Hackett Group Inc (HCKT) 2023 Q4 法說會逐字稿

Welcome to The Hackett Group Fourth Quarter Earnings Conference Call. (Operator Instructions) Please be advised the conference is being recorded.

歡迎參加哈克特集團第四季財報電話會議。 （操作員說明）請注意，會議正在錄製中。

Hosting tonight's call are Mr. Ted Fernandez, Chairman and CEO; and Mr. Rob Ramirez, Chief Financial Officer. Mr. Ramirez, you may begin.

主持今晚電話會議的是董事長兼執行長 Ted Fernandez 先生；財務長 Rob Ramirez 先生。拉米雷斯先生，您可以開始了。

Thank you, operator.

謝謝你，接線生。

Good afternoon, everyone, and thank you for joining us to discuss The Hackett Group's Fourth Quarter 2023 results. Speaking on the call today and here to answer your questions are Ted Fernandez, Chairman and CEO of The Hackett Group; and myself, Rob Ramirez, Chief Financial Officer.

大家下午好，感謝您加入我們討論 Hackett Group 2023 年第四季的業績。 The Hackett Group 董事長兼執行長 Ted Fernandez 今天在電話會議上發言並回答大家的問題；還有我本人，財務長羅布‧拉米雷斯 (Rob Ramirez)。

A press announcement was released over the wires at 4:05 p.m. Eastern Time. For a copy of the release, please visit our website at www.thehackettgroup.com. We will also place any additional financial or statistical data discussed on this call that is not contained in the release on the Investor Relations page of our website.

下午 4 點 05 分透過電報發布了新聞公告。東部時間。如需該新聞稿的副本，請造訪我們的網站：www.thehackettgroup.com。我們還將把本次電話會議中討論的未包含在我們網站的投資者關係頁面上的新聞稿中討論的任何其他財務或統計數據。

Before we begin, I would like to remind you that in the following comments and in the question-and-answer session, we will be making statements about expected future results, which may be forward-looking statements for the purposes of the federal securities laws. These statements relate to our current expectations, estimates and projections and are not a guarantee of future performance. They involve risks, uncertainties and assumptions that are difficult to predict and which may not be accurate. Actual results may vary. These forward-looking statements should be considered only in conjunction with the detailed information, particularly the risk factors contained in our SEC filings.

在我們開始之前，我想提醒您，在以下評論和問答環節中，我們將做出有關預期未來結果的聲明，這些聲明可能是聯邦證券法所規定的前瞻性聲明。這些陳述與我們目前的預期、估計和預測有關，並非對未來績效的保證。它們涉及難以預測且可能不準確的風險、不確定性和假設。實際結果可能有所不同。這些前瞻性陳述應僅與詳細資訊結合起來考慮，特別是我們向 SEC 提交的文件中包含的風險因素。

At this point, I would like to turn it over to Ted.

此時，我想將其交給 Ted。

Thank you, Rob, and welcome, everyone, to our fourth quarter earnings call.

謝謝你，羅布，歡迎大家參加我們的第四季財報電話會議。

As we normally do, I will open the call with some overview comments on the quarter. I will then turn it back over to Rob to comment on detailed operating results, cash flow as well as comment on outlook. We will then review our market and strategy-related comments, after which we will open it up to Q&A.

正如我們通常所做的那樣，我將在電話會議開始時對本季進行一些概述評論。然後我會將其轉回給 Rob，以評論詳細的營運表現、現金流以及對前景的評論。然後我們將審查與市場和策略相關的評論，之後我們將開放問答。

This afternoon, we reported total revenues of $72.4 million and revenues before reimbursement of $71.2 million, which was above the high end of our guidance and adjusted earnings per share of $0.39, which was also above the high end of our guidance. Our results were driven by the performance of our Oracle Solutions segment, which was up strongly. This is consistent with the momentum that we have experienced in that segment since the second quarter. A new important development for the segment is the notable increase in demand that we're experiencing in our historically strong Enterprise Performance Management offering.

今天下午，我們公佈的總收入為 7,240 萬美元，報銷前收入為 7,120 萬美元，高於我們指導的上限，調整後每股收益為 0.39 美元，也高於我們指導的上限。我們的業績是由 Oracle 解決方案部門的業績推動的，該部門的業績強勁增長。這與我們自第二季度以來在該領域所經歷的勢頭一致。該領域的一個新的重要發展是我們對歷史上強大的企業績效管理產品的需求顯著增加。

Our global S&BT segment was up when compared to last year. Although the segment was impacted by market conditions, we continue to see an increased interest in Gen AI initiatives. More importantly, our recently launched Gen AI assessment platform, AI Explorer, is receiving favorable feedback. It has led to a significant number of new client wins, enabling us to showcase our unique ability to assess readiness and identify organizational transformation opportunities.

與去年相比，我們的全球 S&BT 業務有所成長。儘管該細分市場受到市場狀況的影響，但我們仍然看到人們對 Gen AI 計劃的興趣不斷增加。更重要的是，我們最近推出的Gen AI評估平台AI Explorer得到了很好的回饋。它贏得了大量新客戶，使我們能夠展示我們評估準備和識別組織轉型機會的獨特能力。

We are leveraging our rapidly growing use case repository to establish Gen AI road maps with related benefit case analysis using our highly recognized benchmark data base. The rapidly emerging Gen AI interest is creating an entirely new way to engage clients broadly and strategically. AI Explorer is creating a unique opportunity to expand our trusted performance improvement access to become strategic architects of our clients' Gen AI journey.

我們正在利用我們快速成長的用例儲存庫，使用我們高度認可的基準資料庫來建立 Gen AI 路線圖以及相關的效益案例分析。快速興起的新一代人工智慧興趣正在創造一種全新的方式來廣泛、策略性地吸引客戶。 AI Explorer 正在創造一個獨特的機會來擴展我們值得信賴的效能改進途徑，成為客戶 Gen AI 之旅的策略架構師。

Our SAP Solutions segment continued its solid performance, but was down on a year-over-year basis as the sales investments we made during the year did not start to generate revenues until the end of the year. However, this should benefit the first half of 2024. We also continue to aggressively invest in our growing -- in growing our IP-based programs. We are enhancing the product architecture and pricing of our existing executive advisory programs resulting in a more powerful combination of highly focused IP and access to expert practitioners, emphasizing our advisor expertise and applied knowledge research. All of our executive advisory programs are now delivered through our new member platform, Hackett Connect, which fully launched in October. This new state-of-the-art platform allows all of our existing and new members to avail themselves to our experts, research, benchmarking metrics as well as our best practices IP.

