Good morning, and welcome to the FTI Consulting fourth quarter and full year 2019 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 then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Mollie Hawkes, Vice President of Investor Relations. Please go ahead.
Good morning. Welcome to the FTI Consulting conference call to discuss the company's fourth quarter and full- year 2019 earnings results, as reported this morning. Management will begin with formal remarks, after which they will take your questions. Before we begin, I would like to remind everyone that this conference call may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, future revenues, future results and performance, expectations, plans or intentions relating to financial performance, acquisitions, share repurchases, business trends, and other information or other matters that are not historical, including statements regarding estimates of our future financial results and other matters.
For a discussion of risks and other factors that may cause actual results or events to differ from those contemplated by forward-looking statements, investors should review the safe harbor statement in the earnings press release issued this morning, a copy of which is available on our website at www.fticonsulting.com, as well as other disclosures under the heading of Risk Factors and Forward-Looking Information in our annual report on Form 10-K for the year ended December 31st, 2019, and in our other filings with the SEC. Investors are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this earnings call and will not be updated. During the call, we will discuss certain non-GAAP financial measures such as total segment operating income, adjusted EBITDA, total adjusted segment EBITDA, adjusted earnings per diluted share, adjusted net income, adjusted EBITDA margin, and free cash flow.
For a discussion of these and other non-GAAP financial measures, as well as our reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures, investors should review the press release and accompanying financial tables that we issued this morning, which include these reconciliations. There are two items that have been posted to the investor relations section of our website this morning for your reference. These include a quarterly earnings presentation and an Excel and PDF of our historical financial and operating data, which have been updated to include our fourth quarter and full year 2019 results. Of note, during today's prepared remarks, management will not speak directly to the quarterly earnings presentation posted to the investor relations section of our website.
To ensure our disclosures are consistent, these slides provide the same details as they have historically, and as I've said, are available on the investor relations section of our website. With these formalities out of the way, I'm joined today by Steven Gunby, our President and Chief Executive Officer, and Ajay Sabherwal, our Chief Financial Officer. At this time, I will turn the call over to our President and Chief Executive Officer, Steven Gunby.
Thank you, Mollie. Good morning, and thank you all for joining us. I'd like to spend a few minutes up front talking about the quarter, the year, guidance, and most important, how our people have been building this company, have been driving it, have been seizing the opportunities in front of us and therefore seizing the future for this company, and why we, therefore, are confident that this terrific story can continue for some time to come. I'll turn the floor over to Ajay, who will dive a bit deeper into the numbers. As I'm sure many of you saw in our press release this morning, this quarter was once again terrific. Revenues were up 19% compared to the fourth quarter of 2018. Because of our investments in growth, i.e. the capacity we have added to our cost structure, our adjusted EPS for the quarter was not a record.
It was a bit below last year's fourth quarter, record fourth quarter adjusted EPS. It was the second highest fourth quarter adjusted EPS ever in our history, and at a level that is more than double the average fourth quarter adjusted EPS we delivered between 2014 and 2017. Even in the face of all of the investments we are making, we had a great quarter. In terms of the year, I would have to describe it as incredible. We had record revenues, in particular double-digit organic growth for a second year in a row, record GAAP EPS, which marks seven consecutive years of GAAP EPS growth, and record adjusted EPS, marking five consecutive years of adjusted EPS growth. It is that sort of sustained trajectory versus quarters or individual years that I think is most important.
Because that sort of trajectory, along with progress on internal metrics such as the number of promotions and morale, the addition of core adjacencies, the number of folks who are calling us from the outside who are keen to join us, together all suggest that we are beginning to realize the incredible potential of this company and of this group of professionals. The core of what is driving these results is straightforward. We have been betting behind terrific professionals. Now, I'm sure you all say getting sustained growth in a professional service is more than that, and of course it does require a lot more, and it requires discipline. You have to be willing to name issues. You have to be willing to challenge yourself where you're kidding yourself. You have to look at expenditures closely and make sure they're value added and a whole lot of other things.
