The Hackett Group, Inc.

Welcome to the Hackett Group first quarter earnings conference call. Your lines have been placed on a listen-only mode until the question and answer session. Please be advised the conference is being recorded. Hosting tonight's call are Mr. Ted Fernandez, Chairman and CEO, and Mr. Rob Ramirez, Chief Financial Officer. Thank you, Mr. Ramirez. You may begin.

Good afternoon, everyone, and thank you for joining us to discuss the Hackett Group's first quarter results. Speaking on the call today and here to answer your questions are Ted Fernandez, Chairman and Chief Executive Officer of the Hacker Group, and myself, Rob Ramirez, Chief Financial Officer. A press announcement was released over the wires at 4.05 p.m. Eastern Time. For a copy of the release, please visit our website at www.thehackergroup.com. We will also place any additional financial or statistical data discussed on this call that is not contained in the release of the Investor Relations Picture website. Before we begin, I'd like to remind you that in the following comments and in the question and answer session, we will be making statements about expected future results, which may be forward-looking statements for the purposes of the federal securities laws. These statements relate to our current expectations, estimates, and projections and are not a guarantee of future performance. They involve risks, uncertainties, and assumptions that are difficult to predict and which may not be accurate. Actual results may vary. These follow-looking statements should be considered only in conjunction with the detailed information, particularly the risk factors, contained in our SEC filings. At this point, I would like to turn it over to Ted.

Thank you, Rob, and welcome everyone to our first quarter earnings call. As we normally do, I will open up the call with some overview comments on the quarter. I will then turn it back over to Rob to comment on detailed operating results, cash flow, and also provide guidance. We will then review our market and strategy-related comments, after which we will open it up to Q&A. This afternoon, we reported revenues before reimbursements of $76.2 million and adjusted earnings per share of 41 cents, near and at the high end of our quarterly guidance, respectively. Our results were driven by the performance of our GSBT segment, which was driven by the strong revenue growth from our Gen AI engagements. Gen AI engagements also favorably impacted our gross margin. They demand a higher margin than our traditional consulting and implementation revenues and are driven by the highly differentiated capabilities of our AI Explorer and ZBrain platforms, as well as our implementation teams. Clients continue to move from awareness to budgeted projects, a trend we expect to continue throughout the year. Total GSBT segment revenues were up over 6%, were partially offset by weakness in our one-stream and e-procurement practices. Excluding these practices, our GSBT segment was up 13%. We believe GenAI-enabled transformation is a generational opportunity which will fundamentally change the way companies operate as well as the way consulting services are sold and delivered. The GenAI platform's capabilities of AI Explorer version 3, with ZBrain's ability to orchestrate and build complex multi-agent workflows, is highly differentiated and allows us to compete strongly in this rapidly growing space. More importantly, Most differentiating is the value realization speed of our combined end-to-end capability. AI Explorer's version 3 capability to dynamically identify AI solutions or use cases, design client-specific solutions using Solution Explorer, evaluate feasibility and determine the use case ROI, as well as suggest the required AI agents necessary to orchestrate the agentic workflow is powerful and unique. Combined with the multi-agent orchestration capabilities of ZBrain, which allows our clients to build and deploy the AI solution at scale, creates a powerful combination. It also allows us to serve clients enterprise-wide from ideation to implementation in one fully integrated platform. It also provides a client with a single platform which they can license to fully support their entire AI center of innovation, which we refer to as AI COIs. As expected, our Oracle solutions was down, but activity continues to be solid. The segment was impacted by the wind-down of a large Postal Live engagement, which was partially offset by the continuing strength of the Enterprise Performance Management, or EPM, activity, resulting from Oracle's reestablishment of their dedicated EPM sales force. Our SAP solution segment was down against a strong Q1 VAR comp from last year, but increasing demand for our market-leading life sciences group and the related implementation revenues resulting from our increased software sales activity bodes well for this group for in the second quarter as well as for the remainder of the year. We continue to see Gen AI opportunities emerge. Our early introduction of AI Explorer gave us a great opportunity to engage with hundreds of clients in 2024. These early demo meetings and conversations provided us with valuable AI adoption insight, along with the implementation concerns of our prospects. These initial meetings also provide us an opportunity to propose new GenAI-enabled transformation engagements with these clients that position us to serve these clients both strategically and broadly. On the executive advisory front, we continue to invest in growing our IP-based programs. We believe our move to fully integrate Gen AI content, which is now being further augmented by our Gen AI content, which was infused by the Leeway Hertz acquisition, is being responsive to our clients' strong interest in this area. We recently launched a premium Gen AI solutioning advisory program, with a nationally recognized AI leader to fully leverage our solutioning innovation and implementation knowledge from our platforms and client engagements. This program will be directly targeted to the AI leaders, CIOs, and CTOs who require this knowledge. On the balance sheet side, in the near term, you can expect us to use our strong cash flow from operations to continue our stock buyback program rather than just focus on paying down the remainder outstanding balance of our credit facility while continuing to invest in our business. With that said, let me ask Rob to provide details on our operating results, cash flow, and also comment on outlook. I will make additional comments on strategy and market condition following Rob's comments.