Randstad on Wednesday published first-quarter 2026 results that came in slightly above market expectations on adjusted operating profit, while revealing continuing margin headwinds in its temporary staffing business.
Earnings and margins
The Dutch employment services provider reported adjusted earnings before interest and tax of 146 million for the quarter, down 13% from the year-ago period but roughly 2% higher than the consensus estimate of 143 million. The adjusted EBIT margin slipped by 30 basis points to 2.6%.
Gross profit margin declined by 80 basis points year-on-year to 18.5%, a level marginally above the consensus view of 18.4%.
Revenue trends
Organic revenue rose 0.4% in the quarter, an improvement from a 2.1% decline recorded in the fourth quarter of 2025. That result also outperformed consensus expectations, which had forecast a 0.4% contraction in organic revenue.
Within the quarter, growth momentum improved over the months. January posted a 0.4% decline in organic revenue before activity strengthened in the subsequent months, with April maintaining the level seen in March.
Regional performance
Performance across Randstad's regions was uneven. North America was flat year-on-year, after reporting 1% growth in the fourth quarter. The Netherlands returned to growth with a 1% increase, following a 7% decline in the prior quarter. Germany's trend also eased, with a 4% decline compared with a 10% contraction in the fourth quarter.
Business mix and margin components
Margin pressure was most pronounced in the temporary worker business. The temporary worker margin deteriorated by 60 basis points compared with the year-earlier quarter, accelerating from a 20 basis point decline in the fourth quarter. Permanent placement margins moved 20 basis points lower, while margins in other services were unchanged.
Costs, workforce and balance sheet
Selling, general and administrative expenses fell 6% year-on-year to 873 million, equivalent to a 3% reduction on an organic basis. The company reduced its headcount organically by 2% during the quarter.
Free cash flow turned negative, at 98 million, compared with positive 59 million in the prior-year period. This was driven by a 121 million working capital outflow that the company expects will be partly reversed in the second quarter. Net debt was reported at 1,119 million, with leverage of 1.5 times.
Outlook
Looking ahead to the second quarter, Randstad anticipates a slight sequential decline in gross margin and a modest increase in selling costs.
Implications
The results show a company navigating improving revenue momentum but persisting margin pressures, particularly in temporary staffing, while cash flow has weakened temporarily due to working capital movements.