RESOURCES CONNECTION, INC.

Previous wording

The following discussion and analysis of our financial condition, results of operations, and liquidity and capital resources for three months ended August 30, 2025 should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes and with our Annual Report on Form 10-K for the year ended May 31, 2025 filed with the Securities and Exchange Commission (“SEC”).

Current wording

The following discussion and analysis of our financial condition, results of operations, and liquidity and capital resources for three and six months ended November 29, 2025 should be read in conjunction with the accompanying unaudited consolidated financial statements and related notes and with our Annual Report on Form 10-K for the year ended May 31, 2025 filed with the Securities and Exchange Commission (“SEC”).

Previous wording

Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, these statements and all phases of our operations are subject to known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements and those of our industry to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties include, but are not limited to, the following: risks related to an economic downturn or deterioration of general macroeconomic conditions, potential adverse effects to our and our clients' liquidity and financial performances from bank failures or other events affecting financial institutions, the highly competitive nature of the market for professional services, risks related to the loss of a significant number of our consultants, or an inability to attract and retain new consultants, the possible impact on our business from the loss of the services of one or more key members of our senior management or key sales professionals, risks related to potential significant increases in wages or payroll-related costs, our ability to secure new projects from clients, our ability to achieve or maintain a suitable pay/bill ratio, our ability to compete effectively in the competitive bidding process, risks related to unfavorable provisions in our contracts which may permit our clients to, among other things, terminate the contracts partially or completely at any time prior to completion, our ability to realize the level of benefit that we expect from our restructuring initiatives, risks that our recent digital expansion and technology transformation efforts may not be successful, our ability to build an efficient support structure as our business continues to grow and transform, our ability to grow our business, manage our growth or sustain our current business, our ability to serve clients internationally, additional operational challenges from our international activities, possible disruption of our business from our past and future acquisitions, the possibility that our recent rebranding efforts may not be successful, our potential inability to adequately protect our intellectual property rights, risks that our computer hardware and software and telecommunications systems are damaged, breached or interrupted, risks related to the failure to comply with data privacy laws and regulations and the adverse effect it may have on our reputation, results of operations or financial condition, our ability to comply with governmental, regulatory and legal requirements and company policies, the possible legal liability for damages resulting from the performance of projects by our consultants or for our clients’ mistreatment of our personnel, risks arising from changes in applicable tax laws or adverse results in tax audits or interpretations, the possible adverse effect on our business model from the reclassificat…

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Current wording

Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, these statements and all phases of our operations are subject to known and unknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievements and those of our industry to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties include, but are not limited to, the following: risks related to an economic downturn or deterioration of general macroeconomic conditions, potential adverse effects to our and our clients' liquidity and financial performances from bank failures or other events affecting financial institutions, the highly competitive nature of the market for professional services, risks related to the loss of a significant number of our consultants, or an inability to attract and retain new consultants, the possible impact on our business from the loss of the services of one or more key members of our senior management or key sales professionals, risks related to potential significant increases in wages or payroll-related costs, our ability to secure new projects from clients, our ability to achieve or maintain a suitable pay/bill ratio, our ability to compete effectively in the competitive bidding process, risks related to unfavorable provisions in our contracts which may permit our clients to, among other things, terminate the contracts partially or completely at any time prior to completion, our ability to realize the level of benefit that we expect from our restructuring initiatives, risks that our recent digital expansion and technology transformation efforts may not be successful, our ability to use artificial intelligence ("AI") and machine learning in our business, our ability to build an efficient support structure as our business continues to grow and transform, our ability to grow our business, manage our growth or sustain our current business, our ability to serve clients internationally, additional operational challenges from our international activities, possible disruption of our business from our past and future acquisitions, the possibility that our recent rebranding efforts may not be successful, our potential inability to adequately protect our intellectual property rights, risks that our computer hardware and software and telecommunications systems are damaged, breached or interrupted, risks related to the failure to comply with data privacy laws and regulations and the adverse effect it may have on our reputation, results of operations or financial condition, our ability to comply with governmental, regulatory and legal requirements and company policies, the possible legal liability for damages resulting from the performance of projects by our consultants or for our clients’ mistreatment of our personnel, risks arising from changes in applicable tax laws or adverse results in tax audits or i…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Facing a tough market in fiscal 2025, we made deliberate choices to adapt. During the first quarter of fiscal 2025, we reorganized our business into distinct business units to establish more targeted strategies, enhance execution focus and create more brand clarity in the market place and have since operated under the following business units: (i) On-Demand Talent, (ii) Consulting, (iii) Europe & Asia Pacific, (iv) Outsourced Services, and (v) Sitrick (disclosed as "All Other"). We evolved and streamlined our consulting practices, honing in on two areas where the need and opportunities are robust: CFO Advisory, serving CFOs’ needs across people, process and technology, and Digital, Data and Cloud where we expanded our capabilities in cloud platform implementation, data strategy and analytics, AI adoption and readiness, and enterprise digital transformation, through strategic acquisitions. Furthermore, we made meaningful progress in fiscal 2025 on improving bill rates and reducing costs. Finally, we completed our technology modernization effort in our largest region, North America, which positions us for more operational efficiency as we head into fiscal 2026.

