Exponent Inc (NASDAQ:EXPO) reported its fourth-quarter and full-year fiscal 2025 financial results after the market close on February 5, 2026. The engineering and scientific consulting firm delivered a quarter of solid top-line growth and earnings that modestly exceeded analyst expectations. However, the initial market reaction in after-hours trading appeared muted, with the stock price holding essentially flat.
Earnings and Revenue Versus Estimates
The company's performance for the quarter ended January 2, 2026, presented a mixed picture against Wall Street forecasts. Exponent reported revenues before reimbursements of $129.4 million, which represents a 4.5% increase over the prior-year period. However, this figure came in below the analyst consensus estimate of approximately $133.5 million for the quarter.
On the profitability front, the company outperformed expectations. Exponent posted net income of $24.8 million, resulting in diluted earnings per share (EPS) of $0.49. This EPS result was 1.7% above the analyst consensus estimate of $0.482.
Key quarterly financial highlights include:
- Revenue (Total): $147.4 million, up 7.8% year-over-year.
- Revenue (Before Reimbursements): $129.4 million, up 4.5% year-over-year.
- GAAP EPS: $0.49, compared to $0.46 in Q4 2024.
- EBITDA: $34.7 million, or 26.8% of revenues before reimbursements.
For the full fiscal year 2025, revenues before reimbursements grew 3.5% to $536.8 million, while net income was $106.0 million, or $2.07 per diluted share.
Management Commentary and Business Outlook
In the earnings release, President and CEO Dr. Catherine Corrigan highlighted a "strong finish to 2025," attributing performance to the strength and diversification of the company's portfolio. Growth was driven by demand in consumer electronics user research, utility risk management, and reactive engagements like failure analysis across energy, construction, and transportation.
Looking ahead, management provided formal guidance for the coming year. For the first quarter of fiscal 2026, Exponent anticipates:
- Revenues before reimbursements to grow in the high-single digits.
- EBITDA margin to be between 27.5% and 28.5% of revenues before reimbursements.
For the full fiscal year 2026, the company expects:
- Revenues before reimbursements to also grow in the high-single digits.
- EBITDA margin to range from 27.6% to 28.1%.
This outlook for high-single-digit revenue growth appears generally aligned with the broader analyst expectation for the full year 2026. CFO Richard Schlenker expressed encouragement by market opportunities and an expectation for "accelerated year-over-year growth."
Capital Allocation and Balance Sheet
Exponent continued its shareholder return policy alongside the earnings announcement. The board approved an increase in the quarterly cash dividend from $0.30 to $0.31 per share, payable in March 2026. The company also reiterated its intent to continue paying quarterly dividends.
During fiscal 2025, Exponent returned significant capital to shareholders through:
- $61.5 million in dividend payments.
- $97.8 million in common stock repurchases.
The company ended the year with a strong balance sheet, holding $221.9 million in cash and cash equivalents.
Market Reaction and Forward Look
The stock's flat performance in after-hours trading suggests investors are digesting the earnings beat against the revenue miss. The company's positive outlook for accelerating growth in 2026 may be balancing concerns about the top-line shortfall in Q4. The raised dividend signals continued confidence in the business's cash-generating ability.
Investors will likely focus on the company's ability to meet its high-single-digit growth targets in the coming quarters, especially within its core engineering segment, which represents approximately 85% of revenue.
For a detailed breakdown of future earnings estimates and past performance, you can view more on Exponent's earnings and estimates page.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any security. Investing carries risks, including the potential loss of principal.
