Comprehensive Framework Developed by Ed.D. Credentialed Educators and HR Experts Sets New Benchmark for Education Workforce QualityTROY, Mich., Nov. 17, 2025 (GLOBE NEWSWIRE) -- Kelly Education, the nation's leading provider of education talent and workforce solutions, today announced the launch of its innovative LEARN Standards, a research-backed framework designed to professionalize and elevate the critical roles of substitute teachers and paraeducators across the country. Developed through collaboration ...

Core Insights - The Kelly Global Re:work Report highlights a significant disconnect between executives and employees regarding the adoption and benefits of AI in the workplace [4][6] - Executives view acquiring AI skills as essential for career success, while many employees remain skeptical about the technology's advantages [1][2] Group 1: Executive Perspectives - 69% of executives believe that refusing to adopt AI poses a greater threat to job security than the technology itself [2] - More than half (59%) of executives would consider replacing workers who resist adopting AI tools [2] - Executives acknowledge that AI should enable employees to focus on high-value tasks, yet only 47% of workers report time savings from AI [3] Group 2: Employee Perspectives - Less than half of employees (47%) feel they are benefiting from AI tools, and 32% do not see any advantages [3] - There is a notable gap in trust and understanding of AI's role in enhancing job performance among employees [4][5] Group 3: Implementation Challenges - 80% of executives admit that AI implementation is stalling due to a lack of expertise among teams [3] - Organizations face technical challenges, security concerns, and slow user adoption, which hinder effective AI integration [4] - The report identifies a skills gap as a critical barrier to realizing the full potential of AI in the workplace [4][5] Group 4: Recommendations for Organizations - The report urges employers to address three interconnected gaps: technology, talent, and trust [5] - Recommendations include linking AI fluency to career development, providing hands-on demonstrations to alleviate fears, and establishing feedback loops to align leadership and employee experiences [5][6] - Leaders are encouraged to model AI usage in their roles and foster a culture that promotes AI-driven problem-solving [6]

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Revenue Performance - Revenue from services in Q3 2025 decreased by 9.9% year-over-year to $935.0 million, with declines in ETM and SET segments, partially offset by growth in the Education segment [149]. - Year-to-date revenue from services increased by 1.9% to $3,201.7 million, primarily driven by the acquisition of MRP [155]. - In the ETM segment, revenue decreased by 13.1% in Q3 2025, primarily due to a 16.4% drop in staffing services [164]. - The SET segment experienced a 9.0% decline in revenue, largely due to reduced demand from U.S. federal government contractors [165]. - Education segment revenue increased by 0.9% in Q3 2025, driven by improved fill rates [166]. Profitability and Expenses - Gross profit decreased by 12.5% to $194.0 million, with a gross profit rate of 20.8%, down 60 basis points from the previous year [151]. - Gross profit for the Enterprise Talent Management (ETM) segment decreased by 15.4% to $96.7 million in Q3 2025, compared to $114.4 million in Q3 2024 [172]. - The Science, Engineering & Technology (SET) segment's