Q1 2025 Robert Half Inc Earnings Call
Please stand by.
Speaker Change: Hello and welcome to the Robert Half First Quarter 2025 conference call.
Speaker Change: Today's conference call is being recorded. If you'd like to ask a question during the Q&A portion of the call, please press star in the number one on your telephone keypad. Our host for today's call are Mr. Keith Wadell, President and Chief Executive Officer of Robert Half, and Mr. Michael Buckley, Chief Financial Officer. Mr. Wadell, you may begin. Mr. Wadell, you may begin.
Speaker Change: 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.
Speaker Change: 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 far-looking statements.
Speaker Change: These risks and uncertainties are described in today's press release and in our most recent 10K and 10Q filed with the SEC. We assume no obligation to update the statements made on today's call.
Speaker Change: During his presentation, we may mention some non-GAAP financial measures and reference these figures as adjusted.
specifically.
We present adjusted revenue growth rates.
and foreign currency exchange rates. [inaudible]
Speaker Change: Additionally, we present adjusted gross margin, adjusted selling general and administrative expenses, and adjusted operating income.
Speaker Change: 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.
Speaker Change: It's the gains and losses from investments and the changes in deferred compensation obligations completely offset. There's no impact on our reported net income.
Speaker Change: For the first quarter of 2025, Global Enterprise Revenues were 1.352 billion, down 8 percent from last year's first quarter on a reported basis and down 6 percent on an as adjusted basis.
Speaker Change: That income per share in the first quarter was 17 cents compared to 61 cents in the first quarter one year ago.
Speaker Change: First quarter 2025 net income was reduced by 13 cents for share for one time charges related to cost actions to reduce ongoing administrative expenses.
Speaker Change: Business confidence levels moderated during the quarter in response to heightened economic uncertainty over US trade and other policy developments.
Speaker Change: Client and Job Seeker Caution continues to elongate decision cycles and subdue hiring activity and new project starts.
despite the uncertain outlook.
Speaker Change: and support our clients' talent and consulting needs through the strength of our industry leading brand, our people, our technology, and our unique business model that includes both professional staffing and business consulting services.
Speaker Change: Cash Flow used in operations during the quarter was $59 million.
Speaker Change: Cash outflows are typically elevated each year in the first quarter due to the annual payment cycles for bonuses and SaaS subscription renewals among others.
Speaker Change: In March, we distributed a 59 cent per share cash dividend to our shareholders of record for a total cash outlay of 61 million.
Speaker Change: Our per share, Dividend has grown an average of 11.6% annually since its inception in 2004. The March 2025 dividends was 11.3% higher than the prior year.
Speaker Change: We also acquired approximately 650,000 Robert Half shares during the quarter for 39 million. We have 6.6 million shares available for repurchase under our board approved stock repurchase plan.
Speaker Change: Return on the invested capital for the company was 5% in the first quarter. Now I'll turn the call back over to our CFO Mike Buckley.
Mike Buckley: Thank you, Keith. Hello, everyone. As Keith noted, global revenues were 1.352 billion in the first quarter.
Mike Buckley: On an adjusted basis, first quarter talent solutions revenues were down 11% year-over-year. US talent solutions revenues were 676 million, down 10% from the prior year's first quarter.
Mike Buckley: On U.S. talent solutions revenues were $199 million, down 15% year-over-year. We conduct talent solutions operations through offices in the United States and 17 other countries.
Mike Buckley: In the first quarter, there were 61.9 billion days compared to 62.8 billion days in the same quarter one year ago.
Mike Buckley: The second quarter of 2025 has 63.2 billion days compared to 63.5 billion days during the second quarter of 2024
Mike Buckley: Currently exchange rate movements during the first quarter had the effect of decreasing reported year-over-year total revenues by 12 million.
Mike Buckley: 10 million for talent solutions and 2 million impact to productivity.
Mike Buckley: Contract count 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%.
