RGP

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management noted relative stability in their markets while reporting that fourth quarter consolidated revenue declined 18.3% year-over-year on a same-day constant currency basis, driven by an 18% decline in On-Demand Talent and a 23% decline in Consulting. A recent 'voice of the customer' survey of 500 decision-makers revealed that 95% of clients intend to maintain or increase engagement, validating RGP's competitive position in speed and flexibility. The company is pivoting from broad cost-cutting to targeted reinvestment, having completed initial hiring for sales and consulting leadership to drive fiscal 2027 growth. Operational weakness in Europe is characterized as client-specific and non-systemic, rather than a reflection of broader macroeconomic or geopolitical headwinds. Strategic priorities are now focused on four pillars: refocusing on-demand talent, scaling consulting services, integrating AI internally and externally, and streamlining the cost structure. The integration of AI is viewed as a growth catalyst rather than a threat, with management focusing on combining deep functional expertise with AI governance to solve high-value client challenges. Q1 fiscal 2027 revenue guidance of $97 million to $102 million assumes typical summer seasonality and the impact of the Sitrick divestiture. Management expects the ramp-up of new sales professionals to take 6 to 9 months to reach monthly targets and over a year to achieve full annual quotas. Revenue growth is anticipated to accelerate in the latter half of fiscal 2027 as recent investments in go-to-market leadership and consulting capacity mature. Future cost-reduction initiatives will shift toward process and technology modifications, including leveraging AI for internal efficiency, which may require longer implementation periods. The company targets a normalized EBITDA margin of 6% to 8% once annual revenue exceeds the $500 million threshold. The divestiture of Sitrick and a transition in the COO role contributed to $14.1 million in non-run rate SG&A expenses during the quarter. A new revolving credit facility was established to provide increased flexibility for shareholder returns, including dividends and opportunistic share repurchases. Lower consultant utilization, currently in the low 60% range for salaried staff, remains a primary headwind to gross margin expansion. Average bill rates in Europe and Asia Pacific were impacted by geographic mix, specifically a higher proportion of revenue from lower-rate Asia-Pacific markets. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated that the initially planned investment levels for fiscal 2027 are largely complete. The focus has shifted from capital deployment to execution, with performance improvements expected to materialize more significantly in the second half of the fiscal year. CEO Roger Carlile explicitly rejected the notion that AI is a 'death knell' for consulting, arguing instead that technological confusion typically creates a 'boom' for expert advisory services. The company is infusing AI into client data preparation and governance services while using it internally to improve productivity. Current utilization is in the low 60s, significantly below the target range of 75% to 80% for delivery consultants. Returning to target utilization levels is estimated to provide a gross margin uplift of approximately 200-plus basis points.

This article first appeared on GuruFocus. Consolidated Revenue: $106.1 million, an 18.3% decline on a same-day constant currency basis compared to the prior year quarter. Gross Margin: 37.6%, down from 40.2% in the prior year. Adjusted EBITDA: Negative $0.6 million for the quarter. On-Demand Talent Revenue: $40.4 million, an 18% decline from the prior year quarter. Consulting Revenue: $36.6 million, down 23% year over year. Europe and Asia Pacific Revenue: $17.1 million, down 14% year over year. Outsource Services Revenue: $10.3 million, down 1.6% year over year. Cash and Cash Equivalents: $82.4 million with no outstanding debt. Quarterly Dividend Payments: $2.3 million, representing a 6% annualized yield. Average Bill Rate: $120 on a constant currency basis, compared to $125 a year ago. Run Rate SG&A Expense: $40.5 million, a 12% improvement compared to $46.2 million in the prior year quarter. Warning! GuruFocus has detected 8 Warning Signs with RGP. Is RGP fairly valued? Test your thesis with our free DCF calculator. Release Date: July 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Resources Connection Inc (NASDAQ:RGP) reported that their fourth quarter results were aligned with the outlook provided for revenue, gross margin, and SG&A expenses. The company completed a voice of the customer survey, revealing a strong net promoter score with 95% of customers indicating their intent to increase or maintain their level of engagement with RGP. RGP is focusing on strategic priorities such as refocusing their on-demand talent segment, scaling their consulting segment, and pursuing AI opportunities, which are expected to drive future revenue growth. The Asia-Pacific region delivered solid revenue performance, including year-over-year and sequential growth in China and the Philippines. RGP ended the quarter with a strong balance sheet, holding $82.4 million in cash and cash equivalents with no outstanding debt. Consolidated revenue for the quarter was $106.1 million, representing an 18.3% decline on a same-day constant currency basis compared to the prior year quarter. Revenue in Europe was softer, driven by weakness in the region, which impacted overall performance. Gross margin for the fourth quarter was 37.6%, down from 40.2% in the prior year, primarily due to less favorable leverage of indirect costs and lower consultant utilization. Adjusted EBITDA for the quarter was negative $0.6 million, indicating financial challenges. The company is experiencing longer sales cycles, particularly in their consulting segment, which has affected revenue conversion timelines. Q: Roger, regarding the four strategic priorities you've mentioned, how far along are you in terms of completion for each? A: Roger Carlile, CEO: We are mostly complete with the investments for FY27. Now, we need to see these investments pay off, which we expect in the latter half of the year. While we may see some opportunistic opportunities to invest further, the primary preparations for FY27 are largely done. Q: What gives you confidence that the demand environment has stabilized and might improve in FY27? A: Roger Carlile, CEO: Market conditions appear stable, and our recent customer survey indicates strong client appreciation and intent to maintain or increase engagement. This stability, combined with our strategic investments, suggests we might be nearing the end of the market-driven downturn. Q: Can you provide more details on the additional cost reductions planned for FY27? A: Jennifer Ryu, CFO: We plan to continue aligning resources with demand and reducing occupancy costs. While the cost reductions will be less significant than in the past fiscal year, we will focus on improving efficiency through system enhancements and AI integration. We expect non-run rate charges to normalize around $2 million to $3 million per quarter. Q: What are the covenants on your new credit facility? A: Jennifer Ryu, CFO: The new facility provides more flexibility, especially for shareholder returns. It includes typical covenants on investments and loans, with two main financial covenants: a fixed charge coverage ratio and a minimum liquidity ratio. The fixed charge coverage ratio is a springing covenant, which we do not expect to come into play. Q: How is the progress with the new sales leadership and the integration of AI into your operations? A: Roger Carlile, CEO: The new sales leadership is progressing well, with consistent processes across the US. AI is being integrated into both internal operations and client services, with a focus on improving efficiency and addressing client challenges. We believe AI will be a significant opportunity for growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

DALLAS, July 22, 2026--(BUSINESS WIRE)--Resources Connection, Inc. (Nasdaq: RGP) (the "Company"), a professional services firm, today announced its financial results for its fourth quarter and full fiscal year ended May 30, 2026. Fourth Quarter Fiscal 2026 Highlights Compared to Prior Year Quarter: Revenue of $106.1 million compared to $139.3 million Gross margin of 37.6% compared to 40.2% Selling, General and Administrative ("SG&A") expenses of $54.6 million compared to $50.6 million Adjusted SG&A expenses, a non-GAAP measure, improved to $40.5 million compared to $46.2 million Net loss improved to $16.1 million (net loss margin of 15.1%) up from net loss of $73.3 million (net loss margin of 52.6%) GAAP diluted loss per common share improved to $0.47, up from $2.23 Adjusted EBITDA, a non-GAAP measure, of $(0.6) million (Adjusted EBITDA margin of (0.6%) compared to $9.8 million (Adjusted EBITDA margin of 7.1%) Full Fiscal Year 2026 Highlights Compared to Prior Year: Revenue of $452.0 million compared to $551.3 million Gross margin of 37.5% compared to 37.6% SG&A expenses of $202.8 million compared to $202.0 million Adjusted SG&A expenses, a non-GAAP measure, of $164.1 million compared to $184.1 million, an improvement of 10.8% Net loss improved to $40.6 million (net loss margin of 9.0%) compared to net loss of $191.8 million (net loss margin of 34.8%) GAAP diluted loss per common share improved to $1.21 compared to $5.80 Adjusted EBITDA of $5.0 million (Adjusted EBITDA margin of 1.1%) compared to $23.5 million (Adjusted EBITDA margin of 4.3%) Management Commentary "Consistent with the prior quarter, fourth quarter results were aligned with our outlook for revenue, gross margin, and run rate SG&A expense," said Roger Carlile, Chief Executive Officer. "Market conditions also remain broadly consistent to the third quarter with our North America and Asia markets performing as expected while Europe exhibited some weakness. As a result, our priorities continue to be refocusing our On-Demand Talent segment offerings, scaling our Consulting segment, pursuing AI as both a client-service and an internal opportunity, streamlining how we operate and aligning our cost structure with our revenue levels. In the fourth quarter, we made additional focused investments to support these priorities, and we continue to expect these and prior quarter investments to drive revenue growth as they mature through an anticipated ramp-up period." Fourth Quarter Fiscal 2026 Results Revenue in the fourth quarter of fiscal 2026 was $106.1 million compared to $139.3 million in the fourth quarter of fiscal 2025. On a same-day constant currency basis, revenue was down 18.3% compared to the prior year quarter. The Company continues to experience softer demand in traditional operational accounting skills in our On-Demand Talent segment and longer sales cycle for projects in our Consulting segment. Billable hours decreased 20.9%, partially attributable to one less week in the fourth quarter of fiscal 2026 compared to the prior year quarter as well as the sale of Sitrick, LLC ("Sitrick"), the Company's crisis communication business, on May 2, 2026. The average bill rate declined by 3.6% (3.9% on a constant currency basis) due to a shift in revenue mix towards regions with lower average bill rates. Average bill rate in the U.S continued to show steady improvement over the prior year. Gross margin in the fourth quarter of fiscal 2026 was 37.6% compared to 40.2% in the fourth quarter of fiscal 2025. While pay bill ratio improved by 31 basis points, lower consultant utilization and negative operating leverage continued to impact gross margin. GAAP SG&A