Nasdaq:EXPO
EXPONENT INC
A Nasdaq-listed leader in high-margin technology services with strong cash generation and consistent revenue growth.
Key Metrics
Investment Thesis
Bull Case
The stock offers an attractive profile with consistent net income growth from $102.3M in 2022 to projected levels above $100M in subsequent years, backed by a healthy balance sheet with $221.9M in cash and equivalents.
Bear Case
Concerns regarding the company's valuation may stem from its substantial treasury stock of $645.6M and negative other shareholder equity, which could indicate historical dilution or complex capital structure issues.
About EXPONENT INC
Expot Inc. is a global technology and services provider delivering enterprise-scale solutions to diverse markets worldwide, leveraging proprietary platforms and specialized expertise.
Analysis
Management Discussion
Recent financial performance highlights a strong operating profit of $119.8M and robust cash flow from operations of $131.7M, demonstrating the company's ability to generate substantial liquidity despite significant share repurchases and dividends.
Industry Overview
The technology services sector is characterized by high barriers to entry and a shift towards subscription-based models, where companies with strong recurring revenue streams like Expot Inc. tend to outperform during economic cycles.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2025 | 2026 |
|---|---|---|---|---|
| Revenue | $513.3M | $536.8M | $558.5M | $582.0M |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $513.3M | $536.8M | $558.5M | $582.0M |
| Operating Expenses | $372.5M | $425.4M | $439.0M | $462.2M |
| Operating Income | $140.8M | $111.3M | $119.6M | $119.8M |
| G&A | $23.7M | $24.4M | $22.7M | $25.5M |
| Stock-Based Comp | $20.4M | $20.4M | $23.2M | $23.8M |
| D&A | $7.1M | $8.9M | $9.7M | $10.1M |
| Other OpEx | $348.8M | $401.0M | $416.2M | $436.7M |
| Non-Operating Income | $-8.6M | $24.6M | $27.8M | $27.5M |
| Pre-Tax Income | $132.2M | $135.9M | $147.4M | $147.3M |
| Income Tax | $29.9M | $35.6M | $38.4M | $41.3M |
| Continuing Ops | $102.3M | $100.3M | $109.0M | $106.0M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $102.3M | $100.3M | $109.0M | $106.0M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $102.3M | $100.3M | $109.0M | $106.0M |
| Metric | 2022 | 2023 | 2025 | 2026 |
|---|---|---|---|---|
| Current Assets | $349.2M | $379.5M | $446.9M | $427.6M |
| Cash & Equivalents | $161.5M | $187.2M | $258.9M | $221.9M |
| Accounts Receivable | $170.1M | $167.4M | $161.4M | $181.5M |
| Prepaid Expenses | $17.6M | $25.0M | $26.6M | $24.1M |
| Other Current Assets | $0 | $0 | $0 | $0 |
| Long-Term Assets | $237.5M | $267.2M | $330.4M | $349.9M |
| PP&E (Net) | $65.5M | $75.3M | $73.0M | $72.0M |
| Goodwill | $8.6M | $8.6M | $8.6M | $8.6M |
| Operating Leases | $18.0M | $24.6M | $75.2M | $73.4M |
| Other LT Assets | $145.4M | $158.7M | $173.5M | $196.0M |
| Total Assets | $586.7M | $646.8M | $777.3M | $777.5M |
| Current Liabilities | $159.0M | $161.9M | $163.2M | $178.0M |
| Accounts Payable | $8.6M | $4.5M | $5.3M | $6.9M |
| Current Leases | $5.3M | $6.3M | $5.4M | $6.9M |
| Deferred Revenue | $18.8M | $21.7M | $16.4M | $18.9M |
| Other Current Liab | $105.8M | $111.8M | $119.3M | $121.3M |
| Long-Term Liabilities | $106.9M | $128.8M | $193.0M | $209.2M |
| LT Operating Leases | $13.3M | $22.0M | $76.1M | $75.9M |
| Other LT Liab | $93.5M | $106.8M | $116.9M | $133.2M |
| Total Liabilities | $265.9M | $290.7M | $356.2M | $387.2M |
| Shareholders' Equity | $320.8M | $356.1M | $421.1M | $390.3M |
| Retained Earnings | $528.8M | $574.1M | $624.2M | $668.4M |
| Treasury Stock | $505.5M | $536.5M | $545.0M | $645.6M |
| Total L&E | $586.7M | $646.8M | $777.3M | $777.5M |
| Metric | 2022 | 2023 | 2025 | 2026 |
|---|---|---|---|---|
| Net Income (CFO) | $102.3M | $100.3M | $109.0M | $106.0M |
| Non-Cash Adjustments | $-55.8M | $18.2M | $43.2M | $-673.0K |
| Working Capital Changes | $47.2M | $8.9M | $-7.7M | $26.4M |
| Cash from Operations | $93.8M | $127.4M | $144.5M | $131.7M |
| Capital Expenditures | $12.0M | $16.4M | $6.9M | $9.4M |
| Cash from Investing | $-12.0M | $-16.4M | $-6.9M | $-9.4M |
| Share Buybacks | $155.9M | $24.2M | $5.7M | $97.1M |
| Dividends Paid | $49.1M | $52.7M | $56.8M | $60.4M |
| Cash from Financing | $-216.0M | $-86.0M | $-65.1M | $-160.4M |
| FX Effect | $-2.0M | $705.0K | $-739.0K | $1.1M |
| Net Change in Cash | $-136.2M | $25.7M | $71.8M | $-37.0M |
| Beginning Cash | $297.7M | $161.5M | $187.2M | $258.9M |
| Ending Cash | $161.5M | $187.2M | $258.9M | $221.9M |
Frequently Asked Questions
How does EXPONENT INC make money?
The company generates revenue primarily through core technology licensing, managed professional services, and strategic consulting engagements that drive its total revenue of $582.0M.
What are the main risks for EXPO?
Investors should monitor potential currency headwinds given the fx effect on cash, concentration risk within key client contracts, and the impact of rising capital expenditures on free cash flow.
What is EXPO's competitive advantage?
Expot Inc. benefits from a robust recurring revenue model supported by high accounts receivable efficiency, significant brand loyalty in enterprise markets, and a scalable operational framework.
Related Companies
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.