Consulting firm Resources Connection's Q2 revenue falls

Resources Connection

07/01/2026 21:15

Overview

Professional services firm's fiscal Q2 revenue fell yr/yr, reflecting reduced demand

Net loss for fiscal Q2 narrowed significantly compared to prior year

Adjusted SG&A expenses improved 15% yr/yr

Outlook

Company plans to align cost structure with current revenue levels

Company aims to refocus On-Demand offerings to meet evolving client needs

Company to scale Consulting business for high-value solutions

Result Drivers

DEMAND SHIFT - Co reported reduced demand in traditional finance roles as clients increasingly adopt AI and automation, affecting On-Demand Talent segment

BILLABLE HOURS DROP - Consulting segment revenue fell due to a 33.8% decrease in billable hours, partially offset by higher bill rates from value-based pricing

EUROPEAN GROWTH - Europe & Asia Pacific segment saw revenue growth due to higher bill rates and increased billable hours in Europe

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
$117.73 mln
Q2 EPS
-$0.38
Q2 Net Income
-$12.66 mln
Q2 Adjusted EBITDA
$4 mln
Q2 Gross Margin
37.10%
Q2 Gross Profit
$43.71 mln
Q2 Operating Income
-$12.17 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and 1 "sell" or "strong sell"

The average consensus recommendation for the business support services peer group is "buy"

Wall Street's median 12-month price target for Resources Connection Inc is $6.25, about 19.7% above its January 6 closing price of $5.22

Press Release: ID:nBw3SHcFSa

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)