Resources Connection Stock Soars 31.58% on Q3 Earnings

On April 4, 2025, Resources Connection's stock surged by 31.58% in pre-market trading, reflecting a significant bullish sentiment among investors.

During the Q3 2025 earnings call, Resources Connection reported total revenue of $129.4 million, which was in line with expectations. The company highlighted macroeconomic uncertainty and client budget constraints as factors affecting revenue growth. Despite these challenges, the company's gross margin and SG&A expenses outperformed the favorable end of their outlook ranges.

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

The company's Consulting segment achieved material double-digit bill rate improvement in Q3. The size of enterprise-wide engagements increased on average by more than 20%, and the company improved its win ratio. The number of 1 million-plus engagements won this quarter doubled compared to a year ago, and the pipeline of opportunities at the $5 million-plus level has grown significantly.

Resources Connection has accelerated its evolution by focusing on three key initiatives: enhancing client offerings, improving operational efficiency, and making targeted investments to enhance value creation over the long term. The company has built a diversified services platform to meet clients' needs, whether they require strategy and execution support or execution specialists working with in-house teams.

The company has also focused on increasing scale in key markets in Southeast Asia and India. The Outsourced Services business, Countsy, delivered solid results in the third quarter, and overall client retention in the top 100 accounts remains solid. The company is strategically located to support clients moving work to the international stage.