What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-13 compared with 2024-02-20 · 141 added, 80 removed, 722 unchanged (23% of the section changed)

31 unchanged sentences

Additional paid-in capital 1,418,150 1,354,703

Accumulated other comprehensive income (loss) ( 32,626 ) ( 43,623 )

Accumulated other comprehensive loss ( 65,138 ) ( 32,626 )

Retained earnings 24,889 266,169

12 unchanged sentences

Selling, general and administrative expenses 2,004,539 2,107,531 2,117,296

(Income) loss from investments held in employee deferred compensation trusts ( 88,020 ) 86,139 ( 61,078 )

(Income) loss from investments held in employee deferred compensation trusts (which is completely offset by related costs and expenses - Note A) ( 94,079 ) ( 88,020 ) 86,139

Amortization of intangible assets 1,217 2,883 1,667

29 unchanged sentences

(in thousands, except per share amounts)

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

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

Shares Par Value

57 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of notes payable — — ( 239 )

Repurchases of common stock ( 276,032 ) ( 254,625 ) ( 319,897 )

19 unchanged sentences

Robert Half Inc.

(the “Company”) is a specialized talent solutions and business consulting firm that connects opportunities at great companies with highly skilled job seekers.

Robert Half ® offers contract talent solutions and permanent placement talent solutions for finance and accounting, technology, marketing and creative, legal, administrative, and customer support roles.

Robert Half is also the parent company of Protiviti ® , a global consulting firm that provides internal audit, risk, business, and technology consulting solutions.

(the “Company”) is a specialized talent solutions and business consulting firm, connecting highly skilled job seekers with rewarding opportunities at great companies.

Robert Half ® offers contract talent solutions and permanent placement talent solutions for finance and accounting, technology, marketing and creative, legal, and administrative and customer support, and provides executive search services.

Robert Half is also the parent company of Protiviti ® , a global consulting firm that delivers internal audit, risk, business, and technology consulting solutions.

The Company operates in North America, South America, Europe, Asia, and Australia.

1 unchanged sentence

Basis of Presentation.

The Consolidated Financial Statements (“Financial Statements”) of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”).

The Consolidated Financial Statements (“Financial Statements”) of the Company are prepared in conformity with accounting principles generally accepted (“GAAP”) in the United States of America (“U.S.”) and the rules of the Securities and Exchange Commission (“SEC”).

Certain reclassifications have been made to prior years’ consolidated financial statements to conform to the 2024 presentation

20 unchanged sentences

Under the Company’s employee deferred compensation plans, employees direct the investment of their account balances, and the Company invests amounts held in the associated investment trusts consistent with these directions.

As realized and unrealized investment gains and losses occur, the Company’s deferred compensation obligation to employees changes and adjustments are recorded in selling, general and administrative expenses or, in the case of Protiviti, costs of services.

The value of the related investment trust assets also changes by an equal and offsetting amount, leaving no net cost to the Company.

The Company’s (income) loss from investments held in employee deferred compensation trusts consists primarily of unrealized and realized gains and losses and dividend income from trust investments and is presented separately on the Consolidated Statements of Operations.

As realized and unrealized investment gains and losses occur, the Company’s employee deferred compensation plan obligations change and adjustments are recorded in selling, general and administrative expenses or, in the case of Protiviti, costs of services.

The value of the related investment trust assets also changes by an equal and offsetting amount, leaving no net cost to the Company, and therefore no effect on reported net income.

The Company’s (income) loss from investments held in employee deferred compensation trusts consists of unrealized and realized gains and losses, and dividend income from trust investments and is presented separately on the Consolidated Statements of Operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4 unchanged sentences

Realized and unrealized (gains) losses ( 71,656 ) ( 72,971 ) 98,776

(Income) loss from investments held in employee deferred compensation trusts $ ( 88,020 ) $ 86,139 $ ( 61,078 )

(Income) loss from investments held in employee deferred compensation trusts (which is completely offset by related costs and expenses) $ ( 94,079 ) $ ( 88,020 ) $ 86,139

The following table presents the Company’s increase (decrease) in employee deferred compensation costs and expense related to changes in the fair value of trust assets for its nonqualified employee deferred compensation plans (in thousands):

Year Ended December 31,

2024 2023 2022

Increase (decrease) in employee deferred compensation costs and expense related to changes in the fair value of trust assets $ 94,079 $ 88,020 $ ( 86,139 )

Comprehensive Income (Loss).

