This article first appeared on GuruFocus .
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Consolidated Revenue:$106.1 million, an 18.3% decline on a same-day constant currency basis compared to the prior year quarter.
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Gross Margin:37.6%, down from 40.2% in the prior year.
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Adjusted EBITDA:Negative $0.6 million for the quarter.
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On-Demand Talent Revenue:$40.4 million, an 18% decline from the prior year quarter.
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Consulting Revenue:$36.6 million, down 23% year over year.
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Europe and Asia Pacific Revenue:$17.1 million, down 14% year over year.
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Outsource Services Revenue:$10.3 million, down 1.6% year over year.
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Cash and Cash Equivalents:$82.4 million with no outstanding debt.
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Quarterly Dividend Payments:$2.3 million, representing a 6% annualized yield.
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Average Bill Rate:$120 on a constant currency basis, compared to $125 a year ago.
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Run Rate SG&A Expense:$40.5 million, a 12% improvement compared to $46.2 million in the prior year quarter.
Release Date: July 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Resources Connection Inc ( NASDAQ:RGP ) reported that their fourth quarter results were aligned with the outlook provided for revenue, gross margin, and SG&A expenses.
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The company completed a voice of the customer survey, revealing a strong net promoter score with 95% of customers indicating their intent to increase or maintain their level of engagement with RGP.
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RGP is focusing on strategic priorities such as refocusing their on-demand talent segment, scaling their consulting segment, and pursuing AI opportunities, which are expected to drive future revenue growth.
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The Asia-Pacific region delivered solid revenue performance, including year-over-year and sequential growth in China and the Philippines.
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RGP ended the quarter with a strong balance sheet, holding $82.4 million in cash and cash equivalents with no outstanding debt.
Negative Points
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Consolidated revenue for the quarter was $106.1 million, representing an 18.3% decline on a same-day constant currency basis compared to the prior year quarter.
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Revenue in Europe was softer, driven by weakness in the region, which impacted overall performance.
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Gross margin for the fourth quarter was 37.6%, down from 40.2% in the prior year, primarily due to less favorable leverage of indirect costs and lower consultant utilization.
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Adjusted EBITDA for the quarter was negative $0.6 million, indicating financial challenges.
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The company is experiencing longer sales cycles, particularly in their consulting segment, which has affected revenue conversion timelines.
Q & A Highlights
Q: Roger, regarding the four strategic priorities you've mentioned, how far along are you in terms of completion for each? A: Roger Carlile, CEO: We are mostly complete with the investments for FY27. Now, we need to see these investments pay off, which we expect in the latter half of the year. While we may see some opportunistic opportunities to invest further, the primary preparations for FY27 are largely done.
Q: What gives you confidence that the demand environment has stabilized and might improve in FY27? A: Roger Carlile, CEO: Market conditions appear stable, and our recent customer survey indicates strong client appreciation and intent to maintain or increase engagement. This stability, combined with our strategic investments, suggests we might be nearing the end of the market-driven downturn.
Q: Can you provide more details on the additional cost reductions planned for FY27? A: Jennifer Ryu, CFO: We plan to continue aligning resources with demand and reducing occupancy costs. While the cost reductions will be less significant than in the past fiscal year, we will focus on improving efficiency through system enhancements and AI integration. We expect non-run rate charges to normalize around $2 million to $3 million per quarter.
Q: What are the covenants on your new credit facility? A: Jennifer Ryu, CFO: The new facility provides more flexibility, especially for shareholder returns. It includes typical covenants on investments and loans, with two main financial covenants: a fixed charge coverage ratio and a minimum liquidity ratio. The fixed charge coverage ratio is a springing covenant, which we do not expect to come into play.
Q: How is the progress with the new sales leadership and the integration of AI into your operations? A: Roger Carlile, CEO: The new sales leadership is progressing well, with consistent processes across the US. AI is being integrated into both internal operations and client services, with a focus on improving efficiency and addressing client challenges. We believe AI will be a significant opportunity for growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
