On this page of StockholderLetter.com we present the latest annual shareholder letter from HACKETT GROUP, INC. — ticker symbol HCKT. Reading current and past HCKT letters to shareholders can bring important insights into the investment thesis.


We are encouraged by the enthusiastic

response to AI XPLR   . The platform   s reception
underscores our commitment to de   ning and
enabling Digital World Class   performance
innovation and delivering tangible value to our
clients. As demand for Gen AI technologies
continues to increase, our AI XPLR should
emerge as a valuable platform for organizations
seeking to thrive in the AI era.
Ted A. Fernandez
Chairman & CEO
The Hackett Group, Inc.
CORPORATE
HEADQUARTERS
ANNUAL MEETING
The Hackett Group, Inc.
1001 Brickell Bay Drive
30th Floor
Miami, Florida 33131
United States
TEL: +1 305 375 8005
FAX: +1 786 772 2048
The Hackett Group shareholders are invited to attend our
Annual Meeting on Thursday, May 2, 2024 at 11:00 am
at The Hackett Group   s Corporate Headquarters, 1001
Brickell Bay Drive, 30th Floor, Miami, Florida 33131.
www.thehackettgroup.com
Dear Shareholders,
Fiscal 2023 will be remembered by our ability to maintain
our strong operating discipline while making signi   cant
strategic investments to grow our Executive Advisory and
Market Intelligence offerings and to launch AI XPLR   , our
Gen AI assessment and solutions platform. The growth of
our Executive Advisory offerings allows us to add high margin
recurring revenue relationships which also result in signi   cant
downstream opportunities for our business transformation
and technology consulting groups. Our new AI XPLR platform
creates an entirely new way for us to strategically help clients
address the rapidly emerging Gen AI marketplace. It also
allows us to reposition our highly recognized IP and trusted
strategic advisor and consulting permission to become
strategic architects of our clients    Gen AI journeys.
Our annual results were driven by the performance of our
Oracle Solutions segment, which was up strongly, driven by
the momentum we experienced since the second quarter of
2023. A new important development is the notable increase
in demand that we are experiencing in our historically strong
Enterprise Performance Management offerings.
Our SAP Solutions segment continued its solid performance
but was down slightly 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, these
investments should bene   t    scal 2024.
The performance of our Global SBT segment was solid
when compared to last year. Although the segment was
impacted by market conditions throughout the year, we
also saw a marked increase in the interest in Gen AI. More
importantly, prior to year-end we were able to launch our beta
version of our Gen AI solutions platform. In mid-January, we
formally announced the launch of AI XPLR which has led to a
signi   cant number of new client meetings and received very
favorable feedback. The client interaction has enabled us to
showcase the unique solutioning capability of our AI XPLR
platform which leverages AI to correlate task automation
opportunities in business process    ows to quickly identify
potential AI solutions. This allows our clients to prioritize
targeted improvements based on their individual strategies
rather than defaulting to pre-de   ned use cases to create their
Gen AI roadmap. We also leverage our rapidly growing Use
Case Library to further support planned AI initiatives. Our Gen
AI roadmaps also provide clients with bene   t case analyses
using our highly recognized benchmark database. We believe
our approach provides a comprehensive path from discovery
to a quanti   able and actionable AI roadmap. It also broadly
mobilizes and educates an organization rather than limiting a
very strategic initiative to a few dedicated individuals.
During the year we continued to aggressively invest in
growing our IP based Executive Advisory and Market
Intelligence programs. We have enhanced the product
architecture and pricing of our existing programs resulting
in a more powerful combination of highly focused IP and
access to expert practitioners emphasizing our advisor
expertise and applied knowledge research. Our Executive
Advisory programs are now delivered through our new
member platform, Hackett Connect   , which fully launched
in October of 2023. This new state of the art platform allows
all our existing and new members to avail themselves to our
experts, research, benchmarking metrics, and best practices
IP. By the second quarter of 2024, these programs should
also bene   t from the AI XPLR content which our members
can use to educate and mobilize their organization and
leverage on a self-directed basis. We expect the investments
made and foundational work completed in 2023 to lead to
increasing growth in these programs in 2024.
On the balance sheet side, in the short term you can expect
us to use our strong cash    ow from operations to continue
the pay-down of the outstanding balance of our credit facility.
Longer term, we plan to use our balance sheet and our
credit facility to fund acquisitions and to buy back stock while
continuing to invest in our business.
