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

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Paragraph-level year-over-year comparison of KFORCE 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.

+234 added−220 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-21)

Top changes in KFORCE INC's 2025 10-K

234 paragraphs added · 220 removed · 184 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

61 edited+18 added−13 removed8 unchanged
Biggest changeWe believe this development center, when combined with a strong U.S. sales and delivery capability and a high-quality vendor network, will help us to more fully address the evolving needs of our clients, whether onshore, nearshore or offshore. $1 Billion Total Capital Returned to Shareholders Since 2007 92% Revenue Concentrated in Technology Staffing and Solutions #1 Recognized Brand by Technology Consultants per Staffing Industry Analysts 1962 Year Founded KFRC Listed on New York Stock Exchange 18,000 Consultants Placed Annually Our Technology and Finance and Accounting (“FA”) businesses represent our two reportable segments.
Biggest changeWe believe that combining this offshore capability with our strong U.S. sales and delivery teams and our high-quality vendor network enhances our ability to meet clients’ evolving needs, whether onshore, nearshore or offshore. $1.1 Billion Total Capital Returned to Shareholders Since 2007 93% Revenue Concentrated in Technology Staffing and Solutions #1 Recognized Brand by Technology Consultants per Staffing Industry Analysts 1962 Year Founded KFRC Listed on New York Stock Exchange 17,000 Consultants Placed Annually Our operating results are influenced by several factors, including: • the number of billing days; • seasonal patterns in our clients’ business; • changes in holidays and vacation days taken, which is usually highest in the fourth quarter of each calendar year; and • increased payroll-related costs resulting from the annual reset of certain U.S. state and federal employment taxes at the beginning of each calendar year, which negatively impacts gross profit and overall profitability in the first quarter of each calendar year.
Managed Service Providers (“MSP”) or Vendor Management Organizations (“VMO”) are utilized by certain of our clients for the management and procurement of our services. We do not consider these organizations as a competitive threat. Generally, MSPs and VMOs standardize processes through the use of Vendor Management Systems (“VMS”), which are tools used to aggregate spend and measure supplier performance.
Managed Service Providers (“MSP”) or Vendor Management Organizations (“VMO”) are utilized by many of our clients for the management and procurement of our services. We do not consider these organizations as a competitive threat. Generally, MSPs and VMOs standardize processes through the use of Vendor Management Systems (“VMS”), which are tools used to aggregate spend and measure supplier performance.
From a traditional staff augmentation standpoint, the staffing industry is made up of thousands of companies, most of which are small local firms providing limited service offerings to relatively small local client bases.
From a traditional staffing standpoint, the staffing industry is made up of thousands of companies, most of which are small local firms providing limited service offerings to relatively small local client bases.
We believe that the organic investments that we have made in our solutions capabilities over the last several years has meaningfully expanded Kforce’s total addressable market into the technology solutions space.
We believe that the organic investments that we have made in our solutions capabilities over the last several years has meaningfully expanded Kforce’s total addressable market into the technology services and solutions space.
As we continue to deliver on our solutions engagements with clients and further mature our capabilities in our digital, cloud, data and application engineering practice areas, we would expect our ability to capture an increasing portion of the overall technology solutions market to improve.
As we continue to deliver on our solutions engagements with clients and further mature our capabilities in our digital, cloud, data and AI, and platform engineering practice areas, we would expect our ability to capture an increasing portion of the overall technology services and solutions market to improve.
Bureau of Labor Statistics and SIA, temporary employment figures and trends are important indicators of staffing demand from an economic standpoint. The penetration rate (the percentage of temporary staffing to total employment) decreased to 1.7% in December 2024, from 1.8% in December 2023, while the unemployment rate, increased to 4.1% in December 2024 from 3.7% in December 2023.
Bureau of Labor Statistics and SIA, temporary employment figures and trends are important indicators of staffing demand from an economic standpoint. The penetration rate (the percentage of temporary staffing to total employment) decreased to 1.5% in December 2025, from 1.7% in December 2024, while the unemployment rate, increased to 4.4% in December 2025 from 4.1% in December 2024.
We believe that our competitive advantage lies in a combination of key factors: long-standing client relationships with primarily Fortune 500 and other leading companies; greater focus with more than 90% of our business concentrated in technology staffing and solutions; breadth of service offerings from traditional staffing assignments to solutions engagements; access to qualified and available talent, which allows us to deliver our solutions at scale; and dedicated, tenured and passionate Kforce associates.
We believe that our competitive advantage lies in a combination of factors: long-standing client relationships with primarily Fortune 500 and other leading companies; greater focus with more than 93% of our business concentrated in providing technology staffing and solutions services; breadth of service offerings from traditional staffing assignments to solutions engagements; providing timely access to highly qualified talent, which allows us to deliver our solutions at scale; and dedicated, tenured and passionate associates.
We post our filings, free of charge, at https://investor.kforce.com the same day they are electronically filed with, or furnished to, the SEC, including our annual and quarterly reports on Forms 10-K and 10-Q, current reports on Form 8-K, our proxy statements, and any amendments to those reports or statements.
Availability of Reports and Other Information Our internet address is www.kforce.com. We post our filings, free of charge, at https://investor.kforce.com the same day they are electronically filed with, or furnished to, the SEC, including our annual and quarterly reports on Forms 10-K and 10-Q, current reports on Form 8-K, proxy statements, and any amendments to those reports or statements.
A report based on revenues published by SIA in 2024 indicated that, in the United States, Kforce is among the largest publicly-traded specialty staffing firms, the sixth largest technology temporary staffing firm and the tenth largest finance and accounting temporary staffing firm.
A report based on revenues published by SIA in 2025 indicated that, in the United States, Kforce is among the largest publicly-traded specialty staffing firms and is the sixth largest technology temporary staffing firm.
Therefore, the use of MSPs by our clients has, in certain instances, resulted in gross margin compression, but has also led to incremental client share through our client’s vendor consolidation efforts.
Therefore, the use of MSPs by our clients has, in certain instances, resulted in gross margin compression, but has also led to incremental client share through our client’s vendor consolidation efforts given our reputation for providing superior services.
As the employer, Kforce is responsible for the employer’s share of FICA, federal and state unemployment taxes, workers’ compensation insurance, providing healthcare and retirement plan options, and other direct labor costs relating to our employees. We also provide paid leave for our associates and certain consultants. We have no collective bargaining agreements covering any of our employees.
As the employer of the majority of our consultants, Kforce is responsible for the employer’s share of FICA, federal and state unemployment taxes, workers’ compensation insurance, providing healthcare and retirement plan options, and other direct labor costs relating to our employees. We also provide paid leave for our core associates and certain consultants.
While reports differ in the size of the technology solutions addressable market, IBIS World has indicated it is greater than $700 billion. While the portion that is addressable by Kforce is debatable, we believe that our addressable market is many times greater than the $40 billion for the technology temporary staffing industry. Based on data published by the U.S.
While reports differ in the size of the technology services and solutions addressable market, IBISWorld has indicated it is greater than $750 billion. While the portion that is addressable by Kforce is debatable, we believe that our addressable market is many times greater than the $38 billion for the technology temporary staffing industry. Based on data published by the U.S.
The content on any website referred to in this Form 10-K (including our 2024 Sustainability Report) is not incorporated by reference in this Form 10-K unless expressly noted.
The content on any website referred to in this Form 10-K is not incorporated by reference in this Form 10-K unless expressly noted.
We are intensely focused on continuing to expand our market share of the U.S. technology temporary staffing industry and to further invest in our capability to provide higher level technology services and solutions while also integrating that capability within our overall Technology business.
We continue to focus on expanding our market share of the U.S. technology temporary staffing industry and to further invest in our capability to provide higher level technology services and solutions while also integrating that capability within our overall Technology business.
An increasingly important vehicle to providing cost-effective solutions is the ability to source highly skilled talent outside of the United States. Following a period of comprehensive due diligence, including an executive trip in August 2024 to India, management made the strategic decision to establish a development center in Pune, India.
An increasingly important vehicle to providing cost-effective solutions is the ability to source highly skilled talent outside of the United States. Following a period of comprehensive due diligence, including an executive trip in August 2024 to India, we made the strategic decision to establish an offshore delivery capability in Pune, India referred to as Knowledgeforce India.
Our integrated strategy efforts capitalize on the strong relationships we have with world-class companies by utilizing our existing sales teams, recruiters, consulting solutions professionals, technology practice experts, among other teams within the Firm, to provide higher value engagements that effectively and cost efficiently address our clients’ challenges.
Our integrated strategy initiative seeks to capitalize on the strong relationships we have with world-class companies by utilizing the full breadth of our existing sales teams, recruiters, consulting solutions professionals, and technology practice experts, among other teams within the Firm, to effectively provide higher value engagements to our clients, cost efficiently.
According to the September 2024 SIA report, the technology temporary staffing industry and finance and accounting temporary staffing industry are expected to generate projected revenues of $40 billion and $9 billion, respectively, in 2025. Based on these projected revenues, our current market share is approximately 3%.
According to the September 2025 SIA report, the technology temporary staffing industry and finance and accounting temporary staffing industry are projected to generate revenues of $38 billion and $8 billion, respectively, in 2026. Based on these projected revenues, our market share in our Technology business is approximately 3%.
As the employer of the vast majority of our consultants, Kforce is responsible for the employer’s share of applicable payroll taxes (“FICA”); federal and state unemployment taxes; workers’ compensation insurance; health, welfare and retirement benefits and other direct labor costs.
As the employer of these consultants, we are responsible for the employer’s share of payroll taxes (“FICA”); federal and state unemployment taxes; workers’ compensation insurance; health, welfare and retirement benefits and other direct labor-related costs.
Our core competency is rooted in the ability to identify and provide qualified and highly-skilled consultants to our clients under a spectrum of engagement structures from traditional staff augmentation to delivering technology solutions.
Our core competency is rooted in the ability to identify and provide highly-qualified and highly-skilled consultants to our clients under a spectrum of engagement structures from traditional staffing assignments to project teams responsible for ultimately delivering technology solutions directly to the client.
The strength of the secular drivers of demand for technology accelerated significantly exiting both the Great Recession, with among many others, advancements in mobility and cloud computing, and the 2020 COVID-19 Pandemic, with further digitalization of businesses and the continued focus on Generative AI technologies.
Secular demand drivers for technology accelerated significantly exiting both the Great Recession - with innovations in mobility and cloud computing, among others - and the 2020 COVID-19 Pandemic, which led to widespread digitalization of businesses and a heightened focus on generative AI.
A key ingredient to our overall success in attracting and retaining our consultants is fostering a positive experience for our consultants and offering rewarding assignments with world-class companies. We measure the quality of our service to and support of our consultants using staffing industry benchmarks and net promoter score (“NPS”) surveys conducted by a specialized, independent third-party provider.
A key ingredient to our overall success in attracting and retaining our consultants is fostering a positive overall experience, including meaningful and rewarding assignments with world-class companies. We evaluate the quality of our consultants’ experience through established staffing industry benchmarks and net promoter score (“NPS”) surveys administered by an independent third-party.
Our Technology Business We provide talent solutions to our clients in highly skilled areas including, but not limited to, systems/applications architecture and development (mobility and/or web); data management and analytics; cloud architecture and engineering; business and artificial intelligence (“AI”); machine learning; project and program management; and network architecture and security. 3 Table of Contents Our service offerings have evolved over the years beyond traditional staffing assignments to include solutions-oriented engagements; this evolution was based on the demand we were seeing from our clients.
Our Technology Business We deliver talent solutions to our clients across a range of highly skilled disciplines including, but not limited to, systems and applications architecture and development (mobility and web); data management and analytics; cloud architecture and engineering; business and artificial intelligence (“AI”); machine learning; project and program management; and network architecture and security. 3 Table of Contents Over time, our service offerings have expanded beyond traditional staffing to include solutions-oriented engagements in response to evolving client demand.
The talent solutions we offer our clients in our FA business generally include traditional finance and accounting roles, such as: financial planning and analysis; business intelligence analysis; general accounting; transactional accounting (e.g., payables, billing, cash applications, receivables, etc.); business and cost analysis; and taxation and treasury.
Our FA talent solutions primarily support traditional finance and accounting roles, including: financial planning and analysis; business intelligence analysis; general accounting; transactional accounting (such as payables, billing, cash applications and receivables); business and cost analysis; and taxation and treasury.
Pune is one of the leading technology cities in India, and we are optimistic about leveraging this capability to further enhance our service offerings to our clients. This India development center began supporting project engagements with our U.S.-based clients in January 2025.
Pune is a premier technology hub in India, and we are optimistic about leveraging this capability to further enhance our service offerings to our clients. Beginning in January 2025, Knowledgeforce India began supporting project engagements for our U.S. clients.
ITEM 1. BUSINESS. COMPANY OVERVIEW Kforce Inc., along with its subsidiaries (collectively, “Kforce”), is a solutions firm specializing in technology, finance and accounting, and other professional staffing services. Our KNOWLEDGEforce ® empowers industry-leading companies to achieve their digital transformation goals. We curate teams of technical experts who deliver solutions custom-tailored to each of our client's needs.
ITEM 1. BUSINESS. COMPANY OVERVIEW Kforce Inc., along with its subsidiaries (collectively, “Kforce”), is a solutions firm specializing in technology, finance and accounting, and other professional staffing services. Through our KNOWLEDGEforce ® , we help industry-leading companies realize their digital transformation initiatives.
While our Technology business is not immune to economic turbulence, we continue to believe there is a critical need for innovation to support business strategies and sustain relevancy in today’s rapidly changing marketplace.
While our Technology business is not immune to economic turbulence, we continue to believe that innovation remains critical for companies seeking to execute their business strategies and maintain relevance in a rapidly changing marketplace.
We continue to make investments in our technologies and enhance our sales and delivery capabilities and processes in ways we believe will allow us to better evaluate and shape business opportunities with our clients and more seamlessly match candidates to assignments and projects. 5 Table of Contents Our last significant investment in back-office technologies was more than 15 years ago, despite the complexities of our business and client requirements having increased significantly.
We continue to make investments in our technologies and enhance our sales and delivery capabilities and processes in ways we believe will allow us to better evaluate and shape business opportunities with our clients and more seamlessly match candidates to assignments and projects.
