ROBERT HALF INC

Previous wording

Certain information contained in Management’s Discussion and Analysis and in other parts of this report may be deemed forward-looking statements regarding events and financial trends that may affect the future operating results or financial positions of Robert Half Inc. (the “Company”). Forward-looking statements are not guarantees or promises that goals or targets will be met. These statements may be identified by words such as “anticipate,” “estimate,” “forecast,” “target,” “project,” “plan,” “intend,” “believe,” “expect,” “should,” “could,” “would,” “may,” “might,” “will,” or variations or negatives thereof or by similar or comparable words or phrases. In addition, historical, current, and forward-looking information about the Company’s environmental, social, and governance (“ESG”) and compliance programs, including targets or goals, may not be considered material for the Securities and Exchange Commission (“SEC”) reporting purposes and may be based on standards for measuring progress that are still developing, on internal controls, diligence, or processes that are evolving, and on assumptions that are subject to change in the future. Forward-looking statements are estimates only, based on management’s current expectations, currently available information and current strategy, plans, or forecasts, and involve certain known and unknown risks, uncertainties, and assumptions that are difficult to predict and often beyond our control and are inherently uncertain. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. These risks and uncertainties include, but are not limited to, the following: changes to or new interpretations of United States of America (“U.S.”) or international tax regulations; the global financial and economic situation; changes in levels of unemployment and other economic conditions in the U.S. or foreign countries where the Company does business, or in particular regions or industries; reduction in the supply of candidates for contract employment or the Company’s ability to attract candidates; the development, proliferation and adoption of artificial intelligence (“AI”) by the Company and the third parties it serves; the entry of new competitors into the marketplace or expansion by existing competitors; the ability of the Company to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the Company’s services, on the Company’s ability to maintain its margins; the possibility of the Company incurring liability for its activities, including the activities of its engagement professionals, or for events impacting its engagement professionals on clients’ premises; the possibility that adverse publicity could impact the Company’s ability to attract and retain clients and candidates; th…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain information contained in Management’s Discussion and Analysis and in other parts of this report may be deemed forward-looking statements regarding events and financial trends that may affect the future operating results or financial positions of Robert Half Inc. (the “Company”). Forward-looking statements are not guarantees or promises that goals or targets will be met. These statements may be identified by words such as “anticipate,” “potential,” “estimate,” “forecast,” “target,” “project,” “plan,” “intend,” “believe,” “expect,” “should,” “could,” “would,” “may,” “might,” “will,” or variations or negatives thereof or by similar or comparable words or phrases. In addition, historical, current and forward-looking information about the Company’s environmental, social and governance (“ESG”) and compliance programs, including targets or goals, may not be considered material for the Securities and Exchange Commission (“SEC”) or other mandatory reporting purposes and may be based on standards for measuring progress that are still developing, on internal controls, diligence or processes that are evolving, on representations reviewed or provided by third parties, and on assumptions that are subject to change in the future. Forward-looking statements are estimates only and are based on management’s current expectations, currently available information and current strategy, plans or forecasts, and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict, often beyond our control and are inherently uncertain. Forward-looking statements are subject to risks and uncertainties that could cause actual results and outcomes, or the timing of these results or outcomes, to differ materially from those expressed or implied in the statements. These risks and uncertainties include, but are not limited to, the following: changes to or new interpretations of United States of America (“U.S.”) or international tax regulations; the global financial and economic situation; changes in levels of unemployment and other economic conditions in the U.S. or foreign countries where the Company does business, or in particular regions or industries; reduction in the supply of candidates for contract employment or the Company’s ability to attract candidates; the development, proliferation and adoption of artificial intelligence (“AI”) by the Company and the third parties it serves; the entry of new competitors into the marketplace or expansion by existing competitors; the ability of the Company to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the Company’s services, or the Company’s ability to maintain its margins; the possibility of the Company incurring liability for its activities, including the activities of its engagement professionals, or for events impacting its engagement …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The Company’s results were impacted by the ongoing macroeconomic uncertainty that affects client and candidate confidence, lengthening decision cycles. Gross margins have demonstrated resilience with pricing discipline and the ongoing benefit from the rising mix shift to higher skill levels.

