Breaking Down FTI Consulting, Inc. (FCN) Financial Health: Key Insights for Investors

You're looking at FTI Consulting, Inc. (FCN) right now, trying to figure out if the strong headline numbers mask any underlying cracks, and honestly, you should be. The Q3 2025 results were defintely a win, showing record quarterly revenues of $956.2 million, a solid 3.3% jump year-over-year, and a massive 41% surge in diluted Earnings Per Share (EPS) to $2.60, which is a great sign of operating efficiency. But here's the quick math: while their Corporate Finance & Restructuring segment soared with an 18.6% revenue increase, the Economic Consulting and Technology segments faced real headwinds, dropping 22% and 14.8% respectively. That segment divergence is the near-term risk-the company is leaning hard on its restructuring and litigation practices, which are counter-cyclical, but that doesn't fix the softness in their core advisory services. We need to map this performance against the full-year Adjusted EPS guidance of $8.20 to $8.70 to see if the current stock price, which analysts peg with an average target of $178.00, truly reflects the company's diversified strength or just a temporary market dynamic.

Revenue Analysis

You need to know where FTI Consulting, Inc. (FCN)'s money is coming from right now, and the 2025 data shows a shift in their core business. The headline is that while the trailing twelve months (TTM) revenue as of September 30, 2025, was $3.69 billion, the year-over-year (YoY) growth rate for that TTM period was a slight decline of 0.95%. But look closer at the quarters, and you see a rebound: Q3 2025 revenue hit $956.2 million, a 3.3% increase over the prior year quarter.

The primary revenue source for FTI Consulting, Inc. is its diverse suite of advisory services, which fall into five main segments. This diversification is key; it's a hedge against a downturn in any single area. For instance, in Q1 2025, the Corporate Finance & Restructuring segment was the largest contributor, bringing in $343.6 million, which accounted for about 38.25% of the total quarterly revenue.

Here's the quick math on how the segments stacked up in the first quarter of 2025:

The geographic split also confirms a heavy reliance on the US market. In Q1 2025, North America was responsible for 66.6% of total revenue, or $597.9 million. Europe, Middle East, and Africa (EMEA) followed at 27.3%, showing a decent global footprint, but the US remains the defintely dominant region.

Segment Performance and Revenue Changes

The most significant change in 2025 is the stark divergence between the segments. The first half of the year saw overall revenue dip-Q1 was down 3.3% YoY, and Q2 was down 0.6% YoY-but the third quarter turned the corner.

The segments that are driving the recent growth are those tied to distress and dispute resolution:

• Corporate Finance & Restructuring: Revenue surged in Q3 2025 by 18.6%, driven by increased demand for restructuring and transactions services. This suggests a market where companies are facing more financial pressure, needing FCN's help to navigate.
• Forensic and Litigation Consulting: This segment grew by a strong 15.4% in Q3 2025, a result of higher demand for risk and investigations services and better realized bill rates.

On the flip side, the Economic Consulting segment is a major headwind. Its revenue dropped sharply by 22.0% in Q3 2025. This decline is primarily due to lower demand for non-merger and acquisition (M&A)-related antitrust services. When M&A activity slows down, this part of the business feels the pain. The Technology segment also saw a notable drop of 14.8% in Q3. This tells you the market for their e-discovery and information governance services is experiencing a slowdown.

The key takeaway is that FTI Consulting, Inc. is currently benefiting from a counter-cyclical revenue stream (Restructuring/FLC) that is offsetting weakness in its more market-dependent segments (Economic Consulting/Technology). You can review the full scope of their mission here: Mission Statement, Vision, & Core Values of FTI Consulting, Inc. (FCN).

Profitability Metrics

You need to know if FTI Consulting, Inc. (FCN) is turning its advisory work into solid profit, and the short answer is yes, but with near-term margin pressure. The firm's profitability is defintely strong, though its margins lag some top-tier competitors in the professional services sector, a trend worth watching.

