Q3 2024 The Hackett Group Inc Earnings Call
Welcome to the Hackett Group 3rd Quarter Earnings Conference Call. Your lines have been placed on a listen-only mode until the question and answer session. Please be advised the conference is being recorded. Hosting tonight's call are Mr. Ted Fernandez, Chairman and CEO, and Mr. Rob Ramirez, Chief Financial Officer. Mr. Ramirez, you may begin.
Rob Ramirez: Good afternoon everyone and thank you for joining us to discuss the Hackett Group's third quarter results.
Rob Ramirez: Speaking on the call today, I'm here to answer your questions for Ted Fernandez, Chairman and Chief Executive Officer of the Hackett Group, and myself, Robert Ramirez, Chief Financial Officer.
Rob Ramirez: A press announcement was released over the wires at 4.15 p.m. Eastern Time.
Rob Ramirez: 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.
Rob Ramirez: 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.
Rob Ramirez: 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.
Rob Ramirez: These forward-looking statements should be considered only in conjunction with the detailed information particularly the risk factors contained in our SAC filings.
Speaker Change: At this point, I'd like to turn it over to Ted.
Ted Fernandez: Thank you, Rob, and welcome everyone to our third quarter earnings call. 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, and guidance.
Rob Ramirez: We will then review our market and strategy related comments, after which we will open it up to Q&A.
Rob Ramirez: This afternoon, we reported total revenues of $79.8 million and adjusted earnings per share of $0.43, both of which exceeded our quarterly guidance.
Rob Ramirez: Our Oracle and SAP segments continued their strong performance, but what is new is the emergence and increased revenue growth from our Gen-AI engagements, which grew strongly on a sequential revenue basis in the quarter.
Rob Ramirez: This new Gen-AI consulting revenue driven by our AI Explorer, capital XPLR platform, was offset by the weakness in our e-procurement group and resulted in our GSBT segment being flat on a year-over-year basis.
Rob Ramirez: We are seeing clients quickly moving from awareness and education about its Gen-AI adoption opportunity to budgeted projects, which we expect to further increase in the fourth quarter and continue throughout 2025.
Rob Ramirez: We believe Gen-AI is a generational opportunity which will fundamentally change the way companies operate as well as the way consulting services are sold and delivered.
Rob Ramirez: The Gen-AI platform capability we have developed in AI Explorer and now expanded with the zBrain platform, which was part of the Leeway Hertz acquisition, are highly differentiating and should allow us to compete strongly for the emerging growth in this important space.
Rob Ramirez: Our Oracle segment performance was consistent with the momentum we have experienced since early 2023 when Oracle re-established its dedicated sales team in its Enterprise Performance Management, or EPM, offerings.
Rob Ramirez: Our SAP Solutions segment performed above expectations for the third quarter in a row as it closed several value-added reseller transactions which benefited the quarter.
Rob Ramirez: This increase is directly attributable to our decision last year to expand our sales force and more broadly leverage our market-leading life sciences capability.
Rob Ramirez: These initial meetings are now becoming new meaningful opportunities for us to serve clients strategically and broadly.
Rob Ramirez: We use this unique insight to make powerful improvements.
Rob Ramirez: Best Practice Business Processes and Software Configuration Knowledge to identify AI automation opportunities in data source requirements at the work step or activity level.
Rob Ramirez: This enables us to identify, design, and evaluate meaningful AI solutions or use cases, including AI agent opportunities, using our AI Explorer's GenAI-assisted capabilities.
Rob Ramirez: We believe that our new Explorer Version 2 capabilities and our acquisition of Leeway Hertz are already favorably impacting our conversion rates and significantly expanding the downstream revenue opportunities with our clients.
Rob Ramirez: Given the strategic access and platform-expanding capabilities of AI Explorer, it was natural for us to extend our AI implementation capabilities to fully be able to develop and implement GenAI use cases that we were identifying.
