Earnings call transcript Q4 2022

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Operator

Welcome to the Hackett Group Fourth Quarter Earnings Conference Call.

Your lines have been placed on a 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, may begin. you

Rob Ramirez

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

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

it turn At to I over to Ted. this like would point,

Ted Fernandez

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

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

after market will and will to it we We which Q&A. open review strategy related up our comments, then

me quarterly associates Before results, congratulating XXXX strong start move our I performance. the by to our for let

year in more to the spending clearly All as our rate Fed started on of was challenging weigh increases the second clients half of the decisions.

which strongly was $XX.X adjusted XXXX. exercise this adjusted results year earnings guidance. in exceeded and our tax $X.XX, before share when – Relative which exceeding X% of our the and of both SARs you quarter $X.XX, were the is up Our the our revenues million exclude prior reported to reimbursements EPS quarterly revenues on benefit per we’ve afternoon fourth

intellectual in results also opportunity over our Our S&BT for specifically, More recurring area. value market a XXXX segment Annual were by the a accelerated high reimbursements success and basis. revenues before currency highlights investments development the XX% our in reasons we quarterly why revenue offerings driven reported and X.X% Global on X% for Advisory and offerings growth property margin these from grew of our basis contract this IPaaS quarter. Research local and on XX%. in offerings The was over product sales have our

revenues signed our ramp. as growth IPaaS benefited the quarter of The second the of towards large the was contract quarter end from the continued to

to software bolster continue actively also several pilot value-selling companies contract engaging their and/or with and efforts. be help them and We value-realization service to discussions large

benefited Research business. growth Advisory from our Our results also the of

to also marketing consulting purchasing user strategically when efforts. The with client Hackett launch plan During capabilities. support programs the programs solution their to end to us and compare we valuable first large allow additional which and our their programs base providers, software to providers programs we work the of and our XXXX. market launched intelligence throughout to service benchmarking two quarter, considering are and These us the allow capabilities sales

results revenue growth prior aggressive to flat along in executive Solutions of with and segment, XXXX. allow market our added hiring, We our year. down programs Hackett new with sales intelligence our continue member, programs, The by our new to should the functionally new Solutions the along have was which SAP existing existing improvements Global to us programs, Oracle revenues value contract advisory IP partially annual with grow recurring also segment related which launch segment, and our Connect, our higher content S&BT our XX% focused during offset was margin and was of

impacted we the staff Our $X.XX $X.XX project segment agreement QX to from large during be QX the of after approximately estimated further one is quarter loss unfavorable third The by reductions when our was the in to decided closed implementations XXXX. unfavorable $X.XX exited changing cancel net quarter. of and of the in Oracle that to in CIOs quarter, as was impact

to expect additions have to in some group XXXX off the We half of year Oracle return QX in in group level QX made executive of growth XXXX. second our now to key and the and the of revenue

and Solutions on a software year-over-year SAP basis. reimbursements segment with flat quarter. be before in increased In driven we profits SAP to improved expect revenues expected by leveled the segment Our flat off sales QX, the segment revenues than fourth earlier

Platform licensing include relationships develop and platforms The across research platform, or benchmarking and the Transformation with investments us off. our IP to digital Hackett Quantum new we which have the global and made our digitize also to differentiate and our our state-of-the-art are development platforms, software are DTP fully and Digital offerings enterprise. Leap, of allowing paying our These providers highly service proprietary

member in as IPASS We our research to themselves our Hackett significantly ability which expertise. launch and IP avail also will our QX, expect platform as to clients’ our Hackett to well all Connect improve

our resulted tender sheet operations Dutch offer stock. settled to buyback million our of of in December, balance from allowed successfully $XXX over the ability increase to On we accretive acquire we shareholders. has over to company’s generate five shares and impact our $XXX shares nearly it’s tax even on our strong when appealing you $X a the tender consider expense tender of nearly offer existing the of in after our common the incur more offer dividend, The strongly flow us basis. This and million and million dividend the million side, the returned to should of interest million cash and be elimination X.X will cash

want few in invest expanding As our we by with our acquisitions our calls, we more and business. back stock aggressive while be sheet buy facility balance current credit to have to discussed continuing fund on our to last

let on our Rob? said, on comments comments. to additional and make With also results, operating me that on will conditions cash flow and strategy outlook. following ask provide Rob’s I comment Rob market details

Rob Ramirez

Thank you, Ted.

