EXPONENT INC
For the period ended Jan 3, 2025. Filed Feb 28, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 28, 2025
EXPO$84.02-2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-29; filed 2024-02-23.
0000950170-24-019390
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-01-03; filed 2025-02-28.
0000950170-25-030001
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 56 previous paragraphs and 53 current paragraphs.
30 unchanged; 20 reworded; 3 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Revenues and revenues before reimbursements for 2024 increased 4% as compared to the prior year. Our focus on effective resource management drove significant improvement in utilization. Demand for our proactive services strengthened during the year driven by the consumer electronics and utilities industries. We saw increased activity in user research studies and product development consulting in the consumer electronics sector and strong demand for our risk-related work in utilities. Growth in reactive services was supported by strong activity in the utilities and medical device industries. With increasing global demand for energy and the related investments in infrastructure, we are actively involved in failure analysis and dispute-related projects around the world. Our multidisciplinary team of scientists and engineers continues to provide critical data, analyses and insights for our clients.
Current report
The increase in compensation and related expenses during 2024 was due an increase in payroll expense, an increase in bonus expense and an increase in stock-based compensation. During 2024, payroll expense increased $3,771,000 due to the impact of our annual salary increase partially offset by a decrease in technical full-time equivalent employees. During 2024, bonus expense increased by $5,096,000 due to a corresponding increase in our bonus pool. Stock-based compensation increased $1,150,000 during 2024 due to an increase in unvested restricted stock unit grants. We expect compensation expense, excluding the change in value of deferred compensation plan assets, to increase as we selectively add new talent and adjust compensation to market conditions.
Current report
The decrease in general and administrative expenses during 2024 was primarily due to a decrease in outside consulting expenses of $1,304,000, a decrease in travel and meals of $844,000 and a decrease in personnel expenses of $673,000. Outside consulting decreased primarily due to activity associated with content creation for our external website during 2023. The decrease in travel and meals was due to the decrease in technical full-time equivalent employees and a firm-wide principals' meeting which was held in 2023.We did not have any firm-wide meetings during 2024. The decrease in personnel expenses was due to lower relocation and recruiting costs. We expect general and administrative expenses to increase as we expand our business development and staff development initiatives.
Removed paragraphs (6)
Previous report
Revenues for 2023 increased 5% and revenues before reimbursements increased 7% as compared to the prior year. The increase in revenues was due to an increase in billable hours and an increase in billing rates. Our multidisciplinary team of scientists and engineers continues to provide critical data, analyses and insights for our clients as society raises expectations for safety, health and the environment. Growth during 2023 was driven by our reactive business, which experienced strong demand for failure investigations and dispute-related work. Demand for our services across the transportation and energy sectors was strong during 2023. Proactive revenues for the consumer electronics sector declined during 2023 due to ongoing industry headwinds and product lifecycle timing. The remainder of our proactive portfolio grew during 2023 primarily driven by safety-related work evaluating the impacts of chemicals on human health and the environment.
Previous report
The increase in compensation and related expenses during 2023 was due to a change in the value of assets associated with our deferred compensation plan and an increase in wages and fringe benefits. During 2023, deferred compensation expense increased $28,502,000 with a corresponding increase to other income, net, as compared to the prior year due to the change in value of assets associated with our deferred compensation plan. This increase consisted of an increase in the value of the plan assets of $14,315,000 during 2023 as compared to a decrease in the value of the plan assets of $14,187,000 during 2022. Wages increased $21,084,000 and fringe benefits increased $4,888,000 during 2023 due to the impact of our annual salary increase and increase in number of employees.
Previous report
The increase in general and administrative expenses during 2023 was primarily due to an increase in travel and meals of $953,000, an increase in bad debt expense of $402,000 and an increase in marketing and business development expenses of $313,000, partially offset by a decrease in outside consulting expenses and other professional services of $736,000. The increase in travel and meals was due to the continued easing of COVID-19 pandemic-related business and travel restrictions. The increase in bad debt expense was due to an increase in write-offs. The increase in marketing and business development expenses was due to an increase in our business development activities. The decrease in outside consulting expenses and other professional services was due a reduction in activity associated with developing content for our external website.
