CRA International, Inc. (CRAI) Cash Flow Statement

This severe disconnect, primarily driven by massive working capital draws in the first quarters of both 2025 and 2026, suggests the firm's accounting earnings are not translating into liquid cash in a timely manner. The pattern points to either aggressive revenue recognition relative to billing collections or significant lags in receiving payment for its high-value litigation support services, a risk investors should monitor.

The extreme volatility in FCF, with margins ranging from -58.0% to +39.0% over two years, makes trend analysis difficult and suggests investors should focus on full-year figures. The deep negative FCF in recent quarters appears to be a timing issue related to large cash outflows for accrued expenses and payables, rather than a deterioration in the core business model.

The firm's business model likely involves significant time lags between incurring consultant costs and receiving final payment from complex litigation matters, leading to these large quarterly swings. This pattern suggests the business requires substantial ongoing investment in receivables and accrued liabilities, which pressures liquidity even as net income remains solid.