Resources Connection Inc. (NASDAQ:RGP) reported its financial results for the second quarter of fiscal year 2024, revealing a significant earnings beat. The company reported an earnings per share (EPS) of $0.18, far surpassing the forecasted $0.01. Revenue also exceeded expectations at $145.6 million, compared to the anticipated $137.02 million. Following the earnings announcement, RGP's stock saw a 2.23% increase in aftermarket trading, reflecting a positive market reaction.
Key Takeaways
- RGP reported a substantial EPS surprise, beating forecasts by 1700%.
- Revenue exceeded expectations by approximately 6.3%.
- Stock price increased by 2.23% in aftermarket trading.
- Gross margin improved by 200 basis points from the previous quarter.
- The company implemented a new technology platform, enhancing operational capabilities.
Company Performance
Resources Connection demonstrated robust performance in Q2 2024, with sequential revenue growth of 5%, despite a 13% year-over-year decline. The company's focus on technology and operational efficiency contributed to a gross margin improvement, signaling effective cost management. The professional services industry, projected to grow significantly, provides a favorable backdrop for RGP's diversified offerings.
Financial Highlights
- Revenue: $145.6 million, down 13% year-over-year but up 5% sequentially.
- Earnings per share: $0.18, significantly above the $0.01 forecast.
- Gross margin: 38.5%, a 200 basis point increase from the previous quarter.
- Adjusted EBITDA: $9.7 million, with a margin of 6.6%, up from 1.7% in Q1.
Earnings vs. Forecast
RGP's actual EPS of $0.18 exceeded the forecast by $0.17, marking a 1700% surprise. Revenue also surpassed expectations by $8.58 million, or 6.3%. This performance represents a significant improvement over previous quarters, suggesting effective strategic execution.
Market Reaction
The positive earnings surprise led to a 2.23% increase in RGP's stock price during aftermarket trading. This reaction indicates investor confidence in the company's financial health and strategic direction. The stock is currently trading near its 52-week low, suggesting potential for further appreciation.
Outlook & Guidance
Looking ahead, RGP has provided Q3 revenue guidance of $127-132 million, with expected gross margins of 34-35%. The company anticipates improved economic conditions and continues to focus on technology transformation and operational efficiency.
Executive Commentary
CEO Kate Duchene stated, "We are heads down in the execution of our strategy and are making steady progress." CFO Paresh Bijraj highlighted the importance of RGP's flexible talent model as a key driver of the consulting business, emphasizing adaptability in strengthening market position.
Q&A
During the earnings call, analysts inquired about the drivers behind the gross margin improvement and the performance of the Reference Point consulting capabilities. Management attributed margin gains to improved pay bill ratios and utilization, while cross-selling in finance transformation and digital processes was noted as a growth area.
Risks and Challenges
- The 13% year-over-year revenue decline may concern investors.
- Reduced revenue guidance for Q3 could impact future stock performance.
- Recent workforce reductions might raise questions about cost management.
- Macroeconomic pressures and industry competition remain potential challenges.
- Continued execution of technology and innovation strategies is critical for sustained growth.
Full transcript - Resources Connection Inc (RGP) Q2 2025:
Conference Call Operator: Good afternoon, ladies and gentlemen, and welcome to the Resources Connection Inc. Conference Call. Currently, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded.
At this time, I would like to remind everyone that management will be commenting on results for the Q2 ended November 23, 2024. They will also refer to certain non GAAP financial measures. An explanation and reconciliation of these measures to the most comparable GAAP financial measures are included in the press release issued today. Today's press release can be viewed in the Investor Relations section of RGP's website and filed today with the SEC. Also, during this call, management may make forward looking statements regarding plans, initiatives and strategies and the anticipated financial performance of the company.
Such statements are predictions and actual events or results may differ materially. Please see the Risk Factors section in RGP's report on Form 10 ks for the year ended May 25, 2024, for a discussion of risks, uncertainties and other factors that may cause the company's business results of operations and financial condition to differ materially from what is expressed or implied by forward looking statements made during this call. I'll now turn the call over to RGP's CEO, Kate Duchene.
Kate Duchene, CEO, Resources Connection Inc. (RGP): Thank you, operator. Welcome to our Q2 call and Happy New Year everyone. Thank you for joining us today. I'm pleased to report that we delivered sequential improvement in revenue, gross margin, run rate SG and A and adjusted EBITDA in Q2. Specifically, we grew top line revenue sequentially by over 6%.