It requires a lot of discipline. All of that discipline, all of it, is in support of positive growth-oriented goals. You follow them to make sure you are focused on supporting the right people, supporting the right bets, and have the money to support those bets. All sustainable growth in professional services comes from finding great professionals with ambitions to grow their businesses, to serve clients better, to build teams, and having the courage and the conviction and the wherewithal to bet behind them. If you make those bets, you can have bad quarters. In fact, betting on the future can make a weak quarter even weaker, and you can see that in our history. For example, we continued to bet during some bad quarters in 2016 and 2017, and surely made those quarterly financial results worse by making those bets.
Whether they're outside hires that cost us money that year or promotions that weren't fully utilized, et cetera. Those bets, however, have succeeded enormously and are a core driver of our success today, and a driver and a platform that we are building on. In general, my experience is by making those sorts of bets, you don't eliminate bad quarters. What you do is you make bad quarters outliers. By betting on your best people, you create a powerful trajectory through the zigs and zags. Not eliminate the zigs and zags, but a powerful trajectory through the zigs and zags that is based on something real. Great people focused on getting ever better at solving our clients' most important issues and creating great relationships externally and internally based on that commitment and those results. Before I turn the call over to Ajay, let me give some perspective on guidance.
We have a management team today that knows that in any point in time, the success we're having, or in bad quarters aren't having, are in many ways driven by the investments we did or didn't make in prior years. They understand that if one stands still and sits on one's laurels and does not make investments, the business won't just stand still, it'll go backwards. We have a management team today that is continually looking for the right bets, whether it's adding capacity to double down on core businesses, investing behind adjacencies, or taking advantage of talent that has been attracted to us because we are viewed as a company that is winning. In 2019, our team did not rest on its laurels. It didn't simply execute a great year.
We continued to make investments that we believe will support the ambition of this company and a powerful growth trajectory into the 2020s. As a result, we exited 2019 with an 18% increase in billable headcount compared to the end of 2018, which reflects a record number of promotions in 2019, our largest class of campus graduates in the history of the company, and once again, a substantial number of lateral hires. Senior professionals who've come to us reflecting the fact that our strength is getting noticed worldwide. All of these moves, of course, increased our cost structure. As we've discussed, these are not the sort of moves you make if your goal is to maximize profitability in a given quarter or even a specific year. The senior people are typically not fully productive for a while as they get to know the firm.
Our new promotes are the future of our company, but you can't expect them to hit their stride fully immediately. The junior staff we've brought on to build teams around our recent senior hires or promotes are typically great investments for the future, but they're often underutilized for a while, et cetera. Our guidance, therefore, reflects that substantial increase in our cost structure. That bet on the future. Though we are anticipating another year of solid organic revenue growth by any historical standard, the midpoint of our adjusted EPS for guidance for 2020 essentially straddles this year's performance. The investments I just talked about that we've made over the last year were not made for 2019 or even for 2020. They were made as commitments to sustaining the terrific trajectory this company is on for many years to come. In 2020, we anticipate making further such investments.
Before I get too dour on flattish guidance, let me perhaps put it into a bit of perspective. If we hit the midpoint of this flattish guidance, of the 2020 adjusted EPS guidance, we will be up more than 40% compared to our actual 2018 adjusted EPS. If we hit the midpoint of our 2020 adjusted EPS guidance, we won't have had sustained double-digit growth over the medium term. We've had sustained extraordinary growth. Even at the low end of the adjusted EPS guidance range for 2020, even that low end is more than double compared to our adjusted EPS for 2016. More than three times our adjusted EPS of 2014. Doubling every four years? It's not so bad. I hope we have some perspective.
Our guidance is flattish only in comparison with some remarkable years, and in particular, a year last year where adjusted EPS was up 45% and a year which was more than double the adjusted EPS of 2017. I think this is important. I think it's important because I'm hoping people will not mistake our guidance for this year as any lack of confidence. To the contrary, it is an expression of complete confidence that by investing, by doing what we have been doing, attracting great people, supporting them in their development, betting behind them, we will, over any medium term, continue to build businesses and new adjacencies, extend our core positions to new places, grow our brand, attract, grow, retain great people, and take market share, and thereby deliver for you, our shareholders, but also importantly for the people that make it happen.