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. 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 in enterprise cloud applications, analytics
and AI work   ow automation are dramatically in   uencing
the way businesses compete and deliver their services. So,
what   s new? It   s the rapidly emerging demand for Gen AI.
Its boundless potential will result in an entirely new level
of Digital World Class   performance standards, forcing all
software and services providers to extend the value of their
existing offerings. We believe this will result in unprecedented
innovation which all organizations will have to consider.
On the talent side, competition for experienced executives
continues. Overall, we saw turnover continue to moderate
and remain low throughout the year, and we expect that trend
to continue. Longer term, we have transitioned to a hybrid
sales and delivery model which provides us with effective
access to our clients and their respective teams. This hybrid
model provides our associates with greater personal    exibility
to perform their de   ned responsibilities remotely, which is
valuable to them. This enables us to continue to attract and
retain talent.
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 these areas. We will also continue our
investment on our new Hackett Connect    member platform.
But what is new is the accelerated focus and investment
we are making in our Gen AI capabilities. We are utilizing
our AI XPLR    platform as the vehicle to integrate the Gen
AI impact across all our offerings. We have also hired critical
data and technology architecture resources to further
support our efforts. This should enable us to become critical
architects, advisors, and consultants to our clients    Gen AI
initiatives. Our ability to measure and assess the impact of
Gen AI by utilizing our AI assisted platform, our growing Use
Case Library along with our market intelligence about the
respective Gen AI solution providers is a powerful way to
help guide our clients through the unlimited opportunities
that they will have to consider. We see this as an opportunity
for our organization to provide an objective business
perspective to what has primarily been a technology
innovation story.
We continue to see strong downstream revenue from
our benchmarking and Executive Advisory clients, and our
business transformation and cloud application consulting
services. This    halo effect    has been approximately 40%
over the last several years. We believe this will only expand
with our AI XPLR offering. Organizations that rely on our
assessment, solutioning and research related IP are also
more likely to utilize our advisory and consulting services.
We continued to publish our Market Intelligence reports, with
the most recent reports focused on    nance and accounting
outsourcing (FAO), several dimensions of EPM and customerto-cash (C2C) receivables creation. Our unique insight
is our ability to measure    value realization    and provide
implementation insights that accelerate clients    business
performance. We will soon publish our research reports on
Gen AI and key solution providers which are valuable content
for our AI XPLR and our Executive Advisory programs.
We are exploring strategic partnerships that will enable us
to sell our IP through new channels and allow us to reach
beyond our current Global 1000 focus in an ef   cient manner.
We continue to rede   ne our global benchmarking leadership
through enhancements in Quantum Leap   (QL), our digital
benchmarking software-as-a-service solution. Along with
our Digital Transformation Platform (DTP), these platforms
allow us to deliver more information with signi   cantly less
client effort. They enable clients to leverage our IP to create
compelling bene   t case assessments, accelerate process
   ow and software con   guration decisions, and track the
value realization of transformation initiatives over the life of
their respective efforts. We believe the integration of these
platforms with AI XPLR signi   cantly enhances the value
of our IP and fully aligns our perspective on new Digital
World Class   performance standards that will be achievable
through emerging Gen AI technology and related use cases.
We have a 20-minute demo on the Investor Relations
page of our website. Investors can utilize this demo to
become more familiar with the capabilities of our QL and
DTP platforms. We are also adding videos that preview our
Hackett Connect and Hackett AI XPLR platforms.
Lastly, although that we are con   dent 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 that can accelerate our growth.
As always, thank you to our associates for their tireless
efforts and their contributions to our performance. I also
want to extend my gratitude to our clients and shareholders
for their loyalty and continued support. It is incredibly
valuable to our organization and highly appreciated.
Ted A. Fernandez
Chairman & CEO
The Hackett Group, Inc.
 • shareholder letter icon 4/1/2024 Letter Continued (Full PDF)
 • stockholder letter icon 3/23/2023 HCKT Stockholder Letter
 • stockholder letter icon More "Business Services & Equipment" Category Stockholder Letters
 • Benford's Law Stocks icon HCKT Benford's Law Stock Score = 73