We have not experienced any material labor disruption and are unaware of any current efforts or plans of our employees to organize. Because we operate in a complex regulatory environment, one of our top priorities is compliance. For more discussion of the potential impact that the regulatory environment could have on Kforce’s financial results, refer to Item 1A. Risk Factors.
We have no collective bargaining agreements covering any of our employees, have not experienced any material labor disruption and are unaware of any current efforts or plans of our employees to organize. Because we operate in a complex regulatory environment, one of our top priorities is compliance.
The local firms are typically operator-owned, and generally each geographic market has at least one significant competitor. Within our solutions offerings, we also face competition from global, national and regional accounting, consulting and advisory firms, as well as national and regional strategic consulting and systems implementation firms.
Within our solutions offerings, we also face competition from global, national and regional accounting, consulting and advisory firms, as well as national and regional strategic consulting and systems implementation firms.
Over the last five to ten years, we have been meaningfully investing in high quality technologies that have significantly bolstered our associates’ productivity and enhanced our ability to effectively and efficiently support our clients, consultants and candidates.
We believe the following strategic priorities are important to achieving our objectives. 5 Table of Contents Technology Transformation. We have been meaningfully investing in high quality technologies that have significantly bolstered our associates’ productivity and enhanced our ability to effectively and efficiently support our clients, consultants and candidates.
We maintain a commitment to our employees’ well-being, flexibility and balance; learning and development; and diversity, equity and inclusion. We believe these initiatives are a testament to how much we value and invest in our people. Well-Being, Flexibility and Balance The success of our business is fundamentally connected to the well-being of our people.
We believe these initiatives are a testament to how much we value and invest in our people. Well-Being, Flexibility and Balance The success of our business is fundamentally connected to the well-being of our people. We provide our associates and consultants, and their families, with access to a variety of flexible and convenient health and wellness programs.
Our Technology business comprises 92% of our overall revenues, and the remainder is generated by our FA business. For our Flex services, we provide our clients with qualified individuals (“consultants”), or teams of consultants, on a finite basis when the skills and experience of the consultants are the right match for our clients.
For our Flex services, we provide our clients with qualified individuals (“consultants”), or teams of consultants, on a finite basis when the skills and experience of the consultants are the right match for our clients. For our Direct Hire services, we identify qualified individuals (“candidates”) for permanent placement with our clients. We further describe our two reportable segments below.
These policies provide coverage, subject to certain terms, conditions and limits of liability and deductibles, for certain liabilities that may arise from Kforce’s operations. There can be no assurance that any of the above policies will be adequate for our needs, or that we will maintain all such policies in the future.
These policies provide coverage, subject to certain terms, conditions and limits of liability and deductibles, for certain liabilities that may arise from Kforce’s operations.
We provide our associates and consultants, and their families, with access to a variety of flexible and convenient health and wellness programs. These programs are part of our thoughtful and comprehensive response to support the physical and mental health of our employees by providing tools and resources that each employee can use to improve or maintain their health.
These programs are part of our thoughtful and comprehensive response to support the physical and mental health of our employees by providing tools and resources that each employee can use to improve or maintain their health. Our Office Occasional® work environment (remote-first, office occasionally) is supported by flexibility and choice and empowered by trust and technology.
While all economic cycles behave a bit differently, we believe that the broad and strategic uses of technology, including the early-stage technology evolution associated with AI, will continue to play an increasingly instrumental role in powering businesses.
While each economic cycle unfolds differently, we believe the broad and strategic application of technology, including the early-stages of AI, will continue to play an increasingly essential role in enabling businesses.
Our Strategic Priorities Our strategic priorities are centered around driving greater long-term shareholder value by achieving above-market revenue growth, making prudent investments to enhance our efficiency and effectiveness, and significantly improving our profitability as we progress towards double digit operating margins. We believe the following strategic priorities will help us achieve our objectives. Back-Office Transformation.
Our Strategic Priorities Our strategic priorities are centered around driving greater long-term shareholder value by outperforming the market from a revenue growth perspective, making prudent investments to enhance our efficiency and effectiveness and that we believe best strategically position Kforce within a rapidly evolving technological marketplace, and significantly improving our profitability levels as we progress towards our financial objectives.
Human Capital Management For over 60 years, Kforce has been rooted in stewardship, integrity and compassion. As a human capital solutions business, we are driven by the desire to serve others, provide meaningful work and opportunities to a diverse workforce, strengthen our communities and shape a more sustainable world. Our work environment is shaped by our people.
As a human capital solutions business, we are driven by the desire to serve others, provide meaningful work opportunities to a diverse workforce and strengthen the communities in which we operate. Our work environment is shaped by our people. We maintain a commitment to our employees’ well-being, flexibility and balance, and learning and development.
Our Industry Overview and Addressable Market Opportunity We assist our clients, which are principally market-leading companies in their respective industries, in solving their complex business challenges and digitally transforming their businesses. We continue to believe that technology is at the epicenter of how business is conducted and investments in technology are necessary in today’s competitive and disruptive business climate.
We continue to believe that technology is at the epicenter of how business is conducted and investments in technology are necessary in today’s competitive and disruptive business climate.
Our integrated approach is rooted in more than 60 years of proven success deploying highly skilled professionals on traditional staffing assignments or as part of a team of professionals who are responsible for delivering solutions to our clients, both of which are considered temporary (“Flex”) in nature.
Our integrated approach is rooted in more than 60 years of proven success providing highly skilled professionals on a temporary (“Flex”) basis, whether through traditional staffing assignments or solutions-oriented engagements where we are responsible for delivering defined outcomes. We also support our clients by placing highly skilled professionals in permanent (“Direct Hire”) roles.
Kforce does not currently provide MSP or VMO services directly to our clients; rather, our strategy has been to work with MSPs, VMOs and VMS providers that enable us to better extend our services to current and prospective clients. 6 Table of Contents To attract consultants and candidates, we emphasize our ability to provide: competitive compensation and benefits; quality and varied assignments; scheduling flexibility and permanent placement opportunities, all of which are important to Kforce being the employer of choice.
Kforce does not currently provide MSP or VMO services directly to our clients; rather, our strategy has been to work with MSPs, VMOs and VMS providers that enable us to better extend our services to current and prospective clients.
We have been primarily meeting these complexities and requirements by incrementally adding internal resources, which is not a scalable solution as we continue to grow and have a greater mix of solutions-oriented engagements. We believe our multi-year transformation program for our back-office technology will enhance the support to our Firm, including our clients, candidates and consultants.
The last significant investment in back-office technologies was more than 15 years ago, despite the complexities of our business and client requirements having grown significantly. We have been primarily meeting these complexities and requirements by incrementally adding internal resources, which is not a scalable solution as we continue to grow and have a greater mix of solutions-oriented engagements.
We are committed to investing in the tools, resources and trainings necessary for our people to excel in all stages of their career. We believe our leadership development programs help people grow their skills from the moment they join our Firm through the most senior level of their careers.
Learning and Development To turn a job into a career, we believe people need clear and attainable paths to grow. We are committed to investing in the tools, resources and trainings necessary for our people to excel in all stages of their career.
Overall, we believe the benefits of streamlining our processes will create a positive impact resulting in increased client satisfaction and improved associate productivity. This multi-year effort was initiated following a comprehensive assessment of our current technological position, which confirmed our belief that we have a tremendous opportunity to fundamentally transform and create advancements in our back-office functions.
This multi-year effort was initiated following a comprehensive assessment of our current technological position, which confirmed our belief that we have a tremendous opportunity to fundamentally transform and create advancements in our back-office functions. We made significant progress related to the implementation of Workday over the last few years with our expected go-live event to be in early 2027.
As we have previously articulated, over the long term, we believe that AI and other innovative technologies will follow historic patterns where improved efficiency ultimately drives greater demand for, rather than replace technology resources, and that the pace of change will continue to accelerate. We believe we are ideally positioned to meet that demand.
Over the long term, we believe that AI and other innovative technologies will continue to drive higher levels of demand for technology resources and that the pace of change will accelerate. We believe our Technology business is well positioned to meet this demand.
We believe this development center, when combined with a strong U.S. sales and delivery capability and a high-quality vendor network, will help us to more fully address the evolving needs of our clients, whether onshore, nearshore or offshore.
We believe that combining this offshore capability with our strong U.S. sales and delivery teams and our high-quality vendor network enhances our ability to meet clients’ evolving needs, whether onshore, nearshore or offshore. Empowering Strategy Through AI.
We also place highly skilled professionals in a permanent (“Direct Hire”) role with our clients. Each year, approximately 18,000 talented experts work with Fortune 500 and other leading companies. Together, we deliver Great Results Through Strategic Partnership and Knowledge Sharing ® .
Each year, approximately 17,000 talented experts work with Fortune 500 and other leading companies, enabling us to achieve Great Results Through Strategic Partnership and Knowledge Sharing ® .
During 2024, we established a development center in Pune, India, one of the leading technology cities in India. Following its formation, our India development center began supporting project engagements with our U.S.-based clients in January 2025.
During 2025, we expanded our delivery capabilities by establishing a development center in Pune, India, which is frequently ranked as one of the top information technology hubs in India. Beginning in January 2025, our India operations began supporting engagements with our U.S. clients.
We will selectively continue to support certain clients with whom we have long-standing relationships and that are strategically important to our overall success by providing consultants in lower skill roles (i.e. mortgage servicing; customer and call center support; data entry; and other lower skilled administrative roles).
We selectively continue to provide consultants in lower skilled roles to support certain long-standing clients that remain strategically important to our overall success (such as mortgage servicing, customer and call center support, data entry and administrative roles). We serve FA clients across a diverse set of industries, including financial services, business services, healthcare and manufacturing sectors, among others.
Additionally, we continually seek direct feedback from our consultants to help us identify opportunities to refine our services. Our 2024 consultant NPS are well above current industry averages and near the world class designation.
We also regularly solicit direct feedback from our consultants to identify opportunities to enhance our services. Our 2025 consultant NPS results exceeded current industry averages and achieved the world-class designation, as defined by the independent third-party.
Our integrated strategy efforts capitalize on the strong relationships we have with world-class companies by utilizing our existing sales teams, recruiters, consulting solutions professionals and technology practice experts, among other teams within the Firm, to accelerate revenue growth and improve profitability levels as we make progress towards our longer-term financial objectives of attaining double-digit operating margins at slightly greater than $2 billion in annual revenues.
While many companies have siloed their staffing and consulting capabilities, our integrated strategy efforts are intended to capitalize on the strong relationships we have with world-class companies by utilizing our existing sales teams, recruiters, consulting solutions professionals and technology practice experts, among other teams within the Firm, to deliver a seamless and connected experience to our clients.
We are continuing to further integrate and prioritize this capability into our Technology business. The September 2024 report published by Staffing Industry Analysts (“SIA”) stated that temporary technology staffing was forecasted to decline by 7% in 2024 and grow by 5% in 2025.
We expect to continue to fuel investments in our consulting solutions offering and further integrate this capability within the Firm. According to the September 2025 report published by Staffing Industry Analysts (“SIA”), temporary technology staffing was projected to decline 2% in 2025 and return to modest growth of 1% in 2026.
Although we experienced declines in 2024 and 2023, our Technology business grew 18% in 2022 and more than 22% in 2021, on a year-over-year billing day basis. The average bill rate in the fourth quarter of 2024 was approximately $90 per hour, which remained flat as compared to the fourth quarter of 2023.
Notably, we experienced sequential growth in the fourth quarter of 2025 of approximately 3% on a billing day basis, which was the highest sequential growth since the second quarter of 2022. The average bill rate was approximately $89 per hour in the fourth quarter of 2025, which was stable on a year-over-year basis.
Our FA Business Over the last several years, we have repositioned our FA business to focus on more highly skilled assignments that are less susceptible to technological change and automation and more closely aligned with our Technology business.
Our average assignment duration was 10 months in 2025, which is also consistent with the prior period. Our FA Business In recent years, we have strategically repositioned our FA business to focus on more highly skilled assignments that we believe will be less vulnerable to technological disruption or automation and that align more closely with our Technology business.
Notably, our average bill rate in the fourth quarter of 2019, which prior to the repositioning, was approximately $37 per hour.
Our overall average bill rate in the fourth quarter of 2025 was approximately $53 per hour, an increase of 3.9% from $51 per hour in the fourth quarter of 2024.
In addition, the college-level unemployment rate, which we believe serves as a better proxy for professional employment, and therefore aligns well with the consultant and candidate population that Kforce most typically serves, increased to 2.4% in December 2024, from 2.1% in December 2023.
In addition, the college-level unemployment rate, which we view as a more relevant benchmark for the professional talent markets we serve, increased to 2.8% in December 2025, from 2.4% in December 2024.
We believe that our Office Occasional® model allows our associates to design their workdays; thus, additionally contributing to their health and well-being. Learning and Development To turn a job into a career, we believe people need clear and attainable paths to grow.
The shift in strategy following the pandemic allowed us to introduce a new design, which led to the streamlining of our overall physical real estate footprint. We believe that our Office Occasional® model allows our associates to design their workdays; thus, additionally contributing to their health and well-being.
The demand for our solutions engagements contributed positively to the results of our Technology business in 2024, while our traditional staff augmentation offering has been the driver of our overall Technology revenue declines year over year.
We serve clients across virtually all major industries, with a diversified presence in financial and business services, communications, insurance, retail and technology, among others. The demand for our solutions engagements contributed positively to the results of our Technology business again in 2025, experiencing growth on a year-over-year basis, while our traditional staff augmentation offering has experienced relatively weaker results.
Clients continue to prioritize efficient access to highly skilled talent and view our solutions offering as a cost-effective solution to meet their technology project requirements.
Clients continue to prioritize efficient access to specialized talent and view our solutions offering as a cost-effective means for advancing their technology initiatives. This offering has been a meaningful contributor to the financial performance of our Technology business in recent years, and we expect the mix of this offering to continue to grow in the future.
As of December 31, 2024, Kforce employed approximately 1,700 associates and had 8,000 consultants on assignment with our clients, of which a significant majority of these consultants are employed directly by Kforce. 7 Table of Contents Availability of Reports and Other Information Our internet address is www.kforce.com.
We believe our leadership development programs help people grow their skills from the moment they join our Firm through the most senior level of their careers. At December 31, 2025, Kforce employed over 1,600 associates and had approximately 7,800 consultants on assignment with our clients, of which a significant majority of these consultants are employed directly by Kforce.
