HACKETT GROUP, INC. (HCKT)
SIC breadcrumb: Services > SIC Major Group 87 > SIC 8742 Services-Management Consulting Services
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1057379. Latest filing source: 0001193125-26-082863.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 305,626,000 | USD | 2025 | 2026-02-27 |
| Net income | 12,943,000 | USD | 2025 | 2026-02-27 |
| Assets | 206,447,000 | USD | 2025 | 2026-02-27 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001057379.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 279,787,000 | 276,599,000 | 285,887,000 | 282,472,000 | 278,809,000 | 293,742,000 | 296,590,000 | 313,855,000 | 305,626,000 | |
| Net income | 9,711,000 | 21,541,000 | 27,354,000 | 23,909,000 | 23,277,000 | 41,545,000 | 40,802,000 | 34,151,000 | 29,630,000 | 12,943,000 |
| Operating income | 12,586,000 | 33,517,000 | 28,704,000 | 33,574,000 | 31,338,000 | 46,476,000 | 55,248,000 | 49,262,000 | 44,588,000 | 23,534,000 |
| Diluted EPS | 0.33 | 0.66 | 0.85 | 0.74 | 0.72 | 1.26 | 1.28 | 1.24 | 1.05 | 0.46 |
| Operating cash flow | 16,012,000 | 32,889,000 | 26,509,000 | 32,411,000 | 42,361,000 | 46,353,000 | 58,904,000 | 37,401,000 | 47,729,000 | 40,304,000 |
| Capital expenditures | 3,097,000 | 3,179,000 | 6,517,000 | 9,637,000 | 4,568,000 | 3,242,000 | 4,656,000 | 4,101,000 | 4,079,000 | 7,867,000 |
| Dividends paid | 7,163,000 | 8,670,000 | 10,048,000 | 11,196,000 | 12,885,000 | 10,437,000 | 11,972,000 | 12,112,000 | 12,903,000 | |
| Share buybacks | 13,702,000 | 34,083,000 | 15,716,000 | 4,786,000 | 7,807,000 | 13,039,000 | 116,569,000 | 734,000 | 6,422,000 | 69,149,000 |
| Assets | 149,598,000 | 159,299,000 | 185,231,000 | 180,752,000 | 193,735,000 | 207,541,000 | 184,993,000 | 181,428,000 | 193,309,000 | 206,447,000 |
| Liabilities | 59,810,000 | 73,030,000 | 77,956,000 | 57,162,000 | 56,121,000 | 63,688,000 | 126,715,000 | 91,348,000 | 77,735,000 | 138,347,000 |
| Stockholders' equity | 89,788,000 | 86,269,000 | 107,275,000 | 123,590,000 | 137,614,000 | 143,853,000 | 58,278,000 | 90,080,000 | 115,574,000 | 68,100,000 |
| Cash and cash equivalents | 14,608,000 | 19,710,000 | 17,512,000 | 13,808,000 | 25,954,000 | 45,794,000 | 30,255,000 | 20,957,000 | 16,366,000 | 18,197,000 |
| Free cash flow | 12,915,000 | 29,710,000 | 19,992,000 | 22,774,000 | 37,793,000 | 43,111,000 | 54,248,000 | 33,300,000 | 43,650,000 | 32,437,000 |
Ratios
| Metric | 2015 | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 7.70% | 9.89% | 8.36% | 8.24% | 14.90% | 13.89% | 11.51% | 9.44% | 4.23% | |
| Operating margin | 11.98% | 10.38% | 11.74% | 11.09% | 16.67% | 18.81% | 16.61% | 14.21% | 7.70% | |
| Return on equity | 10.82% | 24.97% | 25.50% | 19.35% | 16.91% | 28.88% | 70.01% | 37.91% | 25.64% | 19.01% |
| Return on assets | 6.49% | 13.52% | 14.77% | 13.23% | 12.01% | 20.02% | 22.06% | 18.82% | 15.33% | 6.27% |
| Liabilities / equity | 0.67 | 0.85 | 0.73 | 0.46 | 0.41 | 0.44 | 2.17 | 1.01 | 0.67 | 2.03 |
| Current ratio | 1.40 | 1.23 | 1.46 | 1.65 | 1.80 | 1.86 | 1.36 | 1.51 | 1.44 | 1.72 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001057379.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-07-01 | 0.32 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.32 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.30 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | 8,161,000 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 77,102,000 | 0.32 | reported discrete quarter | |
| 2023-Q3 | 2023-06-30 | 8,720,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-29 | 75,856,000 | 0.34 | reported discrete quarter | |
| 2023-Q4 | 2023-12-29 | 72,403,000 | 7,850,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-29 | 77,187,000 | 8,731,000 | 0.32 | reported discrete quarter |
| 2024-Q2 | 2024-03-29 | 8,731,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-28 | 77,656,000 | 0.31 | reported discrete quarter | |
| 2024-Q3 | 2024-06-28 | 8,748,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-27 | 79,777,000 | 0.31 | reported discrete quarter | |
| 2024-Q4 | 2024-12-27 | 79,235,000 | 3,564,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-28 | 77,865,000 | 3,143,000 | 0.11 | reported discrete quarter |
| 2025-Q2 | 2025-03-28 | 3,143,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-27 | 78,899,000 | 0.06 | reported discrete quarter | |
| 2025-Q3 | 2025-06-27 | 1,661,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-26 | 73,111,000 | 0.09 | reported discrete quarter | |
