ROBERT HALF INC

Previous wording

During the first half of 2024, service revenues were $2.95 billion, a decrease of 12.1% from the prior year. Net income was $132 million and diluted net income per share was $1.27.

Current wording

During the first three quarters of 2024, service revenues were $4.41 billion, a decrease of 10.3% from the prior year. Net income was $197 million, and diluted net income per share was $1.91.

Previous wording

Demand for the Company’s contract talent solutions, permanent placement talent solutions, and Protiviti is largely dependent upon general economic and labor trends, both domestically and abroad. The U.S. real gross domestic product increased 2.8% during the first half of 2024, while the unemployment rate increased from 3.7% for December 2023 to 4.1% at the end of the second quarter of 2024. Although recent metrics are modestly off their peaks, global labor markets remain tight and the scarcity of talent persists. In the U.S., unemployment stands near a 50-year low and remains even lower for those with a college degree, where the rate is 2.4%. However, the urgency and velocity of the demand is impacted by the prolonged period of macroeconomic uncertainty, which has impacted consumer confidence. Client budgets remain constrained, and candidates are reluctant to change jobs. This subdues short-term demand and elongates sales cycles. However, job openings remain elevated and are indicative of pent-up future demand.

Current wording

Demand for the Company’s contract talent solutions, permanent placement talent solutions, and Protiviti is largely dependent upon general economic and labor trends, both domestically and abroad. The U.S. real gross domestic product increased 2.8% during the first three quarters of 2024, while the unemployment rate increased from 3.7% for December 2023 to 4.1% at the end of the third quarter of 2024. Although sales cycles are still elongated, job openings remain significantly above historical averages, indicating substantial pent-up demand for talent. While the tightness of the labor supply has eased somewhat, the unemployment rate in the U.S. for those with a college degree is still only 2.3%, with rates for many in-demand accounting, finance and IT positions even lower. The Company is confident about its ability to weather the current global macroeconomic environment and its growth prospects as the macro landscape improves.

Previous wording

The Company monitors various economic indicators and business trends in all of the countries in which it operates to anticipate demand for the Company’s services. These trends are evaluated to determine the appropriate level of investment, including personnel, which will best position the Company for success in the current and future global macroeconomic environment. The Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth trends and productivity metrics. Visibility into future revenues is limited not only due to the dependence on macroeconomic and labor market conditions noted above, but also because of the relatively short duration of the Company’s client engagements. Accordingly, the Company’s headcount and other investments are typically assessed on at least a quarterly basis. During the first half of 2024, the Company decreased headcount for its contract talent solutions, while the full-time headcount for its permanent placement talent solutions remained flat, when compared to prior year-end levels. In addition, the full-time headcount for Protiviti increased when compared to prior year-end levels.

Current wording

The Company monitors various economic indicators and business trends in all of the countries in which it operates to anticipate demand for the Company’s services. These trends are evaluated to determine the appropriate level of investment, including personnel, which will best position the Company for success in the current and future global macroeconomic environment. The Company’s investments in headcount are typically structured to proactively support and align with expected revenue growth trends and productivity metrics. Visibility into future revenues is limited not only due to the dependence on macroeconomic and labor market conditions noted above, but also because of the relatively short duration of the Company’s client engagements. Accordingly, the Company’s headcount and other investments are typically assessed on at least a quarterly basis. During the first three quarters of 2024, the Company decreased headcount for its contract talent solutions and permanent placement talent solutions segments, when compared to prior year-end levels. In addition, the full-time headcount for Protiviti increased when compared to prior year-end levels.

Previous wording

The Company’s most critical accounting policies and estimates are those that involve subjective decisions or assessments and are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. There were no material changes to the Company’s critical accounting policies or estimates for the six months ended June 30, 2024.

Current wording

The Company’s most critical accounting policies and estimates are those that involve subjective decisions or assessments and are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. There were no material changes to the Company’s critical accounting policies or estimates for the nine months ended September 30, 2024.

Previous wording

The Company analyzes its operating results for three reportable segments: contract talent solutions, permanent placement talent solutions, and Protiviti. The contract talent solutions and permanent placement talent solutions segments provide engagement professionals and full-time personnel, respectively, for finance and accounting, technology, marketing and creative, legal, administrative and customer support, and executive searches. The Protiviti segment provides internal audit, risk, business, and technology consulting solutions.

Current wording

The Company analyzes its operating results for three reportable segments: contract talent solutions, permanent placement talent solutions, and Protiviti. The contract talent solutions and permanent placement talent solutions segments provide engagement professionals and full-time personnel, respectively, for finance and accounting, technology, marketing and creative, legal, administrative and customer support, and executive search. The Protiviti segment provides internal audit, risk, business, and technology consulting solutions.

Previous wording

The Company’s talent solutions segments conduct operations through offices in the U.S. and 17 foreign countries, while Protiviti has offices in the U.S. and 13 foreign countries.

Current wording

The Company’s talent solutions segments conduct operations through offices in the U.S. and 17 other countries, while Protiviti has offices in the U.S. and 13 other countries.

