Trevor Romeo

Trevor Romeo asked about Casella's M&A outlook for 2026, specifically if contributions to revenue would reach double-digit percentages similar to past years, or if a lighter year is expected. He also inquired about the economic impact of the Hawk Ridge facility closure and the North Country landfill ramp-down on the company's guidance.

Answer

President and CEO Ned Coletta indicated that while 2025 was a lighter M&A year, the pipeline for 2026 is strong, with hopes to crest $150 million and potentially exceed $200 million in acquired revenues, focusing on quality and strategic fit. He noted that John Casella remains active in sourcing acquisitions. EVP and CFO Brad Helgeson added that rollover revenue from 2025 acquisitions into 2026 is light. Brad Helgeson also stated that the Hawk Ridge closure's headwind is baked into guidance and not significant, but the North Country landfill ramp-down will be more significant, representing a 20 basis points headwind to EBITDA margin as it plans for closure in 2027.

Trevor Romeo asked about Casella's M&A outlook, comparing it to past years' double-digit revenue additions, the current pipeline, and the likelihood of achieving similar elevated M&A contributions in the current year. He also inquired about the impact of the Hawk Ridge facility closure and the North Country landfill ramp-down on the guidance, asking for a size estimate of the impact.

Answer

Ned Coletta, President and CEO, noted that 2023 and 2024 were strong M&A years, while 2025 was lighter. He stated the current pipeline is robust with several larger, high-quality companies, and hopes to crest $150 million in 2026, potentially reaching over $200 million. He emphasized discipline in acquisitions, focusing on quality and strategic fit. Brad Helgeson, EVP and CFO, added that a light rollover of acquisition revenue into 2026 was expected due to 2025 being lighter and front-end loaded. For facility impacts, Brad Helgeson said the Hawk Ridge closure would be a small headwind, while the North Country landfill ramp-down would be more significant, representing a ~20 basis points headwind to EBITDA margin.

Trevor Romeo questioned the drivers of volume performance, asking to distinguish between underlying economic trends and company-specific initiatives. He also sought more detail on why labor costs are running significantly higher in the Mid-Atlantic region.

Answer

CFO Bradford Helgeson stated that cyclical roll-off volumes have stabilized since Q1 and overall company volume was positive. President Edmond Coletta highlighted that a significant portion of landfill volume growth was from increased internalization. Regarding labor, Coletta explained that Mid-Atlantic costs are higher as a percentage of revenue due to a lack of automation and route optimization, an opportunity that will be realized more slowly than planned due to truck delivery delays.

Trevor Romeo from William Blair & Company inquired about the drivers of volume performance, asking to separate underlying economic trends from company-specific initiatives. He also sought more detail on why labor costs were running higher in the Mid-Atlantic region.

Answer

EVP & CFO Bradford Helgeson noted that the roll-off business has stabilized, indicating a stable economy, and that overall company volume was positive. President Edmond Coletta added that a significant portion of landfill volume growth was from increased internalization. Regarding labor, Coletta explained that Mid-Atlantic costs are higher as a percentage of revenue due to a lack of automation and route optimization, which represents a multi-year synergy opportunity that has been slowed by truck delivery delays.

Trevor Romeo of William Blair & Company asked about the strength of the 5.6% solid waste pricing in Q1, whether it could decelerate, and the progress of integration efforts for recent acquisitions, including their impact on margins.

Answer

Executive Jason Mead confirmed that Q1 pricing was slightly ahead of budget and the full-year guidance of approximately 5% remains, though moderation is typical. He highlighted strong commercial pricing. Executive Ned Coletta added that acquisition integrations are ahead of pro forma expectations, with systems and IT being the most complex area offering future value. CEO John Casella noted that a planned system upgrade to a newer version of Softpak represents a significant, low-risk opportunity for future value creation.

Trevor Romeo from William Blair asked about the solid waste pricing strength in Q1, whether it surpassed expectations, and if there's potential for deceleration. He also questioned the progress of integration efforts for recent acquisitions and their net margin impact.

Answer

Executive Jason Mead confirmed that Q1 pricing was slightly ahead of budget but the full-year guidance of approximately 5% remains, acknowledging potential for slight moderation. Executive Ned Coletta addressed integration, stating that operational and HR efforts are proceeding well, while IT systems present the most complexity and future opportunity. He confirmed a net margin tailwind from acquired businesses. CEO John Casella added that a planned IT system upgrade represents a significant long-term value creation opportunity.

Trevor Romeo inquired about the progress of landfill development initiatives, specifically the timeline and capacity expansion at Juniper Ridge and the volume ramp-up at the McKean facility. He also asked for details on the Royal acquisition, including its strategic importance in the Hudson Valley and its expected financial contribution and synergy potential.

Answer

CEO John Casella explained that the Juniper Ridge landfill received a crucial permit securing capacity for the next 10 years, while the McKean facility is in a test phase with no significant near-term volume ramp-up planned. President Ned Coletta added that McKean is a long-term strategic asset and that the Royal acquisition, a mid-teens EBITDA margin business, offers significant synergy potential through operational improvements and landfill internalization, with a goal to reach mid-20s margins.

Trevor Romeo asked for clarification on the underlying margins in Q1 guidance, excluding the impact of labor disruption revenue. He also inquired about the long-term targets of 4%-6% organic growth beyond 2026, seeking expectations for each segment and the factors influencing the range.

Answer

CFO Brian Scott provided calculations, indicating that Q1 revenue excluding labor disruption would be in the $625 million-$640 million range, with gross margin around 26.8%-27% (after removing a 300 basis point drag from strike revenue). He stated that the long-term 4%-6% organic growth target, expected from 2027 onwards, is anticipated across all segments, driven by volume, rate, increasing healthcare consumption, and market share gains. He highlighted operating leverage from system investments and AI integration as key to achieving double-digit Adjusted EBITDA growth.

