Kforce (KFRC) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue grew 4.5% year-over-year to $349.3 million, with profitability and gross margin exceeding expectations; Technology business achieved its highest year-over-year growth rate since 2022, and three consecutive quarters of revenue growth returned to pre-pandemic norms.

• Revenue for the six months ended June 30, 2026 increased 2.3% year-over-year to $679.7 million, with Technology and FA segments up 2.1% and 4.9%, respectively, driven by more consultants on assignment.

• Go-to-market and integrated strategies are driving market share gains, margin expansion, and broad-based improvement across industries and skill sets.

• Demand for flexible talent models is rising as organizations prioritize high-value technology initiatives, especially in AI, data, and digital transformation.

• $28.2 million was returned to shareholders via share repurchases and dividends in the first half of 2026.

Financial highlights

• Q2 2026 revenue: $349.3 million (+4.5% YoY), net income $12.3 million (+18% YoY), diluted EPS $0.73 (+24% YoY), gross margin 28.5% (+140 bps YoY), and operating margin 5.4%.

• Six months ended June 30, 2026: Revenue $679.7 million (+2.3% YoY), net income $20.2 million (+8.9% YoY), diluted EPS $1.19 (+15.5% YoY).

• SG&A expense: 22.7% of revenue in Q2, up 50 basis points YoY; for six months, SG&A was 23.0% of revenue.

• Adjusted EBITDA for Q2 2026 was $23.8 million, up from $19.9 million in Q2 2025; for six months, adjusted EBITDA was $40.7 million.

• Negative operating cash flow of $6.7 million year-to-date, expected to turn positive in the second half as receivables are monetized.

Outlook and guidance

• Q3 2026 revenue guidance: $349–$357 million; EPS guidance: $0.71–$0.79; gross profit margin expected between 28.1% and 28.3%; operating margin 5.3% to 5.7%.

• At midpoint, Q3 revenue expected to rise 1.1% sequentially and 6.1% year-over-year; EPS up 19% year-over-year.

• Technology Flex and FA Flex revenues expected to increase low single digits sequentially and mid single digits YoY in Q3 2026; Direct Hire revenue expected to decrease due to seasonality.

• Operating margin target of at least 8% when annual revenue returns to $1.7 billion, over 100 basis points higher than prior peak.

• Guidance assumes a stable operating environment and excludes unusual or non-recurring items.