Financial Performance - Group net fees decreased by 11% to £972.4 million[10], while operating profit decreased by 56% to £45.6 million[10] - Basic Earnings Per Share (EPS) decreased by 67%[49] - The company delivered approximately £35 million per annum of structural cost savings in FY25[10, 66, 69, 113] Regional Performance - Germany's net fees decreased by 10% to £308.9 million[12], representing 32% of the Group's net fees[12] - UK & Ireland's net fees decreased by 15% to £192.2 million[21], accounting for 20% of the Group's net fees[21], with an operating loss of £(5.8) million[21] - Australia & New Zealand's net fees decreased by 13% to £116.2 million[29], contributing 12% to the Group's net fees[29] - Rest of World's net fees decreased by 8% to £355.1 million[35], making up 36% of the Group's net fees[35] Segment Performance - Temp & Contracting net fees decreased by 7%[10], while Perm net fees decreased by 17%[10] - Temp & Contracting accounted for 62% of Group net fees in FY25[111] Operational Efficiency - Consultant headcount was reduced by 14% year-over-year[10, 65], leading to a 5% increase in consultant net fee productivity[10, 67] - The company closed 29 offices as part of operational restructurings[65]

Company Participation in Investor Conferences - Kelly will participate in the Midwest IDEAS Conference in Chicago on August 26, 2025, with management scheduled to present at 8:35 a.m. CT and engage in one-on-one meetings with investors throughout the day [1] - The company will also attend the Gateway Conference in San Francisco on September 3, 2025, with a presentation scheduled for 1:00 p.m. PT and one-on-one meetings with investors [2] - Management will participate in the Barrington Research Fall Virtual Investment Conference on September 16, 2025, focusing on one-on-one meetings with investors [3] - Kelly will take part in the Sidoti Small-Cap Virtual Conference on September 17, 2025, also engaging in one-on-one meetings with investors [4] - The company is scheduled to present at the William Blair Human Capital Services Virtual Conference on September 24, 2025, at 9:30 a.m. CT, followed by one-on-one meetings with investors throughout the afternoon [5] Company Overview - Kelly Services, Inc. is a leading global specialty talent solutions provider, helping companies recruit and manage skilled workers while assisting job seekers in finding employment [6] - The company has a rich history, having invented the staffing industry in 1946, and has become an expert in various industries and markets [6] - Kelly connects over 400,000 people with work annually through its extensive network of suppliers and partners worldwide [6] - The company reported revenue of $4.3 billion in 2024, indicating its significant presence in the talent solutions market [6]

Core Insights - Kelly Engineering has been recognized as a Star Performer and Leader in Everest Group's 2025 US Contingent Staffing PEAK Matrix Assessment, marking its second consecutive year as a Star Performer and fourth consecutive year as a Leader, indicating significant growth in market impact, vision, and strategic investments [1][2][4] Group 1: Recognition and Achievements - Kelly Engineering achieved high rankings due to its diversification in industry coverage and sourcing capabilities for advanced engineering roles, boasting one of the highest organic revenue growth rates in the industry [2][4] - The company has been acknowledged as the fourth-largest engineering staffing firm in the United States by Staffing Industry Analysts (SIA) in 2025 [5] Group 2: Strategic Focus and Capabilities - Kelly Engineering specializes in recruiting skilled engineers across various industries, including semiconductors, industrial automation, automotive, medical devices, aerospace, energy, and chemical manufacturing [6] - The company offers a comprehensive range of services, including flexible statement of work (SOW) solutions called statementworX™, contract staffing, and direct hire services, aimed at efficiently connecting clients with top talent [6][7] Group 3: Assessment Criteria - Everest Group's PEAK Matrix evaluates contingent staffing providers based on seven categories: vision and strategy, delivery of output-based staffing solutions, learning and upskilling solutions, market impact, technology capabilities, equity and inclusion solutions, and future investments [3][4]

Core Insights - HireQuest reported adjusted earnings per share (EPS) of $0.15, exceeding analysts' expectations of $0.12 by 25.0% [1] - GAAP revenue was $7.6 million, slightly below the estimate of $7.66 million, with both revenue and system-wide sales declining by double digits year-over-year [1][5] Financial Performance - Non-GAAP adjusted EPS decreased by 16.7% from $0.18 in Q2 2024 [2] - GAAP revenue fell by 12.0% from $8.7 million in Q2 2024 [2] - Adjusted EBITDA dropped by 18.9% to $3.3 million compared to the prior year [2][6] - System-wide sales decreased by 13.9% to $125.9 million [2][6] - GAAP net income was $1.1 million, down from $2.0 million in Q2 2024 [6] Operational Highlights - SG&A expenses increased by 10.8% to $5.9 million, influenced by $929,000 in transaction costs related to acquisitions [2][7] - Franchise royalties were $7.3 million, down from $8.2 million in the prior-year period [5] - Service revenue dropped by 26% to $354,000, indicating broad-based industry demand weakness [5] Strategic Focus - The company is pursuing targeted acquisitions, optimizing its asset-light franchise structure, and strengthening capital allocation practices [4] - Management described the staffing industry as experiencing "protracted softness," partly due to sustained manufacturing-job losses [8] - The franchise model is highlighted for its ability to maintain profitability even under subdued demand [8] Future Outlook - Management did not provide explicit revenue or profit guidance for the next quarter or full year, focusing instead on cost control and acquisition opportunities [10] - Investors will monitor system-wide sales, acquisition integration, segment-level growth trends, and improvements in the job market [11]

