HCKT - Earnings call transcript Q3 2020

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Operator

Welcome to the Hackett Group Third Quarter Earnings Conference Call.

Your lines have been placed in a listen-only mode until the question-and-answer session. Please be advised that 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 third

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

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

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

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

Ted Fernandez

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

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

to want our globe. acknowledge during to remote to very clients by the continued that next and return review also the and to and we individuals then to I non-stop successfully like goes allow that conditions us to our to proceed eagerly to we then for and all us It saying; and quickly Q&A. support will this pandemic. who normal. around dangerous the continuing to acknowledge have start circumstances I our adapted without work dedicated under requirements would will associates comments those delivery will strategy-related We market wait

revenues As our through revenue counts pleased afternoon, QX, end and communicated engagement we at of to This expectations. were to we This we QX QX. the that net increased the actual I start and recover to expected quarter we exceeded am our activity reported experiencing of up announce $XX.X bounce results sequential SAP in revenue continued and million both, profitability strongly OneStream EPS increased meeting and Strategy continued Transformation and today our back forma up earnings the sequentially, growth XX% by growth of $X.XX. per and revenues were practices. the lockdown-compromised QX of results. our with Business Group of led and pro from and strong U.S. was share Net our

Quantum Europe global-leading made the all Leap, proprietary for growth our of are years we of our our sequentially. digitize was also IP, investments of platforms, the strong front, up international to have IP-as-a-service The On state-of-the-art our development Platform, Digital platform and come. benchmarking offerings many DTP, Transformation to continue drivers our be and Hackett or our important to highly will differentiating fully

and of drivers key workflow transformation eProcurement, providers strategy automation are our other future important our to Additionally, growth as strategy analytics, and digital rapidly continued investments growing our with EPM be also well. cloud to

It ability the important details to cash in no we position following year start us outstanding operations reiterate a balance has important with our ask and strong cash on side our such debt to the experienced. continuing to allowed flow is stock and it the flow our acquisitions cash fund me that to operating to identify properly from our On provided demand the on ability comments strong strategy make while and comment how dividend, invest continue with comments. let Rob conditions to buyback generate we business. disruption Rob's and sheet have was market also provide Rob? said that manage outlook. will which I additional results, With has us on to

Rob Ramirez

Thank you, Ted.

of I of our quarter flow third an our do, cover overview I XXXX. during related the quarter; activities I'll of an As discussion topics quarter and of fourth key our with the for will an our then financial outlook during segment operating typically along on with overview XXXX the this following results, statistics; call: of overview conclude a cash

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

includes as programs Our advisory benchmarking executive service results S&BT of group the and North America and our our IP offerings, our business practices. a transformation services

our and of practices. SAP America stream Group solutions North Our Solutions EEA Oracle, one the results includes

the EEA of includes S&BT and resources group international that results Europe. our in primarily based Our are our

In through addition, are and expenses. to our revenues primarily please to expenses excluding represent reimbursable revenues clients project no associated profitability. have references margin note to that travel-related net our impact Reimbursable all or expenses passed

revenue encourage assess to revenues Given net amount growth business the to to of we focus the travel due limited and trends. investors pandemic on

believe financial included today reference We call investors. which measures certain our GAAP earlier information today. of in financial filed measures release we reconciliations useful press to to will we provides During non-GAAP our non-GAAP

on results continuing comments from are today my Additionally, operations. based

decrease end the both in disruption as of a as above million, year compared we range. U.S. guidance year. prior revenues compared period to X.X% Net Europe. our our on XX% remote decreased was expenses X.X% and net of for the compared which group were reimbursable For prior Net model net when to the affected XXXX year. the when QX high delivery the XX% and transition XX% for the service quarter QX expense to throughout sequentially ratio revenue The the revenues and were pandemic $XX.X our reimbursable million COVID-XX third revenues and to of economic S&BT revenues $XX.X of a from the same is of increased to prior

sequential efficiently was backlog quarter X% by rebuild growth up basis from However reversed for were decrease Oracle by the on basis. practice the during was disruption on a Solutions practices a momentum maintaining a in sequential as quarter our driven of it strongly its offset as and the outperforming $XX.X our experienced the This revenues our and million, Net much of EEA X% of S&BT and quarter. during a by SAP group group the second XX% we basis XXXX. OneStream on second year-over-year during after declines

