Good afternoon, everyone, and welcome to the Exponent, Inc. Q3 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star and then One using a touch-tone telephone. To withdraw your questions, you may press Star and Two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Joni Constantino, Managing Director with Riveron. Please go ahead. Thank you. Good afternoon, ladies and gentlemen. Thank you for joining Exponent's third quarter twenty twenty-four 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, President and Chief Executive Officer, and Rich Schlenker, Executive Vice President and Chief Financial Officer. Before we start, I'd 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 Factor 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. And now, I will turn the call over to Dr. Catherine Corrigan, Chief Executive Officer. Catherine? Thank you, Joni, and thank you, everyone, for joining us today. I will start off by reviewing our third quarter twenty twenty-four business performance. Rich will then provide a more detailed review of our financial results and outlook, and we will then open the call for questions. We are pleased with the alignment of our operating model with market demand, which drove 6% net income growth and expanded EBITDA margin in the third quarter. This marks the third consecutive quarter of increased utilization year over year as we continue our commitment to efficient resource management. As expected, revenues before reimbursements were flat in the quarter. Our proactive business returned to year-over-year growth, driven by a healthy rebound in consumer electronics, but this was largely offset by persistent headwinds in the chemical sector and an exceptionally high benchmark of over 20% growth in our reactive services last year. The inherent strength of our diversified portfolio continued to provide stability in a dynamic operating environment. Turning to our engagements in more detail. Proactive engagements in the quarter were driven by increased user experience studies and product development consulting in the consumer electronics sector, as well as risk-related work in utilities. Clients in electronics turn to Exponent for our breadth of expertise across the product lifecycle, whether that is curating machine learning training data at the development stage, adding novel features to existing products, or addressing performance issues when incorporating more sustainable materials. We are capitalizing on the increased use of wearable sensors in health applications, which is driving opportunities at the intersection of electronics and life sciences. These healthcare-related applications are not only driving growth, but are also serving to diversify our portfolio and to mitigate future challenges related to product lifecycle timing. In the utilities sector, our growth was driven by asset integrity management engagements, advising our clients on the resilience of their infrastructure as they face increased regulatory scrutiny and challenges related to climate change. Activity in our reactive work continues to moderate from the exceptionally high growth in the prior year, driven by several significant litigation projects, which have since been completed. Engagements in the quarter included product liability and regulatory consulting in the transportation industry, including performance and safety evaluations of advanced driver assistance technologies and battery systems. In energy, we consulted on infrastructure disputes involving wind, solar, and large-scale energy storage. During the quarter, we continued to see headwinds in the chemicals sector, consistent with the significant restructuring occurring among several major companies in this space. This resulted in some clients moderating near-term litigation budgets as well as regulatory work. While the year-over-year comparisons in our reactive services are challenging, our leading market position endures, grounded in our deep failure analysis roots. Clients continue to seek our advice for the most complex regulatory, safety, and performance challenges across a diverse array of industries and technologies, supporting stability and long-term growth potential. Turning to our segments. Exponent's engineering and other scientific sectors represented 84% of revenues before reimbursements in the third quarter. Revenues before reimbursements in this segment increased 2%, driven by demand for Exponent services across the consumer, electronics, and utilities sectors.... Exponent's Environmental and Health segment represented 16% of revenues before reimbursements in the third quarter. Revenues before reimbursements in this segment decreased 6% due to headwinds in the chemicals and life sciences sectors. This year, we have made significant strides to strategically align our resources to market demand. We have executed this plan over the last several quarters, and it has resulted in a robust utilization rate of 75% for the first nine months of 2024. Considering this progress, we are raising our margin guidance while maintaining our revenue guidance for the full year. While our headcount was lower than anticipated in the third quarter, we will continue our focus on strategic recruitment efforts, anticipating sequential headcount growth in each quarter of 2025 to meet market demand. As we close out the year, we are diligently focused on delivering exceptional service for our clients' current needs while preparing to solve their future challenges. We continue to build upon our multidisciplinary expertise as the increasing expectations for safety, health, and the environment drive our business forward. While macroeconomic conditions are never certain, Exponent is strengthened by the