Hackett Group Q3 2026: Profit Rises 37% Despite Revenue Dip

Hackett Group posted adjusted diluted EPS of $0.39 for the third quarter of 2026, beating expectations and landing at the high end of the company's own guidance range. Revenue came in at $68.9 million, missing expectations and declining roughly 4.5% from a year earlier.

Operating income rose 37% year over year despite the shrinking top line, driven in large part by a sharp reduction in non-GAAP adjustment items such as stock price award program compensation and restructuring costs. Those savings flowed through to GAAP diluted EPS of $0.14, up from $0.09 in the prior-year period.

Segment results were mixed. SAP Solutions revenue grew to $16.4 million from $13.4 million a year earlier, and Oracle Solutions segment contribution improved to $5.0 million from $2.7 million on lower costs. The drag came from Global S&BT, where revenue fell to $36.6 million from $42.4 million, the primary reason the overall top line retreated.

Looking at the balance sheet, operating cash flow was notably weak at $1.8 million for the quarter, though management guided for a sequential improvement of $15 million to $20 million in Q4, with excess cash directed toward debt repayment or share buybacks. The company had $16.3 million remaining under its share repurchase authorization at quarter-end, having bought back $2.5 million worth of stock during Q3 at an average price of $10.90.

For the fourth quarter, Hackett guided revenue of $68.0 million to $70.0 million and adjusted diluted EPS of $0.39 to $0.41, noting that Q4 will have 6% to 8% fewer available working days than Q3 due to holidays and vacation. CEO Ted Fernandez pointed to the company's AI platforms, XT and AIX, as the engine for expected operating leverage and margin expansion into 2027, saying their expanding use across enterprise transformation and software implementation offerings is beginning to improve sales and delivery productivity.