Earnings call transcript Q4 2022

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Operator

Hello, and welcome to the Robert Half Fourth Quarter 2022 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. begin. may you Waddell,

Keith Waddell

everyone. your Hello, today. We you. time appreciate Thank

and remind I'd the contain Before of future what predictions current started, holds. represent to These forward-looking about you statements performance. including the call we get judgment today's like that our our on comments statements future estimates made

press differ most the uncertainties forward-looking the statements. made XX-K risks and However, to uncertainties filed SEC. could from risks they with are our cause today's on obligation We materially that described release, in and XX-Q assume today's are call. and statements recent to subject actual in results to the the update These no

these presentation, figures in a measures and may we press non-GAAP some supplemental reference schedule this to as financial today. and these Reconciliations our measures of are During adjusted. release included mention explanations further

Our each revenues we and revenues in manage for businesses talent company's related of includes internally. measure these growth services blended our connection provided presentation rates intersegment and is how specializations Protiviti operations. This to the from functional of and the with consulting contract solutions

of XXXX. amount disclosed. schedule mentioned its is revenue also XXXX include combined supplemental schedules The revenues just with The also for information showing a intersegment through Protiviti separately

For in of call our our remarks website, are your convenience, the for today's roberthalf.com. prepared available Investor Center

achieved and very levels year record revenues both a per earnings Half XX% new full-year across successful grew share and was more enterprise. XXXX the entire for We Robert by each. than

ability uncertain environment enter tight XXXX markets and world. of prior We in the about around growth placements the Protiviti our very the All and reached all-time areas, practice above and to highs global over our major labor permanent the contracts, year. the macroeconomic navigate optimistic strong

per quarter quarter the compared a quarter basis, income $X.XXX a of company-wide as-adjusted For for on $X.XX up last from down billion, in the fourth year's to the ago. basis. was but X% Net reported $X.XX fourth share an fourth quarter were on X% revenues year fourth XXXX,

from share operations of the was during total of $XXX $X.XX December, $XX quarter dividend per million. our cash a flow shareholders In a outlay for Cash to cash million. we distributed record

dividend in XX.X% share inception December its since was than higher XXXX the per has XX.X% dividend XXXX. in Our grown annually XXXX,

Robert acquired also the during XXX,XXX approximately $XX Half quarter shares We for million.

X.X available have our quarter. shares board-approved XX% in repurchase the under was invested We Return stock capital million on repurchase for company fourth the plan. for

Now I'll over turn our call CFO, the Buckley. Mike to

Michael Buckley

Thank you, Keith. Hello, everyone.

$X.XXX solutions X% basis, X% on talent billion As an $XXX talent X% were revenues fourth revenues talent as-adjusted were prior an as-adjusted quarter in quarter. year. Keith $XXX year-over-year. fourth U.S. million, were noted, solutions down Non-U.S. year-over-year million, were up revenues global On the down revenues the basis. solutions from

talent States. solutions outside in locations including XX worldwide, the XXX have countries XX We United of locations

days were XX.X quarter, billing XX.X fourth In days there the the compared same year billing in quarter one to ago.

days The for and XXXX first compared of XX.X quarter the a be to of total XX.X of remaining has Billing the will billing billing XXXX year. first XX.X XX.X, for three during quarters during days days XX.X XXXX. quarter XXX.X the days of billing

percentage overall the decreasing for million Currency and exchange This by of $XX quarter quarter This X.X impacted year reported for rate and Protiviti. Protiviti. mix one points, million, for fourth negatively revenues functional of country. compared for talent Contract increased for points to ago, was solutions $XX for movements bill X.X in talent currency and solutions X.X the had revenues our specialization, adjusted rate $XX the for during talent changes X.X% third solutions quarter X%. the by growth million the effect year-over-year by percentage rates year-over-year percentage points revenue

United of ago basis. Protiviti of quarter an U.S. that the States with look revenues United in up and were fourth million, and global within the both outside the X% year States. revenues versus results on fourth quarter is by basis, $XXX period, as-adjusted Global X% from closer were a On as-adjusted non-U.S. $XXX the an Protiviti's million up at take $XX Protiviti. from million operations let's business Now for is

and its clients Company-wide locations owned Full-year network Protiviti and by serve of quarter countries. independently sector through member were fourth a million was XX $XX reported million, in Protiviti firms XX of public $XX revenues the sector which talent rates down X% revenues were by exchange decreasing by public during adjusted solutions. of the Currency year-over-year $X currency. for revenues reported X% approximately had or quarter. effect the public million approximately balance sector

XX.X% fourth talent quarter revenues or was of now gross ago. fourth one applicable the in solutions, contract to quarter quarter. gross were Turning of X.X% contract compared Conversion hire of year to margin. revenues margin XX.X% applicable revenues to In the in revenues

overall compared permanent XX.X% placement talent in margins same solutions XX.X% of gross solutions applicable quarter quarter were revenues the one consolidated revenues ago. in quarter revenues XX.X% Our year of fourth were talent When versus to consolidated solutions margin, revenues year solutions talent the the in with talent combined contract gross fourth XX.X% of one ago.

