WASHINGTON: FTI Consulting’s strategic communications segment posted a 3.8% organic revenue decrease in Q2 to $56.9 million.
The decline was largely due to a $1.9 million drop in pass-through revenue -- spending meant for ad buys and other third-party vendors -- the firm said.
“[Revenue] was flat and coming off a record quarter last year that was the best second quarter we’ve ever had,” said Marc McCall, senior MD and global leader of the segment. “We didn’t see the growth we would normally have seen.”
FTI has avoided staffing cuts and furloughs enacted by many PR shops and is hiring, McCall said. However, the company has combined offices for employees in different business segments and the real estate market may present some “opportunities to improve lease agreements,” he added.
The strategic comms segment added new clients in Q2, including GNC, Chuck E. Cheese and LatAm Airlines, but most new business has come from existing remits, McCall said.
“While we are seeing a decent pipeline for new clients, it has been the stability of existing clients and retained business and growth in existing clients coming to us for work,” he explained.
McCall added that referrals from FTI’s other business segments have been increasingly important.
“[Internal referrals] have grown easily three-fold over last year,” McCall said.
The bulk of those referrals came from the corporate finance and restructuring segment, which saw revenue increase 29.5% to $246 million, making it the only unit to see positive revenue growth in Q2.
In the forensic and litigation consulting segment, revenue decreased 27.1%, to $106.4 million. It dropped 2.6% to $151.5 million in the economic consulting group and 15.4% to $47.1 million in the technology segment.
As a whole, FTI’s revenue was up 0.3% to $607.9 million, and it posted net income of $48.2 million compared to $64.6 million last year.
The company attributed the decline to “higher compensation, primarily related to an 18.2% increase in billable headcount and higher variable compensation.”