Keith Waddell: Well, if you look at the progression over 2022 of Protiviti’s SG&A percentage, you will see that it grew quarter by quarter by quarter to get back to more normal levels because 2021, early 2022, they didn’t have as much training. They didn’t have as much practice development. They didn’t have as much marketing. And so those have returned to a more normal level. So from a Q1 only perspective, you’re comparing Q1 2023 with normal levels of spending to Q1 2022, that hadn’t yet built back to normal levels of spending. But the featured fight, the main event for understanding Protiviti’s Q1 segment margins, operating margins is what happens at the gross margin line, and that’s where they’re impacted by all the raises that come in all at once on Jan 1, the front ending of some of their hires and from the seasonal softness in their internal audit serving actually that happens every year that they recovered from nicely.
Protiviti had 14% operating margins in Q4. We were very, very pleased with that, though stepped down in Q1, which is very consistent with how they’ve stepped down in prior years, and that step down is mostly about gross margin, not necessarily about SG&A.
George Tong: Got it. Very helpful. Thank you.
Operator: Your next question comes from the line of Kevin McVeigh with Credit Suisse. Please go ahead.
Kevin McVeigh: Great. Thanks so much. Just to unpack the Q1 guidance a little bit. Again, I know there’s some seasonality there, but it looks like the range is similar to Q4. And if you take the revenue, looks like the midpoint of the EPS about $0.21 less. Is that the typical seasonality? Or is there anything else in there that you’d kind of call out one way or another, maybe utilization being a little bit lower. I know there’s always the typical seasonal step down. But is there anything else? Because again, the revenue range looks pretty close kind of Q4 to Q1?
Keith Waddell: I’d say you’ve got typical Protiviti seasonality and maybe it’s a little more this year than last because the raises were a little higher this year than last. That would be Point one. Point two, because our perm assumption is more conservative than contract, you’ve got a smaller perm mix, which has higher margins. Point three, there’s some negative SG&A leverage because of this one to two quarter lag that I talked about earlier as we adjust our headcount to current levels of revenue. You put on top of that, the tax rate is elevated. It was elevated in Q4. It will be elevated again in Q1, in part has caused the stock prices down. But if you compare Q1 to Q1 a year ago, the tax rate is up pretty significantly. So it’s essentially about Protiviti seasonality, less perm mix because of conservative guidance, some negative SG&A leverage because there’s a one or two-quarter lag between topline and how we adjust heads. But otherwise, pretty much as expected.
Kevin McVeigh: Got it. And then Keith, you’ve been around a couple of cycles, I think as a lot of us have any €“ no two are the same, but if you were to parallel any €“ I mean it’s just so tricky with COVID out and the stimulus €“ as you think about the outlook, like in your preparing and again, no two are the same, is there any time in history you draw similar parallels to just based on what you’re seeing today?
