Good afternoon, ladies and gentlemen, and welcome to the Resources Connection, Inc. conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. At this time, I would like to remind everyone that management will be commenting on results for the fourth quarter ended May 28th, 2022. They will also refer to certain non-GAAP financial measures. An explanation and reconciliation of these measures to the most comparable GAAP financial measures are included in the press release issued today. Today's press release can be viewed in the investor relations section of RGP's website and also filed today with the SEC. Also, during this call, management may make forward-looking statements regarding plans, initiatives, and strategies in the anticipated financial performance of the company.
Such statements are predictions and actual events or results may differ materially. Please see the Risk Factors section in RGP's report on Form 10-K for the year ended May 28th, 2021 for a discussion of risks, uncertainties and other factors that may cause the company's business, results of operations, and financial condition to differ materially from what is expressed or implied by forward-looking statements made during this call. Such discussion will also be included in the Risk Factors section in RGP's report on Form 10-K for the year ended May 28th, 2022 , which will be filed today, July 28th, 2022 . I'll now turn the call over to RGP's CEO, Kate Duchene.
Thank you, operator. Good afternoon, everyone, and thanks for being with us. We're very proud of our recent performance, strongly capping off an outstanding year. We delivered exceptional Q4 results with double-digit revenue growth and the highest margin and profitability levels reached in well over a decade. These results all exceeded the high end of our guidance. Specifically, Q4 revenue was almost 26% higher than prior year. Gross margin improved more than 170 basis points over prior year to 41.3%. Gross profit improved more than 31% quarter-over-quarter, and adjusted EBITDA margin improved 340 basis points to 15.4% over prior year. We have communicated throughout the year that we are growing top line, improving pricing, and managing costs.
We stated at the beginning of fiscal 2022 that our goal is to deliver mid-teen adjusted EBITDA margins over the long term. In Q4, we exceeded this goal while also investing in the business and kicking off a major technology modernization project. This performance trend reflects the hard work we have put into the business to continue increasing shareholder value. These financial accomplishments also demonstrate that we're on the right path and our strategies are on point. We have successfully built a business model for agile, diverse, and expert talent who wants to work in consulting in a different way. Leading with agility is more relevant and essential than ever in today's macro environment. We work across five core areas of expertise, finance and accounting, risk and compliance, digital, supply chain, and people experience.
We are the go-to project execution firm with project management, change management, and subject matter expertise for many of the world's most beloved brands as they tackle a myriad of transformation and optimization initiatives. We continue to build deeper and broader client relationships to gain mission-critical status and drive recurring revenue. We made a strategic decision to divest the TaskForce business in Germany at the close of the fiscal year. Effective May 31st, 2022, we sold the business back to senior leadership at TaskForce for two primary reasons. First, as part of our earlier restructuring initiative in Europe, we made the decision to focus on project execution in our strategic client segment, which includes large global enterprises with wholesale transformation agendas. This client focus does not align with the TaskForce middle-market client strategy in the interim management space.
Second, RGP's consultant engagement, while primarily agile, is built on a suite of benefits and professional development that is different than the TaskForce approach of creating a partner network of independents. Going forward, we will invest in building strategic client account teams in Germany for our healthcare and financial services practices. Next, I want to spend a few minutes outlining our strategic plan for the next three years and how we are breaking the plan down into enterprise objectives for fiscal 2023. Our strategic plan has five core pillars spanning digital to brand to operational excellence, which we first outlined at our Investor Day. The plan is designed to modernize RGP to align to today's workforce and consulting needs for both talent and clients. We began to invest in digital transformation three years ago, and it's only growing in priority.
In fiscal 2023, we will work to advance three projects, the commercialization of HUGO, which is expanding into the California market this quarter, the execution of Project Phoenix, which is the modernization of our core technology stack, and the continued improvement of consultant experience through digital means. The brand work for fiscal 2023 is twofold. We are refreshing our brand voice to align with hybrid workforce experience strategy and where our clients need us most, execution with subject matter expertise. As we have shared previously, our business model is aligned well to the needs of modern professionals who want more control, choice, and transparency in how, where, when, and on what they work. We empower our talent by giving them access to high-value work on their terms. Our employee brand proposition is built on shared values, empathy, control, and choice.
