Kforce (NASDAQ: KFRC) lifts H1 2026 revenue to $679.7M as margins expand
Rhea-AI Filing Summary
Kforce Inc., a provider of technology and finance and accounting staffing solutions, reported modest growth and stronger profitability for the quarter and six months ended June 30, 2026. Revenue for the six months increased 2.3% to $679.7 million, driven by 2.1% growth in Technology and 4.9% in FA, with Flex revenue up 2.3% and Direct Hire revenue up 2.1%. Gross profit margin rose 100 basis points to 27.9%, and Flex gross margins improved 100 basis points to 26.4%, reflecting improved bill‑pay spreads and a slightly higher mix of Direct Hire. Net income grew 8.9% to $20.2 million, with diluted EPS of $1.19.
Cash used in operating activities was $6.7 million, compared with $18.6 million provided a year earlier, mainly due to higher trade receivables as revenue improved. Long‑term debt under the Credit Facility increased to $107.1 million, with $91.8 million of remaining availability and working capital of $111.5 million. The company returned $28.2 million to shareholders through $14.7 million of open‑market repurchases and $13.5 million of dividends during the first half of 2026, and reported first‑half Adjusted EBITDA of $40,654 thousand.
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Filing Explained
At June 30, Kforce had 1,144 thousand restricted shares outstanding under a plan reserving about 2.8 million shares, creating potential dilution.
As a Form 10-Q, this report updates Kforce’s interim financial statements and shows that, as of
The reserve is capacity rather than a report that all shares have been issued; Kforce says stock issued for compensation may increase outstanding shares and dilute ownership.
The plan terminates on
Key Figures
Revenue (six months): $679.7 million
Net income (six months): $20.2 million
Diluted EPS (six months): $1.19
+5 more
8 metrics
Revenue (six months)
$679.7 million
Revenue for the six months ended June 30, 2026; increased 2.3% year over year
Net income (six months)
$20.2 million
Net income for the six months ended June 30, 2026; up 8.9% from 2025 period
Diluted EPS (six months)
$1.19
Diluted earnings per share for the six months ended June 30, 2026
Gross profit margin
27.9%
Gross profit margin for the six months ended June 30, 2026; up from 26.9%
Cash used in operating activities
$6.7 million
Cash used in operating activities for the six months ended June 30, 2026
Credit Facility debt outstanding
$107.1 million
Amount outstanding under the Credit Facility at June 30, 2026
Capital returned to shareholders
$28.2 million
Total of open market repurchases and dividends in six months ended June 30, 2026
Adjusted EBITDA (six months)
$40,654 thousand
Adjusted EBITDA for the six months ended June 30, 2026
Key Terms
Flex revenue, Direct Hire revenue, Free Cash Flow, Adjusted EBITDA, +2 more
6 terms
Flex revenue financial
"Flex revenue for the six months ended June 30, 2026 increased 2.3%"
Direct Hire revenue financial
"Direct Hire revenue for the six months ended June 30, 2026 increased 2.1%"
Free Cash Flow financial
"Free Cash Flow, a non-GAAP financial measure, is defined by Kforce"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
Adjusted EBITDA financial
"The following table includes a reconciliation of Net income to Adjusted EBITDA"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Rabbi Trust financial
"Assets held in Rabbi Trust were $61,881 at June 30, 2026"
A rabbi trust is a special account a company sets up to hold promised future pay for executives, like bonus or retirement money, so those employees can see there are funds earmarked for them. It matters to investors because it signals the company’s commitment to keep key people, but the money is still part of the company’s assets and can be claimed by creditors if the company goes bankrupt—think of it as a labeled jar that isn’t completely off-limits.
Work Opportunity Tax Credits financial
"the expiration of the Work Opportunity Tax Credits program in 2025"
A work opportunity tax credit is a government incentive that gives employers a direct reduction in their federal tax bill when they hire people from certain groups who face barriers to employment, such as long-term unemployment or veterans. Think of it like a hiring coupon that lowers the effective cost of adding staff, which matters to investors because it can improve a company’s after-tax profitability, cash flow, and the economics of workforce expansion.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Kforce (KFRC) perform financially in the first half of 2026?
Kforce generated $679.7 million in revenue for the six months ended June 30, 2026, up 2.3% year over year. Net income was $20.2 million and diluted EPS reached $1.19, with gross profit margin expanding to 27.9%.
What drove Kforce (KFRC) revenue growth by segment in early 2026?
Revenue growth came from both segments: Technology rose 2.1% and FA rose 4.9% for the first half of 2026. Flex revenue increased 2.3% and Direct Hire revenue 2.1%, primarily due to more consultants on assignment and higher placements.
How did Kforce (KFRC) profitability margins change in the first half of 2026?
Overall gross profit margin increased to 27.9% from 26.9%, while total Flex gross margin improved to 26.4% from 25.4%. Technology and FA Flex margins both expanded, aided by better bill‑pay spreads, despite SG&A rising to 23.0% of revenue.
What was Kforce’s (KFRC) cash flow and liquidity position as of June 30, 2026?
Kforce used $6.7 million in operating cash during the first half of 2026, versus $18.6 million provided a year earlier, mainly from higher receivables. It had $107.1 million outstanding on its Credit Facility, $91.8 million of availability, and working capital of $111.5 million.
What is Kforce’s (KFRC) Adjusted EBITDA for the first half of 2026?
For the six months ended June 30, 2026, Kforce reported Adjusted EBITDA of $40,654 thousand. This non‑GAAP metric adds back depreciation and amortization, stock‑based compensation, interest expense, and income tax expense to the company’s reported net income.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________________________________________________________
FORM 10-Q
________________________________________________________
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number 001-42104
_________________________________________________________________
Exact name of registrant as specified in its charter
_______________________________________________________________
| State or other jurisdiction of incorporation or organization | IRS Employer Identification No. | |||||||
| Address of principal executive offices | Zip Code | |||||||
Registrant’s telephone number, including area code: (813 ) 552-5000
_______________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.): Yes ☐ No ☒
The number of shares outstanding (in thousands) of the registrant’s common stock at July 22, 2026 was 17,909 .
Table of Contents
KFORCE INC.
