Resources Connection, Inc. (RGP) Q1 2026 Earnings Call Transcript
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 08 2025
0mins
Should l Buy RGP?
Source: SeekingAlpha
Revenue Revenue of $120.2 million, a decline in On-Demand segment revenue by 16% year-over-year to $44.4 million, Consulting segment revenue declined by 22% year-over-year to $43.6 million, Europe and Asia Pac segment revenue grew by 5% year-over-year to $19.9 million, and Outsourced Services segment revenue grew by 4% year-over-year to $10 million. Reasons for changes include a choppy operating environment in the U.S., stabilization in On-Demand, improved bill rates, and strong client relationships in Europe and Asia Pac.
Gross Margin Gross margin of 39.5%, which is 300 basis points higher than the prior year quarter. Reasons for the increase include improvement in average bill rate, reduction in employee benefit costs, and strategic management of bench consultants' utilization.
SG&A Expense SG&A expense of $44.5 million, a 7% improvement from $47.7 million a year ago. Reasons for the decrease include lower management compensation expense and reductions in other G&A spend such as travel and occupancy.
Adjusted EBITDA Adjusted EBITDA of $3.1 million or a 2.5% adjusted EBITDA margin, with improvements driven by cost reduction efforts and better gross margin performance.
Average Bill Rate Enterprise-wide average bill rate increased to $120 constant currency from $118 a year ago, with an 11% improvement in consulting bill rates from $144 to $160. Reasons include execution of pricing strategy and delivering higher-value engagements.
Segment Adjusted EBITDA On-Demand segment adjusted EBITDA improved to $4.4 million or a margin of 10% from $2.6 million or a 4.9% margin in the prior year quarter. Consulting segment adjusted EBITDA was $5 million or an 11.6% margin compared to $7.8 million or a 14.1% margin in the prior year quarter. Europe and Asia Pac segment adjusted EBITDA was $0.8 million or a 4.2% margin, up from $0.2 million and a 1.3% margin in the prior year. Outsourced Services segment adjusted EBITDA was $2.3 million or a 23.3% margin, up from $1.4 million or a 14.7% margin. Reasons include cost reduction efforts, improved gross margins, and effective management of consultant utilization.
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Analyst Views on RGP
Wall Street analysts forecast RGP stock price to rise
1 Analyst Rating
1 Buy
0 Hold
0 Sell
Moderate Buy
Current: 3.620
Low
10.00
Averages
10.00
High
10.00
Current: 3.620
Low
10.00
Averages
10.00
High
10.00
About RGP
Resources Connection, Inc. is a global consulting firm. The Company’s segments include On-Demand Talent, Consulting, Europe & Asia Pacific, Outsourced Services, and Sitrick. The On-Demand Talent operates under the On-Demand by RGP brand, this segment provides businesses with a go-to source for bringing in experts when they need them. The Consulting operates under the Veracity by RGP brand, this segment drives transformation across people, processes and technology across domain areas including finance and technology and digital. The Europe & Asia Pacific segment offers both on-demand and consulting services (excluding the digital consulting business) to clients throughout Europe and Asia Pacific. The Outsourced Services operates under the Countsy by RGP brand, this segment offers finance, and accounting services. The Sitrick is a crisis communications and public relations firm which operates under the Sitrick brand, providing corporate and financial services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Experience Background: With over 20 years of experience in technology delivery and enterprise transformation, Lamba previously served as Senior Managing Director at Ankura Consulting Group, successfully leading global teams to define product strategies and deliver large-scale systems.
- Strategic Significance: Lamba's addition will not only help RGP better leverage advanced technologies like AI and intelligent automation but also drive the company to provide greater value and support to clients navigating complex transformations.
See More
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- Leadership Change: RGP has appointed Danielle Custalow as the Digital Experience Technologies Practice Leader, a move aimed at enhancing the company's capabilities in digital transformation to meet the needs of CIOs and CTOs while driving scalable digital work strategies.
- Strategic Investment: Custalow will oversee complex global implementation projects, ensuring alignment between technology strategy and operational impact, thereby enhancing RGP's competitiveness and client satisfaction in a rapidly changing market.
- Modernizing Delivery Framework: Under Custalow's leadership, RGP will shift from traditional Project Management Office models to embedded technical teams that identify risks early and drive execution across business and technology, enhancing project adaptability and measurable impact.
- Extensive Project Management Expertise: Custalow brings deep expertise in managing large-scale digital transformation initiatives, having led global cross-functional teams at ICF to deliver enterprise-wide implementations for Fortune 50 and Global 100 companies, ensuring projects are completed on time and within budget.
See More
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- RGP Options Activity: Resources Connection Inc (RGP) has recorded an options trading volume of 2,863 contracts today, approximately 286,300 shares, which is about 76% of its average daily trading volume over the past month, reflecting investor interest in its options.
- RGP High Volume Call Options: The $5 strike call option expiring on April 17, 2026, has seen a trading volume of 1,553 contracts today, representing around 155,300 shares of RGP, suggesting a bullish outlook among investors regarding its future performance.
See More
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- Increased Importance of Risk Management: As organizations accelerate AI adoption and modernize core systems, CFOs and CIOs face growing governance and compliance pressures, necessitating integrated risk strategies to address emerging regulatory and operational challenges.
- Expertise Introduction: Toledo brings over 25 years of experience in risk management and organizational change, having held leadership roles at various financial institutions, and his appointment will enhance RGP's capabilities in enterprise risk management and compliance, fostering the development of responsible AI governance frameworks.
- Market Response and Risk Governance: Toledo emphasized that the current risks industries face are shared vulnerabilities that are not yet monitored, asserting that effective risk governance is foundational for enterprise transformation, especially given the systemic risks posed by multiple industries utilizing the same AI models.
See More
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- AI Investment Barriers: RGP's latest research indicates that 86% of CFOs believe legacy systems hinder their organization's AI readiness, highlighting that modernizing ERP systems has become a top enterprise investment priority, impacting the success of their digital strategies.
- Structured Readiness Approach: RGP Streamline 360™ offers customizable diagnostics that help organizations align ERP investments with operational priorities, governance structures, and financial performance goals, ensuring reduced risks and increased success rates in large-scale transformation initiatives.
- Lifecycle Support: RGP provides support across the entire ERP lifecycle, from readiness assessments to implementation oversight, ensuring clients receive specialized expertise and execution support during modernization efforts, further solidifying its competitive position in the market.
See More
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- Strategic Investment: RGP's appointment of Greg Derderian as CFO Advisory Leader signifies a strategic investment in scaling CFO advisory services within its consulting business, aiming to integrate finance and digital transformation under a unified leadership model, thereby enhancing the company's competitive edge in the market.
- Leadership Enhancement: Derderian's appointment will strengthen RGP's capabilities in finance transformation, ERP value realization, and AI enablement, enabling the firm to provide holistic, scalable solutions to CFOs and their C-suite partners, addressing the complex demands of modern enterprises.
- Industry Experience: Prior to joining RGP, Derderian served as Global CFO Transformation and Consulting Leader at Genpact, bringing extensive experience in modernizing finance operating models for CFOs, which will provide RGP with valuable industry insights and execution capabilities.
- Market Orientation: RGP's CEO Roger Carlile noted that Derderian's appointment reflects market trends, and by strengthening CFO advisory leadership, the firm enhances its ability to connect strategy, technology, and execution, helping clients achieve measurable business value.
See More