| 2025-Q4 | 2025-12-26 | 75,751,000 | 5,592,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-27 | 68,797,000 | 4,281,000 | 0.17 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001193125-26-209251.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend the forward-looking statements to be covered by the safe harbor provisions for forward-looking statements in these sections. All statements regarding our expected financial position and operating results, our business strategy, our financing plans and forecasted demographic and economic trends relating to our industry are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as “may,” “will,” “anticipate,” “estimate,” “expect,” or “intend” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. We cannot promise you that our expectations reflected in such forward-looking statements will turn out to be correct. Factors that could impact such forward-looking statements include, among others, changes in worldwide and U.S. economic conditions that impact business confidence and the demand for our products and services, our ability to transition our capabilities to support generative artificial intelligence ("Gen AI")-related consulting services and solutions, our ability to effectively integrate acquisitions, including the LeewayHertz and Spend Matters acquisitions, into our operations, our ability to manage joint ventures and successfully cooperate with our joint venture partners, our ability to retain existing business, our ability to attract additional business, our ability to effectively market and sell our product offerings and other services, the timing of projects and the potential for contract cancellation by our customers, changes in expectations regarding the business consulting and information technology industries, our ability to attract and retain skilled employees, possible changes in collections of accounts receivable due to the bankruptcy or financial difficulties of our customers, risks of competition, price and margin trends, foreign currency fluctuations, the impact of the geopolitical conflict involving Russia and Ukraine and in the Middle East on our business and changes in general economic conditions, interest rates, tariffs and trade barriers and our ability to obtain additional debt financing if needed.
An additional description of our risk factors is described in Part I – Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 26, 2025.
OVERVIEW
The following Management's Discussion and Analysis ("MD&A") is intended to help the reader understand the results of operations and financial condition of Hackett. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q.
Hackett is a global IP platform-based Gen AI strategic consulting and executive advisory digital transformation firm. The Hackett Group provides dedicated expertise in Gen AI enabled enterprise transformation services across front, mid and back office areas, including its highly recognized Oracle, SAP, OneStream and Coupa implementation offerings.
In early 2024, we launched our AI assessment platform, AI XPLR which helps clients identify, evaluate and design Gen AI enablement opportunities. Using AI XPLR, our experienced professionals guide organizations to harness the power of Gen AI solutions designed to digitally transform their operations to achieve quantifiable, breakthrough results, allowing us to be key architects of our clients' Gen AI journey.
We believe Gen AI will fundamentally change the way companies operate as well as the way consulting services are sold and delivered. We believe the Gen AI platform capabilities we have developed in AI XPLR which were expanded with ZBrain, which we acquired as part of the LeewayHertz acquisition, is highly differentiating and we expect will enable us to effectively compete in this emerging and important space.
The Hackett Group has completed over 28,400 benchmarking and performance studies with major organizations. These studies are executed utilizing our Quantum Leap platform which drives our Digital Transformation Platform (“DTP” or “Hackett DTP”). This includes the firm's benchmarking metrics, best practices repository, and best practice configuration and process flow accelerators, which enables our clients and partners to achieve digital world-class performance. We consider this, along with our
20
recent innovations, our core Hackett Intellectual Property ("IP") which allows us to identify, design and evaluate transformation opportunities to be proprietary and key components of our Hackett Solutioning IP.
Our transformation expertise is grounded in best practices insights from benchmarking the world’s leading businesses – including 97% of the Dow Jones Industrials, 90% of the Fortune 100, 68% of the DAX 40 and 53% of the FTSE 100, which inform and are delivered by our platforms.
