Please stand by. Hello, and welcome to the Robert Half second quarter 2024 conference call. 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 and one on your telephone keypad. Our hosts for today's call are Mr. Keith Waddell, President and Chief Executive Officer of Robert Half, and Mr. Michael Buckley, Chief Financial Officer. Mr. Waddell, you may begin. Hi, 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. 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 forward-looking statements. These risks and uncertainties are described in today's press release and in our most recent 10-K and 10-Q filed with the SEC. We assume no obligation to update the statements made on today's call. During this presentation, we may mention some non-GAAP financial measures and reference these figures as, "as adjusted." Reconciliations and further explanations of these measures are included in a supplemental schedule to our earnings press release. For your convenience, our prepared remarks for today's call are available on the investor center of our website, roberthalf.com. For the second quarter of 2024, company-wide revenues were $1.473 billion, down 10% from last year's second quarter on both a reported and as adjusted basis. Net income per share in the second quarter was $0.66, compared to $1 in the second quarter a year ago. Client and candidate caution continues to impact hiring activity and new project starts as macroeconomic and interest rate uncertainty persist. Second quarter revenues and earnings were within our guidance range. Protiviti posted strong results, led by U.S. growth in revenues and segment income, both on a sequential and year-on-year basis. We remain confident in our ability to navigate the current climate and optimistic about our growth prospects, built on our industry-leading brand, people, technology, and unique business model that includes both professional staffing and business consulting services. Cash flow from operations during the quarter was $142 million. In June, we distributed a $0.53 per share cash dividend to our shareholders of record for a total cash outlay of $55 million. Our per share dividend has grown 11.5% annually since inception in 2004. The June 2024 dividend was 10.4% higher than the prior year. We also acquired 900,000 Robert Half shares during the quarter for $60 million. We have 9.1 million shares available for repurchase under our board-approved stock repurchase plan. Return on invested capital for the company was 18% in the second quarter. Now, I'll turn the call over to our CFO, Mike Buckley. Thanks, Keith, and hello, everyone. As Keith noted, global revenues were $1.473 billion in the second quarter. On an as adjusted basis, second quarter Talent Solutions revenues were down 14% year-over-year. U.S. Talent Solutions revenues were $701 million, down 15% from the prior year's second quarter. Non-U.S. Talent Solutions revenues were $235 million, down 10% year-over-year. We conduct Talent Solutions operations through offices in the United States and 17 foreign countries. In the second quarter, there were 63.5 billing days, compared to 63.3 billing days in the same quarter one year ago. The third quarter of 2024 had 64.1 billing days, compared to 63.1 billing days during the third quarter of 2023. Currency exchange rate fluctuations during the second quarter had the effect of decreasing reported year-over-year total revenues by $6 million, $5 million for Talent Solutions and $1 million for Protiviti. Contract Talent Solutions bill rates for the second quarter increased 3.1% compared to one year ago, adjusted for changes in the mix of revenues by functional specialization, currency, and country. This rate for the first quarter was also 3.1%. Now, let's take a closer look at results for Protiviti. Global revenues in the second quarter were $487 million. $399 million of that is from the United States, and $88 million is from outside the United States. On an as adjusted basis, global second quarter Protiviti revenues were down 1% versus the one year ago period. U.S. Protiviti revenues were up 3%, while non-U.S. Protiviti revenues were down 16%. Protiviti and its independently owned member firms serve clients through locations in the United States and 29 foreign countries.... Turning now to gross margin. In Contract Talent Solutions, second quarter gross margin was 39.3% of applicable revenues versus 39.9% in the second quarter one year ago. Conversion revenues or contract to hire were 3.4% of revenues in the quarter, compared to 3.7% of revenues in the quarter one year ago. Our permanent placement revenues in the second quarter were 13.3% of consolidated Talent Solutions revenues, versus 13% in the same quarter one year ago. When combined with Contract Talent Solutions gross margin, overall gross margin for Talent Solutions was 47.4%, compared to 47.7% of applicable revenues in the second quarter of last year. For Protiviti, gross margin was 22.5% of Protiviti revenues, compared to 22.9% of Protiviti revenues one year ago. Adjusted for the amount of deferred compensation that is completely offset by investment income related to employee deferred compensation trusts, or the deferred compensation investment income offset, gross margin for Protiviti was 23.2% for the quarter just