• Revenue: $148.2 million for Q4, exceeding the high end of the outlook range.

• Gross Margin: 40.2% in Q4, above the 37.5% to 38% outlook range.

• Adjusted EBITDA: $13.1 million, or an 8.8% adjusted EBITDA margin for Q4.

• Free Cash Flow: $21 million generated in fiscal '24.

• SG&A Expenses: $46.5 million run rate in Q4, an 11% decrease from the prior year.

• Cash and Cash Equivalents: $109 million with zero outstanding debt.

• Share Repurchase: $3 million worth of shares repurchased at an average price of $12 per share.

• Dividends: $4.7 million distributed in the quarter.

• Q1 Revenue Outlook: Projected to be in the range of $135 million to $140 million.

• Q1 Gross Margin Outlook: Estimated to be in the range of 37.5% to 38.5%.

• Q1 SG&A Expense Outlook: Expected to be in the range of $49 million to $51 million.

• Warning! GuruFocus has detected 3 Warning Sign with RGP.

Release Date: July 18, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Resources Connection Inc (NASDAQ:RGP) exceeded the top end of their revenue and gross margin outlook for Q4.

• The company maintained a pristine balance sheet with no outstanding debt.

• Strong client engagement extensions and retention were noted, with new projects starting to convert more consistently.

• RGP is expanding its technology, digital, and data capabilities to meet evolving client needs.

• The acquisition of Reference Point is expected to expand RGP's portfolio of high-value advisory services in the financial services industry.

Negative Points

• Revenue declined by 20% on a same-day constant currency basis compared to the fourth quarter of the prior fiscal year.

• The macroeconomic environment remains choppy, impacting project starts and client spending.

• The company's growth pipeline softened towards the end of the fiscal year.

• Enterprise average bill rate decreased from $129 to $120 constant currency year over year.

• The first quarter outlook projects a revenue decline of around 20% year over year on a constant currency basis.

Q & A Highlights

Q: How has the rollout of the talent management and contract management systems in North America progressed, and are there plans for international expansion? A: Kate Duchene, CEO, stated that the launch was outstanding, with significant efficiency gains. Bhadreskumar Patel, COO, added that they plan to roll out these systems internationally and to additional business units, focusing on financial management system implementation later this year.

Q: With the consultant count down from last year, how prepared is RGP for a potential market upturn? A: Kate Duchene, CEO, explained that RGP is well-prepared with three main engines: revenue, talent acquisition, and consulting delivery. The talent organization is exceptional at pipelining and just-in-time recruiting, leveraging employee referrals and alumni channels.