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What changed in KELLY SERVICES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of KELLY SERVICES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+290 added−298 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-13)

Top changes in KELLY SERVICES INC's 2025 10-K

290 paragraphs added · 298 removed · 205 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThese partnerships aim to positively impact how companies hire, advance and help more people thrive. 6 For more information about our corporate strategy of connecting people to meaningful work while contributing to a better society, please see our Corporate Sustainability and ESG Report - Growing with Purpose , which is available at www.kellyservices.com.
Biggest changeFor more information about our corporate strategy to connect people to meaningful work while contributing to a better society, please see our Corporate Sustainability Report - Growing with Purpose , which is available in the “About Kelly” section of our website, www.kellyservices.com. Talent In addition to our internal employees, Kelly recruits talent on behalf of our customers globally.
As a service business, we are not materially impacted by federal, state or local laws that regulate the discharge of materials into the environment. 5 Human Capital We are a talent solutions company and our employees are critical to our success. We must attract and retain experienced internal employees, as well as talent we put to work for our customers.
As a service business, we are not materially impacted by federal, state or local laws that regulate the discharge of materials into the environment. Human Capital We are a talent solutions company and our employees are critical to our success. We must attract and retain experienced internal employees, as well as talent we put to work for our customers.
Access to Company Information We electronically file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports with the Securities and Exchange Commission ("SEC"). The SEC maintains an Internet website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.
Access to Company Information We electronically file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports with the Securities and Exchange Commission (“SEC”). The SEC maintains an Internet website at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.
In the United States, we compete with other firms that operate nationally and offer a breadth of service similar to ours, and with thousands of smaller regional or specialized companies that compete to varying degrees. Outside the United States, we face similar competition. In 2024, our largest competitors were Randstad, Adecco Group, ManpowerGroup Inc. and Allegis Group.
In the United States, we compete with other firms that operate nationally and offer a breadth of service similar to ours and with thousands of smaller regional or specialized companies that compete to varying degrees. Outside the United States, we face similar competition. In 2025, our largest competitors were Randstad, Adecco Group, ManpowerGroup Inc. and Allegis Group.
Over the next 78 years, as work evolved, Kelly continued to equip people with the skills to master new technologies as they emerged and the opportunity to put them to work in ways that enriched their lives. As the world of work has evolved, so have our offerings to reflect the changing needs of employers and talent.
Over the next 79 years, as work evolved, Kelly continued to equip people with the skills to master new technologies as they emerged and the opportunity to put them to work in ways that enriched their lives. As the world of work has evolved, so have our offerings to reflect the changing needs of employers and talent.
These reports are available as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Our website address is: www.kellyservices.com . The information contained on our website, or on other websites linked to our website, is not part of this report. 7
These reports are available as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. Our website address is: www.kellyservices.com . The information contained on our website, or on other websites linked to our website, is not part of this report. 8
In 2024, Kelly completed the sale of its European staffing operations within the Company’s International business unit, further sharpening its focus on specialty outcome-based and staffing services in North America, while maintaining global recruitment process outsourcing ("RPO") and MSP capabilities.
In 2024, Kelly completed the sale of its European staffing operations within the Company’s International business unit, further sharpening its focus on specialty outcome-based and staffing services in North America, while maintaining global recruitment process outsourcing (“RPO”) and MSP capabilities.
When 4 we operate as a managed service provider, our payment terms to suppliers are generally in line with payment terms from customers, which does not result in a significant use of working capital.
When we operate as a managed service provider, our payment terms to suppliers are generally in line with payment terms from 5 customers, which does not result in a significant use of working capital.
Customers use our services to supplement their existing workforce and generally hire permanent employees when long-term demand is expected to increase. In addition, we generate a portion of our revenue through permanent placement fees, which typically have a higher gross margin than our staffing services.
Customers use our services to supplement their existing workforce and generally hire permanent employees when long-term demand is expected to increase. In addition, we generate approximately 1% of our revenue through permanent placement fees, which typically have a higher gross margin than our staffing services.
We believe that delivering on these objectives will result in successful outcomes for customers and talent, and drive profitable growth for Kelly. 3 Description of Business Segments and Services Kelly is a global specialty talent solutions company operating in four specialized business units, which are also our reportable segments.
We believe that delivering on these objectives will result in successful outcomes for customers and talent and drive profitable growth for Kelly. 4 Description of Business Segments and Services Kelly is a global specialty talent solutions company operating in three specialized business units, which are also our reportable segments.
In 1996, Kelly established the industry’s first Managed Service Provider ("MSP") program. Three years later, the Company launched specialized offerings in engineering, IT and education. After successfully establishing industry-leading positions in each of these attractive markets, Kelly initiated a strategic plan to drive greater value creation by refocusing its portfolio on specialties.
In 1996, Kelly established the industry’s first Managed Service Provider (“MSP”) program. Three years later, the Company launched specialized offerings in engineering, information technology and education. After successfully establishing industry-leading positions in each of these attractive markets, Kelly initiated a strategic plan to drive greater value creation by refocusing its portfolio on specialties.
Government Contracts Although we conduct business under various federal, state and local government contracts, no one contract represents more than three percent of total company revenue in 2024. Competition The worldwide workforce solutions industry is competitive and highly fragmented.
Government Contracts Although we conduct business under various federal, state and local government contracts, no one contract represents more than two percent of total company revenue in 2025. Competition The worldwide workforce solutions industry is competitive and highly fragmented.
Business Operations Geographic Breadth of Services Headquartered in the United States, Kelly provides workforce solutions to a diverse group of local, regional and global clients in the Americas, Europe and the Asia-Pacific region across a variety of industries. In 2024, together with our supplier partners, we placed more than 400,000 workers with a variety of customers around the globe.
Business Operations Geographic Breadth of Services Headquartered in the United States, Kelly provides workforce solutions to a diverse group of local, regional and global clients in the Americas, Europe and the Asia-Pacific region across a variety of industries. In 2025, together with our supplier partners, we placed approximately 375,000 workers with a variety of customers around the globe.
In 2023, an estimated 55% of total company revenue was attributed to our largest 100 customers and 27% was attributed to our largest 10 customers. Our largest single customer accounted for approximately six percent of total revenue in 2023.
In 2025, an estimated 55% of total company revenue was attributed to our largest 100 customers and 24% was attributed to our largest 10 customers. Our largest single customer accounted for approximately six percent of total revenue in 2025.
It includes the MRP, Softworld, NextGen, and GTA brands, as well as our statementworX offering. • Education – delivers high quality education and therapy services talent through temporary staffing, permanent placement and executive search services to Pre-K-12 school districts and education organizations across the U.S.
It includes the MRP, Softworld, NextGen and GTA brands, as well as our statementworX offering. • Education – delivers high quality education and therapy services talent through temporary staffing, permanent placement and executive search services to Pre-K-12 school districts and education organizations across the U.S. It includes the CTC, PTS, Greenwood/Asher and Teachers On Call brands.
Based on the nature of our business, accounts receivable is our most significant asset with days sales outstanding ("DSO") of 59 days as of December 29, 2024. Since receipts from customers lag payroll payments to temporary employees, working capital requirements increase and operating cash flows may decrease substantially in periods of growth.
Based on the nature of our business, accounts receivable is our most significant asset with days sales outstanding (“DSO”) of 61 days as of December 28, 2025. Since receipts from customers lag payroll payments to temporary employees, working capital requirements increase and operating cash flows may decrease substantially in periods of growth.
To provide the breadth of service required, clients may need us to manage staffing suppliers and independent workers on their behalf. Kelly seeks to address this requirement for our clients, enabling us to deliver talent wherever and whenever they need it around the world. Corporate Sustainability Kelly is committed to the highest standards of corporate citizenship.
To provide the breadth of service required, clients may need us to manage staffing suppliers and independent workers on their behalf. Kelly seeks to address this requirement for our clients, enabling us to deliver talent wherever and whenever they need it around the world.
We invest in technology and process improvements to implement required changes while minimizing the impact on our operating efficiency and effectiveness. Regulatory cost increases are passed through to our clients to the fullest extent possible.
We continuously monitor legislation and regulatory changes for their potential effect on our business. We invest in technology and process improvements to implement required changes while minimizing the impact on our operating efficiency and effectiveness. Regulatory cost increases are passed through to our clients to the fullest extent possible.
Internal Employees As of December 29, 2024, we employed approximately 4,200 staff members in the United States and an additional 1,370 in our international locations. Kelly retention rates for high performing and high potential employees align with our comparable benchmark. Compensation and Benefits. Kelly is committed to providing competitive, fair and fiscally responsible total rewards programs to our employees.
Internal Employees As of December 28, 2025, we employed approximately 3,600 full-time staff members in the United States and an additional 1,300 in our international locations. Kelly retention rates for high performing and high potential employees align with our comparable benchmark. Compensation and Benefits. Kelly is committed to providing competitive, fair and fiscally responsible total rewards programs to our employees.
More information about our corporate sustainability initiatives is available in our C orporate Sustainability and ESG Report - Growing with Purpose report on www.kellyservices.com Regulation Our services are subject to a variety of complex federal and state laws and regulations in the countries where we operate. We continuously monitor legislation and regulatory changes for their potential effect on our business.
More information about our corporate sustainability initiatives is available in our C orporate Sustainability Report - Growing with Purpose report in the “About Kelly” section of our website www.kellyservices.com. 6 Regulation Our services are subject to a variety of complex federal and state laws and regulations in the countries where we operate.
Its offerings include our KellyConnect and Skilled Professional Solutions offerings. • Science, Engineering & Technology – provides highly specialized skills to a variety of industries through temporary staffing, outcome-based, and permanent placement services. SET is focused on science and clinical research, engineering, technology, and telecommunications specialties predominantly in North America.
RPO includes our RocketPower and Sevenstep brands as well as our proprietary technology platform, Kelly Helix. • Science, Engineering & Technology – provides highly specialized skills to a variety of industries through temporary staffing, outcome-based and permanent placement services. SET is focused on science and clinical research, engineering, technology and telecommunications specialties predominantly in North America.
By monetizing non-core assets and redeploying available capital, Kelly completed several strategic acquisitions over the years, including Teachers On Call; Global Technology Associates ("GTA"); NextGen; Greenwood/Asher & Associates; Softworld; RocketPower; Pediatric Therapeutic Services ("PTS"); Motion Recruitment Partners ("MRP"); and Children’s Therapy Center ("CTC").
By monetizing non-core assets (Persol Holdings Co., Ltd. in 2022 and EMEA staffing operations in 2024, among other transactions) and redeploying available capital, Kelly completed several strategic acquisitions over the years, including Teachers On Call; Global Technology Associates (“GTA”); NextGen; Greenwood/Asher & Associates; Softworld; RocketPower; Pediatric Therapeutic Services (“PTS”); Motion Recruitment Partners (“MRP”); and Children’s Therapy Center (“CTC”).
This structure enables us to serve the specialized needs of both talent and customers while building deep industry expertise and connections. • Professional & Industrial – delivers temporary staffing, outcome-based and permanent placement services. P&I is focused on industrial, contact center, and office and clerical specialties in North America.
This structure enables the Company to serve the specialized needs of both talent and customers while building deep industry expertise and connections. • Enterprise Talent Management – delivers temporary staffing, outcome-based and permanent placement services focused on light industrial, contact center and office and clerical specialties in North America across a variety of industries and includes products such as Business Process Outsourcing, KellyConnect and Skilled Professional Solutions offerings.
Sustainability is at the core of our relationships with our global workforce, suppliers, customers, and other stakeholders. Our programs and initiatives are dedicated to enhancing the well-being of our employees, their families and the communities they call home. By focusing on social investment and nurturing shared values, we support sustainable development for the future rather than providing isolated aid.
Sustainability is at the heart of our relationships with our global workforce, suppliers, customers, and other stakeholders. Our programs and initiatives are dedicated to enhancing the well-being of our employees, 7 their families, and the communities they call home. Through strategic investments and a focus on shared values, we strive to drive lasting positive change while fostering sustainable development.
In 2020, Kelly launched a new operating model comprising five specialty business units: Kelly Professional & Industrial ("P&I"); Kelly Science, Engineering & Technology ("SET"); Kelly Education; KellyOCG ("Outsourcing & Consulting" or "OCG"); and Kelly International.
In 2020, Kelly launched a new operating model comprising five specialty business units: Kelly Professional & Industrial (“P&I”); Kelly Science, Engineering & Technology (“SET”); Kelly Education; KellyOCG (“Outsourcing & Consulting” or “OCG”); and Kelly International. To enhance specialization in higher margin, higher growth specialties, Kelly also pursued an aggressive approach to driving inorganic growth in SET, Education and OCG.
Today, Kelly remains one of the largest providers of temporary and permanent staffing services, outcome-based solutions, RPO, MSP, and payroll process outsourcing ("PPO"). The Company delivers these differentiated offerings through four specialty business units, each a leader in the respective markets on which they are focused: Kelly Education; Kelly Professional & Industrial; Kelly Science, Engineering & Technology; and KellyOCG.
The Company delivers these differentiated offerings through three specialty business units, each a leader in the respective markets on which they are focused: Kelly Education; Kelly Science, Engineering & Technology; and Kelly Enterprise Talent Management.
Through our Equity@Work efforts, we are demonstrating our commitment to ensuring access to meaningful work and growth by creating alliances with like-minded companies, policy groups, and institutions.
Through our Equity@Work initiatives and partnerships with like-minded organizations, policy groups, and institutions, we demonstrate our commitment to expanding access to meaningful work and personal growth for all. These collaborations aim to positively influence how companies hire, advance, and help people thrive.
It includes the CTC, PTS, Greenwood/Asher, and Teachers On Call brands. • Outsourcing & Consulting Group – provides global talent supply chain and workforce solutions, including MSP, RPO, and PPO solutions to customers on a global basis. It includes our RocketPower brand as well as our proprietary technology platform, Kelly Helix.
ETM also provides global talent supply chain and workforce talent solutions, including MSP, RPO and PPO solutions to customers on a global basis.
Removed
This model optimized Kelly’s structure and capabilities based on market opportunity and the unique needs of employers and talent in each specialty to enable organic growth. To enhance specialization in higher margin, higher growth specialties, Kelly also pursued an aggressive approach to driving inorganic growth in SET, Education, and OCG.
