CRA International, Inc. Noble Capital Markets Virtual Equity Investor Conference

Thank you, Joe, and good morning, everyone. As Joe said, my name is Paul Maleh. I'm President, CEO, and Chairman of the Board at Charles River Associates. I've been at this firm for 37 years. In addition to my current titles, I think I've practically held every single title at the organization. I care very deeply about CRA, and I'm very proud of our accomplishments. In about 14 minutes or less, hopefully you can share a little bit of the excitement on these accomplishments. CRA intends to be the trusted partner for clients as they turn for clarity in their most complex and consequential decisions, and a community where people grow, lead, and pursue work that demands their best. We are a multinational organization, 20 offices across eight countries. Our services span two major lines.

Legal and regulatory services captures about 80% of our revenue, and management consulting services, the remaining 20% of our revenue. We recruit the best and brightest, and work really hard to provide them an environment in which to flourish. I'm proud of so many of the accomplishments, but the statistic to the far right is probably one that captures greatest part of my joy. The statistic reads, "Less than 5% voluntary turnover among CRA's top revenue generators over the past five years." Every year, I present to the board our top 30 revenue generators. We talk about their geographies, their practice makeup, their compensation. If I look at over a five-year period of time, the union of that top 30 is about 60 of my colleagues. People go in and out of the top 30 list, as you could imagine.

This statistic is not 5% per annum. This means over a five-year period of time, less than three of our top revenue generators have decided to pursue other employment opportunities. The reason I find this to be one of the most striking and impressive statistic is these individuals can go anywhere they want, and capture very attractive compensation packages. But they are electing to stay at CRA because of the quality of our clients, the quality of our services provide them the best opportunity to flourish. This is a list of our practices. All are highly regarded. Life sciences, energy, and Marakon make up the management consulting component of the 20% of our revenue. All the rest make up the legal and regulatory services. Our antitrust and competition economics practice makes up roughly 45% of our total revenue at CRA.

The big three, as we sometimes refer to them, antitrust and competition economics, forensic services, and life sciences comprises roughly 75% of our total revenue. Many of you on this call may not be familiar with Charles River Associates, but I am pretty sure you are familiar with our clients. Here is a bunch of logos. In the past two years, we have worked with 88 of the Fortune 100 companies. If I showed you this same chart two years ago, five years ago, it would have very similar statistics, 87, 88 of the Fortune 100 companies. The reason this chart is so impressive is that we are not a subscription-based consultancy. We do not have any annuity contracts. That means these clients are coming to CRA time and time again for their most complex and consequential decisions.

On the legal regulatory side, law firms act as the intermediary, retaining CRA on behalf of these large multinational organizations. Again, the statistic is quite gaudy. 98 of the top 100 law firms come to CRA for their most pressing legal matters. Again, two years, five years back, you see the impressive statistics. We clearly have a very strong, established brand in the marketplace, and we are working hard to continue to add depth to the services and to the relationships that we have. Outstanding people, outstanding services, and premier clients yields, surprise, impressive financial results. CRA for the last 10, 15 years has grown top line in the 8%, 9%, 10% per annum range. Our profit margins have grown at a faster rate than revenue, which means we have found ways to expand our profit margins as we continue on our journey.

Here it shows for the first two quarters of 2026, we have grown revenue 12% on that. In fiscal 2025, grown revenue 9%, and over the previous five years, 48%. Again, right around that 9%, 10% per annum. Not only have we grown, we have grown with funds 100% provided by operations. What is impressive about that statistic is we are able to grow at these impressive rates year in and year out, while still returning substantive capital back to our shareholders. Our aim is to return at least 50% of our adjusted cash flows from operations to our shareholders. About three-quarters of that redistribution comes in the form of stock repurchases, with the remaining quarter being on cash dividends. As the last line of this chart shows, we have a pretty attractive return on our stock repurchases. The past five years, we have repurchased $184 million of our shares.

Average price of those repurchases, $110. Last I checked, we are trading somewhere in the $160, $170 range. Our investment thesis is really quite simple. That is to maximize CRA's long-term value per share. We are value-based decision makers at CRA. We will invest in value-creating growth, and we will return our excess capital back to our shareholders. That is what we have done historically, and the market and the position of our services give us confidence that we can continue to provide these kind of returns to our shareholders. Given the time constraints, I am only going to highlight a couple of these key points. CRA sees AI and the impact AI is having on our sector and our clients as a demand amplifier and a productivity enhancer. We believe that it strengthens the position of firms like CRA.

I think in the AI world, expertise has great value, and CRA is a company full of experts with deep functional credibility. Quickly here on our financials, the profit margin, even as reported by GAAP, is very impressive. I want to note here, there is a large non-cash item that is flowing through our income statement that is not captured by our profit margins, whether it is on gross profit, EBIT, EBITDA, profit before tax, or EPS, and that is the non-cash amortization of forgivable loans. We grow in one of two ways at CRA. We grow organically, and we grow inorganically. If I look at medium to long-term, our growth has been roughly 65% organic and 35% inorganic. The forgivable loans are the main tool we use for purchase price consideration for inorganic pursuits. When you acquire a brick-and-mortar entity, the accounting rules are really quite simple.

The cash outlay goes out on day one to the acquired entity, and we get the benefit of the incremental revenue and profits on our income statement, and that cash price largely resides on our balance sheet. When you are recruiting individuals or recruiting groups of individuals from competitors here, we do not have the luxury of using standard acquisition accounting. The purchase price stays the same based on the economics of the prospective acquisition, but the accounting is quite different. That accounting flows through these non-cash charges. I am not saying that the purchase price is not a true cash outlay for CRA. If you do not make the adjustment of these non-cash charges, which are not captured in the D&A of EBITDA, you will be double-counting the impact of our inorganic pursuits with it.

As one example of the reason you have to make these kind of adjustments, if you look at the ratio of CRA's adjusted net cash flows from operations to our EBITDA, it is right around 112%. It was 112% in 2025, 111% the last 3 years, 112% the last 5 years, and the ratio is largely consistent as you go back in time. So we are converting about $1.12 for every dollar of EBITDA created. Another example of the sources and uses of capital here, and to demonstrate that this non-cash charge should be adjusted for is, here is a simple pie of the uses of capital at CRA broken up into our three main buckets: talent, redistribution to our shareholders, and traditional CapEx.

The reason this demonstrates that you should make the adjustment for the forgivable loan amortization is that, as I told you, we use no debt in this period of time. So the cash that we used for these three buckets all has to be provided by cash from operations on that. For talent investments, here the majority of the capital for talent investments come for the acquisition of talent, and a much smaller share comes from what I would call talent maintenance. Sometimes when a contract is up for an individual, you need to re-up or maintain the talent or the revenue provided by that individual. Talent investments make up 46% of our total cash outlays here. When the talent is available, I always want to put my money there and invest in the long-term viability of the organization. CapEx, we are not a very capital-intensive firm.

The CapEx here is more for any kind of leasehold investments we have to make for computers, but it is roughly $4 million-$5 million of annual expenditures. I would expect that to be roughly the same in the years ahead. Then on the redistribution, as we talked about, roughly three-quarters is on the share repurchases and the $55 million is on dividend payments for period. Let me end there. That dividend has been growing quite attractively, right around 15% since we originated it around 8, 10 years ago. I guess we're closer to 10 years now. I always have to check myself here. With that, the shareholder yield is also quite impressive and what I want to highlight there, and that's with the growing share price. We're returning, the yield is roughly 6% of our average market cap.

With that, Joe, I guess I'm at the 15-minute mark. I will stop. Hopefully, some of the messages came across clearly.