Robert Half International Inc. (RHI) Earnings

Management highlights

Keith noted talent solutions had second consecutive quarter of positive sequential growth on same-day constant currency basis, with activity levels improving from February disruption, client engagement and job orders increasing, especially in tech modernization, etc. Labor market indicators show underlying demand for skilled talent, unemployment low, job openings above historical averages. AI has limited impact on employment levels in supported roles, reshaping work and increasing need for skilled pros with domain and AI skills. Productivity's segment results impacted by Q1 seasonal trends, internal audit revenues down, staff comp costs up. Navigating shifts in risk and compliance solutions practice due to US financial services regulatory environment changes, client demand focused on enhancing compliance program efficiency, taking cost actions to reduce annual costs by $30 million with $5 million Q2 one-time charge.

Guidance

Second quarter revenue $1.275 billion to $1.375 billion, income per share $0.20 to $0.30, excluding $0.03 one-time severance charge $0.23 to $0.33. Midpoint revenue $1.325 billion, adjusted y/y down 4%. Q2 talent solutions continues positive adjusted sequential growth. Productivity affected by US financial services regulatory environment shifts, planned cost actions result in Q2 midpoint adjusted gross margin guidance impacted by $5 million severance costs ($0.03 per share). Expected fully completed by beginning of third quarter. Third quarter talent solutions typically flat sequentially due to summer holidays, but current trends result in y/y adjusted revenue growth 1%-3%. Productivity Q3 revenues typically increase sequentially tied to internal audit work, expect 0%-3% sequential revenue gains, adjusted segment margins 7%-9%, both talent solutions and productivity deliver positive y/y segment income growth in Q3, driving consolidated net income and EPS growth 8%-12% y/y.

Segment performance

Global enterprise revenues were $1.3 billion in the first quarter of 2026, down 4% on a reported basis and 6% on an adjusted basis from last year's first quarter. Talent Solutions delivered second consecutive quarter of positive sequential growth on a same-day constant currency basis. Global productivity revenues in the first quarter were $466 million, $362 million from US and $104 million from outside US. Adjusted global first quarter productivity revenues were down 4% year over year, US productivity revenues down 6% while non-US up 8%. Talent Solutions adjusted first quarter revenues down 7% year over year. US talent solutions revenues $626 million, down 7% y/y. Non-US talent solutions revenues $208 million, down 3% y/y. Contract talent solutions bill rates up 2.6% y/y in first quarter. Permanent placement revenues in current quarter 13.1% of consolidated talent solutions revenues vs 12.8% in first quarter 2025. Talent solutions overall gross margin 46.8% of applicable revenues in current quarter vs 46.7% in first quarter 2025. Productivity gross margin 19.2% of productivity revenues in first quarter vs 18.9% in first quarter 2025. Adjusted productivity gross margin 18.8% for quarter just ended vs 18.1% last year.

Risks & headwinds

Comments contain forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. Risks described in today's press release and most recent 10-K and 10-Q filed with SEC, including market conditions change, AI impact on employment uncertainty, financial services regulatory environment change impact on productivity, economic uncertainty like Middle East conflict and energy costs impact on client demand, candidate behavior change, resume homogenization increasing screening difficulty.

Analyst Q&A

• Q: Trevor Romeo with William Blair asked about Q3 talent solutions revenue growth and productivity risk compliance recovery.

  A: Keith said talent solutions current run rate stronger than Q2 guidance, risk compliance not assumed short-term snapback.

• Q: Mark Marcon with Baird asked about SMB clients in talent solutions and productivity cost actions.

  A: Keith said SMB clients PERM and contract strong, productivity cost actions mainly related to risk compliance.

• Q: Andrew Steinerman with JP Morgan asked about Robert Half recovery shape and productivity cost actions impact.

  A: Keith said confident in recovery, productivity Q2 pro forma EPS midpoint 33 cents if cost savings and severance considered.

• Q: Jeff Silber with BMO Capital Markets asked about talent solutions headcount and productivity lines trend.

  A: Keith said talent solutions still 15%-30% capacity, productivity tech consulting largest with bright prospects.

• Q: George Tong with Goldman Sachs asked about PERM and contract performance difference and 3Q lines growth.

  A: Keith said PERM short-term volatile, not predictive, 3Q tech etc. lines expected positive growth.

• Q: Kartik Mehta with North Coast Research asked about decision timelines and SMB client impact on margin.

  A: Keith said decision timelines 20%-30% longer, SMBs lag, mid-cap margins not dramatically different.

• Q: Stephanie Moore with Jefferies asked about AI investment benefits and job elimination.

  A: Keith said AI investment improved matching quality, job elimination is augmentation not displacement.

• Q: Toby Summer with Truist asked about regulatory environment duration and productivity margin guidance.

  A: Keith said regulatory environment may last or change with event, productivity margin guidance adjusted due to headwinds.

• Q: Kevin McVey with UBS asked about restructuring impact on Q3.

  A: Keith said Q2 pro forma EPS midpoint 33 cents if cost savings and severance considered, Q3 no severance, has cost savings impact.