Kelly Services Q4 Earnings Miss Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy KELYA?
Source: seekingalpha
- Disappointing Earnings: Kelly Services reported a Q4 non-GAAP EPS of $0.16, missing expectations by $0.27, indicating a significant decline in profitability that may affect investor confidence.
- Revenue Decline: The company’s Q4 revenue of $1.05 billion represents an 11.8% year-over-year decrease, although it beat expectations by $20 million, the ongoing revenue decline could pressure future performance.
- Cautious Future Outlook: For Q1 2026, revenue is expected to decline between 11% to 13% year-over-year, with an adjusted EBITDA margin of approximately 1.5%, reflecting challenges in managing annual payroll tax resets.
- Gradual Improvement Expected: Despite these challenges, the company anticipates relative improvement in year-over-year performance each quarter, assuming no new material impacts, indicating a cautiously optimistic outlook for revenue and EBITDA margin growth in the second half of the year.
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Analyst Views on KELYA
Wall Street analysts forecast KELYA stock price to rise
2 Analyst Rating
2 Buy
0 Hold
0 Sell
Moderate Buy
Current: 9.780
Low
16.00
Averages
16.50
High
17.00
Current: 9.780
Low
16.00
Averages
16.50
High
17.00
About KELYA
Kelly Services, Inc. helps companies recruit and manage skilled workers and helps job seekers find work. The Company's segments include Enterprise Talent Management (ETM), Science, Engineering & Technology (SET), and Education. ETM and SET segments provide solutions, which include temporary staffing, permanent placement, outcome-based and talent. Education segment provides solutions, which include temporary staffing and permanent placement. ETM segment’s specialties include industrial, contact center, office clerical, managed service provider (MSP), recruitment process outsourcing (RPO), and payroll process outsourcing (PPO). SET segment’s specialties include engineering, science and clinical, technology and telecom. Education segment’s specialties include K-12, special ed/needs, tutoring, therapy services and executive search. Its brands include KellyConnect, RocketPower, NextGen, GTA, Softworld, Greenwood Asher & Associates, Teachers On Call and Pediatric Therapeutic Services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Kelly Services Q4 2025 Earnings Call Insights and Strategic Outlook
- Management Changes: Kelly Services has entered into an agreement with Hunt Companies to acquire a controlling stake in its Class B common stock, resulting in a reconstituted Board with four new directors, reflecting the company's strategic commitment to growth and value creation.
- Financial Performance: For Q4 2025, revenue totaled $1.1 billion, representing an 11.9% year-over-year decline, while adjusted EPS was $0.16, down significantly from $0.79 in the prior year, indicating market pressures and demand fluctuations faced by the company.
- Future Outlook: The company expects Q1 2026 revenue to decline between 11% and 13% year-over-year, but management remains optimistic about achieving modest growth in the second half of the year, emphasizing technology modernization and cost optimization as key drivers for improving profitability.
- AI and Technology Integration: The launch of the AI platform GRACE Boost has successfully enhanced customer satisfaction and recruiting efficiency, with management expressing confidence in AI's positive impact, viewing it as a long-term growth opportunity for the company.
See More
Kelly Services Declares Quarterly Dividend of $0.075
- Quarterly Dividend Announcement: Kelly Services (KELYA) declares a quarterly dividend of $0.075 per share, consistent with previous distributions, demonstrating the company's ongoing ability to maintain stable cash flow despite market challenges.
- Dividend Yield: The forward yield of 2.98% reflects the company's commitment to shareholder returns while providing investors with a relatively stable income source, enhancing its attractiveness in the current market.
- Shareholder Record Dates: The dividend will be payable on March 11, with a record date of February 25 and an ex-dividend date also on February 25, providing investors with a clear timeline for their investment decisions.
- Financial Performance Overview: Despite Kelly Services reporting a non-GAAP EPS of $0.16 for Q4 2025, missing expectations by $0.27, its revenue of $1.05 billion exceeded forecasts by $20 million, showcasing the company's resilience in revenue growth.
See More
Kelly Services Q4 Earnings Miss Expectations
- Disappointing Earnings: Kelly Services reported a Q4 non-GAAP EPS of $0.16, missing expectations by $0.27, indicating a significant decline in profitability that may affect investor confidence.
- Revenue Decline: The company’s Q4 revenue of $1.05 billion represents an 11.8% year-over-year decrease, although it beat expectations by $20 million, the ongoing revenue decline could pressure future performance.