TABLE OF CONTENTS
PART I | Item 1. | Financial Statements. | 3 | ||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 14 | |||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 23 | |||||||||
| Item 4. | Controls and Procedures. | 23 | |||||||||
PART II | Item 1. | Legal Proceedings. | 24 | ||||||||
| Item 1A. | Risk Factors. | 24 | |||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 25 | |||||||||
| Item 3. | Defaults Upon Senior Securities. | 25 | |||||||||
| Item 4. | Mine Safety Disclosures. | 25 | |||||||||
| Item 5. | Other Information. | 25 | |||||||||
| Item 6. | Exhibits. | 26 | |||||||||
SIGNATURES | 27 | ||||||||||
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS | ||
References in this document to the “Registrant,” “Kforce,” the “Company,” the “Firm,” “management,” “we,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context otherwise requires or indicates. This report, particularly Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), and Part II, Item 1A. Risk Factors, and the documents we incorporate into this report contain certain statements that are, or may be deemed to be, forward-looking statements within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements may include, but may not be limited to:
•expectations of financial or operational performance, including the potential effects of macroeconomic and geopolitical uncertainties, such as the impacts of energy prices on consumer spending and tariffs, among others, on our business;
•our predictions regarding client confidence and trends in the labor market;
•our belief that organizations are increasingly turning to flexible talent strategies to advance technology initiatives;
•the impacts of revenue and gross profit levels on SG&A expenses;
•our expectations of growth rates in temporary staffing and future changes in revenue and gross profit margins of each segment of our business;
•changes in demand for our services and our ability to adapt to such changes;
•continued investments in our strategic priorities, and our ability to realize the benefits of our strategic priorities;
•our expectations regarding our go-to-market approach and related initiatives;
•the Firm’s commitment, intent and ability to return significant capital to its shareholders through open market repurchases and quarterly dividends;
•our ability to meet the capital expenditure and working capital requirements of our operations;
•financing needs or plans, or our ability to maintain compliance with our credit facility's covenants;
•clients’ increased cautiousness and subdued hiring practices due to macroeconomic uncertainty;
•the impact of technological change, such as artificial intelligence (“AI") and derivative developments including generative AI, agentic AI and cognitive AI, among others, on the demand for our services; and
•assumptions as to any of the foregoing and all statements that are not based on historical fact, but rather reflect our current expectations concerning future results and events.
For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, refer to the MD&A and Risk Factors sections. In addition, when used in this discussion, the terms “anticipate,” “assume,” “estimate,” “expect,” “intend,” “plan,” “believe,” “will,” “may,” “likely,” “could,” “should,” “future” and variations thereof and similar expressions are intended to identify forward-looking statements.
Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted. Future events and actual results could differ materially from those set forth in or underlying the forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this report, which speak only as of the date of this report. Kforce undertakes no obligation to update any forward-looking statements.
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
KFORCE INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||
| Direct costs | ||||||||||||||
| Gross profit | ||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Income from operations | ||||||||||||||
| Other expense, net | ||||||||||||||
| Income before income taxes | ||||||||||||||
| Income tax expense | ||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||
| Earnings per share – basic | $ | $ | $ | $ | ||||||||||
| Earnings per share – diluted | $ | $ | $ | $ | ||||||||||
| Weighted average shares outstanding – basic | ||||||||||||||
| Weighted average shares outstanding – diluted | ||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
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KFORCE INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| June 30, 2026 | December 31, 2025 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
Trade receivables, net of allowances of $ | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Fixed assets, net | ||||||||
| Other assets, net | ||||||||
| Deferred tax assets, net | ||||||||
| Goodwill | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and other accrued liabilities | $ | $ | ||||||
| Accrued payroll costs | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Income taxes payable | ||||||||
| Total current liabilities | ||||||||
| Long-term debt – credit facility | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
Commitments and contingencies (Note J) | ||||||||
| Stockholders’ equity: | ||||||||
Preferred stock, $ | ||||||||
Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
Treasury stock, at cost; | ( | ( | ||||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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KFORCE INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(IN THOUSANDS)
| Common Stock | Additional Paid-In Capital | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||
| Shares | Amount | Retained Earnings | Shares | Amount | |||||||||||||||||||
Balance, December 31, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||
| Issuance for stock-based compensation and dividends, net of forfeitures | ( | — | — | ||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
Dividends ($ | — | — | — | ( | — | — | ( | ||||||||||||||||
| Repurchases of common stock | — | — | — | — | ( | ( | |||||||||||||||||
| Other | — | — | — | ( | — | — | ( | ||||||||||||||||
Balance, March 31, 2026 | ( | ||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||
| Issuance for stock-based compensation and dividends, net of forfeitures | — | ( | — | — | |||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
Dividends ($ | — | — | — | ( | — | — | ( | ||||||||||||||||
| Repurchases of common stock | — | — | — | — | ( | ( | |||||||||||||||||
| Other | — | — | — | — | — | ||||||||||||||||||
Balance, June 30, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||
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| Common Stock | Additional Paid-In Capital | Treasury Stock | Total Stockholders’ Equity | ||||||||||||||||||||
| Shares | Amount | Retained Earnings | Shares | Amount | |||||||||||||||||||
Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | |||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||
| Issuance for stock-based compensation and dividends, net of forfeitures | ( | — | — | ||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Employee stock purchase plan | — | — | — | ( | |||||||||||||||||||
Dividends ($ | — | — | — | ( | — | — | ( | ||||||||||||||||
| Repurchases of common stock | — | — | — | — | ( | ( | |||||||||||||||||
| Other | — | — | — | ( | — | — | ( | ||||||||||||||||
Balance, March 31, 2025 | ( | ||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||
| Issuance for stock-based compensation and dividends, net of forfeitures | ( | — | — | ||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
Dividends ($ | — | — | ( | — | — | ( | |||||||||||||||||
| Repurchases of common stock | — | — | — | — | ( | ( | |||||||||||||||||
| Other | — | — | — | — | — | ||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | ( | $ | |||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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KFORCE INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to cash (used in) provided by operating activities: | ||||||||
| Deferred income tax provision, net | ( | ( | ||||||
| Provision for credit losses | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation expense | ||||||||
| Noncash lease expense | ||||||||
| Other | ( | |||||||
| (Increase) decrease in operating assets | ||||||||
| Trade receivables, net | ( | |||||||
| Other assets | ( | ( | ||||||
| Increase (decrease) in operating liabilities | ||||||||
| Accrued payroll costs | ||||||||
| Other liabilities | ( | ( | ||||||
| Cash (used in) provided by operating activities | ( | |||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | ( | ( | ||||||
| Proceeds from company-owned life insurance | ||||||||
| Premiums paid for company-owned life insurance | ( | |||||||
| Cash used in investing activities | ( | ( | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from credit facility | ||||||||
| Payments on credit facility | ( | ( | ||||||
| Repurchases of common stock | ( | ( | ||||||
| Cash dividends | ( | ( | ||||||
| Other | ( | |||||||
| Cash provided by (used in) financing activities | ( | |||||||
| Change in cash and cash equivalents | ( | |||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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| Six Months Ended June 30, | ||||||||
| Supplemental Disclosure of Cash Flow Information | 2026 | 2025 | ||||||
| Cash Paid During the Period For: | ||||||||
| Income taxes, net | $ | $ | ||||||
| Operating lease liabilities | ||||||||
| Interest, net | ||||||||
| Non-Cash Investing and Financing Transactions: | ||||||||
| ROU assets obtained from operating leases | $ | $ | ||||||
| Employee stock purchase plan | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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KFORCE INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note A - Summary of Significant Accounting Policies
Unless otherwise noted below, there have been no material changes to the accounting policies presented in Note 1 - “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of our 2025 Annual Report on Form 10-K.
Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by GAAP for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although management believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2025 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2025, was derived from our audited Consolidated Balance Sheet at December 31, 2025, as presented in our 2025 Annual Report on Form 10-K.
Our quarterly operating results are affected by the seasonality of our clients’ businesses and changes in holiday and vacation days taken. In addition, we typically experience higher costs in the first quarter of each fiscal year as a result of certain U.S. state and federal employment tax resets, which adversely affects our gross profit and overall profitability relative to the remainder of the fiscal year. As such, the results of operations for any interim period may be impacted by these factors, among others, and are not necessarily indicative of, nor comparable to, the results of operations for a full year.