Added
In 2025, Kelly integrated its P&I and OCG specialty areas, responding to a shift in large enterprise demand toward integrated workforce solutions and enabling a more streamlined and efficient go-to-market approach. In addition, the Company launched a multi-year strategic initiative to integrate all of the businesses into one enterprise system.
Removed
Utilizing a technology platform to capture corporate volunteering, we empower our employees with volunteering and giving initiatives while increasing collaboration on social impact opportunities. This allows our employees to actively participate in causes they are passionate about and align with our sustainability strategy.
Added
The first phase of integrating the SET business was completed and went live in early 2026. Today, Kelly remains one of the largest providers of temporary and permanent staffing services, outcome-based solutions, RPO, MSP and payroll process outsourcing (“PPO”).
Removed
Talent In addition to our internal employees, Kelly recruits talent on behalf of our customers globally. In 2024, we placed more than 400,000 individuals in positions with our customers.
Added
Artificial Intelligence The Company employs a range of artificial intelligence (“AI”) technologies to support its talent related solutions. These technologies are integrated into recruiting, applicant tracking, candidate screening and assessment, workforce analytics, and broader talent management processes.
Added
The Company leverages both third-party AI solutions and internally developed proprietary tools, including the Company’s Kelly Helix platform, to enhance the efficiency, consistency, and scalability of these activities. Corporate Sustainability Kelly is committed to the highest standards of corporate citizenship.
Added
We capture and track volunteering efforts through various platforms, empowering employees to engage in social impact initiatives and collaborate with colleagues. Our Kelly Hands & Hearts corporate volunteering program, along with a dedicated paid Volunteer Day, provides additional opportunities for employees to support causes that matter most to them, both locally and globally.
Added
These efforts are essential to our vision of building inclusive and equitable communities. In 2025, we launched our Global Month of Service, encouraging all employees worldwide to participate in meaningful volunteerism and acts of service. Now a cornerstone of our community engagement, this annual event underscores our dedication to collective impact.
Added
In 2025, we placed approximately 375,000 individuals in positions with our customers.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may not be able to realize value from, or otherwise preserve and utilize, our tax credit and net operating loss carryforwards. Provisions in U.S. and foreign tax law could limit the use of tax credit and net operating loss carryforwards in the event of an ownership change.
Biggest changeIf approved, these changes would reduce certain impediments to stockholder action contained in our current organizational documents and could, depending on the circumstances, either facilitate or deter third-party acquisition efforts. We may not be able to realize value from, or otherwise preserve and utilize, our tax credit and net operating loss carryforwards.
Our insurance coverage may not be sufficient to cover all such costs or consequences, and there can be no assurance that any insurance that we now maintain will remain available under acceptable terms.
Our insurance coverage may not be sufficient to cover all such costs or consequences and there can be no assurance that any insurance that we now maintain will remain available under acceptable terms.
The voting rights of our Class B common stock are perpetual, and our Class B common stock is not subject to transfer restrictions or mandatory conversion obligations under our certificate of incorporation or bylaws. Our Class B common stock is the only class of our common stock entitled to voting rights.
Our Class B common stock is the only class of our common stock entitled to voting rights. The voting rights of our Class B common stock are perpetual and our Class B common stock is not subject to transfer restrictions or mandatory conversion obligations under our certificate of incorporation or bylaws.
The holders of shares of our Class A common stock are not entitled to voting rights. Under our certificate of incorporation, the holders of shares of our Class A common stock are not entitled to voting rights, except as otherwise required by Delaware law.
Under our certificate of incorporation, the holders of shares of our Class A common stock are not entitled to voting rights, except as otherwise required by Delaware law.
An event involving the destruction, modification, accidental or unauthorized release, or theft of sensitive information from systems related to our business, or an attack that results in damage to or unavailability of our key technology systems or those of critical vendors (e.g., ransomware), could result in damage to our reputation, fines, regulatory sanctions or interventions, contractual or financial liabilities, additional compliance and remediation costs, loss of employees or customers, loss of payment card network privileges, operational disruptions and other forms of costs, losses or reimbursements, any of which could materially adversely 15 affect our operations or financial condition.
An event involving the destruction, modification, accidental or unauthorized release, or theft of sensitive information from systems related to our business, or an attack that results in damage to or unavailability of our key technology systems or those of critical vendors (e.g., ransomware), could result in damage to our reputation, fines, regulatory sanctions or interventions, contractual or financial liabilities, additional compliance and remediation costs, loss of employees or customers, loss of payment card network privileges, operational disruptions and other forms of costs, losses or reimbursements, any of which could materially adversely affect our operations or financial condition.
Our operations outside the United States are subject to risks inherent in international business activities, including: • fluctuations in currency exchange rates; • restrictions or limitations on the transfer of funds; 12 • government intrusions including asset seizures, expropriations or de facto control; • varying economic and geopolitical conditions; • differences in cultures and business practices; • differences in employment and tax laws and regulations; • differences in accounting and reporting requirements; • differences in labor and market conditions; • compliance with trade sanctions; • changing and, in some cases, complex or ambiguous laws and regulations; and • litigation, investigations and claims.
Our operations outside the United States are subject to risks inherent in international business activities, including: • fluctuations in currency exchange rates; • restrictions or limitations on the transfer of funds; • government intrusions including asset seizures, expropriations or de facto control; • varying economic and geopolitical conditions; • differences in cultures and business practices; • differences in employment and tax laws and regulations; • differences in accounting and reporting requirements; • differences in labor and market conditions; • compliance with trade sanctions; • changing and, in some cases, complex or ambiguous laws and regulations; and • litigation, investigations and claims.
Exchange rates for currencies of these countries may fluctuate in relation to the U.S. dollar and these fluctuations may have an adverse or favorable effect on our operating results when translating foreign currencies into U.S. dollars. Our international operations subject us to potential liability under anti-bribery, anti-corruption, anti-trafficking, supply chain, trade protection, and other laws and regulations.
Exchange rates for currencies of these countries may fluctuate in relation to the U.S. dollar and these fluctuations may have an adverse or favorable effect on our operating results when translating foreign currencies into U.S. dollars. 14 Our international operations subject us to potential liability under anti-bribery, anti-corruption, anti-trafficking, supply chain, trade protection and other laws and regulations.
Our success is directly dependent on our customers’ demand for talent. As technology continues to evolve, an increasing number of tasks currently performed by people may be replaced by automation, robotics, machine learning, artificial intelligence, and other technology advances outside of our control. These changes could result in a decreased demand for human labor.
Our success is directly dependent on our customers’ demand for talent. As technology continues to evolve, an increasing number of tasks currently performed by people may be replaced by automation, robotics, machine learning, artificial intelligence (“AI”), and other technology advances outside of our control. These changes could result in a decreased demand for human labor.
If we experience an ownership change, inclusive of our Class A and Class B common stock, our tax credit and net operating loss carryforwards generated prior to the ownership change may be subject to annual limitations that could reduce, eliminate or defer their utilization. Such limitation could materially impact our financial condition and results of operations.
If we experience an ownership change, inclusive of our Class A and Class B common stock, our tax credit and net operating loss carryforwards generated prior to the ownership change may be 19 subject to annual limitations that could reduce, eliminate or defer their utilization. Such limitation could materially impact our financial condition and results of operations.
Director nominees are not required to be selected or recommended for the board’s selection by a majority of independent directors or a nominations committee comprised solely of independent directors, nor do the Nasdaq Global Market listing standards require a controlled company to certify the adoption of a formal written charter or board resolution, as applicable, addressing the nominations process.
Director nominees are not required to be selected or recommended for the board’s selection by a majority of independent directors or a nominations committee comprised solely of independent directors, nor do the Nasdaq Global Select Market listing standards require a controlled company to certify the adoption of a formal written charter or board resolution, as applicable, addressing the nominations process.
In addition, these occurrences may give rise to litigation, which could be time-consuming and expensive. In the U.S. and certain other countries in which we operate, new employment and labor laws and regulations have been proposed or adopted that may increase the potential exposure of employers to employment-related claims and litigation.
In addition, these occurrences may give rise to litigation, which could be time-consuming and expensive. In the U.S. and certain other countries in which we operate, new employment and labor laws and regulations have been proposed or adopted that may increase the 16 potential exposure of employers to employment-related claims and litigation.
Social, political and financial conditions can negatively impact the availability of qualified personnel. Competition for 13 individuals with proven specialized knowledge and skills is intense, and demand for these individuals is expected to remain strong in the foreseeable future. Our success is dependent on our ability to attract, develop and retain these employees.
Social, political and financial conditions can negatively impact the availability of qualified personnel. Competition for individuals with proven specialized knowledge and skills is intense and demand for these individuals is expected to remain strong in the foreseeable future. Our success is dependent on our ability to attract, develop and retain these employees.
Since receipts from customers generally lag payroll to temporary employees, the bankruptcy of a major customer could have a material adverse impact on our ability to meet our 10 working capital requirements. The expansion of payment terms may extend our working capital requirements and reduce available capital for investment.
Since receipts from customers generally lag payroll to temporary employees, the bankruptcy of a major customer could have a material adverse impact on our ability to meet our working capital requirements. The expansion of payment terms may extend our working capital requirements and reduce available capital for investment.
In addition, the stock market in general, and the Nasdaq Global Market in particular, often experiences significant price and volume fluctuations that frequently are unrelated or disproportionate to the operating performance of listed companies. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.
In addition, the stock market in general and Nasdaq in particular, often experiences significant price and volume fluctuations that frequently are unrelated or disproportionate to the operating performance of listed companies. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.
As a result, Class A common stockholders do not have the right to vote for the election of directors or in connection with most other matters submitted for the vote of our stockholders, including mergers and certain other business combination transactions involving the Company.
As a result, Class A common stockholders do not otherwise have the right to vote for the election of directors or in connection with most other matters submitted for the vote of our stockholders, including most mergers and certain other business combination transactions involving the Company.
Advanced social engineering and impersonation techniques by criminal organizations and nation-state adversaries for the purposes of espionage, data theft, or system disruption have sought to exploit information technology job opportunities at many companies.
Advanced social engineering and 17 impersonation techniques by criminal organizations and nation-state adversaries for the purposes of espionage, data theft, or system disruption have sought to exploit information technology job opportunities at many companies.
A controlled company is required to have an audit committee composed of at least three directors who are independent as defined under the rules of both the SEC and the Nasdaq Global Market.
A controlled company is required to have an audit committee composed of at least three directors who are independent as defined under the rules of both the SEC and the Nasdaq Global Select Market.
A controlled company is also exempt from Nasdaq Global Market’s requirements regarding the determination of officer compensation by a majority of independent directors or a compensation committee comprised solely of independent directors.
A controlled company is also exempt from the Nasdaq Global Select Market’s requirements regarding the determination of officer compensation by a majority of independent directors or a compensation committee comprised solely of independent directors.
In addition, as state and local jurisdictions expand their regulation of the workplace, we may be unable to adequately monitor or timely respond to changes in state and local regulations, which could result in significant fines and penalties, criminal sanctions against us, our officers or our employees, prohibitions on the conduct of our business, damage to our reputation, and other adverse consequences. 9 Unexpected changes in claim trends on our workers’ compensation, unemployment, disability and medical benefit plans may negatively impact our financial condition.
In addition, as state and local jurisdictions expand their regulation of the workplace, we may be unable to adequately monitor or timely respond to changes in state and local regulations, which could result in significant fines and penalties, criminal sanctions against us, our officers or our employees, prohibitions on the conduct of our business, damage to our reputation and other adverse consequences. 10 Unexpected changes in claim trends on our workers’ compensation, unemployment, disability, medical benefit plans, and other expenses may negatively impact our financial condition.
While we maintain processes to monitor these third-parties for compliance to these standards, failure of these third-parties to adhere to Global Compliance Obligations could result in significant fines and penalties, criminal sanctions against us, our officers or our employees, prohibitions on the conduct of our business, and damage to our reputation.
While we maintain processes to monitor these third-parties for compliance to these standards, failure of these third-parties to adhere to Global Compliance Obligations could result in significant fines and penalties, criminal sanctions against us, our officers or our employees, prohibitions on the conduct of our business, customer loss, and damage to our reputation.
We also face the risk that our current or prospective customers may decide to 8 provide similar services internally. As a result, there can be no assurance that we will not encounter increased competition in the future. Technological advances, including advances in artificial intelligence, may significantly disrupt the labor market and weaken demand for human capital.
We also face the risk that our current or prospective customers may decide to 9 provide similar services internally. As a result, there can be no assurance that we will not encounter increased competition in the future. Technological advances, including advances in automation and artificial intelligence, may significantly disrupt the labor market and weaken demand for human capital.
During 2024, we met all of the covenant requirements. Our ability to continue to meet these financial covenants, particularly with respect to interest coverage (see Debt footnote in the notes to our consolidated financial statements), cannot be assured.
During 2025, we met all of the covenant requirements. Our ability to continue to meet these financial covenants, particularly with respect to interest coverage (see Debt footnote in the notes to our consolidated financial statements), cannot be assured.
In periods of economic growth, employers often add temporary employees before hiring full-time employees. However, when economic activity declines, many employers reduce their use of temporary employees before laying off full-time employees. Customer responses to real or perceived economic conditions, including perceptions related to market conditions, labor supply and inflation, could negatively impact customer behavior.
In periods of economic growth, employers often add temporary employees before hiring full-time employees. However, when economic activity declines, many employers reduce their use of temporary employees before laying off full-time employees. Customer responses to real or perceived economic conditions, including perceptions related to market conditions, labor supply, international trade policy, and inflation, could negatively impact customer behavior.
Other international laws and compacts hold companies liable for human rights violations that occur within their supply chain, and impose obligations on companies to prohibit human trafficking, forced labor, and child labor ("Human Rights and Supply Chain Laws").
Other international laws and compacts hold companies liable for human rights violations that occur within their supply chain and impose obligations on companies to prohibit human trafficking, forced labor and child labor (“Human Rights and Supply Chain Laws”).