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

the the XXXX, operating and Effective internal primary quarter company align reorganized of its better solutions. its structure reporting third market to in with

Global a regarding group, S&BT, Oracle As our result, SAP revenues Solutions of our the separately the will our Solutions group, total company. and I comment

services, Our IP-as-a-service Global and offerings. international offerings, advisory S&BT benchmarking America Group and research includes the of OneStream and our our transformation our programs, results business offerings our North

our SAP Our Oracle respectively. Solutions and our results SAP Oracle Solutions the and segments offerings of include

we’ll that to be total expenses are in both before referencing clients note passed associated revenues our travel-related to no reimbursements revenue and primarily our profitability. impact our due expenses have Please that project discussion. Reimbursable

reconciliations believe on and the we’ll on we also earlier information Relations call reference website. company’s financial measures, in non-GAAP press provide any from During based of included our measures the will of certain investors. post additional GAAP we our today, We discussions today, useful which to financial release the this information to Investor call non-GAAP filed page

quarter total For was fourth million. $XX.X of the XXXX, revenues

Our our guidance. of revenues before which quarterly reimbursements the was $XX.X above million, were high end

to was X.X% before XXXX reimbursements reimbursable revenues quarter ratio same the prior the the in as when in on compared expense prior QX X.X% period The X.X% to compared year. and

experienced expenses not these to increased client-related delivery return we’ve related travel however, given to our remote Post-COVID, to pre-COVID our we travel, project model, do expect transition levels.

our in $XX.X X.X% our grew were reimbursements and S&BT value annualized for before S&BT period from strong currency million. $XX.X same Global Global advisory before year compared revenues X% but XXXX. same a benefited fiscal of the reimbursements Revenues XX% contract in research million, up Total and revenue recurring utilizing over IPaaS the to were XXXX. QX S&BT year, basis, an Global local segment when currency prior the rates segment which on programs, for increase of from of growth our the foreign

Group our the Revenues Solutions were our million, of $XX.X decrease period segment a XX% year, revenues experience Solutions continued in quarter. the million. prior Oracle before were when we Oracle as decision-making same the reimbursements during for to $XX.X client Total from to compared extended

revenues period to from SAP Solutions essentially flat $XX.X Total in of Additionally, during the our reimbursements Revenues canceled. to that segment approximately for quarter, a compared one million. were favorably on as quarter Solutions closed million, were same decision the we $XX.X of prior segment that QX by the before year. when SAP large opportunities impacted fourth exited $X.XX. our impact the The $X.XX the was was

fourth recurring stated that’s advisory, the have Solutions application subscription-based SAP from research during and pipeline of includes previously, XXXX results IP-as-a-Service, contracts. multi-year reimbursements and which of completion of large SAP our benchmarks activity the revenues some XXXX. before coming consist Approximately strong SAP total company quarter main our XX% engagements. revenues, sales multi-year this strong of and services As benefited results to also software up rebuild we continues

in as expenses before Total $XX.X totaled XX.X% year. prior the which compared revenues the fourth cost reimbursements stock-based or revenues before company adjusted $XX.X or and XX.X% in exclude non-cash XXXX reimbursable reimbursements of of of of sales, expense million compensation to million quarter

reimbursements, fourth company company the the and headcount prior compared of the stock-based in margin consultant of compared end XX.X% X,XXX in consultant on prior X,XXX of was and year. of to at XXXX as revenues quarter compensation expense fourth of which total gross at before the Total expenses fourth the in as headcount XX.X% Total period. adjusted quarter year the was the excludes X,XXX company a reimbursable to quarter previous quarter non-cash end

SAP expense sales XX.X% the during of basis revenues million revenues, before Adjusted asset non-cash margin IPaaS compensation research higher Global stock-based in well $XX.X as XXXX. fourth margin by of of XXX the intangible quarter. and advisory amortization was benchmark relative quarter which and S&BT, excludes primarily expense driven and The the reimbursements mix improvement software gross or as higher SG&A point margin was

