KELLY SERVICES INC (KELYA)
SIC breadcrumb: Services > Business Services > SIC 7363 Services-Help Supply Services
SEC company page: https://www.sec.gov/edgar/browse/?CIK=55135. Latest filing source: 0000055135-26-000053.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 4,250,900,000 | USD | 2025 | 2026-02-12 |
| Net income | -254,100,000 | USD | 2025 | 2026-02-12 |
| Assets | 2,250,600,000 | USD | 2025 | 2026-02-12 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000055135.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2014 | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 5,374,400,000 | 5,513,900,000 | 5,355,600,000 | 4,516,000,000 | 4,909,700,000 | 4,835,700,000 | 4,331,800,000 | 4,250,900,000 | ||
| Net income | 23,700,000 | 53,800,000 | 71,600,000 | 22,900,000 | 112,400,000 | -72,000,000 | 156,100,000 | 36,400,000 | -600,000 | -254,100,000 |
| Operating income | 21,900,000 | 66,700,000 | 83,300,000 | 87,400,000 | 81,800,000 | -93,600,000 | 48,600,000 | 24,300,000 | -15,100,000 | -69,800,000 |
| Gross profit | 908,400,000 | 920,300,000 | 954,100,000 | 972,200,000 | 968,400,000 | 827,600,000 | 919,200,000 | 961,400,000 | 882,600,000 | 853,000,000 |
| Diluted EPS | 0.61 | 1.39 | 1.81 | 0.58 | 2.84 | -1.83 | 3.91 | 0.98 | -0.02 | -7.24 |
| Operating cash flow | -70,000,000 | 25,300,000 | 70,800,000 | 61,400,000 | 102,200,000 | 186,000,000 | 85,000,000 | 76,700,000 | 26,900,000 | 122,600,000 |
| Capital expenditures | 21,700,000 | 16,900,000 | 24,600,000 | 25,600,000 | 20,000,000 | 15,500,000 | 11,200,000 | 15,300,000 | 11,100,000 | 8,500,000 |
| Dividends paid | 7,600,000 | 7,700,000 | 11,600,000 | 11,800,000 | 11,900,000 | 3,000,000 | 4,000,000 | 11,000,000 | 10,900,000 | 11,000,000 |
| Assets | 1,917,900,000 | 1,939,600,000 | 2,378,200,000 | 2,314,400,000 | 2,480,600,000 | 2,561,900,000 | 2,894,200,000 | 2,581,600,000 | 2,632,300,000 | 2,250,600,000 |
| Stockholders' equity | 833,700,000 | 895,400,000 | 1,151,500,000 | 1,159,500,000 | 1,264,500,000 | 1,203,000,000 | 1,336,200,000 | 1,253,700,000 | 1,234,600,000 | 976,500,000 |
| Cash and cash equivalents | 83,100,000 | 42,200,000 | 32,500,000 | 35,300,000 | 25,800,000 | 223,000,000 | 112,700,000 | 125,800,000 | 39,000,000 | 33,000,000 |
| Free cash flow | -91,700,000 | 8,400,000 | 46,200,000 | 35,800,000 | 82,200,000 | 170,500,000 | 73,800,000 | 61,400,000 | 15,800,000 | 114,100,000 |
Ratios
| Metric | 2014 | 2016 | 2017 | 2018 | 2019 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 1.33% | 0.42% | 2.10% | -1.59% | 3.18% | 0.75% | -0.01% | -5.98% | ||
| Operating margin | 1.55% | 1.59% | 1.53% | -2.07% | 0.99% | 0.50% | -0.35% | -1.64% | ||
| Return on equity | 2.84% | 6.01% | 6.22% | 1.97% | 8.89% | -5.99% | 11.68% | 2.90% | -0.05% | -26.02% |
| Return on assets | 1.24% | 2.77% | 3.01% | 0.99% | 4.53% | -2.81% | 5.39% | 1.41% | -0.02% | -11.29% |
| Current ratio | 1.50 | 1.50 | 1.49 | 1.56 | 1.59 | 1.67 | 1.45 | 1.59 | 1.65 | 1.54 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000055135.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-07-03 | 0.06 | reported discrete quarter | ||
| 2022-Q3 | 2022-10-02 | -0.43 | reported discrete quarter | ||
| 2023-Q1 | 2023-04-02 | 0.29 | reported discrete quarter | ||
| 2023-Q2 | 2023-07-02 | 1,217,200,000 | 7,500,000 | 0.20 | reported discrete quarter |
| 2023-Q3 | 2023-10-01 | 1,118,000,000 | 6,600,000 | 0.18 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 1,232,200,000 | 11,400,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 1,045,100,000 | 25,800,000 | 0.70 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 1,057,500,000 | 4,600,000 | 0.12 | reported discrete quarter |
| 2024-Q3 | 2024-09-29 | 1,038,100,000 | 800,000 | 0.02 | reported discrete quarter |
| 2024-Q4 | 2024-12-29 | 1,191,100,000 | -31,800,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-30 | 1,164,900,000 | 5,800,000 | 0.16 | reported discrete quarter |
| 2025-Q2 | 2025-06-29 | 1,101,800,000 | 19,000,000 | 0.52 | reported discrete quarter |
| 2025-Q3 | 2025-09-28 | 935,000,000 | -150,100,000 | -4.26 | reported discrete quarter |
| 2025-Q4 | 2025-12-28 | 1,049,200,000 | -128,800,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-29 | 1,040,700,000 | -5,900,000 | -0.17 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0000055135-26-000115.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Executive Overview In the first quarter, we achieved results that were in line with our expectations, reflecting our ongoing focus on stabilizing the business. In ETM, revenue trends improved sequentially from the fourth quarter, driven by growth in Talent Solutions across the MSP, RPO, and PPO offerings. In SET, we delivered another quarter of year-over-year growth in our Telecom specialty, and Science & Clinical improved sequentially. In Education, we continued to experience pressure from delayed contract decisions, enrollment declines, and elevated weather-related school closures. Our results continue to reflect reduced volumes in parts of our portfolio driven by lower demand among certain large customers and a more measured approach to hiring among employers in some sectors, primarily in response to the dynamic macroeconomic environment. The impact of demand reductions among three large customers, which we disclosed in the second quarter of 2025, remains visible in the results of ETM. Staffing volumes in SET associated with the U.S. federal government, which were materially reduced beginning in the first quarter of 2025 as a result of government efficiency actions, were stable. Throughout the first quarter, we continued to align resources with demand to address these dynamics and maintained a disciplined approach to expense management overall as part of our ongoing focus on efficiency. With trends stabilizing across the enterprise, we continued to execute strategic initiatives designed to drive organic growth and margin expansion. These include the formation of a Growth Office which has collaborated across the enterprise to lay the foundation for an integrated commercial operating framework. This framework unifies our go-to-market strategy, bringing our full suite of solutions to customers and increasing share of wallet and revenue growth. We remained on track with our technology modernization initiative in the quarter, facilitating a smooth transition following the cutover of our acquisitions in SET from their legacy technology stack to the modernized platform we acquired through our acquisition of MRP. The learnings from the initial cutover are being applied to subsequent phases to ensure we fully realize the growth and efficiency benefits of the new technology stack. Our ability to stabilize the business while driving progress on our strategic initiatives in the first quarter reflects our enhanced focus on execution and operational discipline. As demand trends improve, our progress will position us to capitalize, driving profitable growth and long-term value creation. Financial Measures Reported percentage changes are computed based on millions. Prior year percentage changes were computed based on actual amounts in thousands. Prior year percentage changes have been recast to conform to the new presentation, which is calculated based on millions. All dollar amounts are presented in millions, except for per share data. Days sales outstanding (“DSO”) represents the number of days that sales remain unpaid for the period being reported. DSO is calculated by dividing average net sales per day (based on a rolling three-month period) into trade accounts receivable, net of allowances at period end. Although secondary supplier revenues are recorded on a net basis (net of secondary supplier expense), secondary supplier revenue is included in the daily sales calculation in order to properly reflect the gross revenue amounts billed to the customer. NM (not meaningful) in the following tables is used in place of percentage changes where: the change is in excess of 500%, the change involves a comparison between earnings and loss amounts, or the comparison amount is zero. 22 Results of Operations Total Company (in millions) First Quarter 2026 2025 % Change Revenue from services $ 1,040.7 $ 1,164.9 (10.7)% Gross profit 196.4 236.5 (17.0) SG&A expenses excluding integration, realignment, restructuring charges, and depreciation and amortization 182.9 202.2 (9.5) Integration, realignment and restructuring charges 4.7 10.7 (56.1) Total SG&A expenses excluding depreciation and amortization 187.6 212.9 (11.9) Depreciation and amortization 11.7 12.8 (8.6) Total SG&A expenses 199.3 225.7 (11.7) Asset impairment charge 2.2 — NM Earnings (loss) from operations (5.1) 10.8 NM Other income (expense), net (1.6) (3.2) 50.0 Earnings (loss) before taxes (6.7) 7.6 NM