查爾斯河聯合諮詢 (CRAI) 2026年第三季法說會：營收創新高，調升財測指引

重點摘要

• Charles River Associates (NASDAQ: CRAI) 公布 2026 會計年度第三季營收達創紀錄的 2.149 億美元，年增 15.6%。該季亦創下公司史上第三季最佳的淨利、稀釋後每股盈餘 (EPS) 及 EBITDA，不過電話會議上未提供確切的獲利數據。
• 佔單季營收約 95% 的七大業務部門均實現年增長。其中鑑識服務（Forensic Services）、生命科學（Life Sciences）以及風險調查與分析（Risk Investigations & Analytics）皆繳出兩位數的成長表現。
• 儘管 CRA 迎來約 100 名新顧問，顧問利用率仍從 77% 上升至 78%。截至季末，顧問人數成長 6.2% 至 1,028 人。
• 平均每週潛在專案案源與新專案立案數均年增超過 20%，支持了管理層對業務管道的樂觀看法。
• 管理層將依固定匯率計算的全年營收財測從 8.05 億至 8.20 億美元上調至 8.30 億至 8.40 億美元；Non-GAAP EBITDA 利潤率預期區間則從 12.0%–13.0% 收窄至 12.2%–12.8%。
• CRA 將季度股利提高 17.5% 至每股 0.67 美元。今年初至今，透過股利與股票回購返還的資本總計達 6,030 萬美元。

核心財務數據

業務與營運表現

CRA 的成長基礎依然廣泛。反壟斷與競爭經濟學業務（Antitrust & Competition Economics）連續第七季創下歷史新高，主要受惠於併購相關業務以及對反壟斷服務的持續需求。儘管 2026 年第三季全球併購交易金額季減 41%，該業務部門仍持續處理監管調查與重大爭端案件。

鑑識服務（Forensic Services）再度刷新單季營收紀錄。承接專案包括大規模監管資料處理、網路安全工作以及 AI 輔助弱點測試。管理層看好從事後事件應變業務擴展至預防性資安服務的機會。

風險調查與分析業務（Risk Investigations & Analytics）在多個司法管轄區處理調查、內控評估與經濟損失賠償案件。生命科學業務支援了商業策略研究與製藥訴訟；能源業務則就電力需求、基礎設施、發電投資及商業合約向公用事業、資料中心開發商與投資人提供諮詢。

員工人數成長主要集中在其他資深員工與初階員工。管理層表示，得益於新進員工到職培訓機制的改善與強勁的需求，新進人員投入創收專案的速度快於往常。

截至季末，CRA 擁有 163 位主管級幹部、606 位其他資深員工與 259 位初階員工。該公司當季信用額度借款亦淨減少 6,900 萬美元。

管理層財務預測

管理層預期，以相對於 2025 會計年度的固定匯率計算，2026 會計年度全年營收將達 8.30 億至 8.40 億美元，高於先前預測的 8.05 億至 8.20 億美元。

全年 Non-GAAP EBITDA 利潤率預計為 12.2%–12.8%，先前預測區間為 12.0%–13.0%。

CRA 預期固定匯率調整將使 2026 會計年度列報營收減少約 290 萬美元、列報年度 EBITDA 減少約 35 萬美元。至於第四季，該調整預計將使列報營收減少約 20 萬美元，對列報 EBITDA 則無影響。

由於人才投資，管理層仍預期 2026 會計年度非現金免除性貸款攤銷費用將增加約 1,500 萬美元。前三季年增幅度約為 1,400 萬美元，意味著第四季將增加約 100 萬美元。

2026 會計年度為 52 週，相較之下 2025 會計年度為 53 週。

風險與關注事項

管理層指出，全球總體經濟、商業環境及政治局勢的不確定性，是影響客戶需求與 CRA 營運的潛在風險。

2026 年前九個月全球併購交易規模達 3.9 兆美元，年增 28%，但第三季金額季減 41% 至 9,930 億美元。CRA 正密切關注此單季下滑屬暫時現象，抑或預示著更廣泛的放緩。

