CRA INTERNATIONAL, INC. 10-Q

ITEM 1. Financial Statements CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data) Fiscal Quarter Ended Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Revenues $ 185,891 $ 167,748 $ 554,620 $ 510,979 Costs of services (exclusive of depreciation and amortization) 131,468 115,188 380,364 359,394 Selling, general and administrative expenses 33,725 31,269 101,342 93,784 Depreciation and amortization 3,487 2,900 10,428 8,503 Income from operations 17,211 18,391 62,486 49,298 Interest expense, net ( 1,750 ) ( 1,457 ) ( 3,975 ) ( 3,405 ) Foreign currency gains (losses), net 763 ( 904 ) ( 527 ) ( 1,236 ) Income before provision for income taxes 16,224 16,030 57,984 44,657 Provision for income taxes 4,751 4,593 16,387 12,991 Net income $ 11,473 $ 11,437 $ 41,597 $ 31,666 Net income per share: Basic $ 1.74 $ 1.68 $ 6.22 $ 4.62 Diluted $ 1.73 $ 1.67 $ 6.16 $ 4.57 Weighted average number of shares outstanding: Basic 6,556 6,760 6,675 6,840 Diluted 6,621 6,843 6,745 6,922 See accompanying notes to the condensed consolidated financial statements. 3 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (in thousands) Fiscal Quarter Ended Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Net income $ 11,473 $ 11,437 $ 41,597 $ 31,666 Other comprehensive income (loss) Foreign currency translation adjustments, net of tax ( 1,061 ) 2,895 4,505 1,475 Comprehensive income $ 10,412 $ 14,332 $ 46,102 $ 33,141 See accompanying notes to the condensed consolidated financial statements. 4 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in thousands, except share data) September 27, 2025 December 28, 2024 ASSETS Current assets: Cash and cash equivalents $ 22,496 $ 26,711 Accounts receivable, net of allowances of $ 6,616 and $ 5,659 , respectively 151,851 162,293 Unbilled services, net of allowances of $ 1,557 and $ 1,411 , respectively 91,235 57,255 Prepaid expenses and other current assets 19,119 16,569 Forgivable loans 20,881 6,535 Total current assets 305,582 269,363 Property and equipment, net 39,450 45,205 Goodwill, net 94,634 93,737 Intangible assets, net 6,069 7,216 Right-of-use assets 79,724 81,157 Deferred income taxes 17,520 16,648 Forgivable loans, net of current portion 80,465 48,957 Other assets 5,597 9,156 Total assets $ 629,041 $ 571,439 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 26,390 $ 28,155 Accrued expenses 182,675 181,413 Deferred revenue and other liabilities 8,031 14,130 Current portion of lease liabilities 18,665 18,696 Current portion of deferred compensation 7,842 8,915 Revolving line of credit 95,000 — Total current liabilities 338,603 251,309 Non-current liabilities: Deferred compensation and other non-current liabilities 6,849 22,329 Non-current portion of lease liabilities 80,668 84,541 Deferred income taxes 1,266 1,187 Total non-current liabilities 88,783 108,057 Commitments and contingencies (Note 10) Shareholders’ equity: Preferred stock, no par value; 1,000,000 shares authorized; none issued and outstanding — — Common stock, no par value; 25,000,000 shares authorized; 6,547,188 and 6,768,575 shares issued and outstanding, respectively 541 1,663 Retained earnings 211,660 225,461 Accumulated other comprehensive loss ( 10,546 ) ( 15,051 ) Total shareholders’ equity 201,655 212,073 Total liabilities and shareholders’ equity $ 629,041 $ 571,439 See accompanying notes to the condensed consolidated financial statements. 5 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 OPERATING ACTIVITIES: Net income $ 41,597 $ 31,666 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 10,428 8,503 Right-of-use asset amortization 11,643 11,309 Deferred income taxes ( 760 ) 418 Share-based compensation expense 3,931 3,760 Bad debt expense (recovery) 718 587 Unrealized foreign currency remeasurement (gains) losses, net 332 ( 152 ) Changes in operating assets and liabilities: Accounts receivable 12,610 ( 9,018 ) Unbilled services ( 32,841 ) ( 23,303 ) Prepaid expenses and other current assets, and other assets 1,632 ( 10,342 ) Forgivable loans ( 45,962 ) ( 13,958 ) Incentive cash awards payable 8,872 7,262 Accounts payable, accrued expenses, and other liabilities ( 35,566 ) ( 24,174 ) Lease liabilities ( 14,229 ) ( 12,247 ) Net cash used in operating activities ( 37,595 ) ( 29,689 ) INVESTING ACTIVITIES: Purchases of property and equipment ( 2,813 ) ( 6,032 ) Consideration paid for acquisition — ( 1,500 ) Net cash used in investing activities ( 2,813 ) ( 7,532 ) FINANCING ACTIVITIES: Borrowings under revolving line of credit 132,000 95,000 Repayments