Robert Half(RHI) - 2025 Q2 - Quarterly Report

Cover Page and Filing Information FORM 10-Q Filing Details This quarterly report for Robert Half Inc covers the period ending June 30, 2025, with 101,738,660 common shares outstanding - Robert Half Inc filed its quarterly report (FORM 10-Q) for the period ended June 30, 2025[2] Company Filing Information | Metric | Detail | | :--- | :--- | | Filing Type | Quarterly Report (FORM 10-Q) | | Quarter End Date | June 30, 2025 | | Registrant Name | ROBERT HALF INC | | State of Incorporation | Delaware | | Ticker Symbol | RHI | | Exchange | New York Stock Exchange | | Filer Status | Large Accelerated Filer | | Common Stock Outstanding (as of July 31, 2025) | 101,738,660 shares | | Common Stock Par Value | $0.001/share | PART I—FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements for Robert Half Inc as of June 30, 2025 CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED) Condensed Consolidated Statements of Financial Position (Unaudited) | Metric (in thousands of USD) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 380,547 | 537,583 | | Accounts receivable, net | 826,872 | 772,285 | | Assets held in trust for employee deferred compensation | 716,782 | 673,240 | | Other current assets | 153,720 | 146,314 | | Total current assets | 2,077,921 | 2,129,422 | | Property and equipment, net | 129,870 | 119,564 | | Right-of-use assets | 202,869 | 198,384 | | Goodwill | 251,151 | 237,180 | | Noncurrent deferred income taxes | 156,542 | 158,120 | | Other noncurrent assets | 13,843 | 11,735 | | Total assets | 2,832,196 | 2,854,405 | | Liabilities | | | | Accounts payable and accrued expenses | 149,758 | 166,955 | | Accrued payroll and benefit costs | 396,564 | 372,785 | | Obligations under employee deferred compensation plans | 699,951 | 678,403 | | Income taxes payable | 7,078 | 2,977 | | Current operating lease liabilities | 69,275 | 64,619 | | Total current liabilities | 1,322,626 | 1,285,739 | | Noncurrent operating lease liabilities | 174,374 | 168,900 | | Other noncurrent liabilities | 23,278 | 21,763 | | Total liabilities | 1,520,278 | 1,476,402 | | Stockholders' Equity | | | | Common stock | 102 | 102 | | Additional paid-in capital | 1,341,843 | 1,418,150 | | Accumulated other comprehensive loss | (30,027) | (65,138) | | Retained earnings | — | 24,889 | | Total stockholders' equity | 1,311,918 | 1,378,003 | | Total liabilities and stockholders' equity | 2,832,196 | 2,854,405 | - As of June 30, 2025, total assets were $2.832 billion, a slight decrease from $2.854 billion on December 31, 2024; cash and cash equivalents decreased by $157.04 million, while net accounts receivable increased by $54.59 million[8] CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Condensed Consolidated Statements of Operations (Unaudited) | Metric (in thousands of USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Service revenues | 1,369,743 | 1,472,524 | 2,721,650 | 2,948,461 | | Cost of services | 860,269 | 895,845 | 1,713,131 | 1,808,985 | | Gross profit | 509,474 | 576,679 | 1,008,519 | 1,139,476 | | Selling, general and administrative expenses | 507,934 | 501,136 | 968,097 | 1,023,035 | | Operating income | 1,540 | 75,543 | 40,422 | 116,441 | | Income from investments held in employee deferred compensation trusts | (57,654) | (15,733) | (37,483) | (59,109) | | Interest income, net | (2,239) | (5,186) | (5,811) | (11,599) | | Income before income taxes | 61,433 | 96,462 | 83,716 | 187,149 | | Provision for income taxes | 20,465 | 28,306 | 25,398 | 55,292 | | Net income | 40,968 | 68,156 | 58,318 | 131,857 | | Net income per share | | | | | | Basic | 0.41 | 0.66 | 0.58 | 1.27 | | Diluted | 0.41 | 0.66 | 0.58 | 1.27 | | Dividends per share | 0.59 | 0.53 | 1.18 | 1.06 | - Q2 2025 service revenues decreased by 7.0% year-over-year, with net income down 39.9%; H1 service revenues decreased by 7.7%, with net income down 55.8%[9] CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | Metric (in thousands of USD) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | 40,968 | 68,156 | 58,318 | 131,857 | | Other comprehensive income (loss): | | | | | | Foreign currency translation adjustments, net of tax | 23,597 | (6,628) | 35,030 | (18,050) | | Foreign defined benefit plan adjustments, net of tax | 42 | 42 | 81 | 85 | | Total other comprehensive income (loss) | 23,639 | (6,586) | 35,111 | (17,965) | | Total comprehensive income (loss) | 64,607 | 61,570 | 