KFRC - Earnings call transcript Q4 2024

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Operator

Well, hello, everyone, and welcome to the Kforce Q4 2024 Conference Earnings Call. Today's call is being recorded. I would now like to hand the call over to the President and CEO, Mr. Joe Liberatore. Please go ahead, sir.

Joseph Liberatore

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

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

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

by the Before thousands are or impacted have I orders have warnings. evacuation summarize with caused hundreds have people thoughts performance, of and impacted thousands of businesses of devastation prayers and pure in our our and been Tens wildfires destroyed by been of the those California. homes

macro for than years, yet industry-leading proud teams remain am As our in have again performance, of technology to our stable our our I our in we as evidenced early for uncertain throughout though X environment XXXX XXXX. business demand been extremely technology by how performance stabilized an this environment services in in year. and in relatively subdued operated the more have operating

profitabilities high teams revenues have of provides Our to make these and necessary performance, as within foundation moving critical great continued a higher the investment maintain of to inflect. while return persevere adjustments we on elevated levels also business This maintained the our have levels initiatives. to forward

greater all clients India views key we of of preponderance the begin into the other business technology experience firm's ultimate as we successfully the offerings delivery development that seen enterprise into have the our our spectrum our for than along our year. XXXX to in we be normal the naturally take We have evolution continued state to us seasonality in yet as Regardless Workday One offshore official our margins economic may nearshore positive of generating made and to tremendous integration we of our initiatives return the and the and annual of our further revenues. further year. reassess meeting standing January the end environment annual performance suggest improve financial the also years the in revenues we doing across the Rather, for to obtaining not to continuing as capabilities been With returned with and at year share billion opening our and our while inflection future enter of strategic XXXX to to progress move new have $X.X application service longer-term indicators. operating as lay said, well that these operating of and transformational meaningful with and the implementation least of for have post-election of positioned related signs we conclude center cloud objectives at will long-term Conversations full additional in capabilities foundation are in market of environment, XXXX get significant priorities as with our point of billion projects margins our the budgets of shareholders. stability to Kforce. Each $X.X HCM financials, operating when as generate in XX% to nature contributor a clients us we in of goal at

resolved office policy on his administration potential with XX, been Trump unclear. has impact changes the taking uncertainty political from President January the While the and is

been initiation We strong economy. broadly indicators a certain delaying prospects gain of with resulted backlog the caution addition, as XXXX in bit believe that believe products inflation appear exercising continued of Fed the in In has U.S. in markets. will less speaking, for cuts increasingly confidence the We which clients initiatives strength the stickier has clients, a proving additional in incrementally technology and further technology an they in investments. labor invest materialized, anticipation have not rate to technology in begin imperative recession that in of partially strategically that

our the X% expectations our our exceeded per midpoint fourth of the growing sequentially midpoint was day. technology our business billing quarter performance, per for As at share revenues almost guidance. Earnings of with

As business. we make performance to stay continue will quarter move trends to adjustments the of and into first XXXX, our necessary our and close any to we indicator

the most train the the announcement their being been last computing provide AI power recent OpenAI to models. AI several headlines, data Stargate case As centers dominate the DeepSeek's in of Venture to years, advancement continues for U.S. and the build more to new the to perhaps and to develop

technology we articulated, innovative of will change believe the improved resources technologies previously an will and role and that follow the historic that, accelerate. have impact other term, efficiency in ultimately play to pace we powering AI that will replacement continue over Jevons that than continue of businesses As Paradox for to greater and increasing where rather long demand pattern the drives

are a ideally positioned meet We that built foundation Kforce. at demand. We've to solid

consistent. our As priorities to ahead we look remain XXXX,

necessary We integrated evolve and offshore near further back our to make development our center. inclusive India capabilities the our and will investments transform strategy continue to of our office, advance

again an returning and this, balance sheet objective through has our strategy our dividend sixth position great significant shareholders flows. quarterly healthy generating the of us year. consecutive cash us organic approved resulted share ongoing a recently a Our growth support and has for carrying Board in repurchase our put in support predictable of to This our dividend. In increase to our in Directors of capital strong

met am of how collective fought through resiliency Together, team. made we I Dave, and and Kforce the our environment, a wanted challenging operating some every difficult of decisions transitioning reiterate Before call I to that arose. proud performance the challenge to

Kforce. of excited have are dedicated could future is a the to not be at We that more I blessed high-performing tenured, and about Kforce. passionate team

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

David Kelly

Thank a business Revenues on billing sequentially growing you, of the midpoint grew revenues our basis. X.X% exceeded technology expectations Joe. the fourth for X.X% of day $XXX.X sequentially million . Total our quarter, in experiencing stable until X.X% and throughout relatively Consultants at year-end slightly than quarter QX usual began a on we day. the fourth billing per assignment assignment year-over-year level declined higher were end.

