Resources Connection (RGP) 1 Oct 24 2025 Q1 Earnings call transcript
RGP (Resources Connection, Inc.) recently held an earnings call to discuss their first quarter performance and provide insights into their strategic initiatives. The call, led by CEO Kate Duchene, COO Bhadresh Patel, and CFO Jennifer Ryu, highlighted the company's restructuring efforts and brand architecture evolution to better serve clients and unlock growth opportunities.
Operational Improvements and Strategic Shifts
RGP has taken significant steps to streamline its operating model and brand architecture, aligning strategy and execution with accountable business segments. This move is aimed at expanding the company's addressable market and improving efficiency. The new structure allows RGP to serve a broader range of needs within its existing and future client set, deepening and expanding capabilities in the consulting space.
The company has also made strategic investments in technology and talent acquisition, leveraging AI-powered software to drive faster speed to market and access industry expertise. This investment in technology and talent is a strategic move to enhance RGP's competitive advantage in the marketplace.
Cross-Selling and Growth Opportunities
RGP's focus on cross-selling and expanding its service offerings has been a key driver of growth. The company's new structure enables it to engage clients at different stages of projects, positioning it to secure larger engagements and expand its service offerings. RGP's cross-selling efforts are paying off, with a notable increase in gross pipeline and project size, demonstrating the company's ability to leverage its diverse service offerings to meet clients' evolving needs.
Financial Performance
RGP reported a total revenue of $136.9 million for the first quarter, down 19% from the prior year quarter on a same-day constant currency basis. The company's adjusted EBITDA was $2.3 million, representing a 1.7% adjusted EBITDA margin. Despite the revenue decline, RGP's focus on improving operating efficiency and cost leverage has resulted in a significant improvement in SG&A expenses, down 14% from the prior year quarter.
Challenges and Opportunities
RGP faces challenges in the on-demand talent segment, with a 33% year-over-year revenue decline. However, the company is optimistic about the future of this segment, as it positions itself to take advantage of opportunities in the consulting space, especially around tech and digital transformation projects. RGP's ability to leverage its on-demand talent capabilities to scale projects and engage in earlier stage discussions with clients is a strategic advantage that sets it apart from competitors.
Looking Ahead
RGP remains cautiously optimistic about the remainder of the fiscal year, with a focus on completing its technology transformation project and returning cash to shareholders through dividends and share buybacks. The company's strategic shifts and brand positioning are expected to position it for long-term growth, as it continues to expand its service offerings and engage clients at different stages of projects.
Conclusion
RGP's earnings call provided valuable insights into the company's strategic initiatives and financial performance. The company's focus on operational improvements, brand architecture evolution, and strategic acquisitions positions it well for future growth. RGP's ability to leverage its diverse service offerings to meet clients' evolving needs and engage in earlier stage discussions with clients is a strategic advantage that sets it apart from competitors. With a clear focus on execution and a commitment to delivering value to clients, RGP is well-positioned for success in the professional services industry.