Mike Buckley: Now let's take a closer look at the results for productivity Global revenues in the first quarter were 477 million 387 million of that is from the United States and 90 million is from outside of the United States
Mike Buckley: On an adjusted basis, global first quarter productivity revenues were up 5% versus the year-ago period.
Mike Buckley: US Protivity Revenues were up 4% while non-US Protivity Revenues were up 8% compared to one year ago.
Mike Buckley: Creativity and its independently owned member firms serve clients through locations in the United States and 28 other countries [inaudible]
Mike Buckley: 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.
Mike Buckley: Conversion, or contract to hire, revenues were 3.2% of contract revenues in both the current quarter and the first quarter of 2024.
Mike Buckley: Our permanent placement revenues were 12.8% of consolidated talent solutions revenues in the current quarter and 12.3% in the first quarter of 2024. When compared with contract talent solutions gross margin,
Mike Buckley: When I'm sorry, when combined with contract talent solutions gross margin, overall gross margin for talent solutions was 46.7% compared to 47% of applicable revenues in the first quarter one year ago.
Mike Buckley: For Productivity, Gross Margin was 18.9% of Productivity revenues in both the current quarter and the first quarter of 2024.
Mike Buckley: Adjusted gross margin for productivity was 18.1% for the quarter just ended compared to 20.7% last year.
Mike Buckley: Retivity Gross Margin for the current quarter includes 8 million of one-time charges related to cost reductions to reduce ongoing administrative expenses.
Mike Buckley: with 75% of a full quarter's benefit recognized in the second quarter due to timing and the full benefit each quarter thereafter.
Mike Buckley: Enterprise SG&A costs were 34% of global revenues in the first quarter compared to 35.4% in the same quarter one year ago.
Mike Buckley: Adjusted Enterprise S-GNA costs were 35.2% for the quarter just ended compared to 33% one year ago.
Mike Buckley: Talent Solutions, SG&A costs were 43.7% of talent solutions revenues in the first quarter versus 44.3% in the first quarter of 2024
Mike Buckley: Adjusted talent solutions SG&A costs were 45.5% in the quarter just ended compared to 40.8% last year.
Mike Buckley: Town Solutions, S-GNA for the current quarter includes 9 million and one-time charges related to mid-march cost actions to reduce ongoing administrative expenses.
Mike Buckley: First quarter, SG&A costs for frativity were 16.3% of frativity revenues compared to 15.9% of revenues for the same quarter one year ago.
Mike Buckley: Operating income for the quarter was 39 million, adjusted operating income was 19 million in the first quarter or 1.4% of revenue
Mike Buckley: First quarter adjusted operating income for our talent solutions divisions was 10 million or 1.2% of revenue.
Mike Buckley: Adjusted operating income for fertility in the first quarter was 9 million or 1.8% of revenue.
Charges related to cost actions to reduce ongoing administrative expenses
9 million for count solutions, and 8 million for portivity.
Mike Buckley: Our first quarter 2025 income statement includes a $20 million loss from investments held in an employee-deferred compensation trust.
Mike Buckley: This is completely offset by an equal reduction of employee deferred compensation costs, which are reflected in SGNA expenses and direct costs. As such, it has no effect on our reported net income.
Mike Buckley: Our first quarter tax rate was 22%, compared to 30% one year ago.
Mike Buckley: 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 percent.
Mike Buckley: At the end of the first quarter, accounts receivable were $787 million, and implied day sales outsides outstanding, or KISO, was 52.4 days.
Mike Buckley: 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.
Mike Buckley: Contract Talent Solutions exited the first quarter with March revenues down 13% versus the prior year, compared to a 12% decrease for the full quarter.
Mike Buckley: Revenues for the first two weeks of April were down 12% compared to the same period last year.
Mike Buckley: permanent placement revenues in March were 10% versus March 2024. This compares to an 8% decrease for the full quarter.
