Robert Half International (RHI, Financial) announced its first-quarter financial results, revealing revenues that fell short of market expectations. The company reported revenue of $1.35 billion for Q1, missing the consensus forecast of $1.41 billion. Compared to the previous year, global enterprise revenues declined by 8% on a reported basis and 6% when adjusted.
The company's performance has been affected by a decrease in business confidence, attributed to rising economic uncertainties linked to U.S. trade policies and other regulatory developments. This has led to more cautious behavior among clients and job seekers, with prolonged decision-making processes and reduced hiring activity and initiation of new projects.
Despite these challenges, CEO M. Keith Waddell expressed confidence in the company's ability to leverage emerging opportunities. He highlighted the strength of Robert Half's brand, workforce, technology, and its dual-focus business model, which integrates professional staffing and business consulting services, as key components in addressing clients' evolving talent and consulting needs.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Robert Half Inc (RHI, Financial) is $58.83 with a high estimate of $80.00 and a low estimate of $46.00. The average target implies an upside of 26.66% from the current price of $46.45. More detailed estimate data can be found on the Robert Half Inc (RHI) Forecast page.
Based on the consensus recommendation from 13 brokerage firms, Robert Half Inc's (RHI, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Robert Half Inc (RHI, Financial) in one year is $68.85, suggesting a upside of 48.22% from the current price of $46.45. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Robert Half Inc (RHI) Summary page.
Key Business Developments
Release Date: January 29, 2025
- Global Enterprise Revenues: $1.382 billion, down 6% year-over-year on an as-reported basis.
- Net Income Per Share: $0.53, compared to $0.83 in the previous year.
- Cash Flow from Operations: $155 million.
- Cash Dividend: $0.53 per share, totaling $54 million, a 10.4% increase from the prior year.
- Share Repurchase: Approximately 1 million shares acquired for $77 million.
- Return on Invested Capital: 15% for the fourth quarter.
- U.S. Talent Solutions Revenues: $686 million, down 11% year-over-year.
- Non-U.S. Talent Solutions Revenues: $208 million, down 14% year-over-year.
- Protiviti Global Revenues: $488 million, up 5% year-over-year.
- Protiviti U.S. Revenues: $396 million, up 6% year-over-year.
- Protiviti Non-U.S. Revenues: $92 million, flat year-over-year.
- Contract Talent Solutions Gross Margin: 39.1%, compared to 39.7% in the previous year.
- Overall Talent Solutions Gross Margin: 46.4%, compared to 46.9% in the previous year.
- Protiviti Gross Margin: 24.9%, compared to 23.9% in the previous year.
- SG&A Costs: 34.1% of global revenues, compared to 35.1% in the previous year.
- Operating Income: $65 million.
- Fourth Quarter Tax Rate: 28%, compared to 27% in the previous year.
- Accounts Receivable: $772 million with a DSO of 50.5 days.
- First Quarter 2025 Revenue Guidance: $1.35 billion to $1.45 billion.
- First Quarter 2025 Income Per Share Guidance: $0.31 to $0.41.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Protiviti reported year-on-year revenue growth for the second consecutive quarter, with a 5% increase globally.
- Cash flow from operations was strong at $155 million, and the company distributed a $0.53 per share cash dividend, marking a 10.4% increase from the previous year.
- Robert Half Inc (RHI, Financial) repurchased approximately 1 million shares during the quarter, indicating confidence in the company's valuation.
- The company maintained a return on invested capital of 15% in the fourth quarter.
- Protiviti's collaboration with talent solutions has been a significant competitive advantage, with contractor-sourced revenues up 18%.
Negative Points
- Global enterprise revenues decreased by 6% on a reported basis and 7% on an adjusted basis compared to the previous year.
- Net income per share dropped to $0.53 from $0.83 in the same quarter last year.
- U.S. talent solutions revenues fell by 11%, and non-U.S. talent solutions revenues decreased by 14% year over year.
- Contract talent solutions gross margin declined to 39.1% from 39.7% in the previous year.
- The company experienced a decrease in permanent placement revenues, which were down 6% in December compared to the previous year.
