KFRC - Earnings call transcript Q1 2024

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Operator

Good day, everyone, and welcome to the Kforce First Quarter 2021 Earnings Call. Today's call is being recorded. And I would now like to turn the call over to Joe Liberatore, President and CEO. Please go ahead, sir.

Joseph Liberatore

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

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

of our In remarks within portion have Relations published prepared our we addition, Investor website. our

were with Our the March and encouraged current of first stable discussions constructive more we performance indicate expectations, quarter the business. past over us environment clients to most and by XXXX. consistent in trends our than technology generally quarters our with it trends our is throughout operating that and was Operating X was

or number uncertainty shifted the and anticipated into at interest as will fall dialogue whether any be the recession. has when all rate if should cuts cuts remains cuts this referencing economy of to a year. discussion in U.S. The XXXX, surrounding expect there cuts will we a not from There

the exercise including caution new visibility. expansion our Warren technology broadly backdrop, Against Ukraine, continued complicate Israel recent aggression, of concerns, Geopolitical in this of the forward-looking have speaking, clients, a with Iran's degree the to war further investments. initiating

restraint does increasing but stable. rather to this not Importantly, be fairly appear appears to be

be we macro to to we the As that to encouraged clear. by priorities be clients we expect backlog uncertainties, the strategic look continue the begin investments beyond of imperative for uncertainties current once high our

and optional simply business are competitive climate. not investments Technology disruptive today's in

technology be want no simply Given focused there other the are space. underpinning, in than other solution we to talent market secular

closely XXXX, performance while priorities continuing quarter half our of upcoming and strategic monitor and necessary productive and retain to adjustments move and trends business we we throughout the in invest long-term our any make second our most our to As indicators second associates. will

of guidance. were per reasonably translated leading our into The about is first Dave XXXX, indicators range robust technology within in revenues improvement spoke and call that quarter levels. both our assignment close encouragingly seasonal our results, quarter last our earnings business we in new to remarks. share historic As our on operating will prepandemic second in upon to to expand which his at sequential March in Kelly to levels expected in our trends growth the lead growth

is message unchanged. to people our Our

these what control maintaining we we while stay During people uncertain must on decision-making. to view and our long-term close can, our our clients, times, a

through and what tenured equally We are that have is team been economic cycles team and dedicated they and adjust changing high-performing we do. passionate has to about to blessed prepared together a to a have to who multiple tenured, conditions, blessed quickly are executive is leadership market

use most broad continue to and strategic all in While role is differently, what of increasingly a behave recent instrumental cycles economic that shift remains evolve secular with play powering technology, associated and including technology the businesses. clear bit AI will an

will we drive the than accelerate. continue the pace other rather believe that resources will replace change and and term, AI long demand to of technologies Over technology that for

ideally that meet are We positioned to demand.

identify problems complex the companies world-class transform their and Our help competency to competitively scale and ability businesses. is rooted at resources help to in and time solve critical core them real provide

staffing their engagement engagements projects. manage team hire, also be to model forms, broad needs traditional from partnering across operating direct with assignments clients of in meet manage Our to allows our us a to flexible spectrum and

our improving remain skilled tailored world-class well has our is grow consistent solutions and to confident firm been technology market years, provide over many positioned to business companies to decision talent refined highly a for critical to with Our our organically we business that model conditions. success

one our team proud our clients, I Kforce. passion confident serve with remain Kforce. execute future about of cohesively to continue as the to tremendously incredible excited and consultants they as of candidates I'm and

trends. will Kforce's our performance results Officer, Chief insights now then as financial into operating Dave? recent our and Kelly, our our detail future expectations. Operating well Chief greater Hackman, as provide Financial financial additional Jeff give on Dave Officer, will

David Kelly

Total million, the for first XX.X% Thank you, quarter revenues down Joe. sequentially X.X% $XXX were and year-over-year.

