CRA INTERNATIONAL, INC.

Previous wording

Except for historical facts, the statements in this quarterly report are forward-looking statements. Forward-looking statements are merely our current predictions of future events. These statements are inherently uncertain, and actual events could differ materially from our predictions. Important factors that could cause actual events to vary from our predictions include those discussed below under the heading “Risk Factors.” We assume no obligation to update our forward-looking statements to reflect new information or developments. We urge readers to review carefully the risk factors described in the other documents that we file with the SEC. You can read these documents at www.sec.gov.

Current wording

Except for historical facts, the statements in this quarterly report are forward-looking statements. Forward-looking statements are merely our current predictions of future events. These statements are inherently uncertain, and actual events could differ materially from our predictions. Important factors that could cause actual events to vary from our predictions include those discussed below under the heading “Risk Factors.” We assume no obligation to update our forward-looking statements to reflect new information or developments. We urge readers to review carefully the risk factors described in the other documents that we file with the SEC. The SEC maintains a website that contains these documents, reports, proxy statements, information statements, and other information regarding issuers, such as us, that file electronically with the SEC at https://www.sec.gov.

Previous wording

Results of Operations—For the Fiscal Quarter and Fiscal Year-to-Date Period Ended September 27, 2025, Compared to the Fiscal Quarter and Fiscal Year-to-Date Period Ended September 28, 2024

Current wording

Results of Operations—For the Fiscal Quarter Ended April 4, 2026, Compared to the Fiscal Quarter Ended March 29, 2025

Previous wording

Revenues. Revenues increased by $18.2 million, or 10.8%, to $185.9 million for the third quarter of fiscal 2025 from $167.7 million for the third quarter of fiscal 2024. Utilization increased to 77% for the third quarter of fiscal 2025 from 76% for the third quarter of fiscal 2024, while consultant headcount decreased to 968 at the end of the third quarter of fiscal 2025 from 978 at the end of the third quarter of fiscal 2024.

Current wording

Revenues. Revenues increased by $19.1 million, or 10.5%, to $201.0 million for the first quarter of fiscal 2026 from $181.9 million for the first quarter of fiscal 2025. Utilization increased to 77% for the first quarter of fiscal 2026 from 76% for the first quarter of fiscal 2025, while consultant headcount increased to 971 at the end of the first quarter of fiscal 2026 from 947 at the end of the first quarter of fiscal 2025.

Previous wording

Overall, revenues outside of the U.S. represented approximately 21% and 19% of net revenues for each of the third quarters of fiscal 2025 and fiscal 2024, respectively. Revenues derived from fixed-price projects decreased to 17% of net revenues for the third quarter of fiscal 2025 compared to 18% of net revenues for the third quarter of fiscal 2024. The percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

Current wording

Overall, revenues outside of the U.S. represented approximately 20% and 18% of net revenues for each of the first quarters of fiscal 2026 and fiscal 2025, respectively. Revenues derived from fixed-price projects increased to 18% of net revenues for the first quarter of fiscal 2026 compared to 17% of net revenues for the first quarter of fiscal 2025. The percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

Previous wording

Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $16.3 million, or 14.1%, to $131.5 million for the third quarter of fiscal 2025 from $115.2 million for the third quarter of fiscal 2024. The increase in costs of services was due to an increase in employee and incentive compensation of $11.8 million, an increase in forgivable loan amortization of $2.3 million, and an increase in client reimbursable indirect project expenses of $2.2 million. As a percentage of revenues, costs of services (exclusive of depreciation and amortization) increased to 70.7% for the third quarter of fiscal 2025 from 68.7% for the third quarter of fiscal 2024.

Current wording

Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $24.6 million, or 20.4%, to $145.0 million for the first quarter of fiscal 2026 from $120.4 million for the first quarter of fiscal 2025. The increase in costs of services was due to an increase in employee and incentive compensation of $11.8 million, an increase in forgivable loan amortization, including performance award amortization of $10.2 million, and an increase in indirect project expenses of $2.6 million. As a percentage of revenues, costs of services (exclusive of depreciation and amortization) increased to 72.2% for the first quarter of fiscal 2026 from 66.2% for the first quarter of fiscal 2025.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $2.4 million, or 7.7%, to $33.7 million for the third quarter of fiscal 2025 from $31.3 million for the third quarter of fiscal 2024. Within this category of expenses, there was a $1.2 million increase in legal and professional service fees, a $0.7 million increase in employee and incentive compensation, a $0.6 million increase in travel and entertainment, a $0.3 million increase in rent expense, a $0.2 million increase in miscellaneous and other fees, partially offset by a $0.6 million decrease in commissions to non-employee experts for the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $2.0 million, or 6.2%, to $34.5 million for the first quarter of fiscal 2026 from $32.5 million for the first quarter of fiscal 2025. Within this category of expenses, there was a $1.0 million increase in employee and incentive compensation, a $0.7 million increase in travel and entertainment, a $0.5 million increase in legal and professional service fees, a $0.3 million increase in rent expense, and a $0.3 million increase in miscellaneous and other fees, partially offset by a $0.8 million decrease in commissions to non-employee experts for the first quarter of fiscal 2026 as compared to the first quarter of fiscal 2025.

