HCKT - Earnings call transcript Q1 2019

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Operator

Welcome to The Hackett Group First Quarter Earnings Conference Call.

Your lines have been placed on listen-only mode until the question-and-answer session. Please be advised the conference is being recorded. Hosting tonight’s call are Mr. Ted Fernandez, Chairman and CEO and Mr. Officer. Financial Chief Ramirez, Rob Mr. Ramirez, you begin. may

Rob Ramirez

Good discuss The everyone, and results. thank to us joining for Hackett you afternoon, Group’s Quarter First

Speaking over and and are today Ramirez, Time. CFO. Group on answer announcement Rob at the questions was X:XX press your Eastern released and here myself, Ted wires of CEO to Chairman A The the Hackett Fernandez, call p.m.

the www.thehackettgroup.com. copy of release, a our at please For website visit

that data will not also Relations additional any the on on contained is We call release financial or in discussed page this statistical of place the Investor our website.

for may would estimates to expected purposes comments, about predict the a to statements in we and I securities federal accurate. I considered expectations, begin, filings. involve particularly we These statements SEC that of forward-looking the question-and-answer guarantee not be of in will you future following results, Before to in which the should assumptions in session, the They the risks, our These factors like risk like the point, current results information, vary. At our Actual turn statements with conjunction and laws. would and it projections performance. to remind only over which Ted. statements that relate are may making future and this uncertainties and forward-looking may difficult not detailed be are contained to be be

Ted Fernandez

quarter our call. to Thank everyone first earnings you and Rob welcome

guidance. well results, As call over as turn it to back detailed comment flow as Rob on comment we some then cash normally will I’ll I the do, open the operating quarter. comments with to on overview on

revenue Q&A. momentum in per in activity guidance. start occurring then revenues and earnings Business market and of driving now We our is pro open EEA as up picked $X.XX, we transactions business is the will increasing increased our million of the in across pipeline is January, which driving What reported to net Cloud Strategy Leap during benchmark are off starting comments, or as After QX group. increased with we both Quantum strong over we is force EEA it afternoon, growth Cloud, our offset as line EPM investments see decline for a quarter this implementations. for share progressed, well guidance. ERP, in seeing which our an our be related our are Consistent the with then and transformations; to quarter we group as quarters, by in made both forma up and This opportunities the in on-premise and we organizations. go will both were prior our transformation which pay initiatives as analytics our practices our for with group, digital related is Group multiyear of continue in $XX.X strategy Transformation our to implementation encouraging and referring to continued have NextGen our The application our now platform number engagement well. we I’m In to S&BT slow

last However, both in up the flat decreasing as growth Cloud our revenue communicated the on-premise QX the implementation we allow be to group combination continued on and of to earnings this exposure will our call. to quarters

better EEA than came we which group, Our expected. be in which within will SAP flat the group, reported now is

engagement. a Europe we will discontinued QX. had portion and meaningful group exclude QX, than expect weaker global large revenues, working International project experienced continue the mentioned and of the down you REL were recall, which expected. as into cancellation we that to We a improvement this In capital the of XX%

to up and to hurt one clients of year. expect we be second quarter, have of the the now second performance European our in our will flat the half large Although group replaced continue Europe the in to

On IP, have or introduction our our offerings the Digital and of Quantum call made we fully to next of our Hackett as that Leap, digitize strategic our it, Transformation all side, differentiate the investment followed our launching with and we drivers the along generation investments believe benchmarking our growth. with highly DTP Platform, Institute our important we are proprietary Hackett platform of go-to-market

Additionally, digital automation, are software procurement will with transformation strategic to in our momentum. smart growing, investments in strategy relationships our EPM providers along rapidly key be and

but our partners, relationships introduction Last have of successful Some overall to IP-as-a-service strategy. a offerings of through position are our accelerated our digital important these strategic least, and further our growth transformation as growth impact yet have but of revenue not drivers IP-as-a-service leader.

side, On also and required. I comment ask our cash strategy me comment our This to Rob? continuing outlook. that, strong fund increase invest let and provide and in business allows Rob the on market I our also dividend, stock buyback do us But flow continue and we operations. to will operating while results, generate as cash further growth on sheet on conditions. before acquisitions balance from details flow to to

