Good morning, and thank you, Mark. Good morning, everyone. I'm Paul Maleh. I'm President and CEO of Charles River Associates. I hope to provide you a little bit of color onto CRA and also give you a little bit of insight as to what has made us successful as a firm. CRA in 2025 is celebrating its 60th year. We were founded back in 1965 from some professors from Harvard and MIT whose goal was to bring academic quality research to the business world to help leaders make more informed decisions. We were able to celebrate this important anniversary by ringing the bell back in June. It was very much a feel-good moment where we got to celebrate with our colleagues for the journey that we've been on together, and also be able to celebrate with our shareholders on it.
I think all constituent groups have enjoyed some wonderful returns, and this presentation is to try to give you a summary of that experience. In the blue banner is our mission statement, and that mission statement is pretty consistent with the one that existed back in 1965. As I said, we're trying to bring academic quality research to the business world through providing insights into information. CRA is divided up into two main lines of business: legal and regulatory, which makes up roughly 80% of our revenue, and management consulting, the remaining 20%. Our clients are well-known, both the ultimate clients and also the law firms that we represent across these matters. Our sources of distinctiveness go to really the quality of our colleagues and their ability to provide insightful analysis to the business leaders on their particular matters.
We're a global firm with more than 20 offices across 10 countries, and the split of revenue across these geographies is also 80% North America and 20% international. As with any consulting firm, it starts and ends with the quality of our colleagues. About 40% of my senior colleagues have PhDs. Almost three-quarters of them have advanced degrees. So it's very much a highly pedigreed shop. If CRA were a university, we'd be one of the most selective universities in the world, accepting less than 2% of campus applicants. This success in recruiting the best and brightest and being able to be as selective as we are on campus is because of the environment we create at CRA for really bright and talented people to do remarkable things. As such, we have very little turnover within our ranks.
The box in the upper right-hand corner is probably a statistic I am most proud of, at CRA. Every year I present to the board our top 30 revenue generators. As you can imagine, in any given year, people go in and out of this top 30 cohort. Over a five-year period of time, we end up with a union of somewhere between 50 and 60 Vice Presidents. Over that same five-year period of time, we have experienced less than 10% voluntary turnover amongst these top revenue generators. Now, that's not 10% annually. That's 10% in total. The reason I highlight this box is that these individuals can go anywhere they want, but they are choosing to stay at CRA, and they are choosing to provide these exceptional services to our clients through our platform. I mentioned earlier, we have two main lines of business.
The management consulting side is made up of life sciences, energy, and maritime and auctions and competitive bidding. All the other practices make up the legal and regulatory arena. The largest practice in the firm is our antitrust and competition economics practice, which makes up roughly 40% to 45% enterprise. If I look at our top three practices, that is antitrust and competition economics, life sciences, and our forensic services practice, that probably captures roughly three-quarters of the firm's total revenue. Many of you may not have heard of CRA. We are a well-kept secret, but you definitely have heard of our clients. In just the past two years, we have worked on behalf of 85 of the Fortune 100 companies. What is remarkable about this statistic is that we are not a subscription-based business. We do not have annuity-type contracts; we operate on a project-by-project basis.
These clients come to CRA time and time again for their most challenging matters, whether it's within the legal and regulatory arena or the management consulting arena. The statistic is even more gaudy when you look at the top 100 law firms here. Amongst the AMLA top 100 law firms, in just the past two years, we have worked for 98 of those firms. The degree of repeat business is quite remarkable. When you have these kind of clients, and they keep coming back to CRA, and you have the quality of people that we have, it should be no surprise that we are delivering exceptional financial performance. If you hear, you just have what the revenue growth is through 2025, what it was in 2024, and then the previous five years. CRA has been growing for the last 15 years, roughly, you know, between 8% and 10% a year.