我們的 SAP 解決方案部門持續保持穩健的業績，但年比有所下降，因為我們年內進行的銷售投資直到年底才開始產生收入。然而，這應該會使 2024 年上半年受益。我們也將繼續積極投資於我們的發展——發展我們基於智慧財產權的項目。我們正在增強現有執行諮詢計劃的產品架構和定價，從而將高度集中的知識產權與專家從業人員的聯繫更加強大地結合起來，強調我們顧問的專業知識和應用知識研究。我們所有的執行諮詢計劃現在都透過我們的新會員平台 Hackett Connect 提供，該平台於 10 月全面推出。這個新的最先進的平台使我們所有現有的和新的會員都可以利用我們的專家、研究、基準測試指標以及我們的最佳實踐知識產權。

While our pipeline for these offerings continues to increase, our conversion rates were lower than what we expected during the year. We believe the lower conversion rates were primarily due to the large number of new hires during the year and their lack of familiarity with our offering. In 2023, annual contract value grew 2%, but we expect all of the foundational work we did in 2023 to lead to increasing growth in 2024.

雖然我們的這些產品管道不斷增加，但我們的轉換率低於我們今年的預期。我們認為，較低的轉換率主要是由於年內新員工數量較多且他們對我們的產品不熟悉。 2023 年，年度合約價值成長 2%，但我們預計 2023 年所做的所有基礎工作將在 2024 年實現成長。

On the balance sheet side, in the short term, you could expect us to use our strong cash flow from operations to continue to pay down our outstanding balance of our credit facility. Longer term, we plan to use our balance sheet by using our current credit facility to fund acquisitions and to buy back stock while continuing to invest in our business.

在資產負債表方面，短期內，您可以期望我們利用強勁的營運現金流來繼續償還信貸額度的未償餘額。從長遠來看，我們計劃利用我們目前的信貸額度來利用我們的資產負債表為收購提供資金並回購股票，同時繼續投資我們的業務。

With that said, let me ask Rob to provide details on our operating results, cash flow and also comment on outlook. I will make additional comments on strategy and market conditions following Rob's comments. Rob?

話雖如此，我請羅布提供有關我們經營業績、現金流的詳細資訊以及對前景的評論。我將根據 Rob 的評論對策略和市場狀況發表補充評論。搶？

Thank you, Ted.

謝謝你，泰德。

As I typically do, I'll cover the following topics during this portion of the call. I'll cover an overview of our 2023 fourth quarter results, along with an overview of related key operating statistics. I'll also cover an overview of our cash flow activities during the quarter, and I'll conclude with a discussion on our financial outlook for the first quarter of 2024.

正如我通常所做的那樣，我將在電話會議的這一部分討論以下主題。我將概述我們 2023 年第四季的業績，以及相關關​​鍵營運統計數據的概述。我還將概述本季我們的現金流活動，最後我將討論 2024 年第一季的財務前景。

For purposes of this call, I will comment separately regarding the revenues of our global S&BT segment, our Oracle Solutions segment, our SAP Solutions segment and the total company. Our global S&BT segment includes the results of our North America and international IPaaS and benchmark offerings, our executive advisory programs, our business transformation and our OneStream and group offerings.

出於本次電話會議的目的，我將分別評論我們的全球 S&BT 部門、Oracle 解決方案部門、SAP 解決方案部門和整個公司的收入。我們的全球 S&BT 部門包括我們的北美和國際 IPaaS 和基準產品、我們的執行諮詢計劃、我們的業務轉型以及我們的 OneStream 和集團產品的成果。

Our Oracle Solutions and our SAP Solutions segments include the results of our Oracle and SAP offerings, respectively. Please note that we will be referencing both total revenues and revenues before reimbursements in our discussion. Reimbursable expenses are primarily project travel-related expenses passed through to our clients that have no associated impact to our profitability.

我們的 Oracle 解決方案和 SAP 解決方案部門分別包含我們的 Oracle 和 SAP 產品的成果。請注意，我們在討論中將參考總收入和報銷前收入。可報銷費用主要是轉嫁給我們客戶的專案差旅相關費用，這些費用對我們的獲利能力沒有任何影響。

During our call today, we will also reference certain non-GAAP financial measures, which we believe provide useful information to investors. We have included reconciliations of GAAP to non-GAAP financial measures in our press release filed earlier today and will post any additional information based on the discussion from this call to the Investor Relations page of the company's website.

在今天的電話會議中，我們還將參考某些非公認會計準則財務指標，我們認為這些指標為投資者提供了有用的信息。我們已在今天稍早提交的新聞稿中納入了 GAAP 與非 GAAP 財務指標的調整表，並將根據本次電話會議的討論情況在公司網站的投資者關係頁面上發布任何其他資訊。

For the fourth quarter of 2023, as Ted mentioned, our total revenue was $72.4 million, up 3% over the prior year. Our revenues before reimbursements were $71.2 million, which was also above the high end of our quarterly guidance, up 3% over the prior year. The fourth quarter reimbursable expense ratio on revenues before reimbursements was 1.7% as compared to 1.6% in the prior quarter and 1.9% when compared to the same period in the prior year.

正如 Ted 所提到的，2023 年第四季我們的總收入為 7,240 萬美元，比上年增長 3%。我們的報銷前收入為 7,120 萬美元，也高於我們季度指導的上限，比上年增長 3%。第四季可報銷費用佔報銷前收入的比例為1.7%，上一季為1.6%，上年同期為1.9%。

Total revenues from our global S&BT segment were $42.2 million for the fourth quarter of 2023. Revenues before reimbursements for our global S&BT segment were $41.6 million for the fourth quarter of '23, an increase of 3% when compared to the same period in the prior year. Total revenues from our Oracle Solutions segment were $19 million for the fourth quarter of 2023. Revenues before reimbursements for our Oracle Solutions segment were $18.4 million for the fourth quarter, an increase of 10.6% when compared to the same period in the prior year. This is consistent with the momentum we've experienced since the second quarter of '23, with strong double-digit growth over the last 2 quarters when compared to prior year periods.