Income tax expense (benefit) (0.8) 1.8 (144.4) Net earnings (loss) $ (5.9) $ 5.8 NM Gross profit rate 18.9 % 20.3 % (1.4)% First Quarter Results Revenue from services in the first quarter decreased 10.7% year-over-year with decreases in the ETM, SET, and Education segments. Compared to the first quarter of 2025, revenue from staffing services and outcome-based services decreased 12.9% and 9.7%, respectively. Revenue from talent solutions increased 3.0% and permanent placement revenue decreased 5.2% from the prior year. Gross profit decreased 17.0% year-over-year, primarily driven by lower revenue volume. The gross profit rate decreased 1.4% to 18.9%, primarily due to higher employee-related costs in the beginning part of the year. Total SG&A expenses decreased 11.7% year-over-year, primarily due to expense management actions to reduce volume-related costs and reflects the benefits of the ongoing structural actions including integration and realignment efforts. SG&A expenses in the first quarter of 2026 include $4.7 million of integration and realignment costs related to continuation of ongoing initiatives, $1.5 million of executive transition charges and $0.8 million of transaction costs primarily related to costs incurred in connection with our controlling shareholder change in the first quarter of 2026. Included in SG&A expenses in the first quarter of 2025 were $10.7 million of integration and realignment costs related to initiatives to integrate MRP and align our processes and $0.3 million of executive transition charges and $0.3 million of transaction-related costs arising from the sale of our EMEA staffing operations. Excluding integration and realignment, transaction, executive transition charges, and depreciation and amortization, SG&A expenses decreased 9.5% from the prior year. The asset impairment charge of $2.2 million in the first quarter of 2026 relates to certain right-of-use assets and reflects our ongoing realignment of our lease portfolio. Income tax benefit was $0.8 million for the first quarter of 2026 compared to income tax expense of $1.8 million for the first quarter of 2025, driven by changes in pretax income and the benefit of work opportunity tax credits in the first quarter of 2025. 23 Operating Results By Segment (in millions) First Quarter 2026 2025 % Change Revenue from Services: Enterprise Talent Management $ 459.2 $ 529.1 (13.2)% Science, Engineering & Technology 289.2 327.3 (11.6) Education 294.1 309.0 (4.8) Less: Intersegment revenue (1.8) (0.5) 260.0 Consolidated Total $ 1,040.7 $ 1,164.9 (10.7)% First Quarter Results The decrease in ETM revenue from services of 13.2% was primarily driven by a decrease of 16.9% in staffing services resulting from lower hours volume primarily at certain large customers and a decrease of 19.8% from outcome-based services primarily due to the relationship exit of a large contact-center customer that ended as of the third quarter of 2025. Permanent placement fees decreased 21.7%, reflecting lower market demand. These decreases were partially offset by an increase of 3.0% in talent solutions driven by new customer wins and volume increases. The decrease in SET revenue from services of 11.6% was primarily driven by declines in hours volume in our staffing specialties, largely from changes in demand related to U.S. federal government contractors and IT services, partially offset by an increase in permanent placement fees. The decrease in Education revenue from services of 4.8% was driven primarily by the impact of delayed contract decisions, weather-related school closures and a reduction in demand in key markets due to declines in student enrollment. First Quarter 2026 2025 % Change Gross Profit: Enterprise Talent Management $ 85.6 $ 107.3 (20.2)% Science, Engineering & Technology 71.8 83.0 (13.5) Education 39.0 46.2 (15.6) Consolidated Total $ 196.4 $ 236.5 (17.0)% Gross Profit Rate: Enterprise Talent Management 18.6 % 20.3 % (1.7)% Science, Engineering & Technology 24.8 25.4 (0.6) Education 13.3 15.0 (1.7) Consolidated Total 18.9 % 20.3 % (1.4)% First Quarter Results Gross profit for ETM decreased on lower revenue volume. The gross profit rate decreased by 1.7% primarily due to higher employee-related costs and lower permanent placement fees, partially offset by favorable changes in business mix. The SET gross profit decreased on lower revenue volume. The gross profit rate decreased by 0.6% primarily due to higher employee-related costs, partially offset by higher permanent placement fees. Gross profit for the Education segment decreased on lower revenue volume. The gross profit rate decreased by 1.7%, primarily due to higher employee-related costs as well as reductions due to changes in business mix and lower permanent placement fees. 24 Operating Results By Segment (continued) (in millions) First Quarter 2026 2025 % Change SG&A Expenses (excluding depreciation and amortization): Enterprise Talent Management $ 86.9 $ 101.0 (14.0)% Science, Engineering & Technology 57.6 69.1 (16.6) Education 26.7 26.9 (0.7) Corporate expenses 16.4 15.9 3.1 Consolidated Total $ 187.6 $ 212.9 (11.9)% First Quarter Results The 14.0% decrease in ETM SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs, lower performance-based incentive compensation, and lower shared service costs as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year. The 16.6% decrease in SET SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs and performance-based incentive compensation as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year. The 0.7% decrease in Education SG&A expenses excluding depreciation and amortization primarily related to lower performance-based incentive compensation. The 3.1% increase in Corporate expenses was primarily driven by investment in the Growth Office and other corporate initiatives and increases in our nonqualified compensation plan expense, partially offset by lower integration, realignment, and restructuring charges and performance-based incentive compensation in the first quarter of 2026 as compared to the prior year. First Quarter 2026 2025 % Change Business Unit Profit (Loss) Enterprise Talent Management $ (1.3) $ 6.3 NM Science, Engineering & Technology 12.0 13.9 (13.7) Education 12.3 19.3 (36.3) Business Unit Profit (Loss) 23.0 39.5 (41.8) Corporate (16.4) (15.9) 3.1 Depreciation and amortization (11.7) (12.8) (8.6) Consolidated total earnings (loss) from operations $ (5.1) $ 10.8 NM First Quarter Results ETM reported a loss of $1.3 million compared to profit of $6.3 million in the prior year. SET and Education reported profit of $12.0 million and $12.3 million, respectively, which decreased compared to the prior year. Declines in business unit profit (loss) are primarily due to lower revenue and gross profit, partially offset by lower SG&A expenses. 25 Financial Condition Historically, we have financed our operations through ca [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Executive Overview In 2025, Kelly continued to advance its multi-year transformation, building on the decisive actions taken in 2023 and 2024 to streamline the portfolio, sharpen strategic focus, and expand into higher-margin, higher-growth specialties. We remained focused on capturing a greater share of growth, converting a higher proportion of revenue into bottom-line performance, and positioning Kelly to benefit from an eventual recovery in the staffing environment. Kelly entered 2025 with a simplified operating model concentrated on North American staffing, business process outsourcing (“BPO”) and specialty solutions and global Managed Service Provider (“MSP”) and recruitment process outsourcing (“RPO”) offerings, following the 2024 sale of its European staffing operations and the Ayers Group and acquisition of Motion Recruitment Partners (“MRP”) and Children’s Therapy Center (“CTC”). These portfolio actions reflected a deliberate shift toward businesses with more attractive growth profiles, scalable platforms, and improved EBITDA margin potential. We continued to execute our refreshed go-to-market strategy, designed to deliver the full suite of Kelly solutions to large enterprise customers and capture a greater share of wallet while maintaining high service levels for customers of all sizes. This strategy was supported by ongoing commitment to delivering greater effectiveness and data-driven sales processes and initiatives. Critical to positioning Kelly for future growth was the hiring of Chris Layden as President and Chief Executive Officer in September 2025. Layden succeeded Peter Quigley, who announced his intention to retire in February 2025. Layden brings dynamic industry leadership and extensive experience leading organizations through periods of significant change, while delivering