The European Union’s General Data Protection Regulation, the California Consumer Privacy Act, the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), and similar laws impose additional compliance requirements related to the collection, use, processing, transfer, disclosure, security, and retention of personal or protected health information ("PHI"), which can increase operating costs and resources to accomplish.
The European Union’s General Data Protection Regulation, the California Consumer Privacy Act, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and similar laws impose additional compliance requirements related to the collection, use, processing, transfer, disclosure, security and retention of personal or protected health information (“PHI”), which can increase operating costs and resources to accomplish.
Although we have not experienced a material attack of this nature, because our services involve providing talent solutions for these roles, we are at increased risk for this advanced type of attack, whether directly or through a supplier in our MSP services.
Although we have not experienced a material attack of this nature, because our services involve providing talent solutions for information technology roles, we are at increased risk for this advanced type of attack, whether directly or through a supplier in our MSP services.
Moreover, these third parties are often subject to international laws and regulations regarding their conduct, including compliance with anti-bribery, anti-corruption, human trafficking, forced or child labor, trade sanctions, sustainability, and other compliance obligations ("Global Compliance Obligations").
Moreover, these third parties are often subject to international laws and regulations regarding their conduct, including compliance with anti-bribery, anti-corruption, human trafficking, forced or child labor, trade sanctions, sustainability and other compliance obligations (“Global Compliance Obligations”).
The Foreign Corrupt Practices Act and other anti-bribery and anti-corruption laws and regulations ("Anti-Corruption Laws") prohibit corrupt payments by our employees, vendors, or agents.
The Foreign Corrupt Practices Act and other anti-bribery and anti-corruption laws and regulations (“Anti-Corruption Laws”) prohibit corrupt payments by our employees, vendors, or agents.
Our information technology strategy may not yield its intended results. Our information technology strategy focuses on improvements to our technology stack across the company, including synergies in our applicant onboarding and tracking systems, order management system, and improvements to financial processes.
Our information technology strategy may not yield its intended results. Our information technology strategy focuses on improvements to our technology stack across the company, including synergies in our applicant onboarding and tracking systems, order management system, financial processes, and enterprise resource planning (“ERP”) system.
Our Class A and Class B common stock are quoted on the Nasdaq Global Market. Under the listing standards of the Nasdaq Global Market, we are deemed to be a “controlled company” due to Trust K having voting power with respect to more than fifty percent of our outstanding voting stock.
Our Class A and Class B common stock are quoted on the Nasdaq Global Select Market. Under the listing standards of the Nasdaq Global Select Market, we are deemed to be a “controlled company” due to our controlling shareholder having voting power with respect to more than fifty percent of our outstanding voting stock.
These include: • actual or anticipated variations in our quarterly operating results; • announcements of new services by us or our competitors; • announcements relating to strategic relationships, acquisitions or divestitures; • changes in financial estimates by securities analysts; • changes in general economic conditions; • actual or anticipated changes in laws and government regulations; • commencement of, or involvement in, litigation; • any major change in our board or management; • changes in industry trends or conditions; and • sales of significant amounts of our common stock or other securities in the market.
These include: • actual or anticipated variations in our quarterly operating results; • announcements of new services by us or our competitors; • announcements relating to strategic relationships, acquisitions or divestitures; • changes in financial estimates by securities analysts; • changes in general economic conditions; • actual or anticipated changes in laws and government regulations; • commencement of, or involvement in, litigation; • the effects of our dual-class common stock (including the concentration of voting power in our Class B shares); • any major change in our board or management; • changes in industry trends or conditions; and • sales of significant amounts of our common stock or other securities in the market.
The trustees of Trust K are therefore able to exercise voting control with respect to all matters requiring stockholder approval, including the election or removal from office of all members of the Company’s board of directors. We are not subject to certain of the listing standards that normally apply to companies whose shares are quoted on the Nasdaq Global Market.
Our controlling shareholder therefore, is able to exercise voting control with respect to all matters requiring stockholder approval, including the election or removal from office of all members of the Company’s board of directors. We are not subject to certain of the listing standards that normally apply to companies whose shares are quoted on the Nasdaq Global Select Market.
Historically, large-scale events have resulted in a temporary economic downturn in areas impacted by such catastrophic events. Even where we are able to provide services in relief and support operations, there is no assurance that we will be able to offset the adverse impacts of the catastrophic event.
Historically, large-scale events have resulted in a temporary economic downturn in areas impacted by such catastrophic events. Even where we are able to provide services in relief and support operations, there is no assurance that we will be able to offset the adverse impacts of the catastrophic event. We are subject to substantial pressure to meet external stakeholder’s sustainability requirements.
Additionally, most of our customer contracts can be terminated by the customer on short notice without penalty. This creates uncertainty with respect to the revenues and earnings we may recognize with respect to our customer contracts.
Additionally, most of our customer contracts can be terminated by the customer on short notice without penalty. This creates uncertainty with respect to the revenues and earnings we may recognize with respect to our customer contracts and the loss of a large customer could have a material impact on revenue.
Although we carefully plan for intelligent integration of our acquisitions with our legacy businesses, there is no assurance that we will adequately resolve the issues presented by lack of a single ERP, or that we will successfully integrate technology across the Company.
Although we carefully plan for intelligent integration of our acquisitions with our legacy businesses, there is no assurance that we will 13 adequately resolve the issues presented by operating multiple disparate systems, or that we will successfully integrate technology across the Company.
There can be no assurance that we will be able to increase the fees charged to our customers in a timely manner and in a sufficient amount to cover increased costs as a result of any changes in claims-related liabilities. We may have additional tax liabilities that exceed our estimates.
There can be no assurance that we will be able to increase the fees charged to our customers in a timely manner and in a sufficient amount to cover increased costs as a result of any changes in claims-related liabilities or other unexpected expenses.
While we intend to maintain or increase our revenues and earnings from our major corporate customers, we are exposed to risks arising from the possible loss of major customer accounts.
We serve many large corporate customers through high volume service agreements. While we intend to maintain or increase our revenues and earnings from our major corporate customers, we are exposed to risks arising from the possible loss of major customer accounts.
If we fail to accurately anticipate and meet our customers’ needs through the development of new or improved service offerings or do not successfully deliver these service offerings, our competitive position could weaken, causing a material adverse effect on our results of operations and financial condition.
If we fail to accurately anticipate and meet our customers’ needs through the development of new or improved service offerings or do not successfully deliver these service offerings, our competitive position could weaken, causing a material adverse effect on our results of operations and financial condition. 11 A loss of major customers or a change in such customers’ buying behavior or economic strength could have a material adverse effect on our business.
If broader credit markets were to experience dislocation, our potential access to other funding sources would be limited.
If broader credit markets were to experience dislocation, our potential access to other funding sources would be limited. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
This could expose us to certain risks unique to that business, including civil liability, product liability, or product recalls. As the nature of work changes, we deliver services that connect independent talent to independent work with our customers which could expose the Company to risks of misclassifying workers, which could result in regulatory audits and penalties.
As the nature of work changes, we deliver services that connect independent talent to independent work with our customers which could expose the Company to risks of misclassifying workers, which could result in regulatory audits and penalties.
Provisions in our certificate of incorporation and bylaws and Delaware law may delay or prevent an acquisition of our Company. Our certificate of incorporation and bylaws contain provisions that could make it harder for a third party to acquire us without the consent of our board of directors.
Our certificate of incorporation and bylaws contain provisions that could make it harder for a third party to acquire us without the consent of our board of directors.
In addition, government agencies may temporarily or permanently lose funding for awarded contracts, reduce spending, or deprioritize future spending on contracts on which we participate, or there could be delays in the start-up of projects already awarded and funded. We are at risk of damage to our brands, which are important to our success.
In addition, government agencies may temporarily or permanently lose funding for awarded contracts, reduce spending, or deprioritize future spending on contracts on which we participate, or there could be delays in the start-up of projects already awarded and funded. This creates uncertainty with respect to the revenues and earnings we may recognize with respect to our government contracts.
Our board of directors could choose not to negotiate with an acquirer that it did not believe was in our strategic interests. If an acquirer is discouraged from offering to acquire us or prevented from successfully completing a hostile acquisition by these or other measures, our shareholders could lose the opportunity to sell their shares at a favorable price.
If an acquirer is discouraged from offering to acquire us or prevented from successfully completing a hostile acquisition by these or other measures, our shareholders could lose the opportunity to sell their shares at a favorable price.
We are subject to multiple federal, state, local, and foreign taxes in the jurisdictions in which we operate. Our tax expense could be materially impacted by changes in tax laws in these jurisdictions, changes in the valuation of deferred tax assets and liabilities or changes in the mix of income by country.
Our tax expense could be materially impacted by changes in tax laws in these jurisdictions, changes in the valuation of deferred tax assets and liabilities or changes in the mix of income by country.
In general, an ownership change occurs under U.S. tax law if there is a change in the corporation’s equity ownership that exceeds 50% over a rolling three-year period.
Provisions in U.S. and foreign tax law could limit the use of tax credit and net operating loss carryforwards in the event of an ownership change. In general, an ownership change occurs under U.S. tax law if there is a change in the corporation’s equity ownership that exceeds 50% over a rolling three-year period.
In addition, undesirable actions by our competitors could adversely impact the reputation of the staffing industry as a whole, negatively impacting our brand. As we increasingly use artificial intelligence in our services, incidents of bias, hallucination, or error by artificial intelligence we use, or ethical objections to our use of artificial intelligence, could negatively impact our brand.
As we increasingly use artificial intelligence in our services, incidents of bias, hallucination, or error by artificial intelligence we use, or ethical objections to our use of artificial intelligence, could negatively impact our brand.
While we maintain insurance in types and amounts we believe are appropriate for the contemplated risks, there is no assurance that such insurance coverage will remain available on reasonable terms or be sufficient in amount or scope. 11 We are increasingly dependent on third parties for the execution of critical functions and could be liable for their inability to perform or adhere to global compliance standards.
While we maintain insurance in types and amounts we believe are appropriate for the contemplated risks, there is no assurance that such insurance coverage will remain available on reasonable terms or be sufficient in amount or scope.
Our success depends, in part, on the value associated with our brands. Because we assign employees to work under the direction and supervision of our customer at work locations not under Kelly’s control, we are at risk of our employees engaging in unauthorized conduct that could harm our reputation. Our Education segment is particularly susceptible to this exposure.
Because we assign employees to work under the direction and supervision of our customer at work locations not under Kelly’s control, we are at risk of our employees engaging in unauthorized or illegal conduct that could harm our reputation.
We rely on third parties to support critical functions within our operations, including portions of our technology infrastructure, vendor management, customer relationship management, applicant tracking systems and in-country staffing services.
We are increasingly dependent on third parties for the execution of critical functions and could be liable for their inability to perform or adhere to global compliance standards. We rely on third parties to support critical functions within our operations, including portions of our technology infrastructure, vendor management, customer relationship management, applicant tracking systems and in-country staffing services.
The Nasdaq Global Market further requires that all members of the audit committee have the ability to read and understand fundamental financial statements and that at least one member of the audit committee possess financial sophistication. The independent directors must also meet at least twice a year in meetings at which only they are present.
The Nasdaq Global Select Market further requires that all members of the audit committee have the ability to read and understand fundamental financial statements and that at least one member of the audit committee possess financial sophistication.
Our brand reputation could also be damaged by the actions of unrelated third parties with diverse or unclear motives. Political activists, social media posts, or traditional news media could reference the Kelly brand as part of a broader communication unrelated to our business, which could result in backlash against our business practices.
Political activists, social media posts, or traditional news media could reference the Kelly brand as part of a broader communication 12 unrelated to our business, which could result in backlash against our business practices. In addition, undesirable actions by our competitors could adversely impact the reputation of the staffing industry as a whole, negatively impacting our brand.
This trend poses a risk to the staffing industry, particularly in lower-skill job categories and to creative, administrative, customer support, and clerical roles vulnerable to advances in artificial intelligence.
This trend poses a risk to the staffing industry, particularly in lower-skill job categories and to creative, administrative, customer support and clerical roles vulnerable to advances in artificial intelligence. Artificial intelligence is beginning to perform tasks previously handled by knowledge workers, including data entry, basic coding, document review, financial analysis, customer service, and administrative support.
Many business processes critical to our continued operation are hosted in outsourced facilities in America, Europe and Asia, hosted at our corporate headquarters or, increasingly, occur in cloud-based computer environments. These critical processes include, but are not limited to, payroll, customer reporting, and order management.
Many business processes critical to our continued operation are hosted in outsourced facilities in America, Europe and Asia, hosted at our corporate headquarters or, increasingly, occur in cloud-based computer environments. We rely on key cloud and Software as a Service (“SaaS”) providers to support critical business processes.
Past and future acquisitions may not be successful. As a part of our growth strategy, we continue to monitor the market for acquisition targets to bolster our inorganic growth aspirations.
Any delays in completing, or an inability to successfully complete, these technology initiatives, or an inability to achieve the anticipated efficiencies, could adversely affect our operations, liquidity and financial condition. Past and future acquisitions may not be successful. As a part of our growth strategy, we continue to monitor the market for acquisition targets to bolster our inorganic growth aspirations.
Although we have taken steps to protect such instances by establishing data backup and disaster recovery capabilities, the loss or inability to access of this data or cloud environment could create a substantial risk of business interruption which could have a material adverse effect on our business, financial condition and results of operations. 14 A failure to maintain the privacy of personal data entrusted to us could have significant adverse consequences.
Although we have taken steps to protect such instances by establishing data backup and disaster recovery capabilities, a security incident, outage, or operational failure affecting these providers, or a misconfiguration or integration issue involving our environments, impair our ability to serve customers and candidates, and create a substantial risk of business interruption which could have a material adverse effect on our business, financial condition and results of operations.
In addition, Section 203 of the Delaware General Corporation Law limits mergers and other business combination transactions involving 15 percent or greater stockholders of Delaware corporations unless certain board 16 or stockholder approval requirements are satisfied. These provisions and other similar provisions make it more difficult for a third party to acquire us without negotiation.
Our board of directors also has the ability to issue additional shares of common stock which could significantly dilute the ownership of a hostile acquirer. In addition, Section 203 of the Delaware General Corporation Law limits mergers and other business combination transactions involving 15 percent or greater stockholders of Delaware corporations unless certain board or stockholder approval requirements are satisfied.
