TROY, Mich., May 07, 2026 (GLOBE NEWSWIRE) -- Kelly (Nasdaq: KELYA, KELYB), a leading specialty talent solutions provider, today announced results for the first quarter of 2026.
-- Q1 revenue of $1.0 billion, reflects notable improvement in the
year-over-year performance versus the prior quarter driven by strength in
the ETM segment, down 10.7% year-over-year; underlying revenue excluding
previously disclosed discrete items down approximately 3.3%
year-over-year, which improved 60 basis points versus the prior quarter
-- Q1 adjusted SG&A decline of 10.3% reflects the third straight quarter of
year-over-year reduction of approximately 10% or more and continued
momentum on structural and demand-driven expense optimization initiatives
-- Q1 operating loss of $5.1 million; $4.1 million of operating earnings on
an adjusted basis
-- Q1 adjusted EBITDA of $15.8 million and adjusted EBITDA margin of 1.5%
reflects a 20 basis point improvement in the year-over-year decline
relative to the prior quarter
-- Company affirms expectation of improved year-over-year performance for
revenue and adjusted EBITDA margin each successive quarter in 2026, and
return to organic revenue growth and adjusted EBITDA margin expansion in
the second half of 2026
Chris Layden, chief executive officer, said, "In the first quarter, Kelly's disciplined execution against our growth and efficiency priorities continued to stabilize the business. Revenue exceeded our expectations and adjusted EBITDA was in line with our outlook, driven by sequential improvement in ETM and pockets of growth in SET. With our technology modernization and go-to-market initiatives on track and our pipeline continuing to gain momentum, we remain confident in our ability to deliver revenue growth and margin expansion in the second half of the year."
Financial Results for the thirteen-week period ended March 29, 2026:
Revenue of $1.0 billion, a 10.7% decrease compared to the corresponding quarter of 2025. Discrete impacts associated with the previously disclosed reduced demand for U.S. federal government contractors in the SET segment and from three large commercial customers in the ETM segment totaled approximately 7.4%, resulting in an underlying revenue decline of approximately 3.3%. Favorable performance areas within underlying revenue include improved demand in the ETM segment, including growth in each of the talent solutions specialties, and within the SET segment growth in the Telecom specialty and improved sequential performance in the Science and Engineering specialties. More than offsetting these items are continued lower demand in the other specialties within the SET segment, largely the technology specialty, and a decline in the Education segment driven by delayed contract decisions, elevated weather-related school closures and declines in student enrollment in key markets.
Operating loss of $5.1 million, compared to earnings of $10.8 million reported in the first quarter of 2025. Adjusted earnings(1) were $4.1 million in the first quarter of 2026 and $22.1 million in the first quarter of 2025. Adjusted EBITDA(1) of $15.8 million, a decrease of 54.7% versus the prior year period. Adjusted EBITDA margin of 1.5%, a decrease of 150 basis points ("bps") driven primarily by near-term margin pressure in ETM, Education, and SET reflecting lower gross margins and timing of revenue trends, partially offset by volume-related and structural expense management actions including benefits from our acquisition integration and technology modernization efforts.
Income tax benefit of $0.8 million, compared to income tax expense of $1.8 million reported in the first quarter of 2025. On an adjusted basis(1) , income tax expense of $1.5 million, compared to income tax expense of $4.7 million in the first quarter of 2025.
Loss per share was $0.17 compared to earnings per share of $0.16 in the first quarter of 2025. On an adjusted basis(1) , earnings per share were $0.03 in the first quarter of 2026 compared to $0.39 per share in the corresponding quarter of 2025.
(1) Adjusted measures represent non-GAAP financial measures. Refer to our reconciliation of non-GAAP financial measures to the most closely related GAAP measure included in this document.
Financial Outlook For Fiscal 2026:
The Company's 2026 financial outlook remains unchanged from the initial view previously disclosed, assumes no material change in the macroeconomic or industry dynamics relative to current trends, and is as follows:
-- Second Quarter of 2026 -- Expect year-over-year improvement relative to
first quarter, with overall revenue decline of 7% to 9%, which includes
at least 100 bps of improvement on an underlying basis excluding discrete
customer impacts . Adjusted EBITDA margin of at least 2.5%, representing
approximately 100 bps improvement relative to first quarter and
significant reduction in year-over-year decline relative to the past two
quarters.