Previous wording

Service Revenues. The Company’s revenues were $1.47 billion for the three months ended June 30, 2024, a decrease of 10.2% compared to $1.64 billion for the three months ended June 30, 2023. Revenues from U.S. operations decreased 9.6% to $1.15 billion (78.1% of total revenue) for the three months ended June 30, 2024, compared to $1.27 billion (77.6% of total revenue) for the three months ended June 30, 2023. Revenues from international operations decreased 12.2% to $323 million (21.9% of total revenue) for the three months ended June 30, 2024, compared to $368 million (22.4% of total revenue) for the three months ended June 30, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Current wording

Service Revenues. The Company’s revenues were $1.47 billion for the three months ended September 30, 2024, a decrease of 6.3% compared to $1.56 billion for the three months ended September 30, 2023. Revenues from U.S. operations decreased 5.2% to $1.15 billion (78.2% of total revenue) for the three months ended September 30, 2024, compared to $1.21 billion (77.3% of total revenue) for the three months ended September 30, 2023. Revenues from international operations decreased 10.2% to $319 million (21.8% of total revenue) for the three months ended September 30, 2024, compared to $355 million (22.7% of total revenue) for the three months ended September 30, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Previous wording

Contract talent solutions revenues were $855 million for the three months ended June 30, 2024, decreasing by 14.5% compared to revenues of $1.00 billion for the three months ended June 30, 2023. Key drivers of contract talent solutions revenues include average hourly bill rates and the number of hours worked by the Company’s engagement professionals on client engagements. The decrease in contract talent solutions revenues for the three months ended June 30, 2024, was primarily due to a 14.8% decrease in the number of hours worked by the Company’s engagement professionals, partially offset by a 1.1% increase in average bill rates. On an as adjusted basis, contract talent solutions revenues decreased 14.4% for the second quarter of 2024, compared to the second quarter of 2023. In the U.S., revenues in the second quarter of 2024 decreased 15.7% on an as reported basis, and decreased 15.8% on an as adjusted basis, compared to the second quarter of 2023. International revenues for the second quarter of 2024 decreased 10.0% on an as reported basis, and decreased 9.4% on an as adjusted basis compared to the second quarter of 2023.

Current wording

Contract talent solutions revenues were $831 million for the three months ended September 30, 2024, decreasing by 11.9% compared to revenues of $943 million for the three months ended September 30, 2023. Key drivers of contract talent solutions revenues include average hourly bill rates and the number of hours worked by the Company’s engagement professionals on client engagements. The decrease in contract talent solutions revenues for the three months ended September 30, 2024, was primarily due to a 12.8% decrease in the number of hours worked by the Company’s engagement professionals, partially offset by a 1.4% increase in average bill rates. On an as adjusted basis, contract talent solutions revenues decreased 13.2% for the third quarter of 2024, compared to the third quarter of 2023. In the U.S., revenues in the third quarter of 2024 decreased 12.4% on an as reported basis, and decreased 13.7% on an as adjusted basis, compared to the third quarter of 2023. International revenues for the third quarter of 2024 decreased 10.6% on an as reported basis, and decreased 11.7% on an as adjusted basis compared to the third quarter of 2023.

Previous wording

Permanent placement talent solutions revenues were $131 million for the three months ended June 30, 2024, decreasing by 12.2% compared to revenues of $149 million for the three months ended June 30, 2023. Key drivers of permanent placement talent solutions revenues consist of the number of candidate placements and average fees earned per placement. The decrease in permanent placement talent revenues for the three months ended June 30, 2024, was due to a 13.4% decrease in the number of placements, partially offset by a 1.2% increase in average fees earned per placement. On an as adjusted basis, permanent placement talent solutions revenues decreased 12.0% for the second quarter of 2024, compared to the second quarter of 2023. In the U.S., revenues for the second quarter of 2024 decreased 11.5% on an as reported basis, and decreased 11.7% on an as adjusted basis, compared to the second quarter of 2023. International revenues for the second quarter of 2024 decreased 13.8% on an as reported basis and decreased 13.0% on an as adjusted basis, compared to the second quarter of 2023. Historically, demand for permanent placement talent solutions is even more sensitive to economic and labor market conditions than demand for contract talent solutions and this is expected to continue.

Current wording

Permanent placement talent solutions revenues were $123 million for the three months ended September 30, 2024, decreasing by 11.9% compared to revenues of $140 million for the three months ended September 30, 2023. Key drivers of permanent placement talent solutions revenues consist of the number of candidate placements and average fees earned per placement. The decrease in permanent placement talent revenues for the three months ended September 30, 2024, was due to a 13.6% decrease in the number of placements, partially offset by a 1.7% increase in average fees earned per placement. On an as adjusted basis, permanent placement talent solutions revenues decreased 13.2% for the third quarter of 2024, compared to the third quarter of 2023. In the U.S., revenues for the third quarter of 2024 decreased 9.0% on an as reported basis, and decreased 10.4% on an as adjusted basis, compared to the third quarter of 2023. International revenues for the third quarter of 2024 decreased 18.6% on an as reported basis and decreased 19.8% on an as adjusted basis, compared to the third quarter of 2023. Historically, demand for permanent placement talent solutions is even more sensitive to economic and labor market conditions than demand for contract talent solutions, and this is expected to continue.

Previous wording

Protiviti revenues were $487 million for the three months ended June 30, 2024, decreasing by 0.9% compared to revenues of $491 million for the three months ended June 30, 2023. Key drivers of Protiviti revenues are the billable hours worked by consultants on client engagements and average hourly bill rates. The decrease in Protiviti revenues for the three months ended June 30, 2024, was due to a 1.5% decrease in billable hours, partially offset by a 0.6% increase in average hourly bill rates. On an as adjusted basis, Protiviti revenues decreased 0.9% for the second quarter of 2024, compared to the second quarter of 2023. In the U.S., revenues in the second quarter of 2024 increased 3.3% on an as reported basis, and increased 3.1% on an as adjusted basis, compared to the second quarter of 2023. International revenues for the second quarter of 2024 decreased 16.2% on an as reported basis and decreased 15.9% on an as adjusted basis, compared to the second quarter of 2023.

