Core Viewpoint - Robert Half's recent earnings report shows a mixed performance with earnings and revenues beating estimates, but significant year-over-year declines raise concerns about future performance [2][10]. Financial Performance - Q2 fiscal 2026 earnings were reported at 41 cents per share, exceeding the consensus estimate by 2.5%, but down 37.9% year-over-year [2]. - Revenues for the quarter reached $1.37 billion, surpassing the consensus by 1.4%, yet reflecting a 7% decline year-over-year [2]. Segment Performance - Talent Solutions revenues were $874.521 million, down 11.3% year-over-year and below the estimate of $914.2 million [3]. - U.S. Talent Solutions revenues were $668 million, a decrease of 11% year-over-year [3]. - Protiviti revenues were $495.2 million, up 2% year-over-year but below expectations [4]. - U.S. Protiviti revenues decreased by 1% year-over-year, while non-U.S. revenues increased by 11% [4]. Currency Impact - Currency exchange rate movements contributed an additional $8 million to total revenues year-over-year, with $4 million attributed to both Talent Solutions and Protiviti [5]. Profitability Metrics - Adjusted gross profit was $522.3 million, down 9.9% year-over-year, with a gross profit margin of 39.1%, declining by 210 basis points [6]. Balance Sheet and Cash Flow - The company ended the quarter with cash and cash equivalents of $380.6 million, down from $547.4 million in the same quarter of the previous year [7]. - Operating cash flow was $119 million, with capital expenditures of $15.2 million and $59 million paid out in dividends [7]. Future Guidance - For Q3 2025, Robert Half expects revenues between $1.31 billion and $1.41 billion, with EPS projected between 37 cents and 47 cents [8]. - Capital expenditures for 2025 are anticipated to be between $75 million and $90 million, with $15 million to $25 million expected in Q3 [9]. Estimate Trends - Since the earnings release, there has been a downward trend in estimates, with a consensus estimate shift of -20.19% [10][11]. VGM Scores - Robert Half holds a Growth Score of B, a Momentum Score of C, and a Value Score of A, placing it in the top 20% for value investment strategy [12]. Overall Outlook - The overall trend in estimates indicates a downward shift, leading to a Zacks Rank of 4 (Sell), suggesting below-average returns in the coming months [13].

Core Insights - The report emphasizes that strong data capabilities are essential for AI success, with 69% of organizations with high AI maturity expressing confidence in their data capabilities [1][3] - Effective governance, data engineering, analytics, and training are crucial for advancing AI maturity and improving ROI [1][3] AI Maturity Stages - Organizations progress through five stages of AI maturity, with Stage 5 representing the highest level where 97% of organizations report confidence in their data management capabilities [2][6] - At Stage 1, organizations recognize AI's potential but lack strategic initiatives, while by Stage 5, AI drives significant business transformation [6][7] Data Confidence and ROI - High data confidence correlates with exceeding AI investment expectations, as organizations with robust data governance are more likely to achieve meaningful outcomes [4][5] - 74% of organizations conduct regular data audits, a significant increase from 36% at Stage 1, indicating improved data practices [5] Barriers and Challenges - Despite advancements, 57% of AI-mature organizations still face challenges related to inadequate data governance [12] - Security and compliance concerns increase with maturity, with 59% of Stage 5 organizations citing these as top issues, up from 41% at Stage 1 [12] Sector and Role Insights - The technology and financial services sectors lead in data trust, while manufacturing and distribution lag behind [12] - Confidence in data increases with seniority, peaking at the C-suite level, indicating a correlation between leadership and data governance effectiveness [12]

Financial Data and Key Metrics Changes - Consolidated revenues for Q3 2025 were $24.5 million, down 9.1% from the prior year period, and year-to-date revenues were $73 million, down 10.1% [6][11] - Gross profits for the quarter were $8.7 million with a gross margin of 35.4%, compared to $9.2 million and 34.1% in the prior year quarter [7][12] - The net loss from continuing operations for the quarter was $400,000, or $0.00 per diluted share, while the year-to-date loss was $34 million, or $0.31 per diluted share [7][14] - Non-GAAP adjusted EBITDA was negative $25,000 for the quarter and negative $918,000 year-to-date, showing improvements compared to the prior year [7][15] Business Line Data and Key Metrics Changes - Professional contract staffing services revenues for Q3 were $21.3 million, down 10.1% year-over-year, and year-to-date revenues were $64.3 million, down 10.1% [11] - Direct hire revenues for the quarter were $3.2 million, near breakeven, and year-to-date revenues were $8.7 million, also near breakeven [11] Market Data and Key Metrics Changes - The staffing industry is facing significant challenges due to macroeconomic uncertainties, interest rate volatility, and inflation, leading to a cooling effect on U.S. employment [4][5] - Many clients have paused hiring initiatives and focused on retaining existing employees, resulting in fewer job orders for staffing services [5] Company Strategy