The Hackett Group First Quarter 2025 Earnings Release Overview and CEO Commentary 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 guidance3 - The company is aggressively investing in its Gen AI platforms, highlighted by the release of AI XPLR version 33 - Management anticipates AI innovation will foster key channel partnerships and accelerate growth in the AI sector3 Q1 2025 Financial Highlights 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 expenses6 Q2 2025 Business Outlook 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 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, 20256 - In Q1 2025, the company repurchased 379,000 shares for $11.7 million6 - As of March 28, 2025, cash balance was $9.2 million, with $18.0 million outstanding on its credit facility6 Consolidated Financial Statements 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 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 202514 Condensed Consolidated Balance Sheets 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 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 margin16 Reconciliation of GAAP to Non-GAAP Measures 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 comparison919 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 share21 Supplemental Information 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. ET78 - The report contains forward-looking statements subject to risks and uncertainties, and the company disclaims any duty to update them12 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 |
The Hackett Group(HCKT) - 2025 Q1 - Quarterly Results