The Hackett Group, Inc.

What they do

Hackett delivers Gen AI-enabled enterprise transformation services across front, mid and back office areas, including Oracle, SAP, OneStream and eProcurement (Coupa in the 10-Q) implementation offerings. Its advisory work is grounded in benchmarking IP delivered through its Quantum Leap platform and Digital Transformation Platform, and it has completed over 28,400 benchmarking and performance studies. In early 2024 it launched the AI XPLR assessment platform, expanded with ZBrain from the LeewayHertz acquisition.

Revenue drivers

• Gen AI-enabled transformation consulting and implementation — Core service line across front, mid and back office, including Oracle, SAP, OneStream and eProcurement implementation offerings; the company describes itself as a Gen AI strategic consulting and digital transformation firm, making this the principal revenue source.
• Executive advisory and benchmarking IP — Delivered through the Quantum Leap platform and Hackett DTP, built on benchmarking metrics and best-practices content from studies covering 97% of the Dow Jones Industrials, 90% of the Fortune 100, 68% of the DAX 40 and 53% of the FTSE 100.
• AI XPLR and ZBrain platform offerings — AI assessment platform launched in early 2024 and expanded via ZBrain, acquired with LeewayHertz; management calls these capabilities highly differentiating and expects them to drive competition in Gen AI-related consulting and solutions.
• Acquired businesses (LeewayHertz, Spend Matters) — Named in filings as acquisitions that must be integrated; no separate revenue figures for these units are disclosed in the excerpts provided.

Recent performance

Second quarter 2026 total revenue was $69.3 million and revenue before reimbursements was $68.3 million, versus $78.9 million and $77.6 million in the prior-year quarter. GAAP diluted EPS was $0.18 versus $0.06 a year earlier, and adjusted diluted EPS was $0.34, at the mid-point of guidance, versus $0.38. Cash provided by operations was $15.2 million, enabling a $6.1 million net debt reduction, $4.0 million of buybacks and $3.0 million of dividends. Cash balances were $14.2 million as of June 26, 2026, with $81.0 million outstanding on the credit facility. Full-year 2025 revenue was $305.6 million with net income of $12.9 million and diluted EPS of $0.46, down from $313.9 million, $29.6 million and $1.05 in 2024.

Strategy

Management is transitioning Hackett to a global IP platform-based Gen AI strategic consulting model, aiming to increase annual recurring revenues and recurring licensing revenues. It is commercializing AI XPLR, launched in early 2024, and ZBrain from the LeewayHertz acquisition, and cites over $30 million of recent platform-led wins as evidence of demand for AI-enabled transformation. The company continues to pursue acquisitions (LeewayHertz, Spend Matters) and joint ventures, and on August 3, 2026 amended and restated its credit facility to extend maturity and raise borrowing capacity to $125 million. Capital returns remain part of the plan, with $18.1 million available under the share repurchase program and a $0.12 quarterly dividend declared for October 2, 2026 payment.

Risks

• Strategy transition execution — The company states it may not successfully execute its transition to a global IP platform-based Gen AI strategic consulting firm, and the timing and extent of benefits from the Gen AI strategy are uncertain.
• AI initiative and competition risk — Hackett faces significant competition in AI, an evolving regulatory landscape, and rapid technology change; competitors may incorporate AI more successfully, and AI outputs may be incomplete, biased or flawed.
• Macroeconomic and client demand sensitivity — Revenue depends on business confidence and economic conditions; deterioration from inflation, high interest rates, tariffs, trade barriers or geopolitical events such as Russia/Ukraine and the Middle East could reduce client demand and cause project delays or cancellations.
• Acquisition and joint venture integration — The company cites its ability to effectively integrate acquisitions, including LeewayHertz and Spend Matters, and to manage joint ventures and cooperate with joint venture partners as risk factors.

Outlook

For the third quarter of 2026, management guides revenue before reimbursements to $68.0 million to $70.0 million and adjusted diluted EPS to $0.37 to $0.39, assuming a 26.5% GAAP effective tax rate. CEO Ted A. Fernandez called the third-quarter outlook a potential operational and financial inflection point, citing over $30 million of recent platform-led wins and expected sequential revenue growth and year-over-year adjusted EPS growth. The company also extended and enlarged its credit facility to $125 million and declared a $0.12 third-quarter dividend.