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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 3, 2026


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to___________

Commission File Number 0-18655

EXPONENT, INC.

(Exact name of registrant as specified in its charter)


delaware		77-0218904
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

149 COMMONWEALTH DRIVE, MENLO PARK, California		94025
(Address of principal executive office)		(Zip Code)

(650) 326-9400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	EXPO	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes		☒		No		☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Yes		☒			No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Yes		☐		No		☒

As of May 1, 2026, the latest practicable date, the registrant had 48,511,629 shares of common stock outstanding.

EXPONENT, INC.

FORM 10-Q

TABLE OF CONTENTS


		Page

PART I – FINANCIAL INFORMATION		3

Item 1.	Financial Statements (unaudited):	3

	Condensed Consolidated Balance Sheets as of April 3, 2026 and January 2, 2026	3

	Condensed Consolidated Statements of Income for the Three Months Ended April 3, 2026 and April 4, 2025	4

	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended April 3, 2026 and April 4, 2025	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended April 3, 2026 and April 4, 2025	6

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 3, 2026 and April 4, 2025	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

PART II – OTHER INFORMATION		27

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 3.	Defaults Upon Senior Securities	27

Item 4.	Mine Safety Disclosures	27

Item 5.	Other Information	27

Item 6.	Exhibits	28

	Signatures	29

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

EXPONENT, INC.

Condensed Consolidated Balance Sheets

April 3, 2026 and January 2, 2026

(unaudited)


(In thousands, except par value)	April 3, 2026			January 2, 2026
Assets
Current assets:
Cash and cash equivalents	$	118,553		$	221,930
Accounts receivable, net of allowance for contract losses and doubtful accounts of $6,830 and $7,478 at April 3, 2026 and January 2, 2026, respectively		197,336			181,507
Prepaid expenses and other current assets		24,999			24,143
Total current assets		340,888			427,580

Property, equipment and leasehold improvements, net of accumulated depreciation and amortization of $124,443 and $122,072 at April 3, 2026 and January 2, 2026, respectively		71,875			71,981
Operating lease right-of-use assets		70,451			73,376
Goodwill		8,607			8,607
Deferred income taxes		63,911			67,075
Deferred compensation plan assets		126,511			123,454
Other assets		5,138			5,446
Total assets	$	687,381		$	777,519

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	37,354		$	30,942
Accrued payroll and employee benefits		82,561			121,302
Deferred revenues		15,568			18,868
Operating lease liabilities		6,715			6,890
Total current liabilities		142,198			178,002

Other liabilities		4,311			4,587
Deferred compensation plan liabilities		128,212			128,645
Operating lease liabilities		74,323			75,944
Total liabilities		349,044			387,178
Stockholders’ equity:
Common stock, $0.001 par value; 120,000 shares authorized; 65,707 shares issued at April 3, 2026 and January 2, 2026, respectively		66			66
Additional paid-in capital		386,329			369,747
Accumulated other comprehensive loss
Foreign currency translation adjustments		(2,571	)		(2,290	)
Retained earnings		682,013			668,423
Treasury stock, at cost; 17,092 and 16,087 shares held at April 3, 2026 and January 2, 2026, respectively		(727,500	)		(645,605	)
Total stockholders’ equity		338,337			390,341
Total liabilities and stockholders’ equity	$	687,381		$	777,519

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 3 -

EXPONENT, INC.

Condensed Consolidated Statements of Income

For the Three Months Ended April 3, 2026 and April 4, 2025

(unaudited)


	Three Months Ended
(In thousands, except per share data)	April 3, 2026			April 4, 2025
Revenues:
Revenues before reimbursements	$	151,817		$	137,437
Reimbursements		14,486			8,070
Revenues		166,303			145,507
Operating expenses:
Compensation and related expenses		91,409			75,903
Other operating expenses		12,825			12,095
Reimbursable expenses		14,486			8,070
General and administrative expenses		6,204			5,007
Total operating expenses		124,924			101,075
Operating income		41,379			44,432
Other income, net:
Interest income, net		1,718			2,714
Miscellaneous loss, net		(758	)		(9,386	)
Total other income (loss), net		960			(6,672	)
Income before income taxes		42,339			37,760
Income taxes		12,770			11,110
Net income	$	29,569		$	26,650
Net income per share:
Basic	$	0.59		$	0.52
Diluted	$	0.59		$	0.52
Shares used in per share computations:
Basic		49,790			51,283
Diluted		50,119			51,650
Cash dividends declared per common share	$	0.31		$	0.30

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 4 -

EXPONENT, INC.

Condensed Consolidated Statements of Comprehensive Income

For the Three Months Ended April 3, 2026 and April 4, 2025

(unaudited)


	Three Months Ended
(In thousands)	April 3, 2026			April 4, 2025
Net income	$	29,569		$	26,650
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax		(281	)		946
Comprehensive income	$	29,288		$	27,596

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 5 -

EXPONENT, INC

Condensed Consolidated Statements of Stockholders’ Equity

For the Three Months Ended April 3, 2026 and April 4, 2025

(unaudited)


	Three Months Ended April 3, 2026
	Common Stock				Additional paid-in			Accumulated other comprehensive			Retained			Treasury Stock
(In thousands)	Shares		Amount		capital			loss			earnings			Shares			Amount			Total
Balance at January 2, 2026		65,707	$	66	$	369,747		$	(2,290	)	$	668,423			16,087		$	(645,605	)	$	390,341
Employee stock purchase plan		-		-		249			-			-			(5	)		58			307
Amortization of unrecognized stock-based compensation		-		-		5,087			-			-			-			-			5,087
Purchase of treasury shares		-		-		-			-			-			1,157			(79,445	)		(79,445	)
Foreign currency translation adjustments		-		-		-			(281	)		-			-			-			(281	)
Grant of restricted stock units to settle accrued bonus		-		-		13,381			-			-			-			-			13,381
Settlement of restricted stock units		-		-		(2,391	)		-			-			(129	)		(2,722	)		(5,113	)
Exercise of stock options		-		-		256									(18	)		214			470
Dividends and dividend equivalent rights		-		-		-			-			(15,979	)		-			-			(15,979	)
Net income		-		-		-			-			29,569			-			-			29,569
Balance at April 3, 2026		65,707	$	66	$	386,329		$	(2,571	)	$	682,013			17,092		$	(727,500	)	$	338,337