Trevor Romeo of William Blair asked for clarification on AMN Healthcare's underlying margins, excluding the impact of labor disruption revenue, based on the Q1 guidance. He also inquired about the long-term target of 4%-6% organic revenue growth beyond 2026, seeking expectations for each segment and the factors that could drive performance to the high or low end of that range.

Answer

Brian Scott, Chief Financial and Operating Officer, provided calculations to estimate underlying Q1 gross margin (around 26.8%-27%) and Adjusted SG&A (around $130-135 million) by stripping out labor disruption. For long-term growth, Mr. Scott stated that after regaining positive year-over-year growth across segments in 2026, he expects all segments to contribute to the 4%-6% range in 2027 and beyond, driven by normalized staffing demand, market share gains, and operating leverage from technology investments and AI.

Trevor Romeo of William Blair inquired about clients' current sentiment on contingent labor needs, seeking detail on demand trends from Q2 into July. He also asked about the drivers of the improved gross margin in the Nurse and Allied segment and the outlook for spreads.

Answer

President & CEO Cary Grace explained that client uncertainty over government policy led to a Q2 slowdown, particularly from academic medical centers, but demand stabilized in July with a sharp rebound in traveler extension rates. CFO & COO Brian Scott added that the gross margin improvement was driven by factors like a payroll tax benefit and favorable business mix, with underlying spreads remaining stable.

Trevor Romeo asked about the trend of unfilled, low-margin orders, questioning if competitors are becoming more disciplined and what it would take for clients to increase bill rates. He also sought to understand the drivers behind the strong performance in the labor disruption business and its potential for more consistent revenue and margins.

Answer

President and CEO Cary Grace suggested that the high level of unfilled orders reflects competitor rationality in avoiding economically unviable contracts, and that clients typically raise rates when their need becomes immediate. On labor disruption, Grace attributed the outperformance to AMN's internal focus and enhanced technological capabilities, which allow them to manage events without disrupting core services, rather than an increase in market-wide strike activity. CFO and COO Brian Scott added that while the business remains lumpy, its gross margins are not materially different from the segment average, and it provides strong EBITDA flow-through.

Trevor Romeo of William Blair inquired about the recent monthly trends in traveler on assignment (TOA) volumes and the demand trends observed in the school staffing business.

Answer

CEO Caroline Grace reported that total Nurse and Allied travelers increased slightly at the end of 2024 before a seasonal dip in Q1, with international creating a headwind. Both Grace and CFO/COO Brian Scott noted a strong start to 2025 for the school staffing business, with booking trends for the next school year running ahead of the prior year, indicating a potential volume recovery. Grace also mentioned the positive reception of the Televate virtual support technology.

Trevor Romeo asked about the future margin outlook, the drivers for SG&A, the growth prospects for the language services business, and details on discrete items benefiting Q3 revenue.

Answer

President and CEO Cary Grace explained that gross margin improvement would come from a favorable business mix (VMS, search, interim, international nurse) and improved bill-pay spreads, leading to SG&A leverage. She confirmed healthy demand and a 40%+ gross margin profile for language services, with a temporary Q3 growth slowdown expected to reverse in Q1. Executive Randle Reece clarified the discrete items were a sales allowance and SLA true-up in the Nurse and Allied segment, which benefited consolidated gross margin by about 100 basis points.

Trevor Romeo asked about Republic Services' PFAS remediation business, seeking an estimate of expected revenue for the current year and a forward outlook based on regulatory developments and customer demand, particularly regarding its long-term opportunity. He also inquired about other potential long-term tailwinds for the Environmental Solutions (ES) business, such as reshoring and infrastructure funding, and their expected impact.

Answer

CEO Jon Vander Ark estimated PFAS remediation revenue for the current year to be in the $50 million-$75 million range, viewing it as a significant long-term growth opportunity, though its development pace may be influenced by the current administration. He noted the company is working through regulations and sees opportunities on both the ES and landfill sides, while managing potential headwinds on the recycling and waste side. Regarding reshoring and infrastructure funding, Mr. Vander Ark believes these will be 'very real' tailwinds, driven by cheap energy and policy, but acknowledged short-term paralysis due to trade policy uncertainty. He expressed optimism that rules will settle, leading to demand drivers for both ES and the manufacturing portion of the recycling and waste business.

Trevor Romeo of William Blair & Company asked for an update on the M&A pipeline and for guidance on the consolidated margin cadence for the second half of the year.

Answer

CEO Jon Vander Ark described the M&A pipeline as strong and robust, consisting mainly of tuck-in and regional deals rather than transformational ones. CFO Brian Delghiaccio detailed the second-half margin cadence, explaining that Q3 margins will face a tough comparison against a 40 basis point benefit in Q3 2024, likely resulting in slightly negative year-over-year performance. He expects Q4 margins to be positive year-over-year.

Trevor Romeo of William Blair asked for an update on the M&A pipeline, including deal size and segment focus. He also inquired about the expected quarterly cadence for consolidated margins in the second half of the year.

Answer

CEO Jon Vander Ark described the M&A pipeline as strong and robust, consisting mostly of regional and small tuck-in deals, with no transformational deals in the immediate term. CFO Brian Delghiaccio addressed margins, noting the second half faces a tough comparison due to a $20 million out-of-period benefit in 2024. He expects a slightly negative year-over-year margin in Q3 and a slightly positive one in Q4, resulting in relatively flat performance for the second half overall.

Trevor Romeo asked about the specific drivers for the 4% decline in MSW landfill volumes and the opportunity for upgrades across the traditional recycling facility footprint.

Answer

CFO Brian DelGhiaccio attributed the MSW volume decline primarily to weather, while highlighting that strong yield of 6.8% led to overall organic growth for the MSW line of business. CEO Jon Vander Ark explained that recycling facility upgrades are a continuous process of adding automation to improve product quality and efficiency, not just one-off projects like the recent Anaheim rebuild.

Trevor Romeo inquired about the pricing environment and growth drivers within the Environmental Solutions business, and also asked about the labor environment, specifically the historical context of the improved employee turnover rate.

