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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 4, 2025

OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to___________

Commission File Number 0-18655

EXPONENT, INC.

(Exact name of registrant as specified in its charter)

delaware |  | 77-0218904
(State or other jurisdiction of |  | (I.R.S. Employer Identification No.)
incorporation or organization) |  |
149 COMMONWEALTH DRIVE, MENLO PARK, California |  | 94025
(Address of principal executive office) |  | (Zip Code)

(650) 326-9400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol |  | Name of each exchange on which registered
Common Stock, par value $0.001 per share |  | EXPO |  | Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes |  | ☒ |  | No |  | ☐ |

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes |  | ☒ |  | No |  | ☐ |

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☒ |  | Accelerated filer | ☐
Non-accelerated filer | ☐ |  | Smaller reporting company | ☐
Emerging growth company | ☐ |  |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes |  | ☐ |  | No |  | ☒ |

As of August 1, 2025, the latest practicable date, the registrant had 50,501,135 shares of common stock outstanding.

EXPONENT, INC.

FORM 10-Q

TABLE OF CONTENTS

|  |  |  | Page
PART I – FINANCIAL INFORMATION |  | 3
Item 1. |  | Financial Statements (unaudited): |  | 3
|  | Condensed Consolidated Balance Sheets July 4, 2025 and January 3, 2025 |  | 3
|  | Condensed Consolidated Statements of Income For the Three and Six Months Ended July 4, 2025 and June 28, 2024 |  | 4
|  | Condensed Consolidated Statements of Comprehensive Income For the Three and Six Months Ended July 4, 2025 and June 28, 2024 |  | 5
|  | Condensed Consolidated Statements of Stockholders’ Equity For the Three and Six Months Ended July 4, 2025 and June 28, 2024 |  | 6
|  | Condensed Consolidated Statements of Cash Flows For the Six Months Ended July 4, 2025 and June 28, 2024 |  | 8
|  | Notes to Unaudited Condensed Consolidated Financial Statements |  | 9
Item 2. |  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |  | 20
Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk |  | 29
Item 4. |  | Controls and Procedures |  | 29
PART II – OTHER INFORMATION |  | 30
Item 1. |  | Legal Proceedings |  | 30
Item 1A. |  | Risk Factors |  | 30
Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 30
Item 3. |  | Defaults Upon Senior Securities |  | 30
Item 4. |  | Mine Safety Disclosures |  | 30
Item 5. |  | Other Information |  | 30
Item 6. |  | Exhibits |  | 32
|  | Signatures |  | 33

- 2 -

PART I – FINANC IAL INFORMATION

Item 1. Financ ial Statements

EXPONENT, INC.

Condensed Consolida ted Balance Sheets

July 4, 2025 and January 3, 2025

(unaudited)

(In thousands, except par value) |  | July 4, 2025 (Unaudited) |  |  | January 3, 2025 |
Assets |  |  |  |  |  |
Current assets: |  |  |  |  |  |
Cash and cash equivalents |  | $ | 231,801 |  |  | $ | 258,901 |
Accounts receivable, net of allowance for contract losses and doubtful accounts of $6,180 and $6,141 at July 4, 2025 and January 3, 2025, respectively |  |  | 171,012 |  |  |  | 161,407 |
Prepaid expenses and other current assets |  |  | 22,838 |  |  |  | 26,573 |
Total current assets |  |  | 425,651 |  |  |  | 446,881 |
Property, equipment and leasehold improvements, net of accumulated depreciation and amortization of $117,180 and $112,202 at July 4, 2025 and January 3, 2025, respectively |  |  | 71,637 |  |  |  | 73,007 |
Operating lease right-of-use assets |  |  | 72,338 |  |  |  | 75,248 |
Goodwill |  |  | 8,607 |  |  |  | 8,607 |
Deferred income taxes |  |  | 60,221 |  |  |  | 57,127 |
Deferred compensation plan assets |  |  | 114,929 |  |  |  | 110,259 |
Other assets |  |  | 6,047 |  |  |  | 6,141 |
Total assets |  | $ | 759,430 |  |  | $ | 777,270 |
Liabilities and Stockholders’ Equity |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |
Accounts payable and accrued liabilities |  | $ | 25,268 |  |  | $ | 22,136 |
Accrued payroll and employee benefits |  |  | 92,197 |  |  |  | 119,285 |
Deferred revenues |  |  | 11,653 |  |  |  | 16,369 |
Operating lease liabilities |  |  | 5,851 |  |  |  | 5,393 |
Total current liabilities |  |  | 134,969 |  |  |  | 163,183 |
Other liabilities |  |  | 4,658 |  |  |  | 4,289 |
Deferred compensation plan liabilities |  |  | 117,555 |  |  |  | 112,646 |
Operating lease liabilities |  |  | 74,472 |  |  |  | 76,084 |
Total liabilities |  |  | 331,654 |  |  |  | 356,202 |
Stockholders’ equity: |  |  |  |  |  |
Common stock, $0.001 par value; 120,000 shares authorized; 65,707 shares issued at July 4, 2025 and January 3, 2025 |  |  | 66 |  |  |  | 66 |
Additional paid-in capital |  |  | 364,304 |  |  |  | 345,689 |
Accumulated other comprehensive loss |  |  |  |  |  |
Foreign currency translation adjustments |  |  | (2,493 | ) |  |  | (3,791 | )
Retained earnings |  |  | 646,038 |  |  |  | 624,151 |
Treasury stock, at cost; 15,205 and 14,893 shares held at July 4, 2025 and January 3, 2025, respectively |  |  | (580,139 | ) |  |  | (545,047 | )
Total stockholders’ equity |  |  | 427,776 |  |  |  | 421,068 |
Total liabilities and stockholders’ equity |  | $ | 759,430 |  |  | $ | 777,270 |

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 3 -

EXPONENT, INC.

Condensed Consolidated Statements of Income

# For the Three and Six Months Ended July 4, 2025 and June 28, 2024

(unaudited)

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands, except per share data) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Revenues before reimbursements |  | $ | 132,868 |  |  | $ | 132,434 |  |  | $ | 270,305 |  |  | $ | 269,641 |
Reimbursements |  |  | 9,094 |  |  |  | 8,102 |  |  |  | 17,164 |  |  |  | 15,828 |
Revenues |  |  | 141,962 |  |  |  | 140,536 |  |  |  | 287,469 |  |  |  | 285,469 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Compensation and related expenses |  |  | 97,474 |  |  |  | 79,466 |  |  |  | 173,377 |  |  |  | 169,793 |
Other operating expenses |  |  | 12,072 |  |  |  | 11,185 |  |  |  | 24,167 |  |  |  | 21,716 |
Reimbursable expenses |  |  | 9,094 |  |  |  | 8,102 |  |  |  | 17,164 |  |  |  | 15,828 |
General and administrative expenses |  |  | 6,145 |  |  |  | 6,039 |  |  |  | 11,152 |  |  |  | 11,675 |
Total operating expenses |  |  | 124,785 |  |  |  | 104,792 |  |  |  | 225,860 |  |  |  | 219,012 |
Operating income |  |  | 17,177 |  |  |  | 35,744 |  |  |  | 61,609 |  |  |  | 66,457 |
Other income, net: |  |  |  |  |  |  |  |  |  |  |  |
Interest income, net |  |  | 2,344 |  |  |  | 2,231 |  |  |  | 5,058 |  |  |  | 4,857 |
Miscellaneous income, net |  |  | 17,294 |  |  |  | 1,707 |  |  |  | 7,908 |  |  |  | 8,791 |
Total other income, net |  |  | 19,638 |  |  |  | 3,938 |  |  |  | 12,966 |  |  |  | 13,648 |
Income before income taxes |  |  | 36,815 |  |  |  | 39,682 |  |  |  | 74,575 |  |  |  | 80,105 |
Income taxes |  |  | 10,262 |  |  |  | 10,455 |  |  |  | 21,372 |  |  |  | 20,736 |
Net income |  | $ | 26,553 |  |  | $ | 29,227 |  |  | $ | 53,203 |  |  | $ | 59,369 |
Net income per share: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | 0.52 |  |  | $ | 0.57 |  |  | $ | 1.04 |  |  | $ | 1.16 |
Diluted |  | $ | 0.52 |  |  | $ | 0.57 |  |  | $ | 1.03 |  |  | $ | 1.15 |
Shares used in per share computations: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 51,185 |  |  |  | 51,111 |  |  |  | 51,234 |  |  |  | 51,059 |
Diluted |  |  | 51,502 |  |  |  | 51,517 |  |  |  | 51,587 |  |  |  | 51,475 |
Cash dividends declared per common share |  | $ | 0.30 |  |  | $ | 0.28 |  |  | $ | 0.60 |  |  | $ | 0.56 |

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 4 -

EXPONENT, INC.

