crai-20250628

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________________________________________________

FORM 10-Q

________________________________________________________________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-24049

________________________________________________________________________________________

CRA International, Inc.

(Exact name of registrant as specified in its charter)

________________________________________________________________________________________


			Massachusetts			04-2372210
			(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
			200 Clarendon Street, Boston, MA			02116-5092
			(Address of principal executive offices)			(Zip Code)

(617) 425-3000

(Registrant’s telephone number, including area code)

_____________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, no par value

CRAI

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

Outstanding at July 25, 2025

Common Stock, no par value per share

6,584,093 shares

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CRA International, Inc.

INDEX


PART I. FINANCIAL INFORMATION
ITEM 1.	Financial Statements	3
	Condensed Consolidated Statements of Operations (unaudited)—Fiscal Quarters and Fiscal Year-to-Date Periods Ended June 28, 2025 and June 29, 2024	3
	Condensed Consolidated Statements of Comprehensive Income (unaudited)—Fiscal Quarters and Fiscal Year-to-Date Periods Ended June 28, 2025 and June 29, 2024	4
	Condensed Consolidated Balance Sheets (unaudited)—June 28, 2025 and December 28, 2024	5
	Condensed Consolidated Statements of Cash Flows (unaudited)—Fiscal Year-to-Date Periods Ended June 28, 2025 and June 29, 2024	6
	Condensed Consolidated Statements of Shareholders’ Equity (unaudited)—Fiscal Year-to-Date Periods Ended June 28, 2025 and June 29, 2024	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	23
ITEM 4.	Controls and Procedures	23

PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	24
ITEM 1A.	Risk Factors	24
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
ITEM 3.	Defaults Upon Senior Securities	25
ITEM 4.	Mine Safety Disclosures	25
ITEM 5.	Other Information	25
ITEM 6.	Exhibits	26
Signatures		27

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except per share data)


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Revenues	$	186,878	$	171,442	$	368,729	$	343,230
Costs of services (exclusive of depreciation and amortization)	128,542		125,327		248,896		244,206
Selling, general and administrative expenses	35,079		32,016		67,617		62,514
Depreciation and amortization	3,530		2,811		6,941		5,603
Income from operations	19,727		11,288		45,275		30,907
Interest expense, net	(1,796)		(1,483)		(2,225)		(1,948)
Foreign currency gains (losses), net	(815)		(191)		(1,290)		(333)
Income before provision for income taxes	17,116		9,614		41,760		28,626
Provision for income taxes	4,994		3,076		11,636		8,397
Net income	$	12,122	$	6,538	$	30,124	$	20,229
Net income per share:
Basic	$	1.81	$	0.96	$	4.47	$	2.93
Diluted	$	1.79	$	0.94	$	4.42	$	2.90
Weighted average number of shares outstanding:
Basic	6,694		6,834		6,734		6,880
Diluted	6,753		6,911		6,807		6,961

See accompanying notes to the condensed consolidated financial statements.

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CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

(in thousands)


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Net income	$	12,122	$	6,538	$	30,124	$	20,229
Other comprehensive income (loss)
Foreign currency translation adjustments, net of tax	3,823		(315)		5,566		(1,420)
Comprehensive income	$	15,945	$	6,223	$	35,690	$	18,809

See accompanying notes to the condensed consolidated financial statements.

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CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)


	June 28, 2025		December 28, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	19,448	$	26,711
Accounts receivable, net of allowances of $6,215 and $5,659, respectively	159,717		162,293
Unbilled services, net of allowances of $1,734 and $1,411, respectively	75,308		57,255
Prepaid expenses and other current assets	20,674		16,569
Forgivable loans	17,961		6,535
Total current assets	293,108		269,363
Property and equipment, net	41,338		45,205
Goodwill, net	94,948		93,737
Intangible assets, net	6,451		7,216
Right-of-use assets	83,353		81,157
Deferred income taxes	17,073		16,648
Forgivable loans, net of current portion	64,353		48,957
Other assets	6,153		9,156
Total assets	$	606,777	$	571,439
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	24,628	$	28,155
Accrued expenses	139,751		181,413
Deferred revenue and other liabilities	9,042		14,130
Current portion of lease liabilities	18,718		18,696
Current portion of deferred compensation	5,186		8,915
Revolving line of credit	120,000		—
Total current liabilities	317,325		251,309
Non-current liabilities:
Deferred compensation and other non-current liabilities	5,987		22,329
Non-current portion of lease liabilities	85,166		84,541
Deferred income taxes	1,299		1,187
Total non-current liabilities	92,452		108,057
Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred stock, no par value; 1,000,000 shares authorized; none issued and outstanding	—		—
Common stock, no par value; 25,000,000 shares authorized; 6,561,563 and 6,768,575 shares issued and outstanding, respectively	—		1,663
Retained earnings	206,485		225,461
Accumulated other comprehensive loss	(9,485)		(15,051)
Total shareholders’ equity	197,000		212,073
Total liabilities and shareholders’ equity	$	606,777	$	571,439

See accompanying notes to the condensed consolidated financial statements.

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CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)


	Fiscal Year-to-Date Period Ended
	June 28, 2025		June 29, 2024
OPERATING ACTIVITIES:
Net income	$	30,124	$	20,229
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	6,941		5,603
Right-of-use asset amortization	7,748		7,462
Deferred income taxes	(360)		(102)
Share-based compensation expense	2,352		2,396
Bad debt expense (recovery)	563		681
Unrealized foreign currency remeasurement (gains) losses, net	465		(271)
Changes in operating assets and liabilities:
Accounts receivable	5,161		1,341
Unbilled services	(16,532)		(19,817)
Prepaid expenses and other current assets, and other assets	(671)		(3,821)
Forgivable loans	(26,312)		(6,083)
Incentive cash awards payable	6,001		4,796
Accounts payable, accrued expenses, and other liabilities	(80,182)		(64,488)
Lease liabilities	(9,440)		(9,199)
Net cash used in operating activities	(74,142)		(61,273)
INVESTING ACTIVITIES:
Purchases of property and equipment	(2,163)		(3,046)
Consideration paid for acquisition	—		(1,500)
Net cash used in investing activities	(2,163)		(4,546)
FINANCING ACTIVITIES:

Borrowings under revolving line of credit	132,000		93,000
Repayments under revolving line of credit	(12,000)		(6,000)

Tax withholding payments reimbursed by shares	(2,809)		(1,977)

Cash dividends paid	(6,858)		(5,976)
Repurchase of common stock	(43,150)		(33,348)
Net cash provided by financing activities	67,183		45,699
Effect of foreign exchange rates on cash and cash equivalents	1,859		(817)
Net decrease in cash and cash equivalents	(7,263)		(20,937)
Cash and cash equivalents at beginning of period	26,711		45,586
Cash and cash equivalents at end of period	$	19,448	$	24,649

Noncash investing and financing activities:
Increase (decrease) in accounts payable and accrued expenses for property and equipment	$	(585)	$	553

Excise tax on share repurchases	$	(388)	$	(300)
Right-of-use assets obtained in exchange for lease obligations	$	7,808	$	2,329


Supplemental cash flow information:
Cash paid for taxes	$	14,854	$	12,681
Cash paid for interest	$	1,670	$	1,533
Cash paid for amounts included in operating lease liabilities	$	11,515	$	11,163

See accompanying notes to the condensed consolidated financial statements.

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CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE FISCAL YEAR-TO-DATE PERIOD ENDED June 28, 2025 (unaudited)

(in thousands, except share data)


	Common Stock			Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares Issued	Amount
BALANCE AT DECEMBER 28, 2024	6,768,575	$	1,663	$	225,461	$	(15,051)	$	212,073
Net income	—	—		18,002		—		18,002
Foreign currency translation adjustment	—	—		—		1,743		1,743

Share-based compensation expense	—	1,390		—		—		1,390
Restricted shares vesting	34,780	—		—		—		—
Redemption of vested employee restricted shares for tax withholding	(13,462)	(2,454)		—		—		(2,454)
Shares repurchased	—	—		—		—		—
Accrued excise tax on shares repurchased	—	—		39		—		39
Accrued dividends on unvested shares	—	—		14		—		14
Cash dividends paid ($0.49 per share)	—	—		(3,488)		—		(3,488)
BALANCE AT MARCH 29, 2025	6,789,893	599		$	240,028	$	(13,308)	$	227,319
Net income	—	$	—	$	12,122	$	—	$	12,122
Foreign currency translation adjustment	—	—		—		3,823		3,823


Share-based compensation expense	—	962		—		—		962
Restricted shares vesting	4,487	—		—		—		—
Redemption of vested employee restricted shares for tax withholding	(2,144)	(355)		—		—		(355)
Shares repurchased	(230,673)	(1,206)		(41,944)		—		(43,150)
Accrued excise tax on shares repurchased	—	—		(428)		—		(428)
Accrued dividends on unvested shares	—	—		77		—		77
Cash dividends paid ($0.49 per share)	—	—		(3,370)		—		(3,370)
BALANCE AT JUNE 28, 2025	6,561,563	—		$	206,485	$	(9,485)	$	197,000

See accompanying notes to the condensed consolidated financial statements.

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CRA INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE FISCAL YEAR-TO-DATE PERIOD ENDED June 29, 2024 (unaudited)

(in thousands, except share data)


	Common Stock			Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares Issued	Amount
BALANCE AT DECEMBER 30, 2023	6,934,265	$	—	$	224,283	$	(12,182)	$	212,101
Net income	—	—		13,691		—		13,691
Foreign currency translation adjustment	—	—		—		(1,105)		(1,105)


Share-based compensation expense	—	1,039		—		—		1,039
Restricted shares vesting	33,441	—		—		—		—
Redemption of vested employee restricted shares for tax withholding	(12,526)	(1,631)		—		—		(1,631)
Shares repurchased	(65,882)	592		(9,834)		—		(9,242)
Accrued excise tax on shares repurchased	—	—		(65)		—		(65)
Accrued dividends on unvested shares	—	—		77		—		77
Cash dividends paid ($0.42 per share)	—	—		(3,075)		—		(3,075)
BALANCE AT MARCH 30, 2024	6,889,298	$	—	$	225,077	$	(13,287)	$	211,790
Net income	—	—		6,538		—		6,538
Foreign currency translation adjustment	—	—		—		(315)		(315)

Share-based compensation expense	—	1,357		—		—		1,357
Restricted shares vesting	6,143	—		—		—		—
Redemption of vested employee restricted shares for tax withholding	(2,340)	(346)		—		—		(346)
Shares repurchased	(140,497)	(1,011)		(23,095)		—		(24,106)
Accrued excise tax on shares repurchased	—	—		(235)		—		(235)
Accrued dividends on unvested shares	—	—		(33)		—		(33)
Cash dividends paid ($0.42 per share)	—	—		(2,901)		—		(2,901)
BALANCE AT JUNE 29, 2024	6,752,604	$	—	$	205,351	$	(13,602)	$	191,749

See accompanying notes to the condensed consolidated financial statements.

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CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Summary of Significant Accounting Policies

Description of Business

CRA International, Inc. and its wholly-owned subsidiaries (collectively, "CRA" or the "Company") is a worldwide leading consulting services firm that applies advanced analytic techniques and in-depth industry knowledge to complex engagements for a broad range of clients. CRA offers services in two broad areas: litigation, regulatory, and financial consulting and management consulting. CRA operates in one business segment. CRA operates its business under its registered trade name, Charles River Associates.

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of CRA which require consolidation, after the elimination of intercompany accounts and transactions. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair presentation of CRA’s results of operations, financial position, cash flows, and shareholders’ equity for the interim periods presented in conformity with U.S. GAAP. Results of operations for the interim periods presented herein are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 28, 2024 included in CRA’s Annual Report on Form 10-K filed with the SEC on February 20, 2025.

Note 1 to the Consolidated Financial Statements included in Part II, Item 8, on Form 10-K for the fiscal year ended December 28, 2024 describes the significant accounting policies and methods used in preparation of the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

Recent Accounting Standards Not Yet Adopted

Income Taxes (Topic 740): Improvements to Income Tax Disclosures

In December 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). The ASU expands annual disclosures in an entity’s income tax rate reconciliation table and requires annual disclosures regarding cash taxes paid both in the U.S. (federal, state and local) and foreign jurisdictions. ASU 2023-09 also requires income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign.

