CRA International Inc (CRAI) Reports Q3 2023 Earnings: Net Income Decreases by 27.6%

• Revenue for Q3 2023 slightly declined by 0.6% year over year to $147.6 million.

• Net income decreased by 27.6% year over year to $8.6 million, or 5.8% of revenue.

• Forensic Services and Life Sciences practices delivered double-digit revenue increases.

• Company increases quarterly dividend by 17%.

On November 2, 2023, CRA International Inc (NASDAQ:CRAI) announced its financial results for the fiscal third quarter ended September 30, 2023. Despite an unexpected slowdown in new project originations, the company's Forensic Services and Life Sciences practices delivered double-digit revenue growth. However, net income decreased by 27.6% year over year to $8.6 million, or 5.8% of revenue.

Financial Highlights

Revenue for the third quarter of 2023 slightly declined by 0.6% year over year to $147.6 million. The company's utilization was 66%, and quarter-end headcount increased by 11.3% year over year. Earnings per diluted share decreased by 25.8% year over year to $1.21 from $1.63 in the third quarter of fiscal 2022.

On a constant currency basis relative to the third quarter of fiscal 2022, revenue, GAAP net income, and earnings per diluted share would have been lower by $1.8 million, $0.2 million, and $0.03 per diluted share, respectively. Non-GAAP net income, earnings per diluted share, and non-GAAP EBITDA would have been lower by $0.2 million, $0.03 per diluted share, and $0.4 million, respectively.

Company's Response and Future Outlook

Despite the challenges, CRAI's President and Chief Executive Officer, Paul Maleh, expressed confidence in the company's overall competitive position. He stated,

Given results to date and lingering uncertainties across the broader economy, we are lowering our revenue and profit guidance. For full-year fiscal 2023, on a constant currency basis relative to fiscal 2022, we expect revenue in the range of $610.0 million to $620.0 million and non-GAAP EBITDA margin in the range of 10.3% to 10.7%."

Dividend Increase and Investor Day

CRAI announced that it increased its quarterly cash dividend by 17% from $0.36 to $0.42 per common share. The dividend will be payable on December 8, 2023, to shareholders of record as of November 28, 2023. The company will also host an investor day on November 29, 2023, to discuss its business, strategy, and industry trends in greater depth.

Conclusion

Despite the decrease in net income, CRA International Inc (NASDAQ:CRAI) continues to demonstrate resilience in its operations. The company's decision to increase its quarterly dividend reflects its confidence in its financial position and future prospects. However, as the company navigates through the current macroeconomic uncertainties, it will be crucial to monitor its performance in the coming quarters.

Explore the complete 8-K earnings release (here) from CRA International Inc for further details.

This article first appeared on GuruFocus.