Non-GAAP 稅率升至 34.9%，主因是支付給高薪個人的不可扣除薪酬增加。管理層正評估針對擬議之美國稅法第 162(m) 條規定的稅務減緩策略。

AI 正在增加專案的複雜度並擴大網路安全威脅，但客戶仍對資料機密性、隱私以及與 AI 工具相關的潛在弱點存有疑慮。

分析師問答重點

• 員工人數：管理層對中個位數左右的成長仍感放心，而非預期高個位數擴張。離職率降低與營收加速成長，使第三季員工人數成長略高於早先的目標區間。
• AI 相關需求：CRA 在許多專案中均採用 AI 工具，但管理層表示，潛在專案案源的增加目前尚不能主要歸因於專門針對 AI 的專案。然而，AI 確實提高了專案複雜度與網路安全需求。
• 成長動能：在 2025 年及 2026 年初聘僱的 20 多位創收顧問，其產能上手速度快於通常的 12 至 24 個月。管理層亦指出，現有業務與既有客戶的需求更加強勁。
• 利用率：利用率升至 78% 相當值得關注，因為 CRA 在季節性活躍期增加了 100 多名顧問。管理層認為未來可能進一步招聘，但仍打算保持審慎步調。
• 國際業務：管理層將北美以外地區第三季成長放緩的部分原因，歸咎於連續約四季年增超過 20% 後的高基期效應。管理層預期，隨著時間推移，國際業務不致於大幅落後北美。
• 反壟斷業務展望：CRA 的案件通常持續 6 至 18 個月，這使得該業務部門即使在當前併購交易量波動時，仍能持續受惠於先前啟動的交易案件。

完整法說會逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Good day, everyone, and welcome to Charles River Associates' Third Quarter 2026 Conference Call. Please note that today's call is being recorded. The company's earnings release and prepared CFO remarks are posted on the Investor Relations section of CRA's website at crai.com.

With us today are CRA's President and Chief Executive Officer, Paul Maleh; Chief Financial Officer, Eric Nierenberg; and Chief Corporate Development Officer, Chad Holmes.

At this time, I'd like to turn the call over to Dr. Nierenberg for opening remarks. Eric, please go ahead.

Eric Nierenberg

Thank you, Rob, and good morning, everyone. Please note that the statements made during this conference call, including guidance on future revenue and non-GAAP EBITDA margin and any other statements concerning the future business, operating results or financial condition of CRA, including those statements using the terms expect, outlook or similar terms are forward-looking statements as defined in Section 21 of the Exchange Act. Information contained in these forward-looking statements is based on management's current expectations and is inherently uncertain.

Actual performance and results may differ materially from those expressed or implied in these statements due to many important factors, including the level of demand for our services as a result of changes in general and industry-specific economic conditions. Additional information regarding these factors is included in today's release and in CRA's periodic reports, including our most recently filed annual report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC. CRA undertakes no obligation to update these forward-looking statements after the date of this call to reflect new information or developments.

Additionally, we will refer to some non-GAAP financial measures and certain measures presented on a constant currency basis on this call. Everyone is encouraged to refer to today's release and related CFO remarks for reconciliations of these non-GAAP financial measures to their GAAP comparable measures and descriptions of the calculation of EBITDA and measures presented on a constant currency basis. I will now turn it over to Paul for his report. Paul?

Paul Maleh

Thanks, Eric, and good morning, everyone. Thank you for joining us today. CRA's strong performance continued in the third quarter as we set a new quarterly record for financial performance. Revenue grew by 15.6% year-over-year to $214.9 million, representing the highest quarterly revenue in CRA's history. This follows record revenue in the -- Gary loves the results, too. I apologize for that. This follows record revenue in the first and second quarters, which means fiscal 2026 has delivered the 3 highest quarters of revenue in our history. Broad-based contributions once again characterize CRA's financial performance, reflecting both the quality and the depth of the portfolio.

7 practices grew year-over-year, representing approximately 95% of the company's total revenue for the third quarter. The Forensic Services, Life Sciences and Risk Investigations & Analytics practices each posted double-digit revenue growth year-over-year. 4 practices, Antitrust & Competition Economics, Energy, Forensic Services and Life Sciences each established new records for the strongest first 9 months of the year. During this period of strong growth, we have continued to manage the business effectively.

