2025, forgivable loan advances, repurchase of shares, and the payment of dividends, offset by net borrowings of $95.0 million.
19
At September 27, 2025, $2.5 million of our cash and cash equivalents was held within the U.S. We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility to fund U.S. operations for the next 12 months without the need to repatriate funds from our foreign subsidiaries.
Sources and Uses of Cash. During the fiscal year-to-date period ended September 27, 2025, net cash used in operating activities was $37.6 million. Net income was $41.6 million for the fiscal year-to-date period ended September 27, 2025. Uses of cash for operating activities included an increase in forgivable loans for the period of $45.8 million which was primarily driven by $68.4 million of forgivable loan issuances, net of repayments, offset by $22.6 million of forgivable loan amortization, a decrease in accounts payable, accrued expenses, and other liabilities of $35.6 million, primarily due to the payment of a significant portion of our fiscal 2024 performance bonuses, an increase of $32.8 million in unbilled receivables, and a $14.2 million decrease in lease liabilities. Partially offsetting these uses of cash was a decrease of $12.6 million in accounts receivable, an increase of $8.9 million in incentive cash awards payable, and a $1.6 million decrease in prepaid expenses, other current assets, and other assets.
Non-cash items included right-of-use amortization of $11.6 million, depreciation and amortization expense of $10.4 million, and share-based compensation expenses of $3.9 million, and unrealized foreign currency remeasurement losses, net of $0.3 million.
During the fiscal year-to-date period ended September 27, 2025, net cash used in investing activities was $2.8 million, which consisted of capital expenditures, primarily related to computer equipment.
During the fiscal year-to-date period ended September 27, 2025, net cash provided by financing activities was $34.9 million, primarily as a result of net borrowings under the revolving credit facility of $95.0 million. Offsetting this increase in cash provided by financing activities were repurchases of common stock of $47.1 million, payment of cash dividends and dividend equivalents of $10.1 million, and tax withholding payments reimbursed by restricted shares on vesting of $2.9 million.
Lease Commitments
We are a lessee under certain operating leases for office space and equipment. Certain of our operating leases have terms that impose asset retirement obligations due to office modifications or the periodic redecoration of the premises, which are included in deferred compensation and other non-current liabilities on our condensed consolidated balance sheets and are recorded at a value based on their estimated discounted cash flows. At September 27, 2025, we expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months of $0.2 million. The remainder of our asset retirement obligations and redecoration obligations are approximately $3.0 million and are expected to be paid between fiscal year 2026 and fiscal year 2035 when the underlying leases terminate or when the respective lease agreement requires redecoration. We expect to satisfy these lease and related obligations as they become due from cash generated from operations.
Indebtedness
CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides CRA with a $250.0 million revolving credit facility, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million. The revolving credit facility includes a $25.0 million sublimit for the issuance of letters of credit.
We may use the proceeds of the revolving credit loans under the Credit Agreement for general corporate purposes and may repay any borrowings under the revolving credit facility at any time, but any borrowings must be repaid no later than August 19, 2027. Borrowings under the revolving credit facility bear interest at a rate per annum equal to one of the following rates, at our election, plus an applicable margin as described below: (i) in the case of borrowings in U.S. dollars by us, the Base Rate (as defined in the Credit Agreement), (ii) in the case of borrowings in U.S. dollars, a rate based on Term SOFR (as defined in the Credit Agreement) for the applicable interest period, (iii) in the case of borrowings in Euros, EURIBOR (as defined in the Credit Agreement) for the applicable interest period, (iv) in the case of borrowings in Pounds Sterling, a daily rate based on SONIA (as defined in the Credit Agreement), (v) in the case of borrowings in Canadian Dollars, Term CORRA (as defined in the Credit Agreement) for the applicable interest period, (vi) in the case of borrowings in Swiss Francs, a daily rate based on SARON (as defined in the Credit Agreement), or (vii) in the case of borrowings in any other Alternate Currency (as defined in the Credit Agreement), the relevant daily or term rate determined as provided in the Credit Agreement. The applicable margin on borrowings based on the Base Rate varies within a range of 0.25% to 1.00% depending on our consolidated net leverage
20
ratio, and the applicable margin on borrowings based on any of the other rates described above varies within a range of 1.25% to 2.00% depending on our consolidated net leverage ratio.