period clients quarters, While with we mission-critical billing with were relatively growth to pleased confidence day results initiatives our to greater the gain the KPIs conversations to the begin quarter, sequential a X of still certainly increased X-plus over slightly optimistic, that and other appears significant to priority clients our aggressively await built resources initiatives adding environment. over last of continue more last it technology investments, more still that a our up fourth address amounts suggest important has Though the years. but continue the continue to in demand to of stable backlog X

of the continued demand augmentation Clients been staffing superior project the evolved requirements, services positively and from over meet declines efficient year-over-year. the staff beyond for traditional assignments driver include technology our has of their results technology contribute to consulting-oriented capability. The overall continue has access delivery service staffing offering to we Our while our business, to are cost-effective technology technology offering to our to engagements this offering to our leveraging our the consulting-oriented revenue solution seeing years as our see more highly traditional talent prioritize a clients. on demand based skilled

clients' the strategy our strong have cost companies sales and source integrated for our Our to higher important challenges. world-class to effectively crews skilled providing with to on by solutions outside ability that capitalize United highly efforts existing is address efficiently consultants the States. talent increasingly vehicle the we engagements provide force cost-effective utilizing and relationships value An

consistent sales believe our center, bidding our the in a on us facility fully combined vendor puts $XX delivery onshore, operational. the and client technology whether clients, strong Pune, have stable were in when in center our fourth or in were rate that high-quality our and from for The help fact, and industry even in stable a assignments pay again is two U.S. As Joe development skilled now position to quarter slowed. demand network needs on have staffing and mentioned, have overall trends rates engagements traditional highly years. past. Kforce stable both fully opportunities been development than consulting-oriented will bill for of we the more average India, more as bill in precluded business and capability offshore. Overall, of address kept this We compete nearshore on the to with talent evolving This strong

application in digital focused our technology and data practices. cloud Our clients engineering initiatives on remain critical

Our is sourcing change core demand as for for evolve. various our clients at talent sets quality skill and scale competency

the support and front and the increasingly to We to cleanup look that clients of are activities at continue resources expect AI us digital their this rationalization data to investments. to provide end data as

in relatively the we've XX changing stable has data efficiently to our the encouraging technology of be clients. Flex demand evolved given over Bill of been over technology skill demands with set an tepid year-over-year. which have XX.X% business technology past basis our our the in pay points continues spreads As year, business decreased decades, evolved margins environment. point the

combination Flex decline health paid that margins was to usual off declines and decline sequential of to Our time XX drove XX our costs the in care higher over the a in point technology basis seasonal holidays. points due basis a due business

comprised of portfolio client companies. is Our and mostly is diverse large market-leading

sustainable, long-term to continues addressing our above-market be stability XX an we industry critical on industries. drive in experienced our top focus performance. From in Our sequential to needs or ability their X of growth perspective,

for financial experienced services, largest Our vertical, improvement quarter. consecutive third the sequentially

notable as experienced telecom and also and growth well as We transportation. in technology retail

approximated last years. ends appear forward assignment to levels to have the year-end Looking experienced QX, over two

data the based clients years remainder X.X% current down currently technology to conversations with to in seeing consultants in may be improve mid-single with and single, revenues the were for Revenue Our quarter. gradually low our the business, in we on are assignment over we FA which on have of consistent expectations our sequentially. the we improved sequentially Flex basis of a revenues, the is day COVID. what having X% billing is upon digits, to prior

the areas reflective relatively per more and are we bill approximately with pursuing technology synergistic higher is average rate past of Our that our the $XX stable skilled of offering. has year are hour been service over

We basis expect billing business in the FA double decreased low basis sequentially in costs. points primarily sequentially assignment margins greater-than-expected care down by XXX QX year-end FA a be higher following our in day driven revenues health ends. Flex on digits to

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

productive adjustments continue on expectations. when productivity the that accelerates. based it most we upon well to business targeted retaining our focused ensure are We investments prepared to demand We remain levels market to to make associates the in making associate capitalize on in

we reductions, teams, were our delivery a have of we XX% rationalizing ample two while absorb in demand basis. which resources. any invested Even with which improve selectively have these increased on our resources, years slightly should adding quarters We believe sales last several significant the over down have to without it capacity year-over-year

integration We Solutions also Consulting business within in is which continue invest firm, the to offerings the of higher-value progressing and well. our

a the above-market to decade. continue candidates most ability success tremendously clients, our our technology While place environment Chief an has we happen now the longer as have persisted in organization than us. I'll uncertainty in have as the strategic over excited without for have expected, about Kforce's doesn't the Officer. we to remain and Jeff I position business macro delivering in performance that our and well call The Hackman, over consultants turn trust Financial unwavering

Jeffrey Hackman

for costs be The considered to understanding investors financial will not They with additional . In of the on Dave. provided as measures financial prepared results. superior commentary, impact GAAP. as you, or accordance further the items. measures performance aid in certain discuss are included in non-GAAP Thank non-GAAP our certain my substitute should items I a of financial clarifying to

