HACKETT GROUP, INC. (HCKT) Business

ITEM 1. BUSINESS

GENERAL

In this Annual Report on Form 10-K, unless the context otherwise requires, “The Hackett Group,” “Hackett,” the “Company,” “we,” “us,” and “our” refer to The Hackett Group, Inc. and its subsidiaries and predecessors. We were originally incorporated on April 23, 1997.

Our fiscal year ended December 26, 2025.

OVERVIEW

The Hackett Group, Inc. (NASDAQ: HCKT) is a global, IP platform-based generative artificial intelligence (“Gen AI”) strategic advisory, business transformation, and enterprise application implementation firm. We combine proprietary benchmarking and best-practice process intelligence intellectual property ("IP") with Gen AI–enabled delivery platforms to help clients identify, prioritize, design, and implement high-impact improvements across enterprise functions, including supply chain and operations, finance, human resources, information technology, procurement and corporate services, as well as selected enterprise application implementation services, including Oracle, SAP, OneStream, and eProcurement applications.

WHAT MAKES US DIFFERENT?

Over the past two years, we have systematically developed a suite of IP Gen AI platforms delivery platforms, which are distinctly enabled by our Hackett Domain Specific Language Model, which we refer to as our Solution Language Model ("SLM"). The Hackett SLM does not produce generic ideas. It applies domain expertise, our process performance benchmarks and best practices intelligence IP, and a structured ideation and solution-design approach to rapidly turn AI opportunities into deployable, implementation-ready solutions. This innovation allows us to accelerate and enhance all of our client AI transformation efforts and highly differentiates our offerings. We do not believe that you can successfully deploy high impact solutions without a detail understanding of the client specific requirements. Without client specific business, process, automation and data requirements, there is no way to drive true breakthrough or transformative value to complex enterprise environments.

Our platform-enabled model is grounded in our globally recognized Digital World Class® performance benchmarks and best-practice process intelligence (collectively, “Hackett Intelligence IP”). As of December 26, 2025, we have completed over 28,400 benchmarking and performance studies and have measured and evaluated enterprise processes for thousands of organizations globally. This proprietary process benchmarking and intelligence IP is the foundation for our offerings and power the structured knowledge embedded within our Gen AI platforms.

MARKET CONTEXT AND INDUSTRY DYNAMICS

We believe we are entering a massive automation expansion era, which will significantly increase the automation footprint of most organizations. This new opportunity will require enterprise software and service providers to expand their agentic capabilities to capture this opportunity. We believe this AI transition is also forcing organizations to reassess the nature of transformation investments in response to rapidly evolving Gen AI capabilities. While demand for traditional digital transformation remains present, many organizations are redirecting an increasing amount of their Gen AI experimentation and tactical initiatives to enterprise wide assessment of high impact AI solutions.

We believe that sustainable AI value realization requires more than access to large language models or other generic automation tools. Meaningful return on investment ("ROI") results depend on enterprise discovery efforts that allows organizations to prioritize their investment to more ambitious solutions which are pursued based on strategic priorities and the capability of the respective organization. Our platforms are designed to address these requirements and help clients move from experimentation to transformational operationalized, measurable outcomes.

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OUR OFFERINGS AND IP PLATFORM-BASED DELIVERY MODEL

Our platforms have now allowed us to transition from a traditional labor-based delivery model to an IP platform enabled approach. Under our new delivery model our consultants leverage our new platforms to accelerate and enhance the value we deliver to our clients. This Gen AI enabled model is highly differentiated and allows us to deliver measurable ROI outcomes which we believe will allow us to increase our addressable market with new enterprise-wide solutions which we expect will increase our Gen AI revenues and expand our margins.

Hackett Intelligence IP

Our proprietary intellectual property includes benchmarking metrics, productivity and cost analytics, best practices, process taxonomies, software configuration guides and best-practice process flows developed over decades of client transformational benchmarking engagements and research. We use this IP to quantify performance gaps, identify performance improvement opportunities, conduct enterprise application fit analyses and define target-state operating models to support execution. Our IP is continuously refreshed through ongoing benchmark studies, client engagements, and hands-on delivery experience.

Hackett Solution Language Model and Platform Architecture

Our Gen AI delivery platforms leverage a proprietary domain specific SLM and structured knowledge derived from our Hackett Intelligence IP. This architecture is designed, trained and tuned to deliver context-aware insight and repeatable solution designs from end to end process to an individual work step level. It is this granular capability that allows us to create complete and precise solution outcomes.

Hackett AI XPLR™

Hackett AI XPLR ("AI XPLR") enables enterprises to identify feasible AI opportunities, design optimal AI‑enabled agentic workflows, and invest with confidence, which is supported by Hackett performance intelligence validated ROI.

AI XPLR is our enterprise-wide Gen AI assessment, ideation and solution design platform. It can be used on a facilitated basis to support the delivery of an engagement or it can be licensed and used with on demand support.