Current wording

The Company operates under the following business units: (i) On-Demand Talent, (ii) Consulting, (iii) Europe & Asia Pacific, (iv) Outsourced Services, and (v) Sitrick (disclosed as "All Other").

Previous wording

Building upon the foundation we established in fiscal 2025, we continue to execute the following enterprise growth drivers in fiscal 2026:

Current wording

Building upon the foundation we established in fiscal 2025, we are executing upon the following enterprise growth drivers in fiscal 2026:

Previous wording

Drive improvement in cost structure – In the face of persistent macro-economic uncertainty and headwinds on client demand, we have prioritized reducing our cost structure and maintaining ongoing cost discipline to deliver improved profitability. We expect to leverage our newly implemented technology to achieve further operating efficiencies. In addition, we will continue to assess and optimize resource allocation across the business to improve profitability.

Current wording

•Drive improvement in cost structure; and

Previous wording

•Further leverage value-based pricing; and

Current wording

•Further leverage value-based pricing to improve profitability.

Previous wording

Expand cross-sell opportunities through our diversified services platform– We offer a unique blend of services in On-Demand Talent, Consulting, and Outsourced Services, enabling high flexibility and high impact solutions for enterprises worldwide. This unique model is designed to meet clients’ evolving needs in a disrupted business environment. Our consulting capability provides us with deeper visibility into our clients’ transformation agendas to drive greater opportunities for our On-Demand execution capabilities, while our agile talent base within our On-Demand business provides greater financial flexibility and better skill set alignment for our Consulting business. In our Outsourced Services business, we are expanding Countsy’s total addressable market beyond the start-up ecosystem to serve the finance, accounting and human resources needs surrounding spin-outs and carve-outs. In fiscal 2026, we will be focused on broadening client relationships by cross-selling across our diversified service offerings and introducing complementary solutions as client needs evolve. We believe this will enable us to deepen our partnerships with CFOs and business leaders, strengthen client retention, and increase wallet share while positioning the Company as a long-term, trusted partner for transformation and performance improvement.

Current wording

Expand cross-sell opportunities through our diversified services platform– We offer a unique blend of services in On-Demand Talent, Consulting, and Outsourced Services, enabling high flexibility and high impact solutions for enterprises worldwide. This unique model is designed to meet clients’ evolving needs in a disrupted business environment. Our Consulting capability provides us with deeper visibility into our clients’ transformation agendas to drive greater opportunities for our On-Demand execution capabilities, while our agile talent base within our On-Demand business provides greater financial flexibility and better skill set alignment for our Consulting business. In our Outsourced Services business, we are expanding Countsy’s total addressable market beyond the start-up ecosystem to serve the finance, accounting and human resources needs surrounding spin-outs and carve-outs. In fiscal 2026, we are focused on broadening client relationships by cross-selling across our diversified service offerings and introducing complementary solutions as client needs evolve. We believe this will enable us to deepen our partnerships with CFOs and business leaders, strengthen client retention, and increase wallet share while positioning the Company as a long-term, trusted partner for transformation and performance improvement.

Previous wording

Optimize our high-growth solutions and evolve our talent strategy– In the volatile and rapidly shifting global economic environment, CFOs need partners who combine financial expertise with flexibility. We will maintain our commitment to building strong relationships with CFOs, who have historically been the primary buyers of our services, to support their organizations’ transformation journeys with specialized expertise, high-value consulting, and integrated outsourced delivery. The core solutions we will continue to build, deepen and optimize are: enterprise resource planning ("ERP") and cloud finance systems modernization, financial planning and analysis enhancement, accounting close process optimization, SEC compliance, post acquisitions integration, enterprise risk management, data strategy and analytics, AI adoption and enterprise digital transformation. Concurrent to evolving our solutions to meet market demand, we will also be keenly focused on evolving our talent strategy to modernize and refresh the skillset in our consultant base, both bench and agile, to serve our clients across On-Demand or Consulting engagements.

