KFRC - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Kforce Q1 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. now to is over today’s It Mr. to Instructions] my turn pleasure call [Operator and CEO. President Liberatore, Joe Sir, ahead. please go

Joe Liberatore

to Good undertake afternoon. assumptions filings reports This Actual listed are Exchange are forward-looking. in call and to with results may any contain statements subject statements. We update filings from Commission. based the certain may are Kforce’s vary any Securities upon the and public forward-looking and current risks and duty materially and These expectations cannot uncertainties. statements factors that other and

can additional earnings filings. You find results information in release about our our SEC and our

In pandemic earnings highly performance our We companies in accelerated in business that Investor delivered we business. technology be share acceleration top the resulted per Technology as of in our remarks rapidly financial to strength corresponding in website. Relations of models. by quarter within quarter strong exceptional performance and meaningfully It publicized led talent to our exceeded has addition, the widely have of This digitize The has published skilled in been another the the end our and adoption advancements. portion many every industry guidance. revenue years of COVID our first demand prepared continues to for a growth across assist both

to Firm increases business and quarter-after-quarter, to onset of performance My I’m very in As raised our The and unwavering execution levels for the improvement expectations Since continuing resumed significant go clients with the our which growth will our our of and thanks become own true commitment profitability relentless to in technology, Mitchell detail. team’s internal without Kye and our past have of were shortly we Dave out our and record results years. our to driving XX strategic more our execution. quarter. continues execution speak strategic greater what their little associates in Strategy serving Kelly pandemic, starts also levels, our at to for to proud accelerated it matters positioning stay our vision highly concentrated and the is in meaningfully team over the first and leadership is after performance possible. improved in candidates. consistent and

clearly are share at ever capturing over demand environment the in years growing strongest our market rate triple Technology We in experienced are and XX Kforce. in the have at I my market business

and the serve have a the that our The superior over achieve Our into to on XX and meaningful further levels highest senseless and this is as to This be we by concern environment in that that seen as macro we’ve success lives to team is personal to results. chain tumultuous pandemic. the lasting already Ukraine, inflation crisis well. continues strained and supply raised by all growth occurring the of translating relationships, has sustainability the impact through challenges the economy shaped of tragic our humanitarian years, in continues in

far inflation, to we clients provided rates to In are further to understand continue and need it Bill thus a while tandem pressures, wage the experiencing in terms continue the pay we cost of the tailwind has of critical business. our as with our resources for increases, certainly impact rise provide.

also Recession. in remarkable secular the and dot-com strategies COVID shift business recession, age the further to the accelerated in resulting of by demonstrating mobility the most and navigating era coming to U.S. only the regardless on As business resilience of all of recent risk digital core our is was out Great Technology recession not but a by began This brought industry.

The in we available these, war highly with for of that to greater talent talent than a talent. XXX% domestic-focused is and times truly concentrated XX% real than solutions. jobs with have uncertain far open fortunate more like technology challenging revenues skilled During are skilled is footprint technology

the our integration years. freedom competency, the and service outperformance distractions of offering, past true acquisition differentiator to consistent focused or core has over any recruiting few Our from been non-complementary a businesses

We the ability growth accelerating our returning sheet us to also a platform capital our organic which balance both pristine allows in to have shareholders. while technology advance invest and

We the are could more regardless outpacing are levels state delivering environment. executing benchmarks. record of prospects and about and of the We future of industry excited be significantly our macro-economic performance not

the up, of open with way of a As the we offices call are work, so business Office-Occasional. field our opening environment continues new to we, doing to which

and and in supported is workdays our trust maximum technology. by in people provides with choice environment that our designing grounding their unique flexibility them Our in

remote-first We to our as to pandemic. we become team support have accustomed life/work the through balance has a moved approach the

We time their a the are and talent destination in delivering top is leader a labor the an offering as for talent these position disruption superior great top current We in financial in designing workdays. space, where and are to talent will maximum factors, in among results, industry others, Kforce solutions there the future flexibility markets. believe

the the Our as sustained there we consistent has, technology will our in for we principles in than talent simply no want is path other to it with prospects growth. is have In clear, been customers, solutions which forward greatest our servicing operating be other domestic under remain on market view, and focused space we so successfully.

future well our results operating Kelly, performance as will our now Kforce’s Dave our into insights share the what CFO trends. Operating greater services. our Chief in Kye? market to Kye Mitchell, believe provide capture and within will environment additional expectations. then a right financial place give have We for on Officer, strong financial extraordinarily recent our as continued will team demand detail we be

Kye Mitchell

during showing led This negatively accepted we of runoff team’s pandemic. to and project planned XX% Thank the hard our incredibly I business our than you, lines of with stronger rate work expected Joe. impacted which growth grew COVID-related by dedication, am results. results. exceptional overall revenues Total was all proud of work the year-over-year

over our impact ongoing Excluding that more XX% COVID year than the of business, year. grew business

organic organic of prior-year growth fueled business to business. excellent nearly our Technology, growth comp. by XX% by we off FA and revenue exceptional quarter another more In year-over-year difficult a Technology delivered our We deliver continue complemented of

levels which business quarter have We as Technology successful organic of at the first was our XXXX, the growth of driving high the last indicated by growth impacted of compounded over not pandemic. in been XX% by our quarter materially

demand challenging this important performed We to the space any our business exceptionally to the Our in to evidence by talent success solutions the well environment. drivers that the is are leading and of than the changes throughout pandemic. up environment more macro-economic secular long-term technology believe our caused unmistakable economic

