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Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE. Exponent (EXPO) drew fresh attention after reporting second quarter 2026 results with higher sales, revenue, net income and earnings per share compared with a year earlier, alongside raised full year revenue growth guidance. See our latest analysis for Exponent. At a share price of $67.52, Exponent has seen an 8.73% 1 month share price return and an 18.06% 3 month share price return. In contrast, the 1 year total shareholder return declined 1.45% and the 5 year total shareholder return declined 37.42%. This suggests that recent momentum contrasts with weaker longer term outcomes as investors react to stronger earnings, higher revenue guidance and ongoing buybacks. If Exponent’s recent move has you thinking about where else growth could show up next, it may be worth scanning 19 top founder-led companies After Exponent’s sharp rebound yet mixed long term track record, the gap between its current US$67.52 share price, analyst targets and intrinsic value estimates matters more than the headline move. Where does a reasonable fair value range actually sit now? At $67.52, the most followed narrative for Exponent points to a higher fair value anchored at $81.67, with that gap explained by specific growth and profitability assumptions. Read the complete narrative. Want to see what sits behind that $81.67 fair value for Exponent? The narrative leans on steady top line expansion, firm margins and a richer future earnings multiple. Result: Fair Value of $81.67 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Exponent’s narrative can be challenged if utilization stays under pressure or if regulatory and chemical sector softness persists and holds back revenue growth and margins. Find out about the key risks to this Exponent narrative. The analyst narrative and fair value estimate point to Exponent trading below an $81.67 target. The SWS DCF model goes much further, with an estimated value of $171.76 per share, which implies Exponent could be trading at a large discount. Which view appears more realistic to you at this time? Look into how the SWS DCF model arrives at its fair value. If this Exponent story feels balanced between caution and optimism, now is the time to review the key details yourself and decide what stands out most to you. To see both sides set out clearly, take a look at the 5 key rewards and 1 important warning sign. If Exponent has sharpened your focus, do not stop here. Fresh ideas often come from comparing different stocks side by side with clear data and consistent criteria. Spot potential value opportunities early by scanning 51 high quality undervalued stocks that may align with your expectations on quality and price. Strengthen your focus on resilience and capital protection by checking out 83 resilient stocks with low risk scores that score well on stability. Stay ahead of the crowd by searching through the screener containing 21 high quality undiscovered gems before attention and liquidity shift elsewhere. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include EXPO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, July 30, 2026 at 4:30 p.m. ET Managing Director - Joni Konstantelos Chief Executive Officer - Catherine Corrigan President - John Pye Executive Vice President - Rich Schlenker Chief Financial Officer - Eric Anderson Operator: Good day, and welcome to the Exponent, Inc. Second Quarter 2026 Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Joni Konstantelos, Managing Director. Please go ahead. Joni Konstantelos Thank you, operator. Good afternoon, ladies and gentlemen. Thank you for joining us on Exponent's Second Quarter 2026 Financial Results Conference Call. Please note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website at www.investors.exponent.com. This conference call is the property of Exponent, and any taping or other reproduction is expressly prohibited without prior written consent. Joining me on the call today are Dr. Catherine Corrigan, Chief Executive Officer; John Pye, President; Rich Schlenker, Executive Vice President; and Eric Anderson, Chief Financial Officer. Before we start, I would like to remind you that the following discussion contains forward-looking statements, including, but not limited to, Exponent's market opportunities and future financial results that involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in Exponent's periodic SEC filings, including those factors discussed under the caption Risk Factors in Exponent's most recent Form 10-Q. The forward-looking statements and risks in this conference call are based on current expectations as of today, and Exponent assumes no obligation to update or revise them, whether as a result of new developments or otherwise. Now I will turn the call over to Dr. Catherine Corrigan, Chief Executive Officer. Catherine? Catherine Corrigan: Thank you, Joni, and thank you, everyone, for joining us today. I will start off by reviewing our second quarter 2026 business performance. John will share his perspective on innovation and market trends. Eric will then provide a more detailed review of our financial results and outlook, and we will then open the call for questions. Exponent delivered another strong quarter with double-digit growth in revenues and earnings, reflecting the continued demand for our specialized expertise across industries. Our proactive work experienced strong growth in the quarter, led by demand for user research studies as clients accelerate the development of AI-enabled products across an increasingly diverse array of hardware form factors and applications with engagements continuing to expand in scope, scale and complexity. Proactive activity was also supported by increased risk management and infrastructure-related engagements in the utility sector. Reactive work grew with strong demand for our dispute-related expertise from the consumer products, chemicals and transportation industries. Turning to these engagements in more detail. Our proactive user research work continues to grow more diverse and complex, both across our client base and across the breadth of products and technologies that we support. This quarter also benefited from a large study that drove higher-than-expected revenue and utilization. These engagements increasingly call for a combination of human factors, biomechanics, engineering and data science expertise to elucidate how people interact with AI-enabled technologies in situations where standard research approaches are woefully inadequate. While user research is often thought of as recruiting participants and gathering feedback, our work is far more sophisticated. We identify and articulate the right underlying scientific question, design a bespoke methodology capable of answering it, collect high-quality data in the real-world environment and interpret the results within a broader technical, regulatory and business context. The differentiated value lies not in data collection alone, but in the scientific judgment and multidisciplinary expertise required to design the study, execute the unique methodology and generate reliable, actionable conclusions. As companies compete aggressively to integrate AI into an expanding array of smart devices, including glasses, immersive technologies, health and wellness wearables and more, the technical safety and usability challenges increased significantly and Exponent's differentiated position grows. We also saw increased demand for risk management and infrastructure-related engagements in the utility sector as clients evaluate the resilience and reliability of critical systems amid rising power demand, more extreme weather events and the growing complexity of the electric grid. Turning to our reactive engagements. We saw strong demand for dispute and failure analysis-related work across a range of industries, including consumer products, chemicals and transportation. We helped consumer products clients evaluate product safety and recalls, investigate incidents and address disputes as manufacturers face challenges surrounding performance, reliability and quality across an increasingly complex set of technologies. In the chemical sector, we saw growing activity evaluating chemicals of concern ranging from legacy substances to emerging compounds. And in transportation, we saw greater failure analysis work related to advanced driver assistance systems as clients address performance, safety and reliability challenges. As the pace of innovation accelerates and the consequences of failure rise, clients increasingly rely on Exponent's multidisciplinary ecosystem and long-standing reputation in failure analysis to address complex novel challenges. A recent engagement involving a satellite performance issue illustrates this demand. The client required deep engineering expertise to investigate performance and risk in a highly technical and uncertain environment. This level of mastery across disciplines, whether applied to space systems, AI, energy storage, power infrastructure, cybersecurity or other domains, uniquely positions Exponent to help clients navigate both today's challenges and the inevitable disruptions that will accompany future technological advances. We remain confident in the durability and long-term growth potential of our reactive work as organizations will continue to rely on independent, science-based expertise when critical systems fail or perform unexpectedly. Our results during the quarter reflect several powerful long-term trends shaping demand for Exponent services, including rapid technological innovation, increasing complexity, growing energy demand, investments in resilient power and digital infrastructure and rising expectations for safety, reliability and performance. Clients turn to Exponent when they face high consequence challenges involving new technologies, complex systems and the interaction between people and products. Our multidisciplinary teams provide independent science-based insights that help clients innovate with confidence, reduce risk and make better decisions. Nowhere is this more relevant today than in the accelerating importance of artificial intelligence in products, which continues to be a significant force shaping demand across our business. I'd like to turn it over to our President, John Pye, to share his perspective on this shift and where he sees innovation heading across our markets. John? John Pye: Thank you, Catherine. Across industries, we're seeing an accelerating shift. Artificial