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PART I
Item 1. Business
GENERAL
Exponent, Inc., together with its subsidiaries, (“Exponent”, the “Company”, “we”, “us” and “our”) is a science and engineering consulting firm that provides solutions to complex problems. Our interdisciplinary team of scientists, physicians, 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.
The history of Exponent, Inc. goes back to 1967, with the founding of the partnership Failure Analysis Associates, which was incorporated the following year in California and reincorporated in Delaware as Failure Analysis Associates, Inc. in 1988. The Failure Group, Inc. was organized in 1989 as a holding company for Failure Analysis Associates, Inc. and changed its name to Exponent, Inc. in 1998.
CLIENTS
General
Exponent serves clients in chemical, construction, consumer products, energy, food, beverage and nutrition, government, life sciences, insurance, manufacturing, technology, industrial equipment, transportation and other sectors of the economy. Many of our engagements are initiated directly by large corporations or by lawyers or insurance companies whose clients anticipate, or are engaged in, litigation related to their products, equipment, processes or services. The scope of our services in failure prevention and technology evaluation has grown as the technological complexity of products has increased over the years. During 2025, we provided services representing approximately 21%, 20%, 16% and 11% of revenues to clients in the consumer products industry, energy and utilities industries, transportation industry and chemical industry, respectively.
Pricing and Terms of Engagements
We provide our services on either a fixed-price basis or on a time and material basis, charging in the latter case hourly rates for each staff member involved in a project, based on their skills and experience. Our standard rates for professionals range from $225 to $1,375 per hour. We implement bill rate increase annually at the start of our fiscal year. Our engagement agreements typically provide for monthly billing, require payment of our invoices within 30 days of receipt and permit clients to terminate engagements at any time. Clients normally agree to indemnify us and our personnel against liabilities arising out of the use or application of the results of our work or recommendations.
SERVICES
Exponent provides high quality engineering and scientific consulting services to clients around the world. Our service offerings are provided on a project-by-project basis. Many projects require support from multiple practices. We currently operate the following 17 practices in two reportable operating segments, (i) Engineering and Other Scientific and (ii) Environmental and Health:
ENGINEERING AND OTHER SCIENTIFIC
•Biomedical Engineering & Sciences
•Civil & Structural Engineering
•Electrical Engineering & Computer Science
•Materials Science & Electrochemistry
•Metallurgical & Corrosion Engineering
ENVIRONMENTAL AND HEALTH
•Chemical Regulation & Food Safety
•Ecological & Biological Sciences
•Environmental & Earth Sciences
ENGINEERING AND OTHER SCIENTIFIC
Biomechanics
Our Biomechanics Practice applies engineering principles and biomechanical knowledge to address intricate challenges at the intersection of biology, healthcare, and engineering. Our expertise enables us to comprehend and evaluate the interaction between the human body as a biological system and the physical environment. This analysis facilitates the identification of the causes, nature, and severity of injuries, as well as the potential impact and optimization of human health and well-being. We apply biomechanical principles to assess the injury potential associated with the use and misuse of consumer and industrial products. Furthermore, we extend these principles to support the development and integration of wearable and digital technology solutions, tailored to specific use cases and user outcomes.
Over the past several years, our biomechanics staff conducted analyses of human injuries that occurred while individuals were utilizing a diverse range of products, including recreational vehicles, sporting goods, trucks, trains, aircraft, industrial equipment, and automobiles. Additionally, they evaluated the implications of utilizing protective devices (such as restraint systems, airbags, and helmets) in reducing the likelihood of injury and assessed injuries in various settings, including workplaces, homes, and recreational activities. Our consultants also evaluated product designs for performance, hazards, and injury risks to assist clients with design modifications, address consumer feedback, and respond to regulatory requirements. Finally, they designed and conducted a series of large-scale laboratory-based and subsequent clinical validation and benchmarking efforts to support the design, development, and adoption of fit-for-purpose solutions.
Biomedical Engineering and Sciences
Our Biomedical Engineering and Sciences Practice applies engineering principles and scientific methodologies to medical technologies, including the evaluation of designs and performance of medical devices, pharmaceuticals, and biologics. Our engineers and scientists assist clients with characterization of biomaterials, medical devices, and their interactions with pharmaceuticals, cells, and tissues. To assist in regulatory clearance and approval, we perform preclinical testing, help formulate related regulatory strategy, and conduct design verification and validation. We also assist with design and manufacturing failure analyses, root cause assessment, recall management, and medical device explant analysis. In addition, our staff performs analysis of clinical outcomes for medical devices and related procedures using administrative claims databases. Our expertise is also utilized in product liability, intellectual property litigation, regulatory investigation support, technology acquisition and due diligence matters.
Civil & Structural Engineering
Our Civil & Structural Engineering Practice brings together decades of expertise to offer a comprehensive, multidisciplinary approach to promoting the safety, durability, and economic viability of a wide range of infrastructure assets. We address the challenges inherent in designing, constructing, and maintaining buildings, bridges, tunnels, pipelines, and industrial facilities—investigating the extent to which these structures perform their essential functions under a variety of loading conditions and natural hazards. Our team, which includes structural engineers, geotechnical experts, architects, material scientists, and geologists, is dedicated to identifying and solving complex engineering problems. Whether it is evaluating structural failures due to natural or human-induced phenomena, or investigating soil issues such as landslides, foundation and retaining wall damage, and dam or levee failures, we leverage sophisticated simulation tools, on-site inspections, laboratory testing, and state-of-the-art remote sensing technologies to provide actionable insights and recommendations for remediation.
In addition to failure investigations and repair recommendations, we specialize in assessment and mitigation of risk to the built environment associated with hazards such as hurricanes, flooding, wildfires, earthquakes, explosions, ground movement, and aging infrastructure. We have assessed such risks to high-rise buildings, bridges, tunnels, industrial facilities, pipelines and nuclear power plant structures and provided testimony in the U.S. and international courts of law. Our expert consultation ensures that clients—from property owners and contractors to utilities and government agencies—receive the highest level of technical support and innovative solutions to complex engineering challenges.
Construction Consulting
Our Construction Consulting Practice provides project advisory, risk management, strategic planning, dispute resolution, and delay and damages analysis services on construction and engineering projects. The practice operates across multiple industry sectors, including utilities, data centers, transportation, infrastructure, oil and gas, power generation, and healthcare.
Our team of advisors and experts is engaged on domestic and international projects, supporting clients throughout the project lifecycle. Engagements range from establishing construction oversight and risk management processes, to managing programs and projects, and analyzing and resolving cost and schedule impact claims. The practice is staffed by a multidisciplinary team that includes construction and civil engineers, project and program managers, project controls engineers, schedulers, and cost engineers. We provide construction consulting services to public and private sector clients, including corporations, law firms, and government agencies.
Data Sciences
Our Data Sciences Practice comprises our core capabilities in artificial intelligence, machine learning, statistics, data analytics, and dedicated data collection. Drawing on experience across a breadth of engineering, science, health, and environmental applications, we assist clients with their most complex data and analysis challenges at all stages of the product or process life cycle. Our team of interdisciplinary scientists and engineers decodes complex systems and gathers the right data for better performance, reliability, and security. User-focused visualizations support data-driven decision-making and help clients measure risks and benefits to determine appropriate courses of action. Using rigorous statistical methods, our team can help assess and improve quality and reliability and mitigate risk. Our experience helps clients build products that perform for a wide variety of users while preventing data bias, collecting personal data with consideration for privacy, and managing the risks associated with global data collection.
During the past year, our team worked on diverse projects for industrial, government, and legal clients. We performed advanced model development to manage risks for physical systems, assessments of manufacturing quality systems, large-scale data collections to train algorithms, and developed sampling plans associated with product recall campaigns.
Electrical Engineering & Computer Science
Our Electrical Engineering and Computer Science Practice offers a broad range of expertise to address complex issues for industrial, government and legal clients. Our power engineers advise clients on challenges relating to reliability of electrical systems, failures in power generation, transmission and distribution, such as for powering Artificial Intelligence Data Centers, as well as on distributed generation, and renewables. In the area of energy storage, we are a leader in the industry in expertise and capabilities for safety of large format batteries, such as Electric Vehicles and Battery Energy Storage Systems.
