Exponent's AI-Fueled User Research Surge Drives Beat-and-Raise
A large AI-enabled product study and a broadening portfolio of human factors engagements are reaccelerating growth at the engineering consultancy.
EXPO · Earnings Call · 2026-07-30
Exponent, the engineering consultancy, delivered a stronger-than-expected Q2 with total revenue up 21% and a large AI-driven user research study beating internal expectations by 100%. The company raised full-year guidance and highlighted that the demand for human factors expertise around AI-enabled products is broadening across industries and moving from proactive design to reactive litigation. The stock has risen about 7% in the last 90 days, breaking out of a longer drawdown.
A Beat and Raise, Powered by User Research
Total revenues grew 21% to $171.6M, while net revenues (excluding reimbursables) rose 12% to $148.9M. The gap reflects a surge in reimbursable expenses tied to user research, often involving on-site data collection. CFO Eric Anderson noted: “Our results this quarter benefited from a large user research study that represented approximately 4% of net revenues, which was higher than the 2% of net revenues that we expected from this project.” — Eric Anderson, Chief Financial Officer · 2026-07-30 The company raised its full-year net revenue growth guidance to 9-10% and EBITDA margin to 27.8-28.1%. The revenue acceleration is part of a longer trend. Total revenue grew 14% yoy in Q1 and 12% net in Q2, but the mix shift toward higher-value user research and AI-related work is improving the quality of growth.AI's Expanding Footprint: From Proactive Studies to Reactive Litigation
CEO Catherine Corrigan described how AI is permeating both the proactive and reactive sides. The proactive side is led by user research for AI-enabled hardware, from consumer electronics to wearables. The reactive side is seeing increased disputes over advanced driver assistance systems. “One of the places in reactive where we are probably seeing it the most is around advanced driver assistance technologies... It's not just the sensors, it's not just the performance of the automated braking system, but it's now even going into the performance of the driver distraction and driver monitoring systems.” — Catherine Ford Corrigan, Chief Executive Officer · 2026-07-30 This human-machine interface is a core focus. The company's human factors expertise is becoming a competitive moat. Corrigan explained the differentiated value:The proactive work is also diversifying into life sciences, as AI-enabled medical devices raise the bar for clinical validation. “It's really diversifying across multiple dimensions. We are doing these types of studies for more clients, and actually across more industries.” — Catherine Ford Corrigan, Chief Executive Officer · 2026-07-30 This is not a new theme. In early 2025, Corrigan pointed to the shift in AI litigation: “you have the technology and it didn't perform.” — Catherine Corrigan, CEO · 2025-02-06 And in mid-2025, she noted Exponent's unique position: “We are uniquely positioned for that with our deep roots in failure analysis and in engineering and scientific systems.” — Catherine Ford Corrigan, Chief Executive Officer · 2025-08-01 The continuity shows that the current AI-driven wave is building on a foundation of decades of failure analysis work.These engagements increasingly call for a combination of human factors, biomechanics, engineering, and data science expertise to elucidate how people interact with AI-enabled technologies in situations where standard research approaches are woefully inadequate.