Mike Buckley: For the first three weeks of April , permanent placement revenues were down 2% compared to the same period in 2024
Mike Buckley: 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 [inaudible]
Mike Buckley: With that in mind, we offer the following second quarter guides, revenues of 1.31 billion to 1.41 billion, income per share, 36 to 46 cents.
Mike Buckley: Midpoint revenues of $1.36 billion are 7% lower than the same period in 2024 on an as-adjusted basis.
Mike Buckley: On a sequential basis, mid-quarter estimated Q2 revenues are down 4%.
Mike Buckley: For the most recent six-week period ended April 11th, weekly sequential revenues have remained essentially flat [inaudible]
Mike Buckley: The major financial assumptions underlying the midpoint of these estimates are as follows.
Mike Buckley: Adjusted revenue growth year-over-year for talent solutions, down 10 to 14 percent.
Overall, down 5 to 9%
Overall, 37 to 39 percent.
Mike Buckley: Adjusted S-GNA as a percentage of revenue, talent solutions 43-45%, productivity 15-16% overall 33-35%
Mike Buckley: Adjusted operating income as a percentage of revenues, talent solutions, 2 to 4%
Shares Outstanding 100-101 Million [inaudible]
with 15 to 25 million in the second quarter.
Mike Buckley: All estimates we provide on this call are subject to the risks mentioned in today's press release and in our SEC filings.
Now I'll turn the call back over to Keith.
Thank you, Mike.
Mike Buckley: U.S. Trade Policy, and uncertainty has caused many economists to lower their economic growth forecast for their remainder of the year.
Mike Buckley: This is confidence levels which had surged following the US elections have recently moderated.
Mike Buckley: 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 creativity.
Mike Buckley: Revenue-producing roles were not impacted. This results in annual cost savings of 80 million and will improve profitability levels.
Mike Buckley: Despite the present uncertain outlook, we remain optimistic about our growth prospects once economic conditions improve.
Mike Buckley: U.S. job openings continue to reflect strong pin-up demand and remain well above historical averages.
Mike Buckley: The supply of labor remains tight. The unemployment rate, the United States, for those with a college degree is only 2.6 percent with rates for many in demand, accounting, finance and other professionals even lower.
Mike Buckley: Though the latest NFIB Small Business Optimism Index is off its recent peaks, it is still only slightly below its long-term average.
further.
Mike Buckley: 40% of small business owners report job openings they could not feel in March and of those trying to hire 87% reported few or no qualified applicants for the positions they were trying to fill.
Mike Buckley: As business confidence improves, hiring urgency returns, project demand accelerates, deferred backlogs and growth initiatives are reprioritized and labor churn normalizes.
Mike Buckley: This puts pressure on client resources that are often already stretched thin and creates hiring and consulting demand that traditionally that's the stage for very strong gains early in the early part of growth cycles.
Mike Buckley: Although opportunities results were also impacted by elevated economic uncertainty, it achieved your over-year revenue growth for the third quarter in a row.
Mike Buckley: Activities, Prospects, and Pipeline remain very strong, though the current environment has a lengthened the time it takes to convert opportunities to wins and again projects.
Mike Buckley: The expanded use of contract professionals sourced through talent solutions, continues to be a significant contributor to productivity success, and is a key component of our enterprise-wide competitive advantage.
Mike Buckley: 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.
Mike Buckley: We would like to thank our employees across the globe for their resilience and wavering commitment to success.
Mike Buckley: Their efforts have earned a significant recognition already in 2025, including being honored as one of America's most innovative companies by fortune.
Mike Buckley: kind of one America's best large employers by Forbes were particularly proud that high levels of employee engagement again earned both Robert Half and creativity recognition as two of fortunes, 100 best companies to work for.
Speaker Change: Thank you. At this moment, if you'd like to ask a question, please press star 1 on your touchtone telephone. If you're joining us today using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment.
