Robert Half International Inc. Price & Performance (RHI)

And welcome to the Robert Half First Quarter twenty twenty five Conference Call. Today's conference call is being recorded. And the number one on your telephone keypad. Our host for today's call are mister Keith Waddell, president and chief executive officer of Robert Half, and mister 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 ks 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's 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 twenty twenty five, global enterprise revenues were 1,352,000,000.000 down 8% from last year's first quarter on a reported basis down 6% on an 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 twenty twenty five net income was reduced by 13¢ per share for onetime charges related to cost actions to reduce ongoing administrative Business confidence levels moderated during the quarter in response to heightened economic uncertainty over US 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, our unique business model that includes both professional staffing and business consulting services. Cash flow used in operations during the quarter was 59,000,000 Cash outflows are typically elevated each year in the first quarter due to the annual payment cycle for bonuses and SaaS subscription renewals among others. In March, we distributed a 59¢ per share cash dividend to our shareholders of record for a total cash outlay of 61,000,000. Our per share dividend has grown an average of 11.6% annually since its inception in 02/2004 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 39,000,000 We have 6,600,000.0 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 $1,352,000,000 in the first quarter, on an On an adjusted basis, first quarter Talent Solutions revenues were down 11% year over year. US talent solutions revenues were 676,000,000 down 10% from the prior year's first quarter. Non U. S. Talent Solutions revenues were 199,000,000 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 twenty twenty five has 63.2 billing days compared to 63.5 billing days during the second quarter of twenty twenty four. Currency exchange rate movements during the first quarter had the effect of decreasing reported year over year total revenues by $22,000,000 for Talent Solutions and 2,000,000 impact to Protiviti. 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 Protiviti. Global revenues in the first quarter were $477,000,003 $87,000,000 of that is from The United States. And 90,000,000 is from outside of The United States. On an adjusted basis, global first quarter Protiviti revenues were up 5% versus the year ago period. US Protiviti revenues were up 4% while non US Protiviti revenues were up 8% compared to one year ago.

Protiviti and its independently owned member firms serve clients through 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 twenty twenty four. Our permanent placement revenues were 12.8% of consolidated talent solutions revenues in the in the in the current quarter. And 12.3% in the first quarter of twenty twenty four. When compared with contract talent solutions gross margin, when I'm sorry. When combined with 46.7% compared to 47% of applicable revenues in the first quarter one year ago.

For Protiviti, gross margin was 18.9% of Protiviti revenues in both the current quarter and the first quarter of twenty twenty four. Adjusted gross margin for Protiviti was 18.1% for the quarter just ended, compared to 20.7% last year.

Protiviti gross margin for the current quarter includes $8,000,000 of onetime charges related to cost reductions to reduce ongoing administrative expenses. These mid April actions are expected to result in annual savings of $32,500,000 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 and 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 and A costs were 35.2% for the quarter just ended compared to 33% one year ago. Talent solutions SG and A costs were 43.7% of Talent Solutions revenues in the first quarter versus 44.3% in the first quarter of twenty twenty four. Adjusted Talent Solutions SG and A costs were 45.5% in the quarter just ended compared to 40.8% last year. Talent Solutions SG and A for the current quarter includes 9,000,000 in onetime charges related to mid March cost actions to reduce ongoing administrative expenses, which are expected to result in annual savings of 47,500,000.0 with full effect in the second quarter and thereafter. First quarter SG and A costs for Protiviti were 16.3% of Protiviti revenues, compared to 15.9% of revenues for the same quarter one year ago.

Operating income for the quarter 39,000,000 Adjusted operating income was $19,000,000 in the first quarter, or 1.4% of revenue. First quarter adjusted operating income for our Talent Solutions divisions was $10,000,000 or 1.2% of revenue. Adjusted operating income for Protiviti in the first quarter was 9,000,000 or 1.8% of revenue. Adjusted operating income includes $17,000,000 of onetime charges related to cost actions to reduce ongoing administrative expenses, 9,000,000 for Talent Solutions, and 8,000,000 for Protiviti. Our first quarter twenty twenty five income statement includes $20,000,000 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 and 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 thirty percent 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 787,000,000 and implied days sales outsides outstanding or DSO, was fifty two point four 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 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 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 1,310,000,000.00 to 1,410,000,000.00 Income per share dollars 36 to 46¢. Mid point revenues of a dollar 36 of 1,360,000,000.00 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 11, 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 one to up 4%, Overall, down five to 9%. Adjusted gross margin percentages, for contract talent 38 to 40%.

