Business Overview
Resources Global Professionals (RGP), operating under Resources Connection, Inc., is a global professional services firm that partners with Chief Financial Officers (CFOs) and other C-suite leaders to execute initiatives across finance, digital transformation, data, and cloud environments. The firm’s service delivery model bridges advisory and execution at a global scale.
Headquartered in Dallas, Texas, RGP maintains a global footprint with approximately 40 physical practice offices and multiple virtual offices. The company operates at a significant scale, engaging annually with over 1,500 clients worldwide. As of January 2026, RGP reported that it has served 90% of the Fortune 100 companies. The firm’s value proposition is centered around offering the agility of on-demand talent, the rigor of traditional management consulting, and the accountability inherent in managed services to deliver faster impact and lower risk for its clients. RGP has also been recognized across several industry lists, including the U.S. News & World Report’s 2025-2026 Best Companies to Work For and Forbes’ America’s Best Management Consulting Firms 2025.
Key Financial Performance Highlights
RGP’s financial results for the third quarter of fiscal 2026 demonstrated a contraction in top-line revenue paired with margin resilience and significant improvements in bottom-line net losses, largely driven by cost-reduction initiatives and the absence of prior-year impairment charges.
Revenue: Total consolidated revenue for Q3 FY26 was $107.9 million, representing a decline from $129.4 million reported in the third quarter of fiscal 2025.
Gross Margin: Despite the revenue contraction, gross margin improved by 60 basis points to 35.7%, up from 35.1% in the prior-year quarter. This margin expansion was primarily attributable to a moderate improvement in the pay/bill ratio, reduced holiday pay expenses due to fewer holidays compared to the prior-year quarter, and lower healthcare costs under the company’s self-insured medical program.
Operating Expenses (SG&A): GAAP Selling, General and Administrative (SG&A) expenses improved notably, declining to $45.8 million (42.5% of revenue) in Q3 FY26 from $51.2 million (39.5% of revenue) in Q3 FY25. The absolute dollar improvement of $5.3 million year-over-year was primarily driven by a $1.9 million decrease in employee compensation and benefits costs. This reduction reflects savings from previous workforce reductions implemented in fiscal 2025, as well as recent reductions in force executed in October 2025 and January 2026.
Adjusted SG&A: On a non-GAAP basis, Adjusted SG&A expenses improved to $39.4 million, compared to $43.7 million in the prior-year period.
Net Loss: RGP reported a net loss of $9.5 million for Q3 FY26, resulting in a net loss margin of 8.8%. This represents a substantial structural improvement compared to the net loss of $44.1 million (a 34.0% net loss margin) recorded in the third quarter of fiscal 2025. The severe prior-year net loss was heavily impacted by a non-cash goodwill impairment charge of $42.0 million related to the On-Demand Talent, Consulting, and Europe & Asia Pacific segments.
Taxation: The company recognized an income tax expense of $0.7 million in Q3 FY26, reflecting an effective tax rate of 7.9%. This compares unfavorably to an income tax benefit of $5.6 million (an effective tax rate of 11.3%) in Q3 FY25. The current quarter’s tax expense was primarily driven by profitable foreign jurisdictions, whereas losses in certain domestic and foreign jurisdictions did not yield a tax benefit due to the application of valuation allowances.
EBITDA and EPS: Adjusted EBITDA for the consolidated entity was negative $1.4 million (-1.3% margin) in Q3 FY26, compared to a positive $1.7 million (1.3% margin) in the prior-year quarter. Adjusted diluted loss per common share was $0.09, compared to an adjusted diluted loss of $0.08 in Q3 FY25.
Cash Flow & Balance Sheet: Operating cash flow for the quarter was an outflow of $0.67 million, compared to an inflow of $2.1 million in Q3 FY25 . Total assets stood at $274.1 million, with total stockholders’ equity at $186.7 million.
Segment-Wise Performance
RGP’s business is segmented into On-Demand Talent, Consulting, Europe & Asia Pacific, Outsourced Services, and All Other.
On-Demand Talent: This segment generated $40.9 million in Q3 FY26 revenue, representing a decline from $47.1 million in Q3 FY25. The company noted that it has experienced reduced demand in traditional finance roles within this segment as clients are increasingly adopting artificial intelligence (AI) and automation technologies.
Consulting: Revenue for the Consulting segment fell to $36.9 million in Q3 FY26, down from $52.6 million in the prior-year quarter. On a same-day constant currency basis, this represented a steep 32.5% decrease. The contraction was driven entirely by a 31.5% decrease in billable hours, though this was partially offset by a 2.3% (or 1.6% on a constant currency basis) increase in the average bill rate.