growth and strengthening competitive positioning. Layden’s hiring underscores Kelly’s commitment to enhancing its operational capabilities and service delivery while transforming its technology processes and platforms. During 2025, Kelly faced a dynamic macroeconomic environment characterized by sluggish labor market demand and policy shifts which had significant impacts on the industry, including Kelly. In the face of these headwinds, Kelly demonstrated measurable progress in cost discipline and selective market strength. At the same time, we accelerated structural and demand-driven cost optimization initiatives, including technology modernization, acquisition integration and process efficiencies to enhance execution and agility while positioning Kelly to capture market share and improve profitability when staffing market conditions stabilize. Structural cost actions, operating model simplification, acquisition integration and portfolio reshaping are expected to support continued improvement in Kelly’s growth prospects and financial profile as we move through 2026 and beyond. Financial Measures Reported percentage changes are computed based on millions. Prior year percent changes were computed based on actual amounts in thousands. Prior year percent changes have been recast to conform to the new presentation which is calculated based on millions. All dollar amounts are presented in millions except for per share data. Days sales outstanding (“DSO”) represents the number of days that sales remain unpaid for the period being reported. DSO is calculated by dividing average net sales per day (based on a rolling three-month period) into trade accounts receivable, net of allowances at the period end. Although secondary supplier revenues are recorded on a net basis (net of secondary supplier expense), secondary supplier revenue is included in the daily sales calculation in order to properly reflect the gross revenue amounts billed to the customer. NM (not meaningful) in the following tables is used in place of percentage changes where: the change is in excess of 500%, the change involves a comparison between earnings and loss amounts, or the comparison amount is zero. 26 Results of Operations Total Company (in millions) 2025 2024 % Change Revenue from services $ 4,250.9 $ 4,331.8 (1.9)% Gross profit 853.0 882.6 (3.4) SG&A expenses excluding integration, realignment, restructuring charges, and depreciation and amortization 747.1 750.8 (0.5) Integration, realignment and restructuring charges 27.8 16.1 72.7 Total SG&A expenses excluding depreciation and amortization 774.9 766.9 1.0 Depreciation and amortization 51.0 51.5 (1.0) Total SG&A expenses 825.9 818.4 0.9 Goodwill impairment charge 102.0 72.8 40.1 Asset impairment charge — 13.5 NM Gain on sale of EMEA staffing operations (4.1) (1.6) (156.3) Gain on sale of assets (1.0) (5.4) 81.5 Earnings (loss) from operations (69.8) (15.1) (362.3) Other income (expense), net (9.0) (6.8) (32.4) Earnings (loss) before taxes (78.8) (21.9) (259.8) Income tax expense (benefit) 175.3 (21.3) NM Net earnings (loss) $ (254.1) $ (0.6) NM Gross profit rate 20.1% 20.4% (0.3) pts. The total company discussion that follows focuses on 2025 results compared to 2024. For a discussion of total company 2024 results compared to 2023, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 29, 2024, filed on February 13, 2025. In the segment level discussions that follow the total company discussion, the comparative results for 2024 and 2023 have been recast to conform to the new structure. Our operating segments, which also represent our reportable segments, are based on the organizational structure for which financial results are regularly evaluated by our chief operating decision-maker (“CODM”, our CEO) to determine resource allocation and assess performance. We combined our former P&I and OCG segments into the ETM segment in the first quarter of 2025, responding to a shift in customer demand toward integrated workforce solutions and enabling a more streamlined and efficient go-to-market approach. We also realigned certain customers from the SET segment to the ETM segment to support this integrated strategy. Also in the first quarter of 2025, we moved MRP's Sevenstep business from the SET segment to the ETM segment as part of the broader integration of MRP. The 2024 and 2023 ETM and SET segment information has been recast to conform to the new structure. Our three reportable segments: (1) Enterprise Talent Management, (2) Science, Engineering & Technology and (3) Education, reflect the specialty services we provide to customers and represent how the business is organized internally. 2025 vs. 2024 Revenue from services decreased 1.9% year-over-year with decreases in the ETM and SET segments, partially offset by an increase in the Education segment and by the acquisition of MRP in May 2024. Excluding the impact from the acquisition, revenue from services decreased 6.2%. Compared to last year and excluding the impact from the acquisition, revenue from staffing services decreased 6.0% and revenue from outcome-based services decreased 9.4% from the prior year. Revenue from talent solutions increased 1.1% and permanent placement revenue decreased 20.9% from the prior year, excluding the impact from the acquisition. 27 Gross profit decreased 3.4% on lower revenue volume, partially offset by the acquisition of MRP. Excluding the impact from the acquisition, gross profit decreased 9.7%. The gross profit rate decreased 30 basis points to 20.1% and was favorably impacted by the acquisition of MRP. Excluding the acquisition, the gross profit rate declined 70 basis points. The decrease is due primarily to changes in business mix, higher employee-related costs and lower permanent placement revenue. Permanent placement revenue has higher gross profit due to very low direct costs of services and thus has a disproportionate impact on gross profit rates. The gross profit rate decreased in the ETM and SET segments and had a slight increase in the Education segment. Total selling, general and administrative (“SG&A”) expenses increased 0.9%, primarily due to the acquisition of MRP. Excluding the impact of the acquisition, SG&A expenses decreased 4.8%. Included in SG&A expenses in 2025 were $27.8 million of integration and realignment costs related to initiatives to integrate MRP and other prior acquisitions, consolidating operating segments and further aligning processes and technology. Also included in SG&A was $2.7 million of executive transition charges and $0.8 million of transaction costs. Included in SG&A expenses in 2024 were $17.9 million of transaction costs arising from the sale of our EMEA staffing operations and acquisition of MRP, $10.0 million of integration costs related to initiatives to integrate MRP and aligning Company processes and technology, $6.1 million of restructuring and transformation costs and $2.3 million of executive transition charges. Excluding the impact of the acquisition, as well as transaction, integration, restructuring and executive transition charges—and excluding depreciation and amortization—SG&A expenses decreased 4.7% primarily due to momentum on structural and demand-driven expense optimization initiatives and lower variable, performance-based incentive compensation expenses in response to lower revenue volume. Depreciation and amortization represents the total company depreciation and amortization of intangibles, including the amortization of hosted software. The goodwill impairment charge in 2025 was primarily driven by reduced demand, integration of MRP and Softworld acquisitions and the realignment of reporting units in the SET segment. The goodwill impairment charge in 2024 related to our Softworld reporting unit which delivers technology staffing and workforce services and is included in the SET segment. Changes in internal projections of financial performance due to continued challenging market conditions resulted in a lower estimated fair value for the reporting unit and an impairment charge of $102.0 million and $72.8 million for 2025 and 2024, respectively. The impairment of assets in 2024 represents the impairment of certain right-of-use (“ROU”) assets related to our leased headquarters facility. Loss from operations in 2025 totaled $69.8 million, compared to a loss from operations of $15.1 million in 2024. The decrease is primarily related to the goodwill impairment charges, increased costs for integration, realignment and restructuring activities, the impact of lower revenue and gross profits and higher SG&A as compared to the prior year. The change in other income (expense), net is primarily the result of an increase in interest expense related to the long-term debt taken on in 2024 in conjunction with the acquisition of MRP. Income tax expense was $175.3 million in 2025 compared to an income tax benefit of $21.3 million in 2024. The 2025 expense was impacted by $197.6 million of federal and state valuation allowances established against U.S. general business credit carryforwards and other deferred tax assets, and a $6.2 million impact from a non-tax deductible goodwill impairment charge. This was offset by an $18.4 million benefit from the impairment of tax-deductible goodwill. In 2024, the benefit was driven by an $18.4 million tax benefit from the impairment of tax-deductible goodwill. 