Protiviti, 21 to 24%.

Overall, 37 to 39%. Adjusted SG and A as a percentage of revenue talent solutions 43 to 45%, [indiscernible] 15 to 16%, Overall, 33 to 35%. Adjusted operating income, as a percentage of revenues talent solutions, 2% to 4% creativity, six to 8%, overall three to 6%. Tax rate, 31 to 35%. Shares outstanding, 100% to 101,000,000. 2025 capital expense expenditures and capitalized cloud computing costs, 75,000,000 to 95,000,000 with 15 to 25,000,000 in the second quarter. All estimates we provide on this call are subject to 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. US trade policy, uncertainty has caused many economists to lower their economic growth forecast for the remainder of the year. Business confidence levels which had surged following the US elections, have recently moderated. Given this, in March, we reduced our administrative cost structure and lowered staffing levels at corporate services and for administrative field positions in talent solutions and did so in April for Protiviti. Revenue producing roles were not impacted. This results in annual cost savings of 80,000,000 and will improve profitability levels. Despite the present uncertain outlook, we remain optimistic about our growth prospects once economic conditions improve. US job openings continue to reflect strong pent up demand and remain well above historical averages. The supply of labor remains tight, The unemployment rate in The United States for those with a college degree is only 2.6%. With rates for many in demand, accounting, finance, and other professionals even lower.

Though the latest NFIB small business optimism Index is off its recent peaks, it is still only slightly below its long term average.

Further, 40% of small business owners report job openings they could not fill in March. And of those trying to hire, 87% reported few or no qualified applicants, for the positions they were trying to fill. As business confidence improves, hiring urgency returns. Project demand accelerates, deferred backlogs and growth initiatives are reprioritized, and labor churn normalizes, This puts pressure on client resources that are often already stretched thin and creates hiring and consulting demand that traditionally sets the stage for very strong gains early in the early part of growth cycles. Although Protiviti's results were also impacted by elevated economic uncertainty it achieved year over year revenue growth for the third quarter in a row.

Activities prospects and pipeline remain very strong though the current environment has lengthened the time it takes to convert opportunities to wins and begin projects. The expanded use of contract professionals sourced through talent solutions continues to be a significant contributor to Protiviti's success is a key component of our enterprise wide competitive advantage. We hold steadfast to our time tested corporate purpose to connect people to meaningful and exciting work and provide clients with the talent and consulting expertise they need to confidently compete and grow.

We'd like to thank our employees across the globe for their resilience and unwavering commitment to success Their efforts have earned us significant recognition already in 2025 including being honored as one of America's most innovative companies by fortune, [indiscernible] best large employers by Forbes. We're particularly proud that high levels of employee engagement again earned both Robert Half and Protiviti recognition as two of fortunes 100 best companies to work for. Mike and I'd be happy your quest answer your questions, Please ask just one question and a single follow-up as needed. If there's time, we'll come back to you for additional questions.

Thank you. At this moment, if you'd like to ask a question, please press 1. On your touch tone telephone. If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. To withdraw your question, please press 2 on your touch tone telephone. And your first question comes from the line of Mark Marcon. With Baird.

Hey, good afternoon and thanks for taking my questions.

Keith, when we take a look at Protiviti, you know, clearly, you know, the revenue was still up year over year.

The margins ended up contracting. Obviously, you've got a bench model and deleveraging. And so the questions are around Protiviti. When you think about the book of business within Protiviti, how much would you characterize as basically being you know, recurring, or less discretionary relative to, you know, purely more discretionary nice to haves because you're still looking at, you know, potential growth for the first quarter. And I'm wondering how you think that kind of unfolds as the year goes along and where the margins you know, could end up being if things stay steady state or conversely if things get a little bit worse, and then I've got a Well, I guess we've never really officially, formally broken out discretionary versus nondiscretionary. If you look at our big four solutions, risk and compliance, primarily regulatory, remediation and compliance. That's not discretionary. If you look at technology consulting, clearly, there's a must do and a yeah.

