CRAI Q1 Earnings Call: Broad-Based Growth, Robust Antitrust Demand, and Steady Guidance

Economic consulting firm CRA International (NASDAQ: CRAI) reported Q1 CY2025 results beating Wall Street’s revenue expectations, with sales up 5.9% year on year to $181.9 million. The company’s full-year revenue guidance of $725 million at the midpoint came in 0.9% above analysts’ estimates. Its non-GAAP profit of $2.22 per share was 13.8% above analysts’ consensus estimates.

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StockStory’s Take

CRA International’s first quarter results were shaped by broad-based contributions across key practices and geographies. Management attributed revenue growth to double-digit expansion in its Energy, Finance, Intellectual Property, and Life Sciences practices, with the Antitrust & Competition Economics group achieving a new revenue high. CEO Paul Maleh highlighted the acceleration of project lead flow through the quarter, noting that consulting utilization improved and that performance was supported by international operations, which saw nearly 20% year-on-year growth.

Looking ahead, management reaffirmed its full-year revenue guidance, citing continued momentum in new business origination and a replenished sales pipeline. Maleh cautioned that while March’s positive trends continued into April, it remains too early to assume these trends will persist throughout the year, given ongoing macroeconomic and geopolitical uncertainty. He added that CRA remains focused on optimizing its service portfolio and aligning headcount growth with revenue opportunities.

Key Insights from Management’s Remarks

CRA International’s management pointed to multiple factors driving Q1 performance, emphasizing practice diversification, geographic expansion, and a steady demand environment. The company’s results exceeded analysts’ expectations, aided by improved consulting utilization and project origination.

• Antitrust practice momentum: The Antitrust & Competition Economics group reached record quarterly revenue, fueled by ongoing demand for merger-related and antitrust advisory work, including high-profile projects such as supporting Microsoft in regulatory matters.
• International growth contributions: International operations delivered nearly 20% year-on-year revenue growth, with management citing a balanced portfolio across North America and global markets as key to consistent performance.
• Collaborative client delivery: Management highlighted increased collaboration across practices and geographies, enabling the firm to address complex, multi-jurisdictional projects involving litigation, M&A, and regulatory compliance.
• Life Sciences and Energy strength: The Life Sciences practice extended its turnaround, posting another strong quarter across opportunity assessment and launch planning, while Energy consulting saw double-digit revenue gains through projects in strategy, risk, and transaction support.
• Service portfolio optimization: The company completed targeted restructuring affecting 15 roles, intended to align resources with areas of higher growth potential. Management emphasized ongoing investment in talent acquisition and retention to support future expansion.

Drivers of Future Performance

Management’s outlook for the remainder of the year centers on sustained demand for legal, regulatory, and management consulting services, tempered by an awareness of economic and geopolitical uncertainties that could affect client activity.

• Sales pipeline health: Continued growth in project lead flow and new project originations underpins management’s confidence in meeting guidance, though they acknowledge that business inflow can be sensitive to shifts in client sentiment.
• Practice diversification: The company’s broad mix of practices—spanning antitrust, finance, energy, and life sciences—positions it to capture growth across multiple sectors, reducing reliance on any single client or industry vertical.
• Headcount and talent alignment: Ongoing investments in hiring and talent retention are expected to keep consultant headcount roughly in line with revenue growth, supporting utilization rates and client delivery capabilities.

Top Analyst Questions

• Andrew Nicholas (William Blair): Asked how recent April trends influence confidence in guidance; CEO Maleh said March’s momentum continued but noted it is too early to assume these trends will persist.
• Andrew Nicholas (William Blair): Queried about the Life Sciences pipeline; Maleh stated the practice is seeing broad success geographically and across service areas, hoping for continued momentum.
• Andrew Nicholas (William Blair): Sought clarification on headcount plans and retention; Maleh explained that headcount remains flat sequentially, with ongoing investments in both new hires and retaining talent.
• Marc Riddick (Sidoti & Company): Asked if recent business acceleration was tied to external events; Maleh said no single driver was identifiable, attributing growth to a diversified portfolio.
• Kevin Steinke (Barrington Research): Inquired about restructuring; Maleh clarified the move was a targeted optimization, not a reflection of overall practice health.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) whether growth in project origination and sales pipeline leads to consistent revenue expansion, (2) if utilization rates remain elevated as consultant headcount adjusts to business needs, and (3) further momentum within high-performing practices such as Antitrust & Competition Economics, Energy, and Life Sciences. Talent acquisition and retention efforts, as well as the firm’s ability to adapt to external market conditions, will remain important areas of focus.

CRA currently trades at a forward P/E ratio of 23.3×. At this valuation, is it a buy or sell post earnings? The answer lies in our free research report.

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