FTIコンサルティング（FCN）2026年第3四半期決算説明会：過去最高の売上高と経済コンサルティングの回復

主要なポイント

• FTIコンサルティングが発表した四半期売上高は前年同期比6%増の10億ドルを超え、過去最高を記録しました。全5つの事業セグメントすべてで成長を達成しました。
• 調整後EBITDAは18%増の1億5,370万ドルとなり、調整後EBITDA利益率は150ベーシスポイント拡大して15.2%となりました。
• 調整後EPSは48%増の3.84ドルと過去最高に達しました。GAAPベースのEPSは、4,600万ドルの特別費用および450万ドルの臨時訴訟関連費用を計上した結果、2.35ドルとなりました。
• コーポレート・ファイナンス＆リストラクチャリング部門は、4,070万ドルという過去最高の成功報酬を計上しました。経営陣は、これらの成功報酬やその他のいくつかの好要因により、当四半期は例外的に好調な業績となったと注意を促しました。
• 経済コンサルティング部門は前年同期比9%増収となり、プラス成長に復帰しました。セグメント調整後EBITDAは1,850万ドル増加しました。経営陣は、同セグメントが過去5四半期にわたって見られた大幅な業績の重荷ではなくなったと述べました。
• FTIコンサルティングは2026年の売上高見通しを39億4,000万ドル〜41億ドルに据え置き、調整後EPSの見通しを9.50ドル〜10.00ドルと予想しています。

主要財務データ

4,600万ドルの特別費用には、特定の人員削減措置に伴う給与および福利厚生関連費用4,550万ドルと、非現金不動産費用50万ドルが含まれます。この費用によりGAAP EPSは1.36ドル押し下げられました。また、臨時訴訟関連費用によりGAAP EPSはさらに0.13ドル押し下げられました。

経営陣の試算によると、成功報酬、低い税率、その他の好要因を標準化した場合でも、当四半期のEPSは過去4四半期の平均調整後EPS（2ドル台前半）に対し、約2.90ドルとなっていたとのことです。

事業および業績の動向

コーポレート・ファイナンス＆リストラクチャリング： 成功報酬の増加と実現請求単価の上昇に支えられ、売上高は5%増加しました。セグメント調整後EBITDAは7%増の1億280万ドルと過去最高を記録しました。成功報酬は4,070万ドルに達し、これにはボストン連邦準備銀行によるローンポートフォリオ売却に伴う大口報酬が含まれています。トランザクション売上高は13%増加、トランスフォーメーション売上高は7%増加、事業再生・リストラクチャリング売上高は請求単価の上昇が案件数の減少で相殺され1%減少しました。

フォレンジック＆リティゲーション・コンサルティング： 規制当局による取締活動の減少を反映し、リスク＆調査やデータ＆アナリティクスの取扱規模が低迷したものの、同セグメントは過去最高の売上高を達成しました。過去最高の実現請求単価が成長を下支えしました。セグメント調整後EBITDAは3,800万ドルとなり、訴訟関連の特別利益を計上した前年同期の4,260万ドルから減少しました。

経済コンサルティング： 北米およびEMEAにおけるM&A関連および非M&A関連の独占禁止法サービスの需要増加に牽引され、売上高は9%増加しました。セグメント調整後EBITDAは前年同期比で1,850万ドル増加しました。経営陣は、コンパス・レクセコンの混乱による影響について、過去5四半期に見られた前年同期比で平均四半期あたり約2,200万ドルの重荷は消失したと述べましたが、過去の収益性水準への回復には数年かかる可能性があるとしています。

テクノロジー： 北米、EMEA、アジア太平洋地域全体でM&A関連のセカンド・リクエスト（第二次審査）および反トラスト（独占禁止法）サービスの需要が堅調だったことを反映し、売上高は10%増加しました。セグメント調整後EBITDAは240万ドル増加し、利益率は100ベーシスポイント改善して15.5%となりました。

ストラテジック・コミュニケーション： パブリック・アフェアーズおよびコーポレート・レピュテーション関連サービスが牽引し、売上高は13%増加しました。年初来の売上高は9%増加し、パススルー売上高を除くと13%増加しました。セグメント調整後EBITDAは26%増加し、利益率は20%となりました。経営陣は、危機対応、サイバーセキュリティ、M&A、アクティビズム、AI関連のコミュニケーションリスクに関連する需要を強調しました。

業績予想・見通し

GAAPベースのEPSと調整後EPSの乖離は、第3および第4四半期の特別費用による1株あたり1.55ドルの影響と、臨時訴訟関連費用による1株あたり0.40ドルの影響を見込んでいることを反映しています。

FTIコンサルティングは、第4四半期に約700万ドルの追加特別費用を見込んでおり、その内訳は約200万ドルの給与・福利厚生費用と500万ドルの不動産費用です。経営陣は、第3および第4四半期の措置により、第4四半期での約1,500万ドルの効果を含め、年間で約8,000万ドルのコスト削減効果が生じると予想しています。

経営陣は、第3四半期に売上高の増加や一時的な要因の恩恵を受けたことから、第4四半期の経済コンサルティング部門の調整後セグメントEBITDAは第2四半期の水準に近づくと予想しています。また、例年通りの第4四半期の季節要因に加え、リストラクチャリング、M&A関連業務、規制取締活動における短期的な案件取扱規模の圧力が継続すると見込んでいます。