Condensed Consolidated Statem ents of Comprehensive Income

# For the Three and Six Months Ended July 4, 2025 and June 28, 2024

(unaudited)

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Net income |  | $ | 26,553 |  |  | $ | 29,227 |  |  | $ | 53,203 |  |  | $ | 59,369 |
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency translation adjustments, net of tax |  |  | 352 |  |  |  | 14 |  |  |  | 1,298 |  |  |  | (196 | )
Comprehensive income |  | $ | 26,905 |  |  | $ | 29,241 |  |  | $ | 54,501 |  |  | $ | 59,173 |

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 5 -

EXPONENT, INC

Condensed Consolidated Statements of Stockholders’ Equity

# For the Three and Six Months Ended July 4, 2025 and June 28, 2024

(unaudited)

|  | Three and Six Months Ended July 4, 2025 |
|  | Common Stock |  |  | Additional paid-in |  |  | Accumulated other comprehensive |  |  | Retained |  |  | Treasury Stock |  |  |  |
(In thousands) |  | Shares |  |  | Amount |  |  | capital |  |  | loss |  |  | earnings |  |  | Shares |  |  | Amount |  |  | Total |
Balance at January 3, 2025 |  |  | 65,707 |  |  | $ | 66 |  |  | $ | 345,689 |  |  | $ | (3,791 | ) |  | $ | 624,151 |  |  |  | 14,893 |  |  | $ | (545,047 | ) |  | $ | 421,068 |
Employee stock purchase plan |  |  | - |  |  |  | - |  |  |  | 326 |  |  |  | - |  |  |  | - |  |  |  | (5 | ) |  |  | 58 |  |  |  | 384 |
Amortization of unrecognized stock-based compensation |  |  | - |  |  |  | - |  |  |  | 5,028 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,028 |
Purchase of treasury shares |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 65 |  |  |  | (5,000 | ) |  |  | (5,000 | )
Foreign currency translation adjustments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 946 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 946 |
Grant of restricted stock units to settle accrued bonus |  |  | - |  |  |  | - |  |  |  | 12,179 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 12,179 |
Settlement of restricted stock units |  |  | - |  |  |  | - |  |  |  | (1,499 | ) |  |  | - |  |  |  | - |  |  |  | (95 | ) |  |  | (2,667 | ) |  |  | (4,166 | )
Exercise of stock options |  |  | - |  |  |  | - |  |  |  | 53 |  |  |  | - |  |  |  | - |  |  |  | (5 | ) |  |  | 47 |  |  |  | 100 |
Dividends and dividend equivalent rights |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (15,781 | ) |  |  | - |  |  |  | - |  |  |  | (15,781 | )
Net income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 26,650 |  |  |  | - |  |  |  | - |  |  |  | 26,650 |
Balance at April 4, 2025 |  |  | 65,707 |  |  | $ | 66 |  |  | $ | 361,776 |  |  | $ | (2,845 | ) |  | $ | 635,020 |  |  |  | 14,853 |  |  | $ | (552,609 | ) |  | $ | 441,408 |
Employee stock purchase plan |  |  | - |  |  |  | - |  |  |  | 361 |  |  |  | - |  |  |  | - |  |  |  | (6 | ) |  |  | 66 |  |  |  | 427 |
Amortization of unrecognized stock-based compensation |  |  | - |  |  |  | - |  |  |  | 2,251 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,251 |
Purchase of treasury shares |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 366 |  |  |  | (27,680 | ) |  |  | (27,680 | )
Foreign currency translation adjustments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 352 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 352 |
Settlement of restricted stock units |  |  | - |  |  |  | - |  |  |  | (84 | ) |  |  | - |  |  |  | - |  |  |  | (8 | ) |  |  | 84 |  |  |  | - |
Dividends and dividend equivalent rights |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (15,535 | ) |  |  | - |  |  |  | - |  |  |  | (15,535 | )
Net income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 26,553 |  |  |  | - |  |  |  | - |  |  |  | 26,553 |
Balance at July 4, 2025 |  |  | 65,707 |  |  | $ | 66 |  |  | $ | 364,304 |  |  | $ | (2,493 | ) |  | $ | 646,038 |  |  |  | 15,205 |  |  | $ | (580,139 | ) |  | $ | 427,776 |

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 6 -

EXPONENT, INC

Condensed Consolidated Statements of Stockholders’ Equity

# For the Three and Six Months Ended July 4, 2025 and June 28, 2024

(unaudited)

|  | Three and Six Months Ended June 28, 2024 |
|  | Common Stock |  |  | Additional paid-in |  |  | Accumulated other comprehensive |  |  | Retained |  |  | Treasury Stock |  |  |  |
(In thousands) |  | Shares |  |  | Amount |  |  | capital |  |  | income (loss) |  |  | earnings |  |  | Shares |  |  | Amount |  |  | Total |
Balance at December 29, 2023 |  |  | 65,707 |  |  | $ | 66 |  |  | $ | 321,448 |  |  | $ | (2,977 | ) |  | $ | 574,082 |  |  |  | 15,134 |  |  | $ | (536,534 | ) |  | $ | 356,085 |
Employee stock purchase plan |  |  | - |  |  |  | - |  |  |  | 450 |  |  |  | - |  |  |  | - |  |  |  | (7 | ) |  |  | 68 |  |  |  | 518 |
Amortization of unrecognized stock-based compensation |  |  | - |  |  |  | - |  |  |  | 4,026 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,026 |
Purchase of treasury shares |  |  |  |  |  |  |  |  | - |  |  |  | - |  |  |  |  |  |  | 71 |  |  |  | (5,466 | ) |  |  | (5,466 | )
Foreign currency translation adjustments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (210 | ) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (210 | )
Grant of restricted stock units to settle accrued bonus |  |  | - |  |  |  | - |  |  |  | 10,846 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 10,846 |
Settlement of restricted stock units |  |  | - |  |  |  | - |  |  |  | (1,797 | ) |  |  | - |  |  |  | (720 | ) |  |  | (159 | ) |  |  | (4,279 | ) |  |  | (6,796 | )
Exercise of stock options |  |  | - |  |  |  | - |  |  |  | 41 |  |  |  | - |  |  |  | - |  |  |  | (6 | ) |  |  | 59 |  |  |  | 100 |
Dividends and dividend equivalent rights |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (14,934 | ) |  |  | - |  |  |  | - |  |  |  | (14,934 | )
Net income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 30,142 |  |  |  | - |  |  |  | - |  |  |  | 30,142 |
Balance at March 29, 2024 |  |  | 65,707 |  |  | $ | 66 |  |  | $ | 335,014 |  |  | $ | (3,187 | ) |  | $ | 588,570 |  |  |  | 15,033 |  |  | $ | (546,152 | ) |  | $ | 374,311 |
Employee stock purchase plan |  |  | - |  |  |  | - |  |  |  | 392 |  |  |  | - |  |  |  | - |  |  |  | (5 | ) |  |  | 48 |  |  |  | 440 |
Amortization of unrecognized stock-based compensation |  |  | - |  |  |  | - |  |  |  | 2,495 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,495 |
Purchase of treasury shares |  |  |  |  |  |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3 |  |  |  | (244 | ) |  |  | (244 | )
Foreign currency translation adjustments |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 14 |
Settlement of restricted stock units |  |  | - |  |  |  | - |  |  |  | (78 | ) |  |  | - |  |  |  | - |  |  |  | (7 | ) |  |  | 78 |  |  |  | - |
Exercise of stock options |  |  |  |  |  |  |  |  | 911 |  |  |  | - |  |  |  | - |  |  |  | (48 | ) |  |  | 483 |  |  |  | 1,394 |
Dividends and dividend equivalent rights |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (14,424 | ) |  |  | - |  |  |  | - |  |  |  | (14,424 | )
Net income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 29,227 |  |  |  | - |  |  |  | - |  |  |  | 29,227 |
Balance at June 28, 2024 |  |  | 65,707 |  |  | $ | 66 |  |  | $ | 338,734 |  |  | $ | (3,173 | ) |  | $ | 603,373 |  |  |  | 14,976 |  |  | $ | (545,787 | ) |  | $ | 393,213 |

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 7 -

EXPONENT, INC.

# Condensed Consolidated S tatements of Cash Flows

# For the Six Months Ended July 4, 2025 and June 28, 2024

(unaudited)

|  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |
Cash flows from operating activities: |  |  |  |  |  |
Net income |  | $ | 53,203 |  |  | $ | 59,369 |
Adjustments to reconcile net income to net cash provided by operating activities: |  |  |  |  |  |
Depreciation and amortization of property, equipment and leasehold improvements |  |  | 5,012 |  |  |  | 4,810 |
Provision for contract losses and doubtful accounts |  |  | 586 |  |  |  | 2,359 |
Stock-based compensation |  |  | 13,426 |  |  |  | 12,917 |
Deferred income tax provision |  |  | (3,094 | ) |  |  | 2,264 |
Changes in operating assets and liabilities: |  |  |  |  |  |
Accounts receivable |  |  | (10,191 | ) |  |  | (869 | )
Prepaid expenses and other current assets |  |  | 7,135 |  |  |  | 1,769 |
Change in operating leases |  |  | 1,756 |  |  |  | 79 |
Accounts payable and accrued liabilities |  |  | 4,153 |  |  |  | 2,555 |
Accrued payroll and employee benefits |  |  | (23,774 | ) |  |  | (18,548 | )
Deferred revenues |  |  | (4,716 | ) |  |  | (7,934 | )
Net cash provided by operating activities |  |  | 43,496 |  |  |  | 58,771 |
Cash flows from investing activities: |  |  |  |  |  |
Capital expenditures |  |  | (4,028 | ) |  |  | (2,628 | )
Net cash used in investing activities |  |  | (4,028 | ) |  |  | (2,628 | )
Cash flows from financing activities: |  |  |  |  |  |
Payroll taxes for restricted stock units |  |  | (4,166 | ) |  |  | (6,796 | )
Repurchase of common stock |  |  | (32,680 | ) |  |  | (5,710 | )
Exercise of stock-based payment awards |  |  | 911 |  |  |  | 2,453 |
Dividends and dividend equivalents rights |  |  | (31,582 | ) |  |  | (29,776 | )
Net cash used in financing activities |  |  | (67,517 | ) |  |  | (39,829 | )
Effect of foreign currency exchange rates on cash and cash equivalents |  |  | 949 |  |  |  | (202 | )
Net change in cash and cash equivalents |  |  | (27,100 | ) |  |  | 16,112 |
Cash and cash equivalents at beginning of period |  |  | 258,901 |  |  |  | 187,150 |
Cash and cash equivalents at end of period |  | $ | 231,801 |  |  | $ | 203,262 |

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 8 -

EXPONENT, INC.