For the trailing twelve months (TTM) ending September 30, 2025, FTI Consulting, Inc. reported a Gross Profit Margin of 31.95%. This means for every dollar of revenue, nearly 32 cents remains after paying the direct costs of service delivery, like consultant compensation and other direct expenses. However, this margin is slightly lower than its three-year average of 32.07%, and analysts note that a gross margin of 31.95% places the company in the bottom 25% of its industry, which signals a persistent challenge in containing direct costs or achieving premium pricing across all segments.

Moving down the income statement, the company's operational efficiency is clearer, but still shows a dip. The Operating Margin (TTM as of October 2025) stands at 9.48%. This margin, which accounts for selling, general, and administrative (SG&A) costs, is a good measure of management's effectiveness. Still, the Net Profit Margin (TTM ending September 30, 2025) was 7.23%, a noticeable decline from the prior year's 8.37% TTM figure.

Here's the quick math on how FCN's core margins stack up against its peers in the Professional Services industry:

To be fair, FTI Consulting, Inc.'s 9.48% Operating Margin is competitive against some, like ICF International at 6.83%, but it trails higher-margin peers like CRA International at 11.79% and Huron Consulting at 11.00%. This difference often reflects a greater mix of high-margin economic consulting or less competitive pricing power in certain FCN segments.

The recent trend shows management is aware of the cost structure issue. In Q1 2025, the firm took a $25.3 million special charge related to severance and other employee costs, part of a strategic move to align staffing with demand. This action is projected to yield an estimated $85 million in annualized savings, a critical step to defend margins as revenue growth moderates. This focus on cost management helped Adjusted EBITDA margin grow to 12.8% in Q1 2025, up from 12.0% in Q1 2024, despite a revenue decline.

The key takeaway is that FTI Consulting, Inc. is a profitable business, but its near-term story is about operational efficiency and cost control, not just top-line growth. You can read more about the full financial picture in Breaking Down FTI Consulting, Inc. (FCN) Financial Health: Key Insights for Investors.

Here are the core drivers of the margin pressure and recovery plan:

• Net Margin declined from 8.9% to a current forecast of 6.8% due to headwinds.
• The $25.3 million Q1 2025 charge is expected to save $85 million annually.
• Strategic investments in technology and talent are projected to drive net profit margins back up to 8.4% by 2028.

Debt vs. Equity Structure

You want to know how FTI Consulting, Inc. (FCN) is funding its operations, and the short answer is: mostly through equity, with a very conservative use of debt. This capital structure is a clear sign of financial strength, giving the company significant flexibility.

As of the third quarter ended September 30, 2025, FTI Consulting, Inc.'s total gross debt stood at approximately $510.0 million, which is a manageable figure for a company of this scale. The sequential increase in debt is not for major capital expenditures, but rather a direct result of the company's aggressive share repurchase program.

Here's the quick math on their leverage:

• Total Gross Debt (Q3 2025): $510.0 million
• Cash & Equivalents (Q3 2025): $146.0 million
• Net Debt (Q3 2025): $364.0 million

The company's reliance on equity over debt is the key takeaway. Their Debt-to-Equity (D/E) ratio, which measures the proportion of debt financing relative to shareholder equity, is exceptionally low. Using the latest figures, the D/E ratio is approximately 0.27.

To be fair, a D/E ratio of 0.27 is far below the benchmark for the Management Consulting Services industry, which has a median D/E ratio of around 1.01. This suggests FTI Consulting, Inc. is using a fraction of the leverage its peers employ, which is a defintely positive signal for financial stability, but it also means they have a lot of untapped borrowing capacity for strategic moves.

The balance between debt and equity funding is heavily skewed toward equity, which is a deliberate strategy. FTI Consulting, Inc. has an investment grade credit rating, which was upgraded by S&P Global in October 2024, a move that made their Credit Facility unsecured, lowering their borrowing costs and increasing their financial maneuverability.

Instead of issuing new long-term debt to fund growth, the company has been using its revolving line of credit and cash to finance capital returns to shareholders. The sequential rise in net debt is primarily due to funding its share repurchase program and forgivable loan issuances. In a clear signal of confidence, the Board authorized an additional $500.0 million for stock buybacks in October 2025, bringing the total authorization to $2.2 billion since the program's inception. This shows they are prioritizing returning capital and reducing share count over taking on significant new debt for M&A or other major investments.