Net recent XX% as the international XX% from increase to which performance our year a revenues revenues company XX% down our a total for as year-over-year the Total group company its revenues declines. of and basis the were revenues the represents a decrease up group's of third net in quarter third and for U.S., currently million, but accounted quarter net XX% for of in sequential on were a basis, compared operations the X% Our XX% quarter. year-over-year prior $X.X international of on sequentially improved an XX% company of basis. total on net prior X%

variances as hired year. Total revenue as or at of net the place revenues revenue decrease year-over-year net net $X.X net as profitability sequential year net total IP $XX.X for that prior third revenues, decrease primarily Pro The This restructuring expenses compared XXXX. The as response XX% to revenues company the forma XX.X%, $XX.X year-over-year in XX.X%. from XX%. totaled compared prior offset pretax The quarter for share. of per recurring XX% to result XX% sequentially company XX.X%, the our diluted executive pro the in and for to of million $XX.X our pro $X.X approximately margin pandemic end XXXX, or in quarter prior SG&A compared forma by Our was the of of gross same XX% and XXXX. in prior revenues of net net margins totaled share quarter XXXX, as XX% advisory, were marketing net XX.X%. increase year forma prior million GAAP modest quarter. $XX.X than second million subcontractors income net income in revenues Total the XXXX reduce third to previous increased total revenues the of AMS of previous driven more balances of as consultants up year. total share XX% pro quarter. in quarter year-over-year XX.X% million prior or due third the Total or compared million and to or disruption million head approximately at $X.XX in the X% XX.X% million X.X% million our primarily earnings cost during XX% the end ongoing EEA revenues up compared compares quarter increases of include was $XX.X which per the or were or was and pandemic. and and in due to quarter company practice revenues third to $X.X declines. related the primarily travel-related Service was of to gross EBITDA revenues equity net on by as in of groups a revenues, activities the in quarter took $XX.X cash global company company was quarter, of quarter in the revenues X% margins actions of in reimbursable third as of year year or our improved the net of $XX.X period previous due we as diluted on forma the partially sales, sequentially throughout Net workforce and the X,XXX of the up revenues, cash the to to quarter The million, year earnings The head by third the non-cash to in the increased in $X.XX approximately revenues, $XX.X net at by prior of which primarily primarily net diluted of down XX.X%, compared $X.XX pro sequentially pandemic and third XX.X% was of $X.X as was expenses. the $XX million the the and gross net margins XXX, company's per of was of quarter. XX.X% demand the of declines decrease XXX compares compared net of the activities was selling for to $X.XX quarter up excluding driven count in Total in was count. and which quarter, to of the as to the the as was International from the items XX% head the the for was the the by from utilization million accounted revenues quarter. net disruption. end gross margin sequentially XX.X% year-over-year forma share previous was third the million lower COVID-XX on prior revenues consultant income the the XX.X% disruption. year down quarter. Pro provided This million XX.X%, decreased to forma from S&BT and million operating compared or sequentially actions adjusted prior in in $X.X per to and of compared of or the The taken up quarter to quarter. on dollar from offset quarter count of third down XXXX, the to margin of of of and a company down

XX of was Our outstanding the as days to XX days, at compared the DSO quarter. end of days end or sales at previous the the quarter

Given million the cash the our remained facility $XX balances, third credit strong company's quarter. unused during

million $X employees an the of $XX.XX average repurchased for of withholding total by per purchases of to restricted share a During shares of or XX,XXX the company's triggered the stock including we cost tax at satisfy shares. income vesting from approximately quarter,

be XXXX, At Our at $X.XXX authorization declared was recent early the of January per a paid share of July dividend quarterly remaining will in Board the of the October was quarter stock share, dividend of Board XXXX. end which $X.XXX in the $X.X its meeting, quarterly per declared repurchase XXXX. the next million. which In paid

fourth that to vacation Before by compared for in available quarter time of remind third specifically guidance I will to would is billing the quarter, like quarter. and holiday X%, fourth the the move of seasonality the decrease increased our days taken everyone I the historically business, approximately when to our

