The Hackett Group (HCKT) Q1 2026 earnings summary

Executive summary

• Revenue before reimbursements for Q1 2026 was $67.8 million, down 11–12% year-over-year, reflecting macroeconomic uncertainty and elongated client decision cycles due to AI ROI uncertainty.

• GAAP net income increased to $4.3 million ($0.17 per share), up from $3.1 million ($0.11 per share) in Q1 2025, while adjusted EPS was $0.34, at the low end of guidance.

• The company is undergoing a strategic transition to an AI platform-enabled consulting and delivery model, investing in proprietary platforms like Hackett AI XPLR, XT, AIX, and ZBrain.

• Early productivity improvements and expanded engagement scopes have been observed, but lower utilization and restructuring costs offset margin gains in Q1.

• Q3 is expected to be an inflection point, with adjusted EPS projected to exceed the prior year on flat revenues.

Financial highlights

• Total revenue for Q1 2026 was $68.8 million, compared to $77.9 million in Q1 2025.

• Global S&BT segment revenue before reimbursements was $36.4–$36.8 million, down 15% year-over-year.

• Oracle Solutions segment revenue was $15.4–$15.7 million, down 24% year-over-year, with sequential stabilization.

• SAP Solutions segment revenue was $16.0–$16.3 million, up 21% year-over-year, driven by implementation services and software sales.

• Cash balance at quarter-end was $6.1 million, with $79.0 million outstanding on the credit facility.

Outlook and guidance

• Q2 2026 revenue before reimbursements is expected to be $68.5–$70.0 million.

• Adjusted EPS for Q2 is guided at $0.33–$0.35; adjusted gross margin expected at 44–45%.

• Q3 is projected as an inflection point for year-over-year EPS growth, with sequential improvements in revenue and margins anticipated.

• An AI transition charge of ~$500,000 and restructuring costs of up to $2.0 million are expected in Q2, related to severance and staff reductions.

• Available liquidity, including cash and credit facility, is expected to be sufficient for at least the next twelve months.