Our non-GAAP press of between the release provides GAAP differences and measures. reconciliation financial

of the and GAAP billion our our expectations. of experienced were Overall in year-over-year reduce matters. outstanding from of guidance per Earnings XX% The $XXX.X in share the negatively with revenues was related decreased a XX% of on XXXX and $X.XX $X.XX, handful and adjustments of revenues care as actions quarter costs quarter, non-GAAP midpoint Earnings claims margins our X% per a Fourth for a which were settlement SG&A. above of and health in at the the impacted EPS basis million costs to of to $X.XX which XXXX fourth legal to approximately structural higher-than-expected declined Flex unexpectedly midpoint non-GAAP XXXX share basis. year-over-year. we associated large on expenses

technology declined to On fourth the gross points due seasonality higher costs, decline, a to in Overall, our and higher sequentially mix. gross margins sequentially as due fourth Notably, significant talent XX spreads to Flex offset XX basis, consulting-oriented holiday in basis work. margins costs more health a care year-over-year basis in strong seasonality XX spread care XX only costs. in our is basis evolution business demand lower higher a drove of basis margins the to improvement which year-over-year skilled the basis care points quarter continued and health declined the to normal in slight increase include health point year-over-year. hire decreased a the were normal This of and XX decreased margins by quarter business for XX% direct Flex highly attributable sequential holiday amount technology points.

expectations. year-over-year forward percentage we decline on stable they'll be revenue to to XX% margins sequentially. our expenses look QX, a of Overall seasonal Flex lower as As tax expect to we a of Due than resets, were basis. SG&A

were in gains of overall and offset health we spend. care in more costs continued While management higher from than our refinements those the headcount fourth leverage quarter, by solid experienced costs

are areas business. managing investments in targeted while down our our capabilities, of to make sales We continuing other

are We advance to enterprise of technology initiatives, objectives of our offering, integration prepare also our us well to including for of the continue which aggressively more contribute all significantly expected when in solutions our and implementation Workday, further invest establishment financial longer-term initiatives. their center our development to India companies and of the

in XXXX meaningful each be net and these and year move significant investment beyond. providing the into we return and XXXX as We them to for expect to growing of final begin a initiatives

of was at Our midpoint our operating margin of expectations. X.X% the

flows $XX approximately and cash million, fourth quarter XX.X%. equity on XX%. Our Operating effective was continues the to return our were exceed in rate tax

in of and representing repurchases. operating were approximately and capital, our dividends million XXXX, cash market flows in $XX million $XX shareholders returned approximately open nearly cash generated XXXX. We EBITDA million Operating flows via for to we in XX% $XX

recently sixth our approved As Directors the dividend, increase which consecutive to quarterly increase. Board annual of Joe mentioned, our represents an

of our on performance by solutions augmented relative focus is We business a U.S., continue to our execute capabilities. and organically well offshore and and technology nearshore staffing our the result driven industry-leading we believe intense our in

carry debt consistent to shareholders. to to our a return be repurchase activity accretive continue continues earnings. We strongly sheet pristine minimal significant This to with and capital balance

XXXX billion in which approximately $X represented growing to cash the nearly returned business profitability have levels. We while since has improving generated, XX% capital significantly our shareholders our of and

capital investing while allow business remain us cash committed economic and solid regardless predictable flows the balance of strong Our sheet our to to in aggressively returning climate.

prospective remains acquisition high. very threshold any Our for

The the billing day first quarter is has less and which XXXX XXXX. of days, quarter XX one the more one than fourth quarter first of than

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

that unusual continuation not does is items consider assumption Our potential the of the or non-recurring a guidance of upon the of based environment and other any impact may stable occur.

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

in we expect we profitability when when his of mentioned timing operating more XXX and the billion benefits we priorities, or we annual $X.X was return revenues, higher revenue generate Joe level. of enhanced our from our prior achieved which that prepared points return leverage to As peak of expected to expect remarks, in on basis XXXX. Based in the would strategic extent to levels

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

Operator

first Mark to [Operator Marcon, Instructions]. go Baird. We'll

Mark Marcon

one little the you continue cleanup Just end improvement clients? starting I'm up of being that AI talk see data can seeing mention and you're extent you the to current can you're in what the what of more it tech bit some Services Financial To area seeing, unfolds? about initiatives. what as then the little in And regards seeing cleanup, in size AI And data you're increase. a year a are is from maybe improvement. that environment a could initiatives would to that that you color. just see perhaps a to as terms sounds if little driver With like you bit that telecom did wondering