Principles of Consolidation
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical of these estimates and assumptions include income taxes and the evaluation of goodwill for impairment. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates.
Earnings per Share
The following table provides information on potentially dilutive securities:
| (shares in thousands) | 2026 | 2025 | ||||||
| Three Months Ended June 30, | ||||||||
| Common stock equivalents | ||||||||
| Anti-dilutive shares | ||||||||
| Six Months Ended June 30, | ||||||||
| Common stock equivalents | ||||||||
| Anti-dilutive shares | ||||||||
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Treasury Stock
The Board of Directors has approved a stock repurchase program, which has been amended several times to increase the aggregate amount of the stock repurchase authorization. During the six months ended June 30, 2026, Kforce repurchased 527 thousand shares of common stock on the open market at a total cost of $14.7 million under this repurchase program. During the six months ended June 30, 2025, Kforce repurchased 655 thousand shares of common stock on the open market at a total cost of $31.7 million under this repurchase program.
Note B - Reportable Segments
The following table provides information on the operations of our two reportable segments:
| (in thousands) | Technology | FA | Total | ||||||||
| Three Months Ended June 30, | |||||||||||
| 2026 | |||||||||||
| Revenue | $ | $ | $ | ||||||||
| Direct costs | |||||||||||
| Gross profit | $ | $ | $ | ||||||||
| Less: | |||||||||||
| Selling, general and administrative expenses | |||||||||||
| Depreciation and amortization | |||||||||||
| Other expense, net | |||||||||||
| Income before income taxes | $ | ||||||||||
| 2025 | |||||||||||
| Revenue | $ | $ | $ | ||||||||
| Direct costs | |||||||||||
| Gross profit | $ | $ | $ | ||||||||
| Less: | |||||||||||
| Selling, general and administrative expenses | |||||||||||
| Depreciation and amortization | |||||||||||
| Other expense, net | |||||||||||
| Income before income taxes | $ | ||||||||||
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| (in thousands) | Technology | FA | Total | ||||||||
| Six Months Ended June 30, | |||||||||||
| 2026 | |||||||||||
| Revenue | $ | $ | $ | ||||||||
| Direct costs | |||||||||||
| Gross profit | $ | $ | $ | ||||||||
| Less: | |||||||||||
| Selling, general and administrative expenses | |||||||||||
| Depreciation and amortization | |||||||||||
| Other expense, net | |||||||||||
| Income before income taxes | $ | ||||||||||
| 2025 | |||||||||||
| Revenue | $ | $ | $ | ||||||||
| Direct costs | |||||||||||
| Gross profit | $ | $ | $ | ||||||||
| Less: | |||||||||||
| Selling, general and administrative expenses | |||||||||||
| Depreciation and amortization | |||||||||||
| Other expense, net | |||||||||||
| Income before income taxes | $ | ||||||||||
Note C - Disaggregation of Revenue
The following table provides information about disaggregated revenue by segment and revenue type:
| (in thousands) | Technology | FA | Total | ||||||||
| Three Months Ended June 30, | |||||||||||
| 2026 | |||||||||||
| Flex revenue | $ | $ | $ | ||||||||
| Direct Hire revenue | |||||||||||
| Total Revenue | $ | $ | $ | ||||||||
| 2025 | |||||||||||
| Flex revenue | $ | $ | $ | ||||||||
| Direct Hire revenue | |||||||||||
| Total Revenue | $ | $ | $ | ||||||||
| Six Months Ended June 30, | |||||||||||
| 2026 | |||||||||||
| Flex revenue | $ | $ | $ | ||||||||
| Direct Hire revenue | |||||||||||
| Total Revenue | $ | $ | $ | ||||||||
| 2025 | |||||||||||
| Flex revenue | $ | $ | $ | ||||||||
| Direct Hire revenue | |||||||||||
| Total Revenue | $ | $ | $ | ||||||||
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Note D - Allowance for Credit Losses
The following table presents the activity within the allowance for credit losses on trade receivables for the six months ended June 30, 2026:
| (in thousands) | |||||
| Allowance for credit losses, December 31, 2025 | $ | ||||
| Current period provision | |||||
| Write-offs charged against the allowance, net of recoveries of amounts previously written off | ( | ||||
| Allowance for credit losses, June 30, 2026 | $ | ||||
The allowances on trade receivables presented in the Unaudited Condensed Consolidated Balance Sheets include $0.5 million and $0.4 million for reserves unrelated to credit losses at June 30, 2026 and December 31, 2025, respectively.
Note E - Other Assets, Net
Other assets, net consisted of the following:
| (in thousands) | June 30, 2026 | December 31, 2025 | ||||||
| Assets held in Rabbi Trust | $ | $ | ||||||
Capitalized software, net (1) | ||||||||
| Other non-current assets | ||||||||
| Total Other assets, net | $ | $ | ||||||
(1) This balance includes $26.6 million and $20.0 million related to capitalized implementation costs from cloud computing arrangements at June 30, 2026 and December 31, 2025, respectively. Accumulated amortization of capitalized software was $44.1 million and $42.9 million at June 30, 2026 and December 31, 2025, respectively.
Note F - Current Liabilities
The following table provides information on certain current liabilities:
| (in thousands) | June 30, 2026 | December 31, 2025 | ||||||
| Accounts payable | $ | $ | ||||||
| Deferred compensation payable | ||||||||
| Accrued liabilities | ||||||||
| Accrued professional fees | ||||||||
| Customer rebates payable | ||||||||
| Total Accounts payable and other accrued liabilities | $ | $ | ||||||
| Payroll and benefits | $ | $ | ||||||
| Health insurance liabilities | ||||||||
| Payroll taxes | ||||||||
| Workers’ compensation liabilities | ||||||||
| Total Accrued payroll costs | $ | $ | ||||||
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Note G - Credit Facility
On November 5, 2025, the Firm entered into a senior secured credit facility with Bank of America, N.A., as administrative and collateral agent, BofA Securities, Inc. and PNC Capital Markets LLC as joint lead arrangers, BofA Securities, Inc. as bookrunner and the lenders referred to therein (the “Credit Facility”). Under the Credit Facility, the Firm has a maximum borrowing capacity of $200.0 million, which includes a $10.0 million sublimit for the issuance of standby and commercial letters and $10.0 million sublimit for swingline loans, and may, subject to certain conditions and the participation of the lenders, be increased up to an aggregate additional amount of $150.0 million. Borrowings under the Credit Facility are secured by substantially all of the tangible and intangible assets of the Firm. The maturity date of the Credit Facility is November 5, 2030.
At June 30, 2026 and December 31, 2025, $107.1 million and $66.4 million was outstanding under the Credit Facility, respectively. Kforce had $1.1
Note H - Other Long-Term Liabilities
Other long-term liabilities consisted of the following:
| (in thousands) | June 30, 2026 | December 31, 2025 | ||||||
| Deferred compensation payable - long term | $ | $ | ||||||
| Other long-term liabilities | ||||||||
| Total Other long-term liabilities | $ | $ | ||||||
Note I - Stock-Based Compensation
On April 22, 2026, Kforce’s shareholders approved the 2026 Stock Incentive Plan (the “2026 Plan”). The 2026 Plan allows for the issuance of stock options, stock appreciation rights (“SAR”), stock awards (including restricted stock awards (“RSAs”) and restricted stock units (“RSUs”)) and other stock-based awards, such as Performance-Based Awards (collectively referred to as “Restricted Stock”). The aggregate number of shares reserved under the 2026 Plan is approximately 2.8 million. Grants of an option or SAR reduce the reserve by one share, while a Restricted Stock award reduces the reserve by 2.72 shares. The 2026 Plan terminates on April 22, 2036.
