Kforce Inc. Reports Slight Revenue Increase to $330.4 Million in Q1 2026

Kforce Inc. reported a slight increase in revenue for the first quarter of 2026, reaching $330.4 million, up 0.1% from $330.0 million in the same period of 2025. The company's gross profit also saw an increase, rising to $90.1 million from $88.3 million year-over-year, resulting in a gross profit margin of 27.3%, up from 26.7%. However, net income decreased by 2.7% to $7.9 million, or $0.46 per diluted share, compared to $8.1 million, or $0.45 per diluted share, in the prior year. The decline in net income was attributed to higher selling, general, and administrative (SG&A) expenses, which increased to 23.2% of revenue from 22.8% in the previous year.

In terms of operational performance, Kforce's Flex revenue, which constitutes the majority of its business, increased by 0.5% to $324.2 million, driven primarily by a rise in the number of consultants on assignment. Conversely, Direct Hire revenue fell significantly by 17.7% to $6.1 million, reflecting a decrease in placements. The company employed over 1,600 associates and had nearly 8,000 consultants on assignment as of March 31, 2026. The firm also reported a year-over-year increase in Flex gross profit margins, which improved to 25.9% from 25.0%, primarily due to better bill and pay spreads and lower healthcare costs.

Kforce's strategic initiatives included a focus on enhancing its technology and finance and accounting talent solutions, with an emphasis on serving Fortune 500 companies. The company has also been investing in its operational capabilities, including the implementation of Workday for back-office transformation and leveraging artificial intelligence to drive its strategy. The firm returned $18.6 million to shareholders through stock repurchases and dividends during the quarter, with $11.8 million spent on repurchases and $6.8 million on dividends.

Looking ahead, Kforce anticipates continued growth in the second quarter of 2026, supported by its integrated operating model and a focus on flexible workforce solutions amid ongoing economic uncertainties. The company noted that the national unemployment rate had decreased to 4.3% in March 2026, which may indicate a stabilization in the labor market. However, Kforce remains cautious about macroeconomic conditions, including geopolitical uncertainties that could impact client demand and hiring practices.

Overall, Kforce's first-quarter results reflect a mixed performance, with slight revenue growth overshadowed by a decline in net income and challenges in the Direct Hire segment. The company's strategic focus on technology and operational improvements, along with its commitment to returning capital to shareholders, positions it for potential growth in the coming quarters.