Core Insights - Kelly Services, Inc. reported an earnings per share (EPS) of $0.16, which was below the estimated EPS of $0.43, indicating weaker profitability than expected [2][5] - The company's revenue for the period was approximately $1.05 billion, slightly missing the forecast of $1.06 billion, suggesting challenges in meeting sales targets [3][5] Financial Metrics - The price-to-sales (P/S) ratio is 0.13, indicating that investors are paying 13 cents for every dollar of the company's sales, reflecting cautious market sentiment [3] - The debt-to-equity ratio stands at 0.16, suggesting a relatively low level of debt compared to equity [3] - The current ratio is 1.59, indicating a good level of liquidity to cover short-term liabilities [4] - The enterprise value to operating cash flow (EV/OCF) ratio is 6.25, showing that the company's operating cash flow can cover its enterprise value multiple times, providing financial stability [4]

Revenue and Profitability - Revenue from services in 2025 was $4,250.9 million, a decrease of 1.9% compared to $4,331.8 million in 2024[156]. - Gross profit decreased by 3.4% to $853.0 million, with a gross profit rate of 20.1%, down 30 basis points from 2024[156][162]. - Loss from operations in 2025 totaled $69.8 million, significantly higher than a loss of $15.1 million in 2024, primarily due to increased impairment charges and lower revenue[156][165]. - Consolidated total gross profit decreased to $853.0 million in 2025, down 3.4% from $882.6 million in 2024, and down 8.2% from $961.4 million in 2023[178]. - Enterprise Talent Management gross profit decreased to $392.8 million in 2025, a decline of 11.7% from $444.9 million in 2024, and 4.5% from $465.7 million in 2023[178]. - Science, Engineering & Technology gross profit increased to $313.2 million in 2025, up 5.1% from $297.9 million in 2024, and up 20.7% from $246.9 million in 2023[178]. - Education segment gross profit increased to $147.0 million in 2025, a rise of 5.2% from $139.8 million in 2024, and 8.6% from $128.7 million in 2023[178]. Expenses and Cost Management - Total SG&A expenses increased by 0.9% to $825.9 million, primarily due to the acquisition of MRP, while excluding the acquisition, SG&A expenses decreased by 4.8%[156][163]. - SG&A expenses (excluding depreciation and amortization) totaled $774.9 million in 2025, a slight increase of 1.0% from $766.9 million in 2024, but down 14.3% from $894.6 million in 2023[186]. - Enterprise Talent Management SG&A expenses decreased to $373.0 million in 2025, down 3.3% from $385.9 million in 2024, and down 10.7% from $432.2 million in 2023[186]. - Science, Engineering & Technology SG&A expenses increased to $247.1 million in 2025, up 9.0% from $226.7 million in 2024, and up 22.7% from $184.8 million in 2023[186]. - Corporate expenses decreased to $53.8 million in 2025, down 7.9% from $58.4 million in 2024, and down 7.6% from $63.2 million in 2023[186]. Cash Flow and Financial Position - Cash, cash equivalents, and restricted cash totaled $37.7 million at year-end 2025, down from $45.6 million at year-end 2024[205]. - Net cash generated from operating activities increased to $122.6 million in 2025, compared to $26.9 million in 2024 and $76.7 million in 2023[206]. - The debt-to-total capital ratio improved from 16.2% at year-end 2024 to 9.4% at year-end 2025, indicating a stronger capital structure[216]. - As of year-end 2025, the company had $150.0 million available on its revolving credit facility and $105.5 million on its securitization facility[221]. - The company expects to meet cash requirements through operations, available cash, and credit facilities, with potential additional funding from bank facilities or asset sales[218]. Goodwill and Impairment - The goodwill impairment charge in 2025 was $102.0 million, compared to $72.8 million in 2024, driven by reduced demand and integration costs[156][164]. - As of year-end 2025, total goodwill amounted to $202.1 million, while at year-end 2024, it was $304.2 million[245]. - The company recorded an impairment charge of $72.8 million for Softworld's goodwill in 2024, with a remaining goodwill balance of $38.5 million as of year-end 2024[244]. - The estimated fair value of each reporting unit tested in 2025 exceeded its carrying value by more than 10%, indicating no impairment of goodwill[242]. - The company assessed that an increase in the discount rate of 100 basis points or a decrease of 100 basis points in revenue growth rate assumptions would not result in goodwill impairment[243]. Strategic Initiatives and Leadership - The company is focused on cost optimization initiatives and enhancing operational capabilities to improve profitability as market conditions stabilize[150][151]. - The hiring of Chris Layden as CEO in September 2025 is aimed at strengthening competitive positioning and transforming technology processes[149]. Segment Performance - Revenue from the Enterprise Talent Management segment decreased by 8.7% to $2,005.5 million, while revenue from the Science, Engineering & Technology segment increased by 6.4% to $1,240.4 million[170]. - The Education segment's revenue increased by 3.9% to $1,010.7 million, driven by higher fill rates and bill rates[170][173]. - Excluding the impact of acquisitions, revenue from staffing services decreased by 11.7% and revenue from outcome-based services decreased by 12.1%[171][172]. Legal and Compliance - The company routinely assesses legal proceedings and claims, with potential exposure impacting the required accruals for litigation costs[247]. - The gross accrual for litigation costs was $2.8 million at year-end 2025, up from $1.5 million at year-end 2024[247].

