Keith Waddell: And so we’re not talking about year-on-year comps getting easier. As we talked about in prior quarters, in this environment, we think it’s much more important to look at sequential trends. And within that, weekly sequential trends. So we talked last quarter about from beginning to end of the quarter our weekly sequential revenue trends were about negative 3% from the beginning to the end. If you compare that same statistic through the middle of December before the holidays impacted that number is about 1%. And so 13 weeks prior to mid-December, the beginning to endpoint only changed by 1%. And so getting that to 1% is getting very close to weekly sequential results going from negative to positive. And that’s what we mean by inflection point, it’s got nothing to do with year-on-year, it’s got nothing to do with comps being easier or harder, year-on-year.
It’s saying, if you look at weekly trends for the 13 weeks, which is about a quarter ending mid-December, which doesn’t include holiday impacts, beginning to end, we were only down 1%, that’s better than the 13 weeks in the third quarter, which was better than the 13 weeks in the second quarter. So we’ve got a couple of quarters where the weekly sequential trends have improved. And rather than talking about narrowing declines, which is what we’ve talked about for the last couple of quarters, we’re very close to going even, if you will, to the point of having positive weekly trends.
Trevor Romeo: And then just maybe one on Protiviti. I was just wondering if you could maybe give us an update on utilization trends in the quarter, kind of how you’re thinking about the balance of head count versus utilization and within that balance of contractors versus full time head count?
Keith Waddell: Well, utilization was what we expected it to be in the fourth quarter. Generally, Protiviti performed better, slightly better than we expected, led by our risk and compliance, as we’ve talked about. In the first quarter guidance, as always, because of the internal audit dynamics I talked about earlier, there’s always a modest decline in utilization for the first quarter, that’s a seasonal thing. But that seasonal impact, again, is about what we traditionally see and is what we expect. So we would argue that sequentially, seasonally, however you want to think about it, Protiviti’s first quarter is about what we would expect on a sequential basis. Year-on-year, because you’ve had three quarters that have been sequentially softer than in the past, year-on-year is still impacted by that.
But if you just focus on current results, forecasted first quarter results, sequential impacts are about what we expect. Protiviti at top line is actually projecting above trend first quarter relative to the last several years.
Operator: Your next question comes from the line of Stephanie Moore with Jefferies.
Stephanie Moore: I just wanted to follow up. I think you’ve clearly explained kind of what you’re seeing on a week-over-week basis. So my question is, have you started to maybe adjust maybe ramping of recruiters or preparing for a potential inflection or improvement in the market, or what would you need to see to maybe — if you haven’t done so, what would you need to see from a sequential or trend standpoint to start making those adjustments?
Keith Waddell: Well, because we have reduced our recruiter head count commensurate with revenue declines, we do have dry powder capacity as business conditions improve. So we would not look to immediately begin to add to headcount. But the more continued weekly sequential improvement we see, the more likely it would be that we would begin to add headcount. So we have some capacity, as we speak, which is by design, we haven’t been looking to optimize to margins, we’ve been looking to have dry powder as things get better. We have that, we can rely on that probably for a quarter or two depending on how quickly things get better, then we would begin to add to head count. And I can assure you there is plenty of pent-up demand out in our branch offices for us to add to headcount. That’s the understatement of everything I’ve said so far today.
Operator: Your next question comes from the line of George Tong with Goldman Sachs.
George Tong: At the midpoint, you’re guiding to about a 200 basis point step down in EBIT margins from 4Q to 1Q. Can you elaborate on what’s driving the step down in margins?
Keith Waddell: Well, I think you’re talking sequential step down and that sequential step down is virtually all Protiviti and that’s that typical seasonal impact of less [chargeability] utilization at the revenue line for internal audit, external audit crowd out that I talked about. And then at the cost line, you’ve got all those raises and the impact of promotions that get recovered on a lag basis over the course of the year. Again, very typical seasonal impact and something that we reverse over the course of the year just as we did during 2023 and in prior years.
George Tong: And sticking with Protiviti, you mentioned that economic conditions are continuing to impact the average deal size and the time it takes to close contracts. Can you elaborate on some of those developments in terms of maybe providing some metrics and how much deal sizes have changed and how long sales cycles may have elongated?
