ROBERT HALF (RHI)·Q4 2025 Earnings Summary

Robert Half Surges 10% After Beating Q4 Estimates, Signaling End of 3-Year Decline

January 29, 2026 · by Fintool AI Agent

Robert Half (NYSE: RHI) delivered Q4 2025 results that beat consensus on both revenue and EPS, sending shares up 10% in after-hours trading to $29.70. The staffing and consulting company reported its first sequential revenue growth in over three years, with CEO Keith Waddell declaring the long downturn may be ending.

"We are very pleased to see Talent Solutions and enterprise revenues return to positive sequential growth on a same-day constant currency basis for the first time in over three years. Weekly revenue trends during the quarter continued to show positive momentum, which extended into the first three weeks of January." — Keith Waddell, CEO

Did Robert Half Beat Earnings?

Yes — beats on both metrics:

*Values retrieved from S&P Global

Results exceeded the midpoint of prior guidance, though year-over-year comparisons remain challenged:

Cash flow was particularly strong — the highest quarter of the year and up 18% versus Q4 2024.

How Did the Stock React?

RHI shares surged 10% in after-hours trading to $29.70, up from the $26.95 close — a strong reaction reflecting investor optimism about the inflection point.

The stock remains down ~56% from its 52-week high, suggesting significant upside if the recovery materializes.

What Did Management Guide for Q1 2026?

Management provided detailed Q1 2026 guidance reflecting continued stabilization but typical seasonal weakness:

The abnormally high tax rate is driven by two factors:

1. Stock compensation vesting — Most employee stock awards vest in Q1, creating a $4.5M charge ($0.05/share) due to stock price below grant values
2. Low pre-tax income — Non-deductible items are magnified against seasonally low Q1 earnings

Tax rate normalizes to 33-35% for Q2-Q4.

Segment Guidance (Adjusted YoY):

When Will Robert Half Return to Growth?

This was the key question on the call. CEO Keith Waddell provided a clear answer:

"If you take our current trend line from a sequential revenue point of view, we would return to positive year-over-year growth in the third quarter. And that would be both Talent Solutions, Protiviti, and Enterprise."

He added that weekly results through January 29 were "very encouraging and better than they had been even for the first three weeks."

What About AI Impact on Staffing?

One of the most interesting exchanges came when analysts asked about AI's impact. Waddell pushed back on the negative narrative:

"Most of the evidence suggests a negligible impact so far on our areas of employment, particularly among small businesses."

He cited a recent Oxford Economics study: "Firms don't appear to be replacing workers with AI on a significant scale, and we doubt that unemployment rates will be pushed up heavily by AI over the next few years."

The twist: AI is actually helping Robert Half's business. Job seekers using AI to tailor resumes are creating problems for employers:

"Over half of job seekers today are using AI to tailor their resume to the job requirement, which makes it harder for our clients to distinguish one candidate from another. Further, LLM hallucinations in that process of tailoring resumes are actually creating fictitious work histories to improve the match."

Robert Half tested the top three LLMs with 25,000 job descriptions and 50,000 resumes. The results: "One of the LLMs frequently fabricated and created fictitious work history. One of the LLMs never did that. And one was in the middle."

This makes vetting more valuable — and Robert Half has actual performance data on candidates from prior assignments.

How Did Each Segment Perform?

Talent Solutions (U.S. vs. International):

• U.S. Talent Solutions: $623M, down 9% YoY
• Non-U.S. Talent Solutions: $200M, down 8% YoY

Protiviti showed geographic divergence:

• U.S. Protiviti: $373M, down 6% YoY
• Non-U.S. Protiviti: $106M, up 9% YoY

Management explained the international strength: stronger regulatory environment for financial institutions overseas, plus U.S. regulators being "more accommodating," allowing clients to use internal resources.

What About Margins?

Protiviti margin outlook for 2026:

"Protiviti would be disappointed if for 2026, they didn't add 100-200 basis points to their gross and operating margins for the year."

The company noted significant unused capacity — 15-30% based on different metrics — meaning they can grow revenue without proportionate headcount additions.

Q&A Highlights

On SMB vs. Enterprise dynamics:

"SMB is in a very different place. They've added significantly fewer people the last four years. They've been in cost mode for quite some time... they're left very lean, not only from a full-time standpoint but contractors as well."

ADP data shows companies with fewer than 500 employees grew headcount only 1.1% annually since January 2022, versus 2.8% for larger companies.

On permanent placement outlook:

"Perm is stronger than the headlines would lead you to believe. We have just as much difficulty getting candidates to change jobs as we do getting clients having demand for additional roles."

On capital allocation and dividend sustainability:

"For all of 2025, our free cash flow covered the dividend, and we reached into the balance sheet for about $100 million to buy stock. Given those trends... we would have enough free cash flow in 2026 to cover the dividend."

On Q2 seasonal patterns: Q2 typically sees: contract revenue modestly down same-day, perm up seasonally, Protiviti recovers from Q1 lows. Tax rate normalizes to 33-34%.

Capital Allocation

The company added $100M to its cash balance in Q4 after paying the dividend — a sign of strong working capital management.

Industry Recognition

Robert Half continued its streak of accolades:

• Fortune World's Most Admired Companies — 29th consecutive year (only staffing company with this distinction)
• Forbes World's Top Companies for Women
• Newsweek America's Most Responsible Companies
• Glassdoor Best Places to Work — Protiviti's 3rd consecutive year

Key Takeaways

1. Beat consensus — Revenue +0.9%, EPS +6.7%, exceeding guidance midpoints
2. Stock surged 10% after-hours — Market sees potential inflection point
3. First sequential growth in 3+ years — Critical milestone for the recovery narrative
4. Path to positive YoY growth in Q3 2026 — If current trends continue
5. AI helping, not hurting — Resume fabrication making vetting services more valuable
6. Strong cash generation — Q4 operating cash flow up 18% YoY, dividend fully covered
7. Protiviti margin expansion expected — 100-200 bps improvement targeted for FY 2026
8. 15-30% unused capacity — Can grow revenue without proportionate hiring

---

For more details, view the full earnings transcript, or explore Robert Half's company profile.