NOTES TO UNAUDITED CONDENSED CON SOLIDATED FINANCIAL STATEMENTS

Note 1: Basis of Presentation

Exponent, Inc. (referred to as the “Company” or “Exponent”) is an engineering and scientific consulting firm that provides solutions to complex problems. The Company operates on a 52-53 week fiscal year ending on the Friday closest to the last day of December.

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not contain all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments which are necessary for the fair presentation of the condensed consolidated financial statements have been included and all such adjustments are of a normal and recurring nature. The operating results for the three and six months ended July 4, 2025 are not necessarily representative of the results of future quarterly or annual periods. The following information should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2025, which was filed with the U.S. Securities and Exchange Commission on February 28, 2025 and amended on April 18, 2025.

The unaudited condensed consolidated financial statements include the accounts of Exponent and its subsidiaries, which are all wholly owned. All intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Items subject to such estimates and assumptions include accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts. Actual results could differ from those estimates.

Recent Accounting Pronouncement Not Yet Adopted

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. The standard is effective for annual reporting periods beginning after December 15, 2024. The Company is evaluating the effect that this standard may have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (subtopic 220-40), which requires disclosure of disaggregation of certain relevant expenses included in the statements of operations on an annual and interim basis. ASU 2024-03 will be effective for our annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028. The amendments must be applied retrospectively, and early adoption is permitted. The Company is evaluating the effect that this standard may have on its consolidated financial statements and related disclosures.

Note 2: Revenue Recognition

Substantially all of the Company’s engagements are performed under time and materials or fixed-price arrangements. For time and materials contracts, the Company utilizes the practical expedient under Accounting Standards Codification 606 – Revenue from Contracts with Customers, which states if an entity has a right to consideration from a customer in an amount that corresponds directly with the value of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided) then the entity may recognize revenue in the amount to which the entity has a right to invoice.

- 9 -

The following table discloses the percent of the Company’s revenue generated from time and materials contracts:

|  | Three Months Ended |  |  | Six Months Ended |
|  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Engineering & other scientific |  |  | 65 | % |  |  | 62 | % |  |  | 66 | % |  |  | 64 | %
Environmental and health |  |  | 15 | % |  |  | 15 | % |  |  | 14 | % |  |  | 16 | %
Total time and materials revenues |  |  | 80 | % |  |  | 77 | % |  |  | 80 | % |  |  | 80 | %

For fixed-price contracts, the Company recognizes revenue over time because of the continuous transfer of control to the customer. The customer typically controls the work in process as evidenced either by contractual termination clauses or by the Company’s rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. Revenue for fixed-price contracts is recognized based on the relationship of incurred labor hours at standard rates to the Company’s estimate of the total labor hours at standard rates it expects to incur over the term of the contract. The Company believes this methodology achieves a reliable measure of the revenue from the consulting services it provides to its customers under fixed-price contracts given the nature of the consulting services the Company provides.

The following table discloses the percent of the Company’s revenue generated from fixed price contracts:

|  | Three Months Ended |  |  | Six Months Ended |
|  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Engineering & other scientific |  |  | 19 | % |  |  | 22 | % |  |  | 19 | % |  |  | 19 | %
Environmental and health |  |  | 1 | % |  |  | 1 | % |  |  | 1 | % |  |  | 1 | %
Total fixed price revenues |  |  | 20 | % |  |  | 23 | % |  |  | 20 | % |  |  | 20 | %

Deferred revenues represent amounts billed to clients in advance of services provided. During the second quarter of 20 25, $6,658,000 o f revenues were recognized that were included in the deferred revenue balance at April 4, 2025. During the first six months of 2025, $8,326,000 of rev enues were recognized that were included in the deferred revenue balance at January 3, 2025.

Reimbursements, including those related to travel and other out-of-pocket expenses, and other similar third- party costs such as the cost of materials and certain subcontracts, are included in revenues, and an equivalent amount of reimbursable expenses are included in operating expenses. Any mark-up on reimbursable expenses is included in revenues before reimbursements. The Company reports revenues net of subcontractor fees for certain subcontracts where the Company has determined that it is acting as an agent because its performance obligation is to arrange for the provision of goods or services by another party. The total amount of subcontractor fees not included in revenues because the Company was acting as an agent were $3,178,000 and $3,787,000 during the second quarter of 2025 and 2024, respectively, and $6,682,000 and $6,533,000 during the first six months of 2025 and 2024, respectively.

- 10 -

Note 3: Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including money market securities, trading fixed income and equity securities held in its deferred compensation plan and the liability associated with its deferred compensation plan. There were no transfers between fair value measurement levels during the three and six months ended July 4, 2025 and June 28, 2024. Any transfers between fair value measurement levels would be recorded on the actual date of the event or change in circumstances that caused the transfer. The fair value of these certain financial assets and liabilities was determined using the following inputs at July 4, 2025:

|  | Fair Value Measurements at Reporting Date Using |
(In thousands) |  | Total |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Money market securities (1) |  | $ | 58,979 |  |  | $ | 58,979 |  |  | $ | - |  |  | $ | - |
Fixed income trading securities held in deferred compensation plan (2) |  |  | 43,899 |  |  |  | 43,899 |  |  |  | - |  |  |  | - |
Equity trading securities held in deferred compensation plan (2) |  |  | 88,417 |  |  |  | 88,417 |  |  |  | - |  |  |  | - |
Total |  | $ | 191,295 |  |  | $ | 191,295 |  |  | $ | - |  |  | $ | - |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Deferred compensation plan (3) |  |  | 134,941 |  |  |  | 134,941 |  |  |  | - |  |  |  | - |
Total |  | $ | 134,941 |  |  | $ | 134,941 |  |  | $ | - |  |  | $ | - |

(1)
Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.
(2)
Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.
(3)
Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet.

- 11 -

The fair value of these certain financial assets and liabilities was determined using the following inputs at January 3, 2025:

|  | Fair Value Measurements at Reporting Date Using |
(In thousands) |  | Total |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets |  |  |  |  |  |  |  |  |  |  |  |
Money market securities (1) |  | $ | 57,549 |  |  | $ | 57,549 |  |  | $ | - |  |  | $ | - |
Fixed income trading securities held in deferred compensation plan (2) |  |  | 42,291 |  |  |  | 42,291 |  |  |  | - |  |  |  | - |
Equity trading securities held in deferred compensation plan (2) |  |  | 85,546 |  |  |  | 85,546 |  |  |  | - |  |  |  | - |
Total |  | $ | 185,386 |  |  | $ | 185,386 |  |  | $ | - |  |  | $ | - |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |
Deferred compensation plan (3) |  |  | 127,622 |  |  |  | 127,622 |  |  |  | - |  |  |  | - |
Total |  | $ | 127,622 |  |  | $ | 127,622 |  |  | $ | - |  |  | $ | - |

(1)
Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.
(2)
Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.
(3)
Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet.

Money market securities as of July 4, 2025 and January 3, 2025 represent obligations of the United States Treasury. Fixed income and equity trading securities represent mutual funds held in the Company’s deferred compensation plan. See Note 6 for additional information about the Company’s deferred compensation plan.

Cash and cash equivalents consisted of the following as of July 4, 2025:

|  |  |  |  | Gross |  |  | Gross |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Estimated |
(In thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
Classified as current assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 172,822 |  |  | $ | - |  |  | $ | - |  |  | $ | 172,822 |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market securities |  |  | 58,979 |  |  |  | - |  |  |  | - |  |  |  | 58,979 |
Total cash equivalents |  |  | 58,979 |  |  |  | - |  |  |  | - |  |  |  | 58,979 |
Total cash and cash equivalents |  | $ | 231,801 |  |  | $ | - |  |  | $ | - |  |  | $ | 231,801 |

Cash and cash equivalents consisted of the following as of January 3, 2025:

|  |  |  |  | Gross |  |  | Gross |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Estimated |
(In thousands) |  | Cost |  |  | Gains |  |  | Losses |  |  | Fair Value |
Classified as current assets: |  |  |  |  |  |  |  |  |  |  |  |
Cash |  | $ | 201,352 |  |  | $ | - |  |  | $ | - |  |  | $ | 201,352 |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |
Money market securities |  |  | 57,549 |  |  |  | - |  |  |  | - |  |  |  | 57,549 |
Total cash equivalents |  |  | 57,549 |  |  |  | - |  |  |  | - |  |  |  | 57,549 |
Total cash and cash equivalents |  | $ | 258,901 |  |  | $ | - |  |  | $ | - |  |  | $ | 258,901 |

- 12 -

At July 4, 2025 and January 3, 2025, the Company did not have any assets or liabilities valued using significant unobservable inputs.

