Resources nection(RGP) - 2025 Q2 - Quarterly Results

Financial Performance - Revenue for Q2 fiscal 2025 was $145.6 million, a decline of 10.7% from $163.1 million in Q2 fiscal 2024[2] - Net loss was $68.7 million, resulting in a net loss margin of 47.2%, compared to a net income of $4.9 million (3.0% margin) in the prior year quarter[5] - Adjusted EBITDA was $9.7 million, with an Adjusted EBITDA margin of 6.6%, down from $16.1 million (9.8% margin) in the prior year[2] - Gross profit for the six months ended November 23, 2024, was $106,073, down 18.7% from $130,477 for the same period in 2023[25] - The net loss for the three months ended November 25, 2023, was $68,715, compared to a net income of $4,895 for the same period in the previous year[45] - For the six months ended November 25, 2023, the company reported a net loss of $74,422,000, a decrease of 26.3% compared to a net income of $8,012,000 in the same period last year[66] - Adjusted EBITDA for the six months ended November 25, 2023, was $11,976,000, representing 4.2% of revenue, compared to $27,607,000 or 8.3% of revenue in the prior year[66] Segment Performance - Consulting segment revenue increased by $1.6 million (2.7%) to $60.6 million, driven by a 6.2% increase in average bill rate[6] - On-Demand Talent segment revenue declined by $17.5 million (24.7%) to $53.5 million, primarily due to a 21.7% decrease in billable hours[14] - Europe and Asia Pacific segment revenue decreased by $2.1 million (9.6%) to $19.7 million, with billable hours down by 5.3%[15] - On-Demand Talent segment revenue for the three months ended November 23, 2024, was $53,452, a decrease of 24.8% from $70,949 in the same period last year[32] - Consulting segment revenue for the six months ended November 23, 2024, was $115,668, slightly down from $115,903 for the same period in 2023[32] Expenses and Margins - SG&A expenses were $51.3 million, or 35.2% of revenue, improved from $53.0 million (32.5% of revenue) in the prior year[12] - Gross margin was 38.5%, slightly down from 38.9% in the prior year, attributed to higher pay/bill ratios and lower utilization[11] Cash and Assets - Cash and cash equivalents plus borrowings available were $251.7 million, compared to $269.4 million in the prior year, with zero debt[2] - Total assets decreased to $424,873,000 as of November 23, 2024, down from $510,914,000 as of May 25, 2024[80] - The company’s total stockholders' equity decreased to $325,677,000 as of November 23, 2024, compared to $418,763,000 as of May 25, 2024[80] Goodwill and Impairments - Goodwill impairment charge for the three months ended November 23, 2024, was $79,482, with no impairment recorded in the same period of 2023[25] - The Company experienced a goodwill impairment of $79,482 during the reporting period[45] - The company recognized goodwill impairment charges of $79,482,000 during the three months ended November 25, 2023, which accounted for 54.6% of revenue[64] Future Outlook - The company expressed cautious optimism for a stronger demand environment in the upcoming calendar year based on pipeline activities[2] - The Company served 88% of the Fortune 100 as of August 2024, indicating strong market presence[52] Restructuring and Changes - The company initiated a U.S. restructuring plan in October 2023, which was substantially completed during fiscal 2024[41] - The Company acquired Reference Point LLC on July 1, 2024, which is included in the Consulting segment[43] Shareholder Information - Cash dividends declared per common share remained stable at $0.14 for both the three months ended November 23, 2024, and November 25, 2023[25] - The company reported a weighted-average number of diluted shares outstanding of 33,901 for the three months ended November 23, 2024[25] Headcount and Rates - Consultant headcount at the end of the period was 2,639, down from 3,167 in the previous year[74] - The average bill rate for On-Demand Talent was $140 for November 2024, consistent with previous months[47] - The average bill rate increased to $123 for the six months ended November 23, 2024, compared to $122 for the same period last year[74]