FTI Consulting : 1Q24 Earnings Conference Call Presentation

FTI Consulting, Inc.

First Quarter 2024 Earnings Conference Call

April 25, 2024

Cautionary Note About Forward-Looking Statements

This presentation includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve uncertainties and risks. Forward-looking statements include statements concerning our plans, initiatives, projections, prospects, policies, processes and practices, objectives, goals, commitments, strategies, future events, future revenues, future results and performance, future capital allocations and expenditures, expectations, plans or intentions relating to acquisitions, share repurchases and other matters, business trends, new, or changes to, laws and regulations, including U.S. and foreign tax laws, environmental, social and governance ("ESG")-related issues, climate change-related matters, scientific or technological developments, including relating to new and emerging technologies, such as artificial intelligence and machine learning and other information that is not historical. Forward-looking statements often contain words such as "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "commits," "aspires," "forecasts," "future," "goal," "seeks" and variations of such words or similar expressions. All forward-looking statements, including, without limitation, management's financial guidance and examination of operating trends, are based upon our historical performance and our current plans, estimates, intentions and expectations at the time we make them, and various assumptions. Our actual financial results, performance or achievements and outcomes could differ materially from those expressed in, or implied by, any forward-looking statements. Further, unaudited quarterly results are subject to normal year-end adjustments. The Company has experienced fluctuating revenues, operating income and cash flows in prior periods and expects that this will occur from time to time in the future. Other factors that could cause such differences include declines in demand for, or changes in, the mix of services and products that we offer; the mix of the geographic locations where our clients are located or where services are performed; fluctuations in the price per share of our common stock; adverse financial, real estate or other market and general economic conditions; the impact of public health crises and related events that are beyond our control, which could affect our segments, practices and the geographic regions in which we conduct business differently and adversely; and other future events, which could impact each of our segments, practices and the geographic regions in which we conduct business differently and could be outside of our control; the pace and timing of the consummation and integration of future acquisitions; the Company's ability to realize cost savings and efficiencies; competitive and general economic conditions; retention of staff and clients; new laws and regulations or changes thereto; and other risks described under the heading "Item 1A, Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 22, 2024 and in the Company's other filings with the SEC. We are under no duty to update any of the forward-looking statements to conform such statements to actual results or events and do not intend to do so.

2

First Quarter 2024: Financial Review

All numbers in $000s, except for per share data and percentages					Percentage Change in Revenues
									Excluding the Estimated Impact of
Consolidated Results		Q1 2024		Q4 2023	% Variance		Q1 2023	% Variance	Foreign Currency Translation for
			Q1 2024 vs. Q1 2023
Revenues	$	928,553	$	924,684	0.4%	$	806,706	15.1%	14.5%
Net income	$	79,965	$	81,633	-2.0 % $	47,547	68.2 %
Earnings per Diluted Share	$	2.23	$	2.28	-2.2 % $	1.34	66.4 %
Adjusted EBITDA (1)	$	111,073	$	127,394	-12.8 % $	78,427	41.6 %
Adjusted EBITDA Margin (1)		12.0%		13.8%	-		9.7%	-
Segment Results
Corporate Finance & Restructuring (2)
Revenues	$	366,010	$	365,554	0.1 % $	315,652	16.0 %	15.5%
Adjusted Segment EBITDA	$	75,225	$	65,386	15.0 % $	51,847	45.1 %
Adjusted Segment EBITDA Margin		20.6%		17.9%	-		16.4%	-
Forensic and Litigation Consulting (2)
Revenues	$	176,074	$	165,469	6.4 % $	157,739	11.6 %	11.1%
Adjusted Segment EBITDA	$	33,709	$	19,247	75.1 % $	21,784	54.7 %
Adjusted Segment EBITDA Margin		19.1%		11.6%	-		13.8%	-
Economic Consulting
Revenues	$	204,548	$	206,091	-0.7 % $	169,595	20.6 %	19.6%
Adjusted Segment EBITDA	$	14,150	$	38,335	-63.1 % $	14,193	-0.3 %
Adjusted Segment EBITDA Margin		6.9%		18.6%	-		8.4%	-
Technology
Revenues	$	100,713	$	100,933	-0.2 % $	90,618	11.1 %	10.7%
Adjusted Segment EBITDA	$	14,581	$	12,385	17.7 % $	15,366	-5.1 %
Adjusted Segment EBITDA Margin		14.5%		12.3%	-		17.0%	-
Strategic Communications
Revenues	$	81,208	$	86,637	-6.3 % $	73,102	11.1 %	9.7%
Adjusted Segment EBITDA	$	12,426	$	15,636	-20.5 % $	9,556	30.0 %
Adjusted Segment EBITDA Margin		15.3%		18.0%	-		13.1%	-

1. See "Financial Tables" and "End Notes: FTI Consulting Non-GAAP Financial Measures" for the reconciliations and definition of Adjusted EBITDA, which is a non-GAAP financial measures, to the most directly comparable GAAP financial measures, and for the definition of Adjusted EBITDA Margin, which is a non-GAAP financial measure.

