CRA International, Inc. Small-Cap Virtual Conference

Good morning, gentlemen. Good morning, and thank you, Marc.

Good morning, everyone. My name is Paul A. Maleh. I'm President, CEO, and Chairman of Charles River Associates. I've been at CRA for 37 years. I grew up in this organization. I think I've held practically every title during my tenure, and I care very deeply about this organization. I'm very proud of our accomplishments. Hopefully, during today's speed dating session, you can see some of the reasons why I'm proud. CRA intends to be the trusted partner clients turn to for clarity in their most complex and consequential decisions. At the same time, being a community where exceptional people grow, lead, and pursue work that demands their best. That is the hallmark and the foundation of everything we do at CRA. We are a multinational consultancy with more than 20 offices across eight countries.

Our services span across two lines of business, the first and largest being legal and regulatory consulting, represents roughly about 80% of our revenue, and management consulting represents the remainder, the remainder of 20% of our revenue. If you're going to be a successful consulting company, everything starts with your ability to recruit the best and brightest. I think we have done a pretty exceptional job at CRA doing just that. We recruit the best and brightest and provide them an environment in which to flourish. I'm proud of so many firm accomplishments, and the statistics on this page speak to some of those accomplishments. One of the statistics I want to talk to you a little bit about is the statistic in the upper right-hand corner, because I think it highlights the fact that we have created that environment for really wonderful people to excel.

The statistic reads less than 5% voluntary turnover among top revenue-generating employees over the past five years. So what do we mean by that? Every year, I present to our board of directors a list of the top 30 revenue generators at CRA. We go over the composition of the top 30, where they are geographically, where they are across our practices and whatnot. I present this list every year. As you can imagine, people go in and out of the top 30 list. If I look at the union of those top 30 lists over the past five years, it is roughly 55 to 60 of my colleagues. So when we say less than 5% voluntary turnover, that's not 5% per annum. That's less than 5% in total, which means less than three people have left CRA in the past five years.

Not just people, but individuals that can pretty much go anywhere they want and most likely get a premium in their demands for the move. They are electing to stay at CRA, and having that strong a foundation enables us to grow. That means the vast majority of our investment dollars and talent create revenue growth. We talked about the two main lines of business. These are our practices at CRA. I will try to give you a few statistics here. Management Consulting is made of Life Sciences, the Energy practice, and Marakon. All the other practices listed here are in Legal and Regulatory Services. Our Antitrust & Competition Economics practice makes up the largest practice at CRA, representing roughly 45% of total firm revenue.

The combination of Antitrust & Competition Economics, Forensic Services, and Life Sciences, we call those sort of the big three, and they make up roughly 75% of our revenue. The one thing I will share with you is no matter how you slice and dice this group, they are all contributing to our growth and prosperity. You may not be familiar with Charles River Associates, but I am pretty sure you are familiar with our clients. This chart represents some of the logos of our clients that are in the Fortune 100 companies. In the past two years, we have worked with 88 of the Fortune 100 companies. If I showed you this chart from last year, what is the number? Roughly 86. If I showed it to you from two years ago, what is it? 87, 88, and so on.

What it represents is that clients come to CRA time and time again for their most consequential and complex decisions. We are not on subscriptions with these clients. We do not have annuity contracts. They come with discrete needs and discrete projects, but yet they are coming to CRA time and time again. It is this deep client base that enables us to produce the financial results that we have enjoyed over the last decade plus. We talked about the Fortune 100 companies. In the legal regulatory space, oftentimes law firms retain CRA on behalf of these Fortune 100 companies. In the past two years, we have partnered with 98 of the top 100 law firms. Practically every single major law firm in the world goes to CRA for particular needs and projects. We work very hard to maintain this kind of client penetration.

The good news is that our client base is very large and growing. Thus, CRA does not need to go outside of its core competencies or its core client relationships to grow. Let me see. Did I skip something? I apologize. Lost a little track here. When you hire the best people and you work on clients' most consequential projects, you produce really impressive financial results on that. Here it shows you what our financial results are to the first half of 2026, what they were in 2025, what they were in the last five years. If I showed you what they were in the last 10 years, what you are going to see is we have pretty consistently grown around 9%-10% a year top line, and been able to grow revenue profits at an even faster rate to that.

We are growing and growing profitably and creating value for our shareholders because, and should I say, all of this growth is funded by cash from internal operations. We have achieved this growth with no debt. Not just we have achieved the growth with no debt, we were able to fund our talent investments and our growth investments and still have substantive capital to return back to our shareholders, as can be seen in the last two columns. In the last five years, we have repurchased over $180 million of stock at an average price of $110. In addition, we also have a dividend that has been growing quite handsomely for the past almost decade plus on this. Stock repurchases make up roughly 80% of our capital redistributions to shareholders, and the cash dividend, the remaining piece. Our investment thesis is really quite simple.

We are here to maximize CRA's long-term value per share. If you break down that objective, it really gives you an insight as to what guides our management decision-making. Everyone on the management team at CRA, we are value-based decision makers. We will invest in value-creating growth and return all excess capital back to our shareholders. History has shown that we are able to grow at that 9%, 10% top-line growth and return roughly half of our adjusted cash flow from ops back to our shareholders, thus the per share ending on our objective. Given the time constraints here, I am not going to go through every one of these AI points, and we could spend the entire conference talking about the opportunities, challenges that exist in an AI growing world. I am going to try to focus on two main points here.

First, CRA sees AI as both a demand amplifier and productivity enhancer. We generally believe, and we believe our accumulating evidence that demonstrate that AI strengthens positions of firms like CRA with deep expertise, strong governance, and established credibility. The other thing I want to add is we have not observed any facts to date to indicate anything to the contrary that is in that blue box there, that being AI is a demand amplifier and productivity enhancer. In fact, for probably almost the past year now, CRA has seen lead flow opportunity coming into the firm at rates of growth that I have never observed during my tenure with it. If anything, the AI is creating more complexity for our clients, more complex decision-making, and it is actually presenting CRA with more opportunities.

The productivity side of it is we are able to provide our clients with even greater value because we can be more efficient in the delivery of those services. Here is a little snapshot of our revenue and our EBITDA over the past five years. When you look at it, even on the GAAP reported numbers of revenue and EBITDA, margins are pretty good. They show that they are growing here, and that goes to we grow, and we grow profitably. The piece that I want to highlight for people listening to this presentation is there is a very large non-cash amortization charge that flows through our P&L but is not excluded or is actually expensed when we estimate EBITDA. This forgivable loan amortization is not part of the D&A that is added back when estimating EBITDA. What is this forgivable loan amortization?

A large part of our inorganic growth comes from talent investments, bringing on new streams of revenue into the firm. When these new streams of revenue are brick-and-mortar entities, the accounting treatment is really quite simple. Sometimes the new streams of revenue are prominent individuals with very large books of business or prominent group hires from competing firms and institutions that we would like to add to our portfolio. These individuals still require purchase price consideration. When you give them a purchase price consideration, the accounting rules do not let you put that purchase price into the goodwill on your balance sheet. It flows through your income statement. So the purchase price is given to those individuals, and that the amortization, given what the term of the contract is, creates a non-cash expense. That last line is that non-cash amortization of forgivable loan.