10 unchanged sentences

unobservable inputs in which there is little or no market data, which requires management’s best estimates and assumptions that market participants would use in pricing the asset or liability

The carrying value of cash, net accounts receivable, and accounts payable and accrued expenses approximates fair value because of their short-term nature.

The carrying value of cash and cash equivalents, net accounts receivable, and accounts payable and accrued expenses approximates fair value because of their short-term nature.

The Company holds mutual funds and money market funds to satisfy its obligations under its employee deferred compensation plans which are carried at fair value based on quoted market prices in active markets for identical assets (Level 1).

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Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company does not have any material subleases.

The Company does not have any subleases.

The Company does not currently have residual value guarantees or restrictive covenants in its leases.

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If such losses are ultimately utilized to offset future segment income, the Company will recognize a tax benefit up to the full amount of the valuation reserve.

The Organization of Economic Cooperation and Development (“OECD”), an international association of many countries including the U.S., has introduced a framework to impose a 15% global minimum corporate tax, referred to as Pillar Two, effective for tax years beginning in 2024.

The Organization of Economic Cooperation and Development (“OECD”), an international association of many countries, has introduced a framework to impose a 15% global minimum corporate tax, referred to as Pillar Two, effective for tax years beginning in 2024.

Currently, there are no laws enacted incorporating Pillar Two in the U.S., however, certain countries in which the Company operates have adopted, or are in the process of adopting legislation to implement Pillar Two.

The OECD continues to release additional guidance and countries are implementing legislation with widespread adoption of the Global Anti-Base Erosion (“GloBE”) Model Rules for Pillar Two.

The Company is continuing to evaluate the GloBE Model Rules for Pillar Two and related legislation, and their potential impact on future periods.

The Company is continuing to evaluate the GloBE Model Rules for Pillar Two and related legislation;

no material tax impacts are expected.

Workers ’ Compensation .

10 unchanged sentences

Medical expense includes the insurance premiums for claims in excess of $ 1.0 million, claims administration fees, prescription fees and reimbursements, and an estimate for the Company’s liability for IBNR claims and for the ongoing development of existing claims.

Medical expenses are presented as a component of selling, general and administrative expenses, or in the case of risk consulting and internal audit services, costs of services in the Consolidated Statements of Operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Medical expenses are presented as a component of selling, general and administrative expenses, or in the case of Protiviti, costs of services in the Consolidated Statements of Operations.

The reserves for IBNR claims and for the ongoing development of existing claims in each reporting period include estimates.

The Company has established reserves for medical claims using rates which are estimated using periodic third-party actuarial valuations based upon historical loss statistics which include the Company’s historical claims data, and an estimate of future claim trends.

The Company has established reserves for medical claims using rates which are estimated using periodic third-party

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

actuarial valuations based upon historical loss statistics which include the Company’s historical claims data, and an estimate of future claim trends.

While management believes that its assumptions and estimates are appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the Company’s future results.

3 unchanged sentences

The results of operations of the Company’s international subsidiaries are translated at the monthly average exchange rates prevailing during the period.

The financial position of the Company’s international subsidiaries is translated at the current exchange rates at the end of the period, and the related translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within Stockholders’ Equity.

Gains and losses resulting from foreign currency transactions are included as a component of selling, general and administrative expenses in the Consolidated Statements of Operations and have not been material for all periods presented.

3 unchanged sentences

This expense is recorded on a straight-line basis over the requisite service period of the entire award.

The Company determines the grant-date fair value of its restricted stock and stock unit awards using the fair market value of its stock on the grant date, unless the awards are subject to market conditions, in which case the Company utilizes a binomial-lattice model (i.e., Monte Carlo simulation model).

The Company determines the grant-date fair value of its restricted stock and stock unit awards using the fair market value of its stock on the grant date, unless the awards are subject to market conditions, in which case the Company utilizes an option-pricing model (i.e., Monte Carlo simulation model).

The Monte Carlo simulation model utilizes multiple input variables to determine the stock-based compensation fair value.

3 unchanged sentences

Recently Adopted Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

Segment Reporting.

4 unchanged sentences

This ASU is effective for public filers for fiscal periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, however early adoption is permitted.

