Business Segments | Note P—Business Segments The Company has three reportable segments: contract talent solutions, permanent placement talent solutions and Protiviti. Operating segments are defined as components of the Company for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), a position currently held by the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. The contract talent solutions reportable segment results from the aggregation of three operating segments with similar economic and qualitative characteristics: finance and accounting, administration and customer support and technology. The contract talent solutions and permanent placement talent solutions segments provide specialized engagement professionals and full-time personnel, respectively, for finance and accounting, technology, marketing and creative, legal, administrative and customer support roles. The Protiviti segment provides business and technology risk consulting and internal audit services. The CODM uses segment income to evaluate performance and allocate resources to each segment. Segment income excludes interest income, intangible assets amortization expense, income taxes and the impacts of deferred compensation (income) expense. The CODM considers variances between actual results and expectations as well as historical trends for segment income when making decisions about allocating capital and personnel resources to each segment. The accounting policies of the segments are set forth in Note A— “ Summary of Significant Accounting Policies. ” The following tables provide a reconciliation of service revenues and segment income by reportable segment to consolidated results (in thousands): Year Ended December 31, Contract Talent Solutions 2024 2023 2022 Service revenues (1) $ 3,357,872 $ 3,895,332 $ 4,532,847 Segment costs of services (2) 2,041,348 2,346,020 2,728,818 Compensation expenses (3) 884,121 934,024 973,341 Other (4) 301,885 322,473 338,407 Segment selling, general and administrative expenses 1,186,006 1,256,497 1,311,748 Segment income $ 130,518 $ 292,815 $ 492,281 Year Ended December 31, Permanent Placement Talent Solutions 2024 2023 2022 Service revenues (1) $ 487,204 $ 567,486 $ 725,155 Segment costs of services (2) 985 1,105 1,449 Compensation expenses (3) 359,205 405,747 506,006 Other (4) 80,962 85,630 90,078 Segment selling, general and administrative expenses 440,167 491,377 596,084 Segment income $ 46,052 $ 75,004 $ 127,622 Year Ended December 31, Protiviti 2024 2023 2022 Service revenues (1) $ 1,950,761 $ 1,929,699 $ 1,980,140 Segment costs of services (2) 1,487,511 1,454,127 1,427,675 Compensation expenses (3) 93,296 88,337 82,314 Other (4) 209,754 199,561 199,440 Segment selling, general and administrative expenses 303,050 287,898 281,754 Segment income $ 160,200 $ 187,674 $ 270,711 Year Ended December 31, Combined Segment 2024 2023 2022 Service revenues (1) $ 5,795,837 $ 6,392,517 $ 7,238,142 Costs of services (2) 3,529,844 3,801,252 4,157,942 Compensation expenses (3) 1,336,622 1,428,108 1,561,661 Other (4) 592,601 607,664 627,925 Selling, general and administrative expenses 1,929,223 2,035,772 2,189,586 Combined segment income 336,770 555,493 890,614 Amortization of intangible assets 1,217 2,883 1,667 Interest income, net (22,118) (23,973) (8,008) Income before income taxes $ 357,671 $ 576,583 $ 896,955 (1) Service revenues presented above are shown net of eliminations of intersegment revenues. Intersegment revenues between the contract talent solutions segment and the Protiviti segment were $471.8 million, $442.3 million and $552.2 million for the years ended December 31, 2024, 2023, and 2022, respectively. Service revenues related to the intersegment activity are reflected in the Protiviti segment. (2) Segment costs of services consist of direct payroll, payroll taxes and benefit costs, as well as reimbursable expenses. Direct costs related to the intersegment activity are reflected in the Protiviti segment, including the costs of candidate payroll, fringe benefits and incremental recruiter compensation. For further information on costs of services, see Note A—“Summary of Significant Accounting Policies.” (3) Includes payroll and applicable taxes, employee incentive compensation and other employee costs not included in direct cost as noted above. (4) Other selling, general and administrative expenses is comprised of advertising, as well as other allocated expenses including lease expense, depreciation, cloud computing service costs and overhead costs. These costs are allocated to the individual segments based on an internal allocation method. The Company operates internationally, with operations in North America, South America, Europe, Asia, and Australia. Revenues have been attributed to geographic location based on the location of the legal entity generating revenues. The following table represents service revenues by geographic location (in thousands): Year Ended December 31, 2024 2023 2022 Service revenues (a) U.S. $ 4,519,506 $ 4,957,163 $ 5,712,330 International (b) 1,276,331 1,435,354 1,525,812 $ 5,795,837 $ 6,392,517 $ 7,238,142 (a) No customer accounted for more than 10% of the Company’s total service revenues in any year presented. (b) No country represented more than 10% of revenues in any year presented. Assets by reportable segment are not presented, as the Company does not allocate assets to its reportable segments, nor is such information used by the CODM for purposes of assessing performance or allocating resources. The following table represents long-lived assets, net, which includes property, plant and equipment, net, right-of-use assets and noncurrent deferred income taxes, by geographic location (in thousands): December 31, 2024 2023 Long-lived assets, net U.S. $ 375,936 $ 368,745 International 100,132 89,455 $ 476,068 $ 458,200 The following table represents depreciation expense by segment (in thousands): Year Ended December 31, 2024 2023 2022 Depreciation expense Contract talent solutions $ 26,230 $ 25,803 $ 24,145 Permanent placement talent solutions 8,533 8,786 8,630 Protiviti 17,290 16,775 14,623 $ 52,053 $ 51,364 $ 47,398 |