Good day and welcome to the Exponent in First Quarter 2026 Earnings Conference Call. All participants will be in the listen-only mode. Should you listen during the conference call, please signal an operator by pressing the star key followed by zero. After your presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then 1 on your touchtone phone. To video your question, you may press star and then 2. Please note this event is being recorded. I would now like to turn the conference over to Joni Concentello. Please go ahead.

Thank you, Operator. Good afternoon, ladies and gentlemen. Thank you for joining us on Exponent's first quarter 2026 Financial Results Conference Call. Please note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website at investors.exponent.com. This conference call is the property of Exponent and any taping or other reproduction is expressly prohibited without prior written consent. Joining me on the call today are Dr. Catherine Corrigan, President and Chief Executive Officer, Rich Schlenker, Executive Vice President and Chief Financial Officer, John Pye, Incoming President, and Eric Anderson, Incoming Chief Financial Officer. Before we start, I would like to remind you that the following discussion contains forward-looking statements including but not limited to Exponent's market opportunities and future financial results that involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in Exponent's periodic SEC filings including those factors discussed under the caption risk factor in Exponent's most recent Form 10-K. The forward looking statements and risks in this conference call are based on current expectations as of today and Exponent assumes no obligation to update or revise them whether as a result of new developments or otherwise. And now I will turn the call over to Dr. Catherine Corrigan, Chief Executive Officer. Catherine?

Thank you, Joni, and thank you everyone for joining us today. I will start off by reviewing our first quarter 2026 business performance and strategic positioning. Rich will then provide a more detailed review of our financial results and outlook, and we will then open the call for questions. Exponent delivered double-digit revenue growth, growth in net revenues and earnings in the first quarter, reflecting the strength of our multidisciplinary portfolio and continued demand for our specialized expertise across a range of industries. Growth was driven by user research studies for consumer electronics clients who are integrating artificial intelligence into their devices. We are continuing to see diversification of this work, not only across our client base, but also across the breadth of products and underlying technologies we support. Growth was also driven by risk management work for utility clients, evaluating asset performance under extreme weather conditions. Reactive engagements also contributed to our growth with increased dispute-related and failure analysis demand across construction projects, energy facilities, and medical devices. We saw increased activity from both domestic and international clients related to complex construction challenges and disputes. In energy, demand increased for work involving critical facilities where reliability, performance, and the consequences of failure are paramount. We also saw increased activity involving medical devices with particular scrutiny of product safety, quality, and performance. Trends in energy demand, infrastructure risk, and technological innovation continue to support demand for our deep technical capabilities, reinforcing Exponent's essential role in helping clients navigate complex, high-stakes decisions. The integration of AI and other advanced technologies into performance-critical and physical systems combined with the rising expectations for safety and reliability is increasing reliance on exponents' specialized expertise, both proactively and in response to failures. This is evident across a wide range of applications, from automated vehicles that must interpret complex, real-world environments to avoid collisions, to health-related devices, such as automated insulin delivery systems, where performance directly affects patient safety, to utility systems using AI to anticipate asset risk and prevent wildfires and other high-consequence hazards. Engagements like these underscore the growing sophistication and interconnectedness of modern technologies as they move from concept to market. As a result, clients rely on Exponent to evaluate failure modes, product performance, usability, and risk as they work to develop and deploy these systems quickly and responsibly. In these contexts, the question is no longer simply whether a system functions, but whether it can be trusted to perform reliably in high-stakes, real-world conditions, raising the bar for performance across not just expected conditions, but also in edge cases, novel conditions, and complex interactions that fall outside of prior experience. As clients accelerate development timelines, they increasingly rely on Exponent not only for the systems themselves, but also for the underlying data testing and evaluation strategies that support them. This includes assessing training data and potential bias, evaluating system performance in both laboratory and in the wild environments, and supporting the reliability of adjacent infrastructure such as battery energy storage systems and data centers. Across these efforts, the common threads are rising technical complexity and the increasing consequences of failure. This is where exponents stands apart. Our teams combine expertise in engineering, data science, human factors, health, and the physical sciences to help clients navigate challenges that do not fit neatly within a single discipline. As these technologies continue to evolve, we expect demand for exponents' independent, multidisciplinary expertise to continue to grow. I'll now turn the call over to Rich to provide more detail on our first quarter results, as well as discuss our outlook for the second quarter and the full year.

