EX-99.1 2 d535904dex991.htm EX-99.1

Second Quarter 2023 Earnings Conference Call FTI Consulting, Inc. July 27, 2023 Exhibit 99.1

Cautionary Note About Forward Looking Statements This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve uncertainties and risks. Forward-looking statements include statements concerning our plans, initiatives, projections, prospects, policies and practices, objectives, goals, commitments, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends, new or changes to laws and regulations, including U.S. and foreign tax laws, environmental, social and governance ("ESG")-related issues, climate change-related matters, scientific and technological developments, and other information that is not historical, including statements regarding estimates of our future financial results. When used in this presentation, words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "commits," "aspires," "forecasts," "future," "goal," "seeks" and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, estimates of our future financial results, are based upon our expectations at the time we make them and various assumptions. Our actual financial results, performance or achievements and outcomes could differ materially from those expressed in, or implied by, any forward-looking statements. Further, unaudited quarterly results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flows in prior periods and expects that this will occur from time to time in the future. Any references to standards of measurement and performance made regarding our climate change-, ESG- or other sustainability-related plans, goals, commitments, intentions, aspirations, forecasts or projections, or expectations are developing and based on assumptions. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management’s plans, expectations, intentions, aspirations, beliefs, goals, estimates, forecasts and projections, including any that are ESG- or sustainability-related, will result or be achieved. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer; the mix of the geographic locations where our clients are located or where services are performed; fluctuations in the price per share of our common stock; adverse financial, real estate or other market and general economic conditions; the impact of any pandemic or public health crisis, including COVID-19, and related events that are beyond our control, which could affect our segments, practices and the geographic regions in which we conduct business differently and adversely; and other future events, which could impact each of our segments, practices and the geographic regions in which we conduct business differently and could be outside of our control; the pace and timing of the consummation and integration of future acquisitions; the Company’s ability to realize cost savings and efficiencies; competitive and general economic conditions; retention of staff and clients; new laws and regulations or changes thereto; and other risks described under the heading "Item 1A, Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 23, 2023 and in the Company’s other filings with the SEC. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

Second Quarter 2023: Financial Review (1) See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Financial Measures” for the reconciliations and definitions of Adjusted Earnings per Diluted Share and Adjusted EBITDA, which are non-GAAP financial measures, to the most directly comparable GAAP financial measures, and for the definition of Adjusted EBITDA Margin, which is a non-GAAP financial measure. Consolidated Results Q2 2023 Q1 2023 % Variance Q2 2022 % Variance Percentage Change in Revenues Excluding the Estimated Impact of Foreign Currency Translation for Q2 2023 vs. Q2 2022 Revenues $864,591 $806,706 7.2% $754,992 14.5% 14.7% Net income $62,395 $47,547 31.2% $51,428 21.3% Earnings per Diluted Share $1.75 $1.34 30.6% $1.43 22.4% Adjusted Earnings per Diluted Share (1) $1.75 $1.34 30.6% $1.43 22.4% Adjusted EBITDA (1) $100,230 $78,427 27.8% $76,160 31.6% Adjusted EBITDA Margin (1) 11.6% 9.7% — 10.1% — Segment Results Corporate Finance & Restructuring Revenues $300,449 $299,987 0.2% $277,067 8.4% 8.6% Adjusted Segment EBITDA $50,028 $55,020 -9.1% $54,950 -9.0% Adjusted Segment EBITDA Margin 16.7% 18.3% — 19.8% — Forensic and Litigation Consulting Revenues $182,223 $173,404 5.1% $164,248 10.9% 11.4% Adjusted Segment EBITDA $21,080 $18,611 13.3% $16,707 26.2% Adjusted Segment EBITDA Margin 11.6% 10.7% — 10.2% — Economic Consulting Revenues $201,822 $169,595 19.0% $164,041 23.0% 22.8% Adjusted Segment EBITDA $35,523 $14,193 150.3% $21,646 64.1% Adjusted Segment EBITDA Margin 17.6% 8.4% — 13.2% — Technology Revenues $97,444 $90,618 7.5% $77,782 25.3% 25.4% Adjusted Segment EBITDA $20,087 $15,366 30.7% $8,365 140.1% Adjusted Segment EBITDA Margin 20.6% 17.0% — 10.8% — Strategic Communications Revenues $82,653 $73,102 13.1% $71,854 15.0% 15.3% Adjusted Segment EBITDA $12,263 $9,556 28.3% $11,472 6.9% Adjusted Segment EBITDA Margin 14.8% 13.1% — 16.0% — All numbers in $000s, except for per share data and percentages