breadth and depth of our increasingly diverse portfolio, which allows us to navigate challenges while pursuing future growth opportunities. Looking into next year, we remain encouraged about market trends as we continue to expand our offerings to meet the evolving needs of our clients. I'll now turn the call over to Rich to provide more detail on our third quarter results, as well as discuss our outlook for the fourth quarter and the full year of twenty twenty-four. Thank you, Catherine, and good afternoon, everyone. Let me start by saying all comparisons will be on a year-over-year basis, unless otherwise noted. For the third quarter of 2024, total revenues increased 2% to $136.3 million. Revenues before reimbursements or net revenues, as I will refer to them from here on, were flat at $125.1 million as compared to the same period in 2023. Net income for the third quarter increased to $26 million or $0.50 per diluted share, as compared to $24.5 million or $0.48 per diluted share in the prior year period. The realized tax benefit associated with accounting for share-based awards in the third quarter of twenty twenty-four was $532,000, or $0.01 per diluted share, as compared to an immaterial impact in the third quarter of twenty twenty-three. Inclusive of the tax benefit from share-based awards, Exponent's consolidated tax rate was 27.5% in the third quarter of twenty twenty-four, as compared to 27.9% for the same period in twenty twenty-three. EBITDA for the quarter increased 4% to $35.8 million, producing a margin of 28.6% of net revenues, as compared to $34.5 million or 27.6% of net revenues in the same period of twenty twenty-three. This year-over-year increase in margins was driven by an increase in utilization during the third quarter of twenty twenty-four. Billable hours in the third quarter were approximately 362,000, a decrease of 5% year over year. The average technical full-time equivalent employees in the third quarter were 949, which is a decrease of 10% as compared to one year ago. Headcount is down year over year, as we have aligned our resources with demand, allowing us to achieve strong utilization and margins. Utilization in the third quarter was 73.4%, up from 69.6% in the same period of 2023. The realized rate increase was approximately 5% for the third quarter as compared to the same period a year ago. In the third quarter, after adjusting for gains and losses in deferred compensation, compensation expense decreased 3%. Included in total compensation expense is a gain in deferred compensation of $7.2 million, as compared to a loss of $2.8 million in the third quarter of 2023, generating a $10 million variance. As a reminder, gains and losses in deferred compensation are offset to miscellaneous income and have no impact on the bottom line. Stock-based compensation expense in the third quarter was $5.5 million, as compared to $4.9 million in the prior year period. Other operating expenses in the third quarter were up 9% to $12 million, driven primarily by the increased non-cash expense of our Phoenix, Arizona, lease renewal. Included in other operating expenses is depreciation and amortization expense of $2.4 million for the third quarter. G&A expenses declined 12% to $5.3 million for the third quarter. This decrease was primarily due to a decrease in travel and meals as we postponed to 2025 our in-person managers meeting, which is typically held at the end of September. Interest income increased to $2.6 million for the third quarter, driven by an increase in interest rates year over year. Miscellaneous income, excluding the deferred compensation gain, was approximately $375,000 in the third quarter. During the quarter, capital expenditures were $1.7 million, and we distributed $14.2 million to shareholders through dividend payments. Turning to our outlook. For the fourth quarter of 2024, as compared to one year prior, we expect revenues before reimbursements to grow in the mid-single digits and EBITDA margin, EBITDA to be 23.5%-24.5% of revenues before reimbursements. As Catherine mentioned, we are maintaining our revenue guidance and raising our margin expectations for the full year of 2024. For fiscal year 2024, we expect revenue before reimbursements to grow in the low to mid-single digits and EBITDA to be 27.9%-28.1% of revenues before reimbursements, as compared to 27.7% for fiscal year 2023. Both our current and previous guidance are inclusive of the extra week in the fourth quarter, which occurs approximately every sixth year and is estimated to contribute an additional 4.5% to net revenues in the fourth quarter or 1.1% for the year. Since the extra week includes the New Year's holiday and significant vacations, it has a negative impact on utilization and margins. We expect average technical full-time equivalent employees to slightly decline sequentially in the fourth quarter of twenty twenty-four, despite our increased recruiting activity, as typically, new hires wait until the new year to start. As a result, average FTEs for the fourth quarter will be down approximately 7% year over year. Our full year average FTEs will be down approximately 7%-8% on a year-over-year basis. We will end the year with approximately 945 FTEs, which will be 5%-6% lower than the first quarter of twenty twenty-four. We expect our increasing recruiting effort to result in quarterly sequential headcount growth of approximately 1%-2% each quarter of twenty twenty-five. As a result, we expect year-over-year headcount growth in the third quarter of twenty twenty-five. We expect utilization in the fourth quarter to be 66-67%, as compared to 65% in the same quarter last year. As a reminder, utilization is seasonably lower in the fourth quarter due to