What is the market's earnings forecast for The Hackett Group next quarter?

What is the revenue and EPS growth rate for The Hackett Group year over year?

What is The Hackett Group's gross profit margin?

What does The Hackett Group do and what are its main business segments?

What were the key takeaways from The Hackett Group's earnings call?

What factors drove the changes in The Hackett Group's revenue and profit?

What were the key takeaways from The Hackett Group’s earnings call?

What guidance did The Hackett Group's management provide for the next earnings period?

- **AI XPLR v4 Drives Growth**: GenAI platform's ability to integrate client automation footprints and deliver solutions 80% faster than manual methods is winning partnerships and clients.
- **Revenue Mix Shift**: 23% of revenues now recurring, up from prior levels, as AI XPLR licensing and GenAI SaaS models gain traction.
- **$40M Share Buyback**: Dutch tender offer to repurchase 8% of shares, signaling confidence in long-term value creation.
- **Q4 Outlook**: Revenue $69.5M-$71M, EPS $0.38-$0.40, with gross margin expansion to 46-47% as GenAI productivity gains offset headcount reductions.

**【CEO Summary Section】**
- **Revenue Performance**: Q3 revenue before reimbursements was $72.2 million, down 7% YoY, driven by a 25% decline in Oracle Solutions due to extended client decision-making and a non-renewed IPaaS contract. Global S&B T segment grew 4% excluding OneStream and IPaaS impacts.
- **AI XPLR Version 4 Impact**: The release of AI XPLR v4 in September 2025 has generated significant client and partner interest, with one partner describing it as 'game-changing.' The platform's ability to integrate existing automation footprints and deliver Agentic AI solutions faster than competitors is a key differentiator.
- **Strategic Alliances**: In discussions with 2+ enterprise software companies for potential alliances, leveraging AI XPLR's GenAI capabilities. Celonis partnership enables clients to combine Process Intelligence with AI XPLR for faster ROI realization.
- **Talent Optimization**: Reduced headcount by 717 consultants (QoQ) to align with demand and accelerate GenAI productivity gains, with further efficiency improvements expected.

**【CFO Financial Commentary】**
- **Financial Highlights**: GAAP net income of $2.5M ($0.09 EPS) vs. $8.6M ($0.31 EPS) YoY. Adjusted EPS of $0.37 met guidance midpoint. Adjusted EBITDA margin of 21.2% vs. 22.7% YoY.
- **Cash Flow & Buybacks**: Generated $11.4M in operating cash flow. Repurchased 1.1M shares ($22.9M) at $20.70 avg price. Board authorized $40M Dutch tender offer ($18.30-$21/share) to repurchase ~8% of outstanding shares.
- **Q4 Guidance**: Revenue before reimbursements expected $69.5M-$71M. Adjusted EPS $0.38-$0.40. Gross margin 46-47%, EBITDA margin 22-23%.

**【Q&A Key Highlights】**
- **Alliance Timing**: CEO expects 1-2 major alliances in near term, with partners prioritizing AI XPLR v4's unique capabilities over legacy platforms.
- **Licensing Progress**: AI XPLR v4 licensing to begin late Q4/early Q1. ZBrain JV with founder to create SaaS GenAI orchestration platform.
- **S&B T Segment Growth**: GenAI-related revenue growth offset OneStream weakness. 23% of revenues recurring, migrating IPaaS to AI XPLR.
- **Share Buyback Rationale**: Uses pristine balance sheet to return capital while maintaining 1x EBITDA leverage. Buybacks accretive to EPS.

The Hackett Group, Inc. (HCKT) Q3 2025 Earnings Call Transcript

- **Gen AI Growth Driver**: GSBT segment up 5% YoY, with Gen AI engagements offsetting OneStream decline. Celonis partnership to accelerate AI adoption.
- **Financial Resilience**: Q2 revenues $77.6M, adjusted EPS $0.38. Q3 guidance: $73-74.5M, adjusted EPS $0.36-0.38.
- **Strategic Innovations**: AI XPLR v4 launch imminent; Accelerator platform to boost implementation efficiency by 20%.
- **Restructuring for Efficiency**: $1.5-2M Q3 charges to reduce non-Gen AI headcount, aligning with productivity gains.
- **Client Demand**: Over 50% of new engagements include Gen AI, with focus on customer service and GBS automation.