Previous report
The increase in operating income for our Environmental and Health segment was due to an increase in revenues. The increase in revenues was due to an increase in billing rates, partially offset by a reduction in billable hours. Growth was driven by evolving regulatory requirements which drove safety-related engagements evaluating the impacts of chemicals on human health and the environment.
Previous report
The increase in corporate operating expenses during 2023 as compared to 2022 was primarily due to an increase in deferred compensation expense and an increase in the costs associated with our human resources, finance, information technology and business development groups. During 2023, deferred compensation expense increased $28,502,000, with a corresponding increase to other income, net, as compared to the prior year, due to the change in value of assets associated with our deferred compensation plan. This increase consisted of an increase in the value of plan assets of $14,315,000 during 2023 as compared to a decrease in the value of plan assets of $14,187,000 during 2022.
Previous report
During 2023, other income increased $28,502,000 with a corresponding increase to deferred compensation expense as compared to 2022 due to the change in value of assets associated with our deferred compensation plan. This increase consisted of an increase in the value of the plan assets of $14,315,000 during 2023 as compared to a decrease in the value of the plan assets of $14,187,000 during 2022. During 2023, other income decreased $781,000 as compared to 2022 due to realized gain and loss on foreign exchange. This decrease consisted of a realized loss on foreign exchange of $259,000 during 2023 as compared to a realized gain on foreign exchange of $522,000 during 2022. During 2023, interest income increased by $5,054,0000 due to higher interest rates. During 2023, rental income increased $433,000 as compared to 2022 due to the addition of an additional tenant in our Natick facility and an increase in rent.
Reworded paragraphs (20)
Previous wording
In preparing our consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities on our consolidated balance sheet. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. On a regular basis we evaluate our assumptions, judgments and estimates and make changes accordingly. We believe that the assumptions, judgments and estimates involved in accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts impact on our consolidated financial statements, so we consider these to be our critical accounting policies. We discuss below the assumptions, judgments and estimates associated with these policies. Historically, our assumptions, judgments and estimates relative to our critical accounting policies have not differed materially from actual results. For further information on our critical accounting policies, see Note 1 of our Notes to Consolidated Financial Statements.
Current wording
In preparing our consolidated financial statements, we make assumptions, judgments and estimates that can have a significant impact on our revenue, operating income and net income, as well as on the value of certain assets and liabilities on our consolidated balance sheet. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. On a regular basis we evaluate our assumptions, judgments and estimates and make changes accordingly. We believe that the assumptions, judgments and estimates involved in accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts have the greatest potential impact on our consolidated financial statements, so we consider these to be our critical accounting policies. We discuss below the assumptions, judgments and estimates associated with these policies. Historically, our assumptions, judgments and estimates relative to our critical accounting policies have not differed materially from actual results. For further information on our critical accounting policies, see Note 1 of our Notes to Consolidated Financial Statements.
Previous wording
Net income was $100,339,000 during 2023 as compared to $102,330,000 during 2022. Diluted earnings per share decreased to $1.94 for 2023 as compared to $1.96 for 2022. Net income and diluted earnings per share for 2023 and 2022 benefited from the excess tax benefit associated with stock-based awards. The excess tax benefit associated with stock-based awards decreased to $3,620,000 during 2023 as compared to $5,829,000 during 2022. The decrease in the excess tax benefit was due to a smaller increase in value of our common stock between the grant date and the release date for the restricted stock units released during 2023 as compared to 2022.
