The Hackett Group, Inc.

Good evening and welcome to the Hackett Group third quarter earnings conference call. Your line has 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.

Thank you, operator. 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, Robert 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.thehackettgroup.com. We will also place any additional financial or statistical data discussed on this call that is not contained in the release on the Investor Relations page of 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 and are not a guarantee of future performance. They involve risks, on certainties 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 that are contained in our SEC filings. At this point, I would like to turn it over to Ted.

Thank you, Rob, and welcome, everyone. Thank you for joining us to discuss the Hackett Group's third quarter 2026 results, and more importantly, the continued progress of our AI transition strategy. As we normally do, I'll open the call by providing an overview of comments on the quarter. We'll then turn it over to Rob to comment on detailed operating results, cash flow, and guidance. We will then review our market strategy-related comments, after which we will open it up to Q&A. We continue to build momentum as the market increasingly recognizes that meaningful ROI from AI transformation requires more than technology. It requires deep transformation expertise in IP to reimagine critical processes along with AI benchmarks to accurately quantify the value opportunity. These capabilities are closely aligned with Hackett's globally recognized transformation expertise in proprietary benchmarking and process intelligence. At the same time, The expanding use of our AI platforms, XT and AIX, across our primary enterprise transformation and software implementation offerings is beginning to improve sales and delivery productivity. As these benefits scale across our client base, we expect them to drive increasing operating leverage and margin expansion, strengthening our confidence in our growth and profitability prospects for 2027. Over the past two years, we have systematically built an integrated portfolio of proprietary AI-enabled platforms. Hackett is an expert and ROI-led AI-enabled enterprise transformation company. With our platforms and domain expertise connected through the Hackett intelligence layer. This layer combines our proprietary domain-specific Hackett solution language model with our globally recognized benchmarks with transformation and software implementation intelligence to uniquely turn generic large language model inference into actionable client-specific solutions guided by measurable value and ROI. Clearly our moat. XT and AIX are central to our transition. XT applies Hackett's benchmarking intelligence, best practices, capability maturity models, and transformation expertise to identify performance gaps, quantify value, reimagine future state processes and operating models, and develop decision-ready transformation solutions. AI extends our implementation expertise and embedded intelligence to improve software implementation, speed, quality, productivity, as well as value realization. Together, these platforms will allow us to bring Hackett-specific AI-enabled acceleration and enhanced value realization to more than 90% of our current engagements. Last quarter, we indicated that the third quarter would be our inflection point for revenue, margin, and profitability growth. For the third quarter, we reported net revenues of $68.9 million and adjusted diluted earnings per share of $0.39, which were at the midpoint and relative to EPS at the high end of our previously provided guidance. Revenue grew sequentially despite fewer available days from the second to the third quarter and adjusted EPS was both sequentially up and also up on a year-over-year basis. Adjusted gross margins improved 80 basis points sequentially from the second quarter and as compared to last year, 230 basis points. We also expect Q4 adjusted growth margins to significantly improve on both a sequential and year-over-year basis. We believe this revenue margin and profitability progression provides early evidence of the benefits we are beginning to capture from our platform-enabled delivery model, the related resource alignment and the other related productivity actions that we've taken. Client interest in AI adoption and broader digital transformation remains strong, but clients are increasingly demanded trusted value and ROI that support the targeted initiatives. The key difference is they are transformation-led, which clearly provides a clear indication that clients have moved from the AI-first tech approach. These engagements require the comprehensive reimagination of critical business processes and the related operating model changes. Also rely on the modernization of enterprise application environments and data foundations required to support meaningful AI enterprise transformation solutions. Importantly, clients are generally pursuing what we describe as extended AI initiatives. These are AI opportunities that emerge or extend from broader enterprise transformation and application engagements, rather than relying exclusively on standalone technology-first AI programs. This pattern plays directly to our strengths. It allows us to build on our trusted client relationships, address larger transformation opportunities, and incorporate AI scope into nearly all of our new engagements. We are encouraged by three developments. First, our XT and AIX platforms are beginning to improve the outcome and economics of how we sell and deliver our work by increasing productivity, strengthening client value propositions, and supporting broader solution scope. Second, clients are moving from AI experimentation toward measurable enterprise value realization, which aligns directly with our enterprise transformation software implementation, benchmarking, and process-led expertise. Third, the progression in our gross margins and our fourth quarter outlook increasingly reflect the operating and financial benefits we expected from resource alignment, delivery model transition, and platform adoption. Beyond our enterprise transformation and enterprise application pursuits, we continue to help organizations architect and execute their agentic enterprise architecture plans that support their AI centers of excellence, leveraging our AI Explorer and ZBrain platforms. We also continue to discuss expanded collaboration with all three of our active channel partners, which we expect to evolve into more meaningful, structured, go-to-market initiatives. On the balance sheet side, we expect to continue generating strong cash flow from operations, as Rob will point out when he speaks to our fourth quarter guidance, providing flexibility to support our dividend, repurchase shares, reduce debt, and continue to invest in the development of our strategic AI platforms. With that, let me ask Rob to provide additional detail on our operating results, cash flow, and fourth quarter outlook. I will return with strategic and market commentary following Rob's remarks. Rob?