Current wording

Scale our high-value Consulting solutions and refocus On-Demand offerings to address the evolving needs of our clients– In the volatile and rapidly shifting global economic environment, CFOs and business leaders need partners who combine expertise with flexibility. We will maintain our commitment to building strong relationships with C-suite leaders, to support their organizations’ transformation journeys with specialized on-demand expertise, high-value consulting, and integrated outsourced delivery. The core solutions we will continue to build, integrate (through Reference Point) and scale are: enterprise resource planning ("ERP") and cloud finance systems modernization, financial planning and analysis enhancement, accounting close process optimization, SEC compliance, post acquisitions integration, enterprise risk management, data strategy and analytics, AI adoption and enterprise digital transformation. Concurrent to evolving our solutions to meet market demand, we will also be keenly focused on evolving our talent strategy to modernize and refresh the skillsets within our consultant base, both bench and agile, to serve our clients across On-Demand or Consulting engagements, particularly in the area of technology and AI fluency.

Previous wording

Further leverage value-based pricing – Building on the progress we made in fiscal 2025, we will further advance our value-based pricing strategy to improve bill rates and pricing leverage, particularly in the Consulting business, as we pursue larger-scale, higher-value engagements that deliver measurable impact for clients.

Current wording

Further leverage value-based pricing – Building on the progress we made in fiscal 2025, we are continuing to advance our value-based pricing strategy to improve bill rates and pricing leverage, particularly in the Consulting business, as we pursue larger-scale, higher-value engagements that deliver measurable impact for clients.

Previous wording

Consulting – Revenue in the Consulting segment declined by $11.4 million or 20.7%, to $43.6 million in the first quarter of fiscal 2026 compared to $55.0 million in the first quarter of fiscal 2025. On a same day currency basis, revenue decreased 21.7% in the first quarter of fiscal 2025. The decline was primarily due to a 28.4% decrease in billable hours, partially offset by a 11.1% (or 11.4% on a constant currency basis) increase in the average bill rate largely as a result of the Company’s value-based pricing initiative. As we continue to evolve our consulting business to deliver higher value, larger and more complex work, we have improved our ability to command higher bill rates; however, the sales cycle associated with such deal opportunities tends to be more elongated. As a result, revenue in the Consulting segment could be lumpy in the near term as we continue to execute our strategy in his part of the business.

Current wording

As we continue to evolve our consulting business to deliver higher value, larger and more complex work, we believe we will improve our ability to command higher bill rates; however, the sales cycle associated with such deal opportunities tends to be more elongated. As a result, revenue in the Consulting segment could be uneven in the near term as we continue to execute our strategy in this part of the business.

Previous wording

Uncertain macroeconomic conditions including ambiguity around interest rates, softening labor markets, fluctuations in currency exchange rates, recent government and policy changes implemented in the United States, and tariff actions and uncertainties related to trade wars have created significant uncertainty in the global economy, volatility in the capital markets and recessionary pressures, which has adversely impacted our financial results. While we are not able to fully predict the potential impact, we continue to see caution in professional services spending within our client base. If these conditions or impacts persist or if a prolonged economic downturn or recession develops, it could result in a further decline in billable hours and negatively impact our bill rates which would adversely affect our financial results and operating cash flows.

Current wording

Uncertain macroeconomic conditions including ambiguity around interest rates, softening labor markets, fluctuations in currency exchange rates, recent government and policy changes implemented in the United States, and tariff actions and uncertainties related to trade wars have created significant uncertainty in the global economy, volatility in the capital markets and recessionary pressures, which has adversely impacted our financial results. While we are not able to fully predict the potential impact, we continue to see caution in professional services spending within our client base. If these conditions or impacts persist or if a prolonged economic downturn or recession develops, it could result in a further decline in billable hours or negatively impact our bill rates which would adversely affect our financial results and operating cash flows.

Previous wording

The following discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The preparation of these financial statements requires us to make estimates and judgments. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are discussed in Note 2 –Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements included in Item 8 of Part II of our Fiscal Year 2025 Form 10-K, and in Note 2 –Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

The following discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The preparation of these financial statements requires us to make estimates and judgments. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are discussed in Note 2 –Summary of Significant Accounting Policies in the Notes to Consolidated Financial

Previous wording

•Adjusted EBITDA is calculated as EBITDA excluding stock-based compensation expense, amortized ERP system costs, technology transformation costs, goodwill impairment, acquisition costs, gain on sale of assets, and restructuring costs. We also present herein Adjusted EBITDA at the segment level as a measure used to assess the performance of our segments. Segment Adjusted EBITDA excludes certain shared corporate administrative costs that are not practical to allocate. See Note 12 – Segment Information and Enterprise Reportingin the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

Current wording

•Adjusted EBITDA is calculated as EBITDA excluding stock-based compensation expense, amortized ERP system costs, technology transformation costs, goodwill impairment, acquisition costs, gain on sale of assets, restructuring costs, CEO transition costs, and other items management believes are not representative of the Company's core operations. We also present herein Adjusted EBITDA at the segment level as a measure used to assess the performance of our segments. Segment Adjusted EBITDA excludes certain shared corporate administrative costs that are not practical to allocate. See Note 13 – Segment Information and Enterprise Reportingin the Notes to Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for further information.