Protiviti Adjusted related was classification gross margin impacts, one revenues Protiviti deferred XX.X% revenues for Protiviti for ended compared to gross XX.X% of year the compared ago. one XX% just compensation XX.X% of to Protiviti, quarter was For margin for year ago.

deferred quarter XX.X% quarter XX.X% in were solutions the Adjusted same SG&A year global in XX.X% XX.X% revenues compared XX.X% XXXX. Moving compared costs in in just ago. solutions the quarter ago. fourth costs classification SG&A on enterprise of quarter fourth revenues quarter year one were Enterprise to the the costs one versus fourth to Talent to talent for of SG&A ended of compensation-related XX.X% impacts, SG&A. in the were

X.X with talent ratio. percentage year. SG&A employees XXXX full-time costs this deferred Adjusted mix to prior X% to compared higher just impacts, points ended ago one ago. up from the had the solutions XX.X% year revenues SG&A year internal quarter's The versus in of compensation-related the effect for ended XX.X% We adding X,XXX were adjusted permanent talent solutions our the of divisions, placement classification one for quarter quarter

were normalized XXXX contractors, ended of Protiviti to as quarter of with compared XX.X% year. up period XX,XXX Protiviti revenues X.X% costs full-time in We XX.X% returned Fourth revenues the employees from year Protiviti and levels. the for to prior ago expenditures operating SG&A more

Operating fourth was margin from in related quarter million. divisions million income for the a a Combined income XX.X%. compensation XX.X%. $XXX segment margin segment quarter. of was the million for Protiviti Adjusted talent with for was was XX.X%. deferred quarter $XXX income impacts, classification $XXX our the quarter solutions segment combined margin was in million segment Segment segment with fourth income Fourth of $XX

rate well accounts price. The rate due to non-deductible and as of were XX% the attributable end fourth tax from sales XXXX XX% lower quarter, company's stock Our days implied the one stock higher outstanding, billion same the DSO, be $X.XXX primarily receivable the was or days. higher for in compensation can deductions XXXX up tax fourth as XX.X in quarter expenses to quarter year was ago. At

quarter saw we to fourth adjusted in let's move in January, far for of and the Before some currency review revenue quarter first all trends and days. so guidance, we the monthly billing

exited the solutions first a to December compared XXXX. down placement revenues the to fourth compared to talent quarter. revenues period December of versus were year ago. X% full increase two quarter. for same X% for the in full decrease compares were a versus January weeks down one This for X% prior the year Permanent down Contract December X% of with Revenues the the quarter X%

of three first the January, the in to XXXX. were placement XX% same For permanent compared revenues weeks period down

following reading you $X.XXX to But The you provide billion that in quarter we income as the much We are too revenue, have of and revenues that of quarter basis. some time so January. With mind, to caution first fourth billion, $X.XXX this X.X% period during same the offer XXXX trends lower that. into are into brief these the guidance: $X.XXX share midpoint per may information insight an the very as-adjusted we in on We into saw periods. $X.XX know, $X.XX. than billion

The to X% classification to the as XX% follows: talent to down as Gross to XX%, solutions, to on major to XX%, Protiviti, year-over-year estimates assumptions revenue, XX%; talent overall, X% to For margin as X% overall, to solutions, compensation XX% XX%, rate, for X%. XX%; income X% a million XX%, $XXX.X million. to overall, X% solutions, Segment percentage: XX%. Protiviti, of XX%. a to basis, XX%, contract talent up XX%. XX% XX% $XXX.X financial percentage X% talent, XX% Protiviti, up midpoint down of X%, to XX% to XX%. down excluding adjusted revenue, to deferred XX% SG&A Tax to overall, impacts: Protiviti, down underlying these are shares,

are subject our in quarter. today's our we cloud to $XX XXXX the $XXX costs, press mentioned guidance estimates risks capital first to $XX filings. and expenditures computing one with in this the $XXX million provide SEC on call million, capitalized release All million We limit quarter. and to in to million

back turn the I'll Now over Keith. call to

Keith Waddell

markets talent even measured the sales despite continued hire, at remain and cycle. albeit economic pace, continue an Thank to Clients demand has lengthening you, tight the Mike. which Global effect more for remains labor of the uncertainty. high