The following financial instruments are not measured at fair value on the Company's unaudited condensed consolidated balance sheet at July 4, 2025 and January 3, 2025, but require disclosure of their fair values: accounts receivable, other assets and accounts payable. Due to their short-term nature, the estimated fair value of such instruments at July 4, 2025 and January 3, 2025 approximates their carrying value as reported on the Company’s unaudited condensed consolidated balance sheet.

Note 4: Net Income Per Share

Basic per share amounts are computed using the weighted-average number of shares of common stock outstanding during the period. Diluted per share amounts are calculated using the weighted-average number of shares of common stock outstanding during the period and, when dilutive, the weighted-average number of potential shares of common stock from the issuance of common stock to satisfy outstanding restricted stock units and the exercise of outstanding options to purchase common stock using the treasury stock method.

The following schedule reconciles the shares used to calculate basic and diluted net income per share:

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Shares used in basic per share computation |  |  | 51,185 |  |  |  | 51,111 |  |  |  | 51,234 |  |  |  | 51,059 |
Effect of dilutive common stock options outstanding |  |  | 82 |  |  |  | 174 |  |  |  | 93 |  |  |  | 169 |
Effect of dilutive restricted stock units outstanding |  |  | 235 |  |  |  | 232 |  |  |  | 260 |  |  |  | 247 |
Shares used in diluted per share computation |  |  | 51,502 |  |  |  | 51,517 |  |  |  | 51,587 |  |  |  | 51,475 |

Common stock options to purchase 175,833 shares and 63,333 shares were excluded from the diluted per share calculation for the three months ended July 4, 2025 and June 28, 2024, respectively, due to their anti-dilutive effect. Common stock options to purchase 135,833 shares and 100,833 shares were excluded from the diluted per share calculation for the six months ended July 4, 2025 and June 28, 2024, respectively, due to their anti-dilutive effect.

Note 5: Stock-Based Compensation

## Restricted Stock Units

Restricted stock unit grants are designed to attract and retain employees, and to better align employee interests with those of the Company’s stockholders. For a select group of employees, up to 40% of their annual bonus is settled with fully vested restricted stock unit awards. Under these fully vested restricted stock unit awards, the holder of each award has the right to receive one share of the Company’s common stock for each fully vested restricted stock unit four years from the date of grant. Each individual who receives a fully vested restricted stock unit award is also granted a matching number of unvested restricted stock unit awards. Unvested restricted stock unit awards are also granted for select new hires and promotions. These unvested restricted stock unit awards generally cliff vest four years from the date of grant, at which time the holder of each award will have the right to receive one share of the Company’s common stock for each restricted stock unit award provided the holder of each award has met certain employment conditions. In the case of retirement at 59½ years or older, all unvested restricted stock unit awards will continue to vest, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company.

The value of these restricted stock unit awards is determined based on the market price of the Company’s common stock on the date of grant. The value of fully vested restricted stock unit awards issued is recorded as a reduction to accrued bonuses. The portion of bonus expense that the Company expects to settle with fully vested

- 13 -

restricted stock unit awards is recorded as stock-based compensation during the period the bonus is earned. The Company recorded stock-based compensation expense associated with accrued bonus awards of $2,995,000 and $3,082,000 during the three months ended July 4, 2025 and June 28, 2024, respectively. For the six months ended July 4, 2025 and June 28, 2024, the Company recorded stock-based compensation expense associated with accrued bonus awards of $6,147,000 and $6,396,000, respectively. The value of the unvested restricted stock unit awards granted is recognized on a straight-line basis over the shorter of the four-year vesting period or the period between the grant date and the date the award recipient turns 59½. If the award recipient is 59½ years or older on the date of grant, the value of the entire award is expensed upon grant. The Company recorded stock-based compensation expense associated with the unvested restricted stock unit awards of $2,076,000 and $2,127,000 during the three months ended July 4, 2025 and June 28, 2024, respectively. The Company recorded stock-based compensation expense associated with the unvested restricted stock unit awards of $6,316,000 and $5,834,000 during the six months ended July 4, 2025 and June 28, 2024, respectively.

## Stock Options

Stock options are granted for terms of ten years and generally vest 25% per year over a four-year period from the grant date. Unvested stock option awards will continue to vest in the case of retirement at 59½ years or older, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company. The value of the unvested stock option awards granted is recognized on a straight-line basis over the shorter of the four-year vesting period or the period between the grant date and the date the award recipient turns 59½. If the award recipient is 59½ years or older on the date of grant, the value of the entire award is expensed upon grant. The Company recorded stock-based compensation expense associated with stock option grants of $175,000 and $368,000 during the three months ended July 4, 2025 and June 28, 2024, respectively. The Company recorded stock-based compensation expense associated with stock option grants of $963,000 and $687,000 during the six months ended July 4, 2025 and June 28, 2024, respectively.

The Company uses the Black-Scholes option-pricing model to determine the fair value of options granted. The determination of the fair value of stock option awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include expected stock price volatility over the term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends.

The Company used historical exercise, forfeiture, and post-vesting expiration data to estimate the expected term of options granted. The historical volatility of the Company’s common stock over a period of time equal to the expected term of the options granted was used to estimate expected volatility. The risk-free interest rate used in the option-pricing model was based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the options. The dividend yield assumption considers the expectation of continued declaration of dividends, offset by option holders’ dividend equivalent rights.

The Company accounts for forfeitures of stock-based awards when they occur. All stock-based payment awards are recognized on a straight-line basis over the requisite service periods of the awards.

Note 6: Deferred Compensation Plans

The Company maintains nonqualified deferred compensation plans for the benefit of a select group of highly compensated employees. Under these plans, participants may elect to defer up to 100% of their compensation. Company assets that are earmarked to pay benefits under the plans are held in a rabbi trust and are subject to the claims of the Company’s creditors. As of July 4, 2025 and January 3, 2025, the invested amounts under the plans totaled $132,315,000 and $127,837,000, respectively, and are recorded in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet. These assets are classified as trading securities and are recorded at fair value with changes recorded as adjustments to miscellaneous income, net.

As of July 4, 2025 and January 3, 2025, vested amounts due under the plans totaled $134,941,000 and $127,622,000, respectively, and are recorded within accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheets. Changes in the liability are

- 14 -

recorded as adjustments to compensation expense. During the three months ended July 4, 2025, the Company recognized additional compensation expense of $16,963,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a gain in miscellaneous income, net. During the three months ended June 28, 2024, the Company recognized additional compensation expense of $875,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a gain in miscellaneous income, net. During the six months ended July 4, 2025, the Company recognized additional compensation expense o f $7,627,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a gain in miscellaneous income, net. During the six months ended June 28, 2024, the Company recognized additional compensation expense of $7,144,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a gain in miscellaneous income, net.

# Note 7: Supplemental Cash Flow Information

The following is supplemental disclosure of cash flow information:

|  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |
Cash paid during period: |  |  |  |  |  |
Income taxes |  | $ | 20,330 |  |  | $ | 18,490 |
Non-cash investing and financing activities: |  |  |  |  |  |
Vested stock unit awards issued to settle accrued bonuses |  | $ | 12,179 |  |  | $ | 10,846 |
Accrual for capital expenditures |  | $ | 189 |  |  | $ | 25 |
Right-of-use asset obtained in exchange for operating lease obligations |  | $ | 685 |  |  | $ | 50,657 |

# Note 8: Accounts Receivable, Net

At July 4, 2025 and January 3, 2025, accounts receivable, net, was comprised of the following:

|  | July 4, |  |  | January 3, |
(In thousands) |  | 2025 |  |  | 2025 |
Billed accounts receivable |  | $ | 117,447 |  |  | $ | 117,503 |
Unbilled accounts receivable |  |  | 59,745 |  |  |  | 50,045 |
Allowance for contract losses and doubtful accounts |  |  | (6,180 | ) |  |  | (6,141 | )
Total accounts receivable, net |  | $ | 171,012 |  |  | $ | 161,407 |

The Company maintains allowances for estimated losses over the remaining contractual life of its receivables resulting from the inability of customers to meet their financial obligations or for disputes that affect the Company’s ability to fully collect amounts due. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations or aware of a dispute with a specific customer, a specific allowance is recorded to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers the Company recognizes allowances for doubtful accounts based upon historical write-offs, customer concentration, customer creditworthiness, current economic conditions, aging of amounts due and future expectations.

A reconciliation of the beginning and ending amount of the allowance for contract losses and doubtful accounts is as follows:

(In thousands) |  |  |
Balance at January 3, 2025 |  | $ | 6,141 |
Provision for contract losses and doubtful accounts |  |  | 586 |
Write-offs |  |  | (547 | )
Balance at July 4, 2025 |  | $ | 6,180 |

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# Note 9: Segment Reporting

The Company has two reportable operating segments based on two primary areas of service. The Engineering and other scientific segment is a broad service group providing technical consulting in different practices primarily in engineering. The Environmental and health segment provides services in the areas of environmental, epidemiology and health risk analysis. This segment provides a wide range of consulting services relating to environmental hazards and risks and the impact on both human health and the environment. Our Chief Executive Officer, the chief operating decision maker, reviews revenues and operating income for each of our reportable segments, but does not review total assets in evaluating segment performance and capital allocation.