Previous wording

(2) Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to a newly implemented ERP system, which was recorded within SG&A expenses on the Consolidated Statement of Operations.

Current wording

(2)Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to a newly implemented ERP system, which was recorded within SG&A expenses on the Consolidated Statement of Operations.

Previous wording

(4) Acquisition costs primarily represent costs included in net loss related to the Company’s business acquisition. These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms. See Note 4 – Acquisitions in the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion.

Current wording

(4)Acquisition costs primarily represent costs included in net loss related to the Company’s business acquisition. These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms. See Note 4 – Acquisitions in the Notes to Consolidated Financial Statements in Item I of Part I of this Quarterly Report on Form 10-Q for further discussion.

Previous wording

Consolidated Operating Results – Three Months Ended August 30, 2025 Compared to Three Months Ended August 24, 2024

Current wording

Consolidated Operating Results – Three and Six Months Ended November 29, 2025 Compared to Three and Six Months Ended November 23, 2024

Previous wording

Cost of Services. Cost of services decreased $14.2 million, or 16.3%, to $72.8 million for the first quarter of fiscal 2026 from $86.9 million in the first quarter of fiscal 2025. The decrease in cost of services was primarily attributable to a 14.3% decline in billable hours as a result of reduced client spending as noted above, while the average pay rate remained steady during the first quarter of fiscal 2026 compared to thefirst quarter of fiscal 2025.

Current wording

Cost of services decreased $15.5 million, or 17.3%, to $74.0 million for the second quarter of fiscal 2026 from $89.5 million in the second quarter of fiscal 2025. The decrease in cost of services was primarily attributable to a 18.4% decline in billable hours and a 3.2% decline in average pay rate.

Previous wording

The number of agile consultants on assignment during the first quarter of fiscal 2026 was 2,231 compared to 2,730 during the first quarter of fiscal 2025. The average number of salaried consultants during the first quarter of fiscal 2026 was 418 compared to 482 during the first quarter of fiscal 2025.

Current wording

The number of agile consultants on assignment during the second quarter of fiscal 2026 was 2,288 compared to 2,758 during the second quarter of fiscal 2025. The average number of salaried consultants during the second quarter of fiscal 2026 was 400 compared to 527 during the second quarter of fiscal 2025.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses (“SG&A”) was $47.9 million, or 39.9% of revenue, for the first quarter of fiscal 2026 compared to $48.9 million, or 35.7% of revenue, for the first quarter of fiscal 2025. The $1.0 million decrease in SG&A year-over-year was primarily driven by a $2.4 million decrease in employee compensation and benefits costs following our restructuring activities in fiscal 2025, a $1.9 million decrease in technology transformation costs primarily associated with our technology implementation during fiscal 2025, a $1.1 million decrease related to business support costs including travel and entertainment, a $0.8 million decrease in acquisition related costs, and a $0.4 million decrease in occupancy expenses. These decreases were partially offset by a $3.4 million gain on the sale of the Irvine office building recorded during the first quarter of fiscal 2025 with no comparable activity occurring during the first quarter of fiscal 2026, a $0.9 million increase in professional services fees, a $0.7 million increase in stock-based compensation, and a $0.7 million increase in amortization of costs related to capitalized technology transformation costs. The remaining decrease was related to various general and overhead costs.

Current wording

SG&A expenses were $102.3 million, or 43.0% of revenue, for the six months ended November 29, 2025 compared to $100.2 million, or 35.5% of revenue, for the six months ended November 23, 2024. The $2.1 million increase in SG&A year-over-year was primarily attributed to $5.9 million and $3.1 million in severance and stock based compensation costs, respectively, associated with the separation of the Company's former CEO, a $3.4 million gain on the sale of the Irvine office building during fiscal 2025 with no comparable activity occurring during fiscal 2026, and a $2.6 million increase in restructuring charges. These increases were partially offset by a $5.2 million decrease in employee compensation and benefits costs following the reduction in force in fiscal 2025 and most recently in October 2025, a $1.1 million decrease in costs associated with the internal use of consultants, a $0.9 million decrease in variable employee compensation as a result of financial performance, a $3.9 million decrease in technology transformation costs primarily associated with the completion of our North America technology implementation during fiscal 2025, a $0.7 million decrease related to bad debt expense, a $0.9 million decrease in acquisition costs, and a $0.7 million decrease in occupancy expenses. The remaining SG&A reduction was related to various general and overhead costs.