with to the have the quit for X.X%, a remains where United Unemployment stands resilience. Similar lower rates degree rate point off talent in Although at States, those even globe and remain college elevated. across claims recent come persist market reports and metrics low. openings X.X%. highs, also all-time their the Job is unemployment a shortages low, remain XX-year labor

and engagements while applicable to nearly of solutions. a the the Both strong solutions. financial In and revenues overcoming an project regulatory talent public Protiviti across very in services have projects Protiviti shift high record of achieved consulting of the of continues $X XXXX, trend billion, down the risk and show pipeline wind technology practice more offering increasingly sector practice very to diverse even particular large strength. compliance to a

mildly remains impacted is current Demand robust conditions. and for Protiviti only economic services by

achieving following This for demonstrated the While the about successfully cycles economic fastest our in history ability our to peaks. recovery achieve macroeconomic we optimistic by outlook the our are in navigated COVID-XX each We've XXXX. higher environment, time company's there remains many volatility downturn. was

We from cycle. offerings its also resiliency, benefit to continue solution are economic less from tied the stems which much Protiviti's that diversified to

prospects Longer managed Protiviti. engagement higher ongoing growth levels. Half skill talent focus These term, we to Technology with and services and resources, on are the professionals, encouraged Robert full-time margin include our by related management from solutions,

candidate including Also, database, to network, new it creates for advantage addition, remote highlights global the structural brand, higher skills, AI-driven work, particularly shift strengths, competitive and In technologies. our advanced office our numerous very our and internal experience the position for innovation clients digital meaningfully which our candidates of investments recruiter continue staff. successful us improve and both to productivity and the our in to and as technology,

dedication remain purpose meaningful not could I people need be to and of our and corporate services talent a provide into energy and solutions, to exciting made and to expertise who all the committed and proud our matter of to efforts accolades Protiviti year. more so subject connect work grow. global with teams, number put time-tested they possible and XXXX. including record awards talent We results clients this and compete our professionals in corporate constantly much Their

named being as included recognition companies. and one of quarter one top workplaces the Forbes Fourth world's of the by for best female-friendly honored parents

are to continue our and particularly we receive inclusion. diversity, of the to equity recognition for We proud commitment

to we'll Now and I'd be Mike to your question happy a additional answer one for there's time, ask and as single Please you just come follow-up back questions. If questions. needed.

Operator

[Operator comes Baird. of the ahead. with Please Mark first Instructions] Your line question Marcon from go

Mark Marcon

can Good Wondering you about Keith a afternoon, Protiviti. talk Mike. bit little if and

a to growth. the You're to regards basically guiding revenue reacceleration with

that? can wondering having it But that's continues with I'm Protiviti? contributing extent by it how compliance about strength. sector seeing are assuming we employees, public perspective, mentioned detail, should bit RX or obviously just source an visibility of effect a bit reacceleration reacceleration? but a regulatory the sort you wondering that give what reacceleration driven any XX technology is seems a little integrated of is like being well as from is a in of as risk to You the about you fairly what of about outsized what how and or if of And be And RX terms think extent you're to to to in small little if

Keith Waddell

of the by rate XX growth impact and all, impact financial their wind of of Well, public sector the so first services down project points. about

due was order regulatory So risk good. you projects is spoke to, X% XX% they've the about, consent XX% quite take regulatory becomes got basis. reported, compliance the you growth where as on and that that remediation a that some are core That

side, technology technology you've security. solutions, On the got got data you've analytics, got you've managed

of All those good. are

in internally It doesn't own small. which have around the to we're The RX but use it's happy XXXX. experience, our integration, replatform primarily overall, we're transformation, the to digital capabilities needle ironically, those based to move customer Adobe websites very going on platform,

you If line becomes at and project public coming the digits, X% or look from the the down guide quarter, midpoints X%. sector high-single the big for drag

rate Protiviti's in It's they very where pipeline double-digit you're is feel are. about feel for great growth mid-teens Protiviti that overall. diversified. great strong. still So about very QX. They We

standpoint, it raises they SOX SEC that focused external one front documents, profitability always clients seasonally internal audit in always degree some the seasonally to their while are staff following their have their audit. case, focus a internal and is all on is Jan their lowest. From as their X, their business, load which, SOX degree, crowds quarter out and audit on They additions to and effective some slows

seasonal I the see is So Protiviti, described. impacts, you about we're typical very profitability bullish as just

Mark Marcon

admin overall should in thinking terms give what we but you temp the – us little That's margin and – on to then regards gave just and we contract bit technology. extent a of to gross a contract terms in finance perfect. about customer think of help from what And guide, accounting you of it thinking And the just and how sequential just are support perspective? staffing just with about versus the can

