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RGP revenue up 27.5% in fiscal Q4, driven by growing pipeline and size of deals

July 29, 2022

Resources Connection Inc. (NASDAQ: RGP) reported revenue rose 27.5% on a same-day, constant currency basis in its fiscal fourth quarter ended May 28. Gross margin also improved.

The Irvine, California-based professional staffing provider posted its highest revenue in more than a decade.

“We are very excited to have produced the strongest revenue and adjusted EBITDA we’ve seen in over 10 years for both the fourth quarter and full fiscal year,” CEO Kate Duchene said. “We accomplished this by successfully executing on our record pipeline of opportunities across all businesses while remaining disciplined on the cost front.”

(US$ thousands) Q4 2022 Q4 2021 % change % constant currency, billing day adjusted
Revenue                     217,031                                     172,318 25.9% 27.5%
Gross profit                       89,675                                       68,283 31.3%  
Gross margin  41.3% 39.6%    
Net income                       20,527                                       23,248 -11.7%  

RGP reported fourth-quarter revenue was driven by a growing pipeline and size of closed deals over recent quarters, which enabled it to attain growth across most client segments including strategic global and regional accounts.

Revenue by geography

(US$ thousands) Q4 2022 Q4 2021 % change % constant currency, billing day adjusted
North America                     183,817                                     141,518 29.9% 29.9%
Europe                       19,433                                       19,371 0.3% 9.1%
Asia Pacific                       13,781                                       11,429 20.6% 29.1%

RGP noted full-year growth benefited from a renewed focus on raising bill rates.

“As we look ahead, we are greatly encouraged by the solid trajectory of our pipeline supported by reoccurring projects from our strategic clients as they leverage RGP’s experienced talent to help them execute on transformations and fill on-demand talent gaps,” Duchene said.

Full-year revenue

(US$ thousands) FY 2022 FY2021 % change % constant currency, billing day adjusted
Revenue                     805,018                                     629,516 27.9% 28.7%
Gross profit                     316,642                                     241,404 31.2%  
Gross margin  39.3% 38.3%    
Net income                       67,175                                       25,229 166.3%  

Share price and market cap

Shares in Resources Connection were up 11.70% to $22.62 as of 1:15 p.m. Eastern time today; they set a new 52-week high during today's trading session when they reached $23.18, according to FT.com. The company had a market cap of $678.3 million.