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 April 4, 2026 March 29, 2025 Revenues $ 200,975 $ 181,851 Costs of services (exclusive of depreciation and amortization) 145,029 120,354 Selling, general and administrative expenses 34,523 32,538 Depreciation and amortization 3,391 3,411 Income from operations 18,032 25,548 Interest expense, net ( 1,011 ) ( 429 ) Foreign currency gains (losses), net 378 ( 474 ) Income before provision for income taxes 17,399 24,645 Provision for income taxes 6,267 6,643 Net income $ 11,132 $ 18,002 Net income per share: Basic $ 1.71 $ 2.65 Diluted $ 1.69 $ 2.62 Weighted average number of shares outstanding: Basic 6,512 6,775 Diluted 6,588 6,862 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 April 4, 2026 March 29, 2025 Net income $ 11,132 $ 18,002 Other comprehensive income (loss) Foreign currency translation adjustments, net of tax ( 855 ) 1,743 Comprehensive income $ 10,277 $ 19,745 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) April 4, 2026 January 3, 2026 ASSETS Current assets: Cash and cash equivalents $ 32,496 $ 18,210 Accounts receivable, net of allowances of $ 6,750 and $ 6,664 , respectively 141,024 183,264 Unbilled services, net of allowances of $ 1,698 and $ 1,489 , respectively 92,238 65,598 Prepaid expenses and other current assets 24,789 19,331 Forgivable loans 25,925 16,726 Total current assets 316,472 303,129 Property and equipment, net 36,312 36,713 Goodwill, net 94,473 94,718 Intangible assets, net 5,304 5,686 Right-of-use assets 72,101 76,132 Deferred income taxes 16,550 17,958 Forgivable loans, net of current portion 117,960 90,271 Other assets 3,242 4,266 Total assets $ 662,414 $ 628,873 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 24,273 $ 30,177 Accrued expenses 132,454 223,460 Deferred revenue and other liabilities 12,647 14,351 Current portion of lease liabilities 17,239 17,223 Current portion of deferred compensation 2,228 10,818 Revolving line of credit 192,000 34,000 Total current liabilities 380,841 330,029 Non-current liabilities: Deferred compensation and other non-current liabilities 11,582 8,512 Non-current portion of lease liabilities 70,889 76,009 Deferred income taxes 712 725 Total non-current liabilities 83,183 85,246 Commitments and contingencies (Note 9) 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; 6,444,116 and 6,547,407 shares issued and outstanding, respectively — 2,480 Retained earnings 209,189 221,062 Accumulated other comprehensive loss ( 10,799 ) ( 9,944 ) Total shareholders’ equity 198,390 213,598 Total liabilities and shareholders’ equity $ 662,414 $ 628,873 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 quarter ended April 4, 2026 March 29, 2025 OPERATING ACTIVITIES: Net income $ 11,132 $ 18,002 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 3,391 3,411 Right-of-use asset amortization 3,708 3,851 Deferred income taxes 1,436 ( 1,025 ) Share-based compensation expense 1,366 1,390 Bad debt expense (recovery), net ( 107 ) 433 Unrealized foreign currency remeasurement (gains) losses, net 267 52 Changes in operating assets and liabilities: Accounts receivable 41,682 22,456 Unbilled services ( 26,958 ) ( 25,202 ) Prepaid expenses and other current assets, and other assets ( 4,308 ) 294 Forgivable loans ( 52,707 ) ( 20,219 ) Incentive cash awards payable 3,164 2,834 Accounts payable, accrued expenses, and other liabilities ( 91,196 ) ( 81,579 ) Lease liabilities ( 4,759 ) ( 4,692 ) Net cash used in operating activities ( 113,889 ) ( 79,994 ) INVESTING ACTIVITIES: Purchases of property and equipment ( 2,649 ) ( 974 ) Net cash used in investing activities ( 2,649 ) ( 974 ) FINANCING ACTIVITIES: Borrowings under revolving line of credit 208,000 90,000 Repayments under revolving line of credit ( 50,000 ) ( 5,000 ) Tax withholding payments reimbursed by shares ( 1,449 ) ( 2,454 ) Cash dividends and dividend equivalents paid ( 3,806 ) ( 3,488 ) Repurchase of common stock ( 21,463 ) — Net cash provided by financing activities 131,282 79,058 Effect of foreign exchange rates on cash and cash equivalents ( 458 ) 797 Net increase (decrease) in cash and cash equivalents 14,286 ( 1,113 ) Cash and cash equivalents at beginning of period 18,210 26,711 Cash and cash equivalents at end of period $ 32,496 $ 25,598 Noncash investing and financing activities: Increase (decrease) in accounts payable and accrued expenses for