Resources Connection (RGP) 1 Oct 242025 Q1 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Resources Connection, Inc. Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I would like to remind everyone that management will be commenting on results for the first quarter ended August 24, 2024. They will also refer to certain non-GAAP financial measures. An explanation and reconciliation of these measures to the most comparable GAAP financial measures are included in the press release issued today.

results make be and the SEC. the filed this management can of Relations Also Factors for financial anticipated or section release XX, report Form company. XX-K plans, call, website in year actual the please ended XXXX. materially, regarding of statements RGP's are today may RGP's differ press performance viewed and see strategies the May predictions Such Investors in events section may the Risk during initiatives Today's and statements and forward-looking with on the

other For results that a this discussion condition what of risks, and by operations or cause uncertainties to business during and forward-looking company's expressed materially made from factors is call. the financial differ may of implied statements

over CEO, the Duchene. I Kate turn will now to RGP's call

exciting QX Thank Operating Financial you, our are today Patel, accomplished unlock thank operator. our our and trends our in what brand clarity QX we Chief Ryu, and transparency discuss everyone, operating regarding to across strategic growth Good have joining. me Officer, you our architecture, and Bhadresh cross-sell evolve for model and capabilities and afternoon, operating on enterprise. results Officer; with updates Jenn and to I'll initiatives. and provide Chief to to greater focus

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advantage launched new operating our positioning and the brand positioning marketplace. our model We Second, to our brand architecture to we and competitive the bring articulate new we today. clearly rebuilt

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will our on-demand services consulting are We clients and in services ways: to via firm under on-demand Countsy the these and detail. by our service in global clients and solutions brands Veracity umbrella. three solutions more new talent, reporting all her skill professional cover Jenn problems a by and outsourced bringing confidently bandwidth and set that reviewing comprises remarks, segment needs. high-value in gaps RGP service talent quickly enable filling our to our brands solve RGP On-demand

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to and functional experience experience, has frameworks chain, information risk partnerships others, leaders and customer transformation for Veracity employee SAP, brings with finance Oracle, in supply and methodologies strategic ServiceNow, and tax, technology. BlackLine among accounting, Workday, compliance, and work

get equity and NetSuite, is and from can fractional focus quickly, scaleups helping Oracle to received with Countsy technology over start-up support the years. CHROs. sales. technology they carve clients' XXXX an RGP by out so of the startups, running spin capital HR provided a Year by clients expert We stay operations organization as laser-focused look into platform Partner they and on modern operates administration, for focus human accounting, and manage growth. post-transaction. can the and NetSuite our services expanding back-office on BPO CFOs Countsy by our support named We who recently up product past was outsourced a addressable want we're anchored commendation on and the and by market spinouts X Countsy for platform a out business on

that these moves. model driving explain me described strategy operating brand our and let the I've Now evolution,

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our consulting to higher during to both will creates ability and which implementation space, to multiyear our Second, organizations, inorganically strategy within our to The us to allow clients' expanded engage win a the in ability expand the projects and scope win we've project in organically enhance execution. in turn, our deepened in work opportunities and additional of work. at levels different capabilities ways

in-country connectivity globally and and talent built at global right the to and service. Third, global to flexibility, talent right we Clients dots India and We've scale. Philippines nearshore the exceptional offshore provide are need in delivery connecting the centers the solutions. deliver price

to are own three. We're see to deliver Bhadresh together. the refresh, examples delivering long and evolution positioned unlock to transformation, clients operating to technology we're succeed, strategy all that We and will are model purpose-built solutions undergone our brand specific term. starting are over diversification growth share our some our this pleased we Having where segments

over now our more to it I'll share turn Bhadresh about execution focus. to

last good our call. and during which brand you, of launch, support and direction promise we afternoon, structure, about everyone. Thank today's our all new I'm strategic thrilled the positioning Kate, shared of the

