Resources Connection Q1 2025 Earnings Report
Key Takeaways
Resources Connection reported a decrease in revenue and a net loss for Q1 2025, impacted by a choppy demand environment and a goodwill impairment charge. The company is focused on diversification and brand refresh initiatives to improve long-term growth and profitability.
Revenue decreased by 19.5% to $136.9 million compared to the prior year quarter.
Net loss was $5.7 million, including a $3.9 million goodwill impairment charge.
Gross margin declined to 36.5% from 39.4% in the prior year quarter.
SG&A expenses improved by 18.4%, driven by cost reduction plans and a gain on the sale of the Irvine office building.
Resources Connection
Resources Connection
Resources Connection Revenue by Segment
Forward Guidance
The company is focused on technology transformation, operating model evolution, and brand refresh initiatives to improve speed to market, extend buying centers, and strengthen brand recognition. They believe these efforts will drive growth and profitability in the long term.
Positive Outlook
- Notable pipeline improvement
- More sizable deal closes involving service brands delivering together seamlessly
- Refreshed brand positioning to cross sell as a trusted partner
- Focus on technology transformation to improve speed to market
- Operating model evolution to extend buying centers
Challenges Ahead
- Persistently choppy demand environment
- Clients restrained in moving forward with transformation projects
- Extended timelines for opportunities to close in the pipeline
- Decline in average bill rate reflects a more competitive pricing environment
- Shift in revenue mix to the Asia Pacific region which typically carries a lower average bill rate
Revenue & Expenses
Visualization of income flow from segment revenue to net income