Short answer
EXPONENT INC (EXPO) filed its fiscal 2026 10-K annual report with the SEC on Feb 27, 2026.
- Top risk flagged: Regulatory risk from evolving data privacy laws including GDPR, California Privacy Rights Act, and FTC enforcement actions, incurring significant compliance costs and potential fines
EXPONENT INC FY2026 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business: science and engineering consulting firm providing solutions to complex problems
- No new products, services, or segments introduced or emphasized in fiscal 2026 filing
- Strategic positioning stable with focus on effective internal control and allowance for doubtful accounts ($7.5M as of 1/2/26)
- Accounts receivable net $181.5M, representing 23% of assets and 31% of revenue for fiscal 2026
- Unusual audit focus on collectability of accounts receivables due to high customer-specific allowance estimates
Management Discussion & Analysis
- Revenue $582.0M, up 4.2% YoY, driven by Engineering and Other Scientific segment (+5.2% to $493.9M), Environmental and Health segment down 1.0% to $88.1M
- Operating margin 20.6% vs 21.4% in prior year; net income $106.0M down 2.7% YoY; EBITDA margin 27.6% vs 28.4%
- Best segment: Engineering and Other Scientific operating income up 5.3% to $173.6M; worst segment: Environmental and Health revenues and billable hours declined 1.0% and 5%
- Operating cash flow $131.7M; investing cash flow negative $9.4M due to higher capex; financing cash flow negative $160.4M reflecting increased share repurchases
- Management expects continued investment in talent and infrastructure, moderate expense growth, and sufficient liquidity for capital spending, repurchases, and dividends over next 12 months
Risk Factors
- Regulatory risk from evolving data privacy laws including GDPR, California Privacy Rights Act, and FTC enforcement actions, incurring significant compliance costs and potential fines
- Geopolitical risk from global conflicts and trade sanctions impacting international operations in UK, China, EU, and others, with exposure in multiple regions
- Operational risk due to dependency on highly specialized technical staff amid talent poaching and turnover affecting project completion and growth
- Market disruption risk from AI technologies potentially replacing standardized services and pressure from AI-enabled competitors and new entrants
- Financial risk of goodwill impairment on $8.6M, triggered by cash flow shortfalls or sustained stock price decline affecting earnings
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