	Three Months Ended April 4, 2025
	Common Stock				Additional paid-in			Accumulated other comprehensive			Retained			Treasury Stock
(In thousands)	Shares		Amount		capital			income (loss)			earnings			Shares			Amount			Total
Balance at January 3, 2025		65,707	$	66	$	345,689		$	(3,791	)	$	624,151			14,893		$	(545,047	)	$	421,068
Employee stock purchase plan		-		-		326			-			-			(5	)		58			384
Amortization of unrecognized stock-based compensation		-		-		5,028			-			-			-			-			5,028
Purchase of treasury shares		-		-		-			-			-			65			(5,000	)		(5,000	)
Foreign currency translation adjustments		-		-		-			946			-			-			-			946
Grant of restricted stock units to settle accrued bonus		-		-		12,179			-			-			-			-			12,179
Settlement of restricted stock units		-		-		(1,499	)		-			-			(95	)		(2,667	)		(4,166	)
Exercise of stock options		-		-		53									(5	)		47			100
Dividends and dividend equivalent rights		-		-		-			-			(15,781	)		-			-			(15,781	)
Net income		-		-		-			-			26,650			-			-			26,650
Balance at April 4, 2025		65,707	$	66	$	361,776		$	(2,845	)	$	635,020		$	14,853		$	(552,609	)	$	441,408

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 6 -

EXPONENT, INC.

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended April 3, 2026 and April 4, 2025

(unaudited)


	Three Months Ended
(In thousands)	April 3, 2026			April 4, 2025
Cash flows from operating activities:
Net income	$	29,569		$	26,650
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of property, equipment and leasehold improvements		2,515			2,492
Provision for contract losses and doubtful accounts		268			256
Stock-based compensation		9,058			8,179
Deferred income tax provision		3,164			(3,226	)
Changes in operating assets and liabilities:
Accounts receivable		(16,097	)		(5,637	)
Prepaid expenses and other current assets		(4,755	)		(3,331	)
Change in operating leases		1,129			454
Accounts payable and accrued liabilities		6,100			11,595
Accrued payroll and employee benefits		(28,626	)		(27,571	)
Deferred revenues		(3,300	)		(2,587	)
Net cash (used in) provided by operating activities		(975	)		7,274
Cash flows from investing activities:
Capital expenditures		(2,453	)		(1,754	)
Net cash used in investing activities		(2,453	)		(1,754	)
Cash flows from financing activities:
Payroll taxes for restricted stock units		(5,113	)		(4,166	)
Repurchase of common stock		(78,761	)		-
Exercise of stock-based payment awards		777			484
Dividends and dividend equivalents rights		(16,583	)		(16,367	)
Net cash used in financing activities		(99,680	)		(20,049	)
Effect of foreign currency exchange rates on cash and cash equivalents		(269	)		741
Net decrease in cash and cash equivalents		(103,377	)		(13,788	)
Cash and cash equivalents at beginning of period		221,930			258,901
Cash and cash equivalents at end of period	$	118,553		$	245,113

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

- 7 -

EXPONENT, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1: Basis of Presentation

Exponent, Inc. (referred to as the “Company” or “Exponent”) is an engineering and scientific consulting firm that provides solutions to complex problems. The Company operates on a 52-53 week fiscal year ending on the Friday closest to the last day of December.

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission. Accordingly, they do not contain all the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments which are necessary for the fair presentation of the condensed consolidated financial statements have been included and all such adjustments are of a normal and recurring nature. The operating results for the three months ended April 3, 2026 are not necessarily representative of the results of future quarterly or annual periods. The following information should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 2, 2026, which was filed with the U.S. Securities and Exchange Commission on February 27, 2026.

The unaudited condensed consolidated financial statements include the accounts of Exponent and its subsidiaries, which are all wholly owned. All intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Items subject to such estimates and assumptions include accounting for revenue recognition and estimating the allowance for contract losses and doubtful accounts. Actual results could differ from those estimates.

Recent Accounting Pronouncement Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (subtopic 220-40), which requires disclosure of disaggregation of certain relevant expenses included in the statements of operations on an annual and interim basis. ASU 2024-03 will be effective for our annual periods beginning January 2, 2027 and interim periods beginning January 1, 2028. The amendments must be applied retrospectively, and early adoption is permitted. The Company is evaluating the effect that this standard may have on its consolidated financial statements and related disclosures.

Note 2: Revenue Recognition

Substantially all of the Company’s engagements are performed under time and materials or fixed-price arrangements. For time and materials contracts, the Company utilizes the practical expedient under Accounting Standards Codification 606 – Revenue from Contracts with Customers, which states if an entity has a right to consideration from a customer in an amount that corresponds directly with the value of the entity’s performance completed to date (for example, a service contract in which an entity bills a fixed amount for each hour of service provided) then the entity may recognize revenue in the amount to which the entity has a right to invoice.