The record top line performance translated into the highest Q3 profits in the company's history as measured by net income, earnings per diluted share and EBITDA. We are particularly pleased with these levels of profitability given the step-up in forgivable loan amortization expense during fiscal 2026, which we have referenced previously.

During the third quarter, we welcomed approximately 100 new consultants as colleagues increased 6.2% compared to the third quarter of 2025. Consultant utilization rose to 78% versus 77% a year ago. Summer is a period of significant seasonal transition with large inflows and outflows of consultants, particularly within our junior ranks. We are especially pleased with this high level of utilization. The increase in overall consultant headcount and utilization were supported by the continued replenishing of our sales pipeline.

Average weekly project lead flow and new project originations remained strong with each metric increasing more than 20% year-over-year. This growth continues the momentum we generated in the first half of fiscal 2026. Revenue in the third quarter from CRA's legal and regulatory services increased by 15.7%. This growth outpaced trends in the broader legal market as total case filings and total court judgments increased year-over-year by 8% and 4%, respectively, excluding the effects of a onetime surge in employment-related case filings during the quarter.

Turning to the M&A market. Worldwide M&A activity totaled $3.9 trillion during the first 9 months of 2026, an increase of 28% compared to year ago levels, making it the strongest first 3 quarters to start a year since 2021. However, the third quarter of 2026 totaled $993 billion, a decrease of 41% compared to the second quarter of this year, the slowest quarter for M&A by value since the second quarter of 2025.

Against this backdrop, CRA's Antitrust & Competition Economics practice posted its seventh straight record quarter, capitalizing on ongoing merger-related activity and sustained demand for antitrust services. For example, CRA was retained by Paramount Skydance Corporation to advise on its acquisition of Warner Bros. Discovery. The CRA team provided economic assistance to Paramount during the Department of Justice investigation and through litigation brought by 12 states and the Writers Guild of America. These lawsuits were settled in late September and the transaction closed on October 6, 2026.

In another project, CRA supported the Canadian Competition Bureau in challenging Nortera's Food proposed acquisition of B&G Foods Canada. CRA's expert found that the transaction likely would harm competition across multiple alternative market definitions. Following the Competition Bureau's application to block the transaction, the merging parties abandoned the transaction. CRA's Antitrust & Competition Economics practice remained active in high-stakes legal disputes during the third quarter, working on multiple U.S. antitrust agency investigations into ordinary course of business practices.

Additionally, CRA supported Compass in the federal antitrust lawsuit brought by Zillow against Compass and Midwest real estate data over the availability of private real estate listings. Zillow alleged coordination and coercion and sought a preliminary injunction. Citing the CRA expert in his ruling, the judge denied Zillow's motion for a preliminary injunction.

During the third quarter, CRA's Forensic Services practice once again set a new high for quarterly revenue while responding to numerous types of crisis management events experienced by our client. For example, the team recently supported a global Silicon Valley-based technology company in responding to a significant regulatory matter involving substantial volumes of electronically stored information. Working under compressed deadlines, our team rapidly processed and securely hosted the data and manage complex time-sensitive productions.

Elsewhere, a global software developer asked CRA to use AI to find unknown vulnerabilities in its products. Taking advantage of multiple models and industry experience, we rapidly identified, triaged and tested security fixes for their products before a vulnerability could be exploited. During the third quarter, the risk investigations and analytics team worked on several large investigations and damages matters across multiple jurisdictions.

In one, the RIA team was retained by a client in the financial sector to provide expert assistance and testimony regarding the reasonableness of processes and controls to prevent the misappropriation of assets. In another engagement, an insurance industry client retained a CRA expert to quantify economic damages arriving from a breach of contract and employee rating matter.

Turning to our Management Consulting services. This line of business expanded 9.8% year-over-year as both the Energy and Life Sciences practices contributed to overall revenue growth. During the third quarter, CRA's Energy practice continued to advise utilities, data center developers and investors on the power supply and infrastructure requirements associated with growing data center demand. Our work included electricity demand forecasting, data center portfolio assessments and due diligence on dedicated generation investments as well as advice on utility service options, pricing and commercial arrangements for large customers.

