Resources nection(US:RGP)2021-07-22 01:50Financial Data and Key Metrics Changes - Q4 revenue reached $172.3 million, reflecting a sequential improvement of 10% and returning to year-over-year growth, exceeding the high end of revenue guidance [7][43] - Adjusted EBITDA for the quarter was $20.7 million, representing a 12% margin, up 600 basis points sequentially and 160 basis points year-over-year [9][43] - Gross margin was 39.6%, down from 40.4% year-over-year, with a pay/bill ratio up 85 basis points year-over-year [49] Business Line Data and Key Metrics Changes - Professional staffing revenue grew sequentially by 4.4%, 5.5%, and 14.4% over the last three quarters, indicating a strong upward trend [45] - Veracity, the digital consulting business, grew 15% sequentially and 36% year-over-year, highlighting the success in technology and digital solutions [46] - Countsy, a finance and HR-as-a-service offering, is also experiencing growth, contributing to the overall revenue expansion [16] Market Data and Key Metrics Changes - North America revenue improved sequentially by 3.8% and 0.8% year-over-year, with growth across most solutions and industry verticals [46] - Europe revenue improved by 11.1% sequentially and 4% year-over-year, driven by a successful integrated global go-to-market approach [48] - Asia Pacific revenue returned to pre-COVID levels by the end of Q4, with a sequential improvement of 4.5% [49] Company Strategy and Development Direction - The company aims to elevate its technology infrastructure globally, focusing on upgrading core ERP and talent acquisition systems to enhance efficiency [12] - Plans to commercialize digital strategies include driving more digital transformation revenue and launching HUGO, a digital engagement platform [13][14] - The company is focused on improving adjusted EBITDA performance through disciplined management of costs and enhancing the utilization and pricing of salaried consultants [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Q1 fiscal 2022, expecting another strong quarter due to easier comparisons and improved execution capabilities [10] - Positive macro trends indicate a rebound in CEO confidence and an increase in transformation projects and capital expenditures [21] - The shift towards a more agile workforce model is expected to continue, with increased demand for variable workforce solutions [29] Other Important Information - The company reduced its cost structure by $26 million or 12% in fiscal 2021 and plans to continue eliminating expenses in a digital environment [17] - The company has a strong balance sheet, generating positive cash flow and paying down $45 million of outstanding debt [56] Q&A Session Summary Question: What is the pricing environment expected to look like in fiscal 2022? - Management indicated that while there are opportunities for higher bill rates, they are closely monitoring the pay rate side to maintain margins [66] Question: Can you break down results between project consulting and professional staffing? - The historical split is roughly 60-30, with professional staffing now at about 33% due to its growth [67] Question: How much has the pipeline grown over the past six months? - The pipeline has grown over 20% from Q2 to Q4, with conversion rates remaining consistent [69] Question: What are clients' primary digital agendas today? - Clients are focused on accelerating collaboration and automating processes, with significant demand for ServiceNow-certified personnel [72][74] Question: What is the medium-term organic revenue growth profile? - The company anticipates organic revenue growth between 8% and 14% over the next two to four years [77] Question: How is the company addressing the competitive landscape with the Big Four? - Management believes that the shift in workforce strategies will favor their flexible model over traditional partnerships [79] Question: What is the outlook for SG&A expenses? - SG&A is expected to increase due to revenue growth and travel expenses, but will remain at about 50% of pre-COVID levels [106]