Current wording

The Company’s results were impacted by the ongoing macroeconomic uncertainty that affects client and candidate confidence, lengthening decision cycles and delaying hiring activities and projects in the short term.

Previous wording

The Company’s service revenues were $6.39 billion in 2023, a decrease of 11.7% from the prior year. Full-year 2023 net income decreased 37.5% to $411 million and diluted net income per share decreased 35.7% to $3.88.

Current wording

The Company’s service revenues were $5.80 billion in 2024, a decrease of 9.3% from the prior year. Full-year 2024 net income decreased 38.8% to $252 million and diluted net income per share decreased 37.1% to $2.44.

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 2.5% in 2023, compared to an increase of 2.1% in 2022, while the unemployment rate rose from 3.5% in December 2022, to 3.7% in December 2023. 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 2.1%. However, the urgency and velocity of the demand is impacted by the prolonged period of macroeconomic uncertainty. Clients are budget sensitive and very selective in their hiring activities—including approval of new projects - resulting in elongated hiring cycles and a negative impact on short-term results.

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 2.3% in 2024, compared to an increase of 2.5% in 2023, while the unemployment rate rose from 3.8% in December

Previous wording

The Company is confident about its ability to weather the current global macroeconomic environment and its future growth prospects, built on our industry-leading brand, people, technology and unique business model that includes both professional staffing and business consulting services.

Current wording

The Company is confident about its ability to weather the current economic cycle. The NFIB’s Small Business Optimism Index continues to climb and recently reached levels not seen in more than six years. Rising business confidence is conducive to hiring urgency, accelerated project demand and reprioritization of deferred growth initiatives. The Company is encouraged by the current combination of elevated job openings, low unemployment and strong business confidence. The Company is well-positioned to capitalize on emerging opportunities and support its clients’ talent and consulting needs through the strength of its industry-leading brand, people, technology and unique business model.

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 2023 the Company decreased headcount for its contract talent solutions and permanent placement talent solutions segments, while full-time headcount for its Protiviti segment remained flat, 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 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 also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may not be realized. Valuation allowances of $25.8 million and $23.6 million were recorded as of December 31, 2023, and 2022, respectively. The valuation allowances recorded relate primarily to net operating losses in certain international operations. If such losses are ultimately utilized to offset future operating income, the Company will recognize a tax benefit up to the full amount of the related valuation reserve.

Current wording

The Company also evaluates the need for valuation allowances to reduce the deferred tax assets to realizable amounts. Management evaluates all positive and negative evidence and uses judgment regarding past and future events, including operating results, to help determine when it is more likely than not that all or some portion of the deferred tax assets may not be realized. When appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may not be realized. Valuation allowances of $26.4 million and $25.8 million were recorded as of December 31, 2024, and 2023, respectively. The valuation allowances recorded relate primarily to net operating losses in certain international operations. If such losses are ultimately utilized to offset future operating income, the Company will recognize a tax benefit up to the full amount of the related valuation reserve.

Previous wording

The Organization of Economic Cooperation and Development (“OECD”), an international association of many countries including the U.S., has introduced a framework to impose a 15% global minimum corporate tax, referred to as Pillar Two, effective for tax years beginning in 2024. Currently, there are no laws enacted incorporating Pillar Two in the U.S., however, certain countries in which the Company operates have adopted, or are in the process of adopting legislation to implement Pillar Two. The OECD continues to release additional guidance and countries are implementing legislation with widespread adoption of the Global Anti-Base Erosion (“GloBE”) Model Rules for Pillar Two. The Company is continuing to evaluate the GloBE Model Rules for Pillar Two and related legislation, and their potential impact on future periods.

Current wording

The Organization of Economic Cooperation and Development (“OECD”), an international association of many countries, has introduced a framework to impose a 15% global minimum corporate tax, referred to as Pillar Two, effective for tax years beginning in 2024. Currently, there are no laws enacted incorporating Pillar Two in the U.S., however, certain countries in which the Company operates have adopted, or are in the process of adopting legislation to implement Pillar Two. The OECD continues to release additional guidance and countries are implementing legislation with widespread adoption of the Global Anti-Base Erosion (“GloBE”) Model Rules for Pillar Two. The Company is continuing to evaluate the GloBE Model Rules for Pillar Two and related legislation; no material tax impacts are expected.

