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 (RHI, Financial) 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 (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.
Q: Can you discuss the recent performance and future outlook for Protiviti?
A: Keith Waddell, CEO: Protiviti saw strong results with sequential and year-over-year revenue growth. However, a couple of large projects are winding down, which may impact short-term growth. Despite this, Protiviti has a strong backlog and pipeline, and we expect continued year-on-year revenue growth in the fourth quarter.
Q: Are you seeing any impact from Gen AI on finance and accounting positions?
A: Keith Waddell, CEO: Currently, we see very little impact from Gen AI on finance and accounting positions. Historically, we've grown through more significant technology cycles, such as the automation of spreadsheets and ERP systems, which were more impactful than Gen AI is expected to be.
Q: How is the return to office trend affecting hiring opportunities?
A: Keith Waddell, CEO: At higher skill levels, there is still demand for hybrid and remote roles. However, at the operational and transactional level, there is a preference for on-site work, and clients often pay a premium to compensate for commute and other costs.
Q: What are the expectations for white-collar hiring trends in the fourth quarter?
A: Keith Waddell, CEO: We have seen 14 consecutive weeks of flatness in white-collar hiring trends, which is an improvement from previous declines. Our guidance for the fourth quarter is conservative, assuming a low single-digit sequential decline, with perm placement facing more volatility due to seasonal factors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