Thank you, Kathryn, and good afternoon, everyone. Let me start by saying all comparisons will be on a year-over-year basis unless otherwise noted. For the first quarter of 2026, total revenues increased 14% to $166.3 million. And revenues before reimbursements, or net revenues, as I will refer to them from here on, increased 10% to $151.8 million, as compared to the same period in 2025. Net income for the first quarter increased 11% to $29.6 million, as compared to $26.7 million a year ago. and earnings per diluted share increased 13% to $0.59 as compared to $0.52 in the prior year period. During the quarter, we realized a negative tax impact associated with accounting for share-based awards of $900,000 as compared to $500,000 in the first quarter of 2025. The change in the tax impact associated with share-based awards was due to the difference of the value of the common stock between the grant date and the release date for the restricted stock units. Inclusive of the tax impact from share-based awards, exponents consolidated tax rate was 30.2% in the first quarter of 2026, as compared to 29.4% for the same period in 2025. EBITDA for the quarter increased 15% to $43.1 million, producing a margin of 28.4% of net revenues, as compared to $37.5 million, or 27.3% of net revenues in the first quarter of 2025. Billable hours in the quarter were approximately $399,000, an increase of 6% year-over-year. Average technical full-time equivalent employees in the quarter were $1,013, which is an increase of 5% as compared to one year ago. This increase was due to our recruiting and retention efforts. Utilization in the first quarter was 76%, up from 75% in the same period of 2025. The realized rate increase was approximately 4% as compared to the same period a year ago. In the first quarter, compensation expense, after adjusting for gains and losses and deferred compensation increased 9%. Included in total compensation expense is a loss in deferred compensation of $1.1 million as compared to a loss of $9.3 million in the same period of 2025. As a reminder, gains and losses in deferred compensation are offset in miscellaneous income and have no impact on the bottom line stock-based compensation expense in the quarter was nine point one million dollars as compared to eight point two million in the prior year period other operating expenses in the quarter were up six percent to twelve point eight million dollars due to an investments in our corporate infrastructure included in other operating expenses is depreciation and amortization expense of $2.5 million. G&A expenses increased 24% to $6.2 million for the first quarter. The increase in G&A expenses was primarily due to increases in travel and meals associated with business development, recruiting, and people development activities. Interest income decreased to $1.7 million for the first quarter, driven by a decrease in cash and lower interest rates. Regarding capital allocation, during the quarter, capital expenditures were $2.5 million. We distributed $16.6 million to shareholders through dividend payments and repurchased $79 million of common stock and an average price of $68.09. Additionally, our board approved a $50 million increase in our current stock repurchase program. This is in addition to the $17.7 million available for repurchases as of April 3rd, 2026, and reflects our conviction in Exponent's long-term growth trajectory. Turning to our segments, exponents engineering and other scientific segment represented 85% of revenues before reimbursements in the first quarter. Revenues before reimbursements in this segment increased 12% in the quarter. Growth during the quarter was driven by user research studies in consumer electronics and risk management in the utilities sector, along with reactive engagements in energy and life science sectors. Exponents environmental and health segment represented 15% of revenues before reimbursements in the first quarter. Revenies before reimbursements in this segment increased 2% for the first quarter. Growth in this segment was driven primarily by regulatory consulting in the chemicals industry. Turning to our outlook, for the second quarter, as compared to one year prior, we expect revenues before reimbursements to grow in the high single digits and EBITDA to be 27 to 27.8% of revenues before reimbursements. For fiscal year 2026, we are maintaining our revenue and margin guidance. We expect revenues before reimbursements to grow in the high single digits, and EBITDA to be 27.6% to 28.1% of revenues before reimbursements. We expect our average technical full-time equivalent employees to increase approximately 5% year-over-year in the second quarter of 2026, and 4% to 5% for the full year 2026 as compared to 2025. We expect utilization in the second quarter to be 72% to 73% as compared to 72% in the same quarter last year. We continue to expect the full year utilization to be 72.5% to 73% as compared to 72.5% in 2025. We expect year-over-year realized rate increase to be 3% to 3.5% for the second quarter and full year. For the second quarter of 2026, we expect stock-based compensation to be $6.5 to $6.7 million. For the full year, 2026, we expect stock-based compensation to be $27.9 to $28.4 million. We continue to believe that our stock-based compensation program effectively attracts, motivates, and retains our top talent. For the second quarter, we expect other operating expenses to be $12.8 to $13.3 million. For the full year we expect other operating expenses to be 53 to 53 and a half million dollars for the second quarter we expect GNA expenses to be 7.2 to 7.7 million dollars for the full year we expect GNA expenses to be 28.5 to 29.5 million dollars we expect interest income to be 700,000 to 900,000 per quarter during 2026. In addition, we anticipate miscellaneous income to be approximately $300,000 per quarter for the remainder of 2026. For the remainder of 2026, we do not expect any additional tax benefit or loss associated with share-based awards. For the second quarter of 2026, we expect our tax rate to be approximately 28% as compared to 27.9% in the same quarter one year ago. For the full year, 2026, the tax rate is expected to be 28.5% as compared to 28.0% in 2025. Capital expenditures for the full year, 2026, are expected to be $12 to $14 million. dollars. In closing, we are pleased with our performance this quarter and remain confident in the strength of our business. I will now turn the call back to Catherine for closing remarks.