Answer

CEO Jon Vander Ark stated that ES margin expansion will continue through pricing and efficiency, though at a more moderate pace. He noted that the current employee turnover rate is at a 'decade low' and, while further large improvements are unlikely, they will continue to seek incremental gains.

Trevor Romeo of William Blair asked about the sustainability of the pricing spread between open market and restricted contracts and the progress in shifting contracts away from CPI. He also inquired about current labor availability and wage inflation trends.

Answer

CFO Brian DelGhiaccio stated the current open market versus restricted spread is wider than the historical norm but expects pricing to remain above cost inflation. He noted 61% of historical CPI contracts have been moved to more favorable terms. CEO Jon Vander Ark added that labor turnover is down 100 basis points year-over-year, wage inflation is around 4.5%, and labor availability is improving, though technician roles remain challenging.

Trevor Romeo asked about the E&P business, specifically its organic growth in Q4, and the modeling for 2026 (flattish), including expectations for the U.S. versus Canada and any seasonal basis.

Answer

Mary Anne Whitney (CFO) reported that the E&P business outperformed in Q4, the seasonally weakest quarter, with benefits from U.S. remediation work and continued outperformance in Canada, despite lower rig count and crude values. She expects flattish performance for 2026, with any improvement being upside, noting the Canadian business's steadiness.

Trevor Romeo with William Blair asked about the organic growth in the E&P business in Q4, and how to model E&P for 2026 (flattish), including expectations for U.S. versus Canada and any seasonal basis.

Answer

Mary Anne Whitney (CFO) reported Q4 E&P outperformance due to U.S. remediation work and continued strength in Canada, despite lower rig count/crude values. For 2026, 'flattish' is expected, with Canada's production-oriented business showing steadiness, and U.S. remediation being episodic.

Trevor Romeo from William Blair inquired about solid waste pricing trends and the outlook for the second half of the year. He also asked for more details on the company's strategy to make opportunistic fleet purchases to mitigate potential tariff impacts.

Answer

CFO Mary Whitney noted that pricing is trending above the initial 6% full-year guide due to strong retention, with a typical sequential step-down expected. CEO Ronald Mittelstaedt added that suppliers anticipate a 4-5% fleet cost increase in 2026, with WCN accelerating some purchases to hedge against this, utilizing bonus depreciation to manage the cash flow impact.

Trevor Romeo of William Blair requested more detail on the strategic rationale for acquiring a New Jersey recycling facility and asked about potential headwinds affecting the Q2 margin guidance.

Answer

Executive Ronald Mittelstaedt described the New Jersey acquisition as a strategic, state-of-the-art facility essential for processing growing volumes from the company's New York City franchise business. CFO Mary Anne Whitney explained that the Q2 margin outlook reflects a 40 basis point greater year-over-year drag from tougher commodity comps and reduced benefits from acquisition rollovers compared to Q1.

Trevor Romeo asked about the remaining future opportunities for EPR in provinces not yet fully implemented, whether incremental contract awards are still a potential upside driver, and the competitive landscape for new EPR deals. He also sought color on GFL's M&A pipeline, specifically regarding regional or asset perspectives and attractive opportunities.

Answer

CEO Patrick Dovigi stated that GFL is largely through material EPR opportunities, with Alberta being the last major province finalized, splitting processing with Waste Management. He noted that any remaining collection contracts would be normal course. Regarding M&A, Dovigi highlighted a very healthy pipeline focused on businesses in existing markets to leverage infrastructure and create synergies, aiming for $750 million-$1 billion in 2026, potentially higher. CFO Luke Pelosi added that GFL can turn suboptimal tuck-ins into high-quality assets through synergy capture.

Trevor Romeo asked about remaining future opportunities for EPR contracts, the competitive landscape for new deals, and color on GFL's M&A pipeline, including regional and asset perspectives.

Answer

Founder and CEO Patrick Dovigi stated that GFL is largely through material EPR contract awards, with Alberta being the last major province finalized. He described the M&A pipeline as very healthy, focusing on businesses in existing markets to create strong synergy opportunities and higher returns on invested capital. CFO Luke Pelosi added that the strategy allows for densification and turning suboptimal tuck-ins into accretive assets.

Trevor Romeo inquired about the drivers behind GFL's Q3 pricing metric, which showed an unusual 50 basis point increase quarter-over-quarter, asking if specific segments or mixed impacts contributed to this improvement. Romeo also sought an update on labor turnover trends and their implications for wage inflation in the coming year.

Answer

Luke Pelosi, CFO of GFL, attributed the pricing improvement to new EPR contracts coming online, particularly in Canada, and the successful execution of ancillary surcharge strategies, which are bolstering blended pricing. Patrick Dovigi, CEO and Founder of GFL, noted that voluntary labor turnover has returned to pre-COVID levels of high teens, down from over 30% during COVID, and expressed confidence in further improvements, which will positively impact margins.

Trevor Romeo inquired about the Q3 price metric, noting its deviation from typical seasonal patterns, and asked for details on specific drivers or mixed impacts. Romeo also requested an update on labor turnover, including improvements seen this year, future possibilities, and its translation into current and projected wage inflation.

Answer

Luke Pelosi (CFO, GFL) attributed the atypical price increase to new EPR contracts coming online off-calendar (boosting Canadian pricing to high-sixes) and successful execution of ancillary surcharge strategies, providing incremental support and conviction for 2026 pricing. Patrick Dovigi (CEO and Founder, GFL) stated that voluntary labor turnover is in the high teens, returning to pre-COVID levels (17-19%) from over 30%, with potential to trend lower to mid-teens, further improving margins, despite some high-quality drivers still expecting above-average increases.

Trevor Romeo asked for more color on the acceleration in demand for the India Development Center, including examples of recent wins.

Answer

Dave Kelly (COO, Kforce) explained that the India Development Center supports domestic project work, driven by demand for a blended model due to cost-effectiveness and access to highly skilled talent. He noted it ties into data and digital work, consulting-related engagements (especially for large companies), and traditional staff augmentation, playing to both sides of Kforce's value propositions.

