FTI CONSULTING, INC

Previous wording

The following is a discussion and analysis of our consolidated financial condition, results of operations, and liquidity and capital resources for the three and nine months ended September 30, 2024 and 2023, and significant factors that could affect our prospective financial condition and results of operations. This discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes and with our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”). In addition to historical information, the following discussion includes forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations and intentions. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, these expectations or any of the forward-looking statements could prove to be incorrect, and actual results could differ materially from those projected or assumed in the forward-looking statements.

Current wording

The following is a discussion and analysis of our consolidated financial condition, results of operations, and liquidity and capital resources for the three months ended March 31, 2025 and 2024, and significant factors that could affect our prospective financial condition and results of operations. This discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes and with our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”). In addition to historical information, the following discussion includes forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations and intentions. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, these expectations or any of the forward-looking statements could prove to be incorrect, and actual results could differ materially from those projected or assumed in the forward-looking statements.

Previous wording

Our Corporate Finance & Restructuring (“Corporate Finance”)segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, governments and other financing sources and creditor groups, as well as other parties-in-interest. We deliver a wide range of services centered around four core offerings: Business Transformation, Strategy, Transactions and Turnaround & Restructuring.

Current wording

Our Corporate Finance & Restructuring (“Corporate Finance”)segment focuses on the strategic, operational, financial, transactional and capital needs of our clients around the world. Our clients include companies, boards of directors, investors, private equity sponsors, lenders, and other financing sources and creditor groups, as well as other parties-in-interest and governments. We deliver a wide range of services centered around three core offerings: Transactions, Transformation & Strategy and Turnaround & Restructuring.

Previous wording

Our Forensic and Litigation Consulting (“FLC”) segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services across risk and investigations and disputes, supported by our data & analytics technology-enabled solutions, with a focus on highly regulated industries. Our services are centered around five core offerings: Construction, Projects & Assets and Environmental Solutions, Data & Analytics, Disputes, Healthcare Risk Management & Advisory, and Risk and Investigations.

Current wording

Our Forensic and Litigation Consulting (“FLC”) segment provides law firms, companies, boards of directors, government entities, private equity firms and other interested parties with a multidisciplinary and independent range of services across risk & investigations and disputes, supported by our data & analytics technology-enabled solutions, with a focus on highly regulated industries. Our services are centered around five core offerings: Construction, Projects & Assets and Environmental Solutions, Data & Analytics, Disputes, Healthcare Risk Management & Advisory and Risk and Investigations.

Previous wording

Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk management consulting services. Our professionals help organizations better address risk as the growing volume and variety of enterprise and emerging data intersects with legal, regulatory and compliance needs. We deliver a wide range of expert and analytics-powered solutions driven by investigations, litigation, antitrust and competition, merger & acquisition (“M&A”), restructuring and compliance and risk through three core offerings: Corporate Legal Department Consulting, E-discovery Services and Expertise, and Information Governance, Privacy & Security Services.

Current wording

Our Technology segment provides companies, law firms, private equity firms and government entities with a comprehensive global portfolio of digital insights and risk management consulting and data services. Our professionals help organizations better address risk as the growing volume and variety of enterprise and emerging data intersects with legal, regulatory and compliance needs. We deliver a wide range of expert and analytics-powered solutions driven by investigations, litigation, antitrust and competition, mergers & acquisitions (“M&A”), restructuring and compliance and risk through three core offerings: Corporate Legal Department Consulting, E-discovery and Analytics Services and Expertise, and Information Governance, Privacy & Security Services.

Previous wording

Our contract arrangements may also contain success fees or performance-based arrangements in which our fees are based on the attainment of contractually defined objectives with our client. This type of success fee may supplement a time and expense or fixed-fee arrangement. Success fee revenues may cause variations in our revenues and operating results due to the timing of when achieving the performance-based criteria becomes probable. Seasonal factors, such as the timing of our employees’ and clients’ vacations and holidays, may impact the timing of our revenues across our segments.

Current wording

Our contract arrangements may also contain success fees or performance-based arrangements in which our fees are based on the attainment of contractually defined objectives with our client. This type of success fee may supplement a time and expense or fixed-fee arrangement. Success fees and other contractual terms may cause variations in our revenues and operating results due to the timing of when achieving the performance-based criteria becomes probable. Seasonal factors, such as the timing of our employees’ and clients’ vacations and holidays, may impact the timing of our revenue recognition across our segments.

