Charles River Associates CRAI reported mixed first-quarter fiscal 2026 results, wherein earnings missed the Zacks Consensus Estimate while revenues beat the same.
The company’s adjusted earnings of $1.99 per share missed the Zacks Consensus Estimate of $2.02 per share and declined 10.4% year over year.
Revenues of $201 million topped the Zacks Consensus Estimate of $193.3 million and increased 10.5% year over year, driven by continued demand across the company’s legal and regulatory consulting, and management consulting businesses.
The stock has barely moved since the release of results on May 7, reflecting poor quarterly earnings performance and weak revenue guidance for fiscal 2026.
Charles River Associates Price, Consensus and EPS Surprise
Charles River Associates price-consensus-eps-surprise-chart | Charles River Associates Quote
For fiscal 2026, CRAI expects revenues to be in the range of $785-$805 million on a constant-currency basis. The midpoint of $795 million is lower than the Zacks Consensus Estimate of $797 million.
CRAI’s Q1 Results in Detail
CRAI’s costs of services increased to $145 million from $120.4 million in the prior-year quarter, primarily due to higher compensation-related expenses. As a percentage of revenues, the same increased to 72.2% from 66.2% a year ago.
Selling, general and administrative expenses increased 6.1% year over year to $34.5 million but improved as a percentage of revenues to 17.2% from 17.9% in the prior-year quarter.
Income from operations declined to $18 million from $25.5 million reported in the year-ago quarter. Operating margin contracted to 9% from 14% in the prior-year quarter.
Net income decreased to $11.1 million, or $1.69 per share, from $18 million, or $2.62 per share, in the year-ago quarter. Non-GAAP net income declined to $13.1 million from $15.3 million a year ago.
Adjusted EBITDA was $23.2 million, or 11.5% of revenues, compared with $24.8 million, or 13.6% of revenues, in the year-ago quarter.
CRAI Highlights AI Opportunity & Demand Trends
Management stated that AI is acting as both a “demand amplifier” and a “productivity enhancer” for the company’s consulting business. Charles River noted that increasing AI adoption across industries is creating more complexity in litigation, regulation, competition and governance matters, which is expected to support future demand for the company’s expertise-driven advisory services.
The company also emphasized that its deep bench of advanced-degree professionals and experts favorably positions it as enterprises seek defensible, high-skill advisory work in increasingly complex regulatory and legal environments.
CRAI continued to benefit from resilient consulting demand tied to mergers and acquisitions, litigation activity, cybersecurity, antitrust matters and management consulting engagements across industries, including energy, healthcare and technology.
Balance Sheet & Cash Flow
Cash and cash equivalents at the end of the quarter were $32.5 million compared with $25.6 million in the year-ago quarter.
Net cash used in operating activities was $113.9 million compared with net cash used of $80 million in the prior-year quarter.
As of April 4, 2026, borrowings outstanding under CRAI’s revolving credit facility were $192 million compared with $85 million at the end of the year-ago quarter.
During the quarter, the company repurchased approximately 116,000 shares for $21.5 million. The company also paid quarterly dividends totaling $3.8 million.
CRAI’s Guidance
The company projects an adjusted EBITDA margin in the range of 12-13% for fiscal 2026.
Management also reiterated its long-term strategy of delivering organically driven mid-single-digit annual revenue growth, supplemented by inorganic opportunities, while returning approximately 50% of adjusted operating cash flows to its shareholders.
CRAI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings Snapshots
Equifax Inc. EFX reported better-than-expected first-quarter 2026 results. EFX’s adjusted earnings per share of $1.86 beat the Zacks Consensus Estimate by 10.1% and increased 21.6% from the year-ago quarter. EFX’s revenues of $1.6 billion surpassed the consensus estimate by 2.3% and improved 14.4% year over year.
Waste Connections, Inc. WCN posted impressive first-quarter 2026 results. WCN’s adjusted earnings of $1.23 per share outpaced the consensus mark by 3.4% and rose 8.9% from the year-ago quarter. WCN’s total revenues of $2.37 billion beat the consensus mark by 0.7% and increased 6.4% year over year.
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