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, and administrative and customer support roles. The Protiviti segment provides business and technology risk consulting and internal audit services.

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

Demand for the Company’s services is largely dependent upon general economic and labor trends both domestically and abroad. Because of the inherent difficulty in predicting economic trends, future demand for the Company’s services cannot be forecast with certainty.

Current wording

Demand for the Company’s services is largely dependent upon global economic and labor trends. Because of the inherent difficulty in predicting economic trends, future demand for the Company’s services cannot be forecast with certainty.

Previous wording

Service Revenues. The Company’s revenues were $6.39 billion for the year ended December 31, 2023, a decrease of 11.7%, compared to $7.24 billion for the year ended December 31, 2022. Revenues from U.S. operations decreased 13.2% to $4.96 billion (77.5% of total revenue) for the year ended December 31, 2023, compared to $5.71 billion (78.9% of total revenue) for the year ended December 31, 2022. Revenues from international operations decreased 5.9% to $1.44 billion (22.5% of total revenue) for the year ended December 31, 2023, compared to $1.53 billion (21.1% of total revenue) for the year ended December 31, 2022. Contributing factors for each reportable segment are discussed below in further detail.

Current wording

Service Revenues. The Company’s revenues were $5.80 billion for the year ended December 31, 2024, a decrease of 9.3%, compared to $6.39 billion for the year ended December 31, 2023. Revenues from U.S. operations decreased 8.8% to $4.52 billion (78.0% of total revenue) for the year ended December 31, 2024, compared to $4.96 billion (77.5% of total revenue) for the year ended December 31, 2023. Revenues from international operations decreased 11.1% to $1.28 billion (22.0% of total revenue) for the year ended December 31, 2024, compared to $1.44 billion (22.5% of total revenue) for the year ended December 31, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Previous wording

Contract talent solutions revenues were $3.90 billion for the year ended December 31, 2023, decreasing by 14.1% compared to revenues of $4.53 billion for the year ended December 31, 2022. 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 2023 was primarily due to a 20.8% decrease in the number of hours worked by the Company’s engagement professionals, partially offset by a 7.7% increase in average bill rates. On an as adjusted basis, contract talent solutions revenues decreased 13.9% for 2023, compared to 2022. In the U.S., 2023 revenues decreased 16.4% on a reported basis, and decreased 16.2% on an as adjusted basis, compared to 2022. International revenues for 2023 decreased 5.0% on a reported basis, and decreased 4.8% on an as adjusted basis, compared to 2022.

Current wording

Contract talent solutions revenues were $3.36 billion for the year ended December 31, 2024, decreasing by 13.8% compared to revenues of $3.90 billion for the year ended December 31, 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 2024 was primarily due to a 14.6% decrease in the number of hours worked by the Company’s engagement professionals, partially offset by a 1.5% increase in average bill rates. On an as adjusted basis, contract talent solutions revenues decreased 14.0% for 2024, compared to 2023. In the U.S., 2024 revenues decreased 14.6% on a reported basis, and decreased 15.1% on an as adjusted basis, compared to 2023. International revenues for 2024 decreased 11.0% on a reported basis, and decreased 10.6% on an as adjusted basis, compared to 2023.

