Resources Connection, Inc. (NASDAQ:RGP) Q4 2023 Earnings Call Transcript

Kate Duchene: Yeah. I mean, I’ll just start Stephanie quickly and then hand it to Jenn. I mean, I think we’re in a more challenged environment. There’s no question and it’s not just RGP that’s facing this, it’s really every client we talk to. And all of our professional services competitive set. I mean, I can tell you we are working extremely hard not only on volume and capturing every opportunity, but increasing our pricing so that we drive upside on the top-line through more value-oriented pricing. So do I think that our range is still realistic? I think it’s challenging, but I think it is realistic and we’re working hard to achieve it. So with that, Jenn, do you have more specifics you’d like to offer?

Jenn Ryu: No, I would agree with that. I mean, we are a year into the three-year time period. And we all know that it is — our overall sector has been — the broader sector has been challenged and has been sluggish. With that said, coming out of the pandemic in fiscal ’22, we grew 28-plus-percent. So can we still get there? I think it’s too early to change that range.

Kate Duchene: Yes, Stephanie, I’d also say one of our biggest initiatives and I really hope it’s reflected in all of the models is our improvement in adjusted EBITDA and improving the profitability of the company. And we’re really proud of what we’re driving around enhanced shareholder value. So to me, it’s not just top-line. It’s the combination of return we’re delivering for our shareholder base.

Jenn Ryu: Yeah. Kate, I just have one more [indiscernible] thank you for bringing that up. The adjusted EBITDA, what we said on Investor Day was targeting 12% if you look at our adjusted EBITDA, we’re already — we’ve already exceeded that. And we have also said that longer term, we’re targeting in mid-teen EBITDA and with some of the pricing initiatives that we’re driving to continue to expand our gross margin and our SG&A without the one-time item assuming macro start to recover a bit, we should be able to run between 27% and 28%. And so that’s how we’re looking at our long-term EBITDA margin target is working towards that mid-teens number.

Stephanie Yee: Okay. Great. Thank you. That all makes sense. Thanks very much.

Operator: Thank you. And I’d now like to turn the call back over to Kate Duchene for any closing remarks.

Kate Duchene: Thank you, operator. I want to thank everyone for your support of RGP, your interest in our company and what we’re doing, again to change the way the world works. And we look forward to talking with you after Q1 in the fall. Thanks everyone and enjoy the summer.

Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.