Headlines. FY24 revenue is £258m, -21% cc yoy, with billable headcount at 2,578, below the end-Oct 2,906 and down on 3,892 in 2023. During FY24, FDM reduced internal headcount by 30% with training completions at 877 vs 1,338 in 2023. FDM expects FY24 profits to be in line with its revised Nov 2024 guidance. Cash is strong with 120% conversion and £41m year-end cash. Market trends. In November, the group spoke of increased activity and order flow, but it was too early to call a trend. December saw volumes fall back, but FY25 has started encouragingly, especially in NA and Australia, and we understand deal volumes are ahead of where they were in Oct/Nov. However, the group is taking a cautious stance and not factoring in a sustained recovery, seeing only modest net billable headcount growth this year against a base case of challenging conditions to continue. Client interest levels. We note that the depth and breadth of client conversations and activity (but not material orders) are at encouraging levels, with continued interest in FDM’s proposition across geographies which gives confidence for when budget pressure start to lessen at some stage. Forecasts. We reduce FY25E headcount to 2,848 from 3,052 which assumes a 270 billable head increase vs FY24. We expect a similar focus on costs as in FY24, but a level does need to be preserved to ensure that the strength of the business is retained. FY25E revenue £214.6m (£220.5m) -3%, PBT £25.5m (£30.6m) -17%, EPS 17p (20.4p) -17%, and DPS 16p (19.5p) -18%. Moving past the trough. While the downgrade is not ideal, it reflects the backdrop, and our sense is that we are moving through trough earnings. For us, the crucial point is whether FDM can move profits materially back up when the cycle turns, and here we have high conviction, supporting our Buy.