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The call reflects a balanced tone: Q1 results showed continued year-over-year revenue declines and an elevated Q1 tax impact that pressured EPS, and Protiviti faced U.S. regulatory headwinds. Offsetting these negatives, management highlighted sequential improvement in talent solutions revenue trends into April, stable or improving adjusted margins and SG&A, pricing gains, strong tech consulting and non-U.S. Protiviti growth, proactive cost actions ($30M annual savings) and guidance that implies a return to year-over-year growth and double-digit EPS improvement in Q3. Given the meaningful operational actions, improving trends, and clear near-term targets for recovery, but also material present weaknesses, the positives and negatives are roughly balanced.
For Q2 the company guided revenue of $1.275B–$1.375B (midpoint $1.325B, -4% y/y adjusted) and GAAP EPS of $0.20–$0.30 (ex‑$0.03 onetime severance: $0.23–$0.33); the midpoint assumes talent solutions adjusted revenue flat to -4%, Protiviti -4% to -8% and consolidated adjusted revenue -1% to -5%, and reflects a $5M Q2 severance charge (~$0.03/share) tied to cost actions that will reduce annual costs by $30M and be fully implemented by Q3. Key model assumptions: contract talent gross margin 38%–40%, Protiviti gross margin 19%–21%, consolidated gross margin 36%–39%; adjusted SG&A as % of revenue — talent 43%–45%, Protiviti 16%–18%, consolidated 34%–36%; adjusted operating income margins — talent 2%–4%, Protiviti 2%–4%, consolidated 2%–4%; tax rate 34%–36%; diluted shares 100–101M; 2026 capex + capitalized cloud $70M–$90M with Q2 spend $15M–$25M. For Q3 management expects talent solutions y/y growth of 1%–3%, Protiviti sequential revenue +0%–3% and Protiviti adjusted segment margins of 7%–9%, driving Q3 consolidated net income and EPS growth of ~8%–12% y/y.
Talent solutions delivered a second consecutive quarter of positive sequential growth on a same-day constant-currency basis, with contract revenues improving from a -7% quarter decline to -5% in March and only -1% in the first two weeks of April (all adjusted for currency and billing days). Management noted strengthening trends into April and early Q2.
Company guided Q2 revenues of $1.275B–$1.375B (midpoint $1.325B, -4% adjusted YoY) and EPS $0.20–$0.30 (ex. $0.03 one-time severance: $0.23–$0.33). Management expects Q3 year-over-year adjusted revenue growth of 1%–3% for talent solutions and consolidated Q3 EPS growth of 8%–12% YoY, indicating a return to positive growth in Q3 for the first time since 2022.
Global Protiviti revenues were $466M (US $362M; non-US $104M). On an adjusted basis Protiviti was down 4% YoY, but non-U.S. Protiviti revenues were up 8% YoY. Management identified tech consulting as the largest and strongest area (~1/3 of Protiviti revenues) with strong pipeline across tech modernization, data and cyber.
Contract talent gross margin remained stable at 38.9% of applicable revenues YoY; combined talent solutions gross margin was 46.8% vs 46.7% a year ago. Protiviti adjusted gross margin improved to 18.8% from 18.1% YoY. Adjusted enterprise SG&A improved to 34.6% of revenues from 35.2% a year ago; Protiviti SG&A improved to 15.9% from 16.3%.
Contract talent solutions bill rates increased 2.6% YoY on an adjusted basis (compared with 3.2% in Q4), indicating pricing power in contract placements.
Protiviti announced cost actions to reduce annual costs by $30M, with a one-time Q2 charge of $5M ($0.03 per share). Management expects the actions to be fully implemented by the start of Q3 and projects these savings materially improve future EPS (company noted a pro forma Q2 midpoint EPS of $0.33 if savings were already in place).
Management reported that AI-driven matching and intelligent pipeline tools have improved candidate-job match quality, reduced required outreach, and improved conversion metrics — reinforcing competitive differentiation versus job boards focused on clicks.
Company paid a $0.59 per share cash dividend in March (total cash outlay $62M) and received external recognition (Fortune Most Innovative Companies, Fortune 100 Best Companies to Work For, Forbes Best Employers for company culture), supporting brand and employee morale.
Hello, and welcome to the Robert Half First Quarter 2026 Conference Call. Today's conference call is being recorded. [Operator Instructions] Our hosts for today's call are Mr. Keith Waddell, President and Chief Executive Officer of Robert Half; and Mr. Michael Buckley, Chief Financial Officer. Mr. Waddell, you may begin.
Hello, everyone. We appreciate your time today. Before we get started, I'd like to remind you that the comments made on today's call contain forward-looking statements, including predictions and estimates about our future performance. These statements represent our current judgment of what the future holds. However, they are subject to the risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties are described in today's press release and our most recent 10-K and 10-Q filed with the SEC. We assume no obligation to update the statements made on today's call. During this presentation, we may refer to certain non-GAAP financial measures as adjusted.
Adjusted revenue growth excludes the impact of billing day variations and foreign currency exchange rates. Adjusted gross margin, SG&A and operating income reflect the combining of investment gains and losses related to employee deferred compensation plans with corresponding changes in those obligations. These items have no impact on reported net income. Reconciliations and additional information are included in the supplemental schedules to our earnings release. For your convenience, our prepared remarks for today's call are avai...