Thank you, Rich. Exponent is well positioned to support the evolving needs of our clients as innovation accelerates and systems grow more complex, and particularly as artificial intelligence becomes more deeply embedded in the physical world. These trends continue to drive demand for our differentiated multidisciplinary expertise, independent evaluation, and trusted insight. Altogether, supported by our exceptional talent and unique position in the marketplace, we remain focused on helping clients navigate their most complex challenges while delivering long-term value for our shareholders. Before opening the call for questions. I'd like to introduce our incoming president, John Pye, and our incoming chief financial officer, Eric Anderson. John Pye will assume the role of president effective tomorrow, May 1st. A 25-year veteran of the firm, John has played a central role in advancing our capabilities and innovation agenda, helping Exponent address increasingly complex client challenges as technologies evolve and systems become more sophisticated. John?

Thank you, Katherine. As a first-timer here, let me start by saying how honored and excited I am to step into this role, particularly at such a time of broad opportunity for the firm. Looking across the markets we serve, there is accelerating innovation, there is increasing technical complexity, and there are expectations that are only rising around safety, around health, and around the environment, So much so that I can't imagine a better time to be an engineer or a scientist, and I can't imagine a better place to do that than here with my exponent colleagues. When our clients call us with their most challenging issues, they get our deep technical credibility, they get our multidisciplinary approach, and we put those together to help them navigate the challenges of emerging technologies and complex systems of systems, all while staying grounded in delivering real-world impact. I'm excited to work with my partners on this call, Catherine, Rich, and you, Eric, as well as our entire leadership team in continuing to advance our capabilities and supporting the firm's long-term growth.

Thank you, John. Eric Anderson will assume the role of Chief Financial Officer, also effective tomorrow May 1st. Eric combines rigorous financial discipline with a deep understanding of our strategy and operations. Before I turn to Eric, however, I want to take a moment to thank Rich for his many, many years of outstanding leadership as Chief Financial Officer. Rich will continue to play an important role as Executive Vice President, advancing Exponent's strategic priorities while remaining actively engaged with investors. We are grateful for his continued leadership and support. With that, I will now turn the call to Eric. Eric.

Thank you, Catherine. I'm honored to step into this role as Exponent's Chief Financial Officer and excited about the opportunity to work alongside our leadership team. I have been a part of this incredible company for over 20 years as part of the finance organization, working closely with our consulting teams. I look forward to continuing to support Exponent's long-term growth objectives, strong operating model, and disciplined execution. I'm also excited to engage more with the investment community as we move forward.