Our team of electronic engineers works on failure analysis, product robustness and reliability for consumer devices, industrial electronics and the health industry. Our computer scientists and engineers advise high-tech industry clients and work with computer-controlled applications to evaluate product safety and software reliability. The computer science and engineering expertise we offer encompasses a breadth of areas including machine learning and artificial intelligence, information and numerical sciences, algorithms and data structures, computer graphics, computer architecture, networking and communications, as well as cybersecurity and cryptography. We operate laboratories for testing heavy equipment and electronics and we have broad capabilities in computer software analysis.
Over the past year, we performed a wide array of investigations ranging from assessing damage to electrical power infrastructure from the effect of weather-related events to working with clients to develop sophisticated machine learning algorithms applied to large quantities of unstructured data. We continue to work with consumer electronics manufacturers and the transportation industry on the reliability and robustness of computer-controlled equipment for user safety.
Human Factors
Our Human Factors Practice evaluates human performance and safety in product and system use. Our consultants study how the limitations and capabilities of people, including memory, perception, sensation, attention, reaction time, judgment, physical size and dexterity, affect the way they use a product, interact with other people, an organization or an environment, process information or participate in an activity.
We review instructions, warnings and labeling issues related to consumer products, pharmaceuticals, motor vehicles, medical devices and industrial products and processes supporting the development of safety information and collateral materials to accompany products and processes and assessing claims that the information provided was inadequate.
We apply our expertise in human behavior, warnings, and decision making in class action suits, and in evaluating claims seeking to establish, or certify, a class. In addition, we assist manufacturers with compliance with regulatory guidelines related to products and facility procedures and work with them regarding analysis of adverse event reports and consumer complaints in publicly available databases overseen by the Consumer Product Safety Commission and the U.S. Food and Drug Administration.
We examine the role that attention plays in human perception, sensation, memory, and behavior, and how attention, inattention, and distraction may affect safety in a wide range of settings and activities (e.g., operating vehicles and machinery, walking, and using consumer products). We address the reliability of human memory and retrospective reporting in the gathering of fact-based evidence. We utilize scientific investigations and research (e.g., human perception, reaction time, and looking behavior) to assess driver behavior in both accident investigations and during the design of automotive systems. Our Human Factors scientists have been actively engaged in research and project work supporting the National Highway Traffic Safety Administration, covering topics such as Advanced Driver Assistance Systems and automated vehicle technology, in order to understand and advise our clients on how these technologies may change the nature and dynamic of driving, and the role and performance of the driver.
We provide User Experience research, including focus groups, usability testing, and complex user studies with custom-tailored designs and analyses, across a wide range of industries, including consumer electronics, medical devices, and vehicle technologies. Our state-of-the-art Phoenix User Research Center, with 5,000 square feet of research space, has six lab suites, including a dedicated focus group room, an ophthalmological lab, a motion capture lab, and wearable eye tracking technology, plus connectivity to our vehicle test track. The scope of Human Factors engagements ranges from consulting on our clients’ research to providing turnkey research solutions.
We perform incident investigations and root cause analyses of near-misses and accidents involving human error in occupational and industrial settings. Our Human Factors scientists have advanced technical systems training and experience required to understand how humans contribute to the initiation of, and emergency response to, explosions, fires, chemical releases, and major equipment failures in the manufacturing, utility, oil and gas, and construction industries, among others. We also capitalize on this knowledge to conduct human error risk and culture assessments to help clients proactively control human performance gaps, improve occupational and process safety performance, and create administrative controls and procedures.
In addition to helping clients address the frequency and severity of incidents related to human error, fatigue, and performance, these and other similar project activities can be leveraged to improve efficiency, reliability, and maintainability of normal operations.
Materials Science & Electrochemistry
Our Materials Science & Electrochemistry Practice leverages expertise in materials behavior and electrochemical systems to help clients design safer, more reliable, and higher‑performing products. As advanced materials and electrochemical technologies have become increasingly central to modern devices, understanding how they function — and fail — is essential to ensuring product safety, durability, and competitive performance.
We apply decades of experience in materials characterization, failure analysis, and product development to evaluate how materials respond to mechanical, chemical, thermal, and environmental stresses. Our consultants address challenges involving brittle materials, thin films, coatings, nanomaterials, optical materials, and transport phenomena, helping clients select appropriate materials, assess performance, and optimize functionality.
Our electrochemistry expertise supports technologies such as batteries, fuel cells, sensors, electrolysis systems, and industrial electrochemical processes. We assist clients in understanding degradation mechanisms, evaluating safety and reliability, and advancing next‑generation electrochemical designs.
Over the past several years, our teams have conducted multidisciplinary investigations involving product failures, performance claims, and risk assessments across industries including consumer electronics, energy, medical device, and transportation. We also provide expert witness support in matters involving product liability, intellectual property, and trade secrets, supported by our strong foundation in direct industrial consulting.
Mechanical Engineering
We provide clients with a detailed analysis of current and alternative designs of mechanical systems to identify vulnerabilities before failures occur, develop appropriate risk mitigation methods, and provide post-failure investigations.
Our consultants review the performance and reliability of industrial processes, manufactured products, and engineered systems, and we determine the root cause of failures. Further, we assist in legal and insurance matters, failure investigations, product recall investigations, internal compliance programs, product development, workplace safety evaluations, and intellectual property matters.
Our staff members develop and utilize detailed and validated computational models and laboratory experimental methods to evaluate products, systems, and equipment. We perform field inspections, rely on industry standards, and use operational data to inform our analyses. We have performed these activities in a broad range of industries including transportation, energy, industrial equipment, building systems, medical devices, and consumer products.
During the past year, our mechanical engineers worked on a wide variety of projects including international construction disputes, product recalls, and mechanical safety in product development.
Metallurgical & Corrosion Engineering
Our in-depth knowledge of materials science, corrosion, and metallurgical engineering combined with the breadth of our collective experience across many industries and disciplines gives our Metallurgical & Corrosion Engineering Practice the ability to efficiently provide our clients with solutions to their complex problems. We use our knowledge and experience to understand how and why materials, products, and processes may not perform their intended function. Further, we use this knowledge to help our clients minimize the risk for future failures of new products as well as current construction and aging infrastructure.
Over the past year, our Metallurgical & Corrosion Engineering Practice helped clients solve critical materials-related issues in the transportation, energy, utilities, infrastructure, medical device, and chemical processing fields. Our support of dispute resolution in international arbitration, domestic litigation, and general product liability fields was supported by our strong position in direct industrial consulting.
Polymers & Chemistry
Our Polymers and Chemistry Practice consults with industrial, government, legal, insurance and individual clients regarding polymers and textiles used in diverse applications as well as the chemistry, materials and processing aspects of infrastructure, medical device, automotive, construction, and other products that depend on highly controlled manufacturing environments.
We assist clients in understanding the short- and long-term performance of plastic, rubber, adhesive, coating, composite and other polymer-based material systems when challenged by physical, chemical, thermal, and other operational stressors. Our work also includes customized chemical, mechanical, thermal, and rheological testing and leverages expanding internal infrastructure for instrumented analysis and advanced imaging capabilities.
Our consultants participate in product development programs, perform failure analyses, intellectual property assessment and provide support to clients involved in regulatory and legal proceedings. Clients value our technical
expertise related to chemistry, formulation, manufacturing and materials performance, our understanding of the history and evolution of these materials, and our ability to assist them in identifying and incorporating emerging materials and manufacturing technologies into their businesses.
During the past year, significant program activities addressed aspects of consumer electronics, wearable devices, implantable medical devices, drug delivery systems, medical diagnostics, building materials, fluid handling systems, oil and gas applications, the plastics supply chain, fire retardancy and flammability, technology scouting, materials science aspects of health risk, service life prediction, sustainability, and intellectual property related to consumer, recreational, medical, pharmaceutical, food packaging, conventional and alternative energy, and other products.
Thermal Sciences
Our Thermal Sciences Practice provides expert analysis to investigate failures involving thermo-fluid systems, fires, and explosions in industrial, residential, commercial, and transportation sectors. We have investigated and analyzed thousands of thermal incidents ranging from high loss accidents in the oil and gas sector and major wildland fires, to small insurance claims. Information gained from these analyses has allowed us to also assist clients in proactively making their assets and products safer.
Our staff, consisting of mechanical, chemical, fire protection, aeronautical and astronautical and nuclear engineers, have assisted clients in assessing risk to, and from, their facilities, consumer product recalls, regulatory compliance and frequently provide expert testimony in domestic litigation and international arbitration. Our engineers use advanced computational fluid dynamics, fire, and explosion modeling tools to supplement our analytical, experimental, and field-based activities. Preventive services include process safety hazard analysis for the chemical, oil and gas, and semiconductor industries, fire protection engineering, product development support, risk-based asset management, and dust explosion consulting.