Core Insights - The staffing industry is evolving rapidly due to digital innovation, demographic changes, and the demand for flexible work arrangements, making effective staffing solutions critical for companies [3][4] - Staffing firms are increasingly viewed as growth enablers, helping organizations navigate economic uncertainties and scale for growth [4][5] Industry Overview - The staffing ecosystem has transformed, with organizations seeking strategic partners who understand talent needs and market trends [3] - Technology, including AI-enabled recruitment tools and talent analytics, is becoming standard in staffing strategies, allowing for faster and smarter hiring decisions [3] Investment Opportunities - The staffing sector presents compelling opportunities for investors, with firms like ADP, Korn Ferry, and Barrett Business Services positioned as key players in workforce transformation [5][6] - As hiring accelerates, staffing companies are at the forefront of providing scalable solutions that contribute to economic growth and long-term value creation [5] Company Highlights - **ADP**: A leader in human capital management solutions, ADP reported revenues of $5.1 billion for Q3 fiscal 2025, a 5.7% year-over-year increase, and is focused on expanding its cloud-based HCM and HR outsourcing solutions [8][9] - **Korn Ferry**: Specializes in executive search and workforce transformation, leveraging data-driven insights and AI tools to enhance hiring processes and leadership development [10][11][12] - **Barrett Business Services (BBSI)**: Provides HR outsourcing and management consulting, focusing on personalized client interactions and local market expertise, which supports its sustained growth [13]

Company Leadership Transition - Chris Layden has been appointed as the new president and CEO of Kelly, effective September 2, 2025, succeeding Peter Quigley, who will remain as a strategic advisor and board member until May 2026 [1][4] - Layden brings extensive experience in leading organizations through transformations and driving profitable growth, having previously served as COO of Prolink and held senior roles at ManpowerGroup [2][3] Strategic Vision and Growth - The board of directors expressed confidence in Layden's ability to lead Kelly into its next strategic phase, emphasizing his track record in executing enterprise-scale transformations and commercial excellence [3] - Layden aims to build on Kelly's strong foundation to drive profitable growth and value for customers, employees, and shareholders [4] Company Performance and Future Outlook - Under Quigley's leadership, Kelly significantly increased profitability by shifting towards higher margin and higher growth businesses, improving the company's financial profile to its best position in 25 years [4] - Kelly reported revenue of $4.3 billion in 2024, highlighting its position as a leading global specialty talent solutions provider [5]

Core Viewpoint - Kelly Services reported a mixed financial performance for Q2 2025, with revenue growth driven by acquisitions but organic revenue decline due to reduced demand in certain sectors [3][6][9]. Financial Performance - Q2 2025 revenue reached $1.1 billion, a 4.2% increase year-over-year, primarily due to the acquisition of Motion Recruitment Partners, LLC [3][9]. - On an organic basis, revenue decreased by 3.3%, with a notable decline in demand for U.S. federal government contractors [3][6]. - Operating earnings for Q2 2025 were $22.2 million, up from $12.2 million in Q2 2024, while adjusted earnings were $24.6 million compared to $28.1 million in the prior year [4][5][9]. - Adjusted EBITDA for Q2 2025 was $37.0 million, down 8.7% from the previous year, with an adjusted EBITDA margin of 3.4%, a decrease of 40 basis points [4][9]. Earnings Per Share - Earnings per share (EPS) for Q2 2025 were $0.52, significantly higher than $0.12 in Q2 2024. Adjusted EPS was $0.54, down from $0.71 year-over-year [5][9]. Year-to-Date Performance - For the 26-week period ending June 29, 2025, revenue totaled $2.3 billion, a 7.8% increase compared to the same period in 2024, again driven by the MRP acquisition [6][8]. - Year-to-date operating earnings were $33.0 million, down from $39.0 million in 2024, with adjusted earnings of $46.7 million compared to $51.2 million in the prior year [7][8]. Segment Performance - The Education segment showed growth of 5.6% in Q2 2025, while the Science, Engineering & Technology segment reported a 19.4% increase in revenue [21][22]. - The Enterprise Talent Management segment experienced a revenue decline of 3.9% in Q2 2025 compared to the previous year [21][22]. Dividend Declaration - The board of directors declared a quarterly cash dividend of $0.075 per share, payable on September 3, 2025 [11]. Leadership Transition - Kelly announced the appointment of Nick Zuhlke as the new Chief Accounting Officer, effective August 11, 2025, succeeding Laura Lockhart [13].