We delivered gross margin of 38.5%, an improvement of 200 basis points and adjusted EBITDA of 9 point $7,000,000 or a margin of 6.6 percent, up from $2,300,000 in Q1. While overall results were still off year over year as expected, all measures exceeded our outlook. Turning to performance highlights. 1st, Europe improved top line sequentially by 18%, while Asia also grew steadily at 4%, delivering overall segment improvement of 10%. The On Demand segment revenue was up slightly from Q1 and is continuing to stabilize.
Our Consulting segment Veracity grew 10% in Q2 with improved bill rates and utilization metrics. The outsourced services business, Kelsey, was essentially flat sequentially and grew 4% year over year, adding 25 new logos during the quarter. These positive results reinforce the soundness of our long term strategy and demonstrate steady progress in our business against a macro backdrop that remains choppy. Since the close of Q2, we also accomplished a major milestone with the implementation of our new technology platform in North America. We successfully went live on Workday (NASDAQ:WDAY) Financials and Workday Professional Services Automation module and optimize Workday HCM and our Salesforce (NYSE:CRM) platform.
75% of our business is now run on a modern state of the art technology platform, enabling increased use of artificial intelligence and automation in the delivery of our services as well as back office operations. We expect these new tools will drive greater efficiency in our processes and accelerate speed to market across the enterprise. The significant technology modernization is also highly beneficial as we increase the use of global teams to deliver services, especially in the finance and accounting, risk and compliance, and digital transformation practices. I want to applaud our entire project team, especially our management employees and RGP consultants for the excellent implementation plan and hard work to deliver this major initiative. We will continue to execute our plan to roll out the technology to our international regions.
As we embark on the second half of our fiscal year, we're going to drive continued progress against our strategy to deliver diversified service offerings to our exceptional clients. Our rich portfolio of diversified offerings, encompassing professional staffing support, consulting and outsourced services, creates a strategic powerhouse that we believe will drive value for investors over the long term. Let's review a few of the advantages. First, our model is designed to meet clients where they are and serve them in a truly tailored fashion. In today's interconnected and fast paced economy, businesses face multifaceted challenges that require customized solutions.
Offering professional staffing, consulting and outsourcing allows us to address clients' challenges both flexibly and holistically depending on whether they need to fill immediate talent gaps, review and refine strategy or design, lead and execute a project all the way through. This constructive collaboration ensures that clients can choose how and when to engage and also receive end to end solutions under one roof, saving time and reducing complexity. 2nd, diversified offerings better positions RGP to be a preferred partner in both good times and bad in the years ahead. Market dynamics are constantly shifting, and businesses must remain agile to succeed. Diversified service offerings enable our clients to pivot based on immediate needs and market conditions.
For example, during periods of rapid growth, on demand services can ramp up workforce capacity without the risks associated with permanent hires. During downturns, consulting helps optimize operations with process redesign and cost containment initiatives, and outsourcing ensures critical functions are maintained efficiently. We believe this adaptability will strengthen RGP's market RGP's market position throughout economic cycles moving forward, as it is intended to build inherent resilience and shield the business from cyclical impact. Next (LON:NXT), diversification also deepens client relationships by enabling RGP to function as a trusted advisor rather than a one off vendor. By serving a client holistically, we gain a comprehensive understanding of their business, challenges and goals.
This knowledge fosters stronger partnerships, increased trust and long term collaborations. Our clients are more likely to rely on us since we evolved with their needs and offer a seamless client experience rather than fragmented solutions. We can create economies of scale that translate into cost savings for clients. Badrash will share specific examples of this cross sell dynamic in contracts we have recently won as well as our pipeline. Finally, a diversified services portfolio also attracts a wide array of talent from consultants who excel at strategy to specialists who thrive in execution.
This diverse talent pool fosters innovation as professionals with different skill sets collaborate to solve problems creatively. Additionally, the integration of services promotes cross functional expertise, offering clients insights and solutions informed by a broader perspective. Veracity, for example, is growing in partnership with our on demand business, building scalable consulting teams that bring together strategists and execution specialists. ReferencePoint, our financial services strategy group and On Demand also collaborated to close multiple contracts during the quarter that each would not have successfully pursued alone. RGP's flexible talent model continues to be a key differentiator and growth driver for the business, even as we're deepening our consulting capabilities and serving clients in new ways.
