CRA Fiscal Q2 2026 Earnings: Revenue Rises 12.8% as Guidance Increases

Charles River Associates (NASDAQ: CRAI), or CRA, reported fiscal Q2 2026 revenue of $210.8 million, up 12.8% from $186.9 million, while diluted EPS rose 17.3% to $2.10 from $1.79. Broad practice and geographic growth lifted operating profit, and CRA raised its full-year constant-currency revenue guidance while maintaining its non-GAAP EBITDA margin outlook.

Core earnings results

Revenue growth translated into a 19.3% increase in GAAP operating income and a 15.3% increase in non-GAAP EBITDA. GAAP net income grew more slowly at 11.4%, but diluted EPS benefited from a lower weighted-average share count.

Non-GAAP EBITDA margin expanded by 30 basis points to 12.7%, while GAAP operating margin improved by 60 basis points. GAAP net margin, however, edged down by 10 basis points.

Business and geographic performance

Growth was broadly distributed. Eight practices increased revenue, with Energy, Finance, Forensic Services, Intellectual Property, Life Sciences, and Risk, Investigations & Analytics each producing double-digit growth. Antitrust & Competition Economics reached a new quarterly revenue high.

Management Consulting was the faster-growing service category, while international operations expanded considerably faster than North America.

Quarter-end headcount increased 3.3% year over year, and utilization was 77%. Currency had a limited effect: second-quarter revenue would have been $0.4 million lower at constant currency, while GAAP net income and diluted EPS would have been unchanged.

SG&A leverage lifted operating margin, while interest costs limited net-margin gains

Costs of services increased to $148.7 million from $128.5 million and rose to 70.6% of revenue from 68.8%. This indicates that direct service costs grew faster than revenue during the quarter.

That pressure was more than offset at the operating level by selling, general and administrative expenses, which were nearly unchanged at $35.3 million compared with $35.1 million. SG&A declined to 16.7% of revenue from 18.8%, helping operating margin rise to 11.2%.

Below operating income, net interest expense increased to $3.0 million from $1.8 million, while the income tax provision rose to $6.6 million from $5.0 million. These items absorbed much of the operating leverage, leaving net margin at 6.4%, slightly below the prior-year period. Diluted EPS still grew faster than net income because the diluted weighted-average share count fell by approximately 5.1% to 6.4 million shares.

Cash flow, leverage and capital returns

CRA disclosed cash flow only for the fiscal year-to-date period rather than for the second quarter alone. Operating activities used $118.3 million during the first two quarters of fiscal 2026, compared with $74.1 million used in the prior-year period. The cash flow statement included a $23.6 million use related to accounts receivable and unbilled services and a $140.3 million use from other working-capital items.

Accounts receivable and unbilled services increased to $271.7 million on July 4 from $248.9 million at the beginning of the fiscal year. The revolving credit balance rose to $219.0 million from $34.0 million, while cash and equivalents increased to $21.4 million from $18.2 million.

During the quarter, CRA returned $31.4 million to shareholders, consisting of $27.8 million in repurchases of approximately 193,000 shares at an average price of $144 and $3.6 million in dividends. On August 6, CRA announced a five-year refinancing providing up to $400 million, including a $75 million term loan and a $325 million revolving facility. It also declared a quarterly dividend of $0.57 per share.

Fiscal 2026 guidance

CRA raised its constant-currency full-year revenue range, with the new lower bound matching the previous upper bound. The company maintained its non-GAAP EBITDA margin outlook despite the higher revenue expectation.

CRA estimates that the constant-currency adjustment will reduce reported fiscal 2026 revenue by approximately $2.5 million and reported EBITDA by less than $250,000. The company also expects non-cash forgivable-loan amortization included in its EBITDA metrics to increase by approximately $15 million as a result of talent investments.

Fiscal 2026 contains 52 weeks, compared with 53 weeks in fiscal 2025, when the extra week occurred in the fourth quarter. This creates an additional consideration when comparing full-year growth.

Recent insider transactions

The supplied six-month insider summary reports 30,028 shares purchased across 21 transactions and 20,738 shares sold across seven transactions, resulting in 9,290 net shares purchased. It lists total insider holdings of approximately 244,370 shares and net purchases equal to 4.0% of those holdings.

Among the individual records containing both a transaction direction and a disclosed dollar value, the latest transactions were sales. These transactions should be viewed objectively because the supplied data does not disclose the individuals’ reasons for trading.

The source also lists six director stock grants dated July 16 at a reported value of $0 but does not provide the number of shares granted. A May 20 filing by officer Chad M. Holmes lacks both transaction direction and transaction size, so it is not included in the table.

Risks investors should monitor

• Service-cost pressure: Costs of services increased to 70.6% of revenue from 68.8%. The expected $15 million increase in forgivable-loan amortization could add to fiscal 2026 expense pressure.
• Cash conversion and working capital: First-half operating cash use widened to $118.3 million, with accounts receivable, unbilled services, and other working-capital items consuming cash.
• Higher borrowing and interest expense: The revolving credit balance reached $219.0 million, while quarterly net interest expense increased by approximately 64.5% year over year.
• Demand and engagement timing: Management cautioned that geopolitical, macroeconomic, and business conditions can affect demand and the timing of consulting engagements.
• Full-year comparability: Fiscal 2026 has one fewer week than fiscal 2025, while currency is expected to reduce reported annual revenue relative to the constant-currency outlook.

Summary

CRA’s fiscal second quarter combined double-digit revenue growth, broad contributions across practices and geographies, and improved operating and non-GAAP EBITDA margins. The higher revenue guidance reflects that momentum, but investors should continue monitoring service costs, working-capital cash use, increased borrowing, and the effect of talent-related amortization on profitability.