Previous wording

As a percentage of revenues, selling, general and administrative expenses decreased to 18.1% for the third quarter of fiscal 2025 from 18.6% for the third quarter of fiscal 2024. Commissions to our non-employee experts decreased to 1.8% of revenues for the third quarter of fiscal 2025 compared to 2.4% of revenues for the third quarter of fiscal 2024.

Current wording

As a percentage of revenues, selling, general and administrative expenses decreased to 17.2% for the first quarter of fiscal 2026 from 17.9% for the first quarter of fiscal 2025. Commissions to our non-employee experts decreased to 1.5% of revenues for the first quarter of fiscal 2026 compared to 2.0% of revenues for the first quarter of fiscal 2025.

Previous wording

Provision for Income Taxes. The income tax provision was $4.8 million and the ETR was 29.3% for the third quarter of fiscal 2025 compared to $4.6 million and 28.7% for the third quarter of fiscal 2024. The ETR for the third quarter of fiscal 2025 was higher than the third quarter of fiscal 2024 primarily due to a decreased benefit related to share-based compensation, a remeasurement of deferred tax assets related to changes in current-year state apportionment, and an increase to a prior year tax reserve. The increase was partially offset by the impact of state tax law changes effective for fiscal 2025. The ETR for the third quarter of fiscal 2025 and 2024 were both higher than the combined federal and state statutory tax rate primarily due to nondeductible executive compensation and nondeductible meals and entertainment expenses, partially offset by the tax benefit related to share-based compensation and the Foreign-Derived Intangible Income (“FDII”) deduction.

Current wording

Provision for Income Taxes. The income tax provision was $6.3 million and the ETR was 36.0% for the first quarter of fiscal 2026 compared to $6.6 million and 27.0% for the first quarter of fiscal 2025. The ETR for the fiscal quarter ended April 4, 2026 was higher than the fiscal quarter ended March 29, 2025 primarily due to an increase in nondeductible executive compensation, the recording of a valuation allowance in a foreign jurisdiction, and a decrease in tax benefit related to share-based compensation, partially offset by a decrease to a prior year tax reserve. The ETR for the first quarters of fiscal 2026 and 2025 were both higher than the combined federal and state statutory tax rate primarily due to nondeductible executive compensation and nondeductible meals and entertainment expenses, partially offset by the tax benefit related to share-based compensation and the Foreign-Derived Deduction Eligible Income deduction. Specific to the current quarter, the ETR was also higher due to the recording of a valuation allowance in a foreign jurisdiction.

Previous wording

Net Income. Net income remained relatively unchanged at $11.5 million for the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024. The net income per diluted share was $1.73 per share for the third quarter of fiscal 2025, compared to $1.67 of net income per diluted share for the third quarter of fiscal 2024. Weighted average diluted shares outstanding decreased by approximately 222,000 shares to approximately 6,621,000 shares for the third quarter of fiscal 2025 from approximately 6,843,000 shares for the third quarter of fiscal 2024. The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since September 28, 2024, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units since September 28, 2024.

Current wording

Net Income. Net income decreased to $11.1 million for the first quarter of fiscal 2026 from $18.0 million for the first quarter of fiscal 2025. The net income per diluted share was $1.69 per share for the first quarter of fiscal 2026, compared to $2.62 for the first quarter of fiscal 2025. Weighted average diluted shares outstanding decreased by approximately 274,000 shares to approximately 6,588,000 shares for the first quarter of fiscal 2026 from approximately 6,862,000 shares for the first quarter of fiscal 2025. The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since March 29, 2025, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units since March 29, 2025.

Previous wording

We believe that our current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As of September 27, 2025, we had $22.5 million of cash and cash equivalents and $101.1 million of borrowing capacity under our revolving credit facility.

Current wording

We believe that our current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As of April 4, 2026, we had $32.5 million of cash and cash equivalents and $54.2 million of borrowing capacity under our revolving credit facility.