David Kelly

Dave. Mark, it's

but a we bit know true So we very, When and data in companies a yes, industries with to because talked even and more, are and is our right? certainly, right. we efforts around lot going AI you're cleanup hearing hearing, with systems in conversation transform all what consulting-based about we this we're well. large through little particular, data lot lot our especially work and about talked and as and a lot There's digital, AI, that we're a very of in rationalization of offering, of there's we our work, data a of

it and So I way, the will to would size topic of forward, it today. an opportunity what couple of right increasing bigger now. over part mean, It bigger a it is Obviously, probably we're become the of time, But move has say, of business the I last it seeing years. majority hard we conversation. certainly from a been, isn't as by

data think more it's as faster. opening so it, about and the things remarks I it, fact about and to in and about AI, we've quickly a right, desire an -- move more his leads think Joe And as mean, I mentioned it I we companies talked opportunity. rationalize to think their that improve

say opportunity So of services right, we industry for is the XX grew mention, industries necessarily real us. specific. well. wouldn't consecutive think our for financial X business quarter I And I'd a this it's as third that

say. would I based, broadly pretty it's So

Mark Marcon

-- and mean, conversations there's wondering aside some on you to occasions. lot and have I they that clients, mean, the talking a see projects would towards confidence are uncertainty intraday trigger on they to they meaningful having actually I'm to need how move pull see are addressing seems your with to like how to But cleanup, of obviously, the from of pent-up are data order change what have? these policy that clients some about And policy just I the in based the a

Joseph Liberatore

by been Joe. I throughout would of talking Mark, visits as that people as conversations in are course of great the it's here client And the client would with question. up the beginning with our are with year. I've here January the that our clients, and well I in which, the way, a significantly It's say our mention, meeting involved

So saying itself of translated our also this our point. I orders job think clients it's taking more I something seen into manifest that in at outcomes up. are any that of that's our But we mean haven't meetings. being

of an be think which any feel budgets, But is in sentiment or really, that I positive, additional XXXX, ripple see of impacted, doesn't backlog, don't clients at one we about I upon general no has unknown. based their more we'll have to client there on through policies those happen, much has We're just mean industries because get whether looking how which a say, thing. enter could really some the be happens how it's us of more nature. would trying been these resulted as impacted after It's some I the they'd hearing meetings.

base. is it's diverse So around would fluid. The say thing having for over I XX been client a years, Kforce very have we very one that

pivot. we're a all customer industries, base very going across have We to diverse

our change the so and feel terms growth disruption staffing specifically looking for, very the stability. things But of what for friend and in looking they're and One we comfortable. with of it, predictability of some professional they're solutions,

that think I up wrapped in sentiment. is the so And

for and the starting we'd I spend open nature, consumer to that things some think with things they're up. start of to think of now look I pull-through

Mark Marcon

element a up? Pune? second the that are of are ramps talk your sort Can -- there about being done getting? can you and about a from this of How there's varying say, it thoughts big your bit work little initiative year you just that over, with also be any obviously, What regards response issues to as plans year? you client in you in half as thinking What are perspective? policy how to overseas? with think about regards next And So immigration are

David Kelly

Yes.

few a questions there's there. So in

a network. meet have at had our We, know, being seen models a their We I'll relates If States policies business hadn't very what the Frankly, that high-quality providing more outside one I meet we're -- that, over of with thrilled remarks, service. the bid to as the capacity stand cost actually our up, So couple development desire United client obviously, all, as some needs. employees a cases years it from to the us a here, be of But in driver that to by a I vendor was require is from look couldn't I'd clients in some business right? remember excited doing try clients But to the the consulting-oriented the desire that right? them, other that, last mentioned able especially precluded moved this them because historically we, quickly manner the to that we have So very are for be work them. So are for obviously prepared very there the miss and team than was in repeat to driver as driver? on to us Mark, center, that able in their you to did. us needs through blended to

having we're our want. this and So what really based the desire they of clients upon done

significant it's place So than arbitrage lot are market. huge where in cost India is right? all on any there. is technology call, the professionals that, a year-to-year generated opportunity? of last There basis, other this Clearly, in there's still world a mentioned more think know opportunity on the and being the a a I've We I There demand.

got attractive an at workers price. skilled So you've highly

So going necessarily that away. see I don't

It this upon requirements solely are. a this if based what huge of our of We've built client right? lot capital, a We amount in but manner, are be to flexible very we've commitment grow of very, able be. to a building made need flexibility will a not quickly very be

to is needs to and say not meet those able no. objective to Our have be here

going want, types got marketplace be very size our is the be and to be prepared it can thousands. clients for want we'll us then very, able You've what to respect to grow to in but it, reflected by any hundreds what meet we're our Frankly, then initiatives in tens right? examples of So what clients quickly, those as where hard these needs.