Exploring FTI Consulting, Inc. (FCN) Investor Profile: Who's Buying and Why?

The table below summarizes the company's capital structure health against the industry standard:

The clear action here is to recognize that FCN's low leverage provides a strong cushion against economic downturns and leaves them with ample dry powder-the ability to borrow easily-should a compelling acquisition opportunity arise.

Liquidity and Solvency

When you're looking at FTI Consulting, Inc. (FCN), the first thing we need to check is their immediate ability to pay bills-their liquidity. This is defintely a consulting business, so we expect a different profile than a manufacturer, but the core idea is the same: do they have enough liquid assets to cover their short-term liabilities? The answer, based on the latest figures, is a comfortable 'yes,' but with a twist in their cash management strategy.

For the trailing twelve months (TTM) ending Q3 2025, FTI Consulting, Inc.'s Current Ratio sits at approximately 1.85. This means the company holds $1.85 in current assets for every $1.00 of current liabilities. The Quick Ratio (or acid-test ratio), which strips out less-liquid assets like inventory, is also strong at around 1.59. Since a consulting firm has minimal inventory, these two ratios are close, and anything over 1.0 is considered a healthy sign of short-term financial strength. It shows they can cover their immediate obligations easily.

Here's the quick math on their working capital trends:

• Current Ratio: 1.85 (TTM)
• Quick Ratio: 1.59 (TTM)
• Days Sales Outstanding (DSO): Improved to 100 days in Q2 2025 from 105 days in Q2 2024, signaling better client collection efficiency.

Despite the positive ratios, their Net Current Asset Value-a proxy for working capital-was reported as a negative $-241.55 million on a TTM basis. This is common for service firms that operate with low capital intensity and rely on high accounts receivable (money owed by clients). They are managing their working capital tightly, pushing it close to the bone, but the strong ratios suggest this is a deliberate, efficient strategy, not a sign of distress.

The cash flow statement overview for FTI Consulting, Inc. tells a story of robust operations coupled with aggressive capital allocation. For the third quarter ended September 30, 2025, the company generated net cash from operating activities of $201.9 million. This is the engine of the business, and it's running well. However, you need to look at the financing side, which shows a significant use of that cash.

The biggest near-term risk to liquidity isn't from operations but from capital deployment. The company spent $234.1 million on common stock repurchases in Q3 2025 alone, and the Board authorized an additional $500 million for the program. This aggressive buyback activity, while boosting earnings per share (EPS), has directly led to a drop in their cash and cash equivalents to $146.0 million at September 30, 2025, down from $386.3 million a year prior. This is a trade-off: management is signaling confidence in the stock's value, but they are drawing down the cash buffer. The total debt, net of cash, also rose sequentially to $364.0 million at the end of Q3 2025.

The liquidity strength is clear from the ratios and operating cash flow, but the risk lies in the capital structure decisions. The company is essentially choosing to return cash to shareholders and reduce share count rather than hoard cash. It's a confidence play, but it leaves less cushion for an unexpected downturn. For a deeper dive into the company's long-term direction, you should look at the Mission Statement, Vision, & Core Values of FTI Consulting, Inc. (FCN).

The next concrete step for you is to model how a 15% drop in Accounts Receivable collections would impact their cash balance, given the current $146.0 million cash position. That will show you the true limit of their current liquidity strategy.

Valuation Analysis

You're looking at FTI Consulting, Inc. (FCN) and wondering if the market is giving you a fair shake on price. Honestly, the valuation picture is a little mixed right now, suggesting the stock is neither a screaming buy nor defintely overvalued, landing it squarely in the middle: a consensus Hold.

When you look at the core valuation multiples, FTI Consulting, Inc. trades at a premium to the broader market on a trailing basis, but the forward-looking numbers look more reasonable. Here's the quick math on the key ratios, using data grounded in the 2025 fiscal year:

• Trailing Price-to-Earnings (P/E): At 21.23, this is based on past earnings.
• Forward Price-to-Earnings (P/E): This drops to 19.15, a better number that signals expected earnings growth.
• Price-to-Book (P/B) Ratio: The ratio stands at 2.67 as of November 2025, which is a solid valuation for a consulting firm that relies heavily on intellectual capital rather than hard assets.
• Enterprise Value-to-EBITDA (EV/EBITDA): This is at 13.04, which helps you compare FCN to its peers by factoring in debt and cash.