Current wording

Protiviti revenues were $511 million for the three months ended September 30, 2024, increasing by 6.4% compared to revenues of $481 million for the three months ended September 30, 2023. Key drivers of Protiviti revenues are the billable hours worked by consultants on client engagements and average hourly bill rates. The increase in Protiviti revenues for the three months ended September 30, 2024, was due to a 4.4% increase in average hourly bill rates, and a 2.0% increase in billable hours. On an as adjusted basis, Protiviti revenues increased 4.5% for the third quarter of 2024, compared to the third quarter of 2023. In the U.S., revenues in the third quarter of 2024 increased 9.3% on an as reported basis, and increased 7.6% on an as adjusted basis, compared to the third quarter of 2023. International revenues for the third quarter of 2024 decreased 5.6% on an as reported basis and decreased 8.1% on an as adjusted basis, compared to the third quarter of 2023.

Previous wording

Gross Margin. The Company’s gross margin dollars were $577 million for the three months ended June 30, 2024, down 12.6% from $660 million for the three months ended June 30, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Current wording

Gross Margin. The Company’s gross margin dollars were $572 million for the three months ended September 30, 2024, down 10.8% from $641 million for the three months ended September 30, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Previous wording

Gross margin dollars for permanent placement talent solutions represent revenues less reimbursable expenses. Gross margin dollars for permanent placement talent solutions were $131 million for the three months ended June 30, 2024, down 12.2% from $149 million for the three months ended June 30, 2023. Because reimbursable expenses for permanent placement talent solutions are de minimis, the decrease in gross margin dollars is substantially explained by the decrease in revenues previously discussed.

Current wording

Gross margin dollars for permanent placement talent solutions represent revenues less reimbursable expenses. Gross margin dollars for permanent placement talent solutions were $123 million for the three months ended September 30, 2024, down 11.9% from $140 million for the three months ended September 30, 2023. Because reimbursable expenses for permanent placement talent solutions are de minimis, the decrease in gross margin dollars is substantially explained by the decrease in revenues previously discussed.

Previous wording

Gross margin dollars for Protiviti represent revenues less costs of services, which consist primarily of professional staff payroll, payroll taxes, benefit costs, and reimbursable expenses. The primary drivers of Protiviti’s gross margin are: i) the relative composition of and number of professional staff and their respective pay and bill rates; and ii) staff utilization, which is the relationship of time spent on client engagements in proportion to the total time available for the Company’s Protiviti staff. Gross margin dollars for Protiviti were $110 million for the three months ended June 30, 2024, down 2.5% from $112 million for the three months ended June 30, 2023. As a percentage of revenues, reported gross margin dollars for Protiviti were 22.5% in the second quarter of 2024, down from 22.9% in the second quarter of 2023. As a percentage of revenues, adjusted gross margin dollars for Protiviti were 23.2% in the second quarter of 2024, down from 24.0% in the second quarter of 2023. The year-over-year decrease in adjusted gross margin percentage was primarily due to the relative composition of and number of professional staff and their respective pay and bill rates

Current wording

Gross margin dollars for Protiviti represent revenues less costs of services, which consist primarily of professional staff payroll, payroll taxes, benefit costs, and reimbursable expenses. The primary drivers of Protiviti’s gross margin are: i) the relative composition of and number of professional staff and their respective pay and bill rates; and ii) staff utilization, which is the relationship of time spent on client engagements in proportion to the total time available for the Company’s Protiviti staff. Gross margin dollars for Protiviti were $126 million for both the three months ended September 30, 2024 and 2023. As a percentage of revenues, reported gross margin dollars for Protiviti were 24.6% in the third quarter of 2024, down from 26.2% in the third quarter of 2023. As a percentage of revenues, adjusted gross margin dollars for Protiviti were 25.8% in the third quarter of 2024, up from 25.6% in the third quarter of 2023.

Previous wording

(1)Changes in the Company’s deferred compensation obligations related to Protiviti operations are included in costs of services, while the related investment income is presented separately. The non-GAAP financial adjustments shown in the table above are to reclassify investment income from investments held in employee deferred compensation trusts to the same line item that includes the corresponding change in obligation. These adjustments have no impact on income before income taxes.

Current wording

(1)Changes in the Company’s deferred compensation obligations related to Protiviti operations are included in costs of services, while the related investment (income) loss is presented separately. The non-GAAP financial adjustments shown in the table above are to reclassify investment (income) loss from investments held in employee deferred compensation trusts to the same line item that includes the corresponding change in obligation. These adjustments have no impact on income before income taxes.

Previous wording

Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist primarily of staff compensation, advertising, variable overhead, depreciation, and occupancy costs. The Company’s reported selling, general and administrative expenses were $501 million for the three months ended June 30, 2024, decreasing by 7.6% from $542 million for the three months ended June 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses were 34.0% in the second quarter of 2024, up from 33.1% in the second quarter of 2023. The Company’s adjusted selling, general and administrative expenses were $488 million for the three months ended June 30, 2024, down 5.9% from $519 million for the three months ended June 30, 2023. As a percentage of revenues, adjusted selling, general and administrative expenses were 33.2% in the second quarter of 2024, up from 31.6% in the second quarter of 2023. Contributing factors for each reportable segment are discussed below in further detail.