We are required to pay a fee on the amount available to be drawn under any letter of credit issued under the revolving credit facility at a rate per annum that varies between 1.25% and 2.00% depending on our consolidated net leverage ratio. In addition, we are required to pay a fee on the unused portion of the revolving credit facility at a rate per annum that varies between 0.175% and 0.250% depending on our consolidated net leverage ratio.
Under the Credit Agreement, we must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1 and a minimum consolidated interest coverage ratio of 2.5 to 1. The primary non-financial covenants include, but are not limited to, restrictions on our ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including our failure to pay principal, interest or fees, or upon the breach of any covenant. As of September 27, 2025, we were in compliance with the covenants of the Credit Agreement.
There was $95.0 million in borrowings outstanding under the revolving credit facility as of September 27, 2025 and no borrowings outstanding as of December 28, 2024. As of September 27, 2025, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $3.9 million.
Forgivable Loans
In order to attract and retain highly skilled professionals, we may issue forgivable loans or term loans to employees and non-employee experts. A portion of these loans is collateralized by key person life insurance. The forgivable loans have terms that are generally between two and eight years. The principal amount of forgivable loans and accrued interest is forgiven by us over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with us and complies with certain contractual requirements. The forgiveness of the principal amount of the loans is recorded as compensation over the service period, which is consistent with the term of the loans.
Compensation Arrangements
We have entered into compensation arrangements for the payment of performance awards to certain of our employees and non-employee experts that are payable if specific performance targets are met. The financial targets may include a measure of revenue generation, profitability, or both. The amounts of the awards to be paid under these compensation arrangements could fluctuate depending on future performance during the applicable measurement periods. Changes in the estimated awards are expensed prospectively over the remaining service period. We believe that we will have sufficient funds to satisfy any cash obligations related to the performance awards. We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings available on our revolving credit facility.
Our Amended and Restated 2006 Equity Incentive Plan, as amended (the "2006 Equity Plan"), authorizes the grant of a variety of incentive and performance equity awards to our directors, employees and non-employee experts, including stock options, shares of restricted stock, restricted stock units, and other equity awards.
Our long-term incentive program, (the “LTIP”) is used as a framework for equity grants made under our 2006 Equity Plan to our senior corporate leaders, practice leaders, and key revenue generators. The equity awards granted under the LTIP include stock options, time-vesting restricted stock units, and performance-vesting restricted stock units.
Our LTIP allows us to grant service and performance-based cash awards in lieu of, or in addition to, equity awards to our senior corporate leaders, practice leaders, and key revenue generators. The compensation committee of our Board of Directors is responsible for approving all cash and equity awards under the LTIP. We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings available under our revolving credit facility.
Business and Talent Acquisitions
As part of our business, we regularly evaluate opportunities to acquire other consulting firms, practices or groups, or other businesses. In recent years, we have typically paid for acquisitions with cash, or a combination of cash and our common stock, and we may continue to do so in the future. To pay for an acquisition, we may use cash on hand, cash generated from our operations, borrowings available under our revolving credit facility, or we may pursue other forms of financing. Our ability to secure short-term and long-term debt or equity financing in the future, including our ability to refinance our credit agreement,
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will depend on several factors, including our future profitability, the levels of our debt and equity, restrictions under our existing revolving credit facility with our bank, and the overall credit and equity market environments.
Share Repurchases
In February 2025, we announced that our Board of Directors authorized an expansion of our existing share repurchase program of an additional $45.0 million of our common stock to the $13.1 million then remaining under the program. The program has no expiration date. We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.
During the fiscal quarter and the fiscal year-to-date period ended September 27, 2025, we repurchased and retired 21,532 and 252,205, respectively, under our share repurchase program at an average price per share of $185.74 and $186.95, respectively. During the fiscal quarter ended September 28, 2024, we did not repurchase any shares under our share repurchase program. For the fiscal year-to-date period ended September 28, 2024, we repurchased and retired 206,379 shares under our share repurchase program at an average price per share $161.59. We had approximately $10.9 million available for future repurchases under our share repurchase program as of September 27, 2025. We plan to finance future repurchases with available cash, cash from future operations, and borrowings available under our revolving credit facility. We expect to continue to repurchase shares under our share repurchase program.