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

The Company adopted the new guidance for the fiscal year ended December 31, 2024, resulting in additional disclosures to the Company’s segment financial information footnote.

The impact of the adoption was not material to the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

Income Tax Disclosures .

2 unchanged sentences

Improvements to Income Tax Disclosures.

Under this ASU, public filers must disclose annually (1) specific categories in the rate reconciliation, and (2) provide additional information for reconciling items that meet a quantitative threshold, if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate.

Under this ASU, public filers must disclose annually (1) specific categories in the rate reconciliation, and (2) provide additional information for reconciling items that meet a quantitative threshold, if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate.

The new guidance is effective for public filers for annual periods beginning after December 15, 2024.

1 unchanged sentence

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

Income Statement Disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement, Reporting Comprehensive Income, Expense Disaggregation Disclosures (Subtopic 220-40).

This ASU requires disclosure of disaggregated information about specific categories underlying certain income statement expense line items in the notes to the financial statements.

This guidance is effective for public filers for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20 unchanged sentences

Protiviti revenues.

Protiviti’s consulting services are generally provided on a time-and-material basis or fixed-fee basis.

Protiviti’s consulting services are generally provided on a time-and-material basis, fixed-fee basis, or unit basis.

Revenues earned under time-and-material arrangements and fixed-fee arrangements are recognized using a proportional performance method.

3 unchanged sentences

Revenues are recognized over time as the performance obligations are satisfied, because the services provided do not have any alternative use to the Company, and contracts generally include language giving the Company an enforceable right to payment for services provided to date.

Unit-based revenues are recognized when the service has transferred to the customer.

Revenue is recognized based on unit price multiplied by the number of units delivered and based on specific terms outlined in contracts.

The Company periodically evaluates the need to provide for any losses on these projects, and losses are recognized when it is probable that a loss will be incurred.

18 unchanged sentences

As of December 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 $ 180.1 million.

Of this amount, $ 105.0 million is expected to be recognized within the next twelve months .

Of this amount, $ 169.7 million is expected to be recognized within the next 12 months.

As of December 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 $ 117.7 million.

33 unchanged sentences

The Company has operating leases for corporate and field offices, and certain equipment.

The Company’s leases have remaining lease terms of less than 1 year to 12 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.

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

Operating lease expense was $ 82.5 million, $ 89.0 million and $ 89.3 million for the years ended December 31, 2024, 2023, and 2022, respectively.

17 unchanged sentences

As of December 31, 2024, the Company had additional future minimum lease obligations totaling $ 17.0 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 less than 1 year to 7 years.

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

Note H—Goodwill

3 unchanged sentences

$ 134,118 $ 26,098 $ 77,594 $ 237,810

Acquisitions (a) — — 15,892 15,892

Foreign currency translation and other adjustments ( 466 ) ( 91 ) ( 380 ) ( 937 )

Foreign currency translation adjustments 169 33 ( 42 ) 160

Balance as of December 31, 2023

$ 134,287 $ 26,131 $ 77,552 $ 237,970

Foreign currency translation and other adjustments 169 33 ( 42 ) 160

Foreign currency translation adjustments ( 349 ) ( 68 ) ( 373 ) ( 790 )

Balance as of December 31, 2024

$ 133,938 $ 26,063 $ 77,179 $ 237,180

(a) In December 2022, the Company, through its wholly owned subsidiary Protiviti, acquired R2integrated (“R2i”), a digital experience agency specializing in digital solutions that integrate and accelerate customer experiences to drive impact for brands.

In connection with the acquisition, the Company recorded goodwill of $ 15.9 million within its Protiviti segment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note I—Accrued Payroll and Benefit Costs

4 unchanged sentences

Accrued payroll and benefit costs $ 372,785 $ 413,933

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note J—Employee Deferred Compensation Plans

1 unchanged sentence

The plans offer a savings feature with the Company matching employee contributions.

Assets of this plan are held by an independent trustee for the benefit of participating employees.

Assets of this plan are held by an independent trustee for the sole benefit of participating employees.

Nonqualified plans are provided for employees on a discretionary basis, including those not eligible for the qualified plans.

3 unchanged sentences

The liability value for the nonqualified plans was $ 678.4 million and $ 572.9 million as of December 31, 2024, and December 31, 2023, respectively.

