FTI Consulting (NYSE:FCN) reported record second-quarter revenue for 2026, but adjusted EBITDA declined from a year earlier as higher direct costs and selling, general and administrative expenses outweighed top-line growth. The company maintained its full-year revenue outlook while lowering its GAAP earnings-per-share guidance, citing litigation-related costs and first-half profitability pressures.
Second-quarter revenue increased 5.3% year over year, while revenue excluding pass-through expenses rose 6.5%, Chief Financial Officer Angela Nam said. Growth was led by the Corporate Finance & Restructuring, Technology and Forensic and Litigation Consulting segments. Adjusted EBITDA was $104.5 million, or 10.5% of revenue, compared with $111.6 million, or 11.8% of revenue, in the prior-year period.
SG&A Costs and Litigation Weighed on Profitability
SG&A expense rose to $230.7 million from $202.2 million a year earlier. Nam attributed the increase to higher compensation, travel and entertainment expenses, and legal costs. Compensation included one-time items that the company does not expect to recur, while travel costs reflected an all-senior managing director meeting held in April that was not held in the prior year.
The company also incurred increased litigation expenses related to a lawsuit against a former employee that was originally filed in 2023. Nam said a court decision in May allowing a third amended complaint expanded the case to include additional defendants, including a competing firm, as well as new claims.
FTI expects third-quarter SG&A to be about $12 million lower than second-quarter levels. For the full year, it now expects SG&A to be about $70 million higher than in 2025, compared with its earlier expectation of a $60 million increase, largely because of higher legal costs.
International Timing Issues and Middle East Uncertainty
Chief Executive Officer and Chairman Steven Gunby said revenue was below the company’s expectations in some international markets, particularly in the United Kingdom and the Middle East, even as overseas operations continued to grow.
Gunby characterized the U.K. shortfall as a short-term timing issue involving engagements ending and delays in new major matters starting. He said the seasonal vacation period in Europe can make it difficult for a business to rebound quickly during the summer.
The Middle East outlook was less certain because of geopolitical disruption. Gunby said the company has a “terrific team” in the region and believes the business is operating below its capacity, but he said it is difficult to forecast when conditions may improve.
“We are being very cautious about saying we don’t see a turn anytime near term,” Gunby said in response to an analyst question.
Despite those pressures, management maintained its full-year revenue guidance of $3.94 billion to $4.1 billion. The company lowered its GAAP EPS outlook to a range of $8.70 to $9.30 from a prior range of $8.90 to $9.60. Adjusted EPS is expected to be between $9.10 and $9.70.
Segment Performance Included Corporate Finance Growth and Economic Consulting Improvement
Corporate Finance & Restructuring revenue increased 8.5% year over year, driven by higher realized bill rates and higher success fees. The transformation practice grew 26%, supported by cost-reduction, supply-chain and operational-efficiency mandates. Transactions revenue grew 10%.
Turnaround and restructuring revenue declined 2% year over year in the quarter, though Nam said global restructuring revenue increased 8% in the first half. The company cited work on restructuring matters including Dish Network, Spirit Airlines, First Brands and Marelli in the U.S.; Prax Lindsey Oil Refinery in the U.K.; Raízen in Brazil; and Chinese property developers in Asia.
Management said the overall restructuring market remains uneven, but the company continues to win large and complex assignments. Gunby said macroeconomic conditions appear favorable for restructuring activity over time, though he declined to forecast the timing of a broader recovery.
Economic Consulting exceeded management’s expectations, with revenue increasing $13.2 million sequentially and adjusted segment EBITDA rising $14.7 million from the first quarter. The improvement reflected strength at Compass Lexecon in both North America and Europe, including M&A-related antitrust work and financial economics engagements. Management expects the segment to produce year-over-year growth in revenue and adjusted segment EBITDA during the second half, though it does not anticipate another comparable sequential step-up.
Technology revenue increased 18.4% year over year, driven by demand for M&A-related second-request services. Strategic Communications revenue, excluding pass-through expenses, rose 5.4%, led by corporate reputation services and event-driven offerings including crisis, cyber, M&A and activism work.
AI Demand, Hiring and Capital Allocation
Gunby and Nam said artificial intelligence is contributing to demand across the firm’s businesses. FTI is advising clients on AI-related matters involving litigation, regulation, intellectual property, misinformation, antitrust, cybersecurity and operational risk. Gunby cited an engagement in which the firm reviewed 45,000 images, videos and mobile-data items over a short period to support a client’s litigation strategy.
The company continued to invest in senior talent, with billable headcount up 3.2% year over year and SMD and managing director headcount up 5%. FTI announced 45 SMD and affiliate hires year to date and expects to welcome more than 270 graduates in the third quarter.
Operating cash flow totaled $152.3 million, compared with $55.7 million in the second quarter of 2025, primarily reflecting higher collections, lower forgivable loan issuances and lower income-tax payments. During the quarter, FTI repurchased 2.6 million shares for $390.9 million, at an average price of $150.84 per share. About $344 million remained under the company’s repurchase authorization as of June 30.
Nam said the company remains opportunistic on buybacks while prioritizing funding operations and organic growth investments, pursuing M&A opportunities when available, and retaining the option to reduce debt. FTI also increased its revolving credit facility to $1.5 billion from $900 million and extended its maturity by five years.
About FTI Consulting (NYSE:FCN)
FTI Consulting, Inc is a global business advisory firm providing multidisciplinary solutions designed to address complex challenges and strategic opportunities. The company’s primary service offerings encompass corporate finance & restructuring, economic consulting, forensic & litigation consulting, strategic communications, and technology. These capabilities enable clients to manage financial distress, navigate regulatory environments, resolve disputes, build trust with stakeholders, and leverage data-driven insights.
In its corporate finance & restructuring practice, FTI delivers restructuring, interim management, and transaction advisory services to companies facing operational or financial pressures.