Furthermore, over have resources rates XX or pandemic the Technology strong. industry during our challenging years. top the highly consultants key consistently growth business the of last because industry we lose work benchmarks to believe exceeded meaningfully has began. growth Our been near the remained reluctant the are growth since Understandably, are skilled macro-economic seeing on mission have critical in clients we our trends even environments operating our projects. our The at

with and sustain ends much assignment comps. high year-end new assignment consistent Our difficult average lower expand, at ability show have are to The elevated duration again and XXXX, saw These to front-end assignment indicators levels. seasonal historically even historically than increasingly seen. with we we experienced continues starts growth in we rates KPIs year-over-year our QX what

grew his to hour. over sequentially approximately X% rates, Joe to nearly acceleration and X% alluded year-over-year of in we our $XX per saw As remarks, just which average bill

assignments rate improved new older should on fourth the to which in as average nearly good in future a the compared In addition, quarter we indicator our XXXX, X% the of bill expect end. the assignments first of quarter is what

More talent, importantly, the elevated the impacted bill not highly the criticality we skilled which believe supports strategic rates priorities. the resources of our in these strength for have to environment demand clients’

talent environment boundaries, the positive increasing, also for our less With candidates is is a of which moving to our geographic pool business.

see data management. such technology cloud, clients of to with initiatives acceleration continue program in our analytics, We UI/UX, project, as digital, critical areas and

for experience, improve Our clients but digitalization the to just leaning are experience. also consumer not employee the into

Our to been our remain we strategy the intertwine. make conversations Technology and make to managed and continuing to our and client demand. for capabilities meet investments the project clients competitive. continued continue are continue that accelerant technology solutions business overall suggest Technology evolving to A must to teams growth has investments significant in will

to growth are add team we experiencing. to continued resources the our have We to support talented

quarter Technology % a second year grow digits comps, in and continue mid in on the single basis, sequentially. may in expect range mid-XX to business the challenging high prior We to revenues increasingly our year-over-year despite

support Our the and of of XXXX. as our initiatives contributed overall negatively FA the our of to exceeded expectations. the a year-over-year, first quarter business, also The which of amount was XX% tied declined These $XX.X first of in expected, negligible in revenue falloff the XXXX revenues million pandemic. COVID-XX by quarter rate growth impacted,

strategic our the year-over-year overall FA Excluding million repositioning X.X% of our business because efforts. declined impact, $XX

more teams These Our our susceptible our us FA are assignments Technology embraced with highly repositioning, assignments. better and have moving automation skilled to strategic less footprint. executed and fit to

has strategy year-over-year to Our impacts Firm, per COVID-related from project approximately bill and including over the FA success excluding contributed XX% work. of rates to hour, increasing any sequentially X% average $XX the

year. FA non-COVID but of revenues growth continue While longer positioning rates falloff of be the impacted support business, no last negatively we we to business the contributed refine our will by assignment

the be As mid-single FA low and second quarter. second in When business XX% revenues. remaining falloff revenues the overall we year-over-year decline of providing complete, expect approximately to to down and sequentially the in is the our quarter, stable may essentially combined, is the digits

reminder, the quarter million second of revenue. related COVID a As $XX.X included XXXX of project

integrated cloud-based Firm strategic Microsoft a tools our We capabilities best fully seamlessly technologies are that enhance these initiatives our develop growth. and CRM to and invest sustainable, integrate for further continuing are position continue. to TRM with Investments and systems technology other and From products. perspective, profitable in long-term,

with a sustain the made We sufficient business, and capacity current to near-term. on rates approach to and productivity. areas exists to in believe investments focus We opportunity similar a adding expected will maintain have further to concentrated continue take greatest talent return, still Technology in enhance our with growth the our measured

employees retained and work supported choice have provide our new our made have and Occasional Joe people to changes mentioned, Office and, flexibility in our We best meaningful environment. as

people continues amongst Our indicating be to model. highest peers our Glassdoor new rating this the love our

have to a We grateful maintain world-class and from and have consultants. candidates promoter I trust am clients net Kforce. in score our the clients, our consultants continued for

will to every solutions to me work Financial Officer. teams I as now destination Chief the Dave? day the in Kforce’s turn employer call Kforce talent space. Dave the to inspire over we Kelly, make Our continue together

