Robert Half(US:RHI)2025-10-31 19:21Financial Performance - Service revenues for the first three quarters of 2025 were $4.08 billion, a decrease of 7.6% from the prior year[99]. - Net income for the first three quarters of 2025 was $101 million, with diluted net income per share at $1.01[99]. - For the three months ended September 30, 2025, revenues were $1.35 billion, a decrease of 7.5% compared to $1.47 billion for the same period in 2024[114]. - The company's revenues for the nine months ended September 30, 2025, were $4.08 billion, a decrease of 7.6% compared to $4.41 billion for the same period in 2024[138]. - The company's reported operating income for the three months ended September 30, 2025, was $14 million, down 77.6% from $61 million in 2024[132]. - Reported operating income was $54 million for the nine months ended September 30, 2025, down 69.5% compared to $177 million for the same period in 2024[155]. - Adjusted operating income for the three months ended September 30, 2025, was $61 million, a decrease of 31.8% from $90 million in 2024[132]. - Adjusted operating income was $139 million for the nine months ended September 30, 2025, down 47.6% from $265 million for the same period in 2024[155]. Revenue Breakdown - Contract talent solutions revenues decreased by 10.1% to $746 million for the three months ended September 30, 2025, primarily due to a 13.4% decrease in hours worked[115]. - Permanent placement talent solutions revenues were $110 million for the three months ended September 30, 2025, a decrease of 10.7% driven by a 13.3% decrease in placements[117]. - Protiviti revenues were $498 million for the three months ended September 30, 2025, a decrease of 2.6% due to a 10.8% decrease in average hourly bill rates[118]. - Contract talent solutions revenues decreased by 11.8% to $2.27 billion for the nine months ended September 30, 2025, primarily due to a 15.0% decrease in the number of hours worked[139]. - Permanent placement talent solutions revenues were $337 million for the nine months ended September 30, 2025, down 11.1% from $379 million in 2024, driven by a 14.3% decrease in the number of placements[140]. - Protiviti revenues increased by 0.5% to $1.47 billion for the nine months ended September 30, 2025, due to a 6.5% increase in billable hours[141]. Gross Margin Analysis - Gross margin dollars for the company totaled $504 million, down 11.8% from $572 million for the same period in 2024[119]. - Gross margin for contract talent solutions was $290 million, a decrease of 10.2% from $323 million in the prior year, maintaining a gross margin percentage of 38.9%[121]. - Gross margin for permanent placement talent solutions was $110 million, down 10.7% from $123 million in the previous year, primarily due to decreased revenues[122]. - Protiviti's gross margin dollars were $104 million, a decrease of 17.0% from $126 million in the prior year, with a reported gross margin percentage of 20.9%[123]. - The company's gross margin dollars for the nine months ended September 30, 2025, were $1.51 billion, down 11.6% from $1.71 billion in 2024[142]. - Gross margin dollars for contract talent solutions were $884 million for the nine months ended September 30, 2025, down 12.4% from $1.01 billion for the same period in 2024[144]. - Gross margin dollars for permanent placement talent solutions were $337 million for the nine months ended September 30, 2025, down 11.1% from $378 million for the same period in 2024[145]. - Gross margin dollars for Protiviti were $292 million for the nine months ended September 30, 2025, down 9.6% from $323 million for the same period in 2024[146]. Expenses Overview - Selling, general and administrative expenses were reported at $491 million, a decrease of 4.0% from $511 million in the same quarter of 2024[125]. - Adjusted selling, general and administrative expenses were $453 million, down 7.1% from $488 million in the prior year, representing 33.5% of revenues[125]. - Selling, general and administrative expenses for contract talent solutions were $307 million, a decrease of 3.4% from $318 million in the previous year, with a percentage of revenues increasing to 41.1%[126]. - Selling, general and administrative expenses for permanent placement talent solutions were $107 million, down 6.2% from $113 million, with a percentage of revenues increasing to 96.6%[127]. - Selling, general and administrative expenses were $1.46 billion for the nine months ended September 30, 2025, down 4.9% from $1.53 billion for the same period in 2024[148]. - Selling, general and administrative expenses for contract talent solutions were $902 million for the nine months ended September 30, 2025, decreasing by 5.9% from $958 million for the same period in 2024[149]. - Selling, general and administrative expenses for permanent placement talent solutions were $324 million for the nine months ended September 30, 2025, decreasing by 6.5% from $346 million for the same period in 2024[150]. Tax and Cash Flow - The provision for income taxes was 32.6% for the three months ended September 30, 2025, up from 31.2% in 2024, attributed to increased nondeductible expenses[136]. - The provision for income taxes increased to 31.3% for the nine months ended September 30, 2025, up from 30.1% in 2024, due to higher nondeductible expenses[159]. - The company does not anticipate a material impact on income tax expense for the year ended December 31, 2025, due to the recent tax reform legislation[137]. - The Company experienced a net cash flow from operating activities of $137 million for the nine months ended September 30, 2025, down from $255 million in the same period of 2024[162]. - Cash and cash equivalents decreased to $365 million as of September 30, 2025, compared to $570 million in 2024[161]. Capital Expenditures and Stock Repurchase - Capital expenditures for the nine months ended September 30, 2025, totaled $62 million, with approximately 65% allocated to software initiatives and technology infrastructure[164]. - The Company expects capital expenditures for 2025 to range from $75 million to $90 million, with $55 million to $65 million related to software initiatives and technology infrastructure[164]. - The Company repurchased $92 million in common stock during the nine months ended September 30, 2025, compared to $196 million in the same period of 2024[165]. - The Company has authorized the repurchase of up to 5.6 million additional shares of common stock as of September 30, 2025[166]. Economic and Employment Indicators - The U.S. unemployment rate was 4.3% as of August 2025, with a notably low rate of 2.7% for college-educated professionals[101]. - Economic indicators suggest a potential improvement in hiring urgency and project demand as business confidence rebounds[102]. - International revenues increased by 9.6% on a reported basis for the first three quarters of 2025 compared to the same period in 2024[141].