Earnings call transcript Q2 2023

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Operator

Hello, and welcome to the Robert Half Second Quarter 2023 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

appreciate today. We your everyone. time Hello,

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

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

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

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

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

improves. to for for remained gross the resulting continue that our we with Solutions its and suite significantly the Second from quarter diversified deliver Protiviti well-positioned Pricing results elongated much landscape demonstrating remain cycles by margins impacted less clients. Talent solutions value-added confident ongoing were to macro uncertainty. as client hiring impacted we're was global macro strong, of We benefit benefit offerings.

dividend on quarter down basis. ago. distributed from revenues second to the company-wide $X.XX per $X For in Cash quarter operations last June, cash we second quarter share cash the compared the per of $X.X and a as-adjusted billion, of outlay record a million. for $XXX reported year's a flow was $XX in In $X.XXX year total second XX% during our the million. second both share quarter from shareholders one to X was of Net income were XXXX, quarter

has XXXX. higher grown in XXXX inception its June in XX.X% than dividend dividend XX.X% annually share was XXXX. per Our since The

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

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

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

Michael Buckley

Thank you, Keith, and everyone. hello,

$X.XXX Talent down adjusted down X% quarter as billion As an Solutions second million, Keith Solution second Non-US US adjusted as Talent the year-over-year on second in quarter. prior were were XX% basis, year-over-year. $XXX revenues noted, quarter. were year's down basis. revenues revenues $XXX Solutions global On from million, revenues the an Talent XX%

States. of United We locations countries XX locations worldwide have XXX talent outside and the XX including

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

$X and of XX.X the XX.X reported by million. second billing $X impact has Talent XXXX. to And days Currency rate the for of quarter third a effect during the quarter The XXXX total year-over-year quarter for billing third for had million negligible decreasing Protiviti. exchange of movements that's days Solutions revenues compared

revenues Contract the first compared ago, for in was rate Talent specialization, X% year adjusted rates This increased by for country. for mix one quarter and Solutions to the bill changes currency of quarter the X.X%. functional

second in revenues outside a million non-US the its from results the ago $XXX $XXX were Protiviti operations United $XXX were at XX Protiviti for quarter member look in through of independently million, an business Global XX is serve closer a period. down take X%, the States countries. US basis, million down while were were and firms of is versus within owned from locations that up States. Protiviti. X% clients year On second quarter as revenues revenues United Protiviti's revenues Protiviti the network and X%. of let's adjusted Now

margin. In second quarter revenues were margin quarter same Conversion to Solutions, X.X% to or in year contract now of of ago. one Turning ago. one in the to Contract the quarter year of Talent gross the as gross second revenues applicable was revenues, the quarter, hire X.X% XX.X% revenues compared

margin Our Contract Solutions one Solutions quarter combined for revenues consolidated XX.X% of XX.X% Talent compared to was in overall were second XX% XX.X% Talent Solutions one When Protiviti versus the [ph] year ago. permanent placement gross the ago. quarter in with same of quarter second year margin, revenues in gross revenues the Talent

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

Second margin costs included quarter severance of million headcount Protiviti to employee gross $X.X related reductions.

deferred the costs quarter in quarter the ago. for XX.X% revenues SG&A Enterprise XX.X% global were were ended compensation year to same costs SG&A impacts, classification XX.X% for XX.X%, year related ago. second of enterprise Adjusted compared compared quarter one the just to in one

Solutions quarter year for costs the related classification compensation deferred compared versus XXXX. of XX.X% second Talent impacts, of quarter the ago. just ended quarter to revenues were Talent XX.X%, SG&A for in Adjusted Talent SG&A XX.X% Solutions XX.X% Solutions were in one costs the second