ended, compared to 24% last year. Moving on to selling general and administrative costs. Enterprise SG&A costs were 34% of global revenues in the second quarter, compared to 33.1% in the same quarter one year ago. Adjusted for the deferred compensation investment income offset, enterprise SG&A costs were 33.2% for the quarter just ended, compared to 31.6% last year. Talent Solutions SG&A costs were 43.1% of Talent Solutions revenues in the second quarter, versus 40.7% in the second quarter of 2023. Adjusted for the deferred compensation investment income offset, Talent Solutions SG&A costs were 41.9% for the quarter just ended, compared to 38.7% last year. Second quarter SG&A costs for Protiviti were 15.6% of Protiviti revenues, compared to 15.1% of revenues for the same quarter last year. Operating income for the quarter was $76 million, adjusted for the deferred compensation investment income offset. Combined segment income was $92 million in the second quarter. Combined segment margin was 6.2%. Second quarter segment income from our Talent Solutions divisions was $55 million, with a segment margin of 5.5%. Segment income for Protiviti in the second quarter was $37 million, with a segment margin of 7.7%. Our second quarter 2024 income statement includes $16 million as income from investments held in employee deferred compensation trust. This is completely offset by an equal amount of additional employee deferred compensation costs, which are reflected in SG&A expenses and direct costs. As such, it has no effect on reported net income. Our second quarter tax rate was 29%, compared to 30% one year ago. At the end of the second quarter, accounts receivable were $893 million, and implied days sales outstanding, or DSO, was 54.6 days. Before we move to third quarter guidance, let's review some of the monthly revenue trends we saw in the second quarter and so far in July, all adjusted for currency and billing days. Contract Talent Solutions exited the second quarter with June revenues down 13% versus the prior year, compared to a 14% decrease for the full quarter. Revenues for the first two weeks of July were down 14% compared to the same period last year. Permanent Placement revenues in June were down 3% versus June of 2023. This compares to a 12% decrease for the full quarter. For the first three weeks of July, Permanent Placement revenues were down 17% compared to the same period in 2023. We provide this information so you have insight into some of the trends we saw during the second quarter and into July. But as you know, these are very brief time periods. We caution against reading too much into them. With that in mind, we offer the following third quarter guidance. Revenues, $1.39 billion-$1.49 billion. Income per share, $0.53-$0.67. Our Q3 EPS estimate includes a restructuring charge of $0.08 per share, per share related to Protiviti International. This includes $5.7 million charged to SG&A and income tax charges of $2.5 million. We will provide additional information on this in a moment. Midpoint revenues of $1.44 billion are 9% lower than the same period in 2023 on an as adjusted basis. The major financial assumptions underlying the midpoint for these estimates are as follows: Revenue growth year-over-year as adjusted for Talent Solutions down 12%-16%. Activity down 1% - 2%. Overall, down 7% -1 1%. Contract margin percentage for Contract Talent, 38%-41%. Protiviti, as adjusted for the deferred compensation investment income offset, 24%-26%. Overall, 39%-41%. SG&A, as a percentage of revenues, adjusted for deferred compensation investment income offset for Talent Solutions, 41%-43%. Protiviti, 16%-18%. Overall, 33%-35%. Segment income for Talent Solutions, 4%-6%. Protiviti, 7%-9%. Overall, 5%-7%. Tax rate, 31%-33%. Shares, 102 million-103 million. 2024 capital expenditures and capitalized cloud computing costs, $80 million-$100 million, with $25 million-$35 million in the third quarter. 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. So we're told the sound is a little scratchy. We're going to switch lines, so give us just one second. Okay, we're on the backup line. Justin? You are. Go ahead, please. Okay. Thank you, Mike. Client budgets remain constrained and candidates are reluctant to change jobs. This subdues short-term demand and elongate sales cycles. However, job openings are well above historical highs and indicative of pent-up future demand. As business confidence improves, hiring urgency returns, project demand accelerates, deferred backlogs and growth initiatives are reprioritized, and labor churn normalizes. This puts pressure on client resources that are often already stretched and creates hiring and consulting demand that traditionally leads to very strong gains for us in the early part of growth cycles. While progress on inflation and economic momentum stalled during the first quarter of this year, positive trends reemerged in the second quarter, which should be more conducive for higher business confidence levels and overall sentiment going forward. We continue to invest in technology and innovation to fuel our core business, which combines the skills, judgment, and expertise of our specialized talent solution professionals with world-class AI tools that leverage our proprietary data