We also supported major electricity market operators on market design and resource adequacy. In our Life Sciences practice, we continue to focus on the new commercial opportunities that scientific advances create. Our strategy consulting teams led qualitative and quantitative market research in China, France, Germany, the U.K. and the U.S. on a new asset to treat liver disease. The market research will be used by our strategy consultants to inform perspectives on product positioning within the rapidly evolving treatment landscape.

Regarding litigation support, one of our economists was retained as an expert witness in an antitrust matter involving allegations of vertical foreclosure in the generic pharmaceutical industry, and the CRA team is providing economic analysis on a market definition, vertical foreclosure and damages. As always, I'm grateful to all of my colleagues for their hard work and their commitment in helping our clients address their most important challenges.

Fiscal 2026 has delivered the strongest 9 months for revenue, non-GAAP EBITDA in the company's history. Through the third quarter on a constant currency basis relative to fiscal 2025, CRA generated total revenue of $624 million and non-GAAP EBITDA of $76.8 million, resulting in a margin of 12.3%. Given our strong year-to-date results and healthy sales pipeline, we are increasing our annual revenue guidance and narrowing our profit margin guidance range. For full year fiscal 2026, on a constant currency basis relative to fiscal 2025, we expect revenue in the range of $830 million to $840 million and non-GAAP EBITDA margin in the range of 12.2% to 12.8%.

This new guidance compares with the prior revenue range of $805 million to $820 million and a prior non-GAAP EBITDA margin range of 12.0% to 13.0%. We expect that the constant currency adjustment will decrease CRA's reported revenue by approximately $2.9 million and CRA's reported annual EBITDA by approximately $350,000 in fiscal 2026. This implies that the constant currency adjustment for the fourth quarter of fiscal 2026 will decrease CRA's reported revenue by approximately $200,000 while leaving reported EBITDA unchanged.

As previously reported, noncash forgivable loan amortization, which is reflected as an expense when presenting EBITDA metrics, is expected to increase in fiscal 2026 by approximately $15 million, reflecting investments in talent to drive value-creating growth. Noncash forgivable loan amortization increased by approximately $14 million through the first 3 quarters of fiscal 2026 relative to a year ago level. This implies that an increase of approximately $1 million is expected during the fourth quarter of fiscal 2026 relative to the fourth quarter of fiscal 2025.

Finally, as a reminder, fiscal 2026 returns to CRA's typical 52-week year, whereas fiscal 2025 contained an extra week in the fourth quarter and resulted in a 53-week year. We continue to be encouraged by the strong performance year-to-date, supportive market trends and the continued replenishing of our sales pipeline. However, we remain mindful that uncertain global macroeconomic, business and political conditions can affect our clients and our business.

With that, I'll turn the call over to Chad and then Eric for a few additional comments. Chad?

Chad Holmes

Thanks, Paul. Hello, everyone. I want to update you on our capital and capital deployment during the quarter. We concluded the quarter with net debt of $129.6 million, consisting of $20.4 million of cash and $150 million of borrowings under our credit facility. Our outstanding borrowings include $75 million of term debt and $75 million under our revolving credit facility. These figures reflect $69 million of net payments made during the quarter to reduce borrowings under our credit facility.

The third quarter of 2026 saw net cash outlays of $0.5 million for talent investments and $1.2 million for traditional capital expenditures. We concluded the third quarter of fiscal 2026 with total liquidity of $192.3 million, consisting of $20.4 million in cash and cash equivalents and a further $171.9 million of available capacity on our line of credit in place at quarter's end. During the third quarter, we delivered $3.6 million of dividend payments to our shareholders.

Marking the 10th anniversary of CRA's inaugural dividend payment, earlier today, we announced a 17.5% increase in our quarterly cash dividend from $0.57 to $0.67 per common share. This action represents the 10th consecutive annual increase in the dividend and results in a quarterly amount nearly 5x the size of our first dividend paid in 2016.

This year's increase demonstrates our continued confidence in the cash-generating ability of the business and reflects our commitment to returning capital to shareholders. Year-to-date, we have returned $60.3 million of capital to our shareholders, consisting of $11 million of dividend payments and $49.3 million for repurchases of approximately 309,000 shares at an average price of $160 per share. We currently have $16.6 million available under our share repurchase program.

