Q1 2025 Resources Connection Inc Earnings Call Transcript
Key Points
- Resources Connection Inc (RGP) has evolved its operating model to align strategy and execution with accountable business segments, driving performance.
- The company has rebuilt its brand architecture and positioning, launching a new brand positioning to articulate its competitive advantage.
- Investments in AI-powered talent acquisition and management software are beginning to show results, enabling faster scaling and access to industry expertise.
- The consulting segment, Veracity by RGP, is driving digital and functional transformation with strategic partnerships and a bench model for scalable delivery.
- The outsourced services segment, Countsy by RGP, has been recognized as the 2024 BPO Partner of the Year by NetSuite, expanding its market focus to include spinouts and carveouts.
- Total revenue for the first quarter of fiscal '25 was $136.9 million, down 19% from the prior year quarter on a same-day constant currency basis.
- The on-demand talent segment saw a significant 33% year-over-year revenue decline, primarily due to challenges in the operational accounting group.
- Gross margin for the quarter was compressed compared to the prior year quarter, predominantly due to lower utilization of salaried consultants and less favorable leverage on indirect costs.
- The pricing environment remains competitive, with the enterprise-wide average bill rate down from $125 to $119 constant currency.
- The Europe and APAC segment experienced a 21% revenue decline on a same-day constant currency basis, impacted by summer seasonality and elongated client decision-making cycles.
Good afternoon, ladies and gentlemen, and welcome to the Resources Connection, Inc., conference call. (Operator Instructions) 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 first quarter ended August 24, 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 Investors 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-K for the year ended May 25, 2024, for a discussion of risks, uncertainties, and other factors that may cause the company's risk
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