The Hackett Group (NASDAQ:HCKT) reported second-quarter 2026 revenue before reimbursements of $68.3 million and adjusted diluted earnings per share of $0.34, as the consulting firm continued its transition toward an AI-enabled, platform-led sales and delivery model.
Revenue before reimbursements increased from $67.8 million in the first quarter, though it came in slightly below the company’s guided range, according to Chief Financial Officer Rob Ramirez. Adjusted EPS was at the midpoint of guidance. GAAP net income was $4.4 million, or $0.18 per diluted share, compared with $4.3 million, or $0.17 per share, in the prior quarter.
Platform Strategy and New Engagements
Chairman and CEO Ted Fernandez said Hackett has been shifting from a traditional consulting and implementation model to an AI-enabled approach centered on its proprietary platforms. These include AI XPLR for AI solution ideation, design and build; XT for enterprise transformation; and AIX for software implementation. The platforms incorporate Hackett’s benchmarking, process best-practice intelligence and its solution language model.
Fernandez said the company closed several significant proposals totaling more than $30 million late in the second quarter. He said the projects are expected to ramp during the third quarter, with at least some extending through the end of 2027.
The wins included one OneStream engagement and two Oracle-related engagements, Fernandez said in response to an analyst question. He said the company’s platform capabilities helped it demonstrate both traditional implementation delivery and expanded AI-enabled capabilities.
Hackett plans to release XT version 2, which incorporates a significant portion of AI XPLR, shortly after the call. The company also launched XDA, a data assurance and quality platform intended to support its transformation and software implementation offerings.
Fernandez said clients have become more cautious about stand-alone, AI-first adoption programs because of uncertainty over returns on investment. Instead, he said many clients are incorporating AI initiatives into broader enterprise transformation and application implementation engagements. According to Fernandez, clients are including or extending AI scopes in nearly all new engagements.
Segment Results and Margin Trends
Global S&BT revenue before reimbursements was $35.6 million in the second quarter, down 2% sequentially. Ramirez said clients continued to question the underlying value of AI and remained uncertain about the return on investment from AI-first strategies.
Oracle Solutions revenue before reimbursements totaled $15.3 million, down 1% from the first quarter. SAP Solutions revenue was $17.4 million, up 9% sequentially, primarily reflecting increased software sales volume and associated implementation services.
Adjusted gross margin rose to 44.1% of revenue before reimbursements, from 42.3% in the first quarter. Adjusted EBITDA was $13.9 million, unchanged in percentage terms at 20.3% of revenue before reimbursements.
Ramirez said the company expects additional margin expansion as more projects use its AI-enabled delivery platforms and as Hackett aligns headcount with productivity gains from those tools. The company’s adjusted selling, general and administrative expense was $17.4 million, or 25.5% of revenue before reimbursements, compared with $16.1 million, or 23.7%, in the prior quarter. The increase was attributed primarily to the timing of marketing events and foreign-exchange movements.
Third-Quarter Outlook
For the third quarter, Hackett forecast revenue before reimbursements of $68 million to $70 million and adjusted diluted EPS of $0.37 to $0.39. At the midpoint of the EPS range, the guidance implies approximately 11.8% sequential growth from second-quarter adjusted EPS of $0.34.
The company expects Global S&BT and Oracle Solutions revenue to increase sequentially, while SAP Solutions revenue is projected to decline because of lower value-added reseller software sales. Management said the third quarter will have roughly 2% fewer available working days sequentially due to a U.S. holiday and seasonal vacation time in the U.S. and Europe.
- Expected adjusted gross margin: approximately 46% to 47% of revenue before reimbursements.
- Expected adjusted EBITDA margin: 21.5% to 22.5%.
- Expected adjusted SG&A and interest expense: approximately $19 million.
- Expected AI transition charge: approximately $1 million, primarily for severance related to headcount reductions.
Hackett said the transition charge will be excluded from its non-GAAP results.
Cash Flow, Capital Returns and Partnerships
Cash balances increased to $14.2 million at the end of the second quarter from $6.1 million at the end of the first quarter. Operating cash flow was $15.2 million, driven primarily by net income adjusted for non-cash items and lower accounts receivable. The company reduced its net debt position by $6.1 million during the quarter while also repurchasing shares and paying dividends.
Hackett repurchased 377,000 shares at an average price of $10.58 per share, for approximately $4 million. It had $18.1 million remaining under its stock repurchase authorization. The board declared a quarterly dividend of $0.12 per share, payable Oct. 2 to shareholders of record Sept. 18.
Total debt outstanding was $81 million at quarter-end. Subsequent to the quarter, the company amended and restated its credit facility, extending its maturity and increasing borrowing capacity to $125 million.
On partnerships, Fernandez said IBM had deferred joint go-to-market activity after the companies launched a global collaboration in March. He said Hackett was continuing to build its channel strategy through ServiceNow, TCS, Genpact and other partners. The ServiceNow alliance began by targeting 15 joint clients, while Hackett said it was closing a meaningful engagement with TCS and pursuing another. A Genpact initiative was just beginning, with the companies scheduled to review an initial client list.
About The Hackett Group (NASDAQ:HCKT)
The Hackett Group is a global strategic advisory firm specializing in business transformation, benchmarking and research. Leveraging a proprietary data repository and the Hackett Methodology®, the company helps organizations optimize performance across enterprise functions. Its advisory services span digital transformation, process optimization and operational excellence, enabling clients to identify best practices, streamline workflows and achieve sustainable cost savings.
Through detailed benchmarking studies and industry research, The Hackett Group delivers actionable insights into finance, procurement, human resources, information technology and supply chain management.
