Executive Summary

Q3 2023 revenue was $223.2M (-1.9% YoY; -3.4% QoQ). GAAP diluted EPS was $0.63 (flat YoY), while adjusted EPS was $0.92 (-17% YoY), and adjusted EBITDA was $45.8M (-14% YoY) .
Versus company guidance issued in July, revenue landed within the $220–$226M range, GAAP EPS was above the $0.56–$0.60 range, and adjusted EPS was within $0.89–$0.94; S&P Global Wall Street consensus was unavailable for PRFT this quarter (CIQ mapping missing), so estimate comparisons are not provided .
FY2023 guidance was narrowed: revenue to $907–$912M (from $900–$916M), GAAP EPS to $2.74–$2.79 (from $2.73–$2.84), adjusted EPS to $3.94–$3.99 (from $3.93–$4.05). Q4 guidance: revenue $221–$226M; GAAP EPS $0.64–$0.69; adjusted EPS $0.98–$1.03 .
Management highlighted improving momentum, reiterated integrated global delivery strengths, and announced generative AI initiatives and leadership transition completion; acquisition of SMEDIX (target close Jan-2024) adds healthcare software capabilities and Eastern Europe capacity, serving as catalysts for narrative improvement into year-end .

What Went Well and What Went Wrong

What Went Well

“Our business momentum and performance began to improve during the third quarter and we expect a solid close to the year,” said CEO Tom Hogan, reinforcing stabilization and year-end confidence .
Guidance tightening with a slightly higher FY revenue midpoint and clear Q4 ranges enhances visibility and signals operational control amid demand variability .
Strategic initiatives: launch of a Generative AI Innovation Group; partnership wins and external recognitions (Modern Healthcare, Forrester) support brand and pipeline positioning .

What Went Wrong

Profitability compression: adjusted EPS down 17% YoY to $0.92; adjusted EBITDA down 14% YoY to $45.8M; services gross margin contracted (services revenues net of cost down YoY) .
Revenue mix softness: Healthcare and Auto/Transport industry shares fell vs prior year, contributing to mix-related margin headwinds; revenue down 2% YoY .
Non-GAAP adjustments reflect ongoing amortization, stock comp, FX and business optimization/severance costs, underscoring continued expense normalization needs .

Financial Results

Quarterly performance vs prior quarter and prior year

Metric	Q3 2022	Q2 2023	Q3 2023
Revenue ($USD Millions)	$227.6	$231.1	$223.2
GAAP Diluted EPS ($)	$0.64	$0.73	$0.63
Adjusted EPS ($)	$1.11	$1.00	$0.92
Adjusted EBITDA ($USD Millions)	$53.0	$48.2	$45.8
Income from Operations ($USD Millions)	$33.2	$35.8	$32.2

Quarterly trajectory (Q1–Q3 2023)

Metric	Q1 2023	Q2 2023	Q3 2023
Revenue ($USD Millions)	$231.4	$231.1	$223.2
GAAP Diluted EPS ($)	$0.75	$0.73	$0.63
Adjusted EPS ($)	$1.04	$1.00	$0.92
Adjusted EBITDA ($USD Millions)	$50.1	$48.2	$45.8
Services Revenues Net of Cost ($USD Millions)	$89.2	$87.1	$81.8
Services Revenues Net of Cost (% of Services Rev.)	39.0%	38.1%	37.3%
Adjusted EBITDA (% of Services Rev.)	21.9%	21.1%	20.9%

Industry mix (Revenue %)

Industry	Q3 2022	Q2 2023	Q3 2023
Financial Services/Banking/Insurance	20%	23%	21%
Healthcare/Pharma/Life Sciences	23%	21%	21%
Manufacturing	9%	10%	11%
Leisure/Media/Entertainment	10%	8%	8%
Automotive/Transportation	10%	8%	8%
Other	28%	30%	31%

KPIs (Headcount, ending)

KPI	Q1 2023	Q2 2023	Q3 2023
Offshore/Nearshore Billable Employees (Ending)	3,541	3,573	3,332
Onshore Billable Employees (Ending)	2,412	2,363	2,284
Subcontractors	362	384	302
Total Billable Headcount (Ending)	6,315	6,320	5,918
SG&A Headcount (Ending)	973	989	947
Total Headcount (Ending)	7,288	7,309	6,865

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2023	$900–$916	$907–$912	Narrowed; midpoint raised
GAAP EPS ($)	FY 2023	$2.73–$2.84	$2.74–$2.79	Narrowed; upper bound lowered
Adjusted EPS ($)	FY 2023	$3.93–$4.05	$3.94–$3.99	Narrowed; midpoint ~flat
Revenue ($USD Millions)	Q4 2023	N/A	$221–$226	New
GAAP EPS ($)	Q4 2023	N/A	$0.64–$0.69	New
Adjusted EPS ($)	Q4 2023	N/A	$0.98–$1.03	New