Previous wording

•the utilization rates of the revenue-generating professionals we employ;

Current wording

•the utilization rates of the billable professionals we employ;

Previous wording

We have included the definitions of Segment Operating Income and Adjusted Segment EBITDA, which are GAAP financial measures, below in order to more fully define the components of certain non-GAAP financial measures in the accompanying analysis of financial information. As described in Note 13, “Segment Reporting” in Part I, Item 1, of this

Current wording

We have included the definition of Segment Operating Income, which is a GAAP financial measure, below in order to more fully define the components of certain non-GAAP financial measures in the accompanying analysis of financial information.

Previous wording

We define Segment Operating Income as a segment’s share of consolidated operating income. We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment’s share of consolidated operating income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash.

Current wording

We define Segment Operating Income as a segment’s share of consolidated operating income. We define Total Segment Operating Income, which is a non-GAAP financial measure, as the total of Segment Operating Income for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA, which is a non-GAAP financial measure. We define Adjusted Segment EBITDA as Segment Operating Income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects core operating performance and provides an indicator of the segment’s ability to generate cash. We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses.

Previous wording

We define Total Adjusted Segment EBITDA, which is a non-GAAP financial measure, as the total of Adjusted Segment EBITDA for all segments, which excludes unallocated corporate expenses. We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business and losses on early extinguishment of debt. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies. We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.

Current wording

We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business and losses on early extinguishment of debt. We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that these non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with useful supplemental information.

Previous wording

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income and earnings per diluted share (“EPS”), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, the gain or loss on sale of a business and losses on early extinguishment of debt. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with an additional understanding of our business operating results, including underlying trends.

Current wording

We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income and earnings per diluted share (“EPS”), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, the gain or loss on sale of a business and losses on early extinguishment of debt. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with useful supplemental information on our business operating results, including underlying trends.

Previous wording

We define Free Cash Flow, which is a non-GAAP financial measure, as net cash used in operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company’s ability to generate cash for ongoing business operations and other capital deployment.

Current wording

We define Free Cash Flow, which is a non-GAAP financial measure, as net cash used in operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with useful supplemental information on the Company’s ability to generate cash for ongoing business operations and capital deployment.

Previous wording

Net income for the three months ended September 30, 2024 decreased $16.9 million, or 20.2%, to $66.5 million, compared to the three months ended September 30, 2023. The decrease in net income was primarily due to an increase in direct compensation and selling, general and administrative (“SG&A”) expenses and an FX remeasurement loss compared to a gain in the same quarter in the prior year, which was partially offset by higher revenues.

Current wording

Net income for the three months ended March 31, 2025 decreased $18.1 million, or 22.7%, compared to the three months ended March 31, 2024. The decrease in net income was primarily due to lower revenues and special charges recorded during the three months ended March 31, 2025, which was partially offset by a decrease in selling, general and administrative (“SG&A”) expenses, primarily due to legal settlement gains, and a decrease in direct cost of revenues as compared to the same quarter in the prior year.

Previous wording

Adjusted EBITDA for the three months ended September 30, 2024 decreased $15.8 million, or 13.3%, to $102.9 million, compared to the three months ended September 30, 2023. Adjusted EBITDA Margin of 11.1% for the three months ended September 30, 2024 compared to 13.3% for the three months ended September 30, 2023. The decrease in Adjusted EBITDA was primarily due to an increase in direct compensation and SG&A expenses, which was partially offset by higher revenues.

Current wording

Adjusted EBITDA for the three months ended March 31, 2025 increased $4.1 million, or 3.7%, compared to the three months ended March 31, 2024. Adjusted EBITDA Margin of 12.8% for the three months ended March 31, 2025 compared to 12.0% for the three months ended March 31, 2024. The increase in Adjusted EBITDA was primarily due to lower SG&A expenses, primarily due to legal settlement gains, as well as lower direct cost of revenues, which more than offset the decline in revenues compared to the same quarter in the prior year. Adjusted EBITDA excludes special charges.

Previous wording

EPS for the three months ended September 30, 2024 decreased $0.49 to $1.85 compared to $2.34 for the three months ended September 30, 2023. The decrease in EPS was primarily due to lower net income as described above.