ASU 2023-09 is effective for CRA for annual periods beginning after December 15, 2024. CRA plans to adopt the amendment during the annual reporting for fiscal year 2025. CRA has begun to assess the impact of the amendment and has modeled out the changes to its income tax disclosures. As the amendment relates solely to disclosures, the adoption is not expected to have an effect on CRA's financial results.

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). The

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CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

ASU requires disclosure, in the notes to the financial statements, specified information about certain costs and expenses including employee compensation, depreciation, and intangible asset amortization.

ASU 2024-03, further clarified in ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense

Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date is effective for CRA for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. CRA expects the adoption of this ASU will have no impact on its financial position or its results of operations, but will result in additional disclosures.

2. Revenues and Allowances

The contracts CRA enters into and operates under specify whether the projects are billed on a time-and-materials or a fixed-price basis. Time-and-materials contracts are typically used for litigation, regulatory, and financial consulting projects while fixed-price contracts are principally used for management consulting projects. In general, project costs are classified in costs of services and are based on the direct salary of CRA’s employee consultants on the engagement, plus all direct expenses incurred to complete the project, including any amounts billed to CRA by its non-employee experts.

Disaggregation of Revenue

The following tables disaggregate CRA’s revenue by type of contract and geographic location (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
Type of Contract	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Consulting services revenues:
Fixed-price	$	29,413	$	29,292	$	59,742	$	59,373
Time-and-materials	157,465		142,150		308,987		283,857
Total	$	186,878	$	171,442	$	368,729	$	343,230

Revenues have been attributed to locations based on the location of the legal entity generating the revenues.


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
Geographic Breakdown	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Consulting services revenues:
United States	$	151,745	$	138,601	$	301,458	$	280,805
United Kingdom	22,463		22,161		45,587		43,315
Other	12,670		10,680		21,684		19,110
Total	$	186,878	$	171,442	$	368,729	$	343,230

Reserves for Variable Consideration and Credit Risk

Revenues from CRA's consulting services are recorded at the net transaction price, which includes estimates of variable consideration for which reserves are established. Variable consideration reserves are based on specific price concessions and those expected to be extended to CRA customers estimated by CRA's historical realization rates. Reserves for variable consideration are recorded as a component of the allowances for accounts receivable and unbilled services on the condensed consolidated balance sheets. Adjustments to the reserves for variable consideration are included in revenues on the condensed consolidated statements of operations.

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CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

CRA also maintains allowances for accounts receivable and unbilled services for estimated losses resulting from clients’ failure to make required payments. Under ASC Topic 326, Financial Instruments—Credit Losses, CRA estimates allowances based on historical charge-off rates, adjusted for days sales outstanding and expected changes to clients’ financial conditions during the anticipated collection period. Bad debt expense, net of recoveries of previously written off allowances, is recorded as a component of selling, general and administrative expenses on the condensed consolidated statements of operations.

The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Bad debt expense (recovery), net	$	129	$	18	$	563	$	681

Reimbursable Expenses

Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including travel and other out-of-pocket expenses, fees for outside consultants, and other reimbursable expenses. CRA recovers substantially all of these costs. The following expenses are subject to reimbursement (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Reimbursable expenses	$	19,615	$	16,361	$	36,121	$	33,423

Contract Balances from Contracts with Customers

The timing of revenue recognition, billings, and cash collections results in accounts receivables, unbilled services, and contract liabilities on the condensed consolidated balance sheets. Revenues recognized for services performed, but not yet billed to clients, are recorded as unbilled services. The following table presents the open and closing balances of CRA's accounts receivable, net and unbilled services, net (in thousands):


	June 28, 2025		December 28, 2024		December 30, 2023
Accounts receivable, net	$	159,717	$	162,293	$	142,729
Unbilled services, net	$	75,308	$	57,255	$	56,827

CRA defines contract assets as assets for which it has recorded revenue because it determines that it is probable that it will earn a performance-based or contingent fee, but is not yet entitled to receive a fee because certain events, such as completion of the measurement period or client approval, must occur. The contract assets balance was immaterial as of June 28, 2025, December 28, 2024, and December 30, 2023.

When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after performance obligations have been satisfied and all revenue recognition criteria have been met. Contract liabilities are included in deferred revenue and other liabilities in the condensed consolidated balance sheets. The following table presents the closing balances of CRA's contract liabilities (in thousands):


	June 28, 2025		December 28, 2024		December 30, 2023
Contract liabilities	$	2,966	$	7,340	$	6,037

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CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

CRA recognized the following revenue that was included in the contract liabilities balance as of the opening of the respective period or for performance obligations satisfied in previous periods (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Amounts included in contract liabilities at the beginning of the period	$	2,567	$	2,296	$	6,983	$	5,612
Performance obligations satisfied in previous periods	$	3,686	$	3,394	$	2,702	$	3,515

3. Forgivable Loans

In order to attract and retain highly skilled professionals, CRA may issue forgivable loans to employees and non-employee experts, certain of which may be denominated in local currencies. A portion of these loans is collateralized. The forgivable loans have terms that are generally between two and eight years with interest rates currently between 0.43% and 5.12%. The principal amount of forgivable loans and accrued interest is forgiven by CRA over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with CRA and complies with certain contractual requirements. During the fiscal year-to-date period ended June 28, 2025 and fiscal year 2024 there were no balances due under these loans for which the full principal and interest were not forgiven or not collected upon termination of employment or affiliation with CRA. The forgiveness of the principal amount of the loans is recorded as compensation over the service period, which is consistent with the term of the loans.

