FCN Q3 Deep Dive: Consulting Segment Strength Offsets Ongoing Headwinds in Economic and Tech Units

Business advisory firm FTI Consulting (NYSE:FCN) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 3.3% year on year to $956.2 million. The company expects the full year’s revenue to be around $3.71 billion, close to analysts’ estimates. Its GAAP profit of $2.60 per share was 39.2% above analysts’ consensus estimates.

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StockStory’s Take

FTI Consulting’s third quarter results were shaped by strong performances in its Corporate Finance, Forensic and Litigation Consulting, and Strategic Communications segments, which together more than offset ongoing headwinds in the Economic Consulting and Technology businesses. Management credited prior investments in talent and service expansion for the robust quarter, with CEO Steve Gunby noting, “These results reflect the activities and courage shown by key leaders in those segments, not only this quarter, but over the prior years.” Despite this, the market reacted negatively, reflecting concerns about persistent challenges in certain business areas.

Looking ahead, FTI Consulting’s outlook remains cautious yet optimistic, as management highlighted ongoing investments in senior talent and new service adjacencies, particularly within Economic Consulting and Technology. CFO Paul Linton emphasized, “The timing of improvement in Economic Consulting is not yet certain,” referencing both market-driven and talent-related headwinds. Management expects seasonality and continued ramp-up costs to weigh on near-term performance, but maintains that multi-year strategy execution and team expansion are critical to supporting long-term growth.

Key Insights from Management’s Remarks

Management attributed the quarter’s outperformance to expansion in core advisory segments and increased bill rates, while acknowledging cost and demand pressures in select business lines.

• Corporate Finance expansion: The Corporate Finance segment benefited from higher demand for restructuring and transaction services, as well as increased realized bill rates in transformation and strategy. Leadership noted that investments in key geographies and service lines, such as health care and airlines restructuring, are yielding larger, more complex mandates.
• Forensic and Litigation Consulting momentum: Forensic and Litigation Consulting delivered double-digit revenue growth, driven by heightened demand for risk and investigations, particularly in the EMEA region. Management credited the team’s incentive alignment and focus on complex data analytics as central to its recent success.
• Strategic Communications resilience: Strategic Communications saw steady growth in corporate reputation and crisis communications, with management pointing to talent development—two-thirds of senior managing directors promoted in the last five years—as a driver for regaining momentum after slower periods.
• Economic Consulting challenges: The Economic Consulting segment faced continued revenue declines due to both market weakness and talent transitions, notably in non-M&A antitrust services. Leadership stated that approximately two-thirds of the revenue decline was attributed to talent changes, with the remainder due to weak market demand.
• Technology segment softness: Technology experienced lower demand for M&A-related services, though management cited ongoing investments in AI-enabled tools and talent acquisition as steps to support future recovery. The segment’s challenges were described as cyclical, with leadership emphasizing its long-term potential in high-stakes investigations and litigation support.

Drivers of Future Performance

FTI Consulting’s guidance reflects ongoing caution around Economic Consulting recovery, balanced by confidence in core segment growth and continued team investments.

• Economic Consulting stabilization uncertain: Management highlighted that while costs have been stabilized after significant investments in talent retention and hiring, the timing for revenue and EBITDA recovery in Economic Consulting remains unclear due to lingering market and legacy work runoff.
• Sustained investment in talent: FTI Consulting plans to continue hiring and building teams in areas like antitrust, risk, and transactions, with 79 senior hires announced year-to-date. Leadership believes these additions are necessary to capture future growth opportunities, even if they pressure margins in the near term.
• AI and data analytics expansion: The company is investing in proprietary AI tools and advanced data analytics capabilities to differentiate client offerings, particularly in investigations and regulatory work. Management views these initiatives as foundational for long-term growth, though immediate financial impact is limited.

Catalysts in Upcoming Quarters

As we look to future quarters, the StockStory team will focus on (1) evidence of revenue stabilization and margin improvement in Economic Consulting, (2) continued demand and pricing momentum in Corporate Finance and Forensic and Litigation Consulting, and (3) the pace of AI tool adoption and new client mandates in Technology. Execution on senior talent integration and progress toward more balanced segment performance will also be important markers.

FTI Consulting currently trades at $154.50, in line with $155.81 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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