Current wording

EPS for the three months ended March 31, 2025 decreased $0.49 to $1.74 compared to $2.23 for the three months ended March 31, 2024. The decrease in EPS was primarily due to lower net income as described above.

Previous wording

Netcash provided by operating activities for the three months ended September 30, 2024 increased $112.7 million, or 105.6%, to $219.4 million, compared to the three months ended September 30, 2023. The increase in net cash provided by operating activities was primarily due toan increase in cash collections. Days sales outstanding (“DSO”) of 108 days at September 30, 2024 compared to 114 days at September 30, 2023. The decrease in DSO was primarily due to cash collections that outpaced the increase in revenues.

Current wording

Netcash used in operating activities for the three months ended March 31, 2025 increased $190.4 million, or 69.3%, to $465.2 million compared to $274.8 million for the three months ended March 31, 2024. The increase in net cash used in operating activities was primarily due to an increase in forgivable loan issuances, higher variable compensation and a decrease in cash collections. Days sales outstanding (“DSO”) of 100 days at March 31, 2025 compared to 105 days at March 31, 2024.

Previous wording

Free Cash Flow for the three months ended September 30, 2024 increased $119.9 million, or 129.6%, to $212.3 million, compared to the three months ended September 30, 2023. The increase was primarily due to higher net cash provided by operating activities, as described above, and a decrease in net cash used for purchases of property and equipment.

Current wording

Free Cash Flow was an outflow of $483.0 million and $279.5 million for the three months ended March 31, 2025 and 2024, respectively. The decrease in Free Cash Flow was primarily due to higher net cash used in operating activities, as described above, and higher net cash used for purchases of property and equipment.

Previous wording

The following table includes the net headcount additions (reductions) by segment and in total for the nine months ended September 30, 2024.

Current wording

The following table includes the net headcount reductions by segment and in total for the three months ended March 31, 2025. The net reductions include involuntary terminations related to special charges and voluntary terminations in our Economic Consulting segment:

Previous wording

Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow:

Current wording

Reconciliation of Net Cash Used in Operating Activities to Free Cash Flow:

Previous wording

Our income tax provision decreased $2.1 million, or 8.5%, to $22.3 million for the three months ended September 30, 2024 compared to $24.4 million for the three months ended September 30, 2023. Our effective tax rate of 25.1% for the three months ended September 30, 2024 compared to 22.6% for the three months ended September 30, 2023. The decrease in the income tax provision was primarily due to a decrease in income before income tax provision, which was partially offset by a higher tax rate related to an unfavorable tax return adjustment as compared to the prior year income tax provision.

Current wording

Our income tax provision decreased $0.8 million, or 4.0%, to $18.8 million for the three months ended March 31, 2025 compared to $19.5 million for the three months ended March 31, 2024. Our effective tax rate of 23.3% for the three months ended March 31, 2025 compared to 19.6% for the three months ended March 31, 2024. The decrease in the income tax provision was due to a decrease in income before income tax provision, which was partially offset by an increase in the tax rate.

Previous wording

Our income tax provision decreased $1.5 million, or 2.4%, to $60.6 million for the nine months ended September 30, 2024 compared to $62.1 million for the nine months ended September 30, 2023. Our effective tax rate of 20.8% for the nine months ended September 30, 2024 compared to 24.3% for the nine months ended September 30, 2023. The decrease in the income tax provision was primarily due to a favorable tax benefit related to share-based compensation, as a larger number of non-qualified stock options were exercised during the nine months ended September 30, 2024 compared to the same period in the prior year, and a decrease in foreign taxes as compared to the nine months ended September 30, 2023.

Current wording

The tax rate for the three months ended March 31, 2025 was impacted by a less favorable tax benefit related to share-based compensation, as a smaller number of non-qualified stock options were exercised compared to the three months ended March 31, 2024.

Previous wording

We evaluate the performance of each of our operating segments based on Adjusted Segment EBITDA, which is a GAAP financial measure. The following table reconciles net income to Total Adjusted Segment EBITDA, a non-GAAP financial measure, for the three and nine months ended September 30, 2024 and 2023:

Current wording

We evaluate the performance of each of our operating segments based on multiple measures of segment profit, including Adjusted Segment EBITDA, which is a non-GAAP financial measure. The following table reconciles Segment Operating Income to Adjusted Segment EBITDA for the three months ended March 31, 2025 and 2024:

Previous wording

(1)The number of revenue-generating professionals for the Technology segment excludes as-needed professionals, who we employ based on demand for the segment’s services. We employed an average of 855 as-needed employees during the three months ended September 30, 2024 compared with 792 as-needed employees during the three months ended September 30, 2023.