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AI XPLR is designed to help organizations identify and prioritize high-impact Gen AI use cases, simulate solution concepts and quantify potential business benefits, perform detailed process and agentic workflow design, establish measurable value cases and assess feasibility requirements. AI XPLR is powered by our Hackett SLM and is uniquely informed by Hackett Intelligence IP.

XT™ (Business Transformation Delivery Platform)

XT is our Gen AI–enabled business transformation acceleration platform, introduced prior to the end of fiscal year 2025. XT is used internally by our consultants to support business transformation engagements by embedding benchmark-based best practices, which assess target-state service delivery operating model alternatives including capability maturity and best practice process flow assessments, which result in a detailed transformation roadmap in a digitally delivered experience.

AIXelerator™ (“AIX”) (Technology Implementation Delivery Platform)

AIX is our Gen AI–enabled platform designed to support enterprise application implementation and modernization engagements including Oracle, OneStream and eProcurement implementations. AIX is used to accelerate and enhance requirements gathering, design, configuration and other implementation activities.

Ask Hackett AI™ and Hackett Connect™

Ask Hackett AI is our Gen AI–assisted knowledge and insight capability that enables Hackett associates to support delivery of executive advisory and applied intelligence programs. Hackett Connect is our membership platform that provides clients with structured access to advisors, research, benchmarking results, and events.

Quantum Leap® and Digital Transformation Platform (DTP)

Quantum Leap® is our benchmarking and continuous improvement software-as-a-service platform. Our Digital Transformation Platform digitizes and organizes Hackett IP to help clients translate benchmark insight into actionable execution steps. These platforms support our services and elements of it are available on a self-serve basis.

ZBrain (Gen AI Engineering and Agentic Workflow Build Capability)

In September of 2024, we acquired the globally recognized Gen AI engineering capabilities of ZBrain, the agentic orchestration platform of LeewayHertz to expand our agentic design and build capabilities and also enhance our platform innovation and licensing efforts.

Oracle Solutions

Our Oracle Solutions Segment helps clients choose and deploy Oracle applications that best meet their needs and objectives. In 2017, we acquired Oracle ERP and Cloud implementation capabilities. This allowed us to greatly increase the size of our Oracle addressable market and strongly positioned us to be a strategic provider of Oracle’s rapidly growing cloud software and services market. The software market is rapidly moving to cloud-based software, which led us to aggressively transition our Oracle Solutions segment from being primarily focused on the implementation of Oracle EPM on-premise software to the entire Oracle Cloud Enterprise Suite. We believe the actions we took to expand our Oracle Cloud capabilities from EPM on-premise to the entire Oracle Cloud ERP Suite have strongly positioned us to take advantage of this secular cloud migration growth opportunity. Another significant investment we made was to digitize all of our IP and to build our proprietary Hackett DTP. By specifically building one of our first versions around the Oracle Cloud application functionality, we believe we can quickly demonstrate how to optimize the configuration of Oracle Cloud applications to drive to its fully intended transformative outcome. We believe these moves align our Oracle Solutions segment with the Oracle go-to-market strategy and will also allow us to use our unique best-practice implementation IP to demonstrate the value of Oracle Cloud applications for the Oracle sales channel. These improvements cover many aspects of service delivery, including process improvement, technology deployment, organizational alignment, information and data definition and skills and competency alignment. Solutions typically reside in three primary areas: Core Financial Close and Consolidation, Integrated Business Planning, and Reporting / Advanced Analytics. Solution innovations have taken the group into areas such as big data, cloud technology data management and governance, and industry-specific analytic templates. This will now extend to Oracle imbedded Gen AI solutions.

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SAP Solutions

Our SAP Solutions segment helps clients choose and deploy S4 HANA Cloud applications that best meet their needs and objectives. Our expertise is focused on SAP ERP, with primary focus on Life Sciences and Consumer Goods. The group offers comprehensive services from planning, architecture, and vendor evaluation and selection through implementation, customization, testing and integration. Comprehensive fit-gap analyses of all major packages against Hackett Best Practices, inclusive of imbedded Gen AI solutions, are utilized by our SAP Solutions teams. Our tools and templates help integrate best practices into business and analytical applications. The group also offers post-implementation support, change management, exception management, process transparency, system documentation and end-user training, all of which are designed to enhance return on investment. We also provide off-shore application development and Application Maintenance and Support (“AMS”) services. These services include post-implementation support for select business application and infrastructure platforms. Our SAP Solutions group also includes a division responsible for the sale of the SAP suite of applications.

STRATEGY

We have aggressively pivoted our offerings to address opportunities created by Gen AI and AI enabled business transformation, leveraging emerging agentic enterprise operating models. Our strategy focuses on expanding the reach of our IP through platform-enabled delivery, selectively monetizing capabilities through licensing and deepening long-term client relationships.

We believe that our platform-enabled delivery strategy will provide significant new revenue growth opportunities with higher margins while helping clients capture this unprecedented transformative opportunity. We also believe that channel partners can help us accelerate our efforts by increasing client access, which should also result in revenue growth.