expenses for the fourth quarter of fiscal 2026 were $54.6 million, or 51.5% of revenue, compared to $50.6 million, or 36.3% of revenue for the fourth quarter of fiscal 2025. The $4.0 million increase in SG&A expenses year-over-year was primarily attributed to $4.6 million of severance and stock-based compensation expense incurred in connection with the Company's sale of Sitrick, $3.2 million of severance and stock based compensation costs associated with the separation of the Company's former COO, and a $2.4 million loss on the sale of Sitrick. These increases were offset by a $2.4 million decrease in employee compensation and benefits costs following the reductions in force in fiscal 2025 and fiscal 2026 in connection with the Company's restructuring and transformation initiatives, a $1.5 million decrease in costs associated with the internal use of consultants, a $0.7 million decrease in restructuring costs related to our restructuring activities in the fourth quarter of fiscal 2025, a $0.6 million decrease in occupancy expenses, a $0.6 million decrease in professional services fees, and a $0.5 million decrease related to other general and administrative costs due to our efforts to achieve an improved cost structure. Income tax expense for the fourth quarter of fiscal 2026 was $0.6 million, or an effective tax rate of 3.7%, compared to an income tax expense of $8.0 million, or an effective tax rate of 12.2% for the fourth quarter of fiscal 2025. The income tax expense for the fourth quarter of fiscal 2026 was primarily attributable to income tax expense from profitable foreign jurisdictions, while losses in certain domestic and foreign jurisdictions did not result in a tax benefit due to the existence of valuation allowances. The income tax expense for the fourth quarter of fiscal 2025 was primarily attributed to the permanent disallowance of a portion of the goodwill impairment for tax purposes and the establishment of a valuation allowance on the Company's domestic net deferred tax assets. Net loss for the fourth quarter of fiscal 2026 was $16.1 million (net loss margin of 15.1%), compared to net loss of $73.3 million (net loss margin of 52.6%) in the prior year quarter. Both fiscal quarters contained a number of non-run-rate items, including restructuring expenses, executive separation costs and costs in connection with the sale of Sitrick in the fourth quarter of fiscal 2026, a goodwill impairment charge, and technology transformation costs in the fourth quarter of fiscal 2025. Excluding these items, Adjusted EBITDA was $(0.6) million (margin of (0.6%) in the fourth quarter of fiscal 2026 compared to $9.8 million (margin of 7.1%) in the prior year quarter. Full Fiscal Year 2026 Results Full year revenue was $452.0 million in fiscal 2026 compared to $551.3 million a year ago, or a decrease of 18.0% (or 17.4% on a same-day constant currency basis). Billable hours decreased 17.5% and the average bill rate decreased 0.9% (1.5% on a constant currency basis) during fiscal 2026 compared to fiscal 2025. The decline in billable hours was primarily attributable to softer demand for traditional operational accounting skills within our On-Demand Talent segment as clients continue to adopt AI and automation as well as longer sales cycle for more complex projects within our Consulting segment. While the enterprise average bill rate declined year over year driven by a shift in revenue mix towards regions with lower average bill rates, average bill rate in the U.S. improved by 2.4%, reflecting our continued focus on value based pricing and increased pricing power within our consulting segment as we expand our service capabilities to deliver more impactful solutions. Gross margin for fiscal 2026 remained relatively flat at 37.5% for fiscal 2026 compared to 37.6% in the prior year. Despite a 70 basis points improvement in pay bill ratio, the benefit was offset by negative operating leverage associated with lower revenue. SG&A expense was $202.8 million in fiscal 2026 compared to $202.0 million in fiscal 2025. The $0.8 million increase in SG&A expenses year-over-year was primarily attributed to $12.2 million of costs associated with the separation of the Company's former CEO and former COO, and $4.6 million of severance and stock-based compensation expense incurred in connection with the sale of Sitrick, a $3.4 million gain on the sale of the Irvine office building during fiscal 2025 with no comparable activity occurring during fiscal 2026, a $3.4 million increase in restructuring charges primarily related to an additional RIF in fiscal 2026, and a $2.4 million loss on the sale of Sitrick. These increases were largely offset by a $9.5 million decrease in employee compensation and benefits costs following the reduction in force in fiscal 2025 and most recently in connection with the October RIF and the January RIF, a $5.5 million decrease in technology transformation costs primarily associated with the completion of our North America technology implementation during fiscal 2025, a $3.3 million decrease in costs associated with the internal use of consultants that supported various internal business initiatives, a $1.8 million decrease in travel related expenses, a $1.6 million decrease in occupancy expenses, a $1.0 million decrease in acquisition costs a $0.9 million decrease in variable employee compensation as a result of financial performance, a $0.9 million decrease in professional services fees, and a $0.8 million decrease related to other general and administrative costs due to our efforts to achieve an improved cost structure. The Company recorded an income tax expense of $2.5 million (effective tax rate of 6.4%) for the year ended May 30, 2026 compared to income tax benefit of $4.3 million (effective tax rate of 2.2%) for the year ended May 31, 2025. The income tax expense in fiscal 2026 was primarily attributable to income tax expense from profitable foreign jurisdictions, while losses in certain domestic and foreign jurisdictions did not result in a tax benefit due to the existence of valuation allowances. The income tax benefit in fiscal 2025 was primarily attributed to the Company’s consolidated pretax loss, reduced by the permanent disallowance of a portion of the goodwill impairment for tax purposes and the establishment of a valuation allowance on the Company's domestic and United Kingdom net deferred tax assets. Fourth Quarter Fiscal 2026 Segment Revenue Results On-Demand Talent – Revenue in the On-Demand Talent segment was $40.4 million in the fourth quarter of fiscal 2026 compared to $53.0 million in the fourth quarter of fiscal 2025, reflecting a decrease of 23.7% (or 18.0% on a same day constant currency basis). Billable hours decreased 24.6%, partially offset by an increase in the average bill rate of 1.3% (or 1.0% on a constant currency basis). The Company continued to experience reduced demand in traditional finance roles as clients increasingly adopt AI and automation although the market for on-demand resourcing has shown signs of stabilization in the fourth quarter. Additionally, revenue for the fourth quarter of fiscal 2026 reflected 13 weeks of billable activity, compared to 14 weeks in the fourth quarter of fiscal 2025. The Company remains focused on evolving the skillset of on-demand talent base to align with changing market demand. Consulting – Revenue in the Consulting segment was $36.6 million in the fourth quarter of fiscal 2026 compared to $51.0 million in the fourth quarter of fiscal 2025, reflecting a decrease of 28.1% (or 23.0% on a same day constant currency basis). Billable hours decreased 30.2%, partially offset by a 2.6% (or 2.0% on a constant currency basis) improvement in average bill rate. While recent demand for consulting in areas such as finance and digital transformation has been steady, larger and more complex consulting opportunities have taken longer to convert into revenue. Additionally, revenue for the fourth quarter of fiscal 2026 reflected 13 weeks of billable activity, compared to 14 weeks in the fourth quarter of fiscal 2025. The improvement in average bill rate reflects higher value consulting project and is also attributable to continued focus on pricing discipline. Europe & Asia Pacific – Revenue in the Europe & Asia Pacific segment was $17.1 million in the fourth quarter of fiscal 2026 compared to $21.3 million in the fourth quarter of fiscal 2025, reflecting a 19.9% decrease (or 14.0% on a same day constant currency basis). The decline was primarily due to an 11.5% decrease in billable hours, partially affected by one less fiscal week in the fourth quarter of fiscal 2026 compared to the fourth quarter of fiscal 2025. The decrease in billable hours was also impacted by delays in project starts as clients continued to assess and align their internal priorities and processes. The average bill rate decreased 10.0% primarily reflecting a geographical revenue shift toward Asia Pacific, which tends to have a lower bill rate compared to Europe. Outsourced Services – Revenue in the Outsourced Services segment was $10.3 million in the fourth quarter of fiscal 2026 compared to $11.3 million in the fourth quarter of fiscal 2025. On a same-day constant currency basis, revenue decreased 1.6% in the fourth quarter of fiscal 2026. Billable hours decreased 4.3% and the average bill rate declined 1.0% due to revenue mix in the quarter. All Other – Revenue in the All Other segment was $1.6 million in the fourth quarter of fiscal 2026 compared to $2.8 million in the fourth quarter of fiscal 2025. The decrease is related to the sale of Sitrick on May 2, 2026. Full Fiscal Year Segment Revenue 2026 Results On-Demand Talent – Revenue in the On-Demand Talent segment declined by $37.2 million or 18.1% (17.3% on a constant currency basis), to $168.8 million during the year ended May 30, 2026 compared to $206.0 million during the year ended May 31, 2025 due primarily to a decrease of 19.8% in billable hours partially offset by a 2.1% (or 1.9% on a constant currency basis) increase in average bill rate. The Company experienced softer demand in traditional accounting and finance roles as clients increasingly adopt AI and automation, although the market for on-demand resourcing showed signs of stabilization in the second half of the fiscal year. The Company remains focused on evolving the on-demand talent base and skillset to align with changing market demand. The improvement in average bill rate was the result of the Company’s continued focus on pricing discipline. Consulting – Revenue in the Consulting segment declined by $59.4 million or 27.1% (26.5% on a constant currency basis), to $159.8 million during the year ended May 30, 2026 compared to $219.2 million during the year ended May 31, 2025. The decline was primarily due to a 31.0% decrease in billable hours, partially offset by a 5.7% (or 5.4% on a constant currency basis) increase in the average bill rate. The decline in billable hours reflected slower sale execution during the fiscal year coupled with longer sales cycles for consulting projects, while average bill rates continue to increase due to pricing discipline and higher value consulting projects. Europe & Asia Pacific – Revenue in the Europe & Asia Pacific segment declined by $2.5 million or 3.2% (3.7% on a constant currency basis), to $75.1 million during the year ended May 30, 2026 compared to $77.6 million during the year ended May 31, 2025. The decline was primarily due to a 3.8% decrease in billable hours, partially offset by a 0.5% increase in the average bill rate. Adjusting for currency impact, average bill rate decreased by 1.8% year over year, reflecting pricing pressure in Europe. Outsourced Services – Revenue in the Outsourced Services segment decreased by $0.4 million or 1.0% to $39.2 million during the year ended May 