Resources Connection Stock Soars 31.58% on Strong Q3 Earnings

On April 4, 2025, Resources Connection's stock surged by 31.58% in pre-market trading, reflecting a significant boost in investor confidence and market sentiment.

During the Q3 2025 earnings call, Resources Connection reported total revenue of $129.4 million, which was in line with expectations despite macroeconomic uncertainty and client budget constraints. The company's gross margin and SG&A both exceeded the favorable end of their outlook ranges, indicating strong operational efficiency.

Post-election, the operating environment in the United States has remained sluggish due to increased uncertainty and decreased consumer confidence. However, Resources Connection saw strengthening across its practices in Europe, Japan, and the Philippines. Europe, in particular, showed improvements in key performance indicators such as bill rate increases and pipeline expansion.

The company's Consulting segment achieved material double-digit bill rate improvement in Q3, with the size of enterprise-wide engagements increasing by more than 20% on average. The number of 1 million-plus engagements won doubled compared to the previous year, and the pipeline of opportunities at the $5 million-plus level grew significantly.

Resources Connection has accelerated its evolution by focusing on three key initiatives: enhancing client offerings, improving operational efficiency, and making targeted investments. The company has built a diversified services platform to meet clients' needs, whether they require strategy and execution support or flexible value-based execution support.

The company's flexible engagement models have proven to be an important competitive differentiator, allowing clients to seek agility, price to value, and blended delivery teams. Resources Connection has also focused its services catalog across its diversified offerings in areas where the market has the highest demand, utilizing its core CFO relationships to expand into new buying centers.

In terms of operational efficiency, Resources Connection has lowered its cost structure through optimized headcount, reduced real estate spend, and lower discretionary spending. The company has lowered its run rate SG&A by 8% since the first fiscal quarter and will continue to drive efficiencies across the enterprise through technology, AI, and automation.

Resources Connection has made targeted investments to enhance value creation over the long term, including replacing its technology infrastructure for the North America business. These enhancements allow the company to implement AI and automation to its advantage in both client service and talent recruitment and management.

The company has also enhanced its sales and delivery teams to ensure it has the right approach for both Consulting and On-Demand solutioning when the buying environment improves. Resources Connection is committed to delivering long-term value for its shareholders, driven by its team's unwavering strategic focus.