TROY, Mich., Feb. 12, 2026 (GLOBE NEWSWIRE) -- Kelly (Nasdaq: KELYA, KELYB), a leading specialty talent solutions provider, today announced fourth-quarter and full-year 2025 earnings.

   -- Full-year revenue of $4.3 billion, down 1.9% as reported and flat 
      excluding previously disclosed acquisitions and the discrete impacts 
 
   -- Full-year free cash flow of $114 million, a sixfold increase versus the 
      prior year. Completed $10 million of Class A share repurchases during Q4, 
      with a total of $158 million of capital deployed towards debt repayment, 
      share repurchases and dividends for the year 
 
   -- Q4 adjusted SG&A decline of 11.1% reflects momentum on structural and 
      demand-driven expense optimization initiatives, including acquisition 
      integration and technology modernization efforts 
 
   -- Q4 operating loss of $0.7 million; $8.3 million of operating earnings on 
      an adjusted basis 
 
   -- Q4 adjusted EBITDA of $21.0 million; adjusted EBITDA margin of 2.0%, 
      full-year adjusted EBITDA margin of 2.6% 
 
   -- Company expects to return to organic revenue growth and adjusted EBITDA 
      margin expansion in the second half of 2026 

Chris Layden, chief executive officer, said, "In the fourth quarter, we capitalized on positive trends in each of our segments and delivered results that reflect our progress on stabilizing Kelly's performance. We also completed the first significant milestone in our technology modernization initiative, completing the consolidation of our SET acquisitions onto a unified, best-in-class platform that will soon be deployed across SET and the entire enterprise. We begin 2026 with clear organic growth and efficiency drivers which we expect will position Kelly to deliver year-over-year growth and margin expansion in the second half of the year."

Financial Results for the 13-week period ended December 28, 2025:

Revenue of $1.1 billion, a 11.9% decrease compared to the corresponding quarter of 2024, primarily driven by lower demand in our ETM and SET segments, partially offset by growth of 1.3% in the Education segment. Discrete impacts associated with reduced demand for U.S. federal government contractors and from three large commercial customers totaled approximately 8%, resulting in an underlying revenue decline of approximately 3.9%.

Operating loss of $0.7 million compared to a loss of $56.7 million reported in the fourth quarter of 2024. Adjusted earnings(1) were $8.3 million in the fourth quarter of 2025 and $29.2 million in the fourth quarter of 2024. Adjusted EBITDA(1) of $21.0 million, down 51.7% versus the prior year period. Adjusted EBITDA(1) margin of 2.0%, a decrease of 170 bps driven primarily by near-term gross margin pressure in SET and ETM due primarily to employee-related costs and business mix.

Income tax expense of $126.2 million, compared to income tax benefit of $23.8 million reported in the fourth quarter of 2024. Current quarter expense reflects a $127.9 million valuation allowance increase related to work opportunity credit and foreign tax credit carryforwards due to cumulative losses in recent years including goodwill impairments. On an adjusted basis(1) , income tax expense of $0.8 million, compared to income tax benefit of $2.1 million in the fourth quarter of 2024.

Loss per share was $3.69 compared to a loss per share of $0.90 in the fourth quarter of 2024. On an adjusted basis(1) , earnings per share were $0.16 compared to $0.79 per share in the corresponding quarter of 2024.

Financial results for the 52-week period ended December 28, 2025:

Revenue of $4.3 billion, down 1.9% compared to the prior year. Excluding the impact of the May 2024 acquisition of MRP, revenue was down 6.2% on an organic basis driven primarily by a 6% decline due to discrete impacts associated with reduced demand for U.S. federal government contractors and from three large commercial customers. The Education segment grew 3.9% for the full year.

Operating loss of $69.8 million compared to a loss of $15.1 million reported in 2024; both years reflect non-cash impairment charges of $102.0 million and $86.3 million, respectively. Adjusted earnings(1) were $59.3 million in 2025 and $92.1 million in 2024. Adjusted EBITDA(1) of $109.4 million, down 23.8% versus the prior year. Adjusted EBITDA(1) margin of 2.6%, a decrease of 70 bps driven primarily by near-term gross margin pressure in SET and ETM along with revenue trends and timing of related expense management actions.

Income tax expense of $175.3 million, compared to income tax benefit of $21.3 million in 2024. The 2025 expense reflects a $197.6 million valuation allowance established against our work opportunity credit and foreign tax credit carryforwards due to cumulative losses in recent years including goodwill impairments. On an adjusted basis(1) , income tax expense was $4.2 million, compared to income tax expense of $5.5 million in the corresponding period of 2024.

Loss per share was $7.24 compared to a loss per share of $0.02 in 2024. On an adjusted basis(1) , earnings per share were $1.26 in 2025 compared to $2.26 per share in 2024.

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(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 assumes no material change in the macroeconomic or industry dynamics relative to current trends, and is as follows:

   -- First Quarter of 2026 -- Expect Q1 to look similar to Q4, with revenue 
      declining between 11% to 13% year-over-year, or between 3% to 5% on an 
      underlying basis excluding discrete customer impacts, and adjusted EBITDA 
      margin of approximately 1.5%, which includes the impact of annual payroll 
      tax resets. 
 
   -- Remainder of 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 and Share Repurchase:

Kelly also reported that on February 10, its board of directors declared a dividend of $0.075 per share. The dividend is payable on March 11, 2026, to stockholders of record as of the close of business on February 25, 2026. In addition, Kelly executed share repurchases of $10.0 million during the fourth quarter of 2025 as part of the previously announced, board approved share repurchase program.

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 February 12 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 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 duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

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February 12, 2026 07:30 ET (12:30 GMT)