Rob Ramirez

Thank you, Ted.

and the an operating topics I our the with the of financial statistics. our results second on portion I cash an for flow quarter first I do, As XXXX. outlook XXXX I will the call. of this quarter activities will cover along will an with then I provide during key our will of discussion quarter overview cover the during typically related following overview of of conclude overview

this results Transformation and Strategy analytic For Group, the financial purposes company. or and comment EEA of group, EPM ERP, our solutions the regarding and call, of separately Business and will our S&BT or I total

advisory and results the Our practices. services S&BT benchmarking programs, group executive transformation business includes our of

Please the Hackett. from past that solutions how have commented practices. group Oracle EEA we solutions of our Our been whereas in which EEA this includes have note grouped discussed SAP previously practices the from the under SAP differs and other results we solutions separately

reimbursable represents to In expenses addition, my in expenses. excluding note reversible net references gross revenues revenues all discussion that to please including revenues represent references and revenues,

All our XXXX which for at our financial of historical information end in exclude excludes working to our page accounted investor XXXX practice call operations the recast relations discussed has our of been capital REL discontinued purposes. capital that on on comparability discontinued operations for has fourth European exited recast Website. our discussed is practice REL as based As European call, All the posted we data on working statements. quarter been historical based this

as which results rate references expense, of tax GAAP. tables pro non-cash that are and intangible Additionally, non-cash stock adjustments XX%; adjustments amortization purchase expense consideration cash compensation the related release. on of are non-recurring contains to compensation acquisitions our and long-term under Acquisition all compensation to press requirements which detailed forma normalized portion exclude and the reflected a the expense for are accompanying cash expense assumes of service-vesting of asset

XXXX by for no through X.X% expenses, are our quarter first range. to Fiscal both ratio and first prior net X.X% revenues impact associated $XX.X margin was compared a Reimbursable revenue the Reimbursable from to XXXX. client the on revenues the or operations to line continuing net XXXX our expenses and For decreased travel-related million expenses expense year our which has and company guidance profitability. of is reimbursable quarter when to past operations services and which of of primarily XXXX, $XX.X primarily with programs, revenues group, in quarter again S&BT project, Including our were a in practices XXXX; million a million first our gross includes had were the basis; which and revenues year-over-year X.X% discussed in to continuing revenues business start for Net lower resulting quarter decrease first transformation slow of as benchmarking on last quarter. due January we $XX.X of X.X%. international decrease represents our of executive from a year-over-year the advisory

on practices, sequential a in Net strongly However, be first basis expected. revenues EEA, the $XX.X a million includes of of we Oracle expect solutions SAP quarter second our will and quarter of in EEA were as basis XXXX; which a X.X% year-over-year the up on S&BT decrease again, for XXXX.

group this last of quarter we our quarter, the on-premise slow decline January. down in in first As the because discussed and to be we revenues of start expected

implementation Cloud revenue we which our year-over-year on-premise However, XX%. growth up XX% in to basis. our flat revenues with year-over-year of quarter EEA in basis COG comments resulting was will practices within our to on Specific a is second of approaching the the from implementation XXXX QX of that mix to Oracle EEA, revenue excess consistent expect improved call, continued a on be our to in our

XX% year SAP revenues, now Total total practice of XXXX. quarter was net to XXXX expected solution revenues better prior within also anticipated of it’s in for first Our second in quarter which compared than company to included continuing and XXXX operations to of to the prior net EEA, both as up accounted from flat when flat the revenues and year. compared were be international

