Resources Connection's Q4 2025: Unpacking Contradictions in Revenue Guidance, Margins, and Market Trends

Revenue guidance and market conditions, gross margin improvement, impact of Reference Point acquisition, On-Demand Talent and Consulting revenue trends, and pipeline and sales team performance are the key contradictions discussed in Resources Connection's latest 2025Q4 earnings call.



Strong Q4 Results and Pricing Strategy:
- Resource Connection, Inc. (NASDAQ: RGP) reported revenue of $139.3 million and a gross margin of 40.2% for Q4 of fiscal year 2025, exceeding expectations.
- The gross margin beat was driven by an improvement in the enterprise-wide average bill rate, reflecting a disciplined value-based pricing strategy, and favorable medical claims.

International Segment Growth:
- The Europe and Asia segment revenue grew both year-over-year and sequentially, reaching $21.3 million.
- This growth was supported by strong performance in the U.K., Netherlands, and Japan, as well as improved average bill rates across most markets.

Outsourced Services Expansion:
- The Outsourced Services segment experienced a 4% year-over-year and 3.5% sequential revenue increase, benefiting from new engagements with AI start-ups, spin-outs, and scale-ups.
- The segment's growth was driven by the ability to meet the needs of fast-growing clients seeking flexible, scalable solutions.

Strategic Board Appointments:
- RGP appointed Jeff Fox and Filip Gydé as new Board members, enhancing alignment with long-term investors and supporting strategic evolution.
- Fox brings critical investor insight and a shareholder-focused lens, while Gydé's experience in transforming a traditional staffing firm into a digital solutions provider aligns with RGP's strategic transformation.