With that, let me close by first thanking and congratulating my extraordinary colleagues for what you have accomplished in 2019, but more important now over an extended period of time. Congratulations. It's a joy to lead you, to lead this firm. Secondly, also congratulate and thanking those of you on this phone who have been with us for an extended period of time and who will continue to be with us on this journey. Ajay, you want to give some more details?
Thank you, Steve. Good morning, everybody. In my prepared remarks, I will take you through our results for the full year and fourth quarter of 2019, segment financial results, and our guidance for 2020. I will begin with some highlights. In 2019, we were able to maintain staff utilization while growing billable headcount by a record 17.8%. The resulting sharp revenue growth outpaced costs, thereby boosting margins. Lower cash interest expense and a lower tax rate further boosted adjusted net income. For the year, every one of our business segments grew both revenues and adjusted EBITDA, and at healthy levels. Revenues of $2.35 billion increased $324.8 million or 16%. GAAP EPS of $5.69 increased 44.8%. Full- year adjusted EPS of $5.80 increased 45%. Full year adjusted EBITDA of $343.9 million grew 29.4%.
Our 17.8% year-over-year increase in billable headcount in 2019 compares to a 5.1% increase in billable headcount in 2018. We added 668 billable professionals in 2019, which is more than three and a half times the 183 billable professionals we added in 2018. Importantly, SG&A as a percentage of revenues declined 160 basis points from 23% of revenues in 2018 to 21.4% of revenues in 2019. We lowered our cash interest expense by $13.5 million compared to 2018. This decline primarily reflects the lower average interest rates on our 2% convertible notes outstanding in 2019 compared to the 6% senior notes outstanding in 2018. Our 2019 effective tax rate of 24.9% compared to our effective tax rate of 27.5% in 2018.
The 2.6 percentage point decline compared to 2018 was primarily due to discrete items related to the change in the estimated tax impact from the gain on the sale of Ringtail in September 2018 and share-based compensation. Overall, we are extremely pleased with these results. I will turn to fourth quarter results. For the quarter, revenues of $602.2 million increased $97.2 million or 19.3%. After delivering record year-to-date revenues through the first three quarters of 2019, we had anticipated a slowdown in the fourth quarter. We did see sequential slowdowns in Corporate Finance & Restructuring and in Technology. Contrary to our expectations, we saw sequential revenue growth in Economic Consulting, FLC, and Strategic Communications. Worth noting, in the quarter, $10.5 million of the increase in revenues were from pass-through revenues, which have no impact on earnings.
GAAP EPS of $0.76 included $2.2 million of non-cash interest expense related to our convertible notes, which reduced EPS by $0.04. This compared to GAAP EPS of $0.61 in the fourth quarter of 2018. As a reminder, fourth quarter of 2018 EPS included a $9.1 million loss on the early extinguishment of debt, which reduced EPS by $0.17 and $2.1 million of non-cash interest expense related to our convertible notes, which reduced EPS further by $0.05. Adjusted EPS of $0.80, which excludes the non-cash interest expense compared to adjusted EPS of $0.83 in the prior year quarter. Worth noting, Q4 of 2019 EPS was negatively impacted by FX remeasurement losses due to the strengthening of the British pound and euro late in the year as compared to the US dollar.
This reduced our fourth quarter of 2019 EPS by $0.11 compared to Q4 of 2018, and $0.14 compared to Q3 of 2019. Our convertible notes also caused dilution of approximately 225,000 shares in weighted average shares outstanding for the quarter, as our share price on average of $109.26 this past quarter was above the $101.38 conversion threshold for our notes. Net income of $29.1 million compared to $23.7 million in the fourth quarter of 2018. Adjusted EBITDA of $58.3 million or 9.7% of revenues compared to $53.7 million or 10.6% of revenues in the prior- year- quarter. The increase in Adjusted EBITDA was primarily due to higher revenues across all business segments, which was only partially offset by increased costs from variable compensation and headcount growth.