assets. We recently upgraded the Candidate Discovery experience on our website to transparently display the ratings of our recruiters for all AI-matched candidates we previously placed or interacted with. This is an industry first that tangibly demonstrates the benefits of our combined Recruiters plus AI strategy, which our clients highly value. We're very pleased with Protiviti's results for the quarter, based on broad strength in each of its solution areas. Gross margin and segment income both exceeded expectations, growing more than 250 basis points sequentially. Additional improvement is expected in the third quarter, the result of continued revenue strength, combined with close control over resource costs and staff utilization rates. Protiviti's prospects and pipeline remain very strong, a testament to its ability to increasingly gain share in a competitive consulting market. As noted previously, during the third quarter, Protiviti will transition its Mainland China operations to an independently owned member firm to optimize local revenue opportunities, including state-owned enterprises. This will result in a restructuring charge of $0.08 per share. We've weathered many economic cycles in the past, each time emerging to achieve higher peaks. Aging workforce demographics and clients' desire for flexible resources and variable costs are expected to benefit us for years to come. With our current business portfolio of talent solutions and consulting, we're even more confident about our future as macro confidence returns. We'll continue to invest in our people, our technology, our brand, and our business model to strengthen our ability to connect candidates to meaningful work and provide clients with the talent and subject matter expertise they need to confidently compete and grow. Finally, we'd like to thank our employees across the globe, whose commitment to success made possible a number of new accolades. Robert Half again ranked number one on Forbes' list of America's Best Professional Recruiting Firms, and our People First culture was reflected in our selection as one of Fortune's Best Workplaces for Millennials, Forbes Best Employers for Diversity, and just yesterday, Forbes Best Employers for Women. Now, Mike and I'd be happy to answer your questions. Please ask us one question and a single follow-up. If there's time, we'll come back to you for additional questions. Thank you. If you would like to signal with questions, please press star one on your touchtone telephone. If you would like to withdraw your question, please press star two on your touchtone telephone. If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that is star one if you would like to signal with questions, star one. Your first question comes from a line of Mark Marcon with Baird. Good afternoon, Keith and Mike. We know that, you know, job openings continue to be elevated, but obviously, the trends when we take a look at, you know, temp or perm, continue to be relatively soft. So one thing that a lot of investors are asking about is, you know, to what extent do we think, you know, it's not just macro concerns, but potentially, you know, that some companies ended up over-hiring, you know, during the snap back from COVID, and in the midst of the Great Resignation. Once everything froze, they basically ended up with, you know, too high of a permanent staffing level. But we're concerned about, like, it's so difficult to hire quality people that they're just holding on to them, and that they're, in certain cases, just overstaffed and therefore hesitant to basically using temps as their pathway to flexibility. I'm wondering, you know, this is a subjective question, but how much do you think that's the dynamic that's at play relative to macro concerns? And if that is a big part of it, how long do you think it might take us to kind of go through that before we start seeing a bit of a pickup? Well, Mark, I would say, you know, early post-COVID, those were certainly factors, but we're now eight quarters into down sequential quarters, such that to a large extent, that's played out. We're clearly seeing signs of project deferrals. There's no question that clients are using the lever of variable cost, which they get by using contractors. But again, we're eight quarters into that. One of our people on our pre-earnings call made an interesting comment. They said, "It feels like using a retail analogy, our clients have done due diligence, they've put something in their shopping cart, but they just won't hit the submit button." Indicative of there's deferred demand as we speak. And so there's no question that the accelerated hiring that did early post-COVID had an impact. But as I've said, we're eight quarters into this. In fact, the longest period of sequential down quarters we've had was 10, and that relates all the way back to the dot-com period. So we've been at this a while. Contractors, industry-wide, temps, if you will, are down and have been down. Feels to us like, particularly given if you looked at second half of 2023, inflation was coming down, a lot of talk of interest rate cuts. If you looked at our sequential performance, the first couple, three quarters of 2023, we were down mid-single digits. On the prospect of rate cuts, less inflation, the