The time is now to bring our diversified offerings to market as the global professional services industry is poised for growth and transformation in the next 5 years. According to research published by Statista, the industry is expected to grow to $95,000,000,000 worldwide by 2029 or a CAGR of 6%. In addition, the finance accounting, risk and compliance sectors within professional services are poised for significant changes in 2025 and beyond. As a result, the global finance and accounting professional services market is expected to grow at a compound annual growth rate of over 9% from 2020 to 2027, as reported by Grand View Research. RGP's core buyer has traditionally been the CFO and or his or her direct reports, and now we have more to offer that buyer than ever before.
As such, we are successfully engaging our long standing CFO relationships to introduce us to additional buyers in our client environments. This is particularly true for consulting services focused on transformations spanning finance, human resources, supply chain, customer and employee experience. With almost every client spending on technology, data and digital transformation initiatives, we now have a rich services portfolio that is aligned with market demand. Veracity, for example, uniquely brings together domain, technical and UX expertise to lead and deliver such projects with differentiated value and flexibility. In closing, we beat expectations this quarter as we continue to transform RGP as a global partner to our clients for services critical to the future of their businesses.
The changes we have undertaken to strengthen the business and our position in the marketplace are not easy, but necessary to enhance long term value for our stakeholders. We are heads down in the execution of our strategy and are making steady progress. We are excited and optimistic on the long term outlook as reinforced by the Board's recent authorization to increase our stock buyback program. I'll now turn the call to Paresh to provide more color around our Q2 performance and the signs of inflecting trends we're closely tracking as we look ahead.
Paresh Bijraj, CFO/Executive, Resources Connection Inc. (RGP): Thank you, Kate, and Happy New Year. I'm pleased to share our quarterly update and walk you through the progress we've made in executing our strategy, along with our continued focus on growth. RGP is a challenger brand, uniquely empowering our clients to select how they prefer to engage with us throughout their transformation and operational journeys, while eliminating the internal barriers that can hinder progress. This quarter, we made significant strides in cross selling, optimizing our pricing approach and improving operational efficiency. As a result, we achieved sequential growth for the first time in 9 quarters at 6.3%, along with a 4% improvement in average weekly run rate and an increase in hourly bill rates compared to our previous quarter.
Our pipeline remains stable with a steady flow of opportunities with existing clients and new logos, particularly in finance transformation, focusing on ERP consolidation, migration and upgrades, along with supply chain modernization and change management. Additionally, HR transformation with an emphasis on employee experience and digital transformation powered by automation and AI driven operational processes are also gaining momentum, all core to our capabilities and cross sell strategy. While we remain cautiously optimistic about the state of the macro environment, especially as it drives our on demand segment, the stability of our overall business gives us confidence in our established baseline moving forward. Additionally, we're seeing positive results from our pricing initiatives. On new contracts, we've achieved notable rate increases, highlighting the growing demand for our service offerings and the recognition of the value we provide to our clients.
Now I'll provide an update on our quarterly performance by segment. Our Consulting segment achieved 6.8% sequential organic growth, underscoring the soundness of our strategy to segment the business. This growth was driven by our expansion into new buying centers within existing clients and higher level conversations around client transformation initiatives. As we continue bringing our consulting capabilities together with Reference Point, the expertise in data, digital and AI is adding significant depth to the value we deliver to a broader range of clients beyond financial services. Including ReferencePoint, our consulting segment revenue grew 10.2% from the 1st fiscal quarter.
Bench utilization rates have also increased, while we continue to balance rising pay rates with improved bill rates. This quarter, we secured several consulting contracts valued at over $1,000,000 and are actively pursuing multiple opportunities, each with a potential value exceeding $10,000,000 Each of these wins and opportunities is representative of the momentum and the differentiation we've been working hard to build and communicate to the marketplace. Our On Demand segment achieved growth of 1.9 percent in top line revenue alongside an improvement in gross margin compared to the Q1. Despite macroeconomic challenges, the business is benefiting from our cross selling efforts, which are driving incremental opportunities and strengthening client relationships. Our flexible on demand talent model is also a key driver of our consulting business, accelerating project staffing and enabling us to scale more quickly, while mitigating the financial risk of a traditional bench model.
