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 months ended March 31, 2026 and 2025, 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, 2025 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 and six months ended June 30, 2026 and 2025, 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, 2025 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

We have included the definition of Segment Operating Income (Loss), 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.

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 (Loss) 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 (Loss) for all segments, which excludes unallocated corporate expenses. We use Segment Operating Income (Loss) for the purpose of calculating Adjusted Segment EBITDA, which is a non-GAAP financial measure. We define Adjusted Segment EBITDA as Segment Operating Income (Loss) 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.

Current wording

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 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. Many of our competitors use common alternative measures of operating performance. Non-GAAP financial measures are 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 our non-GAAP financial measures, considered along with corresponding GAAP financial measures, provide management and investors with useful supplemental information.

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, losses on early extinguishment of debt and Extraordinary Litigation-Related Expenses (as defined below). 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. Many of our competitors use common alternative measures of operating performance. Non-GAAP financial measures are 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 our 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 useful supplemental information on 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, losses on early extinguishment of debt and Extraordinary Litigation-Related Expenses (as defined below). 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

Revenues for the three months ended March 31, 2026 increased $85.1 million, or 9.5%, compared to the three months ended March 31, 2025. The increase in revenues was primarily due to higher revenues in our Corporate Finance, Strategic Communications and Technology segments, which was partially offset by lower revenues in our Economic Consulting segment. Excluding an estimated 2.7% positive impact from FX, revenues increased $60.8 million, or 6.8%, compared to the three months ended March 31, 2025.

Current wording

Revenues for the three months ended June 30, 2026 increased $49.8 million, or 5.3%, compared to the three months ended June 30, 2025, primarily due to higher revenues in our Corporate Finance, Technology and FLC segments, which was partially offset by a $9.2 million decline in pass-through revenues.

Previous wording

Net income for the three months ended March 31, 2026 decreased $4.2 million, or 6.8%, compared to the three months ended March 31, 2025. The decrease in net income was primarily due to higher direct costs and selling, general and administrative (“SG&A”) expenses, including the impact of legal settlement gains recorded in the same quarter in the prior year which did not recur, as well as an increase in interest expense and a higher effective tax rate. These decreases were partially offset by higher revenues and the absence of special charges, compared to the same quarter in the prior year.

Current wording

Net income for the three months ended June 30, 2026 decreased $13.9 million, or 19.4%, compared to the three months ended June 30, 2025. The decrease in net income was primarily due to higher direct costs, selling, general and administrative (“SG&A”) expenses and interest expense, which was partially offset by the increase in revenues and a lower income tax provision compared to the same quarter in the prior year.

Previous wording

Adjusted EBITDA for the three months ended March 31, 2026 decreased $18.3 million, or 15.9%, compared to the three months ended March 31, 2025. Adjusted EBITDA Margin of 9.8% for the three months ended March 31, 2026 compared to 12.8% for the three months ended March 31, 2025. The decrease in Adjusted EBITDA was primarily due to higher direct costs and SG&A expenses, including the impact of legal settlement gains recorded in the same quarter in the prior year that did not recur, which more than offset the increase in revenues compared to the same quarter in the prior year. Adjusted EBITDA for the three months ended March 31, 2025 excludes special charges.

Current wording

Adjusted EBITDA for the three months ended June 30, 2026 decreased $7.2 million, or 6.4%, compared to the three months ended June 30, 2025. Adjusted EBITDA Margin of 10.5% for the three months ended June 30, 2026 compared to 11.8% for the three months ended June 30, 2025. The decrease in Adjusted EBITDA was primarily due to higher direct costs and SG&A expenses, excluding $6.6 million of Extraordinary Litigation-Related Expenses during the three months ended June 30, 2026, which was partially offset by the increase in revenues compared to the same quarter in the prior year.

Previous wording

EPS for the three months ended March 31, 2026 increased $0.16 to $1.90 compared to $1.74 for the three months ended March 31, 2025. The increase in EPS was primarily due to lower weighted average shares outstanding, which was partially offset by a decrease in net income as described above.

