CRA International Inc reported record quarterly revenue of $210.8 million for Q2FY26, marking a 12.8% year-over-year increase. The professional services firm achieved its highest second-quarter profits in history, driven by strong demand across legal, regulatory, and management consulting practices.

Non-GAAP EBITDA grew 15.3% year-over-year, while non-GAAP net income rose 9% and earnings per diluted share increased 14.9%. The performance reflects broad-based growth, with eight practices representing 95% of total revenue posting year-over-year gains. International operations were a standout performer, with revenue expanding 32.9% compared to the prior year period.

Sector Performance Highlights

The company’s Antitrust & Competition Economics practice posted a record sixth consecutive quarter, capitalizing on robust global M&A activity. Worldwide M&A volume reached $2.85 trillion in the first half of 2026, a 50% increase over the previous year. Additionally, the Forensic Services and Risk, Investigations and Analytics practices both grew more than 20% year-over-year.

Management consulting segments also delivered significant expansion. The Energy and Life Sciences practices each exceeded 20% year-over-year revenue growth. The Energy practice benefited from complex utility strategies and data center load forecasting engagements, while Life Sciences saw strength in pricing, market access, and litigation support.

Guidance and Capital Allocation

Citing a healthy sales pipeline and supportive market conditions, management raised the annual revenue guidance for FY26 to $805 million to $820 million, up from the previous range of $785 million to $805 million. The non-GAAP EBITDA margin guidance was reaffirmed at 12.0% to 13.0% on a constant currency basis.

During the quarter, the company returned $31.4 million to shareholders through dividends and share repurchases. Specifically, $3.6 million was paid in dividends, and $27.8 million was used to repurchase approximately 193,000 shares at an average price of $144 per share. Year-to-date, the firm has repurchased 309,000 shares for $49.3 million.

What the Numbers Show

A divergence between top-line acceleration and margin pressure is evident when analyzing talent costs against profitability metrics. While revenue grew 12.8%, non-GAAP EBITDA grew faster at 15.3%, indicating operating leverage. However, this leverage exists despite a significant headwind: non-cash forgivable loan amortization, an expense included in EBITDA calculations, is expected to increase by approximately $15 million in FY26 due to investments in senior talent. This suggests that underlying operational efficiency improvements are substantial enough to offset rising fixed compensation costs associated with hiring nearly 30 new vice presidents in 2025.

Balance Sheet and Liquidity

The company concluded the quarter with $21.4 million in cash and $219 million in borrowings under its revolving credit facility, resulting in net debt of $197.6 million. Total liquidity stood at $98.7 million. To support future growth, CRA expanded its credit facility to $400 million, consisting of a $75 million term loan and a $325 million revolving line, replacing the facility that was set to mature in August 2027.

Days Sales Outstanding (DSO) increased to 113 days at the end of Q2FY26, up from 100 days at the end of Q1FY26. This rise includes 68 days of billed receivables and 45 days of unbilled work-in-progress, reflecting the timing of project billings typical for the second quarter.