With that, I'll turn the call over to Eric for a few final comments. Eric?

Eric Nierenberg

Thanks, Chad. As a reminder, more expansive commentary on our financial results is available on the Investor Relations section of our website under prepared CFO remarks. Before we get to questions, let me provide a few additional metrics related to our performance in the third quarter of fiscal 2026.

In terms of consultant headcount, we ended the quarter at 1,028, consisting of 163 officers, 606 other senior staff and 259 junior staff. This represents a 6.2% year-over-year increase from the 968 consulting headcount reported at the end of Q3 fiscal 2025. The growth is concentrated in the other senior staff and junior staff categories. Non-GAAP selling, general and administrative expenses, excluding the 1.6% attributable to commissions to nonemployee experts, was 14.9% of revenue for the third quarter of fiscal 2026 compared with 16.3% a year ago.

The effective tax rate for the third quarter of fiscal 2026 on a non-GAAP basis was 34.9% compared with 28.8% on a non-GAAP basis for the third quarter of fiscal 2025. The increase is primarily due to an increase in nondeductible compensation paid to high-earning individuals, partially offset by a remeasurement of deferred tax assets related to changes in current year state apportionment.

Turning to the balance sheet. DSO stood at 117 days at the end of the third quarter compared with the 113 days at the end of the second quarter of fiscal 2026. DSO in the third quarter consisted of 70 days of billed and 47 days of unbilled. That concludes our prepared remarks. We will now open the call for questions. Rob, please go ahead.

Operator

[Operator Instructions] Our first question comes from Andrew Nicholas with William Blair.

分析師問答

Andrew Nicholas

I wanted to start on headcount growth, a really strong number. I think last quarter, you kind of targeted mid-single digits exiting the year. It looks like you're already a little bit above that. Just curious if that's something that could trend to the high single digits? Obviously, really good kind of lead flow generation that you cited today. And if you could just comment broadly on the recruiting environment, I'd appreciate it.

Paul Maleh

Sure. Good morning, Andrew. With respect to headcount, we've been trying to indicate an expectation that headcount growth for fiscal 2026 will approach mid-single digits. We're starting to go a little north of that for lower-than-expected attrition that we have experienced year-to-date and also continued acceleration of our revenue growth. Typically, we would expect integration of our new colleagues to take about 2 to 3 months, and it was much more rapid during Q3, which gives everyone a little more confidence in terms of our ability to potentially digest further headcount growth.

But with respect to how the next couple of months play out, I would not expect or I would not guide investors to the high single digits. I think that mid-single-digit range, we're quite comfortable with that at this stage. With respect to the market for incoming talent at the university level, both undergraduate and graduate level, we've been real fortunate to hire a fantastic incoming class and going to the same universities we typically have and are privileged to hire the quality of individuals that we have. I think it's a combination maybe of the overall market for labor and also CRA's overall strength.

Andrew Nicholas

That's helpful. And then switching gears a little bit. I think in the past, you've talked about AI as a potential demand driver on the litigation front, in particular. Curious, just broadly speaking, if you're starting to see that either impact results or impact lead flow and maybe any other color on that impact on the demand side?

Paul Maleh

Yes. I've been trying to figure out what is driving the growth of revenue in 2026 and the growth of lead flow. What I can say is, for example, the growth of lead flow is not necessarily directly tied to AI-related engagements. Now almost on all the engagements, we use some AI tools to help with the delivery, but I can't say the impetus of the litigation or the client opportunity is AI-driven yet. AI has definitely increased complexity, and I think that is contributing to the surge that we are observing across our entire portfolio. But I can't, at this stage, say the demand increase is due to AI-specific needs.

Operator

Our next question comes from Marc Riddick with Sidoti & Company.

Marc Riddick

So I was wondering, I guess, maybe you can sort of follow that a little bit into the case filings and judgment activity and the legal and regulatory certainly outperformed those trends. But maybe you could talk a little bit about some of the drivers that you're seeing there and how -- if those catalysts have evolved throughout the year and maybe what's driving that activity and the market share gains?