Trevor Romeo followed up on client demand confidence, asking what specific environmental factors are compelling clients to act on technology projects now. He also questioned if the sequential momentum reflects increased aggregate spending or a shift in priorities, and sought more details on the accelerating demand for the India Development Center.

Answer

President and CEO Joe Liberatore explained that clients are realizing the foundational work needed for AI, leading to increased modernization, digital, and data initiatives. He noted that organizations are 'tapped out internally,' driving demand for external staff augmentation and solutions. COO Dave Kelly added that data and digital backlogs are increasing at double-digit rates. Kelly further detailed that the India Development Center supports domestic project work, providing cost-effective access to highly skilled talent for both consulting and traditional staff augmentation, playing broadly across client value propositions.

Trevor Romeo of William Blair inquired about the drivers of the recent sequential growth in the Finance & Accounting (FA) business, asking if its strategic repositioning is complete and whether the improvement stems from Kforce's execution or a market uptick. He also sought clarity on recent gross margin performance, specifically the impact of healthcare costs versus Direct Hire mix.

Answer

COO David Kelly attributed the FA business's growth to a successful repositioning towards higher-skilled roles and strong execution by a tenured team, rather than a significant market improvement. CFO Jeffrey Hackman explained that recent gross margin pressure was primarily due to a lower-than-expected mix of Direct Hire revenue, not unfavorable healthcare costs. Hackman noted that Technology Flex margins and bill-pay spreads remain stable, supported by a growing mix of higher-margin consulting solutions.

Trevor Romeo inquired about the common themes or specific project types driving success in Kforce's consulting offerings. He also asked whether new AI-related opportunities are currently offsetting any potential near-term role disruption from the technology.

Answer

COO David Kelly cited broad success in consulting, with particular strength in application engineering, digital, and data rationalization projects that are foundational for AI. CEO Joseph Liberatore elaborated that current client demand is centered on 'AI readiness'—improving data, migrating to the cloud, and modernizing infrastructure. He noted that AI is reshaping existing roles (e.g., data scientists to AI engineers) rather than creating entirely new ones, which expands opportunities in high-demand skill areas.

Trevor Romeo asked about the historical lag time between an increase in business confidence and a corresponding rise in project spending. He also inquired about Kforce's market share gains over the past few years and the overall competitive landscape.

Answer

Executive Joseph Liberatore explained that a sentiment shift, which is now occurring, is the crucial first step, and that historically, temp work picks up first, followed by project work later in subsequent quarters. He noted positive leading indicators like increased client meetings and job orders. Regarding market share, Liberatore stated that Kforce has historically outperformed the market growth rate reported by SIA by 2x and expects that to continue, adding that the competitive landscape among top providers has been consistent.

Trevor Romeo inquired about the decision to choose India for the new development center over other regions like Latin America and asked for details on the current level of demand being driven by foundational AI preparation work.

Answer

COO David Kelly explained that India was chosen as a logical first step due to its vast and growing technology talent pool, describing the move as "additive" and not precluding future expansion into other regions. CEO Joseph Liberatore noted that while not broken out, demand for foundational AI work (data, cloud, governance) is "meaningful" and broad-based, providing Kforce with valuable experience as clients prepare for AI adoption.

Trevor Romeo asked about Protiviti's headcount growth plans for 2026, given its 1.5% growth last year and flat revenue, and the potential for revenue upside without significant additional headcount. He also inquired about typical Q2 seasonal trends for revenue and earnings.

Answer

CEO Keith Waddell explained that Protiviti's headcount, including contractors, flexes with revenue expectations, and its full-time staff is currently underutilized, indicating hidden capacity to scale up without significant new hires. CFO Michael Buckley detailed Q2 seasonal trends, noting modest sequential declines for contract Talent Solutions, seasonal increases for permanent placement, and Protiviti's recovery from Q1 lows, leading to higher profitability and a normalized tax rate compared to Q1.

Trevor Romeo inquired about Robert Half's headcount growth plans for Protiviti in 2026, given the 1.5% growth in Protiviti headcount (including contractors) last year against flat revenue, and the potential for revenue upside in that segment without significant additional headcount. He also asked for historical seasonal trends for Q2 revenue and earnings.

Answer

CEO Keith Waddell explained that Protiviti's full-time staff is currently underutilized, with some reassigned to roles typically performed by contractors, indicating hidden capacity. He stated that Protiviti is not concerned about scaling resources quickly as revenues support. CFO Michael Buckley outlined Q2 seasonal trends: contract Talent Solutions modestly down on a same-day basis, full-time up seasonally, Protiviti recovering from Q1 lows, and overall higher profitability in Q2 than Q1, with the tax rate normalizing to 33-34%.

Trevor Romeo inquired about Robert Half's longer-term operating margin opportunity, specifically focusing on internal initiatives and investments in technology and efficiency for the next couple of years, and their potential impact on margins independent of demand. He also asked about the size of the public sector revenue and any expected impact from the government shutdown.

Answer

CEO Keith Waddell highlighted moving up the skill curve in Talent Solutions for higher margins, relevering operating costs, and leveraging technology like award-winning matching engines and generative AI to enhance recruiter productivity. He also reiterated Protiviti's long-term goal of double-digit operating margins, expressing confidence in achieving higher overall operating margins in the next cycle. For the public sector, Mr. Waddell stated federal government revenue is less than 0.5%, and total government (federal, state, local) is around 4% of revenue, with no meaningful impact from the shutdown expected.

Trevor Romeo inquired about Robert Half's longer-term operating margin opportunity, focusing on internal initiatives like technology investments and productivity efficiencies, and their potential impact on margins independent of demand. He also asked about the size of the public sector revenue and any potential impact from the government shutdown.

