The Hackett Group (HCKT) Q2 2026 earnings summary

Executive summary

• Q2 2026 marked a pivotal phase in the transition to an AI-enabled, platform-led business model, with proprietary platforms (AI XPLR, XT, AIX, XDA) driving differentiation and scalability.

• Over $30 million in significant platform-led deals were closed, expected to drive sequential revenue and EPS growth in Q3, signaling an operational and financial inflection point.

• Net income for Q2 2026 was $4.4 million, up from $1.7 million in Q2 2025, as the company pivoted toward Gen AI-enabled consulting and incurred restructuring costs.

• Strong client demand for AI adoption and digital transformation, with most new engagements including or extending AI scope.

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

Financial highlights

• Q2 2026 total revenue was $69.3 million, down from $78.9 million in Q2 2025; revenue before reimbursements was $68.3 million, up from $67.8 million in Q1.

• Adjusted diluted EPS was $0.34, at the midpoint of guidance, down from $0.38 in Q2 2025; GAAP diluted EPS was $0.18, up from $0.06.

• Adjusted gross margin improved to 44.1% from 42.3% sequentially; Q2 gross margin was $27.7 million (40% of revenue).

• Adjusted EBITDA was $13.9 million (20.3% of revenues); operating income was $7.7 million, up from $4.6 million in Q2 2025.

• Cash balance at quarter end was $14.2 million; operating cash flow for the first six months was $10.1 million.

Outlook and guidance

• Q3 2026 revenue before reimbursements expected at $68–$70 million; adjusted EPS guidance is $0.37–$0.39, representing ~11.8% sequential EPS growth at midpoint.

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

• Anticipates a $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.