Speaker Change: To withdraw your question, please press star two on your touchtone telephone and your first question comes from a line of Mark Marcon with Baird
Good afternoon and thanks for taking my questions.
Speaker Change: When we take a look at productivity, clearly, the revenue was still up year over year. The margins ended up contracting. Obviously you've got a bench model and de-leveraging and so the questions are around productivity.
Speaker Change: because you're still looking at potential growth for the first quarter and I'm wondering how do you think that unfolds as the year goes along and where the margins could end up being a thing-stay study state or
Speaker Change: Conversely, if things get a little bit worse and then I've got to follow up [inaudible]
Well, I guess we've never really-
Speaker Change: Officially, formally, broken out, discretionary versus non-discretionary. If you'll look at our big four solutions.
It improves thing to do dichotomy there, so that is split. Internal audit.
Speaker Change: In our largest industrial financial services is not discretionary. It has to happen.
in the Non-FSI.
Speaker Change: Industries, segments. There is some discretion there. And then business process improvement is probably the most discretionary of all. If those four are about equal, I mean, technologies a little larger and a risk of consulting is a little smaller.
Speaker Change: We're more conservative with that sequential growth than we've been in years past [inaudible]
Speaker Change: But we still feel good, given the pipeline and adjusted for the slower conversion of pipeline time
Speaker Change: Vertivity Employees versus Contract Employees. So it had a disproportionate impact on profitability.
Joseph the opposite happens.
and that we actually convert more than...
the revenue improvement to the bottom line.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: But when we take a look at capital allocation, where does the dividends 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?
Speaker Change: And so we've had a long long long term commitment to return our excess cash flow to shareholders.
Speaker Change: 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.
Speaker Change: 2004 to raise that dividend. We just raised it last quarter and it would certainly be our intention not only to keep it but to keep increasing it.
Speaker Change: There are 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.
Speaker Change: for that reason. So no change in capital allocation strategy, still return all our cash flow to share excess cash flow to shareholders.
Speaker Change: Retain the dividend, and it just happens to be given where overall cash flow is, dividend is going to 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. [inaudible]
but no change in capital allocation strategy. [inaudible]
That's what I expected. Thanks a lot.
Speaker Change: And the next question will come from Andrew Steinerman with J.P. Morgan Thank you.
Andrew Steinerman: Hi Keith, I'd like to hear a little bit more about the efficiencies Robert Half is bringing to the administrative course structures in both talent solutions and productivity. You were very clear to say...
Andrew Steinerman: These course 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? Are the revenue roles going to be as enabled to hungrily go after orders with these efficiencies? [inaudible]
Andrew Steinerman: Well, you know, for two or three years we've had some pretty significant negative leverage on our administrative
Andrew Steinerman: Technology improvements and tools that we've implemented over the last few years that we could operate more efficiently.
Andrew Steinerman: The majority of the reductions were corporate services, and those reductions that happened in the field were more field management positions, not field cell support positions.
based on what we did principally at corporate services. [inaudible]
Okay, thank you, Keith.
Speaker Change: And the next question will come from Manav Patnaik with Barclays.
Speaker Change: You could be serious, but historically you've also said that you'd rather be a little bit late to cut costs So just curious on what you've heard directly from your clients and you've talked about how all economists are predicting different things with any change in behavior and the clients that come to you to take this action right now So let's move on to the next one.
that we were...
Speaker Change: Beginning to see improvements in that we talked about on the last call. We came out of the election. There was this surge in business competence, our discussions.
Speaker Change: and the tender of our discussions with our clients was improving. And so we were quite optimistic and our forecast for the first quarter assumed flatness with what we'd seen in the four.
Speaker Change: and that changed, those discussions changed as a result of the uncertainty and the trade policy uncertainty that I talked about already.