In addition to this impressive revenue growth, we've been able to grow profitability at an even faster rate. We're doing this 100% financed through the operations of the firm. We have no debt. We have a line of credit that we access during the year through working capital needs. For as long as I can remember, by year-end, that balance is at zero. Our growth is funded through internal operations. Not only is it funded through internal operations, but by the end of the year or during the year, we have excess capital that we return back to our shareholders. We've done that very aggressively, predominantly through stock repurchases that make up about 75% of our capital redistribution to shareholders, and then a cash dividend that we introduced a few years ago. The other impressive thing here is that we are buying back our shares because they are attractively priced.
As you can see through the notation underneath the amount of capital redistribution in the stock repurchases column, we quickly see an attractive return through these repurchases. If you look at over the last five years, the average price of our share repurchases is $88. Last I checked, we were trading over $200 today. In just fiscal 2024, average repurchase price was $162. In 2025, it is $187. We are buying back our shares because our intrinsic valuation of this enterprise has consistently exceeded what we see in terms of the prevailing stock price. The investment thesis is really quite simple. Our objective is to maximize the long-term value per share. We have capital to reinvest in the business. We have capital to reinvest, to grow and grow profitably at that.
When we have that excess capital, we're going to return it back to our shareholders and reduce the share count. I'll skip over this one. One important piece here that I want to just highlight: revenue is revenue, and you can clearly see the impressive growth rate through the years. We present an EBITDA margin, both margin and dollars that we report out. The one note that I would make for everyone embedded in that EBITDA margin is a non-cash charge associated with the amortization of forgivable loans. Forgivable loans is a vehicle we use to drive our inorganic growth. It's purchase considerations. Since we're purchasing individuals or small groups of individuals, we cannot get purchase price accounting on that. If you really want to know the cash-generating capacity of our profitability, you would take EBITDA and add back the non-cash amortization.
The margin in which the Executive Officers at CRA are measured against, the margin in which our banks look to measure our lending capacity, is the summation of EBITDA plus the non-cash amortization of loans. A number of years ago, we used to provide a measure called adjusted EBITDA, which added the two measures. The SEC did not like that approach and says we cannot add them for you. I can tell you about EBITDA. I can tell you about non-cash amortization of forgivable loans. I can even present them to you on the same page, but I cannot add them together. If you really want to see what the cash-generating ability of our profits are, I would add, if you're just looking at year-to-date 2025, I would add the 13% plus the 5.2% to get a truer measure of our performance on it.
A lot of people think that this adding back of the capital is a bit of smoke and mirrors here. In the next handful of slides, what we try to do is we try to demonstrate where our money is going, right? We're generating a lot of cash as a firm. Where is it going? The key thing to remember here is there's no debt. At the end of the year, we have no debt. It's 100% financed. The only way that this foots is if the forgivable loan is a legitimate add-back to the EBITDA margin. Our uses of capital can be summarized across three buckets: the use for talent acquisition and maintenance, the use of CapEx, which is pretty minimal, just like buying new computers or when we have to do cash outlays for lease expansion, and the redistribution back to our shareholders here.
I'm just going to spend a few slides here telling you a little bit about each component of that redistribution. We use capital to drive growth, both in support of organic initiatives and our inorganic pursuits. Over this five-year period of time, revenue has increased more than 50% at CRA, more than 50% or $230 million. Our growth in total, about two-thirds of it, can be characterized as organic growth, and about a third is through inorganic pursuits. We treat inorganic pursuits on a value basis, and our return of capital over an extended window of time has been in the mid-teens. We are deploying the capital effectively and earning true economic returns back to the corporation. As I said, the use of CapEx has been pretty minimal, mostly for just day-to-day computer needs.