Paul Maleh

Yes. I guess this entire call is a bit self-serving, but my answer is going to continue with that trend. I have to give all the credit to my colleagues. In 2025 and the beginning of '26, we brought on several, more than 20 new revenue-generating consultants at CRA, and we have been thrilled with the ramp of those new individuals. We typically would expect 12 to 24 months before we see a revenue ramp, and that has been expedited. Part of the new lead flow surge is clearly contributions from these new individuals and part of the revenue growth that we're enjoying is also partially can be tied to these new individuals.

But in addition to that, we are just seeing some expansion of same-store sales. Our colleagues are finding ways to stay relevant to their clients and to add value, and that is being recognized by just increased demand for those services. We're pretty excited in terms of the contribution from the organic base, from the inorganic base from a geographic perspective, everything continues to operate sort of as we sketched it out.

Marc Riddick

And then I guess shifting gears on the geographic part of the conversation. We saw North America vis-a-vis Europe and the growth trends that we're seeing there. Maybe you could talk a little bit about the shift as Europe, I guess, was kind of more leading the way, I guess, earlier in the year, a little bit of a shift now geographically, maybe what you're seeing there and if that's driven by any particular reason or any particular industry vertical that's standing out at the moment.

Paul Maleh

Yes. The last thing I want to do is cast any shadows on the contributions of our international operations. I mentioned it last quarter that our international operations have been growing for about the last 4 quarters at 20% plus per annum rates. I think this is just a catch-up of those hard comps. As they replenish on both the staffing capacity and the business opportunities, I don't expect Europe and our international operations to lag North American growth as substantially as you saw in Q3. On the flip side of that, all the kudos goes out to my North American colleagues for being able to deliver close to a 16% year-over-year expansion.

Marc Riddick

Great. And then I was wondering if you could talk a little bit about the -- I guess, maybe from a historical perspective with another election behind us. Can you talk maybe a little about some of the things that you historically have tended to see when you have large political shifts one way or another or how you're feeling about that and how that might color how we look at the beginnings of next year?

Paul Maleh

Well, I've had a 36 hours. So I clearly have all of my expectations lined up.

Marc Riddick

That's why I asked...

Paul Maleh

I know. Thank you. I'm being tongue-in-cheek because I think a lot has still to unfold with respect to the ramifications of the midterm elections on it. What I am most confident about is if you look at, and you talked about CRA's history. If you look at for the last 10, 15 years, we have demonstrated an ability to perform exceptionally under various macroeconomic conditions, macroeconomic shocks, geopolitical shifts, whether the Republicans are taking office, the Democrats are taking office or have a mix of power right now. I feel good that our portfolio will respond effectively irrespective. But no, at this stage, I can't say I have a leaning with respect to how this will impact demand drivers.

Marc Riddick

Okay. And then I guess maybe, I guess, last one for me. I was sort of curious on the commentary around the tax rate. Maybe talk a little bit about the -- whether that's something that we would expect to continue into the fourth quarter, if that's figured into the fourth quarter commentary and how that -- because it seems as though it would likely continue a little bit, but maybe talk a little bit about that.

Paul Maleh

We're working with our tax advisers now and have a number of tax mitigation strategies that I think should provide us some relief in Q4 and in the quarters beyond that. The main impetus for the rise is the impact of the proposed 162(m) regulation and its direct impact on CRA. I think there are mitigation strategies there. Hopefully, I will have more to share with you in Q4 and in the quarters ahead.

Operator

Our next question comes from Kevin Steinke with Barrington Research.

Kevin Steinke

I wanted to start off by asking about utilization. You've kind of been in this 77% to 78% range over the last 5 quarters. And yes, it's not a really large difference from historically, but historically, you've kind of targeted that 75% or mid-70s range. Do you think this is kind of a new norm? Is that something you'd like to manage down a little bit? Or how are you thinking about utilization going forward?

Paul Maleh

I was surprised that utilization ticked up in Q3, not because I expected overall demand to soften. It's just because of the large outflow of consultants going back to university and the large inflow of new colleagues with us welcoming more than 100 new colleagues into CRA. My surprise comes by how quickly they got integrated into the various practices and on revenue-generating projects with it. That does lead to fair questions about, well, can you absorb even more headcount?