Current wording

(1)The number of billable professionals for the Technology segment excludes as-needed professionals, who we employ based on demand for the segment’s services. We employed an average of 639 and 727 as-needed employees during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

Gross profit increased $0.1 million, or 0.1%, to $55.3 million for the three months ended September 30, 2024. Gross profit margin decreased 0.5 percentage points for the three months ended September 30, 2024. The decrease in gross profit margin was primarily due to higher compensation expenses as a percentage of revenues, which was largely offset by internal cost recovery related to an initiative to develop AI capabilities for the Company. The related costs are included in our unallocated corporate expenses.

Current wording

Gross profit increased $9.0 million, or 14.1%, to $72.6 million for the three months ended March 31, 2025. Gross profit margin increased 1.9 percentage points for the three months ended March 31, 2025. The increase in gross profit margin was primarily due to higher realized bill rates and internal cost recovery related to an initiative to develop artificial intelligence (“AI”) capabilities for the Company. The related costs are included in our unallocated corporate expenses.

Previous wording

Revenues increased $92.2 million, or 16.3%, to $657.5 million for the nine months ended September 30, 2024, primarily due to higher demand and realized bill rates for our M&A-related antitrust, financial economics and non-M&A-related antitrust services.

Current wording

Revenues decreased $24.7 million, or 12.1%, to $179.9 million for the three months ended March 31, 2025, primarily due to lower demand for our M&A-related antitrust, financial economics and non-M&A-related antitrust services, which was partially offset by higher realized bill rates.

Previous wording

(3)Includes personnel involved in direct client assistance and revenue-generating consultants and excludes professionals employed on an as-needed basis

Current wording

(3)Includes personnel involved in direct client assistance and billable consultants and excludes professionals employed on an as-needed basis

Previous wording

Revenues increased $11.5 million, or 11.7%, to $110.4 million for the three months ended September 30, 2024, primarily due to higher demand for our M&A-related “second request,” litigation and information governance, privacy & security services, which was partially offset by lower demand for our investigations services.

Current wording

Revenues decreased $3.6 million, or 3.5%, to $97.2 million for the three months ended March 31, 2025, primarily due to lower demand for our M&A-related “second request” services, which was partially offset by higher demand for our investigations services.

Previous wording

Gross profit increased $1.5 million, or 4.0%, to $38.8 million for the three months ended September 30, 2024. Gross profit margin decreased 2.6 percentage points for the three months ended September 30, 2024. The decrease in gross profit margin was primarily due to lower profitability and a decreased mix of our higher margin hosting services and lower profitability of our managed review services, which was partially offset by higher profitability of our processing services.

Current wording

Gross profit decreased $3.7 million, or 10.2%, to $32.9 million for the three months ended March 31, 2025. Gross profit margin decreased 2.5 percentage points for the three months ended March 31, 2025. The decrease in gross profit margin was primarily due to lower profitability and mix of our hosting and processing services, which was partially offset by higher profitability of our consulting services.

Previous wording

SG&A expenses increased $1.4 million, or 7.7%, to $19.2 million for the three months ended September 30, 2024, which included a 1.0% estimated negative impact from FX. SG&A expenses of 23.1% of revenues for the three months ended September 30, 2024 compared with 20.5% of revenues for the three months ended September 30, 2023. The increase in SG&A expenses was primarily due to higher bad debt, rent, and outside services expenses.

Current wording

SG&A expenses increased $0.5 million, or 3.1%, to $18.3 million for the three months ended March 31, 2025, which included a 1.1% estimated positive impact from FX. SG&A expenses of 21.0% of revenues for the three months ended March 31, 2025 compared to 21.8% of revenues for the three months ended March 31, 2024.

