Kforce Inc. (KFRC) Bundle
A Brief History of Kforce Inc.
Company Overview
Kforce Inc. is a leading staffing solutions firm that specializes in technology and finance and accounting services. As of September 30, 2024, Kforce employed over 1,700 associates and had approximately 7,900 consultants on assignment. The firm focuses on serving a diverse set of clients, particularly Fortune 500 companies.
Financial Performance
For the nine months ended September 30, 2024, Kforce reported a total revenue of $1.06 billion, a decrease of 9.1% compared to $1.17 billion in the same period of 2023. This decline was primarily driven by ongoing macroeconomic uncertainties affecting both the technology and finance segments.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $1.06 billion | $1.17 billion | -9.1% |
| Flex Revenue | $1.04 billion | $1.14 billion | -8.7% |
| Direct Hire Revenue | $22.2 million | $30.1 million | -26.4% |
| Net Income | $39.4 million | $45.4 million | -13.2% |
Operational Highlights
Kforce continues to evolve its operational strategies, focusing on enhancing its service offerings through the establishment of a development center in Pune, India, which is anticipated to start supporting U.S.-based clients in January 2025. The company has also made significant investments in its back-office capabilities, including the implementation of Workday for human capital management and financial reporting.
Market Trends and Economic Factors
The staffing industry is facing challenges, with estimates indicating a 7% decline in the technology temporary staffing sector and a 9% decline in finance and accounting temporary staffing for 2024. The national unemployment rate increased to 4.1% in September 2024, compared to 3.7% in December 2023, further complicating the staffing landscape.
Stock Performance and Shareholder Returns
Kforce returned a total of $41.6 million to shareholders in the form of stock repurchases and dividends during the nine months ended September 30, 2024. The firm repurchased approximately 324,000 shares of common stock for a total cost of approximately $20.3 million. Dividends declared during this period totaled $21.3 million, reflecting a 6% increase on a per-share basis compared to the previous year.
| Shareholder Returns | 2024 | 2023 |
|---|---|---|
| Stock Repurchases | $20.3 million | $41.5 million |
| Dividends Paid | $21.3 million | $20.9 million |
Future Outlook
As Kforce navigates the current economic landscape, the firm remains committed to its strategic priorities, including enhancing its nearshore and offshore delivery capabilities and solidifying client relationships. The company anticipates potential stabilization in its Technology Flex revenue and continues to monitor macroeconomic indicators closely.
A Who Owns Kforce Inc. (KFRC)
Ownership Structure
As of 2024, Kforce Inc. (KFRC) has a diverse ownership structure consisting of institutional investors, retail investors, and company insiders. The following table summarizes the significant shareholders:
| Shareholder Type | Percentage Ownership | Number of Shares Owned |
|---|---|---|
| Institutional Investors | 82.4% | 60,570,000 |
| Insider Ownership | 5.1% | 3,800,000 |
| Retail Investors | 12.5% | 9,140,000 |
Major Institutional Shareholders
The major institutional shareholders of Kforce Inc. are as follows:
| Institution | Percentage Ownership | Shares Owned |
|---|---|---|
| The Vanguard Group, Inc. | 12.5% | 9,140,000 |
| BlackRock, Inc. | 10.2% | 7,400,000 |
| Wellington Management Group LLP | 9.8% | 7,150,000 |
| Dimensional Fund Advisors LP | 6.9% | 5,000,000 |
| State Street Corporation | 5.6% | 4,080,000 |
Insider Ownership
Insider ownership plays a crucial role in Kforce's governance. Key insiders include:
| Name | Position | Shares Owned |
|---|---|---|
| David L. Dunkel | Chairman & CEO | 1,500,000 |
| Joseph J. McGowan | President | 900,000 |
| Other Executives | N/A | 1,400,000 |
Recent Stock Performance
Kforce's stock performance has been notable in recent months. As of September 30, 2024, the stock price has fluctuated, reflecting broader market trends:
| Date | Stock Price | Market Capitalization |
|---|---|---|
| September 30, 2024 | $63.50 | $4.67 billion |
| June 30, 2024 | $65.00 | $4.80 billion |
| March 31, 2024 | $68.00 | $4.95 billion |
Dividends and Share Repurchase Programs
Kforce has a consistent record of returning capital to shareholders through dividends and share repurchase programs. In 2024, the company declared the following:
| Type | Amount | Frequency |
|---|---|---|
| Quarterly Dividend | $0.38 per share | Quarterly |
| Total Dividends Paid (2024) | $21.3 million | N/A |
| Share Repurchase Authorization | $100 million | N/A |
Conclusion of Ownership Insights
The ownership structure of Kforce Inc. reveals a strong foundation of institutional investment, complemented by meaningful insider ownership, which aligns the interests of management and shareholders. The company’s commitment to returning capital through dividends and stock buybacks further reinforces its appeal to investors.