リスクおよび注視事項

• 第3四半期は、過去最高の成功報酬、好適な税務調整、貸倒損失の減少、時期要因、経済コンサルティングにおける一時的な利益などの恩恵を受けました。経営陣は、これらの要因すべてが再発するわけではないと考えています。
• リストラクチャリング需要は依然として区々であり、FTIコンサルティングはシェアを拡大していると見ているものの、経営陣は短期的には同様に低調な需要が続くと見込んでいます。
• 第3四半期は公表されたM&A件数が顕著に減速しており、トランザクション関連業務やセカンド・リクエスト（第二次審査）業務に不透明感をもたらしています。
• フォレンジック＆リティゲーション・コンサルティング部門は、現米政権下での規制取締活動の減少に直面しており、さらに第3四半期にいくつかの大型案件が終了したことが追い打ちをかけています。
• 経済コンサルティング部門の回復は緩やかなものになると見込まれています。経営陣は、人材投資や減免可能ローンが十分な生産性に達するまでに数年かかる可能性があると述べました。
• 特定の人員整理措置は、中東、英国、EMEAの一部およびアジア太平洋におけるトランスフォーメーションと戦略イニシアチブ、主に米国外の建設ソリューションなど、環境や事業性が変化した市場および投資領域に集中して実施されました。

アナリスト質疑応答のハイライト

収益の質： 経営陣は、リストラクチャリング費用および臨時訴訟費用を一回限りの非定常的なものと説明しました。スティーブ・ガンビーCEOは、新たな異例の項目が生じない限り、来期のGAAP利益と調整後利益が乖離する理由はないと述べました。

経済コンサルティングの回復： 経営陣は、同セグメントが過去の年間調整後EBITDA水準である約1億ドル〜1億1,000万ドルへ即座に回復すると想定しないよう注意を促しました。予想される軌道は、5年に及ぶ可能性もある数年かけたゆるやかな回復です。

減免可能ローン： 経営陣は、2026年の減免可能ローンの償却額を約5,000万ドルと試算しました。採用環境や競合機会に変化がない限り、2027年の初期前提として同程度の金額を使用することは妥当であると説明されました。

コスト削減策： 同社は、人員削減は通常の景気循環的な悪化に対応したものではないと述べました。そうではなく、十分な改善の道筋が見込めないと経営陣が判断した投資、競合上の優位性、および地域に対処したものです。従業員の約4%が対象となりました。

FLCの成長機会： 経営陣は、プライベート・クレジットの不正調査や、AI関連の規制・訴訟業務を機会領域として挙げました。しかし、これらの成長要因は現在、低迷している従来の米国規制取締需要と共存しています。

第4四半期の収益動向： 経営陣は、投資家に対し、第4四半期の見通しを報告済みの調整後EPSである3.84ドルではなく、標準化された第3四半期のEPS約2.90ドルと比較すべきだと述べました。また、第4四半期は歴史的に第3四半期よりも季節的に低調であることを付言しました。

決算説明会 文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Welcome to the FTI Consulting Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Mollie Hawkes, Head of Investor Relations. Please go ahead.

Mollie Hawkes

Good morning. Welcome to the FTI Consulting conference call to discuss the company's third quarter 2026 earnings results as reported this morning. Management will begin with formal remarks, after which they will take your questions. Before we begin, I would like to remind everyone that the fence call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act including the company's outlook and expectations for the full year 2026 based on management's current beliefs and expectations.

These forward-looking statements involve many risks and uncertainties assumptions and estimates and other factors that could cause actual results to differ materially from such statements. For a discussion of risks and other factors that may cause actual results or events to differ from those contemplated by forward-looking statements, investors should review safe harbor statements in the earnings press release issued this morning, a copy of which is available on our website at www.fticonsulting.com as well as other disclosures under the heading of Risk Factors and forward-looking Information in our annual report on Form 10-K for the year ended December 31, 2025, and our quarterly reports on Form 10-Q and in our other filings with the SEC.

Investors [indiscernible] undue reliance on any forward-looking statements, which speak only as of the date of this earnings call and will not be updated. FTI assumes no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. During the call, we will discuss certain non-GAAP financial measures A discussion of any non-GAAP financial issues addressed on this call and reconciliations to the most directly comparable GAAP measures are included in the press release and the accompanying financial tables that we issued this morning and were also posted to the Investor Relations section of our website.

Lastly, there are 2 additional items that have been posted to the Investor Relations section of our website for your reference. These include a quarterly earnings presentation and excel and PDF of our historical financial and operating data, which have been updated to include our third quarter 2026 results. With these formalities out of the way, I'm joined today by Steven Gunby, our CEO and Chairman; and Angela Nam, our Chief Financial Officer. At this time, I'll turn the call over to our CEO and Chairman, Steve Gunby.

Steve Gunby

Thank you, Mollie. Good morning, everyone. Thank you for joining us. As I suspect many of you have already seen this morning, this morning, we reported a powerful third quarter. It was an amazing quarter by many measures. Our revenues exceeded $1 billion for the first time. All 5 of our segments delivered top line growth. Adjusted EBITDA grew 18% adjusted EPS was [ $3.80. ] If I can, let me focus on that last number a bit and see if I can put a little perspective on it. It's not only a record almost as much as we earned in the first 2 quarters of this year combined. .