28 Operating Results By Segment (in millions) 2025 2024 2025 to 2024 % Change 2023 2024 to 2023 % Change Revenue From Services: Enterprise Talent Management $ 2,005.5 $ 2,196.1 (8.7)% $ 2,214.4 (0.8)% Science, Engineering & Technology 1,240.4 1,165.7 6.4 970.6 20.1 Education 1,010.7 972.3 3.9 841.9 15.5 International — — NM 812.1 NM Less: Intersegment revenue (5.7) (2.3) (147.8) (3.3) 30.3 Consolidated Total $ 4,250.9 $ 4,331.8 (1.9)% $ 4,835.7 (10.4)% 2025 vs. 2024 ETM revenue includes the impact from the acquisition of Sevenstep, the MRP talent solutions business. Revenue excluding the acquisition decreased 9.1%. Revenue from staffing services decreased 11.7%, resulting from lower demand primarily at certain large customers and revenue from outcome-based services decreased 12.1%, primarily due to the ramping down of a large contact-center customer that has fully ended as of the third quarter of 2025, which was offset by an increase of 1.1% in talent solutions, excluding the acquisition. The increase in SET revenue from services was primarily driven by the acquisition of MRP staffing and outcome-based solutions businesses. Excluding the acquisition, revenue from services decreased 9.3%, primarily driven by lower staffing services demand related to U.S. federal government contractors. Excluding the acquisition, revenue in our outcome-based services decreased 5.5%. Permanent placement fees decreased, reflecting continued lower market demand. The increase in Education revenue from services was driven by the impact of higher fill rates and higher bill rates on stable demand for our services as compared to a year ago, partially offset by the impact of weather-related school closures early in the year. 2024 vs. 2023 The decrease in ETM revenue from services was due primarily to a 3.9% decline in staffing services resulting from lower demand, partially offset by higher bill rates. Revenue from outcome-based services decreased 0.9% due to lower demand for our call-center solutions, partially offset by higher revenue from other specialties. The increase in SET revenue from services was driven by the acquisition of MRP in May 2024. Excluding the acquisition, revenue from services decreased 6.6%, primarily due to lower demand in our staffing specialties, partially offset by higher bill rates. Excluding the acquisition, revenues from outcome-based services decreased 6.3%. The increase in Education revenue from services reflects increased demand for our services as compared to a year ago. Increased demand for our services reflects new customer wins and an increased fill rate related to demand of existing customers. International reflects the sale of our EMEA staffing operations in January 2024 and the transfer of our Mexico operations to our ETM segment. 29 Operating Results By Segment (continued) (in millions) 2025 2024 2025 to 2024 % Change 2023 2024 to 2023 % Change Gross Profit: Enterprise Talent Management $ 392.8 $ 444.9 (11.7)% $ 465.7 (4.5)% Science, Engineering & Technology 313.2 297.9 5.1 246.9 20.7 Education 147.0 139.8 5.2 128.7 8.6 International — — NM 120.1 NM Consolidated Total $ 853.0 $ 882.6 (3.4)% $ 961.4 (8.2)% Gross Profit Rate: Enterprise Talent Management 19.6 % 20.3 % (0.7) pts. 21.0 % (0.7) pts. Science, Engineering & Technology 25.3 25.6 (0.3) 25.4 0.2 Education 14.5 14.4 0.1 15.3 (0.9) International — — — 14.8 (14.8) Consolidated Total 20.1 % 20.4 % (0.3) pts. 19.9 % 0.5 pts. 2025 vs. 2024 Gross profit for the ETM segment decreased on lower revenue volume. Factors impacting the gross profit rate included higher employee-related costs and changes in business mix, which reduced the gross profit rate by 70 basis points. SET gross profit increased primarily due to the acquisition of MRP. The change in the SET gross profit rate was driven by a 50 basis point decrease reflecting the impact of changes in business mix and higher employee-related costs and a 50 basis point decrease as a result of lower permanent placement revenue, partially offset by a 70 basis point increase due to the MRP acquisition, which generates higher gross profit rates. Gross profit for the Education segment increased on higher revenue volume. The gross profit rate increased 10 basis points due to lower employee-related costs, partially offset by changes in business mix. 2024 vs. 2023 Gross profit for the ETM segment decreased on lower revenue volume. In comparison to the prior year, the gross profit rate decreased 70 basis points primarily due to changes in business mix and lower permanent placement revenue, partially offset by lower employee-related costs. SET gross profit increased resulting from the acquisition of MRP, partially offset by the decrease in revenue volume in other components of the segment. The gross profit rate increased 80 basis points due to the acquisition of MRP, which generates higher gross profit rates. This impact was partially offset by a 60 basis point decrease in the gross profit rate in other components of SET reflecting changes in business mix and lower permanent placement revenue, partially offset by lower employee-related costs. Gross profit for the Education segment increased on higher revenue volume. The gross profit rate decreased 90 basis points due primarily to changes in business mix, lower permanent placement revenue and higher employee-related costs. International reflects the sale of our EMEA staffing operations in January 2024 and the transfer of our Mexico operations to our ETM segment. 30 Operating Results By Segment (continued) (in millions) 2025 2024 2025 to 2024 % Change 2023 2024 to 2023 % Change SG&A Expenses (excluding depreciation and amortization): Enterprise Talent Management $ 373.0 $ 385.9 (3.3)% $ 432.2 (10.7)% Science, Engineering & Technology 247.1 226.7 9.0 184.8 22.7 Education 101.0 95.9 5.3 92.4 3.8 International — — NM 122.0 NM Corporate expenses 53.8 58.4 (7.9) 63.2 (7.6) Consolidated Total $ 774.9 $ 766.9 1.0% $ 894.6 (14.3)% 2025 vs. 2024 The decrease in ETM SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs and performance-based incentive compensation as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year, partially offset by the addition of the Sevenstep business and integration and realignment charges. Excluding the acquisition, expenses decreased 4.5% from the prior year. The increase in SET SG&A expenses excluding depreciation and amortization was primarily related to higher employee-related costs due to the acquisition of MRP. Excluding the acquisition, expenses decreased 6.5% from the prior year due to lower shared service costs which are included in other segment expenses and lower direct salaries reflecting expense management actions in response to lower revenue volume compared to the prior year, partially offset by an increase in integration and realignment charges in 2025 as compared to prior year restructuring and transformation costs. The increase in Education SG&A expenses excluding depreciation and amortization primarily related to increased costs to support year-over-year revenue growth. The decrease in Corporate expenses was primarily driven by lower employee-related costs and transaction costs, partially offset by an increase in integration and realignment charges in 2025 as compared to prior year. 2024 vs. 2023 The decrease in total SG&A expenses excluding depreciation and amortization in ETM includes the impact of restructuring and transformation charges and the impact from the addition of the Sevenstep business. Excluding the impact of these items, expenses decreased by 10.5% primarily due to lower direct salaries as a result of cost management in response to lower revenue volume compared to the prior year, as well as the impact of transformation-related actions. Other segment expenses declined primarily due to lower shared service costs for IT, finance, human resources and legal support and lower facilities and equipment-related costs. The increase in total SG&A expenses excluding depreciation and amortization in SET is due to the MRP acquisition. Excluding the impact from the acquisition, expenses decreased 10.3% from the prior year primarily due to lower shared service costs which are included in other segment expenses and lower direct salaries reflecting the response to lower revenue volume compared to the prior year, as well as the impact of transformation-related actions. The increase in total SG&A expenses excluding depreciation and amortization in Education is primarily due to increased direct salaries and other segment expenses as revenue levels increased and were partially offset by the impact of transformation-related actions. International reflects the sale of our EMEA staffing operations in January 2024 and the transfer of our Mexico operations to our ETM segment. The decrease in Corporate expenses includes the impact of transaction, integration and executive transition costs. Excluding these impacts, expenses decreased 12.6%. This decrease primarily reflects lower legal settlement costs and employee 31 compensation costs. Transaction, integration and executive transition costs were $21.5 million and restructuring and transformation charges were $5.1 million in 2024. Restructuring and transformation charges were $19.9 million and transaction costs were $6.9 million in 2023. 