Previous wording

Permanent placement talent solutions revenues were $567 million for the year ended December 31, 2023, decreasing by 21.7% compared to revenues of $725 million for the year ended December 31, 2022. 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 solutions revenues for 2023 was due to a 24.1% decrease in the number of placements, partially offset by a 2.4% increase in average fees earned per placement. On an as adjusted basis, permanent placement talent solutions revenues decreased 21.5% for 2023 compared to 2022. In the U.S., 2023 revenues decreased 23.3% on a reported basis, and decreased 23.1% on an as adjusted basis, compared to 2022. International revenues for 2023 revenues decreased 17.9% on a reported basis, and decreased 17.2% on an as adjusted basis, compared to 2022. 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 $487 million for the year ended December 31, 2024, decreasing by 14.1% compared to revenues of $567 million for the year ended December 31, 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 solutions revenues for 2024 was due to a 17.0% decrease in the number of placements, partially offset by a 2.9% increase in average fees earned per placement. On an as adjusted basis, permanent placement talent solutions revenues decreased 14.3% for 2024 compared to 2023. In the U.S., 2024 revenues decreased 12.6% on a reported basis, and decreased 13.1% on an as adjusted basis, compared to 2023. International revenues for 2024 revenues decreased 17.8% on a reported basis, and decreased 17.4% on an as adjusted basis, compared to 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 $1.93 billion for the year ended December 31, 2023, decreasing by 2.5% compared to revenues of $1.98 billion for the year ended December 31, 2022. 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 2023 was primarily due to a 6.6% decrease in billable hours, partially offset by a 4.1% increase in average hourly bill rates. On an as adjusted basis, Protiviti revenues decreased 2.4% for 2023 compared to 2022. In the U.S., 2023 revenues decreased 2.7% on a reported basis, and decreased 2.5% on an as adjusted basis, compared to 2022. International revenues for 2023 revenues decreased 2.1% on a reported basis, and decreased 1.8% on an as adjusted basis, compared to 2022.

Current wording

Protiviti revenues were $1.95 billion for the year ended December 31, 2024, increasing by 1.1% compared to revenues of $1.93 billion for the year ended December 31, 2023. Key drivers of Protiviti revenues are the billable hours worked on client engagements and average hourly bill rates. The increase in Protiviti revenues for 2024 was primarily due to a 2.4% increase in average hourly bill rate, partially offset by a 1.3% decrease in billable hours. On an as adjusted basis, Protiviti revenues increased 0.6% for 2024 compared to 2023. In the U.S., 2024 revenues increased 3.5% on a reported basis, and increased 3.0% on an as adjusted basis, compared to 2023. International revenues for 2024 revenues decreased 8.5% on a reported basis, and decreased 8.9% on an as adjusted basis, compared to 2023.

Previous wording

Gross Margin. The Company’s gross margin dollars were $2.58 billion for the year ended December 31, 2023, down 16.8% from $3.09 billion for the year ended December 31, 2022. Contributing factors for each reportable segment are discussed below in further detail.

Current wording

Gross Margin. The Company’s gross margin dollars were $2.25 billion for the year ended December 31, 2024, down 12.7% from $2.58 billion for the year ended December 31, 2023. Contributing factors for each reportable segment are discussed below in further detail.

Previous wording

Gross margin dollars for contract talent solutions were $1.55 billion for the year ended December 31, 2023, down 14.1% from $1.80 billion for the year ended December 31, 2022. As a percentage of revenues, gross margin dollars for contract talent solutions were 39.8% in both 2023 and 2022.

Current wording

Gross margin dollars for contract talent solutions were $1.32 billion for the year ended December 31, 2024, down 15.0% from $1.55 billion for the year ended December 31, 2023. As a percentage of revenues, gross margin dollars for contract talent solutions were 39.2% in 2024, down from 39.8% in 2023. The decrease in gross margin percentage was primarily due to lower conversions and a smaller mix of higher margin services which impacted 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 $566 million for the year ended December 31, 2023, down 21.7% from $724 million for the year ended December 31, 2022. 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 $486 million for the year ended December 31, 2024, down 14.2% from $566 million for the year ended December 31, 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 $459 million for the year ended December 31, 2023, down 18.9% from $566 million for the year ended December 31, 2022. As a percentage of revenues, reported gross margin dollars for Protiviti were 23.8% in 2023, down from 28.6% in 2022. As a percentage of revenues, adjusted gross margin dollars for Protiviti were 24.6% in 2023, down from 27.9% in 2022. The year-over-year decrease in adjusted gross margin percentage was primarily due to lower staff utilization 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 $444 million for the year ended December 31, 2024, down 3.2% from $459 million for the year ended December 31, 2023. As a percentage of revenues, reported gross margin dollars for Protiviti were 22.8% in 2024, down from 23.8% in 2023. As a percentage of revenues, adjusted gross margin dollars for Protiviti were 23.7% in 2024, down from 24.6% in 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

(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.

