KFRC · Kforce Inc.

Kforce reported its first year-over-year revenue growth in several quarters, with Q1 2026 revenue at $330.4 million (+0.1% YoY), driven by strong performance in Finance & Accounting Flex (up 5.7% YoY) partially offset by flat Technology Flex (+0.2% YoY). Gross profit margin expanded 60 bps YoY to 27.3%, primarily due to a 90-bps improvement in Flex gross margin — itself attributable to a 70-bps spread improvement and 20-bps reduction in healthcare costs. Operating margin rose 10 bps to 3.6%, though SG&A as a percent of revenue increased 40 bps YoY to 23.2% due to higher performance-based compensation. Diluted EPS of $0.46 exceeded the high end of guidance and rose 2.2% YoY, supported by margin expansion and disciplined cost management. Management highlighted accelerating momentum, citing improved revenue trajectory in early Q2 and projecting mid-single-digit YoY revenue growth for the quarter — a notable inflection after years of contraction or stagnation. The guidance range implies sequential revenue growth of 4.2–6.5% and EPS growth of 45–63% over Q1, underpinned by 64 billing days (vs. 63 in Q1) and continued execution of its integrated go-to-market strategy. The firm also returned $18.6 million to shareholders via buybacks and dividends in Q1 and declared a $0.40 quarterly dividend, signaling confidence in sustained cash generation despite a $4.1 million operating cash outflow in the quarter — largely attributable to working capital timing.