Revenue for our FA business decreased 23.5% to $112.6 million in 2024 compared to 2023, which was primarily driven by the ongoing uncertainty in the macroeconomic environment. 4 Table of Contents Our Consultants The majority of our consultants are directly employed by Kforce, including domestic workers and foreign workers whose visas are sponsored by Kforce.
With that said, FA revenues experienced sequential growth in the third and fourth quarters of 2025 of 6.9% and 2.4%, respectively. Our Consultants The majority of our consultants are directly employed by Kforce, including domestic employees and foreign workers whose visas are sponsored by the Firm.
We believe there are a multitude of technology projects that need to be addressed by our clients in order for them to remain competitive and to effectively change how they operate and deliver value to their customers, irrespective of economic performance.
Technology, as a discipline, continues to be project driven, even amidst generational technological changes like AI. We believe companies must continue investing in technology initiatives to remain competitive and to effectively change how they operate and deliver value to their customers, clients, investors and employees, regardless of macroeconomic conditions.
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These scalable, flexible outcomes are shaped by deep market knowledge, thought leadership and our multi-industry expertise.
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We assemble and deploy teams of skilled technical experts who design and deliver solutions tailored to the unique requirements of each client. These scalable and flexible solutions are shaped by our deep market insight, thought leadership and broad experience across multiple industries.
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Over the last decade, we have driven significant, strategic change at Kforce, including streamlining the focus of our business on providing technology talent solutions. In alignment with this goal, since 2008, we have completed various divestitures of businesses that did not relate to our core business.
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Over more than a decade, we have executed meaningful strategic changes to sharpen our focus on technology talent solutions, including completing a series of divestitures of businesses that were outside our core offerings.
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For our Direct Hire services, we identify qualified individuals (“candidates”) for permanent placement with our clients. We further describe our two reportable segments below.
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Our Technology and Finance and Accounting (“FA”) businesses represent our two reportable segments. Our Technology business comprises 93% of our overall revenues, and the remainder is generated by our FA business.
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Our operating results can be affected by: • the number of billing days; • the seasonality of our clients’ businesses; • changes in holidays and vacation days taken, which is usually highest in the fourth quarter of each calendar year; and • increased costs as a result of certain annual U.S. state and federal employment tax resets that occur at the beginning of each calendar year, which negatively impact our gross profit and overall profitability in the first fiscal quarter of each calendar year.
Added
Our Technology revenues decreased 4.8% year over year (4.5% on a billing day basis) to $1.2 billion in 2025 and marked the third consecutive year of revenue declines (2023-2025), which we believe was largely due to ongoing macroeconomic uncertainties that have largely persisted since the second half of 2022, the shedding of technologists hired during the immediate post-pandemic boom (where our Technology business grew 18% in 2022 and more than 22% in 2021, on a year-over-year billing day basis) and is also reflective of the early phases of technology disruption with generative AI where companies are assessing implications on their business and technological roadmaps.
Removed
This offering has continued to be a positive contributor and catalyst to our Technology business over the last several years and we expect this offering to continue to represent a growing mix of our overall Technology revenue footprint.
Added
This continues the upward trajectory following our repositioning efforts as compared to our average bill rate in the fourth quarter of 2019 of $37 per hour. 4 Table of Contents Our FA revenues decreased 12.3% year over year (11.9% on a billing day basis) to $98.7 million in 2025 compared to 2024, which we believe was largely due to the ongoing macroeconomic uncertainties.
Removed
We provide services to clients across virtually every industry with a diversified footprint in, among others, financial and business services, communications, insurance, retail and technology.
Added
Our Industry Overview and Addressable Market Opportunity We assist our clients, which are principally market-leading companies across a broad range of industries, in helping to solve their complex business challenges through the application of technologies and assisting them with digitally transforming their businesses.
Removed
In the next update from SIA, which would typically be released in the April 2025, we would expect growth expectations to come down. Technology, as a discipline, continues to be project driven, even amidst generational changes like AI.
Added
While these labor market indicators point to broader economic uncertainty, our recent trends suggest that demand for skilled professionals, particularly in technology, continues to be supported by clients’ ongoing project requirements and long‑term transformation initiatives.
Removed
Our Technology revenues declined 6.6% year over year to $1.3 billion in 2024 (7.4% on a billing day basis), which was primarily driven by the ongoing uncertainty in the macroeconomic environment that has largely persisted since the second half of 2022.
Added
Examples of the more significant technological investments have been, among others, (i) the implementation of Microsoft Dynamics as our customer relationship management (CRM) and talent relationship management (TRM) platform, (ii) the implementation of a data and analytics and business intelligence capability and (iii) more recently, making significant progress on the implementation of Workday as our future state enterprise cloud application for Human Capital Management (HCM) and financials.
Removed
Our average assignment duration was 10 months in 2024, which is consistent with the prior period.
Added
We believe our multi-year transformation program for our back-office technology will enhance the support to our Firm, including our clients, candidates and consultants. Overall, we believe the benefits of streamlining our processes will create a positive impact resulting in increased client satisfaction and improved associate productivity.
Removed
We provide services to clients in a variety of industries with a diversified footprint in, among others, the financial services, business services, healthcare and manufacturing sectors. Our overall average bill rate in the fourth quarter of 2024 was approximately $51 per hour, which remained flat as compared to the fourth quarter of 2023.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

38 edited+7 added−1 removed67 unchanged
Biggest changeWe maintain cyber risk insurance, but this insurance may not be sufficient to cover all of our losses suffered as a result of a breach of our systems or information. Our information technology may not provide sufficient protection, and as a result we may lose significant information about us, our employees, candidates, consultants, vendors, or clients.
Biggest changeWe may be required to incur significant expenses to comply with mandatory privacy and security standards and protocols imposed by law, regulation, industry standards or contractual obligations. We maintain cyber risk insurance, but this insurance may not be sufficient to cover all of our losses suffered as a result of a breach of our systems or information.
Additional risks related to our nearshore and offshore capabilities include: difficulties staffing and managing foreign operations; exposure to changes in economic and geopolitical and business conditions; compliance with foreign laws and regulations; and fluctuations in foreign currency exchange rates and tax compliance.
Additional risks related to our nearshore and offshore capabilities include: difficulties staffing and managing foreign operations; exposure to changes in economic and geopolitical and business conditions; compliance with foreign laws and regulations; foreign tax rates; and fluctuations in foreign currency exchange rates and tax compliance.
The loss or any sustained attrition of our key operating employees could have a material adverse effect on our business, including our ability to establish and maintain client, consultant and candidate, professional and technical relationships. Risk Related to Cybersecurity and Technology Cybersecurity risks and cyber incidents could adversely affect our business and disrupt operations.
The loss or any sustained attrition of our key operating employees could have a material adverse effect on our business, including our ability to establish and maintain client, consultant and candidate, professional and technical relationships. Risks Related to Cybersecurity and Technology Cybersecurity risks and cyber incidents could adversely affect our business and disrupt operations.
New business initiatives could also involve significant unanticipated challenges and risks, including, but not limited to: not advancing our business strategy; not realizing the expected return on the investment; experiencing difficulty in implementing initiatives, new processes and internal controls; or diverting management’s attention from our other businesses.
New business initiatives could also involve significant unanticipated challenges and risks, including, but not limited to: not advancing our business strategy; not realizing the expected return on the investment; experiencing difficulty in implementing initiatives, new processes and internal controls; or diverting management’s attention from other business.
Kforce’s articles of incorporation and bylaws and Florida law contain provisions that may have the effect of inhibiting a non-negotiated merger or other business combination. In particular, our articles of incorporation provide for staggered Board terms and permit the removal of directors only for cause.
Kforce’s articles of incorporation and bylaws and Florida law contain provisions that may have the effect of inhibiting a non-negotiated merger or other business combination. In particular, our articles of incorporation provide for staggered Board of Directors (the “Board”) terms and permit the removal of directors only for cause.
In addition, the stock market in general, along with market prices for staffing companies, has experienced historical volatility that has often been unrelated to the operating performance of these companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our operating results.
In addition, the stock market in general, along with market prices for staffing and solutions companies, has experienced historical volatility that has often been unrelated to the operating performance of these companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our operating results.
If our management is unable to certify the effectiveness of our internal controls, including those over our third-party vendors, our independent registered public accounting firm cannot render an opinion on the effectiveness of our internal controls over financial reporting, or if material weaknesses in our internal controls are identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could cause our stock price to decline. 12 Table of Contents Provisions in Kforce’s articles and bylaws and Florida law may have certain anti-takeover effects.
If our management is unable to certify the effectiveness of our internal controls, including those over our third-party vendors, our independent registered public accounting firm cannot render an opinion on the effectiveness of our internal controls over financial reporting, or if material weaknesses in our internal controls are identified, we could be subject to regulatory scrutiny and a loss of public confidence, which could cause our stock price to decline. 13 Table of Contents Provisions in Kforce’s articles and bylaws and Florida law may have certain anti-takeover effects.
While we have policies, procedures and systems in place to prevent, deter and detect cyberattacks or security incidents, and, although, to our knowledge we have not experienced a material data breach as of the date of this report, we remain vulnerable to sophisticated techniques used to obtain unauthorized access, or cause system interruption, that change frequently and may not produce immediate signs of intrusion.
While we have policies, procedures and systems in place to prevent, deter and detect cyberattacks or security incidents, and, although, to our knowledge we have not experienced a material data breach at the date of this report, we remain vulnerable to sophisticated techniques used to obtain unauthorized access, or cause system interruption, that change frequently and may not produce immediate signs of intrusion.
Kforce is dependent on the proper functioning of information systems in operating our business. Critical information systems are used in every aspect of our daily operations, perhaps most significantly, in the identification and matching of resources to client assignments and in the client billing and consultant or vendor payment functions.
Kforce depends on the proper functioning of its information systems. Kforce is dependent on the proper functioning of information systems in operating our business. Critical information systems are used in every aspect of our daily operations, perhaps most significantly, in the identification and matching of resources to client assignments and in the client billing and consultant or vendor payment functions.
The Tax Cuts and Jobs Act, enacted in December 2017, provided a significant reduction in the corporate tax rate.
The Tax Cuts and Jobs Act (the “TCJA”), enacted in December 2017, provided a significant reduction in the corporate tax rate.
Relying on third-party solutions may result in higher costs over time due to subscription fees and licensing costs, may become unavailable for a prolonged period of time, which could have a material adverse effect on our financial results. Kforce may be exposed to unforeseeable negative acts by our personnel that could have a material adverse effect on our business.
Relying on third-party solutions may result in higher costs over time due to subscription fees and licensing costs, may become unavailable for a prolonged period of time, which could have a material adverse effect on our financial results. 10 Table of Contents Kforce may be exposed to unforeseeable negative acts by our personnel that could have a material adverse effect on our business.
This lack of flexibility and adaptability can hinder the Firm’s growth potential, which could have a material adverse effect on our business. 9 Table of Contents Kforce may be adversely affected by utilizing third-party software providers. An inherent risk of using third-party software providers is the dependence on their performance, reliability and availability.
This lack of flexibility and adaptability can hinder the Firm’s growth potential, which could have a material adverse effect on our business. Kforce may be adversely affected by utilizing third-party software providers. An inherent risk of using third-party software providers is the dependence on their performance, reliability and availability.
Kforce depends upon its ability to attract and retain consultants and candidates, particularly in technology disciplines, who possess the skills and experience necessary to meet the requirements of our clients. We must continually evaluate and upgrade our methods of attracting qualified consultants and candidates to keep pace with changing client needs and emerging technologies.
Kforce depends upon its ability to attract and retain consultants and candidates, particularly in technology disciplines, who possess the skills and experience necessary to meet the requirements of our clients. We must continually evaluate and upgrade our methods of attracting highly qualified consultants and candidates to keep pace with changing client needs and evolutions in technologies.
An adverse determination related to the independent contractor status of these subcontracted personnel could result in substantial taxes or other liabilities to us, which could result in a material adverse effect upon our business. Significant increases in wages or payroll-related costs could have a material adverse effect on our financial results.
An adverse determination related to the independent contractor status of these subcontracted personnel could result in substantial taxes or other liabilities to us, which could result in a material adverse effect upon our business. 12 Table of Contents Significant increases in wages or payroll-related costs could have a material adverse effect on our financial results.
If this occurs, we may not be able to repay our debt or we may be forced to refinance on terms not acceptable to us, which could have a material adverse effect on our operating results and financial condition. 13 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
If this occurs, we may not be able to repay our debt or we may be forced to refinance on terms not acceptable to us, which could have a material adverse effect on our operating results and financial condition. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
These strategic priorities are expected to enhance the support and experience of our clients, consultants and candidates, contribute to the attainment of our long-term profitability objectives and generate significant shareholder value. 8 Table of Contents New business strategies and initiatives, such as these, can be distracting to our management team and associates, and can also be disruptive to our operations.
These strategic priorities are expected to enhance the support and experience of our clients, consultants and candidates, contribute to the attainment of our longer-term profitability objectives and generate significant shareholder value. New business strategies and initiatives, such as these, can be distracting to our management team and associates, and can also be disruptive to our operations.
Kforce’s current market share may decrease as a result of limited barriers to entry for new competitors and discontinuation of clients looking to outside providers to support their talent needs. The staffing services market is highly competitive with limited barriers to entry.
Kforce’s current market share may decrease as a result of limited barriers to entry for new competitors and discontinuation of clients looking to outside providers to support their talent needs. The staffing and solutions markets are highly competitive with limited barriers to entry.
Current and future restrictions on the availability of such work visas could restrain our ability to employ the skilled professionals we need to meet our clients’ needs, which could have a material adverse effect on our business.
Current and future restrictions on the availability of such work visas or escalating costs of utilizing foreign nationals could restrain our ability to employ the skilled professionals we need to meet our clients’ needs, which could have a material adverse effect on our business.
The market price of our stock has fluctuated substantially in the past and could fluctuate substantially in the future based on a variety of factors, including our operating results, changes in general conditions in the economy, the financial markets, the staffing industry, a decrease in our outstanding shares or other developments affecting us, our clients, or our competitors; some of which may be unrelated to our performance.