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 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.

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 $2.11 billion for the year ended December 31, 2023, down 0.5% from $2.12 billion for the year ended December 31, 2022. As a percentage of revenues, reported selling, general and administrative expenses were 33.0% in 2023, up from 29.3% in 2022. The Company’s adjusted selling, general and administrative expenses were $2.04 billion for the year ended December 31, 2023, down 7.0% from $2.19 billion in 2022. As a percentage of revenues, adjusted selling, general and administrative expenses were 31.8% in 2023, up from 30.3% in 2022. 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 $2.00 billion for the year ended December 31, 2024, down 4.9% from $2.11 billion for the year ended December 31, 2023. As a percentage of revenues, reported selling, general and administrative expenses were 34.6% in 2024, up from 33.0% in 2023. The Company’s adjusted selling, general and administrative expenses were $1.93 billion for the year ended December 31, 2024, down 5.2% from $2.04 billion in 2023. As a percentage of revenues, adjusted selling, general and administrative expenses were 33.3% in 2024, up from 31.8% in 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 $1.32 billion for the year ended December 31, 2023, increasing 5.8% from $1.25 billion the year ended December 31, 2022. As a percentage of revenues, reported selling, general and administrative expenses for contract talent solutions were 33.9% in 2023, up from 27.5% in 2022. Selling, general and administrative expenses for contract talent solutions, on an adjusted basis, were $1.26 billion for the year ended December 31, 2023, down 4.2% from $1.31 billion in 2022. As a percentage of revenues, adjusted selling, general and administrative expenses for contract talent solutions were 32.3% in 2023, up from 28.9% in 2022, 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 $1.25 billion for the year ended December 31, 2024, decreasing 5.2% from $1.32 billion the year ended December 31, 2023. As a percentage of revenues, reported selling, general and administrative expenses for contract talent solutions were 37.3% in 2024, up from 33.9% in 2023. Selling, general and administrative expenses for contract talent solutions, on an adjusted basis, were $1.19 billion for the year ended December 31, 2024, down 5.6% from $1.26 billion in 2023. As a percentage of revenues, adjusted selling, general and administrative expenses for contract talent solutions were 35.3% in 2024, up from 32.3% in 2023, due primarily to negative leverage as revenues decreased as a result of economic conditions.

Previous wording

Selling, general and administrative expenses for permanent placement talent solutions were $499 million for the year ended December 31, 2023, decreasing by 15.0% from $587 million for the year ended December 31, 2022. As a percentage of revenues, reported selling, general and administrative expenses for permanent placement talent solutions services were 87.9% in 2023, up from 81.0% in 2022. As a percentage of revenues, adjusted selling, general and administrative expenses for permanent placement talent solutions were 86.6% in 2023, up from 82.2% in 2022, due primarily negative leverage as revenues decreased as a result of economic conditions.

Current wording

Selling, general and administrative expenses for permanent placement talent solutions were $449 million for the year ended December 31, 2024, decreasing by 10.0% from $499 million for the year ended December 31, 2023. As a percentage of revenues, reported selling, general and administrative expenses for permanent placement talent solutions services were 92.1% in 2024, up from 87.9% in 2023. As a percentage of revenues, adjusted selling, general and administrative expenses for permanent placement talent solutions were 90.3% in 2024, up from 86.6% in 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 $288 million for the year ended December 31, 2023, increasing by 2.2% from $282 million for the year ended December 31, 2022. As a percentage of revenues, selling, general and administrative expenses for Protiviti were 14.9% in 2023, up from 14.2% in 2022, due primarily to negative leverage as revenues decreased as a result of economic conditions.

Current wording

Selling, general and administrative expenses for Protiviti were $303 million for the year ended December 31, 2024, increasing by 5.3% from $288 million for the year ended December 31, 2023. As a percentage of revenues, selling, general and administrative expenses for Protiviti were 15.5% in 2024, up from 14.9% in 2023.

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) 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.

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 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.

Previous 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) 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 Consolidated Statements of Operations. The Company’s (income) loss from investments held in employee deferred compensation trusts was income of $88 million for the year ended December 31, 2023, and a loss of $86 million for the year ended December 31, 2022. The income from trust investments was due to positive market returns during 2023.

