10-Q - HACKETT GROUP, INC. (0001057379) (Filer)

Wed, May 7, 9:05 PM (15 days ago)

### The Hackett Group, Inc. (HCKT) Q1 2025 Financial Performance Summary **Revenue and Profit Margins:** - **Revenue:** Total revenue for Q1 2025 was $77.9 million, slightly up from $77.2 million in Q1 2024. - **Profit Margins:** Net income decreased to $3.1 million from $8.7 million in the same period last year, reflecting a significant drop in profitability. **Cash Flow:** - **Operating Cash Flow:** Net cash provided by operating activities was $4.2 million, up from $2.8 million in Q1 2024. - **Investing Activities:** Net cash used in investing activities was $1.5 million, slightly higher than the $0.9 million in Q1 2024. - **Financing Activities:** Net cash used in financing activities was $9.7 million, primarily due to stock repurchases and dividend payments. **Earnings Changes:** - **Earnings per Share (EPS):** Diluted EPS was $0.11, down from $0.32 in Q1 2024. - **Stock Repurchases:** The company repurchased 206,000 shares at an average price of $30.16, totaling $6.2 million. **Segment Performance:** - **Global S&BT:** Revenue increased to $43.4 million, driven by growth in Gen AI consulting and implementation offerings. - **Oracle Solutions:** Revenue decreased to $21.1 million due to the wind-down of a large engagement. - **SAP Solutions:** Revenue decreased to $13.4 million, impacted by overperformance in Q4 2024. **Uncertainties and Future Operations:** - **Macroeconomic Conditions:** The company faces risks from economic downturns, geopolitical conflicts, and changes in business confidence. - **Integration of Acquisitions:** The acquisition of LeewayHertz is expected to enhance AI capabilities, but integration challenges remain. - **Joint Ventures:** The company is forming a joint venture with LeewayHertz to provide advanced AI solutions, which may impact future operations. **Financial Health:** - **Liquidity:** The company has $9.2 million in cash as of March 28, 2025, and believes it has sufficient funds to meet working capital requirements. - **Debt:** Outstanding debt is $18 million, with a capacity of approximately $82 million under the Credit Facility. **Future Outlook:** - **Gen AI Focus:** The company is positioning itself as a leader in Gen AI-enabled consulting services, which may drive future growth. - **Risk Factors:** The company faces risks related to economic conditions, competition, and the successful integration of acquisitions. **Conclusion:** The Hackett Group, Inc. (HCKT) reported a mixed Q1 2025, with revenue growth but a significant drop in profitability. The company is focusing on Gen AI and strategic acquisitions to drive future growth, but faces uncertainties related to macroeconomic conditions and integration challenges.