The following table presents the Company’s compensation expense related to its qualified defined contribution plans and nonqualified plans (in thousands):

Year Ended December 31,

2023 2022 2021

Contribution expense $ 42,428 $ 50,406 $ 47,119

Increase (decrease) in employee deferred compensation expense related to changes in the fair value of trust assets 88,020 ( 86,139 ) 61,078

$ 130,448 $ ( 35,733 ) $ 108,197

The Company has statutory defined contribution plans and defined benefit plans outside the U.S., which are not material.

Contribution expenses for the Company’s qualified and nonqualified defined contribution plans were $ 46.6 million, $ 42.4 million and $ 50.4 million for the years ended December 31, 2024, 2023, and 2022.

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

Note K—Income Taxes

12 unchanged sentences

2024 2023 2022

Domestic $ 485,291 $ 780,624 $ 676,445

$ 332,547 $ 485,291 $ 780,624

Foreign 25,124 91,292 116,331

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interest and penalties accrued as of December 31, 2022, was $ 0.6 million, including a $ 0.2 million decrease recorded in income tax expense during the year.

The Company does not believe it is reasonably possible that the settlement of tax uncertainties will occur within the next twelve months.

The Company’s major income tax jurisdictions are the United States, Australia, Belgium, Brazil, Canada, Germany and the United Kingdom.

The Company does not believe it is reasonably possible that the settlement of tax uncertainties will occur within the next 12 months.

The Company’s major income tax jurisdictions are the U.S., Australia, Belgium, Brazil, Canada, Germany and the United Kingdom.

federal income tax, the Company remains subject to examination for 2021 and subsequent years.

2 unchanged sentences

Generally, for foreign countries, the Company remains subject to examination for 2017 and subsequent years.

The Company is currently under audit by the Internal Revenue Service (IRS) for the fiscal year ended December 31, 2021;

no material tax adjustments have been identified.

Note L—Commitments and Contingencies

5 unchanged sentences

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.

On March 8, 2024, the Court issued an order certifying:

(1) a class of California-based temporary employees who attended at least one uncompensated interview with a third-party client at any time since March 13, 2010;

(2) a subclass of class members who held a prior temporary job assignment before interviewing for a subsequent assignment;

and (3) a subclass of class members who are no longer employed by the Company (i.e., a “waiting time penalties” subclass).

At this stage of the litigation, it is not feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial Statements.

13 unchanged sentences

Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has an uncommitted letter of credit facility (the “facility”) of up to $ 35.0 million, which is available to cover the issuance of debt support standby letters of credit.

The Company had used $ 14.3 million and $ 14.1 million in debt support standby letters of credit as of December 31, 2023 and 2022, respectively.

Of the debt support standby letters of credit outstanding, as of December 31, 2023 and 2022, $ 14.3 million and $ 14.1 million, respectively, satisfied workers’ compensation insurer’s collateral requirements.

The Company had used $ 11.2 million and $ 14.3 million in debt support standby letters of credit as of December 31, 2024 and 2023, respectively, primarily to satisfy workers’ compensation insurer’s collateral requirements.

There is a service fee of 1.1 % to 1.2 % on the used portion of the facility.

2 unchanged sentences

The Company intends to renew this facility prior to its August 31, 2025 expiration.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In May 2023, the Company entered into an amendment to extend the maturity of its $ 100 million unsecured revolving credit facility (the “Credit Agreement”) to May 2026.

Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing which, effective May 2023, will be calculated according to the Adjusted Term Secured Overnight Financing Rate (“SOFR”), or an alternative base rate, plus an applicable margin.

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 December 31, 2024.

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Restricted stock grants contain forfeitable rights to dividends.

Dividends for these grants are accrued on the dividend payment dates but are not paid until the shares vest, and dividends accrued for shares that ultimately do not vest are forfeited.

Dividends for these grants are accrued on the dividend payment dates but are not paid until the shares vest, and dividends accrued for shares that ultimately do

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

not vest are forfeited.

Recipients of stock units do not pay any cash consideration for the units, do not have the right to vote and do not receive dividends with respect to such units.

2 unchanged sentences

The ROIC performance condition and the TSR market condition measure the Company’s performance against a peer group.

Shares will be delivered at the end of a three-year vesting,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

TSR and ROIC performance period based on the Company’s actual performance compared to the peer group.

