FTI Consulting falls as Q1 margin pressure outweighs revenue growth and guidance reaffirmation
FTI Consulting shares slid after Q1 2026 results highlighted margin pressure despite 9.5% revenue growth to $983.3 million and EPS of $1.90. Investors focused on lower profitability, with adjusted EBITDA margin falling to 9.8% and net income down 6.8% year over year.
1. What’s driving the move
FTI Consulting (FCN) is trading lower as the market digests its first-quarter 2026 report, which showed strong top-line growth but weaker profitability. Revenue rose 9.5% year over year to $983.3 million and EPS increased to $1.90, but net income declined to $57.6 million from $61.8 million a year ago, reinforcing concern that costs are rising faster than profits in the near term. (ir.fticonsulting.com)
2. The pressure point: margins and costs
The key negative was profitability: adjusted EBITDA fell to $96.8 million and adjusted EBITDA margin compressed to 9.8% from 12.8% in the prior-year quarter. Management attributed the year-over-year net income decline primarily to higher direct costs and SG&A, plus higher interest expense and a higher effective tax rate (with prior-year legal settlement gains also creating a tougher comparison). (ir.fticonsulting.com)
3. Guidance and segment signals
FTI reaffirmed full-year 2026 guidance for revenue of $3.940 billion to $4.100 billion and EPS of $8.90 to $9.60, which helped limit the fundamental reset but did not fully offset investor concern about near-term margin volatility. Segment results showed Corporate Finance as the growth engine (revenue up 19.2% to $409.5 million), while Economic Consulting was a drag on profitability with negative adjusted segment EBITDA in the quarter. (ir.fticonsulting.com)