Joseph Liberatore

I great Mark, business this we onshore, market. after. are I we're a add, coming And and Yes, nearshore, teams, would shutdown what by the mean really after is a to and these the really is going out blended of niche that really, offshore of started that's niche evolve seeing we're more of combination

not So with offshoring we're the looking They to at have providers. global wholesale just compete scales. the

the not space that's going we're So after.

this to our we're need to with us So blended fit more teams. that bringing of customers these are really

also how scale on we those to So dynamics. impact going that's

David Kelly

think I had some have the immigration. of Mark, So related around administration question to may was the the you immigration, second from -- discussions

in We've obviously scarce carefully paying our from be business. than we're impact such administration, very reform as those how listening that we to to suggests our least comments quite skilled highly from employ been impacted. really immigration appear very and really pro-business workers, to a obviously, may So it's likely . us recent will at less perspective, be attention the

mentioned significant a skilled business, this with at deal average we $XX a right? Jeff in got I mentioned, individuals. point, we've disruption bill expect -- rate. So higher don't We that our

in sponsor from transition who -- something is clients. people so actually We don't know, not So don't many as those country. Immigration, any visas for bring we coming we we you've from are directly, that over got do new directly other people. visas you experienced

most So again, again, stance, I thing. is us, for pro-business the important the think,

example, the at virtually impact Trump look the you nothing. back population administration, If on fueled was H-XB, highly for first the

from think don't is great our I this perspective, concern. is a that So something

a Trump quite in I the in the Actually, is degree frankly, terms higher, a an statistics. have administration there think, compliance of regulations, of of There I us terms advantage our administration, and we at right? potentially of Biden first in advantage requirements the administration, think, here versus least bit competitive compliance a for from

be based we've actually, So to based of going optimistic could heard and us. what here upon and structure potentially I'm be and say, this years the for positive our experience, upon a

Mark Marcon

one, one jump I'll and then last then the And into queue.

Jeff, achieving XXX points X.X%? leverage more -- in in roughly your up very you or is XXXX of which when over to expecting points enhanced on operating $X.X billion, basis what was sentence the Just you basis terms of that last get ended XXX

Jeffrey Hackman

way about Mark, that it. operating margins correctly. about thinking read double the the at That's digits billion, we're know the to you activities we've certainly you would the that talked that I we that $X.X contributors tell I length at on offering then as Dave management strategy priorities internally team, efforts driving to implementation and a integrated different, no are are related Workday, joe those the certainly touched solutions of our course, the strategic the with of IDC, our and Mark.

in given year looked like at path that double the that $X.X XXXX what So to billion to we here billion sense, in a give we $X.X finished digits. wanted

the you're but thinking way, it about -- right So Mark.

Mark Marcon

Terrific. Thank you.

Operator

question The is William Blair. from Romeo, Trevor next

Trevor Romeo

First one, overall of the maybe slightly take sort different a question. on just demand environment

CEO increases of all months I if confidence remarks, But long based mean confidence there the just you. to past historical prepared kind are point taken for could whether in in was but cycles. seen? the in on it's new what policy uncertainties into about there's of bunch few a a those we'll there, have how and way to past different, experience you translate sustained some project the think to out spend it's R&D through cycles your you've is some and seen increase kind of the your surveys we've still think increase I of see business But to point kind or I if confidence wondering itself. of that what

Joseph Liberatore

would the talk that dot-com cycles if I going I've back, to forward. Yes. back been to really, involved Trevor, with the I say, we'll go

you thing, to to The been waiting that the last right, first see of we've couple shift for and have this for is see you have sentiment years.

associated optimistic with in bit am have cycles because a transpires. that. all take I that, I place So that we've say nothing that different timing terms been would seen little without of else shift

in Here been day, Luther been had the interesting of the years in in Martin we one and industry just holidays Carter Januaries has almost I've had how Jimmy XX January, this some then King. we this of probably with most fell

had a CVs indicator. irrespective we've and between this Year's years New saw dynamics. seen are year we've activity another well, So Christmas lot of And than also, of those up noise. orders again, more several and as the positive our even we And last job

staff manifest So project type work would that. our QX move than start we to itself. the to be, bit start And hope we start then we would longer move a work QX, through into augmentation of to some the as takes little and see

us So into pushing of that would back end the into QX. QX start

So then thing us the my optimism remember, manifests start bringing calls, say. early see towards comments temp prior they start itself, it's gives How to in year. half then back first work it gain bit we And staff. little that, when was following always And tough contract confidence. organizations rebuild is on their of as they some second to before that said I've the to why a the

positive in to that making sentiment. that conversions also beginning which hold necessity capital for seeing. terms also on a they're again, retain workload the to they I see to So into intellectual clients which were had optimism some the that the people coming good those decisions gives that, me some of year, The of those of we a did take number as of the and

you little gives bit a maybe that flavor. more just So

David Kelly

Yes.

marketplace part continued So and -- demand, thing a I in point, So just Trevor, add we has on to Joe's be if distinction this right? continued some right? the this of be think would robust strong. That to client relatively make to of has this business consulting-oriented I that work, the only

got has addition in quite demand portion the of you've strong got how a piece staff business of of So bit augmentation business our still play a that to out. the may

Trevor Romeo

you Thank some it's know I to points. data say, are helpful both, but hard those

maybe And thanks. on another one then So my for follow-up, Joe.