fourth quarter, the first quarter, those sequential declines improved to down low single digits. This quarter, given the stalling of the progress on inflation, on the fewer interest rate cuts, we've moved back to mid-single digits. Again, this is down sequentially. Our guidance for Q3 is that we stay in that down mid-single, mid-single digits sequentially. But we're optimistic, given how our business reacted to what happened second half of last year, and as we see progress in inflation as we speak and more talk of rate cuts, we're cautiously optimistic that with a bit of a lag, we will see improvement in our numbers. But the overhang of over-hiring to the extent it existed, it existed early in the last eight quarters, and it's pretty much plagued its way out as we speak. That's great color, Keith. Thanks. And I agree with you. The other question is just on Protiviti within the U.S., you know, really nice improvement. And what I'm wondering is, you know, can you talk a little bit about the areas that you saw additional strength there? And when you gave us the guidance for Protiviti in terms of the quarter, but how much of that is China? What's the amount that we're stripping out? So the good news is on Protiviti U.S., the solution strength was very balanced across its four major solution areas: technology consulting, internal audit, business process improvement, and regulatory risk and compliance. Very broad-based. Every one of them grew sequentially, which we're very pleased by. As to the impact of China, it was small, annual revenues, less than $10 million. And so while there's an EPS impact of the conversion from owned to member firm, the revenue impact is quite small. And I'd say this as well, for what's left that we have in China, which is principally Hong Kong, it's just under 1% of revenues. Great. Thank you. The next question will come from Andrew Steinerman with JPMorgan. Hey, Keith, could you give a little more color on the consulting market? I mean, kind of the, the peer market that Protiviti plays in. I know you used the word, competitive, and I know you used the word gaining share for Protiviti, but do you feel like the consulting market might be, you know, bottoming out here? Like, what do you feel like bench utilization is at, you know, firms like Accenture and Big 4? And, you know, how does, Protiviti's utilization of its full-time staff look right now? Well, I'd say the consulting market does remain competitive, particularly on a market-by-market basis. Some firms have excess capacity. They get particularly aggressive with pricing. That's not new. That impacted this quarter, but Protiviti's managed through that quite well, in large part, by how they've managed their own utilization, including the judicious use of contractors through Talent Solutions. So Protiviti has, you know, it was close to year-on-year growth in Q2. With a little luck, globally, it will have year-on-year growth in Q3. We feel great about Protiviti. Their pipeline is strong, and that's balanced across solutions strength. They're very focused on market-facing activities, starting by staying close to their current clients, understanding their business problems, making sure our capabilities are top of mind. They've kept their conference sponsorships high. They do webinars, local events. They go to market aggressively, jointly with Talent Solutions. So we're very pleased with how Protiviti is performing, particularly in this very competitive consulting marketplace, and I don't think anybody would argue that they're gaining share. Sure thing. Thanks so much, Keith. The next question will come from Manav Patnaik with Barclays. Hi, Keith, this is Princy Thomas on for Manav. Thanks for taking my call. Question about demand expectations that you mentioned. Can you talk about how you've been managing your recruiter levels? And then also separately, on your recent conversations with clients, have you noticed any changes with their hiring for the remainder of the year, seeing the same levels of labor hoarding? Well, I had a little trouble hearing you, but based on what I think I heard, you ask about our own internal recruiter levels, as well as conversation with clients about their levels of resource needs. As to our own internal recruiters, our policy hasn't changed. On the one hand, we have a performance management approach by person as to how we manage headcount and those that underperform, we counsel that they'd be better with their career somewhere else, just like we always have. By the same token, proven performers, while their productivity might be down somewhat, given market conditions, we're committed to keeping them, to having that capacity or dry powder as things get better. We've certainly estimated internally that we could grow revenue somewhere 20%-30%+, without adding to heads. But that's all subject to how V-shaped a recovery we see and how much additional capacity we feel like we need at the time, but that's a high-class problem to have... As to conversations with clients about their needs, as I talked before, we definitely see deferred project demand. The point we were trying to make in the prepared remarks was, today's subdued demand is tomorrow's source of demand, and that as projects are deferred, everybody talks