Previous wording

Management and administrative headcount was 667 at the end of the first quarter of fiscal 2026 and 765 at the end of the first quarter of fiscal 2025.

Current wording

Management and administrative headcount was 632 at the end of the second quarter of fiscal 2026 and 754 at the end of the second quarter of fiscal 2025.

Previous wording

Goodwill Impairment. No goodwill impairment was recorded during the first quarter of fiscal 2026. During the first quarter of fiscal 2025, the Company completed a goodwill impairment analysis as part of its business segment reorganization. As a result of the analysis, a non-cash impairment charge of $3.9 million was recorded in the Europe & Asia Pacific segment during the first quarter of fiscal 2025. See Note 5 –Goodwill and Intangible Assets in the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

Current wording

No goodwill impairment was recorded during the first or second quarters of fiscal 2026. In the second quarter of fiscal 2025, in light of the decline in the Company's market capitalization, along with slower than expected recovery in business performance within the Company’s On-Demand Talent segment and Europe & Asia Pacific segment, the Company conducted a goodwill impairment analysis and recorded a non-cash impairment charge of $79.5 million in the On-Demand Talent segment. Additionally, during the first quarter of fiscal 2025, the Company completed a goodwill impairment assessment concurrent with its segment change and concluded that the carrying value of the Europe & Asia Pacific segment was in excess of its fair value. As a result, the Company recorded a non-cash impairment charge of $3.9 million. See Note 5 –Goodwill and Intangible Assets in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q for further information.

Previous wording

Income Taxes. Income tax expense was $0.5 million, reflecting an effective tax rate of 24.7%, for the first quarter of fiscal 2026 compared to an income tax expense of $1.1 million, or an effective tax rate of 22.7%, for the first quarter of fiscal 2025. The income tax expense, driven primarily by an increase in the domestic and foreign valuation allowance in the first quarter of fiscal 2026 and the non-deductible tax adjustment on goodwill impairment in the first quarter of fiscal 2025, measured against consolidated pretax losses resulted in the negative effective tax rate in both quarters.

Current wording

Income tax expense was $0.7 million for the second quarter of fiscal 2026, reflecting an effective tax rate of 6.0%, compared to an income tax benefit of $7.7 million, or an effective tax rate of 10.1%, for the second quarter of fiscal 2025. The income tax expense in the quarter ended November 29, 2025 was primarily attributable to income tax expense from profitable foreign jurisdictions, while losses in certain domestic and foreign jurisdictions did not result in a tax benefit due to the existence of valuation allowances. The income tax benefit in the quarter ended November 23, 2024 was primarily attributed to the Company’s consolidated pretax loss, reduced by the permanent disallowance of a portion of the goodwill impairment for taxpurposes.

Previous wording

Comparability of Quarterly Results. Our quarterly results have fluctuated in the past and we believe they will continue to do so in the future. Certain factors that could affect our quarterly operating results are described in Part I, Item 1A of our Fiscal Year 2025 Form 10-K and our other public filings made with the SEC. Due to these and other factors, we believe quarter-to-quarter comparisons of our results of operations may not be meaningful indicators of future performance.

Current wording

Comparability of Quarterly Results. Our quarterly results have fluctuated in the past and we believe they will continue to do so in the future. Certain factors that could affect our quarterly operating results are described in Item 1A of Part I of our Fiscal Year 2025 Form 10-K and our other public filings made with the SEC. Due to these and other factors, we believe quarter-to-quarter comparisons of our results of operations may not be meaningful indicators of future performance.

Previous wording

Each of these segments reports through separate segment managers to the Company's Chief Executive Officer and Chief Operating Officer, who are collectively designated as the CODMs for segment reporting purposes. The Company's reportable segments are comprised of On-Demand Talent, Consulting, Europe & Asia Pacific, and Outsourced Services. Sitrick does not individually meet the quantitative thresholds to qualify as a reportable segment. Therefore, Sitrick is disclosed under the “All Other” segment. Each of these segments represents a reporting unit for the purposes of assessing goodwill for impairment.

