Charles River Associates (NASDAQ:CRAI) raised its 2026 revenue outlook after reporting record third-quarter revenue, as demand across its consulting practices helped lift project leads and consultant utilization.
Revenue rose 15.6% from a year earlier to $214.9 million, the highest quarterly total in the company’s history, President and Chief Executive Officer Paul Maleh said on the earnings call. The first three quarters of 2026 were the company’s three highest revenue quarters on record.
Seven practices, representing approximately 95% of third-quarter revenue, grew year over year. Forensic Services, Life Sciences, and Risk, Investigations & Analytics each posted double-digit growth, Maleh said. The company also recorded its highest third-quarter profits as measured by net income, earnings per diluted share and EBITDA.
Higher revenue outlook
For full-year 2026, Charles River Associates expects revenue of $830 million to $840 million on a constant-currency basis relative to 2025, up from its previous forecast of $805 million to $820 million. It narrowed its expected non-GAAP EBITDA margin to 12.2% to 12.8%, from 12.0% to 13.0%.
Through the first three quarters, constant-currency revenue totaled $624 million and non-GAAP EBITDA was $76.8 million, for a margin of 12.3%. Maleh said strong year-to-date results and a healthy sales pipeline supported the revised guidance, while cautioning that uncertain economic, business and political conditions could affect clients and the company.
Maleh also noted that 2026 is a 52-week fiscal year, compared with 53 weeks in 2025. Non-cash forgivable loan amortization, which is included as an expense in EBITDA, is expected to rise approximately $15 million for the full year, including an approximately $1 million year-over-year increase in the fourth quarter.
Demand and hiring
Average weekly project leads and new project originations each increased more than 20% year over year in the third quarter, Maleh said. Legal and regulatory services revenue rose 15.7%, while management consulting revenue increased 9.8%.
The Antitrust & Competition Economics practice posted its seventh consecutive record quarter, benefiting from merger-related work and sustained antitrust demand. Maleh said worldwide merger and acquisition activity reached $3.9 trillion in the first nine months of 2026, up 28% from a year earlier, although third-quarter activity by value fell 41% from the second quarter.
Asked about the sequential decline, Maleh said antitrust engagements tend to last longer than other company projects, with the practice still benefiting from matters that began six to 18 months ago. He said the company was monitoring whether the third-quarter slowdown was a temporary dip or a broader trend.
Charles River Associates ended the quarter with 1,028 consultants, up 6.2% from a year earlier, according to Chief Financial Officer Eric Nierenberg. Utilization rose to 78% from 77%, despite seasonal departures and the addition of approximately 100 new consultants during the quarter.
Maleh attributed the faster-than-expected integration of new employees partly to improved management processes, but more heavily to strong demand. He said the company remains comfortable with a mid-single-digit headcount growth expectation for the year and would not guide investors to high-single-digit growth.
AI, taxes and shareholder returns
Maleh said he could not yet attribute the broader increase in project leads to AI-specific engagements, although AI has increased complexity and may be contributing to demand across the company’s portfolio. He identified preventive cybersecurity work as an opportunity for the Forensic Services practice and said clients remain concerned about data confidentiality when AI tools are used.
The third-quarter non-GAAP effective tax rate rose to 34.9% from 28.8% a year earlier, primarily because of increased non-deductible compensation paid to high-earning individuals, Nierenberg said. Maleh said the company is working with tax advisers on mitigation strategies that could provide relief in the fourth quarter and beyond.
Chief Corporate Development Officer Chad Holmes said the company ended the quarter with $129.6 million in net debt after making $69 million in net payments to reduce credit facility borrowings. The company also increased its quarterly cash dividend by 17.5% to $0.67 per share, its 10th consecutive annual increase.
Through the first three quarters, Charles River Associates returned $60.3 million to shareholders through dividends and share repurchases, Holmes said. It had $16.6 million remaining under its repurchase authorization.
About Charles River Associates (NASDAQ:CRAI)
Charles River Associates, operating as CRA International, Inc, is a global consulting firm that provides economic, financial, and management consulting services. The company advises corporations, law firms, government agencies, and other organizations on complex business, legal, regulatory, and strategic matters.
CRA’s services include economic and financial analysis for litigation and regulatory proceedings, antitrust and competition consulting, corporate strategy, business performance improvement, and investigations.