under revolving line of credit ( 37,000 ) ( 35,000 ) Tax withholding payments reimbursed by shares ( 2,862 ) ( 2,030 ) Cash dividends paid ( 10,098 ) ( 8,850 ) Repurchase of common stock ( 47,149 ) ( 33,348 ) Net cash provided by financing activities 34,891 15,772 Effect of foreign exchange rates on cash and cash equivalents 1,302 344 Net decrease in cash and cash equivalents ( 4,215 ) ( 21,105 ) Cash and cash equivalents at beginning of period 26,711 45,586 Cash and cash equivalents at end of period $ 22,496 $ 24,481 Noncash investing and financing activities: Increase in accounts payable and accrued expenses for property and equipment $ 84 $ 1,228 Asset retirement obligations $ — $ 191 Excise tax on share repurchases $ ( 416 ) $ ( 284 ) Right-of-use assets obtained in exchange for lease obligations $ 8,460 $ 10,627 Supplemental cash flow information: Cash paid for taxes $ 20,364 $ 17,085 Cash paid for interest $ 3,585 $ 3,086 Cash paid for amounts included in operating lease liabilities $ 17,395 $ 15,008 See accompanying notes to the condensed consolidated financial statements. 6 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (unaudited) (in thousands, except share data) Common Stock Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity Shares Issued Amount BALANCE AT DECEMBER 28, 2024 6,768,575 $ 1,663 $ 225,461 $ ( 15,051 ) $ 212,073 Net income — — 18,002 — 18,002 Foreign currency translation adjustment — — — 1,743 1,743 Share-based compensation expense — 1,390 — — 1,390 Restricted shares vesting 34,780 — — — — Redemption of vested employee restricted shares for tax withholding ( 13,462 ) ( 2,454 ) — — ( 2,454 ) Accrued excise tax on shares repurchased — — 39 — 39 Accrued dividends on unvested shares — — 14 — 14 Cash dividends paid ($ 0.49 per share) — — ( 3,488 ) — ( 3,488 ) BALANCE AT MARCH 29, 2025 6,789,893 $ 599 $ 240,028 $ ( 13,308 ) $ 227,319 Net income — — 12,122 — 12,122 Foreign currency translation adjustment — — — 3,823 3,823 Share-based compensation expense — 962 — — 962 Restricted shares vesting 4,487 — — — — Redemption of vested employee restricted shares for tax withholding ( 2,144 ) ( 355 ) — — ( 355 ) Shares repurchased ( 230,673 ) ( 1,206 ) ( 41,944 ) — ( 43,150 ) Accrued excise tax on shares repurchased — — ( 428 ) — ( 428 ) Accrued dividends on unvested shares — — 77 — 77 Cash dividends paid ($ 0.49 per share) — — ( 3,370 ) — ( 3,370 ) BALANCE AT JUNE 28, 2025 6,561,563 $ — $ 206,485 $ ( 9,485 ) $ 197,000 Net income — — 11,473 — 11,473 Foreign currency translation adjustment — — — ( 1,061 ) ( 1,061 ) Share-based compensation expense — 1,579 — — 1,579 Restricted shares vesting 7,456 — — — — Redemption of vested employee restricted shares for tax withholding ( 299 ) ( 53 ) — — ( 53 ) Shares repurchased ( 21,532 ) ( 985 ) ( 3,014 ) — ( 3,999 ) Accrued excise tax on shares repurchased — — ( 27 ) — ( 27 ) Accrued dividends on unvested shares — — ( 17 ) — ( 17 ) Cash dividends paid ($ 0.49 per share) — — ( 3,240 ) — ( 3,240 ) BALANCE AT SEPTEMBER 27, 2025 6,547,188 $ 541 $ 211,660 $ ( 10,546 ) $ 201,655 See accompanying notes to the condensed consolidated financial statements. 7 Table of Contents CRA INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY (unaudited) (in thousands, except share data) Common Stock Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity Shares Issued Amount BALANCE AT DECEMBER 30, 2023 6,934,265 $ — $ 224,283 $ ( 12,182 ) $ 212,101 Net income — — 13,691 — 13,691 Foreign currency translation adjustment — — — ( 1,105 ) ( 1,105 ) Share-based compensation expense — 1,039 — — 1,039 Restricted shares vesting 33,441 — — — — Redemption of vested employee restricted shares for tax withholding ( 12,526 ) ( 1,631 ) — — ( 1,631 ) Shares repurchased ( 65,882 ) 592 ( 9,834 ) — ( 9,242 ) Accrued excise tax on shares repurchased — — ( 65 ) — ( 65 ) Accrued dividends on unvested shares — — 77 — 77 Cash dividends paid ($ 0.42 per share) — — ( 3,075 ) — ( 3,075 ) BALANCE AT MARCH 30, 2024 6,889,298 $ — $ 225,077 $ ( 13,287 ) $ 211,790 Net income — — 6,538 — 6,538 Foreign currency translation adjustment — — — ( 315 ) ( 315 ) Share-based compensation expense — 1,357 — — 1,357 Restricted shares vesting 6,143 — — — — Redemption of vested employee restricted shares for tax withholding ( 2,340 ) ( 346 ) — — ( 346 ) Shares repurchased ( 140,497 ) ( 1,011 ) ( 23,095 ) — ( 24,106 ) Accrued excise tax on shares repurchased — — ( 235 ) — ( 235 ) Accrued dividends on unvested shares — — ( 33 ) — ( 33 ) Cash dividends paid ($ 0.42 per share) — — ( 2,901 ) — ( 2,901 ) BALANCE AT JUNE 29, 2024 6,752,604 $ — $ 205,351 $ ( 13,602 ) $ 191,749 Net income — — 11,437 — 11,437 Foreign currency translation adjustment — — — 2,895 2,895 Share-based compensation expense — 1,364 — — 1,364 Restricted shares vesting 9,272 — — — — Redemption of vested employee restricted shares for tax withholding ( 294 ) ( 53 ) — — ( 53 ) Accrued excise tax on shares repurchased — — 16 — 16 Accrued dividends on unvested shares — — ( 21 ) — ( 21 ) Cash dividends paid ($ 0.42 per share) — — ( 2,874 ) — ( 2,874 ) BALANCE AT SEPTEMBER 28, 2024 6,761,582 $ 1,311 $ 213,909 $ ( 10,707 ) $ 204,513 See accompanying notes to the condensed consolidated financial statements. 