Answer

CEO Keith Waddell highlighted moving up the skill curve in Talent Solutions for higher margins, relevering operating costs, and leveraging technology (matching engines, AI for lead prioritization) to boost recruiter productivity. He reiterated Protiviti's long-term double-digit operating margin potential, suggesting higher overall operating margins in the next cycle. For the public sector, Mr. Waddell stated federal government revenue is less than 0.5% and has seen no meaningful impact from the shutdown. Combined federal, state, and local government revenue is approximately 4% of total revenue.

Trevor Romeo asked if client confidence has returned to levels seen a few quarters ago and inquired about trends in the entry-level labor market, including any potential impact from AI.

Answer

President & CEO M. Keith Waddell responded that while confidence is improving and heading in the right direction, it has not yet returned to the 'euphoric' post-election levels. On AI, he stated it has had very little impact on revenues so far, noting that SMBs are later adopters and that Robert Half's technology investments position it to take market share.

Trevor Romeo asked about the evolving mix between high-skilled and operational roles within Talent Solutions and the demand for full-time engagement professionals (FTAPs). He also inquired about performance trends in the international business, which appeared to weaken in the first quarter.

Answer

Executive M. Waddell noted a continued shift up the skill curve, especially in technology, which has boosted bill rates. He explained that while the higher cost of FTAPs has pressured volumes, they represent a significant upside opportunity in a stronger market. Regarding international performance, Waddell attributed the weaker growth rate primarily to tougher year-over-year comparisons rather than a degradation in current performance and expressed optimism for opportunities in Europe.

Trevor Romeo from William Blair & Company inquired about the demand environment for Robert Half's international business, which appeared softer than the U.S. across both Talent Solutions and Protiviti. He also asked about the outlook for Protiviti's full-year 2025 operating margins and whether they could return to the double-digit range.

Answer

Executive M. Waddell characterized the international softness as modest, not dramatic, and noted that comps can influence growth rates. He stated they do not foresee a drastic falloff in international results. Regarding Protiviti's margins, Waddell affirmed the expectation that full-year operating margins would increase in 2025 and that the division's stated goal is a 'double, double'—double-digit revenue growth and a double-digit operating margin.

Trevor Romeo inquired about the impact of U.S. election uncertainty on demand for both Talent Solutions and Protiviti. He also asked about the company's internal headcount and its capacity to handle a rebound in revenue without significant hiring.

Answer

CEO M. Waddell explained that for Talent Solutions, general uncertainty about the election outcome is the primary headwind. For Protiviti, he expects minimal impact as its key regulatory drivers are largely non-partisan. He reiterated that the company has the capacity to grow revenue by 20-30% with its current staff but would hire proactively in a strong recovery to capture market share.

Trevor Romeo asked for the 2026 outlook for Healthcare Solutions EBITDA, including the amount of cost synergy capture in 2025 and incremental synergies for 2026, as well as expected underlying growth and margin expansion ex-synergies. He also questioned the $24.50 per MMBtu pricing expectation for 40% uncontracted RNG volumes, given higher spot prices.

Answer

CEO Jim Fish stated that 2025 SG&A synergies for Healthcare Solutions exceeded the initial 80-100 range, and the original $300 million synergy goal is comfortable, with cross-selling benefits often appearing in the core solid waste business. Chief Sustainability Officer Tara Hemmer explained that the $24.50 price for uncontracted RNG volumes is for the voluntary market, with RIN pricing anticipated to hold steady at $2.30-$2.40, and output doubling year-over-year.

Trevor Romeo, an Equity Research Analyst at William Blair, questioned WM's 2026 EBITDA outlook for Healthcare Solutions, seeking details on 2025 cost synergy capture, incremental synergies for 2026, and expected underlying growth and margin expansion excluding synergies. He also asked about the Renewable Natural Gas (RNG) business, specifically the $24.50 per MMBtu expectation for 40% uncontracted volumes and the outlook for RIN pricing in the voluntary market.

Answer

CEO Jim Fish and President John Morris confirmed that 2025 SG&A synergies for Healthcare Solutions exceeded the initial range, contributing to a comfortable outlook for the original $300 million synergy goal, with cross-selling benefits often appearing in the core solid waste business. Chief Sustainability Officer Tara Hemmer expressed confidence in absorbing 40% of RNG's uncontracted volumes in the voluntary market, anticipating RIN pricing to remain stable in the $2.30-$2.40 range, despite a softer U.S. market.

Trevor Romeo inquired about the deferral of pricing increases within the WM Healthcare Solutions business, asking which customers were affected and why, and how this impacts the long-term pricing power and confidence in achieving mid-single-digit revenue growth. He also asked for insights into the company's price-cost spread outlook for next year, considering improving turnover and incident rates.

Answer

CEO Jim Fish provided a comprehensive overview of WM Healthcare Solutions, emphasizing its strategic value despite ERP implementation challenges that led to deferred price increases and customer credits. EVP and CFO Devina Rankin clarified these actions were proactive for customer lifetime value, not reactive to pushback, expecting revenue restabilization in 2026. President and COO John Morris highlighted a strong price-cost spread in the core solid waste business, with core price at 6% against CPI around 2.93%, and noted record-low driver and technician turnover (16.8%) contributing to lower operating costs and improved safety metrics.

Trevor Romeo asked for more details on the deferred pricing increases in the WM Healthcare Solutions business, including customer types and reasons for pushback, and the long-term confidence in achieving mid-single-digit revenue growth. He also inquired about the price-cost spread outlook for 2026, considering current pricing, improving costs, and potential wage inflation trends.

Answer

Jim Fish (CEO) provided a comprehensive overview of WM Healthcare Solutions, emphasizing its strategic value. He explained that deferred price increases and customer credits were due to ERP implementation challenges and a focus on customer lifetime value. Devina Rankin (EVP and CFO) reiterated these actions were proactive. John Morris (President and COO) highlighted that the core solid waste business's strong performance would offset healthcare's temporary headwinds. For price-cost spread, John Morris noted a 4.1% yield for traditional solid waste, 6% core price, operating expenses below 60% of revenue, and record-low driver/technician turnover.