Previous wording

Our conclusion that we will be able to fund our cash requirements for at least the next 12 months by using existing capital resources and cash generated from operations does not take into account events beyond our control that could result in a material adverse impact on our business, the impact of any future acquisitions or unexpected significant changes in the number of employees or other unanticipated uses of cash. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events such as economic, political and workforce disruptions arise, including any impact of future public health crises, political situations, or economic or business conditions change from those currently prevailing or from those now anticipated, or if unexpected circumstances or other events beyond our control arise that may have a material adverse effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or those of our clients, and the operating performance or financial results of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding and could require us to borrow under our Credit Facility or raise additional debt or equity funding to meet those needs. Our ability to borrow or raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:

Current wording

Our conclusion that we will be able to fund our cash requirements for at least the next 12 months by using existing capital resources and cash generated from operations does not take into account events beyond our control that could result in a material adverse impact on our business, the impact of any future acquisitions or unexpected significant changes in the number of employees or other unanticipated uses of cash. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if events such as economic, political and workforce disruptions arise, including any impact of future public health crises, or economic, political or business conditions change from those currently prevailing or from those now anticipated, or if unexpected circumstances or other events beyond our control arise that may have a material adverse effect on the cash flow or profitability of our business, including material negative changes in the health and welfare of our employees or those of our clients, and the operating performance or financial results of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding and could require us to borrow under our Credit Facility or raise additional debt or equity funding to meet those needs. Our ability to borrow or raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:

Previous wording

Net cash provided by investing activities of $3.5 million for thenine months ended September 30, 2024 compared to net cash used in investing activities of $67.6 million for thenine months ended September 30, 2023. The increase of $71.1 million in net cash provided by investing activities was primarily due to a $24.4 million payment for a short-term investment during the nine months ended September 30, 2023 and the maturity of the short-term investment of $25.2 million during the nine months ended September 30, 2024. In addition, there was a $21.5 million decrease in capital expenditures primarily driven by lower spend on leasehold improvements and cloud computing costs as compared to the nine months ended September 30, 2023.

Current wording

Net cash used in investing activities increased $38.4 million to $17.8 million compared to net cash provided by investing activities of $20.6 million for the three months ended March 31, 2024. The increase was primarily due to the maturity of a short-term investment of $25.2 million during the three months ended March 31, 2024. In addition, there was a $13.2 million increase in capital expenditures primarily driven by higher spend on leasehold improvements and an increase in purchases of software licenses as compared to the three months ended March 31, 2024.

Previous wording

Net cash used in financing activities of $4.9 million forthe nine months ended September 30, 2024 compared to $67.1 million for thenine months ended September 30, 2023. The decrease of $62.2 million, or 92.7%, in net cash used in financing activities was primarily due to the repayment of the $315.8 million principal amount of our 2023 Convertible Notes atmaturity during the nine months ended September 30, 2023, a decrease of $21.0 million in payments for common stock repurchases under the Repurchase Program and an increase in proceeds on stock option exercises of $9.4 million, which was partially offset by a decrease in net borrowings of $285.0 million under our Credit Facility as compared to the same period in the prior year.

Current wording

Net cash used in financing activities increased $230.9 million to $32.3 million compared to net cash provided by financing activities of $198.6 million for the three months ended March 31, 2024. The increase was primarily due to $182.6 million in payments for common stock repurchases under the Repurchase Program and a decrease in net borrowings of $45.0 million under our Credit Facility as compared to the same period in the prior year.

Previous wording

The effect of exchange rate changes on cash and cash equivalents had a favorable impact of $4.7 million and $2.6 million for the nine months ended September 30, 2024 and 2023, respectively.

Current wording

The effect of exchange rate changes on cash and cash equivalents had a favorable impact of $5.9 million for the three months ended March 31, 2025 compared to an unfavorable impact of $3.6 million for the three months ended March 31, 2024.

Previous wording

For the nine months ended September 30, 2024, cash paid for income taxes and tax credits, net of tax refunds included $23.5 million of payments for the purchase of tax credits.

Current wording

Cash paid for income taxes and tax credits, net of tax refunds included $16.8 million and $23.5 million of payments for the purchase of tax credits during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

As of September 30, 2024, our capital resources included $386.3 million of cash and cash equivalents and available borrowing capacity of $900.0 million under the revolving line of credit under our Credit Facility. The $900.0 million revolving line of credit under our Credit Facility includes a $125.0 million sublimit for borrowings in currencies other than USD, including the euro, British pound, Australian dollar, Canadian dollar, Swiss franc and Japanese yen.

