Kforce (KFRC) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue was $332.6 million, down 5.9% year-over-year but above guidance, with EPS at $0.63, up sequentially but down 16% year-over-year.

• Growth in consultants on assignment continued through Q3 and into early Q4, with a 4% increase from early Q3 lows and sequential FA growth.

• Macroeconomic uncertainty, including inflation, government shutdown, and global trade negotiations, continues to impact both Technology and FA segments.

• Consulting-led engagements and solutions-based offerings are driving margin stability and growth.

• $61.9 million was returned to shareholders in the nine months ended September 30, 2025, with $16.2 million in Q3 via dividends and share repurchases.

Financial highlights

• Gross margin was 27.7% in Q3 2025, up 60 bps sequentially, down 20 bps year-over-year.

• SG&A expenses were 22.8% of revenue in Q3 2025, up 60 bps year-over-year.

• Operating margin was 4.5% in Q3 2025; net income was $11.1 million.

• Adjusted EBITDA for Q3 2025 was $19.4 million; free cash flow for the nine months ended September 30, 2025, was $30.1 million.

• $41.1 million in share repurchases and $20.8 million in dividends were paid in the nine months ended September 30, 2025.

Outlook and guidance

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

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

• Technology Flex revenue expected to increase low single digits sequentially in Q4 2025 but decline mid-single digits year-over-year.

• FA Flex revenue projected to be slightly up sequentially and decline mid-single digits year-over-year in Q4 2025.

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