Current 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, and therefore no effect on reported net income. 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 Consolidated Statements of Operations. The Company’s income from investments held in employee deferred compensation trusts was $94 million for the year ended December 31, 2024, and $88 million for the year ended December 31, 2023. The income from trust investments was due to positive market returns during 2024.

Previous wording

Income Before Income Taxes and Segment Income. The Company’s total income before income taxes was $577 million, or 9.0% of revenues, for the year ended December 31, 2023, down from $897 million or 12.4% of revenues for the year ended December 31, 2022. Combined segment income was $555 million, or 8.7% of revenues, for the year ended December 31, 2023, down from $891 million, or 12.3% of revenues, for the year ended December 31, 2022.

Current wording

Income Before Income Taxes and Segment Income. The Company’s total income before income taxes was $358 million, or 6.2% of revenues, for the year ended December 31, 2024, down from $577 million, or 9.0% of revenues, for the year ended December 31, 2023. Combined segment income was $337 million, or 5.8% of revenues, for the year ended December 31, 2024, down from $555 million, or 8.7% of revenues, for the year ended December 31, 2023.

Previous wording

Provision for income taxes. The provision for income taxes was 28.7% and 26.6% for the years ended December 31, 2023 and 2022, respectively. The higher tax rate for 2023 can be attributed to an increased impact of nondeductible expenses and fewer tax credits.

Current wording

Provision for income taxes. The provision for income taxes was 29.7% and 28.7% for the years ended December 31, 2024 and 2023, respectively. The higher tax rate for 2024 can be attributed to an increased impact of nondeductible expenses and fewer tax credits.

Previous wording

Cash and cash equivalents were $732 million and $659 million at December 31, 2023, and 2022, respectively. Operating activities provided $637 million during the year ended December 31, 2023, offset by $112 million and $461 million of net cash used in investing activities and financing activities, respectively. Operating activities provided $684 million during the year ended December 31, 2022, offset by $117 million and $509 million of net cash used in investing and financing activities, respectively. Fluctuations in foreign currency exchange rates had the effect of increasing reported cash and cash equivalents by $9 million during the year ended December 31, 2023, compared to a decrease of $18 million in 2022.

Current wording

Cash and cash equivalents were $538 million and $732 million at December 31, 2024, and 2023, respectively. Operating activities provided $410 million during the year ended December 31, 2024, offset by $87 million and $496 million of net cash used in investing activities and financing activities, respectively. Operating activities provided $637 million during the year ended December 31, 2023, offset by $112 million and $461 million of net cash used in investing and financing activities, respectively. Fluctuations in foreign currency exchange rates had the effect of decreasing reported cash and cash equivalents by $21 million during the year ended December 31, 2024, compared to an increase of $9 million in 2023.

Previous wording

Operating activities—Net cash provided by operating activities for the year ended December 31, 2023, was $637 million. This was composed of net income of $411 million, adjusted upward for non-cash items of $79 million, and cash provided by changes in working capital of $147 million. Net cash provided by operating activities for the year ended December 31, 2022, was $684 million. This was composed of net income of $658 million, adjusted upward for non-cash items of $254 million, offset by net cash used in changes in working capital of $228 million.

Current wording

Operating activities—Net cash provided by operating activities for the year ended December 31, 2024, was $410 million. This was composed of net income of $252 million, adjusted upward for non-cash items of $68 million, and cash provided by changes in working capital of $90 million. Net cash provided by operating activities for the year ended December 31, 2023, was $637 million. This was composed of net income of $411 million, adjusted upward for non-cash items of $79 million, and cash provided by changes in working capital of $147 million.

Previous wording

Investing activities—Cash used in investing activities for the year ended December 31, 2023, was $112 million. This was composed of capital expenditures of $46 million, investments in employee deferred compensation trusts of $103 million and $1 million cash paid for an acquisition, partially offset by proceeds from employee deferred compensation trust redemptions of $38 million. Cash used in investing activities for the year ended December 31, 2022, was $117 million. This was composed of capital expenditures of $61 million, investments in employee deferred compensation trusts of $67 million, and $19 million cash paid for an acquisition, partially offset by proceeds from employee deferred compensation trust redemptions of $30 million.

