Robert Half Q2 Revenue Slips 2%, Operating Loss Widens on Deferred Comp Charge
RHI sits 83% above its 52-week low of $21.83 on light trading volume (0.4× avg).
Summary
Robert Half's Q2 revenue fell 2% to $1.34B, with adjusted operating income down 35%. Protiviti segment income dropped 70%. A $101M non-cash deferred comp charge distorted reported results. Cash reserves declined, and a key legal liability was established in the Gentry class action.
Key Events · Earnings and Guidance · RHI
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Revenue Down 2%, EPS Misses
Second-quarter revenue slipped 2% year-over-year to $1.336 billion, while diluted EPS came in at $0.26 compared with $0.41 a year ago. Adjusted operating income fell 35% to $39 million.
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Protiviti Segment Income Plunges 70%
A shift away from large regulatory remediation projects and cost reduction charges drove Protiviti segment income down to $9.9 million from $32.5 million. Adjusted gross margin contracted to 18.5% from 22.3%.
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Non-Cash Deferred Comp Charge Distorts Results
A $100.9 million non-cash charge from investments held in employee deferred compensation trusts created a reported operating loss of $62 million. This is fully offset by a corresponding increase in plan obligations and has no cash impact.
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Cash Reserves Decline, Operating Cash Flow Turns Negative
Cash and equivalents fell to $324.7 million from $464.4 million at year-end. Operating activities used $3.6 million in cash during the first half, compared to $60 million provided a year ago.
Analysis · RHI · Trade & Services
Robert Half's second quarter showed continued revenue softness, with a 2% decline to $1.34 billion, but the headline operating loss of $62 million is misleading — it includes a $101 million non-cash charge tied to deferred compensation plan assets that is fully offset elsewhere. On an adjusted basis, operating income was $39 million, down 35% from last year. The real concern is Protiviti, where segment income plunged 70% as large regulatory remediation engagements dried up. Cash reserves dropped $140 million from year-end, and operating cash flow turned negative. The Gentry wage-and-hour class action took a negative turn with a liability finding, though damages won't be set until May 2027. The dividend was maintained at $0.59, signaling confidence in liquidity despite the earnings dip.
At the time of this filing, RHI was trading at $40.01 on NYSE in the Trade & Services sector, with a market capitalization of approximately $4.1B. The 52-week trading range was $21.83 to $42.25. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.