2023 年第四季度，我們的全球 S&BT 部門的總收入為 4,220 萬美元。2023 年第四季度，我們的全球 S&BT 部門報銷前收入為 4,160 萬美元，比上年同期增長 3%。 2023 年第四季度，Oracle 解決方案部門的總營收為 1,900 萬美元。第四季度，Oracle 解決方案部門的報銷前營收為 1,840 萬美元，較上年同期成長 10.6%。這與我們自 2023 年第二季以來所經歷的勢頭一致，與去年同期相比，過去兩個季度實現了兩位數的強勁增長。

Total revenues from our SAP Solutions segment were $11.2 million for the fourth quarter of '23. Revenues before reimbursements for our SAP Solutions segment were $11.1 million for the fourth quarter, a decrease of 5% when compared to the same period in the prior year, consistent with the guidance we provided last quarter. The sales investments we made during '23 are expected to contribute to growth in 2024. Approximately 24% of our total company revenues before reimbursements consist of recurring multiyear and subscription-based revenues, which includes our executive advisory, IP as a service, multiyear benchmarks and application managed services contracts.

2023 年第四季 SAP 解決方案部門的總營收為 1,120 萬美元。第四季 SAP 解決方案部門報銷前收入為 1,110 萬美元，與上年同期相比下降 5%，與我們上季度提供的指導一致。我們在23 年期間進行的銷售投資預計將有助於2024 年的成長。報銷前公司總收入的約24% 由經常性多年收入和基於訂閱的收入組成，其中包括我們的執行諮詢、智慧財產權即服務、多年基準和應用程式託管服務合約。

Total company adjusted cost of sales, which exclude reimbursable expenses and noncash stock-based compensation expense, totaled $40.3 million or 56.7% of revenues before reimbursements in the fourth quarter of 2023 as compared to $37.8 million or 54.9% of revenues before reimbursements in the prior year. Total company consultant headcount was 1,168 at the end of the fourth quarter as compared to a total company consultant headcount of 1,177 in the previous quarter and 1,128 at the end of the fourth quarter of the prior year.

2023 年第四季度，公司調整後銷售成本總額（不包括可報銷費用和非現金股票補償費用）總計4,030 萬美元，佔報銷前收入的56.7%，而上一季為3,780 萬美元，佔報銷前收入的54.9%年。截至第四季末，公司顧問總人數為 1,168 人，而上一季公司顧問總人數為 1,177 人，去年第四季末為 1,128 人。

Total company adjusted gross margin on revenues before reimbursements, which excludes reimbursable expenses and noncash stock-based compensation expense, was 43.3% in the fourth quarter of 2023 as compared to 45.1% in the prior year period. This decrease is primarily due to increased head count and lower utilization in the fourth quarter.

2023 年第四季度，公司調整後的報銷前收入總毛利率（不包括可報銷費用和非現金股票補償費用）為 43.3%，而去年同期為 45.1%。這一下降主要是由於第四季度員工人數增加和利用率下降所致。

Adjusted SG&A, which excludes noncash stock-based compensation expense and our Gartner legal settlement and related costs, was $15.4 million or 21.6% of revenues before reimbursements in the fourth quarter of '23. This is compared to $14.9 million or 21.7% of revenues before reimbursements in the prior year. The year-over-year absolute dollar increase is primarily due to incremental investments we're making and dedicated sales resources for executive advisory service offerings. These investments approximated $0.01 in the fourth quarter of 2023.

調整後的 SG&A（不包括非現金股票補償費用以及 Gartner 法律和解及相關費用）為 1,540 萬美元，佔 2023 年第四季報銷前收入的 21.6%。相較之下，上一年報銷前收入為 1,490 萬美元，佔 21.7%。年比絕對美元成長主要是由於我們正在進行的增量投資以及用於執行諮詢服務產品的專用銷售資源。 2023 年第四季這些投資約為 0.01 美元。

Adjusted EBITDA, which excludes noncash stock-based compensation expense and the onetime legal settlement previously mentioned and related costs, was $16.3 million or 23% of revenues before reimbursements in the fourth quarter of '23 as compared to $16.9 million or 24.5% of revenues before reimbursements in the prior year.

調整後的EBITDA（不包括非現金股票補償費用以及前面提到的一次性法律和解費用以及相關費用）在2023 年第四季度為1,630 萬美元，佔報銷前收入的23%，而之前的調整後EBITDA 為1,690 萬美元，佔報銷前收入的24.5%上一年的報銷。

GAAP net income for the fourth quarter of '23 totaled $7.9 million with diluted earnings per share of $0.28 in compares to GAAP net income of $9.7 million or diluted earnings per share of $0.31 in the fourth quarter of the previous year. GAAP net income includes a onetime legal settlement and related costs of $1.2 million or $0.03 per diluted earnings per share.

2023 年第四季的 GAAP 淨利潤為 790 萬美元，攤薄後每股收益為 0.28 美元，而去年第四季 GAAP 淨利潤為 970 萬美元，攤薄後每股收益為 0.31 美元。 GAAP 淨利潤包括一次性法律和解費用以及 120 萬美元或稀釋每股收益 0.03 美元的相關費用。

Adjusted net income, which excludes noncash stock-based compensation expense and the legal settlement for the fourth quarter of 2023, totaled $10.8 million or adjusted diluted net income per common share of $0.39, which was above the high end of our earnings guidance range. This compares to adjusted net income of $11.5 million or adjusted diluted net income per common share of $0.36 in the fourth quarter of the prior year.

調整後淨利（不含非現金股票補償費用及2023 年第四季的法律和解費用）總計1,080 萬美元，調整後攤薄後每股普通股淨利為0.39 美元，高於我們獲利指引範圍的上限。相較之下，去年第四季調整後淨利為 1,150 萬美元，調整後稀釋後每股普通股淨利為 0.36 美元。

The company's cash balances were $21 million at the end of the fourth quarter of '23 as compared to $9.9 million at the end of the previous quarter. Net cash provided by operating activities in the quarter was $25.6 million, primarily driven by net income adjusted for noncash activity and decreases in accounts receivable and related days sales outstanding. Our DSO at the end of the quarter was 65 days as compared to 75 days at the end of the previous quarter and as compared to 63 days at the end of the fourth quarter of 2022.