30, 2026 compared to $39.6 million during the year ended May 31, 2025. The decrease is primarily due to a 2.3% decrease in the average bill rate, partially offset by a 0.2% increase in billable hours. All Other – Revenue in the All Other segment increased by $0.1 million or 1.7% to $9.1 million during the year ended May 30, 2026 compared to $8.9 million during the year ended May 31, 2025. Cash Position and Capital Allocation As of May 30, 2026, cash and cash equivalents totaled $82.4 million. As of May 30, 2026, the Company was not in compliance with all financial covenants under its credit facility. The Company terminated the current credit facility on July 13, 2026. On July 15, 2026, the Company entered into a new credit facility, which provides for secured revolving loans, available in an amount up to the lesser of $30.0 million and a borrowing base formula tied to eligible receivables and eligible unbilled receivables and subject to established reserves. The Company generated $1.4 million in cash from operations during the year ended May 30, 2026 compared to cash provided by operations of $18.9 million during the year ended May 31, 2025, reflecting cash payments associated with a number of cost reduction actions in fiscal 2026. The Company paid a quarterly dividend of $0.07 per share on June 19, 2026, or $2.4 million in the aggregate, to stockholders of record at the close of business on May 21, 2026. The Company's Board of Directors had previously approved stock repurchase programs that authorized the Company to purchase shares of the Company's common stock up to an aggregate dollar limit (the "Stock Repurchase Programs"). No shares of the Company's common stock were purchased under the Stock Repurchase Programs during the year ended May 30, 2026. During the year ended May 31, 2025, the Company purchased 1,382,820 shares of its common stock on the open market at an average price of $9.40 per share, for an aggregate total purchase price of approximately $13.0 million. As of May 30, 2026, approximately $79.2 million remained available for future repurchases of the Company’s common stock under the Stock Repurchase Programs. Conference Call Information RGP will hold a conference call for analysts and investors at 5:00 p.m., ET, today, July 22, 2026. A live webcast of the call will be available on the Events section of the Company’s Investor Relations website. To access the call by phone, please go to this link (registration link), and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for 30 days by visiting the Events section of the Company’s Investor Relations website. About RGP RGP (Nasdaq: RGP) has been redefining professional services for over 30 years by closing the gap between advice and execution. RGP combines the flexibility of on-demand talent, the rigor of consulting, and the accountability of managed services for faster impact, smarter investment, and lower risk. The firm partners with CFOs and other C-suite leaders across finance, digital transformation, data, and cloud—connecting advisory to execution at global scale. Based in Dallas, Texas, with offices worldwide, RGP annually engages with nearly 1,500 clients around the world from approximately 35 physical practice offices and multiple virtual offices. As of May 2026, RGP is proud to have served 90% percent of the Fortune 100 and has been recognized by U.S. News & World Report (2025–2026 Best Companies to Work For) and Forbes (America’s Best Midsize Employers 2026, America's Best Management Consulting Firms 2025, World’s Best Management Consulting Firms 2025). Resources Connection, Inc. (RGP) is listed on the Nasdaq Global Select Market, the exchange’s highest tier by listing standards. To learn more about RGP, visit: http://www.rgp.com. Forward-Looking Statements Certain statements in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to expectations concerning matters that are not historical facts. Such forward-looking statements may be identified by words such as "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "forecast," "future," "intends," "may," "plans," "potential," "predicts," "remain," "should," "strategy" or "will" or the negative of these terms or other comparable terminology. In this press release, such statements include statements regarding market conditions, strategic and operational plans and priorities for our business offerings, our use of AI and alignment of our cost structure, and expectations about our ability to improve future financial results. Such statements and all phases of the Company’s operations are subject to known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements and those of our industry to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties include, but are not limited to, the following: risks related to an economic downturn or deterioration of general macroeconomic conditions, the highly competitive nature of the market for professional services, risks related to the loss of a significant number of our consultants, or an inability to attract and retain new consultants, the possible impact on our business from the loss of the services of one or more key members of our senior management or key sales professionals, risks related to potential significant increases in wages or payroll-related costs, our ability to secure new projects from clients, our ability to achieve or maintain a suitable pay/bill ratio, our ability to compete effectively in the competitive bidding process, risks related to unfavorable provisions in our contracts which may permit our clients to, among other things, terminate the contracts partially or completely at any time prior to completion, our ability to realize the level of benefit that we expect from our restructuring initiatives, risks that our digital expansion and technology transformation efforts may not be successful, our ability to use artificial intelligence and machine learning in our business, our ability to build an efficient support structure as our business continues to grow and transform, our ability to grow our business, manage our growth or sustain our current business, our ability to serve clients internationally, additional operational challenges from our international activities possible disruption of our business from our past and future acquisitions, our potential inability to adequately protect our intellectual property rights, risks that our computer hardware and software and telecommunications systems are damaged, breached or interrupted, risks related to the failure to comply with data privacy laws and regulations and the adverse effect it may have on our reputation, results of operations or financial condition, our ability to comply with governmental, regulatory and legal requirements and company policies, the possible legal liability for damages resulting from the performance of projects by our consultants or for our clients’ mistreatment of our personnel, risks arising from changes in applicable tax laws or adverse results in tax audits or interpretations, the possible adverse effect on our business model from the reclassification of our independent contractors by foreign tax and regulatory authorities, the possible difficulty for a third party to acquire us and resulting depression of our stock price, the operating and financial restrictions from our credit facility, risks related to the variable rate of interest in our credit facility, the possible impact of activist shareholders, the possibility that we are unable to or elect not to pay our quarterly dividend payment, our ability to establish and maintain effective internal control over financial reporting, and other factors and uncertainties as are identified in our most recent Annual Report on Form 10-K for the year ended May 30, 2026, which will be filed on or around July 22, 2026 and our other public filings made with the Securities and Exchange Commission (File No. 0-32113). Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business or operating results. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not intend, and undertakes no obligation, to update the forward-looking statements in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless required by law to do so. Non-GAAP Financial Measures The Company uses certain non-GAAP financial measures to assess our financial and operating performance that are not defined by or calculated in accordance with accounting principles generally accepted in the U.S. ("GAAP") to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the Consolidated Statements of Operations; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable GAAP measure so calculated and presented. The following non-GAAP measures are presented in this press release: Same-day constant currency revenue is adjusted for the following items: EBITDA is calculated as net income (loss) before amortization expense, depreciation expense, interest and income taxes. Adjusted EBITDA is calculated as EBITDA excluding stock-based compensation expense, amortized Enterprise Resource Planning ("ERP") system costs, technology transformation costs, goodwill impairment, acquisition costs, gain on sale of assets, restructuring costs, executive transition costs, Sitrick transition costs, and other items management believes are not representative of the Company's core operations. We also present herein Adjusted EBITDA at the segment level as a measure used to assess the performance of our segments. Segment Adjusted EBITDA excludes certain shared corporate administrative costs that are not practical to allocate. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenue. Adjusted diluted earnings (loss) per common share is calculated as diluted earnings (loss) per common share, excluding the per share impact of stock-based compensation expense, technology transformation costs, acquisition costs, goodwill impairment, gain on sale of assets, restructuring costs, CEO transition costs, and adjusted for the related tax effects of these adjustments. Adjusted SG&A expense is calculated as SG&A expenses excluding stock-based compensation, amortized ERP system costs, technology transformation costs, acquisition costs, gain on sale of assets, restructuring costs, CEO transition costs, and other items management believes are not representative of the Company's core operations. We believe the above-mentioned non-GAAP financial measures, which are used by management to assess the core performance of our Company, provide useful information and additional clarity of our operating results to our investors in their own evaluation of the core performance of our Company and facilitate a comparison of such performance from period to period. These are not measurements of financial performance or liquidity under GAAP and should not be considered in isolation or construed as substitutes for revenue, net income or other cash flow data prepared in accordance with GAAP for purposes of analyzing our revenue, profitability or liquidity. These measures should be considered in addition to, and not as a substitute for, revenue, net income (loss), earnings (loss) per share, cash flows or other measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies, as other companies may calculate such financial results differently. (1) The percentage of revenue may not foot due to rounding. (2) Unallocated items are generally comprised of unallocated corporate administrative costs, including management and board compensation, corporate support function costs and other general corporate costs that are not allocated to segments. (3) Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to a newly implemented ERP system, which was recorded within SG&A expenses on the Consolidated Statements of Operations. (4) Technology transformation costs represent costs included in net loss related to