Kelly Services (KELYA) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue declined 5.8% year-over-year, but underlying revenue trends improved sequentially, driven by ETM and SET segment strength and stabilization in Education.

• Adjusted EBITDA margin returned to 3.0%, up sequentially, reflecting operating leverage, cost base re-engineering, and disciplined SG&A management.

• Recognized as a leader in staffing and recruiting by Everest Group and Forbes, with new technology leadership and board appointments strengthening the organization.

• Technology modernization advanced with the launch of an enterprise-wide, AI-powered CRM system and proprietary AI platform integration.

• Strategic initiatives and integrated go-to-market strategies are accelerating profitable growth and positioning the company for future value creation.

Financial highlights

• Q2 2026 revenue was $1.04 billion, down 5.8% year-over-year but better than guidance; gross profit was $212 million (20.4% margin), down 6% year-over-year.

• Adjusted EBITDA was $31.1 million (3.0% margin), up sequentially but down 40 bps year-over-year; adjusted EPS was $0.37, down from $0.54 prior year.

• Net earnings for Q2 2026 were $11.4 million, a 40% decrease from Q2 2025; diluted EPS was $0.31.

• Year-to-date revenue was $2.08 billion, down 8.3%; adjusted EBITDA margin was 2.3%, down 90 bps.

• Free cash flow for Q2 was $47.7 million; total debt reduced to $78.1 million; total available liquidity at quarter end was $303 million.

Outlook and guidance

• Full-year 2026 outlook improved: low-to-mid single digit revenue decline and 10–20 bps adjusted EBITDA margin improvement expected.

• Q3 2026: underlying revenue growth of 1–2% year-over-year, total revenue flat to down 2%, adjusted EBITDA margin in the low 2% range.

• Q4 2026: mid-to-upper single digit revenue growth, adjusted EBITDA margin ~4%, aided by an extra fiscal week.

• Management expects to capitalize on improving demand trends and drive profitable growth and long-term value creation.