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    HACKETT GROUP (HCKT)

    Q2 2024 Earnings Summary

    Reported on Apr 24, 2025 (After Market Close)
    Pre-Earnings Price$25.27Last close (Aug 6, 2024)
    Post-Earnings Price$25.68Open (Aug 7, 2024)
    Price Change
    $0.41(+1.62%)
    • Enhanced Gen AI Offering: The company’s aggressive investment in its Gen AI capabilities—exemplified by the successful launch of AI XPLR and the upcoming Version 2 with simulation features—has generated strong client interest and better conversion prospects, which could drive future revenue growth .
    • Deepening Client Engagements: The transition from primarily educational discussions to more substantive, customized client engagements indicates a maturing sales pipeline. This shift, where clients now engage in detailed simulation and ideation sessions, suggests a higher likelihood of larger, long-term consulting contracts .
    • Solid Foundation in Core Segments: Continued robust performance in key segments such as Oracle and SAP—with Oracle driving strong momentum and SAP showcasing sustainable business—is reinforcing the company’s recurring revenue base and underpinning future growth ** **.
    • Underperformance in the e-procurement segment: There are indications that reduced sales investments—exemplified by Coupa pulling back on its sales resources—could be adversely impacting revenue in that area.
    • Low conversion rates from AI engagement to projects: Despite conducting hundreds of educational and exploratory client meetings around AI XPLR, actual project conversions remain low, suggesting uncertainty in monetizing these initiatives.
    • Reliance on nascent AI initiatives with uncertain payoffs: The company's aggressive pivot toward Gen AI offerings requires significant resource investment and rapid capability evolution, yet the market response and conversion timelines remain unproven, adding risk to revenue predictability.
    1. Oracle/OneStream
      Q: What drives Oracle and OneStream growth?
      A: Management emphasized Oracle’s strong sales momentum and the strategic benefits of the OneStream IPO as key drivers, while noting that challenges in e‐procurement (primarily Coupa) have contributed to recent pressures.

    2. Top Client Growth
      Q: What fuels top client growth?
      A: They attributed the growth to a meaningful Oracle implementation that expanded into four business groups, reinforcing client confidence and revenue growth.

    3. SAP Momentum
      Q: Is SAP momentum sustainable?
      A: Management believes that despite a modest downturn in some segments, SAP’s performance remains robust and is expected to continue on a solid, sustainable path.

    4. Strategic Partnerships
      Q: What is the partnership strategy?
      A: The strategy is to extend reach past the Global 1000 through vendor collaborations that support AI solutions and expand the company’s market presence.

    5. Market Intelligence
      Q: Is market intelligence de-emphasized now?
      A: Management clarified that traditional market intelligence remains fully integrated with their AI advisory services, ensuring comprehensive support for client needs.

    6. AI XPLR Conversions
      Q: How are meeting-to-conversion rates evolving?
      A: They noted that early meetings, initially focused on education, are shifting toward detailed solution engagements, which is expected to boost conversion rates over time.

    7. Simulation Details
      Q: How fast is the simulation process?
      A: The simulation capability delivers a rapid, detailed assessment of a client’s opportunity by leveraging industry data—though the timeframe varies across industries, it’s proving impressively efficient.

    8. AI XPLR 2.0 Features
      Q: How will AI XPLR 2.0 impact conversions?
      A: Enhanced simulation features in Version 2 are designed to improve client engagement by providing a robust proof of concept that detail both opportunity and feasibility, thereby assisting in closing deals.

    Research analysts covering HACKETT GROUP.