8 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Summary of Significant Accounting Policies Description of Business CRA International, Inc. and its wholly-owned subsidiaries (collectively, "CRA, "the "Company," “we,” “our” or “us”) is a worldwide leading consulting services firm that applies advanced analytic techniques and in-depth industry knowledge to complex engagements for a broad range of clients. CRA offers services in two broad areas: litigation, regulatory, and financial consulting and management consulting. CRA operates in one business segment. CRA operates its business under its registered trade name, Charles River Associates. Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of CRA which require consolidation, after the elimination of intercompany accounts and transactions. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all the information and note disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair presentation of CRA’s results of operations, financial position, cash flows, and shareholders’ equity for the interim periods presented in conformity with U.S. GAAP. Results of operations for the interim periods presented herein are not necessarily indicative of results of operations for a full year. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 28, 2024 included in CRA’s Annual Report on Form 10-K filed with the SEC on February 20, 2025. Note 1 to the Consolidated Financial Statements included in Part II, Item 8, on Form 10-K for the fiscal year ended December 28, 2024 describes the significant accounting policies and methods used in preparation of the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q. Recent Accounting Standards Not Yet Adopted Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). The ASU expands annual disclosures in an entity’s income tax rate reconciliation table and requires annual disclosures regarding cash taxes paid both in the U.S. (federal, state and local) and foreign jurisdictions. ASU 2023-09 also requires income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. ASU 2023-09 is effective for CRA for annual periods beginning after December 15, 2024. CRA plans to adopt the amendment during the annual reporting for fiscal year 2025. CRA has assessed the impact of the amendment and has modeled out the changes to its income tax disclosures. As the amendment relates solely to disclosures, the adoption is not expected to have an impact on CRA's financial position or its results of operations. Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03") . The 9 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) ASU requires disclosure, in the notes to the financial statements, specified information about certain costs and expenses including employee compensation, depreciation, and intangible asset amortization. ASU 2024-03, further clarified in ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date is effective for CRA for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. CRA expects the adoption of this ASU will have no impact on its financial position or its results of operations, but will result in additional disclosures. 2. Revenues and Allowances The contracts CRA enters into and operates under specify whether the projects are billed on a time-and-materials or a fixed-price basis. Time-and-materials contracts are typically used for litigation, regulatory, and financial consulting projects while fixed-price contracts are principally used for management consulting projects. In general, project costs are classified in costs of services and are based on the direct salary of CRA’s employee consultants on the engagement, plus all direct expenses incurred to complete the project, including any amounts billed to CRA by its non-employee experts. Disaggregation of Revenue The following tables disaggregate CRA’s revenue by type of contract and geographic location (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date Period Ended Type of Contract September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Consulting services revenues: Fixed-price $ 31,590 $ 30,670 $ 91,332 $ 90,043 Time-and-materials 154,301 137,078 463,288 420,936 Total $ 185,891 $ 167,748 $ 554,620 $ 510,979 Revenues have been attributed to locations based on the location of the legal entity generating the revenues. Fiscal Quarter Ended Fiscal Year-to-Date Period Ended Geographic Breakdown September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Consulting services revenues: United States $ 146,116 $ 136,223 $ 447,575 $ 417,029 United Kingdom 28,345 20,821 73,932 64,136 Other 11,430 10,704 33,113 29,814 Total $ 185,891 $ 167,748 $ 554,620 $ 510,979 Reserves for Variable Consideration and Credit Risk Revenues from CRA's consulting services are recorded at the net transaction price, which includes estimates of variable consideration for which reserves are established. Variable consideration reserves are based on specific price concessions and those expected to be extended to CRA customers estimated by CRA's historical realization rates. Reserves for variable consideration are recorded as a component of the allowances for accounts receivable and unbilled services on the condensed consolidated balance sheets. Adjustments to the reserves for variable consideration are included in revenues on the condensed consolidated statements of operations. 10 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) CRA also maintains allowances for accounts receivable and unbilled services for estimated losses resulting from clients’ failure to make required payments. Under ASC Topic 326, Financial Instruments—Credit Losses , CRA estimates allowances based on historical charge-off rates, adjusted for days sales outstanding and expected changes to clients’ financial conditions during the anticipated collection period. Bad debt expense, net of recoveries of previously written off allowances, is recorded as a component of selling, general and administrative expenses on the condensed consolidated statements of operations. The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Bad debt expense (recovery), net $ 155 $ ( 94 ) $ 718 $ 587 Reimbursable Expenses Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including travel and other out-of-pocket expenses, fees for outside consultants, and other reimbursable expenses. CRA recovers substantially all of these costs. The following expenses are subject to reimbursement (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Reimbursable expenses $ 17,802 $ 16,107 $ 53,923 $ 49,530 Contract Balances from Contracts with Customers The timing of revenue recognition, billings, and cash collections results in accounts receivables, unbilled services, and contract liabilities on the condensed consolidated balance sheets. Revenues recognized for services performed, but not yet billed to clients, are recorded as unbilled services. The following table presents the open and closing balances of CRA's accounts receivable, net and unbilled services, net (in thousands): September 27, 2025 December 28, 2024 December 30, 2023 Accounts receivable, net $ 151,851 $ 162,293 $ 142,729 Unbilled services, net $ 91,235 $ 57,255 $ 56,827 CRA defines contract assets as assets for which it has recorded revenue because it determines that it is probable that it will earn a performance-based or contingent fee, but is not yet entitled to receive a fee because certain events, such as completion of the measurement period or client approval, must occur. The contract assets balance was immaterial as of September 27, 2025, December 28, 2024, and December 30, 2023. When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after performance obligations have been satisfied and all revenue recognition criteria have been met. Contract liabilities are included in deferred revenue and other liabilities in the condensed consolidated balance sheets. The following table presents the closing balances of CRA's contract liabilities (in thousands): September 27, 2025 December 28, 2024 December 30, 2023 Contract liabilities $ 2,371 $ 7,340 $ 6,037 11 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) CRA recognized the following revenue that was included in the contract liabilities balance as of the opening of the respective period or for performance obligations satisfied in previous periods (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Amounts included in contract liabilities at the beginning of the period $ 1,673 $ 1,656 $ 7,084 $ 5,686 Performance obligations satisfied in previous periods $ 4,480 $ 2,650 $ 3,025 $ 3,557 3. Forgivable Loans In order to attract and retain highly skilled professionals, CRA may issue forgivable loans to employees and non-employee experts, certain of which may be denominated in local currencies. A portion of these loans is collateralized. The forgivable loans have terms that are generally between two and eight years with interest rates currently between 0.43 % and 5.12 %. The principal amount of forgivable loans and accrued interest is forgiven by CRA over the term of the loans, so long as the employee or non-employee expert continues employment or affiliation with CRA and complies with certain contractual requirements. During the fiscal year-to-date period ended September 27, 2025 and fiscal year 2024 there were no balances due under these loans for which the full principal and interest were not forgiven or not collected upon termination of employment or affiliation with CRA. The forgiveness of the principal amount of the loans is recorded as compensation over the service period, which is consistent with the term of the loans. The following table presents forgivable loan activity for the respective periods (in thousands): September 27, 2025 December 28, 2024 Beginning balance $ 55,492 $ 53,941 Advances 70,338 45,494 Repayments ( 1,933 ) ( 2,761 ) Reclassifications from accrued expenses or to other assets (1) ( 333 ) ( 9,989 ) Amortization (2) ( 22,605 ) ( 31,055 ) Effects of foreign currency translation 387 ( 138 ) Ending balance $ 101,346 $ 55,492 Current portion of forgivable loans $ 20,881 $ 6,535 Non-current portion of forgivable loans $ 80,465 $ 48,957 _______________________________ (1) Relates to the reclassification of performance awards previously recorded as accrued expenses or forgivable loans that have been reclassified to other receivables. (2) During the fiscal year-to-date period ended September 27, 2025 and fiscal year ended December 28, 2024, approximately $ 1.1 million and $ 5.7 million, respectively, of amortization was accelerated due to terminations. 4. Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the fiscal year-to-date period ended September 27, 2025 are summarized as follows (in thousands): 12 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) Goodwill, at December 28, 2024 $ 165,630 Accumulated goodwill impairment ( 71,893 ) Goodwill, net at December 28, 2024 93,737 Foreign currency translation adjustment 897 Goodwill, net at September 27, 2025 $ 94,634 Goodwill, net at September 27, 2025 is comprised of goodwill of $ 166.5 million and accumulated impairment of $ 71.9 million. There were no impairment losses related to goodwill during the fiscal year-to-date period ended September 27, 2025 or during the fiscal year ended December 28, 2024. Intangible assets that are separable from goodwill and have determinable useful lives are valued separately and amortized using the straight-line method over their expected useful lives. There were no impairment losses related to intangible assets during the fiscal-year-to-date period ended September 27, 2025 or during the fiscal year ended December 28, 2024. The components of acquired identifiable intangible assets are as follows (in thousands): September 27, 2025 December 28, 2024 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer relationships 10 $ 15,300 $ ( 9,231 ) $ 6,069 $ 15,300 $ ( 8,084 ) $ 7,216 As a result of an asset acquisition in CRA's intellectual property practice, CRA recognized $ 1.5 million of intangible assets related to customer relationships during the second quarter of fiscal 2024. Amortization expense related to intangible assets was $ 0.4 million and $ 1.1 million for the fiscal quarter and fiscal year-to-date period ended September 27, 2025, respectively. Amortization expense related to intangible assets was $ 0.4 million and $ 1.1 million for the fiscal quarter and fiscal year-to-date period ended September 28, 2024, respectively. 5. Accrued Expenses Accrued expenses consist of the following (in thousands): September 27, 2025 December 28, 2024 Compensation and related expenses $ 152,188 $ 167,899 Performance awards 19,040 159 Direct project accruals 3,297 2,236 Other 8,150 11,119 Total accrued expenses $ 182,675 $ 181,413 As of September 27, 2025 and December 28, 2024, approximate ly $ 120.4 million and $ 144.2 million, respectively, of accrued bonuses were included above in “Compensation and related expenses.” 