In recent years, our Thermal Sciences Practice has developed tools to evaluate fire and explosion risks of lithium-ion batteries in applications including consumer products, vehicles, and grid-scale energy storage. We continue to be very active in wildland fire investigation and continue to assist our clients in making informed risk-based decisions related to their assets and wildfires. We have also developed analytical tools to assist utility clients assess the risk of ignition from their infrastructure.
During the past year, we have continued our work in oil and gas exploration and production, liquefied natural gas and downstream oil and gas. Our work in fire detection and protection related issues has remained strong, and our work in consumer product recall and international arbitration has continued.
Vehicle Engineering
We have performed thousands of investigations for the automotive, trucking, recreational vehicle, marine, aerospace, and rail industries. Internal research programs and client projects have resulted in technological contributions that have assisted manufacturers in the understanding of product performance and provided insight to government agencies in establishing policy and regulations. Information gained from these analyses has also assisted clients in assessing preventive measures related to the design of their products, as well as evaluating failures.
Our Test and Engineering Center located in Phoenix, Arizona, is used for our most complex testing and analysis. We have gained a worldwide reputation for our ability to mobilize resources expeditiously and efficiently, integrate a broad array of technical disciplines, and provide valuable insight that is objective and withstands rigorous scrutiny. Many of our projects involve addressing the cause of accidents and our clients rely on us to determine what happened in an accident and why it happened. In many cases, clients also want us to assess what could have been done to reduce the severity of the accident or to mitigate occupant injuries to those involved.
Current advances in emerging transportation technologies and concepts allow our multi-disciplinary team of scientists, engineers, and analysts across numerous practices to focus on the development and implementation of connected vehicles, automated vehicles, connected/smart cities, and data analyses. Whether the objective is design analysis, component testing, failure analysis, or accident reconstruction, our knowledge of vehicle systems and engineering principles coupled with our experience from conducting full-scale tests aim to add insight and proficiency to every project.
ENVIRONMENTAL AND HEALTH SCIENCES
Chemical Regulation & Food Safety
Our Chemical Regulation and Food Safety Practice includes both technical and regulatory specialists who are experts in dealing with foods, food ingredients, dietary supplements, pesticides and biocides (including conventional chemicals, microbials, antimicrobials/biocides, biopesticides, emerging technologies and products of biotechnology), industrial chemicals, pesticide/biocide devices, consumer products, medical devices and pharmaceuticals. We provide practical, scientific and regulatory support to meet global business objectives at every stage of the product life cycle, from research and development to retail and beyond.
During the past year, our Chemical Regulation and Food Safety staff have conducted a wide array of work. The European and U.S. sides of the practice were jointly involved with ongoing support of several new pesticide active ingredients and end-use products. The European side of our business was involved with many projects related to plant protection and biocidal product regulatory submissions, from new active substances and those under review to product-specific dossiers for European Union member states and the United Kingdom. This has included new technologies in plant protection that meet the regulatory pressures to achieve greater sustainability. We have also provided support for reviews of a large number of biocidal products through European and South Korean regulatory reviews. In addition, we provided many specialist assessments relating to human and environmental exposure, risk and product efficacy as well as national and international Maximum Residue Limit/import tolerance submissions covering countries such as South Korea and Japan. The U.S. side of our business was also involved in many projects related to agrochemical, antimicrobial, emerging technologies and biochemical product regulatory submissions and approvals in the U.S., Canada, Brazil and Mexico. These included new active ingredients, end-use products, emerging technologies and import tolerances (EPA and FDA). In addition, we have supported several clients in the U.S. with U.S. Toxic Substances Control Act and U.S. Department of Agriculture Animal and Plant Health Inspection Service compliance. We have supported clients with scientific and regulatory human and environmental exposure, risk assessments and product reviews. In Europe and the U.S., we continued to provide clients with regulatory compliance support for food contact materials, food additives, novel foods, nutrition-related analysis, as well as undertaking safety assessments for food and consumer products.
We also provided proactive and reactive product safety and litigation support. For industrial chemicals, we continued to provide full regulatory support for our clients who prepared and submitted registrations and risk assessments. Our European and U.S. offices were active in supporting our clients with their E.U. and U.K. Registration, Evaluation, Authorisation and Restriction of Chemicals and Toxic Substances Control Act regulatory requirements.
Ecological & Biological Sciences
Our ecological and biological scientists provide strategic support on issues related to the environment and natural resources damages associated with chemicals and forest fires, international environmental disputes, ecosystem service assessments for businesses, adverse weather events/climate change, ecological risk assessment, ecotoxicology, novel remediation methods, restoration of wetlands and other natural resources, large development projects, resource utilization (such as mineral mining, oil and gas, wood pulp, transportation, etc.), agriculture land-use impacts, genomic assessments, product stewardship, and the use of chemicals and other products in commerce. Focusing on both legacy and emerging contaminants, the practice specializes in assessing the integrated effects of chemical, biological, and physical stressors on aquatic and terrestrial ecosystems. Many of these assessments utilize a causal analysis approach to determine causation systematically and transparently in complex and interrelated situations. The practice is comprised of nationally and internationally recognized experts that cover disciplines related to the fate and effects of chemical constituents and other stressors, including the ecological implications and risks associated with these projects.
Environmental & Earth Sciences
Our environmental scientists and engineers provide cost-effective, scientifically defensible and realistic assessments and solutions to complex environmental issues. We offer technical, regulatory, and litigation support to industries that include oil and gas, mining and minerals, chemicals, forest products, railroads, aerospace, development, and trade associations, and to municipal and governmental clients. Our consultants specialize in the areas of environmental fate and transport, environmental chemistry and forensics, remediation consulting, environmental engineering and waste management, and natural resources damages assessment.
Our expertise also includes hydrology and hydrogeology, modeling and monitoring, water quality, water rights and water resources, extreme weather event and climate change risk management, and evaluation of environmental and social risks.
Our work frequently involves complex and high visibility environmental problems and issues, often the focus of environmental or toxic tort claims, where evaluation of contamination and historical reconstruction of events, releases, and doses are central to problem resolution.
We provide case-specific strategic and advisory consulting on risk mitigation, planning, and environmental regulatory and policy issues, as well as high-level technical strategic consulting to support critical business decisions and for complex matters where understanding the long-term implications of early technical actions is critical to managing overall liability.
Health Sciences
Our Health Sciences team includes epidemiologists, toxicologists, industrial hygienists, exposure scientists, biostatisticians, human health risk assessors, and physicians who collectively apply scientific, and medical principles to evaluate, characterize, and communicate human health risks in diverse occupational, environmental, community, and consumer settings. Our consultants bring decades of leadership experience across federal agencies, public health institutions, academia, and private industry, and are both nationally and internationally recognized for their expertise in toxicology, exposure science, risk assessment, chemical stewardship, and environmental health.
Our team provides proactive and responsive support to clients seeking to assess and mitigate human health risks associated with chemicals, pharmaceuticals, advanced materials, and industrial processes. This includes evaluation of potential exposures arising from product formulation and use, facility-specific site activities, environmental releases, and waste management. We also conduct in-depth scientific analyses to support clients addressing claims of adverse health effects linked to chemical exposures, product use, occupational activities, or alleged contamination events.
Our Health Sciences consultants have deep experience evaluating exposures to a wide array of chemical agents—including per- and polyfluoroalkyl substance (PFAS), volatile organic compounds, 1,4‑dioxane, petrochemicals, pesticides, metals, solvents, polycyclic aromatic hydrocarbons (PAHs), asbestos, and airborne particulate matter, as well as physical agents such as power‑frequency electromagnetic fields, and biological agents including bacteria, molds/fungi, and other microorganisms.
Our expertise spans the evaluation of health risks in occupational, residential, community, pharmaceutical, and consumer‑product contexts. We regularly conduct exposure simulations and exposure reconstruction studies using laboratory and field‑based approaches, and integrate toxicological, epidemiological, and mechanistic evidence to interpret potential human health outcomes. We also design health‑protective exposure controls, contribute to corporate risk‑management strategies for both emerging and legacy contaminants, and support occupational safety evaluations across a variety of industries.