The following table presents forgivable loan activity for the respective periods (in thousands):


	June 28, 2025		December 28, 2024
Beginning balance	$	55,492	$	53,941
Advances	40,938		45,494
Repayments	(600)		(2,761)
Reclassifications from accrued expenses or to other assets (1)	—		(9,989)
Amortization (2)	(14,080)		(31,055)
Effects of foreign currency translation	564		(138)
Ending balance	$	82,314	$	55,492
Current portion of forgivable loans	$	17,961	$	6,535
Non-current portion of forgivable loans	$	64,353	$	48,957

_______________________________

(1)Relates to the reclassification of performance awards previously recorded as accrued expenses or forgivable loans that have been reclassified to other receivables.

(2)During the fiscal year-to-date period ended June 28, 2025 and fiscal year ended December 28, 2024, approximately $0.04 million and $5.7 million, respectively, of amortization was accelerated due to involuntary terminations.

4. Goodwill and Intangible Assets

The changes in the carrying amount of goodwill for the fiscal year-to-date period ended June 28, 2025 are summarized as follows (in thousands):

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CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)




Goodwill, at December 28, 2024	$	165,630
Accumulated goodwill impairment	(71,893)
Goodwill, net at December 28, 2024	93,737

Foreign currency translation adjustment	1,211
Goodwill, net at June 28, 2025	$	94,948

Goodwill, net at June 28, 2025 is comprised of goodwill of $166.8 million and accumulated impairment of $71.9 million. There were no impairment losses related to goodwill during the fiscal year-to-date period ended June 28, 2025 or during the fiscal year ended December 28, 2024.

Intangible assets that are separable from goodwill and have determinable useful lives are valued separately and amortized using the straight-line method over their expected useful lives. There were no impairment losses related to intangible assets during the fiscal-year-to-date period ended June 28, 2025 or during the fiscal year ended December 28, 2024.

The components of acquired identifiable intangible assets are as follows (in thousands):


		June 28, 2025						December 28, 2024
	Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount

Customer relationships	10	$	15,300	$	(8,849)	$	6,451	$	15,300	$	(8,084)	$	7,216

As a result of an asset acquisition in CRA's intellectual property practice, CRA recognized $1.5 million of intangible assets related to customer relationships during the second quarter of fiscal 2024. Amortization expense related to intangible assets was $0.4 million and $0.8 million for the fiscal quarter and fiscal year-to-date period ended June 28, 2025, respectively. Amortization expense related to intangible assets was $0.4 million and $0.7 million for the fiscal quarter and fiscal year-to-date period ended June 29, 2024, respectively.

5. Accrued Expenses

Accrued expenses consist of the following (in thousands):


	June 28, 2025		December 28, 2024
Compensation and related expenses	$	110,398	$	167,899
Performance awards	16,880		159
Direct project accruals	2,918		2,236
Other	9,555		11,119
Total accrued expenses	$	139,751	$	181,413

As of June 28, 2025 and December 28, 2024, approximately $82.6 million and $144.2 million, respectively, of accrued bonuses were included above in “Compensation and related expenses.”

6. Income Taxes

For the fiscal quarters ended June 28, 2025 and June 29, 2024, CRA’s effective income tax rate (“ETR”) was 29.2% and 32.0%, respectively. The ETR for the second quarter of fiscal 2025 was lower than the second quarter of fiscal 2024 primarily due to the impact of state tax law changes effective for the 2025 tax year as well as an ETR true-up adjustment during the second quarter of fiscal 2024 that was substantially less in the current period. The impact of these items were partially offset by a tax reserve recognized in the estimated annual effective tax rate of fiscal 2025.

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CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

For the fiscal year-to-date periods ended June 28, 2025 and June 29, 2024, CRA's ETR was 27.9% and 29.3%, respectively. The ETR for the current fiscal year-to-date period was lower than the prior year-to-date period primarily due to the impact of state tax law changes effective for the 2025 tax year and an increased benefit related to share-based compensation and the foreign-derived intangible income (“FDII”) deduction. The impact of these items were partially offset by a tax reserve recognized in the estimated annual effective tax rate of fiscal 2025.

On July 4, 2025, tax legislation known as the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The Company is currently evaluating the impact of U.S. tax law changes introduced by OBBBA on our consolidated financial statements but does not currently expect a material impact on CRA.

7. Net Income Per Share

CRA calculates basic earnings per share using the two-class method. CRA calculates diluted earnings per share using the more dilutive of either the two-class method or treasury stock method. The two-class method was more dilutive for the fiscal quarters and fiscal year-to-date periods ended June 28, 2025 and June 29, 2024.

Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all the net earnings for the period had been distributed. CRA's participating securities consist of unvested share-based payment awards that contain a nonforfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders. Net earnings allocable to these participating securities were not material for the fiscal quarters and fiscal year-to-date periods ended June 28, 2025 and June 29, 2024.

The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Numerator:
Net income — basic	$	12,122	$	6,538	$	30,124	$	20,229
Less: net income attributable to participating shares	23		22		61		68
Net income — diluted	$	12,099	$	6,516	$	30,063	$	20,161
Denominator:
Weighted average shares outstanding — basic	6,694		6,834		$	6,734	$	6,880
Effect of dilutive stock options and restricted stock units	59		77		73		81
Weighted average shares outstanding — diluted	6,753		6,911		6,807		6,961
Net income per share:
Basic	$	1.81	$	0.96	$	4.47	$	2.93
Diluted	$	1.79	$	0.94	$	4.42	$	2.90

For the fiscal quarter and fiscal year-to-date period ended June 28, 2025, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding amounted to 5,229 and 1,283 shares, respectively. There were no anti-dilutive share-based awards for the fiscal quarter and fiscal year-to-date period ended June 29, 2024.

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CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

8. Fair Value of Financial Instruments

As of June 28, 2025 and December 28, 2024, CRA did not have any financial instruments measured at fair value on a recurring basis.

CRA had no contingent consideration obligations during the fiscal quarter and fiscal year-to-date period ended June 28, 2025.

The contingent consideration liability pertained to estimated future contingent consideration payments related to the acquisition of bioStrategies Group, Inc. during fiscal 2022. The following table summarizes the changes in the contingent consideration liability for the fiscal year ended December 28, 2024 (in thousands):


	Fiscal Year Ended
	December 28, 2024
Beginning balance	$	190
Remeasurement of acquisition-related contingent consideration	(190)
Accretion	—

Ending balance	$	—

9. Credit Agreement

CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides CRA with a $250.0 million revolving credit facility, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million. The revolving credit facility includes a $25.0 million sublimit for the issuance of letters of credit.

