UK-based accountancy and advisory services provider Dains has announced its expansion to the North West market with the acquisition of peer company Hurst. Hurst is headquartered at Stockport Exchange and works with clients across the UK as well as in overseas markets. It is led by managing partner Tim Potter, together with Mike Jackson and Simon Brownbill. Hurst has a team of 120 professionals and provides services spanning audit, tax advisory, corporate finance and digital transformation. Under the d ...

Summary of 4Q25 CIO Survey – Key Points Industry Overview - The survey focuses on the **US Tech** industry, particularly the **IT budget outlook** for 2026, highlighting trends in **Software**, **Communications**, **Hardware**, and **IT Services** sectors [2][40]. Core Insights 1. **IT Budget Growth Expectations**: - IT budget growth is expected to moderate from **+3.5% in 2025 to +3.4% in 2026**, a decline of **8 basis points** [2][40]. - Sequentially, the growth expectation for 2026 deteriorated from **+3.8% YoY** in the previous quarter [2][40]. 2. **Sector-Specific Trends**: - **Software**: Expected to see a modest acceleration in growth to **+3.8%** in 2026, up **9 basis points YoY** [2][40]. - **Communications**: Growth is expected to decelerate to **+2.2%**, down **27 basis points YoY** [2][40]. - **Hardware**: Anticipated growth is only **+1.0%**, a significant drop of **58 basis points YoY** [2][40]. - **IT Services**: Expected to grow by **+2.0%**, a slight decrease of **3 basis points YoY** [2][40]. 3. **Regional Insights**: - US CIOs expect budget growth of **+3.5%**, while EU counterparts anticipate **+3.1%**, indicating a narrowing gap between the two regions [2][40]. 4. **CIO Sentiment**: - The **1-year up-to-down ratio** for budget revisions fell to **0.5x**, indicating a more cautious outlook among CIOs [2][40]. - The percentage of CIOs expecting budget increases dropped to **17%**, while those expecting decreases rose to **36%** [2][40]. 5. **AI and IT Spending**: - **Artificial Intelligence** remains the top priority for CIOs, with **68%** planning to engage service providers for AI projects [40]. - **81%** of CIOs expect to have GenAI-based workloads in production by the end of 2026, up from **79%** in the previous quarter [40][37]. Additional Insights 1. **Hiring Expectations**: - **33%** of CIOs expect overall hiring to decrease in 2026, while **18%** expect an increase, reflecting a cautious hiring outlook [6][40]. - **63%** of CIOs believe AI-related IT spending will impact hiring plans, with a significant portion expecting hiring to decrease [6][40]. 2. **K-Shaped IT Budget**: - CIOs may be reallocating budgets from less strategic areas to prioritize AI-related investments, indicating a shift in spending dynamics [6][40]. 3. **Vendor Insights**: - Microsoft, Google, and Amazon are expected to gain the largest incremental share of GenAI spend in 2026, with Microsoft leading at **35%** [8][11][40]. - The survey indicates a trend towards consolidating IT spending with fewer vendors, particularly in software [6][40]. 4. **Concerns Over Hardware Spending**: - Hardware budgets are projected to grow at the slowest rate since 2009, raising concerns about potential demand destruction in the sector [18][40]. 5. **Long-Term Outlook**: - CIOs' confidence in the long-term spending environment has moderated, with only **38%** expecting IT spending as a percentage of revenue to increase over the next three years [40]. Conclusion The 4Q25 CIO Survey indicates a cautious outlook for IT budgets in 2026, with sector-specific deceleration, particularly in Hardware and Communications. Despite the excitement surrounding AI, the anticipated growth in IT budgets does not fully align with expectations, suggesting a need for strategic reallocations and a focus on consolidating vendor relationships.

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 was approximately $117.7 million, reflecting an 18.4% decline year-over-year on a constant currency basis [19][20] - Adjusted EBITDA was $4 million, resulting in a 3.4% adjusted EBITDA margin, despite a GAAP net loss of $12.7 million due to one-time expenses [19][20] - Gross margin decreased to 37.1% from 38.5% in the prior year, impacted by healthcare costs and holiday pay [20][21] Business Line Data and Key Metrics Changes - On-demand segment revenue was $43 million, down 18.4% year-over-year, with segment-adjusted EBITDA at $4.1 million, a margin of 9.5% [25] - Consulting segment revenue declined 28.8% to $42.6 million, with segment-adjusted EBITDA at $4.5 million, a margin of 10.4% [25] - Europe and Asia Pac segment revenue grew 0.6% to $20.1 million, maintaining stable gross margins [25][26] Market Data and Key Metrics Changes - North America saw improved pipeline activity due to expanded go-to-market initiatives, while Europe and Asia Pac segments delivered growth [12][17] - Outsourced services revenue remained steady year-over-year at $9.4 million, with improved gross margins [26] Company Strategy and Development Direction - The company aims to align its cost structure with current revenue levels, refocus on-demand offerings, and scale its consulting business [6][7] - Emphasis on providing relevant skills and solutions to clients at competitive prices to enhance value [6][9] - The integration of Reference Point is expected to enhance collaboration and strengthen focus on CFO Advisory and Digital Transformation [13][14] Management's Comments on Operating Environment and Future Outlook - The management acknowledges a challenging market but believes in the potential for growth due to a large market of client needs [6][11] - Future strategies will focus on improving sales execution and optimizing talent to meet client demands [51][52] - The company expects Q3 revenue to be between $105-$110 million, with gross margins projected at 35%-36% [27][28] Other Important Information - The company has a strong balance sheet with $89.8 million in cash and no outstanding debt, allowing for balanced capital allocation [26] - A reduction in force was executed, impacting 5% of management and administrative headcount, expected to yield annual savings of $6-$8 million [22][23] Q&A Session Summary Question: Areas where AI is impacting finance and accounting roles - Management noted that operational accounting roles are most affected by AI and automation, with ongoing experimentation by clients [31][33] Question: Impact of AI on decision-making - Management clarified that while AI is causing clients to reassess roles, it is not significantly delaying decisions [57][59] Question: Clarification on SG&A expenses - SG&A expenses for Q3 are expected to be $40-$42 million, excluding $6-$7 million in non-cash and restructuring costs [47][49] Question: Impact of healthcare costs on margins - Healthcare costs had a significant impact, estimated at over $1 million, affecting both SG&A and gross margins [48][62] Question: Broader strategic focus for the next 12-24 months - The company will focus on aligning cost structures, enhancing on-demand services, and growing the consulting segment [51][52]