Thank you, Eric. Operator, we are now ready for questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star and one on your touchstone telephone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. At this time, we will pause momentarily to assemble a roster. We have the first question line of Tomo Sano from J.P. Morgan. Please go ahead.

Hi, everyone. Hi, Tomo. Thank you for taking my questions. I would like to ask you about the macro trends such as accelerations of AI innovation, rising energy demand impacting the nature of your project, client-based and competitive positioning. Compared to the traditional engagements, Are you seeing changes in the required expertise of the complexity of projects in Q1? And could you talk about any more color for the second quarter and after, please?

Yeah, sure. Thank you, Tomo. The macro trends you mentioned really are driving growth of the business in a number of different dimensions. You mentioned the energy sector. this is one place where we are seeing our engagements evolve across really really all modalities of technology from the traditional oil and gas issues that we see through to wind power to solar power even starting to look at things like small modular nuclear reactors so you can imagine the different kinds of risk models, proactive as well as reactive work, and the expertise that's required for that type of work. We're also seeing that play into our data center offerings. These are places where the innovation around the cooling systems, so this is with regard to, say, our thermal scientists, the kinds of issues we're seeing around corrosion, and so this is on the material side and the metallurgy side the connecting to power and the governance and specifications around that so you know AI is fundamentally that driver that is pushing on energy and we are seeing both reactive as well as as well as proactive projects you know another place where there's a real opportunity for more highly even more highly specialized expertises in robotics and And this is actually a place where it would be wonderful to hear from John as he is someone who has been active in growing our robotics efforts across military and across other clients. So John, why don't you say a few things about that opportunity to specialize around robotics?

Yeah, thanks, Catherine, and good to hear from you again, Tomo. So robotics have been around a long time. but what's interesting and novel now is the physical AI is getting applied to the robotic systems and those robotic systems aren't just in the factories on our assembly lines but they're in and amongst the people interacting with them in our warehouses in our homes and you know maybe the biggest category are automated vehicles that are on our streets and so there's opportunity there for a number of our disciplines. Catherine mentioned many of them. You have our human factor side where the robots are interacting with the people and the understanding of their intent and where they are. You have our biomechanics that gets pulled in as the interaction becomes physical. You have our data sciences as they are interpreting the world around them and trying to make decisions. So it really pulls on the entire organization across the entire stack that Catherine mentioned from the power that drives the data center, that runs the algorithm, that powers the robotic system. So couldn't be more excited for what's happening there as those opportunities come our way.

Thank you. And just one more, and then congratulations, everyone, for new opportunities and role. And this transition to new president and CFO, along with the changes to the board, appears to make an important new chapter for exponents. So could you elaborate on why now it's the right time for this leadership and governance refresh? And what is the significance of this timing? And how do you see the position in the company for future growth and transformation, please?

Yeah, thank you, Tomo. The timing really is strategic here with regard to how we are evolving the leadership team because we see the macro trends that you mentioned in your first question, right? The increases in the penetration of artificial intelligence into physical systems, right, which is really where Exponent lives, those physical systems that are high performance, high reliability, high risk, high consequence. And so the opportunity that we see around these systems from sort of cradle to grave, You know, the proactive in terms of building the data sets to train them, to the hardware that delivers them, to the consequences of them being in the wild. There's enormous opportunity. And so this evolution of leadership really reflects that in order to accelerate, you know, what the company is doing. We've been, you know, we've been demonstrating our ability to execute and capitalize on those opportunities for the last few quarters. And, you know, we intend to, you know, sort of continue building that. And like you said, we've got to build the talent base around that. We need to continue to widen our competitive moat and our differentiation. And with both John and Eric's deep experience with the company, John on the technical and on the innovation side, Eric on the financial side, and of course with Rich continuing and becoming even more engaged on the governance side, I think this is going to position us extremely well to capitalize on all of these trends that we're talking about.