The market price of our stock has fluctuated substantially in the past and could fluctuate substantially in the future based on a variety of factors, including our operating results, changes in general conditions in the economy, the financial markets, the staffing and solutions industries, belief by investors in the disruptive nature of technology on our business, a decrease in our outstanding shares or other developments affecting us, our clients, or our competitors; some of which may be unrelated to our performance.
Our Technology business utilizes a significant number of foreign nationals employed by us on work visas, primarily under the H-1B visa classification.
Our Technology business utilizes a significant number of foreign nationals (that are already working in the U.S.) employed by us on work visas, primarily under the H-1B visa classification.
We have been and expect to continue allocating significant investments (and the attention of executive management and many of our leaders) towards our strategic priorities, including our back-office transformation program involving the implementation of Workday, integrated strategy, and the evolution of our nearshore and offshore capability, including the establishment and maturity of our India development center in Pune, India.
We have been and expect to continue allocating significant investments (and the attention of executive management and many of our leaders and associates) towards our strategic priorities, including our technological transformation and efforts to implement Workday, integrated strategy, driving our strategy through leverage of AI, and the evolution of our nearshore and offshore capability, including the establishment and maturity of our India development center in Pune, India.
Any cyberattack, unauthorized intrusion, malicious software infiltration, network disruption, corruption of data, misuse or theft of private or other sensitive information, or inadvertent acts by our associates, consultants or third-party independent contractors, could result in the disclosure or misuse of confidential or proprietary information, and could adversely impact our systems, services, operations, financial results and reputation with clients and potential clients. 10 Table of Contents The collection, possession and use of personal information and data in conducting our business subjects us to legislative and regulatory burdens and compliance risk.
Any cyberattack, unauthorized intrusion, malicious software infiltration, network disruption, corruption of data, misuse or theft of private or other sensitive information, or inadvertent acts by our associates, consultants or third-party independent contractors, could result in the disclosure or misuse of confidential or proprietary information, and could adversely impact our systems, services, operations, financial results and reputation with clients and potential clients.
Borrowings under the credit facility are secured by substantially all of the tangible and intangible assets of the Firm. Adverse changes in credit markets, including increases in interest rates, could increase our cost of borrowing and/or make it more difficult to refinance our existing indebtedness, if necessary. Kforce is subject to certain affirmative and negative covenants under our credit facility.
Adverse changes in credit markets, including increases in interest rates, could increase our cost of borrowing and/or make it more difficult to refinance our existing indebtedness, if necessary. 14 Table of Contents Kforce is subject to certain affirmative and negative covenants under our credit facility.
However, there can be no assurance that such parties will not experience cybersecurity incidents that could adversely affect our employees, consultants, customers and businesses, or that our audit or diligence processes will successfully deter or prevent such breach. Kforce depends on the proper functioning of its information systems.
Additionally, we require audits of certain third parties’ information technology processes on an annual basis. However, there can be no assurance that such parties will not experience cybersecurity incidents that could adversely affect our employees, consultants, customers and businesses, or that our audit or diligence processes will successfully deter or prevent such breach.
New business initiatives and strategic changes in the composition of our business mix could be disruptive to our operations, which could have a material adverse effect on our business, financial condition and operating results.
New business initiatives and strategic changes in the composition of our business mix could be disruptive to our operations, which could have a material adverse effect on our business, financial condition and operating results. 9 Table of Contents Our planned nearshore and offshore strategies expose us to additional business, financial, regulatory, geopolitical and other related risks, which may have a material adverse effect on our business.
Vigorous enforcement and legislative or executive action relating to immigration could adversely affect our ability to recruit or retain foreign national consultants, and consequently, reduce our supply of skilled consultants and candidates, and subject us to fines, penalties and sanctions, or result in increased labor and compliance costs. 11 Table of Contents Reclassification of our independent contractors by tax or regulatory authorities could have a material adverse effect on our business model and/or could require us to pay significant retroactive wages, taxes and penalties.
Vigorous enforcement and legislative or executive action relating to immigration could adversely affect our ability to recruit or retain foreign national consultants, and consequently, reduce our supply of skilled consultants and candidates, and subject us to fines, penalties and sanctions, or result in increased labor and compliance costs.
Significant declines in business or a loss of a significant client could have a material adverse effect on our revenues and financial results. We primarily provide services to Fortune 500 and other similarly sized companies, which is intended to provide relative durability to our revenue stream during adverse economic environments and enable us to grow our revenues more profitably.
We primarily provide services to Fortune 500 and other similarly sized companies, and this strategy is intended to provide relative durability to our revenue stream during adverse economic environments and enable us to grow our revenues more profitably.
We expect significant competition for individuals with proven technical or professional skills to continue or increase for the foreseeable future given the scarcity of highly skilled consultants and candidates, especially in our Technology business.
We expect significant competition for individuals with proven technical or professional skills to continue for the foreseeable future given the scarcity of highly skilled consultants and candidates, especially in our Technology business. If qualified individuals are not available to us in sufficient numbers and upon economic terms acceptable to us, it could have a material adverse effect on our business.
We may also experience more competitive pricing pressures during periods of economic downturn. Any substantial economic downturn, including an environment with significant inflationary and/or recessionary pressures, in the U.S. or global impact on the U.S., could have a material adverse effect on our business, financial condition and operating results.
Any substantial economic downturn, including an environment with significant inflationary and/or recessionary pressures, in the U.S. or global impact on the U.S., could have a material adverse effect on our business, financial condition and operating results. 8 Table of Contents Our business depends on client demand for our solutions and services, including evolving our solutions and services in response to continued changes in technology.
We are reliant upon our third-party suppliers’ compliance with applicable laws and contractual obligations. We also recently expanded our offshore capabilities to include a development center in Pune, India to enhance our service offerings to our clients.
We continue to evolve our nearshore and offshore capabilities to further enhance our service offerings to our clients by engaging with nearshore and offshore third-party suppliers. We are reliant upon our third-party suppliers’ compliance with applicable laws and contractual obligations.
Although the current administration may extend these tax cuts, there is no assurance that these tax cuts will be extended and other key aspects of the tax code may be modified, which could have a material adverse effect on our tax obligations and effective tax rate.
Although many provisions of the TCJA were permanently extended by the One Big Beautiful Bill Act, other key aspects of the tax code may be modified, which could have a material adverse effect on our tax obligations and effective tax rate.
The increased scrutiny by these constituencies has also resulted in several of our clients requiring us to adhere to their internal corporate commitments regarding ESG matters. Furthermore, increased public awareness and concern regarding environmental risks, including global climate change, may result in increased public scrutiny of our business and our industry.
Furthermore, increased public awareness and concern regarding environmental risks, including global climate change, may result in increased public scrutiny of our business and our industry.
We seek to reduce these risks by performing vendor due diligence procedures prior to engaging with any third-party vendor who will have access to sensitive data. Additionally, we require audits of certain third parties’ information technology processes on an annual basis.
The risk of a cyberattack or security breach on a third party carries the same risks to Kforce as those associated with our internal systems. We seek to reduce these risks by performing vendor due diligence procedures prior to engaging with any third-party vendor who will have access to sensitive data.
We utilize individuals to provide services in connection with our business as qualified third-party independent contractors rather than our direct employees.
Reclassification of our independent contractors by tax or regulatory authorities could have a material adverse effect on our business model and/or could require us to pay significant retroactive wages, taxes and penalties. We utilize individuals to provide services in connection with our business as qualified third-party independent contractors rather than our direct employees.
Other results of these incidents could include, but are not limited to, increased cybersecurity protection costs, litigation, regulatory penalties, monetary damages and reputational damage adversely affecting client or investor confidence. We may be required to incur significant expenses to comply with mandatory privacy and security standards and protocols imposed by law, regulation, industry standards or contractual obligations.
The collection, possession and use of personal information and data in conducting our business subjects us to legislative and regulatory burdens and compliance risk. Other results of these incidents could include, but are not limited to, increased cybersecurity protection costs, litigation, regulatory penalties, monetary damages and reputational damage adversely affecting client or investor confidence.
Investor advocacy groups, certain institutional investors and other influential investors and regulators such as the SEC, among others, are increasingly focused on ESG practices and, in recent years, have placed increasing importance on the non-financial impacts of their investments.
Investor advocacy groups, certain institutional investors and other influential investors and regulators continue to be focused on ESG practices and have placed increased importance on the non-financial impacts of their investments. The increased scrutiny by these constituencies has also resulted in several of our clients requiring us to adhere to their internal corporate commitments regarding ESG matters.
Additionally, many of our information technology systems and networks are cloud-based or managed by third parties, whose future performance and reliability we cannot control. The risk of a cyberattack or security breach on a third party carries the same risks to Kforce as those associated with our internal systems.
Our information technology may not provide sufficient protection, and as a result we may lose significant information about us, our employees, candidates, consultants, vendors or clients. 11 Table of Contents Additionally, many of our information technology systems and networks are cloud-based or managed by third parties, whose future performance and reliability we cannot control.
If qualified individuals are not available to us in sufficient numbers and upon economic terms acceptable to us, it could have a material adverse effect on our business. Kforce faces significant employment-related legal risk. Kforce employs consultants either in the workplaces of our clients or virtually.
Kforce faces significant employment-related legal risk. Kforce employs consultants either in the workplaces of our clients or virtually.
Removed
Our planned nearshore and offshore strategies expose us to additional business, financial, regulatory, geopolitical and other related risks, which may have a material adverse effect on our business. We continue to evolve our nearshore and offshore capabilities to further enhance our service offerings to our clients by engaging with nearshore and offshore third-party suppliers.
Added
We may also experience more competitive pricing pressures during periods of economic downturn.
Added
Our financial results depend, at least in part, on the level of demand for our solutions and services, which could be negatively affected by numerous factors.
Added
Our success depends, at least in part, on our ability to evolve our solutions and services in response to rapid and continuing changes in technologies and addressing the impact of those changes on client demand.
Added
Examples of areas of significant technological change have included the migration from mainframe to distributed processing, the emergence of the internet, the mobile revolution, the move to cloud computing, and more recently, advanced AI, which includes derivative offshoots such as generative, agentic and physical AI, among others.
Added
While historic evolutions of technologies, such as those described above, have created incremental demand, significant declines in demand, or our inability to address the evolving nature of technology, could materially affect our results of operations. Significant declines in business or a loss of a significant client could have a material adverse effect on our revenues and financial results.
Added
We also recently expanded our offshore capabilities to include Knowledgeforce India in Pune, India to enhance our service offerings to our clients.
Added
Borrowings under the credit facility are secured by substantially all of the tangible and intangible assets of the Firm.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeEach of these teams remain in close coordination to ensure risk mitigation strategies are designed and operating effectively. Board Oversight The Board is actively engaged in the oversight of cybersecurity and data privacy. The Audit Committee assists the Board in meeting its responsibility to oversee cybersecurity and data privacy strategies and practices.
Biggest changePrior to the current reporting structure, cybersecurity and data privacy oversight responsibilities were shared across relevant technology leadership roles. Each of these teams remain in close coordination to ensure risk mitigation strategies are designed and operating effectively. 15 Table of Contents Board Oversight The Board is actively engaged in the oversight of cybersecurity and data privacy.
While all organizations are inherently at risk of cybersecurity threats, we do not believe that cybersecurity threats have affected, or are reasonably likely to materially affect, our business strategy, results of operations or financial condition.
While all organizations are inherently at risk of cybersecurity threats, we do not believe that cybersecurity threats have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations or financial condition.
We have taken a comprehensive defense-in-depth approach to the implementation of our cybersecurity controls. These controls are set to block and/or provide alerts on suspicious activities. Our around-the-clock security operation center responds as appropriate to risks identified and performs the risk assessment and risk evaluation.
We have taken a comprehensive defense-in-depth approach to the implementation of our cybersecurity controls. These controls are set to block and/or provide alerts on suspicious activities. Our around-the-clock security operation center responds as appropriate to risks identified and performs risk assessments and risk evaluations.
Our internal audit team, which reports directly to the Audit Committee, uses the ERM program to develop a risk-based audit plan, which is approved by the Audit Committee annually. Our CIO is accountable for the Firm’s cybersecurity and data privacy programs and is supported by the CISO.
Our internal audit team, which reports directly to the Audit Committee, uses the ERM program to develop a risk-based audit plan, which is approved by the Audit Committee annually. Our CISO is responsible for managing the Firm’s cybersecurity and data privacy programs.
Annually, the Board and management participate in a strategy discussion on cybersecurity. 14 Table of Contents To further enhance the Board and Audit Committee’s role in overseeing cybersecurity risks, the Board formed a special working group that is comprised of two members of the Audit Committee to have more frequent and detailed dialogue with executive management (including our COO, CFO, CIO, CISO and VP of Internal Audit) on all areas pertaining to cybersecurity.
To further enhance the Board and Audit Committee’s role in overseeing cybersecurity risks, the Board formed a special working group that is comprised of two members of the Audit Committee to have more frequent and detailed dialogue with executive management (including our COO, CFO, CISO and VP of Internal Audit) on all areas pertaining to cybersecurity.
Senior management, including our CIO and CISO, brief the Board on an annual basis on our cybersecurity and information security posture and cybersecurity incidents deemed to have a moderate business impact (even if the incidents do not rise to the level of being material).
Senior management, including our CISO, brief the Board on an annual basis on our cybersecurity and information security posture and cybersecurity incidents deemed to have a moderate business impact (even if the incidents do not rise to the level of being material). Annually, the Board and management participate in a strategy discussion on cybersecurity among other activities.
We engage subject matter experts in conducting independent assessments of our cybersecurity program maturity, penetration tests and other tests and assessments.
We engage subject matter experts in conducting independent assessments of our cybersecurity program maturity, penetration tests and other evaluations to benchmark and enhance our security posture.
Governance Management Oversight Our Chief Information Security Officer (“CISO”) leads our Information Security and Data Privacy Council, which meets quarterly, or more frequently if necessary, to assess, identify and manage cybersecurity threats, support advocacy programs and advise our Chief Information Officer (“CIO”) and CISO on solutions.
The Firm’s cybersecurity framework is based on the National Institute of Standards and Technology (“NIST”). Governance Management Oversight Our Chief Information Security Officer (“CISO”) leads our Information Security and Data Privacy Council, which meets quarterly, or more frequently if necessary, to assess, identify and manage cybersecurity threats, support advocacy programs and advise on the cyber strategy and program.