XX% is of of million year million compared reimbursements of the $XX.X or revenues reimbursements or was Adjusted the revenues as million fourth to compared prior in XX.X% $XX.X or in XX.X% to prior reimbursements year. before $XX.X revenues EBITDA period. This before in quarter before the

earnings share share quarter the GAAP of net quarter per previous year. benefit tax share, million $X.X related of the fourth the outstanding in income of of X.X GAAP $X.XX $X.XX appreciation of million the $X.X quarter fourth for the the per for to GAAP compared as million or fourth totaled to XXXX the XXXX results for quarter net million of diluted $XX.X income $X.XX earnings of for rights. included fourth year diluted previous diluted of per share or exercise of

Adjusted the excludes net compensation income diluted net above $XX.X income, high stock-based million $X.XX, for which the guidance is earnings totaled of our fourth quarter non-cash adjusted end per share which XXXX amortization and intangible of expense range. or of

per $XX.X share tax income adjusted the $X.XX to due year. million compares share adjusted the common net exercise as net This quarter mentioned appreciation to per net the share effective $X.XX diluted of year prior of of or prior Adjusted an income benefit income of rights. of outstanding diluted fourth already the for included in

an net purposes. In we to rate of GAAP QX for actual adjusted year, tax effective moved reporting income this

benefit. $X.XX, you excluding we reported income diluted reported results, For this those to the of tax common reconciling per prior adjusted one-time of share year

company’s utilized The activities sequential at XXXX. quarter quarter cash to completed to the primarily balances balances and end $XX were offer, previous tender of in end of our fourth at the which million in the of fourth cash of $XX.X as was The cash XXXX decrease our financing compared driven by million the quarter. fund the was

driven adjusted Net activities accounts increases accrued income and in quarter non-cash in decreases for in primarily contract the $XX.X provided activity cash million, expenses payable, accounts operating receivable liabilities. was and by net by

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

the fourth the in company’s flow cash able new quarter our share, million to partially transaction our $XX.XX related mentioned, which of sheet of at Ted and shares XXXX, we leveraging to the our shareholders. facility, we excluding completed price By stock X.X per we were capital strong balance of were to of fees. pleased during resulted As credit our return tender that offer, stock a utilize purchase

on for million our $XX borrowings $XX The tender in offer funded was by million. inclusive facility million of credit cash a of transaction of approximately related approximately total $XXX and fees

to X, common on the of the $XX.X XX, was at to for Directors quarterly the of of shareholders quarter $X.XX the quarter dividend April Our paid the on of Board remaining stock the be end XXXX. repurchase share for record end to XXXX authorization company’s million. of first the its declared – Subsequent March quarter,

quarter quarter, to QX Before U.S. the to relative remind the guides of to first sequentially from costs move reflect to provided I seasonality and for payroll of of our everyone previous our for I’d QX, move the as quarter consistent specifically in XXXX first business guidance the like with accruals. guidance buildup years, will increase sequential the our sequential taxes first vacation related in we

The company XXXX reimbursements to to the for of in estimates $XX.X before of range million total the quarter revenue be million. $XX first

year-over-year reimbursements SAP Global Solutions before revenue basis. up flat and We expect be on S&BT to a to

the quarter of conditions. to be Solutions Oracle fourth XX% over and to macroeconomic unfavorable client due expect due on We year-over-year primarily large a in a to down loss basis,

adjusted to of range be the estimate $X.XX, in in the adjusted income diluted an to on of per first net tax of XXXX common which effective share We earnings in $X.XX XX%. first assumes rate quarter quarter the

As will our sales dedicated the other reflect executive resources incremental [indiscernible] IPASS, for Ted the development advisory we’re XXXX intelligence, of making program mentioned, offerings. market in investment and and the quarter benchmarking first

net These by basis. income on are to incremental $X.XX diluted expected costs common year-over-year our impact a per approximately share

be expect adjusted to our reimbursements margin, XX%. before approximately revenues We to gross XX%

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

quarter be approximately We XX%. on expect revenues adjusted before the to to first range of reimbursements in XX% EBITDA

tempered to the of be payment of and Lastly, net activity by related tax bonuses the income vesting shares. any employee to our buyback cash of payment XXXX performance withholding balances restricted due triggered of we excluding expect

review Ted like priorities outlook and point, market to the At months. coming this I’d to strategic it to turn over back our for