gross profit decreased by 11.8% to $77.2 million in Q3 2025, influenced by changes in business mix and higher employee-related costs [174]. - The Education segment's gross profit increased by 2.0% to $20.1 million in Q3 2025, driven by higher revenue volume and lower employee-related costs [175]. - Consolidated total gross profit decreased by 12.5% to $194.0 million in Q3 2025, while year-to-date gross profit increased by 2.3% to $656.0 million [180]. - Total SG&A expenses decreased by 11.2% to $194.4 million, reflecting effective expense management and integration efforts [152]. - SG&A expenses for ETM decreased by 9.2% to $87.6 million in Q3 2025, primarily due to lower employee-related costs [180]. - The SET segment's SG&A expenses decreased by 15.3% to $57.6 million in Q3 2025, attributed to expense management actions [181]. - The Education segment's SG&A expenses increased by 6.3% to $24.5 million in Q3 2025, reflecting costs to support revenue growth [182]. - The company reported a goodwill impairment charge of $102.0 million in Q3 2025, significantly impacting earnings from operations [149]. - ETM reported a profit of $9.1 million in Q3 2025, a decrease of 48.9% compared to $18.0 million in Q3 2024 [186]. Tax and Cash Flow - Income tax expense for Q3 2025 was $46.4 million, compared to a tax benefit of $2.6 million in Q3 2024, primarily due to valuation allowances and impairment charges [154]. - The company's cash, cash equivalents, and restricted cash totaled $35.4 million at the end of Q3 2025, down from $45.6 million at year-end 2024 [196]. - The company believes its cash flow from operations and available liquidity will be sufficient to meet anticipated cash requirements while maintaining adequate liquidity for normal operations [208]. Debt and Liquidity - The debt-to-total capital ratio improved to 9.1% at the end of Q3 2025, compared to 16.2% at year-end 2024, indicating a stronger capital structure [201]. - As of the end of Q3 2025, the company had $150.0 million available on its revolving credit facility and $89.0 million available on its securitization facility [207]. - The securitization facility had $118.4 million in long-term borrowings and $42.6 million in standby letters of credit related to workers' compensation [207]. - The company has additional unsecured, uncommitted short-term local credit facilities totaling $3.1 million, with no borrowings under these facilities as of Q3 2025 [209]. Risk Management - The company entered into a $50.0 million 12-month interest rate swap and a $50.0 million 18-month interest rate swap, locking in fixed rates of 4.772% and 4.468% respectively [218]. - The company has not identified specific plans to repatriate a majority of its international cash balances as of Q3 2025 [206]. - The company continues to provide MSP, RPO, and Functional Service Provider solutions in the EMEA region following the sale of its EMEA staffing operations in Q1 2024 [206]. - The company monitors the credit ratings of its banking partners regularly, assessing the risk of banks not honoring commitments as insignificant [210]. - There have been no significant changes to the company's exposure management and procedures regarding market risk, foreign currency risk, and interest rate risk during Q3 2025 [216]. - The company is exposed to foreign currency risk primarily related to its foreign subsidiaries, with local cash flows generally unaffected by changes in foreign currency rates [217].