32 Operating Results By Segment (continued) (in millions) 2025 2024 2025 to 2024 % Change 2023 2024 to 2023 % Change Business Unit Profit (Loss) Enterprise Talent Management $ 19.8 $ 59.0 (66.4)% $ 31.2 89.1% Science, Engineering & Technology (35.9) (1.6) NM 62.0 NM Education 46.0 43.9 4.8 36.3 20.9 International — — NM (1.9) NM Business Unit Profit (Loss) 29.9 101.3 (70.5) 127.6 (20.6) Corporate (53.8) (58.4) (7.9) (63.2) (7.6) Asset impairment charge — (13.5) NM — NM Gain on sale of EMEA staffing operations 4.1 1.6 156.3 — NM Gain on sale of assets 1.0 5.4 (81.5) — NM Depreciation and amortization (51.0) (51.5) (1.0) (40.1) 28.4 Consolidated Total Earnings (loss) from Operations $ (69.8) $ (15.1) (362.3)% $ 24.3 NM 2025 vs. 2024 ETM reported profit decreased versus the prior year primarily due to lower revenue and gross profit with lower demand among certain large customers, partially offset by lower SG&A expenses. These results include the impact from the addition of the Sevenstep business. SET reported loss includes an increase in goodwill impairment charges and the impact of the 2024 acquisition of MRP. Excluding the goodwill impairment and acquisition impacts, SET business unit loss increased from the prior year due to lower revenue and gross profit, partially offset by lower SG&A expenses. Education reported profit increased versus the prior year primarily driven by higher revenue and gross profit driven by the impact of higher fill rates and bill rates, partially offset by an increase in SG&A expenses. Corporate expenses decreased over the prior year primarily driven by lower employee-related costs and transaction costs, partially offset by an increase in integration and realignment charges in 2025. 2024 vs. 2023 ETM reported profit increased versus the prior year due primarily to lower SG&A expenses, partially offset by lower revenue and gross profit. These results include the impact of $1.0 million of business unit profit from the addition of the Sevenstep business. SET reported profit in 2024 includes a $72.8 million goodwill impairment charge related to Softworld and $11.8 million of business unit profit from the acquisition of MRP. Excluding the goodwill impairment and acquisition impacts, the decrease in profit was essentially flat to prior year. Education reported profit increased versus the prior year primarily due to higher revenue and gross profit. International reflects the sale of our EMEA staffing operations in January 2024 and the transfer of our Mexico operations to our ETM segment. Corporate expenses decreased year-over-year primarily due to lower transformation-related charges, partially offset by higher transaction-related expenses from the sale of our EMEA staffing operations and integration costs related to the acquisition of MRP. 33 Results of Operations Financial Condition Historically, we have financed our operations through cash generated by operating activities and access to credit markets. Our working capital requirements are primarily generated from temporary employee payroll, which is generally paid weekly or monthly and customer accounts receivable, which is generally invoiced to customers weekly or monthly and is outstanding for longer periods. Since receipts from customers lag payroll payments to temporary employees, working capital requirements increase and operating cash flows may decrease substantially in periods of growth. Conversely, when economic activity slows, working capital requirements may substantially decrease and operating cash flows increase. Such increases dissipate over time if the economic downturn continues for an extended period. Cash, Cash Equivalents and Restricted Cash Cash, cash equivalents and restricted cash totaled $37.7 million at year-end 2025, compared to $45.6 million at year-end 2024. As further described below, during 2025, we generated $122.6 million of cash from operating activities, generated $22.3 million of cash from investing activities and used $161.1 million of cash for financing activities. Operating Activities In 2025, we generated $122.6 million of net cash from operating activities, as compared to generating $26.9 million in 2024 and generating $76.7 million in 2023. The increase from prior year is primarily due to decreased working capital requirements. Trade accounts receivable totaled $1.2 billion at year-end 2025 and $1.3 billion at year-end 2024. Global DSO was 61 days for 2025 and 59 days for 2024. Deferred tax expense of $168.5 million in 2025 compared to a deferred tax benefit of $27.8 million in 2024 is due to an increase in the valuation allowance on deferred tax assets in 2025. This allowance was principally due to cumulative losses in recent years, which were driven by goodwill impairment charges. Cumulative losses are a significant piece of negative evidence that limits the ability to consider other evidence, such as projections for future growth, when assessing the recoverability of deferred tax assets. Our working capital position (total current assets less total current liabilities), was $446.5 million at year-end 2025 and $539.0 million for 2024, including the impact of our 2024 acquisition of MRP of $71.2 million. The decrease in working capital is due to lower trade accounts receivable from reduced revenue and the cash collected during the year was used to pay down debt balances. The current ratio (total current assets divided by total current liabilities) was 1.5 at year-end 2025 and 1.7 at year-end 2024. Investing Activities In 2025, we generated $22.3 million of net cash for investing activities, compared to using $361.6 million in 2024 and $14.1 million in 2023. Included in cash from investing activities in 2025 is $21.8 million of cash proceeds received in connection with the settlement of the receivable related to the sale of EMEA staffing operations and $6.4 million of cash from the sale of the PersolKelly investment (see Acquisitions and Dispositions footnote). This was partially offset by $8.5 million of cash used for capital expenditures. Included in cash used for investing activities in 2024 was $431.9 million of cash used for the acquisition of MRP in May 2024 and CTC in November 2024, net of cash received, $11.1 million of cash used for capital expenditures, partially offset by $77.1 million of proceeds from the sale of the EMEA staffing operations, net of cash disposed. Included in cash used for investing activities in 2023 is $15.3 million of cash used for capital expenditures, partially offset by $2.0 million for the receipt of the final payment in connection with an investment that was sold in 2021. Capital expenditures in 2025, 2024 and 2023 primarily related to our IT infrastructure and technology programs. Financing Activities In 2025, we used $161.1 million of cash for financing activities, as compared to generating $214.8 million in 2024 and using $59.6 million in 2023. The cash used from financing activities is driven by net payments of $137.5 million in 2025 compared to 34 net proceeds of $239.4 million in 2024 on our credit facilities in connection with the acquisition of MRP. The acquisition of MRP represents the primary driver of the change in cash from 2024. The change in cash used for financing activities from 2023 to 2024 was primarily related to a decrease in Class A common stock repurchases. In 2025, we repurchased $10.0 million of our Class A common stock compared to $10.0 million in shares repurchased in 2024 and $42.2 million in 2023. Dividends paid per common share were $0.30 in 2025, 2024 and 2023. Payments of dividends are restricted by the financial covenants contained in our debt facilities. Details of this restriction are contained in the Debt footnote in the notes to our consolidated financial statements. Debt-to-total capital (total debt reported in the consolidated balance sheet divided by total debt plus stockholders’ equity) is a common ratio to measure our relative capital structure and leverage. Our ratio of debt-to-total capital was 9.4% at year-end 2025 and 16.2% at year-end 2024. 