Current wording

EPS for the three months ended June 30, 2026 decreased $0.14 to $1.99 compared to $2.13 for the three months ended June 30, 2025. The decrease in EPS was primarily due to the decrease in net income as described above, which was partially offset by the favorable impact of lower weighted average shares outstanding.

Previous wording

Adjusted EPS for the three months ended March 31, 2026 decreased $0.39 to $1.90 compared to $2.29 for the three months ended March 31, 2025. Adjusted EPS was equal to EPS for the three months ended March 31, 2026. Adjusted EPS for the three months ended March 31, 2025 excludes the $25.3 million in special charges, which increased Adjusted EPS by $0.55.

Current wording

Adjusted EPS for the three months ended June 30, 2026 increased $0.03 to $2.16 compared to $2.13 for the three months ended June 30, 2025. Adjusted EPS for the three months ended June 30, 2026 excludes the $6.6 million of Extraordinary Litigation-Related Expenses, which increased Adjusted EPS by $0.17. Adjusted EPS was equal to EPS for the three months ended June 30, 2025.

Previous wording

Netcash used in operating activities for the three months ended March 31, 2026 decreased $155.2 million, or 33.4%, to $310.0 million compared to $465.2 million for the three months ended March 31, 2025. The decrease in net cash used in operating activities was primarily due to a decrease in forgivable loan issuances, higher cash collections and a decrease in income tax payments, which was partially offset by an increase in compensation payments. Days sales outstanding (“DSO”) of 98 days at March 31, 2026 compared to 100 days at March 31, 2025.

Current wording

Netcash provided by operating activities for the three months ended June 30, 2026 increased $96.6 million, or 173.5%, to $152.3 million compared to $55.7 million for the three months ended June 30, 2025. The increase in net cash provided by operating activities was primarily due to higher cash collections and decreases in forgivable loan issuances and income tax payments, which was partially offset by an increase in operating expense and compensation payments. Days sales outstanding (“DSO”) of 99 days at June 30, 2026 compared to 100 days at June 30, 2025.

Previous wording

Free Cash Flow was an outflow of $320.6 million and $483.0 million for the three months ended March 31, 2026 and 2025, respectively. The increase in Free Cash Flow was primarily due to lower net cash used in operating activities, as described above.

Current wording

Free Cash Flow was an inflow of $141.0 million and $38.3 million for the three months ended June 30, 2026 and 2025, respectively. The increase in Free Cash Flow was primarily due to higher net cash provided by operating activities, as described above.

Previous wording

During thethree months ended March 31, 2026, we made $126.8 million in payments for common stock repurchases under the Repurchase Program.

Current wording

During thethree months ended June 30, 2026, we made $393.2 million in payments for common stock repurchases, including excise tax, under the Repurchase Program.

Previous wording

The following table includes the net headcount additions (reductions) by segment and in total for the three months ended March 31, 2026.

Current wording

The following table includes the net headcount additions (reductions) by segment and in total for the six months ended June 30, 2026.

Previous wording

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

Current wording

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

Previous wording

Interest expense increased $5.5 million to $6.4 million for the three months ended March 31, 2026 compared to $1.0 million for the three months ended March 31, 2025, primarily due to higher borrowings on our senior unsecured bank revolving credit facility (“ Revolving Credit Facility”).

Current wording

Interest expense increased $6.4 million, or 121.2%, to $11.6 million for the three months ended June 30, 2026 compared to $5.3 million for the three months ended June 30, 2025, primarily due to higher borrowings on the $300.0 million term loan under our Credit Agreement (the "Incremental Term Loan") and our senior unsecured bank revolving credit facility (the “Revolving Credit Facility”).

Previous wording

Our income tax provision increased $2.2 million, or 11.5%, to $20.9 million for the three months ended March 31, 2026 compared to $18.8 million for the three months ended March 31, 2025. Our effective tax rate of 26.6% for the three months ended March 31, 2026 compared to 23.3% for the three months ended March 31, 2025. The increase in the income tax provision was primarily due to a less favorable tax benefit related to share-based compensation, as fewer shares vested during the period, and an increase in the valuation allowance recorded against current period losses as compared to the three months ended March 31, 2025.