the Company’s initiative to upgrade its technology platform globally, including a cloud-based ERP system and talent acquisition and management systems. Such costs primarily include hosting and certain other software licensing costs, third-party consulting fees and costs associated with dedicated internal resources that are not capitalized. (5) Acquisition costs primarily represent costs included in net loss related to the Company’s business acquisition of Reference Point. These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms. (6) Goodwill impairment charges recognized during the year ended May 31, 2025 were related to the On-Demand Talent, Consulting and Europe & Asia Pacific segments. (7) Gain on sale of assets was related to the Company’s sale of its Irvine office building, which was completed on August 15, 2024. (8) Restructuring costs during the three and twelve months ended May 30, 2026 include employee termination costs incurred in the reductions in force, impairment of right-of-use asset, and non-recurring third-party consulting costs associated with the Company's transformation initiative to redesign and streamline our operating model to achieve a reduced cost structure during fiscal 2026. Restructuring costs during the three and twelve months ended May 31, 2025 related to the Company's global cost reduction plan, including a reduction in force authorized in each of December 2024 and May 2025. (9) Executive transition costs for the three months ended May 30, 2026 represent non-recurring costs incurred in connection with the separation of the Company's former COO. These costs include $1.7 million of cash severance and $1.5 million of non-cash stock compensation expense reflecting the acceleration of equity awards pursuant to ASC 718. Costs for the twelve months ended May 30, 2026 represent non-recurring costs incurred in connection with the separation of both the Company's former CEO and former COO. These costs include $7.6 million of cash severance and $4.6 million of non-cash stock compensation expense reflecting the acceleration of equity awards pursuant to ASC 718. (10) Sitrick transaction related costs represent $4.1 million of severance expense incurred in connection with the sale of Sitrick, $2.4 million of loss on the sale of Sitrick, consisting of a $1.5 million non-cash impairment on right-of-use assets and a $0.9 million loss, and $0.6 million of non-cash stock compensation expense reflecting the acceleration of equity awards. (11) The tax effect of each adjustment is determined based on the tax laws and valuation allowance status of the jurisdiction to which the adjustment relates. An adjusted effective income tax rate has been determined for each period presented by applying the statutory income tax rate, net of adjustments for valuation allowances, where applicable, which was used to compute Adjusted Net Income for the periods presented. For the three and twelve months ended May 30, 2026, due to the existence of tax valuation allowances, the tax impact of the pre-tax adjustments is immaterial. For the three and twelve months ended May 31, 2025, the tax impact of the pre-tax adjustments was primarily due to goodwill impairment charges, with no valuation allowance to offset the tax effects of the adjustment. (12) Adjusted diluted (loss) earnings per common share is based on weighted average diluted shares outstanding of 34,555,848 and 32,875,061 for the three months ended May 30, 2026 and May 31, 2025, respectively and 33,851,701 and 33,063,317 for the twelve months ended May 30, 2026 and May 31, 2025, respectively. View source version on businesswire.com: https://www.businesswire.com/news/home/20260722526283/en/ Contacts Analyst Contact:Jennifer RyuChief Financial Officer(US+) [email protected] Media Contact: Pat BurekFinancial Profiles(US+) [email protected]

Interested in Resources Connection, Inc.? Here are five stocks we like better. Q4 revenue fell to $106.1 million, with consolidated revenue down 18.3% year over year on a constant-currency basis. Management said demand was broadly stable, though Europe was weaker and Consulting remained under pressure. Profitability stayed soft as gross margin slipped to 37.6% and adjusted EBITDA was negative $0.6 million. Consulting utilization remained below target, but management said a rebound could add 200-plus basis points to gross margin. RGP is prioritizing growth investments and AI after largely completing planned fiscal 2027 investments, including adding seven sales and senior consulting professionals. The company also highlighted AI as a major strategic focus while guiding Q1 revenue to $97 million-$102 million. Resources Connection (NASDAQ:RGP), which does business as RGP, reported fourth-quarter fiscal 2026 revenue of $106.1 million and said demand conditions appeared broadly stable as the company continues to invest in sales, consulting and artificial intelligence initiatives. President and CEO Roger Carlile said the company’s fourth-quarter results were aligned with the outlook RGP provided for revenue, gross margin and run-rate SG&A expense. Carlile said market conditions were “broadly consistent” with the prior quarter, with North America performing as expected and Asia Pacific in line with both the company’s outlook and prior-quarter results. Europe was weaker, which management attributed to client-specific situations rather than broader economic or geopolitical issues. → Buyback Boom: These 3 Companies Are Betting Billions on Their Own Stocks “I remain optimistic about the future of our business as market conditions appear to be showing some stability,” Carlile said. CFO Jen Ryu said consolidated revenue declined 18.3% on a same-day constant currency basis from the prior-year quarter. Adjusted EBITDA was negative $0.6 million. → 3 Photonics Companies Making Quantum Tech Possible Gross margin was 37.6%, down from 40.2% a year earlier. Ryu said the decrease primarily reflected less favorable leverage of indirect cost of services and lower consultant utilization. Enterprise-wide average bill rate was $120 on a constant currency basis, compared with $125 a year ago, reflecting geographic revenue mix, including a greater contribution from Asia Pacific. Ryu said bill rates in the North America segments remained strong. On-Demand Talent’s average bill rate increased to $145 from $143 a year earlier, while Consulting’s average bill rate increased to $163 from $159. In Europe & Asia Pacific, the average bill rate declined to $57 from $64, largely due to a higher proportion of revenue generated in Asia Pacific relative to Europe. → AI Data Centers Need Power, and These 2 Industrials Are Cashing In RGP reported mixed segment performance, with management noting that the fourth quarter of fiscal 2026 contained one fewer week than the prior-year quarter. Year-over-year revenue comparisons were adjusted for business days and currency impact. On-Demand Talent: Revenue was $40.4 million, down 18% from the prior-year quarter. Segment adjusted EBITDA was $3.1 million, or a 7.6% margin, compared with $6.4 million, or a 12.1% margin, a year earlier. Consulting: Revenue was $36.6 million, down 23% year over year. Segment adjusted EBITDA was $2.3 million, or a 6.3% margin, compared with $8.3 million, or a 16.3% margin, in the prior-year quarter. Europe & Asia Pacific: Revenue was $17.1 million, down 14% year over year. Segment adjusted EBITDA was $0.4 million, or a 2.1% margin, compared with $1.9 million, or a 9% margin, a year earlier. Outsourced Services: Revenue was $10.3 million, down 1.6% year over year. Segment adjusted EBITDA was $2.1 million, or a 20.2% margin, compared with $3.1 million, or a 27.8% margin, in the prior-year quarter. Ryu said Consulting utilization remained under pressure. In response to a question from Baird analyst Mark Marcon, she said utilization for salaried consultants was in the low 60% range, below RGP’s target of above 75% to 80%, and potentially above 80%. She said improving utilization to that range could provide roughly 200-plus basis points of gross margin benefit. Run-rate SG&A expense was $40.5 million in the fourth quarter, down 12% from $46.2 million in the prior-year period. Ryu said the improvement reflected cost actions executed over the past fiscal year. Non-run-rate SG&A expense totaled $14.1 million, including $6.4 million of non-cash expenses and $7.7 million of cash expenditures. Ryu said those costs were primarily related to the divestiture of Sitrick and employee termination costs, including expenses tied to the chief operating officer transition. Carlile said RGP has largely completed its initially planned investments for fiscal 2027, including the addition of seven sales professionals and senior professionals in Consulting. He said the company expects those investments to begin contributing more meaningfully in the second half of fiscal 2027 after a ramp-up period. In response to Noble Capital analyst Joe Gomes, Carlile said most of RGP’s strategic priorities “never stop,” but the company is “for the most part” complete with the investments it planned to support fiscal 2027. Ryu added that additional cost reductions are expected in fiscal 2027, including occupancy-related costs, but said the scale would be less significant than in fiscal 2026. Carlile discussed a recent Voice of the Customer survey of 500 decision-makers and buyers from current and former RGP customers. He said early results indicated RGP was rated stronger than execution- and staffing-focused competitors, though the company still has work to do against larger traditional consultancies. According to Carlile, clients cited trusted partnership, speed of execution, flexibility of delivery model and quality of people and services as top reasons for choosing RGP. He also said RGP had a strong Net Promoter Score, with 95% of customers indicating an intent to increase or maintain their level of engagement with the company. AI remains a major strategic priority for RGP. Carlile said the company sees AI changing how work is done across finance, risk, technology and transformation. He said RGP is working to use AI internally to improve productivity while also developing AI-enabled solutions, talent and partnerships for clients. During the question-and-answer session, Carlile said AI is becoming part of “virtually every conversation” with clients. He said RGP is focused on helping clients prepare data, establish governance, select systems and pursue efficiency opportunities. While acknowledging concerns that AI could disrupt professional services, Carlile said he believes periods of technological change can create demand for consulting support as clients navigate complexity. RGP ended the quarter with $82.4 million in cash and cash equivalents and no outstanding debt. Quarterly dividend payments totaled $2.3 million, which Ryu said represented a 6% annualized yield based on the company’s stock price at the end of the fourth quarter. The company also had $79.2 million remaining under its share repurchase authorization. Ryu said RGP replaced its prior credit facility with a new revolving credit facility intended to provide greater flexibility within its covenant structure and better align with capital needs. In response to a question from Marcon, Ryu said the facility includes typical covenants and two main financial covenants: a fixed charge coverage ratio and a minimum liquidity ratio. She said the fixed charge coverage ratio is a springing covenant and that RGP does not expect it to come into play. For the first quarter of fiscal 2027, RGP expects revenue of $97 million to $102 million, which management said reflects normal summer seasonality and the impact of the Sitrick divestiture. The company expects gross margin of 37% to 38% and run-rate SG&A expense of $41 million to $43 million. Non-run-rate and non-cash expenses are expected to range from $2 million to $3 million, primarily consisting of non-cash stock compensation expense and amortization of capitalized system transformation costs. Ryu said RGP made “meaningful progress” in fiscal 2026 aligning its cost structure, strengthening the organization and investing in key growth priorities. She said the company believes its balance sheet and operational foundation position it to execute more consistently and create long-term shareholder value. Resources Connection, Inc (NASDAQ: RGP) is a publicly traded professional services firm that specializes in providing independent consulting and project-based teams to help organizations manage critical business challenges. Operating under the RGP brand, the company connects highly skilled consultants with clients seeking support in areas such as finance and accounting, legal and risk management, supply chain optimization, technology implementation, and digital transformation. RGP's consultants bring specific industry and functional expertise to engagements, working on a flexible basis that allows clients to scale resources up or down as needed. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Resources Connection Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Image source: The Motley Fool. April 8, 2026 at 5 p.m. ET Chief Executive Officer — Roger Carlile Chief Financial Officer — Jennifer Ryu Roger Carlile: Thank you, and welcome, everyone, to the RGP Fiscal Year 2026 Q3 Earnings Call. I have just completed my fifth month as Chief Executive Officer of RGP, and my optimism regarding the future of our business continues to grow. I have now spent time speaking with many of our employees and shareholders as well as having participated in several client pitches and related discussions. These interactions further convinced me that my first impressions regarding the quality of our employees, the strength of our client relationships and the relevancy of our service offerings to clients' needs were accurate. Furthermore, they indicate our strategy of meeting our clients in terms of what they need us for and in the manner in which they need us, that is 1 or more of our 3 service delivery modes of on-demand talent, consulting and managed services is a competitive differentiator. As I said previously, these elements provide RGP with a competitive right to win in the market, and we expect to do so through focused execution on our strategic priorities. Our third quarter results were aligned with the outlook we previously provided for revenue and gross margin, and our run rate SG&A expenses were better than the outlook. You will hear more about this later in the call from our CFO, Jenn Ryu. For now, let me touch on the progress against our strategic priorities. You will recall our 4 strategic priorities are: one, refocusing our On-demand Talent segment; two, scaling our Consulting segment; three, simplifying how we operate; and four, aligning our cost structure with our current revenue levels. I will touch briefly on each of these areas. In the third quarter, we made focused hires in our On-Demand Talent and Consulting segments, which we expect to drive revenue growth as they ramp up. I invite you to read our recent press releases for more information on these impressive hires. Additionally, we added 2 key leaders to our executive leadership team in the hires of Jessica Block as our Chief Artificial Intelligence Officer; and Prashant Lamba as our new Chief Information Officer. Jessica's professional background sits at the intersection of professional services, operational transformation and emerging technology, and she joins RGP to focus on building real AI capability across the firm. In simple terms, she will help RGP as an organization, RGP's client service professionals and our clients learn, integrate and expand the use of AI in each of their processes and objectives. Prashant joins RGP with a mandate that extends beyond just traditional IT and focuses on simplifying how our employees engage with technology to strengthen operational performance, which will enable them to provide more efficient service to our clients. His leadership will help the firm unlock the full value of advanced technologies, including AI and intelligent automation. Both Jessica and Prashant have extensive experience working in tech-enabled professional service firms and have been leaders in driving AI development and implementation in these organizations. Equally important to me is that I have personally witnessed Jessica and Prashant succeed at other professional service firms, which gives me confidence they will hit the ground running at RGP and accelerate our strategies regarding AI enhancement and operational simplification. Regarding our priority to refocus our On-Demand Talent segment, in the quarter, we added new sales team leadership in our Central U.S. and Northeastern U.S. regions. These new leaders join our already high-performing sales leadership and team members in our Western U.S. region and will help us to enhance our strategic focus on serving existing and new clients as well as offering the new skills and roles they demand. And we anticipate adding additional new leadership in our Southeastern U.S. and Mexico regions. In addition to this new sales leadership, we are also growing our sales team across North America with the addition of new sales team professionals. With respect to refocusing the skills offered through our On-Demand Talent segment, we continue adding on-demand team members in the areas of ERP, finance transformation, data, supply chain and AI. As for scaling our Consulting segment, we have completed the significant organizational and operational aspects of integrating our legacy consulting units into one cohesive Consulting segment led by Scott Rottmann. Those of you who have followed RGP over the past 3 years will know that we previously operated through 3 distinct consulting practices, represented by the legacy RGP project consulting capabilities and the Veracity and Reference Point acquisitions. The result of our integration, which will be completed by the end of our fiscal year in May, is a simplified and unified consulting business with new senior leadership driving our go-to-market service strategy, which is focused on client needs arising at the intersection of the modern CFO and CIO. Regarding our simplification strategy, I've already mentioned 2 key aspects of this effort. The addition of Prashant Lamba, who is focused on simplifying our technology processes to unlock more efficiency in selling work and serving clients and the integration of our Consulting business, which streamlines our go-to-market efforts around a key set of services. In addition to these, we also signed a binding agreement to dispose of the Sitrick crisis communications business to simplify our business portfolio and allow for greater focus on the clients and services where we have a competitive right to win. In addition, we made further progress during the quarter in reducing our cost structure to align more closely with our current revenue levels. And you will hear more about this shortly from Jenn Ryu. It is important to know that to spur further growth, we are reinvesting some of these savings into the areas discussed earlier. We are confident that our continued focus on these 4 priorities will deliver future revenue growth, and our strong balance sheet allows us to make these strategic decisions and the related investments to support this growth in a reasoned and consistent manner. Finally, in terms of the market for our services, the environment has not changed a great deal from our perspective in the prior quarter. Clients are still seeking to activate their key goals in ways that are both cost-effective and value accretive, and RGP fits squarely within that framework. My conversations with our go-to-market professionals lead me to believe that clients were feeling a bit more confident in the quarter regarding their plans. However, it is a little too early to assess whether the Iran conflict will affect clients' attitudes and plans. As for AI, it remains a prominent topic in the market, and we continue to work with our clients to size the opportunity for RGP. The addition of Jessica Block to our leadership team will be of significant benefit in this regard. With that, I will now turn the call over to our CFO, Jenn Ryu. Jennifer Ryu: Thanks, Roger, and good afternoon, everyone. As Roger outlined, the third quarter was about execution against our strategic priorities, delivering results within our outlook while continuing to reshape the business for a return to growth over time. I'll take you through our consolidated performance, cost actions, segment results and then close with our outlook. For the third quarter, our performance was largely in line with expectations. Consolidated revenue and gross margin were both within our outlook ranges, while run rate SG&A was better than expected. Adjusted EBITDA for the quarter was negative $1.4 million. From a demand perspective, our experience during the quarter was, as Roger described, client decision-making remains deliberate, particularly for larger and more complex work, but we saw an uptick in the volume of closed contracts during the quarter. While this has not yet translated into revenue growth, it reinforces our view that demand conditions are steady and our services are relevant in the marketplace. On a segment basis, we saw continued signs of revenue stabilization in on-demand talent with a moderating year-over-year decline. Our focus remains on improving sales execution and investing in leadership and sales capacity in key markets. In Consulting, longer sales cycles continue to weigh on top line results. However, progress on integration and onboarding of new leadership contributed to early improvement in the coordination across the consulting team, cross-selling with our on-demand business and overall client engagement around CFO and CIO-led transformation needs. In the Europe and Asia Pacific segment, our go-to-market activities remain healthy across multinational and local clients. For multinational clients, in particular, demand for our global delivery center offerings continue to resonate as organizations look to outsource and scale critical processes in a cost-effective manner. While revenue for the quarter was impacted by the timing of project starts at a handful of clients, Japan, India and the Netherlands all delivered solid year-over-year revenue growth. Our Outsourced Services segment once again performed consistently with both stable year-over-year results and sequential growth. Across the enterprise, average bill rates increased year-over-year and sequentially in most segments, reflecting our continued focus on disciplined pricing, higher-value consulting projects and more specialized on-demand talent skill sets. Turning to the financial details. Consolidated revenue for the quarter was $107.9 million, representing a 19.6% decline on a same-day constant currency basis compared to the prior year. Gross margin was 35.7%, up 60 basis points compared to 35.1% in the prior year quarter. The improvement was driven by a modest enhancement in pay-to-bill ratio along with favorable consultant benefit costs related to lower health care expenses and fewer holidays during the quarter. Primarily reflecting a revenue mix shift towards the Asia Pacific region, enterprise-wide average bill rate was $120 on a constant currency basis compared to $123 a year ago. On a segment basis, On-Demand Talent's average bill rate grew to $146 from $140 a year ago. Consulting's average bill rate grew to $162 from $159. And in Europe and Asia Pacific, the average bill rate was $57 constant currency compared to $59 last year, reflecting