-- Second Half of the Year -- Assuming no new material impacts, expect
relative improvement in year-over-year performance each successive
quarter for both revenue and adjusted EBITDA margin resulting in modest
year-over-year revenue growth and measurable adjusted EBITDA margin
expansion in the second half of the year.
Quarterly Cash Dividend:
Kelly also reported that on May 5, its board of directors declared a dividend of $0.075 per share. The dividend is payable on June 2, 2026 to stockholders of record as of the close of business on May 18, 2026.
In conjunction with its earnings release, Kelly has published a financial presentation and will host a live webcast of a conference call at 9 a.m. ET on May 7 to review the financial and operation results from the quarter. The presentation and a link to the live webcast will be accessible through the Company's public website on the Investor Relations page under Events & Presentations. The webcast will be recorded, and a replay will be available within one hour of completion of the event through the same link as the live webcast.
Forward-Looking Statements:
This release contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Kelly's financial expectations, are forward-looking statements. Factors that could cause actual results to differ materially from those contained in this release include, but are not limited to, (i) changing market and economic conditions, (ii) disruption in the labor market and weakened demand for human capital resulting from technological advances, competitive pressures and pricing, loss of large corporate customers and government contractor requirements, (iii) the impact of laws and regulations (including federal, state and international tax laws), (iv) unexpected changes in claim trends on workers' compensation, unemployment, disability and medical benefit plans, (v) litigation and other legal liabilities (including tax liabilities) in excess of our estimates, (vi) our ability to achieve our business's anticipated growth strategies, (vii) our future business development, results of operations and financial condition, (viii) damage to our brands, (ix) dependence on third parties for the execution of critical functions, (x) conducting business in foreign countries, including foreign currency fluctuations, (xi) availability of temporary workers with appropriate skills required by customers, (xii) cyberattacks or other breaches of network or information technology security, and (xiii) other risks, uncertainties and factors discussed in this release and in the Company's filings with the Securities and Exchange Commission. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. All information provided in this press release is as of the date of this press release and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
About Kelly$(R)$
Kelly Services, Inc. (Nasdaq: KELYA, KELYB) helps companies recruit and manage skilled workers and helps job seekers find great work. Since inventing the staffing industry in 1946, we have become experts in the many industries and local and global markets we serve. With a network of suppliers and partners around the world, we connect approximately 375,000 people with work every year. Our suite of outsourcing and consulting services and solutions ensures companies have the people they need, when and where they are needed most. Headquartered in Troy, Michigan, we empower businesses and individuals to access limitless opportunities in industries such as science, engineering, technology, education, manufacturing, retail, finance, and energy. Revenue in 2025 was $4.3 billion. Learn more at kellyservices.com.
KLYA-FIN
ANALYST & MEDIA CONTACT:
Scott Thomas
(248) 251-7264
scott.thomas@kellyservices.com
KELLY SERVICES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE 13 WEEKS ENDED MARCH 29, 2026 AND MARCH 30,
2025
(UNAUDITED)
(in millions, except per share data)
2026 2025 Change % Change(1)
------- ------- ----------- -----------
Revenue from services $1,040.7 $1,164.9 $ (124.2) (10.7)%
Cost of services 844.3 928.4 (84.1) (9.1)
------- -------
Gross profit 196.4 236.5 (40.1) (17.0)
Selling, general and
administrative
expenses 199.3 225.7 (26.4) (11.7)
Asset impairment
charge 2.2 -- 2.2 NM
Earnings (loss) from
operations (5.1) 10.8 (15.9) NM
Other income
(expense), net (1.6) (3.2) 1.6 50.0
------- -------
Earnings (loss)
before taxes (6.7) 7.6 (14.3) NM
Income tax expense
(benefit) (0.8) 1.8 (2.6) (144.4)
Net earnings (loss) $ (5.9) $ 5.8 (11.7) NM
======= =======
Basic earnings (loss)
per share $ (0.17) $ 0.16 $ (0.33) NM
Diluted earnings
(loss) per share $ (0.17) $ 0.16 $ (0.33) NM
STATISTICS:
Permanent placement
income (included in
revenue from
services) $ 10.9 $ 11.5 $ (0.6) (5.2)%
Gross profit rate 18.9% 20.3% (1.4) pts.
