Kforce(US:KFRC)2026-02-02 21:02Revenue Performance - Fourth quarter 2025 revenue was $332.0 million, a decrease of 0.2% sequentially and a decrease of 3.4% year over year[5]. - Full year 2025 revenue was $1.33 billion, a decrease of 5.4% year over year[5]. - Total revenue for Q4 2025 was $332,018,000, a decrease of 0.2% from Q3 2025 and a decrease of 3.4% from Q4 2024[20]. - Flex revenue in Q4 2025 was $326,093,000, down from $326,263,000 in Q3 2025 and $337,104,000 in Q4 2024, with a Flex GP margin of 25.8%[20]. - Year-over-year total Flex revenue decreased by 5.3% in Q4 2025 compared to Q4 2024[24]. Profitability Metrics - Gross profit margin for the fourth quarter was 27.2%, down 50 basis points sequentially but up 20 basis points year over year[5]. - Diluted earnings per share for the fourth quarter were $0.30, with adjusted diluted earnings per share at $0.43, a decrease of 31.7% sequentially and 28.3% year over year[5]. - Adjusted EBITDA for Q4 2025 was $16,748,000, a decrease of 14.3% from $19,407,000 in Q3 2025 and a decrease of 18.5% from $20,565,000 in Q4 2024[31]. - Adjusted EBITDA for the year 2025 totaled $72,790,000, a decrease of 18.8% from $89,687,000 in 2024[32]. - Net income for the year ended December 31, 2025, was $34,825,000, down 30.9% from $50,414,000 in 2024[32]. Expenses and Costs - SG&A expenses as a percentage of revenue for the fourth quarter were 24.2%, an increase of 140 basis points sequentially and 220 basis points year over year[5]. - Selling, general and administrative expenses for Q4 2025 were $80,329,000, resulting in an operating margin of 2.6%[28]. - Free cash flow for the year ended December 31, 2025, was $46,805,000, a decrease from $79,301,000 in 2024[26]. - Total depreciation and amortization for 2025 was $5,548,000, compared to $5,922,000 in 2024, reflecting a decrease of 6.3%[32]. - Stock-based compensation expense for the year 2025 was $13,742,000, a slight decrease of 2.2% from $14,044,000 in 2024[32]. - Interest expense, net, increased to $3,122,000 in 2025, up 49% from $2,097,000 in 2024[32]. - Income tax expense for 2025 was $12,120,000, down 29.7% from $17,210,000 in 2024[32]. - Organizational realignment activities incurred an expense of $1,200,000 in 2025, with no such expense reported in 2024[32]. - Other non-recurring expenses amounted to $2,233,000 in 2025, with no comparable expenses in 2024[32]. Shareholder Returns - The Board of Directors approved a quarterly dividend increase to $1.60 per share, marking the seventh consecutive annual increase[6]. - The company returned $76.0 million in capital to shareholders through share repurchases and dividends during 2025, representing over 100% of operating cash flows[10]. Future Outlook - First quarter 2026 guidance estimates revenue between $324 million and $332 million, with earnings per share projected between $0.37 and $0.45[10]. - The implementation of Workday as a future state enterprise cloud application is expected to be transformational for the company[2]. - The company is focused on streamlining operating costs through various initiatives, including the write-off of previously capitalized software[31].