individually meet with us our and preferred internal organizational engaging flexibility allows of facing transformational now challenger their journeys on brand, without throughout we and on consulting or of sales our emphasis to a services the whether needs operational integration This our As with an us deliver better seamlessly. past quarter, This offerings, talent way has service teams combination range with to leadership positioned full outsourced cross-selling. offerings on on-demand our and based our barriers. been reinforcing are focus clients' in

understand to are to client empowering expand services macroeconomic the sharper management out business we of We're remains pipeline the share While across planning breadth into and to account centers. uncertain, cross-sell process our all the new a leaders. I'm buying quite approach. environment strategy. to segments and in executing sales stride clients relationships our These to to our starting are fully sales new pleased existing training carried our focus efforts jointly also include robust organization our our our receptive even of sales by on leverage practice be proving and hit that an consulting

are tailored and ability to deliver ability excited them We in that multiple about to solutions, our their models. mentioned, specific engagement Kate as needs deliver ways all our meet in

go-to-market solid alignment largely an our offshore Global we the also in serve and delivery tight India unifying increased few across cross-border segments Philippines global the our we've call our driven last gross Following is significant on place, no but stronger rather strategic increase increase to shifts infrastructure better coincidence, on size Delivery a now between process made our over our pipeline quarter-over-quarter opportunities. execution, base. With in a sales by This focus organization. cross-sell in seeing our and which center, a emphasis we're client months, and project within the in clients Centers multinational we're the

Our are segments business rapidly evolving.

the utilize in accounting scale rate staffing is Our beyond space, pressure the extending experts relevant at And competition on-demand this, talent to continue traditional seeks despite segment clients intense finance though our our and current it professional increasingly rules. environment. in and

the to expand, for expect conditions we As further respond. to fully account client and expert macroeconomic prepared we're improve, outside demand

higher are Our positions value stage up newly positions us to and play for opportunity a for enterprise. in of enlarge years. financial XX to across services and transformation of the us served us with particularly engage clients, professional capabilities around pieces clients, in acquisition over consulting services consulting strategy though formed strengthening dedicated position Reference a which us transformation to advisory work business business further discussions the even key enabling digital and role Point earlier chain, with its segment we've deep creates The our

client and growth. better positioned among back Our especially exploring outsourced venture existing its expanding our its base, is and base, startups while scaleups. performance also is cross-selling including carve-out future client segment getting APAC segment, for services AI opportunities within spinouts Europe

environments remain remainder were by strong negotiations and optimistic contract in as differentiating for progress highly us decision-making seasonality results. secure all year, with have elongated driven resilient past of than segments business staffing while few their larger in to internal cross-selling We client to fiscal part we impacted are and us summer continues deliver cautiously cycles by the from combined large traditional client be Europe our and importantly, our activities. consulting the given the and proving they APAC remain with We permian typical engagements in restructuring. Most years, firms, allowing relevant

care we between providing was and with integrator brands. implementation for the partner initiative effort Veracity our Some on-demand include: examples client to systems This a delivery a a back large roles. filling and functional system, building health and won our ERP sizable collaborative

significant a services, engage portfolio final Second, brand support Not project. the carve-out outsourcing to we same last of only project Countsy were the shared now our is on to a in our the carve-out. private leveraging firm awarded I the call multi-line but consultants comprehensive support equity provide that to discussions dollar additional client to on-demand with was company

digital of But calendar track internal system onto deliver we've planning and year. initiated seamless geographies, terms client teams done other platform. financial for medical support engaging by space example, work patient was and commercial a the example to service, we're large needs. and another international estate segments in of result and global the in efforts, a driven our of and business the the later of prioritize another excellent collaborative our our our services technology on product and This As transformational successful America initially, North and to remove the for the new phase we're care across barriers company, a effort units our services cross-selling and brands we've to for in leader across migrating their transformation new investment action. Last, devices this geographies real

over now hand Jenn. to call the I'll

you, and Thank good Bhadresh, afternoon, everyone.