Our team’s work includes community‑wide and site‑specific environmental health assessments; disease cluster evaluations; survey research; cohort and case‑control studies; application of real‑world data platforms; advanced exposure simulation studies; biologically based modeling; weight‑of‑evidence evaluations; meta‑analyses; and systematic reviews addressing toxicological, epidemiological, and mechanistic data. Our team members routinely interpret and develop human‑health criteria, assess risk across the full lifecycle of products (from manufacturing through use and end‑of‑life), support due‑diligence evaluations, and analyze potential liabilities associated with chemical constituents and exposures.
Our Health Sciences team also applies extensive experience in risk communication—supporting community engagement for populations near industrial facilities, energy production sites, and environmental releases; communicating complex scientific concepts to regulators, legal teams, and public audiences; and assisting clients with navigating federal, state, and international frameworks governing chemical safety, environmental compliance, and public health protection.
We collaborate closely with colleagues in Biomechanics, Biomedical Engineering & Sciences, Data Sciences, Human Factors, Polymer Science & Chemistry, Environmental & Earth Sciences, and additional technical disciplines. This interdisciplinary approach enhances our capabilities in toxic tort litigation, chemical and materials risk management, environmental remediation, healthcare data science (including use of electronic health records and claims data), and
evaluation of vulnerable or high‑risk populations. Our collective expertise allows us to deliver clear, comprehensive, scientifically grounded insights that enable clients to make informed, defensible, and data‑driven decisions regarding human health risks.
COMPETITION
The marketplace for our services is fragmented and we face different sources of competition in providing various services. In addition, the services that we provide to some of our clients can be performed in-house by those clients. Clients that have the capability to perform such services themselves will retain Exponent or other independent consultants because of independence concerns.
In each of our practices, we believe that the principal competitive factors are: technical capability and breadth of services, ability to deliver services on a timely basis, professional reputation and knowledge of litigation and regulatory processes. Although we believe that we generally compete favorably in each of these areas, some of our competitors may be able to provide services acceptable to our clients at lower prices.
We believe that the barriers to entry are low and that for many of our technical disciplines, competition is increasing. In response to competitive forces in the marketplace, we continue to look for new markets for our various technical disciplines.
HUMAN CAPITAL
We are a global engineering and scientific consulting firm that partners with clients to deliver breakthrough insights and answers. In a world experiencing accelerating change over our 55+ years in business, we still deliver the same vital promise: technical excellence, unrivaled expertise, and a unique multidisciplinary approach to asking and answering the right questions. Our vision is to work together, with our teams and our clients, to solve the most formidable scientific and engineering challenges to create a safe, healthier, sustainable world.
We work toward this vision by creating an unrivaled environment of engineering and scientific expertise, collaboration, and opportunity for exceptional people to achieve breakthrough insights and objective solutions for our clients’ vital challenges. Attracting, exciting, developing, and rewarding these people is central to our mission and our success. Our culture actively supports the development of our professionals and their potential by creating a stimulating, growth-oriented, and inclusive environment.
We keep our values and responsibilities front-and-center in everything we do: our hiring, our training, our processes, and our daily effort. These values include objectivity and work grounded in evidence and facts; excellence in our work and rigorous commitment to the highest standards of quality and integrity; respect and care for our teammates, peers, and partners; a commitment to a diversity of ideas, disciplines, and lived experiences; and a shared belief in the importance of service, responsibility, and making a positive difference for our peers, our professions, and our communities.
We advance scientific and engineering knowledge through the work of employees, but also through a comprehensive commitment to education, teaching, mentoring, publishing, and serving. Recognized leaders in their fields, Exponent staff serve on more than 250 individual scientific and engineering committees and advisory boards. Others serve in leadership roles or are actively working to develop technical standards. Exponent’s professionals routinely contribute to peer-reviewed scientific literature and publish articles, chapters, and books each year. To date, Exponent staff have published more than 1,200 articles in scientific and engineering journals. And today, more than 50 Exponent consultants serve as professors, lecturers, instructors, and advisors at universities and academic institutions across the country and around the world.
As of January 2, 2026, we employed 1,212 full-time, part-time and intermittent employees, including 949 engineering and scientific staff, 62 technical support staff and 201 administrative and support staff. Our staff includes 922 employees with advanced degrees, of which 731 employees have achieved doctorate degrees. As of January 2, 2026 approximately 89% of our employees were located in the United States and 11% were located in other global regions.
Technical full-time equivalent employees is a key metric that we use to analyze our revenues. During 2025 technical full-time equivalent employees increased 1% to 973 as compared to 967 during the prior year. To ensure a compelling total rewards philosophy and practice, we have practices in place to deliver fair and equitable compensation for employees based on their contribution and performance. We also offer a comprehensive set of benefits for employees and their families.
AVAILABLE INFORMATION
The address of our Internet website is www.exponent.com. We make available, free of charge through our website, access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other periodic and current Securities and Exchange Commission (“SEC”) reports, along with amendments to all of those reports, as soon as reasonably practicable after we file or furnish the reports with the SEC. Copies of material filed or furnished by us with the SEC may also be obtained by writing to us at our corporate headquarters, Exponent, Inc., Attention: Investor Relations, 149 Commonwealth Drive, Menlo Park, CA 94025, or by calling (650) 326-9400. The content of our Internet website is not incorporated into and is not part of this Annual Report on Form 10-K.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Exponent and their ages as of February 27, 2026 are as follows:
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|
|
|
|
Name |
|
Age |
|
Position |
Catherine Ford Corrigan, Ph.D. |
|
57 |
|
President and Chief Executive Officer |
Brad A. James, Ph.D. |
|
60 |
|
Group Vice President |
Brian Kundert |
|
51 |
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Chief Human Resources Officer |
John D. Pye, Ph.D. |
|
55 |
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Vice President for Global Offices and Innovation |
Joseph Rakow, Ph.D. |
|
49 |
|
Group Vice President |
Richard Reiss, Sc.D. |
|
59 |
|
Group Vice President |
Maureen T.F. Reitman, Sc.D. |
|
57 |
|
Group Vice President |
Joseph Sala, Ph.D. |
|
49 |
|
Group Vice President |
Richard L. Schlenker, Jr. |
|
60 |
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Executive Vice President, Chief Financial Officer and Corporate Secretary |
Executive officers of Exponent are appointed by the Board of Directors of the Company (the “Board of Directors”) and serve at the discretion of the Board of Directors until the appointment of their successors. There is no family relationship between any of the directors and officers of the Company.
Catherine Ford Corrigan, Ph.D., joined the Company in 1996. She was promoted to Principal in the Biomechanics practice in 2002 and was appointed Group Vice President in May 2012. Dr. Corrigan was named President in July 2016. She was named Chief Executive Officer and elected to the Board of Directors in May 2018. Dr. Corrigan earned her Ph.D. (1996) in Medical Engineering and Medical Physics and M.S. (1992) in Mechanical Engineering from the Massachusetts Institute of Technology and her B.S. in Bioengineering from the University of Pennsylvania. Prior to joining Exponent, Dr. Corrigan was a researcher in the Orthopedic Biomechanics Laboratory at Beth Israel Hospital and Harvard Medical School. On February 9, 2021, Dr. Corrigan was elected to the National Academy of Engineering.
Brad A. James, Ph.D., joined the Company in 1994. He was promoted to Principal Engineer in 2005 and was appointed Corporate Vice President in 2014. Dr. James was appointed Group Vice President on January 4, 2020. Dr. James received his Ph.D. (1994) in Metallurgical and Materials Engineering from the Colorado School of Mines and his B.S. (1988) in Metallurgical Engineering from the University of Washington. He is a licensed professional engineer in the states of California and Texas. Prior to joining Exponent, Dr. James was employed as a Research Engineer, Materials Performance Division, at the Babcock and Wilcox R&D Center.
Brian Kundert, joined the Company on July 10, 2023 as Vice President - Human Resources and was promoted to Chief Human Resources Officer on March 16, 2024. Prior to joining Exponent, Mr. Kundert was most recently the Global Director of Human Resources for the Resilience division at Arcadis, a global design and consulting company,
where he worked for 19 years. Mr. Kundert holds a B.A. (1996) in Psychology from the University of California, Berkeley.