It improves thing to do dichotomy there. So that is split Internal audit in our largest industry financial services is not discretionary. It has to happen. In the non FSI industries, segments, There is some discretion there. And then business process improvement is probably the most [indiscernible] If those four are about equal, I mean, technology's a little larger, and risk in consulting is a little smaller. You know, I I and added up the split I just talked about. But, I mean, there's a there's a decent mix of the two, As we said, this is the third quarter in a row. That they've had revenue growth notwithstanding the uncertain macro We expect sequential growth in all of those major solutions into the second quarter. Were more conservative with that sequential growth. Than we've been in years past. But we still feel good given the pipeline [indiscernible] adjusted for the slower conversion of pipeline time, We feel reasonably good about where Protiviti is. From a profitability standpoint as you observed.

That the revenue shortfall relative to expectation was centered primarily on Protiviti employees versus contract employees, so it had a disproportionate impact on profitability. The good news is in the coming quarter, just the opposite happens and that we actually convert more than the revenue improvement to the bottom line, because not only are we better utilizing the full time staff we have we're also swapping out some full time staff contract staff, and actually save direct cost dollars in that way. So it's actually one of our better sequential improvements given that dynamic.

That's great. And then I'm hesitant to ask this question, but I've been getting it a lot from a lot of different investors. And so I know it's top of mind with with a number of them. I think I know the answer already. But when we take a look at capital allocation, where does where does the dividend sit on your capital allocation priorities? And could you envision a scenario based on what you're currently seeing where the dividend would ever be cut?

And so we've had a long, long, long term commitment to our excess cash flow to shareholders. Over the long term, that's been about 50% dividends 50% repurchases. As earnings have contracted, dividends, play a much larger role in that capital return. We're committed, just as we have since we started in '20 02/2004. To raise that dividend. We just raised it last quarter. It would certainly be our intention, not only to keep it, but can keep but to keep him increasing it. That the cash flow of the first quarter, as we already commented, there are seasonal seasonal impacts to cash flow, I e, annual bonus payments, annual SaaS payments, that make first quarter cash flow look low but we certainly expect that to rebound nicely for that reason. So no change in capital allocation strategy. Still return all our cash flow to share excess cash flow to shareholders. [indiscernible] and it just happens to be given where overall cash flow is, dividend's gonna be a larger portion of the total. But that's something we believe will work its way out. As we move forward in time just as we have in the past. But no change in capital allocation strategy.

That's what I expected. Thanks a lot.

And the next question will come from Andrew Steinerman with JPMorgan. Keith. I'd like to hear a little bit more about the efficiencies Robert Half is bringing to the administrative costs structures in both Talent Solutions and Protiviti. You were very clear to say these, these cost savings won't affect revenue producing roles. Could you just be a little more specific about how you're replacing these roles Is this a tech enabled, solution? You know, are the the revenue roles gonna be as enabled to hungrily go after orders with these efficiencies.

Well, you know, for two or three years, we've had some pretty significant negative leverage on our administrative compensation and overhead cost, And our view was given lower volumes, given technology improvements and tools, that have, that we've implemented over the last few years that we could operate more efficiently The majority of the reductions were corporate services. And those reductions that happened in the field were more field management positions, not field sales support positions. So I would argue there's very, very little impact on how well our revenue producing roles are supported based on what we did principally at corporate services.

K. Thank you, Keith. And the next question will come from Manav Patnaik with Barclays. But historically, you've also said that we'd rather be a little bit late to cut [indiscernible] So just curious on you know, what you've heard directly from your clients, and you've talked about how all economists are predicting different things. But any change in behavior on your clients that prompted you to take this action right now?

Well, the change in behavior is a continuation of the cautiousness that we were beginning to see improvements in that we talked about on the last call. We we came out of the election. There was a surge in business confidence. Our discussions and the tender of our discussions with our clients was improving. And so we were quite optimistic in our forecast for the first quarter. Assumed flatness with what we'd seen in the fourth. And that changed, those discussions changed as a result of the uncertainty and the trade policy uncertainty that I talked about already.

But the fact that it had been a couple of years since we had adjusted corporate overhead cost.

We were continuing to see negative leverage. Given the renewed economic uncertainty, it appeared that this was gonna be with us longer than we had hoped. And so some combination of all those factors said, it was time for us to to take cost actions, again, not impacting revenue producer. [indiscernible] Enough. And then just a quick follow-up. I I know you did some M and A recently. Just curious if you could help us with the contribution either in the quarter or for the rest of the year.