Current wording

Our income tax provision decreased $5.1 million, or 25.0%, to $15.2 million for the three months ended June 30, 2026 compared to $20.2 million for the three months ended June 30, 2025. Our effective tax rate of 20.8% for the three months ended June 30, 2026 compared to 22.0% for the three months ended June 30, 2025. The decrease in the income tax provision was due to both a decrease in income before income tax provision and a lower effective tax rate. The lower effective tax rate was primarily due to the net tax benefits associated with our tax equity investment, which was partially offset by an unfavorable impact from share-based compensation and an increase in the valuation allowance recorded against current period losses as compared to the three months ended June 30, 2025.

Previous wording

Unallocated corporate expenses increased $25.9 million, or 130.8%, to $45.6 million compared to $19.8 million for the three months ended March 31, 2025, primarily due to a legal settlement gain recorded during the three months ended March 31, 2025, and an increase in legal expenses during the three months ended March 31, 2026.

Current wording

Unallocated corporate expenses increased $42.4 million, or 71.2%, to $101.9 million compared to $59.5 million for the six months ended June 30, 2025, primarily due to a legal settlement gain recorded during the six months ended June 30, 2025 that did not recur, higher compensation expenses, $6.6 million in Extraordinary Litigation-Related Expenses incurred during the three months ended June 30, 2026, and higher expenses related to our All SMD meeting, which did not occur in 2025.

Previous wording

Interest income and other, which includes FX gains and losses, decreased $1.8 million to $1.1 million for the three months ended March 31, 2026 compared to $2.8 million for the three months ended March 31, 2025, primarily due to a $3.1 million decrease in interest income, which was partially offset by a $1.3 million positive impact from FX remeasurement. There was no FX remeasurement gain or loss during the three months ended March 31, 2026 as compared to a $1.3 million FX loss during the same quarter in the prior year.

Current wording

Interest income and other, which includes FX gains and losses, decreased $0.1 million to a $0.7 million gain for the six months ended June 30, 2026 compared to a $0.8 million gain for the six months ended June 30, 2025, primarily due to a $3.0 million decrease in interest income, which was partially offset by a $2.8 million decrease in FX remeasurement losses compared to the same period in the prior year.

Previous 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 tables reconcile Segment Operating Income (Loss) to Adjusted Segment EBITDA for the three months ended March 31, 2026 and 2025:

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 tables reconcile Segment Operating Income to Adjusted Segment EBITDA for the three and six months ended June 30, 2026 and 2025:

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. The following table reconciles net income to Total Segment Operating Income and Total Adjusted Segment EBITDA for the three months ended March 31, 2026 and 2025:

Current 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. The following table reconciles net income to Total Segment Operating Income and Total Adjusted Segment EBITDA for the three and six months ended June 30, 2026 and 2025:

Previous 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 1,233 and 639 as-needed employees during the three months ended March 31, 2026 and 2025, respectively.

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 755 and 357 as-needed employees during the three months ended June 30, 2026 and 2025, respectively.

Previous wording

Gross profit increased $35.0 million, or 31.2%, to $147.1 million for the three months ended March 31, 2026. Gross profit margin increased 3.3 percentage points for the three months ended March 31, 2026. The increase in gross profit margin was primarily due to a 5 percentage point increase in utilization and higher realized bill rates.

Current wording

Gross profit increased $43.0 million, or 17.5%, to $288.1 million for the six months ended June 30, 2026. Gross profit margin increased 1.2 percentage points for the six months ended June 30, 2026. The increase in gross profit margin was primarily due to higher realized bill rates and a 1 percentage point increase in utilization.

Previous wording

Revenues increased $2.3 million, or 1.2%, to $192.9 million for the three months ended March 31, 2026, primarily due to higher realized bill rates for our risk & investigations and construction solutions services, which was partially offset by lower demand for our dispute advisory services. Excluding an estimated 2.1% positive impact from FX, revenues decreased $1.7 million, or 0.9%.

Current wording

Revenues increased $7.7 million, or 4.1%, to $194.3 million for the three months ended June 30, 2026, primarily due to higher realized bill rates and demand for our risk & investigations services, which was partially offset by lower demand for our dispute advisory services.

