Robert Half CEO Says Bank Fines Are Pulling Protiviti Back To Growth
Anti-money-laundering remediation for big lenders is the main reason Protiviti expects revenue growth in the fourth quarter, management said.
Robert Half CEO Keith Waddell said on the company's third-quarter earnings call that a wave of regulatory enforcement against large banks is the biggest change pushing its Protiviti consulting arm back toward growth, after $483 million of third-quarter revenue that was down 3% on an adjusted basis.
Fines put banks on notice
Robert Half, which provides contract talent and permanent placement staffing and, through Protiviti, consulting on compliance, risk and internal audit, has a market value of $3.5 billion (market data).
Asked by a JPMorgan analyst whether something had changed in anti-money-laundering demand, Waddell said yes. Over the last 90 days, he said, "Treasury Department regulators imposed significant fines and major enforcement actions against multiple large financial institutions," mostly tied to earlier consent orders where remediation was found deficient.
The actions require look-backs and far more transaction and file review, he said, and often bring in outside consultants. Protiviti does business with "over 80% of the largest financial institutions globally," and much of the work is staffed by contractors sourced through Robert Half's Talent Solutions arm. "It's a win for everybody," he said, in effect; the transcript has him saying "it's a win for everybody."
Work with "legs" beyond one quarter
A BMO Capital Markets analyst asked whether the projects might roll off in the first quarter. Waddell said they are expected to last "a lot longer than one quarter," and at a minimum to have "multiple quarter legs," noting that Protiviti has had remediation projects that lasted years. He cautioned that duration depends on the client.
Asked about one-time effects, he said the fourth-quarter outlook already includes the added demand, "but it's not a one-off." He added that the big anti-money-laundering projects are the most contractor-heavy Protiviti work, which he called a competitive advantage.
CFO Michael Buckley guided fourth-quarter Protiviti revenue growth of flat to up 4%. Midpoint revenue guidance implies 2% growth for Protiviti and 3% for Talent Solutions, and company revenue of $1.285 billion to $1.385 billion, with earnings per share of $0.36 to $0.46.
Margins flat, costs lower
Protiviti's adjusted operating income was $37 million, or 7.7% of revenue, against $37 million, or 7.5%, a year earlier. Waddell credited cost cuts taken last quarter; asked by a UBS analyst, he recalled about $11 million a quarter in payroll savings that also benefit the fourth quarter.
Company-wide, third-quarter revenue was $1.359 billion, roughly flat on an adjusted basis. Talent Solutions revenue rose 2%, its first year-over-year adjusted growth since 2022. Earnings per share were 49 cents, up 14% from 43 cents.
Buckley said Protiviti margins typically fall by mid-single-digit percentage points in the first quarter, as internal audit work gives way to external audits and annual pay raises take effect.
Waddell said the company expects Protiviti to return to year-over-year revenue growth in the fourth quarter.
Sources
- Robert Half Inc. (RHI) Stock Price, News, Quote & History - Yahoo Finance — Yahoo Finance
- Robert Half (RHI) To Report Earnings Tomorrow: Here Is What To Expect — Yahoo Finance
- Robert Half Q3 2026 Earnings Call Transcript — benzinga.com
- Robert Half Sees Q4 GAAP EPS 0.46 vs $... — benzinga.com
- Robert Half: Q3 Earnings Snapshot | wusa9.com — Associated Press