Under the Credit Agreement, CRA must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1 and a minimum consolidated interest coverage ratio of 2.5 to 1. The primary non-financial covenants include, but are not limited to, restrictions on CRA's ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including CRA's failure to pay principal, interest or fees, or upon the breach of any covenant. As of June 28, 2025, CRA was in compliance with the covenants of the Credit Agreement.

There were $120.0 million in borrowings outstanding under the revolving credit facility as of June 28, 2025 and no borrowings outstanding as of December 28, 2024. As of June 28, 2025, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $3.5 million.

10. Commitments and Contingencies

As described in Note 9, CRA is party to standby letters of credit with its banks in support of minimum future lease payments under certain operating leases for office space.

CRA is subject to legal actions arising in the ordinary course of business. In management’s opinion, based on current knowledge, CRA believes it has adequate legal defenses or insurance coverage, or both, with respect to the eventuality of such actions. CRA does not believe any settlement or judgment relating to any pending legal action would materially affect its financial position or results of operations. However, the outcome of such legal actions is inherently unpredictable and subject to inherent uncertainties.

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CRA INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

11. Segment Reporting

CRA manages its business globally within one operating segment, professional and consulting services, in accordance with ASC Topic 280, Segment Reporting. The accounting policies of the professional and consulting services segment are the same as those described in Note 1 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, filed with the SEC on February 20, 2025.

The chief operating decision maker, which is our Chief Executive Officer, assesses performance for the professional and consulting services segment and decides how to allocate resources based on consolidated net income that is also reported in the condensed consolidated statements of operations as net income. The measure of segment assets is reported in the condensed consolidated balance sheets as total assets.

The following table represents consolidated net income reported by segment revenue, segment profit or loss, and significant segment expenses (in thousands):


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Revenues	$	186,878	$	171,442	$	368,729	$	343,230
Employee compensation and fringe benefit costs	110,860		106,270		223,657		211,417
Forgivable loan amortization	7,428		11,985		14,080		17,757
Client reimbursable expenses	19,615		16,361		36,121		33,423
Other segment expense (1)	31,859		27,212		53,111		52,007
Provision for income taxes	4,994		3,076		11,636		8,397
Segment net income	12,122		6,538		30,124		20,229
Reconciliation of profit or loss
Adjustments and reconciling items	—		—		—		—
Consolidated net income	$	12,122	$	6,538	$	30,124	$	20,229

1 Other segment expenses included in segment net income includes, rent, commissions to non-employee experts, legal and professional services, software subscription and data services, travel and entertainment expenses, training and marketing expenses, other operating expenses, depreciation and amortization, interest expense, net, and foreign currency gains (losses), net.

12. Subsequent Events

On July 31, 2025, CRA announced that its Board of Directors declared a quarterly cash dividend of $0.49 per common share, payable on September 12, 2025 to shareholders of record as of August 26, 2025.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Except for historical facts, the statements in this quarterly report are forward-looking statements. Forward-looking statements are merely our current predictions of future events. These statements are inherently uncertain, and actual events could differ materially from our predictions. Important factors that could cause actual events to vary from our predictions include those discussed below under the heading “Risk Factors.” We assume no obligation to update our forward-looking statements to reflect new information or developments. We urge readers to review carefully the risk factors described in the other documents that we file with the Securities and Exchange Commission ("SEC"). You can read these documents at www.sec.gov.

Additional Available Information

Our principal Internet address is www.crai.com. Our website provides a link to a third-party website through which our annual, quarterly, and current reports, and amendments to those reports, are available free of charge. We do not maintain or provide any information directly to the third-party website, and we do not check its accuracy.

Critical Accounting Policies and Estimates

Our critical accounting policies involving the more significant estimates and judgments used in the preparation of our financial statements as of June 28, 2025 remain unchanged from December 28, 2024. Please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, filed with the SEC on February 20, 2025 for details on these critical accounting policies.

Recent Accounting Standards

There are no recent accounting standards that impact the unaudited condensed consolidated financial statements.

Results of Operations—For the Fiscal Quarter and Fiscal Year-to-Date Period Ended June 28, 2025, Compared to the Fiscal Quarter and Fiscal Year-to-Date Period Ended June 29, 2024

The following table provides operating information as a percentage of revenues for the periods indicated:


	Fiscal Quarter Ended				Fiscal Year-to-Date Period Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Revenues	100.0	%	100.0	%	100.0	%	100.0	%
Costs of services (exclusive of depreciation and amortization)	68.8		73.1		67.5		71.1
Selling, general and administrative expenses	18.8		18.7		18.3		18.2
Depreciation and amortization	1.9		1.6		1.9		1.6
Income from operations	10.6		6.6		12.3		9.0
Interest expense, net	(1.0)		(0.9)		(0.6)		(0.6)
Foreign currency gains (losses), net	(0.4)		(0.1)		(0.3)		(0.1)
Income before provision for income taxes	9.2		5.6		11.3		8.3
Provision for income taxes	2.7		1.8		3.2		2.4
Net income	6.5	%	3.8	%	8.2	%	5.9	%

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Fiscal Quarter Ended June 28, 2025, Compared to the Fiscal Quarter Ended June 29, 2024

Revenues. Revenues increased by $15.5 million, or 9.0%, to $186.9 million for the second quarter of fiscal 2025 from $171.4 million for the second quarter of fiscal 2024. Utilization increased to 76% for the second quarter of fiscal 2025 from 74% for the second quarter of fiscal 2024, while consultant headcount decreased to 937 at the end of the second quarter of fiscal 2025 from 968 at the end of the second quarter of fiscal 2024.