about that. Most companies today focus only on those projects with a short-term ROI. There are many other projects, growth-related, including, that are getting deferred. That's future demand. Churn is subdued as we speak. That impacts backfill demand. Again, so as candidates' confidence improves, there will be more churn. You get backfill demand from that, plus that impacts client capacity to deal with improvements they see in their business. So there's a deferred impact, there's a pushed forward demand impact of current constrained conditions that we've seen many times through many cycles. We're one of the few management teams in the industry that's been through several of these cycles, and much of the softness in demand that we see, and the impacts on churn that we see, are not unusual, and they turn around, which is why we, and frankly, the entire industry, typically does very well in the early part of growth cycles. So we believe there's deferred demand. The job openings is a good backdrop to all of that, but down at the individual client level, individual conversation level, there's no question that projects are being deferred and that there's less turnover, less attrition, less churn that also impacts demand for our contract labor resources as well as everybody else's in the industry. Thanks. Appreciate color. Thank you. Our next question will come from Heather Balsky with Bank of America. Hi, thank you for taking my question. Keith, just amidst the backdrop that you're talking about, how are you thinking about the cost side of your business? I know you've given us update every quarter, but just, you know, given the ongoing malaise, you know, are you thinking about making any changes, and how are you keeping in mind, sort of, positioning yourself for when there is a recovery? Thanks. Well, you broke up on the last part, but the first part was how do we see the cost side of our business? Our largest cost is our, our headcount, our staff, payroll cost. And as I said, we haven't changed our policy. For those underperforming, we performance manage, as we always had. For those that have a medium to long-term track record of success, we're committed to them, even though their productivity levels aren't what they are in normal, periods during a cycle. So cost side management, not that different. You know, having said that, for the quarter just ended, our SG&A was down $32 million versus a year ago. That's a 7% reduction, although there is a negative leverage, particularly for our fixed cost, our, our corporate services, headquarters, the administrative compensation of our branches. So we have some negative leverage, but we have reduced our SG&A year-over-year for the quarter, $32 million. Thanks. And Keith, where I got cut off, I guess I was asking about thinking about the recovery and where you are from a staffing perspective. If we see an inflection in the nearer term, are you where you would like to be from a staffing perspective? We feel good about where we are with our veteran productive staff. We just talked about we think we could grow 20%-30%+, without adding to heads, but that would be subject to an evaluation of just how robust the recovery was being, and we may wanna add some sooner, but if we did, it would be for all the right reasons. Got it. Thank you very much. Moving on to Jeff Silber with BMO Capital Markets. Thanks so much. For my first question, I'd like to focus on margins, specifically Contract Talent Solutions margins. I know you don't guide to that specific number, but at least, you know, compared to our estimates, is a bit lower than we thought. Was there anything specifically going on there this quarter, timing issues, et cetera? Should we expect that number to at least increase sequentially going into the third quarter? Thanks. You know, Jeff, I would say, two components. On the one hand, if we're talking year-on-year, our gross margins were down about 60 basis points. A little over half of that's due to conversions, which is a derivative of full-time hiring or permanent placement, not a surprise. And the other piece of that was essentially payroll fringes, payroll taxes, insurance, et cetera, a bunch of little pieces there, none of which individually was that large. And the other piece of the margin contraction is the negative leverage on fixed SG&A costs, which I just, just addressed by saying we're committed to holding the line on our, medium to long-term proven internal recruiters. Plus, you've got your fixed costs that you have negative leverage on as the revenues fall a bit sequentially. As I said, for guidance purposes, on the contract talent side, we're assuming mid-single digit down sequentially, which is kind of what we were seeing, you know, first half of 2023. Our hope is that given recent progress in inflation, hope for interest rate cuts that come fourth quarter and beyond, we'll see better sequential performance than that. Okay, that's helpful. If I could switch back up to the revenue line. On the Administrative and Customer Support segment, I know you don't talk about this much, I know it's relatively small, but sometimes historically, the trends there have been leading indicators, and we took a slight step back in the second quarter. The year-over-year decline got