35 Liquidity We expect to meet our ongoing short-term and long-term cash requirements principally through cash generated from operations, available cash and equivalents and our credit facilities. Additional funding sources could include additional bank facilities or sale of non-core assets. To meet significant cash requirements related to our nonqualified retirement plan, we may utilize proceeds from Company-owned life insurance policies. We have historically managed our cash and debt closely to optimize our capital structure. As our cash balances build, we tend to pay down debt as appropriate, unless it is needed for organic or inorganic investments that align with our overall growth strategy. Conversely, when working capital needs grow, we tend to use corporate cash and cash available in the global cash pooling arrangement (the “Cash Pool”) first, and then access our borrowing facilities. We expect our working capital requirements to increase if demand for our services increases. We assess and monitor our liquidity and capital resources globally. We use the Cash Pool, intercompany loans, dividends, capital contributions, and local lines of credit to meet funding needs and allocate our capital resources among our various subsidiaries. We periodically review our foreign subsidiaries’ cash balances and projected cash needs. As part of those reviews, we may identify cash that we feel should be repatriated to optimize our overall capital structure. As of year-end 2025, these reviews have not resulted in specific plans to repatriate a majority of our international cash balances. We expect much of our international cash will be needed to fund working capital growth in our local operations as working capital needs, primarily trade accounts receivable, increase during periods of growth. At year-end 2025, we had $150.0 million of available capacity on our $150.0 million revolving credit facility and $105.5 million of available capacity on our $250.0 million securitization facility. The revolving credit facility carried no long-term borrowings on the floating or term benchmark lines of credit. The securitization facility carried $101.9 million of long-term borrowings and $42.6 million of standby letters of credit related to workers’ compensation. The credit facilities also include an accordion feature to increase our combined borrowing capacity by $250.0 million. Together, the revolving credit and securitization facilities provide us with committed funding capacity that may be used for general corporate purposes subject to financial covenants and restrictions. We believe our cash flow from operations, the availability of liquidity under our credit facilities, including the accordion feature which allows us to increase our borrowing capacity and our ability to access capital from financial markets will be sufficient to meet our anticipated cash requirements, while maintaining sufficient liquidity for normal operating purposes. Throughout 2025 and as of the 2025 year end, we met the debt covenants related to our revolving credit facility and securitization facility. At year-end 2025, we had additional unsecured, uncommitted short-term local credit facilities totaling $3.2 million, under which we had no borrowings. Details of our debt facilities as of the 2025 year end are contained in the Debt footnote in the notes to our consolidated financial statements. We repurchased $10.0 million of our Class A common stock in fiscal 2025 pursuant to the $50.0 million share repurchase program, which was approved by our board of directors in November 2024. A total of $30.0 million remains available under the share repurchase program as of year-end 2025. We monitor the credit ratings of our banking partners on a regular basis and have regular discussions with them. Based on our reviews and communications, we believe the risk of one or more of our banks not being able to honor commitments is insignificant. We also review the ratings and holdings of our money market funds and other investment vehicles regularly to ensure high credit quality and access to our invested cash. 36 Contractual Obligations and Commercial Commitments In addition to our discussion of liquidity and capital resources, consideration should also be given to the following contractual obligations: •Long-term debt - We maintain a revolving credit facility and securitization facility as discussed above in Liquidity. Further details regarding these facilities, including terms, rates and conditions, can be found in the Debt footnote in the notes to our consolidated financial statements. •Leases - We have operating leases for headquarters and field offices and various equipment. Our leases generally have remaining lease terms of one year to 10 years. As of December 28, 2025, we have lease payment obligations of $67.7 million, with $15.1 million payable within the next 12 months. See the Lease footnote in the notes to our consolidated financial statements for further information. •Accrued workers compensation - We have a combination of insurance and self-insurance contracts in the U.S. under which it bears the first $1.0 million of risk per accident. As of December 28, 2025, the accrual for workers' compensation claims, net of related receivables, was $46.9 million, with $20.9 million payable within the next 12 months. Management utilizes actuarial methods to estimate the future cash payments for these claims, including an allowance for incurred-but-not-reported claims. Further details can be found in the Summary of Significant Accounting Policies footnote in the notes to our consolidated financial statements. •Accrued retirement benefits - We provide nonqualified retirement plans for officers and certain other employees. As of December 28, 2025, the value of our obligations under these plans are $289.3 million, with $25.6 million payable within the next 12 months. The timing of payments related to the plans vary based on individual elections and specific plan provisions. See the Retirement Benefits footnote in the notes to our consolidated financial statements for further information. •Purchase obligations - Our purchase obligations represent unconditional commitments relating primarily to technology services and online tools which we expect to utilize generally within the next three fiscal years, in the ordinary course of business. As of December 28, 2025, the value of our non-cancelable purchase obligations is $61.5 million, with $44.0 million expected to be paid within the next 12 months. 37 Critical Accounting Estimates We prepare our consolidated financial statements in conformity with accounting principles generally accepted in the United States. In this process, it is necessary for us to make certain assumptions and related estimates affecting the amounts reported in the consolidated financial statements and the attached notes. Actual results can differ from assumed and estimated amounts. Critical accounting estimates are those that we believe require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We base our estimates on historical experience and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Judgments and uncertainties affecting the application of those estimates may result in materially different amounts being reported under different conditions or using different assumptions. We consider the following estimates to be most critical in understanding the judgments involved in preparing our consolidated financial statements. Workers’ Compensation In the U.S., we have a combination of insurance and self-insurance contracts under which we effectively bear the first $1.0 million of risk per single accident. There is no aggregate limitation on our per-accident exposure under these insurance and self-insurance programs. We establish accruals for workers’ compensation utilizing actuarial methods to estimate the undiscounted future cash payments that will be made to satisfy the claims, including an allowance for incurred-but-not-reported claims. We retain an independent consulting actuary to establish ultimate loss forecasts for the current and prior accident years of our insurance and self-insurance programs. The consulting actuary establishes loss development factors and loss rates, based on our historical claims experience as well as industry experience and applies those