Segment information for the three and six months ended July 4, 2025 and June 28, 2024 follows:

Revenues

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Engineering and other scientific |  | $ | 120,980 |  |  | $ | 118,477 |  |  | $ | 243,115 |  |  | $ | 239,948 |
Environmental and health |  |  | 20,982 |  |  |  | 22,059 |  |  |  | 44,354 |  |  |  | 45,521 |
Total revenues |  | $ | 141,962 |  |  | $ | 140,536 |  |  | $ | 287,469 |  |  | $ | 285,469 |

Compensation and related expenses

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Engineering and other scientific |  | $ | 56,914 |  |  | $ | 56,802 |  |  | $ | 114,162 |  |  | $ | 114,537 |
Environmental and health |  |  | 11,740 |  |  |  | 12,041 |  |  |  | 24,188 |  |  |  | 24,357 |
Total segment compensation and related expenses |  |  | 68,654 |  |  |  | 68,843 |  |  |  | 138,350 |  |  |  | 138,894 |
Corporate compensation and related expenses |  |  | 28,820 |  |  |  | 10,623 |  |  |  | 35,027 |  |  |  | 30,899 |
Total compensation and related expenses |  | $ | 97,474 |  |  | $ | 79,466 |  |  | $ | 173,377 |  |  | $ | 169,793 |

Operating Income

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Engineering and other scientific |  | $ | 42,942 |  |  | $ | 43,765 |  |  | $ | 88,055 |  |  | $ | 92,396 |
Environmental and health |  |  | 7,020 |  |  |  | 7,259 |  |  |  | 15,718 |  |  |  | 15,495 |
Total segment operating income |  |  | 49,962 |  |  |  | 51,024 |  |  |  | 103,773 |  |  |  | 107,891 |
Corporate operating expense |  |  | (32,785 | ) |  |  | (15,280 | ) |  |  | (42,164 | ) |  |  | (41,434 | )
Total operating income |  | $ | 17,177 |  |  | $ | 35,744 |  |  | $ | 61,609 |  |  | $ | 66,457 |

Certain operating expenses are excluded from the Company’s measure of segment operating income. These expenses include costs associated with its human resources, legal, finance, information technology, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with its deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in its allowance for contract losses and doubtful accounts.

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Capital Expenditures

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Engineering and other scientific |  | $ | 306 |  |  | $ | 465 |  |  | $ | 781 |  |  | $ | 882 |
Environmental and health |  |  | 39 |  |  |  | 45 |  |  |  | 101 |  |  |  | 74 |
Total segment capital expenditures |  |  | 345 |  |  |  | 510 |  |  |  | 882 |  |  |  | 956 |
Corporate capital expenditures |  |  | 2,045 |  |  |  | 497 |  |  |  | 2,760 |  |  |  | 1,560 |
Total capital expenditures |  | $ | 2,390 |  |  | $ | 1,007 |  |  | $ | 3,642 |  |  | $ | 2,516 |

Certain capital expenditures associated with the Company’s corporate cost centers and the related depreciation are excluded from the Company’s segment information.

Depreciation and Amortization

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Engineering and other scientific |  | $ | 1,836 |  |  | $ | 1,765 |  |  | $ | 3,662 |  |  | $ | 3,393 |
Environmental and health |  |  | 49 |  |  |  | 54 |  |  |  | 96 |  |  |  | 103 |
Total segment depreciation and amortization |  |  | 1,885 |  |  |  | 1,819 |  |  |  | 3,758 |  |  |  | 3,496 |
Corporate depreciation and amortization |  |  | 635 |  |  |  | 667 |  |  |  | 1,254 |  |  |  | 1,314 |
Total depreciation and amortization |  | $ | 2,520 |  |  | $ | 2,486 |  |  | $ | 5,012 |  |  | $ | 4,810 |

No single client comprised more tha n 10% of the Company’s revenues during the three and six months ended July 4, 2025 and June 28, 2024.

# Note 10: Leases

The Company determines if an arrangement is a lease at the inception of the arrangement. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and long-term operating lease liabilities in the Company’s condensed consolidated balance sheet. The Company does not have any finance leases as of July 4, 2025.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, based on the information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The amortization of operating lease ROU assets and the change in operating lease liabilities is disclosed as a single line item in the condensed consolidated statements of cash flows.

The Company leases office, laboratory, and storage space in 13 states and the District of Columbia, as well as in China, Hong Kong, Singapore, Switzerland, and the United Kingdom. Leases for these office, laboratory, and storage facilities have terms generally ranging between one and ten years. Some of these leases include options to extend or terminate the lease, none of which are currently included in the lease term as the Company has determined that exercise of these options is not reasonably certain.

- 17 -

The Company has a Test and Engineering Center on 147 acres of land in Phoenix, Arizona. The Company leases this land from the State of Arizona under an agreement that expires in January of 2043 that includes an option to renew for one fifteen-year period.

The Company’s equipment leases are included in the ROU asset and liability balances, but are not material.

The Company leases excess space in its Silicon Valley and Natick facilities. Rental income of $285,000 and $927,000 was included in other income for the three months ended July 4, 2025 and June 28, 2024, respectively. Rental income of $476,000 and $1,769,000 was included in other income for the six months ended June 28, 2024 and June 28, 2024, respectively.

The components of lease expense included in other operating expenses on the condensed consolidated statements of income were as follows:

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Operating lease cost |  | $ | 2,896 |  |  | $ | 2,392 |  |  | $ | 6,108 |  |  | $ | 4,507 |
Variable lease cost |  |  | 414 |  |  |  | 385 |  |  |  | 717 |  |  |  | 748 |
Short-term lease cost |  |  | 381 |  |  |  | 343 |  |  |  | 737 |  |  |  | 650 |

Supplemental cash flow information related to operating leases was as follows:

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Cash paid for amounts included in the measurement of operating lease liabilities |  | $ | 1,678 |  |  | $ | 1,804 |  |  | $ | 4,280 |  |  | $ | 4,348 |

Supplemental balance sheet information related to operating leases was as follows:

|  | July 4, 2025 |  | June 28, 2024
Weighted Average Remaining Lease Term |  | 13.5 years |  | 14.5 years
Weighted Average Discount Rate |  | 6.3% |  | 6.4%

Maturities of operating lease liabilities as of July 4, 2025:

|  | Operating |
(In thousands) |  | Leases |
2025 (excluding the six months ended July 4, 2025) |  | $ | 3,665.00 |
2026 |  |  | 8,149 |
2027 |  |  | 6,817 |
2028 |  |  | 9,849 |
2029 |  |  | 9,467 |
Thereafter |  |  | 89,052 |
Total lease payments |  |  | 126,999 |
Less imputed interest |  |  | (46,676 | )
Total lease liability |  | $ | 80,323 |

Note 11: Contingencies

The Company is a party to various legal actions from time to time and may be contingently liable in connection with claims and contracts arising in the normal course of business, the outcome of which the Company believes, after consultation with legal counsel, will not have a material adverse effect on its financial condition, results

- 18 -

of operations or liquidity. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results. All legal costs associated with litigation are expensed as incurred.

Note 12: Subsequent Events

On July 31, 2025, the Company’s Board of Directors announced a cash dividend of $0.30 per share of the Company’s common stock, payable September 19, 2025, to stockholders of record as of September 5, 2025.

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Item 2. Management’s Discussion and Analysis o f Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included herein and with our audited consolidated financial statements and notes thereto for the fiscal year ended January 3, 2025, which are contained in our fiscal 2024 Annual Report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission on February 28, 2025 and amended on April 18, 2025 (our “2024 Annual Report”).

# Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995, and the rules promulgated pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended) that are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. When used in this document, the words “intend,” “anticipate,” “believe,” “estimate,” “expect” and similar expressions, as they relate to us or our management, identify such forward-looking statements. Such statements reflect the current views of us or our management with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results, performance, or achievements could differ materially from those expressed in, or implied by, any such forward-looking statements. Factors that could cause or contribute to such material differences include the possibility that the demand for our services may decline as a result of changes in general and industry specific economic conditions, the timing of engagements for our services, the effects of competitive services and pricing, the absence of backlog related to our business, our ability to attract and retain key employees, the effect of tort reform and government regulation on our business and liabilities resulting from claims made against us. Additional risks and uncertainties are discussed in our 2024 Annual Report under the heading “Risk Factors” and elsewhere in this report. The inclusion of such forward-looking information should not be regarded as a representation by the us or any other person that the future events, plans, or expectations we contemplated will be achieved. Due to such uncertainties and risks, you are warned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. We do not intend to release publicly any updates or revisions to any such forward-looking statements.

Business Overview

Exponent, Inc. is an engineering and scientific consulting firm providing solutions to complex problems. Our interdisciplinary organization of scientists, physicians, engineers, and business consultants draws from more than 90 technical disciplines to solve the most pressing and complicated challenges facing stakeholders today. The firm leverages over 50 years of experience in analyzing accidents and failures to advise clients as they innovate their technologically complex products and processes, ensure the safety and health of their users, and address the challenges of sustainability.

CRITICAL ACCOUNTING ESTIMATES

There have been no significant changes in our critical accounting estimates during the six months ended July 4, 2025, as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2024 Annual Report.

RESULTS OF CONSOLIDATED OPERATIONS

Executive Summary

Revenues for the second quarter of 2025 increased 1% to $141,962,000 as compared to $140,536,000 during the same period last year. Revenues before reimbursements for the second quarter of 2025 increased slightly to $132,868,000 as compared to $132,434,000 during the same period last year. Our failure analysis expertise drove increased dispute-related activities in the construction, automotive and medical device sectors. Proactive engagements were led by risk management work in the utilities sector, offset by softer demand in chemical regulatory work.