Ted Fernandez

Thank you, Bob.

influencing forward, strategic in demand long-term and continues share in their As artificial priority. and demand The be to dramatically thoughts for applications, look impacted and intelligence, clear it way our by compete automation environment digital transformation offers enterprise businesses the a the organization. it workflow me services. near deliver the on but analytics growth XXXX, Digital headwinds opportunity cloud we and infrastructure cloud let our on are innovation and maybe economic

redefining making by created to rates impacted competing it activities capabilities is all With accelerated transformation organizations demand these organizations an said, is affect. and assess intended is being Digital by the change at to new extended which transformation forcing fundamentally remain to competitive. adopt in decision as that increasing pace, disruption, priorities digital the

a As third we the I the mentioned in project meaningful my exited opening comments, during Oracle we quarter, experienced the quarter. disruption of as

We also notice reassessing spending their has clients priorities, so volatility continue to increased.

the improved with that year. efforts, see reduction strategic we the However, go and comfortable be count clients risks, and cost and planning offerings. with clients We year spending core headwinds believe expand. to end throughout reassess will spend are market productivity are saw behavior more and other their large We rebalance to process the we their forward also reductions head projects become experiencing which also believe our they make will and used

half many did demand year-over-year be we until not the of and will the the more the If clients of disruption improvement of this half in year, of comps the the strong face support will will to the behavior correct, first QX our year, the in second half late of to first us, most are the favorable comps half last year. but from of second challenged expect year. more experience Similar the we by further

to clients competition delivery continue. hybrid and This to us our trend industry. demanding greater our provides requirements historical transitioned associates effective us provides personal the their model, the very retain but with retain On to allow them. saw respective a perform the to This – we responsibilities provides which travel quarter Long-term, hybrid the flexibility struggled sales moderate expect retract we that our that valuable we teams. talent executives and of the us with talent access model because which is and have to experienced in side, and for of to defined also turnover to continues, during have past, remotely, should

services and high the marketing high sales our dedicated to resources related accelerating IP recruiting the on IP focus Strategically, on by I’m area. and services we this sorry, recurring margin are increasing margin focus development related – program

continued new I’ve mentioned, have on Connect we as Hackett to which member investments plan we launch next our over Additionally, several months. our platform, the

previously I across providers software and of As mentioned, assess programs new the capabilities unique categories. and selected that we launched series a highlight of market have intelligence service will

in result to which creation high long-term to costs, important and margin see important increasing absorbed strategy. our our revenues research continue note are very increased advisory also in guidance, downstream will recurring but they value to from benchmarking are It approximately and our incremental to services. believe transformation We business technology our revenues, we $X.XX in these which that we is consulting clients QX

has been in likely put, rely our IP our utilize who last the also consulting services research more over on several This to services. halo and are effect years. excess benchmarking organizations XX% Simply of

We are through allow also very allow that a efficient focus will reach beyond in new us will exploring to strategic our that our current partnerships manner. syndicate Global IP channels us to X,XXX

new new launch agreements our We expect sign other to slowly April markets from started announce are recurring IP. to the these efforts, on – and the from licensing our segments the as relationship our syndication IP X. first revenue Similar our to of contact offered and and of new high build this and we partner margin expect

benefit global compelling solution, allow effort. their realization and transformation less of over create process our to and track case deliver IP initiatives our leverage our Quantum to platforms life clients leadership more transformation to benchmarking enhancements through decisions, configuration our in significantly information respective value software-as-a-service along redefine the software benchmarking with of assessments, with digital allows flow effort. to the us These digital also continue platform. accelerate It also We Leap, our

As market. I platforms several the have there quarters, comparable are believe we repeated over IP-led last the in no

mentioned we so – previous to our have Investor platforms. with more investors the calls, Relations of page these a familiar can become As have on of capabilities added that website I our minute demo XX our with capabilities

demo We in launched will the months. be platform next our updating with newly Hackett few our

client we capability, business, the scale and grow at strategically or we to offerings and can continue though look acquisitions growth. accelerate for IP we that base alliances that our a even have our to leverage which believe Lastly, scope, and our

always, by their tireless performance our highly associates always by people, stay and challenges for efforts, let them our and Those thanking congratulating no on conclude close on what and my comments. matter may encounter. them focused As our our me urge to clients we

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

Operator

Thank first question. One [Operator Instructions] for moment our you.