Overall, revenues outside of the U.S. represented approximately 19% of net revenues for each of the second quarters of fiscal 2025 and fiscal 2024. Revenues derived from fixed-price projects decreased to 16% of net revenues for the second quarter of fiscal 2025 compared to 17% of net revenues for the second quarter of fiscal 2024. The percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $3.2 million, or 2.6%, to $128.5 million for the second quarter of fiscal 2025 from $125.3 million for the second quarter of fiscal 2024. The increase in costs of services was due to an increase in employee and incentive compensation of $3.7 million, an increase in client reimbursable expenses of $3.3 million, and an increase in external consultants indirect project expenses of $0.4 million, partially offset by a decrease in forgivable loan amortization of $4.2 million. As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 68.8% for the second quarter of fiscal 2025 from 73.1% for the second quarter of fiscal 2024.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $3.1 million, or 9.7%, to $35.1 million for the second quarter of fiscal 2025 from $32.0 million for the second quarter of fiscal 2024. Within this category of expenses, there was a $0.9 million increase in legal and professional service fees, a $0.8 million increase in commissions to non-employee experts, a $0.6 million increase in rent expense, a $0.4 million increase in travel and entertainment, and a $0.6 million increase in miscellaneous and other fees, partially offset by a $0.2 million decrease in employee and incentive compensation for the second quarter of fiscal 2025 as compared to the second quarter of fiscal 2024.

As a percentage of revenues, selling, general and administrative expenses increased to 18.8% for the second quarter of fiscal 2025 from 18.7% for the second quarter of fiscal 2024. Commissions to our non-employee experts increased to 2.4% of revenues for the second quarter of fiscal 2025 compared to 2.2% of revenues for the second quarter of fiscal 2024.

Provision for Income Taxes. The income tax provision was $5.0 million and the effective tax rate ("ETR") was 29.2% for the second quarter of fiscal 2025 compared to $3.1 million and 32.0% for the second quarter of fiscal 2024. The ETR for the second quarter of fiscal 2025 was lower than the second quarter of fiscal 2024 primarily due to the impact of state tax law changes effective for the 2025 tax year as well as a less significant ETR true-up adjustment in the current period compared to the second quarter of fiscal 2024 The impact of these items were partially offset by a tax reserve recognized in the estimated annual effective tax rate of fiscal 2025. The ETR for the first quarter of fiscal 2025 and 2024 were both higher than the combined federal and state statutory tax rate primarily due to nondeductible executive compensation and nondeductible meals and entertainment expenses, partially offset by the tax benefit related to share-based compensation and the FDII deduction.

Net Income. Net income increased to $12.1 million for the second quarter of fiscal 2025 from $6.5 million for the second quarter of fiscal 2024. The net income per diluted share was $1.79 per share for the second quarter of fiscal 2025, compared to $0.94 of net income per diluted share for the second quarter of fiscal 2024. Weighted average diluted shares outstanding decreased by approximately 158,000 shares to approximately 6,753,000 shares for the second quarter of fiscal 2025 from approximately 6,911,000 shares for the second quarter of fiscal 2024. The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since June 29, 2024, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units since June 29, 2024.

Fiscal Year-to-Date Period Ended June 28, 2025, Compared to the Fiscal Year-to-Date Period Ended June 29, 2024

Revenues. Revenues increased by $25.5 million, or 7.4%, to $368.7 million for the fiscal year-to-date period ended June 28, 2025 from $343.2 million for the fiscal year-to-date period ended June 29, 2024. Utilization increased to 76% for the fiscal year-to-date period ended June 28, 2025 from 74% for the fiscal year-to-date period ended June 29, 2024, while consultant headcount decreased from 968 at the end of the second quarter of fiscal 2024 to 937 at the end of the second quarter of fiscal 2025.

Overall, revenues outside of the U.S. represented approximately 18% of net revenues for the fiscal year-to-date periods ended June 28, 2025 and June 29, 2024. Revenues derived from fixed-price projects decreased to 16% of net revenues for the

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fiscal year-to-date periods ended June 28, 2025 compared to 17% of net revenues for the second quarter of fiscal 2024. The percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

Costs of Services (exclusive of depreciation and amortization). Costs of services (exclusive of depreciation and amortization) increased by $4.7 million, or 1.9%, to $248.9 million for the fiscal year-to-date period ended June 28, 2025 from $244.2 million for the fiscal year-to-date period ended June 29, 2024. The increase in costs of services was due to an increase of $10.5 million in employee compensation and fringe benefit costs, an increase of $2.7 million in client reimbursable expenses, and an increase of $0.7 million in external consultants indirect project expenses, partially offset by a decrease in forgivable loan amortization of $9.2 million. As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 67.5% for the fiscal year-to-date period ended June 28, 2025 from 71.1% for the fiscal year-to-date period ended June 29, 2024.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased by $5.1 million, or 8.2%, to $67.6 million for the fiscal year-to-date period ended June 28, 2025 from $62.5 million for the fiscal year-to-date period ended June 29, 2024. Within this category of expenses, there was a $1.8 million increase in legal and professional service fees, $0.9 million increase in rent expense, a $0.8 million increase in commissions to our non-employee experts, $0.6 million increase in employee compensation and fringe benefit costs, a $0.6 million increase in travel and entertainment expense, and a $0.4 million increase in miscellaneous and other fees for the fiscal year-to-date period ended June 28, 2025 as compared to the fiscal year-to-date period ended June 29, 2024.

As a percentage of revenues, selling, general and administrative expenses increased to 18.3% for the fiscal year-to-date period ended June 28, 2025 from 18.2% for the fiscal year-to-date period ended June 29, 2024. Commissions to our non-employee experts increased to 2.3% of revenues for the fiscal year-to-date period ended June 28, 2025 compared to 2.2% of revenues for the fiscal year-to-date period ended June 29, 2024.

Provision for Income Taxes. The income tax provision was $11.6 million and the ETR was 27.9% for the fiscal year-to-date period ended June 28, 2025, compared to $8.4 million and 29.3% for the fiscal year-to-date period ended June 29, 2024. The ETR for the fiscal year-to-date period ended June 28, 2025 was lower than the fiscal year-to-date period ended June 29, 2024 primarily due to the impact of state tax law changes effective for the 2025 tax year and an increased benefit related to share-based compensation and the FDII deduction. The impact of these items were partially offset by a tax reserve recognized in the estimated annual effective tax rate of fiscal 2025. The ETR for the fiscal year-to-date periods ended June 28, 2025 and June 29, 2024 were both higher than the combined federal and state statutory tax rate primarily due to nondeductible executive compensation and nondeductible meals and entertainment expenses, partially offset by the tax benefit related to share-based compensation and the FDII deduction.