Dividends to Shareholders
We anticipate paying regular quarterly dividends each year. These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings available under our revolving credit facility. Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors. During the fiscal quarter and fiscal year-to-date period ended September 27, 2025, we paid dividends and dividend equivalents of $3.2 million and $10.1 million, respectively. During the fiscal quarter and fiscal year-to-date period ended September 28, 2024, we paid dividends and dividend equivalents of $2.9 million and $8.9 million, respectively.
Impact of Inflation
To date, inflation has not had a material impact on our financial results. There can be no assurance, however, that inflation will not adversely affect our financial results in the future.
Future Capital and Liquidity Needs
We anticipate that our future capital and liquidity needs will principally consist of funds required for:
•operating and general corporate expenses relating to the operation of our business, including the compensation of our employees under various annual bonus or long-term incentive compensation programs;
•the hiring of individuals to replenish and expand our employee base;
•capital expenditures, primarily for information technology equipment, office furniture and leasehold improvements;
•debt service and repayments, including interest payments on borrowings from our revolving credit facility;
•share repurchases under programs that we may have in effect from time to time;
•dividends to shareholders;
•potential acquisitions of businesses that would allow us to diversify or expand our service offerings;
•contingent obligations related to our acquisitions; and
•other known future contractual obligations.
The hiring of individuals to replenish and expand our employee base is an essential part of our business operations and has historically been funded principally from operations. Many of the other above activities are discretionary in nature. For example, capital expenditures can be deferred, acquisitions can be forgone, and share repurchases and regular dividends can be
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suspended. As such, our operating model provides flexibility with respect to the deployment of cash flow from operations. Given this flexibility, we believe that our cash flows from operations, supplemented by cash on hand and borrowings under our revolving credit facility (as necessary), will provide adequate cash to fund our long-term cash needs from normal operations for at least the next twelve months.
Our conclusion that we will be able to fund our cash requirements by using existing capital resources and cash generated from operations does not take into account the impact of any future acquisition transactions or any unexpected significant changes in the number of employees or other expenditures that are currently not contemplated. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if economic conditions change from those currently prevailing or from those now anticipated, or if other unexpected circumstances arise that have a material effect on the cash flow or profitability of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding needs in excess of the identified currently available sources and could require us to raise additional debt or equity funding to meet those needs on terms that may be less favorable compared to our current sources of capital. Our ability to raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:
•our future profitability;
•the quality of our accounts receivable;
•our relative levels of debt and equity;
•the volatility and overall condition of the capital markets; and
•the market prices of our securities.
Factors Affecting Future Performance
Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this report, as well as a description of material risks we face, are set forth below under the heading “Risk Factors” and included in Part I, Item 1A, “Risk Factors” of our 2024 Form 10-K. If any of these risks, or any risks not presently known to us or that we currently believe are not significant, develops into an actual event, then our business, financial condition, and results of operations could be adversely affected.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our exposure to market risk during the fiscal quarter ended September 27, 2025. For information regarding our exposure to certain market risks, see Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk” of our 2024 Form 10-K.
ITEM 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. This is done in order to ensure that information we are required to disclose in the reports that are filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 27, 2025.
Management has concluded that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material aspects, our financial position at the end of, and the results of operations and cash flows for, the periods presented in conformity with U.S. GAAP.
Evaluation of Changes in Internal Control over Financial Reporting
Under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer, we evaluated whether there were any changes in our internal control over financial reporting during the third quarter of fiscal 2025. There were no changes in our internal control over financial reporting
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identified in connection with the above evaluation that occurred during the third quarter of fiscal 2025 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
Important Considerations
The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 1A. Risk Factors
There are many risks and uncertainties that can affect our future business, financial performance or results of operations. In addition to the other information set forth in this report, please review and consider the information regarding certain factors that could materially affect our business, financial condition or future results set forth under Part I, Item 1A, “Risk Factors” in our fiscal 2024 Form 10-K. There have been no material changes to these risk factors during the fiscal quarter ended September 27, 2025.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a)Not applicable.