and Development Direction - The company is focusing on streamlining core operations, improving productivity, and integrating AI technology into recruiting and sales processes [8][14] - There is a renewed focus on Vendor Management Systems (VMS) and Managed Service Provider (MSP) business models to enhance operational efficiency [8][14] - The company is preparing for a recovery in the labor market and anticipates increased demand from existing customers [9][18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about navigating current challenges and emphasized the importance of revenue growth and cost reduction [9][18] - The company is well-positioned with a strong balance sheet and substantial liquidity, allowing for potential growth and acquisitions in the future [9][16] Other Important Information - The company has paused share repurchases since December 31, 2023, but considers it a potential future strategy [9][18] - The liquidity position remains strong with $18.6 million in cash and no outstanding debt [16] Q&A Session Summary Question: Update on the sale of Triad - The company will update the website regarding the sale of Triad and other current activities [19] Question: Capital allocation strategy - The company is considering both acquisitions and share repurchases, with a focus on restoring positive cash flow before making decisions [21][24] Question: Status of M&A target list - Several potential deals are under consideration, but the company is cautious due to the current stagnant market conditions [22][24] Question: Competitors' performance comparison - Competitors are facing similar challenges, with some emphasizing consulting services to buffer declines in traditional staffing roles [34][36] Question: Impact of AI on staffing demand - AI is seen as both a challenge and an opportunity, with the company focusing on high-demand skill sets while adapting to changes in the labor market [30][42]

[Cover Page and Filing Information](index=1&type=section&id=Cover%20Page%20and%20Filing%20Information) [FORM 10-Q Filing Details](index=1&type=section&id=FORM%2010-Q%20Filing%20Details) 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](index=2&type=chunk) 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](index=2&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) 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)](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20FINANCIAL%20POSITION%20(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](index=8&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20(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](index=9&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)%20(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](index=11&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY%20(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](index=12&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20(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](index=13&type=chunk) [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)](index=7&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) [Note A—Summary of Significant Accounting Policies](index=7&type=section&id=Note%20A%E2%80%94Summary%20of%20Significant%20Accounting%20Policies) 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](index=15&type=chunk) - Income from investments in employee deferred compensation trusts is fully offset by related costs and has no impact on net income[23](index=23&type=chunk) - 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](index=25&type=chunk)[28](index=28&type=chunk) 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](index=10&type=section&id=Note%20B%E2%80%94New%20Accounting%20Pronouncements) 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](index=33&type=chunk) - FASB ASU 2024-03, effective for annual periods after December 15, 2026, will require disaggregation of certain income statement expense captions[33](index=33&type=chunk) - The company anticipates these new standards will alter disclosures but not materially impact its financial results or condition[33](index=33&type=chunk) [Note C—Revenue Recognition](index=10&type=section&id=Note%20C%E2%80%94Revenue%20Recognition) 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](index=35&type=chunk)[36](index=36&type=chunk) - Permanent placement talent solutions revenue is recognized at the point in time a candidate accepts an offer of permanent employment[40](index=40&type=chunk) - Protiviti consulting services revenue is recognized over time using a cost-to-cost measure of progress for performance obligations[41](index=41&type=chunk) 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](index=12&type=section&id=Note%20D%E2%80%94Other%20Current%20Assets) 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](index=48&type=chunk) 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](index=12&type=section&id=Note%20E%E2%80%94Property%20and%20Equipment,%20Net) 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](index=49&type=chunk) 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](index=13&type=section&id=Note%20F%E2%80%94Other%20Noncurrent%20Assets) 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](index=52&type=chunk) 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](index=13&type=section&id=Note%20G%E2%80%94Leases) 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](index=53&type=chunk) 