more holidays and vacations compared to other quarters. We expect the full year utilization to be 72-73%, as compared to 69% in 2023. We still believe our long-term target of sustained mid-seventies utilization can be achieved as we continue to strategically manage headcount and balance utilization based on market demand. We expect the 2024 year-over-year realized rate increase to be 4.5-5% for the fourth quarter and full year. For the fourth quarter, we expect stock-based compensation to be $4.8-$5 million. For the full year, we expect stock-based compensation to be $23.2 million-$23.4 million. For the fourth quarter, we expect other operating expenses to be $12.8 million-$13.2 million. For the full year, we expect other operating expenses to be $46.5 million-$46.9 million. As a reminder, on June nineteenth, 2024, we exercised an option to early extend the lease for our testing and engineering center in Phoenix, Arizona. This resulted in an increase in our non-cash rent expense of $1.1 million during the third quarter and will have a similar impact again in the fourth quarter. For the fourth quarter, we expect G&A expense to be $6.2 million-$6.7 million. For the full year, we expect G&A expense to be $23.2 million-$23.7 million. We expect interest income to be $2 million-$2.5 million for the fourth quarter. In addition, we anticipate miscellaneous income to be $100,000-$200,000 in the fourth quarter. This includes an expected sequential decrease in rental income in the fourth quarter due to the loss of a tenant in our Menlo Park-owned building. For the remainder of 2024, we do not anticipate any additional tax benefit associated with share-based awards. For the fourth quarter of 2024, we expect our tax rate to be approximately 28%, compared to 30.4% in the same quarter a year ago. For the full year twenty twenty-four, the tax rate is expected to be 26.7%-26.9%, as compared to 26.2% in twenty twenty-three. The increase in the tax rate is due to less tax benefit from share-based awards in the first quarter. In closing, we are pleased with the alignment of our operating model with the market demand, and we remained focused on long-term growth. I will now turn the call back to Catherine for closing remarks. Thank you, Rich. As industries transform at breakneck speed, the nexus between innovation and safety, health, and environmental impacts grows increasingly complex. The examples are many. New form factors and more sophisticated sensors being deployed in wearable technologies, bringing data and insights into human health like never before. Novel electronic devices like eyeglasses that are radically transforming the ways human beings engage with the world around them. The increasing penetration of electric powertrains into the vehicle fleet, with all of its safety-related challenges. The novel artificial intelligence platforms that can boost the capacity of the electric grid in the face of power-hungry data centers. The accelerating use of artificial intelligence to make safety-critical decisions as the deployment of robotaxis spreads to more and more cities around the world. These are just a few of the places where Exponent's insights and expertise will add critical value. Looking ahead, we are focused on growing our team and expanding our capabilities, and we are confident in our ability to deliver long-term, profitable growth. Operator, we are now ready for questions. Ladies and gentlemen, at this time, we'll begin that question-and-answer session. To ask a question, you may press Star and then One using a touch-tone telephone. To withdraw your questions, you may press Star and Two. If you are using a speakerphone, we do ask that you please pick up the handset prior to pressing the numbers to ensure the best sound quality. Once again, that is Star and then One to join the question queue. We'll pause momentarily to assemble the roster. And our first question today comes from Toby Sommer from Truist. Please go ahead with your question. Hey, good afternoon. This is Jasper, handing it to Toby. I just wanted to clarify something from the prepared remarks. You said there was a expectation for FTE growth in the second half of twenty-five. And if that's accurate, I guess, kind of stepping back, what would the cadence of FTE growth next year potentially look like as you, you know, ramp up your recruiting efforts from where, you know, FTEs are ending the year in your four Q guidance? Yeah. So, yes, what we indicated is we expect to end the year at around 945 FTEs. We would expect that in each of the quarters of 2025, that we would gain 1%-2% sequentially across those. So, that's our expectation, is that we will grow from that base 1%-2% a quarter. Okay, thank you for that. And then I just wanna ask about the weaker reactive performance this quarter. Is that primarily a function of just more difficult comps with more enduring engagements last year, or has anything changed in seeing clients manage that spend differently? Yeah, thank you, Jasper, for that question. It really is about the portfolio and about timing, right? We continue to have an incredibly strong market position when it comes to our failure analysis work, you know, product defect investigations, litigation and disputes, and so forth. We did see really strong growth in Q3 of 2023, and frankly, pretty strong growth in Q3 of 2022 as well. We also had a number of engagements, you know, earlier in this year and late last year that were really going at full speed, which have since completed across a couple of different arenas. You know, we had talked about engagements in life sciences and in the energy sector around renewables, and so there are some of those things that have come to completion. We've