The following table presents the Restricted Stock activity for the six months ended June 30, 2026:
| (in thousands, except per share amounts) | Number of Restricted Stock | Weighted-Average Grant Date Fair Value | Total Intrinsic Value of Restricted Stock Vested | ||||||||
| Outstanding at December 31, 2025 | $ | ||||||||||
| Granted | $ | ||||||||||
| Forfeited | ( | $ | |||||||||
| Vested | ( | $ | $ | ||||||||
| Outstanding at June 30, 2026 | $ | ||||||||||
At June 30, 2026, total unrecognized stock-based compensation expense related to restricted stock was $35.3 million, which is expected to be recognized over a weighted-average remaining period of 3.8 years.
During the three and six months ended June 30, 2026, stock-based compensation expense was $3.7 million and $7.3 million, respectively. During the three and six months ended June 30, 2025, stock-based compensation expense was $3.6 million and $7.3 million, respectively. Stock-based compensation is included in Selling, general and administrative expenses (“SG&A”) in the Unaudited Condensed Consolidated Statements of Operations.
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Note J - Commitments and Contingencies
Employment Agreements
Kforce has employment agreements with certain executives that provide for certain post-employment benefits under certain circumstances. At June 30, 2026, our liability would be approximately $30.9 million if, following a change in control, all of the executives under contract were terminated without cause by Kforce or if the executives resigned for good reason, and $11.7 million if, in the absence of a change in control, all of the executives under contract were terminated by Kforce without cause or if the executives resigned for good reason.
Litigation
We are involved in legal proceedings, claims and administrative matters that arise in the ordinary course of business, and we have made accruals with respect to certain of these matters, where appropriate, that are reflected in our unaudited condensed consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters for which an accrual has not been made, we have not yet determined that a loss is probable, or the amount of loss cannot be reasonably estimated. The outcome of any litigation is inherently uncertain, but we do not expect that these proceedings and claims, individually or in the aggregate, will have a material effect on our unaudited condensed consolidated financial statements; however, if decided adversely to us, or if we determine that settlement of particular litigation is appropriate, we may be subject to additional liabilities that could have a material adverse effect on our financial position, results of operations or cash flows. Kforce maintains liability insurance that insures us against workers’ compensation, personal and bodily injury, property damage, directors’ and officers’ liability, errors and omissions, cyber liability, employment practices liability and fidelity losses. There can be no assurance that Kforce’s liability insurance will cover all events or that the limits of coverage will be sufficient to fully cover all liabilities.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
EXECUTIVE SUMMARY
The following is an executive summary of what Kforce believes are highlights as of and for the six months ended June 30, 2026, which should be considered in the context of the additional discussions herein and in conjunction with the unaudited condensed consolidated financial statements and notes thereto.
•Revenue for the six months ended June 30, 2026 increased 2.3% to $679.7 million from $664.3 million in the comparable period in 2025. Revenue increased 2.1% and 4.9% for Technology and FA, respectively, primarily driven by increases in consultants on assignment.
•Flex revenue for the six months ended June 30, 2026 increased 2.3% to $666.1 million from $651.0 million in the comparable period in 2025. Flex revenue increased 2.1% and 5.8% for Technology and FA, respectively.
•Direct Hire revenue for the six months ended June 30, 2026 increased 2.1% to $13.6 million from $13.4 million in the comparable period in 2025.
•Gross profit margin for the six months ended June 30, 2026 increased 100 basis points to 27.9% from 26.9% in the comparable period in 2025 primarily driven by an increase in Flex gross profit margins and a greater percentage of Direct Hire revenue.
•Flex gross profit margin for the six months ended June 30, 2026 increased 100 basis points to 26.4% from 25.4% in the comparable period in 2025 primarily driven by improved bill and pay spreads.
•SG&A expenses as a percentage of revenue for the six months ended June 30, 2026 increased to 23.0% from 22.5% in the comparable period in 2025 primarily driven by higher performance-based compensation costs due to improved financial performance.
•Net income for the six months ended June 30, 2026 increased 8.9% to $20.2 million, or $1.19 diluted earnings per share, from $18.6 million, or $1.03 diluted earnings per share, for the six months ended June 30, 2025.
•The Firm returned $28.2 million of capital to our shareholders in the form of open market repurchases totaling $14.7 million and quarterly dividends totaling $13.5 million during the six months ended June 30, 2026.
•Cash used in operating activities was $6.7 million during the six months ended June 30, 2026, as compared to cash provided by operating activities of $18.6 million for the six months ended June 30, 2025. The change was primarily driven by an increase in trade receivables given the improvement in revenue trends.
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RESULTS OF OPERATIONS
Business Overview
Kforce is a leading domestic provider of technology and finance and accounting talent solutions to innovative and industry-leading companies. At June 30, 2026, Kforce employed over 1,600 associates and had more than 8,000 consultants on assignment. Kforce serves clients across a diverse set of industries and organizations of all sizes, but we place a particular focus on serving Fortune 500 and other leading companies.
There has been considerable discussion about whether our Firm and the broader sector can continue to deliver revenue growth given the much-speculated negative demand impact of AI tools and technologies. We are pleased to report that we have delivered three consecutive quarters of financial performance that have exceeded pre-pandemic and pre-AI averages. The revenue improvment that we have experienced in our business in the first half of 2026 is consistent with the improving macro demand environment for talent. Key indicators including the Institute for Supply Management (“ISM”) Services Purchasing Managers’ Index (“PMI”), American Staffing Association’s (“ASA”) Staffing Index and the Staffing Industry Analysts (“SIA”) Bullhorn Staffing Indicator have strengthened over the last several months. In addition, while overall U.S. job growth has moderated in recent months, recent gains have been increasingly concentrated in professional and business services, which are far more aligned to Kforce’s end markets than the growth drivers over the past couple of years.
We believe our results reflect disciplined execution and a meaningful shift in client behavior. We further believe that organizations are increasingly turning to flexible talent models to advance large backlogs of high-priority technology initiatives, particularly as AI accelerates transformation and CEOs remain measured in adding permanent headcount. Broader uncertainty, including geopolitical tensions and related volatility in global energy markets, has further reinforced the need for agility. We believe these dynamics highlight the value of flexible workforce solutions as clients adapt to near-term uncertainty while assessing the longer-term implications of emerging technologies on their businesses and talent strategies. We believe our go-to-market approach, shaped by our integrated strategy efforts, is gaining traction. Across Kforce, we see our people are operating more fully as One Kforce, bringing the full breadth of our capabilities to bear across our service offerings.
Based on data published by SIA, temporary employment figures and trends are important indicators of staffing demand from an economic standpoint. The national U.S. unemployment rate declined to 4.2% in June 2026 as compared to 4.4% in December 2025. In the latest U.S. staffing industry forecast published by SIA in March 2026, the technology temporary staffing industry is estimated to grow 1% in 2026.