Thank you very much. Thank you. We have our next question from the line of Andrew Nicholas from William Blair. Please go ahead.

Hi, good afternoon. I appreciate you taking my question, and congratulations to everyone on the call on their new roles. I wanted to touch on, Catherine, your comment on consumer electronics specifically. I think you mentioned seeing kind of diversification or a broadening of some of that demand across client types and products. Could you spend a little bit more time fleshing that out? And then, if possible, we'd love to hear what that broadening does to your conviction in continued growth in that part of your business.

Yeah, yeah. Thanks, Andrew. So, yeah, there are a few sort of broad categories of products that we're seeing the diversification across. I mean, one is health-related products. This is a really important category that has been an important part of the growth that we're seeing in this kind of user research, human machine interaction type of engagement where there are algorithms that need to be benchmarked against ground truth. There are questions we're being asked by clients who want to deploy these technologies and this hardware, maybe in their clinical trials of a new device or a new drug, and they are looking to us for advice, for independent, objective advice on, you know, what are the best platforms and how can we be sure that what the device is telling us is in fact, you know, a quality in the data. And of course, you have all of the human-machine interaction aspects of that. So that's an important category. I think another important category is devices that are sort of taking on novel form factors for the delivery of artificial intelligence. So it's no longer just your phone or your tablet. You're talking about glasses. You're talking about virtual reality, augmented reality systems. You're talking about unique hardware that doesn't have screens but still needs to have that quality interaction with the human, whether that's through video, whether that's through audio, and so forth. And so these may not be health related, but they are devices that are novel, and that need to be performing, and need to ensure that the training data sets are going to really drive the algorithm in the right way. And so, and then all of the hardware, you know, another category of this is all the hardware associated with, if you think of it as the data center stack, right? There is everything from the chip to the rack all the way up to the full system that is going to be, you know, it's essential in that life cycle of the AI in order to be able to deliver that. And we're all seeing the, you know, the demand on the compute that the hyperscalers and others are facing, the power requirements. So, you know, these are all the things that kind of underlie the diversification that we're talking about, and we believe we'll continue to diversify. You know, there is a push around innovation, that speed of innovation to get, you know, that next feature, that next technology, and that speed of innovation in addition to all of the safety and health and risk implications are the things that really make that perfect for Exponent.

Thank you. That's super, super helpful. For my follow-up, I wanted to ask about the talent environment. Obviously, decent or quite good headcount growth year over year in the quarter, expectation for that to continue throughout the remainder of this year. Is it any harder in this environment to attract talent given kind of this Venn diagram between what you're doing and what maybe a lot of the fastest-growing companies in the world are also focused on with artificial intelligence. And I think part of the reason for the question is I think you raised the amount of share-based compensation you expect to pay this year, so I'm wondering if there's any through line between those two themes.

Yeah, thanks for the question there, Andrew. Look, I think we are, it has always been a highly competitive market to come into top universities and pursue the top quartile, if not the, at times we want to even think the top 10% of that PhD class that's there. So we've always found that that talent has many opportunities, and it remains competitive. But I think that Exponent, as Catherine and John have outlined here, we are coming at this in this multidisciplinary approach. It isn't about we can write a better algorithm than you. We are not competing with our clients at their core thing. What we are helping them do is understand that human interaction, understand that compute that is necessary to have that perform at the highest level, and all the consequences that go around that that are there. So that allows us to be very active in recruiting all these adjacencies. We absolutely need to understand the algorithms. The question of why did the car make the decision to not stop or to turn left instead of right and all those things come down to analyzing the sensors and the software and doing all that. And we can play in that area, but it's not about writing the best code that's out there. It's about analysis and such. So it will remain competitive. We think we're doing very well. Our acceptance rate on offers is as high as it's ever been. And that's been going on over the last year or two. So we're feeling good about when we want somebody, the opportunity for those people to lean in to Exponent and such. So I think from that standpoint, it's good. We are always replenishing what we've got here. We're bringing in 150 to 200 new people a year. That's bringing in the new talent that has been out doing research in the next advanced areas. And the great thing is they are using the newest tools in that activity as well. So they are coming in having experimented with and used AI, machine learning and other things in their discipline of the way they are applying it. And those things are important for us in staying on top of our game and moving forward. So we're feeling pretty good about our ability to attract talent and be able to move forward.