maybe what well just Do way you few into share you do year, think quantify forward? competitors decreased being the landscape. of you terms market mentioned on years? you the of that of continue gives positioned take in few past think how think taken share your have over then share to number I you market has Any and take just much can you And competitive overall competitors years over to can increased going the this going the subject. confidence your additional past kind

Joseph Liberatore

competitor I say of would competitors any disruptions major a standpoint, haven't heard there. from really we Yes,

if you at competitive those I So in think top start think or to the pretty space, the landscapers look I consistent. remain XXX XXX providers

instances, one we that and/or receivable As regional bad from have through local out times, of not away going a well They're, we might in entities any business. of that client go capitalized, portfolio. a lot many are see tougher

that landscape But there's is couldn't narrowed. you So I that no that on front. question how much? really tell

usually that think In and we're comes with I SIA out terms looking what of at, information.

look from that whatever historically the same out market performed we we performance. go what have So at is course what look by, the And relative we is would And dynamic that? the years, market they're standpoint, SIA. to if on market we I the type at we we really perform SIA back of share growing and that Xx over is how XX-plus last saying anticipate do think of coming

Operator

Next up, we'll from Research. hear Northcoast Kartik Mehta,

Kartik Mehta

around you've be Obviously, more was or case things enough in at maintain could maybe or much just capacity. just capacity I adding what added to revenue that running you're about how or you're there Is any at, without people? wondering measure where capacity capacity way want taken turn running out. you to

David Kelly

how associate the I mentioned business activity and about dynamics and have because changed. to marketplace the Kartik, levels last this, additional would couple about in population I'd So right? right, Yes, the generate years, find have to we've actually needed added we've the of to salespeople increase. so intentional our this business Dave. is that we've -- very say thought been over

So if change. because a it's I particular look at capacity equation, the marketplace the dynamics of hard

that, down. to recruiters I've associate addition that In in population our is count the actually mentioned

I said remarks down in the think XX% I've made. I that

our we our been I add headcount. salespeople comment we're that maintain caught we've to that business we so to And made and recruiting associates. expectation short. productivity have not capacity for based got we've about months would, enough time measure necessary, where upon few So if intentional that a of because this like a always of we an

with very So comfortable we feel that.

those is to more necessary, model. extent are would the and recruiting are resources I that are comment resources Another in very things our ramp ramped that make quickly quickly

right? performance this metrics, performance. we're We the expectations that very So of people by years we that manage So well expectations by of we expectations positioned, by built. feel comfortable of business the add through many we've

So be won't short we here. we that feel comfortable very caught

proven we cycle. things going if improve, caught -- I'm optimistic to not will cycle think short. be say after We've be and that when You

needs our manage and -- that to you comfortably we'll So I can don't efficiently, be they're necessary. we'll able the meet of whenever think clients I rest this

Kartik Mehta

Just one last question.

come line India, have to an a you your facility leverage things Your maybe to you the that back? And than chance operating income? SG&A opportunity is leverage have leverage initially in to thought more if there to maybe

David Kelly

Yes.

just So I'll repeat briefly. what said I before

flexible. we've think I very to built this be

client shift revenue very to So be as shift, opportunities to dynamics it the we'll and comfortably. the able

we make Our originally meet about to and all want open we've will things I can new that the that back arbitrage it, can sure that's a profitability operate So now, about don't needs. we're the being us meet is those how right? built We're do is why and it. something focus you, the we we needs. it it. translate right operationalizing not of and able currently That's on to as of tell that grow. arbitrage be clients' clients' house we're It's is not into things because thoughtful well, one cost as business in That's opened we our lost wage very up thinking to how our

be that external about those We're initial certainly, meeting the to seeing. thinking about we're needs going on of focus client that. all our yes, are we thoughtful things. is So But

Operator

question The next Tobey from Truist is Securities. Sommer,

Tobey Sommer

you basis a drivers. Are revenues. improvement of of several on largest that? XXX bit the to those, sort driving there that priorities the margin little if big think the you peak point get give strategic Could color back operating you pieces us Of more you get prior could

Jeffrey Hackman

Yes. Tobey, this is Jeff. Good to chat with you.

driver and talked I us make population. associate think scale engine We've and the productivity course, other gets to driving of throttle to management investments be standpoint everything capacity more internally. of going from that about a Tobey, necessary or about delivery the We're and internal back we're continuing it productivity one $X.X of any efficient. our that the make continue program. to we've AI got talked tools transformation Dave sales much billion and the capacity to that the to our more significant just back-office

couple now. years been As a this we've at of know, you all for

into We that are well project.

