FTI Consulting Delivers Record Second Quarter 2026 Revenues, Updates EPS Guidance, and Faces Extraordinary Litigation
Key Highlights from Q2 2026 Financial Results
- Record Q2 Revenues: FTI Consulting, Inc. (NYSE: FCN) posted all-time high second quarter revenues of \$993.5 million, marking a 5.3% increase from \$943.7 million a year ago.
- Net Income and EPS: Net income for Q2 was \$57.8 million, compared to \$71.7 million in the prior year. EPS came in at \$1.99 (down from \$2.13), while Adjusted EPS rose to \$2.16 versus \$2.13 last year, reflecting adjustments for special litigation expenses.
- Adjusted EBITDA: \$104.5 million (10.5% of revenues), compared to \$111.6 million (11.8%) a year ago. This quarter excludes \$6.6 million of extraordinary litigation-related expenses.
- Guidance Update: Revenue guidance for full year 2026 is reaffirmed at \$3.94 to \$4.10 billion. However, EPS guidance is narrowed to \$8.70 to \$9.30 (from \$8.90 to \$9.60 previously), and the company is introducing Adjusted EPS guidance of \$9.10 to \$9.70—with the difference representing expected extraordinary litigation-related expenses.
- Share Repurchases: The Board authorized an additional \$370 million to the share repurchase program. During Q2, FTI repurchased 2,591,133 shares for \$390.9 million at an average price of \$150.84. \$344 million remains available under the program.
- Cash and Debt: As of June 30, 2026, cash and cash equivalents stood at \$163.7 million, while total debt net of cash surged to \$856.3 million, up from \$317.2 million last year and \$556.7 million last quarter, primarily due to the aggressive share repurchase activity.
Segment Performance Details
- Corporate Finance: Revenues rose 8.5% to \$411.4 million, driven by higher bill rates, transformation demand, and success fees, partly offset by lower restructuring services. Adjusted Segment EBITDA was \$86.0 million (20.9% margin), up from \$81.7 million (21.5%) last year. Billable headcount increased 7.8%.
- Forensic and Litigation Consulting: Revenues up 4.1% to \$194.3 million, mainly due to risk & investigations demand. Adjusted Segment EBITDA was \$31.4 million (16.1% margin).
- Economic Consulting: Revenues fell 1.5% to \$188.8 million, due to lower non-M&A antitrust and arbitration services, partially offset by higher M&A-related antitrust work. Adjusted Segment EBITDA dropped to \$8.8 million (4.7% margin) from \$14.2 million (7.4%).
- Technology: Revenues surged 18.4% to \$99.0 million, driven by M&A-related “second request” services. Adjusted Segment EBITDA increased to \$9.1 million (9.1% margin).
- Strategic Communications: Revenues declined 2.6% to \$100.0 million, reflecting lower pass-through revenues; excluding these, segment revenues grew 5.4% on strong corporate reputation demand. Adjusted Segment EBITDA was \$18.5 million (18.5% margin).
Cash Flow and Capital Allocation
- Operating Cash Flow: Net cash from operations was \$152.3 million for Q2, up from \$55.7 million last year, attributed to stronger collections and lower tax/loan payments.
- Stock Buybacks: The company continues robust share repurchases, which have significantly increased the net debt position.
Extraordinary Litigation: FTI vs. Orszag, et al.
A key development with potentially material impact: FTI Consulting has classified its ongoing litigation against Jonathan Orszag, Econic Partners LLC (a competitor), and Dr. Mark Israel (a former employee) as “Extraordinary Litigation” beginning Q2 2026. The case involves claims for theft of trade secrets and conspiracy to unlawfully compete. This new classification means litigation expenses are now excluded from adjusted financials, with \$6.6 million excluded in Q2 and an estimated \$0.40 per share for the full year. This shift reflects the litigation’s magnitude, complexity, and impact on the company’s operations.
Shareholders should note: The outcome and expenses related to this litigation could be material and may affect both near-term profitability and longer-term competitive positioning.
Guidance and Outlook
- Revenue guidance reaffirmed: \$3.94–\$4.10 billion for 2026.
- EPS guidance (GAAP) lowered: \$8.70–\$9.30 (previously \$8.90–\$9.60).
- Adjusted EPS (Non-GAAP): \$9.10–\$9.70, with the difference reflecting extraordinary litigation expenses.
CEO Steven Gunby emphasized the company’s resilience and ongoing investments in talent, saying FTI’s broad capabilities provide clients with crucial support in volatile environments. He expressed confidence in the company’s multi-year trajectory, though acknowledged “zigs and zags” are inherent in the event-driven business model.
Financial Position
- As of June 30, 2026:
- Cash and equivalents: \$163.7 million
- Total assets: \$3.53 billion
- Stockholders’ equity: \$1.33 billion
- Net debt: \$856.3 million, up significantly due to aggressive share buybacks
Potential Share Price Movers
- Record revenues and solid operating cash flow may support the stock.
- Ongoing and newly classified extraordinary litigation introduces uncertainty and could impact future profitability and competitive risk, making it a potential downward risk for the share price.
- Large share repurchases signal confidence but have increased leverage; the company is now operating with significantly higher net debt.
- Lowered EPS guidance (albeit for extraordinary expenses) may be seen as a cautionary signal by the market.
Conference Call Details
FTI Consulting will discuss these results further in a conference call for analysts and investors at 9:00 a.m. ET on July 30, 2026, with a replay available for 90 days.
About FTI Consulting
FTI Consulting is a leading global expert firm with over 8,100 employees in 32 countries, specializing in supporting organizations through crisis and transformation. The company generated \$3.8 billion in revenues in fiscal 2025.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. All forward-looking statements are subject to risks and uncertainties which may cause actual results to differ materially from those projected. Investors should refer to FTI Consulting’s filings with the SEC, including the latest Form 10-K and 10-Q, for a full discussion of risk factors. The author disclaims any responsibility for investment decisions based on this article.
