Robert Walters Q4 Earnings Call Highlights

Robert Walters (LON:RWA) reported a fourth-quarter trading update marked by continued pressure on group net fee income, alongside progress on productivity measures, headcount reductions, and cost savings initiatives. Management said conditions remained mixed across the company’s geographic portfolio, with some markets stabilizing or returning to growth while others stayed challenging.

Q4 net fee income down 14% as markets moved at “different speeds”

Chief Financial Officer David Bower said group net fee income declined 14% year-on-year in Q4 2025 (in constant currency), “largely mirroring” the cumulative position across the first three quarters. He described broadly consistent trends versus Q3, but noted that performance reflected a blend of markets “moving at different speeds,” potentially to an even greater extent than in the prior quarter.

The company also refined its reporting format to more clearly separate performance between its service lines. Specialist recruitment represented 82% of group fees in Q4, while recruitment outsourcing accounted for 18%.

Productivity improved; headcount reduced; cost base lowered

On productivity, Bower said the company continued to see year-on-year improvement. In specialist recruitment, perm placements per perm fee earner rose 2% to 0.84, supported by double-digit growth in the U.K. and Southern Europe. Management attributed the improvement primarily to “careful management” of fee earner headcount.

Looking ahead, Bower said fee earner levels are now “broadly appropriate” for current market conditions, and that 2026 will focus on driving further fee earner productivity by maximizing the sales funnel and ensuring teams highlight the company’s broader talent solutions to clients.

At the group level, net fee income per fee earner increased 3% year-on-year, which Bower said reflected a favorable mix impact and “continued strong fee rates” that were either stable or rising across markets.

Headcount ended the year at just under 2,900 staff, down 5% quarter-on-quarter, with both fee earners and non-fee earners declining by roughly the same amount. Bower added that the company remains focused on reallocating resources between markets based on strategic opportunity and activity levels.

On costs, management said it exited 2025 with a monthly cost base run rate below £24 million, compared with £25 million to £26 million 12 months earlier. The company reiterated progress toward its target of at least £10 million of annualized structural cost savings by 2027, with current emphasis on moving transactional finance processes from local markets into global business services hubs. Bower said cost control, combined with transformation benefits, should drive a further reduction in costs in 2026 versus 2025.

The company ended the year with net cash of £26 million, which Bower said was in line with guidance provided at the half-year results. Management emphasized that maintaining a strong balance sheet remains central to capital allocation decisions.

Regional performance: U.K. strength, Europe challenges, mixed APAC

Chief Executive Officer Toby Fowlston outlined specialist recruitment performance by region. In Asia-Pacific, net fee income declined 11% year-on-year in Q4. Japan, the company’s largest recruitment market, was down 10%, with management citing stronger temp performance but weaker perm results. Fowlston said actions are underway to improve perm performance and added that the underlying bilingual candidate market drivers remain “strong.”

Australia and New Zealand saw “sustained improvement” in temp volumes through 2025, which continued in Q4. New Zealand fees rose 18% in Q4, while Australia declined 20%, as weaker perm results outweighed temp momentum—though Fowlston noted a rebound in Australia during December.

In Europe, specialist recruitment net fee income fell 23% in Q4. Fowlston said Southern Europe, led by Spain, continued to show year-on-year improvement in hiring indicators such as job vacancies. Northern Europe remained the most difficult region, with uncertainty driven by “regulatory, macro, and political factors.” The company reported fees down 27% in France, 28% in the Netherlands, and 30% in Belgium, though performance in each market was described as sequentially stable.

The U.K. was the standout, with Q4 fees up 25% year-on-year. Fowlston acknowledged an easier comparative but said momentum was building, pointing to sequential improvement from 6% growth in Q3. London was up 20% with growth in both perm and temp across verticals, and the company’s regions returned to growth for the first time since the end of 2022.

In the Rest of the World segment, the Middle East ended the year more slowly with fees down 23%, while continuing operations in the Americas grew 11%.

Recruitment outsourcing: contract annualization weighed; talent advisory nearly doubled

Recruitment outsourcing fees declined 12% year-on-year in Q4, which Fowlston said was a slight improvement on the year-to-date trend. The main driver was the annualization of clients contracted in 2024 that were not renewed in 2025. Management highlighted that retained client RPO was more resilient, with fees down 5% year-on-year across 2025 as a whole.

Fowlston also pointed to progress following an expansion of a perm volume hiring partnership announced in the Q3 update, saying the company began to see evidence that the contract was contributing more to group fees.

Workforce consultancy—described as meeting flexible hiring needs by deploying the company’s permanently employed skilled consultants into client organizations, often in technology—“finished the year well,” and management said it sees opportunities beyond its existing outsourcing client base.

Talent advisory, the newest service line offering market intelligence, future-of-work advice, and talent development, closed 2025 with net fee income for the year “almost double” the 2024 level. Fowlston said the company is still refining the operating model and plans to share further details at the full-year results in March.

2026 outlook: planning for slightly lower net fee income; recovery expected to be gradual

Fowlston said 2025 marked the third year of reduced hiring volumes following the post-pandemic surge, but the company was encouraged to see some major markets stabilizing and returning to growth in the second half. In Q4, around a quarter of the specialist recruitment business was in growth, similar to Q3 and an improvement from a single-digit proportion in the first half.

However, management said uncertainty continues to keep client and candidate confidence fragile and reiterated its view that recovery will be gradual and “market by market,” rather than driven by a single event.

For 2026, the company said it is starting the year assuming group net fee income will be slightly below 2025, while acknowledging a modest range of potential outcomes. Management said it intends to focus on factors within its control, including continued cost reduction, portfolio management actions at country and team level, and showcasing the full range of solutions to drive productivity.

During Q&A, management said fee rates in Japan remain among the highest globally, were described as stable to slightly up, and that candidate scarcity continues. Fowlston also addressed artificial intelligence, calling it “transformative” but emphasizing that the industry’s transition will still require “fundamentally human skills.” He said the company believes AI-driven labor market disruption will be net positive, cited a World Bank view of significant net job creation by 2030, and described slower AI adoption among SMEs versus larger enterprises. He added that automating repetitive tasks could free consultants to focus more on trusted-advisor relationships with clients and candidates.

The company reiterated it will provide additional detail at its full-year results in March.

About Robert Walters (LON:RWA)

Established in 1985, Robert Walters is a global talent solutions business operating in 31 countries across the globe. We support organisations to build high-performing teams, and help professionals to grow meaningful careers. Our client base ranges from the world’s leading blue-chip corporates through to SMEs and start-ups.

We deliver three core services:

• Specialist recruitment – encompassing permanent and temporary recruitment, executive search and interim management.
• Recruitment outsourcing – enabling organisations to transfer all, or part of, their recruitment needs to us either through recruitment process outsourcing (RPO) or contingent workforce solutions (CWS).
• Talent Advisory – supporting the growth of organisations through market intelligence, talent development, and future of work consultancy.

Our employees are passionate about powering people and organisations to fulfil their unique potential.