截至 2023 年第四季末，該公司的現金餘額為 2,100 萬美元，而上一季末為 990 萬美元。本季經營活動提供的淨現金為 2,560 萬美元，主要是由於非現金活動調整後的淨利潤以及應收帳款和相關銷售天數的減少所致。我們本季末的 DSO 為 65 天，而上一季末為 75 天，2022 年第四季末為 63 天。

During the quarter, the company paid down $11 million on our credit facility. The balance of the company's total debt outstanding at the end of the fourth quarter was approximately $33 million. Net interest expense for the quarter was $641,000.

本季度，該公司支付了 1,100 萬美元的信貸額度。截至第四季末，公司未償債務總額餘額約為3,300萬美元。該季度的淨利息支出為 641,000 美元。

During the quarter, we repurchased approximately 3,000 shares of the company's stock from employees to satisfy income tax withholding triggered by the vesting of restricted stock -- of restricted shares for an average of $23.08 per share at a total cost of approximately $71,000. Our remaining stock repurchase authorization at the end of the quarter was $13.9 million. At its most recent meeting, subsequent to the end of the quarter, the company's Board of Directors declared the first quarterly dividend of $0.11 per share for its shareholders of record on March 22, 2024, to be paid on April 5, 2024.

本季度，我們從員工手中回購了約 3,000 股公司股票，以滿足因限制性股票歸屬而產生的所得稅預扣——限制性股票平均每股 23.08 美元，總成本約為 71,000 美元。截至本季末，我們剩餘的股票回購授權為 1,390 萬美元。在季度末後的最近一次會議上，公司董事會宣布向 2024 年 3 月 22 日登記在冊的股東派發每股 0.11 美元的第一季股息，並將於 2024 年 4 月 5 日支付。

I'm now going to move to discussing the guidance for our first quarter of 2024. Before I do that, I'd like to remind everyone of the seasonality of our business relative to costs as we move sequentially from Q4 to Q1. Specifically, consistent with first quarter guidance provided in previous years, our first quarter guidance for 2024 will reflect the sequential increase in U.S. payroll-related taxes and the sequential buildup of our vacation accruals.

我現在將討論 2024 年第一季的指導。在此之前，我想提醒大家，隨著我們從第四季度依次過渡到第一季度，我們業務相對於成本的季節性。具體而言，與往年提供的第一季指引一致，我們對 2024 年第一季的指導將反映美國工資相關稅的連續成長以及應計假期的連續增加。

The company estimates total revenue before reimbursements for the first quarter of 2024 to be in the range of $72.5 million to $74 million. We expect all 3 segment revenues before reimbursements to be up when compared to the prior year with Oracle Solutions up strongly. We estimate adjusted diluted net income per common share in the first quarter of 2024 to be in the range of $0.36 to $0.39, which assumes a GAAP effective tax rate on adjusted earnings of 22%.

該公司預計 2024 年第一季報銷前總收入將在 7,250 萬美元至 7,400 萬美元之間。我們預計，與前一年相比，所有 3 個部門的報銷前收入都將成長，其中 Oracle 解決方案將強勁成長。我們預計 2024 年第一季調整後稀釋後每股普通股淨利將在 0.36 美元至 0.39 美元之間，假設調整後收益的 GAAP 有效稅率為 22%。

We expect adjusted gross margin on revenues before reimbursements to be approximately 40.6% to 41.4%. We expect adjusted SG&A and interest expense to be approximately $16.8 million. We expect first quarter adjusted EBITDA on revenues before reimbursements to in the range of approximately 20% to 21%. Lastly, we expect cash balances, excluding the impact of share buyback activity, to be tempered due to the payment of 2023 performance-related bonuses and the payment of the employee income taxable withholding triggered by net vesting of restricted shares.

我們預計調整後的報銷前收入毛利率約為 40.6% 至 41.4%。我們預計調整後的 SG&A 和利息支出約為 1,680 萬美元。我們預計第一季調整後的報銷前營收 EBITDA 約為 20% 至 21%。最後，我們預計，由於支付 2023 年業績相關獎金以及支付限制性股票淨歸屬觸發的員工所得稅預扣稅，排除股票回購活動的影響，現金餘額將有所減少。

At this point, I would like to turn it back over to Ted to review our market outlook and our strategic priorities for the coming months. Ted?

此時，我想將其轉回給 Ted，以審查我們的市場前景和未來幾個月的策略重點。泰德？

Thank you, Rob.

謝謝你，羅布。

As we look forward, let me share our thoughts on the near and long-term demand environment and the growth opportunities it offers our organization. Although demand for digital transformation remains strong, it continues to be impacted by extended decision-making as organizations assess competing priorities created by high interest rates and the demand disruption, which it is intended to affect. Digital innovation and enterprise cloud applications, analytics and artificial intelligence as well as workflow automation are dramatically influencing the way businesses compete to deliver their services.

展望未來，讓我分享我們對近期和長期需求環境及其為我們組織提供的成長機會的看法。儘管對數位轉型的需求依然強勁，但隨著組織評估高利率和需求中斷所產生的競爭優先事項，數位轉型仍持續受到長期決策的影響。數位創新和企業雲端應用程式、分析和人工智慧以及工作流程自動化正在極大地影響企業競爭提供服務的方式。

So what's new? It's the rapidly emerging attention and demand for Gen AI. Its possibly unlimited potential will drive an entirely new level of digital world-class performance standards, driving all software and services providers to extend the value of their existing offerings. We believe this will result in an unprecedented innovation, which all organizations will have to consider. On the talent side, competition for experienced executives continues. Overall, we saw the turnover continue to moderate and remained low during the quarter, and we expect that trend to continue.

那麼有什麼新內容嗎？這是對新一代人工智慧迅速興起的關注與需求。它可能具有無限的潛力，將推動數位世界級效能標準達到一個全新的水平，推動所有軟體和服務供應商擴展其現有產品的價值。我們相信這將帶來前所未有的創新，所有組織都必須考慮這一點。在人才方面，對經驗豐富的主管的競爭仍在繼續。總體而言，我們看到本季營業額繼續放緩並保持在較低水平，我們預計這種趨勢將持續下去。

Longer term, we have transitioned to a hybrid sales and delivery model, which provides effective access to our clients and their respective teams. This hybrid model provides our associates with greater personal flexibility to perform their defined responsibilities remotely, which is very valuable to them. This should allow us to attract and retain talent.

