Resources Connection (RGP) Q1 2027 earnings summary

Executive summary

• Q1 FY27 revenue was $98.1M, down 18.4% YoY on a same-day constant-currency basis; lower project volume, billable hours and Consulting utilization pressured results.

• Net loss widened to $8.0M from $2.4M, and Adjusted EBITDA swung to a $3.6M loss from $3.1M income.

• Priorities include improving sales execution and conversion, Consulting staffing and utilization, and cost efficiency; pricing discipline and strategic-client performance were positive indicators.

Financial highlights

• Revenue was $98.1M vs. $120.2M; gross profit was $36.7M vs. $47.5M.

• Gross margin was 37.4% vs. 39.5%, primarily reflecting lower salaried-consultant utilization and less favorable indirect service-cost leverage.

• GAAP SG&A was $43.1M vs. $47.9M; adjusted SG&A was $40.3M vs. $44.5M, better than July outlook.

• Adjusted EBITDA was $(3.6)M, with a (3.7%) margin, vs. $3.1M and a 2.5% margin; diluted loss per share was $0.23 vs. $0.07.

• Operating cash outflow was $18.9M vs. $7.8M, including $12.0M in annual incentive payouts and $3.9M in executive-transition and restructuring payments.

Outlook and guidance

• Q2 revenue is expected at $95M-$100M; gross margin is guided to 36%-37%, including the Thanksgiving holiday impact.

• Q2 run-rate SG&A is expected at $40M-$42M; non-run-rate and non-cash expenses are forecast at $2M-$3M.

• Management expects stabilization and potential sequential growth, while noting recovery remains uncertain; sales hires are ramping as expected.

• Transformation efforts are expected to be substantially complete in FY27; phased investments are expanding sales capacity and Consulting capabilities.