Adjusted EBITDA $ 15.8 $ 34.9 $ (19.1) (54.7)%
Adjusted EBITDA
margin 1.5% 3.0% (1.5)pts.
Effective income tax
rate 11.6% 24.0% (12.4) pts.
Average shares
outstanding:
Basic 34.4 35.0
Diluted 34.4 35.5
(1) Reported percentage changes are computed based on millions. Prior year percent changes were computed based on actual amounts in thousands.
KELLY SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions)
March 29, 2026 December 28, 2025 March 30, 2025
----------------- ------------------ ------------------
Current Assets
Cash and
equivalents $ 25.6 $ 33.0 $ 28.2
Trade accounts
receivable, less
allowances of
$10.8, $10.0 and
$10.6,
respectively 1,216.0 1,188.7 1,250.9
Prepaid expenses
and other
current assets 57.2 46.6 71.9
Total current
assets 1,298.8 1,268.3 1,351.0
Noncurrent Assets
Property and
equipment, net 18.8 20.5 23.7
Operating lease
right-of-use
assets 37.6 42.9 45.9
Deferred taxes 158.2 163.2 331.1
Retirement plan
assets 283.0 289.7 253.8
Goodwill, net 202.1 202.1 304.1
Intangibles, net 218.8 226.2 248.4
Other assets 37.7 37.7 36.9
Total noncurrent
assets 956.2 982.3 1,243.9
--------- --------- --- ----------
Total Assets $ 2,255.0 $ 2,250.6 $ 2,594.9
Current Liabilities
Accounts payable
and accrued
liabilities $ 621.6 $ 631.4 $ 597.0
Operating lease
liabilities 11.4 12.3 12.2
Accrued payroll
and related
taxes 147.2 140.9 178.7
Accrued workers'
compensation and
other claims 21.3 20.9 18.0
Income and other
taxes 17.1 16.3 17.0
Total current
liabilities 818.6 821.8 822.9
Noncurrent
Liabilities
Long-term debt 130.5 101.9 204.6
Operating lease
liabilities 42.0 44.9 49.3
Accrued workers'
compensation and
other claims 34.7 34.2 32.0
Accrued
retirement
benefits 253.6 263.7 236.4
Other long-term
liabilities 7.1 7.6 9.2
Total noncurrent
liabilities 467.9 452.3 531.5
Commitments and
contingencies (see
Contingencies
footnote)
Stockholders'
Equity
Common Stock 38.5 38.5 38.5
Treasury Stock (56.7) (63.7) (56.1)
Paid-in capital 31.1 36.3 30.5
Earnings invested
in the business 956.5 965.1 1,233.2
Accumulated other
comprehensive
income (loss) (0.9) 0.3 (5.6)
--------- --------- --- ----------
Total
stockholders'
equity 968.5 976.5 1,240.5
--------- --------- --- ----------
Total Liabilities
and Stockholders'
Equity $ 2,255.0 $ 2,250.6 $ 2,594.9
========= ========= === ==========
STATISTICS:
Working Capital $ 480.2 $ 446.5 $ 528.1
Current Ratio 1.6 1.5 1.6
Debt-to-capital % 11.9% 9.4% 14.2%
Global Days Sales
Outstanding 64 61 61
Year-to-Date Free
Cash Flow $ (26.5) $ 114.1 $ 21.4
KELLY SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 13 WEEKS ENDED MARCH 29, 2026 AND MARCH 30,
2025
(UNAUDITED)
(in millions)
2026 2025
Cash flows from operating activities:
Net earnings (loss) $ (5.9) $ 5.8
Adjustments to reconcile net earnings to net cash
from operating activities:
Asset impairment charge 2.2 --
Deferred income taxes 5.0 (0.8)
