CRA INTERNATIONAL, INC.CRAI
CRA INTERNATIONAL, INC. Revenue Disclosure
Revenues and Allowances
The contracts CRA enters into and operates under specify whether the projects are billed on a time-and-materials or a fixed-price basis. Time-and-materials contracts are typically used for litigation, regulatory, and financial consulting projects while fixed-price contracts are principally used for management consulting projects. In general, project costs are classified in costs of services and are based on the direct salary of CRA's employee consultants on the engagement, plus all direct expenses incurred to complete the project, including any amounts billed to CRA by its non-employee experts.
Disaggregation of Revenue
The following tables disaggregate CRA's revenue by type of contract and geographic location (in thousands):
| Year Ended | Year Ended | Year Ended | |||||||||||||||
| Type of Contract | January 3, 2026 (53 weeks) | December 28, 2024 (52 weeks) | December 30, 2023 (52 weeks) | ||||||||||||||
| Consulting services revenues: | |||||||||||||||||
| Fixed-price | $ | 130,552 | $ | 126,657 | $ | 113,983 | |||||||||||
| Time-and-materials | 621,031 | 560,757 | 509,993 | ||||||||||||||
| Total | $ | 751,583 | $ | 687,414 | $ | 623,976 | |||||||||||
Revenues have been attributed to locations based on the location of the legal entity generating the revenues.
| Year Ended | Year Ended | Year Ended | |||||||||||||||
| Geographic Breakdown | January 3, 2026 (53 weeks) | December 28, 2024 (52 weeks) | December 30, 2023 (52 weeks) | ||||||||||||||
| Consulting services revenues: | |||||||||||||||||
| United States | $ | 602,208 | $ | 558,803 | $ | 493,923 | |||||||||||
| United Kingdom | 101,211 | 86,533 | 94,445 | ||||||||||||||
| Other | 48,164 | 42,078 | 35,608 | ||||||||||||||
| Total | $ | 751,583 | $ | 687,414 | $ | 623,976 | |||||||||||
Reserves for Variable Consideration and Credit Risk
Revenues from CRA's consulting services are recorded at the net transaction price, which includes estimates of variable consideration for which reserves are established. Variable consideration reserves are based on specific price concessions and those expected to be extended to CRA customers estimated by CRA's historical realization rates. Reserves for variable consideration are recorded as a component of the allowances for accounts receivable and unbilled services on the consolidated balance sheet. Adjustments to the reserves for variable consideration are included in revenues on the consolidated statements of operations.
CRA also maintains allowances for accounts receivable and unbilled services for estimated losses resulting from clients’ failure to make required payments. Under ASC Topic 326, Financial Instruments—Credit Losses, CRA estimates allowances based on historical charge-off rates, adjusted for days sales outstanding and expected changes to clients’ financial conditions during the anticipated collection period. Bad debt expense, net of recoveries of previously written off allowances, is recorded as a component of selling, general and administrative expenses on the consolidated statement of operations.
A rollforward of the variable consideration and doubtful accounts reserves for accounts receivable, which includes allowances for doubtful accounts of $1.8 million and $1.1 million as of January 3, 2026 and December 28, 2024, respectively, is as follows (in thousands):
| Fiscal Year | Fiscal Year | ||||||||||
| 2025 | 2024 | ||||||||||
| Balance at beginning of fiscal year | $ | 5,659 | $ | 4,335 | |||||||
| Increases to reserves, net of recoveries | 7,155 | 5,355 | |||||||||
| Amounts written off and foreign currency translation | (6,150) | (4,031) | |||||||||
| Balance at end of fiscal year | $ | 6,664 | $ | 5,659 | |||||||
A rollforward of the variable consideration and doubtful accounts reserves for unbilled services is as follows (in thousands):
| Fiscal Year | Fiscal Year | ||||||||||
| 2025 | 2024 | ||||||||||
| Balance at beginning of fiscal year | $ | 1,411 | $ | 1,629 | |||||||
| Increases to reserves, net of recoveries | 8,404 | 10,565 | |||||||||
| Amounts written off and foreign currency translation | (8,326) | (10,783) | |||||||||
| Balance at end of fiscal year | $ | 1,489 | $ | 1,411 | |||||||
The following table presents CRA's bad debt expense, net of recoveries of previously written off allowances (in thousands):
| Year Ended | Year Ended | Year Ended | |||||||||||||||
January 3, 2026 (53 weeks) | December 28, 2024 (52 weeks) | December 30, 2023 (52 weeks) | |||||||||||||||
| Bad debt expense (recovery), net | $ | 746 | $ | 534 | $ | 533 | |||||||||||
Reimbursable Expenses
Revenues also include reimbursements for costs incurred by CRA in fulfilling its performance obligations, including those relating to travel, out-of-pocket expenses, outside consultants and other third-party vendor expenses. CRA recovers substantially all of these costs. The following expenses are subject to reimbursement (in thousands):
| Year Ended | Year Ended | Year Ended | |||||||||||||||
January 3, 2026 (53 weeks) | December 28, 2024 (52 weeks) | December 30, 2023 (52 weeks) | |||||||||||||||
| Reimbursable expenses | $ | 72,506 | $ | 65,739 | $ | 65,277 | |||||||||||
Contract Balances from Contracts with Customers
The timing of revenue recognition, billings, and cash collections results in accounts receivables, unbilled services, and contract liabilities in the consolidated balance sheet. Revenues recognized for services performed, but not yet billed to clients, are recorded as unbilled services. The following table presents the open and closing balances of CRA's accounts receivable, net and unbilled services, net (in thousands):
| Year Ended | Year Ended | Year Ended | ||||||||||||||||||
| January 3, 2026 (53 weeks) | December 28, 2024 (52 weeks) | December 30, 2023 (52 weeks) | ||||||||||||||||||
| Accounts receivable, net | $ | 183,264 | $ | 162,293 | $ | 142,729 | ||||||||||||||
| Unbilled services, net | $ | 65,598 | $ | 57,255 | $ | 56,827 | ||||||||||||||
CRA defines contract assets as assets for which it has recorded revenue because it determines that it is probable that it will earn a performance-based or contingent fee, but is not yet entitled to receive a fee because certain events, such as completion of the measurement period or client approval, must occur. The contract assets balance was immaterial as of January 3, 2026, December 28, 2024 and December 30, 2023.
When consideration is received, or such consideration is unconditionally due from a customer prior to transferring consulting services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue after performance obligations have been satisfied and all revenue recognition criteria have been met. Contract liabilities are included in deferred revenue and other liabilities in the consolidated balance sheet. The following table presents the closing balances of CRA's contract liabilities (in thousands):
| Year Ended | Year Ended | Year Ended | |||||||||||||||
| January 3, 2026 (53 weeks) | December 28, 2024 (52 weeks) | December 30, 2023 (52 weeks) | |||||||||||||||
| Contract liabilities | $ | 9,008 | $ | 7,340 | $ | 6,037 | |||||||||||
CRA recognized the following revenue that was included in the contract liabilities balance as of the opening of the respective period or for performance obligations satisfied in previous periods (in thousands):
| Year Ended | Year Ended | Year Ended | |||||||||||||||
January 3, 2026 (53 weeks) | December 28, 2024 (52 weeks) | December 30, 2023 (52 weeks) | |||||||||||||||
| Amounts included in contract liabilities at the beginning of the fiscal year | $ | 7,159 | $ | 5,885 | $ | 6,700 | |||||||||||
| Performance obligations satisfied in previous fiscal years | $ | 3,165 | $ | 3,607 | $ | 2,912 | |||||||||||
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.