Core Insights - Boston Partners increased its stake in The Hackett Group by 1.8%, owning 533,948 shares valued at $13,305,000, representing 1.94% of the company [2] - Several hedge funds have modified their holdings, with Quaker Wealth Management increasing its stake by 200% and Copeland Capital Management acquiring a new stake valued at approximately $65,000 [3] - The Hackett Group has received mixed ratings from analysts, with an average rating of "Moderate Buy" and a consensus target price of $27.00 [4] Company Performance - The Hackett Group's stock opened at $18.46, with a market capitalization of $500.70 million, a price-to-earnings ratio of 30.76, and a 12-month high of $34.02 [5] - The company has a current ratio and quick ratio of 1.71, and a debt-to-equity ratio of 0.19 [5] Dividend Information - The Hackett Group announced a quarterly dividend of $0.12, with an annualized dividend of $0.48, resulting in a dividend yield of 2.6% [6] Company Overview - The Hackett Group operates as an intellectual property-based executive advisory and consulting firm, focusing on global strategy, business transformation, and digital solutions [7]

Core Insights - The company is focused on transforming its business model to integrate consulting, professional staffing, and outsourced services, aiming to enhance value for clients and shareholders [2][4][16] - The consulting segment is experiencing double-digit fill rate improvements, increasing deal sizes, and a growing pipeline, indicating positive momentum [2][18] - The company reported Q1 revenue of $120.2 million, exceeding expectations, with a gross margin of 39.5% and improved adjusted EBITDA of $3.1 million [28][29] Business Transformation - The company is evolving from a professional staffing organization to a diversified platform that combines on-demand talent with consulting and outsourced services [2][12] - Key focus areas include CFO advisory and digital transformation, which are aligned with client priorities for cost efficiency and process automation [6][18] - The company is actively upskilling its talent to meet the specialized needs of clients in high-demand areas such as finance transformation and AI [7][12] Financial Performance - Q1 revenue exceeded the outlook range, with significant improvements in gross margin and general & administrative expenses [4][28] - The consulting segment saw a year-over-year revenue decline of 22%, but improvements in bill rates and utilization were noted [19][32] - The Europe and Asia-Pacific segments delivered 5% and 4% revenue growth, respectively, indicating strong regional performance [28][33] Market Positioning - The company differentiates itself through a client-centric approach, integrating with client teams to provide tailored solutions rather than acting as an external advisor [10][11] - The diversified services model allows clients flexibility in engagement, which is increasingly important in today's market [5][7] - The company is capitalizing on the demand for outsourced services, particularly targeting startups and scale-ups in the AI sector [26][27] Future Outlook - The company anticipates continued revenue stability in Q2, with a forecast range of $115 to $120 million, while maintaining a gross margin outlook of 38% to 39% [36][37] - Ongoing cost reduction efforts are expected to yield annual savings of $6 to $8 million, enhancing operating leverage [31][34] - The company is well-positioned to rebound quickly as the demand environment improves, aiming for a return to double-digit profitability [15][36]

Core Insights - Heidrick & Struggles International, Inc. (HSII) shares increased by 19.6% following the announcement of a definitive agreement for acquisition by a private investment consortium valued at approximately $1.3 billion, with an all-cash offer of $59 per share, representing a significant premium over the previous closing price [1][8] - The acquisition is seen as a major milestone in HSII's transformation from a traditional executive search firm to a broader leadership advisory firm, emphasizing its strong presence in organizational consulting and talent solutions [1][8] Company Performance - HSII has diversified its offerings to include digital transformation and talent analytics, enhancing its competitive position against larger rivals like Korn Ferry and ManpowerGroup [2] - Over the past year, HSII's stock has risen by 58.5%, outperforming its peer group's growth of 18.7% [2] Financial Outlook - The expected earnings growth rate for HSII in the next year is 17.6%, with the Zacks Consensus Estimate for current-year earnings improving by 2.4% over the last 60 days [3] Market Reaction - The acquisition is interpreted as a sign of continued private equity interest in professional services and human capital businesses, particularly those with strong client relationships [4] - HSII's stock opened higher and maintained gains throughout the trading session, contrasting with mixed results in the broader market [4] Transaction Details - The transaction has been unanimously approved by HSII's board of directors and is expected to close in the first half of 2026, pending regulatory approvals [5] - Upon completion, HSII will become a privately held entity, and its shares will be delisted from the Nasdaq [5] Industry Trends - The sharp increase in HSII's stock reflects investor appetite for merger and acquisition activity amid market volatility, indicating that strategic investors are willing to pay a premium for established business models in the consulting sector [6]