Great. Thanks, Rich. Thank you. Participants, if you wish to ask a question, you may press star and 1. We have a next question from the line of Josh Jan from UBS. Please go ahead.

Hi, good afternoon, and congrats to everybody on their new roles as well. So I guess on the consumer market improvement, could you talk about sort of the durability of these projects? Because I think in the past, consumer has been a bit more cyclical. And I'm just wondering about the pace of improvement here and the durability of this growth tailwind from consumer.

Yeah. Look, we've seen definitely a gradual step up in the level of activity. We anticipated that early last year in 2025. If you remember, even in Q1 or Q2, we were talking about where our clients were beginning to develop their projects, where they were talking to us about their roadmap that really played out as anticipated in the beginning in the late third quarter and into the fourth quarter. That momentum and those developments have continued here into the first quarter and are continuing on into the second quarter and beyond. You know, look, what each client and where they are in the product lifecycle, there will be some cycles through that. We went through an extreme of that back in 2023. We don't see that as we look out across the clients in front of us. I can't predict what every quarter is going to be and where there might be a slight step down and then an acceleration forward. But everything directionally over time is driving to the implementation of these algorithms and these AI into physical systems. And as they go there, what we are all, what we exponent seeing and acting upon and what we're all reading about is those systems then require a much higher reliability. They need a much stronger curated data set. They need to be tested against gold standards. Those are all the things that our clients are doing today, and they are continuing that development into the future, and the applications they go after will be more sophisticated in the future. You know, we saw this, you know, five, six years ago. You know, you were in, or ten years ago, fingerprints and the facial recognition, and then beginning to have some applications, and then into AR and VR. Then we started moving into health applications as the clients gained more confidence and thought they could tackle things that were in the regulated world. So we think that the direction of things are very positive for the long term, and especially as these integrate themselves into the robotic world of automated vehicles and humanoids in your home and in the retail environment you interact with and everything where humans are playing.

That's good to hear. Thanks for the call there, Rich. And then on the repurchase side of things, could you just talk about the decision to repurchase that amount in Q1, you know, what that means and kind of your willingness to continue to be aggressive on buybacks around the similar levels?

Yeah. So, look, we have always had a philosophy and conviction around really being willing to let some of that cash build up and, you know, have sort of an incremental amount we repurchase every year, but then be more aggressive on pullbacks. As the results speak for, we believe that the company has a very strong future and is producing a very strong profitability and cash flow. And we think that's going to result in good future performance. And as such, on this pullback, really what you look back is over the last four quarters, or 12 months, the company had bought back $177 million of stock, almost 5% of our shares during that 12-month period of time. And we're feeling pretty good about that with where we sit today. And that's why the board has given us additional authorization as we move forward.

That makes sense. Thanks for the color, and thank you for the time.

You're welcome.

Thank you. We have our next question from the line of Toby Sommer from Trust. Please go ahead.

Thank you. I was wondering if you could update us on the portfolio of larger projects that the firm has and whether when you reflect upon prior substantial projects that were, you know, points of discussion over time, whether anything about AI or changes in the marketplace would change the scope of large projects going forward.

Yeah, maybe I can start off on a little bit of reflection and then I hand over to Catherine or John as they talk about how AI can increase the complexity of projects and the amount of data that you're handling. But, you know, as we, you know, Exponent, you know, has a very diverse portfolio of projects, always ongoing. You know, we do about 10,000 projects a year. We talk about about 20% of those make up 80% of our revenues is a really traditional model. We have had the large projects typically for us are something that ranges in the 1% to 2% of revenues, is a very large project in there. And at times, we've had a few projects where the size of them had gotten up into the 4% or 5% of revenues and we had called those projects out when they had risen to that level. Those included the unintended accelerations issues for Toyota back in the early 2010s, PG&E's gas line explosion in San Bruno and the work that followed that, followed by the campfire and the analysis around the wildfires that we did for PG&E and such. But as we've moved forward, you know, we've got large pieces of work, but none that elevate themselves to that level. but the portfolio is continuing to diversify and clearly the multidisciplinary nature of our firm is continuing to grow.