93,429 | 113,892 | - Total comprehensive income for Q2 2025 was $64.61 million, a 4.9% year-over-year increase, while H1 total comprehensive income was $93.43 million, a 17.9% decrease[11] CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) Condensed Consolidated Statements of Stockholders' Equity (Unaudited) | Metric (in thousands of USD) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Stockholders' Equity | 1,311,918 | 1,378,003 | | Net Income | 40,968 | 24,889 (Q1 2025) | | Other Comprehensive Income (Loss) | 23,639 | 11,472 (Q1 2025) | | Dividends Declared | (60,284) | (60,163) (Q1 2025) | | Stock Repurchases | (20,157) | (50,145) (Q1 2025) | | Stock Option Compensation | 14,530 | 16,705 (Q1 2025) | | Shares Issued (at end of period) | 101,739 | 102,199 | | Additional Paid-in Capital | 1,341,843 | 1,418,150 | | Accumulated Other Comprehensive Loss | (30,027) | (65,138) | - Total stockholders' equity decreased to $1.312 billion as of June 30, 2025, from $1.378 billion at year-end 2024, primarily due to dividends and stock repurchases[12] CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric (in thousands of USD) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash flows from operating activities: | | | | Net income | 58,318 | 131,857 | | Net cash provided by operating activities | 60,030 | 126,035 | | Cash flows from investing activities: | | | | Capital expenditures | (27,573) | (24,174) | | Investments in employee deferred compensation trusts | (51,135) | (42,718) | | Proceeds from redemptions of investments in employee deferred compensation trusts | 40,081 | 29,695 | | Net cash paid for acquisitions | (10,114) | (264) | | Net cash used in investing activities | (48,741) | (37,461) | | Cash flows from financing activities: | | | | Repurchases of common stock | (70,999) | (146,191) | | Dividends paid | (120,659) | (112,248) | | Net cash used in financing activities | (191,658) | (258,439) | | Effect of exchange rate changes on cash | 23,333 | (14,505) | | Change in cash and cash equivalents | (157,036) | (184,370) | | Cash and cash equivalents at beginning of period | 537,583 | 731,740 | | Cash and cash equivalents at end of period | 380,547 | 547,370 | - In H1 2025, net cash from operating activities was $60.03 million, a 52.3% year-over-year decrease, leading to a reduction in ending cash and cash equivalents to $380.55 million[13] NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note A—Summary of Significant Accounting Policies This note outlines the company's business nature, basis of preparation, accounting estimates, and policies for revenue recognition and fair value measurements - The company provides professional talent solutions and business consulting services globally, including contract and permanent placement talent and Protiviti consulting[15] - Income from investments in employee deferred compensation trusts is fully offset by related costs and has no impact on net income[23] - The company's financial instruments, including cash equivalents and deferred compensation trust assets, are measured at fair value using Level 1 inputs (quoted market prices)[25][28] Income from Investments Held in Employee Deferred Compensation Trusts (in thousands of USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Dividend income | (3,055) | (2,627) | (4,995) | (4,698) | | Realized and unrealized gains | (54,599) | (13,106) | (32,488) | (54,411) | | Total investment income | (57,654) | (15,733) | (37,483) | (59,109) | Note B—New Accounting Pronouncements This note discusses recently adopted and issued accounting standards, including FASB updates on income tax and income statement disclosures - FASB ASU No 2023-09, effective for annual periods after December 15, 2024, requires enhanced disclosure of income tax rate reconciliation items[33] - FASB ASU 2024-03, effective for annual periods after December 15, 2026, will require disaggregation of certain income statement expense captions[33] - The company anticipates these new standards will alter disclosures but not materially impact its financial results or condition[33] Note C—Revenue Recognition This note details revenue recognition policies for the company's three business segments and provides a breakdown of revenues by functional specialization - Contract talent solutions revenue is recognized over time as services are rendered, with the company acting as the principal[35][36] - Permanent placement talent solutions