Core Insights - Kelly Services reported quarterly earnings of $0.18 per share, missing the Zacks Consensus Estimate of $0.42 per share, and down from $0.21 per share a year ago, representing an earnings surprise of -57.14% [1] - The company posted revenues of $935 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 3.89%, and down from $1.04 billion year-over-year [2] - The stock has underperformed, losing about 18.2% since the beginning of the year compared to the S&P 500's gain of 15.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.78 on revenues of $1.16 billion, and for the current fiscal year, it is $2.15 on revenues of $4.4 billion [7] - The estimate revisions trend for Kelly Services was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Staffing Firms industry, to which Kelly Services belongs, is currently in the bottom 19% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Korn/Ferry, is expected to report quarterly earnings of $1.30 per share, reflecting a year-over-year change of +7.4%, with revenues expected to be $702.98 million, up 4.2% from the previous year [9]

Financial Performance - Q3 2025 revenue was $935.0 million, a 9.9% decrease year-over-year, primarily due to lower demand in ETM and SET segments, with an underlying revenue decline of approximately 2% after excluding discrete impacts [4][6]. - Operating loss for Q3 2025 was $102.1 million, compared to earnings of $2.6 million in Q3 2024, reflecting non-cash goodwill impairment charges of $102.0 million [5][6]. - Adjusted EBITDA for Q3 2025 was $16.5 million, a decrease of 36.7% year-over-year, with an adjusted EBITDA margin of 1.8%, down 70 basis points [5][6]. - For the 39-week period ended September 28, 2025, revenue was $3.2 billion, a 1.9% increase compared to the same period in 2024, primarily due to the May 2024 acquisition of MRP [7][8]. - The company expects a total year-over-year revenue decline of 12% to 14% for fiscal 2025, with an underlying revenue decline of 4% to 6% [12]. - Adjusted earnings per share for Q3 2025 were $0.18, down from $0.21 in Q3 2024 [7]. - Total revenue from services for the third quarter of 2025 was $935.0 million, a decrease from $1,038.1 million in the third quarter of 2024, representing a decline of approximately 10% [33]. - The Enterprise Talent Management segment generated $487.9 million in revenue for Q3 2025, down from $561.6 million in Q3 2024, reflecting a decrease of about 13% [33]. - The Science, Engineering & Technology segment reported $304.9 million in revenue for Q3 2025, down from $335.0 million in Q3 2024, a decrease of about 9% [33]. - The company reported a goodwill impairment charge of $102.0 million in Q3 2025, significantly impacting net earnings [31]. - Net loss for 2025 was $125.3 million, compared to a net earnings of $31.2 million in 2024, representing a decline of $156.5 million [19]. - Basic earnings per share for 2025 was $(3.56), a decrease of $(4.42) from $0.86 in 2024 [19]. Cash Flow and Assets - Year-to-date free cash flow improved to $87.2 million in 2025 from $15.8 million in 2024 [28]. - Cash flows from operating activities for the 39 weeks ended September 28, 2025, were $94.0 million, compared to $11.9 million in the same period of 2024 [31]. - The company had a net cash used in financing activities of $131.4 million in 2025, contrasting with a net cash inflow of $217.3 million in 2024 [31]. - Cash, cash equivalents, and restricted cash at the end of the period were $35.4 million, down from $40.4 million at the end of the same period in 2024 [31]. - Total current assets decreased to $1,279.8 million in September 2025 from $1,365.5 million in December 2024 [28]. - Total assets decreased to $2,393.1 million in September 2025 from $2,632.3 million in December 2024 [28]. - Working capital decreased to $473.3 million in September 2025 from $539.0 million in December 2024 [28]. Dividends and Share Repurchases - The company declared a quarterly cash dividend of $0.075 per share, payable on December 3, 2025 [9]. - The company anticipates being active with Class A share repurchases in Q4 2025, indicating confidence in its strategy [6]. Operational Efficiency and Cost Management - Adjusted SG&A expenses declined by 9.7% in Q3 2025, reflecting expense optimization initiatives [6]. - The company’s adjusted earnings from operations for Q3 2025 were $4.3 million, compared to $11.7 million in Q3 2024, reflecting a decline of approximately 63% [40]. - Total Adjusted EBITDA for Q3 2025 was $16.5 million, a decline from $26.2 million in Q3 2024, representing a decrease of about 37.0% [44]. - The Adjusted EBITDA margin for Q3 2025 was 1.8%, down from 2.5% in Q3 2024 [44]. - Integration and realignment costs for Q3 2025 totaled $3.5 million, reflecting ongoing efforts to consolidate operations and align processes [53]. - The company plans to continue focusing on market expansion and integration of recent acquisitions to improve operational efficiency and financial performance [49]. Tax and Impairment Charges - The effective income tax rate for Q3 2025 was -44.8%, compared to 140.8% in Q3 2024, reflecting significant changes in tax expense due to goodwill impairment [17]. - The valuation allowance on deferred tax assets in Q3 2025 was $69.7 million, established due to cumulative losses in recent years [52]. - The company incurred a goodwill impairment charge of $83.6 million in Q3 2025, attributed to reduced demand and integration challenges from recent acquisitions [52]. Segment Performance - Revenue from services in the Science, Engineering & Technology segment increased by 13.5% to $944.6 million in 2025 from $832.3 million in 2024 [26]. - The Education segment reported a revenue increase of 5.0%, reaching $717.6 million in 2025 compared to $683.1 million in 2024 [26].