Our CIO and CISO have over 35 and 25 years, respectively, of experience in information security and program management, and have both served over 10 years in our corporate information security organization.
The CISO oversees day‑to‑day operations of these functions, proposes updates to the Firm’s cybersecurity strategy, which forms part of our overall information technology strategy. Our CISO has over 25 years of experience in information security and program management, and has served over 10 years in our corporate information security organization.
Removed
The Firm’s cybersecurity framework is based on the National Institute of Standards and Technology (“NIST”).
Added
The Audit Committee assists the Board in meeting its responsibility to oversee cybersecurity and data privacy strategies and practices.
Removed
Under the guidance of the CIO, the CISO manages day-to-day operations of the security and data privacy functions and proposes changes to the Firm’s cybersecurity strategy, which is part of our overall information technology strategy. The CIO and CISO meet frequently to discuss cyber and data operations, privacy programs and risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES. As of December 31, 2024, we leased approximately 127,000 square feet of total office space in 31 offices located throughout the U.S. Most of our operations for both of our Technology and FA businesses are conducted from these leased field offices when not performed remotely with our Office Occasional ® model.
Biggest changeMost of our operations for both of our Technology and FA businesses are conducted from these leased field offices when not performed remotely with our Office Occasional ® model. We do not anticipate any difficulty in renewing these leases, or in finding alternative sites in the ordinary course of business.
Removed
We do not anticipate any difficulty in renewing these leases, or in finding alternative sites in the ordinary course of business.
Added
ITEM 2. PROPERTIES. At December 31, 2025, we leased approximately 117,000 square feet of total office space in 32 offices, one leased office located in Pune, India and the remaining located throughout the U.S.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeKforce maintains liability insurance that insures us against workers’ compensation, personal and bodily injury, property damage, directors’ and officers’ liability, errors and omissions, cyber liability, employment practices liability and fidelity losses. There can be no assurance that Kforce’s liability insurance will cover all events or that the limits of coverage will be sufficient to fully cover all liabilities. ITEM 4.
Biggest changeKforce maintains liability insurance that insures us against workers’ compensation, personal and bodily injury, property damage, directors’ and officers’ liability, errors and omissions, cyber liability, employment practices liability and fidelity losses.
Added
There can be no assurance that Kforce’s liability insurance will cover all events or that the limits of coverage will be sufficient to fully cover all liabilities. 16 Table of Contents ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures. 15 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 15 Item 6. [Reserved.] 16 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 17 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 27 Item 8.
Biggest changeItem 4. Mine Safety Disclosures. 17 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 17 Item 6. [Reserved.] 17 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 18 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 28 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer Purchases of common stock under the Plan are subject to certain price, market, volume and timing constraints, which are specified in the plan. 15 Table of Contents The following table presents information with respect to our repurchases of Kforce common stock during the three months ended December 31, 2024: Period Total Number of Shares Purchased (1)(2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1, 2024 to October 31, 2024 167,508 $ 54.87 167,508 $ 70,498,722 November 1, 2024 to November 30, 2024 1,633 $ 59.24 — $ 70,498,722 December 1, 2024 to December 31, 2024 192,306 $ 58.35 118,045 $ 63,497,672 Total 361,447 $ 56.74 285,553 $ 63,497,672 (1) Includes 1,633 repurchased shares withheld for tax withholding upon vesting of restricted stock for the period November 1, 2024 to November 30, 2024.
Biggest changePurchases of Equity Securities by the Issuer The following table presents information with respect to repurchases of Kforce common stock under the Board authorized stock repurchase program during the three months ended December 31, 2025: Period Total Number of Shares Purchased (1)(2) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1, 2025 to October 31, 2025 164,173 $ 28.03 164,173 $ 100,000,000 November 1, 2025 to November 30, 2025 21,483 $ 28.91 20,783 $ 99,399,849 December 1, 2025 to December 31, 2025 132,801 $ 31.35 70,467 $ 97,199,305 Total 318,457 $ 29.47 255,423 $ 97,199,305 (1) Includes 700 repurchased shares withheld for tax withholding upon vesting of restricted stock for the period November 1, 2025 to November 30, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Holders of Common Stock Our common stock trades on the New York Stock Exchange (“NYSE”) using the ticker symbol “KFRC.” As of February 13, 2025, there were 270 holders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Holders of Common Stock Our common stock trades on the New York Stock Exchange (“NYSE”) using the ticker symbol “KFRC.” At February 13, 2026, there were 429 holders of record.
(2) Includes 74,261 repurchased shares withheld for tax withholding upon vesting of restricted stock for the period December 1, 2024 to December 31, 2024. (3) In February 2024, the Board approved a change in our stock repurchase authorization increasing the available authorization to $100 million.
(2) Includes 62,334 repurchased shares withheld for tax withholding upon vesting of restricted stock for the period December 1, 2025 to December 31, 2025. (3) In October 2025, the Board approved a change to the stock repurchase program, increasing the total authorization to $100 million.

Item 7. Management's Discussion & Analysis

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

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Biggest changeSequential Growth Rates (GAAP) 2024 2023 Q4 Q3 Q2 Q1 Q4 Technology Flex (2.5)% (0.6)% 1.7% (2.3)% (2.5)% FA Flex (2.7)% (4.1)% (5.7)% (11.5)% (1.0)% Total Flex revenue (2.5)% (0.8)% 1.2% (3.1)% (2.3)% Sequential Growth Rates (Non-GAAP) 2024 2023 Q4 Q3 Q2 Q1 Q4 Billing Days 62 64 64 64 61 Technology Flex 0.6% (0.6)% 1.7% (6.9)% 0.7% FA Flex 0.5% (4.1)% (5.7)% (15.7)% 2.3% Total Flex revenue 0.6% (0.8)% 1.2% (7.6)% 0.9% Year-Over-Year Growth Rates (GAAP) 2024 2023 YTD Q4 Q3 Q2 Q1 YTD Q4 Technology Flex (6.4)% (3.7)% (3.6)% (6.4)% (11.4)% (7.4)% (11.1)% FA Flex (23.5)% (22.1)% (20.7)% (23.1)% (27.2)% (27.6)% (28.0)% Total Flex revenue (7.9)% (5.2)% (5.0)% (7.8)% (12.8)% (9.6)% (12.8)% Year-Over-Year Growth Rates (Non-GAAP) 2024 2023 YTD Q4 Q3 Q2 Q1 YTD Q4 Billing Days 254 62 64 64 64 252 61 Technology Flex (7.1)% (5.2)% (5.1)% (6.4)% (11.4)% (7.1)% (11.1)% FA Flex (24.1)% (23.3)% (21.9)% (23.1)% (27.2)% (27.3)% (28.0)% Total Flex revenue (8.6)% (6.7)% (6.5)% (7.8)% (12.8)% (9.2)% (12.8)% Free Cash Flow.
Biggest changeSequential Growth Rates (GAAP) 2025 2024 Q4 Q3 Q2 Q1 Q4 Technology Flex (0.2)% (1.2)% 1.8% (3.7)% (2.5)% FA Flex 2.4% 6.9% 2.1% (12.8)% (2.7)% Total Flex revenue (0.1)% (0.7)% 1.8% (4.3)% (2.5)% Sequential Growth Rates (Non-GAAP) 2025 2024 Q4 Q3 Q2 Q1 Q4 Billing Days 62 64 64 63 62 Technology Flex 3.0% (1.2)% 0.2% (5.2)% 0.6% FA Flex 5.7% 6.9% 0.5% (14.2)% 0.5% Total Flex revenue 3.2% (0.7)% 0.2% (5.8)% 0.6% Year-Over-Year Growth Rates (GAAP) 2025 2024 YTD Q4 Q3 Q2 Q1 YTD Q4 Q3 Q2 Q1 Technology Flex (4.7)% (3.3)% (5.5)% (5.0)% (5.0)% (6.4)% (3.7)% (3.6)% (6.4)% (11.4)% FA Flex (12.8)% (2.4)% (7.3)% (16.8)% (23.2)% (23.5)% (22.1)% (20.7)% (23.1)% (27.2)% Total Flex revenue (5.3)% (3.3)% (5.7)% (5.8)% (6.4)% (7.9)% (5.2)% (5.0)% (7.8)% (12.8)% Year-Over-Year Growth Rates (Non-GAAP) 2025 2024 YTD Q4 Q3 Q2 Q1 YTD Q4 Q3 Q2 Q1 Billing Days 253 62 64 64 63 254 62 64 64 64 Technology Flex (4.4)% (3.3)% (5.5)% (5.0)% (3.5)% (7.1)% (5.2)% (5.1)% (6.4)% (11.4)% FA Flex (12.5)% (2.4)% (7.3)% (16.8)% (22.0)% (24.1)% (23.3)% (21.9)% (23.1)% (27.2)% Total Flex revenue (4.9)% (3.3)% (5.7)% (5.8)% (4.9)% (8.6)% (6.7)% (6.5)% (7.8)% (12.8)% Free Cash Flow.
Flex gross profit percentage (Flex gross profit as a percentage of Flex revenue) provides management with helpful insight into the other drivers of total gross profit percentage driven by our Flex business such as changes in the spread between the consultants’ bill rate and pay rate, changes in payroll tax rates or benefits costs, as well as the impact of billable expenses, which provide no profit margin.
The Flex gross profit percentage (Flex gross profit as a percentage of Flex revenue) provides management with helpful insight into the other drivers of total gross profit percentage driven by our Flex business, such as changes in the spread between the consultants’ bill rate and pay rate, changes in payroll tax rates or benefits costs, as well as the impact of billable expenses, which provide no profit margin.
Total payments, however, are inherently uncertain as the interest rates related to this outstanding balance are variable and the outstanding borrowings that will occur over the remaining term of the Amended and Restated Credit Facility are unknown. Refer to Note 12 - “Credit Facility” in the Notes to Consolidated Financial Statements, included in Item 8.
Total payments, however, are inherently uncertain as the interest rates related to this outstanding balance are variable and the outstanding borrowings that will occur over the remaining term of the Credit Facility are unknown. Refer to Note 12 – “Credit Facility” in the Notes to Consolidated Financial Statements, included in Item 8.
Financial Statements and Supplementary Data of this report, for a complete discussion of the valuation methodologies employed. NEW ACCOUNTING STANDARDS Refer to Note 1 – “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this report, for a discussion of new accounting standards.
Financial Statements and Supplementary Data of this report, for a complete discussion of the valuation methodologies employed. NEW ACCOUNTING STANDARDS Refer to Note 1 – “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this report, for a discussion of new accounting standards. 27 Table of Contents
Total compensation, commissions, payroll taxes and benefit costs as a percentage of SG&A represented 84.2%, 84.3% and 84.1% of SG&A for the years ended December 31, 2024, 2023 and 2022, respectively. Commissions and other bonus incentives are variable costs driven primarily by revenue and gross profit levels.
Total compensation, commissions, payroll taxes and benefit costs as a percentage of SG&A represented 84.0%, 84.2% and 84.3% of SG&A for the years ended December 31, 2025, 2024 and 2023, respectively. Commissions and other bonus incentives are variable costs driven primarily by revenue and gross profit levels.
A 0.5% change in our effective tax rate would have impacted our net income by approximately $0.3 million in 2024. Refer to Note 7 – “Income Taxes” in the Notes to Consolidated Financial Statements, included in Item 8.
A 0.5% change in our effective tax rate would have impacted our net income by approximately $0.2 million in 2025. Refer to Note 7 – “Income Taxes” in the Notes to Consolidated Financial Statements, included in Item 8.
“Free Cash Flow”, a non-GAAP financial measure, is defined by Kforce as net cash provided by operating activities determined in accordance with GAAP, less capital expenditures.
“Free Cash Flow,” a non-GAAP financial measure, is defined by Kforce as net cash provided by operating activities determined in accordance with GAAP, less capital expenditures.
The following table presents the Flex gross profit percentage for each segment and the percentage change over the prior period for the years ended December 31: 2024 Increase (Decrease) 2023 Increase (Decrease) 2022 Technology 25.7 % — % 25.7 % (2.7) % 26.4 % FA 29.1 % (2.7) % 29.9 % 0.7 % 29.7 % Total Flex gross profit percentage 25.9 % (0.4) % 26.0 % (3.0) % 26.8 % Our Flex gross profit percentage decreased 10 basis points for the year ended December 31, 2024, as compared to the same period in 2023. • Technology Flex gross profit margins remained stable at 25.7% for the year ended December 31, 2024, as compared to the same period in 2023.
The following table presents the Flex gross profit percentage for each segment and the percentage change over the prior period for the years ended December 31: 2025 Increase (Decrease) 2024 Increase (Decrease) 2023 Technology 25.6 % (0.4) % 25.7 % — % 25.7 % FA 28.3 % (2.7) % 29.1 % (2.7) % 29.9 % Total Flex gross profit percentage 25.8 % (0.4) % 25.9 % (0.4) % 26.0 % Our Flex gross profit percentage decreased 10 basis points for the year ended December 31, 2025, as compared to the same period in 2024. • Technology Flex gross profit margins decreased 10 basis points for the year ended December 31, 2025, as compared to the same period in 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 23, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 21, 2025.
As of December 31, 2024, the total amount of our obligations under these plans was $54.8 million. These amounts are included in the accompanying Consolidated Balance Sheets and classified as Accounts payable and other accrued liabilities and Other long-term liabilities, as appropriate, and are payable based upon the elections of the plan participants (e.g., retirement, termination of employment, change-in-control, etc.).
At December 31, 2025, the total amount of our obligations under these plans was $57.7 million. These amounts are included in the accompanying Consolidated Balance Sheets and classified as Accounts payable and other accrued liabilities and Other long-term liabilities, as appropriate, and are payable based upon the elections of the plan participants (e.g., retirement, termination of employment, change-in-control, etc.).
The following table presents the gross profit (gross profit as a percentage of total revenue) by segment and percentage change over the prior period: 2024 Increase (Decrease) 2023 Increase (Decrease) 2022 Technology 26.5 % (0.7) % 26.7 % (4.6) % 28.0 % FA 38.5 % (1.8) % 39.2 % 0.5 % 39.0 % Total gross profit percentage 27.4 % (1.8) % 27.9 % (4.8) % 29.3 % Total gross profit percentage decreased 50 basis points for the year ended December 31, 2024, as compared to the same period in 2023, primarily as a result of a decline in the mix of Direct Hire revenue.
