RESOURCES CONNECTION, INC.RGP
RESOURCES CONNECTION, INC. Segments Disclosure
Segment Information and Enterprise Reporting
During the first quarter of fiscal 2025, the Company reorganized its business segments to better align with changes in its internal operating model and financial reporting, which is used for performance assessment and resource allocation by the CODMs. All prior year periods presented were recast to reflect the impact of the preceding segment changes. See Note 2 – Summary of Significant Accounting Policies for further discussion about the Company’s operating and reportable segments.
The tables below reflect the operating results of the Company’s segments consistent with the management and performance measurement system utilized by the Company. Performance measurement is based on segment Adjusted EBITDA, a non-GAAP measure. Adjusted EBITDA is defined as net income (loss) before amortization expense, depreciation expense, interest and income taxes excluding stock-based compensation expense, amortized Enterprise Resource Planning (“ERP”) system costs, technology transformation costs, goodwill impairment, acquisition costs, gain on sale of assets, and restructuring costs. Adjusted EBITDA at the segment level excludes certain shared corporate administrative costs that are not practical to allocate. The Company’s CODMs do not evaluate segments using asset information.
The table below represents a reconciliation of the Company’s net income (loss) to Adjusted EBITDA for all periods presented (in thousands):
| For the Years Ended | |||||||||||||||||
| May 31, 2025 | May 25, 2024 | May 27, 2023 | |||||||||||||||
| Revenue: | |||||||||||||||||
On-Demand Talent | $ | 205,976 | $ | 272,600 | $ | 372,679 | |||||||||||
| Consulting | 219,215 | 227,967 | 259,946 | ||||||||||||||
Europe & Asia Pacific | 77,602 | 84,207 | 93,166 | ||||||||||||||
| Outsourced Services | 39,618 | 38,122 | 38,950 | ||||||||||||||
All Other | 8,920 | 9,905 | 10,902 | ||||||||||||||
Total consolidated revenue | $ | 551,331 | $ | 632,801 | $ | 775,643 | |||||||||||
| Adjusted EBITDA: | |||||||||||||||||
On-Demand Talent | $ | 17,116 | $ | 31,673 | $ | 60,484 | |||||||||||
| Consulting | 31,718 | 38,420 | 53,477 | ||||||||||||||
| Europe & Asia Pacific | 4,478 | 5,289 | 9,913 | ||||||||||||||
| Outsourced Services | 7,581 | 7,641 | 7,408 | ||||||||||||||
| All Other | (1,838) | (675) | 1,131 | ||||||||||||||
Unallocated items (1) | (35,598) | (30,865) | (32,219) | ||||||||||||||
| Adjustments: | |||||||||||||||||
| Stock-based compensation expense | (6,754) | (5,732) | (9,521) | ||||||||||||||
Amortized ERP system costs (2) | (1,287) | - | - | ||||||||||||||
Technology transformation costs (3) | (5,474) | (6,901) | (6,355) | ||||||||||||||
Acquisition costs (4) | (2,763) | (1,970) | - | ||||||||||||||
Goodwill impairment (5) | (194,409) | - | (2,955) | ||||||||||||||
Gain on sale of assets (6) | 3,420 | - | - | ||||||||||||||
Restructuring cost (7) | (5,061) | (4,087) | 364 | ||||||||||||||
| Amortization expense | (5,880) | (5,378) | (5,018) | ||||||||||||||
| Depreciation expense | (1,868) | (3,050) | (3,539) | ||||||||||||||
Contingent consideration adjustment (8) | - | 4,400 | - | ||||||||||||||
| Interest income, net | 544 | 1,064 | (552) | ||||||||||||||
Income (loss) before income tax benefit (expense) | (196,075) | 29,829 | 72,618 | ||||||||||||||
Income tax benefit (expense) | 4,295 | (8,795) | (18,259) | ||||||||||||||
Net income (loss) | $ | (191,780) | $ | 21,034 | $ | 54,359 | |||||||||||
(1)Unallocated items are generally comprised of unallocated corporate administrative costs, including management and board compensation, corporate support function costs and other general corporate costs that are not allocated to segments.