Strategic Acquisition - Upwork is acquiring a company to expand its presence in corporate staffing beyond freelancers [1] Industry Focus - The tech industry is observing Upwork's move into broader corporate staffing solutions [1]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $396 million, flat compared to the prior year, near the low end of the outlook range, with a 4% growth contribution from the acquisition of HSP [17][18] - Gross margin decreased to 23.6%, down 280 basis points, primarily due to changes in revenue mix and certain software depreciation now reported in cost of services [18][19] - The company reported a net loss of $200,000 for the quarter, including a noncash intangible asset impairment charge of $200,000 [20] - Adjusted net loss was $2 million, while adjusted EBITDA was $3 million [20] Business Line Data and Key Metrics Changes - PeopleReady revenue declined by 5%, driven by reduced client volumes across most verticals and geographies, but skilled businesses delivered double-digit growth [21][22] - PeopleManagement grew for the second consecutive quarter with revenue up 2%, supported by strong results from the commercial drivers business [22][23] - People Solutions revenue grew by 20%, with HSP contributing 40 percentage points of inorganic growth, offsetting a 20% organic decline [23][24] Market Data and Key Metrics Changes - Improved on-demand trends were noted in California and Florida, indicating growing momentum as the quarter ended [22] - The company is expanding its presence in the energy sector, with ongoing infrastructure investment fueling sustained demand for skilled labor [12][55] Company Strategy and Development Direction - The company is focused on accelerating digital transformation, growing market share in high-growth end markets, and optimizing sales functions to capture demand [8][9] - Strategic partnerships, such as with Omnia Partners, are aimed at unlocking new client acquisition channels and deepening enterprise client relationships [11] - The company has simplified its organizational structure and implemented targeted cost reductions, achieving approximately $90 million in permanent SG&A savings [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive momentum and signs of stabilization, expecting a return to company-wide growth in Q3 [15][26] - The outlook for Q3 includes expected revenue growth of 5% to 11% year-over-year, reflecting current market trends [26] Other Important Information - The company has strategically invested to position itself ahead of secular tailwinds while maintaining a strong balance sheet [10][12] - The digital transformation includes embedding AI-powered job matching and predictive analytics to enhance workforce solutions [14][15] Q&A Session Summary Question: Monthly trends and green shoots - Management noted double-digit growth in skilled businesses and signs of stabilization, with a return to company-wide growth expected in Q3 [32][34] Question: Unsolicited buyout offer from HireQuest - The board rejected the offer, focusing on maximizing shareholder value and positioning the company to take advantage of market drivers [36][37] Question: Sustainability of revenue growth - Management is encouraged by momentum and stabilization, with clients beginning to experience positive trends [41][42] Question: Pricing competition trends - Pay rates increased by 1.2% and bill rates by 1.8%, leading to a slight margin improvement despite ongoing pricing pressure [44][45] Question: Renewable energy business performance - The renewable pipeline remains strong, with multiple new deals signed, and the company is focused on expanding into additional energy end markets [55][57]

Core Insights - Kelly has achieved a unique recognition as the first company to be named both a Leader and Star Performer across all four Everest Group US Contingent Staffing PEAK Matrix Assessments, highlighting its market impact, vision, and capabilities in various talent solutions [1][6] Group 1: Recognition and Achievements - Kelly's President and CEO, Peter Quigley, expressed pride in the company's "clean sweep" of the 2025 US Contingent Staffing PEAK Matrix Assessments, attributing this success to the growth and quality of services post-acquisition of Motion Recruitment Partners [2][6] - The Everest Group's PEAK Matrix evaluates contingent staffing providers based on seven categories, including vision and strategy, delivery of output-based staffing solutions, and technology capabilities [2][3] Group 2: Business and Technology Advancements - Everest Group noted that Kelly has diversified its industry coverage and talent sourcing capabilities, making significant investments in managed services and enhancing its technology stack, including digital staffing capabilities like Kelly Now [3][4] - Kelly Engineering has been recognized for its strong vision in generative AI and analytics, achieving one of the highest organic revenue growth rates in advanced engineering roles [5][6] Group 3: Strategic Growth and Market Position - The combination of Kelly and Motion Recruitment has led to enhanced coverage across targeted industry verticals and significant market traction, with a strong vision for geographic expansion [4][6] - Kelly's investments in AI-driven tools and partnerships with intelligent sourcing platforms have elevated its position in the market, showcasing a robust vision for tech-led delivery [7] Group 4: Company Overview - Kelly Services, Inc. reported a revenue of $4.3 billion in 2024 and connects over 400,000 people with work annually across various industries, including science, engineering, technology, and finance [9]