Charles River Associates Revenue Rises 13% as FY2026 Margins Narrow

Charles River Associates reported 13% revenue growth through the third quarter of fiscal 2026, while narrower margins limited earnings gains. The consulting firm also outlined full-year constant-currency guidance of $830 million to $840 million in revenue and a non-GAAP EBITDA margin of 12.2% to 12.8%.

Fiscal year-to-date revenue rose to $626.7 million from $554.6 million in the comparable 2025 period. Non-GAAP EBITDA increased to $77.1 million from $72.5 million, but the corresponding margin declined to 12.3% from 13.1%.

GAAP income from operations increased to $65.5 million from $62.5 million, while the operating margin narrowed to 10.4% from 11.3%. Net income fell to $38.5 million from $41.6 million, and diluted earnings per share decreased to $5.98 from $6.16.

On a non-GAAP basis, net income was $40.8 million, compared with $41.6 million a year earlier. Non-GAAP diluted EPS rose 3% to $6.33 from $6.16, helped by a lower diluted share count. Weighted-average diluted shares declined to 6.4 million from 6.7 million.

The year-to-date results included $44 million of non-cash amortization related to forgivable loans, equal to 7% of revenue. CRA uses forgivable loans as part of its talent investment strategy. Headcount increased 6% year over year, while utilization reached 78%, compared with 77% in fiscal 2025.

Consulting demand and operating priorities

CRA, formally CRA International Inc. (NASDAQ: CRAI), generates about 80% of its revenue from legal and regulatory consulting and approximately 20% from management consulting. The company said its litigation business has expanded by gaining market share and targeting faster-growing areas, even as broader legal-spending growth has remained modest.

The presentation highlighted competition matters, transaction reviews, forensic investigations, cybersecurity, intellectual property, labor disputes, energy and life sciences as sources of client work. CRA also said both of its business lines can benefit from merger and acquisition activity as companies address changing competitive conditions.

Management identified increasing regulatory complexity as another demand driver. The company’s work includes economic analysis and expert testimony for litigation and regulatory proceedings, as well as sector-focused strategic and operational advice.

CRA described artificial intelligence as both a potential demand amplifier and a productivity tool. Management expects AI adoption to create work involving competition, valuation, intellectual property and governance while reducing time spent on lower-value manual tasks. The company said it is introducing AI through controlled pilots, quality-control and reproducibility standards, and data-security safeguards.

Outlook and capital allocation

For fiscal 2026, CRA expects revenue of $830 million to $840 million and a non-GAAP EBITDA margin between 12.2% and 12.8%. The guidance, dated Nov. 5, 2026, is presented on a constant-currency basis relative to fiscal 2025.

Over the next several years, the company is targeting organically driven average annual revenue growth in the mid-single digits, supplemented by acquisitions or other inorganic opportunities when available. It also expects utilization to remain in the mid- to upper-70% range.

CRA said it aims to return approximately half of adjusted net cash flows from operations to shareholders. During the first three quarters of fiscal 2026, it spent $49 million on share repurchases at an average price of $160 per share and paid $11 million in cash dividends. Period-end shares outstanding were about 6.3 million, down from 7.4 million in 2021.

The company’s current quarterly dividend is $0.67 per share. CRA has also directed capital toward recruiting and retaining consultants, with talent investments focused on existing service lines and related adjacent areas.

The outlook remains subject to changes in demand for consulting services, engagement timing, client payment capacity, pricing competition and CRA’s ability to attract and retain key employees and outside experts. Other risks identified by the company include foreign-exchange movements, global political and economic instability, cybersecurity incidents, evolving laws and regulations, international operating risks and the development and use of AI.