Impact of Macroeconomic Conditions on Our Business
The level of revenue we achieve is based on our ability to deliver market leading services and solutions and to deploy skilled teams of professionals quickly. Our results of operations are affected by economic conditions, including macroeconomic conditions and levels of business confidence. Any deterioration in the current macroeconomic environment or economic downturn as a result of weak or uncertain economic conditions due to inflation, high interest rates, tariffs, national or geopolitical events or other factors impacting economic activity or business confidence could adversely affect our clients' financial condition or outlook which may reduce the clients' demand for our services.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, our results of operations (in thousands and unaudited):
Quarter Ended
March 27,
March 28,
2026
2025
Revenue:
Revenue before reimbursements
$
67,843
$
76,231
Reimbursements
954
1,634
Total revenue
68,797
77,865
Costs and expenses:
Cost of service:
Personnel costs before reimbursable expenses (includes $589 and $4,928 of non-cash stock based compensation reversal and expense in the three months ended March 27, 2026 and March 28, 2025, respectively)
38,505
48,380
Reimbursable expenses
954
1,634
Total cost of service
39,459
50,014
Selling, general and administrative costs (includes $2,068 and $4,744 of non-cash stock based compensation expense in the three months ended March 27, 2026 and March 28, 2025, respectively)
18,446
23,448
Restructuring costs
1,956
—
Total costs and operating expenses
59,861
73,462
Income from operations
8,936
4,403
Other expense, net:
Interest expense, net
(1,008
)
(202
)
Income before income taxes
7,928
4,201
Income tax expense
3,647
1,058
Net income
$
4,281
$
3,143
Diluted net income per common share
$
0.17
$
0.11
Revenue. We are a global Company with operations in our primary markets located in the United States and Western Europe. Our revenue is denominated in multiple currencies, primarily the U.S. Dollar, British Pound and Euro, and as a result is affected by currency exchange rate fluctuations. The impact of currency fluctuations did not have a significant impact on comparisons between the three months ended March 27, 2026 and the three months ended March 28, 2025. In this MD&A, we discuss revenue based on geographical location of engagement team personnel.
Our Company total revenue was $68.8 million during the first three months of 2026 as compared to $77.9 million in the same period in 2025. In the first three months of 2026, one customer accounted for 4% of our Company total revenue. In the first three months of 2025, one customer accounted for 9% of our Company total revenue.
21
Segment revenue. The Company has three reportable segments: Global Strategy & Business Transformation (Global S&BT), Oracle Solutions and SAP Solutions. Global S&BT includes S&BT Gen AI and Business Transformation Consulting, Benchmarking, Business Advisory Services, Intellectual Property as-a-Service (IPASS) and OneStream offerings. Oracle Solutions and SAP Solutions support the two fundamentally distinct ERP systems: Oracle and SAP.
The following table sets forth total revenue by operating segment, which includes reimbursable expenses related to project travel-related expenses passed through to a client with no associated operating margin (in thousands):
Quarter Ended
March 27,
March 28,
2026
2025
Global S&BT
$
36,775
$
43,357
Oracle Solutions
15,685
21,085
SAP Solutions
16,337
13,423
Total revenue
$
68,797
$
77,865
Global S&BT total revenue was $36.8 million and $43.4 million during the first three months of 2026 and 2025, respectively. Although we continued to see an increasing number of clients utilizing our Gen AI delivery platforms, that was more than offset by elongated client decision cycles that persisted throughout the quarter as clients are evaluating their Gen AI return on investments.
Oracle Solutions total revenue was $15.7 million and $21.1 million during the first three months of 2026 and 2025, respectively. Oracle Solutions has stabilized from the completion of a large client engagement which primarily explains the decreases on a year over year comparison.
SAP Solutions total revenue was $16.3 million and $13.4 million during the first three months of 2026 and 2025, respectively. The increase in revenue during the first three months of 2026, as compared to the same periods in 2025, was primarily driven by implementation services that correspond to the volume of software sales from the last several quarters that were coupled with significant implementation fees. This was primarily due to the increased sales investments we have made with SAP and SAP’s success driving S4 HANA Cloud migrations.
Reimbursements as a percentage of Company total revenue were 1% and 2% during the first three months of 2026 and 2025, respectively. Reimbursements are project travel-related expenses passed through to a client with no associated operating margin.
Cost of Service. Cost of service consists of personnel costs before reimbursable expenses, which includes salaries, benefits and incentive compensation for consultants and subcontractor fees, acquisition-related non-cash stock based compensation expense and non-cash stock based compensation expense, and reimbursable expenses which are travel and other expenses passed through to a client and are associated with projects.