Rapid evolution of technology may widen the skills gap, where the demand for expertise outpaces the availability of suitably skilled professionals. Low unemployment, as well as social, political and financial conditions can negatively impact the amount of qualified personnel available to meet the talent requirements of our customers.
Low unemployment, periods of reduced job movement or hiring activity, as well as social, political and financial conditions can negatively impact the amount of qualified personnel available to meet the talent requirements of our customers.
In the normal course of business we control, process, or have access to personal data regarding candidates and persons employed or engaged by us, our customers, certain customer employees, and managed suppliers. Information concerning these individuals may also reside in systems controlled by third parties for purposes such as employee benefits, assignment information, and payroll administration.
A failure to maintain the privacy of personal data entrusted to us could have significant adverse consequences. In the normal course of business we control, process, or have access to personal data regarding candidates and persons employed or engaged by us, our customers, certain customer employees and managed suppliers.
The legal and regulatory environment concerning data privacy is becoming more complex and challenging, and the potential consequences of non-compliance have become more severe.
Information concerning these individuals may also reside in systems controlled by third parties for purposes such as employee benefits, assignment information and payroll administration. The legal and regulatory environment concerning data privacy is becoming more complex and challenging and the potential consequences of non-compliance have become more severe.
Our inability to meet customer ESG or sustainability requirements could also result in the possible loss of major customer accounts.
These enhanced expectations from our customers around sustainability practices can increase operating costs and require incremental resources to satisfy. Our inability to meet customer sustainability requirements could also result in the possible loss of major customer accounts.
Risks Related to Our Capital Structure Our controlling stockholder exercises voting control over our company and has the ability to elect or remove from office all of our directors. The Terence E. Adderley Revocable Trust K ("Trust K"), which became irrevocable upon the death of Terence E. Adderley on October 9, 2018, is our controlling stockholder.
Risks Related to Our Capital Structure Our controlling stockholder exercises voting control over our company and has the ability to elect or remove from office all of our directors. We have a controlling stockholder that beneficially owns 92.2% of our outstanding Class B shares.
While we have made public sustainability commitments, our customers often require us to comply with their ESG requirements as part of their own practices. These enhanced expectations from our customers around ESG practices can increase operating costs and require incremental resources to satisfy.
Influential investors, regulators, customers, and advocacy groups have increasingly focused on evaluating the sustainability commitments of companies in which they invest. While we have made public sustainability commitments, our customers often require us to comply with their requirements as part of their own practices.
There can be no assurance that qualified personnel will continue to be available in sufficient numbers and on terms of employment acceptable to us and our customers. We may be exposed to employment-related claims and losses, including class action lawsuits and collective actions, which could have a material adverse effect on our business.
These challenges could materially increase our operating costs, reduce our screening effectiveness, expose us to significant legal and financial liability, and damage our competitive position and brand value. We may be exposed to employment-related claims and losses, including class action lawsuits and collective actions, which could have a material adverse effect on our business.
Removed
A loss of major customers or a change in such customers’ buying behavior or economic strength could have a material adverse effect on our business. We serve many large corporate customers through high volume service agreements.
Added
As these technologies become more sophisticated and widely adopted, demand for certain categories of professional and technical staff we provide may decline. While technology may create demand for new types of roles that increase the demand for our services, there is no guarantee that growth in emerging job categories will fully offset potential declines in overall staffing demand.
Removed
We do not currently use a single enterprise resource planning ("ERP") system, which limits our ability to react to evolving technology and customer expectations and increases the amount of investment and effort necessary to provide global service integration to our customers.
Added
We face exposure to other significant expenses that could materially impact our financial performance, including cybersecurity incident response and remediation costs, regulatory compliance expenses, litigation and settlement costs, costs associated with employee or candidate misconduct, technology infrastructure investments required to maintain competitive service delivery, and expenses related to bad debt or client payment defaults.
Removed
Although the technology strategy is intended to increase productivity and operating efficiencies, these initiatives may not yield their intended results. Any delays in completing, or an inability to successfully complete, these technology initiatives, or an inability to achieve the anticipated efficiencies, could adversely affect our operations, liquidity and financial condition.
Added
Additionally, we may incur unexpected costs related to regulatory changes, business integration or restructuring activities, or workforce retention initiatives in tight labor markets. Any of these expense categories could increase materially and unexpectedly.
Removed
We are subject to substantial pressure to meet external stakeholder’s sustainability and ESG requirements. Influential investors, regulators, and advocacy groups have increasingly focused on evaluating environmental, social, and governance ("ESG") commitments of companies in which they invest.
Added
As customers monitor their third-party relationships for financial risk, such adverse financial changes could result in current customer loss or inability to acquire new customers due to perceived negative financial performance. We may have additional tax liabilities that exceed our estimates. We are subject to multiple federal, state, local and foreign taxes in the jurisdictions in which we operate.
Removed
In accordance with the provisions of Trust K, William U. Parfet, David M. Hempstead and Andrew H. Curoe were appointed as successor trustees of the trust. Mr. Parfet is the brother of Donald R. Parfet, a member of the board of directors of the Company.
Added
We are at risk of damage to our brands, which are important to our success. Our success depends, in part, on the value associated with our brands.
Removed
The trustees, acting by majority vote, have sole investment and voting power over the shares of our Class B common stock held by Trust K, which represent approximately 95.3% of the outstanding Class B shares.
Added
Our Education segment is particularly susceptible to this exposure because it places employees in schools and educational institutions where they work directly with vulnerable populations, including minors. These placements create heightened reputational and legal exposure related to potential misconduct involving students.
Removed
We currently comply with the listing standards of the Nasdaq Global Market that do not apply to controlled companies. Our compliance is voluntary, however, and there can be no assurance that we will continue to comply with these standards in the future.
Added
Even a single incident of inappropriate contact, boundary violations, or prohibited interactions between our employees and students could result in significant harm to our brand, loss of client relationships, regulatory scrutiny, and legal liability.
Removed
Our board of directors also has the ability to issue additional shares of common stock which could significantly dilute the ownership of a hostile acquirer.
Added
The nature of educational environments—where trust, safety, and duty of care are paramount—means that any allegation of misconduct, regardless of its ultimate validity, can damage our reputation within the education sector and more broadly.
Added
We implement screening, background checks, and training protocols that surpass regulatory compliance requirements, but we cannot entirely eliminate the risk that individuals we place may engage in conduct that violates professional boundaries or legal standards governing interactions with minors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAdditionally, the rapid pace of change in information security and cybersecurity threats could result in cyberattacks with little or no notice. Our relationships with third parties, including suppliers we manage, customers, and vendors to whom we outsource or rely on for business processes or software, creates potential avenues for malicious actors to initiate a supply chain attack.
Biggest changeOur relationships with third parties, including suppliers we manage, customers and vendors to whom we outsource or rely on for business processes or software, creates potential avenues for malicious actors to initiate a supply chain attack.
These groups work in tandem on cybersecurity and privacy governance, and oversee the Company’s approach to information security, privacy, data governance, and IT infrastructure, which includes internal monitoring to proactively identify potential security threats, maintenance of access controls, asset management, response and recovery activities, and training and awareness programs.
These groups work in tandem on cybersecurity and privacy governance and oversee the Company’s approach to information security, privacy, data governance and IT infrastructure, which includes monitoring to proactively identify potential security threats, maintenance of access controls, asset management, response and recovery activities and training and awareness programs.
These processes include architecture reviews and contractual clauses related to data protection and compliance, SSAE audits and reviews of vendor System and Organization Controls ("SOC") 1 and SOC 2 Type II reports for critical vendors and ongoing monitoring and reporting of vendor security by independent third parties.
These processes include architecture reviews and contractual clauses related to data protection and compliance, SSAE audits and reviews of vendor System and Organization Controls (“SOC”) 1 and SOC 2 Type II reports for critical vendors and ongoing monitoring and reporting of vendor security by independent third parties.
ITEM 1C. CYBERSECURITY. Cybersecurity Risk Management and Strategy Management of material risks from cybersecurity threats for Kelly, Kelly subsidiaries, third-party suppliers and vendors occurs as part of the Company’s Enterprise Risk Management ("ERM") program. The Company’s ERM program provides ongoing risk identification, oversight, guidance, and mitigation on various risks, including cybersecurity.
ITEM 1C. CYBERSECURITY. Cybersecurity Risk Management and Strategy Management of material risks from cybersecurity threats for Kelly, Kelly subsidiaries, third-party suppliers and vendors occurs as part of the Company’s Enterprise Risk Management (“ERM”) program. The Company’s ERM program provides ongoing risk identification, oversight, guidance and mitigation on various risks, including cybersecurity.
In addition to the reports submitted quarterly by the Company’s Chief Risk and Privacy Officer and CISO, the Vice President of Internal Audit independently assesses the Company’s risk management process and separately reports on the effectiveness of 18 the Company’s risk identification, prioritization, and mitigation processes to the Audit Committee.
In addition to the reports submitted quarterly by the Company’s Chief Risk and Privacy Officer and CISO, the Vice President of Internal Audit independently assesses the Company’s risk management process and separately reports on the effectiveness of the Company’s risk identification, prioritization and mitigation processes to the Audit Committee.
The Company maintains technical and organizational safeguards, including vulnerability assessments, endpoint monitoring, penetration testing, employee training, incident response capability reviews and exercises, cybersecurity insurance and business 17 continuity mechanisms to protect the Company’s assets and operations.
The Company maintains technical and organizational safeguards, including vulnerability assessments, endpoint monitoring, penetration testing, employee training, incident response capability reviews and exercises, cybersecurity insurance and business continuity mechanisms to protect the Company’s assets and operations.
In addition, the Company’s Management Team and Cybersecurity and Privacy Governance Team is composed of individuals with collective decades of experience in information technology, data protection, threat response, emergency management, business continuity, and disaster recovery.
In addition, the Company’s Management Team and Cybersecurity and Privacy Governance Team is composed of individuals with collective decades of experience in information technology, data protection, threat response, emergency management, business continuity and disaster recovery. 21
To evaluate the effectiveness of these internal and external efforts, Kelly adopted the National Institute of Standards and Technology Cybersecurity framework ("NIST CSF") and is assessed against the NIST CSF by a third-party firm at least annually.
To evaluate the effectiveness of these internal and external efforts, Kelly adopted the National Institute of Standards and Technology Cybersecurity framework (“NIST CSF”) and is assessed against the NIST CSF by a third-party firm at least annually.
The Company has a Chief Information Security Officer ("CISO") responsible for the evaluation and mitigation of cybersecurity risks in coordination with the Company’s information technology, law, risk and insurance, and enterprise risk and compliance groups.
The Company has a Chief Information Security Officer (“CISO”) responsible for the evaluation and mitigation of cybersecurity risks in coordination with the Company’s information technology, law, risk and insurance and enterprise risk and compliance groups.
In addition to our internal information security team, we rely on services from various third parties, including a Managed Security Service Provider ("MSSP") and services from an IT solutions organization.
In addition to our internal information security team, we rely on services from various third parties, including a Managed Security Service Provider (“MSSP”) and services from an IT solutions organization.
In line with those procedures, the Company activates an emergency management team ("EMT"), empowered to make decisions, and respond to critical events including cyber incident mitigation and remediation activities.
In line with those procedures, the Company activates an emergency management team (“EMT”), empowered to make decisions and respond to critical events including cyber incident mitigation and remediation activities.
Cybersecurity Threats Although we have not experienced a cybersecurity incident that materially affected our results of operations or financial condition, we periodically experience cyberattacks, which may include the use or attempted use of malware, ransomware, computer viruses, phishing, social engineering schemes, and other means of attempted disruption or unauthorized access.
Cybersecurity Threats Although we have not experienced a cybersecurity incident that materially affected our results of operations or financial condition, we periodically experience cyberattacks, which may include the use or attempted use of malware, ransomware, computer viruses, phishing, AI-enhanced attacks, deepfake technology, social engineering schemes and other means of attempted disruption or unauthorized access.
The Company’s CISO, Chief Information Officer ("CIO"), Chief Risk and Privacy Officer, General Counsel, Chief Financial Officer ("CFO"), Chief Executive Officer ("CEO"), and other officers review the Company’s cybersecurity metrics on access controls, asset management, response and recovery activities, training and awareness programs, cybersecurity threats and certain incident information quarterly, and on an ad hoc basis when necessary.
The Company’s CISO, Chief Information Officer (“CIO”), Chief Risk and Privacy Officer, General Counsel, Chief Financial Officer (“CFO”), Chief Executive Officer (“CEO”) and other officers review the Company’s cybersecurity metrics on access controls, asset management, response and recovery activities, training and awareness programs, cybersecurity threats and certain incident information quarterly and on an ad hoc basis when necessary.
EMT members for information security incidents would include the CISO, CIO, and Chief Risk and Privacy Officer, additional member from the information technology and ERM teams as well as representation from the General Counsel Office, Finance, Communications and Business Operations as appropriate.
Members of the EMT for information security incidents include the CISO, CIO and Chief Risk and Privacy Officer, along with additional representatives from the information technology and ERM teams, as well as the General Counsel Office, Finance, Communications and Business Operations as appropriate.
Our insurance coverage may not be sufficient to cover all such costs or consequences, and there can be no assurance that any insurance that we now maintain will remain available under acceptable terms.
Our insurance coverage may not be sufficient to cover all such costs or consequences and there can be no assurance that any insurance that we now maintain will remain available under acceptable terms. See Part I, Item 1A. Risk Factors under the heading “Risks Related to Cyber Security and Data Privacy” for additional commentary.
Added
The increasing sophistication of attacks leveraging artificial intelligence and machine learning enables threat actors to automate and scale their operations, create highly convincing phishing campaigns, 20 bypass traditional security measures, and adapt their tactics in real-time to evade detection.
Added
Additionally, the rapid pace of change in information security and cybersecurity threats, including the rapid advancement of AI-driven attack capabilities, could result in cyberattacks with little or no notice.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company is continuously engaged in litigation, threatened ligation, claims, audits or investigations arising in the ordinary course of its business, such as matters alleging employment discrimination, wage and hour violations, claims for indemnification or liability, violations of privacy rights, anti-competition regulations, commercial and contractual disputes, and tax related matters which could result in a material adverse outcome.