Ted uncertainty that the million. the be fourth XXXX to range pandemic quarter the $XX of in company's estimates from revenue be As to of his comments, continues the although in for million economic suggest high, net mentioned current will $XX

be revenues forma be primarily expect We for the quarter to of We $X.XX. sequential Europe services expected in flat of to pro range the estimate diluted contract due fourth to XXXX earnings S&BT to an down, and revenues and up; to exploration. share to EEA be per managed in $X.XX up sequentially be

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

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

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

our turn share to coming months. priorities review and expect to this cash outlook be and back the up, would buybacks. point, At over We to I to excluding like market strategic Ted for dividend payments when

Ted Fernandez

Thank Rob. you,

has we the unprecedented environment as share growth it on our me the new beginning short-term that our without automation, applications, enterprise well demand analytics thoughts offers emerging pace, dramatically accelerated capabilities intelligence opportunity way This at It the Digital fundamentally long-term to the means compete goes forcing transformation saying redefining forward, era, remain the businesses where But measures. in let extreme it demand these disruption that and services. is on As look by workflow and as organization. was that just influencing entered has digital digital rapidly an infrastructure, cloud is ensure process order change and deliver artificial our period clearly adopt their safety also which all and pandemic. in and we've mining necessitated evident to required the is organizations innovation transformation accelerated been competitive. the to now an activities

clients readily that side, demand and the vaccine which organizations therapeutics continue will pandemic. now our that this and continues environment, will short-term the through to to the they improve environment while the all. we to buyers disrupt all our to This from means are as continue result a must On understand to until changes, transform lives adapt must sort available the new

our acclimate increasing and us to profitability. experienced is us allow next as and our levels Specifically, into to clients momentum sales QX QX, model growth should as requirements. service should the position well continuing the we return of pre-pandemic normal to and XXXX This in as market delivery for target well

our best same, to Additionally, serve fully selling potential and their our partners remotely outstanding. Strategically, the capabilities half continuously. This significant XX build allow and Transformation them with opportunities than possible continue us proposals whenever clients increase with and have IP. from our brand and which remain will digital business is to case now focus formal focused license to to should more benchmarking around offerings by Quantum new platforms. in strategically, desire interest we in our see more and unmatched and continue our on of that capital the with to value practices, leveraging our Digital Leap and efforts transformation than credibility bolster Platforms our increasingly to We development intellectual digitized

redefine will our leadership Specifically, made we Quantum digital continue transformation we the global software-as-a-service our enhancements to benchmarking have solution. Leap to through

our platform IP We in also believe leveraging previously credibility. platforms, been we our market. partners and interest As respective track significantly the I've our IP that increasing brand clients And potential client I effort. our and deliver to over there past, with strategic experiencing life and in It have transformation allows less effort. from and this to as is of mentioned mentioned, leverage the more platform us also no comparable initiatives the their allows in information leveraging

our continue and to aligned also to Transformation and to Platform DTP best help our further offerings. asset digitize core our our will Quantum and organizational to both proven implementation related capabilities. refine differentiate configuration DTP improve transformational clients IP, unlike IP fully a to Digital Leap unique transformation us We with solutions change. is practice drive cloud business allows

to our platform. with our website can a unique familiar page added Relations the demo of Investor that XX-minute more have our investors of capabilities We so become

the our believe at look we IP we alliances and are our scale scope growth. summary, though we the that we believe a positioned growth QX. accelerate that well disruption the to acquisitions for and to our business, to to as which In demand Clearly, continue and after even disruption can QX capability, base was we relief resume significant lockdown subsides. and continue leverage grow our offerings welcome of Lastly, have client strategically

We investments access expanded and also making and address encouraged challenging validates our us economic us we're with IP-as-a-Service cloud along capabilities strategic provide positively focus highly offerings allowed This the I has of see a our of of differentiated our are the the that global offerings, and to to platforms, the events. offerings on that financial power most said sound focus our to most position leading which our our as and brand companies.

always, tireless our by safe regardless to and asking highly the people short-term comments. them clients urge efforts we me to As our associates stay for encounter. my close conclude their and Those remain of on to challenges by let thanking them our continue focused

us Q&A our turn and to on to Let the section me call. of Operator? it let over operator our move

Operator

with time, the Thank question-and-answer begin Partners. going Our ROTH we're comes first Capital At question Instructions] you, [Operator Jeff session. sir. to this Martin from

Your line open. is

Jeff Martin

Thank you. evening and Good Ted Rod.