Previous wording

General. During the fiscal year-to-date period ended September 27, 2025, cash and cash equivalents decreased by $4.2 million. We completed the period with cash and cash equivalents of $22.5 million. The principal drivers of the decrease of cash and cash equivalents were the payment of a significant portion of our fiscal 2024 performance bonuses in the first quarter of fiscal 2025, forgivable loan advances, repurchase of shares, and the payment of dividends, offset by net borrowings of $95.0 million.

Current wording

General. During the fiscal quarter ended April 4, 2026, cash and cash equivalents increased by $14.3 million. We completed the period with cash and cash equivalents of $32.5 million. The principal drivers of the increase in cash and cash equivalents were net borrowings of $158.0 million, offset by the payment of a significant portion of our fiscal 2025 performance bonuses in the first quarter of fiscal 2026, forgivable loan advances, repurchase of shares, and the payment of dividends.

Previous wording

At September 27, 2025, $2.5 million of our cash and cash equivalents was held within the U.S. We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility to fund U.S. operations for the next 12 months without the need to repatriate funds from our foreign subsidiaries.

Current wording

At April 4, 2026, $5.6 million of our cash and cash equivalents was held within the U.S. We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility to fund U.S. operations for the next 12 months without the need to repatriate funds from our foreign subsidiaries.

Previous wording

Sources and Uses of Cash. During the fiscal year-to-date period ended September 27, 2025, net cash used in operating activities was $37.6 million. Net income was $41.6 million for the fiscal year-to-date period ended September 27, 2025. Uses of cash for operating activities included an increase in forgivable loans for the period of $45.8 million which was primarily driven by $68.4 million of forgivable loan issuances, net of repayments, offset by $22.6 million of forgivable loan amortization, a decrease in accounts payable, accrued expenses, and other liabilities of $35.6 million, primarily due to the payment of a significant portion of our fiscal 2024 performance bonuses, an increase of $32.8 million in unbilled receivables, and a $14.2 million decrease in lease liabilities. Partially offsetting these uses of cash was a decrease of $12.6 million in accounts receivable, an increase of $8.9 million in incentive cash awards payable, and a $1.6 million decrease in prepaid expenses, other current assets, and other assets.

Current wording

Sources and Uses of Cash. During the fiscal quarter ended April 4, 2026, net cash used in operating activities was $113.9 million. Net income was $11.1 million for the fiscal quarter ended April 4, 2026. Uses of cash for operating activities included a decrease in accounts payable, accrued expenses, and other liabilities of $91.2 million, primarily due to the payment of a significant portion of our fiscal 2025 performance bonuses, an increase in forgivable loans for the period of $52.6 million which was primarily driven by $62.3 million of forgivable loan issuances, net of repayments, offset by $9.7 million of forgivable loan amortization, an increase of $27.0 million in unbilled receivables, a $4.8 million decrease in lease liabilities, and a $4.3 million increase in prepaid expenses and other current assets, and other assets. Partially offsetting these uses of cash was a decrease of $41.7 million in accounts receivable and an increase of $3.2 million in incentive cash awards payable.

Previous wording

Non-cash items included right-of-use amortization of $11.6 million, depreciation and amortization expense of $10.4 million, and share-based compensation expenses of $3.9 million, and unrealized foreign currency remeasurement losses, net of $0.3 million.

Current wording

Non-cash items included right-of-use amortization of $3.7 million, depreciation and amortization expense of $3.4 million, share-based compensation expenses of $1.4 million, and unrealized foreign currency remeasurement losses, net of $0.3 million.

Previous wording

During the fiscal year-to-date period ended September 27, 2025, net cash used in investing activities was $2.8 million, which consisted of capital expenditures, primarily related to computer equipment.

Current wording

During the fiscal quarter ended April 4, 2026, net cash used in investing activities was $2.6 million, which consisted of capital expenditures, primarily related to computer equipment.

Previous wording

During the fiscal year-to-date period ended September 27, 2025, net cash provided by financing activities was $34.9 million, primarily as a result of net borrowings under the revolving credit facility of $95.0 million. Offsetting this increase in cash provided by financing activities were repurchases of common stock of $47.1 million, payment of cash dividends and dividend equivalents of $10.1 million, and tax withholding payments reimbursed by restricted shares on vesting of $2.9 million.

Current wording

During the fiscal quarter ended April 4, 2026, net cash provided by financing activities was $131.3 million, primarily as a result of net borrowings under the revolving credit facility of $158.0 million. Offsetting this increase in cash provided by financing activities were repurchases of common stock of $21.5 million, payment of cash dividends and dividend equivalents of $3.8 million, and tax withholding payments reimbursed by restricted shares on vesting of $1.4 million.

Previous wording

CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides CRA with a $250.0 million revolving credit facility, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million. The revolving credit facility includes a $25.0 million sublimit for the issuance of letters of credit.

