A：RGP's expectations for the fourth quarter included aligned results with the outlook provided for revenue, gross margin, and run rate SG&A expense.

A：Revenue for RGP's North American markets, served by the on Demand talent consulting and outsourced services segments, performed as expected compared to the outlook provided. It was flat on a GAAP basis compared to the third quarter but showed a modest decline when adjusted for the number of business days and currency fluctuations.

A：The customer survey RGP undertook revealed important perspectives, such as RGP being favored over other execution and staffing-focused competitors in terms of being a 'trusted partnership.' It also highlighted speed of execution, flexibility of delivery model, and the quality of RGP's people and services as strengths. Additionally, RGP's strong net promoter score indicated clients' intent to increase or maintain their level of engagement.

A：RGP's strategic priorities include refocusing the on demand talent segment offerings, scaling the consulting segment, pursuing AI as both a client service and internal opportunity, and streamlining operations to align the cost structure with revenue levels. Investments were made to support these priorities, including adding new professionals to the sales team and additional senior professionals to the consulting segment.

A：RGP views AI as a fundamental strategic priority that will change how work is done across various sectors, creating new opportunities for clients and the business itself. RGP's approach is practical and disciplined, using AI to improve productivity and deliver solutions that address clients' highest value business challenges. The company aims to combine AI with deep functional expertise and strong governance, and is focusing on simplifying operations and aligning the cost structure with current revenue levels.

A：RGP's performance in the fourth quarter was largely in line with expectations, with consolidated revenue and run rate SG&A expense within outlook ranges, and gross margin beating the high end of the range. Adjusted EBITDA for the quarter was negative $6 million.

A：Gross margin for the fourth quarter was 37.6%, compared to 40.2% in the prior year, primarily reflecting less favorable leverage of indirect costs of services and lower consultant utilization. The average bill rate was $120 on a constant currency basis compared to $125 a year ago, with the growth reflecting the geographic mix of revenue, particularly a greater contribution from the Asia Pacific region. The consulting average bill rate grew to $163 from $169 in Europe and Asia Pacific, while the overall average bill rate was $67 compared to $64 last year on a constant currency basis.

A：Revenue comparisons for all year over year were adjusted for business days and currency impact, and segment adjusted EBITDA excludes certain share corporate costs. Talent segment revenue was down 18% to $40.4 million, segment adjusted EBITDA was $3.1 million or a 7.6% margin, compared to $6.4 million or a 12.1% margin in the prior year. Consulting segment revenue was down 23% to $36.6 million, with segment adjusted EBITDA at $2.3 million or a 6.3% margin, compared to $8.3 million or 16.3% margin in the prior year. Europe and Asia Pacific segment revenue was down 14% to $17.1 million, with segment adjusted EBITDA at $0.4 million or 2.1% margin, compared to $1.9 million or 9% margin in the prior year. Alco services segment revenue was down 1.6% to $1.3 million, with segment adjusted EBITDA at $2.1 million or a 20.2% margin, compared to $3.1 million or 27.8% in the prior year.

A：The company ended the quarter with $82.4 million of cash and cash equivalents and no outstanding debt. The quarterly dividend payment totaled $2.3 million, representing a 6% annualized yield based on the stock price at the end of the fourth quarter. The company also announced that it had replaced its previous credit facility with a new revolving credit facility designed to provide increased flexibility within its covenant structure.

A：The company expects first quarter revenue to be relatively consistent with fourth quarter levels, adjusted for normal summer seasonality and the impact of the Citrix divestiture, in the range of $97 to $102 million. The expected gross margin is between 37% to 38%, reflecting typical seasonal dynamics. Run rate, S&A expense is expected to be in the range of $41 to $43 million, reflecting targeted reinvestments in the business. Non-operating and non-cash expenses are expected to range from $2 to $3 million, consisting primarily of non-cash stock compensation expense and amortization of capitalized system transformation costs.

A：The planned cost reductions involve further occupancy cost reductions and the use of AI to increase efficiency, which will require more work and time. The company expects non-run rate charges in fiscal 27 to normalize around a guided range of 2 to 3 million of non-membrane non-cash charges for a few months.

A：The purpose of the new credit facility is to provide more flexibility with cash usage, particularly for restricted cash payments related to shareholder returns such as dividends and share repurchases. The facility has typical covenants related to investments, loans, and indebtedness and two main financial covenants: a fixed charge coverage ratio and a minimum liquidity ratio. The fixed charge coverage ratio is a springing covenant, which is not expected to come into play.

A：The new hires, Sha Lombard and Jessica Block, have been working on AI integration with backgrounds relevant to the firm's AI labs. They are raising general awareness and knowledge of AI among employees and collaborating with clients to infuse AI into their data preparation and governance processes. The company sees a lot of opportunity for both internal and Praha-related advancements and believes there is a temporary opportunity for consulting due to confusion in the market.

A：The current utilization rate for salary consultants is in the low 60s. The target utilization rate for full-time delivery consultants is generally above 75% to 80%.

A：Increasing the utilization rate to the target range of above 75% to 80% would likely result in a gross margin impact of approximately 200 plus basis points.

A：The conversion timeline in the consulting pipeline has generally gotten longer, especially after the integration of the consulting segments. Although not lengthening every quarter, the sales cycle has increased as the company focuses more on selling consulting work.

A：The company expects to achieve incremental margins of 6 to 8% once revenue normalizes above 500 million.