RHI — Robert Half International Inc.

Summary of Robert Half Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Global Revenues: $1.3 billion, down 4% year-over-year on a reported basis and down 6% on an adjusted basis.
• Net Income per Share: $0.14, compared to $0.17 in Q1 2025. The elevated tax rate of 56% was primarily due to stock-based compensation.
• Cash Flow: $112 million used in operations, typical for Q1 due to seasonal bonus payments and SaaS renewals.
• Dividend: $0.59 per share distributed, totaling $62 million.
• Return on Invested Capital: 4%.
• Adjusted Operating Income: $29 million (2.2% of revenues), with talent solutions at $16 million (1.8% of revenues) and Protiviti at $13 million (2.9% of revenues).

2. Strategic Updates and Business Highlights

• Talent Solutions: Experienced sequential growth for two consecutive quarters, with a focus on technology modernization and IT infrastructure. Demand for skilled talent remains strong, particularly among small and midsized businesses (SMBs).
• Protiviti: Global revenues of $466 million, with a focus on efficiency-oriented solutions amid shifts in the U.S. financial services regulatory environment. Non-U.S. revenues grew by 8%.
• AI Investments: The company continues to leverage AI to enhance candidate matching and improve operational efficiencies, emphasizing that AI is augmenting rather than displacing jobs.

3. Forward Guidance and Outlook

• Q2 2026 Guidance: Expected revenues between $1.275 billion and $1.375 billion, with EPS guidance of $0.20 to $0.30 (excluding a $0.03 severance charge).
• Q3 Expectations: Anticipated year-over-year revenue growth of 1% to 3% for talent solutions and 0% to 3% for Protiviti, driven by seasonal trends and improved operational efficiencies.
• Cost Actions: Planned cost reductions of $30 million, with a one-time charge of $5 million in Q2, expected to enhance margins in Q3.

4. Bad News, Challenges, or Points of Concern

• Revenue Declines: Both talent solutions and Protiviti reported year-over-year revenue declines, with Protiviti facing regulatory headwinds impacting demand.
• Elevated Tax Rate: The first quarter's high tax rate is expected to normalize but impacted net income.
• Market Uncertainties: Economic uncertainties, particularly related to geopolitical tensions and energy costs, could affect client demand.
• Decision Timelines: Extended decision-making timelines among clients, estimated to be 20-30% longer than historical norms, may hinder immediate growth.

5. Notable Q&A Insights

• Revenue Recovery: Management expressed optimism about the recovery shape, citing pent-up demand and low unemployment as key drivers.
• Talent Solutions vs. Protiviti: There is a notable divergence in performance, with Protiviti facing more significant regulatory challenges compared to talent solutions.
• AI Impact: Management believes AI will enhance the value of skilled professionals rather than displace them, emphasizing the need for domain expertise.
• Cost Actions: The restructuring primarily affects Protiviti's risk and compliance area, with expectations of improved margins in Q3 due to these actions.

Overall, Robert Half's Q1 2026 results reflect challenges in revenue growth and regulatory pressures, but the company is strategically positioned to leverage emerging opportunities, particularly in technology and talent solutions, while implementing cost-saving measures to enhance profitability moving forward.