These are the discussions right now that we're having throughout our portfolio. But it's hard to complain when you welcome 10% of your consulting population into the building and see utilization increase during a quarter that has very high fringe rates to boot. So real happy with that. We think there may be opportunities for additional headcount expansion, but we're trying to be measured in our approach to that headcount growth.

Kevin Steinke

Okay. And is there anything that you can attribute that rapid integration of the new hires to? Is that something you did internally or just folks were just able to get up to speed really quickly?

Paul Maleh

I think my colleagues across the corporate functions, my colleagues across the practices, they've gotten better. We've gotten better at our ability to welcome new colleagues and get them operating close to the mean more rapidly. I think that is clearly a contributing factor. Then just the surge of demand that we are enjoying right now and that we have been enjoying for the past couple of quarters. There is enough work to try to get our colleagues fully employed rather rapidly. Managerial approach, but probably a little more weighting to just overall demand drivers afforded us the opportunity for a more rapid ramp.

Kevin Steinke

Okay. Great. And since you called it out, just on the global M&A volume, obviously, a really strong first 9 months. You also noted volume down sequentially 41% Obviously, Antitrust & Competition Economics practice still very strong, seventh straight record quarter, and you also noted how the business has historically performed very well in a variety of macroeconomic environments, et cetera. But since you mentioned that sequential change on the M&A volume globally, how does that play into your thinking about the future? Or does it at all? Obviously, the demand trends remain really strong given lead flow up 20%.

Paul Maleh

I think you gave a fantastic answer to that. A couple of things. One, our Antitrust & Competition Economics practice is a worldwide leader in the space. Even as volume may fluctuate up, may fluctuate down, we seem to be a go-to provider. In short, we get our share of those matters. Secondly, the matters that the competition practice brings in tend to be a little more long-lived in terms of duration relative to the other projects at CRA.

That is one of the reasons we gave you year-to-date transaction volume because we're still enjoying the benefits of matters that started 6, 12, 18 months ago within that practice. We're keeping our eye on it to see whether this is more of a downward blip in Q3 in terms of global M&A activity or whether this is a larger trend that we need to try to manage.

Kevin Steinke

Okay. Makes sense. And just lastly, I was just curious about something you called out when you were discussing the Forensic Services practice. You talked about an example where you did some testing for a client in terms of looking for security vulnerabilities. Has that historically been a meaningful part of your practice? I always think about it as more responding to cyber breaches and incidents. But is there an opportunity to do more this kind of upfront testing, especially in kind of this AI environment we're operating with that could potentially create more vulnerabilities?

Paul Maleh

I think it's a real opportunity for the Forensic Services practice and one that they've been trying to leverage. They've been very active in what you described as this incident response work and are also trying to leverage the relationships built to more preventative type services there. We do think that's an opportunity to leverage the relationships that we build when we're going in and helping clients during their most stressful times in terms of more forward-looking preventative matters. Answer to that is yes.

With respect to AI, here's an area that it's hard to say that AI has not been a demand amplifier with the number of breaches that are happening globally now, it's because of the ease that many of these AI tools make for the bad actors in terms of breaching the various firewalls on it. Clients' willingness for us to use AI tools. That's a coin flip right now. Many clients are still very concerned about the confidentiality and privacy of their data and what AI tools may create in terms of vulnerabilities. We take those concerns of our clients very seriously and try to use the governance model that we have at CRA in terms of the application of the AI models and tools.

Kevin Steinke

All right. That makes sense. That's helpful commentary. Again, congratulations on the strong results.

Paul Maleh

Thank you, Kevin. I appreciate it.

Operator

We have reached the end of the question-and-answer session. At this time, I'd like to turn the call back over to Paul Maleh for closing comments.

Paul Maleh

Thank you, Rob, and thank you to everyone again for joining us today. We appreciate your interest in CRA and the support you have provided the company over the years. We will be participating in investor meetings and conferences over the coming months, and we look forward to updating you on our progress on our fourth quarter call. With that, that concludes today's call. Thank you, everyone.

Operator

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.