From the client perspective, our business also aligns well with leading companies who need access to critical expert talent to accelerate projects with efficiency and better outcomes. Through fiscal 2023, we will also be refining our brand architecture to make our services easier to buy and sell. Within our five core areas of expertise, we engage with our clients in two primary ways, project consulting and on-demand talent. Within project consulting, we engage as management consultants, scoping and leading projects, and we co-execute project deliverables defined by our clients' strategic teams. With respect to project consulting, we are working to better focus our delivery capabilities so we can move faster in closing business. We will continue improving our go-to-market design and strategic pursuits to deepen client centricity.
We have trusted relationships with our largest clients, and the goal is to deepen and broaden them through expanded marketing account and industry vertical programs. We have established a new emerging account segmentation to serve the long tail of the business in more efficient ways, including an omni-channel approach with HUGO. For fiscal year 2023, we have established a strategic pricing team within go-to-market to ensure we are applying a value-based approach to pricing. As the business has transformed over the last 10 years from primarily on-demand talent support to primarily project consulting, pricing strategy still has ample room to evolve. Finally, as we reviewed in our Investor Day, we will pursue strategic and disciplined tech and M&A to strengthen areas of practice where we see enhanced market opportunities. We believe we have compelling opportunities in certain areas, including digital, people experience, and finance and accounting advisory services.
These strategies and enterprise objectives I've outlined will serve to strengthen our business in the face of high inflation and recessionary pressures in the macro environment. RGP's business today is much more diverse than during the great financial crisis of 2008 and 2009, when we focused predominantly on finance and accounting staffing work, including SOX. Today, we serve the needs of large and mid-sized organizations who continue to move forward with multifunctional transformational initiatives even as they enter choppier waters. Our growing pipeline demonstrates that transformation and operational excellence initiatives remain imperative for our clients. In addition, for clients facing macro uncertainty and reluctance to increase permanent headcount, our model presents an attractive alternative to execute on mission-critical work. Recent headlines declare that well-known companies are putting the brakes on full-time equivalent hiring and bringing more agility into their workforce.
This foundational shift in talent strategy for greater resiliency is a favorable tailwind for our business. Our growing pipeline metrics and improving win rates reinforce the relevancy of our business model in today's economic environment. It's also worth noting that even for clients that don't alter their hiring plans in response to recessionary pressures, the persistence of a tight labor market alone favors RGP's model, which allows clients access to high-quality talent on a project or on-demand basis. I will close with a story of resiliency from one of our consultants that helps explain our continued strong performance. It reinforces why we describe our culture at RGP as human first, showcasing how our people lead with empathy and care in a troubled world. Grace Adesoun, a long-term consultant from the Chicago market, experienced a very serious medical emergency in her family.
Her husband was suddenly diagnosed with a rare illness that required emergency brain and heart surgery. Grace needed time off with financial protection to continue to care for him and their young son. The RGP team mobilized right away, coordinating a PTO donation program that afforded Grace the time off and peace of mind to care for her family. Her husband is now recovering very well, and Grace had this to say about her RGP experience at the first post-pandemic in-person Chicago consultant event last week. I quote, "One of the theme topics from yesterday was the value of RGP. From a consultant perspective, every single one of us was screaming from the mountaintop how much we are valued here. Not just us, but our entire family unit feels it too. To be heard, supported, and cared for is truly a gift. I am never leaving.
Thank you for opening your hearts in so many ways I cannot begin to express." End quote. This story exemplifies why we are attracting the best talent in the marketplace by taking great care of our people, who are then able to take great care of our clients and one another. Getting stickier with exceptional clients and consultants is our goal. I'll now turn the call over to Tim for an update on operations.
