Resources Connection Inc (NASDAQ:RGP) stock fell 1.11% (As on October 9, 11:22:32 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the first quarter of FY 26. Despite a net loss of $2.4 million, the company showed improvement from the previous year’s net loss of $5.7 million. The company achieved a significant improvement in its gross margin, which rose to 39.5% from 36.5% in the previous year. This improvement was attributed to a better pay/bill ratio, higher consultant utilization, and reduced costs, including healthcare and holiday pay expenses. The company’s adjusted EBITDA increased to $3.1 million, with an adjusted EBITDA margin of 2.5%, compared to $2.3 million and 1.7% in the previous year. Cash dividends declared of $0.07 per share. The company is engaging with clients on more consulting opportunities which have higher bill rates, larger deal size and often create more extension and cross selling.

Moreover, the On-Demand Talent segment reported revenue of $44.4 million, down from $52.5 million in the previous year, due to lower demand for interim support. The Consulting segment saw revenue decrease to $43.6 million from $55.0 million, primarily due to a 28.4% drop in billable hours. However, the Europe & Asia Pacific segment experienced a revenue increase of 10.6% to $19.9 million, driven by higher billable hours and increased average bill rates. Revenue in the Outsourced Services segment increased by $0.5 million or 5.3% compared to the prior year quarter, to $10.0 million. On a same-day constant currency basis, revenue increased 3.7% in the first quarter of fiscal 2025. The increase was primarily due to an increase in billable hours of 2.1%.

RGP in the first quarter of FY 26 has reported the adjusted loss per share of $0.07, beating the analysts’ estimates for the adjusted loss per share of $0.23. The company had reported the adjusted revenue of $120.2 million in the first quarter of FY 26, beating the analysts’ estimates for revenue of $119.95 million. In the first quarter of fiscal 2026, Resources Connection Inc faced a 13.9% decline in same-day constant currency revenue compared to the prior year. This was primarily due to a decrease in billable hours by 14.3%, as clients delayed transformation projects amid global economic uncertainty. However, the company managed to increase its average bill rates by 2.2%, reflecting its pricing discipline and focus on higher-value engagements.