Yeah. And so Protiviti acquired a small consulting firm in France that specializes in financial services. They have about 50 consultants, so it's it's a very small transaction. But but one we're excited about. It adds capabilities that we didn't otherwise have They're in Paris.

And the next question will come from Stephanie Moore with Jefferies.

Hi. Excuse me. Hi, Afternoon good afternoon. Thank you.

Maybe sticking with the topic of Protiviti here can you talk a little bit about maybe the pipeline of projects or underlying demand environment that you're seeing within Protiviti, if you've seen any cusp any of your clients that may have paused to projects or delayed the start of projects just given this underlying uncertain environment? Thank you.

Well, as to the pipeline, the pipeline is up. Year on year.

The weighted pipeline weighted for probability of excess success is up, year on year. That said, we did see during the first quarter, some delays some pauses, related to particularly, financial services client engagements. But all of that's been factored in in the guidance we're giving for the second quarter. But, yes, Protiviti has certainly been impacted somewhat, by the macroeconomic uncertainty.

That's been exacerbated in the last few months.

But that said, they still managed to grow year on year.

Absolutely. That's helpful. And then one clarification on the on the 2Q outlook. I guess, I'm trying to understand what the underlying perm demand environment like I think you kinda called out what it was in March, and I think it looks like on a year over year basis, it's a it looks like may have improved April versus March. Maybe I'm I'm misreading this But is there something from a year over year comp standpoint we should think about, or did perm kind of end up turning the corner a little bit better for the first couple weeks of April?

Thanks.

Well, it's just factual that for two or the three weeks, I guess, in April for perm, that it's stronger than it had been, and it's stronger than contract. But it's three weeks, and we've talked many times. Post quarter perm results are much less predictive of full quarter results than is the case in contract. But that said, we did begin the quarter in perm.

More strongly than we did in contract.

And that's a good thing.

Thank you. Appreciate it.

And your next question will come from Kartik Mehta with Northcoast Research.

Good afternoon, Keith.

This may be a odd question. I realize that. But you talked about the uncertainty in the economy, and I know you talked about when things turn, they could turn quickly. And seems like know, we get a new headline every day. And so I'm wondering if things do turn quickly, how quickly could you ramp back up And you know, how quickly would that impact margins? Or how do you see the business trending if something like that happens?

Well, we think we could turn back up quickly, as I've said, earlier, we have not impacted our revenue producers. These cost actions. We've carried more revenue producers than the revenues would otherwise dictate. We've talked about 20% to 30% upside based on prior productivity levels. I would also say we're seeing nice early traction from a technology stand [indiscernible] where we use AI to direct our recruiters to the clients we believe have the best probability of converting. And so there we're seeing it takes fewer calls. To get a client visit, And once you get a client visit, we get better conversion rates to job orders than we did previous technology. So I would argue, if anything, that even helps participate in the upside, call this digital labor if you will, that gives us capacity above and beyond the human labor that we've retained beyond what the revenues would say in the first place. And so I'm I am very bullish on our ability to participate in the upside. We've talked about unemployment is lower, That means it'd be tougher for clients to hire on their own. In the upside, that's good for us. There's more pent up demand.

Job openings are still elevated. That's good for us. Churn churn is very subdued as we speak. Just to illustrate that, I think people often forget that the jobs numbers that come out every month are net numbers. They're hires minus separations, which are are essentially quits. And so as an example, in June of twenty twenty three, there were 257,000 jobs added. But that was 6,500,000 hires and 6,300,000 separations We'll roll the clock forward to last month, Here, we had 228,000 net job openings, not that different from June of twenty twenty three. But here, we've got 5,500,000 hires in 5,300,000 separations, meaning 1,000,000 fewer hires 1,000,000 fewer separations on the set than the same net jobs number. The point is that's a significant difference in churn. And so as clients and candidates get more confident, as things turn, there are more hires, there are more quits, there's more churn, That's good for our business. On the upside.

And then, Keith, I know you've talked about this in the past, but just wanted to get your perspective again. Of technology impacting the business, you know, whether it's LinkedIn or apps people are using to find help You know, has that impacted your business, especially you know, your small business customers?