Biggest changeITEM 3. LEGAL PROCEEDINGS. We are continuously engaged in litigation, threatened litigation, claims, audits or investigations arising in the ordinary course of our business, such as matters alleging employment discrimination, wage and hour violations, claims for indemnification or liability, violations of privacy rights, anti-competition regulations, commercial and contractual disputes, and tax-related matters, which could result in a material adverse outcome.
We record accruals for loss contingencies when we believe it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Such accruals are recorded in accounts payable and accrued liabilities and in accrued workers’ compensation and other claims in the consolidated balance sheet. The Company maintains insurance coverage which may cover certain claims.
We record accruals for loss contingencies when we believe it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Such accruals are recorded in accounts payable and accrued liabilities and in accrued workers’ compensation and other claims in the consolidated balance sheet. We maintain insurance coverage which may cover certain claims.
When claims exceed the applicable policy deductible and realization of recovery of the claim from existing insurance policies is deemed probable, the Company records receivables from the insurance company for the excess amount, which are included in prepaid expenses and other current assets and other assets in the consolidated balance sheet.
When claims exceed the applicable policy deductible and realization of recovery of the claim from existing insurance policies is deemed probable, we record receivables from the insurance company for the excess amount, which are included in prepaid expenses and other current assets and other assets in the consolidated balance sheet.
While the outcome of these matters currently pending cannot be predicted with certainty, we believe that the resolution of any such proceedings will not have a material adverse effect on our financial condition, results of operations or cash flows.
While the outcome of these matters currently pending cannot be predicted with certainty, we believe that the resolution of any such proceedings will not have a material adverse effect on our financial condition, results of operations or cash flows. ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 22 PART II
Removed
In January 2018, the Hungarian Competition Authority (the "Authority") initiated proceedings against a local industry trade association and its members, due to alleged infringement of national competition regulations. The Authority announced its decision on December 18, 2020, levying a fine against the trade association with joint and several secondary liability placed on the 20 member companies.
Removed
The Authority apportioned secondary liability against us as a member company to be approximately $300,000. Certain member companies exercised their right to challenge the decision in Court.
Removed
On or about October 3, 2023, the Court issued its decision which repealed the Authority's decision and ordered a repeated procedure to determine the amount of the imposed fine as well as the allocation between the parties. Although Kelly's staffing operations in Hungary were sold to Gi Group Holdings S.P.A.
Removed
("Gi") in January 2024, we have agreed to indemnify Gi for any liability resulting from this matter. The Company does not believe that resolution of this matter will have a material adverse effect upon the Company’s competitive position, results of operations, cash flows or financial position.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePer share amounts (in dollars) First Quarter Second Quarter Third Quarter Fourth Quarter Year 2024 Class A common High $ 25.27 $ 25.02 $ 23.80 $ 22.44 $ 25.27 Low 19.74 20.84 19.00 12.68 12.68 Class B common High 25.00 24.53 22.98 21.22 25.00 Low 19.80 21.30 19.70 14.00 14.00 Dividends 0.075 0.075 0.075 0.075 0.30 2023 Class A common High $ 19.01 $ 19.43 $ 19.29 $ 22.11 $ 22.11 Low 15.23 15.53 16.80 17.40 15.23 Class B common High 18.62 18.36 18.95 21.65 21.65 Low 15.28 14.86 17.23 18.17 14.86 Dividends 0.075 0.075 0.075 0.075 0.30 Holders The number of holders of record of our Class A and Class B common stock were approximately 14,300 and 600, respectively, as of January 31, 2025.
Biggest changePer share amounts (in dollars) First Quarter Second Quarter Third Quarter Fourth Quarter Year 2025 Class A common High $ 15.11 $ 13.34 $ 14.94 $ 13.31 $ 15.11 Low 12.66 10.80 11.38 7.98 7.98 Class B common High $ 15.15 $ 12.75 $ 15.05 $ 13.47 $ 15.15 Low 12.87 11.04 11.81 8.48 8.48 Dividends 0.075 0.075 0.075 0.075 0.300 2024 Class A common High $ 25.27 $ 25.02 $ 23.80 $ 22.44 $ 25.27 Low 19.74 20.84 19.00 12.68 12.68 Class B common High $ 25.00 $ 24.53 $ 22.98 $ 21.22 $ 25.00 Low 19.80 21.30 19.70 14.00 14.00 Dividends 0.075 0.075 0.075 0.075 0.300 Stockholder Rights Plan On January 11, 2026, our Board of Directors adopted a stockholder rights plan (the “Rights Plan”) following notification that the Terence E.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information and Dividends Our Class A and Class B common stock is traded on the Nasdaq Global Market under the symbols “KELYA” and “KELYB,” respectively.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information and Dividends Our Class A and Class B common stock is traded on the Nasdaq Global Select Market under the symbols “KELYA” and “KELYB,” respectively.
The high and low selling prices for our Class A common stock and Class B common stock as quoted by the Nasdaq Global Market and the dividends paid on the common stock for each quarterly period in the last two fiscal years are reported in the table below.
The high and low selling prices for our Class A common stock and Class B common stock as quoted by the Nasdaq Global Select Market and the dividends paid on the common stock for each quarterly period in the last two fiscal years are reported in the table below.
The graph assumes an investment of $100 on December 31, 2019 and that all dividends were reinvested.
The graph assumes an investment of $100 on December 31, 2020 and that all dividends were reinvested.
Accordingly, 11,592 shares were reacquired in transactions outside the repurchase program during the Company’s fourth quarter. 21 Performance Graph The following graph compares the cumulative total return of our Class A common stock with that of the S&P SmallCap 600 Index and the S&P 1500 Human Resources and Employment Services Index for the five years ended December 31, 2024.
Accordingly, 31,163 shares were reacquired in transactions outside the repurchase program during the Company’s fourth quarter. 24 Performance Graph The following graph compares the cumulative total return of our Class A common stock with that of the S&P SmallCap 600 Index and the S&P 1500 Human Resources and Employment Services Index for the five years ended December 31, 2025.
Recent Sales of Unregistered Securities None. 20 Issuer Purchases of Equity Securities During the fourth quarter of 2024, we reacquired shares of our Class A common stock as follows: Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs (in millions of dollars) September 30, 2024 through November 3, 2024 8,888 $ 20.32 — $ — November 4, 2024 through December 1, 2024 323 14.39 — $ — December 2, 2024 through December 29, 2024 744,544 13.50 742,163 $ 40.0 Total 753,755 $ 13.58 742,163 On November 26, 2024, the Company's board of directors approved a share repurchase program for the Company to repurchase shares covering up to an aggregate of $50.0 million of the Company's Class A common stock.
Issuer Purchases of Equity Securities During the fourth quarter of 2025, we reacquired shares of our Class A common stock as follows: Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) That May Yet Be Purchased Under the Plans or Programs September 29, 2025 through November 2, 2025 29,590 $ 12.40 — $ 40.0 November 3, 2025 through November 30, 2025 576,444 8.54 576,318 $ 35.1 December 1, 2025 through December 28, 2025 583,757 8.76 582,310 $ 30.0 Total 1,189,791 $ 8.74 1,158,628 On November 26, 2024, the Company's board of directors approved a share repurchase program for the Company to repurchase shares covering up to an aggregate of $50.0 million of the Company's Class A common stock.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN Assumes Initial Investment of $100 December 31, 2019 – December 31, 2024 2019 2020 2021 2022 2023 2024 Kelly Services, Inc. $ 100.00 $ 91.45 $ 74.94 $ 76.65 $ 99.65 $ 65.24 S&P SmallCap 600 Index $ 100.00 $ 111.29 $ 141.13 $ 118.41 $ 137.42 $ 149.37 S&P 1500 Human Resources and Employment Services Index $ 100.00 $ 100.85 $ 152.43 $ 113.87 $ 121.22 $ 143.93
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN Assumes Initial Investment of $100 December 31, 2020 – December 31, 2025 2020 2021 2022 2023 2024 2025 Kelly Services, Inc. $ 100.00 $ 81.95 $ 83.81 $ 108.96 $ 71.34 $ 46.20 S&P SmallCap 600 Index $ 100.00 $ 126.82 $ 106.40 $ 123.48 $ 134.22 $ 142.30 S&P 1500 Human Resources and Employment Services Index $ 100.00 $ 151.14 $ 112.90 $ 120.20 $ 142.72 $ 121.68 ITEM 6. [RESERVED] 25
Added
Adderley Revocable Trust K had entered into a definitive agreement to sell its 92.2% holding of the Company’s voting Class B common stock. In connection with the Rights Plan, the Company declared a dividend of one right per outstanding share of Class A and Class B common stock to stockholders of record as of 5:15 p.m.
Added
The rights were initially not exercisable and would have become exercisable upon the occurrence of certain events, including if any person or group acquired beneficial ownership of 75% or more of the outstanding shares of Class B common stock. 23 On January 30, 2026, the Company entered into a letter agreement with Hunt and the Board approved Amendment No. 1 to the Rights Plan.
Added
The amendment, among other things, exempted the Hunt purchase from Trust K as a triggering event under the Rights Plan and provided that the Rights Plan would expire immediately prior to the closing of that share transfer. The transfer closed on January 30, 2026, and, accordingly, the Rights Plan is no longer in effect as of that date.
Added
Additional information regarding the Rights Plan and the amendment is available in the Company’s Current Reports on Form 8-K filed January 12, 2026 and January 30, 2026. Holders The number of holders of record of our Class A and Class B common stock were approximately 12,900 and 500, respectively, as of January 30, 2025. Recent Sales of Unregistered Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

85 edited+35 added−72 removed49 unchanged
Biggest changePartially offsetting these impacts was improving gross profit primarily driven by higher revenue volume in Portugal and Germany as well as favorable foreign currency fluctuations. 28 Operating Results By Segment (continued) (Dollars in millions) 2024 2023 2024 vs. 2023 % Change 2022 2023 vs. 2022 % Change SG&A Expenses (excluding depreciation and amortization): Professional & Industrial $ 226.6 $ 260.8 (13.1) % $ 293.5 (11.2) % Science, Engineering & Technology 245.8 196.9 24.9 218.0 (9.7) Education 95.9 92.4 3.7 81.5 13.5 Outsourcing & Consulting 140.2 159.3 (11.9) 154.6 3.0 International — 122.0 (100.0) 126.5 (3.4) Corporate expenses 58.4 63.2 (7.5) 32.3 95.5 Consolidated Total $ 766.9 $ 894.6 (14.3) % $ 906.4 (1.3) % 2024 vs. 2023 The decrease in total SG&A expenses excluding depreciation and amortization in P&I includes the impact of restructuring and transformation charges.
Biggest changeInternational reflects the sale of our EMEA staffing operations in January 2024 and the transfer of our Mexico operations to our ETM segment. 30 Operating Results By Segment (continued) (in millions) 2025 2024 2025 to 2024 % Change 2023 2024 to 2023 % Change SG&A Expenses (excluding depreciation and amortization): Enterprise Talent Management $ 373.0 $ 385.9 (3.3)% $ 432.2 (10.7)% Science, Engineering & Technology 247.1 226.7 9.0 184.8 22.7 Education 101.0 95.9 5.3 92.4 3.8 International — — NM 122.0 NM Corporate expenses 53.8 58.4 (7.9) 63.2 (7.6) Consolidated Total $ 774.9 $ 766.9 1.0% $ 894.6 (14.3)% 2025 vs. 2024 The decrease in ETM SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs and performance-based incentive compensation as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year, partially offset by the addition of the Sevenstep business and integration and realignment charges.
We expect our working capital requirements to increase if demand for our services increases. We assess and monitor our liquidity and capital resources globally. We use the Cash Pool, intercompany loans, dividends, capital contributions, redemptions and local lines of credit to meet funding needs and allocate our capital resources among our various subsidiaries.
We expect our working capital requirements to increase if demand for our services increases. We assess and monitor our liquidity and capital resources globally. We use the Cash Pool, intercompany loans, dividends, capital contributions, and local lines of credit to meet funding needs and allocate our capital resources among our various subsidiaries.
Actual results may differ materially from any forward-looking statements contained herein, and we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations. Certain risk factors are discussed more fully under “Risk Factors” in Part I, Item 1A of this report.
Actual results may differ materially from any forward-looking statements contained herein and we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations. Certain risk factors are discussed more fully under “Risk Factors” in Part I, Item 1A of this report.
Details of our debt facilities as of the 2024 year end are contained in the Debt footnote in the notes to our consolidated financial statements. We repurchased $10.0 million of the Company's Class A common stock in fiscal 2024 pursuant to the $50.0 million share repurchase program, which was approved by the Company's board of directors in November 2024.
Details of our debt facilities as of the 2025 year end are contained in the Debt footnote in the notes to our consolidated financial statements. We repurchased $10.0 million of our Class A common stock in fiscal 2025 pursuant to the $50.0 million share repurchase program, which was approved by our board of directors in November 2024.
We also review the ratings and holdings of our money market funds and other investment vehicles regularly to ensure high credit quality and access to our invested cash. 36 Contractual Obligations and Commercial Commitments In addition to our discussion of liquidity and capital resources, consideration should also be given to the following contractual obligations: • Long-term debt - The Company maintains a revolving credit facility and securitization facility as discussed above in Liquidity.
We also review the ratings and holdings of our money market funds and other investment vehicles regularly to ensure high credit quality and access to our invested cash. 36 Contractual Obligations and Commercial Commitments In addition to our discussion of liquidity and capital resources, consideration should also be given to the following contractual obligations: • Long-term debt - We maintain a revolving credit facility and securitization facility as discussed above in Liquidity.
As our cash balances build, we tend to pay down debt as appropriate, unless it is needed for organic or inorganic investments that align with our overall growth strategy. Conversely, when working capital needs grow, we tend to use corporate cash and cash available in the global cash pooling arrangement (the "Cash Pool") first, and then access our borrowing facilities.
As our cash balances build, we tend to pay down debt as appropriate, unless it is needed for organic or inorganic investments that align with our overall growth strategy. Conversely, when working capital needs grow, we tend to use corporate cash and cash available in the global cash pooling arrangement (the “Cash Pool”) first, and then access our borrowing facilities.
