ROBERT HALF REPORTS THIRD-QUARTER FINANCIAL RESULTS
MENLO PARK, Calif., Oct. 22, 2024 /PRNewswire/ -- Robert Half Inc. (NYSE:RHI) today reported revenues and earnings for the third quarter ended September 30, 2024.
For the three months ended September 30, 2024, net income was $65 million, or $0.64 per share, on revenues of $1.465 billion. For the three months ended September 30, 2023, net income was $96 million, or $0.90 per share, on revenues of $1.564 billion.
For the nine months ended September 30, 2024, net income was $197 million, or $1.91 per share, on revenues of $4.413 billion. For the nine months ended September 30, 2023, net income was $324 million, or $3.04 per share, on revenues of $4.920 billion.
"Revenues and earnings for the third quarter exceeded our expectations, driven by very strong results from Protiviti, which posted sequential and year-on-year revenue gains," said M. Keith Waddell, president and chief executive of Robert Half. "While client budgets remain constrained and decision cycles extended, business confidence levels are improving, aided by continuing progress on inflation and the beginning of a global rate-cutting cycle. This is reflected in our most recent weekly sequential results, which have been stable and consistent for the past 12 to 14 weeks. We continue to be confident, both in our ability to weather the current climate and in our future growth prospects as the macro landscape improves.
"We would like to thank our people across the globe, whose efforts have made possible a number of new accolades. Most recently, Robert Half was named one of Fortune's Best Workplaces in Consulting & Professional Services™, one of PEOPLE's Companies that Care® and one of the World's Best Employers by Forbes. We also received five prestigious Academy of Interactive & Visual Arts w3 Awards for recent enhancements made to our Robert Half mobile app, highlighting our ongoing commitment to innovation," Waddell concluded.
Robert Half management will conduct a conference call today at 5 p.m. EDT. The prepared remarks for this call are available now in the Investor Center of the Robert Half website (www.roberthalf.com/investor-center). Simply click on the Quarterly Conference Calls link. The dial-in number is 888-394-8218 (+1-323-994-2093 outside the United States and Canada). The confirmation code to access the call is 7836703.
A recording of this call will be available for audio replay beginning at approximately 8 p.m. EDT on October 22 and ending after 12 months. To access the replay, visit https://webcasts.com/RobertHalfQ32024. The conference call also will be archived in audio format on the Company's website at roberthalf.com.
Robert Half is the world's first and largest specialized talent solutions and business consulting firm, connecting highly skilled job seekers with rewarding opportunities at great companies. We offer contract talent and permanent placement solutions in the fields of finance and accounting, technology, marketing and creative, legal, and administrative and customer support, and we also provide executive search services. Robert Half is the parent company of Protiviti®, a global consulting firm that delivers internal audit, risk, business and technology consulting solutions. In the past 12 months, Robert Half, including Protiviti, has been named Fortune® World's Most Admired Companies™ and 100 Best Companies to Work For, and a Forbes Best Employer for Diversity.
Certain information contained in this press release and its attachments may be deemed forward-looking statements regarding events and financial trends that may affect the future operating results or financial positions of Robert Half Inc. (the "Company"). Forward-looking statements are not guarantees or promises that goals or targets will be met. These statements may be identified by words such as "anticipate," "potential," "estimate," "forecast," "target," "project," "plan," "intend," "believe," "expect," "should," "could," "would," "may," "might," "will," or variations or negatives thereof or by similar or comparable words or phrases. In addition, historical, current, and forward-looking information about the Company's environmental, social, and governance and compliance programs, including targets or goals, may not be considered material for the Securities and Exchange Commission ("SEC") or other mandatory reporting purposes and may be based on standards for measuring progress that are still developing, on internal controls, diligence, or processes that are evolving, on representations reviewed or provided by third parties, and on assumptions that are subject to change in the future. Forward-looking statements are estimates only, based on management's current expectations, currently available information and current strategy, plans, or forecasts, and involve certain known and unknown risks, uncertainties, and assumptions that are difficult to predict and often beyond our control and are inherently uncertain. Forward-looking statements are subject to risks and uncertainties that could cause actual results, outcomes, or the timing of these results or outcomes, to differ materially from those expressed or implied in the statements.
