The Hackett Group Announces First Quarter 2026 Results

MIAMI--(BUSINESS WIRE)--The Hackett Group, Inc. (NASDAQ: HCKT), a leading Gen AI strategic consulting and digital transformation firm that enables Digital World Class® performance, today announced its financial results for the first quarter, which ended on March 27, 2026.

"Over the past two years, we have made disciplined, systematic investments to build a cohesive and highly differentiated AI foundation," stated Ted A. Fernandez, Chairman and CEO of The Hackett Group, Inc. "We believe that the increasing demand for AI, further supported by our expanded partner strategy and our internal transition to a suite of Gen AI‑enabled delivery platforms, provides a significant value creation opportunity for our organization. We are already seeing meaningful productivity gains and expanding scope on engagements leveraging our platforms."

Financial Highlights

• Total revenue in the first quarter of 2026 was $68.8 million and revenue before reimbursements was $67.8 million. This compares to total revenue of $77.9 million and revenue before reimbursements of $76.2 million in the first quarter of the prior year.
• GAAP diluted earnings per share was $0.17 in the first quarter of 2026, as compared to $0.11 in the first quarter of 2025.
• Adjusted diluted earnings per share, a non-GAAP measure, for the first quarter of 2026 was $0.34, which was at the low end of our guidance, as compared to $0.41 in the first quarter of 2025. Adjusted financial information is provided to enhance the understanding of the Company’s financial performance and is reconciled to the Company’s GAAP information in the accompanying tables.
• As of March 27, 2026, the Company’s cash balances were $6.1 million, with $79.0 million outstanding on the Company’s credit facility. Cash flows utilized by operations were $5.1 million in the first quarter of 2026, as compared to cash flows from operations of $4.2 million in the first quarter of 2025. As of March 27, 2026, the Company had $22.0 million available under its share repurchase plan.
• Subsequent to the end of the fourth quarter, the Company's Board of Directors declared the second quarterly dividend of $0.12 per share for its shareholders of record on June 22, 2026, to be paid on July 6, 2026.

Business Outlook for the Second Quarter of 2026

Based on the Company’s current outlook:

• The Company estimates total revenue before reimbursements for the second quarter of 2026 will be in the range of $68.5 million to $70.0 million.
• The Company estimates adjusted diluted earnings per share for the second quarter of 2026 to be in the range of $0.33 and $0.35, assuming a GAAP effective tax rate of 26.6%.

Conference Call and Webcast Details

• On Tuesday, May 5, 2026, senior management will discuss first quarter results in a conference call at 5:00 P.M. ET. The number for the conference call is [phone], [Passcode: First Quarter]. For International callers, please dial [phone]. Please dial in at least 5-10 minutes prior to start time. If you are unable to participate on the conference call, a rebroadcast will be available beginning at 8:00 P.M. ET on Tuesday, May 5, 2026 and will run through 5:00 P.M. ET on Tuesday, May 19, 2026. To access the rebroadcast, please dial [phone]. For International callers, please dial [phone].
• In addition, The Hackett Group^® will also be webcasting this conference call live. To participate, simply visit https://www.thehackettgroup.com approximately 10 minutes prior to the start of the call and click on the conference call link provided. An online replay of the call will be available after 8:00 P.M. ET on Tuesday, May 5, 2026 and will run through 5:00 P.M. ET on Tuesday, May 19, 2026. To access the replay, visit www.thehackettgroup.com.

Use of Non-GAAP Financial Measures

The Company provides adjusted earnings results (which excludes non-cash stock based compensation expense, stock price award program compensation expense, acquisition-related cash and non-cash stock based compensation expense, amortization expense, acquisition related costs and any one-time costs and includes a GAAP tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP results are provided to enhance the users' overall understanding of the Company's current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain expenses that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of its ongoing primary operations and to provide a consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting. The presentation of this additional non-GAAP information should be considered in addition to, and not as a substitute for or superior to, any results prepared in accordance with GAAP. See the reconciliation of actual results titled “Reconciliation of GAAP to Non-GAAP Measures” in the accompanying tables.

The Company believes that the presentation of non-GAAP financial information on a forward-looking basis, including the guidance contained in this release, provides important supplemental information to management and investors regarding its anticipated results of operations. The Company is unable to provide a reconciliation of GAAP measures to corresponding forward-looking non-GAAP measures without unreasonable effort due to the high variability and low visibility of most of the items that have been excluded from these non-GAAP measures. For example, non-cash stock-based compensation expense is impacted by the Company’s future hiring needs, the type and volume of equity awards necessary for such future hiring, and the price at which the Company’s stock will trade in those future periods. In addition, the provision or benefit for income taxes is impacted by non-recurring income tax adjustments, valuation allowance on deferred tax assets, and the income tax effect of non-GAAP exclusions. The effects of these reconciling items may be significant, as the items that are being excluded are difficult to predict.

