FEBRUARY 22, 2024 / 2:00PM, FCN.N - Q4 2023 FTI Consulting Inc Earnings Call
Of note, during todays prepared remarks, management will not speak directly to the quarterly earnings
presentation posted to the Investor Relations section of our website. To ensure our disclosures are consistent, these slides provide the similar details as they have historically and as I have said, are available on the Investor Relations section of
our website.
With these formalities out of the way, Im joined today by Steven Gunby, our President and Chief Executive Officer; and Ajay Sabherwal,
our Chief Financial Officer.
At this time, I will turn the call over to our President and Chief Executive Officer, Steve Gunby.
Steven H. Gunby - FTI Consulting, Inc.President, CEO & Director
Thank you, Mollie. Welcome, everyone, and thank you all for joining us this morning. Im sure many of you saw in this mornings press release, we
delivered fabulous results in the fourth quarter and fabulous results more generally in the second half of the year. Those results in turn turn the year the whole year into one that was terrific overall.
The results at the end of this year exceeded our expectations, and I suspect many of yours as well. So what Id like to do before turning this over to
Ajay, who will go through the quarter in more detail, lets take a moment to reflect on the entire year. In particular, to reflect on the variation we saw in some of the performance metrics across the quarters and talk about how we thought
about what actions we should take and what actions we shouldnt take as the year went on.
Im hoping those reflections support the more general
conversations that weve had from time to time about how do we think about the twin objectives of being responsible stewards of this company for you, our shareholders, being seen as responsible stewards. Also not losing sight of the core
ultimate objective, which, of course, is not quarterly earnings, which can be very transient, but rather is building something more powerful, an ever more capable organization, a more welcoming organization, one that can make ever more difference
for our clients, one thats ever more able to attract great people and support them so they can develop themselves and the people around them and through that, create something real, something durable for our clients and for our people and for
you, our shareholders.
Looking back, Im sure as many of you will recall, our first quarters earnings were well below our internal
expectations, below Streets expectations and down versus the prior year. Even halfway through the year, earnings were only flat versus the first half of the year. To the responsibility point, when you have periods of time where earnings are
down or flat, you have to, as a responsible management team, look at the underlying causes and challenge oneselves.
If the results are down because
youre losing traction with clients, where professionals are departing in their roles, so youre not attracting more great professionals. Those are serious indicators, indicators you may have fundamental problems, and you may need to react
in fundamental ways. We look at the companys performance actually on an ongoing basis after every quarter, in every good quarter and ask those questions, but of course, we particularly ask them when quarters are down.
And if you remember, during the first half of the year, that was the time when the number of competitors were talking about difficult market conditions and
when some of them were taking major actions. And that sort of commentary and set of actions also has to cause one to reflect, so we reflected.
Interestingly and importantly, when we looked at our first half of the year, we continue to feel good about what was going on. Yes, our EPS was down, but we
were doing great work for our clients. We are supporting brand-building assignments, and those efforts were showing up. They were showing up in qualitative terms, like awards and client feedback. And I know that always can be of something you need a
little skeptical out, how are you measuring it and so forth. But they also showed up pretty tangibly and quantitatively and measurably. For example, in terms of revenue growth, where we had 13% revenue growth in the first half of the year.
And importantly, we actually had more great people than we expected because we had, as we have in recent years, had real opportunities to invest in terrific
talent, which, of course, we always take advantage of whether the quarter is good or not. So some of the extra talent that we had was because of our ability to attract terrific talent. But in 2023, we also had the fact that attrition was down
significantly, lower than we expected, lower than the prior year in the first half of the year.
3