intelligence is expanding beyond the digital world and into physical products and systems that operate in the real world, whether that's a vehicle, a wearable device, a piece of infrastructure or a robotic system. As that shift unfolds, the standards these systems are held to is also changing. The question is no longer simply whether a product functions as designed in a controlled setting, but whether it can be trusted to perform safely and reliably in the unpredictable conditions of everyday life, including the edge cases and complex interactions that fall outside of prior experience. This is where the human side of the equation becomes just as important as the technology itself. As AI becomes embedded in the devices and systems people rely on throughout their daily lives, things like walking, driving, working or simply going about routine tasks at home, it inevitably competes for people's attention alongside everything else happening in their environment. There's a fine line between technology that supports human performance and technology that, if not designed thoughtfully, can degrade it. Getting that balance right requires specialized expertise across multiple disciplines. Exponent has been at the forefront of this kind of human-machine interaction work for decades. It's not new for us, and it's an area where our differentiated expertise is increasingly important as more of our clients grapple with these same questions across a widening range of products and applications. We're also seeing the same dynamic extend into new areas. They are still in relatively early stages, things like autonomous vehicles, robots in the wild and the infrastructure that supports them, such as data centers and battery storage systems. These are areas where complexity is only increasing and where our multidisciplinary approach, spanning: engineering, data sciences, human factors and the physical sciences position us well to support our clients as they navigate what comes next. I'll now turn the call over to Eric, to provide more detail on our second quarter results as well as discuss our outlook for the third quarter and the full year 2026. Eric? Eric Anderson: Thank you, John, and good afternoon, everyone. Let me start by saying all comparisons will be on a year-over-year basis, unless otherwise noted. For the second quarter of 2026, total revenues increased 21% to $171.6 million and revenues before reimbursements or net revenues, as I will refer to them from here on, increased 12% to $148.9 million. Total revenues grew faster than net revenues due to a higher level of reimbursable expenses that are included in total revenues. These reimbursable expenses were due to an increase in user research studies. Because reimbursable expenses can fluctuate quarter-to-quarter based on the mix and nature of client engagements, we believe net revenue is a more meaningful measure of our underlying performance. As Catherine mentioned, our results this quarter benefited from a large user research study that represented approximately 4% of net revenues, which was higher than the 2% of net revenues that we expected from this project. Net income for the second quarter increased 11% to $29.4 million as compared to $26.6 million during the same period in 2025. Diluted earnings per share increased 15% to $0.60 per diluted share as compared to $0.52 per diluted share in the same period last year. Over the last 12 months, we utilized $211 million for repurchases of our common stock, which resulted in a 5% decrease in our average diluted shares outstanding to 49 million shares during the second quarter of 2026, as compared to $51.5 million during the same period in 2025. These repurchases also reduced our interest income. Exponent's consolidated tax rate was 27.9% in the second quarter of 2026, unchanged from the same period in 2025. The tax impact associated with share-based awards was immaterial in both the second quarter of 2026 and 2025. EBITDA for the quarter increased 16% to $42.7 million, producing a margin of 28.7% of net revenues as compared to $37 million or 27.8% of net revenues in the second quarter of 2025. Billable hours in the second quarter of 2026 were approximately 390,000, an increase of 8% year-over-year. Average technical full-time employees in the second quarter were 1,012, up 6% as compared to the same period in 2025. This increase was due to our recruiting and retention efforts. Utilization in the second quarter was 74%, up from 72% in the same period of 2025. The realized rate increase during the second quarter of 2026 was approximately 4%. In the second quarter, compensation expense after adjusting for gains and losses in deferred compensation increased 10%. Included in total compensation expense is a deferred compensation gain of $11.8 million as compared to a gain of $17.0 million in the same period of 2025. As a reminder, gains and losses in deferred compensation are offset in miscellaneous income and have no impact on the bottom line. Stock-based compensation expense in the quarter was $6.7 million as compared to $5.2 million during the same period in 2025. Other operating expenses in the second quarter were up 7% to $12.9 million due to investments in our corporate infrastructure. Included in other operating expenses is depreciation and amortization expense of $2.7 million. G&A expenses increased 20% to $7.4 million for the second quarter. The increase in G&A expenses was primarily due to increases in travel and yields associated with business development, recruiting and people development activities and an increase in relocation costs. Interest income decreased to $716,000 for the second quarter, driven by a decrease in cash. Regarding capital allocation, during the quarter, capital expenditures were $1.8 million. We distributed $14.8 million to shareholders through dividend payments while repurchasing $67.4 million of our common stock at an average price of $59.88. Over the past 12 months, we returned a combined $272 million to shareholders, which included $211 million in share repurchases and $61 million in dividend payments. Additionally, our Board approved a $50 million increase in our current stock repurchase program, which reflects our conviction in Exponent's long-term growth trajectory. Turning to our segments. Exponent's Engineering and Other Scientific segment represented 85% of net revenues in the second quarter. Net revenues in this segment increased 13%, driven by strong user research study activity in consumer electronics, risk management and infrastructure-related work in the utility sector and reactive engagements across the consumer products, chemicals, and transportation industries. Exponent's Environmental and Health segment represented 15% of net revenues in the second quarter. Net revenues in this segment increased 9%, driven by engagements evaluating the impact of chemicals on human health and the environment. Turning to our outlook. Looking to the second half of the year, we expect to generate quarterly net revenue growth on top of the double-digit growth we delivered in the third and fourth quarters of 2025, when adjusted for the extra week in Q4 of fiscal 2024. For the third quarter, as compared to 1 year prior, we expect net revenues to be up 8% to 10% and EBITDA to be 28.0% to 28.5% of net revenues. For 2026, we are raising our full year guidance. We now expect net revenues to grow 9% to 10% and EBITDA to be 27.8% to 28.1% of net revenues. We expect our average technical full-time equivalent employees to increase approximately 4% to 5% year-over-year in the third quarter of 2026, and 4.5% to 5% for the full year. We expect utilization in the third quarter to be 74% to 75% as compared to 74% in the same quarter last year. We continue to expect the full year utilization to be 72.5% to 73% as compared to 72.5% in 2025. We expect the year-over-year realized rate increase to be 3% to 4% in the third quarter of 2026 and 3.5% to 4% for the full year 2026. For the third quarter, we expect stock-based compensation to be $6.5 million to $6.7 million. For the full year of 2026, we expect stock-based compensation to be $27.9 million to $28.4 million. We continue to believe that our stock-based compensation program is a key element to how we effectively attract, motivate and retain our top talent. For the third quarter, we expect other operating expenses to be $13.0 million to $13.5 million. For the full year, we expect other operating expenses to be $52.2 million to $52.7 million. For the third quarter, we expect G&A expenses to be $8.2 million to $8.7 million. For the full year, we expect G&A expenses to be $29.5 million to $30 million. We expect interest income to be $500,000 to $700,000 per quarter for the remainder of 2026. In addition, we anticipate miscellaneous income to be approximately $300,000 per quarter for the remainder of 2026. For the remainder of 2026, we do not anticipate any additional tax benefit associated with share-based awards. For the third quarter of 2026, we expect our tax rate to be approximately 28% as compared to 27.4% in the same quarter 1 year ago. For the full year of 2026, the tax rate is expected to be 28.5% as compared to 28.0% in 2025. Capital expenditures for the full year 2026 are expected to be $12 million to $14 million. We're pleased with our strong second quarter execution and confident in the underlying market dynamics that continue to support growth across our business. I will now turn the call back to Catherine, for closing remarks. Catherine Corrigan: Thank you, Eric. Exponent continues to benefit from powerful long-term trends that are increasing both the pace of innovation and the complexity of challenges facing our clients. As emerging technologies move from concept to real-world deployment, the need for independent science-based expertise becomes increasingly important. Whether helping clients innovate with confidence, understand how people interact with new technologies, strengthen critical infrastructure or investigate failures, Exponent is uniquely positioned at the intersection of technology, people and high-consequence decision-making. Supported by our exceptional talent, long-standing reputation and differentiated capabilities, we remain confident in our strategy and our ability to create long-term value for our shareholders. Operator, we are now ready for questions. Operator: The first question today comes from Andrew Nicholas with William Blair. Andrew Nicholas: I'm sorry. Can you hear me? Eric Anderson: Yes. Catherine Corrigan: Yes, we can now. Andrew Nicholas: I wanted to