Current wording
Net income increased 9% to $109,002,000 during 2024 as compared to $100,339,000 during 2023. Diluted earnings per share increased to $2.11 for 2024 as compared to $1.94 for 2023. The increase in profitability was due to our continued efforts to better align resources with demand. Net income and diluted earnings per share for 2024 and 2023 benefited from the excess tax benefit associated with stock-based awards. The excess tax benefit associated with stock-based awards decreased to $2,793,000 during 2024 as compared to $3,620,000 during 2023. The decrease in the excess tax benefit was due to a smaller increase in value of our common stock between the grant date and the release date for the restricted stock units released during 2024 as compared to 2023.
Previous wording
We operate on a 52-53 week fiscal year with each year ending on the Friday closest to December 31 st. Fiscal period 2023 included 52 weeks of activity and ended on December 29, 2023. Fiscal period 2022 included 52 weeks of activity and ended on December 30, 2022. Fiscal period 2021 included 52 weeks of activity and ended on December 31, 2021. Fiscal period 2024 is 53 weeks and will end on January 3, 2025.
Current wording
We operate on a 52-53 week fiscal year with each year ending on the Friday closest to December 31 st. Fiscal period 2024 included 53 weeks of activity and ended on January 3, 2025. Fiscal period 2023 included 52 weeks of activity and ended on December 29, 2023. Fiscal period 2022 included 52 weeks of activity and ended on December 30, 2022. Fiscal period 2025 is 52 weeks and will end on January 2, 2026.
Previous wording
During 2023, billable hours increased 2% to 1,495,000 as compared to 1,465,000 during 2022. Our utilization decreased to 69% for 2023 as compared to 74% for 2022. The decrease in utilization during 2023 was due to an increase in technical full-time equivalent employees. Technical full-time equivalent employees increased 10% to 1,047 for 2023 as compared to 955 for 2022. We continue to selectively hire key talent to expand our capabilities.
Current wording
Billable hours were 1,495,000 during both 2024 and 2023. Our utilization increased to 73% for 2024 as compared to 69% for 2023. The increase in utilization during 2024 was due to our efforts to align resources with demand. Technical full-time equivalent employees decreased 8% to 967 for 2024 as compared to 1,047 for 2023.
Previous wording
FISCAL YEARS ENDED December 29, 2023 ANDDecember 30, 2022
Current wording
FISCAL YEARS ENDED January 3, 2025 ANDDecember 29, 2023
Previous wording
The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billable hours and an increase in billing rates. Growth in this segment during 2023 was primary driven by demand for our services across the transportation and energy sectors. During 2023, billable hours for this segment increased by 3% to 1,188,000 as compared to 1,153,000 during 2022. Utilization for this segment decreased to 70% for 2023 as compared to 75% for 2022 due to an increase in technical full-time equivalent employees. Technical full-time equivalent employees in this segment increased 11% to 818 during 2023 as compared to 736 for 2022.
Current wording
The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billing rates and an increase in billable hours. Growth in this segment during 2024 was primary driven by demand for our services across the consumer products and utilities industries. In the consumer electronics sector we advised clients on projects related to digital health and wearables, such as advanced sensors in health applications and engagements in augmented and virtual reality. During 2024, billable hours for this segment increased by 1% to 1,199,000 as compared to 1,188,000 during 2023. Utilization for this segment increased to 75% for 2024 as compared to 70% for 2023 due to our continued efforts to align resources with demand. Technical full-time equivalent employees in this segment decreased 7% to 759 during 2024 as compared to 818 for 2023.
Previous wording
The increase in revenues from our Environmental and Health segment was due to an increase in billing rates offset by a decrease in billable hours. Growth in this segment during 2023 was primarily driven by safety-related work evaluating the impacts of chemicals on human health and the environment. During 2023, billable hours for this segment decreased by 2% to 307,000 as compared to 312,000 during 2022. Utilization for this segment decreased to 64% for 2023 as compared to 69% for 2022. Technical full-time equivalents increased 5% to 229 during 2023 as compared to 219 for 2022. The decrease in utilization was due to the 5% increase in technical full-time equivalent employees.
