[The Hackett Group First Quarter 2025 Earnings Release](index=1&type=section&id=The%20Hackett%20Group%20First%20Quarter%202025%20Earnings%20Release) [Overview and CEO Commentary](index=1&type=section&id=Overview%20and%20CEO%20Commentary) The company reported Q1 2025 results at the high end of guidance while investing heavily in its Gen AI platforms - Operating results for Q1 2025 were near the high end of revenue guidance and at the high end of **adjusted earnings per share guidance**[3](index=3&type=chunk) - The company is aggressively investing in its **Gen AI platforms**, highlighted by the release of AI XPLR version 3[3](index=3&type=chunk) - Management anticipates AI innovation will foster key channel partnerships and **accelerate growth** in the AI sector[3](index=3&type=chunk) [Q1 2025 Financial Highlights](index=1&type=section&id=Q1%202025%20Financial%20Highlights) Q1 2025 saw slight revenue growth, but GAAP EPS fell significantly due to non-cash expenses, while adjusted EPS increased Q1 2025 vs Q1 2024 Key Financials | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $77.9M | $77.2M | | Revenue before reimbursements | $76.2M | $75.7M | | GAAP Diluted EPS | $0.11 | $0.32 | | Adjusted Diluted EPS | $0.41 | $0.39 | | Cash flow from operations | $4.2M | $2.8M | - Q1 2025 GAAP net income was significantly impacted by **$5.1 million in non-cash compensation** and **$2.4 million in acquisition-related expenses**[6](index=6&type=chunk) [Q2 2025 Business Outlook](index=1&type=section&id=Q2%202025%20Business%20Outlook) The company projects Q2 2025 revenue before reimbursements between $76.0M and $77.5M and adjusted diluted EPS of $0.37 to $0.39 Q2 2025 Guidance | Metric | Q2 2025 Outlook | | :--- | :--- | | Revenue before reimbursements | $76.0M - $77.5M | | Adjusted Diluted EPS | $0.37 - $0.39 | [Shareholder and Capital Allocation Activities](index=1&type=section&id=Shareholder%20and%20Capital%20Allocation%20Activities) The company returned capital through share repurchases and dividends, ending the quarter with $9.2M in cash and $18.0M in debt - The Board declared a second quarterly dividend of **$0.12 per share**, payable on July 7, 2025[6](index=6&type=chunk) - In Q1 2025, the company repurchased **379,000 shares for $11.7 million**[6](index=6&type=chunk) - As of March 28, 2025, cash balance was **$9.2 million**, with **$18.0 million outstanding on its credit facility**[6](index=6&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) Financial statements show stable assets and a net income drop, with segment performance mixed as Global S&BT grew while others declined [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 Income Statement Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $77,865 | $77,187 | | Total costs and operating expenses | $73,462 | $65,662 | | Operating Income | $4,403 | $11,525 | | Net Income | $3,143 | $8,731 | - The increase in total costs was driven largely by **non-cash stock-based compensation**, which rose to a combined **$9.7 million** in Q1 2025[14](index=14&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Key Items (in thousands) | Account | March 28, 2025 | December 27, 2024 | | :--- | :--- | :--- | | Cash | $9,179 | $16,366 | | Total Assets | $191,760 | $191,877 | | Long-term debt | $17,755 | $12,734 | | Total Liabilities | $77,345 | $76,303 | | Shareholders' Equity | $114,415 | $115,574 | [Segment Performance](index=6&type=section&id=Segment%20Performance) Segment Revenue and Contribution Margin (in thousands) | Segment | Q1 2025 Revenue* | Q1 2024 Revenue* | Q1 2025 Contribution Margin | Q1 2024 Contribution Margin | | :--- | :--- | :--- | :--- | :--- | | Global S&BT | $42,642 | $40,254 | $12,786 | $10,053 | | Oracle Solutions | $20,396 | $21,068 | $4,367 | $5,261 | | SAP Solutions | $13,193 | $14,406 | $4,250 | $4,882 | *Revenue before reimbursements - The **Global S&BT segment** was the only segment to show year-over-year growth in both revenue and contribution margin[16](index=16&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) Non-GAAP measures adjust for items like stock compensation and acquisition costs to clarify core operational performance - The company presents non-GAAP results to exclude items not indicative of core operating performance for consistent comparison[9](index=9&type=chunk)[19](index=19&type=chunk) Q1 2025 GAAP to Non-GAAP Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Net Income | $3,143 | $8,731 | | Stock price award program comp. | $5,142 | - | | Non-cash stock based comp. | $2,765 | $2,599 | | Acquisition-related expenses (cash & non-cash) | $2,267 | - | | Other adjustments | $145 | $102 | | Adjusted Net Income | $11,606 | $10,724 | - The **$5.1 million stock price award program expense** relates to equity awards with a market share price hurdle of $30 per share[21](index=21&type=chunk) [Supplemental Information](index=2&type=section&id=Supplemental%20Information) This section provides administrative details and supplemental data, including a rise in headcount and Days Sales Outstanding - A conference call to discuss Q1 2025 results was scheduled for May 6, 2025, at 5:00 P.M. ET[7](index=7&type=chunk)[8](index=8&type=chunk) - The report contains forward-looking statements subject to risks and uncertainties, and the company disclaims any duty to update them[12](index=12&type=chunk) Key Metrics Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Headcount | 1,618 | 1,414 | | Days Sales Outstanding (DSO) | 73 | 68 | | Cash from operating activities (in thousands) | $4,195 | $2,792 |

Revenue Performance - Total revenue for fiscal year 2024 increased to $313.9 million, compared to $296.6 million in 2023, primarily driven by increases in SAP Solutions segment revenue of $10.2 million and Oracle Solutions segment revenue of $7.9 million[144] - Total revenue for the company increased to $313.9 million in 2024, up from $296.6 million in 2023, representing a growth of 5.4%[147] - Global S&BT revenue decreased to $171.1 million in 2024, down from $171.9 million in 2023, a decline of 0.5%[147] - Oracle Solutions revenue rose to $85.7 million in 2024, an increase of 10.5% from $77.8 million in 2023[149] - SAP Solutions revenue increased to $57.1 million in 2024, up 21.5% from $46.9 million in 2023[150] - One customer accounted for 11% of total revenue in 2024, up from 6% in 2023, indicating increased customer concentration[146] Acquisitions and Goodwill - The Hackett Group acquired 100% of LeewayHertz Technologies for a provisional purchase consideration of $7.8 million, resulting in provisional goodwill of $5.9 million[133] - The provisional fair value of the net assets acquired from LeewayHertz includes cash of $1.02 million, current assets of $2.08 million, and intangible assets of $2.5 million[135] - Goodwill related to LeewayHertz has been allocated to the Global S&BT segment, increasing the total goodwill to $89.8 million as of December 27, 2024[137] - The company acquired LeewayHertz for $6.5 million in 2024, contributing to the increase in cash used in investing activities to $10.6 million[166] Operating Expenses and Costs - Total costs and operating expenses for fiscal year 2024 were $269.3 million, compared to $247.3 million in 2023, reflecting an increase in personnel and administrative costs[143] - Personnel costs before reimbursable expenses increased to $183.8 million in 2024, compared to $174.9 million in 2023, a rise of 5.1%[152] - SG&A costs increased by 19% to $78.5 million in 2024, compared to $65.9 million in 2023[155] - The company recognized stock compensation expenses of $10.5 million in 2024, compared to $6.2 million in 2023, indicating increased equity awards[143] Cash Flow and Dividends - Net cash provided by operating activities was $47.7 million in 2024, up from $37.4 million in 2023, an increase of 27.5%[165] - The company approved a 9% increase in the dividend, raising the annual dividend amount to $0.48 per share[173] - As of December 27, 2024, the company had $16.4 million in cash and $12.7 million outstanding under its Credit Facility[163] Market Risks and Currency Exchange - The company has exposure to market risk due to variable interest rates on its Credit Facility, but a 100-basis point increase would not materially impact 2024 results[178] - The company recognized foreign currency exchange losses of $19 thousand in 2024 and $0.4 million in 2023, compared to an income of $1.4 million in 2022[179] - Currently, the company does not hold any derivative contracts to hedge foreign currency risk but may consider adopting such strategies in the future[179] Strategic Initiatives - The Hackett Group completed over 27,500 benchmarking and performance studies, utilizing its Quantum Leap platform to drive digital transformation[125] - The company launched its AI assessment platform, AI XPLR, in early 2024 to help clients identify and design Gen AI enablement opportunities[123] - The joint venture with LeewayHertz aims to integrate AI XPLR and ZBrain platforms to provide advanced Gen AI solutions, expected to be formed by mid-2025[136]