Further details regarding these facilities, including terms, rates, and conditions, can be found in the Debt footnote in the notes to our consolidated financial statements. • Leases - The Company has operating leases for headquarters and field offices and various equipment. Our leases generally have remaining lease terms of one year to 10 years.
Further details regarding these facilities, including terms, rates and conditions, can be found in the Debt footnote in the notes to our consolidated financial statements. • Leases - We have operating leases for headquarters and field offices and various equipment. Our leases generally have remaining lease terms of one year to 10 years.
A total of $40.0 million remains available under the share repurchase program as of year-end 2024. We monitor the credit ratings of our banking partners on a regular basis and have regular discussions with them. Based on our reviews and communications, we believe the risk of one or more of our banks not being able to honor commitments is insignificant.
A total of $30.0 million remains available under the share repurchase program as of year-end 2025. We monitor the credit ratings of our banking partners on a regular basis and have regular discussions with them. Based on our reviews and communications, we believe the risk of one or more of our banks not being able to honor commitments is insignificant.
Dividends paid per common share were $0.30 in 2024 and 2023 and $0.275 in 2022. Payments of dividends are restricted by the financial covenants contained in our debt facilities. Details of this restriction are contained in the Debt footnote in the notes to our consolidated financial statements.
Dividends paid per common share were $0.30 in 2025, 2024 and 2023. Payments of dividends are restricted by the financial covenants contained in our debt facilities. Details of this restriction are contained in the Debt footnote in the notes to our consolidated financial statements.
We periodically review our foreign subsidiaries’ cash balances and projected cash needs. As part of those reviews, we may identify cash that we feel should be repatriated to optimize the Company’s overall capital structure. As of year-end 2024, these reviews have not resulted in specific plans to repatriate a majority of our international cash balances.
We periodically review our foreign subsidiaries’ cash balances and projected cash needs. As part of those reviews, we may identify cash that we feel should be repatriated to optimize our overall capital structure. As of year-end 2025, these reviews have not resulted in specific plans to repatriate a majority of our international cash balances.
Excluding the impact from the acquisition, expenses decreased 9.8% from the prior year primarily due to lower shared service costs which are included in other segment expenses and lower direct salaries reflecting the response to lower revenue volume compared to the prior year, as well as the impact of transformation-related actions.
Excluding the impact from the acquisition, expenses decreased 10.3% from the prior year primarily due to lower shared service costs which are included in other segment expenses and lower direct salaries reflecting the response to lower revenue volume compared to the prior year, as well as the impact of transformation-related actions.
Included in cash used for investing activities in 2024 is $431.9 million of cash used for the acquisition of MRP in June 2024 and CTC in November 2024, net of cash received, $11.1 million of cash used for capital expenditures, partially offset by $77.1 million of proceeds from the sale of the EMEA staffing operations, net of cash disposed.
Included in cash used for investing activities in 2024 was $431.9 million of cash used for the acquisition of MRP in May 2024 and CTC in November 2024, net of cash received, $11.1 million of cash used for capital expenditures, partially offset by $77.1 million of proceeds from the sale of the EMEA staffing operations, net of cash disposed.
Throughout 2024 and as of the 2024 year end, we met the debt covenants related to our revolving credit facility and securitization facility. At year-end 2024, we had additional unsecured, uncommitted short-term local credit facilities totaling $3.1 million, under which we had no borrowings.
Throughout 2025 and as of the 2025 year end, we met the debt covenants related to our revolving credit facility and securitization facility. At year-end 2025, we had additional unsecured, uncommitted short-term local credit facilities totaling $3.2 million, under which we had no borrowings.
If current expectations of future revenue and profit margins are not met, or if market factors outside of our control change significantly, including discount rate, then the goodwill of the MRP reporting unit may be impaired in the future, resulting in goodwill impairment charges.
However, if current expectations of future revenue and profit margins are not met, or if market factors outside of our control change significantly, including discount rate, then the goodwill of our reporting units may be impaired in the future, resulting in goodwill impairment charges.
At year-end 2024 and 2023, total goodwill amounted to $304.2 million and $151.1 million, respectively. See the Goodwill and Intangible Assets footnote in the notes to our consolidated financial statements for more information. Litigation Kelly is subject to legal proceedings, investigations and claims arising out of the normal course of business.
At year-end 2025 and 2024, total goodwill amounted to $202.1 million and $304.2 million, respectively. See the Goodwill and Intangible Assets footnote in the notes to our consolidated financial statements for more information. 40 Litigation Kelly is subject to legal proceedings, investigations and claims arising out of the normal course of business.
Revenue from outcome-based services decreased 1.4% due to lower demand for our call-center solutions, partially offset by higher revenue from other specialties. The increase in SET revenue from services was driven by the acquisition of MRP in May 2024.
Revenue from outcome-based services decreased 0.9% due to lower demand for our call-center solutions, partially offset by higher revenue from other specialties. The increase in SET revenue from services was driven by the acquisition of MRP in May 2024.
We may first use a qualitative assessment ("step zero") for the annual impairment test if we have determined that it is more likely than not that the fair value for one or more reporting units is greater than their carrying value.
We may first use a qualitative assessment (“step zero”) for the annual impairment test if we have determined that it is more likely than not that the fair value for one or more reporting units is greater than their carrying value.
Further details can be found in the Summary of Significant Accounting Policies footnote in the notes to our consolidated financial statements. • Accrued retirement benefits - The Company provides nonqualified retirement plans for officers and certain other employees.
Further details can be found in the Summary of Significant Accounting Policies footnote in the notes to our consolidated financial statements. • Accrued retirement benefits - We provide nonqualified retirement plans for officers and certain other employees.
In comparison to the prior year, the gross profit rate decreased 20 basis points primarily due to declines in permanent placement revenue and business mix which were partially offset by lower employee-related costs. SET gross profit increased resulting from the acquisition of MRP, partially offset by the decrease in revenue volume in other components of the segment.
In comparison to the prior year, the gross profit rate decreased 70 basis points primarily due to changes in business mix and lower permanent placement revenue, partially offset by lower employee-related costs. SET gross profit increased resulting from the acquisition of MRP, partially offset by the decrease in revenue volume in other components of the segment.
The total company discussion that follows focuses on 2024 results compared to 2023.
The total company discussion that follows focuses on 2025 results compared to 2024.
See our Leases footnote in the notes to our consolidated financial statements for further information. • Accrued workers compensation - The Company has a combination of insurance and self-insurance contracts in the U.S. under which it bears the first $1.0 million of risk per accident.
See the Lease footnote in the notes to our consolidated financial statements for further information. • Accrued workers compensation - We have a combination of insurance and self-insurance contracts in the U.S. under which it bears the first $1.0 million of risk per accident.
If we elect to forgo the qualitative assessment for a reporting unit, goodwill is tested for impairment by comparing the estimated fair value of a reporting unit to its carrying value ("step one").
If we elect to forgo the qualitative assessment for a reporting unit, goodwill is tested for impairment by comparing the estimated fair value of a reporting unit to its carrying value (“step one”).
The gross profit rate increased 120 basis points due to the acquisition of MRP which generates higher gross profit rates. This impact was partially offset by a 40 basis point decrease in the gross profit rate in other components of SET reflecting business mix and lower permanent placement fees, partially offset by lower employee-related costs.
The gross profit rate increased 80 basis points due to the acquisition of MRP, which generates higher gross profit rates. This impact was partially offset by a 60 basis point decrease in the gross profit rate in other components of SET reflecting changes in business mix and lower permanent placement revenue, partially offset by lower employee-related costs.
As a measure of sensitivity of the fair value for the MRP reporting unit, while holding all other assumptions constant, an increase in the discount rate of 75 basis points or a decrease of 75 basis points in the revenue growth rate assumptions for each forecasted period used to determine the fair value of the reporting unit would not result in an impairment of goodwill.
As a measure of sensitivity of the fair value for the three reporting units tested in 2025, while holding all other assumptions constant, an increase in the discount rate of 100 basis points or a decrease of 100 basis points in the revenue growth rate assumptions for each forecasted period used to determine the fair value of the reporting unit would not result in an impairment of goodwill.
The accrual for workers’ compensation, net of related receivables which are included in prepaid expenses and other current assets and other assets in the consolidated balance sheet, was $44.4 million and $43.6 million at year-end 2024 and 2023, respectively.
The accrual for workers’ compensation, net of related receivables which are included in prepaid expenses and other current assets and other assets in the consolidated balance sheet, was $46.9 million and $44.4 million at year-end 2025 and 2024, respectively.
SG&A expenses in 2024 also include $17.9 million of transaction-related costs arising from the sale of our EMEA staffing operations and acquisition of MRP, $10.0 million of integration costs related to initiatives to integrate MRP and aligning Company processes and technology, and $2.3 million of executive transition charges.
Included in SG&A expenses in 2024 were $17.9 million of transaction costs arising from the sale of our EMEA staffing operations and acquisition of MRP, $10.0 million of integration costs related to initiatives to integrate MRP and aligning Company processes and technology, $6.1 million of restructuring and transformation costs and $2.3 million of executive transition charges.
Excluding the acquisition, revenue from services decreased 4.5%, primarily due to declines in hours volume in our staffing specialties, partially offset by higher bill rates. Excluding the acquisition, revenues from outcome-based services decreased 5.5%. The increase in Education revenue from services reflects increased demand for our services as compared to a year ago.
Excluding the acquisition, revenue from services decreased 6.6%, primarily due to lower demand in our staffing specialties, partially offset by higher bill rates. Excluding the acquisition, revenues from outcome-based services decreased 6.3%. The increase in Education revenue from services reflects increased demand for our services as compared to a year ago.
As of December 29, 2024, the value of our non-cancelable unconditional purchase obligations is $72.5 million, with $34.5 million expected to be paid within the next 12 months. 37 Critical Accounting Estimates We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States.
As of December 28, 2025, the value of our non-cancelable purchase obligations is $61.5 million, with $44.0 million expected to be paid within the next 12 months. 37 Critical Accounting Estimates We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States.
For a discussion of total company 2023 results compared to 2022, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed on February 20, 2024.
For a discussion of total company 2024 results compared to 2023, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 29, 2024, filed on February 13, 2025.
Gross profit for the Education segment increased on higher revenue volume. The gross profit rate decreased 90 basis points due primarily to customer mix, lower permanent placement fees and higher employee-related costs. OCG gross profit decreased with a decrease in the gross profit rate.
Gross profit for the Education segment increased on higher revenue volume. The gross profit rate decreased 90 basis points due primarily to changes in business mix, lower permanent placement revenue and higher employee-related costs.
As of December 29, 2024, the accrual for workers' compensation claims, net of related receivables, was $44.4 million, with $19.0 million payable within the next 12 months. Management utilizes actuarial methods to estimate the future cash payments for these claims, including an allowance for incurred-but-not-reported claims.
As of December 28, 2025, the accrual for workers' compensation claims, net of related receivables, was $46.9 million, with $20.9 million payable within the next 12 months. Management utilizes actuarial methods to estimate the future cash payments for these claims, including an allowance for incurred-but-not-reported claims.
At year-end 2024 and 2023, the gross accrual for litigation costs amounted to $1.5 million and $6.4 million, of which $1.5 million was held for sale, respectively, which is included in accounts payable and accrued liabilities and in accrued workers’ compensation and other claims in the consolidated balance sheet.
At year-end 2025 and 2024, the gross accrual for litigation costs amounted to $2.8 million and $1.5 million, respectively, which is included in accounts payable and accrued liabilities and in accrued workers’ compensation and other claims in the consolidated balance sheet.
Included in cash used for investing activities in 2023 is $15.3 million of cash used for capital expenditures, partially offset by $2.0 million for the receipt of the final payment in connection with an investment that was sold in 2021.
Included in cash used for investing activities in 2023 is $15.3 million of cash used for capital expenditures, partially offset by $2.0 million for the receipt of the final payment in connection with an investment that was sold in 2021. Capital expenditures in 2025, 2024 and 2023 primarily related to our IT infrastructure and technology programs.
The change in other income (expense), net is primarily the result of an increase in interest expense related to the long-term debt taken on in 2024 in conjunction with the acquisition of MRP.
The change in other income (expense), net is primarily the result of an increase in interest expense related to the long-term debt taken on in 2024 in conjunction with the acquisition of MRP. Income tax expense was $175.3 million in 2025 compared to an income tax benefit of $21.3 million in 2024.
Debt-to-total capital (total debt reported in the consolidated balance sheet divided by total debt plus stockholders’ equity) is a common ratio to measure the relative capital structure and leverage of the Company. Our ratio of debt-to-total capital was 16.2% at year-end 2024.
Debt-to-total capital (total debt reported in the consolidated balance sheet divided by total debt plus stockholders’ equity) is a common ratio to measure our relative capital structure and leverage.
The increase in total SG&A expenses excluding depreciation and amortization in Education is primarily due to increased direct salaries and other segment expenses as revenue levels increased and were partially offset by the impact of transformation-related actions.
The increase in total SG&A expenses excluding depreciation and amortization in Education is primarily due to increased direct salaries and other segment expenses as revenue levels increased and were partially offset by the impact of transformation-related actions. International reflects the sale of our EMEA staffing operations in January 2024 and the transfer of our Mexico operations to our ETM segment.
As a result of the quantitative and qualitative assessments, the Company determined goodwill was not impaired as of year-end 2023. 40 We completed our annual impairment test for all reporting units with goodwill in the fourth quarter for the fiscal year ended 2022. We performed a step one quantitative test for the Softworld and PTS reporting units.
The remaining goodwill balance for the Softworld reporting unit was $38.5 million as of year-end 2024. We completed our annual impairment test for all reporting units with goodwill in the fourth quarter for the fiscal year ended 2023 and as a result of the quantitative and qualitative assessments performed, we determined goodwill was not impaired as of year-end 2023.
As of December 29, 2024, the value of our obligations under these plans are $260.5 million, with $20.8 million payable within the next 12 months. The timing of payments related to the plans vary based on individual elections and specific plan provisions.