got a lot of activity that continues along. As we talk to our business units, we see, you know, the opportunities continuing to flow in. And so we do think there is really, it's about the comparison rather than some kind of fundamental change in the market. Thanks. That makes sense. Last question for me. How should we think about underlying industry group trends into 2025? Obviously, lower levels of consumer electronics work. Was it headwind this year? You also called out chemicals. Should we think about that as having stabilized at this point, and anything we call out as far as particular strength or weakness in your industry groups headed in the next year? Yeah. So, I think what I heard is, you know, asking about electronics as well as chemicals and sort of how we're feeling about that going forward. Yes, we're very happy with sort of the sequential increases around the electronic side that we've seen. We've gotten that back to a healthy level. We're not where we were necessarily at our peak, you know, back in late sort of 2022, but we're, you know, we're at what we consider a nice level to be able to now look toward growth in the future. And, you know, I highlighted a few of the examples of the kinds of things that are going on in that industry in terms of the new product pipeline. You know, we're seeing glasses, we're seeing the new devices that are oriented toward human health and wellness applications. And so there's this nice diversity of clients as well as products that we think gives us a good opportunity to continue growth. And of course, the continued rollout of AI-related features and the challenges around performance and curating the data that drives and trains those algorithms is yet another place where we continue to build our market position. So I'm enthusiastic about what we're seeing in the electronic side going forward. The chemicals industry, you know, this is one where we've seen a lot of the major players undergoing significant restructuring. And, you know, when this happens, like it happened to the electronics industry 12-18 months ago, or I guess almost starting 2 years ago now, they are having to restructure their teams, and that kind of impact does bleed over to us as they sort of tighten their belts. They think a little bit differently about their schedules for various projects and so forth, because of their uncertainty. So it's a smaller impact on our business because it's not as big as, you know, consumer electronics is, but we are nonetheless seeing some of that, you know, belt-tightening on the regulatory side as well as some of the litigation work. But look, when I think about that industry longer term, I see an industry that has incredible challenges around the pressures on their products with regard to safety, with regard to health and environmental-related effects. You know, this is not going to go away anytime soon, and the emphasis on making their operations more sustainable, there will always be fights about the level of regulation and alleged health effects of chemicals, and so we're well positioned for that. We're fully engaged, you know, with our clients around that, and we think that those fundamental market drivers will be there over the long term. Appreciate the color. Thank you for taking our questions. You're welcome. Our next question comes from Andrew Nicholas, from William Blair. Please go ahead with your question. Hi, thank you, and good afternoon. I want to maybe follow up on the chemical piece. I realize a smaller part of your business than consumer electronics, but are we to understand? I think the first time that you mentioned some of these pressures was fourth quarter last year. Are the comps at least getting a little bit easier there, such that it wouldn't be, or you wouldn't expect it to be as big of a headwind in the fourth quarter and to start '25? Or is this, you know, a new leg lower, recognizing that you're still optimistic about it over the medium term? Yeah, Andrew, I think that the hurdle is lower as you get to the fourth quarter, definitely. I think that what we saw in the fourth quarter was really the pausing of some spend on certain litigation matters or larger litigation portfolios. And with the message at that time that, you know, oh, those will likely come back early in the year. I think what we've seen that industry go through now is a broader set of economic challenges, and which has led to restructuring or disruption of their workforce, as Catherine described, and I think that needs to work itself out, and people need to settle back down who remain and get back to work, and they will have to push their products through the regulatory body. They will have to deal with the litigation portfolio that they have, and they will have to move through that. So, just at a little bit different environment, but sort of a little bit similar to what we saw in the electronics, where they needed to get back to product design and product development and moving things forward. I think that the bar is lower in the fourth quarter than the third of a year ago in that area. This is a segment that's about, you know, was about 10% of our revenues here in the third quarter of, you know, chemicals was 10% of our business in the third quarter of 2024. Got it. Thank you. Thank you very much. And then maybe for my follow-up question, I believe on headcount, so I appreciate all the color on headcount growth expectations, both through year end and throughout 2025. But if I'm not mistaken, I thought that you had said that you expected sequential headcount growth last quarter, or at least heading into this year, third quarter. So I'm just curious, if there's any explanation for why that didn't come to