Personnel costs before reimbursable expenses decreased 20%, to $38.5 million for the first three months of 2026, as compared to $48.4 million in the same period of 2025. The decrease in the first quarter of 2026 was primarily related to the decrease of acquisition related non-cash stock based compensation expense relating to the LeewayHertz acquisition and to the non-cash stock based compensation expense relating to the stock price award program, headcount reductions from the leverage of our Gen AI delivery platforms and lower bonus accruals commensurate with performance. Personnel costs as a percentage of total Company total revenue were 56% and 62% during the first three months of 2026 and 2025, respectively.
Non-cash stock based compensation reversal of expense, included in personnel costs before reimbursable expenses, was $0.6 million in the first three months of 2026 and non-cash stock
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Hackett. MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to our consolidated financial statements included in this Annual Report on Form 10-K. We have omitted discussion of fiscal 2023 items and year-to-year comparisons between fiscal years 2024 and 2023 where it would be redundant with the discussion previously included in Part II, Item 7 (MD&A) of the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2025. Hackett is a global IP platform-based Gen AI strategic consulting and executive advisory digital transformation firm. The Hackett Group provides dedicated expertise in Gen AI enabled enterprise transformation services across front, mid and back office areas, including its highly recognized Oracle, SAP, OneStream and eProcurement implementation offerings. In early 2024, we launched our AI assessment platform, AI XPLR which helps clients identify, evaluate and design Gen AI enablement opportunities. Using AI XPLR, our experienced professionals guide organizations to harness the power of Gen AI solutions designed to digitally transform their operations to achieve quantifiable, breakthrough results, allowing us to be key architects of our clients' Gen AI journey. We believe Gen AI will fundamentally change the way companies operate as well as the way consulting services are sold and delivered. We believe the Gen AI platform capabilities we have developed in AI XPLR which were expanded with ZBrain, which we acquired as part of the LeewayHertz acquisition, is highly differentiating and we expect will enable us to effectively compete in this emerging and important space. The Hackett Group has completed over 28,400 benchmarking and performance studies with major organizations. These studies are executed utilizing our Quantum Leap platform which drives our DTP. This includes the firm's benchmarking metrics, best practices repository, and best practice configuration and process flow accelerators, which enables our clients and partners to achieve digital world-class performance. Our transformation expertise is grounded in best practices insights from benchmarking the world’s leading businesses – including 97% of the Dow Jones Industrials, 90% of the Fortune 100, 68% of the DAX 40 and 53% of the FTSE 100, which inform and are delivered utilizing our platforms. Impact of Macroeconomic Conditions on Our Business The level of revenue we achieve is based on our ability to deliver market leading services and solutions and to deploy skilled teams of professionals quickly. Our results of operations are affected by economic conditions, including macroeconomic conditions and levels of business confidence. Any deterioration in the current macroeconomic environment or economic downturn as a result of weak or uncertain economic conditions due to inflation, high interest rates, national or geopolitical events or other factors impacting economic activity or business confidence could adversely affect our clients' financial condition or outlook which may reduce the clients' demand for our services. Critical Accounting Policies and Estimates In the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of results of operations and financial position in conformity with generally accepted accounting principles in the United States (“GAAP”). Actual results could differ from those estimates under different assumptions and conditions. We believe the following discussion addresses our most critical accounting policies that have had or are reasonably likely to have a material impact on our financial condition or results of operations. These policies require management to exercise judgment on issues that are often difficult, subjective and complex due to the necessity of estimating the effect of matters that are inherently uncertain. Revenue Recognition Determining revenue recognition requires management to exercise judgment on the interpretation of service contracts which may include one or multiple performance obligations. The judgments that management must make include determining whether the control of the goods and services provided are transferred to our customers at a point in time or over the course of the service period utilizing a proportionate performance approach. In fixed-fee billing arrangements, which would also include contracts with capped fees, we set the fees based on our estimates of the costs and timing for completing the engagements. We generally recognize revenue under fixed-fee or capped fee arrangements 19 using a proportionate performance approach, which is based on work completed to-date as compared to estimates of the total services to be provided under the engagement. Estimates of total engagement revenue and cost of services are monitored regularly during the term of the engagement based on the best available information. If our estimates indicate a potential