In recognition of our exceptional 2019 performance, we trued up bonus accruals in Q4, and salary costs increased due to our record head count growth and promotions in 2019. SG&A expenses of $133 million compared to $118.2 million in Q4 of 2018. The year-over-year increase in SG&A expenses was primarily driven by higher compensation and legal expenses. Turning to our performance at the segment level for the quarter. In Corporate Finance & Restructuring, revenues of $181.1 million increased 25.1% compared to Q4 of 2018. The increase in revenues was primarily due to higher demand for restructuring services, especially in the energy, telecom, and healthcare verticals. The first full quarter of revenues from our acquisition in Germany and higher success fees. We also realized increased demand for our transactions and business transformation services.
Adjusted segment EBITDA of $24.8 million or 13.7% of segment revenues compared to $24.3 million or 16.8% of segment revenues in the prior year quarter. Sequentially, revenues decreased 5.6%, which was largely a result of an increase in paid time off taken during the quarter, as well as a slowdown in our EMEA restructuring business as a large engagement rolled off. Moving on to FLC. Revenues of $150.3 million increased 13.8% compared to the prior year quarter. The increase was primarily driven by increased demand for investigations and dispute services. During the quarter, we had higher demand for our forensic accounting and advisory services in North America and EMEA, including anti-money laundering and mortgage-backed security engagements. Adjusted segment EBITDA of $17.4 million or 11.6% of segment revenues compared to $21.5 million or 16.3% of segment revenues in the prior- year- quarter.
Sequentially, revenues increased 5.3% from improved demand and higher realized pricing in North America and EMEA. Economic Consulting revenues of $153.1 million increased 19.2% compared to Q4 of 2018. The increase in revenues was primarily due to higher demand for M&A-related antitrust, financial economics, and international arbitration services. Adjusted segment EBITDA of $17.3 million or 11.3% of segment revenues compared to $12.1 million or 9.4% of segment revenues in the prior- year- quarter. Sequentially, revenues increased 8%. The uptick in mega deals heightened potential for trade conflicts and non-M&A-related antitrust scrutiny continue to create opportunities for us globally. In Technology, revenues of $51.5 million increased 23.5% compared to Q4 of 2018. The increase in revenues was largely due to higher demand for global cross-border investigations and M&A-related second request services.
Adjusted segment EBITDA of $7.8 million or 15.1% of segment revenues compared to $2.7 million or 6.4% of segment revenues in the prior year quarter. Sequentially, revenues declined 9.7%. The decrease in revenues was driven by lower demand for M&A-related second request and litigation services in North America. Lastly, in Strategic Communications, revenues of $66.3 million increased 14.3% compared to Q4 of '18. Revenue growth was due to an increase in pass-through revenues and higher project-based revenues in North America and EMEA, primarily related to corporate reputation services. Adjusted segment EBITDA of $9.9 million or 14.9% of segment revenues, compared to $11.3 million or 19.5% of segment revenues in the prior year quarter. Sequentially, revenues increased 10.6%, primarily due to an increase in pass-through revenues and higher demand for corporate reputation services in North America and EMEA. I will now discuss certain cash flow and balance sheet items.
Net cash provided by operating activities of $217.9 million compared to $230.7 million in the prior year. While there was a significant increase in cash collections, the pace of collections lagged the revenue increase throughout the year. Free cash flow of $175.8 million compared to free cash flow of $198.4 million in the prior year. The decrease was primarily due to the decline in net cash provided by operating activities, combined with increased capital expenditures for the year. During the quarter, we spent $28 million to repurchase 259,823 shares at an average price per share of $107.71. In 2019, we spent $105.9 million to repurchase 1.258 million shares at an average price per share of $84.16. We ended the year with $369.4 million in cash on hand, up $57.3 million versus the end of 2018.
On February 20th, 2020, the board of directors authorized an additional $100 million for an aggregate authorization of $500 million for share repurchases. As of yesterday, we had purchased 7.1 million shares at an average price per share of $46.66, for an aggregate cost of approximately $333.2 million, with approximately $166.6 million remaining available for share repurchases under the program. Turning to our 2020 guidance. As usual, we are providing revenues, GAAP EPS, and adjusted EPS guidance for the year. We estimate that revenues for 2020 will be between $2.45 billion and $2.55 billion. We expect our GAAP EPS, which includes estimated non-cash interest expense related to our convertible notes of approximately $0.18 per share, to range between $5.32 and $5.82. We expect full-year 2020 adjusted EPS, which excludes the impact of the non-cash interest expense to range between $5.50 and $6.
