Oct 29, 2026 earnings call — AI into physical products and strong Q3 results
Total revenues increased 18% to $173.7 million in Q3 2026.
Revenue $0.2B (est $0.1B) · EPS $0.64 (est $0.60)
Key quotes
"Today, however, most of our AI-related work sits at the top of the stack in the applications where we deliver the data that trains these systems and where we test how they perform in real-world conditions."
"And importantly, that work continues to broaden across clients, products and real-world environments."
"During the quarter, we saw increased dispute and failure analysis work across consumer products, chemicals and transportation."
Analyst Q&A 4
Why utilization was high; AI work history
Q (Joshua Chan · UBS): Were high Q3 utilization levels from structural productivity or calendar effects? Also, how has the share of AI-related work changed compared with a few years ago?
A: Management said the high utilization was not a calendar artifact but broad-based demand across dispute-related services and industries, with few Q3 holidays. They noted a large proactive project dropped from 4% to 2.5% of revenues and that AI-related work is not new — they've done it for years in areas like advanced driver assistance and utilities risk management, but they did not give a past percentage.
"So that utilization really just reflected dispute-related services across a broad set of industries, the ones we talked about in the press release, consumer products, chemicals, transportation and just good business flow across most areas of our business." — Eric Anderson (CFO)
Hiring and pricing vs utilization; growth split
Q (Andrew Nicholas · William Blair): Given strong utilization, will you increase headcount growth or push pricing in 2027? Also, how did proactive and reactive revenue grow in the quarter?
A: Management said they are increasing recruiting and balancing hires with demand, including university and lateral recruiting, but will give specific headcount and pricing details later in planning. They reported proactive work grew in the high teens and reactive work grew in the high single digits, and reactive growth was diversified across many areas.
"On the proactive side, it grew in the, call it, the high teens and the reactive side in the high single digits." — Eric Anderson (CFO)
Large project share; AI in reactive work; hiring needs
Q (Tobey Sommer · Truist): What is the Q4 expectation for the 4% project? Is AI-caused physical damage already a reactive market need, and where will you hire most?
A: They expect the large project to wind down to under 1% of revenues in the fourth quarter. Management said AI is already in products and showing up in reactive work today, especially in transportation (ADAS/autonomous) and emerging in areas like medical devices; litigation is starting but may lag. For hiring, they will recruit human factors, biomechanics, thermal scientists, polymer experts, metallurgists, energy storage specialists, and health/environmental senior hires.
"Tobey, that project, we expect to wind down to under 1% of revenues in the fourth quarter." — Eric Anderson (CFO)
Q4 growth moderation; Env & Health; buybacks
Q (Tomohiko Sano · JPMorgan): Why guide Q4 to 8%–10% growth versus 12% in Q3? What must change for Environmental & Health to reaccelerate? And how will buybacks continue versus other investments?
A: They said Q4 utilization guidance (69%–70%) reflects continued robust activity but a tougher year-over-year compare, which explains the lower growth rate. For Environmental & Health, they are focused on senior hires and building teams under principals to expand capabilities across reactive and proactive work. On capital allocation, their philosophy is unchanged: continue the dividend, buy back shares during price pullbacks (about $50 million remaining authorized), and evaluate small acquisitions or other investments.
"That 69% to 70% utilization in the fourth quarter is roughly equivalent to the 77% that we just did in the third quarter" — Eric Anderson (CFO)