The Hackett Group (HCKT) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue reached $78.9M, up 1.6% year-over-year, exceeding guidance, with adjusted EPS of $0.38 at the midpoint and GAAP net income of $1.7M, down from $8.7M due to higher costs and stock-based compensation.

• Growth was driven by Gen AI-related consulting and platform innovation, especially in the Global S&BT segment, while Oracle Solutions faced headwinds from delayed client projects.

• Strategic innovation included enhancements to AI Explorer, ZBrain Gen AI, and the accelerated release of AI XPLR V4.

• Acquisitions of LeewayHertz and Spend Matters expanded AI and procurement capabilities, with a joint venture for Gen AI orchestration.

• The company is aggressively pivoting to Gen AI-enabled transformation, viewing it as a generational opportunity for consulting and technology services.

Financial highlights

• Total Q2 2025 revenue was $78.9M, up from $77.7M year-over-year; revenue before reimbursements was $77.6M.

• Adjusted net income was $10.7M, with adjusted diluted EPS of $0.38, compared to $0.39 last year.

• GAAP net income was $1.7M ($0.06 per share), down from $8.7M ($0.31 per share) due to non-cash stock compensation and acquisition-related expenses.

• Adjusted EBITDA was $16.1M, or 20.7% of revenues before reimbursements.

• Cash flow from operations was $5.65M in Q2; cash balance at quarter-end was $10.1M.

Outlook and guidance

• Q3 2025 revenues before reimbursements expected between $73M and $74.5M.

• Adjusted EPS guidance for Q3 is $0.36–$0.38; adjusted gross margin expected at 43.5%–44.5%.

• Restructuring charges of $1.5–$2M in Q3 due to headcount reductions aligned with Gen AI productivity gains.

• Global S&BT and SAP Solutions segments projected to grow year-over-year; Oracle Solutions expected to decline over 20%.

• The company is assessing the impact of the One Big Beautiful Bill Act on its financials.