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The Hackett Group 2025 Q1 Earnings Misses Targets as Net Income Falls 64%
Generated by AI AgentAinvest Earnings Report Digest
Thursday, May 8, 2025 4:12 am ET2min read
The Hackett Group (HCKT) reported its fiscal 2025 Q1 earnings on May 07th, 2025. The company missed analysts' expectations as net income fell significantly compared to the previous year. Despite revenue growth, earnings per share declined sharply. The firm maintained its guidance for Q2, projecting adjusted diluted earnings per share and revenue to be within previously announced ranges. The Hackett Group's strategic investments in AI are expected to drive future growth, though current financial results show a need for improved performance.
Revenue
The Hackett Group's total revenue rose marginally by 0.9% to $77.86 million in Q1 2025, compared to $77.19 million in Q1 2024. Revenue before reimbursements was $76.23 million, while reimbursements accounted for $1.63 million, contributing to the overall total revenue figure.
Earnings/Net Income
In Q1 2025, The Hackett Group's earnings per share declined to $0.11 from $0.32 a year ago, reflecting a 65.6% drop. The net income similarly decreased to $3.14 million from $8.73 million in Q1 2024, marking a 64.0% reduction. The steep decline in earnings per share underscores financial challenges faced by the firm this quarter.
Price Action
The stock price of has climbed 3.10% during the latest trading day, has dropped 6.26% during the most recent full trading week, and has tumbled 11.82% month-to-date.
Post-Earnings Price Action Review
The Hackett Group's post-earnings price action strategy, which involves purchasing shares following a revenue increase and holding them for 30 days, yielded a return of 7.18%. However, this performance substantially lagged behind the benchmark return of 84.08%. The strategy's compound annual growth rate (CAGR) was 1.40%, indicating limited growth potential. Additionally, the maximum drawdown of -12.50% and a Sharpe ratio of 0.13 signaled higher risk compared to the benchmark. The overall modest returns reflect the challenges in achieving superior investment performance with this strategy.
CEO Commentary
"We reported operating results that were near and at the high end of our revenue and adjusted earnings per share guidance, respectively," said Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. He emphasized the aggressive investment in generative AI (Gen AI) platforms and the successful launch of AI XPLR version 3, which enhances client prioritization and design of use cases. Fernandez expressed optimism that ongoing innovation and advanced implementation capabilities will foster significant channel partner relationships, driving accelerated growth in a rapidly evolving market.
Guidance
The Company estimates total revenue before reimbursements for the second quarter of 2025 to be in the range of $76.0 million to $77.5 million. Additionally, the Company expects adjusted diluted earnings per share for the second quarter of 2025 to be between $0.37 and $0.39, assuming a GAAP effective tax rate of 27%.
Additional News
The Hackett Group announced the continuation of its share repurchase program, with $21.3 million remaining in authorization after repurchasing 379,000 shares at an average price of $30.93. Additionally, the Board of Directors declared a quarterly dividend of $0.12 per share, payable on July 7, 2025, to shareholders of record as of June 20, 2025. The company also reported enhanced efforts in leveraging generative AI to improve supply chain resilience, as detailed in its April 2025 report, highlighting the urgency of AI-driven transformation amid economic uncertainties.
Revenue
The Hackett Group's total revenue rose marginally by 0.9% to $77.86 million in Q1 2025, compared to $77.19 million in Q1 2024. Revenue before reimbursements was $76.23 million, while reimbursements accounted for $1.63 million, contributing to the overall total revenue figure.
Earnings/Net Income
In Q1 2025, The Hackett Group's earnings per share declined to $0.11 from $0.32 a year ago, reflecting a 65.6% drop. The net income similarly decreased to $3.14 million from $8.73 million in Q1 2024, marking a 64.0% reduction. The steep decline in earnings per share underscores financial challenges faced by the firm this quarter.
Price Action
The stock price of has climbed 3.10% during the latest trading day, has dropped 6.26% during the most recent full trading week, and has tumbled 11.82% month-to-date.
Post-Earnings Price Action Review
The Hackett Group's post-earnings price action strategy, which involves purchasing shares following a revenue increase and holding them for 30 days, yielded a return of 7.18%. However, this performance substantially lagged behind the benchmark return of 84.08%. The strategy's compound annual growth rate (CAGR) was 1.40%, indicating limited growth potential. Additionally, the maximum drawdown of -12.50% and a Sharpe ratio of 0.13 signaled higher risk compared to the benchmark. The overall modest returns reflect the challenges in achieving superior investment performance with this strategy.
CEO Commentary
"We reported operating results that were near and at the high end of our revenue and adjusted earnings per share guidance, respectively," said Ted A. Fernandez, Chairman & CEO of The Hackett Group, Inc. He emphasized the aggressive investment in generative AI (Gen AI) platforms and the successful launch of AI XPLR version 3, which enhances client prioritization and design of use cases. Fernandez expressed optimism that ongoing innovation and advanced implementation capabilities will foster significant channel partner relationships, driving accelerated growth in a rapidly evolving market.
Guidance
The Company estimates total revenue before reimbursements for the second quarter of 2025 to be in the range of $76.0 million to $77.5 million. Additionally, the Company expects adjusted diluted earnings per share for the second quarter of 2025 to be between $0.37 and $0.39, assuming a GAAP effective tax rate of 27%.
Additional News
The Hackett Group announced the continuation of its share repurchase program, with $21.3 million remaining in authorization after repurchasing 379,000 shares at an average price of $30.93. Additionally, the Board of Directors declared a quarterly dividend of $0.12 per share, payable on July 7, 2025, to shareholders of record as of June 20, 2025. The company also reported enhanced efforts in leveraging generative AI to improve supply chain resilience, as detailed in its April 2025 report, highlighting the urgency of AI-driven transformation amid economic uncertainties.
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