The Hackett Group (HCKT) investor relations material

Executive summary

• Q3 total revenue was $69.8M, down from $73.1M YoY; revenue before reimbursements was $68.9M. Adjusted diluted EPS was $0.39, at the high end of guidance.

• GAAP net income rose to $3.6M from $2.5M, while adjusted EPS increased to $0.39 from $0.37.

• XT and AIX adoption is beginning to improve delivery productivity; management targets net revenue growth as early as 2027.

Financial highlights

• Adjusted gross margin was 44.9%, up from 44.1% in Q2 and 42.6% in Q3 2025; adjusted EBITDA was $15.4M, or 22.4% of revenue before reimbursements.

• Adjusted SG&A was $16.6M, or 24.1% of revenue before reimbursements, down from $17.4M and 25.5% in Q2, primarily reflecting AI transition productivity actions.

• GAAP operating income rose to $7.5M from $5.5M; diluted EPS was $0.14 versus $0.09 in Q3 2025.

• Adjusted net income was $9.7M versus $10.2M YoY; adjusted diluted EPS was $0.39 versus $0.37.

• Adjusted results exclude stock compensation, acquisition-related items, amortization, restructuring and other non-recurring costs.

Outlook and guidance

• Q4 revenue before reimbursements is forecast at $68M–$70M and adjusted diluted EPS at $0.39–$0.41, assuming a 26.5% GAAP effective tax rate on adjusted earnings.

• Q4 adjusted gross margin is expected near 48.5% at the midpoint, with adjusted EBITDA margin forecast at ~23%–24%.

• The 14-week fiscal Q4 is expected to reduce adjusted diluted EPS by ~$0.03 due to payroll costs and limited holiday-week revenue; this impact is included in guidance.

• Q4 includes an expected ~$1M AI transition charge; adjusted SG&A and interest expense are forecast at ~$19.8M combined.

• Q4 operating cash flow is expected at $15M–$20M, with accounts receivable expected to decline by $4M–$5M.