8-K: Hackett Group Q1 2026 Results Show Revenue Dip, EPS Decline

The Hackett Group reported first quarter 2026 results with a decrease in revenue and adjusted EPS compared to the prior year, while also holding its annual shareholder meeting.

Summary

• The Hackett Group announced its first fiscal quarter results for the period ending March 27, 2026.
• Total revenue for Q1 2026 was $68.8 million, a decrease from $77.9 million in Q1 2025.
• Revenue before reimbursements was $67.8 million, down from $76.2 million in the prior year's quarter.
• GAAP diluted earnings per share (EPS) was $0.17, an increase from $0.11 in Q1 2025.
• Adjusted diluted EPS was $0.34, which was at the low end of guidance and down from $0.41 in Q1 2025.
• Cash used by operations was $5.1 million in Q1 2026, compared to cash provided by operations of $4.2 million in Q1 2025.
• The company held its 2026 Annual Meeting of Shareholders on April 30, 2026, where a director was elected, an amendment to the Employee Stock Purchase Plan was approved, executive compensation was approved advisory, and RSM US LLP was ratified as independent auditor.
• The company provided a business outlook for Q2 2026, estimating total revenue before reimbursements between $68.5 million and $70.0 million, and adjusted diluted EPS between $0.33 and $0.35.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to the year-over-year decline in revenue and adjusted EPS, despite the company's strategic focus on AI.

Positives

• GAAP diluted earnings per share increased to $0.17 in Q1 2026 from $0.11 in Q1 2025.
• Shareholders approved an amendment to the Employee Stock Purchase Plan, increasing authorized shares by 250,000 and extending the term by three years.
• Shareholders approved the appointment of RSM US LLP as the independent auditor for the fiscal year ending January 1, 2027.
• The company has $22.0 million available under its share repurchase plan.
• The company's Board of Directors declared a second quarterly dividend of $0.12 per share.

Negatives

• Total revenue decreased to $68.8 million in Q1 2026 from $77.9 million in Q1 2025.
• Revenue before reimbursements decreased to $67.8 million in Q1 2026 from $76.2 million in Q1 2025.
• Adjusted diluted EPS decreased to $0.34 in Q1 2026 from $0.41 in Q1 2025, and was at the low end of guidance.
• Cash used by operations was $5.1 million in Q1 2026, a reversal from cash provided by operations of $4.2 million in Q1 2025.
• Outstanding debt on the credit facility was $79.0 million as of March 27, 2026.
• Restructuring costs of $1.956 million were incurred in Q1 2026.

Risks

• Changes in worldwide and U.S. economic conditions impacting business confidence and demand for services.
• The ability to transition capabilities to support generative AI-related consulting services and solutions.
• The ability to effectively integrate acquisitions.
• The ability to manage joint ventures and cooperate with partners.
• The ability to retain existing business and attract additional business.
• The timing of projects and potential for contract cancellation by customers.
• Changes in expectations regarding the business consulting and IT industries.
• The ability to attract and retain skilled employees.

Future Outlook

For the second quarter of 2026, the Company estimates total revenue before reimbursements to be in the range of $68.5 million to $70.0 million. Adjusted diluted earnings per share for Q2 2026 are estimated to be between $0.33 and $0.35.

Management Comments

• "Over the past two years, we have made disciplined, systematic investments to build a cohesive and highly differentiated AI foundation."
• "We believe that the increasing demand for AI, further supported by our expanded partner strategy and our internal transition to a Gen AI enabled delivery platform, provides a significant value creation opportunity for our organization."
• "We are already seeing meaningful productivity gains and expanding scope on engagements leveraging our platforms."

Industry Context

StockSavvy.ai notes that The Hackett Group's focus on Gen AI and digital transformation aligns with current industry trends, but the reported revenue decline and lower adjusted EPS suggest challenges in monetizing these initiatives or broader market headwinds affecting consulting services.

Comparison to Industry Standards

• The Hackett Group's Q1 2026 revenue of $68.8 million is lower than its Q1 2025 revenue of $77.9 million, indicating a year-over-year decline not necessarily typical for firms experiencing strong demand in AI and digital transformation.
• Adjusted diluted EPS of $0.34 in Q1 2026 is below the $0.41 reported in Q1 2025, suggesting margin pressures or increased operating costs relative to revenue.
• The company's stated strategy of investing in Gen AI is a common theme among consulting firms, but The Hackett Group's results indicate a lag in translating these investments into immediate top-line growth compared to some peers who may be reporting stronger uptake.

Corporate Governance

Stakeholder Impact

• Shareholders: Will receive a quarterly dividend of $0.12 per share. The approved ESPP amendment may offer them opportunities for employee participation. The advisory vote on executive compensation indicates general satisfaction with current compensation structures.
• Employees: Benefit from the expanded Employee Stock Purchase Plan, offering increased opportunities for share ownership.
• Creditors: The company's outstanding debt on its credit facility is $79.0 million, and cash used by operations indicates potential pressure on liquidity, which could be a concern for creditors.

Next Steps

• Senior management will discuss first quarter results in a conference call on May 5, 2026.
• The company will pay a second quarterly dividend of $0.12 per share on July 6, 2026.

Key Dates

Recommendation

The company's strategic focus on Gen AI is positive, but the reported decline in revenue and adjusted EPS, coupled with negative operating cash flow, warrants a cautious approach. The upcoming quarter's guidance is only slightly improved and at the low end of expectations, suggesting continued near-term challenges. A 'hold' recommendation reflects the balance between long-term potential and current performance issues.

Keywords

The Hackett Group, 8-K, Q1 2026 Results, Financial Results, Gen AI, Digital Transformation, Earnings Per Share, Revenue