slightly worse. Was there anything specifically going on there? Again, is it a one-time issue? What should we expect going forward? Thanks. Well, I'd say most of our practice groups, as we refer to them, internally, the near-term results were pretty similar, and the year-on-year results that you mentioned are more about the comparables a year ago than they are what's happening right now. And on this, kind of, what leads potentially, one thing we look at is enterprise versus small business. Excuse me. And we would observe that for the last two or three quarters, we see some firming in enterprise clients. We call them strategic accounts. Protiviti also focuses on enterprise-sized accounts, and so internally, we're somewhat encouraged by we're seeing more strength at the enterprise level. That generally, not always, but generally leads SMB to a bit. So if we're looking for kind of small green shoots of optimism, we would point to enterprises doing better than SMB, both in Talent Solutions and clearly in Protiviti. In the past, that generally leads SMB by a little. Okay. That's really helpful. Thanks so much, Keith. The next question will come from Kartik Mehta with Northcoast Research. Good afternoon. I wanted to go back a little bit to what you were saying about pricing competition and Protiviti. I'm wondering, I know this is very short term, but has that gotten worse since the last quarter, or are you seeing about the same level of price competition you saw at the beginning of the year? It's same-ish. You know, it's not a national thing, it's a local thing, and depending on a local office's resource levels and utilization levels, a given, you know, Big 4 accounting firm might get super aggressive because of its low utilization levels in that location, but it's not a nationwide thing. And so Protiviti's been seeing that type of pricing competition for several quarters now. It continued into the second. It's expected to continue into a third, but it's something that they're managing through, and they're managing through. It's a component of gross margin for which they improved 250 basis points in the quarter. It's a component, but the other components are kind of the shape of the leverage pyramid, managing directors at the top end, variable cost contractors at the bottom. So they've been aggressively managing that mix. They've been aggressively managing the utilization of their full-time employees. And so when you put that piece together, it's particularly impressive, I think, that they're making the sequential progress that they're making, notwithstanding the revenue, the bill rate competition that they're seeing for the reasons you mentioned. And then just, you know, you've talked about, kind of keeping your good employees, and I'm wondering what the retention rate has been, and you've been successful, if you've been successful. I imagine, you know, you're going through the same stuff that every other company is, where people are less likely to leave. But I'm just wondering, if you've retained the right employees that you want or if there's been any kind of movement because of what's happening in the industry? I'd say, generally speaking, virtually every company, certainly in the United States, is seeing lower attrition rates because the higher compensation opportunity to switch isn't what it was. I'd also say that I don't think anybody would dispute that Robert Half has more tenure amongst its top 250 people, not just 5, of anybody in the industry. Our retention rates have always been the strongest in that regard, and they continue. But for economic reasons, virtually everybody's retention rate is better now than it typically is, ours included. But my point is, our long-term retention rates are the best in the industry, and that continues, and it's a big part of our success. Thank you very much. I appreciate it. The next question will come from Stephanie Moore with Jefferies. Hello, this is Harold Antor on for Stephanie Moore. Just wanted to touch on Talent Solutions within our Finance and Accounting. So I know at one point in time you said, you know, you guys were seeing a higher mix of, you know, higher caliber jobs. So I just wanna get a sense, you know, in the Finance and Accounting, how the job breakdown is looking there. Well, we've said on prior calls that we've now gotten to where over half of our contract positions are higher skilled, they have higher margins, they're not as economically sensitive, and so we're pleased with that migration up the skill curve. We've been on that journey for a long time. We continue on that journey. It also plays in well with Talent Solutions and Protiviti going to market together because it's those higher skills that often fit best in the joint projects we have with Protiviti. So strategically, we love this, this higher mix of higher skill, not that we're walking away in any shape or form from the more operational skills, which are the high volume positions in most accounting departments. Thank you for the color. The next question will come from George Tong with Goldman Sachs. Hi. Thanks. Good afternoon. Can you compare and contrast trends that you're seeing with temp staffing and perm placement and put that in the context with the broader macro environment? Well, it's