The Hackett Group Announces Third Quarter 2025 Results and Intent to Launch Dutch Tender Offer

About this update from The Hackett Group, Inc.

MIAMI --(BUSINESS WIRE)-- The Hackett Group, Inc. (NASDAQ: HCKT), a leading generative artificial intelligence (Gen AI) consultancy and executive advisory firm that enables Digital World Class® performance, today announced its financial results for the third quarter, which ended on September 26, 2025 . “We reported operating results that were at the mid-range of our adjusted earnings per share guidance. This was achieved while continuing our pivot to Gen AI, including aggressively investing in our highly differentiating AI XPLR platform and growing our Gen AI revenues,” stated Ted A. Fernandez , Chairman and CEO of The Hackett Group, Inc. “What distinguished this quarter was the release of our AI XPLR V4 in September and the overwhelmingly positive response to our new capabilities and described by one of our channel partners as game changing. AI XPLR V4 fully considers the client’s existing automation footprint and data sources at a level of detail to identify and design agentic workflows, which ensures implementation success and value realization with unprecedented speed. More importantly, V4 is allowing us to attract clients and channel partners that are expected to accelerate our growth in this rapidly growing area.” Financial Highlights Total revenue in the third quarter of 2025 was $73.1 million and revenue before reimbursements was $72.2 million . This compares to total revenue of $79.8 million and revenue before reimbursements of $77.9 million in the third quarter of the prior year. GAAP diluted earnings per share was $0.09 in the third quarter of 2025, as compared to $0.31 in the third quarter of 2024. 2025 third quarter GAAP net income was impacted by non-cash compensation expense recognized in association with the stock price award program announced in September 2024 of $4.8 million , or $0.17 per diluted earnings per share. In addition, 2025 third quarter GAAP net income was also impacted by restructuring costs as the Company continues its pivot of the business to Gen AI of $3.1 million , or $0.08 per diluted earnings per share, partially offset by LeewayHertz acquisition related cash and non-cash compensation benefit of $1.8 million , or $0.05 per diluted earnings per share. Adjusted diluted earnings per share, a non-GAAP measure, for the third quarter of 2025 was $0.37 , which came in at the mid-point of our guidance, as compared to $0.43 in the third quarter of 2024. Adjusted financial information is provided to enhance the understanding of the Company's financial performance and is reconciled to the Company's GAAP information in the accompanying tables. As of September 26, 2025 , the Company's cash balances were $13.9 million , with $44.0 million outstanding on the Company's credit facility. Additionally, during the quarter the Company repurchased 1.1 million shares of its stock at an average price of $20.70 for a total of $22.9 million . As of the end of the third quarter of 2025, the Company’s remaining share repurchase program authorization was $12.6 million . Subsequent to the end of the third quarter, the Company’s Board of Directors approved an additional $40.0 million to its share repurchase plan. As of November 3, 2025 , there was approximately $52.6 million available for share repurchases under the share repurchase program. The Company also announced its plan to launch a modified “Dutch auction” tender offer on November 5, 2025 to purchase up to $40.0 million in value of its common stock, at a price ranging from $18.30 to $21.00 per share. All of our directors and executive officers have indicated that they do not currently intend to participate in the Offer. The equity ownership of our non-tendering directors, executive officers and affiliates will increase as a percentage of our issued and outstanding shares following the consummation of the Offer. In addition, subsequent to the end of the third quarter, the Company's Board of Directors declared the fourth quarterly dividend of $0.12 per share for its shareholders of record on December 23, 2025 , to be paid on January 9, 2026 . Business Outlook for the Fourth Quarter of 2025 Based on the Company’s current outlook: The Company estimates total revenue before reimbursements for the fourth quarter of 2025 will be in the range of $69.5 million to $71.0 million . The Company estimates adjusted diluted earnings per share for the fourth quarter of 2025 to be in the range of $0.38 and $0.40 , assuming a GAAP effective tax rate of 24.5%. Conference Call and Webcast Details On