What Robert Walters (RWA) Said on Its Q3 Earnings Call

Key Points

• Group net fees returned to growth: Third-quarter net fees rose 1% year over year in constant currency, helped by a 14% increase in the U.K. and continued expansion in recruitment outsourcing, which grew 19%.
• Productivity and costs improved: Net fee income per fee earner increased 8%, while the monthly operating cost run rate fell to approximately £22 million. Net cash was about £13 million, supported by £20 million in additional financing facilities.
• Outlook remains cautious but stable: Performance was mixed across regions, with strong growth in the Americas, Japan, New Zealand and Spain offset by declines in parts of Europe, Australia and the Middle East. Management expects volatility and employer caution to persist but forecasts its 2026 financial result to be at least in line with market expectations.

Robert Walters LON: RWA reported a return to year-on-year net fee growth in the third quarter, supported by improved productivity, growth in its U.K. business and continued expansion in recruitment outsourcing.

Group net fees rose 1% year-on-year in constant currency during the quarter, representing a sequential improvement from the first half of 2026. Interim Chief Financial Officer Jonathan Solesbury said more than half of the company’s specialist recruitment portfolio returned to growth, while recruitment outsourcing delivered its third consecutive quarter of year-on-year growth.

Chief Executive Officer Toby Fowlston said the result reflected the company’s efforts to bring greater focus and commercial discipline to its operations while maintaining its entrepreneurial culture. He said the group has improved its visibility into performance at market, office and desk level, strengthened leadership in key businesses and placed greater emphasis on client and candidate relationships.

Productivity Rises as Costs Continue to Fall

Net fee income per fee earner, Robert Walters’ measure of overall productivity, increased 8% year-on-year in the third quarter. Permanent placements per permanent fee earner per month were 0.89, and the company said it remains focused on further improving placement volumes.

Fee-earner headcount was broadly stable compared with the prior quarter. Solesbury said the existing overall level of fee-earner staffing was “about right” for current market conditions, although the group remains prepared to adjust resources market by market.

The company also reported further cost progress, with its underlying monthly operating cost run rate at approximately £22 million in the third quarter. Period-end net cash stood at around £13 million. During the period, Robert Walters secured an additional £20 million in financing facilities, with about half obtained in international markets.

During the question-and-answer session, Solesbury said wage inflation across the group’s markets generally runs at about 2% to 3% annually. Based on the reported 8% productivity increase, he indicated that the company saw an underlying productivity gain of roughly 5% to 6% after wage inflation.

U.K. and Americas Offset Weakness in Several Markets

Specialist recruitment performance varied considerably across regions. Asia Pacific net fees were flat year-on-year, with Japan, New Zealand and parts of Greater China producing better results than Australia and Mainland China.

• Japan: Net fees increased 5%, marking a third consecutive quarter of growth. Temporary recruitment was particularly strong, while permanent recruitment also grew.
• New Zealand: Net fees rose 13%, driven by strong temporary recruitment volumes.
• Australia: Net fees declined 8%, as weakness in permanent recruitment outweighed stronger temporary performance.
• Greater China: Net fees fell 5%. Growth in Hong Kong and Taiwan was offset by Mainland China.

Fowlston said Japan remains a key market and that the company has focused on improving productivity from its existing workforce rather than expanding headcount. He said net fee income per fee earner and trading contribution per fee earner had risen significantly in the country. He added that both permanent and temporary recruitment were growing, although temporary hiring had been the larger contributor.

In Europe, specialist recruitment net fees declined 5%. France was down 8%, though its interim recruitment operations drove a modest sequential improvement. The Netherlands declined 9%, with permanent recruitment proving comparatively resilient. Spain was the region’s strongest market, with net fees up 10%, while Belgium declined 21% as the company continued actions intended to improve performance.

The U.K. was a notable contributor to the group’s third-quarter improvement, with net fees increasing 14%. Fowlston said the performance followed changes to the business’s leadership, office footprint and focus on sectors and disciplines where the company believes it can compete effectively.

He said the improvement had occurred despite a challenging U.K. hiring market and was not the result of a “sudden influx of new jobs.” Instead, he attributed the result to better conversion of the opportunities available.

Fowlston also pointed to the group’s total talent solutions offering in the U.K., including specialist recruitment, outsourcing and consultancy. He said the company is positioned to serve both small and medium-sized companies and larger enterprise clients, which face different staffing needs.

Elsewhere, the rest-of-world segment reported a 13% decline in net fees, including the impact of offices closed in the previous year. The Americas, comprising the U.S., Mexico and Chile, posted net fee growth of 29%. The Middle East declined 39% as ongoing conflict continued to affect the region.

Outsourcing Expands, but Management Remains Cautious

Recruitment outsourcing net fees increased 19% year-on-year. Fowlston said the company’s consultancy offering continued to grow strongly, while its combined recruitment process outsourcing and managed service provider operations also advanced year-on-year.

Management said fee rates have remained stable, although Fowlston indicated that the company sees an opportunity to pursue additional value through pricing. He said the primary market challenge was not job flow, but candidate movement and ongoing skills shortages, alongside continued caution among employers and workers.

Fowlston said Spain and New Zealand were among the other markets where productivity improvement was becoming evident. Looking ahead, he said Robert Walters wants growth in profit to exceed growth in net fees, which in turn should exceed growth in headcount.

The company expects market conditions to remain mixed and said volatility and caution are likely to continue into the fourth quarter. Still, Fowlston said the group has “developing momentum,” particularly from its cost actions, and expects its 2026 financial result to be at least in line with current market expectations.

About Robert Walters (LON:RWA)

Established in 1985, Robert Walters is a global talent solutions business operating in 31 countries across the globe. We support organisations to build high-performing teams, and help professionals to grow meaningful careers. Our client base ranges from the world's leading blue-chip corporates through to SMEs and start-ups. We deliver three core services: • Specialist recruitment - encompassing permanent and temporary recruitment, executive search and interim management. • Recruitment outsourcing - enabling organisations to transfer all, or part of, their recruitment needs to us either through recruitment process outsourcing (RPO) or contingent workforce solutions (CWS). • Talent Advisory - supporting the growth of organisations through market intelligence, talent development, and future of work consultancy. Our employees are passionate about powering people and organisations to fulfil their unique potential.

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