Speaker Change: But the fact that it had been a couple of years since we had adjusted a corporate overhead cost, we were continuing to see negative leverage given the
Speaker Change: Renewed economic uncertainty. It appeared that this was going to be with us longer than we had hoped. And so some combination of all those factors said, it was time for us to take cost actions, again, not impacting revenue producers.
Speaker Change: And then just a quick follow up, I know you did some M&A and Lisa and Clea just curious if you could help us with the contribution, even the quarter for the rest of the year.
And so, creativity acquired a small...
Speaker Change: Consulting firm in France that specializes in financial services, they have about 50 consultants so it's a very small transaction.
Speaker Change: But one we're excited about. It adds capabilities that we didn't otherwise have. They're in Paris.
Thank you.
Speaker Change: And the next question will come from Stephanie Moore with Jeffries.
Hi, excuse me. Hi, afternoon. Good afternoon. Thank you
Speaker Change: Maybe sticking with the topic of portivity here, can you talk a little bit about maybe the pipeline of projects or underlying demand environment that you're seeing within portivity if you've seen any cost any of your clients that may have pods to projects or delayed the start of projects just given this underlying uncertain environment thank you.
Pipeline is up, you're on here.
Speaker Change: 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
Speaker Change: But all of that's been factored in in the guidance we're giving for the second quarter. But yes, creativity has certainly been impacted somewhat by the macroeconomic uncertainty that's...
Speaker Change: Then exacerbated in the last few months, but that said they still managed to grow a year on year.
Speaker Change: Absolutely, that's helpful. And then one clarification on the two Q Outlook.
Speaker Change: I guess I'm trying to understand what the underlying perm demand environment is like, I think you kind of call that what it was in March and I think it looks like on a year or a year basis, it looks like it might have improved April versus March, maybe I'm misreading this, but is there something from a year over your 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 ? [inaudible]
Thanks.
Bye.
Speaker Change: It's just factual that for two or three weeks, I guess, in April for perm [inaudible]
It's stronger [inaudible]
Speaker Change: Much less predictive of full-quarter results than is the case in contract, but that said, we did begin the quirk in perm, more strongly than we did in contract, and that's a good thing.
Thank you. Thank you.
Speaker Change: And your next question will come from Kartik Mehta with North Coast Research.
Kartik Mehta: Good afternoon, Keith. This would be a odd question I would realize that, but you talk about the uncertainty in economy and I know
Kartik Mehta: You talked about when things turn, they could turn quickly and things like you know we get a new headline every day and so I'm wondering if things do turn quickly. Please.
Now how quickly could you ramp back up? [inaudible]
and...
Kartik Mehta: You know, how quickly would that impact margins? How do you see the business trending if something like that happens?
Kartik Mehta: Well, we think we could turn back up quickly, as I said earlier. We have not impacted our revenue producers with these cost actions. We've carried more revenue producers than the revenues would otherwise dictate.
Kartik Mehta: We've talked about 20% to 30% upside based on prior productivity levels. I would also say...
Kartik Mehta: We're seeing nice early traction from a technology standpoint where we use AI to direct our
Kartik Mehta: and so there we're seeing it takes fewer calls to get a client visit.
Kartik Mehta: And once you get a client visit, we get better conversion rates to job orders than we did previous technology.
Kartik Mehta: 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.
Kartik Mehta: And so 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 pin up demand. Job openings are still elevated. That's good for us.
Churn is very subdued as we speak.
just to illustrate that.
Kartik Mehta: I think people often forget that the jobs numbers that come out every month are net numbers.
There are hires, minus separations which are parked
Kartik Mehta: essentially quits. And so as an example in June of 2023, there were 257,000 jobs at it, but that was 6.5 million hires and 6.3 million separations.
who rolled the clock forward till last month. [inaudible]
Kartik Mehta: Here we had 228,000 net job openings, not that different from June of 2023 23
Kartik Mehta: But here we've got 5.5 million hires and 5.3 million separations meaning 1 million fewer hires, 1 million fewer separations on the same net jobs number. The point is that's a significant difference in churn.