Thank you, Kate, and good afternoon, everyone. During the fourth quarter, we saw continued strong revenue growth, operational metrics, and margin performance. In fact, this marked the seventh consecutive quarter of sequential growth. Pipeline and deal flow remained robust, and the momentum we had noted at the end of the third quarter continued throughout the fourth quarter and into June and July. Revenue increased by 27.5% over prior year quarter on a same-day constant currency basis, while top of the funnel activity was strong, fortifying the pipelines going into fiscal 2023. Geographic performance in the quarter was consistently strong across our core business with strategic accounts, Asia Pacific, Europe, North America, healthcare, Countsy and Veracity all performing well.
Despite some of the recessionary worries in the current macro environment, we continue to encounter strong demand profiles across our portfolio, propelled by tenacious operational focus and the continued shift to co-delivery on important initiatives. We see this continually in our client base, both with new and existing clients who are undertaking transformational projects at a faster and faster pace. This change and the desire to partner with an agile project execution firm has provided the backdrop for increased opportunities, including expanding work within the same initiative, winning adjacent work based on delivery prowess, and being utilized in new ways despite long-standing, albeit previously narrow relationships. In the third quarter, I highlighted a large technology client undergoing a transformation which included a carve-out and stand-up of an entity.
The initial deployment of the project was to implement an ERP and related applications utilizing a blended team comprised of client and RGP personnel at the functional and technical program level. That work continues, and our footprint has increased to support the documentation and optimization of key global business processes, as well as functional execution within a supply chain organization. As the RGP team has continued to demonstrate true partnership and capability, the team continues to grow, and we see further opportunity to assist in other key functional areas. This was a new client that has continued to embrace co-delivery and fully understands the value of RGP in helping them quickly meet their objectives. Similarly, at a new Midwestern financial services client, we closed an initial Veracity engagement focused on workforce experience and the relaunch of an intranet earlier this year.
That project has since increased in scope to nearly double the initial proposal, and the relationship has rapidly expanded, leading to new Veracity engagements focused on redesign of existing technology implementations. Additionally, we have begun to identify more core RGP work leveraging this initial breakthrough with Veracity. The other client example is a long-term, long-time energy client which has traditionally utilized RGP for on-demand talent but has recently started to migrate their workforce strategy to utilize partners in co-delivery of important projects. They have always appreciated our ability to solution expediently and decided to widen their aperture to work with us on a delivery of a key technology implementation. Today, we have a team of nearly two dozen deployed in North America, Europe and Asia, providing project management and functional expertise.
On the candidate side, we continue to attract strong talent to our company and have driven down attrition significantly during the year. As Kate mentioned, we compete successfully with traditional employers both in industry and at other professional services firms because we offer flexibility and control while retaining financial security, community, learning pathways and other protections that have been the hallmark of traditional employment. While the labor market continues to be tight, our teams that are focused on talent acquisition and consultant engagement have done an incredible job attracting and retaining talent. We've seen strong hiring trends that continue throughout the quarter, and our consultant count remains at the highest level in many years.
We expect this trend to continue given the shift in the way people want to work and live, and we are rapidly becoming the premier destination for professional talent that is demanding flexibility and daring to work differently. Included in our overall consultant count are many boomerangs, an affectionate term we use for alumni who returned to us, many of whom left for the allure or promise of something that didn't materialize. As an example, one of our consultants joined RGP in the fall of 2020. She immediately hit the ground running, demonstrating field experience, a take charge style and the ability to build teams. The client took notice and elevated her to an even more prominent role in their finance transformation. During her time on the project, she continued to be approached by both the client and other companies about joining their team.
Finally, in the spring of 2021, she relented, joining a fast-growing startup. Six months later, she returned to RGP as she missed RGP's flexible model, the support of her RGP team, the challenge of new assignments, and her ability to work a hybrid schedule. This example shows how powerfully the desire for flexibility and control has shifted the mindset of the workforce at large. Clients and consultants demand agility and will move quickly to get it. Over time, we expect this shift to broaden and accelerate, increasing the number of roles and functions that are full-time agile. Now let me turn back to our fourth quarter operations. During the quarter, we saw continued pipeline growth and velocity building on an exceptionally strong third quarter. Pipeline and booked revenue continued to be very strong.