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](index=14&type=section&id=Note%20H%E2%80%94Goodwill) 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](index=58&type=chunk) 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](index=14&type=section&id=Note%20I%E2%80%94Accrued%20Payroll%20and%20Benefit%20Costs) 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](index=59&type=chunk) 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](index=14&type=section&id=Note%20J%E2%80%94Employee%20Deferred%20Compensation%20Plan%20Obligations) 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](index=60&type=chunk)[61](index=61&type=chunk) 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](index=15&type=section&id=Note%20K%E2%80%94Commitments%20and%20Contingencies) 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](index=64&type=chunk)[65](index=65&type=chunk) - Management believes it has meritorious defenses to these claims and has not recorded a provision for potential losses[64](index=64&type=chunk)[65](index=65&type=chunk) - 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](index=67&type=chunk) [Note L—Stockholders' Equity](index=16&type=section&id=Note%20L%E2%80%94Stockholders'%20Equity) 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](index=70&type=chunk) 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](index=16&type=section&id=Note%20M%E2%80%94Net%20Income%20Per%20Share) 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](index=72&type=chunk) 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](index=17&type=section&id=Note%20N%E2%80%94Business%20Segments) 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](index=75&type=chunk)[76](index=76&type=chunk) 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](index=19&type=section&id=Note%20O%E2%80%94Subsequent%20Events) 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](index=20&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, liquidity, and capital resources [Forward-Looking Statements](index=20&type=section&id=Forward-Looking%20Statements) 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](index=86&type=chunk) [Executive Overview](index=20&type=section&id=Executive%20Overview) 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](index=87&type=chunk) - 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](index=88&type=chunk)[89](index=89&type=chunk) - The company continues to invest in technology and AI to enhance digital experiences and improve talent acquisition tools[91](index=91&type=chunk) 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](index=21&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) 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](index=93&type=chunk) [Recent Accounting Pronouncements](index=21&type=section&id=Recent%20Accounting%20Pronouncements) 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](index=94&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) 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](index=95&type=chunk) - Demand for the company's services is highly dependent on global economic and labor market trends, making future demand difficult to predict[96](index=96&type=chunk) [Non-GAAP Financial Measures](index=22&type=section&id=Non-GAAP%20Financial%20Measures) 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](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) - Adjusted revenue growth is calculated by removing the impacts of billing day variations and foreign currency exchange rates[99](index=99&type=chunk) [Three Months Ended June 30, 2025 and 2024](index=22&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20and%202024) This section provides a detailed comparative analysis of the company's operating results for the second quarter of 2025 versus 2024 [Service Revenues_Q2](index=22&type=section&id=Service%20Revenues_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](index=103&type=chunk)[105](index=105&type=chunk) 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](index=23&type=section&id=Gross%20Margin_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](index=25&type=section&id=Selling,%20General%20and%20Administrative%20Expenses_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](index=26&type=section&id=Operating%20Income_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](index=27&type=section&id=Income%20from%20Investments%20Held%20in%20Employee%20Deferred%20Compensation%20Trusts_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](index=123&type=chunk) 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](index=27&type=section&id=Provision%20for%20income%20taxes_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](index=124&type=chunk) - 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](index=125&type=chunk) 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](index=27&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section provides a detailed comparative analysis of the company's operating results for the first half of 2025 versus 2024 [Service Revenues_H1](index=27&type=section&id=Service%20Revenues_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](index=127&type=chunk)[128](index=128&type=chunk) 