Ted Fernandez

Good morning Jeff.

Jeff Martin

growth didn't the did its -- largely I specifics to in on quarter in I fare course. the has cloud I on-premise But on-premise. didn't taken how cloud relative catch hear know quarter.

Ted Fernandez

to groups offset to part that had understand strongly was growth from to that grow. efficiently Our growth OneStream talking some the on outperformed statistics. know which SAP obviously most quarter. Rob But you cloud we forward the them QX continue of so specific we're the If as guided worked some And work look the their about doing we're it relative you're cloud-oriented, we if can Oracle we that to -- we through not all that important both And now XX% in call has second pump. don't in continued have growth to what revenue sequentially Oracle quarter the is the the we're it's on I we next-gen use backlog and reference. to the clearly excess the mentioned of that considered Jeff. Oracle transition the and it virtually OneStream cloud our on group of the sequentially cloud XX%-plus it in the everything doing when of obviously, prime make rebuild side well side. as you And and at of mix its mix virtually basically in is But the SAP. is when

Jeff Martin

Right, right.

then of approach AI set in any mentioned the process How the part mining is And Hackett. that and thought market? the chest approach that I got And to Okay. process that for as positioned you war -- Hackett are mining is to there market? you've tools opportunity

Ted Fernandez

takes excellent process I a XXXX all and when as was know which mining an you way build this really mean aggressive drive question. It's the totally the we solution. HPE to automated way to actually us most launched back

As extract use gather do both you process import fact can now of initiatives. Quantum continue those is and data imagine in that of to we some a we we large where in that work Leap for the portion within mining

come. in So, aggressively to to to really years that we in the for be process question us invest will want just mining relative category how

that continue a defined As for believe with to a firm a XXXX mining being category valuation, meaningful longer very category process as not now remains the and at new opportunity we entrance opportunity. the significant term is funded

was process Jeff of part not second was sorry? I'm your mine, it? what but The question

Jeff Martin

part as the… AI mentioned You of

Ted Fernandez

the and for and a have giving requests on those are to of asking, engagement that opportunity. Service have as channel impetus significant some infrastructure IP Testing efforts. is assistance a at can to how selling that client coming where couple with we us from AI. us a they analytics go-to-market IP our come and and cloud are in their initiatives pretty cloud look our AI companies or the leverage database that value That side,

information the provide concept that but to with Let's or has outcome data sure all idea clients assessment element relative piece, of start we that the initial business it. information a or to making of content performance the also performance the

in to say be throughout you which analytics XXXX. performance want again us for the all early So capabilities It initiative XXXX. will -- stage we our cloud I but to driving performance increase cloud of us, will infrastructure you business started call way in and will it's that all continue if an it see through will

Jeff Martin

XX in Okay. with solicited? business ones Service new And didn't And are you final for IP that those than you mentioned or pipeline some for formal me you proposal and Or characterize, previously half question how mode. data more a in opportunities? those have? then increase your that give as half Are takes the to is, inbound from perhaps how benchmarking you opportunities

Ted Fernandez

exposed what's has That first led encouraging opportunities lot can how they What has for way say to the of first their rule great to me conversations X to go has us market. benefits our XX% asked have is who you of Quantum That from been Jeff, our market. global with come I'm access -- go performance data start one how use question where and on really are or our -- how as to which and that of to enhancing coming requests. to me Leap in number categories they're a to most companies value these front understand opportunities and of companies. different platforms that but Individuals as the different and is leading from. has know assessment and two different credibility the a let information scale access that to your to were of the the of either part inbound going data -- for that

obviously efforts specific they're with help any that, or to only value to we the leverage can for if is those either know they of that these not to it's even this know ago. capture consider adapting of ancillary it data launch proposals, who to requests us emerging in to how brand order some see these we categories from. new it's permission IP we're when couple we able initiative successful helped them where you ADP getting also some of serve the sell been a of them our areas these this significant into prospect the with that cloud of the But it is solution that helpful clients some broadens So are The years how we're aspect serving. new their of of significant