- 8 -

The following table discloses the percent of the Company’s revenue generated from time and materials contracts:


	Three Months Ended
	April 3, 2026			April 4, 2025
Engineering & Other Scientific		62	%		66	%
Environmental and Health		15	%		16	%
Total time and materials revenues		77	%		82	%

For fixed-price contracts, the Company recognizes revenue over time because of the continuous transfer of control to the customer. The customer typically controls the work in process as evidenced either by contractual termination clauses or by the Company’s rights to payment for work performed to date to deliver services that do not have an alternative use to the Company. Revenue for fixed-price contracts is recognized based on the relationship of incurred labor hours at standard rates to the Company’s estimate of the total labor hours at standard rates it expects to incur over the term of the contract. The Company believes this methodology achieves a reliable measure of the revenue from the consulting services it provides to its customers under fixed-price contracts given the nature of the consulting services the Company provides.

The following table discloses the percent of the Company’s revenue generated from fixed price contracts:


	Three Months Ended
	April 3, 2026			April 4, 2025
Engineering & Other Scientific		22	%		17	%
Environmental and Health		1	%		1	%
Total fixed price revenues		23	%		18	%

Deferred revenues represent amounts billed to clients in advance of services provided. During the first quarter of 2026, $7,420,000 of revenues were recognized that were included in the deferred revenue balance at January 2, 2026. During the first quarter of 2025, $5,877,000 of revenues were recognized that were included in the deferred revenue balance at January 3, 2025.

Reimbursements, including those related to travel and other out-of-pocket expenses, and other similar third- party costs such as the cost of materials and certain subcontracts, are included in revenues, and an equivalent amount of reimbursable expenses are included in operating expenses. Any service fee associated with reimbursable expenses is included in revenues before reimbursements. The Company reports revenues net of subcontractor fees for certain subcontracts where the Company has determined that it is acting as an agent because its performance obligation is to arrange for the provision of goods or services by another party. The total amount of subcontractor fees not included in revenues because the Company was acting as an agent were $6,775,000 and $3,504,000 during the first quarter of 2026 and 2025, respectively.

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Note 3: Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including money market securities, trading fixed income and equity securities held in its deferred compensation plan and the liability associated with its deferred compensation plan. There were no transfers between fair value measurement levels during the three months ended April 3, 2026 and April 4, 2025. Any transfers between fair value measurement levels would be recorded on the actual date of the event or change in circumstances that caused the transfer. The fair value of these financial assets and liabilities was determined using the following inputs at April 3, 2026:


	Fair Value Measurements at Reporting Date Using
(In thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Money market securities (1)	$	10,675	$	10,675	$	-	$	-
Fixed income trading securities held in deferred compensation plan (2)		50,738		50,738		-		-
Equity trading securities held in deferred compensation plan (2)		93,470	$	93,470		-		-
Total	$	154,883	$	154,883	$	-	$	-
Liabilities
Deferred compensation plan (3)		146,484		146,484		-		-
Total	$	146,484	$	146,484	$	-	$	-

(1) Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

(2) Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

(3) Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet.

The fair value of these certain financial assets and liabilities was determined using the following inputs at January 2, 2026:


	Fair Value Measurements at Reporting Date Using
(In thousands)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Money market securities (1)	$	60,170	$	60,170	$	-	$	-
Fixed income trading securities held in deferred compensation plan (2)		45,332		45,332		-		-
Equity trading securities held in deferred compensation plan (2)		94,183		94,183		-		-
Total	$	199,685	$	199,685	$	-	$	-
Liabilities
Deferred compensation plan (3)		144,706		144,706		-		-
Total	$	144,706	$	144,706	$	-	$	-

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(1) Included in cash and cash equivalents on the Company’s unaudited condensed consolidated balance sheet.

(2) Included in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet.

(3) Included in accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheet.

Money market securities as of April 3, 2026 and January 2, 2026 represent obligations of the United States Treasury. Fixed income and equity trading securities represent mutual funds held in the Company’s deferred compensation plan. See Note 6 for additional information about the Company’s deferred compensation plan.

Cash and cash equivalents consisted of the following as of April 3, 2026:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Classified as current assets:
Cash	$	107,878	$	-	$	-	$	107,878
Cash equivalents:
Money market securities		10,675		-		-		10,675
Total cash equivalents		10,675		-		-		10,675
Total cash and cash equivalents	$	118,553	$	-	$	-	$	118,553

Cash and cash equivalents consisted of the following as of January 2, 2026:


			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
(In thousands)	Cost		Gains		Losses		Fair Value
Classified as current assets:
Cash	$	161,760	$	-	$	-	$	161,760
Cash equivalents:
Money market securities		60,170		-		-		60,170
Total cash equivalents		60,170		-		-		60,170
Total cash and cash equivalents	$	221,930	$	-	$	-	$	221,930

At April 3, 2026 and January 2, 2026, the Company did not have any assets or liabilities valued using significant unobservable inputs.

The following financial instruments are not measured at fair value on the Company's unaudited condensed consolidated balance sheet at April 3, 2026 and January 2, 2026, but require disclosure of their fair values: accounts receivable, other assets and accounts payable. The estimated fair value of such instruments at April 3, 2026 and January 2, 2026 approximates their carrying value as reported on the Company’s unaudited condensed consolidated balance sheets.

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Note 4: Net Income Per Share

Basic per share amounts are computed using the weighted-average number of shares of common stock outstanding during the period. Diluted per share amounts are calculated using the weighted-average number of shares of common stock outstanding during the period and, when dilutive, the weighted-average number of potential shares of common stock from the issuance of common stock to satisfy outstanding restricted stock units and the exercise of outstanding options to purchase common stock using the treasury stock method.