Our 2020 guidance assumes lower revenue growth compared to 2019, as we continue to have the expectation that our intake of and success rate in winning business may moderate after a year where revenues grew 16%. Furthermore, in 2019, we had success fees of $50.6 million, marking our highest annual success fees ever. We do not expect to achieve this level of success fees in 2020. Our average annual success fees were $33.4 million between 2016 and 2018. Additionally, as Steve and I have both discussed this morning, we have a higher fixed cost base now because of our record levels of hiring and promotions in 2019. It is our expectation that the surge in hiring in the second half of 2019 and continued hiring in 2020 may result in lower utilization in 2020. Lastly, in 2020, we expect our effective tax rate to range between 26% and 28%.
Worth noting, in 2019, we had a $13.5 million reduction in cash interest expense related to the redemption of our 6% senior notes, which were replaced with 2% convertible notes. This year-over-year benefit will not reoccur in 2020. Before I open the call up to questions, I'd like to close with a few remarks. Our performance over the last two years has been achieved even without a traditional tailwind for us, such as a boom in restructuring or record levels of M&A activity. I, like Steve, am confident about our firm's ability to deliver sustainable growth going forward for several reasons. First, we have attracted and continue to invest in very high caliber talent. A combination of such talent with their client relationships, properly leveraged with junior staff, are the key driver of growth.
We are constantly enhancing our core competencies in restructuring, disputes, investigations, et cetera, while pushing at key adjacencies such as business transformation, cybersecurity, and corporate reputation, thereby responding to the evolving needs of our clients versus resting on our laurels. Our balance sheet is in an enviable position. This strength gives us the flexibility to allocate capital and create shareholder value in numerous ways, including organic growth, acquisitions when we see the right ones, and share repurchases. Finally, and most importantly, our leadership team remains focused on organic growth with strong staff utilization. Success with both has resulted in sharply higher revenues and adjusted EBITDA. With that, let's open the call up for your questions.
Thank you. We will now begin the question- and- answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question will come from Tobey Sommer with SunTrust. Please go ahead.
Thank you. I'd like to start out on the hiring climate in 2020 and what your expectations are. Do you anticipate hiring kind of in line with revenue growth or ahead of revenue growth in 2020?
Tobey, this is Steven. Welcome, and thanks for joining us this morning. Look, I think this will be an evolving thought process as the year goes on. A lot depending on the talent we see. Probably less focused on the revenue growth. I think our hiring any given year is more focused on a multi-year ambition that we have. If you don't hire good, terrific junior people, four years later, you don't have good, terrific mid-level people. If you don't hire good, terrific mid-level people, four years later, you don't have people up for promotions. I think we have to think about hiring as less driven by the market we see today as the talent we see and the market we perceive over several years. I used to do a lot of work in the liquor industry.
You can't inventory scotch based on what you're selling this quarter because the scotch will mature in 12 years. You have to inventory scotch based on where you think you can build your business over the next six and 12 years. I think that's what we are moved towards on this. If we see terrific talent out there, we're going to be adding talent even if we have slow quarters. If we don't, we won't be. Does that help?
It does. When you step back and you look at your tenure at the firm, how much revenue do you think the new services that have been launched in the last five or six years are generating for the company? In a separate matter, maybe looking forward, how many new service lines are you incubating now that we may end up hearing about from you in a year or two? Thanks.
Yeah, it's a very good question. I haven't quantified that. Maybe Ajay has a more direct quantification. Look, let me say two things on that. One, it's extraordinarily terrific, the adjacent services we've launched. Cyber has been a great boost and all the extensions of CorpFin have been a great boost and you can look at that across every segment. I wouldn't want everybody to believe that's the driving all the growth here. I think the thing that we've also done, which for a while we weren't doing, is double down in our great core businesses. We've had a great data analytics business. That has so much room to grow. We've had a great investigations business. That has so much room to go. For a while, we thought, "Geez, we're so good at CorpFin in the U.S.