Rob Ramirez: This resulted in our acquisition of Leeway Hertz, a highly recognized provider of advanced Gen-AI solutions. The acquisition also included a Gen-AI orchestration solution, zBrain, which we agreed to contribute into a newly created joint venture with the Leeway Hertz founder.
Rob Ramirez: The JBE, which will bring together the AI Explorer and Zbrain software platforms and will focus on licensing the platforms and creating a first-of-its-kind Gen-AI ideation through implementation software-as-a-service offering.
Rob Ramirez: We believe this JV creates an entirely new value creation opportunity for our shareholders that could result from the growth of annual recurring revenues.
Rob Ramirez: It would also allow us to have the opportunity to raise capital and achieve stand-alone valuations due to its Gen-AI software focus.
Rob Ramirez: Our pre-acquisition collaboration with Leeway Hertz during the third quarter resulted in strong sequential quarterly Gen-AI revenue growth, which we expect will continue into the fourth quarter and could have consequential impact on our 2025 results.
Rob Ramirez: There is no doubt that in just nine months our aggressive pivot to become the architects of our client's Gen-AI journey is being well received and has significant value creation potential for our organization.
Rob Ramirez: We have extended and strengthened our capabilities and continue to add Gen-AI enabled transformation engagements driven by AI Explorer.
Rob Ramirez: Our unique ability to identify meaningful use cases, determine their feasibility leveraging Hackett IP, which now extends to implementation and platform licensing prospects, is highly differentiated.
Rob Ramirez: On the executive advisory front, we continue to invest in growing our IP-based programs.
Rob Ramirez: We believe our move to fully integrate GEN-AI content, which is now being further augmented by the highly recognized GEN-AI content, which was infused by the Leeway Hertz acquisition, will be responsive to our clients' strong interest in this area.
Rob Ramirez: We expect our fourth quarter sequential growth in our advisory program sales and renewals to reflect this impact
Rob Ramirez: On the balance sheet side, as we announced today,
Rob Ramirez: In the near term, they can expect us to use our strong cash flow from operations to accelerate our stock buyback program rather than pay down our remaining outstanding balance of our credit facility while continuing to invest in our business.
Rob Ramirez: Our $20 million stock back, addition to our existing $11.1 million authorization, leaves us with $31.1 million as we start the quarter.
Rob Ramirez: Thank you, Ted. As I typically do, I'll cover the following topics during my portion of the call. I'll cover an overview of our 2024 3rd quarter results, along with an overview of related key operating statistics.
Rob Ramirez: I'll cover an overview of our cash flow activities in the quarter, and I will then conclude with a discussion on our financial outlook for the fourth quarter of 2024.
Rob Ramirez: For purposes of this call, I will comment separately regarding the revenues of our Global SMBT Segment, our Oracle Solutions Segment, our SAP Solutions Segment, and the total company.
Rob Ramirez: Our Oracle Solutions and our SAP Solutions segments include the results of our Oracle and SAP offerings respectively.
Rob Ramirez: We've included reconciliations of GAAP to non-GAAP financial measures in our press release filed earlier today And we'll post any additional information based on the discussion from this call to the investor relations page of the company's website
Rob Ramirez: For the third quarter of 2024, our total revenues were $79.8 million. Our revenues before reimbursements were $77.9 million, which was above the high end of our quarterly guidance.
Rob Ramirez: The third quarter of 2024 reimbursable expense ratio on revenue before reimbursements was 2.3% as compared to 1.6% in the prior quarter and in the same period in the prior year.
Rob Ramirez: Total revenues from our global SMT segment were $44.1 million for the third quarter of 2024.
Rob Ramirez: Revenues before reimbursements for our global SMVT segment were $43.3 million for the third quarter of 2024, essentially flat when compared to the same period in the prior year.
Rob Ramirez: Total revenues from our Oracle Solutions segment were $22.8 million for the third quarter of 2024.
Rob Ramirez: Revenues before reimbursements for our Oracle Solutions segment were $21.8 million for the third quarter of 2024, an increase of 7% when compared to the same period in the prior year.