Current wording

As of March 31, 2025, our capital resources included $151.1 million of cash and cash equivalents and available borrowing capacity of $740.0 million under the revolving line of credit under our Credit Facility. The $900.0 million revolving line of credit under our Credit Facility includes a $125.0 million sublimit for borrowings in currencies other than USD, including the euro, British pound, Australian dollar, Canadian dollar, Swiss franc and Japanese yen.

Previous wording

The availability of borrowings, as well as issuances and extensions of letters of credit under our Credit Facility, are subject to specified conditions. Subject to certain conditions, at any time prior to maturity, we will be able to invite existing and new lenders to increase the size of the facility up to a maximum of $1.2 billion. See Note 8, “Debt” in Part I, Item 1, of this Quarterly Report on Form 10-Q for a further discussion of borrowing rates and guarantees under the Credit Facility.

Current wording

The availability of borrowings, as well as issuances and extensions of letters of credit under our Credit Facility, are subject to specified conditions. Subject to certain conditions, at any time prior to maturity, we will be able to invite existing and new lenders to increase the size of the facility up to a maximum of $1.2 billion. See Note 8, “Debt” in Part I, Item 1, of this Quarterly Report on Form 10-Q for a further discussion of variable interest rates and guarantees under the Credit Facility.

Previous wording

•capital expenditures, primarily for information technology equipment and information or financial systems, office furniture and leasehold improvements;

Current wording

•capital expenditures, primarily for information technology equipment and systems, office furniture and leasehold improvements;

Previous wording

•debt service requirements, including interest payments on our long-term debt;

Current wording

•debt service requirements, including interest payments;

Previous wording

•compensation to designated executive management and senior managing directors under our various long-term incentive compensation programs;

Current wording

•compensation to designated executive management and senior managing directors under our various long-term incentive compensation programs, including forgivable loans;

Previous wording

During the nine months ended September 30, 2024, we spent $21.7 million in capital expenditures to support our organization, including direct support for specific client engagements. For the remainder of 2024, we currently expect additional capital expenditures to support our organization in an aggregate amount of between $14 million and $17 million. Our estimate takes into consideration the needs of our existing businesses but does not include the impact of any purchases that we may be required to make as a result of future acquisitions or specific client engagements that are not completed or not currently contemplated. Our capital expenditure requirements may change if our staffing levels or technology needs change significantly from what we currently anticipate, if we are required to purchase additional equipment specifically to support new client engagements, or if we pursue and complete additional acquisitions.

Current wording

During the three months ended March 31, 2025, we spent $17.8 million in capital expenditures to support our organization, including direct support for specific client engagements. For the remainder of 2025, we currently expect additional capital expenditures to support our organization in an aggregate amount of between $50 million and $60 million, which includes costs related to leasehold improvements for our new office space in Chicago, Illinois. Our estimate takes into consideration the needs of our existing businesses but does not include the impact of any purchases that we may be required to make as a result of future acquisitions or specific client engagements that are not completed or not currently contemplated. Our capital expenditure requirements may change if our staffing levels or technology needs change significantly from what we currently anticipate, if we are required to purchase additional equipment specifically to support new client engagements, or if we pursue and complete additional acquisitions.

Previous wording

We have no future contractual obligations as of September 30, 2024 related to outstanding borrowings under our Credit Facility. For more information on our Credit Facility, refer to Note 8, “Debt” in Part I, Item 1. Future contractual obligations exclude any revolving line of credit borrowings or repayments subsequent to September 30, 2024 and prior to the November 21, 2027 maturity date of our Credit Facility. Under our operating leases as described in Note 9, “Leases” in Part I, Item 1, we have current obligations of $36.2 million and non-current obligations of $217.0 million.

Current wording

Our future contractual obligations as of March 31, 2025 include long-term obligations of $160.0 million related to outstanding borrowings under our Credit Facility. For more information on our Credit Facility, refer to Note 8, “Debt” in Part I, Item 1 of this Quarterly Report on Form 10-Q. Future contractual obligations related to our debt assume that payments will be made based on the current payment schedule and that interest payments will be at their stated rates and exclude any revolving line of credit borrowings or repayments subsequent to March 31, 2025 and prior to the November 21, 2027 maturity date of our Credit Facility. Under our operating leases as described in Note 9, “Leases” in Part I, Item 1 of this Quarterly Report on Form 10-Q, we have current obligations of $33.8 million and non-current obligations of $201.2 million.