The forward P/E of 19.15 is the most compelling figure here, suggesting the market is pricing in a decent growth trajectory for the coming year. It's not cheap, but it's not wildly expensive for a high-margin professional services business.

Stock Price Performance and Analyst Consensus

The stock price trend over the last year is the main reason for the current caution. The stock has been under pressure, falling by about 18.25% over the last 12 months leading up to November 2025. This is a significant drop, and it's why you need to dig deeper into the company's Breaking Down FTI Consulting, Inc. (FCN) Financial Health: Key Insights for Investors.

The 52-week range tells the story of volatility, swinging between a low of $149.31 and a high of $208.28. The recent closing price is around $162.08, sitting closer to the low end of that range. That kind of performance will always give analysts pause.

Speaking of analysts, the consensus rating for FTI Consulting, Inc. is a collective Hold. This isn't a lack of conviction; it's a signal that the stock is fairly valued at its current price, balancing the company's strong fundamentals against the near-term market risks. The average 12-month price target is approximately $169.00, which suggests a modest upside from the current price. You're not going to get rich quick, but you're not likely to take a huge hit either, based on this forecast.

Dividend Policy and Shareholder Return

If you're looking for income, FTI Consulting, Inc. isn't your stock. The company does not currently pay a dividend, meaning the dividend yield is 0.00% and the payout ratio is not applicable. The firm's strategy is to reinvest all earnings back into the business-hiring talent, expanding segments, and making strategic acquisitions-which is typical for a growth-focused consulting firm. Their primary method of returning capital to shareholders is through share buybacks, which reduces the share count and boosts earnings per share (EPS).

Your next step should be to look at the segment-by-segment revenue growth, especially in Economic Consulting and Technology, which are the real engines. The valuation suggests a waiting game.

Risk Factors

You're looking at FTI Consulting, Inc. (FCN) because its core business-helping companies navigate crises, disputes, and regulation-seems counter-cyclical and sticky. That's a fair thesis. But even a firm built on managing risk faces its own set of significant headwinds, especially as we close out the 2025 fiscal year. The biggest takeaway? The firm is not immune to market shifts, and internal talent issues are a real drag on key segments. You need to look past the record Q3 revenues to see where the foundation is cracking.

The market for professional business advisory services is defintely a highly competitive one, facing off against established players and new entrants who might undercut prices or offer innovative solutions. But the more immediate risks are segmented and financial, stemming directly from the 2025 earnings reports.

Here's the quick math on the operational and financial risks FTI Consulting, Inc. is managing:

• Segment Weakness: The Economic Consulting segment is facing a challenging environment, with management citing that approximately two-thirds of its revenue decline is due to talent transitions, not just weak market demand.
• Regulatory Headwinds: Changes in regulatory scrutiny have specifically decreased demand for M&A-related 'second requests' (in-depth merger reviews). This directly impacts the near-term performance of the Technology segment, a crucial area for future growth.
• M&A Slowdown: Broader M&A market slowdowns, tied to macroeconomic uncertainties, have contributed to a revenue decline in the Corporate Finance & Restructuring segment, which was down 6.1% in Q1 2025.

Financial and Operational Stress Points

While the company reported Q3 2025 revenues of $956.2 million, the financial picture reveals pressure on profitability and cash flow. The net profit margin for the trailing twelve months (as of October 2025) came in at 6.8%, a notable drop from the prior year's 8.9%. This suggests that even as the top line grows, cost pressures are eating away at the bottom line. Honestly, a consulting firm's free cash flow margin should be higher; FTI Consulting, Inc.'s trailing 12-month free cash flow margin was a low 1.2%.