Core Insights - Kelly Services reported a revenue of $935.0 million for Q3 2025, reflecting a 9.9% decrease compared to Q3 2024, primarily due to lower demand in the ETM and SET segments, partially offset by a 0.9% growth in the Education segment [3][8][9] - The company experienced an operating loss of $102.1 million in Q3 2025, a significant decline from earnings of $2.6 million in Q3 2024, largely attributed to non-cash goodwill impairment charges [4][6] - Adjusted EBITDA for Q3 2025 was $16.5 million, down 36.7% year-over-year, with an adjusted EBITDA margin of 1.8%, a decrease of 70 basis points [4][8] Financial Performance - Revenue for the 39-week period ended September 28, 2025, was $3.2 billion, a 1.9% increase compared to the same period in 2024, primarily due to the acquisition of MRP [9][10] - The operating loss for the first nine months of 2025 was $69.1 million, compared to earnings of $41.6 million in the same period of 2024 [10][12] - The company reported a net loss of $150.1 million for Q3 2025, compared to a net income of $0.8 million in Q3 2024 [20][22] Segment Analysis - In Q3 2025, the Enterprise Talent Management segment generated $487.9 million in revenue, down 13.1% from Q3 2024, while the Science, Engineering & Technology segment saw a 9.0% decline to $304.9 million [27][28] - The Education segment reported a slight revenue increase of 0.9% to $143.3 million, indicating resilience amidst overall declines in other segments [27][28] - Adjusted SG&A expenses decreased by 9.7% in Q3 2025, reflecting ongoing expense optimization initiatives [8] Tax and Earnings Per Share - Income tax expense for Q3 2025 was $46.4 million, compared to a tax benefit of $2.6 million in Q3 2024, influenced by non-cash goodwill impairment charges [5][11] - Loss per share for Q3 2025 was $4.26, including non-cash goodwill impairment charges of $2.37 per share, compared to earnings per share of $0.02 in Q3 2024 [6][12] Future Outlook - The company anticipates no significant changes in macroeconomic conditions for Q4 2025 and expects a positive resolution to the federal government shutdown [14] - Kelly Services declared a quarterly cash dividend of $0.075 per share, payable on December 3, 2025, reflecting confidence in its strategy [14]

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Industry Overview - The Staffing Firms industry is expected to gradually return to pre-pandemic levels, enabling companies to distribute regular dividends [1] - The industry encompasses a wide range of human resources and workforce solutions, including recruitment, payroll administration, and organizational planning [2] Market Trends - The industry is characterized by stable demand, with revenues and cash flows anticipated to recover to pre-pandemic levels [3] - The adoption of remote work and hybrid models has surged, prompting staffing agencies to focus on flexible staffing solutions [4] - Technological advancements are being integrated into staffing operations, enhancing efficiency and service quality [5] Performance Metrics - The Zacks Staffing Firms industry currently holds a Zacks Industry Rank of 219, placing it in the bottom 10% of 243 Zacks industries [6] - Over the past year, the industry has underperformed the S&P 500, declining by 35.6% compared to the S&P 500's growth of 19% [8] - The industry is trading at an EV-to-EBITDA ratio of 5.77X, significantly lower than the S&P 500's 18.87X and the sector's 10.93X [11] Company Highlights - **Kelly Services (KELYA)**: The company is experiencing growth driven by the acquisition of Motion Recruitment Partners, with a 5.3% year-over-year organic growth in its education business [15][16] - **Heidrick & Struggles International (HSII)**: The company has shown strong performance due to its focus on executive search and consulting, with a 50.9% increase in shares over the past six months [20][22] - **DLH Holdings (DLHC)**: The company is investing in tech integration and advanced solutions in cybersecurity, with shares increasing by 56.4% in the past six months [25][27]

Core Insights - KellyOCG has been recognized as a Leader in Everest Group's 2025 PEAK Matrix for both Contingent Workforce Management (CWM) / Managed Service Provider (MSP) and Services Procurement / Statement of Work (SOW), and has also been named a Star Performer in the SOW category [1][3] Company Developments - KellyOCG has made significant investments in contingent workforce management and services procurement solutions following its acquisition of Motion Recruitment Partners, integrating resources from KellyOCG and Kelly Professional & Industrial with capabilities from Sevenstep into a new Enterprise Talent Management function [2][3] - The company has strengthened its presence in the CWM market through its Enterprise Talent Management model and the acquisition of Motion Recruitment Partners, including Sevenstep [3] Technology and Innovation - KellyOCG's technology stack provides detailed analytics, actionable insights, and streamlined access to talent, suppliers, and services, which gives clients a competitive advantage in the talent market [2] - The company is enhancing its SOW capabilities with a modular framework that integrates Helix UX, Helix Analytics, Globality, and TDX to deliver end-to-end sourcing, compliance, and supplier visibility [3] Market Assessment - Everest Group's PEAK Matrix provides an objective, data-driven assessment of global CWM/MSP and SOW providers based on their market impact, vision, and capability, with providers ranked as Leaders, Major Contenders, or Aspirants [3]