Current wording

Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist primarily of staff compensation, advertising, variable overhead, depreciation, and occupancy costs. The Company’s reported selling, general and administrative expenses were $511 million for the three months ended September 30, 2024, increasing by 2.8% from $497 million for the three months ended September 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses were 34.9% in the third quarter of 2024, up from 31.8% in the third quarter of 2023. The Company’s adjusted selling, general and administrative expenses were $488 million for the three months ended September 30, 2024, down 4.0% from $508 million for the three months ended September 30, 2023. As a percentage of revenues, adjusted selling, general and administrative expenses were 33.3% in the third quarter of 2024, up from 32.5% in the third quarter of 2023. Contributing factors for each reportable segment are discussed below in further detail.

Previous wording

Selling, general and administrative expenses for contract talent solutions, on an as reported basis, were $309 million for the three months ended June 30, 2024, decreasing by 8.5% from $338 million for the three months ended June 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses for contract talent solutions were 36.1% in the second quarter of 2024, up from 33.8% in the second quarter of 2023. As a percentage of revenues, adjusted selling, general and administrative expenses for contract talent solutions were 34.9% in the second quarter of 2024, up from 31.8% in the second quarter of 2023, due primarily to negative leverage as revenues decreased as a result of economic conditions during the quarter.

Current wording

Selling, general and administrative expenses for contract talent solutions, on an as reported basis, were $318 million for the three months ended September 30, 2024, increasing by 3.7% from $307 million for the three months ended September 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses for contract talent solutions were 38.3% in the third quarter of 2024, up from 32.5% in the third quarter of 2023. As a percentage of revenues, adjusted selling, general and administrative expenses for contract talent solutions were 35.8% in the third quarter of 2024, up from 33.6% in the third quarter of 2023, due primarily to negative leverage as revenues decreased as a result of economic conditions during the quarter.

Previous wording

Selling, general and administrative expenses for permanent placement talent solutions were $116 million for the three months ended June 30, 2024, decreasing by 10.4% from $130 million for the three months ended June 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses for permanent placement talent solutions were 88.7% in the second quarter of 2024, up from 87.0% in the second quarter of 2023. As a percentage of revenues, adjusted selling, general and administrative expenses for permanent placement was 87.5% in the second quarter of 2024, up from 85.3% in the second quarter of 2023, due primarily to negative leverage as revenues decreased as a result of economic conditions during the quarter.

Current wording

Selling, general and administrative expenses for permanent placement talent solutions were $113 million for the three months ended September 30, 2024, decreasing by 5.0% from $119 million for the three months ended September 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses for permanent placement talent solutions were 92.0% in the third quarter of 2024, up from 85.3% in the third quarter of 2023. As a percentage of revenues, adjusted selling, general and administrative expenses for permanent placement were 89.9% in the third quarter of 2024, up from 86.2% in the third quarter of 2023, due primarily to negative leverage as revenues decreased as a result of economic conditions during the quarter.

Previous wording

Selling, general and administrative expenses for Protiviti were $149 million for the six months ended June 30, 2024, decreasing by 0.6% from $150 million for the six months ended June 30, 2023. As a percentage of revenues, selling, general and administrative expenses for Protiviti were 15.7% in the first half of 2024, up from 15.2% in the first half of 2023, due primarily to negative leverage as revenues decreased as a result of economic conditions.

Current wording

Selling, general and administrative expenses for Protiviti were $80 million for the three months ended September 30, 2024, increasing by 12.4% from $71 million for the three months ended September 30, 2023. As a percentage of revenues, selling, general and administrative expenses for Protiviti services were 15.6% in the third quarter of 2024, up from 14.7% in the third quarter of 2023, due primarily to restructuring charges incurred during the third quarter of 2024.

Previous wording

(1)Changes in the Company’s employee deferred compensation plan obligations related to talent solutions operations are included in selling, general and administrative expenses, while the related investment income is presented separately. The non-GAAP financial adjustments shown in the table above are to reclassify investment income from investments held in employee deferred compensation trusts to the same line item that includes the corresponding change in obligation. These adjustments have no impact on income before income taxes.

Current wording

(1)Changes in the Company’s employee deferred compensation plan obligations related to talent solutions operations are included in selling, general and administrative expenses, while the related investment (income) loss is presented separately. The non-GAAP financial adjustments shown in the table above are to reclassify investment (income) loss from investments held in employee deferred compensation trusts to the same line item that includes the corresponding change in obligation. These adjustments have no impact on income before income taxes.

Previous wording

Income from Investments Held in Employee Deferred Compensation Trusts. Under the Company’s employee deferred compensation plans, employees direct the investment of their account balances, and the Company invests amounts held in the associated investment trusts consistent with these directions. As realized and unrealized investment gains and losses occur, the Company’s employee deferred compensation plan obligations change and adjustments are recorded in selling, general and administrative expenses, or in the case of Protiviti, costs of services. This incremental expense is completely offset by investment income related to the employee deferred compensation trust. The value of the related investment trust assets also changes by the equal and offsetting amount, leaving no net costs to the Company. The Company’s income from investments held in employee deferred compensation trusts consists primarily of unrealized and realized gains and losses and dividend income from trust investments and is presented separately on the unaudited Condensed Consolidated Statements of Operations. The Company’s income from investments held in employee deferred compensation trusts was $16 million and $28 million for the three months ended June 30, 2024 and 2023, respectively. The income from trust investments during the second quarter of 2024 was due to positive market returns.

