Kforce(KFRC) - 2025 Q1 - Quarterly Results

Financial Performance - Revenue for Q1 2025 was $330.0 million, a decrease of 4.0% sequentially and 6.2% year over year [3]. - Diluted earnings per share for Q1 2025 was $0.45, a decrease of 25.0% sequentially and 22.4% year over year [3]. - Gross profit margins for Q1 2025 were 26.7%, down 30 basis points sequentially and 40 basis points year over year [3]. - Operating margins for Q1 2025 were 3.5%, a decrease of 100 basis points sequentially and year over year [3]. - Kforce's net income for Q1 2025 was $8,145 thousand, a decrease from $10,987 thousand in Q1 2024 [22]. Expenses and Cash Flow - SG&A expenses as a percentage of revenue were 22.8% for Q1 2025, an increase of 80 basis points sequentially and 60 basis points year over year [3]. - Kforce reported a Free Cash Flow of $(3,900) thousand for Q1 2025, a significant decrease from $11,294 thousand in Q1 2024 [19]. - Adjusted EBITDA for Q1 2025 was $16,751 thousand, down from $20,560 thousand in Q1 2024 [22]. - Capital expenditures for Q1 2025 were $4,149 thousand, up from $1,875 thousand in Q1 2024 [19]. Revenue Breakdown - Technology Flex revenue decreased 3.7% sequentially and 5.0% year over year [3]. - Total Flex revenue experienced a year-over-year decline of 6.4% in Q1 2025 compared to Q1 2024 [17]. - Technology Flex revenue decreased by 5.0% year-over-year in Q1 2025, while FA Flex revenue saw a larger decline of 23.2% [17]. - Year-over-year growth rates for Total Flex revenue were negative across all quarters in 2025 compared to 2024 [17]. Shareholder Returns and Guidance - The company returned $28.3 million to shareholders through share repurchases and dividends in Q1 2025 [3]. - The company repurchased $21,066 thousand of common stock in Q1 2025, compared to $2,848 thousand in Q1 2024 [19]. - Guidance for Q2 2025 includes revenue estimates of $332 million to $340 million and earnings per share of $0.57 to $0.65 [6]. Operational Insights - The company anticipates 64 billing days in Q2 2025, compared to 63 in Q1 2025 [4]. - The number of billing days for Q1 2025 was 63, compared to 64 in Q1 2024, impacting revenue calculations [16]. - Kforce's management emphasizes the importance of non-GAAP measures like Free Cash Flow and Adjusted EBITDA for evaluating operational performance [18]. - The company maintains a strong backlog of strategically imperative technology investments despite macroeconomic uncertainties [2].