Resources Connection Stock Earnings Reports

RGP reported a Q1 that exceeded its outlook on revenue, gross margin and SG&A, producing materially better profit than expected. Revenue was $120.2M with gross margin of 39.5% and adjusted EBITDA of $3.1M (2.5% margin). Europe & Asia Pacific and Outsourced Services returned to year-over-year growth (5% and 4%, respectively). Consulting and On-Demand revenue remain soft, but consulting showed meaningful bill-rate improvement (consulting bill rate +11% year-over-year to $160) and a growing pipeline of larger, higher‑value transformation engagements (CFO advisory, digital finance, ERP, data). Management is executing a transformation toward an integrated model (consulting + on-demand + outsourced services), emphasizing CFO advisory and digital transformation, global delivery centers, and AI/automation-enabled offerings (Countsy). Cost actions are underway — including a recent reduction in force expected to yield $6–8M of annual run‑rate savings — and run-rate SG&A improved ~7% vs. prior year. Liquidity is strong with $77.5M cash, zero debt, and $79M remaining repurchase capacity. Q2 guidance: revenue $115–120M, gross margin 38–39%, SG&A $43–45M, with continued focus on pipeline conversion and cost discipline. Management expects continued near‑term choppiness but believes the strategic shift positions RGP for stronger, more profitable growth as demand normalizes.