And I realized just a couple of years ago that it is more than we earned in the first 2 years of my CEO tenure combined. But for me, it's a pretty special number showing I think the power of this organization and the progress we have made. Now look, my experience is pending that time anyone has a great quarter. The first thing you have to do is to check how real it is. It's not in the accounting sense, we always focus on the right accounting, but how much was driven by onetime factors. The site with factors that just could happen to cut positively in a given quarter. And if you do that analysis here, you find out that a lot did cut positively this quarter. We had significantly higher than usual set fees. We had a lower tax rate, and we had a number of smaller factors that also cut positively.

Having said that I worked to normalize for all of those factors, and I still had a hard time getting the number below $2.90 a share, which compares with the average adjusted EPS over the prior 4 quarters in the low 2s. So even with all the adjustments I can make, our performance this quarter ended up powerful, a seemingly powerful reaffirmation of the strength of our earnings potential and our growth potential. After quarters recently that did not seem to reaffirm that power anywhere nearly as strongly, which, of course, has raised the question, why, what happened -- why did this happen after 5 to 6 orders that weren't so powerful. Can we change our fundamental strategy? Do the world somehow change radically in our favor? What's going on? I assume some of those questions occurred to many of you, not just me. So both going to go through the details of the quarter, which Angela will do, I thought I would try to share some perspective on those questions.

What is fundamentally different? And importantly, what is not an important of durable -- is any of this -- what I would like to suggest in the rest of this opening is that our powerful results of this quarter in contrast to the prior 5 or 6 quarters do not represent some fundamental change in the company's strategy. There are some fundamental changes in the markets in which we operate. Rather, what I would like to argue is that the core of what is going on is more simple, but also more fundamental of the growth trajectory that this company has been on since we turned the fundamental strategies around almost a decade ago.

And resumption of the trajectory that we demonstrated was so powerful from 2017 to 2024, a trajectory that has been going on underlying underneath the surface, but has been obscured over the last 5 to 6 quarters that is taken to fully digest the disruption in our Compass Lexicon business. And that's a lot. I'd like to go into a little bit more detail to see if it make the points come alive and if I can, let me start by reanchoring and the success we had in the prior period, the 2017, 2024 period, then bridge to the period of the last 5 to 6 quarters that weren't so good and then arrive at why we're having such a good quarter today.

Now I'm not sure how many of the people on this call remember our Investor Day in 2017. For those of you who do, you might remember a little of what we said then, which was then after a period a truly major change in our company. That was a time when we did change our strategy. We did change our operational focus. We did change most of our leadership. After all those changes, we believe we had then put the company back finally, into an incredibly powerful position. We have put in place strategies focused on key high-value areas for clients. We're using that focus to win important brand-building client work. Important, we have put in place an energized action-oriented leadership team, and that team was retaining great people. We have pipelines of people we believe we can develop and promote. And we now believe we have positioned ourselves as the destination for terrific talent around the world.

We asserted that we believe those strengths would translate into a powerful and durable economic model. A model that we believe would deliver sustained mid- to high single-digit organic growth, which combined with good use of cash over, any experience, an extended period would not only help us build the business for our people and our clients, but also allow us to significantly outperform the market. For those of you who do remember that, you will also remember an important fact from 2017 to 2024, we do not just make those assertions. We delivered both on the strategy and on the results. Not every quarter for the company and certainly not every quarter for every region or segment or subsegment, every segment and region had zigzags during that time. But in every business, we made the Zig-Zag surround upward sloping lines, and the company as a whole, therefore, delivered strong organic revenue growth, strong adjusted EBITDA, strong adjusted EPS and a stock price that moved commensurately.

Turning to the next period, what the heck happened over the last 5 to 6 quarters. Over the last 5 to 6 quarters, it look different. We had some adjusted EBITDA and some adjusted EPS growth but we haven't performed the most measures anywhere near as strongly as we had previously. But 1 can speculate around a lot of different explanations. One possible explanation could focus on some specific challenges. We had market headwinds, including geographical slowness in markets like Asia and the Middle East. We have some bets that took longer the ramp than expected. And we had some individual businesses that face challenges. Tech, for example, last year, faced a serious slowdown in second request activity and FLC has based a slowdown in government launch and investigations over the last several quarters.

The problem with those as the explanation for the last quarters is that those sorts of challenges have always existed even during our most successful periods. Not those specifics, of course, but now is one. For example, in 2017, 2024, we had years with major restructuring troughs. We had a big job that ended. We had market and geopolitical dislocations and we had COVID, among other factors. The reality is and our experience and our expectation is if we don't just have a strategy on paper, but we have a really truly robust organic growth strategy, we do not need to be terrific every quarter in every business. We do not need every market to be in our favor. What we need to do is to be making enough powerful bets behind strong businesses, the strong people that the power of those bets and those people overcome a few bets that do not work and overcome at least a brand extended 2-itime market conditions. That is what we showed from 2017 to '24.

So those idiosyncratic things that we had the last few quarters aren't the answer. We made the same sort of powerful bets for the last 2 years. I don't -- they seem to be showing through. The core answer is that during this time, we also faced a disruption of a fundamentally different type of magnitude than we have ever faced during my tenure here. The dislocation that we have been working through Encompass Lexicon. So we've alluded to this in other quarters, but I'm not sure it has come through as vividly in the words, but also in the reported results because, of course, we don't report emcompas lexIcon separately. But I think it's a magnitude sufficiently that if I point you to the certain statistics in the overall Econ segment, it comes through vivid.

