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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________________________________________________________________________

FORM 10-Q

________________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-42104

_________________________________________________________________

Kforce Inc.

Exact name of registrant as specified in its charter

_______________________________________________________________


Florida						59-3264661
State or other jurisdiction of incorporation or organization						IRS Employer Identification No.


1150 Assembly Drive, Suite 500, Tampa, Florida						33607
Address of principal executive offices						Zip Code

Registrant’s telephone number, including area code: (813) 552-5000

_______________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	KFRC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.): Yes ☐ No ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

The number of shares outstanding (in thousands) of the registrant’s common stock at October 29, 2025 was 18,141.

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KFORCE INC.

TABLE OF CONTENTS



PART I	Item 1.	Financial Statements.	3
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	24
	Item 4.	Controls and Procedures.	25

PART II	Item 1.	Legal Proceedings.	25
	Item 1A.	Risk Factors.	25
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	25
	Item 3.	Defaults Upon Senior Securities.	26
	Item 4.	Mine Safety Disclosures.	26
	Item 5.	Other Information.	26
	Item 6.	Exhibits.	27
	SIGNATURES		28


CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

References in this document to the “Registrant,” “Kforce,” the “Company,” the “Firm,” “management,” “we,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context otherwise requires or indicates. This report, particularly Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), and Part II, Item 1A. Risk Factors, and the documents we incorporate into this report contain certain statements that are, or may be deemed to be, forward-looking statements within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements may include, but may not be limited to:

•expectations of financial or operational performance, including the potential effects of macroeconomic uncertainties, such as inflation, the recent government shutdown and the recently implemented U.S. tariffs, among others, on our business;

•our predictions regarding our clients’ expected execution of technology investments upon more confidence in the macroeconomic environment;

•the impacts of revenue and gross profit levels on SG&A expenses as well as our ability to control discretionary spending, balance revenue levels against productivity expectations, and decrease operating costs;

•our expectations of growth rates in temporary staffing and future changes in revenue and gross profit margins of each segment of our business;

•changes in demand for our services and our ability to adapt to such changes;

•continued investments in our strategic priorities, and our ability to realize the benefits of our strategic priorities;

•potential government actions or changes in policies, laws and regulations, including material impacts of income tax changes;

•the Firm’s priority of retaining the most productive and tenured associates in preparation for higher levels of demand in the future;

•the Firm’s commitment, intent and ability to return significant capital to its shareholders through open market repurchases and quarterly dividends;

•our ability to meet the capital expenditure and working capital requirements of our operations;

•financing needs or plans, or our ability to maintain compliance with our credit facility's covenants;

•increased cautiousness for companies to invest in significant technological change and the impacts of such cautiousness on our financial results;

•the impact of technological change, such as artificial intelligence (“AI") and derivative developments including generative AI, agentic AI, cognitive AI, etc. on the demand for our services; and

•assumptions as to any of the foregoing and all statements that are not based on historical fact, but rather reflect our current expectations concerning future results and events.

For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, refer to the MD&A and Risk Factors sections. In addition, when used in this discussion, the terms “anticipate,” “assume,” “estimate,” “expect,” “intend,” “plan,” “believe,” “will,” “may,” “likely,” “could,” “should,” “future” and variations thereof and similar expressions are intended to identify forward-looking statements.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted. Future events and actual results could differ materially from those set forth in or underlying the forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this report, which speak only as of the date of this report. Kforce undertakes no obligation to update any forward-looking statements.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

KFORCE INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenue	$	332,645	$	353,319	$	996,989	$	1,061,526
Direct costs	240,388		254,752		725,824		768,736
Gross profit	92,257		98,567		271,165		292,790
Selling, general and administrative expenses	75,884		78,308		225,419		234,216
Depreciation and amortization	1,371		1,543		4,225		4,431
Income from operations	15,002		18,716		41,521		54,143
Other expense, net	758		429		2,352		1,589
Income before income taxes	14,244		18,287		39,169		52,554
Income tax expense	3,176		4,078		9,507		13,201
Net income	$	11,068	$	14,209	$	29,662	$	39,353

Earnings per share – basic	$	0.63	$	0.76	$	1.66	$	2.11
Earnings per share – diluted	$	0.63	$	0.75	$	1.66	$	2.08

Weighted average shares outstanding – basic	17,589		18,578		17,819		18,666
Weighted average shares outstanding – diluted	17,645		18,823		17,884		18,878

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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KFORCE INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


	September 30, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	1,252	$	349
Trade receivables, net of allowances of $1,346 and $1,560, respectively	204,468		215,690
Prepaid expenses and other current assets	12,116		9,367
Total current assets	217,836		225,406
Fixed assets, net	6,304		7,723
Other assets, net	119,819		94,656
Deferred tax assets, net	5,153		5,009
Goodwill	25,040		25,040
Total assets	$	374,152	$	357,834
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and other accrued liabilities	$	62,777	$	61,753
Accrued payroll costs	47,991		38,823
Current portion of operating lease liabilities	3,225		3,038
Income taxes payable	2,099		8,843
Total current liabilities	116,092		112,457
Long-term debt – credit facility	65,000		32,700
Other long-term liabilities	60,939		58,059
Total liabilities	242,031		203,216
Commitments and contingencies (Note J)
Stockholders’ equity:
Preferred stock, $0.01 par value; 15,000 shares authorized, none issued and outstanding	—		—
Common stock, $0.01 par value; 250,000 shares authorized, 73,863 and 73,835 issued, respectively	739		738
Additional paid-in capital	554,511		543,109
Retained earnings	554,083		546,202
Treasury stock, at cost; 55,573 and 54,619 shares, respectively	(977,212)		(935,431)
Total stockholders’ equity	132,121		154,618
Total liabilities and stockholders’ equity	$	374,152	$	357,834

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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KFORCE INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(IN THOUSANDS)


	Common Stock			Additional Paid-In Capital				Treasury Stock			Total Stockholders’ Equity
	Shares	Amount				Retained Earnings		Shares	Amount
Balance, December 31, 2024	73,835	$	738	$	543,109	$	546,202	54,619	$	(935,431)	$	154,618
Net income	—	—		—		8,145		—	—		8,145
Issuance for stock-based compensation and dividends, net of forfeitures	6	—		376		(376)		—	—		—
Stock-based compensation expense	—	—		3,656		—		—	—		3,656
Employee stock purchase plan	—	—		119		—		(3)	56		175
Dividends ($0.39 per share)	—	—		—		(7,051)		—	—		(7,051)
Repurchases of common stock	—	—		—		—		420	(21,512)		(21,512)
Other	—	—		—		(4)		—	—		(4)
Balance, March 31, 2025	73,841	738		547,260		546,916		55,036	(956,887)		138,027
Net income	—	—		—		10,449		—	—		10,449
Issuance for stock-based compensation and dividends, net of forfeitures	47	1		322		(323)		—	—		—
Stock-based compensation expense	—	—		3,618		—		—	—		3,618
Dividends ($0.39 per share)	—	—		—		(6,900)		—	—		(6,900)
Repurchases of common stock	—	—		—		—		241	(10,775)		(10,775)
Other	—	—		—		1		—	—		1
Balance, June 30, 2025	73,888	739		551,200		550,143		55,277	(967,662)		134,420
Net income	—	—		—		11,068		—	—		11,068
Issuance for stock-based compensation and dividends, net of forfeitures	(25)	—		277		(277)		—	—		—
Stock-based compensation expense	—	—		3,034		—		—	—		3,034
Dividends ($0.39 per share)	—	—		—		(6,827)		—	—		(6,827)
Repurchases of common stock	—	—		—		—		296	(9,550)		(9,550)
Other	—	—		—		(24)		—	—		(24)
Balance, September 30, 2025	73,863	$	739	$	554,511	$	554,083	55,573	$	(977,212)	$	132,121

