CRAI Q2 Earnings Beat on Broad-Based Growth, Revenue View Raised

Charles River Associates CRAI reported second-quarter 2026 adjusted earnings of $2.16 per share, up 14.9% year over year, beating the Zacks Consensus Estimate of $2.12 by 1.9%. Revenues rose 12.8% to $210.8 million and beat the consensus mark of $198.3 million by 6.3%.

Broad-based demand supported the quarter, with eight practices growing year over year and six posting double-digit gains. Utilization improved to 77% from 76% a year ago, while quarter-end consultant headcount increased 3.3% to 968.

CRAI’s Q2 Results in Detail

Costs of services increased 15.7% year over year to $148.7 million and represented 70.6% of revenues, up from 68.8% in the prior-year quarter. Forgivable loan amortization, including performance award amortization, rose to $14.9 million from $10.2 million. Share-based compensation expense increased to $2.4 million from $1 million.

Selling, general and administrative expenses edged up 0.5% to $35.3 million. As a percentage of revenues, SG&A improved to 16.7% from 18.8%. Excluding commissions to non-employee experts, SG&A represented 15.5% of revenues compared with 16.3% a year ago.

Charles River’s Practice Mix Strengthens

Legal & Regulatory offerings grew revenues 10.1% year over year, while Management Consulting services advanced 25.5%. Energy, Finance, Forensic Services, Intellectual Property, Life Sciences, and Risk, Investigations & Analytics each delivered double-digit revenue growth.

The Antitrust & Competition Economics practice set a new quarterly revenue high. Geographically, North American operations grew 8.7%, while international operations increased 32.9%. CRA said continued momentum and demand for its services drove the record quarterly revenue performance.

CRAI’s Operating Profitability Improves

Operating income increased 19.3% year over year to $23.5 million, while operating margin expanded to 11.2% from 10.6%. Depreciation and amortization declined to $3.3 million from $3.5 million, or 1.6% of revenues compared with 1.9%.

Non-GAAP EBITDA rose 15.3% to $26.8 million, with the margin improving to 12.7% from 12.4%. Non-GAAP net income increased 9% to $13.9 million, though its margin eased to 6.6% from 6.8%. Net interest expense increased to $3 million from $1.8 million.

Charles River’s Cash Flow and Working Capital

CRA used $4.4 million of cash in operating activities during the quarter versus $5.9 million generated a year earlier. After adjusting for forgivable loan advances and repayments, adjusted net cash flows from operations were $13.8 million compared with $19.4 million in the prior-year quarter.

Cash and cash equivalents ended the quarter at $21.4 million. Billed and unbilled receivables were $271.7 million, and total days sales outstanding increased to 113 days from 110. Borrowings under the revolving credit facility stood at $219 million.

CRAI Raises Fiscal 2026 Revenue Guidance

Management raised its fiscal 2026 revenue outlook to $805-$820 million on a constant-currency basis from the previous $785-$805 million range. The midpoint increased to $812.5 million from $795 million after CRA generated $408.8 million of constant-currency revenues through the first half.

CRAI reaffirmed its non-GAAP EBITDA margin outlook of 12-13%. Management expects the constant-currency adjustment to reduce reported annual revenues by approximately $2.5 million and reported annual EBITDA by less than $250,000. It also expects fiscal 2026 non-cash forgivable loan amortization to increase by roughly $15 million.

Charles River Returns Capital and Expands Credit

The company returned $31.4 million to shareholders in the quarter, including $27.8 million used to repurchase approximately 193,000 shares at an average price of $144 and $3.6 million in dividend payments. CRA also declared a quarterly dividend of 57 cents per share, payable Sept. 14, 2026.

CRA announced a refinancing that increases and extends its credit facility for five years. The facility totals up to $400 million, comprising a $75 million term loan and a $325 million revolving credit facility. The revolver includes a seasonal option to reduce the facility by $75 million during periods of lower working-capital demand.

Currently, CRAI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Earnings Snapshots

Trane Technologies TT reported impressive second-quarter 2026 results. TT’s adjusted earnings of $4.31 per share outpaced the consensus mark by 0.9% and rose 11.1% from the year-ago quarter’s actual. TT’s total revenues of $6.35 billion surpassed the consensus mark by 2.9% and increased 6.4% year over year.

Rollins ROL posted unimpressive second-quarter 2026 results. ROL’s adjusted earnings of 32 cents per share missed the Zacks Consensus Estimate by 5.9% but rose 6.7% year over year. Total revenues of $1.08 billion fell short of the consensus estimate by 1.7% but increased 7.9% from the year-ago quarter.

Verisk VRSK reported second-quarter 2026 diluted adjusted earnings of $1.98 per share, beating the Zacks Consensus Estimate of $1.94 by 2.1%. The figure increased 5.3% from the year-ago quarter. Revenues of $806.3 million topped the consensus mark of $802.4 million by 0.5% and rose 4.3% year over year.

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