Previous wording

SG&A expenses increased $5.3 million, or 14.4%, to $42.2 million for the three months ended March 31, 2026, primarily due to higher hiring-related, bad debt, and travel and entertainment expenses. The increase in SG&A expenses included an estimated 2.1% negative impact from FX. SG&A expenses were 21.9% of revenues for the three months ended March 31, 2026 compared to 19.3% of revenues for the three months ended March 31, 2025.

Current wording

SG&A expenses increased $7.7 million, or 10.5%, to $81.0 million for the six months ended June 30, 2026, primarily due to an increase in hiring-related, bad debt, and travel and entertainment expenses. The increase in SG&A expenses included an estimated 1.4% negative impact from FX. SG&A expenses of 20.9% of revenues for the six months ended June 30, 2026 compared to 19.4% of revenues for the six months ended June 30, 2025.

Previous wording

Revenues decreased $4.2 million, or 2.3%, to $175.6 million for the three months ended March 31, 2026, primarily due to lower demand for our non-M&A-related antitrust services, which was partially offset by higher demand for our financial economics and M&A-related antitrust services, and higher realized bill rates. Excluding an estimated 3.4% positive impact from FX, revenues decreased $10.3 million, or 5.7%.

Current wording

Revenues decreased $7.1 million, or 1.9%, to $364.5 million for the six months ended June 30, 2026, primarily due to lower demand for our non-M&A-related antitrust and international arbitration services, which was partially offset by higher realized bill rates across our services and higher demand for our M&A-related antitrust services. Excluding an estimated 1.9% positive impact from FX, revenues decreased $14.3 million, or 3.8%.

Previous wording

SG&A expenses increased $1.2 million, or 5.0%, to $25.6 million for the three months ended March 31, 2026, primarily due to higher bad debt expenses. The increase in SG&A expenses included an estimated 2.3% negative impact from FX. SG&A expenses of 25.0% of revenues for the three months ended March 31, 2026 compared to 25.1% of revenues for the three months ended March 31, 2025.

Current wording

SG&A expenses increased $0.6 million, or 1.0%, to $57.9 million for the six months ended June 30, 2026, primarily due to higher compensation and outside services expenses, which was partially offset by lower infrastructure support expenses. The increase in SG&A expenses included an estimated 2.3% negative impact from FX. SG&A expenses of 15.9% of revenues for the six months ended June 30, 2026 compared to 15.4% of revenues for the six months ended June 30, 2025.

Previous wording

Revenues increased $5.2 million, or 5.3%, to $102.3 million for the three months ended March 31, 2026, primarily due to higher demand for our litigation and information governance, privacy & security services, which was partially offset by lower demand for our investigations and M&A-related “second request” services. Excluding an estimated 2.5% positive impact from FX, revenues increased $2.7 million, or 2.8%.

Current wording

Revenues increased $20.6 million, or 11.4%, to $201.3 million for the six months ended June 30, 2026, 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. Excluding an estimated 1.6% positive impact from FX, revenues increased $17.7 million, or 9.8%.

Previous wording

Gross profit increased $0.4 million, or 1.2%, to $33.3 million for the three months ended March 31, 2026. Gross profit margin decreased 1.3 percentage points for the three months ended March 31, 2026. The decrease in gross profit margin was primarily due to lower profitability of our hosting and processing services, which was partially offset by higher profitability of our consulting and review services.

Current wording

Gross profit increased $7.5 million, or 13.0%, to $65.1 million for the six months ended June 30, 2026. Gross profit margin increased 0.5 percentage points for the six months ended June 30, 2026. The increase in gross profit margin was primarily due to higher profitability of our consulting, review and processing services, which was partially offset by lower profitability of our hosting services.

Previous wording

SG&A expenses increased $2.8 million, or 4.8%, to $61.5 million for the three months ended March 31, 2026, primarily due to higher outside services, travel and entertainment and compensation expenses, which was partially offset by lower bad debt expenses. The increase in SG&A expenses included an estimated 2.8% negative impact from FX. SG&A expenses of 15.0% of revenues for the three months ended March 31, 2026 compared to 17.1% of revenues for the three months ended March 31, 2025.