quantified of benefits compared investment at today. making to points we XX of there roughly the we've think sit certainly, I here anticipated basis that we're level the And billion. $X.X

that $X.X some that We into be subsequent to of with will and the through phases billion realize benefits and beginning initiative by the program. likely associated

contributor That So XXX a from to a mix margin. today offering carries meaningful a basis here we that's with offering sit Obviously, points of it. solutions standpoint. higher

mentioned as continue be profitability meaningful Of that to well. to course, a the be us, given technology forward we there, mix Dave us. contributor story contributor for to differential a expect the that And seeing to as overall that margin positive we're that for to move expect improve

significant are, of those that. So think, I the contributors to more some

Tobey Sommer

couple us And I vertical comments wondering was and could the there. services are a if about then saying customers what offer financial more you

quarters for bit level it might now you we've are that and why are hearing X a far take further? little I of You what cited to they activity think, improvement as But as even active what had, improve them there. from of more

David Kelly

I touched There's of done. would United reasonable financial think of work, I spectrum major obviously, I there are with infrastructure having The we're because, in Tobey, always an they've right? business obviously, industry to application that But a a draw what I've market-leading work do than invest things. don't work a seen, on no is their the we generalities already it's companies to digital are careful continue what in know work. across right, be although And successes we're different, there's institution, every think, that lot work data doing -- we Yes. development of size, technology large with doing? on not States. traditionally They're we've projects. the that they

always driving a that So there been that for revenue speaking, a I other area these services broad don't seeing we're provided generally focus spectrum that's to those customers. know of that of than has specific things we've

Tobey Sommer

If I'll to with with industry of What's extent one the I demand other focused queue. in IT the the firm's businesses could systems and you have question, get entirely back sort ask integrators experience those? from relationships more consulting

David Kelly

we've portfolio mentioned do the diversified less with got than We are very business. that Yes. business do, our of a Tobey. mean, integrators and we XX% I I

of the clients way. at are that in would the no you, I are don't their government, different providing doing But government, of are business different are And if and the the are type think not projects with I'd industry. I by the than they than hearing. mentioned remind for we There say that what say, projects so about, talking across we're any the we type would the disintermediation on the doing we of right? would By I work significant example, prime way, for of risk areas that first for say they're do are we're business, The industries. what work space, they doing any doing, based do we're we at government the in type for, no that projects least I -- would that would

nice about skill services as do. transportation needs a do, skill sets that all industries for of type retail customers' set including did the -- as industries I we as clients have clients, fact Joe meet job clients integrators meet think all the same financial and most the think talking across if I -- these needs

Operator

UBS. Josh We'll take question the next from from Chan

Joshua Chan

heard stable. guess up. little here? of to get that you job a just orders would saying of more optimistic? But you are hesitancy look maybe demand maybe relatively Joe also you typically could indicators visits, client like are bit kind sounds guys so, say, the then at is a I'm reconcile picking up are these if It I the And -- I

Joseph Liberatore

indicators front-end that look Those Yes. at. are the we

So placements project you accelerated before the have indicators to the to or move in you pull-through get outcomes wins. start see those and actual

higher last at indicators coming than year. we experienced are of seeing more front-end the the stating So several of are was these we've levels the beginning in years is all I simply into

augmentation business that meetings, which but stability would into funding more which means are clients and because, has I sentiment accelerated realizing and more business. that is couple have one in about obviously, has been taking translated the not a into staff more playing this after budgets our at positive You nature, that they're project that has things to wins, not with of rate and to believe a project getting than thinking as time, point receptive growing mentioned, that our at piece that faster is -- placements backlog

time timing. tell of happens, ultimately only that. will one pull-through is this that on Whether So

half second which economists, those the of a were XXXX. recovery, beginning the lot in you standpoint, if out And been I we And mentioning believe from Or itself look optimism the that is for, of we're of of never models analysts, out in see did years, all talking an these manifested recall, pulling see looking the we both in things things -- years. year these a them playing beginning in did lot for are we about those so of and XXXX. a have not of either of

these we seen we in are years. so things that the last seeing have several And not

growth, that only translates on revenue into putting there. billable that's whether will an which time it And out out, into that. ultimately we're So translate tell acceleration all of consultants would

David Kelly

Yes.

this into so So -- not what I I as mentioned activity in about had seen, at significant new said, the we right, Joe right? year look only we that starts. optimism add, translate and year, seen end have historically would thing as We increased uptick then were the some right, at a yet we had

that are because transpire at still quarter here here we -- first some that happened get we're expectation to what and our ahead to there similarly uncertainty ourselves looking the given of XXXX. in least for is want So things in don't XXXX to

Joshua Chan

the numbers any better there about hire quarter. market direct tech bottoming? is is whether guess, a bit thought I this one. quick a little Maybe seem just The

Joseph Liberatore

Yes.