The following schedule reconciles the shares used to calculate basic and diluted net income per share:


	Three Months Ended
(In thousands)	April 3, 2026		April 4, 2025
Shares used in basic per share computation		49,790		51,283
Effect of dilutive common stock options outstanding		47		103
Effect of dilutive restricted stock units outstanding		282		264
Shares used in diluted per share computation		50,119		51,650

Common stock options to purchase 215,833 shares were excluded from the diluted per share calculation for the three months ended April 3, 2026 due to their anti-dilutive effect. Common stock options to purchase 100,833 shares were excluded from the diluted per share calculation for the three months ended April 4, 2025 due to their anti-dilutive effect.

Note 5: Stock-Based Compensation

Restricted Stock Units

Restricted stock unit grants are designed to attract and retain employees, and to better align employee interests with those of the Company’s stockholders. For a select group of employees, up to 40% of their annual bonus is settled with fully vested restricted stock unit awards. Under these fully vested restricted stock unit awards, the holder of each award has the right to receive one share of the Company’s common stock for each fully vested restricted stock unit four years from the date of grant. Each individual who receives a fully vested restricted stock unit award is also granted a matching number of unvested restricted stock unit awards. Unvested restricted stock unit awards are also granted for select new hires and promotions. These unvested restricted stock unit awards generally cliff vest four years from the date of grant, at which time the holder of each award will have the right to receive one share of the Company’s common stock for each restricted stock unit award provided the holder of each award has met certain employment conditions. In the case of retirement at 59½ years or older, all unvested restricted stock unit awards will continue to vest, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company.

The value of these restricted stock unit awards is determined based on the market price of the Company’s common stock on the date of grant. The value of fully vested restricted stock unit awards issued is recorded as a reduction to accrued bonuses. The portion of bonus expense that the Company expects to settle with fully vested restricted stock unit awards is recorded as stock-based compensation during the period the bonus is earned. The Company recorded stock-based compensation expense associated with accrued bonus awards of $3,971,000 and $3,151,000 during the three months ended April 3, 2026 and April 4, 2025, respectively. The value of the unvested restricted stock unit awards granted is recognized on a straight-line basis over the shorter of the four-year vesting period or the period between the grant date and the date the award recipient turns 59½. If the award recipient is 59½ years or older on the date of grant, the value of the entire award is expensed upon grant. The Company recorded

- 12 -

stock-based compensation expense associated with the unvested restricted stock unit awards of $4,414,000 and $4,240,000 during the three months ended April 3, 2026 and April 4, 2025, respectively.

Stock Options

Stock options are granted for terms of ten years and generally vest 25% per year over a four-year period from the grant date. Unvested stock option awards will continue to vest in the case of retirement at 59½ years or older, provided that the holder of each award does all consulting work through the Company and does not become an employee for a past or present client, beneficial party or competitor of the Company. The value of the unvested stock option awards granted is recognized on a straight-line basis over the shorter of the four-year vesting period or the period between the grant date and the date the award recipient turns 59½. If the award recipient is 59½ years or older on the date of grant, the value of the entire award is expensed upon grant. The Company recorded stock-based compensation expense associated with stock option grants of $673,000 and $788,000 during the three months ended April 3, 2026 and April 4, 2025, respectively.

The Company uses the Black-Scholes option-pricing model to determine the fair value of options granted. The determination of the fair value of stock option awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include expected stock price volatility over the term of the award, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends.

The Company used historical exercise, forfeiture, and post-vesting expiration data to estimate the expected term of options granted. The historical volatility of the Company’s common stock over a period of time equal to the expected term of the options granted was used to estimate expected volatility. The risk-free interest rate used in the option-pricing model was based on United States Treasury zero-coupon issues with remaining terms similar to the expected term of the options. The dividend yield assumption considers the expectation of continued declaration of dividends, offset by option holders’ dividend equivalent rights.

The Company accounts for forfeitures of stock-based awards when they occur. All stock-based payment awards are recognized on a straight-line basis over the requisite service periods of the awards.

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Note 6: Deferred Compensation Plans

The Company maintains nonqualified deferred compensation plans for the benefit of a select group of highly compensated employees. Under these plans, participants may elect to defer up to 100% of their compensation. Company assets that are earmarked to pay benefits under the plans are held in a rabbi trust and are subject to the claims of the Company’s creditors. As of April 3, 2026 and January 2, 2026, the invested amounts under the plans totaled $144,208,000 and $139,515,000, respectively, and are recorded in prepaid expenses and other current assets and deferred compensation plan assets on the Company’s unaudited condensed consolidated balance sheet. These assets are classified as trading securities and are recorded at fair value with changes recorded as adjustments to miscellaneous loss, net.

As of April 3, 2026 and January 2, 2026, vested amounts due under the plans totaled $146,484,000 and $144,706,000, respectively, and are recorded within accrued payroll and employee benefits and deferred compensation plan liabilities on the Company’s unaudited condensed consolidated balance sheets. Changes in the liability are recorded as adjustments to compensation expense. During the three months ended April 3, 2026, the Company recognized a reduction to compensation expense of $1,138,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a loss in miscellaneous loss, net. During the three months ended April 4, 2025, the Company recognized a reduction to compensation expense of $9,336,000 as a result of changes in the market value of the trust assets with the same amount being recorded as a loss in miscellaneous loss, net.