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	Common Stock			Additional Paid-In Capital					Treasury Stock			Total Stockholders’ Equity
	Shares	Amount				Retained Earnings	Shares		Amount
Balance, December 31, 2023	73,462	$	734	$	527,288		$	525,222	53,941	$	(894,164)	$	159,080
Net income	—	—		—			10,987		—	—		10,987
Issuance for stock-based compensation and dividends, net of forfeitures	(7)	1		285			(286)		—	—		—
Stock-based compensation expense	—	—		3,501			—		—	—		3,501
Employee stock purchase plan	—	—		152			—		(3)	52		204
Dividends ($0.38 per share)	—	—		—			(7,128)		—	—		(7,128)
Repurchases of common stock	—	—		—			—		30	(2,139)		(2,139)
Balance, March 31, 2024	73,455	735		531,226			528,795		53,968	(896,251)		164,505
Net income	—	—		—			14,157		—	—		14,157
Issuance for stock-based compensation and dividends, net of forfeitures	24	—		286			(286)		—	—		—
Stock-based compensation expense	—	—		3,498			—		—	—		3,498
Employee stock purchase plan	—	—		151			—		(3)	51		202
Dividends ($0.38 per share)	—	—		—			(7,101)		—	—		(7,101)
Repurchases of common stock	—	—		—			—		139	(8,641)		(8,641)
Balance, June 30, 2024	73,479	735		535,161			535,565		54,104	(904,841)		166,620
Net income	—	—		—			14,209		—	—		14,209
Issuance for stock-based compensation and dividends, net of forfeitures	5	—		311			(311)		—	—		—
Stock-based compensation expense	—	—		3,549			—		—	—		3,549
Employee stock purchase plan	—	—		148			—		(4)	58		206
Dividends ($0.38 per share)	—	—		—			(7,053)		—	—		(7,053)
Repurchases of common stock	—	—		—			—		161	(10,157)		(10,157)
Balance, September 30, 2024	73,484	$	735	$	539,169		$	542,410	54,261	$	(914,940)	$	167,374

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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KFORCE INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities:
Net income	$	29,662	$	39,353
Adjustments to reconcile net income to cash provided by operating activities:
Deferred income tax provision, net	(144)		(2,852)
Provision for credit losses	15		136
Depreciation and amortization	4,225		4,431
Stock-based compensation expense	10,308		10,548
Noncash lease expense	2,821		2,765
Other	(233)		(685)
(Increase) decrease in operating assets
Trade receivables, net	11,207		4,032
Other assets	(15,315)		(4,072)
Increase (decrease) in operating liabilities
Accrued payroll costs	9,342		13,085
Other liabilities	(9,951)		(1,657)
Cash provided by operating activities	41,937		65,084
Cash flows from investing activities:
Capital expenditures	(11,798)		(8,501)
Proceeds from company-owned life insurance	1,383		2,377
Premiums paid for company-owned life insurance	(686)		(1,777)
Cash used in investing activities	(11,101)		(7,901)
Cash flows from financing activities:
Proceeds from credit facility	381,500		173,600
Payments on credit facility	(349,200)		(188,300)
Repurchases of common stock	(41,450)		(21,189)
Cash dividends	(20,778)		(21,282)
Other	(5)		(4)
Cash used in financing activities	(29,933)		(57,175)
Change in cash and cash equivalents	903		8
Cash and cash equivalents, beginning of period	349		119
Cash and cash equivalents, end of period	$	1,252	$	127

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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	Nine Months Ended September 30,
Supplemental Disclosure of Cash Flow Information	2025		2024
Cash Paid During the Period For:
Income taxes, net	$	16,443	$	9,085
Operating lease liabilities	3,476		3,609
Interest, net	2,834		1,556
Non-Cash Investing and Financing Transactions:
ROU assets obtained from operating leases	$	4,045	$	2,627
Employee stock purchase plan	175		612
Unsettled repurchases of common stock	250		500

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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KFORCE INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note A - Summary of Significant Accounting Policies

Unless otherwise noted below, there have been no material changes to the accounting policies presented in Note 1 - “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of our 2024 Annual Report on Form 10-K.

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by GAAP for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although management believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2024 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2024, was derived from our audited Consolidated Balance Sheet at December 31, 2024, as presented in our 2024 Annual Report on Form 10-K.

Our quarterly operating results are affected by the seasonality of our clients’ businesses and changes in holiday and vacation days taken. In addition, we typically experience higher costs in the first quarter of each fiscal year as a result of certain U.S. state and federal employment tax resets, which adversely affects our gross profit and overall profitability relative to the remainder of the fiscal year. As such, the results of operations for any interim period may be impacted by these factors, among others, and are not necessarily indicative of, nor comparable to, the results of operations for a full year.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of Kforce Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “Kforce,” the “Company,” the “Firm,” “management,” “we,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context indicates otherwise.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical of these estimates and assumptions include income taxes and the evaluation of goodwill for impairment. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates.

Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have incorporated the OBBBA legislative changes into the Company's effective tax rate for the three months ended September 30, 2025, and these changes did not have a material impact on our consolidated financial statements. We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.

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Earnings per Share

Basic earnings per share is computed as net income divided by the weighted-average number of common shares outstanding (“WASO”) during the period. WASO excludes unvested shares of restricted stock. Diluted earnings per share is computed by dividing net income by diluted WASO. Diluted WASO includes the effect of potentially dilutive securities, such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive.

The following table provides information on potentially dilutive securities:


(shares in thousands)	2025	2024
Three Months Ended September 30,
Common stock equivalents	56	245
Anti-dilutive shares	670	4
Nine Months Ended September 30,
Common stock equivalents	65	212
Anti-dilutive shares	650	4

Treasury Stock

The Board of Directors has approved a stock repurchase program, which has been amended several times to increase the aggregate amount of the stock repurchase authorization. During the nine months ended September 30, 2025, Kforce repurchased approximately 950 thousand shares of common stock on the open market at a total cost of approximately $41.1 million under this repurchase program. During the nine months ended September 30, 2024, Kforce repurchased approximately 324 thousand shares of common stock on the open market at a total cost of approximately $20.3 million under this repurchase program. In October 2025, the Board approved an increase in the stock repurchase authorization, bringing the total authorization to $100.0 million for the stock repurchase program.

