Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How confident are you in the near-term pipeline, especially with the chemicals industry showing improvement? A: Catherine Corrigan, President and CEO, expressed confidence in the opportunities, noting strong demand in utilities and digital health technologies. Despite a 5% to 6% deficit in full-time equivalents (FTEs) and tough comparisons from Q1 2024, they expect sequential growth in headcount and a strong pipeline into Q2.
Q: Can you elaborate on the performance and outlook of the energy infrastructure business? A: Catherine Corrigan explained that the energy sector, including utilities and generation, is robust in both proactive and reactive services. Proactive work involves risk assessments for utilities, while reactive work includes failure analysis and disputes in oil, gas, and renewables. The sector is expected to remain strong due to ongoing infrastructure investments.
Q: What is the extent of Exponent's work with regulatory bodies, and what percentage of revenue does it represent? A: Richard Schlenker, CFO, stated that about 10% of their work involves regulatory processes, split between proactive and reactive services. This includes chemical registration and FDA processes, with about 5% to 7% of revenue coming from U.S. regulatory engagements.
Q: How is Exponent addressing the staffing constraints to accelerate revenue growth? A: Catherine Corrigan noted that while recruiting takes time, they are aligning recruitment with demand to ensure sustainable growth. They aim for 1% to 2% quarterly headcount growth, which aligns with their long-term growth targets, despite starting the year with a 5% to 6% deficit.
Q: Can you provide details on the size and growth of the chemicals business? A: Richard Schlenker mentioned that the chemicals business is in the low double digits as a percentage of overall business, with a growth rate in the low to mid-teens year-over-year for Q4. The activity is driven by long-term litigation and proactive work, indicating a sustained rebound.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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