Current wording

Each of these segments reports through separate segment managers to the Company's Chief Executive Officer and Chief Operating Officer, who are collectively designated as the Chief Operating Decision Maker for segment reporting purposes. The Company's reportable segments are comprised of On-Demand Talent, Consulting, Europe & Asia Pacific, and Outsourced Services. Sitrick does not individually meet the quantitative thresholds to qualify as a reportable segment. Therefore, Sitrick is disclosed under the “All Other” segment. Each of these segments represents a reporting unit for the purposes of assessing goodwill for impairment.

Previous wording

The following table presents our operating results by segment for the three months ended August 30, 2025 and August 24, 2024, respectively (in thousands). Revenue information by segment, on a GAAP basis and on a same-day constant currency basis, is set forth above under "Non-GAAP Financial Measures — Same Day Constant Currency Revenue."

Current wording

The following table presents our operating results by segment for the three and six months ended November 29, 2025 and November 23, 2024, respectively (in thousands). Revenue information by segment, on a GAAP basis and on a same-day constant currency basis, is set forth above under "Non-GAAP Financial Measures — Same Day Constant Currency Revenue."

Previous wording

(2)Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to a newly implemented ERP system, which was recorded within selling, general, and administrative expenses on the Consolidated Statement of Operations.

Current wording

(2) Amortized ERP system costs represent the amortization of capitalized technology transformation costs related to a newly implemented ERP system, which was recorded within SG&A on the Consolidated Statement of Operations.

Previous wording

(4)Acquisition costs primarily represent costs included in net loss related to the Company’s business acquisition. These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms. See Note 4 – Acquisitions in the Notes to Consolidated Financial Statements for further discussion.

Current wording

(4) Acquisition costs primarily represent costs included in net loss related to the Company’s business acquisition. These costs include transaction bonuses, cash retention bonus accruals, and fees paid to the Company's broker, legal counsel, and other professional services firms. See Note 4 – Acquisitions in the Notes to Consolidated Financial Statements in Item I of Part I of the Quarterly Report on Form 10-Q for further discussion.

Previous wording

(7)Restructuring costs during the three months ended August 24, 2024 represent costs incurred in connection with the U.S Restructuring Plan, which was authorized in October 2023 and was substantially completed during fiscal 2024.

Current wording

(7)Restructuring costs during the three and six months ended November 29, 2025 represent employee termination costs incurred in the reduction in force and non-recurring third-party consulting costs associated with the 2026 Transformation Initiative. Restructuring costs during the three and six months ended November 29, 2024 represent costs incurred in connection with the U.S. Restructuring Plan, which was authorized in October 2023 and was substantially completed during fiscal 2024.

Previous wording

Outsourced Services – Revenue in the Outsourced Services segment increased by $0.5 million or 5.3%, to $10.0 million in the first quarter of fiscal 2026 compared to $9.5 million the first quarter of fiscal 2025. On a same-day constant currency basis, revenue increased 3.7% in the first quarter of fiscal 2025. The increase was primarily due to an increase in billable hours of 2.1%, partially offset by a 2.2% decrease in the average bill rates.

Current wording

Outsourced Services – Revenue in the Outsourced Services segment decreased by $0.1 million or 0.8% to $9.4 million in the second quarter of fiscal 2026 compared to $9.5 million the second quarter of fiscal 2025. Billable hours increased 1.3% and the average bill rate declined 5.0% on a reported basis, primarily due to a higher mix of offshore delivery.

Previous wording

All Other – Revenue in the All Other segment increased by $0.3 million or 15.3%, to $2.3 million in the first quarter of fiscal 2026 compared to $2.0 million in the first quarter of fiscal 2025. On a same-day constant currency basis, revenue increased 13.6% in the first quarter of fiscal 2025. The increase was primarily due to an increase in billable hours and an average bill rate increaseof 2.7%.

Current wording

All Other – Revenue in the All Other segment increased by $0.2 million or 10.4% (12.1% on a same-day constant currency basis), to $2.6 million in the second quarter of fiscal 2026 compared to $2.4 million in the second quarter of fiscal 2025. The increase was primarily due to an increase in average bill rate of 2.9% partially offset by a 6.6% decrease in billable hours.

Previous wording

On-Demand Talent– The On-Demand Talent segment’s Adjusted EBITDA increased by $1.9 million or 72.8%, to $4.4 million for the first quarter of fiscal 2026, compared to $2.6 million for the first quarter of fiscal 2025. The increase is primarily attributed to a decrease in segment expenses of $3.4 million, partially offset by a decrease in gross profit of $1.6 million.

Current wording

On-Demand Talent– The On-Demand Talent segment’s Adjusted EBITDA decreased by $1.5 million or 27.5%, to $4.1 million for the second quarter of fiscal 2026, compared to $5.6 million for the second quarter of fiscal 2025. The decrease is primarily attributed to a decrease in gross profit of $5.0 million partially offset by a decrease in segment expenses of $3.5 million.