start just in terms of the AI impact you've spent this quarter and last quarter kind of talking about all the different demand drivers that are potentially impacted positively by AI. I'm curious to what extent we should think about that being a proactive driver at the moment versus reactive? Or are you already seeing it kind of bubble up in litigation as well? Catherine Corrigan: Yes. Thanks, Andrew. It's absolutely going to be in both the reactive and proactive domains. One of the places in reactive where we are probably seeing it the most is around advanced driver assistance technologies. All kinds of questions that are arising in automotive product liability litigation around the performance of those systems. And it's really growing in terms of the kinds of sort of allegations and design pieces that we're looking at. It's not just the sensors, it's not just the performance of the automated braking system, but it's now even going into the performance of the driver distraction and driver monitoring systems. So that human-machine interface is becoming very important. Another area around reactive with an AI driver is going to be the data center work, the sort of digital infrastructure side of the AI equation. We're seeing failure analysis types of investigations in so many domains that apply to those data centers. It could be the cooling systems and their performance or contaminants in cooling systems, it's the power inverter performance, it's the battery energy storage system that either is it meeting code or was there a fire? Is it performing? So reactive for sure. And then, of course, that proactive side, particularly strong in the quarter around the user research domain. And these are products and systems that are having AI embedded into them. So it's both the sort of physical product aspect of the human interface and also that performance of the algorithm that is at least in part dictated by the human factors piece. So it is a diverse set of things that we're doing that really covers both the reactive and proactive domains. Andrew Nicholas: For my follow-up, you said in your release and in your prepared remarks, you talked about the scope, scale, and complexity of your work increasing. It's my impression that tends to benefit Exponent as one of the only, if not the only kind of science and engineering firm that has that capability and the breadth of capability. And so I'm wondering, one, competitively, if that's becoming more and more of an advantage for you? And relatedly, is that a potential opportunity on the pricing front as your differentiation, and scale and multidisciplinary expertise becomes kind of more evident relative to your peers? Catherine Corrigan: Yes. Thanks, Andrew. Particularly when we talk about that scope, scale and complexity in the user research domain, that's a place where we are really seeing that competitive moat kind of broadening is what I would describe. And look, there will always be a commodity layer of things that are around data collection and surveys and things like that. But as these products become more complex, as the human machine interface becomes more challenging and sort of never seen before, what we offer is really -- it's not just like it's an increment over what the rest of the so-called competitors are offering. It truly is an offering unto itself. When you think about what we are able to do that is designing the bespoke experiment, defining what that research question ought to be and getting all the way through to the regulatory and legal and business implications of that. We are hiring very aggressively in this area, our human factors expertise, biomechanics, data science and the engineering side. So we differentiate in that way. And I absolutely am with you that the offering is becoming more and more distinct. So it's important that we be delivering that value to the client and that we reflect the value that we are delivering in our pricing. I think as the aggressiveness of the competition that we see in the industry landscape, is helping in that sense because there is a speed of innovation that our clients are trying to achieve, and that helps us really articulate our value proposition as well. So all in all, I think this will be a very healthy area for us to grow. Operator: The next question comes from Tomo Sano with JPMorgan. Tomohiko Sano: In your prepared remarks, you highlighted strong AI-enabled demand. So looking back on the first half, could you help us quantify what drove the surge like more engagement versus the larger engagements? And I wanted to get more color on like is that meaning like more utilization too? If you could talk about that in the first half as well as some expectation in second half, please? Eric Anderson: Yes, Tomo, the user experience studies were a driver of growth in the second quarter. We talked a little bit about the large study. So we had expected that to be 2% of our net revenues. That study expanded in scope during the quarter and ended up representing about 4% of our net revenues. It's a study that continues. It moderated near the end of the quarter. So we expect to continue the next part of that study at a level of about 2% of revenues through the remainder of the year. So that's an area that -- it was one piece of this sort of user study area. It's expanded not only in size, but the number of clients that we do the studies for, the number of projects has expanded and the number of types and complexity of devices has changed. So we're doing it now for more clients over more studies over a broader array of devices that our clients are looking to bring to the market. Tomohiko Sano: And then on the follow-up utilization assumptions, if demand is surging, yet utilization assumption looks conservative [Technical Difficulty] half. What is the primary reason? Any seasonality factors, headcount ramp, mix onboarding and just conservatism? And if you could give us more color, I appreciate it. Eric Anderson: Yes, definitely. A little bit to your last question, Tom, on the utilization, those studies did drive our higher utilization. So the 74% utilization in the second quarter did benefit from those studies and that large study in particular. As far as the seasonality, the second quarter and third quarter are very similar as far as available working days, vacation holidays. So the 74% to 75% that we're expecting in the third quarter is a tick up from the 74% that we experienced in the second quarter. And then as you get into the fourth quarter, that one is significantly impacted by available working days with the holidays, and vacations and all that. So our standard utilization is lower in the fourth quarter every year. Operator: The next question comes from Tobey Sommer with Truist. Tobey Sommer: Thank you. I wanted to ask you which industries and verticals have the greatest share of proactive work now? And do you expect the industries with the most proactive work to change over the next 12, 24 months? Catherine Corrigan: Yes. Tobey, I can chime in here and Eric can add to it. So on our proactive side, consumer electronics is going to be one of the larger contributions as is the chemicals industry. In consumer electronics, as you know, we've got the user research side of what we do. We also have the hardware-related work that we do for that industry. On the chemical side, it's really the proactive regulatory work for the industrial chemical manufacturers, the agricultural chemical manufacturers, biocides, pesticides and so forth. These are both areas where we saw good growth in the quarter. The third vertical I would highlight is going to be the utilities space. This is where our risk modeling work comes in on the proactive side. So those are the 3, I would say, dominant industries there. And look, we've seen strong market drivers in all 3 of those areas over time. And in my view, those will continue to be the areas that will drive more of the proactive growth. There are regulatory issues in the transportation industry that we do more of today than we did a number of years ago. As the automated vehicle population increases, the regulators are becoming much more active and so forth. So there is growth opportunity there. Medical devices is the other place where regulatory is a piece of what we do. And again, you've got that complexity of products, you've got the safety-critical nature of those products, you've got the embedding of AI into those products, that makes the regulatory environment even more complex. So drivers across regulation, drivers across risk in asset-heavy industries and the driver around AI and innovation. John, you may want to add a little bit to that? John Pye: Yes. So I started the company in '99, and there were traditional practices that maybe were heavily exposed on the reactive side where an incident had to occur before you called us, human factors, biomechanics, things like that. But over the years, that has changed. And as those issues become more important in the development of your product and we're engaged earlier in the life cycle during those development stages, there could easily be regulatory issues, there might be issues around sort of the technology integration itself. You see practices like that, which historically were almost completely reactive really be a blend. And I think that is marching really through our organization as all of the disciplines that we offer become increasingly important to delivering that last nines of reliability or performance or whatever you're after as you're getting that next step out of your device or your product that you're working on or system. So I don't think it's a static answer here. I think there is a trend to having both a reactive and a proactive component in really everything that we do. But Catherine is entirely correct that the current snapshot that I think the 3 verticals you mentioned are probably the strongest ones as opposed to [ proactive one ]. Richard Schlenker: I think that what we have seen in history is where there is a drive for the consequence of safety or requirement for reliability increases, there's a higher demand for us to do that work upfront because the consequences on the back end are so severe. And clearly, that is what's driven work in the consumer electronics area, where there was a real drive not only for performance and reliability as those devices were in the wild, but you had an innovation drive going on over the last several decades around energy storage technologies in those devices, which we all saw across the world when Samsung Note 7 had their