從長遠來看，我們已經過渡到混合銷售和交付模式，這為我們的客戶及其各自的團隊提供了有效的聯繫。這種混合模式為我們的員工提供了更大的個人靈活性，可以遠端履行其既定職責，這對他們來說非常有價值。這應該能讓我們吸引和留住人才。

Strategically, we have accelerated our focus on our recurring high-margin IP-related services by increasing the development of new programs and sales and marketing resources dedicated to this area. We also continue to invest on our new Hackett Connect member platform.

從策略上講，我們透過增加專門針對該領域的新計劃以及銷售和行銷資源的開發，加快了對經常性高利潤智慧財產權相關服務的關注。我們也持續投資新的 Hackett Connect 會員平台。

But what is new is the accelerated focus and investments we are making in our Gen AI capabilities. We are utilizing the AI Explorer platform as the vehicle to integrate the Gen AI impact across all of our offerings. We have also hired critical data and technology architecture resources to further support our efforts. This will allow us to become critical architects, advisors and consultants of our clients' Gen AI journey. Our ability to measure and assess the impact of Gen AI utilizing our growing use case repository, along with market intelligence about the respective Gen AI solution providers is a powerful way to help guide our clients through the unlimited opportunities they will have to consider. We see this as an opportunity for our organization to provide an objective business perspective to what thus far has been primarily a technology innovation story.

但新的變化是我們對 Gen AI 能力的加速關注和投資。我們正在利用 AI Explorer 平台作為將 Gen AI 影響整合到我們所有產品中的工具。我們也聘請了關鍵資料和技術架構資源來進一步支援我們的工作。這將使我們成為客戶 Gen AI 之旅的關鍵架構師、顧問和顧問。我們能夠利用不斷增長的用例儲存庫來衡量和評估 Gen AI 的影響，以及有關各個 Gen AI 解決方案提供商的市場情報，這是幫助引導我們的客戶抓住他們必須考慮的無限機會的強大方法。我們認為這是我們組織的一個機會，可以為迄今為止主要是技術創新的故事提供客觀的商業視角。

We continue to see strong downstream revenues from our benchmarking and executive advisory clients to our business transformation and cloud application consulting services. This halo effect has been approximately over 40% for the last several years. We believe this will only be expanded by our AI Explorer offering. Organizations who rely on our assessment, solutioning and market intelligence platforms are also more likely to utilize our advisory and consulting services.

我們繼續看到從我們的基準測試和執行諮詢客戶到我們的業務轉型和雲端應用諮詢服務的強勁下游收入。過去幾年，這種光環效應大約超過 40%。我們相信，只有我們的 AI Explorer 產品才能擴大這一範圍。依賴我們的評估、解決方案和市場情報平台的組織也更有可能利用我們的諮詢和諮詢服務。

We also continue to publish our market intelligence reports with the most recent reports focused on finance and accounting outsourcing, several dimensions of Enterprise Performance Management and customer to receivables creation. Our unique insight is our ability to measure value realization and provide implementation insight that accelerates a customer's business performance. We will soon publish our research reports on Gen AI and key solution providers, which is important content for AI Explorer and our executive advisory program.

我們也繼續發布市場情報報告，最新報告重點關注財務和會計外包、企業績效管理的多個維度以及客戶應收帳款創建。我們獨特的洞察力是我們衡量價值實現並提供實施洞察力以加速客戶業務績效的能力。我們即將發布關於Gen AI和關鍵解決方案提供者的研究報告，這是AI Explorer和我們的執行諮詢計劃的重要內容。

Our market intelligence report represent critical value to providers. The companies learn how they compare to competitors as well as the measurable impact their solutions deliver. Our large benchmarking and consulting and executive advisory customer base can also acquire the market intelligence reports to inform software and services purchases decision. We are also exploring strategic partnerships that will allow us to sell our IP through new channels. This will allow us to reach beyond our current Global 1000 focus in an efficient manner.

我們的市場情報報告對提供者來說具有重要價值。這些公司了解他們與競爭對手的比較以及他們的解決方案所帶來的可衡量的影響。我們龐大的基準測試和諮詢以及執行諮詢客戶群還可以獲得市場情報報告，以告知軟體和服務購買決策。我們也正在探索策略合作夥伴關係，這將使我們能夠透過新管道銷售我們的智慧財產權。這將使我們能夠以有效的方式超越目前的全球 1000 強。

We also continue to redefine our global benchmarking leadership through enhancements in Quantum Leap, our digital benchmark software-as-a-service solution along with our digital transformation platforms. These platforms allow us to deliver more information with significantly less client effort. It also allows clients to leverage our IP to create compelling benefit case assessment, accelerating process flow and software configuration decisions and track the value realization of transformation initiatives.

我們也透過增強 Quantum Leap、我們的數位基準軟體即服務解決方案以及我們的數位轉型平台，繼續重新定義我們的全球基準領導地位。這些平台使我們能夠以更少的客戶精力提供更多資訊。它還允許客戶利用我們的智慧財產權創建引人注目的效益案例評估，加速流程和軟體配置決策，並追蹤轉型計畫的價值實現。

We believe the integration of these platforms with AI Explorer significantly enhances the value of our IP and fully aligns our perspective on the new digital world-class performance standards that will be achieved due to emerging Gen AI technology and related use cases. As I mentioned on previous calls, we have a 20-minute demo in the Investor Relations page of our website that investors can utilize to become more familiar with the capabilities of our Quantum Leap and DTP platforms. We are also adding videos that preview our Hackett Connect and AI Explorer platforms.

我們相信，這些平台與 AI Explorer 的整合將顯著提高我們 IP 的價值，並完全符合我們對新的數位世界級效能標準的看法，而新興的 Gen AI 技術和相關用例將實現這些標準。正如我在之前的電話會議中提到的，我們網站的投資者關係頁面上有一個 20 分鐘的演示，投資者可以利用它來更加熟悉我們的 Quantum Leap 和 DTP 平台的功能。我們還添加了預覽 Hackett Connect 和 AI Explorer 平台的影片。

Lastly, even though we believe that we have the client base and the offerings to grow our business, we continue to look for acquisitions and alliances that strategically leverage our IP and add scope, scale or capability, which can accelerate our growth.

