Kelly Services-B | 8-K: FY2025 Q4 Revenue: USD 1.049 B

Revenue: As of FY2025 Q4, the actual value is USD 1.049 B.EPS: As of FY2025 Q4, the actual value is USD -3.69.EBIT: As of FY2025 Q4, the actual value is USD -700 K.Financial Overview (Fourth Quarter 2025 vs. Fourth Quarter 2024)RevenueTotal Revenue from Services: $1,049.2 million in Q4 2025, representing an -11.9% decrease from $1,191.1 million in Q4 2024. The decrease was mainly due to lower demand in the Enterprise Talent Management (ETM) and Science, Engineering & Technology (SET) segments, partially offset by 1.3% growth in the Education segment . Discrete impacts from reduced demand for U.S. federal government contractors and three large commercial customers accounted for approximately 8% of the decline, resulting in an underlying revenue decline of approximately 3.9% .Operational MetricsGross Profit: $197.0 million in Q4 2025, compared to $241.5 million in Q4 2024, a -18.4% decrease .Gross Profit Rate: 18.8% in Q4 2025, a decrease of -1.5 percentage points from 20.3% in Q4 2024 . The gross profit rate decreased by 150 basis points, primarily due to increased employee-related costs and business mix changes, particularly growth in the Education segment which has a lower gross profit rate .Selling, General and Administrative Expenses (SG&A): $198.5 million in Q4 2025, a -8.7% decrease from $217.4 million in Q4 2024 . SG&A decreased by 8.7%, reflecting cost optimization efforts .Adjusted SG&A Expenses: $188.7 million in Q4 2025, compared to $212.3 million in Q4 2024, reflecting an 11.1% decline .Operating Loss: -$0.7 million in Q4 2025, a significant improvement from an operating loss of -$56.7 million in Q4 2024 . The company reported a loss from operations of -$0.7 million, a decrease of 71.6% .Adjusted Earnings from Operations: $8.3 million in Q4 2025, compared to $29.2 million in Q4 2024 .Adjusted EBITDA: $21.0 million in Q4 2025, a -51.7% decrease from $43.5 million in Q4 2024 .Adjusted EBITDA Margin: 2.0% in Q4 2025, a decrease of -1.7 percentage points from 3.7% in Q4 2024, primarily due to near-term gross margin pressure in SET and ETM segments . The Adjusted EBITDA margin was 2.0%, a decrease of 170 basis points, primarily reflecting the lower gross profit .Income Tax Expense (Benefit): $126.2 million in Q4 2025, compared to an income tax benefit of -$23.8 million in Q4 2024 . The 2025 expense includes a $127.9 million valuation allowance increase related to work opportunity credit and foreign tax credit carryforwards .Adjusted Income Tax Expense (Benefit): $0.8 million in Q4 2025, compared to an income tax benefit of -$2.1 million in Q4 2024 .Net Earnings (Loss): -$128.8 million in Q4 2025, compared to -$31.8 million in Q4 2024 . The net loss was -$128.8 million (-$3.69 per share) .Adjusted Net Earnings: $5.9 million ($0.16 per share) .Financial Overview (Full Year 2025 vs. Full Year 2024)RevenueTotal Revenue from Services: $4,250.9 million in 2025, a -1.9% decrease from $4,331.8 million in 2024 . Excluding the impact of the May 2024 acquisition of MRP, revenue was down -6.2% organically, mainly due to a 6% decline from discrete impacts related to U.S. federal government contractors and three large commercial customers . The Education segment grew 3.9% for the full year .Operational MetricsGross Profit: $853.0 million in 2025, compared to $882.6 million in 2024, a -3.4% decrease .Gross Profit Rate: 20.1% in 2025, a decrease of -0.3 percentage points from 20.4% in 2024 . The gross profit rate was 20.1%, a decrease of 30 basis points .Selling, General and Administrative Expenses (SG&A): $825.9 million in 2025, compared to $818.4 million in 2024, a 0.9% increase .Adjusted SG&A Expenses: $793.7 million in 2025, compared to $790.5 million in 2024 .Goodwill Impairment Charge: $102.0 million in 2025, compared to $72.8 million in 2024 .Operating Loss: -$69.8 million in 2025, compared to -$15.1 million in 2024 . Both years reflect non-cash impairment charges of $102.0 million and $86.3 million, respectively . The loss from operations was -$69.8 million, a decrease of 35.6% .Adjusted Earnings from Operations: $59.3 million in 2025, compared to $92.1 million in 2024 .Adjusted EBITDA: $109.4 million in 2025, a -23.8% decrease from $143.5 million in 2024 .Adjusted EBITDA Margin: 2.6% in 2025, a decrease of -0.7 percentage points from 3.3% in 2024 . The Adjusted EBITDA margin was 2.6%, a decrease of 70 basis points .Income Tax Expense (Benefit): $175.3 million in 2025, compared to an income tax benefit of -$21.3 million in 2024 . The 2025 expense reflects a $197.6 million valuation allowance established against work opportunity credit and foreign tax credit carryforwards .Adjusted Income Tax Expense (Benefit): $4.2 million in 2025, compared to $5.5 million in 2024 .Net Earnings (Loss): -$254.1 million in 2025, compared to -$0.6 million in 2024 . The net loss was -$254.1 million (-$7.24 per share) .Adjusted Net Earnings: $46.5 million ($1.26 per share) .Cash FlowFree Cash Flow: $114.1 million in 2025, a significant increase from $15.8 million in 2024, representing a sixfold increase versus the prior year .Net Cash from