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

Tim Brackney: Andre, let me just add a couple of things. One is, I think the tech sector, which has been under fire the whole year, we’re starting to see some flying there as some of the reorganizations and some of the strategic decisions that were put into play in the early part of the year are starting to shake out. So starting to get some firmness around workforce plans and their project slates. I’d say the same thing is true about healthcare, at least in some of our large healthcare clients. I think financial services, even though there has been some good news generally about the economy and interest rates and things like that, it’s still a little bit mixed there. So we have some clients that are starting to pursue things. And then we have other clients that are still sort of going through evaluations.

Andre Childress: Great. Thank you. That’s very helpful color. I’ll just ask one more. You talked a little bit about capital allocation in the prepared remarks, but could you talk a little bit more about some of your priorities in the near term, whether that be share repurchases or investments organically?

Jenn Ryu: Yeah, I can take that, Andre. Yes, I mean, we — obviously we have the technology transformation project that is ongoing and that is a pretty significant investment in the mid-$30 million range. So we’re focused on that right now and we also are looking to invest organically in our digital business, our Veracity business. So there’s investment going in that in there as well. So given some of these inorganic investments that we’re making, we, as always, we will carefully consider accelerating buybacks and raising dividends. And so just as a reminder, in fiscal ‘24, we spent $34 million in total on share repurchases and dividends. So that’s roughly about probably more than 50% of our net income for the year and we’ll continue to balance that going forward.

Andre Childress: Great. Thank you for all the answers.

Operator: Thank you. And this concludes our Q&A session. I’d now like to turn the call back over to Kate Duchene for any closing remarks.

Kate Duchene: Josh, I see that we have somebody queued up. Can we open it to take one more call?

Operator: Yes. One moment for questions.

Kate Duchene: Thank you.

Operator: Our next question comes from Stephanie with JPMorgan. You may proceed.

Stephanie Yee: Hi, Kate. Thank you for squeezing me in. Jenn, just on the guide for the first quarter, can you tell us what the organic constant currency same day basis revenue assumption is?

Jenn Ryu: Yeah, sure. So at the top end of the range of $172 million, that’s about a 16% decline from Q1 of last year, Q1 of fiscal ’23. And I just want to remind everybody that Q1 of fiscal ’23 is — is the best Q1 that we had coming out of the pandemic since 2008. So it is a tough comparison. So — but if you look at it on a same day basis at $172 million top end of the range, you’re looking at about a 16% decline from last quarter — last year same quarter.

Stephanie Yee: Okay, great. And Kate, can you — or Jenn, can you remind us how you feel about how RGP is tracking towards your fiscal 2025 financial targets just given the change in the environment, but then also just where we are currently given your comments about the economic environment, just how you’re thinking about those targets that you put forth at Investor Day?