property and equipment $ 52 $ ( 596 ) Excise tax on share repurchases $ ( 192 ) $ 39 Right-of-use assets obtained in exchange for lease obligations $ — $ 701 Supplemental cash flow information: Cash paid for taxes $ 1,926 $ 3,181 Cash paid for interest $ 564 $ 131 Cash paid for amounts included in operating lease liabilities $ 5,956 $ 5,714 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 JANUARY 3, 2026 6,547,407 $ 2,480 $ 221,062 $ ( 9,944 ) $ 213,598 Net income — — 11,132 — 11,132 Foreign currency translation adjustment, net of tax — — — ( 855 ) ( 855 ) Share-based compensation expense — 1,366 — — 1,366 Restricted shares vesting 20,898 — — — — Redemption of vested employee restricted shares for tax withholding ( 8,149 ) ( 1,449 ) — — ( 1,449 ) Shares repurchased ( 116,040 ) ( 2,397 ) ( 19,066 ) — ( 21,463 ) Accrued excise tax on shares repurchased — — ( 192 ) — ( 192 ) Accrued dividends on unvested shares — — 59 — 59 Cash dividends paid ($ 0.57 per share) — — ( 3,806 ) — ( 3,806 ) BALANCE AT APRIL 4, 2026 6,444,116 $ — $ 209,189 $ ( 10,799 ) $ 198,390 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 28, 2024 6,768,575 $ 1,663 $ 225,461 $ ( 15,051 ) $ 212,073 Net income — — 18,002 — 18,002 Foreign currency translation adjustment, net of tax — — — 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 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. ("CRA" or the "Company") 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 and its wholly-owned subsidiaries (collectively, the "Company") 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 the Company’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 January 3, 2026 included in CRA’s Annual Report on Form 10-K filed with the SEC on February 26, 2026. Note 1 to the Consolidated Financial Statements included in Part II, Item 8, on Form 10-K for the fiscal year ended January 3, 2026 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 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software On January 4, 2026, CRA adopted Accounting Standards Update ("ASU") No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”) , which modernized the accounting for internal-use software. ASU 2025-06 removed all references to software development stages and requires capitalization of software costs when management has committed to funding the software project and it is probable the project will be completed and the software will be used to perform the function intended. The adoption of ASU 2025‑06 did not have a material impact on CRA’s condensed consolidated financial statements. Recent Accounting Standards Not Yet Adopted Interim Reporting (Topic 270): Narrow‑Scope Improvements In December 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025‑11, Interim Reporting (Topic 270): Narrow‑Scope Improvements (“ASU 2025‑11”). ASU 2025-11 is intended to improve the navigability of interim reporting guidance by clarifying when Topic 270 applies, enhancing the organization of required interim disclosures, and providing additional direction on the form and content of interim financial statements. The amendments introduce a disclosure principle requiring entities to disclose events occurring after the end of the most recent annual reporting period that have a material impact on the entity. ASU 2025-11 also compiles a comprehensive list of interim disclosures currently required under U.S. GAAP, without expanding or reducing existing requirements. 9 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) ASU 2025‑11 is effective for interim periods within annual reporting periods beginning after December 15, 2027, for public business entities, with early adoption permitted. CRA is evaluating the impact of the amendments and does not expect them to materially affect its interim reporting, as the changes primarily clarify existing disclosure requirements. 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") . ASU 2024-03 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 Type of Contract April 4, 2026 March 29, 2025 Consulting services revenues: Fixed-price $ 35,820 $ 30,329 Time-and-materials 165,155 151,522 Total $ 200,975 $ 181,851 Revenues have been attributed to locations based on the location of the legal entity generating the revenues. Fiscal Quarter Ended Geographic Breakdown April 4, 2026 March 29, 2025 Consulting services revenues: United States $ 160,013 $ 149,714 United Kingdom 28,025 23,124 Other 12,937 9,013 Total $ 200,975 $ 181,851 10 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) 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 sheet. Adjustments to the reserves for variable consideration are included in revenues on the condensed consolidated statement of operations. 