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](index=28&type=section&id=Gross%20Margin_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](index=30&type=section&id=Selling,%20General%20and%20Administrative%20Expenses_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](index=31&type=section&id=Operating%20Income_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](index=32&type=section&id=Income%20from%20Investments%20Held%20in%20Employee%20Deferred%20Compensation%20Trusts_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](index=146&type=chunk) 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](index=32&type=section&id=Provision%20for%20income%20taxes_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](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) 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](index=148&type=chunk) - In H1 2025, operating activities provided **$60 million** in net cash, while investing and financing activities used **$49 million** and **$192 million**, respectively[149](index=149&type=chunk) - The company anticipates capital expenditures for 2025 to be between **$75 million** and **$90 million**[152](index=152&type=chunk) - During H1 2025, the company repurchased **1.1 million** shares for **$59 million** and paid **$121 million** in dividends[153](index=153&type=chunk)[154](index=154&type=chunk) - The company entered into a **$100 million credit agreement** on May 28, 2025, with no borrowings outstanding as of June 30, 2025[157](index=157&type=chunk) 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](index=33&type=section&id=Material%20Cash%20Requirements%20from%20Contractual%20Obligations) 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](index=159&type=chunk) - Purchase obligations did not change materially during the first half of 2025[161](index=161&type=chunk) - 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](index=162&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) 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](index=163&type=chunk)[164](index=164&type=chunk) - 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](index=165&type=chunk) - Exchange rate movements impact reported results but generally do not result in realized economic gains or losses or affect cash flows[167](index=167&type=chunk) [ITEM 4. Controls and Procedures](index=35&type=section&id=ITEM%204.%20Controls%20and%20Procedures) 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](index=168&type=chunk) - There were no material changes to the company's internal controls during the three months ended June 30, 2025[168](index=168&type=chunk) [PART II—OTHER INFORMATION](index=36&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [ITEM 1. Legal Proceedings](index=36&type=section&id=ITEM%201.%20Legal%20Proceedings) 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](index=171&type=chunk) [ITEM 1A. Risk Factors](index=36&type=section&id=ITEM%201A.%20Risk%20Factors) 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](index=172&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) 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](index=177&type=chunk) 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](index=36&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities - No defaults upon senior securities[174](index=174&type=chunk) [ITEM 4. Mine Safety Disclosure](index=36&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosure) This section states that mine safety disclosures are not applicable to the company's business - Mine safety disclosures are not applicable[175](index=175&type=chunk) [ITEM 5. Other Information](index=36&type=section&id=ITEM%205.%20Other%20Information) This section states that there is no other information to disclose - No other information[176](index=176&type=chunk) [ITEM 6. Exhibits](index=36&type=section&id=ITEM%206.%20Exhibits) 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](index=179&type=chunk) [SIGNATURES](index=38&type=section&id=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](index=181&type=chunk)

Core Insights - The majority of workers (73%) plan to remain in their current roles through the end of 2025, indicating a trend towards job stability [2][3] - Only 27% of workers intend to actively seek new employment in the latter half of the year, a decrease from 29% in January and 35% a year prior [1][3] Worker Sentiment - Among those planning to stay, 37% value their current flexibility and do not wish to risk losing it [3] - The top reasons for staying include a positive company culture (33%), professional fulfillment (31%), and competitive compensation (29%) [6] Job Search Trends - Gen Z (32%) and Millennials (31%) are the most likely demographics to seek new jobs, with marketing and creative (34%) and technology professionals (30%) also showing significant interest [3] - The primary motivators for job seekers are better benefits and perks (45%), career advancement opportunities (43%), and higher pay (42%) [3] Contract Work Insights - A significant portion (91%) of those considering a career change are interested in switching industries, while 71% would contemplate contract work instead of full-time positions [4] - Contract work is increasingly viewed as a viable long-term career path, offering flexibility and diverse experiences [8][9] Company Strategy - Employers are encouraged to adopt strategic approaches to attract talent, focusing on flexibility, career development, and fostering a positive workplace culture [4]