Current wording

(Income) Loss from Investments Held in Employee Deferred Compensation Trusts. Under the Company’s employee deferred compensation plans, employees direct the investment of their account balances, and the Company invests amounts held in the associated investment trusts consistent with these directions. As realized and unrealized investment gains and losses occur, the Company’s employee deferred compensation plan obligations change and adjustments are recorded in selling, general and administrative expenses, or in the case of Protiviti, costs of services. This incremental expense is completely offset by investment income related to the employee deferred compensation trust. The value of the related investment trust assets also changes by the equal and offsetting amount, leaving no net costs to the Company. The Company’s (income) loss from investments held in employee deferred compensation trusts consists primarily of unrealized and realized gains and losses, and dividend income from trust investments and is presented separately on the unaudited Condensed Consolidated Statements of Operations. The Company’s (income) loss from investments held in employee deferred compensation trusts was income of $29 million and a loss of $14 million for the three months ended September 30, 2024 and 2023, respectively. The income from trust investments during the third quarter of 2024 was due to positive market returns.

Previous wording

Income Before Income Taxes and Segment Income. The Company’s total income before income taxes was $96 million, or 6.6% of revenues, for the three months ended June 30, 2024, down from $151 million, or 9.2% of revenues, for the three months ended June 30, 2023. Combined segment income was $92 million, or 6.2% of revenues, for the three months ended June 30, 2024, down from $147 million, or 8.9% of revenues, for the three months ended June 30, 2023.

Current wording

Income Before Income Taxes and Segment Income. The Company’s total income before income taxes was $95 million, or 6.5% of revenues, for the three months ended September 30, 2024, down from $136 million, or 8.7% of revenues, for the three months ended September 30, 2023. Combined segment income was $90 million, or 6.2% of revenues, for the three months ended September 30, 2024, down from $130 million, or 8.3% of revenues, for the three months ended September 30, 2023.

Previous wording

Provision for income taxes. The provision for income taxes was 29.5% and 28.7% for the six months ended June 30, 2024 and 2023, respectively. The higher tax rate for 2024 can primarily be attributed to the impact of nondeductible expenses.

Current wording

Provision for income taxes. The provision for income taxes was 31.2% and 29.9% for the three months ended September 30, 2024 and 2023, respectively. The higher tax rate for 2024 can primarily be attributed to the impact of nondeductible expenses.

Previous wording

Service Revenues. The Company’s revenues were $2.95 billion for the six months ended June 30, 2024, a decrease of 12.1% compared to $3.36 billion for the six months ended June 30, 2023. Revenues from U.S. operations decreased 12.3% to $2.29 billion (77.7% of total revenue) for the six months ended June 30, 2024, compared to $2.61 billion (77.9% of total revenue) for the six months ended June 30, 2023. Revenues from international operations decreased 11.6% to $657 million (22.3% of total revenue) for the six months ended June 30, 2024, compared to $743 million (22.1% of total revenue) for the six months ended June 30, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Current wording

Service Revenues. The Company’s revenues were $4.41 billion for the nine months ended September 30, 2024, a decrease of 10.3% compared to $4.92 billion for the nine months ended September 30, 2023. Revenues from U.S. operations decreased 10.0% to $3.44 billion (77.9% of total revenue) for the nine months ended September 30, 2024, compared to $3.82 billion (77.7% of total revenue) for the nine months ended September 30, 2023. Revenues from international operations decreased 11.1% to $976 million (22.1% of total revenue) for the nine months ended September 30, 2024, compared to $1.10 billion (22.3% of total revenue) for the nine months ended September 30, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Previous wording

Contract talent solutions revenues were $1.74 billion for the six months ended June 30, 2024, decreasing by 15.6% compared to revenues of $2.07 billion for the six months ended June 30, 2023. Key drivers of contract talent solutions revenues include average hourly bill rates and the number of hours worked by the Company’s engagement professionals on client engagements. The decrease in contract talent solutions revenues for the six months ended June 30, 2024, was primarily due to a 16.5% decrease in the number of hours worked by the Company’s engagement professionals, partially offset by a 1.7% increase in average bill rates. On an as adjusted basis, contract talent solutions revenues in the first half of 2024 decreased 15.3% compared to the first half of 2023. In the U.S., revenues in the first half of 2024 decreased 17.4% on an as reported basis, and decreased 17.3% on as adjusted basis, compared to the first half of 2023. International revenues for the first half of 2024 decreased 9.2% on an as reported basis, and decreased 8.4% on an as adjusted basis, compared to the first half of 2023.

Current wording

Contract talent solutions revenues were $2.57 billion for the nine months ended September 30, 2024, decreasing by 14.5% compared to revenues of $3.01 billion for the nine months ended September 30, 2023. Key drivers of contract talent solutions revenues include average hourly bill rates and the number of hours worked by the Company’s engagement professionals on client engagements. The decrease in contract talent solutions revenues for the nine months ended September 30, 2024, was primarily due to a 15.3% decrease in the number of hours worked by the Company’s engagement professionals, partially offset by a 1.6% increase in average bill rates. On an as adjusted basis, contract talent solutions revenues in the first three quarters of 2024 decreased 14.7% compared to the first three quarters of 2023. In the U.S., revenues in the first three quarters of 2024 decreased 15.9% on an as reported basis, and decreased 16.2% on an as adjusted basis, compared to the first three quarters of 2023. International revenues for the first three quarters of 2024 decreased 9.6% on an as reported basis, and decreased 9.5% on an as adjusted basis, compared to the first three quarters of 2023.