Our Europe and Asia Pacific segment achieved sequential quarterly growth as Kate mentioned earlier. This is a positive step given the broader regional challenges. In Asia Pacific, our business remains stable while we continue to leverage existing relationships to navigate inherent geographic complexities. Our Offshore Services segment remains on track with the majority of the wins coming from early stage clients in the technology sector. The combination of new business and expanding existing relationship lends confidence in our ability to sustain this momentum.
While we relentlessly execute our growth strategy, we continue to refine our operating model to enhance the efficiency with which we deliver our services. One of the key steps we've taken this quarter is the consolidation of our talent acquisition and go to market talent organizations, enabling us to serve our segments more centrally, streamline talent acquisition and align resources to better meet the needs of our clients across segments. Last, as Kate mentioned, we're officially live with our North America technology and digital transformation efforts. We will soon begin our efforts to migrate our international operations onto our new platform. In summary, we're excited by the progress we're making on all fronts, including strategy execution, financial performance, pipeline growth and operational efficiency.
This is only our Q2 under our new operating model and we're already seeing tangible results reflected in the financial performance we reported today. While the macroeconomic environment presents uncertainty, our focus on cross selling and driving efficiency across the business puts us in a strong position to continue growing and optimizing our operations in the quarters ahead. I'll now hand the call over to Jen.
Kate Duchene, CEO, Resources Connection Inc. (RGP): Thank you, Bijraj, and Happy New Year to everyone. In the Q2 of fiscal 'twenty five, we achieved significant revenue and adjusted EBITDA growth over the 1st fiscal quarter and narrowed the year over year performance gap. In addition, we outperformed our 2nd quarter outlook ranges on all fronts. Total (EPA:TTEF) revenue was $145,600,000 a sequential growth of 5% over Q1 of fiscal 'twenty five on a same day constant currency basis. Compared to the prior year quarter, revenue was down 13% on the same adjusted basis, which is an improvement over last quarter's 19% decline.
We're pleased to see either stabilization or growth in all segments of the business and we're especially encouraged by the notable sequential improvements in our consulting and Europe and Asia Pac segments. While the macro environment remains more or less the same with clients still hesitant to commit, we have seen more top of the funnel client activities this quarter. Our cross sell efforts are yielding early successes and contributed to a steady improvement in our weekly revenue run rate throughout the Q2. Gross margin for the quarter was 38.5%, a 200 basis point improvement from the first fiscal quarter driven by resilient pay bill ratio and better bench utilization along with more favorable seasonality. Compared to the prior year quarter, our gross margin was off just 40 basis points.
Year over year pay bill ratio and bench utilization were less favorable, however, the timing of the Thanksgiving holiday not being in the Q2 this year provided a boost to the gross margin. Despite the competitive pricing environment across the globe, we improved enterprise wide average bill rate to $123 constant currency from $1.22 a year ago. Our U. S. Average bill rate increased to $166 which is a 4% increase from the prior year quarter and a 2% increase from Q1.
As we strive to push for higher bill rates in all geographic regions, revenue mix across the globe will continue to be reflected in our total company average bill rate, especially as we increasingly leverage nearshore and offshore delivery team. Now on to SG and A. Our enterprise run rate SG and A expense for the quarter was $46,500,000 a 2% improvement from the prior year quarter, primarily driven by lower management compensation expense as a result of actions taken in the previous year to reduce fixed costs as well as our continued cost discipline. In summary, with our improving enterprise top line, gross margin and run rate SG and A expense, we delivered adjusted EBITDA of $9,700,000 in the 2nd quarter or 6.6% adjusted EBITDA margin, a significant improvement from the 1st quarter margin of 1.7 percent. Next, I'll provide color on segment performance.
All year over year percentage comparisons for revenue are adjusted for business days and currency impact. Revenue for our Consulting segment was $60,600,000 up slightly from $59,100,000 in the prior year quarter. However, it's flat year over year after adjusting for business days and currency impact. 2nd quarter consulting revenue includes $6,100,000 from acquisitions made over the past year. Segment adjusted EBITDA was $9,700,000 or a 16% margin compared to $10,900,000 or a 19% margin in the prior year quarter.
Revenue for our On Demand segment was $53,500,000 compared to $70,900,000 in the prior year quarter, a decline of 27% on an adjusted basis. Segment adjusted EBITDA was $5,600,000 or a margin of 11% compared to $8,700,000 or a 12% margin in the prior year quarter. Turning to our Europe and Asia Pac segment, revenue was $19,700,000 compared to $21,800,000 in the prior year quarter, a decline of 12%. Segment adjusted EBITDA was $1,500,000 or an 8% margin compared to $1,700,000 and also an 8% margin in the prior year quarter. Finally, our Outdoor Services segment revenue was 9,400,000 dollars up from $9,100,000 in the prior year quarter or a growth of 1%.
