Executive Summary

Q3 FY25 revenue of $129.4M declined 14.5% YoY; gross margin was 35.1% as holiday timing hurt utilization, while pricing and mix improved bill rates; a non-cash goodwill impairment ($42.0M) drove GAAP diluted EPS to $(1.34), with adjusted diluted EPS of $(0.08) .
Versus S&P Global consensus, revenue was essentially in line ($129.4M vs $130.0M*) and adjusted EPS beat (−$0.08 vs −$0.22*), reflecting cost discipline and stronger enterprise bill rates despite volume headwinds (fewer business days, project delays) *.
Management guided Q4 FY25 revenue to $132–$137M, gross margin to 36–37%, and SG&A run-rate to $45–$47M; early Q4 weekly revenue decelerated amid U.S. policy/tariff uncertainty and a 14-week quarter (69 business days) .
Portfolio catalysts: (1) non-cash goodwill impairment ($42.0M) and continued U.S. macro/policy uncertainty delaying decisions ; (2) dividend reset to $0.07/Share (from $0.14) to preserve ~$9M+ annual cash for growth/repurchases ; (3) pipeline quality improving—larger deals, higher win ratios, rising bill rates—positioning RGP for operating leverage on recovery .

What Went Well and What Went Wrong

What Went Well
- Enterprise pricing power and mix improved: consolidated average bill rate rose to $123 ($124 constant currency) vs $119 YoY; Consulting bill rate +12.8% YoY (13.5% cc); stronger pay/bill ratio supported margins despite holidays .
- Pipeline quality and deal size improved: doubled the number of $1M+ engagements won YoY; $5M+ opportunities increasing; Europe showed KPIs improvement and return of $1B+ pursuits .
- Cost actions took hold: run-rate SG&A improved YoY; management lowered run-rate SG&A 8% since Q1 and continues to optimize real estate and discretionary spend .
What Went Wrong
- Volume-driven pressure: revenue down 14.5% YoY; billable hours down 17.0%; On-Demand revenue −26.6% YoY on lower talent churn; Consulting hours −18.8% YoY (partially offset by pricing) .
- Holidays and utilization: mid-week Christmas/New Year’s and Thanksgiving in Q3 reduced utilization and gross margin to 35.1% (vs 37.0% LY) despite improved pay/bill .
- Non-cash impairments: $42.0M goodwill impairment (On-Demand $12.4M; Consulting $29.6M) reflecting slow recovery; Q&A highlighted ongoing U.S. uncertainty (tariffs, policy) causing delays, not cancellations .

Financial Results

Revenue, margins, EPS and EBITDA vs prior periods and consensus

Metric	Q3 FY24	Q2 FY25	Q3 FY25	Consensus (Q3 FY25)*
Revenue ($USD Millions)	$151.307	$145.618	$129.438	$130.000*
Gross Margin %	37.0%	38.5%	35.1%	—
SG&A ($USD Millions)	$49.589	$51.305	$51.189	—
GAAP Diluted EPS ($)	$0.08	$(2.08)	$(1.34)	—
Adjusted Diluted EPS ($)	$0.17	$0.18	$(0.08)	$(0.22)*
Adjusted EBITDA ($USD Millions)	$10.786	$9.656	$1.651	—
Adjusted EBITDA Margin %	7.1%	6.6%	1.3%	—

Estimates marked with * are values retrieved from S&P Global.

Segment revenue and YoY change (Q3 FY25 vs Q3 FY24)

Segment	Q3 FY24 Revenue ($M)	Q3 FY25 Revenue ($M)	YoY %
On-Demand Talent	$64.162	$47.089	−26.6%
Consulting	$55.828	$52.597	−5.8%
Europe & Asia Pacific	$19.631	$18.576	−5.4%
Outsourced Services	$9.375	$9.367	0.0%
All Other	$2.311	$1.809	−21.7%

Segment Adjusted EBITDA margin

Segment	Q3 FY24 Margin %	Q3 FY25 Margin %
On-Demand Talent	11.4%	5.5%
Consulting	15.7%	11.2%
Europe & Asia Pacific	6.8%	4.5%
Outsourced Services	16.8%	15.9%
All Other	−10.6%	−40.2%

KPIs

KPI	Q1 FY25	Q2 FY25	Q3 FY25
Consolidated Avg Bill Rate ($)	$118	$123	$123
Consulting Avg Bill Rate ($)	$145	$154	$159
On-Demand Avg Bill Rate ($)	$140	$140	$140
Europe & Asia Avg Bill Rate ($)	$56	$59	$59
Outsourced Services Avg Bill Rate ($)	$139	$140	$137
Consultant Headcount (EOP)	2,570	2,639	2,514
Avg Pay Rate ($)	$57	$59	$58
Cash & Cash Equivalents ($M)	$89.625	$78.197	$72.495