Operating Results - Three and Six Months Ended June 30, 2026 and 2025
The following table presents certain items in our Unaudited Condensed Consolidated Statements of Operations as a percentage of revenue:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Revenue by segment: | ||||||||||||||
| Technology | 92.7 | % | 92.9 | % | 92.7 | % | 92.8 | % | ||||||
| FA | 7.3 | 7.1 | 7.3 | 7.2 | ||||||||||
| Total Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Revenue by type: | ||||||||||||||
| Flex | 97.9 | % | 98.2 | % | 98.0 | % | 98.0 | % | ||||||
| Direct Hire | 2.1 | 1.8 | 2.0 | 2.0 | ||||||||||
| Total Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Gross profit | 28.5 | % | 27.1 | % | 27.9 | % | 26.9 | % | ||||||
| Selling, general and administrative expenses | 22.7 | % | 22.2 | % | 23.0 | % | 22.5 | % | ||||||
| Depreciation and amortization | 0.4 | % | 0.4 | % | 0.4 | % | 0.4 | % | ||||||
| Income from operations | 5.4 | % | 4.5 | % | 4.5 | % | 4.0 | % | ||||||
| Income before income taxes | 5.1 | % | 4.1 | % | 4.3 | % | 3.8 | % | ||||||
| Net income | 3.5 | % | 3.1 | % | 3.0 | % | 2.8 | % | ||||||
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Revenue. The following table presents revenue by type for each segment and the percentage change from the prior period:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| (in thousands) | 2026 | Increase (Decrease) | 2025 | 2026 | Increase (Decrease) | 2025 | ||||||||||||||
| Technology | ||||||||||||||||||||
| Flex revenue | $ | 320,035 | 4.0 | % | $ | 307,844 | $ | 622,990 | 2.1 | % | $ | 610,279 | ||||||||
| Direct Hire revenue | 3,841 | 43.2 | % | 2,683 | 6,849 | 4.9 | % | 6,532 | ||||||||||||
| Total Technology revenue | $ | 323,876 | 4.3 | % | $ | 310,527 | $ | 629,839 | 2.1 | % | $ | 616,811 | ||||||||
| FA | ||||||||||||||||||||
| Flex revenue | $ | 21,794 | 6.0 | % | $ | 20,567 | $ | 43,067 | 5.8 | % | $ | 40,702 | ||||||||
| Direct Hire revenue | 3,661 | 13.6 | % | 3,222 | 6,789 | (0.6) | % | 6,831 | ||||||||||||
| Total FA revenue | $ | 25,455 | 7.0 | % | $ | 23,789 | $ | 49,856 | 4.9 | % | $ | 47,533 | ||||||||
| Total Flex revenue | $ | 341,829 | 4.1 | % | $ | 328,411 | $ | 666,057 | 2.3 | % | $ | 650,981 | ||||||||
| Total Direct Hire revenue | 7,502 | 27.0 | % | 5,905 | 13,638 | 2.1 | % | 13,363 | ||||||||||||
| Total Revenue | $ | 349,331 | 4.5 | % | $ | 334,316 | $ | 679,695 | 2.3 | % | $ | 664,344 | ||||||||
Flex Revenue. The key drivers of Flex revenue are the number of consultants on assignment, billable hours, the bill rate per hour and, to a limited extent, the amount of billable expenses incurred by Kforce.
Flex revenue for our Technology business increased 4.0% and 2.1% during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, primarily driven by an increase in consultants on assignment. In the third quarter, we expect Technology Flex revenue to increase in the low single digits sequentially and mid single digits year over year.
Our FA business experienced an increase in Flex revenue of 6.0% and 5.8% during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, primarily driven by an increase in consultants on assignment. In the third quarter, we expect FA Flex revenue to increase in the low single digits sequentially and year over year.
The following table presents the key drivers for the change in Flex revenue by segment over the prior period (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||
| June 30, 2026 vs. June 30, 2025 | June 30, 2026 vs. June 30, 2025 | |||||||||||||
| Key Drivers - Increase (Decrease) | Technology | FA | Technology | FA | ||||||||||
| Volume - hours billed | $ | 10,521 | $ | 1,237 | $ | 13,008 | $ | 2,178 | ||||||
| Bill rate | 1,851 | (18) | (6) | 185 | ||||||||||
| Billable expenses | (181) | 8 | (291) | 2 | ||||||||||
| Total change in Flex revenue | $ | 12,191 | $ | 1,227 | $ | 12,711 | $ | 2,365 | ||||||
The following table presents total Flex hours billed by segment and percentage change over the prior period:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| (in thousands) | 2026 | Increase (Decrease) | 2025 | 2026 | Increase (Decrease) | 2025 | ||||||||||||||
| Technology | 3,520 | 3.4 | % | 3,404 | 6,885 | 2.1 | % | 6,741 | ||||||||||||
| FA | 406 | 6.0 | % | 383 | 813 | 5.4 | % | 771 | ||||||||||||
| Total Flex hours billed | 3,926 | 3.7 | % | 3,787 | 7,698 | 2.5 | % | 7,512 | ||||||||||||
Direct Hire Revenue. The key drivers of Direct Hire revenue are the number of placements and the associated placement fee. Direct Hire revenue also includes conversion revenue, which may occur when a consultant initially assigned to a client on a temporary basis is later converted to a permanent placement for a fee.
Direct Hire revenue increased 27.0% and 2.1% during the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, which was primarily driven by an increase in placements. We expect Direct Hire to decrease in the third quarter due to seasonal impacts.
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Gross Profit. Gross profit is determined by deducting direct costs (primarily consultant compensation, payroll taxes and certain fringe benefits, as well as independent contractor costs) from total revenue. In addition, there are no consultant payroll costs associated with Direct Hire placements; thus, all Direct Hire revenue increases gross profit by the full amount of the placement fee.
The following table presents gross profit (gross profit as a percentage of total revenue) by segment and percentage change over the prior period:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| 2026 | Increase (Decrease) | 2025 | 2026 | Increase (Decrease) | 2025 | |||||||||||||||
| Technology | 27.6 | % | 4.9 | % | 26.3 | % | 27.1 | % | 3.8 | % | 26.1 | % | ||||||||
| FA | 39.3 | % | 3.1 | % | 38.1 | % | 38.2 | % | — | % | 38.2 | % | ||||||||
| Total gross profit percentage | 28.5 | % | 5.2 | % | 27.1 | % | 27.9 | % | 3.7 | % | 26.9 | % | ||||||||
Total gross profit percentage increased 140 and 100 basis points for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, primarily driven by an increase in Flex gross profit margins and a greater percentage of Direct Hire revenue.
Flex gross profit percentage (Flex gross profit as a percentage of Flex revenue) provides management with helpful insights into the other drivers of total gross profit percentage driven by our Flex business, such as changes in the spread between the consultants’ bill rate and pay rate, changes in payroll tax rates or benefits costs, as well as the impact of billable expenses, which provide no profit margin.
The following table presents the Flex gross profit percentage by segment and percentage change over the prior period:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| 2026 | Increase (Decrease) | 2025 | 2026 | Increase (Decrease) | 2025 | |||||||||||||||
| Technology | 26.8 | % | 4.7 | % | 25.6 | % | 26.3 | % | 4.0 | % | 25.3 | % | ||||||||
| FA | 29.1 | % | 2.1 | % | 28.5 | % | 28.5 | % | 2.5 | % | 27.8 | % | ||||||||
| Total Flex gross profit percentage | 26.9 | % | 4.3 | % | 25.8 | % | 26.4 | % | 3.9 | % | 25.4 | % | ||||||||
Our Flex gross profit percentage increased 110 and 100 basis points for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025.
