Exponent Reports $173.7 Million in Revenue and Raises 2026 Growth Outlook
Key Facts
Exponent reported revenue of $173.7 million in the third quarter of fiscal 2026, up 18% year over year, and raised its forecast for annual growth in revenue before reimbursements. The quarter ended Oct. 2, according to the company’s statement. Revenue before reimbursements was $153.1 million, up 12% from the same period a year earlier. Net income reached $30.9 million, or $0.64 per diluted share, compared with $28 million and $0.55 per share a year earlier. Analysts had estimated earnings of 60 cents per share and revenue of $149.5 million for the quarter before the results, according to an Investing.com preview.
The gap between growth in total revenue and revenue before reimbursements reflects a difference in how the company presents its business; the latter excludes amounts that Exponent recovers from clients to cover expenses. Year over year, total revenue rose from $147.1 million in the third quarter of 2025 to $173.7 million, while revenue before reimbursements increased from $137.1 million to $153.1 million. That revenue had risen 12% in the second quarter to $148.9 million, compared with $132.9 million a year earlier, according to company data. Second-quarter total revenue was $171.6 million, exceeding analysts’ estimate of $144.1 million, according to an Investing.com preview. The preview noted that the stock rose after those quarterly results, as investors watched to see whether performance reflected project timing or accelerating demand.
Exponent said user research studies continued to support growth as clients sought to understand how people interact with technology. The company also cited growth in litigation and failure analysis work across the chemicals, consumer products and transportation sectors. Other engineering and scientific services account for 85% of revenue before reimbursements, and revenue from that business rose 13% year over year during the quarter. The environmental and health segment, which represents 15% of that revenue, grew 3%. The company attributed the latter segment’s performance to an increase in projects assessing the effects of chemicals on human health and the environment.
In an Investing.com preview ahead of the results, Chief Executive Officer Katherine Corrigan said second-quarter growth benefited from demand for user research studies as clients accelerated the development of AI-powered products. The preview also noted that the company’s investor day in September highlighted opportunities related to AI, data center infrastructure, energy systems and environmental issues. Markets were awaiting concrete updates on projects and clients in those areas. Third-quarter results offer a picture of continued demand for user research and scientific services, alongside litigation and failure analysis work. The company said, "User research studies continued to be a strong contributor to our growth."
Exponent raised its fiscal 2026 outlook, estimating revenue before reimbursements growth of 10% to 11%, and adjusted EBITDA of 28.0% to 28.3% of that revenue. For the fourth fiscal quarter, it expects revenue before reimbursements growth of 8% to 10% and an adjusted EBITDA margin of 26.3% to 26.8%. The company declared a quarterly cash dividend of $0.31 per share, payable on Dec. 18, 2026. During the first three quarters of the year, it paid $46.1 million in dividends and repurchased $146.1 million of common stock. It ended the third quarter with $114.7 million in cash and cash equivalents, while its shares closed at $77.11 on Oct. 28, according to EL7 data.