loss, such loss is recognized in the period in which the loss first becomes probable and reasonably estimable. Allowances for Credit Losses We review accounts receivable to assess our estimates of collectability regularly. When establishing allowances for doubtful accounts, management must base their judgment on the information available at that point in time, which may include historical experiences, current economic trends and client credit worthiness, to determine the likelihood of collectability. Business Combinations For transactions that are considered business combinations, we utilize fair values in determining the carrying values of the purchased assets and assumed liabilities, which are recorded at fair value at acquisition date, and identifiable intangible assets are recorded at fair value. Costs directly related to the business combinations are recorded as expenses as they are incurred. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values become available. A bargain purchase gain on an acquisition occurs when the net of the estimated fair value of the assets acquired and liabilities assumed exceeds the consideration paid. Goodwill For acquisitions accounted for as a business combination, goodwill represents the excess of the cost over the fair value of the net assets acquired. The Company has organized its operating and internal reporting structure to align with its primary market solutions. In accordance with ASC 280, management made the determination to present three operating segments, three reportable segments and three reporting units as follows: (1) Global S&BT, (2) Oracle Solutions, and (3) SAP Solutions. A reporting unit is an operating segment or one level below an operating segment to which goodwill is assigned. The goodwill has been allocated to the reporting unit based on the reporting unit's relative fair value. Goodwill is tested at least annually for impairment at the reporting unit level utilizing the market approach. In assessing the recoverability of goodwill and intangible assets, we utilize the market approach and makes estimates based on assumptions regarding various factors to determine if impairment tests are met. The market approach utilizes valuation multiples based on operating data from publicly traded companies within the same industry. Multiples derived from guideline companies provide an indication of how much a market participant would be willing to pay for a company. These multiples are then applied to the our reporting units to arrive at an indication of value. This approach contains management’s judgment, using appropriate and customary assumptions available at the time. We performed our annual impairment test of goodwill in the fourth quarter of fiscal years 2025, 2024 and 2023 and determined that goodwill was not impaired. Stock Based Compensation We recognize compensation expense for awards of equity and liability instruments, which have only a service condition, to employees based on the grant-date fair value of those awards, over the requisite service period, with limited exceptions. In September 2024, a stock price award program was offered to certain leaders. These equity awards were granted with both a market condition (three tranches, each with varying market share price thresholds) and service conditions. We measured these equity awards using the Monte Carlo valuation model to determine the fair value as of the grant date. The Monte Carlo valuation model, using different share price paths, calculated a derived service period which is the median share price path on which the market condition is satisfied for each tranche. The assumptions utilized in the model are as of a point in time and may differ from the actual value of the equity awards. The requisite service period was determined to be service conditions as the service conditions are greater than the derived service period. For each of the three tranches, stock compensation expense is recognized on a straight-line basis over the requisite service period. We elected to account for forfeitures as incurred. If an employee forfeits nonvested shares subsequent to meeting a service condition, the previously recognized expense is not reversed. See Note 10, "Stock Based Compensation," to our consolidated financial statements included in our Annual Report on Form 10-K for additional information. Please refer to Note 1, “Basis of Presentation and General Information,” to our consolidated financial statements included in our Annual Report on Form 10-K for the discussion of all of our critical accounting policies. 20 Results of Operations Our fiscal year generally consists of a 52-week period and periodically consists of a 53-week period as each fiscal year ends on the Friday closest to December 31. Fiscal years 2025 and 2024 ended on December 26, 2025 and December 27, 2024, respectively, each consisted of a 52-week period. References to a year included in this document refer to a fiscal year rather than a calendar year. The following table sets forth, for the periods indicated, our results of operations (in thousands): Year Ended December 26, December 27, 2025 2024 Revenue: Revenue before reimbursements $ 300,846 $ 307,028 Reimbursements 4,780 6,827 Total revenue 305,626 313,855 Costs and operating expenses: Cost of service: Personnel costs before reimbursable expenses (includes $14,600 and $10,491 of stock compensation expense in 2025 and 2024, respectively) 183,681 183,792 Reimbursable expenses 4,780 6,827 Total cost of service 188,461 190,619 Selling, general and administrative costs (includes $16,028 and $9,033 of stock compensation expense in 2025 and 2024, respectively) 90,519 78,546 Legal settlement and related costs — 102 Restructuring costs 3,112 — Total costs and operating expenses 