Skip to content
    RHI
    Earnings call· Jun 2026(Q2 FY26)

    ROBERT HALF INC. RHI

    Jul 23, 2026 Source

    Executive summary

    Robert Half Q2 FY26 — Talent Solutions Shows Recovery Amidst Protiviti Headwinds

    The company reported a mixed Q2 FY26, with Talent Solutions showing its third consecutive quarter of sequential adjusted revenue growth and a return to year-over-year growth in permanent placement. However, Protiviti faced significant headwinds from shifts in the U.S. financial services regulatory environment, leading to a decline in revenues and necessitating cost actions. Management remains optimistic about the recovery trajectory for Talent Solutions and Protiviti's ability to return to growth, driven by strong technology consulting demand and strategic adjustments.

    Highlights

    5

    • Talent Solutions delivered its third consecutive quarter of sequential revenue growth on an adjusted basis.

    • Permanent placement operations posted adjusted year-on-year revenue growth of 2.5%.

    • Global Enterprise revenues and earnings exceeded the midpoint of guidance.

    • Technology was the strongest performing practice group within Contract Talent Solutions, achieving adjusted YoY revenue growth of 2.3%.

    • Protiviti's technology consulting practice group reported the best revenue quarter in its history.

    Concerns

    5

    • Global Enterprise revenues were down 2% on a reported basis and 3% on an adjusted basis YoY.

    • Net income per share was $0.26, down from $0.41 in Q2 FY25, impacted by Protiviti cost actions.

    • Global Protiviti revenues were down 5% on an adjusted basis YoY, with U.S. down 6% and non-U.S. down 3%.

    • Protiviti's adjusted gross margin was 18.5%, down from 22.3% in Q2 FY25, impacted by $7 million in severance costs.

    • Contract Talent Solutions bill rate growth decelerated to 2.3% YoY in Q2, compared to 2.6% in Q1.

    Guidance & targets

    19
    CategoryTargetConfidence
    Q3 FY26 Revenues
    $1.31 billion to $1.41 billion
    high materiality
    High
    Q3 FY26 Income per share
    $0.43 to $0.53
    high materiality
    High
    Q3 FY26 Talent Solutions adjusted revenue growth
    up 1% to 5%
    medium materiality
    High
    Q3 FY26 Protiviti adjusted revenue growth
    down 4% to 8%
    medium materiality
    High
    Q3 FY26 Overall adjusted revenue growth
    down 2% to up 2%
    high materiality
    High
    Q3 FY26 Contract Talent adjusted gross margin percentage
    38% to 40%
    medium materiality
    High
    Q3 FY26 Protiviti adjusted gross margin percentage
    23% to 25%
    medium materiality
    High
    Q3 FY26 Overall adjusted gross margin percentage
    38% to 40%
    high materiality
    High
    Q3 FY26 Talent Solutions adjusted SG&A as percentage of revenue
    42% to 44%
    medium materiality
    High
    Q3 FY26 Protiviti adjusted SG&A as percentage of revenue
    16% to 18%
    medium materiality
    High
    Q3 FY26 Overall adjusted SG&A as percentage of revenue
    33% to 35%
    high materiality
    High
    Q3 FY26 Talent Solutions adjusted operating income as percentage of revenue
    3% to 5%
    medium materiality
    High
    Q3 FY26 Protiviti adjusted operating income as percentage of revenue
    6% to 8%
    medium materiality
    High
    Q3 FY26 Overall adjusted operating income as percentage of revenue
    4% to 6%
    high materiality
    High
    Q3 FY26 Tax rate
    33% to 35%
    low materiality
    High
    Q3 FY26 Shares outstanding
    $100 million to $101 million
    low materiality
    High
    FY26 Capital expenditures and capitalized cloud computing costs
    $50 million to $70 million
    medium materiality
    High
    Q3 FY26 Capital expenditures and capitalized cloud computing costs
    $10 million to $20 million
    low materiality
    High
    Q4 FY26 Operating margins
    0.5 to 1.5 percentage points lower sequentially than third quarter margins
    medium materiality
    Medium