Cash Position and Capital Allocation Snapshot As of June 30, 2023, March 31, 2023 and June 30, 2022 (1)DSO is a performance measure used to assess how quickly revenues are collected by the Company. We calculate DSO at the end of each reporting period by dividing net accounts receivable reduced by billings in excess of services provided, by revenues for the quarter, adjusted for changes in foreign exchange rates. We multiply the result by the number of days in the quarter. (2)Total debt excludes the impact of unamortized deferred issuance costs related to our 2.0% convertible senior notes due 2023 (“2023 Convertible Notes”). (3)See “Financial Tables” and “End Notes: FTI Consulting Non-GAAP Financial Measures” for the reconciliation and definition of Free Cash Flow, which is a non-GAAP financial measure, to the most directly comparable GAAP financial measure. All numbers in $000s, except for DSO As of June 30, 2023 As of March 31, 2023 As of June 30, 2022 Cash and cash equivalents $203,539 $238,539 $255,730 Accounts receivable, net $1,138,061 $988,144 $905,548 Days Sales Outstanding ("DSO") (1) 111 102 102 Net cash provided by (used in) operating activities $(10,994) $(254,206) $35,047 Purchases of property and equipment $(11,052) $(18,033) $(13,028) Purchase and retirement of common stock $— $(20,982) $— Total Debt (2) $340,757 $361,211 $316,222 Free Cash Flow (3) $(22,046) $(272,239) $22,019

Three Months Ended June 30, 2023 and March 31, 2023 Reconciliations of Net Income and Operating Income to Adjusted EBITDA All numbers in $000s (1)See “End Notes: FTI Consulting Non-GAAP Financial Measures” for the definition of Adjusted EBITDA, which is a non-GAAP financial measure. Three Months Ended June 30, 2023 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total Net income $62,395 Interest income and other 584 Interest expense 3,022 Income tax provision 22,708 Operating income $46,727 $19,274 $34,024 $16,432 $11,278 $(39,026) $88,709 Depreciation and amortization 2,191 1,583 1,499 3,655 901 275 10,104 Amortization of intangible assets 1,110 223 — — 84 — 1,417 Adjusted EBITDA (1) $50,028 $21,080 $35,523 $20,087 $12,263 $(38,751) $100,230 Three Months Ended March 31, 2023 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total Net income $47,547 Interest income and other 1,342 Interest expense 2,939 Income tax provision 14,974 Operating income $51,216 $17,048 $12,700 $11,890 $8,683 $(34,735) $66,802 Depreciation and amortization 1,892 1,379 1,493 3,476 787 416 9,443 Amortization of intangible assets 1,912 184 — — 86 — 2,182 Adjusted EBITDA (1) $55,020 $18,611 $14,193 $15,366 $9,556 $(34,319) $78,427

Three Months Ended June 30, 2022 Reconciliations of Net Income and Operating Income to Adjusted EBITDA All numbers in $000s (1)See “End Notes: FTI Consulting Non-GAAP Financial Measures” for the definition of Adjusted EBITDA, which is a non-GAAP financial measure. Three Months Ended June 30, 2022 Corporate Finance & Restructuring Forensic and Litigation Consulting Economic Consulting Technology Strategic Communications Unallocated Corporate Total Net income $51,428 Interest income and other (2,994) Interest expense 2,448 Income tax provision 13,353 Operating income $50,935 $15,014 $20,439 $4,930 $10,633 $(37,716) $64,235 Depreciation and amortization 1,708 1,448 1,207 3,435 654 736 9,188 Amortization of intangible assets 2,307 245 — — 185 — 2,737 Adjusted EBITDA (1) $54,950 $16,707 $21,646 $8,365 $11,472 $(36,980) $76,160