Tuesday, November 4, 2025 , senior management will discuss third quarter results in a conference call at 5:00 P.M. ET . The number for the conference call is (800) 593-0486, [Passcode: Third Quarter]. For International callers, please dial (517) 308-9371. Please dial in at least 5-10 minutes prior to start time. If you are unable to participate on the conference call, a rebroadcast will be available beginning at 8:00 P.M. ET on Tuesday, November 4, 2025 and will run through 5:00 P.M. ET on Tuesday, November 18, 2025 . To access the rebroadcast, please dial (866) 510-4834. For International callers, please dial (203) 369-1942. In addition, The Hackett Group will also be webcasting this conference call live. To participate, simply visit https://www.thehackettgroup.com approximately 10 minutes prior to the start of the call and click on the conference call link provided. An online replay of the call will be available after 8:00 P.M. ET on Tuesday, November 4, 2025 and will run through 5:00 P.M. ET on Tuesday, November 18, 2025 . To access the replay, visit www.thehackettgroup.com . Use of Non-GAAP Financial Measures The Company provides adjusted earnings results (which excluded non-cash stock-based compensation expense, acquisition-related cash and non-cash stock-based compensation expense, acquisition related costs, amortization expense, legal settlement and related costs, non-recurring charges and includes a GAAP tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP results are provided to enhance the users' overall understanding of the Company's current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain expenses that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of its ongoing primary operations and to provide a consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting. The presentation of this additional non-GAAP information should be considered in addition to, and not as a substitute for or superior to, any results prepared in accordance with GAAP. See the reconciliation of actual results titled “Reconciliation of GAAP to Non-GAAP Measures” in the accompanying tables. About The Hackett Group ® The Hackett Group, Inc. (NASDAQ: HCKT) is an IP and platform-based, Gen AI strategic consulting and executive advisory firm that enables Digital World Class® performance. Using AI XPLR™ and ZBrain™ – our ideation through implementation platforms – our experienced professionals help organizations realize the power of Gen AI and achieve quantifiable, breakthrough results, allowing us to be key architects of their Gen AI journey. Our expertise is grounded in unparalleled best practices insights from benchmarking the world’s leading businesses – including 97% of the Dow Jones Industrials, 90% of the Fortune 100, 70% of the DAX 40 and 51% of the FTSE 100. Visit us at www.thehackettgroup.com . Trademarks The Hackett Group ®, quadrant logo, and Digital World Class® are the registered marks of The Hackett Group ®. Cautionary Statement Regarding “Forward-Looking” Statements This release contains “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. Statements including without limitation, words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward-looking statements. Forward-looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Factors that may impact such forward-looking statements include without limitation, the ability of The Hackett Group to effectively market its digital transformation, our ability to transition our capabilities to support generative artificial intelligence (AI)-related consulting services and solutions and other consulting services, 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, competition from other consulting and technology companies that may have or develop in the future, similar offerings, the commercial viability of The Hackett Group and its services as well as other risk detailed in The Hackett Group’s reports filed with the United States Securities and Exchange Commission . The Hackett Group does not undertake any duty to update this release or any forward-looking statements contained herein. Additional Information Regarding the Tender Offer This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any security. The tender offer described above has not yet commenced, and there can be no assurances that the Company will commence the tender offer on the terms described in this press release or at all. On the commencement date of the tender offer, the Company will file a tender offer statement on Schedule TO, including an offer to purchase, letter of transmittal and other tender offer materials, with the SEC . The tender offer will only be made