And let me point you to first '23 and '24. In '23 and '24, ECON, the e-com segment as a whole, generated typically $25 million to $30 million in adjusted quarterly adjusted EBITDA. So over 4 quarters, say, $100 million to $110 million, $100 million to $110 million in EBITDA over 4 quarters. If you add up the last 4 quarters it's 0, that cumulative difference spread over 5 quarters is enough to offset the powerful normal growth rate of this company for more than 2 years. Let me take that math a little more clear. We were an approximately $450 million adjusted EBITDA company. A vibrant growth rate same 10% a year in EBITDA. 10% on 450 is [ 45 ] over 2 years, that's 90 is less than $110 million. The decline from $25 million to $30 million a quarter to 0, that sort of headwind is sizable enough that it can obscure major progress that is taking place to the rest of the company, so many places around the world. That is the key reason these last 5 quarters fell off the trajectory we had established in 2017 to 2024.

Let me bridge to this quarter. What changed so positively this quarter? It's simply the -- I never know if it's an interest, the adverse for the reverse of this. But instead of Econ averaging $22 million year-on-year drag a quarter over the last 5 quarters. it was accretive. That cloud was removed. The obscuring function was removed. Now I actually believe it was more accretive this quarter year-on-year than we can replicate near term because there were some onetime benefits in the e-comm segment. But the point was not that we've turned accretive. The point that is no longer that major drag of a magnitude that can secure everything else. We don't need Compass lexicon to return immediately to historical levels of profitability for the continued progress across the rest of the company once an become visible in our overall results.

All we needed was compass Lexocon to get to the position where we was no longer weighing year-on-year in the way it was, which is now the position that Compass has delivered for us. Compass lexicon is moving. We have growth. We have terrific leadership in Dan, who is deeply engaged as well as engaged leadership teams in Europe and the United States below that. We are attracting, developing and retaining great talent as business start moving. The renewal of the $22 million quarterly drag is obviously positive for Compass Lexicon and its management team. It's actually also very positive for the rest of our leadership teams. Because the momentum they have been driving so many places around the world, now gets to show through in our overall results.

So the progress that so many people have committed to and have been delivering even during these 5 quarters begin to show through. So I think that's overall where we are. We had a great period from 2017 to 2024. We've been working through an 18-month period where we've had great things going on, but they've been obscured by a senior serious dislocation when we believe never should have happened in 1 business. That dislocation is behind us. And the power of everything else we'd be doing is once again beginning to shine through.

Does that mean everything will be perfect going forward? I mean I think we've all lived it like long enough to know that, that's not the case. There will be market dislocations. There will be bets here and there that do not work. There will be other issues, just as there were from 2017 to '24. But what we have shown is those are the sorts of things we can cloud through. What we have shown is if you build a truly powerful business around the core things that actually matter in professional services. retaining great professionals, supporting their development, people who care deeply about making a difference for clients, people who will translate that passion and energy into winning the biggest jobs and creating deeper client relationships. That, in turn, will enhance one's brand in the market and further make great professionals who want to stay with you and world-class professionals who don't see that perhaps as deeply in their own firms want to join you. It's a virtuous loop. And it's a virtuous loop that our results in the past have shown just how powerful it is.

It drove our results from 2017 to '24. It continued to drive most of the company's results over the last 18 months, even if those efforts were somewhat obscured. It has been true for this company since 2017, and it's true today. That's why we believe the future of this company is so incredibly bright. We look forward to discussing this story in our outlook, our multiyear outlook in greater detail at Investor Day, which we look forward to scheduling with you early next year. And with that, let me turn the call over to Angela, who will take you through this truly delightful quarter in more detail. Angela?

Eun Nam

Thank you, Steve, and good morning, everyone. What a fantastic quarter and not historical perspective gives me strong profits in our growth trajectory going forward. Now turning to our results. Let me begin a little differently this quarter with EPS. -- was $2.35 compared to a record of $2.60 in the prior year quarter. Our GPS includes a third quarter special charge as well as extraordinary litigation-related expenses, which reduced GAAP EPS by $1.36 and $0.13, respectively. Adjusted EPS was a record of 3.84, increasing 48% compared to EPS of $2.60 in Q3 of last year, where adjusted EPS was equal to GAAP EPS. .

The $46 million third quarter special charge included $45.5 million net salary and benefit-related costs resulting from targeted head count actions and $0.5 million of noncash real estate related costs. The head count actions were taken across all segments of regions, but principally in geographies that have been impacted by challenging market conditions, such as the Middle East and the U.K. as well as adjacent investments where we're sharpening our focus such as some transformation and strategy bets made in EMEA and Asia Pacific and our construction solutions business primarily outside of the U.S. and instruct costs to reflect the continual evolution of the business toward a more high-margin event rancor.

The plan to align staffing with demand continued into the fourth seconded. I expect will result in a fourth quarter estimated special charge of $7 million, which includes approximately $2 million in salary and benefits related costs and approximately $5 million in real estate-related costs. Looking forward, we expect the actions taken in the third and fourth quarters will result in cost savings of approximately $80 million on an annualized basis. Important -- we believe these options further strengthen our business and position us for sustained growth. These are targeted discipline actions and areas where market conditions or investment cases have changed. These actions, together with the moments we have made that are working collectively reinforced several events of our expert-driven model were allowing us to continue to invest behind people and positions where we see the greatest opportunities. And clearly, based on this quarter's formats, there are many bets that are working.

