Rising costs hit earnings in FTI comms arm despite revenue growth

Underlying earnings fell in FTI Consulting’s Strategic Communications division in the third quarter of 2022 despite growth in revenue, with a 16.4 per cent rise in staff costs among the factors cited.

CEO Steven Gunby: FTI had a ‘solid underlying business performance’ in Q3

Revenue in the comms division of FTI Consulting grew 4.3 per cent to $72.4m in the third quarter of 2022 – growth was 12.2 per cent excluding the impact of currency fluctuations. FTI said the growth was “primarily due to increased demand for corporate reputation services compared to the prior year quarter”.

Adjusted underlying earnings (EBITDA) in the division were $12.9m, down from $15.5m in Q3 last year. FTI said the “increase in revenues was more than offset by higher compensation”, pointing to the impact of a 16.4 per cent increase in billable headcount and higher operating expenses.

EBITDA in the Strategic Communications arm accounted for 17.9 per cent of the business as a whole in Q3, compared to 22.3 per cent in the same quarter last year.

Revenue across the company rose 10.5 per cent to $775.9m in the third quarter – growth was 14.8 per cent excluding currency fluctuations. However, adjusted EBITDA was lower in Q3 ($99m) than in the same quarter last year ($100.3m). Earnings per share rose 9.7 per cent to $2.15.

Steven Gunby, president and chief executive of FTI Consulting, said: “Our record results this quarter reflect the combination of solid underlying business performance in aggregate, together with some one-time benefits. As always, our focus remains on driving the powerful multi-year trajectory our firm has been on by continuing to invest behind our strong positions and the ambitions of our people.”

This week WPP warned of a profit-margin squeeze due to staff costs and inflation following its Q3 results. The holding company reduced its expectations for full-year operating margin growth.


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