The SG&A costs this count quarter revenues reductions. placement costs X.X Solutions lower SG&A effect by related one of points. percentage Talent ago million the included severance decreasing permanent $X.X to adjusted of of the ratio had quarter's employee mix versus head quarter Second year

to continue Protiviti levels. operating for to revenues to costs period XX.X% XX% compared return Protiviti SG&A of of one pre-pandemic the quarter revenues normal in as Second ago more were expenditures year

to $XXX,XXX headcount SG&A severance employee included related Protiviti also costs costs terminations. of quarter Second

$XXX or quarter. X.X%. the includes $X.XX of related this severance income Operating was was per in million; segment income impacts, million margin charges the for million segment compensation $X quarter Adjusted second share. Combined deferred for was combined $XXX classification

for a margin Segment in X.X%. second Second segment $XX with X%. $XXX divisions was quarter our from the margin income quarter Protiviti income segment of a segment was with of Solutions Talent million million

stock tax be increased an was up quarter XX% quarter impact from for expenses, higher of same for fewer nondeductible tax million, year the DSO, $XXX as as second XX% days. to implied end were compensation outstanding, credits, was quarter, second deductions. The of XX.X one days ago. At attributed or well accounts rate and Our XXXX tax rate sales the receivable the lower can

with currency so trends on guidance, Before adjusted the review billing revenue let's third we move in all to the monthly Contract second saw quarter talent exited July, quarter far some solutions for in days. of the and we and two a second period down to revenues quarter. July for down to the prior compared decrease year, XX% compared of same June year XX% quarter ago. were Revenues full versus XX% one the the first weeks the for

decrease revenues for full versus down June in placement quarter. a to XX% Permanent compares this XXXX, the were June XX%

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

the the time information, insight We saw them. into some into of quarter so much too periods, know, against trends during we reading we you you have July. and very second as are caution brief into But provide this these

XX% in of XX% mind, that Midpoint $X.XX lower estimates offer Revenues, With to as than midpoint same assumptions X%, of X% following billion; an to period revenue billion $X.XX adjusted are per for overall, the XX%. our we as these down of $X.XX growth in adjusted the to follows: $X.XX. down XXXX billion -- The basis. underlying XX% are major $X.XX income Solutions, to third revenues XX% guidance: as and year-over-year financial to the share, on Protiviti, down Talent quarter

Protiviti, percentage to overall, revenue, Gross Segment to margin percentage for to XX% XX% for XX%; X%. of XX%. Protiviti, as X% Solutions, SG&A XX%, XX%; Contract income XX%. XX%, excluding X% overall, X% for a to classification productivity, to Talent compensation XX% Talent XX% Talent, Solutions, impacts: overall, XX% X%; to to XX%; to to XX% deferred

rate, tax XXX.X to and million XX% XX% to Our shares. million XXX.X shares

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

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

Keith Waddell

markets labor client scarcity and tight, talent to project persists, remain the and needs Mike. you, of Thank continue be significant. Global hiring

of that prolonged demand However, or is period continues. which impacted uncertainty, velocity the of macroeconomic urgency by the

more cost to internal delayed, workloads staff. shifted are extend, projects are time become contractor hiring clients As frames focused,

factors also reduced these they business in talent for demand improve. client pent-up negatively create to impact result short-term as results, serves labor While capacity conditions that

headwinds Historically, subside. to economic tailwinds in achieve are of and there's for We've clients' sit the many correlation demographics macro a higher the for many currently costs openings, bodes and come. each to peaks, that time resources aging continue variable years expected to are desire between positive also workforce structural the of which flexible level past, weathered and emerging near levels as well which cycles hiring, job record level

are with growth. Protiviti's to to lesser pressures risk limited are client modestly solution being Internal audit leads where regulatory new scopes technology budget practice revenue and its close. compliance taking their offerings consulting deals impacted projects longer double-digit being and by and/or and deferred a significant are extent,

skill resources. demonstrates against through of grow its balance relationship and its concentrated other its competes who industry professionals in presence to its levels of includes any It at those large contract solutions. with priority with firm directly and the of and its portfolio Protiviti's greater the in breadth increasing access consulting and scale, depth expertise, all and industry at to solutions the its This talent by more worked and backgrounds pipeline consulting talent continues and effectively accounting marketplace. differentiating specialized

very future the bright. Protiviti is believe We for

and the further generation, effective algorithms clients. proprietary language making continue improve incorporate we needed are top and our We using technologies engines, talent data for and tools customize our into advanced AI. includes model latest it This To our to to invest to AI. secure already our our enhancements large matching our to in

our exciting and provide expertise and talent they We purpose, compete the to grow. time-tested to consulting meaningful to to remain connect clients people work committed confidently and with need corporate and

