Business Segments

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company has three reportable segments: contract talent solutions, permanent placement talent solutions, and Protiviti. 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 contract talent solutions and permanent placement talent solutions segments provide specialized engagement professionals and full-time personnel, respectively, for finance and accounting, technology, marketing and creative, legal, administrative and customer support roles. The Protiviti 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, 2021. The Company evaluates performance based on income before net interest (income) expense, 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 six months ended June 30, 2022 and 2021 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Service revenues
Contract talent solutions	$	1,165,693	$	978,281	$	2,321,416	$	1,867,557
Permanent placement talent solutions	200,096		143,640		386,878		255,344
Protiviti	497,038		458,660		969,367		856,060
	$	1,862,827	$	1,580,581	$	3,677,661	$	2,978,961
Segment income
Contract talent solutions	$	133,567	$	94,010	$	266,813	$	169,688
Permanent placement talent solutions	36,751		30,599		74,079		48,234
Protiviti	70,213		79,980		127,290		137,303
Combined segment income	240,531		204,589		468,182		355,225
Amortization of intangible assets	416		576		833		1,152
Interest (income) expense, net	(718)		151		(884)		105
Income before income taxes	$	240,833	$	203,862	$	468,233	$	353,968

Service revenues presented above are shown net of eliminations of intersegment revenues. Intersegment revenues between the contract talent solutions segment and Protiviti segment were $137.5 million and $281.7 million for the three and six months ended June 30, 2022, respectively, and $143.0 million and $246.8 million six months ended June 30, 2021, respectively.

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