Resources Connection (RGP) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $107.9 million, down 16.6% year-over-year, with gross margin improving to 35.7% from 35.1%.

• Net loss for the quarter was $9.5 million, improved from $44.1 million in the prior year; nine-month net loss was $24.5 million, improved from $118.5 million loss year-over-year.

• Strategic priorities included cost reduction initiatives, workforce reductions, office space subleasing, and streamlining operations, including the sale of the Sitrick crisis communications business.

• Leadership changes included CEO and COO transitions, with related severance and accelerated equity vesting expenses, and key hires in AI and IT.

• Integration of Reference Point into the consulting segment was substantially completed.

Financial highlights

• Consolidated revenue for Q3 was $107.9 million, down 19.6% year-over-year on a same-day constant currency basis.

• Gross margin improved to 35.7%, up from 35.1% in the prior year quarter.

• Adjusted EBITDA for the quarter was -$1.4 million, with margin of -1.3%; net loss margin improved to 8.8%.

• SG&A expenses improved to $45.8 million from $51.2 million; adjusted SG&A was $39.4 million from $43.7 million.

• Ended the quarter with $82.8 million in cash and no outstanding debt.

Outlook and guidance

• Q4 revenue expected between $104 million and $109 million; gross margin projected at 36.5%-37.5%.

• Run rate SG&A for Q4 expected between $39 million and $41 million; non-run rate and non-cash expenses for Q4 expected at $13 million-$15 million, mainly from Sitrick disposition and separation costs.

• Fiscal 2027 expected to show revenue growth over fiscal 2026, with growth likely in the latter half of the year.

• Transformation efforts to reduce cost structure are expected to be substantially complete by Q1 fiscal 2027.

• Management expects continued variability in demand due to macroeconomic uncertainty and selective client spending.