Dave Kelly

on excellent results I’m prospects. additional Thank you, provide pleased to our some Kye. color and

share both quality XX% concentration the of of of than year-over-year $X.XX First our technology million, reflect and grew of stronger per and saw quarter record, and sequential quarter anticipated improvements XX.X% a XXX businesses. in higher the margins our overall XX% in $XXX levels Earnings and of were both direct-hire basis XX% both points revenues. flex first in of revenues and than in and quarter. improved result margins year-over-year improving We Technology gross increased as stream margins flex first revenues to pre-pandemic Kforce quarter margins XXXX. QX year-over-year first revenue the higher FA the in Gross the a

revenues, expect direct-hire given spreads to and margins the been both points and of in in notable accelerated. for spreads while than provides basis to percentage revenues, While bill/pay significant in at firm our growth, ability our revenues our greater XXX manage increasing Technology clients business project-based have wages have Technology desire which year-over-year pace, continued Flex constitute a we engage stability is and by less stable, bill/pay improved work. benefit don’t this the X% of total margin our

also are have seen a insurance payroll lower higher historically being revenues. than overall we percentage costs taxes of a to from health Technology We due and of overall percentage benefiting

year-over-year to expanded points and continue Flex lower primarily in each to longer structurally from average assignment stream higher-skilled that a decline spreads due contributes the revenue to more FA resulting to on consultant in of and ability bill to drive margin the COVID going and and billable improved higher strategic roles. Our business we margins rates these forward. in a our work XXX through costs shift the expect bill reduced duration results rates percentage higher-quality revenue project from basis

slightly financial spreads XXXX. increased look taxes be will coupled payroll basis seasonal levels, the impacted quarter. reduced due compensation percentage relative by basis of quarter from points first first stable we Flex quarter due margins quarter resets. be in of FA, expenses in to performance-based first points in we the Technology are expected as year-over-year to our SG&A exceptional XX with QX, to spreads In approximately runoff forward positively principally higher from payroll business As by Overall XXX result expand our to second performance. expect to levels a a lower-margin the of the of to Overall tax as revenue of improvements opportunities with

relative as payroll the our result expenses a quarter and second first revenue from expect increased in the to taxes of to revenue first growth annual decline seasonal We quarter from quarter a the of as percent leverage SG&A lower resets.

operating quarter was margin guidance end the as X.X%, high profit which anticipated than our better gross first of a significantly Our exceeded result the margins. of

effective quarter rate first tax Our in was the XX.X%.

operating the receivable quarter, generate to repurchases. portfolio $XX and million in first in cash perform million dividends $X.X business returned flows, well. We $XX.X our were million Our million to nearly accounts in significant in continues continues through capital and to exceptionally $XX.X our shareholders which share

additional said, be suggest, continuing the us balance in any success. to quarter. that sheet while capital our focus availability organic approximately is, evaluate Our the potential apply us acquisitions. best in long-term to financial capital With tuck-in on million results in continue will that and returning provides facility our to significant opportunity $XXX very allows Thus, and was for we and to invested our filters transaction. to XX% stringent shareholders our return a cultural strength growth on under belief first opportunistic our The credit

our our confidence to growth in expect we remain repurchasing in Given prospects, future our active shares.

is have The our still stream. quarter number our same XX to guidance, past second invest our which to strength of greater over than decade. as in annually shareholders quarter days, cash With while to of platform do billing the XXXX. ample the to XXXX growth We operating us predictability so consistently second providing allows and returned capital organic flows the of has the the of quarter of first respect revenue and the XX%

expected to between the $XXX to XX.X% and as revenues between should to earnings $XXX are and be between XX.X%. XX.X% X.X% million margins XX.X% QX expected and XX.X% be between XX.X%, be while are to Flex Gross be of margins and and to $X.XX. percent $X.XX be to in and per between expect range We margins million revenue and be expected of SG&A a is share X.X%. operating

margins sequentially per diluted is are XX%. tax sequential expected into points translates average of taxes. million approximately benefit to to to from $X.XX. expected benefit in operating Second-quarter payroll outstanding a shares be basis share This projected earnings be rate reductions and approximately approximately XX XX.X are effective Weighted our

increase matters, to firm’s government on demand not Our related any, any in impact to guidance if the charges from impact or charges the cases, in tax the any negative pending tax legal costs environment variant or or consider the changes. COVID-XX does related response of regulatory, legal revenues future effect, law potential any funding, disruption the on towards costs, a of significant one-time or

the We given to are tremendously excited have about momentum that prospects build. our we continued future

term. continued at long increases of release, in significantly continued $X.X indicated operating expected that above-market will while we share demand at those continued share We least the We technology remain technology also expect guidance, per would believe our to quarter about our XXXX to the full-year couldn’t huge talent be believe future that earnings place. Overall, expansion result focus results $X.XX. we we Should people, and exceptional in revenues are We allowing excited an paying and in remain our full margins our least during benefit per be prospects. significantly we strong dividends. providing stable significant business more shareholders domestic in expect strategic with growth in is be both trends our our which for decision that solutions investments would exceed and the earnings environment in year. and second-quarter and levels the would first-quarter we we Last earnings billion believe our in

behalf benefit questions. to shareholders you the open teams capital I’d expectations. performance continue outperform thank continuing Our efficient team, strong to in allocation. our extend up like and to our from for On like now of to we’d sincere their efforts market for call management entire to Operator our a

