Scientific consulting firm Exponent (NASDAQ: EXPO) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 19.1% year on year to $147.4 million. Its GAAP profit of $0.49 per share was 3.7% above analysts’ consensus estimates.

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“We delivered a strong finish to 2025 reflecting the strength, diversification, and resilience of our portfolio,” stated Dr. Catherine Corrigan, President and Chief Executive Officer.

Company Overview

With a team of over 800 consultants holding advanced degrees in 90+ technical disciplines, Exponent (NASDAQ: EXPO) is a science and engineering consulting firm that investigates complex problems and provides expert analysis for clients across various industries.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.

With $554.8 million in revenue over the past 12 months, Exponent is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, Exponent grew its sales at a solid 8% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Exponent’s annualized revenue growth of 5.6% over the last two years is below its five-year trend, but we still think the results were respectable.

This quarter, Exponent reported year-on-year revenue growth of 19.1%, and its $147.4 million of revenue exceeded Wall Street’s estimates by 15.1%.

Looking ahead, sell-side analysts expect revenue to grow 4.1% over the next 12 months, a slight deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will see some demand headwinds.

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Operating Margin

Exponent has been a well-oiled machine over the last five years. It demonstrated elite profitability for a business services business, boasting an average operating margin of 24.3%.

Looking at the trend in its profitability, Exponent’s operating margin decreased by 3.5 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Exponent generated an operating margin profit margin of 19.8%, down 2.3 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Exponent’s unimpressive 6% annual EPS growth over the last five years aligns with its revenue performance. On the bright side, this tells us its incremental sales were profitable.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Exponent, its two-year annual EPS growth of 3.2% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q4, Exponent reported EPS of $0.49, up from $0.46 in the same quarter last year. This print beat analysts’ estimates by 3.7%. Over the next 12 months, Wall Street expects Exponent’s full-year EPS of $2.07 to grow 7.8%.

Key Takeaways from Exponent’s Q4 Results

We were impressed by how significantly Exponent blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock remained flat at $70.83 immediately after reporting.

So do we think Exponent is an attractive buy at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).