Keith Waddell

give the most strong, open they did clients Within accounting, engagement seeing which incredibly get well. we group be public staff has our practice at quite and one some From time. above. the real been also It's that, sector It's cost-conscious, been extent customer senior conservative to held been by in is the impacted professionals impacted impacted mix. places we've to and administrative and a hopefully of stretching level less up we're more incredibly finance So remains their particularly overall by falloff. standpoint, the full-time has in strength support first the seems Administrative and go. guide,

is again, are So Tech in F&A, clients negative largely case ACS our like tech bigger looks as for F&A. QX would have the F&A. than more impact a because SMB,

they tech a Our software than and skews services be and applications. nature operations is rather to than software with impacted applications, more case little largely of infrastructure the and to tend and

Mark Marcon

margin? sequential the gross then And

Keith Waddell

Those Sequential we and some workers' quarter, actual for gross up employment. for we got state and credits. margin, credits fourth We a the as comp estimates don't federal lift to trued got repeat.

a consistent of kind of what's the that of is lighter little bill And Conversions the perm QX in difference and absence so to most in frankly, sequential spreads guide. Pay true-up those QX QX credits. the embedded with continue is solid. same QX were level

Mark Marcon

much very Thanks Keith. Perfect.

Operator

Your ahead. Please next comes question line the of Steinerman Andrew from with JPMorgan. go

Andrew Steinerman

thinking the business Hi, Keith. conservatism I gross break feels sense operating our made. I'm contract know contract how together. might you you perm just a be why guide the a for talent comment know solutions solutions, us model which even down. just for perm of the margins temp? trying I is your When you margin and sense kind gave little X.X%. us to and margin the sequential that Could quarter of first – past just the that you give of contract midpoint of gross between quarter talent a the about still It first down will business just in when when trying model a like to you're margin for

Keith Waddell

versus Well, don't split we our contract guidance. out perm,

with and on in a anticipate, the toward a two-quarter to how we think I cost, margin early particularly we would assumption much just for show assumption than they up be first been headcount lag QX see there's one lower our to or between trends at has quarter. to but actions the based our From our be safe headcount the topline, always on contract trends, take never always the to P&L. assume perm pretty post-quarter since it standpoint, coincident what going that is contract the our the stance operating adjusting

reason, so little shows in And will, Qs operating you'll in contract adjusts, see you negative margins a three. bit two that in leverage of for up, autocorrects, QX if which and

Andrew Steinerman

economy hold we do the you're where ready you then for optimistically, whatever Robert economy lastly, are optimistic is XXXX And you XXXX mean that Half up? you're saying use and about the you Or brings? will when say optimistic like you that scenario enter

Keith Waddell

former. the an our from them manage durations. with through standard It's one basis more of intensities single to our every new of the highs. most cost we've tenure. nimble structure. to of many different individual and emerged We're been relative headcounts ever We've stand, downturns We've make a their given been they We to how on relative

And structure, to advantage cost with really so are we we feel about capability the we our are with where just there. what of business take good is where

We professionals but solutions, nicely high We F&A, before, growing engagement resources, levels. double-digit. higher-level nicely, have Protiviti quite talent at double-digit about growing some still in double-digit. really quite management businesses talked growing Full-time

the And pleased we'll that so staff with we've add up, and way been to particularly has there. held

And our So believe than whatever other side, dealt, optimism are we'll emerge with ever. hand it. on higher the other we we'll deal is the we is whatever side

Andrew Steinerman

Well so Excellent. you Keith. said. Thank much

Operator

your go Balsky, is line ahead. open, Ms. please

Heather Balsky

Hi. Thank appreciate taking my you. question. you I

how headcount, past, then nimble although a would structure the how You regards those of and think and with in in in managing environment? you're gave about kind you're little sales, I business Thanks. in being to about business, you also lag. with around of the you a typically adjusted cost bit And making line your SG&A to headcount. things your investments and with costs. you've hear your currently be making been to with have you're thinking talked color love thinking this Is I about that

Keith Waddell

traditionally thinking have We're thought. than we any not differently

pleased for that AI take spending innovation. relates of about, to XXXX. or but against the very as optimistic. it will the to as we're particularly a two, we to professionals occur, may is for select thought quarter spent be XXXX identify two downturns technology, returns but our leads the and early gotten, AI As will We're quarter what side. candidates. in that on The warmest They've It's AI. with transformed trading how to turning or lag headcounts, a attention lag we sales anticipating talked of just we flattish a We're there's we've with days, we using identify our field adjust topline, not to our in that

We're part new the We're probably candidates. we've on the website of very come a half experience digital clients and our year, I replatforming coming. new second That about the will earlier latter focused improving website talked of got sometime of that. that.