business declined technology year-over-year. X.X% and XX.X% Our sequentially

call, to starts improvement we those in in the slower our on following experienced quarter. year-end believe technology year, in that January contribute business leading As we mentioned our start indicators higher the levels ends, last would to late new a our higher assignment and assignment positively an later and activity in

sequential the As expected, to March, we our we which within growth a before experienced notable should QX throughout pandemic. saw acceleration range consultants lead assignment in on in the

to continue the point we projects a their provide also that while highly undertake skilled need clients of recognize accelerate to retain technology await talent confidence and increased the to increasing spending mission-critical they of Our initiatives. address backlog to

assignments providing staffing business highly both Overall, managed over on our skilled part remained talent continued technology few as average bill traditional and managed have stable our rates reflect to in and of teams the of quarters on projects. focus past

governance, project AI-related to digital, remain and required UI/UX, focused program clients AI by the work areas and in initiatives technology benefit Our eventual cloud, management on of some the foundational modernization This investments. trends efforts. data reflects of ML, of data a and analytics, companies the continuation and represents gain critical of recent business intelligence,

XX traditional than technology Flex The margins offset year-over-year. the annual XX basis in resets. lower business helped to declined as points claims of expected care and sequentially health basis was points our tax decline sequential XX.X% less

environment. continued the spreads basis, which on cloudiness pay bill sequential Our is a point data be stable encouraging of an the to economic given

offerings beyond to the cost-effective success services a right continued project service to see our and their and access requirements. for broaden as consider talent traditional project essential solutions. teams managed Clients include their to solution We've staffing to our

on Our provide challenges. companies and clients' integrated recruiters by sales, relationships strategy to strong solutions world-class and our teams we and effectively efficiently consultants cost capitalizes address with our that have utilizing higher-value existing project the

their primarily large comprised of investments prioritize is market-leading and competitive companies. to advantage. typically diverse leaders is portfolio client Market Our maintain technology

continues their addressing in critical drive needs ability on to long-term be sustainable performance. to above-market our focus Our

sequentially the in seasonal number we manufacturing Given the we verticals transportation financial in a our quarter, headwinds year-end, and retail, industry stability services, the in declined in first quarter. fourth our steady at relative but resets verticals after and see a saw performance some of

decelerate we single revenue Looking digits. expect on the technology forward consultants to the in ended the revenue to in consistent low increase digits. assignment declines quarter QX, remain relatively for sequentially we mid-single levels the and with with Year-over-year will to first to

X.X% to year-over-year and our of a we more business efforts FA XX% supporting approximately our declined XX% sequentially declined no total macroeconomic longer repositioning reflects challenging due the business, Our decline The impact currently revenues year-over-year. environment. of and are

higher Our ] per is continued business skill that we continue synergistic of business hour bill our to set to has average rate this [ with technology offering. exceed the drive towards more $XX service as

be mid-XX% QX range. down FA to year-over-year expect revenues in the We

decreased the XX in significantly basis margins as business to have improved X last our lower FA our due points basis a with mix client points project XXX Flex improved. margin of sequentially has years over strategic a but business

in pay at We these expect levels QX. bill spreads remain fairly to stable to

to associate thoughtful strike expectations. taken productivity revenue our measures between and balance a We've

the most when it our investments market in we're prior prepared that capitalize on downturns, business well to in we associates accelerates. to retaining economic done demand we've making and ensure productive on focused are As targeted the

project the those our continue solutions capabilities in to managed within offerings integration which well. is and and teams We the of firm, invest progressing

that we the that has delivering than and excited have performance. expected, remain success our longer without market our The as and macro ability many in continue in the firm candidates While strategic happen uncertainty consultants environment place us. clients, above I a doesn't trust persisted unwavering position about the to

resilience We've that to are success in aggressively difficult this and team. critical during strategic to to displayed by incredible the creativity our initiatives dedication, so. able while continue performance continuing I to relative our been to the expect continue delivering strong appreciate do invest period long-term and

turn over the Jeff to Hackman, call Kforce's Officer. now Chief Financial I'll

Jeffrey Hackman

Thank you, Dave.

