Resources Connection, Inc. announced its financial results for the third quarter of fiscal 2025, with revenue reaching $129.4 million. This represents a 14.5% decline compared to $151.3 million in the third quarter of fiscal 2024, as the demand environment remained choppy.
The company reported a net loss of $44.1 million, or -$1.34 per diluted share, primarily driven by a non-cash goodwill impairment charge. This compares to a net income of $2.6 million, or $0.08 per diluted share, in the prior year quarter.
A goodwill impairment charge of $42.0 million was recorded, with $12.4 million impacting the On-Demand Talent segment and $29.6 million affecting the Consulting segment. Gross margin for the quarter was 35.1%, down from 37.0% in the prior year, partly due to additional holiday pay and lower utilization of salaried consultants.
Selling, General and Administrative (SG&A) expenses increased to $51.2 million from $49.6 million, primarily due to a $1.3 million increase in employee termination benefits associated with a December 2024 reduction in force, known as the '2025 Restructuring Plan.' This plan aims to enhance efficiencies through reduced costs and streamlined operations.
Management stated that results were in line with or better than their outlook, despite disruptions in the U.S. market. The company reported notable progress in driving stronger pricing, larger average deal sizes, and improved win ratios, with pipeline quality meaningfully improving to include higher value and larger deals.
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