RHI earnings analysis
What we found in RHI's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Robert Half's Q2 revenue declined 2.4% year over year to $1.34 billion, while diluted EPS of $0.26 fell from $0.41, though both revenue and EPS improved sequentially from Q1. Reported gross margin compressed 170 basis points to 35.5% and the operating margin fell to -4.7%, principally reflecting Protiviti's lower utilization/margin and deferred-compensation-related accounting volatility. Permanent placement was the sole growing segment, but declines in contract staffing and Protiviti, along with negative first-half operating cash flow, leave the near-term setup pressured despite management's improving-demand commentary and solid liquidity.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Sequential EPS recovery despite lower sales
- Q2 service revenue was $1.34 billion, down 2.4% from $1.37 billion a year ago but up from $1.30 billion in Q1 2026. Diluted EPS of $0.26 declined from $0.41 in Q2 2025 but improved from $0.14 in Q1 2026.
- Permanent placement returned to growth
- Permanent placement revenue increased 2.9% year over year to $118 million, driven by a 5.5% increase in average fee per placement, partly offset by a 2.6% decline in placements. U.S. permanent-placement revenue rose 6.0%.
- Contract staffing pricing preserved margin
- Contract talent gross margin held at 39.1% on $747 million of revenue, unchanged from Q2 2025, despite a 1.6% revenue decline. Average bill rates rose 1.2%, partly offsetting a 2.8% reduction in hours worked.
- Labor backdrop supports eventual demand recovery
- Management cited an unemployment rate of 4.2% at June 30, 2026 and a 2.7% rate for college-educated professionals, while noting continued labor-supply constraints in specialized roles. It sees client interactions and activity making steady progress as confidence improves.
- Cash resources and unused revolver support liquidity
- Liquidity remained substantial, with $325 million of cash and cash equivalents, $821 million of net receivables and no borrowings under the $100 million credit facility at June 30, 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Operating leverage turned sharply negative
- Reported operating performance deteriorated sharply: the company recorded a $62 million operating loss, or a -4.7% margin, versus $2 million of operating income and a 0.1% margin in Q2 2025. Even adjusted operating income fell 34.8% to $39 million and the adjusted margin contracted to 2.9% from 4.3%.
- Protiviti utilization and margin pressure
- Protiviti revenue fell 4.9% to $471 million as billable hours declined 19.9%; its reported gross margin fell to 13.5% from 19.7%. Management attributed the shift to fewer large-scale regulatory-remediation engagements and a mix shift toward smaller, less leveraged work.
- First-half operating cash flow reversed
- Cash conversion weakened: operating activities used $4 million in the first half of 2026 versus providing $60 million a year earlier, and $32 million of capital expenditures produced approximately negative $36 million of first-half free cash flow. Cash at June 30 was $325 million, down from $381 million a year earlier.
- No risk-factor update; demand visibility remains limited
- The filing reports no changes to risk factors from the 2025 Form 10-K, but management stresses limited revenue visibility because engagements are relatively short. First-half service revenue declined 3.1% to $2.64 billion amid macroeconomic and geopolitical uncertainty and inflation concerns.
- FX support may reverse in the second half
- International operations represented 23.3% of first-half revenue, and currency added $31.1 million, or 1.2%, to first-half reported revenue. Management says that if July 2026 exchange rates persist, the full-year revenue currency impact would be unfavorable, although net-income impact is expected to be immaterial.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.26
- Gross margin
- 35.5%
- Operating margin
- -4.7%
- Segment
- Contract talent solutions revenue: $747 million (-1.6% year over year)
- Segment
- Permanent placement talent solutions revenue: $118 million (+2.9% year over year)
- Segment
- Protiviti revenue: $471 million (-4.9% year over year)
What they said about what is next.
No quantitative revenue or EPS outlook was provided in the 10-Q. Management expects 2026 capitalized expenditures of $50 million to $70 million, including $45 million to $55 million for software initiatives and technology infrastructure; it also expects internally generated cash to fund working-capital needs, fixed payments, dividends and other obligations.
The filing reads worse than the one before it.
What came before.
- 10-Q · May 1, 2026
- Robert Half's Q1 2026 results showed a 3.8% year-over-year decrease in revenue to $1.30 billion and a diluted EPS of $0.14, beating consensus estimates of $0.13. Despite challenges from macroeconomic uncertainty,…
- 10-K · February 13, 2026
- Robert Half reported full-year 2025 service revenues of $5.38 billion (down 7.2% y/y) with net income of $133 million and diluted EPS of $1.33 (down 45.5% y/y). Margins compressed (reported gross margin 37.2%, operating…
- 10-Q · October 31, 2025
- Robert Half reported Q3 2025 service revenues of $1.35 billion, down 7.5% year‑over‑year, with reported operating income of $14 million (1.0% of revenue) versus $61 million (4.1%) a year ago. EPS was $0.43, in line with…
- 10-Q · May 2, 2025
- Robert Half reported Q1 service revenues of $1.35 billion (down 8.4% YoY) and diluted EPS of $0.17, which was reduced by $0.13 per share of one-time cost action charges. Protiviti was the sole growth engine—revenues of…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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