Shares will be delivered at the end of a three-year vesting, TSR and ROIC performance period based on the Company’s actual performance compared to the peer group.

The ROIC performance condition is calculated first and has a range of possible outcomes of zero percent ( 0 %) to one-hundred fifty percent ( 150 %).

13 unchanged sentences

Non-Executive Officer

Time-Based Awards Performance-Based Awards With Market Conditions Performance-Based Awards Without Market Conditions Total Awards With Performance Condition

Units Weighted

Fair Value Number of

Units Weighted

Fair Value Number of

Time-Based Awards Performance-Based Awards With Market Conditions

Units Weighted

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Note O—Net Income Per Share

The calculation of net income per share for the years ended December 31, 2023, 2022 and 2021, are reflected in the following table (in thousands, except per share amounts):

The calculation of net income per share for the years ended December 31, 2024, 2023, and 2022, is reflected in the following table (in thousands, except per share amounts):

Year Ended December 31,

12 unchanged sentences

contract talent solutions, permanent placement talent solutions and Protiviti.

Operating segments are defined as components of the Company for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance.

Operating segments are defined as components of the Company for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), a position currently held by the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance.

The contract talent solutions reportable segment results from the aggregation of three operating segments with similar economic and qualitative characteristics:

finance and accounting, administration and customer support and technology.

The contract talent solutions and permanent placement talent solutions segments provide specialized engagement professionals and full-time personnel, respectively, for finance and accounting, technology, marketing and creative, legal, administrative and customer support roles.

The Protiviti segment provides business and technology risk consulting and internal audit services.

The CODM uses segment income to evaluate performance and allocate resources to each segment.

Segment income excludes interest income, intangible assets amortization expense, income taxes and the impacts of deferred compensation (income) expense.

The CODM considers variances between actual results and expectations as well as historical trends for segment income when making decisions about allocating capital and personnel resources to each segment.

The accounting policies of the segments are set forth in Note A— “ Summary of Significant Accounting Policies.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results (in thousands):

The following tables provide a reconciliation of service revenues and segment income by reportable segment to consolidated results (in thousands):

Year Ended December 31,

2023 2022 2021

Service revenues

Contract Talent Solutions 2024 2023 2022

Permanent placement talent solutions 567,486 725,155 569,921

Protiviti 1,929,699 1,980,140 1,852,780

Service revenues (1)

$ 3,357,872 $ 3,895,332 $ 4,532,847

Segment costs of services (2)

2,041,348 2,346,020 2,728,818

Compensation expenses (3)

884,121 934,024 973,341

301,885 322,473 338,407

Segment selling, general and administrative expenses 1,186,006 1,256,497 1,311,748

Segment income $ 130,518 $ 292,815 $ 492,281

Contract talent solutions $ 292,815 $ 492,281 $ 393,872

Year Ended December 31,

Permanent Placement Talent Solutions 2024 2023 2022

Service revenues (1)

$ 487,204 $ 567,486 $ 725,155

Segment costs of services (2)

985 1,105 1,449

Compensation expenses (3)

359,205 405,747 506,006

80,962 85,630 90,078

Segment selling, general and administrative expenses 440,167 491,377 596,084

Segment income $ 46,052 $ 75,004 $ 127,622

Year Ended December 31,

Protiviti 2024 2023 2022

Service revenues (1)

$ 1,950,761 $ 1,929,699 $ 1,980,140

Segment costs of services (2)

1,487,511 1,454,127 1,427,675

Compensation expenses (3)

93,296 88,337 82,314

209,754 199,561 199,440

Segment selling, general and administrative expenses 303,050 287,898 281,754

Segment income $ 160,200 $ 187,674 $ 270,711

Year Ended December 31,

Combined Segment 2024 2023 2022

Service revenues (1)

$ 5,795,837 $ 6,392,517 $ 7,238,142

Costs of services (2)

3,529,844 3,801,252 4,157,942

Compensation expenses (3)

1,336,622 1,428,108 1,561,661

592,601 607,664 627,925

Selling, general and administrative expenses 1,929,223 2,035,772 2,189,586

Combined segment income 336,770 555,493 890,614

3 unchanged sentences

(1) Service revenues presented above are shown net of eliminations of intersegment revenues.

Intersegment revenues between contract talent solutions segment and Protiviti segment were $ 442.3 million, $ 552.2 million and $ 580.4 million for the years ended December 31, 2023, 2022 and 2021, 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.