Operating Activities: $122.6 million in 2025, compared to $26.9 million in 2024 .Capital Expenditures: -$8.5 million in 2025, compared to -$11.1 million in 2024 .Balance Sheet Metrics (as of December 28, 2025 vs. December 29, 2024)Cash and Equivalents: $33.0 million in 2025, compared to $39.0 million in 2024 .Total Assets: $2,250.6 million in 2025, compared to $2,632.3 million in 2024 .Total Liabilities: $1,274.1 million in 2025 ($821.8 million current + $452.3 million noncurrent), compared to $1,397.7 million in 2024 ($826.5 million current + $571.2 million noncurrent) .Long-term Debt: $101.9 million in 2025, compared to $239.4 million in 2024 .Total Stockholders’ Equity: $976.5 million in 2025, compared to $1,234.6 million in 2024 .Working Capital: $446.5 million in 2025, compared to $539.0 million in 2024 .Current Ratio: 1.5 in 2025, compared to 1.7 in 2024 .Debt-to-capital %: 9.4% in 2025, compared to 16.2% in 2024 .Global Days Sales Outstanding: 61 days in 2025, compared to 59 days in 2024 .Liquidity (Fourth-Quarter 2025): Kelly Services, Inc. had a combined borrowing capacity of $400 million from its U.S. revolving credit ($150 million) and securitization ($250 million) facilities . The fourth quarter of 2025 reflects a net paydown of debt compared to the prior year, utilizing operating cash generated from favorable working capital .Segment Performance (Fourth Quarter 2025 vs. Fourth Quarter 2024)Enterprise Talent Management (ETM)Revenue from Services: $463.4 million in 2025, a -18.6% decrease from $569.2 million in 2024 . Revenue decreased by 18.6% (5.4% excluding discrete impacts) .Gross Profit: $84.1 million in 2025, a -27.1% decrease from $115.3 million in 2024 .Gross Profit Rate: 18.1% in 2025, a decrease of -2.2 percentage points from 20.3% in 2024 .Adjusted Business Unit Profit (Loss): -$3.4 million in 2025, compared to $17.2 million in 2024 .Adjusted EBITDA Margin: -0.7% in 2025, compared to 3.0% in 2024 .Science, Engineering & Technology (SET)Revenue from Services: $295.8 million in 2025, a -11.3% decrease from $333.4 million in 2024 . Revenue decreased by 11.3% (5.4% excluding discrete impacts) .Gross Profit: $71.3 million in 2025, a -16.2% decrease from $85.1 million in 2024 .Gross Profit Rate: 24.2% in 2025, a decrease of -1.3 percentage points from 25.5% in 2024 .Adjusted Business Unit Profit (Loss): $13.9 million in 2025, compared to $18.8 million in 2024 .Adjusted EBITDA Margin: 4.7% in 2025, compared to 5.6% in 2024 .EducationRevenue from Services: $293.1 million in 2025, a 1.3% increase from $289.2 million in 2024 . Revenue increased by 1.3% .Gross Profit: $41.6 million in 2025, a 1.2% increase from $41.1 million in 2024 .Gross Profit Rate: 14.2% in both 2025 and 2024 .Adjusted Business Unit Profit (Loss): $17.6 million in 2025, compared to $16.4 million in 2024 .Adjusted EBITDA Margin: 6.0% in 2025, compared to 5.7% in 2024 .Segment Performance (Full Year 2025 vs. Full Year 2024)Enterprise Talent Management (ETM)Revenue from Services: $2,005.5 million in 2025, a -8.7% decrease from $2,196.1 million in 2024 .Gross Profit: $392.8 million in 2025, a -11.7% decrease from $444.9 million in 2024 .Gross Profit Rate: 19.6% in 2025, a decrease of -0.7 percentage points from 20.3% in 2024 .Adjusted Business Unit Profit (Loss): $27.4 million in 2025, compared to $59.7 million in 2024 .Adjusted EBITDA Margin: 1.4% in 2025, compared to 2.7% in 2024 .Science, Engineering & Technology (SET)Revenue from Services: $1,240.4 million in 2025, a 6.4% increase from $1,165.7 million in 2024 .Gross Profit: $313.2 million in 2025, a 5.1% increase from $297.9 million in 2024 .Gross Profit Rate: 25.3% in 2025, a decrease of -0.3 percentage points from 25.6% in 2024 .Adjusted Business Unit Profit (Loss): $68.3 million in 2025, compared to $71.7 million in 2024 .Adjusted EBITDA Margin: 5.5% in 2025, compared to 6.2% in 2024 .EducationRevenue from Services: $1,010.7 million in 2025, a 3.9% increase from $972.3 million in 2024 .Gross Profit: $147.0 million in 2025, a 5.2% increase from $139.8 million in 2024 .Gross Profit Rate: 14.5% in 2025, an increase of 0.1 percentage points from 14.4% in 2024 .Adjusted Business Unit Profit (Loss): $46.3 million in 2025, compared to $43.9 million in 2024 .Adjusted EBITDA Margin: 4.6% in 2025, compared to 4.5% in 2024 .Revenue by Service Type (Full Year 2025)Staffing Services: $2,821.2 million .Outcome-based Services: $893.2 million .Talent Solutions: $492.4 million .Permanent Placement: $49.8 million .Outlook / GuidanceKelly Services, Inc. expects Q1 2026 revenue to decline between 11% to 13% year-over-year, or 3% to 5% on an underlying basis excluding discrete customer impacts, with an adjusted EBITDA margin of approximately 1.5% . For the remainder of 2026, the company anticipates relative improvement in year-over-year performance each successive quarter for both revenue and adjusted EBITDA margin, leading to modest year-over-year revenue growth and measurable adjusted EBITDA margin expansion in the second half of the year . This financial outlook assumes no material change in macroeconomic or industry dynamics relative to current trends .