Rob Ramirez: These results continue the trauma that we've experienced since the second quarter of 2023.
Rob Ramirez: Total revenues from our SAP Solutions segment were $13 million for the third quarter of 2024.
Speaker Change: Revenues before reimbursements for our SAP Solutions segment were $12.9 million for the third quarter, an increase of 17% when compared to the same period in the prior year, primarily driven by strong software-related sales in the quarter.
Rob Ramirez: Approximately 22% of our total company revenues before reimbursements consist of recurring multi-year and subscription-based revenues, which includes a research advisory, IP as a service, multi-year benchmarks, and application managed services contracts.
Rob Ramirez: Total company adjusted cost of sales, which exclude reimbursable expenses, non-cash stock-based compensation expense, and all acquisition-related cash and non-cash compensation expense.
Rob Ramirez: totaled $44.2 million, or 56.8% of revenues before reimbursements in the third quarter as compared to $42.9 million, or 57.5% of revenues before reimbursements in the prior year.
Rob Ramirez: Total company consultant headcount was 1,262 at the end of the third quarter of 2024, as compared to 1,105 in the previous quarter and 1,177 at the end of the third quarter of the prior year.
Rob Ramirez: Third quarter ending headcount was primarily driven by increases from our Gen-AI acquisition practice.
Rob Ramirez: was 43.2% in the third quarter as compared to 42.5% in the prior year, driven due to the revenue growth from both our Oracle and SAP segments.
Rob Ramirez: Adjusted SG&A, which excludes non-cash stock-based compensation expense and all acquisition related cash and non-cash expenses, was 17 million dollars or 21.8 percent of revenues before reimbursements.
Rob Ramirez: in the third quarter. This is compared to $15.3 million, or 20.5% of revenues before reimbursements in the prior year. The year-over-year absolute dollar increase is primarily due to foreign exchange fluctuations as well as incremental commissions from increased S&P and local segment sales.
Rob Ramirez: Gap net income for the third quarter of 2024 totaled 8.6 million or diluted earnings per share of 31 cents as compared to gap net income of 9.4 million or diluted earnings per share of 34 cents in the third quarter of the prior year.
Rob Ramirez: Gap in income for the third quarter includes non-cash stock compensation expense from our recently approved share price appreciation equity program of $602,000 and acquisition-related non-cash compensation expense of $232,000.
Rob Ramirez: which in total impacted our gap results by two cents.
Rob Ramirez: Adjusted net income, which excludes non-cash stock-based compensation expense and all acquisition-related cash and non-cash expenses for the third quarter of 2024 totaled $12.1 million, or adjusted diluted net income per common share of $0.43.
Rob Ramirez: which is above the top end of our earnings guide range and compares to our prior year adjusted diluted net income for common share of 41 cents
Rob Ramirez: Our adjusted net income for the third quarter of 2024 was favorably impacted by approximately one cent due to a lower gap effective tax rate on adjusted earnings than we originally estimated when we provided guidance last quarter.
Rob Ramirez: As announced in September 2024, during the third quarter, the company acquired the operations of Leeway Hertz, an India-based AI implementation services firm.
Rob Ramirez: Due to the timing of the transaction, this acquisition did not have an impact on our adjusted net income for the third quarter of 2024.
Rob Ramirez: Acquisition related cash and non-cash stock compensation expense relates to a portion of the purchase consideration for the legal acquisition.
Rob Ramirez: The company's cash balances were $10 million at the end of the third quarter of 2024 as compared to $19.1 million at the end of the previous quarter.
Rob Ramirez: Net cash provided from operating activities in the quarter was $10.6 million. Primarily driven by net income adjusted for non-cash activity.
Rob Ramirez: partially offset by increases in accounts receivable.
Rob Ramirez: Our DSO, or Day of Sales Outstanding, was 70 days at the end of the quarter, as compared to 68 days at the end of the previous quarter, and as compared to 75 days in the prior year.
