Resources Connection Inc. (NASDAQ: RGP), which operates as RGP, yesterday reported revenue declined by 19.6% on a same-day, constant currency basis to $151.3 million in its fiscal third quarter ended 24 February 2024. 

The decline reflected the overall choppy macro environment as clients want more certainty in lower interest rates and improving economic indicators before moving ahead with many major initiatives, the group stated.

Gross margin was 37.0% compared to 38.3% in the third quarter of fiscal 2023 due to a higher pay/bill ratio and reduced leverage of indirect cost of service on lower revenue.

Net income fell due primarily to lower revenue and gross profit, partially offset by lower SG&A for the current year quarter.

Adjusted EBITDA, a non-GAAP measure, stood at $10.8 million compared to $16.6 million the year prior. The company delivered an Adjusted EBITDA margin of 7.1% in the third quarter of fiscal 2024 compared to 8.9% in the prior year comparable quarter primarily due to lower gross margin and expense deleveraging on the lower revenue base.

“We delivered solid Adjusted EBITDA and free cash flow conversion in the third quarter,” Kate Duchene, Chief Executive Officer, said. “Revenue performance was consistent with expectations, recognising the client buying environment continues to be sluggish and we have the usual holiday impact during this quarter.”

Revenue by geography

The company also announced yesterday that it appointed Bhadresh Patel as chief operating officer effective as of 7 April 2024.

Patel joined RGP in July 2019 as part of the company’s acquisition of digital transformation firm Veracity Consulting Group, LLC. He has served as CEO of Veracity since its founding in 2015 and has been driving the strategy, growth, delivery, and operations of the business since it became a wholly owned subsidiary of RGP. 

Patel has also served as RGP’s chief digital officer since September 2021, responsible for technology, infrastructure, and digital modernisation of the firm. Prior to co-founding Veracity, Patel served as Senior Vice President at ICF, a global consulting and technology services company.

In his role as COO, Patel will oversee the company’s diverse, global business operations and go-to-market strategies.

Resources Connection also recently announced the acquisition of Reference Point LLC, a US-based strategy, management and technology consulting firm focused on the financial services sector. 

Resources Connection set a new 52-week low during Wednesday's trading session when it reached $12.25. Over this period, the share price is down -21.83%. The company’s shares closed at $12.28, down 2.54% on the day. The company has a market cap of $411.48 million.