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q4 FY25	N/A	$132–$137	New
Gross Margin %	Q4 FY25	N/A	36–37%	New
SG&A Run-Rate ($M)	Q4 FY25	N/A	$45–$47	New
Non-run-rate & Noncash ($M)	Q4 FY25	N/A	$2–$3	New
Business Days	Q4 FY25	N/A	69 days; +4 vs LY context provided	New
Dividend per Share ($)	Ongoing	$0.14 declared in Q3	$0.07 payable 7/21/25	Lowered

Notes: Management flagged lighter early Q4 weekly revenue run-rate and decision delays in North America; Europe/Asia and Outsourced expected stable .

Earnings Call Themes & Trends

Topic	Q1 FY25 (prior two quarters)	Q2 FY25 (prior quarter)	Q3 FY25 (current)	Trend
Diversification & brand refresh	Launched refreshed brand; organizing into On-Demand, Consulting, Outsourced; early pipeline improvement and cross-sell	Sequential revenue growth; improved GM and adj. EBITDA over Q1; push cross-selling and utilization	Larger average engagements (+20%); doubled $1M+ wins; CFO+1 expansion; stronger win ratios	Improving quality, larger deals; volume still lagging
Technology/AI enablement	Tech transformation underway to improve speed to market	Continued; cost discipline and sequential Consulting growth	Cloud migration (SAP/Oracle), ServiceNow optimization, data/architecture; enabling AI adoption via Reference Point	Growing emphasis on digital, enterprise transformations
Macro/policy & demand	Clients delaying transformations; choppy demand	Pipeline timelines extended; post-election confidence and rate cuts noted	U.S. uncertainty (tariffs/DOGE) driving delays; Europe/JP/PH strengthening; extensions up	U.S. headwinds; international stabilization
Pricing & mix	U.S./Europe bill rates up YoY; APAC mixed	Enterprise bill rate up modestly; mix shifting to APAC and Mexico	Enterprise bill rate up; Consulting bill rate +13% YoY; pay/bill improved	Sustained value-based pricing gains
Cost structure	SG&A down YoY; building efficiency	Cost discipline; improved SG&A; restructuring impact	Run-rate SG&A reduced ~8% since Q1; ongoing real estate and discretionary optimization	Leaner run-rate; further efficiency targeted

Management Commentary

“We delivered results in line or better than our outlook… notable progress driving stronger pricing, larger average deal size and better win ratios” — Kate W. Duchene, CEO .
“Enterprise-wide average bill rate [rose]… led by our Consulting segment with a 13% increase over the prior year quarter” — Jennifer Ryu, CFO .
“Doubled the number of $1 million-plus engagements… pipeline of opportunities at the $5 million-plus level has grown significantly” — Kate W. Duchene .
“Our balance sheet remains strong with $73 million of cash and cash equivalents and 0 outstanding debt” — Jennifer Ryu .

Q&A Highlights

Demand timing vs cancellations: Delays, not cancellations, particularly in the U.S.; Europe benefited from added projects and more extensions .
Guidance mechanics: Q4 is a 14-week quarter (69 business days); variability driven by North America On-Demand and Consulting pace of deal closings and starts .
Macro/policy drag: Tariffs/policy headlines increased uncertainty late Q3; clients postponing expensive decisions, extending time-to-close .
Cost levers: Continued focus on fixed cost reduction, real estate optimization, and tech-enabled efficiencies while preserving long-term investments .
Dividend sustainability/FCF: Board sets dividend; intent to balance sustainable dividend with growth and repurchases; as environment normalizes, targeting high-single-digit EBITDA margins at ~$600–$700M revenue and 75–85% FCF conversion from EBITDA historically .

Estimates Context

Q3 FY25 revenue: $129.4M vs S&P Global consensus $130.0M* (essentially in line). Q3 adjusted diluted EPS: $(0.08) vs consensus $(0.22)* (beat). There was one EPS estimate and two revenue estimates for Q3* *.
Consensus dynamics: Gross margin and SG&A were better than RGP’s outlook ranges, aiding EPS vs consensus; however, non-cash goodwill impairment drove GAAP EPS to $(1.34) .
Forward look: Q4 revenue guide $132–$137M with GM 36–37% and SG&A $45–$47M points to continued near-term caution; estimate revisions may drift to low end until U.S. decision cycles normalize .