revenue is recognized at the point in time a candidate accepts an offer of permanent employment[40] - Protiviti consulting services revenue is recognized over time using a cost-to-cost measure of progress for performance obligations[41] Service Revenues by Functional Specialization and Segment (in thousands of USD) | Segment/Specialization | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | | | | | | Finance and accounting | 555,626 | 623,120 | 1,118,559 | 1,265,090 | | Administrative and customer support | 165,591 | 190,344 | 331,218 | 390,276 | | Technology | 158,403 | 157,899 | 310,945 | 315,869 | | Intersegment revenue eliminations | (119,812) | (116,466) | (237,709) | (229,280) | | Total Contract Talent Solutions | 759,808 | 854,897 | 1,523,013 | 1,741,955 | | Permanent Placement Talent Solutions | 114,713 | 131,063 | 226,804 | 255,830 | | Protiviti | 495,222 | 486,564 | 971,833 | 950,676 | | Total Service Revenues | 1,369,743 | 1,472,524 | 2,721,650 | 2,948,461 | Note D—Other Current Assets This note details the components of other current assets, primarily consisting of prepaid expenses and unamortized cloud computing implementation costs - Other current assets totaled $153.72 million as of June 30, 2025, a 5.06% increase from December 31, 2024[48] Other Current Assets (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepaid expenses | 71,180 | 64,185 | | Unamortized cloud computing implementation costs, current | 24,957 | 28,417 | | Other | 57,583 | 53,712 | | Total other current assets | 153,720 | 146,314 | Note E—Property and Equipment, Net This note provides a detailed breakdown of the company's property and equipment, including computer hardware, software, and leasehold improvements - Net property and equipment increased by 8.62% to $129.87 million as of June 30, 2025, driven by additions to computer software and leasehold improvements[49] Property and Equipment, Net (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Computer hardware | 118,375 | 131,059 | | Computer software | 233,650 | 224,609 | | Furniture and equipment | 97,792 | 96,288 | | Leasehold improvements | 207,454 | 200,565 | | Cost of property and equipment | 657,271 | 652,521 | | Accumulated depreciation | (527,401) | (532,957) | | Property and equipment, net | 129,870 | 119,564 | Note F—Other Noncurrent Assets This note lists the components of other noncurrent assets, primarily unamortized cloud computing implementation costs and other intangible assets - Total other noncurrent assets grew by 17.96% to $13.84 million as of June 30, 2025, mainly due to an increase in other net intangible assets[52] Other Noncurrent Assets (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unamortized cloud computing implementation costs, noncurrent | 10,969 | 10,517 | | Other intangible assets, net | 2,874 | 1,218 | | Total other noncurrent assets | 13,843 | 11,735 | Note G—Leases This note provides detailed information on the company's operating leases, including lease terms, costs, and future minimum lease payments - The company leases corporate and field offices and certain equipment with lease terms ranging from less than one year to 11 years[53] Lease-Related Financial Data (in thousands of USD) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Operating lease cost (three months) | 19,800 | 21,200 | | Operating lease cost (six months) | 39,800 | 42,400 | | Cash paid for amounts included in operating lease liabilities | 39,082 | 45,284 | | Right-of-use assets obtained in exchange for new operating lease liabilities | 37,696 | 40,668 | | Weighted-average remaining lease term | 4.6 years (2025) | 4.6 years (2024) | | Weighted-average discount rate | 4.0% (2025) | 3.9% (2024) | Future Minimum Lease Payments (in thousands of USD) | Year | Amount | | :--- | :--- | | 2025 (excluding six months ended) | 40,845 | | 2026 | 70,794 | | 2027 | 51,330 | | 2028 | 37,419 | | 2029 | 26,943 | | Thereafter | 43,801 | | Less: Imputed interest | (27,483) | | Present value of operating lease liabilities | 243,649 | Note H—Goodwill This note discloses changes in the company's goodwill, including balances by business segment, additions from acquisitions, and foreign currency adjustments - Goodwill increased by 5.97% to $251.15 million as of June 30, 2025, primarily due to $12.1 million in goodwill recognized from two acquisitions in April 2025[58] Changes in Goodwill (in thousands of USD) | Segment | Balance at Dec 31, 2024 | Acquisitions | Foreign Currency Translation | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | 133,938 | 1,205 | 607 | 135,750 | | Permanent Placement Talent Solutions | 26,063 | 235 | 118 | 26,416 | | Protiviti | 77,179 | 10,667 | 1,139 | 88,985 | | Total | 237,180 | 12,107 | 1,864 | 251,151 | Note I—Accrued Payroll and Benefit Costs This note details the components of accrued payroll and benefit costs, including salaries, benefits, payroll taxes, and workers' compensation - Total accrued payroll and benefit costs increased by 6.38% to $396.56 million as of June 30, 2025, driven by higher accrued salaries and benefits[59] Accrued Payroll and Benefit Costs (in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Salaries and benefits | 354,949 | 330,803 | | Payroll taxes | 29,270 | 29,513 | | Workers' compensation | 12,345 | 12,469 | | Total accrued payroll and benefit costs | 396,564 | 372,785 | Note J—Employee Deferred Compensation Plan Obligations This note describes the company's qualified and non-qualified deferred compensation plans and discloses related asset and liability values - The company offers qualified 401(k) and non-qualified deferred compensation plans; the non-qualified plan had assets of $716.8 million and liabilities of $700.0 million as of June 30, 2025[60][61] Deferred Compensation Plan Contribution Expense (in thousands of USD) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Contribution Expense | 11,600 | 11,400 | 25,300 | 24,800 | Note K—Commitments and Contingencies This note discloses legal proceedings and contingencies, including two class action lawsuits, and details a new $100 million credit agreement - The company is facing two class action lawsuits: the Jessica Gentry case (unpaid interview time) and the Shari Dorff case (recruiter misclassification)[64][65] - Management believes it has meritorious defenses to these claims and has not recorded a provision for potential losses[64][65] - On May 28, 2025, the company entered into a $100 million credit agreement maturing in May 2030, with no cash borrowings drawn as of June 30, 2025[67] Note L—Stockholders' Equity This note details the company's stock repurchase program, including the number of shares repurchased and associated costs - As of June 30, 2025, the company was authorized to repurchase up to 6.2 million additional shares of its common stock[70] Common Stock Repurchases (in thousands of shares/USD) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Common stock repurchases (shares) | 1,128 | 1,660 | | Common stock repurchases (cost) | 59,378 | 121,272 | | Repurchases related to employee stock plans (shares) | 191 | 271 | | Repurchases related to employee stock plans (cost) | 10,924 | 21,435 | Note M—Net Income Per Share This note provides the calculation details for basic and diluted net income per share, including weighted-average shares outstanding - Q2 2025 basic and diluted EPS were both $0.41, down from $0.66 in the prior-year period; H1 basic and diluted EPS were both $0.58, down significantly from $1.27[72] Net Income Per Share Calculation (in thousands of shares/USD) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | 40,968 | 68,156 | 58,318 | 131,857 | | Basic weighted-average shares | 100,410 | 103,151 | 100,537 | 103,469 | | Diluted weighted-average shares | 100,539 | 103,328 | 100,776 | 103,864 | | Basic net income per share | 0.41 | 0.66 | 0.58 | 1.27 | | Diluted net income per share | 0.41 | 0.66 | 0.58 | 1.27 | Note N—Business Segments This note provides financial information for the company's three reportable segments: Contract Talent Solutions, Permanent Placement Talent Solutions, and Protiviti - The company operates three reportable segments, and the chief operating decision maker uses segment income to evaluate performance and allocate resources[75][76] Service Revenues and Segment Income by Segment (in thousands of USD) | Segment | Q2 2025 Service Revenues | Q2 2024 Service Revenues | Q2 2025 Segment Income | Q2 2024 Segment Income | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | 759,808 | 854,897 | 18,423 | 38,146 | | Permanent Placement Talent Solutions | 114,713 | 131,063 | 8,259 | 16,148 | | Protiviti | 495,222 | 486,564 | 32,512 | 36,982 | | Total | 1,369,743 | 1,472,524 | 59,194 | 91,276 | Depreciation Expense by Segment (in thousands of USD) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | 6,219 | 6,364 | 12,717 | 12,957 | | Permanent Placement Talent