Current wording

Investing activities—Cash used in investing activities for the year ended December 31, 2024, was $87 million. This was composed of capital expenditures of $56 million and investments in employee deferred compensation trusts of $69 million, partially offset by proceeds from employee deferred compensation trust redemptions of $38 million. Cash used in investing activities for the year ended December 31, 2023, was $112 million. This was composed of capital expenditures of $46 million, investments in employee deferred compensation trusts of $103 million, and $1 million cash paid for an acquisition, partially offset by proceeds from employee deferred compensation trust redemptions of $38 million.

Previous wording

Capital expenditures, including $35 million related to cloud computing implementations, in 2023, totaled $81 million, approximately 67% of which represented investments in software initiatives and technology infrastructure, both of which are important to the Company’s sustainability and future growth opportunities. Capital expenditures for cloud computing arrangements are included in cash flows from operating activities on the Company’s Consolidated Statements of Cash Flows. Capital expenditures included amounts spent on tenant improvements and furniture and equipment in the Company’s leased offices. The Company currently expects 2024 capitalized expenditures will range from $90 million to $110 million, of which $45 million to $55 million relates to software initiatives and technology infrastructure, including capitalized costs relating to the implementation of cloud computing arrangements.

Current wording

Capital expenditures, including $29 million related to cloud computing implementations, in 2024 totaled $86 million, approximately 59% of which represented investments in software initiatives and technology infrastructure, both of which are important to the Company’s sustainability and future growth opportunities. Capital expenditures for cloud computing arrangements are included in cash flows from operating activities on the Company’s Consolidated Statements of Cash Flows. Capital expenditures included amounts spent on tenant improvements and furniture and equipment in the Company’s leased offices. The Company currently expects 2025 capitalized expenditures will range from $75 million to $95 million, of which $45 million to $55 million relates to software initiatives and technology infrastructure, including capitalized costs relating to the implementation of cloud computing arrangements.

Previous wording

Financing activities—Cash used in financing activities for the year ended December 31, 2023, was $461 million. This included repurchases of $255 million in common stock and $206 million in dividends paid to stockholders. Cash used in financing activities for the year ended December 31, 2022, was $509 million. This included repurchases of $320 million in common stock and $189 million in dividends paid to stockholders.

Current wording

Financing activities—Cash used in financing activities for the year ended December 31, 2024, was $496 million. This included repurchases of $276 million in common stock and $220 million in dividends paid to stockholders. Cash used in financing activities for the year ended December 31, 2023, was $461 million. This included repurchases of $255 million in common stock and $206 million in dividends paid to stockholders.

Previous wording

As of December 31, 2023, the Company is authorized to repurchase, from time to time, up to 10.8 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions. During the years ended December 31, 2023 and 2022, the Company repurchased 3.0 million shares, at a cost of $232 million, and 3.3 million shares, at a cost of $280 million, on the open market, respectively. Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable statutory withholding taxes. During the years ended December 31, 2023 and 2022, such repurchases totaled 0.3 million shares, at a cost of $26 million, and 0.4 million shares, at a cost of $38 million, respectively. Repurchases of shares have been funded with cash generated from operations.

Current wording

As of December 31, 2024, the Company is authorized to repurchase, from time to time, up to 7.3 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions. During the years ended December 31, 2024 and 2023, the Company repurchased 3.5 million shares, at a cost of $249 million, and 3.0 million shares, at a cost of $232 million, on the open market, respectively. Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable statutory withholding taxes. During the years ended December 31, 2024 and 2023, such repurchases totaled 0.3 million shares, at a cost of $23 million, and 0.3 million shares, at a cost of $26 million, respectively. Repurchases of shares have been funded with cash generated from operations.

Previous wording

The Company’s working capital as of December 31, 2023, included $732 million in cash and cash equivalents and $861 million in net accounts receivable, both of which will be a significant source of ongoing liquidity and financial resilience. The Company expects that internally generated cash will be sufficient to support the working capital needs of the Company, the Company’s fixed payments, dividends, and other obligations on both a short-term and long-term basis.