sequentially First seasonal revenues gross of XXX and resets, year-over-year of to in basis by XX points were million Overall, a partially XX.X% midpoint was tax $XXX XX lower expenses of basis points a at basis $X.XX quarter the of of margins. due costs. SG&A revenue points quarter to expectations. of first of our per payroll earnings the offset year-over-year health Overall, combination declined margins due mix declined Flex which a declined was hire year-over-year. in percentage decline a and to increase care as revenue lower direct an . Margins XX.X%, XX.X% is share which

are structural revenue our impact structure XXXX Our reduce made disciplined lower levels have revenue cost the in mitigated the variable productive in expected management associates costs to base that long-term on profit we adjustments gross said, and levels financial prioritize of our to Both compensation of the significantly lower significantly we July and initiatives. profitability. which our are to With retaining contribute advancing enterprise objectives. and most our investments continuing to our to

the of end Our operating our was margin toward of high expectations. X.X%

rate invested tax XX%. the and approximately $XX was effective XX.X%, to we and was which adjustments quarter certain higher Our in anticipated flows capital tax was were return to expenses Operating nondeductible due million, greater than cash credits. our first on nearly

a in managed We strong our in growth pristine organic results over balance with many have which has years. sheet prudently debt. by minimal consistently resulted business driving solid

returned consistent returning share QX, capital and through total of to with of our continued years pattern significant a many and in million been $X Our repurchases. has shareholders over approximately dividends

since shareholders more which than We business prospective in million represented improving XXXX. high. capital of acquisitions slightly cash levels. profitability approximately returned have committed and climate we for economic and the has significantly in, of our to returning generated, regardless remains any to our very the threshold $XXX XX% capital growing our while All remain

sheet flexibility facility a our opportunity us and valuation more there our Our the financial performance aggressive between if provides future get expected under is stock strong repurchasing the of and in have balance credit shares. our dislocation with to we the

of the quarter XX the is as the XXXX of second first same which The days, as second quarter quarter same has XXXX. the and billing

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

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

deliver position longer-term annual for term to attaining continuing excited about while margins help objective revenues. investments continuing the profitability remain long-term slightly in strategic We and drive $X to at double-digit of make achieve us necessary than over our to prospects to long results operating greater our enable above-market billion the growth and

to call a our to like I'd team, over management for We efforts. extend entire to our turn sincere for of their now teams like you thank all would behalf of questions. On the

Operator

with We'll first our Marcon Mark Instructions]. question take [Operator from Baird.

Mark Marcon

believe more little which How -- seeing mentioned areas about in just your that? activity a improvement talk you and in? You is indicators you leading you levels Can see late January higher positively. those exactly bit would what that contribute strength it? are did in some Like terms the broad-based of

think you some are of know there facing? do end the what And for? but I in that control, looking within they're discussions, your is would that up domestic they're client geopolitical things the not uncertainty resolving their

David Kelly

of activity that levels start. were I'll we at submittals look the activity. client as we've matter is the right? order of prior and pandemic. Mark, as the seen mentioned you mentioned, January, of we a front-end lot seen indicators this Dave some job And at call Kelly. increasing Yes, that lot in levels a had saw This those flow, on typically fact, Yes, levels that visits, we amount a the to We the activity of actually of

actually promising. was that March. to did some in new expectation is indicated, had So we would lead activity the that occur in start flow-through increase the And and as

fact, March, of see the each increase. matter an a week As did of in month we in

pretty what of historically we seen. typical have it So is

I'll saw of we year, in out, we end saw September, that a that couple At Now right? the times, last point October. of

into little in remarks, I prepared as seeing unevenness As still a into, we of quarter, commented there. the look we're the second bit

as clearly, Joe that of think, we're still certainly there's fair seeing. a I So uncertainty amount said,

amounts those stable perspective, activity. And per obviously, things been. too of been call increases want a than periods about trend actually have So of and it's some, se. have become We certainly, clear a cautious from our success it's bit they to probably, to some greater be that. more that there's But quite early