HCKT Shareholder/Stockholder Letter Transcript:



We are encouraged by the enthusiastic

response to AI XPLR   . The platform   s reception
underscores our commitment to de   ning and
enabling Digital World Class   performance
innovation and delivering tangible value to our
clients. As demand for Gen AI technologies
continues to increase, our AI XPLR should
emerge as a valuable platform for organizations
seeking to thrive in the AI era.
Ted A. Fernandez
Chairman & CEO
The Hackett Group, Inc.
CORPORATE
HEADQUARTERS
ANNUAL MEETING
The Hackett Group, Inc.
1001 Brickell Bay Drive
30th Floor
Miami, Florida 33131
United States
TEL: +1 305 375 8005
FAX: +1 786 772 2048
The Hackett Group shareholders are invited to attend our
Annual Meeting on Thursday, May 2, 2024 at 11:00 am
at The Hackett Group   s Corporate Headquarters, 1001
Brickell Bay Drive, 30th Floor, Miami, Florida 33131.
www.thehackettgroup.com

Dear Shareholders,
Fiscal 2023 will be remembered by our ability to maintain
our strong operating discipline while making signi   cant
strategic investments to grow our Executive Advisory and
Market Intelligence offerings and to launch AI XPLR   , our
Gen AI assessment and solutions platform. The growth of
our Executive Advisory offerings allows us to add high margin
recurring revenue relationships which also result in signi   cant
downstream opportunities for our business transformation
and technology consulting groups. Our new AI XPLR platform
creates an entirely new way for us to strategically help clients
address the rapidly emerging Gen AI marketplace. It also
allows us to reposition our highly recognized IP and trusted
strategic advisor and consulting permission to become
strategic architects of our clients    Gen AI journeys.
Our annual results were driven by the performance of our
Oracle Solutions segment, which was up strongly, driven by
the momentum we experienced since the second quarter of
2023. A new important development is the notable increase
in demand that we are experiencing in our historically strong
Enterprise Performance Management offerings.
Our SAP Solutions segment continued its solid performance
but was down slightly 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, these
investments should bene   t    scal 2024.
The performance of our Global SBT segment was solid
when compared to last year. Although the segment was
impacted by market conditions throughout the year, we
also saw a marked increase in the interest in Gen AI. More
importantly, prior to year-end we were able to launch our beta
version of our Gen AI solutions platform. In mid-January, we
formally announced the launch of AI XPLR which has led to a
signi   cant number of new client meetings and received very
favorable feedback. The client interaction has enabled us to
showcase the unique solutioning capability of our AI XPLR
platform which leverages AI to correlate task automation
opportunities in business process    ows to quickly identify
potential AI solutions. This allows our clients to prioritize
targeted improvements based on their individual strategies
rather than defaulting to pre-de   ned use cases to create their
Gen AI roadmap. We also leverage our rapidly growing Use
Case Library to further support planned AI initiatives. Our Gen
AI roadmaps also provide clients with bene   t case analyses
using our highly recognized benchmark database. We believe
our approach provides a comprehensive path from discovery
to a quanti   able and actionable AI roadmap. It also broadly
mobilizes and educates an organization rather than limiting a
very strategic initiative to a few dedicated individuals.
During the year we continued to aggressively invest in
growing our IP based Executive Advisory and Market
Intelligence programs. We have enhanced the product
architecture and pricing of our existing programs resulting
in a more powerful combination of highly focused IP and
access to expert practitioners emphasizing our advisor
expertise and applied knowledge research. Our Executive
Advisory programs are now delivered through our new
member platform, Hackett Connect   , which fully launched
in October of 2023. This new state of the art platform allows
all our existing and new members to avail themselves to our
experts, research, benchmarking metrics, and best practices
IP. By the second quarter of 2024, these programs should
also bene   t from the AI XPLR content which our members
can use to educate and mobilize their organization and
leverage on a self-directed basis. We expect the investments
made and foundational work completed in 2023 to lead to
increasing growth in these programs in 2024.
On the balance sheet side, in the short term you can expect
us to use our strong cash    ow from operations to continue
the pay-down of the outstanding balance of our credit facility.
Longer term, we plan to use our balance sheet and our
credit facility to fund acquisitions and to buy back stock while
continuing to invest in our business.
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. 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 in enterprise cloud applications, analytics
and AI work   ow automation are dramatically in   uencing
the way businesses compete and deliver their services. So,
what   s new? It   s the rapidly emerging demand for Gen AI.
Its boundless potential will result in an entirely new level
of Digital World Class   performance standards, forcing all
software and services providers to extend the value of their
existing offerings. We believe this will result in unprecedented
innovation which all organizations will have to consider.
On the talent side, competition for experienced executives
continues. Overall, we saw turnover continue to moderate
and remain low throughout the year, and we expect that trend
to continue. Longer term, we have transitioned to a hybrid
sales and delivery model which provides us with effective
access to our clients and their respective teams. This hybrid
model provides our associates with greater personal    exibility
to perform their de   ned responsibilities remotely, which is

