The quarter materially beat the revenue bar. Published expectations were roughly $198.9 million of revenue and $2.15 of adjusted EPS; CRA delivered $210.8 million and $2.16 of non-GAAP diluted EPS, making this a substantial top-line beat but only a narrow earnings beat.
| Metric | Q2 FY2026 | Q2 FY2025 / Prior expectation |
|---|---|---|
| Revenue | $210.8M (Financial Highlights) | $186.9M prior year; ~$198.9M consensus |
| GAAP diluted EPS | $2.10 (Income Statement) | $1.79 prior year |
| Non-GAAP diluted EPS | $2.16 (Non-GAAP reconciliation) | $1.88 prior year; ~$2.15 consensus |
| Non-GAAP EBITDA | $26.8M, 12.7% margin (Non-GAAP EBITDA reconciliation) | $23.3M, 12.4% margin |
| Operating cash flow, YTD | $(118.3)M (Cash Flow statement) | $(74.1)M prior year |
| Adjusted operating cash flow, YTD | $(51.6)M (Adjusted Net Cash Flows from Operations) | $(53.2)M prior year |
| FY2026 revenue guidance | $805M–$820M (Guidance) | Prior $785M–$805M |
Growth was broad, not merely a single-practice spike. Revenue rose 12.8% year over year, with six practices posting double-digit growth; Management Consulting grew 25.5% and international revenue rose 32.9% (Management commentary). SG&A excluding non-employee expert commissions improved to 15.5% of revenue from 16.3%, helping offset heavier consultant-related costs. The caveat is that the higher revenue did not expand the reported full-year EBITDA-margin target, which remains 12.0%–13.0% (Guidance).
Management raised the part of the outlook investors most wanted upgraded. The revenue-guidance midpoint increased from $795 million to $812.5 million, roughly a 2.2% uplift, while the profit-margin range was reaffirmed rather than raised (Guidance). That is a genuine positive revision, but it signals confidence in demand more than incremental margin upside; CRA also expects approximately $15 million of additional non-cash forgivable-loan amortization in FY2026 (Guidance).
Cash flow is the main offset to the strong income statement. Year-to-date GAAP operating cash flow was negative $118.3 million, driven largely by working-capital investment, while receivables increased to $271.7 million and DSO rose to 113 days from 110 days (Cash Flow statement; CFO remarks). CRA's adjusted operating cash flow was also negative $51.6 million year to date, though broadly comparable with the prior year's $(53.2) million after excluding forgivable-loan advances (Adjusted Net Cash Flows from Operations). Borrowings under the revolver reached $219 million versus $120 million a year earlier (CFO remarks), making the enlarged five-year, $400 million facility useful liquidity protection but also highlighting the balance-sheet dependence behind the growth.
Net read: clearly better than expected, but not an unqualified beat. The revenue outperformance and higher full-year revenue range are the strongest signals, while adjusted EPS only edged the published bar and profitability guidance did not improve. The refinancing, maintained $0.57 dividend, and continued buybacks support capital flexibility, but the weak cash conversion and higher debt keep the filing from being a broad-based positive surprise.
Read the original 8-K on SEC EDGAR ↗