As you see in the last box there, the non-real estate CapEx is typically very modest and averages less than $5 million a year. We do not anticipate the next five years' need for CapEx to be markedly different than what the previous five years of CapEx have been. On the redistribution, we have given back to our shareholders over this five-year period of time almost $200 million. That has reduced our share count by 1.7 million shares, as I said previously, at an average price of $88. Just in the last five years, we've reduced the share count by 13%. If you go back over a longer window of time, say the last decade or 12 years, I think our share count reduction is upwards of 35%. This really provides the pop in our efforts to maximize the long-term value per share. Back in 2016, we initiated a dividend.
The one piece of clarification I want to add to that is we initiated the dividend not because we believe our share price is fully valued. We initiated the dividend because we're a small-cap stock, and we need more eyes on our stock in order to close the value gap that we observe in our price. It has introduced a great group of shareholders into CRA, and I think it has contributed to closing that value discrepancy. It is not just to get the new eyes in there, but the fact is, since 2016, we have more than tripled our dividend to where it sits currently at $0.49 per share. All put together, in addition to the share price appreciation, we also have a pretty attractive shareholder yield of roughly 6%. Wow. It would be nice if it was 16%, I guess.
That is average shareholder yield of 6% relative to our average market capitalization, which has been increasing quite substantively. I don't know exactly. I think over the last five years, the share price appreciation has been upwards of 350%. Over the last 10 years, our share price has increased almost tenfold. In addition to the redistribution of capital, I think we're also driving value on it. Here's a slide that I mentioned earlier about the reduction of the share count. Not only is the capital going to all of you, it's making an impact on the shares outstanding of the corporation. Expectations going forward, we provide annual guidance. We give updates to that guidance quarterly. If I look at the next, say, five years, I really don't think there should be much of a change than what we have experienced in the previous five years.
Our markets are large, the markets are growing, and we have demonstrated success in those marketplaces. I think we should be able to grow the top line consistent with what our experiences have been. The profit margin may not expand as rapidly as it did in the previous five years, but I also do not expect to give any of those gains back. I still think there is some opportunity for margin expansion, but not to the magnitude of the significant expansion that we've enjoyed in the previous five years. With that, Mark, I think I'm going to stop and see if there's any questions from our colleagues.
Excellent. As a reminder, folks, if you would like to ask a question, just click on the Q&A button at the bottom of your screen. We do have a few that are already in queue, so we can start there. The first question asks around client activity, and maybe you could talk a little bit about how client needs are changing and evolving in your core advisory areas.
Sure. To no surprise, the world's not getting any more simple, right? Usually, complexity provides opportunities for firms like CRA to help clients, as I said, make more informed decisions. That complexity, a lot of it, is falling right at the intersection of economics and regulation. The regulatory environment here in the United States is not getting any more clear, and the regulatory environment abroad also remains rather complex. The primary demand factors are there for CRA. What we've been trying to do is continue to add depth to the services that we've been providing now for many years. Our lead flow has been expanding nicely, and our ability to convert that lead flow into revenue-generating projects has been great. We're all looking for the reemergence of M&A activity more broadly in the marketplace.
Even with the lackluster aggregate numbers, CRA is still getting its own and is still a party in all the major acquisition discussions that one sees.
Excellent. We have another question regarding how do you feel about seeing the opportunities to potentially diversify it further into recurring or advisory-style engagements as opposed to project-based engagements?
Right now, I do not see CRA expanding the breadth of the service offerings. The most I could say is we always look for near adjacencies to our core competencies. A lot of times people think about going into a subscription-based or more of an annuity-based revenue stream to add consistency. It is my view that if you are a leader in the services you provide, that in and of itself provides the resiliency to macroeconomic shocks. If you look at CRA's performance over a very long window of time, 10, 15 years, we have performed pretty exceptionally across a variety of macro and geopolitical shocks here. I think quality, for CRA, is the best form of diversification.
Great. We do have a question regarding, specifically, it was asking around DOGE and the layoffs of senior personnel and what impacts that may have had on your hiring. Maybe you could also expand on that with some of the commentary that you gave most recently as to hiring during their year two Q earnings.