quarter total on our including was enterprise year X.X% the constant the same-day SG&A basis, adjusted $X.X quarter XX% margin. the $XX.X to million, and $XXX.X of million, 'XX, margin for Gross basis. of EBITDA prior a adjusted EBITDA fiscal currency million a on with total a represents revenue XX.X%, delivered from rate down we first run which quarter For was

in rebound quarter, pipeline, up more recovery. growth notable top indicator During and the sales early of an saw picked activities we for funnel the which is momentum, a encouraging

to across the Asia our Pacific continues continues globe result year significant from prior less was bill other bill of average pricing bill compared of to a However, client of quarter, the indirect lower margin Gross by competitive. to currency, mix average was compared billed this Enterprise-wide sales service to utilization well salary pipeline. at environment softer opportunities speed hours year geographies ago. to rate a impact each rates constant as and impact company predominantly the down to due caution as lower $XXX remains the Revenue which as total move top compressed region. on through rate, of a consultants the volume driven leverage relative $XXX favorable cost in line. The quarter shift

and pricing the continue fiscal X% rates landscape XXXX. Our and in and X%, strength U.S. competitive quarter even the average from increased demonstrate first of to respectively, Europe bill

on SG&A. Now

to costs. $XX.X driven a run Our expense SG&A million, actions was QX in year, of result compensation of fiscal a primarily enterprise taken fixed from previous lower improvement the year the expense the management rate XX% prior quarter as for by reduce

from gain of Irvine, continue remain We A efficiency unlocking with our laser-focused million and run in aforementioned on cost during the $XX.X to of operating completed our the recognized was sale, SG&A. $X.X excluded improving cash. building was rate total the million sale leverage. which connection California We in quarter, the

fiscal quarter, a or $X.X of EBITDA or XX.X% in a $X.X X%. prior EBITDA was we includes XX% will prior a consulting, first million and Bhadresh, quarter. Revenue year for over $X.X year segment the provide performance. Revenue As to and segment regions the million operating to and made in X% $XX for of outlined or prior with was decline and adjusted outsourced quarter. $XX.X improvement. was in prior Kate Pac $X.X million year in $XX.X in million the million the of I quarter services million outsourced business Asia multiple year compared year. revenue Revenue segment call segment Segment a Segment margin year consulting was last Segment began the million by in first adjusted prior talent, our acquisitions million to combined. million or million from to quarter, Europe $X.X a on margin XX.X% prior million quarter, $X.X XX% $XX in margin compared our in the These to X.X% fourth a July for our segment margin segments quarter. XX%. on-demand quarter. Revenue the margin adjusted compared compared in the was or the segments a was to million $X.X color some or on-demand million compared year our previewed talent now we in an of $X.X compared year margin a current EBITDA XX.X% the decline $X.X are services of

to for in were weeks. from or relatively and APAC we margin Segment EBITDA guidance operating certain segment. the of Please X.X% of APAC EBITDA any million million release margin project deal remains choppy excludes segment segment basis. week, goodwill reconciliation a $X.X and press constant refer and Europe starts expected XX% while accounting $X.X revenue reconciliation was for a to a later million closes, X.X% Finally, this impairment impairment, costs. on resilient, which within $XX be some Revenue adjusted new net the a and reporting aligning $X.X Form which was a currency corporate same-day to to recent the million allocate segment were XX-Q summer EBITDA the quarter, structure, in resulted the filed in although European in our of a the measures delays new to assess under across required prior to with greenlit in today's goodwill consolidated includes prior in quarter. When experienced $XX.X shared to year compared or decline adjusted compared year Europe APAC income. the charge operating adjusted and segments noncash the million Segment non-GAAP

Turning to liquidity.