Forbes best of and this of today, would around a recognition None Robert be recognized firms, the America's workplaces women. of to Fortune the in world. proud employers named for of Forbes new the accolades list received best Finally, recruiting just quarter. Half professional commitment millennials. best number second employees America's dedication by as possible of one number we're ranked on of And one for without was as by one our the have

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

Operator

comes the with line Thank first Instructions] Baird. Marcon of you. your Mark [Operator from And question

Mark Marcon

a period consulting, wondering extraordinary now, that it's was the you've due look hiring afternoon, how the obviously to comparing recruiting, Good that and and real look just to we're to perhaps seen cycles. thus I'm beneficial -- a staffing is When a take due rate expenses the you've could still indicated to far, like? we've that about and is at how X.X%. that slowdown? many we an And and versus How that year cycles. signs fact of of you the think future trajectory Right much the elongation Mike. what declines impact been Keith through managing unemployment the you ago at think the do particularly an does future economic in period just

Keith Waddell

a of focus ago, question no is and so hikes, NFIB recruiting with for I there more with and conservative, that XX seeing clients matter. for index caution, there's think comparisons Well, cost. period consulting our was post-COVID, said, cautious, now there more their those indicator all robust businesses bearishness, being optimism months, year with average, we and being rate are straight below is That a being the very mean the leading on all small

just that's think a I fact.

have our past basis. less. what four down cycles this in continue as we've the As been And always declined is manage we side, held the it so to That's we're the and on to on how we the margins the would better, how performance down mean, We've at about individual SG&A to sequentially an -- a, of quarters prior the recent headcount to quarters that four done. cycles. prior same looked time, up compared We've gross better, we're that margins have in managed first it's observe most managing cost thinking trough operating we've that far half I that have the that, downturns. impact revenue been

feel so cost from standpoint And that good the things. doing management a we right we're

Solutions, severance quarter, had in the million about $X talked we on, Talent million Protiviti. that $X We this total, $X million script,

guidance cost from considers QX savings follow that that. Our

quarterly in direct side, savings, Talent On the costs. in million Solutions $XX Protiviti side, $XX.X primarily the on million,

finding things want we we get That better. powder continue do said, years of some Further last invest in actions we people sales-focused to as powder the pretty the of to they therefore, few technology be, headcount front, as set will taken. the and the important to hired we've to and not on cost and innovation right were the think dry needed recruiting-focused the because We reduction have as for kind in future. we're that stage that's dry many want that

is story That's line, those we've bigger earnings historically. And as what in in peak. the further, revenue that's think every also not our and recovery the we've I the at the what reduced share we've calls, to grown count peak we've significantly only cycle, line. And said during cycles. done

essentially given every years, headcount example, reduced count by of excuse share -- we've policy last by averaging, by for share XX%. Just our The our our we've in the cost reduced five quarter. last dollar count back me, XX%, XX buying years,

this you could During cycle, reduction. further expect next

revenue not income make further we you only amount get is, level, and do significant the counts. you the then point the leverage level get from new lower leverage share at at highs So of net

view been We've we've our done So this. through we've it. managed here, is

So the far, than would to cost the expect we've side past. in milder on better have the than that past. in We we We've what managed continue. seen

beautifully. margins proud that. We're gross of holding are Our up quite

good as to ever better feel been. it the the long-term greater, our it's we'll have think cut We go is what short-term. in just earnings have we forward about prospects. we we're So And through through going capacity than we