pursuant to the offer to purchase, the related letter of transmittal and the other tender offer materials filed as part of the Schedule TO. When available, shareholders should read carefully the offer to purchase, the related letter of transmittal and other tender offer materials because they will contain important information, including the terms and conditions of the tender offer. Once the tender offer commences, shareholders will be able to obtain a free copy of the tender offer statement on Schedule TO, the offer to purchase, letter of transmittal and other documents that the Company will be filing with the SEC at the SEC’s website at www.sec.gov or from the Company’s information agent for the tender offer The Hackett Group, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Quarter Ended Nine Months Ended September 26 , September 27 , September 26 , September 27 , 2025 2024 2025 2024 Revenue: Revenue before reimbursements $ 72,166 $ 77,949 $ 226,026 $ 229,572 Reimbursements 945 1,828 3,849 5,048 Total revenue 73,111 79,777 229,875 234,620 Costs and expenses: Cost of service: Personnel costs before reimbursable expenses (includes $1,580 and $11,493 and $2,135 and $5,168 of non-cash stock based compensation expense in the three and nine months ended September 26, 2025 and September 27, 2024 , respectively) 42,433 46,417 140,485 137,583 Reimbursable expenses 945 1,828 3,849 5,048 Total cost of service 43,378 48,245 144,334 142,631 Selling, general and administrative costs (includes $4,308 and $13,788 and $1,688 and $4,104 of non-cash stock based compensation expense in the three and nine months ended September 26, 2025 and September 27, 2024 , respectively) 21,162 18,732 67,972 55,046 Legal settlement and related costs - - - 102 Restructuring costs 3,112 - 3,112 - Total costs and operating expenses 67,652 66,977 215,418 197,779 Operating income 5,459 12,800 14,457 36,841 Other expense, net: Interest expense, net (438 ) (368 ) (1,006 ) (1,352 ) Income before income taxes 5,021 12,432 13,451 35,489 Income tax expense 2,474 3,845 6,100 9,423 Net income $ 2,547 $ 8,587 $ 7,351 $ 26,066 Basic net income per common share: Income per common share $ 0.09 $ 0.31 $ 0.27 $ 0.95 Weighted average common shares outstanding 27,288 27,645 27,492 27,561 Diluted net income per common share: Income per common share $ 0.09 $ 0.31 $ 0.26 $ 0.93 Weighted average common and common equivalent shares outstanding 27,615 28,142 28,161 27,920 The Hackett Group, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) September 26 , December 27 , 2025 2024 ASSETS Current assets: Cash $ 13,895 $ 16,366 Accounts receivable and contract assets, net 57,286 57,079 Prepaid expenses and other current assets 9,196 2,901 Total current assets 80,377 76,346 Property, software and equipment, net 23,084 20,343 Other assets 369 350 Intangible assets 3,575 2,312 Goodwill 90,565 89,782 Operating lease right-of-use assets 2,687 2,744 Total assets $ 200,657 $ 191,877 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 4,621 $ 6,503 Accrued expenses and other liabilities 24,537 30,789 Contract liabilities 11,896 11,118 Income tax payable 424 3,753 Operating lease liabilities 1,183 965 Total current liabilities 42,661 53,128 Long-term deferred tax liability, net 11,074 8,464 Long-term debt 43,795 12,734 Operating lease liabilities 1,503 1,977 Total liabilities 99,033 76,303 Shareholders' equity 101,624 115,574 Total liabilities and shareholders' equity $ 200,657 $ 191,877 The Hackett Group, Inc. SEGMENT CONTRIBUTIONS (in thousands) (unaudited) Quarter Ended Nine Months Ended September 26 , September 27 , September 26 , September 27 , 2025 2024 2025 2024 Global S&BT (1): Revenue before reimbursements $ 42,398 $ 43,252 $ 128,651 $ 125,068 Cost of sales 21,440 22,781 66,526 67,800 Gross margin 20,958 20,471 62,125 57,268 Selling, general and administrative costs 7,717 6,378 23,111 20,374 Segment contribution 13,241 14,093 39,014 36,894 Oracle Solutions (2): Revenue before reimbursements $ 16,353 $ 21,838 $ 57,243 $ 65,063 Cost of sales 11,751 14,303 39,377 43,220 Gross margin 4,602 7,535 17,866 21,843 Selling, general and administrative costs 1,921 2,014 6,368 5,693 Segment contribution 2,681 5,521 11,498 16,150 SAP Solutions (3): Revenue before reimbursements $ 13,415 $ 12,859 $ 40,132 $ 39,442 Cost of sales 8,183 7,175 23,035 21,341 Gross margin 5,232 5,684 17,097 18,101 Selling, general and administrative costs 1,569 1,986 5,293 6,267 Segment contribution 3,663 3,698 11,804 11,834 Total Company (4): Total segment contribution 19,585 23,312 62,316 64,878 Items not allocated to segment level (4): Corporate general and administrative