282,092 269,267 Operating income 23,534 44,588 Other expense, net: Interest expense, net (1,716 ) (1,594 ) Income from operations before income tax expense 21,818 42,994 Income tax expense 8,875 13,364 Net income $ 12,943 $ 29,630 Comparison of 2025 to 2024 Overview. For fiscal year 2025, total revenue decreased to $305.6 million, as compared to $313.9 million in 2024, primarily driven by decreased total revenue from our Oracle Solutions segment of $13.0 million, partially offset by increases in our SAP Solutions segment of $6.3 million. In addition, we recognized an incremental $11.1 million of non-cash compensation expense in 2025, as compared to 2024, related to the stock price award program. See Note 10, “Stock Based Compensation,” to our consolidated financial statements included in this Annual Report on Form 10-K for more information. Revenue. We are a global company with operations primarily in the United States and Western Europe. Our revenue is denominated in multiple currencies, primarily the U.S. Dollar, British Pound and Euro, and as a result is affected by currency exchange rate fluctuations. The impact of the currency fluctuation did not have a significant impact on comparisons between 2025 and 2024. Revenue is analyzed based on geographic location of engagement team personnel. In 2025, one customer accounted for 6% of our total revenue and in 2024 one customer accounted for 11% of our total revenue. Segment revenue. We have three reportable segments: Global S&BT, Oracle Solutions and SAP Solutions. Global S&BT includes S&BT Consulting, Benchmarking, Advisory Services, IPASS, Gen AI Consulting and Implementation, OneStream and our eProcurement offerings. Oracle Solutions and SAP Solutions support the two fundamentally distinct ERP systems: Oracle and SAP. 21 The following table sets forth total revenue by reportable operating segment, which includes reimbursable expenses related to project travel-related expenses passed through to a client with no associated operating margin (in thousands): Year Ended December 26, December 27, 2025 2024 Global S&BT $ 169,569 $ 171,096 Oracle Solutions 72,660 85,707 SAP Solutions 63,397 57,052 Total revenue $ 305,626 $ 313,855 Global S&BT total revenue decreased to $169.6 million in 2025, as compared to $171.1 million in 2024. The growth from our Gen AI consulting and implementation offerings in this segment was more than offset by weakness in our OneStream implementation offerings and the non-renewal of a meaningful IPaaS contract during 2025. Oracle Solutions total revenue decreased to $72.7 million in 2025, as compared to $85.7 million in 2024. Although activity continues to be solid, extended client decision making has continued to make the revenue replacement of a large post go-live engagement at the end of last year take longer than we planned. This has adversely impacted this segment throughout 2025. SAP Solutions total revenue increased to $63.4 million in 2025, as compared to $57.1 million in 2024. The increase in revenue during 2025 was primarily due to increased software sales in 2025 and implementation services related to S/4HANA cloud migrations. Reimbursements as a percentage of total revenue were 1.6% in 2025 and 2.2% in 2024. Reimbursements are project travel-related expenses passed through to a client with no associated operating margin. Cost of Service. Cost of service consists of personnel costs before reimbursable expenses, which includes salaries, benefits and incentive compensation for consultants and subcontractor fees, acquisition-related cash and stock compensation costs, non-cash stock compensation expense, and reimbursable expenses which are travel and other expenses passed through to a client and are associated with projects. Personnel costs before reimbursable expenses were $183.7 million in 2025, as compared to $183.8 million in 2024. Personnel costs as a percentage of total Company revenue were 60% in 2025 and 59% in 2024. Non-cash stock-based compensation expense, included in personnel costs before reimbursable expenses, was $14.6 million in 2025 and $10.5 million in 2024. This increase was primarily related to the stock price award program and the acquisition related non-cash stock compensation expense related to LeewayHertz. See Notes 1 and 10, "Basis of Presentation and General Information” and “Stock Based Compensation,” respectively, to our consolidated financial statements included in this Annual Report on Form 10-K for more information. Selling, General and Administrative Costs (“SG&A”). SG&A primarily consists of salaries, benefits and incentive compensation for the selling, marketing, administrative and executive employees, non-cash compensation expense, amortization of intangible assets, acquisition-related costs and various other overhead expenses. SG&A costs increased to $90.5 million in 2025, as compared to $78.5 million in 2024. The increase in the costs during 2025 was primarily due to increased non-cash stock based compensation from the stock price award program issuances of $7.6 million, LeewayHertz acquisition related incremental SG&A of $1.0 million and increases in amortization expense of $0.9 million. See Note 10, “Stock Based Compensation,” and Note 1, "Basis of Presentation and General Information," to our consolidated financial statements included in this Annual Report on Form 10-K for more information. SG&A costs as a percentage of total Company revenue were 30% in 2025 and 25% in 2024. Non-cash stock based compensation expense, included in SG&A, was $16.0 million in 2025, as compared to $9.0 million in 2024. The increase in 2025 primarily related to the non-cash stock compensation expense from the stock price award program. See Note 10, “Stock Based Compensation,” to our consolidated financial