The Hackett Group (HCKT) Q2 2026 earnings summary

Executive summary

• Transition to an AI-enabled, platform-led consulting model, with proprietary platforms (AI XPLR, XT, AIX, XDA) and restructuring to align staffing with market demand.

• Closed over $30 million in new platform-led deals, expected to drive sequential revenue and EPS growth in Q3 and set up a strong 2027.

• Strong client interest in AI adoption, with most new engagements including or extending AI scope, increasing AI adoption opportunities.

• Partnerships with ServiceNow, TCS, and Genpact are active, while IBM has deferred joint activities.

• Revenue for Q2 2026 was $69.3 million, down 12% year-over-year; net income was $4.4 million, up from $1.7 million in Q2 2025.

Financial highlights

• Q2 2026 revenue before reimbursements: $68.3 million, down from $77.6 million in Q2 2025.

• Adjusted diluted EPS: $0.34, down from $0.38 in Q2 2025; GAAP diluted EPS: $0.18, up from $0.06.

• Adjusted gross margin: 44.1%, up from 42.3% in Q1; adjusted EBITDA: $13.9 million (20.3% of revenues).

• Operating income for Q2 2026 was $7.7 million, up from $4.6 million in Q2 2025.

• Cash balance at quarter end: $14.2 million; net cash from operations: $15.2 million.

Outlook and guidance

• Q3 2026 revenue before reimbursements expected at $68–$70 million; adjusted EPS guidance: $0.37–$0.39.

• Adjusted gross margin expected at 46–47%; adjusted EBITDA margin at 21.5–22.5%.

• Anticipates $1 million AI transition charge in Q3, mainly for severance, excluded from non-GAAP results.

• SAP Solutions segment revenue expected to decline sequentially in Q3 due to lower VAR software sales.

• Management expects continued uncertainty in client decision-making regarding Gen AI investments.