Resources Connection, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Resources Connection, Inc. conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. At this time, I would like to remind everyone that management will be commenting on results for the first quarter ended August 24, 2024. They will also refer to certain non-financial measures, An explanation and reconciliation of these measures to the most comparable GAAP financial measures are included in the press release issued today. Today's press release can be viewed in the Investors Related section of RGP's website and filed today with the SEC. Also during this call, management may make forward-looking statements regarding plans, initiatives, and strategies and the anticipated financial performance of the company. Such statements are predictions and actual events or results may differ materially. Please see the risk factors section in RGP's report on Form 10-K for the year ended May 25, 2024, for a discussion of risk, uncertainties, and other factors that may cause the company's business, results of operations, and financial condition to differ materially from what is expressed or implied by forward-looking statements made during this call. I'll now turn the call over to RGP CEO, Kate Duchesne.

Thank you, Operator. Good afternoon, everyone, and thank you for joining. Bidresh Patel, our Chief Operating Officer, and Jen Rue, our Chief Financial Officer, are with me today to discuss Q1 results, operating updates and trends, and exciting strategic initiatives. I'll focus on what we have accomplished in Q1 to evolve our operating model and brand architecture to provide greater transparency and clarity regarding our capabilities to unlock growth and cross-sell across our enterprise. While the past 12 months have been a challenging operating environment in professional services, we've embraced the opportunity to create a stronger platform for the future, broaden our addressable market, deepen our client relationships, and improve efficiency. We made two significant moves in Q1. First, we evolved our operating model to align strategy and execution with accountable business segments driving performance. Second, we rebuilt our brand architecture and positioning to clearly articulate our new operating model and the competitive advantage we bring to the marketplace. We launched our new brand positioning today. We will post a new investor presentation later this week available at www.rgp.com. This digital asset lays out our refreshed brand architecture and capabilities, what differentiates our brands, and the opportunities ahead. We are a global professional services firm bringing solutions to clients in three ways, on-demand talent, consulting, and outsource services. Via our on-demand, veracity, and county service brands, and all under the RGP umbrella. Jen will cover our new segment reporting in her remarks. Reviewing these service brands in more detail. On-demand by RGP comprises our high-value talent solutions that enable our clients to solve problems quickly and confidently by filling skill set gaps and bandwidth needs. We do not deploy with a pyramid model using inexperienced talent. Delivering with seasoned and senior talent creates faster impact for clients. Our on-demand consultants are experts who execute, with 51% having big four, big consulting, or big law experience, and many holding multiple certifications with top designations. As part of our total technology transformation, we invested in new AI-powered talent acquisition and management software that drives faster speed to market and close. We are beginning to see the fruits of this investment as we can scale faster with access to industry expertise across finance and accounting, risk assurance, project and change management. In this business, we generate strong margins with excellent client retention. We hired a new leader for this segment in June who is driving enhanced execution and sales focus. Veracity by RGP is our next generation consulting business, driving digital and functional transformation across people, processes, and technology. Veracity operates with a bench model for salary delivery leaders, and can scale by drawing on talent within our on-demand business. This approach also provides us the opportunity to manage a delivery cost structure for the benefit of our clients and our GP. Throughout the life cycle of a transformation project, skill set needs change, and the combination of bench and agile talent capability differentiates this delivery model from the competition. The combination of consulting and on-demand also allows us to engage with the client at the beginning of the project lifecycle. Veracity has strategic partnerships with ServiceNow, SAP, Oracle, Workday, Blackline, among others, and brings frameworks and methodologies to transformation work for functional leaders in finance and accounting, tax, risk and compliance, supply chain, customer experience, employee experience, and information technology. County by RGP is our outsource services business for accounting, HR, and equity administration, helping startups, scale-ups, and spin-outs who want to stay laser-focused on growth. We manage clients' back-office operations so they can focus on product and sales. County operates on a modern technology platform anchored by Oracle NetSuite, with expert human capital support provided by fractional CFOs and CHROs. We can get an organization up and running on the technology platform quickly, and we're expanding our addressable market from a startup focus into spin-out and carve-out clients as they look for support post-transaction. Council was recently named the 2024 BPO Partner of the Year by NetSuite, a commendation received over the past six years. Now that I've described our operating model and brand evolution, let me explain the strategy driving these moves. First, the new structure allows us to serve a broader range of needs within our existing and future client set. We are increasingly selling to diversify buyer personas. We're actively working to penetrate new buying centers in our clients to enhance the cross-sell and unlock growth. Second, we've deepened and expanded our capabilities in the consulting space, both organically and inorganically, to enhance our ability to win strategy projects at higher levels within our clients' organizations, which in turn creates opportunities to expand the scope of our work in implementation and execution. The ability to engage in different ways during a multi-year project will allow us to win additional work. Third, we are connecting the dots globally to deliver in-country, near-shore, and offshore talent solutions. We've built global delivery centers in the Philippines and India to provide the right talent at the right price and scale. Clients need flexibility, global connectivity, and exceptional service. We are purpose-built to deliver all three. We're pleased that we're starting to see this diversification strategy succeed And Bidresh will share some specific examples where segments are delivering solutions to our clients together. Having undergone our own technology transformation, operating model evolution, and brand refresh, we are positioned to unlock growth over the long term. I'll now turn it over to Bidresh to share more about our execution focus.