Delivered record revenues crossing the $1 billion milestone for the first time. Revenue grew 6% year-over-year with growth across all of our business segments. Important, growth this quarter was not driven by market tailwinds but our ability to win what we believe is more than our share of the most complex cases in market, which has recorded a record success fees that court spending this quarter, record bill rates in both e-com and FLC and double-digit top line growth in both Stratcoms and tech as our clients increasingly call in our experts and major moments of crisis and transformation. Net income of $63.4 million, which includes the $46 million special charge and $4.5 million of extraordinary litigation-related expenses compared to $82.8 million in the prior year quarter.

Adjusted EBITDA of $153.8 million, $153.7 million increased 18% year-over-year. Adjusted EBITDA margins improved 150 basis points to 15.2%. Overall, our billable head count increased 1.8% year-over-year and 2.6% sequentially. We also welcomed approximately 270 campus graduates during. Importantly, the third and fourth quarter actions impacted approximately 4% of our employees. Due to no periods that varied by geography, approximately 2/3 of Intact employees or 230 people remain included in our third quarter headcount. We expect the majority of the remaining impacted employees to depart by the end of the fourth quarter.

SG&A of $214.4 million compared to $199.5 million in the prior year quarter. The increase in SG&A was primarily due to higher compensation and legal expenses. Our Q3 effective tax rate up 17.8% compared to 25.9% in the prior year quarter. The decrease was primarily driven by a favorable discrete tax adjustment related to the finalization of prior year tax returns and tax benefits related to the tax equity investment and renewable energy which was partially offset by an increase in valuation of launches. Weighted outage shares outstanding of 27 million shares compared to 31.8 million shares in the prior report.

Now turning to our performance at the segment level. Then had a record quarter, delivering 5% revenue growth. Strong top line performance was driven by higher success fees and higher realized bill rates across the business. Record adjusted segment EBITDA of $102.8 million increased 7% year-over-year as success fees carried strong incremental profit. Corp Fin record success fees this quarter of $40.7 million included a particularly large success fee in our transactions practice related to the sale of a loan portfolio for the Federal Reserve base of Boston as well as many other success fees across Portman. But even excluding this outsized quarter, our quarterly success fees averaged $20 million in the first 2 quarters of this year, which is more than double a quarterly average of $9.5 million in 2022.

Our transactions practice grew 13% year-over-year due to higher success fees, which was partially offset by lower demand. Our transformation practice grew 7% year-over-year as we continue to support performance improvement, integration, data governance and finance support benefits for corporate, private equity and private capital clients. Turnaround and restructuring revenues declined 1% year-over-year as higher realized bill rates were more than offset by lower volume. In the reduction market that remains mixed, we believe we're winning more than our share globally. Select client mandates we supported this quarter exclude New Fortress Energy's cross-border restructuring and recapitalization, which span across the U.K., U.S. and Brazil, West Marine's successful Chapter 11 emergence, and 2 Satellite Systems Corporation voluntary reorganization among others.

FLC delivered record revenue this quarter despite lower volumes, mainly in our risks and investigations and data and analytics businesses due largely to the continued pullback in regulatory enforcement. However, even with the slow volume, we delivered revenue growth through record realized store rates reflecting the relevance of our specialized expertise and the premium our clients place on working with us. During the quarter, we continued to support clients facing complex problems, including private credit and a complex investigation matters, threat mitigation and incident response in cybersecurity and payments, anti-money longering in gaming and financial services.

Adjusted segment EBITDA of $38 million compared to $42.6 million in the prior year quarter where we benefited from recognition of a legal game console in the prior year quarter. Please mentioned, this quarter's e-comm performance was accretive to our results on both the top and bottom lines and exceeded our expectations. Revenue grew 9% year-over-year, which was driven primarily by increased demand for non-M&A and M&A-related antitrust services in both North America and EMEA.

Our Compass Lexecon team is supporting important client work hold whether it's major mergers in EMEA, NCAA, Antitrust cases in the U.S. or the Abigroup Sky Airlines antitrust matter in Chile. Adjusted segment EBITDA grew by $18.5 million year-over-year. 10% revenue growth year-over-year was driven by increased demand for M&A-related second request and antitrust services with strength across North America, EMEA and Asia Pacific. Adjusted segment EBITDA grew $2.4 million year-over-year. Adjusted segment EBITDA margins of 15.5% improved 100 basis points year-over-year. TRACON's also delivered a strong quarter with revenues up 13% year-over-year, primarily due to higher demand for public affairs and corporate reputation services. TRACON's results continue to reflect the strength of our multiyear investment to build out a higher-margin event-driven offerings in areas such as crisis, cyber and M&A and activism. And during the quarter, we supported the Prologis Seadrill and McCormick Unilever Food transactions. -- among others.

Stratcoms is also helping our clients now gate the unprecedented impact of AI from working with AI companies, private equity firms and unions to establish standards and guardrails for data centers, to helping our clients communicate when they're in center of AI-driven risk, ranging from cyberattacks to misinformation campaigns. The results of these efforts are reflected in our year-to-date performance with revenues up 9% or 13% if you exclude pass-through revenues and adjusted segment EBITDA up 26% with adjusted segment EBITDA margin of 20%.