Solutions | 2,043 | 2,047 | 4,141 | 4,271 | | Protiviti | 4,340 | 4,105 | 8,750 | 8,292 | | Total Depreciation Expense | 12,602 | 12,516 | 25,608 | 25,520 | Note O—Subsequent Events This note discloses the declaration of a quarterly cash dividend on August 4, 2025 Quarterly Dividend Declaration Details | Metric | Detail | | :--- | :--- | | Quarterly Dividend Per Share | $0.59 | | Declaration Date | August 4, 2025 | | Record Date | August 25, 2025 | | Payment Date | September 15, 2025 | ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition, results of operations, liquidity, and capital resources Forward-Looking Statements This section clarifies that forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are subject to risks including global economic conditions, competition, government regulation, and cybersecurity threats, among others[86] Executive Overview This overview summarizes financial performance for Q2 and H1 2025, noting that economic uncertainty has led to a slowdown in hiring activity - Q2 2025 results met management's expectations, but global economic uncertainty has led to client and candidate caution and slower decision-making[87] - The US labor market remains resilient, with a 3.0% GDP growth rate in Q2 2025 and a low unemployment rate of 2.5% for professionals with a college degree[88][89] - The company continues to invest in technology and AI to enhance digital experiences and improve talent acquisition tools[91] Key Financial Metrics for H1 2025 | Metric | Amount | | :--- | :--- | | Service Revenues | $2.72 billion | | Year-over-Year Change | -7.7% | | Net Income | $58 million | | Diluted Net Income Per Share | $0.58 | Critical Accounting Policies and Estimates This section confirms there have been no material changes to the company's critical accounting policies and estimates during the first half of 2025 - There have been no material changes to the company's critical accounting policies and estimates during the six months ended June 30, 2025[93] Recent Accounting Pronouncements This section refers to Note B of the financial statements for a detailed discussion of new accounting standards - For information on recent accounting pronouncements, refer to Note B to the Financial Statements in Part I, Item 1 of this report[94] Results of Operations This section analyzes the operating results of the company's three reportable segments for the three and six months ended June 30, 2025 - The company's operating results are analyzed across its three reportable segments: Contract Talent Solutions, Permanent Placement Talent Solutions, and Protiviti[95] - Demand for the company's services is highly dependent on global economic and labor market trends, making future demand difficult to predict[96] Non-GAAP Financial Measures This section defines the non-GAAP financial measures used by the company to supplement its GAAP results and aid in performance analysis - The company uses non-GAAP measures such as adjusted gross profit and adjusted revenue growth to provide additional insight into operational performance[97][98][99] - Adjusted revenue growth is calculated by removing the impacts of billing day variations and foreign currency exchange rates[99] Three Months Ended June 30, 2025 and 2024 This section provides a detailed comparative analysis of the company's operating results for the second quarter of 2025 versus 2024 Service Revenues_Q2 Q2 2025 service revenues decreased 7.0% year-over-year, with declines in both contract and permanent placement solutions, partially offset by growth in Protiviti - The decline in Contract Talent Solutions revenue was driven by a 15.4% decrease in hours worked, while Permanent Placement revenue fell due to an 18.0% drop in placements[103][105] Q2 2025 Service Revenues (in thousands of USD) | Metric | June 30, 2025 | June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Service Revenues | 1,369,743 | 1,472,524 | -7.0% | | U.S. Revenues | 1,060,000 | 1,150,000 | -7.4% | | International Revenues | 306,000 | 323,000 | -5.3% | | Contract Talent Solutions Revenues | 760,000 | 855,000 | -11.1% | | Permanent Placement Talent Solutions Revenues | 115,000 | 131,000 | -12.5% | | Protiviti Revenues | 495,000 | 487,000 | +1.8% | Gross Margin_Q2 Q2 2025 gross profit decreased 11.7% year-over-year, with gross margin rates declining across the Contract Talent Solutions and Protiviti segments Q2 2025 Gross Profit (in thousands of USD) | Metric | June 30, 2025 | June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Gross Profit | 509,474 | 576,679 | -11.7% | | Contract Talent Solutions Gross Profit | 297,367 | 336,161 | -11.5% | | Permanent Placement Talent Solutions Gross Profit | 114,551 | 130,801 | -12.4% | | Protiviti Gross Profit | 97,556 | 109,717 | -11.1% | Q2 2025 Gross Margin (%) | Segment | June 30, 2025 (Reported) | June 30, 2024 (Reported) | June 30, 2025 (Adjusted) | June 30, 2024 (Adjusted) | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | 39.1% | 39.3% | 39.1% | 39.3% | | Permanent Placement Talent Solutions | 99.9% | 99.8% | 99.9% | 99.8% | | Protiviti | 19.7% | 22.5% | 22.3% | 23.2% | | Total | 37.2% | 39.2% | 38.1% | 39.4% | Selling, General and Administrative Expenses_Q2 Q2 2025 SG&A expenses increased 1.4% year-over-year, and as a percentage of revenue, adjusted SG&A rose from 33.2% to 33.8% due to negative leverage Q2 2025 Selling, General and Administrative Expenses (in thousands of USD) | Metric | June 30, 2025 (Reported) | June 30, 2024 (Reported) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total SG&A Expenses | 507,934 | 501,136 | +1.4% | | Contract Talent Solutions | 318,871 | 308,886 | +3.2% | | Permanent Placement Talent Solutions | 111,218 | 116,285 | -4.4% | | Protiviti | 77,845 | 75,965 | +2.5% | Q2 2025 SG&A Expenses as a Percentage of Revenue (%) | Segment | June 30, 2025 (Reported) | June 30, 2024 (Reported) | June 30, 2025 (Adjusted) | June 30, 2024 (Adjusted) | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | 42.0% | 36.1% | 36.7% | 34.9% | | Permanent Placement Talent Solutions | 97.0% | 88.7% | 92.7% | 87.5% | | Protiviti | 15.7% | 15.6% | 15.7% | 15.6% | | Total | 37.1% | 34.0% | 33.8% | 33.2% | Operating Income_Q2 Q2 2025 operating income declined sharply by 98.0% year-over-year to $2 million, with the adjusted operating margin falling from 6.2% to 4.3% Q2 2025 Operating Income (in thousands of USD) | Metric | June 30, 2025 (Reported) | June 30, 2024 (Reported) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Income | 1,540 | 75,543 | -98.0% | | Contract Talent Solutions | (21,504) | 27,275 | -178.8% | | Permanent Placement Talent Solutions | 3,333 | 14,516 | -77.1% | | Protiviti | 19,711 | 33,752 | -41.6% | Q2 2025 Operating Income as a Percentage of Revenue (%) | Segment | June 30, 2025 (Reported) | June 30, 2024 (Reported) | June 30, 2025 (Adjusted) | June 30, 2024 (Adjusted) | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | (2.8%) | 3.2% | 2.4% | 4.5% | | Permanent Placement Talent Solutions | 2.9% | 11.1% | 7.2% | 12.3% | | Protiviti | 4.0% | 6.9% | 6.6% | 7.6% | | Total | 0.1% | 5.1% | 4.3% | 6.2% | Income from Investments Held in Employee Deferred Compensation Trusts_Q2 Q2 2025 investment income from employee deferred compensation trusts was $58 million, a significant increase from $16 million in the prior-year period - The increase in investment income was primarily attributable to positive market returns during the second quarter of 2025[123] Q2 2025 Income from Investments Held in Employee Deferred Compensation Trusts (in thousands of USD) | Metric | June 30, 2025 | June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Investment Income | 58,000 | 16,000 | +262.5% | Provision for income taxes_Q2 The effective tax rate for Q2 2025 was 33.3%, up from 29.3% in the prior-year period, due to the impact of non-deductible expenses on lower pre-tax income - The higher tax rate in 2025 is attributed to the increased impact of non-deductible expenses on lower pre-tax income[124] - The company is currently evaluating the potential impact of the "One Big Beautiful Bill Act," a new U.S. tax law enacted on July 4, 2025[125] Q2 2025 Provision for Income Taxes (%) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Effective Tax Rate | 33.3% | 29.3% | Six Months Ended June 30, 2025 and 2024 This section provides a detailed comparative analysis of the company's operating results for the first half of 2025 versus 2024 Service Revenues_H1 H1 2025 service revenues decreased 7.7% year-over-year, with declines in both contract and permanent placement solutions, partially offset by growth in Protiviti - The decline in Contract Talent Solutions revenue was driven by a 15.8% decrease in hours worked, while Permanent Placement revenue fell due to a 14.8% drop in placements[127][128] H1 2025 Service Revenues (in thousands of USD) | Metric | June 30, 2025 | June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Service Revenues | 2,721,650 | 2,948,461 | -7.7% | | U.S. Revenues | 2,130,000 | 2,290,000 | -7.2% | | International Revenues | 594,000 | 657,000 | -9.5% | | Contract Talent Solutions Revenues | 1,520,000 | 1,740,000 | -12.6% | | Permanent Placement Talent Solutions Revenues | 227,000 | 256,000 | -11.3% | | Protiviti Revenues | 972,000 | 951,000 | +2.2% | Gross Margin_H1 H1 2025 gross profit decreased 11.5% year-over-year, with gross margin rates declining across the Contract Talent Solutions and Protiviti segments H1 2025 Gross Profit (in thousands of USD) | Metric | June 30, 2025 | June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Gross Profit | 1,008,519 | 1,139,476 | -11.5% | | Contract Talent Solutions Gross Profit | 594,300 | 686,731 | -13.5% | | Permanent Placement Talent Solutions Gross Profit | 226,412 | 255,349 | -11.3% | | Protiviti Gross Profit | 187,807 | 197,396 | -4.9% | H1 2025 Gross Margin (%) | Segment | June 30, 2025 (Reported) | June 30, 2024 (Reported) | June 30, 2025 (Adjusted) | June 30, 2024 (Adjusted) | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | 39.0% | 39.4% | 39.0% | 39.4% | | Permanent Placement Talent Solutions | 99.8% | 99.8% | 99.8% | 99.8% | | Protiviti | 19.3% | 20.8% | 20.2% | 22.0% | | Total | 37.1% | 38.6% | 37.4% | 39.0% | Selling, General and Administrative Expenses_H1 H1 2025 SG&A expenses decreased 5.4% year-over-year, but as a percentage of revenue, adjusted SG&A rose from 33.1% to 34.5% due to negative leverage H1 2025 Selling, General and Administrative Expenses (in thousands of USD) | Metric | June 30, 2025 (Reported) | June 30, 2024 (Reported) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total SG&A Expenses | 968,097 | 1,023,035 | -5.4% | | Contract Talent Solutions | 595,083 | 640,474 | -7.1% | | Permanent Placement Talent Solutions | 217,353 | 232,861 | -6.7% | | Protiviti | 155,661 | 149,700 | +4.0% | H1 2025 SG&A Expenses as a Percentage of Revenue (%) | Segment | June 30, 2025 (Reported) | June 30, 2024 (Reported) | June 30, 2025 (Adjusted) | June 30, 2024 (Adjusted) | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | 39.1% | 36.8% | 37.4% | 34.4% | | Permanent Placement Talent Solutions | 95.8% | 91.0% | 94.6% | 88.9% | | Protiviti | 16.0% | 15.7% | 16.0% | 15.7% | | Total | 35.6% | 34.7% | 34.5% | 33.1% | Operating Income_H1 H1 2025 operating income declined sharply by 65.3% year-over-year to $40 million, with the adjusted operating margin falling from 6.0% to 2.9% H1 2025 Operating Income (in thousands of USD) | Metric | June 30, 2025 (Reported) | June 30, 2024 (Reported) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Income | 40,422 | 116,441 | -65.3% | | Contract Talent Solutions | (783) | 46,257 | -101.7% | | Permanent Placement Talent Solutions | 9,059 | 22,488 | -59.7% | | Protiviti | 32,146 | 47,696 | -32.6% | H1 2025 Operating Income as a Percentage of Revenue (%) | Segment | June 30, 2025 (Reported) | June 30, 2024 (Reported) | June 30, 2025 (Adjusted) | June 30, 2024 (Adjusted) | | :--- | :--- | :--- | :--- | :--- | | Contract Talent Solutions | (0.1%) | 2.7% | 1.6% | 5.1% | | Permanent Placement Talent Solutions | 4.0% | 8.8% | 5.2% | 10.9% | | Protiviti | 3.3% | 5.0% | 4.2% | 6.2% | | Total | 1.5% | 3.9% | 2.9% | 6.0% | Income from Investments Held in Employee Deferred Compensation Trusts_H1 H1 2025 investment income from employee deferred compensation trusts was $37 million, a decrease from $59 million in the prior-year period - The investment income was generated from positive market returns during the first half of 2025[146] H1 2025 Income from Investments Held in Employee Deferred Compensation Trusts (in thousands of USD) | Metric | June 30, 2025 | June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Investment Income | 37,000 | 59,000 | -37.2% | Provision for income taxes_H1 The effective tax rate for H1 2025 was 30.3%, slightly higher than the 29.5% rate in the prior-year period H1 2025 Provision for Income Taxes (%) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Effective Tax Rate | 30.3% | 29.5% | Liquidity and Capital Resources This section discusses the company's liquidity position and capital resources, analyzing cash flows from operating, investing, and financing activities - The company's liquidity is primarily influenced by cash from operations and its use for capital expenditures, stock repurchases, and dividends[148] - In H1 2025, operating