discontinuance net compared due year-over-year totaled revenues profitability the in first XXXX cost – and sales, of This diluted prior January reimbursable and to forma net million, XX% of our per first XXXX. as discussed. of pro the $XX $XX.X Our quarter European quarter $XX.X of the or in the headcount the quarter $X.X SG&A net same quarter year. of XX.X% executive of revenues period and quarter million, the XXXX practice company was compared was and first our REL XX.X% quarter first at quarter quarter’s the in of revenues, rate income on revenues, of of gross or recurring stock million at pro XX.X% first $X.XX XX.X% the for pro the of first in which primarily company quarter the cash on-premise year. and amortization income of the year. $XXX,XXX. Pro was in $X company XX% XX%, forma was the reduction quarter for or groups, XXX of of per first forma gross rationalization the revenues the working was end of of in first AMS of revenues first company XXXX practice decrease $X.X net of forma XXXX, assume well million. XXXX the first in sequential company for revenues net quarter the $X.XX benefit XX.X% for in in to of as was include or margins the as advisory $XX.X EEA net our of net pro requirements. and prior prior revenues Cloud-based end diluted XXXX, XX% to consultant our XX% compensation forma expense totaled and compared to to share the in of of intangible as accounted quarter million to pre-tax to of an the the or of quarter as primarily first from as in total net million the midpoint resource quarter headcount is quarter liability of respectively. net the This in net is XXXX million, million, previously period as of the as income of The EBITDA forma to results XXXX. year. million a and expense and XXXX the XX% prior net revenues compared as first start expenses pro and XX.X% to to of represented the migration, S&BT for due $XX of revenues, slow margin quarter prior in resulting, the long-term previous asset Total Total XX% compared Total practice excludes year in the acquisition compared resources company represented first previous share million, the on XX.X% also which best approximately Pro of of excluding $XX.X to million of company at in margins respectively. $X.X first the the of in Pro net gross software same year year. guidance. was the forma compares XX.X% $X.X compared Total tax revenues and first the capital and XX.X% previous the forma quarter earn-out Total of the first cash XXXX total

XXXX. the was This offset to XXXX of first decrease shares quarter. in net dividend, obligations of was $XX.X the payment market primarily due GAAP of first adjusted acquisition and cash for adjustments the vesting attributable previous from or additional due income more and first our quarter the accounts first GAAP XX% quarter increases million, which non-cash of the to per to tax second Our $XX.X when well which $X.XX the higher activities than payable the quarter the million decreases for quarter expenses diluted first the XXXX quarter end items settle return repurchase Jibe to quarter the benefit to Net compared results incentive driven of cash XXXX. of on items open GAAP GAAP balances accrued tax accounts in activities in XXXX year. employee semi-annual was net for to included payments by and the bonuses share adjusted contingent the to relating the in expense as $X.XX quarter were by cash at first $X.XX net income to and was first by in compensation to million of non-cash $X.X at relating operating the $X.X $XX.X for pro the The company’s XXXX the compared liability $X.XX of fiscal in income was made first offset as forma totaling million previous end XXXX primarily by was of unfavorable equity XXXX for million, to of compared of as of earn-out earnings quarter results. partially the receivable. provided as

DSO outstanding Our sales end previous of days of at first to at or XX quarter days compared days XXXX the as of XX the the the were end quarter. the

At the last $X.XX first of second July its $X.X XXXX. per year, declared increase dividend paid for company the million its next an in of dividend which was the declared share, semiannual XXXX. Board quarter semiannual of be During over the of which Directors recent XXXX, will X% of meeting, paid in

of million, we purchases cost a tax of stock from vesting the withholding triggered to repurchased the including at total employees $X During first restricted approximately income shares of the by satisfy shares. quarter, XXX,XXX company’s

we Our cost million. to of of XX,XXX was stock total an the end at $X.X quarter, repurchased million. for shares remaining of the stock $X.X additional repurchase the authorization the a quarter of company Subsequent end the

I from balance the outstanding second the During turn now borrowed end million The debt to estimates the XXXX company in its $X quarter guidance our company’s the of was million. million second total at $XX will The million. range of the the first for of XXXX. for quarter, quarter revenue net of quarter facility. $XX the credit be of total the to company to $X.X

a and EEA group slightly the on basis. and be We S&BT to our expect both a group to on up up basis year-over-year sequential flat strongly

the revenues affected the basis, we quarter. million. year. range by We be lower On expect S&BT’s reimbursable revenues on gross up longer $XX.X of revenues to company The a international gross revenues half second to X% in be estimated flat to an a expenses. the year-over-year basis in The be guidance term adversely international to estimates second in of the million for $XX.X includes to expect revenue