Current wording
The decrease in revenues from our Environmental and Health segment was due to a decrease in billable hours partially offset by an increase in billing rates. During 2024, billable hours for this segment decreased by 4% to 296,000 as compared to 307,000 during 2023. The decrease in billable hours was related to headwinds in the chemical and life sciences sectors. Utilization for this segment increased to 67% for 2024 as compared to 64% for 2023 due to our continued efforts to align resources with demand. Technical full-time equivalents decreased 9% to 208 during 2024 as compared to 229 for 2023.
Previous wording
Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements. The increase in other operating expenses was primarily due to an increase in occupancy expense of $2,037,000, an increase in depreciation expense of $1,837,000 and an increase in information technology related expenses of $1,715,000. The increase in occupancy expenses was due to growth in technical full-time equivalent employees and the transition back to our offices from a remote work environment. The increases in depreciation and information technology related expenses were due to continued investment in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent and continue to make investments in our corporate infrastructure.
Current wording
Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements. The increase in other operating expenses was primarily due to an increase in occupancy expense of $3,437,000, an increase in information technology related expenses of $839,000 and an increase in depreciation expense of $773,000. Our land lease with the State of Arizona was extended on June 19, 2024. This extension resulted in additional non-cash rent expense of approximately $2,316,000 during 2024. The remainder of the increase in occupancy expense was due to investments in our office and laboratory facilities. The increases in depreciation and information technology related expenses were due to continued investment in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent and continue to make investments in our corporate infrastructure.
Previous wording
The amount of reimbursable expenses will vary from year to year depending on the nature of our projects. The decrease in reimbursable expenses as compared to 2022 was due to a decrease in proactive projects for the consumer electronics sector.
Current wording
The amount of reimbursable expenses will vary from year to year depending on the nature of our projects. The increase in reimbursable expenses as compared to 2023 was due to an increase in proactive projects for the consumer electronics sector.
Previous wording
The increase in operating income for our Engineering and Other Scientific segment during 2023 as compared to 2022 was due to an increase in revenues, partially offset by an increase in expenses. The increase in revenues was due to an increase in billable hours and an increase in billing rates. Growth was driven by demand for our services across the transportation and energy sectors. The increase in expenses was due to an 11% increase in technical full-time equivalent employees and investments in our corporate infrastructure.
Current wording
The increase in operating income for our Engineering and Other Scientific segment during 2024 as compared to 2023 was due to an increase in revenues and an increase in utilization. The increase in revenues was due to an increase in billing rates and an increase in billable hours driven by demand for our services across the consumer products and utilities industries. The increase in utilization was due to our efforts to align resources with demand. The increase in operating income for our Environmental and Health segment was due to an increase in utilization due to our efforts to align resources with demand.
Previous wording
Certain operating expenses are excluded from our measure of segment operating income. These expenses include the costs associated with our human resources, finance, information technology, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with our deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in our allowance for contract losses and doubtful accounts.
Current wording
Certain operating expenses are excluded from our measure of segment operating income. These expenses include the costs associated with our human resources, finance, information technology, corporate, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with our deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in our allowance for contract losses and doubtful accounts. The increase in corporate operating expenses was due to an increase in stock-based compensation and an increase in the provision for contract losses and doubtful accounts.
Previous wording
Other income consists primarily of interest income earned on available cash, cash equivalents and short-term investments, changes in the value of assets associated with our deferred compensation plan and rental income from leasing excess space in our Silicon Valley and Natick facilities. The increase in other income was primarily due to the change in value of assets associated with our deferred compensation plan and a change in the realized gain and loss on foreign exchange partially offset by an increase in interest income and an increase in rental income.
Current wording
Other income, net consists primarily of changes in the value of assets associated with our deferred compensation plan, interest income earned on available cash, cash equivalents and short-term investments, and rental income from leasing space in our Silicon Valley and Natick facilities. The increase in other income, net was primarily due to an increase in interest income of $2,851,000 due to an increase in cash and cash equivalents.