Depreciation and amortization 9.9 11.0
Operating lease asset amortization 2.6 2.6
Provision for credit losses and sales allowances 1.2 3.0
Stock-based compensation 3.4 3.7
Other, net 0.3 (0.3)
Changes in operating assets and liabilities
Accounts receivable (26.3) 10.5
Other assets (4.5) 0.6
Accounts payable (7.3) (24.2)
Other liabilities (6.0) 12.0
------ ------
Net cash (used in) from operating activities (25.4) 23.9
Cash flows from investing activities:
Capital expenditures (1.1) (2.5)
Proceeds from sale of PersolKelly investment -- 6.4
Other investing activities (0.1) (0.7)
------ ------
Net cash (used in) from investing activities (1.2) 3.2
Cash flows from financing activities:
Proceeds from long-term debt 389.5 412.3
Payments on long-term debt (360.9) (447.1)
Dividend payments (2.7) (2.8)
Payments of tax withholding for stock awards (1.4) (1.8)
Other financing activities (0.3) (0.1)
------ ------
Net cash from (used in) financing activities 24.2 (39.5)
Effect of exchange rates on cash, cash equivalents
and restricted cash (5.8) 1.3
------ ------
Net change in cash, cash equivalents and
restricted cash (8.2) (11.1)
Cash, cash equivalents and restricted cash at
beginning of period 37.7 45.6
------ ------
Cash, cash equivalents and restricted cash at end
of period $ 29.5 $ 34.5
====== ======
KELLY SERVICES, INC.
SEGMENT INFORMATION
(UNAUDITED)
(in millions)
We utilize business unit profit (loss) to evaluate
the performance of our segments. Business unit profit
(loss) and SG&A expenses as presented in the segment
information table below do not include depreciation
and amortization expenses.
First Quarter
----------------------------------
2026 2025 % Change
----- ----------
Enterprise Talent Management
Revenue from services $459.2 $529.1 (13.2)%
Gross profit 85.6 107.3 (20.2)
Adjusted SG&A expenses 86.9 98.3 (11.6)
Integration, realignment and
restructuring charges(2) -- 2.7 NM
Total SG&A expenses 86.9 101.0 (14.0)
Business unit profit (loss) (1.3) 6.3 NM
Adjusted business unit profit
(loss) (1.3) 9.0 NM
Gross profit rate 18.6% 20.3% (1.7) pts.
Science, Engineering & Technology
Revenue from services $289.2 $327.3 (11.6)%
Gross profit 71.8 83.0 (13.5)
Adjusted SG&A expenses 57.3 68.0 (15.7)
Integration, realignment and
restructuring charges(2) 0.3 1.1 (72.7)
Total SG&A expenses 57.6 69.1 (16.6)
Asset impairment charge(5) 2.2 -- NM
Business unit profit (loss) 12.0 13.9 (13.7)
Adjusted business unit profit
(loss) 14.5 15.0 (3.3)
Gross profit rate 24.8% 25.4% (0.6) pts.
Education
Revenue from services $294.1 $309.0 (4.8)%
Gross profit 39.0 46.2 (15.6)
Adjusted SG&A expenses 26.6 26.9 (1.1)
Integration, realignment and
restructuring charges(2) 0.1 -- NM
Total SG&A expenses 26.7 26.9 (0.7)
Business unit profit (loss) 12.3 19.3 (36.3)
Adjusted business unit profit
(loss) 12.4 19.3 (35.8)
Gross profit rate 13.3% 15.0% (1.7) pts.
KELLY SERVICES, INC.