About The Hackett Group®

The Hackett Group, Inc. (NASDAQ: HCKT) is a Gen AI strategic consulting and digital transformation firm that enables Digital World Class® performance. Using Hackett AI XPLR™, ZBrain™, XT™, AIXelerator™, AskHackett™, and Quantum Leap® platforms, the company’s experienced professionals and engineers help organizations realize the power of Gen AI from ideation through implementation to achieve quantifiable, breakthrough results with unprecedented speed, allowing it to be key architects of their Gen AI journey. The Company’s expertise is grounded in unparalleled best practices insights from enterprise performance benchmarks from the world’s leading businesses – including 97% of the Dow Jones Industrials, 90% of the Fortune 100, 68% of the DAX 40 and 53% of the FTSE 100. Visit us at www.thehackettgroup.com/.

Trademarks

The Hackett Group®, quadrant logo, Digital World Class® and Quantum Leap® are the registered marks of The Hackett Group®.

Cautionary Statement Regarding “Forward-Looking” Statements

This release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” seeks,” “estimates,” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward-looking statements. Forward-looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Factors that could impact such forward-looking statements include, among others, changes in worldwide and U.S. economic conditions that impact business confidence and the demand for our products and services, our ability to transition our capabilities to support generative artificial intelligence (AI)-related consulting services and solutions, our ability to effectively integrate acquisitions, including the Leeway acquisition, into our operations, our ability to manage joint ventures and successfully cooperate with our joint venture partners, our ability to retain existing business, our ability to attract additional business, our ability to effectively market and sell our product offerings and other services, the timing of projects and the potential for contract cancellation by our customers, changes in expectations regarding the business consulting and information technology industries, our ability to attract and retain skilled employees, possible changes in collections of accounts receivable due to the bankruptcy or financial difficulties of our customers, risks of competition, price and margin trends, foreign currency fluctuations, the impact of the geopolitical conflict involving Russia and Ukraine and in the Middle East on our business and changes in general economic conditions, interest rates and our ability to obtain additional debt financing if needed as well as other risk detailed in The Hackett Group’s reports filed with the United States Securities and Exchange Commission. The Hackett Group does not undertake any duty to update this release or any forward-looking statements contained herein.

The Hackett Group, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
	Quarter Ended
	March 27,			March 28,
		2026			2025
Revenue:
Revenue before reimbursements	$	67,843		$	76,231
Reimbursements		954			1,634
Total revenue		68,797			77,865
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (includes $589 and $4,928 of non-cash stock based compensation reversal and expense in the three months ended March 27, 2026 and March 28, 2025, respectively)		38,505			48,380
Reimbursable expenses		954			1,634
Total cost of service		39,459			50,014
Selling, general and administrative costs (includes $2,068 and $4,744 of non-cash stock based compensation expense in the three months ended March 27, 2026 and March 28, 2025, respectively)		18,446			23,448
Restructuring costs		1,956			-
Total costs and operating expenses		59,861			73,462
Operating income		8,936			4,403
Other expense, net:
Interest expense, net		(1,008	)		(202	)
Income before income taxes		7,928			4,201
Income tax expense		3,647			1,058
Net income	$	4,281		$	3,143
Basic net income per common share:
Income per common share	$	0.17		$	0.11
Weighted average common shares outstanding		25,166			27,587
Diluted net income per common share:
Income per common share	$	0.17		$	0.11
Weighted average common and common equivalent shares outstanding		25,258			28,385

The Hackett Group, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
		March 27,		December 27,
		2026		2025
	ASSETS
	Current assets:
	Cash	$	6,068	$	18,197
	Accounts receivable and contract assets, net		70,284		59,505
	Prepaid expenses and other current assets		5,316		6,175
	Total current assets		81,668		83,877
	Property, software and equipment, net		25,163		24,011
	Other assets		356		358
	Intangible assets		2,869		3,252
	Goodwill		90,187		90,659
	Operating lease right-of-use assets		2,151		2,484
	Deferred tax asset		1,996		1,806
	Total assets	$	204,390	$	206,447
	LIABILITIES AND SHAREHOLDERS' EQUITY
	Current liabilities:
	Accounts payable	$	4,749	$	6,295
	Accrued expenses and other liabilities		24,340		28,824
	Contract liabilities		13,216		12,317
	Income tax payable		-		74
	Operating lease liabilities		1,168		1,259
	Total current liabilities		43,473		48,769
	Deferred tax liability		14,966		12,537
	Long-term debt		78,836		75,818
	Operating lease liabilities		1,103		1,223
	Total liabilities		138,378		138,347
	Shareholders' equity		66,012		68,100
	Total liabilities and shareholders' equity	$	204,390	$	206,447