Rob Ramirez: Cash utilized for purchase consideration for the legal inheritance acquisition amounted to $7.6 million in the quarter. This does not include any stock purchase consideration or any contingent compensation that may be earned in the future.
Rob Ramirez: During the third quarter of 2024, the company paid down $7 million on its credit facility.
Rob Ramirez: The balance of the company's total debt outstanding at the end of the third quarter of 2024 was approximately $20 million.
Rob Ramirez: Subsequent to the end of the quarter, the company has paid down an additional $3 million.
Rob Ramirez: During the quarter, we repurchased 71,000 shares
Rob Ramirez: dollars and 66 cents per share at a total cost of approximately 1.9 million driven by open market purchases and from employees to satisfy income tax with holding triggered by divesting of restricted shares.
Rob Ramirez: Our remaining stock repurchase authorization at the end of the quarter was $11.1 million.
Rob Ramirez: At its most recent meeting, subsequent to Quarter End, the company's board of directors authorized a $20 million increase in the company's share purchase authorization.
Rob Ramirez: Additionally, the Board declared a fourth quarterly dividend of 11 cents per share for the shareholders of a record of December 20, 2024, to be paid on January 3, 2025.
Rob Ramirez: Before I move to guidance for the fourth quarter of 2024, I'd like to remind everyone of the seasonality of our business.
Rob Ramirez: Specifically, the increased holiday and vacation time that is historically taken in the fourth quarter would decrease our available billing days by approximately 10% when compared to the third quarter.
Rob Ramirez: The company estimates total revenue before reimbursements for the fourth quarter of 2024 to be in the range of $73.5 to $75 million.
Rob Ramirez: We expect all subject revenues before reimbursements to be up, and the total company will be up 3 to 5% with regard to the prior year.
Rob Ramirez: We estimate adjusted diluted net income per common share in the fourth quarter of 2024 to be in the range of 41 to 43 cents.
Rob Ramirez: which assumes a gap-effective tax rate on adjusted earnings of 27.6 percent.
Rob Ramirez: We expect the adjusted gross margins percentage of revenues before reimbursements to be approximately 45 to 46 percent.
Rob Ramirez: We expect adjusted SG&A and interest expense for the fourth quarter to be approximately $17.2 million.
Rob Ramirez: We expect fourth quarter adjusted EBITDA as a percentage of revenues before reimbursements to be in the range of approximately 23 to 24 percent.
Rob Ramirez: Lastly, we expect cash flow for operations to be up on a sequential basis.
Speaker Change: At this point, I'll turn it back over to Ted to review our market outlook.
Rob Ramirez: and strategic priorities for the coming months.
Ted Fernandez: As we look forward, let me share our thoughts on the near and long-term demand environment and the growth opportunity it offers our organization.
Ted Fernandez: As we head into 2025, we expect client program budgets and allocations to increase to the rapidly emerging Gen-AI.
Rob Ramirez: solutions area. While in 2024, Gen-AI budgets were primarily focused in developing awareness in AI, a dip in their toe in the water kind of approach, in 2025, we believe you will see an increasing amount of IT budgets specifically allocated to Gen-AI initiatives.
Rob Ramirez: In high feasibility and high impact areas, we also expect to see an increase in investment in data quality and value initiatives, which are critical to any Gen-AI strategy.
Rob Ramirez: The potential of AI will define an entirely new level of Gen AI-enabled world-class performance standards, driving all software and services providers to extend the value of their existing offerings.
Rob Ramirez: We believe this will result in innovations which all organizations will have to consider. This shift is consistent with our aggressive pivot to Gen-AI-enabled transformations, which we believe positions a generational value creation opportunity for our organization.
Rob Ramirez: Strategically, we continue our focus on recurring high-margin IP related services, but what is new is the accelerated focus and investment we're making on Gen-AI. The most significant investments have been in AI Explorer as well as training and development of our associates.