•Technology Flex gross profit margins increased 120 and 100 basis points for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, which was primarily driven by improved bill and pay spreads. In the third quarter, we expect Technology Flex gross profit margins to remain fairly stable sequentially but to increase year over year.
•FA Flex gross profit margins increased 60 and 70 basis points for the three and six months ended June 30, 2026, respectively, as compared to the same periods in 2025, which was primarily driven by improved bill and pay spreads and lower healthcare costs. In the third quarter, we expect FA Flex gross profit margins to remain fairly stable sequentially and year over year.
The following table presents the key drivers for the change in Flex gross profit by segment over the prior period (in thousands):
| Three Months Ended | Six Months Ended | |||||||||||||
| June 30, 2026 vs. June 30, 2025 | June 30, 2026 vs. June 30, 2025 | |||||||||||||
| Key Drivers - Increase (Decrease) | Technology | FA | Technology | FA | ||||||||||
| Revenue impact (volume) | $ | 3,124 | $ | 349 | $ | 3,212 | $ | 658 | ||||||
| Profitability impact (bill rate) | 3,596 | 140 | 6,174 | 295 | ||||||||||
| Total change in Flex gross profit | $ | 6,720 | $ | 489 | $ | 9,386 | $ | 953 | ||||||
SG&A Expenses. Total compensation, commissions, payroll taxes and benefit costs as a percentage of SG&A represented 83.6% and 83.7% for the three and six months ended June 30, 2026, respectively, as compared to 84.6% and 84.5% for the comparable periods in 2025. Commissions and other bonus incentives are variable costs driven primarily by revenue and gross profit levels. Therefore, as those levels change, these expenses would also generally be anticipated to change.
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The following table presents certain components of SG&A as a percentage of total revenue:
| (in thousands) | 2026 | % of Revenue | 2025 | % of Revenue | ||||||||||
| Three Months Ended June 30, | ||||||||||||||
| Compensation, commissions, payroll taxes and benefits costs | $ | 66,411 | 19.0 | % | $ | 62,904 | 18.8 | % | ||||||
Other (1) | 12,995 | 3.7 | % | 11,466 | 3.4 | % | ||||||||
| Total SG&A | $ | 79,406 | 22.7 | % | $ | 74,370 | 22.2 | % | ||||||
| Six Months Ended June 30, | ||||||||||||||
| Compensation, commissions, payroll taxes and benefits costs | $ | 130,762 | 19.2 | % | $ | 126,380 | 19.0 | % | ||||||
Other (1) | 25,402 | 3.8 | % | 23,155 | 3.5 | % | ||||||||
| Total SG&A | $ | 156,164 | 23.0 | % | $ | 149,535 | 22.5 | % | ||||||
(1) Includes items such as credit loss expense, lease expense, professional fees, travel, communication and office-related expense, and certain other expenses.
SG&A as a percentage of revenue increased 50 basis points for the three and six months ended June 30, 2026, as compared to the same periods in 2025, which is primarily driven by higher performance-based compensation costs due to improved financial performance.
We continue to prioritize investments in our strategic initiatives, including the implementation of Workday as part of our back-office transformation program, integrated strategy efforts, the evolution of our nearshore and offshore delivery capabilities, and driving our strategy through leverage of AI.
Depreciation and Amortization. The following table presents depreciation and amortization expense and percentage change over the prior period by major category:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| (in thousands) | 2026 | Increase (Decrease) | 2025 | 2026 | Increase (Decrease) | 2025 | ||||||||||||||
| Fixed asset depreciation | $ | 635 | (3.8) | % | $ | 660 | $ | 1,274 | (7.2) | % | $ | 1,373 | ||||||||
| Capitalized software amortization | 661 | (9.5) | % | 730 | 1,326 | (10.5) | % | 1,481 | ||||||||||||
| Total Depreciation and amortization | $ | 1,296 | (6.8) | % | $ | 1,390 | $ | 2,600 | (8.9) | % | $ | 2,854 | ||||||||
Other Expense, Net. Other expense, net was $1.0 million for the three months ended June 30, 2026 and 2025. Other expense, net was $1.6 million for the six months ended June 30, 2026 and 2025. Other expense, net primarily includes interest expense related to outstanding borrowings under our credit facility.
Income Tax Expense. Income tax expense as a percentage of income before income taxes (our “effective tax rate”) was 30.5% and 25.4% for the six months ended June 30, 2026 and 2025, respectively. The increase in our effective tax rate was primarily attributable to higher nondeductible compensation expense under Internal Revenue Code Section 162(m), the expiration of the Work Opportunity Tax Credits program in 2025, and lower research and development tax credits associated with our strategic priorities.
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Non-GAAP Financial Measures
Revenue Growth Rates. “Revenue growth rates,” a non-GAAP financial measure, is defined by Kforce as revenue growth after removing the impacts on reported revenues from the changes in the number of billing days. Management believes this data is particularly useful because it aids in evaluating revenue trends over time. The impact of billing days is calculated by dividing each comparative period’s reported revenues by the number of billing days for the respective period to arrive at a per billing day amount for each quarter. Growth rates are then calculated using the per billing day amounts as a percentage change compared to the respective period. Management calculates the number of billing days for each reporting period based on the number of holidays and business days in the quarter.
| Sequential Growth Rates (GAAP) | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Q2 | Q1 | Q4 | Q3 | Q2 | ||||||||||||||||
| Technology Flex | 5.6% | (0.2)% | (0.2)% | (1.2)% | 1.8% | |||||||||||||||
| FA Flex | 2.4% | (5.6)% | 2.4% | 6.9% | 2.1% | |||||||||||||||
| Total Flex revenue | 5.4% | (0.6)% | (0.1)% | (0.7)% | 1.8% | |||||||||||||||
| Sequential Growth Rates (Non-GAAP) | ||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Q2 | Q1 | Q4 | Q3 | Q2 | ||||||||||||||||
| Billing Days | 64 | 63 | 62 | 64 | 64 | |||||||||||||||
| Technology Flex | 4.0% | (1.8)% | 3.0% | (1.2)% | 0.2% | |||||||||||||||
| FA Flex | 0.8% | (7.1)% | 5.7% | 6.9% | 0.5% | |||||||||||||||
| Total Flex revenue | 3.8% | (2.2)% | 3.2% | (0.7)% | 0.2% | |||||||||||||||
| Year-Over-Year Growth Rates (GAAP) | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| YTD | Q2 | Q1 | YTD | Q2 | Q1 | ||||||||||||||||||
| Technology Flex | 2.1% | 4.0% | 0.2% | (5.0)% | (5.0)% | (5.0)% | |||||||||||||||||
| FA Flex | 5.8% | 6.0% | 5.7% | (20.1)% | (16.8)% | (23.2)% | |||||||||||||||||
| Total Flex revenue | 2.3% | 4.1% | 0.5% | (6.1)% | (5.8)% | (6.4)% | |||||||||||||||||
| Year-Over-Year Growth Rates (Non-GAAP) | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| YTD | Q2 | Q1 | YTD | Q2 | Q1 | ||||||||||||||||||
| Billing Days | 127 | 64 | 63 | 127 | 64 | 63 | |||||||||||||||||
| Technology Flex | 2.1% | 4.0% | 0.2% | (4.3)% | (5.0)% | (3.5)% | |||||||||||||||||
| FA Flex | 5.8% | 6.0% | 5.7% | (19.5)% | (16.8)% | (22.0)% | |||||||||||||||||
| Total Flex revenue | 2.3% | 4.1% | 0.5% | (5.4)% | (5.8)% | (4.9)% | |||||||||||||||||
Free Cash Flow. “Free Cash Flow,” a non-GAAP financial measure, is defined by Kforce as net cash provided by operating activities determined in accordance with GAAP, less capital expenditures. Management believes this provides an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows and is useful information to investors as it provides a measure of the amount of cash generated from the business that can be used for strategic opportunities, including investing in our business, repurchasing common stock, paying dividends or making acquisitions. Free Cash Flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. Therefore, we believe it is important to view Free Cash Flow as a complement to, but not a replacement of, our Unaudited Condensed Consolidated Statements of Cash Flows.