The Hackett Group, Inc.
SEGMENT CONTRIBUTIONS
(in thousands)
(unaudited)
		Quarter Ended
		March 27,			March 28,
			2026		2025
	Global S&BT (1):
	Revenue before reimbursements	$	36,370		$	42,642
	Cost of sales		20,097			22,325
	Gross margin		16,273			20,317
	Selling, general and administrative costs		7,200			7,531
	Segment contribution		9,073			12,786
	Oracle Solutions (2):
	Revenue before reimbursements	$	15,448		$	20,396
	Cost of sales		10,598			13,695
	Gross margin		4,850			6,701
	Selling, general and administrative costs		1,287			2,334
	Segment contribution		3,563			4,367
	SAP Solutions (3):
	Revenue before reimbursements	$	16,025		$	13,193
	Cost of sales		8,852			7,139
	Gross margin		7,173			6,054
	Selling, general and administrative costs		2,210			1,804
	Segment contribution		4,963			4,250
	Total Company (4):
	Total segment contribution		17,599			21,403
	Items not allocated to segment level (4):
	Corporate general and administrative expenses		3,812			5,656
	Non-cash stock based compensation expense		2,396			2,765
	Stock price award program compensation expense		1,096			5,142
	Acquisition-related cash compensation (reversal) expense		(64	)		308
	Acquisition-related non-cash stock based compensation (reversal) expense		(2,013	)		1,765
	Acquisition-related costs		-			194
	Restructuring costs		1,956			-
	Depreciation expense		1,165			1,025
	Amortization expense		315			145
	Interest expense, net		1,008			202
	Income before taxes	$	7,928		$	4,201
	(1) Global S&BT includes the results of our North America and International Gen AI Consulting, Implementation and Licensing, Benchmarking and Business Transformation offerings, Executive Advisory, Market Intelligence and IP as-a-Service, OneStream and eProcurement.
	(2) Oracle Solutions includes the results of our EPM/ERP and AI Enablement practices.
	(3) SAP Solutions includes the results of our SAP applications and related SAP service offerings.
	(4) Segment contributions consist of the revenue generated by the segment, less the direct costs of revenue and selling, general and administrative expenses that are incurred directly by the segment. Items not allocated to the segment level include corporate costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. Items not allocated to the segment level include corporate general and administrative expenses, non-cash stock based compensation expense, acquisition related cash and non-cash stock based compensation expense, depreciation and amortization expense, any one-time costs, interest expense and foreign currency gains and losses. Corporate general and administrative expenses primarily include costs related to business support functions including accounting and finance, human resources, legal, information technology and office administration. Corporate general and administrative expenses exclude one-time, non-recurring expenses and benefits.