So with think is level pretty other much we technology the But and ever we strategic we're is our flat XXXX, spending most that, innovation at it's structure nimble which than continuing a is our think appropriate. cost been.

Our highest to spoke our cost to individually leaps best payroll by tools in and the our branch we've earlier, cost, I bounds had we and as that manage have is the history.

Heather Balsky

And question January trends. on quick the one

trends. had or the I'm if holidays, the of numbers? curious some given there those in Thanks. because those think that sometimes I quarter, in July the Xth any you off just there's in noise be January, coming may you're three-week that that July noted be holiday, can noise seasonality

Keith Waddell

part we part quarter predictive for precise It's weakest impacts more of It's quarter, least the a little are in The had predictive on but came relative holiday least also always Christmas, placement, the back anecdotal. speaking, predict. take about clients which I'd We've New the if internal the as super was more staff get perm a holiday a the later some Year Generally reported. to early than had say We perm, to you normal, early impact. holiday the of always view read take that's full take fall. hard the is we they was in the time hard Well, off, for had to January which time impacts. talked off.

than perm. of I'd extent, early results XX% don't That post-quarter some XX%? by we post-quarter be discount get the to we about would. said, token, perm. following would rather overly quarter But so same always I down And Sure, up the excited

Heather Balsky

Thank you. Appreciate it.

Operator

Markets. the go Silber of We'll ahead, Please Jeff. question from BMO next take Capital our with Jeff line

Jeffrey Silber

hear again. you try now? Can me to going I'm

Keith Waddell

We can’t.

Jeffrey Silber

outlook I'm They the wanted at I very expect what to should were for incorporated and for bill this what's just level? in your curious rates. you Do on the Talent first strong expect stay the quarter. we to contract Solutions the quarter focus them of rest in year?

Keith Waddell

would subside We expect them somewhat. to

higher talked will pass margin impact, that while have margins. a have haven't pay because topline pretty gross so they much and And expanded them we've not impact the with as before, much rates, through gross might we intact

something degree, phenomenon. topline if would more that more think expectations X%. some which it, call a given a to be X%, It's going be X%, unwinds would phenomenon than that to it I at rather X%, to X%, reasonable, economic than So X%, be margin normal, return

Jeffrey Silber

what for cycles? this cycles helpful. a things then us we Can time? conversion fees your XQ. on remind you reason color And range Okay. will any in of of in what little conversion bit That's just us to and you terms incorporate be have gave fees, historical And down should company of different think been the up

Keith Waddell

on time at of not depending X% to remember tops at that specifically, Well, look range you I'm is low in X. more it what XX than probably X% times past typical frame I is out to the you long anything the looking and Xs if saying ago, can years, getting X% the revenue, use, many but

as total, degree so also a and gets again, downside very And we versus permanent the are. percent which to some normal comes points tracks XXX, placement, strong. smaller. back of basis where with It there's XXX But

perm come back anything, side. if on fact, is the that stronger the conversions things contract when case In improve, in

Jeffrey Silber

All right. That’s helpful. Thanks so much.

Operator

Barclays. from line your Please with of next ahead. go the comes And Manav Patnaik question

John Kennedy

This for is for taking Thank you Ronan question. Kennedy on Manav. my

high, with to the on extent talent shed remaining some for hire demand to pace. to continuing labor You at tight, comments this markets the slower on regards clients light a certain

two termination rolls on the although the five of on throughout the four and levels markets, were headlines narratives saw broader news at lead in open and weeks had from labor SMB media December for temp think see recently, what within all market? results since contributions and data of of early Just with labor in in comments the are SMB, the XXXX. you on wondering, the Can and headlines December you with the first even your quarter the the news there just reconcile kind the highest I we out

Keith Waddell

Well.

is the end, on And businesses. anticipated also impact NFIB has believe talked you're confidence. same the all, I referencing, months Their small of optimism downturn their XX most clearly cumulative I think lower of all index that negative an story And the about ever. the impact than XX-year average. First the news down straight was toward this

And which board's being the so while which to pretty the is some in data, it seems NABE, indicators, expectation data hanging softer be data. expectations also hard be about there well, had conference NFIB, negative be leading it the

consistent our see the have get not longer to said make those dried clients. talked groups that of softness. more which of all that, indicative as up. to to question clearly think labor with forward-looking data resilient closed. I've data, about, the that between It's But We point want we there's continued I some the is which supply them market would just of there's expectations Having no and orders very clear. taking tension

simply They more We to to taking Our not see more an process. people up. the involve in orders. clients They're sales are It urgent. dried Orders less interview want steps. have They cycle. still more lengthens have want candidates.