Current wording

CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides CRA with a $250.0 million revolving credit facility, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million. The revolving credit facility includes a $25.0 million sublimit for the issuance of letters of credit. On May 4, 2026, the Credit Agreement was amended and restated to increase the capacity of the revolving credit facility by $50.0 million to $300.0 million. The expanded facility will continue to provide financial flexibility to support our continued growth and working capital needs.

Previous wording

Under the Credit Agreement, we must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1 and a minimum consolidated interest coverage ratio of 2.5 to 1. The primary non-financial covenants include, but are not limited to, restrictions on our ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including our failure to pay principal, interest or fees, or upon the breach of any covenant. As of September 27, 2025, we were in compliance with the covenants of the Credit Agreement.

Current wording

Under the Credit Agreement, we must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1.0 and a minimum consolidated interest coverage ratio of 2.5 to 1.0. The primary non-financial covenants include, but are not limited to, restrictions on our ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including our failure to pay principal, interest or fees, or upon the breach of any covenant. As of April 4, 2026, we were in compliance with the covenants of the Credit Agreement.

Previous wording

There was $95.0 million in borrowings outstanding under the revolving credit facility as of September 27, 2025 and no borrowings outstanding as of December 28, 2024. As of September 27, 2025, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $3.9 million.

Current wording

There were $192.0 million and $34.0 million in borrowings outstanding under the revolving credit facility as of April 4, 2026 and January 3, 2026, respectively. The amounts available under the revolving credit facility were reduced by certain letters of credit outstanding, which amounted to $3.8 million, as of both April 4, 2026 and January 3, 2026. CRA has chosen to classify the revolver as a current liability in its condensed consolidated balance sheet, as CRA has the intent to repay the amount within 12 months after the balance sheet date.

Previous wording

In February 2025, we announced that our Board of Directors authorized an expansion of our existing share repurchase program of an additional $45.0 million of our common stock to the $13.1 million then remaining under the program. The program has no expiration date. We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.

Current wording

In February 2026, we announced that our Board of Directors authorized an expansion to our existing share repurchase program by an additional $55.0 million of our common stock, in addition to the $10.9 million then remaining under the program. The program has no expiration date. We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.

Previous wording

During the fiscal quarter and the fiscal year-to-date period ended September 27, 2025, we repurchased and retired 21,532 and 252,205, respectively, under our share repurchase program at an average price per share of $185.74 and $186.95, respectively. During the fiscal quarter ended September 28, 2024, we did not repurchase any shares under our share repurchase program. For the fiscal year-to-date period ended September 28, 2024, we repurchased and retired 206,379 shares under our share repurchase program at an average price per share $161.59. We had approximately $10.9 million available for future repurchases under our share repurchase program as of September 27, 2025. We plan to finance future repurchases with available cash, cash from future operations, and borrowings available under our revolving credit facility. We expect to continue to repurchase shares under our share repurchase program.

Current wording

During the fiscal quarter ended April 4, 2026, we repurchased and retired 116,040 shares under our share repurchase program at an average price per share of $184.96. We had approximately $44.5 million available for future repurchases under our share repurchase program as of April 4, 2026. We plan to finance future repurchases with available cash, cash from future operations, and borrowings available under our revolving credit facility. We expect to continue to repurchase shares under our share repurchase program.

Previous wording

We anticipate paying regular quarterly dividends each year. These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings available under our revolving credit facility. Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors. During the fiscal quarter and fiscal year-to-date period ended September 27, 2025, we paid dividends and dividend equivalents of $3.2 million and $10.1 million, respectively. During the fiscal quarter and fiscal year-to-date period ended September 28, 2024, we paid dividends and dividend equivalents of $2.9 million and $8.9 million, respectively.

Current wording

We anticipate paying regular quarterly dividends each year. These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings available under our revolving credit facility. Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors. During the fiscal quarters ended April 4, 2026 and March 29, 2025, we paid dividends and dividend equivalents of $3.8 million and $3.5 million, respectively.

Previous wording

Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this report, as well as a description of material risks we face, are set forth below under the heading “Risk Factors” and included in Part I, Item 1A, “Risk Factors” of our 2024 Form 10-K. If any of these risks, or any risks not presently known to us or that we currently believe are not significant, develops into an actual event, then our business, financial condition, and results of operations could be adversely affected.

Current wording

Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this report, as well as a description of material risks we face, are set forth below under the heading “Risk Factors” and included in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 3, 2026. If any of these risks, or any risks not presently known to us or that we currently believe are not significant, develops into an actual event, then our business, financial condition, and results of operations could be adversely affected.