Core Insights - Robert Half International Inc. (RHI) reported second-quarter fiscal 2026 results with earnings and revenues exceeding the Zacks Consensus Estimate, yet the market reaction was negative, leading to a 6.1% decline in stock price since the earnings release on July 23 [1] - Quarterly earnings were 41 cents per share, surpassing estimates by 2.5% but reflecting a year-over-year decline of 37.9% [1][7] - Revenues totaled $1.37 billion, exceeding the consensus by 1.4% but down 7% year over year [1][7] Financial Performance - Talent Solutions revenues were $874.521 million, down 11.3% year over year and below the estimate of $914.2 million; U.S. Talent Solutions revenues were $668 million, a decrease of 11% year over year [4] - Protiviti revenues reached $495.2 million, up 2% year over year but below expectations; U.S. Protiviti revenues decreased by 1% to $396 million, while non-U.S. revenues increased by 11% to $99 million [5] - The adjusted gross profit was $522.3 million, down 9.9% year over year, with a gross profit margin of 39.1%, a decline of 210 basis points [8] Market Comparison - RHI's shares have depreciated 37.2% over the past year, contrasting with a 28.4% decline in the Staffing Firms industry and a 17.4% rise in the Zacks S&P 500 composite [2] Guidance and Projections - For Q3 2025, RHI expects revenues between $1.31 billion and $1.41 billion, with an EPS forecast of 37 to 47 cents, below the current consensus estimate of 52 cents [10] - The company anticipates 64.2 billing days in Q3 2025, slightly up from 64.1 billing days in Q3 2024 [11] - Capital expenditures for Q3 are projected between $15 million and $25 million, with full-year estimates for 2025 ranging from $75 million to $90 million [11]

Core Viewpoint - The analyst had a sell rating for Robert Half Inc. (NYSE: RHI) due to its elevated stock multiple amidst ongoing challenges, but there are early signs of improvement in the company's fundamentals [1]. Group 1: Investment Philosophy - The investment approach is fundamentally driven, focusing on identifying businesses with potential for long-term scaling and significant terminal value [1]. - Key factors considered include competitive moat, unit economics, reinvestment opportunities, and management quality, which are essential for long-term free cash flow generation and shareholder value creation [1]. - The analyst emphasizes the importance of fundamental research and targets sectors with strong secular tailwinds [1]. Group 2: Professional Background - The analyst has 10 years of experience in investment banking and is currently managing personal funds sourced from friends and family [1]. - The motivation for writing is to share investment insights and receive feedback from the investment community [1]. - The goal is to help readers focus on the drivers of long-term equity value, advocating for analysis that is both analytical and accessible [1].

Core Insights - Robert Half (RHI) reported quarterly earnings of $0.41 per share, exceeding the Zacks Consensus Estimate of $0.40 per share, but down from $0.66 per share a year ago, indicating an earnings surprise of +2.50% [1] - The company posted revenues of $1.37 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.35%, but down from $1.47 billion year-over-year [2] - Robert Half shares have declined approximately 39.4% year-to-date, contrasting with the S&P 500's gain of 7.3% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.53 on revenues of $1.37 billion, and for the current fiscal year, it is $1.63 on revenues of $5.42 billion [7] - The estimate revisions trend for Robert Half was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market [6] Industry Context - The Staffing Firms industry, to which Robert Half belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Global enterprise revenues for the second quarter of 2025 were $1,370 million, down 7% from the same period last year on both a reported and adjusted basis [6] - Net income per share decreased to $0.41 from $0.66 year-over-year [6] - Cash flow from operations was $119 million during the quarter [7] - Return on invested capital was 12% in the second quarter [9] Business Line Data and Key Metrics Changes - Talent Solutions revenues were down 11% year-over-year, with U.S. revenues at $668 million and non-U.S. revenues at $207 million [10][11] - Protiviti's global revenues were $495 million, with U.S. revenues down 1% and non-U.S. revenues up 11% year-over-year [12][13] - Contract Talent Solutions bill rates increased by 3.8% year-over-year, adjusted for revenue mix [12] Market Data and Key Metrics Changes - The unemployment rate for college-educated professionals remained low at 2.5%, indicating labor supply constraints [22] - Job openings are above historical levels, suggesting strong pent-up hiring demand despite subdued hiring activity [22] Company Strategy and Development Direction - The company aims to capitalize on emerging opportunities through its strong brand, technology, and unique business model that includes both professional staffing and business consulting services [7] - The strategic integration of contract professionals sourced through Talent Solutions is seen as a key driver for performance [24] - The company is committed to connecting people to meaningful work and providing clients with the necessary talent and consulting expertise [24] Management's Comments on Operating Environment and Future Outlook - Management noted that fears of economic recession have eased, and small business