- Cautious Future Outlook: For Q1 2026, revenue is expected to decline between 11% to 13% year-over-year, with an adjusted EBITDA margin of approximately 1.5%, reflecting challenges in managing annual payroll tax resets.
- Gradual Improvement Expected: Despite these challenges, the company anticipates relative improvement in year-over-year performance each quarter, assuming no new material impacts, indicating a cautiously optimistic outlook for revenue and EBITDA margin growth in the second half of the year.
See More
Kelly Services Reports 2025 Earnings: Revenue Decline but Significant Cash Flow Increase
- Revenue Performance: Kelly Services reported total revenue of $4.3 billion for 2025, a 1.9% decline year-over-year, primarily driven by reduced demand from U.S. federal government contractors, although the Education segment grew by 3.9%, indicating a divergence in market demand.
- Significant Cash Flow Growth: The company achieved free cash flow of $114 million in 2025, a sixfold increase from the previous year, demonstrating substantial progress in capital management and operational efficiency, thereby enhancing its capacity for future investments.
- Adjusted EBITDA Decline: The fourth quarter adjusted EBITDA was $21 million, down 51.7% year-over-year, with an EBITDA margin of 2.0%, reflecting gross margin pressure in the SET and ETM segments, necessitating measures to improve profitability.
- Shareholder Return Program: Kelly repurchased $10 million of Class A shares in Q4 2025 and declared a cash dividend of $0.075 per share, indicating the company's commitment to returning value to shareholders while maintaining financial stability.
See More
Kelly Services Set to Release Q4 Earnings
- Earnings Announcement Date: Kelly Services (KELYA) is set to announce its Q4 earnings on February 12 before market open, with a consensus EPS estimate of $0.43, reflecting a significant year-over-year decline of 47.6%, indicating substantial profitability challenges ahead.
- Revenue Decline Forecast: The expected revenue for Q4 is $1.03 billion, down 14.2% year-over-year, which highlights the company's struggles in the current economic climate and could impact its market share and future growth potential.
- Historical Performance Review: Over the past two years, Kelly Services has beaten EPS estimates 63% of the time and revenue estimates 50% of the time, demonstrating a degree of financial stability, yet the recent downward revisions raise concerns among investors.
- Estimate Revision Trends: In the last three months, there have been no upward revisions for EPS estimates and four downward revisions, while revenue estimates also saw no upward adjustments and three downward revisions, indicating a weakening confidence among analysts regarding the company's future performance.
See More
Kelly to Release Q4 and Full-Year Earnings on February 12, 2026
- Earnings Release Schedule: Kelly Services is set to announce its fourth-quarter and full-year earnings before the market opens on February 12, 2026, providing critical financial data for analyst evaluation.
- Live Conference Call: On the earnings release day, Kelly will host a conference call with financial analysts at 9 a.m. ET, where they will provide detailed insights into quarterly performance and address questions, enhancing transparency and investor communication.
- Financial Presentation: Alongside the earnings release, Kelly will publish a financial presentation, with all related materials accessible through the company's Investor Relations page on its website, ensuring broad availability of information.
- Company Background: Since its founding in 1946, Kelly has become a leading global specialty talent solutions provider, generating $4.3 billion in revenue in 2024 and connecting over 400,000 people with job opportunities, showcasing its influence across multiple industries.
See More
Kelly Services Q4 2025 Earnings Call Insights and Strategic Outlook
- Management Changes: Kelly Services has entered into an agreement with Hunt Companies to acquire a controlling stake in its Class B common stock, resulting in a reconstituted Board with four new directors, reflecting the company's strategic commitment to growth and value creation.
- Financial Performance: For Q4 2025, revenue totaled $1.1 billion, representing an 11.9% year-over-year decline, while adjusted EPS was $0.16, down significantly from $0.79 in the prior year, indicating market pressures and demand fluctuations faced by the company.
- Future Outlook: The company expects Q1 2026 revenue to decline between 11% and 13% year-over-year, but management remains optimistic about achieving modest growth in the second half of the year, emphasizing technology modernization and cost optimization as key drivers for improving profitability.
- AI and Technology Integration: The launch of the AI platform GRACE Boost has successfully enhanced customer satisfaction and recruiting efficiency, with management expressing confidence in AI's positive impact, viewing it as a long-term growth opportunity for the company.
See More
Kelly Services Declares Quarterly Dividend of $0.075
- Quarterly Dividend Announcement: Kelly Services (KELYA) declares a quarterly dividend of $0.075 per share, consistent with previous distributions, demonstrating the company's ongoing ability to maintain stable cash flow despite market challenges.
