Q1 FY2027
Filed Oct 7, 2026Revenue declined to $98.1 million and RGP reported a net loss of $8.0 million as lower Consulting project volume and utilization outweighed lower SG&A expenses.
Revenue was down versus the prior-year quarter, gross margin declined, and the Company moved from positive Adjusted EBITDA to an Adjusted EBITDA loss. Cost reductions lowered GAAP and adjusted SG&A, but did not offset lower project volume, utilization, and billable hours.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $98.09M | – | – |
| Same-day constant currency revenuenon-GAAP | $97.97M | – | down 18.4% |
| Cost of servicesGAAP | 61,420 | – | – |
| Gross profitGAAP | $36.67M | – | – |
| Gross marginGAAP | 37.4% | – | – |
| Selling, general and administrative expensesGAAP | $43.08M | – | $4.8 million improvement |
| SG&A expenses as a percentage of revenueGAAP | 43.9% | – | – |
| Run rate SG&A expensesnon-GAAP | $40.31M | – | – |
| Amortization expenseGAAP | 634 | – | – |
| Depreciation expenseGAAP | 263 | – | – |
| Loss from operationsGAAP | −$7.31M | – | – |
| Interest income, netGAAP | 240 | – | – |
| Other incomeGAAP | (19) | – | – |
| Loss before income tax expenseGAAP | −$7.53M | – | – |
| Income tax expenseGAAP | 442 | – | – |
| Effective tax rateGAAP | 5.9% | – | – |
| Net lossGAAP | −$7.97M | – | – |
| Net loss marginGAAP | 8.1% | – | – |
| Basic loss per common shareGAAP | $(0.23) | – | – |
| Diluted loss per common shareGAAP | $(0.23) | – | – |
| Adjusted diluted loss per common sharenon-GAAP | $(0.16) | – | – |
| Weighted-average basic shares outstandingGAAP | 34,554 | – | – |
| Weighted-average diluted shares outstandingGAAP | 34,554 | – | – |
| Adjusted EBITDAnon-GAAP | −$3.62M | – | – |
| Adjusted EBITDA marginnon-GAAP | (3.7%) | – | – |
| EBITDAnon-GAAP | −$6.39M | – | – |
| Consolidated average bill rateother | $114 | – | decreased 5.8% year over year |
| Average pay rateother | $54 | – | – |
| Billable hoursother | – | decreased 13.2% year-over-year | |
| Pay/bill ratioother | – | declined 70 basis points | |
| Agile consultant headcount - on assignment, during periodother | 1,976 | – | – |
| Salaried consultant headcount - average of periodother | 373 | – | – |
| Cash and cash equivalentsGAAP | $61.23M | – | – |
| Trade accounts receivable, net of allowance for credit lossesGAAP | $69.73M | – | – |
| Total assetsGAAP | $231.9M | – | – |
| Current liabilitiesGAAP | $51.09M | – | – |
| Total liabilitiesGAAP | $70.62M | – | – |
| Total stockholders' equityGAAP | $161.3M | – | – |
| Cash flow -- operating activitiesGAAP | −$18.86M | – | – |
| Cash flow -- investing activitiesGAAP | −$269K | – | – |
| Cash flow -- financing activitiesGAAP | −$1.88M | – | – |
| Common shares outstanding, end of periodother | 34,702 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| On-Demand TalentBillable hours decreased 16.4%, partially offset by a favorable increase in the average bill rate of 4.1%. The change in billable hours reflected reduced demand for operational accounting roles, while pricing discipline supported the average bill rate. | $38.56M | – | decrease of 13.2% |
| ConsultingBillable hours decreased 27.1%, partially offset by a favorable 2.2% increase in the average bill rate. Lower project activity, cautious client commitments, longer decision cycles, and delayed project starts drove the billable-hours decline. | $32.38M | – | decrease of 25.8% |
| Europe & Asia PacificThe decline reflected a 12.2% decrease in the average bill rate and a 1.3% decrease in billable hours. The average bill rate was affected by a mix shift to lower cost markets in the Asia Pacific region. | $17.13M | – | 13.9% decrease |
| Outsourced ServicesBillable hours increased 4.9%, while the average bill rate declined 1.0%. | $10.02M | – | remained flat year over year |
| All OtherThe segment was eliminated as of May 30, 2026 following the sale of Sitrick during the fourth quarter of fiscal 2026. | — | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- The Company paid a quarterly dividend of $0.07 per share on October 1, 2026, or $2.4 million in the aggregate, to stockholders of record at the close of business on September 3, 2026.
- Cash dividends declared per common share were $0.07 compared to $0.07.
- Total cash dividends paid were $2,412 compared to $2,316.
What drove it
- Revenue declined as client decision-making timelines lengthened, project starts were delayed, and Consulting project volume was lower.
- On-Demand Talent demand remained below prior-year levels but showed signs of stabilization.
- Gross-margin variance was primarily due to lower utilization of salaried consultants.
- SG&A improvement was driven primarily by lower employee compensation and benefits costs, lower stock-based compensation, reduced use of consultants supporting internal initiatives, and lower facilities costs.
