Resources Connection (RGP) Q1 2026 Financial Results Summary

DALLAS, Texas, October 8, 2025 – Resources Connection, Inc. (Nasdaq: RGP) announced its financial results for the first quarter of fiscal 2026 ended August 30, 2025.

First Quarter Fiscal 2026 Highlights Compared to Prior Year Quarter

• Revenue: $120.2 million, down 13.0% from $136.9 million.

• Same-day constant currency revenue declined 13.9%.

• Gross Margin: Improved to 39.5%, up from 36.5%.

• SG&A Expenses: $47.9 million, a decrease from $48.9 million (which included a one-time gain of $3.4 million from the sale of an office building).

• Net Loss: $2.4 million, an improvement from a net loss of $5.7 million.

• Net loss margin improved to 2.0% from 4.2%.

• GAAP Diluted Loss per Share: $0.07, improved from $0.17.

• Adjusted Diluted Earnings per Share: $0.03, improved from break-even.

• Adjusted EBITDA: $3.1 million, yielding an Adjusted EBITDA margin of 2.5%, up from 1.7%.

• Cash Dividends Declared: $0.07 per share (compared to $0.14 in the prior period).

Revenue Breakdown by Segment

1. On-Demand Talent:
2. Revenue of $44.4 million, a decline of 16.4% from the prior year’s $52.5 million.

3. Average bill rate increased by 0.4%, offset by a 15.8% decline in billable hours.

4. Consulting:

5. Revenue of $43.6 million, down 21.7% from $55.0 million.

6. Average bill rate increased by 11.1%, while billable hours decreased by 28.4%.

7. Europe & Asia Pacific:

8. Revenue of $19.9 million, an increase of 10.6% from $18.0 million.

9. The billable hours increased by 0.5% with average bill rates up by 9.6%.

10. Outsourced Services:

11. Revenue rose 5.3% to $10.0 million from $9.5 million, with a 2.1% increase in billable hours.

12. All Other:

13. Revenue increased 15.3% to $2.3 million from $2.0 million, reflecting growth from billable hours and a 2.7% rise in average bill rate.

Additional Financial Metrics and Commentary

• Income Tax Expense: $0.5 million (an effective tax rate of 24.7%), compared to $1.1 million (22.7% tax rate) in Q1 2025.

• Cash Position: Cash and cash equivalents decreased to $77.5 million from $86.1 million.

• Operational Efficiency: The improvement in gross margin was attributed to better pay/bill ratios, increased consultant utilization, and lower healthcare expenditures.

• Focus Areas: Management emphasized ongoing strategies to enhance business integration, diversification, and resilience. They are targeting greater engagement in consulting opportunities that yield higher bill rates and larger deal sizes.

Cash Dividend and Share Repurchase

• Cash Dividends: In Q1 2026, RGP declared $0.07 per share, a reduction from $0.14 per share in the same quarter of the previous year.

Conclusion

Resources Connection, Inc. has shown marked improvement in its profitability metrics despite a decline in revenue year-over-year. Economic uncertainty has influenced demand for services, particularly affecting billable hours across segments. Nevertheless, improved margins and a clear operational strategy suggest optimism moving forward.

Here are the extracted tables from the press release:

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED BALANCE SHEETS