最後，儘管我們相信我們擁有客戶群和產品來發展我們的業務，但我們仍繼續尋求收購和聯盟，以策略性地利用我們的智慧財產權並擴大範圍、規模或能力，從而加速我們的成長。

As always, let me close by congratulating our associates on our performance and by thanking them for their tireless efforts and always urge them to stay highly focused on our clients and our people no matter what challenges they may encounter.

像往常一樣，最後，請允許我祝賀我們的員工的表現，感謝他們的不懈努力，並始終敦促他們高度關注我們的客戶和員工，無論他們遇到什麼挑戰。

Those conclude my comments. Let me turn it over to our operator, and let us move on to the Q&A section of our call.

我的評論就到此結束。讓我將其轉交給我們的接線員，然後讓我們繼續通話的問答部分。

(Operator Instructions) George Sutton with Craig-Hallum.

（操作員說明）喬治·薩頓和克雷格·哈勒姆。

Ted, I wondered if you could walk through how you take AI Explorer into a company, do some work for them and then how it extends into your broader offering? I'm particularly compelled by the thought that it's an entirely new way to engage clients as you said. Can you just walk through exactly how that works?

Ted，我想知道您是否可以介紹如何將 AI Explorer 帶入一家公司，為他們做一些工作，然後如何將其擴展到您更廣泛的產品中？正如您所說，這是一種吸引客戶的全新方式，而這個想法特別令我著迷。您能詳細說明一下它是如何運作的嗎？

Okay. Let me do that. And first, let me also comment on the fact that you are correct that this emerging demand requires all software and services providers to, I will say, be prominent and active in this channel if they want to have an opportunity to engage clients strategically, which is only going to increase. So this AI Explorer effort for us has been very, very significant and it's received -- we've had in terms of number of meetings scheduled, held and even the level of proposals we've issued to date all are more significant than any other, I'll call it, new release that we have ever launched.

好的。讓我這樣做。首先，讓我也評論一下這樣一個事實：您是正確的，這種新興需求要求所有軟體和服務提供商，如果他們想有機會策略性地吸引客戶，就必須在這個管道中表現突出和活躍，這只會增加。因此，AI Explorer 的這項工作對我們來說非常非常重要，並且得到了認可——我們安排、舉行的會議數量，甚至我們迄今為止發布的提案水平都比其他任何項目都重要。 ，我稱之為我們推出的新版本。

But with that said, it's -- we take our business process taxonomy, we evaluated cradle to grave as you know, for all of our benchmarking and digital transformation IP, we look at the enterprise across over 100 processes. We align those processes and compare the individual functions and activities against the Gen AI technologies which are emerging. So you look at the fact that if you're building a large language model, leveraging machine learning, leveraging neural networks, leveraging a chatbot or a digital assistant in some combination or strategic way, how does that impact both functions and activities?

但話雖如此，我們採用業務流程分類法，如您所知，我們從頭到尾進行了評估，對於我們所有的基準測試和數位轉型 IP，我們透過 100 多個流程來審視企業。我們調整這些流程，並將各個功能和活動與新興的人工智慧技術進行比較。因此，您會看到這樣一個事實：如果您正在建立大型語言模型，請利用機器學習、利用神經網路、以某種組合或策略方式利用聊天機器人或數位助理，這對功能和活動有何影響？

We've been doing this review for more than 6 months. We've identified hundreds of use cases. So it's allowed us to: one, evaluate functions and activities for the level of Gen AI if we wanted to call impact. We then compare that opportunity for a client against the client's actual cost, time, service levels that they're achieving. It allows us again to use that measurement capability that exists in Quantum Leap to not only tell the client which activities we believe will drive the highest value, we can compare that value to the numbers that they're currently incurring, so that it results in a benefit case. We can do that.

我們進行此項審核已有 6 個多月了。我們已經確定了數百個用例。因此，它使我們能夠：第一，如果我們想稱之為影響力，則評估 Gen AI 等級的功能和活動。然後，我們將客戶的機會與客戶的實際成本、時間和他們所達到的服務水準進行比較。它使我們能夠再次使用 Quantum Leap 中存在的測量功能，不僅告訴客戶我們認為哪些活動將帶來最高價值，我們還可以將該值與他們當前產生的數字進行比較，從而得出福利案例。我們能做到這一點。

We can then also use our growing use case repository to prioritize these opportunities for clients, again, at a functional -- bifunctional group throughout the enterprise and then -- help the client then establish priorities. A client can decide that it wants to simply walk what we would be calling workforce productivity or an incremental impact. It could -- client to be more aggressive and look at something more transformative or the client can be highly ambitious and do something that would be very breakthrough.

然後，我們還可以使用我們不斷增長的用例儲存庫為客戶確定這些機會的優先級，同樣，在整個企業的職能雙職能團隊中，然後幫助客戶確定優先順序。客戶可以決定它想要簡單地實現我們所謂的勞動生產力或增量影響。它可以——客戶更加積極進取，著眼於更具變革性的東西，或者客戶可以雄心勃勃，做一些非常突破性的事情。

But as everyone is finding out, the investments required to actually achieve some of the breakthrough performance requires data harmonization that will support these large language models in order for them to have the intended impact. So we see the clients deciding how they want to start. But at the same time, clients that are very serious about this are really looking at their data standards and harmonization of data efforts that will allow them to position the most breakthrough innovation that Gen AI will offer.

但正如每個人都發現的那樣，真正實現一些突破性表現所需的投資需要數據協調來支援這些大型語言模型，以便它們產生預期的影響。因此，我們看到客戶決定如何開始。但與此同時，對此非常認真的客戶正在真正關注他們的數據標準和數據工作的協調，這將使他們能夠定位 Gen AI 將提供的最具突破性的創新。

So what I like the most about it since we've been in front of clients and now over the last week in front of -- in proposal scenarios with other providers is that we see the story really being framed from a technology perspective. And we believe that most of the clients are looking for somebody to bring a business perspective, how to prioritize, what's the impact, what's the organizational impact, all of the things that we do very strongly.

