The Hackett Group, Inc.

Welcome to the Hackett Group Third Quarter Earnings Conference Call. Your lines have been placed on 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. Mr. Ramirez, you may begin.

Good afternoon, everyone, and thank you for joining us to discuss the Hackett Group's Third Quarter results. Speaking on the call today and here to answer your questions are Ted Fernandez, Chairman and CEO of the Hackett Group, and myself, Rob Ramirez, Chief Financial Officer. A press announcement was released over the wires at 4.09 p.m. Eastern Time. For a copy of the release, please visit our website at www.thehackettgroup.com. We will also place any additional financial or statistical data that's discussed in this call that is not contained in the release on the Investor Relations page or our website. Before we begin, I would like to remind you that in the following comments and in the Q&A 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 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 forward-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 third 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, as well as 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 $72.2 million. just below our quarterly guidance, and adjusted earnings per share of 37 cents, which was at the midpoint of our quarterly guidance, respectively. What is most promising about the quarter is the level of breakthrough innovation which has resulted in the highly differentiated capabilities of our AI Explorer platform version 4. Specifically, the reactions from both clients and potential channel partners to our version 4 release which we announced on September 8th, has been extremely positive with one potential partner specifically referring to our version four capabilities as being game changing. Correspondingly, we continue to work closely with several global channel partners and expect to announce alliances that could significantly expand our growth opportunities. Our ability to identify, design, and build GenAI solutions based on client-specific processes and enterprise application automation footprints in accelerated time is powerful. It is allowing us to position our platform as an enterprise AI center of excellence must-have capability which accelerates and enhances any client's GenAI adoption effort. Our version four of AI Explorer capabilities is attracting new clients, and it is resulting in an increasing pipeline and new engagements in this increasingly important area. During the quarter, we launched our alliance with Salonis, a leading provider of process intelligence software that provides clients with critical operating insight. By teaming with Salonis, we have now demonstrated that we are able to ingest their process intelligence insight into AI Explorer as well as Sebring to help identify high ROI agentic AI solutions with unmatched speed and detail. We are now finalizing a way for our clients to easily integrate the Salonis Operating Insight into AI Explorer that will allow us to promote a special ideation joint offering to all of our respective clients. The combination of AI plus PI, or process intelligence, will allow customers to quickly move from intention to action with measurable impact resulting in agentic transformation initiatives. Our GSBT second rate revenues were favorably impacted by the StrongGen AI-related revenue growth, which was offset by the expected weakness in our one-stream practice and the expiration of an IPaaS contract. Our IPaaS partner offered to redefine the agreement around an AI Explorer go-to-market partnership, which we rejected. We believe the current channel partner relationships we are considering will generate significantly greater value than what we were offered. Excluding the one-string practice and IPaaS contract, our GSBT segment was up over 4%. Our Oracle solution segment was down as expected. Although activity continues to be solid, Extended client decision-making has continued to make the revenue replacement of a large post-go-live engagement at the end of last year take longer than we planned. This adversely impacted the second quarter and the third quarter, which was our peak or prior year Q3 comparison, and will continue to impact us into the fourth quarter. The result of this large client transition and our continued development of AI Accelerator Our GenAI-assisted technology implementation platform that allows us to deliver technology engagements more efficiently led to our decision to more aggressively reduce our headcount to realize the expected GenAI productivity benefits and align with current requirements. Our SAP solution segment was up during the quarter as implementation revenues resulting from our increased software sales activity at the end of the quarter continued to ramp up. although software sales in the quarter were lower than expected. We expect to make this back up with increased activity in the fourth quarter. Our new platform and implementation capabilities allow us to sell 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 excellence initiatives. We continue to see a GenTech transformation opportunities to emerge in many of our engagements as the need for GenAI capability and relevance continues to increase. These engagements also provide opportunities to serve clients strategically and more broadly. These capabilities should further expand through the new strategic alliances which I said we expect to launch in the near future. That provides us with the increased opportunities to sell our unique capabilities in the upcoming year. On the executive advisory front, we continue to invest in our growing executive and vendor intelligence program. We launched the GenAI premium program. We have integrated our GenAI content into all of our executive programs, and we also expanded our e-procurement intelligence capabilities with the acquisition of Spend Matters. On the balance sheet side, our ability to generate strong cash flow from operation has allowed us to maintain our dividend, and today we are announcing a $40 million Dutch tender offer to acquire approximately 8% of the company's common stock. This tender offer should be strongly accretive, and on a cash basis, the reduction of the dividend payment due to the buyback is expected to offset a meaningful portion of the net of tax interest expense that we expect to incur. 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 conditions following Rob's comments. Rob?