Exponent, Inc. Reports Q2 2025 Revenue Increase but Net Income Decline

Exponent, Inc. reported its financial results for the second quarter of 2025, revealing a slight increase in revenues but a decline in net income compared to the same period last year. The company generated total revenues of $141.96 million, a 1% increase from $140.54 million in the second quarter of 2024. Revenues before reimbursements also saw a marginal rise, reaching $132.87 million, up from $132.43 million. However, net income decreased by 9% to $26.55 million, down from $29.23 million, resulting in diluted earnings per share of $0.52, compared to $0.57 in the prior year.

The decrease in profitability was attributed to several factors, including increased compensation expenses due to annual salary adjustments, higher operating costs related to the extension of a land lease in Arizona, and a reduced tax benefit from stock-based awards. Operating expenses rose significantly, totaling $124.79 million, compared to $104.79 million in the same quarter last year, driven by a 22.7% increase in compensation and related expenses. The company also reported a decrease in billable hours, which fell by 6% to 359,000, and a decline in utilization rates to 72% from 75%.

In terms of operational metrics, Exponent's Engineering and other scientific segment experienced a 2.1% increase in revenues, driven by higher billing rates despite a decrease in billable hours. Conversely, the Environmental and health segment saw a 4.9% decline in revenues, attributed to reduced activity in proactive projects. The company maintained a technical full-time equivalent employee count of 958, down 2% from the previous year, reflecting a strategic focus on managing costs while still addressing client needs.

Looking ahead, Exponent remains committed to enhancing its engineering and scientific capabilities to meet evolving market demands. The company plans to continue investing in its workforce and infrastructure while managing operating expenses. Exponent's cash and cash equivalents stood at $231.80 million as of July 4, 2025, down from $258.90 million at the beginning of the fiscal year, indicating a focus on maintaining liquidity amid increased capital expenditures and stock repurchase activities. The company also announced a cash dividend of $0.30 per share, payable on September 19, 2025, reflecting its ongoing commitment to returning value to shareholders.