FTI Consulting reported revenue of $3.489 billion for 2023, marking a 15.2% increase compared with revenue of $3.029 billion in 2022. According to the company, the increase in revenue was due to higher demand across all its business segments.
The company also reported it achieved net income of $274.9 million in 2023 compared to $235.5 million in the 2022. The increase in net income was primarily due to higher revenue, which was partially offset by higher compensation, a 17.2% increase in selling, general and administrative (SG&A) expenses and higher income taxes compared to 2022. The company’s adjusted EBITDA in 2023 of $424.8 million, or 12.2% of revenue, compared to $357.6 million, or 11.8% of revenue, in 2022.
FTI Consulting’s full-year 2023 earnings per diluted share of $7.71 compared to $6.58 in 2022, although its results in 2022 included an $8.3 million special charge related to severance and other employee-related costs, which reduced EPS by $0.19. The company’s full year 2023 adjusted EPS of $7.71 compared to adjusted EPS of $6.77 in 2022.
“In 2023, we continued our sustained, multi-year growth trajectory and once again delivered record revenues and earnings,” Steven H. Gunby, president and CEO of FTI Consulting, said. “These results reflect our continued ability to win in the two markets that matter most: the market for making a difference for clients and the market for great talent. That progress leaves me ever more confident about the future of our firm.”
Cash Position and Capital Allocation
FTI Consulting reported that net cash provided by operating activities of $224.5 million for the year ended Dec. 31, 2023, compared to $188.8 million for the year ended Dec. 31, 2022. According to the company, the year-over-year increase in net cash provided by operating activities was primarily due to higher cash collections resulting from increased revenue. The increase was partially offset by higher compensation expenses, primarily related to headcount growth, an increase in other operating expenses and higher use of working capital required for growth.
FTI Consulting’s cash and cash equivalents and short-term investments of $328.7 million at Dec. 31, 2023, compared to $491.7 million at Dec. 31, 2022, and $225.6 million at Sept. 30, 2023. Total debt, net of cash and short-term investments, of $328.7 million at Dec. 31, 2023, compared to $175.5 million at Dec. 31, 2022, and $59.4 million at Sept. 30, 2023. The sequential decrease in total debt, net of cash and short-term investments, was primarily due to an increase in cash provided by operating activities, according to the company.
There were no share repurchases during the quarter ended December 31, 2023. In full year 2023, the Company repurchased 112,139 shares of its common stock at an average price per share of $158.70 for a total cost of $17.8 million. As of December 31, 2023, approximately $460.7 million remained available for common stock repurchases under the Company’s stock repurchase program.
Q4/23 Results
FTI Consulting achieved Q4/23 revenues of $924.7 million, which increased 19.4% compared to revenue of $774.4 million in Q4/22. According to the company, the increase in revenue was due to higher demand across all business segments.
In addition, FTI Consulting reported that net income of $81.6 million in Q4/23 compared to $47.5 million in Q4/22. The increase in net income was primarily due to higher revenue, which was partially offset by higher compensation and SG&A expenses compared to the prior year quarter. Adjusted EBITDA of $127.4 million, or 13.8% of revenue, in Q4/23 compared to $92 million, or 11.9% of revenue, in the prior year quarter.
Q4/23 EPS of $2.28 compared to $1.33 in the prior year quarter. Q4/22 EPS included the aforementioned $8.3 million special charge, which decreased EPS by $0.19. Q4/23 adjusted EPS of $2.28 compared to adjusted EPS of $1.52 in the prior year quarter.
Q4/23 Corporate Finance & Restructuring Results
Revenue in FTI Consulting’s corporate finance and restructuring segment increased 19.7% to $365.6 million in Q4/23 compared to $305.3 million in the prior year quarter. According to the company, the increase in revenue was primarily due to higher demand for business transformation and strategy and restructuring services. Adjusted Segment EBITDA of $65.4 million, or 17.9% of segment revenue, in Q4/23 compared to $49.1 million, or 16.1% of segment revenue, in the prior year quarter. The increase in adjusted segment EBITDA was primarily due to higher revenue, which was partially offset by higher compensation, which includes the impact of a 5.5% increase in billable headcount and higher contractor costs, as well as an increase in SG&A expenses compared to the prior year quarter.
2024 Guidance
FTI Consulting estimates that revenue for full year 2024 will range between $3.650 billion and $3.790 billion. The company estimates that EPS for full year 2024 will range between $7.75 and $8.50. The company does not currently expect adjusted EPS to differ from EPS.