These risks and uncertainties include, but are not limited to, the following: changes to or new interpretations of United States of America ("U.S.") or international tax regulations; the global financial and economic situation; changes in levels of unemployment and other economic conditions in the U.S. or foreign countries where the Company does business, or in particular regions or industries; reduction in the supply of candidates for contract employment or the Company's ability to attract candidates; the development, proliferation and adoption of artificial intelligence ("AI") by the Company and the third parties it serves; the entry of new competitors into the marketplace or expansion by existing competitors; the ability of the Company to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the Company's services, on the Company's ability to maintain its margins; the possibility of the Company incurring liability for its activities, including the activities of its engagement professionals, or for events impacting its engagement professionals on clients' premises; the possibility that adverse publicity could impact the Company's ability to attract and retain clients and candidates; the success of the Company in attracting, training, and retaining qualified management personnel and other staff employees; the Company's ability to comply with governmental regulations affecting personnel services businesses in particular or employer/employee relationships in general; whether there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; the Company's reliance on short-term contracts for a significant percentage of its business; litigation relating to prior or current transactions or activities, including litigation that may be disclosed from time to time in the Company's SEC filings; the impact of extreme weather conditions on the Company and its candidates and clients, the ability of the Company to manage its international operations and comply with foreign laws and regulations; the impact of fluctuations in foreign currency exchange rates; the possibility that the additional costs the Company will incur as a result of health care or other reform legislation may adversely affect the Company's profit margins or the demand for the Company's services; the possibility that the Company's computer and communications hardware and software systems could be damaged or their service interrupted or the Company could experience a cybersecurity breach; and the possibility that the Company may fail to maintain adequate financial and management controls, and as a result suffer errors in its financial reporting.
Additionally, with respect to Protiviti, other risks and uncertainties include the fact that future success will depend on its ability to retain employees and attract clients; there can be no assurance that there will be ongoing demand for broad based consulting, regulatory compliance, technology services, public sector or other high demand advisory services; failure to produce projected revenues could adversely affect financial results; and there is the possibility of involvement in litigation relating to prior or current transactions or activities.
A summary of additional risks and uncertainties can be found in the Annual Report on Form 10-K for the year ended December 31, 2023, and in the Company's other filings with the U.S. Securities and Exchange Commission.
Because long-term contracts are not a significant part of the Company's business, future results cannot be reliably predicted by considering past trends or extrapolating past results. The Company undertakes no obligation to update information contained in this release, whether as a result of new information, future events, or otherwise, and notwithstanding any historical practice of doing so.
A copy of this release is available at www.roberthalf.com/investor-center.
