Resources Connection (RGP) Q2 2026 earnings summary

Executive summary

• Revenue declined 19.2% year-over-year to $117.7 million, with a net loss of $12.7 million, reflecting lower billable hours, challenging market conditions, and leadership transition costs.

• Adjusted EBITDA margin was 3.4% for the quarter, down from 6.6% in the prior year.

• Leadership transition completed with a new CEO, incurring related severance and transition costs.

• Strategic priorities include cost alignment, refocusing on-demand offerings, scaling consulting, and integrating AI and automation.

• Cash dividends of $0.07 per share were declared.

Financial highlights

• Q2 consolidated revenue was $117.7 million, down 18.4%–19.2% year-over-year on a constant currency basis.

• Gross margin was 37.1%, impacted by higher healthcare costs, holiday pay, and lower consultant utilization.

• Adjusted EBITDA reached $4 million (3.4% margin), exceeding expectations despite lower revenue.

• GAAP net loss was $12.7 million, including $11.9 million in one-time CEO transition and reduction in force expenses.

• Cash and cash equivalents at quarter-end: $89.8 million; no outstanding debt.

Outlook and guidance

• Q3 revenue expected between $105 million and $110 million, reflecting seasonality and pipeline trends.

• Gross margin guidance for Q3 is 35%-36%, with SG&A expected at $40 million-$42 million, plus $6 million-$7 million in non-cash and restructuring costs.

• Ongoing transformation initiative aims to reduce annual SG&A run rate by $6–8 million, with further cost actions expected through fiscal 2026.

• Management expects continued revenue pressure due to elongated sales cycles and macroeconomic uncertainty, but is focused on value-based pricing and operational efficiency.