Good afternoon, ladies and gentlemen, and welcome to the Resources Connection, Inc. conference call. [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I would like to remind everyone that management will be commenting on results for the first quarter ended August 30, 2025. They will also refer to certain non-GAAP financial measures. An explanation and reconciliation of these measures to the most comparable GAAP financial measures are included in the press release issued today. Today's press release can be viewed in the Investor Relations section of RGP's website and filed today with the SEC. Also during this call, management may make forward-looking statements regarding plans, initiatives and strategies that the anticipated financial performance of the company. Such statements are predictions and actual events or results may differ materially. Please see the Risk Factors section in RGP's report on Form 10-K for the year ended May 31, 2025, for a discussion of risks, uncertainties and other factors that may cause the company's business, results of operations and financial condition to differ materially from what is expressed or implied by forward-looking statements made during this call. I'll now turn the call over to RGP's CEO, Kate Duchene.

Thank you, operator, and welcome, everyone, to RGP's Q1 earnings call. We continue to make progress in evolving the company to become more integrated, diversified and resilient. While the global macro environment remains uncertain, disrupted and slow moving for professional services, we are working aggressively to evolve the business to be well positioned for the upturn. Our activities are producing meaningful progress, which I'll highlight. In Q1, we delivered results better than our outlook for all measures. Revenue was above our outlook range. Gross margin was significantly better and SG&A also came in better than our outlook. As a result, we achieved more profit than expected by a significant amount. While we have more work to do, we have a clear plan to delivery and enhanced value creation. Several parts of the business are growing, and I want to highlight those. Europe and Asia Pac achieved a solid quarter, delivering 5% growth and have built a strong pipeline for Q2. Japan and India delivered growth in Q1, again with solid momentum moving into Q2. Revenue from our top 10 clients also grew year-over-year, reflecting the global transformation and transaction work happening in the very large company client segment. Countsy grew in Q1 and is busy with strong proposal activity in Q2. Bhadresh and Jenn will share more details about our progress, especially around double-digit bill rate improvements in our Consulting segment, increasing deal size and pipeline momentum. These are the indicators that we closely monitor to track our continued progress against our strategic goals. We are engaged in our transformation to deliver more for our clients and colleagues while improving return for our shareholders. We are transforming purposefully to increase our addressable market while becoming known for a focused set of solutions. We've taken the company from a professional staffing…

Thank you, Kate, and good afternoon, everyone. We're pleased to report another quarter of progress in advancing our transformation strategy, positioning RGP at the intersection of professional staffing, consulting and outsourced services. Our flexible client-centric offerings continue to resonate with clients, supporting both their transformation and operational priorities. In the first quarter, we delivered results ahead of expectations on both revenue and gross margin. This performance reflects the ongoing stabilization of our operating model, stronger cross-practice collaboration, continued focus on value-based pricing within consulting and disciplined cost management. Together, these actions are driving stronger bottom line performance, which Jenn will cover in more detail shortly. Despite the still choppy demand environment that Kate referred to, our pipeline returned to growth during the quarter. Demand is strengthening across CFO advisory and digital transformation, directly aligned to client priorities around cost efficiency and process automation. This demand underscores the alignment between our sales organization and practice leaders and our positioning at the intersection of staffing, consulting and outsourced services. Europe and Asia Pac as well as outsourced services continue to deliver year-over-year growth. On-demand is stabilizing and consulting is building pipeline while achieving higher bill rates. We are making targeted investments in leadership and services to further accelerate this momentum. With that, let me turn to our performance by segment. Our Consulting segment revenue declined year-over-year, but we did achieve revenue growth in a few areas, including ServiceNow, project and change management and our federal digital offerings. Additionally, we saw a meaningful improvement in bill rates and utilization compared to same quarter last year. And importantly, we're achieving notably higher bill rate increases on new projects. This validates client demand for our specialized solutions, supports our value-based pricing initiative and contributed to the gross margin improvement year-over-year. In addition, stronger collaboration between…