this end earnings the pro quarter pro range, range EPS XXXX our a second of $X.XX share expect of of this the forma X%. $X.XX. in of in in We diluted increase to The high be would to year-over-year represent per forma

gross forma to pro expect on XX% We to revenues margin be XX%. net approximately

quarter million. be second expense the pro for approximately to forma interest and We expect SG&A $XX.X

the quarter of to EBITDA revenues XX%. on XX% second forma in approximately expect to be net range pro We

balances, activity impact like We basis. our Ted coming excluding strategic buyback to the for turn back up on market it the priorities and months. cash I At sequential expect this to outlook a to share to over of would be review point, our

Ted Fernandez

Rob. you, Thank

all intend we As with agenda that remains those that driving they we are of sort considering. believe really unchanged. focus – We initiatives to digital and initiatives transformation our clients our look are clients’ forward, our different help through

resulting organizations workflows enhanced services. sequential over to as fully technologies influencing transformation and redefining automated are that models capabilities activities RPA, order in development the Traditional, respond and changing how are applications, industries deliver and transformative businesses these in the of entire In fundamentally events or and As probably U.S., new transformation based artificial at linear includes with to way years which intelligence I competitive. is last the intelligence. to digital rapid really business said several and forcing an compete increased is their changing dramatically Digital in pace last adopt quickly repeatedly change to dynamic the the companies digital the accelerated quarters couple environment. these determine competitive to cloud remain

growth are seeing growth transformation cloud and our digital prospects. in the We engagement improved

to cloud continue the becomes smaller part of benefits start a transformation of After best our results, transformation Long-term our capital grow on-premise our to I the clients favorable our just around momentum these our beyond. is company’s As and and continue benchmarking total brand and revenue and which building digital transition we that quarter increasingly January do to clear. to will throughout built engagements our so. intellectual by strategies that practice digital complete to slow new revenues, QX our adversely impacted and believe become activities we our allows defined, offerings QX build of capabilities

also global relative to our new benchmarking our IP and over significantly starting effort. with Software just art Leap, to service leadership, The benefits we initiatives of you to their are a deliver new heard and new information more platform. state we less know have allows and life as Service benchmarking to platform have Specifically leverage transformation you this a our respective that Solution. repeatedly us of effort. client as digital see the allows It called We from Quantum launched our track the clients the believe

digital capabilities. our IP unique We platform. to and have And also transformation help was related the further launched this our differentiate

help our So is believe IP and we clients. and helping we and our to aligning transformational digitizing platform differentiate us this deliver consulting services by define services our and change, our clients technology proven solutions to fully organizational drive how redefining

to further attract can alliance utilize DTP, benchmarking it IP – we believe benefit and also. help offerings. These This or them differentiate unique expect our and to are sell practice and should leveraging best our partners we their and allow to expand software that We and our solutions service IP-as-a-service new digital significantly. can platform expand transformation partners as refer to us

now our across nearly new grow. thousand ADP other to offerings. a our continue our clients Last launching IP-as-a-service our Workforce have We by ADP we opportunities expanded ADP These IP year to platforms and with executive Now increase with advisory our access and platforms. programs offerings

continue of attract to will to success partners program, we the we the programs. other similar Given believe strategic

January our alliances to though acquisitions and we we and our related is to though QX good the in Lastly, It impacted goals client scale in our areas strategically our accelerate strong start can base summary, into long-term that offerings really leverage demonstrates transformation which platform see it our business, pipeline XXXX. we are In resume revenues even growth. sequential and QX. results, to we and key that even the and add investments slow look to ability and our believe scope, continue on-premise capability the to growth have our digital in for grow activity are our IP making in growth the and the profitability decline

by always within our our highly section great our As call. over of them operator for our opportunities urge always, into efforts clients, Those let me stay the close my move our to focused organization. and to available and it their Q&A the me thanking and comments, let associates Operator? our tireless people turn on conclude

Operator

Thank you.

first the begin question-and-answer with from [Operator We Instructions] comes will William Blair & question Company. McHugh now session. Tim Our

Your open. line is

Tim McHugh

Yes.