John Kennedy

and people the think, versus, spreads? the bill inflation pay mix is maybe think Robert to importance gears wage and about shift margins I rate Half familiar margin and most dynamics what helps. Could you of with place conversions drivers. would an emphasis just That and talk less on And of

Keith Waddell

pay levels, for the bill Well, been at pass-throughs. the rate is, spread as they've from point earlier most increase, increase, talked bill these we elevated a part,

X% almost percent-per-percent impact. have So X%, wage dollar-for-dollar we've the margin had hand, other higher rates, been bill have rates very impact. which recently, X%, a Conversions little on

were so X%, conversions a far this And cycle high so at X.X%.

quarter, X.X%. to back think I down we're this

they're clearly, downside, they I the call particularly while labor up want on on up earlier perm ramp their see on an quickly so well. prior which they show which up they if you conversions recover most as early margin show if study have conversions. the volatility staff, you'll a upside the good they clients mentioned, volatility impact, as tight coming as do benefits And their up traditional from but cycles, to and staff benefits markets, the range. talked the we perm, cycle, And And lock about in

John Kennedy

Got Appreciate Thank it. you. it.

Operator

Jefferies. Your line Moore next of from ahead. the question Please with Stephanie go comes

Stephanie Moore

Hi. Good question. little to the back afternoon. if maybe a on of what or been tight I the even market wage more any pushing you a other being wanted subdued inflationary side know bit signs wage Thanks a seen tight companies for has have and inflation really environment.

there? any So improvement

Keith Waddell

definitely Well, which can, we than would we're because part were is clients pushing back they they in they think say understandable. more seeing

earlier we talked rate the of I pressures well as with we're well, As that. that some along as as expect would dialing back the rates seeing wage bill go

much of talked reasons margin we soften back don't that about, as would a think rates So expect bill bit, a impact talked. for things pay have and as I rates that to dial a I we But bit.

Stephanie Moore

Were just performance? customer think you terms the across And for and surprised you accounting, of administrative those we talent tech. Right. solutions support quarter, the then of as that and about in finance there any No, as at – absolutely. continuing, look and

Keith Waddell

positive professionals. engagement in strong surprises resources, really had management we in double-digit full-time strong we growth and growth biggest the had Well, were double-digit

that so was And good.

On a side, the negative impacted. say little I'd was ACS more

I think in in dealing that administrative tend clients our cost as to get to saw their they more first we numbers. ACS that, and go with conscious, staff

Stephanie Moore

Thank you.

Keith Waddell

we're directly their one psychological all perception that Yes. a Tech while tech, much with layoffs. great is big that fanfare I'd that On to and is hand, and say And there's that tech Tech market not a is interesting. you've there's all impacted by over-hired got announcing tech big that impact interesting. those sentiment typically tech quickly. on recruiters, are market back-office those off, the that HR, there tech reality aren't fairly tech a The the new They're getting lot are lot. people finding of laid a positions are lot people. tech Further of even people companies. loosened has at a layoffs is

cases, would company-specific so by being that's the tech, stronger is perception which fact, has big tech the circumstances. in we And market, that many led very in say than specific,

Stephanie Moore

or if respond that would lesson slower a Absolutely. me. like maybe of And reason of And cycle feel this past little why throughout to kind just prior cycles can from then, provide slower were might different at SMBs you cycle? SMBs? Or any more down sorry, impact environment? bit be how last played you this a more a kind to see weaker Thanks. And from a the in prior history on for one in those you the Do economic out of cycles. in think

Keith Waddell

and not By History macro would we larger cost experience least would they to quickly we've three the wouldn't more the case at reason be believe the recover the say been That's the same quickly, SMBs have it organizations. more respond and are across slowly last token, uncertainty. consistent nimble, more again. seen cycles, than focused more enterprise to would more

Stephanie Moore

Got Thanks so it. much.