Previous wording

Permanent placement talent solutions revenues were $256 million for the six months ended June 30, 2024, decreasing by 16.4% compared to revenues of $306 million for the six months ended June 30, 2023. Key drivers of permanent placement talent solutions revenues consist of the number of candidate placements and average fees earned per placement. The decrease in permanent placement staffing revenues for the six months ended June 30, 2024, was due to a 20.0% decrease in the number of placements, partially offset by a 3.6% increase in average fees earned per placement. On an as adjusted basis, permanent placement talent solutions revenues decreased 16.0% for the first half of 2024, compared to the first half of 2023. In the U.S., revenues for the first half of 2024 decreased 15.5% on an as reported basis, and decreased 15.3% on an as adjusted basis, compared to the first half of 2023. International revenues for the first half of 2024 decreased 18.6% on an as reported basis, and decreased 17.7% on an as adjusted basis, compared to the first half of 2023. Historically, demand for permanent placement talent solutions is even more sensitive to economic and labor market conditions than demand for contract talent solutions and this is expected to continue.

Current wording

Permanent placement talent solutions revenues were $379 million for the nine months ended September 30, 2024, decreasing by 15.0% compared to revenues of $446 million for the nine months ended September 30, 2023. Key drivers of permanent placement talent solutions revenues consist of the number of candidate placements and average fees earned per placement. The decrease in permanent placement staffing revenues for the nine months ended September 30, 2024, was due to an 18.0% decrease in the number of placements, partially offset by a 3.0% increase in average fees earned per placement. On an as adjusted basis, permanent placement talent solutions revenues decreased 15.1% for the first three quarters of 2024, compared to the first three quarters of 2023. In the U.S., revenues for the first three quarters of 2024 decreased 13.5% on an as reported basis, and decreased 13.8% on an as adjusted basis, compared to the first three quarters of 2023. International revenues for the first three quarters of 2024 decreased 18.6% on an as reported basis, and decreased 18.4% on an as adjusted basis, compared to the first three quarters of 2023. Historically, demand for permanent placement talent solutions is even more sensitive to economic and labor market conditions than demand for contract talent solutions and this is expected to continue.

Previous wording

Protiviti revenues were $951 million for the six months ended June 30, 2024, decreasing by 3.5% compared to revenues of $985 million for the six months ended June 30, 2023. Key drivers of Protiviti revenues are the billable hours worked by consultants on client engagements and average hourly bill rates. The decrease in Protiviti revenues for the six months ended June 30, 2024, was due to a 5.4% decrease in billable hours, partially offset by a 1.9% increase in average hourly bill rates. On an as adjusted basis, Protiviti revenues decreased 3.1% for the first half of 2024, compared to the first half of 2023. In the U.S., revenues in the first half of 2024 decreased 0.8% on an as reported basis, and decreased 0.6% on an as adjusted basis, compared to the first half of 2023. International revenues in the first half of 2024 decreased 13.8% on an as reported basis, and decreased 13.1% on an as adjusted basis, compared to the first half of 2023.

Current wording

Protiviti revenues were $1.46 billion for the nine months ended September 30, 2024, decreasing by 0.3% compared to revenues of $1.47 billion for the nine months ended September 30, 2023. Key drivers of Protiviti revenues are the billable hours worked by consultants on client engagements and average hourly bill rates. The decrease in Protiviti revenues for the nine months ended September 30, 2024, was due to a 3.0% decrease in billable hours, partially offset by a 2.7% increase in average hourly bill rates. On an as adjusted basis, Protiviti revenues decreased 0.6% for the first three quarters of 2024, compared to the first three quarters of 2023. In the U.S., revenues in the first three quarters of 2024 increased 2.5% on an as reported basis, and increased 2.1% on an as adjusted basis, compared to the first three quarters of 2023. International revenues in the first three quarters of 2024 decreased 11.2% on an as reported basis, and decreased 11.5% on an as adjusted basis, compared to the first three quarters of 2023.

Previous wording

A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue growth rates for the six months ended June 30, 2024, is presented in the following table:

Current wording

A reconciliation of the non-GAAP year-over-year revenue growth rates to the as reported year-over-year revenue growth rates for the nine months ended September 30, 2024, is presented in the following table:

Previous wording

Gross Margin. The Company’s gross margin dollars were $1.14 billion for the six months ended June 30, 2024, down 15.6% from $1.35 billion for the six months ended June 30, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Current wording

Gross Margin. The Company’s gross margin dollars were $1.71 billion for the nine months ended September 30, 2024, down 14.0% from $1.99 billion for the nine months ended September 30, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Previous wording

Gross margin dollars for contract talent solutions were $687 million for the six months ended June 30, 2024, down 16.5% from $822 million for the six months ended June 30, 2023. As a percentage of revenues, gross margin dollars for contract talent solutions were 39.4% in the first half of 2024, down from 39.8% in the first half of 2023. The decrease in gross margin percentage was primarily due to lower conversion revenues.