I in we're point big pretty said, It's money industry based. And or that. very mission-critical predominantly And to asked on type large think obviously particular We continue we projects. couldn't I would with about spenders say, spend industry. seeing of they one and Large as driver. client driver where across I companies you'd effectively any do broadly are business to companies, technology a every

had actually pretty really you a had type even there industries. actually clients to it's want We client-by-client in services, said we saw robust that mentioned do. [indiscernible] I've So number of But headwinds. financial spend. a evaluation increases some of in

our again, and in quarters, market-leading some across us. strength being and those of it's for couple many the execution an geographies to us game clients over led here the many the clients clients, in So really has for got of us execution it, frankly. We've benefit of last portfolio, success

Mark Marcon

Great. hourly what pay rate to the bill come XXXX. overcapacity are little And at you maybe pressure? industry X a talk you bit wondering, looking rates. . I a is modestly And noticed about the some caution QX , relative very had in then has is the [indiscernible] price specifically, change? there there -- with I'm the spread? and can down that in over those regards mix we've we're And just paid quarters, if seeing some to with Or slight last

Jeffrey Hackman

talk Good Hackman. Jeff And with you. this Yes. is Mark, to

I quarter. think this talked last we about

the much rate, in bill decline that. modest average read relatively the into wouldn't think too I I

it's decline of actually dynamic stable. QX very, this think, year quite for modest, QX tick and XXXX, last year, very think QX I And roughly part has an environment, slight QX hour. still in QX an the of this think of very largely a into to for sequential $XX large and I has was down. encouraging that's to average rate sign year, continued I Very good bill us. been this of that a the

of the the business, half think costs. decline. think a look what That points. give actually on you our the script, the of were expected bit saw of bit a lower basis for his you in I is relates I comment you trend they're that quite some 'XX, we large And business pricing QX in early some than second Dave as favorable in part QX is on technology to saw XXXX, overall down part in in our it that rolling the came margins, QX a typically, XX would to a in to When spreads little stable. of care I And pressures our in certainly we think early technology I year. see in we And spreads, QX, mentioned more health there. little at

But stable. to still as spreads answer that's also average your hour, quite I are quite to X to say would it so Mark, rates, as think roughly it's our bill stable well. questions, continuing an And I relates be $XX

David Kelly

us pay with pay and moved rates is right understanding and be been ask change this, Mark, technology in to bill rates the Only Supply supply. It's Yes. spend a to even periods Suggests, require here, right, thing, inconsequential that true have to slower add that's time other continue tight even that as why of I'd find again, that, terms in clients, talent of to the to market right? going our haven't So in to and that really to in continues rates almost is you'd understand slower obviously, marginal the the bill well. either. rates.

it's be supply to highly That to very for difficult like many much of find. in talent particular, skilled been continue So right? years,

Mark Marcon

I one Great. could squeeze if And in. more then

to with capacity. current regards Just

of to going we be back a having billion? here? we perspective, think we line margin You increases in the of How have it billion going $X towards did much towards the -- uptick or margins. significant do we and excess up as your mention, get Is sales get $X how hey, with into mark regards would from we're some revenue capacity if to about force? end terms personnel to recruiting the should incremental you -- fairly from significant much field in in have expansion straight smooth line trajectory terms the a or How fairly

David Kelly

again. Dave is this Mark, Yes.

you've our resources often often, I periods. this critical Maintaining very from in first, slower us is think important. heard

out made we've enough And that So people break, are because you going of things to carried always sure we've the to don't who one, are the recession. obviously, when two, capacity, want short-handed. those we be lead

have we capacity. ample certainly So

terms of past, obviously, the in more we think, have I actually mentioned, had in We sales. focus

a of a a shift So associates appropriate that sales-related ago, did got here capacity. year we've there's we always to right? So bit total than ensure mix

we've invest not had like to we the to doesn't We need to in mean that. take We'll technology process a in But to the that to we biggest opportunities add to all, we to improvements profitability driver be resources, feel It improvements are expect get additionally, we to us. so. productivity be when technology productivity return, and profitability, that I the clearly, a past of advantage do the trajectory improvements for creates operating if that is that margins able very additional think, continue driven spend. in certainly, growth that expected. of the lot things seen comfortable what's of So things won't able of that certainly

how of that terms to start out, In linear improve. nothing is as things purely plays obviously,

are we've We well. big in other operating but see to improvement a going gradual margins, got some opportunities as

be pieces going to Mark. There it's pieces So not. that There linear. are bit are that are a are uneven,

say has thought I thesis not still we and would our changed. -- process So

when think where to I little to continue an operating we over a we from get XX% to margin standpoint. something billion, is expect be $X