Operator

[Operator with comes Mark the Marcon of Instructions] Baird. Your line first question from

open. Your line is

Mark Marcon

that good verticals And the detail broad how to seeing. on you broad get was congratulations IT mentioned, a the there. bit some imagine wondering you're the Flex with wondering it strengthened love I was of results. I strength to based, Hey I'm little terms you in everybody and could strong was. afternoon, Kye, give in more regards confirmation the like but based if

better digital was, If own I a of stood more their you sort place you companies putting one the you color the, give wondering if in little really their out, but for transformation in benefit to thing of saw any And to involve consumers, efforts for there. particular could prepared employees. activity only clients client remarks their and that with your then was that mentioned engage bit not also

Kye Mitchell

you the question. Thank for Sure.

We to no focused business. diversification. we've really are industry our do the based seeing What broad the of is play we than all XX% industry And we of last It's over every single double support interesting; in, And industries. on across industries saw industry years? several more and growth want up we in digits.

great you've everything seeing being a are clients done in today growth transformation. We're knows, of said digital. and continuing, everybody comments A money lot regards across is board. So a on digitally. lot growth of on lot made digital And to spending the as I in the

employees retain investing those supported, do necessary term. experience more to good, in transactions of job. been that to through that better approach taking to are to be too, XX% make all that And that it with the communicate employees they on-boarding experience a that quickly, going digital long the on. that, can they're that digital tools with platforms, is a for their able different have resignation they're they to ever than are think I going employee now but important It's also that's great experience employees

area in a well. seeing of that as growth we're lot So

expect move clients I continue cloud investments. network. else, cloud not of is that the are We're to also continuing It's area an our a are seeing them in continuing we're definitely make benefit to cybersecurity as is in everything for cloud going where lot and way another those So from forward. most thing and we with clients today and to optional

Mark Marcon

do be that F&A a still a Would And second F&A quarter degree the bit about you steady? to second stays supporting of for quarter? you on the be terrific. we the some talk kind the environment the can the assuming in expect, of side, start expect quarter then the you economic second to That's to would there lesser that of terms some watermark you're going, areas low kind or of as runoff beyond little

Kye Mitchell

The go of into now QX, that of part. QX is comments COVID $XX That off. my will biggest us the XXXX in impact we have we've hit for have be, for that I as was do coming as we in mentioned million business most

All out. of our business COVID run has

year last very And our it's rest for we to So it that not did be to able year. but each of going in the the minimal, outrun quarters. have impact we're of year-over-year

be seeing degree right now pickup less it from much a lot bill a will basis. of rates. to from our sequential a However, We're

I mentioned, As our in gone XX% FA. bill rates over have up

that seeing be automated into the much jobs into we're it better So level side on the that transition on won't we're as easily. continuing from to what And and see technology move too. benefit higher fits

So FA excited with we're we're in our this business. about where transformation going really

it's the continuing is big be at. to story grow where really is. technology pace at going as continue will it However, That's to our

Mark Marcon

we sequential a on not or whether FA. would wondering see improvement just in was an basis, I

Kye Mitchell

lot down I the at our to teams moved going a now. because so to we those have technology levels think and FA over trend slightly to FAs it'll, I continue associates right think we're of just

a decline start little it see I quarter. you'll of to off. think level anticipate next But bit sequential I would

Joe Liberatore

our more the I our business, should business business little was of to and I going the you you is because that quality our way a Joe. is This about technology at footprint. look give Mark. it how think flavor there, bit aligns FA FA with the FA

tech, no mean, on design revenue that what's that we more roles big accomplished we're really at in mean, comments. as up synergistic going the get here pretty where rates, that was Kye that that one are I look we've what's Sequentially with going from with transcend I it. her business – into to in as we we business that the, business because world going at when the So it outrun knew period, bill we much a the take happening again those up when hung upstream especially Through on business. wouldn't and going And recession basically happening tech with I mentioned went if become could that run the go to out indication Back and to we back basically was part brought we're early I to, I with that we're after so here. going were have support QX, into said the you market XXXX stream, the when by gave that that our with that over be year more we to would and of we tech. COVID XX% then business, you from two look business. think our than what much started dealing

Mark Marcon

And completely able above work have the that does talk the little working terms you virtual more positions, far terms are the in that home, are on market, what level from in you even the players to being tech other can to extent we to competitive that Great. of then and acceptance, grow particularly just do of a capabilities to in and the give of what along environment don't continue of of side, you you office bit necessarily in words, to be for how regional in relative progression post-COVID percentage adapted, think not now that about do. same placements a advantages,