- 20 -

Net income decreased 9% to $26,553,000 during the second quarter of 2025 as compared to $29,227,000 during the same period last year. Diluted earnings per share decreased to $0.52 per share during the second quarter of 2025 as compared to $0.57 in the same period last year. The decrease in profitability was due to an increase in compensation expense associated with our annual salary adjustments, an increase in other operating expenses associated with the extension of our land lease with the State of Arizona and a decrease in the tax benefit associated with stock-based awards. During the second quarter of 2025, the tax impact associated with share-based awards was immaterial as compared to a tax benefit of $726,000 recognized during the same period last year.

We remain focused on building our world-class engineering and scientific team to position us at the forefront of innovation and meet the ever-changing needs of our clients and the market. We also remain focused on capitalizing on emerging growth areas, managing other operating expenses, generating cash from operations, maintaining a strong balance sheet and undertaking activities such as share repurchases and dividends to enhance stockholder value.

Overview of the Three Months Ended July 4, 2025

During the second quarter of 2025, billable hours decreased 6% to 359,000 as compared to 381,000 during the same period last year. Our utilization decreased to 72% during the second quarter of 2025 as compared to 75% during the same period last year. Technical full-time equivalent employees decreased 2% to 958 during the second quarter of 2025 as compared to 975 during the same period last year.

Three Months Ended July 4, 2025 compared to Three Months Ended June 28, 2024

Revenues

|  | Three Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Engineering and other scientific |  | $ | 120,980 |  |  | $ | 118,477 |  |  |  | 2.1 | %
Percentage of total revenues |  |  | 85.2 | % |  |  | 84.3 | % |  |  |
Environmental and health |  |  | 20,982 |  |  |  | 22,059 |  |  |  | -4.9 | %
Percentage of total revenues |  |  | 14.8 | % |  |  | 15.7 | % |  |  |
Total revenues |  | $ | 141,962 |  |  | $ | 140,536 |  |  |  | 1.0 | %

The increase in revenues for our Engineering and other scientific segment was due to an increase in billing rates offset by a decrease in billable hours. The increase in revenues was driven by demand for our dispute related services in the construction, automotive, and medical device sectors. During the second quarter of 2025, billable hours for this segment decreased by 5% to 291,000 as compared to 306,000 during the same period last year. Utilization for this segment decreased to 74% during the second quarter of 2025 as compared to 77% during the same period last year. Technical full-time equivalent employees in this segment decreased 1% to 756 during the second quarter of 2025 as compared to 765 for the same period last year.

The decrease in revenues for our Environmental and health segment was due to a decrease in billable hours partially offset by an increase in billing rates. The decrease in revenues was due to lower levels of activity for proactive projects in the life sciences sector and our chemical regulatory services. During the second quarter of 2025, billable hours for this segment decreased by 9% to 68,000 as compared to 75,000 during the same period last year. Utilization for this segment decreased to 65% during the second quarter of 2025 as compared to 68% during the same period last year. Technical full-time equivalent employees in this segment decreased 4% to 202 as compared to 210 during the same period last year.

Compensation and Related Expenses

|  | Three Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Compensation and related expenses |  | $ | 97,474 |  |  | $ | 79,466 |  |  |  | 22.7 | %
Percentage of total revenues |  |  | 68.7 | % |  |  | 56.5 | % |  |  |

- 21 -

The increase in compensation and related expenses during the second quarter of 2025 was due to a change in the value of assets associated with our deferred compensation plan, an increase in payroll expenses from the impact of our annual salary adjustments and an increase in fringe benefits. During the second quarter of 2025, deferred compensation expense increased by $16,088,000 with a corresponding increase to other income, net, as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. This increase consisted of an increase in the value of plan assets of $16,963,000 during the second quarter of 2025 as compared to an increase of $875,000 during the same period last year. During the second quarter of 2025 payroll expenses increased $1,003,000 and fringe benefits increased $809,000 due to the impact of our annual salary increase partially offset by a decrease in technical full-time equivalent employees. We expect our compensation expense, excluding the change in value of deferred compensation plan assets, to increase as we selectively add new talent and adjust compensation to market conditions.

Other Operating Expenses

|  | Three Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Other operating expenses |  | $ | 12,072 |  |  | $ | 11,185 |  |  |  | 7.9 | %
Percentage of total revenues |  |  | 8.5 | % |  |  | 8.0 | % |  |  |

Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements. The increase in other operating expenses during the second quarter of 2025 was primarily due to an increase in occupancy expense of $692,000 and an increase in computer-related expenses of $128,000. Our land lease with the State of Arizona was extended on June 19, 2024. This extension resulted in additional non-cash rent expense of approximately $939,000 during the second quarter of 2025. This increased level of rent expense will continue through the extended lease term ending in January of 2043 with adjustments in 2033 and 2038 based on the consumer price index. The increase in computer-related expenses was due to continued investments in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent and make investments in our corporate infrastructure.

Reimbursable Expenses

|  | Three Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Reimbursable expenses |  | $ | 9,094 |  |  | $ | 8,102 |  |  |  | 12.2 | %
Percentage of total revenues |  |  | 6.4 | % |  |  | 5.8 | % |  |  |

The amount of reimbursable expenses will vary from quarter to quarter depending on the nature of our projects.

General and Administrative Expenses

|  | Three Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
General and administrative expenses |  | $ | 6,145 |  |  | $ | 6,039 |  |  |  | 1.8 | %
Percentage of total revenues |  |  | 4.3 | % |  |  | 4.3 | % |  |  |

The increase in general and administrative expenses was primarily due to an increase in travel and meals of $318,000 and an increase in personnel expenses of $136,000 partially offset by a decrease in legal fees of $382,000. We expect general and administrative expenses to increase as we selectively add new talent and expand our business development and staff development initiatives.

Operating Income

- 22 -

|  | Three Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Engineering and other scientific |  | $ | 42,942 |  |  | $ | 43,765 |  |  |  | -1.9 | %
Environmental and health |  |  | 7,020 |  |  |  | 7,259 |  |  |  | -3.3 | %
Total segment operating income |  |  | 49,962 |  |  |  | 51,024 |  |  |  | -2.1 | %
Corporate operating expense |  |  | (32,785 | ) |  |  | (15,280 | ) |  |  | 114.6 | %
Total operating income |  | $ | 17,177 |  |  | $ | 35,744 |  |  |  | -51.9 | %

The decrease in operating income for our Engineering and other scientific segment during the second quarter of 2025 as compared to the same period last year was due to a decrease in utilization and an increase in other operating expenses associated with the extension of our land lease with the State of Arizona. The decrease in operating income for our Environmental and health segment during the second quarter of 2025 was due to a decrease in utilization.

Certain operating expenses are excluded from our measure of segment operating income. These expenses include the costs associated with our human resources, finance, information technology, corporate and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with our deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in our allowance for contract losses and doubtful accounts.

The increase in corporate operating expenses during the second quarter of 2025 as compared to the same period last year was primarily due to an increase in deferred compensation expense. During the second quarter of 2025, deferred compensation expense increased $16,088,000, with a corresponding increase to other income, net, as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. This increase consisted of an increase in the value of plan assets of $16,963,000 during the second quarter of 2025 as compared to an increase in the value of plan assets of $875,000 during the same period last year.

Other Income, Net

|  | Three Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Other income / (loss), net |  | $ | 19,638 |  |  | $ | 3,938 |  |  |  | 398.7 | %
Percentage of total revenues |  |  | 13.8 | % |  |  | 2.8 | % |  |  |

Other income, net, consists primarily of changes in the value of assets associated with our deferred compensation plan, interest income earned on available cash, cash equivalents and short-term investments, and rental income from leasing space in our Silicon Valley and Natick facilities. The increase in other income, net, was primarily due to a change in the value of assets associated with our deferred compensation plan partially offset by a decrease in rental income. During the second quarter of 2025, deferred compensation expense increased $16,088,000, with a corresponding increase to other income, net, as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. This increase consisted of an increase in the value of plan assets of $16,963,000 during the second quarter of 2025 as compared to an increase in the value of plan assets of $875,000 during the same period last year. During the second quarter of 2025, rental income decreased by $641,000 due to the loss of a tenant in our Silicon Valley facility.

Income Taxes

|  | Three Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Income taxes |  | $ | 10,262 |  |  | $ | 10,455 |  |  |  | -1.8 | %
Percentage of total revenues |  |  | 7.2 | % |  |  | 7.4 | % |  |  |
Effective tax rate |  |  | 27.9 | % |  |  | 26.3 | % |  |  |

- 23 -

During the second quarter of 2025, the tax impact associated with stock-based awards was immaterial as compared to a tax benefit of $726,000 during the same period last year. Excluding the tax impact, the effective tax rate would have been 27.8% during the second quarter of 2025 as compared to 28.2% during the same period last year. The One Big Beautiful Bill Act was enacted on July 4, 2025. The impact of this legislation on our current and deferred tax positions was not material.