Financial Data and Key Metrics Changes - Total revenues for Q4 2024 were $79.2 million, exceeding quarterly guidance, with adjusted earnings per share of $0.47, also above guidance [8][26]. - Adjusted net income for Q4 2024 was $13.6 million, or adjusted diluted net income per share of $0.47, compared to $0.39 in the prior year [35]. - Total company adjusted gross margin was 47.7% in Q4 2024, up from 43.3% in the prior year [32]. Business Line Data and Key Metrics Changes - Global S&BT segment revenues were $43.9 million, a 4% increase year-over-year, driven by Gen AI consulting, offset by weakness in eProcurement [27][28]. - Oracle Solutions segment revenues were $18.2 million, a 6% decrease year-over-year, primarily due to the wind down of a large engagement [28]. - SAP Solutions segment revenues were $17.2 million, a 51% increase year-over-year, driven by strong software-related sales [29]. Market Data and Key Metrics Changes - Approximately 22% of total revenues before reimbursements consist of recurring multi-year and subscription-based revenues [30]. - The company expects strong demand for SAP services throughout 2025, despite a tempering outlook for Q1 2025 [40]. Company Strategy and Development Direction - The company is focusing on Gen AI-enabled transformations, viewing it as a generational opportunity for value creation [11][45]. - Strategic investments are being made in the AI XPLR platform and the training of associates to enhance Gen AI capabilities [46][48]. - The acquisition of LeewayHertz is expected to accelerate efforts in Gen AI and enhance the company's offerings [17][18]. Management's Comments on Operating Environment and Future Outlook - Management anticipates an increase in IT budgets for Gen AI initiatives in 2025, moving from awareness to budgeted projects [44]. - The company expects to see velocity in the pipeline as clients are better prepared and budgeted for Gen AI initiatives [78]. - There is an expectation of continued strong demand for digital transformation services, despite economic concerns [43]. Other Important Information - The company repurchased 117,000 shares at an average price of $30.95 per share during the quarter [37]. - A 9% increase in the annual dividend was authorized, raising it from $0.44 to $0.48 per share [38]. Q&A Session Summary Question: Can you provide more detail on the breadth of what you're working on regarding Gen AI? - Management noted that client engagements are increasingly focused on Gen AI, driving meeting counts and revenue opportunities [59]. Question: How has the news about DeepSeek affected your pipeline? - Management indicated that the advancements in foundational large language models are positive for Gen AI solutions, enhancing their competitive edge [64]. Question: Is the recent SAP business performance sustainable? - Management expressed that while Q4 performance was strong, it may not be sustainable into Q1, but they expect strong demand throughout 2025 [68]. Question: Are you seeing meetings convert into implementation contracts? - Management reported increasing activity and visibility on pipeline conversion, with clients planning budgeted initiatives for 2025 [77]. Question: Can you quantify the headwind from eProcurement and OneStream in Q4? - Management acknowledged that these areas were significant enough to impact reported growth, but specific quantification was not provided [92].

Core Viewpoint - Hackett Group (HCKT) reported quarterly earnings of $0.47 per share, exceeding the Zacks Consensus Estimate of $0.42 per share, and showing an increase from $0.39 per share a year ago, indicating a positive earnings surprise of 11.90% [1][2] Financial Performance - The company achieved revenues of $77.46 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.46%, compared to $71.17 million in the same quarter last year [2] - Over the last four quarters, Hackett Group has consistently exceeded consensus EPS estimates and revenue estimates [2] Stock Performance - Hackett Group shares have increased approximately 4% since the beginning of the year, aligning with the S&P 500's gain of 4% [3] Future Outlook - The company's earnings outlook will be crucial for assessing future stock performance, with current consensus EPS estimates at $0.41 for the upcoming quarter and $1.73 for the current fiscal year [7] - The Zacks Rank for Hackett Group is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Consulting Services industry, to which Hackett Group belongs, is currently ranked in the bottom 10% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Financial Performance - Total revenue for Q4 2024 was $79.2 million, up 9.9% from $72.4 million in Q4 2023[3] - Adjusted diluted earnings per share for Q4 2024 was $0.47, compared to $0.39 in Q4 2023, representing a 20.5% increase[3] - GAAP diluted earnings per share decreased to $0.12 in Q4 2024 from $0.28 in Q4 2023, impacted by non-cash compensation expenses totaling $7.4 million[3] - Total revenue for the fourth quarter of 2024 was $79.235 million, an increase of 9.4% compared to $72.403 million in the same quarter of 2023[14] - Adjusted net income for the fourth quarter was $13.566 million, compared to $10.826 million in the prior year, reflecting a 25.5% increase[17] - Total revenue for the fourth quarter was $79,235,000, a slight decrease of 0.7% from $79,777,000 in the previous quarter and an increase of 9.3% from $72,403,000 in the same quarter last year[22] - Revenue before reimbursements for the fourth quarter was $77,456,000, compared to $77,949,000 in the previous quarter and $71,167,000 in the same quarter last year, reflecting a year-over-year increase of 8.8%[22] Cash Flow and Assets - Cash flow from operations for Q4 2024 was $20.6 million, down from $25.6 million in Q4 2023[3] - Cash provided by operating activities for the fourth quarter was $20,640,000, a substantial increase from $10,578,000 in the previous quarter but a decrease from $25,587,000 in the same quarter last year[22] - The company reported total assets of $191.877 million as of December 27, 2024, compared to $181.428 million a year earlier, representing a growth of 5.5%[13] - Total liabilities decreased to $76.303 million from $91.348 million, a reduction of 16.5% year-over-year[13] - Cash and cash equivalents decreased to $16.366 million from $20.957 million, a decline of 22%[13] Shareholder Returns - The board approved a 9% increase in the annual dividend from $0.44 to $0.48 per share, with a quarterly dividend of $0.12 to be paid on April 4, 2025[4] - The company repurchased 117,000 shares at an average price of $30.95, totaling $3.6 million, with remaining authorization of $27.5 million[4] - The company repurchased 117,000 shares at an average price of $30.95, totaling $3,630,000, compared to 65,000 shares at $26.77 in the previous quarter[22] - Remaining plan authorization for share repurchases increased to $27,516,000 from $11,146,000 in the previous quarter, indicating a strong capacity for future buybacks[22] Segment Performance - Segment profit for Global S&BT was $14.688 million, up from $13.506 million year-over-year, while Oracle Solutions segment profit decreased to $2.959 million from $4.094 million[14] - SAP Solutions segment revenue increased significantly to $17.184 million from $11.243 million, with segment profit rising to $6.910 million from $3.439 million[14] - The Oracle Solutions segment reported total revenue of $18,174,000, down 20.3% from $22,759,000 in the previous quarter but consistent with $18,998,000 in the same quarter last year[22] - The SAP Solutions segment achieved total revenue of $17,184,000, a significant increase of 32.5% from $12,953,000 in the previous quarter and an increase of 52.4% from $11,243,000 in the same quarter last year[22] Future Outlook - The company expects total revenue before reimbursements for Q1 2025 to be between $75.0 million and $76.5 million[7] - Adjusted diluted earnings per share for Q1 2025 is estimated to be in the range of $0.39 to $0.41[7] Workforce and Operational Metrics - Consultant headcount increased to 1,284, up from 1,262 in the previous quarter and 1,168 in the same quarter last year, indicating growth in workforce[22] - Days sales outstanding (DSO) improved to 66 days, down from 70 days in the previous quarter and consistent with 65 days in the same quarter last year[22] Strategic Initiatives - The acquisition of LeewayHertz enhances the company's Gen AI consulting and implementation capabilities, supported by AI XPLR and ZBrain platforms[2] - The company is set to release AI XPLR version 3, which will provide industry-specific dynamic simulations for Gen AI solutions[2]

DENVER, Feb. 05, 2025 (GLOBE NEWSWIRE) -- Employ Inc., a leading provider of people-first recruiting and talent acquisition solutions including JazzHR, Lever and Jobvite, today announces its inclusion in the Hackett Group® Digital World Class® Matrix focused on the talent acquisition software marketplace. The Talent Acquisition Digital World Class® Matrix provides an in-depth guide to some of the biggest talent acquisition technology providers and how their solutions impact companies’ operations, recruiting ...

He also leads the investing group IPO Edge , which offers actionable information on growth stocks through first-look IPO filings, previews on upcoming IPOs, an IPO calendar for tracking what’s on the horizon, a database of U.S. IPOs, and a guide to IPO investing to walk you through the entire IPO lifecycle - from filing to listing to quiet period and lockup expiration dates.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to init ...