Net Income. Net income increased by $9.9 million to $30.1 million for the fiscal year-to-date period ended June 28, 2025 from $20.2 million for the fiscal year-to-date period ended June 29, 2024. The diluted net income per share was $4.42 for the fiscal year-to-date period ended June 28, 2025, compared to diluted net income per share of $2.90 for the fiscal year-to-date period ended June 29, 2024. Weighted average diluted shares outstanding decreased by approximately 154,000 to approximately 6,807,000 shares for the fiscal year-to-date period ended June 28, 2025 from approximately 6,961,000 shares for the fiscal year-to-date period ended June 29, 2024. The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since June 29, 2024, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units since June 29, 2024.

Liquidity and Capital Resources

Fiscal Year-to-Date Period Ended June 28, 2025

We believe that our current cash, cash equivalents, cash generated from operations, and amounts available under our revolving credit facility will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months. As of June 28, 2025, we had $19.4 million of cash and cash equivalents and $126.5 million of borrowing capacity under our revolving credit facility.

General. During the fiscal year-to-date period ended June 28, 2025, cash and cash equivalents decreased by $7.3 million. We completed the period with cash and cash equivalents of $19.4 million. The principal drivers of the decrease of cash and cash equivalents were the payment of a significant portion of our fiscal 2024 performance bonuses in the first quarter of fiscal 2025, forgivable loan advances, repurchase of shares, and the payment of dividends, offset by net borrowings of $120.0 million.

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At June 28, 2025, $5.2 million of our cash and cash equivalents was held within the U.S. We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility to fund U.S. operations for the next 12 months without the need to repatriate funds from our foreign subsidiaries.

Sources and Uses of Cash. During the fiscal year-to-date period ended June 28, 2025, net cash used in operating activities was $74.1 million. Net income was $30.1 million for the fiscal year-to-date period ended June 28, 2025. Uses of cash for operating activities included a decrease in accounts payable, accrued expenses, and other liabilities of $80.2 million, primarily due to the payment of a significant portion of our fiscal 2024 performance bonuses, an increase in forgivable loans for the period of $26.3 million which was primarily driven by $40.3 million of forgivable loan issuances, net of repayments, offset by $14.0 million of forgivable loan amortization, an increase of $16.5 million in unbilled receivables, a $9.4 million decrease in lease liabilities, and a $0.7 million increase in prepaid expenses and other current assets, and other assets. Partially offsetting these uses of cash was an increase of $6.0 million in incentive cash awards payable and a decrease of $5.2 million in accounts receivable.

Non-cash items included right-of-use amortization of $7.7 million, depreciation and amortization expense of $6.9 million, and share-based compensation expenses of $2.4 million.

During the fiscal year-to-date period ended June 28, 2025, net cash used in investing activities was $2.2 million, which consisted of capital expenditures, primarily related to computer equipment.

During the fiscal year-to-date period ended June 28, 2025, net cash provided by financing activities was $67.2 million, primarily as a result of net borrowings under the revolving credit facility of $120.0 million. Offsetting this increase in cash provided by financing activities were repurchases of common stock of $43.2 million, payment of cash dividends and dividend equivalents of $6.8 million, and tax withholding payments reimbursed by restricted shares on vesting of $2.8 million.

Lease Commitments

We are a lessee under certain operating leases for office space and equipment. Certain of our operating leases have terms that impose asset retirement obligations due to office modifications or the periodic redecoration of the premises, which are included in deferred compensation and other non-current liabilities on our condensed consolidated balance sheets and are recorded at a value based on their estimated discounted cash flows. At June 28, 2025, we expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months of $0.2 million. The remainder of our asset retirement obligations and redecoration obligations are approximately $3.1 million and are expected to be paid between fiscal year 2026 and fiscal year 2035 when the underlying leases terminate or when the respective lease agreement requires redecoration. We expect to satisfy these lease and related obligations as they become due from cash generated from operations.

Indebtedness

We may use the proceeds of the revolving credit loans under the Credit Agreement for general corporate purposes and may repay any borrowings under the revolving credit facility at any time, but any borrowings must be repaid no later than August 19, 2027. Borrowings under the revolving credit facility bear interest at a rate per annum equal to one of the following rates, at our election, plus an applicable margin as described below: (i) in the case of borrowings in U.S. dollars by us, the Base Rate (as defined in the Credit Agreement), (ii) in the case of borrowings in U.S. dollars, a rate based on Term SOFR (as defined in the Credit Agreement) for the applicable interest period, (iii) in the case of borrowings in Euros, EURIBOR (as defined in the Credit Agreement) for the applicable interest period, (iv) in the case of borrowings in Pounds Sterling, a daily rate based on SONIA (as defined in the Credit Agreement), (v) in the case of borrowings in Canadian Dollars, Term CORRA (as defined in the Credit Agreement) for the applicable interest period, (vi) in the case of borrowings in Swiss Francs, a daily rate based on SARON (as defined in the Credit Agreement), or (vii) in the case of borrowings in any other Alternate Currency (as defined in the Credit Agreement), the relevant daily or term rate determined as provided in the Credit Agreement. The applicable margin on borrowings based on the Base Rate varies within a range of 0.25% to 1.00% depending on our consolidated net leverage

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ratio, and the applicable margin on borrowings based on any of the other rates described above varies within a range of 1.25% to 2.00% depending on our consolidated net leverage ratio.

We are required to pay a fee on the amount available to be drawn under any letter of credit issued under the revolving credit facility at a rate per annum that varies between 1.25% and 2.00% depending on our consolidated net leverage ratio. In addition, we are required to pay a fee on the unused portion of the revolving credit facility at a rate per annum that varies between 0.175% and 0.250% depending on our consolidated net leverage ratio.

Under the Credit Agreement, we must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1 and a minimum consolidated interest coverage ratio of 2.5 to 1. The primary non-financial covenants include, but are not limited to, restrictions on our ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including our failure to pay principal, interest or fees, or upon the breach of any covenant. As of June 28, 2025, we were in compliance with the covenants of the Credit Agreement.