Current wording

The Company’s working capital as of December 31, 2024, included $538 million in cash and cash equivalents and $772 million in net accounts receivable, both of which will be a significant source of ongoing liquidity and financial resilience. The Company expects that internally generated cash will be sufficient to support the working capital needs of the Company, the Company’s fixed payments, dividends, and other obligations on both a short-term and long-term basis.

Previous wording

In May 2023, the Company entered into an amendment to extend the maturity of its $100 million unsecured revolving credit facility (the “Credit Agreement”) to May 2026. Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing which, effective May 2023, will be calculated according to the Adjusted Term Secured Overnight Financing Rate (“SOFR”), or an alternative base rate, plus an applicable margin. The Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of December 31, 2023. There were no borrowings under the Credit Agreement as of December 31, 2023, or December 31, 2022.

Current wording

In May 2023, the Company entered into an amendment to extend the maturity of its $100 million unsecured revolving credit facility (the “Credit Agreement”) to May 2026. Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing which will be calculated according to the Adjusted Term Secured Overnight Financing Rate (“SOFR”), or an alternative base rate, plus an applicable margin. The Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of December 31, 2024. There were no borrowings under the Credit Agreement as of December 31, 2024, or December 31, 2023.

Previous wording

On February 13, 2024, the Company announced a quarterly dividend of $0.53 per share to be paid to all shareholders of record as of February 23, 2024. The dividend will be paid on March 15, 2024.

Current wording

On February 12, 2025, the Company announced a quarterly dividend of $0.59 per share to be paid to all shareholders of record as of February 25, 2025. The dividend will be paid on March 14, 2025.

Previous wording

Leases. As of December 31, 2023, the Company reported current and long-term operating lease liabilities of $80.5 million and $161.4 million, respectively. These balances consist of the minimum rental commitments for 2024 and thereafter, discounted to reflect the Company’s cost of borrowing, under non-cancelable lease contracts executed as of December 31, 2023.

Current wording

Leases. As of December 31, 2024, the Company reported current and long-term operating lease liabilities of $65 million and $169 million, respectively. These balances consist of the minimum rental commitments for 2025 and thereafter, discounted to reflect the Company’s cost of borrowing, under noncancelable lease contracts executed as of December 31, 2024.

Previous wording

Purchase Obligations. As of December 31, 2023, the Company incurred contractual purchase obligations of $201.6 million primarily related to software subscriptions, services, telecom services and software maintenance agreements. Of this amount, $105.3 million is expected to be paid within the next twelve months. These purchase obligations are incurred during the normal course of business.

Current wording

Purchase Obligations. As of December 31, 2024, the Company’s contractual purchase obligations were $255 million, primarily related to software subscriptions, services, telecom services and software maintenance agreements. Of this amount, $112 million is expected to be paid within the next 12 months. These purchase obligations are incurred during the normal course of business.

Previous wording

Employee Deferred Compensation Plan. As of December 31, 2023, the Company reported employee deferred compensation plan obligations of $572.9 million in its accompanying Consolidated Statements of Financial Position. The balances are due to employees based upon elections they make at the time of deferring their funds. The timing of these payments may change based upon factors including termination of the Company’s employment arrangement with a participant. These obligations are funded through contributions to investment trusts whose assets at December 31, 2023, are substantially equal to the obligations. Assets of these plans are held by an independent trustee for the benefit of participating employees and consist of money market funds and mutual funds. For further information, see Note J—“Employee Deferred Compensation Plans” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report.

Current wording

Employee Deferred Compensation Plan. As of December 31, 2024, the Company reported employee deferred compensation plan obligations of $678 million in its accompanying Consolidated Statements of Financial Position. The balances are due to employees based upon elections they make at the time of deferring their funds. The timing of these payments may change based upon factors including termination of the Company’s employment arrangement with a participant. These obligations are funded through contributions to investment trusts, whose assets as of December 31, 2024, were substantially equal to the obligations. Assets of these plans are held by an independent trustee for the sole benefit of participating employees and consist of money market funds and mutual funds. For further information, see Note J—“Employee Deferred Compensation Plans” to the Company’s Consolidated Financial Statements included under Part II—Item 8 of this report.