Previous wording
The increase in our effective tax rate was due to a decrease in the excess tax benefit associated with stock-based awards. The excess tax benefit associated with stock-based awards decreased to $3,620,000 during 2023 as compared to $5,829,000 during 2022. The decrease in the excess tax benefit was due to a smaller increase in the value of our common stock between the grant date and the release date for the restricted stock units released in 2023 as compared to restricted stock units released in 2022. Excluding the impact of the excess tax benefit, the effective tax rate would have been 28.8% and 27.0% for 2023 and 2022, respectively. The increase in our effective tax rate, excluding the impact of the excess tax benefit, was primarily due to the re-measurement of our deferred tax assets in connection with relocating one of our offices to a location designated as tax exempt for all state and local taxes and a decrease in our foreign rate benefit.
Current wording
The excess tax benefit associated with stock-based awards decreased to $2,793,000 during 2024 as compared to $3,620,000 during 2023. The decrease in the excess tax benefit was due to a smaller increase in the value of our common stock between the grant date and the release date for the restricted stock units released in 2024 as compared to restricted stock units released in 2023. Excluding the impact of the excess tax benefit, the effective tax rate would have been 27.9% and 28.8% for 2024 and 2023, respectively. The decrease in our effective tax rate, excluding the impact of the excess tax benefit, was primarily due to a re-measurement that reduced the value of our deferred tax assets in connection with relocating one of our offices to a location designated as tax exempt for all state and local taxes during 2023.
Previous wording
We financed our business in 2023 through available cash and cash flows from operating activities. We invest our excess cash in cash equivalents. As of December 29, 2023, our cash and cash equivalents were $187,150,000 as compared to $161,458,000 at December 30, 2022. We believe our existing balances of cash and cash equivalents will be sufficient to satisfy our working capital needs, capital expenditures, outstanding commitments, stock repurchases, dividends and other liquidity requirements over at least the next 12 months.
Current wording
We financed our business in 2024 through available cash and cash flows from operating activities. We invest our excess cash in cash equivalents. As of January 3, 2025, our cash and cash equivalents were $258,901,000 as compared to $187,150,000 at December 29, 2023. We believe our existing balances of cash and cash equivalents will be sufficient to satisfy our working capital needs, capital expenditures, outstanding commitments, stock repurchases, dividends and other liquidity requirements over at least the next 12 months.
Previous wording
Generally, our net cash provided by operating activities is used to fund our day-to-day operating activities. First quarter operating cash requirements are generally higher due to payment of our annual bonuses accrued during the prior year. Our largest source of operating cash flows is cash collections from our clients. Our primary uses of cash from operating activities are for employee-related expenditures, leased facilities, taxes, and general operating expenses.
Current wording
Generally, our net cash provided by operating activities is used to fund our day to day operating activities. First quarter operating cash requirements are generally higher due to payment in the first quarter of our annual bonuses accrued during the prior year. Our largest source of operating cash flows is collections from our clients. Our primary uses of cash from operating activities are for employee related expenditures, leased facilities, taxes, and general operating expenses.
Previous wording
The increase in net cash used in investing activities during 2023 as compared to 2022 was due to an increase in capital expenditures primarily due to leasehold improvements associated with our new operating lease for office and lab space in Philadelphia.
Current wording
The decrease in net cash used in investing activities during 2024 as compared to 2023 was due to a decrease in capital expenditures primarily due to leasehold improvements during 2023 associated with our office and lab space in Philadelphia.
Previous wording
The decrease in net cash used in financing activities during 2023 as compared to 2022 was primarily due to a decrease in repurchases of our common stock and a reduction in payroll taxes for restricted stock units, partially offset by an increase in our quarterly dividend payment.
Current wording
The decrease in net cash used in financing activities during 2024 as compared to 2023 was primarily due to a decrease in repurchases of our common stock, a reduction in payroll taxes for restricted stock units, and an increase in exercise of stock-based payment awards, partially offset by an increase in dividends.
