third quarter of 2026
Filed Oct 26, 2026KFORCE REPORTS THIRD QUARTER 2026 REVENUE OF $357.8 MILLION, EXCEEDING HIGH-END OF GUIDANCE, AND IMPROVING 7.5% YEAR OVER YEAR
Revenue exceeded the high end of guidance, Technology Flex revenue grew 7.8% year over year, gross profit margin expanded 50 basis points year over year, and diluted earnings per share increased 42.9% year over year. The quarter included a $0.12 per-share benefit from a gain on company-owned life insurance policies.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, Q3 2026GAAP | $357.8M | 2.4% | 7.5% |
| Direct costs, Q3 2026GAAP | 256.9M | – | – |
| Gross profit, Q3 2026GAAP | 100.8M | – | – |
| Gross profit margin, Q3 2026other | 28.2% | decreased 30 basis points | increased 50 basis points |
| Flex revenue, Q3 2026GAAP | $351.1M | 2.7% | 7.6% |
| Flex hours, Q3 2026other | 4.02M | – | – |
| Flex gross profit margin, Q3 2026other | 26.8% | decreased 10 basis points | increased 50 basis points |
| Direct Hire revenue, Q3 2026GAAP | $6.7M | – | – |
| Direct Hire placements, Q3 2026other | 309 | – | – |
| Direct Hire average fee, Q3 2026other | $21.71M | – | – |
| Selling, general and administrative expenses, Q3 2026GAAP | 77.16M | – | – |
| SG&A expenses as a percentage of revenue, Q3 2026other | 21.6% | decreased 110 basis points | decreased 120 basis points |
| Depreciation and amortization, Q3 2026GAAP | 1.16M | – | – |
| Income from operations, Q3 2026GAAP | 22.52M | – | – |
| Operating margin, Q3 2026other | 6.3% | increased 90 basis points | increased 180 basis points |
| Other expense, net, Q3 2026GAAP | 877K | – | – |
| Income before income taxes, Q3 2026GAAP | 21.64M | – | – |
| Income tax expense, Q3 2026GAAP | 6.19M | – | – |
| Net income, Q3 2026GAAP | $15.45M | – | – |
| Earnings per share – diluted, Q3 2026GAAP | $ 0.90 | 23.3% | 42.9% |
| Weighted average shares outstanding – diluted, Q3 2026GAAP | 17,230 | – | – |
| Adjusted EBITDA, Q3 2026non-GAAP | $27.48M | – | – |
| Billing days, Q3 2026other | 64 | – | – |
| COLI Gain benefit to diluted earnings per share, Q3 2026other | $0.12 | – | – |
| Technology Flex revenue growth rate, Q3 2026GAAP | 7.8% | 2.5% | 7.8% |
| FA Flex revenue growth rate, Q3 2026GAAP | 4.6% | 5.5% | 4.6% |
| Free cash flow, nine months ended September 30, 2026non-GAAP | −8.03M | – | – |
| Cash provided by operating activities, nine months ended September 30, 2026GAAP | $2.80M | – | – |
| Capital expenditures, nine months ended September 30, 2026other | −10.83M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| TechnologyTechnology Flex revenue increased 2.5% sequentially and 7.8% year over year. | $331.2M | – | – |
| Finance and AccountingFA Flex revenue increased 5.5% sequentially and 4.6% year over year. | $26.51M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
fourth quarter of 2026 outlook
- Revenue$352 million to $360 million
- Gross margin27.8% to 28.0%
- Operating expensesSG&A expenses as a percent of revenue of 22.8% to 23.0%
- Tax rate28.7%
- NoteEarnings per share of $0.62 to $0.70
- NoteFlex gross profit margins of 26.4% to 26.6%
- NoteOperating margin of 4.5% to 4.9%
- NoteWASO of 17.4 million
- Note62 billing days, compared to 64 billing days in the third quarter of 2026 and 62 billing days in the fourth quarter of 2025
Capital returns
- We returned $6.7 million in capital to our shareholders in the form of quarterly dividends during the third quarter of 2026.
- The Board of Directors approved a fourth quarter cash dividend of $0.40 per share to shareholders of record as of the close of business on December 4, 2026, which will be payable on December 18, 2026.
- Repurchases of common stock were (15,138) (in thousands) for the nine months ended September 30, 2026, compared to (41,450) (in thousands) for the nine months ended September 30, 2025.
- Cash dividends were (20,225) (in thousands) for the nine months ended September 30, 2026, compared to (20,778) (in thousands) for the nine months ended September 30, 2025.
What drove it
- Revenue exceeded the high end of guidance.
- Technology Flex revenue increased 2.5% sequentially and 7.8% year over year.
- FA Flex revenue increased 5.5% sequentially and 4.6% year over year.
- Gross profit margins increased 50 basis points year over year.
- SG&A expenses as a percentage of revenue decreased 110 basis points sequentially and 120 basis points year over year.
- The COLI Gain benefited operating margins by 60 basis points and diluted earnings per share by $0.12 in the quarter ended September 30, 2026.
Concerns
- Gross profit margins decreased 30 basis points sequentially and Flex gross profit margins decreased 10 basis points sequentially.
- Fourth-quarter guidance calls for gross profit margins of 27.8% to 28.0%, Flex gross profit margins of 26.4% to 26.6%, SG&A expenses as a percent of revenue of 22.8% to 23.0%, and operating margin of 4.5% to 4.9%.