The following table presents gross profit (gross profit as a percentage of total revenue) by segment and percentage change over the prior period: 2025 Increase (Decrease) 2024 Increase (Decrease) 2023 Technology 26.3 % (0.8) % 26.5 % (0.7) % 26.7 % FA 38.1 % (1.0) % 38.5 % (1.8) % 39.2 % Total gross profit percentage 27.2 % (0.7) % 27.4 % (1.8) % 27.9 % Total gross profit percentage decreased 20 basis points for the year ended December 31, 2025, as compared to the same period in 2024, primarily driven by a decline in the mix of Direct Hire revenue.
The following table presents certain items in our Consolidated Statements of Operations and Comprehensive Income as a percentage of revenue for the years ended: DECEMBER 31, 2024 2023 2022 Revenue by segment: Technology 92.0 % 90.4 % 88.1 % FA 8.0 9.6 11.9 Total Revenue 100.0 % 100.0 % 100.0 % Revenue by type: Flex 97.9 % 97.5 % 96.6 % Direct Hire 2.1 2.5 3.4 Total Revenue 100.0 % 100.0 % 100.0 % Gross profit 27.4 % 27.9 % 29.3 % Selling, general and administrative expenses 22.0 % 21.9 % 22.2 % Depreciation and amortization 0.4 % 0.3 % 0.3 % Income from operations 5.0 % 5.7 % 6.8 % Income from operations, before income taxes 4.8 % 5.6 % 6.0 % Net income 3.6 % 4.0 % 4.4 % 18 Table of Contents Revenue.
The following table presents certain items in our Consolidated Statements of Operations as a percentage of revenue for the years ended: December 31, 2025 2024 2023 Revenue by segment: Technology 92.6 % 92.0 % 90.4 % FA 7.4 8.0 9.6 Total Revenue 100.0 % 100.0 % 100.0 % Revenue by type: Flex 98.1 % 97.9 % 97.5 % Direct Hire 1.9 2.1 2.5 Total Revenue 100.0 % 100.0 % 100.0 % Gross profit 27.2 % 27.4 % 27.9 % Selling, general and administrative expenses 23.0 % 22.0 % 21.9 % Depreciation and amortization 0.4 % 0.4 % 0.3 % Income from operations 3.8 % 5.0 % 5.7 % Income before income taxes 3.5 % 4.8 % 5.6 % Net income 2.6 % 3.6 % 4.0 % 19 Table of Contents Revenue.
Adjusted EBITDA should not be considered a measure of financial performance under GAAP. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our past and future financial performance, and this presentation should not be construed as an inference by us that our future results will be unaffected by those items excluded from Adjusted EBITDA.
Items excluded from Adjusted EBITDA are significant components in understanding and assessing our past and future financial performance, and this presentation should not be construed as an inference by us that our future results will be unaffected by those items excluded from Adjusted EBITDA.
SG&A as a percentage of revenue increased 10 basis points for the year ended December 31, 2024, as compared to the same period in 2023.
SG&A as a percentage of revenue increased 100 basis points for the year ended December 31, 2025, as compared to the same period in 2024.
Therefore, as those levels change, these expenses would also generally be anticipated to change. 20 Table of Contents The following table presents certain components of SG&A as a percentage of total revenue for the years ended December 31: (in thousands) 2024 % of Revenue 2023 % of Revenue 2022 % of Revenue Compensation, commissions, payroll taxes and benefits costs $ 260,839 18.6 % $ 282,439 18.4 % $ 319,501 18.7 % Other (1) 48,963 3.4 % 52,494 3.5 % 60,314 3.5 % Total SG&A $ 309,802 22.0 % $ 334,933 21.9 % $ 379,815 22.2 % (1) Includes items such as credit loss expense, lease expense, professional fees, travel, communication and office-related expense, and certain other expenses.
Therefore, as those levels change, these expenses would also generally be anticipated to change. 21 Table of Contents The following table presents certain components of SG&A as a percentage of total revenue for the years ended December 31: (in thousands) 2025 % of Revenue 2024 % of Revenue 2023 % of Revenue Compensation, commissions, payroll taxes and benefits costs $ 256,842 19.3 % $ 260,839 18.6 % $ 282,439 18.4 % Other (1) 48,906 3.7 % 48,963 3.4 % 52,494 3.5 % Total SG&A $ 305,748 23.0 % $ 309,802 22.0 % $ 334,933 21.9 % (1) Includes items such as credit loss expense, lease expense, professional fees, travel, communication and office-related expense, and certain other expenses.
At December 31, 2024, our liability would be approximately $27.7 million for terminations related to a change in control and $8.8 million related to terminations in the absence of cause. Refer to Note 15 - “Commitments and Contingencies” in the Notes to Consolidated Financial Statements, included in Item 8.
At December 31, 2025, our liability would be approximately $29.6 million for terminations related to a change in control and $11.1 million related to terminations in the absence of cause. Refer to Note 15 – “Commitments and Contingencies” in the Notes to Consolidated Financial Statements, included in Item 8.
Investing Activities Cash used in investing activities was $7.6 million during the year ended December 31, 2024, and primarily consisted of cash used for capital expenditures.
Investing Activities Cash used in investing activities was $14.1 million during the year ended December 31, 2025, which primarily consisted of cash used for capital expenditures of $14.8 million. Cash used in investing activities was $7.6 million during the year ended December 31, 2024, which primarily consisted of cash used for capital expenditures of $7.6 million.
The following table presents depreciation and amortization expense and percentage change over the prior period by major category for the years ended December 31: (in thousands) 2024 Increase (Decrease) 2023 Increase (Decrease) 2022 Fixed asset depreciation $ 3,178 1.1 % $ 3,142 18.3 % $ 2,655 Capitalized software amortization 2,744 46.7 % 1,870 5.5 % 1,772 Total Depreciation and amortization $ 5,922 18.2 % $ 5,012 13.2 % $ 4,427 Other Expense, Net.
The following table presents depreciation and amortization expense and percentage change over the prior period by major category for the years ended December 31: (in thousands) 2025 Increase (Decrease) 2024 Increase (Decrease) 2023 Fixed asset depreciation $ 2,646 (16.7) % $ 3,178 1.1 % $ 3,142 Capitalized software amortization 2,902 5.8 % 2,744 46.7 % 1,870 Total Depreciation and amortization $ 5,548 (6.3) % $ 5,922 18.2 % $ 5,012 Other Expense, Net.
Flex gross profit margin remained flat for Technology and decreased 80 basis points for FA in 2024 as compared to 2023.
Flex gross profit margin decreased 10 basis points for Technology and 80 basis points for FA in 2025 as compared to 2024.
For compensation and related expenses, we have experienced a degree of SG&A deleverage as compared to 2023, as we continued to make investments in our strategic priorities and to retain our most productive associates to strategically position the Firm to capture an increased market share when the demand environment eventually improves.
For compensation and related expenses, we have been experiencing a degree of SG&A deleveraging as we continue to make investments in our strategic priorities and also retain our most productive associates to strategically position the Firm to capture an increased market share when the demand environment improves.
EXECUTIVE SUMMARY The following is an executive summary of what Kforce believes are highlights for 2024, which should be considered in the context of the additional discussions herein and in conjunction with the consolidated financial statements and notes thereto. • Revenue for the year ended December 31, 2024 decreased 8.3% to $1.41 billion in 2024 from $1.53 billion in 2023.
EXECUTIVE SUMMARY The following is an executive summary of what Kforce believes are highlights for the year ended December 31, 2025, which should be considered in the context of the additional discussions herein and in conjunction with the consolidated financial statements and notes thereto. • Revenue for the year ended December 31, 2025 decreased 5.4% (5.1% on a billing day basis) to $1.33 billion in 2025 from $1.41 billion in 2024.
Therefore, we believe it is important to view Free Cash Flow as a complement to, but not as a replacement for, our Consolidated Statements of Cash Flows. 22 Table of Contents The following table presents Free Cash Flow: YEARS ENDED DECEMBER 31, (in thousands) 2024 2023 2022 Net cash provided by operating activities $ 86,874 $ 91,465 $ 90,805 Capital expenditures (7,573) (7,763) (8,109) Free cash flow 79,301 83,702 82,696 Change in debt (8,900) 16,000 (74,400) Repurchases of common stock (41,938) (75,024) (74,913) Cash dividends (28,236) (27,562) (24,027) Proceeds from company-owned life insurance 2,377 — 1,077 Premiums paid for company-owned life insurance (2,368) (1,408) — Note receivable issued to our joint venture — (750) (6,750) Proceeds from the sale of our joint venture interest — 5,059 — Equity method investment — — (500) Other (6) (19) (51) Change in cash and cash equivalents $ 230 $ (2) $ (96,868) Adjusted EBITDA.
Therefore, we believe it is important to view Free Cash Flow as a complement to, but not as a replacement of, our Consolidated Statements of Cash Flows. 23 Table of Contents The following table presents Free Cash Flow: Years Ended December 31, (in thousands) 2025 2024 2023 Net cash provided by operating activities $ 61,645 $ 86,874 $ 91,465 Capital expenditures (14,840) (7,573) (7,763) Free cash flow 46,805 79,301 83,702 Change in debt 33,700 (8,900) 16,000 Repurchases of common stock (50,886) (41,938) (75,024) Cash dividends (27,493) (28,236) (27,562) Proceeds from company-owned life insurance 1,383 2,377 — Premiums paid for company-owned life insurance (686) (2,368) (1,408) Proceeds from the sale of our joint venture interest — — 5,059 Note receivable issued to our joint venture — — (750) Other (1,030) (6) (19) Change in cash and cash equivalents $ 1,793 $ 230 $ (2) Adjusted EBITDA.
Other expense, net was $2.1 million, $1.9 million and $14.4 million for the years ended December 31, 2024, 2023 and 2022, respectively. Other expense, net consists of our proportionate share of losses for our joint venture and interest expense related to outstanding borrowings under our credit facility.
Other expense, net was $3.1 million, $2.1 million and $1.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. Other expense, net consists of interest expense related to outstanding borrowings under our credit facility.
The following table presents a summary of our net cash flows from operating, investing and financing activities (in thousands): YEARS ENDED DECEMBER 31, Cash Provided by (Used in) 2024 2023 2022 Operating activities $ 86,874 $ 91,465 $ 90,805 Investing activities (7,564) (4,862) (14,282) Financing activities (79,080) (86,605) (173,391) Change in cash and cash equivalents $ 230 $ (2) $ (96,868) Operating Activities Cash provided by operating activities was $86.9 million during the year ended December 31, 2024, as compared to $91.5 million during the year ended December 31, 2023.
The following table presents a summary of our net cash flows from operating, investing and financing activities (in thousands): Years Ended December 31, Cash provided by (used in): 2025 2024 2023 Operating activities $ 61,645 $ 86,874 $ 91,465 Investing activities (14,143) (7,564) (4,862) Financing activities (45,709) (79,080) (86,605) Change in cash and cash equivalents $ 1,793 $ 230 $ (2) Operating Activities Cash provided by operating activities was $61.6 million during the year ended December 31, 2025, as compared to $86.9 million during the year ended December 31, 2024.
In January 2025, Kforce’s Board approved an increase to the Company's dividend from $1.52 per share to $1.56 per share, which is the sixth consecutive annual increase.
In January 2026, the Board approved an increase to the Company's dividend from $1.56 per share to $1.60 per share, which is the seventh consecutive annual increase.
At December 31, 2024 and 2023, we had $32.7 million and $41.6 million outstanding under our Amended and Restated Credit Facility, respectively, and the borrowing availability was $166.3 million and $157.2 million, respectively, subject to certain covenants. At December 31, 2024, Kforce had $112.9 million in working capital compared to $141.5 million at December 31, 2023.
At December 31, 2025 and 2024, we had $66.4 million and $32.7 million outstanding under our Credit Facility, respectively, and the borrowing availability was $132.5 million and $166.3 million, respectively, subject to certain covenants. At December 31, 2025, Kforce had $88.5 million in working capital compared to $112.9 million at December 31, 2024.
As of December 31, 2024, $32.7 million was outstanding and $166.3 million, net of $1.0 million in letters of credit outstanding, was available under the Amended and Restated Credit Facility. As of December 31, 2024, we were in compliance with all of our financial covenants.
At December 31, 2025, $66.4 million was outstanding and $132.5 million, net of $1.1 million in letters of credit outstanding, was available under our Credit Facility. At December 31, 2024, $32.7 million was outstanding under our prior credit facility. At December 31, 2025, we were in compliance with all of our financial covenants under the Credit Facility.
The following table presents the key drivers for the change in Flex revenue by segment over the prior period (in thousands): YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 2024 vs. 2023 2023 vs. 2022 Key Drivers - Increase (Decrease) Technology FA Technology FA Volume - hours billed $ (90,372) $ (32,440) $ (141,498) $ (57,647) Bill rate 3,092 2,469 33,320 8,949 Billable expenses (100) 21 (1,782) (18) Total change in Flex revenue $ (87,380) $ (29,950) $ (109,960) $ (48,716) The following table presents total Flex hours billed by segment and the percentage change over the prior period for the years ended December 31: (in thousands) 2024 Increase (Decrease) 2023 Increase (Decrease) 2022 Technology 14,171 (6.6) % 15,178 (9.6) % 16,794 FA 1,902 (25.4) % 2,550 (32.7) % 3,789 Total Flex hours billed 16,073 (9.3) % 17,728 (13.9) % 20,583 Direct Hire Revenue.
The following table presents the key drivers for the change in Flex revenue by segment over the prior period (in thousands): Year Ended December 31, Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 Key Drivers - Increase (Decrease) Technology FA Technology FA Volume - hours billed $ (59,777) $ (14,926) $ (90,372) $ (32,440) Bill rate (971) 2,436 3,092 2,469 Billable expenses 150 (19) (100) 21 Total change in Flex revenue $ (60,598) $ (12,509) $ (87,380) $ (29,950) The following table presents total Flex hours billed by segment and the percentage change over the prior period for the years ended December 31: (in thousands) 2025 Increase (Decrease) 2024 Increase (Decrease) 2023 Technology 13,506 (4.7) % 14,171 (6.6) % 15,178 FA 1,611 (15.3) % 1,902 (25.4) % 2,550 Total Flex hours billed 15,117 (5.9) % 16,073 (9.3) % 17,728 Direct Hire Revenue.