I would say the the job boards and the aggregators have been around a long time. LinkedIn has been around a long time. The freelance platforms have been around a long time. We consider all of them frenemies because on the one hand, we compete at some level. On the other hand, we also use their technologies and our own sourcing efforts. And I would argue that none of them have recently moved the needle and changed the calculus in a a significant way as to whether a small business owner decides to use a recruiting firm like Robert Half or not. So those options have been there for long periods of time. And I don't think, relatively speaking, they're any more attractive than they were. We've they've gotten better. We've gotten better.

Alright. Thank thank you very much.

And the next question comes from George Tong with Goldman Sachs.

Hi, thanks. Good afternoon. You mentioned client and job seeker caution.

Is elongating decision cycles and subduing hiring activity and new project starts. Can you talk about how this was reflected in weekly sequential revenue trends over the course of the quarter?

Well, if you remember last quarter, we said the first couple of weeks were holiday impacted. The third week kinda returned to what we had seen the prior quarter, which had been flat, I believe, for twenty three straight weeks. So we were getting back to what we expected. But then start at least early February the weekly started to drift down. But then by March, they flattened out at that somewhat lower level.

So on a weekly sequential basis, as we said in our prepared remarks, the month of March and the April are essentially flat. On a relative to the entire first quarter, that's about down one and a half percent.

The guidance we gave was more conservative and assumes down 4%. And so again, on a weekly basis flat for the most recent six weeks, so it's stabilized, at a one and a half percent lower level than we saw on average for the prior quarter.

Got it. That's helpful. And then can you talk a little bit about how much of an do you think job displacements by AI is having on the business? Specifically, how much of the revenue decline you're seeing now you would attribute to cyclical factors versus AI?

Well, I as it relates to AI driven tools today, that impact accounting and finance, which is our major [indiscernible] I would say there's very, very little impact And the revenue impacts we've seen are because of client cautiousness, that leads to less hiring that I just talked about, which in turn leads to candidate caution which leads to fewer candidate quits. That I just talked about. So less churn due to client and candidate caution and therefore cyclical factors, I think, are by and large, the the the essential reason why not just ours, but the entire industry revenues have been impacted.

I'd say further on this issue of displacement, and I'm sure you've heard this as well, there's this concept of Jevan's Paradox that says when resources become more efficient because of AI or otherwise, the cost of using it decreases, and that lower cost in fact, leads to increased consumption and usage. And so I think in the in the terms of AI, offsetting the the apparent impact, there will be displacement. Will be the potential impact There'll be more usage because the unit costs are less. I look at our own internal IT projects, and if the thought of it cost me less to modify, develop software for Robert Half my guess is I might use more rather than less because it's less costly to do. So I think there's some credibility to Jevan's paradox. You form your own opinion. I'm sure you already have.

Got it. Very helpful. Thank you.

And we'll take a question from Kevin McVeigh with UBS.

Great.

Thanks so much. Hey, Keith. I just wanted to clarify one thing on the restructuring. I just wanna make sure I heard you right. I thought you said there there was 17¢ in the q one and you took another charge in was was it April for Protiviti, or or was all of that in the first quarter? Or was there, you know, a q two charge for Protiviti? Protiv the q two guidance? It's all it's all in the first quarter. It's all in the first quarter. It just happened a few weeks apart.

Got it. Okay. So it was all in one end.

As you think about that So we improved we we accrued all that Protiviti did in April for the first quarter.

Got it. Got that seventeenth much of it?

The core verse the Protiviti's or is there any way to think about that?

Well, you were breaking up So it was 9,000,000 staffing, 8,000,000 Protiviti in cost, and then we the resulting savings are 80,000,000 and it was $42.05 and $37.05. Between the two.

And that 80,000,000 that 80,000,000 is about 54¢ a share savings.

And is that I know that annual. Do you start to see that in in in the second half of this year, or sense how that 80,000,000 comes in?

Yeah. We see and so divide it by four, that's 20,000,000 a quarter.

We'll see 18 of that in the second quarter. And then we'll see 20 of that [indiscernible] quarters March. So it'll happen right away. But for the piece in Protiviti that happened pre April mid April. So 18,000,000 savings in q two and 20,000,000 savings in q three and four from the cost actions.

So the 36 to 46¢ already includes which is about is it how how much cost savings in that It includes the 18 the 36 to 46, or the 41 at midpoint. Includes That'll the 18,000,000 in savings.

Got it.

Okay.

So without that, 18,000,000, it would have been obviously that much lower, the EPS.

That's right.