statements included in this Annual Report on Form 10-K for more information. There was $1.0 million of amortization expense in 2025, as compared to $148 thousand in 2024, which is also included in SG&A. The amortization expense was related to the intangible assets acquired in our September 2024 acquisition of LeewayHertz and May 2025 acquisition of Spend Matters. See Note 1, “Basis of Presentation and General Information,” to our consolidated financial statements included in this Annual Report on Form 10-K for more information. Restructuring Costs. During the third quarter of 2025, we incurred restructuring costs of $3.1 million as a result of the continued pivot of our business to Gen AI. These costs were primarily employee related costs, as the Company reduced staff to be commensurate with current market demand and the leverage of our Gen AI delivery platforms are expected to have on our service offerings. 22 Segment Profit. Segment profit consists of the revenue generated by the segment, less the direct costs of revenue and selling, general and administrative expenses that are incurred directly by the segment. Items not allocated to the segment level include corporate costs related to administrative functions that are performed in a centralized manner that are not attributable to a particular segment. These administrative function costs include corporate general and administrative expenses, non-cash compensation, depreciation and amortization expense and interest expense. Global S&BT segment profit decreased to $50.8 million in 2025 from $51.6 million in 2024. The growth from our Gen AI consulting and implementation offerings in this segment was more than offset by weakness in our OneStream implementation offerings and the non-renewal of a meaningful IPaaS in during 2025, as mentioned above. Oracle Solutions segment profit decreased to $12.4 million in 2025 from $19.1 million in 2024, The decrease during 2025 was primarily due to decreased revenue, as discussed above, partially offset by decreased incentive compensation accruals related to performance. SAP Solutions segment profit increased to $20.4 million in 2025 from $18.7 million in 2024, primarily due to the increase in implementation and license sales during 2025, partially offset by higher commissions and other sales related costs. Interest Expense, Net. Interest expense, net was $1.7 million and $1.6 million during 2025 and 2024, respectively. As of December 26, 2025, we had outstanding debt of $76.0 million, excluding debt issuance costs, of which $40.0 million was borrowed in early December 2025 to fund the tender offer. As of December 27, 2024, we had outstanding debt of $13.0 million, excluding debt issuance costs. See Note 11, “Shareholders' Equity,” to our consolidated financial statements included in this Annual Report on Form 10-K for more information. Income Taxes. During 2025, we recorded $8.9 million of income tax expense related to certain federal, state and foreign taxes which reflected an effective tax rate of 40.7%. During 2024, we recorded $13.4 million of income tax expense related to certain federal, state and foreign taxes which reflected an effective tax rate of 31.1%. The increase in the effective tax rate is primarily due to the limitation of executive compensation deductions related to executive compensation, primarily driven by the stock price award program. See Note 10, “Stock Based Compensation,” to our consolidated financial statements included in this Annual Report on Form 10-K for more information. Liquidity and Capital Resources As of December 26, 2025 and December 27, 2024, we had $18.2 million and $16.4 million, respectively, of cash, and $75.8 million and $12.7 million, respectively, outstanding under our Credit Facility, inclusive of deferred debt costs. We currently believe that available funds, including the cash on hand and funds available for borrowing under our Credit Facility, and cash flows generated by operations will be enough to fund our cash requirements, including working capital, debt payments, lease obligations and capital expenditures for at least the next twelve months and beyond. We may decide to raise additional funds in order to fund expansion, to develop new or further enhance products and services, to respond to competitive pressures, or to acquire complementary businesses or technologies. There is no assurance that additional financing would be available when needed or desired. The following table summarizes our cash flow activity (in thousands): Year Ended December 26, December 27, 2025 2024 Cash flows provided by operating activities $ 40,304 $ 47,729 Cash flows used in investing activities $ (8,634 ) $ (10,620 ) Cash flows used in financing activities $ (29,765 ) $ (41,662 ) Cash Flows from Operating Activities Net cash provided by operating activities was $40.3 million in 2025, as compared to $47.7 million in 2024. In 2025, the net cash provided by operating activities was primarily due to net income adjusted for non-cash items, partially offset by increases in accounts receivable and contract assets and prepaid income taxes and decreases in income tax liabilities. In 2024, the net cash provided by operating activities was primarily due to net income adjusted for non-cash items, partially offset by increases in accounts receivable and contract assets. 