Why did RHI's operating profit drop sharply in Q4 2024?

Robert Half International's (RHI) operating profit dropped sharply in Q4 2024 due to a combination of factors: 1. **Revenue Decline**: The company's total revenue for the quarter was $1.38 billion. This represents a decrease from the previous year, with revenues from Talent Solutions and Protiviti showing different trends. While Protiviti's revenues increased by 5% year-over-year, reaching $511 million, Talent Solutions' revenues decreased by 13% year-over-year, with U.S. Talent Solutions revenues down 13% and Non-U.S. Talent Solutions revenues declining 13%. This decline in revenue, particularly from Talent Solutions, contributed to the overall decrease in operating profit. 2. **Gross Profit Margin Compression**: Robert Half's adjusted gross profit margin declined by 140 basis points year-over-year, decreasing to 39.4% in Q4 2024. This compression in gross profit margin, likely due to an unfavorable sale mix and increased costs, further contributed to the drop in operating profit. In summary, RHI's operating profit drop in Q4 2024 was primarily due to a decline in revenue, especially from Talent Solutions, and a compression in gross profit margin.