6. Income Taxes For the fiscal quarters ended September 27, 2025 and September 28, 2024, CRA’s effective income tax rate (“ETR”) was 29.3 % and 28.7 %, respectively. The ETR for the third quarter of fiscal 2025 was higher than the third quarter of fiscal 2024 primarily due to a decreased benefit related to share-based compensation, a remeasurement of deferred tax assets related to changes in current-year state apportionment, and an increase to a prior year tax reserve. The increase was partially offset by the impact of state tax law changes effective for fiscal 2025. 13 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) For the fiscal year-to-date periods ended September 27, 2025 and September 28, 2024, CRA's ETR was 28.3 % and 29.1 %, respectively. The ETR for the current fiscal year-to-date period was lower than the prior year-to-date period primarily due to the impact of state tax law changes effective for fiscal 2025, partially offset by the remeasurement of deferred tax assets related to changes in current-year state apportionment. On July 4, 2025, tax legislation known as the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. CRA has evaluated the impact of the U.S. tax law changes introduced by the OBBBA on our current year’s consolidated financial statements and have found it to not be material. 7. Net Income Per Share CRA calculates basic earnings per share using the two-class method. CRA calculates diluted earnings per share using the more dilutive of either the two-class method or treasury stock method. The two-class method was more dilutive for the fiscal quarters and fiscal year-to-date periods ended September 27, 2025 and September 28, 2024. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all the net earnings for the period had been distributed. CRA's participating securities consist of unvested share-based payment awards that contain a nonforfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common shareholders. Net earnings allocable to these participating securities were not material for the fiscal quarters and fiscal year-to-date periods ended September 27, 2025 and September 28, 2024. The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data): Fiscal Quarter Ended Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Numerator: Net income — basic $ 11,473 $ 11,437 $ 41,597 $ 31,666 Less: net income attributable to participating shares 20 25 80 94 Net income — diluted $ 11,453 $ 11,412 $ 41,517 $ 31,572 Denominator: Weighted average shares outstanding — basic 6,556 6,760 6,675 $ 6,840 Effect of dilutive stock options and restricted stock units 65 83 70 82 Weighted average shares outstanding — diluted 6,621 6,843 6,745 6,922 Net income per share: Basic $ 1.74 $ 1.68 $ 6.22 $ 4.62 Diluted $ 1.73 $ 1.67 $ 6.16 $ 4.57 There were no anti-dilutive share-based awards for the fiscal quarter period ended September 27, 2025. For the fiscal year-to-date period ended September 27, 2025, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding amounted to 1,283 shares. For the fiscal quarter and fiscal year-to-date period ended September 28, 2024, the anti-dilutive share-based awards that were excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average outstanding shares amounted to 4,900 and 1,225 shares, respectively. 14 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) 8. Fair Value of Financial Instruments As of September 27, 2025 and December 28, 2024, CRA did not have any financial instruments measured at fair value on a recurring basis. CRA had no contingent consideration obligations during the fiscal quarter and fiscal year-to-date period ended September 27, 2025. The contingent consideration liability pertained to estimated future contingent consideration payments related to the acquisition of bioStrategies Group, Inc. during fiscal 2022. The following table summarizes the changes in the contingent consideration liability for the fiscal year ended December 28, 2024 (in thousands): Fiscal Year Ended December 28, 2024 Beginning balance $ 190 Remeasurement of acquisition-related contingent consideration ( 190 ) Ending balance $ — 9. Credit Agreement CRA is party to a Credit Agreement, dated as of August 19, 2022 (as amended, the "Credit Agreement") with Bank of America, N.A., as swingline lender, a letter of credit issuing bank and administrative agent, and with Citizens Bank, N.A., as a letter of credit issuing bank. The Credit Agreement provides CRA with a $ 250.0 million revolving credit facility, which may be decreased at CRA's option to $ 200.0 million during the period from July 16 in a year through January 15 in the next year. Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $ 250.0 million. The revolving credit facility includes a $ 25.0 million sublimit for the issuance of letters of credit. Under the Credit Agreement, CRA must comply with various financial and non-financial covenants. The primary financial covenants consist of a maximum consolidated net leverage ratio of 3.0 to 1 and a minimum consolidated interest coverage ratio of 2.5 to 1. The primary non-financial covenants include, but are not limited to, restrictions on CRA's ability to incur future indebtedness, engage in acquisitions or dispositions, pay dividends or repurchase capital stock, and enter into business combinations. Any indebtedness outstanding under the revolving credit facility may become immediately due upon the occurrence of stated events of default, including CRA's failure to pay principal, interest or fees, or upon the breach of any covenant. As of September 27, 2025, CRA was in compliance with the covenants of the Credit Agreement. There were $ 95.0 million in borrowings outstanding under the revolving credit facility as of September 27, 2025 and no borrowings outstanding as of December 28, 2024. As of September 27, 2025, the amount available under the revolving credit facility was reduced by certain letters of credit outstanding, which amounted to $ 3.9 million. CRA has chosen to classify the revolver as a current liability in its condensed consolidated balance sheet, as CRA has the intent to repay the amount within 12 months after the balance sheet date. 10. Commitments and Contingencies As described in Note 9, CRA is party to standby letters of credit with its banks in support of minimum future lease payments under certain operating leases for office space. CRA is subject to legal actions arising in the ordinary course of business. In management’s opinion, based on current knowledge, CRA believes it has adequate legal defenses or insurance coverage, or both, with respect to the eventuality of such actions. CRA does not believe any settlement or judgment relating to any pending legal action would materially affect its 15 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) financial position or results of operations . However, the outcome of such legal actions is inherently unpredictable and subject to inherent uncertainties. 11. Segment Reporting CRA manages its business globally within one operating segment, professional and consulting services, in accordance with ASC Topic 280, Segment Reporting . The accounting policies of the professional and consulting services segment are the same as those described in Note 1 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, filed with the SEC on February 20, 2025. The chief operating decision maker, which is our Chief Executive Officer, assesses performance for the professional and consulting services segment and decides how to allocate resources based on consolidated net income that is also reported in the condensed consolidated statements of operations as net income. The measure of segment assets is reported in the condensed consolidated balance sheets as total assets. The following table represents consolidated net income reported by segment revenue, segment profit or loss, and significant segment expenses (in thousands): Fiscal Quarter Ended Fiscal Year-to-Date Period Ended September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Revenues $ 185,891 $ 167,748 $ 554,620 $ 510,979 Employee compensation and fringe benefit costs 115,390 101,991 339,047 313,408 Forgivable loan amortization 8,525 6,384 22,605 24,141 Client reimbursable expenses 17,802 16,107 53,923 49,530 Other segment expense (1) 27,950 27,236 81,061 79,243 Provision for income taxes 4,751 4,593 16,387 12,991 Segment net income 11,473 11,437 41,597 31,666 Reconciliation of profit or loss Adjustments and reconciling items — — — — Consolidated net income $ 11,473 $ 11,437 $ 41,597 $ 31,666 1 Other segment expenses included in segment net income includes, rent, commissions to non-employee experts, legal and professional services, software subscription and data services, travel and entertainment expenses, training and marketing expenses, other operating expenses, depreciation and amortization, interest expense, net, and foreign currency gains (losses), net. 12. Subsequent Events On October 30, 2025, CRA announced that its Board of Directors declared a quarterly cash dividend of $ 0.57 per common share, payable on December 12, 2025 to shareholders of record as of November 25, 2025. 16 Table of Contents