因此，自從我們在客戶面前以及上週在與其他提供者的提案場景中合作以來，我最喜歡的是，我們看到這個故事確實是從技術角度構建的。我們相信，大多數客戶都在尋找能夠帶來業務視角的人，包括如何確定優先事項、影響是什麼、組織影響是什麼，以及我們所做的所有事情。

So for us, it's been a rapid, if you wanted, move to take all of our IP, benchmarking assets, Quantum Leap and DTP as well as the research that people can now avail themselves through Hackett Connect and make sure that they're being enveloped by this new JI innovation and activity that the clients must consider. We think it is a significant effort. It will be a significant effort for us throughout the year. But boy, I think we're pretty happy that we launched Explorer before the end of the year and the activity that we've seen since the beginning of the year has been very promising.

因此，對於我們來說，如果您願意的話，這是一個快速的舉措，以獲取我們所有的IP、基準測試資產、Quantum Leap 和DTP 以及人們現在可以通過Hackett Connect 進行的研究，並確保他們正在被利用。客戶必須考慮這項新的 JI 創新和活動。我們認為這是一項重大努力。這對我們來說將是全年的重大努力。但是，我認為我們很高興在今年年底之前推出了 Explorer，而且自今年年初以來我們所看到的活動非常有希望。

That's very helpful detail. So I wondered on the market intelligence side, how much has that -- and there wasn't a lot of discussion on market intelligence on this call or at least the prepared comments. I'm curious how much impact this Gartner issue has caused from that perspective, if any. Could you just walk through that for us?

這是非常有用的細節。所以我想知道市場情報方面有多少——而且在這次電話會議上沒有太多關於市場情報的討論，或者至少沒有準備好的評論。我很好奇這個 Gartner 問題從這個角度來看有多大影響（如果有的話）。能為我們介紹一下嗎？

None. The Gartner issue, as you referred to it, was a, I would call it, more recruiting related where individuals that we hired, a very important one, the head of sales individual had a noncompete agreement, which was enforced in Connecticut. So we took them out of any direct sales-related activity that would compete with Gartner, and he will be precluded from returning to his head of global executive advisory sales until November 6, which is when that -- his 1-year period ends.

沒有任何。正如您所提到的，Gartner 問題是一個，我稱之為，更多與招聘相關的問題，我們僱用的個人（一個非常重要的人），銷售主管簽訂了一份非競爭協議，該協議在康乃狄克州執行。因此，我們將他們從任何可能與 Gartner 競爭的直接銷售相關活動中剔除，並且在 11 月 6 日之前，他將無法返回全球執行諮詢銷售主管職位，也就是他的 1 年任期結束時。

We were very fortunate. We were hiring a second leader to support some of our other renewals and customer service issues, very talented individual, which replaced this individual 2 weeks after we got that notice from the court that they believe that the -- their position was enforceable. We made that transition. We think we've addressed that about as smoothly as we can.

我們非常幸運。我們正在聘請第二位領導來支持我們的其他一些續約和客戶服務問題，他是一位非常有才華的人，在我們收到法院的通知兩週後，他取代了這位領導，他們相信他們的職位是可執行的。我們實現了這項轉變。我們認為我們已經盡可能順利地解決了這個問題。

And as I said in my prepared comments, it may have disrupted or impacted, right, to ask a leader not be here at the end of the year, lead the team. But I referred to the interim head as a little bit of a Brock Purdy. No flash, just great execution, and we're delighted to have him on board. Therefore, we're looking forward to the investments we make in '23 to impact '24, but it had no impact on our development of market intelligence reports and how we intend to use them to support our executive advisory programs and now becomes a critical part of AI Explorer because a lot of the AI Explorer questions are not only what's my opportunity, how do I prioritize? But they also want a perspective of which vendors do what well and therefore, who they should consider. And I believe that they will rely on us, on that market intelligence element of our business to support Gen AI initiatives.

正如我在準備好的評論中所說，要求領導者在年底不在這裡領導團隊可能會造成乾擾或影響。但我稱臨時負責人有點像布洛克·珀迪（Brock Purdy）。沒有閃光，只有出色的執行力，我們很高興他能加入。因此，我們期待我們在 23 年所做的投資能夠影響 24 年，但這對我們市場情報報告的開發以及我們打算如何使用它們來支持我們的執行諮詢計劃沒有影響，現在成為一個關鍵的問題AI Explorer的一部分，因為AI Explorer 的許多問題不僅僅是我的機會是什麼，我該如何確定優先順序？但他們也希望了解哪些供應商做得很好，以及他們應該考慮誰。我相信他們將依靠我們，並依靠我們業務的市場情報元素來支持 Gen AI 計劃。

Got you. So he can't come back until November 6. Just make sure he gets out and votes the next day on November 7. Thanks, guys.

明白你了。所以他要到 11 月 6 日才能回來。只要確保他在第二天 11 月 7 日出去投票即可。謝謝大家。

He's ready to go. Don't worry, we'll keep him busy in things that do not conflict with this agreement.

他已經準備好出發了。別擔心，我們會讓他忙於與本協議不衝突的事情。

(Operator Instructions)

（操作員說明）

Our next caller is Jeff Martin with ROTH MKM.

我們的下一個來電者是 ROTH MKM 的 Jeff Martin。

Ted, I wondered if you could elaborate on what you see as a growth acceleration in 2024. Maybe first touch on the sources of that. Is it giving more seasoned salespeople, not having them become more seasoned and therefore conversion rates go up? Is it new offering, is this a combination? In detail that would be helpful.

Ted，我想知道您能否詳細說明您所認為的 2024 年成長加速。也許首先談談成長的來源。是否提供了更多經驗豐富的銷售人員，而不是讓他們變得更加經驗豐富，從而提高轉換率？這是新產品還是組合？詳細一點的話會有幫助。

Yes. I mean all of the above, obviously, time and great help. During the year, we were also changing and improving some of the programs. So they were not only becoming familiar with our relative strength in how to take those to market, but we were obviously even rolling out some enhancements, which included the November -- October rollout of Hackett Connect. So again, tremendous amount of work and investment that we made. So even with some disruption, listen, it should not prevent us from are growing that -- those services the way we originally intended.