factors to current claims information to derive an estimate of our ultimate claims liability. In preparing the estimates, the consulting actuary may consider factors such as the nature, frequency and severity of the claims; reserving practices of our third-party claims administrators; performance of our medical cost management and return to work programs; changes in our territory and business line mix; and current legal, economic and regulatory factors such as industry estimates of medical cost trends. Where appropriate, multiple generally accepted actuarial techniques are applied and tested in the course of preparing the loss forecast. We use the ultimate loss forecasts, as developed by the consulting actuary, to establish total expected program costs for each accident year by adding our estimates of non-loss costs such as claims handling fees and excess insurance premiums. When claims exceed the applicable loss limit or self-insured retention and realization of recovery of the claim from existing insurance policies is deemed probable, we record a receivable from the insurance company for the excess amount. We evaluate the accrual quarterly and make adjustments as needed. The ultimate cost of these claims may be greater than or less than the established accrual. While we believe that the recorded amounts are reasonable, there can be no assurance that changes to our estimates will not occur due to limitations inherent in the estimation process. In the event we determine that a smaller or larger accrual is appropriate, we would record a credit or a charge to cost of services in the period in which we made such a determination. The accrual for workers’ compensation, net of related receivables which are included in prepaid expenses and other current assets and other assets in the consolidated balance sheet, was $46.9 million and $44.4 million at year-end 2025 and 2024, respectively. Business Combinations We account for business combinations using the acquisition method of accounting, in which the purchase price is allocated for assets acquired and liabilities assumed and recorded at the estimated fair values at the date of acquisition. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Management is required to make significant assumptions and estimates in determining the fair value of the assets acquired, particularly intangible assets. Purchased intangible assets are primarily comprised of acquired trade names and customer relationships that are recorded at fair value at the date of acquisition. We utilize third-party valuation specialists to assist us in the determination of the fair value of the intangibles. The fair value of trade name intangibles is determined using the relief-from-royalty method, which relies on the use of estimates and assumptions about expected future revenue growth rates, royalty rates and discount rates. The fair value of customer relationship intangibles is determined using the multi-period excess earnings method, which relies on the use of estimates and assumptions about expected future revenue growth rates, customer attrition rates, profit margins and discount rates. Determining the useful lives of intangible assets also requires judgment and are inherently uncertain. There is a measurement period of up to one year in which to finalize the fair value determinations and preliminary fair value estimates may be revised if new information is obtained during this period. 38 Income Taxes Income tax expense is based on expected income and statutory tax rates in the various jurisdictions in which we operate. Judgment is required in determining our income tax expense. Our effective tax rate includes the impact of accruals and changes to accruals that we consider appropriate, as well as related interest and penalties. A number of years may lapse before a particular matter, for which we have or have not established an accrual, is audited and finally resolved. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe that our accruals are appropriate under generally accepted accounting principles. Favorable or unfavorable adjustments of the accrual for any particular issue would be recognized as an increase or decrease to our income tax expense in the period of a change in facts and circumstances. Our current tax accruals are presented in income and other taxes in the consolidated balance sheet and long-term tax accruals are presented in other long-term liabilities in the consolidated balance sheet. Tax laws require items to be included in the tax return at different times than the items are reflected in the consolidated financial statements. As a result, the income tax expense reflected in our consolidated financial statements is different than the liability reported in our tax return. Some of these differences are permanent, which are not deductible or taxable on our tax return and some are temporary differences, which give rise to deferred tax assets and liabilities. We establish valuation allowances for our deferred tax assets when the amount of expected future taxable income is not likely to support the use of the deduction or credit. Our net deferred tax asset is recorded using currently enacted tax laws and may need to be adjusted in the event tax laws change. The U.S. work opportunity credit is allowed for wages earned by employees in certain targeted groups. The actual amount of creditable wages in a particular period is estimated, since the credit is only available once an employee reaches a minimum employment period and the employee’s inclusion in a targeted group is certified by the applicable state. As these events often occur after the period the wages are earned, judgment is required in determining the amount of work opportunity credits accrued for in each period. We evaluate the accrual regularly throughout the year and make adjustments as needed. Goodwill We test goodwill for impairment annually and whenever events or circumstances make it more likely than not that an impairment may have occurred. GAAP requires that goodwill be tested for impairment at a reporting unit level. For segments with a goodwill balance, we determine if our reporting units are the same as our operating and reportable segments based on our organizational structure or one level below our operating segments (the component level). We may first use a qualitative assessment (“step zero”) for the annual impairment test if we have determined that it is more likely than not that the fair value for one or more reporting units is greater than their carrying value. In conducting the qualitative assessment, we assess the totality of relevant events and circumstances that affect the fair value or carrying value of the reporting unit. Such events and circumstances may include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, entity-specific events and events affecting a reporting unit. If we elect to forgo the qualitative assessment for a reporting unit, goodwill is tested for impairment by comparing the estimated fair value of a reporting unit to its carrying value (“step one”). If the estimated fair value of a reporting unit exceeds the carrying value of the net assets assigned to a reporting unit, goodwill is not considered impaired and no further testing is required. If the carrying value of the net assets assigned to a reporting unit exceeds the estimated fair value of a reporting unit, goodwill is deemed impaired and is written down to the extent of the difference. For the step one quantitative test, we utilized a third-party valuation specialist to assist in determining the fair value of our reporting units using the income and market approach. Under the income approach, estimated fair value is determined based on estimated future cash flows discounted by an estimated market participant weighted-average cost of capital, which reflects the overall level of inherent risk of the reporting unit being measured. Estimated future cash flows are based on our internal projection model and reflects management’s outlook for the reporting units. Under the market approach, the use of pricing multiples derived from an analysis of comparable public companies multiplied against historical and/or anticipated financial metrics of each reporting unit was used. Assumptions and estimates about market comparables, future cash flows, discount rates and long-term growth rates are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends and internal factors such as changes in our business strategy and our internal forecasts. Our analysis used significant assumptions by reporting unit, including: expected future revenue growth rates, profit margins and discount rates. 