RGP · Resources Connection, Inc.

Resources Connection's third-quarter fiscal 2026 results show a significant year-over-year revenue decline of 16.6% to $107.9 million, primarily driven by decreases in billable hours across most segments. The On-Demand Talent segment revenue fell 13.2% to $40.9 million due to reduced demand in traditional finance roles as clients adopt AI and automation, while the Consulting segment experienced a more substantial 29.8% decline to $36.9 million reflecting slower pipeline conversion. Despite the revenue contraction, the company achieved margin improvement with gross margin expanding 60 basis points to 35.7% through better pay bill ratios, lower holiday pay, and reduced healthcare costs. SG&A expenses decreased $5.3 million year-over-year to $45.8 million, driven by lower employee compensation following workforce reductions, completed technology transformation initiatives, and reduced professional fees, though partially offset by increased restructuring costs and bad debt expense. The net loss of $9.5 million represents substantial improvement from the $44.1 million loss in the prior-year quarter, which included significant non-run-rate items. Management noted results aligned with previously provided outlook for revenue and gross margin, with run-rate SG&A expense better than expected. Concurrently, the company announced the sale of its Sitrick crisis communications business as part of its broader transformation initiative to simplify the business portfolio, with the transaction expected to close within 45 days for an estimated $1.4-2.3 million. The company maintains a solid liquidity position with $82.8 million in cash and equivalents and $49.3 million available under its credit facility, while continuing its quarterly dividend of $0.07 per share and maintaining $79.2 million in share repurchase authorization.