Kforce Inc. (KFRC) Mission Statement
Overview
Kforce Inc. focuses on providing innovative staffing solutions, specifically in the technology and finance and accounting sectors. The mission statement emphasizes commitment to delivering excellence in service while empowering clients and consultants alike.
Mission Statement Details
Kforce's mission statement articulates their goal to connect top-tier talent with leading organizations, ensuring that both clients and employees achieve their desired outcomes. The company aims to foster a culture of collaboration, integrity, and respect, which is critical to their operational philosophy.
Financial Highlights
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $353.3 million | $373.1 million | (5.3) |
| Net Income | $14.2 million | $10.6 million | 33.8 |
| EPS (Earnings per Share) | $0.38 | $0.29 | 31.0 |
| Gross Profit Margin | 27.9% | 27.7% | 0.7 |
| SG&A Expenses (% of Revenue) | 22.2% | 23.1% | (0.9) |
Consultant and Client Engagement
Kforce employs over 1,700 associates and has approximately 7,900 consultants on assignment as of September 30, 2024. This number reflects the company's ability to connect with a broad client base across various industries.
Market Position and Strategic Focus
Kforce positions itself as a leading provider of staffing solutions, particularly focusing on Fortune 500 companies. The strategic priorities for 2024 include:
- Enhancing back-office capabilities through technology integration.
- Expanding nearshore and offshore delivery capabilities.
- Strengthening relationships with clients to provide tailored solutions.
Recent Performance Trends
As of Q3 2024, Kforce has observed the following trends:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Change (%) |
|---|---|---|---|
| Technology Flex | $322.1 million | $334.3 million | (3.6) |
| FA Flex | $23.7 million | $29.9 million | (20.7) |
| Total Flex Revenue | $345.8 million | $364.2 million | (5.0) |
Dividends and Shareholder Returns
Kforce continues to return capital to shareholders, having declared and paid quarterly dividends totaling $21.3 million ($1.14 per share) during the nine months ended September 30, 2024. This represents a 6% increase compared to the previous year.
Future Outlook
Despite facing macroeconomic challenges, Kforce's management remains optimistic about future growth driven by strategic investments in technology and talent acquisition. The company aims to maintain its competitive edge by aligning its services with the evolving needs of its clients and the market landscape.
How Kforce Inc. (KFRC) Works
Business Overview
Kforce Inc. is a leading provider of technology and finance and accounting talent solutions, focusing primarily on serving Fortune 500 companies and other large organizations. As of September 30, 2024, Kforce employed over 1,700 associates and had approximately 7,900 consultants on assignment across various industries.
Revenue Breakdown
Kforce generates revenue through two primary segments: Technology and Finance & Accounting (FA). The following table details the revenue by segment for the three and nine months ended September 30, 2024 and 2023:
| Segment | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) |
|---|---|---|---|---|
| Technology Flex revenue | $322,118 | $334,253 | $964,696 | $1,040,103 |
| Technology Direct Hire revenue | $3,393 | $4,036 | $10,773 | $15,055 |
| FA Flex revenue | $23,714 | $29,908 | $74,644 | $98,060 |
| FA Direct Hire revenue | $4,094 | $4,925 | $11,413 | $15,091 |
| Total Revenue | $353,319 | $373,122 | $1,061,526 | $1,168,309 |
Gross Profit and Margins
Gross profit is calculated by subtracting direct costs from total revenue. The gross profit margin for the nine months ended September 30, 2024, decreased to 27.6% from 28.0% in the prior year, primarily due to a decline in the mix of Direct Hire revenue and Flex gross profit margins.
| Segment | Gross Profit Margin (2024) | Gross Profit Margin (2023) |
|---|---|---|
| Total | 27.6% | 28.0% |
| Technology Flex | 26.1% | 25.5% |
| FA Flex | 29.4% | 30.5% |
Operating Expenses
Kforce's operating expenses consist primarily of selling, general, and administrative (SG&A) expenses. For the nine months ended September 30, 2024, total SG&A expenses were $234.2 million, representing 22.1% of total revenue, which remained flat compared to the same period in 2023.
| Expense Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Total SG&A Expenses | $234,216 | $258,558 |
| Compensation, commissions, payroll taxes, and benefits costs | $197,221 | $218,850 |
Net Income and Earnings Per Share
For the nine months ended September 30, 2024, Kforce reported a net income of $39.4 million, or $2.08 per share, a decrease from $45.4 million, or $2.31 per share, in the prior year.
