FTI Consulting (FCN) is under pressure following its first-quarter 2026 earnings update (quarter ended March 31, 2026). While revenue rose 9.5% year over year to $983.3 million and EPS increased to $1.90, investors are reacting to a notable step-down in profitability as costs rose and last year’s period benefited from legal settlement gains.

The quarter’s headline was margin compression. Adjusted EBITDA fell to $96.8 million, and adjusted EBITDA margin dropped to 9.8% from 12.8% in the prior-year quarter as direct costs and SG&A increased, alongside higher interest expense and a higher effective tax rate; net income declined to $57.6 million from $61.8 million despite higher revenues. This mix—growth but lower operating leverage—often drives a “sell the quality” reaction in professional-services names when the market is focused on margins and forward cost visibility.

FTI reaffirmed full-year 2026 guidance, which can be supportive, but it did not eliminate the near-term margin concerns created by the quarter’s expense/tax dynamics. The company also continued returning cash to shareholders, repurchasing 787,098 shares for $126.8 million at an average price of $161.11 during Q1, with roughly $364.9 million still authorized—yet buybacks were not enough to counter the market’s focus on the weaker profitability profile this quarter.