New Accounting Standards

Recently Adopted Accounting Standards

In December 2023, the FASB issued guidance for disclosure improvements for income taxes. These amendments require the disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This new guidance is effective for Kforce for our annual disclosures for the year ending December 31, 2025. This new guidance will modify our disclosures, but we do not expect this standard to have a material effect on our consolidated financial statements.

Accounting Standards Not Yet Adopted

In September 2025, the FASB issued guidance that provides targeted improvements for the accounting for internal-use software. This standard replaces the development stage framework with a more judgment-based framework and adds considerations to evaluate whether the probable-to-complete recognition threshold has been met. This guidance is effective for annual periods beginning after December 15, 2027, including interim periods within those annual periods. Early adoption of this guidance is permitted and may be applied using a prospective, modified or retrospective approach. We are evaluating this new guidance and the potential impact on our consolidated financial statements.

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Note B - Reportable Segments

Kforce’s two reportable segments are Technology and Finance and Accounting (“FA”). Within each segment, we provide highly skilled professionals on a Flex and Direct Hire basis to our customers on traditional staffing engagements and increasingly, within our Technology segment, as a part of an overall solutions engagement. The chief operating decision-maker (“CODM”), our President and Chief Executive Officer, establishes the strategic direction of the Firm, its priorities and longer-term financial objectives. Our CODM is ultimately responsible for evaluating segment performance and making decisions regarding resource allocation. Our CODM evaluates performance based on, among others, revenue trends (relative to peers and market benchmarks) and segment gross profit, and other key leading indicators such as client visits, job order trends for traditional staffing assignments, opportunity pipeline reviews for solutions-oriented engagements, and trends in consultants on assignment. The CODM uses these financial metrics and productivity measures when making decisions about allocating capital and resources to the segments.

Segment gross profit is defined as segment revenue, less direct costs attributable to the reportable segment. The CODM is not provided income from operations or asset information by reportable segment as operations are largely combined.

The following table provides information on the operations of our segments:


(in thousands)	Technology		FA		Total
Three Months Ended September 30,
2025
Revenue	$	307,145	$	25,500	$	332,645
Direct costs	224,799		15,589		240,388
Gross profit	$	82,346	$	9,911	$	92,257
Less:
Selling, general and administrative expenses					75,884
Depreciation and amortization					1,371
Other expense, net					758
Income before income taxes					$	14,244
2024
Revenue	$	325,511	$	27,808	$	353,319
Direct costs	238,018		16,734		254,752
Gross profit	$	87,493	$	11,074	$	98,567
Less:
Selling, general and administrative expenses					78,308
Depreciation and amortization					1,543
Other expense, net					429
Income before income taxes					$	18,287

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(in thousands)	Technology		FA		Total
Nine Months Ended September 30,
2025
Revenue	$	923,956	$	73,033	$	996,989
Direct costs	680,852		44,972		725,824
Gross profit	$	243,104	$	28,061	$	271,165
Less:
Selling, general and administrative expenses					225,419
Depreciation and amortization					4,225
Other expense, net					2,352
Income before income taxes					$	39,169
2024
Revenue	$	975,469	$	86,057	$	1,061,526
Direct costs	716,042		52,694		768,736
Gross profit	$	259,427	$	33,363	$	292,790
Less:
Selling, general and administrative expenses					234,216
Depreciation and amortization					4,431
Other expense, net					1,589
Income before income taxes					$	52,554

Note C - Disaggregation of Revenue

The following table provides information about disaggregated revenue by segment and revenue type:


(in thousands)	Technology		FA		Total
Three Months Ended September 30,
2025
Flex revenue	$	304,272	$	21,991	$	326,263
Direct Hire revenue	2,873		3,509		6,382
Total Revenue	$	307,145	$	25,500	$	332,645
2024
Flex revenue	$	322,118	$	23,714	$	345,832
Direct Hire revenue	3,393		4,094		7,487
Total Revenue	$	325,511	$	27,808	$	353,319
Nine Months Ended September 30,
2025
Flex revenue	$	914,551	$	62,693	$	977,244
Direct Hire revenue	9,405		10,340		19,745
Total Revenue	$	923,956	$	73,033	$	996,989
2024
Flex revenue	$	964,696	$	74,644	$	1,039,340
Direct Hire revenue	10,773		11,413		22,186
Total Revenue	$	975,469	$	86,057	$	1,061,526

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Note D - Allowance for Credit Losses

The following table presents the activity within the allowance for credit losses on trade receivables for the nine months ended September 30, 2025:


(in thousands)
Allowance for credit losses, December 31, 2024	$	916
Current period provision	15
Write-offs charged against the allowance, net of recoveries of amounts previously written off	(73)
Allowance for credit losses, September 30, 2025	$	858

The allowances on trade receivables presented in the Unaudited Condensed Consolidated Balance Sheets include $0.5 million and $0.6 million for reserves unrelated to credit losses at September 30, 2025 and December 31, 2024, respectively.

Note E - Other Assets, Net

Other assets, net consisted of the following:


(in thousands)	September 30, 2025		December 31, 2024
Assets held in Rabbi Trust	$	55,883	$	49,356
Capitalized software, net (1)	45,637		29,090
ROU assets for operating leases, net	14,968		13,764
Other non-current assets	3,331		2,446
Total Other assets, net	$	119,819	$	94,656

(1) This balance includes $14.6 million and $6.3 million related to capitalized implementation costs from cloud computing arrangements at September 30, 2025 and December 31, 2024, respectively. Accumulated amortization of capitalized software was $42.3 million and $40.1 million at September 30, 2025 and December 31, 2024, respectively.

Note F - Current Liabilities

The following table provides information on certain current liabilities:


(in thousands)	September 30, 2025		December 31, 2024
Accounts payable	$	43,201	$	38,315
Deferred compensation payable	8,518		8,602
Customer rebates payable	4,933		6,556
Accrued liabilities	3,317		4,259
Accrued professional fees	2,808		4,021
Total Accounts payable and other accrued liabilities	$	62,777	$	61,753
Payroll and benefits	$	41,313	$	32,990
Health insurance liabilities	4,171		3,593
Payroll taxes	1,926		1,698
Workers’ compensation liabilities	581		542
Total Accrued payroll costs	$	47,991	$	38,823

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Note G - Credit Facility

On October 20, 2021, the Firm entered into an amended and restated credit agreement with Wells Fargo Bank, National Association, as administrative agent, Wells Fargo Securities, LLC, as lead arranger and bookrunner, Bank of America, N.A., as syndication agent, BMO Harris Bank, N.A., as documentation agent, and the lenders referred to therein (the “Amended and Restated Credit Facility”). Under the Amended and Restated Credit Facility, the Firm has a maximum borrowing capacity of $200.0 million, which may, subject to certain conditions and the participation of the lenders, be increased up to an aggregate additional amount of $150.0 million. Borrowings under the Amended and Restated Credit Facility are secured by substantially all of the tangible and intangible assets of the Firm. The maturity date of the Amended and Restated Credit Facility is October 20, 2026.