We have no room to grow in the restructuring side. We've proven that wrong. We've gained share in the restructuring side in the U.S. Even in creditor rights, where we were always the strongest by attracting some people in some industries we didn't have, and certainly on the company side, we've grown. The restructuring business, of course, even though we were strong in the U.S., we've now strengthened it in London to the number one player in London, now we've extended it into Germany. I think we had no additional adjacencies we could continue to grow this firm robustly. Now, I think that would not be a healthy thing because most of the adjacencies support our core business. The cyber is not a totally separate thing. It ties to our investigations business and so forth.
I think we will continue to develop adjacencies, but I just don't want the impression to be that all the growth has come from the adjacencies. We have people in our core business who have driven the growth tremendously, and adjacencies have supported and now create other avenues for growth. That's not a quantitative answer, but does that help, Tobey?
Sure. Two questions from me, one for Ajay, and then Steve afterwards. I'd love if you can comment about the acquisition pipeline and what you're seeing. With respect to success fees, Ajay, you gave us an average for prior years and then a kind of high watermark last year. The company is substantially bigger than those average years cited. My sense is that the expansion in Europe may be giving you an opportunity to source large engagements and associated success fees there that weren't previously perhaps available to the firm. Could you comment on that?
You're right, Tobey. Where goes revenue, so goes success fee. There is a correlation, so we should see growth beyond the average.
Steve, if you could comment on acquisitions.
Look, I think acquisitions are tricky. We have done two acquisitions that I just think are terrific and that are home runs. The CDG acquisition we did a couple of years ago in New York has worked out incredibly well. Andersch is a great acquisition, tying into our core, but extending us into a market where we're under-penetrated. I don't think we gave the details of each of those, but we managed to do those at reasonable prices because we offered the professionals in those organizations something that they could use. If you meet Bob Del Genio, he was fabulous, but on a small platform, there are certain size cases he can get. On our platform, he and his team can get much bigger cases, and it's worked out extremely well. Andersch has a real opportunity to grow with us.
We would do those sorts of acquisitions every day of the week if the Sarbanes-Oxley equivalent came along in some place in Europe and the big chunks of businesses came along, we would do those every day of the week. What we haven't been willing to do is outbid people in auctions at very high prices for people who are unclear that they want to really be with us. That gives a short-term pop. You can always make the accounting look good so that you get a short-term pop for earnings. It is not, in my opinion, a sustainable way to grow a professional services firms. We haven't done that. I have no belief that we should start doing that.
We look actively, and we have the balance sheet to do tons and tons of Anderschs and CDGs if and as we find them, but you have to be incredibly selective. The only thing that is good news is we now have an ExCo that I think really clearly understands what good is. Our conversations out there are broader than they used to be. It's a tough market, as you know. I think people are overpaying for acquisitions right and left out there with the loose money out there, and that's not what our strategy is. Our strategy is organic growth, first and foremost, every day that we can do it, wherever we find the talent. When we can find the Andersch and CDGs, wow, we'll do them on top. Does that help, Tobey?
Thank you. I'll get back to you.
Thank you.
Our next question will come from Marc Riddick with Sidoti & Company. Please go ahead.
Morning, Marc.
Hi, good morning. I was wondering a couple of things, if we could sort of go over just to clarify a couple of things on 2020. I wasn't sure if you had mentioned as of yet, CapEx expectations for the year. Is that something that we could provide?
Zip code, $40 million.
Okay, great. I was wondering if you could sort of talk a bit about with the hiring increases that you have and that's offensive in nature. I was wondering if there was generally any particular key focus areas that you're looking at for the beginning of 2020 that you anticipate there or sort of key areas that you sort of have as prioritizations to shore up based on the expectations and some of the opportunities that you see before you.
As Steve mentioned, Marc, it's across the board. Our business is growing across the board. Every segment is growing. Therefore, hiring expectations are also across the board. We do campus hires in the fall, and those are also typically across the board. Of course, the growth rate in EMEA geographically is higher as the revenue growth rate there is higher as well. Beyond that, we don't provide specifics as to what percentage of hiring or growth, et cetera. As Steve mentioned, our objective is to hire strength, not a target percentage.