**【CEO Opening Remarks】**
- Reported Q2 2025 revenues before reimbursements of $77.6 million, with adjusted EPS of $0.38, meeting guidance. Gen AI engagements drove 5% growth in GSBT segment, offsetting OneStream weakness.
- Announced partnership with Celonis to combine AI XPLR/ZBrain with Celonis' process intelligence, targeting high-ROI Gen AI transformations. Version 4 of AI XPLR set to launch, enabling rapid solution design and workflow orchestration.
- Oracle Solutions segment down 7.5% due to delayed replacement of a large engagement; SAP Solutions up 11% on software sales backlog.
- Balance sheet strength: $10.1M cash, $17M remaining buyback authorization, and $23M debt. Board approved $13M buyback increase.

**【CFO Financial Commentary】**
- Total revenues before reimbursements: $77.6M (2% YoY growth). GSBT: $43.6M (+5% YoY); Oracle: $20.5M (-7.5% YoY); SAP: $13.5M (+11% YoY).
- Adjusted gross margin: 42.8% (vs. 42.3% prior quarter). Adjusted EBITDA: $16.1M (20.7% of revenues). GAAP net income: $1.7M ($0.06 EPS) vs. $8.7M ($0.31 EPS) prior year.
- Q3 2025 guidance: Revenues $73-74.5M, adjusted EPS $0.36-0.38. Restructuring charges $1.5-2M to reduce non-Gen AI headcount. Cash flow expected to improve sequentially.

**【CEO Strategic Update】**
- Gen AI-enabled transformations are a 'generational opportunity.' AI XPLR v4 integrates Hackett IP, allowing clients to design Gen AI solutions 10x faster. JV with LeewayHertz to commercialize AI XPLR/ZBrain as SaaS.
- Accelerator platform uses Gen AI to improve implementation efficiency by 20%. New executive advisory program targets CIOs/CTOs with Gen AI solutioning.
- Talent focus: Hiring for Gen AI capabilities, with headcount up 21% YoY to 1,382. Restructuring to align with Gen AI productivity gains.

**【Q&A Highlights】**
- **Partnerships:** Celonis deal to launch Q3; exploring other channel partnerships. AI XPLR licensing expected soon.
- **Headcount Management:** Oracle/OneStream restructuring to address delayed replacement; Gen AI teams fully staffed.
- **Gen AI Applications:** Customer service automation, GBS process optimization. Over 50% of new engagements include Gen AI.
- **Market Uncertainty:** Clients prioritizing Gen AI despite macro concerns; Q2 results unaffected by tariffs.
- **AI XPLR v4 Feedback:** Early demos show platform's completeness and differentiation vs. competitors.

The Hackett Group, Inc. (HCKT) Q2 2025 Earnings Call Transcript

- **Gen AI Growth Driver**: GSBT segment up 6% YoY, with Gen AI engagements offsetting declines in legacy practices.
- **Margin Expansion**: Gross margin improves to 43.4% due to high-margin AI work.
- **JV Catalyst**: ZBrain JV nearing completion; potential ARR and capital raise opportunities.
- **Cross-Sell Success**: 40% of Gen AI clients expand to traditional consulting projects.
- **Q2 Guidance**: Revenue $76-77.5M, EPS $0.37-0.39, with focus on Gen AI licensing and channel partnerships.

**【CEO Business Overview】**
- Q1 2025 total revenue: $77.9M (+1% YoY), with Gen AI consulting & implementation driving 6% growth in GSBT segment.
- AI Explorer v3 enables enterprise-wide AI solution simulation, prioritizing high-ROI use cases and recommending AI agents for orchestration.
- JV with LeewayHertz (ZBrain platform) nearing completion; expects ARR licensing revenue and potential capital raise opportunities.
- Cross-selling success: 40% of Gen AI engagements lead to traditional digital transformation projects.

**【CFO Financial Highlights】**
- Adjusted EPS: $0.41 (high end of guidance), up 5% YoY.
- Gross margin: 43.4% (vs 41.4% YoY), driven by higher-margin Gen AI work.
- Operating cash flow: $4.2M; DSO: 73 days (up from 66 days Q4 2024 due to milestone-based contracts).
- Q2 2025 guidance: Revenue $76-77.5M, EPS $0.37-0.39, gross margin 43-44%.

**【Q&A Key Takeaways】**
1. **Gen AI Pipeline**: 50% of client engagements progress to implementation; expects acceleration in H2 2025 with channel partner integrations.
2. **JV Progress**: ZBrain platform already signing clients; JV agreement expected in 30-45 days.
3. **Oracle/SAP Outlook**: Oracle down due to post-go-live wind-down; SAP up on software sales but Q1 headwinds from Q4 2023 investments.
4. **Capacity Scaling**: +60-70% Gen AI resources added since 2024; hiring continues for U.S. market-facing teams and offshore ZBrain capabilities.
5. **AI Licensing**: AI Explorer licensing program begins Q3 2025; ZBrain licensing already generating ARR.


The Hackett Group, Inc. (HCKT)-6 May 25-2025 Q1 Earnings call transcript

- **Q4 Revenue Beat**: $79.2M total, driven by +51% SAP segment and Gen AI consulting growth. Gen AI revenues have higher margins than traditional consulting.
- **Gen AI Platform Integration**: AI XPLR + ZBrain enables end-to-end Gen AI solutions. Q4 saw clients move from education to budgeted projects, with pipeline momentum expected in 2025.
- **Financial Strength**: Adjusted EPS up 20% YoY to $0.47. Gross margin improves to 47.7% due to Gen AI and SAP sales. Q1 2025 guidance: $0.39-0.41 EPS.
- **Strategic Acquisitions**: LeewayHertz and ZBrain JV driving Gen AI implementation and SaaS growth. SAP Solutions segment poised for strong 2025 demand despite Q1 seasonality.
- **Client Adoption**: 2025 IT budgets shifting to Gen AI, with enterprise apps integrating AI agents. ZBrain JV begins licensing, targeting ARR growth.

**【CEO Summary Section】**
- Total Q4 2024 revenue: $79.2 million (exceeding guidance), driven by overperformance in SAP segment (+51% YoY) and Gen AI consulting growth in GSBT segment (+4% YoY). Gen AI revenues have higher margins than traditional consulting.
- Gen AI strategy: AI XPLR platform now integrates ZBrain's multi-agent workflow orchestration, enabling end-to-end Gen AI solutions from ideation to implementation. Q4 saw clients moving from education to budgeted projects, with pipeline momentum expected to accelerate in 2025.
- Acquisitions: LeewayHertz (Gen AI implementation) and ZBrain JV (Gen AI SaaS) are driving accretive revenue growth. Q4 2024 Gen AI-related revenue growth partially offset declines in eProcurement and OneStream practices.
- SAP Solutions segment: Strong Q4 performance due to expanded sales force, but Q1 2025 outlook tempered by seasonality. Expect strong demand throughout 2025 as clients adopt Gen AI-enabled solutions.
- Executive advisory: Sequential and YoY revenue growth driven by Gen AI-infused programs. Launching premium advisory program targeting CIOs/CTOs.

**【CFO Financial Commentary】**
- Q4 2024 adjusted EPS: $0.47 (vs. $0.39 YoY), exceeding guidance. GAAP net income: $3.6 million ($0.12 EPS) vs. $7.9 million ($0.28 EPS) YoY, impacted by stock comp expenses.
- Gross margin: 47.7% (vs. 43.3% YoY), driven by higher-margin Gen AI consulting and SAP value-added reseller sales.
- SG&A: $18.4 million (23.7% of rev) vs. $15.4 million (21.6% YoY), up due to commissions and incentives.
- Q1 2025 guidance: Revenue $75-76.5M, adjusted EPS $0.39-0.41. Global SBT segment expected +5-10% YoY, while Oracle/SAP segments down 8-10% YoY.
- Cash flow: $20.6M from ops (DSO 66 days). Stock buybacks: $3.6M in Q4, $27.5M remaining. Dividend increased 9% to $0.48 annualized.

**【Q&A Highlights】**
- **Gen AI Pipeline**: Clients shifting from education to budgeted projects in Q4, with 2025 IT budgets increasingly allocated to Gen AI. AI XPLR v3 release in Q1 2025 will enhance AI use case simulation capabilities.
- **SAP Momentum**: Q4 software sales record high, but Q1 2025 outlook tempered by seasonality. Expect strong 2025 demand as clients adopt Gen AI-enabled solutions.
- **eProcurement/OneStream Headwinds**: Q4 GSBT segment growth partially offset by weakness in these practices, likely due to enterprise application companies integrating Gen AI agents.
- **Joint Venture (ZBrain)**: Starting to sign licenses, with clients choosing between consulting engagements or platform licensing. JV aims to generate ARR through Gen AI SaaS.
- **Talent Strategy**: Headcount +10% YoY (1,284 total), focused on Gen AI, data, and technology architects. Moderate turnover trend expected to continue.

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