Current wording

SG&A expenses increased $0.6 million, or 3.3%, to $20.2 million for the three months ended June 30, 2026, primarily due to higher travel and entertainment and compensation expenses. The increase in SG&A expenses included an estimated 1.2% negative impact from FX. SG&A expenses of 20.2% of revenues for the three months ended June 30, 2026 compared to 19.1% of revenues for the three months ended June 30, 2025.

Previous wording

Gross profit increased $10.1 million, or 33.3%, to $40.4 million for the three months ended March 31, 2026. Gross profit margin increased 4.4 percentage points for the three months ended March 31, 2026. The increase in gross profit margin was primarily due to lower compensation expenses as a percentage of revenues.

Current wording

Gross profit increased $10.7 million, or 15.8%, to $78.1 million for the six months ended June 30, 2026. Gross profit margin increased 2.9 percentage points for the six months ended June 30, 2026. The increase in gross profit margin was primarily due to lower pass-through revenues and expenses and lower compensation expenses as a percentage of revenues.

Previous wording

Our annual cash flows from operations generally exceed our cash needs for capital expenditures and debt service requirements. We typically finance our day-to-day operations, capital expenditures, acquisitions and share repurchases through cash flows from operations. We believe that our cash flows from operations, supplemented by borrowings under our Revolving Credit Facility, as necessary, and our $300.0 million term loan under our Revolving Credit Facility ("Incremental Term Loan"), will provide adequate cash to fund our cash needs for at least the next 12 months.

Current wording

Our annual cash flows from operations generally exceed our cash needs for capital expenditures and debt service requirements. We typically finance our day-to-day operations, capital expenditures, acquisitions and share repurchases through cash flows from operations. We believe that our cash flows from operations, supplemented by borrowings under our Revolving Credit Facility, as necessary, and our Incremental Term Loan under our third amended and restated credit agreement entered into on June 30, 2026 (as amended and restated, the “Credit Agreement”), will provide adequate cash to fund our cash needs for at least the next 12 months.

Previous wording

Any new debt funding, if available, may be on terms less favorable to us than our Revolving Credit Facility, including the Incremental Term Loan thereunder. See “Forward-Looking Statements” in Part I, Item 2, of this Quarterly Report on Form 10-Q, and the information contained under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

Any new debt funding, if available, may be on terms less favorable to us than our Revolving Credit Facility and Incremental Term Loan under our Credit Agreement. See “Forward-Looking Statements” in Part I, Item 2, of this Quarterly Report on Form 10-Q, and the information contained under the heading “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

Net cash used in operating activities decreased $155.2 million, or 33.4%, to $310.0 million compared to $465.2 million for the three months ended March 31, 2025. The decrease in net cash used in operating activities was primarily due to a decrease in forgivable loan issuances, higher cash collections and a decrease in income tax payments, which was partially offset by an increase in compensation payments. DSO was 98 and 100 days as of March 31, 2026 and 2025, respectively.

Current wording

Net cash used in operating activities decreased $251.8 million, or 61.5%, to $157.7 million compared to $409.5 million for the six months ended June 30, 2025. The decrease in net cash used in operating activities was primarily due to a decrease in forgivable loan issuances, higher cash collections and a decrease in income tax payments, which was partially offset by an increase in compensation and interest payments. DSO was 99 and 100 days as of June 30, 2026 and 2025, respectively.

Previous wording

Net cash used in investing activities decreased $7.2 million, or 40.4%, to $10.6 million compared to $17.8 million for the three months ended March 31, 2025. The decrease in net cash used in investing activities was due to a $7.2 million decrease in capital expenditures, primarily related to lower spend on leasehold improvements and capitalized software costs, which was partially offset by higher spend on information technology equipment costs as compared to the three months ended March 31, 2025.

Current wording

Net cash used in investing activities increased $28.8 million, or 81.6%, to $64.0 million compared to $35.2 million for the six months ended June 30, 2025. The increase in net cash used in investing activities was due to a $42.1 million payment for a tax equity investment, which was partially offset by a $13.3 million decrease in capital expenditures, primarily related to lower spend on leasehold improvements as compared to the six months ended June 30, 2025.