Operator

of from go ahead. Please Your the comes next question line Sachs. Tong George with Goldman

George Tong

afternoon. good Thanks, Hi.

of your sector Your goal sector And been first to Protiviti impact you for public Protiviti? public your in replace embedded COVID-related with spend. has constraints forms spend assumption what's other Protiviti? public sector potentially to on spend guidance federal around budget public do spending How sector expect quarter

Keith Waddell

back event unemployment XXXX, step all concern cliff first public have this just into would of to that kind sector the moment, be going replaced. for a there going of of this to there to was be so for Well, that all, processing was absence due claims to

XXXX XXXX. reported, for we adjusted XXXX for X% ultimately was down were As currency

come at cliff XXXX, materialize, event were successful XXXX replacing I flat didn't we work. where versus essentially so from, were feared and we the And from in that

optimistic we're on look XXXX, into can't enterprise forward move basis, that you just at we Protiviti. an As

solutions. You can't just talent at look

foundational replaced that relative have there. and to and/or quite at that sectors, good public enterprise we this going don't flat size manage unemployment we'll way need on the its than behind because, public do frankly, to We've groups feel many sector. that together client and about that we two And solutions. is a practice many how on have plan sector us, We all to relationships solid but about we're can that footing. given so, You leverage, feel groups, many processing didn't overall talent of from we lot that good build an we got cliff effectively disclosures we claims feared that we're very put and larger through specific to to make basis are We're given industry forward Protiviti the pleased work. event

George Tong

Got it.

and reflects impact margins XQ headcount. from the lower that compensation seasonal mentioned You

Your since guide of driving Protiviti a of percentage XQ you little little the Can XX% bit? a above of revenue a like seasonality? SG&A as looks revenue more a What's as to bit comes SG&A unpack it's of percentage XX% for that it XX%. prior seems like than year's that it XQ

Keith Waddell

at look SG&A have of quarter quarter the see by that normal it XXXX you much because marketing. didn't to will They training. over they Well, development. grew much practice levels XXXX, you by as Protiviti's get XXXX, progression as early have They as have percentage, didn't if more quarter back didn't to much

so a And to have those normal returned more level.

segment margins spending. come in raises in stepped to about years, all their that QX, prior by recovered down Protiviti their So step margins, though main We down happens the But down which from softness that the from margin, is of they from is audit is operating Protiviti's year stepped QX of were how all consistent you're the that that's with not hires had that, line, nicely. ending some X, about every levels that the margins impacted gross with pleased what and perspective, yet featured QX. event and XX% of with SG&A. QX understanding the serving where seasonal comparing normal of only normal that the at gross mostly once QX necessarily in margin built levels XXXX happens hadn't very back internal and Jan for in they've to on they're very, fight, at QX in XXXX, operating a very spending front actually

George Tong

Got it. Very Thank helpful. you.

Operator

the McVeigh comes from Please question Kevin next Credit Your go ahead. Suisse. with of line

Kevin McVeigh

Great. Thanks so much.

in is a lower. typical looks if guidance know typical step QX range that you there call range pretty But there the know else little similar like QX. another, midpoint And way less. revenue, down. the I the the seasonal anything utilization revenue one the but there's out you'd unpack to the is little else? there, the again, to maybe is a Or being there looks kind QX? seasonality always close Again, bit. some the I QX take that of Is of seasonality? about $X.XX Just looks EPS kind anything to there's bit like Because or it of

Keith Waddell

to assumption Point and quarter I'd you've negative our year smaller has our typical there's of this seasonality margins. three, last. mix, That Protiviti Point got Point which say a contract, to current got a you've is leverage we little revenue. the this year than more talked because two, earlier I little because SG&A than would were conservative one perm of maybe this that two as it's than one. lag more a be some last higher raises higher headcount levels about because perm adjust

on pretty part you of again elevated It has down. will that, rate prices QX, the top rate compare stock QX It elevated. is year QX. put to tax the ago, up caused is But significantly. You elevated the if in in in was a be tax QX

essentially seasonality, conservative So otherwise, as heads. one SG&A because negative because adjust topline it's we leverage about perm a two-quarter But lag of there's how mix and some much pretty guidance, expected. Protiviti or less between

Kevin McVeigh

you're there based think is today? on as – in so couple you've the of a what no same, around And the you parallels two about cycles, and lot time any and as it. two like are similar to I if out – in no seeing I – you preparing to the it's your any stimulus again, mean Keith, any then are outlook, the but been were us you a tricky history COVID with just parallel Got have just draw same, of think

Keith Waddell

this never an so they're softness We're and been been like there's underlying labor Well, time. as through all different, strong the there's right market.

So one would one like to buffer, think that this make provide that would milder. some

is recession, most recession. debate anticipated ever soft and landing, continues no I downturn this As landing, about hard the earlier, the said

made can't Clearly, just different. It's like is too financial feels the of what crisis and and dot-com. make I will intensity, the it in what like say But than I'll and those new matter same, back highs. highs. confident no or again, came we we're that. really So come it feels it new very the no say COVID-XX, it's And different one cycles, what way back duration, matter we their their every

absolutely engaged experienced and in in help upside place We participate most that have our to us people when it comes.

it's Our is been. as cost structure as ever nimble

good cost we many point like when happens. it will looks our feel that gets we will and proven the we've margins be what better, there, about like, So But until that times. is our what structure look

Kevin McVeigh

the helpful. – Did That's and what did if [indiscernible]. say on revenue was the RX acquisition you is then the And – the in the can contribution... guidance you you quarter first of of impact terms

Keith Waddell

very It’s small.

but important very think gives of important, XX, didn't they a had capability. important small. total But we capability a us have, that's I It's and people. XX and an

the So of we part as love family.