Mark Marcon

going and also quarter, the I savings. And, to spill that got you some $XX long-term a full you those into obviously, in mentioned $XX enjoy is Keith, the of actions third to million benefit quarterly track or appreciate the fourth that, you've Are severance of quarter? Keith. million tremendous in over record. going the

Keith Waddell

of There benefit quarter. it's most that some will third but not be I'd magnitude, will the tremendous. orders spillover, say of

Mark Marcon

Okay. follow-up. one And last then

your a when headcount continuing thoughts side, and are from the expand regards nature? the recruiting season How headcount, to that to into a to fall comes on hiring from Just on-campus like the would go what Protiviti business permanent perspective? with you of things it

Keith Waddell

the risk attrition, Well, and the compliance, regulatory continue. other to and continue In is is add the so to hiring plans first talked feedback their businesses, of at before, all, business growth, the that we've their strong. they've and a the recruit less extent they They maybe presence is their which in will headcount and extremely impacting going for more got hire not forward. They hires hires. to have than certainly That's on chargeability. campus experienced in there, they'll quite for but campus the need what will which in to past, fall, business have they sustain their

as related near practice Protiviti, got some prepared as transaction that They've as their case IPO the audit, talked impacted we process some in somewhat in improvement in So includes internal also But comments. M&A the not impacted is that work. talent about includes solutions. business

severance some And that with you their contractors QX had conversion in some to time continue recovered impacted is to more generally more so of as they will with the in during recover expected recovering been margins, But that's feel gross their it's holding headcount full that more they speaking, Protiviti to QX yet also and into because there in discretionary such well. see get levels. we Their again QX plan understand. margin quite management, But normalized they quarter good more Protiviti. gross about are even back in which

Mark Marcon

Terrific. you. Thank

Operator

JPMorgan. with Steinerman Andrew from come will question next our And

Andrew Steinerman

through little holding about think more I, quarter Protiviti's just how cycle largest second financial particularly obviously, you margins us just vertical, a down sense, third up you heard the do here, Could and revenues of or give Protiviti. services? your feelings necessarily and but a the not

Keith Waddell

about including revenues Protiviti's we with FSI. feel and Andrew, good margins, Well,

financial got internal to in large are many audit for staff contractors their swapping to today. doing third-party banks institutions protect standpoint cost-cutting internal speak those FSI, with cost you've of staff the what internal reduce a spend. we As That's from

talked effect have more As the of earlier, and thereafter. to pent-up classic which demand stretch first we both which reduce positive get about That it's need see companies capacity, also their better. staff, for springboard to things growth they is contractors internal a then when very

to Protiviti, we good. feel Back

look crisis, case quite more that, that Talent be Protiviti's Solutions. than performance better financial you being would in they And our expectation bit other cycles, across the resiliently at and the latest the performed The continue. great a COVID, if than was

Andrew Steinerman

Thanks, sense. Makes Keith.

Operator

Suisse. McVeigh question our Thank will Credit come you. And next from with Kevin

Kevin McVeigh

much. you Great. the Thanks seems miss so Keith, typically relative don't to points. like around guide. it it mean, happens I inflection macro

then where it to revenue the think terms So will where, and you intra-quarter? it relative like typically is and quarter in guidance the missed, the EPS, maybe which good it most do you guess it about Typically, don't. think guidance light, doesn't you of the be little if expectations, -- where you initial I -- maybe seems were the looks adjustments was a initial but

Keith Waddell

say conservative, had quarter, clients more not broad. It cautious, which than any tentative I'd wasn't but They particular was more that. more on. were counted confined was state so two. broader we more broadly, forecast, the modestly to got It that or we had than during

quite it inside was as US, as of the wasn't everybody While of US severe the impacted. outside

it practice it and And And was impacted area finance weakness. technology, pretty more related It impacted than and accounting, span internal It administrative customer impacted impacted specific it macro of execution of any everything. so service. kind or groups. also much internal

Kevin McVeigh

leave there. I’ll it Thank you.