fruition? Are you pruning in areas that you previously didn't expect to prune, or is it, you know, a little bit taking a little bit longer to recruit new talent? Any kind of thoughts on maybe the timing of that onboarding? I know you mentioned some professionals wanting to wait till the end of the year. Maybe that's all of it, but any color there would be helpful. Yeah. No, thanks, Andrew. And, you know, there is, in Q3, we saw a bit higher turnover than we had anticipated. You know, we have and continue to increase the efforts on the recruiting side. You know, we are seeing, for example, higher rates of interviews, and this is a good leading indicator for us that, you know, the demand in the business is strong, and our business units are going out to do that recruiting, and we're getting, you know, very consistent yields out of our recruiting process. So I really do think it is more related to a little bit higher turnover than expected, rather than any particular challenge or change in the talent marketplace and so forth. I mean, our employee value proposition remains strong, and we have good confidence going forward as we increase the activity level in recruiting, that we will be able to, you know, return to that headcount growth. Very helpful. Thank you. You're welcome. Once again, if you would like to ask a question, please press Star and One. Our next question comes from Josh Chan from UBS. Please go ahead with your question. Hi, good afternoon, Catherine, Rich. Thanks for taking my questions. It sounds like in the reactive business, it was the first quarter that perhaps it kind of turned a little negative. I realize that it comes, but I guess, could you review for us what you expect the reactive business trajectory to be in the coming quarters? For example, what's embedded in Q4 with that mid-single digits within reactive, and any kind of thoughts into the shape into 2025, if you have visibility into that? Thank you. Yeah. So, we definitely, you know, as we had indicated a year ago, we in the second and third quarters of even last year, we were at 20-plus% year-over-year growth and 2023 over 2022. As we got into the fourth quarter last year, that was still, and the first quarter of 2024, that was still at a mid-teens year-over-year growth rate. So, you know, we've historically seen this reactive business grow in the mid- to high-single digits growth rate. The engagements we got were not a one big, you know, 3, 4, 5% of revenue engagement. It was, if you recall, a diversified group, engagements we had that materialized into engagements that were running 1, 1.5% of revenues. But there were a few of them in the energy sector, a few of them in the life sciences sector, a few of them in the transportation sector. So there were just a little more, but nothing that was unusual. But clearly, we were getting the calls when the stakes were high and things were coming in. What we've seen is still a strong demand for us, but the particular engagements ongoing right now are, we don't have as many that are of that size. We still are seeing the volume, we just don't have as many at that size. So, while I think the hurdle in the fourth quarter and into the first quarter is a little bit lower than the third, it is still above normal, and I expect us to you know, continue to grow our underlying sort of volume here of business over time, and to work through that. But that, that's sort of where we're things are laying out at this point in time. And I would expect that you know, we're gonna for the you know, for the long-term future of the company and even out into next year, that we'll start to see year-over-year growth in the reactive business. There's just too many... You know, I think we've got the leading market position, we're evolving our services, and the issues are continuing to get more complex, which is why we're quite encouraged by when we're getting called and why clients need Exponent because of our multidisciplinary teams, because the issues are more complex. That makes sense. Thank you for the color there. On the FTE, I think this is the second quarter where FTE was less than expected. I guess, is there a point where you think the less than expected FTE could start to impact growth going forward? It's obviously driving good utilization now, but just wonder how you're thinking about the growth outlook given the staffing level. Thank you. Yeah. Well, thank you, Josh. I mean, we do. When we think about growth, right? Headcount obviously is a big driver on that, but there are other drivers as well. You know, we still have the ability to surge, you know, with regard to our utilization. You know, this team is ready to meet the needs for clients, sort of whatever it takes, and they are accustomed to doing that. And so, you know, and we. Look, we've demonstrated the ability to operate at, you know, 75% for the year, and so as that demand increases, you know, even if the headcount growth is lagging, we have the ability to capitalize on that demand. Yeah. So I think your assessment of a long-term model is you can't, you know, that can't continue forever. But in the short term, meaning, you know, fourth quarter, as we turn into the first quarter and begin to hit that growth, or if there was something, as you say, that delayed that, can we take that on in the short term? Yes. In the long term, we need the right demand, but we also, we will need the people to meet that demand. That's really helpful color. Thanks, for the color, and thanks for your time. You're welcome. And ladies and gentlemen, with that, we'll be concluding today's question and answer session, as well as today's conference call. We do thank everyone for attending. You may now disconnect your lines.