Resources Connection, Inc. announced its financial results for the first quarter of fiscal 2025, reporting revenue of $136.9 million. This represents a 19.5% decline compared to $170.2 million in the prior year's first quarter, reflecting a persistently choppy demand environment.
The company recorded a net loss of $5.7 million, or -$0.17 per diluted share, a significant shift from the net income of $3.1 million, or $0.09 per diluted share, reported in the same period last year. Gross margin decreased to 36.5% from 39.4% in the prior year quarter, primarily due to less favorable leverage on indirect cost of services and lower salaried consultant utilization.
Selling, General and Administrative (SG&A) expenses decreased to $48.9 million from $59.9 million, driven by a $5.1 million reduction in management compensation from a cost reduction plan and a $3.4 million gain on the sale of the Irvine office building. However, a non-cash goodwill impairment charge of $3.9 million was recorded in the Europe and Asia Pacific segment.
Segment performance showed On-Demand Talent revenue declining by 32.7% to $52.5 million, and Consulting revenue decreasing by 3.2% to $55.0 million. The Europe and Asia Pacific segment also saw a 22.7% revenue decline to $18.0 million, while Outsourced Services revenue remained flat at $9.5 million.
Concurrently, RGP unveiled a new brand identity and architecture, reorganizing its business into distinct segments: On-Demand Talent, Consulting (Veracity), and Outsourced Services (Countsy). This strategic shift aims to broaden RGP's addressable market and improve speed to market, with management noting early signs of pipeline improvement and more sizable deal closes.
For the second quarter of fiscal 2025, the company anticipates revenue to be in the range of $135 million to $140 million. This guidance is below the consensus estimate of $143.64 million, indicating continued caution regarding the demand environment.
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