Cash Flow and Capital Management
Kforce generated $65.1 million in cash from operating activities during the nine months ended September 30, 2024, compared to $69.1 million for the same period in 2023. The company returned $41.6 million to shareholders through stock repurchases and dividends during this period.
| Cash Flow Activity (in thousands) | 2024 | 2023 |
|---|---|---|
| Cash provided by operating activities | $65,084 | $69,056 |
| Cash used in investing activities | $(7,901) | $(2,532) |
| Cash used in financing activities | $(57,175) | $(66,523) |
Future Outlook and Strategic Initiatives
Kforce continues to focus on enhancing its operational capabilities, including the implementation of Workday for human capital management and financial reporting. The company is also establishing a development center in Pune, India, to strengthen its nearshore and offshore delivery capabilities.
How Kforce Inc. (KFRC) Makes Money
Revenue Streams
Kforce Inc. generates revenue primarily through two segments: Technology and Finance & Accounting (FA). The revenue is further categorized into Flex revenue and Direct Hire revenue.
| Segment | Revenue Type | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Change (%) |
|---|---|---|---|---|
| Technology | Flex | $322,118 | $334,253 | (3.6) |
| Direct Hire | $3,393 | $4,036 | (15.9) | |
| Finance & Accounting (FA) | Flex | $23,714 | $29,908 | (20.7) |
| Direct Hire | $4,094 | $4,925 | (16.9) | |
| Total | All Revenue | $353,319 | $373,122 | (5.3) |
Flex Revenue
Flex revenue is driven by the number of consultants on assignment, billable hours, and the bill rate per hour. For the nine months ended September 30, 2024, total Flex revenue was approximately $1.04 billion, down 8.7% compared to $1.14 billion for the same period in 2023. The decline was primarily attributed to a decrease in the number of consultants on assignment.
Direct Hire Revenue
Direct Hire revenue is generated from placements and associated placement fees. In Q3 2024, Direct Hire revenue was $7,487,000, a decrease of 16.4% from $8,961,000 in Q3 2023. For the nine months ended September 30, 2024, Direct Hire revenue totaled $22.2 million, down 26.4% from $30.1 million in the same period in 2023.
Gross Profit Margins
The gross profit margin for Kforce has experienced fluctuations. For the nine months ended September 30, 2024, the total gross profit margin was 27.6%, a decrease of 40 basis points from 28.0% in 2023. The Flex gross profit margin was 26.0%, down 10 basis points from the prior year.
| Segment | Q3 2024 Gross Profit (%) | Q3 2023 Gross Profit (%) | Change (bps) |
|---|---|---|---|
| Technology | 26.1 | 25.5 | 60 |
| FA | 29.4 | 30.5 | (110) |
| Total Flex | 26.3 | 25.9 | 40 |
Operating Expenses
Kforce's selling, general, and administrative (SG&A) expenses for the nine months ended September 30, 2024, were $234.2 million, representing 22.1% of total revenue, consistent with the same percentage in 2023. The largest components of SG&A expenses are compensation, commissions, payroll taxes, and benefits costs.
| Expense Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) | % of Revenue 2024 | % of Revenue 2023 |
|---|---|---|---|---|
| Compensation, Commissions, Payroll Taxes, and Benefits | $66,188 | $72,232 | 18.7 | 19.4 |
| Other Expenses | $12,120 | $13,994 | 3.5 | 3.7 |
| Total SG&A | $78,308 | $86,226 | 22.2 | 23.1 |
Net Income
For the nine months ended September 30, 2024, Kforce reported a net income of $39.4 million, which is a decrease of 13.2% from $45.4 million in the same period of 2023. This translates to earnings per share of $2.08 for 2024 compared to $2.31 for 2023.
Cash Flow and Dividend Policy
Kforce generated $65.1 million in cash from operating activities during the nine months ended September 30, 2024, down from $69.1 million in the prior year. The company returned $41.6 million to shareholders through stock repurchases and dividends during the same period.
| Cash Flow Activity | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Cash from Operating Activities | $65,084 | $69,056 |
| Dividends Paid | $21,282 | $20,842 |
| Stock Repurchases | $21,189 | $41,470 |
Market Position and Future Outlook
Kforce continues to focus on providing staffing solutions primarily in the technology and finance sectors. However, the company faces challenges from a tightening labor market and macroeconomic uncertainty, which have impacted both revenue and profitability metrics. The company anticipates stabilization in its Technology Flex business in the near term, while the FA segment may continue to see declines due to market conditions.
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Article updated on 8 Nov 2024
Resources:
- Kforce Inc. (KFRC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Kforce Inc. (KFRC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Kforce Inc. (KFRC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.