Kforce: Kforce Reports First Quarter 2025 Revenue of $330.0 Million and EPS of $0.45

In This Article: TAMPA, Fla., April 28, 2025 --( BUSINESS WIRE )-- Kforce Inc . (NYSE: KFRC), a solutions firm that specializes in technology and other professional staffing services, today announced results for the first quarter of 2025. Joseph J. Liberatore, President and Chief Executive Officer, said, "Our first quarter performance was generally consistent with our expectations. Like many others, we entered 2025 with a general sense of optimism for U.S. economic growth with the expected derivative benefit being a boost in our clients' confidence in accelerating investments in technology initiatives that have been deferred for the last several years. The general tonality as we sit here today is that the earlier optimism has waned to a degree, and the macroeconomic uncertainties have increased, which may delay an acceleration of investments from many companies. Regardless of the ultimate macroeconomic environment, we believe there remains an increasingly strong backlog of strategically imperative technology investments." Mr. Liberatore continued, "As we look ahead to the second quarter and the remainder of 2025, as has been the case over the last few years, we will continue to stay close to our clients, monitor our key performance indicators, and make any necessary adjustments to our business while continuing to invest in our long-term strategic priorities and retain our most productive associates. Our motto continues to be to control what we can control. Our domestically focused business and organic growth strategy continues to benefit our organization by eliminating any unnecessary distractions for our people so that their full energy is directed to partnering with our clients to help them solve their most important business challenges." Quarterly Financial Highlights Revenue for the quarter ended March 31, 2025 was $330.0 million, a decrease of 4.0% (5.5% on a billing day basis) sequentially and 6.2% (4.7% on a billing day basis) year over year. Technology Flex revenue decreased 3.7% (5.2% on a billing day basis) sequentially and 5.0% (3.5% on a billing day basis) year over year. FA Flex revenue decreased 12.8% (14.2% on a billing day basis) sequentially and 23.2% (22.0% on a billing day basis) year over year. Gross profit margins of 26.7% decreased 30 basis points sequentially and 40 basis points year over year. Flex gross profit margins of 25.0% decreased 50 basis points sequentially primarily due to seasonal payroll tax resets and 60 basis points year over year primarily related to higher healthcare costs. SG&A expenses as a percentage of revenue was 22.8% for the quarter ended March 31, 2025, which increased 80 basis points sequentially and 60 basis points year over year. Operating margins were 3.5% for the quarter ended March 31, 2025, which decreased 100 basis points sequentially and year over year. Diluted earnings per share for the quarter ended March 31, 2025 was $0.45, a decrease of 25.0% sequentially and 22.4% year over year. We returned $28.3 million in capital to our shareholders in the form of open market share repurchases and quarterly dividends during the first quarter of 2025. Our Board of Directors approved a second quarter cash dividend of $0.39 per share to shareholders of record as of the close of business on June 13, 2025, which will be payable on June 27, 2025. Second Quarter 2025 - Guidance Looking forward to the second quarter of 2025, there will be 64 billing days, compared to 63 billing days in the first quarter of 2025 and 64 billing days in the second quarter of 2024. Current estimates for the second quarter of 2025 are: Revenue of $332 million to $340 million Earnings per share of $0.57 to $0.65 Gross profit margins of 27.2% to 27.4% Flex gross profit margins of 25.7% to 25.9% SG&A expenses as a percent of revenue of 22.2% to 22.4% Operating margin of 4.4% to 4.8% WASO of 17.9 million Effective tax rate of 26.0% Conference Call On Monday, April 28, 2025, Kforce will host a conference call at 5:00 p.m. E.T. to discuss these results. The dial-in number is (800) 715-9871 and the conference passcode is "Kforce." The prepared remarks for this call and webcast are available on the Investor Relations page of the Kforce Inc. website in the News and Events section. The replay of the call can be accessed at http://investor.kforce.com . About Kforce Inc. Kforce Inc. (the "Firm") is a solutions firm specializing in technology, finance and accounting, and other professional staffing services. Our KNOWLEDGEforce® empowers industry-leading companies to achieve their digital transformation goals. We curate teams of technical experts who deliver solutions custom-tailored to each client's needs. These scalable, flexible outcomes are shaped by deep market knowledge, thought leadership and our multi-industry