There was $120.0 million in borrowings outstanding under the revolving credit facility as of June 28, 2025 and no borrowings outstanding as of December 28, 2024. As of June 28, 2025, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $3.5 million.

Forgivable Loans

In order to attract and retain highly skilled professionals, we may issue forgivable loans or term loans to employees and non-employee experts. A portion of these loans is collateralized by key person life insurance. The forgivable loans have terms that are generally between two and eight years. The principal amount of forgivable loans and accrued interest is forgiven by us over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with us and complies with certain contractual requirements. The forgiveness of the principal amount of the loans is recorded as compensation over the service period, which is consistent with the term of the loans.

Compensation Arrangements

We have entered into compensation arrangements for the payment of performance awards to certain of our employees and non-employee experts that are payable if specific performance targets are met. The financial targets may include a measure of revenue generation, profitability, or both. The amounts of the awards to be paid under these compensation arrangements could fluctuate depending on future performance during the applicable measurement periods. Changes in the estimated awards are expensed prospectively over the remaining service period. We believe that we will have sufficient funds to satisfy any cash obligations related to the performance awards. We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings available on our revolving credit facility.

Our Amended and Restated 2006 Equity Incentive Plan, as amended (the "2006 Equity Plan"), authorizes the grant of a variety of incentive and performance equity awards to our directors, employees and non-employee experts, including stock options, shares of restricted stock, restricted stock units, and other equity awards.

Our long-term incentive program, or "LTIP," is used as a framework for equity grants made under our 2006 Equity Plan to our senior corporate leaders, practice leaders, and key revenue generators. The equity awards granted under the LTIP include stock options, time-vesting restricted stock units, and performance-vesting restricted stock units.

Our LTIP allows us to grant service and performance-based cash awards in lieu of, or in addition to, equity awards to our senior corporate leaders, practice leaders, and key revenue generators. The compensation committee of our Board of Directors is responsible for approving all cash and equity awards under the LTIP. We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings available under our revolving credit facility.

Business and Talent Acquisitions

As part of our business, we regularly evaluate opportunities to acquire other consulting firms, practices or groups, or other businesses. In recent years, we have typically paid for acquisitions with cash, or a combination of cash and our common stock, and we may continue to do so in the future. To pay for an acquisition, we may use cash on hand, cash generated from our operations, borrowings available under our revolving credit facility, or we may pursue other forms of financing. Our ability to secure short-term and long-term debt or equity financing in the future, including our ability to refinance our credit agreement,

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will depend on several factors, including our future profitability, the levels of our debt and equity, restrictions under our existing revolving credit facility with our bank, and the overall credit and equity market environments.

Share Repurchases

In February 2025, we announced that our Board of Directors authorized an expansion of our existing share repurchase program of an additional $45.0 million of our common stock to the $13.1 million then remaining under the program. The program has no expiration date. We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.

During the fiscal quarter and the fiscal year-to-date period ended June 28, 2025, we repurchased and retired 230,673 shares under our share repurchase program at an average price per share of $187.06. During the fiscal quarter and fiscal year-to-date period ended June 29, 2024, we repurchased and retired 140,497 and 206,379 shares, respectively, under our share repurchase program at an average price per share of $171.58 and $161.59, respectively. We had approximately $14.9 million available for future repurchases under our share repurchase program as of June 28, 2025. We plan to finance future repurchases with available cash, cash from future operations, and borrowings available under our revolving credit facility. We expect to continue to repurchase shares under our share repurchase program.

Dividends to Shareholders

We anticipate paying regular quarterly dividends each year. These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings available under our revolving credit facility. Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors. During the fiscal quarter and fiscal year-to-date period ended June 28, 2025, we paid dividends and dividend equivalents of $3.4 million and $6.9 million, respectively. During the fiscal quarter and fiscal year-to-date period ended June 29, 2024, we paid dividends and dividend equivalents of $2.9 million and $6.0 million, respectively.

Impact of Inflation

To date, inflation has not had a material impact on our financial results. There can be no assurance, however, that inflation will not adversely affect our financial results in the future.

Future Capital and Liquidity Needs

We anticipate that our future capital and liquidity needs will principally consist of funds required for:

•operating and general corporate expenses relating to the operation of our business, including the compensation of our employees under various annual bonus or long-term incentive compensation programs;

•the hiring of individuals to replenish and expand our employee base;

•capital expenditures, primarily for information technology equipment, office furniture and leasehold improvements;

•debt service and repayments, including interest payments on borrowings from our revolving credit facility;

•share repurchases under programs that we may have in effect from time to time;

•dividends to shareholders;

•potential acquisitions of businesses that would allow us to diversify or expand our service offerings;

•contingent obligations related to our acquisitions; and

•other known future contractual obligations.

The hiring of individuals to replenish and expand our employee base is an essential part of our business operations and has historically been funded principally from operations. Many of the other above activities are discretionary in nature. For example, capital expenditures can be deferred, acquisitions can be forgone, and share repurchase programs and regular dividends can be suspended. As such, our operating model provides flexibility with respect to the deployment of cash flow from

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operations. Given this flexibility, we believe that our cash flows from operations, supplemented by cash on hand and borrowings under our revolving credit facility (as necessary), will provide adequate cash to fund our long-term cash needs from normal operations for at least the next twelve months.

Our conclusion that we will be able to fund our cash requirements by using existing capital resources and cash generated from operations does not take into account the impact of any future acquisition transactions or any unexpected significant changes in the number of employees or other expenditures that are currently not contemplated. The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if economic conditions change from those currently prevailing or from those now anticipated, or if other unexpected circumstances arise that have a material effect on the cash flow or profitability of our business. Any of these events or circumstances, including any new business opportunities, could involve significant additional funding needs in excess of the identified currently available sources and could require us to raise additional debt or equity funding to meet those needs on terms that may be less favorable compared to our current sources of capital. Our ability to raise additional capital, if necessary, is subject to a variety of factors that we cannot predict with certainty, including:

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SEC Form 10-Q filed by CRA International Inc.