- Dividend Yield: The forward yield of 2.98% reflects the company's commitment to shareholder returns while providing investors with a relatively stable income source, enhancing its attractiveness in the current market.
- Shareholder Record Dates: The dividend will be payable on March 11, with a record date of February 25 and an ex-dividend date also on February 25, providing investors with a clear timeline for their investment decisions.
- Financial Performance Overview: Despite Kelly Services reporting a non-GAAP EPS of $0.16 for Q4 2025, missing expectations by $0.27, its revenue of $1.05 billion exceeded forecasts by $20 million, showcasing the company's resilience in revenue growth.
See More
Kelly Services Q4 Earnings Miss Expectations
- Disappointing Earnings: Kelly Services reported a Q4 non-GAAP EPS of $0.16, missing expectations by $0.27, indicating a significant decline in profitability that may affect investor confidence.
- Revenue Decline: The company’s Q4 revenue of $1.05 billion represents an 11.8% year-over-year decrease, although it beat expectations by $20 million, the ongoing revenue decline could pressure future performance.
- Cautious Future Outlook: For Q1 2026, revenue is expected to decline between 11% to 13% year-over-year, with an adjusted EBITDA margin of approximately 1.5%, reflecting challenges in managing annual payroll tax resets.
- Gradual Improvement Expected: Despite these challenges, the company anticipates relative improvement in year-over-year performance each quarter, assuming no new material impacts, indicating a cautiously optimistic outlook for revenue and EBITDA margin growth in the second half of the year.
See More
Kelly Services Reports 2025 Earnings: Revenue Decline but Significant Cash Flow Increase
- Revenue Performance: Kelly Services reported total revenue of $4.3 billion for 2025, a 1.9% decline year-over-year, primarily driven by reduced demand from U.S. federal government contractors, although the Education segment grew by 3.9%, indicating a divergence in market demand.
- Significant Cash Flow Growth: The company achieved free cash flow of $114 million in 2025, a sixfold increase from the previous year, demonstrating substantial progress in capital management and operational efficiency, thereby enhancing its capacity for future investments.
- Adjusted EBITDA Decline: The fourth quarter adjusted EBITDA was $21 million, down 51.7% year-over-year, with an EBITDA margin of 2.0%, reflecting gross margin pressure in the SET and ETM segments, necessitating measures to improve profitability.
- Shareholder Return Program: Kelly repurchased $10 million of Class A shares in Q4 2025 and declared a cash dividend of $0.075 per share, indicating the company's commitment to returning value to shareholders while maintaining financial stability.
See More
Kelly Services Set to Release Q4 Earnings
- Earnings Announcement Date: Kelly Services (KELYA) is set to announce its Q4 earnings on February 12 before market open, with a consensus EPS estimate of $0.43, reflecting a significant year-over-year decline of 47.6%, indicating substantial profitability challenges ahead.
- Revenue Decline Forecast: The expected revenue for Q4 is $1.03 billion, down 14.2% year-over-year, which highlights the company's struggles in the current economic climate and could impact its market share and future growth potential.
- Historical Performance Review: Over the past two years, Kelly Services has beaten EPS estimates 63% of the time and revenue estimates 50% of the time, demonstrating a degree of financial stability, yet the recent downward revisions raise concerns among investors.
- Estimate Revision Trends: In the last three months, there have been no upward revisions for EPS estimates and four downward revisions, while revenue estimates also saw no upward adjustments and three downward revisions, indicating a weakening confidence among analysts regarding the company's future performance.
See More
Kelly to Release Q4 and Full-Year Earnings on February 12, 2026
- Earnings Release Schedule: Kelly Services is set to announce its fourth-quarter and full-year earnings before the market opens on February 12, 2026, providing critical financial data for analyst evaluation.
- Live Conference Call: On the earnings release day, Kelly will host a conference call with financial analysts at 9 a.m. ET, where they will provide detailed insights into quarterly performance and address questions, enhancing transparency and investor communication.
- Financial Presentation: Alongside the earnings release, Kelly will publish a financial presentation, with all related materials accessible through the company's Investor Relations page on its website, ensuring broad availability of information.
- Company Background: Since its founding in 1946, Kelly has become a leading global specialty talent solutions provider, generating $4.3 billion in revenue in 2024 and connecting over 400,000 people with job opportunities, showcasing its influence across multiple industries.
See More
