The Hackett Group (HCKT) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $77.9 million, near the high end of guidance, with adjusted EPS at $0.41, both driven by strong GenAI engagement growth in the GSBT segment.

• GAAP net income was $3.1 million ($0.11 per diluted share), down from $8.7 million, reflecting higher non-cash stock compensation and acquisition-related expenses.

• GenAI-enabled transformation is seen as a generational opportunity, with AI Explorer and ZBrain platforms providing differentiated capabilities and rapid value realization for clients.

• The company completed the acquisition of LeewayHertz, integrating ZBrain and launching new advisory programs targeting AI leaders.

• Cash flow from operations improved to $4.2 million from $2.8 million year-over-year.

Financial highlights

• Total revenue for Q1 2025 was $77.9 million, up slightly from $77.2 million year-over-year; revenues before reimbursements were $76.2 million, up from $75.7 million.

• Adjusted net income was $11.6 million ($0.41 per share), up from $0.39 per share year-over-year.

• Adjusted EBITDA was $15.7 million (20.7% of revenues before reimbursements), up from $15.2 million (20%) year-over-year.

• Cash at quarter-end was $9.2 million, down from $16.4 million at year-end 2024.

• Operating income dropped to $4.4 million from $11.5 million year-over-year.

Outlook and guidance

• Q2 2025 revenue before reimbursements is expected between $76 million and $77.5 million.

• Adjusted diluted EPS guidance for Q2 is $0.37–$0.39; adjusted gross margin expected at 43–44%.

• Global SMBT segment revenue before reimbursements projected to rise ~5% year-over-year; Oracle and SAP segments combined expected to decline.

• Adjusted EBITDA margin for Q2 expected at 21–22%; operating cash flow anticipated to increase sequentially.

• Available funds and credit facility are expected to cover working capital and capital needs for at least the next twelve months.