expertise. Our integrated approach is rooted in 60 years of proven success deploying highly skilled professionals on a temporary and direct-hire basis. Each year, approximately 18,000 talented experts work with Fortune 500 and other leading companies. Together, we deliver Great Results Through Strategic Partnership and Knowledge Sharing®. CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS All statements in this press release, other than those of a historical nature, are forward-looking statements including, but not limited to, statements regarding the return to a significant increase in investments from many companies, the backlog of strategically imperative technology investments, the leveraging by companies of flexible talent to advance their technology imperatives, any necessary adjustments to our business, investments in our long-term strategic priorities, retention of our most productive associates, and the Firm's guidance for the second quarter of 2025. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Factors that could cause actual results to differ materially include the following: general business conditions; the imposition of U.S. tariffs and Department of Government Efficiency (DOGE) actions, and their potential impacts on our operations and the broader economy; growth rate in temporary staffing and the general economy; competitive factors; risks due to shifts in the market demand; changes in client demand or our ability to adapt to such changes; a constraint in the supply of consultants and candidates or the Firm's ability to attract and retain such individuals; the success of the Firm in attracting and retaining its management team and key operating employees; changes in business or service mix; the ability of the Firm to repurchase shares and issue dividends; the occurrence of unanticipated expenses, income, gains or losses; the effect of adverse weather conditions; changes in our effective tax rate; our ability to comply with or respond to government regulations, laws, orders, guidelines and policies that impact our business; risk of contract performance, delays, termination or the failure to obtain new assignments or contracts, or funding under contracts; ability to comply with our obligations in a remote work environment, including consultants engaging in unauthorized or fraudulent activity; continued performance, security of, and improvements to, our enterprise information systems; and impacts of actual or potential litigation or other legal or regulatory matters or liabilities, including the risk factors and matters listed from time to time in the Firm's reports filed with the Securities and Exchange Commission, including, but not limited to, the Firm's Form 10-K for the fiscal year ended December 31, 2024, as well as assumptions regarding the foregoing. The terms "should," "believe," "estimate," "expect," "intend," "anticipate," "plan" and similar expressions and variations thereof contained in this press release identify certain of such forward-looking statements, which speak only as of the date of this press release. As a result, such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Future events and actual results may differ materially from those indicated in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements and the Firm undertakes no obligation to update any forward-looking statements. Kforce Inc. Summary of Operations (In Thousands, Except Per Share Amounts) (Unaudited) Three Months Ended March 31, 2025 December 31, 2024 March 31, 2024 Revenue $ 330,028 $ 343,782 $ 351,889 Direct costs 241,768 251,127 256,639 Gross profit 88,260 92,655 95,250 Selling, general and administrative expenses 75,165 75,586 78,190 Depreciation and amortization 1,464 1,491 1,333 Income from operations 11,631 15,578 15,727 Other expense, net 565 508 656 Income before income taxes 11,066 15,070 15,071 Income tax expense 2,921 4,009 4,084 Net income $ 8,145 $ 11,061 $ 10,987 Earnings per share - diluted $ 0.45 $ 0.60 $ 0.58 Weighted average shares outstanding - diluted 18,241 18,573 18,932 Adjusted EBITDA $ 16,751 $ 20,565 $ 20,560 Billing days 63 62 64 Kforce Inc. Consolidated Balance Sheets (In Thousands) (Unaudited) March 31, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 444 $ 349 Trade receivables, net of allowances 220,532 215,690 Prepaid expenses and other current assets 8,845 9,367 Total current assets 229,821 225,406 Fixed assets, net 7,154 7,723 Other assets, net 100,936 94,656 Deferred tax assets, net 5,244 5,009 Goodwill 25,040 25,040 Total assets $ 368,195 $ 357,834 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and other accrued liabilities $ 59,367 $ 61,753 Accrued payroll costs 40,922 38,823 Current portion of operating lease liabilities 3,152 3,038 Income taxes payable 7,856 8,843 Total current liabilities 111,297 112,457 Long-term debt - credit facility 65,