Joseph Liberatore

XXXX, Yes, just that into only is, throughout Mark, build with ramp global here say, we've relationship, a that everything to to into clients is getting capacity XXXX because to you sales Dave the our other much entry needless points add up would I process. continued salespeople to shared thing

delivery the needs necessary. can plenty if job clearly we've we've within a that that Also, lot a those job orders quickly well to actually existing invested front very and standpoint, as a team on because automation demonstrated technologies there's turns a dial service of has to in turn our and when capacity our market in coming in orders. we ramp-up area. From increased standpoint our -- as from head technology count sales So service recruiting and

of Likewise, address say, period would expertise, a capacity a But our the our level. as our conversations solutions capacity pursuing we'd last course then over subject here plenty to they're of months, bringing the to we're within elevating add that, to needed But continued to be and XX lot organization, we of to especially industry lot in taking game, for that we quite anything our we've expertise, that. of consulting clients within of another have making able on a terms accelerate difference whole KCS, work a some do time. matter the and of I really

making I things are fronts, investments of greater building these So just which as think we've a on been all those lot capacity well.

Operator

next Northcoast Kartik with take our We'll Mehta question from Research.

Kartik Mehta

You having they mentioned something wondering, about company is as figure the for could impact perspective? what in how that need external it use to orders they a causing clients and positive from an it, maybe delays obviously I'm be jobs? on or to run, out the the implement resource AI long short pause run. causing any in how maybe your And it internally, But any in

Joseph Liberatore

instances, AI talking with seamlessly segmented moving as to cloud. the kind each to with I infrastructure experiencing out I example, all their say, work within I And models, many would take Yes. that in, characterize building But preparatory areas systems their -- well other. of would efforts things more and are our we're clients advantage to as data such supporting ensure large Gen they're integration as for language clients also way the in means in is what we're that of

there's data addressing from whether massive governance, a standpoint, efforts. likewise, going major structure, they're cleansing efforts that data then be data And data on,

technology been potential the we've in I'll also understanding these successful our the clients call have cases. areas So their at efforts, with and what and been use strategies winning exploratory evolving and engagements assisting

areas things. anything. don't can seeing they energy in don't for. I of themselves So organizations so by it's this in the take going anytime meaning I We're change those a is organize of near-term that's as think And way, lot advantage believe something to the that pausing that future,

a the foreseeable prove the for going to the be be revenue the Kforce the future. application for spot language -- areas I is infrastructure is powerful would firm It's say as true areas. that, of will highly cloud. such in be ultimately in entities to and use going it's and generative where mean widespread models It's sweet that not data to going beyond a this Mackenzie, our accelerator It's a the these going For generated. strategy to come. the I in time long be like business and for of be to where to AI probability who in is large

played really we're positioned, about those So it to excited everything where our already on focus favor was, fronts. how we're kind our of

gives So a bit you backdrop. little hopefully, that a of

Kartik Mehta

And you're think well And see sure your does. for to it if margins year? understood be I continue in as sequential for that of we I the to some volatility Yes, capacity, you on revenue, think a Or could commentary I just increase portends margins? margins. in the make rest do wanted there just adding

David Kelly

Yes.

I consistently be Obviously, think, invest, going we improve, managing the continue to that capacity absorbed. been improve, appropriately Kartik, So that right? speaking, as will to margins to we've talked some but how are sure the we'll We'll of revenue been revenues line. we that that make generally The -- to prudent bottom has business. return about the get

I So as expand margins revenue expect expands. will

Operator

our from William next take Blair. Romeo with We'll Trevor question

Unknown Analyst

versus necessarily I integrated one was X on just you had could are changing First teams guess. seeing types, function. but I you're different not for more project in and of have an comment whether trends solutions project you was evolving demand one? It's the wondering or businesses, on this staff kind what for I of sales know work, I of managed just if each kind clients environment? augmentation kind And