Note 7: Supplemental Cash Flow Information

The following is supplemental disclosure of cash flow information:


	Three Months Ended
(In thousands)	April 3, 2026		April 4, 2025
Cash paid during period:
Income taxes	$	1,204	$	1,461
Non-cash investing and financing activities:
Vested stock unit awards issued to settle accrued bonuses	$	13,381	$	12,179
Right-of-use asset obtained in exchange for operating lease obligations	$	33	$	-
Accrual for capital expenditures	$	198	$	73
Repurchases of common stock	$	-	$	5,000

Note 8: Accounts Receivable, Net

At April 3, 2026 and January 2, 2026, accounts receivable, net, was comprised of the following:


	April 3,			January 2,
(In thousands)	2026			2026
Billed accounts receivable	$	131,134		$	134,700
Unbilled accounts receivable		73,032			54,285
Allowance for contract losses and doubtful accounts		(6,830	)		(7,478	)
Total accounts receivable, net	$	197,336		$	181,507

The Company maintains allowances for estimated losses over the remaining contractual life of its receivables resulting from the inability of customers to meet their financial obligations or for disputes that affect the Company’s ability to fully collect amounts due. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations or aware of a dispute with a specific customer, a specific allowance is recorded to reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers the Company recognizes allowances for doubtful accounts based upon historical write-offs, customer concentration, customer creditworthiness, current economic conditions, aging of amounts due and future expectations.

- 14 -

A reconciliation of the beginning and ending amount of the allowance for contract losses and doubtful accounts is as follows:


(In thousands)
Balance at January 2, 2026	$	7,478
Provision for contract losses and doubtful accounts		268
Write-offs		(916	)
Balance at April 3, 2026	$	6,830

Note 9: Segment Reporting

The Company has two reportable operating segments based on two primary areas of service. The Engineering and Other Scientific segment is a broad service group providing technical consulting in different practices primarily in engineering. The Environmental and Health segment provides services in the areas of environmental, epidemiology and health risk analysis. This segment provides a wide range of consulting services relating to environmental hazards and risks, and the impact on both human health and the environment. Our Chief Executive Officer, the chief operating decision maker, reviews revenues and operating income for each of our reportable segments, but does not review total assets in evaluating segment performance and capital allocation.

Segment information for the three months ended April 3, 2026 and April 4, 2025 follows:

Revenues


	Three Months Ended
(In thousands)	April 3, 2026		April 4, 2025
Engineering and Other Scientific	$	141,412	$	122,135
Environmental and Health		24,891		23,372
Total revenues	$	166,303	$	145,507

Compensation and related expenses


	Three Months Ended
(In thousands)	April 3, 2026		April 4, 2025
Engineering and Other Scientific	$	64,058	$	57,248
Environmental and Health		12,897		12,448
Total segment compensation and related expenses		76,955		69,696
Corporate compensation and related expenses		14,454		6,207
Total compensation and related expenses	$	91,409	$	75,903

Operating Income


	Three Months Ended
(In thousands)	April 3, 2026			April 4, 2025
Engineering and Other Scientific	$	50,415		$	45,113
Environmental and Health		8,385			8,698
Total segment operating income		58,800			53,811
Corporate operating expense		(17,421	)		(9,379	)
Total operating income	$	41,379		$	44,432

Certain operating expenses are excluded from the Company’s measure of segment operating income. These expenses include costs associated with its human resources, finance, information technology, and business

- 15 -

development groups; the deferred compensation expense/benefit due to the change in value of assets associated with its deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in its allowance for contract losses and doubtful accounts.

Capital Expenditures


	Three Months Ended
(In thousands)	April 3, 2026		April 4, 2025
Engineering and Other Scientific	$	632	$	475
Environmental and Health		39		62
Total segment capital expenditures		671		537
Corporate capital expenditures		1,738		715
Total capital expenditures	$	2,409	$	1,252

Certain capital expenditures associated with the Company’s corporate cost centers and the related depreciation are excluded from the Company’s segment information.

Depreciation and Amortization


	Three Months Ended
(In thousands)	April 3, 2026		April 4, 2025
Engineering and Other Scientific	$	1,849	$	1,826
Environmental and Health		45		47
Total segment depreciation and amortization		1,894		1,873
Corporate depreciation and amortization		621		619
Total depreciation and amortization	$	2,515	$	2,492

No single client comprised more than 10% of the Company’s revenues during the three months ended April 3, 2026 and April 4, 2025.

Note 10: Leases

The Company determines if an arrangement is a lease at the inception of the arrangement. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and long-term operating lease liabilities in the Company’s condensed consolidated balance sheet. The Company does not have any finance leases as of April 3, 2026.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, based on the information available at commencement date, in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The amortization of operating lease ROU assets and the change in operating lease liabilities is disclosed as a single line item in the condensed consolidated statements of cash flows.

The Company leases office, laboratory, and storage space in 12 states and the District of Columbia, as well as in China, Hong Kong, Switzerland, and the United Kingdom. Leases for these office, laboratory, and storage facilities have terms generally ranging between one and ten years. Some of these leases include options to extend or terminate the lease, none of which are currently included in the lease term as the Company has determined that exercise of these options is not reasonably certain.

- 16 -

The Company has a Test and Engineering Center on 147 acres of land in Phoenix, Arizona. The Company leases this land from the State of Arizona under an agreement that expires in January of 2043 and includes an option to renew for one fifteen-year period.

The Company’s equipment leases are included in the ROU asset and liability balances, but are not material.

The Company leases excess space in its Silicon Valley and Natick facilities. Rental income of $333,000 and $191,000 was included in other income for the three months ended April 3, 2026 and April 4, 2025, respectively.

The components of lease expense included in other operating expenses on the condensed consolidated statements of income were as follows:


	Three Months Ended
(In thousands)	April 3, 2026		April 4, 2025
Operating lease cost	$	3,196	$	3,212
Variable lease cost		630		303
Short-term lease cost		266		356

Supplemental cash flow information related to operating leases was as follows:


	Three Months Ended
(In thousands)	April 3, 2026		April 4, 2025
Cash paid for amounts included in the measurement of operating lease liabilities	$	3,109	$	2,602

Supplemental balance sheet information related to operating leases was as follows:


	April 3, 2026	April 4, 2025
Weighted Average Remaining Lease Term	13.0 years	13.6 years
Weighted Average Discount Rate	6.3%	6.3%

Maturities of operating lease liabilities as of April 3, 2026:


(In thousands)	Operating Leases
2026 (excluding the three months ended April 3, 2026)	$	6,180
2027		8,194
2028		10,914
2029		9,600
2030		9,092
Thereafter		80,286
Total lease payments	$	124,266
Less imputed interest		43,228
Total lease liability	$	81,038

Note 11: Contingencies

The Company is a party to various legal actions from time to time and may be contingently liable in connection with claims and contracts arising in the normal course of business, the outcome of which the Company believes, after consultation with legal counsel, will not have a material adverse effect on its financial condition, results of operations or liquidity. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results. All legal costs associated with litigation are expensed as incurred.

