Kelly Services, Inc. reported a significant decline in financial performance for the first quarter of 2026, with total revenue from services amounting to $1,040.7 million, a decrease of 10.7% compared to $1,164.9 million in the same period last year. The company's gross profit also fell by 17.0% to $196.4 million, reflecting a gross profit rate of 18.9%, down from 20.3% in the prior year. The company recorded a net loss of $5.9 million, or $(0.17) per share, contrasting with a net income of $5.8 million, or $0.16 per share, in the first quarter of 2025.
The decline in revenue was attributed to reduced demand among large customers and a more cautious hiring approach in certain sectors, influenced by the current macroeconomic environment. Specifically, the Enterprise Talent Management (ETM) segment saw a 13.2% drop in revenue, primarily due to decreased staffing services and outcome-based services. The Science, Engineering & Technology (SET) segment experienced an 11.6% decline, while the Education segment's revenue decreased by 4.8%. The company also noted that staffing volumes related to U.S. federal government contracts remained stable despite previous reductions.
In terms of operational developments, Kelly Services has been focusing on strategic initiatives to stabilize and grow its business. The formation of a Growth Office aims to unify the company's go-to-market strategy, enhancing customer engagement and revenue growth. Additionally, the company is progressing with a technology modernization initiative, transitioning its acquisitions in SET to a new technology platform. The first quarter also included an asset impairment charge of $2.2 million related to the realignment of the company's lease portfolio.
Financially, Kelly Services reported a working capital position of $480.2 million at the end of the first quarter, an increase from the previous year. The company had cash, cash equivalents, and restricted cash totaling $29.5 million, down from $37.7 million at year-end 2025. The company generated $24.2 million from financing activities, primarily through net proceeds from credit facilities, while cash used in operating activities amounted to $25.4 million. Looking ahead, Kelly Services aims to leverage its strategic initiatives to drive organic growth and improve profitability as market conditions stabilize.
About KELLY SERVICES INC
Kelly Services, Inc. is a global workforce solutions provider specializing in temporary, permanent, and outcome-based staffing across industries such as education, science, engineering, and technology. Operating through four specialty units, it serves diverse clients worldwide, including corporations, government, and education sectors. The company emphasizes talent management, diversity, and innovative services, leveraging technology and strategic acquisitions to deliver flexible staffing, outsourcing, and consulting solutions.
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