Previous wording

Consulting – The Consulting segment’s Adjusted EBITDA decreased by $2.7 million or 34.9%, to $5.0 million for the first quarter of fiscal 2026, compared to $7.8 million for the first quarter of fiscal 2025. The decrease is primarily attributed to a decrease in gross profit of $3.2 million, which was partially offset by a decrease in segment expenses of $0.5 million.

Current wording

Consulting – The Consulting segment’s Adjusted EBITDA decreased by $5.2 million or 54.2%, to $4.5 million for the second quarter of fiscal 2026, compared to $9.7 million for the second quarter of fiscal 2025. The decrease is primarily attributed to a decrease in gross profit of $7.9 million, which was partially offset by a decrease in segment expenses of $2.6 million.

Previous wording

Outsourced Services – The Outsourced Services segment’s Adjusted EBITDA increased by $0.9 million, or 67.1% to$2.3 million in the first quarter of fiscal 2026 compared to $1.4 million for the first quarter of fiscal 2025. The increase is primarily attributed to an increase in gross profit of $1.0 million, partially offset by an increase in segment expenses of $0.1 million.

Current wording

Outsourced Services – The Outsourced Services segment’s Adjusted EBITDA increased by $0.2 million, or 11.2% to$1.7 million in the second quarter of fiscal 2026 compared to $1.5 million for the second quarter of fiscal 2025. The increase is primarily attributed to an increase in gross profit of $0.2 million.

Previous wording

All Other – The All Other segment's Adjusted EBITDA increased by $0.7 million or 139.2% to $0.2 million for the first quarter of fiscal 2026 compared to $(0.5) million for the first quarter of fiscal 2025. The increase is attributed to an increase in gross profit of $0.6 million and a decrease in segment expenses of $0.1 million.

Current wording

All Other – The All Other segment's Adjusted EBITDA increased by $0.9 million or 167.3% to $0.4 million for the second quarter of fiscal 2026 compared to $(0.5) million for the second quarter of fiscal 2025. The increase is attributed to an increase in gross profit of $0.2 million and a decrease in segment expenses of $0.7 million.

Previous wording

Our primary sources of liquidity are cash provided by operating activities, our senior secured revolving credit facility (as discussed further below) and historically, to a lesser extent, stock option exercises and ESPP purchases. While during the three months ended August 30, 2025, we did not generate positive cash flow from operations, we have historically generated positive cash flows from operations on an annual basis since inception. Our ability to generate positive cash flows from operations in the future will depend, at least in part, on global economic conditions and our ability to remain resilient during periods of deteriorating macroeconomic conditions and any economic downturns. As of August 30, 2025, we had $77.5 million of cash and cash equivalents, including $41.3 million held in international operations.

Current wording

Our primary sources of liquidity are cash provided by operating activities, our senior secured revolving credit facility (as discussed further below) and historically, to a lesser extent, stock option exercises and purchases under the Company's 2019 Employee Stock Purchase Plan, as amended (the "ESPP"). During the six months ended November 29, 2025, we generated positive cash flow from operations and have historically generated positive cash flows from operations on an annual basis since inception. Our ability to generate positive cash flows from operations in the future will depend, at least in part, on customer demand and global economic conditions and our ability to remain resilient during periods of deteriorating macroeconomic conditions and any economic downturns. As of November 29, 2025, we had $89.8 million of cash and cash equivalents, including $40.6 million held in international operations.

Previous wording

The 2025 Credit Facility is available for working capital and general corporate purposes, including potential acquisitions, dividend distribution and stock repurchases. Additional information regarding the 2025 Credit Facility is included in Note 7 –Long-Term Debtin the Notes to Consolidated Financial Statements included in Part I, Item I of this Quarterly Report on Form 10-Q.

Current wording

The 2025 Credit Facility is available for working capital and general corporate purposes, including potential acquisitions, dividend distribution and stock repurchases. Additional information regarding the 2025 Credit Facility is included in Note 7 –Long-Term Debtin the Notes to Consolidated Financial Statements included in Item I of Part I of this Quarterly Report on Form 10-Q.

Previous wording

In addition to cash needs for ongoing business operations, from time to time, we have strategic initiatives that could generate significant additional cash requirements. Such costs primarily include software licensing fees and other costs in areas including change management and training. We believe our current cash, ongoing cash flows from our operations and funding available under our 2025 Credit Facility will provide sufficient funds for these initiatives. As of August 30, 2025, we have non-cancellable purchase obligations totaling $8.5 million, which primarily consist of payments pursuant to the licensing arrangements that we have entered into: $4.0 million due during fiscal 2026; $3.1 million due during fiscal 2027; 1.5 million due during fiscal 2028; and zero due thereafter.

