The Hackett Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the quarter ended September 25, 2026, was $69.8 million, a decrease from $73.1 million in the prior year period; revenue before reimbursements was $68.9 million compared to $72.2 million in the prior year.
• GAAP diluted earnings per share (EPS) increased to $0.14 from $0.09 in the prior year quarter.
• Adjusted diluted EPS was $0.39, up from $0.37 in the prior year quarter and at the high-end of the guidance range.
• Net income was $3.557 million, compared to $2.547 million in the prior year quarter.
• Operating income was $7.485 million, compared to $5.459 million in the prior year quarter.
• Cash balances were $12.6 million as of September 25, 2026, with $86.1 million outstanding on the credit facility.
• Accounts receivable and contract assets, net, increased to $67.86 million from $59.5 million at the end of the prior fiscal year.
• Contract liabilities (deferred revenue) decreased to $11.685 million from $12.317 million at the end of the prior fiscal year.
• Cash provided by operating activities for the quarter was $1.802 million, compared to $11.395 million in the prior year quarter.
• Capital expenditures were $3.151 million for the quarter.

Guidance and Future Outlook:

• Fourth quarter 2026 total revenue before reimbursements is estimated between $68.0 million and $70.0 million, reflecting 6% to 8% fewer available days due to holidays and vacations.
• Fourth quarter 2026 adjusted diluted EPS is estimated between $0.39 and $0.41, assuming a GAAP effective tax rate of 26.5%.
• Cash flow from operations for the fourth quarter is estimated to increase sequentially by approximately $15.0 million to $20.0 million, with a corresponding decrease in accounts receivable of $4.0 million to $5.0 million.
• Management expects AI platform benefits to drive increasing operating leverage and margin expansion, strengthening confidence in growth and profitability prospects for 2027.

Business Segments and Product Lines:

• Global S&BT segment revenue before reimbursements was $36.619 million, down from $42.398 million in the prior year; segment contribution was $10.792 million compared to $13.241 million.
• Oracle Solutions segment revenue before reimbursements was $15.907 million, down from $16.353 million in the prior year; segment contribution increased to $5.015 million from $2.681 million.
• SAP Solutions segment revenue before reimbursements was $16.408 million, up from $13.415 million in the prior year; segment contribution increased to $5.170 million from $3.663 million.
• Total segment contribution was $20.977 million, compared to $19.585 million in the prior year quarter.
• The company utilizes AI platforms XT and AIX across enterprise transformation and software implementation offerings to improve sales and delivery productivity.

Market and Competitive Landscape:

• The company serves 98% of Dow Jones Global Titans, 97% of the Dow Jones Industrials, and 90% of the Fortune 100.
• Customer concentration for the quarter showed the top customer accounted for 4% of total revenue, the top 5 customers accounted for 15%, and the top 10 customers accounted for 24%.
• Consultant headcount was 1,210 as of September 25, 2026, down from 1,317 in the prior year quarter; total headcount was 1,474 compared to 1,599.
• Days sales outstanding (DSO) was 64 days, down from 71 days in the prior year quarter.

Risks and Challenges:

• Forward-looking statements involve risks including the ability to effectively market digital transformation services, transition capabilities to support generative AI-related services, and integrate acquisitions.
• Risks include competition from other consulting and technology companies, the commercial viability of services, and the ability to manage joint ventures.
• Non-GAAP forward-looking measures cannot be reconciled to GAAP measures without unreasonable effort due to the high variability and low visibility of excluded items such as stock-based compensation and tax adjustments.

Management Commentary and Tone:

• CEO Ted A. Fernandez stated the company is building momentum as the market recognizes that AI transformation requires deep expertise and IP beyond technology.
• Management expressed confidence that the scaling benefits of AI platforms will drive operating leverage and margin expansion.
• The tone indicates a focus on realizing benefits from the AI transition strategy and strengthening growth and profitability prospects for 2027.

Analyst Questions and Answers:

• No specific analyst questions or answers are included in the provided press release text.

Other Key Points:

• The Company repurchased $2.5 million of its common stock during the quarter.
• The Company paid dividends of $3.0 million during the quarter.
• $16.3 million remained available under the share repurchase plan at the end of the quarter.
• The Board of Directors declared a fourth quarterly dividend of $0.12 per share for shareholders of record on December 24, 2026, payable on January 8, 2027.
• Restructuring costs for the quarter were $1.433 million, compared to $3.112 million in the prior year quarter.
• Non-cash stock-based compensation expense was $2.309 million for the quarter.