Kevin McVeigh

it. Got you. Thank

Operator

Kartik Your next question go comes line from the ahead. with Northcoast of Research. Mehta Please

Kartik Mehta

way I'm to at month what ask compared why number Mike reality to three and permanent that on shown? if and job they your weeks especially the permanent maybe before, have had compared part a on to figure you your a wanted to maybe wondering you quarter, have gauge. of is look placement, part out of January they a the about had kind to difficult on And just the first and at of Keith, openings maybe a conservatism you I the that's it more of is first maybe first of little Mike, trying bit to just placement. might the the conversion. indicated what part And that's clients look the what if

Keith Waddell

to because so to you can't longer ago. really close opening openings much it look a year an either today Well, takes number it the of than did

to fact, slow pretty need, takes your from be that it, how if going want kinds however of sense very reasons they you can just urgency, they to don't time And the you, client got it order you, If play in they've slow close. a is longer. so call fill urgently is to filling all walk

metric say not the but we bad. order or it's say, well, isn't issue, so that's no that But to And say of magic understand time the flow in it fact, order can the this, order an an this, takes presence there's the close the order. we absence the revenue

Kartik Mehta

one one. Fair last enough. And just then

on Just Protiviti.

of terms you the environment change? is the In seeing competition, anything would you are about same? Or say

Keith Waddell

larger something roof. say competitors I'd getting I'd is under that environment don't, that larger a because say their about have and same. in share Yes, environment, and we're the the we that's one

leveraging those with We're Protiviti operational that more specialized believe capabilities as are offerings firms scale to I do at staff as near have. up where day. none more offering four access We would specialized across traditional Protiviti have talent their many big that they the chargeability Protiviti's further, broad have winning their as They're and to to a clients doesn't the resources way keep to. because solution their times those to solutions have their and And resources competitors, doesn't that more you more of compete their every Protiviti. competitors a as They even have industry. as solution they're other in tell

and access they're doing b, competitive increasing both give share has and Protiviti advantage great. is solutions, Protiviti of a, which So more talent to they're Protiviti specialized, market

Kartik Mehta

both. you thank I really Well, appreciate it.

Operator

go question comes And Please from Baird. line ahead. with the Marcon next of your Mark

Mark Marcon

to we're this but ask wanted out recognize public I I a time, forum. of in

seeing the or it's a you of of form. if longer-term Texas, shape regional are from AI that of illuminating terms discuss your or just way, operations any perspective to any then industry of increasing just And differences the potential briefly in perspective? say, impact sort California of want efficiency from Just in Northeast the whether Florida, versus, terms you are a in trends, differences

Keith Waddell

than better coasts the only out this have for expected. the country. Germany regional the would I U.K. have good little had than is guess the would the a They outlook point middle softer and make much would also comment I that are we quarters. of that I very quarter

results that. frankly, U.K. in better So Germany, in than States a our results particularly well little are, as impact international United our

As to totally how AI, before talent. we talked identify we've to transform

active candidate money. more ART making to people of is – in have people are million allowing household can in us, with market. can number candidate It's Robert database. us. get ago, the job call a our for AI XX in a We time, It's the Half. record most advantage but not ART, It's proprietary now We, have more time, we competitive productive. that short that the people of million A candidates that of a year In through in candidates a real XX be database, track case. that of internally, huge proven earn which we in is talent, word matching that our recommended access list people real our candidates, it would

We would like talked as side, to the thing about do same on on earlier. the I lead side, client the

receiving have an an as recommended So AI ART, well like clients. to ARC as we would

optimistic And at what have couldn't so an impact we moment. with be cautiously for But we'll the focused we're organization. our I'm has pleased there. where that's AI more done

Mark Marcon

Perfect. Thank you.

Keith Waddell

Okay.

we're over. little bit think So I a

So that last our will joining. everybody, be for Thanks, question.

Operator

teleconference. concludes This today's

part any Half's If format you've archived website be roberthalf.com. will Investor the audio of in Robert in it of missed Center call, the at

press company's earlier conference the You Details replay. call release can today. in in are to also log issued contained the

may You disconnect. now

Robert Half International (RHI) 26 Jan 232022 Q4 Earnings call transcript