Joseph Liberatore

to tied say project to clients. get more seeing us the the allow one like project strategically integrated greater gain both we're opportunities professional then approaching that's every Because fronts, an there's visibility standpoint. of the we why staffing I'd with reasons demand strategy Yes, this from and and on involved needs

often early and projects strongest our move QX, digital the But and our and customer realizing to development, we we the as in on part well here say been cloud. of touches continue QX. to continued as of initiatives, into as pipeline that which I'd the around have and experiences build existing to their around internal work application transformation much that see opportunity focus continue our also through probably has build pipeline

We requirements continue to also on front. require interfacing oriented, cloud lot projects that data a see of the also to are which that often and

So to work. data traditional we've continued opportunities for see pipeline those

mentioned as bit the earlier opportunities little also, future. my we to However, in response, data a in last and in around are engage AI clients continue I preparing as more we ML the and for

with say seeing I'd development, data, cloud digital, of said, we're terms all in continue all So that areas to remain healthy very need. of

we're So terms of well market. in very we feel positioned

Unknown Analyst

Okay. a follow-up just Great. I stable but makes like That And been of competition. now. in lower guess, sense, for the of then level Joe. a feels on, kind while we've demand It

Have losing you're any you maintaining of business? type started in like changes have I And to does feel in guess, look similarly, changes any win And guess, this environment? are or to the way way I competitors gaining, generally, the positioning choose themselves clients share more seen it a you see guys provider? in to

David Kelly

Yes. think couple of a Trevor, I things.

just critical. I be way within is think you've and deliver trends, will whatever right? touched for the can and from see. they're obviously Joe that us, in that deliver as who they'd is it number services been of that But do us ability project it can clients, right? of these And delivered. companies spectrum for we obviously, The solutions it. you staff Because clear, all are talent with, the looking a clients managed across a through like from Kforce the business large looking those such country. it things to certainly, we are on different hear repeatedly they provide one augmentation We to the structures way that quite services clients well, do from the hearing thing

growing So is a seen. clearly that trend we've that

advantage. hear those so competitive industry ways us, ability repeatedly, for a the the deliver in services And across is to hugely various it and you important

Joseph Liberatore

we These going management. get I Yes. consumers their a And that consolidation. from services very years of provide. can competitor been large our add in organizations, for the would aren't I of is through of those door organizations mean what where Most in have and that vendor sophisticated vendor focus just is larger realizing they're walk lot to the requirements. any them

the So get an difficult get and those foot it's organizations. your very door in at entry point to

have So we landscape also there. to capabilities, lot inside compliance, regulatory, say similar a Kforce. don't with see we're from competitors I'd services those dealing larger capabilities changing when competitive delivery the organizations that

any pricing or of We as It's as been much haven't anything that seen competitors usual. predatory usual, pretty nature. business competing

no there. fundamental major So shifts

I'll more say business, billion into would I may they get local then billion more when $X maybe organization $X organization, utilize or it's organizations. where localized mom-and-pop where smaller you what call market-based the to

in puts price ]. -- to same thing usually see willing seeing point that margin cycle away, You we're yes, [ are where, we the give get which at away things they this the their services nominal for a

on in for typically don't of away from pressure we're they're terms types a lot have is what those bankruptcy debt because organizations also of bad the and one those But things. they reserves seeing account of

of And see we those difficult one to situation. a then in organizations cycles, start see cycle is do fourth because we take place. them So a south, my through these every this. when goes something those pressured are puts practices and it This flushing of being

really move through on the typically path. cycles, local, organized headed them, It's down As haven't these not are we that very it's more when are And larger difficult players regional financially effectively. a suit. south goes they the something the providers and then disciplined typically who more

unfold. same those seeing we're So things

Operator

Riddick question with from Marc We'll next our Sidoti. take

Marc Riddick

in a as than far sooner difference behavior much as of your that want little of seeing they on just a One, get wanted touch rather way I views a a to we of guess of slightly on evening. are smaller base your versus a act wanted couple good to on customer -- Hi, to different sort prioritization bit dicing of things. I it. things I from later? larger