At September 30, 2025 and December 31, 2024, $65.0 million and $32.7 million was outstanding under the Amended and Restated Credit Facility, respectively. Kforce had $1.0 million of outstanding letters of credit at September 30, 2025 and December 31, 2024, which pursuant to the Amended and Restated Credit Facility, reduces the availability of our borrowing capacity. At September 30, 2025, we were in compliance with all of the covenants contained in the Amended and Restated Credit Facility.

Note H - Other Long-Term Liabilities

Other long-term liabilities consisted of the following:


(in thousands)	September 30, 2025		December 31, 2024
Deferred compensation payable - long term	$	48,073	$	46,183
Operating lease liabilities	12,855		11,858
Other long-term liabilities	11		18
Total Other long-term liabilities	$	60,939	$	58,059

Note I - Stock-Based Compensation

On April 23, 2025, Kforce’s shareholders approved the 2025 Stock Incentive Plan (the “2025 Plan”). The 2025 Plan allows for the issuance of stock options, stock appreciation rights (“SAR”), stock awards (including restricted stock awards (“RSAs”) and restricted stock units (“RSUs”)) and other stock-based awards, such as Performance-Based Awards (collectively referred to as “Restricted Stock”). The aggregate number of shares reserved under the 2025 Plan is approximately 2.7 million. Grants of an option or SAR reduce the reserve by one share, while a Restricted Stock award reduces the reserve by 2.72 shares. The 2025 Plan terminates on April 23, 2035.

The following table presents the Restricted Stock activity for the nine months ended September 30, 2025:


(in thousands, except per share amounts)	Number of Restricted Stock	Weighted-Average Grant Date Fair Value		Total Intrinsic Value of Restricted Stock Vested
Outstanding at December 31, 2024	910	$	61.28
Granted	75	$	49.34
Forfeited	(47)	$	61.06
Vested	(41)	$	46.64	$	1,777
Outstanding at September 30, 2025	897	$	60.96

At September 30, 2025, total unrecognized stock-based compensation expense related to restricted stock was $32.8 million, which is expected to be recognized over a weighted-average remaining period of 4.3 years.

During the three and nine months ended September 30, 2025, stock-based compensation expense was $3.0 million and $10.3 million, respectively. During the three and nine months ended September 30, 2024, stock-based compensation expense was $3.5 million and $10.5 million, respectively. Stock-based compensation is included in Selling, general and administrative expenses (“SG&A”) in the Unaudited Condensed Consolidated Statements of Operations.

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Note J - Commitments and Contingencies

Employment Agreements

Kforce has employment agreements with certain executives that provide for certain post-employment benefits under certain circumstances. At September 30, 2025, our liability would be approximately $27.4 million if, following a change in control, all of the executives under contract were terminated without cause by the employer or if the executives resigned for good reason, and $8.6 million if, in the absence of a change in control, all of the executives under contract were terminated by Kforce without cause or if the executives resigned for good reason.

Litigation

We are involved in legal proceedings, claims and administrative matters that arise in the ordinary course of business, and we have made accruals with respect to certain of these matters, where appropriate, that are reflected in our unaudited condensed consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters for which an accrual has not been made, we have not yet determined that a loss is probable, or the amount of loss cannot be reasonably estimated. The outcome of any litigation is inherently uncertain, but we do not expect that these proceedings and claims, individually or in the aggregate, will have a material effect on our unaudited condensed consolidated financial statements; however, if decided adversely to us, or if we determine that settlement of particular litigation is appropriate, we may be subject to additional liabilities that could have a material adverse effect on our financial position, results of operations or cash flows. Kforce 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.

Note K - Subsequent Events

On November 5, 2025, the Firm entered into a senior secured credit facility with Bank of America, N.A., as administrative and collateral agent, BofA Securities, Inc. and PNC Capital Markets LLC as joint lead arrangers, BofA Securities, Inc. as bookrunner and the lenders referred to therein (the “Credit Facility”). 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. Borrowings under the Credit Facility are secured by substantially all of the tangible and intangible assets of the Firm. The maturity date of the Credit Facility is November 5, 2030.

The terms and conditions of the Credit Facility entered into on November 5, 2025 are substantially the same as the Amended and Restated Credit Facility entered into on October 20, 2021. Any loan under the Credit Facility will bear interest at a rate equal to either (a) Term SOFR (as described below) plus the Applicable Margin (as described below) or (b) the highest of (i) the Bank of America prime rate, (ii) the Federal Funds rate plus 0.50%, (iii) Term SOFR for a one-month interest period plus 1.00% and (iv) 1.00% plus the Applicable Margin (the “Base Rate”).

Term SOFR refers to the Secured Overnight Financing Rate published term rate for the applicable interest period, but not less than zero. The Applicable Margin is based on the Firm’s total leverage ratio. The Applicable Margin for Term SOFR loans ranges from 1.250% to 1.625% and the Applicable Margin for Base Rate loans ranges from 0.250% to 0.625%.

The Firm will continually be subject to certain affirmative and negative covenants including, but not limited to, the maintenance of a fixed charge coverage ratio of not less than 1.25 to 1.00 and the maintenance of a total leverage ratio of no greater than 3.50 to 1.00.

Our ability to make distributions or repurchases of equity securities could be limited if an event of default has occurred. Furthermore, our ability to repurchase equity securities in excess of $25.0 million in any fiscal year could be limited if (a) the total leverage ratio is greater than 3.00 to 1.00 and (b) the Firm’s availability, inclusive of unrestricted cash, is less than $25.0 million.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

EXECUTIVE SUMMARY

The following is an executive summary of what Kforce believes are highlights as of and for the nine months ended September 30, 2025, which should be considered in the context of the additional discussions herein and in conjunction with the unaudited condensed consolidated financial statements and notes thereto.

•Revenue for the nine months ended September 30, 2025 decreased 6.1% (5.6% on a billing day basis) to nearly $1.00 billion from $1.06 billion in the comparable period in 2024. Revenue decreased 5.3% (4.8% on a billing day basis) and 15.1% (14.7% on a billing day basis) for Technology and FA, respectively, primarily driven by decreases in consultants on assignment, which we believe is primarily related to macroeconomic uncertainties.

•Flex revenue for the nine months ended September 30, 2025 decreased 6.0% (5.5% on a billing day basis) to $0.98 billion from $1.04 billion in the comparable period in 2024. Flex revenue decreased 5.2% (4.7% on a billing day basis) for Technology and 16.0% (15.6% on a billing day basis) for FA. Notably, Flex revenue for FA improved nearly 7% in the third quarter of 2025 on a sequential billing day basis primarily due to more consultants on assignment.