The Hackett Group, Inc.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited)
	Quarter Ended
	March 27,			March 28,
		2026		2025
GAAP NET INCOME	$	4,281		$	3,143
Adjustments (1):
Non-cash stock based compensation expense (2)		2,396			2,765
Stock price award program compensation expense (2)(3)		1,096			5,142
Acquisition-related cash compensation (reversal) expense (4)		(64	)		308
Acquisition-related non-cash stock based compensation (reversal) expense (4)		(2,013	)		1,765
Acquisition-related costs		-			194
Amortization expense		315			145
Restructuring costs		1,956			-
ADJUSTED NET INCOME BEFORE INCOME TAXES ON ADJUSTMENTS (1)		7,967			13,462
Tax effect of adjustments above (5)		(685	)		1,856
ADJUSTED NET INCOME (1)	$	8,652		$	11,606
GAAP diluted net income per common share	$	0.17		$	0.11
Adjusted diluted net income per common share (1)	$	0.34		$	0.41
Weighted average common and common equivalent shares outstanding		25,258			28,385
(1) The Company provides adjusted earnings results (which excludes non-cash stock based compensation expense, stock price award program compensation expense, acquisition-related cash and non-cash stock based compensation expense, amortization expense, acquisition related costs and any one-time costs and includes a GAAP tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP results are provided to enhance the users' overall understanding of the Company's current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain expenses that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of its ongoing primary operations and to provide a consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting. The presentation of this additional non-GAAP information should be considered in addition to, and not as a substitute for or superior to, any results prepared in accordance with GAAP.
(2) Non-cash stock based compensation expense is accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation. The Company excludes non-cash stock based compensation expense and the related tax effects for the purposes of adjusted net income and adjusted diluted earnings per share. The Company believes that non-GAAP measures of profitability, which exclude non-cash stock based compensation expense, are widely used by investors.
(3) The stock price award program compensation expense relates to equity awards that were granted with certain market share price hurdles and service conditions to meet before they are vested. The market price hurdles include twenty consecutive trading days of equal to or greater than $30, $40 and $50 per share price. As of March 27, 2026, the first market condition had been met, and although the shares have not vested they are included in the Company's dilutive shares outstanding for the quarter ended March 27, 2026. As of March 27, 2026, the second and third market conditions had not been met and as such the shares have not vested and are not included in the Company's basic or dilutive shares outstanding. Non-cash compensation of $1.1 million was recorded in the first quarter of 2026.
(4) The Company incurs cash and non-cash stock based compensation expense for acquisition related consideration that is recognized over time under GAAP. The Company believes excluding these amounts more consistently presents its ongoing results of operations because they are related to acquisitions and not due to normal operating activities. The acquisition-related non-cash stock based compensation expense is also accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation.
(5) The adjustment for the income tax expense is based on the accounting treatment and income tax rate for the jurisdiction of each item. The impact of all of the non-cash stock based compensation expense was $404 thousand and $1.7 million in the first quarter of 2026 and 2025, respectively. The impact of acquisition related cash compensation expense was $16 thousand and $78 thousand in the first quarter of 2026 and 2025, respectively. The impact of the acquisition related costs including amortization was $82 thousand and $50 thousand in the first quarter of 2026 and 2025, respectively. The impact of the restructuring cost was $0.5 million in the first quarter of 2026.

The Hackett Group, Inc.
SUPPLEMENTAL FINANCIAL DATA
(unaudited)
	Quarter Ended
	March 27,			December 26,			March 28,
		2026			2025			2025
Segment Total Revenue and Revenue Before Reimbursements (in thousands):
Global S&BT:
Total revenue	$	36,775		$	39,083		$	43,357
Reimbursements		405			468			715
Revenue before reimbursements	$	36,370		$	38,615		$	42,642
Oracle Solutions:
Total revenue	$	15,685		$	14,269		$	21,085
Reimbursements		237			266			689
Revenue before reimbursements	$	15,448		$	14,003		$	20,396
SAP Solutions:
Total revenue	$	16,337		$	22,399		$	13,423
Reimbursements		312			197			230
Revenue before reimbursements	$	16,025		$	22,202		$	13,193
Total segment revenue:
Total revenue	$	68,797		$	75,751		$	77,865
Reimbursements		954			931			1,634
Revenue before reimbursements	$	67,843		$	74,820		$	76,231
Revenue Concentration:
(% of total revenue)
Top customer		4	%		3	%		9	%
Top 5 customers		13	%		13	%		22	%
Top 10 customers		22	%		23	%		29	%
Key Metrics and Other Financial Data:
Total Company:
Consultant headcount		1,247			1,301			1,332
Total headcount		1,535			1,588			1,618
Days sales outstanding (DSO) (1)		67			55			55
Cash (used by) provided by operating activities (in thousands)	$	(5,067	)	$	19,066		$	4,195
Depreciation (in thousands)	$	1,165		$	1,073		$	1,025
Amortization (in thousands)	$	315		$	311		$	145
Capital expenditures (in thousands)	$	2,414		$	2,008		$	1,544
Remaining Plan authorization:
Shares purchased (in thousands)		212			2,032			206
Cost of shares repurchased (in thousands)	$	2,966		$	41,223		$	6,202
Average price per share of shares purchased	$	14.00		$	20.29		$	30.16
Remaining Plan authorization (in thousands) (2)	$	22,034		$	11,368		$	21,315
Shares Purchased to Satisfy Employee Net Vesting Obligations:
Shares purchased (in thousands)		121			37			173
Cost of shares purchased (in thousands)	$	1,666		$	762		$	5,514
Average price per share of shares purchased	$	13.84		$	20.67		$	31.84
(1) Given the increase in Value Added Reseller (VAR) revenue over the last two years, which carries multi-year terms, the DSO calculation has been revised to exclude the related revenue and accounts receivables.
(2) The Company's Board of Directors approved an additional $13.6 million to its share repurchase plan in the first quarter of 2026.