What changed in this filing

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Item 1. Financial Statements

2024-07-31 compared with 2024-05-02 · 93 added, 59 removed, 457 unchanged (25% of the section changed)

42 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Service revenues $ 1,472,524 $ 1,639,478 $ 2,948,461 $ 3,355,813

22 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

COMPREHENSIVE INCOME (LOSS):

23 unchanged sentences

104,932 $ 105 $ 1,371,479 $ ( 44,005 ) $ 191,666 $ 1,519,245

Net income — — — — 68,156 68,156

Other comprehensive income (loss) — — — ( 6,586 ) — ( 6,586 )

Dividends declared ($ 0.53 per share)

— — — — ( 55,407 ) ( 55,407 )

Net issuances of restricted stock 27 — — — — —

Stock-based compensation — — 15,631 — — 15,631

Repurchases of common stock ( 903 ) ( 1 ) — — ( 60,883 ) ( 60,884 )

Balance at June 30, 2024 104,056 $ 104 $ 1,387,110 $ ( 50,591 ) $ 143,532 $ 1,480,155

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total

9 unchanged sentences

Balance at March 31, 2023 107,763 $ 108 $ 1,308,998 $ ( 38,737 ) $ 328,112 $ 1,598,481

Net income — — — — 106,292 106,292

Other comprehensive income (loss) — — — 2,148 — 2,148

Dividends declared ($ 0.48 per share)

— — — — ( 51,565 ) ( 51,565 )

Net issuances of restricted stock 23 — — — — —

Stock-based compensation — — 15,453 — — 15,453

Repurchases of common stock ( 654 ) ( 1 ) — — ( 45,537 ) ( 45,538 )

Balance at June 30, 2023 107,132 $ 107 $ 1,324,451 $ ( 36,589 ) $ 337,302 $ 1,625,271

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

3 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 131,857 $ 228,297

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Allowance for credit losses 565 3,529

15 unchanged sentences

Other assets and liabilities, net ( 8,422 ) ( 5,134 )

Net cash flows (used in) provided by operating activities ( 15,919 ) 65,523

Net cash flows provided by operating activities 126,035 346,603

CASH FLOWS FROM INVESTING ACTIVITIES:

14 unchanged sentences

Non-cash items:

Repurchases of common stock awaiting settlement $ — $ 3,684

Fund exchanges within employee deferred compensation trusts $ 47,518 $ 70,608

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2024

June 30, 2024

Note A— Summary of Significant Accounting Policies

17 unchanged sentences

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

As of March 31, 2024, such estimates include allowances for credit losses, variable consideration, workers’ compensation losses, accrued medical expenses, income and other taxes, and assumptions used in the Company’s goodwill impairment assessment and in the valuation of stock grants subject to market conditions.

As of June 30, 2024, such estimates include allowances for credit losses, variable consideration, workers’ compensation losses, accrued medical expenses, income and other taxes, and assumptions used in the Company’s goodwill impairment assessment and in the valuation of stock grants subject to market conditions.

Actual results and outcomes may differ from management’s estimates and assumptions.

10 unchanged sentences

The Company expenses all advertising costs as incurred.

Advertising costs were $ 13.2 million and $ 13.3 million for the three months ended March 31, 2024 and 2023, respectively.

Advertising costs were $ 14.6 million and $ 27.9 million for the three and six months ended June 30, 2024, respectively, and $ 14.6 million and $ 27.9 million for the three and six months ended June 30, 2023, respectively.

Income from Investments Held in Employee Deferred Compensation Trusts .

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

June 30, 2024

The following table presents the Company’s income from investments held in employee deferred compensation trusts (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Dividend income $ ( 2,627 ) $ ( 2,232 ) $ ( 4,698 ) $ ( 3,795 )

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Increase in employee deferred compensation costs and expense related to changes in the fair value of trust assets $ 15,733 $ 28,347 $ 59,109 $ 55,638

11 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

June 30, 2024

The following tables summarize the Company’s financial instruments by significant category and fair value measurement on a recurring basis (in thousands):

Fair Value Measurements Using

Balance at March 31, 2024

Balance at June 30, 2024

Quoted Prices

32 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

The following table sets forth the activity in the allowance for credit losses from December 31, 2023, through March 31, 2024 (in thousands):

June 30, 2024

The following table sets forth the activity in the allowance for credit losses from December 31, 2023, through June 30, 2024 (in thousands):

Allowance for Credit Losses

3 unchanged sentences

Other, including foreign currency translation adjustments ( 280 )

Balance as of March 31, 2024

Balance as of June 30, 2024

Note B— New Accounting Pronouncements

29 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

June 30, 2024

The Company records contract talent solutions revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses.

17 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Contract talent solutions

13 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

June 30, 2024

Contracts with multiple performance obligations are recognized as performance obligations are delivered, and contract value is allocated based on relative stand-alone selling values of the services and products in the arrangement.

As of March 31, 2024, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 176.1 million.

As of June 30, 2024, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 182.9 million.