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The following table presents a reconciliation of Cash (Used in) Provided by Operating Activities to Free Cash Flow:
| Six Months Ended June 30, | ||||||||
| (in thousands) | 2026 | 2025 | ||||||
| Cash (used in) provided by operating activities | $ | (6,728) | $ | 18,614 | ||||
| Capital expenditures | (7,194) | (8,290) | ||||||
| Free cash flow | (13,922) | 10,324 | ||||||
| Change in debt | 40,700 | 37,300 | ||||||
| Repurchases of common stock | (15,068) | (32,243) | ||||||
| Cash dividends | (13,522) | (13,951) | ||||||
| Proceeds from company-owned life insurance | — | 1,383 | ||||||
| Premiums paid for company-owned life insurance | — | (686) | ||||||
| Other | — | (4) | ||||||
| Change in cash and cash equivalents | $ | (1,812) | $ | 2,123 | ||||
Adjusted EBITDA. “Adjusted EBITDA,” a non-GAAP financial measure, is defined by Kforce as net income before depreciation and amortization; stock-based compensation expense; interest expense, net; and income tax expense. Adjusted EBITDA should not be considered a measure of financial performance under GAAP. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our past and future financial performance, and this presentation should not be construed as an inference by us that our future results will be unaffected by those items excluded from Adjusted EBITDA. Adjusted EBITDA is a key measure used by management to assess our operations including our ability to generate cash flows and our ability to repay our debt obligations, and management believes it provides a good metric of our core profitability in comparing our performance to our competitors, as well as our performance over different time periods. Consequently, management believes it is useful information to investors. The measure should not be considered in isolation or as an alternative to net income, cash flows or other financial statement information presented in the unaudited condensed consolidated financial statements as indicators of financial performance or liquidity. Also, Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.
In addition, although we excluded stock-based compensation expense because it is a non-cash expense, we expect to continue to incur stock-based compensation expense in the future and the associated stock issued may result in an increase in our outstanding shares of stock, which may result in the dilution of our shareholder ownership interest. We suggest that you evaluate these items and the potential risks of excluding such items when analyzing our financial position.
The following table includes a reconciliation of Net income to Adjusted EBITDA:
(in thousands) | 2026 | 2025 | ||||||
| Three Months Ended June 30, | ||||||||
| Net income | $ | 12,323 | $ | 10,449 | ||||
| Depreciation and amortization | 1,296 | 1,390 | ||||||
| Stock-based compensation expense | 3,718 | 3,618 | ||||||
| Interest expense, net | 982 | 1,018 | ||||||
| Income tax expense | 5,438 | 3,410 | ||||||
| Adjusted EBITDA | $ | 23,757 | $ | 19,885 | ||||
| Six Months Ended June 30, | ||||||||
| Net income | $ | 20,248 | $ | 18,594 | ||||
| Depreciation and amortization | 2,600 | 2,854 | ||||||
| Stock-based compensation expense | 7,308 | 7,274 | ||||||
| Interest expense, net | 1,631 | 1,582 | ||||||
| Income tax expense | 8,867 | 6,331 | ||||||
| Adjusted EBITDA | $ | 40,654 | $ | 36,635 | ||||
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LIQUIDITY AND CAPITAL RESOURCES
To meet our capital and liquidity requirements, we primarily rely on our operating cash flows, as well as borrowings under our Credit Facility (as defined below). At June 30, 2026 and December 31, 2025, we had $107.1 million and $66.4 million outstanding under our Credit Facility, respectively, and the borrowing availability was $91.8 million and $132.5 million, respectively, subject to certain covenants. At June 30, 2026, Kforce had $111.5 million in working capital compared to $88.5 million at December 31, 2025.
Cash Flows
Our business has historically generated a significant amount of operating cash flows, which allows us to balance deploying available capital towards: (i) investing in our strategic priorities that we expect will accelerate future revenue growth and profitability levels; (ii) our dividend and share repurchase programs; and (iii) maintaining sufficient liquidity for potential acquisitions or other strategic investments.
Cash used in operating activities was $6.7 million during the six months ended June 30, 2026, as compared to cash provided by operating activities of $18.6 million during the six months ended June 30, 2025. Our largest source of operating cash flows is the collection of trade receivables, and our largest use of operating cash flows is the payment of our associate and consultant compensation. The year-over-year decrease was primarily driven by higher trade receivables given the improvement in revenue trends.
Cash used in investing activities was $7.2 million during the six months ended June 30, 2026, and primarily consisted of cash used for capital expenditures. Cash used in investing activities during the six months ended June 30, 2025 was $7.6 million and primarily consisted of cash used for capital expenditures.
Cash provided by financing activities was $12.1 million during the six months ended June 30, 2026, as compared to $8.9 million of cash used in financing activities during the six months ended June 30, 2025. This change was primarily driven by decreases in repurchases of common stock and higher net proceeds on our Credit Facility.
The following table presents the cash flow impact of the common stock repurchase activity:
| Six Months Ended June 30, | ||||||||
(in thousands) | 2026 | 2025 | ||||||
| Open market repurchases | $ | 14,880 | $ | 31,984 | ||||
| Repurchased shares withheld for tax withholding upon vesting of restricted stock | 188 | 259 | ||||||
| Total cash flow impact from Repurchases of common stock | $ | 15,068 | $ | 32,243 | ||||
| Cash paid in current year for settlement of prior year repurchases | $ | 200 | $ | 260 | ||||
During the six months ended June 30, 2026 and 2025, Kforce’s Board of Directors (the “Board”) declared and paid quarterly dividends of $13.5 million ($0.80 per share) and $14.0 million ($0.78 per share), respectively, which represents a 3% increase on a per share basis. While the Board has declared and paid quarterly dividends since the fourth quarter of 2014, and intends to in the foreseeable future, dividends will be subject to determination by our Board each quarter following its review of, among other things, the Firm’s current and expected financial performance as well as the ability to pay dividends under applicable law.
