10-Q · April 29, 2026
Kforce reported Q1 2026 revenue of $330.4 million, slightly above estimates, and EPS of $0.46, surpassing expectations. The company saw small year-over-year growth in revenue for the first time in over three years, with…
Earnings analysis · 10-Q
KFRC earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Kforce delivered a stronger Q2, with revenue up 4.5% year over year to $349.331 million, gross margin expanding to 28.5%, operating margin reaching 5.4%, and diluted EPS of $0.73. Both Technology and FA grew, supported…
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Kforce delivered a stronger Q2, with revenue up 4.5% year over year to $349.331 million, gross margin expanding to 28.5%, operating margin reaching 5.4%, and diluted EPS of $0.73. Both Technology and FA grew, supported by higher consultants on assignment and improved Flex bill/pay spreads. The principal offset is cash conversion: first-half free cash flow was negative $13.922 million as receivables increased, while credit-facility debt rose to $107.1 million. The 10-Q provides constructive qualitative Q3 demand commentary but no consolidated numeric revenue or EPS guidance.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.73
What stood out
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Revenue and EPS accelerated
Q2 revenue was $349.331 million, up 4.5% from $334.316 million a year earlier. Revenue also improved from $330 million in Q1 2026, while diluted EPS rose to $0.73 from $0.46 sequentially and $0.59 in Q2 2025.
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Substantial margin expansion
Gross margin expanded 140 basis points year over year to 28.5% from 27.1%, and operating margin increased 90 basis points to 5.4% from 4.5%. Q2 net income increased to $12.323 million from $10.449 million.
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Both operating segments grew
Technology revenue increased 4.3% to $323.876 million and FA revenue rose 7.0% to $25.455 million. The increases were primarily driven by consultants on assignment, with Flex hours billed up 3.7% to 3.926 million.
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Improved bill/pay spreads lift margins
Technology Flex gross margin increased to 26.8% from 25.6%, while FA Flex margin increased to 29.1% from 28.5%, driven by improved bill/pay spreads and, in FA, lower healthcare costs.
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First-half results and demand indicators improve
For the first six months, revenue increased 2.3% to $679.695 million and diluted EPS increased to $1.19 from $1.03. Management cited strengthening staffing indicators and reported an estimated 1% growth outlook for technology temporary staffing in 2026.
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Continued shareholder returns
The company returned $28.2 million to shareholders in the first half, including $14.7 million of open-market repurchases and $13.5 million in dividends. The quarterly dividend was $0.80 per share, up from $0.78 per share in the prior-year period.
What to watch
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Receivables drove negative cash conversion
First-half operating cash flow reversed to a $6.728 million use from $18.614 million of cash provided a year earlier; after $7.194 million of capital expenditures, free cash flow was negative $13.922 million versus positive $10.324 million. Management attributed the change primarily to higher trade receivables accompanying improved revenue trends.
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Debt increased materially to fund cash needs
Credit-facility borrowings increased to $107.1 million at June 30, 2026 from $66.4 million at December 31, 2025, a $40.7 million increase. Available capacity was $91.8 million under the $200.0 million facility.
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Higher incentive costs pressure leverage
SG&A rose to 22.7% of Q2 revenue from 22.2%, partially offsetting the 140-basis-point gross-margin improvement. Management attributed the increase to higher performance-based compensation, and first-half SG&A was 23.0% versus 22.5%.
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No new risk-factor disclosures
The filing reports no material changes to risk factors previously disclosed in the 2025 Form 10-K. Nonetheless, management notes that a material deterioration in macroeconomic conditions could adversely affect operating results, liquidity and lenders' ability to fund borrowings; June 2026 unemployment was 4.2%.
Management's outlook
The 10-Q does not provide consolidated numeric revenue or EPS guidance. Management expects Q3 Technology Flex revenue to rise low single digits sequentially and mid single digits year over year; FA Flex revenue is expected to rise low single digits sequentially and year over year. Technology and FA Flex margins are expected to remain fairly stable sequentially, while Direct Hire revenue is expected to decline seasonally.
Earlier filings 4
10-K · February 20, 2026
Kforce remains a technology-focused staffing and solutions firm (93% of revenues) facing a third consecutive year of revenue declines: Technology revenue fell 4.8% year-over-year to $1.2 billion in 2025 while Finance &…
10-Q · April 30, 2025
Kforce reported Q1 revenue of $330,028,000, down 6.2% year-over-year, with diluted EPS of $0.45 (down from $0.58). Gross margin compressed 40 basis points to 26.7% and operating income fell to $11,631,000 (3.5% of…
10-K · February 21, 2025
Kforce describes a focused strategy on technology talent solutions (92% of 2024 revenue) while investing in back-office transformation (Workday) and a new India development center (Pune) to expand nearshore/offshore…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.