Resources Connection (RGP) risk factors, FY2025 10-K

Risks Related to the Business Environment

1. 01An economic downturn or deterioration of general macroeconomic conditions could adversely affect our global operations and financial condition
2. 02The market for professional services is highly competitive, and if we are unable to compete effectively against our competitors, our business and operating results could be adversely affected
3. 03based staffing firms; and the in-house or former in-house resources of our clients. The competition is likely to increase in the future due to the expected growth of the market and the relatively few barriers to entry
4. 04Bank failures or other events affecting financial institutions could adversely affect our and our clients’ liquidity and financial performance

Risks Related to Human Capital Resources

1. 05We must provide our clients with highly qualified and experienced consultants, and the loss of a significant number of our consultants, or an inability to attract and retain new consultants, could adversely affect our business and operating results
2. 06Our business could suffer if we lose the services of one or more key members of our senior management or key sales professionals
3. 07Significant increases in wages or payroll-related costs could have a material adverse effect on our financial results

Risks Related to Our Business Operations and Initiatives

1. 08Our business depends upon our ability to secure new projects from clients and renew expired contracts, and we could be adversely affected if we fail to do so
2. 09Our financial results could suffer if we are unable to achieve or maintain a suitable pay/bill ratio
3. 10We derive significant revenue and profits from contracts awarded through a competitive bidding process, which can impose substantial costs on us, and we will lose revenue and profits if we fail to compete effectively
4. 11Our contracts may contain provisions that are unfavorable to us and permit our clients to, among other things, terminate our contracts partially or completely at any time prior to completion
5. 12We may be unable to realize the level of the anticipated benefits that we expect from our restructuring initiatives, which may adversely impact our business and results of operations
6. 13Our recent digital expansion and technology transformation efforts may not be successful, which could adversely impact our growth and profitability
7. 14We may not be able to build an efficient support structure as our business continues to grow and transform
8. 15We may not be able to grow our business, manage our growth or sustain our current business
9. 16Our ability to serve clients internationally is integral to our strategy and our international activities expose us to additional operational challenges we might not otherwise face
10. 17We have acquired, and may continue to acquire, companies, and these acquisitions could disrupt our business
11. 18We may be unable to adequately protect our intellectual property rights, including our brand name

Risks Related to AI, Information Technology, Cybersecurity and Data Protection

1. 19Our computer hardware and software and telecommunications systems are susceptible to damage, breach or interruption
2. 20We use and expect to expand our use of AI and machine learning in our business and challenges with properly managing the development and use of these technologies could result in harm to our reputation, business or clients, legal liability and adversely affect our results of operations

Legal and Regulatory Risks

1. 21Failure to comply with data privacy laws and regulations could have a materially adverse effect on our reputation, results of operations or financial condition, or have other adverse consequences
2. 22We may be legally liable for damages resulting from the actions of our employees, the performance of projects by our consultants or for our clients’ mistreatment of our personnel
3. 23Changes in applicable tax laws or adverse results in tax audits or interpretations could have a material adverse effect on our business and operating results
4. 24Reclassification of our independent contractors by foreign tax or regulatory authorities could have an adverse effect on our business model and/or could require us to pay significant retroactive wages, taxes and penalties
5. 25The exclusive forum provisions in our Amended and Restated Bylaws could limit our stockholders’ ability to bring a claim in a judicial forum that it finds favorable for disputes with the Company or its directors, officers or other employees

Risks Related to Our Corporate and Capital Structure

1. 26It may be difficult for a third party to acquire us, and this could depress our stock price
2. 27The terms of our Credit Facility impose operating and financial restrictions on us, which may limit our ability to respond to changing business and economic conditions
3. 28Our New Credit Facility bears a variable rate of interest that is based on the Secured Overnight Financing Rate (“SOFR”) which may have consequences for us that cannot be reasonably predicted and may adversely affect our liquidity, financial condition, and earnings
4. 29We could be negatively affected as a result of activist shareholders
5. 30We may be unable to or elect not to pay our quarterly dividend payment