Of this amount, $ 156.5 million is expected to be recognized within the next twelve months .

As of March 31, 2023, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 151.8 million.

As of June 30, 2023, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 160.3 million.

Contract liabilities are recorded when cash payments are received or due in advance of performance and are reflected in accounts payable and accrued expenses on the unaudited Condensed Consolidated Statements of Financial Position.

The following table sets forth the activity in contract liabilities from December 31, 2023, through March 31, 2024 (in thousands):

The following table sets forth the activity in contract liabilities from December 31, 2023, through June 30, 2024 (in thousands):

Contract Liabilities

3 unchanged sentences

Other, including translation adjustments ( 316 )

Balance as of March 31, 2024

Balance as of June 30, 2024

Note D— Other Current Assets

17 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

June 30, 2024

Note F— Other Noncurrent Assets

7 unchanged sentences

The Company’s leases have remaining lease terms of less than 1 year to 11 years, some of which include options to extend the leases for up to 7 years, and some of which include options to terminate the leases within 1 year.

Operating lease expense was $ 21.2 million and $ 22.4 million for the three months ended March 31, 2024 and 2023, respectively.

Operating lease expense was $ 21.2 million and $ 42.4 million for the three and six months ended June 30, 2024, respectively, and $ 22.5 million and $ 44.9 million for the three and six months ended June 30, 2023, respectively.

Supplemental cash flow information related to leases consisted of the following (in thousands):

Three Months Ended

Six Months Ended

Cash paid for operating lease liabilities $ 45,284 $ 48,145

4 unchanged sentences

Weighted average discount rate for operating leases 3.6 % 3.2 %

Future minimum lease payments under non-cancellable leases as of March 31, 2024, were as follows (in thousands):

2024 (excluding the three months ended March 31, 2024)

Future minimum lease payments under non-cancellable leases as of June 30, 2024, were as follows (in thousands):

2024 (excluding the six months ended June 30, 2024)

Thereafter 42,915

2 unchanged sentences

(a) Includes the current portion of $ 70.9 million for operating leases.

As of March 31, 2024, the Company had additional future minimum lease obligations totaling $ 8.5 million under executed operating lease contracts that had not yet commenced.

As of June 30, 2024, the Company had additional future minimum lease obligations totaling $ 11.7 million under executed operating lease contracts that had not yet commenced.

These operating leases include agreements for corporate and field office facilities with lease terms of 1 to 11 years.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

June 30, 2024

Note H— Goodwill

The following table sets forth the activity in goodwill from December 31, 2023 through March 31, 2024 (in thousands):

The following table sets forth the activity in goodwill from December 31, 2023 through June 30, 2024 (in thousands):

Contract talent solutions Permanent placement talent solutions Protiviti Total

2 unchanged sentences

Foreign currency translation adjustments ( 152 ) ( 29 ) ( 149 ) ( 330 )

Balance as of March 31, 2024

Balance as of June 30, 2024

$ 134,135 $ 26,102 $ 77,403 $ 237,640

The Company completed its annual assessment of the recoverability of goodwill during the three months ended June 30, 2024, and determined there were no events or circumstances that would more likely than not reduce the fair value of the Company’s reporting units below their carrying value.

Note I— Accrued Payroll and Benefit Costs

11 unchanged sentences

These plans include provisions for salary deferrals and discretionary contributions.

The asset value of the nonqualified plans was $ 622.6 million and $ 571.0 million as of March 31, 2024 and December 31, 2023, respectively.

The asset value of the nonqualified plans was $ 638.5 million and $ 571.0 million as of June 30, 2024 and December 31, 2023, respectively.

The Company holds these assets to satisfy the Company’s liabilities under its deferred compensation plans.

The liability value for the nonqualified plans was $ 607.8 million and $ 572.9 million as of March 31, 2024 and December 31, 2023, respectively.

Contribution expenses for the Company’s qualified and nonqualified defined contribution plans were $ 13.4 million and $ 11.3 million for the three months ended March 31, 2024 and 2023, respectively.

The liability value for the nonqualified plans was $ 628.0 million and $ 572.9 million as of June 30, 2024 and December 31, 2023, respectively.

Contribution expenses for the Company’s qualified and nonqualified defined contribution plans were $ 11.4 million and $ 24.8 million for the three and six months ended June 30, 2024, respectively, and $ 11.5 million and $ 22.8 million for the three and six months ended June 30, 2023, respectively.

The Company has statutory defined contribution plans and defined benefit plans outside the United States of America, which are not material.

1 unchanged sentence

On March 23, 2015, Plaintiff Jessica Gentry, on her own behalf and on behalf of a putative class of allegedly similarly situated individuals, filed a complaint against the Company in the Superior Court of California, San Francisco County, which was subsequently amended on October 23, 2015.

The complaint alleges that a putative class of current and former employees of the Company working in California since March 13, 2010, were denied compensation for the time they spent interviewing “for temporary and permanent employment opportunities” as well as performing activities related to the interview process.

Gentry seeks recovery on her own behalf and on behalf of the putative class in an unspecified amount for this allegedly unpaid compensation.

