Wed, Apr 30, 8:56 PM (17 days ago)
### Kforce Inc. (KFRC) Q1 2025 Financial Summary **Overview:** Kforce Inc. (KFRC) reported a mixed quarter for Q1 2025, with revenue and profit margins declining due to macroeconomic uncertainties. The company's strategic initiatives and cost management efforts are aimed at mitigating these challenges and positioning for future growth. **Financial Performance:** - **Revenue:** Decreased by 6.2% to $330.0 million from $351.9 million in Q1 2024. Technology segment revenue fell by 4.9%, while the Finance and Accounting (FA) segment saw a 20.3% decline. - **Gross Profit Margin:** Dropped by 40 basis points to 26.7% from 27.1% in Q1 2024, primarily due to a decline in Flex gross profit margins. - **Net Income:** Decreased by 25.9% to $8.1 million, or $0.45 per share, from $11.0 million, or $0.58 per share, in Q1 2024. - **Cash Flow:** Cash provided by operating activities was $0.2 million, down from $13.2 million in Q1 2024, due to higher tax payments and timing of cash receipts. **Segment Performance:** - **Technology Segment:** Revenue decreased by 4.9%, with Flex revenue down by 5.0%. Gross profit margin declined by 40 basis points due to higher healthcare costs. - **FA Segment:** Revenue declined by 20.3%, with Flex revenue down by 23.2%. Gross profit margin decreased by 190 basis points due to a tighter pricing environment and higher healthcare costs. **Operational Highlights:** - **Capital Return:** Kforce returned $28.3 million to shareholders through open market repurchases and dividends. - **Cost Management:** The company continues to invest in strategic priorities, including the implementation of Workday, and is prioritizing investments in nearshore and offshore delivery capabilities. - **Credit Facility:** As of March 31, 2025, $65.5 million was outstanding under the credit facility, with $133.4 million available. **Future Outlook:** - **Uncertainties:** Macroeconomic uncertainties and potential tariffs may continue to impact client confidence and investment in technology initiatives. - **Strategic Initiatives:** Kforce is focusing on retaining talented associates and adapting to changes in client demand to capture increased market share when the demand environment improves. - **Financial Health:** The company expects to maintain compliance with credit facility covenants and has adequate liquidity to meet capital expenditure and working capital requirements. **Conclusion:** Kforce Inc. faced headwinds in Q1 2025 due to macroeconomic uncertainties, leading to declines in revenue and profit margins. However, the company's strategic investments and cost management efforts are aimed at positioning it for future growth and capturing market share as economic conditions improve.