- The average bill rate reflected a geographic revenue-mix shift toward regions with lower bill rates and the May 2026 sale of Sitrick.
Concerns
- Consulting revenue declined 25.8% as clients remained cautious about new projects.
- The Company reported a net loss of $(7,970) and Adjusted EBITDA of $(3,624).
- Gross margin declined to 37.4% from 39.5%, primarily due to lower utilization of salaried consultants.
- Cash flow -- operating activities was $(18,861), including annual incentive compensation, operating losses, executive transition, and restructuring payments.
- The tax benefit on losses was limited because losses in certain domestic and foreign jurisdictions did not result in a tax benefit due to valuation allowances.
What to watch
- Whether sales execution, Consulting project staffing, and utilization improve as management's initiatives progress.
- Whether On-Demand Talent demand stabilization and pricing discipline translate into revenue growth.
- The pace of client decision-making, project starts, and Consulting pipeline conversion.
- Further cost-structure actions and their impact on SG&A, restructuring costs, and profitability.
- Cash usage from operations and borrowing capacity under the PNC Bank credit agreement.
Balance sheet and cash flow
- As of August 29, 2026, cash and cash equivalents totaled $61.2 million.
- The Company had up to $24.1 million of borrowing capacity available under its credit agreement with PNC Bank.
- The Company used $18.9 million in cash from operations during the three months ended August 29, 2026 compared to cash used in operations of $7.8 million during the three months ended August 30, 2025.
- Cash used in operations was impacted primarily by the payout of annual incentive compensation in July, operating results in the first quarter, and payments related to executive transition and restructuring activities.
Analysis
RGP reported first-quarter fiscal 2027 revenue of $98,086, compared with $120,229 in the prior-year quarter. Same-day constant currency revenue was $97,966 and was down 18.4% compared with the prior-year quarter. The decline was led by Consulting, where revenue was $32,380 and decreased 25.8%, while On-Demand Talent revenue was $38,559 and decreased 13.2%. Management attributed the revenue pressure to longer client decision-making timelines, delayed project starts, lower Consulting project volume, and On-Demand Talent demand that remained below prior-year levels.
Profitability deteriorated with the lower revenue base. Gross margin was 37.4%, compared with 39.5%, primarily because of lower utilization of salaried consultants, while pay/bill ratio declined 70 basis points. The Company recorded a loss from operations of $(7,307), net loss of $(7,970), and diluted loss per common share of $(0.23), compared with a net loss of $(2,405) and diluted loss per common share of $(0.07). Adjusted EBITDA was $(3,624), compared with $3,065, and the Adjusted EBITDA margin was (3.7%), compared with 2.5%.
Cost actions reduced SG&A expense to $43,076 from $47,916, while run rate SG&A expenses were $40,309 compared with $44,508. The reported improvement reflected lower compensation and benefits following fiscal 2026 reductions in force, lower stock-based compensation, reduced use of consultants supporting internal initiatives, and lower facilities costs. These improvements were partly offset by increased business meeting expense and restructuring costs. Despite lower SG&A dollars, SG&A represented 43.9% of revenue, compared with 39.9%, reflecting the revenue decline.
Liquidity declined during the quarter. Cash and cash equivalents were $61,229 as of August 29, 2026, versus $82,372 as of May 30, 2026. Cash flow from operating activities was $(18,861), compared with $(7,832), with annual incentive compensation payouts, operating results, executive-transition payments, and restructuring activity identified as drivers. The Company reported up to $24.1 million of borrowing capacity and paid a quarterly dividend of $0.07 per share, or $2.4 million in the aggregate.
Management stated that results were within the revenue and gross-margin ranges communicated in July and that adjusted SG&A was better than its outlook, but the filing does not provide the underlying prior outlook ranges. The operating focus is on strengthening sales execution, improving Consulting staffing and utilization, and reducing the cost structure. Near-term attention centers on whether stabilization in On-Demand Talent, disciplined pricing, strategic-client performance, and pipeline opportunities can offset continued caution in client decisions and restore revenue growth and profitability.
Management, verbatim
Our first-quarter results were within the revenue and gross margin ranges we communicated in July, with adjusted SG&A expense better than our outlook.
Roger Carlile, President and Chief Executive Officer of RGP
However, our revenue and profitability remained below our potential, driven primarily by lower project volume and utilization in Consulting and ongoing caution in client decision-making.
Roger Carlile, President and Chief Executive Officer of RGP
We remain confident in the long-term demand for RGP’s integrated model, which combines on-demand talent, consulting, and managed services to help clients move from strategy to execution.
Roger Carlile, President and Chief Executive Officer of RGP
Not in the filing
stated, not guessed- Numerical forward guidance for revenue, gross margin, operating expenses, tax rate, earnings, or other metrics was not provided.
- The prior release outlook and its numerical guidance ranges were not provided, so comparison with prior guidance is unavailable.
- Free cash flow was not reported.
- A debt balance was not reported.
- Share repurchases were not reported.
- A numerical prior-quarter change was not printed for revenue, segments, margins, earnings, EPS, Adjusted EBITDA, or other operating metrics.
- The current-period numeric billable-hours value and pay/bill-ratio value were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.