Turning to our key cash flow and balance sheet items. During the quarter, we repurchased approximately 524,000 shares at an average price per share of $151.55 for a total cost of $79.4 million. Through the first 3 quarters of this year, we've repurchased 3.9 million shares at an average share price of 153. As of September 30, 2026, approximately $264.7 million remain available for share repurchases under our share repurchases program. Total debt of $852 million at September 30, 2026, increased sequentially from $1 billion at June 30, 2026, as we paid down $168 million in debt during the quarter.

Turning to our full year 2026 guidance. We are reaffirming our revenue range of between $3.94 billion and $4.1 billion. We now expect GAAP EPS of between [ 7.55 and 8.05. ] And we now expect adjusted interest of between $9.50 and $10, which compares to the prior range of between 9, 10 and [indiscernible].

The difference between GAAP and adjusted EPS reflects the expectation of $1.55 per share related to the third or fourth quarter special charges and $0.40 per share of extraordinary litigation-related expenses. Our updated guidance incorporates the following assumptions: First, e-comm's performance this quarter once again exceeded our expectations. The sequential improvement in adjusted segment EBITDA was benefited by stronger-than-expected revenues as well as some one-off items we do not expect to occur, such as a PTO true-up and loaded. We expect the Q4 e-com adjusted segment EBITDA to be closer to Q2's level of performance.

Second, while we delivered record third quarter revenues, in part due to record success fees, overall volume is down in 3 major markets for us: restructuring and regulatory as we enter into a seasonally slower Q4. Although activity varies by geography, the restructuring market overall has remained steady, but not centrally strong. We expect a similar low demand for restructuring in the near term. For M&A, while mega deal volume has been strong year-to-date, driving higher demand for our second class services in tech and M&A-related antitrust service econ, announced deal volume slowed notably in the third quarter.

In Comp Fin, while we believe we're to insurance transactions, our growth this quarter was driven by success fees, not volume. For FLC, which benefits from high levels of regulatory scrutiny, we have seen slower markets under the current U.S. administration, which is compounded by some large engagements that ended in the third quarter. Third, we continue to expect SG&A expenses for 2026 will be approximately $70 million higher than 2025. Of note, 2025 benefited from legal settlements and the absence of that benefit and 2026 accounts for approximately 40% of the year-over-year increase in SG&A.

Firstly, we expect a fourth quarter effective tax rate of approximately 23% and a full year effective tax rate of approximately 22%, which, as a reminder, compares to 27% in 2025. As Steve said, our commanding results this quarter represent the resumption of a growth trajectory that was obscured over the last 18 months. What I find the most powerful is not that or compassion disruption, but that we grew through it meaningfully. The breadth and diversity of our platform and our resilience demonstrates at least for me, the opportunity for this company's inherent strict, which attract them meet FTI to shine through.

The breadth and diversity of our businesses continue to provide meaningful resilience. Year-to-date, revenues increased 7% with every business segment contributing to growth despite not all end markets being possibly hot right now. As the world becomes increasingly complex and disruptive, including to the route evolution of AI, our clients need the deep expertise, judgment and execution capabilities that are at the core of our platform. We remain committed to hiring, promoting and retaining the best professionals in the market, and we are continuing to invest when we find the right ones. We have promoted 100 SMDs and announced a record 140-plus new lateral SMD and affiliate hires over the last 2 years.

Important, our senior head count growth outpaced overall global head count growth year-over-year with SMD and MD head count increasing 6.7% and 4.4%, respectively, during the quarter. We're differentiated by a low leverage expert-based model. We will continue to invest in both senior head count as well as building up teams under them. And lastly, our strong cash generation and balance sheet provide us with significant flexibility to drive shareholder value. That includes, first and foremost, investing meaningfully in organic growth as well as non-debt pursuing acquisitions and find around opportunities and opportunistically repurchasing shares. And with that, we'll open the call for your questions.

Operator

[Operator Instructions] Today's first question comes from Tobey Sommer at Truist.

質疑応答

Tobey Sommer

Steve, I wanted to see if you could dig into a little bit more the quality and durability of the earnings because the -- you cited a couple of things, performance fees, tax, et cetera. But also, are you pointing to GAAP EPS and profitability or the adjusted, which has the special charge in litigation add-backs are pretty consequential there? .

Steve Gunby

Yes. So let me see if I can answer this and Angela, you jump in if you think I don't quite get it right. The way I would think about it is -- look, the restructuring charges are not going to be recurring charges. I think we've had 3 major restructuring charges in my 11 years as CEO. And we don't consider that a normal course of business type of activity, okay? So I think you never know if there's nuclear war, what you have to do. But I mean we would not expect those things to be recurring charges, okay? And then the litigation expense is a weird thing, a really weird thing, which we think is anomalous, okay? Apart from that, I don't see any reason why GAAP earnings shouldn't be the same as adjusted earnings next year. I mean that's what it's been during most of my years as CEO. And I think the quality of our earnings is typically extraordinarily high. Is that an answer your question? Or do you want more bridging than that? .

Tobey Sommer

No, that's fine. From -- for the e-com, you walked through the math of $100 million or $100-plus million in EBITDA contribution historically in it bounced back a little bit. What do you think a reasonable medium-term expectation is for resumption in annual EBITDA generation in the segment?

