Kforce (KFRC) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was $332.6 million and EPS was $0.63, both exceeding guidance, though revenue declined 5.9% year-over-year and 0.5% sequentially.

• Growth in consultants on assignment continued, with FA segment showing 6.9% sequential growth and Technology segment seeing a 1.1% sequential decline.

• Consulting-led engagements and solutions-based offerings are driving margin stability and higher bill rates, especially in Technology.

• Macroeconomic uncertainty, weak labor market, and AI-driven market shifts persist, but demand is broad-based across industries and geographies.

• Board increased share repurchase authorization to $100 million in October 2025.

Financial highlights

• Gross margin was 27.7%, up 60 bps sequentially, down 20 bps year-over-year; flex margins in Technology up 50 bps sequentially.

• SG&A expenses were 22.8% of revenue, up 60 bps year-over-year.

• Operating margin was 4.5%; effective tax rate was 22.3%.

• Operating cash flow was $23.3 million; return on equity exceeded 30%.

• Adjusted EBITDA for Q3 2025 was $19.4 million, compared to $23.8 million in Q3 2024.

Outlook and guidance

• Q4 2025 revenue expected between $326 million and $334 million; EPS guidance is $0.43–$0.51.

• Sequential billing day growth anticipated in both Technology and FA businesses in Q4.

• Q4 2025 gross profit margin expected between 27.1% and 27.3%; operating margin between 3.7% and 4.1%.

• Q4 tax rate expected at 32.5%, presenting a 4-cent EPS headwind year-over-year.

• Long-term profitability target is double-digit operating margins and 8% at $1.7 billion annual revenue.