of last free distributed Point now period. balance the price with remains $X.X our pristine of flow dividends outstanding liquidity million million our We available for cash at per $XX share the outlook. average shares cash equivalents continue debt. an cash completing which under share million, returning associated project, with total million program, share cash technology quarter shareholders second transformation focus Our with $XX with and and and million Net sheet the and cash at to our buybacks first $XX remaining on $XXX worth million financial through dividends to end zero had of of $XX of was $XX.XX quarter. I'll the quarter repurchase will of $X we generated close We Reference worth acquisition XX-month outflow million. the in and repurchased of

the run weekly has rate the a in revenue So with slight weeks. been second most quarter, steady uptick recent far in

be and protracted anticipate stronger the operating growth the is encouraging, While the environment to pipeline cycle near in term. the remain choppy, to we sales continues

pay $XXX to similar As first the to such, do revenue $XXX XX% and range first ratio, not the be margin reflecting gross that in mix notable quarter. We run quarter of estimate consultant We to bill quarter. anticipate million range million. in full revenue we XX%, utilization the to a the salaried project revenue of are in a to from be rate QX uplift

well closing, approximately to to for coupled second that certainty stock consist under we $XX second expense will range us will totaling We be rate refresh a primarily transformation $X technology enhance expect a economic million. In our noncash Non-run for growth. time the SG&A remain costs $XX million expense execution as the of over and return new optimistic our efforts branding, with structure to rate quarter million. expenses compensation to and operating improving position quarter of run as in

and call our open concludes remarks, for we will This prepared the now Q&A.

comes first with Our Gomes Instructions] Capital. [Operator Joe NOBLE from question

detail segment the just if I'm the much there. XX% for on information, in give on-demand more decline segment? wondering a you you year-over-year could color little revenue us the Thank

Yes.

we've I alone accounting challenge group that seen -- and where in in we're operational the think, Joe, is our most that. not

we've in reflection significant with we're marketplace. incumbent think the I really of around consulting just consulting ERP opportunity, projects. that's And many difficulty supply just by chain digital is Where the a more on right and system fact the talked, that seeing as get side, is now work talent type trying the and and moving to are around implementation around seats. so employees especially project their not tech and in clients

the we're I fastest that, that we will to improve. when trying our see So the part work economic be cycle do we think is. position also a expect ourselves be this the environment And just and where of the that to recovers business

And on growth of things, might larger wondering significant than able quarter-over-quarter you to was pipeline in you're of a those one I seeing engagements you to extent. couple Okay. the some And be the that kind then call, mentioned if and quantify historically.

both kind you're of So those. an idea get growth we seeing what on of of

so our sure, Yes, growth Yes, has significantly. pipeline increased Joe.

weak you first XX%. of the end at up of So to the end the the look look almost compared pipeline growth to And just quarter, if the fiscal at quarter, of we if compared at about our we're fourth end this it is XX%.

So pipeline. seeing through more we the are come definitely opportunities

to of internally. the have this we executing cross-selling is been due some also And that efforts

where to hope that seeing start positive of any clients may. stuff from understand one cut. And some starting very, of but kind we're cut, I first see did our this days, of early open going of up? about I you if we to that know I rates momentum early when for kind one Great. And or again, it's see projects loosening very more, Are were it's days. Okay. rate benchmarks the was

So here to you've XX just over days. of trying get what seen your the past impression week,

Yes.

we confidence It's marketplace. in Joe, this. about all both the So, know

in confidence. actually I I the clients more projects had And example. think Europe we're to and just this is settled had because start yet, elections I not rate give it slow engaged bring of wasn't of is early confidence the layoffs marketplace. this most, sudden had a in too starting. very built. significant interest event. who all Where don't to outsiders They closes in in will say, And clients of see for And to summer. starting it think but a seeing the would want August, think happen has the We we the part had environment that I the kind European quickly after clients

would say, settle starting just now a I we're seen, see hoped. to happens as we've So we And the bit. decision-making dust

right I can of people. think means to getting which just has timing. we're start we pipeline as of it's soon provider, there, It's materially the we And work. well, get the verbal a choice the when increased we're that how matter the

other more So equates transactional for say I'd all us. it's interest but confidence, and not by open will up work itself rates, clients interest think usually that decline to more gives opportunities project transactional the thing work rate it about I do