Key elements of our strategy include expanding IP platform-based delivery, scaling licensable IP selectively through AI XPLR, moving clients from AI pilots to operationalized solutions, building strategic alliances and channels, investing in platform innovation and talent, maintaining operational discipline, and pursuing targeted acquisitions and alliances.

CLIENTS

We focus on developing long-term client relationships with Global 2000 organizations and other sophisticated buyers of advisory, transformation, and enterprise application services.

During 2025, 2024 and 2023, our ten most significant clients accounted for 24%, 31% and 23% of total revenue, respectively. In addition, during 2025, 2024 and 2023, our largest client generated 6%, 11% and 6% of total revenue, respectively. We have achieved a high level of satisfaction across our client base. We receive surveys from a significant number of our engagements which are utilized in a rigorous process to improve our delivery execution, sales processes, methodologies and training.

BUSINESS DEVELOPMENT AND MARKETING

Our extensive client base and executive relationships are our primary sources of new business. We generate demand through leadership-led selling, dedicated sales resources, membership-based programs, and strategic alliances. Our IP platform-enabled delivery approach is central to our go-to-market strategy.

Although virtually all of our advisors and consultants are expected to contribute to new revenue opportunities, our primary internal business development resources are comprised of the following:

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The Leadership Team, Principals and Senior Directors are comprised of our senior leaders who have a combination of executive, regional and anchor account responsibilities. In addition to their management responsibilities, this group of associates is responsible for growing the business by fostering executive-level relationships within accounts and leveraging their existing contacts in the marketplace.

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The Sales Organization is comprised of associates who are 100% dedicated to generating sales. They are deployed geographically in key markets, primarily focused on developing new relationships and they are aligned to our core group areas within their target accounts. They also handle opportunities in their geographic territories as they arise. We are currently making incremental investments in dedicated sales resources for our Benchmarking, IPaaS, Executive Advisory and Market Intelligence offerings.

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The Business Development Associates are comprised of trained groups of telemarketing specialists who are conversant with their respective solution areas. Lead generation is coordinated with our marketing and sales groups to ensure that our inbound and outbound efforts are synchronized with targeted marketing and sales programs.

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The Delivery Organization is comprised of our billable associates. We encourage associates to pursue additional business development opportunities through their normal course of delivering existing projects thereby helping us expand our business within existing accounts.

In addition to our business development resources, we have a corporate marketing and communications organization responsible for overseeing our marketing programs, public relations and employee communications activities.

We have organized our market focus into the following categories:

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Strategic Accounts are comprised of large prospects and existing relationships which we believe will have a significant revenue opportunity within the next 18 months. Strategic account criteria include the size of the company, industry affiliation, propensity to buy external consulting services and contacts within the account. The sales representative working closely with regional leadership is primarily responsible for identifying business opportunities in the account, acting as the single point of coordination for the client, and performing the general duties of account manager.

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Regional Accounts are accounts within a specified geographic location. These accounts mostly include large prospects, past clients, existing medium-sized clients and mid-tier market accounts and are handled primarily on an opportunistic basis, except for active clients where delivery teams are focused on driving additional revenue.

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Strategic Alliance Accounts are accounts that allow us to partner with organizations of greater scale or different skill sets or with software developers enabling all parties to jointly market their products and services to prospective clients.

HUMAN CAPITAL MANAGEMENT

Our culture emphasizes intellectual rigor, collaboration, and continuous development. We invest in recruiting and developing professionals with expertise in benchmarking, transformation, enterprise applications, and Gen AI-enabled solution design. We leverage global delivery capabilities, including offshore resources, to support scale and efficiency.

As of December 26, 2025, we had 1,503 associates, excluding subcontractors, 81% of whom were billable professionals. We do not have any associates that are subject to collective bargaining arrangements, however, in France, our associates enjoy the benefit of certain government regulations based on industry classification. We have entered into nondisclosure and non-solicitation agreements with virtually all of our personnel. We also engage consultants as independent contractors pursuant to written agreements that contain non-disclosure and non-solicitation provisions.

INTELLECTUAL PROPERTY

Our business depends on protecting our intellectual property, including trademarks, methodologies, benchmarking databases, best practices, software, and platform innovations. We protect our IP through confidentiality agreements, intellectual property assignment provisions, trademark protections, and other contractual and legal safeguards.

AVAILABLE INFORMATION

We make our public filings with the Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all exhibits and amendments to these reports, available free of charge at our website www.thehackettgroup.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC or at www.sec.gov.

Also available on our website, free of charge, are copies of our Code of Conduct and Ethics, Corporate Governance Guidelines, and the charters for the Audit Committee, Compensation Committee and Nominating and Governance Committee of our Board of Directors. We intend to disclose any amendment to, or waiver from, a provision of our Code of Conduct and Ethics and Corporate Governance Guidelines applicable to our senior financial officers, including our Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Corporate Controller on our website within four business days following the date of the amendment or waiver.