Rob Ramirez: of Strategic Acquisition of Leeway Hertz.
Rob Ramirez: A highly recognized Gen-AI consulting and implementation firm further expanded and accelerated all of our efforts.
Rob Ramirez: We are using the AIXplorer platform as the vehicle to integrate the Gen-AI capabilities and impact across all of our offerings. We also continue to hire and upgrade our skills in critical data and tech architecture resources to further support our efforts.
Rob Ramirez: These efforts are rapidly allowing us to become key architects, advisors, and consultants of our clients' Gen-AI journey.
Rob Ramirez: We now believe that AI Explorer will be our primary strategic entry point to clients that we will use to position our traditional strong benchmarking, digital transformation, as well as our advisory offerings.
Rob Ramirez: The halo effect or downstream revenue, in fact, has been around 40 percent over the last several years, and that refers to our IP-based services.
Rob Ramirez: We now believe this will only be expanded by our AI Explorer offering and the enterprise-wide strategic access it provides us.
Rob Ramirez: We believe the integration of our other IP platforms with AI Explorer significantly enhances the value of our IP and fully aligns it into the emerging Gen AI world-class performance standards we believe it will establish.
Rob Ramirez: that we are asked to provide our clients every day but will now be provided in a more efficient and with more significantly personalized insight.
Rob Ramirez: We are ingesting proprietary IP, including benchmarking, best practices, and research IP to support the myriads of queries that we are required to support our executive advisory and consulting clients, as well as support our associates in general.
Rob Ramirez: We have also embarked on a new initiative which extends
Rob Ramirez: but also address the efficiency and quality.
Rob Ramirez: of the Delivery of our Technology Implementation Related Services. All of these initiatives are harnessing the power of Gen-AI to improve and accelerate the delivery of our solutions and services with the intent to differentiate our capabilities and result in improved revenue growth and margins.
Rob Ramirez: On the talent side, competition for experienced executives, especially with high technology agility, continues. Overall, we saw turnover continue to moderate.
Rob Ramirez: and overall in turnover and expected to remain low during the quarter and we don't and we expect that trend to continue.
Rob Ramirez: As I have mentioned on previous calls, we are adding videos of our platforms on the investor relations page of our website that investors can utilize to become more familiar with all of our new capabilities.
Rob Ramirez: Lastly, even though we believe we have the client base and offerings to grow our business, we continue to look for acquisitions and alliances that strategically leverage our IP and at scope, scale, and capability, which can accelerate our growth.
Rob Ramirez: 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 we may encounter.
Rob Ramirez: Those conclude my comments. Let me turn it over to our operator and let us move into the Q&A section of our call operator
Speaker Change: Thank you. At this time, if you would like to ask a question, please ensure that your phone is unmuted, press star 1, and record your name clearly when prompted. If you would need to withdraw your request, you may press star 2.
Speaker Change: Again, that is star 1 to ask a question. One moment for the first question.
Speaker Change: Our first question comes from George Sutton with Craig Hallam. You may go ahead.
George Sutton: Thank you. Guys, it's impressive to watch how AI has really shifted the opportunity here. So, Ted, I wondered if you could walk through version 2.0. You've mentioned hundreds of meetings you've had with
Speaker Change: Version 2 is very significant. As you know, George, we conducted hundreds of meetings
Rob Ramirez: I think it's also important to note that it was probably around that same time
Rob Ramirez: where our collaboration with Leeway Hertz even though it was pre-acquisition.
Rob Ramirez: also accelerated.
Rob Ramirez: So, the capability of Version 2 and the inclusion of their Gen-AI implementation skills significantly impacted, I'm going to say, the response we were getting from clients. And when we look at those meetings that we have held,
Rob Ramirez: using version 2, which include our new Leeway-Hertz leaders and associates, those conversion rates are meaningfully higher than anything we were previously experiencing.
Speaker Change: What makes version 2 so compelling?