Our first Sutton question is with Craig-Hallum. from George

go may You ahead.

George Sutton

the could I headwinds back get you’ll little that clients face. thought comfortable more a you. into of Thank if Ted, wonder more to on in you anticipating want they and sounds you’re of that all like with It detail sales go the kind the process at how we’re playing looking kind what QX QX see through just of and of the you growth walk and year the to beyond. rest from I becoming out?

Ted Fernandez

QX, QX now all, then of Oracle, first only in specific on QX to and basis. year-over-year through off level We which down is will QX. reference expect be a in return the growth them Well, to

done bump speed we’ve we in with SAP, SAP, time. QX that obviously achieved the of quarter, would at but pretty you We’ve thought with which nice Oracle loss that XXXX. anticipate that in client the As a Oracle that, happen recall, we hit for didn’t fourth and

quarter in Obviously, it towards second ahead those We clients’ down guidance record our exceeded QX know, demand very half first feeling the quarters to look, last I just that in And $X.XX us, we’re that of we got large were the said, of end that clearly were experience, second we had both quarters for and in strong started as experiencing reacting quarters. two experienced really by that of guessing With you that trended very quarters improvement two wasn’t us the last of XXXX before. XXXX. as mentioned, not we year. and QX, we’ve because and what

we like up really in for So it limited. behavior, QX it what impacted in that volatility first see? client’s saw sneak did but late show time, We was the we Look, a QX. saw more

the do QX, of we that experienced planning past. As clearly clients to was many saw into got we them what unlike starting have in

as side beginning of the many tech companies, started You’ve clients all large annual the with QX, decisions, initiatives of into then all headcount their the planning, pretty launching and think We of planned their some seen cuts. think of we pretty were on especially aggressive the considered those quarter. did in went deal carefully

as as expected see the into are one So seen. clients, But two recently initiatives beginning activity or we disrupted whether the not for are We and it think the mentioned time that QX it’s as and remains was as or towards if many demand are we as most QX, and impacted expect QX with increased, because today, them of to the unless increase – we QX launching be the more with quarter. also rates of second which our the us QX to it’s many that from softness as second the QX, and and they further, to now in is comps market. clearly behavior whether But in of and or again, of call times favorable these QX unless three it further, disrupted exited QX, QX. they not because dealt deal from QX them versus clients both their, both into expect to then many and see improve improve it I’ll and will are activity of to and do trying QX

they What sizing resetting George, was both So aggressively dealt much believe of spending or the has it’s right place. I that it facing? priorities, of they’re taken comps they How believe with? combination what

is will a be of more it the XXXX, companies or in made XXXX, they first to spending XXXX comps improved is, up sets of course, be XXXX, which into as they more modified? I but that as it believe of half favorable should it many then of priorities behavior tougher the because always comps and Of half So like of the the year. modified exited go the second both and decisions reset inverse

if will of And their with missed end with have than you the reduction call to any resetting dealt their, QX. QX cost that effort, that efforts later they or want of if it they no

that all to that believe first us activity a from to will the half. leads pipeline sales and of So velocity revenue the second half and improve

George Sutton

incremental other question, in a could, us of terms will this One just people, the can if in that $X.XX quarter, you content, in I what first of terms investment these give cost little are terms more et of detail in cetera? investments

Ted Fernandez

is largest we’ve that headcount our accelerated related Well, into to continued it IP single into the and do it started of the to and now to that, let’s businesses. expenditure year, increase quarter in second trying the that We last third sales we’re call aggressively increase the fourth, in QX.