Also, while we made progress with respect to pricing, increasing bill rates by 4% compared to prior year quarter at 2% sequentially, we continue to see pricing leverage as an opportunity across the enterprise and remain focused on this strategic objective. Lead generation and opportunity identification continued to be strong into Q1, and the early weeks of the new fiscal year have shown strong positive trends in revenue pipeline and closed deals. While we are cognizant of potentially broader macro conditions, early revenue trends remain consistent with Q4 and seasonal patterns typical of the summer months prior to the pandemic. Finally, let me touch on operational leverage. As in prior quarters, in Q4, we continued to focus on controlling fixed costs and operating efficiently. Adjusted EBITDA margin improved significantly, both sequentially and when compared to prior year quarter.
We continue to operate in a hybrid fashion, but are committed to serving our clients based on what the situation dictates. I will now turn the call over to Jen for a more detailed review of our fourth quarter results.
Thank you, Tim, and good afternoon, everyone. We achieved the best financial performance in over a decade during fourth quarter. Revenue of $217 million exceeded the high end of our guidance and represented a 28% year-over-year growth after adjusting for currency and business day impact. The sustained top line growth over the last seven consecutive quarters reflects our ability to execute and the relevance of our agile business model in today's changing workplace and macro environment. In addition to excellent top line growth, we also successfully expanded our adjusted EBITDA margin by 340 basis points from the prior year quarter to 15.4%, which is also the highest margin in over a decade. We continue to see broad-based growth across our core markets, client segments, solution areas, as well as industries.
In a persistently tight labor market, we continue to support the needs of our clients in filling both their workforce gaps and co-execution demands. Revenue in on-demand talent, which we formerly called professional staffing, increased 37% year-over-year, while project consulting revenue increased by 21%. We continue to drive growth within our strategic client accounts by deepening our relationships to expand our services into more buying centers. Revenue from this client segment increased 17% over the prior year quarter. We saw strong growth across all of our solution offerings. Finance and accounting, risk and compliance, and business transformation all grew approximately 30% year-over-year. On the industry front, revenue growth in the healthcare, financial services, and technology industries also all well exceeded 30% compared to the prior year quarter.
Geographically, our revenue in North America improved 30% year-over-year, while Europe and Asia Pac grew 9% and 29% on the same-day constant currency basis. Gross margin in the fourth quarter was 41.3%, up 170 basis points over the same quarter a year ago. Our ongoing efforts to enhance pricing continue to pay dividends. Enterprise average bill rate of $131 represents an increase of 4% compared to the prior year quarter and 2% compared to Q3 of fiscal 2022. As a result, pay bill ratio improved by 190 basis points from the prior year quarter and 110 basis points compared to Q3, driving the overall gross margin improvements. We believe there are abundant opportunities to continue to drive revenue growth and gross margin expansion through higher bill rates.
Turning to SG&A. Over the last 24 months, we have made significant structural improvements in SG&A through our restructuring efforts to reduce fixed costs. We've also made a number of operational enhancements to drive higher operating leverage. Now coupled with significantly higher revenue this quarter, run rate SG&A expense for the quarter was $56.3 million or 25.9% of revenue, a 190 basis point improvement compared to the same period a year ago. As a reminder, run rate SG&A excludes non-cash stock compensation, restructuring charges, contingent consideration, and technology transformation costs. We will continue to invest in our technology platform to build more automation and self-service capabilities to unlock additional operating efficiency and scalability in our business. Now turning to the other components of our financial statements. Our effective tax rate for the quarter was 26.1%.
The gain in profitability in our European entities contributed to the more favorable effective tax rate as the benefits from historical NOLs were utilized. Adjusted diluted EPS for Q4 was $0.67 per share, compared to $0.80 in Q4 of fiscal 2021, which included a one-time favorable impact of $0.39 per share relating to an NOL carryback under the CARES Act. We generated $27 million of cash from operations during the fourth quarter and ended the fiscal year with $104 million of cash and cash equivalents. As Kate mentioned in her remarks, we completed the sale of taskforce subsequent to the end of the fiscal year. The transaction did not result in any material financial impact in fiscal 2022. While our top line revenue in fiscal 2023 will be adversely impacted by the divestiture, we expect there will be favorable impact on our enterprise profitability.