Revenue Performance - In 2025, revenue from services decreased by 1.9% year-over-year to $4,250.9 million, with a significant decline in the Enterprise Talent Management (ETM) segment by 8.7%[161] - Revenue from staffing services decreased by 11.7% in the ETM segment, reflecting lower demand from large customers[171] - The Science, Engineering & Technology (SET) segment saw a revenue increase of 6.4% to $1,240.4 million, primarily due to the acquisition of MRP[170] - The Education segment's revenue increased by 3.9% to $1,010.7 million, driven by higher fill rates and bill rates[170] Profitability - Gross profit decreased by 3.4% to $853.0 million, with a gross profit rate of 20.1%, down 30 basis points from the previous year[156][162] - Gross profit for the Enterprise Talent Management (ETM) segment decreased to $392.8 million in 2025, down 11.7% from $444.9 million in 2024, and down 4.5% from $465.7 million in 2023[178] - Science, Engineering & Technology (SET) gross profit increased to $313.2 million in 2025, a 5.1% increase from $297.9 million in 2024, driven by the acquisition of MRP[180] - Education segment gross profit rose to $147.0 million in 2025, up 5.2% from $139.8 million in 2024, attributed to higher revenue volume[181] - Consolidated total gross profit decreased to $853.0 million in 2025, down 3.4% from $882.6 million in 2024, and down 8.2% from $961.4 million in 2023[186] Expenses - Total selling, general and administrative (SG&A) expenses increased by 0.9% to $825.9 million, primarily due to the acquisition of Motion Recruitment Partners (MRP)[163] - ETM segment SG&A expenses decreased to $373.0 million in 2025, a 3.3% decline from $385.9 million in 2024, primarily due to lower salary-related costs[187] - SET segment SG&A expenses increased to $247.1 million in 2025, a 9.0% increase from $226.7 million in 2024, mainly due to higher employee-related costs from the MRP acquisition[188] Operational Losses - Loss from operations in 2025 totaled $69.8 million, compared to a loss of $15.1 million in 2024, primarily due to increased integration and restructuring costs[165] - The goodwill impairment charge for 2025 was $102.0 million, significantly higher than the $72.8 million charge in 2024, driven by reduced demand and integration costs[164] Tax and Cash Flow - Income tax expense in 2025 was $175.3 million, compared to a tax benefit of $21.3 million in 2024, impacted by valuation allowances against deferred tax assets[167] - The company generated $122.6 million of net cash from operating activities in 2025, a significant increase from $26.9 million in 2024[206] Goodwill and Impairment - As of year-end 2025, total goodwill amounted to $202.1 million, while it was $304.2 million at year-end 2024[245] - The company recorded a goodwill impairment charge of $72.8 million for the Softworld reporting unit in 2024, with a remaining goodwill balance of $38.5 million[244] - The estimated fair value of each reporting unit tested in 2025 exceeded its carrying value by more than 10%, indicating no impairment of goodwill[242] - The company assessed that there were no indications of impairment for the PTS and Education reporting units, requiring no further testing[244] Liquidity and Capital Structure - Cash, cash equivalents, and restricted cash totaled $37.7 million at year-end 2025, down from $45.6 million at year-end 2024[205] - The debt-to-total capital ratio improved from 16.2% at year-end 2024 to 9.4% at year-end 2025, indicating a stronger capital structure[216] - As of year-end 2025, the company had $150.0 million available on its revolving credit facility and $105.5 million on its securitization facility[221] - The company maintains a strong liquidity position, having met all debt covenants related to its credit facilities throughout 2025[222] Future Outlook - Structural cost actions and portfolio reshaping are expected to support continued improvement in Kelly's growth prospects and financial profile through 2026 and beyond[151] - Future revenue and profit margin expectations are critical, as significant changes could lead to future goodwill impairment[241]

分组1 - Kelly Services reported quarterly earnings of $0.16 per share, missing the Zacks Consensus Estimate of $0.45 per share, and down from $0.82 per share a year ago, representing an earnings surprise of -64.18% [1] - The company posted revenues of $1.05 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 1.49%, but down from $1.19 billion year-over-year [2] - Over the last four quarters, Kelly Services has not surpassed consensus EPS estimates, although it has topped consensus revenue estimates twice [2] 分组2 - The stock has gained about 12.6% since the beginning of the year, outperforming the S&P 500's gain of 1.4% [3] - The current consensus EPS estimate for the coming quarter is $0.42 on $1.06 billion in revenues, and for the current fiscal year, it is $1.74 on $4.19 billion in revenues [7] - The Zacks Industry Rank indicates that the Staffing Firms industry is currently in the bottom 27% of over 250 Zacks industries, which may impact stock performance [8]

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Exhibit 99.1 Kelly Reports Fourth-Quarter and Full-Year 2025 Earnings TROY, Mich. (February 12, 2026) – Kelly (Nasdaq: KELYA, KELYB), a leading specialty talent solutions provider, today announced fourth- quarter and full-year 2025 earnings. Chris Layden, chief executive officer, said, "In the fourth quarter, we capitalized on positive trends in each of our segments and delivered results that reflect our progress on stabilizing Kelly's performance. We also completed the first significant milestone in our te ...

