Business Segments

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company has three reportable segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. Operating segments are defined as components of the Company for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The temporary and consultant staffing segment provides specialized staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing and web design fields. The permanent placement staffing segment provides full-time personnel in the accounting, finance, administrative and office, and information technology fields. The risk consulting and internal audit services segment provides business and technology risk consulting and internal audit services.

The accounting policies of the segments are set forth in Note A—“Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company evaluates performance based on income before net interest income, intangible assets amortization expense, and income taxes.

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results for the three and nine months ended September 30, 2021 and 2020 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Service revenues
Temporary and consultant staffing	$	1,054,701	$	781,391	$	2,922,257	$	2,626,897
Permanent placement staffing	156,444		87,203		411,788		278,722
Risk consulting and internal audit services	501,421		321,303		1,357,482		899,295
	$	1,712,566	$	1,189,897	$	4,691,527	$	3,804,914
Segment income
Temporary and consultant staffing	$	110,010	$	43,779	$	279,697	$	165,933
Permanent placement staffing	31,030		10,128		79,264		20,791
Risk consulting and internal audit services	86,952		48,735		224,256		105,311
Combined segment income	227,992		102,642		583,217		292,035
Amortization of intangible assets	572		334		1,724		1,002
Interest income, net	(238)		(202)		(145)		(1,264)
Income before income taxes	$	227,658	$	102,510	$	581,638	$	292,297

Service revenues presented above are shown net of eliminations of intersegment revenues. Intersegment revenues

between temporary and consultant staffing segment and risk consulting and internal audit services segment were $173 million and $419 million for the three and nine months ended September 30, 2021, respectively, and $60 million and $148 million for the three months and nine months ended September 30, 2020, respectively.

Revenue and direct costs related to the intersegment activity are reflected in the risk consulting and internal audit segment, including the costs of candidate payroll, fringe benefits and incremental recruiter compensation.