Operator

from come our And Blair. Romeo next with Trevor will question William

Trevor Romeo

the good much Thanks Hi, questions. afternoon. so for taking

strongest business, the First, accounting was of for it the finance, quarter just like technology. deceleration contract on this Solutions looked Talent and kind

for guidance each down about and embedded the seeing talent you talk just now you're was into for you've quarter? and if drill three wondering contract what next sub-segments into can what of maybe So kind I the of trends

Keith Waddell

impacted level. technology, the skills for level And were by accounting higher more operational so the and

technology, more that's accounts accounting, receivable, help for that's payroll, et level. operational support, for tech accounts desk, so cetera, payable, And

those states, were Customer And administrative good when qualify That for on insurance. higher we've that enrollment impacted support. area driver more and open is for news about the customer they an go times for The often will ACS, first. demand for talked certainly some will a cost, companies the lot private you've looking all Medicaid cut time, longer so in that's a potential no level. of many service, changes with enrollment companies Medicaid and people be now where got many impact and at horizon

of a a so bit And hopefully, that. get we'll lift from little

most frankly, and guidance, As perm and summer typically long-term digits looked to their sequentially. it's where mid-ish and perm is simple. trends noticeable seasonal/sequential pretty We at down single

sequential And we for long-term we the and variance three forecast the and from last we've two what quarters. seen took gives those so turn, to then trends, or apply contract that, in And in much you we perm, pretty normal that trends QX.

Trevor Romeo

Thanks. helpful. very That's

to of a the of companies on do are economic having the of just would time I'd people maybe they hoarding kind go hard labor rehiring business? recovery. an more kind how of during in had Solutions climate may staff normally you they holding this For XXXX wondering let a follow-up, the kind much lot on imagine think Talent is in than and because have impact

just labor on So for thoughts of topic curious hoarding. kind your of that

Keith Waddell

we're an think business time apt impact. more contract employee than contract has And therefore, since they I are full in they're Well, employees. certainly that primarily, hoard the to

perm means On that less our churn fewer for there's hoarding bats the than been full-time placement side, business. churn has and because there less at of

leveraged we've these impact circumstances times at and in of seen look there. peaks, for I in some there's we past. back we structural make come come share again kind And as I talked guess down P&L multiple you you the yet ultimately always count. But that's to part So reasons, we the the back, about new as leveraged earlier, and move always when

Trevor Romeo

it. All Thank you. right. Appreciate

Operator

with will our And from Jefferies. Moore question next Stephanie come

Harold Antor

This Moore. Good is Harold evening. on Stephanie for Antor

drivers Just margin there puts wanted the think XQ? you in could if what takes to with to you of do and know XQ performance out break gross respect and the

Keith Waddell

spreads. we a with declined with pleased in very conversions more higher called prepared we year-on-year. in up out as than made QX, our pay-bill We are remarks, our margin bit that gross Well,

for by mix of management the part and is related, Some great continue which of professionals, more business, more our the margins. full-time is is rates, resources, which, which great way, grow to that's gross contract engagement for strongest bill

add of while tightness our flat and they indicative and remarkably As we indicative partly QX, well. and our into have a market. value our margins pay of That's XX gross conservatism clients, by XX, a That's couple continue conservatively basis points the they're of partly up our But carry held the large, to we services. into for forecast labor includes QX. of

Harold Antor

saw US? internationally, of you call you any the where Thank -- most most out some then the doing compared could the you. just weakness And as if to countries

Keith Waddell

was They is said quarter, have couple International ones, for between [ph] the had good. so Europe, FSI within within Hong stands And out growth continued A up notice positively. quarters, year-on-year IZ Kong, a many we've tick Asia-related. their quarters with solid you'll rate more a And Germany Protiviti, that [ph]. in as Kong, to actually of and outlook new Hong very Asia, and

that see reopening from specifically little as had area Kong. nice you totally a of from Hong COVID, we the Pacific, so lift country Asia And

Harold Antor

Thank you.

