Resources Connection Q3 Revenue Falls 17%, Net Loss Narrows to $9.5M
Resources Connection’s revenue fell to $107.9 million in Q3 fiscal 2026 from $129.4 million a year earlier, while net loss narrowed to $9.5 million (8.8% margin) versus $44.1 million last year. Gross margin rose to 35.7% and SG&A costs fell by $5.3 million as the firm plans to sell its Sitrick crisis communications unit.
1. Q3 Financial Overview
In the third quarter of fiscal 2026, Resources Connection generated $107.9 million in revenue, down 16.6% year-over-year from $129.4 million. The company narrowed its net loss to $9.5 million (8.8% margin) compared with a $44.1 million loss (34.0% margin) in Q3 of fiscal 2025.
2. Margin and Expense Improvements
Gross margin improved to 35.7% from 35.1% last year, driven by a better pay-bill ratio, fewer holiday costs, and lower healthcare expenses. GAAP SG&A expenses declined by $5.3 million to $45.8 million, reflecting cuts in compensation, technology transformation costs, consulting fees and other administrative expenses.
3. Segment Performance
On-Demand Talent revenue dropped to $40.9 million from $47.1 million, with billable hours falling 17.1% offset by a 4.5% increase in average bill rates. Consulting segment revenue was $36.9 million, reflecting focused investments and pricing discipline amid shifting client demand.
4. Business Portfolio Streamlining
Management entered an agreement to divest its Sitrick crisis communications business as part of a strategy to align cost structure and concentrate resources on higher-growth segments. The company remains focused on its four priorities: cost alignment, segment refocus, consulting expansion and operational streamlining.