Sure, sure. We have not felt a direct impact of DOJ. We were not one of the consulting firms that were called in and asked to provide justification for the levels of spend or activity on that. That's what I mean by a direct impact of the DOJ inquiries. Clearly, CRA, like many other firms, would be impacted by a reduction of budget by the regulatory bodies, maybe on willingness to spend for that. With respect to the hiring on it, one of the actions of DOJ was to rescind some hires for PhD-level candidates at the DOJ and the FTC. These were very high-quality candidates, and CRA took advantage of that by increasing our hiring to those professionals into CRA. We're thrilled with that. It's unfortunate that these people were disrupted, but hopefully they've used the CRA home as a great second chance here.
Excellent. We do have a question around pricing. Actually, maybe a couple that are kind of touching on the same area. Maybe you could talk a little bit about any pricing pressures or opportunities that you're seeing in core segments and practice areas. Does the company still maintain strong pricing power due to specialized expertise?
Sure. Let me try to break that up a little bit. In any given year, I think CRA enjoys roughly a 2% to 4% price increase, and 2025 was no different than that. Those price increases seem to have stuck, in that I have not seen any outright rejection of the new stated rates. I have not seen any increase of write-offs or reserves on projects, or requests for discounts. We're collecting, our collections are consistent with what our collections have been in years past. I would be remiss if when talking about price increases, I'm not talking about also the value added of CRA. If one's going to increase the price, you also need to strive to improve the value provided to your clients. I think with the volatility, with maybe the advent or continued expansion of AI, clients want to make sure you're being efficient.
Clients want to make sure that their consulting dollars are going to the highest value-added service. CRA now, just as it has been, just as it has during its entire life, is always looking to move to a higher value-added service. With the passage of time, with the advent of technology, lower-level kind of services will be commoditized and priced away from firms like CRA. That is not anything new, and I think we are doing a pretty good job on that continued evolution of our services.
We do have a question that is an interesting one, particularly for those who may be relatively new to the name. It asks how the company differentiates itself against large, global strategy firms on one side and specialized boutiques on the other, sort of the competitive advantages, if you will.
Yeah, that seems to be the question du jour. We spent a lot of time, right? We just gathered as a group of Vice President, about 170 strong, this past weekend, for our annual retreat where we talk about the future of CRA. If anyone was in that room and had an opportunity to meet with my colleagues, that question would never get asked. They're a unique, remarkable set of talent, and the ability to bring that talent together is what has given the longevity and vibrancy to this organization. We try to stay true to what our core competencies are, which is the intersection of economics and regulation. We have not, you know, veered into areas outside of core competency. We believe there's a lot of depth to continue to provide our services in that arena. We can't compete head-to-head against the Goliaths in the management consulting world.
We try to stay in the area of specializations, particularly in life sciences and energy or the electric utility industry, that are really at the forefront of this economic and regulation intersection here. Stay true to what you do well, and what differentiation you could provide to your services.
Great. I'd be remiss if I didn't touch on maybe the news of the day and maybe our last question together, with interest rates. Maybe you could talk a little bit about historically what you've seen in a rate cut environment and how that might, maybe what your, but what potential might be for M&A activity.
Sure. The expectation is M&A activity would go up, okay? As capital becomes a little cheaper, maybe as a signal for the desire for the expansion of the overall economy. The caveat I would put there is there's a lot of other variables moving right now that maybe complicate a firm's ability to execute on these large deals. There's been predictions of M&A surging back now for a few years, and we yet have seen that surge. With all that said, for the matters that are being announced, CRA is getting its fair share of those matters on being able to represent clients on these complicated and challenging matters. We hope, but we've been performing pretty admirably in a less than optimal environment with respect to M&A.
Absolutely. That's actually a perfect place to end our time together here today. I want to thank everyone for joining us and for participating in the presentation with Charles River Associates. Everybody have a wonderful and productive remainder of the day.
Great. Thank you very much, everyone. Thank you.