Operator

next And come with from question Manav Patnaik Barclays. our will

Princy Thomas

you the XQ you is cycle? typical give based margin us for revenue Hi, Keith, Thanks in seeing, are seasonality the And of One and and where just do the question. Princy you've can we XQ an on what on think trends? this for Manav. been idea Thomas

Keith Waddell

fourth where -- We've said So our I And fourth we very That's we where cycles a to just very as back -- hard and were cycle? quarter can sequential look cycles. to now in say, quarters are certainly of consecutive had in prior answer in, we the four answer. hard quarter those question earlier, declines.

Are but months, about, revenue ultimate think line, we're duration wherever line, operating Is a where exactly been landing? we shallow? have questions at are be? and All are, whatever clock this point, with debated line. who the are and we stick SG&A But a what we're is line the for incorrect, the the we And gross for XX been some we going income the to of so know, the we And have Is cycle. in is, says going the the to it dealing question downside that answers said going to to it, is short I have recession? XX even knows? there right? of a answer outperforming Those be And as broken to saying we've months. recover landing? better personally the we're as side, the cost that to a going soft deal I before, just feel at there's in, we'll margin How from years, about in to whatever XX And recession ever the we than we always where have. have have we past we from strongly with been here. don't deep

Princy Thomas

Got you second the the year? talk the for it. that also half And you've about of seen can seasonality trends please historically

Keith Waddell

right. Seasonality -- all

versus On flattish QX. contract the side, QX it's

the kind side, it's On QX mid-ish summer perm the QX digits, of which single months. are down versus versus -- QX,

or quarters. a variances indicative the in seen discounted I we as of three that's percentage earlier, buying those last so we've two And the said

So -- more is significant the the only typically during the is perm softer summer. trend

three Our consistent two the additional guidance softness and softness past that reflects with or typical quarters.

Princy Thomas

it. Got Thank you.

Operator

question a Josh UBS. have Chan we And from with

Josh Chan

Good job good aligning historically, has Half Robert demand and slowed. done Keith guess, I when Hi. a Mike. SG&A afternoon,

over severance as time the if in it to go some SG&A I like through I you QX. QX any you severance and sounds expect whether And so guess, to you there's revenue wonder the kind downturn? number decline of in close had

Keith Waddell

result any in QX, manage also hasn't severance either. individual would that We've that basis, there's we no long from SG&A no there's benefit our changed. but that So on an count said head severance

cycle-to-cycle, would continue relatively as aligned says, History to anything, relatively if are our if time, aligned look are and that each we move said… we That costs revenues. costs better you with our forward. expect And

Josh Chan

Okay.

I you Okay. the your about level could that's in programmatic a past? share program, right. the then whether I talk be guess, price than is, And opportunity approach All guess there's the follow-up at is that to my if opportunistic you more an attractive buyback could

Keith Waddell

Sure.

revenues decline of decline, first understand receivables cash. and as to So, convert all,

that And consider So on as you certainly goes sheet. to we opportunity that, extent just beyond from it, cash ordinary stock we and $XXX course buying, have on an alone. the will have for sale, the we'll call additional the balance programmatic reason million of going

opportunity have programmatically, and there's reduction beyond So and to balance more go receivable we'll our an cash given balance from then funding sheet substantial that.