John D. Pye, Ph.D., joined the Company in 1999. He was promoted to Principal Engineer in 2006 and was appointed Corporate Vice President in 2009. Dr. Pye was appointed Group Vice President in January 2014 and was appointed Vice President of Global Offices and Innovation on November 22, 2024. Dr. Pye received his Ph.D. (1999) in Aerospace Engineering from Stanford University, M.S. (1993) in Aerospace Engineering from Stanford University, and B.A.Sc. (1992) in Engineering Science from the University of Toronto, Canada. He is a Registered Professional Mechanical Engineer in the State of California. Prior to joining Exponent, Dr. Pye held a research position in the Aerospace Fluid Mechanics Lab at Stanford University where he was responsible for the renovation and redesign of the Stanford Low-Speed wind tunnel as well as managing the Stanford experimental facilities for the Stanford/NASA Ames Joint Institute for Aeronautics and Astronautics.
Joseph Rakow, Ph.D., joined the Company in 2005. He was promoted to Principal Engineer in 2012 and was appointed Corporate Vice President in 2021. Dr. Rakow was appointed Group Vice President on April 1, 2023. Dr. Rakow received his Ph.D. (2005) in Aerospace Engineering and M.S. (2000) in Aerospace Engineering from the University of Michigan, and B.S. (1999) in Physics from the University of California, Davis. He is a licensed professional engineer in the state of California and a Fellow of the American Society of Mechanical Engineers. Prior to joining Exponent, Dr. Rakow held teaching and research positions at the University of Michigan and Sandia National Laboratories. As a volunteer, Dr. Rakow serves on multiple academic advisory boards at the university level and as a Structures Specialist with FEMA Urban Search & Rescue.
Richard Reiss, Sc.D., joined the Company in 2006 as a Principal Scientist. He was promoted to Group Vice President in January 2015. Dr. Reiss earned his Sc.D. (1994) in Environmental Health from the Harvard University School of Public Health, M.S. (1991) in Environmental Engineering from Northwestern University and B.S. (1989) in Chemical Engineering from the University of California, Santa Barbara. Prior to joining Exponent he was a Vice President with Sciences International. Dr. Reiss is a Fellow of the Society of Risk Analysis.
Maureen T.F. Reitman, Sc.D., joined the Company in 2002. She was promoted to Principal Engineer in 2006 and was appointed Corporate Vice President in 2014. Dr. Reitman was appointed Group Vice President on January 4, 2020. Dr. Reitman received her Sc.D. (1993) in Materials Science and Engineering from the Massachusetts Institute of Technology and her B.S. (1990) in Materials Science and Engineering from the Massachusetts Institute of Technology. She is a registered Professional Mechanical Engineer in the state of Maryland and a fellow of the Society of Plastics Engineers. Prior to joining Exponent, Dr. Reitman worked for the 3M Company in both research and management roles. Her activities at 3M included technology identification, materials selection and qualification, product development, customer support, program management, acquisition integration, intellectual property analysis, and patent litigation support. On February 6, 2024, Dr. Reitman was elected to the National Academy of Engineering.
Joseph Sala, Ph.D., joined the Company in 2005. He was promoted to Principal Scientist in 2012 and was appointed Corporate Vice President in 2019. Dr. Sala was appointed Group Vice President on November 22, 2024. Dr. Sala received his Ph.D. (2004) in Psychology and M.A. (2001) in Psychology and Brain Sciences from John Hopkins University and B.A. (1998) in Psychology and B.S. (1998) in Administration of Justice from Rutgers University. Prior to joining Exponent, Dr. Sala was a post-doctoral fellow at Stanford University where he focused his research on the cognitive neuroscience of human information processing, the brain mechanisms underlying learning, memory, vision, and cognitive control, and their behavioral manifestations.
Richard L. Schlenker, Jr., joined the Company in 1990. Mr. Schlenker is the Executive Vice President, Chief Financial Officer and Corporate Secretary of the Company. He was appointed Executive Vice President in April 2010, Chief Financial Officer in July 1999 and Secretary of the Company in November 1997. Mr. Schlenker was the Director of Human Resources from 1998 until his appointment as Chief Financial Officer. He was the Manager of Corporate Development from 1996 until 1998. From 1993 to 1996, Mr. Schlenker was a Business Manager, where he managed the business activities for multiple consulting practices within the Company. Prior to 1993, he held several different positions in finance and accounting within the Company. Mr. Schlenker holds a B.S. in Finance from the University of Southern California.
Item 1A. Risk Factors
Exponent operates in a rapidly changing environment that involves a number of uncertainties, some of which are beyond our control and may have a material adverse effect on our financial condition and results of operations. These uncertainties include, but are not limited to, those mentioned elsewhere in this report and those set forth below. Although the risks are organized by headings, and each risk is discussed separately, many are interrelated.
Risks Related to Our Clients and Demand for Our Services
The unpredictable and reactive nature of our business can create uneven performance in any given quarter or year.
Revenues are primarily derived from services provided in response to client requests or events that occur without notice, and engagements, generally billed as services are performed, are terminable or subject to postponement or delay at any time by clients. As a result, backlog at any particular time is small in relation to our quarterly or annual revenues and is not a reliable indicator of revenues for any future periods. Revenues and operating margins for any particular quarter are generally affected by staffing mix, resource requirements and timing and size of engagements.
Our financial results could suffer if our clients’ needs change more rapidly than we are able to secure the appropriate mix of trained, skilled and experienced personnel.
As our clients’ needs change, new technologies develop, and legal and regulatory processes change, we may be unable to timely hire or train personnel with the appropriate new set of skills and experience which could negatively impact our growth and profitability.
We may not manage our growth effectively, and our profitability may suffer.
Our expected future growth presents numerous managerial, administrative, operational and other challenges. Our ability to manage the growth of our operations will require us to continue to improve our information systems and other internal systems and controls. In addition, our growth will increase our need to attract, develop, motivate and retain both our management and professional employees. The inability to effectively manage growth or the inability of our employees to achieve anticipated performance could have a material adverse effect on our business.
The loss of a large client could adversely affect our business.
We currently derive a significant portion of our revenues from clients in the chemical, construction, consumer products, energy, life sciences and transportation industries. The loss of any large client could have a material adverse effect on our business, financial condition or results of operations.
Our clients may be unable to pay for our services.
If a client's financial difficulties become severe, the client may be unwilling or unable to pay our invoices in the ordinary course of business, which could adversely affect collections of both our accounts receivable and unbilled services. To the extent there is global economic volatility or an increase in the cost of capital, there could be an adverse impact on the ability of our customers to pay for our services. On occasion, some of our clients have entered bankruptcy, which has prevented us from collecting amounts owed to us. The bankruptcy of a client with substantial accounts receivable could have a material adverse effect on our financial condition and results of operations.
Our business is dependent on our professional reputation.
The professional reputation of Exponent and its consultants is critical to our ability to successfully compete for new client engagements and attract or retain professionals. Proven or unproven allegations against us may damage our professional reputation. Any factors that damage our professional reputation could have a material adverse effect on our business.
Our business can be adversely impacted by regulatory uncertainty, deregulation or reduced regulatory enforcement.
Public concern over health, safety and preservation of the environment has resulted in the enactment of a broad range of environmental and/or other laws and regulations by local, state and federal lawmakers and agencies. These laws and the implementation of new regulations affect nearly every industry, as well as the agencies of federal, state and local governments charged with their enforcement. To the extent deregulation and changes in such laws, regulations and enforcement or other factors significantly reduce the exposures of manufacturers, owners, service providers and others to liability, the demand for our services may be significantly reduced.
Tort reform can reduce demand for our services.
Several of our practices have a significant concentration in litigation support consulting services. To the extent tort reform reduces the exposure of manufacturers, owners, service providers and others to liability, the demand for our litigation support consulting services may be significantly reduced.
Potential conflicts of interest may preclude us from accepting some engagements.
We provide litigation support consulting and other services primarily in connection with significant disputes, or other matters that are usually adversarial or that involve sensitive client information. The nature of our consulting services has and will continue to preclude us from accepting engagements with other potential clients because of conflicts. Accordingly, the nature of our business limits the number of both potential clients and potential engagements.
Inherent risks related to government contracts may adversely affect our business.