•Direct Hire revenue for the nine months ended September 30, 2025 decreased 11.0% to $19.7 million from $22.2 million in the comparable period in 2024.

•Gross profit margin for the nine months ended September 30, 2025 decreased 40 basis points to 27.2% from 27.6% in the comparable period in 2024 primarily driven by declines in the mix of Direct Hire revenue and Flex gross profit margins.

•Flex gross profit margin for the nine months ended September 30, 2025 decreased 30 basis points to 25.7% from 26.0% in the comparable period in 2024 primarily driven by higher healthcare costs.

•SG&A expenses as a percentage of revenue for the nine months ended September 30, 2025 increased to 22.6% from 22.1% in the comparable period in 2024 primarily driven by the declines in revenue and gross profit.

•Net income for the nine months ended September 30, 2025 decreased 24.6% to $29.7 million, or $1.66 diluted earnings per share, from $39.4 million, or $2.08 diluted earnings per share, for the nine months ended September 30, 2024.

•The Firm returned $61.9 million of capital to our shareholders in the form of open market repurchases totaling $41.1 million and quarterly dividends totaling $20.8 million during the nine months ended September 30, 2025.

•Cash provided by operating activities was $41.9 million during the nine months ended September 30, 2025, as compared to $65.1 million for the nine months ended September 30, 2024. 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.

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RESULTS OF OPERATIONS

Business Overview

Kforce is a leading domestic provider of technology and finance and accounting talent solutions to innovative and industry-leading companies. At September 30, 2025, Kforce employed over 1,600 associates and had approximately 7,500 consultants on assignment. Kforce serves clients across a diverse set of industries and organizations of all sizes, but we place a particular focus on serving Fortune 500 and other leading companies.

While early 2025 began with optimism around U.S. economic growth and increased investment in technology initiatives, persistent macro uncertainties have continued throughout 2025 including, the recent Federal Government shutdown; continuing global trade negotiations and the potential derivative negative effects on the U.S. consumer and broader U.S. economy; and the ongoing weakness in the labor markets marked by prolonged stagnation in job gains and increased layoff announcements, although unemployment remains near historically low levels. We believe that the uncertainties in the current macro environment, along with the technological roadmaps by companies being defined, and redefined, given the rapid advancements in AI, and derivatives thereof, have led many organizations to be cautious in their strategic planning and near-term technology investment decisions. Against the backdrop of these uncertainties, we are pleased with our recent financial performance. While conversations with our clients and overall market trends continue to indicate that we are operating in a demand-constrained environment, we believe our clients continue to carry a significant backlog of strategically imperative technology investments that they expect to execute once their confidence in the macro environment improves.

Based on data published by the Staffing Industry Analysts (“SIA”), temporary employment figures and trends are important indicators of staffing demand from an economic standpoint. The national U.S. unemployment rate increased to 4.3% in August 2025 as compared to 4.1% in December 2024. In the latest U.S. staffing industry forecast published by SIA in September 2025, the technology temporary staffing industry is estimated to decline 2% in 2025.

Operating Results - Three and Nine Months Ended September 30, 2025 and 2024

The following table presents certain items in our Unaudited Condensed Consolidated Statements of Operations as a percentage of revenue:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenue by segment:
Technology	92.3	%	92.1	%	92.7	%	91.9	%
FA	7.7		7.9		7.3		8.1
Total Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Revenue by type:
Flex	98.1	%	97.9	%	98.0	%	97.9	%
Direct Hire	1.9		2.1		2.0		2.1
Total Revenue	100.0	%	100.0	%	100.0	%	100.0	%
Gross profit	27.7	%	27.9	%	27.2	%	27.6	%
Selling, general and administrative expenses	22.8	%	22.2	%	22.6	%	22.1	%
Depreciation and amortization	0.4	%	0.4	%	0.4	%	0.4	%
Income from operations	4.5	%	5.3	%	4.2	%	5.1	%
Income before income taxes	4.3	%	5.2	%	3.9	%	5.0	%
Net income	3.3	%	4.0	%	3.0	%	3.7	%

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Revenue. The following table presents revenue by type for each segment and the percentage change from the prior period:


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2025		Increase (Decrease)		2024		2025		Increase (Decrease)		2024
Technology
Flex revenue	$	304,272	(5.5)	%	$	322,118	$	914,551	(5.2)	%	$	964,696
Direct Hire revenue	2,873		(15.3)	%	3,393		9,405		(12.7)	%	10,773
Total Technology revenue	$	307,145	(5.6)	%	$	325,511	$	923,956	(5.3)	%	$	975,469
FA
Flex revenue	$	21,991	(7.3)	%	$	23,714	$	62,693	(16.0)	%	$	74,644
Direct Hire revenue	3,509		(14.3)	%	4,094		10,340		(9.4)	%	11,413
Total FA revenue	$	25,500	(8.3)	%	$	27,808	$	73,033	(15.1)	%	$	86,057

Total Flex revenue	$	326,263	(5.7)	%	$	345,832	$	977,244	(6.0)	%	$	1,039,340
Total Direct Hire revenue	6,382		(14.8)	%	7,487		19,745		(11.0)	%	22,186
Total Revenue	$	332,645	(5.9)	%	$	353,319	$	996,989	(6.1)	%	$	1,061,526

Flex Revenue. The key drivers of Flex revenue are the number of consultants on assignment, billable hours, the bill rate per hour and, to a limited extent, the amount of billable expenses incurred by Kforce.

Flex revenue for our Technology business decreased 5.5% and 5.2% during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. On a billing day basis, the decreases were 5.5% and 4.7% during the three and nine months ended September 30, 2025, respectively. These changes are primarily driven by a decrease in consultants on assignment, which we believe is primarily related to macroeconomic uncertainties. Our average Technology bill rate was $90 for the three and nine months ended September 30, 2025, which remained flat as compared to the same periods in 2024. In the fourth quarter, we expect Technology Flex revenue to increase in the low single digits sequentially on a billing day basis and decline in the mid-single digits year over year on a billing day basis.

Our FA business experienced a decrease in Flex revenue of 7.3% and 16.0% during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. On a billing day basis, the decreases were 7.3% and 15.6% during the three and nine months ended September 30, 2025, respectively. These changes are primarily driven by a decrease in consultants on assignment, which we believe is related to macroeconomic uncertainties. Notably, FA Flex revenue increased 6.9% on a sequential basis in the third quarter, representing the second consecutive quarter of sequential improvement on a billing day basis, primarily due to more consultants on assignment. Our average FA bill rates improved by 2.2% and 2.8% for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, which is reflective of the higher-skilled assignments that we are strategically pursuing. In the fourth quarter, we expect FA Flex revenue to be slightly up sequentially on a billing day basis and decline in the mid-single digits year over year on a billing day basis.