Thank you, Bhadresh, and good afternoon, everyone. We delivered strong performance this quarter against our expectations. Revenue of $120.2 million, gross margin of 39.5% and SG&A expense of $44.5 million, all beat the favorable end of our outlook ranges. We also delivered improved adjusted EBITDA of $3.1 million or a 2.5% adjusted EBITDA margin. We're pleased to see the return to growth in revenue for both our Europe and Asia Pac segment and Outsourced Services segment with 5% and 4% growth over the prior year quarter. Revenue within the On-Demand and Consulting segments continued to be soft as the operating environment in the U.S. remains choppy. This quarter, our continued focus on the number and quality of client outreaches and meetings, pipeline management and cross-sell collaboration have yielded growth in the pipeline. Importantly, we believe the positive progress in our key operating metrics will lead to tangible improvement in revenue over time. Turning to profitability metrics. We achieved strong gross margin for the quarter at 39.5%, 300 basis points higher than the prior year quarter and significantly better than the high end of our outlook range. Contributing to the strong gross margin are: one, continued improvement in our average bill rate and expansion of the pay bill spread; two, significant reduction in employee benefit costs, including health care costs, holiday and paid time off; and three, strategic management of our bench consultants utilization. Enterprise-wide average bill rate increased to $120 constant currency from $118 a year ago. The improvement came despite the revenue mix weighing more towards the Asia Pac region. And of note, we saw an 11% improvement in average bill rate in consulting from $144 to $160. As we continue to execute our pricing strategy and move up the value chain to deliver higher value, larger-scale engagements, we…

[Operator Instructions] Our first question comes from Jessica [indiscernible] with Northcoast Research.

First, I would like to congratulate you on such a positive first quarter, amazing results. And second, I have a question for you and then one brief follow-up. To start, what would you say regarding the trend in pricing? Are you seeing pricing pressure in any particular business?

Yes. Jessica, this is Bhadresh. From a trending perspective, on our staffing business, we have been able to keep our rates pretty steady. However, on the consulting side, while we do see pricing pressures, the value we're bringing is warranting for us to be able to increase our rates, especially on net new projects that we're selling to our clients, which ultimately is bringing a different value to our clients than what we have historically from a professional staffing perspective because we're bringing thought leadership to those projects. So there are pricing pressures for sure. Roles like operational accounting and things like that face a lot more pricing pressures from our space, but we're also pivoting away from those roles as AI and automation is taking over, and we're focused on more high-value roles, especially around ERP, data, supply chain, digital transformation, really aligned to the strategy that we've laid forth for our business.

All right. Perfect. That's very helpful. And then as for the follow-up question, I know that you guys are having success with cross-selling. Looking at your pipeline now, how much of the pipeline would you attribute to cross-selling?

I mean we're still building that pipeline, but the good news is that we continue to increase million-plus deals into our pipeline. And we anticipate that with the motions we're playing across both our sales teams and our practice leaders and consulting that, that pipeline to increase and then for us to see the conversion as it relates to that increase.

Okay. Awesome. I appreciate it. Another congratulations to the company on the great first quarter.

Thank you, Jessica.

[Operator Instructions] Our next question comes from Mark Marcon with Robert W. Baird.

I was just wondering, with regards to the revenue guide that you gave us, Jenn, can you break that out between the segments? And specifically, what are you seeing for consulting and on-demand talent?

Yes. Mark, sure. The revenue guide for Q2, we're expecting across our business units, our Europe and Asia Pac region will continue to show strength as they did in Q1. So we expect continued strength in that. If not, it may -- it might even get better than Q1. And in the other 2 segments, on-demand and consulting, the trend is going to be more or less the same. It really -- it depends on -- especially on the consulting side, some of the deals in the pipeline in late stage and the timing of conversion of that. So I would say across all of our business units, performance in Q2 will be somewhat consistent with what you're seeing in Q1.

Yes, Mark, it's Kate. Can I just add, I think it really depends on how quickly we can get some of this pipeline, especially the improving pipeline in CFO advisory we do have, as Bhadresh shared a new leader who is very dynamic and has a very clear plan to improve our performance there. So he has shared that there's a lot of momentum right now. It just depends on how quickly I think we can move that through the pipeline.