3

1. Effective July 1, 2023, prior period segment information for the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments has been recast in this presentation to include the reclassification of a portion of the Company's health solutions practice in the Forensic and Litigation Consulting segment to the Company's realigned business transformation & strategy practice within the Corporate Finance & Restructuring segment.

Cash Position and Capital Allocation Snapshot

As of March 31, 2024, December 31, 2023 and March 31, 2023

All numbers in $000s, except for DSO		As of March 31, 2024		As of December 31, 2023		As of March 31, 2023
Cash and cash equivalents	$	243,960	$	303,222	$	238,539
Accounts receivable, net	$	1,157,465	$	1,102,142	$	988,144
Short-term investments (1)	$	- $	25,461	$	-
Days Sales Outstanding ("DSO") (2)		105		100		102
Net cash provided by (used in) operating activities	$	(274,818)	$	382,986	$	(254,206)
Purchases of property and equipment	$	(4,641)	$	(6,278)	$	(18,033)
Purchase and retirement of common stock	$	-	$	(20,982)	$	(20,982)
Total Debt	$	205,000	$	-	$	361,211
Free Cash Flow (3)	$	(279,459)	$	376,708	$	(272,239)

(1)

(2)

The balance is included in "Prepaid expenses and other current assets" on the Consolidated Balance Sheets.

DSO is a performance measure used to assess how quickly revenues are collected by the Company. We calculate DSO at the end of each reporting period by dividing net accounts receivable reduced by billings in excess of services provided, by revenues for the quarter, adjusted for changes in foreign exchange rates. We multiply the result by the number of days in the quarter.

1. See "Financial Tables" and "End Notes: FTI Consulting Non-GAAP Financial Measures" for the reconciliation and definition of Free Cash Flow, which is a non-GAAP

financial measure, to the most directly comparable GAAP financial measure.

4

Reconciliations of Net Income and Operating Income to Adjusted EBITDA

Three Months Ended March 31, 2024 and December 31, 2023

All numbers in $000s

Three Months Ended March 31, 2024

	Corporate Finance		Forensic and		Economic		Technology		Strategic		Unallocated		Total
		& Restructuring	Litigation Consulting		Consulting		Communications		Corporate
Net income													$	79,965
Interest income and other														(1,581)
Interest expense														1,719
Income tax provision														19,530
Operating income	$	71,919	$	31,967	$	12,865	$	10,939	$	11,474	$	(39,531)	$	99,633
Depreciation and amortization		2,473		1,629		1,285		3,642		882		513		10,424
Amortization of intangible assets		833		113		-		-		70		-		1,016
Adjusted EBITDA (1)	$	75,225	$	33,709	$	14,150	$	14,581	$	12,426	$	(39,018)	$	111,073

Three Months Ended December 31, 2023

	Corporate Finance		Forensic and		Economic		Technology		Strategic		Unallocated		Total
		& Restructuring	Litigation Consulting		Consulting		Communications		Corporate
Net income													$	81,633
Interest income and other														8,088
Interest expense														3,896
Income tax provision														21,404
Operating income	$	61,779	$	17,415	$	36,801	$	8,393	$	14,703	$	(24,070)	$	115,021
Depreciation and amortization		2,597		1,680		1,534		3,992		875		475		11,153
Amortization of intangible assets		1,010		152		-		-		58		-		1,220
Adjusted EBITDA (1)	$	65,386	$	19,247	$	38,335	$	12,385	$	15,636	$	(23,595)	$	127,394

6

(1)	See "End Notes: FTI Consulting Non-GAAP Financial Measures" for the definition of Adjusted EBITDA, which is a non-GAAP financial measure.

Reconciliations of Net Income and Operating Income to

Adjusted EBITDA

Three Months Ended March 31, 2023

All numbers in $000s

Three Months Ended March 31, 2023

	Corporate Finance	Forensic and Litigation		Economic		Technology		Strategic		Unallocated		Total
	& Restructuring (2)		Consulting (2)		Consulting		Communications		Corporate
Net income													$	47,547
Interest income and other														1,342
Interest expense														2,939
Income tax provision														14,974
Operating income	$	47,976	$	20,288	$	12,700	$	11,890	$	8,683	$	(34,735)	$	66,802
Depreciation and amortization		1,959		1,312		1,493		3,476		787		416		9,443
Amortization of intangible assets		1,912		184		-		-		86		-		2,182

Adjusted EBITDA (1)

$ 51,847

$21,784

$ 14,193

$ 15,366

$ 9,556

$

(34,319)

$

78,427

1. See "End Notes: FTI Consulting Non-GAAP Financial Measures" for the definition of Adjusted EBITDA, which is a non-GAAP financial measure.