The following table presents the key drivers for the change in Flex revenue by segment over the prior period (in thousands):


	Three Months Ended				Nine Months Ended
	September 30, 2025 vs. September 30, 2024				September 30, 2025 vs. September 30, 2024
Key Drivers - Increase (Decrease)	Technology		FA		Technology		FA
Volume - hours billed	$	(15,438)	$	(2,202)	$	(50,407)	$	(13,619)
Bill rate	(2,450)		477		161		1,695
Billable expenses	42		2		101		(27)
Total change in Flex revenue	$	(17,846)	$	(1,723)	$	(50,145)	$	(11,951)

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The following table presents total Flex hours billed by segment and percentage change over the prior period:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025	Increase (Decrease)		2024	2025	Increase (Decrease)		2024
Technology	3,383	(4.8)	%	3,553	10,124	(5.2)	%	10,683
FA	412	(9.5)	%	455	1,183	(18.4)	%	1,449
Total Flex hours billed	3,795	(5.3)	%	4,008	11,307	(6.8)	%	12,132

Direct Hire Revenue. 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 decreased 14.8% and 11.0% during the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024, which was primarily driven by a decrease in placements, partially offset by an increase in placement fees. In the fourth quarter, we expect Direct Hire Revenue to decline slightly on a sequential basis due to seasonality and decrease in the low-teens range year over year.

Gross Profit. 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.

The following table presents gross profit (gross profit as a percentage of total revenue) by segment and percentage change over the prior period:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025		Increase (Decrease)		2024		2025		Increase (Decrease)		2024
Technology	26.8	%	(0.4)	%	26.9	%	26.3	%	(1.1)	%	26.6	%
FA	38.9	%	(2.3)	%	39.8	%	38.4	%	(1.0)	%	38.8	%
Total gross profit percentage	27.7	%	(0.7)	%	27.9	%	27.2	%	(1.4)	%	27.6	%

Total gross profit percentage decreased 20 basis points for the three months ended September 30, 2025, as compared to the same period in 2024, primarily driven by declines in the mix of Direct Hire revenue and FA Flex gross profit margins. Total gross profit percentage decreased 40 basis points for the nine months ended September 30, 2025, as compared to the same period in 2024, primarily driven by declines in the mix of Direct Hire revenue and Flex gross profit margins.

Flex gross profit percentage (Flex gross profit as a percentage of Flex revenue) provides management with helpful insights 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 following table presents the Flex gross profit percentage by segment and percentage change over the prior period:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025		Increase (Decrease)		2024		2025		Increase (Decrease)		2024
Technology	26.1	%	—	%	26.1	%	25.6	%	(0.8)	%	25.8	%
FA	29.1	%	(1.0)	%	29.4	%	28.3	%	(3.7)	%	29.4	%
Total Flex gross profit percentage	26.3	%	—	%	26.3	%	25.7	%	(1.2)	%	26.0	%

Our Flex gross profit percentage remained flat and decreased 30 basis points for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

•Technology Flex gross profit margins remained flat and decreased 20 basis points for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The decrease for the nine months ended September 30, 2025 was primarily driven by higher healthcare costs, which was partially offset by slightly improved bill and pay spreads. In the fourth quarter, we expect Technology Flex gross profit margins to decline sequentially due to the typical season impact of vacation days taken by our consultants, although the underlying bill and pay spreads are expected to be stable.

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•FA Flex gross profit margins decreased 30 and 110 basis points for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024. The decrease for the three months ended September 30, 2025 was primarily driven by changes in our client portfolio mix and unfavorable payroll taxes. The decrease for the nine months ended September 30, 2025 includes the aforementioned items, in addition to higher healthcare costs. In the fourth quarter, we expect FA Flex gross profit margins to decline slightly due to seasonality on a sequential basis.

The following table presents the key drivers for the change in Flex gross profit by segment over the prior period (in thousands):


	Three Months Ended				Nine Months Ended
	September 30, 2025 vs. September 30, 2024				September 30, 2025 vs. September 30, 2024
Key Drivers - Increase (Decrease)	Technology		FA		Technology		FA
Revenue impact (volume)	$	(4,659)	$	(508)	$	(12,925)	$	(3,515)
Profitability impact (bill rate)	32		(71)		(2,031)		(714)
Total change in Flex gross profit	$	(4,627)	$	(579)	$	(14,956)	$	(4,229)

SG&A Expenses. Total compensation, commissions, payroll taxes and benefit costs as a percentage of SG&A represented 84.1% and 84.4% for the three and nine months ended September 30, 2025, respectively, as compared to 84.5% and 84.2% for the comparable periods in 2024, respectively. Commissions and other bonus incentives are variable costs driven primarily by revenue and gross profit levels. Therefore, as those levels change, these expenses would also generally be anticipated to change.

The following table presents certain components of SG&A as a percentage of total revenue:


(in thousands)	2025		% of Revenue		2024		% of Revenue
Three Months Ended September 30,
Compensation, commissions, payroll taxes and benefits costs	$	63,849	19.2	%	$	66,188	18.7	%
Other (1)	12,035		3.6	%	12,120		3.5	%
Total SG&A	$	75,884	22.8	%	$	78,308	22.2	%
Nine Months Ended September 30,
Compensation, commissions, payroll taxes and benefits costs	$	190,229	19.1	%	$	197,221	18.6	%
Other (1)	35,190		3.5	%	36,995		3.5	%
Total SG&A	$	225,419	22.6	%	$	234,216	22.1	%

(1) Includes items such as credit loss expense, lease expense, professional fees, travel, communication and office-related expense, and certain other expenses.

SG&A as a percentage of revenue increased 60 and 50 basis points for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in 2024.

For compensation and related expenses, we continue to experience a degree of SG&A deleverage as we continue to make investments in our strategic priorities and retain our most productive associates to strategically position the Firm to capture an increased market share when the demand environment improves. We also experienced an increase in healthcare costs during the nine months ended September 30, 2025, as compared to the same period in 2024. To mitigate the pressure on our profitability levels from the revenue and gross profit declines, we continue to take certain actions to align our costs such as balancing revenue levels against productivity expectations and tight discretionary spend control.

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. The following table presents depreciation and amortization expense and percentage change over the prior period by major category:


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2025		Increase (Decrease)		2024		2025		Increase (Decrease)		2024
Fixed asset depreciation	$	641	(20.1)	%	$	802	$	2,015	(16.8)	%	$	2,421
Capitalized software amortization	730		(1.5)	%	741		2,210		10.0	%	2,010
Total Depreciation and amortization	$	1,371	(11.1)	%	$	1,543	$	4,225	(4.6)	%	$	4,431

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Other Expense, Net. Other expense, net was $0.8 million and $0.4 million for the three months ended September 30, 2025 and 2024, respectively. Other expense, net was $2.4 million and $1.6 million for the nine months ended September 30, 2025 and 2024, respectively. Other expense, net primarily includes interest expense related to outstanding borrowings under our credit facility.

Income Tax Expense. Income tax expense as a percentage of income before income taxes (our “effective tax rate”) was 24.3% and 25.1% for the nine months ended September 30, 2025 and 2024, respectively. The primary driver for the decrease relates to increased research and development tax credits associated with our strategic priorities.