Sorry.

improving a the seeing the what versus behavior were the guess guess there the color of kind within a and you to behind from later I can you change, early business and hearing trends particular clients, of was First, in so quarter put more just how I I just more that differently, changed on trying part the quarter? maybe quarter felt in what you the just elaborate trends did guess heard little

Ted Fernandez

were you disappointed as so we as us of a kind of know, the away extra the much of over least give that really of which happened see Tim to week, we throw of in January. that couple at part January of normal first cadence you kind the one know, And seemed really a have to experienced had we Well, incredibly and where years. significant somehow in off instead holidays very

into to consistent. So, rate throughout mean, engagements we higher the the increase in saw no, which pretty dollars both We also pipeline, that and at and a saw meaningful in activity progress reengaging that QX. we’re in quarter quarter, overall we I start into clients are able closed then the reflected now the was and in continuing

that – saw just I we we know under pretty hate January. answers, in people say, the we a to increase – should all almost than weaker So, what because natural start the had I expected

Tim McHugh

Okay. customers or the seeing? – just And notice Cloud talk elaborate deals the size the the then X of Are top side, you the did point? at about if some of at to the seeing on all? that revenue top – change the can that X, other you’re maybe you from this that of I relates business part business kind increase,

Ted Fernandez

as In no, of But, this probably on. S&BT, into QX you’ll probably but really they part report to QX, some quarter, and we move move size more that of related changed. hasn’t we as deals see will be

we when we in of really trying were business. decided into accomplish that as a of deals our were to I more we to exited what think us going been in we the size want for we do the and I inside ERP is, lot pursuing think ‘XX we of as ‘XX changed look we’ve at judicious ‘XX what what side

to As came part was you Hackett of a which influence as the us, new to continuing we’ve try that’s total that to acquisition, been it know there. an business bring

deal increase with acquired the getting us. in they’re that an seeing size seen have versus was the group what We

So that the there as in very seeing that’s ‘XX referred we has that for side Cloud growth Rob deals, throughout large be of the away the ERP tried the there, as clearly part upper we’ve stay deal on been and which increased of to were we’ve a end, from haven’t, to. extremely hunting encouraging some we even these lot though more described selective size you’re we

increase that as didn’t in pipeline the said the as the side at that, the Oracle seen quarter, deals really an on change as we if of the well. – the much. side, EPM EPM – we On deal versus size welcome – side have the so it in look side the deal in pipeline Having didn’t well,

which increase what in anything because from increasing with have playing we’re it not getting was trying we’re And, that terms or global the number to again, sure clients X’d trying that a simply consistent in that want making with of not make dollars park, of doing. either because to of we’re to a reach end something is only of really differ we a have with the we’re I the and opportunity size, don’t again, would selection hit that but the not were process. very So, absolute of very mentioned pipeline it at we to in out comes strong kind deals, relationship ‘XX credibility is of I ends sure out that the think, of up that

Tim McHugh

helpful. Okay, you. great. That’s Thank

Operator

[Operator Instructions] ROTH with Jeff Partners. Our Martin from Capital next question comes

open. is line Your

Jeff Martin

Rob. Good and Ted Thanks. afternoon,

Ted Fernandez

Hey, Jeff.

Rob Ramirez

Jeff. Hi,

Jeff Martin

on Leap. like you sounds if – on also optimistic on the near-term some that? color looking Quantum you’re additional it could multi-year around element to outlook more wondering was And the elaborate I for

Ted Fernandez

that increased taking right, a process, the it with comes in the We’ve but that’s it, clients call element size within a within and year kind new in that into part of if to you you re-benchmarking so platform. plus and increases this number –as it’s want are multi-year element activity initiative either of, deals those tracking Leap. Quantum we’ve opportunities little a of Well the know, maybe the bit we’re now, seen seen

to and definitely yes, So, the into increased makes feel – factual. and read want yes, that, if you activity therefore convey we better that’s what us we’re that’s

Jeff Martin

And you give significant you��ve any program Okay. Could certification an the us notice then the you Institute commentary Hackett know, in. some invested, – and I that I there? around resources update didn’t