Six Months Ended July 4, 2025 compared to Six Months Ended June 28, 2024

Revenues

|  | Six Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Engineering and other scientific |  | $ | 243,115 |  |  | $ | 239,948 |  |  |  | 1.3 | %
Percentage of total revenues |  |  | 84.6 | % |  |  | 84.1 | % |  |  |
Environmental and health |  |  | 44,354 |  |  |  | 45,521 |  |  |  | -2.6 | %
Percentage of total revenues |  |  | 15.4 | % |  |  | 15.9 | % |  |  |
Total revenues |  | $ | 287,469 |  |  | $ | 285,469 |  |  |  | 0.7 | %

The increase in revenues for our Engineering and other scientific segment was due to an increase in billing rates partially offset by a decrease in billable hours. The increase in revenues was driven by demand for our dispute related services in the construction and automotive sectors. During the first six months of 2025, billable hours for this segment decreased by 5% to 591,000 as compared to 620,000 during the same period last year. Utilization for this segment decreased to 75% during the first six months of 2025 as compared to 77% during the same period last year. Technical full-time equivalent employees in this segment decreased 2% to 759 during the first six months of 2025 as compared to 775 for the same period last year.

The decrease in revenues for our Environmental and health segment was due to a decrease in billable hours partially offset by an increase in billing rates. The decrease in revenues was due to a lower level of activity for proactive projects in the life sciences sector. During the first six months of 2025, billable hours for this segment decreased by 5% to 144,000 as compared to 152,000 during the same period last year. Utilization in this segment was flat at 68% during the first six months of 2025 and 2024. Technical full-time equivalent employees in this segment decreased by 5% to 203 during the first six months of 2025 as compared to 214 during the same period last year.

Compensation and Related Expenses

|  | Six Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Compensation and related expenses |  | $ | 173,377 |  |  | $ | 169,793 |  |  |  | 2.1 | %
Percentage of total revenues |  |  | 60.3 | % |  |  | 59.5 | % |  |  |

The increase in compensation and related expenses during the first six months of 2025 was due to an increase in payroll expense, an increase in stock-based compensation, and an increase in fringe benefits. Payroll expense increased by $1,252,000 and fringe benefits increased by $534,000 during the first six months of 2025 due to the impact of our annual salary adjustments partially offset by the decrease in technical full-time equivalent employees. Stock-based compensation expense increased $759,000 during the first six months of 2025 due to an increase in unvested restricted stock unit grants. We expect our compensation expense, excluding the change in value of deferred compensation plan assets, to increase as we selectively add new talent and adjust compensation to market conditions.

Other Operating Expenses

|  | Six Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Other operating expenses |  | $ | 24,167 |  |  | $ | 21,716 |  |  |  | 11.3 | %
Percentage of total revenues |  |  | 8.4 | % |  |  | 7.6 | % |  |  |

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Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements. The increase in other operating expenses during the first six months of 2025 was primarily due to an increase in occupancy expense of $1,684,000 and an increase in computer-related expenses of $463,000. Our land lease with the State of Arizona was extended on June 19, 2024. This extension resulted in additional non-cash rent expense of approximately $2,024,000 during the first six months of 2025. This increased level of rent expense will continue through the extended lease term ending in January of 2043 with adjustments in 2033 and 2038 based on the consumer price index. The increase in computer-related expenses was due to continued investments in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent and make investments in our corporate infrastructure.

Reimbursable Expenses

|  | Six Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Reimbursable expenses |  | $ | 17,164 |  |  | $ | 15,828 |  |  |  | 8.4 | %
Percentage of total revenues |  |  | 6.0 | % |  |  | 5.5 | % |  |  |

The amount of reimbursable expenses will vary from quarter to quarter depending on the nature of our projects.

General and Administrative Expenses

|  | Six Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
General and administrative expenses |  | $ | 11,152 |  |  | $ | 11,675 |  |  |  | -4.5 | %
Percentage of total revenues |  |  | 3.9 | % |  |  | 4.1 | % |  |  |

The decrease in general and administrative expenses was primarily due to a decrease in legal fee of $543,000 and a decrease in bad debt expense of $293,000. The decrease in bad debt expense was due to a decrease in our allowance for bad debt. We expect general and administrative expenses to increase as we expand our business development and staff development initiatives.

Operating Income

|  | Six Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Engineering and other scientific |  | $ | 88,055 |  |  | $ | 92,396 |  |  |  | -4.7 | %
Environmental and health |  |  | 15,718 |  |  |  | 15,495 |  |  |  | 1.4 | %
Total segment operating income |  |  | 103,773 |  |  |  | 107,891 |  |  |  | -3.8 | %
Corporate operating expense |  |  | (42,164 | ) |  |  | (41,434 | ) |  |  | 1.8 | %
Total operating income |  | $ | 61,609 |  |  | $ | 66,457 |  |  |  | -7.3 | %

The decrease in operating income for our Engineering and other scientific segment during the first six months of 2025 as compared to the same period last year was due to due to a decrease in utilization and an increase in other operating expenses associated with the extension of our land lease with the State of Arizona.

Certain operating expenses are excluded from our measure of segment operating income. These expenses include the costs associated with our human resources, legal, finance, information technology, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with our deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in our allowance for contract losses and doubtful accounts.

Other Income, Net

- 25 -

|  | Six Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Other income (loss), net |  | $ | 12,966 |  |  | $ | 13,648 |  |  |  | -5.0 | %
Percentage of total revenues |  |  | 4.5 | % |  |  | 4.8 | % |  |  |

Other income, net, consists primarily of changes in the value of assets associated with our deferred compensation plan, interest income earned on available cash, cash equivalents and short-term investments, and rental income from leasing space in our Silicon Valley and Natick facilities. The decrease in other income, net, was primarily due to a decrease in rental income partially offset by a change in the value of assets associated with our deferred compensation plan. During the first six months of 2025, rental income decreased by $1,293,000 due to the loss of a tenant in our Silicon Valley facility. During the first six months of 2025, deferred compensation expense increased $485,000 with a corresponding increase to other income, net, as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. This increase consisted of increase in the value of plan assets of $7,627,000 during the first six months of 2025 as compared to an increase in the value of plan assets of $7,142,000 during the same period last year.

Income Taxes

|  | Six Months Ended |  |  |  |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | Percent Change |
Income taxes |  | $ | 21,372 |  |  | $ | 20,736 |  |  |  | 3.1 | %
Percentage of total revenues |  |  | 7.4 | % |  |  | 7.3 | % |  |  |
Effective tax rate |  |  | 28.7 | % |  |  | 25.9 | % |  |  |

During the first six months of 2025, we realized a negative tax impact associated with stock-based awards of $485,000 as compared to a positive tax benefit of $1,672,000 during the same period last year. The change in the tax impact associated with stock-based awards was due to the change in the difference of the value of our common stock between the grant date and the release date for the restricted stock units released during the first six months of 2025 as compared to the same period last year. Excluding the tax impact, the effective tax rate would have been 28.0% during the first six months of 2025 and 2024.

LIQUIDITY AND CAPITAL RESOURCES

We believe our existing balances of cash, cash equivalents, and cash generated from operations will be sufficient to satisfy our working capital needs, capital expenditures, outstanding commitments, stock repurchases, dividends and other liquidity requirements over at least the next twelve months.

|  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |
Net cash provided by operating activities |  | $ | 43,496 |  |  | $ | 58,771 |
Net cash used in by investing activities |  |  | (4,028 | ) |  |  | (2,628 | )
Net cash used in financing activities |  |  | (67,517 | ) |  |  | (39,829 | )

We financed our business during the first six months of 2025 through available cash. As of July 4, 2025, our cash and cash equivalents were $231,801,000 as compared to $258,901,000 at January 3, 2025.

Generally, our net cash provided by operating activities is used to fund our day to day operating activities. First quarter operating cash requirements are generally higher due to payment in the first quarter of our annual bonuses accrued during the prior year. Our largest source of operating cash flows is collections from our clients. Our primary uses of cash from operating activities are for employee related expenditures, leased facilities, taxes, and general operating expenses.

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The increase in net cash used in investing activities during the first six months of 2025, as compared to the same period last year, was due to an increase in capital expenditures. The increase in capital expenditures was due to an increase in investment in our corporate infrastructure.

The increase in net cash used in financing activities during the first six months of 2025, as compared to the same period last year was due to an increase in repurchases of our common stock.

We lease office, laboratory, and storage space in 13 states and the District of Columbia, as well as in China, Germany, Hong Kong, Ireland, Singapore, Switzerland, and the United Kingdom under non-cancellable operating lease arrangements that expire at various dates through 2033. On June 19, 2024, we entered into an agreement with the State of Arizona to extend our land lease for 15 years beginning on January 17, 2028. We are currently obligated to make payments under the lease of $1,009,000 per year, which obligation will continue at that level until January 16, 2028. Beginning on January 17, 2028, our payments under the lease will increase to approximately $6,183,000 per year for the 15-year extension term with adjustments to the annual rent payment in 2033 and 2038 based on the consumer price index.

We expect to continue our investing activities, including capital expenditures. Furthermore, cash reserves may be used to repurchase shares of common stock under our stock repurchase programs, pay dividends, or strategically acquire professional service firms that are complementary to our business.

We maintain a nonqualified deferred compensation plan for the benefit of a select group of highly compensated employees. Vested amounts due under the plan of $117,555,000 were recorded as a long-term liability on our unaudited condensed consolidated balance sheet at July 4, 2025. Vested amounts due under the plan of $17,386,000 were recorded as a current liability on our unaudited condensed consolidated balance sheet at July 4, 2025. Our assets that are earmarked to pay benefits under the plan are held in a rabbi trust and are subject to the claims of our creditors. As of July 4, 2025, invested amounts under the plan of $114,929,000 were recorded as a long-term asset on our unaudited condensed consolidated balance sheet. As of July 4, 2025, invested amounts under the plan of $17,386,000 were recorded as a current asset on our unaudited condensed consolidated balance sheet.