Okay, that's helpful. I guess I would be remiss if I didn't ask this, even though this may require an anecdotal answer, just wanted to get your thoughts on maybe what you're hearing from clients and what have you, between the combination of the concerns from China regarding the virus, as well as maybe some thoughts or feedback that you've received from clients around what we're seeing in the U.K. with what's taking place with Brexit. Thanks.
Yeah, look, I think that if I had to use one word, it's uncertainty. Everybody has heard of coronavirus, and everybody has heard of Brexit, and there's lots and lots of discussion. There's actually been a lot of discussion on Brexit for now for four years, with pundits specifically making arguments, "This will happen, this will happen, that will happen." I would say most of the pundits have been wrong thus far. The coronavirus, oh, my God, it's even more uncertain, right? Nobody knows. It all of a sudden sprung up in Italy. As far as I know, they can't even find person zero in Italy and how person zero in Italy found it. Look, there's a lot of discussion. It creates uncertainty. What that uncertainty does, nobody really knows, right? You can't believe it's good for the economy.
You can have speculation that says if China stays closed for that long, it's going to have ripple effects in Germany and elsewhere. If the coronavirus spreads around the world, you can then say it's going to have all sorts of ripple effects on the economy. We're not going to act based on that. Obviously, first of all, in terms of us as a company, given the strong bankruptcy practice we have, if the economy had a downturn, we've got some parts of our business that would go up. I think, my experience is, again, we're not trying to build this company for the second quarter of 2021 or for the third quarter of 2020. I think all of our businesses are worth investing in.
You can't, particularly without a clear view of the economy, we're not going to change our plans based on that, but we're monitoring it. What we obviously are monitoring, most importantly on the coronavirus, is the effect on our people. We're actively, Holly is sitting here, I don't know if you're in daily discussions with our folks in Asia and now elsewhere, just about what's going on and making sure people feel comfortable working from home and all that sort of stuff. That's the most definitive stuff. The rest, there's lots and lots of discussion, huge amounts of speculation, and nobody I talk to actually knows. Do you, Marc? If you do, you could share. I'm sure everybody on the call would appreciate enlightenment on how that's all going to play out.
I wouldn't even begin to subject people to that. Just one last thing from me. You've mentioned quite a bit as far as the headcounts. I wonder if you could spend a little time on kind of where you are with tech spend or some maybe IT upgrades or things of that nature that you're looking at, or how you're feeling about where you are overall on digital needs and the like.
Two different things. We have a tech business, which, as you know, we had a turnaround in a couple of years ago. That strategic redirection by that team has been fundamentally successful, and it's great to see. I think your question actually is for our own expenditures on digital upgrades. I'll turn that over to Ajay.
Sure. We want to make it a pleasure to work here. Our employees deserve that. Technology is moving. We want to save people time and hassle in entering their time or travel and such like. We're constantly making investments. It's incorporated in our guidance on CapEx. We've made some significant investments last year. There's much, much more to come. I'd leave it there.
Okay, great. Thank you very much.
Thank you.
The next question will be from Andrew Nicholas with William Blair. Please go ahead.
Hi, Andrew.
Good morning.
Can you provide a bit more detail on the performance across the various geographies in the fourth quarter? Looking out to 2020, should we expect EMEA to continue to lead the way there in terms of top-line growth? Any other color you could provide on maybe the different contributors to growth by region.
Look, if we want more specific numbers, I think Ajay can give you. I think right now, EMEA's been incredible, and incredible for a while now. I think obviously, a high percentage growth on a small base is less noticeable than now it's a substantial business, so we're noticing it more. Actually, EMEA has been a force for growth for quite some time, even during a period when the U.S. wasn't contributing to growth. I think what's different about the company today, though, I want to be clear, is not just EMEA. Every region is contributing to growth. Importantly, the U.S. is. The biggest issue of kind of worry about sitting on our laurels was thinking, "Oh my goodness, we don't need to grow the U.S." That was a problem we had at one point in the past.
We do not have a leadership team that believes that. The surge in our performance the last couple of years is not because EMEA started growing there. It had started growing actually a couple of years before that. It's that the U.S. is also contributing to growth. When you have both the U.S. and Europe contributing to growth, as well as Asia and Latin America contributing to profitable growth, it's a force. Look, we will have bad quarters someplace at different points in time. We can have a bad quarter at some point from EMEA, and we can never count on sustained growth in the sense of every quarter, any place. I have a belief that all of our regions can contribute to growth over the next while. Al l of them. You want to add to that, or is that okay?