interesting, George. So if you go to our website where we've got our investor slides, we've got a couple that show for 25 years of relative performance between contract or temp and perm placement. And what you'll see is that they're highly correlated. The beginnings, the troughs, the peaks happen largely at the same time. Perm placement always more volatile, lower lows, higher highs from a growth rate standpoint. I'd say if you look at the past eight quarters of what I would certainly call a staffing recession, we're down, peak to trough, in both contract and perm placement, less than we have been in other staffing recessions. The thing that probably is the most in contrast, whereas, in prior staffing downturns, permanent placement declines by over 50%, and so far this time, these past eight quarters, I think peak to trough, we're down in the 30%. More benign peak to today in perm placement, better in contract, but not as different as is the case in perm placement. Differently, perms faring better in this staffing downturn than it has in prior staffing downturns, but it's still more impacted than contract because it's fundamentally about full-time jobs. Got it. That's helpful. Earlier, you provided some comparisons between enterprise and SMB customer behaviors. Can you talk a bit about what you're seeing, across different verticals? Which verticals, and markets are doing particularly well, and which end markets are faring less well? Well, I would put it on a practice group basis, and where we talk about Finance and Accounting, Administrative Customer Support, Technology, are our big PAC practice groups. And because they're all principally SMB-focused, you know, current sequential performance, one to the other, isn't that different. And the year-on-year differences are more about the comps than they are current sequential performance. So I wouldn't call out any practice group more so than another in that way. Got it. Thank you. The next question will come from Trevor Romeo with William Blair. Hi, Keith and Mike, thanks for taking the questions. Just a couple of quick ones for me. One on Europe. I think we had heard from a few of the other kind of talent solutions companies that demand in Europe weakened a bit the past few months incrementally, particularly on the perm side. Just curious if you saw that as well, and if you could kinda just talk about the demand environment in, you know, Germany, Belgium, any of the other notable markets in Europe, that'd be great. I would say not much change. If you look at our supplemental revenue schedules, you'll see the year-on-year performance quarter one versus quarter two for non-U.S. operations isn't very different. And so I would say more of the same. Our forecast for Q3 is similar as well, so no notable change in our collection of international countries, led by Germany, Belgium, Brazil coming on as I talked last quarter, but not much change. Okay, thank you. you. That's helpful. And then just a quick follow-up on Protiviti. You know, I think you called out broad strength across all the solution areas, which was nice to hear, but I think the last, you know, several quarters, you talked about internal audit and tech consulting seeing some budget pressures. So have you started to see some of that pressure on, on those two solutions, in particular, ease, in the past few months? I would say, particularly in internal audit, we're seeing some life with financial institutions, internal audit, particularly IT internal audit. And so we would be more positive about internal audit, particularly with large financial institutions. As you know, about 40% of Protiviti's revenues are in the financial services industry. So to see some signs of optimism there is great. The other thing I'd point out is, sequentially, in the third quarter, we typically see a lift from more Sarbanes-Oxley work. We're gonna see that lift again. However, it's masked by a couple of large projects that ended this past quarter. And so they're essentially going to offset the sequential progress we would typically see in the third quarter, such that the guidance you're given sequentially is flat at the top line, more improvement on utilization, such that you've got gross margin and segment margin improvements. All right. Thank you, Keith. Appreciate it. The next question will come from Tobey Sommer with Truist Securities. Hey, good afternoon. This is Jack Wilson on for Tobey. Can we maybe dig into a little bit more of the dynamics you saw in June? It looks like, NFIB small business optimism trended up sort of March to June. Is that something that you saw? Well, I don't know whether you're talking about our numbers specifically or generally. I would say, generally, if you look at NFIB, we're encouraged that their confidence index has improved three months in a row. It's still below their normal average, but sequentially, at least for those three months, we are encouraged. 