Robert Half Sees Green Shoots in Q4, But Recovery Remains Fragile Amid Year-Over-Year Declines

Staffing Giant Points to Sequential Improvement Amid Ongoing Challenges

MENLO PARK, Calif. – Robert Half International Inc. (NYSE: RHI) offered a mixed but cautiously optimistic outlook in its fourth-quarter 2025 earnings report, highlighting the first signs of positive sequential revenue momentum in over three years. While executives acknowledged persistent year-over-year declines across its core staffing and Protiviti consulting divisions, they pointed to improving weekly trends and a more supportive macroeconomic environment as reasons for guarded optimism.

The company reported global enterprise revenues of $1.302 billion for the quarter, a 6% drop compared to the same period last year. Earnings per share came in at $0.32, down from $0.53 in Q4 2024. Despite the annual comparisons, management emphasized a key milestone: revenue, on a same-day, constant-currency basis, grew sequentially for the first time since 2022.

"Our results exceeded the midpoint of our guidance, and we are very well positioned to support our clients' evolving talent and consulting needs," said President and CEO Keith Waddell. He cited progress on interest rate cuts, easing inflation, and a decline in business uncertainty as tailwinds.

Divisional Performance: A Tale of Two Businesses

The company's Talent Solutions (staffing) division saw revenues fall 9% year-over-year on an adjusted basis, to $823 million. However, sequential trends improved. Notably, permanent placement revenue as a percentage of total staffing revenue increased, suggesting a shift in client hiring strategies.

Protiviti, the risk consulting and internal audit subsidiary, posted global revenues of $479 million, a 3% adjusted decline. Performance was bifurcated, with U.S. revenues down 6% but international revenues growing 9%. Waddell noted that technology consulting demand remains "very strong," driven by platform modernization projects, though larger deal cycles have lengthened.

Margin Pressure and Forward Guidance

Profitability metrics told a complex story. Talent Solutions gross margin held relatively steady, but Protiviti's gross margin contracted significantly to 21.9%. Selling, general, and administrative (SG&A) expenses rose as a percentage of revenue across the enterprise, reflecting the cost of maintaining service capabilities in a softer revenue environment.

For the first quarter of 2026, Robert Half provided revenue guidance of $1.26 billion to $1.36 billion and EPS of $0.08 to $0.18. At the midpoint, this implies a continued year-over-year revenue decline of approximately 5%, though it would mark another quarter of positive sequential growth. CFO Michael Buckley cautioned about a typical seasonal margin dip in Q1 for Protiviti and an unusually high projected tax rate due to seasonal factors.

The AI Factor and Long-Term View

Addressing the elephant in the room, executives stated that AI has had a "negligible" direct impact on displacement within their client sectors to date. Paradoxically, Waddell suggested AI is creating new complexities, as candidates use generative AI to polish resumes, making authentic vetting more critical—a dynamic that could play to Robert Half's strengths. Looking ahead, Waddell projected that if current sequential trends hold, the company could return to year-over-year revenue growth by the third quarter of 2026.

Market Reaction and Expert Commentary

The report underscores the staffing industry's role as a leading economic indicator. The sequential improvement suggests underlying demand may be stabilizing, but the persistent annual declines warn that a full recovery is not yet secured.

Sarah Chen, Portfolio Manager at Clearwater Capital: "The sequential growth is the critical takeaway. It's the first concrete data point suggesting the deep freeze in professional hiring is beginning to thaw. Robert Half's model is highly cyclical, and this could be the early inflection point the market has been waiting for."

Marcus Johnson, Independent HR Consultant: "The increase in permanent placement revenue is interesting. It may indicate that companies, after a long period of hesitation, are now confident enough in their outlook to commit to full-time hires again, rather than just relying on temps."

David Feldstein, Editor at 'The Bearish Take': "Let's not get carried away. A single quarter of sequential growth after a brutal three-year slide is not a victory lap. Margins are getting crushed, SG&A is bloated, and guidance for next quarter is still negative year-over-year. This looks more like a dead-cat bounce than a true recovery. The CEO's sunny macro comments feel like wishful thinking."

Priya Sharma, Economist at Global Insight Forum: "Robert Half's data aligns with other high-frequency labor indicators showing resilience in professional job openings. The real test will be if this sequential momentum can accelerate enough to overcome the tough comparisons later this year. Their projection for a return to year-over-year growth in Q3 seems plausible but fragile."

Founded in 1948, Robert Half is a global leader in professional staffing and consulting services.