valuable to them. This enables us to continue to attract and
retain talent.
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 these areas. We will also continue our
investment on our new Hackett Connect    member platform.
But what is new is the accelerated focus and investment
we are making in our Gen AI capabilities. We are utilizing
our AI XPLR    platform as the vehicle to integrate the Gen
AI impact across all our offerings. We have also hired critical
data and technology architecture resources to further
support our efforts. This should enable us to become critical
architects, advisors, and consultants to our clients    Gen AI
initiatives. Our ability to measure and assess the impact of
Gen AI by utilizing our AI assisted platform, our growing Use
Case Library along with our market intelligence about the
respective Gen AI solution providers is a powerful way to
help guide our clients through the unlimited opportunities
that they will have to consider. We see this as an opportunity
for our organization to provide an objective business
perspective to what has primarily been a technology
innovation story.
We continue to see strong downstream revenue from
our benchmarking and Executive Advisory clients, and our
business transformation and cloud application consulting
services. This    halo effect    has been approximately 40%
over the last several years. We believe this will only expand
with our AI XPLR offering. Organizations that rely on our
assessment, solutioning and research related IP are also
more likely to utilize our advisory and consulting services.
We continued to publish our Market Intelligence reports, with
the most recent reports focused on    nance and accounting
outsourcing (FAO), several dimensions of EPM and customerto-cash (C2C) receivables creation. Our unique insight
is our ability to measure    value realization    and provide
implementation insights that accelerate clients    business
performance. We will soon publish our research reports on
Gen AI and key solution providers which are valuable content
for our AI XPLR and our Executive Advisory programs.
We are exploring strategic partnerships that will enable us
to sell our IP through new channels and allow us to reach
beyond our current Global 1000 focus in an ef   cient manner.
We continue to rede   ne our global benchmarking leadership
through enhancements in Quantum Leap   (QL), our digital
benchmarking software-as-a-service solution. Along with
our Digital Transformation Platform (DTP), these platforms
allow us to deliver more information with signi   cantly less
client effort. They enable clients to leverage our IP to create
compelling bene   t case assessments, accelerate process
   ow and software con   guration decisions, and track the
value realization of transformation initiatives over the life of
their respective efforts. We believe the integration of these
platforms with AI XPLR signi   cantly enhances the value
of our IP and fully aligns our perspective on new Digital
World Class   performance standards that will be achievable
through emerging Gen AI technology and related use cases.
We have a 20-minute demo on the Investor Relations
page of our website. Investors can utilize this demo to
become more familiar with the capabilities of our QL and
DTP platforms. We are also adding videos that preview our
Hackett Connect and Hackett AI XPLR platforms.
Lastly, although that we are con   dent 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 that can accelerate our growth.
As always, thank you to our associates for their tireless
efforts and their contributions to our performance. I also
want to extend my gratitude to our clients and shareholders
for their loyalty and continued support. It is incredibly
valuable to our organization and highly appreciated.
Ted A. Fernandez
Chairman & CEO
The Hackett Group, Inc.



shareholder letter icon 4/1/2024 Letter Continued (Full PDF)
 

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