We believe that existing cash and cash equivalents, operating cash flows and available borrowings under our Credit Facility will be adequate to meet the capital expenditure and working capital requirements of our operations for at least the next 12 months, and the foreseeable future, which we believe will provide us the flexibility to continue returning significant capital to our shareholders. However, a material deterioration in the macroeconomic environment or market conditions, among other things, could adversely affect operating results and liquidity, as well as the ability of our lenders to fund borrowings. Actual results could also differ materially from those indicated as a result of a number of factors, including the use of currently available resources for capital expenditures, investments, additional common stock repurchases or dividends.
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Credit Facility
On November 5, 2025, the Firm entered into a senior secured credit facility with Bank of America, N.A., as administrative and collateral agent, BofA Securities, Inc. and PNC Capital Markets LLC as joint lead arrangers, BofA Securities, Inc. as bookrunner and the lenders referred to therein (the “Credit Facility”). Under the Credit Facility, the Firm has a maximum borrowing capacity of $200.0 million, which includes a $10.0 million sublimit for the issuance of standby and commercial letters and $10.0 million sublimit for swingline loans, and may, subject to certain conditions and the participation of the lenders, be increased up to an aggregate additional amount of $150.0 million. At June 30, 2026, $107.1 million was outstanding and $91.8 million was available on our Credit Facility, and at December 31, 2025, $66.4 million was outstanding. At June 30, 2026, we are in compliance with all of the covenants contained in the Credit Facility as described in our 2025 Annual Report on Form 10-K, and we currently expect that we will be able to maintain compliance with these covenants.
Stock Repurchases
In October 2025, the Board approved an increase in our stock repurchase authorization, bringing the total authorization to $100.0 million. During the six months ended June 30, 2026, Kforce repurchased approximately 527 thousand shares of common stock on the open market at a total cost of approximately $14.7 million. In addition, $82.5 million remained available for further repurchases under the Board-authorized common stock repurchase program at June 30, 2026.
Contractual Obligations and Commitments
Other than the changes described elsewhere in this Quarterly Report, there have been no material changes during the period covered by this report on Form 10-Q to our contractual obligations previously disclosed in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report on Form 10-K.
CRITICAL ACCOUNTING ESTIMATES
There have been no material changes to our Critical Accounting Estimates previously disclosed in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2025 Annual Report on Form 10-K.
NEW ACCOUNTING STANDARDS
Refer to Note 1 - “Summary of Significant Accounting Policies” in the Notes to the Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data in our 2025 Annual Report on Form 10-K, for a discussion of new accounting standards.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
With respect to our quantitative and qualitative disclosures about market risk, there have been no material changes to the information included in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” in our 2025 Annual Report on Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
As of June 30, 2026, we carried out an evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act (the “Evaluation”), under the supervision and with the participation of our CEO and CFO, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 and 15d-15 under the Exchange Act (“Disclosure Controls”). Based on the Evaluation, our CEO and CFO concluded that the design and operation of our Disclosure Controls were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (2) accumulated and communicated to management, including the principal executive officer and the principal financial officer, as appropriate, to allow timely decisions regarding disclosure.
Changes in Internal Control over Financial Reporting
Management has evaluated, with the participation of our CEO and CFO, whether any changes in our internal control over financial reporting that occurred during our last fiscal quarter have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation we conducted, management has concluded that no such changes have occurred.
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Inherent Limitations of Internal Control Over Financial Reporting
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
CEO and CFO Certifications
Exhibits 31.1 and 31.2 are the Certifications of the CEO and the CFO, respectively. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section contains the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We are involved in legal proceedings, claims and administrative matters that arise in the ordinary course of business, and we have made accruals with respect to certain of these matters, where appropriate, that are reflected in our unaudited condensed consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters for which an accrual has not been made, we have not yet determined that a loss is probable, or the amount of loss cannot be reasonably estimated. The outcome of any litigation is inherently uncertain, but we do not expect that these proceedings and claims, individually or in the aggregate, will have a material effect on our unaudited condensed consolidated financial statements; however, if decided adversely to us, or if we determine that settlement of particular litigation is appropriate, we may be subject to additional liabilities that could have a material adverse effect on our financial position, results of operations or cash flows. Kforce maintains liability insurance that insures us against workers’ compensation, personal and bodily injury, property damage, directors’ and officers’ liability, errors and omissions, cyber liability, employment practices liability and fidelity losses. There can be no assurance that Kforce’s liability insurance will cover all events or that the limits of coverage will be sufficient to fully cover all liabilities.
ITEM 1A. RISK FACTORS.
There have been no material changes in the risk factors previously disclosed in our 2025 Annual Report on Form 10-K.
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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Purchases of Equity Securities by the Issuer
Purchases of common stock under the Board authorized stock repurchase plan (the “Plan”) are subject to certain price, market, volume and timing constraints, which are specified in the Plan.
The following table presents information with respect to our repurchases of Kforce Inc. common stock during the three months ended June 30, 2026:
| Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||
| April 1, 2026 to April 30, 2026 | 99,299 | $ | 29.46 | 99,299 | $ | 82,519,630 | ||||||||
| May 1, 2026 to May 31, 2026 | 3,362 | $ | 39.75 | — | $ | 82,519,630 | ||||||||
| June 1, 2026 to June 30, 2026 | — | $ | — | — | $ | 82,519,630 | ||||||||
| Total | 102,661 | $ | 29.80 | 99,299 | $ | 82,519,630 | ||||||||
(1) Includes 3,362 repurchased shares withheld for tax withholding upon vesting of restricted stock for the period from May 1, 2026 to May 31, 2026.
(2) In October 2025, the Board approved a change to the Plan increasing the available authorization to $100 million.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
ITEM 5. OTHER INFORMATION.
Insider Trading Arrangements
During the three months ended June 30, 2026, none of the Firm’s officers or directors adopted terminated
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ITEM 6. EXHIBITS.
| Exhibit Number | Description | ||||
| 3.1 | Amended and Restated Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 33-91738) filed with the SEC on April 28, 1995. | ||||
3.1a | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended. | ||||
3.1b | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended. | ||||
3.1c | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended. | ||||
3.1d | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on May 17, 2000. | ||||
3.1e | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-26058) filed with the SEC on March 29, 2002. | ||||
3.2 | Amended & Restated Bylaws, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on April 29, 2013. | ||||
31.1² | Certification by the Chief Executive Officer of Kforce Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
31.2² | Certification by the Chief Financial Officer of Kforce Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
32.1 | Certification by the Chief Executive Officer of Kforce Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 as furnished herewith. | ||||
32.2 | Certification by the Chief Financial Officer of Kforce Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 as furnished herewith. | ||||
| 101.1 | The following material from this Quarterly Report on Form 10-Q of Kforce Inc. for the period ended June 30, 2026, formatted in XBRL Part I, Item 1 of this Form 10-Q formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Statements of Operations; (ii) Unaudited Condensed Consolidated Balance Sheets; (iii) Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity; (iv) Unaudited Condensed Consolidated Statements of Cash Flows; and (v) related notes to these financial statements. | ||||
| 104 | Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101. | ||||
² | Filed herewith. | ||||
| * | Management contract or compensatory plan or arrangement. | ||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| KFORCE INC. | ||||||||||||||
| Date: | July 29, 2026 | By: | /s/ JEFFREY B. HACKMAN | |||||||||||
| Jeffrey B. Hackman | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
| (Principal Financial and Accounting Officer) | ||||||||||||||
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