Robert Half Q4 Earnings Call Highlights

Key Points

• Robert Half reported Q4 enterprise revenue of $1.302 billion, down about 6–7% year over year, and GAAP EPS of $0.32 (vs. $0.53 a year ago), but generated strong operating cash flow of $183 million and paid a $0.59 per-share dividend.
• Segment results showed Talent Solutions revenue down 9% (U.S. $623M, non-U.S. $200M) with contract bill rates up 3.2%, while Protiviti fell an adjusted 3% (U.S. -6%, non-U.S. +9%) and saw gross margin pressure (Protiviti gross margin down to 21.9%); enterprise SG&A increased, leaving adjusted operating income at $43 million (3.3% of revenues).
• Q1 2026 guidance calls for revenue of $1.26–$1.36 billion and EPS of $0.08–$0.18 (midpoint implies ~5% adjusted YOY decline), management noted improving sequential trends and said it could return to positive YOY growth by Q3 if current momentum continues, but warned of an unusually high Q1 tax rate of 56–58%.

Robert Half NYSE: RHI executives pointed to improving sequential revenue trends during the fourth quarter of 2025, while acknowledging continued year-over-year declines across the company’s staffing and consulting operations. Management said enterprise revenues returned to positive sequential growth on a same-day, constant-currency basis for the first time in more than three years, and early January trends continued the momentum.

Fourth-quarter results and cash flow

For the fourth quarter of 2025, Robert Half reported global enterprise revenues of $1.302 billion, down 6% year over year on a reported basis and down 7% on an adjusted basis. Net income per share was $0.32, compared with $0.53 in the year-ago quarter.

Keith Waddell, president and CEO, said the company’s revenue and earnings exceeded the midpoint of prior fourth-quarter guidance and described the company as “very well positioned” to support clients’ talent and consulting needs.

Cash flow from operations totaled $183 million, which management called the highest quarterly level of 2025 and an 18% increase over the prior year’s fourth quarter. The company paid a $0.59 per share dividend in December, representing a $59 million cash outlay. Return on invested capital was 10% in the quarter.

Segment performance: Talent Solutions and Protiviti

CFO Michael Buckley said Talent Solutions revenue declines continued on a year-over-year basis, though sequential trends improved. On an adjusted basis, fourth-quarter Talent Solutions revenues fell 9% year over year. U.S. Talent Solutions revenues were $623 million (down 9%) and non-U.S. Talent Solutions revenues were $200 million (down 8%). The company operated Talent Solutions offices in the U.S. and 18 other countries.

Buckley also noted contract Talent Solutions bill rates increased 3.2% versus a year ago (adjusted for mix, currency, and geography), compared with 3.7% growth in the third quarter.

Protiviti posted fourth-quarter global revenues of $479 million, including $373 million in the U.S. and $106 million internationally. On an adjusted basis, Protiviti revenues declined 3% year over year, with U.S. revenues down 6% and non-U.S. revenues up 9%. Waddell said Protiviti’s year-over-year growth rate improved but remained affected by tougher comparisons from large projects, longer sales cycles, and smaller new engagements. He described Protiviti’s pipeline as strong across major solution areas and said technology consulting was “very strong” and leading demand, with platform modernization cited as a key driver.

Margins, costs, and staffing levels

In contract Talent Solutions, gross margin was 39.2% of applicable revenues, slightly above 39.1% a year earlier. Conversion (contract-to-hire) revenues were 3.2% of contract revenues, unchanged year over year. Permanent placement revenues were 12.5% of consolidated Talent Solutions revenues, up from 12.1% in the prior-year quarter. Overall Talent Solutions gross margin was 46.7% of applicable revenues, compared with 46.4% a year earlier.

Protiviti gross margin declined to 21.9% (24.9% a year earlier), and adjusted gross margin was 22.8% versus 25.1% last year. Buckley said the company ended 2025 with 11,200 full-time Protiviti employees and contractors, up 1.5% from the prior year.

Enterprise SG&A rose to 35.9% of global revenues (34.1% a year ago), while adjusted enterprise SG&A was 34.6% versus 33.8%. Talent Solutions SG&A was 47.6% of Talent Solutions revenues versus 44.4% in the year-ago quarter. Buckley also cited adjusted Talent Solutions SG&A of 55.6%, compared with 43.9% last year. The company ended 2025 with 7,400 full-time internal Talent Solutions employees, down 3.2% from the prior year.

Operating income for the quarter was $22 million. Adjusted operating income was $43 million, or 3.3% of revenues. Adjusted operating income was $9 million in Talent Solutions (1.1% of revenues) and $34 million in Protiviti (17.1% of revenues).

Management also highlighted a $21 million gain from investments held in employee deferred compensation trusts, which was fully offset by higher deferred compensation costs and had no effect on reported net income.

Guidance and seasonal factors

For the first quarter of 2026, Robert Half guided revenue to $1.26 billion to $1.36 billion and earnings per share to $0.08 to $0.18. At the midpoint, Buckley said revenue would be 5% lower than the first quarter of 2025 on an adjusted basis, while still reflecting continued positive adjusted sequential revenue growth for Talent Solutions.

Buckley said the midpoint adjusted operating margin guidance declined sequentially by one percentage point, consistent with long-term historical trends, including Protiviti’s typical seasonal decline in the first quarter. He attributed Protiviti’s seasonal margin decline to reduced internal audit activity as clients focus on annual financial statements and external audits, as well as annual compensation increases that are recovered through pricing as contracts are negotiated.

The company expects an unusually high first-quarter tax rate of 56% to 58%, driven by stock compensation tax effects and the magnified impact of non-deductible items against seasonally low pre-tax income. Buckley said the remainder of 2026 is expected to normalize to a 33% to 35% tax rate.

Management commentary: demand signals, AI, and capital allocation

Waddell described a macro environment he sees as more supportive, pointing to progress in rate cuts, easing inflation, less regulation, and more clarity on trade policy. He said the NFIB Small Business Optimism Index has trended higher, while the uncertainty index fell to its lowest level since June 2024. He also emphasized that job openings remain above historical averages, suggesting pent-up demand for skilled professionals.

On a longer-term revenue outlook, Waddell said that based on the company’s sequential trend line, Robert Half would return to positive year-over-year revenue growth in the third quarter if current trends continue. He said weekly results were “very encouraging,” and noted the company monitors a range of external indicators, including ASA, SIA, NFIB, and PMIs, though he said no single measure has a high correlation on its own.

Executives also addressed AI’s impact, saying they have seen “negligible” direct impact so far on their areas of employment, particularly among small businesses. However, Waddell said AI is increasing the complexity of hiring as job seekers use generative AI to tailor resumes, making it harder for clients to authenticate qualifications—an environment he said reinforces the value of Robert Half’s vetting and proprietary data on candidate performance.

On capital allocation, management said fourth-quarter free cash flow performance supported the dividend, and Waddell said the company’s 2025 free cash flow covered the dividend while also enabling stock repurchases funded partly from the balance sheet. Buckley added the company benefited from a $20 million tax-related item tied to expensing costs that would otherwise be capitalized, while also citing strong working capital management.

About Robert Half NYSE: RHI

Robert Half International Inc, founded in 1948 by Robert Half, is a global professional staffing and consulting firm headquartered in Menlo Park, California. As a pioneer in specialized staffing, the company has built a reputation for matching skilled professionals with leading organizations across a range of industries. Robert Half's shares trade on the New York Stock Exchange under the ticker RHI, reflecting its position as one of the longest‐standing and best‐known firms in the staffing sector.

The company offers a comprehensive suite of services, including temporary staffing, permanent placement, and consulting solutions.

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