Previous wording
We lease office, laboratory, and storage space in 13 states and the District of Columbia, as well as in China, Germany, Hong Kong, Ireland, Singapore, Switzerland, and the United Kingdom under non-cancellable operating lease arrangements that expire at various dates through 2033. As of December 29, 2023, the value of our obligations under operating leases was $28,261,000. See Note 12 of our Notes to Consolidated Financial Statements for additional information regarding our lease obligations. The value of our non-cancellable unconditional purchase obligations was not material at December 29, 2023.
Current wording
We lease office, laboratory, and storage space in 13 states and the District of Columbia, as well as in China, Germany, Hong Kong, Ireland, Singapore, Switzerland, and the United Kingdom under non-cancellable operating lease arrangements that expire at various dates through 2033. On June 19, 2024, we entered into an agreement with the State of Arizona to extend our land lease for 15 years beginning on January 17, 2028. We are currently obligated to make payments under the lease of $1,009,000 per year, which obligation will continue at that level until January 16, 2028. Beginning on January 17, 2028, our payments under the lease will increase to approximately $6,183,000 per year for the 15-year extension term with adjustments to the annual rent payment in 2033 and 2038 based on the consumer price index. As a result of this extension, we added an additional right-of-use asset in exchange for an operating lease liability of $48,683,000 during the second quarter of 2024. As of January 3, 2025, the value of our obligations under operating leases was $81,477,000. See Note 12 of our Notes to Consolidated Financial Statements for additional information regarding our lease obligations. The value of our non-cancellable unconditional purchase obligations was not material at January 3, 2025.
Previous wording
We maintain nonqualified deferred compensation plans for the benefit of a select group of highly compensated employees. Vested amounts due under the plans of $103,398,000 were recorded as a long-term liability on our consolidated balance sheet at December 29, 2023. Vested amounts due under the plans of $13,166,000 were recorded as a current liability on our consolidated balance sheet at December 29, 2023. Company assets that are designated to fund the benefits under the plans are held in a rabbi trust and are subject to the claims of our creditors. As of December 29, 2023, invested amounts under the plans of $101,169,000 were recorded as a non-current asset on our consolidated balance sheet. As of December 29, 2023, invested amounts under the plans of $14,018,000 were recorded as other current assets on our consolidated balance sheet.
Current wording
We maintain nonqualified deferred compensation plans for the benefit of a select group of highly compensated employees. Vested amounts due under the plans of $112,646,000 were recorded as a long-term liability on our consolidated balance sheet at January 3, 2025. Vested amounts due under the plans of $14,976,000 were recorded as a current liability on our consolidated balance sheet at January 3, 2025. Company assets that are designated to fund the benefits under the plans are held in a rabbi trust and are subject to the claims of our creditors. As of January 3, 2025, invested amounts under the plans of $110,259,000 were recorded as a non-current asset on our consolidated balance sheet. As of January 3, 2025, invested amounts under the plans of $17,578,000 were recorded as other current assets on our consolidated balance sheet.
Previous wording
The decrease in EBITDA as a percentage of revenues before reimbursements during 2023 as compared to 2022 was primarily due to the decrease in utilization and an increase in other operating expenses. Our utilization decreased to 69% during 2023 as compared to 74% during 2022. The decrease in utilization was due to a 10% increase in technical full-time equivalent employees and historically strong utilization during 2022. Other operating expenses increased during 2023 due to an increase in technical full-time equivalent employees and investments in our corporate infrastructure.
Current wording
The increase in EBITDA as a percentage of revenues before reimbursements during 2024 as compared to 2023 was primarily due to the increase in utilization and a decrease in general and administrative expenses, partially offset by an increase in other operating expenses. Our utilization increased to 73% during 2024 as compared to 69% during 2023. The increase in utilization was due to demand for proactive services in the consumer electronics and utilities industries, demand for reactive services in the utilities and medical device industries and our efforts to align resources with demand.