(2)Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to newly implemented ERP system, which was recorded within selling, general, and administrative expenses on the Consolidated Statement of Operations.
(3)Technology transformation costs represent costs included in net income (loss) related to the Company’s initiative to upgrade its technology platform globally, including a cloud-based ERP system and talent acquisition and management systems. Such costs primarily include hosting and certain other software licensing costs, third-party consulting fees and costs associated with dedicated internal resources that are not capitalized.
(4)Acquisition costs primarily represent costs included in net income (loss) related to the Company’s business acquisition. These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms. See Note 3 – Acquisitions and Dispositions for further discussion.
(5)The effect of the goodwill impairment charge recognized during the year ended May 31, 2025 was related to the On-Demand Talent, Consulting, and Europe and Asia Pacific segments and during the year ended May 27, 2023 related to the Sitrick segment.
(6)Gain on sale of assets was related to the Company’s sale of its Irvine office building, which was completed on August 15, 2024.
(7)Restructuring costs for the year ended May 31, 2025 related to the 2025 Restructuring Plan, which were authorized in December 2024 and May 2025. Restructuring costs for the year ended May 25, 2024 related to U.S. Restructuring Plan, which was authorized in October 2023, and was substantially completed during fiscal 2024. The restructuring credits for the year ended May 27, 2023 related to the release of accrued restructuring liabilities upon completion of the global restructuring and business transformation plans from fiscal 2021.
(8)Contingent consideration adjustment related to the remeasurement of contingent liabilities related to the CloudGo acquisition.
The tables below disclose the Company’s revenue, gross profit, significant expenses, Adjusted EBITDA, gross margin and Adjusted EBITDA margin by segment (amount in thousands):
| Year Ended May 31, 2025 | |||||||||||||||||||||||||||||||||||
| On-Demand Talent | Consulting | Europe and Asia Pacific | Outsourced Services | All Other | |||||||||||||||||||||||||||||||
| Revenue | $ | 205,976 | $ | 219,215 | $ | 77,602 | $ | 39,618 | $ | 8,920 | |||||||||||||||||||||||||
| Cost of services | 127,195 | 137,619 | 50,216 | 23,646 | 5,231 | ||||||||||||||||||||||||||||||
| Gross Profit | 78,781 | 81,596 | 27,386 | 15,972 | 3,689 | ||||||||||||||||||||||||||||||
Compensation, bonus and commissions (1) | 47,048 | 38,313 | 16,390 | 5,977 | 2,134 | ||||||||||||||||||||||||||||||
Other segment expenses (2) | 14,617 | 11,565 | 6,518 | 2,414 | 3,393 | ||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 17,116 | $ | 31,718 | $ | 4,478 | $ | 7,581 | $ | (1,838) | |||||||||||||||||||||||||
| Gross Margin | 38.2 | % | 37.2 | % | 35.3 | % | 40.3 | % | 41.4 | % | |||||||||||||||||||||||||
Adjusted EBITDA margin (3) | 8.3 | % | 14.5 | % | 5.8 | % | 19.1 | % | (20.6) | % | |||||||||||||||||||||||||
| Year Ended May 25, 2024 | |||||||||||||||||||||||||||||||||||
| On-Demand Talent | Consulting | Europe and Asia Pacific | Outsourced Services | All Other | |||||||||||||||||||||||||||||||
