Kforce’s Q3 earnings

(Oct 29.): Kforce’s Q3 revenue exceeded mid point expectation and EPS exceeded top end of guidance. Revenue of $353.3M and EPS of $0.75. Revenue is down 0.8% sequentially and 5.3% year-over-year.

Technology segment in Q3 further display the stability compared to 2023. Kforce mentioned how they’re clients are likely to be cautious with their spending in the near term. They said this creates a strong backlog for Kforce’s services.

Developments of office building in India set to be completed in January 2025. They believe that AI isn’t going to replace their services but increase the demand for their services. Kforce moving to higher skill job recruitment protects them from the susceptibility of replacement by AI. This can be seen by their increase in billing rate for their Finance & Accounting segment.

Tech bill rates have been stable for 8 quarters at around $90/hour. Gross profit margin increased to 27.9%, an increase of 10 bps sequentially and an increase of 20 bps year-over-year. They expect Q4’s margins to be lower due to shorter billing dates and seasonality of the business. ROE for the quarter is 33%. Trailing-twelve-months ROIC is 25.28% signifying strength in capital allocation.

Capital returned to shareholders in form of dividends and repurchases for the quarter totaled $17.1M. Dividends for Q4 set to be paid on 20th of December for shareholders of record as of business close 6th December.