RHI — Robert Half Inc.

Robert Half Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Global Enterprise Revenues: $1.336 billion, down 2% year-over-year on a reported basis and down 3% on an adjusted basis.
• Net Income per Share: $0.26, compared to $0.41 in Q2 2025.
• Cash Flow from Operations: $109 million.
• Dividend: $0.59 per share, totaling $59 million.
• Return on Invested Capital: 9%.
• Adjusted Operating Income: Positive $39 million (2.9% of revenues), with Talent Solutions at $29 million (3.3% of revenues) and Protiviti at $10 million (2.1% of revenues).
• Gross Margin: Talent Solutions at 47.4%, Protiviti at 18.5% (adjusted).
• Days Sales Outstanding (DSO): 55.4 days.

2. Strategic Updates and Business Highlights

• Talent Solutions: Achieved third consecutive quarter of sequential revenue growth; permanent placement revenue grew by 2.5% year-over-year.
• Market Demand: Hiring demand is improving, particularly in technology sectors, with increased client engagement and project activity.
• Protiviti: Experienced a decline in revenues due to shifts in the U.S. financial services regulatory environment, but demand for technology consulting remains strong.
• Investment in Capabilities: Protiviti is aligning resources with client demand, resulting in a one-time charge of $7 million but expected annualized savings of $45 million.

3. Forward Guidance and Outlook

• Q3 2026 Guidance: Revenues expected between $1.31 billion and $1.41 billion, with EPS guidance of $0.43 to $0.53.
• Talent Solutions: Anticipated year-over-year revenue growth of 3% in Q3; Protiviti expected to see a decline of 6%.
• Long-term Outlook: Management remains optimistic about returning to growth in both Talent Solutions and Protiviti, with expectations of mid-single-digit revenue growth in a normalized environment.

4. Bad News, Challenges, or Points of Concern

• Declining Revenue: Protiviti's revenues down 5% year-over-year, with U.S. revenues down 6%.
• Increased SG&A Costs: Enterprise SG&A costs rose to 40.1% of global revenues, up from 37.1% year-over-year.
• Regulatory Environment: Ongoing shifts in the U.S. financial services sector are impacting Protiviti's performance, with fewer enforcement actions leading to a decline in demand for risk and compliance solutions.
• Economic Uncertainties: Inflation and geopolitical tensions, particularly in the Middle East, remain concerns for client spending and hiring.

5. Notable Q&A Insights

• Protiviti's Growth Confidence: Management expressed confidence in Protiviti's ability to return to growth, citing a strong pipeline and demand for technology consulting.
• Talent Solutions Recovery: Three consecutive quarters of sequential growth suggest a potential bottoming out in the staffing cycle, with expectations of returning to prior peak revenues.
• Wage Inflation Impact: Underlying wage inflation has decreased, which may affect future bill rates; however, if inflation rises, bill rates are expected to follow suit.
• Public Sector Opportunities: Protiviti is seeing good opportunities in the public sector, particularly in federal and state engagements.
• Cost Actions: The company has taken decisive cost actions to align resources with demand, resulting in significant savings expected to positively impact margins moving forward.

Overall, while Robert Half faces challenges, particularly in its Protiviti segment, there are positive signs in Talent Solutions and a strategic focus on aligning resources with market demand suggests a cautious optimism for future growth.