I'll close with our first quarter outlook. We believe the strength in our business is solid despite the volatility in the macro environment. Consistent with industry and market trends, while we anticipate continued near to midterm revenue growth, the pace of growth is expected to normalize compared to the 28% year-over-year revenue growth we experienced in fiscal 2022. As we mentioned during our Investor Day, we see a range of 6%-9% revenue CAGR from fiscal 2022 to 2025. Our first quarter revenue is expected to be in the range of $195 million-$200 million. This range includes the impact of the TaskForce divestiture as well as our anticipation of pent-up summer vacation impact this year. For comparison, our first quarter fiscal 2022 revenue was $176 million excluding TaskForce.
Gross margin in Q1 is expected to be in a range of 39.5%-40%, reflecting summer seasonality.
Our run rate SG&A is expected to be in the range of $53 million-$58 million. With that, I now would like to open it up for Q&A.
Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Andrew Steinerman with JPMorgan. You may proceed.
Hi, Jen. You were good to give you know outlook into the first quarter of the fiscal. I was just wondering if you're expecting to see kind of normal seasonal trends, kind of monthly, you know, kind of June, July, August, as you think about, you know, the quarter as a whole. That's my first question. And then my second question has to do with HUGO. I was just hoping you could give us any quantitative figures of how the initial HUGO efforts are going within New York City Tri-State market. You know, I'm particularly thinking about kind of the engaged professional side, the talent supply side that is using HUGO. And just remind us if that grouping of HUGO professionals, meaning the talent supply, is totally separate from RGP's existing professional database.
Hi, Andrew. Your first question is with respect to summer impact. Yes, we do expect more summer impact this year. You know, travel overall has picked up, and so we do expect more this summer through, you know, June, July as well as August. The second question on HUGO. Yes, we launched it in Tri-State back in October of 2021. You know, so far, I think it's too early to share any financial results right now. You know, what I can share is that talent adoption is up, and we've gotten favorable feedback from all of our constituencies. You know, we do expect to roll this out in the California and Texas market in fiscal 2023.
We'll have more to share probably later on this year.
Right.
Yeah.
The last part of that question.
This is Kate.
Yeah. Is it totally separate professional database?
Yes.
Andrew, it's Kate. It is almost 100% separate.
Got it.
You know, we're building that talent pipeline with the center of excellence in the Philippines as well.
Okay. Thank you, Kate.
Mm-hmm.
Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Our next question comes from Mark Marcon with Robert W. Baird. You may proceed.
Hey, good afternoon, and congratulations. It's nice to see the progress that you've worked so hard to accomplish and the results coming through. Can you talk a little bit about the bill rates, yeah, and the gross margin expansion? It was nice to see the bill rates are up 4%. What are you seeing in terms of pay rate inflation and how, you know, how are you thinking about both bill rate and pay rate inflation as we go into not just the first quarter, but, you know, looking a little bit longer term?
Hey, Mark, it's Tim. I'll let Jen talk a little bit about the pay rate and, you know, if you want more quantitatively, but let me just add some color to your question. You know, when we look at the bill rate side of our business, and we've said this for many quarters, we believe that there's upside pricing leverage in our business. A lot of that has to do with the way we think about pricing our projects and pricing the value, which we haven't done as good a job as we'd like to over the years, but have started to make slow progress.
In fact, if you look over the last several quarters, we've been slowly increasing our average bill rate, but we think there's still plenty of ceiling and opportunity there. In terms of pay rates, the pay rates have been actually pretty consistent this year. We haven't seen a significant increase relative either to some of the economic factors or the tight labor market. You know, that could change a little bit as we go over the next year, but I would say to you that the people who choose to work with us are taking into account a whole host of factors beyond simply compensation. As a result, what we've seen is that they're making a pretty holistic decision in terms of joining us for employment.
