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Get filing alertsRGP reports 24% revenue decline, sells Sitruck unit, replaces credit facility after covenant breach
Filed July 22, 2026 · Period ending July 22, 2026 · ~1 min read
Key Changes
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high
Q4 revenue fell 23.8% YoY to $106.1M; net loss $16.1M vs. $73.3M prior year (prior year included $69M goodwill impairment); Adjusted EBITDA turned negative at $(0.6)M vs. $9.8M.
Exhibit 99.1 view on EDGAR → -
high
Company breached credit facility covenants as of May 30, 2026; terminated prior facility July 13 and entered new $30M asset-based revolver July 15, secured by receivables.
Exhibit 99.1 view on EDGAR → -
high
Sold Sitrick crisis-communications business May 2, 2026, incurring $7.1M in transaction costs including $2.4M loss on sale and severance.
Exhibit 99.1 view on EDGAR → -
high
Full-year revenue declined 18.0% to $452.0M; Adjusted EBITDA fell 78.7% to $5.0M; operating cash flow dropped to $1.4M from $18.9M prior year.
Exhibit 99.1 view on EDGAR → -
medium
All segments posted double-digit declines: On-Demand Talent down 23.7%, Consulting down 28.1%, Europe & Asia Pacific down 19.9%, driven by AI adoption and longer sales cycles.
Exhibit 99.1 view on EDGAR →
Summary
Resources Connection reported sharply weaker fiscal 2026 results, with fourth-quarter revenue falling 23.8% year-over-year to $106.1 million and full-year revenue down 18.0% to $452.0 million. The company swung to a quarterly net loss of $16.1 million and posted negative Adjusted EBITDA of $(0.6) million, down from $9.8 million a year earlier.
Management attributed the decline to softer demand for traditional accounting skills as clients adopt AI and automation, plus longer sales cycles for consulting projects. All three operating segments posted double-digit revenue declines. The company sold its Sitrick crisis-communications unit in May 2026, incurring $7.1 million in transaction-related costs including a $2.4 million loss on sale.
More significantly, RGP breached financial covenants under its prior credit facility as of May 30, 2026, terminated that facility on July 13, and replaced it with a new $30 million asset-based revolver secured by receivables. The smaller, secured facility reflects tighter liquidity conditions. Operating cash flow fell to $1.4 million from $18.9 million in the prior year, though the company maintained its $0.07 quarterly dividend and ended the year with $82.4 million in cash.
Section-by-Section Diff
Event · Exhibit 99.1
Added in current filing · view on EDGAR →
Revenue of $106.1 million compared to $139.3 million ... Net loss improved to $16.1 million (net loss margin of 15.1%) up from net loss of $73.3 million (net loss margin of 52.6%) ... GAAP diluted loss per common share improved to $0.47, up from $2.23 ... Adjusted EBITDA, a non-GAAP measure, of $(0.6) million (Adjusted EBITDA margin of (0.6%) compared to $9.8 million (Adjusted EBITDA margin of 7.1%)
Fourth quarter revenue fell 23.8% year-over-year to $106.1 million, driven by a 20.9% decline in billable hours and a 3.6% drop in average bill rate. Net loss narrowed to $16.1 million from $73.3 million in the prior year quarter, primarily because the prior year included a $69.0 million goodwill impairment charge. Adjusted EBITDA turned negative at $(0.6) million versus $9.8 million a year ago, reflecting softer demand for traditional accounting skills and longer consulting sales cycles.
Added in current filing · view on EDGAR →
Revenue of $452.0 million compared to $551.3 million ... Net loss improved to $40.6 million (net loss margin of 9.0%) compared to net loss of $191.8 million (net loss margin of 34.8%) ... GAAP diluted loss per common share improved to $1.21 compared to $5.80 ... Adjusted EBITDA of $5.0 million (Adjusted EBITDA margin of 1.1%) compared to $23.5 million (Adjusted EBITDA margin of 4.3%)
Full-year revenue declined 18.0% to $452.0 million, with billable hours down 17.5% and average bill rate down 0.9%. Net loss improved to $40.6 million from $191.8 million in the prior year, again benefiting from the absence of the prior year's $194.4 million goodwill impairment. Adjusted EBITDA fell 78.7% to $5.0 million, reflecting persistent demand weakness and negative operating leverage despite cost-reduction efforts.
Added in current filing · view on EDGAR →
As of May 30, 2026, the Company was not in compliance with all financial covenants under its credit facility. The Company terminated the current credit facility on July 13, 2026. On July 15, 2026, the Company entered into a new credit facility, which provides for secured revolving loans, available in an amount up to the lesser of $30.0 million and a borrowing base formula tied to eligible receivables and eligible unbilled receivables and subject to established reserves.
RGP sold its Sitrick crisis-communications business on May 2, 2026, incurring $7.1 million in transaction-related costs including severance, a $2.4 million loss on sale, and accelerated stock compensation. The company was out of compliance with its prior credit facility covenants as of May 30, 2026, terminated that facility on July 13, 2026, and entered a new $30 million asset-based revolving credit facility on July 15, 2026. The new facility is smaller and secured by receivables, reflecting tighter liquidity conditions.
Added in current filing · view on EDGAR →
On-Demand Talent – Revenue in the On-Demand Talent segment was $40.4 million in the fourth quarter of fiscal 2026 compared to $53.0 million in the fourth quarter of fiscal 2025, reflecting a decrease of 23.7% ... Consulting – Revenue in the Consulting segment was $36.6 million in the fourth quarter of fiscal 2026 compared to $51.0 million in the fourth quarter of fiscal 2025, reflecting a decrease of 28.1% ... Europe & Asia Pacific – Revenue in the Europe & Asia Pacific segment was $17.1 million in the fourth quarter of fiscal 2026 compared to $21.3 million in the fourth quarter of fiscal 2025, reflecting a 19.9% decrease
All major segments posted double-digit revenue declines in Q4. On-Demand Talent fell 23.7% as clients adopted AI and automation for traditional finance roles. Consulting dropped 28.1% due to longer sales cycles for complex projects, though average bill rates rose 2.6% reflecting higher-value work. Europe & Asia Pacific declined 19.9%, with billable hours down 11.5% and average bill rate down 10.0% due to geographic mix shift toward lower-rate Asia Pacific.
Added in current filing · view on EDGAR →
As of May 30, 2026, cash and cash equivalents totaled $82.4 million ... The Company generated $1.4 million in cash from operations during the year ended May 30, 2026 compared to cash provided by operations of $18.9 million during the year ended May 31, 2025 ... The Company paid a quarterly dividend of $0.07 per share on June 19, 2026, or $2.4 million in the aggregate
Cash and equivalents stood at $82.4 million at fiscal year-end, down from $86.1 million a year earlier. Operating cash flow fell sharply to $1.4 million from $18.9 million in the prior year, reflecting cash payments for cost-reduction actions. The company maintained its $0.07 quarterly dividend, paying $2.4 million in June 2026. No share repurchases occurred during fiscal 2026; approximately $79.2 million remains available under existing repurchase authorizations.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 23, 2026 · How we verify