Yeah, and I can tack on here on the question of AI and the products and how does that sort of change the scope of the engagements. And we are definitely seeing evolution of that. I mean, one example I think of is in the automotive product liability world. This is our dispute-related work where, you know, that's moving from, you know, 10 or 20 years ago, it was a question about the airbag deploying and was that, you know, timely and did that protect the occupant and you had a sort of narrow set of issues. But with the complexity of the product now where you have an AI algorithm making a decision about whether to put the brakes on or whether to have a steering input, these are complex algorithm choices that are being made. So having to go back and sort of trace that decision in the algorithm and the testing that goes along with that when you're looking at different scenarios or perhaps comparing to other products. This becomes a much more complex matrix of tests. When maybe you used to have to run one test, now you're running five tests or ten tests because you've got to run through a number of different scenarios with these different systems. We're also seeing, another place you see it is in our intellectual property matters. The complexity of products when they contain those AI algorithms, whether it's wireless communications equipment, whether it's a surgical robotics system, when you're looking in depth in detail at those technologies, that complexity drives not only the expertise level that you need, but it drives the complexity of the claims that need to be analyzed and the research that needs to be done in order to figure these things out. So look, as Rich said, we always have a diversity of sizes of projects, But those are at least a few examples to give you some flavor for how the incorporation of AI into the physical world is increasing the complexity and therefore scope of the things that we're doing.

Thanks. And if I could ask you to comment on two industry verticals for you. One is chemicals. What's the current and forecasted state of demand there? And then also the energy and utility sector, which based on data center demand and other demand, seems to need to come to market with more supply, perhaps at a pace that the industry is unadjusted to. and dovetail nuclear being involved again. What's the future of the energy and utility outlook from Exponent's perspective?

Yeah, so let me start with chemicals. And this is a place where we have both reactive as well as proactive work. If you think of the proactive side of that, this is a lot of regulatory type of work. And what we're seeing in the regulatory frameworks is that they continue to become more complex. And in fact, are relying more and more heavily on complex simulation technologies in lieu of animal testing, for example. So there's a trend over time. And so, you know, being able to utilize effectively these high-end sophisticated models is a place where we are well positioned to capitalize as those, you know, those technologies, for example, messenger RNA technology, and pesticides and other complex environments for the regulatory side, think of chemicals like PFAS, where there's increasing complexity around the regulatory environment. So we're absolutely seeing the growth opportunities there. The PFAS world, too, is driving dispute-related work, whether that is related to the OEM chemical manufacturers or the entities that are using PFAS in their products, consumer products, electronics, the drive to find substitutes for those chemicals that really do perform so well. So we see a lot of growth, continuing growth opportunity there. On the energy and utility side, you said it well, Toby, the drive for more energy and really hitting the, You know, we're sort of pegged at the levels of energy that we can create. And there is such an intense drive to push that such that we can run the data centers, we can get the compute. And so, I mean, we're seeing data center operators who are building their own gas-powered turbines so that they can get the power themselves and they don't have to tap into the utility. So this drives, you know, first of all, it drives the disputes As those infrastructure investments are being made, we're seeing challenges with the backup power systems in terms of battery energy storage. We are super well positioned to capture that. The nuclear side. And so this is going to drive disputes. It also is driving more inquiries about proactive risk modeling from the utility side. You know, novel sources of power generation create unanticipated failure modes, and so we are helping our clients try to understand those and trying to quantify those risks. So in both of these areas, both chemicals as well as energy and utilities, we're seeing those growth opportunities on both the proactive and reactive engagements.

Thank you very much.

You're welcome.

Thank you. Ladies and gentlemen, that concludes the question and answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.