Steve Gunby

Yes. I think -- what I wanted to be very clear on this is that the obscuring factor, the drop that is, I think, is obscured so much good things going on in the rest of the company is behind us. I do not want to mislead people that I think we're getting an immediate jump back to the historical levels of profitability. We wrote huge amounts of forgivable loans. You can see the increase in the balance sheet. And some of them were pretty early-stage people. It's not the way we've done it historically with the crisis, we did this. We believe in a lot of those bets, but a lot of those bets are going to take years to come fully to fruition. So I've talked to the Board about periods like 5 years for long periods of a recovery here. So I think what I would say is take don't assume it's obscuring everything going forward, but a modest recovery from here for the next few years, okay? .

Tobey Sommer

That's fine. And last detailed question from me. Regarding the forgivable loans, is the expectation for the, I don't know, annual impact on margin in e-com to be pretty linear on a go-forward basis? Or are there any adjustments to the cadence?

Steve Gunby

Yes. Look, I think if we can find terrific new talent. We will, of course, add it. But I think what happened last year was a major jump on hiring major reaction to a lot of things, some giving some forgivable loans to seek in a time of crisis to make sure people were nervous about what was going on to secure them. So the increase we had last year in forgivable loans is unprecedented in the history of our company. So we'll burn off I don't know what we're burning off this year. I'm guessing we're burning off $50 million of forgivable loans this year. We're probably replenishing some of it, but I don't think we're replenishing anywhere near $50 million and I would think that would be the expectation going on. Now if a different competitor flows and there's a terrific opportunity, we'll go after that. But our expectation is more in line with what I just said. Does that speak to your question, Tobey? .

Tobey Sommer

So next year's amortization is a sort of a comparable $50 million? .

Steve Gunby

Yes. I think you just -- yes, I don't think there's any change in the current contract. So I think using this year's amortization as a first approximation of next year wouldn't be terrible unless we do something different. Does that help? .

Tobey Sommer

Yes .

Steve Gunby

Just a reminder, I know some of you talk with private equity firms, which took all that stuff below the stuff, that's all in our direct cost. That's all reflected. I mean our EBITDA reflects that number, our direct costs reflect the amortization of pregevable loans, right? I think you know that, Tobey, I just wanted to make a more general point. .

Operator

And our next question comes from Andrew Nicholas of William Blair. .

Andrew Nicholas

I wanted to touch on third quarter margins first. Obviously, a really, really good number, I think the highest in since 2019 based on my model. Could you maybe unpack that a little bit more what besides the success fees, which have high margin impacted that in the quarter. Is there any benefit from the special charge or from the restructuring in the period and then -- I apologize for the multipart question, but any more color on the focus areas of some of those streamlining actions would be helpful?

Steve Gunby

Yes. I'll let Angela take the primary thing on this. There were a lot of smaller things that helped besides the success fee stuff. I mean it was just like sometimes you catch up with time sheets in a quarter and there's a few other -- the bad debt can sometimes be lower or higher in the quarter. So I took all of that out when I -- I didn't do that on a bridge for EBITDA percent, but I took that all out. I did the bridge from the reported [ $384 to the $290 ] that I said I normalized. Now that also has out the tax rate adjustment, which if you're trying to normalize for the EBITDA margin, you wouldn't take out because that's below that line.

But I think you can get a sense of the sum of all the little ones, if you just back my -- but a lot of little ones in addition to the main 1 being success fees. Does that help a little bit on that question and then maybe you can go to the other question. .

Eun Nam

Yes, absolutely. Yes. So I think we try to include a couple of factors that to our margins this quarter. As you pointed out, for CF, we had a large success fee that A lot of it falls to the bottom line. So help the margin significantly. But also Econ was the other factor where we had some onetime benefit stack, we don't expect to price a PTO benefit detail and true-up and lower that goes to the margins directly as well. So those are probably the main factors that would point out. .

Steve Gunby

Second part...

Eun Nam

Then on your...

Andrew Nicholas

Focus here right? .

Eun Nam

For the head count actions. It was really around certain and certain regions that weren't working. So we called out construction services, primarily outside of the U.S. and certain regions that had challenging market conditions at our both area. And as a result of that, I think you're also asking about benefits that we expected for related to those actions in this quarter and going forward. It's a minimal benefit this quarter, and we had disclosed about $80 million that benefits annually. And it wouldn't be a whole quarter of benefits, but I would expect around $15 million in benefits in Q4 related to those Q3 and Q4 special charges. .

Andrew Nicholas

Perfect. That's very helpful. And then for my second question, I wanted to ask on FLC demand. It sounds like there are some bigger engagement falling off in the fourth quarter. And obviously, you talked about a little bit lower enforcement from certain regulatory agencies. But I'm curious on the other side of that kind of ledger, are you seeing growing demand for fraud investigations. We've seen private credit blow off. We've seen some headlines around AI-enabled fraud. I'm just curious if that's showing up in FLC's pipeline at all? And if it is, how durable of a driver do you think that could be over the next couple of years? .

Steve Gunby

Maybe I can talk about that. Look, we have had some big assignments around private credit fraud. I don't know if it's public, but we were involved in uncovering some of the largest private credit fraud that have been disclosed in the public and AI, yes, AI is a driver of our business. I mean there aren't that many people who have -- who know -- who can go dive in if somebody is accused of an AI algorithm of not meeting fair credit standards, who can go in, who have deep understanding of financial regulation who has credibility to testify in court who can actually go in and analyze an AI algorithm to figure out whether a effect has that bias or not.