| Revenue | $ | 272,600 | $ | 227,967 | $ | 84,207 | $ | 38,122 | $ | 9,905 | |||||||||||||||||||||||||
| Cost of services | 167,796 | 138,119 | 53,231 | 22,239 | 5,348 | ||||||||||||||||||||||||||||||
| Gross Profit | 104,804 | 89,848 | 30,976 | 15,883 | 4,557 | ||||||||||||||||||||||||||||||
Compensation, bonus and commissions (1) | 53,910 | 41,714 | 17,804 | 6,472 | 2,098 | ||||||||||||||||||||||||||||||
Other segment expenses (2) | 19,221 | 9,714 | 7,883 | 1,770 | 3,134 | ||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 31,673 | $ | 38,420 | $ | 5,289 | $ | 7,641 | $ | (675) | |||||||||||||||||||||||||
| Gross Margin | 38.4 | % | 39.4 | % | 36.8 | % | 41.7 | % | 46.0 | % | |||||||||||||||||||||||||
Adjusted EBITDA margin (3) | 11.6 | % | 16.9 | % | 6.3 | % | 20.0 | % | (6.8) | % | |||||||||||||||||||||||||
| Year Ended May 27, 2023 | |||||||||||||||||||||||||||||||||||
| On-Demand Talent | Consulting | Europe and Asia Pacific | Outsourced Services | All Other | |||||||||||||||||||||||||||||||
| Revenue | $ | 372,679 | $ | 259,946 | $ | 93,166 | $ | 38,950 | $ | 10,902 | |||||||||||||||||||||||||
| Cost of services | 222,595 | 152,898 | 58,624 | 22,978 | 5,406 | ||||||||||||||||||||||||||||||
| Gross Profit | 150,084 | 107,048 | 34,542 | 15,972 | 5,496 | ||||||||||||||||||||||||||||||
Compensation, bonus and commissions (1) | 67,835 | 45,215 | 17,640 | 6,467 | 2,481 | ||||||||||||||||||||||||||||||
Other segment expenses (2) | 21,765 | 8,356 | 6,989 | 2,097 | 1,884 | ||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 60,484 | $ | 53,477 | $ | 9,913 | $ | 7,408 | $ | 1,131 | |||||||||||||||||||||||||
| Gross Margin | 40.3 | % | 41.2 | % | 37.1 | % | 41.0 | % | 50.4 | % | |||||||||||||||||||||||||
Adjusted EBITDA margin (3) | 16.2 | % | 20.6 | % | 10.6 | % | 19.0 | % | 10.4 | % | |||||||||||||||||||||||||
(1)The significant expense category and amounts align with the segment-level information that is regularly provided to the CODMs.
(2)Other segment expenses include occupancy expenses, business expenses, marketing expenses, recruiting expenses and other operating expenses.
(3)Segment Adjusted EBITDA Margin is calculated by dividing segment Adjusted EBITDA by segment revenue.
The table below represents the Company’s revenue and long-lived assets by geographic location (in thousands):
| Revenue for the Years Ended | Long-Lived Assets (1) as of | ||||||||||||||||||||||||||||
| May 31, 2025 | May 25, 2024 | May 27 2023 | May 31, 2025 | May 25, 2024 | |||||||||||||||||||||||||
| United States | $ | 451,228 | $ | 519,869 | $ | 664,515 | $ | 25,297 | $ | 13,343 | |||||||||||||||||||
| International | 100,103 | 112,932 | 111,128 | 1,677 | 2,319 | ||||||||||||||||||||||||
| Total | $ | 551,331 | $ | 632,801 | $ | 775,643 | $ | 26,974 | $ | 15,662 | |||||||||||||||||||
(1)Long-lived assets are comprised of property and equipment and ROU assets.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jul 28, 2025 | Showing above |
| 2024 | Jul 22, 2024 | |
| 2023 | Jul 25, 2023 | |
| 2022 | Jul 28, 2022 | |
| 2021 | Jul 23, 2021 | |
| 2020 | Jul 27, 2020 | |
| 2019 | Jul 19, 2019 | |
| 2018 | Jul 23, 2018 | |
| 2017 | Jul 24, 2017 | |
| 2016 | Aug 11, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.