We to that that, have no – off. plans turn I’ll call

of the up smart we’re and ramp the we think way kind the we that in trying to be resources effectiveness I expect.

grow we for is to you prospects significant. and it market lack sure we the if world-class we’ve We us governors in away overspending not but that throwing got that intelligence those, look, So, think sales what of all or make want thing group. to Advisory, the we’re shouldn’t, call place that IPaaS biggest our to is a Research programs new offerings, continue to

year. the both adding mid-level and senior, people to throughout entry, will our that do We’re continue and team to

XXXX intelligence had in and two advisor, added improved content one that group. place, to functionally in the programs. the the added XXXX, previously focused that are executive tiers existing as market of programs launched We’ve We which we have we’ve entered

that maintain level in of annual changes we We to high would expect we others throughout expect We we valuation all that of result that want come pretty Hackett. that believe, to to the the in significantly and think growth opportunities group I’ll valuation. to to for XXXX, the add call what group. value all it of activity that a and contract

comes that advisory at as increasing to it add become since call time of the it so effort. we that seen downstream also into syndication that IP for primarily do the as research base syndicate productive And will IP, side But new the as of and client the growth. taken it higher a can in to valuable can We we in base. on in that investments, us organization. look an consulting comes cake eat growth we’ll But drive to strategic the and halo effect is led launch, as business what a us we but IP start get it’s That’s from – harvest basis this the last – increasing gotten believe our all group, And historically IP basis, revenue But kind if that our also, improved extended will to too, at client recurring obviously halo partner several has order we’ve hope that’s to April. an the then we’ve It of some and and really prove. been transformation client years we just see that then these into over intend I’ll have and clients. it’s complete kind margins. we are things more to well. our allow that syndicate, of to then effect that from technology It

George Sutton

Got you.

Okay. Thanks, Ted.

Operator

Thank you. Martin [Operator Our Instructions] from question MKM. with next ROTH Jeff is

ahead. You go may

Jeff Martin

Thanks. Hope Rob. you’re doing well. Good evening, and Ted

Ted Fernandez

Hey, Jeff.

Rob Ramirez

Hi, Jeff.

Jeff Martin

table. the I your to what Hackett think a holding the line pilots progression the sticking to the get to matter on sense the converting terms brings – value you to been has in know is of pilots. of a and for guns in as-a-Service contracts to creation wanted IP past, Hackett in Ted, that

to kind made you continues to that be that progress curious sufficiently if satisfied or was are you’ve if determined Just be a situation? with, of –

Ted Fernandez

is yes. Well, the answer

and call to compelling can by it if through and of becoming success service the value from providers becoming we software a with XXXX of learned provide software software providers. I people increasingly The important way purchasing XXXX. second existing demonstrate the our and be and the seems their sell to half believe that we noticeable. find way to to services in, to to First, you process a What focus has realization went more want programs is get the become,

One, we’ve just very done make we sure were I very, our platforms commercially that. mean, well. ready. needed to that And

We also not wanted to pilots make do being did paid. sure were that we any that not

today to activity basis. of a that them people our offering on evaluate as got the paid capability scope So is we’ve

So launched expose that large creating can cadence, the we see right our hope think and to like to will multi-year meaningful some understand allow have place have those turn already. And of into them power. in them ones how we’re is we yes, pilots leverage capabilities, the best we the agreements to which we they that companies

Jeff Martin

And wanted project there on to that large third fourth Okay. both wanted third quarter separate quarter. the start to from correct? in about call, discussion clarify was clarify, supposed was EPS transportation regarding impacting and to $X.XX a I that transformation that’s and then digital is QX, that by in company was the canceled,

Ted Fernandez

were an We from it but of an by didn’t had head. quarter their the client lose we ours. very component. priorities the business we fours where these transformation two and with apart and But the Yes, that client. an and Separate took a third that Oracle their to component, did given have lost also good opportunity, a One in opportunity existing focus.

deals. a several brand we exited if recall, I was large as the we The the mentioned other you quarter, new that sale, fact sold quarter last

which of again, was with large So was transactions And would necessarily the we carry not also that a by first those second transformation QX into significant the one. the business most impacted the even QX, into a piece into group were momentum group amount was though there Oracle one, QX. to going

to to decided make impacted it And he done a said, the in, CIO meaningful we way. recognized QX new some the we a impacts that wanted paid for revenue change. date, work had of we but just QX us would came in They have clearly as very the

So separate were those were distinct. setbacks, they but and

ability the cash doing. a with and that would they circumstances see fact, business, to to setbacks. we XXXX the client have look and would’ve few absorb But the next as and those chance impact the the you’re those demonstrate can In beginning they increase happen, if of – have and the board we hadn’t it change, continue sometimes over been we I change, to work what profitability have had flow looked And that XXXX wonderful we’ll relationships to of quarters. shared like and