REVENUE FROM SERVICES BY SERVICE TYPE
(UNAUDITED)
(in millions)
First Quarter 2026
------------------------------------------------------------------
Staffing Outcome-based Talent Permanent
Services Services Solutions Placement Total
---------- --------------- ----------- ----------- -----------
Enterprise
Talent
Management $ 229.3 $ 106.8 $ 121.3 $ 1.8 $ 459.2
Science,
Engineering
&
Technology 168.6 112.2 -- 8.4 289.2
Education 293.4 -- -- 0.7 294.1
------ ---- --------- ------- --- ------ -------
Total Segment
Revenue $ 691.3 $ 219.0 $ 121.3 $ 10.9 $1,042.5
------ ---- --------- ------- --- ------ -------
Intersegment (1.8)
-------
Total Revenue
from
Services $1,040.7
=======
First Quarter 2025
------------------------------------------------------------------
Staffing Outcome-based Talent Permanent
Services Services Solutions Placement Total
---------- --------------- ----------- ----------- -----------
Enterprise
Talent
Management $ 275.8 $ 133.2 $ 117.8 $ 2.3 $ 529.1
Science,
Engineering
&
Technology 209.8 109.4 -- 8.1 327.3
Education 307.9 -- -- 1.1 309.0
------ ---- --------- ------- --- ------ -------
Total Segment
Revenue $ 793.5 $ 242.6 $ 117.8 $ 11.5 $1,165.4
------ ---- --------- ------- --- ------ -------
Intersegment (0.5)
-------
Total Revenue
from
Services $1,164.9
=======
KELLY SERVICES, INC.
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(in millions, except per share data)
First Quarter
------------------
Adjusted SG&A Expenses: 2026 2025
-----
As reported $199.3 $225.7
Integration, realignment and restructuring
charges(2) (4.7) (10.7)
Transaction costs((3) () (0.8) (0.3)
Executive transition costs((4) () (1.5) (0.3)
----- -----
Adjusted SG&A expenses $192.3 $214.4
===== =====
First Quarter
-----------------
Adjusted earnings (loss) from operations: 2026 2025
----
As reported $ (5.1) $10.8
Integration, realignment and restructuring charges((2)
() 4.7 10.7
Transaction costs((3) () 0.8 0.3
Executive transition costs((4) () 1.5 0.3
Asset impairment charge((5) 2.2 --
----- ----
Adjusted earnings from operations $ 4.1 $22.1
===== ====
First Quarter
-----------------
Adjusted income tax expense (benefit): 2026 2025
----
Income tax expense (benefit) $ (0.8) $ 1.8
Taxes on integration, realignment and restructuring
charges(2) 1.2 2.7
Taxes on transaction costs(3) 0.2 0.1
Taxes on executive transition costs(4) 0.4 0.1
Taxes on asset impairment charge(5) 0.5 --
Adjusted income tax expense (benefit) $ 1.5 $ 4.7
===== ====
First Quarter
-----------------
Adjusted net earnings and earnings per share: 2026 2025
----
Net earnings (loss) $ (5.9) $ 5.8
Integration, realignment and restructuring charges,
net of taxes((2) () 3.5 8.0
Transaction costs, net of taxes((3) () 0.6 0.3
Executive transition costs, net of taxes((4) () 1.1 0.2
Asset impairment charge, net of taxes((5) () 1.7 --
----- ----
Adjusted net earnings $ 1.0 $14.3
===== ====
Diluted earnings (loss) per share $ (0.17) $0.16
Adjusted diluted earnings per share $ 0.03 $0.39
Note: Earnings per share amounts for each quarter are required to be computed independently and may not equal the amounts computed for the total year. Adjusted diluted earnings per share reflects the impact of potentially dilutive securities.
KELLY SERVICES, INC.