Segment adjusted EBITDA was $1,500,000 or a 16% margin compared to $1,800,000 or a 20% margin in the prior year quarter. As always, segment adjusted EBITDA excludes certain share corporate costs. I also want to note, we recorded a non cash goodwill impairment charge of $79,500,000 in the 2nd quarter a response to the drop in our market capitalization and a delayed recovery in business performance in both our On Demand and Europe and APAC segments. Dollars 57,800,000 was recorded for our On Demand segment and $21,700,000 was recorded for our Europe and Asia Pac segment. Turning to liquidity, our balance sheet remains pristine with $78,000,000 of cash and cash equivalents and 0 outstanding debt, and we generated $23,000,000 of free cash flow for the trailing 12 month period.
We distributed $4,700,000 worth of dividends in the 2nd quarter, implying a yield over 6% at our current stock price and repurchased $5,000,000 worth of shares at an average price of $8.36 per share. In connection with our technology implementation, we capitalized $20,000,000 worth of implementation costs, which we expect to amortize starting in the Q3. With the majority of implementation effort completed, we expect cash flows from operations to improve starting now in the second half of fiscal twenty twenty five. With total available financial liquidity of $252,000,000 we will continue to invest in high growth areas in the business, return cash to shareholders through dividends and engage in share buybacks under our share repurchase program with $82,000,000 remaining at the end of the quarter following our Board's additional authorization of $50,000,000 during the quarter. I'll now close with our 3rd quarter outlook.
Early Q3 weekly revenue run rate has shown continued uptick through mid December. While we're encouraged to see improving trends, Q3 revenue will be impacted by the typical global holidays as well as the following idiosyncrasies in terms of timing of the holiday. 1st, given how the fiscal year calendar falls, the Q3 will include Thanksgiving holiday. Total U. S.
Business days in the 3rd quarter will be only 59 compared to 64 in the Q2 and 61 in the prior year Q3. 2nd, the mid week timing of both Christmas Day and New Year's Day is expected to impact billable hours due to consultant and client holiday schedules. Past experience suggests that the mid week timing of both holidays could result in an additional 2 business day impact to revenue. As such, we remain cautious in our revenue expectation in the Q3 and guide to $127,000,000 to $132,000,000 We estimate gross margin to be in the range of 34% to 35%, reflecting the same holiday impact I just summarized. On the SG and A front, we expect our 3rd quarter run rate SG and A to be in a range of $46,000,000 to $48,000,000 This outlook range includes the savings from the reduction in force we executed in early December, offset by the employer payroll tax reset in the new calendar year as well as amortization and other costs associated with the recently launched technology platform.
Non run rate and non cash expenses for the Q3 will primarily consist of restructuring costs associated with the reduction in force, stock compensation expense and the remaining technology transformation costs totaling approximately $6,000,000 In closing, we are proud of the progress we've made so far to enhance execution under the new operating and we're encouraged by the early momentum we're seeing in the business as reflected in our Q2 results. With improving economic certainty over time, we believe we are well positioned for a sustained return to growth. This concludes our prepared remarks and we will now open the call for Q and A.
Conference Call Operator: Our first question comes from the line of Joe Gomes of NOBLE Capital. Your question please, Joe.
Joe Gomes, Analyst, NOBLE Capital: Thank you and good evening. So first, I wanted to start out, gross margin, as you mentioned, was significantly higher than both the guide and year over year
Unidentified Speaker: sequentially. I was just wondering if
Joe Gomes, Analyst, NOBLE Capital: you could drill down a little bit more on the gross margin improvement.
Kate Duchene, CEO, Resources Connection Inc. (RGP): Hi, Joe. This is Jen. Happy New Year. Yes, so gross margin improvement over Q1, we have some a little bit of improvement from the pay bills ratio standpoint. We also improved our overall utilization of bank consultant.
And the holiday impacts as well in if you're looking at Q2 compared to Q1, that's what's driving the gross margin improvement quarter over quarter. And then from a year over year standpoint, as I stated in my remarks, there's a little bit of degradation in the pay bill ratio. Mostly, we're seeing some pay pressure, mostly across our international region in EU and APAC really due to some of it is due to the talent shortage. So we are seeing some pressure there. Utilization is a little bit less favorable than the prior year.