是的。顯然，我指的是上述所有內容，時間和巨大的幫助。這一年裡，我們也對一些程序進行了改變和改進。因此，他們不僅逐漸熟悉了我們在如何將這些產品推向市場方面的相對優勢，而且我們顯然甚至推出了一些增強功能，其中包括 11 月至 10 月推出的 Hackett Connect。再說一次，我們付出了大量的工作和投資。因此，即使出現一些中斷，聽著，也不應該阻止我們按照我們最初的預期方式發展這些服務。

Great. And then back to market intelligence a little bit, if we could. Are you seeing much revenue impact from the programs? I mean, you published the first couple of them towards the middle or even in the fall of last year. It sounds like you published another $0.01 or $0.02 and kind of the cadence of $0.01 or $0.02 a quarter plan for the foreseeable future.

偉大的。如果可以的話，然後再回到市場情報上來。您是否看到這些計劃對收入產生了很大影響？我的意思是，你在去年年中甚至秋天出版了前幾篇文章。聽起來您又發布了 0.01 美元或 0.02 美元，並且在可預見的未來每季度計劃 0.01 美元或 0.02 美元。

No. We project that, as you know, very low revenue since we need these programs would be rolling out in the latter part of the year. So the answer is no. But again, we expect them to contribute to our growth in 2024.

不。如您所知，我們預計收入非常低，因為我們需要這些計劃在今年下半年推出。所以答案是否定的。但我們再次預計它們將為我們 2024 年的成長做出貢獻。

Okay. And then could you care to quantify growth acceleration in 2024. How should we think about the model? I know typically, you target a 5% revenue growth and 10% pro forma EPS growth. Is that how we should think about this year? Or should we think about an acceleration where the back half is perhaps stronger than that?

好的。然後您能否量化 2024 年的成長加速。我們應該如何考慮模型？我知道通常情況下，您的目標是收入成長 5% 和預計每股收益將成長 10%。今年我們該這樣思考嗎？或者我們應該考慮後半部可能比這更強的加速？

Well, as you know, we'll provide the quarterly guidance, we'll set the same. We know that at 5% growth, we obviously generate profits in excess of 10%. If we grow anywhere near 10%, we're 20% bottom line contribution. We'll provide our quarterly guidance and allow that to play out, and we'll update that for you every quarter as we go through as we normally do. So no, if you're asking me to provide annual guidance, Jeff, no -- I'm not prepared to change my discipline at the moment.

嗯，如你所知，我們將提供季度指導，我們將設定相同的目標。我們知道，如果成長 5%，我們的利潤顯然會超過 10%。如果我們的成長率接近 10%，我們的利潤貢獻率為 20%。我們將提供季度指導並使其發揮作用，並且我們將像往常一樣每季為您更新該指導。所以，不，如果你要求我提供年度指導，傑夫，不，我現在不准備改變我的紀律。

Our next caller is Vincent Colicchio with Barrington Research.

我們的下一個來電者是 Barrington Research 的 Vincent Colicchio。

So Ted, I'm curious, the sales force. My understanding is bundling of services is one of their focuses. Are you seeing some success there? And if not, do you expect to see some success in that area throughout the year?

泰德，我很好奇，銷售人員。我的理解是服務捆綁是他們的重點之一。您看到那裡取得了一些成功嗎？如果沒有，您預計全年在該領域會取得一些成功嗎？

Well, it depends which sales force you're talking about. If it's our regional sales group that supports our S&BT segment, and that includes all services, the answer is yes. They carry a bag to support the sale of all services. If you're talking about the executive advisory and market intelligence dedicated sales group, they're fully focused on those offerings, but they obviously receive incentives to the extent that they identify other opportunities that are outside of their purview. And then our software-related teams work directly with those channel partners and those -- that the software companies support and they primarily focus on the sale of those software products across the U.S. regions for both Oracle and SAP.

嗯，這取決於你所談論的是哪支銷售團隊。如果是我們的區域銷售團隊支持我們的 S&BT 部門（包括所有服務），那麼答案是肯定的。他們背著一個包包來支持所有服務的銷售。如果您談論的是執行諮詢和市場情報專門銷售團隊，他們完全專注於這些產品，但如果他們發現了超出其職權範圍的其他機會，他們顯然會獲得激勵。然後，我們的軟體相關團隊直接與這些通路合作夥伴以及軟體公司支援的合作夥伴合作，他們主要專注於在美國地區為 Oracle 和 SAP 銷售這些軟體產品。

And Rob, I don't -- I wasn't sure if I missed it. You had said Oracle should grow sequentially. Did you mention the S&BT and SAP sequentially in Q1?

羅布，我不知道——我不確定我是否錯過了。您曾說過甲骨文應該會連續成長。您在第一季是否依序提到了 S&BT 和 SAP？

Yes, my comment was that all 3 of our segments are going to grow in Q1 with the strongest being Oracle.

是的，我的評論是，我們的所有 3 個細分市場都將在第一季實現成長，其中最強的是 Oracle。

Okay. And Ted, do you expect Q1 to see better conversion rates with the new sales force? Or will it take more time than that?

好的。泰德（Ted），您預計第一季新銷售團隊的轉換率會更高嗎？或會需要更多時間嗎？

Yes, we do expect it to improve. In fact, it improved throughout the year, as you can see, the time and greater the individuals become familiar with the product. So yes, we would expect it to improve throughout the year, including Q1.

是的，我們確實希望它能有所改善。事實上，正如您所看到的，它在一年中都得到了改善，人們熟悉產品的時間越來越長。所以，是的，我們預計它全年都會有所改善，包括第一季。

And I know you don't want to talk about growth for the year. Maybe there's another way to ask a related question. Do you expect a return on the sales investments you made last year and the market intelligence investments to bear fruit in '24?

我知道您不想談論今年的成長。也許還有另一種方式來提出相關問題。您預計去年的銷售投資和市場情報投資會在 24 年取得成果嗎？

Absolutely.

絕對地。

And at this time, I show no further questions. I would now turn the call back over to Mr. Fernandez.

此時，我沒有再提出任何問題。我現在將把電話轉回給費南德斯先生。

Let me thank everyone for participating in our fourth quarter earnings call. We look forward to catching up with you again when we report the first quarter. Thank you.

讓我感謝大家參加我們的第四季財報電話會議。我們期待在報告第一季時再次與您聯繫。謝謝。

And thank you. This concludes today's conference call. You may go ahead and disconnect at this time.

謝謝你。今天的電話會議到此結束。此時您可以繼續並斷開連線。