CRAI Q2 Deep Dive: Broad-Based Practice Growth, Raised Outlook, and Leadership Changes

Economic consulting firm CRA International (NASDAQ:CRAI) reported Q2 CY2025 results beating Wall Street’s revenue expectations, with sales up 9% year on year to $186.9 million. The company’s full-year revenue guidance of $737.5 million at the midpoint came in 1.8% above analysts’ estimates. Its non-GAAP profit of $1.88 per share was 2.4% above analysts’ consensus estimates.

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StockStory’s Take

CRA International’s second quarter results came in ahead of Wall Street expectations, but the market reacted negatively. Management attributed the quarter’s outperformance to strong demand across multiple practices, with Antitrust & Competition Economics, Energy, Intellectual Property, and Labor & Employment all delivering double-digit revenue growth. CEO Paul Maleh pointed to the firm’s ability to capitalize on high-profile legal and regulatory matters, particularly in antitrust litigation and large M&A transactions. Consultant utilization improved year over year, and Maleh highlighted increased project lead flow and “continued replenishing of our sales pipeline,” which supported elevated consultant productivity despite typical seasonal transitions.

Looking forward, CRA International’s raised guidance is underpinned by a healthy sales pipeline, broad-based demand for consulting services, and the onboarding of over 100 new college graduates to support future growth. Management believes the Antitrust & Competition Economics and Energy practices will remain key contributors, citing ongoing merger activity and energy sector transformation. CEO Paul Maleh noted, “We remain bullish about CRA’s future,” but also cautioned that unpredictable global macroeconomic and political conditions could still impact client activity and project flow in the months ahead.

Key Insights from Management’s Remarks

Management attributed the quarter’s growth to robust demand in legal and regulatory consulting, as well as productivity gains across practices, while noting ongoing investments in talent and organizational alignment.

• Antitrust & Competition momentum: CRA’s Antitrust & Competition Economics practice posted its highest-ever quarterly revenue, driven by complex merger activity and regulatory analysis. The team supported clients in high-profile M&A cases, including Hewlett Packard Enterprises and Juniper Networks, which required navigating antitrust approvals across multiple jurisdictions.
• Energy practice expansion: The Energy practice experienced continued strong demand as utilities and developers responded to policy shifts and growing electricity needs, particularly from data center expansion. Management emphasized that nearly half of the practice’s work now centers on helping utilities adjust investment strategies in response to federal renewable incentives and changing load forecasts.
• Talent investment and consultant productivity: CRA welcomed over 50 new consultants this quarter and improved consultant utilization to 76%. CEO Paul Maleh highlighted that “utilization was supported by the continued replenishing of our sales pipeline,” reflecting healthy lead flow and project activity across the firm.
• Management team realignment: The company promoted Eric Nierenberg to CFO, Brian Langan to Chief Strategy and Business Transformation Officer, and Sandy David to Principal Accounting Officer, aiming to sharpen focus on high-value strategic initiatives and better support consulting teams.
• Share repurchase activity: CRA repurchased $43.2 million in shares during the quarter, with management explaining the timing was concentrated in the open trading window. The company continues to view buybacks as part of its capital allocation strategy.

Drivers of Future Performance

Management expects broad-based demand in regulatory, energy, and legal consulting to drive high-single digit revenue growth, with margin stability supported by talent investment and operational discipline.

• Healthy project pipeline: The raised outlook is based on a “strong first half” and ongoing increases in project lead flow, particularly in Antitrust, Energy, and IP practices. Management expects these areas to sustain demand, though they caution that geopolitical risks could affect client activity.
• Talent onboarding and retention: Over 100 new college graduates are joining, reflecting continued investment in future growth areas. Management noted that headcount remains flat overall, but hiring is concentrated in expanding practices, while redeploying resources from underperforming areas.
• Pricing environment and client expectations: CEO Paul Maleh reported successful implementation of rate increases for 2025, with clients accepting higher fees in exchange for efficient, value-added services. Management emphasized that pricing power is balanced by the need to deliver cost-effective solutions, and that the competitive labor market remains a watch item.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) the pace of new project wins and lead flow in high-growth practices like Antitrust and Energy, (2) successful onboarding and productivity of the incoming analyst class, and (3) evidence of margin stability as CRA continues to invest in talent and strategic initiatives. The evolution of the regulatory and legal landscape, especially around M&A activity, will also be a critical marker for future performance.

CRA currently trades at $190.35, up from $173.35 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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