David Kelly

from They fund a Yes. Yes, that I client so they're them a continuing to those has necessarily more those not not the sure those initiatives been they technology things to a change Dave. to that of changed, and are cost but that things That looking Behaviorally, here projects. all perspective. Mark, doesn't do bit are say efficiently not little is taking wouldn't of obviously, undertaking longer slower. behavioral size-specific. bit little ways little may this have is looking do and conscious, in them a to be critical those bit mean terms for strategically make of that invest they're critical right? for because are them So that size, obviously very projects

is majority very, business of as a large our Obviously, mentioned, very customers. with significant we've

maybe No. a our great within haven't not we even we're portfolio proxy, different really, in mindset, it a So but seen

Marc Riddick

fold some you Great. make then and curious talent and move to as I much onto things of on want Okay. asked, you so to that. things year-end Have talent availability far as might the that playing sort from the of folks to was the I a relative the the the field? to like. now to bring sidelines into seen maybe some maybe have or -- lot wanted a time asked I of have I already the save as of on views And sort about been would to shift your

David Kelly

Yes.

of XX been where are So last right? for The want sitting people suddenly difficult has, there to quite again, who our effectively of talent, For and typically, us, said highly on are. And work. They true efforts comment -- we're before, the years. skilled made are sidelines I number opportunities, a We here, who to frankly, right? have said, I lot had this skilled and a been have focus don't this highly people that's the find. always the opportunities. always for the have of -- recruiting

changed anything So I think generally don't speaking. really has

Joseph Liberatore

dynamic things have seen conversions. only at would of is the a say little a we shift when such I look you as probably where bit Yes,

significantly are basis. down conversions look year-over-year Our I at data that see -- into think on the also a rate. see when And ties you you quit same we and

moves there opportunity equation, an active that the was wage on So euphoria first they professionals are and was of the is with side even that as high-demand mainly XXXX, as make because these of consulting were on technology that they we front. that are during the what inflation, in in there happening no of half experienced question to XXXX, not all marketplace

making for moves provides that's are today. what not making those were the people People moves because money. So not landscape

that So would X X has months over here of be the on last probably dynamic the that would say front. one that's to shifted the I course

space But for play. still, there. talent. always balance demand a been There's There's in the high been always we supply-demand

So one of if our recruit and the talent in Kforce, market given the this goes have at to I best competency #X the to identify at always time. believed is core a ability back what

right the of I real-time to our the have progress consulting versus the that people providing clients not given might market we're in available prices. also those related engagements. because market those them made believe So giving at lot business a best is for point a aspect time skills solutions-type we've that with why at on talent bench

We are seeing a that make difference.

Operator

Instructions]. question [Operator next take . We'll Josh UBS. our from with Chan

Joshua Chan

little a demand you if recovery played guess far? over so would guessed. a X, out do why that last activity you been slowly so, I you And the think than the back months, has recovery have has step if took bit more X, or X

David Kelly

out One, would played Josh. it's I have we than Dave, is hoped. say slowly more would This Yes.

right? been us. I uncertain, uneven, fair, seen few minutes economic periods For environment But be a think We've that's right? continues right? some challenging. bit speaking, continues to where be mention we've has It benefits. generally to seen slight it ago, the But a I'd

overcommit. Joe some clients And to the of being this cautious want to call, right, they because alluded at of the very beginning are drivers, don't

had slower than anticipated. And so we

than some When economists recession. have rate happen. but Joe have a touched know there saying, on don't predictions going to cuts. slower think what's been We I been over

is, imparting going effectively happen, So it's it's clear think to I so knows caution right? one anybody case don't think think what's every there's I thing continues And just significant the that's to if clear, across be I industry. of amount that

Joshua Chan

as makes to Sure. versus And from think sequential I to going increase development in expansion mentioned pre-COVID? appreciate Or is how then normal the QX That QX margin going similar Is activity about to the well you QX. QX normal? sense. to the that. that seasonality similar margin you do from