confidence has rebounded modestly [22] - The tone of client conversations has improved recently, indicating a potential uptick in demand [48] - Protiviti's pipeline remains strong, with new opportunities increasing significantly in the last thirty days [36] Other Important Information - The company distributed a cash dividend of $0.59 per share, totaling $59 million, with an average annual growth of 11.5% since 2004 [8] - The adjusted operating income for the second quarter was $59 million, or 4.3% of revenue [16] Q&A Session Summary Question: Inquiry about bill rate increases - Management indicated that unadjusted bill rates would be higher due to mix impacts, with historical increases of 100 to 200 basis points [28][30] Question: Clarification on Protiviti's project timelines - Management explained that the slight year-on-year revenue decline is due to extended conversion timelines and reduced average project sizes, but the pipeline remains strong [34][36] Question: Dynamics of the entry-level labor market - Management noted that AI has had little impact on revenues so far, and small business clients typically seek experienced staff rather than entry-level graduates [60][62] Question: Performance of financial services clients - Management stated that trends in Protiviti's financial services client base are consistent with overall business trends, with cost consciousness and extended decision cycles [70] Question: Competitive dynamics in Protiviti - Management clarified that competition from the Big Four has stabilized, and competitive dynamics are not a significant factor in the current revenue trends [92] Question: Non-U.S. productivity growth - Management highlighted that non-U.S. productivity growth was driven by favorable comparisons and successful joint projects in Germany and Canada [99]

Financial Data and Key Metrics Changes - Global enterprise revenues for Q2 2025 were $1.37 billion, down 7% year-over-year on both reported and adjusted bases [4] - Net income per share decreased to $0.41 from $0.66 in the same quarter last year [4] - Cash flow from operations was $119 million, with a cash dividend of $0.59 per share distributed, totaling $59 million [5] - Return on invested capital was 12% in Q2 [6] Business Line Data and Key Metrics Changes - Talent Solutions revenues were down 11% year-over-year, with U.S. revenues at $668 million and non-U.S. revenues at $207 million, down 11% and 13% respectively [6][7] - Protiviti's global revenues were $495 million, with U.S. revenues down 1% and non-U.S. revenues up 11% year-over-year [9][10] - Contract Talent Solutions gross margin was 39.1%, slightly down from 39.3% year-over-year [11] - Overall gross margin for Talent Solutions was 47.1%, down from 47.4% [12] Market Data and Key Metrics Changes - The U.S. job market remains resilient with an unemployment rate of 4.1%, and the unemployment rate for college-educated professionals is at 2.5% [20] - Job openings are above historical levels, indicating strong pent-up hiring demand [20] - Protiviti achieved year-on-year revenue growth for the fourth consecutive quarter, although growth rates have moderated due to economic uncertainty [21] Company Strategy and Development Direction - The company aims to capitalize on emerging opportunities through its strong brand, technology, and unique business model that includes both professional staffing and consulting services [5] - The strategic integration of contract professionals through Talent Solutions is seen as a key driver for performance [22] - The company remains committed to connecting people to meaningful work and providing clients with the necessary talent and consulting expertise [22] Management's Comments on Operating Environment and Future Outlook - Management noted that elevated global economic uncertainty has extended client caution and subdued hiring activity [4] - There is a cautious optimism as small business confidence has rebounded modestly, and hiring urgency is expected to increase [20][21] - The company anticipates a slight year-on-year revenue decline in Q3 but expects potential growth by Q4 if new opportunities materialize [31] Other Important Information - The company has 6.2 million shares available for repurchase under its stock repurchase plan [5] - The tax rate for Q2 was 33%, up from 29% year-over-year due to increased nondeductible expenses [15] Q&A Session Summary Question: Inquiry about bill rate increases - Management acknowledged that bill rates have increased due to a mix shift, but specific unadjusted figures were not provided [24][25] Question: Clarification on Protiviti's project timelines - Management indicated that conversion timelines have extended, impacting revenue, but the pipeline remains strong with new opportunities increasing [28][30] Question: Dynamics of the entry-level labor market - Management noted that AI has had little impact on revenues so far, and small business clients typically seek experienced staff rather than entry-level graduates [50][51] Question: Performance of financial services clients - Management stated that trends in Protiviti's financial services client base mirror overall business trends, with cost consciousness and extended decision cycles [59] Question: Resilience of enterprise clients - Management observed that enterprise clients have been more resilient than SMB clients, particularly reflected in Protiviti's results [81]