Previous wording

Net cash provided by financing activities increased $290.8 million to $258.5 million compared to net cash used in financing activities of $32.3 million for the three months ended March 31, 2025. The increase in net cash provided by financing activities was primarily due to receipt of $300.0 million in proceeds from the Incremental Term Loan and a decrease of $55.8 million in payments for common stock repurchases under the Repurchase Program, which was partially offset by a decrease in net borrowings of $70.0 million under our Revolving Credit Facility compared to the three months ended March 31, 2025.

Current wording

Net cash provided by financing activities increased $208.7 million to $124.5 million compared to net cash used in financing activities of $84.2 million for the six months ended June 30, 2025. The increase in net cash provided by financing activities was primarily due to receipt of $300.0 million in proceeds from the Incremental Term Loan, which was partially offset by a decrease in net borrowings of $115.0 million under our Revolving Credit Facility compared to the six months ended June 30, 2025.

Previous wording

The effect of exchange rate changes on cash and cash equivalents had an unfavorable impact of $4.7 million for the three months ended March 31, 2026 compared to a favorable impact of $5.9 million for the three months ended March 31, 2025.

Current wording

The effect of exchange rate changes on cash and cash equivalents had an unfavorable impact of $4.1 million during the six months ended June 30, 2026 compared to a favorable impact of $21.3 million during the six months ended June 30, 2025.

Previous wording

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

Current wording

Cash paid for income taxes and tax credits, net of refunds, included $6.8 million and $28.9 million of payments for the purchase of tax credits during the six months ended June 30, 2026 and 2025, respectively.

Previous wording

As of March 31, 2026, our capital resources included $198.3 million of cash and cash equivalents and available borrowing capacity of $445.0 million under the revolving line of credit under our Revolving Credit Facility. The $900.0 million revolving line of credit under our Revolving 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 June 30, 2026, our capital resources included $163.7 million of cash and cash equivalents and available borrowing capacity of $780.0 million under the revolving line of credit under our Revolving Credit Facility. We also hold an Incremental Term Loan in the aggregate amount of $300.0 million, which matures on March 17, 2029.

Previous wording

The second amended and restated credit agreement entered into on November 21, 2022 (as amended, the “Credit Agreement”) governing the Revolving Credit Facility and our other indebtedness outstanding from time to time contains covenants that, among other things, may limit our ability to: incur additional indebtedness; create liens; pay dividends on our capital stock, make distributions or repurchases of our capital stock or make specified other restricted payments; consolidate, merge or sell all or substantially all of our assets; guarantee obligations of other entities or our foreign subsidiaries; enter into hedging agreements; enter into transactions with affiliates or related persons; or engage in any business other than consulting-related businesses. In addition, the Credit Agreement includes a financial covenant that requires us not to exceed a maximum consolidated total net leverage ratio (the ratio of funded debt (less unrestricted cash up to $300.0 million) to Consolidated EBITDA, as defined in the Credit Agreement). As of March 31, 2026, we were in compliance with the covenants contained in the Credit Agreement. See Note 8, “Debt” in Part I, Item 1, of this Quarterly Report on Form 10-Q for a further discussion of the Credit Agreement.

Current wording

The Credit Agreement governing the Revolving Credit Facility and the Incremental Term Loan contains covenants that, among other things, may limit our ability to: incur additional indebtedness; create liens; pay dividends on our capital stock, make distributions or repurchases of our capital stock or make specified other restricted payments; consolidate, merge or sell all or substantially all of our assets; or engage in any business other than consulting-related businesses. In addition, the Credit Agreement includes a financial covenant that requires us not to exceed a maximum consolidated total net leverage ratio (the ratio of funded debt (less unrestricted cash up to $400.0 million) to Consolidated EBITDA, as defined in the Credit Agreement). As of June 30, 2026, we were in compliance with the covenants contained in the Credit Agreement. See Note 8, “Debt” in Part I, Item 1, of this Quarterly Report on Form 10-Q for a further discussion of the Credit Agreement.