ATTACHED:
Summary of Operations
Supplemental Financial Information
Non-GAAP Financial Measures
ROBERT HALF INC
SUMMARY OF OPERATIONS
(in thousands, except per share amounts)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
Service revenues
$ 1,465,004
$ 1,563,812
$ 4,413,465
$ 4,919,625
Costs of services
893,348
922,873
2,702,333
2,928,785
Gross margin
571,656
640,939
1,711,132
1,990,840
Selling, general and administrative expenses
510,786
496,732
1,533,213
1,590,865
(Income) loss from investments held in employee deferred compensation trusts (which is completely offset by related costs and expenses)
(29,230)
14,275
(88,339)
(41,363)
Amortization of intangible assets
305
720
913
2,162
Interest income, net
(5,391)
(7,131)
(16,990)
(17,276)
Income before income taxes
95,186
136,343
282,335
456,452
Provision for income taxes
29,735
40,798
85,027
132,610
Net income
$ 65,451
$ 95,545
$ 197,308
$ 323,842
Diluted net income per share
$ 0.64
$ 0.90
$ 1.91
$ 3.04
Weighted average shares:
Basic
102,175
105,340
103,034
105,950
Diluted
102,393
105,810
103,371
106,450
ROBERT HALF INC
SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
SERVICE REVENUES INFORMATION
Contract talent solutions
Finance and accounting
$ 614,131
$ 676,588
$ 1,879,221
$ 2,175,812
Administrative and customer support
178,409
196,565
568,685
626,938
Technology
160,184
170,574
476,053
546,432
Elimination of intersegment revenues (1)
(122,321)
(100,630)
(351,601)
(341,228)
Total contract talent solutions
830,403
943,097
2,572,358
3,007,954
Permanent placement talent solutions
123,275
139,931
379,105
445,922
Protiviti
511,326
480,784
1,462,002
1,465,749
Total service revenues
$ 1,465,004
$ 1,563,812
$ 4,413,465
$ 4,919,625
(1)
Service revenues for finance and accounting, administrative and customer support, and technology include intersegment revenues, which represent revenues from services provided to the Company's Protiviti segment in connection with the Company's blended business solutions. Intersegment revenues for each functional specialization are aggregated and then eliminated as a single line.
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
(Unaudited)
(Unaudited)
BUSINESS SEGMENT INCOME INFORMATION:
Contract talent solutions
$ 25,844
3.1 %
$ 58,475
6.2 %
$ 114,108
4.4 %
$ 241,937
8.0 %
Permanent placement talent solutions
$ 12,187
9.9 %
$ 19,055
13.6 %
$ 40,190
10.6 %
$ 64,612
14.5 %
Protiviti
$ 52,069
10.2 %
$ 52,402
10.9 %
$ 111,960
7.7 %
$ 134,789
9.2 %
September 30,
2024
2023
(Unaudited)
SELECTED BALANCE SHEET INFORMATION:
Cash and cash equivalents
$ 570,466
$ 729,472
Accounts receivable, net
$ 885,401
$ 941,121
Total assets
$ 2,982,225
$ 3,021,050
Total current liabilities
$ 1,310,252
$ 1,276,278
Total stockholders' equity
$ 1,473,835
$ 1,579,971
Nine Months EndedSeptember 30,
2024
2023
(Unaudited)
SELECTED CASH FLOW INFORMATION:
Depreciation
$ 38,713
$ 37,963
Capitalized cloud computing implementation costs
$ 22,879
$ 28,479
Capital expenditures
$ 42,012
$ 34,149
Open market repurchases of common stock (shares)
2,460
2,362
ROBERT HALF INC.NON-GAAP FINANCIAL MEASURES
The financial results of Robert Half Inc. (the "Company") are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the rules of the SEC. To help readers understand the Company's financial performance, the Company supplements its GAAP financial results with the following non-GAAP measures: adjusted gross margin; adjusted selling, general and administrative expenses; combined segment income; and as adjusted revenue growth rates.
The following measures: adjusted gross margin and adjusted selling, general and administrative expenses, include gains and losses on investments held to fund the Company's obligations under employee deferred compensation plans. The Company provides these measures because they are used by management to review its operational results.
Combined segment income is income before income taxes, adjusted for interest income and amortization of intangible assets. The Company provides combined segment income because it is how management evaluates performance.
As adjusted revenue growth rates represent year-over-year revenue growth rates after removing the impacts on reported revenues from the changes in the number of billing days and foreign currency exchange rates. The Company provides this data because it focuses on the Company's revenue growth rates attributable to operating activities and aids in evaluating revenue trends over time. The impacts from the changes in billing days and foreign currency exchange rates are calculated as follows:
Billing days impact is calculated by dividing each comparative period's reported revenues by the number of billing days for that period to arrive at a per billing day amount. Same billing day growth rates are then calculated based on the per billing day amounts. Management calculates a global, weighted-average number of billing days for each reporting period based upon inputs from all countries and all functional specializations and segments.