Thank you, Kate, and good afternoon, everyone. I'm thrilled about the promise of our new structure, brand positioning, and today's launch, all of which support the strategic direction we shared during our last call. As a challenger brand, we're now better positioned to meet our clients' needs based on the preferred way of engaging with us throughout their transformational and operational journeys without facing internal organizational barriers. This flexibility allows us to deliver our on-demand talent, consulting, and outsource services offerings, whether individually or in combination seamlessly. This past quarter, our focus has been on leadership integration and reinforcing our full range of service offerings with our sales teams with an emphasis on cross-selling. While the macroeconomic environment remains uncertain, we are starting to hit stride in executing our cross-sell strategy. We're empowering our sales organization to fully understand the breadth of our services across all segments of the business and leverage our existing client relationships to expand into new buying centers. These training efforts also include an even sharper focus on sales pipeline management and a robust account planning process jointly carried out by our sales and consulting practice leaders. I'm pleased to share that our clients are proving to be quite receptive to our new approach. They're excited about our ability to deliver tailored solutions, as Kate mentioned, all in ways that meet their specific needs and our ability to deliver them in multiple engagement models. Following the strategic shifts we've made over the last few months, we're seeing a significant quarter-over-quarter increase in our growth pipeline and project size increase in our cross-sell opportunities. This growth is no coincidence, but rather largely driven by a stronger focus on go-to-market execution, tight alignment between our segments, and an increased emphasis on cross-border sales within our multinational client base. With a solid global infrastructure in place, we're also unifying our offshore delivery center which we now call global delivery centers in India and the Philippines to better serve our clients across the organization. Our business segments are rapidly evolving. Our on-demand talent segment is increasingly relevant in the professional staffing space, though it faces intense competition and rate pressures in the current environment. Despite this, our clients continue to utilize our experts at scale, extending beyond traditional finance and accounting roles. As the macroeconomic conditions improve, we expect client demand for outside expert talent to further expand, and we're fully prepared to respond. Our newly formed consulting segment positions us higher up the professional services value chain, enabling us to play a key role in transformation strategy and execution initiatives. A dedicated consulting business positions us to engage in earlier stage discussions with clients, particularly around business and digital transformation, which creates opportunity for us to enlarge pieces of work across the enterprise. The acquisition of ReferencePoint and its deep advisory capabilities are further strengthening our position with financial services clients even those we've served for over 10 years. Our outsource services segment is expanding its client base, especially among venture-backed AI startups, while also exploring cross-selling opportunities within our existing client base, including carve-outs, spin-outs, and scale-ups. Our Europe and APAC segment's performance is getting better positioned for future growth. We were impacted by typical summer seasonality combined with elongated client decision-making cycles and contract negotiations in Europe while APAC continues to be resilient and deliver strong results. We remain cautiously optimistic for the remainder of the fiscal year given our client environments remain trivial as they progress with their internal business restructuring. Most importantly, all segments are proving highly relevant in differentiating us from our traditional staffing and consulting firms, allowing us to secure larger engagements than we have in the past few years, in large part driven by cross-selling activities. Some examples include, for a large healthcare delivery system, we want a sizable ERP implementation initiative to partner with the client and their systems integrator in providing back-filled and filling functional roles. This was a collaborative effort between our on-demand and veracity brands. Second, I shared on our last call that we were in final discussions with the portfolio company of a private equity firm to support a significant carve-out project. Not only was Kelsey awarded the multi-million dollar project to provide comprehensive outsourcing services, but the same client is now leveraging our on-demand brand to engage additional consultants to support the Carbound. As another example, for a global leader in the commercial real estate services and investment space, and a large medical devices and patient care services company, we're engaging our teams across segments and geographies to support their transformational needs. This was the result of a collaborative effort across our brands and geographies driven by the product of the work we've done to remove internal barriers and prioritize seamless client service. Another excellent example of successful cross-selling in action. Last, in terms of our technology and digital transformation efforts, we're on track to deliver our new financial system for North America later this calendar year. Additionally, we've initiated the planning phase for migrating our international and other business units onto the new platform. I'll now hand the call over to Jen.