when use not for a platforms these that only it So provide has us IP own it and do us insights to But model allows it services. able model. comes our and is a through It that very go with efficient go-to-market to our to opportunities, and it. business do the different data very in and learnings you're to other's addition to using to market captures

breadth to depth the the with enterprise benchmarking gather that through we believe we we companies know of data that any expands capture others. see data exponentially it most least we the we that that of a compete you which extensive the and of have. chance capture, insight at have have of And database and the So have currently we and as we capabilities the

Jeff Martin

see Very the $X.XX to you're this range helpful. back for improvements EPS and quarter. And to sequential in see nice good the

Ted Fernandez

are can that there We We're to get glad next delighted. see we quarter.

is So very it well.

Jeff Martin

Thanks for time. your

Ted Fernandez

Jeff. Thank you,

Operator

with Nicholas question is Instructions] William Andrew Our Blair. from next [Operator

line open. Your is

Trevor Romeo

your transformation your a side of that could level you I in for for wondering sustainable quarter. Hi. Trevor S&BT for confidence just and in clients for Nice with could the are how the ask taking the This Thank sequential our speak you forward. And if for a going conversations about Was business uptick to bit on positive Romeo Andrew. outlook the next business? more going actually quarter is in rebound see questions. for potential

Ted Fernandez

was that very and know business important projects disrupted as you the has technology really great for in for us higher demand that in that see the the quarter. throughout It an QX. element than side was the was to increased business client EEA side It most since a has engagement

need the And comfortable tell then that do have is to to do ours. us And organizations what we're issues. going they or to what either forward? in which understand significant. us? it that, is proves they their what they beyond very themselves And what going have -- of performance engaging clients going address that activities that assuming does has what continue tell to improvement those the -- that, So That then remotely that does clearly are to about really turn resourcing like that have say they to XX%-plus capability I'm become to

across transformation individual belief our goes and to by COVID to digital time then month them received we clients that the discussion for have address used favorably all us and communication it to of with And is if all groups. critical to aspects that that engagement been our client disruption and feels in collaboration, call receiving -- value manner where the that a or the are what comfortable then efforts they of every free more to they way with they that do up So important. is of are found a interactions that want you that has volatility become businesses in them either performance it their and from address allows know client this the improvement to are to continuing productivity that that are interaction the

to So That's throughout that our our very our client to for not at engagement being engagement adapt fulfill continue organization and to to organizations. the it within have happened has for I how increase most the I us thank our you quarter. how but at allowed quarter to to the able do said the our as to That's we the continue the fourth speaks respective both so all happening I beginning, and successfully teams to do and clients into we congratulate only important companies. and continue and for adapt client obligations thing is we think to positive. But circumstances

Trevor Romeo

pandemic. on Or some over to that of Okay, a wanted how expenses great. base the current you are given result side. speak if looking kind next And and thoughts of the expenses, then That's you. expense to year just your like just things office headcount like expenses adequate evolving to you're or have levels to Thank also changed you travel-reimbursable as cost of And your follow-up I two? staffing regarding just add that the good see forward? Could going a hear. Particularly whether areas certain demand? ask on in the

Ted Fernandez

let start me where you Well, finished.

Rob's where some still the adding comments, we As to There's increased headcount you movement practice. that's are with from heard added demand, during quarter being as clearly to the we so by deal accelerated headcount.

it's so some pretty significant the areas. depending down. the and differences the becomes you pretty gross to client and because added greatest really it's three revenues to on in broad. Relative dramatically some has net demand. we're interesting normally to travel, revenues where engagement it to And increase immediately on our groups are But cost broad of have been are which get there is to So pretty reimbursable because our visible expense focus number, how that you they seeing

difference. So we that which of virtually as incredible is being engagements most Rob And XX delivered means our X.X%, year last expenses. are an mentioned, That points basis we had were of remotely. X.XXX%

been sales-related aspect also to realizing important we're the that meaning to some of so us that clear is and efforts client the selling-related you clients in a capacity and to to which more we benefit also clearly, accomplishing effective. don't although prospect. an personal What it clearly engagement engage more efficient, the of including more done us efforts, is dearly the it's or -- learning the are there being has has existing XXX% remotely use yes What really become start accrues client business. we that So have miss part capacity but which allows our frequency engagement to accrues on that to then the it you is time the and with know we're provides us tasks incredibly

