Resources Connection, Inc.

Fourth-quarter consolidated revenue was $106.1 million, down 18.3% year over year on a same-day constant-currency basis. Gross margin was 37.6% versus 40.2% in the prior year quarter. Adjusted EBITDA was negative $0.6 million. Run-rate SG&A expense was $40.5 million, down 12% from $46.2 million. Segment revenue was $40.4 million for On-Demand Talent, $36.6 million for Consulting, $17.1 million for Europe and Asia Pacific, and $10.3 million for Outsourced Services. For Q1 FY27, management guided revenue to $97 million to $102 million, gross margin to 37% to 38%, run-rate SG&A to $41 million to $43 million, and non-run-rate/non-cash expense to $2 million to $3 million.

Roger Carlile struck an optimistic but measured tone, saying market conditions appear more stable and that the company is “nearing the bottom” of the market-driven downdraft. He said the firm has completed most of the planned FY27 investments and expects those efforts to support growth later in the year. He emphasized three strategic themes: refocusing On-Demand Talent, scaling Consulting, and pushing AI across both client work and internal operations.

Jennifer Ryu said the quarter came in within expectations on revenue and run-rate SG&A, while gross margin beat the high end of the range. She highlighted the improvement in run-rate SG&A to $40.5 million, the 37.6% gross margin, and the $82.4 million cash balance with no debt. She also noted $14.1 million of non-run-rate SG&A, including $6.4 million of non-cash items and $7.7 million of cash charges, plus the new revolving credit facility that gives more flexibility for dividends and repurchases.

Analysts focused on how far along the four strategic priorities were, whether demand is really stabilizing, further cost-out plans for FY27, the new credit facility covenants, and the ramp of the new sales hires. Management said the FY27 investments are largely complete and should begin paying off in the second half, that additional cost takeout will likely be smaller than this year and may include occupancy savings, and that the fixed charge coverage ratio on the new facility is a springing covenant they do not expect to come into play. On sales hiring, management said it typically takes 6 to 9 months for reps to begin contributing monthly and around a year to reach full annual targets.