Ted Fernandez

to to make because are the continuing part with institute reason ‘XX, less out, or the every business as and large or scale The like transformation term even not implementation along Next-Gen, I’m next-generation – ability all well, just to to necessarily Cloud Cloud of of because out I’ve other ‘XX our infrastructure the success prospect generation we are we the by not it the programs. new our obviously the Cloud everything being we’d built as on touched driven prospects the and built things the apps I we’ve around the progress companies. as driven though It’s by strategy program, set or for for for of initiatives is mentioned or software business. goes in The directly of to grow compete this that using out

So, I’m broader those. using significant are are and kind larger with is and part institute of digital of. of just – the are doing When that our opportunities profitable a which and those now. know, of we’re you more then the Quantum look move I kind as why areas as that’s that’s were transformation some you look I at why things Service two that our at even those just significantly to a more emphasize as of But you term. things platform, Leap, IP a offering, Service IP

providing the just the that institute, it’s these not don’t are it’s we moment. greater love So, opportunity areas at other

Jeff Martin

some Okay. the and up you anticipate out of impact and start with made of software start-ups they’re there something mention is near things smaller then final question your my growth? around, – doing. interesting in some that brief will to you that you’ll revenue And the partner Is future

Ted Fernandez

relationships those second that new to impact ‘XX the I will do. of growth. I some of continue believe half

some focused So them. on yes, we’re of

much for our mentioned and an of never the significant, but, mean, don’t with just we side, relationships us, of Some just can second is, bigger. are half in businesses of so be on as example, for I we’ve be SAP mention will Oracle growth us, like have mean, a expect our we and how drivers to you example, them it probably expect that, the significant to much relationship great got the that’s growth that as procurement been Coupa important them I we become of because But source ‘XX. –

Jeff Martin

Very helpful. guys. Thanks

Operator

Sutton Our comes from with Craig-Hallum. question next George

Your line is open.

Jason Kreyer

it’s George. afternoon, for good on Jason Gentlemen,

more wondering some working you more. with bigger piggyback there there, on question the So can you you advanced of these working just start-ups in contributing, with them if you them, are be Just of lot of a that you’re Like, progress discussions have you’re provide? way? with Can wanted there? are making detail some some to in out can you last handicap more the are a that there any

Ted Fernandez

I them and we happen, as thing clearly guess deals pipeline with half both things along is say with themselves impacts the second relationship see in most expect into the growth probably expand, manifest revenue the close I that of that of increasing that of activity and ‘XX. see can some see and those you expanding significant to is you

Jason Kreyer

last And quarter outlook Leap, revenue that you on the timeline over Okay. contribution expect just touching into to talked give impact about year? a for you of that revenue. the starting kind of differed and Can to flow how you the us as model Quantum next

Ted Fernandez

we Go How ahead, – expect question? repeat your

Jason Kreyer

quarter well, timeline into – so, you of just is for in model as Leap, more ago flowing the what trajectory revenue, way? the for talked a that the deferred revenue of a Yes, because bigger Quantum revenue component that meaningful about a

Ted Fernandez

deferred we What’s is it; revenues, of components two are interesting, there right. one so clients, getting you’re is

it leave in not drive both only mean, possible in benchmarking-related now the from that of or the with don’t of the Leap – we those that is The benefit that opportunity, Quantum in have opportunities follow-on the clients just combination revenue. you’re I clearly going clients out the successful that helping – going into fact business there’s been system as flows see revenue initiatives and play some of call a deferred either come use that contracts from is mind. we through with to increases of not combination as transformation keeps define Leap. improve then really, that number top we deferred it’s multi-year, the, Quantum when increasing then the which and only naturally to initiative comes a all Quantum even have follows then But and to functionality transactions, the that the evaluate they identify We’re of and art EEA or just it, which become strategy is revenue those see only expect Leap so booking it more and of out to growth, opportunity tracking – also that some opportunity we that clients helping of

Jason Kreyer

Cloud just one about you it. Last stands if can of for in today? pipeline missed And any that pockets me, of there’s the Great. apologize mix opportunities, particular that improving premise, – you any any then you talked I if seeing and give Can and us on where ERP, sense for EPM, if you’re of HCM, strength? give I areas –that’s maybe the strategic a

Ted Fernandez

in EEA. I were no, would quote and I ERP answer – the mentioned transformation across opening comments, And both and strategy as in opportunities The the in on they our my really I EEA, our within both is business – increased were EPM. that and think say that

no, it So, was across board. the

Rob Ramirez

answer XX%. mix, we cloud the to his And now of on basically approaching the that our said on-prem question on mix revenues, implementation to is

Ted Fernandez

In Oracle.

