Oct 26, 2026 earnings call — Technology and consulting revenue acceleration
Q3 revenue $357.8 million increased 7.5% year-over-year.
Revenue $0.4B (est $0.4B) · EPS $0.78 (est $0.76) · Next-quarter revenue outlook $0.4B–$0.4B
Key quotes
"Demand is strengthening across our service portfolio with clients increasingly open to discussing new opportunities."
"During the third quarter, our Consulting Solutions business achieved record levels of new contract award value and converted the highest percentage of pipeline opportunities in its history."
"Our average bill rate in Q3 was $91 per hour."
Analyst Q&A 5
Demand pickup vs gaining market share
Q (Mark Marcon · Baird): He asked whether the quarter was driven mainly by a broad increase in demand or by FolioObs taking share, and asked about the role of offshore and higher-margin solutions. He also asked about gross margins, the mix shift to offshore/solutions vs domestic staff, and whether margins can keep rising; finally he asked if free cash flow should improve in Q4.
A: Management said demand is broadly improving, helped by AI-related spending (their AI pipelines are up 20% year-over-year) and by clients executing deferred technology projects. They said they are gaining both market share and client share, and that consulting and offshore work carry higher margins (consulting margins 400 to 600 basis points higher). On cash, they expect Q4 to be a cash-flow positive quarter and noted operating cash flows year-to-date through Q3 were positive.
"I think our AI and AI-related pipelines are up something like 20% year-over-year." — David Kelly (COO)
Recent demand trend and hiring moves
Q (Trevor Romeo · William Blair): He asked if the recent strength (since July) is like a normal year-end build or stronger, and asked what hires they are adding now versus using existing capacity.
A: Management said July was unusually low (summer) and they saw a build in August, September and October that feels like a normal healthy environment with talent shortages and steady client demand. They said they are selectively adding headcount in markets with the strongest growth and adding consulting capabilities, while also harvesting existing capacity rather than making a large hiring surge.
"The strength that we're seeing here is reflective of a very good environment." — David Kelly (COO)
Workday timing and margin outlook
Q (Kartik Mehta · Northcoast): He asked whether SG&A will grow slower than revenue into 2027, and whether margin improvement is expected in 2027 or mostly later after Workday implementation. He also asked when consulting solutions activity will convert to revenue.
A: They said many Workday benefits start toward the tail end of 2027 and ramp more fully into 2028, and they expect SG&A to increase at a lower rate than revenue in 2027. They added the consulting business has been growing at double-digit rates, record activity is building momentum, and some deals that were a quarter or two in diligence are coming into the pipeline in the next quarter.
"a lot of the benefits that we expect from leveraging the Workday products are going to start towards the tail end of 2027, and then we'll ramp more fully to the intended benefits as we work into 2028." — Jeffrey Hackman (CFO)
Why consulting and staffing outperform peers
Q (Joshua Chan · UBS): He asked what is driving their commercial success in consulting and staff augmentation versus peers. He also asked what the guidance assumes for December momentum and the holidays.
A: Management said strong execution by a focused team, a clear strategic model, and focus on a narrow set of in-demand skills and on growing client share explain their outperformance. They also noted higher conversions and more counteroffers, and said they have visibility into Q4 and incorporated recent trends into the guide (technology midpoint growth around 3%).
"Our model is very focused on a pretty narrow group of skill sets for which there is consistent demand." — David Kelly (COO)
Path to 8% EBIT and offshore impact
Q (Tobey Sommer · Truist): He asked whether margin expansion to reach 8% EBIT will come more from gross margin or G&A leverage. He also asked if the F&A business can similarly use offshore and whether offshore assignment length or visibility is changing.
A: They said margin expansion will be driven more by a strategic mix shift—more consulting solutions and nearshore/offshore work, which have higher Flex/gross margins—and by scale and Workday benefits (the latter a step function starting end of 2027). For F&A, offshore leverage is much smaller because those are shorter, smaller assignments and not BPO work. On assignment length and visibility, consulting/offshore work tends to be longer and visibility has been stable or slightly elongating but not meaningfully so.
"Each one of those has significantly higher overall Flex margins that we have been driving, and I would continue to expect us to drive that into the future." — Jeffrey Hackman (CFO)