Resources nection(US:RGP)2026-01-07 22:06Financial Performance - Revenue for Q2 fiscal 2026 was $117.7 million, a decrease of 18.4% from $145.6 million in Q2 fiscal 2025[4] - Gross margin decreased to 37.1% in Q2 fiscal 2026 from 38.5% in Q2 fiscal 2025[5] - Net loss for Q2 fiscal 2026 was $12.7 million, with a net loss margin of 10.8%, compared to a net loss of $68.7 million and a margin of 47.2% in the prior year[9] - Adjusted EBITDA for Q2 fiscal 2026 was $4.0 million, with an Adjusted EBITDA margin of 3.4%, down from $9.7 million and a margin of 6.6% in the prior year[7] - Total consolidated revenue for the three months ended November 29, 2025, was $117,732,000, down from $145,618,000 in the same period last year, representing a year-over-year decline of approximately 19%[28] - Total consolidated revenue for the six months ended November 29, 2025, was $237,961,000, compared to $282,553,000 in the same period last year, a decline of about 16%[28] - Adjusted EBITDA for the three months ended November 29, 2025, was $4,045, representing 3.4% of revenue, compared to $9,656 or 6.6% for the same period in 2024[32] - The net loss for the six months ended November 29, 2025, was $15,066, which is 6.3% of revenue, compared to a net loss of $74,422 or 26.3% for the same period in 2024[33] - The net loss for the three months ended November 29, 2025, was $12,661, representing 10.8% of revenue, compared to a net loss of $68,715 or 47.2% for the same period in 2024[32] Segment Performance - Revenue in the On-Demand Talent segment was $43.0 million, a decline of 18.4% year-over-year[10] - Consulting segment revenue decreased to $42.6 million, down 28.8% year-over-year due to a 33.8% decrease in billable hours[11] - Revenue in the Europe & Asia Pacific segment grew to $20.1 million, an increase of 0.6% year-over-year, driven by higher average bill rates[12] - Consulting segment revenue for the three months ended November 29, 2025, was $42,613,000, down from $60,643,000 in the prior year, indicating a decrease of approximately 30%[28] Expenses and Costs - SG&A expenses increased to $54.4 million, or 46.2% of revenue, compared to $51.3 million, or 35.2% of revenue in the prior year[6] - Stock-based compensation expense for the three months ended November 29, 2025, was $1,625, accounting for 1.4% of revenue, compared to $1,948 or 1.3% for the same period in 2024[32] - CEO transition costs for the three months ended November 29, 2025, amounted to $9,029, which is 7.7% of revenue[32] - Restructuring costs for the three months ended November 29, 2025, were $2,894, accounting for 2.5% of revenue[32] - SG&A expenses for the three months ended November 29, 2025, were $54,394,000, an increase from $51,305,000 for the same period in 2024, representing a growth of 4.1%[34] - Adjusted SG&A expenses decreased to $39,670,000 for the three months ended November 29, 2025, compared to $46,500,000 for the same period in 2024, a reduction of 14.0%[34] Cash Flow and Assets - Cash flow from operating activities increased significantly to $8,059,000 for the three months ended November 29, 2025, compared to $1,490,000 for the same period in 2024, marking a growth of 440.5%[39] - Cash flow from investing activities was $(442,000) for the three months ended November 29, 2025, a significant improvement compared to $(12,662,000) for the same period in 2024[39] - The total assets decreased to $289,273,000 as of November 29, 2025, from $304,688,000 as of May 31, 2025, a decline of 5.1%[39] - The total stockholders' equity decreased to $194,587,000 as of November 29, 2025, down from $207,081,000 as of May 31, 2025, a decrease of 6.0%[39] Strategic Focus and Risks - The company plans to refocus its On-Demand offerings and scale its Consulting business to align with evolving client needs[3] - The company is focusing on digital expansion and technology transformation efforts, which are critical for future growth[23] - Risks include potential adverse effects from economic downturns and the competitive nature of the professional services market, which could impact financial performance[23] - The company emphasizes the importance of non-GAAP financial measures to provide clarity on core performance, which may differ from GAAP measures[25] Other Financial Metrics - The average bill rate for the consolidated segment was $122 for the three months ended November 29, 2025, slightly down from $123 for the same period in 2024[38] - The average pay rate for consultants was $58 for the three months ended November 29, 2025, down from $59 for the same period in 2024[39] - The agile consultant headcount on assignment decreased to 2,288 as of November 29, 2025, compared to 2,758 for the same period in 2024, a reduction of 17.0%[39] - Goodwill impairment for the three months ended November 23, 2024, was $79,482, representing 54.6% of revenue[32] - Amortization expense for the six months ended November 29, 2025, was $2,336, accounting for 1.0% of revenue, compared to $3,054 or 1.1% for the same period in 2024[33] - Interest income, net for the six months ended November 29, 2025, was $(170), which is (0.1%) of revenue, compared to $(363) or (0.1%) for the same period in 2024[33]