Europe & Asia Pacific: This international segment remained relatively flat, reporting $18.1 million in Q3 FY26 revenue compared to $18.6 million in Q3 FY25.
Outsourced Services: The Outsourced Services segment recorded $9.5 million in revenue during Q3 FY26, slightly up from $9.4 million in Q3 FY25. On a same-day constant currency basis, revenue for this segment actually decreased by 1.7%. This dynamic was underpinned by a 2.3% increase in billable hours, which was offset by a 1.3% decline in the average bill rate.
All Other: The All Other segment, though the smallest contributor, showed growth, generating $2.5 million in Q3 FY26 revenue compared to $1.8 million in the prior year. On a same-day constant currency basis, this represented a robust 34.7% increase. The top-line expansion here was driven by a massive 51.1% increase in billable hours, which compensated for a 9.9% decrease in the average bill rate.
Operational Metrics and Key Drivers
A review of RGP’s underlying operational metrics reveals a strategy focused on pricing discipline and headcount optimization amidst softer volume demand.
Bill and Pay Rates: The overall average bill rate for the enterprise decreased slightly to $122 in Q3 FY26 from $123 in Q3 FY25, while the enterprise average pay rate remained flat at $58.
Segment Bill Rates: Despite the slight consolidated decline, the company successfully executed pricing discipline in key areas. The Consulting segment’s average bill rate increased to $163 in Q3 FY26 from $158 in Q3 FY25. The On-Demand Talent average bill rate also grew to $146 from $143. However, these gains were offset by bill rate declines in Europe & Asia Pacific (falling to $59 from $64) and Outsourced Services (falling to $136 from $140). RGP explicitly attributed improvements in specific average bill rates to its continued focus on pricing discipline.
Consultant Headcount: Aligning the cost structure with current demand realities, the average salaried consultant headcount for the period was reduced significantly to 394 in Q3 FY26, down from 493 in Q3 FY25.
Management Commentary and Strategic Updates
Management’s commentary highlighted an active portfolio management strategy, targeted investments, and a fundamental shift in talent acquisition to adapt to technological market changes.
Portfolio Rationalization (Sitrick Sale): In a major strategic update, RGP announced that it has entered into an agreement to sell its Sitrick crisis communications business. Management noted this divestiture is part of a broader initiative to streamline the business portfolio and concentrate on clients and services where the firm possesses a “competitive right to win”.
Strategic Investments: During the third quarter, management noted making focused investments specifically targeting the On-Demand Talent and Consulting segments. RGP expects these targeted capital deployments to drive revenue growth as the investments mature through an anticipated ramp-up period.
Adapting to AI Trends: Management directly acknowledged the shifting technological landscape, noting reduced demand for traditional finance roles due to client adoption of AI and automation. In response, the company remains highly focused on evolving its on-demand talent base and expanding skillsets to align with this changing market demand.
Capital Allocation: During the quarter, the company paid $4.6 million in cash dividends. Regarding share repurchases, no shares of common stock were purchased under the Board-approved Stock Repurchase Programs during the three and nine months ended February 28, 2026. As of the end of the quarter, approximately $79.2 million remains available for future share repurchases. Management expressed confidence that focusing on these strategic priorities will result in improved future financial results.
Notable Risks and Challenges
The earnings documentation explicitly outlines several structural, operational, and macroeconomic risks currently facing RGP:
Technological Disruption: The most immediate operational headwind is the aforementioned reduced demand for traditional finance roles as clients aggressively adopt AI and automation. Furthermore, the company faces internal risks regarding its own ability to successfully integrate artificial intelligence and machine learning into its business operations.
Restructuring Execution: Both Q3 FY26 and Q3 FY25 contained numerous non-run-rate items, notably restructuring expenses. The company highlighted the explicit risk that it may not be able to realize the full level of benefit expected from these restructuring initiatives.
Client and Contract Volatility: RGP noted the persistent risk that clients may choose to terminate contracts partially or completely at any time prior to completion, impacting revenue visibility.
Operational Execution: Internal execution risks include challenges with recent digital expansion and technology transformation efforts, which may not be successful, as well as the need to build an efficient support structure as the business transforms. Additionally, there are risks surrounding the possibility that recent rebranding efforts may fail to yield expected results.
Talent Retention: The company views the potential loss of senior management or key sales professionals as a critical risk to its operations.
International and Structural Risks: Expanding globally brings additional operational challenges related to international activities, alongside possible disruptions from past and future acquisitions. Furthermore, there are tax-related risks, evidenced this quarter by losses in certain jurisdictions failing to produce tax benefits due to required valuation allowances.
Capital Returns: Finally, RGP explicitly flagged the possibility that it may be unable to, or may elect not to, pay its quarterly dividend in the future.
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