I think number. see did is conversions, direct our up hire conversions made which -- bit little the those statement part conversions, some of reflected earlier. We of show in I more a those that in

a say on full-time overall So from I bring to sentiment, would organizations have tech standpoint. hires continued

We haven't seen acceleration. an

as really would categorize We seen a it haven't deceleration. I stability.

business provided been that. this albeit has years, we've tying we a one through of reflect bit I the that the in really is interesting, a been there recessionary as an lot kind different to not upon at it's which drive discussion, the been have accelerated about kind climate this services multiple recessions, we things in earlier to couple of been environment little having GDP that's subdued been the where of point. the So in where last operating are back And . And our cycles of for always a has pace. it need of a through interesting, operating asked reasonable has GDP. been we're like And catalysts

of are we been generated growth I se areas have at GDP supporting is where areas per big our catalysts terms GDP are from business. to look of that really it being have not is to think in this part that the

the which subdued, services provide. is very to very the has we been that market friendly Also, M&A also

conversations sure think M&A business. and hear we happier a mean also that make So would to more Nothing to in play if I'm I as hopefully, because us rates, about see well than continue I'm little engaged bit hearing bit that more our activity, would do. I activity. break little you this I a see dam to

Operator

to Marc go We'll next Riddick, Sidoti.

Marc Riddick

usage. little a touch bit to I wanted So cash on

comfort not the we at little in looking to guys, I know of around was wondering the what increase are levels out far thoughts some but there's not especially activity, nice the lot as some little in on the there sort if as fragmented a sort you I levels what's bit clearly thoughts things sense whether of One just you are things but share as is certainly out maybe of had see. just to as repurchase M&A dividend, on where is to industry, also of that -- or your more wanted looking general historically about very thoughts which or of sort make attractive from so I a of on touch might attractive at -- there's that maybe anything or in there talk a a currently?

Jeffrey Hackman

And you. with Marc, talk Yes. good to

-- second address maybe question first. I I'll a think from your

repurchase think full in I saw a share fourth activity, buyback you quarter the long-standing for a from us continuing the year. share

$X of were You XXXX, and this back, at and the remarks, about the capital what mentioned you remind repurchases. capital, of And of returned dividends in in generated. think I we we've I prepared I at when about return XX% think, that look you I'll through operating total excess billion cash. XXXX, share look since business my of we returned in

into should of As the XXXX, expect we more you move same.

earnings that filter a ear talk our been say We the earlier days years through market per opportunities, we a potential company really did an do over Kforce, we that and on very the buying share we've continues Kforce always to bearing perspective, accretion us of that's M&A standpoint. Back oftentimes of keep From investment the et to We But to itself. within ground our from the Kforce has good XX lot an and fruit for cetera. be been very, tight. acquisitions. in last

X rarely historical I plus X, has think that number equals taught is us of X oftentimes less. a our experience

continue we XXXX, to to our you done So annually years. Marc, shareholders haven't over know, XX acquisition an evaluate we've return to we as organic as an continue we'll well dividend. into And had capital model, the look

and as mentioned, forward, we for increase continue year, Marc. we approved, more Directors look that. consecutive an of Our the to as sixth Board same go But at of we'll the

Marc Riddick

through you reminder you that now, that sort been kind And in the I I maybe own of here you which are? that a guys little experienced you some the it's you the one you on of of was because sort in of California, Tampa to guys have the of and where bit get quarter well. disruptions at fourth want and to area the a beginning but know of that fairly that but at things folks sort I navigated had very seem of to other your of just any there's touch of bit beginning mentioned right touch navigated quarter, to that little the if know disasters remind of very Maybe the the things on, a challenges

Jeffrey Hackman

No. Marc, of tail I the towards the the fourth we think that with you're dealt third speaking the to end hurricanes and into X quarter.

during our people internal may Out in support our our all with be of we stay that and efforts of from people, and just the consultants support of do, the our that in super remarkable and clients there. just as tune always impacted. any proud Aside clients internal California

us, the there's California, us, nothing speak for disruption devastation Fortunate first there within of impacted business obviously, there A out us quarter the but has about. out to not from a perspective. business lot travesty, in for

Joseph Liberatore

say pieces though. which on impacted given that, Yes, and per in standpoint. North two impact revenue business a out there's Really even West that fires to of the were I'd There's the Carolina se concentration no the business the by Coast. Florida, revenue our impacts, Marc, that from

that commend own of hurricanes dealing while caused, fortitude our I the priorities, progress disruption be able would our Florida-based didn't homes, I hitting forward, rather various other accomplish us it for as the people moving back their with initiatives setting on just with However, and those timelines, their work transformation firm their that forward with with move our amazing commitments those situations, continuing efforts. personal mention our people dealing being a and I remiss and family is their if on not all situations, amount of keeping what and with to of that strategic strategic and all to deliverables were back-office

to wanted get out just there. least that at I So

Operator

to And I'd or back Liberatore everyone, the like questions. Joe to for remarks. at this additional time, conference there any are closing no further Mr. hand

Joseph Liberatore

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

Operator

participation. your does that today. We for like conference conclude for thank to all everyone, our would you And

You disconnect. may now

Kforce (KFRC) 3 Feb 252024 Q4 Earnings call transcript