the revenue mix shift to Asia. Now turning to SG&A expenses. As discussed last quarter, we launched a comprehensive organization-wide review with the objective of simplifying the business and better aligning costs with current revenue levels. As part of this effort, we implemented an additional reduction in force in January. Combined with prior actions in the current fiscal year, we expect total annualized cost savings of approximately $12 million to $14 million, with a portion of those savings being selectively reinvested to support growth in fiscal 2027. For the third quarter, enterprise run rate SG&A expenses were $39.4 million, representing a 10% improvement compared to $43.7 million in the prior year quarter. Approximately $2 million of this improvement came from lower management compensation expense, reflecting structural headcount reductions implemented during calendar 2025 and the partial impact of the January 26 action. The remaining improvement came from disciplined spending across travel, occupancy and professional services. Turning now to segment performance. As always, all year-over-year revenue comparisons are adjusted for business days and currency impact and segment adjusted EBITDA excludes certain shared corporate costs. On-Demand Talent revenue was $40.9 million, a decline of 16.3% from the prior year quarter. Despite the lower top line, segment adjusted EBITDA increased to $2.9 million or a 7% margin compared to $2.6 million or a 5.5% margin in the prior year quarter. This improvement was driven by higher gross margin supported by improved average bill rate, lower sales and talent headcount and continued cost discipline. Consulting revenue was $36.9 million, down 32.5% year-over-year, which continued to pressure utilization, therefore, gross margin and segment EBITDA. Segment adjusted EBITDA was $1.7 million or 4.6% margin compared to $5.9 million or 11.2% margin in the prior year quarter. Despite this, we expect the completion of our integration work and leadership onboarding to begin driving more consistent conversion and improved utilization as we move through fiscal 2027. Europe and Asia Pacific revenue was $18.1 million compared to $18.6 million a year ago, a decline of 5.8% on a same-day constant currency basis. Segment adjusted EBITDA was $0.8 million in both periods, representing margins of 4.3% this quarter and 4.5% in the prior year. Outsourced Services revenue was $9.5 million, down 1.7% on a same-day basis from the prior year quarter. Segment adjusted EBITDA was $1.4 million or a 15.1% margin compared to $1.5 million or 15.9% in the prior year quarter. Turning to liquidity. Our balance sheet remains strong. We ended the quarter with $82.8 million of cash and cash equivalents and no outstanding debt. Quarterly dividend payments totaled $2.3 million, representing a 7.4% annualized yield based on our stock price at the end of the third quarter. With our cash position and available borrowing capacity under our credit facility, we will continue to take a balanced approach to capital allocation, investing in the business to support long-term growth while returning capital to shareholders through dividends and potential share buybacks. At quarter end, $79 million remained available under our share repurchase program. I'll now close with our outlook for the fourth quarter. Early fourth quarter weekly revenue trends are tracking below third quarter levels. Based on current visibility, we expect fourth quarter revenue in the range of $104 million to $109 million. We expect gross margin in the fourth quarter to be between 36.5% and 37.5%, reflecting a more normalized number of business days. Total business days in the fourth quarter for the U.S. will be 64 days versus 69 days in the prior year fourth quarter and 61 days in the third quarter. Run rate SG&A expenses for the fourth quarter are expected to be in the range of $39 million to $41 million, reflecting further realization of cost savings from the January actions, largely offset by reinvestments. These reinvestments remain targeted, primarily focused on key leadership roles, revenue-producing capacity and client-facing capabilities. Importantly, they do not change our medium-term goal of improving operating leverage as revenue recovers. Non-run rate and noncash expenses are expected to be in the range of $13 million to $15 million and consist primarily of charges associated with the Sitrick disposition, which is expected to be closed before fiscal year-end, separation costs related to the COO departure and noncash stock compensation expense. In closing, as Roger discussed, we made solid progress against our key priorities this quarter. We strengthened leadership, meaningfully reduced our cost structure, took steps to simplify our business portfolio and began reinvesting selectively to support future growth. While we are not yet seeing a broad-based acceleration in revenue, we believe the actions we've taken have improved our operating foundation and position us to execute more consistently and deliver increased value to our clients and shareholders over time. With that, we will conclude our prepared remarks and open the call for questions. Operator: [Operator Instructions] Our first question comes from Andrew Steinerman with JPMorgan. Alexander EM Hess: This is Alex Hess on for Andrew. Just to confirm, there was no M&A revenue in the quarter, correct? And Jenn, can you elaborate on what the guide calls for on a constant currency same-day organic basis for the May quarter? Jennifer Ryu: Yes. Alex, yes. There's no M&A revenue in the quarter. So Q4's got at the top of the range is about a 16% year-over-year decline on an organic constant currency same-day basis. Alexander EM Hess: Got it. And then just thinking big picture, last quarter, you guys spoke to trying to tease out the impact that automation and AI might be having on some work streams for you guys. Obviously, there's been a lot of press releases and a lot of senior leadership turnover and trying to just understand when it comes to visibility that you have into the long run return to growth of the business, how much do you guys think you have the muscle in place right now to make that forecast? And when do you think there might be looking for a pivot? Roger Carlile: This is Roger Carlile. Excuse me for my voice. I think as I said in the comment in the press release, we're confident that we're going to grow the business. And so at the moment, I mean, the conditions we see right now and the investments we've made and what are the conversations we're having with clients, I'm confident that fiscal year 2027 will be growth over fiscal year 2026 when we wrap up the year. So now you may ask where is that going to be? I think it's going to -- obviously, you've got a lot of investments that are coming to fruition. So I think you're going to see that growth more prevalent in the latter half of the year than the first half of the fiscal year. But at the moment, that's what I believe. I think you're going to see growth in the top line for RGP in fiscal year 2027. Operator: Our next question comes from Joe Gomes with NOBLE Capital. Joseph Gomes: You guys mentioned you've had a lot of new hires or promotions. You've done a lot of press releases on that. In your comments today, you talked about they should help drive revenue growth through an anticipated ramp-up period. Maybe give us a little idea of what that timing of that ramp-up period is? Are we talking 1 quarter, 2 quarters? Where does that stand? Roger Carlile: Well, I mean, it varies in my experience from person to person and from type of service. But generally speaking, I think we expect those things to have maturation periods of between 6 months and 9 months. Sometimes you're lucky and they're shorter. Perhaps in the AI space, for example, we're having a lot of conversations and Jessica joining immediately. We're seeing already impact there. I think that might be shorter. But in other things, it could be longer. So I think with nothing more than just my own instinct from being in the business for a long time, I would say I'm looking at a 6- to 9-month period of time, which is why I'm comfortable that we'll start to see revenue growth in fiscal year 2027, but it will probably come in the latter 2 quarters of that fiscal year. Joseph Gomes: So Roger, so just kind of going on that, you're confident you'll see revenue growth in '27. What needs to happen? Do we need to see an upswing in the overall market? Do we just need to see RGP start to take more share of wallet from existing customers? I mean, what are you kind of counting on when you're saying you're confident we'll see revenue growth in '27 over '26? Roger Carlile: Yes. Good question. I think, first of all, we don't -- I don't need the market to change dramatically worse, right? I mean I just need it to be -- nor do I need it to be, in my mind, dramatically better. I just need it to be sort of in its current condition throughout that maturation period. And then I think it's mostly in our hands, whether we are ultimately taking market share. I mean, probably any time we win something if someone doesn't, that you could say is moving some share, but I don't know if it's significant enough to say you're moving total market share. But we need to continue with the people that we're adding, the new salespeople, the new consulting leaders, the new leaders like Jessica and others, we need to keep having the conversations we're having at the pace we're having them. And frankly, if we just keep winning at the current pace, I mean, I think we'll win more. But if we can win at the current pace, we're having more of those conversations, more opportunities coming to the top of the pipeline, I think we'll see that we're starting to grow the revenue. Essentially, we're going to have -- we're having -- we have more people, we're having more and better conversations, and I think that's going to result in revenue growth. Joseph Gomes: Okay. And then one more for me, if I may. I mean given where the stock is these days and given the cash and the authorized buyback, I mean, kind of what's your thought process on when you would look to step into the market and maybe repurchase some shares here? Jennifer Ryu: Yes. Joe, this is Jenn. Yes, I mean, as you know, we've been working on taking out costs and also been reassessing strategic priorities, and we started reinvesting into the business. So given all the moving pieces, we're still assessing just impact holistically, including where we are from a liquidity standpoint. But yes, I mean, no doubt, we think our shares are very attractive, and we'll look to begin executing on buybacks when we are ready. Operator: [Operator Instructions] Our next question comes from Kartik Mehta with Northcoast Research. Kartik Mehta: Roger, in the previous earnings calls, you talked about AI displacing some lower-level opportunities, but also creating opportunities. And I'm wondering, as you look over the next 12 months to 24 months and maybe as you look at the current pipeline, is AI a tailwind for you or headwind for you or neutral at this point in time? Roger Carlile: I think at this point in time, it's a tailwind. I mean I think it's going to be a tailwind for a lot of professional services companies, notwithstanding what the popular media was saying as long as they're diligently doing something about it and executing. I mean if you said by, you do nothing, then the world will pass you by. In the short run, there's internally just using the tools for ourselves and making ourselves more efficient can be a tailwind on our cost structure and the kinds of conversations we're having with clients that range all the way from helping them get their data prepared to apply AI tools against it up through helping them make sort of