The Hackett Group (HCKT) Q2 2024 earnings summary

Executive summary

• Q2 2024 total revenues reached $77.7 million, with revenues before reimbursements at $75.9 million, exceeding guidance and up from $75.6 million year-over-year.

• Adjusted EPS was $0.39, at the top end of guidance; GAAP diluted EPS was $0.31, slightly down from $0.32 in Q2 2023.

• Net income for Q2 2024 was $8.7 million, nearly flat year-over-year.

• Significant momentum in Gen AI consulting, with hundreds of client meetings and the launch of AI XPLR version two, enhancing simulation and enterprise use case capabilities.

• Strategic focus on integrating Gen AI across offerings and expanding recurring, high-margin IP-related services.

Financial highlights

• Adjusted EBITDA was $16.3 million, or 21.5% of revenues before reimbursements.

• Operating income for Q2 2024 was $12.5 million, slightly down from $12.8 million in Q2 2023.

• Cash balance at quarter end was $19.1 million; net cash from operating activities was $13.7 million.

• Interest expense declined to $0.5 million in Q2 2024 from $0.9 million in Q2 2023.

• Share repurchase program authorization remaining: $12.9 million.

Outlook and guidance

• Q3 2024 revenues before reimbursements expected between $74.5 million and $76 million.

• Adjusted diluted EPS guidance for Q3 is $0.39–$0.41, assuming a 27.7% GAAP tax rate.

• Adjusted gross margin expected at 43%-44%; adjusted EBITDA margin at 22%-23%.

• Dividend of $0.11 per share declared for Q3 2024, payable October 4, 2024.

• Management expects available funds and cash flows from operations to be sufficient for at least the next twelve months.