Trevor Romeo of William Blair asked about the drivers of the increasing landfill internalization rate and its future potential, and also inquired about voluntary workforce turnover at the acquired Healthcare Solutions business.

Answer

President & COO John Morris attributed the rising internalization rate, now above 71%, to the value of WM's differentiated post-collection network, noting it's a long-term trend. SVP Rafael Carrasco reported that turnover for the hourly workforce at Healthcare Solutions has actually improved since the acquisition, crediting WM's human-centered leadership approach.

Trevor Romeo asked about the increased 2025 M&A outlook of $500 million, questioning if it was fully included in guidance and what market dynamics were driving the opportunities. He also requested anecdotes from customer conversations regarding the value proposition of the combined WM and healthcare businesses.

Answer

EVP and CFO Devina Rankin confirmed the increased M&A is now reflected in the upside of guidance. EVP and COO John Morris attributed the strong M&A pipeline to market uncertainty, labor pressures on smaller operators, and the increasing value of WM's disposal network. Executive Rafael Carrasco shared that customers are excited about WM's sustainability expertise and analytics platform, highlighting a large cross-sell opportunity as only 17% of customers are currently shared.

Trevor Romeo of William Blair inquired about the organic performance of the Stericycle business, asking for its Q4 like-for-like results and the drivers behind its 9% organic growth forecast for 2025. He also asked for the key puts and takes in the 2025 collection and disposal volume guidance.

Answer

EVP and CFO Devina Rankin clarified the 9% growth is for EBITDA, driven by network expansion and fleet optimization, with revenue guided to grow 2.5-5%. Rafael Carrasco, head of WM Healthcare Solutions, added that improved data analytics will help prevent revenue leakage. EVP and COO John Morris explained the volume guidance reflects strong landfill momentum and a robust special waste pipeline, offset by the intentional shedding of unprofitable residential business and softness in the industrial sector.

Trevor Romeo asked for more detail on the drivers of strong landfill volume growth in the quarter and the reasons for the increase in the total sustainability CapEx budget.

Answer

EVP & COO John Morris attributed the strong landfill performance to broad-based strength, with a notable contribution from a new rail-served operation in the Midwest. SVP & Chief Sustainability Officer Tara Hemmer explained the higher CapEx budget is due to construction cost inflation for RNG plants and increased utility interconnect costs. EVP & CFO Devina Rankin added that the 2024 increase also reflects an intentional acceleration of spending.

Trevor Romeo inquired if the improvement in placement solutions like professional search, interim, and RPO new business was primarily due to cross-referrals and the 'We Are Korn Ferry' strategy, or if it indicated a broader client willingness to hire. He also asked about the drivers of strong consulting bill rates and the impact of AI on pricing.

Answer

CEO Gary Burnison confirmed the strategy's effectiveness, noting sequential upticks in Professional Search and Interim, and a 'killer quarter' for RPO new business, largely renewals. He stated the market hasn't significantly changed. He explained consulting bill rate growth reflects the firm's integration and focus on larger, more impactful engagements, particularly in org strategy, rather than AI pressure. CFO Bob Rozek added that larger engagements (over $500k) now represent 40% of new consulting business.

Trevor Romeo inquired about the improvement in placement-type solutions (Professional Search, Interim, RPO new business wins), asking if this was primarily driven by cross-referrals and the 'We Are Korn Ferry' strategy, or if there's an increased willingness among clients to hire and spend more.

Answer

CEO Gary Burnison affirmed that the strategy is clearly working, citing the firm's 3% growth guide compared to competitors' negative growth. He noted a sequential uptick of 7-8% in Professional Search and Interim Solutions, highlighting the success of the Interim solution in EMEA. Mr. Burnison also mentioned a 'killer quarter' for RPO new business, driven by renewals and AI use, and stated that the overall market hasn't significantly changed. For the consulting solution, Mr. Burnison attributed the 10% year-over-year increase in bill rates to the integration of the firm and larger, more impactful engagements, particularly in organizational strategy. CFO Bob Rozek added that engagements over $500,000 now constitute 40% of new consulting business, up from 37% last quarter, indicating a shift towards larger, transformational projects.

Trevor Romeo inquired about the upcoming Talent Suite rollout, specifically asking about key milestones, the expected timeline for financial benefits, and the long-term aspirational target for subscription and license revenue growth within the digital segment. He also asked about the Q2 revenue guidance.

Answer

CEO Gary Burnison indicated that the true financial benefits of Talent Suite would likely be seen towards the end of calendar year 2026, highlighting key milestones such as accelerating partnerships with large HCM players, training 1,800 frontline consultants, and a targeted strategy for marquee and diamond accounts. He also stated an aspirational target of over 60% for subscription and license revenue as a percentage of the digital segment, emphasizing scale through partnerships. CFO Bob Rozek added that Talent Suite is also an enabler for other services, providing easier access to IP, data, and content, with AI/GenAI layers for faster insights. Regarding Q2 guidance, Bob Rozek noted a slight conservatism given the uncertain economic backdrop.

Trevor Romeo inquired about the upcoming TalentSuite rollout, seeking details on key milestones, the expected timeline for financial benefits, and Korn Ferry's long-term target for subscription and license revenue within the digital segment. Romeo also asked about the Q2 revenue guidance, questioning if it reflected conservatism given typical seasonal strength.

Answer

CEO Gary Burnison outlined TalentSuite milestones including accelerating partnerships with large HCM players, extensive internal consultant training, and a targeted strategy for marquee and diamond accounts, expecting true financial benefits towards the end of calendar 2026. Burnison also stated an aspirational target of over 60% for subscription and license revenue as a percentage of the digital segment, emphasizing scale through partnerships. CFO Robert Rozek added that TalentSuite is also an enabler for other services, leveraging AI/GenAI for faster data insights. Regarding Q2 guidance, Rozek confirmed a conservative approach due to market uncertainties.

Trevor Romeo asked about the upcoming TalentSuite rollout, including key milestones for its commercial launch in November and the expected timeline for its financial benefits to materialize. He also inquired about the long-term aspirational target for digital subscription and license revenue as a percentage of the digital segment, and sought clarification on the Q2 revenue guidance, which showed a slight sequential dip despite typical seasonal strength.