- 17 -

Note 12: Subsequent Events

On April 30, 2026, the Company announced that its Board of Directors approved a cash dividend of $0.31 per share of the Company’s common stock, payable June 18, 2026, to stockholders of record as of June 5, 2026. On April 30, 2026, the Company announced that its Board of Directors authorized $50 million for the repurchase of the Company's common stock which is in addition to the amounts remaining under prior repurchase authorizations. These repurchase authorizations have no expiration date.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included herein and with our audited consolidated financial statements and notes thereto for the fiscal year ended January 2, 2026, which are contained in our fiscal 2025 Annual Report on Form 10-K, which was filed with the U.S. Securities and Exchange Commission on February 27, 2026 (our “2025 Annual Report”).

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains certain “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995, and the rules promulgated pursuant to the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended) that are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. When used in this document, the words “intend,” “anticipate,” “believe,” “estimate,” “expect” and similar expressions, as they relate to us or our management, identify such forward-looking statements. Such statements reflect the current views of us or our management with respect to future events and are subject to certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, our actual results, performance, or achievements could differ materially from those expressed in, or implied by, any such forward-looking statements. Factors that could cause or contribute to such material differences include the possibility that the demand for our services may decline as a result of changes in general and industry specific economic conditions, the timing of engagements for our services, the effects of competitive services and pricing, the absence of backlog related to our business, our ability to attract and retain key employees, the effect of tort reform and government regulation on our business and liabilities resulting from claims made against us. Additional risks and uncertainties are discussed in our 2025 Annual Report under the heading “Risk Factors” and elsewhere in this report. The inclusion of such forward-looking information should not be regarded as a representation by the Company or any other person that the future events, plans, or expectations we contemplated will be achieved. Due to such uncertainties and risks, you are warned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. We do not intend to release publicly any updates or revisions to any such forward-looking statements.

Business Overview

Exponent, Inc. is an engineering and scientific consulting firm providing solutions to complex problems. Our interdisciplinary organization of scientists, engineers, and business consultants draws from more than 90 technical disciplines to solve the most pressing and complicated challenges facing stakeholders today. The firm leverages over 55 years of experience in analyzing accidents and failures to advise clients as they innovate their technologically complex products and processes, ensure the safety and health of their users, and address the challenges of sustainability.

CRITICAL ACCOUNTING ESTIMATES

There have been no significant changes in our critical accounting estimates during the three months ended April 3, 2026, as compared to the critical accounting estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report.

RESULTS OF CONSOLIDATED OPERATIONS

Executive Summary

Revenues for the first quarter of 2026 increased 14% to $166,303,000 as compared to $145,507,000 during the same period last year. Revenues before reimbursements for the first quarter of 2026 increased 10% to $151,817,000 as compared to $137,437,000 during the same period last year. Revenue growth was driven by proactive engagements, including user research studies for consumer electronics clients integrating artificial intelligence into their devices, as well as risk management work for utility clients evaluating asset performance under extreme weather conditions. Reactive engagements also contributed to our growth, with increased dispute-related and failure analysis demand across construction projects, energy facilities, and medical devices.

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Net income increased 11% to $29,569,000 during the first quarter of 2026 as compared to $26,650,000 during the same period last year. Diluted earnings per share increased to $0.59 per share during the first quarter of 2026 as compared to $0.52 during the same period last year. During the first quarter of 2026, we realized a negative tax impact associated with stock-based awards of $896,000 as compared to a negative tax impact of $469,000 during the same period last year. The change in the tax impact associated with stock-based awards was due to the change in the difference of the value of our common stock between the grant date and the release date for the restricted stock units released during the first quarter of 2026 as compared to the first quarter of 2025.

We remain focused on building our world-class engineering and scientific team to position us at the forefront of innovation and meet the ever-changing needs of our clients and the market. We also remain focused on capitalizing on emerging growth areas, managing other operating expenses, generating cash from operations, maintaining a strong balance sheet and undertaking activities such as share repurchases and dividends to enhance stockholder value.

Overview of the Three Months Ended April 3, 2026

During the first quarter of 2026, billable hours increased 6% to 399,000 as compared to 376,000 during the same period last year. Our utilization increased 1% to 76% as compared to 75% during the same period last year. Technical full-time equivalent employees increased 5% to 1,013 during the first quarter of 2026 as compared to 966 during the same period last year.

Three Months Ended April 3, 2026 compared to Three Months Ended April 4, 2025

Revenues


	Three Months Ended
(in thousands, except percentages)	April 3, 2026			April 4, 2025			Percent Change
Engineering and Other Scientific	$	141,412		$	122,135			15.8	%
Percentage of total revenues		85.0	%		83.9	%
Environmental and Health		24,891			23,372			6.5	%
Percentage of total revenues		15.0	%		16.1	%
Total revenues	$	166,303		$	145,507			14.3	%

The increase in revenues for our Engineering and Other Scientific segment was due to an increase in billable hours and an increase in billing rates. Growth during the quarter was primarily driven by user research studies in consumer electronics and risk management in the utilities sector, along with reactive engagements in the energy and life sciences sectors. During the first quarter of 2026, billable hours for this segment increased by 9% to 327,000 as compared to 300,000 during the same period last year. Utilization for this segment increased to 77% during the first quarter of 2026 as compared to 76% during the same period last year. Technical full-time equivalent employees in this segment increased 7% to 814 during the first quarter of 2026 as compared to 762 for the same period last year.