Non-GAAP Financial Measures

Revenue Growth Rates. “Revenue growth rates,” a non-GAAP financial measure, is defined by Kforce as revenue growth after removing the impacts on reported revenues from the changes in the number of billing days. Management believes this data is particularly useful because it aids in evaluating revenue trends over time. The impact of billing days is calculated by dividing each comparative period’s reported revenues by the number of billing days for the respective period to arrive at a per billing day amount for each quarter. Growth rates are then calculated using the per billing day amounts as a percentage change compared to the respective period. Management calculates the number of billing days for each reporting period based on the number of holidays and business days in the quarter.


	Sequential Growth Rates (GAAP)
	2025			2024
	Q3	Q2	Q1	Q4	Q3
Technology Flex	(1.2)%	1.8%	(3.7)%	(2.5)%	(0.6)%
FA Flex	6.9%	2.1%	(12.8)%	(2.7)%	(4.1)%
Total Flex revenue	(0.7)%	1.8%	(4.3)%	(2.5)%	(0.8)%
	Sequential Growth Rates (Non-GAAP)
	2025			2024
	Q3	Q2	Q1	Q4	Q3
Billing Days	64	64	63	62	64
Technology Flex	(1.2)%	0.2%	(5.2)%	0.6%	(0.6)%
FA Flex	6.9%	0.5%	(14.2)%	0.5%	(4.1)%
Total Flex revenue	(0.7)%	0.2%	(5.8)%	0.6%	(0.8)%


	Year-Over-Year Growth Rates (GAAP)
	2025				2024
	YTD	Q3	Q2	Q1	YTD	Q3	Q2	Q1
Technology Flex	(5.2)%	(5.5)%	(5.0)%	(5.0)%	(7.2)%	(3.6)%	(6.4)%	(11.4)%
FA Flex	(16.0)%	(7.3)%	(16.8)%	(23.2)%	(23.9)%	(20.7)%	(23.1)%	(27.2)%
Total Flex revenue	(6.0)%	(5.7)%	(5.8)%	(6.4)%	(8.7)%	(5.0)%	(7.8)%	(12.8)%
	Year-Over-Year Growth Rates (Non-GAAP)
	2025				2024
	YTD	Q3	Q2	Q1	YTD	Q3	Q2	Q1
Billing Days	191	64	64	63	192	64	64	64
Technology Flex	(4.7)%	(5.5)%	(5.0)%	(3.5)%	(7.7)%	(5.1)%	(6.4)%	(11.4)%
FA Flex	(15.6)%	(7.3)%	(16.8)%	(22.0)%	(24.3)%	(21.9)%	(23.1)%	(27.2)%
Total Flex revenue	(5.5)%	(5.7)%	(5.8)%	(4.9)%	(9.2)%	(6.5)%	(7.8)%	(12.8)%

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Free Cash Flow. “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. Management believes this provides an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows and is useful information to investors as it provides a measure of the amount of cash generated from the business that can be used for strategic opportunities, including investing in our business, repurchasing common stock, paying dividends or making acquisitions. Free Cash Flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. Therefore, we believe it is important to view Free Cash Flow as a complement to, but not a replacement of, our Unaudited Condensed Consolidated Statements of Cash Flows.

The following table presents Free Cash Flow:


	Nine Months Ended September 30,
(in thousands)	2025		2024
Net cash provided by operating activities	$	41,937	$	65,084
Capital expenditures	(11,798)		(8,501)
Free cash flow	30,139		56,583
Change in debt	32,300		(14,700)
Repurchases of common stock	(41,450)		(21,189)
Cash dividends	(20,778)		(21,282)
Proceeds from company-owned life insurance	1,383		2,377
Premiums paid for company-owned life insurance	(686)		(1,777)
Other	(5)		(4)
Change in cash and cash equivalents	$	903	$	8

Adjusted EBITDA. “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; and income tax expense. 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. Adjusted EBITDA is a key measure used by management to assess our operations including our ability to generate cash flows and our ability to repay our debt obligations, and management believes it provides a good metric of our core profitability in comparing our performance to our competitors, as well as our performance over different time periods. 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 unaudited condensed 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.

In addition, although we excluded stock-based compensation expense because it is a non-cash expense, we expect to continue to incur stock-based compensation expense in the future and the associated stock issued may result in an increase in our outstanding shares of stock, which may result in the dilution of our shareholder ownership interest. We suggest that you evaluate these items and the potential risks of excluding such items when analyzing our financial position.

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The following table presents Adjusted EBITDA and includes a reconciliation of Net income to Adjusted EBITDA:


(in thousands)	2025		2024
Three Months Ended September 30,
Net income	$	11,068	$	14,209
Depreciation and amortization	1,371		1,543
Stock-based compensation expense	3,034		3,549
Interest expense, net	758		429
Income tax expense	3,176		4,078
Adjusted EBITDA	$	19,407	$	23,808
Nine Months Ended September 30,
Net income	$	29,662	$	39,353
Depreciation and amortization	4,225		4,431
Stock-based compensation expense	10,308		10,548
Interest expense, net	2,340		1,589
Income tax expense	9,507		13,201
Adjusted EBITDA	$	56,042	$	69,122

LIQUIDITY AND CAPITAL RESOURCES

To meet our capital and liquidity requirements, we primarily rely on our operating cash flows, as well as borrowings under our credit facility. At September 30, 2025 and December 31, 2024, we had $65.0 million and $32.7 million outstanding under our Amended and Restated Credit Facility, respectively, and the borrowing availability was $134.0 million and $166.3 million, respectively, subject to certain covenants. At September 30, 2025, Kforce had $101.7 million in working capital compared to $112.9 million at December 31, 2024.

Cash Flows

Our business has historically generated a significant amount of operating cash flows, which allows us to balance deploying available capital towards: (i) investing in our strategic priorities that we expect will accelerate future revenue growth and profitability levels; (ii) our dividend and share repurchase programs; and (iii) maintaining sufficient liquidity for potential acquisitions or other strategic investments.

Cash provided by operating activities was $41.9 million during the nine months ended September 30, 2025, as compared to $65.1 million during the nine months ended September 30, 2024. 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 in cash provided by operating activities was primarily driven by 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.

Cash used in investing activities was $11.1 million during the nine months ended September 30, 2025, and primarily consisted of cash used for capital expenditures of $11.8 million, partially offset by proceeds from company-owned life insurance of $1.4 million. Cash used in investing activities during the nine months ended September 30, 2024 was $7.9 million and primarily consisted of cash used for capital expenditures of $8.5 million and premiums paid on company-owned life insurance policies of $1.8 million, partially offset by proceeds from company-owned life insurance of $2.4 million.

Cash provided by financing activities was $29.9 million during the nine months ended September 30, 2025, as compared to $57.2 million of cash used in financing activities during the nine months ended September 30, 2024. This change was primarily driven by the net proceeds on our Amended and Restated Credit Facility, partially offset by an increase in repurchases of common stock.