39 Although we believe the assumptions and estimates we have made are reasonable and appropriate, different assumptions and estimates could materially impact our reported financial results. Different assumptions of the anticipated future results and growth from our business could result in an impairment charge, which would decrease operating income and result in lower asset values on our consolidated balance sheet. We completed our annual impairment test for all reporting units with goodwill in the fourth quarter of 2025. Pursuant to the segment changes in first quarter of 2025, the goodwill reporting units were reassessed (see the Segment Disclosures footnote in the notes to our consolidated financial statements). As of year-end 2025, the Company determined that there are three reporting units with assigned goodwill. The three reporting units tested in the fourth quarter of 2025 were SET, Education and RPO. The RPO reporting unit is part of the ETM segment and contains goodwill transferred from Sevenstep, (the RPO business acquired with MRP in 2024). Prior period components related to SET and Education were aggregated into one reporting unit as of year-end 2025. Because the reporting units had been reassessed during the year, and due to the goodwill impairment recognized in the third quarter of 2025, our annual goodwill impairment testing included a step one quantitative analysis for each reporting unit. As a result of the quantitative assessments, we determined that the estimated fair value of the each reporting unit exceeded its carrying value with headroom greater than 10%; therefore goodwill was not impaired as of year-end 2025 (see the Goodwill and Intangible Assets footnote in the notes to our consolidated financial statements). However, if current expectations of future revenue and profit margins are not met, or if market factors outside of our control change significantly, including discount rate, then the goodwill of our reporting units may be impaired in the future, resulting in goodwill impairment charges. As a measure of sensitivity of the fair value for the three reporting units tested in 2025, while holding all other assumptions constant, an increase in the discount rate of 100 basis points or a decrease of 100 basis points in the revenue growth rate assumptions for each forecasted period used to determine the fair value of the reporting unit would not result in an impairment of goodwill. We completed our annual impairment test for all reporting units with goodwill in the fourth quarter for the fiscal year ended 2024. For the PTS and Education reporting units, we performed step zero qualitative analyses and have concluded that there are no indications that the fair values of the PTS and Education reporting units are less than their respective carrying values and therefore no further testing was required. For the Softworld and MRP reporting units, our annual goodwill impairment testing included step one quantitative tests. As a result of the quantitative assessment, we determined that the estimated fair value of the MRP reporting unit was more than its carrying value and that the estimated fair value of the Softworld reporting unit no longer exceeded the carrying value. Softworld's 2024 financial performance was lower than internal projections due to continued challenging market conditions. As a result, management’s expectation for near-term financial performance and projected long-term growth rates were revised accordingly. These changes in circumstances were also indicators that the respective long-lived assets may not be recoverable. Softworld has definite-lived intangible assets, consisting of trade names, customer relationships and non-compete agreements, which are amortized over their estimated useful lives. We performed a long-lived asset recoverability test for Softworld and determined that undiscounted future cash flows exceeded the carrying amount of the asset group and were recoverable. Based on the result of our annual goodwill impairment test, we recorded an impairment charge of $72.8 million, which was included in goodwill impairment charge in the consolidated statements of earnings for the year ended 2024, to write-off a portion of Softworld's goodwill balance. Included in the impairment charge was an $18.4 million tax benefit associated with the impairment. The remaining goodwill balance for the Softworld reporting unit was $38.5 million as of year-end 2024. We completed our annual impairment test for all reporting units with goodwill in the fourth quarter for the fiscal year ended 2023 and as a result of the quantitative and qualitative assessments performed, we determined goodwill was not impaired as of year-end 2023. At year-end 2025 and 2024, total goodwill amounted to $202.1 million and $304.2 million, respectively. See the Goodwill and Intangible Assets footnote in the notes to our consolidated financial statements for more information. 40 Litigation Kelly is subject to legal proceedings, investigations and claims arising out of the normal course of business. Kelly routinely assesses the likelihood of any adverse judgments or outcomes to these matters, as well as ranges of probable losses. A determination of the amount of the accruals required, if any, for these contingencies is made after analysis of each known issue. Development of the analysis includes consideration of many factors including: potential exposure, the status of proceedings, negotiations, discussions with our outside counsel and results of similar litigation. The required accruals may change in the future due to new developments in each matter. For further discussion, see the Contingencies footnote in the notes to our consolidated financial statements. At year-end 2025 and 2024, the gross accrual for litigation costs amounted to $2.8 million and $1.5 million, respectively, which is included in accounts payable and accrued liabilities and in accrued workers’ compensation and other claims in the consolidated balance sheet. NEW ACCOUNTING PRONOUNCEMENTS See New Accounting Pronouncements footnote in the notes to our consolidated financial statements presented in Part II, Item 8 of this report for a description of new accounting pronouncements. 41 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain statements contained in this report and in our investor conference call related to these results are “forward-looking” statements within the meaning of the applicable securities laws and regulations. Forward-looking statements include statements which are predictive in nature, which depend upon or refer to future events or conditions, or which include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” or variations or negatives thereof or by similar or comparable words or phrases. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects and possible future actions by us that may be provided by management, including oral statements or other written materials released to the public, are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are subject to risks, uncertainties and assumptions about our Company and economic and market factors in the countries in which we do business, among other things. These statements are not guarantees of future performance and we have no specific intention to update these statements. Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The principal important risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to, (i) changing market and economic conditions, (ii) disruption in the labor market and weakened demand for human capital resulting from technological advances, loss of large corporate customers and government contractor requirements, (iii) the impact of laws and regulations (including federal, state and international tax laws), (iv) unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, (v) litigation and other legal liabilities (including tax liabilities) in excess of our estimates, (vi) our ability to achieve our business's anticipated growth strategies, (vii) our future business development, results of operations and financial condition, (viii) damage to our brands, (ix) dependency on third parties for the execution of critical functions, (x) conducting business in foreign countries, including foreign currency fluctuations, (xi) availability of temporary workers with appropriate skills required by customers, (xii) cyberattacks or other breaches of network or information technology security and (xiii) other risks, uncertainties and factors discussed in this report and in our other filings with the Securities and Exchange Commission. Actual results may differ materially from any forward-looking statements contained herein and we undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations. Certain risk factors are discussed more fully under “Risk Factors” in Part I, Item 1A of this report.