    Segment performance

    7
    SegmentRevenueYoYQoQMargin
    Global Enterprise
    Global Enterprise revenues and earnings exceeded the midpoint of the second quarter guidance.
    		$1.336B-2% reported, -3% adjusted——
    Talent Solutions
    Delivered its third consecutive quarter of sequential revenue growth on an adjusted basis. Technology was the strongest performing practice group.
    Permanent placement revenues as % of consolidated Talent Solutions revenues: 13.6% (vs 13.1% in Q2 FY25)Permanent placement adjusted year-on-year revenue growth: 2.5%Contract Talent Solutions gross margin: 39.1% (flat YoY)Overall gross margin: 47.4% (vs 47.1% in Q2 FY25)Technology practice group adjusted year-over-year revenue growth: 2.3%
    		—-2% adjustedsequential growth (adjusted)$29M adjusted operating income, 3.3% of revenues
    U.S. Talent Solutions
    Part of the overall Talent Solutions segment.
    		$660M-1%——
    Non-U.S. Talent Solutions
    Operations conducted in 18 countries outside the United States.
    		$205M-4%——
    Protiviti
    Results reflect ongoing shifts in the U.S. financial services regulatory environment. Technology consulting reported its best revenue quarter in history. Cost actions taken during the quarter included $7 million in severance costs.
    Gross margin: 13.5% (vs 19.7% in Q2 FY25)Adjusted gross margin: 18.5% (vs 22.3% in Q2 FY25)Risk and Compliance solutions as % of total Protiviti revenues: a little under 20%
    		$471M-5% adjusted—$10M adjusted operating income, 2.1% of revenues
    U.S. Protiviti
    Part of the overall Protiviti segment.
    		$373M-6%——
    Non-U.S. Protiviti
    Operations conducted in 27 countries outside the United States. Impacted by public sector engagements winding down in Germany and Belgium.
    		$98M-3%——

    Operational metrics

    21
    Dividend distributed per share
    $0.59
    Q2 FY26

    Cash dividend distributed to shareholders of record.

    Total cash outlay for dividend
    $59M
    Q2 FY26

    Total cash distributed for the Q2 FY26 dividend.

    Return on invested capital
    9%
    Q2 FY26

    Company-wide return on invested capital.

    Currency exchange rate impact on total revenues
    $7Mincrease
    Q2 FY26

    Positive impact of currency movements on reported year-over-year total revenues.

    Currency exchange rate impact on Talent Solutions revenues
    $6Mincrease
    Q2 FY26

    Positive impact of currency movements on reported year-over-year Talent Solutions revenues.

    Currency exchange rate impact on Protiviti revenues
    $1Mincrease
    Q2 FY26

    Positive impact of currency movements on reported year-over-year Protiviti revenues.

    Contract Talent Solutions bill rate growth
    2.3%YoY
    Q2 FY26

    Bill rates for Contract Talent Solutions increased year-over-year.

    Contract to hire revenues conversion
    3.4%flat YoY
    Q2 FY26

    Conversion rate of contract to hire revenues as a percentage of contract revenues.

    Protiviti severance costs
    $7M
    Q2 FY26

    One-time charge taken by Protiviti for cost actions.

    Protiviti annualized cost savings
    $45M
    annualized

    Annualized cost savings expected from actions taken by Protiviti, fully reflected in Q3 guidance.

    Enterprise SG&A costs as percentage of global revenues
    40.1%vs 37.1% in Q2 FY25
    Q2 FY26

    Reported SG&A costs relative to global revenues.

    Adjusted Enterprise SG&A costs as percentage of global revenues
    34.3%vs 33.8% in Q2 FY25
    Q2 FY26

    Adjusted SG&A costs relative to global revenues.

    Talent Solutions SG&A costs as percentage of revenues
    53%vs 49.2% in Q2 FY25
    Q2 FY26

    Reported SG&A costs relative to Talent Solutions revenues.

    Adjusted Talent Solutions SG&A costs as percentage of revenues
    44.1%flat YoY
    Q2 FY26

    Adjusted SG&A costs relative to Talent Solutions revenues.

    Protiviti SG&A costs as percentage of revenues
    16.4%vs 15.7% in Q2 FY25
    Q2 FY26

    Reported SG&A costs relative to Protiviti revenues.

    Adjusted operating income as percentage of revenues
    2.9%
    Q2 FY26

    Adjusted operating income for the entire company.

    Implied Days Sales Outstanding (DSO)
    55.4
    Q2 FY26

    Implied days sales outstanding at the end of the second quarter.

    Q3 FY26 Billing days
    64.6vs 64.2 in Q3 FY25
    Q3 FY26

    Number of billing days in the third quarter of 2026.

    Q4 FY26 Billing days
    61.1vs 64.6 in Q3 FY26
    Q4 FY26

    Number of billing days in the fourth quarter of 2026, impacted by November and December holidays.

    Q4 FY26 Revenue impact from extra lost billing day
    $20M
    Q4 FY26

    Estimated revenue impact from one additional lost billing day in Q4 FY26 due to calendar nuances.

    Full-time engagement professionals as percentage of total
    15%cycle low
    current

    Current mix of full-time engagement professionals, noted as a cycle low with potential for margin accretion if it increases.

    Industry KPIs

    1
    MetricValueDetails
    Days adjusted organic revenue growth-3%%

    Risks & headwinds

    5
    Geopolitical and macroeconomic uncertaintyongoing

    Inflation remains a key concern, including potential effects of escalating tensions in the Middle East.

    Mitigation: Clients remain resilient and focus on initiatives that drive productivity, growth, and long-term competitiveness.