Kartik Mehta: 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.
Kartik Mehta: And then Keith, I know you've talked about this in the past, but just-
One to get your perspective again. .
Kartik Mehta: Technology impacting the business, you know, whether it's LinkedIn or apps people are using to
Kartik Mehta: Find Help. You know, has that impacted your business, especially your small business customers?
Kartik Mehta: I would say the job boards and the aggregators have been around a long time, LinkedIn has been around a long time [inaudible]
Kartik Mehta: and changed the calculus in 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...
Kartik Mehta: Been there for long periods of time, and I don't think relatively speaking they're any more attractive than they were. We've gotten better, we've gotten better.
Thanks. Thank you very much.
George Tong: And the next question comes from George Tongue with Goldman Sachs
George Tong: Hi, thanks. Good afternoon. You mentioned client and job seeker caution is elongating decision cycles and some doing 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...
George Tong: If you remember last quarter, we said the first couple of weeks were holiday-impacted [inaudible]
George Tong: But then start, at least early February , the weeklies started to drift down.
George Tong: 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,
George Tong: The month of March and the first two weeks of April are essentially flat [inaudible]
George Tong: on a relative to the entire first quarter, that's about down one and a half percent.
George Tong: The guidance we gave was more conservative and assumes down 4% [inaudible]
George Tong: And so again, on a weekly basis flat for the most recent six weeks, so it's stabilized at a 1.5% lower level than we saw on average for the prior quarter.
Speaker Change: Got it. That's helpful. And then can you talk a little bit about how much of an impact 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…
Speaker Change: AI-driven tools today that impact accounting and finance, which is our major sector, I would say there's very, very little impact.
and the revenue impacts we've seen.
Arbacaza, Client Cautiousness,
Speaker Change: that leads to Les Hyering, that I just talked about, which in turn leads to candidate caution, which leads to fewer candidate quits.
Speaker Change: that I just talked about. So, less churn due to client and candidate caution and therefore cyclical factors, I think are...
Speaker Change: I'd say, further on this issue of displacement, and I'm sure you've heard this as well, there's this concept of Jevin's paradox.
Speaker Change: 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.
Speaker Change: and so I think in the terms of AI, offsetting the apparent impact, there will be displacement, will be the potential impact, there will be more usage because the unit costs are less.
I look at our own internal IT projects and if-
Modified Develop Software for Robert Half. My guess is...
Speaker Change: I might use more rather than less because it's less costly to do. So I think there's some credibility to Jevin's Paradox.
E 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.
Speaker Change: Great, thanks so much. I just wanted to put that on one thing on the restructuring. I just want to make sure it's right.
Speaker Change: I thought you said there was 19 cents in a Q1 and... [inaudible]
Speaker Change: He took another charge and was it equal for a productivity, or was all of that the first quarter or was there a Q2 charge for productivity and the Q2 guidance? It's all in the first quarter.
Speaker Change: It's all in the first court. It just happened a few weeks apart.
Speaker Change: Got it. Okay, so it was all in one and you think about that. So we accrued all the opportunity did in April for the first quarter.
Speaker Change: Got it, got it. And that 17th century, how much of it is core versus productivity? Is there any way to think about that?
Nine million.
Speaker Change: and then the resulting savings are $80 million and it was $42.5 and $37.5 between the two.
And then $80 million, $80 million is about $0.54 a share, savings.
Speaker Change: And is that a note that's annual? Do you start to see that in the second half of this year or any sense how that 80 million comes in? We see and so divide it by four, that's 20 million in a quarter.
Speaker Change: We'll see 18 of that in the second quarter, and then we'll see 20 of that in...
Speaker Change: quarters three and four. So it'll happen right away, but for the peace and creativity that happened pre-April, mid-April.