Joe Liberatore

right and of that great is the opportunity it's to have the innings, two our been believe we to in basically reason to aggressive and some there's the them only in the trying footprint that to, trying got not give anything the that you and back technologists remote early to opportunities, are about that that have that's and three office provides she job just perspective, from And say, bring have I I Kye from innings if in has drive companies accepted but clearly match. to clients, you the the you the we've a that tag XX% going I'm say a increases candidate whole talk the technologists, early of us we're we to reason the probability have and five more think to candidates expand not given And days. to we're the things work. or more get, seeing as about which to remote wants that now of be would that getting able but drive it growing, on, adopted clients back fill Yes, only market as okay but I say them in you days, of those those technologists those into to really only I well said, then and to migrating days, I'll only backdrop yes, be also as provide well be seen a we're work, can to not really that which

domestic that's on candidates our that tremendous U.S. a national opportunity standpoint, just So us, the overall across being we're our them the I I our from to with innings ground especially say, believe it footprint clients be early provides for in able likewise and meet for with and why with footprint still

– standpoint, retaining out just I companies aren't publicized talent. in embracing reacting, more And this trouble that having those mobile would every And and our from I point this widely time. It's remote day, and are more say, very from work. resignation the is attracting world positive mean necessity. part they're So at how is organizations of and great opportunity of

it's So, clear.

you and know office, And to are in out out look that macro mean, more much rates I'm it's at I look there, of I'll office within in you the go said, set, more the I the if seven all a technologist, we surveys skill find are the than XX in go technologists If level, current they're severe especially job. to another want where technology a from at when control. unemployment the forced out there, being done

adapting So the going adjusting. opportunities be are out to customers and are there. And

Mark Marcon

great. severe growth. anticipate trends – That's a technology, we like And given we approaching think million about would closer that revenue? continue quarterly we How that $XXX should seeing as How in start that we think would recession, should the to then, in borrowing you'd to that? operating the you're margins, strong about see

Dave Kelly

Mark. Hey, clearly the how some bottom first suggest results Kelly, It’s revenues to Dave driving as having second So, as are and nice the improvement that we're you? to success quarter accelerating quarter, obviously line.

We've we're we on said of grow quality the we we the is of technology profile, we're is there. as because expectation past, bit to business additional just grow in think helps the path as margins. we as some So us, for the Technology clearly margin, of continue right. the a the gross the operating prepared that, grow revenue the operating we double-digit the us to talked we generate grow, health going margin about stream, scale, remarks of little to a in that

should business our be I at out as can tell invest on at but point. it obviously We continue to and some grow, into what although said, we you, double-digits haven't precisely, million we expand $XXX there put to think a we number it'll continue

Mark Marcon

at up Great. follow with the queue. I'll end of the additional questions

Operator

Riddick of comes question Marc the from line Sidoti. next with Your

open. line Your is

Marc Riddick

good evening, Hey, everyone.

Joe Liberatore

Good evening.

Marc Riddick

of bringing had spend wondering, could in a bill were detail bit as you on, up I a bit go commentary. was have So about date know wondering wondering was I little that. lot if seeing far follow-ups there. I then little and you I I what certainly time you was remarks. as prepared us the to for of you talk thank rate pay And if you could a a rates couple

Dave Kelly

Dave again. is to This nice Kelly, you. Yes. Marc, meet

course frankly, what the continued of the last couple over is quite to So we've what seen we've right. years, see

understand we're an the for here we've bill supply our right. to market in Joe environment pay increasing. our shortage those, rates this doing have more. rates they clients and sitting in to are ability been that And the the mentioned find So of years, constraints both where and pay obviously

environment is that's this an changed. So not

in So rates up going certainly bill rates. are pay tandem with

years. been the So a move have last of couple as stable case. the to constraint be spreads we course expect in continue market, of forward Even that themselves over we is basically to that our the very expectation supply

So think it to going that here pay improving as up, to generating is going is business Bill been the right. go bill be historically. our percentage has I what rates, think continue we same gross the are is trajectory rates, the of margin which rates for about and to

as gross So profit dollars, well. more obviously

really pretty been experiencing, to So what much continue to expect we we've experience.

Joe Liberatore

add is just This we a I'd inflation kind one aspects the surged is business trends out out are inflation bit. I of about the to know is just Marc. things up I more and little believe numbers mean, Yes, there to biggest lifting that, of there of Joe, macro our also as directly XX.X% wage related inflation, year-over-year such March. in which certain last put all

cycle clients the consultants. dynamics other no companies I've than our point here I XX career based with flows the during in feeling increase ever Kye firsthand with through increasing is to this seen team talent. interesting than this associated top place. comments some our at things understanding informed populations make that this bill so probably core rates what awareness inflation in mean, all a we receptive their has wage that want that better attract kind and have on So to are being of one this one my doubt, and that, broad on to Kforce. any of resignation, and news the a I more from more clients and are nice the bigger we're cycle her mean, had is that great our mentioned make and to sure just can done the of working what's with in I perspective they to understand of job wage that in and doing up everything this necessary sure lift technology us adjust taking do year

Marc Riddick

that process. you with you're clients about changed then visibility how what the level seeing the leads and through you that at visibility me fronts. you in talk was has have And level and for in touch in and of your that a that competitive of the of or of part how about in own sort adjusted maybe could bit with thinking the embark and for how either have little does And was wondering, of upon could on transformation your working sort then sort direction. changed the sort your mind, sort customers two all, that you. stage you if expanded And Thank your the that that's advantages projects Excellent. a actually little of I about what they have those your that sitting of One, maybe question. on when next of that bit results? maybe digital they're the think to customers I –

Kye Mitchell

I think perspective, much. a visibility from hasn't it changed that

you range enterprise XX% think full This in Although, just are see on on money. and transformation. sending one clients Fortune XXX this have they of our not about option don't project. When coming range, base, this, long is this long an is the and our we do customer in doing

this insurance mean, you're everything's seeing see you're the trying from do who shipping done in companies. platforms and retail as tech, digital mobile everything and to really returns of things. are we clients, those to long-term in seeing ranges continuing and space, now the types over I now to have with from apps our So handle partnerships great it

think to continuing longevity too. of industry assignments the So but it throughout our you we're it's just and see that do improve clients those touching, every I

length We Clients and this. do it's don't we're now, to have have they very seen our roughly grow, option, sustainable. an XX months to at continue average have assignment

continue a for see to time. we're long going think very this is to I So a trend

Marc Riddick

where Okay, then expanded that’s competitive time. you currently advantage great. of stand the And Thank and how you. over

Kye Mitchell

I that, Joe after think we’ve to CDOs, base. been early across let Officers I’ll very the and were with competitive that this, in we but looking have, and partnering our advantage add Digital Chief client various we

footprint work a of in hired experts then us. in doing remote. our this. most of big We’ve lot clients field. are this out capability advantage And built can for this obviously done the in matter be is some subject We have national space, a outstanding And

the type recruiting become and invested talent great this best And in have our across country who have that experts in to able recognize help top brightest access identify of the us really individual. that to we’re tools So are. we’ve people

progress Focus So space. a big this is really the in focus team proud this for of the made and has wins for us.

Joe Liberatore

Hey absolutely Mark, and Focus I wins. just thank advantage, here. very was you Kye’s talking numerically the competitive kind just much. just going to put quickly about of add

business right, rate an business at $XX that go away. bill pandemic, the look didn’t our hour during even You

focused basically revenue the our have eyes in the than in to of we – us that worst whole to of it advantages and the one up a a of as market anybody’s in it’s being so. So probably held led better here, the and make space, customers our relative the times, necessity is even

Marc Riddick

Thank Excellent. you.

Joe Liberatore

Thank you, Mark.

Operator

from next Sommer the question Securities. line Truist Your comes with of Tobey

is open. line Your

Tobey Sommer

maybe with question. mean what wanted now it Thank the business you how of changes give us average for have history Can home your assignment manage seems describe your could the on if that recent those you over and on ability you. and visibility? more I months expand you bring describe link context changes like XX to as what and kind last and to in time you – just

Dave Kelly

Kelly. Yes. Hi Tobey, Dave

historical So it to look so so at I so is after say time. – months, XX doubled is it’s probably really right great put six to would it you five that or maybe the months was in it compared since if recession, context,

clients remarks, longer to one the work. obviously are as holding clients Kforce based what that we’ve things in on such So duration. mentioned is consultants obviously of seeing our in on Kye do Those our looking for companies to you’re are project touched her more more, had and

of we’re to us, and doing. said the as a type Kye clients for So our the onto deepen of it’s that as obviously combination with that well. work hold talent relationship our us helps need really, And

to to the that path. this we’re an generally revenue move So sustainable the continues as stream, speaking. look just business shape as down basis, on the It of ongoing more future doing we gives us much a

Tobey Sommer

room out we’re at And think doubling a after you Is do little a going keep to months? topping XX bit? there

Dave Kelly

I mean would I Well, say…

Kye Mitchell

go. say is to definitely room I’d there

Dave Kelly

would right. Kye, I Yes. agree Yes. with

that we of lengths assignments. So are longer typically those based as project work increase, see

So it’s average going on increase, to right.

days. kind So how of the talent procured these of nature that’s just technology is

Joe Liberatore

around Yes. Tobey, severe demand roles. I aware, mean is team default, you’re And in managed we’re because most find we solution in the they key we it even onto are to peak and supply as imbalanced the terms hold during the difficult well when more it’s space than were of And was longer, the – somebody in in the resources clients seeing dot-com. else. these technology people how this not going and to of it’s by realize in be

wrapping organization meaning also somebody actually our assignment’s knowledge consultants that find have are that, seeing when up, when has redeploy one consultant that clients some helping another inside that domain We organization, they’re they their of inside initiative now. that

playing So this well. also that’s into as

Tobey Sommer

you’re your of You a longer prompted force hunting? the more as that Does productive actually kind getting be talents some behalf? of renewals redeploying utilize clients your a degree, or can kind change result your If follow-up there. way of on recruiting assignments you to to

Kye Mitchell

the to really That expand us business. opportunities continue some gives Absolutely. to good

redeployment. we rethinking are really about how think about We

we of We that clients? continue people within we looking it, had how recently We’re with about ended redeployed How do had, client. it example, project on do them. other to at infiltrate a we XX redeploy for XX

obviously of the continue ones worked people proven to themselves And demand, want that something to for and with again. time have working this definitely place we’ll for it’s us. us time that we are that’s type continue the So and to

Tobey Sommer

that value-added build can on contrast organic at the And to services staff there? if still are basis? what you that a are, you of the I And link that look pure could on to touch of in just ask consulting a side sort scale does assignment comfortable you

Joe Liberatore

Yes. Tobey, I…

Kye Mitchell

you Yes, So ahead. ahead. go Joe, that? clarify can go

Joe Liberatore

across We right a Yes, looking efforts, of to made the that be, and we just added staying fit. if we Tobey, we’ve found comfortable market this organically and services solutions manage our active from with I that teams base for very standpoint that can our remaining are haven’t take that broad that need have value potential we’re our in would right progress – we say we of team the could bring would customers. fit go

And growth, Kye so had of area solutions us to our allowed strong bringing individuals XX%. that team, and are out skilled a our outpace to roughly lot to on coming of within growth really build have continue tech that organizations mentioned, what versus a this overall we’re we

rate a areas. at in growing we’re So these faster

Kye Mitchell

have nice that, to Yes. it’s And I add too. even the to distraction not would

I again so think we’re is that quickly. accelerating why

Tobey Sommer

unique at one. around in and would was would How brief. I would swift, beneficial Thank perform – there Flex in that business recession that. of you the you go business it severe this can’t be longer sort that a to any time if I’ll that either recall because you should think do quite against in had or factors, of recession worked great but that Tech the consider the and look like XXXX, fact sort what for in evaluating

Joe Liberatore

the the I best cycle tech this centric. to believe is you back very very crisis probably dot-com, centric, say, tech was would when even I because parallel versus that go the financial is cycle

very came – However, as all out they’re Everybody we scrambling the areas. everybody was was up. about were models business websites tech get there. in disruptive know, about different that centric as worried very was Dot-com to It internet hypothetical.

the drove we’ve non-optional forward efforts. their mean, what move is said bubbles digitize front, as I front, to happening structurally whether a lot on organizations individual’s whether cycle these digital on for dot-com. that’s Everything So not be during it consumer that’s employee are business, be the the of to the This sound. it is,

longer that much in perform the and the I the a great recessionary go business lot back So was I well cycle. plays let’s think business the period. would that longer financial crisis. that even performed to a in how that mean, recession, Again, a – extremely into At

look of first mean, cut we where XXs, that data people are has XXs the with went the longer that at that. when I in or was So to place expenses. experience no technology the where dynamics and with everything to do now gone, on we’re top

terms in end we’re clients everything the focused areas competitive of on that through the we’re taken strategic with we’ve overall opportunity the mean, So, the business. right that approach the I and on in

Tobey Sommer

Last for question you. Thank me.

or concentration us on it the maybe the recent does what like changed could remind slice for company in if focused a Some pre-pandemic. investors that’s that’s top represent large project. how been to for And XX had a give you. have maybe and customer customer Thank another – how customers, you largest us comparison you’d history

Dave Kelly

Yes. Hey, Kelly. Dave Tobey,

been X%. don’t as can you Kye From than From probably right, everything individual I concentration well industry So it than whole great of an note, any tell post extremely a industry less always we customer touchd XX%. less any an customer, have that is pandemic, on we’ve pre-pandemic, that mean, diversified. standpoint, I is

way, So are time. not that we is that reliant case upon – for a any would nor industry one any by that, say, long been the we’re And Tobey, and has one customer. I the

So has over that changed dynamic time. really not

Tobey Sommer

you. Thank

Joe Liberatore

customers. within have And bit different little type even Tobey, many we’re a concentration talk when meaning we Dave’s different initiatives point, we customer business, going realize to on

a revenue to So, deriving I footnote mean, a a on that. it’s percentage important whatever also mean, is of I any we’re project one put given specific client. think I from

Tobey Sommer

very you much. Right. Good point. Thank

Joe Liberatore

Sure.

Operator

of Mehta with Northcoast question line Research. comes the from next Kartik Your

Your line is open.

Kartik Mehta

afternoon. good Hi,

inflation. talked on I for Are of far. on or wage wondering, so you think that what as look occur greater there’s has think rest the kind about obviously of at inflation wage to your wages? peak do the you are pressure what been forward I’m still you’ve we XXXX, expectations

Dave Kelly

ahead, Joe dealing any have I Yes, been we that I pressure expectation Joe. we on we’ve time don’t and is, touched this can answer that the technology you – I years. been Yes, are seeing for And go think confident space, to a going number it. please and for of long very simple is tell last the wage think I think What the think in we’ve I change. is with

customers it well. Our really understand as

feel our wage to that pass as about strongly frankly, very well, customers So our a into through ability we our tailwind to business. really is rising

don’t for I us. a think quite thing So good I and frankly know that changes it’s

Kartik Mehta

I go And ahead. – then believe apologize.

Dave Kelly

go No, ahead.