Current wording

Gross margin dollars for contract talent solutions were $1.01 billion for the nine months ended September 30, 2024, down 15.7% from $1.20 billion for the nine months ended September 30, 2023. As a percentage of revenues, gross margin dollars for contract talent solutions were 39.3% in the first three quarters of 2024, down from 39.8% in the first three quarters of 2023. The decrease in gross margin percentage was primarily due to higher fringe costs and lower pay-bill spreads.

Previous wording

Gross margin dollars for permanent placement talent solutions represent revenues less reimbursable expenses. Gross margin dollars for permanent placement talent solutions were $255 million for the six months ended June 30, 2024, down 16.4% from $305 million for the six months ended June 30, 2023. Because reimbursable expenses for permanent placement talent solutions are de minimis, the decrease in gross margin dollars is substantially explained by the decrease in revenues previously discussed.

Current wording

Gross margin dollars for permanent placement talent solutions represent revenues less reimbursable expenses. Gross margin dollars for permanent placement talent solutions were $378 million for the nine months ended September 30, 2024, down 15.0% from $445 million for the nine months ended September 30, 2023. Because reimbursable expenses for permanent placement talent solutions are de minimis, the decrease in gross margin dollars is substantially explained by the decrease in revenues previously discussed.

Previous wording

Gross margin dollars for Protiviti represent revenues less costs of services, which consist primarily of professional staff payroll, payroll taxes, benefit costs, and reimbursable expenses. The primary drivers of Protiviti’s gross margin are: i) the relative composition of and number of professional staff and their respective pay and bill rates; and ii) staff utilization, which is the relationship of time spent on client engagements in proportion to the total time available for the Company’s Protiviti staff. Gross margin dollars for Protiviti were $197 million for the six months ended June 30, 2024, down 11.2% from $222 million for the six months ended June 30, 2023. As a percentage of revenues, reported gross margin dollars for Protiviti were 20.8% in the first half of 2024, down from 22.6% in the first half of 2023. As a percentage of revenues, adjusted gross margin dollars for Protiviti were 22.0% in the first half of 2024, down from 23.6% in the first half of 2023. The year-over-year decrease in adjusted gross margin percentage was primarily due to the relative composition of and number of professional staff and their respective pay and bill rates

Current wording

Gross margin dollars for Protiviti represent revenues less costs of services, which consist primarily of professional staff payroll, payroll taxes, benefit costs, and reimbursable expenses. The primary drivers of Protiviti’s gross margin are: i) the relative composition of and number of professional staff and their respective pay and bill rates; and ii) staff utilization, which is the relationship of time spent on client engagements in proportion to the total time available for the Company’s Protiviti staff. Gross margin dollars for Protiviti were $323 million for the nine months ended September 30, 2024, down 7.3% from $348 million for the nine months ended September 30, 2023. As a percentage of revenues, reported gross margin dollars for Protiviti were 22.1% in the first three quarters of 2024, down from 23.8% in the first three quarters of 2023. As a percentage of revenues, adjusted gross margin dollars for Protiviti were 23.3% in the first three quarters of 2024, down from 24.3% in the first three quarters of 2023. The year-over-year decrease in adjusted gross margin percentage was primarily due to the relative composition of and number of professional staff and their respective pay and bill rates

Previous wording

The following tables provide reconciliations of the non-GAAP adjusted gross margin to reported gross margin for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following tables provide reconciliations of the non-GAAP adjusted gross margin to reported gross margin for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist primarily of staff compensation, advertising, variable overhead, depreciation, and occupancy costs. The Company’s reported selling, general and administrative expenses were $1.02 billion for the six months ended June 30, 2024, down 6.6% from $1.09 billion for the six months ended June 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses were 34.7% in the first half of 2024, up from 32.6% in the first half of 2023. The Company’s adjusted selling, general and administrative expenses were $975 million for the six months ended June 30, 2024, down 7.0% from $1.05 billion for the six months ended June 30, 2023. As a percentage of revenues, adjusted selling, general and administrative expenses were 33.1% in the first half of 2024, up from 31.2% in the first half of 2023. Contributing factors for each reportable segment are discussed below in further detail.

Current wording

Selling, General and Administrative Expenses. The Company’s selling, general and administrative expenses consist primarily of staff compensation, advertising, variable overhead, depreciation, and occupancy costs. The Company’s reported selling, general and administrative expenses were $1.53 billion for the nine months ended September 30, 2024, down 3.6% from $1.59 billion for the nine months ended September 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses were 34.7% in the first three quarters of 2024, up from 32.3% in the first three quarters of 2023. The Company’s adjusted selling, general and administrative expenses were $1.46 billion for the nine months ended September 30, 2024, down 6.1% from $1.56 billion for the nine months ended September 30, 2023. As a percentage of revenues, adjusted selling, general and administrative expenses were 33.1% in the first three quarters of 2024, up from 31.6% in the first three quarters of 2023. Contributing factors for each reportable segment are discussed below in further detail.

Previous wording

Selling, general and administrative expenses for contract talent solutions, on an as-reported basis, were $640 million for the six months ended June 30, 2024, decreasing by 5.7% from $679 million for the six months ended June 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses for contract talent solutions were 36.8% in the first half of 2024, up from 32.9% in the first half of 2023. Selling, general and administrative expenses for contract talent solutions, on an adjusted basis, were $598 million for the six months ended June 30, 2024, down 6.3% from $639 million for the six months ended June 30, 2023. As a percentage of revenues, adjusted selling, general and administrative expenses for contract talent solutions were 34.4% in the first half of 2024, up from 30.9% in the first half of 2023, due primarily to negative leverage as revenues decreased as a result of economic conditions.

