The Hackett ((HCKT)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The Hackett Group’s most recent earnings call presented a mix of positive and challenging developments. The company reported exceeding its quarterly guidance, significant growth in SAP Solutions, and benefits from a strategic acquisition. However, these positives were tempered by declining revenues in the Oracle segment, weaknesses in eProcurement, and a cautious outlook for the first quarter of 2025.
Exceeding Quarterly Guidance
The Hackett Group achieved total revenues of $79.2 million and adjusted earnings per share of $0.47, both surpassing their quarterly guidance. This performance was led by robust results in SAP Solutions and the Global S&BT segment.
SAP Solutions Segment Growth
The SAP Solutions segment experienced a remarkable 51% revenue increase compared to the same period last year, fueled by strong software-related sales and an expanded sales force. This growth highlights the segment’s pivotal role in the company’s positive financial performance.
Gen AI Revenue Growth
Revenues from Gen AI consulting and implementation contributed to a 4% boost in the Global S&BT segment. This growth underscores the increasing importance of AI-driven solutions in The Hackett Group’s service offerings.
Strategic Acquisition of LeewayHertz
The acquisition of LeewayHertz resulted in accretive revenue growth and expanded Gen AI capabilities, positioning The Hackett Group as a leader in AI-enabled transformations for clients.
Improved Gross Margin
The company reported an improvement in its adjusted gross margin to 47.7%, up from 43.3% in the previous year. This improvement reflects better operational efficiencies and cost management.
Increased Dividend
The Hackett Group’s Board of Directors approved a 9% increase in the annual dividend, raising it from $0.44 to $0.48 per share, signaling confidence in the company’s ongoing financial health.
Oracle Solutions Segment Decline
Despite positive developments, the Oracle Solutions segment saw a 6% revenue decline due to the wind down of a significant engagement, highlighting challenges in maintaining growth across all segments.
Weakness in eProcurement and OneStream Offerings
Growth from Gen AI consulting was partially offset by weaknesses in eProcurement and OneStream implementation offerings, indicating areas that require strategic focus for improvement.
First Quarter 2025 Outlook
The Hackett Group provided guidance for the first quarter of 2025, anticipating total revenues to fall between $75 million and $76.5 million, with adjusted earnings per share between $0.39 and $0.41. They expect combined Oracle and SAP segments to decline by 8% to 10%.
In conclusion, The Hackett Group’s earnings call reflected a blend of strong performance and some challenges. While the company exceeded its quarterly guidance and saw significant growth in its SAP segment, it faces hurdles in its Oracle segment and certain consulting areas. The forward-looking guidance suggests cautious optimism as the company continues to leverage strategic acquisitions and AI capabilities to drive future growth.