Josh Chan

for the color. Thanks great. That's

Operator

And Research. with our question Kartik will Northcoast from next come Mehta

Kartik Mehta

you I was softness look numbers being as if you've wondering, near those I'm well. perm companies And your openings in when as afternoon. record to at But other wondering, reported have published, highs. Good job talked you taking are just a as want, and the are waiting they the economy? it number matter is of or customers customers people your or reducing to with figure longer of going look, maybe happen what's to out

Keith Waddell

the latter. It's clearly

see they're to more Our more that selective. got they've levels. want for. being they'd approval like They clients people openings longer, taking clearly a They're given to will tell candidates, you have hire taking wait-and-see attitude the more They're uncertainty.

for look talked been the canceled in things for in delayed. other on growth about All side the revenue hopper on source They'll are And have there that's also delayed, not runway that better. things as a many, but those quarters the of also many, many row. a you projects several tell we've that

about about demand. aggregate about. not requirements They're talk openings velocity are it's shown So urgency the you And demand, the that but a cautious, best thing. are absolute good And that's nimble, or and by that's wait-and-see taking of demand or there, I being they're the a the that more think job our clients more it's attitude. SMB

And XX-plus was correlated. take it sense same I back, hiring, We can and years the you do highly common and would as openings job also tell the think correlated and you, went and for thing. JOLTS they're data

the are, more openings there that more the So there thereafter. hiring is

a the or million level. XX it's thing in level the in so are where X X typically, good they're million that And million openings

Kartik Mehta

the of a then health SMB And just your your follow-up, as thoughts on just customers.

is seen maybe just you've changes, because this to what's happen? see a little of a else or pullback any everybody bit If like going waiting to just

Keith Waddell

we've typical budget it be pattern before, said And to to and SMB's do behavior the It's to as focused be more more well. upside as for nimble, on more same happens behavior very that quickly.

they're on reduced quick capacity they're if they've less the on cut the labor the quicker and to stronger got your acceptable and While the quite also frankly, are… downside, capacity. particularly is internal And internal stretching to markets add conserve upside, less

Kartik Mehta

Thank you very much.

Keith Waddell

a have you …unless retention.

Kartik Mehta

Keith. ahead, Go sorry. I'm

Keith Waddell

a No, internal can't capacity, the stretch but market, in have no, so labor tight problem. unless you saying far, your I'm particularly you retention

Kartik Mehta

you much. Thank Appreciate very it.

Operator

next Markets. our from Silber with will Jeff BMO question And come Capital

Jeff Silber

prepared and guidance one. think your remarks, out, Protiviti your those late. If much. I within so there? going wanted as in as as not, focus have on margins. well. what ask would on deferred I know in come know Thanks we was to took and if I it's cited And They well I it And you our classification just below guidance? numbers I'll your comp else severance. were

Keith Waddell

you. Thank

they at And of does to bigger If work, the you budget-focused. audit internal below of to share client technology as a co-sourcing clients out, those of still work, bit work of times comes as were be it improvement business the to Protiviti because keep also process particularly took many because some internal more lot a degree, audit, than the got where it Protiviti lesser work. expense in both the as forecast does consulting, degree, little of relates cost part clients conscious, but some get more a which has Protiviti. a would guidance And a the large softer some

Talent cost what are those not Solutions, two fixed as impacted we little their full-time areas, in with in a modestly soft. Protiviti has soft force, because as near labor more So revenues see

And you their that negative in leverage from margins. had so some

the their They workload related our phenomenon Given internal the the quarter, are using related contractors about other and fourth to same expect spreading the the cost using, taken in expand clients those margins to the they've actions exact in talked staff, just to again -- quarter the I third fewer severance the to do quarter. right? and in

than softer, trajectory revenues softer in second expected, areas a And good. significantly softer. so is were two the in those they quarter, but a just the the little It's not little

Jeff Silber

really helpful. much. so That’s Thanks Okay.