Great. And then just with regards to on-demand and consulting within the U.S., any regional differences that you're seeing either from your West Coast operations or Chicago or the Tri-State area?

Yes. I mean we are -- we are seeing a lot of demand in the West Coast and the Southeast as well. And I think it's really attributed to the teams and the tenure of the teams there. Overall, in the market, we're seeing consistent kind of demand across our core offerings. We've aligned in CFO advisory and digital transformation for a reason because those are the 2 agendas that are moving in client spaces. And we're balancing this across the tenure and the leadership that we have in other markets and really building pipeline and work across those markets as well.

Great. And your new leader where is he going to be based.

He's based in Washington, D.C., Northern Virginia, actually.

Our next question comes from Judson Lindley with JPMorgan.

Maybe just the first one on this quarter's revenue. I know same-day constant currency revenues were down 13.9%. So could you maybe break out for me the delta between same-day constant currency and reported revenue growth? How much of that was from FX? And how much was the days impact?

Yes. More days impact, business day impact. There's some currency impact, but it's probably about 1/3 of the business day impact. Most of it is, as you know, the first quarter, we have -- I think we had one less day in business days this quarter compared to last year.

Okay. Great. And then maybe as a follow-up, if there was any acquired revenue in the quarter? And if you could, maybe those same 3 components for the second quarter guide?

Yes. In the first quarter year-over-year, there's very little acquired. As you know, we acquired Reference Point last year in the first quarter, a month into the first quarter last year. So the inorganic piece is minimal.

And then for the second quarter, if you could?

Yes. For the second quarter, comparing year-over-year at the top end of the guidance range, it's a 16% decline on a same-day constant currency basis.

Our next question comes from Joe Gomes with NOBLE Capital.

Just a quick question. When you talk to clients or potential clients what are they saying in terms of their general appetite to move forward and spend? And how has that changed over the past year if it's changed?

I would say it hasn't changed much, Joe. I think we're still in a choppy environment. As we've said before, I expect there's probably more of the same for the next couple of quarters. Every time I think people feel like we're getting more stability and the foundation is getting stable, then it seems like something else happens. As Jenn said, we don't have a lot of exposure to federal government or federal work, but it feels destabilizing when there's that level of uncertainty. And so we've reflected that in our outlook because we're just uncertain. As I said before, there is work that's progressing. I mean there's some really interesting work we're talking to clients about right now. It just depends on how quickly we can progress that work through our pipeline. I'm very impressed with some of the new talent we've brought into the organization, especially around whether you call it finance 4.0, which includes ERP, cloud migration, digital finance, automation, AI, data work, everything that's happening there. That work is progressing. I mean it's happening in our client base right now. So again, I think a lot of it is timing and making sure we're positioned and having the right conversations with clients.

Okay. Great. And one follow-up. In the summer, you guys did a Board refresh and added 2 new members to the Board. I was wondering what, if anything, they've brought to the Board here that is kind of new or different ways of thinking or different approaches that would be attributable to them.

Yes. So let me speak to that. We have welcomed, I think, 2 strong Board members. One brings more of a I would say, private equity lens, if you will, to what we're doing, especially as we look at optimizing our bottom line performance, given that we all recognize the macro environment is difficult and difficult really across professional services. So that has been, I think, instructive for us to look at things with a fresh set of eyes. Our other Board member brings a lot of operating experience and operating experience through transformation. And I think what we're learning from his experience is the importance of the behavioral changes that I've talked about, making sure that we're getting incentive comp right, making sure that we are creating collaborative teams to hunt and farm together and not creating silos or competitive mindset. So competitive -- by that, I mean against each other, not competitive to the broader marketplace. So I think they're both good adds to our Board and the work that we're undertaking right now.

I would now like to turn the call back over to Kate Duchene for any closing remarks.

Yes. Thank you. Thank you, everyone, for joining us today. I want to highlight that we will be participating in the NOBLE Capital Markets Emerging Growth Virtual Equity Conference tomorrow. So we hope to engage further with investors then. We'll also look forward to updating you on our strategic progress and results following Q2 in early January. Thanks again, everyone. Good night.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.