60% are still trying to hire, 85% of them, a few or no qualified applicants. Inflation is still the number one business problem for which we seem to see some progress, which was helpful, coming out of the second half of last year into the first part of this year. And so NFIB, small business, confidence, hiring, it's a little better. It's a little better. Okay, and then maybe as a follow-up. June included. Go ahead. Maybe as a follow-up to that, do you think we could see sort of a step change in customer sentiment following the election or the inauguration? Oh, boy! You know, the answer is I don't know. My recollection is, having been here a bit, is that there haven't been huge swings in elections one way or the other. Okay, thank you very much. The next question will come from David Silver with C.L. King. Yeah. Hi, thank you. I think my first question would be on the blended solutions performance this quarter. So, I guess the inter-segment eliminations number grew while Contract Talent Solutions, you know, was weaker across the board. And, you know, firstly, I was just wondering if you could comment on that trend, where, I guess blended solutions is accounting for a larger share of your contract talent placements. And then secondly, if you could remind me about the economic effects internally, I guess, for Robert Half when, let's say, a Protiviti project is staffed, you know, via the blended solutions route versus, let's say, you know, with another candidate or, sorry, that candidate would be placed with a non-Protiviti client. Thank you. Okay, so blended solutions, and you're right, and we're happy that we now have three quarters in a row where blended solutions with Protiviti have grown sequentially. The two or three prior to that, Protiviti was aggressively managing its utilization levels for its full-time staff, which was done to some extent at the expense of using contractors. But we now have three quarters in a row where that's grown. We're going to market together better than ever. That's a good thing. As to economic impacts, from an enterprise point of view, whether we place a candidate on a third-party client directly from Talent Solutions or to a third-party client via Protiviti, the gross margins aren't that different. One way to look at it is, by going through Protiviti for enterprise accounts, we're effectively getting SMB gross margins that we otherwise wouldn't get if we were going directly to those enterprise third-party clients rather than through Protiviti, if that's clear. Okay. No, that's, that's great. I'll-- I will have to review it, but thank you for the walk-through there. And then, you know, I did note your comment about recruiters plus AI approach that, you know, I'm, I'm sure will grow in importance. But, if, you know, if we're speaking a year from now and that element of your overall business strategy is or develops as you pros-- as you suspect, where will that... Will that success be, you know, reflected in your results on a broader basis, or should we look for, you know, greater impact on certain of your staffing lines? I think it would be broad. Our clients clearly tell us they want both. They want the benefit of world-class AI, they want the benefit of recruiters. They want to choose when they primarily go digitally versus use recruiters. Typically, at the front end, they're more digital, and at the back end, they're more recruiter-focused. But every client's different, and the point is, we have both capabilities, which is not true for the digital-only competitors, if you will, out there. So they want both, and they want to choose on their terms and on their timetable when they want to lead with digital AI and when they want to lead with recruiters, and they expect a seamless connection between our AI and our recruiters, which our internal systems do a decent job of today and will do a better job as time passes. Okay, great. We're very happy about this new capability. Go to our website, roberthalf.com. You can, today, anybody, search for candidates, and in so doing, you will, you will see who we have that matches those specifications, and we will show you in a star system, one to five stars, how our recruiters rate that candidate. Got it. And then maybe just one last brief one, but there's a trend, I guess, over the last couple quarters, where sequentially, your perm revenues have actually risen while your the temp and project-based staffing has continued to sequentially decline. And just, you know, from my models and whatnot, I hadn't really noticed that trend happening too often, you know, with that divergence and in particular with perm, you know, leading temp. Is there anything you would call out, to maybe, you know, describe or explain the relative strength in perm versus the contract and temp side of your staffing operations? Thanks. Well, I'm sitting here looking at the last eight quarters, and then during 2023, they were pretty similar every quarter. Right. In 2024, the second quarter was stronger. The second quarter is always a seasonally stronger quarter for perm, and I would say, even though it was up sequentially, that still wasn't a normal sequential rise for them for seasonal reasons. And so I would- Right. I would attribute the differential in the second quarter to typical seasonality. And other than that, they're pretty similar. Very good. I appreciate all the color. Thank you. The next question will come from Mark Marcon with Baird. My follow-up was answered. Thanks. Thank you. Okay. That was our last question. We thank you for joining us today. Thank you very much. Thank you. This concludes today's teleconference.