Sidoti. question Riddick Instructions] comes from [Operator next with Our Marc

everyone. afternoon, Good

go-to-market updates as some responsive types bit the if this? far about I of if there So on initial your the I are maybe you though as or and know areas initial some early that little as could the talk about made was wondering little are clients. clients segments regarding far bit wondering initial commentary client client segmentation there as reception touching changes. was receptive. to on thoughts of is remarks maybe you a opportunities I or particular larger and that to seems from that client and the that it's any that It of prepared you reality maybe or particularly price could talk a changes most certainly maybe energy as it's

Bhadresh. This Hi. is

cross-sell, it's ability our we're and our that's It driving and seeing seeing is across accounting overall, sectors. the just now or industry not we're actually beyond expand any think of I that financial all to particular sector. conversations

it's any steaming actually that's So ahead one one not the particular other. of

unlocked that's So our we're expand the centers. over we've starting And just momentum into what we've buying been -- building where come. additional to more few further to past see years

little And should things staff, about then this with that, have training, bit some [indiscernible]? talk might like gone internal along maybe planning a can of the sort that maybe either with of and you conversations

Yes. Marc, very we lost you the end. at

you Bhadresh's So know. to we to of if force and us have my But solutions now in bring a sales absolutely broader portfolio capabilities mean what are you're answer maybe and want, positioning not combination let our I right. forth. is

We do are to not by themselves. expecting all them it

to bring enterprise for model help the operating going of reacting the that. of partner talk salespeople into on a to lots want model sales way. concierge want them. market trusted for and right positively They people the capabilities think plug to of the clients lots individuals who this they client turn then sales forth don't calling clients support our and on us problem in can our to get, really no clarifies evolution our organizational really shop different They understand I same who where create our very and matter their design are they to view calling a partner client. is together. This not and We type to to as team

add? with anything that, do to Bhadresh, have So you

definition the also and fiscal we personas are, and as a kind think done in that those bringing significant and how their as I last that internally, amount really of from to practices organized the target, behaviors right our to started well getting table. conversations or what of of we've expertise buying capabilities work around approach patterns

to the the to aligned just bench, have that can the repeatability, We in business the also fact the vetted the not on-demand bring in that experts fact depth in consulting on business we time. depth methodology, capabilities we really rely

we're scale chain leverage to what's move on the food landing. that to is our this able So to projects on-demand up these then conversations allowing to we're start us those in capabilities and

Reference the then what But me And [indiscernible] past, talk about prioritization more Great. bit little of valuation? potential opportunity a could was pipeline, question on Point. lines the is for around the seeing I the for target if particularly acquisition you're along wondering last acquisition you the maybe

Yes.

think Point, digital Reference complete focused now, completing and of together bringing business capabilities on especially Marc, the continuing more those right I to our globally. of we're CloudGo integration the support to very of integration

So we're a go-to-market And execution right we've our heads to planning materials teams done down account to add in Bhadresh as now. just toolkit. add some lot shared, training to tools

better of market the say that doing getting the coming That's to focused team, we're are on representing So the on see I a we're that a job to right we're execution. as interesting. what where looking we could already return focused. now, be we've as we have not that we assets very made. That's and investments But marketplace at

a this little I capital priority execution shift expect you also And deals the your more to on us quarter do question more couldn't we with hear capital a allocation opportunistically, allocation focusing Marc, from focus and buybacks. bit in Yes, coming completely. standpoint, was more internally on to pursuing share

for would closing Thank turn Duchene like I you. any Kate the remarks. to over to back call now

want and close of for to you Thanks and our to after look I second quarter. new us very website. everyone please our thank Well, today, check out the we updating joining much, forward

your Thank you. you Thank participation. conference. the This for concludes

disconnect. now may You