Jeffrey Hackman

is payroll the second standpoint. When think Yes. profitability overall contemplated talk line margin. you Jeff. in with first we've anticipation, margins, the at very operating of and been a tax Yes, that fairly seasonal our Josh, is this our improvement guide bottom to Josh, look you. getting and the Good I in because quarter mentioned a the margin seasonally of a stable The dynamic. guide. flex as obviously, we're quarter, lower our Clearly, alleviation times couple of have from

payroll have if Joe that can perhaps growth population. our capacity see additional revenue to stable that to to QX and the associate that current point, the absent each than we absorb we Dave were on And the a gets contemplate. alleviation touched where what within to I capacity think Josh, we some of higher we be expect QX. So taxes

seasonal kind you And to gets into see think answer profitability a we normal the So expect is yes. uptick. . that would that to of I a

we We the about to continue priorities investing those are as enterprise in talked our look still, in we've term. the advance to long past, as and

revenue, billion about double-digit that. talk we significant in role $X priorities in greater As our play the in enterprise slightly annual margin, than a operating

the making still we're think yes. those is I yes, So the term. investments answer short for long But

Operator

We'll take Tobey from Sommer with our Truist. next question

Tobey Sommer

sort With anticipating and share? of a respect tech, this that pickup to growth new in accessing to growth? sequential achieve Or you're customers is staying some the are in customer taking you

David Kelly

Yes. Tobey, is this Dave.

different -- would It's across success. So said, obviously is have some as the I answer So right? every broad-based. pretty across industry, both, been many clients. I we had say,

we when lot always diversification a clients important We are necessarily doing and continue have and As of strong do. you spend. sales larger to to attempt a don't some what you is expect, we very engine of what incremental might obviously have an part

from is. that it of some growth as client new So Yes. sure logos,

seeing. that But that consistently in it's So we're combination attacking. I a of would been a footprint say things. we've those

do and clients, build there and client to with client, additional clients gain large So business opportunities don't new large plenty to share. every we business with both are certainly of

things. a So those both of again, combination of

Tobey Sommer

what the you acceleration satisfy year in industry staffing in perspective the would more in they're your in not years quickly? but demand, of has X growth look forth, I on to is months, growth, an demand. you there cycles first this about your job to and like your had perspective to growth outsourcing, to pretty I'm so for pretty because customers have Or in drift on your good of own been internal a themselves? capacity want talk turn customers had think we recruiting a to your down and kind do of trying that growth. where can We've get GDP get going been recruiting business we a sort more of XX It's recession.

Joseph Liberatore

demand thick is going the because when happen Joe. monsters capacity, always been into has decimated. probably board to existed Tobey, We're of Yes. the cycle the it's at going 'XXs world such recruiting where port What's of they're capacity, a this to of turns I advent leveling see. ultimately, mean everybody. of the across to going I playing to have cycle on . And -- as field providers and the talent in to in see going back same and their have -- the recruiting capacity. kind what's winning what the going bit recruiting be not others then to going recruiting yes, to we pattern the they're access. that higher they're to another during for that Kforcers happens and start mean, then field the is the it happen is, the level going there's capabilities the build we're little is this And

really we that. So don't feel

this coach the times, mean and money, when to they function. ultimately things. difficult of moves function spots that's we happened cycles. inside other first things large happened on purely money these that into in cycle as types enough, in many of go this I And find is cut it's terms one they're corporate this customers in is that's what and the when recruiting what I making themselves And those the try sure of for tougher career-wise of happens individuals individuals our is

and So coming the the same cycle is of this way every it time. that one out just those around ones keeps plays --

Operator

for And question-and-answer Joe like that the call closing back or turn over additional session. to the concludes any I'd Liberatore to remarks.

Joseph Liberatore

for you your your our for and you you I'd Kforce We Kforcer and privilege again in with say and to clients and look quarter trust after to talking in to XXXX. every interest partnering the us you your thank and of second serving our efforts Kforce. Thank consultants you. with allowing forward like support to for of

Operator

you today's conclude that And participation for today, you you. does Thank presentation. Thank your and now disconnect. may

Kforce (KFRC) 29 Apr 242024 Q1 Earnings call transcript