The increase in revenues for our Environmental and Health segment was due to an increase in billing rates partially offset by a decrease in billable hours. Growth in this segment was primarily driven by regulatory consulting in the chemical industry. During the first quarter of 2026, billable hours for this segment decreased by 5% to 72,000 as compared to 76,000 during the same period last year. Utilization in this segment decreased to 69% during the first quarter of 2026 as compared to 72% during the same period last year. Technical full-time equivalent employees in this segment decreased 2% to 199 during the first quarter of 2026 as compared to 204 during the same period last year.

Compensation and Related Expenses


	Three Months Ended
(in thousands, except percentages)	April 3, 2026			April 4, 2025			Percent Change
Compensation and related expenses	$	91,409		$	75,903			20.4	%
Percentage of total revenues		55.0	%		52.2	%

- 20 -

The increase in compensation and related expenses during the first quarter of 2026 was due to an increase in payroll, an increase in bonuses and the change in the value of assets associated with our deferred compensation plan. During the first quarter of 2026, payroll expense increased by $4,158,00 due to an increase in technical full-time equivalent employees and the impact of annual salary increases. During the first quarter of 2026, bonus expense increased by $2,938,000 due to a corresponding increase in our bonus pool which is 33% of income before income taxes, interest income, bonus expense, and stock-based compensation. During the first quarter of 2026, deferred compensation expense increased by $8,198,000 with a corresponding increase to other income, net, as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. During the first quarter of 2026, the value of plan assets decreased by $1,138,000 as compared to a decrease of $9,336,000 during the same period last year.

Other Operating Expenses


	Three Months Ended
(in thousands, except percentages)	April 3, 2026			April 4, 2025			Percent Change
Other operating expenses	$	12,825		$	12,095			6.0	%
Percentage of total revenues		7.7	%		8.3	%

Other operating expenses include facilities-related costs, technical materials, computer-related expenses and depreciation and amortization of property, equipment and leasehold improvements. The increase in other operating expenses during the first quarter of 2026 was primarily due to an increase in occupancy expense of $388,000 and an increase in computer-related expenses of $255,000. The increase in occupancy expense was due to an increase in facility repairs and maintenance. The increase in computer-related expenses was due to continued investments in our corporate infrastructure. We expect other operating expenses to grow as we selectively add new talent and make investments in our corporate infrastructure.

Reimbursable Expenses


	Three Months Ended
(in thousands, except percentages)	April 3, 2026			April 4, 2025			Percent Change
Reimbursable expenses	$	14,486		$	8,070			79.5	%
Percentage of total revenues		8.7	%		5.5	%

The amount of reimbursable expenses will vary from quarter to quarter depending on the nature of our projects. The increase in reimbursable expenses was due to an increase in reimbursable expenses associated with user research projects.

General and Administrative Expenses


	Three Months Ended
(in thousands, except percentages)	April 3, 2026			April 4, 2025			Percent Change
General and administrative expenses	$	6,204		$	5,007			23.9	%
Percentage of total revenues		3.7	%		3.4	%

The increase in general and administrative expenses was primarily due to an increase in travel and meals of $548,000 and several other individually insignificant increases. The increase in travel and meals was due to an increase in client and business development activities and an increase in recruiting-related activities associated with the increase in technical full-time equivalent employees. We expect general and administrative expenses to increase as we selectively add new talent and expand our business development and staff development initiatives.

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Operating Income


	Three Months Ended
(In thousands)	April 3, 2026			April 4, 2025			Percent Change
Engineering and Other Scientific	$	50,415		$	45,113			11.8	%
Environmental and Health		8,385			8,698			-3.6	%
Total segment operating income		58,800			53,811			9.3	%
Corporate operating expense		(17,421	)		(9,379	)		85.7	%
Total operating income	$	41,379		$	44,432			-6.9	%

The increase in operating income for our Engineering and Other Scientific segment during the first quarter of 2026 as compared to the same period last year was due to an increase in net revenues and an increase in utilization. The decrease in operating income for our Environmental and Health segment during the first quarter of 2026 was due to a decrease in utilization.

Certain operating expenses are excluded from our measure of segment operating income. These expenses include the costs associated with our human resources, finance, information technology, corporate, and business development groups; the deferred compensation expense/benefit due to the change in value of assets associated with our deferred compensation plan; stock-based compensation associated with restricted stock unit and stock option awards; and the change in our allowance for contract losses and doubtful accounts.

The increase in corporate operating expenses was due to the change in value of assets associated with our deferred compensation plan. During the first quarter of 2026, deferred compensation expense increased by $8,198,000 with a corresponding increase to other income, net, as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. During the first quarter of 2026, the value of plan assets decreased by $1,138,000 as compared to a decrease of $9,336,000 during the same period last year.

Other Income, Net


	Three Months Ended
(in thousands, except percentages)	April 3, 2026			April 4, 2025			Percent Change
Other income / (loss), net	$	960		$	(6,672	)		-114.4	%
Percentage of total revenues		0.6	%		-4.6	%

Other income, net, consists primarily of changes in the value of assets associated with our deferred compensation plan, interest income earned on available cash, cash equivalents and short-term investments, and rental income from leasing space in our Silicon Valley and Natick facilities. The increase in other income, net, was primarily due to the change in value of assets associated with our deferred compensation plan partially offset by a decrease in interest income. During the first quarter of 2026, other income, net, increased by $8,198,000 with a corresponding increase to deferred compensation expense as compared to the same period last year, due to the change in value of assets associated with our deferred compensation plan. During the first quarter of 2026, the value of plan assets decreased by $1,138,000 as compared to a decrease of $9,336,000 during the same period last year. During the first quarter of 2026 interest income decreased by $996,000 due to a decrease in interest rates and lower average cash equivalent balances.