And that and we have favorable holiday impact, if you compare year over year because of Thanksgiving holiday. And so that sort of offset a little bit of the utilization and the pay bill dynamics that I just talked about. Does that help?
Joe Gomes, Analyst, NOBLE Capital: Yes, yes. Thank you. And if I could follow-up on Reference Point, just how is that is that meeting your expectations, exceeding, maybe just give us a little more color on how Reference Point has performed in the quarter and how it's set up going forward?
Kate Duchene, CEO, Resources Connection Inc. (RGP): Yes. Joe, hi and Happy New Year. It's Kate. Reference Point is performing to our expectations. We've been pleased to see we're integrating it as quickly as we can, so that we can continue to expand what Reference Point solution set is into our client base.
Now, we've started with financial services because that's been their core, but we're also seeing some opportunities outside of financial services where clients can benefit from the kind of skills and solutions that Reference Point brings.
Joe Gomes, Analyst, NOBLE Capital: Okay, great. And then just one more for me if I could sneak it in. Last quarter, you talked about doing a little more focus on stock buybacks. You did buy back another $5,000,000 in the quarter, but that was flat with what you did in the previous quarter. Is there something that for a reason why you didn't be a little more aggressive on the stock buybacks?
Or is that just kind of a timing issue?
Kate Duchene, CEO, Resources Connection Inc. (RGP): Yes. Jill, I can answer that. Yes. It's a little bit of timing. It's not really an issue.
We as you know, we just completed our digital our technology transformation. We're more bullish about stock repurchasing and doing more of that. We just wanted to kind of get through the technology transformation first. Now that that's behind us, I do expect that we'll pick up the activities there a little bit more.
Conference Call Operator: Our next question comes from the line of Alexander Sinatra of R. W. Baird. Your question please, Alexander.
Alexander Sinatra, Analyst, R.W. Baird: Hi. I just wanted to say congratulations on the good results this quarter. First, I was just wondering a little bit on demand domestically and in Europe. You did mention improvement in Europe and Asia. So, I was just looking for a little bit more color on that.
Paresh Bijraj, CFO/Executive, Resources Connection Inc. (RGP): Hi. This is the guy. Happy New Year, everyone. What we're seeing is if we can still have segment of the business and core offerings and kind of how we go to market. We're starting to see demand a lot more in finance accounting, digital transformation, supply chain, and that's where we're focused.
There's a lot more activity in this area across the globe. The movement of the activity is still kind of choppy, but the good news is that our pipeline is filling up in the early stage discussions across clients a lot more than we had last quarter.
Alexander Sinatra, Analyst, R.W. Baird: Okay. Thank you. And then I just had a quick follow-up on how we should think about, I guess, the impact of the amortization of those transformation costs. If there is anything, any kind of color you can give on that?
Kate Duchene, CEO, Resources Connection Inc. (RGP): The annual amortization expense is going to be around $3,000,000 out. So we're going to start the amortizes halfway through Q3. And so, Q4 will be the Q1 with the full impact of the amortization.
Conference Call Operator: Thank you. Our next question comes from the line of Andrew Steinerman of JPMorgan. Your line is open, Andrew.
Andrew Steinerman, Analyst, JPMorgan: Hi. I have two questions. The first one is, I assume that the months of November December kind of had to get the calendar year end for your clients, the typical time for clients to finish up projects. So I was just wondering, as you look at your months of November, December, how does the pace of current project ends look versus a typical year? And my second question is for Jen.
When you look at the midpoint of the revenue range that you gave for 3rd fiscal quarter, what would be the year over year change adjusted for any M and A that you mentioned as well as on a same day basis?
Paresh Bijraj, CFO/Executive, Resources Connection Inc. (RGP): Hi, Mark. This is Badresh. From a trend perspective of November, December and project ending, I think we're living through times where every year is pretty unique. And last year, there was a lot more pressure on clients and not making decisions and spend. So in that sense, we're seeing more of that activity.
On the second piece is a lot of our projects, we don't have the cyclicality that traditional firms used to have historically, where things ended in November or December. So we manage this all day long every day across projects and managing or refilling that. So we're not seeing those end of year cliffs that you're sort of same continue compared to last year either. It's just a matter of continuing the work and managing the work as attending and filling it up new or extending. And I'll let Jen take the second question.