So think is non-reimbursable first our and fact travel the gain of that in efficiencies the you meaningful. expense, which business for

client know delivery kind and fact also that to start remotely -- be remote a you it Secondly, that then When that does But that at focusing or I also allows certain that resource. can same resource model. efficiencies to to certain client delivered resource has that you're to a and client. deploy allows client-facing require related a a a and virtual all times, functional mean have related that skill of be all you virtually as our individuals models. site for industry a bring the some different set, -- consider skill it technical from different on not we gaining that We in work skills certain

the So a business, as skill those opportunity costs aligned of is the real some setting. set certain as of a not significant And even – see capability to maybe to little maybe if you'd part it's some in to we broad – where nearshore-offshore in regions. lower-cost a some move our like

facilities. and with us non-chargeable going was evaluate our the improve So we cost a There flexibility it's can of our protect that and continue business real are as and revenues facilities will can and those with way. and to find resource find estate as that expense, gains other estate giving time footprint. I – Those more with us to some you clients, and that allow way agreements. is leaves benefit but on assess on we way then travel real forward, on doubt will mention you it's And passage how and the support of the And also resource – as jobs you efficient believe imagine – in we a be related last should it's a accrue deployed said we the given to will no margins. absolutely us, that or can giving significant. share us flexibility the you then

Trevor Romeo

Well, helpful. That very Okay. was you. Got thank it.

Operator

question next Sutton. comes from Our George

Your open. line is

Adam Kelsey

help enjoyed is the the related made by I press means what was environment? release I strategic you. to adjustments next branding understand, specifically. of that terms you George. in you hoping that Ted, to for Thank help normal. the This people mean on can us what And in – Adam you've that what in

Ted Fernandez

or transformation your first can let's probably most dramatically remote a efficient accelerated and manner. activities the many significant clients Well, of the as to is engage deliver digitization many to as start thinking you more support in – cases allow digital in possibly of you a the

of activities, business. becomes transformation digital impact will all really and digitizing So our and significant all

clients in we delivery Not take are for and only you same through it's that model, identify in so us, Take the call of, them. want if what that kind engagement, help simply way then service see So it, – you that important. in to we those but for to opportunities – very customer its clients us. all that very, then

it of two a significant launching it IP to formal little that – bit very started engagement, digitize client in of us, whether and of all a platforms. we led process resulted investments we or creation our you to our the the major For luck, foresight was know as

an now with not we – that before. technology but model, IP where build platforms more our not we clients clients our business. our source have we to new the consulting or to entirely allowing And business be in own than a and licensed IP that existing to and leveraged revenue can efficiently interface to deliver only its we creating So marginalizing differently see us serve without new being can people allows business others when model clients only it's diminishing right and in us by of that

their of normal got be It's extensive. way to I on the extensive. again across all all to circumstances. everyday transformation out not is across that before commercials client work locally base. a over different may to great the impact ever home without would impact person of So for a use inexcusable then somebody about to resources, just the to phenomenal examples, bring us is it talked key leaving able and abroad. on is is it's I those And resources, have engagement that deliver resource global It think resources a And now be a ability think on of industries, we huge activities in dramatically the this carry say, is to significant everyone's acceleration of will all and digital transformation moniker our in a which our all clients, our benefit. of industry as as over massive used But The hearing. mean knowledge apply that lives. tired be resource

Adam Kelsey

that respect big when competitors? for advantage have with investments so an compare that you has digitization, the point, far And to yourself against on you how proven be made to of

Ted Fernandez

efficiently But expertise execute, organization talent all if at requiring efficiently. engages. strategic doubt our some ability like lot feel is platforms but much imagine got to That and single that we weakness because knowledge starting. look us that more the our I not our is that leverage that And all key insight no resource, reason and to and extent ours, allows leverage insight to an of we clients and execute, benchmark scale. or from forward. our just it least our engagements without as ability gather there to of incredible it's think – a where is drive us to necessarily think IP Well biggest We we allow a we've exercises had more scale feel as to will greater dramatically research