The following table presents the key drivers for the change in Flex gross profit by segment over the prior period (in thousands): YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 2024 vs. 2023 2023 vs. 2022 Key Drivers - Increase (Decrease) Technology FA Technology FA Revenue impact (volume) $ (22,448) $ (8,948) $ (29,079) $ (14,483) Profitability impact (rate) (364) (743) (10,333) 187 Total change in Flex gross profit $ (22,812) $ (9,691) $ (39,412) $ (14,296) SG&A Expenses.
The following table presents the key drivers for the change in Flex gross profit by segment over the prior period (in thousands): Year Ended December 31, Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 Key Drivers - Increase (Decrease) Technology FA Technology FA Revenue impact (volume) $ (15,550) $ (3,642) $ (22,448) $ (8,948) Profitability impact (bill rate) (971) (715) (364) (743) Total change in Flex gross profit $ (16,521) $ (4,357) $ (22,812) $ (9,691) SG&A Expenses.
Consequently, management believes it is useful information to investors. The measure should not be considered in isolation or as an alternative to net income, cash flows or other financial statement information presented in the consolidated financial statements as indicators of financial performance or liquidity. The measure is not determined in accordance with GAAP and is thus susceptible to varying calculations.
Consequently, management believes it is useful information to investors. The measure should not be considered in isolation or as an alternative to net income, cash flows or other financial statement information presented in the consolidated financial statements as indicators of financial performance or liquidity. Also, Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies.
Refer to Note 12 - “Credit Facility” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this report for a complete discussion of the Amended and Restated Credit Facility.
Refer to Note 12 – “Credit Facility” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data for further details on the Credit Facility.
The following table presents revenue by type for each segment and the percentage change from the prior period for the years ended December 31: (in thousands) 2024 Increase (Decrease) 2023 Increase (Decrease) 2022 Technology Flex revenue $ 1,278,715 (6.4) % $ 1,366,095 (7.4) % $ 1,476,055 Direct Hire revenue 14,028 (24.0) % 18,458 (41.5) % 31,572 Total Technology revenue $ 1,292,743 (6.6) % $ 1,384,553 (8.2) % $ 1,507,627 FA Flex revenue $ 97,729 (23.5) % $ 127,679 (27.6) % $ 176,395 Direct Hire revenue 14,836 (24.0) % 19,524 (27.0) % 26,743 Total FA revenue $ 112,565 (23.5) % $ 147,203 (27.5) % $ 203,138 Total Flex revenue $ 1,376,444 (7.9) % $ 1,493,774 (9.6) % $ 1,652,450 Total Direct Hire revenue 28,864 (24.0) % 37,982 (34.9) % 58,315 Total Revenue $ 1,405,308 (8.3) % $ 1,531,756 (10.5) % $ 1,710,765 Flex Revenue.
The following table presents revenue by type for each segment and the percentage change from the prior period for the years ended December 31: (in thousands) 2025 Increase (Decrease) 2024 Increase (Decrease) 2023 Technology Flex revenue $ 1,218,117 (4.7) % $ 1,278,715 (6.4) % $ 1,366,095 Direct Hire revenue 12,154 (13.4) % 14,028 (24.0) % 18,458 Total Technology revenue $ 1,230,271 (4.8) % $ 1,292,743 (6.6) % $ 1,384,553 FA Flex revenue $ 85,220 (12.8) % $ 97,729 (23.5) % $ 127,679 Direct Hire revenue 13,516 (8.9) % 14,836 (24.0) % 19,524 Total FA revenue $ 98,736 (12.3) % $ 112,565 (23.5) % $ 147,203 Total Flex revenue $ 1,303,337 (5.3) % $ 1,376,444 (7.9) % $ 1,493,774 Total Direct Hire revenue 25,670 (11.1) % 28,864 (24.0) % 37,982 Total Revenue $ 1,329,007 (5.4) % $ 1,405,308 (8.3) % $ 1,531,756 Flex Revenue.
Our FA business experienced a decrease in Flex revenue of 23.5% (24.1% per billing day) during the year ended December 31, 2024, as compared to the same period in 2023, primarily driven by a decrease in the number of consultants on assignment.
Our FA business experienced a decrease in Flex revenue of 12.8% (12.5% on a billing day basis) during the year ended December 31, 2025, as compared to the same period in 2024, primarily driven by a decrease in consultants on assignment, which we believe is primarily related to macroeconomic uncertainties.
Off-Balance Sheet Arrangements We do not have off-balance sheet arrangements that have or are reasonably likely to have a material impact on our liquidity or capital resources.
Financial Statements and Supplementary Data for additional information regarding our commitments related to employment agreements. Off-Balance Sheet Arrangements We do not have off-balance sheet arrangements that have or are reasonably likely to have a material impact on our liquidity or capital resources.
Gross profit is determined by deducting direct costs (primarily consultant compensation, payroll taxes and certain fringe benefits, as well as independent contractor costs) from total revenue. In addition, there are no consultant payroll costs associated with Direct Hire placements; thus, all Direct Hire revenue increases gross profit by the full amount of the placement fee.
In addition, there are no consultant payroll costs associated with Direct Hire placements; thus, all Direct Hire revenue increases gross profit by the full amount of the placement fee.
Credit Facility On October 20, 2021, the Firm entered into an Amended and Restated Credit Facility, which has a maximum borrowing capacity of $200.0 million, and subject to certain conditions and the participation of the lenders, may be increased up to an aggregate additional amount of $150.0 million.
Under the Credit Facility, the Firm has a maximum borrowing capacity of $200.0 million, which includes a $10.0 million sublimit for the issuance of standby and commercial letters and $10.0 million sublimit for swingline loans, and may, subject to certain conditions and the participation of the lenders, be increased up to an aggregate additional amount of $150.0 million.
During the years ended December 31, 2024, 2023 and 2022, we recognized nil, $0.8 million, and $3.8 million, respectively, related to our share of losses associated with our equity method investment. Refer to Note 1 - “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements, included in Item 8.
During the year ended December 31, 2023, we recognized $0.8 million in Other expense, net related to our proportionate share of losses for our joint venture. Refer to Note 1 – “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements, included in Item 8.
This change was primarily driven by a decrease in repurchases of common stock driven by lower operating cash flows, partially offset by the net payments made on our Amended and Restated Credit Facility. 24 Table of Contents The following table presents the cash flow impact of the common stock repurchase activity for the years ended December 31: (in thousands) 2024 2023 2022 Open market repurchases $ 37,162 $ 67,178 $ 66,806 Repurchased shares withheld for tax withholding upon vesting of restricted stock 4,776 7,846 8,107 Total cash flow impact from Repurchases of common stock $ 41,938 $ 75,024 $ 74,913 Cash paid in current year for settlement of prior year repurchases $ 920 $ 974 $ 181 Kforce’s Board declared and paid dividends of $28.2 million ($1.52 per share), $27.6 million ($1.44 per share) and $24.0 million ($1.20 per share) for the years ended December 31, 2024, 2023 and 2022, respectively.
The following table presents the cash flow impact of the common stock repurchase activity for the years ended December 31: (in thousands) 2025 2024 2023 Open market repurchases $ 48,612 $ 37,162 $ 67,178 Repurchased shares withheld for tax upon vesting of restricted stock 2,273 4,776 7,846 Total cash flow impact from Repurchases of common stock $ 50,885 $ 41,938 $ 75,024 Cash paid in current year for settlement of prior year repurchases $ 260 $ 920 $ 974 The Board declared and paid dividends of $27.5 million ($1.56 per share), $28.2 million ($1.52 per share) and $27.6 million ($1.44 per share) for the years ended December 31, 2025, 2024 and 2023, respectively.
Flex revenue for our Technology business decreased 6.4% (7.1% per billing day) during the year ended December 31, 2024, as compared to the same period in 2023, primarily due to a decrease in the number of consultants on assignment. The average bill rate was approximately $90 per hour for 2024, which remained flat as compared to 2023.
Flex revenue for our Technology business decreased 4.7% (4.4% on a billing day basis) during the year ended December 31, 2025, as compared to the same period in 2024, primarily due to a decrease in consultants on assignment, which we believe is primarily related to macroeconomic uncertainties.
In the first quarter of 2025, we expect Technology Flex revenue to decline sequentially on a billing day basis in the low to mid-single digits, at a level that is largely consistent with pre-pandemic levels and in the low single digits year over year.
In the first quarter of 2026, we expect FA Flex revenue to decline sequentially on a billing day basis in the mid-single digits and to increase in the mid to high single digits year over year.
The decrease in Other SG&A expenses was primarily attributable to lower professional fees pertaining to the settlement of legal claims in 2023. We continue to prioritize investments in our strategic initiatives, including the implementation of Workday as part of our back-office transformation program, integrated strategy efforts, and the evolution of our nearshore and offshore delivery capabilities.
We continue to prioritize investments in our strategic initiatives, including the implementation of Workday as part of our back-office transformation program, integrated strategy efforts, the evolution of our nearshore and offshore delivery capabilities, and driving our strategy through leverage of AI. Depreciation and Amortization.
We expect Technology Flex gross profit margins for the first quarter of 2025 to remain stable year over year. • FA Flex gross profit margins decreased 80 basis points for the year ended December 31, 2024, as compared to the same period in 2023, primarily driven by a greater mix of lower margin projects, which was partially offset by lower healthcare costs.
In the first quarter of 2026, we expect Technology Flex gross profit margins to decline sequentially as a result of seasonal payroll tax resets. • FA Flex gross profit margins decreased 80 basis points for the year ended December 31, 2025, as compared to the same period in 2024, primarily driven by changes in our client portfolio mix.
Financial Statements and Supplementary Data for further details on the Amended and Restated Credit Facility. 25 Table of Contents • We maintain various non-qualified deferred compensation plans pursuant to which eligible management and highly-compensated key employees may elect to defer all or part of their compensation to later years.
Financial Statements and Supplementary Data for additional information regarding our lease obligations and the timing of expected future payments, including a five-year maturity schedule. • We maintain various non-qualified deferred compensation plans pursuant to which eligible management and highly-compensated key employees may elect to defer all or part of their compensation to later years.
Financial Statements and Supplementary Data of this report, for a more detailed discussion on the sale of our equity method investment in February 2023. Income Tax Expense. Income tax expense as a percentage of income from operations, before income taxes (our “effective tax rate”) were 25.4%, 28.4% and 26.4% for the years ended December 31, 2024, 2023 and 2022, respectively.
Financial Statements and Supplementary Data of this report, for a more detailed discussion on the sale of our equity method investment in February 2023. Income Tax Expense.
Financing Activities Cash used in financing activities was $79.1 million during the year ended December 31, 2024, as compared to $86.6 million during the year ended December 31, 2023.
The increase in capital expenditures relates to continued investments in the implementation of Workday. Financing Activities Cash used in financing activities was $45.7 million during the year ended December 31, 2025, as compared to $79.1 million during the year ended December 31, 2024.
We believe that existing cash and cash equivalents, operating cash flows and available borrowings under our Amended and Restated Credit Facility will be adequate to meet the capital expenditure and working capital requirements of our operations for at least the next 12 months, and the foreseeable future, which we believe will provide us the flexibility to continue returning significant capital to our shareholders.
The declaration, payment and amount of future dividends are discretionary and will be subject to determination by our Board each quarter following its review of, among other things, the Firm’s current and expected financial performance as well as the ability to pay dividends under applicable law. 25 Table of Contents We believe that existing cash and cash equivalents, operating cash flows and available borrowings under our Credit Facility will be adequate to meet the capital expenditure and working capital requirements of our operations for at least the next 12 months, and the foreseeable future, which we believe will provide us the flexibility to continue returning significant capital to our shareholders.
As of December 31, 2024, the value of our unconditional purchase obligations with a remaining term in excess of one year was $30.7 million. • We have employment agreements with certain executives that provide for minimum compensation, salary and continuation of certain benefits for a one-year to a three-year period after their employment ends under certain circumstances.
Financial Statements and Supplementary Data for additional information regarding our purchase commitments. • We have employment agreements with certain executives that provide for minimum compensation, salary and continuation of certain benefits for a one-year to a three-year period after their employment ends under certain circumstances.
Stock Repurchases The following table presents the open market repurchase activity under the Board-authorized common stock repurchase program for the years ended December 31: 2024 2023 (in thousands) Shares $ Shares $ Open market repurchases 609 $ 36,502 1,097 $ 67,124 As of December 31, 2024, $63.5 million remained available for further repurchases under the Board-authorized common stock repurchase program.
Stock Repurchases The following table presents the open market repurchase activity under the Board-authorized common stock repurchase program for the years ended December 31: 2025 2024 (in thousands) Shares $ Shares $ Open market repurchases 1,205 $ 48,552 609 $ 36,502 In October 2025, the Board approved a change to the stock repurchase program, increasing the total authorization to $100 million.
Financial Statements and Supplementary Data of this report, for a complete discussion of the components of our income tax expense, as well as the temporary differences that exist as of December 31, 2024. 26 Table of Contents Goodwill Impairment Goodwill is tested at the reporting unit level, which is generally an operating segment or one level below the operating segment level, where a business operates and for which discrete financial information is available and reviewed by segment management.
Goodwill Impairment Goodwill is tested at the reporting unit level, which is generally an operating segment or one level below the operating segment level, where a business operates and for which discrete financial information is available and reviewed by segment management.
We suggest that you evaluate these items and the potential risks of excluding such items when analyzing our financial position. 23 Table of Contents The following table presents Adjusted EBITDA and includes a reconciliation of net income to Adjusted EBITDA: YEARS ENDED DECEMBER 31, (in thousands) 2024 2023 2022 Net income $ 50,414 $ 61,075 $ 75,431 Depreciation and amortization 5,922 5,012 4,427 Stock-based compensation expense 14,044 17,747 17,655 Interest expense, net 2,097 1,122 973 Income tax expense 17,210 24,175 27,011 Organizational realignment activities — 3,662 — Legal settlement expense — 2,175 — Loss from equity method investment — 750 3,824 Reserve associated with note receivable issued to our joint venture — — 1,925 Impairment of equity method investment — — 13,684 Gain from termination of interest rate swap — — (4,059) Adjusted EBITDA $ 89,687 $ 115,718 $ 140,871 LIQUIDITY AND CAPITAL RESOURCES To meet our capital and liquidity requirements, we primarily rely on operating cash flow, as well as borrowings under our credit facility.