As of December 28, 2025, the value of our obligations under these plans are $289.3 million, with $25.6 million payable within the next 12 months. The timing of payments related to the plans vary based on individual elections and specific plan provisions.
Science, Engineering & Technology 23.6 22.8 0.8 23.5 (0.7) Education 14.4 15.3 (0.9) 15.8 (0.5) Outsourcing & Consulting 31.2 36.0 (4.8) 36.3 (0.3) International 0.0 14.8 (14.8) 14.9 (0.1) Consolidated Total 20.4 % 19.9 % 0.5 pts. 20.4 % (0.5) pts. 2024 vs. 2023 Gross profit for the P&I segment decreased on lower revenue volume.
Science, Engineering & Technology 25.3 25.6 (0.3) 25.4 0.2 Education 14.5 14.4 0.1 15.3 (0.9) International — — — 14.8 (14.8) Consolidated Total 20.1 % 20.4 % (0.3) pts. 19.9 % 0.5 pts. 2025 vs. 2024 Gross profit for the ETM segment decreased on lower revenue volume.
Financing Activities In 2024, we generated $214.8 million of cash for financing activities, as compared to using $59.6 million in 2023 and using $50.6 million in 2022.
Financing Activities In 2025, we used $161.1 million of cash for financing activities, as compared to generating $214.8 million in 2024 and using $59.6 million in 2023.
At year-end 2024, we had $110.0 million of available capacity on our $150.0 million revolving credit facility and $4.5 million of available capacity on our $250.0 million securitization facility. The revolving credit facility carried $40.0 million of long-term borrowings on the term benchmark line of credit.
At year-end 2025, we had $150.0 million of available capacity on our $150.0 million revolving credit facility and $105.5 million of available capacity on our $250.0 million securitization facility. The revolving credit facility carried no long-term borrowings on the floating or term benchmark lines of credit.
Different assumptions of the anticipated future results and growth from our business could result in an impairment charge, which would decrease operating income and result in lower asset values on our consolidated balance sheet.
Different assumptions of the anticipated future results and growth from our business could result in an impairment charge, which would decrease operating income and result in lower asset values on our consolidated balance sheet. We completed our annual impairment test for all reporting units with goodwill in the fourth quarter of 2025.
As of December 29, 2024, we have lease payment obligations of $76.1 million, with $15.5 million payable within the next 12 months.
As of December 28, 2025, we have lease payment obligations of $67.7 million, with $15.1 million payable within the next 12 months.
Conversely, when economic activity slows, working capital requirements may substantially decrease and operating cash flows increase. Such increases dissipate over time if the economic downturn continues for an extended period.
Since receipts from customers lag payroll payments to temporary employees, working capital requirements increase and operating cash flows may decrease substantially in periods of growth. Conversely, when economic activity slows, working capital requirements may substantially decrease and operating cash flows increase. Such increases dissipate over time if the economic downturn continues for an extended period.
NM (not meaningful) in the following tables is used in place of percentage changes where: the change is in excess of 500%, the change involves a comparison between earnings and loss amounts, or the comparison amount is zero. 23 Results of Operations Total Company (Dollars in millions) 2024 2023 % Change Revenue from services $ 4,331.8 $ 4,835.7 (10.4) % Gross profit 882.6 961.4 (8.2) SG&A expenses excluding restructuring, depreciation, and amortization 760.8 856.0 (11.1) Restructuring charges 6.1 38.6 (84.2) Total SG&A expenses excluding depreciation and amortization 766.9 894.6 (14.3) Depreciation and amortization 51.5 40.1 28.2 Total SG&A expenses 818.4 934.7 (12.4) Goodwill impairment charge 72.8 — NM Asset impairment charge 13.5 2.4 451.8 Gain on sale of assets (5.4) — NM Gain on sale of EMEA staffing operations (1.6) — NM Earnings (loss) from operations (15.1) 24.3 NM Other income (expense), net (6.8) 0.6 NM Earnings (loss) before taxes (21.9) 24.9 NM Income tax benefit (21.3) (11.5) (84.1) Net earnings (loss) $ (0.6) $ 36.4 NM % Gross profit rate 20.4 % 19.9 % 0.5 pts.
NM (not meaningful) in the following tables is used in place of percentage changes where: the change is in excess of 500%, the change involves a comparison between earnings and loss amounts, or the comparison amount is zero. 26 Results of Operations Total Company (in millions) 2025 2024 % Change Revenue from services $ 4,250.9 $ 4,331.8 (1.9)% Gross profit 853.0 882.6 (3.4) SG&A expenses excluding integration, realignment, restructuring charges, and depreciation and amortization 747.1 750.8 (0.5) Integration, realignment and restructuring charges 27.8 16.1 72.7 Total SG&A expenses excluding depreciation and amortization 774.9 766.9 1.0 Depreciation and amortization 51.0 51.5 (1.0) Total SG&A expenses 825.9 818.4 0.9 Goodwill impairment charge 102.0 72.8 40.1 Asset impairment charge — 13.5 NM Gain on sale of EMEA staffing operations (4.1) (1.6) (156.3) Gain on sale of assets (1.0) (5.4) 81.5 Earnings (loss) from operations (69.8) (15.1) (362.3) Other income (expense), net (9.0) (6.8) (32.4) Earnings (loss) before taxes (78.8) (21.9) (259.8) Income tax expense (benefit) 175.3 (21.3) NM Net earnings (loss) $ (254.1) $ (0.6) NM Gross profit rate 20.1% 20.4% (0.3) pts.
If the carrying value of the net assets assigned to a reporting unit exceeds the estimated fair value of a reporting unit, goodwill is deemed impaired and is written down to the extent of the difference. For the step one quantitative test, we determine the fair value of our reporting units using the income approach.
If the carrying value of the net assets assigned to a reporting unit exceeds the estimated fair value of a reporting unit, goodwill is deemed impaired and is written down to the extent of the difference.
Assumptions and estimates about future cash flows and discount rates are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts.
They can be affected by a variety of factors, including external factors such as industry and economic trends and internal factors such as changes in our business strategy and our internal forecasts.
This decrease primarily reflects lower legal settlement costs and employee compensation costs. Transaction, integration and executive transition costs were $21.5 million and restructuring and transformation charges were $5.1 million in 2024.
The decrease in Corporate expenses includes the impact of transaction, integration and executive transition costs. Excluding these impacts, expenses decreased 12.6%. This decrease primarily reflects lower legal settlement costs and employee 31 compensation costs. Transaction, integration and executive transition costs were $21.5 million and restructuring and transformation charges were $5.1 million in 2024.
We completed our annual impairment test for all reporting units with goodwill in the fourth quarter for the fiscal year ended 2023. We performed a step one quantitative test for the Softworld and PTS reporting units.
We completed our annual impairment test for all reporting units with goodwill in the fourth quarter for the fiscal year ended 2024.
Excluding the impact of the sale and acquisition, as well as transaction, integration, restructuring and executive transition charges—and excluding depreciation and amortization—SG&A expenses decreased 8.5% primarily due to structural workforce reductions as part of our transformation initiatives, as well as proactive resource management and lower variable, performance-based incentive compensation expenses in response to lower revenue volume.
Excluding the impact of the acquisition, as well as transaction, integration, restructuring and executive transition charges—and excluding depreciation and amortization—SG&A expenses decreased 4.7% primarily due to momentum on structural and demand-driven expense optimization initiatives and lower variable, performance-based incentive compensation expenses in response to lower revenue volume.
Permanent placement revenue has higher gross profit due to very low direct costs of services and thus has a disproportionate impact on gross profit rates.
Permanent placement revenue has higher gross profit due to very low direct costs of services and thus has a disproportionate impact on gross profit rates. The gross profit rate decreased in the ETM and SET segments and had a slight increase in the Education segment.
Our working capital requirements are primarily generated from temporary employee payroll, which is generally paid weekly or monthly, and customer accounts receivable, which is generally outstanding for longer periods. Since receipts from customers lag payroll payments to temporary employees, working capital requirements increase and operating cash flows may decrease substantially in periods of growth.
Our working capital requirements are primarily generated from temporary employee payroll, which is generally paid weekly or monthly and customer accounts receivable, which is generally invoiced to customers weekly or monthly and is outstanding for longer periods.
The remaining goodwill balance for the Softworld reporting unit was $38.5 million as of year-end 2024. Our quantitative analyses used significant assumptions, including: expected future revenue growth rates, profit margins and discount rate. Although we believe the assumptions and estimates we have made are reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results.
Our analysis used significant assumptions by reporting unit, including: expected future revenue growth rates, profit margins and discount rates. 39 Although we believe the assumptions and estimates we have made are reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results.
See the Fair Value Measurements footnote and the Debt footnote in the notes to our consolidated financial statements for more details. 35 Together, the revolving credit and securitization facilities provide the Company with committed funding capacity that may be used for general corporate purposes subject to financial covenants and restrictions.
Together, the revolving credit and securitization facilities provide us with committed funding capacity that may be used for general corporate purposes subject to financial covenants and restrictions.
Excluding restructuring and transformation charges of $0.3 million in 2024 and $6.7 million in 2023, the decrease is 10.9%. The decrease excluding restructuring and transformation charges is primarily due to lower direct salaries as a result of cost management in response to lower revenue volume compared to the prior year, as well as the impact of transformation-related actions.
Excluding the impact of these items, expenses decreased by 10.5% primarily due to lower direct salaries as a result of cost management in response to lower revenue volume compared to the prior year, as well as the impact of transformation-related actions.
This decrease reflects lower permanent placement income and higher employee-related costs, partially offset by favorable business mix. SET gross profit decreased on lower revenue volume. The gross profit rate decreased 70 basis points due to lower permanent placement revenues, partially offset by favorable business mix. 27 Gross profit for the Education segment increased on higher revenue volume.
Gross profit for the Education segment increased on higher revenue volume. The gross profit rate increased 10 basis points due to lower employee-related costs, partially offset by changes in business mix. 2024 vs. 2023 Gross profit for the ETM segment decreased on lower revenue volume.
The gross profit rate increased 0.5 basis points to 20.4% and was favorably impacted by the sale of our EMEA staffing operations and the acquisition of MRP. Excluding the impact from the sale and the acquisition, the gross profit rate declined 110 basis points. The decrease is due primarily to business mix and a decrease in permanent placement revenue.
The gross profit rate decreased 30 basis points to 20.1% and was favorably impacted by the acquisition of MRP. Excluding the acquisition, the gross profit rate declined 70 basis points. The decrease is due primarily to changes in business mix, higher employee-related costs and lower permanent placement revenue.
Corporate expenses decreased year-over-year primarily due to lower transformation-related charges, partially offset by higher transaction-related expenses from the sale of our EMEA staffing operations and integration costs related to the acquisition of MRP. 2023 vs. 2022 P&I reported profit decreased versus the prior year primarily due to lower revenue and gross profit, partially offset by lower SG&A expenses.
Corporate expenses decreased over the prior year primarily driven by lower employee-related costs and transaction costs, partially offset by an increase in integration and realignment charges in 2025. 2024 vs. 2023 ETM reported profit increased versus the prior year due primarily to lower SG&A expenses, partially offset by lower revenue and gross profit.
The increase excluding these charges is primarily due to higher legal settlement expenses. 30 Operating Results By Segment (continued) (Dollars in millions) 2024 2023 2024 vs. 2023 % Change 2022 2023 vs. 2022 % Change Business Unit Profit (Loss) Professional & Industrial $ 34.7 $ 16.0 116.1 % $ 19.6 (17.9) % Science, Engineering & Technology 17.0 75.0 (77.4) 79.0 (5.0) Education 43.9 36.3 21.3 18.8 93.1 Outsourcing & Consulting 5.7 2.2 152.4 (26.0) NM International — (1.9) (100.0) 5.3 NM Business Unit Profit (Loss) 101.3 127.6 (20.7) 96.7 32.0 Corporate (58.4) (63.2) (7.5) (32.3) 95.5 Asset impairment charge (13.5) — NM — NM Gain on sale of EMEA staffing operations 1.6 — NM — NM Loss on disposal — — NM (18.7) NM Gain (loss) on sale of assets 5.4 — NM 6.2 NM Depreciation and amortization (51.5) (40.1) 28.2 (37.1) 8.1 Consolidated Total Earnings from Operations $ (15.1) $ 24.3 NM % $ 14.8 65.0 % 2024 vs. 2023 P&I reported profit increased versus the prior year due primarily to lower SG&A expenses, partially offset by lower revenue and gross profit.
Restructuring and transformation charges were $19.9 million and transaction costs were $6.9 million in 2023. 32 Operating Results By Segment (continued) (in millions) 2025 2024 2025 to 2024 % Change 2023 2024 to 2023 % Change Business Unit Profit (Loss) Enterprise Talent Management $ 19.8 $ 59.0 (66.4)% $ 31.2 89.1% Science, Engineering & Technology (35.9) (1.6) NM 62.0 NM Education 46.0 43.9 4.8 36.3 20.9 International — — NM (1.9) NM Business Unit Profit (Loss) 29.9 101.3 (70.5) 127.6 (20.6) Corporate (53.8) (58.4) (7.9) (63.2) (7.6) Asset impairment charge — (13.5) NM — NM Gain on sale of EMEA staffing operations 4.1 1.6 156.3 — NM Gain on sale of assets 1.0 5.4 (81.5) — NM Depreciation and amortization (51.0) (51.5) (1.0) (40.1) 28.4 Consolidated Total Earnings (loss) from Operations $ (69.8) $ (15.1) (362.3)% $ 24.3 NM 2025 vs. 2024 ETM reported profit decreased versus the prior year primarily due to lower revenue and gross profit with lower demand among certain large customers, partially offset by lower SG&A expenses.
The goodwill impairment charge in 2024 relates to our Softworld reporting unit which delivers technology staffing and workforce services and is included in the SET segment. Changes in internal projections of financial performance due to continued challenging market conditions resulted in a lower estimated fair value for the reporting unit and an impairment charge of $72.8 million.
Changes in internal projections of financial performance due to continued challenging market conditions resulted in a lower estimated fair value for the reporting unit and an impairment charge of $102.0 million and $72.8 million for 2025 and 2024, respectively. The impairment of assets in 2024 represents the impairment of certain right-of-use (“ROU”) assets related to our leased headquarters facility.