(b)Not applicable.
(c)The following provides information about our repurchases of shares of our common stock during the fiscal quarter ended September 27, 2025. During that period, we did not act in concert with any affiliate or any other person to acquire any of our common stock and, accordingly, we do not believe that purchases by any such affiliate or other person (if any) are reportable in the following table. For purposes of this table, we have divided the fiscal quarter into three periods of four weeks, four weeks, and five weeks, respectively, to coincide with our reporting periods during the third quarter of fiscal 2025.
Issuer Purchases of Equity Securities
| Period | (a) Total Number of Shares Purchased(1) | (b) Average Price Paid per Share(1) | (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1) | ||||||||||||||||||||||
| June 29, 2025 to July 26, 2025 | 299 | (2) | $ | 177.01 | (2) | — | $ | 14,938,272 | ||||||||||||||||||
| July 27, 2025 to August 23, 2025 | 21,532 | $ | 185.74 | 21,532 | $ | 10,938,899 | ||||||||||||||||||||
| August 24, 2025 to September 27, 2025 | — | $ | — | — | $ | 10,938,899 | ||||||||||||||||||||
| Total | 21,831 | $ | 181.38 | 21,532 | ||||||||||||||||||||||
_______________________________
(1)On February 20, 2025, we announced that our Board of Directors authorized an expansion of our existing share repurchase program of an additional $45.0 million of our common stock to the $13.1 million then remaining under the program. The program has no expiration date. We may repurchase shares under this program in open market purchases (including
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through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.
(2)Consists of shares of common stock we accepted as a tax withholding from certain of our employees in connection with the vesting of shares of restricted stock units that occurred during the indicated period pursuant to the terms of our 2006 Equity Plan.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Mine Safety Disclosures
None.
ITEM 5. Other Information
During the fiscal quarter ended September 27, 2025, no director or officer of the Company adopted terminated
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ITEM 6. Exhibits
| Item No. | Filed with this Form 10-Q | Description | ||||||||||||
| 3.1 | ||||||||||||||
| 3.2 | ||||||||||||||
| 10.1* | ||||||||||||||
| 10.2* | ||||||||||||||
| 31.1 | X | |||||||||||||
| 31.2 | X | |||||||||||||
| 32.1 | X | |||||||||||||
| 32.2 | X | |||||||||||||
| 101 | X | The following financial statements from CRA International, Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2025, formatted in Inline XBRL (eXtensible Business Reporting Language), as follows: (i) Condensed Consolidated Statements of Operations (unaudited) for the fiscal quarters ended September 27, 2025 and September 28, 2024, (ii) Condensed Consolidated Statements of Comprehensive Income (unaudited) for the fiscal quarters ended September 27, 2025 and September 28, 2024, (iii) Condensed Consolidated Balance Sheets (unaudited) at September 27, 2025 and December 28, 2024, (iv) Condensed Consolidated Statements of Cash Flows (unaudited) for the fiscal quarters ended September 27, 2025 and September 28, 2024, (v) Condensed Consolidated Statement of Shareholders’ Equity (unaudited) for the fiscal quarter ended September 27, 2025 and September 28, 2024, and (vi) Notes to Condensed Consolidated Financial Statements (Unaudited). | ||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||||||||
| * Management contract or compensatory plan, contract or arrangement. | ||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CRA INTERNATIONAL, INC. | ||||||||
| Date: October 30, 2025 | By: | /s/ PAUL A. MALEH | ||||||
| Paul A. Maleh | ||||||||
| President and Chief Executive Officer | ||||||||
| Date: October 30, 2025 | By: | /s/ ERIC NIERENBERG | ||||||
| Eric Nierenberg | ||||||||
| Executive Vice President, Chief Financial Officer and Treasurer | ||||||||
| Date: October 30, 2025 | By: | /s/ SANDRA A. DAVID | ||||||
| Sandra A. David | ||||||||
| Vice President, Chief Accounting Officer and Controller | ||||||||
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