activities provided $60 million in net cash, while investing and financing activities used $49 million and $192 million, respectively[149] - The company anticipates capital expenditures for 2025 to be between $75 million and $90 million[152] - During H1 2025, the company repurchased 1.1 million shares for $59 million and paid $121 million in dividends[153][154] - The company entered into a $100 million credit agreement on May 28, 2025, with no borrowings outstanding as of June 30, 2025[157] Cash and Cash Equivalents (in thousands of USD) | Period | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 381,000 | 547,000 | Material Cash Requirements from Contractual Obligations This section outlines the company's primary contractual cash requirements, including lease liabilities and employee deferred compensation plan obligations - As of June 30, 2025, the company had current and long-term operating lease liabilities of $69 million and $175 million, respectively[159] - Purchase obligations did not change materially during the first half of 2025[161] - Employee deferred compensation plan obligations totaled $700 million as of June 30, 2025, and are funded by investment trust assets that exceed the obligation[162] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk This section discloses the company's exposure to market risks, primarily related to foreign currency exchange rate fluctuations - Approximately 21.8% of the company's revenues are generated outside the U.S., exposing it to foreign currency exchange rate risk[163][164] - In H1 2025, currency fluctuations decreased reported service revenues by $4.2 million (0.1%) and net income by $0.1 million (0.4%)[165] - Exchange rate movements impact reported results but generally do not result in realized economic gains or losses or affect cash flows[167] ITEM 4. Controls and Procedures This section confirms management's evaluation of disclosure controls and procedures, concluding they were effective as of the end of the reporting period - Management has evaluated and concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[168] - There were no material changes to the company's internal controls during the three months ended June 30, 2025[168] PART II—OTHER INFORMATION ITEM 1. Legal Proceedings This section states there have been no material developments in any legal proceedings previously disclosed in the company's 2024 Annual Report - There have been no material developments in previously disclosed legal proceedings during the reporting period[171] ITEM 1A. Risk Factors This section refers to the risk factor discussions in the company's Annual Report and previous quarterly reports - For a discussion of potential risks and uncertainties, refer to the "Risk Factors" section of the company's 2024 Annual Report and Q1 2025 Quarterly Report[172] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds This section discloses the company's stock repurchase activities during the second quarter of 2025 - As of June 30, 2025, the company has repurchased 131.8 million of the 138 million shares authorized for repurchase[177] Issuer Purchases of Equity Securities | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Maximum Number of Shares that May Yet Be Purchased Under the Plans | | :--- | :--- | :--- | :--- | :--- | | April 1 - April 30, 2025 | 202 (a) | $43.68 | — | 6,611,589 | | May 1 - May 31, 2025 | 100,000 | $46.08 | 100,000 | 6,511,589 | | June 1 - June 30, 2025 | 361,674 (b) | $42.97 | 360,504 | 6,151,085 | | Total April 1 - June 30, 2025 | 461,876 | | 460,504 | | ITEM 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities - No defaults upon senior securities[174] ITEM 4. Mine Safety Disclosure This section states that mine safety disclosures are not applicable to the company's business - Mine safety disclosures are not applicable[175] ITEM 5. Other Information This section states that there is no other information to disclose - No other information[176] ITEM 6. Exhibits This section lists the exhibits filed with the report, including certifications and XBRL data - Exhibits include the company's articles of incorporation, CEO and CFO certifications, and financial data in Inline XBRL format[179] SIGNATURES This section contains the signatures of the company's authorized officers as required by the Securities Exchange Act - The report was signed on August 5, 2025, by Michael C Buckley, Executive Vice President and Chief Financial Officer[181]