Robert Half International Inc. (RHI): Mixed 2Q Results with widening Protiviti pressures tempering the Talent Solutions recovery

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Robert Half International Inc. (RHI): Mixed 2Q Results with widening Protiviti pressures tempering the Talent Solutions recovery

Goldman Sachs Robert Half International Inc. (RHI)

midpoint of 3Q, suggesting limited near-term improvement. While the weakness is

tied to the current regulatory backdrop rather than a structural decline in AML

demand, the company noted that pressure will likely persist through 4Q 2026 before

comparisons begin to ease in 2027.

n International Protiviti weakness emerged as a new pressure point. Protiviti

revenue declines were broad-based geographically in 2Q, with US revenue down 6%

y/y and international revenue down 3% y/y. International trends deteriorated after

previously serving as a relative source of strength. The international slowdown was

driven primarily by the wind-down of several large public sector engagements,

particularly in Germany, and was compounded by weaker macroeconomic

conditions, elevated energy costs and softer client sentiment in parts of Europe. RHI

indicated that these factors have made it more difficult to replace completed

projects, contributing to weaker international growth and a more broadly challenged

overall Protiviti revenue outlook.

n Protiviti margins challenged by revenue and mix headwinds. Protiviti’s operating

margins were just 2.1% in 2Q, down 450 bps y/y, reflecting negative operating

leverage and mix headwinds. While RHI guided to a q/q recovery in Protiviti

operating margins to 6-8% in 3Q (still down 50 bps y/y at the midpoint) following

restructuring actions, profitability remains constrained by lower utilization, fewer

historically attractive large-scale remediation projects and a shift toward

shorter-duration operational efficiency and technology-focused engagements that