The following table presents the cash flow impact of the common stock repurchase activity:


	Nine Months Ended September 30,
(in thousands)	2025		2024
Open market repurchases	$	41,160	$	20,729
Repurchased shares withheld for tax withholding upon vesting of restricted stock	290		460
Total cash flow impact from Repurchases of common stock	$	41,450	$	21,189
Cash paid in current year for settlement of prior year repurchases	$	260	$	920

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During the nine months ended September 30, 2025 and 2024, Kforce’s Board of Directors (the “Board”) declared and paid quarterly dividends of $20.8 million ($1.17 per share) and $21.3 million ($1.14 per share), respectively, which represents a 3% increase on a per share basis. While the Board has declared and paid quarterly dividends since the fourth quarter of 2014, and intends to in the foreseeable future, dividends 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.

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. However, a material deterioration in the macroeconomic environment or market conditions, among other things, could adversely affect operating results and liquidity, as well as the ability of our lenders to fund borrowings. Actual results could also differ materially from those indicated as a result of a number of factors, including the use of currently available resources for capital expenditures, investments, additional common stock repurchases or dividends.

Credit Facility

On October 20, 2021, the Firm entered into the 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. At September 30, 2025, $65.0 million was outstanding and $134.0 million was available on our Amended and Restated Credit Facility, and at December 31, 2024, $32.7 million was outstanding. At September 30, 2025, we were in compliance with all of the covenants contained in the Amended and Restated Credit Facility as described in our 2024 Annual Report on Form 10-K, and we currently expect that we will be able to maintain compliance with these covenants.

Stock Repurchases

In October 2025, the Board approved an increase in our stock repurchase authorization, bringing the total authorization to $100.0 million. During the nine months ended September 30, 2025, Kforce repurchased approximately 950 thousand shares of common stock on the open market at a total cost of approximately $41.1 million. In addition, $22.3 million remained available for further repurchases under the Board-authorized common stock repurchase program at September 30, 2025.

Contractual Obligations and Commitments

Other than the changes described elsewhere in this Quarterly Report, there have been no material changes during the period covered by this report on Form 10-Q to our contractual obligations previously disclosed in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2024 Annual Report on Form 10-K.

CRITICAL ACCOUNTING ESTIMATES

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our unaudited condensed consolidated financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amount of assets, liabilities, revenues, expenses and the related disclosures. Our assumptions, estimates and judgments are based on historical experience, current trends and other factors that management believes to be relevant at the time our unaudited condensed consolidated financial statements are prepared. Management regularly reviews the accounting policies, estimates, assumptions and judgments to ensure that our unaudited condensed consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

NEW ACCOUNTING STANDARDS

Refer to Note A - “Summary of Significant Accounting Policies” in the Notes to the Unaudited Condensed Consolidated Financial Statements, included in Item 1. Financial Statements of this report for a discussion of new accounting standards.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

With respect to our quantitative and qualitative disclosures about market risk, there have been no material changes to the information included in Part II, Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” in our 2024 Annual Report on Form 10-K.

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ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As of September 30, 2025, we carried out an evaluation required by Rules 13a-15 and 15d-15 under the Exchange Act (the “Evaluation”), under the supervision and with the participation of our CEO and CFO, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 and 15d-15 under the Exchange Act (“Disclosure Controls”). Based on the Evaluation, our CEO and CFO concluded that the design and operation of our Disclosure Controls were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (2) accumulated and communicated to management, including the principal executive officer and the principal financial officer, as appropriate, to allow timely decisions regarding disclosure.

Changes in Internal Control over Financial Reporting

Management has evaluated, with the participation of our CEO and CFO, whether any changes in our internal control over financial reporting that occurred during our last fiscal quarter have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation we conducted, management has concluded that no such changes have occurred.

Inherent Limitations of Internal Control Over Financial Reporting

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

CEO and CFO Certifications

Exhibits 31.1 and 31.2 are the Certifications of the CEO and the CFO, respectively. The Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section contains the information concerning the Evaluation referred to in the Section 302 Certifications and this information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

ITEM 1A. RISK FACTORS.

There have been no material changes in the risk factors previously disclosed in our 2024 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Purchases of Equity Securities by the Issuer

Purchases of common stock under the Board authorized stock repurchase plan (the “Plan”) are subject to certain price, market, volume and timing constraints, which are specified in the Plan.

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The following table presents information with respect to our repurchases of Kforce common stock during the three months ended September 30, 2025:


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
July 1, 2025 to July 31, 2025	38,447	$	37.04	38,447	$	30,349,612
August 1, 2025 to August 31, 2025	100,084	$	32.29	99,129	$	27,148,895
September 1, 2025 to September 30, 2025	156,843	$	30.61	156,843	$	22,347,693
Total	295,374	$	32.02	294,419	$	22,347,693

(1) Includes 955 repurchased shares withheld for tax withholding upon vesting of restricted stock for the period from August 1, 2025 to August 31, 2025.

(2) In October 2025, the Board approved a change to the Plan increasing the available authorization to $100 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

New Credit Facility

The foregoing description of the Credit Facility is qualified in its entirety by the terms of the agreement. The Credit Agreement is attached as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

Insider Trading Arrangements

During the three months ended September 30, 2025, none of the Company’s officers or directors adopted or terminated any contract, instruction, or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.

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ITEM 6. EXHIBITS.


Exhibit Number			Description
3.1			Amended and Restated Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 33-91738) filed with the SEC on April 28, 1995.
3.1a			Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended.
3.1b			Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended.
3.1c			Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended.
3.1d			Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on May 17, 2000.
3.1e			Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-26058) filed with the SEC on March 29, 2002.
3.2			Amended & Restated Bylaws, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on April 29, 2013.
1 0.1²			Credit Agreement, dated November 5, 2025, between Kforce Inc. and its subsidiaries and Bank of America, N.A., and the lenders referred to therein.
1 9²			Amended and Restated Insider Trading Policy, effective September 1, 2025.
31.1²			Certification by the Chief Executive Officer of Kforce Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2²			Certification by the Chief Financial Officer of Kforce Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			Certification by the Chief Executive Officer of Kforce Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 as furnished herewith.
32.2			Certification by the Chief Financial Officer of Kforce Inc. pursuant to 18 U.S.C. Section 2350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 as furnished herewith.
101.1			The following material from this Quarterly Report on Form 10-Q of Kforce Inc. for the period ended September 30, 2025, formatted in XBRL Part I, Item 1 of this Form 10-Q formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Statements of Operations; (ii) Unaudited Condensed Consolidated Balance Sheets; (iii) Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity; (iv) Unaudited Condensed Consolidated Statements of Cash Flows; and (v) related notes to these financial statements.
104			Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101.


²			Filed herewith.
*			Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

KFORCE INC.

Date:

November 5, 2025

By:

/s/ JEFFREY B. HACKMAN

Jeffrey B. Hackman

Chief Financial Officer

(Principal Financial and Accounting Officer)