issue, but clients had been trying to address those issues over time. So as we look and turn forward and we think about the complexity of the device that we're looking for people to wear on their bodies on a continuous basis, so that they can continuously interact with these AI applications, we're talking about putting batteries on people's heads and other parts of their bodies, having them sleep with them and do it, these things will evolve. As we bring robotics into homes and interfacing with people throughout their daily lives, we not only have the risk of injuries from mechanical devices, but also from the energy that's driving those devices in the field. So I think that there will be in Exponent's world, sometimes we have to wait for people to pay the price on the failures and then get commitment to go to the gym, as I say, instead of the cardiologists. But I think these things are coming for us in a number of industries. Tobey Sommer: I wanted to see if I could get your perspective on reshoring to the United States as well as the evolution of data centers, which that's a theme that's been around now for several years, but the scope and scale of what is being discussed and planned right now is -- represents a material change, I think. And how do those trends interact with the company and impact your business, maybe create opportunities? John Pye: Yes. I would expand the reshoring comment to just the supply chain changes in general. When you are on the data center side, buying up every connector that there is and you've got to go to your second choice and your third choice, it might be related to reshoring or it might be just diversifying what that supply chain looks like. That drives opportunities for us to do the technology due diligence as you're maybe trying to do things on an accelerated time scale, the failure rates usually in those kind of circumstances go up, which is then a driver for us to come in and try to explain what the science and engineering is behind that. There are regulatory demands. I have lots of exposure on the government side. And as you see things like drones having to be manufactured in the U.S. and things like that, that puts pressure on, well, where are you getting the motors for those drones from and looking at what that does for the local industry base. And there's opportunities in that as our clients come to us and say, help us manage that change, help us understand the impact of bringing some new supplier onto our platform. So onshoring, yes, supply chain variability in general, probably even larger. When you're talking about data centers, I think it's sort of the same scenario maybe, but with gasoline poured all over it to really accelerate what's going on there. The capital influx that are driving the infrastructure spend from the building and where you're getting the concrete from all the way to the plating on the connector. All of those issues as you are continuing to invest, really touch on a huge diversity of what Exponent has to offer across really all of our disciplines. So as you look at the increased capital spend there and you look at the claims of getting that third line reliability out of your data center, that's an engineering challenge to accomplish. So it's not good enough just to take the manufacture what's on the nameplate. The vendors are having to dig deeper and make sure they really understand the performance of that component in an individual piece. But then in that complex system that all has to be working together to deliver the kind of reliabilities that we're looking for out of these kind of investments. So both of those drivers for us for growth and really long-term drivers as the supply chains start moving around the world. Tobey Sommer: If I could ask one last question for me. The supply of PhDs in the U.S. looks like it's going to be going down. Recent data says that I guess, the first year-over-year change in admits for PhDs are down 15% with some prominent universities being down even bigger. How do you think a winnowing of young new talent in the economy would impact Exponent? Catherine Corrigan: Yes. Thanks, Tobey. First of all, I'll kind of contextualize a little bit around that in terms of what level we're hiring at because we are really taking the cream of the crop of that class of PhDs, right? We're getting them from Stanford, and MIT, and Berkeley, and Caltech, and Michigan and all of those places. It's important to recognize, I think, the PhDs in the U.S. are probably about half from the U.S. and half international students coming from around the globe. We have typically oriented our recruiting toward those who are authorized to work in the United States. We do hire some others as well, but there are risks associated with that. And so that's, I think, an important element of our strategy to understand. And so, as we look back at the recruiting data over the last year or 2, which is really when this sort of pressure on scientific research funding has come to a head, we have continued to be able to attract that top layer of talent. I mean, this is about having the value proposition for that top layer of PhDs in the sense that compared with an academic route, you are working on things with sort of actionable decisions being made in real time. I know for me personally, that was hugely attractive about Exponent. It's this ability to get away from the lab bench and work on a real problem that's going to have impact in that real time. And the ability to work on a lot of different things. You've spent so much time 5, 6, 7 years looking down a deep, deep tunnel of your specialty that's very narrow. And now you get to take that ability to solve an unstructured problem and put it across all kinds of different industries, products and issues. So that is pretty cool for a graduating PhD. And we just have to continue to expand our moat. We need to continue to have professional development as a key element of our culture where we are going to take that talent and we are going to build it and mold it from day 1 into an impactful consultant that is making a real difference in the world. So that's the way I think about it. John Pye: Yes, I think the data on it is approximately 5% of our hires in a year or less need any sponsorship. So it gives you a sense of where -- as we are looking at the PhD classes of the future begin to change, it probably aligns more with how Exponent has recruited historically. Eric Anderson: I think Catherine mentioned something really -- just one last follow-up on that one. I think Catherine mentioned something that was really important that differentiates in my mind, something that Exponent is really good at. And that is the continued growth through your career while here. And so while you may enter at that PhD, that's just where the journey begins for us. And so our model is really based on that continual increase in stature and growth as you become that expert and are really recognized at the top of your discipline for whatever the challenge might be. So while the supply may change, we've got the engine behind it to make the most out of it as those candidates come to us. Operator: The next question comes from Josh Chan with UBS. Joshua Chan: I think, Catherine, you mentioned the increased diversification of the user research practice. I guess I was wondering if you can give us a color on how diverse that is like applicability of this to a number of situations. Just could you frame for us how it's diversifying, whether it's customer base or applicability or however you want to think about that? Catherine Corrigan: Yes. Yes, absolutely. It's really diversifying across multiple dimensions. So we are doing these types of studies for more clients and actually across more industries. We're doing it in consumer electronics. We are also more early days, but doing it around the life sciences arena. When you think about the expanding array of health-related wearables, that is something that is one of the dimensions of this diversification. It's lifestyle devices, but it is also this transition into more sophisticated FDA-regulated medical devices, the algorithms that are looking to measure blood pressure, that are looking to measure blood oxygenation, some of these other more sophisticated measurements. If a life sciences company is wanting to use that in a clinical trial that is going to the FDA, it's a much higher standard of sort of benchmarking and understanding the ground truth and the human interface side of that. So this is a place where Exponent thrives, right? We understand the regulatory environment, we understand the electronics, we understand the human factors. So there's the consumer, there's the health-related work, but just the different technologies. I think this is something that Eric mentioned. There are all kinds of ways that AI is being incorporated and is being delivered via these products, things with screens, things without screens, things that are interfaced through voice only, things that are interfacing through 3D video types of environment and other types of sophisticated sensors. So there are as many technologies and areas of study as there are ideas for these kinds of devices. And so that's really what's behind this. There are more clients across more industries with more ideas about how to deliver AI and use that to either measure or provide information and do all the different things that AI is being asked to do. Joshua Chan: And then maybe just one quick question on the repurchase. Could you talk about your willingness to continue to buy back stock at least on an annual level above any free cash flow? Just like how should we think about the willingness to buy stock, I guess, and at what pace? Eric Anderson: Josh, this is Eric. I'll take that one. Our philosophy hasn't really changed on this. We've always committed to buy back enough stock to offset dilution from share-based awards. And then we've used excess cash in addition to that to do repurchases at times when the stock pulled back. So we've done that for many years. Cash has built up. We've utilized it when the stock pulled back. We've done a fair bit of that recently over the last 12 months at $211 million. And our cash is down to a lower level, but it's down to a level we're comfortable with as far as running the business. We've communicated to investors that this sort of $50 million to $70 million range is a range we're happy to work within to pursue small strategic opportunities and to have sufficient operating capital. So we're confident in the long-term growth trajectory of the business. We expect to generate free cash flow of over $100 million in the back half of the year, and that's really why our Board authorized that additional $50 million in share repurchases. So we're going to continue to be more active when the stock pulls back, but it will be at a lower rate than it was at the first half of the year or even the back half of last year. Operator: This concludes our question-and-answer session and concludes the conference call today. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Exponent, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Exponent wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,405!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,344,091!* Now, it’s worth noting Stock Advisor’s total average return is 953% — a market-crushing outperformance compared to 214% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Exponent (EXPO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth was primarily driven by proactive user research studies as clients accelerate the development of AI-enabled hardware across diverse form factors. The complexity of human-machine interaction in AI products has created a competitive moat, requiring multidisciplinary expertise in biomechanics, engineering, and data science that commodity research firms cannot provide. Reactive work saw strong demand in the transportation sector, specifically regarding advanced driver assistance systems (ADAS) and the performance of driver monitoring algorithms. Utility sector engagements increased due to rising power demand and the need for infrastructure resilience against extreme weather and grid complexity. A single large-scale user research study outperformed expectations, contributing approximately 4% of net revenues during the quarter compared to the 2% initially projected. Management attributes the firm's differentiated value to its ability to design bespoke scientific methodologies for 'edge case' scenarios where standard research approaches are inadequate. Full-year 2026 guidance was raised, reflecting sustained demand for AI-related proactive work and infrastructure risk management. The large user research study that drove Q2 outperformance is expected to moderate to approximately 2% of net revenues for the remainder of the year. Utilization is projected to remain strong at 74% to 75% in the third quarter, supported by the ongoing scale and complexity of current client engagements. Management expects the shift of AI from digital to physical systems—such as autonomous robots and data center infrastructure—to provide long-term growth across all disciplines. Recruiting efforts are focused on high-tier PhD talent to support a projected 4.5% to 5% increase in technical full-time equivalents for the full year. The Board approved a $50 million increase in the stock repurchase program, following $211 million in repurchases over the last 12 months. G&A expenses increased 20% due to higher travel and relocation costs associated with aggressive recruiting and business development activities. Interest income decreased during the quarter as a direct result of lower cash balances following significant share repurchases. Management noted that while U.S. PhD admits are declining, Exponent's value proposition remains strong for the 'cream of the crop' seeking real-world application over academia. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed AI is driving demand in both areas, particularly in litigation involving driver distraction systems and failure analysis for data center cooling and power systems. Proactive demand is centered on embedding AI into physical products where human factors and algorithm performance intersect. The firm sees a broadening 'competitive moat' as product complexity increases, allowing for pricing that reflects the high value of bespoke scientific judgment. Speed of innovation in the tech industry is helping Exponent articulate its value proposition to clients who cannot afford failure. Supply chain diversification and reshoring create opportunities for technology due diligence and failure analysis when new suppliers are integrated. Data center growth acts as a massive accelerator for engineering challenges, requiring deep analysis of component performance within complex, high-reliability systems. Repurchases will continue but at a lower rate than the first half of the year, as cash levels have reached a comfortable operating floor of $50 million to $70 million. The firm expects to generate over $100 million in free cash flow in the second half of the year to support the newly authorized buyback capacity.

This article first appeared on GuruFocus. Total Revenues: Increased 21% to $171.6 million in Q2 2026. Net Revenues: Increased 12% to $148.9 million, with a large user research study contributing approximately 4% of net revenues. Net Income: Increased 11% to $29.4 million, up from $26.6 million in Q2 2025. Diluted EPS: Increased 15% to $0.60 per share, compared to $0.52 in the prior-year quarter. EBITDA: Increased 16% to $42.7 million, with a margin of 28.7% of net revenues. Billable Hours: Approximately 390,000 in Q2 2026, an increase of 8% year-over-year. Utilization: 74% in Q2 2026, up from 72% in Q2 2025. Realized Rate Increase: Approximately 4% in Q2 2026. Segment Performance (Engineering and Other Scientific): Net revenues increased 13%, representing 85% of net revenues. Segment Performance (Environmental and Health): Net revenues increased 9%, representing 15% of net revenues. Share Repurchases: Repurchased $67.4 million of common stock during the quarter at an average price of $59.88. Q3 2026 Guidance: Net revenues expected to be up 8% to 10% year-over-year, with EBITDA expected to be 28.0% to 28.5% of net revenues. Full-Year 2026 Guidance: Net revenues expected to grow 9% to 10%, with EBITDA expected to be 27.8% to 28.1% of net revenues. Warning! GuruFocus has detected 4 Warning Signs with EXPO. Is EXPO fairly valued? Test your thesis with our free DCF calculator. Release Date: July 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Exponent Inc (NASDAQ:EXPO) delivered strong double-digit growth in revenues and earnings in Q2 2026, with total revenues up 21% and net revenues up 12% year-over-year. The company is benefiting from powerful long-term trends, including accelerating AI integration into physical products, which is driving demand for its specialized user research and human-machine interaction expertise. Proactive work saw strong growth, led by demand for user research studies and increased risk management and infrastructure-related engagements in the utility sector. Reactive work also grew, with strong demand for dispute-related expertise from the consumer products, chemicals, and transportation industries, including failure analysis for advanced driver assistance systems. The company raised its full-year 2026 guidance, now expecting net revenues to grow 9% to 10% and EBITDA margin to be 27.8% to 28.1% of net revenues. Exponent Inc (NASDAQ:EXPO) continues to return significant capital to shareholders, repurchasing $67.4 million of stock in Q2 and increasing its repurchase program by $50 million, reflecting confidence in long-term growth. Utilization improved to 74% in Q2, up from 72% in the same period last year, and the company realized a 4% rate increase, indicating strong pricing power. The company's multidisciplinary expertise and long-standing reputation in failure analysis uniquely position it to handle complex, novel challenges, such as a recent satellite performance issue engagement. The company is successfully attracting top-tier PhD talent despite a tightening supply, leveraging its value proposition of working on real-world, high-impact problems. The user research practice is diversifying across more clients, industries, and technologies, including health-related wearables and FDA-regulated medical devices, expanding its market opportunity. Exponent Inc (NASDAQ:EXPO)'s Q2 results were partially boosted by a large user research study that represented 4% of net revenues, higher than the expected 2%, and this study is expected to moderate to 2% of net revenues for the remainder of the year, creating a tough comparison. The company's full-year utilization guidance of 72.5% to 73% appears conservative relative to the strong Q2 utilization of 74%, potentially signaling a slowdown in demand or seasonality headwinds in Q4. G&A expenses increased 20% in Q2 due to higher travel, meals, recruiting, and relocation costs, which could pressure margins if not managed carefully. Interest income decreased to $716,000 in Q2 due to lower cash balances, a trend expected to continue as the company has reduced its cash reserves through aggressive share repurchases. The company faces potential talent supply risks as the number of PhD graduates in the US is declining, which could make it harder to recruit top-tier scientific talent in the future. The tax rate is expected to increase to 28.5% for the full year 2026, up from 28.0% in 2025, which could slightly dampen net income growth. The company's heavy reliance on reimbursable expenses, which drove total revenue growth faster than net revenue growth, can cause volatility in reported revenue figures. While the company is confident in its growth trajectory, the pace of share repurchases is expected to slow in the second half of the year due to lower cash levels, potentially reducing the tailwind to EPS growth. The company's proactive work is concentrated in a few key verticals, such as consumer electronics, chemicals, and utilities, which could expose it to sector-specific downturns. The increasing complexity and scope of user research studies, while a competitive advantage, also require significant investment in hiring and infrastructure, which could pressure near-term margins. Q: How is AI impacting demand across both proactive and reactive work, and where are you seeing the most significant effects? A: Dr. Catherine Corrigan (CEO) explained that AI is driving growth in both domains. In reactive work, the most significant impact is in advanced driver assistance systems, where litigation now covers not just sensors and braking performance but also driver distraction and monitoring systems. Additionally, failure analysis related to data centerssuch as cooling system contaminants, power inverter performance, and battery energy storage issuesis growing. On the proactive side, user research studies for AI-enabled products are particularly strong, covering both the physical product interface and algorithm performance. Q: Can