Resources Connection (RGP) investor relations material

Executive summary

• Q1 revenue, gross margin, and SG&A all exceeded outlook, with profitability improving and net loss narrowing to $2.4 million from $5.7 million year-over-year.

• Transformation strategy emphasizes integration, diversification, resilience, and business transformation, with strong progress in Europe, Asia-Pacific, and outsourced services.

• Strategic focus includes CFO advisory, digital transformation, cross-selling, value-based pricing, and leveraging a global talent network.

• Ongoing cost structure optimization and SG&A reductions support profitability and operational efficiency.

• Net loss for the quarter was $2.4 million, with adjusted diluted EPS improving to $0.03 from break-even.

Financial highlights

• Q1 revenue: $120.2 million, down 12.2% year-over-year; gross margin: 39.5% (up from 36.5%); SG&A: $44.5–$47.9 million, all above outlook.

• Adjusted EBITDA: $3.1 million (2.5% margin), up from $2.3 million (1.7% margin) year-over-year.

• Cash and equivalents: $77.5 million at quarter-end; no outstanding debt; $2.3 million in quarterly dividends paid.

• Europe & Asia-Pacific revenue grew 10.6% to $19.9 million; Outsourced Services revenue up 5.3% to $10.0 million.

• Consulting and On-Demand Talent revenues declined year-over-year, but both improved margins due to cost reductions.

Outlook and guidance

• Q2 revenue expected between $115 million and $120 million; gross margin outlook 38%-39%.

• SG&A expense projected at $43 million-$45 million, reflecting cost savings from recent reductions.

• Revenue stability anticipated in Q2, with continued pipeline momentum and focus on sales execution.

• Management expects continued macroeconomic uncertainty and client caution to impact demand.

• Global reduction in management and administrative workforce initiated post-quarter, with $2.1 million in estimated restructuring charges in Q2.