Yahoo Finance Resources Connection, Inc. (NASDAQ:RGP) Q3 2024 Earnings Call Transcript
Resources Connection, Inc. (NASDAQ:RGP) Q3 2024 Earnings Call Transcript April 3, 2024
Resources Connection, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon, ladies and gentlemen, and welcome to Resources Connections, Inc. Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. At this time, I would like to remind everyone that management will be commenting on results for the third quarter ended February 24, 2024. They will also refer to certain non-GAAP financial measures. An explanation and reconciliation of these measures to the most comparable GAAP financial measures are included in the press release issued today. Today's press release can be reviewed in the Investor Relations sections of RGP's website and filed today with the SEC.
Also during this call, management may make forward-looking statements regarding plans, initiatives and strategies and the anticipated financial performance of the company. Such statements are predictions and actual events or results may differ materially. Please see the Risk Factors sections in RGP's report on Form 10-K for the year ended May 27, 2023 for a discussion of risks, uncertainties and other factors that may cause the company's business results of operations and financial condition to differ materially from what is expressed or implied by forward-looking statements made during this call. I will now turn the call over to RGP's CEO, Kate Duchene.
Kate Duchene : Thank you, operator. Good afternoon, everyone, and thank you for joining us today. In Q3, we delivered solid performance across the enterprise despite a macro environment that continues to be sluggish and uncertain. In the quarter, client engagement extensions and client retention have been robust, with new project starts still taking longer to convert than previous cycles. On revenue, we performed consistent with expectations, while also continuing to deliver strong cash flow conversion this fiscal year. On SG&A and therefore, adjusted EBITDA, we well exceeded our expectations, remaining disciplined on cost in this environment and driving efficiencies in headcount. Our balance sheet remains pristine. During Q3, we saw a positive momentum in certain regions.
Asia Pacific returned to growth from earlier quarters in the fiscal year. Our Mexico, India and Switzerland practices all grew year-over-year as we delivered long-term projects for large strategic clients. North America reflected the overall choppy operating environment as clients want more confidence in lower interest rates and improving economic indicators before moving ahead with many major initiatives. Countsy, which is our business unit delivering outsourced finance and accounting and HR services for startups, scale-ups and spinouts also grew in the quarter. In fact, Countsy is seeing the strongest demand for services since the pandemic. Our pricing initiative in the U.S. has progressed with a 1% increase in bill rate year-over-year. Overall, this quarter reflects success with what we can control, including superb customer service and client retention, improving operating efficiencies and maintaining a very strong balance sheet.
This success will allow us to be fast and ready as soon as the broader buying environment improves. Turning to our operational metrics. We're pleased with that our pipeline remained resilient and steady through the quarter. The pipe is not created equal as we see growth in both health care and financial services opportunities, while other sectors are still cautious. Veracity, our full-service digital transformation business, added almost 100 new opportunities in its pipeline during Q3. We are laser-focused on all the opportunities involving technology, digital and portfolio change. Such deals are non-discretionary, longer term and require larger teams. For example, ERP cloud migration opportunities are on the rise, and we've built consulting, delivery and a talent pipeline ready to respond.
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