Assets by reportable segment are not presented as the Company does not allocate assets to its reportable segments, nor is such information used by management for purposes of assessing performance or allocating resources.

Intersegment revenues between the contract talent solutions segment and the Protiviti segment were $ 471.8 million, $ 442.3 million and $ 552.2 million for

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the years ended December 31, 2024, 2023, and 2022, respectively.

Service revenues related to the intersegment activity are reflected in the Protiviti segment.

(2) Segment costs of services consist of direct payroll, payroll taxes and benefit costs, as well as reimbursable expenses.

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.

For further information on costs of services, see Note A—“Summary of Significant Accounting Policies.”

(3) Includes payroll and applicable taxes, employee incentive compensation and other employee costs not included in direct cost as noted above.

(4) Other selling, general and administrative expenses is comprised of advertising, as well as other allocated expenses including lease expense, depreciation, cloud computing service costs and overhead costs.

These costs are allocated to the individual segments based on an internal allocation method.

The Company operates internationally, with operations in North America, South America, Europe, Asia, and Australia.

The following tables represent service revenues and long-lived assets by geographic location (in thousands):

Revenues have been attributed to geographic location based on the location of the legal entity generating revenues.

The following table represents service revenues by geographic location (in thousands):

Year Ended December 31,

1 unchanged sentence

Service revenues (a)

Domestic $ 4,957,163 $ 5,712,330 $ 5,006,525

Foreign (b) 1,435,354 1,525,812 1,454,919

$ 4,519,506 $ 4,957,163 $ 5,712,330

Property and equipment, net

Domestic $ 87,664 $ 90,388

Foreign 21,145 19,299

International (b) 1,276,331 1,435,354 1,525,812

$ 5,795,837 $ 6,392,517 $ 7,238,142

1 unchanged sentence

(b) No country represented more than 10% of revenues in any year presented.

Assets by reportable segment are not presented, as the Company does not allocate assets to its reportable segments, nor is such information used by the CODM for purposes of assessing performance or allocating resources.

The following table represents long-lived assets, net, which includes property, plant and equipment, net, right-of-use assets and noncurrent deferred income taxes, by geographic location (in thousands):

Long-lived assets, net

$ 375,936 $ 368,745

International 100,132 89,455

$ 476,068 $ 458,200

The following table represents depreciation expense by segment (in thousands):

Year Ended December 31,

2024 2023 2022

Depreciation expense

Contract talent solutions $ 26,230 $ 25,803 $ 24,145

Permanent placement talent solutions 8,533 8,786 8,630

Protiviti 17,290 16,775 14,623

$ 52,053 $ 51,364 $ 47,398

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

36 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition –Protiviti Revenue

Revenue Recognition –Protiviti revenue relating to time-and-material and fixed-fee arrangements

As described in Note C to the consolidated financial statements, the Company recorded service revenue related to Protiviti of $1.95 billion for the year ended December 31, 2024.

The Protiviti consulting services are generally provided on a time-and-material basis or fixed-fee basis.

The Protiviti consulting services are generally provided on a time-and-material basis, fixed-fee basis, or unit basis.

Revenues earned under time-and-material and fixed-fee arrangements are recognized using a proportional performance method.

1 unchanged sentence

Protiviti’s consulting services generally contain one or more performance obligations which are satisfied over a period of time.

The principal consideration for our determination that performing procedures relating to Protiviti revenue is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

The principal consideration for our determination that performing procedures relating to Protiviti revenue relating to time-and-material and fixed fee arrangements is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the revenue recognition process.

These procedures also included, among others (i) testing the Protiviti revenue recognized for a sample of revenue transactions by obtaining and inspecting the contracts, reporting related to actual costs incurred, and support related to expected costs incurred and (ii) on a sample basis, recomputing the revenue recognized based on the proportional performance method.

These procedures also included, among others (i) testing the Protiviti revenue relating to time-and-material and fixed-fee arrangements recognized for a sample of revenue transactions by obtaining and inspecting the contracts, reporting related to actual costs incurred, and support related to expected costs incurred and (ii) on a sample basis, recomputing the revenue recognized based on the proportional performance method.

/s/ PricewaterhouseCoopers LLP

4 unchanged sentences

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-K

Item 8. Financial Statements and Supplementary Data