Robert Half Inc.

please press star and the number one on your telephone keypad. Our hosts for today's call are Mr. Keith Waddell, President and Chief Executive Officer of Robert Half, and Mr. Michael Buckley, Chief Financial Officer. Mr. Waddell, you may begin.

Hello, everyone. We appreciate your time today. Before we get started, I'd like to remind you that the comments made on today's call contain forward-looking statements. including predictions and estimates about our future performance. These statements represent our current judgment of what the future holds. However, they're subject to the risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties are described in today's press release and in our most recent 10-K and 10-Q filed with the SEC. We assume no obligation to update the statements made on today's call. During this presentation, we may mention some non-GAAP financial measures and reference these figures as adjusted. Specifically, we present adjusted revenue growth rates, which remove the impacts on reported revenues from the changes in the number of billing days and foreign currency exchange rates. Additionally, we present adjusted gross margin, adjusted selling general and administrative expenses, and adjusted operating income by combining the gains and losses on investments held to fund the company's obligations under employee deferred compensation plans with the changes in the underlying deferred compensation obligations. Since the gains and losses from investments and the changes in deferred compensation obligations completely offset, there is no impact on our reported net income. Reconciliations and further explanations of these measures are included in a supplemental schedule to our earnings press release. For your convenience, our prepared remarks for today's call are available in the Investor Center of our website, roberthalf.com. For the first quarter of 2025, global enterprise revenues were $1.352 billion, down 8% from last year's first quarter on a reported basis and down 6% as adjusted basis. Net income per share in the first quarter was $0.17 compared to $0.61 in the first quarter one year ago. First quarter 2025 net income was reduced by $0.13 per share, for one-time charges related to cost actions to reduce ongoing administrative expenses. Business confidence levels moderated during the quarter in response to heightened economic uncertainty over U.S. trade and other policy developments. Client and job seeker caution continues to elongate decision cycles and subdue hiring activity and new project starts. Despite the uncertain outlook, we're very well positioned to capitalize on emerging opportunities and support our clients' talent and consulting needs through the strength of our industry-leading brand, our people, our technology, and our unique business model that includes both professional staffing and business consulting services. Cash flow used in operations during the quarter was $59 million. Cash outflows are typically elevated each year in the first quarter due to the annual payment cycle for bonuses and SAS subscription renewals, among others. In March, we distributed a $0.59 per share cash dividend to our shareholders of record for a total cash outlay of $61 million. Our per share dividend has grown an average of 11.6% annually since its inception in 2004 The March 2025 dividend was 11.3% higher than the prior year. We also acquired approximately 650,000 Robert Half shares during the quarter for $39 million. We have 6.6 million shares available for repurchase under our board-approved stock repurchase plan. Return on invested capital for the company was 5% in the first quarter. Now I'll turn the call back over to our CFO, Mike Buckley.

