• Total Revenue: $79.2 million for Q4 2024.
• Adjusted Earnings Per Share (EPS): $0.47, exceeding quarterly guidance.
• Global S&BT Segment Revenue: $43.9 million, with a 4% increase year-over-year.
• Oracle Solutions Segment Revenue: $18.2 million, a 6% decrease year-over-year.
• SAP Solutions Segment Revenue: $17.2 million, a 51% increase year-over-year.
• Adjusted Gross Margin: 47.7% in Q4 2024, up from 43.3% in the prior year.
• Adjusted EBITDA: $19.5 million, or 25.2% of revenues before reimbursements.
• GAAP Net Income: $3.6 million, or $0.12 per diluted share.
• Cash Balance: $16.4 million at the end of Q4 2024.
• Debt Outstanding: Approximately $13 million at the end of Q4 2024.
• Stock Repurchase: 117,000 shares repurchased at an average of $30.95 per share.
• Dividend Increase: 9% increase to $0.48 per share annually.
• Consultant Headcount: 1,284 at the end of Q4 2024.

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Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The Hackett Group Inc (NASDAQ:HCKT) reported total revenues of $79.2 million and adjusted earnings per share of $0.47, both exceeding quarterly guidance.
• The SAP solutions segment overperformed for the fourth quarter in a row, driven by significant value-added reseller transactions.
• The GenAI segment showed strong performance, with increased revenue growth from GenAI engagements, which have higher margins than traditional consulting.
• The acquisition of LeewayHertz resulted in accretive revenue growth and is expected to have a consequential impact on 2025 results.
• The company announced a 9% increase in its annual dividend, reflecting confidence in future cash flows and financial health.

Negative Points

• The Oracle solutions segment experienced a 6% revenue decrease due to the wind-down of a large post-go-live engagement.
• Weakness in the e-procurement and OneStream implementation offerings partially offset the revenue growth in the global S&BT segment.
• The overperformance in the SAP segment in Q4 is expected to temper the first-quarter outlook.
• GAAP net income for the fourth quarter of 2024 was significantly lower at $3.6 million compared to $7.9 million in the prior year.
• The company faces challenges with the integration of GenAI capabilities, which could disrupt traditional enterprise application companies.

Q & A Highlights

Q: Can you provide more detail on the influence of GenAI on your revenues and pipeline? A: Ted Fernandez, CEO: Our client engagements and meetings are increasingly focused on GenAI-related topics. The launch of AI XPLR and the acquisition of LeewayHertz have positioned us at the forefront of these opportunities. We are seeing expanded opportunities and a significant shift in our capabilities compared to a year ago.

Q: How has the development of DeepSeek impacted your pipeline? A: Ted Fernandez, CEO: The advancements in large language models and reduced compute costs are positive for end users. Our expertise in solutioning GenAI opportunities from ideation to deployment positions us well to leverage these advancements. The innovation in our AI XPLR platform and the capabilities brought by LeewayHertz enhance our competitive edge.

Q: What is the outlook for your SAP business following the recent uptick? A: Ted Fernandez, CEO: We experienced strong software sales at the end of the year, which we don't expect to continue at the same pace into Q1. However, we anticipate strong demand for SAP services throughout 2025, especially as SAP introduces new agentic capabilities.

Q: Are AI XPLR meetings converting into implementation contracts, and what is the pipeline visibility? A: Ted Fernandez, CEO: We see increasing activity and clients with budgeted 2025 initiatives, which changes the engagement dynamics. We expect pipeline velocity to increase, with entry points leading to expanded client spending as they realize the value of our GenAI solutions.

Q: Can you quantify the impact of e-procurement and OneStream on your Q4 results and outlook? A: Ted Fernandez, CEO: The GenAI opportunities are somewhat disruptive to enterprise applications, causing some pause in technology investments. The impact was significant enough to affect our GSBT segment's reported growth, which would have been higher without these disruptions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.