expenses 4,292 5,655 15,196 15,745 Non-cash stock based compensation expense 2,694 2,989 8,272 8,438 Stock price award program compensation expense 4,768 602 15,053 602 Acquisition-related cash compensation (reversal) expense (540 ) 41 76 41 Acquisition-related non-cash stock based compensation (reversal) expense (1,574 ) 232 1,956 232 Acquisition-related costs 11 53 398 53 Restructuring costs 3,112 - 3,112 - Legal settlement and related costs - - - 102 Depreciation expense 1,052 940 3,111 2,824 Amortization expense 311 - 685 - Interest expense, net 438 368 1,006 1,352 Income before taxes $ 5,021 $ 12,432 $ 13,451 $ 35,489 (1) Global S&BT includes the results of our North America and International Gen AI Consulting , Implementation and Licensing, Benchmarking and Business Transformation offerings, Executive Advisory, Market Intelligence and IP as-a-Service, OneStream and eProcurement. (2) Oracle Solutions includes the results of our EPM/ERP and AI Enablement practices. (3) SAP Solutions includes the results of our SAP applications and related SAP service offerings. (4) Segment contributions consist 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. Items not allocated to the segment level include corporate general and administrative expenses, non-cash stock based compensation expense, acquisition related cash and non-cash stock based compensation expense, depreciation and amortization expense, legal settlement and related costs, interest expense and foreign currency gains and losses. Corporate general and administrative expenses primarily include costs related to business support functions including accounting and finance, human resources, legal, information technology and office administration. Corporate general and administrative expenses exclude one-time, non-recurring expenses and benefits. The Hackett Group, Inc. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (in thousands, except per share data) (unaudited) Quarter Ended Nine Months Ended September 26 , September 27 , September 26 , September 27 , 2025 2024 2025 2024 GAAP NET INCOME $ 2,547 $ 8,587 $ 7,351 $ 26,066 Adjustments (1): Non-cash stock based compensation expense (2) 2,694 2,989 8,272 8,438 Stock price award program compensation expense (2)(3) 4,768 602 15,053 602 Acquisition-related cash compensation (reversal) expense (4) (540 ) 41 76 41 Acquisition-related non-cash stock based compensation (reversal) expense (4) (1,574 ) 232 1,956 232 Acquisition-related costs 11 53 398 53 Amortization expense 311 - 685 - Restructuring 3,112 - 3,112 - Legal settlement and related costs - - - 102 ADJUSTED NET INCOME BEFORE INCOME TAXES ON ADJUSTMENTS (1) 11,329 12,504 36,903 35,534 Tax effect of adjustments above (5) 1,171 366 4,451 1,822 ADJUSTED NET INCOME (1) $ 10,158 $ 12,138 $ 32,452 $ 33,712 GAAP diluted net income per common share $ 0.09 $ 0.31 $ 0.26 $ 0.93 Adjusted diluted net income per common share (1) $ 0.37 $ 0.43 $ 1.15 $ 1.21 Weighted average common and common equivalent shares outstanding 27,615 28,142 28,161 27,920 (1) The Company provides adjusted earnings results (which excludes non-cash stock based compensation expense, stock price award program compensation expense, acquisition-related cash and non-cash stock based compensation expense, amortization expense, acquisition related costs and legal settlement and related costs and includes a GAAP tax rate) as a complement to results provided in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP results are provided to enhance the users' overall understanding of the Company's current financial performance and its prospects for the future. The Company believes the non-GAAP results provide useful information to both management and investors and by excluding certain expenses that it believes are not indicative of its core operating results. The non-GAAP measures are included to provide investors and management with an alternative method for assessing operating results in a manner that is focused on the performance of its ongoing primary operations and to provide a consistent basis for comparison between quarters. Further, these non-GAAP results are one of the primary indicators management uses for planning and forecasting. The presentation of this additional non-GAAP information should be considered in addition to, and not as a substitute for or superior to, any results prepared in accordance with GAAP. (2) Non-cash stock based compensation expense is accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation. The Company excludes non-cash stock based compensation expense and the related tax effects for the purposes of adjusted net income and adjusted diluted