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 statement of operations. The following table presents CRA's bad debt expense, net of recoveries of previously written-off allowances (in thousands): Fiscal Quarter Ended April 4, 2026 March 29, 2025 Bad debt expense (recovery), net $ ( 107 ) $ 433 Reimbursable Expenses Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including those relating to travel, out-of-pocket expenses, outside consultants and other third-party vendor expenses. CRA recovers substantially all these costs. The following expenses are subject to reimbursement (in thousands): Fiscal Quarter Ended April 4, 2026 March 29, 2025 Reimbursable expenses $ 19,057 $ 16,506 Contract Balances from Contracts with Customers The timing of revenue recognition, billings, and cash collections results in accounts receivables, unbilled services, and contract liabilities in the condensed consolidated balance sheet. 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): April 4, 2026 January 3, 2026 December 28, 2024 Accounts receivable, net $ 141,024 $ 183,264 $ 162,293 Unbilled services, net $ 92,238 $ 65,598 $ 57,255 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 April 4, 2026, January 3, 2026, and December 28, 2024. 11 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) 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 sheet. The following table presents the closing balances of CRA's contract liabilities (in thousands): April 4, 2026 January 3, 2026 December 28, 2024 Contract liabilities $ 6,048 $ 9,008 $ 7,340 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 April 4, 2026 March 29, 2025 Amounts included in contract liabilities at the beginning of the period $ 6,586 $ 6,290 Performance obligations satisfied in previous periods $ 3,375 $ 2,325 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 quarter ended April 4, 2026 and fiscal year ended January 3, 2026 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): Fiscal Quarter Ended Fiscal Year Ended April 4, 2026 January 3, 2026 Beginning balance $ 106,997 $ 55,492 Advances 62,367 87,909 Repayments ( 50 ) ( 1,933 ) Reclassifications from accrued expenses or to other assets (1) ( 15,644 ) ( 2,203 ) Amortization (2) ( 9,685 ) ( 32,721 ) Effects of foreign currency translation ( 100 ) 453 Ending balance $ 143,885 $ 106,997 Current portion of forgivable loans $ 25,925 $ 16,726 Non-current portion of forgivable loans $ 117,960 $ 90,271 _______________________________ (1) Relates to the reclassification of performance awards previously recorded as accrued expenses or forgivable loans that have been reclassified to other receivables. 12 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) (2) During the fiscal quarter ended April 4, 2026, approximately $ 0.1 million of amortization was accelerated due to involuntary terminations. During the fiscal year ended January 3, 2026, approximately $ 1.1 million of amortization was accelerated due to terminations. 4. Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the fiscal quarter ended April 4, 2026 are summarized as follows (in thousands): Goodwill, at January 3, 2026 $ 166,611 Accumulated goodwill impairment ( 71,893 ) Goodwill, net at January 3, 2026 94,718 Foreign currency translation adjustment ( 245 ) Goodwill, net at April 4, 2026 $ 94,473 Goodwill, net at April 4, 2026 is comprised of goodwill of $ 166.4 million and accumulated impairment of $ 71.9 million. There were no impairment losses related to goodwill during the fiscal quarter ended April 4, 2026 or during the fiscal year ended January 3, 2026. 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 quarter ended April 4, 2026 or during the fiscal year ended January 3, 2026. The components of acquired identifiable intangible assets are as follows (in thousands): April 4, 2026 January 3, 2026 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 $ ( 9,996 ) $ 5,304 $ 15,300 $ ( 9,614 ) $ 5,686 Amortization expense related to intangible assets was $ 0.4 million for both the fiscal quarters ended April 4, 2026 and March 29, 2025. 