Resources Connection Q3 2023 Earnings Report
Key Takeaways
Resources Connection reported a revenue of $186.8 million, exceeding the high end of the outlook range. Gross margin improved to 38.3%, driven by pay/bill spread improvement. Net income was $7.0 million, impacted by a goodwill impairment charge.
Revenue was $186.8 million, compared to $204.6 million in the prior year quarter, with the prior year including $6.7 million from taskforce which was divested at the beginning of fiscal 2023.
Gross margin increased by 80 basis points to 38.3%.
SG&A expenses were $59.4 million, including $1.7 million in technology transformation costs.
Net income was $7.0 million, which included a $3.0 million goodwill impairment charge related to Sitrick.
Resources Connection
Resources Connection
Resources Connection Revenue by Geographic Location
Forward Guidance
Management expressed optimism about the company's positioning for future growth, citing investments in on-demand talent platform and digital consulting capabilities.
Positive Outlook
- Progress related to value-based pricing
- Number of extensions on existing engagements increase significantly
- Overall pipeline remains healthy
- Consultants are providing exceptional value
- RGP is a trusted partner to help clients execute their most important initiatives especially during times of uncertainty
Challenges Ahead
- Clients are taking longer with buying decisions related to new projects
- Softer topline revenue in the third quarter of fiscal 2023
- Higher SG&A as the Company continued to execute on its technology implementation project to drive efficiency in the long term
- One-time goodwill impairment charge related to Sitrick
- Challenging macroeconomic conditions
Revenue & Expenses
Visualization of income flow from segment revenue to net income