Kelly Reports First-Quarter 2025 Earnings

TROY, Mich., May 08, 2025 (GLOBE NEWSWIRE) -- Kelly (Nasdaq: KELYA, KELYB), a leading specialty talent solutions provider, today announced results for the first quarter of 2025.

   -- Q1 revenue of $1.16 billion, up 11.5% year-over-year reflecting 
      previously disclosed acquisitions, and up 0.2% on an organic basis 
 
   -- Q1 operating earnings of $10.8 million; $22.1 million on an adjusted 
      basis, down 4.3% versus the prior year period 
 
   -- Q1 adjusted EBITDA of $34.9 million, up 4.8% versus the prior year; 
      adjusted EBITDA margin decreased 20 basis points (bps) to 3.0% 
 
   -- Company expects year-over-year revenue growth of 6.0% to 7.0% in Q2. Also 
      expects Q2 year-over-year adjusted EBITDA margin decline of 20 to 30 bps, 
      with anticipated margin expansion in Q3 and Q4, and for the full year. 

"In the first quarter, Kelly delivered organic revenue growth that was in-line with our expectations, and once again outperformed the market. Our performance was driven primarily by continued strength in Education, as well as growing demand for our higher-margin outcome-based solutions within the semiconductor and renewables sectors," said Peter Quigley, president and chief executive officer. "Through our ongoing focus on efficiency and effectiveness, we are well prepared to navigate this rapidly evolving macroeconomic environment while driving further progress on our specialty growth journey. By staying close with our customers and executing our strategic priorities, Kelly will be well positioned to capitalize when demand rebounds."

Financial Results for the thirteen-week period ended March 30, 2025:

   -- Revenue of $1.16 billion, an 11.5% increase compared to the corresponding 
      quarter of 2024 resulting primarily from the May 2024 acquisition of 
      Motion Recruitment Partners, LLC ("MRP"). Excluding the impact of the MRP 
      acquisition, revenue was up 0.2% on an organic basis, includes 
      approximately 0.8% of revenue decline due to reduced demand for U.S. 
      federal government contractors and growth of 6.3% in the Education 
      segment. 
 
   -- Operating earnings of $10.8 million, compared to earnings of $26.8 
      million reported in the first quarter of 2024. Adjusted earnings1 were 
      $22.1 million in the first quarter of 2025 and $23.1 million in the first 
      quarter of 2024. Adjusted EBITDA1 of $34.9 million, an increase of 4.9% 
      versus the prior year period. Adjusted EBITDA margin of 3.0%, a decrease 
      of 20 basis points driven primarily by near-term margin pressure in SET 
      reflecting timing of revenue trends and related expense actions. 
 
   -- Earnings per share was $0.16 compared to earnings per share of $0.70 in 
      the first quarter of 2024. On an adjusted basis1, earnings per share were 
      $0.39 in the first quarter of 2025 compared to $0.56 per share in the 
      corresponding quarter of 2024. The year-over-year decline includes $0.15 
      of increased net interest expense due to an elevated cash balance in the 
      prior year quarter and debt incurred in Q2 2024 in conjunction with the 
      MRP acquisition. 

(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.

Quarterly Cash Dividend:

Kelly also reported that on May 6, its board of directors declared a dividend of $0.075 per share. The dividend is payable on June 3, 2025 to stockholders of record as of the close of business on May 19, 2025.

In conjunction with its earnings release, Kelly has published a financial presentation and will host a live webcast of a conference call with financial analysts at 9 a.m. ET on May 8 to review the results from the quarter and answer questions. 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, 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) dependency on first 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 duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

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 more than 400,000 people with work every year. Our suite of outsourcing and consulting services 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 2024 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. AND SUBSIDIARIES 
                     CONSOLIDATED STATEMENTS OF EARNINGS 
             FOR THE 13 WEEKS ENDED MARCH 30, 2025 AND MARCH 31, 
                                     2024 
                                 (UNAUDITED) 
               (In millions of dollars except per share data) 
                                                                       % 
                         2025          2024         Change          Change 
                        -------       -------       ------        ----------- 
 
Revenue from services  $1,164.9    $  1,045.1    $  119.8           11.5    % 
 
Cost of services          928.4         839.4        89.0           10.6 
                        -------       -------       ----- 
 
Gross profit              236.5         205.7        30.8           15.0 
 
Selling, general and 
 administrative 
 expenses                 225.7         190.5        35.2           18.5 
 
Gain on sale of EMEA 
 staffing operations         --         (11.6)       11.6             NM 
 
Earnings from 
 operations                10.8          26.8       (16.0)         (59.8) 
 
Gain on forward 
 contract                    --           1.2        (1.2)            NM 
 
Other income 
 (expense), net            (3.2)          1.8        (5.0)        (271.3) 
                        -------       -------       ----- 
 
Earnings before taxes       7.6          29.8       (22.2)         (74.6) 
 
Income tax expense          1.8           4.0        (2.2)         (54.7) 
 
Net earnings           $    5.8    $     25.8    $  (20.0)         (77.7) 
                        =======       =======       ===== 
 
Basic earnings per 
 share                 $   0.16    $     0.71    $  (0.55)         (77.5) 
Diluted earnings per 
 share                 $   0.16    $     0.70    $  (0.54)         (77.1) 
 
 
STATISTICS: 
 
Permanent placement 
 revenue (included in 
 revenue from 
 services)             $   11.5    $      8.0    $    3.5           43.2    % 
 
Gross profit rate          20.3    %     19.7    %    0.6   pts. 
 
Adjusted EBITDA        $   34.9    $     33.3    $    1.6 
Adjusted EBITDA 
 margin                     3.0    %      3.2    %   (0.2)  pts. 
 
Effective income tax 
 rate                      24.0    %     13.5    %   10.5   pts. 
 
Average number of 
shares outstanding 
(millions): 
   Basic                   35.0          35.4 
   Diluted                 35.5          35.8 
 
 
 
                 KELLY SERVICES, INC. AND SUBSIDIARIES 
                          SEGMENT INFORMATION 
                              (UNAUDITED) 
                        (In millions of dollars) 
We utilize business unit profit (loss) to evaluate 

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