you quantify what drove the surge in AI-enabled demand in the first half, and how should we think about the second half? A: Eric Anderson (CFO) noted that user experience studies were a key growth driver in Q2. A large study, initially expected to represent 2% of net revenues, expanded in scope and ended up contributing approximately 4% of net revenues. While that study moderated near the end of the quarter, it is expected to continue at a level of about 2% of net revenues through the remainder of the year. The growth is not just from larger studies but also from an expanding number of clients, projects, and a broader array of devices. Q: How is the increasing scope, scale, and complexity of work benefiting Exponent competitively, and does it create pricing power? A: Dr. Catherine Corrigan (CEO) stated that the complexity in user research is broadening Exponent's competitive moat. While there is a commodity layer of data collection and surveys, Exponent's offering is distinctdesigning bespoke experiments, defining research questions, and interpreting results through to regulatory, legal, and business implications. The company is hiring aggressively in human factors, biomechanics, data science, and engineering. She affirmed that the offering is becoming more distinct, which supports the ability to reflect delivered value in pricing. Q: Which industries and verticals have the greatest share of proactive work now, and do you expect that to change? A: Dr. Catherine Corrigan (CEO) identified consumer electronics, chemicals, and utilities as the dominant industries for proactive work. Consumer electronics benefits from user research and hardware work; chemicals involves proactive regulatory work for manufacturers; and utilities involves risk modeling. She noted growth opportunities in transportation due to increased regulatory activity around automated vehicles and in medical devices as AI embedding makes the regulatory environment more complex. John Pye (President) added that historically reactive practices, like human factors, are becoming a blend of reactive and proactive work as clients engage earlier in the product life cycle. Q: How do reshoring and the evolution of data centers impact Exponent's business? A: John Pye (President) expanded the reshoring concept to broader supply chain changes. Data center buildouts are driving clients to source second and third-choice components, increasing failure rates and creating opportunities for technology due diligence and failure analysis. The massive capital influx in data center infrastructure, from concrete to connector plating, touches on a huge diversity of Exponent's disciplines. He emphasized that achieving high reliability in these complex systems is an engineering challenge that requires deep understanding of component performance within the system. Q: How would a decline in the supply of PhDs in the US impact Exponent? A: Dr. Catherine Corrigan (CEO) noted that Exponent recruits the top tier of PhD graduates from leading universities. She highlighted that about half of US PhDs are international students, and Exponent typically focuses on those authorized to work in the US. Despite pressure on scientific research funding, the company continues to attract top talent by offering a value proposition distinct from academiaworking on real problems with real-time impact and applying expertise across diverse industries. John Pye (President) added that only about 5% of annual hires need sponsorship, and Exponent's model focuses on continual career growth, making it well-positioned to maximize the talent it does attract. Q: How is the user research practice diversifying, and what is the applicability across different situations? A: Dr. Catherine Corrigan (CEO) explained that diversification is occurring across multiple dimensions: more clients, more industries, and more technologies. Beyond consumer electronics, the practice is expanding into life sciences, particularly health-related wearables and FDA-regulated medical devices. These require higher standards of benchmarking and understanding of ground truth. The work spans devices with and without screens, voice-only interfaces, 3D video environments, and sophisticated sensors, reflecting the many ways AI is being incorporated into products. Q: What is the company's willingness to continue buying back stock, and at what pace? A: Eric Anderson (CFO) stated that the philosophy remains unchanged: buy back enough stock to offset dilution from share-based awards and use excess cash for additional repurchases when the stock pulls back. Over the last 12 months, the company utilized $211 million for repurchases, bringing cash down to a comfortable operating level of $50 million to $70 million. The board approved an additional $50 million increase to the repurchase program, reflecting confidence in long-term growth. With expected free cash flow of over $100 million in the back half of the year, the company will continue to be active in repurchases, though at a lower rate than the first half. Q: Why does the utilization assumption for the second half look conservative given surging demand? A: Eric Anderson (CFO) clarified that the large user research studies drove higher utilization in Q2, with the 74% rate benefiting from that activity. The Q3 expectation of 74% to 75% is a slight increase from Q2, as the two quarters have similar available working days. However, Q4 is significantly impacted by holidays and vacations, which historically results in lower utilization. The full-year guidance of 72.5% to 73% reflects this seasonal pattern. Q: Can you provide more color on the strong demand in the utility sector and the satellite performance engagement? A: Dr. Catherine Corrigan (CEO) noted increased demand for risk management and infrastructure-related engagements in the utility sector as clients evaluate resilience and reliability amid rising power demand, extreme weather, and grid complexity. Regarding the satellite engagement, she highlighted it as an example of clients requiring deep engineering expertise to investigate performance and risk in highly technical and uncertain environments. This level of multidisciplinary mastery, whether applied to space systems, AI, energy storage, or power infrastructure, uniquely positions Exponent to help clients navigate current challenges and future disruptions. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Exponent, Inc.? Here are five stocks we like better. Strong Q2 performance: Exponent’s revenue rose 21% year over year to $171.6 million, while net revenue increased 12% to $148.9 million. Net income grew 11% to $29.4 million, and diluted EPS rose to $0.60 from $0.52. AI-related demand broadened: Growth was driven by user research for AI-enabled products, including wearables and smart devices, as well as utility risk management and dispute-related consulting in consumer products, chemicals and transportation. Outlook and shareholder returns improved: Exponent raised its 2026 forecast to 9%–10% net revenue growth and a 27.8%–28.1% EBITDA margin. The company repurchased $67.4 million of stock in Q2, paid $14.8 million in dividends and authorized an additional $50 million for buybacks. 7 best fintech ETFs to buy now Exponent (NASDAQ:EXPO) reported double-digit revenue and earnings growth for the second quarter of 2026, supported by demand for user research involving artificial intelligence-enabled products, utility-sector risk management work, and dispute-related consulting across consumer products, chemicals and transportation. Total revenue increased 21% year over year to $171.6 million, while revenue before reimbursements, which the company calls net revenue, rose 12% to $148.9 million. Net income increased 11% to $29.4 million, and diluted earnings per share rose 15% to $0.60 from $0.52 a year earlier. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now How to Buy OpenAI Stock: A Guide Chief Executive Officer Catherine Ford Corrigan said the company’s proactive work was led by demand for user research as clients accelerated development of AI-enabled products across a wider range of hardware formats and applications. Reactive work also grew, with clients seeking dispute-related expertise in consumer products, chemicals and transportation. Corrigan said Exponent’s user research engagements are becoming broader and more complex, often requiring a combination of human factors, biomechanics, engineering and data-science expertise. The company conducts studies designed to assess how people interact with products and technologies, including smart glasses, immersive technologies and health and wellness wearables. → 3 Value ETFs to Consider as Growth Stocks Lag Behind How to Calculate Moving Average; How it Helps in Stock Selection The second quarter also benefited from one large user research study that represented about 4% of net revenue, above Exponent’s prior expectation that the project would account for roughly 2% of net revenue. Chief Financial Officer Eric Anderson said the project expanded in scope during the quarter, moderated toward the end of the period, and is expected to continue at a level of approximately 2% of net revenue through the rest of the year. Anderson said the broader user-research business has expanded in the number of clients, projects and types of devices being evaluated. Corrigan said the company is seeing the work diversify beyond consumer electronics and into life sciences, including health-related wearables and more sophisticated medical-device applications. → 5 AI Stocks Are Pulling Back—Which Growth Catalysts Still Look Strongest? During the question-and-answer session, Corrigan said AI is contributing to both proactive and reactive demand. In reactive work, she cited advanced driver-assistance technologies, where automotive product-liability matters increasingly involve questions around system performance, automated braking, driver distraction and driver monitoring. She also identified data-center infrastructure as a potential source of failure-analysis work involving cooling systems, power inverters and battery energy-storage systems. Exponent said proactive activity was also supported by risk-management and infrastructure engagements in the utility sector. The company said clients are assessing the resilience and reliability of critical systems amid higher power demand, extreme weather and increasing electric-grid complexity. In its reactive business, the company cited demand for product-safety, recall, incident-investigation and dispute work in consumer products. Chemical-sector