Financial Performance - Q3 2025 revenue was $935.0 million, a 9.9% decrease year-over-year, primarily due to lower demand in the ETM and SET segments [4]. - 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]. - 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 [6]. - For the first nine months of 2025, revenue was $3.2 billion, a 1.9% increase compared to the same period in 2024, primarily due to the acquisition of MRP [7]. - 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]. - Adjusted EBITDA margin for the first nine months of 2025 was 2.8%, a decrease of 40 basis points compared to the prior year [8]. - The company recorded a goodwill impairment charge of $102.0 million in 2025, with no such charge in 2024 [26]. - For the 39 weeks ended September 28, 2025, net earnings were a loss of $125.3 million compared to a profit of $31.2 million in the same period of 2024 [31]. - In Q3 2025, net earnings were $(150.1) million, compared to $0.8 million in Q3 2024, reflecting a significant decline [42]. - Adjusted net earnings for Q3 2025 were $6.5 million, down from $7.7 million in Q3 2024, indicating a decrease of 15.6% year-over-year [42]. - Adjusted EBITDA for Q3 2025 was $16.5 million, a decrease from $26.2 million in Q3 2024, representing a decline of 37.0% [44]. - The adjusted EBITDA margin for Q3 2025 was 1.8%, down from 2.5% in Q3 2024, showing a contraction in profitability [44]. Cash Flow and Dividends - Year-to-date free cash flow for 2025 was $87.2 million, significantly up from $15.8 million in 2024 [28]. - A quarterly cash dividend of $0.075 per share was declared, payable on December 3, 2025 [9]. - The company generated net cash from operating activities of $94.0 million in 2025, a significant increase from $11.9 million in 2024 [31]. - Free cash flow for the year-to-date 2025 was $87.2 million, significantly higher than $2.8 million in the same period of 2024 [47]. Revenue Segments - Revenue from services for 2025 was $3,201.7 million, an increase of 1.9% from $3,140.7 million in 2024 [19]. - Gross profit for 2025 reached $656.0 million, up 2.3% from $641.1 million in 2024 [19]. - Revenue from the Science, Engineering & Technology segment increased by 13.5% to $944.6 million in 2025, compared to $832.3 million in 2024 [26]. - The Education segment reported a revenue increase of 5.0% to $717.6 million in 2025, up from $683.1 million in 2024 [26]. - Total segment revenue for Enterprise Talent Management in 2025 was $1,542.1 million, down from $1,626.9 million in 2024, reflecting a decrease of approximately 5.2% [37]. - 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]. - Year-to-date revenue from services for 2025 was $3,201.7 million, compared to $3,140.7 million in 2024, indicating a growth of about 1.9% [37]. Assets and Liabilities - Total current assets decreased to $1,279.8 million in September 2025 from $1,365.5 million in December 2024 [28]. - Total liabilities decreased to $1,882.0 million in September 2025 from $2,107.7 million in December 2024 [28]. - The company had cash, cash equivalents, and restricted cash of $35.4 million at the end of the period, down from $40.4 million at the end of the previous year [31]. Impairment and Charges - The company incurred a goodwill impairment charge of $102.0 million in Q3 2025, primarily due to reduced demand and integration costs from acquisitions [52]. - Integration and realignment costs in Q3 2025 totaled $3.5 million, reflecting ongoing efforts to consolidate operations and align processes [53]. - The company reported a valuation allowance on deferred tax assets of $69.7 million in Q3 2025, due to cumulative losses in recent years [52]. - Restructuring charges in 2024 include $3.3 million for severance and $3.1 million for transformation execution costs [56]. - A $0.2 million adjustment to restructuring charges was made in Q3 2024 [56]. - The asset impairment charge in Q2 2024 was related to right-of-use assets for the leased headquarters facility [57]. - The sale of Ayers Group occurred in Q2 2024, impacting the gain/loss on sale of assets [57]. Strategic Plans - The company plans to be active with Class A share repurchases in Q4 2025, reflecting confidence in its strategy [6]. - The company is addressing near-term opportunities to enhance execution and agility while positioning for future growth [3]. - The company plans to continue focusing on integrating recent acquisitions and optimizing operational efficiency to improve future performance [49]. - Business unit adjusted EBITDA for the Science, Engineering & Technology segment was $9.1 million in Q3 2025, compared to a loss of $(82.4) million in the same period of 2024 [45].
Kelly Services(KELYB) - 2026 Q3 - Quarterly Results