We work for various United States and foreign governmental entities and agencies. Government contracts entail, among other things, the obligation to comply with numerous regulations and requirements that may not otherwise apply to us. Government entities reserve the right to audit our contracts and conduct inquiries and investigations of our business practices with respect to government contracts. Findings from an audit may result in fees being refunded to the government or prospective adjustment to previously agreed upon rates that will affect future margins. If a government client discovers improper or illegal activities in the course of audits or investigations, we may become subject to various civil and criminal penalties and administrative sanctions, which may include termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions or debarment from doing business with other agencies of the government. The inherent limitations of internal controls may not prevent or detect all improper or illegal activities, regardless of the adequacy of such controls. Government contracts, and the proceedings surrounding them, are often subject to more extensive scrutiny and publicity than other commercial contracts. Negative publicity related to our government contracts, regardless of whether it is accurate, may further damage our business by affecting our ability to compete for new contracts.
Clients may terminate, cancel, modify or curtail our contracts at any time prior to their completion.
Many of our engagements center on disputes, litigation and other event-driven occurrences that require independent analysis or expert services. Litigation may be settled or dismissed, and disputes may be resolved, in each case with little or no prior notice to us. Under many of our contracts, including our government contracts, the client generally has the right not to exercise options to extend or expand our contracts and may otherwise terminate, cancel, modify or curtail our contracts at its convenience. Our engagements can therefore terminate suddenly and without advance notice to us. If an engagement is terminated unexpectedly, our employees working on the engagement could be underutilized until we assign them to other projects. In addition, because much of our work is project-based rather than recurring in nature, our employees’ utilization depends on our ability to secure additional engagements on a continual basis. Any decision by the client not to exercise contract options or to terminate, cancel, modify or curtail our projects would adversely affect our revenues, revenue growth and profitability.
Artificial intelligence (AI) technologies may reduce demand for our services and change client expectations.
AI technologies are rapidly evolving and may significantly impact our industry and our clients. AI may change client expectations regarding the speed, cost, and manner of service delivery, and if we are unable to meet these evolving expectations or to deliver increased value through the use of AI, we may lose engagements or experience pressure on our pricing and margins. Our competitors may adopt and deploy AI technologies more quickly or effectively than we do, and new market entrants offering AI-based solutions may offer automated alternatives as a substitute for our services, potentially displacing demand for certain of our offerings. AI technologies may also render some of our existing service offerings less valuable or obsolete, particularly those that are more standardized in nature. Our failure to capitalize on the many opportunities presented by AI or to adapt our business model in response to AI-driven market changes could have a material adverse effect on our revenues and profitability.
Risks Related to Our Operations
Failure to attract and retain key employees may adversely affect our business.
Our business involves the delivery of professional services and is people-intensive. Our success depends in large part upon our ability to attract, retain and motivate highly qualified technical and managerial personnel. Qualified personnel are in great demand and are likely to remain a limited resource for the foreseeable future. We cannot provide any assurance that we can continue to attract sufficient numbers of highly qualified technical and managerial personnel and retain existing employees. We have experienced and expect to continue to experience employee turnover. We face threats from competitors who aggressively seek to poach our talent. The loss of key managerial employees, business generators or any significant number of employees could have a material adverse impact on our business, including our ability to secure and complete engagements. We rely heavily on our executive officers, group vice presidents, and practice/office directors to manage our operations. Given the highly specialized nature of our services and the scale of our operations, our executive officers, group vice presidents and practice/office directors must have a thorough understanding of our services and operations, as well as the skills and experience necessary to manage a large organization in diverse geographic locations. We are unable to predict with certainty the impact that leadership transitions and the loss of certain employees in leadership roles may have on our business operations, prospects, financial results, client relationships, or employee retention or morale.
Our engagements may result in professional or other liability.
Our services typically involve difficult engineering and scientific assignments and carry risks of professional and other liability. Many of our engagements involve matters that could have a severe impact on a client's business, cause a client to lose significant amounts of money, or prevent a client from pursuing desirable business opportunities. Accordingly, if a client is dissatisfied with our performance, the client could threaten or bring litigation in order to recover damages or to contest its obligation to pay our fees. Litigation alleging that we performed negligently, disclosed client confidential information, lost or damaged evidence, infringed on patents, were forced to withdraw from a legal matter due to a conflict or otherwise breached our obligations to a client could expose us to significant liabilities to our clients or other third parties or tarnish our reputation.
We are subject to unpredictable risks of litigation.
Although we seek to avoid litigation whenever possible, from time to time we are party to various lawsuits and claims. Disputes may arise, for example, from employment issues, regulatory actions, business acquisitions and real estate and other commercial transactions. There can be no assurances that any lawsuits or claims will be immaterial in the future. Any material lawsuits or claims could adversely affect our business and reputation.
We are subject to security breaches that may disrupt our operations and/or lead to the inability to protect confidential information.
We have experienced, and expect to continue to be subjected to, security breaches and threats, none of which have been material to us to date. Despite the implementation of security and business continuity measures, our information technology infrastructure and networks are vulnerable to electronic breaches of security. The adoption of AI
technologies may also introduce new cybersecurity vulnerabilities, and AI systems may be targeted by cyberattacks or exploited to extract sensitive data. Furthermore, we are subject to risks to information security posed by external or insider threats, including unauthorized access, manipulation, misuse, or improper disclosure of proprietary, sensitive, or confidential information by employees, contractors, or other insiders. Any such breaches could lead to disruptions of our operations and potential unauthorized disclosure of confidential and/or personal information, which could result in legal claims or proceedings, have impacts to our operations, and/or cause harm to our reputation. Our systems and data are protected by a comprehensive Information Security program detailed in our Information Security Management System. Dedicated security, privacy, information governance, and compliance professionals maintain the program with oversight provided by the Board of Directors in conjunction with senior leadership. See Item 1C. for more information about our Cybersecurity Risk Management and Strategy. While we have taken reasonable steps to prevent and mitigate the damage of a security breach by continuously improving our design and coordination of security controls across our business, those steps may not be effective and there can be no assurance that any such steps can be effective against all possible risks.
Laws regarding data protection continue to rapidly evolve, and failure to protect client and employee data may have an adverse effect on our business.
We manage, utilize, and store sensitive or confidential client and employee data, including personal data and protected health information. As a result, we are subject to numerous laws and regulations designed to protect this information, such as the U.S. federal and state laws governing the protection of health or other personally identifiable information, including the Health Insurance Portability and Accountability Act, and international laws such as the European Union General Data Protection Regulation and the People’s Republic of China’s Data Security Law. In addition, many states, U.S. federal governmental authorities and non-U.S. jurisdictions have adopted, proposed, or are considering adopting or proposing, additional data security and/or data privacy statutes or regulations. For instance, we may be subject to Federal Trade Commission (FTC) enforcement actions if the FTC has reason to believe we have engaged in unfair or deceptive privacy or data security practices in violation of the FTC Act. In addition, an increasing number of U.S. states have enacted U.S. state privacy laws that set forth comprehensive privacy and security obligations regarding the collection and processing of personal data, including such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act, and other state laws that set forth comprehensive privacy and security obligations regarding the collection and processing of personal data. These laws and regulations are increasing in complexity and number. As a result of these legal and regulatory requirements we incur and expect to continue to incur significant ongoing costs as part of our efforts to comply with applicable law. Failure to comply with these laws and regulations may lead to significant monetary damages, regulatory enforcement actions, fines, penalties or other regulatory liabilities, such as orders or consent decrees forcing us to modify business practices, and reputational damage or third-party lawsuits for any noncompliance with such laws. If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client or employee data, or otherwise mismanages or misappropriates that data, we could also be subject to significant monetary damages, regulatory enforcement actions, fines, and/or criminal prosecution. In addition, unauthorized disclosure of sensitive or confidential client or employee data, whether through systems failure, employee negligence, fraud, or misappropriation, could damage our reputation and cause us to lose clients and their related revenue in the future.
Our adoption and use of artificial intelligence technologies may create operational, legal, and regulatory risks.
To remain competitive, we have made and will continue to make investments in AI technologies, infrastructure, talent, and training, and these investments may not yield anticipated benefits or may become obsolete more quickly than expected. The use of AI tools to assist in the preparation of our work product or our corporate operations may expose us to new forms of liability. AI solution may produce inaccurate, incomplete, incorrect or misleading outputs, and if erroneous AI-generated content is incorporated into our deliverables, we could face claims of professional negligence, harm to our professional reputation, and other legal actions. Maintaining rigorous quality control over AI-assisted work product may require additional resources and oversight that could offset anticipated efficiency gains. AI-driven changes to our workforce and service delivery model could also be disruptive and may adversely affect employee morale and retention. The legal and regulatory landscape governing AI is evolving rapidly and remains uncertain, and compliance with existing and emerging AI regulations may require significant resources. Failure to comply with
applicable AI-related laws and regulations could result in regulatory enforcement actions, fines, litigation, and reputational damage.