I think that's fine. Just one or two points I'd make, especially the comment that there was earlier on coronavirus. Look, our Asian business is impacted by the coronavirus. If you cannot go visit your clients, then it affects your revenue. Now, it is not material for the company. It's encapsulated in the guidance ranges I have given. Of course, those guidance ranges don't take into account if it spreads to affecting business in North America or the U.K., for example, or conversely, if it creates unfortunate bankruptcies, which then we participate in. When you ask about regional, in the current quarter, I think the Asia business is impacted. Overall, I would say, which is more to your question, all regions are growing handsomely.
EMEA, because it is smaller than North America, partially, and partially because we are hitting our stride and reaching critical mass in various areas, is growing faster, but so also is North America. It's a very interesting contest or derby between the regions that we are enjoying the benefits of.
One other thing on Asia. Although Asia is affected in this quarter, as part of the general point of our commitment, we are not lessening our commitment to Asia. It's just a matter of we have some people who are underutilized and who are frustrated by having to work from home and not being able to get the clients, so we're trying to support them. We are going to continue to grow Asia, and we expect at some point the coronavirus will be behind us. Just don't know when, nor does anybody else. Does that help, Andrew?
Very much. That was great color. I appreciate it. Another question I had was just at a high level, I was hoping you could speak to the size of the projects you've been seeing of late. I think you alluded to it briefly in the prepared remarks, but just any high-level thoughts on size of projects, how that's kind of trended over the past couple of quarters, and maybe the extent to which that's driven the really strong top-line growth of late.
We are, at the core, a big job firm. We have capabilities around the globe to do the most sophisticated investigations. Obviously, unfortunately, I can't talk and will not talk about them. That's what we are at the core. What is most exciting for me is that the jobs are coming from around the world in all the segments, multiple jobs without massive concentration, and jobs ending are typically replaced with new jobs in different places. Obviously, one is conservative in setting expectations, but that is intrinsically driving the strength of this company.
Great. That's all I had. Thank you.
The next question is a follow-up from Tobey Sommer with SunTrust. Please go ahead.
Just a couple of numbers questions. What's your expectation for DSO? It's a little bit elevated at the end of the year and as we go into 2020.
I won't give you a specific number, Tobey. Clearly I am disappointed. I wanted a lower DSO. It's a few days higher than where I'd like to have seen it. With large jobs begets complicated billing across geographies. We are shipping people from Asia to Europe to Latin America to do massive projects, and that creates delays. I'd like to get that down below that 100-day threshold.
Okay. In terms of the balance sheet, are you anticipating doing anything with the convert?
I wouldn't be announcing it on the call if I were, but I'd leave it there.
Okay. Last numbers question for me. What are you seeing in terms of wage and compensation changes? Anything of note in the marketplace in your own hiring, which has been substantial?
Look, I think the markets are tightening around the world, and we've been responding to that in not only for hiring, but in terms of looking internally at where we're out of line in comp and raising existing comp. That's part of the pressure on our cost structure that's reflected in some of the numbers that we put out there. Again, I never worry about that for an extended period of time, because if you have the right professionals, if you're not going crazy and if you're within the right bounds and you're paying within the right bounds, but you're making sure you're competitive and you have the right people, over time, billing rates will follow that.
There can be lags between those things, but one thing you can never do is allow too big a gap to happen between you and the market, because then you create risk for your enterprise. We monitor that closely and for sure, versus when I got here, I think there's more upward pressure on that. Holly spends a lot of time with the segment leaders making sure we don't get behind that. Does that answer your question, Tobey?
Sure. Thank you.
Ladies and gentlemen, this concludes our question- and- answer session. I would like to turn the conference back over to management for any closing remarks.
Well, no lengthy closing remarks. I just want to reiterate my congratulations and thanks to my colleagues, but also those of you who on this call have been here for a long time, and I really appreciate it, and we look forward to working together going forward. Many thanks.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.