Exhibit 99.1 Kelly Reports Fourth-Quarter and Full-Year 2025 Earnings TROY, Mich. (February 12, 2026) – Kelly (Nasdaq: KELYA, KELYB), a leading specialty talent solutions provider, today announced fourth- quarter and full-year 2025 earnings. Chris Layden, chief executive officer, said, "In the fourth quarter, we capitalized on positive trends in each of our segments and delivered results that reflect our progress on stabilizing Kelly's performance. We also completed the first significant milestone in our te ...

Core Viewpoint - Kelly Services reported a decline in revenue and operating performance for the fourth quarter and full year of 2025, but the company is optimistic about future growth and efficiency improvements in 2026 [2][9]. Financial Performance - Fourth-quarter revenue was $1.1 billion, an 11.9% decrease from the same quarter in 2024, primarily due to lower demand in the ETM and SET segments, partially offset by a 1.3% growth in the Education segment [3][19]. - The operating loss for the fourth quarter was $0.7 million, a significant improvement from a loss of $56.7 million in Q4 2024 [4][19]. - Adjusted earnings for Q4 2025 were $8.3 million, down from $29.2 million in Q4 2024, with adjusted EBITDA of $21.0 million, a 51.7% decline year-over-year [4][20]. - For the full year 2025, revenue totaled $4.3 billion, a 1.9% decrease compared to 2024, with an organic decline of 6.2% when excluding the impact of acquisitions [7][9]. Tax and Earnings - The income tax expense for Q4 2025 was $126.2 million, compared to a tax benefit of $23.8 million in Q4 2024, reflecting a valuation allowance increase due to cumulative losses [5][10]. - Loss per share for Q4 2025 was $3.69, compared to a loss of $0.90 in Q4 2024, while adjusted earnings per share were $0.16, down from $0.79 [6][11]. Cash Flow and Shareholder Returns - The company generated a full-year free cash flow of $114 million, a sixfold increase from the previous year, and completed $10 million in Class A share repurchases during Q4 2025 [9][12]. - A quarterly cash dividend of $0.075 per share was declared, payable on March 11, 2026 [12]. Future Outlook - The company expects Q1 2026 to see a revenue decline of 11% to 13% year-over-year, with an adjusted EBITDA margin of approximately 1.5% [15]. - For the second half of 2026, Kelly anticipates a return to organic revenue growth and adjusted EBITDA margin expansion, assuming no new material impacts [9][15].

Core Insights - Kelly Services has appointed Patrick McCall as chief growth officer, effective February 16, 2026, to enhance organic growth and client capabilities [1][2] Company Overview - Kelly Services, Inc. is a global provider of specialty talent solutions, helping companies recruit and manage skilled workers while assisting job seekers in finding employment [6] - The company has a revenue of $4.3 billion in 2024 and connects over 400,000 people with work annually [6] Leadership Appointment - Patrick McCall brings 30 years of sales and operations experience, having previously served as chief growth officer at AMN Healthcare, where he stabilized the business post-pandemic [2][3] - McCall has a strong background in workforce solutions, having held senior roles at Randstad, where he managed a portfolio exceeding 3 billion euros [3] Strategic Focus - McCall's responsibilities will include developing and executing Kelly's growth strategy, managing large strategic accounts, acquiring new clients, and creating a client-centric go-to-market model [4]

Core Viewpoint - Kelly Services, a leading global specialty talent solutions provider, is set to release its fourth-quarter and full-year earnings on February 12, 2026, along with a financial presentation and a live webcast for financial analysts to discuss the results [1]. Company Overview - Kelly Services, Inc. (Nasdaq: KELYA, KELYB) specializes in recruiting and managing skilled workers, connecting over 400,000 people with work annually [3]. - The company has been a pioneer in the staffing industry since 1946 and operates in various sectors including science, engineering, technology, education, manufacturing, retail, finance, and energy [3]. - In 2024, Kelly Services reported a revenue of $4.3 billion [3]. Earnings Release Details - The earnings release will occur before the market opens on February 12, 2026, and will be followed by a conference call at 9 a.m. ET [1]. - The financial presentation and the live webcast will be available on the company's public website under the Investor Relations section [2]. - A replay of the webcast will be accessible within one hour after the event concludes [2].