KELYB · Kelly Services, Inc.

Kelly Services' Q1 2026 results showed revenue of $1.0 billion, down 10.7% from the prior year, with underlying revenue excluding discrete impacts from U.S. federal government contractors in SET and three large ETM customers declining 3.3%, an improvement from prior quarters. Strength in ETM talent solutions and SET Telecom/Science specialties offset weakness in SET technology and Education due to delayed contracts, weather, and enrollment declines. Gross profit fell 17.0% to $196.4 million at an 18.9% rate, down 140 bps from employee costs and timing. SG&A expenses dropped 11.7% (10.3% adjusted), marking the third straight quarter of ~10%+ reductions via structural efficiencies, acquisition integration, and technology modernization. This drove adjusted operating earnings of $4.1 million despite a GAAP operating loss of $5.1 million from a $2.2 million asset impairment. Adjusted EBITDA of $15.8 million (1.5% margin) improved 20 bps sequentially. CEO Chris Layden highlighted disciplined execution stabilizing the business, with technology upgrades and go-to-market enhancements building pipeline momentum. Guidance remains unchanged: Q2 revenue decline of 7-9% (100 bps underlying improvement), adjusted EBITDA margin ≥2.5%; H2 sequential gains to modest revenue growth and margin expansion. Balance sheet shows $25.6 million cash, $130.5 million long-term debt (11.9% debt-to-capital), working capital $480.2 million. A $0.075 dividend was declared, payable June 2 to May 18 record holders.