Answer

CEO Gary Burnison outlined key TalentSuite milestones, including accelerating partnerships with large HCM players, robust internal training for 1,800 consultants, and a targeted strategy for marquee and diamond accounts. He projected true financial benefits to be realized towards the end of calendar 2026. For digital subscriptions, Burnison stated an aspirational target of 'north of 60%' of the segment, emphasizing partnerships for scale. CFO Bob Rozek added that TalentSuite also serves as an enabler for other services. Regarding Q2 guidance, Rozek attributed the conservative outlook to ongoing market uncertainties.

Trevor Romeo of William Blair asked for color on recent new business trends by month and the key drivers behind the strong 15% growth in Executive Search during the quarter.

Answer

CEO Gary Burnison noted that while uncertainty persists, May's new business was stronger than April's. For Executive Search, he advised against focusing on a single quarter, instead highlighting the firm's consistent long-term growth, diverse solutions, and favorable demographic trends creating demand for new types of leaders.

Trevor Romeo inquired about the key drivers behind Korn Ferry's recent productivity improvements and the potential for further gains, as well as the sources of the strong new business growth in the RPO segment.

Answer

CEO Gary Burnison attributed productivity gains to a strategic pivot towards more profitable work, resulting in higher hourly rates and 35-40% more revenue than pre-pandemic levels with the same headcount. Executive Robert Rozek added that future productivity will be enhanced by GenAI. Regarding RPO, Burnison explained that growth stems from a mix of winning new logos, targeting marquee accounts, and strength in the healthcare sector, all underpinned by a long-term labor supply-demand imbalance.

Trevor Romeo of William Blair questioned Korn Ferry's long-term EBITDA margin target of 16-18%, asking if there was potential upside given current performance, and inquired about the drivers behind the weaker-than-typical sequential revenue guidance for Q2.

Answer

Executive Gary Burnison acknowledged potential upside to the margin target but confirmed the company is sticking with the 16-18% range for now, citing successful past restructuring and ongoing reinvestment. For the Q2 guidance, Burnison attributed the flattish outlook to global macro events like snap elections and a strategic shift in consulting towards larger, longer-cycle engagements.

Trevor Romeo asked about the confidence level regarding the non-recurrence of France's additional business tax beyond 2025 and the macro drivers behind the Manpower brand outperforming Experis, specifically considering AI's role, labor hoarding, and frozen white-collar markets.

Answer

EVP and CFO Jack McGinnis stated it's too early to definitively say if the French surcharge will recur, noting discussions about a lower level for 2026. Chairman and CEO Jonas Prising attributed Manpower's rebound to improving PMI and employer resilience. He suggested Experis's underperformance is due to companies shifting priorities to AI investments, slowing traditional IT projects, but expects demand for traditional digital projects to return.

Trevor Romeo asked about the confidence level regarding the French business tax not recurring beyond 2025 and the macro drivers behind the Manpower brand (blue-collar staffing) outperforming Experis (white-collar staffing), including the potential roles of AI and labor hoarding.

Answer

EVP and CFO Jack McGinnis stated it's too early to definitively say if the French business tax will recur, noting discussions about a potential lower surcharge in 2026. Chairman and CEO Jonas Prising attributed Manpower's outperformance to improving PMI and employer resilience. He explained that Experis's performance is impacted by companies shifting IT investment priorities towards AI, leading to slower demand for traditional IT projects, which he views as a temporary 'moment in time.'

Trevor Romeo of William Blair & Company asked about the potential economic flow-through from increased defense and infrastructure spending in Europe, and the outlook for U.S. manufacturing reshoring following recent tariff rollouts.

Answer

Chairman & CEO Jonas Prising expressed that increased European defense spending will have a positive effect on the broader economy, particularly manufacturing, where ManpowerGroup is well-positioned. On U.S. reshoring, he noted that clients are taking a pragmatic view of tariffs and are considering expanding U.S. manufacturing capacity, which would be beneficial for ManpowerGroup's business.

Trevor Romeo inquired about the drivers behind the U.S. Manpower brand's 7% growth, the potential impact of reshoring, and the status of the back-office transformation spend, including its expected future margin benefit.

Answer

CEO Jonas Prising credited the U.S. Manpower brand's strong performance to service innovation, such as Walmart branch openings, and the successful application of data analytics and AI to provide clients with differentiated workforce insights. CFO Jack McGinnis updated that the back-office transformation is progressing well, with about 50% of revenues on the new platform. He anticipates significant savings to begin inflecting in 2026, potentially delivering a 40-50 basis point margin benefit from cost efficiencies and reduced program spending.

Trevor Romeo inquired about the drivers of growth in the Talent Solutions brand, particularly in RPO and MSP, and asked for the rationale behind the softer Q1 outlook for the APME segment.

Answer

Chief Financial Officer John McGinnis explained that the MSP business saw strong double-digit growth in Q4, while the RPO business crossed over to growth, driven by select U.S. client programs. He noted that the softer APME outlook for Q1 is due to normal seasonality and contract resets after a strong Q4, not a change in underlying trends, with Japan and India remaining strong.

Trevor Romeo asked about the growing performance gap between the Manpower and Experis brands and the strategic rationale behind the South Korea divestiture.

Answer

CEO Jonas Prising explained the Experis brand is facing temporary headwinds from a post-pandemic normalization in IT hiring, while the Manpower brand has been more resilient. He also stated the South Korea sale aligns with a strategy to transition complex, lower-margin markets to a franchise model. CFO John McGinnis noted the financial impact on EPS is not significant for Q4.

Trevor Romeo from William Blair asked for more specific details embedded within the Q2 guidance for each business segment and inquired about the potential for the Mexico near-shoring capability to see resilient demand amid client cost-cutting.