23 Cash Flows from Investing Activities Net cash used in investing activities was $8.6 million in 2025, as compared to $10.6 million in 2024. During both 2025 and 2024, cash flows used in investing activities included investments made to the continued development of our Hackett Connect Applied Intelligence Advisory member platform and continued development of our Gen AI platforms, as well as acquisition related activities. Cash flows used in investing activities during 2025 included $0.8 million of cash consideration paid for our acquisition of Spend Matters and in 2024 included $6.5 million relating to the acquisition of LeewayHertz. Cash Flows from Financing Activities Net cash used in financing activities was $29.8 million in 2025, as compared to $41.7 million in 2024. The usage of cash in 2025 primarily related to the employee net vesting related tax withholding requirements of $11.9 million, the repurchase of $69.1 million of the Company's common stock and dividend payments of $12.9 million, partially offset by a net $63.0 million drawdown on our Credit Facility. The usage of cash in 2024, primarily related to the repayment of borrowings of $20.0 million related to our Credit Facility, dividend payments of $12.1 million, employee net vesting related tax withholding requirements of $4.1 million and the repurchase of $6.4 million of the Company's common stock. Material Cash Requirements Debt Payments and Lease Obligations On November 7, 2022, we amended and restated our credit agreement in order to extend the maturity date of our Credit Facility and provide the Company with an additional $55.0 million in borrowing capacity, for an aggregate amount of up to $100 million. See Note 8, “Credit Facility,” to our consolidated financial statements included in this Annual Report on Form 10-K for more information. As of December 26, 2025, we had $76.0 million of outstanding borrowings, excluding deferred debt issuance costs, under our revolving line of credit, leaving us with borrowing capacity of approximately $24.0 million. See Note 8, “Credit Facility,” to our consolidated financial statements included in this Annual Report on Form 10-K for more information. The following table summarizes our future principal payments under our future Credit Facility and lease commitments under our non-cancelable operating leases as of December 26, 2025 (in thousands): Contractual Obligations Total Less Than 1 Year 1-3 Years 4-5 Years More Than 5 Years Operating lease obligations $ 2,721 $ 1,259 $ 1,279 $ 183 $ — Long-term debt obligations (1) 76,000 — 76,000 — — Total $ 78,721 $ 1,259 $ 77,279 $ 183 $ — (1) Excludes interest charges on borrowings, the fee on the amount of any unused commitment that we may be obligated to pay under our revolving Credit Facility as such amounts vary and the deferred debt issuance costs. See Note 8, “Credit Facility”, to our consolidated financial statements included in this Annual Report on Form 10-K for more information Capital Expenditures As part of the LeewayHertz acquisition, the Company has committed to fund up to $10.0 million of development costs related to ZBrain AI subject to the business plans approved by the JV Board of Directors. Our capital expenditures primarily consist of investments related to the continued development of our Hackett Connect Applied Intelligence Advisory member platform and our Gen AI related platforms. During the years ended December 26, 2025 and December 27, 2024, our capital expenditures were $7.9 million and $4.1 million, respectively. We expect an increase in capital expenditures related to the continued development of the ZBrain AI orchestration platform. Taxes Cash paid for income taxes was $13.1 million and $11.6 million for the years ended December 26, 2025, and December 27, 2024, respectively. See Note 9, "Income Taxes," to our consolidated financial statements included in this Annual Report on Form 10-K for additional information. Dividends and Share Repurchases During the fiscal year 2025, our Board of Directors approved four quarterly dividends payments of $0.12 per share totaling $12.9 million. We expect dividend payments in 2026 to be approximately $12.0 million. 24 We have an ongoing authorization from our Board of Directors to repurchase shares of our common stock. During 2025, we repurchased 50 thousand shares of common stock from our Chief Financial Officer and members of our Board of Directors at an average price per share of $30.78, for a total cost of $1.6 million. In addition, we repurchased 3.2 million shares of common stock on the open market at an average price per share of $21.11, for a cost of $67.6 million, which includes the tender offer in December 2025. As of December 26, 2025, we had $11.4 million share repurchase authorization remaining. Subsequent to fiscal year end, our Board of Directors increased the authorization by $13.6 million, leaving $25.0 million share repurchase authorization remaining. See Note 11, “Shareholders' Equity,” to our consolidated financial statements included in this Annual Report on Form 10-K for more information. Subsequent to fiscal year end, we repurchased 7 thousand shares of the Company’s common stock from members of our Board of Directors for a total of $0.1 million, or $15.22 per share. Including these repurchases, we had approximately $24.9 million available for future repurchases under the plan. Shares purchased under the repurchase plan do not include shares withheld to satisfy withholding tax obligations. These withheld shares are never issued and in lieu of issuing the shares, taxes were paid on our employees' behalf. In 2025, 0.5 million shares were withheld and not issued for a cost of $11.9 million, bringing the total cumulative cash used to repurchase stock in 2025 to $81.0 million. In 2024, 0.2 million shares were withheld and not issued for a cost of $4.1 million, bringing the total cumulative cash used to repurchase stock in 2024 to $10.5 million. Recently Issued Accounting Standards For discussion of recently issued accounting standards, see Note 1, “Basis of Presentation and General Information”, to our consolidated financial statements included in this Annual Report on Form 10-K for more information.