Our international operations create special risks that could adversely affect our business.
In addition to our offices in the United States, we have a presence in the United Kingdom, Switzerland, Hong Kong, China, Singapore, Ireland, Germany, and Canada, and conduct business in several other countries. We expect to continue to expand globally and our international revenues may account for an increasing portion of our revenues in the future. Our international operations carry special financial, business and legal risks, including cultural and language differences; employment laws and related factors that could result in lower utilization, higher staffing costs, and cyclical fluctuations of utilization and revenues; currency fluctuations that adversely affect our financial position and operating results; burdensome regulatory requirements and other barriers to conducting business; tariffs/trade disputes and other trade barriers; geopolitical risks that could result in an adverse impact to our clients and Exponent, such as cyberattacks, trade sanctions, and increased regulatory scrutiny on operations; armed conflicts and wars, including current and potential global conflicts; managing the risks associated with engagements with foreign officials and governmental agencies, including the risks arising from the United States Foreign Corrupt Practices Act and the United Kingdom Bribery Act of 2010; managing the risks associated with global privacy and data security laws and regulations including the General Data Protection Regulation in Europe and China’s data protection and national security laws; greater difficulties in managing and staffing foreign operations; successful entry and execution in new markets; restrictions on the repatriation of earnings; potentially adverse tax consequences; and other impending legislation that could add additional risks to the business.
Employee or contractor misconduct, or our failure to comply with governmental, regulatory and legal requirements or with our company-wide Code of Business Conduct and Ethics and related policies could lead to governmental or legal proceedings that could expose us to significant liabilities and damage our reputation.
Misconduct, fraud, non-compliance with applicable laws and regulations or other improper activities by one of our employees, agents or partners could have a significant negative impact on our business and reputation. Such misconduct could include the failure to comply with government procurement regulations, regulations regarding the protection of classified information, regulations prohibiting bribery and other foreign corrupt practices, regulations regarding the pricing of labor and other costs in government contracts, regulations on lobbying or similar activities, regulations pertaining to the internal controls over financial reporting, environmental laws and any other applicable laws or regulations. Our Code of Business Conduct and Ethics and related policies mandate compliance with applicable laws including anti-bribery, and insider trading. Nonetheless, we cannot assure that our policies, procedures and related training programs will ensure full compliance with all applicable legal requirements. Illegal or improper conduct by our executive officers, directors, employees, independent consultants or contractors, or others who are subject to our policies and procedures could damage our reputation in the U.S. and internationally, which could adversely affect our existing client relationships or adversely affect our ability to attract and retain new clients, or lead to litigation or governmental or regulatory proceedings in the U.S. or foreign jurisdictions, or could subject us to fines and penalties, loss of security clearances and suspension or debarment from contracting, any or all of which could harm our reputation, reduce our revenue and profits and subject us to criminal and civil enforcement actions.
Failure to comply with domestic and international export laws could adversely affect our business.
To the extent we export technical services, data and information outside of the locations where we operate, we are subject to U.S. and international laws and regulations governing international trade and exports, including but not limited to the International Traffic in Arms Regulations, the Export Administration Regulations and trade sanctions against embargoed countries or parties. An increase in government use of export controls and sanctions lists could affect both our client engagements and our operations. A failure to comply with these laws and regulations could result in civil or criminal sanctions, including the imposition of fines, the denial of export privileges and suspension or debarment from participation in U.S. government contracts, which could have a material adverse effect on our business.
Our business depends on our ability to use and access information systems, and modernize or replace such systems from time to time, and failure to effectively maintain such systems or modernize or replace systems, or difficulties
encountered in implementing new or replacement systems could materially adversely affect our business and operations and harm our reputation.
We depend on multiple internal and external information systems for operating our business. We utilize commercially available third-party technology solutions, which in many cases are customized to our business needs. Our information systems may be compromised by power outages, computer and telecommunications failures, computer viruses, security breaches, hackers, catastrophic events, AI-enabled threats, human error and other events, many of which are beyond our control, and are subject to obsolescence and technological changes. If our information systems fail to work properly or otherwise become unavailable, or if we encounter difficulties in integrating new or replacement systems, we may incur substantial time, efforts and costs to repair or replace such systems, or otherwise carry out our operations without the ability to use such systems. Failure of any such information system could result in delays, significant additional costs, incorrect information, failure of internal control and harm to our reputation as well as expose us to regulatory actions and claims any of which could adversely affect our business and results of operations and our reputation.
Increases in operating expenses may adversely affect our profitability and margins.
Increases in compensation and related expenses, other operating expenses, general and administrative expenses, and tax expenses due to inflation, supply chain disruptions, labor market conditions, real estate market conditions, geographic conditions, regulatory requirements, or other economic or political factors may adversely affect our profitability and margins. Increases in compensation and related expenses that exceed our bill rate increases, increases in rent when our operating leases expire, increases in compliance costs associated with new regulations, and increases in tax rates would adversely affect our profitability.
General Risks
Competition could reduce our pricing and adversely affect our business.
The markets for our services are highly competitive. In addition, there are relatively low barriers to entry into our markets and we have faced, and expect to continue to face, additional competition from new entrants into our markets. Competitive pressure, including from those utilizing AI technologies, could reduce the market acceptance of our services and result in limitations in our ability to implement billing rate increases or maintain billing rates that could have a material adverse effect on our business, financial condition or results of operations.
We hold substantial investments that could present liquidity risks.
Our cash equivalent portfolio as of January 2, 2026 consisted primarily of obligations of the U.S. Treasury. We follow an established investment policy to monitor, manage and limit our exposure to interest rate and credit risk. The policy sets forth credit quality standards and limits our exposure to any one issuer, as well as our maximum exposure to various asset classes.
Investments in some financial instruments may pose risks arising from liquidity and credit concerns. As of January 2, 2026, we had no impairment charge associated with our investment portfolio relating to such adverse financial market conditions. Although we believe our current investment portfolio has a low risk of impairment, we cannot predict future market conditions or market liquidity and can provide no assurance that our investment portfolio will remain unimpaired.
Impairment of goodwill may require us to record a significant charge to earnings.
On our balance sheet as of January 2, 2026, we have $8,607,000 of goodwill subject to periodic evaluation for impairment. Failure to achieve sufficient levels of cash flow at reporting units, the loss of key employees, changes to the scope of operations of our business or a significant and sustained decline in our stock price could result in goodwill impairment charges. During times of financial market volatility, significant judgment is required to determine the
underlying cause of the decline and whether stock price declines are short-term in nature or indicative of an event or change in circumstances.
Impairment of long-lived assets or restructuring activities may require us to record a significant charge to earnings.
Our long-lived assets, including our office, laboratory and warehouse space in Menlo Park, California, our Test and Engineering Center in Phoenix, Arizona, and our office and laboratory facilities in Natick, Massachusetts, are subject to periodic testing for impairment. Failure to achieve sufficient levels of cash flow at the asset group level could result in impairment of our long-lived assets. In addition, we have operating lease right-of-use assets for office and laboratory space which are also subject to impairment. Changes in the business environment could lead to changes in the scope of operations of our business. These changes, including the closure of one or more offices, could result in restructuring and/or asset impairment charges.
Uncertainty about current and future economic conditions and other adverse changes in general political conditions in any of the countries in which we do business could adversely affect our operating results.
We are subject to risks arising from adverse changes in economic and political conditions, both domestically and globally, including regulatory uncertainty and unfavorable changes in economic conditions, such as inflation, rising interest rates or a recession, and other events beyond our control, such as geopolitical developments, economic sanctions, natural disasters, pandemics, epidemics, political instability, armed conflicts and wars, including current and potential global conflicts. Worsening economic conditions have had and may continue to have an adverse impact on the businesses and financial health of many of our clients. As a result, current or potential clients may consolidate or go out of business and thus demand for our services may be reduced significantly. Political changes and trends such as populism, protectionism, economic nationalism and sentiment toward multinational companies, as well as tariffs, export controls, restrictions on outbound investment or other trade barriers, sanctions, currency controls, or changes to tax or other laws or policies, have been and may continue to be disruptive to our business. These can interfere with our global operating model, client relationships, and competitive position. Further escalation of any specific trade tensions between the U.S. and China, or in global trade conflict more broadly could be harmful to global economic growth or to our business in China or other countries.