The following table presents Adjusted EBITDA and includes a reconciliation of Net income to Adjusted EBITDA: Years Ended December 31, (in thousands) 2025 2024 2023 Net income $ 34,825 $ 50,414 $ 61,075 Depreciation and amortization 5,548 5,922 5,012 Stock-based compensation expense 13,742 14,044 17,747 Interest expense, net 3,122 2,097 1,122 Income tax expense 12,120 17,210 24,175 Organizational realignment activities 1,200 — 3,662 Legal settlement expense — — 2,175 Loss from equity method investment — — 750 Other (1) 2,233 — — Adjusted EBITDA $ 72,790 $ 89,687 $ 115,718 (1) Other includes non-recurring expenses to further streamline our operating costs, including the write-off of previously capitalized software. 24 Table of Contents LIQUIDITY AND CAPITAL RESOURCES To meet our capital and liquidity requirements, we primarily rely on operating cash flows, as well as borrowings under our Credit Facility (as defined below).
“Adjusted EBITDA”, a non-GAAP financial measure, is defined by Kforce as net income before depreciation and amortization; stock-based compensation expense; interest expense, net; income tax expense; organizational realignment activities; legal settlement expense; loss from equity method investment; reserve associated with the note receivable issued to our joint venture; impairment of equity method investment; and gain from termination of interest rate swap.
“Adjusted EBITDA,” a non-GAAP financial measure, is defined by Kforce as net income before depreciation and amortization; stock-based compensation expense; interest expense, net; income tax expense; organizational realignment activities; legal settlement expense; loss from equity method investment; and other non-recurring expenses. Adjusted EBITDA should not be considered a measure of financial performance under GAAP.
To mitigate the pressure on our profitability levels from the revenue and gross profit declines, we have taken certain actions to align our costs such as tight discretionary spend control and decreases in personnel, specifically within our delivery capabilities.
To mitigate the pressure on our profitability levels from the revenue and gross profit declines, we continue to take actions to align our costs with revenue levels and productivity expectations and also continue to exercise tight discretionary spend control.
Our largest source of operating cash flows is the collection of trade receivables, and our largest use of operating cash flows is the payment of our associate and consultant compensation. The year-over-year decrease was primarily driven by lower profitability levels, lower collections of trade receivables, and continued management of working capital partially offset by the timing of payments.
Our largest source of operating cash flows is the collection of trade receivables, and our largest use of operating cash flows is the payment of our associate and consultant compensation.
Financial Statements and Supplementary Data for additional information regarding our commitments related to employment agreements. • We lease certain facilities and other properties under non-cancellable operating lease arrangements that expire at various dates through 2033. As of December 31, 2024, the total amount of our obligations under operating leases was $17.0 million.
Contractual Obligations In addition to our discussion and analysis surrounding our liquidity and capital resources, consideration should also be given to significant contractual obligations: • We lease certain facilities and other properties under non-cancellable operating lease arrangements that expire at various dates through 2033. At December 31, 2025, the total amount of our obligations under operating leases was $18.5 million.
The key drivers of Direct Hire revenue are the number of placements and the associated placement fee. Direct Hire revenue also includes conversion revenue, which may occur when a consultant initially assigned to a client on a temporary basis is later converted to a permanent placement for a fee.
Direct Hire revenue also includes conversion revenue, which may occur when a consultant initially assigned to a client on a temporary basis is later converted to a permanent placement for a fee. 20 Table of Contents Direct Hire revenue decreased 11.1% during the year ended December 31, 2025, as compared to the same period in 2024, primarily driven by a decrease in placements, partially offset by an increase in placement fees.
In 2024, Flex revenue decreased 6.4% for Technology (7.1% on a billing day basis) and decreased 23.5% for FA (24.1% on a billing day basis).
In 2025, Flex revenue decreased 4.7% (4.4% on a billing day basis) for Technology and 12.8% (12.5% on a billing day basis) for FA. Notably, Tech Flex revenue decreased 0.2% sequentially (increased 3.0% on a billing day basis), and FA Flex revenue improved sequentially 2.4% (5.7% on a billing day basis) in the fourth quarter 2025.
We have not made any material changes in our accounting methodologies used in prior years. Accounting for Income Taxes Our effective income tax rate is influenced by tax planning opportunities available to us in the various jurisdictions in which we conduct business.
Management uses significant judgment and complexity related to these estimates and are required to make assumptions related to inherently uncertain factors that could have a material impact on reported amounts. Accounting for Income Taxes Our effective income tax rate is influenced by tax planning opportunities available to us in the various jurisdictions in which we conduct business.
As a result of this mix, we expect FA Flex gross profit margins for the first quarter of 2025 to be down on a year-over-year basis.
In the first quarter of 2026, we expect FA Flex gross profit margins to decline sequentially as a result of seasonal payroll tax resets.
The total capital returned to shareholders in 2024 represented approximately 75% of operating cash flows. • Cash provided by operating activities was $86.9 million during the year ended December 31, 2024, as compared to $91.5 million for 2023. 17 Table of Contents RESULTS OF OPERATIONS Certain discussions of the changes in our results of operations from the year ended December 31, 2023, as compared to the year ended December 31, 2022, have been omitted from this Form 10-K, and may be found in “Item 7.
The total capital returned to shareholders in 2025 represented over 100% of operating cash flows. • Cash provided by operating activities was $61.6 million during the year ended December 31, 2025, as compared to $86.9 million for 2024.
Revenue decreased 6.6% and 23.5% for Technology and FA, respectively, in 2024, primarily driven by the ongoing macroeconomic uncertainty. • Flex revenue decreased 7.9% to $1.38 billion (8.6% on a billing day basis) in 2024 from $1.49 billion in 2023.
Revenue decreased 4.8% (4.5% on a billing day basis) and 12.3% (11.9% on a billing day basis) for Technology and FA, respectively, in 2025, primarily driven by decreases in consultants on assignment.
Our average bill rate of $51 per hour for the year ended December 31, 2024 was up slightly on a year-over-year basis. In the first quarter of 2025, we expect FA Flex revenue to decline sequentially on a billing day basis in the low double digits following greater than expected year-end assignment ends.
Our average Technology bill rate was approximately $90 per hour for the year ended December 31, 2025, which remained flat as compared to 2024. Notably, Flex revenues in our Technology business in the fourth quarter of 2025 improved 3.0% sequentially on a billing day basis.
These decreases were driven by a decline in the number of consultants on assignment. • Direct Hire revenue decreased 24.0% to $28.9 million in 2024 from $38.0 million in 2023. • Gross profit margin decreased 50 basis points to 27.4% in 2024 from 27.9% in 2023, primarily as a result of a decline in the mix of Direct Hire revenue. • Flex gross profit margin decreased 10 basis points to 25.9% for 2024 from 26.0% in 2023.
For our FA business, this represented the third consecutive quarter of sequential improvement, primarily due to, in our opinion, the benefits of a realignment in early 2025 intended to bring a greater intensity and focus on our FA business. • Direct Hire revenue decreased 11.1% to $25.7 million in 2025 from $28.9 million in 2024. • Gross profit margin decreased 20 basis points to 27.2% in 2025 from 27.4% in 2024, primarily driven by a decline in the mix of Direct Hire revenue. • Flex gross profit margin decreased 10 basis points to 25.8% for 2025 from 25.9% in 2024.
The decrease in FA was primarily driven by a greater mix of lower margin projects. • Selling, General and Administrative (“SG&A”) expenses as a percentage of revenue for the year ended December 31, 2024, increased slightly to 22.0% from 21.9% in 2023. • Net income for the year ended December 31, 2024, decreased 17.5% to $50.4 million, or $2.68 per share, from $61.1 million, or $3.13 per share, in 2023. • The Firm returned $64.7 million of capital to our shareholders in the form of open market repurchases totaling $36.5 million, or 0.6 million shares, and quarterly dividends totaling $28.2 million during the year ended December 31, 2024.
In the fourth quarter of 2025, we recognized charges of $3.4 million related to refinements in our organizational structure and other non-recurring costs, which negatively impacted earnings per share for the fourth quarter of 2025 and fiscal 2025 by $0.13, net of the related tax effect. • Net income for the year ended December 31, 2025, decreased 30.9% to $34.8 million, or $1.96 diluted earnings per share, from $50.4 million, or $2.68 diluted earnings per share, in 2024. • The Firm returned $76.0 million of capital to our shareholders in the form of open market repurchases totaling $48.5 million, or 1.2 million shares, and quarterly dividends totaling $27.5 million during the year ended December 31, 2025.
Refer to Note 10 - “Operating Leases” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data for additional information regarding our lease obligations and the timing of expected future payments, including a five-year maturity schedule.
Refer to Note 10 – “Operating Leases” in the Notes to Consolidated Financial Statements, included in Item 8.
Amounts payable upon the retirement or termination of employment may become payable during the next five years if a covered employee retires, terminates, or schedules a distribution. • Our purchase commitments consist of agreements to purchase goods and services entered into in the ordinary course of business.
Amounts may become payable during the next five years if a covered employee retires, terminates, or schedules an in-service distribution. Kforce maintains a Rabbi Trust and holds life insurance policies on certain individuals to assist in the funding of the deferred compensation liability.
Management believes that the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results, and require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.
CRITICAL ACCOUNTING ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Management believes that the following accounting policies and estimates are critical to understanding and evaluating our financial results.
Direct Hire revenue decreased 24.0% during the year ended December 31, 2024, as compared to the same period in 2023, primarily driven by a decrease in placements. We expect Direct Hire revenue to be stable in the first quarter of 2025 year over year. 19 Table of Contents Gross Profit.
Notably, our Flex gross profit margin increased 40 basis points in our Technology business in the fourth quarter of 2025 as compared to the same period in 2024. • Selling, General and Administrative (“SG&A”) expenses as a percentage of revenue for the year ended December 31, 2025, increased to 23.0% from 22.0% in 2024, primarily driven by the declines in revenue and gross profit.
Removed
Our performance continued to be adversely affected by the ongoing macroeconomic uncertainty, which resulted in our clients being more cautious with the level of investment in their digital transformation efforts.
Added
We believe these decreases are primarily related to macroeconomic uncertainties and the natural impacts of the early phases of significant technology evolutions (such as AI) as companies assess the implications on their businesses and their investment strategies. • Flex revenue decreased 5.3% (4.9% on a billing day basis) to $1.30 billion in 2025 from $1.38 billion in 2024.
Removed
With that said, our Technology business was largely stable throughout 2024 as indicated by our sequential billing day growth in both the second and fourth quarters of 2024 with a slight sequential decline in the third quarter.
Added
The decrease was primarily related to lower profitability levels, higher capitalized implementation costs related to cloud computing arrangements for Workday, and the payment of 2024 federal income taxes that were deferred pursuant to IRS guidance. 18 Table of Contents RESULTS OF OPERATIONS Certain discussions of the changes in our results of operations from the year ended December 31, 2024, as compared to the year ended December 31, 2023, have been omitted from this Form 10-K, and may be found in “Item 7.
Removed
Against the backdrop of revenue declines, we continued to manage down our overall headcount levels, especially in our delivery roles, and tightly control spend levels in order to mitigate the pressure on profitability from the lower revenue and gross margin levels.
Added
While early 2025 began with optimism around U.S. economic growth and increased investment in technology initiatives, the macro environment remained challenging throughout the year, with significant disruption beginning in April 2025 as a result of global trade policy negotiations and the labor market data continuing to reflect a persistently weak and largely frozen hiring landscape characterized by prolonged stagnation in job gains.
Removed
The political landscape in the U.S. remains unclear, particularly in relation to the impacts of the potential policy changes from the new administration. Geopolitical risks persist, including uncertainty in the Middle East and global supply chain disruptions.
Added
We believe the relative impact of AI on revenue trends and the effects of a fairly soft economy and weak labor market has created uncertainty, leading many organizations to proceed cautiously in their strategic planning and near‑term technology investments.
Removed
Despite these challenges, the U.S. economy demonstrated consistent growth in 2024, with real GDP expanding at 2.8%, largely driven by increased government spending and a healthy consumer. Although the unemployment rate rose to 4.1% in December 2024 from 3.7% in December 2023, employment grew across most sectors in the final quarter of 2024.
Added
Despite these conditions, our recent operating trends, combined with our historical experience, give us confidence that companies typically turn to flexible talent solutions as an initial step prior to making permanent hires while they assess the durability of the macro environment.
Removed
Additionally, the Federal Reserve cut interest rates by a total of 100 basis points in late 2024, but the prospects for further interest rate cuts in 2025 appear less certain with inflation being a bit stickier and the labor markets continuing to show signs of strength.
Added
The potential use of flexible talent solutions may be further influenced by the growing belief that the returns that will be generated from continuing AI investments may take longer to realize and may be more specific in nature to unique business problems rather than an overarching solution to all technology challenges.
Removed
The impact from a tighter pricing environment in 2023 that carried over into 2024 was offset by lower healthcare costs. Overall bill and pay spreads in our Technology business were largely stable throughout 2024 with a slight improvement in the second half of 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. In addition to the inherent operational risks, Kforce is exposed to certain market risks, primarily related to changes in interest rates. As of December 31, 2024, we had $32.7 million outstanding under the Amended and Restated Credit Facility.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. In addition to the inherent operational risks, Kforce is exposed to certain market risks, primarily related to changes in interest rates. At December 31, 2025, we had $66.4 million outstanding under the Credit Facility.
A hypothetical 10% increase in interest rates in effect at December 31, 2024 would increase Kforce’s annual interest expense by less than $0.2 million. Refer to Note 12 - “Credit Facility” in the Notes to Consolidated Financial Statements, included in Item 8.
A hypothetical 10% increase in interest rates in effect at December 31, 2025 would increase Kforce’s annual interest expense by less than $0.5 million. Refer to Note 12 – “Credit Facility” in the Notes to Consolidated Financial Statements, included in Item 8.
Financial Statements and Supplementary Data of this report, for a complete discussion of the Amended and Restated Credit Facility. 27 Table of Contents
Financial Statements and Supplementary Data of this report, for a complete discussion of the Credit Facility. 28 Table of Contents

Other KFRC 10-K year-over-year comparisons