Third-quarter revenue at Robert Half International Inc. (NYSE: RHI) fell 23.3% year over year, and gross margin narrowed. The decline in revenue was 23.9% when adjusted for currencies and billing days. Revenue declines occurred across business segments except for Protiviti where revenue rose 7.4%.
The company did note an improving trend with temporary and consultant staffing revenue: For September alone, it was down 29.3% adjusted for currencies and billing days compared to 30.7% for the full quarter. Improvement continued in the first two weeks of October with revenue down 27% on an adjusted basis.
CEO M. Keith Waddell noted sequential gains in prepared comments and struck a positive note in a conference call with analysts.
“While uncertainty remains in the overall economic environment as the pandemic continues, there is much to be optimistic about,” Waddell said. “As the fourth quarter progresses, the nature, timing and amount of any additional fiscal stimulus should be known. Medical solutions to the Covid-19 virus move ever closer to reality, and the NFIB continues to report improving trends in the small business community.”
| (US$ thousands) | Q3 2020 | Q3 2019 | % change |
| Service revenue | $1,189,897 | $1,552,132 | -23.3% |
| Gross margin | $467,346 | $646,278 | -27.7% |
| Gross margin percentage | 39.3% | 41.6% | |
| Net income | $75,749 | $117,181 | -35.4% |
Overall temporary staffing and consulting third-quarter revenue fell 30.7% year over year adjusted for currencies, billing days and intersegment revenue to $781.4 million while perm placement revenue fell 35.7% to $87.2 million.
Revenue by segment
| (US$ thousands) | Q3 2020 | Q3 2019 | % change | % change adjusted* |
| Accountemps | $351,598 | $501,905 | -29.9% | -30.2% |
| OfficeTeam | $173,685 | $267,023 | -35.0% | -35.8% |
| Robert Half Technology | $161,007 | $195,630 | -17.7% | -18.2% |
| Robert Half Management Resources | $154,917 | $200,421 | -22.7% | -23.5% |
| Elimination of intersegment revenue | -$59,816 | -$46,518 | – | – |
| Protiviti | $321,303 | $299,089 | 7.4% | 6.4% |
*Adjusted for effect of currencies, billing days and intersegment revenue.
Guidance
Robert Half International forecast fourth-quarter revenue will be down 22% at the midpoint of guidance on an adjusted basis for currencies and billing days. Staffing revenue is forecast to be down 27% to 30% while Protiviti revenue is forecast to be up 5% to 7%.
Share price and market cap
Shares in Robert Half were down 7.32% to $52.20 as of 12:09 p.m. Eastern time; they were 18.24% below their 52-week high. The company had a market cap of $6.46 billion.