Kate Duchene, CEO, Resources Connection Inc. (RGP): Yes. Andrew, at the midpoint of the guidance range for revenue, it's a 15% year over year decline on an organic same day constant currency basis. Thank
Andrew Steinerman, Analyst, JPMorgan: you. Appreciate it.
Conference Call Operator: Thank you. Our next question comes from the line of Marc Riddick of Sidoti. Please go ahead, Marc.
Joe Gomes, Analyst, NOBLE Capital: Hi. Good afternoon and happy New Year, everyone.
Kate Duchene, CEO, Resources Connection Inc. (RGP): Hi, Mark.
Unidentified Speaker: So I wanted to talk a little bit you mentioned in your prepared remarks a couple of times about cross selling benefits and some of the early successes that you're seeing there. So wondering if there is anything additional that you could share there as to maybe some of the areas that were most receptive. I think you mentioned, of course, of financial services, but were there any particular project types or service types that are better or more receptive initially?
Paresh Bijraj, CFO/Executive, Resources Connection Inc. (RGP): Yes. This is Madras. Hi, Madras. Hi, Madras. Hi, Madras.
What we're finding is in finance transformation, especially for a lot of ERP projects where clients have to get off on prem to cloud, we're seeing a lot of activity there. We're seeing a significant amount of activity also in digital as it relates to employee experience or digitization of operational processes. And then we're seeing opportunities in supply chain modernization, especially coupled with brand and UX. That's kind of where we're seeing a lot more activity as we're focusing into our existing clients and the spend that they're looking at, which are aligned to kind of the strategy that we've laid out for where we're focused in the organization and in the market.
Unidentified Speaker: Excellent. And then, Jen, hey, good afternoon. I think you made mention as far as the timing of going live on some of the platforms was after the end of this the second quarter, if I remember hearing that properly. Maybe you can talk a little bit. It seems that was obviously a fairly short amount of time between then and now.
So maybe you can share maybe a little bit of initial thoughts as to how smoothly that went, any hiccups, anything that we should be thinking about there?
Kate Duchene, CEO, Resources Connection Inc. (RGP): Yes. So we just went live December 21st. I would say, with the go live went very smoothly and an implementation of this size, we expect small things here and there, it's not perfect. But we were able to work through everything. The first couple of weeks post go live, all the major kind of critical milestones, we were able to complete that successfully and we have a very robust hyper care structure in place to triage and resolve issues.
All in all, I would say this is a very, very successful GoLive implementation.
Unidentified Speaker: That's very encouraging. And then, Kate, I sort of wanted to ask your thoughts on this. You might be one of the last companies that folks are asking this up. But due to the timing of when you last reported, are you getting any sense or any feedback as to any client activity or behavior or changes or shifts around our political landscape post election? And then maybe as a reminder for folks, maybe you could talk a little bit about what differences may have been experienced during the first Trump administration that might sort of figure into the thought process of what we might see going forward?
Kate Duchene, CEO, Resources Connection Inc. (RGP): Yes. Hey, Mark, and again, Happy New Year. So I would characterize the sentiment post election as generally more positive in our dialogue with clients. It's not that they're pulling the trigger on projects rapidly, but we're certainly engaged in more meetings and starting to talk about planning for activities in this new calendar year. So I would overall, I'd say it's more optimistic, but it's not a hockey stick yet.
So I will tell you that. I think the areas that I'm hearing about from talking to clients, talking to my network is there's a strong belief that there will be more transactional work coming, which always provides opportunity for us, whether that's substantive finance and accounting or risk and regulatory work, but also the associated project management and change management work that happens with transactions and integration support. And I think more dialogue is happening about some pending activities that are starting to open up in our client base. With respect to the last administration versus now, I mean, regulatory change is a driver of opportunity, tax change is a driver of opportunity. And again, I'd go back to a more active M and A environment.
Conference Call Operator: Thank you. I would now like to turn the conference back to Kate DeCheyne for closing remarks. Madam?
Kate Duchene, CEO, Resources Connection Inc. (RGP): Yes. Thank you, operator, and thank you everyone for following us. We look forward to talking to you after our Q3 of our fiscal year 'twenty five. Thanks again and best wishes for a wonderful year.
Paresh Bijraj, CFO/Executive, Resources Connection Inc. (RGP): Thank you.
Conference Call Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
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