I don't think there are not many people who can do that, and we can. And so we have had some of our largest cases in the last 2 years related to that sort of core expertise. So yes, we think -- we think there's a lot of -- we are positioned extraordinarily well. We have a lot of confidence in this business, and we think we're positioned extraordinarily well to continue the growth in this business. But we are also affected if the U.S. government has chosen to back on certain types of traditional enforcement actions, which we've statically helped with. So please don't misunderstand that as other than being transparent about short-term headwinds. We are really positive about the long-term trajectory of this business. Does that help, Andrew?

Operator

And our next question today comes from James Yaro at Goldman Sachs.

James Yaro

You talked about the head count actions in the third and fourth quarters as being related to aligning staffing with demand, which I take it to mean a weaker demand environment in certain places, and you talked about some of those areas. But I just wanted to double-click a little bit on that. Are these structural changes in these businesses or cyclical ones in your view?

Steve Gunby

So I think this is obviously, if I can -- they're not cyclical ones. So we don't usually -- we resist, I strongly encourage us to resist taking good people out just because there's a cycle down. I mean if we're in making horse and buggies and the car is invented, then we have to repurpose to good people who did worse and buggies because the business is going away. But it does not make sense for us to fire people in bad cycles. This is why we resisted in COVID doing layoffs. And so I don't believe in that. What we have to do is if we make bets that don't make sense, either we don't have a competitive position and we can't or we made the wrong choice of person or something, we have to make those bets -- forcefully, we have to give them time to come to fruition. We have to clean them up. .

And then if we've entered markets and we have challenging positions in those markets, we don't see a way to fully fix it, we have to clean that up. And that's something we do routinely, but occasionally, it gets to a point where it's sizable enough that it becomes a restructuring charge. I don't want to misunderstand though. I mean what we've been doing over the last while is making a lot of bets and some of them didn't work, and there are some geographies that are under stress. But we've also had a lot that have worked. That is the reason the underlying strength of the business that I said was being obscured by Compass was so powerful over this period. So we've been making really bold bets, particularly overseas. And look, our betting rate is good overseas. It's not perfect.

In new markets when you're in there, you're not automatically the destination for the A+ talent. You don't have good intelligence for back channel. So you make some great moves and you make some mistakes. And -- but we made some great moves, which is why our position in the -- for example, in -- across the continent of Europe is just fundamentally different than it was. But you have to sometimes recognize where you need to clean up and that we've done here. Does that help, James?

James Yaro

Yes, that's very helpful. So a somewhat related question. I believe your full year adjusted EPS guide suggests a 52% lower fourth quarter EPS quarter-on-quarter at the midpoint of the guidance. And please correct me if I've gotten that wrong. Could you just help us think through the drivers of the magnitude of the implied slowdown Were there any onetime items in the quarter that is driving that? And does this relate at all to the typical negative seasonality you've talked about historically that often occurs in the fourth quarter?

Steve Gunby

Yes. Let me try to maybe do a high bubble thing and then have Angela correct if it's misleading. Look, I think there was a lot of stuff onetime stuff, as I said at the beginning. So if you've got to do that calculation, do it off to 290 than I said versus the 384 because there was just in this quarter and that like came from heaven that doesn't happen every quarter. In fact, sometimes it borrows from the next quarter. So you got to be really careful about that, all right? And then look, I think the drop from 290 to whatever we have embedded in there is totally in line with what we've seen. I think I think the third quarter is more often than not our strongest quarter in the fourth quarter almost never is. Now you can have different quarters and all that stuff, but there's -- you can take the average of the last 5 years drop the third to fourth, and I'm sure that it's not that far off on that. But Angela is my math wrong on that? Or was roughly right? .

Eun Nam

I think that's right. And the factors that we mentioned where we had a lot of things as Steve mentioned, cut positively this quarter, definitely helped us. But the fact that we had outlined with the onetime inside the large success fee and our favorable tax rate for the quarter are probably the main things that we would point out. .

James Yaro

Yes, that's super clear. And maybe just 1 last 1 here. Could you just speak to whether you expect the U.S. midterm elections to have any impact on your business in which businesses and in which ways if so?

Steve Gunby

Now I turn that around since my crystal ball hasn't historically been perfect on this. Do you have a view, James? .

James Yaro

Well, it's not as impactful as the presidential election in my view. So that's what I've got...

Steve Gunby

Here is what I would say is 1 never knows. But I would say what I try to do is the way I lead my company is to say, guys, come on. I mean we had periods when Brexit came in and people said, "Oh, Sky is going to fall. My experience is that if you do the right thing as the management team, you position yourself to grow because the world it's disruptive, the world disruptive, somebody needs help. And so lots of people in different professional services firms that I've been associated with, love to use the macroeconomic in whatever as an excuse. There's World War III, that's an excuse. But I think my experience is -- our company is extraordinarily well positioned in most environment -- economic environments and I would not expect it to be unless it's different than the history, I've seen that we control our destiny much more than the elections. We'll see. But that's my crystal ball in my experience. Does that help James? .

Operator

And that concludes our question-and-answer session. I'd like to turn the conference back over to management for any closing remarks. .

Steve Gunby

I just want to say thank you to all of you. Some of you have been with our company for the first few years I was here, where we had a pretty fundamental turnaround number of you were here during the strong period of '17 to '24, and a number of you have persevered through these last 5 or 6 quarters. I am excited to say that I think we're through those last 5, 6 quarters and I look forward to joining us on the ride for the next 5 to 10 years. Thanks for your time today. .

Operator

Thank you, sir. That concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.