Kelly Services-B | 8-K: FY2025 Q3 Revenue: USD 935 M

Revenue: As of FY2025 Q3, the actual value is USD 935 M.

EPS: As of FY2025 Q3, the actual value is USD -4.26.

EBIT: As of FY2025 Q3, the actual value is USD -102.1 M.

Financial Results for the Thirteen-Week Period Ended September 28, 2025

Revenue

• Revenue was $935.0 million, a 9.9% decrease compared to the corresponding quarter of 2024, primarily driven by lower demand in the ETM and SET segments, partially offset by a 0.9% growth in the Education segment.

Operating Loss

• Operating loss was $102.1 million, compared to earnings of $2.6 million in the third quarter of 2024. This reflects non-cash goodwill impairment charges totaling $102.0 million related to reduced demand and integration of acquisitions in the SET segment.

Adjusted EBITDA

• Adjusted EBITDA was $16.5 million, a decrease of 36.7% versus the prior year period, with an adjusted EBITDA margin of 1.8%, a decrease of 70 basis points.

Income Tax Expense

• Income tax expense was $46.4 million, compared to an income tax benefit of $2.6 million in the third quarter of 2024, reflecting non-cash goodwill impairment charges and a valuation allowance.

Loss Per Share

• Loss per share was $4.26, including non-cash goodwill impairment charges and a valuation allowance charge on deferred tax assets, compared to earnings per share of $0.02 in the third quarter of 2024.

Financial Results for the Thirty-Nine-Week Period Ended September 28, 2025

Revenue

• Revenue was $3.2 billion, a 1.9% increase compared to the corresponding period in 2024, primarily due to the May 2024 acquisition of MRP.

Operating Loss

• Operating loss was $69.1 million, compared to earnings of $41.6 million reported over the same period in 2024, reflecting non-cash goodwill impairment charges.

Adjusted EBITDA

• Adjusted EBITDA was $88.4 million, a decrease of 11.5% versus the prior year period, with an adjusted EBITDA margin of 2.8%.

Income Tax Expense

• Income tax expense was $49.1 million, compared to an income tax expense of $2.5 million reported over the same period in 2024.

Loss Per Share

• Loss per share was $3.56, including non-cash goodwill impairment charges and a valuation allowance charge on deferred tax assets, compared to earnings per share of $0.85 in the same period of 2024.

Segment Information for the Third Quarter of 2025

Enterprise Talent Management (ETM)

• Revenue from services was $487.9 million, a decrease of 13.1% from $561.6 million in the third quarter of 2024.

Science, Engineering & Technology (SET)

• Revenue from services was $304.9 million, a decrease of 9.0% from $335.0 million in the third quarter of 2024.

Education

• Revenue from services was $143.3 million, an increase of 0.9% from $142.1 million in the third quarter of 2024.

Cash Flow

Net Cash from Operating Activities

• Net cash from operating activities was $94.0 million for the nine months ended September 28, 2025, compared to $11.9 million for the same period in 2024.

Free Cash Flow

• Free cash flow was $87.2 million for the nine months ended September 28, 2025, compared to $2.8 million for the same period in 2024.

Outlook / Guidance

• The Company expects a total year-over-year revenue decline of 12% to 14% for the fiscal 2025 fourth quarter, including approximately 8% impact due to reduced demand for federal contractors and discrete large customers. Adjusted EBITDA margin is expected to be approximately 3%, reflecting a year-over-year decline similar to the third quarter of 2025.