activity included evaluating legacy substances and emerging chemicals of concern, while transportation work included failure analysis related to advanced driver-assistance systems. President John Pye said AI is moving beyond purely digital applications and into physical products and systems such as vehicles, wearables, infrastructure and robotic systems. He said these technologies must operate reliably in unpredictable real-world conditions, creating a need for expertise across engineering, physical sciences, data science and human factors. Corrigan identified consumer electronics, chemicals and utilities as key current verticals for proactive work. She said Exponent also sees opportunities in transportation and medical devices as regulation, product complexity and AI integration increase. Second-quarter EBITDA rose 16% to $42.7 million. EBITDA margin was 28.7% of net revenue, compared with 27.8% in the prior-year quarter. Billable hours increased 8% to approximately 390,000. Average technical full-time employees increased 6% to 1,012, while utilization rose to 74% from 72% a year earlier. The company’s realized rate increase was about 4% during the quarter. The engineering and other scientific segment, representing 85% of net revenue, recorded 13% net revenue growth. The environmental and health segment, representing 15% of net revenue, grew net revenue 9%, driven by work evaluating chemicals’ effects on human health and the environment. Exponent repurchased $67.4 million of common stock during the quarter at an average price of $59.88 per share and paid $14.8 million in dividends. Over the past 12 months, the company returned $272 million to shareholders, including $211 million in share repurchases and $61 million in dividends. Its board approved a further $50 million increase to the stock-repurchase program. Anderson said the company expects to remain active in repurchasing stock when shares pull back, though at a lower pace than in the first half of 2026 or the second half of 2025. He said Exponent expects to generate more than $100 million of free cash flow in the second half of 2026. Exponent raised its 2026 outlook and now expects net revenue growth of 9% to 10%, with EBITDA representing 27.8% to 28.1% of net revenue. The company previously did not state its earlier full-year targets during the call. For the third quarter, Exponent expects net revenue growth of 8% to 10% year over year and EBITDA margin of 28.0% to 28.5%. It expects average technical full-time-equivalent employees to rise 4% to 5% in the quarter and utilization of 74% to 75%. For the full year, Exponent expects technical employee growth of 4.5% to 5%, utilization of 72.5% to 73%, and realized rate increases of 3.5% to 4%. Capital expenditures are projected at $12 million to $14 million. Exponent, Inc (NASDAQ: EXPO) is an engineering and scientific consulting firm that offers multidisciplinary analysis and advisory services to clients across a range of industries. The company's expertise spans mechanical, materials and corrosion engineering, civil and structural engineering, electrical engineering, industrial hygiene, toxicology and health sciences, and failure analysis. Exponent provides support for product design, performance evaluation, litigation consulting, and regulatory compliance, helping manufacturers, insurers, law firms and government agencies address complex technical challenges. Founded in 1967 in Menlo Park, California, Exponent has grown from a small failure-analysis laboratory into a global consulting practice. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Exponent Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

MENLO PARK, Calif., July 30, 2026 (GLOBE NEWSWIRE) -- Exponent, Inc. (Nasdaq: EXPO) today reported financial results for the second quarter of fiscal year 2026 ended July 3, 2026. “Exponent delivered another strong quarter, with double-digit growth in revenues and earnings reflecting continued demand for our specialized expertise across industries,” stated Dr. Catherine Corrigan, Chief Executive Officer. “Our proactive work experienced strong growth in the quarter, led by demand for user research studies as clients accelerate the development of AI-enabled products across an increasingly diverse range of hardware form factors and applications, with engagements continuing to expand in scope, scale and complexity. Proactive activity was also supported by increased risk management and infrastructure-related engagements in the utility sector. Reactive work grew, with strong demand for our dispute-related expertise from the consumer products, chemicals, and transportation industries. “These results reflect the powerful long-term trends driving our business, including rapid technological innovation, increasing complexity, growing energy demand, investment in resilient power and digital infrastructure, and rising expectations for safety, reliability, and performance. As artificial intelligence becomes embedded in an expanding array of physical products and systems, organizations face increasingly daunting human factors, operational, and risk management challenges that extend well beyond software. Clients turn to Exponent when they encounter critical questions involving the interaction of technology, people, and complex real-world environments, particularly when the consequences of failure are exceptionally high. Our multidisciplinary teams provide the independent, science-based insights needed to accelerate innovation, improve decision-making, and reduce high-consequence risk in areas where few organizations possess comparable expertise,” Dr. Corrigan continued. Second Quarter Financial Results Total revenues and revenues before reimbursements for the second quarter of 2026 increased 21% to $171.6 million and 12% to $148.9 million, respectively, as compared to $142.0 million and $132.9 million in the second quarter of 2025. Net income increased to $29.4 million, or $0.60 per diluted share, in the second quarter of 2026, as compared to $26.6 million, or $0.52 per diluted share, in the same period of 2025. The tax impact associated with share-based awards was immaterial in both the second quarter of 2026 and 2025. Exponent’s consolidated tax rate was 27.9% in the second quarter of 2026, unchanged from the same period in 2025. EBITDA1 increased to $42.7 million, or 28.7% of revenues before reimbursements, in the second quarter of 2026, as compared to $37.0 million, or 27.8% of revenues before reimbursements in the second quarter of 2025. Year-to-Date Financial Results Total revenues and revenues before reimbursements for the first half of 2026 increased 18% to $337.9 million and 11% to $300.7 million, respectively, as compared to $287.5 million and $270.3 million in the same period of 2025. Net income increased to $59.0 million, or $1.19 per diluted share, in the first half of 2026, as compared to $53.2 million, or $1.03 per diluted share, in the same period of 2025. During the first half of 2026, we realized a negative tax impact associated with share-based awards of $0.8 million as compared to $0.5 million in the first half of 2025. Inclusive of the tax impact associated with share-based awards, Exponent’s consolidated tax rate was 29.0% in the first half of 2026, as compared to 28.7% for the same period last year. EBITDA1 increased to $85.9 million, or 28.6% of revenues before reimbursements, in the first half of 2026, as compared to $74.5 million, or 27.6% of revenues before reimbursements, in the first half of 2025. For the first half of 2026, Exponent paid $31.3 million in dividends, repurchased $146.1 million of common stock, and closed the period with $66.6 million in cash and cash equivalents. In a separate press release today, Exponent announced its quarterly cash dividend of $0.31 to be paid on September 18, 2026, and reiterated its intent to continue to pay quarterly dividends. Additionally, Exponent’s Board of Directors approved an increase in the current stock repurchase program of $50 million. Business Overview Exponent’s engineering and other scientific segment represented 85% of the Company’s revenues before reimbursements in the second quarter and through the first two quarters of 2026. Revenues before reimbursements in this segment increased 13% during the second quarter and 12% during the first half of 2026, as compared to the prior year period. Growth during the quarter was driven by strong user research activity in consumer electronics, risk management and infrastructure-related work in the utilities sector, and reactive engagements across the consumer products, chemicals, and transportation industries. Exponent’s environmental and health segment represented 15% of the Company’s revenues before reimbursements in the second quarter and through the first two quarters of 2026. Revenues before reimbursements in this segment increased 9% during the second quarter and 5% during the first half of 2026, as compared to the same period in the prior year. Growth during the quarter was driven by engagements evaluating the impacts of chemicals on human health and the environment. Business Outlook “Our second quarter results demonstrate continued disciplined execution across the business, with strong utilization of 74% contributing to performance that exceeded our expectations,” commented Eric Anderson, Chief Financial Officer. “We continued to invest in our talent and capabilities while maintaining a disciplined capital allocation strategy, returning a combined $272 million to shareholders over the last twelve months through share repurchases and our ongoing dividend program.” For the third quarter of fiscal 2026 as compared to the same period one year prior, Exponent anticipates: Revenues before reimbursements to grow 8% to 10%; and, EBITDA1 to be 28.0% to 28.5% of revenues before reimbursements. For the full fiscal year 2026 as compared to fiscal year 2025, Exponent is raising its revenue and margin guidance, anticipating: Revenues before reimbursements to grow 9% to 10%; and, EBITDA1 to be 27.8% to 28.1% of revenues before reimbursements. “Exponent remains well positioned to support clients as emerging technologies, critical infrastructure, and increasingly complex and interconnected systems reshape industries around the world,” Dr. Corrigan said. “Whether helping clients evaluate AI-enabled products, enhancing the resilience and performance of infrastructure, or navigating complex technical and regulatory challenges, our expert ecosystem provides the rigorous, independent insights needed when the stakes are high. We remain confident in our ability to expand our impact across industries and deliver long-term value for our shareholders.” Today’s Conference Call Information Exponent will discuss its financial results in more detail on a conference call today, Thursday, July 30, 2026, starting at 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time. The audio of the conference call is available by dialing (844) 481-2781 or (412) 317-0672. A live webcast of the call will be available on the Investor Relations section of the Company’s website at www.exponent.com/investors. For those unable to listen to the live webcast, a replay of the call will also be available on the Exponent website, or by dialing (855) 669-9658 or (412) 317-0088 and entering passcode 7563057#. Use of non-GAAP Financial Measures 1 EBITDA is a non-GAAP financial measure defined by the Company as net income before income taxes, interest income, depreciation, and amortization. EBITDAS is a non-GAAP financial measure defined by the Company as EBITDA before stock-based compensation. The Company regards EBITDA and EBITDAS as useful measures of operating performance and cash flow to complement operating income, net income, and other GAAP financial performance measures. Additionally, management believes that EBITDA and EBITDAS provide meaningful comparisons of past, present, and future operating results. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. These measures, however, should be considered in addition to, and not as a substitute or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. Exponent has provided its outlook regarding EBITDA as a percentage of revenues before reimbursements. The Company has not reconciled this non-GAAP financial measure to the corresponding GAAP financial measure because guidance for the various reconciling items is not provided and the Company is unable to estimate with reasonable certainty the effect of these items without unreasonable effort. For example, the Company is unable to estimate with reasonable certainty the impact of equity awards on Exponent’s taxes without unreasonable effort. These items are uncertain, depend on various factors, and may have a material effect on Exponent’s results computed in accordance with GAAP. A reconciliation between the historical GAAP and non-GAAP financial measures presented in this release is provided in the financial tables at the end of this release. About Exponent Exponent brings together 90+ technical disciplines and 950+ consultants to help our clients navigate the increasing complexity of more than a dozen industries, connecting decades of pioneering work in failure analysis to develop solutions for a safer, healthier, more sustainable world. Exponent’s consultants deliver the highest value by leveraging multidisciplinary expertise and resources from across Exponent’s offices in North America, Asia, and Europe. Exponent’s consultants, laboratories, and integrated technical platform work seamlessly together around the globe, enabling us to produce the breakthrough insights needed to help multinational companies, startups, law firms, insurance companies, governments, and society respond to incidents and push their products and processes forward at speed. Exponent may be reached at (888) 656­-EXPO, [email protected], or www.exponent.com. Forward Looking Statements This news release contains, and incorporates by reference, certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995, and the rules promulgated pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended) that are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. When used in this document and in the documents incorporated herein by reference, the words “intend,” “anticipate,” “believe,” “estimate,” “expect” and similar expressions, as they relate to the Company or its management, identify such forward-looking statements. Such statements reflect the current views of the Company or its management with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, any such forward-looking statements. Factors that could cause or contribute to such material differences include the possibility that the demand for our services may decline as a result of changes in generally applicable and industry-specific economic conditions, the timing of engagements for our services, the effects of competitive services and pricing, the absence of backlog related to our business, our ability to attract and retain key employees, the effect of tort reform and government regulation on our business, and liabilities resulting from claims made against us. Additional risks and uncertainties are discussed in our Annual Report on Form 10-K under the heading “Risk Factors” and elsewhere in the report. The inclusion of such forward-looking information should not be regarded as a representation by the Company or any other person that the future events, plans, or expectations contemplated by the Company will be achieved. The Company undertakes no obligation to release publicly any updates or revisions to any such forward-looking statements. Source: Exponent, Inc.

Exponent (EXPO) came out with quarterly earnings of $0.6 per share, beating the Zacks Consensus Estimate of $0.55 per share. This compares to earnings of $0.52 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +9.09%. A quarter ago, it was expected that this engineering and scientific consulting company would post earnings of $0.56 per share when it actually produced earnings of $0.59, delivering a surprise of +5.36%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Exponent, which belongs to the Zacks Consulting Services industry, posted revenues of $148.86 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.34%. This compares to year-ago revenues of $132.87 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Exponent shares have lost about 5.2% since the beginning of the year versus the S&P 500's gain of 6.9%. While Exponent has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Exponent was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.60 on $146.92 million in revenues for the coming quarter and $2.28 on $586.57 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Consulting Services is currently in the top 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Information Services Group (III), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This market advisory service company is expected to post quarterly earnings of $0.09 per share in its upcoming report, which represents a year-over-year change of +12.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Information Services Group's revenues are expected to be $62.75 million, up 1.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Exponent, Inc. (EXPO) : Free Stock Analysis Report Information Services Group, Inc. (III) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MENLO PARK, Calif., July 30, 2026 (GLOBE NEWSWIRE) -- Exponent, Inc. (Nasdaq: EXPO) today announced that its Board of Directors has declared a quarterly cash dividend of $0.31 per share of common stock to be paid on September 18, 2026, to all common stockholders of record as of September 4, 2026. Exponent has paid, and expects to continue to pay, quarterly dividends each year in March, June, September, and December. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of Exponent’s Board of Directors. In addition, Exponent’s Board of Directors increased the Company’s authority to repurchase shares of its common stock by $50 million. “Our quarterly dividend and increased share repurchase authorization reflects the strength and durability of Exponent’s business model and our disciplined approach to capital allocation,” commented Dr. Catherine Corrigan, Chief Executive Officer. “Supported by our strong financial foundation and differentiated market position, we remain committed to returning capital to shareholders while investing in long-term growth opportunities.” About ExponentExponent brings together 90+ technical disciplines and 950+ consultants to help our clients navigate the increasing complexity of more than a dozen industries, connecting decades of pioneering work in failure analysis to develop solutions for a safer, healthier, more sustainable world. Exponent’s consultants deliver the highest value by leveraging multidisciplinary expertise and resources from across Exponent’s offices in North America, Asia, and Europe. Exponent’s consultants, laboratories, and integrated technical platform work seamlessly together around the globe, enabling us to produce the breakthrough insights needed to help multinational companies, startups, law firms, insurance companies, governments, and society respond to incidents and push their products and processes forward at speed. Exponent may be reached at (888) 656­-EXPO, [email protected], or www.exponent.com.Forward Looking StatementsThis news release contains, and incorporates by reference, certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995, and the rules promulgated pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended) that are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. When used in this document and in the documents incorporated herein by reference, the words “intend,” “anticipate,” “believe,” “estimate,” “expect” and similar expressions, as they relate to the Company or its management, identify such forward-looking statements. Such statements reflect the current views of the Company or its management with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, any such forward-looking statements. Factors that could cause or contribute to such material differences include the possibility that the demand for our services may decline as a result of changes in generally applicable and industry-specific economic conditions, the timing of engagements for our services, the effects of competitive services and pricing, the absence of backlog related to our business, our ability to attract and retain key employees, the effect of tort reform and government regulation on our business, and liabilities resulting from claims made against us. Additional risks and uncertainties are discussed in our Annual Report on Form 10-K under the heading “Risk Factors” and elsewhere in the report. The inclusion of such forward-looking information should not be regarded as a representation by the Company or any other person that the future events, plans, or expectations contemplated by the Company will be achieved. The Company undertakes no obligation to release publicly any updates or revisions to any such forward-looking statements.