As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was serving, at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

Non-GAAP Financial Measures

Regulation G, Conditions for Use of Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures, and other U.S. Securities and Exchange Commission (“SEC”) rules and regulations define and prescribe the conditions for use of Non-GAAP financial information. Generally, a Non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We closely monitor two financial measures, EBITDA and EBITDAS, which meet the definition of Non-GAAP financial measures. We define EBITDA as net income before income taxes, net interest income, depreciation and amortization. We define EBITDAS as EBITDA before stock-based compensation. The Company regards EBITDA and EBITDAS as useful measures of operating performance to complement operating income, net income and other GAAP financial performance measures. Additionally, management believes that EBITDA and EBITDAS provide meaningful comparisons of past, present and future operating results. These measures are used to evaluate our financial results, develop budgets and determine employee compensation. These measures, however, should be considered in addition to, and not as a substitute for or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of the Non-GAAP measures to the nearest comparable GAAP measure is set forth below.

- 27 -

The following table shows EBITDA (determined as shown in the reconciliation table below) as a percentage of revenues before reimbursements for the three and six months ended July 4, 2025 and June 28, 2024:

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands, except percentages) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Revenues before reimbursements |  | $ | 132,868 |  |  | $ | 132,434 |  |  | $ | 270,305 |  |  | $ | 269,641 |
EBITDA |  | $ | 36,991 |  |  | $ | 39,937 |  |  | $ | 74,529 |  |  | $ | 80,058 |
EBITDA as a % of revenues before reimbursements |  |  | 27.8 | % |  |  | 30.2 | % |  |  | 27.6 | % |  |  | 29.7 | %

The decrease in EBITDA as a percentage of revenues before reimbursements during the three and six months ended July 4, 2025 as compared to the same periods last year was primarily due to a decrease in utilization, an increase in payroll expense from annual salary adjustments, an increase in occupancy expense associated with the extension of our land lease with the State of Arizona and a decrease in rental income due to the loss of a tenant in our Silicon Valley facility.

The following table is a reconciliation of EBITDA and EBITDAS to the most comparable GAAP measure, net income, for the three and six months ended July 4, 2025 and June 28, 2024:

|  | Three Months Ended |  |  | Six Months Ended |
(In thousands) |  | July 4, 2025 |  |  | June 28, 2024 |  |  | July 4, 2025 |  |  | June 28, 2024 |
Net income |  | $ | 26,553 |  |  | $ | 29,227 |  |  | $ | 53,203 |  |  | $ | 59,369 |
Add back (subtract): |  |  |  |  |  |  |  |  |  |  |  |
Income taxes |  |  | 10,262 |  |  |  | 10,455 |  |  |  | 21,372 |  |  |  | 20,736 |
Interest income, net |  |  | (2,344 | ) |  |  | (2,231 | ) |  |  | (5,058 | ) |  |  | (4,857 | )
Depreciation and amortization |  |  | 2,520 |  |  |  | 2,486 |  |  |  | 5,012 |  |  |  | 4,810 |
EBITDA |  |  | 36,991 |  |  |  | 39,937 |  |  |  | 74,529 |  |  |  | 80,058 |
Stock-based compensation |  |  | 5,246 |  |  |  | 5,577 |  |  |  | 13,426 |  |  |  | 12,917 |
EBITDAS |  | $ | 42,237 |  |  | $ | 45,514 |  |  | $ | 87,955 |  |  | $ | 92,975 |

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Item 3. Quantitative and Qualita tive Disclosures About Market Risk

We are exposed to interest rate risk associated with our balances of cash and cash equivalents. We manage our interest rate risk by maintaining an investment portfolio primarily consisting of debt instruments with high credit quality and relatively short average effective maturities in accordance with our investment policy. The maximum effective maturity of any issue in our portfolio is 3 years and the maximum average effective maturity of the portfolio cannot exceed 12 months. If interest rates were to instantaneously increase or decrease by 100 basis points, the change in the fair market value of our portfolio of cash equivalents would not have a material impact on our financial statements. We do not use derivative financial instruments in our portfolio. There have not been any material changes during the period covered by this Quarterly Report on Form 10-Q to our interest rate risk exposures, or how these exposures are managed. Notwithstanding our efforts to manage interest rate risk, there can be no assurances that we will be adequately protected against the risks associated with interest rate fluctuations.

We have foreign currency risk related to our revenues and expenses denominated in currencies other than the U.S. dollar, primarily the British Pound, the Euro, the Chinese Yuan, and the Hong Kong Dollar. Accordingly, changes in exchange rates may negatively affect the revenues and net income of our foreign subsidiaries as expressed in U.S. dollars.

At July 4, 2025, we had net assets of approximately $10.8 million with a functional currency of the British Pound, net assets of approximately $2.7 million with a functional currency of the Chinese Yuan, net assets of approximately $1.7 million with a functional currency of the Hong Kong Dollar, and net assets of approximately $1.7 million with a functional currency of the Singapore Dollar associated with our operations in the United Kingdom, China, Hong Kong, and Singapore, respectively.

We also have foreign currency risk related to foreign currency transactions and monetary assets and liabilities denominated in currencies that are not the functional currency. We have experienced and will continue to experience fluctuations in our net income as a result of gains (losses) on these foreign currency transactions and the remeasurement of monetary assets and liabilities. At July 4, 2025, we had net assets denominated in the non-functional currency of approximately $3.4 million.

We do not use foreign exchange contracts to hedge any foreign currency exposures. To date, the impacts of foreign currency exchange rate changes on our consolidated revenues and consolidated net income have not been significant. However, our continued international growth increases our exposure to exchange rate fluctuations and as a result such fluctuations could have a significant impact on our future results of operations.

Item 4. Controls and Procedures

(a)
Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended, an evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this quarterly report. Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that, as of July 4, 2025, the Company’s disclosure controls and procedures were effective.

We review and evaluate the design and effectiveness of our disclosure controls and procedures on an ongoing basis, to improve our controls and procedures over time and to correct any deficiencies that we may discover in the future. Our goal is to ensure that our senior management has timely access to all material financial and non-financial information concerning our business. While we believe the present design of our disclosure controls and procedures is effective to achieve our goal, future events affecting our business may cause us to significantly modify our disclosure controls and procedures.

(b)
Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three-month period ended July 4, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHE R INFORMATION

Item 1. Legal Proceedings

Exponent is not engaged in any material legal proceedings.

Item 1A. Ri sk Factors

There have been no material changes from risk factors as previously discussed under the heading “Risk Factors” in the Company’s 2024 Annual Report.

Item 2. Unregistered Sales of Equ ity Securities and Use of Proceeds

The following table provides information on the Company’s repurchases of the Company’s common stock for the three months ended July 4, 2025:

(In thousands, except price per share) |  | Total Number of Shares Purchased |  |  | Average Price Paid Per Share |  |  | Total Number of Shares Purchased as Part of Publicly Announced Programs |  |  | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (1) |
April 5 to May 2 |  |  | 102 |  |  | $ | 74.94 |  |  |  | 102 |  |  | $ | 81,610 |
May 3 to May 30 |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 81,610 |
May 31 to July 4 |  |  | 263 |  |  |  | 75.95 |  |  |  | 263 |  |  |  | 61,610 |
Total |  |  | 365 |  |  | $ | 75.66 |  |  |  | 365 |  |  | $ | 61,610 |

(1)
On February 22, 2022, the Company’s Board of Directors announced $150,000,000 for repurchase of the Company’s common stock. On February 1, 2024, the Company's Board of Directors announced an additional $61,610,000 for repurchase of the Company's common stock. These repurchase programs have no expiration date.

Repurchases of the Company’s common stock were affected pursuant to a repurchase program authorized by the Company’s Board of Directors.

Item 3. Defaults Upo n Senior Securities

Not applicable.

Item 4. Mine Saf ety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Plans

The following table summarizes the adoption by the Company’s directors and officers of trading plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) during the three months ended July 4, 2025:

Name and Title | Adoption Date | Expiration Date | Aggregate Number of Securities to be Sold (1) |  | Aggregate Number of Securities to be Purchased
Catherine Ford Corrigan, President and Chief Executive Officer | May 15, 2025 | August 30, 2026 | 16,128 |  | 0

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(1)
Does not include an additional indeterminable number of shares permitted to be sold pursuant to the Rule 10b5-1 (c) trading arrangement in order to satisfy tax obligations related to stock option exercises.

During the three months ended July 4, 2025, no pre-existing trading plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) were modified or terminated by the Company’s directors and officers, and no other written trading arrangements that are not intended to qualify for the Rule 10b5-1(c) affirmative defense were adopted, modified, or terminated by the Company’s directors and officers.

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# Item 6. E xhibits

(a)
Exhibit Index

31.1 | Certification of Chief Executive Officer pursuant to Rule 13a – 14(a) under the Securities Exchange Act of 1934.
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a – 14(a) under the Securities Exchange Act of 1934.
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH | Inline XBRL Taxonomy Extension Schema Embedded Linkbase Documents
Exhibit 104 | Cover page formatted as Inline XBRL and contained in Exhibit 101

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SIGNA TURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  | EXPONENT, INC.
|  | (Registrant)
Date: August 8, 2025 |  |
|  | /s/ Catherine Ford Corrigan
|  | Catherine Ford Corrigan, Ph.D., Chief Executive Officer
|  | /s/ Richard L. Schlenker
|  | Richard L. Schlenker, Chief Financial Officer

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