5. Accrued Expenses Accrued expenses consist of the following (in thousands): April 4, 2026 January 3, 2026 Compensation and related expenses $ 111,037 $ 192,397 Performance awards 7,733 21,278 Direct project accruals 2,603 2,275 Other 11,081 7,510 Total accrued expenses $ 132,454 $ 223,460 As of April 4, 2026 and January 3, 2026, approximate ly $ 68.8 million and $ 161.5 million, respectively, of accrued bonuses were included above in “Compensation and related expense s.” 13 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) 6. Income Taxes For the fiscal quarters ended April 4, 2026 and March 29, 2025, the effective income tax rate (“ETR”) was 36.0 % and 27.0 %, respectively. The ETR for the fiscal quarter ended April 4, 2026 was higher than the fiscal quarter ended March 29, 2025 primarily due to an increase in nondeductible executive compensation, the recording of a valuation allowance in a foreign jurisdiction, and a decrease in tax benefit related to share-based compensation, partially offset by a decrease to a prior year tax reserve. 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 the treasury stock method. The two-class method was more dilutive for the fiscal quarters ended April 4, 2026 and March 29, 2025. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all 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 ended April 4, 2026 and March 29, 2025. The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data): Fiscal Quarter Ended April 4, 2026 March 29, 2025 Numerator: Net income — basic $ 11,132 $ 18,002 Less: net income attributable to participating shares 17 47 Net income — diluted $ 11,115 $ 17,955 Denominator: Weighted average shares outstanding — basic 6,512 6,775 Effect of dilutive stock options and restricted stock units 76 87 Weighted average shares outstanding — diluted 6,588 6,862 Net income per share: Basic $ 1.71 $ 2.65 Diluted $ 1.69 $ 2.62 Anti-dilutive share-based awards are excluded from the calculation of common stock equivalents for purposes of computing diluted weighted average shares outstanding. There were no anti-dilutive share-based awards for the fiscal quarters ended April 4, 2026 and March 29, 2025. 8. 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 14 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) 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 1.0 and a minimum consolidated interest coverage ratio of 2.5 to 1.0. 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 April 4, 2026, CRA was in compliance with the covenants of the Credit Agreement. There were $ 192.0 million and $ 34.0 million in borrowings outstanding under the revolving credit facility as of April 4, 2026 and January 3, 2026, respectively. The amounts available under the revolving credit facility were reduced by certain letters of credit outstanding, which amounted to $ 3.8 million, as of both April 4, 2026 and January 3, 2026. 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. 9. Commitments and Contingencies As described in Note 8, 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 financial position or results of operations . However, the outcome of such legal actions is inherently unpredictable and subject to inherent uncertainties. 10. 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 January 3, 2026, filed with the SEC on February 26, 2026. 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): 15 Table of Contents CRA INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (unaudited) Fiscal Quarter Ended April 4, 2026 March 29, 2025 Revenues $ 200,975 $ 181,851 Employee compensation and fringe benefit costs 127,417 112,798 Forgivable loan amortization 9,685 6,652 Client reimbursable expenses 19,057 16,506 Other segment expense (1) 27,417 21,250 Provision for income taxes 6,267 6,643 Segment net income 11,132 18,002 Reconciliation of profit or loss Adjustments and reconciling items — — Consolidated net income $ 11,132 $ 18,002 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. 11. Subsequent Events On May 4, 2026, the Credit Agreement was amended and restated to increase the capacity of the revolving credit facility by $ 50.0 million to $ 300.0 million. On May 7, 2026, CRA announced that its Board of Directors declared a quarterly cash dividend of $ 0.57 per common share, payable on June 12, 2026 to shareholders of record as of May 26, 2026. 16 Table of Contents