Business Segments

3 Months Ended

Mar. 31, 2023

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, 2022. The Company evaluates performance based on income before intangible assets amortization expense, net interest income, and income taxes.

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results for the three months ended March 31, 2023 and 2022 (in thousands):

	Three Months Ended March 31,
	2023		2022
Service revenues
Contract talent solutions	$	1,065,474	$	1,155,723
Permanent placement talent solutions	156,737		186,782
Protiviti	494,124		472,329
	$	1,716,335	$	1,814,834
Segment income
Contract talent solutions	$	102,146	$	133,246
Permanent placement talent solutions	23,827		37,328
Protiviti	38,821		57,077
Combined segment income	164,794		227,651
Amortization of intangible assets	721		417
Interest income, net	(4,825)		(166)
Income before income taxes	$	168,898	$	227,400

Service revenues presented above are shown net of eliminations of intersegment revenues. Intersegment revenues between contract talent solutions segment and Protiviti segment were $125.8 million and $144.2 million for the three months ended March 31, 2023 and 2022, 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.