Speaker Change: You know what's been unique about our approach from the beginning was that we decided to understand
Speaker Change: which was the lowest component of, we thought, enablement that we could evaluate given our very strong business process knowledge.
Speaker Change: but it also becomes a very granular way to evaluate the related cost of any of the use cases that we're identifying.
Speaker Change: So
Speaker Change: What's important about version two that we can now walk into a client
Rob Ramirez: and provide a demo by having industry client information and their technology landscape and actually walk them through the use cases that are available throughout their entire enterprise.
Rob Ramirez: front, mid, or back office.
Rob Ramirez: I know that sounds too good to be true and hard to believe, but that is exactly what we're doing, and it allows us to help clients.
Rob Ramirez: The benefits related to that use case, and now with the integration of Leeway-Hertz, what we call a detailed calculation of costs so that we can provide ROI.
Rob Ramirez: which was happening throughout the third quarter probably more in the mid to the latter part of that quarter are the things that we've seen have impacted our close rate and Allowed us to either go back or re-engage with clients that have been exposed to version one But approached them with a much more compelling confident
Rob Ramirez: detailed feasibility and impact presentation that we believe has started to accrue in our favor and has led to the success that we expect to continue from Q3 to Q4.
George Sutton: Ted, you talked about 2025 showing increased IT budgets for AI initiatives with 24 being just the toe in the water.
George Sutton: I know Rob doesn't want me to get too crazy in terms of how we build that out in our model, but can you just talk about what you mean?
George Sutton: quantitative relative to that statement.
Ted Fernandez: We believe just for any software service consideration for clients.
Ted Fernandez: All software and service solutions providers that have the ability to engage clients strongly about relative their services, they should all see a marked increase.
Rob Ramirez: in both the client engagement and the revenues that initially launched.
Rob Ramirez: because what's what's happening is
Rob Ramirez: The first step was...
Rob Ramirez: the College of Awareness and Education.
Rob Ramirez: and clients depending. Obviously the highly sophisticated ones jumped out early, built out pretty strong AI centers of excellence with their own capability and tech platforms to do all that. But that wasn't the majority of these large clients. In fact, I would say it was the minority.
Rob Ramirez: and what the return is for any of those initiatives. And in that...
Rob Ramirez: feasibility impact ROI assessment, that is where we play.
Rob Ramirez: We believe that that will accrue, that benefit will accrue to us throughout the year. So, time will tell just exactly how that impacts our 25 results.
Rob Ramirez: but we believe it provides a very meaningful opportunity as we close out the year and we prepare to go into 2025.
Speaker Change: I just want to make sure I understand what you're referring to there and how that's going to shift in your view.
Speaker Change: was the way clients would engage us. And then from those, those who relied on our IP and valued it ended up becoming meaningful consulting clients. So our historical results that those entry points were driving approximately 40% of our total revenues over the last several years.
Speaker Change: when we look at IP-based entry points into the delivery of consulting or technology implementation services.
Speaker Change: That's clear. Okay. Thank you very much.
Speaker Change: Thank you. And as a reminder, if you would like to ask a question, please press star 1. Our next question is from Jeff Martin with Roth Capital Partners. You may go ahead.
Jeff Martin: Thank you. Good afternoon. Ted was curious if you could compare and contrast the types of conversations that you're having now post-acquisition of Leeway Hertz with
Speaker Change: Client Prospects versus when you were going without Leeway Hertz.
Speaker Change: It's significantly different. Some of it driven by our...
Speaker Change: I'll call it.
Speaker Change: this new additional capability, but we also learned as we started qualifying those demo meetings that we were taking, we started learning what were more educational and awareness-related opportunity versus which had higher engagement opportunities.
Speaker Change: So, what happened as we, I think, started Q3, we started becoming much more demanding on who needed to be on the call in order for us to do an AI Explorer demo, and it became only more increasingly demanding as we got closer to releasing version 2.
Speaker Change: So, at the beginning, we were just delighted that a, I'll call it a global 1,000 client, wanted to learn more about our new capabilities.
Speaker Change: As we got into Q3, it was clear that we wanted to really
Speaker Change: qualified the opportunity more, and we understood by then.
Rob Ramirez: that having
Rob Ramirez: a strong
Rob Ramirez: Gen AI implementation partner with us on those calls.
Rob Ramirez: could significantly influence the impact and credibility of the call.
Rob Ramirez: So, as we went through Q3, we then became more demanding and said it's got to be a CIO, CTO, or AI leader within that organization, along with any of our traditional C-level officers across other functions.
Rob Ramirez: that we have very strong relationships with. But we realized that we needed to have both strong implementation capability and credibility, which that initial partnering, which you could have called pre-acquisition...
Rob Ramirez: Collaboration.
Rob Ramirez: became very helpful, especially as we were completing our acquisition, due diligence, but also understanding that at the end of the day, you needed AI leadership or IT leadership to participate in a strategic engagement around the either ideation or the,
Rob Ramirez: evaluation of Gen-AI opportunities. So we became just more demanding and now as we have full simulation capabilities
Rob Ramirez: We're becoming more demanding because we believe we are delivering a lot of value in that initial introductory call by virtue of this simulation capability.
George Sutton: Thank you. On the implementation side, could you talk about what it takes to scale that, what your plans are perhaps?
George Sutton: really build out further implementation capability.
George Sutton: and Robert Ramirez.
Speaker Change: Our plans are to aggressively increase the GEN-AI implementation capabilities that either came with the Leeway Hertz acquisition or that were part of Hackett, part of our development in GEN-AI efforts pre-Leeway Hertz acquisition.
George Sutton: I mean initial goal here is to double those resources as quickly as we can.
George Sutton: And the last one for me is on the market intelligence side.
Speaker Change: one of your key hires I believe had a non-compete
Speaker Change: inhibitor to being able to, you know, really focus on that business. I believe we're near the end of that non-competition term. Could you provide us an update there and, you know, what...
Rob Ramirez: what the plans are for the build out of the market intelligence offering.
Speaker Change: The answer is that that individual actually returns to us on the 7th.
Speaker Change: So, um...
Speaker Change: So and he was the
Speaker Change: The Global Leader of our Executive Advisory and that includes our Market Intelligence Program. So all of our subscription-based products. So we are welcoming him back later this week and obviously I'm sure he can't wait to get started and try to re-engage with that team and try to impact our year-end results and 2025 plan.
Speaker Change: Thank you.
Speaker Change: Thank you our next question
Speaker Change: Our next question is from Vincent Colicchio with Barrington Research.
Speaker Change: search, you may go ahead.
Vincent Colicchio: Yeah, Ted, shifting gears.
Vincent Colicchio: What should we expect on the e-procurement side? Should we expect this weakness to be extended?
Speaker Change: If it just remains flat to where it is right now, that year-over-year impact goes away at the end of Q1, so we will no longer have that.
Vincent Colicchio: But that negative impact, actually without that negative impact, GSBT would have been up close to 5% in the quarter.
Speaker Change: Should we expect to continue to have strength there?
Speaker Change: The answer is that you should consider strength as Rob just provided in his guidance comments. All three segments will grow and we expect our guidance rates indicate three to five percent year-over-year growth so follow Rob's guidance.
Speaker Change: Thank you.
Speaker Change: Thank you.
Vincent Colicchio: Thank you.
Speaker Change: And at this time I show no further questions. I will now turn the call back over.
Speaker Change: to Ted for final remarks.
Ted Fernandez: Thank you, operator. Let me thank everyone for participating in our third quarter earnings call. We look forward to updating you on the fourth quarter and our annual results when we report our fourth quarter results in the...
Speaker Change: early third quarter of February. Is that correct, Rob? Third week, I'm sorry. Early, early, early third week, mid-Feb, mid-February. Thank you for participating. We'll look forward to catching up soon. Thank you.