Operator

Tobey with Securities. And from our next Sommer will question Truist come

Tobey Sommer

get on rebound goes two If doesn't year in and or cycles where head of in slowdown up the go scratcher look on wanted versus been on I perspective growth unemployment the of a pick are robust to has unemployment significantly, sort your rates and Thanks. like up a of whatever to your about get that I'd so side rate significantly then to of the but love the side. this other other we're or on look perspective a in. may what one growth and like what rate of the could other forth, equally sort

Keith Waddell

where reduce transferring for ones to candidate that have has over with rate about same namely, a pool and supply, structural sources candidate little differently. Well, to high particularly typically, today demand their the few extent I other we workloads clients rubber guess AI, remote we levels. it's effect like looked XX available skill have database; capacity that's would during candidate fewer advanced pinpoint and that rise c, think confident hybrid skills band we've accept that To the we that quarters, higher There's they to our a, clients, that we I'd unemployment have b, bigger capacity internal last unemployment a to can supply on reasons, period would work, unemployment their early of doesn't say contractors, by we we're scratch we traditional work, demand. reoccur. impact, us service traditionally, produces at The to peak expect happens them. rate even quickly; it our million will a the additional

full-time got where that those that not all, professionals of pool job, already from we've full-time larger most importantly those a a And much we're maybe i.e., people, are jobs. between have engagement these of recruiting

it to we're in demand always candidates that differently of we part so the that just find heightened up an sourced the see we'll And early service collectively, that cycle, will than confident we won't unemployed this people traditionally what because occur got which this looks an time at -- do like of this time. traditionally much early in won't up larger be cycle, you've group reoccur

Tobey Sommer

Thank you.

Operator

Sachs. next from will Goldman Tong with our question And come George

George Tong

afternoon. good Thanks, Hi.

conversations elongated see about you expect of trends sales far do cycles July hiring with client seeing those to clients, you're Based when talked that stabilize? through macro cycles on because You seeing uncertainty. and so

Keith Waddell

or say much continues has assumes pretty it quarters. glide threX So guidance when our stabilize? to the expect -- that is All we two been continued last path as do the could in short-term I it

will, we're So not if term. short stabilization, expecting you in very the

macro anything. they b, certainly fortune much as stabilize, or I'm that's a, a As a question And to not expert as macro, when teller.

not great much through out have here. what managed answer downturns than severe so when. And is to We've the I a of in seen on sure more I've many that said we've past now, I'm it All other side. and the said come I've a times we've couple

significantly top on EPS more very clients, SMB that not shares peaks workload in many to that cycle, so new look very to same it single the line, the significantly line. the whenever more we react our and again. it demand part, peaks at every higher the it of peaks things negative load to staff, those We've our talked with fewer Many stabilize only happen clients up contractors, as spring other same short got at begin as about. bottom begin participate as at and to made and over ultimately happened new factors the clouds very and are SMB in stabilize the term we've that quickly expect does factors spread side. we'll That's the We've line internal

George Tong

have Got varying it. on based across and functional business helpful. you market That's And exposure. performance lines end then

conversely, the in would you in say then the would As downside business, you quarter? most surprise look some And across we surprise quarter? those saw the you of the where see upside

Keith Waddell

our a Well, to professionals, full-time we grow surprise, that the upside engagement wasn't sequentially. necessarily continue

continue year-on-year. We to grow

one pool the of of The recruiting people hand, have Our a you full-time fact from we're variety they job. security full-time the consultants, a already semi broad because job, people of but clients the very the that they want clients they, if will. love love love a these on that engagements different

XX% X% range of the the be it about engagement to full-time FTEP, mix the mix level, professionals of professionals to of call the our continue From from skill we those them, and higher we talent skews to a to a of higher and as given grow, business, do side, more happy more So that. continue the total. couldn't practice contract full-time the well, workforce the engagement on group's

it new. customer administrative seeing clients the and gotten That's support the been more group has most as cautious. yet not our unexpected. have downside, We're On again. That's not impacted

You boost see be see most a help in a that little the unusual with them. impacted. it Hopefully, on talked numbers. from bit to open But not a again, enrollment, them will I it's as about, of

George Tong

you. it. Got Thank helpful. Very

Keith Waddell

question. was very you last That our Okay. much. Thank

Operator

this teleconference. And concludes Thank you. today's

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

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

Robert Half International (RHI) 25 Jul 232023 Q2 Earnings call transcript