Adam Kelsey

And then for ahead you've looking how affected what and the in has in for to one opportunity question preferences next then that M&A me. normal, terms your last With seen M&A? of

Ted Fernandez

They're And on. we The our to our this – that would get now through and we specific expanding like answer Well, that want pursuits work focus we we're interest. period. to is to continue rekindling larger. our areas have

the post have. and you've if changed? have COVID? asked a they from The change is they So pre of interest areas yes. me Have answer

we on. And on. well also where continue for think IP focused areas us and target put and set in want weren't us in functional is into to in, needs post believe that as application of continue some look in bring or pandemic our to though, needs allow we activity categories conversations that understanding it we of full increasing for that us pandemic to areas discussing as areas analytics have really areas at the is considering that It expertise pre-COVID. on has assessment. identify that already the in. in some hold. areas will look To So we I focus cloud a and cloud it impact you helps interest were a you across in the as important the of we both broader I consider investing this what pre have infrastructure extent – to Obviously, we enterprise scale

deal what that And for so of a a impact as the opportunity the is better fair term is a of what look and we art XXXX. come at transaction in lack what meaningful understanding and will

Operator

Thank you.

Our next Vincent Research. comes Colicchio Barrington from with question

Your line is open.

Vincent Colicchio

Ted. Hello, Yes.

Ted Fernandez

there. Hey,

Vincent Colicchio

you rebuild, progressing? for couple the how Oracle give a me. color So pipeline us on The in could some of that's terms

Ted Fernandez

Improved throughout the quarter.

they -- as year. believe as the we entered good So prospects we continue as as to be as were we

component said, has ERP we've important multi-tier to more and the As deals. more become

possibly growing been that's we've as we area So as the aggressively that can.

Vincent Colicchio

a more services period? us I if And also the quarter. improvement it give in does think look exclude does If the color you we a we that's going drive like to then drivers And look contract the in the sequential like book what said managed -- could exclude to Rob Europe there's on that, decline. in what your

Ted Fernandez

sequential to AMS improvement. transaction improvement That ex as the mentioned, the I would glad were We see Rob stable. characterize strong

and will been have that we any even for is was impact, It serve to have see And that that close in in-office limited going we and driver instituted that QX. restarting, the very was and keep continue engagement the wasn't though positive. of they on. was the the So obviously, serve activity engagement on-client us it orders a and sold stay-at-home eye if current but to on there

optimistic. So

it's us a market last you pretty hit As for that's it's the been here months. XX over know, hard

So was it to see. nice

we'll for news good see very So us. how continues. it And

Vincent Colicchio

early given your for year? any the growth early thoughts pipeline And on -- trajectory next on

Ted Fernandez

us of to we at pre-COVID activity next the way to disruption, in first QX that what at that said that without a all client the other pipeline engagement say from None half level if levels momentum continues the than in opening beginning I to could the it going has back year. see profitability comments that least QX my at

different. be On the revenue it side, will

net But want see. a can't first get that we those half. doesn't to if numbers to basis, revenue mean on you we'll So in it, back the call

yield our to efficiencies quickly -- already EPS will we this then call So just back be can know see it get in we let's those increase. number the whatever revenue that how given that numbers. discussed we've We get will net to back

margin margin we our look will improvements XXXX when You throughout business, the see and operating at model.

it my we what optimistic. way I've characterized And believe. opening in comments tried that's and that's we're So the to

Vincent Colicchio

job quarter. Nice Okay. in the

Ted Fernandez

you, Thank Vincent.

Operator

would further like turn queue. over I'm now back no At this showing in time, to I call the the questions to…

Ted Fernandez

for Thanks again updating in our results our fiscal We forward and look earnings quarter we participating call. quarter report for everyone again. Thanks fourth when everyone to results. third our year

Operator

concludes your you participation. That for conference. today's Thank

at may You disconnect this time.

The Hackett Group, Inc. (HCKT) 2 Nov 202020 Q3 Earnings call transcript