Company Performance - Resources Connection Inc (NASDAQ: RGP) has experienced declining revenue and a significant drop in stock performance over the past few years [1] - The company faces intense competition from gig platforms such as Upwork and Fiverr, which are impacting its market share [1] - The rise of AI technology is further challenging the company by automating tasks traditionally handled by its services [1] Industry and Market Focus - Grassroots Trading focuses on providing objective, unbiased, and data-driven research, particularly for small- to mid-cap companies [1] - The platform aims to highlight investment opportunities in these often-overlooked segments of the market [1] - Grassroots Trading also periodically identifies potential opportunities in large- and mega-cap companies to offer comprehensive coverage of the equity markets [1]

Business Segment Reorganization and Financial Recast - The company reorganized its business segments in Q1 fiscal 2025, resulting in new reportable segments: On-Demand Talent, Consulting, Outsourced Services, Europe and Asia Pacific, and All Other[4] - Recast segment revenue, adjusted EBITDA, and average bill rate for fiscal 2024 quarters are included in the investor presentation and Exhibit 99.1 to assist in reviewing fiscal 2025 financial results[6] - The recast of financial information does not affect the company's reported net income, earnings per share, total assets, or stockholders' equity for any previously reported periods[6] - The investor relations presentation with recasted financial information was posted on October 3, 2024, on the company's investor relations website[6] - The recast financial information is not considered a restatement of previously issued financial statements[6] Company Information and Stock Details - The company's common stock is registered on the Nasdaq Global Select Market under the symbol RGP[1] - The company's principal executive offices are located at 17101 Armstrong Avenue, Irvine, California, 92614[2] - The company's telephone number is (714) 430-6400[2] Regulatory and Compliance Information - The company is not classified as an emerging growth company[3] - The information in Item 2.02 and Exhibit 99.1 is not deemed "filed" under Section 18 of the Securities Exchange Act of 1934[7]

Table of Contents | --- | --- | |--------------------------------------------------------------------------------------------------------|-------| | | | | UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 | | | ____________________________________________________________________________________________ FORM 10-Q | | (Mark One) xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 24, 2024 OR oTRANSITION REPORT PURSU ...

Core Insights - Resources Connection's recent quarterly earnings report revealed a significant decline in both revenue and profitability, leading to a nearly 12% drop in share price, contrasting with the flat performance of the S&P 500 index [1][2] - The company reported first-quarter fiscal 2025 revenue of approximately $137 million, a nearly 20% decrease year-over-year, and a net loss of over $5.7 million compared to a profit of $3.1 million in the same quarter last year [3][4] - The decline in revenue was primarily attributed to a 33% drop in its on-demand talent segment, which experienced a more than 30% decrease in billable hours, causing it to fall behind consulting activities in revenue generation [5] Company Performance - Resources Connection's core fundamentals fell short of analyst expectations, with projected revenue of slightly over $146 million and adjusted net income of $0.02 per share [5] - Management expressed optimism regarding a recently implemented restructuring program aimed at better aligning business segments with internal management and financial reporting, indicating a need to demonstrate effectiveness in driving growth [6]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $136.9 million, down 19% from the prior-year quarter on a same-day constant-currency basis [19] - Gross margin for the quarter was 36.5%, with adjusted EBITDA of $2.3 million, representing a 1.7% adjusted EBITDA margin [19] - Average bill rate decreased to $119 from $125 a year ago, with a competitive pricing environment impacting overall revenue [20] Business Line Data and Key Metrics Changes - On-Demand Talent segment revenue was $52.5 million, a decline of 33% year-over-year, with adjusted EBITDA margin dropping to 4.9% from 11% [22] - Consulting segment revenue was $55 million, down 3% year-over-year, with adjusted EBITDA margin slightly decreasing to 14.1% [22] - Outsourced Services segment revenue improved by 1% to $9.5 million, with adjusted EBITDA margin at 14.7% [22] - Europe and APAC segment revenue was $18 million, down 21% year-over-year, with a non-cash goodwill impairment charge of $3.9 million [23] Market Data and Key Metrics Changes - The pricing environment remains competitive, particularly in the Asia Pacific region, impacting average bill rates [20] - The US and Europe average bill rates increased by 2% and 5%, respectively, despite the overall decline [20] Company Strategy and Development Direction - The company has evolved its operating model to align strategy and execution with accountable business segments [5] - A new brand architecture has been launched to articulate the competitive advantage and broaden the addressable market [5] - The strategy includes deepening consulting capabilities and enhancing cross-selling opportunities across segments [9][15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the remainder of the fiscal year, despite a turbulent client environment [16] - There is an expectation for client demand for outside expert talent to expand as macroeconomic conditions improve [14] - The company anticipates a steady revenue run rate in Q2, projecting revenue between $135 million to $140 million [26] Other Important Information - The company maintains a strong balance sheet with $90 million in cash and cash equivalents and zero debt [25] - A focus on technology transformation and returning cash to shareholders through dividends and share buybacks is emphasized [25] Q&A Session Summary Question: Can you provide more details on the 33% year-over-year revenue decline in the On-Demand segment? - Management noted challenges in the operational accounting group, with clients preferring to retain existing employees rather than hiring new talent [28] Question: Can you quantify the growth in the pipeline and larger engagements? - The growth pipeline has increased by about 15% compared to the end of Q1 and nearly 20% compared to the end of the previous fiscal year [30] Question: Are there signs of positive momentum from clients regarding project starts after the first rate cut? - Management observed increased confidence in Europe, with project starts beginning to materialize after a slow period [31][32] Question: Which client types or industry segments are most responsive to the new segmentation updates? - The company is seeing cross-sell momentum across various sectors, not limited to any specific industry [35] Question: What is the focus regarding acquisition opportunities? - The current focus is on integrating recent acquisitions while remaining opportunistic about future acquisition targets [38]

Resources Connection (RGP) reported break-even quarterly earnings per share versus the Zacks Consensus Estimate of $0.04. This compares to earnings of $0.20 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of -100%. A quarter ago, it was expected that this consulting company would post earnings of $0.10 per share when it actually produced earnings of $0.28, delivering a surprise of 180%. Over the last four quarters, the company ha ...

Wall Street expects a year-over-year decline in earnings on lower revenues when Resources Connection (RGP) reports results for the quarter ended August 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on October 1, 2024, might help the stock move higher if these key numbers are better t ...

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits. One stock to keep an eye on is Resources Connection (RGP) . RGP is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.43, which compares to its industry's average of 15.87. ...

As noted above, in November 2023, we acquired CloudGo. Headquartered in Singapore, CloudGo is a digital transformation firm and a fast growing Elite ServiceNow Partner. CloudGo has been integrated into Veracity's digital business and we believe that it will continue to accelerate the expansion of our digital presence across the Asia Pacific region. See Note 3 – Acquisitions and Dispositions in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report on Form 10-K for f ...

Resources Connection, Inc. (NASDAQ:RGP) Q4 2024 Earnings Conference Call July 18, 2024 5:00 PM ET Company Participants Kate Duchene - Chief Executive Officer Bhadresh Patel - Chief Operating Officer Jenn Ryu - Chief Financial Officer Conference Call Participants Joe Gomes - Noble Capital Markets Andrew Steinerman - JPMorgan Mark Marcon - Baird Operator Good afternoon, ladies and gentlemen, and welcome to the Resources Connections, Inc. Conference Call. Currently, all participants are in a listen-only mode. ...