Note: Non-GAAP Q4/FY EPS reconciliation and adjusted share count provided; GAAP FD shares 36.7M; adjusted FD shares 34.3M .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2023)	Trend
Generative AI initiatives	Q1: Hosted Mark Cuban Foundation AI Bootcamps; launched Envision Online platform . Q2: No major AI item highlighted .	Announced Generative AI Innovation Group to help clients realize AI potential .	Increasing focus on AI enablement
Leadership transition	Q2: CEO Jeff Davis to Executive Chairman; Tom Hogan to CEO on Oct 1 .	Transition effective Oct 1; Hogan CEO; Davis Executive Chairman .	Transition completed; continuity emphasized
Macro demand tone	Q2: “Enterprises are proceeding cautiously” with mixed signals .	“Momentum and performance began to improve” with a “solid close” expected .	Stabilizing/improving
Industry mix	Q1/Q2: Healthcare at 21%; Financials 21–23% .	Healthcare 21%; Financials 21%; Manufacturing up to 11%; Other at 31% .	Mix shifts; Other category growing
Cost and margin discipline	Q1/Q2: Adjusted EBITDA margins in ~21% range of services revenue .	Adjusted EBITDA at 20.9% of services revenue; services net-of-cost margin 37.3% .	Slight margin pressure; disciplined cost actions

Sources: Company press releases and earnings decks within 8-Ks .

Management Commentary

“Our business momentum and performance began to improve during the third quarter and we expect a solid close to the year.” — Tom Hogan, President & CEO .
“Perficient’s integrated delivery model that blends great global talent and depth in North America, Latin America and India continues to appeal to the world’s leading companies and biggest brands.” — Tom Hogan .
Prior tone: “Enterprises are proceeding cautiously amidst conflicting macroeconomic signals… In the second half of the year, we’re focused on continuing to deliver best-of-breed margins.” — Jeffrey Davis (Q2 release) .
“Strong bookings have positioned Perficient for increased growth, particularly in the second half of the year.” — Jeffrey Davis (Q1 release) .

Q&A Highlights

Q&A focused on demand stabilization, margin trajectory and FY/Q4 guidance ranges; management reiterated guidance and discussed operational momentum and global delivery strengths .
Clarifications included non-GAAP EPS reconciliation and adjusted diluted shares, as disclosed in the 8-K exhibits .
Industry mix and headcount trends (offshore/nearshore vs. onshore) were referenced to contextualize cost structure and delivery capacity .

Note: Full transcript text was accessed via third-party sites; we cite those sources directly as the internal transcript document retrieval was unavailable .

Estimates Context

S&P Global (Capital IQ) consensus estimates for PRFT’s Q3 2023 EPS and revenue were unavailable due to missing CIQ mapping for the ticker in our data interface; as a result, “vs estimates” comparisons are not provided this quarter [GetEstimates error].
As a proxy, results were compared to company-issued guidance ranges: revenue within $220–$226M; GAAP EPS above $0.56–$0.60; adjusted EPS within $0.89–$0.94 .

Key Takeaways for Investors

Narrative stabilization: sequential decline masked by stronger tone and narrowed FY guidance; watch Q4 execution against $221–$226M revenue and $0.98–$1.03 adjusted EPS targets for confirmation .
Profitability watch: services margin and adjusted EBITDA % ticked down; monitoring mix shifts (Other rising, Manufacturing up) and cost discipline will be key to margin recovery in 2024 .
AI and healthcare exposure: Generative AI initiative plus SMEDIX acquisition (target close Jan-2024) expand capabilities in healthcare software and Eastern Europe; potential medium-term growth vector .
Leadership transition completed: Hogan as CEO and Davis as Executive Chairman reduces governance uncertainty; continuity with long-tenured exec team supports steady delivery .
Valuation drivers near term: delivering Q4 beat on GAAP/adjusted EPS, evidence of demand improvement, and further bookings momentum can catalyze stock; misses on margins or bookings could pressure .
Funding and balance sheet: $80.1M cash at 9/30/23 with long-term debt ~$396.3M; cash generation YTD strong ($88.5M CFO) — provides flexibility for tuck-ins and investments .
Industry mix sensitivity: healthcare and auto softness persisted; watch reacceleration in Financial Services and Manufacturing to support margins and utilization .

PERFICIENT INC (PRFT)·Q3 2023 Earnings Summary