Earnings

FTI Consulting Books $46.0 Million Staffing-Cut Charge While Headcount Grows To 8,281

Adjusted EPS rose to $3.84 as the share count shrank, while GAAP EPS slipped to $2.35 from $2.60.

FTI Consulting, the expert advisory firm that works on restructuring, investigations and litigation support, recorded $46.0 million in special charges in the third quarter to align staffing with demand, according to its 10-Q filed Thursday. Total headcount still rose by 157 in the quarter, to 8,281.

Cuts beside hiring

Of the charge, $45.5 million was salary and benefits tied to targeted headcount reductions, and $0.5 million was non-cash real estate cost. Of the amounts accrued, $38.4 million was still unpaid at quarter-end, and the company expects to settle it in cash within a year.

Corporate Finance took $16.0 million and Forensic and Litigation Consulting $15.7 million. Strategic Communications absorbed $5.3 million, Technology $2.9 million, Economic Consulting $1.6 million and unallocated corporate $4.5 million. Corporate Finance still added 100 billable staff in the quarter.

The prior quarter's 10-Q recorded no special charges for the three months ended June 30, 2026. The company expects another special charge of about $7 million in the fourth quarter, roughly $2 million of headcount costs and $5 million of real estate costs.

Two EPS stories

Net income fell 23.4% to $63.4 million, which the company mainly attributed to the special charges. Diluted EPS dropped to $2.35 from $2.60, while adjusted EPS climbed to $3.84 from $2.60.

The adjustments matter: the special charges add $1.36 to adjusted EPS and $4.5 million of litigation costs tied to its suit against former employee Jonathan Orszag add $0.13. Revenue rose 5.9% to $1.01 billion, with growth in every segment, and adjusted EBITDA margin was 15.2% against 13.7%.

Diluted shares fell to 26,988 thousand from 31,823 thousand a year earlier. The company paid $605.3 million for buybacks over nine months and has $264.7 million left under its repurchase authorization.

Buybacks financed by debt

Long-term debt reached $851.4 million at September 30, up from $365.0 million at December 31. Nine-month interest expense rose 126.6% to $31.4 million, and cash fell to $88.1 million from $265.1 million.

Retained earnings dropped to $1.46 billion from $1.86 billion as repurchases were charged against them. Company market value was $4.4 billion in Thursday morning data.

The roughly $7 million fourth-quarter charge will show whether the staffing realignment is still running.