Overview
Professional services firm's fiscal Q2 revenue fell yr/yr, reflecting reduced demand
Net loss for fiscal Q2 narrowed significantly compared to prior year
Adjusted SG&A expenses improved 15% yr/yr
Outlook
Company plans to align cost structure with current revenue levels
Company aims to refocus On-Demand offerings to meet evolving client needs
Company to scale Consulting business for high-value solutions
Result Drivers
DEMAND SHIFT - Co reported reduced demand in traditional finance roles as clients increasingly adopt AI and automation, affecting On-Demand Talent segment
BILLABLE HOURS DROP - Consulting segment revenue fell due to a 33.8% decrease in billable hours, partially offset by higher bill rates from value-based pricing
EUROPEAN GROWTH - Europe & Asia Pacific segment saw revenue growth due to higher bill rates and increased billable hours in Europe
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | $117.73 mln | ||
Q2 EPS | -$0.38 | ||
Q2 Net Income | -$12.66 mln | ||
Q2 Adjusted EBITDA | $4 mln | ||
Q2 Gross Margin | 37.10% | ||
Q2 Gross Profit | $43.71 mln | ||
Q2 Operating Income | -$12.17 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the business support services peer group is "buy"
Wall Street's median 12-month price target for Resources Connection Inc is $6.25, about 19.7% above its January 6 closing price of $5.22
Press Release: ID:nBw3SHcFSa
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)