But, I mean Okay. The other the other observation I would make inclusive of the savings our sequential progression between quarters one and two is one of the better progressions we've had. Historically.

Yeah. No. I get it.

And if you and if you further and if you pro form a in a full quarter benefit for Tivity, Protiviti's margins [indiscernible] essentially to what they were a year ago.

Right.

To the 18,000,000, if if you were to it was that taxed to the the the regular rate? I'm just trying to like, pick out what the Right. What the benefit of the Well, the tax provision, tax provision is a little wonky. But if you take the 18,000,000 and you, tax effect it, I get 12 pennies, and I'm looking at the team here. You take so you take 67% of it at a 33% tax rate. Which gives you 12. And it's essentially a hundred million shares.

So I call it 12p.

It's 12¢ benefit in q two from the restructuring. It's very helpful. Correct. Thank you.

Thank you very much.

Yep.

And next is Jeff Silber with BMO Capital Markets.

Hey. Thank you. This is Ryan on for Jeff.

I was just wondering if you have any comments on the competitive environment. I was wondering how your bearing compared to big four on Protiviti and then just related to the other 10 pages and contract solutions. Thank you.

Well, I guess we would observe on the big four side, the competitive environment, has stabilized. We're not seeing the crazy pricing. That we had seen you know, nine, twelve, fifteen months ago, On the talent solution side, most of our competitors are local and regional. And we haven't seen much change in that.

Throughout this period of client candid cautiousnesses, were now going on for almost three years.

So I would argue not much change in the competitive environment. And if anything, more rational particularly as it relates to the big four, than it had been.

Got it. Thank you.

And our next question is from Trevor Romeo with William Blair.

Hi. Thank you for taking the questions. Just a couple quick ones, I guess, on the the talent Solutions business. One was just kind of you know, wanted to ask about, I guess, how the mix is evolving, between high skilled and and more sort of operational roles right now. Are you still seeing, you know, I guess, relative resilience in the higher skilled roles? And then as it relates to the, the FTEP, so the full time engagement professionals, anything you'd call out in terms of you know, demand or interest in those arrangements?

Yeah. I'd say we continue to move up the skill curve.

That's particularly true in technology. If you'll look at our segments, technology's done better for two or three four quarters in a row. Much of that involves going from infrastructure and operations positions to software and applications positions there's a a meaningful bill rate difference You'll note on the bill rate side, we went from the plus three to the low plus fours this quarter. Year on year bill rate increases. Much of that is this skill mix impact, particularly as it relates to technology.

On the EFTAP side, the issue with EFTAP because we pay them for benefits, the cost per hour for those people is much higher. Than is for our core contractors. And that higher price has put some pressure on the volumes in that business.

But particularly returning to how well will we participate in the upside, FTEP becomes a big part of the upside. Clients will be more willing to pay those prices that they at that time as they've proven in the past. And that's good for margins. That's good for bill rates. That's good for length of assignment. That's good for everything.

And, Keith, could you just remind us, big a portion of your mix are the FTEPs at this point?

It's it's roughly 20%. Of our contract business. I'm measuring hours versus dollars at changes a little bit, but it's in that it's in that range.

Okay.

Thank you. That that's And just one quick one on the international business. It just looks like the, the account solutions the trend got a little bit worse in the first quarter. Could you just talk through kind of what seeing in Europe or any other countries?

Well, I guess I would argue that more of the differential between the growth rates in US versus non US relate to the year ago comps than they do to current performance.

And so as an example, a year ago in US, we were down 19%. And a year ago, IZ, we were down ten. And so clearly, IZ has a tougher comp.

And that same differential plays out, and you look at this quarter, versus a year ago.

I would argue that that's more about comps. And I would further say that you certainly read read a lot about the negativity as it relates to tariffs in Europe, but I can tell you our people are particularly excited about the opportunities in the second half of the year that come from this infrastructure and defense spending, that's slated to happen particularly in Germany. And so we are already aggressively and proactively positioning ourselves for that.

So our people in Europe and particularly our people in Germany [indiscernible] quite excited about that opportunity.

Okay. Very helpful. Thank you.

Okay.

So that was our last question. Thank you very much for joining us.

Thank you.

This concludes today's teleconference. If you missed any part of the call, it will be archived in audio format in the investor center of Robert Half's website at roberthalf.com. You can also dial into the conference call replay. Dial in details and the confirmation code are contained in the company's press release, issued earlier today.