Gentry also seeks recovery of an unspecified amount for the alleged failure of the Company to provide her and the putative class with accurate wage statements.

ROBERT HALF INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

statutory penalties on behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code Private Attorneys General Act (“PAGA”).

June 30, 2024

temporary and permanent employment opportunities” as well as performing activities related to the interview process.

Gentry seeks recovery on her own behalf and on behalf of the putative class in an unspecified amount for this allegedly unpaid compensation.

Gentry also seeks recovery of an unspecified amount for the alleged failure of the Company to provide her and the putative class with accurate wage statements.

Gentry also seeks an unspecified amount of other damages, attorneys’ fees, and statutory penalties, including penalties for allegedly not paying all wages due upon separation to former employees and statutory penalties on behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code Private Attorneys General Act (“PAGA”).

On January 4, 2016, the Court denied a motion by the Company to compel all of Gentry’s claims, except the PAGA claim, to individual arbitration.

20 unchanged sentences

Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing which will be calculated according to the Adjusted Term Secured Overnight Financing Rate (“SOFR”), or an alternative base rate, plus an applicable margin.

The Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of March 31, 2024.

There were no borrowings under the Credit Agreement as of March 31, 2024, or December 31, 2023.

The Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of June 30, 2024.

There were no borrowings under the Credit Agreement as of June 30, 2024, or December 31, 2023.

ROBERT HALF INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

June 30, 2024

Note L— Stockholders’ Equity

Stock Repurchase Program.

As of March 31, 2024, the Company is authorized to repurchase, from time to time, up to 10.0 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.

The number and the cost of common stock shares repurchased during the three months ended March 31, 2024 and 2023, are reflected in the following table (in thousands):

Three Months Ended

As of June 30, 2024, the Company is authorized to repurchase, from time to time, up to 9.1 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.

The number and the cost of common stock shares repurchased during the six months ended June 30, 2024 and 2023, are reflected in the following table (in thousands):

Six Months Ended

Common stock repurchased (in shares) 1,660 1,137

1 unchanged sentence

Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable statutory withholding taxes.

The number and the cost of employee stock

ROBERT HALF INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

plan repurchases made during the three months ended March 31, 2024 and 2023, are reflected in the following table (in thousands):

Three Months Ended

The number and the cost of employee stock plan repurchases made during the six months ended June 30, 2024 and 2023, are reflected in the following table (in thousands):

Six Months Ended

Repurchases related to employee stock plans (in shares) 271 283

2 unchanged sentences

Treasury stock is accounted for using the cost method.

Treasury stock activity for the three months ended March 31, 2024 and 2023, (consisting of purchases of shares for the treasury) is presented in the unaudited Condensed Consolidated Statements of Stockholders’ Equity.

Treasury stock activity for the six months ended June 30, 2024 and 2023, (consisting of purchases of shares for the treasury) is presented in the unaudited Condensed Consolidated Statements of Stockholders’ Equity.

Repurchases of shares and issuances of dividends are applied first to the extent of retained earnings and any remaining amounts are applied to additional paid-in capital.

Note M— Net Income Per Share

The calculation of net income per share for the three months ended March 31, 2024 and 2023, is reflected in the following table (in thousands, except per share amounts):

The calculation of net income per share for the three and six months ended June 30, 2024 and 2023, is reflected in the following table (in thousands, except per share amounts):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net income $ 68,156 $ 106,292 $ 131,857 $ 228,297

8 unchanged sentences

Diluted $ 0.66 $ 1.00 $ 1.27 $ 2.14

ROBERT HALF INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

June 30, 2024

Note N— Business Segments

6 unchanged sentences

The Company evaluates performance based on income before intangible assets amortization expense, net interest income, and income taxes.

ROBERT HALF INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2024

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results for the three months ended March 31, 2024 and 2023 (in thousands):

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results for the three and six months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Service revenues

12 unchanged sentences

Service revenues presented above are shown net of eliminations of intersegment revenues.

Intersegment revenues between contract talent solutions segment and Protiviti segment were $ 112.8 million and $ 125.8 million for the three months ended March 31, 2024 and 2023, respectively.

Intersegment revenues between contract talent solutions segment and Protiviti segment were $ 116.5 million and $ 229.3 million for the three and six months ended June 30, 2024, respectively, and $ 114.8 million and $ 240.6 million for the three and six months ended June 30, 2023, respectively.

Revenue and direct costs related to the intersegment activity are reflected in the Protiviti segment, including the costs of candidate payroll, fringe benefits and incremental recruiter compensation.

Note O—S ubsequent Events

On May 1, 2024, the Company announced the following:

ROBERT HALF INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

June 30, 2024

Note O— Subsequent Events

On July 30, 2024, the Company announced the following:

Quarterly dividend per share $ 0.53

Declaration date May 1, 2024

Record date May 24, 2024

Payment date June 14, 2024

Declaration date July 30, 2024

Record date August 23, 2024

Payment date September 13, 2024

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements