- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Kforce Third Quarter 2022 Earnings Conference Call. [Operator Instructions]. Joseph Liberatore, President and CEO, you may begin your conference.

Joseph Liberatore

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

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

revenues rates, with third with is again, the of technology and environment towards in of reasons, third of our experienced portion elevated the end earnings In and cloudier have impacting addition, in prospects Relations the the the became were of share for published we quarter. we that KPIs per certainly prior strong economic a in in macro our in quarter I'm earnings our our and among our pleased degree mentioned near Investor which, quarter moderation end second our growth. performance prepared global growth The call We year-over-year other rising as persistently led interest remarks within domestic top sequential overall levels inflation, website. business. of the rapidly by guidance, our

during out potential of the far drive open the half strength a levels. our supporting demand to in and business technology talent. a employee levels is demand cloud businesses are skilled were is war quarter consumer and their the the expansion of further to Great we technology collective drivers has is strong accelerated technology continuing insulated economic accelerated available U.S. digitize was consumer-facing see become increasingly above of business core drivers experiences. only talent. jobs talent of increased in XXXX have more an and clients and highly-skilled of The industry, the don't recession, and projects criticality prepare with coming relatively in for give data, that rapid confidence for times. by big first the level times adverse of not in mobility, to changing. below imperative the the economic business of strategic Though they to for of Technology secular optional trends The technology of and us While the we real for is to all to The remain initiatives. third technology they of thrive the XXXX, and regardless experienced enhance pre-pandemic pandemic strategies Recession certain These as be expecting our all cautious during

of industry continue foundation will built demand solid with a set in the representing large CEO we fact, deliberate back "even XX% foreseeable economy and to providing concentrated soften the intent, technology pull our supply their of strategic With have in outstrip association the a business trade technology that and companies engineering for nearly end solution for markets. tech in to diversified attractive if hiring, a world-class domestic sectors In of recently high-end future." talent some stated of talent

Technology great during strong flexibility to business our us investing times. which resilience rates environment of companies, business portfolio, focused secular recessions. debt-free technology the is economic in Our market grown even above displayed two XXX continue strength drivers choppier serving at the and the last primarily gives predictable to through client Fortune both the cash on grow strong sheet to our and in flow demand well has balance economic our Due consistently and

is XXXX nearly X% CAGR above market For since our is additional rate. significantly the organic color,

XX% we the our X% revenues XX% the market. XXXX of the comparison the recession, XX% were experienced general to challenging in and virtually declined were declines market Great business With more revenues During in continue XX% well Recession, staffing XX% both strong market roughly XXXX-XXXX conditions approximately staffing in to comparison flat our revenues advantage flexible pandemic-driven of XX% and comprise growing share. to our within In Technology, of to to experienced extremely total total the now total declines. Technology only to in technology of revenues and which revenues feel market, XX% positioned general take

opening with Our headquarters about we new what plans extremely Tampa the work continue are to state-of-the-art we -- call excited in office-occasional implementation, environment, tomorrow. and our the of

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

results believe industry to Kforce We leader for offering flexibility factors, and the technology people. are as an others, the maximum in financial among positioning destination We top delivering these our are exceptional space, talent. solution talent are

consistent is greatest we've domestic technology growth. prospect Our talent sustained will remain which on to the for simply so our forward no principles market focused been with we the successfully. other clear, and space There want under in we other the it than be has, view, is as operating path solution

to place tenured are whatever team highly share our strategic to their true and the My stay for We relentless continuing team and in environment to prepared term sincere for capture right leadership bring. for long may thanks our to the market have and additional execution. vision near-term and associates

results future will performance Kelly, as give Dave insights Kye? around and us. well Chief Officer, operating recent our the were now how serve. employees to clients, expectations. our our our Our into as financial inspiring lives Operations will rallied continues Ian trends. then to detail a see their that greater communities of and support impact additional team financial Hurricane provide It have Chief Officer, we by Financial meaningful our teams rebuilding to our the for Kforce's and Kye support Mitchell, all impacted consultants on on was

Kye Mitchell

Revenues quarter. Thank Normalized growth XX.X%. you, year-over-year X.X% for in third have grew the planned runoff, year-over-year COVID-related our Joe. been would

be XX.X% with As success, prior of increasingly expected, continues growth business the primary difficult of year to driver our year-over-year Technology off our comps.

XX% close anticipating full to of the are year We growth for XXXX.

the last growth compounded are businesses. grown levels correlation X throughout the in following economic secular of growth demonstrates strong, high between with We pandemic. to years performance consistent of our line demand drive resilient top the to Technology fluctuations These drivers XX% less drivers technology. continued revenues believe most an our susceptible in having over business have We unmistakable organically

has industry or X XX consistently exceeded growth over the and top growth of years. at past last has the technology been industry Our the meaningfully years benchmarks near the our for

our above Joe mentioned, to demand moderated remains current activity degree pre-pandemic As strong operating levels that have and trends and a levels.

even environments and nature consultants. clients during lose reluctant key are our mission-critical of resources, projects macroeconomic of because Our the challenging to

rates, clients' our approximately talent Another increase. the bill strong resources signal we hour. continued criticality bill less average which X.X% sequentially talent and increase in reflects With per experienced to of demand continued and the constraints, environment acceleration priorities. The year-over-year for to in to candidates pool strategic strong rates geographic grew the our these our $XX is continues X.X% of highly-skilled

initiatives see clients in environment. such multiyear remain clients and regardless to to managed competitive to any technology continue to despite look of to UI/UX, of that the are Many technology areas teams in with environment. prioritize changes to of continue our us provide investments suggest will engagements. program as continue digital, macroeconomic continue to Clients that that and initiatives acceleration data our We analytics, project they the project solution our significant expect Conversations we economic critical cloud, management. engagements

insulate as in which of these help we greater move even bring disproportionate to expect growth into XXXX, will driving engagements margins. focus We

growth diverse industries. are but year-over-year some broad-based Our clients. we softness Sequentially, by still driven was demand, select a of with seeing in set

industry other even consistent have We in increase in whole seen yet spend a verticals projects. where at any softness actually we seen clients experience seen have demand. and reductions particular not new industry Rather, as award we have vertical clients,

We we very have any mitigates we of XX% particular no customers risk or as diverse Fortune have portfolio XXX, significant servicing concentration a which our client industry. large of believe the in

our or we be we well with While term. to diversification our dynamics, the clients companies shareholders specific world-class short-term and serve to in our disruption may industry-specific long over concentration expect susceptible

grow day high in on a a expect fourth to and revenues on year-over-year to in basis. business basis our We sequentially quarter billing increase continue digits single the Technology

in year-over-year. XX% negatively in revenues. rate The by as expected growth XXXX. million Our was revenues third of business These overall $X.X the impacted FA COVID-XX nearly contributed declined declines quarter

FA repositioning largely impact, efforts. this year-over-year, business our overall XX.X% declined to our due Excluding

starts assignment we third continue year-over-year reposition new per our in increase relatively rates flat business, $XX X% hour. quarter as our a saw were sequential bill in a over XX% we to While to the and increase

in We the recovery to fourth expect Hurricane overall year-over-year due a decline slightly FA sequentially project revenues of improve quarter. to XX% efforts approximately and support in Ian

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

provide capacity FA to levels along our alignment support continue improve The make grow. with productivity to to in business. business we improvements to continue associate investments Technology in our population, our with increase its our priorities, strategic continue process to We

to investments While headcount continued sustainable drive to growth. capacity in make exists, have we select associate

deliver would to impressive diversity, and results. candidates measurement culture, responsive Kforce's so Kforce. consultants CSR. our changes supported recognizes employees have top best related our are employers significant to have Kforce DEI competitors reflected has through and now amazing like our which our areas and including call success. like We Kelly, who OpenCompany Dave environment. out grateful Glassdoor our inclusion reviews and all am on Financial our promote updates in Glassdoor's scores workplace and choice continue to all the the to made retained give and over across designation, thank have our in proactively trust They is being amongst of X flexibility office-occasional our culture. I will backbone people, This the turn earned Officer. transparency work sharing to people for and I our in and Dave? our we there sharing truly I Chief categories, to clients, embrace that workplace put

David Kelly

you, Thank Kye.

our basis lower revenues. on We basis our costs. was share X.X% $X.XX care $XXX.X hire per years, and through of had time-off the elevated basis. rates our We increased technology consultants the This stable business. Over as increases technology a bill declined earnings of these talent in business passing range basis Flex paid FA critical business decreased XX% to improving within scarce, year-over-year revenues typical our decline decline XX% led in quarter, and leads fluctuation This work third seen consistently levels and margins decline believe in health in points as in year-over-year and great to in continue sequentially Top rate fairly mix COVID gross due due due profitability in basis our profit margins third Flex are our clients rate quarter growing a Gross the our a margins higher has year-over-year lags XXX and lower-margin points and always the in bill and compression efforts. our expected to margins there progress in we year-over-year margins million wage direct Flex to margins throughout perform. repositioning XX XX.X% and a of pay we've sequentially expanded utilization have third business due to largely the of primarily year. XX year-over-year. of decline slight and represents work Technology points success increases make project our dynamics. grew many to spread XX consultants, to and a very remains to quarter points by

direct recover business, margins look to Overall higher-than-normal decline we as impacts to margins flexible time-off QX. paid revenues. gross QX, lower remain we levels to due the sequentially at are in decline to are QX seasonally expected which As expected would Technology our in hire typically forward from

year revenue XX clients given While slightly success. productivity. engage stability and our our a the our Overall ongoing a compensation real term of year-over-year, to in us growth percentage the as model. ongoing back projects office-occasional nearly sensitive mainly due decreased estate are environment, be critical to prior result current of their SG&A desire accelerating factors basis XX% may office for investments provides points believe we the technology lower macroeconomic These expenses incentive-based savings offsetting as under by improve significant to we to believe concentration margin the over more our long relative price increasingly by in clients

percent sequentially of flat revenue days with X to due expect continued expenses the fourth our in as SG&A to investments billing along We increased in quarter, year-over-year and business. a be fewer

was X.X%, slightly margin Our operating third down year-over-year. was which quarter

to $X.X third effective rate impacted were in tax under owed as $XX were Operating a terminated was expected, payment executive and, Our million negatively a flows plan. cash the XX.X%. previously benefits by million settle retirement quarter

well, capital exceptionally to perform of to continues to portfolio receivable accounts Our shareholders. we prioritize continue and our return the

During the our to quarter, active million $XX.X repurchasing continue we be in of stock.

year operating to of of nearly Given expect historical XX%. shareholders future confidence through we This to our compares this our our XXX% in share repurchases now cash dividends. to approximately levels prospects, flows return and

in our under $XXX acquisitions. the invested million sheet belief third potential while Our approximately results was to quarter that our XXXX. focus allows fewer long-term continuing organic has significant With is availability XX our opportunistic which quarter that a provides credit and us strength third us and in additional in XX% suggest and days, the balance the the facility quarter. fourth shareholders The our to evaluate to guidance, the returning best With X return capital to success. on as fourth days for our opportunity is be capital quarter tuck-in growth the same on respect of XXXX than of said, billing

million be earnings to range per revenues and be share QX expect We the $X.XX to million $XXX $X.XX. $XXX to between in and of

or items unusual of impact may potential the consider not does occur. nonrecurring that guidance Our

in investments the us grow. to which our believe shareholders also while business, term long an position our improve we we has profitability to levels put make financial Our in to excellent allowing us in incremental as continue benefits performance

whatever the believe resiliency least XXXX our with paying business we The provides in place, ongoing expect believe our macroeconomic we decision the guidance that QX earnings be the QX share focus to We economy. release, occur be strategic us is technology would unique $X.X we in that in at talent dividends midpoint we an with would strategy put Overall, domestic exceptional solutions $X.XX. our per huge During expected providing uncertainties. these earnings has our and slightly and of XXXX that us in exceed to indicated indicates billion at for levels. least the may revenues even

team, turn for extend from like over a like On continue to efficient shareholders to thank management questions. call capital our I'd and their now behalf sincere we'd to for benefit Our our Operator, performance strong efforts. our allocation. you to teams the of entire

Operator

[Operator Instructions].

Blair. line Tim the Mulrooney Your first from with question of comes William

Timothy Mulrooney

this My period first time, long and question is first know Kye. this a you've uncertainty. I macro of Kye, for been doing your isn't

you're and just So these procurement you on behavior the bringing hearing side from can in talk side as of little client client as behavior What the terms environment? asset? well on in about behavior bit process a clients both from this demand days the

Kye Mitchell

technology, We're clients they big Tim. places bit cycle. a slowdown terms the hiring strong to Thanks, in the still digital X Demand have or is we're Yes. wanting data, There's seen especially playing just little in might very of in seeing where demand, The X are cloud, transformation. candidates. see strong.

they Now want to interview X or X.

in really it's was and the where still and than process. demand higher Actually, elongating. that's normalizing pays much So It's not more but it's what seen higher 'XX, to pre-pandemic. normal have it we

we're be selective visibility with more just still candidates demand the client It's the may bit So little there. seeing level. a

Joseph Liberatore

would early that's we think to we I time Yes, we the that probably last Kye the everybody this talent. skipping the is seeing shortening process, in upon more it's mentioned a as hiring what normally Kye to time at in everybody same is steps we cycle. really, kinetic hiring, add is This I similar experienced XXXX dotcom I really that what see saw pace for because Joe. Tim. and saw was is is touching era. of point really and it, on It's in What fighting is think was very And really what during would normalized the what we're to the what XXXX

Timothy Mulrooney

then the the and That's All past so for you've I how spending your kind helpful. of had in not services IT right. by to labor mean And demand Joe, have market. your more much your shared clients

you as months budgets you're IT a with hoping couple of relatively into as head hearing comment spend ago, to XXXX? far seeing could what on was I as we respect So to you're what IT

Joseph Liberatore

Yes.

a So one always and things great because that the right, is this it's we of question, try clarify.

press And devices acquiring. linked you're people technology to aligning We're the looking the and not forth, tech and their point everything that people necessarily miss when and and/or so at are sometimes in services-based a companies, on organization that's products about headcounts so right?

in a of down investments, they we year-over-year They the gets in work really XXXX. seen, realizing all the honed Fortune about make all into that on sometimes. I have basis. that And where budget, think that still, we've all especially had were pieces the we're robust tapped data pointing I more they're XXX, have up be I've that with XX% budgets comments, But predominantly my everything, very So to to that terms Kye that the them, been recent the and But confusing areas slightly. that's mentioned in mentioned of and in. opening projected seeing

play. seeing of one we see an we're client. terms a really So might expanding those I client we in budget seen their seeing you tightening areas industry we're bit, go But by we an mean, clients little belts when [indiscernible] their any across pullback haven't in it dynamics where sure, unique client necessarily industry, efforts.

the has XXXX. a nature of over nothing budget into material looking course So the last on -- a changed standpoint from quarter of

Operator

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

Mark Marcon

With little regards being comments, types your you by some talk the last of to in? are that a other there's clients? or are conclusion a areas seeing If then you back -- that are are completely pulled not investments about if can Joe, then draw. random, And bit any the seeing to what that it's maybe up, areas there's them just specifically clients commonalities what picking you

Joseph Liberatore

Yes.

I I really to think your don't conclusion draw. believe there's last a statement,

client-specific that different it's upon are I the think projects and after. of based clients very going load

as forward may tilt and whether be and and know obviously, se. that addressing more or on don't those space front. are you're Kye, if device be to would the consumer comments, and lot you with be of in drive consumer-type we employee to color don't mentioned you ripple you a the seeing bit do I back, around that business, organizations efforts really those of are of efficiencies, see opening in potentially to a fronts. a pullback I from my you carry-through see spend, business say, per addressing all add. on clients other I a on inflation in certain consumer pulling full But have everything, think really, so the it especially some As things to a whether I digitizing want it the do little devices, want any

Kye Mitchell

the areas, CIOs The where scrutinizing in majority and demand. And invest. I they to think business digital continue cloud. spaces again, customer the more Like have very fortunate, Joe continue both from we're still experience budget we're the of But No, they're have our to Yes. to closely. are their bit employee little to cloud, seeing maybe their CMOs a move as those good well as you pushing to experience. said, the digital, is

In be places, talk a experience, of do we out how we're more can of more their employee seeing fact, about so lot productive. employees that get

some couple there. So as like continued would we've But things, was to spending of But things, they and I wins to more a in path. is say, this have there aren't you down to small CTOs, high Joe in much when We continue people scrutiny, definitely money where did. end, CIOs, had talk there. have device-based -- it more those

Joseph Liberatore

for organizations. was of a The close Yes, on we Mark, pandemic kind all wake-up big this. call

that those these they the realized positioned. were investments were areas, competitively For they making in how

to of digitizing heavy lifting keep investments were to slow moving had caught their pandemic. their to businesses got a that and flat-footed do as lot the were in making they game the and For those aligned business, maybe through they really

accelerated a they they're advantage. and their flat-footed, those that of already situations, investments can up that trying that standpoint. So keep competitive investments caught catch business those those to they've from rapidly their those in enable making holistically their digitization And make better both the so investments, to were were

Mark Marcon

consulting-like rates? X.X% you in inflation bill bill That's just to great little some the can then say in that color. you're providing terms the that consulting talk opposed projects? much is bit the more of rates. a I obviously, pretty increase And mean, a doing of of kind it's apples-to-apples as or sets about little to the you How bit moving see would impressive year-over-year or skill up

Kye Mitchell

I think beneficiary a we've be both. to fortune good the had of

spots. some really we're the we've environment, We seen of also have those moving chain uptick seen from again, good but a higher-level into up food uptick that as, an inflationary

proud. continue project $XX solutions And that as and again to driver think a technology, continue approaching XX% an acceleration driven taking see of offering bill managed a lot to above-market so that's and I growth And our in We're being to see continue be we're really going significant rate. from that at perspective, to teams hour we're place. to things that and year-over-year

Joseph Liberatore

This Mark. is Yes, Joe.

against we think top really I expanding rate stage. XX major which heavy bill our maybe seen that because bill I it's that those all is more rates not but disproportionately, largest taking in means, our we've even in in are that evolution our market-based our here. the those of That significant is really credit customers would are really is call actually than that expansion that accounts, due customers, which call backdrop, more organizations Kye accounts the moderation are or in what

mean, our us I is even optimism of positioned. more business how that I think terms So in gives

Mark Marcon

I in you bill terms do a of what into recession? continuing? inflation does insulate And significant go that great. if little confidence a level that we with your extent bit volume And mean to That's to regards what's declines rate

Joseph Liberatore

Yes.

organization, that has starting of to that still at there softening. terms what From nothing's what How pieces But of mean out I don't escalation. that escalation we into inflationary of X bill those no been say color. that loosening. we've standpoint. their from what had and at conditions, and but point in kind there's some part resources, supply/demand but that's a there's are would some market organizations more I And -- bit moderate-sized I seeing are rate of -- kind little of Kye I ball a Kye, there's of I'll above dynamics, some XXXX? also and of this that, overhired been we're are We're aligning crystal additional a say, think changed I the seeing. to But in softening. additional maybe some we are add have normal large time, into -- resources seeing would still of any softening currently probably starting let there's color? then question see see rolls wage going some

Kye Mitchell

I mean we've been, changes sets, never to rate have And in seen we're way very I really decline from bill continue up we move those skill a think well as insulated recession. the into out higher-end we there. a of any type

Our areas folks investment are continuing to CIO. sell in CTO, of by the core

again, frankly, really little stack space. playing very the companies, a what's continuing developers, change in think the value where So worried are because in your I Those consultants. move we're your to right engineers they And unemployment full -- there's demand in but not to I negative in still cloud going get and any hear folks, think still types it's big we and technology. the on for are right that know spaces. you placing We're they find tech don't in hard quite much People team. They're levels at there's people. of those those demand. up

seeing able things price to continue we're really be teams So to our aggressively.

Mark Marcon

they're among color. pay about a could you're a in that which of the pressures Can I more levels the placing bit your dealing in consultants squeeze with terms of expectations in, inflationary rate year then IT Flex? should own comp two-part. into great That's that you in one just And facing? about, If really for next also, what talk is terms think going folks, the particularly little we

Kye Mitchell

first Well, question. part we of your answer -- haven't I'll the

We strong. demand highly-skilled go this I you to have not for workers come again, pay is technical still think And seen for rates back down. consultants

changes pay. Dave, second consultant So you that part? want do any we have answer not in to seen

David Kelly

Yes. Sure.

levels we've we this So levels us, the years, percentage commentary right? at So say, based as to, normal just with growth kind terms our get of respect last seen up made SG&A, structure we even revenue of market you if plan. forward, of come for been an more of in people as And to quarter compensation. are levels a the still, I upon down those of because of twice high would we've couple that performance our look we the extraordinary compensation the and look some of as of

forward, natural kind if true maintain our leveraged So we see would in terms look associates. how decline Even as our normal we highly is of leadership This commissionable environment, in them. is for we kind incentive somewhat that we this very more of of comp. compensate

So kind SG&A of is about our growth it's natural a thinking of way where based rates. upon

Joseph Liberatore

broader and they work would the in our I that of a in that to on communicate going opening additional the of remote our investments the for likewise we're bit. we're client backdrop leadership making that With working world-class Yes. the population, so be base. and of business workforce, been is with which all across what's development, and the occasional can Yes, the up a the equipping that happening opportunities all we've little have basis technology from tools to with that clients, collaborate candidates candidate course over a and against piggyback really for consultant standpoint, our doing from all able and around back right up a office things the additional XXXX and all our people anywhere opening

are I years. productivity It's been been XX we've continue us people. are allow about. here mean, think I been. going everything they've highest we're of investments on that increase making productivity to those today going that levels I've the to that our to our

experienced firm, made. people means than they've making our levels So as very a very, the ever money more are which and highest

those end of address that the different headwinds are the and to more drive employee, economic So we're than we're technologies to to going to against continue our to things. make to I digitization so their climate. those. efficiencies say continue clients whole investing productivity, even challenging to make and tools no investments would in This is going drive a

be think competitive that which you go market wouldn't large maybe changes I to in market to means the that start see greater and going after type situation. as and share just a landscape of competitors struggle, we're

world. the in optimism the all have I So

are SG&A to make of we continue going people leverage standpoint more elevate performance, from money, get as individuals out well. Our more hence, but those their an to

that in wins everybody So scenario.

Operator

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

Kartik Mehta

if feeling I when less your feel kind Or get about don't of behaviors think last IT seems bit sequentially, And concerns but versus reported that any for XXXX? little negative all you just last like make changes you from it you slowing, wanted a today budgets. a or any at quarter, would versus your this little maybe you're seem in in XXXX been quarter the worried about about there's how customer? positive XXXX you to sense quarter that

Joseph Liberatore

would of business couple then the XX% our I've exceptionally market there's beginning been industry. performed tech this say XX I on I well a up pandemic ever XXXX, in XXXX, probably we're that and mean the X-year in through the seen dynamics. I've that Yes. Again, years comp. a best

speaks I volumes. that think

redundant in that color we're the added the with specifics, and specific, more of mentioned Kye call the at more lot please, part myself had on data in anything end end of is of to a would very something happy comps front on Kye provide that, want be for challenging dealing think of on customer But hone I I there, call. don't the looking to as but front of terms be So you're changing on and than what Kye if point. base, a materially our

Kartik Mehta

for specific. looking anything wasn't I more guess I No.

and looks and Obviously, what plays for today out. the past play out. I your to think seeing recessions, that that's usually have for kind industry how how you and how what's what's of was your an and today experience looking you're just past happened in happening going I idea feel

get thinking? I a feel just wanted So you're what to for just -- more

Kye Mitchell

think very I very different recessions. important, in realize we're it's than though, past we've I been mean, Kartik, to

much past, are the in technology we today. We XX% various And had footprint different in a broader industries.

in I to on we're looking that's so do more in we've think employees expanding general, for at data this said, a an whether their own and in care win week of the if investing areas been. health or more last experience to And We in clients ever is things ours digital. really because of back had where looking in technology, to forward out interesting or client pulling macroeconomic their that's be better to certain space businesses you big business. today how digital employees whether dependent out improve able be data and through I their today, health were they should happen do at the years like and the and to and to you're the burden care be in less. something continuing positioned And that administer continuing more figure environment been folks move they're look investing where to of to workers their innovate And I in in burnout the help efficiencies when what X they're you those for there's than still some to storing throughout facing need believe looking they and by last get people technology, still know have pandemic,

ways move downturn, with like than a corporate to you. technology want part and now America honest continue to big I wouldn't any XX% be position in and seen we've rate see than forward different feel going other of in to So tax to be other I is it in today, you're

Joseph Liberatore

Yes. dotcom, And around, of times want that in technology back versus have disrupted not probably are the by XX% going last would the that on. be every tech-focused go laid as and -- -- less when we've get part to been we lot These challenging and optional. we're of of out cycle I not It's I redundant. where a the what's reason opening exaggerated. X could is us as color well in been more upon just it economic Kye being even it's I to touched now talks had it. But my that so I she comments about And wouldn't different,

the technology cannot opt of You this time. at out point in

So the those even are have it focused XX% optional not that we in on to organizations. is more technology much focused areas today,

just the wouldn't balance have, prepared any as with our to So want that whatever couple bringing might not couple under the and market those with in position Kye circumstances. the we at trade especially that services our unfold time, point I we're in client for to that sheet but you when mentioned, clients, marketplace anybody we're I this well

Operator

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

Tobey Sommer

And adding improvements your staff productivity hiring your Are are sales-focused about over dealing point? what of the significant pace? How at so, -- and You've if staff? with talked to on you this you at kind of time this call.

Kye Mitchell

-- at you teams making to. like types We're incrementally, investing. be we and we're those But right of build the we But and different invest. us enabling amongst cannot mention marketplace. we we still but more do we're sustain do seeing that And to and we that do we the out dynamics incrementally able areas sure the to on we to, know, pull as still now, still that. are some we're need those people need point, think looking we though, could what Dave and incremental if But technology, going where -- to investments to managed I'm areas continuing always to with are we're have. need of There's markets where we at muscle where and we're then the we to respond more some in we investments do solutions is need where need invest hiring back to mass,

to continue take continue, make gains So we we investments productivity to but I market think to want where share. can we on see do expect

David Kelly

gives capacity. we've productivity, years productivity. fair of of I improve flexibility. Yes. I lot the number to had increasing said, of think, amount for gives to mean, of objective that a reinvest as an us us a It further Kye It last using

provide said, additional model, for our Joe to opportunities continue to we're As increasingly going office-occasional teams our become productive.

got And still selectively really see and plenty the to all we tailored things of can opportunity, surges we things we productivity. add. if increase that have capacity. are change, If So we we do

a as great So we're said, Joe in place.

Joseph Liberatore

this. very at of would at put strong best I've is The surprisingly, is and Kforce I has internal Kforce. having a seen team that seen of built I've and bow out our Yes, a this marketplace. built hire world-class. just many we've down been kind turnover a capabilities, the of has a And We've And on the the at into voluntary other iterations recruiting out team little of that to turn of would like we're tenure really to capability in last say here seen Kforce, people are the course productive the that our that one I is evolving our rock. we're over dropped has months with we're things the my a because how culture to that XX lot do seeing bit becoming.

had challenging, to as are as at we're adjust same back well Kye right we're things. but items. managing our the to I'd our we a our well, opportunity I term. there. on an to do remiss we whatever can that be look And as is historically any be this. terms for having going us line because of for want So go you going We're capital be SG&A for term. we more And after never reducing that's to there's as netting playing very you long If in things But budgets mentioned, the natural market go throttle that we're well quarter market to if continue positioned. a people not hire were condition if that history, here to and We're overall here think I because and volume imply we build the are not share prudent up short or I way, to of by the would get didn't to to mention so for

Kye Mitchell

as a uptick our that and really option prices the have our then a come up. been back occasional from people draw to home commuting office for productivity huge you that gas employees been do also are and I Tobey, the different seeing work has Having And think, for has things productivity. us, good forth and don't and

Tobey Sommer

call people consulting? and your, it terms of be us can services, give in stand that it there company would managed how Any it Could some important folks on growth you call does you to rates? some of update an Where kind the give industry helpful. is size in us update the

Kye Mitchell

Great question.

clients, Let is with this really me times the market commercial space excited start as saying the by about the and opportunities for larger several technology continues that total are to addressable in service staffing. our offering that resonate we out than

us. driver managed significant a teams, So be solutions, project for continue to offerings

and to continue will that we be investments looking making So area. at

Tobey Sommer

even natural about Okay. size, quarter drove I few just to its or and with Could analog that we it in hurricane haven't contribution. growth us feel maybe an terms some disasters you ago and much more project in contribution of in frame a prior the heard like give sense talk business? the quarters experience used maybe the

David Kelly

Yes. Tobey, this is Dave. Yes.

we time doing our the who It's though, is for make that want Obviously, us, it's supporting strategic program, we're even This been supported Hurricane we partners. clients sure years. something just not we've for some not and focus hurricane important, is quarter. important couple aren't dollars, million have fourth of to So big relief Ian a growing. for and in that a

support a this So of It's partner part This critical is don't in ours. impression get the F&A long-time business. is really a strategic that of of our not.

and read So right important an do that's for kind than to it more wouldn't of anything partner, I into the it. thing

Tobey Sommer

That makes sense. And last one for me.

think things do maybe of If F&A? in, inning the you repositioning recession, economic you what throws into -- if off, go absent it we you're and but changes in

Kye Mitchell

Tobey. I think we're there, almost

areas the just chain $XX we like mentioned like would move and I just I made. rates, there always what million opening progress at think our we're -- again, in to almost hour. of to in have types my pleased been were to easily people our $X.X automated have so still just is that year-over-year there's there. and food still We I'm had the them, 'XX When bill expect as to done, those But I we're an I higher mean I'm revenue. tech that that you those with really space QX in -- they've do like feel moving and XX% -- able pleased things. aren't comments, up -- in I with initiatives look

it's we're on I starting going stretch that. think and well, the round to

Joseph Liberatore

X% is in we than technology, In rate. add, it's So clients. thing year-over-year. bill aligned more more our talks services basis what, closely Yes. that right? it I'd technology to provide business, that other only about The is of It's profitable XX Kye terms up much sequentially, margin points more up with margins also how

said, she as where repositioning it's bearing already is almost for even, the fruit So us. done,