Jeff Martin

I – And great. if more one Okay, could. one then

On the months Matrix the over Excelleration that how from here, in and and of contribution that about the does medium- pending what entail launch initiative? couple a all Hackett long-term should we launch think

Ted Fernandez

first learning launching. of we’ve – First the there’s first we’re some the been programs through that come few as

soon pretty – the you results. that fact with see publicized one is first So the will them the

Second one underway. well is

in launched get In has let’s meaning – having pursuing through launched, participants. we out us end call can as – fully we has actively not market five our four participants, user but and allowing base or just them place, we fact, it one – as –add XXXX. But get end the of results the the then to throughout already group and third continue if try a participants if already add to to can will well

market third the beginning of levels the they’re both. have accrue both, and to in to have If even though year the the in opportunity by to seeing that those different just we quarter. the first we we an So ability start programs do from fourth do revenue the

And have these intelligence value contract new as in Jeff, market of the team about salesforce the recurring also features large programs. I annualized all primary revenue, the they note sell In as around advisory to IPASS being the Even and that and though it’s to focus will said XXXX opportunities. very tiers existing or both added to ability other build important is the some identify resources programs, the to, to as [ph] executive as additional we’re meantime, adding they sales which we benchmarking the expanded feeded of well programs.

We’ve that as well we we’ve could in to separated be, non-recurring additional – pieces, for transformational have decided the a for as which making for investments dedicated a example, benchmark. want group

– we’re that some the in you’ll to as but So announcements soon group. the making see you’ll people accelerating board on see bringing investments we’re and we’re in that that some of – clearly group,

Jeff Martin

and progress Great. the forward following Very to look helpful there.

Operator

next question with The you. Research. Barrington from Thank is Colicchio Vince

go may You ahead.

Vince Colicchio

that was particular was or I’m intelligence resource Yes, Is your Ted, issue there I challenge? market program than slower a correct, anticipated. if any think rollout

Ted Fernandez

But yes, were programs. Well that, it’s been those participants that think happened but both. And we an adding of getting we also learning and exceptional group. feedback, to development that improvement first back there We’ve part in was from little initial and product resulting resources recruiting a the as it’s product.

Vince Colicchio

in Per first first – three curious for half reset not quarters. you’re And in the expectations their just your comments on, expecting, have clients Oracle spending. growth

and right is to us? just so cancellations predict think you are Or behind tough do delays maybe curious, it now? Just

Ted Fernandez

has of things we’ve you priorities, never us. the good and move it size to clearly reset and right happen, to a sense We’ve are I and is really initiatives it for expectations look and to people I as do see year. and faced priorities earnings, have in mean, announce XXXX you’re all say clients all events included process, again, reset the to their industries. it they I of really things and had in report mean, planning rare the course, seeing into chance their reductions reprioritization my that but it would which that continue know, seen beginning compliance change reset of across as we’ll

try believe interest a in what to bit demand disrupt half timely that, continues look, throughout their think know basis. a market we that deferred in decisions of were many pretty We the they a But who accelerate feel XXXX We will it’ll the and disruption But created; I rate rates and that spoken have also That’s good and pretty I a was improve their are on place. needed see in to clear interest to, increases that who shakeout QX increases XXXX on share imagine the people, been process more. that not may second right-sizing for and spend they employees. half and so we as that, those to just good in QX, demand clients second those and brought the little and year. I guided and so say penalizing of it’s resetting XXXX live allowed what I that can’t think, QX into QX as what to it’s thoughtful plan those the Those was pursue when for being think it’s the market of properly. think when had as they’ve reported

Vince Colicchio

the Thanks all color. for Ted. Thanks

Operator

no Thank I you. And show over this time, further will Mr. questions. Fernandez. at I turn back the to call

Ted Fernandez

our when let and report everyone the Operator again for first in call. you you, Look quarter. me Thank updating fourth earnings participating we forward to quarter thank

Operator

conference. conclude for today’s all you does Thank that participating. And

at disconnect this You may time.

The Hackett Group, Inc. (HCKT) 21 Feb 232022 Q4 Earnings call transcript