earnings per share. The Company believes that non-GAAP measures of profitability, which exclude non-cash stock based compensation expense, are widely used by investors. (3) The stock price award program compensation expense relates to equity awards that were granted with certain market share price hurdles and service conditions to meet before they are vested. The market price hurdles include twenty consecutive trading days of equal to or greater than $30 , $40 and $50 per share price. As of December 27, 2024 , the first market condition had been met, and although the shares have not vested they are included in the Company's dilutive shares outstanding for the quarter ended September 26, 2025 . As of September 26, 2025 , the second and third market conditions had not been met and as such the shares have not vested and are not included in the Company's basic or dilutive shares outstanding. Non-cash compensation of $4.8 million and $15.1 million was recorded in the third quarter and first nine months of 2025, respectively. (4) The Company incurs cash and non-cash stock based compensation expense for acquisition related consideration that is recognized over time under GAAP. The Company believes excluding these amounts more consistently presents its ongoing results of operations because they are related to acquisitions and not due to normal operating activities. The acquisition-related non-cash stock based compensation expense is also accounted for under Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation. (5) The adjustment for the income tax expense is based on the accounting treatment and income tax rate for the jurisdiction of each item. The impact of all of the non-cash stock based compensation expense was $0.4 million and $0.3 million in the third quarters of 2025 and 2024 and $3.3 million and $1.8 million in first nine months of 2025 and 2024, respectively. The impact of acquisition related cash compensation benefit was $136 thousand and expense of $19 thousand in the third quarter and first nine months of 2025, respectively, and an expense of $25 thousand in both the third quarter and first nine months in 2024. The impact of the legal settlement and related costs was $27 thousand in the first nine months in 2024. The impact of the acquisition related costs and amortization expense was $83 thousand and $0.3 million in the third quarter and first nine months in 2025, respectively, and $14 thousand in both the third quarter and first nine months in 2024. The impact of the restructuring cost was $0.8 million in both the third quarter and first nine months in 2025. The Hackett Group, Inc. SUPPLEMENTAL FINANCIAL DATA (unaudited) Quarter Ended September 26 , June 27 , September 27 , 2025 2025 2024 Segment Total Revenue and Revenue Before Reimbursements (in thousands): Global S&BT: Total revenue $ 42,925 $ 44,205 $ 44,065 Reimbursements 527 594 813 Revenue before reimbursements $ 42,398 $ 43,611 $ 43,252 Oracle Solutions: Total revenue $ 16,504 $ 20,801 $ 22,759 Reimbursements 151 307 921 Revenue before reimbursements $ 16,353 $ 20,494 $ 21,838 SAP Solutions: Total revenue $ 13,682 $ 13,893 $ 12,953 Reimbursements 267 369 94 Revenue before reimbursements $ 13,415 $ 13,524 $ 12,859 Total segment revenue: Total revenue $ 73,111 $ 78,899 $ 79,777 Reimbursements 945 1,270 1,828 Revenue before reimbursements $ 72,166 $ 77,629 $ 77,949 Revenue Concentration: (% of total revenue) Top customer 5 % 7 % 13 % Top 5 customers 17 % 19 % 24 % Top 10 customers 26 % 27 % 33 % Key Metrics and Other Financial Data: Total Company : Consultant headcount 1,317 1,382 1,262 Total headcount 1,599 1,685 1,546 Days sales outstanding (DSO) 71 73 70 Cash provided by operating activities (in thousands) $ 11,395 $ 5,649 $ 10,578 Depreciation (in thousands) $ 1,052 $ 1,034 $ 940 Amortization (in thousands) $ 311 $ 231 $ - Capital expenditures (in thousands) $ 2,405 $ 1,910 $ 1,229 Remaining Plan authorization: Shares purchased (in thousands) 839 177 65 Cost of shares repurchased (in thousands) $ 17,405 $ 4,320 $ 1,737 Average price per share of shares purchased $ 20.73 $ 24.47 $ 26.77 Remaining Plan authorization (in thousands) $ 12,590 $ 16,996 $ 11,146 Shares Purchased to Satisfy Employee Net Vesting Obligations: Shares purchased (in thousands) 268 3 6 Cost of shares purchased (in thousands) $ 5,514 $ 88 $ 145 Average price per share of shares purchased $ 20.61 $ 25.77 $ 25.42 View source version on businesswire.com : https://www.businesswire.com/news/home/20251104201393/en/ Robert A. Ramirez , CFO, 305-375-8005 or [email protected] Source: The Hackett Group

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