Specialized talent solutions company Robert Half (NYSE: RHI) met Wall Street’s revenue expectations in Q1 CY2026, but sales fell by 3.8% year on year to $1.3 billion. Its GAAP profit of $0.14 per share was 8.8% above analysts’ consensus estimates.

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Company Overview

With roots dating back to 1948 as the first specialized recruiting firm for accounting and finance professionals, Robert Half (NYSE: RHI) provides specialized talent solutions and business consulting services, connecting skilled professionals with companies across various fields.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $5.33 billion in revenue over the past 12 months, Robert Half is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when you’ve penetrated most of the market. For Robert Half to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.

As you can see below, Robert Half’s sales grew at a sluggish 1.3% compounded annual growth rate over the last five years. This shows it failed to generate demand in any major way and is a rough starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Robert Half’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 6.9% annually.

This quarter, Robert Half reported a rather uninspiring 3.8% year-on-year revenue decline to $1.3 billion of revenue, in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 1.6% over the next 12 months. Although this projection suggests its newer products and services will spur better top-line performance, it is still below average for the sector.

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Adjusted Operating Margin

Adjusted operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. It also removes various one-time costs to paint a better picture of normalized profits.

Robert Half was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 8.6% was weak for a business services business.

Looking at the trend in its profitability, Robert Half’s adjusted operating margin decreased by 9.5 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Robert Half’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, Robert Half generated an adjusted operating margin profit margin of 2.8%, up 1.5 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Robert Half, its EPS declined by 14.9% annually over the last five years while its revenue grew by 1.3%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into Robert Half’s earnings to better understand the drivers of its performance. As we mentioned earlier, Robert Half’s adjusted operating margin expanded this quarter but declined by 9.5 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Robert Half, its two-year annual EPS declines of 37.8% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q1, Robert Half reported EPS of $0.14, down from $0.17 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 8.8%. Over the next 12 months, Wall Street expects Robert Half’s full-year EPS of $1.30 to grow 28.9%.

Key Takeaways from Robert Half’s Q1 Results

It was good to see Robert Half beat analysts’ EPS expectations this quarter. On the other hand, its revenue was in line. Overall, we think this was a solid quarter with some key areas of upside. Investors were likely hoping for more, and shares traded down 1.9% to $26.65 immediately following the results.

Is Robert Half an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).