The Hackett Group Stock Earnings Reports

The Hackett Group reported Q1 2026 revenues before reimbursements of $67.8M (down 11% YoY) and adjusted EPS of $0.34 (at the low end of guidance). Management attributes near-term softness to macro uncertainty and elongated client decision cycles around AI ROI, while emphasizing a deliberate, company-wide pivot to AI platform–enabled sales and delivery that management expects will improve productivity, expand scope, and shift the business toward a ‘service-as-a-product’ model. Early platform adoption showed a ~500 bps improvement in SBT project margins in Q1 (partially offset by lower utilization as headcount was adjusted); management expects sequential revenue and margin improvement in Q2 and calls Q3 an inflection point where adjusted EPS should exceed last year’s level even with flat revenues. Segment highlights: Global S&BT revenue fell 15% YoY but is expected to be up sequentially in Q2; Oracle Solutions declined 24% YoY but is stabilizing with anticipated sequential margin improvement; SAP Solutions grew 21% YoY driven by implementations tied to prior software sales. The company incurred, and expects continued, transformation-related costs including an estimated Q2 AI transition charge of ~$500k (severance-related) excluded from non-GAAP results. Cash declined to $6.1M at quarter-end (net cash used in operations $5.1M) driven by higher receivables and bonus payments; management expects AR to reduce by ~$8–9M by end of Q2. The company repurchased ~333k shares for ~$4.6M in the quarter, has roughly $22M remaining authorization, and declared a $0.12 Q2 dividend. Guidance: Q2 revenues before reimbursements $68.5M–$70.0M; adjusted diluted EPS $0.33–$0.35; adjusted gross margin ~44–45%; adjusted EBITDA ~20–21% of revenues. Management also highlighted a new global go-to-market collaboration with IBM and strong interest from process-mining users (e.g., Celonis) as potential catalysts for scaled adoption of Hackett’s AI XPLR, AIX and related platforms.