Current wording

In addition to cash needs for ongoing business operations, from time to time, we have strategic initiatives that could generate significant additional cash requirements. Such costs primarily include software licensing fees and other costs in areas including change management and training. We believe our current cash, ongoing cash flows from our operations and funding available under our 2025 Credit Facility will provide sufficient funds for these initiatives. As of November 29, 2025, we have non-cancellable purchase obligations totaling $11.5 million, which primarily consist of payments pursuant to the licensing arrangements that we have entered into: $3.6 million due during the remainder of fiscal 2026; $4.2 million due during fiscal 2027; $3.3 million due during fiscal 2028; and $0.4 million due thereafter. The $3.0 million increase in non-cancellable purchase obligations from the first quarter of 2026 is related to the renewal of a three-year licensing arrangement. We lease office space under non-cancelable operating leases with various expiration dates. See Note 6 -Leases in the Notes to Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for our future minimum commitments related to our operating leases.

Previous wording

Other than as described herein, there have been no material changes to our material cash requirements, including commitments for capital expenditures, described under the heading “Liquidity and Capital Resources” in Item 7, Part II of our Fiscal Year 2025 Form 10-K.

Current wording

Other than as described herein, there have been no material changes to our material cash requirements, including commitments for capital expenditures, described under the heading “Liquidity and Capital Resources” in Item 7 of Part II of our Fiscal Year 2025 Form 10-K.

Previous wording

Operating activities for the three months ended August 30, 2025 used cash of $7.8 million compared to $0.3 million of cash used for the three months ended August 24, 2024. The cash used in operations for the three months ended August 30, 2025 included a net loss of $2.4 million, offset by non-cash adjustments of $5.3 million. The cash used in operations was primarily due to changes in operating assets and liabilities, which amounted to a net cash outflow of $10.8 million, driven by a $15.8 million decrease in accrued bonuses, salaries and related obligations due to the timing of our pay cycle and the payout of the annual incentive compensation, a $1.5 million decrease in accounts payable and other accrued expenses and a $0.6 million decrease in other liabilities. These decreases were offset by a $5.7 million decrease in trade accounts receivable, a $0.8 million decrease in prepaid expenses and other current assets, a $0.6 million decrease in other assets, and a $0.2 million increase in prepaid income taxes.

Current wording

The net favorable changes in operating assets and liabilities were driven by a $12.7 million decrease in trade accounts receivable, a $6.6 million increase in other liabilities, a $1.5 million decrease in other assets, a $0.9 million decrease in prepaid expenses and other current assets and a $0.4 million decrease in net income taxes receivable. Partially offsetting these favorable changes were a $9.8 million decrease in accrued salaries and related obligations due mainly to the payout of the annual incentive compensation and a $2.1 million decrease in accounts payable and other accrued expenses. The Company incurred a net loss of $15.1 million during the six months ended November 29, 2025.

Previous wording

In the three months ended August 24, 2024, cash used in operations was due to a net loss of $5.7 million, which was partially offset by non-cash adjustments of $6.0 million and net unfavorable changes in operating assets and liabilities of $0.6 million. These net unfavorable changes in operating assets and liabilities were driven by a $4.3 million decrease in trade accounts receivable, a $0.4 million increase in accrued salaries and related obligations, mainly due to the timing of our pay cycle and the payout of the annual incentive compensation during the three months ended August 24, 2024, and a $1.0 million increase in other liabilities. Offsetting these unfavorable changes were a $1.9 million increase in other assets largely related to the investments in our technology implementation, a $1.3 million decrease in accounts payable and other accrued expenses, and a $1.0 million increase in prepaid income taxes.

Current wording

The cash provided by operations for the first six months of fiscal 2025 was primarily driven by the non-cash adjustments of $83.2 million (primarily due to the non-cash goodwill impairment), which was offset by a net loss of $74.4 million and net unfavorable changes in operating assets and liabilities of $4.4 million. These net unfavorable changes in operating assets and liabilities were driven by a $3.7 million increase in other assets largely related to the investments in our technology implementation, a $2.1 million decrease in other liabilities, a $1.7 million decrease in accounts payable and other accrued expenses, a $1.5 million increase in prepaid expenses and other current assets, and a $0.7 million increase in prepaid income taxes. Offsetting these unfavorable changes were a $1.8 million decrease in trade accounts receivable and a $0.7 million increase in accrued salaries and related obligations, mainly due to the timing of our pay cycle.