    U.S. financial services regulatory environment shifts impacting ProtivitiQ2 FY26 and continuing into Q4 FY26

    Marked decline in new enforcement actions and easing of prior enforcement requirements, leading to fewer large-scale regulatory and remediation projects.

    Mitigation: Protiviti acted decisively to align resource base with shifting client demand, including $7 million in severance costs and $45 million in annualized savings. Investing in capabilities for operational efficiency, productivity, and advanced technologies.

    International Protiviti weaknessQ2 FY26

    Non-U.S. Protiviti revenues down 3% YoY, particularly in Germany and Belgium.

    Mitigation: Caused by large public sector engagements winding down and macro conditions (higher inflation, energy prices) making backfill difficult, not related to FSI issues.

    Competitive pricing environment for Protivitiongoing

    Market is consistently competitive, with Big 4 firms pricing aggressively in markets where they have capacity.

    Mitigation: Not explicitly stated, but implies focus on value and differentiation.

    Q4 billing day impactQ4 FY26

    Q4 has 61.1 billing days compared to 64.6 in Q3, a sequential decrease of approximately 5%. An extra lost billing day this year costs about $20 million in revenue.

    Mitigation: Typically partially offset by seasonal growth in average same-day billings (historically low single digits). Lower sequential revenues result in negative operating leverage.

    What to watch in Q3 FY26

    5

    Protiviti's return to growth

    not-too-distant future
    CurrentGlobal Protiviti revenues down 5% adjusted YoY in Q2 FY26
    TargetPositive adjusted revenue growth

    Why it matters

    Protiviti's performance is a key driver of overall company results, and its return to growth is essential for the investment thesis given current headwinds.

    We feel great about Protiviti's future and its ability to return to growth.

    Q&A highlights

    5

    Asked for more details on the Protiviti cost actions, the percentage of Protiviti's revenue from Risk and Compliance, and if technology projects were being delayed.

    Management clarified that severance costs increased to $7 million (from $5 million previously discussed) due to a larger international zone realignment, with proportionate savings. Risk and Compliance is under 20% of Protiviti's revenue. Technology consulting was not impacted by project delays and had its best revenue quarter ever.

    “Risk and compliance is a little under 20%, Protiviti's total revenues as to project delays in technology, we're happy to report that our -- the Protiviti's technology consulting practice group reported the best revenue quarter in its history and clearly was not impacted by project delays.”

    asked by Mark Marcon · answered by M. Waddell

    2 min read5 chapters

    Detailed Narrative

    01

    Talent Solutions Performance & Recovery

    Talent Solutions demonstrated continued sequential revenue growth on an adjusted basis for the third consecutive quarter, with permanent placement operations returning to year-over-year growth of 2.5%. The Technology practice group was a standout performer, achieving 2.3% adjusted year-over-year revenue growth. Client engagement remained robust, with increasing job orders and project activity, particularly in technology modernization, data, cybersecurity, and IT infrastructure, indicating steady progress in client interactions and activity.

    02

    Protiviti Headwinds & Strategic Actions

    Protiviti's results were significantly impacted by ongoing shifts in the U.S. financial services regulatory environment, leading to a 5% adjusted year-over-year revenue decline globally. This included a marked decline in new enforcement actions and easing of prior requirements, particularly affecting the Risk and Compliance solutions practice. In response, Protiviti undertook decisive cost actions in Q2, including $7 million in severance costs, which are expected to generate $45 million in annualized savings, fully reflected in Q3 guidance. Technology consulting, however, achieved its best revenue quarter in history, and the overall pipeline remains strong.

    03

    Labor Market Dynamics & AI Impact

    The labor market for specialized talent remains tight, with employment levels healthy and job openings outpacing historical norms. Professionals with in-demand skills continue to prioritize flexibility, opportunities, and competitive compensation. Artificial intelligence is seen as complementing, not replacing, human work, driving demand for candidates with both deep domain expertise and AI fluency. The rapid adoption of generative AI has increased application volumes, making candidate evaluation more complex and reinforcing the value of Robert Half's specialized recruiting expertise.

    04

    Financial Highlights & Capital Allocation

    The company generated $109 million in cash flow from operations during the quarter and distributed a $0.59 per share cash dividend totaling $59 million. Return on invested capital for the company was 9%. The effective tax rate increased to 35% from 33% a year ago due to lower tax credits and increased impact of nondeductible expenses. Accounts receivable stood at $821 million, with implied days sales outstanding (DSO) at 55.4 days.

    05

    Outlook & Strategic Positioning

    Management expressed optimism about the business trajectory, noting that clients continue to prioritize critical investments in technology, business transformation, and growth. The company believes it is well-positioned to help clients secure specialized talent and consulting expertise as hiring activity recovers. The strategic use of contract professionals through Talent Solutions remains a key differentiator, enhancing client service and reinforcing enterprise-wide competitive advantage.

    AI-generated summary of the company’s earnings call. Not investment advice.