buy or buy build decisions and implementing that. Those are all services that we provide to clients. And so I think those are going to also be tailwinds for us. Kartik Mehta: And Jenn, I know you guys are investing in the business. You've hired salespeople. Obviously, you've hired leaders for the business. And as you look at your SG&A, are we at a trough or kind of at a stability level for SG&A? Jennifer Ryu: Yes. I mean I would say, yes, we are nearing the stability level for SG&A. As you know, I mean, we are going -- we started reinvesting this quarter in Q3. So over the next couple of quarters, you'll see the full impact of those reinvestments come in. But offsetting that, we will also be realizing the benefits from the cost actions that we've taken. So those 2 things will have some offset. But timing-wise, it's not going to line up perfectly. I would say that given the reinvestment starting in Q1 of fiscal '27, we will see a slight kind of elevation of our SG&A expenses. But like Roger said, we're also expecting that investment to pay off in the latter half of fiscal '27. Kartik Mehta: And just one last question, Roger. Any other portfolio actions you anticipate over the next 12 months to 24 months? Roger Carlile: Well, nothing that I have in process at the moment. So I couldn't comment, but by portfolio, maybe you mean service areas or business units. But we're constantly -- I think we mentioned, right, simplification is one of our focal points. But that includes a number of things, the processes that we do, the services we offer and where we offer those services. So we're constantly looking at that, and that will be continuing. Operator: Our next question comes from Alexander Sinatra with Baird. Alexander Sinatra: This is Alex on for Mark Marcon. I was just wondering, you mentioned in the press release that there's been some reduced demand in traditional finance roles related to the adoption of AI and automation. And this is something you mentioned last quarter, too. So I was just kind of wondering if we can get a little bit more detail on that, what kind of negative impact you're seeing? Roger Carlile: Yes. Well, I think what we mentioned this quarter is really just consistent with what we were seeing last quarter. I don't think there's been any acceleration on that. I think the comments I made about the overall market for our services was that it was pretty consistent with what we saw in the prior quarter. So I mean there are certainly some kinds of roles that as clients install AI tools that are then less in demand. And the ones that we saw that in were the operational accounting, those types of skills. But nothing accelerating on that. I think it's sort of a steady state on that right now. Alexander Sinatra: Great. Super helpful. And then in terms of the sale of Sitrick, I was just kind of wondering how much you expect to net from that, not just the revenue, but like on a margin perspective, how that's expected to impact you? Jennifer Ryu: Sure. Yes. So the Sitrick disposition, Sitrick has been around $9-ish million on an annual basis from a revenue standpoint. And this will actually be -- from a profitability standpoint, it's not going to have any material impact on the business. Operator: I would now like to turn the call back over to Roger Carlile for any closing remarks. Roger Carlile: Thank you, operator, and thanks, everyone, for joining our call today. As I said last time, we appreciate your interest in RGP, and don't hesitate to reach out with any additional questions. Thank you. Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. Before you buy stock in Resources Connection, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Resources Connection wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Resources Connection (RGP) Earnings Transcript was originally published by The Motley Fool

DALLAS, April 08, 2026--(BUSINESS WIRE)--Resources Connection, Inc. (Nasdaq: RGP) (the "Company"), a professional services firm, today announced its financial results for its third quarter of fiscal 2026 ended February 28, 2026. Third Quarter Fiscal 2026 Highlights Compared to Prior Year Quarter: Revenue of $107.9 million compared to $129.4 million Gross margin improved to 35.7% compared to 35.1% Selling, general and administrative ("SG&A") expenses improved to $45.8 million compared to $51.2 million Adjusted SG&A expenses, a non-GAAP measure, improved to $39.4 million compared to $43.7 million Net loss improved to $9.5 million (net loss margin of 8.8%) compared to net loss of $44.1 million (net loss margin of 34.0%) GAAP diluted loss per common share improved to $0.28 compared to $1.34 Adjusted EBITDA, a non-GAAP measure, of $(1.4) million (Adjusted EBITDA margin of (1.3)%) compared to $1.7 million (Adjusted EBITDA margin of 1.3%) Management Commentary "Third quarter results were aligned with our previously provided outlook for revenue and gross margin, and our run rate SG&A expense was better than the outlook," said Roger Carlile, Chief Executive Officer. "We continue to focus on our four priorities of aligning our cost structure with our current revenue levels, refocusing our On-Demand Talent segment offerings, scaling our Consulting segment, and streamlining how we operate. In the third quarter, we made focused investments in our On-Demand Talent and Consulting segments, which we expect to drive revenue growth as they mature through an anticipated ramp-up period. Additionally, we announced today that we have entered into an agreement to sell our Sitrick crisis communications business as part of the streamlining of our business portfolio to focus on the clients and services where we have a competitive right to win. We are confident that our continued focus on these priorities and related activities will deliver improved future financial results." Third Quarter Fiscal 2026 Results Revenue in the third quarter of fiscal 2026 was $107.9 million compared to $129.4 million in the third quarter of fiscal 2025. On a same-day constant currency basis, revenue decreased by $25.4 million, or 19.6%. Billable hours decreased 16.3% year-over-year and the Company average bill rate for the third quarter of fiscal 2026 decreased 1.0% year over year, or 2.1% on a constant currency basis. The Company average bill rate reflects a continued shift in the geographic revenue mix towards regions with lower bill rates, whereas the average bill rate in the U.S. improved by 2.8% compared to the third quarter of fiscal 2025. Gross margin in the third quarter of fiscal 2026 improved to 35.7% compared to 35.1% in the third quarter of fiscal 2025. The increase was primarily attributable to a moderate improvement in pay bill ratio, lower holiday pay as a result of less holidays compared to the prior year quarter and lower healthcare costs under the Company's self-insured medical program. GAAP SG&A expenses for the third quarter of fiscal 2026 improved to $45.8 million, or 42.5% of revenue, compared to $51.2 million, or 39.5% of revenue, for the third quarter of fiscal 2025. The $5.3 million improvement in SG&A expenses year-over-year was primarily driven by a $1.9 million decrease in employee compensation and benefits costs following the reductions in force in fiscal 2025 and most recently the reductions in force in January 2026 and October 2025 in connection with the Company's restructuring and transformation initiatives, a $1.6 million decrease in technology transformation costs, primarily associated with the completion of the Company's North America technology implementation during fiscal 2025, a $0.9 million decrease in stock-based compensation, a $1.4 million decrease in consulting services and professional services fees, and a $1.6 million decrease related to other general and administrative costs due to our efforts to achieve an improved cost structure. These improvements were partially offset by a $1.5 million increase in restructuring costs primarily related to a non-cash impairment charge on a right-of-use asset in connection with the exit and sublease of certain office space, and a $1.0 million increase related to bad debt expense. Income tax expense for the third quarter of fiscal 2026 was $0.7 million, or an effective tax rate of 7.9%, compared to an income tax benefit of $5.6 million, or an effective tax rate of 11.3%, for the third quarter of fiscal 2025. The income tax expense in the quarter ended February 28, 2026 was primarily attributable to income tax expense from profitable foreign jurisdictions, while losses in certain domestic and foreign jurisdictions did not result in a tax benefit due to the existence of valuation allowances. Net loss for the third quarter of fiscal 2026 was $9.5 million (net loss margin of 8.8%), compared to net loss of $44.1 million (net loss margin of 34.0%) in the prior year quarter. Both fiscal quarters contained a number of non-run-rate items, including restructuring expenses in the third quarters of fiscal 2026 and fiscal 2025 and a goodwill impairment charge and technology transformation costs in the third quarter of 2025. Excluding all non-run-rate items, Adjusted EBITDA was $(1.4) million (margin of (1.3)%) in the third quarter of fiscal 2026 compared to $1.7 million (margin of 1.3%) in the prior year quarter. Third Quarter Fiscal 2026 Segment Revenue Results On-Demand Talent –Revenue in the On-Demand Talent segment was $40.9 million in the third quarter of fiscal 2026 compared to $47.1 million in the third quarter of fiscal 2025. On a same day constant currency basis, revenue decreased 16.3% in the third quarter of fiscal 2026. The decrease was due primarily to a decrease in billable hours of 17.1%, partially offset by an increase in the average bill rate of 4.5% (or 4.0% on a constant currency basis). The Company continued to experience reduced demand in traditional finance roles as clients increasingly adopt AI and automation. The Company remains focused on evolving the on-demand talent base and skillset to align with changing market demand. The improvement in average bill rate was the result of the Company’s continued focus on pricing discipline. Consulting – Revenue in the Consulting segment was $36.9 million in the third quarter of fiscal 2026 compared to $52.6 million in the third quarter of fiscal 2025. On a same day constant currency basis, revenue decreased 32.5% in the third quarter of fiscal 2026 due to a 31.5% decrease in billable hours, partially offset by a 2.3% (or 1.6% on a constant currency basis) increase in the average bill rate. The decline in billable hours reflected slower pipeline conversion, while average bill rates continue to increase due to pricing discipline. Europe & Asia Pacific – Revenue in the Europe & Asia Pacific segment was $18.1 million in the third quarter of fiscal 2026 compared to $18.6 million in the third quarter of fiscal 2025. On a same day constant currency basis, revenue declined 5.8%. The decrease was primarily due to a 3.6% decrease in billable hours as a result of delayed project starts, and a 3.9% decrease in the average bill rate on a constant currency basis due to a mix shift to lower cost markets in the Asia Pacific region. Outsourced Services – Revenue in the Outsourced Services segment was $9.5 million in the third quarter of fiscal 2026 compared to $9.4 million in the third quarter of fiscal 2025. On a same-day constant currency basis, revenue decreased 1.7% in the third quarter of fiscal 2026.Billable hours increased 2.3% and the average bill rate declined 1.3%. All Other – Revenue in the All Other segment was $2.5 million in the third quarter of fiscal 2026 compared to $1.8 million in the third quarter of fiscal 2025. On a same-day constant currency basis, revenue increased 34.7%. The increase was primarily due to an increase in billable hours of 51.1% partially offset by a 