Three Months Ended June 30, 2023, March 31, 2023 and June 30, 2022 Reconciliations of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow (1)See “End Notes: FTI Consulting Non-GAAP Financial Measures” for the definition of Free Cash Flow, which is a non-GAAP financial measure. All numbers in $000s Three Months Ended June 30, 2023 Three Months Ended March 31, 2023 Three Months Ended June 30, 2022 Net cash provided by (used in) operating activities $(10,994) $(254,206) $35,047 Purchases of property and equipment (11,052) (18,033) (13,028) Free Cash Flow (1) $(22,046) $(272,239) $22,019

End Notes: FTI Consulting Non-GAAP Financial Measures In this presentation, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Certain of these measures are considered “non-GAAP financial measures” under the Securities and Exchange Commission ("SEC") rules. Specifically, we have referred to the following non-GAAP financial measures in this presentation: Adjusted EBITDA Adjusted EBITDA Margin Adjusted Net Income Adjusted Earnings per Diluted Share Free Cash Flow We have included the definitions of Segment Operating Income and Adjusted Segment EBITDA, which are GAAP financial measures, below in order to more fully define the components of certain non-GAAP financial measures in this presentation. We define Segment Operating Income as a segment’s share of consolidated operating income. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment’s share of consolidated operating income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment’s ability to generate cash. We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business and losses on early extinguishment of debt. We believe that this non-GAAP financial measure, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that this non-GAAP financial measure, considered along with corresponding GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies. We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues. We define Adjusted Net Income and Adjusted Earnings per Diluted Share (“Adjusted EPS”), which are non-GAAP financial measures, as net income and earnings per diluted share ("EPS"), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes and the gain or loss on sale of a business. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with an additional understanding of our business operating results, including underlying trends. We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company’s ability to generate cash for ongoing business operations and other capital deployment. Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non-GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows.

Second Quarter 2023: Select Geographic Review Consolidated Revenues by Region Region Q2 2023 Q1 2023 % Variance Q2 2022 % Variance Percentage Change in Revenues Excluding the Estimated Impact of Foreign Currency Translation for Q2 2023 vs. Q2 2022 North America $562,306 $526,089 6.9% $488,243 15.2% 15.3% EMEA $236,511 $222,490 6.3% $201,378 17.4% 17.1% Asia Pacific $53,067 $49,543 7.1% $51,217 3.6% 6.4% Latin America $12,707 $8,584 48.0% $14,154 -10.2% -10.3% Percentage of Consolidated Revenues by Region Region Q2 2023 Q1 2023 Q2 2022 North America 65.0% 65.2% 64.7% EMEA 27.4% 27.6% 26.7% Asia Pacific 6.1% 6.1% 6.8% Latin America 1.5% 1.1% 1.9% All numbers in $000s, except for percentages

Second Quarter 2023 Select Awards & Accolades Recognized as a Top 50 Consulting Firm by The Consulting Report The Consulting Report Recognized in 2023 Chambers Crisis & Risk Management, FinTech and Litigation Support Guides Chambers FTI Consulting named one of America’s Best Employers for New Grads by Forbes magazine Forbes Recognized as the leading provider in The National Law Journal Best of 2023 in the following categories: Cybersecurity Consultant Corporate Investigations Contract Lifecycle Management Demonstrative Evidence Forensic Accounting Provider Global Risk & Investigations Consultant Managed Document Review Managed e-Discovery and Litigation Support Technology Assisted Review Trial Technology “Hot Seat” Provider The National Law Journal

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