Resources Connection Inc (NASDAQ:RGP) stock fell 12.73% (As on April 3, 12:21:20 AM UTC-4, Source: Google Finance) after the company posted mixed result for the third quarter of FY25. The demand environment remains choppy and has not shown consistent signs of improving. Clients continued to be cautious and selective about moving forward with transformation projects or filling professional interim roles. In addition, the mid-week timing of both the Christmas and New Year’s holidays caused a more significant impact on the third quarter revenue compared to the prior fiscal quarter.  Additionally, average bill rates continue to reflect the global revenue mix, which currently includes a higher proportion of revenue generated in Asia Pacific, where bill rates are significantly lower than in the United States (“U.S.”) and Europe. Gross margin in the third quarter of fiscal 2025 was 35.1% compared to 37.0% in the third quarter of fiscal 2024. The decline was primarily due to additional holiday pay on Thanksgiving in the third quarter of fiscal 2025.  Net loss for the third quarter of fiscal 2025 was $44.1 million (net loss margin of 34.0%), compared to net income of $2.6 million (net income margin of 1.7%) in the prior year quarter, a difference of $46.6 million, which was primarily due to the non-cash goodwill impairment charge in the third quarter of fiscal 2025. The Company delivered an Adjusted EBITDA margin of 1.3% in the third quarter of fiscal 2025 compared to 7.1% in the prior year quarter

Moreover, revenue in the On-Demand Talent segment declined by $17.1 million or 26.6%, to $47.1 million in the third quarter of fiscal 2025 compared to $64.2 million in the third quarter of fiscal 2024. Revenue in the Consulting segment declined by $3.2 million or 5.8%, to $52.6 million in the third quarter of fiscal 2025 compared to $55.8 million in the third quarter of fiscal 2024. Revenue in the Outsourced services segment remained at $9.4 million consistent with the prior year quarter.

RGP in the third quarter of FY25 has reported the adjusted loss per share of 8 cents, beating the analysts’ estimates for the adjusted loss per share of 12 cents, according to analysts polled by FactSet. The company had reported the adjusted revenue decline of 14.5 percent to $129.4 million in the third quarter of FY25, missing the analysts’ estimates for revenue of $130 million.