Current wording

Selling, general and administrative expenses for contract talent solutions, on an as-reported basis, were $958 million for the nine months ended September 30, 2024, decreasing by 2.8% from $986 million for the nine months ended September 30, 2023. As a percentage of revenues, reported selling, general and administrative expenses for contract talent solutions were 37.2% in the first three quarters of 2024, up from 32.8% in the first three quarters of 2023. Selling, general and administrative expenses for contract talent solutions, on an adjusted basis, were $896 million for the nine months ended September 30, 2024, down 6.3% from $955 million for the nine months ended September 30, 2023. As a percentage of revenues, adjusted selling, general and administrative expenses for contract talent solutions were 34.8% in the first three quarters of 2024, up from 31.8% in the first three quarters of 2023, due primarily to negative leverage as revenues decreased as a result of economic conditions.

Previous wording

Selling, general and administrative expenses for Protiviti were $76 million for the three months ended June 30, 2024, increasing by 1.8% from $74 million for the three months ended June 30, 2023. As a percentage of revenues, selling, general and administrative expenses for Protiviti services were 15.6% in the second quarter of 2024, up from 15.1% in the second quarter of 2023.

Current wording

Selling, general and administrative expenses for Protiviti were $229 million for the nine months ended September 30, 2024, increasing by 3.6% from $221 million for the nine months ended September 30, 2023. As a percentage of revenues, selling, general and administrative expenses for Protiviti were 15.6% in the first three quarters of 2024, up from 15.1% in the first three quarters of 2023.

Previous wording

The following tables provide reconciliations of the non-GAAP selling, general and administrative expenses to reported selling, general and administrative expenses for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

The following tables provide reconciliations of the non-GAAP selling, general and administrative expenses to reported selling, general and administrative expenses for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Income from Investments Held in Employee Deferred Compensation Trusts. Under the Company’s employee deferred compensation plans, employees direct the investment of their account balances, and the Company invests amounts held in the associated investment trusts consistent with these directions. As realized and unrealized investment gains and losses occur, the Company’s employee deferred compensation plan obligations change and adjustments are recorded in selling, general and administrative expenses, or in the case of Protiviti, costs of services. The value of the related investment trust assets also changes by the equal and offsetting amount, leaving no net costs to the Company. The Company’s income from investments held in employee deferred compensation trusts consists primarily of unrealized and realized gains and losses and dividend income from trust investments and is presented separately on the unaudited Condensed Consolidated Statements of Operations. The Company’s income from investments held in employee deferred compensation trusts was $59 million and $56 million for the six months ended June 30, 2024 and 2023, respectively. The income from trust investments was due to positive market returns during the first half of 2024.

Current wording

(Income) Loss from Investments Held in Employee Deferred Compensation Trusts. Under the Company’s employee deferred compensation plans, employees direct the investment of their account balances, and the Company invests amounts held in the associated investment trusts consistent with these directions. As realized and unrealized investment gains and losses occur, the Company’s employee deferred compensation plan obligations change and adjustments are recorded in selling, general and administrative expenses, or in the case of Protiviti, costs of services. The value of the related investment trust assets also changes by the equal and offsetting amount, leaving no net costs to the Company. The Company’s income from investments held in employee deferred compensation trusts consists primarily of unrealized and realized gains and losses, and dividend income from trust investments and is presented separately on the unaudited Condensed Consolidated Statements of Operations. The Company’s income from investments held in employee deferred compensation trusts was $88 million and $41 million for the nine months ended September 30, 2024 and 2023, respectively. The income from trust investments was due to positive market returns during the first three quarters of 2024.

Previous wording

Income Before Income Taxes and Segment Income. The Company’s total income before income taxes was $187 million, or 6.3% of revenues, for the six months ended June 30, 2024, down from $320 million, or 9.5% of revenues, for the six months ended June 30, 2023. Combined segment income was $176 million, or 6.0% of revenues, for the six months ended June 30, 2024, down from $311 million, or 9.3% of revenues, for the six months ended June 30, 2023.

Current wording

Income Before Income Taxes and Segment Income. The Company’s total income before income taxes was $282 million, or 6.4% of revenues, for the nine months ended September 30, 2024, down from $456 million, or 9.3% of revenues, for the nine months ended September 30, 2023. Combined segment income was $266 million, or 6.0% of revenues, for the nine months ended September 30, 2024, down from $441 million, or 9.0% of revenues, for the nine months ended September 30, 2023.

Previous wording

The following table provides a reconciliation of the non-GAAP combined segment income to reported income before income taxes for the six months ended June 30, 2024, and 2023 (in thousands):

Current wording

The following table provides a reconciliation of the non-GAAP combined segment income to reported income before income taxes for the nine months ended September 30, 2024, and 2023 (in thousands):

Previous wording

Provision for income taxes. The provision for income taxes was 29.3% and 29.7% for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Provision for income taxes. The provision for income taxes was 30.1% and 29.1% for the nine months ended September 30, 2024 and 2023, respectively. The higher tax rate for 2024 can primarily be attributed to the impact of nondeductible expenses.