Robert Half Inc (RHI) Q3 2024 Earnings Call Highlights: Navigating Revenue Declines with ...

GuruFocus News
4 min read

In This Article:

  • Revenue: $1.465 billion, down 6% year-over-year on an as-reported basis, down 8% on an as-adjusted basis.

  • Net Income Per Share: $0.64, compared to $0.90 in the prior year.

  • Cash Flow from Operations: $130 million.

  • Dividend: $0.53 per share, total cash outlay of $54 million, 10.4% higher than the prior year.

  • Share Repurchase: Approximately 800,000 shares acquired for $49 million.

  • Return on Invested Capital: 18% in the third quarter.

  • Protiviti Revenue: $511 million, up 5% year-over-year on an as-adjusted basis.

  • Gross Margin: Contract talent solutions gross margin at 38.9%, overall talent solutions gross margin at 46.8%, Protiviti gross margin at 24.6%.

  • SG&A Costs: 34.9% of global revenues, adjusted for deferred compensation investment income offset at 33.3%.

  • Operating Income: $61 million, adjusted segment income at $90 million.

  • Tax Rate: 31% for the third quarter.

  • Accounts Receivable: $885 million, with days sales outstanding at 54.4 days.

Release Date: October 22, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Protiviti reported strong results with sequential and year-over-year revenue growth, particularly in regulatory risk and compliance and internal audit solutions.

  • Cash flow from operations was $130 million, and the company distributed a $0.53 per share cash dividend, marking a 10.4% increase from the prior year.

  • Robert Half Inc (NYSE:RHI) acquired approximately 800,000 shares during the quarter, indicating confidence in the company's future prospects.

  • The company has maintained a stable and consistent weekly revenue trend for the past 12 to 14 weeks, the longest period of stability in two years.

  • Robert Half Inc (NYSE:RHI) continues to invest in technology and innovation, enhancing its proprietary recruiters plus AI strategy to add significant value to clients.

Negative Points

  • Company-wide revenues were down 6% from last year's third quarter on an as-reported basis and down 8% on an as-adjusted basis.

  • Net income per share decreased to $0.64 from $0.90 in the third quarter of the previous year.

  • Talent solutions revenues were down 13% year over year, both in the US and internationally.

  • Gross margin for contract talent solutions decreased to 38.9% from 39.8% in the previous year.

  • Enterprise SG&A costs increased to 34.9% of global revenues compared to 31.8% in the same quarter last year, indicating higher operational expenses.

Q & A Highlights

Q: Have new orders for contract staffing picked up in recent weeks at Robert Half? A: Keith Waddell, CEO: We've had stable and consistent weekly results for the last 14 weeks, which is the longest period of flatness in the past two years. This is an improvement from the previous trend of declining results, indicating a modest pickup in contract staffing orders.

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