Operator

Instructions]. [Operator

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

Marc Riddick

standouts, quite the that then detail And about So things be all could vertical follow-up some after provided. little you I'll covered lot, wondering Any you I client industry maybe as call-outs, far as have you I differentiation a brief might there? of should one about far seeing behaviors. that some because be I was as we bit really a it guys thinking that. have I you so the know do appreciate as maybe keep things talk quick if

Joseph Liberatore

clients I certain across I sequential, haven't There's our industry. shift meaning dynamics. material certain are verticals, going there and say we any takes, would are through But within seen that any all puts industry to of And side then all of they're the a their performance of others majority technology. nice just up of really they're standpoint. and look then client say industry at year-over-year doing from I up very that's are there's strategic ramping that, to the and I when and initiatives mean with verticals, positive flip that that less going I mean more on industry used be what I we mean about within XX that industry our up vertical. top have the to would say basis. makeup them industry, our vertical a we a nicely specific the couple from that but a flat, are sequential

Marc Riddick

but any a are might feedback it taking projects everything as be sort far to Okay. experiencing recent of squishy you're on Are got as Great. savings-driven? what you to ask that growth-driven Or anyway. see are of getting any cost this is little I clients? beginning your then more more you And of folks evidence question, with --

Kye Mitchell

cost automate seeing said, to as of you are things, some I those clients too. out savings-driven, obviously, cost models. do looking think we're Like taking they're I

things, to looking As to more less. digitize clients with they're are looking do

a won't them make investment to people -- do there very but technology their of couple on, And consultants, A they invest of looking that's going full therefore, necessarily and, been seen more cost they time, both. consultants reduce of hiring very more to effective There's some savings if I to they're and them costs. So think using that lot just mix we use capital a for us seeing client-specific. efficient swing but client-specific. give -- some we're versus to things if -- from but flexibility it that clients it's impact are typically, that where perspective, and good want from we of have

Joseph Liberatore

other accelerated strategic forward their about, environment, I faster talked on-off mean, got was initiatives it's shift got mean move or how when part you of which XX I I -- an in any been slowing even on been longer. side, comes XXXX, on everybody's never it's to investments industry on-off a we've embedded claim tough switch. it is years. and saying I they this plan. better projects a secular hold, in environment the to is of that this Like has second to the people there the into for put not terms held technology in recessionary an in reality is things have which, through mean technology mean longer. switch I it hardware again, back the the back technology, a companies And side is, flip

and things to you're unless your those put any entire risk. competitive do at basically be can't You longer going business

drive to reduce was experience. if So other and at I Organizations side accelerate sit going I improve already instead, that of costs I and look the believe the opposite the doing nature there that to happens. and what and consumer can things play for it's efficiency

Marc Riddick

last then me. thing Great. for the And

seen You some there. companies touched big a little some layoffs from bit and and tech here the this we've earlier on that of some of headlines as the as actually far

wonder So is going is bit far about maybe a talk maybe of that of little way potentially if reasonable play talent you how that as -- could as forward? Or I filter could and adding looking that out might potentially how available through. eventually sort a that at there

Kye Mitchell

not great that stack we I it it's to headlines, spaces talent, it for It's the up, cloud java us, thing would to said, see we on bit big your a but your a data if side, happen. mean mean saw seen we we're I that not engineers, it. people developer, talent really I haven't welcome not would that. it's think it's little architects. be love yet. my not the loosing I it of would loosening recruiters see full I but can it, not the your were in -- like see I well, playing know if your in it's But --

Joseph Liberatore

employment of skill in these these mean terms areas. we're areas, it. -- skill Again, I many mentioned Kye I Yes. of negative

talent. And being grabbed flip happen So is realigning that lot for direction. been compete that a see in you lot maybe of have their costs the maybe for other talent, of haven't as they overhired would other the to again, organizations to larger because a some that absorbed able just organizations and to talent in

Operator

are back like further I'd no for remarks. to turn questions. Liberatore closing to call Mr. the There

Joseph Liberatore

Well, thank support you for in your Kforce. and interest

who Bay headquarters. For might there Tampa have missed those our times a our was piece it, section in a of yesterday, great talking corporate about opening

XXXX. So like forward We and Kforce allowing consultants say look in your every Thank your everybody to extraordinary with call to quarter clients of and I'd also for for again trust talking you. serving to you and with efforts you. our you Kforce our thank provision and the fourth after us to partnering

Operator

This concludes call. today's conference

Kforce (KFRC) 1 Nov 222022 Q3 Earnings call transcript