Foreign currency impact is calculated by retranslating current period international revenues, using foreign currency exchange rates from the prior year's comparable period.
The non-GAAP financial measures provided herein may not provide information that is directly comparable to that provided by other companies in the Company's industry, as other companies may calculate such financial results differently. The Company's non-GAAP financial measures are not measurements of financial performance under GAAP and should not be considered as alternatives to amounts presented in accordance with GAAP. The Company does not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial results. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is provided on the following pages.
ROBERT HALF INC
NON-GAAP FINANCIAL MEASURES
ADJUSTED GROSS MARGIN (UNAUDITED):
(in thousands)
Three Months Ended September 30,
Relationships
Nine Months Ended September 30,
Relationships
As Reported
As Adjusted
As Reported
As Adjusted
As Reported
As Adjusted
As Reported
As Adjusted
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Gross Margin
Contract talent solutions
$ 323,035
$ 375,158
$ 323,035
$ 375,158
38.9 %
39.8 %
38.9 %
39.8 %
$ 1,009,766
$ 1,197,419
$ 1,009,766
$ 1,197,419
39.3 %
39.8 %
39.3 %
39.8 %
Permanent placement talent solutions
123,004
139,681
123,004
139,681
99.8 %
99.8 %
99.8 %
99.8 %
378,353
445,051
378,353
445,051
99.8 %
99.8 %
99.8 %
99.8 %
Total talent solutions
446,039
514,839
446,039
514,839
46.8 %
47.5 %
46.8 %
47.5 %
1,388,119
1,642,470
1,388,119
1,642,470
47.0 %
47.6 %
47.0 %
47.6 %
Protiviti
125,617
126,100
131,707
123,255
24.6 %
26.2 %
25.8 %
25.6 %
323,013
348,370
340,690
355,621
22.1 %
23.8 %
23.3 %
24.3 %
Total
$ 571,656
$ 640,939
$ 577,746
$ 638,094
39.0 %
41.0 %
39.4 %
40.8 %
$ 1,711,132
$ 1,990,840
$ 1,728,809
$ 1,998,091
38.8 %
40.5 %
39.2 %
40.6 %
The following tables provide reconciliations of the non-GAAP adjusted gross margin to reported gross margin for the three months ended September 30, 2024 and 2023:
Three Months Ended September 30, 2024
Three Months Ended September 30, 2023
Contract talent
solutions
Permanent placement talent solutions
Total talentsolutions
Protiviti
Total
Contract talent
solutions
Permanentplacement talent solutions
Total talent solutions
Protiviti
Total
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% ofRevenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
Gross Margin
As Reported
$ 323,035
38.9 %
$ 123,004
99.8 %
$ 446,039
46.8 %
$ 125,617
24.6 %
$ 571,656
39.0 %
$ 375,158
39.8 %
$ 139,681
99.8 %
$ 514,839
47.5 %
$ 126,100
26.2 %
$ 640,939
41.0 %
Adjustments (1)
—
—
—
—
—
—
6,090
1.2 %
6,090
0.4 %
—
—
—
—
—
—
(2,845)
(0.6 %)
(2,845)
(0.2 %)
As Adjusted
$ 323,035
38.9 %
$ 123,004
99.8 %
$ 446,039
46.8 %
$ 131,707
25.8 %
$ 577,746
39.4 %
$ 375,158
39.8 %
$ 139,681
99.8 %
$ 514,839
47.5 %
$ 123,255
25.6 %
$ 638,094
40.8 %
The following tables provide reconciliations of the non-GAAP adjusted gross margin to reported gross margin for the nine months ended September 30, 2024 and 2023:
Nine Months Ended September 30, 2024
Nine Months Ended September 30, 2023
Contract talent
solutions
Permanent placement talent solutions
Total talent solutions
Protiviti
Total
Contract talent
solutions
Permanent placement talent solutions
Total talent solutions
Protiviti
Total
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
% of Revenue
$