The firm's capital allocation strategy, while signaling confidence, has also strained liquidity. Aggressive share repurchases, including spending $186.1 million to buy back 1.13 million shares in Q1 2025, caused cash reserves to drop dramatically to $151.1 million at the end of Q1 2025, down from $660.5 million at the end of 2024. This is a delicate balance: returning capital to shareholders is great, but not at the expense of a comfortable cash buffer.

For a deeper dive into who is making these capital allocation decisions, check out Exploring FTI Consulting, Inc. (FCN) Investor Profile: Who's Buying and Why?

Mitigation Strategies and Outlook

Management is taking clear, decisive steps to stabilize the business and rebuild segment strength. They are actively investing in talent, welcoming approximately 320 new graduates in the second half of 2025, which is a key long-term investment in a people-driven business.

To address margin pressure, FTI Consulting, Inc. executed a cost-saving plan in Q1 2025 that included a $25.3 million special charge tied to layoffs of about 5% of its workforce. This action is anticipated to generate annualized savings of $85 million, a critical move to offset revenue declines in struggling segments and support margin recovery. The table below summarizes the core operational risks and the firm's direct response:

Growth Opportunities

You're looking at FTI Consulting, Inc. (FCN) and wondering where the next dollar of growth comes from, which is the right question for a professional services firm. The short answer is that FCN is betting on two things: global corporate distress and the increasing complexity of the digital world. They're not chasing easy growth; they're capitalizing on the hard, messy problems companies pay top dollar to solve.

The company's full-year 2025 revenue guidance, updated in October, projects a range between $3.685 billion and $3.735 billion. That's a tight range, but it reflects confidence in their core business segments. For earnings per share (EPS), the firm estimates a range of $7.62 to $8.12 for the full year 2025. Here's the quick math: the Q3 2025 results showed revenues of $956.2 million, a 3.3% year-on-year increase, with EPS soaring 41% to $2.60, which suggests the second half of the year is defintely carrying the weight.

The real engine for future growth isn't just a rebounding economy; it's a more litigious and regulated one. FTI Consulting, Inc. is strategically positioned to capture this demand through a few key drivers:

• Regulatory Complexity: Global scrutiny in areas like anti-money laundering, financial crime, and cybersecurity drives sustained demand for their Forensic & Litigation Consulting and Corporate Finance practices.
• Digital Transformation & Risk: They are doubling down on high-growth areas like AI-driven risk analytics and cybersecurity consulting, leveraging their Technology segment's expertise in e-discovery and information governance.
• Corporate Distress & Restructuring: The Corporate Finance & Restructuring segment remains a significant revenue driver, ready to assist clients through complex economic shifts and debt restructuring.

To be fair, the Economic Consulting and Technology segments have faced headwinds, but management is actively addressing these with targeted actions and investments in key areas like AI.

The firm's competitive advantage is its diverse, multidisciplinary service portfolio across five robust segments: Corporate Finance & Restructuring, Forensic and Litigation Consulting, Economic Consulting, Technology, and Strategic Communications. This diversification is what mitigates risk when one area, like M&A-dependent Economic Consulting, slows down. Plus, they have an investment-grade credit rating and a strong balance sheet, which gives them the flexibility to invest in growth initiatives.

On the strategic front, FTI Consulting, Inc. isn't just waiting for the phone to ring. They are actively expanding their global footprint, recently making strategic hires to bolster their Global Tax Advisory team in London and Dubai, which broadens their expertise in EMEA (Europe, Middle East, and Africa) restructuring and VAT advisory. They also continue to pursue targeted acquisitions to enter new markets and acquire cutting-edge technologies. Separately, their Board authorized an additional $500 million for the stock repurchase program in October, bringing the total authorization to $2.3 billion, signaling strong confidence in their long-term value. What this estimate hides is the execution risk of their aggressive restructuring, which aims for $85 million in annualized cost savings by 2025 through a 5% workforce reduction. If you want a deeper dive into the balance sheet health that supports these moves, check out Breaking Down FTI Consulting, Inc. (FCN) Financial Health: Key Insights for Investors.

Here's a snapshot of the forward-looking financial picture:

Next Step: Monitor the Q4 2025 earnings call for an update on the progress of the $85 million cost savings initiative and any new M&A activity.