How would you anticipate that the strong gross margins and that bill pay spread are gonna evolve as we go through the year? You know, both in terms of, like, the progress that you're seeing now and then how that could end up fluctuating depending on, you know, what the macro environment's like.
Mark, it's Jen. I can take this one. You know, I think as Tim said, I mean, we see a lot of upside from a bill rate perspective and, you know, this year, even though there's been a tight labor market and we haven't really seen pay rate tick up that much. It's you know it ticked up a little bit, but essentially it's pretty flat. We do expect that, you know, this year, if the labor market continues to be tight, that pay rate could increase. But we, you know, do believe that our bill rate upside is going to outpace pay rate increases. You know, pay bill ratio should improve over this fiscal year.
Okay, great. I mean, the EBITDA margin, you know, expansion was impressive. I mean, it's obviously the best in years. How sustainable do you think the type of performance that we ended up seeing in the fourth quarter is? How sustainable is that? Was there anything, you know, that was kind of a one-time factor that ended up helping to drive that? Because it was really great.
Yeah. I mean, Q4 didn't have any holidays. So, you know, we're gonna go through, as we go through fiscal 2023, we're gonna go through the typical seasonality throughout the quarter. Q1, you're really looking at, you probably, you know, we're not going to achieve 15% in Q1 just given the holiday as well as the summer vacation impact. On a full year basis, we said this during our Investor Day, that, you know, this year, heading into fiscal 2023, you know, we expect our SG&A to continue to hold at the, you know, at the 27%. We're also making some investments this year back into our business, you know, making investments in our digital practice as well as our technology platform projects there.
It is gonna impact SG&A, or if you think about fiscal 2023 as a whole. Overall, as we continue to grow our revenue, you know, our SG&A leverage is gonna continue to be favorable.
That's great. Can you talk a little bit, Tim, you mentioned the pipeline building. Can you talk about what the source of the pipeline build is? How much of that is coming, you know, in on-demand versus project consulting? To what extent do you have exposure to, you know, early stage companies that are, you know, going through financings versus, you know, some of your more traditional, you know, Fortune 2000 type companies?
Yeah, I mean, first of all, I think, you know, the composition of our pipeline, if you think about the mix of our business between project consulting and on-demand talent this year, on-demand talent was probably a little hotter this year because of some of the things that were going on with the Great Resignation and things like that. There were a lot of companies that were and are still dealing with gaps in parts of their infrastructure that need to be filled. The pipeline, when I look at it, kind of mirrors that still going forward. You know, I think there are a lot of companies that are going through important strategic or transformative initiatives, and so we're getting pulled into those.
Also positively, because of some of the tightness in the labor market, and it's not bouncing back on the professional side, we're seeing continued strength on the on-demand side as well. With regards to our customer mix, I mean, the majority of our mix, we don't have a lot of exposure to early stage companies outside of our accounting business, which is still really strong, because of the way of how sticky they are relative to the businesses themselves. They're actually a critical path. For the majority of the core business, most of that work and most of the pipeline is being generated from more of the Fortune 1000 type clients that we have.
Great. Can you just give us an update on the big offices just in terms of, you know, how you feel about the leadership across the board? Obviously, it sounds like the leadership in Chicago is really standing out, but just wondering if you could, you know, talk about the tri-state, Southern Cal, Northern Cal, Chicago, Houston.
Yeah. I mean, I would characterize it as saying that I feel very strong about our leadership there. I think our big muscles are functioning well. I think you're right about Chicago. We have new leadership there and an invigorated team. Northeast and Southeast have strong leadership and Northeast has bounced back obviously over the last year and has continued strength. The West Coast continues to be strong. We have some new leadership in Houston, but we've already started to see progress there as well. I, you know, I'm as optimistic as I've ever been relative to our prospects because of the leadership that we have.
Terrific. That's great to hear. Thanks for the comments.
You got it.
Thank you. One moment for questions. Our next question comes from Marc Riddick with Sidoti. You may proceed.