(2)Effective July 1, 2023, prior period segment information for the Corporate Finance & Restructuring and Forensic and Litigation Consulting segments has been recast in this presentation to include the 7 reclassification of a portion of the Company's health solutions practice in the Forensic and Litigation Consulting segment to the Company's realigned business transformation & strategy practice within

the Corporate Finance & Restructuring segment.

Reconciliations of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow

Three Months Ended March 31, 2024, December 31, 2023 and March 31, 2023

		Three Months Ended		Three Months Ended		Three Months Ended
All numbers in $000s		March 31, 2024		December 31, 2023		March 31, 2023
Net cash provided by (used in) operating activities	$	(274,818)	$	382,986	$	(254,206)
Purchases of property and equipment		(4,641)		(6,278)		(18,033)
Free Cash Flow (1)	$	(279,459)	$	376,708	$	(272,239)

(1)

See "End Notes: FTI Consulting Non-GAAP Financial Measures" for the definition of Free Cash Flow, which is a non-GAAP financial measure.

8

End Notes: FTI Consulting Non-GAAP Financial Measures

In this presentation, we sometimes use information derived from consolidated and segment financial information that may not be presented in our financial statements or prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Certain of these measures are considered "non-GAAP financial measures" under the Securities and Exchange Commission ("SEC") rules. Specifically, we have referred to the following non-GAAP financial measures in this presentation:

Adjusted EBITDA Adjusted EBITDA Margin Adjusted Net Income

Adjusted Earnings per Diluted Share Free Cash Flow

We have included the definitions of Segment Operating Income and Adjusted Segment EBITDA, which are GAAP financial measures, below in order to more fully define the components of certain non-GAAP financial measures in this presentation. We define Segment Operating Income as a segment's share of consolidated operating income. We use Segment Operating Income for the purpose of calculating Adjusted Segment EBITDA. We define Adjusted Segment EBITDA as a segment's share of consolidated operating income before depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges and goodwill impairment charges. We use Adjusted Segment EBITDA as a basis to internally evaluate the financial performance of our segments because we believe it reflects current core operating performance and provides an indicator of the segment's ability to generate cash.

We define Adjusted EBITDA, which is a non-GAAP financial measure, as consolidated net income before income tax provision, other non-operating income (expense), depreciation, amortization of intangible assets, remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, gain or loss on sale of a business and losses on early extinguishment of debt. We believe that this non-GAAP financial measure, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with a more complete understanding of our operating results, including underlying trends. In addition, EBITDA is a common alternative measure of operating performance used by many of our competitors. It is used by investors, financial analysts, rating agencies and others to value and compare the financial performance of companies in our industry. Therefore, we also believe that this non-GAAP financial measure, considered along with corresponding GAAP financial measures, provide management and investors with additional information for comparison of our operating results with the operating results of other companies. We define Adjusted EBITDA Margin, which is a non-GAAP financial measure, as Adjusted EBITDA as a percentage of total revenues.

We define Adjusted Net Income and Adjusted Earnings per Diluted Share ("Adjusted EPS"), which are non-GAAP financial measures, as net income and earnings per diluted share ("EPS"), respectively, excluding the impact of remeasurement of acquisition-related contingent consideration, special charges, goodwill impairment charges, losses on early extinguishment of debt, non-cash interest expense on convertible notes and the gain or loss on sale of a business. We use Adjusted Net Income for the purpose of calculating Adjusted EPS. Management uses Adjusted EPS to assess total Company operating performance on a consistent basis. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results and GAAP financial measures, provide management and investors with an additional understanding of our business operating results, including underlying trends.

We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by (used in) operating activities less cash payments for purchases of property and equipment. We believe this non-GAAP financial measure, when considered together with our GAAP financial results, provides management and investors with an additional understanding of the Company's ability to generate cash for ongoing business operations and other capital deployment.

Non-GAAP financial measures are not defined in the same manner by all companies and may not be comparable with other similarly titled measures of other companies. Non- GAAP financial measures should be considered in addition to, but not as a substitute for or superior to, the information contained in our Condensed Consolidated Statements of Comprehensive Income and Condensed Consolidated Statements of Cash Flows.

9