Income Taxes


	Three Months Ended
(in thousands, except percentages)	April 3, 2026			April 4, 2025			Percent Change
Income taxes	$	12,770		$	11,110			14.9	%
Percentage of total revenues		7.7	%		7.6	%
Effective tax rate		30.2	%		29.4	%

- 22 -

During the first quarter of 2026, we realized a negative tax impact associated with stock-based awards of $896,000 as compared to a negative tax impact of $469,000 during the same period last year. The change in the tax impact associated with stock-based awards was due to the change in the difference of the value of our common stock between the grant date and the release date for the restricted stock units released during the first quarter of 2026 as compared to the first quarter of 2025. Excluding the negative tax impact, our consolidated tax rate was 28.0% in the first quarter of 2026, as compared to 28.2% for the same period in 2025.

LIQUIDITY AND CAPITAL RESOURCES

We believe our existing balances of cash, cash equivalents, short-term investments and cash generated from operations will be sufficient to satisfy our working capital needs, capital expenditures, outstanding commitments, stock repurchases, dividends and other liquidity requirements over at least the next 12 months.


	Three Months Ended
(in thousands)	April 3, 2026			April 4, 2025
Net cash (used in) provided by operating activities	$	(975	)	$	7,274
Net cash used in investing activities		(2,453	)		(1,754	)
Net cash used in financing activities		(99,680	)		(20,049	)

We financed our business during the first three months of 2026 through available cash. As of April 3, 2026, our cash and cash equivalents were $118,553,000 as compared to $221,930,000 at January 2, 2026.

Generally, our net cash provided by operating activities is used to fund our day to day operating activities. First quarter operating cash requirements are generally higher due to payment in the first quarter of our annual bonuses accrued during the prior year. Our largest source of operating cash flows is collections from our clients. Our primary uses of cash from operating activities are for employee related expenditures, leased facilities, taxes, and general operating expenses.

The increase in net cash used in investing activities during the first three months of 2026, as compared to the same period last year, was due to an increase in capital expenditures. The increase in capital expenditures was due to an increase in investment in our corporate infrastructure.

The increase in net cash used in financing activities during the first three months of 2026, as compared to the same period last year, was primarily due to an increase in repurchases of our common stock.

We lease office, laboratory, and storage space in 12 states and the District of Columbia, as well as in China, Hong Kong, Switzerland, and the United Kingdom under non-cancellable operating lease arrangements that expire at various dates through 2033. On June 19, 2024, we entered into an agreement with the State of Arizona to extend our land lease for 15 years beginning on January 17, 2028. We are currently obligated to make payments under the lease of $1,009,000 per year, which obligation will continue at that level until January 16, 2028. Beginning on January 17, 2028, our payments under the lease will increase to approximately $6,183,000 per year for the 15-year extension term with adjustments to the annual rent payment in 2033 and 2038 based on the consumer price index.

We expect to continue our investing activities, including capital expenditures. Furthermore, cash reserves may be used to repurchase common stock under our stock repurchase programs, pay dividends, procure facilities and equipment or strategically acquire professional service firms that are complementary to our business.

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We maintain nonqualified deferred compensation plans for the benefit of a select group of highly compensated employees. Vested amounts due under the plans of $128,212,000 were recorded as a long-term liability on our unaudited condensed consolidated balance sheet at April 3, 2026. Vested amounts due under the plans of $18,272,000 were recorded as a current liability on our unaudited condensed consolidated balance sheet at April 3, 2026. Company assets that are designated to fund the benefits under the plans are held in a rabbi trust and are subject to the claims of our creditors. As of April 3, 2026, invested amounts under the plans of $126,511,000 were recorded as a non-current asset on our unaudited condensed consolidated balance sheet. As of April 3, 2026, invested amounts under the plans of $17,697,000 were recorded as other current assets on our unaudited condensed consolidated balance sheet.

As permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is, or was serving, at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

Non-GAAP Financial Measures

Regulation G, Conditions for Use of Non-Generally Accepted Accounting Principles ("Non-GAAP") Financial Measures, and other U.S. Securities and Exchange Commission (“SEC”) rules and regulations define and prescribe the conditions for use of Non-GAAP financial information. Generally, a Non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flow that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. We closely monitor two financial measures, EBITDA and EBITDAS, which meet the definition of Non-GAAP financial measures. We define EBITDA as net income before income taxes, net interest income, depreciation and amortization. We define EBITDAS as EBITDA before stock-based compensation. The Company regards EBITDA and EBITDAS as useful measures of operating performance to complement operating income, net income and other GAAP financial performance measures. Additionally, management believes that EBITDA and EBITDAS provide meaningful comparisons of past, present and future operating results. These measures are used to evaluate our financial results, develop budgets and determine employee compensation. These measures, however, should be considered in addition to, and not as a substitute for or superior to, operating income, cash flows, or other measures of financial performance prepared in accordance with GAAP. A reconciliation of the Non-GAAP measures to the nearest comparable GAAP measure is set forth below.

The following table is a reconciliation of EBITDA and EBITDAS to the most comparable GAAP measure, net income, for the three months ended April 3, 2026 and April 4, 2025:


	Three Months Ended
(in thousands)	April 3, 2026		April 4, 2025
Net income	$	29,569	$	26,650
Add back (subtract):
Income taxes		12,770

EXPONENT INC 10-Q