Our quarterly results may vary.
Variations in our revenues and operating results occur from time to time, as a result of a number of factors, such as the significance of client engagements commenced and completed during a quarter, the timing of engagements, the number of working days in a quarter, employee hiring and utilization rates. Because a high percentage of our expenses, particularly personnel and facilities related expenses, are relatively fixed in advance of any particular quarter, a variation in the timing of the initiation or the completion of our client assignments can cause significant variations in operating results from quarter to quarter.
The market price of our common stock may be volatile.
Many factors could cause the market price of our common stock to rise and fall. These include the risk factors listed above and below; changes in estimates of our performance or recommendations by securities analysts; future sales of shares of common stock in the public market; market conditions in the industry and economy as a whole; acquisitions or strategic alliances involving us or our competitors; restatement of financial results; and changes in accounting principles or methods. In addition, the stock market often experiences significant price fluctuations. These fluctuations are often unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the market price of our common stock. When the market price of a company's stock drops significantly, stockholders often institute securities class action litigation against that company. Any litigation against us could cause us to incur substantial costs, divert the time and attention of our management and other resources, or otherwise harm our business.
There can be no assurance that we will continue to declare cash dividends or repurchase our shares at all or in any particular amounts.
Our Board of Directors has declared quarterly dividends since March 2013. Our intent to continue to pay quarterly dividends and to repurchase our shares is subject to capital availability and, in the case of dividends, periodic determinations by our Board of Directors that cash dividends are in the best interest of our stockholders and are in compliance with all laws and agreements applicable to the declaration and payment of cash dividends by us. Future dividends and share repurchases may also be affected by, among other factors: our views on potential future capital requirements for investments, including acquisitions; legal risks; stock repurchase programs; changes in federal and state income tax laws or corporate laws; contractual restrictions; and changes to our business model. Our dividend payments and share repurchases may change from time to time, and we cannot provide assurance that we will continue to declare dividends or repurchase shares at all or in any particular amounts. A reduction or suspension in our dividend payments or share repurchase activity could have a negative effect on our stock price.
Catastrophic events may disrupt our business.
We rely on our network infrastructure and certain third-party hosted services to support our operations. A disruption or failure of these systems in the event of a major earthquake, fire, flood, tsunami or other weather event, power loss, telecommunications failure, software or hardware malfunctions, pandemics, cyber-attack, war, terrorist attack or other catastrophic event that our disaster recovery plans do not adequately address, could have a material adverse effect on our business, financial condition or results of operations.
Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure as well as disrupt the management of our business operations.
We maintain insurance coverage from third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain specific insurance coverage limits. If any of our third-party insurers fail, suddenly cancel our coverage or otherwise are unable to provide us with adequate insurance coverage, then our overall risk exposure and our operational expenses would increase and the management of our business operations would be disrupted. In addition, there can be no assurance that any of our existing insurance coverage will be renewable upon the expiration of the coverage period or that future coverage will be affordable at the required limits.
Climate change may disrupt our business.
The areas where we conduct business are vulnerable to the effects of climate change. For example, in California, wildfire danger increases the probability of planned power outages which may impact our employees’ abilities to commute to work and to stay connected. Climate-related events, including the increasing frequency of extreme weather events and their impact on critical infrastructure, have the potential to disrupt our business.
Failure to meet climate expectations or standards could adversely affect our business, reputation, brand, results of operations and financial condition
Our stakeholders, especially our clients, may have expectations about our sustainability-related initiatives, disclosures and progress. Client preferences may shift to support companies demonstrating more positive climate progress than we have shown. Furthermore, if our competitors’ environmental, social, or governance practices are perceived to be better than our own, certain investors or clients may elect to invest in or be a patron of our competitors instead, which could have an adverse impact on our business, financial condition, and results of operations.
Item 1C. Cybersecurity
Risk Management and Strategy
We recognize the critical importance of cybersecurity and data privacy in safeguarding our operations, sensitive data, and maintaining the trust of our stakeholders. We acknowledge the significance of cybersecurity incidents and threats as potential risks that may impact our operations and information systems. We have developed and implemented cybersecurity and data privacy programs in accordance with the requirements of ISO standards 27001:2022 and 27701:2019, which are intended to appropriately preserve the confidentiality, integrity, and availability of information maintained by our company. These programs identify, select, maintain, operate, and improve cybersecurity and privacy controls.
We have implemented processes for assessing, identifying, and managing material risks from cybersecurity threats. These processes are designed to preserve the confidentiality, integrity, and availability of our information systems and the information residing therein. Our cybersecurity incident response plan is based on the NIST 800-61r2 “Computer Security Incident Handling Guide.” This plan is used to process security events identified through our real-time, 24x7 monitoring, and is also used to conduct security incident tabletop exercises. The incident response plan includes detailed steps for incident leadership, escalation to established partners, response protocols based on the type of incident, responsibilities for follow-up and reporting, and steps to capture lessons learned and improvement opportunities. Our vulnerability management processes include real-time monitoring for vulnerabilities and standardized reporting for managing remediation efforts. Our cybersecurity risk management processes are integrated into our overall risk management system to ensure alignment with our business objectives and strategies. We engage assessors, consultants, auditors and other third parties to execute certification audits, penetration tests, and security framework risk assessments. These external entities provide specialized expertise and insights to enhance the effectiveness of our cybersecurity risk management processes.
We have established processes to oversee and identify cybersecurity risks associated with our use of third-party service providers, including cloud service providers and AI systems. We conduct due diligence assessments and evaluate contractual obligations to mitigate potential risks arising from third-party relationships.
Cybersecurity threats, including previous incidents, have the potential to materially affect our company, including our business strategy, results of operations, and financial condition. While we have not experienced material adverse effects from cybersecurity threats to date, we recognize the evolving nature of these risks and remain vigilant in our efforts to mitigate potential impacts.
Governance
Our Board of Directors provides oversight of risks from cybersecurity threats. The Security and Privacy Management Committee (the “SPMC”) consists of our Chief Financial Officer, General Counsel, Vice President of Information Technology, Chief Human Resources Officer, Director of Information Security and Director of Environmental Health and Safety. The SPMC is tasked with ensuring risks are adequately addressed within our governance framework.
We maintain a dedicated team of cybersecurity professionals. The Director of Information Security, the Information Security team, the SPMC, the Vice President of Information Technology, and the Information Technology leadership team are principally responsible for assessing and managing cybersecurity risks for our company. These individuals possess relevant expertise in cybersecurity risk management and are equipped to address the evolving nature of cyber threats. Our Director of Information Security has over 20 years of cybersecurity experience, holds several professional certifications and is an adjunct faculty member teaching courses on information security management and governance. Our cybersecurity professionals have a proven track record of executing strategic security objectives across various sectors, including utility, government, healthcare, and consulting. They bring with them experience in designing, implementing, and managing information security programs focused on quality, performance, and compliance.
Our information security team and our third-party security service providers actively monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents, ensuring timely response and resolution. Processes are in place to inform relevant management positions and committees about emerging threats and incident response
activities. The Director of Information Security provides regular updates on cybersecurity risks and incidents to the Board of Directors, the SPMC, and IT leadership.
Item 2. Properties
Our Silicon Valley office facilities consist of a 153,738 square foot building, with office and laboratory space located on a 6.3-acre tract of land we own in Menlo Park, California and an adjacent 27,000 square feet of warehouse storage space on a 1.1-acre tract of land that we also own.
Our Test and Engineering Center (TEC) occupies 147 acres in Phoenix, Arizona. We lease this land from the State of Arizona under a lease agreement that expires in January 2043 and have an option to renew for one 15-year period. We constructed a 21,613 square foot indoor test facility as well as a 44,053 square foot engineering and test preparation building at the TEC.
Our office facilities in Natick, Massachusetts, consist of a 60,480 square foot building, with office and laboratory space located on a 2.9 acre tract of land that we own and an adjacent building that consists of 9,100 square feet of office space located on a 0.81 acre tract of land that we also own.
In addition, we lease office and laboratory space in 21 other locations in 12 states and the District of Columbia, as well as in China, Hong Kong, Switzerland and the United Kingdom. Leases for these offices and laboratory facilities have terms generally ranging between one and 10 years.
Item 3. Legal Proceedings
Exponent is not engaged in any material legal proceedings.
Item 4. Mine Safety Disclosures
Not applicable.