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
(in millions)
First Quarter
Total Adjusted EBITDA: 2026 2025
---- ----
Net earnings (loss) $(5.9) $ 5.8
Other (income) expense, net 1.6 3.1
Income tax expense (benefit) (0.8) 1.8
Depreciation and amortization(1) 11.7 12.8
---- ----
EBITDA 6.6 23.5
Integration, realignment and restructuring
charges((2) () 4.7 10.7
Transaction costs((3) () 0.8 0.4
Executive transition costs((4) () 1.5 0.3
Asset impairment charge((5) () 2.2 --
Adjusted EBITDA $15.8 $34.9
==== ====
Adjusted EBITDA margin 1.5% 3.0%
First Quarter 2026
--------------------------------------------------------------
Business Unit
Adjusted Enterprise Talent Science, Engineering &
EBITDA: Management Technology Education
---------------------- ----------------------- -------------
Business unit
profit
(loss) $ (1.3) $ 12.0 $ 12.3
Integration,
realignment
and
restructuring
charges(2) -- 0.3 0.1
Asset
impairment
charge(5) -- 2.2 --
---- ------ -------- ----- ----- --------- -----
Adjusted
EBITDA $ (1.3) $ 14.5 $ 12.4
==== ====== ======= ===== ===== ========= =====
Adjusted
EBITDA
margin (0.3)% 5.0% 4.2%
First Quarter 2025
--------------------------------------------------------------
Enterprise Talent Science, Engineering &
Management Technology Education
---------------------- ----------------------- -------------
Business unit
profit
(loss) $ 6.3 $ 13.9 $ 19.3
Integration,
realignment
and
restructuring
charges(2) 2.7 1.1 --
---- ------ -------- ----- ----- --------- -----
Adjusted
EBITDA $ 9.0 $ 15.0 $ 19.3
==== ====== ======== ===== ===== ========= =====
Adjusted
EBITDA
margin 1.7% 4.6% 6.2%
First Quarter
-----------------
Free cash flows: 2026 2025
----
Net cash (used in) from operating activities $(25.4) $23.9
Capital expenditures (1.1) (2.5)
----- ----
Free Cash Flow $(26.5) $21.4
===== ====
KELLY SERVICES, INC.
RECONCILIATION OF NON-GAAP MEASURES
(UNAUDITED)
Management uses adjusted EBITDA (adjusted earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA Margin (percent of total GAAP revenue) which Management believes is useful to compare operating performance compared to prior periods and uses it in conjunction with GAAP measures to assess performance. Our calculation of adjusted EBITDA may not be consistent with similarly titled measures of other companies and should be used in conjunction with GAAP measurements. Management also uses year-to-date free cash flow (operating cash flows less capital expenditures) to indicate the change in cash balances arising from operating activities, net of working capital needs and expenditures on fixed assets.
Management believes that the non-GAAP (U.S. Generally Accepted Accounting Principles) information excluding items such as integration, realignment and restructuring charges, transaction costs, executive transition costs and asset impairment charges are useful to understand the Company's fiscal 2026 financial performance and increases comparability. Specifically, Management believes that removing the impact of these items allows for a meaningful comparison of current period operating performance with the operating results of prior periods. Management also believes that such measures are used by those analyzing performance of companies in the staffing industry to compare current performance to prior periods and to assess future performance.
These non-GAAP measures may have limitations as analytical tools because they exclude items which can have a material impact on cash flow and earnings per share. As a result, Management considers these measures, along with reported results, when it reviews and evaluates the Company's financial performance. Management believes that these measures provide greater transparency to investors and provide insight into how Management is evaluating the Company's financial performance. Non-GAAP measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
(1) Represents total company depreciation and amortization of intangibles, including the amortization of hosted software.
(2) Integration, realignment and restructuring charges in the first quarter 2026 and 2025 reflect various initiatives aimed at integrating MRP and other prior acquisitions and further aligning processes and technology across the Company. The costs incurred associated with these initiatives are summarized in the table below:
First Quarter
-----------------
2026 2025
-----
IT-related charges $ 3.5 $ 5.3
Severance 0.3 4.4
Fees and other costs 0.9 1.0
----- -----
Total integration and realignment costs $ 4.7 $ 10.7
===== =====
(3) Transaction costs in 2026 primarily related to costs incurred in connection with our controlling shareholder change in the first quarter of 2026. Transaction costs in 2025 include costs incurred directly related to the sale of the EMEA staffing operations, which includes employee termination costs and transition costs.
(4) Executive transition costs in 2026 represent non-recurring expenses primarily associated with our segment leader changes in 2025 and 2026. Executive transition costs in 2025 represent expenses associated with our CEO transition in 2025.
(5) Asset impairment charge in 2026 relates to certain right-of-use assets and reflects the Company's ongoing realignment of our lease portfolio.
(END) Dow Jones Newswires
May 07, 2026 07:31 ET (11:31 GMT)