9.9% decrease in average bill rate. Cash Position and Capital Allocation As of February 28, 2026, cash and cash equivalents totaled $82.8 million and the Company had up to $49.3 million of remaining capacity under its credit agreement with Bank of America, N.A. entered into on July 2, 2025. The Company used $0.7 million in cash from operations during the nine months ended February 28, 2026 compared to cash provided by operations of $2.1 million during the nine months ended February 22, 2025. The Company paid a quarterly dividend of $0.07 per share on December 12, 2025, or $2.3 million in the aggregate, to stockholders of record at the close of business on November 14, 2025. The Company's Board of Directors had previously approved stock repurchase programs that authorized the Company's senior executives to purchase shares of the Company's common stock up to an aggregate dollar limit (the "Stock Repurchase Programs"). No shares of the Company's common stock were purchased under the Stock Repurchase Programs during the three and nine months ended February 28, 2026. As of February 28, 2026, approximately $79.2 million remained available for future repurchases of the Company’s common stock under the Stock Repurchase Programs. Conference Call Information RGP will hold a conference call for analysts and investors at 5:00 p.m., ET, today, April 8, 2026. A live webcast of the call will be available on the Events section of the Company’s Investor Relations website. To access the call by phone, please go to this link (registration link) and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time by visiting the Company's Investor Relations website. About RGP RGP (Nasdaq: RGP) has been redefining professional services for over 30 years by closing the gap between advice and execution. RGP combines the flexibility of on-demand talent, the rigor of consulting, and the accountability of managed services for faster impact, smarter investment, and lower risk. The firm partners with CFOs and other C-suite leaders across finance, digital transformation, data, and cloud—connecting advisory to execution at global scale. Based in Dallas, Texas, with offices worldwide, RGP annually engages with over 1,500 clients around the world from approximately 40 physical practice offices and multiple virtual offices. As of January 2026, RGP is proud to have served 90% percent of the Fortune 100 and has been recognized by U.S. News & World Report (2025–2026 Best Companies to Work For) and Forbes (America’s Best Midsize Employers 2026, America's Best Management Consulting Firms 2025, World’s Best Management Consulting Firms 2025). Resources Connection, Inc. (RGP) is listed on the Nasdaq Global Select Market, the exchange’s highest tier by listing standards. To learn more about RGP, visit: http://www.rgp.com. Forward-Looking Statements Certain statements in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to expectations concerning matters that are not historical facts. Such forward-looking statements may be identified by words such as "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "forecast," "future," "intends," "may," "plans," "potential," "predicts," "remain," "should," "strategy" or "will" or the negative of these terms or other comparable terminology. In this press release, such statements include statements regarding our strategic and operational plans, including expectations about the benefits of our investments in our Consulting and On-Demand Talent businesses and expectations about our ability to improve future financial results. Such statements and all phases of the Company’s operations are subject to known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements and those of our industry to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties include, but are not limited to, the following: risks related to an economic downturn or deterioration of general macroeconomic conditions, potential adverse effects to our and our clients’ liquidity and financial performances from bank failures or other events affecting financial institutions, the highly competitive nature of the market for professional services, risks related to the loss of a significant number of our consultants, or an inability to attract and retain new consultants, the possible impact on our business from the loss of the services of one or more key members of our senior management or key sales professionals, risks related to potential significant increases in wages or payroll-related costs, our ability to secure new projects from clients, our ability to achieve or maintain a suitable pay/bill ratio, our ability to compete effectively in the competitive bidding process, risks related to unfavorable provisions in our contracts which may permit our clients to, among other things, terminate the contracts partially or completely at any time prior to completion, our ability to realize the level of benefit that we expect from our restructuring initiatives, risks that our recent digital expansion and technology transformation efforts may not be successful, our ability to use artificial intelligence and machine learning in our business, our ability to build an efficient support structure as our business continues to grow and transform, our ability to grow our business, manage our growth or sustain our current business, our ability to serve clients internationally, additional operational challenges from our international activities possible disruption of our business from our past and future acquisitions, the possibility that our recent rebranding efforts may not be successful, our potential inability to adequately protect our intellectual property rights, risks that our computer hardware and software and telecommunications systems are damaged, breached or interrupted, risks related to the failure to comply with data privacy laws and regulations and the adverse effect it may have on our reputation, results of operations or financial condition, our ability to comply with governmental, regulatory and legal requirements and company policies, the possible legal liability for damages resulting from the performance of projects by our consultants or for our clients’ mistreatment of our personnel, risks arising from changes in applicable tax laws or adverse results in tax audits or interpretations, the possible adverse effect on our business model from the reclassification of our independent contractors by foreign tax and regulatory authorities, the possible difficulty for a third party to acquire us and resulting depression of our stock price, the operating and financial restrictions from our credit facility, risks related to the variable rate of interest in our credit facility, the possible impact of activist shareholders, the possibility that we are unable to or elect not to pay our quarterly dividend payment, and other factors and uncertainties as are identified in our most recent Annual Report on Form 10-K for the year ended May 31, 2025, which was filed on July 28, 2025 and our other public filings made with the Securities and Exchange Commission (File No. 0-32113). Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business or operating results. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not intend, and undertakes no obligation, to update the forward-looking statements in this press release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, unless required by law to do so. Non-GAAP Financial Measures The Company uses certain non-GAAP financial measures to assess our financial and operating performance that are not defined by or calculated in accordance with accounting principles generally accepted in the U.S. ("GAAP") to assess our financial and operating performance. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that (i) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the comparable measure calculated and presented in accordance with GAAP in the Consolidated Statements of Operations; or (ii) includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the comparable GAAP measure so calculated and presented. The following non-GAAP measures are presented in this press release: Same-day constant currency revenue is adjusted for the following items: Currency impact. In order to remove the impact of fluctuations in foreign currency exchange rates, the Company calculates same-day constant currency revenue, which represents the outcome that would have resulted had exchange rates in the current period been the same as those in effect in the comparable prior period. Business days impact. In order to remove the fluctuations caused by comparable periods having a different number of business days, the Company calculates same-day revenue as current period revenue (adjusted for currency impact) divided by the number of business days in the current period, multiplied by the number of business days in the comparable prior period. The number of business days in each respective period is provided in the "Number of Business Days" section of the "Reconciliation of GAAP to Non-GAAP Financial Measures" table below. EBITDA is calculated as net income (loss) before amortization expense, depreciation expense, interest and income taxes. Adjusted EBITDA is calculated as EBITDA excluding stock-based compensation expense, amortized Enterprise Resource Planning ("ERP") system costs, technology transformation costs, goodwill impairment, acquisition costs, gain on sale of assets, restructuring costs, CEO transition costs, and other items management believes are not representative of the Company's core operations. We also present herein Adjusted EBITDA at the segment level as a measure used to assess the performance of our segments. Segment Adjusted EBITDA excludes certain shared corporate administrative costs that are not practical to allocate. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenue. Adjusted diluted earnings (loss) per common share is calculated as diluted earnings (loss) per common share, excluding the per share impact of stock-based compensation expense, technology transformation costs, acquisition costs, goodwill impairment, gain on sale of assets, restructuring costs, CEO transition costs, and adjusted for the related tax effects of these adjustments. Adjusted SG&A expense is calculated as SG&A expenses excluding stock-based compensation, amortized ERP system costs, technology transformation costs, acquisition costs, gain on sale of assets, restructuring costs, CEO transition costs, and other items management believes are not representative of the Company's core operations. We believe the above-mentioned non-GAAP financial measures, which are used by management to assess the core performance of our Company, provide useful information and additional clarity of our operating results to our investors in their own evaluation of the core performance of our Company and facilitate a comparison of such performance from period to period. These are not measurements of financial performance or liquidity under GAAP and should not be considered in isolation or construed as substitutes for revenue, net income or other cash flow data prepared in accordance with GAAP for purposes of analyzing our revenue, profitability or liquidity. These measures should be considered in addition to, and not as a substitute for, revenue, net income (loss), earnings (loss) per share, cash flows or other measures of financial performance prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies, as other companies may calculate such financial results differently. View source version on businesswire.com: https://www.businesswire.com/news/home/20260408389200/en/ Contacts Analyst Contact: Jennifer Ryu Chief Financial Officer (US+) 1-714-430-6500 [email protected] Media Contact: Pat Burek Financial Profiles (US+) 1-310-622-8244 [email protected]