Rob Ramirez

Oracle, EEA. Oracle In

Ted Fernandez

Right.

pipeline in want there to the are it you implementations probably call on-prem S/XHANA. – XX:XX, are version side, if – last On now probably versus of their the SAP

Jason Kreyer

guys. Okay. Thanks,

Operator

Colicchio Barrington Our Research. next from comes question with Vince

open. is line Your

Vince Colicchio

mention the Cloud? you Ted, then pipeline did Oracle on percentage business, for overall the increase and Yes, year-over-year

Ted Fernandez

No, improvement you kind I did that sequential not, a of was – the with saw consistent but better. or it

Vince Colicchio

was see to the business respond. SAP start to It nice

why to business transition? SAP curious, the you or the – rebound Just to the it’s from quicker Oracle than rebound seems started did do the Cloud business impact to think have

Ted Fernandez

different Yes, – two – dramatically different two dramatically

Rob Ramirez

Situations.

Ted Fernandez

go-to-market. and Situations decide they way the to

a didn’t So, as transition medium SAP for business capabilities much we adopter. S/XHANA an early we’ve We were had – in – have a was the us, from and small smaller.

So, weren’t migrating transition that a for medium small naturally and us space. We happened business the the for other, one while. business to capabilities in from had the we

revenues we got you’ve to to middle so through kind the lot our That’s Oracle size. of other EPM we’ve the from years. remember, and to channel XXXX like hate they that was acquired dislocation I company lost I SAP around success – a their me SAP on-prem – others, opportunity S/XHANA of revenues. You of – and mean, of X.X more of with of their incentives where over for go-to-market I Cloud some to But million for Ariba $XX and relive and a factors transition and assets last revenue Oracle net us, today, late

So –

Rob Ramirez

by – – dictated was the by vendor It dictated

Ted Fernandez

to Yes, the strategy. still – an in just you Oracle give last that was was number idea, With their significantly that math our years, on-prem I said, so XX% obviously With that our over growth in favor. quarter we’re and that growing as you it dictated the look XX%. the revenue – as well by – we said, business year-over-year started now in mean, working XX% we over decline is decreasing over now was other base that have a X.X revenue larger and Cloud –

two So, different transitions but between two those very vendors. software

Vince Colicchio

with then expecting client, you’re improve half. assume had in client that it’s I you to the And in you mentioned large loss and second another the Europe replaced client, a Europe

So, there or broad-based pipeline it X just the is is large or clients? X

Ted Fernandez

is us smaller U.S. for a geographic much Well, the market really. than Europe

which in the can just can important theirs much there higher client significant more ours. client dramatically in to large we more to have and size But markets, are there our clients large large becomes either So, them, attract counts. brand a material so come where therefore client

of second through fact why ‘XX. in one that’s So, the improve prospects of then since nice you know European see one, with the that were got another should the two. one think replaced on and commented to we balance we our with yes, by improve the one half of prospects we year that the we It’s – large know, that, impacted that as we

Vince Colicchio

spending the And Rob quarter? what was in you, one for capital

Rob Ramirez

million. $X.X

Vince Colicchio

it you. Okay, from that’s me. Thank

Operator

to the At this no Mr. call will over back further I time, now I Fernandez. questions. turn show

Ted Fernandez

you, Thank operator.

participating everyone second call quarter again thank me look our earnings updating report the Thank first quarter. and when for Thanks. forward in to everyone you. we Let

Operator

for conference. That does conclude Thank today’s you participating.

disconnect may You time. this at

The Hackett Group, Inc. (HCKT) 12 May 192019 Q1 Earnings call transcript