FTI Consulting, Inc. Q4 2025 Earnings Call Summary Moby Intelligence Fri, February 27, 2026 at 5:32 AM GMT+8 3 min read In this article: - FCN -2.19% FLYY WOLF -2.42%
FTI Consulting, Inc. Q4 2025 Earnings Call Summary - Moby Strategic Performance Drivers and Operational Context
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Management attributed record 2025 results to the company's multifaceted business model, which allowed strong performances in Corporate Finance, FLC, and Stratcom to offset approximately $100 million in adjusted EBITDA headwinds from Tech and Economic Consulting.
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The Corporate Finance segment achieved record results by successfully pivoting from a U.S.-centric creditor restructuring practice to a global leader capable of handling massive engagements like Spirit Airlines and Wolfspeed.
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In Forensic and Litigation Consulting (FLC), the firm outperformed despite regulatory enforcement shifts by remaining nimble and pivoting focus toward state-level investigations and AI-related compliance work for financial institutions.
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The Technology segment faced a significant market-driven slowdown in 'second request' activity during the first half of 2025, but management maintained investment in talent, which allowed the business to capture a rebound in the fourth quarter.
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Strategic investments in Stratcom focused on corporate reputation and public affairs drove a return to growth after two years of relative slowness, validating management's conviction in expert-led advisory services.
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Management emphasized that the firm's resilience is rooted in its 'low leverage, expert-driven' model, which thrives on market disruption and crisis situations rather than stable economic environments.
2026 Outlook and Strategic Assumptions
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The 2026 guidance assumes a multi-year rebuild of the Compass Lexecon business, with management expecting the first half of the year to face difficult year-over-year comparisons due to the full cost impact of talent retention.
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Management anticipates that Economic Consulting adjusted segment EBITDA will reach its lowest point in Q1 2026 before ceasing to be a drag on year-over-year growth by the second half of the year.
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The firm plans to accelerate junior talent hiring in the second half of 2026 to support the record levels of senior talent added during the previous year, addressing a capacity gap created by cautious hiring in early 2025.
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Guidance includes a projected $45 million increase in SG&A expenses for 2026, driven by the non-recurrence of a 2025 legal settlement gain and costs associated with a global Senior Managing Director meeting in Q2.
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Management expressed confidence that AI will serve as a long-term revenue tailwind by creating new categories of high-stakes disputes and regulatory compliance needs that require human judgment and accountability.
Non-Recurring Factors and Risk Callouts
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A positive legal settlement in Q1 2025 provided a one-time benefit that creates a difficult comparison for the first quarter of 2026.
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The company executed a significant share repurchase program in 2025, buying back 15% of outstanding shares, reflecting management's view that the market had undervalued the firm's long-term trajectory during temporary headwinds.
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A $11.8 million valuation allowance expense against foreign deferred tax assets impacted fourth-quarter GAAP net income and EPS.
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Management flagged the risk that large, high-margin engagements currently driving momentum in Corporate Finance and FLC may not be immediately replaced upon conclusion.
Q&A Session Highlights
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Productivity ramp and recovery timeline for Economic Consulting-
Steve Gunby noted that while the U.S. finance business is stable, the U.S. antitrust business is a 'work in progress' as new academic hires transition their practices.
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Management clarified that some high-profile hires are still fulfilling revenue obligations to prior employers, leading to a slower revenue ramp despite the immediate cost hit.
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Management believes AI-driven disruption will eventually trigger a new cycle of winners and losers, potentially increasing demand for restructuring services in 2027 and beyond.
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The firm is positioning itself as a partner for companies navigating 'discontinuous change' caused by AI, focusing on high-value advice rather than commodity summarization tasks.
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Management reiterated an opportunistic approach to share buybacks, specifically targeting periods where they believe the market 'overgeneralizes' short-term headwinds.
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The firm maintains a very low net debt position (approximately 0.25x EBITDA), providing significant flexibility for organic investment or 'A-plus' acquisitions if cultural and price alignment exists.
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