Speaker Change: So, 18 million savings in Q2 and 20 million savings in Q3 and 4 from the cost actions.
which is about ...
How much crossings in that circle? It includes the 18.
Speaker Change: The 36 to 46 are the 41 at midpoint, includes the 18 million in savings [inaudible]
Got that. Okay.
Speaker Change: So without that 18 million it would have been obviously that much lower, the EPS.
Speaker Change: That's right, but I mean, 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.
Speaker Change: Yeah, no, I get it. And if you further, if you pro-form an a full quarters benefit of fertility, fertility margins return, essentially, to what they were a year ago.
Chris, to the 18 million, if you were to,
Speaker Change: Was that tax to the regular rate? I'm just trying to figure out what the benefit of it. Well, the tax provision is a little wonky, but if you take the 18 million and you tax-affected
Speaker Change: I get 12 pennies and I'm looking at the team here. 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 a 12 penny.
Speaker Change: to use 12-cent benefit. Thank you, too, for the restructuring. It is very helpful. Thank you.
Thank you very much.
and next is Jeff Silver with BMO Capital Markets.
Speaker Change: Hey, thank you. This was Ryan on for Jeff. I was just wondering if you have any comments on the competitive environment, was wondering how you're bearing compared to Big 4 on
Speaker Change: 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
Speaker Change: on the talent solution side, most of our competitors are local and regional and we haven't seen much change in that.
Speaker Change: throughout this period of client-cannot, cautious this is, which we're now going on for almost three years. So I would argue not much change in the competitive environment.
Speaker Change: and if anything, more rational, particularly as it relates to the Big Four, then it had been.
George, thank you.
Speaker Change: And our next question is from Trevor Romeo with William Blair . .
Trevor Romeo: Hi, thank you for taking the questions. Just a couple quick ones, I guess, on the talent solutions business. One was just kind of...
Trevor Romeo: You know, wanted to ask about I guess how the mix is evolving between high skill and more sort of operational roles right now. Are you still seeing?
Trevor Romeo: I got relative resilience in the higher skilled roles, and then there's a relates to the F-tap, so the full-time engagement professionals, anything you'd call it in terms of demand or interest in those arrangements.
Trevor Romeo: 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.
Trevor Romeo: to software and applications positions. There's a meaningful bill rate difference.
Trevor Romeo: You'll note on the bill rate side, we went from the plus three's to the low plus four's of this quarter year on your bill rate increases. Much of that is this skill mix impact particularly as it relates to technology. [inaudible]
Trevor Romeo: on the F-tap side, the issue with F-tap because we pay them full benefits, the cost per hour for those people is much higher.
Trevor Romeo: then is for our core contractors and that higher price has put some pressure on the volumes in that business.
Trevor Romeo: but particularly returning to how well will we participate in the upside.
Trevor Romeo: F-Tap becomes a big part of the upside. Clients will be more willing to pay those prices 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 a length of assignment, that's good for everything.
Speaker Change: Could you please remind us how big a portion of your mix are the assets at this point?
Speaker Change: Okay, thank you. That's helpful. And just one quick one on the international business. It just looks like the town solutions, the trend got a little bit worse in the first quarter. Could you just talk through kind of what you're seeing in Europe or any other countries?
Well, I guess I would argue that.
Speaker Change: 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.
Speaker Change: and so as an example a year ago in U.S. we were down 19% and a year ago IZ we were down 10%
and so clearly, Iz has a tougher comp. [inaudible]
Speaker Change: and that same differential plays out and you look at this quarter versus a year ago. So I would argue that that's more about comps and I would further say that...
Speaker Change: He certainly 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.
Speaker Change: that's slated to happen, particularly in Germany, and so we are already aggressively and proactively positioning ourselves for that.
Speaker Change: So our people in Europe and particularly our people in Germany are 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.
Speaker Change: 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 in to the conference call replay. Dial in details in the confirmation code are contained in the company's press release issued earlier today.