Hi, good afternoon. I was wondering if you could talk a little bit about maybe some of the differences that you're seeing as far as activity from your various industry verticals, particularly if there are any that have been showing better strength more recently or maybe impacted a little differently on the spending over the last few months, given you know the potential for economic challenges.
Yeah. Hi, Mark. I'll give you some color and then Jen wants to jump in she can here. I will tell you that, you know, we started really focusing on healthcare three, four years ago, and we've seen that continually grow and have strength. We saw, especially in this last year, financial services and technology come forward as really strong pieces of our business, and that strength continues relative to the pipeline that we're seeing. We don't have a ton of exposure in retail or in energy sector. You know, I would say the top three industries are the ones that I listed, and they've shown continued strength, both going through the year and continuing on into the new fiscal.
Yeah, Mark, I mean, from a growth standpoint, all three industries that Tim referred to, healthcare, financial services, and technology, they're all in the mid-30% range growth, compared to last year.
That's great. I wanted to just follow up on just from the timeframe of the investment spending for the upcoming years. Wondering if there's any. Hello, can you hear me?
Mark.
Yeah, you lost me for a moment.
Oh, okay. Sorry. I'll repeat that.
Yeah.
I was wondering if you could.
You lost us.
Sorry, if you could give us a little bit of update as to the timeframe of the investment spending that you talked about at your Investor Day, and sort of how that might flow out through 2023. Thanks.
The investment spending.
Yeah.
Yeah. Mark, I think you're referring to the technology modernization project and spending there.
That's right.
We're in the final phase of developing a detailed roadmap, and we should have more clarity at the end of August. The total investment that we planned as we stated on Investor Day is, you know, between $25 million-$30 million. Majority of that will. Well, we're gonna start the official implementation beginning in September. This is gonna be Q2. I expect, you know, CapEx will be elevated starting in Q2 of fiscal 2023. You're probably looking at roughly around, you know, $3 million-$4 million of CapEx of spending on a quarterly basis.
Okay, great. The last one for me, I was just wondering, just as far as sort of how the digital transformation picture looks for the scope of the projects that you're seeing, whether it's, you know, whether that's changed much from the beginning of the year, or the focus that you're seeing from customers, whether, you know, you've seen any shifts as far as their type of focus or projects that they're engaging in, whether that's macroeconomically driven or otherwise. Thank you.
Yeah. I think, Mark, we're seeing the same kind of projects come through the pipeline. It's a lot of transformational type initiatives, mission-critical work. Competition, the desire to automate and drive digitization is not changing in our client base. I think we're seeing our projects strengthen a bit, and the value of our projects is increasing as well.
Excellent. Thank you for taking my questions.
Thank you.
Thank you. Our next question comes from Andrew Steinerman with JPMorgan. You may proceed.
Hi, Jen. I just wanted to jump a little bit more into the first quarter of 2023 revenue guide of $195 million-$200 million. If you could just mention-
Mm-hmm
How many business days we have in this current quarter. I think a year ago quarter it was 63. Also in that $1 95 million-$200million, if you could just, you know, tell us how much FX headwind you're assuming, and then if you could total it out for us. You can imagine I'm looking for what's the implied organic constant currency same day basis growth rate at the middle.
Mm-hmm.
of the range.
Yeah, sure. It's the same number of business days in Q1 of fiscal 2023. 63 to 66 to 63. It is on the same-day basis already. You know, at the top end of the range or mid to top end of the range, you're looking at about 14% growth year-over-year. We've already baked in some FX impact into the guidance that we're giving of $195 million-$200 million. On a constant-currency same-day basis, you know, you're probably looking at a 15%+ growth year-over-year.
At the top end, right?
Correct. Yeah.
Okay. Thanks, Jen. Appreciate it.
Mm-hmm.
Thank you. I'm not showing any further questions at this time. I would now like to turn the call back over to Kate Duchene for any further remarks.
Sure. Thank you, operator. Thank you all for attending this call. We appreciate your continued interest in RGP, and we look forward to sharing our progress at the end of Q1. Thank you all, and have a good summer.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
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