FTI Consulting (FCN)

Business advisory firm FTI Consulting (NYSE:FCN) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 10.7% year on year to $990.7 million. The company’s full-year revenue guidance of $4.02 billion at the midpoint came in 1.4% above analysts’ estimates. Its non-GAAP profit of $1.78 per share was 21.6% above analysts’ consensus estimates.

Company Overview

With a team of experts deployed across 30+ countries to tackle complex business challenges, FTI Consulting (NYSE:FCN) is a global business advisory firm that helps organizations manage change, mitigate risk, and resolve disputes across financial, legal, operational, and regulatory matters.

The sector stands to benefit from ongoing digital transformation, increasing corporate demand for cost efficiencies, and the growing complexity of regulatory and cybersecurity landscapes. For those that invest wisely, AI and automation capabilities could emerge as competitive advantages, enhancing process efficiencies for the companies themselves as well as their clients. On the flip side, AI could be a headwind as well as the technology could lower the barrier to entry in the space and give rise to more self-service solutions. Additional challenges in the years ahead could include wage inflation for highly skilled consultants and potential regulatory scrutiny on outsourcing practices—especially in industries like finance and healthcare where who has access to certain data matters greatly.

FTI Consulting's competitors include other global professional services firms such as Alvarez & Marsal, AlixPartners, Berkeley Research Group, and segments of the Big Four accounting firms (Deloitte, EY, KPMG, and PwC) that offer advisory and consulting services.

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $3.79 billion in revenue over the past 12 months, FTI Consulting is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, FTI Consulting’s 9% annualized revenue growth over the last five years was impressive. This shows it had high demand, a useful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. FTI Consulting’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 4.2% over the last two years was well below its five-year trend.

This quarter, FTI Consulting reported year-on-year revenue growth of 10.7%, and its $990.7 million of revenue exceeded Wall Street’s estimates by 7.9%.

Looking ahead, sell-side analysts expect revenue to grow 4.6% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and indicates its newer products and services will not accelerate its top-line performance yet.

FTI Consulting’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 10.3% over the last five years. This profitability was higher than the broader business services sector, showing it did a decent job managing its expenses.

Analyzing the trend in its profitability, FTI Consulting’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, FTI Consulting generated an operating margin profit margin of 9.4%, up 3.5 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

FTI Consulting’s decent 8% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Although it wasn’t great, FTI Consulting’s two-year annual EPS growth of 6.8% topped its 4.2% two-year revenue growth.

Diving into the nuances of FTI Consulting’s earnings can give us a better understanding of its performance. A two-year view shows that FTI Consulting has repurchased its stock, shrinking its share count by 14.3%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

In Q4, FTI Consulting reported adjusted EPS of $1.78, up from $1.56 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects FTI Consulting’s full-year EPS of $8.80 to grow 6.6%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

FTI Consulting has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 6.3% over the last five years, slightly better than the broader business services sector.

Taking a step back, we can see that FTI Consulting’s margin dropped by 7.9 percentage points during that time. If its declines continue, it could signal increasing investment needs and capital intensity.

FTI Consulting’s free cash flow clocked in at $351.4 million in Q4, equivalent to a 35.5% margin. This result was good as its margin was 1.8 percentage points higher than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, leading to temporary swings. Long-term trends trump fluctuations.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Although FTI Consulting hasn’t been the highest-quality company lately, it historically found a few growth initiatives that worked. Its five-year average ROIC was 13.8%, higher than most business services businesses.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Uneventfully, FTI Consulting’s ROIC has stayed the same over the last few years. Given the company’s underwhelming financial performance in other areas, we’d like to see its returns improve before recommending the stock.

FTI Consulting reported $265.1 million of cash and $589.5 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $463.6 million of EBITDA over the last 12 months, we view FTI Consulting’s 0.7× net-debt-to-EBITDA ratio as safe. We also see its $2.22 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see FTI Consulting beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock remained flat at $161.50 immediately following the results.

Updated: February 26, 2026 at 7:38 AM EST

Before making an investment decision, investors should account for FTI Consulting’s business fundamentals and valuation in addition to what happened in the latest quarter.

FTI Consulting isn’t a terrible business, but it doesn’t pass our bar. Although its revenue growth was impressive over the last five years, it’s expected to deteriorate over the next 12 months and its cash profitability fell over the last five years.

FTI Consulting’s P/E ratio based on the next 12 months is 17.1x. Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're fairly confident there are better investments elsewhere.

Wall Street analysts have a consensus one-year price target of $177.50 on the company (compared to the current share price of $161.50).