Kartik Mehta

inning. I say, I’m bit to your do remote customers. work people with wondering maybe if your that, think or to there the early if up you kind doing that little ability ability we’re going about in recruit in especially and was a internationally are the I and hurdles to talked Well, of maybe that opens

Joe Liberatore

probably of come biggest that hurdles and an in standpoint aspects. the has to some work the Yeah, international around run from cyber you

So is it’s five there. X% we’re to where goes of in top very client their domestically, of believe, and again, We the share. one appetite at here terms could back specific market this providers domestically

And U.S. mid moved just back day talent was since tremendous the relationships with in here into joined a we the developing XXXXs we’ve there’s it’s a Kforce. slightly involved with pool about before So in pool talent technology, been that which and I believe I

pool. the focus is our working So, And the the talent have workers on also domestic those experiences U.S. foreign are that that organizations. within in ground on

where really Kforce that’s that is. focus So

Kartik Mehta

other obviously of could that prohibitive if is where clients tailwind. or just I of critical pushing the so wage then back I’m costs I’m back apply. maybe to they inflation negative said wondering, a the might be are your have any costs than more could because is getting much the that, anticipated? part kind you But a that are just mission you there’s seen times stuff, you if think, And inflation, wondering doesn’t maybe have this wage that realize potentially I impact? go

Joe Liberatore

is inflation period going time again, the you go for of that at last and their I expense. how technology because right, come bit to mean, reduce probably But to we assume is, it terms until of organizations back back places could can in the organizations P&L. potentially trying see when this is to, at today, of one of strategy to a centric this starts impact some every point, only look such to

reports we more do the been year, top there’s – wages remainder coming that of increase the be probably be so to And it point. could see economist continuing throughout at that we the could more out

critical So projects focused to that business, see mission the maybe extent. aren’t subside some to we’re the start elective. projects to are these that again on But we

back go really the going going on and at mean, firm. highest doing of they’re believe expenses, other if things I to amount have you to I the or to on the initiatives that focus organizations So, they’re to to reduction to of cut are have areas look forward. want in play to priority the

Kartik Mehta

it. Thank I much, very you appreciate Joe.

Joe Liberatore

Sure.

Operator

line Your Marcon the next comes from Mark with Baird. question of

open. is line Your

Mark Marcon

Flex wanted Flex in up And I IT COVID saw to terms question. we significant, go declines follow minimal a when Clearly of the if you XXXX, just back critical. dis of mission IT revenue. is impact during ask even was

to a the you On I’m in some going other go and are do of to that to you margins there certainly the that to wondering at into be parts a despite but you be there’s able able be impacted, parts another the as that the maintain back there’s terms were strong what going we in extent degree, think if the you’re that to in other be a F&A period? you’ve just and learned profitability time certain preserve decline that hand, perm what recession, you were, to impacted, going to XXXX lessons of of well aren’t going level, to business as very were was did

Joe Liberatore

as been have are Yes, we different together of I us seasoned scenarios a for wore most especially, the we evolving, management over mean, very game time, XX have and things team. years. all Mark,

if little I you look through this now history, it navigated through you how And crisis. navigate So, we come financial and you and how cycles. if we’ve we’ve think go all bit at seen back our different a pandemic different We most with look they crisis, know recent flavor. the at

and going back We’re downturns significant keep right calls of going always to that. far the cycles as to, firm organizations. significant if realize we we we the we’re calls X% what also profitability to to were within we weren’t of going our But the every to strategic also we from are talent, coming of I the make onto driven the being can decisions do these. to recent because dot-com, we’re either not customers, less the that’s seeing preserve in the going of these to the account – our of stream learned dot-com, as technology. right these of always non-cyclical. business. your permanent out they’ve make came hold XX% more we than here, another in today, side pandemic Again, that answer business is the go one even what those to unlike And exited become total with back up through two revenue our to on I’ll – even and wrapped question, remember one last We experienced, out to changed we strategy And when byproduct inside our portfolio and of

down We also million that’s everything it made on go estate exposed saw to $X else. a overhang, And the the a quarter to was quarter, side. the – and we permanent decision a revenue all real see not stream $XX when consciously million from permanent

this Kforce this and as in is cycle, way and learned with their people are gathering surveys, is we learned through they of office a trust what which lot our improves And what because truth speaking are their us were, through why of driven by really needs a asking So really work through feedback, flexibility that that performing the it technology. that’s last transparency trust. we we doing where team, small telling the our which we is, and with that occasional, is no is part were empowered choice and

things of don’t have of these. these make and mean, going year, XX really come with calls. lot just to we’re I the right solid we team a a out So

Mark Marcon

Terrific. you. Thank

Joe Liberatore

Sure.

Operator

back Liberatore are now call closing further turn the I over no remarks. time. Mr. this There questions will for to at

Joe Liberatore

support and and Kforce. consultants with effort for serve every and your our after to to with XXXX. extraordinary to second you clients Kforce you. like to Well, in look trust for you forward of thank for again privilege you. I’d your and interest talking We say your the Kforce partnering you of thank us Thank allowing in you to quarter

Operator

conference and your This call. thank Ladies participation. gentlemen, you today’s for concludes

disconnect. now may You

Kforce (KFRC) 3 May 222022 Q1 Earnings call transcript