- Free cash flow was (8,029) (in thousands) for the nine months ended September 30, 2026.
- Long-term debt – credit facility increased to 107,900 (In Thousands) at September 30, 2026 from 66,400 (In Thousands) at December 31, 2025.
- The company cited risks related to shifts in market demand, including those resulting from the growth of artificial intelligence (AI), general business conditions, global trade policy, federal administration actions, government shutdowns and geopolitical events.
What to watch
- Technology Flex revenue growth following the reported 7.8% year-over-year increase.
- Fourth-quarter revenue within the guided range of $352 million to $360 million, with 62 billing days.
- Gross profit margin performance against fourth-quarter guidance of 27.8% to 28.0%.
- Operating margin performance against fourth-quarter guidance of 4.5% to 4.9%.
- Cash flow, debt and capital returns following nine-month free cash flow of (8,029) (in thousands) and change in debt of 41,500 (in thousands).
Balance sheet and cash flow
- Cash and cash equivalents were $ 250 (In Thousands) at September 30, 2026, compared with $ 2,142 (In Thousands) at December 31, 2025.
- Trade receivables, net of allowances were 229,654 (In Thousands) at September 30, 2026, compared with 190,461 (In Thousands) at December 31, 2025.
- Long-term debt – credit facility was 107,900 (In Thousands) at September 30, 2026, compared with 66,400 (In Thousands) at December 31, 2025.
- Total assets were $ 430,254 (In Thousands) at September 30, 2026, compared with $ 365,638 (In Thousands) at December 31, 2025.
- Cash provided by operating activities was $ 2,801 (in thousands) for the nine months ended September 30, 2026, compared with $ 41,937 (in thousands) for the nine months ended September 30, 2025.
- Change in debt was 41,500 (in thousands) for the nine months ended September 30, 2026, compared with 32,300 (in thousands) for the nine months ended September 30, 2025.
- Change in cash and cash equivalents was $ (1,892) (in thousands) for the nine months ended September 30, 2026, compared with $ 903 (in thousands) for the nine months ended September 30, 2025.
Analysis
Kforce reported third-quarter revenue of $357.8 million, exceeding the high end of its guidance and increasing 2.4% sequentially and 7.5% year over year. The underlying staffing activity presented in the release was broad-based across Flex operations: Technology Flex revenue increased 2.5% sequentially and 7.8% year over year, while FA Flex revenue increased 5.5% sequentially and 4.6% year over year. Technology generated $ 331,246 (000's) of total revenue and Finance and Accounting generated $ 26,509 (000's). Total Flex hours were 4,018 (000's), compared with 3,926 (000's) in Q2 2026 and 3,795 (000's) in Q3 2025.
Profitability improved materially from the prior-year period. Gross profit margin was 28.2%, up 50 basis points year over year, although down 30 basis points sequentially. SG&A expense as a percentage of revenue was 21.6%, down 110 basis points sequentially and 120 basis points year over year. Operating margin reached 6.3%, up 90 basis points sequentially and 180 basis points year over year. Net income was $ 15,445 (In Thousands), and diluted EPS was $ 0.90, increasing 23.3% sequentially and 42.9% year over year.
The COLI Gain was a meaningful contributor to the quarter's reported profitability. It benefited SG&A expenses as a percentage of revenue by 60 basis points, operating margin by 60 basis points and diluted EPS by $0.12. The company stated that year-over-year diluted EPS growth would have been 23.8% excluding the COLI Gain. Adjusted EBITDA, a non-GAAP measure, was $ 27,477 (in thousands), compared with $ 23,757 (in thousands) in Q2 2026 and $ 19,407 (in thousands) in Q3 2025.
Cash generation was weaker over the nine-month period. Cash provided by operating activities was $ 2,801 (in thousands), capital expenditures were (10,830) (in thousands), and free cash flow was (8,029) (in thousands). Long-term debt under the credit facility was 107,900 (In Thousands) at September 30, 2026, compared with 66,400 (In Thousands) at December 31, 2025. The company returned $6.7 million through quarterly dividends in the third quarter and approved a $0.40 per-share fourth-quarter cash dividend.
For the fourth quarter, Kforce guided revenue to $352 million to $360 million and diluted earnings per share to $0.62 to $0.70. The company expects 62 billing days, versus 64 in the third quarter. Guided gross profit margin of 27.8% to 28.0%, Flex gross profit margin of 26.4% to 26.6%, SG&A expense as a percent of revenue of 22.8% to 23.0%, and operating margin of 4.5% to 4.9% point to lower reported profitability measures than the third quarter, while the release identifies billing-day differences and the third-quarter COLI Gain as relevant context.
Management, verbatim
We are extremely pleased to deliver a quarter of accelerating revenue and earnings growth.
Joseph J. Liberatore, President and Chief Executive Officer
We believe our go-to-market approach, shaped by our integrated operating model, is gaining traction.
Joseph J. Liberatore, President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous-quarter outlook or prior guidance was not provided.
- GAAP and non-GAAP effective tax rate for the third quarter of 2026 were not reported.
- Quarterly cash provided by operating activities, capital expenditures and free cash flow for the third quarter of 2026 were not reported.
- Share repurchases during the third quarter of 2026 were not reported.
- The dollar amount of the COLI Gain was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.