The cash generated from financing activities is driven by the net borrowings of $239.4 million on the Company's credit facilities in connection with the acquisition of MRP and represents the primary driver of the change in cash from 2023 related to financing activities, in addition to a decrease in the purchase of treasury stock.
The cash used from financing activities is driven by net payments of $137.5 million in 2025 compared to 34 net proceeds of $239.4 million in 2024 on our credit facilities in connection with the acquisition of MRP. The acquisition of MRP represents the primary driver of the change in cash from 2024.
Corporate expenses increased in 2023 from 2022 primarily due to restructuring and transformation charges of $23.0 million and transaction costs of $3.8 million. 32 Results of Operations Financial Condition Historically, we have financed our operations through cash generated by operating activities and access to credit markets.
Corporate expenses decreased year-over-year primarily due to lower transformation-related charges, partially offset by higher transaction-related expenses from the sale of our EMEA staffing operations and integration costs related to the acquisition of MRP. 33 Results of Operations Financial Condition Historically, we have financed our operations through cash generated by operating activities and access to credit markets.
Compared to 2023 and excluding the impact from the sale and acquisition, revenue from staffing services increased 1.7% and revenue from outcome-based services decreased 3.2%. In addition, revenue from talent solutions increased 3.0% and permanent placement revenue decreased 24.2% from the prior year, excluding the impact from the sale and the acquisition.
Excluding the impact from the acquisition, revenue from services decreased 6.2%. Compared to last year and excluding the impact from the acquisition, revenue from staffing services decreased 6.0% and revenue from outcome-based services decreased 9.4% from the prior year.
Accounts payable and accrued liabilities was $613.8 million at year-end 2024, and decreased $32.3 million from year-end 2023 as a result of a decrease in supplier payables related to our MSP business. Our working capital position (total current assets less total current liabilities), was $539.0 million at year-end 2024 including the impact of our acquisition of MRP of $71.2 million.
Our working capital position (total current assets less total current liabilities), was $446.5 million at year-end 2025 and $539.0 million for 2024, including the impact of our 2024 acquisition of MRP of $71.2 million.
SET reported profit in 2024 includes a $72.8 million goodwill impairment charge related to Softworld and $12.8 million of business unit profit from the acquisition of MRP. Excluding the goodwill impairment and acquisition impacts, the decrease in profit was essentially flat to prior year. Education reported profit increased versus the prior year primarily due to higher revenue and gross profit.
Excluding the goodwill impairment and acquisition impacts, the decrease in profit was essentially flat to prior year. Education reported profit increased versus the prior year primarily due to higher revenue and gross profit. International reflects the sale of our EMEA staffing operations in January 2024 and the transfer of our Mexico operations to our ETM segment.
Increased demand for our services reflects new customer wins and an increased fill rate related to demand of existing customers. The increase in OCG revenue from services was driven by increased demand in payroll process outsourcing ("PPO"), partially offset by declines in RPO and MSP.
Increased demand for our services reflects new customer wins and an increased fill rate related to demand of existing customers.
SET reported profit decreased versus the prior year primarily due to declines in revenue and gross profit, partially offset by lower SG&A expenses.
Education reported profit increased versus the prior year primarily driven by higher revenue and gross profit driven by the impact of higher fill rates and bill rates, partially offset by an increase in SG&A expenses.
As further described below, during 2024, we generated $26.9 million of cash from operating activities, used $361.6 million of cash for investing activities and generated $214.8 million of cash from financing activities. Operating Activities In 2024, we generated $26.9 million of net cash from operating activities, as compared to generating $76.7 million in 2023 and using $76.3 million in 2022.
Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash totaled $37.7 million at year-end 2025, compared to $45.6 million at year-end 2024. As further described below, during 2025, we generated $122.6 million of cash from operating activities, generated $22.3 million of cash from investing activities and used $161.1 million of cash for financing activities.
Working capital decreased from 2023 primarily due to lower cash balances. The current ratio (total current assets divided by total current liabilities) was 1.7 at year-end 2024 and 1.6 at year-end 2023. Investing Activities In 2024, we used $361.6 million of net cash for investing activities, compared to using $14.1 million in 2023 and generating $167.5 million in 2022.
The decrease in working capital is due to lower trade accounts receivable from reduced revenue and the cash collected during the year was used to pay down debt balances. The current ratio (total current assets divided by total current liabilities) was 1.5 at year-end 2025 and 1.7 at year-end 2024.
We had no debt outstanding at year-end 2023. 34 Liquidity We expect to meet our ongoing short-term and long-term cash requirements principally through cash generated from operations, available cash and equivalents, securitization of customer receivables and committed unused credit facilities.
Our ratio of debt-to-total capital was 9.4% at year-end 2025 and 16.2% at year-end 2024 . 35 Liquidity We expect to meet our ongoing short-term and long-term cash requirements principally through cash generated from operations, available cash and equivalents and our credit facilities. Additional funding sources could include additional bank facilities or sale of non-core assets.
The gross profit rate decreased 50 basis points due primarily to lower permanent placement fees and unfavorable customer mix, partially offset by lower employee-related costs. OCG gross profit decreased on lower revenue volume, combined with a decrease in the gross profit rate.
The change in the SET gross profit rate was driven by a 50 basis point decrease reflecting the impact of changes in business mix and higher employee-related costs and a 50 basis point decrease as a result of lower permanent placement revenue, partially offset by a 70 basis point increase due to the MRP acquisition, which generates higher gross profit rates.
The decrease in total SG&A expenses excluding depreciation and amortization in OCG is due primarily to lower direct salaries expense partially offset by the impact of restructuring charges in 2023. Direct salaries declined as a result of lower incentive compensation expense, as well as the result of transformation-related actions.
The decrease in Corporate expenses was primarily driven by lower employee-related costs and transaction costs, partially offset by an increase in integration and realignment charges in 2025 as compared to prior year. 2024 vs. 2023 The decrease in total SG&A expenses excluding depreciation and amortization in ETM includes the impact of restructuring and transformation charges and the impact from the addition of the Sevenstep business.
The decrease in International revenue from services was primarily the result of the sale of our Russian operations in July 2022 and lower volume in several geographies, partially offset by favorable foreign currency fluctuations. 26 Operating Results By Segment (continued) (Dollars in millions) 2024 2023 2024 vs. 2023 Change 2022 2023 vs. 2022 Change Gross Profit: Professional & Industrial $ 261.3 $ 277.1 (5.7) % $ 313.1 (11.5) % Science, Engineering & Technology 335.6 272.0 23.4 297.0 (8.4) Education 139.8 128.7 8.6 100.3 28.4 Outsourcing & Consulting 145.9 163.5 (10.8) 169.6 (3.7) International — 120.1 (100.0) 131.8 (8.8) Consolidated Total $ 882.6 $ 961.4 (8.2) % $ 1,011.8 (5.0) % Gross Profit Rate: Professional & Industrial 17.8 % 18.0 % (0.2) pts. 18.3 % (0.3) pts.
International reflects the sale of our EMEA staffing operations in January 2024 and the transfer of our Mexico operations to our ETM segment. 29 Operating Results By Segment (continued) (in millions) 2025 2024 2025 to 2024 % Change 2023 2024 to 2023 % Change Gross Profit: Enterprise Talent Management $ 392.8 $ 444.9 (11.7)% $ 465.7 (4.5)% Science, Engineering & Technology 313.2 297.9 5.1 246.9 20.7 Education 147.0 139.8 5.2 128.7 8.6 International — — NM 120.1 NM Consolidated Total $ 853.0 $ 882.6 (3.4)% $ 961.4 (8.2)% Gross Profit Rate: Enterprise Talent Management 19.6 % 20.3 % (0.7) pts. 21.0 % (0.7) pts.
Together these changes represent structural shifts in Kelly’s operations and deliver meaningful improvement to the Company’s growth prospects and EBITDA margin profile, which we expect to continue as we move forward in 2025 and beyond. Financial Measures Reported percentage changes were computed based on actual amounts in thousands of dollars.
Structural cost actions, operating model simplification, acquisition integration and portfolio reshaping are expected to support continued improvement in Kelly’s growth prospects and financial profile as we move through 2026 and beyond. Financial Measures Reported percentage changes are computed based on millions. Prior year percent changes were computed based on actual amounts in thousands.
Education reported profit increased versus the prior year primarily due to higher revenue and gross profit, partially offset by higher SG&A expenses. 2023 results also include the impact of first quarter profit of $3.4 million from PTS acquired in May 2022. 31 OCG reported profit in 2023, compared to a loss in 2022.
These results include the impact from the addition of the Sevenstep business. SET reported loss includes an increase in goodwill impairment charges and the impact of the 2024 acquisition of MRP. Excluding the goodwill impairment and acquisition impacts, SET business unit loss increased from the prior year due to lower revenue and gross profit, partially offset by lower SG&A expenses.
We completed the sale of our European staffing operations on January 2, 2024 and on June 12, 2024 announced the sale of the Ayers Group, a division of our OCG segment. We move forward with a streamlined operating model focused on North American staffing and solutions and global Managed Service Provider ("MSP") and recruitment process outsourcing ("RPO") solutions.
Kelly entered 2025 with a simplified operating model concentrated on North American staffing, business process outsourcing (“BPO”) and specialty solutions and global Managed Service Provider (“MSP”) and recruitment process outsourcing (“RPO”) offerings, following the 2024 sale of its European staffing operations and the Ayers Group and acquisition of Motion Recruitment Partners (“MRP”) and Children’s Therapy Center (“CTC”).
The change in cash used for financing activities from 2022 to 2023 was primarily related to the year-over-year change in the purchase of treasury stock, representing a repurchase program for the buyback of the Company's common shares.
The change in cash used for financing activities from 2023 to 2024 was primarily related to a decrease in Class A common stock repurchases. In 2025, w e repurchased $10.0 million of our Class A common stock compared to $10.0 million in shares repurchased in 2024 an d $42.2 million i n 2023.
The decrease is primarily related to the goodwill impairment charge, higher asset impairment charges and the impact of lower revenue compared to the prior year, partially offset by the impact of lower SG&A compared to the prior year, the gain on sale of Ayers Group and the gain on sale of our EMEA staffing operations.
Loss from operations in 2025 totaled $69.8 million, compared to a loss from operations of $15.1 million in 2024. The decrease is primarily related to the goodwill impairment charges, increased costs for integration, realignment and restructuring activities, the impact of lower revenue and gross profits and higher SG&A as compared to the prior year.
Executive Overview While the challenging staffing market dynamics that developed in 2023 continued into 2024, we have remained focused on capturing a greater share of growth where it exists and converting a greater share of our revenue to bottom-line growth by continuing to enhance efficiency and focus across the Company.
We remained focused on capturing a greater share of growth, converting a higher proportion of revenue into bottom-line performance, and positioning Kelly to benefit from an eventual recovery in the staffing environment.
The P&I segment information for 2023 has been recast to conform to the new structure.
In the segment level discussions that follow the total company discussion, the comparative results for 2024 and 2023 have been recast to conform to the new structure.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+1 added−6 removed4 unchanged
Biggest changeA hypothetical fluctuation of 10% of market interest rates would not have had a material impact on 2024 earnings. We are exposed to market risk as a result of our obligation to pay benefits under our nonqualified deferred compensation plan and our related investments in Company-owned variable universal life insurance policies.
Biggest changeWe are exposed to market risk as a result of our obligation to pay benefits under our nonqualified deferred compensation plan and our related investments in Company-owned variable universal life insurance policies. The obligation to employees increases and decreases based on movements in the equity and debt markets.
The obligation to employees increases and decreases based on movements in the equity and debt markets. The investments in mutual funds, as part of the Company-owned variable universal life insurance policies, are designed to mitigate, but not eliminate, this risk with offsetting gains and losses.
The investments in mutual funds, as part of the Company-owned variable universal life insurance policies, are designed to mitigate, but not eliminate, this risk with offsetting gains and losses. 42
Interest Rates We are exposed to interest rate risks through our use of our credit facilities and other local borrowings, when applicable. Following our acquisition of MRP, the Company has long-term borrowings on our credit facilities.
Intercompany transactions which create foreign currency risk include services, royalties, loans, contributions and distributions. Interest Rates We are exposed to interest rate risks through our use of our credit facilities and other local borrowings, when applicable. Following our acquisition of MRP, we have long-term borrowings on our credit facilities.
Removed
Intercompany transactions which create foreign currency risk include services, royalties, loans, contributions and distributions. On November 2, 2023, the Company entered into a foreign currency forward contract with a notional amount of €90.0 million to manage the foreign currency risk associated with the sale of our EMEA staffing operations, which was completed on January 2, 2024.
Added
The 12-month interest rate swap was settled early with the final payment made in June 2025. A hypothetical fluctuation of 10% of market interest rates would not have had a material impact on our operating results or cash flows.
Removed
This contract was not designated as a hedging instrument; therefore, it was marked-to-market and the changes in fair value were recognized in earnings. An unrealized loss of $3.6 million associated with the forward contract was recorded as of year-end 2023.
Removed
A total loss of $2.4 million was realized upon settlement on January 5, 2024; therefore, the Company recorded a gain of $1.2 million in the first quarter of 2024 (see Fair Value Measurements footnote in the notes to our consolidated financial statements for more details).
Removed
On February 8, 2024, the Company entered into a foreign currency forward contract with a notional amount of €17.0 million to manage the foreign currency risk associated with the expected additional proceeds related to the sale of our EMEA staffing operations (see Acquisitions and Dispositions footnote in the notes to our consolidated financial statements).
Removed
The expected proceeds are recorded as a euro-denominated receivable which is remeasured each period. The forward contract was designated as a fair value hedge, with the mark-to-market changes of the forward contract offsetting the mark-to-market changes of the receivable in the gain on sale of EMEA staffing operations in the consolidated statement of earnings.
Removed
In the fourth quarter of 42 2024, the Company settled the contract with a $0.4 million cash payment and recognized a corresponding loss of $0.4 million on the contract. As of year-end 2024, there is no asset or liability related to the forward contract (see Fair Value Measurements footnote in the notes to our consolidated financial statements for more details).

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