Answer

CFO Marie Perry reiterated that guidance is provided on a consolidated basis but noted the DOGE impact was less than 2% of total revenue. CEO Ted Hanson added that the revenue-per-billable-day environment has been stable. Executive Vice Chairman Rand Blazer confirmed that the Mexico near-shore capability continues to grow as clients pursue cost efficiencies and that it is an integral part of their technology solutions.

Trevor Romeo asked about the strategic rationale for acquiring TopBloc, the long-term opportunity within the Workday ecosystem, and potential synergies. He also inquired about the commercial demand environment and whether the company is seeing early signs of improving client activity.

Answer

CEO Theodore Hanson described the TopBloc acquisition as a high-return use of capital, driven by strong customer demand for Workday ERP implementations, which are critical for deploying AI. President Randolph Blazer confirmed they are seeing positive leading indicators in the commercial segment, including improvements in backlog, pipeline, bookings, and activity levels in key sectors like financial services, which gives them confidence in a future recovery.

Trevor Romeo asked for a breakdown of the Q4 revenue guidance, focusing on the sequential trend in the core travel business, and inquired about the industry dynamics needed to alleviate gross margin pressures.

Answer

CFO William Burns clarified that the Q4 revenue guidance reflects a $5-6 million impact from a non-recurring labor disruption. Excluding this, the travel business is expected to decline by low-to-mid single digits, offset by a ~70% sequential increase in the education business. On margins, Burns cited competitive pressure on the pay-bill spread in travel. CEO John Martins added that margins will improve when the gap between hospital bill rates and clinician pay expectations closes, which he anticipates as demand firms up.

Trevor Romeo asked for a breakdown of the Q4 revenue guidance, focusing on the sequential trend in the core travel business, and inquired about the necessary industry conditions for gross margin pressures to alleviate.

Answer

CFO William Burns explained the Q4 sequential revenue decline is primarily due to a non-recurring labor disruption worth $5-$10 million. Excluding this, the core travel business is expected to decline by low to mid-single digits, offset by a nearly 70% sequential increase in the education business. CEO John Martins added that for gross margins to improve, the gap between hospital bill rates and clinician pay expectations must close, which he anticipates as demand increases with the flu season and rising census.

Asked about the reasons for the recent demand uptick from the client's perspective and whether there have been any indications regarding seasonal "winter needs."

Answer

Executives stated that clients are comfortable with their current staffing mix and that the demand increase is driven by higher patient census and acuity, not seasonal needs. They expect winter orders to come later than usual this year, likely around September.

Trevor Romeo of William Blair asked for the client consensus on why demand is increasing and whether hospitals seem to have reached a new post-pandemic equilibrium in their staffing mix. He also inquired about any early indications for seasonal 'winter needs' orders.

Answer

CEO John Martins confirmed that clients seem comfortable with their current levels of contingent labor, driven by rising patient census and acuity from deferred healthcare. He noted this appears to be a prolonged issue, suggesting a new equilibrium. Regarding seasonal demand, Martins stated the current uptick does not include any winter needs. He added that clients are waiting longer than usual to place these orders, and he now anticipates them arriving closer to September.

Trevor Romeo inquired about the client-side drivers for the recent increase in demand and whether hospitals are now comfortable with their staffing mix. He also asked for any early indications on winter needs.

Answer

CEO John Martins confirmed that clients seem comfortable with their current contingency labor levels, driven by higher patient census and acuity, which has stabilized demand. He noted the current demand uptick does not include seasonal 'winter needs' orders, which he now expects to materialize later than usual, possibly in September.

Trevor Romeo inquired about the drivers behind the Q2 revenue guidance, which indicates a larger-than-historical sequential decline, and asked whether this trend is industry-wide or company-specific. He also questioned the supply-side dynamics for the Locum Tenens business.

Answer

CFO Bill Burns confirmed the Q2 outlook is not following historical patterns and is driven entirely by continued softness in travel nurse demand. CEO John Martins added that this is a market-wide condition, though he noted demand has stabilized over the last six weeks. Regarding Locums, Martins stated there is a long runway for growth as more physicians embrace the flexibility of temporary assignments.

Inquired about client sentiment on contract labor spend, the reasons for the significant Q1 revenue decline guidance compared to peers and seasonality, and the M&A pipeline.

Answer

Clients are generally content with current contract labor levels, realizing a certain amount is necessary, suggesting the market is near a bottom. The steep Q1 guidance is almost exclusively due to a drop in travel demand, and the company's faster growth in prior years creates a different comparison base than competitors. On M&A, it's a buyer's market with opportunities in locums, Allied, and especially the fragmented Education space.

Trevor Romeo of William Blair & Company asked if the strong 2019 revenue guidance was primarily due to the HSS joint venture ramp-up, the size of the headwind from the FSAC monitorship wind-down, the projected 2019 tax rate, and the reason for the Q4 impairment charge.

Answer

CFO Stephen Lieberman clarified that robust 2019 growth expectations are driven by the full suite of managed services across both Healthcare and FSAC, in addition to solid consulting growth, not just the HSS venture. He described the monitorship wind-down as a 'meaningful headwind' on the consulting side that is being actively replaced. He projected a 2019 tax rate of 28-30% and explained the minor impairment was for discontinued software in the FSAC segment. Chairman and CEO Julie Howard added that the monitorship's revenue had already been ramping down prior to 2018.

Trevor Romeo from William Blair inquired about the Q3 revenue contribution from the Health Systems Solutions (HSS) joint venture, the drivers behind the significant headcount growth in the Financial Services Advisory and Compliance (FSAC) segment, and the specific practice areas showing improved demand in healthcare consulting.

Answer

CFO Stephen Lieberman confirmed the HSS revenue ramp-up is on track with the previously stated $25 million estimate for 2018. CEO Julie Howard explained that the FSAC headcount increase was primarily to staff a new, significant multi-year managed services engagement, with some additional investment in technology capabilities for financial crime services. She also noted that demand improvement in healthcare consulting was concentrated in the strategic transformation area, with assessment projects converting to larger implementation engagements.