Financial Data and Key Metrics Changes - Total revenues for Q3 2024 were $79.8 million, exceeding quarterly guidance, with adjusted earnings per share of $0.43, also above expectations [8][35] - Adjusted net income for Q3 2024 was $12.1 million, or adjusted diluted net income per common share of $0.43, compared to $0.41 in the prior year [35] - Total company adjusted gross margin on revenues before reimbursements was 43.2%, up from 42.5% in the prior year [31] - GAAP net income for Q3 2024 was $8.6 million, or diluted earnings per share of $0.31, down from $9.4 million or $0.34 in the prior year [33] Business Line Data and Key Metrics Changes - Global S&BT segment revenues were $44.1 million, essentially flat year-over-year, with GenAI consulting growth offset by weakness in e-procurement [26] - Oracle Solutions segment revenues were $22.8 million, a 7% increase year-over-year, continuing strong momentum since early 2023 [27] - SAP Solutions segment revenues were $13 million, a 17% increase year-over-year, driven by strong software-related sales [28] Market Data and Key Metrics Changes - Approximately 22% of total company revenues before reimbursements consisted of recurring, multi-year, and subscription-based revenues [28] - The company’s cash balances decreased to $10 million from $19.1 million in the previous quarter [38] - Days sales outstanding (DSO) was 70 days, compared to 68 days in the previous quarter and 75 days in the prior year [39] Company Strategy and Development Direction - The company is focusing on GenAI as a generational opportunity, with significant investments in AI Explorer and the recent acquisition of LeewayHertz to enhance capabilities [10][48] - The strategic acquisition of LeewayHertz is expected to accelerate GenAI initiatives and expand the company’s service offerings [14][48] - The company aims to integrate GenAI capabilities across all offerings, enhancing the value of its IP and aligning with emerging performance standards [51][52] Management's Comments on Operating Environment and Future Outlook - Management expects client program budgets for GenAI solutions to increase significantly in 2025, moving from awareness to budgeted projects [46][47] - The demand for digital transformation remains strong, although organizations are being cautious due to economic concerns [45] - The company anticipates total revenue before reimbursements for Q4 2024 to be in the range of $73.5 to $75 million, reflecting a 3% to 5% year-over-year growth [42][43] Other Important Information - The company repurchased 71,000 shares at an average price of $26.66 per share during the quarter [40] - A $20 million increase in the company's share purchase authorization was approved by the board of directors [41] - The company declared a quarterly dividend of $0.11 per share, payable on January 3, 2025 [41] Q&A Session Summary Question: Can you walk through Version 2.0 and its impact on the pipeline? - Management noted that Version 2.0 has significantly improved conversion rates and client engagement, with a focus on detailed feasibility and impact presentations [58][60][63] Question: What does the increase in IT budgets for AI initiatives in 2025 look like? - Management expects a marked increase in client engagement and revenues as organizations move from awareness to implementation of AI solutions [64][66] Question: How do conversations with clients differ post-acquisition of LeewayHertz? - Conversations have become more focused and demanding, requiring strong AI leadership from clients to engage effectively [72][76] Question: What are the plans for scaling implementation capabilities? - The company plans to aggressively double its GenAI implementation resources following the LeewayHertz acquisition [78] Question: What updates can you provide on the market intelligence side? - A key hire returning from a non-compete agreement is expected to impact the market intelligence program positively [79] Question: What should be expected on the e-procurement side? - Management indicated that the current weakness in e-procurement will not have a year-over-year impact after Q1 [80]

Hackett Group (HCKT) came out with quarterly earnings of $0.43 per share, beating the Zacks Consensus Estimate of $0.40 per share. This compares to earnings of $0.41 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 7.50%. A quarter ago, it was expected that this consulting company would post earnings of $0.38 per share when it actually produced earnings of $0.39, delivering a surprise of 2.63%.Over the last four quarters, the c ...

Group 1 - Hackett Group reported quarterly earnings of $0.39 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, with an earnings surprise of 2.63% [1] - The company achieved revenues of $75.9 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 2.35% and showing a slight increase from $75.64 million year-over-year [2] - Hackett Group has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Group 2 - The stock has gained approximately 10.9% since the beginning of the year, outperforming the S&P 500's gain of 8.7% [3] - The future performance of Hackett Group's stock will largely depend on management's commentary during the earnings call and the outlook for earnings estimates [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.41 on revenues of $76.4 million, and for the current fiscal year, it is $1.57 on revenues of $300.75 million [7] Group 3 - The Consulting Services industry, to which Hackett Group belongs, is currently ranked in the top 36% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Hackett Group's stock performance [5]