Thank you, Keith. Hello, everyone. As Keith noted, global revenues were 1.352 billion in the first quarter. On an adjusted basis, first quarter talent solutions revenues were down 11% year over year. U.S. talent solutions revenues were 676 million, down 10% from the prior year's first quarter. Non-U.S. talent solutions revenues were 199 million, down 15% year over year. We conduct talent solutions operations through offices in the United States and 17 other countries. In the first quarter, there were 61.9 billing days compared to 62.8 billing days in the same quarter one year ago. The second quarter of 2025 has 63.2 billing days compared to 63.5 billing days during the second quarter of 2024. Currency exchange rate movements during the first quarter had the effect of decreasing reported year-over-year total revenues by 12 million. 10 million for Talent Solutions and 2 million impact to productivity. Contract Talent Solutions bill rates for the first quarter increased 4.2% compared to one year ago adjusted for changes in the mix of revenues by functional specialization, currency, and country. This rate for the fourth quarter was 3.4%. Now let's take a closer look at the results for productivity. Global revenues in the first quarter were $477 million. $387 million of that is from the United States, and $90 million is from outside of the United States. On an adjusted basis, Global first quarter productivity revenues were up 5% versus the year ago period. U.S. productivity revenues were up 4%, while non-U.S. productivity revenues were up 8% compared to one year ago. Productivity and its independently owned member firms serve clients through locations in the United States and 28 other countries. Turning now to gross margin, in contract talent solutions, First quarter gross margin was 38.9% of applicable revenues versus 39.5% in the first quarter one year ago. Conversion, or contract to hire, revenues were 3.2% of contract revenues in both the current quarter and the first quarter of 2024. Our permanent placement revenues were 12.8% of consolidated talent solutions revenues in the current quarter and 12.3% in the first quarter of 2024. When compared with Contract Talent Solutions gross margin, I'm sorry, when combined with Contract Talent Solutions gross margin, overall gross margin for Talent Solutions was 46.7% compared to 47% of applicable revenues in the first quarter one year ago. For productivity, gross margin was 18.9% of productivity revenues in both the current quarter and the first quarter of 2024. Adjusted gross margin for productivity was 18.1% for the quarter just ended compared to 20.7% last year. Productivity gross margin for the current quarter includes $8 million of one-time charges related to cost reductions to reduce ongoing administrative expenses. These mid-April actions are expected to result in annual savings of $32.5 million with 75% of a full quarter's benefit recognized in the second quarter due to timing and the full benefit each quarter thereafter. Enterprise SG&A costs were 34% of global revenues in the first quarter compared to 35.4% in the same quarter one year ago. Adjusted Enterprise SG&A costs were 35.2% for the quarter just ended compared to 33% one year ago. Talent Solutions SG&A costs were 43.7% of Talent Solutions revenues in the first quarter versus 44.3% in the first quarter of 2024. Adjusted Talent Solutions SG&A costs were 45.5% in the quarter just ended compared to 40.8% last year. Town Solutions SG&A for the current quarter includes $9 million in one-time charges related to mid-March cost actions to reduce ongoing administrative expenses, which are expected to result in annual savings of $47.5 million, with full effect in the second quarter and thereafter. First quarter SG&A costs for productivity were 16.3% of productivity revenues compared to 15.9% of revenues for the same quarter one year ago. Operating income for the quarter was $39 million. Adjusted operating income was $19 million in the first quarter or 1.4% of revenue. First quarter adjusted operating income for our talent solutions divisions was $10 million or 1.2% of revenue. Adjusted operating income for productivity in the first quarter was $9 million or 1.8% of revenue. Adjusted operating income includes $17 million of one-time charges related to cost actions to reduce ongoing administrative expenses, $9 million for talent solutions, and $8 million for productivity. Our first quarter 2025 income statement includes a $20 million loss from investments held in employee deferred compensation trusts. This is completely offset by an equal reduction of employee deferred compensation costs, which are reflected in SG&A expenses and direct costs. As such, it has no effect on our reported net income. Our first quarter tax rate was 22% compared to 30% one year ago. The lower 2025 rate reflects the accelerated timing of certain tax credits that would have otherwise been recorded in the upcoming fourth quarter. This has no impact on the estimated full-year tax rate for 2025 of 31 to 33%. At the end of the first quarter, accounts receivable were $787 million, and implied day sales outstanding, or DSO, was 52.4 days. Before we move to second quarter guidance, let's review some of the monthly revenue trends we saw in the first quarter and so far in April, all adjusted for currency and billing days. Contract Talent Solutions exited the first quarter with March revenues down 13% versus the prior year, compared to a 12% decrease for the full quarter. Revenues for the first two weeks of April were down 12% compared to the same period last year. Permanent placement revenues in March were 10% versus March 2024. This compares to an 8% decrease for the full quarter. For the first three weeks of April, permanent placement revenues were down 2% compared to the same period in 2024. We provide this information so that you have insight into some of the trends we saw during the first quarter and into April. But as you know, these are very brief time periods. We caution against reading too much into them. With that in mind, we offer the following second quarter guidance. Revenues of $1.31 billion to $1.41 billion. Income per share, 36 to 46 cents. Midpoint revenues of $1.36 billion are 7% lower than the same period in 2024 on an as-adjusted basis. On a sequential basis, mid-quarter estimated Q2 revenues are down 4%. For the most recent six-week period ended April 11th, weekly sequential revenues have remained essentially flat. The major financial assumptions underlying the midpoint of these estimates are as follows. Adjusted revenue growth year over year for talent solutions down 10% to 14%. For productivity, up 1 to up 4%. Overall, down 5 to 9%. Adjusted gross margin percentages. For contract talent, 38 to 40%. Productivity, 21 to 24%. Overall, 37 to 39%. Adjusted SG&A as a percentage of revenue. talent solutions 43 to 45%, productivity 15 to 16%, overall 33 to 35%. Adjusted operating income as a percentage of revenues, talent solutions 2 to 4%, productivity 6 to 8%, overall 3 to 6%. Tax rate 31 to 35%, Shares outstanding, 100 to 101 million. 2025 capital expenditures and capitalized cloud computing costs, 75 million to 95 million, with 15 to 25 million in the second quarter. All estimates we provide on this call are subject to the risks mentioned in today's press release and in our SEC filings. Now I'll turn the call back over to Keith. Thank you, Mike.