Kelly Services (KELYA) Q4 2025 earnings summary

Executive summary

• Q4 2025 revenue was $1.1 billion, down 11.9% year-over-year, mainly due to lower demand in ETM and SET segments, partially offset by growth in Education; full-year revenue was $4.3 billion, down 1.9%.

• Profitability was pressured by lower revenue and gross profit, but cost optimization reduced SG&A by 8.7% reported and 11.1% adjusted.

• Technology modernization and AI integration advanced, including rollout of proprietary AI tools and consolidation of SET acquisitions onto a unified platform.

• Appointment of a new Chief Growth Officer and search for SET president to drive growth and go-to-market strategies.

• Board reconstitution followed Hunt Companies' acquisition of a controlling stake in Class B Common Stock.

Financial highlights

• Q4 gross profit was $197 million, with a gross profit rate of 18.8%, down 150 basis points year-over-year; Q4 adjusted EBITDA was $21 million (2.0% margin), down 51.7%.

• Q4 loss per share was $3.69; adjusted EPS was $0.16, down from $0.79 prior year.

• Full-year loss per share was $7.24, including $7.61 of non-cash negative impacts; adjusted EPS was $1.26.

• Full-year adjusted EBITDA was $109.4 million (2.6% margin), down 23.8% year-over-year.

• Free cash flow for 2025 was $114.1 million, up from $15.8 million in 2024.

Outlook and guidance

• Q1 2026 revenue expected to decline 11–13% year-over-year (3–5% underlying decline); adjusted EBITDA margin expected at ~1.5%.

• Modest revenue growth and margin expansion anticipated in the second half of 2026.

• Growth initiatives, technology modernization, and efficiency efforts expected to drive sequential improvement through 2026.